A Big Change
I have been
saying that I thought this was a rally in a bear market. I have been
saying that it looks like the March/April period. It still may be…but I don’t
care what I think. I follow the markets…and they
have continued to improve. More importantly, I see stocks that are starting to
break out and for a big change…holding the breakouts. This is a definite
positive.
Another positive is that the
bottom-feeders now appear to be rallying. Some of the worst stocks in the
markets can be seen floating up. I think you can take it two ways: You can worry
about frothiness coming on again, or you can say that the bottom is lifting. I
tend to give more weight to the latter.
So what do you do? Discipline, my friends…discipline. You can begin by finding
high-volume breakouts. What a concept — I know! Good-looking breakouts are a
phenomenon. Neither you nor I have seen a lot of them over the past several
months. But you have to probe some time. I learned from Jesse
Livermore that when you are unsure…probe! You
don’t have to go full steam ahead. If this market wants to get more legs, you
will know. Your stocks will not come back down and fail and more and more
breakout names will show up for you to interpret.
Like
(
JAKK |
Quote |
Chart |
News |
PowerRating)… which moved out on
almost four-times average. Â
Like
(
ETH |
Quote |
Chart |
News |
PowerRating) which gapped out on three-times
average.
Like
(
PECS |
Quote |
Chart |
News |
PowerRating) which gapped out on almost six-times average.
The NEW HIGH LIST. Make it your best friend at this time. If it continues to
expand with quality names…not Muni Bond Funds, not $5 stocks but quality
growth names…then the risk of the markets turning tail and crashing in the
near-term could be shrinking.
But…had to throw out the other side of the coin.
As I have been saying, Medicals have been following
my script perfectly. They have been getting destroyed. In other words, the
charts are leading us very nicely to what has been working and what has not. Defense
issues have also been on gag patrol. But...that’s
two buts…no matter what…close stops on all trades.Â