DEADShort term sentimentsDEAD

vin · Posted: Thu Jul 06, 2006 8:35 pm Post subject: DEADShort term sentimentsDEAD

New here – mostly swing trading. I’ve been searching for a serious site and believe I have found it here. Mr. To’s commentaries are excellent. Let’s cut to it - I for one am spooked short term (1-3 weeks). Here are my reasons:
First, the current rally just doesn’t seem to have teeth. The move up on June 29 seemed exaggerated. It was just a big ‘Hurrah, the Fed did what we expected.’ Many read a future pause into Bernanke’s statement but who knows? It’s almost as if the market ‘willed’ a rally.
Second, after this delayed follow through day the major indexes responded with a pullback on increased volume (modest in percentage loss).
Third, two days prior (June 27th) all three indices had what I call a ‘heave day.’ They climbed over the previous day’s high only to close lower than the previous day’s low – all on increased volume.
Fourth, there was no doubt some end of the quarter window dressing and short covering.
What has happened since? Some call it consolidation; I call it distribution and selling into bounces. The accumulation volume has been anemic. Although the holiday week clouds things the leading events remain.
Lastly, the most important thing is the gut. Something makes me feel very uneasy (see below). Maybe it was the synthesis of what I mentioned above; maybe I am worried about locking in gains on this recent move up. Nevertheless, I liquidated everything except LEN as I don’t think homebuilders can get beat up much more (gee, wonder where I got that idea?).
North Korea lobbing missiles into the sea doesn’t help. I think there will be one more shakeout before we test old highs again. I don’t know if we’ll sink to (or below) the mid-June lows, but it could be painful. Predictions are pretty much worthless until events transpire. I’m only building an arguable case. The market doesn’t care or need reasons to steamroll every naysayer out there. Let the tape decide.

Side note: I was reading my Bible before the market opened and came across these verses:

“With her enticing speech she caused him to yield, with her flattering lips she seduced him. Immediately he went after her, as an ox goes to the slaughter, or as a fool to the correction of the stocks…” Proverbs 7:21-22

I don’t claim to have divine intervention on my side, and starting my day with this verse might have been what spooked me. Take it for what it’s worth, but the wording in this verse is uncanny in its application to bulls running up a blind (r)alley. The Bible remains the best book on investing ever written (not to mention the invaluable spiritual content). If you don’t have one, get one.

dash · Veteran Poster Joined: 12 Apr 2005 Posts: 473

FWIW Bernie Schaeffer is now calling for an S&P500 melt-up. He maintains hedge funds bought into the 'commodities-to-outperform-stocks' scenario and are have been shorting the market on the way up.

HenryTo · Posted: Tue Oct 17, 2006 10:36 am Post subject:

The NYSE ARMS Index hit an intraday high of over 2.25 today. This feels like a quick and much-needed correction in an ongoing rally, but we will see.

vin · Posted: Thu Sep 21, 2006 7:27 pm Post subject:

ADBE - 4d post spike and no dd's. down on decr. volume. near even overall.
CLF - 3d post/no dd's. near even.
EXP - 1d post. bit of a scary post spike pullback today.
PWAV - another up day on up volume.

Rough day. 100% exposed.

HenryTo · Posted: Wed Sep 20, 2006 10:07 pm Post subject:

Vin,

Like I said, keep up the great work. You have found a trading style that suits you and that is bringing in the money and that is not too common in this business.

Thanks for making this your "trading diary." Please keep us posted.

Best,

Henry

vin · Posted: Wed Sep 20, 2006 8:25 pm Post subject:

Henry,

My strategy is pretty much the same always (focus on high volume breakouts), but in downtrends/corrections I try to keep my selling targets tighter. I'll also keep my exposure % lower. In a 'healthy' market there are always several trades to pick from, almost daily. Since I cycle my portfolio regularly and put an even weight on each holding, I don't really need to keep capital on hand for an attractive deal. I've had beautiful looking setups tank, and so-so ones ramp up 20% in a week. I have no sure way to tell the posers from the real deal, but I cut losses and take gains quickly. Sure I might miss a multibagger but I'm having fun and making money. What you see here feeds me and my family, and this has turned into my new locale for posting my trading diary. I used to e-mail myself.

Secret: I've only been at this, as a 'full-time' trader since August '05, although I've had an interest for years.

ADBE - 3d post spike. decent bump up on incr.volume.
CLF - 2d post. small increase. just barely green overall.
EXP - new. 3.7 mil. spike on ?new board member only? got in at good price and closed strong.
PWAV - trending upward. up days (like today) with increasing volume.

100% exposed.

HenryTo · Posted: Wed Sep 20, 2006 6:29 pm Post subject:

Great trading, vin.

I realize that you have found a trading style that suits you, but I just have the following question anyway: Do you adjust your style in a buy-and-hold market? Perhaps holding on to a less than 100% long position and then always looking over your shoulders to find potential trades?

Just curious. Keep up the great job.

Henry

vin · Posted: Wed Sep 20, 2006 7:12 am Post subject:

All positions remained the same yesterday (Tues 9/19). All saw modest pullback on decreased volume.

vin · Posted: Mon Sep 18, 2006 2:27 pm Post subject:

ADBE - ended day strong on post spike day one.
CLF - 8mil share spike on Barron's article/sale rumors.
PWAV - pulled back but on lower volume.

About 70% exposed.

vin · Posted: Mon Sep 18, 2006 7:29 am Post subject:

Entered these positions Friday, 15 Sept.

ADBE - 33 million share spike on good qtr and improved outlook.
PWAV - Has put in a solid bottom and now moving up on increasing volume.

Just under 50% exposed going into the opening bell....

HenryTo · Posted: Fri Sep 15, 2006 8:10 am Post subject:

The trouble with Lowry's analysis is that it doesn't distinguish their buying and selling indicators between sectors, such as consumer discretionary, materials, energy, financials, etc.

The weakness in buying power and their "thin ice" comment probably has a lot to do with the fact that selling in the energy and metals sector has continued to be relentless over the last couple weeks. For those that are buying retail or tech, this is actually a great thing.

It also does not distinguish between buying and selling between retail investors and insiders/private equity funds and so forth. TrimTabs has consistently pounded the table about this huge divergence (the latter buying stocks while the former - the not-so-smart money continuing to sell domestic equities) - and how over time, the insiders/private equity guys have always won out. Lowry's analysis caught the capitulation by retail investors but it didn't catch the buying from insiders and private equity investors. In fact, the latter has been providing support for the market - which is frustrating the heck out of everyone for those who had been waiting for a more oversold market to buy stocks.

HenryTo · Posted: Fri Sep 15, 2006 12:21 am Post subject:

Yes, don't forget that the CPI is released tomorrow morning as well.

http://www.bls.gov/cpi/

nodoodahs · Moderator Joined: 06 May 2005 Posts: 1872

Dude, it's witching time. Means short-term traders should take a couple of days off. Relax.
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

vin · Posted: Thu Sep 14, 2006 2:17 pm Post subject:

OK, I'm spooked again. Originally planned on sitting tight but I recalled my most current fleecing and decided to hunker down again and play defense. Also I listened to that Lowry's report and the words "thin ice" just kept ringing in my head all day. We are pushing up against resistance and unless tomorrow's numbers are spectacular, I just don't see much more room up anywhere. So I secured my partial recovery and will sleep well tonight.

ANGN - took a 2.7% loss.
MCRS - hated to let this one go but it had a nice run and I'm done (+7.4%)
XMSR - did a day trade here on my MCRS sale and boosted my gain 1.48%
HD - out with 1.67% gain
BBY - out with 0.48% gain

I know I'm out really early here but I will not let anything run again until this market is screaming rally (maybe it alrealy is but that last ear boxing left me a bit deaf). We are in September/October after all. Discipline counts. If I would have held onto JOYG and DVN I'd be in tears today.

100% cash, capital secure.

vin · Posted: Wed Sep 13, 2006 2:20 pm Post subject:

ANGN - 2d post. nice rebound on decent volume. still, only near even overall.
BBY - 1d post with good showing.
HD - great 1st day post with volume moving in
MCRS - 9d post and no dd's. looking very strong.

Felt a bit elated today, but not much seeing that I only recouped a part of the big losses from the last week. Market looking healthier, but I'm still wary after last weeks fleecing. Suspect pullback tomorrow and if on low volume will remain as is.

100% exposed.

HenryTo · Posted: Wed Sep 13, 2006 7:59 am Post subject:

Hello Reid,

I wish I knew! For now, I am thinking at least to the end of this year and definitely extending at least a few months into 2007. Could this be a blowoff into 2007 - similar to the 1986 to 1987 experience we have? Possibly, but there is just no way to know right now.

Alternatively, we can also have a 1994 to 1995 scenario where the prices for growth stocks would just go up every week - especially since they have been underperforming for the last four years. I see retail investors coming back in droves before we top out - and I also see the S&P 500 making an all-time high as well. Any projections beyond one year is really a mere guess (and possibly a bad guess at that).

Take care,

Henry