The Dow Jones Industrial Average continues to grudgingly head higher on very low end of year volume. This is occurring even as the leaders are beginning to break down. Many other leaders are still consolidating so we need to watch closely as they approach the 50 day moving average. A break on volume below this average will not be welcome. Before committing new money to new positions we must discover the direction of least resistance for the indexes. A move in either direction early in 2011 will give us our cue. Don’t guess just wait for the stock market to turn its next card. Profit comes from NOT forecasting the market (which is impossible) but reacting to the action as we see it each day.
The astute trader could play commodity stocks since they have been very powerful the last few months. I would not recommend commodity stocks in this blog because they are cyclical in nature and are hard to play. Growth stocks have a track record of increasing revenue and earnings. Commodity stocks are much harder to play being cyclical. These cyclical stocks can go from profit to heavy loss and back to profit in the blink of an eye. Cyclical stocks are tied very closely to the economy and currency swings and are not for the casual investor. Long term profits come from growth stocks which often trend longer term giving us greater chance of success in the stock market.
A number of my readers have been asking for more regular updates. To comment on the market on a daily basis is for day traders only, however I can understand the need for more information. For this reason I have started giving short concise comments on a more regular basis at http://twitter.com/rmhs my link is also on the left. Additionally I will continue to comment here as and when I consider necessary.
Friday, December 31, 2010
Friday, December 17, 2010
Dow at 2 Year High
The Dow Jones Industrial Average is teasing a 2 year high yet we see lots of sluggishness. A decisive breakout to the upside would certainly be welcome. Looking at the indexes reveal painful gains as we move higher. At the same time many of the leading stocks have retreated back to their 50 day moving averages. The answer to the next move as always will lie with what the leading stocks are going to do. Some of the leading stocks have broken down this last two weeks but others are going through a healthy consolidation.
Most of my followers should be close to be 100% invested by now and perhaps in the last two weeks may have fallen back a little as some stops got hit. At the same time if you have seen opportunities to add to positions then by all means do so. In a market such as this you have to trim the losers and add to the winners. As we continue to move sideways we will hopefully see new stocks setting up for potential breakouts later. Those stocks will be the ones that have refused to go down and are setting up for the next rise.
A number of my readers have been asking for more regular updates. To comment on the market on a daily basis is for day traders only however I can understand the need for more information. For this reason I will start giving short concise comments on a more regular basis at http://twitter.com/rmhs my link is also on the left. Additionally I will continue to comment here as and when I consider necessary.
Most of my followers should be close to be 100% invested by now and perhaps in the last two weeks may have fallen back a little as some stops got hit. At the same time if you have seen opportunities to add to positions then by all means do so. In a market such as this you have to trim the losers and add to the winners. As we continue to move sideways we will hopefully see new stocks setting up for potential breakouts later. Those stocks will be the ones that have refused to go down and are setting up for the next rise.
A number of my readers have been asking for more regular updates. To comment on the market on a daily basis is for day traders only however I can understand the need for more information. For this reason I will start giving short concise comments on a more regular basis at http://twitter.com/rmhs my link is also on the left. Additionally I will continue to comment here as and when I consider necessary.
Friday, December 3, 2010
Successful Retest - EPAY CNK DDIC MNRO
This week was packed with news as we had to consider budget deficit commission, fed speak on QE2 and the latest unemployment numbers that came out today as well as the ongoing problems in Europe. We could spend a few paragraphs talking about each of these and quite frankly it doesn’t help the investor since it is all just noise which can sway you either way regarding your stock holdings. As always let’s forget the noise and look at price and volume of the stock market which is all that matters.
Note the graph of Dow Jones Industrial as shown above courtesy of www.bigcharts.com indicating price, volume and the 50 day moving average over 6 months. As so often happens we have successfully retested the moving average by bouncing up off it. This is of course very good news for the bulls although it would have been more convincing to see volume increase on the rebound.
After recent hesitation in buying it would be acceptable to be on the look out for more investments. Hopefully over recent weeks during this small correction you have been carefully monitoring the stocks you own and maybe tightening up a little on the sell stops. I have found that most of my leaders have so far held up and are starting to move up again as I resume the buying. During any minor correction it is very healthy for the stocks you own to move in a sideways action for a few weeks consolidating recent gains. If and when the stock market resumes its climb these stocks will hopefully be first to move since they did not fall by much in the correction.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks. Rather the idea is to teach stock selection with low risk advice.
EPAY - $19.45
CNK - $18.60
DDIC - $10.98
MNRO - $51.42
Note the graph of Dow Jones Industrial as shown above courtesy of www.bigcharts.com indicating price, volume and the 50 day moving average over 6 months. As so often happens we have successfully retested the moving average by bouncing up off it. This is of course very good news for the bulls although it would have been more convincing to see volume increase on the rebound.
After recent hesitation in buying it would be acceptable to be on the look out for more investments. Hopefully over recent weeks during this small correction you have been carefully monitoring the stocks you own and maybe tightening up a little on the sell stops. I have found that most of my leaders have so far held up and are starting to move up again as I resume the buying. During any minor correction it is very healthy for the stocks you own to move in a sideways action for a few weeks consolidating recent gains. If and when the stock market resumes its climb these stocks will hopefully be first to move since they did not fall by much in the correction.
Here are a few more stocks performing well and looking ready to move higher if the stock market holds up. Make sure as always that earnings are not imminent for any new purchases. Remember this blog site is not a newsletter that promotes stock tips or penny stocks. Rather the idea is to teach stock selection with low risk advice.
EPAY - $19.45
CNK - $18.60
DDIC - $10.98
MNRO - $51.42
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