To Find Out What Really Happened to: FFIV, CTXS, AKAM, VMW, RVBD, CRM, NTAP, BIDU, NFLX, PCLN, AMZN
Click Here: http://www.youtube.com/watch?v=jZwLsvO6YTw
Five dozen people listen to what Dave says...that's a good start in helping a lot of people trade better...Thanks for posting your comments...it helps me to know if the effort is actually helping anyone...
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Exchange NYSE NASDAQAdvancers 1,404 1,096
Decliners 1,587 1,547
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Index Direction Confirmation VIX Down No – SPX
SOX Down Yes – COMPQ
Leading stocks on Wednesday included WLT, UNG, FCX, X, UAL, IPI, SWN, DOW, BUCY, AKS, STI, AMX, HANS, TLT, GR, CLF, NYX, UNP, WMT, UCO, JEC, DE, GS, VOD
Losing stocks included FFIV, VMW, RVBD, CRM CRUS, DLR, LXK, DECK, SINA, NFLX, PCLN, CREE, CSTR, NTES, LVS, NETL, SKX, VECO, TBT, CMG, GMCR, RMBS, AMD, USD
The Other What Really Happened...
Wednesday was one of those anomaly trading days that on the surface seemed terrible for traders that were long the market. The reality is Wednesday was not even remotely as bad a trading day as Tuesday was a great day.
Let’s review the four major NDX stocks that I daily comment on their movement and candle pattern:
AAPL +10.30 Tuesday, +0.25 Wednesday
QCOM +0.37 Tuesday, +0.39 Wednesday
GOOG +15.88 Tuesday, -3.88 Wednesday
BIDU +6.48 Tuesday, -4.30 Wednesday
You say, wait a minute Dave you’re isolating a few stocks…Yes, I am isolating the same four NDX stocks that I isolate every trading day, so it really is an apples to apples comparison…
Okay let’s look at the four broad indexes that Chart Signals covers every day:
SPX +23.72 Tuesday, -0.78 Wednesday
INDU +193.45 Tuesday, +22.93 Wednesday
COMPQ +55.31 Tuesday, -19.17 Tuesday
IWM +1.90 Tuesday, -0.23 Wednesday
Not anyone of the four major NDX stocks or the four broad indexes are remotely close as weak on Wednesday as they were strong on Tuesday. So, why did it feel so bad to some traders?
It was because a few NASDAQ and NYSE stocks that had been super hot in September sold off big on Wednesday. You may remember that I mentioned the institutional profit taking on some of the major NASDAQ stocks in the Weekly Wrap on Friday and said expect it to continue on Monday and Tuesday. Well the rally on Tuesday made it appear as if the selling was over, not entirely the case as we saw on Wednesday.
Some, CTXS, CRM, FFIV, NFLX, RVBD, NTAP and VMW were influenced directly or indirectly by analyst comments, others like AMZN, BIDU, PCLN and AKAM due to continued profit taking or technical sell points such as a break of the low of the high day. They really did take the money and run...
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Interest rates were lower, bonds rose, the EURO rose, the SOX moved lower and the VIX was actually down at the end of the day.
I also stated in Friday's Weekly Wrap that some of those profits coming out of leading NASDAQ stocks would rotate into other stocks like Financials, that had been lagging the leaders. We did see that rotation with many strong stocks on Wednesday. Materials XLB +0.95%, Energy +0.89%, Industrials XLI +0.60%, and Consumer Staples +0.43% rose on Wednesday and Financials XLF -0.07% were lower by just one cent.
Decliners barely led advancers 1.13 to 1 on the NYSE. 19 of 30 Dow stocks rose and 56 of the SP 100 were higher.
Stocks like WLT +2.95%, FCX +2.68, X +2.51 % and UAL +2.04% also rose. Even UNG rose +2.79%. It is clear that Wednesday was more of a pause day than a major sell off across the board.
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While some of our Bull Flag Entry Signals on Tuesday did stop out today, many held above their stop levels. Only 7 of our watch list stocks dropped below their 30 DMA.
While every trader’s situation is unique, some traders found out on Wednesday that they weren’t prepared for the sharp drop in specific stocks, they did not respond as quickly as they should have or they were too concentrated in the hottest stocks.
Dave’s Insight: If there was a lesson you should learn from Wednesday, learn it and be a better trader from what you learned starting tomorrow.
SPX
Resistance: 1,170, 1,182
Support: 1,148, 1,130, 1,115
Enter bullish trades with a bounce off support and a break above the high of the low day or a break out of horizontal resistance.
Take bearish entry signals for a bounce down from resistance or a close below of the low of the high day.
The VIX fell -0.27 to 21.49, and is still below the 25 benchmark level.
The short term 3 day trend is up.
The three-month trend is neutral.
The twelve-month trend is up.
Continue to focus on and trade setups on the charts of the stocks you watch. Trade with the trend of the chart and follow your rules.
AAPL +0.25 – doji
QCOM +0.39 – white candle confirmed Tuesday’s black inverted hammer
GOOG -3.88 – black candle
BIDU -4.30 – large black candle
NDX 100 stocks stronger than the NDX include: JBHT, CSCO, HANS, JOYG, COST, ORCL, RYAAY, QCOM, INTC, FWLT, LBTYA, HOLX, MSFT, GENZ and CHRW.
Stocks weaker than the NDX: CTXS, AKAM, NTAP, NVDA, BIDU, ADSK, STX, PCLN, AMZN, RIMM, NIHD, LRCX, MRVL, FSLR and WYNN.
Stocks to Watch on Thursday
Holding Above 30 DMA
HLF, PCLN, RVBD, AGU, MCD, POT, LVS, NFLX, CMG, TSL, FCX, SINA, VOD, AIV, BUCY, CAM, DE, DHR, DOW, PCP, SWK, UNP, URE, WLT, WMT, A, HAS, IPI, JEC, LXK, CAT, ICE, FLS, MHS, ATW, STI, ACN, ATI, AMX, GES, PNC, RMBS, ZION, NDAQ, UAL, USD, MA, NETL, ESI, GME, HSY, CHL, FDX, NTRI, AMD, TIE, V, ATI, BA, DECK, GR, UCO, USO, WHR, AKS, BYI, CLF, BAC, CSTR, GS, SPG, HANS, MOS, NYX, PNC, SNDK, SWN, UPS, VECO
Moving Above 30 DMA = 1
TLT
Moving Below 30 DMA = 7
CREE, CRUS, DLR, FFIV, SKX, VMW, WFMI
Staying Below 30 DMA
NTES, CRM, GMCR, POT, TBT, X, FAZ, UNG
Intermediate Term Market Trend: Neutral
Short Term Market Trend: Up
31 comments:
Dave,
That was hi-larious!!! I would be laughing even harder if I hadn't taken a healthy loss on two of the stocks mentioned:)
That was great !! That reminds me of another Steve Miller song....
http://video.search.yahoo.com/search/video?p=steve+miller+song+the+joker
See you at 4 day live in two weeks..
I'd laugh too, if rvbd, nflx & amzn hadn't busted through my stops.
Thank the Lord for re-entries.....
Dave,
You have no idea how many people follow this blog. I, too, have improved my trading. I am back to zero from where I started a month ago, but I would have gone VERY negative had I not employed the OCO stop/target - that is what got me profits in the first place that were taken away today. You win some and you lose some but definitely become wiser for the experience. The Steve Miller song is very appropriate - one of the sayings I have taped up on my computer is "When it looks really good, it's time to sell" - should have taken the gut reaction this morning!
You're blog is like the weather - always check it to get a feel for what we are about to face. You've always said you cannot predict the future, only forecast from past indicators.
The real question (which I'm hoping you will be able to answer at some point) is WHY did the reversal happen? I still cannot really find a cause or catalyst - except the theory that market manipulators went in today to see how much they could mess with the market and frustrate traders ("it's a conspiracy, man" - Cars).
I am remiss in not regularly commenting my thanks, but please know that you're insight is a compass to me and others I have talked with over the past year or so and the time to thoroughly and methodically outline the trading points of the day is very grounding to make logical, level-headed decisions. Blessings to you for all you do for us.
VC in AK
Dave,
I really, really appreciate the time and effort you put into this blog! It is very helpful and encouraging. Thanks much:)
Your blog really provides insight. From what I have learned last week at the Workshop through the past couple Capstones/Investor Talks, this is starting to make sense. Today taught me alot why we use stops. The paper carnage on some of the trades would have been much worse. Some of the paper options may have lost all their value by close without them.
Rob
(I had problems with the word id thing)
Dave,
I read your blog religiously and attend all your classes. I ALWAYS learn something. Thanks for the humor today. After loosing all my profit today you made me laugh. I need more help on moving my stops and would appreciate your guidance in this.
Your Faithful Student
Paula
Dave, thanks so much for everything you do. After more than a year of listening to you in the Monday night ATA class, attending your workshop (you were great in Cincinnati), and reading your blog; I am still learning things that help improve my trading and help me to think more like a chess player. You're a great trader and because you are also a great teacher; I'm a GREAT TRADER too!!
Dear Dave:
Your teaching touches our lives in a positive way far beyond trading.
We appreciate all that you do for us. Love chart signal, AT Caps, AIT, work shops and looking forward to 4-day live in 2011 (purchased already)
Best Regards,
Dave;
After all the time you put in, its only fair that I spend a couple minutes acknowledging it.
Your commentary on the mechanics of trading, how to interpret real live situations and bull flags everywhere have kept me in the game and made winning trades for me. More to the point, some of the principles of what you say has really sunk in. I have listened to a lot of trader educators lately and yours is one I keep coming back to.
Polishing one more detail at a time.
RD in CA
Hmmmm. I was singing something a little different today....
http://www.youtube.com/watch?v=0lhf9U5Wf3Q&feature=related
Do NOT stop blogging. Evie likes spending time with me so you give me short cuts! It is good.
Dave, you are outrageous at what you do. Yes we are listening and sometimes we even hear. I am takin' my money and runnin'.
Dave,
It was a tough day for what were high flying tech stock like NFLX, NTAP, FFIV, AMZN, and many others.
I read this blog every day.
Thanks for posting this blog daily.
Dave,
I also thank you for your posts! I reference them daily! :)
An observation, perhaps there was an over-reaction to the news about EQIX. Please reference this article: http://www.reuters.com/article/idUSTRE6955OZ20101006
It mentions the acquisition of a smaller company that it is having difficulties transitioning into EQIX: "He said the company, which acquired smaller competitor Switch & Data earlier this year, was finding it difficult to transition the latter's customers into its business." _IF_ that is the case, and it is actually a problem within EQIX and not all "cloud" companies, then it seems the prices of the other stocks should recover fairly quickly.
Considering the above as a possibility, is it reasonable to look at CRM as making a mid-day bull flag and triggering a buy signal? Too high risk?
Thank you, Kathy :)
Dave,
This blog is so great I made it my home page! It's checked first thing in the morning and the last thing at night. Thanks for putting so much energy into this blog and for making all of us better traders.
Dave,
I listen and read your comments daily. Your comments are always part of our group discussions.
You are a cherished mentor, your teaching and tips have made all the difference in my trading. Thank you for being such a giving person.
Gary Eiden
Dan,
Stay with whatever trend is on the chart. If exit signals occur then follow your rules and exit.
Today it was only certain stocks that the traders did take their money and run...
Remember ROTATION...they are putting those profits in other up trending stocks.
Cheers,
Dave
Dave,
I read your blog daily. Thank you for your post tonight. Very helpful! I look forward to seeing you in Orlando next week!
Ronna
Dave, I swear. That youtube song just launches you into a whole new category of the MOST UNBELIEVABLY COOL STOCK MENTOR OF ALL TIME. You really got me on that one. I was thinking "oh, maybe some inside info..perhaps on some kind of mini flash crash activity with some select stocks etc. that Dave knows the inside scoop." But as soon as I saw that youtube tittle I knew exactly what you were doing..As I said, it's one thing to be the best spot on stock mentor of all time, but now to be the absolute coolest one too.....wow....
Wish you had time to do more real time entries on this blog as you do on occasion. It makes it in a league of it's own...thanks..
Dave,
Review of your blog is a part of my daily routine. AT Capstone, AI Talk, and Weekly Wrap are all reviewed each week. The insights and instruction that you share are incredibly valuable and greatly appreciated. I was fortunate enough to be able to attend the class in Cincinnati last week and that helped to put some of the finer details in place to refine rules and drive more consistent execution. Took a few bumps today but all were within the context of the planned set of options. So onward with plan the trade, trade the plan, “I’m a great trader”.
Best Regards,
Rob in Raleigh
Dave,
Are you saying that Billy Joe and Bobbie Sue took our money and ran??
Great stuff as always!
Tampa Trent
Dave,
I wanted to let you know we are listening. Thanks for the insight. We have been tracking your thoughts since we were with Investools where we left over a year ago. We check in almost every morning. Again Thank You.
Stacey and Sally in NM
What agreat LInk to the SM Band!! Loved it Dave!
BHesker
You had me laughing after a bad day. Thanks, Janet Holt
Dave- We love your blogs and i read them everyday...
When i have a bad day in the market, meaning i lost more money than i was expecting, and feel like quitting this active investor trading business i read your blogs and listen to you. You are such a great teacher and your soothing calm voice get me back enthused every time. Thank you for all you do for us!
Dave,
I didn't have a chance to comment yesterday. I wanted to early this morning. I do follow your blog every day and it is very helpful and I appreciate your insights daily. I also am an Investools student since 2003, been to 4 of your workshops, follow you on Investor Talk, capstones, and virtual coaching. Thank you for all your good work. It has improved my trading. Gary A.
Your posts are the touchstone of my investor education. So grateful for your generosity!
Judy B, Knoxville TN
(must be true because it rhymes:)
Thanks, Dave, for your daily guidance! As someone stated couple of weeks ago, your information is my daily vitamin and coffee that I am so dicted to it. Just want you and everyone out there to know: You're the best guru of the stock market! I can't thank you enough for your generous sharing! May God continue to bless you and your family! Thanks for your daily guide!--Jessica Min
Fun post with the song. :) Yes, I hear you plenty, I listen/apply some. I need to listen more. :)
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