The nasty reversal by the indexes at key downtrending moving averages today, on a pickup in volume, was not good news for those that believed we bottomed. I don’t understand, personally, how anyone could come up with that diagnosis without having huge surges of volume on the up days. But if you did think we bottomed before today’s market session, you are probably questioning that possibility now. I continue to know that I don’t know what the market is going to do as we are pretty trendless and listless. The only thing that I do know is that anytime we actually do have above average volume it is almost always to the downside. That is not good. I also know that since 1/28/10 to today we have moved absolutely 0.00% on the Nasdaq and that shows that clearly cash has and still is king. I am starting to believe that the market is not going to hold up and is going to possibly roll right back over and start to give us more and more short setups. However, until those past leading stocks of 2009-2010 start really breaking down I will continue to tread cautiously with my trades keeping them small and all 2% or less of my accounts per trade. I am making a few sells today and will move that money and a little more into the two new short positions but I still will remain around 85% after Monday’s opening bell and feel very confident that is the correct play in this current market where no progress is really being made this year and on the intermediate term remains down. One of my new shorts was in my scan three days ago and appeared to be a short but I passed on it due to it just not being a few cents closer to the LOD from its close. Well that was a mistake and in a market like this you better be prepared to make a lot of mistakes because without a clear trend trend-trading is going to be very hit and miss. When the trend is in a long-term clear uptrend or downtrend, the money is not that hard to make. But when there is no trend, you can be sure the money is not going to be easy to make. This is why I preach and will continue to preach cash is king until the trend becomes obviously clear. To me it is clear we are in a downtrend with all the rallies coming on low volume. However, we are not getting plenty of great short setups because when we do move down on volume it is only slightly-above-average volume. This is a rough market right now and it has been and will continue to be until we get some volume. We have to deal with it and realize that eventually this rough market will turn into an easy market. When will it happen? Nobody knows because nobody can predict the future. “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.” – Lao Tzu
new short positions: CERN CPA
CERN is breaking down at the downtrending 50 day moving average which just death-crossed the 200 day moving average not too long ago, closing near the LOD, on strong volume with BOP moving to a lower red level. Cut your final loss with a close above the 50 day moving average, if the stock does not move lower immediately.
CPA is breaking down at the 50 day moving average which just death-crossed the 200 day moving average at the end of June, closing near the LOD, on strong volume with BOP moving to a lower red level. Cut your final loss with a close above the 48.43 level, if the stock does not move lower immediately.
