Well, we got our 70%er on Friday...

Actually, we did even better than that.

SSTR - Silverstar Holdings Ltd. shot up almost 105% on Friday on the biggest trading volume in the company's history. We discovered the stock as an RSVP back on 8/29/07 with its initial Earthquake blast of 42.5%.

Otherwise, the market was pretty quiet Friday, with most of the big money managers already having taken positions in some of the latest "trophy stocks" such as the China plays, Ag Chemicals, Solars, etc. - so the end-of-quarter "window dressing" has been done.

For my Baffle / RSVP / ARM Play Members, I'm about to name a stock below that I think has been shamelessly oversold, and may be about to blast back into leadership. It has miles to go on the upside if that's the case. And it's a rare Baffle Play to boot!

OK, I'm getting really, really spoiled with these kinds of gains every day in the stock market...

We have this running joke in one of the stock chat rooms I visit each day.

Sometimes during the day, someone will ask: "Well, what's our 40%er today?" Basically what that means is what stock (that we find in the chat room - usually earlier in the day) will go up at least 40% today. Actually, it's not really a joke, since we quite often achieve that result at least once a day.

But with the incredible market environment we're in right now, our chatter has been different lately. In fact, just today it went something like this...

"You know, I'm getting really, really spoiled on these huge gains each day. I think we need to change our 40%er search to a 70%er search to make it more challenging."

"Yeah - 40% is so passe."

"OK then - check out KONG."

KONG ended the day up over 71%, and it's still trucking after hours.

This market is so much fun. As are the two stock chat rooms I'm in every day. We do have a great time, and make lots of money at the same time.

For my Baffle / RSVP / ARM Play Members, I'm about to name a stock below that I think will be one of the next huge movers in the China area. It popped almost 10% today off one of my favorite candlestick bottoming patterns.

Who else wants to make 339% in less than a month?

This market continues to offer plenty of excitement.

CNIC (formerly MAMA) exploded 101.13% today on good news. INTN galloped almost 54%. And China-based stocks continued to explode, including CBAK - up 46.23%, JADE - up 36.93%, KUN - up 25%, FSIN - up 20.18%, YTEC - up 17.06%, and NWD - up 16.67%. But I want to make special mention of JRJC - up yet another 14.94%.

JRJC is my current favorite stock in the "Defying Gravity" category. It was a $10 stock on September 1, but is now trading at $33.93, with seemingly no end in sight. It does have fantastic fundamentals, but a rocketship has to come back to earth sooner or later. When it does, however, I imagine thousands of investors and traders will be climbing aboard! Definitely one to keep an eye on.

For my Baffle / RSVP / ARM Play Members, I'm about to name a stock that was up 75% at one point today, but came back down to earth. I don't think it's done.

It's starting to feel like the late 1990's again...

It's starting to feel like the late 1990's again, when the U.S. stock market went ballistic - only this time it's not the Internet stocks that are exploding...

In this "sweet spot in time" that we're seeing in the stock market right now, it's like we can do no wrong. Ordinarily, I force myself to become more cautious in that scenario, because in the past it usually has meant we are on the verge of a pullback.

But I really believe that "this time it's different."

Don't get me wrong, I firmly believe in having a set of rules that you live and breathe by in trading the market, but every once in awhile you get into certain "zones" where you can throw a little caution to the wind, and loosen some of your hard and fast rules. And I think we are in one of those zones right now.

What do I mean by that? Well, for one thing, "obvious" candlestick topping signals like gap up Dojis, Shooting Stars, etc. are not working in this market. Look at ASTI and YGE today and JRJC just about any time in the past few days for good examples.

In a roaring bull market - especially in the hottest sectors - I think most astute traders will see these signals as excellent buy points rather than profit-taking situations. Why sell? The stock will just reverse and go back up tomorrow.

So what are the hottest sectors right now? Think just about any stock with "China" or "Oriental" in its name. Also "Solar." And try combining "China" and "Solar"! Boy howdy!

In fact, China-based stocks are going ballistic in this market. It totally reminds me of the late 1990's in the U.S stock market. Look at the China-based airline stocks like CEA - blasting from $45 to $147 in 14 days, or ZNH, rocketing from $40 to $100 in 24 days.

Irrational exuberance? Maybe - but why not play the game as long as it lasts? Remember, tons of millionaires were made in the late 1990's by astute investors and traders "simply paying attention."

It seems the market needs to consolidate recent gains...

With the initial huge blast last week on the surprise interest rate cuts from the Fed, the market charts spiked up with unusually large candles. I think we'll now see some back and forth action while the market digests these nice gains.

Both the DJIA and the Nasdaq are well-extended beyond their respective 10-day and 50-day EMA's. I think the best case scenario will be some sideways action to let the moving averages catch up with the price action. I don't really see a big chance for a huge pullback so soon after the historic rate cuts. Stochastics indicate overbought conditions, however.

This is one of those rare "sweet spots in time" for the stock market - don't let it pass you by...

Every once in awhile, everything "just works" in the stock market.

Base breakouts continue. Stocks making new highs simply make more new highs day after day. Bottom Springers spring, and continue going up. Candlestick continuation patterns emerge, and the stocks do indeed continue exploding to the upside. And skyrocketing stocks continue to skyrocket, even though your logical mind shouts out "they can't go up any more"!

I call these periods of time - where just about any trading idea works in the stock market - "sweet spots in time." I guess the term came to me back in my tennis-playing days. Back then, my best days occurred when I slammed the ball time after time from the "sweet spot" of my racket - hardly feeling the ball exploding off the strings and knowing immediately by the loud "thwock!" sound that I was about to hit a winning shot.

So when these "sweet spots in time" occur in the stock market, you need to be ready to take full advantage of them. For that's the time to BUTT! (Back Up The Truck) and buy those stocks going up in value day after day. That's the time you may want to go on margin. You can easily make up for months of mediocre or underperformance in just a few weeks, if not days!

And we are there, right now, in this stock market.

In fact, we just witnessed one of the best weeks for the market this year. The Fed's interest rate cuts were just what the doctor ordered to wake up the bull again. The Nasdaq roared ahead 2.7%. The S&P 500 and the DJIA romped 2.8%, and the NYSE composite skyrocketed 3.2%.

This train is leaving the station once again. Don't miss out on what could be an "instant repeat" of the U.S. market results from 1995-2000. Only this time, it won't be the Internet Bubble stocks. This time, I think we need to head east to find the huge gainers. (Hint: China).

But don't ignore good ole' U S of A stocks too! Like SIRT - a small company that may have just discovered the cure for old age.

The market took a well-deserved breather today...

After the torrid pace the past couple of days, the market took a break today with a well-deserved rest. The DJIA was down almost 49 points and the Nasdaq a tad over 12.

I gotta tell ya, China stocks are starting to remind me of the "good ole days" of the late 1990's and the Internet bubble boom. Just when I think some of these stocks are done, they simply blast up another 28% or so. It's fun while it lasts! But the downside could be hurtful to one's portfolio. Just don't chase these rocketships, and don't stay too long at the party if you own some of these behemoths.

The euphoria continues...

The market giddiness kicked off by yesterday's surprisingly large interest rate cuts from the Fed extended over into today's trading action. The DJIA was up another 76 points and the Nasdaq almost 15.

I'm already seeing a little "too much euphoria" in certain stocks, especially in the area of China-based companies such as BIDU, CEA, ZNH, etc. While I absolutely adore these stocks longer term, they may be going into climax runs now. Also, lots of other stock charts are showing Shooting Stars after a strong uptrend - another warning sign of at least a short-term top.

Having said all that, a rip-roaring bull market will ignore all the "rules", and may just continuously force some of these high-flyers even higher. Just be very alert and aware of the risks of chasing these extended stocks.

And there are a plethora of stock charts showing stocks just breaking out and not overly extended. I just posted some beauties in the Trade Your Way To Wealth Mastermind Chat Room.

YOWSA! Thank you, Uncle Ben...

The market got even more than it bargained for today as Uncle Ben Bernanke slashed both the Fed funds rate and the discount rate 50 basis points!

That action set the market on fire, and caused the biggest one-day gains in five years! The DJIA rocketed 336 points, and the Nasdaq did even better percentage-wise with its 70 point increase.

I firmly believe that Bernanke will be looking back on this historic day sometime in the future as he writes his own memoirs (as Alan Greenspan is doing now).

But for now, let's enjoy this bull market continuation!

The moment of truth has arrived...

The market sold off a little today on low volume, basically marking time until the Fed meets tomorrow and announces its current policy regarding interest rates.

As I've said before, I believe that a quarter percentage point cut is already factored in the market. I think a half percentage point would be a welcome surprise, but I'm not holding my breath on that one. I get the feeling the Fed wants to err on the conservative side, with the option of a between-meeting additional cut at its disposal.

Will the market sell off as soon as the interest rate cut is announced? That's a distinct possibility, since markets often anticipate Fed actions and move in the opposite direction than most investors and traders expect after the actual announcement. Also important will be the Fed's wording and tone during the announcement, that the market will then try to interpret. It's all part of this wonderful game that is called the stock market.

Anyway, it should be a very interesting day tomorrow. Be alert.

All eyes, ears, and buying (or selling) trigger fingers are on the Fed this week...

OK, this is it. A small piece of history could be made this coming week.

 

The Fed meets on Tuesday to discuss current policy, and with more and more data indicating the U.S. economy could be headed into a recession, the Fed is widely expected to cut the Fed funds rate by at least a quarter of a percentage point.

I firmly believe that the rate cut expectation is already factored into the stock market, and that's why stocks had a bias to the upside this week. What I don't know is how the market will react immediately after the rate cut announcement.

With the cut already factored into the market, we could actually see a market swoon for a day or two - a kind of a "buy on the rumor, sell on the news" event. If that scenario unfolds, I think bargain-hunters will soon swoop in, and the bull market will continue.

September and October are not known as good months for the market. But did we bottom out a little early this time - in August? Personally, I believe we did. That mid-August mini-meltdown and strong bounceback looks like major bottoming action to me.

Of course, the market does not care one iota what you or I "think" it's going to do. It's going to do what it's going to do, and ours is not to reason why, but to just let it tell us what to do.

As far as a small piece of history being made, this will be the first interest rate cut after many months of increasing rates, followed by several more months of holding rates steady. The last time this occured in a big way was back in 1995, and we all know what the market did for the next five years after that!

Like I said yesterday, the Cobra indicates pent-up strength...

The odds were very high today of a strong market continuation.

In my previous post, I described the Cobra setup - what it means, and what it looks like on a chart. It works both for individual stocks and for charts of market indexes. I stated that both the charts of the DJIA and the Nasdaq showed Cobras, which meant that the probabilities were high of strong continuations to the upside in both markets.

With the DJIA up over 133 points and the Nasdaq up almost 9, I think you can now see firsthand how the Cobra works in the real world.

The markets are still looking pretty good here, and should have at least another few days of upside before taking a breather, They are "getting warmed up" for the Fed's announcement next Tuesday of a cut in the Federal funds rate.

The only unknown at this point is if the cut will be a quarter or a half percentage point. It might be better psychologically if the cut is only a quarter of a percentage point, indicating the Fed is realizing the need for interest rate cuts, but not panicking. Of course, no interest rate cut at all would be very hard on the market, but I think the odds of that are slim to none.

It was the Day of the Cobra for the market index charts...

Today looked like a simple resting day for the markets.

Both the charts of the DJIA and the Nasdaq show Cobras. A Cobra setup occurs on a day after a big move, and therefore a big candle is present in the chart. The Cobra is formed when the price action is fairly tight during the day, forming a tiny Doji on the chart up in the top part of the previous day's big candle. It is a bullish setup, and indicates latent strength in the position, or in this case - the market itself. (Thanks to Paul Lemal over at www.BottomSpringers.com for identifying and naming the Cobra setup).

And speaking of bottom springers, there were quite a few of those types of setups today in the market. These setups are very similar to Baffles and RSVPs. Again, feel free to visit my pal Paul's site above for more information on these interesting - and usually quite profitable - trade setups.

The market is back to its bullish ways, and here's how you could have made over 52% today...

The bulls were back in the stock market today, big time.

With the DJIA up 180 points and the Nasdaq up 38, it's almost hard to find a stock chart I DON'T like today! The index charts are showing nice Morning Stars, a strong indication of a market bottom here. Also, lots of stocks have gotten down into oversold territory based on their stochastics.

You know, the best way to play Baffles and RSVPs is as they are setting up. The problem with trying to name the best setup for the next day in an after-hours email is that the stock may gap up on the open the next day, taking away some of the gain you could have pocketed by already being in the stock as it set up the previous day.

Case in point - a small biotech stock, symbol XTLB. I saw it setting up nicely yesterday, and actually bought the stock in a trading account. It closed at $1.74. But it gapped up on the open this morning at $1.93, and went wild from there. It hit an intraday high of $2.75, over a 52% gain for the day. It came off that high, but still ended the day up over 40%.

I've considered changing the Baffle / RSVP / ARM Play service to a chat room only format so we get the absolute highest return from these types of setups. Please let me know how you feel about that, or if you have any other suggestions.

How You Could Have Made Almost 600% - A "6-Bagger" - Since August 15, 2007...

We're going to play a stock tomorrow that's already up almost 600% since August 15 - in other words, less than a month. It was up 33.49% today alone. My Trade Your Way To Wealth Baffle / RSVP / ARM Play Members will be able to see the stock I'm talking about below.

It's a small oil company based in China that blasted up from a Baffle (Breakout From A Flatline) setup on August 15 and basically has not looked back since then. True Baffles are hard to find - they are rare as hen's teeth - but when you find one, this is what can happen.

And, truth be told, how many 6-baggers in less than a month do you need per year?

Also, most "normal" people might say "Hey - wait a minute! The darn stock's already made a monster move just in a few weeks! It's done, let's find another one." Well, that might be true, but the chart pattern of this stock is similar to some other small oil companies I've seen that went on to make 14,000% gains before they came back down to earth. This one may be just getting started. So I think I'll take my chances.

Besides, this tiny company just struck oil in northern China.

We live in interesting times.

How To Make 32% In 40 Minutes On One Trade And 180% On Another Day Trade In An Absolutely Horrible Market...

Most investors and traders "not in the know" think you have to have a roaring bull market to make lots of money on trading the long side of the market.

It just ain't so.

Now, a robust bull market will obviously help - your odds of success are without a doubt a lot better - but there are always isolated cases of huge short-term gain opportunities each and every day in the market. You just have to know how to sniff 'em out.

Take today for instance. An absolutely dismal day in the market. At least it seemed so, with the Dow down 250 points and the Nasdaq down the same percentage at almost 49 points.

However, using my system for sniffing out the big winners, along with a little help from my Mastermind Group of both professional and amateur (but trained by me) traders, we hit the ball out of the park today on two trades.

The first trade involved a small Chinese technology company that announced it was about to enter the "red-hot" Solar Energy sector. I'm not going to name the company here, but Members of my $1,000 a month premium service will be able to see the company below, since we are going to play it again.

Anyway, the company gapped up on the open to the tune of 29%, and it was only more upside from there. The euphoria lasted a little over an hour, and the stock started heading south. I did notice the stock was up around 61% in the first forty minutes of trading, however. So you could realistically have made close to 32% in those forty minutes.

But that trade turned out to be chump change compared to another one that came out of nowhere, and in the least likely of sectors - Homebuilding.

I saw this trade setting up a little before 10:30 am Houston time, and I pointed it out in our chat room. Then I read the news release that came out on the company, and I knew this one was going to be big.

Fascinated, I reported on the progress of the stock's move in the chat room (again, I'm hiding the name of the stock to respect my paying Members - I'm sure we'll be playing it again).

**** up 27.45%.

**** had good news - watch it fly!

**** up 42%.

45%.

150%.

The stock was up an incredible 200% and more intraday, and ended the day up just less than that. A 180% day trade if you timed it right.

Bull market? Bull market? We don't need no stinkin' bull market!

We live in interesting times.

After a shaky start, the market decided that today's economic data was good news...

The market bounced around on the open and shortly thereafter today as it digested economic data hitting the newswires.

According to MarketWatch:

"U.S. stocks rose Thursday, boosted by mostly positive economic data and better-than-expected August sales at U.S. retail chains including Dow component Wal-Mart stores."

That news was tempered by another piece of data that came from an MBA (Mortgage Bankers Association) survey, which stated the number of mortgage loans entering the foreclosure process in the second quarter set another record. Digging deeper, however, I discovered something a little remarkable.

Driving the numbers were the states of California, Florida, Nevada and Arizona. According to Doug Duncan, MBA's chief economist and senior vice president of research and business development: "Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide DROP (emphasis mine) in the rate of foreclosure filings."

We live in interesting times.

And, by the way, the stock I mentioned in yesterday's post is CRDC - Cardica, Inc. It was up another 40.15% today on gargantuan volume. We may retire on this one.

The market pullback today gives us a buying opportunity...

Well, the bears were back in charge today after a mere one-day market pop on Tuesday. Some pretty dismal news did hit the market today - I must admit.

According to MarketWatch:

"U.S. stocks closed lower Wednesday after an index of existing home sales fell to September 2001 levels and a gauge of employment prompted downward revisions two days before the government's payrolls report for August."

Not only that, but the Fed's Beige Book report today indicated that, in it's inimitable opinion, the recent market turmoil related to the subprime real estate fiasco will be contained just to the real estate area, and will not affect the rest of the economy.

The market did not take too kindly to this bout of news today.

Nonetheless, I remain bullish. I think that most stocks were unusually extended here short-term, and needed any excuse whatsoever to pull back. Most stocks simply pulled back to their 10-day EMAs today, which in the grand scheme of things represents just a normal - and necessary - pullback. And a buying opportunity in my humble opinion.

So I'm getting ready to buy some of my favorite stocks on my list again. But this also includes my RSVP Play today, which gave us a nice 80% day trade at one point in time today. It has pulled back, giving us a scbo (second chance buying opportunity).

This tiny company announced a new product today which may make open-heart surgery a thing of the past. See any potential there?

Hope you had a great, restful Labor Day weekend! Now it's time to get back to work...

As I expected, the big-time traders arrived back from The Hamptons today in a buying mood. And buy they did. The Dow was up a solid 91.12 points, or 0.68%. But the Tech-laden Nasdaq did almost twice as well percentage-wise, with a striking 33.88 point gain, or 1.3%. So the Big Boys were evidently after smaller game for the most part.

Right now, I'm the most bullish I've been in quite a while. I'm seeing scores of great charts - nicely-formed bases with the price action either breaking out today or very close to a breakout. The BottomSpringer plays are working quite well - including the Baffles, RSVPs and ARMs. But the High Breaker plays are working as well. We could be in the "Perfect Storm" for inordinate stock market profits - right now - in this market.

In fact, I need to toot my own horn a bit here.

Let's look at a few of the most recent trade recos I called in the premium B/R/A service, and how they are doing so far:

SGN - bought last Friday on the open at $1.10, closing today at $1.35, for a gain of 23% in two days.

JRCC - bought on 8/29/07 on the open at $4.53, closing today at $5.73, for a gain of 25% in four days.

NFLD - bought on 8/24/07 on the open at $1.55, closing today at $2.65, for a gain of 71%, with 59.64% of that gain taking place today!

The current market environment is indeed the best I've seen in many months for these types of explosive gains to occur. And with the Fed now expected to start the interest rate cut cycle once again, I think this market is going to explode to the upside. I think all the recent turmoil will soon be a distant memory, and just another problem that somehow we muddled our way through, just like we always have in the past.

After all the recent activity, the market needed to take a little breather...

The market took a well-deserved rest today.

After all the recent violent activity, it needed it. The good news is that it did not give back many of the grand gains from yesterday. Both the Dow and the Nas held their respective 10-day EMAs (Exponential Moving Averages), and the Nas spent a little time above its 50ema today.

Tech stocks have been strong lately, and the Nas is well-represented there. Even ole INTC, NOVL and JAVA (the new symbol for Sun Microsystems) looked like a young bucks today. So the Nas may take over the leadership here.

Some end-of-month window dressing is taking place now, with some of the best names in the market being marked back up and placed in various portfolios. It will be an interesting day tomorrow since it represents not only the last trading day of the month, but also a Friday before a holiday. It will also be interesting to see how the market reacts when the big Wall Street traders get back to their trading desks next Tuesday.

Well, if you don't like the market, just wait a day...

Yesterday I could not find a single chart that I liked. Except maybe for the ProShares UltraShort ETFs. Today, I'm hard-pressed to find a chart I DON'T like!

 

So - I've said it before and I'll say it again - what a difference a day makes!

The volatility in the market is astounding, no doubt about it. I can't remember when - if ever - the Dow was down 280 points one day, only to recover 247 of those points the very next day. And I think 100 of those points came within a half hour after the open.

Well, as the the old saying goes - we "live in interesting times." And that's kinda what makes this game so much fun.

I'm a "kid in a candy store" today, so choosing the best charts was a challenge. But this one looks like a doozy...