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Although I see missed opportunities it seems I am having so many failed breakouts in a row. Anyone else experiencing this? Perhaps that says something about where we are at in the market?
The same with me. I saw all these big winners, but for some reason bought differents stocks and had so many failed breakouts in a row. I felt like it was something wrong with me, everyone was so excited about this uptrend and my account was in red.... You see , I was following my personal rules and this time they were not working. I also noticed that a lot of stocks after breaking out do not make any progress in price before earning report, so it is almost impossible to get a cushion 5-10%.Last week I checked all stocks which broke out during last 8 weeks and noticed that from 94 breakouts only 10 had gained more than 5 %, 32 were still in blue zone (0-5%) and 52 stocks were below buy point. It is tell something about the market, is not it?
Buying breakouts works in nice bull markets. But the belief that it works in all markets is dangerous. I have abandoned the method a few years ago. I prefer to buy constructive pull backs. It is much safer and works more consistently in different types of markets. For example, I will put a good IBD type breakout on my watchlist and watch the behavior at the first test of the breakout or the first pullback. Yes, some great names will get away from me but many many times I avoid being caught in the shakeout.
I feel a bit disappointed the people doing the webinars have not been willing to have a more open discussion about this issue in these markets. But I guess we must do our own trading. One cannot rely on anyone selling product. This applies to financial advisors and it applies to people selling trading software. It is absolutely imperative that one makes one's own observations and own decisions.
I also checked the progress from breakouts to next earning report during last 30 days. Only 3 stocks had a cushion more than 5%, 18 stocks had a cushion 1-4% and 39 stocks were below a buy point before earning report.
Some notes from the Old IBD Desk Diary:
“Besides providing a framework for selecting winning stocks, CANSLIM is also a “market feedback system” system, e.g. if Canslim stocks are breaking out and failing, or if the rules of Canslim suddenly seem like they don’t work anymore,--that is telling you something about the health of the market” 11-6-2004 desk diary.
“Shifts in market direction can also be detected by reviewing the last four or five stock purchases in your own portfolio. If you haven’t made a dime on any of them, you could be picking up signs of a new downtrend” 10-5-2004 desk diary
It's validating to hear others are facing the same issue in this market (I was going to say "comforting" but that's not appropriate when things are going against you). I like ebaasch's idea of waiting for the pullback. Very smart.
What a difference one week can be!!! So many breakouts are working, I never have seen so many stocks made such a fast progress just for 2-3 days!!! It is just happened so fast!!! Unfortunately, none was from my watch list :(
seems like the best stocks with great fundamentals and technicals were not performing well. don't force the trade...
The best stocks with the best fundamentals are lagging right now. If you can see RS rating, most of the time it is below 80, even at 50-60. Also when stocks are breaking out RS line must be on a new high. I noticed I had the best trades when almost everything was line up, so I hope this will change soon. Happy New Year!!!!
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