Stock indexes put in one impressive session on stronger volume. However, as everyone already knows that volume was skewed higher by options expiration. The good news is that unlike in some months where I have seen some ridiculous price/volume action, I did not see as much this time. This gives me a little bit more confidence to go ahead and get in there and get involved with buying more longs.
At this stage of the rally, without a longer pullback, I am pretty nervous about getting long any stock in size. But I have to remind myself that my methodology is so sound that even if I am wrong I can quickly cut my losses and wait for the next opportunity to strike. Instead of waiting for a pullback to come that may never get here, I will instead focus on all these long signals that I see all around me.
My biggest worry is that the leading indexes of the IBD 100 and IBD 8585 which carry the best stocks based on fundamentals and technicals continue to lag this rally BADLY. We are not talking a minor lag we are talking a serious lag that is having some profound effects on my personal trading.
At this point in a bullish uptrend (the 5th month) it is almost a guarantee that I am fully long on margin making big money. This rally instead, since it has produced absolutely ZERO charts in the form of what I would call “must-buy-perfect-beauties” has kept me with cash constantly on the sidelines looking to go to work. The good news with this is that I am having NO problems finding longs. I mean if you just look at the amount of longs I have every single night it is obvious that we are having no problems finding equities to invest in. Thankfully this is getting me involved in stocks that are working out. It isn’t like the stocks I pick fail. Heck, most of them, are doing very well and you will see below the returns of the better and bigger positions.
The time will either come when the IBD indexes will take charge and then we can expect to start making very big money in shorter amounts of time and at the same time go along for a long ride to lock in big gains in long-term cap-gains situations. However, right now, the charts constantly show one to multiple flaws that keep me from gaining a MAJOR foothold into any one position. It isn’t fear AT ALL. It is brains. I have my methodology and I know when and when not to load up. I have to play by the rules that have always worked for me.
As you will see in the video below there is nothing to do right now but to be bullish with the trend and go with it. When IT decides to end then we can get on the bearish bandwagon that so many try to join every time the market starts to tick lower. I even believed the market could be near a possible top in the current run when many stocks were cracking hard on huge trade. However, that was more a byproduct of earnings season rather than a whole market under distribution so I am back with not looking for a top.
During this time, however, I am still very cautious and nervous. I am not a moron. I see the numbers coming from Washington DC. I see the FOREX markets. I see the supply/demand situations around the world. I see the crop reports. I see the weather maps. I know how to keep on top of the macro trend and right now it is clear that there are MAJOR problems out there. However, either the market has already priced it in and/or the market is looking ahead to better times, because the market keeps going higher. And like I said until it is wrong, we are wrong for being bearish. That is why as long as the market is moving up you must remain bullish on equity prices. You can be bearish in your heart. But your mind better be bullish. Especially when we have stocks giving us returns like below:
FIRE 127% ISTA 154% DAN 230% ATSG 138% CAMP 96% AVNR 97% CAR 84% SCLN 83% SOA 60% PTI 60% ACTG 64% CLRT 28% FUQI 33% KAD 24% BZ 53% TXIC 21% LAD 50% LCI 31% OWW 22% MRLN 45% VRTU 42% DRCO 24% OMN 44% IILG 20% AEPI 42% RINO 24% PXLW 47% BSTC 25%
Obviously, it hasn’t been that bad of a market! Aloha from Maui! 🙂
FREE small YT video for FREE/SILVER members:
