1-4-2015 Comments

I have uploaded watchlists to the Volume Trigger Alert section as well as the general long and short watchlists.
With the market rally under pressure I have not been too active. A detailed study by an acquaintance of every breakout of all stocks in the IBD100/IBD50 since April 2003 until current has shown that breakouts are least successful when doing so from a market Under Pressure condition. Much more successful has been stock selections breaking out from Market in Correction. I know this last part is contrary to popular guidance but clearly this has been the case last year. It was an eye opener to see that this held true over two bull and two bear markets. The definition of a successful breakout in this analysis is that the position rose 15% before it ever closed 5% below the proper buy point. What appears to be self modulating is that stocks in bear markets rarely set up properly for a breakout, their bases being wide and loose.

My own portfolio has been stalled for months. I sold BABA on Friday as it seems to be round tripping. The market appears to be waiting for something and the fact that BABA is struggling may be telling us something. The NASDAQ is carrying a lot of distribution in its 25-day look back window. It possibly could have put in a double top.

Of course every time I say something like this the market rallies.