Volume was around the lowest of the year and normally when you have a low volume pre-holiday trading session you usually get a higher close. But today we saw stocks fall on low volume. While it is good for bulls to see stocks pullback on low volume, with the put/call hitting .99 at the close, it is not good for those that are looking to short the market. If you are looking to short this market, even though we are now officially “correcting” again with the SP 500 having six distribution days, you need to stop. You never want to short dull markets as you can get hit with some NASTY reversals as the market has a natural tendency to move higher. The best example I can think of recently is VVUS today exploding to the upside by 22%. This reversal of the breakdown and higher volume breakout is something that has happened more than once with stocks that were looking like they were ready to rollover. So right now, as long as we continue on with this low volume, your best bet is to stay away from shorting stocks. It sucks to know that going long stocks and going short stocks is not working out. Yet that is basically where we are at. I thought the market was ready to change it course but as the low volume rally continued it became apparent a failure was coming up. Sadly some big winners went up a good amount without flashing any clear “take some profits off the table.” The only way you escaped with gains is if you automatically took profits at 25%, 50%, etc… The fact that we had a few near-perfect to perfect charts and that they have all petered out signals to me that this market is in no way ready to blast off for the bulls. And the next worst part is without any heavy volume selling, any selloff is subject to a nasty pop like VVUS got today. Even the shorts that I have been playing around with recently, that normally would fall and already be showing us 5% to 10% profits, are not working. One out of five are working and sometimes two but those odds are not the odds we should be happy with. Therefore, unless the chart is a perfect price setup with a huge volume breakdown with red BOP, there is no way I am going short a market where NYSE short interest is at record highs on the amount of shares short and the amount of days it will take to cover the shorts. I know this much, if the crowd (which is almost always wrong) is that short and is placing that many bearish bets (remember, the put/call is also at .99) then I know I probably do NOT want to be short this market. Sadly, when you see action like you saw in BKE today where it has now officially killed its “near-perfect” setup in late March and early April. Combine that with BRKR, DGLY, GFA, ADEP, PWRD, OTEX, BCO, and FEED and it becomes CLEARLY OBVIOUS that even if you create a “near-perfect to perfect chart” in this low volume market environment the chances of it succeeding is 0%. This is an extremely disappointing market and since November 2007 I have NEVER made as little money or seen such WEAK and BLEAK market as this one. I can tell by looking at some other professionals portfolios that thankfully I AM IN THE EXACT SAME BOAT. IN FACT, from what I have seen on a website that I used to write for and another website I was asked to work for, it appears that I am beating all of them. I at least have a 10% YTD. How many professionals do you know that have this return this year? I don’t know many. If you have at least a 10% return YTD, count your blessings!! The best growth funds, the past three months are up 5%. So I am within the top 1% of growth mutual funds during that time frame, WHICH IS ALWAYS MY GOAL. I have to be in the top 1% or else I must see what is going on that is causing me to mess up. All of you should be doing that as well. Except, you all should be within the top 5%. Only once you have built up a consistent record of making profits due you need to work on being in the top 1%. The worst fund on the past-3-months list are up 1% to 2%. So if you are flat this year, you are in the top 5% on wall street. These tough times WILL PASS. They always do. Do you know how many DONKEYS gave up in 2002? EVERYONE of them messed out on this. These EXACT SAME PATTERNS will return and when they do guess who will still be there buying them? Me. Aloha, have a great Memorial Day weekend, and PLEASE thank a Veteran for ALLOWING YOU to live such a CAKE life. Active-Investing/Trading stocks is pretty lame compared to what these true warrior do to protect the free world from tyranny. Without these men, do you really think there would be a stock market? GOD BLESS ALL OF YOU VETERANS, THANK YOU, AND KNOW THAT I WILL NEVER!!! FORGET OR MOVE FROM MY MORAL CONVICTIONS. ONCE AGAIN, THANK YOU ALL!!!!!!
new short positions: none
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