Three White Soldiers everywhere! The market makes it three days in a row in a new rally...

U.S. stocks rose for a third day on Thursday, ending mildly higher after the stock market's biggest two-day jump up in five years, as mostly bearish economic news competed with thoughts of another interest-rate cut ahead.

With the market up for three straight days, a candlestick pattern known as the Three White Soldiers formation is evident in many stock charts this evening. The pattern is formed with three white candles in a row in an uptrend.

Obviously, we will get a correction sooner or later in this new rally, but I still have the feeling we are seeing the beginning of the typical year-end spurt that usually lasts until April of the following year. It just got started a little later this year.

And now for something completely different.

My typical selection for a stock that I think will rocket at least 20% in the next month is a low-priced, small cap stock. After all, it's usually easier for a $1 stock to pop to $1.20 than a $100 stock to pop to $120.

But that's not always the case.

For my Baffle / RSVP / ARM Play Members this evening, I'm going to recommend a stock that has one of the most powerful charts I've ever seen - with the exception of TASR in its heyday. This high-priced stock recently more than doubled in a matter of weeks - not from $1 to $2, but from $100 to $225! It's been basing for awhile, but it popped over 10% today to a new all-time high, and I think it's off to the races again.

Thank you, Mr. Market! What a wonderful birthday present!

Yes, today was my birthday, and what a gift the market gave me! Only the biggest point gain (at least for the DJIA) of the year! Thank you, Mr. Market!

What a monster rally! The Dow was up over 331 points today, with the Nasdaq doing even better percentage-wise with a tidy 82+ point gain. That's over 3% for the Nas! An amazing day for sure.

I can't see the market taking off like a scalded dog tomorrow, but what a nice birthday present today.

With today's incredibly strong move, I think we are (finally!) starting our usual year-end rally. We may back and fill for awhile, especially after the amazing back-to-back gains we just had, but I feel we have seen the worst this year.

Helping the market today were plummeting oil prices and the hint of an interest rate cut coming from the Fed. The usual Fed meeting next month is on December 11, and there are even rumors floating around of an interim cut between now and then.

There are literally TONS of great charts out there after today's action, so it was a monumental task to find the "best" chart to recommend to my Bafffle / RSVP / ARM Play Members. But I found one that has tremendous fundamentals, recently rocketed up over 400% in one month, has been beaten down for absolutely no reason, and popped back almost 20% to the upside today. No promises of another one-month 400% run, but you never know.

And we are back to "love" today in this "love / hate" market...

You gotta love Turnaround Tuesday.

It's interesting how often the market reverses itself from its Monday action on Tuesday (therefore the name "Turnaround Tuesday"). It did that in spades today, with the Dow Jones up 215 points and the Nasdaq up almost 40. Volume was fairly strong as well, so today qualifies as Day 1 of the new rally attempt.

Thousands of investors and traders are holding their breath as the DJIA retreats back near its lows of August. That's because the general consensus is that if the market undercuts that low, then we could possibly be well into a new bear market downtrend. But if we can rally from here, then the good ole bull is still in the building.

One very interesting thing that happened today was the same company that seemed to cause the market panic yesterday - Citigroup - due to its announcement of a possible layoff of 45,000 employees due to its financial straits, was involved in the market snapback today, with the announcement of an Abu Dhabi investment group infusing $7.5 billion into the company in return for some convertible securities yielding 11%.

Truth be told, the subprime mess is not that big a deal in the grand scheme of things - amounting to around $300 billion - a drop in the bucket considering the gigantic sums of cash floating around the world. So the market may be starting to realize that we don't have a problem that a wad of worldly cash can't solve.

Anyway, with the market acting a tad better today, I'm going to get a little more aggressive in my pick tonight for my Baffle / RSVP / ARM Play Members. And guess what? It's a rare Baffle Play!

It's my birthday tomorrow, so let's see if I can give myself a present with this stock selection...

The market partied over the Thanksgiving holidays, but today it was back to "business as usual" - i.e. - plummeting...

Once again, I had such high hopes.

The market took off like a scalded dog on the holiday-shortened trading session last Friday - with the Dow up over 180 points and the Nasdaq up over 34 points. And all seemed well on today's open, as I began to see chart after chart that looked just fantastic.

Didn't last too long.

At the end of the day, both the Dow and the Nas gave all of Friday's gains back and then some. Some great breakouts just got destroyed - especially BIDZ, at one time up over 13% for the day but cratering over 16% by the close. Ouch! Obviously, the land mines are still out there in this market, waiting to decimate the portfolios of the unwary. So be very careful.

Anyway, with the market continuing to act schizoid, I'm going to remain a bit more conservative with my recommendation to my Baffle / RSVP / ARM Play Members tonight. But the stock I'm about to name powered up to an all-time high today on huge volume!

Wow! The market is skyrocketing! No, wait. It's plummeting. No, wait...

The stock market is just so much fun these days.

It took off like a scalded dog right off the open today, on what appeared to be yet another "Turnaround Tuesday". Dozens of great charts started appearing out of nowhere.

But around 11:00 AM EST, the markets began its typical mid-day cliff-dive, with most indices in the red - until around 2:00 PM EST. The market then proceeded to rocket back to the upside, which is actually bull market action as a rule.

Is this (finally) the beginning of the Thanksgiving rally? The jury is still out on that. But any time the market can end in the green with a couple of the huge financial sector stocks - Fannie Mae (FNM) and Freddie Mac (FRE) - cratering 25% and 29% - that has to say something about the resiliency of this market.

Either that, or - as one of the astute members of the chat room stated today - maybe it's just short-covering prior to the Thanksgiving holiday.

Anyway, with this kind of schizoid market, I'm going to get a little bit more conservative with my recommendation to my Baffle / RSVP / ARM Play Members tonight. Well, not too conservative perhaps. It's a near-double since August, and the stock I'm about to name powered up to a 12-year high today!

Well, the only thing that looked like a "turkey" today was the stock market...

I said yesterday that the market usually has a good week around Thanksgiving, and that I was expecting some bullish action this week.

There was no bull in the market today - just a turkey! The Dow plummeted over 218 points and the Nasdaq almost 44. The fear and loathing of the credit crunch is still in the market it seems.

This market needs to hold right here or we could be in the first stages of a genuine bear market - something we haven't seen in quite awhile. So far I'm still calling it a correction in an overall bull market, but things are getting ugly out there.

Great stocks are being hammered mercilessly. China stocks - yeah, the same red-hot stocks that have been exploding all year - are in a mini-meltdown. Granted, they may have gotten a tad overheated and now simply need a prolonged cooling off period.

But each day in this extremely choppy market is a new day - and we could have a nice "Turnaround Tuesday" tomorrow, and still have time to have a market to be thankful for by this Thursday.

I found a stock chart today that's pretty amazing. It shows a recent string of red candles that may have set some kind of minor record, with 20 down days in a row. But the stock then bounced all the way back in just four days, kicked off by a beauty of a Morning Star reversal signal. This tiny stock ran from $3.50 to 6.00 in those four days, and looks ready to mount an upside attack again. And insiders are buying. I'm about to name the stock for my Baffle / RSVP / ARM Play Members.

Time for the Turkey Day Rally?

The market usually has a good week around Thanksgiving. So I'm expecting some bullish action this week.

In fact, the Turkey Day Rally may have started in the last half hour of trading on Friday. Contrary to recent market action, the major market indices ran up into the close rather than selling off. That's bullish action on any day, and especially on a Friday!

I'm seeing lots of stocks up nicely after hours as well. So the Thanksgiving Rally may arrive right on schedule this week!

A perfect White Marubozu candle is very rare, and very bullish. I found one on a stock that is bouncing back strongly after a recent sell-off. This tiny stock ran from $1.75 to 4.00 in just a few days recently, and looks ready to mount an upside attack again. I'm about to name the stock for my Baffle / RSVP / ARM Play Members.

The jury is still out on the market...

Except for a few exceptions, the market today was less exciting than watching paint dry.

It started out pretty good, but soon fell back into its old, familiar pattern of cratering back to the downside. Except for a anemic "too little, too late" spurt in the last few minutes of trading, the market acted very bearish once again.

The good news is that the market - represented by both the DJIA and the Nasdaq, did end up off the lows of the day. And the last-minute spurt could mean a bounce tomorrow.

And the recent lows were not undercut, so we could still see a follow-through day after the enormous point-gain of Tuesday, and the new bull run could start.

So, the jury is still out. It could go either way, and the market itself will let us know in the new few days.

There is one tiny drug stock that has certainly ignored recent market weakness. In fact, it's exploded 150% in the last four days! So why am I recommending it to my Baffle / RSVP / ARM Play Members this evening? It's because the "story" behind the company is so compelling, and could lead to another 1,000% (at least) if that story plays out.

Well, the bear has not left the building quite yet...

The markets were looking pretty good today, especially considering the huge gains made yesterday. And I was not looking for another huge move today.

But we had another bearish-acting day with the cliff falloff in the last few minutes of trading. That is bear market action, not bull market action.

That could mean, unfortunately, that yesterday's monster move was just a bounce in a new downtrend. But for now, I'm sticking with my overall bullish scenario.

Here's why...

I'm seeing some positive things starting to happen in the economy. I'm seeing the skyrocketing price of oil starting to cool off a bit. I'm seeing some pops in retail sector stocks, like Wal-Mart. I'm seeing a strengthening dollar. And I'm seeing financial stocks rebounding, with signs that the subprime mortgage mess may become a memory sooner rather than later.

Call me Pollyanna-ish, but I think we are closer to a market bottom here than a market top.

That doesn't mean the bears have left the building yet, and they still may put up a fight. But I strongly feel - like we've always done in the past - that we'll figure out a way to muddle through all the negative mess, and this too shall pass.

Within just the past few days, I found a stock that looks like a grand-slam home run. This one could be like CSCO or TASR in their heydays. I've not been this excited about one stock in a long time!

It was up almost 22% yesterday on a humongous blast out of a basing area. And with the holidays coming up, this one could literally explode.

The stock chart shows a ultra-powerful Cobra setup (an amazing pattern I learned from my trading buddy and fellow expert Paul Lemal at www.BottomSpringers.com) today, meaning there's plenty of demand left in the stock that could easily propel it another 30% in the next week or two.

Think EBAY as an IPO, and you'll get where I'm coming from. I'm about to name the stock for my Baffle / RSVP / ARM Play Members this evening.

What a difference a day makes! And I had a feeling this would happen...

Over the years, I've noticed something.

You may have heard me say this before, but here it is again. When the market is going my way each and every day, when I feel I can do no wrong, when every one of my trade setups are doing "exactly what they're supposed to do", and when I start thinking "Shoot - I can just trade for a living!" - almost invariably that's the time when I should tread with the most caution, since chances are we are close to a short-term market top in that situation.

On the other side of the coin, when the market is tanking each and every day, or when it "teases" in the morning - or even most of the day - with a beauty of a possible bottoming candlestick pattern, and I get ready to BUTT (Back Up The Truck) and start buying, only to see the market crater in the last few minutes, and when I'm allowing myself to get borderline depressed, ready to "throw in the towel" and think about studying the Forex and give up on the stock market - that's almost invariably the time to be most alert to get ready to actually BUTT, since chances are we are at a short-term bottom in the market.

The latter situation describes exactly my mindset over the past week or so, as day after day the market kept ratcheting downward in value.

And especially yesterday, when I made the comment "With a market that is as fun as Chinese water torture, I'm giving up for now. Every time I've felt this way in the past, it's been a great time to buy, and this time may be no different. But I'm just not seeing the bottom of this market yet. It may come tomorrow, but I'm not giving any new recos tonight."

Well, judging by today's market action, my statement turned out to be right on.

The DJIA skyrocketed almost 320 points today, and the Nasdaq did even better percentage-wise with almost a 90-point gain. I figured with the kind of short-term drawdown we had in the Dow recently, a 300-400 point pop back to the upside would not be out of the question.

Guess I should start paying more attention to my feelings.

There are literally TONS of great charts out there tonight. So picking the "best" trade setups this evening for my Members will be an arduous task.

But I found a dandy of an ARM for my Baffle / RSVP / ARM Play Members this evening. It's a small semiconductor company that recently romped on a 4-day "fun run" of 27.04%, 5.29%, 1.91% and 14.16%. It pulled back, formed a series of Holy Grail setups, popped back up over 6% today, and now I think it's about to start another "fun run."

This is one of the ugliest markets I've ever seen. Let's stand aside for now.

With a market that is as fun as Chinese water torture, I'm giving up for now. Every time I've felt this way in the past, it's been a great time to buy, and this time may be no different. But I'm just not seeing the bottom of this market yet. It may come tomorrow, but I'm not giving any new recos tonight.

Be safe!

Well, so much for Hammer Time!

I had such high hopes.

For most of the day, the Nasdaq chart showed a beauty of a gap down Hammer, and what I thought was a possible sign of the end of the pullback.

It was not to be.

It teased us almost all day, just sitting there. But literally in the last few minutes of trading, the Hammer vanished, and we ended the day with a simple horrible-looking dark candle. Not a signal that the pullback is over, by any means.

So I wouldn't be surprised to see another gap down on the open Monday, barring an emergency move by the Fed to cut interest rates over the weekend (don't hold your breath). But I also expect at least a bounce in the market sometimes this week, and the market is almost always bullish during Thanksgiving week.

Will this year be different? Only time will tell. But one thing's for sure, we now have a much lower base to run from if we can get the historically bullish November - April party kicked off!

Speaking of being bullish, my pick for today has one of the few gorgeous charts in this horrid market. The stock is being accumulated like crazy, and was up almost 9% on Friday, popping out of a nice basing area. It's a biotech company, and has a product that millions will be needing in the next few months. It looks ready to take off. I'm naming the stock below for my Baffle / RSVP / ARM Play Members.

Another day the market could have crashed, and another day Hammers were formed. August 16, 2007 redux?

The markets started off horribly again today.

After teasing us a little with a nice open, the major indices almost immediately started heading south. They stayed down most of the day, but ended the day with a nice "W" double bottom (at least in the DJIA and the Nasdaq), as they tried for a recovery into the close. The Dow was actually green near the close, but succumbed to a little last-minute selling.

Nevertheless, I'm sensing the bottom here. It's almost an instant replay of the August 16, 2007 scenario, when the subprime mortgage mess was in full tilt. On both that day and today, it appeared we were about to go to "hell in a handbasket", but instead the markets bounced nicely to the upside by the end of the day. Both the charts of the DJIA and the Nas show what could turn out to be obvious Hammer bottom reversal signals in the next few weeks.

So tomorrow could be interesting. I'm seeing a strong day for the markets. But if we take out today's low, and therefore wipe out today's nice Hammer bottoming signals, all bets are off.

A huge kickoff of the Nov. - May rally - just totally surprising everyone - would sure be nice though.

Speaking of surprises, my pick for tonight shocked everyone today by blowing away earnings and sales estimates, setting a record for the tiny company. The stock recently Baffled to the tune over 40%+ in just one day, and may be about to make a similar move here. I'm naming the stock below for my Baffle / RSVP / ARM Play Members.

Chop! Chop! Chop! Goes the market...

What a difference a day makes! The bears were back in control today in the markets, with claws fully extended and teeth bared.

The market never had a chance, cratering from the opening bell and heading straight downhill from there. No Hammer Time today! The DJIA candle ended up as a near-perfect Black Marubozu, about as bearish as you can get.

Oddly enough, however, the bulls seem to be rampaging in after hours trading. FSLR, for instance, was trading up $39 for awhile on a grand-slam home run earnings report. Some of the other Solars are trading up as well. But CSCO is cratering after hours on a sub-par report.

So tomorrow could be interesting.

This is the choppiest market I've ever seen for the Dow. Up 118 points, down 361, up, down, up, down. OK, I'm getting dizzy, so I'll stop.

Last night, I had a tough time finding "the best" chart since there were so many to choose from. Tonight was even tougher - I had a hard time just trying to find a single decent chart. But I managed to find a stock that I've known about for some time, a great trender. And today - in a simply horrible market - this stock shot up over 5% to a new all-time high! I'm naming the stock below for my Baffle / RSVP / ARM Play Members.

Get ready, because it may be BUTT time again! Also, why I love my Holy Grail Play...

The bulls were back in control today in the markets for the most part.

Both the DJIA and the Nasdaq gapped up on the open, and other than a little swoon into negative territory around 11:00 am - 1:00 PM EST, the markets remained strong for the rest of the day, with a little "mini-meltup" into the close.

That is very bullish action, and I'm seeing tons of great charts tonight. These charts come in various flavors - from stocks making new short-term or even all-time highs on gorgeous base breakouts, to beautiful candlestick bottom reversal signal patterns.

In the latter category, get ready to BUTT (Back Up The Truck) and buy some of these China stocks that have sold off recently. Once again, the Chinese government is trying to cool off the red-hot China economy, and once again, it will fail.

Some of the hottest stocks from that country have cooled off, but are now showing very strong reversal patterns. This is the best buying opportunity for China stocks since the general market bottom on August 16. LFC, ACH, SNP, SHI, KUN, and RCH are just a few that come to mind.

You've heard me mention my Holy Grail Play from time to time. It's a relatively new weapon in my trading and investing arsenal, and is a result of trying to come up with a way to anticipate my (also very powerful) ARM Play (Awesome Rising Method).

The second leg that forms the ARM often gives a one-day result of a 6-20% return in and of itself! The stock usually continues after the ARM, but you can see why I'd rather be sitting on a nice return already rather than enter the trade after the ARM fully forms.

Well, after months of study, I came up with my Holy Grail Play. I call it that because it is so successful so often that it's the closest thing I've ever come to a genuine "Holy Grail" trade setup.

Take my latest stock pick for my Baffle / RSVP / ARM Play Members. It formed a perfect Holy Grail yesterday, and today the stock was up a tidy 13.56%, forming a beauty of an ARM. So the stock should skyrocket even more from here.

With today's strong market, it was tough finding the "best of the best" chart for tonight's pick. But I've found a fantastic setup on a hot biotech stock that recently ran up 100% in just 17 days. It pulled back, but today reversed strongly to the upside. I think it's ready to double again. I'm naming the stock below for my Baffle / RSVP / ARM Play Members.

Yet another head-fake in the DJIA, and this still feels like a bottom...

Well, once again it appeared that the bears had the upper hand, especially in the DJIA.

The markets opened extremely weak, with the Dow down 100 points in the first three minutes of trading! But they started bouncing almost as quickly as they cratered on the open as bargain-hunters poured in.

The markets later tested the daily lows one more time, but around 2:00 Eastern they began a sharp journey skyward, with the Dow actually in the green for a few minutes. But the bears regained control on the close, with all major indices ending up in the red. Still, it could have been a lot worse.

So once again the DJIA chart shows a Hammer for the day, and seems to have solid support in the 13,500 area. Nasdaq's chart shows a Spinning Top back at the 10ema.

I'm very impressed with the overall resiliency of this market, especially with all the bad news out there that could easily be taking this market down. And this is why I keep saying over and over again - it's not important what you THINK the market should be doing - it's important to see what the market is ACTUALLY doing.

I've been following a red-hot Solar play to try to find a great entry point. I think we are looking at one right now. And the stock is forming a highly powerful Holy Grail setup, almost always the end of the pullback. I think it's about to take off again. I'm naming the stock below for my Baffle / RSVP / ARM Play Members.

Instant replay in the DJIA! Is this the kickoff of the new bull market? In my last post, I stated the following...

"So what I'm looking for now are lots of Bullish Haramis tomorrow, or another gap down and THEN lots of Hammers on lots of charts. If not, we may be in - as we say in Texas - a "whole heap o' trouble!".

Well, I got my wish - the market gave us Option #2 above.

In fact, take a look at the candlestick chart of the DJIA. Last week's Thursday and Friday action was almost identical to the two-day Friday and Monday action back on October 19 and 22. Big dark candle to the downside, signaling a possible market crash the next trading day, and scaring everyone the next morning with severe weakness, only to recover during the day and form Hammers at the close.

The DJIA chart is flashing what could be an almost perfect "W" double bottom, and we could see a nice bounce next week - if not the start of the historically strong November - May run.

As far as the Nasdaq is concerned, it's had six days of pretty solid distribution in October, but the chart is still angling northward, and Friday's candle is a Doji in a pullback, usually a bottoming signal.

So right now I'm revisiting some of my old favorites to see if I can find strong bottoming patterns in short pullbacks after great runs. And I've found a doozy! It's a play on China, has fantastic fundamentals, and doubled in price from mid-September to late October. I think it's about to take off again. I'm naming the stock below for my Baffle / RSVP / ARM Play Members.

...but the market will also do what it has to do to make you look like an idiot at times...

Well, the market started with a bang today, the kickoff of (historically) the most bullish time to be in the market! And I truly expected to see a pop of another hundred points of so on the Dow today.

Unfortunately, the "bang" was more of a "thud" as the markets proceeded to fall off a cliff today. After the initial euphoria brought on by another interest rate cut from the Fed yesterday, it seems the big time traders and investors began to study "the rest" of the Fed's comments, and didn't like what those words entailed.

It looks like the Fed may be "two and out." In other words, it could be the end of the interest rate cuts already, since oil and gold are both going through the roof - fanning inflation fear flames. But we still have the potential meltdown in the financial area, so there may be some sort of precarious "balance" there that further interest rate cuts may upset.

However, the markets have almost always suffered from a day or two of turmoil after a major Fed decision, so we may be just fine.

But I was hoping to see tons of Hammers on lots of charts today - especially the ones for the major market indices.