Finally, a splash of intelligence on this site. Thank you very much for your effort, Brandonf. Please keep on posting. I'm reading. Cheers,
I'm glad you are enjoying it. I have traded for the past 10 years. Mostly stocks, but I am also active in the commodities markets when they give something I find compelling. I tried FX as well through a retail firm and found it unprofitable and tiring since the Japanese hours seem to offer the best opportunities. For the past 3 years I have run tradingfrommainstreet.com, and online educational community for traders, and managed money for private clients via another company. Brandon
Thanks for replying. It is nice to see some critical thinking behind your conclusions. It helps me check my way of thinking of the markets against others'. I'm a scalper and am trying to widen my perspective of the market. Do you use a combination of styles? In other words, do you spread certain products and scalp certain setups and hold others? Or do you stick to one style and align your analysis and thinking to that style?
Things are, by my estimation, starting to look better at this time. The markets broke a five day losing streak on Tuesday, but most importantly they did it on heavy volume. NASDAQ volume increased 13% to 1.8billion shares, while NYSE volume expanded 22% to 1.68 billion shares. The NASDAQ gained 14.75 points to close at 1928.75 and the S&P500 gained 16.3 points to close at 1,110.10. The interesting thing about today was that going into consumer confidence the market was heading lower. The numbers came out very poor and then the market took off after that. This is a case of the market going up on âbadâ news, and it tends to be a good sign. The NYSE was much stronger than the NASDAQ, and this might be a theme to follow up with over the next few weeks or so. We will see. Going forward yesterdayâs action, combined with the fact that four of the last five up sessions have come on higher than normal volume, has me feeling a little bit better about the market. I believe it is still going to be choppy, so for the time being commitments should be kept on the small side. However, I do feel that we are working out the congestion in the market and could move higher. I would watch MDY, IWD, IWS, VIP, GGC, STN, EFD and ACAP all look nice in addition to other stocks which have been mentioned here. I would continue to try to mix longs and shorts to reduce risk and volatility in my portfolio.
Those volatility explosion patterns are really some of the best in the market, for example AAPL from the other day. Start to tighten stops up on that one. Brandon
The broader markets started the day in negative territory, looking for all the world like we would continue to see chop. All of the news coming out today seemed to be good though, and this helped stocks to power higher on heavy volume by the close. New Home Sales for September rose 3.5% and Crude Oil Inventories rose by 4 million barrels. This had Oil closing below $53 per barrel, bonds down sharply and the dollar strong. All of this is good for equities at this time. The S&P500 gained 14.31 points to close at 1,125.40. The NASDAQ Composite was up 41.20 points to 1,969.99, and for the second day in a row the DOW saw triple digit gains, closing about 10,000. Volume was heavier across the board for the second day in a row, closing up 3% on the NYSE to 1.74 billion shares, and up 14% on the NASDAQ to 2.06 billion shares. Todayâs action was impressive. The Dow and S&P500 both have put in their largest two day advances since May, and this was done on heavy volume. If volume is not present, then it tends to not matter, but volume sustains moves. Over the last few days we have seen the breakouts start to hold up well. I believe that oil has topped out in the near term, along with the rest of the commodities. You could go short Oil, or oil stocks, however I think it will probably be easier to make money buying leading stocks going forward. At this point in time I still have a very heavy cash position. I wish I could say I was 200% invested, but Iâm not. Certainly that would be nice in the short term, but in the long term money is made by sticking to a plan. Right now the temptation can be to get overly excited, and thus overly committed. That is an easy mistake to make. I currently have a heavy cash position, which I intend to use to my advantage. Strong markets pull back slightly on light volume. When/if this occurs I will be watching leading stocks such as GOOG, VIP, COBZ, AMD, AAPL, AMD, MBT, TZOO, VIP and others to accumulate on the pullbacks. I no longer feel that commodity related names are the primary place to be. I also do not feel it is required to have such an equal mix of longs and shorts, but I do want to wait for the pullback before I commit heavily. If a playable rally is under way, we have plenty of time to take advantage of it. Should the market get it together and act well then I believe we have 10 to 15% upside in the NASDAQ this quarter. If it does not we will be happy to have stayed in a cautious stance to this point. Make them come to you. Brandon
On Thursday volume was down slightly as the markets digested two days of stellar gains. This is normal and healthy. If I was to write a script for what I wanted to see in the market I could not have had better action occur than to have what we saw today. The S&P500 closed up 2.04 points to 1,127.44 while the NASDAQ Composite closed up 5.75 points to 1,975.74. Volume was down slightly, we saw 1.81 billion shares on the NASDAQ and 1.62 billion shares on the NYSE. This type of action is great because we did not see the market head directly lower and give up its gains as we have so many times over the last month or so. The right sectors are also starting to play along. I have mentioned a number of the leading stocks here, and I feel that now is the time to be getting your money to work in the market. Once we start to see the reactions on pullbacks it will become time to be fully invested. Right now the market action is convincing to me though and I am getting my capital to work. A number of stocks look nice. HTLD, VIP, MBT, CACC, FPIC, AMED, GOOG, AAPL, CME etc. For those who would like to play sectors watch the QQQ, IWR, SWH, TTH, IIH, HHH and WMH.
Volume pulled in on Friday as the markets continued to digest the gains from earlier in the week. While the majority have remained skittish ahead of tomorrows elections, there has obviously been very heavy institutional buying this last week. My feeling is that the market is not betting on a Kerry win or a Bush win, but rather a smoother transition for whom ever it is that wins than most people think there will be. With this in mind I have started to position myself in what I feel are some of the leading stocks. But, Iâm getting head of myself. Friday the NASDAQ lost 0.75 to close at 1,974.99, while the bellwether S&P500 index gained a modest 2.76 points to close the day 1,139.20. Fridayâs action was an NR7 for the S&P500. Jeff Semmelâs Tradingscans.com has shown an impressive swing in short term momentum to the upside as we now have 453 valid up trends and the number of down trending names has shrunk to 258. Another excellent short term indicator is the number of stocks reaching new 1 month highs and lows. As you might remember only a few weeks ago this number was heavily in favor of new lows, and during that time the market could not get going. This has swung in favor of highs now, the scan showing 169 new 1 month highs and only 29 new 1 month lows. A number of significant things occurred on an economic front this week. On Friday GDP numbers came in significantly lower than expections, but the market did seem to shrug this off for the time being. It's important to note the impact of events on the market, but it is the reaction, not the news itself that really matters for us. The Peoples Bank of China raised interest rates by 0.27 basis points this week as well, signaling that the Chinese Government may be concerned about out of control speculation and growth in that economy. Typically raising rates will slow down, and eventually pop any bubble. This could have a positive short term impact on oil prices since the Chinese demand for petroleum has been a key factor in raising oil prices. The other key factor, a crashing dollar, continues to get worse and something will have to be done soon. I see the weak dollar as one of the major things standing in the way of a Global and Local (American) recovery at this point. The market right now has the potential for good profits; however it will require more work than normal. I expect that we will continue to see a lot of excess volatility, and there is always the possibility of a shock, most likely a terrorist event. Investors should continue to have a mix of longs and shorts, but I do feel that favor should be given to the long side at this juncture. I have started to build positions in some of the leading stocks, among them VIP, JOE, SWH, HHH, QQQ, CME and UHAL. I continue to look at a number of other stocks to add to my portfolio, including NSANY, NATR, LI, ADCT, AVO, DRAX and AMCC. Continue to play with caution, but not with fear. The market is showing that there is opportunity for profit out there at this time for the selective investor and trader. Brandon
There will be more random rant than market idea tonight simply because things are tied up in the election right now. As you know I have liked the market action of late and have gotten long. I have some cushion in most of my positions, and on those that I do not I will be lightening up. Tomorrow all of you in the United States need to vote. People have died so you have the right to go out and do it. Granted, they have also died so that you can sit on your butt and do nothing too, but that is not really what we are about. Vote for things to stay the same or vote for things to change. I donât care, but know the issues and vote.