Rallies Keep Getting Sold

It has been a few days since I posted, because I have either been in meetings or traveling since Wednesday.

I am now back in town and want to go over a few things.

First – No More Voodoo
My bread and butter is interpreting price and volume. I can tell when stocks are being accumulated and when they are being distributed. I buy when and what Big Money is buying and sell when and what they sell. This requires a lot of work each and every night, but it has kept me out of the Bear and will get me into the Bull.

Elliott Waves and retracement levels are great theory, but if Big Money wants to sell, they will do it. Regardless of whether or not there is potential support. That means that if Big Money wants to take out the 2008 Low on the NASDAQ, then it will and there is nothing that can be done to stop it. We’ll see how the NASDAQ trades the next few weeks.

Right Now, Big Money Is Selling
This may change when I walk into the office in the morning, but the selling is obvious. Every rally (they last an hour or so) is sold hard.

The selling now may include those who wrote insurance on failed banks and insurance companies shorting the stocks of these same companies to protect themselves from the potential bankruptcy of these banks.

Pessimism
There is now a general defeatist attitude amongst those who have held the entire way down. The pundits on CNBC continue to call “Bottom” everyday, but now the hosts laugh at the absurdity of their proclamations.

The market will not bottom because somebody wants it to. It will not bottom on one day. Bottoming will be a process of many months and a lot of fear. Markets NEVER bottom during good news.