There were only 27 stocks combined in both of my long scans that look over the market to find the best stocks moving on heavy volume. Well, not only did all 27 not have nice patterns (unless I was already long) but they were also just complete messes. I do see what appears to be the POSSIBILITY of bases setting up in some stocks but the truth is, since they are coming from such a nasty downtrend, and there has not been one extremely bullish day since January 23rd. As we can also constantly see, new lows continue to dominate new highs and while this continues to happen we are going to be short for stocks that will be great longs. We have been very lucky this year with a few gems that include PDO DGLY FSYS and XSI. But overall by this time I should have a couple of handful of stocks that I should call “great” stocks giving us “great” returns. To give you an idea of how weak this market is compared to how a real bull market (like 2003) should be let’s look at the number of stocks up 1000%, 500%, 100%, and 50% this year compared to a market that is trending up. I want some of you to remember there are quite a few stocks that existed in 2003 that do not exist anymore today, rather if it was from being delisted, mergerd, or were acquired by another company. If all of you are wondering why it is so hard to make money a simple scan of stocks up over 50% and more can show you why. In a bear market stocks simply do not rally. In a bull market, you can get very rich. Look at these reports comparing 2003 to 2008 from the start of the year to August 29th. Don’t forget that a lot of stocks have been delisted
In 2003 there were:
3 stocks were up 1000% already with ZTM leading the way with an 8,500% gain
41 stocks were up 500% already
587 stocks were up 100% already
1,266 stocks were up 50% already
let’s compare that to 2008:
0 stocks are up 1000%
2 stocks are up 500% already
69 stocks are up 100% already
227 stocks are up 50% already
If you can’t understand that right now it is too hard to find top performing stocks and if you think we can be trading 2008 the same way (and make money the same way) as I did in 2003, you are going to probably not make it through your first few years in the market. When you have 20 stocks that look perfect and all 20 are going to probably go up 20% in a couple of weeks that makes making money in the stock market a lot easier than a market that is completely flat like the one we are currently suffering in.
I know how to find the best stocks EVERY YEAR. There is a problem this year: THEY DON’T EXIST. I hope these numbers help explain the market you are in and if I need to make a comparison of a bad year like 2001 to 2008 on the downside, I think once again you can see that the hard downtrend of 2001 made it a lot easier to make money on the short side compared to this year which is basically flat.
The Nasdaq is down 10% from the end of last year to today. Compare this to 2000 when the market was already down 25% from the beginning of the year till now. So it should be clear on both the long and short side why so few are making the big gains that I have been used to for a long time. I know this period of flat and choppy price action will ONE DAY end and we will be in a trending market soon enough. Just remember do NOT force trades for the sake of trading. Study that data coming out of 2003 which clearly show the power of sticking around to be a part of the bull market. I know times like these are tough but remember we still can find the XSI type of stocks that have the potential to make us big money in the short term. Don’t let this market get you down as that is the whole point of this market action right here is to do exactly that. Those that weather this storm will come out of it with another 2003 market where you will have 1,266 stocks up 50% by now, instead of the market we have now where ONLY!!! 227 stocks have made that point. I am telling you RIGHT NOW, if you think your trading is messed up, you are wrong.
It is the fact you are trading at all in a choppy market that is killing you. YOU are NOT a “sucky” trader. No; You are simply in a bearish and choppy market that is going nowhere. In these kind of markets you can’t have 3 stocks up 1,000%, 41 stocks up 500%, 587 stocks up 100%, and a whopping 1,266 stocks up 50%. Remember, one more time, there have been a lot of stocks that made big gains during this time that have been delisted so the numbers should be bigger. Let’s pray that when this choppy slop is over another raging bull market will be upon us where the numbers are in my favor. For now, you simply can’t trust any stock unless it builds a near perfect chart pattern. Study XSI, unless it looks like that it will not be a new long. Especially with the market looking like it is rolling over.
I hope you all can understand 3-0, 41-2, 587-69, and 1,266-227 is a major difference between a portfolio that can rise 500% in one year and a portfolio that possibly makes no money. You need the market to be on your side and if you study the 2003 market compared to the 2008 market I think the natural trend makes it clear that a 2003 market is when you should be buying stocks and a 2008 market is where you should be holding cash. I have tried to protect a lot of you from losing cash and have helped some of you even make money in this tough market. But overall this has been the hardest market I have been a part of since I started trading in 1996. I have never seen such a long-term trend (since January) be so flat with so few money making opportunities. However, I know this will change.
The big question is: how much money are you going to churn and burn while we wait for the correct setup? I know if I end flat to down this year it will be OK because I have the stats I have studied the 69 stocks up this year in 2008 compared to the 587 that were up in 2003. The biggest thing that can be seen is the volatility in the V-shaped bases in 2008 compared to the ROUND and SOUND bases in 2003. The other very notciable thing is that so few of the 69 charts are loaded with max green BOP while almost every one of the 587 are loaded with green to max green BOP on the way up.
To me it is very clear and I understand why we can’t make money this year compared to previous years. If you are a newbie and still don’t understand that you CAN NOT ALWAYS MAKE MONEY and therefore must trade for the sake of trading I can guarantee you one thing. You will NOT be around long. Please, be patient and do not trade flat markets. The best markets to trade are markets that move up on higher volume and lower on higher volume. This quiet volume must be handled with care and that is why cash is king
“Profits can be made safely ONLY when the opportunity is available and NOT just because they happen to be desired or needed …Willingness and ability to hold funds UNINVESTED while WAITING for real opportunities is a key to success in the battle for invesment survival.â€â€“Gerald Loeb
new long positions: none
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