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Stocks Consolidate Nicely On Lower Volume

|Includes: DIA, Procera Networks, Inc (PKT), QQQ, SPY

First thing, first, congratulations to MarketSpeculator on the birth of his new child on 11-11-11 (nice timing). Future trader Luke is now here and ready to tackle the world.

While Market is absent here and there, that means I get to fill in and do commentary for the first time in two years.

Just to let everyone know, I don’t talk about what happened during the day as all the macro junk is 100% noise to me. All I care about is price and volume action with price being the ultimate judge.

Today, stocks spent the day consolidating nicely until the bottom fell out and stocks started sliding quite quickly. However, support was there and stocks rallied back nicely to put in a very decent close.

Overall, this is positive price action and continues to point the odds in favor of bulls on the short term. My market model is still in a neutral signal but an above average volume breakout over the 200 day moving average would no doubt throw it into a “buy” signal.

The CANSLIM quality stocks continue to show up in this tape. While it is not easy trading them right now, as they continue to be very volatile with the market, they still continue to setup in positive price patterns. Volume is a bit suspect but any breakout here offers an opportunity for the buying and selling proper price and volume action to setup.

Today, I have three new CANSLIM longs. They all have pretty to very pretty green charts. On top of that, there were three extremely high-quality CANSLIM quality stocks that gave “half-a**” buy signals. All three of these failed to close near the highs and volume on two of them was not impressive.

This action, to go along with our current longs like PKT, continues to favor bulls. However, as a systematic disciplined trend follower, I will have no issues with switching to a sell signal should we fail here on huge volume.

Anything can and will happen in the stock market. You must be ready for all and any scenario at all times. That is what I do. That is what I love.

It continues to be a volatile tape and until I get that full “buy” signal all new longs will continue to be small with tight stops. Once I get the “buy” signal on my market model I will push hard to get fully invested ASAP to ride the bucking bronco higher.

Stay nimble and stay patient. This trendless environment will change. The only things that stays the same in the stock market is change.