Cramer discovers techs–finally! IBD MeetUp; GMI: +5: Catching HANS

@ 11:23 pm

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

Cramer finally discovered tech stocks today—33 days into the rally.  However, he endorsed CSCO and MSFT, two long time losers.  While CSCO has a promising chart, MSFT does not.  It is clear to me that Cramer is not a believer in charts–he attempts to discern the mythical value of stocks. Better he should stick to entertainment and not make predictions…………………………………………..

Tonight was IBD Meetup night.  Unfortunately, it conflicted with my son’s basketball game.  So I missed the first hour. What a difference a rally makes!  There were about a dozen people there, all discussing the market and their holdings.  Most members had not wanted to attend last month’s meeting.  Some people had made money the past month, and some were still timid about owning stocks.  I asked people about GOOG–most were afraid of it–a good sign.  I did not find people to be overly bullish about the market but most were looking for stocks to buy.  COH, BBBY, and BBY were discussed while I was there.  Given the attendees’ ambivalence, this rally may have a ways to go………………………………

The GMI dropped one to +5, because there were only 99 successful 10 day highs today.  Gmi622 (Click on chart to enlarge.) Part of the reason for the drop in number was that there were only 136 new highs 10 days ago.  The other components remained strong.  There were 184 new highs today and only 17 new lows.  While 45% of the Nasdaq 100 stocks rose, 52% of the S&P 500 stocks and 47% of the Dow 30 stocks rose.  We are in the 33rd day of the rally (U-33) and the percentage of stocks in my universe of 4,000 stocks that closed above their 10 week average climbed back to 80%. ………………………………………

In response to last night’s post, a reader asked me how I could have detected the rise in HANS early on.  The purpose of my example was to show that one does not have to catch a rocket early on to profit.  Anytime one discovered that HANS was a rocket, it could have been purchased for a profit.  One does not need to catch a rocket as it leaves the launch pad.  There is plenty of time to hitch a ride, as a true rocket travels for months on its journey to the moon……………………………….

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.

GMI: +6; HANS-rocket prototype; IBD Meetup tomorrow night

@ 9:55 pm

It was another positive day, with 213 successful 10 day new highs, the most in weeks. (See archive post on 4/26 for indicator definitions.)   Buying stocks at new highs has been profitable.   In fact, the median increase in the 213 stocks that hit a new high 10 days ago and rose is 3%, with 24% of them increasing 4% or more and the top 11 rising 9-23%.   The largest gainer was SWN, up 23% in the past 10 days, followed by CNQ, up 18%, both energy stocks.Gmi621 The GMI remains at +6.   There were 168 new highs today (in my universe of almost 4,000 stocks) and only 15 new lows.   The Nasdaq 100 did better today than yesterday with 44% of its stocks rising, compared to 40% of the S&P 500 and 33% of the Dow 30 stocks. This is day 32 of the up trend (U-32).   The percentage of stocks closing above their 10 week average declined 2 points, to 78%…………………………………

Check out HANS, one of the most consistent risers of this market. Hans2 (Click on weekly chart to enlarge.)    It broke to a new high today.   Note that HANS has not closed below its rising 10 week average (dotted line) since October 2004.   This is the prototype of a rocket and you might want to compare all of your potential purchases to this chart.   A shrewd investor could have bought HANS anytime since October, 2004, placed a stop below its 10 week average, moved it up as it rose, and never lost any sleep over the stock.   He didn’t have to wait for a base to form or for a bounce.   In my opinion, this is the sanest way to trade.   Too simple?   Check it out on the runs of past winners (for example TASR, 6/03-4/04)…………………………………………..

Tomorrow night is the IBD Meetup group meeting. It will be interesting to see if the members have rebounded.   Last month’s meeting, you will remember, consisted of only 3 persons and the low turnout was a wonderful contrary indicator.   When traders won’t even meet to talk about the market, a rally is imminent.

GMI: +6; Stay the course

@ 9:01 pm

To my visitors: I am only one trader, not a guru, and not a financial advisor.  I am presenting my own opinions and my own experiences and people are welcome to decide for themselves what, if anything, on this site is of value to them.  Please refer to the additional comments, highlighted in red, at the end of this post.

Today was a quiet day. The GMI remains at +6 and there were 211 new highs and only 15 new lows.  Gmi620_1 However, only 33-37% of the Nasdaq 100, S&P 500 and Dow 30 stocks rose today.  The good news is that all of these indexes closed above their 10 day averages and their up trends remain intact.  We are in the 31st day of the rally  (U-31) and 80% of the nearly 4,000 stocks in my universe closed above their 10 week average.  Some of my stocks actually climbed today (BOOM, SHLD, GOOG, NDAQ).  I have no wise words for tonight other than that I will stay the course and see if we get the highly anticipated end-of-the-month/quarter rally.

Send your feedback and questions to: silentknight@wishingwealthblog.com.

Please remember that the stock market is a risky place, especially now.  I am not providing recommendations for you to follow.  My goal is to share tools and methods that I have used over the past 40 years of trading, so that you may learn from them and adapt them to your trading style and needs.  While I do my best, I do not guarantee the accuracy of any statistics computed or any resources linked to my blog.  Please consult with your financial adviser and a mental health practitioner before you enter the stock market,  and please do not take unaffordable risks in the current market environment.  See the About section for more statements designed to protect you (and me) as you navigate this market. Past performance does not guarantee future results, but I would rather learn from a former winner than a loser.