It should be obvious, after watching this week’s action, that the market that looked like it might try to hammer out a low volume rally is no longer the market it could have been at the end of last week. This week killed almost all of my hope that the most recent lows are actually going to hold. Why do I think that? Have you seen our best looking longs this year? The stocks with the best chart patterns with the strongest fundamentals are starting to move higher. But every single last one is running into some form of problems and nothing looks like it once did. From BKE to DGLY they have all lost that magic look. GFA pulled back after a huge volume blastoff that never should have happened, BKE reversed yesterday’s bounce off the 50 DMA–that is very bearish, BCO and OTEX are trying to fail, ADEP, BRKR, and PFWD have already failed. The one common between all of these stocks is that they all had VERY BULLISH price/volume/BOP pattern on their charts and they all had strong fundamentals with most seeing increasing sponsorship. These stocks might run in the future, and if they do I am sure a lot will set up for us to reenter. But for now, the great longs we are still long are on their “line in the sand” and the ones we have sold continue to selloff. This is the kind of action that leads to a better bottom and a better bull market in the future, as the weak holders, weak investors, and weak traders slowly leave a trade they saw as a way “to get rich quick.” LOL, there is no such thing in the stock market. Unless you ONLY buy stocks in raging bull market. If that is your MO, then investing now is not what you want to be doing. Eventually, the DGLY type charts will setup, breakout, move 50%, only pullback 15% ON LOWER VOLUME, and then will go on to rocket another 450%. But for now, without volume when we rally, you can almost forget that anything is going to work for more than a few weeks. Is it disappointing? Yes. But remember we may now get another chance to play the short side, and instead of complaining that your longs are failing, you should be keeping your watchlist up-to-date so that when the next one breaks lower or higher you can be there to pounce on it. This low volume is going to make it VERY HARD to make any real money that is going to make you rich–UNLESS YOU ARE A GAMBLER. And trust me, no matter how smart they tell you they are, if they are 200% to 500% long this market, you better believe you are talking to a GAMBLER and not a professional active-investor. There is NOT ONE intelligent investor that would be loaded up on margin here, especially now that the six distribution days and 200 DMA failure has led the market to be in a new “correction.” Get off margin, sell your laggards, update your watchlist, keep a positive attitude, and DO NOT FORGET TO THANK A VETERAN THIS MEMORIAL DAY WEEKEND. Aloha and I will see you in the chat room, whenever you decide to drop by.
new long positions: none
none
adding to existing long positions: ISYS STSI
ISYS is bouncing off recent support, near the 50 day moving average and right at the pivot point area of the 5/12 breakout, on above average volume. Cut your first loss with a close below the 35.09 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.
STSI is bouncing off the 50 day moving average and putting in a very bullish intraday reversal, on very strong volume. Cut your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.
