Eric's Weekend Review

[ericoleman]

admin's note: Eric posted his review and we liked it so much that we hope he will post here on a regular basis. Eric, please fire away!

Hi everyone. My name is Eric, and I became a member of VIT in June 2009. In this venue, which links unique individuals throughout the world, I found much support and encouragement from Pascal and Billy. I was also fortunate to receive feedback from members like Mike Scott, amongst others who may or may not post anymore.

I studied geography in college and have been blessed with many great experiences that have taken me throughout the world, generally in the company of some truly wonderful people. While living in Yosemite National Park in 2007, I opened my first brokerage account. When I eventually found my way to the VIT group and EV site a couple years later, I had felt inside that "this was something that I need to stick with."

I started practicing my own analysis by mimicking what I saw others with far greater experience doing. And I learned that it takes time and a lot of practice. That is what I continue to do - practice. So this forum is a way for me to share some of the things that I observe based on the way I have learned to look at the market.

Please feel free to comment, question, or offer feedback.

Best,
Eric

[hmatar]

Thank you eric for this wonderful report, great information and trading direction. I only have one question, regarding your selections, I see that mostly are in materials/oil sectors, well, my qeustion is will your choices change if we have a breakout in the US dollar, and maintain a bullish view ??

thanks

[ericoleman]

Hi hmatar,

That is a good question. My main intention in collecting these observations is to really look at what the market is doing right now. The reason for an increased focus on the materials/energy sector was simply due to some interesting activity witnessed these past weeks after a period of underperformance earlier in the year. For example, when a stock like FCX all of a sudden jumps through two major moving averages with noteworthy volume - what might be going on? Is this strength an indication of not only a possible bottom, but perhaps leadership? FCX is a very large company with a big float, so it takes real buying power to move such a stock up with vigor.

Today the futures are pointing down. So we will see if these stocks hold their recent strength and attract money, even if the market sells off. Regarding the dollar, your guess is as good as mine. I've learned there are many assumptions and aphorisms built into the direction of the dollar and the subsequent impact on stocks. I prefer to just look at the market on a daily basis and through numerous timeframes.

Also, just to clarify, the securities highlighted are not implicit buys. While some might show legitimate buy signals depending upon one's criteria, others are merely highlighted because their action "says something" about the market as a whole.

Best
Eric

[Cmur322]

Eric,

Thanks for the great report. I really like how you use the EV tools and uses them to build your thesis. Thanks for the insight.

Chris

[ericoleman]

Hello group. Please find available some weekend notes . . . I primarily am focusing on the long side since the 20 day MF is not under a short signal and enough leaders are holding up to give the benefit of the doubt to the recent advance. I recommend the articles published by Kevin Marder found over at Marketwatch, which are helpful and give a fairly succinct overview of some of the current leaders. A subscription to The Kirk Report is worth its weight in gold, as he provides a timely and helpful review each week. While I would have liked to add a bit more to the report, time constraints precluded me from doing so.

Best to all,
Eric

Weekend Notes.pdf

[ericoleman]

Hello friends. Here is my weekend review. I hope some find value in the observations shared. I am most interested in "getting a feel" for the market by examining "the parts," in order to better interpret the whole. I have to admit that I am most interested in becoming a better position trader and stock picker. It is a difficult task. My goal is to integrate EV, Stage analysis, and Sector analysis to find stocks that might be held for 1 week to a couple months or longer. I like to look at relative strength and catalysts, which often include earnings.

Once again, Charles Kirk and his Weekend Chart Show is a great resource. Also, I watched an interesting interview with Laszlo Birinyi, which in the midst of all the headlines, I found refreshing. That interview is found here: http://finance.yahoo.com/blogs/break...120034902.html.

Best
Eric

[ericoleman]

Hello group,

I have put together my weekend review, which is a very useful practice for myself, and my true hope is that others, too, may follow along as we learn together.

I attempt to detail at least a few interesting developments that I notice from daily watching the market, both on my own time and at my job. I think the short side offers opportunity, but my experience in that realm is still limited and developing, thus I prefer to focus on what I see as opportunities in stocks that are showing some degree of strength and/or are transitioning from a bearish trend to a possible bullish or neutral trend.

Please feel free to comment or question.

Best
Eric

[ericoleman]

Friends,

The current market conditions have now overwhelmed any developing long setup recently discussed. The only exception might be some gold stocks. While we were given a short, but tradeable rally in late June through the middle of July, that rally has fizzled and left us mired in the range, with increasing probability of breaking to the downside.

While a dead cat bounce may occur in the coming days, the damage done over the past two weeks is significant. As earnings season winds down, there is little in the way of catalysts that I see pushing the market higher. QE3 could prompt precious metals to move, but most stocks need much healing, which will take more than a few days or weeks. I intend to monitor various stocks and sectors, which may build bases while the market corrects. Meanwhile, current leaders seem increasingly vulnerable.

Best
Eric

[ericoleman]

Hello everyone,

Please find attached my weekend notes. I had much more time to prepare throughout the week, so it is a bit longer. It has been a long time since 2008-9, but I highlight some scenarios for market leaders and possible outcomes if we are indeed moving into deeper bear territory over the coming months. Additionally, I review some recent stocks that were discussed and some shorting-lessons and observations. I also note the importance of recognizing flaws in one's analysis early on. Finally, I touch on a couple ideas regarding gold stocks.

If you don't get a chance to read through this, then most definitely check out Aly's Crowd Sentiment Index report.

Best
Eric

[Mike]

Eric,
Nice weekend review. I enjoy reading them. I like that you are looking at real stocks and seeing what they are doing. The market will eventually follow the leading stocks. I looked at the case where you covered your short at the 50-day and smiled. It is difficult to write rules. There is another one that says short a position that is slicing through the 50-day on high volume. Watching what happens at these places is important. If a strong bounce takes place cover, if weakness is obvious double up on your short position.

If I had to guess, we stage a bear market rally in a month or so from now and run up into the end of year and then seriously roll over next year. Bear market rallies can be played. The trick is not to be fooled for too long as they can be extremely convincing. The low road scenario should not be considred a continuous down move. Keeping a shorting list could be important if a rally occurs.