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Anybody have a guess how IBD will call this tonight?
6 distribution days on NYSE (unless one drops off), plus leaders killed, reversals everywhere. CRYSTAL told me to not screw around with "up-trends under pressure" and the like, she called it this way.
~~~~~~DON'T MESS AROUND, THIS IS A CORRECTION~~~~~~
HENCE got busy this afternoon, 80% in cash, the short campaign has begun as well.
~THE CRYSTAL BALL
I don't really care what IBD calls it. My portfolio called it market under pressure already.
Sure looks like a lot of hallmark characteristics of a correction/bearishness are popping up:
Last Wednesday 2-20-2013: Distribution day in all indexes
Last Thursday: Sequential distribution day, all indexes
Last Friday: All markets up nicely, but volume off
Today, 2-25-2013: Started out strong, dow up 80+, then negative reveral as day goes on and down 100 at one point this afternoon, sinilar daily action on S&P and Nasdaq. If markets close down on volume today and add distribution days, seems like IBD would go to "in correction" tonight.
Here is what IBD noted this morning in intraday market column:
"The stock market today launches a critical week in the test of the two-and-a-half month uptrend. The Nasdaq logged its second weekly decline last week. The S&P 500 notched its first weekly loss since December. The NYSE Composite is hauling six distribution days, signaling heavy selling by institutions.Read More At IBD: http://news.investors.com/investing-stock-market-today/022513-645574-futures-point-to-positive-open-monday.htm#ixzz2LwqyyOuRFollow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook"
At end of day today, we now see a negative reversal day with increasing volume into close with Dow down over 200 and Nasdaq down 45. Not a very successful "launch" of a critical week.
Just to follow up on prior post, and in light of IBD's emphasis on the M in canslim, the market surely is signaling a correction beginning. In last 4 trading days, the markets have logged a distribution day on each index for 3 of the 4 days. All 3 distribution days came in above average daily volume, and the one up day last Friday came on down daily volume that was also below the average daily volume. For last 4 days, Nasdaq is down 96 points, SP5 down 41, NYSE down 284 and Dow down 250.
How long will it last? Who knows,I don't predict, just watch for a confirmation day down the road.
We are in the 4th or 5th year of a BULL MARKET, with the potential of a BEAR market that could last 9 months to 15 months or more.
HERE IS MY QUESTION:
Do you sell your long positions no matter what, and go into cash?
Do you sell only the stocks that act poorly, such as a break through the 50-day on volume?
Do you sell on high volume declines (like I did last week on KORs)?
I have rarely done well at this stage of the market. In the past I handled this area of the market cycle in two ways.
1 - Sold all - Only to have everything rally hard and leave me empty handed - usually though maybe earlier in the Bull Cycle.
2 - I have held - And yes (Murphy's law) was crushed by declines so severe there was no getting out in time.
Is anyone with me on this?. I am pretty sure this is how I got ousted out of NFLX at around $30 share in 09, but that was the BEGINNING of this new Bull market we are in now. Does an investor even try to hold "potential future winners" this late in the Bull market cycle or are we just wasting our time?
I find this answer very difficult. Also assume you have three leading stocks that are currently on the LEADERBOARD LIST for the sake of the conversation and none show major signs of stress; in fact rather the opposite, they have good relative strength. Thanks for any imparted wisdom!
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