11-13-2012 Comments

There hasn't been a lot of things to say recently. I thought for a moment today that Pascal's oversold bounce buy opportunity was going to show up when AAPL started to stage a rally. AAPL didn't finish its attempt and retreated the final two hours.
The market is very weak but we should eventually get a bounce that could rally the NASDAQ up to its 200-day or the declining 50-day. Assuming this to be the eventual case this sets up a possible head and shoulders top pattern. If the pattern sets up with the current low as the right shoulder low, the subsequent downside price projection is 2461, presumably occuring over the first half of 2014. The FED may have other plans for the market trajectory but the H&S top target could make this a mild bear market with 23% correction. The news feels worse than this but this is what I read in the charts if they continue to develop as suggested.

BIDU reached its logical short covering point today as it undercut its July low. When logical covering places are showing up, it is not a time for me to consider additional shorts until a new "stalling" rally can identified.

Shorting stocks with FED QE underwy is an uncomfortable game and it is quite acceptable to go to the beach instead. We will be entering a seasonally strong period with low trading volume soon, quite a troublesome mixture for playing the short side. So it is my hope that we get a tradable bounce that lasts atleast through year end.

However much the rubberband is stretched I don't really detect a capitulation move yet. A lower move prior to a bounce would lower the eventual downside price target.

Hi Mike,

I have followed your posts for some time and I appreciate your guidance. As a CAN SLIM advocate, I would like to get your opinion of the MarketSmith platform, including some of the add-ons. I am taking a trial and have access to pattern recognition and the MarketSmith Growth 250. I also have investors.com and E-tables.

I also use HGSI.

Stephen

[QUOTE=mscott;24117]There hasn't been a lot of things to say recently. I thought for a moment today that Pascal's oversold bounce buy opportunity was going to show up when AAPL started to stage a rally. AAPL didn't finish its attempt and retreated the final two hours.
The market is very weak but we should eventually get a bounce that could rally the NASDAQ up to its 200-day or the declining 50-day. Assuming this to be the eventual case this sets up a possible head and shoulders top pattern. If the pattern sets up with the current low as the right shoulder low, the subsequent downside price projection is 2461, presumably occuring over the first half of 2014. The FED may have other plans for the market trajectory but the H&S top target could make this a mild bear market with 23% correction. The news feels worse than this but this is what I read in the charts if they continue to develop as suggested.

BIDU reached its logical short covering point today as it undercut its July low. When logical covering places are showing up, it is not a time for me to consider additional shorts until a new "stalling" rally can identified.

Shorting stocks with FED QE underwy is an uncomfortable game and it is quite acceptable to go to the beach instead. We will be entering a seasonally strong period with low trading volume soon, quite a troublesome mixture for playing the short side. So it is my hope that we get a tradable bounce that lasts atleast through year end.

However much the rubberband is stretched I don't really detect a capitulation move yet. A lower move prior to a bounce would lower the eventual downside price target.[/QUOTE]

[QUOTE=slgerritz;24364]Hi Mike,

I have followed your posts for some time and I appreciate your guidance. As a CAN SLIM advocate, I would like to get your opinion of the MarketSmith platform, including some of the add-ons. I am taking a trial and have access to pattern recognition and the MarketSmith Growth 250. I also have investors.com and E-tables.

I also use HGSI.

Stephen[/QUOTE]

Stephen,
Every single serious canslim investor I know uses MarketSmith. It is simply a fabulous product. It will take a while to find all of the features, make use of the free training they offer. I don't use the Growth 250 nor do I see much need for it. Having eTables ends up adding functionality to MarketSmith as it allows you to view the IBD indices and components in an easy access format. Also for the investor with limited time the IBD Leader Board product is very good. Leaderboard uses the resources of the IBD market writers in selecting stocks. Every stock on the Leaders list has to have a unamimous vote from the selection team to be on the list. They manually annotate charts for each stock pointing out the buy and sell points and marking the various bases. It is very good for a beginning or advanced canslim investor.

Thanks Mike,

So, MarketSmith and ETables is good. With both of these I may not need investors.com, right? It sounds like you are suggesting that Leaderboard would be preferable to Pattern Recognition, Right? With your answer I am ready to buy.

Thanks Again,

Stephen


[QUOTE=mscott;24365]Stephen,
Every single serious canslim investor I know uses MarketSmith. It is simply a fabulous product. It will take a while to find all of the features, make use of the free training they offer. I don't use the Growth 250 nor do I see much need for it. Having eTables ends up adding functionality to MarketSmith as it allows you to view the IBD indices and components in an easy access format. Also for the investor with limited time the IBD Leader Board product is very good. Leaderboard uses the resources of the IBD market writers in selecting stocks. Every stock on the Leaders list has to have a unamimous vote from the selection team to be on the list. They manually annotate charts for each stock pointing out the buy and sell points and marking the various bases. It is very good for a beginning or advanced canslim investor.[/QUOTE]

[QUOTE=slgerritz;24366]Thanks Mike,

So, MarketSmith and ETables is good. With both of these I may not need investors.com, right? It sounds like you are suggesting that Leaderboard would be preferable to Pattern Recognition, Right? With your answer I am ready to buy.

Thanks Again,

Stephen[/QUOTE]

Stephen, I have pattern recognition and it is good. It is a fairly new product an I lived without it for years. If you are not experienced at reading charts this is recommended. If you are a charting pro it isn't so necessary. You should note that computers reading patterns can produce some bad reads that the eye catches easily. Having pattern recognition is a time saver for me as when I hover over a pattern the pop up shows depth of base in percent, depth of the handle in percent, pivot point, etc. It won't mark a handle if it forms in the lower half of the pattern, good stuff. I used to need a calculator to do this.

Investors.com comes free if you subscribe to IBD. I get eIBD. There is a large wealth of educational material that you get access to. Every canslim investor I know of subscribes to IBD. I know all of this adds up to quite a bit so you have to make tradeoffs like we all do. I am going to list all of my subscriptions below in the order of how valuable it is to my investing:

MarketSmith
eSignal (R/T charting, watchlists, etc)
IBD
Leaderboard
Pattern Recognition
eTables

I know of a new canslimer who uses Leaderboard, eIBD and free broker tools and has so far forgone some of the pricey tools above. Leaderboard has a charting capability and access to fundamental data that is not as complete as MarketSmith. Investors.com has charting capability also and access to the same fundamentals shown in Leaderboard. I have traded with the top three in the list above for a long time.