Trader Notes: Can we have a trend please?

Well, it was quite fun playing the volatility of the market.   You know, down 500 here, up 1,000 here, down 400 here, up 300 here, down 1,000 there… all in a week or so.  I think there was one day where the market didn’t move more than double digits.  Truly a traders market.  Especially effective was using the Vix to “time the market.”  Here’s a video (my second one!) that I created on how I used the Vix these past few weeks:

 
 

Anyway, I’m not a true value investor, so I hope we can finally get a trend going.  Up, or down… preferrably up.  I have down in my notes that November is a good time to get long commodities… in particular energy stocks, and precious metals.  I would recommend you stay away from the double inverse and non-inverse ETFs for now because the volatility in them will greatly shrink in the next few weeks.  Just take out a 2 month chart of FXP, SKF, EEV… all are losing there “panic effect”… one thing though, I guess if you do decide to play them you can at least shrink your stop losses.  Anyway, there’s better plays out there.  

I hope to get long Freeport-McMoRan Copper & Gold Inc. Freeport-McMoRan Copper & Gold Inc. [[fcx]] , GMX Resources Inc. [[gmxr]] (sold that last Friday, I don’t know why), and stick to fading Chinese stocks on euphoric trading.  

Anyway, now that we have new issues to focus on, in particular global issues (no longer elections), we have to “re-set” our thinking and our approach to this market.  We got Obama out of the way, so the question is what now?  Pay close attention to the action in energy and gold, and especially watch leadership stocks (see the IBD100 list).   The light volume trading in the past week has created a very loose bottom on the Dow near 8700 area and I would be careful making a big bet as to whether that support fails or bounces there.   Usually a quiet market leads to a “melt up”, and that’s probably what we could see there.   I’ll let you know what activity stands out to me on the IBD100 because I think it can give you a hint on what the next chapter of our market is going to be.  Frankly, I don’t believe in the whole Turkey-Rally theme… that’s lazy.  Get out there and scan some stocks and look for what they are telling you.

 

Another thing to notice, is that the Vix is in my “no-trade” zone.   Stuck in the 50s doesn’t tell me nothing!  I was getting long when the Vix was at 80, and that was easier to predict direction.  But with the Vix at 54, and the Dow near 9,000 is frustrating.  Let’s wait a little and see how the rules for the game now affect our strategy.   I’ll sit on the bench for now.

… volume is pathetic.  But we still seem to be forming a bottom, a real ugly bottom, almost made of jello.  But I still think the chances of a “melt-up” on quiet trading is very likely.  

 

Here’s the IBD100 list.  Look who’s #1!  “Gio Approved” AFAM!!  I discovered this stock over two years ago, and I was happy to see it on the IBD100 a few months ago in the high 70s.  Now its #1!   Look out for QSII… that one has the potential to hit the top 10 also.  ISYS is another Big Wave pick (see my list of stocks on the sidebar Google Docs list). This IBD100 list is  as of 11/7:

Rank	Company	Symbol	Price
—-	—-	—-	—-
1	ALMOST FAMILY INC	AFAM	51.47
2	AMERICAN PUBLIC EDUC INC	APEI	46.02
3	EMERGENT BIOSOLUTIONS	EBS	20.35
4	EZCORP INC CL A	EZPW	15.26
5	SOUTHWESTERN ENERGY CO	SWN	34.42
6	INTEGRAL SYSTEMS INC	ISYS	20.39
7	LIFE PARTNERS HOLDINGS	LPHI	33.19
8	PETMED EXPRESS INC	PETS	17.8
9	GENTIVA HEALTH SVCS INC	GTIV	24.98
10	COMPASS MINERALS INTL	CMP	58.19
11	HUDSON CITY BANCORP INC	HCBK	17.65
12	EBIX INC	EBIX	27.42
13	AXSYS TECHNOLOGIES INC	AXYS	64.64
14	THORATEC CORP	THOR	24.53
15	STANLEY INC	SXE	34.25
16	EMPRESA NAC EL CHILE ADS	EOC	38.83
17	CELGENE CORP	CELG	60.31
18	SYKES ENTERPRISES INC	SYKE	17.08
19	AMEDISYS INC	AMED	50.06
20	I T T EDUCATIONAL SVCS	ESI	86.2
21	KNIGHT CAPITAL GRP CL A	NITE	15.82
22	SYNAPTICS INC	SYNA	28.86
23	NATIONAL PRESTO IND	NPK	65.4
24	ENSIGN GROUP INC	ENSG	15.12
25	N C I INC CL A	NCIT	22.86
26	QUALITY SYSTEMS INC	QSII	38.94
27	STRAYER EDUCATION INC	STRA	219.94
28	AEROVIRONMENT INC	AVAV	32.32
29	PSYCHIATRIC SOLUTIONS	PSYS	32.43
30	WORLD FUEL SERVICES CORP	INT	27.46
31	WEBSENSE INC	WBSN	18.06
32	CORNELL COMPANIES INC	CRN	22.88
33	PANERA BREAD CO CL A	PNRA	44.41
34	CHATTEM INC	CHTT	72.08
35	MANTECH INTERNATIONAL	MANT	49.4
36	ROCK TENN CO CL A	RKT	32.72
37	HOME BANCSHARES INC	HOMB	26.31
38	SOUTHSIDE BANCSHARES INC	SBSI	21.69
39	NEOGEN CORP	NEOG	28.26
40	L H C GROUP INC	LHCG	33.07
41	FLIR SYSTEMS INC	FLIR	30.23
42	ONEOK PARTNERS LP	OKS	53.83
43	H M S HOLDINGS CORP	HMSY	25.1
44	SOMANETICS CORP	SMTS	19.52
45	FIRST CASH FINANCIAL SVS	FCFS	15.11
46	CEPHALON INC	CEPH	71.5
47	STERIS CORP	STE	33.24
48	SHENANDOAH TELECOMMCTNS	SHEN	22.55
49	SPARTAN STORES INC	SPTN	25.84
50	PINNACLE FINANCIAL PRTNR	PNFP	28.33
51	GLOBAL PAYMENTS INC	GPN	41.07
52	TECHNE CORP	TECH	69.24
53	A A O N INC	AAON	19.09
54	CLEAN HARBORS INC	CLHB	63.98
55	STERICYCLE INC	SRCL	55.95
56	C H ROBINSON WORLDWIDE	CHRW	51.76
57	MARVEL ENTERTAINMENT INC	MVL	30.01
58	NETEASE.COM INC ADR	NTES	21.72
59	DEVRY INC	DV	55.53
60	FLOWERS FOODS INC	FLO	26.65
61	DOLLAR TREE INC	DLTR	37.9
62	GENOPTIX INC	GXDX	38.63
63	EXPRESS SCRIPTS INC	ESRX	59.87
64	EXXON MOBIL CORP	XOM	73.95
65	GILEAD SCIENCES INC	GILD	45.04
66	ASTRAZENECA PLC ADS	AZN	42.65
67	SOUTH JERSEY INDUSTRIES	SJI	34.28
68	BARD C R INC	BCR	87.14
69	HAEMONETICS CORP	HAE	57.53
70	CALIF WATER SVCS GRP HLD	CWT	38.76
71	TRACTOR SUPPLY CO	TSCO	40.87
72	STANDEX INTL CORP	SXI	26.49
73	EMERGENCY MEDICAL SVCS	EMS	34.14
74	HEALTHSPRING INC	HS	16.42
75	BOARDWALK PIPELINE PRTNR	BWP	22.37
76	MCDONALDS CORP	MCD	55.47
77	NORFOLK SOUTHERN CORP	NSC	53.72
78	SUNOCO LOGISTICS PTNR LP	SXL	45.52
79	FORRESTER RESEARCH INC	FORR	26.5
80	QUIDEL CORP	QDEL	15.77
81	CHEMED CORPORATION	CHE	42.5
82	GENESEE & WYOMING INC	GWR	32.7
83	GENZYME CORP	GENZ	70.38
84	BAXTER INTERNATIONAL INC	BAX	59.35
85	ARGON ST INC	STST	21.44
86	BALCHEM CORP	BCPC	24.46
87	AMGEN INC	AMGN	58.87
88	APOLLO GROUP INC CL A	APOL	69.61
89	MYRIAD GENETICS	MYGN	70.93
90	COVANTA HOLDING CORP	CVA	22.01
91	ORACLE CORP	ORCL	17.53
92	CHEVRON CORP	CVX	73.46
93	GRAINGER W W INC	GWW	72.18
94	PROASSURANCE CORP	PRA	47.95
95	CAPELLA EDUCATION CO	CPLA	52.49
96	EXPONENT INC	EXPO	27.5
97	SIGNATURE BANK	SBNY	29.88
98	IMMUCOR INC	BLUD	27.17
99	FRANKLIN ELECTRIC CO	FELE	39.95
100	B J S WHOLESALE CLUB INC	BJ	37.07

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