Blog Feed: ProfitWaves Stock Swing Trading Service

Tuesday, September 20, 2011

Published on 2011-09-20 04:00:16

The Nasdaq continued to lead yesterday and we continue to see improving conditions amongst leading stocks. In particular, recent breakouts have involved leading blue chip companies, which is interesting given that just a week or so ago most breakouts were obscure, thinly-traded stocks.  This speaks to greater confidence with the economy. As a result of [...] > read more

Monday, September 19, 2011

Published on 2011-09-19 03:49:38

The Nasdaq has been increasingly taking on a leadership role here.  One of the main ingredients this market has been missing while it has been stuck in the choppy zone is leadership, so this is a positive development. We also saw buyers remain in control on Friday's quadruple witching options expiration last week, which may [...] > read more

Wednesday, September 14, 2011

Published on 2011-09-14 04:54:03

We can easily wax poetic here and write a brilliant analysis of market conditions covered from any number of given angles.  If we do, though, we would just be wasting your time and pumping our own egos. The fact is, the only thing traders need to focus on is the trading range we outlined yesterday, [...] > read more

Tuesday, September 13, 2011

Published on 2011-09-13 02:14:50

I apologize for the missed report yesterday. As we noted in yesterday's email, the area I'm staying in in Thailand was literally underwater.  The wifi system in my hotel was on the first floor and all equipment had to be rapidly taken apart and moved to the second floor.  The same was true of all [...] > read more

Friday, September 9, 2011

Published on 2011-09-09 00:45:02

We aren't thrilled with the early drop in BIIB yesterday, but the price quickly stuck and it appears to have been under accumulation during the bulk of the day.  We can't really know until we see what it does today as yesterday's above average volume did not move the price. The open gaps on the [...] > read more

Tuesday, July 5, 2011

Published on 2011-07-05 05:06:59

On Friday, we took profit on SMH and QQQ at the open.  In other words, we sold at the low of the day right before these two ETFs and the broader market indexes shot off like a rocket and wracked up a few more percentage points. If you look back over > read more

Friday, July 1, 2011

Published on 2011-07-01 03:04:30

We were certainly wrong about a consolidation day yesterday as prices rallied on heavy volume before the long holiday weekend. Prices are now at or at least trading in the areas of their broken 50-day averages, so while we may yet see higher prices o > read more

Thursday, June 30, 2011

Published on 2011-06-30 05:09:52

Prices followed through higher on higher volume yesterday.  Now the market is likely ready for some consolidation, so we do not expect anything too exciting over the next couple of trading days.  As we noted yesterday, as long as recent gains hold > read more

Wednesday, June 29, 2011

Published on 2011-06-29 03:48:03

If you drill back to a weekly chart view, not only are the major indexes at there most deeply oversold levels in over a year, but indicators, such as stochastics, are beginning to turn back up again, giving buy signals.  If higher prices hold up thr > read more

Tuesday, June 28, 2011

Published on 2011-06-28 04:05:16

We are at a stage where we believe it is best to not try too hard to figure out what market fundamentals mean for prices moving forward and where it is best to just focus on what market technicals are telling us instead. We are on the backside of wha > read more

Monday, June 27, 2011

Published on 2011-06-27 04:11:35

On Thursday, buyers took charge and heavily defended the 200-day average on the QQQ and bought up the SPY (which is trading slightly above its 200-day average). This was a clear technical buy signal. On Friday, however, we hesitated to jump at the bu > read more

Thursday, June 23, 2011

Published on 2011-06-23 04:11:41

The Fed didn’t make this news-driven market any easier to trade — or analyze for that matter. The day started off just as we had expected it to, but when Bernanke spoke, the market listened and sellers took the day into the close, even ca > read more

Wednesday, June 22, 2011

Published on 2011-06-22 06:35:35

The market gave us a follow through day yesterday, which negates, at least partially, the idea that the market must test the rising weekly trend before prices make a significant run higher once again. That said, the follow through day was weak as far > read more

Tuesday, June 21, 2011

Published on 2011-06-21 05:17:15

Yesterday’s up market day saw volume levels at roughly half what they were over the three previous trading days when the markets were down. The price of the QQQ stopped just below its still falling 5-day average, but the SPY fared a bit better > read more

Monday, June 20, 2011

Published on 2011-06-20 04:18:19

The weekly trendline watch is on here. We wrote about this last week, but when we wrote it, we were expecting the market to slowly grind around the current price zone for the better part of the summer as it worked its way lower into the weekly trendl > read more

Thursday, June 16, 2011

Published on 2011-06-16 04:49:55

We certainly got the retest of this week’s lows yesterday.  We also got the VIX explosion to the upside that we noted earlier this week would offer us a clue that fear is reaching the kind of panicky level that tradeable bottoms are formed in. > read more

Wednesday, June 15, 2011

Published on 2011-06-15 04:14:10

We got a technical bounce yesterday as several major indexes were at their 200-day averages. The bounce came on less than respectable volume and leading stocks were thinly-traded, obscure issues, not the major stocks that led the way over recent mont > read more

Tuesday, June 14, 2011

Published on 2011-06-14 05:12:51

It has been our assumption (one we are not married to mind you) that this recent market downturn is merely a pullback in the market's long term up trend. Thus far, nothing we have seen gives us a good reason to change this assessment. We are now near > read more

Monday, June 13, 2011

Published on 2011-06-13 04:21:00

The market is essentially a falling knife at this point and everyone knows it is a bad idea to try and catch a falling knife. Nevertheless, we are nearing a potential sticking area where the knife stops falling.  Important areas to watch here are th > read more

Friday, June 10, 2011

Published on 2011-06-10 03:28:43

Days like this are not very fun because we cannot really bring anything new to the table as far as market analysis is concerned.  The market finally bounced yesterday, but volume was low, which tells us that A) there was limited participating in the > read more

Thursday, June 9, 2011

Published on 2011-06-09 05:15:05

The 200-day averages are still in play for the major indexes.  These types of market corrections can be unpredictable though.  Sometimes you get a sharp snap back rally on the way down and other times prices just keep pushing the envelope of over e > read more

Wednesday, June 8, 2011

Published on 2011-06-08 06:14:18

The market’s failure to put together a bounce, moreover, the fact that volume has been average and no panic has yet set in, leaves the major indexes vulnerable for a test of their respective 200-day averages. We could still get a bounce, but se > read more

Published on 2011-06-07 06:02:52

Despite the fact that sellers are in control, the market remains range bound.  This means trades will continue to be prone to whipsaws (surprise reversals) and we need to be even more careful than normal when choosing our trades as well as our entri > read more

Monday, June 6, 2011

Published on 2011-06-06 05:50:36

It’s been an odd market. Last week marks the 5th week in a row the markets have experienced a down week. We haven’t had so many down weeks in a row since the 2008 bear market. Yet the price loss over this period doesn’t come close t > read more

Friday, June 3, 2011

Published on 2011-06-03 05:01:23

Choppy, directionless conditions persisted yesterday after the markets failed to follow through on Wednesday’s sell off.  Today, however, is likely to turn on the employment report.  If employment numbers are weak as expected, it could potent > read more

Thursday, June 2, 2011

Published on 2011-06-02 03:41:42

On Tuesday stocks and commodities were both up on increased volume, signaling that the recent market correction may have come to an end.  As we noted, however, Summer trading can be choppy and we weren’t willing to bite on stocks.  We reasone > read more

Tuesday, June 1, 2011

Published on 2011-06-01 04:48:51

The major indexes broke intraday resistance on volume yesterday, which puts 2011 highs back in the picture.  Given the fact that we have now moved into summer trading conditions, which can be choppier than usual, we will need to see a strong break o > read more

Monday, May 31, 2011

Published on 2011-05-31 06:18:09

Stocks have been up three days in a row now and futures are pointing to a higher opening today. However, underlying currents have been weak and participation mixed, so we aren’t convinced this mini rally is sustainable.  In fact, we expect pri > read more

Friday, May 27 2011

Published on 2011-05-27 05:52:03

Stocks are likely to be up today given it is the last trading day of the month. Nevertheless, stocks remain in corrective mode and until we either get a high volume upswing that causes a resumption of the trend or we get clearer parameters where supp > read more

Thursday, May 26, 2011

Published on 2011-05-26 04:06:53

Stock prices are still too sluggish to buy and too oversold to short, so we will continue to focus on commodities, which are working for us right now. We will be adding to our DIG position today if it can overcome its 20-day moving average.  The pri > read more

Wednesday, May 25, 2011

Published on 2011-05-25 06:10:57

Stocks remained sluggish once again, but near term and long term sentiment levels are nearing bearish extremes and indicators are near oversold extremes.  Keep in mind we are moving into the end of the month, which is typically a bullish period for > read more

Tuesday, May 24, 2011

Published on 2011-05-24 03:18:38

We apologize for not getting out a report yesterday.  I took a 29 hour flight over the weekend and hadn’t slept in two days. Stocks were never quite able to make it to overbought levels and instead dropped hard and fast to the bottom of the re > read more

Wednesday, May 18, 2011

Published on 2011-05-18 05:50:38

The major indexes found support in the area of their respective 50-day averages yesterday.  As we noted, a bounce from this level was to be expected.  The question now is, what kind of a bounce will we get?  Breadth was mixed yesterday, meaning th > read more

Tuesday, May 17, 2011

Published on 2011-05-17 04:24:03

It’s times like this when you really need to pay special attention to probabilities. Yesterday was ugly and this comes on the back of a market that has not been behaving well lately.  The QQQ and the SPY both closed under their respective 20-d > read more

Monday, May 16, 2011

Published on 2011-05-16 04:31:30

Prices remain range-bound in a one day up, one day down market.  We could write a long report, rewording what we have already written about this last week, but why waste everyone’s time rehashing old news? The levels we provided on Friday rema > read more

Friday, May 13, 2011

Published on 2011-05-13 05:27:19

Yesterday we mentioned that buyers would very likely attack the weak open given the fact that the market is choppy here, not trending. Indeed, prices closed not far off from where the week began, so once again the market is stuck in a tight range off > read more

Thursday, May 12, 2011

Published on 2011-05-12 05:28:31

It feels like Summer. Summer months are prone to low volume choppy trading conditions — of the sort we have had pretty much since mid February when prices started to whipsaw causing frustration amongst both short and long traders, while not ear > read more

Wednesday, May 11, 2011

Published on 2011-05-11 04:17:28

Everyone surely has heard the term sell in May, go away.  Considering the fact that the QQQ (Nasdaq 100) is trading just below 52-week highs and the SPY (S&P 500) isn’t far behind, it would seem that institutional investors have not heard > read more

Tuesday, May 10, 2011

Published on 2011-05-10 05:35:01

Prices were up on less than spectacular volume yesterday.  This does not encourage us to buy stocks here, but since prices are also hovering near 52-week highs, the surprises can certainly occur to the upside, making getting short a very risky trade > read more

Monday, May 9, 2011

Published on 2011-05-09 06:58:33

Commodities, such as oil, gold and silver, took a big hit last week, but stock market indexes held up fairly well, as did retail stocks and health care.  It’s probably too early to call it, but we could be seeing a rotation out of commodities > read more

Thursday, May 5, 2011

Published on 2011-05-05 06:34:13

Stocks continued to skid yesterday and leadership stocks once again were hit harder than the indexes, indicating selling below the surface. The contrarian in us however tells us to look to tomorrow’s job’s report.  The job’s report > read more

Wednesday, May 4, 2011

Published on 2011-05-04 01:52:13

The market is under pressure here as leadership stocks took a hard hit yesterday.  While the index prices held up reasonably well, leading stocks in the leading sectors were down quite heavily.  We saw this in our open positions, GPOR, JOYG and COH > read more

Tuesday, May 3, 2011

Published on 2011-05-03 05:53:52

Our sentiment indicator mentioned in yesterday's report appears to have worked.  Not only did the market not rally on the first day of the month as it has been doing for quite some time, but sellers faded the joyous open and commodities stocks took > read more

Monday, May 2, 2011

Published on 2011-05-02 04:53:11

There is a sentiment indicator we keep an eye on that we don’t want to broadcast, lest it lose its edge, that triggered last Friday.  As you may know, when sentiment becomes overly bullish, smart money is going to fade the markets by selling i > read more

Friday, April 29, 2011

Published on 2011-04-29 04:50:09

COH was on the list of stocks institutions were buying yesterday as they rotate through their books.  As we mentioned in yesterday’s report, they are buying, but they seem to be rotating through the leadership group, changing focus from one da > read more

Thursday, April 28, 2011

Published on 2011-04-28 05:48:02

Acme Packet (APKT), which we let go prior to earnings, has broken out on heavy volume.  We plan to keep this one on our radar screens for the next few weeks looking for an opportunity to buy as it is likely ready to make another leg higher after wor > read more

Wednesday, April 27, 2011

Published on 2011-04-27 06:04:27

The market continues to climb a wall of worry and the SPY finally broke above its 2007 resistance level we discussed on Monday. Volume was about 50% above average on the breakout and much higher than Monday’s weak level, indicating institutiona > read more

Tuesday, April 26, 2011

Published on 2011-04-26 00:55:40

Volume fell to its lowest levels of the year yesterday as the market looks for a catalyst. Early earnings were positive, but yesterday reports were more mixed and the market is getting nervous.  In fact, Asian markets are down on average more than 1 > read more

Monday, April 25, 2011

Published on 2011-04-25 02:14:51

The Nasdaq is trading just shy of its 2007 highs, where it was turned back into a severe bear market decline just a few short years ago. The Nasdaq 100 passed that level around the first of this year. Meanwhile, the S&P 500 is past an important r > read more

Wednesday, April 20, 2011

Published on 2011-04-20 00:24:31

On Monday we put in orders to buy JOYG and GPOR if they could prove themselves by breaking higher after showing support at their respective 50-day averages.  We were willing to buy back into the market after the market had shown really great resilie > read more

Monday, April 18, 2011

Published on 2011-04-18 03:26:22

The good news is, options expiration is behind us and the relatively boring performance of stocks over the past month have resulted in many leadership stocks building bases around their 50-day averages.  The fact that the S&P 500 hasn't sold off > read more

Thursday, April 14, 2011

Published on 2011-04-14 05:25:16

This is turning out to be a particularly treacherous options expiration week, which makes us very happy to be in cash.  As we predicted, the market did not follow through lower yesterday and instead we saw a price bounce that put prices back in line > read more

Wednesday, April 13, 2011

Published on 2011-04-13 00:38:10

This options expiration is shaping up to be a boon to option writers and a complete boor for everyone else.  Prices are in pullback mode, but the uptrend is still in tact.  The action of late has been more boring than informative, however.  Prices > read more

Tuesday, April 12, 2011

Published on 2011-04-12 00:13:10

In order to make money in the market, you need to have an edge.  In our experience, virtually any edge is lost when the market is stuck in a narrow range. For over a week now, prices have virtually traded in place, leading to misdirection moves and > read more

Monday, April 11, 2011

Published on 2011-04-10 21:08:46

The S&P 500 is still hemmed in by a fierce level of resistance. Meanwhile, the dollar’s break through multi year support levels has caused a heavy rush into gold and silver stocks given they are seen as a hedge against inflation. Realistica > read more

Friday, April 8, 2011

Published on 2011-04-08 01:10:27

All week we have been discussing the resistance level that the SPY (S&P 500) is faced with.  This resistance level, as we predicted, is arguably one of the main causes for the timid way in which investors have been reacting this week. Stock pric > read more

Thursday, April 7, 2010

Published on 2011-04-07 00:56:01

The trend is up and surprises usually occur in the direction of the trend, so selling short here is like walking the edge of a sharp blade. Nevertheless, S&P 500 resistance is causing some below-the-surface issues, which we have been warning coul > read more

Wednesday, April 6, 2011

Published on 2011-04-06 00:27:42

If you are itching to buy more stock this week, you might want to reign in your horses a bit while you step back and take a look at the bigger picture. We are happy with the performance of APKT and INFA, which both rose on increased volume yesterday, > read more

Tuesday, April 5, 2011

Published on 2011-04-05 00:09:44

Resistance levels mentioned yesterday are likely going to give us a bumpy ride unless and until buyers can soundly move prices over important levels, such as $134-$135 on the SPY ETF.  In addition, today the Fed meets and will release meeting minute > read more

Monday, April 4, 2011

Published on 2011-04-04 00:42:34

On Friday the dollar reminded us why we hate to make intraday trading decisions. UUP nearly regained broken support and had carved out a higher price high after creating a higher low in the $21.75 area.  All of this occurred on increased volume, so > read more

Friday, April 1, 2011

Published on 2011-04-01 03:29:45

All eyes on on today’s jobs report, and as long as the Department of Labor doesn’t pull an April Fool’s joke on us today by providing numbers that undercut the positive trend that appears to be developing, we should see stock prices > read more

Thursday, March 31, 2011

Published on 2011-03-30 23:06:03

We are happy with the behavior of APKT and INFA. APKT took a rest yesterday, but on decreased volume, indicating profit taking was light. INFA confirmed a continuation of its uptrend after pulling up out of a pullback on increased volume, indicating > read more

Wednesday, March 30, 2011

Published on 2011-03-30 02:38:16

After a round of distribution over the past couple of months stocks began to quickly recover after only a shallow pullback. Until late last week it wasn’t clear whether the recovery, which started March 17 was anything more than a dead cat boun > read more

Tuesday, March 28, 2011

Published on 2011-03-28 23:30:58

Stock indexes may be range bound here.  The price stopped falling, but the upside may be limited here. The big however, is that below the surface, there are quite a few leadership stocks that are breaking out.  We didn’t have the courage to p > read more

Monday, March 28, 2011

Published on 2011-03-28 01:40:43

Last week's recovery was impressive as buyers stepped in and bought bad economic news.  The week had a good gain, but volume was down for the week, which raises the risk of buying stocks after the market has now been up for six of the past seven tra > read more

Friday, March 25, 2011

Published on 2011-03-25 01:40:14

We mentioned in yesterday's report that one day does not a new trend make.  Yesterday's trading was positive, but a bit mixed.  Some of the leadership group experienced upside breakouts, but only a handful of stocks were up on volume.  Many stocks > read more

Thursday, March 24, 2011

Published on 2011-03-24 02:58:19

A common theme has been running through the market over the past two years since it put in a low in 2009 and began a steady ascent. Corrections have been shallow and short-lived making it very difficult to profit on the short side of the trade.  Las > read more

Wednesday, March 23, 2011

Published on 2011-03-23 03:54:15

Prices stopped for a pause right near the resistance levels we have been watching.  For a review, we believe the QQQQ has an important area of resistance at roughly $56 and SPY at roughly $130. If prices push higher here, it will be constructive for > read more

Tuesday, March 22, 2011

Published on 2011-03-22 02:43:16

I’m finally settled in and reports will be back on schedule. Yesterday we finally got the oversold bounce we have been expecting.  Resistance has held back prices in the zones we mentioned, but overseas markets are seeing follow through today, > read more

Published on 2011-03-18 05:01:55

Prices stabilized somewhat yesterday and with the G-7 pledging to reign in the rising Yen, world stock prices are slightly higher as we write. Meanwhile, the intermediate market trend is still down and the 20-day EMA on the QQQQ is still threatening > read more

Thursday, March 17, 2011

Published on 2011-03-17 04:19:13

The market didn’t offer a bounce beyond a small gap up at the open yesterday, but with European stocks trading significantly higher today, we may still see the bounce we predicted. The resistance levels we provided yesterday are still valid and > read more

Wednesday, March 16, 2011

Published on 2011-03-16 03:54:31

Last week, when discussing the type of correction we might get, we mentioned that it could potentially be a fast correction, like the one experienced last April, or it could be a traditional correction, which offered several bounces along the way. Ye > read more

Tuesday, March 15, 2011

Published on 2011-03-15 04:11:17

The UUP (dollar) is once again testing its lows and gold prices are rising as a result. As most of you know, we pay attention to the inverse correlation between the dollar and stock prices. Over recent years the markets rise as the dollar falls and v > read more

Monday, March 14, 2011

Published on 2011-03-14 03:55:20

On Friday, buyers stepped in and bought the low open, which makes sense given that fear levels have culminated over the past few trading days, creating a good contrarian buying opportunity for day traders and others with shorter-term time frames.  T > read more

Friday, March 11, 2011

Published on 2011-03-11 02:59:30

The NASDAQ followed the Semiconductor sector through its 50-day average yesterday on higher than average volume. This is a sell signal.  The other major indices are still above their 50-day averages, but selling volume was heavy and falling stocks o > read more

Thursday, March 10, 2011

Published on 2011-03-10 03:49:47

Stocks are down across the board overseas today following yesterday's poor showing in the markets. As we noted in our market update sent at 2 p.m. EST, market internals were very poor yesterday and leadership stocks were being taken down even as the > read more

Wednesday, March 9, 2011

Published on 2011-03-09 03:42:11

The comparison to last April is uncanny. Both times the major indices consolidated into a tight head and shoulders topping pattern just below a major level of resistance. Last April also saw a series of distribution days followed by a last ditch stab > read more

Tuesday, March 8, 2011

Published on 2011-03-08 03:19:47

The market really threw a monkey wrench into our plan this week. We saw a lower low carve out last Tuesday followed by a higher high on Friday and we were under the impression that the falling dollar would take care of all the distribution days that > read more

Monday, March 7, 2011

Published on 2011-03-07 03:50:44

Prices are down overseas today as issues in Libya escalated over the weekend. We believe this will be a “buy the dip” opportunity for several reasons, and as such we will put in a couple of low-ball orders for strong stocks that look move > read more

Friday, March 4, 2011

Published on 2011-03-04 05:19:50

Over the past two years, failed breakdowns have been pretty decent buying signals.  In all our years of trading, we have never seen such an eager base of bears who believe the market is ready to plunge back into the abyss at every given turn.  Yet > read more

Thursday, March 3, 2011

Published on 2011-03-03 02:36:53

The dollar further weakened yesterday, providing a boost of support to stocks.  It is difficult to say how the market will react initially should the dollar break down (the first reaction may be panic and selling), but in the long run, a weaker doll > read more

Wednesday, March 2, 2011

Published on 2011-03-02 03:24:26

The market suffered another major distribution day after the Fed expressed concern over higher oil prices. The major indexes now all have potential head and shoulders top patterns developing -- though you have to be rather imaginative to see them as > read more

Tuesday, March 1, 2011

Published on 2011-03-01 03:44:15

Unfortunately, there are not a lot of promising charts out there this week. The best opportunities to buy were last week when a large number of leadership stocks, as well as market indices, were bumping around at their respective 50-day averages. Now > read more

Monday, February 28, 2011

Published on 2011-02-28 04:56:25

Stocks followed through higher on Friday, giving us an immediate profit in our QLD position. Theoretically, the NASDAQ 100, and subsequently, QLD, are now at resistance. Price action was a bit tepid on Friday as leadership stocks were mixed and volum > read more

Friday, February 25, 2011

Published on 2011-02-25 02:59:37

There isn’t much to add to yesterday’s comments other than to point out that the 50-day averages on the major indexes have seen good buying activity. As such, we are bumping up our QLD order and will be buying at today’s open. Unles > read more

Published on 2011-02-24 04:16:24

A lot of stocks are tagging their 50-day averages here.  We've seen two days of heavy selling and most people are now expecting a bounce.  It also looks like most people are scared silly and predicting a deeper correction following the bounce.  In > read more

Wednesday, February 23, 2011

Published on 2011-02-23 04:21:19

Yesterday the Nasdaq tacked on a 5th distribution day once again while the S&P and NYSE rose to 3. You may recall last Tuesday that the Nasdaq put on a minor distribution day raising its number to 5, but the following day was an accumulation day, > read more

Monday, February 21, 2011

Published on 2011-02-21 03:56:32

On Friday we discussed the position of major indexes relative to their 2007 highs.  Theoretically, the highs in 2007 should provide an important resistance barrier.  Investors who sat and watched as their 401k plans and ESOPs take a gut-wrenching d > read more

Friday, February 18, 2011

Published on 2011-02-18 03:52:54

Investors shrugged off poor jobs and inflation numbers yesterday, buying the weak open. Buying bad news is almost always a bullish sign that indicates continuing higher prices are in the cards. Today is options expiration, so we are hesitant to add a > read more

Thursday, February 17, 2011

Published on 2011-02-17 03:25:31

After weeks and weeks of grueling trading conditions, the market finally gave us a vote of confidence yesterday. As we noted in yesterday’s report, Tuesday marked a mild distribution day as prices were down on increased volume. Tuesday was the > read more

Wednesday, February 16, 2011

Published on 2011-02-16 03:11:09

Yesterday was arguable a distribution day as leadership stocks underperformed and the major indices were down on higher volume. As far as distribution days go, however, it was a relatively mild one. In fact, it appeared that stocks fell on a lack of > read more

Tuesday, February 15, 2011

Published on 2011-02-15 03:19:07

NOG ripped higher for the second day in a row now and volume over the past two trading days has been above average, indicating institutional participation in the move.  The potential for a continued steady rise is good, so we will continue holding f > read more

Monday, September 14, 2011

Published on 2011-02-14 02:55:04

It was a nerve-wracking week last week, but in the end, buyers proved to overwhelm sellers and bears lost their opportunity to capitalize on their efforts to bring the markets lower. Leadership stocks had been taking hits recently and the market indi > read more

Friday, February 11, 2011

Published on 2011-02-11 02:38:12

We give up trying to make sense of this market.  Maybe there is a valid thesis out there that accounts for the way the market is currently behaving.  If there is, we suspect it has something to do with inflation. The weaker dollar is translating in > read more

Thursday, February 10, 2011

Published on 2011-02-10 02:08:00

One of the most important market-related statistics everyone should be reminded of on a regular basis is the fact that 70% of a stock’s price movement is driven by the broader market.  In other words, stocks move with the markets and earnings > read more

Wednesday, February 9, 2011

Published on 2011-02-09 03:43:18

We are going to sound like a broken record here, but yesterday's up day just extended the indexes further from their short term moving averages even as volume decreased another day. The distribution we worried about over the past few weeks is becomin > read more

Tuesday, February 8, 2011

Published on 2011-02-08 04:05:31

Yesterday was a strong day, especially for COH, which we tried to buy.  If there is anything we know about this current market environment, however, it’s that it is very dangerous to chase stocks higher.  If the market hadn’t given us s > read more

Monday, February 7, 2011

Published on 2011-02-07 03:18:47

There are two key points to keep in mind here. First, the bulls are winning the battle that has been fought since market started to wane in mid December, and second, they are only winning by a narrow margin. After strong distribution over the past tw > read more

Friday, February 4, 2011

Published on 2011-02-04 04:22:47

Prices are still range bound, and while there has been increasingly-positive action below the surface over the past couple of trading days, it’s still to early to predict which way things are going to break. If prices break out of the range, measur > read more

Thursday, February 3, 2011

Published on 2011-02-03 04:21:07

It appears we didn’t miss much yesterday.  Tuesday’s strength was certainly surprising and the Dow did indeed overcome Friday’s high, despite our prediction it wouldn’t be able to make it back over that level.  But yesterday > read more

Tuesday, February 1, 2011

Published on 2011-02-01 03:24:18

So far so good. The market ticked slightly higher after we entered our DXD and QID positions.  Remember, these two ETFs move up when the Dow and the Nasdaq move down, so owning them is the same as being short the broader market indexes. The bounce y > read more

Monday, January 31, 2011

Published on 2011-01-31 03:39:20

Friday marked a huge distribution day; of the variety that has potential to kick off a market correction. This sell off was blamed on unrest in Egypt, but in our opinion, this was just the excuse institutional money has been looking for to sell short > read more

Friday, January 28, 2011

Published on 2011-01-28 04:56:06

We could beat a dead horse and expound on yesterday’s report since not much has changed since we wrote it, but we will spare everyone the misery and keep today’s report short. The S&P is just under 1,300 here, which offers an interest > read more

Thursday, January 27, 2011

Published on 2011-01-27 05:22:13

Yesterday we let go of our two short positions after the market started pushing relentlessly higher in the morning session. We aren’t yet unconvinced, however, that this is a weak market on or near the verge of a correction. Here are our reason > read more

Wednesday, January 26, 2011

Published on 2011-01-26 03:43:16

It looked as if we would be vindicated in our short call this week until the final hour of the day. Prices were under pressure throughout the day, but a late day surge on volume offers a clue that institutional buyers are not ready to sell yet. Leade > read more

Tuesday, January 25, 2011

Published on 2011-01-25 04:16:19

Well, we were either seriously wrong about the potential for a market sell off or we were a little bit early. We suspect we were a little early. Monday, following options expiration is oftentimes misleading.  Moreover, prices tend to whipsaw quite o > read more

Monday, January 24, 2011

Published on 2011-01-24 03:04:05

The longer term trend of the market is up, but the short term trend in the Nasdaq has turned down and we suspect the S&P and Dow will soon follow. Keep in mind, we are not predicting a market top here. We are essentially agnostic regarding the fu > read more

Friday, January 21, 2011

Published on 2011-01-21 02:46:57

Yesterday marked the second severe distribution day in a row. Market internals were negative throughout the day as decliners outpaced advancers by a wide margin and downside volume was much stronger than rebound volume. Last year the uptrend experien > read more

Thursday, January 20, 2011

Published on 2011-01-20 03:10:45

There is a reason we have kept the warning at the top of the daily reports (on the website if you are reading this from today’s email) that trading “Conditions are cloudy: the market has a few problems. It can go either way here.” W > read more

Wednesday, January 19, 2011

Published on 2011-01-19 04:17:44

As everyone knows by now, individual stocks have been pretty much hit or miss since around mid December. The indices have continued to push higher, but stocks have been a little less reliable. What we noticed last week, however, was that buyers have > read more

Monday, January 17, 2011

Published on 2011-01-17 03:41:40

We are at a point where it is easy to second-guess trades and given the fact the major indices haven’t pulled back since November, there will remain a possibility institutions may suddenly decide to take profit without any real warning. In this > read more

Friday, January 14, 2011

Published on 2011-01-14 03:44:47

Stocks held up well after initial selling pressure at the start of the day yesterday. Overall, this bull trend is in technically good condition. In fact, with the Nasdaq trading at 10-year highs and the Dow and S&P above resistance levels left ov > read more

Thursday, January 13, 2011

Published on 2011-01-13 03:53:34

The market made healthy gains yesterday with advancing stocks vs decliners at 2:1. Yet we saw stocks that were strong on Tuesday lose focus as buyers moved on to other areas.  All in all, the market action is just a bit too mixed to confidently pick > read more

Wednesday, January 12, 2011

Published on 2011-01-11 23:53:01

So far this year the sectors catching a bid have been tech and energy. Retail, which had been strong following better than expected holiday shopping, has been taking a break and yesterday’s rebound in commodities put a further damper on the sec > read more

Tuesday, January 11, 2011

Published on 2011-01-11 02:40:24

Tech followed through higher yesterday in what turned out to be a relatively positive day. We are seeing leadership stocks perking up here and the dollar closed with a potential sell signal (a positive for stocks). The dollar still needs to follow th > read more

Monday, January 10, 2011

Published on 2011-01-10 02:24:31

Over the past few weeks the market has been particularly choppy.  This hasn’t reflected in the major indices so much as it has in general trading conditions.  We’ve seen a number of strong set ups whither, making it difficult to pick a > read more

Friday, January 7, 2011

Published on 2011-01-07 02:20:00

The market tends to exhibit various personalities that add nuance to its broader conditions. For example, the market is currently in an uptrend — a condition which has existed since early September. In the early part of that uptrend, all you ha > read more

Thursday, January 6, 2011

Published on 2011-01-06 03:28:04

Yesterday the ADP report showed an unusual surge in new jobs creation, which in turn gave us an unusual situation. Both the dollar and stocks rose. This is atypical in recent years as there has been an inverse correlation between stocks and the dolla > read more

Wednesday, January 5, 2011

Published on 2011-01-05 05:14:40

The Nasdaq logged another distribution day yesterday, totaling 4 now. Likewise, while the selling in the indexes hasn’t been extreme, leadership stocks that have recently pulled back to their buy areas were getting taken apart on heavy trading > read more

Tuesday, January 4, 2011

Published on 2011-01-04 03:12:12

The Nasdaq is now trading at price levels it hasn’t seen since 2001. Even those who bought at the top before the gut-wrenching 2008 market crash are now back in profit.  Stocks kicked off the new year with a boom, breaking the narrow volatilit > read more

Monday, January 3, 2010

Published on 2011-01-03 02:52:20

We saw no tradeable advantages last week given the overbought market, low volume, low volatility levels and the holiday atmosphere, which we believed highly prone to manipulation. Indeed, the market didn’t go anywhere last week and leadership s > read more