Wednesday, May 6, 2009

MARKET COMMENTARY (5-07-09)


Alright, ya'll got me. I did sell my soul to the Devil. That's why I am up +28% month-to-date as of today's close, not to mention +55% in April and 142% year-to-date 2009. You think I use technicals for my trading decisions? Wrong. That's just an innocent ruse to hide my sinister involvement with secret societies infiltrating the stock market.

For all the mentally stable people that made money off of my calls, congratulations. These "dollar menu" stocks are cash freakin' cows. I think I've proven that point week after week. Finding the setup is the first step, which is easy to do. However, the timing must be flawless, or you will miss the initial spike. Let's look at three calls I made just today alone:

HGSI was an
imminent breakout call that was executed at 12:52PM at $2.025:

FLOW was also an imminent breakout call that was executed at 2:08PM at $1.889:
TVL was the final imminent breakout call for the day, executed at 2:55PM at $1.73:


My trading philosophy is all about getting the biggest bang for your buck for the least amount of risk in the shortest period of time. Are there more $1-3 plays? Absolutely. I have an entire pipeline full of these monsters ready to "BTFO". However, I am trying not to add any more longs at this point (but I'm sure I will though). I want to ride my existing positions to their fullest extent and then dump them to all the latecomers. That's how this game is played. Either you're early, or you're late. If you miss a breakout, don't chase it. There are plenty of setups out there, so catch the next one.

As for the general market, we really need a pullback now. I did not expect this up move, though I did say 2 days ago that the bears would get screwed. What we are seeing right now is the gradual meat-grinding capitulation of the most stubborn short sellers. Like said many times before, I have only 2 criteria to commit to the short side: 1) exhaustion gap via black-filled bearish gap up, or 2) a major breakdown of -3% or more. If neither of these scenarios take place, then get the fuck out of my way.


I am currently 79% long, 3% short (FAZ), and in 18% cash. My personal holdings are as follows: AHD, BZ, CNO, CNXT, COIN, CPE, EMKR, FEED, FLOW, HGSI, NXG, TVL, WRES. They will be sold off one-by-one when they are ripe for the picking.

On a final note, I received 62 e-mails from random people asking me all sorts of questions. You can stop flooding my inbox by leaving your comments below. The simple answer to all of your questions is "look at the chart". Stop free-riding on me if you can't take 1-2 mins to figure out the entry & exit targets. If you don't know what you are doing when you buy a stock, then you already made a huge mistake.

Off to sacrifice another goat.



9 comments:

Katsu said...

darn it!! i missed your twitter today! I was following too many stocks.. Actually, I was wondering how you monitor your watch lists. Do you set alarm on your watch list or are you keep monitoring same stocks without flipping from stosk to stock. Does it make sense? Sometimes I miss entry point because I am too busy going through other stocks. Do you have any suggestion to keep track watch lists? Thank you!

Katsu said...

oh btw I made the biggest gain for this year after I saw you listed XTXI on the blog! I was also thinking about the stock, but wasn't sure. Thank you John! Im hoping you will do some kind of news letter again...

John C. Lee said...

Great to hear. You aren't the only person that told me (there are 5 others that had the best day of 2009). If you hesitate, you will miss it, then hate yourself for missing it.

you should probably have a core list of about 10-15 stocks to focus on. No more than that.

Anonymous said...

You are laugh out loud funny dude.

Anonymous said...

I have been reading your blog for many moons, and I still have no idea how your trading style works, other than that you pull a lot of demand in behind you from coattail-riders that read your posts.

Don't misunderstand: I like your writing style. It is entertaining...it just isn't very informative.

John C. Lee said...

I disagree 100%.

Anonymous said...

Hi John,

You are having a very good week with these 1 and 2 dollar stocks. I was wondering if you could explain how you found them. what type of scan did you use? Thank you.
Mike

John said...

I also disagree with "anonymous" (no offense), his writing style is awesome and informative. Also I have started sacrificing my neighbors pets and gains r through the roof (jk?) xD

John C. Lee said...

Mike - I look at every chart for stocks between $1-3 with avg. vol of 150K or more. That's about 400-500 charts daily.