Leaders Index 1-30-15

It was another whipsaw session yesterday that ended badly. An early decline was followed by a rally, then another decline and another rally before late selling drove the major averages to close at their intraday lows. The SPX led the way lower with a decline of 1.30% while the COMPQ fell 1.03%. Both moved lower below their important 50dma’s. Volume was higher across the board and well above average, showing that large institutional players were heavy sellers. This produced distribution on all the major averages. The distribution count is getting pretty heavy. Leading stocks sold off as well yesterday with the leaders index declining 2.39% on lower but still above average volume. The index closed at it’s intraday low, but is holding it’s short term 9dma. The index is holding up better than I would have thought it would in the current environment. Few if any stocks are producing worthwhile gains. In about six weeks we will be six years into the cyclical bull market that began in March of 2009. This is much longer than most cycles. Major market tops are a process that usually stretches out over periods of months or in this case longer. It is characterized by the kind of trendless whipsaw action we are seeing now. In this type of environment canslim simply does not work. Attempting to find the one or two stocks that look attractive and buying them becomes little more than an expensive exercise in frustration. I have always believed that one of the main differences between an amateur and a professional is the ability to do nothing. An amateur must always look for something to do. A pro knows when to sit back and wait for the markets to give you the proper opportunity. With governments around the world printing money all over the place it is hard to know when this will end, but if you want to be successful in trading long term this is a lesson that must be learned. Jerry

Very well stated Jerry!
Really difficult to get in a trend for now.


Pascal

[QUOTE=Jerry Samet;29358]It was another whipsaw session yesterday that ended badly. An early decline was followed by a rally, then another decline and another rally before late selling drove the major averages to close at their intraday lows. The SPX led the way lower with a decline of 1.30% while the COMPQ fell 1.03%. Both moved lower below their important 50dma’s. Volume was higher across the board and well above average, showing that large institutional players were heavy sellers. This produced distribution on all the major averages. The distribution count is getting pretty heavy. Leading stocks sold off as well yesterday with the leaders index declining 2.39% on lower but still above average volume. The index closed at it’s intraday low, but is holding it’s short term 9dma. The index is holding up better than I would have thought it would in the current environment. Few if any stocks are producing worthwhile gains. In about six weeks we will be six years into the cyclical bull market that began in March of 2009. This is much longer than most cycles. Major market tops are a process that usually stretches out over periods of months or in this case longer. It is characterized by the kind of trendless whipsaw action we are seeing now. In this type of environment canslim simply does not work. Attempting to find the one or two stocks that look attractive and buying them becomes little more than an expensive exercise in frustration. I have always believed that one of the main differences between an amateur and a professional is the ability to do nothing. An amateur must always look for something to do. A pro knows when to sit back and wait for the markets to give you the proper opportunity. With governments around the world printing money all over the place it is hard to know when this will end, but if you want to be successful in trading long term this is a lesson that must be learned. Jerry[/QUOTE]