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My Twitter Positions are Up Big

June 8, 2009 by 7 Comments

I have been using Twitter and StockTwits for approximately two months and have highlighted 18 different stocks. Of the 18 stocks, 15 are currently showing a gain and 3 are showing a loss for an average gain of 20% per position. I only analyze stocks that I am about to buy/sell or would possibly buy/sell. I don’t talk about any old stock for the sake of posting tweets and wasting people’s time.

The average gain of the stocks showing a profit is 26%.
The average loss of the stocks showing a loss is 11% (-5%, -8% and -21%).

The top performing position is DXO, currently up 65% with a peak gain above 70%. Following DXO is EJ at 56%, STAR at 50%, RVBD at 40%, FRPT at 32%, ARST at 26% and V & VMW tied at 25%.

Visa (V) has appeared the most with a total of eight mentions (I may be biased since it’s my largest personal holding). DXO has also been an active play of mine since 2008 so it has been the second most popular ticker in my tweets, appearing five times over the past two months (DXO first appeared on this blog last November as a speculative oil play).

I would like to emphasize that the stock down 21% (APEI) would have been cut for a smaller loss using simple money management tools but for purposes of this update, we’ll assume everything is still being held.

Below is the list of stocks highlighted on my Twitter account, listed in date order (starting on March 31, 2009):

  • HTS: +7%, $26.15 from $24.35 on 3/31/09
  • V: +25%, $69.28 from $55.60 on 3/31/09
  • VMW: +25%, 32.59 from $26.12 on 4/1/09
  • RVBD: +40%, $21.52 from $15.37 on 4/2/09
  • STAR: +50%, $22.45 from $15.00 on 4/5/09
  • CXO: +14%, $31.90 from $27.96 on 4/5/09
  • DXO: +65%, $4.48 from $2.72 on 4/20/09 (1st posted on 4/6/09 at $3.07)
  • EJ: +56%, $16.78 from $10.79 on 4/9/08
  • ARST: +26%, $18.19 from $14.46 on 4/9/09
  • FRPT: +32%, $9.36 from $7.09 on 4/13/09
  • WMZ: +12%, $19.85 from $17.70 on 4/14/09
  • CTCT: +10%, $20.14 from $18.36 on 4/20/09
  • TNDM: +15%, $30.78 from $26.81 on 4/20/09
  • CFL: +11%, $30.60 from $27.50 on 4/26/09
  • PAR: +3%, $11.27 from $10.94 on 6/2/09
  • APEI: -21%, $34.56 from $44.00 on 4/2/09
  • MDAS: -5%, $15.90 from $16.79 on 4/23/09
  • MELI: -8%, $23.62 from $25.60 on 5/12/09

If you haven’t joined already, take the few seconds to follow me on Twitter as the bulk of my analysis appears there weekly, if not nightly.

P.S. – the bragging title of this post probably signals a short term top in the market! As I wrote yesterday:

“The main purpose of the stock market is to make fools of as many men as possible.” – Bernard Baruch

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Filed Under: IPO, Stocks, Technical Analysis, Twitter Updates, Uncategorized

Calling Tops and Bottoms: Trend Changes

April 10, 2009 by 2 Comments

Every once in a while you like to look back and review your notes to locate where your research was right and where it was wrong. The simple technique of following stock market leaders and the NH-NL ratio nailed the period of time when the market transitioned from an up-trend to churning to the “Big Decline”. We nailed it here on this blog and every reader was prepared for the imminent decline. No one can dispute that. Readers of this blog were told to move to cash to preserve capital in late 2007 and early 2008. Now, I am not talking about day traders but longer term traders or investors that work full time and do what I do.

The chart highlights in red where I was making the sell posts (the articles are listed below):
041009_trend_change

Anyway, I have been posting twits about the strengthening of the NH-NL ratio which is starting to tell me that the newest trend change is beginning. Yes, this is my first major blog post saying that my screens (market tools) are telling me to wake up because things are starting to change. It’s not time to jump in with both feet and buy every stock that’s up on above average volume but it’s time to sharpen the skills and be ready. We may look back and point to March and April of 2009 as the bottom of the market or at least the start of the changing trend.

We don’t have market leaders yet but when they appear, I will locate them, post up charts and talk about them nightly on twitter (twitter.com/cperruna). Too many stocks still have their 50-d moving averages below their longer term 200-d moving averages and new highs are still limited. However, new lows have dried up considerably and the NH-NL ratio has a moving average that is trending higher for about a month now. That’s the most sustainable trend for this ratio since the big decline started.

Stay tuned to the blog and my twits for follow-ups to my research on individual stocks and the overall trend.

In the meantime, take a look back at the numerous blog articles I posted in 2007and 2008 talking about a market decline, shorting stocks and selling in general. Learn from what the simple tools were telling us. I am far from a market genius and far from rich but I can make a few dollars following the leaders and the NH-NL ratio.

A Review of Articles Pointing to a Stock Market Decline in early 2008:

  • May 23, 2008: Smelling Trouble

    The bottom line or point of today’s rant is the fact that I still feel that the market is headed for a decline or as I phrased it a couple weeks ago: The Big Decline (long term perspective of course).

  • May 8, 2008: Market Distribution

    I originally started to point out market troubles back on March 14, 2008 in a post titled Snapshot Friday; I highlighted both the Dow Jones and NASDAQ with clear yellow shaded areas showing the 200-day moving averages pointing down for the first time since 2003 (that’s huge if you ask me).

  • May 7, 2008: The Big Decline

    I am a positive person by nature and I prefer to buy stocks going up but I am starting to see several leading stocks struggle to hold new highs or fail to challenge recent highs. These patterns are familiar and they are suggesting that the recent bounce is the final stage before a possible market decline.

  • January 23, 2008: Setups for Selling Stocks Short

    I wrote an article on October 15, 2007 titled How to Make Money Selling Short, precisely when the general market indexes were topping. I am not going to take full credit but subconsciously my charts were giving me signals that the market was showing the major red flags and signals of what we are seeing today.

A Review of Articles Talking about Selling, Profit Taking and Market Distribution in late 2007:

  • 10/03/07: Is Shanghai a Nasdaq Déjà vu

    Well, the current two year rise of the Shanghai Stock Exchange Composite Index looks remarkably similar to the rise of the NASDAQ of the late 1990’s and the charts below explain better than I can!

  • 10/04/07: A Technique for Profit Taking

    What do you do in a market like today when you have profits in multiple positions but you don’t want to give it all back? You want to continue to ride the winners but at the same time, you want to maintain the unrealized gains in your account. HOW?

  • 10/12/07: Distribution Day

    This was the largest showing of volume in two months and is not healthy because it was pure distribution. It was only the second distribution day over the past month so we can’t call this a bear run but please be on the lookout for a possible correction of 5%-10%. Technology stocks led the decline as BIDU gave back 10% of its amazing run.

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Filed Under: General Market, NH-NL Ratio, Selling, Technical Analysis, Wall Street

New High New Low Snapshot

January 6, 2009 by 7 Comments

Does the New High, New Low Ratio still work?

Of course it does but just keep in mind that it’s a longer term indicator rather than a short term buy and sell signal. I make today’s post due to what I am seeing with the NH-NL differential as it is starting to tread near positive territory for the first time in many months. The key for a sustainable bull market will be a push to a new 52-week high for this indicator.

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“Chart provided courtesy of “DecisionPoint.com”

For a history of NH-NL posts, please see this category.

How about the foreshadowing provided in the post I made on August 21, 2007? Talk about calling a top!

According to Carl’s data, we must go back to 1998 to find a lower reading than last week’s NH-NL ratio. Even more amazing is the fact that we must then go back 20 to 38 years to find readings in the same vicinity as 1998 and 2007.

Ignoring the spike in 1987, we must visit the 1970’s to find readings below the -400 level on the chart.

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Filed Under: General Market, NH-NL Ratio, Technical Analysis

Top Articles for the New Year

December 31, 2008 by 1 Comment

Happy New Year!

Filed Under: Education, Fundamental Analysis, General Market, Misc., Psychology, Technical Analysis, Wall Street

Critical Market Analysis

November 3, 2008 by 2 Comments

The market had one of its best weeks in months with day one of the pivot reversal confirming on Tuesday as described in Pivot Reversal – Day 1. The Dow closed the week up 11.3%, the NASDAQ gained 10.9% and S&P 500 edged higher by 10.5%.

Airlines, housing, real estate and oil & gas explorers enjoyed some of the biggest gains this past week but they are all still in the red for the year (the US Dollar seems to be the only one enjoying gains in 2008 – YTD).

The NH-NL ratio started to show some strength as the week unfolded with new lows decreasing from 748 on Monday to 49 on Friday (NYSE). The NASDAQ logged 544 new lows on Monday with only 82 on Friday. New highs are lacking across the board but only 6% of all stocks in the S&P 500 are above their 200-d m.a. so we can’t expect new highs to play a major factor in any of our technical indicators.

The second indicator we are watching, based on Martin Zweig’s experience, is the advance-decline indicator. I still consider this indicator secondary to the others but the importance in this type of a market is elevated. Monday’s market showed 679 advances versus 2,526 declines for a 3.7-to-1 negative ratio where as Friday’s market showed 2,308 advances versus 883 declines for a 2.6-to-1 positive ratio. We moved from a collective -1,847 on Monday to +1,425 on Friday and -1,847 to +1,861 from just Monday to Tuesday. Overall, I would have to say this is positive.

The Four Percent Model Indicator, mentioned on Monday, uses the Value Line Composite Index (Value Line Arithmetic Index (EOD) or symbol $VLE on StockCharts.com). Martin Zweig noted that a buy signal is generated when the index rises four percent or more from the previous week. Similarly, a sell signal is indicated when the index falls four percent or more from the previous week. The $VLE was up 14.27% for the week with gains of 8.2%, 2.1%, 4.3% and 3.6% from Tuesday on. That’s a buy signal if you ask me but please tread cautiously because this indicator is clearly secondary so wait for the follow-through from the Dow or NASDAQ.

The “up volume indicator” is the total number of shares whose price rises. As noted, Zweig has found that when 90 percent of the volume (excluding volume in shares whose price has not changed) is upward (9-to-1 ratio), significant upward momentum in the market is likely.

  • Monday gave us a negative reading so we toss that.
  • Tuesday (the pivot reversal day 1) gave us an almost 19-to-1 positive reading with 95% of all volume associated with upward movements.
  • The following three days were positive but they didn’t cross the 9-to-1 ratio or exceed 90% with readings of 53%, 84% and 74% respectively.

All-in-all, let’s continue to wait for the follow-through before making a move.

Filed Under: General Market, Technical Analysis
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