Eric's Weekend Review

[B][I]admin's note: Eric posted his review and we liked it so much that we hope he will post here on a regular basis. Eric, please fire away[/I]![/B]

Hi everyone. My name is Eric, and I became a member of VIT in June 2009. In this venue, which links unique individuals throughout the world, I found much support and encouragement from Pascal and Billy. I was also fortunate to receive feedback from members like Mike Scott, amongst others who may or may not post anymore.

I studied geography in college and have been blessed with many great experiences that have taken me throughout the world, generally in the company of some truly wonderful people. While living in Yosemite National Park in 2007, I opened my first brokerage account. When I eventually found my way to the VIT group and EV site a couple years later, I had felt inside that "this was something that I need to stick with."

I started practicing my own analysis by mimicking what I saw others with far greater experience doing. And I learned that it takes time and a lot of practice. That is what I continue to do - practice. So this forum is a way for me to share some of the things that I observe based on the way I have learned to look at the market.

Please feel free to comment, question, or offer feedback.

Best,
Eric

Thank you eric for this wonderful report, great information and trading direction. I only have one question, regarding your selections, I see that mostly are in materials/oil sectors, well, my qeustion is will your choices change if we have a breakout in the US dollar, and maintain a bullish view ??

thanks

Hi hmatar,

That is a good question. My main intention in collecting these observations is to really look at what the market is doing [I]right now[/I]. The reason for an increased focus on the materials/energy sector was simply due to some interesting activity witnessed these past weeks after a period of underperformance earlier in the year. For example, when a stock like FCX all of a sudden jumps through two major moving averages with noteworthy volume - what might be going on? Is this strength an indication of not only a possible bottom, but perhaps leadership? FCX is a very large company with a big float, so it takes real buying power to move such a stock up with vigor.

Today the futures are pointing down. So we will see if these stocks hold their recent strength and attract money, even if the market sells off. Regarding the dollar, your guess is as good as mine. I've learned there are many assumptions and aphorisms built into the direction of the dollar and the subsequent impact on stocks. I prefer to just look at the market on a daily basis and through numerous timeframes.

Also, just to clarify, the securities highlighted are not implicit buys. While some might show legitimate buy signals depending upon one's criteria, others are merely highlighted because their action "says something" about the market as a whole.

Best
Eric

Eric,

Thanks for the great report. I really like how you use the EV tools and uses them to build your thesis. Thanks for the insight.

Chris

Hello group. Please find available some weekend notes . . . I primarily am focusing on the long side since the 20 day MF is not under a short signal and enough leaders are holding up to give the benefit of the doubt to the recent advance. I recommend the articles published by Kevin Marder found over at Marketwatch, which are helpful and give a fairly succinct overview of some of the current leaders. A subscription to The Kirk Report is worth its weight in gold, as he provides a timely and helpful review each week. While I would have liked to add a bit more to the report, time constraints precluded me from doing so.

Best to all,
Eric

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Hello friends. Here is my weekend review. I hope some find value in the observations shared. I am most interested in "getting a feel" for the market by examining "the parts," in order to better interpret the whole. I have to admit that I am most interested in becoming a better position trader and stock picker. It is a difficult task. My goal is to integrate EV, Stage analysis, and Sector analysis to find stocks that might be held for 1 week to a couple months or longer. I like to look at relative strength and catalysts, which often include earnings.

Once again, Charles Kirk and his Weekend Chart Show is a great resource. Also, I watched an interesting interview with Laszlo Birinyi, which in the midst of all the headlines, I found refreshing. That interview is found here: [url]http://finance.yahoo.com/blogs/breakout/p-500-going-2-000-laszlo-birinyi-120034902.html[/url].

Best
Eric

Hello group,

I have put together my weekend review, which is a very useful practice for myself, and my true hope is that others, too, may follow along as we learn together.

I attempt to detail at least a few interesting developments that I notice from daily watching the market, both on my own time and at my job. I think the short side offers opportunity, but my experience in that realm is still limited and developing, thus I prefer to focus on what I see as opportunities in stocks that are showing some degree of strength and/or are transitioning from a bearish trend to a possible bullish or neutral trend.

Please feel free to comment or question.

Best
Eric

Friends,

The current market conditions have now overwhelmed any developing long setup recently discussed. The only exception might be some gold stocks. While we were given a short, but tradeable rally in late June through the middle of July, that rally has fizzled and left us mired in the range, with increasing probability of breaking to the downside.

While a dead cat bounce may occur in the coming days, the damage done over the past two weeks is significant. As earnings season winds down, there is little in the way of catalysts that I see pushing the market higher. QE3 could prompt precious metals to move, but most stocks need much healing, which will take more than a few days or weeks. I intend to monitor various stocks and sectors, which may build bases while the market corrects. Meanwhile, current leaders seem increasingly vulnerable.

Best
Eric

Hello everyone,

Please find attached my weekend notes. I had much more time to prepare throughout the week, so it is a bit longer. It has been a long time since 2008-9, but I highlight some scenarios for market leaders and possible outcomes if we are indeed moving into deeper bear territory over the coming months. Additionally, I review some recent stocks that were discussed and some shorting-lessons and observations. I also note the importance of recognizing flaws in one's analysis early on. Finally, I touch on a couple ideas regarding gold stocks.

If you don't get a chance to read through this, then most definitely check out Aly's Crowd Sentiment Index report.

Best
Eric

Eric,
Nice weekend review. I enjoy reading them. I like that you are looking at real stocks and seeing what they are doing. The market will eventually follow the leading stocks. I looked at the case where you covered your short at the 50-day and smiled. It is difficult to write rules. There is another one that says short a position that is slicing through the 50-day on high volume. Watching what happens at these places is important. If a strong bounce takes place cover, if weakness is obvious double up on your short position.

If I had to guess, we stage a bear market rally in a month or so from now and run up into the end of year and then seriously roll over next year. Bear market rallies can be played. The trick is not to be fooled for too long as they can be extremely convincing. The low road scenario should not be considred a continuous down move. Keeping a shorting list could be important if a rally occurs.

GREAT writeup Eric. Thanks for taking the time to put this together. Very clear.

Regards,

pgd

Hi Eric--

I very much appreciate the historical charts and quotations. That you are trusted by the leaders here speaks very clearly. Thanks !

A less detailed report this weekend due to time constraints and the need for some rest.

Have a great week everyone.

Eric

Thank you for sharing another excellent report, Eric. The divergence in performance between precious metals and their stocks has been intriguing to watch, especially with oil prices having come down in recent months. It will be interesting to see if PM stocks can emerge as a leading sector should we continue to see a weak stock market in the months ahead, or if the baby will once again be thrown out with the bath water.

May I ask how you decide on which sectors to focus on each week? Are they simply the sectors that may soon generate buy signals or that are showing the most leadership / relative strength? And, does your long-term macro outlook favor certain sectors over others?

Appreciate you taking the time.

Aly,

Since I learn best visually, I attempt to review most sectors at least once a week by just scrolling through each sector and sub-group on the EV site. It takes about an hour. Otherwise, I look at what I consider "important" sectors - precious metals, energy, technology, and retail on a daily basis - sometimes checking the stocks in each sector that are included in the database. The 20 day MF reveals when to be on heightened alert.

That said, I gather input from other sources, such as daily reading Billy and Pascal's commentary and robot signals, important research and writing shared by members such as yourself and Mike Scott, The Kirk Report and especially his Weekend Chart Show and after-hours reports, and analysis from those who I consider top-notch like Kevin Marder amongst others. These are useful sources for gathering information then drilling down areas of focus. I also watch Brian Shannon's free weekly videos and use the alphascanner trade planner to visualize the stages.

Finally, there are stocks that I have now been following long enough that I simply check them with great regularity. For example, I traded DNR and POT last week because I know a good deal about them and feel familiar with their trading patterns and price/volume history.

Best,
Eric

thanks eric, report greatly appreciated. Learned a lot. BR, K

Short weekend review. Have a great week everyone.

Best,
Eric

Thank you Eric. This is up to the point.
I'd like to expand on your point regarding the energy companies attracting money.
As far as oil prices decrease (and the situation in Libya still points into that direction,) it is difficult to aggressively step in to buy oil related equities.

One method that I find rather useful in trying to value the different producers is to see how their equities have been performing in the past compared to oil prices (I divide the equity by the oil price).

Below are a set of such files.
Those that have a flat 200DMA (50MA Weekly) are viewed as producers "in line". These are usually large producers with reserve, whose price will depends more on the price of oil than on their outstanding execution. Most oil sands belong to that category: they do not have to dig new holes to explore for new reserves. They need to invest capital, reduce their production costs and try to sell their production as high as possible. You will note that the slope is slightly different whether you use US$ or Canadian$.

Out of these figures, the best performing stocks are easy to point. These are the stocks I am looking at. Of course, value and timing are two different things. You still need to buy at the right timing, but if you are wrong on the timing, you might still do OK with the leaders.


Pascal

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Thanks Pascal. I had not considered that before and will keep that in mind when looking at the energy sector.

I did see that the shale oil sector and oil sands sectors issued buy signals last week - in conjunction with the whole energy sector. This leads me to believe that a short-term bottom for oil prices may be at hand since their unconventional methods require higher prices to breakeven. If I am not mistaken, that price is somewhere in the 70's or low 80's, depending on each producer.

I have not had enough time to put together a meaningful review for the weekend. I hope to gather my thoughts on my days off this week.

Best,
Eric

Hello friends,

I will be traveling this week and part of next week, so I have prepared some observations that I will share now.

The main gist is that there are going to be select opportunities on the long and short side, but some patience will probably be needed and rewarded while price action evolves.

I really hope everyone has had the chance to read Mike's CANSLIM commentary and Aly's CSI, both of which are really helpful for me and thus very appreciated.

Have a great week everyone,

Eric

Hi everyone,

Here is a report from the weekend. I hope everyone is doing well.

Best,
Eric

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Hello,

With futures pointing lower, I think it will be important to see whether weakness begets buying. My report contains some observations from the past week. With sentiment moving lower and some signs of technical improvement, I think excessive bearishness could be dangerous. Meanwhile, there is still time needed for more repair and healing, which prevents too much bullishness. Some more range/base building might be good for a fourth quarter or earnings season rally, even if it is just a bear market one.

Best to all,
Eric

Great read, Eric.

I'm hearing the type of chatter and buzz about gold and silver miners that normally precedes a big move in these issues, and will be watching with keen interest how the story on them continues to develop.

Thank you Eric for your always remarkable synthesis of market forces from many approaches.
Writing such weekly reports demands much time and persistence and I'm sure most members are learning a lot from your generosity in sharing your hard work.
Billy

Thanks for the kind words, Billy. The performance of leaders like AAPL, AMZN, LULU, and ULTA, amongst others, is exactly what I was looking for today. Numerous gold and silver equities (EGO, GOLD, NEM, SLW) closed higher despite the selling in the underlying commodities. The down tape masked underlying positive money flow, too. I just read Marder's Market Comment, which was very succinct.

All the best
Eric

Last week was an interesting week. My current review follows-up on some topics discussed last week, and the important market feedback received. I wish everyone well navigating through this environment.

Eric

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Hello friends. I have kept this report shorter. The primary change from my last report is that action in leading stocks has become worse. I believe the tape last week masked such weakness.

I'd like to emphasize the importance of an open mind. I am prepared for a strong down move. But just a couple weeks ago, I thought the conditions for a bear market rally were emerging; however, the action quickly deteriorated and caused me to reassess the situation. I urge everyone, especially those who are new members, to do their own weekly reviews for your own records. Doing so will improve your situational awareness and reaction times. The weekend is a good time to do it because the market is closed, and you can focus on longer timeframes to put the daily action into context.

Best,
Eric

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Good stuff Eric. This is indeed very dangerous market to participate as the extreme volatility makes it difficult to manage risk both long or short. Cash continues to be the best position in this environment even for most seasoned pros.

Due to some extenuating circumstances, there will unfortunately be no weekend review.

Best,
Eric

Hello friends,

Please find attached my weekly market observations.

In addition, I include a trade report from last year, coming out of the 2010 correction. There was a small group still posting their monthly trade idea in the EV Training group. The reason I share this particular trade is twofold. First, it highlights the way one can synthesize EV with other methods like growth or momentum investing. Second, it highlights why late summer 2010 is so much different than the current period. There were [I]so[/I] many stocks moving in a powerful fashion on big volume at that time. Price does pay, but volume speaks. I don't see the same type of landscape right now, and am consequently more skeptical of the sustainability of the recent advance.

I also encourage everyone to read Aly's CSI, which is top notch as usual. Jerry also posts his leader's index, which is worth checking regularly. There are so many resources here!

Have a great week.
Best,
Eric

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Eric,

The contrast provided in these two articles is very informative and thought-provoking. The "tepid" quality of our current rally has never been more clear to me than now. Thanks!

Here are this weeks market observations. There are bullish and bearish perspectives one can find. After my review, I remain cautious. The action of leading stocks has me on high alert. Charles Kirk's Chart Show presents some balanced perspectives and Aly's CSI as usual highlights various scenarios in addition to top-notch sentiment analysis.

Best,
Eric

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Lots of good stuff out there, but too much to contain in my weekly notes, attached below. Please consult some great resources, too, especially Charles Kirk's Weekend Chart Show and Brian Shannon's free weekly videos. Additionally, Kevin Marder's reports on Marketwatch are frequent enough to stay on top of a selection of leading growth stocks. Of course, Pascal, Billy's, and Mike's daily comments and Aly's CSI, too. I really appreciate all those sources. If I had more time, I would expand my notes. Nonetheless, the main point is that shares have a bid, and that bid is from a subset of both growth and value oriented investors, depending on which stocks one is watching.

Have a great week.

Best,
Eric

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Please see attached the weekly report. I have chosen to narrow the focus since there is often too much to cover and feel that it is adequately done. I intend to focus on the most important things I come across while preparing my review. This will allow me to keep things a bit simpler. Please feel free to comment or give feedback, as one is always learning.

Best always,

Eric

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[QUOTE=ericoleman;18365]Please see attached the weekly report. I have chosen to narrow the focus since there is often too much to cover and feel that it is adequately done. I intend to focus on the most important things I come across while preparing my review. This will allow me to keep things a bit simpler. Please feel free to comment or give feedback, as one is always learning.

Best always,

Eric

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Another captivating read, Eric. In particular, your reviews of sector leadership and highlighting of individual names that are standing out provides a nice reference point for further research for those of us who so inclined.

Also, I particularly liked this sentence:
[quote]Ultimately, one’s analysis is an attempt to contextualize the market, a very dynamic entity, into something a bit more manageable.[/quote]

Couldn't have said it better myself - and it seems especially pertinent right now, as there currently appear to be some smart people on both sides prepared to place aggressive bets.

One of the most challenging aspects of sharing one's analysis is the possibility of being wrong. This week highlights some of my observations, which lead me toward an increasingly positive view of equity markets. Now there are participants out there with more experience who are seeing things different, so I find it a bit difficult going against certain dominant thoughts.

The aim of my weekly report is to do market analysis. Some folks are experts at technical analysis and Elliot Wave. Others focus on fundamentals. I simply want to improve my assessment of supply and demand for shares against the backdrop of important conceptual market themes (momentum, value/growth investing, market anomalies, breadth, large vs. small players, sentiment). And by improve, that means I recognize all analysis has potential to be flawed or subject to new information - and that one is usually learning all the time. I find that stage analysis is very encompassing and am grateful for the tools created by others like the Alphascanner and EV.

Best,

Eric
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Thank you for sharing your honest and frank opinion of the market once again, Eric. You're right that it is never easy to share one's opinion of the market publicly knowing that the possibility of being wrong is always there. The fact that you do so anyway speaks to your willingness to generously share your knowledge with others.

P.S. Don't worry about your opinions differing from the dominant thoughts of those more experienced then you. Adaptively responding to a dynamic market is a principle that both you and they share, which is more important than any difference in opinion. If they are correct, you should recognize it soon, and if you are correct, then they should recognize it soon...and so on.

As noted last week, one's analysis should be subject to additional new information and feedback. And I think last week offered some clues about the market, which certainly crimps a few of the positive developments that were emerging.

The market seems tired, and I think some warning signs showed up around the middle of last week.

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Best,
Eric

Hi friends,

Due to spending time with friends and family, I have not had enough time to prepare an adequate report for the weekend. I prepared a brief comment on the stage scans, but it was lost after a computer malfunction unfortunately. I think most of what needs to be known has probably been communicated by Pascal and Billy, anyways. I did come across a nice video from Joe Fahmy, which I found useful.

[url]http://joefahmy.com/2011/11/25/video-notes-about-bear-markets/[/url]

Have a great week everyone, and I am grateful to be part of this group.

Best always,
Eric

Hello friends,

A busy couple weeks keeps this report short. There were a couple positive developments last week, including the 20-Day MF buy signal and transition to the weekly early-accumulation stage setting on QQQ DIA and SPY. I hope everyone has had a great couple weeks with friends and family.

Once again, thanks to all the folks here and Billy and Pascal, especially. Aly's BSI report continues to be a great resource. And I must also credit Charles Kirk and Brian Shannon for the informative videos they provide.

Best,
Eric

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