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John Ward
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Equities trader. I currently live in California. Email: john.authorego@gmail.com Twitter: JWard_73
  • August 26, 2010 0 comments
    Aug 26, 2010 10:58 PM | about stocks: AKAM, FFIV, RVBD, VRX, VMW, CRM, ISLN, ROVI, PCLN, NFLX, CMG, PAY, CIS, PACT, QLIK, TIBX, OPEN, CTRX, ADTN, IPGP, SPRD, CTXS, WDC, SBUX, GS

    Thursday’s session was an interesting one in that many a market participant seemed confident a bounce was imminent and for about an hour they were quite correct.  Still, volume wasn’t exactly impressive as we rose and, once resistance reared its ugly head, the market turned tail and surrendered to the prevailing trend.  Volume ran lower all day and, to tell you the truth, I was hoping the session would just close flat.  The market had other things in mind, however, as apparently there were those who simply couldn’t hold into Friday’s Q2 GDP revision. 

     

    Where we go from here is anybody’s guess.  What is possible and what is probable must be considered, however.  There are quite a few once-promising stocks that, instead of evolving into the second wave of leadership that was needed, have for now fallen out of favor, stocks like WBMD and PWER. Yet I guess it depends on how you look at it.  You could say that some of these once-promising stocks are promising yet again, except this time as future short targets: THOR and FNSR, for example; however, there are others that could simply be basing, like GIL (double bottom).  At any rate, it always helps to monitor these situations to see how they resolve themselves as they tend to herald the market’s true intentions.

     

    Don’t get me wrong, there are not a few stocks that have held up well during the market's recent correction.  It goes without saying that these must absolutely be watched closely.  To my mind, they are the linchpin of this market.  If they can consolidate properly, breakout and then get reinforced by a second wave of leaders, then this market stands a chance of staging a rally; if they fail, say goodnight.   

     

    Now it’s no secret that trading has been especially slow of late – in fact, trading this month is on pace to be the slowest in over a decade.  That’s saying something, considering that there’s a thing called the internet and that our markets are now accessible to investors the world over with just a click of the mouse.  Volume has tripled over the last decade and yet for all intents and purposes our markets are pretty much where they were in August, 1999.  Take a look at a monthly chart of the Dow if you don’t believe me.  Now I’ve been taught that heavy volume without further price progress is churning and that churning is distribution.  Now if the market were a stock I’d say that we’ve really been doing nothing but churning for the last 11 years.  I’d also take note of that big, multi-year Head and Shoulders pattern.  But the market is not a stock so there’s no use in noticing I suppose….




    Watchlists

     

    Longs:

    “A” Group

    AKAM

    FFIV

    RVBD

    VRX
    VMW

    CRM

    ISLN

    ROVI

    PCLN

    NFLX

    CMG

    PAY

     

     

    “B” Group

    CIS

    HSFT

    QLIK

    TIBX

    OPEN

    SXCI

    ADTN

    IPGP

    SPRD

    CTXS

     

    Shorts:

     

    SNDK (on a bounce off the 200dma into, say, $40-42 area of resistance)

    SBUX (could short it here, cut loss 10dma)

    GS (fell below 50dma on an uptick in volume)



    Disclosure: Long: SQQQ, SPXU, TZA, DGP; short: AAPL, GOOG
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