More Pain Ahead

by Olivier on April 23, 2009

Iwill just go ahead and write down random thoughts about the market and what I noticed today. There is lots of predicting going on out there. Rising wedge broke to the downside. Market is going to tank. Wait. I changed my mind. Maybe not. You get the point.

My experience tells me the market’s purpose is to inflict pain on those who are not willing to adapt to changing situations. There is no way I am going to predict where this market is going to go. All I can say is: In my scans I see tons of stocks breaking out to the upside on huge volume. And it is not restricted to junk stocks. All kind of stocks are going up. One stock that went up today which is definitely not a junk stock was EBAY.

A few random observations:

  • ASIA – AsiaInfo Holdings: Held up well considering the initial sell-off. This is a hint this market is still very strong.
  • QEC.TO – Questerre Energy: UNG – United States Natural Gas ETF was down again. Energy and natural gas related stocks are not following to the downside
  • FIG – Fortress Investment Group: Select financial stocks still can go up and kill those who are short.
  • OPXT – OPNext: Hightech stock that is about to launch. Momentum traders will be over this one very soon. Volume is telling the story. UXG – Us Gold trades at the same price. It will be very interesting to see which one is going to perform better in the near term.

I wouldn’t be surprised to see the market inflicting more pain on those predicting the end of this rally. Buy the best stocks in each sector. You want volume to confirm the moves and the pattern. It is much easier to exit these kind of stocks when your analysis is wrong.

Remember: Volume precedes price!

Have a great evening!

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