Silver Gold vs. Companies SLW

SLW I've noticed that a lot of the members the past few days are really getting hung up on SLW. I just don't get this at all. All along we have been talking about the SLV and GLD as the ones to hold. Now I know in the past we spoke very highly of SLW but I know this endorsement was one of "as long as the COMPANY and Chart was working. Which during that time it was. The big difference between the two is that one is a company and the other is an ETF. SLW has real earnings to produce and humans at the wheel unlike the SLV which is a proxy of what the world market is for silver. Look at the chart for EGO, would you ever want to own EGO over GLD? NO. How about ABX? NO the companies just don't work compared to the EFTs. So why are so many people trying to WILL a trade? SLV is up from from FEB to Now 26.00 to 45.00 darn close to a double why is anyone fighting this? GLD same chart compared to the COMPANIES. Your charts are not only giving you a home run but many here are not swinging a the ball insisting on a different pitch. We haven't seen a slow pitch softball like this since 07' GOOG or the March 09' bottom. Don't buy the Companies!

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Are you ready to make some cash?

Where are we right now? We are exactly where we were last week in the SP500. That’s not a bad thing at all, as a matter of fact it’s rather constructive to be stuck right now. The SP500 has come a long way since the 1260 low in mid March. We are currently bumping around at 1330 for the past few days. Resistance is right here at 1340. 1340 was also the prior high from mid February. So what does this mean to you? It means that you need to be somewhat involved until the bull is proven wrong and starts to roll over from 1330. If the SP500 rolls over here, and what I mean by this is that the SP500 starts to fall below 1325. If this happens you need to close your positions until it’s safe.

So what is it going to take to get over 1340 / 1350? Well it’s going to take a few things. The good news is it is happening in a slow constructive way. Buyers (Mutual Funds) are coming back in. We know this because the bull just will not stall. Even though Volume has been less than great it is still buying. Fed policy is still Equity Positive. Interest rates are low and the Fed is still expanding the US Balance sheet even thought this is very dangerous for our long term monetary policy, because of this, equities are the best investment.

Where should we have our money currently? The Transports are leading the way. Train stocks, CSX, KSU, WAB and UNP are some of the good choices. Heavy Equipment, CAT and DE are moving. Energy too, PBR, RIG RRC, PCX, ACI and KOL. Finally GOLD and SILVER just continue to climb setting new highs it seems every week.

Now, I am not suggesting for you to pile in right here, I haven’t, but you got to have some things working right here from the above choices, which I do. Once the SP500 gets through 1350 on CONVICTION we have blue sky above and that is when it’s time to really get aggressive. Right now I’m optimistically Bullish and waiting with my guns loaded for a push through 1350. I’m currently holding CAT, DE, FCX, SLV, LULU, and F. Wanting to buy WAB, PCX and more SLV.

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Fun With The SP500

Which one do we want?. These are both the decade chart of the SP500, monthly and quarterly time frames. Let's look back to around 04' and see what the market did then. It took about 11 months for the SP500 to chew threw consolidation before lifting to new levels. Looking at current Stocastics as well, add in some light current buying volume and my guess is that 1250/1300 is a good breaking point for our current market to roll over. Compare current volatility to that of back around 03/04 and you will find that this current market is much more volatile. You can tell this because the Bollinger Bands are spread further apart.

Now let's peek at the same chart but in a Quarterly View. What do we see? Back in 02/03' the market bottomed and based then started the rebound which lasted until 2008' In that 03/04 time period the market had Low stocastics that turned up and began a 5 year run. Fast forward to our current period and you will see that in 09' the market bottomed. This new recovery and bull market is in it's 2nd year. The SP500 is also currently trading over the 20/40 Moving Averages which is a very good thing. Can this current bull market last? Can it continue for another few years and reach 1600 and beyond? We will just have to watch but we must monitor both of these charts because if the market fails it will look a lot like the monthly Decade SP500 until consolidation is completed. If the SP500 pushes higher over the next quarter or two we should have a very good chance at a multi year bull market and 1600.

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Stuck in a BOX!

SP500, NDX, DOW Team we've been stuck in this box for some time now and who knows if today is a reversal day or not. Still much uncertainty in OMAR / Charlie Sheen land. I'm going to be watching the close pretty close on these up days. If it is starting to get bought, institutional money is starting to come in. Now, as we know DAY ONE dosen't start the trend but volume at the end of the day is going to be the horns in front of the bull when ever it happens.

Don't just jump in!

One of the biggest mistakes I made when I first started trading is that I didn’t understand the concept of sectors moving together and being in sync with the market. I was just throwing money at any stock I heard on TV or I read about. The reality of this is, STOCK SECTORS MOVE TOGETHER. They follow economic cycles, world news and institutional interest. Let’s start off right and get in sync from day one even before we place a trade. Sectors and markets move together, Industrials follow industrials, chips follow chips, transports follow transports and so on and so on. So we need you to set up a watch list with some of best of breed stocks from each sector that we talked about earlier when evaluating stocks. This watch list is going to have many stocks on it, and each day through your trading platform we are going to know which direction the sectors are moving. We are going to place the IBD top 25 on this list because IBD is a great source of finding the best momentum plays in the market. Earlier we also talked about common themes that you might have heard on any CNBC show. It’s important to watch these shows, CNBC will help you stay in sync with the markets and will also point out possible new plays that you can cross reference with IBD. CNBC stocks go on the list too.

On this watch list there are a few “TICKERS” that I need you to include. These are market following symbols or sector ETFs that will make it easier for you to know what sectors are moving or what is not.

NDX NASDAQ 100 stock group

SP500 Group of 500 stocks that makes up the SP500

DOW 30 30 toP DOW stocks

IYT Transportation ETF

SMH Semi Conductor ETF “TECH”

DBC Commodity ETF

XLF Financial ETF

XRT Retail ETF

GL Gold

SLV Silver

OIH Oil ETF

XLE Energy ETF

These symbols go on the list first. After them put the IBD 25, any stocks you want to follow from CNBC and then any other stocks you want to follow.

IMPORTANT!

When you put the watch list together make sure the column right after the stock symbol is “ % CHANGE “ Sort your stocks from the “BEST” “HIGEST GAINER” to the “WORST” “BIGGEST LOSS”. Each day when you turn on your trading platform the days best performers will already be ranked for you. You will notice this because of the tracking stocks that I gave you above, the sectors will be grouped together and indicate which way the market is headed. Over time you will begin to notice that sectors in motion stay in motion for a period of time. You want to be in the sectors that are moving to the positive. If they are at the bottom of your list, guess what? They are not making you money and you need to be in something different.

IMPORTANT!

The next thing you need to monitor is the SP500 that we put on the watch list. You need to be following stocks that are tracking ABOVE the SP500.

Sym	(%)Chg	Last	($)Chg
JDSU	9.47%	27.52	2.38
SLV	4.53%	34.93	1.52
NFLX	4.15%	211.8	8.43
RVBD	3.68%	44.5	1.58
LULU	2.09%	77.24	1.58
PCX	1.43%	25.6	0.36
OPEN	0.86%	89.88	0.77
JNPR	0.80%	44.11	0.35
MU	0.78%	11.66	0.09
DBC	0.56%	30.45	0.17
DECK	0.53%	86.7	0.46
AAPL	0.13%	360.01	0.45
BIDU	0.00%	121.85	0
DE	-0.10%	92.54	-0.09
IPI	-0.16%	38.46	-0.06
UNP	-0.19%	95.36	-0.18
$NDX	-0.50%	2,359.96	-11.8
NVDA	-0.53%	20.76	-0.11
SIRI	-0.55%	1.81	-0.01
ARMH	-0.58%	29.22	-0.17
CRM	-0.59%	129.3	-0.77
SMH	-0.63%	36.46	-0.23
AVGO	-0.64%	32.79	-0.21
CRUS	-0.68%	24.81	-0.17
$SPX	-0.74%	1,321.15	-9.82
SWN	-0.95%	37.61	-0.36
BAC	-0.98%	14.13	-0.14
CAT	-1.22%	102.98	-1.27
JPM	-1.30%	45.48	-0.6
IYT	-1.33%	91.48	-1.23
FCX	-1.35%	51.69	-0.71
CSX	-1.50%	74.57	-1.13
POT	-1.57%	61	-0.97
F	-2.10%	14.45	-0.31
GS	-2.24%	160.8	-3.69
MS	-3.10%	28.4	-0.91
XRT	-0.47%	49.11	-0.23

DE added

A few favorable economic reports came out this morning and the market is really moving. The recovery even though it is slow it is happening. The Federal Reserve made some positive comments too. All of our old leaders CRUS, RVBD, CAT are moving in a positive direction. Today I added DE "deere". This is a agricultural play capitalizing on the making of heavy machinery and farming. DE needs to get above the 20 DMA to really confirm the move but in the long run it will move higher, period. The old high was just over 97. Expect DE to hit 100, we just don't when.

A line in the Sand?

Well you haven’t heard from me in about 10 days, the reason why, nothing to do. The averages pulled back because of the Egypt and the Libya crisis. As of tonight the markets are interpreting the oil as concern but one of manageable. Saudi Arabia has stepped up to ensure oil output production. We also found out that the USA has the largest oil reserves in the world, even more that Saudi. So what do we trade now? The short answer is it’s not what we trade but how we deploy money into trades. The SP500 topped at 1350 just a few short days ago. It pulled back and bounced constructively off the 40 DMA. We are in a nice area of buying of some of our old leaders but only to a small starter and comfortable position. The IYT (Transportation) is still under the 20 and 40 DMA. This is of concern because as we talked about it before the TRANSPORTS lead the recovery and currently they are not leading.

Pick some of the old leaders, CRUS, RVBD, CAT, JNPR, LULU and SLV. Purchase in small starter positions. Watch the SP500, NDX, IYT and DBC. We need to see the SP500 break 1350. If it touches it and falls back this could be the making of a double top and very concerning. Pay attention to recent tops in your purchases, if they act like what I just described then you got to be concerned and sell.