What to Make of it

Those watching IBD know they changed their tune today. And I was saying that would be the time to get the stops out. Let your profits run but what happens - the run up turns into a bubble, it gathers momentum, climaxes and then stocks reverse. The day that happens, you don't feel like selling the next day because stocks usually start the next day down. So, my new rule is to protect profit rather than capital. This makes sure you get out while you're ahead. Protecting capital makes sure you don't suffer a loss. That's not good enough for us.

So, get ready to move off the sidelines, but be ready to sell when the tide turns as it inevitably will.

When to Sell

or put in stop loss orders. How about when IBD changes its tune to "Mkt in Confirmed Rally"? That would make sense to me.

Double or Nothing

Saw how Wachovia went from about 9 to 18 in about a week? You could never get that with a healthy company with solid results growth - just not possible. The lesson - for the well-trained and disciplined trader, there are super profits available for the taking.

Those Who Cannot Remember History

What's going on in the market right now has been seen countless times before. What gets to me is Yahoo's collusion is screwing the little people - stacking up all the negative news and then, once the sense the rally, filling their page with feel-good stories.

Holding Fast

to my favourites. It has been scary of late I won't deny. I'm content to think my net worth is in a certain ballpark and I have most of it invested in stocks and therefore I should have a well-funded retirement. Let's see. We're starting to see the downward climactic action that usually signals a new rally is on its way :

PCLN, RIMM
MT, AGU, MA, V, FSLR

V looks set to be a stellar performer in the short term - judging by its relative strength.

That aside, it's recently struck me how unlike the brochure life really is. After all these years on the job, I find I still have so much left to learn. Sure, I could fall into one sort of rut, ignore the politics and the BS and enjoy a sinecure, but folks like me want to do stuff. Make sense?

Another Bitter Pill

But look at the way some of them have held up - (not RIMM:)

RIO, PCU, MT

Possibilities

GBN could be one to think of - micro-cap, technically good. But, gold's going to cool off soon?

MT, RIMM, PCLN all look good - these were some that I got out of in time actually - need to get back in.

What's my strategy to cope with losses from the likes of WB? Simple - if holding for the long term, have your cake and eat it - buy BAC and then - after you buy, maybe the next day, sell WB and claim the loss. This way, no one can have any complaints. Of course, you're taking higher risk on that one day. No question about that.

Brute Strength

MT, RIMM, PCLN, CLB. Catch em young.

Back on the Sidelines

Hmmm.. moved out of a lot of positions yesterday and - see what happened today. All technical. Surprisingly, most of my sales are holding up pretty well. RIMM was the only one that makes me look good for selling:)

AGCO is one stock that's been riding it's 200 day really well. Also consider VIP. There's tonnes of stocks that are looking good - but don't be like me and try to own everything. You probably want to pass up the oldies like GOOG and AAPL - you might double your money if you're lucky - but how much can market cap increase from 150b? You're better off with the hotties - solar, natural gas, etc. Berkshire is looking really good BTW - from a technical standpoint. I wonder what happens to that stock when Buffet pops it.

Why Technicals?

It depends on the market you're playing. The US stock market is dominated by traders, not investors. Even a trader is an investor. That explains that a good company will be sold by those traders that have a profit. That will send the stock down. Also, if too many investors get onto a good company, there are no investors left who want to buy and the price has to be lowered to entice buyers - also leads to a pullback. So, you better have your basics right.

Looks Good, Early Days Yet

Plenty of stuff getting ready to take off. Do some research on technicals - so you know when to sell out with a small loss. RIMM, ADBE, ITU, MA, PCU, PBR are all looking good. ICLR might also be a good one. Some might not be safe to get into now though.

Hit Them Now

They're up, but that's the time to buy - don't feel like you've already missed out.

PCU, RIO, PBR, MT,..

Short term pullbacks on profit-taking are inevitable.

Punk from Stock Traders Press was bugging me lately. Told him I didn't have any cash on the sidelines and he says "the way the markets going right now, I'll bet there are some stocks that aren't working out for you."

My question, if you're so good at picking stocks, why don't you just make yourself rich instead of bugging people for their membership. Upgrade your member-boat to a member-ship.

GROW - The Importance of Cutting Losses

Who would have guessed:)

Got in somewhere in the low twenties. Damn!! Who would expect it of a company that's in the business of looking at other companies and picking out the good ones? But, look at BSC, or MER. Same story, more blood.

LIFC, die Spaetest Sieger

It's hard to know when to sell - unless someone makes the decision for you. Lifecell is going for $1.2b in cash. Actually picked up a few shares a few weeks back. Definitely a good market again, but... keep moving them stops up!

One thing to consider - the general market is below its 200 day MA - so I think we'll be going sideways for a while.

What Have I Learned?

If anything - once the market is in a strong uptrend and everything you touch seems to make you money - put in stops - 10% is a reasonable stop because, once the trend turns, I usually find myself holding stuff that's down 30% or more. No kidding. Yes, this means you could get hit hard in commissions if you have a lot of positions, so that's something to taking into account.

Predictions Realized

IBD second guesses as usual. Went from "confirmed" rally to correction in a matter of days. What's the use of all the seminars and courses if that's all they're good for?

ADM, POT, MON are looking good. Keep an eye on the hard hit stocks too - BRCM, etc. ESRX is worth watching. DRS, HLF also looking good.

BTW, they say the typical bear market lasts 1 year - so, in a few months:) start looking to buy.

AAPL was up today, btw.

What About That?

JOYG - up on a really down day. Looks like this one will be big.
BKE also doing well, but, buying breakout during a correction is risky. As I've been saving to pay uncle sam in April, I haven't been buying much recently. But, I'm getting tempted. The worst thing that could happen is we become a Japan - where after 20 years, stocks are still 25% down. Those things don't happen in Texas though.

SU is looking good. Not sure whether IBD have changed their tune or not. Am seriously thinking of recycling my WB holding into BAC and getting the tax break. Any thoughts on the "substantially similar" rule? I don't think IRS can have a complaint. Nofsinger was the one who gave me this idea in "The Psycho of Investing".

Crystal Ball

What I see happening - considering that IBD's changed it's tune just after 3 strong days, I guess we can expect a near term correction - about 5-6% easily, in a couple of weeks. Basically, we're going to keep moving sideways for a couple of years atleast. Institutional buying will keep moving new leaders up, but you want to protect your capital always.

Taking off. Catch it Before it's Too Late

CHK

Time.. .. Maybe?

To start getting ready to move out of cash? Wait for a dip, and then get it. IBD still has an "in correction" outlook. MO and HON are out of the Dow Feb 19. BAC and Chevron will get in.

Watch NEU - super strength - why do they wait so long to tell us? Mutual fund ownership has been stagnant though.

90% of winning stocks build their bases during a market correction.
CRM is riding it's 200 day.
What else I've noticed - solar is starting to ride it's 200 day. Just look at JASO, FSLR and STP.
And how about KWK! It's off already. Got my J2T account in the black:) You need to get one of those - a zecco account that gives you 10 free trades a month, and a J2T account you use after that to get trades at 2.50 each. And, did I mention Scottrade is the best for mutual funds? If you plan to have only mutual funds in your IRA - go with ST - they have great research available and good charts too.