All stock indexes, besides the NYSE and IBD 85-85, were slightly down on Friday but the losses were quite flat as the market took an early break before the three-day Memorial Day weekend which a lot of traders, including myself, are looking forward to a break from the action. Friday was kind of a wild day intraday as we saw an early morning ugly selloff reverse into a nice bullish uptrend. After a mid-day dip that started ugly, stock indexes held on and began to rally again giving the appearance that we were going to have a strong close. In the last hour, stocks had other ideas and slid off a cliff into the close. The close left the indexes looking like they had a rough session on the daily bar, besides the Nasdaq, IBD 100, and IBD 85-85 indexes, as most indexes closed in the lower end of their daily trading range. The great news behind all of this is that volume was lower than every trading session this year, besides the first day after New Year’s Day. This makes it clear the institutions were definitely not out selling today. This is why, despite the losses, we only had one scan with 10 stocks/ETFs in it. There are some stocks that we should watch for possibly being a short some time in the future, if the market would happen to roll over. The stocks on my scans today, in that group, include UIL, SNPS, CEPH, CRM, MA, VR, and ESI. If you check this section every day, like you are supposed to so you can become a GREAT investor, you will be familiar with some of these names. Remember, if any of them do setup for a breakdown, you only want to invest a little in them, as long as the market is still trending higher. Just like you only have a 25% chance of picking a winning stock on the long side in a bear market, if you go short in a bull market you also have only a 25% chance of getting it right. To increase your chances of success, I make sure price, volume, BOP, RS, moneystream, TSV, and MACD all show negative action/divergences. If that happens, then you could go heavier into your short. Great luck out there everyone. Don’t forget to take profits fast as you get 20%-100% gains in any long or short and to cut your losses even faster–if it doesn’t move up or down, in your desired direction, immediately, always sell/cover some. Stay positive, stay on top of the market at all times (it only takes 30 mins a day, if you have a SOLID routine), and make sure, if you see a soldier this weekend, to say “thank you” or anything else nice you want. It might seem awkward but, trust me, it will make their day. You can never receive too many thank you’s. God bless our troops. Aloha!
new short positions: none
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