The Day that Was - August 27th 2007

Another day with even lower volume again. The markets have absolutely NO conviction to go one way or the other. I can't emphasize enough that this is why I am not providing you a lot of swing trade ideas. They are too risky here. My goal at RebelTraders is to help you make money in the markets. And part of that education is knowing when it is more prudent to wait for a market to stabilize. I will not give you swing trades when I myself will not take them because I see a weak market.

This morning we were given some more bad economic news. The existing home sales came in and they were below expectations. The housing crisis is far from over. No bottom in sight from my view with regard to the problems in the housing sectors. I am surprised to see some web sites refer to last week as a rally. You don't have a rally if most of the people are sitting on the sidelines watching as evidenced by the low volume in the markets. When you build a house of cards you want a lot of cards on the lower levels in order to provide strength the higher you go. If you build up that house and you have only a few cards at the bottom then your asking for trouble and it is likely to fall. That is the point I was trying to make in my commentary last night. Why try getting to heavy in swing trades when the volume propping the markets up is weak. It is prone to fall with a poor foundation.

Someone left a comment yesterday asking what about the volume back in February and June. My answer is that you must take into account the down volume vs the up volume. Go back and examine the volume on those pullbacks and compare that to the selling volume we have just experienced over the past weeks. When you have very heavy sell volume and the bounce that follows is light volume then there are more sellers out there that are not coming back into the market yet. They are sitting on the bleachers while they watch a football game with only a few players on the field. I would rather place my swing trades with a full playing field of players, not just a few. I want the best odds in my favor.

Today all of the indices declined and the very low volume is just one more piece of proof that the money movers are waiting for a clear sign that the markets (and the economy) is worth of them getting back into the game. Yet again today the 10 year T-note yield went down (signalling more money going into bonds as apposed to going into the stock market).

Picking stocks is more involved than just looking at a chart for some company like RIMM, or AAPL, or whatever your favorite is. You can look at a chart and say that it looks good or that you like the company and their fundamentals but before you pull the trigger to buy something you also need to place that stock chart within the broader charts of the market. Is the broad market near resistance? is the broad market showing signs of weakness?, is the sector that your stock in going up or is it going down? These are important questions to answer before you just buy something. A person who just picks stocks and does not educate you on the important aspects of technical analysis of the sectors, broad market indicators, etc. is not doing you any favors. They are taking chances. You may get lucky. You may get a winner here and there without looking at any of the other charts or broad market indicators. But for me I want to be more than just "lucky", I want to be consistent and methodical. Have a plan... and trade your plan! With the broad markets rising on pitiful volume levels that tells me "this is not the time to make good trades" because the risk is higher than the reward. Remember the old saying "A rising tide lifts all boats". So if you decide to buy a stock and the tide of the ocean is about to go out then your swing trade stands a higher chance of failing.

When the tide is rolling in (with strength, and not just a few ripples of waves) then swing trades will be in force again. Do not feel the need to be trading all of the time. For if you do then your chasing every opportunity and forsaking reason and logic just for the excitement of the trade.

Winners don't get excited and emotional. They get rich.

Now some other notes about Rebeltraders. At this time I have a tentative time table established for the progression of the RebelTraders web site and members area.

This site will remain as it is now until the end of this year. Beginning on January 1, 2008 a RebelTraders Web Site with live chat area, message board, stock picks, education resources, etc. will become operational. That web site will be free and open to all. On April 1st 2008 the site will be closed to "members only" and will be a subscription based service. The price will be lower than most typical web sites offering similar services.

After April 1st 2008 this current web site will still be in operation for general market commentary but all stock charts, sector analysis, stock trading ideas, etc will be closed to the subscribers.

And as I previously stated those who are current subscribers with me now will be included into the members only site free for the life of the service. A thank you to my charter subscribers who have been signing up here on m=this web site during it's growth stages.

Have a wonderful evening Rebels.. Tomorrow is another day and in the morning we will get a feel for what may be in store for us then.

Cheers !