Tuesday Sept 16 , 2014 There was a time that I HATED pullbacks in the Markets. Many years ago I thought something might be wrong when Markets sold off. CNBC would tell me that it was because of “THIS” and “THAT” , and there was no end in sight to “THOSE THINGS”. I worried that the sell offs would gain momentum and people would panic out leaving me with losses. Come to think of it, back then it did kind of work that way, but thats mainly because of WHEN I bought, and DIDNT SELL. 15 years later , and in this recent Bull Market, I love the Pull backs. They have been great buying opportunities, and while the Bull Market can end at any time (and you’ll need to reassess and change your strategy then) for the past few years, “BUY THE DIPS” has been the best way to make $$. If you’ve been watching stocks rip higher and Higher day after day and then jumped in after they’ve been up 5 days in a row – you realize that ‘BUY THE DIPS, SELL THE RIPS’ is a good strategy.
As a reminder, I posted a chart last SEPT 5th of the SPX, showing what I watch for. Here is an Updated one . Notice we repeatedly run up, often go sideways, then dip…often to the 50sma or 125 in bigger corrections. Where are we now ?
There is one thing that may be of concern. The FED is discussing possibly raising rates sooner then later and how will the MKT perceive that? Notice in the above chart that the SPX has basically gone straight up lately….
SEPT 12 I pointed out with this chart that the NASDAQ is even looking slightly parabolic with minimal pullbacks. So far, its still just approaching the blue line
Looking at the RUT & IWM, there has been more of a long consolidation / sideways move. Its STARTING to look like a rounding top. KEEP THAT in the back of your mind, because if we continue to make lower highs there….it could be an early warning that distribution is taking place. Big Boys may be unloading at the top (Creating a top).
Just something to keep an eye on, but for now I am still buying the dip.
SO let me just post some quick charts of set ups I’m watching in the selling phase. I look for LOW RISK ENTRIES…For Example, you can buy a stock that got over extended and is lightly dropping back to support, a prior break out, or its 50sma for example. Are earnings already released? Did it POP on heavy volume & drop back on light? THEN its a lower risk entry , because if it breaks down from there, you MUST SAY…This isnt doing what I expected, I’m Out until I see what it wants to do. Sometimes they recover, sometimes they continue to act incorrectly. CHARTS!
I actually bought LUNA yesterday & Tweeted out this chart. Its a low price stock, but thats ok for me if its a “TRADE” idea.
It reversed on support and is near lows, but it did show signs of BUYING .
Did you see ETAK? I TWEETED this Sept 12 chart
I sold a large chunk of VIMC ( I HATED TO…but it was up over 70% from my initial entry) . I still own some, but am looking to add under $6 .
NOTE: VIMC is STRONG and the dips can be quick. The last BUY at $5 was just a quick dip. If conditions are right, you have to be brave & just “BUY THE DIP”. Here is how it looked tagging the 10sma for the 1st buy , & then the dip to $5 just dropped to the 9sma & it ran to over $6.79!. Its getting stronger….( just so you get a feel for it).
I have bought and sold OTIV repeatedly…it trades very well. I own some, will add on a dip to the 9 or 10sma
Note: OTIV may have even more downside to the 20sma if MKTS correct deeper.
I pointed out the potential in GTIM (Great earnings & Growth). It DIDNT pull back yesterday, so here is what I see…
I pointed out this on PRAN...Yesterday was closer to the BUY if you wanted it . Pran buy at the 20sma, or GAP FILL just below if it reverses higher ??
1 day later , closer to a BUY. Gap fill or 20sma = Low risk, if it drops further , you are out.
I’m running low on time here…I want to get this out before the NMKTS open, so I will just throw up a few charts that I had posted before ( Not updated…they were trade ideas and yesterday & todays pulling back may make a clearer picture) I’ll do this to remind you of a few names and you can watch the charts through out the day. (I will be away helping family today , trading in between errands, so I will have to answer any questions later tonight).
NETE REALLY PULLED BACK YESTERDAY!! I REALLY wanted it here…now its tricky
MNDL? Has pulled back even more
Older chart of CMGE –
By the way…I LOVED the SOLARS, until yesterday. I had a bunch of charts to post yesterday, but they reversed on strong volume
…they may be something to watch however if volume lightens up.
FUEL (Like SPRINT?)
And watch VMEM for a Healthy pullback , it has started. I posted these
Thats all for now…we may be in a BUY THE DIPS mode, so go out there and Hunt down the Equities that look like they may be ready to run again!!
Dont forget about GV, HPJ, BV, etc etc etc
Best wishes to all, Happy trading!
P.S. check out SINO