Making Money Will Be Easy
The market
has been telling us very little over the past few days. We have seen
the market rally since last Thursday’s column, but volume has been receding.
For now, we have to follow the market’s
action that led up to four distribution days over a 10-day trading period. Since
then, new purchases should be looked at very closely, if considered at all, and
current positions should be reduced or followed very closely for any signs of
trouble.
Engineered
Support Systems
(
EASI |
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Chart |
News |
PowerRating) has been one stock that has been making
many attempts to push higher, but the market has been a thorn in its side.
The metal and plastic packaging
company, Ball Corp.
(
BLL |
Quote |
Chart |
News |
PowerRating) has been
trying to push higher, but volume has been getting lighter throughout most of
the move after the initial breakout.
The Commercial Services group,
specifically Schools, has been making every attempt to move higher. As seen
through Apollo Group
(
APOL |
Quote |
Chart |
News |
PowerRating) and
Corinthian Colleges
(
COCO |
Quote |
Chart |
News |
PowerRating), the past week-and-a-half has seen rallies halted by overall market weakness.
It’s very tough to swim against the
tide, and that is what stocks are trying to do when distribution is prevalent in
the major market averages. Fortunately, this can change very quickly. It is very
important to monitor the market’s action on a daily basis. For example, the
rally that began last Friday could lead to something more, if we see a large gain
in one of the major indices on heavier volume than the previous trading day
beginning on Wednesday.
For now, it’s important that investors
focus on one thing while the market has flashed warning signals: Capital
Preservation. If money can be made without violating this objective, then that
is even better. But when the next Bull Market begins, making money will be easy
and it will be very important to have as much capital available as possible. It
will also be important for us not to sacrifice our confidence in order to score
a few, short-term profits during a bad market.
If we do see the market post new
evidence of accumulation, I will be back with a few names to keep an eye on.
Meanwhile, keep an eye on the overall market action after the close each day
and patiently await the next real opportunity.
Until Thursday,