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Dollar gets cover treatment

The magazine with no bylines and anonymous editors feels the dollar panic is unwarranted.
So far, this remains only a fear. Although the dollar has been falling at quite a lick—down 6% against a trade-weighted basket of currencies since August—it has seen no chaotic slump, but a slide interspersed, as this week, with brief rallies. Americans' expectations of future inflation have not yet risen much. Yields on government bonds have fallen: clearly, investors do not yet expect higher premiums for safe American assets. Whether disaster strikes depends on what exactly is driving the dollar down and on how policymakers react.
IBD follow through days
Now once a market goes in to correction mode as signaled by number of distribution days , then the next logical step is to see when to get back in to market. For that it uses again a proxy of large speculators buying to confirm possible start of a new rally. How does it do it, by looking at rally attempts. So in a downtrend it looks for a positive day. Once there is a positive day, it looks for second positive day on high volume. The second day should come in between 4 th and 7 th day of the rally attempt otherwise the rally attempt is considered a failure and you start all over again. It has tested the system on last several years of market data and it calls a turn in 80% of the time correctly.
The more important question which is not really been asked is should you follow it and do you have a better system. The IBD system has a context which is most important to understand and that in IBD model of CANSLIM, it buys stocks with primarily two main characteristics 1) those with earnings momentum and 2) price momentum. One of the primary characteristics of such stocks is that they outperform during market rallies and significantly under perform during corrections. So they will double quickly but give up 50% or more of their price gains when the market turns. While high growth is sexy there is a corresponding high risk associated with it. So by staying in cash during the correction phase , you significantly narrow the risk. If you are not trading those kind of stocks, it does not matter and you should not follow it.
A must read book
Your Next Great Stock: How to Screen the Market for Tomorrow's Top Performers (
by Jack Hough (Author)
Beg, borrow, or steal this book. I have been reading it since last night and almost through with it. If you want to make money just read this book. Once you read it you might find lot of similarities to many of the ideas behind methods discussed here.This is the most practical book I have read this year so far on investing.
The author details ways to screen for stock likely to move using various researched anomalies. All the screens can be done using Moneycentral. I will have more detailed review later once I finish the last few pages.
If you are considering a Chirstmas gift to a investor or trader, this book will make a nice gift.
Later:Save your money do not buy
Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital Made a Fortune Investing in the Stock Market
This is the most disappointing book on investing I have read this year. It is just one big rant against Wall Street and Buy and Hold investing with no meat. Pages after pages Revshark goes on and on ranting against the big Wall Street conspiracy against small investor without providing any clear insight on trading or investing. It is a terrible book . Save your money. This Shark cannot write a useful book.
I will have more detailed review later.
Cautiously optimist
Yesterday does not count as follow through day on IBD system, only a follow through day of 1.7% after 4 to 7 days after a rally attempt is valid breakout. The IBD Big Picture is also skeptical of this rally attempt. Unlike that last time it was screaming, buy, buy, buy during correction. The Big Picture read of the market is one of the best read I have seen on the street. It is seldom wrong in its overall readings.
From IBD Big Picture
Wednesday's price gain was one of the biggest of the year for the Nasdaq, an encouraging sign. But one big day doesn't mean much in the grander scheme. The Nasdaq's nine biggest up days of all time all occurred during the bear market of 2000 to 2003.
More recently, the Nasdaq's biggest up day of this year came on Nov. 13 — right before the market started a new leg down.
For now, consider Wednesday to be Day 2 of a rally attempt by the major indexes. We'll need to see more signs of strength among both the broad indexes and leading stocks before the market can take on a more bullish hue.
What it means in my scheme of things is light commitments and very low 5 to 10% profit targets on all methods.
75 Resilient Stocks
ABAX,Abaxis Inc (Google Yahoo Earnings Chart)
AG,Agco Corp (Google Yahoo Earnings Chart)
ALNY,Alnylam Pharmaceuticals (Google Yahoo Earnings Chart)
ANV,Allied Nevada Gold Corp (Google Yahoo Earnings Chart)
ANW,Aegean Marine Petroleum Network Inc (Google Yahoo Earnings Chart)
APPY,AspenBio Pharma Inc (Google Yahoo Earnings Chart)
ASUR,Forgent Networks (Google Yahoo Earnings Chart)
ATRO,Astronics Corp (Google Yahoo Earnings Chart)
AUXL,Auxilium Pharmaceuticals Inc (Google Yahoo Earnings Chart)
AXYS,Axsys Technologies (Google Yahoo Earnings Chart)
BIDU,Baidu.com Inc (Google Yahoo Earnings Chart)
BIOS,BioScrip Inc (Google Yahoo Earnings Chart)
BITI,Bio-imaging Technologies (Google Yahoo Earnings Chart)
BOOM,Dynamic Materials Corp (Google Yahoo Earnings Chart)
BYI,Bally Technologies Inc (Google Yahoo Earnings Chart)
BZP,Bpz Resources Inc (Google Yahoo Earnings Chart)
CEO,CNOOC Ltd Adr (Google Yahoo Earnings Chart)
CLDA,Clinical Data Inc (Google Yahoo Earnings Chart)
CPLA,Capella Education Company (Google Yahoo Earnings Chart)
CSIQ,Canadian Solar Inc (Google Yahoo Earnings Chart)
DECK,Deckers Outdoor Corp (Google Yahoo Earnings Chart)
DLB,Dolby Laboratories Inc (Google Yahoo Earnings Chart)
DV,Devry Inc (Google Yahoo Earnings Chart)
EHTH,Ehealth Inc (Google Yahoo Earnings Chart)
FFH,Fairfax Financial Holdings (Google Yahoo Earnings Chart)
FLIR,Flir Systems Inc (Google Yahoo Earnings Chart)
FSLR,First Solar Inc (Google Yahoo Earnings Chart)
GHM,Graham Corp (Google Yahoo Earnings Chart)
GLDN,Golden Telecom Inc (Google Yahoo Earnings Chart)
GMO,Idaho General Mines Inc (Google Yahoo Earnings Chart)
GOLD,Randgold Resources Ltd Ads 1:2 (Google Yahoo Earnings Chart)
GVP,Gse Systems Inc (Google Yahoo Earnings Chart)
HDB,HDFC Bank Limited (Google Yahoo Earnings Chart)
HL,Hecla Mining Co (Google Yahoo Earnings Chart)
IDP,Idera Pharmaceuticals Inc (Google Yahoo Earnings Chart)
INP,iPath MSCI India Index ETN (Google Yahoo Earnings Chart)
ISIS,Isis Pharmaceuticals Inc (Google Yahoo Earnings Chart)
ISRG,Intuitive Surgical Inc (Google Yahoo Earnings Chart)
LTRE,Learning Tree Internat (Google Yahoo Earnings Chart)
LUNA,Luna Innovations Inc (Google Yahoo Earnings Chart)
MBT,Mobile Telesys Ojsc Ads (Google Yahoo Earnings Chart)
MLNM,Millennium Pharmaceuticl (Google Yahoo Earnings Chart)
MOS,Mosaic Company (Google Yahoo Earnings Chart)
MTL,Mechel Steel Group OAO ADS (Google Yahoo Earnings Chart)
ONXX,Onyx Pharmaceuticals Inc (Google Yahoo Earnings Chart)
PBR,Petroleo Brasileiro S.A. Petrobras ADS (Google Yahoo Earnings Chart)
PBR.A,Petroleo Brasileiro S.A. Petrobras ADS Class A (Google Yahoo Earnings Chart)
PCLN,Priceline.com Inc (Google Yahoo Earnings Chart)
PODD,Insulet Corporation (Google Yahoo Earnings Chart)
PRGO,Perrigo Co (Google Yahoo Earnings Chart)
PRVT,Private Media Group Inc (Google Yahoo Earnings Chart)
PSEM,Pericom Semiconductor Cp (Google Yahoo Earnings Chart)
PTEC,Phoenix Technologies Ltd (Google Yahoo Earnings Chart)
QSC,Questcor Pharmaceuticals (Google Yahoo Earnings Chart)
RICK,Rick's Caberet Intl (Google Yahoo Earnings Chart)
RIMM,Research In Motion Ltd (Google Yahoo Earnings Chart)
RSTO,Restoration Hardware Inc (Google Yahoo Earnings Chart)
RTP,Rio Tinto Plc Adr (Google Yahoo Earnings Chart)
SCON,Superconductor Tech (Google Yahoo Earnings Chart)
SIGM,Sigma Designs Inc (Google Yahoo Earnings Chart)
SOHU,Sohu.Com Inc (Google Yahoo Earnings Chart)
SPIR,Spire Corp (Google Yahoo Earnings Chart)
SPWR,SunPower Corp (Google Yahoo Earnings Chart)
SQNM,Sequenom Inc (Google Yahoo Earnings Chart)
STP,Suntech Power Holdings Co Ltd (Google Yahoo Earnings Chart)
SXE,Stanley Inc (Google Yahoo Earnings Chart)
SYNA,Synaptics Inc (Google Yahoo Earnings Chart)
TELOZ,Tel Offshore Trust (Google Yahoo Earnings Chart)
TKC,Turkcell Iletisim Hizmetleri ADS (Google Yahoo Earnings Chart)
TRA,Terra Industries Inc (Google Yahoo Earnings Chart)
UTHR,United Therapeutics Corp (Google Yahoo Earnings Chart)
VIP,Vimpel Communication Ads (Google Yahoo Earnings Chart)
VLNC,Valence Technology Inc (Google Yahoo Earnings Chart)
XRA,Exeter Resource Corporation (Google Yahoo Earnings Chart)
ZIXI,Zix Corporation (Google Yahoo Earnings Chart)
Individual investors have advantage
The systems like Double Trouble, IBD 200, Episodic Pivots, Virgins are built to take advantage of the momentum phase in market. The Market Monitor is an overall filter on top of these methods. When the Market Monitor is in correction phase, one needs to adjust the trading time frame and risk to suit the new reality.
In my style, I like putting all probabilities behind my trades. When you are in confirmed uptrend the individual market behaves differently. History repeats itself and if you look at historical precedents you will find when leading stocks, after a climax run reverse, it usually is a loud warning sign. When risk is very high, in my book it is prudent to wait out such periods. Individual investors have advantage of flexibility, where you can deploy your cash quickly and get fully invested. Mutual funds and other big investor have to be fully invested or have to move large size and cannot be so flexible. If the market turns in next week, it is not very difficult to get fully invested.
One of the problems with long running bull markets is it conditions people to trade in certain way. When the underlying dynamics change, people are slow to react and continue to trade same way. By the time they realize what is happening, in many cases the account suffers. Flexibility and adaptability is key when market character changes. Methods should adapt to market quickly.
Pre mature bulls get whacked
When the market is about to turn, the Market Monitor readings will indicate that. At current levels, we are at best likely to have reflex bounces. Many market participants have been spoiled by the last 4-5 years action where such corrections quickly reversed and lead to rallies. Till now this correction is different, it is coming after a blowout phase , where many sectors and stocks had a climax run and then the market reversed.
If you recall when the readings on stocks up 50% plus in month were at extreme levels, not seen in years in October (Oct 5 to Oct 11 on Market Monitor), that was the climax phase. During that phase if you look at my posts, they said such high readings are not sustainable and lead to corrections. That is what happened. The extreme momentum phase resulted in correction. However quickly the correction transformed in to distribution phase.
Unlike normal correction, it had different feel from word go as stocks which had climax run started dropping fast and along with them other stocks started reversing. Breakouts were not having follow through. Remember my posts prior to Cancun trip where I was very uncomfortable with the action and reduced my market exposure to bare minimum. Since then I have been mainly in cash in all my accounts, that include my long term accounts and mutual funds accounts and only taking sporadic short term tactical trades.
When the Market Monitor indicates turn, there will be lot of opportunities to make money. Till then cash is king.
S&P Lagging stocks
ABK,Ambac Financial Group (Google Yahoo Earnings Chart)
BC,Brunswick Corp (Google Yahoo Earnings Chart)
BIG,Big Lots Inc (Google Yahoo Earnings Chart)
BSC,Bear Stearns Companies (Google Yahoo Earnings Chart)
C,Citigroup (Google Yahoo Earnings Chart)
CBG,Cb Richard Ellis Svcs (Google Yahoo Earnings Chart)
CC,Circuit Cty Strs Inc (Google Yahoo Earnings Chart)
CFC,Countrywide Financial (Google Yahoo Earnings Chart)
CIT,Cit Group Cl A (Google Yahoo Earnings Chart)
COF,Capital One Financial Cp (Google Yahoo Earnings Chart)
CTX,Centex Corp (Google Yahoo Earnings Chart)
DDS,Dillard's Inc (Google Yahoo Earnings Chart)
DHI,D.R. Horton Inc (Google Yahoo Earnings Chart)
ETFC,E Trade Financial Corp (Google Yahoo Earnings Chart)
FHN,First Horizon Natl (Google Yahoo Earnings Chart)
FNM,Fannie Mae (Google Yahoo Earnings Chart)
FRE,Freddie Mac (Google Yahoo Earnings Chart)
HAR,Harman Internat Ind Inc (Google Yahoo Earnings Chart)
HBAN,Huntington Bancshares (Google Yahoo Earnings Chart)
JCP,J.C. Penney Company Inc (Google Yahoo Earnings Chart)
KBH,Kb Home (Google Yahoo Earnings Chart)
KEY,Keycorp (Google Yahoo Earnings Chart)
KG,King Pharmaceuticals Inc (Google Yahoo Earnings Chart)
LEN,Lennar Corp Cl A (Google Yahoo Earnings Chart)
LIZ,Liz Claiborne Inc (Google Yahoo Earnings Chart)
LOW,Lowe's Companies Inc (Google Yahoo Earnings Chart)
MBI,Mbia Inc (Google Yahoo Earnings Chart)
MCO,Moody's Corporation (Google Yahoo Earnings Chart)
MER,Merrill Lynch & Co (Google Yahoo Earnings Chart)
MS,Morgan Stanley (Google Yahoo Earnings Chart)
MTG,Mgic Investments Corp (Google Yahoo Earnings Chart)
MU,Micron Technology Inc (Google Yahoo Earnings Chart)
NCC,National City Corp (Google Yahoo Earnings Chart)
ODP,Office Depot Inc (Google Yahoo Earnings Chart)
OMX,Officemax Inc (Google Yahoo Earnings Chart)
PHM,Pulte Homes Inc (Google Yahoo Earnings Chart)
Q,Qwest Cmmnctns Intl Inc (Google Yahoo Earnings Chart)
RSH,Radioshack Corp (Google Yahoo Earnings Chart)
SHLD,Sears Holding Corp (Google Yahoo Earnings Chart)
SNDK,Sandisk Corp (Google Yahoo Earnings Chart)
SOV,Sovereign Bancorp Inc (Google Yahoo Earnings Chart)
TER,Teradyne Inc (Google Yahoo Earnings Chart)
TEX,Terex Corp (Google Yahoo Earnings Chart)
TIN,Temple Inland Inc (Google Yahoo Earnings Chart)
TLAB,Tellabs Inc (Google Yahoo Earnings Chart)
TSN,Tyson Foods Inc (Google Yahoo Earnings Chart)
UIS,Unisys Corp (Google Yahoo Earnings Chart)
WM,Washington Mutual Inc (Google Yahoo Earnings Chart)
XL,Xl Capital Ltd (Google Yahoo Earnings Chart)
ZION,Zions Bancorporation (Google Yahoo Earnings Chart)
S&P Leading stocks
AAPL,Apple Inc (Google Yahoo Earnings Chart)
AFL,Aflac Inc (Google Yahoo Earnings Chart)
AIZ,Assurant Inc (Google Yahoo Earnings Chart)
AOC,Aon Corp (Google Yahoo Earnings Chart)
APA,Apache Corp (Google Yahoo Earnings Chart)
APC,Anadarko Petroleum Corp (Google Yahoo Earnings Chart)
APOL,Apollo Group Inc Cl A (Google Yahoo Earnings Chart)
AVP,Avon Products Inc (Google Yahoo Earnings Chart)
AYE,Allegheny Energy Inc (Google Yahoo Earnings Chart)
BDX,Becton Dickinson & Co (Google Yahoo Earnings Chart)
BIIB,Biogen Idec Inc (Google Yahoo Earnings Chart)
BTU,Peabody Energy (Google Yahoo Earnings Chart)
CEG,Constellation Energy Grp (Google Yahoo Earnings Chart)
CHK,Chesapeake Energy Corp (Google Yahoo Earnings Chart)
CIEN,Ciena Corporation (Google Yahoo Earnings Chart)
CL,Colgate-Palmolive Co (Google Yahoo Earnings Chart)
CME,Cme Group Inc (Google Yahoo Earnings Chart)
CNX,Consol Energy Inc (Google Yahoo Earnings Chart)
COST,Costco Wholesale Corp (Google Yahoo Earnings Chart)
CVS,Cvs Caremark Corp (Google Yahoo Earnings Chart)
DE,Deere & Co (Google Yahoo Earnings Chart)
DUK,Duke Energy Corp (Google Yahoo Earnings Chart)
EMR,Emerson Electric Co (Google Yahoo Earnings Chart)
EOG,Eog Resources Inc (Google Yahoo Earnings Chart)
ESRX,Express Scripts Inc (Google Yahoo Earnings Chart)
EXC,Exelon Corporation (Google Yahoo Earnings Chart)
FLR,Fluor Corp (New) (Google Yahoo Earnings Chart)
FPL,Fpl Group Inc (Google Yahoo Earnings Chart)
GD,General Dynamics Corp (Google Yahoo Earnings Chart)
GENZ,Genzyme Corporation (Google Yahoo Earnings Chart)
GILD,Gilead Sciences Inc (Google Yahoo Earnings Chart)
GOOG,Google (Google Yahoo Earnings Chart)
GR,Goodrich Corp (Google Yahoo Earnings Chart)
HCBK,Hudson City Bancorp Inc (Google Yahoo Earnings Chart)
HES,Hess Corp (Google Yahoo Earnings Chart)
HSP,Hospira Inc (Google Yahoo Earnings Chart)
HUM,Humana Inc (Google Yahoo Earnings Chart)
ICE,Intercontinental Exchange Inc (Google Yahoo Earnings Chart)
JEC,Jacobs Engineering Group (Google Yahoo Earnings Chart)
KO,Coca-Cola Co (Google Yahoo Earnings Chart)
LLL,L-3 Communications Hldgs (Google Yahoo Earnings Chart)
LMT,Lockheed Martin Corp (Google Yahoo Earnings Chart)
MCD,Mcdonalds Corp (Google Yahoo Earnings Chart)
MCK,Mckesson Corp (Google Yahoo Earnings Chart)
MHS,Medco Health Solutions (Google Yahoo Earnings Chart)
MIL,Millipore Corp (Google Yahoo Earnings Chart)
MON,Monsanto Co (Google Yahoo Earnings Chart)
MRK,Merck & Co (Google Yahoo Earnings Chart)
MSFT,Microsoft Corp (Google Yahoo Earnings Chart)
MUR,Murphy Oil Corp (Google Yahoo Earnings Chart)
NBL,Noble Energy Inc (Google Yahoo Earnings Chart)
NEM,Newmont Mining Corp (Google Yahoo Earnings Chart)
NKE,Nike Inc Cl B (Google Yahoo Earnings Chart)
NOV,National Oilwell Varco Inc (Google Yahoo Earnings Chart)
NTRS,Northern Trust Corp (Google Yahoo Earnings Chart)
OXY,Occidental Petro Cp (Google Yahoo Earnings Chart)
PBG,Pepsi Bottling Group Inc (Google Yahoo Earnings Chart)
PEP,Pepsico Inc (Google Yahoo Earnings Chart)
PFG,Principal Financial Group (Google Yahoo Earnings Chart)
PG,Procter & Gamble Co (Google Yahoo Earnings Chart)
PH,Parker Hannifin Corp (Google Yahoo Earnings Chart)
RIG,Transocean Inc (Google Yahoo Earnings Chart)
SCHW,Charles Schwab Corp (Google Yahoo Earnings Chart)
SIAL,Sigma-Aldrich Corp (Google Yahoo Earnings Chart)
SO,Southern Company The (Google Yahoo Earnings Chart)
STT,State Street Corp (Google Yahoo Earnings Chart)
TAP,Molson Coors Brewing Co (Google Yahoo Earnings Chart)
TEK,Tektronix Inc (Google Yahoo Earnings Chart)
TROW,Price T Rowe Group Inc (Google Yahoo Earnings Chart)
TXT,Textron Inc (Google Yahoo Earnings Chart)
UNH,UnitedHealth Group Inc. (Google Yahoo Earnings Chart)
UST,Ust Inc (Google Yahoo Earnings Chart)
VAR,Varian Medical Systems Inc (Google Yahoo Earnings Chart)
VRSN,Verisign Inc (Google Yahoo Earnings Chart)
WAT,Waters Corp (Google Yahoo Earnings Chart)
WFR,Memc Electronic Material (Google Yahoo Earnings Chart)
WMB,Williams Companies Inc (Google Yahoo Earnings Chart)
YUM,Yum! Brands Inc (Google Yahoo Earnings Chart)
Lagging Sectors
MG328,Office Supplies
MG332,Trucks & Other Vehicles
MG414,Regional-Southeast Banks
MG417,Regional-Pacific Banks
MG419,Savings & Loans
MG425,Credit Services
MG434,Surety & Title Insurance
MG440,-Real Estate-
MG442,Reit-Office
MG448,Mortgage Investment
MG449,Property Management/Develop
MG631,Residential Construction
MG634,Cement
MG731,Department Stores
MG736,Home Improvement Stores
MG752,Building Materials Wholesale
MG762,Rental & Leasing Services
MG775,Trucking
MG815,Networking & Comm Dev
MG823,Technical & System Software
MG824,Security Software & Services
MG825,Information Technology Service
MG832,Semiconductor-Memory Chips
These sectors have witnessed most selling in this quarter. List is dominated by real estate, retail, transport and financial sector.
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