43 Stocks Closed at All-Time High

The All-Time High list has been growing steadily over the past week, which is technically a good sign. Any indicator needs to be looked in context. In this case, defensive, boring and low growth industries represent the majority of stocks on the list, which doesn’t bode well for the sustainability and potential of the recent rally.

Let’s take a closer look:

Agricultural Chemicals: $CF $TNH
Autoparts: $MNRO $AZO
Beverages: $HANS $KO $FIZZ $ABV
Discount Stores: $PSMT $DG $DLTR
Utilities: $PGN $ITC $UIL $WGL $NI
Personal Products: $NUS $KMB $CL $CHD
Fast food restaurants: $DPZ $ARCO $MCD
Medical Equipment: $MAKO $ELGX
Gold Miners: $RIC $RGLD

Other names on the current all-time high list: $RGR $WCN $MKTX $TUDO $MLI $AFSI $PRA $PSA $NNN $ACC $FRT $CATM $PRGO $CVV $FCFS

1/3 of All Liquid Stocks Went up 5% or More Today

They say that the most vicious one-day/week rallies happen in bear markets, when the correlation between most stocks is close to 1.00, meaning macroeconomic factors and sentiment overrule individual catalysts. Today was a typical example.

There are currently 2611 stocks priced above $5.00 and trading at least 100k shares a day.

872 of them appreciated 5% or more today.

Only 11 of them reached new 20-day high.

Only 1 – new all-time high and this is $HANS, which is probably one of the best performing stock of all-time, being up almost 17,000% for the past 10 years.

Other stocks on the all-time high list include: $FIZZ, $CF, $UN, $MCD, $RGR and $ED. It is still pretty thin.

Rallies happen when there is an immediate catalyst or when there are expectations about an approaching catalyst. Did buyers show up today because the economic picture is so bad that it assumes another edition of QE? It is not really that relevant.

The market never moves in a straight line. The technical picture is still broken. It seems that every week there is a new set bad news coming from Europe, China or Washington. The market gaps down a couple percentage points and a few days later, everything is forgotten.

Any price recovery has to begin from somewhere. Today’s market action was a good start, but the overall price and mood trend is still down, which basically means that any gains on the long side should be considered guilty until proven otherwise. Trade accordingly.

The All-Time High Room is Almost Empty

There is not much going on the new high list, which means that risk appetite is still on vacation and so should you in regards to your market exposure.

Other than the usual suspects lately: utilities: $SO, $EM, $D; gold miners: $GOLD, $NGD and fertilizers: $CF, $TNH, a new name appeared today: $ARCO or the so called Macdonald’s of South America. I am watching it closely, but in the same time I am really suspicious to any breakouts in this market environment. Only a few days ago, $CBOU and $DTLK broke to new all-time highs, only to be quickly faded. Both are down more than 10% for the week so far.

Other stocks that are holding well so far include: $RGR $HANS $MJN $MG $MCHX $MA $MITK

Staying on the sidelines is still the better alternative. I know it is hard, but discipline should always prevail conviction and biases.

10 Reasons You Will Love The StockTwits Edge

Tomorrow marks 1 year since I joined StockTwits. Many of you don’t know that last July I emailed Howard Lindzon with an idea for a book that will leverage the knowledge and the experience of some of the best traders and investors on StockTwits. He liked it and invited me to join his team. One year later, the book is already a reality. Here is what makes it special and why you would benefit tremendously from reading it:

1. Practical and straight to the point. Trading and Investing are about making money. We all love the timeless investment classics – Reminisces of a Stock Operator, How to Make Money in stocks, How I made $2M in the stock market, but most of them focus only on psychology. None of them actually talks about the real HOW and WHY in the details. The StockTwits Edge does.

2. Saves time. You don’t have to read all chapters to benefit from it. We don’t talk about one great trade/investment that will likely be never repeated. We teach how to find repeatable patterns and how to manage the position yourself.

3. There is something for everyone. There is not one right approach to the market. In The ST Edge, we offer over 40 market perspectives differing in style, time frame and asset class.

4. Unique structure. Most of the chapters follow a strict framework – background, market philosophy, detailed step-by-step presentation of the favorite setup, an example of an executed trade/investment where the featured principles are applied.

5. It is written by real traders and investors who put their own money at risk on a daily basis. You have seen most of them in action on the StockTwits stream. The book gives you the opportunity to gain deeper understanding of their thinking. You could actually follow up and communicate with them on the stream.

6. Very solid read. It is not something you can read in a day. It is not even something you can read in a week either and catch all the insights. How much you will get from this book is a function of your experience. Someone with three years of experience will see the presented concepts in totally different way than someone with just one year of experience.

7. It is focused on actionable setups. You don’t need to wonder any more what to look for. All steps for finding trading/investing ideas are explained clearly and succinctly. You will get an insight into what factors are actually important for the different market styles and why they are important.

8. It is one thing to know chart patterns. Knowing the psychology behind the patterns is a totally different level of understanding. We asked all contributors to explain the underlying psychology behind each step of their equity selection and risk management process, so the reader can gain better understanding.

9.  Each setup is described via an example, specifying when to enter, how much to risk, where to exit and why. Straight to the point.

10. Huge educational value, summarizing hundreds of years of collective experience, shared in 46 chapters and over 100 charts and tables to better visualize the presented market concepts.

Naturally I am biased as I have a chapter in the book, but the truth is that I would never endorse it if I don’t believe in it.

This book is truly unique and I believe in every word I said here. I gained tremendously from my contact with more than 50 traders and learned a lot as we worked on their chapters. Now, that hard earned knowledge is neatly packed in a state of the art hard cover book for you to consume at your convenience. For me personally, The StockTwits Edge is worth its weight in gold and then some. It is a worthwhile addition to the library of any trader, who is looking to improve his/her skills and market understanding. Let’s face it. There is always something left to learn.

Don’t take my word for granted. You can judge for yourself by reading the short excerpts from the book that we post on its dedicated website: thestocktwitsedge.com

The quality of our lives is defined by the choices we make every day. I will be honest with you. I am writing all this out of respect to all the efforts that more than 50 people gave for this project to come to fruition. Your purchase is not going to change my life in no way, but it might change yours.

Enough said.

Good trading,

Ivanhoff

Correlation 1.0 Market

Another 6.5% loss for $SPY, following 7% drop last week and 4% decline the previous week. The charts of the three biggest banks in U.S. – $BAC, $JPM, $WFC look like the Niagara Falls. The $VIX is up 150% for the past three weeks. If this is not panic selling and forced liquidation, I don’t know what it is. As a reference point, take a look at the performance of some of the worst periods for the stock market over the past 15 years.

We are overdue for a bounce technically, but it could easily get worse before it gets any better. The market needs a catalyst to rip higher. It could be news for another edition of quantitative easing. There is nothing else left actually, for both Europe and U.S.

They say that liquidity trumps fundamentals. It is true. The problem is that mood trumps liquidity and currently the mood is dark, for various reasons. During periods of forced liquidations, no price is too low, no stock is too cheap, at least from my perspective.

Value investors live for selloffs like these and if they have any capital left after trying to short the momentum rockets over the past 2 years, they must be stalking for new buys. Valuation is not a catalyst for me, so I stay on the sidelines. Most I’ve done over the past 2 weeks, has been intraday and overall I haven’t managed to appreciate my capital. Probably because I was foolish enough to go against the trend and buy as I should have been sitting on the sidelines or shorting. Sometimes is hard to follow your own advice. I rarely make money being short, so I rather not to.

What is the game plan for the rest of the week? We are still in a correlation 1.0 market, meaning that if the market continues to fall, most stocks are likely tumble and if it bounces, most will follow to the upside; therefore I will focus my attention to two trading vehicles: $SSO and $VXX. If I do anything, I would risk 1/4 of my usual position as the current volatility has elevated significantly the daily range.

The main goal during bear markets is to survive and protect capital. There will be better times to be aggressive.