June 5th, 2008

Obama Bear or Bull Market

Did I write “Obama Bear Market”? I’m sorry, I must have hit the wrong keys, I meant to write “Obama Bull Market”. Kidding, of course. But the Market made an pirouette and swirled around above the 90-day moving average. So elegant, a sight to behold:

So are we going to now going to attempt to cross up over the 180-day moving average again, the same as on May 19. But let’s hope that, if it is the case, this time the Market will be able to remain above the line for more than a day. Do you want the good news first or the bad?

O.K., the bad news is that volume continues to be anemic. For any sustained upside move, most say that we’re going to have to see some really big, breakout, follow-through sorts of volume. That wasn’t the case on May 19 and we know what the consequence was.

But on the good side, two of the moving averages have turned up and the downward slop of the two longer moving averages have flattened out; all that’s need to turn them up is for the Index itself to stay above the averages for a week or two.

Another positive note is that the number of new highs is expanding and broadening. If you had purchased any of the 49 stocks I mentioned in previous blogs (see recap up to May 16), as I have, only 4 were down today. From the day I wrote about them, 34 of the 49, or 70%, are up; that’s not a bad average in baseball or the stock market.

And everyday, new ones pop up for the list. Unfortunately, I’m trying to stay cautious (since the MTI is still in Amber-light territory (that’s somewhere between a Yellow-light and Red-Light) so commit cautiously, trying to hold on to some cash. But it’s getting harder since the stocks I have bought (the one’s you know about from the list) seem to be working. For example, here are some I culled from my scans of New Highs, Momentum and RSI:

  • TRA
  • TSM
  • GW
  • VVC
  • MVL
  • SYNT

Finding new stocks to buy isn’t the problem. The real challenge is knowing if and when to sell the movers (like some of the oil stocks). Is a double on ANR in less than 6 months a sufficient justification to sell or do you stick with a winning horse until it shows signs of aging? If anyone has any successful strategies, share it with the rest us, please.

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