Even though inedexes closed down .5%, they really did not go very far but they did do it in a very choppy motion. So unless you like turbo trading support and resistance for peanuts then there really is not a whole lot to do. I do understand that some people love daytrading and love to spend all day trading. Well if you enjoyed Friday then you are for sure a diehard market fan. It simply is not the way I want to spend my time. Now rewind back to 1999. I was making a TON of money HOLDING stocks. Not daytrading. But if I was bored had access cash and did not have perfect stocks to invest I could and would daytrade. I have to admit it was not as much fun as I did not get to see my pretty max green BOP charts and I did not like the feeling my heart had when I had multiple positions on. But if that is what you like doing then enjoy daytrading.

Right now, I think trading to the downside is the right game but as it is clear the markets are trending below the 50 and 200 day moving average. I tell you what, if some of you are impatient and can not stand having on longs (even if the chat is ugly; why???) all you need to do is go out and have fun until you at least see the price bars above the 50 day moving average. Once you see that you know that in the short term prices are moving higher. Then you can go in and look for max green BOP beauties like my XSI long that I have on. It isn’t perfect but nothing is in this market. I just want you to study all the green all over that chart and notice the perfect bounce/breakout on volume in late June. If you still don’t see these after the 50 DMA is taken then sooner or later you will once the indexes prices on the averages cross back above the 200 DMA. Once the indexes are above the 50 and 200 DMA there will be a few green filled BOP charts (hopefully) for us to enjoy.

If not there will be at least some CANSLIM quality longs that will show up in our new leading industry groups that will produce some huge returns. Trust me when this market turns I will be in the leading stocks in the new leading industries with the perfect CANSLIM stocks. If the chart is loaded with max green and breaking out of a perfect pattern or the stock is a perfect CANSLIM quality long breaking out of a solid pattern we will be long and ready to make a lot of money.

I know a lot of people are sick of waiting this market out but that has to be done or else you looked like all those idiots that were yelling at me in January that the market bottomed an that buying bank stocks had to be done. Well some told me to load up on JPM, some told me to load up on GS (that wasn’t that bad of a pick), but some told me I was an idiot for not buying MER. Well thankfully I saved myself I think a 50% loss. But I do want to explain how I look for potential bottoms. First off I love to see sentiment like it is now. I think the put/call has backed back off which shows that we are bit too complacent which is not good. Before we were a bit fearful as the put/call hit numbers like 1.3 on the most recent low which was real bearish. That showed the dumb money was definitely buying puts which is bullish long term.

On top of that, the bears in the investors intelligence survey were just hitting 50%. That is the first time in five years that 1/2 of the newsletter writers were bearish. That goes along with the weak week before that showed only 27% bullish which was also a five-year low. These are some extreme numbers. The only thing that would have been better was a put/call ratio around 2.0 as the 1.3 reading while high was still below the 1.4 levels in March. Still it was bearish out there.

However, there is one stock in particular that I am watching to help tell me if we have put in a tradeable low. My first clue that we have one is that my two most recent near-perfect charts have hit me with immediate advances one lasting 15 trading sessions and one lasting one month. And one stock that had a HUGE bullish intraday reversal on the largest volume ever after many years is my bullish tell. I will need all three stocks to continue to work in fashion for me to believe that my baby rally with a weak market can last. It is just nice to know you that we can make some gains after such a long time of ugly action. DGLY and PDO were godsends while BRKR, BKE, BCO, and AEHR were typical of a market near the end of a bullish trend. I personally hope the worst is over but something deep down tells me “yeah right big boy.”

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