3 Waves Up, 5 Waves Down

Trader Talk

The action today was the exact opposite of yesterday where a rally was followed by a sell-off, which was followed by a late-day surge, while today we saw a drop at the open, a rally intra-day, followed by a late-day plunge. Volume was on par with yesterday.

Officially, the NASDAQ fell 0.2% on 2.4 billion shares, while the Dow Industrials dropped 1.8% on NYSE volume of 5.4 billion shares. The leadership profile remains negative, with 103 stocks making new highs versus 225 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. So too continues the bearish trend of five wave sell-offs followed by three-wave partial recovery bounces. Today's action looks like a five wave down move followed by three-waves up topping action. If so, it should be all downhill from here. The economic news showed weaker than expected GDP growth, and weaker than expected unemployment numbers.

The Big Kahuna of the latter lands prior to the open tomorrow, and could be the last straw that opens the selling flood-gates to confirm the super-bearish potential of the Elliott Wave set-up. As trend-followers with major skin in the game, we look forward to the next stock market buy signal, though so far there appears to be little in the way of hope for such bullish nirvana. When that changes we will gladly change our stance from bear to bull. Till then, watch out below....

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

No More Truck Leasing?

Trader Talk

The major stock indexes opened brightly to follow on from yesterday's rally, only to fall hard intra-day, before a late-day recovery bounce helped land another close in the green. Volume was on par with yesterday.

Officially, the NASDAQ advanced 0.4% on 2.3 billion shares, while the Dow Industrials rose 1.6% on NYSE volume of 5.6 billion shares. The leadership profile remains negative, with 120 stocks making new highs versus 225 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. So too continues the bearish trend of five wave sell-offs followed by three-wave partial recovery bounces. Today's action leaves the S&P500 at the Fibonacci 80% points lost during the prior slide level. The bulls are dead in the water while the stock indexes remain below last week's highs, and even if they were able to engineer a breakout above those keys levels, the down-trending 50 day moving averages are moving fast into position to stall such an advance in its infancy.

We saw interesting snippets of information travel across the financial media today that got surprisingly little commentary. The major car companies and major lending companies anounced they will no longer be offering car leases to consumers or businesses. This is due to vehicles at the end of the lease being worth much less than the car companies and lenders thought they would be worth. That leaves the lenders and car companies in yet another deep hole. The current plan to stop car leases altogether seems to us to radically change the car buying and overall economic landscape. Consumers commonly take on three types of debt. The largest debt being used to buy a home. The next largest to purchase or lease a car. The next largest revolving credit card debt.

The first two of them - houses and now cars - have essentially bankrupted many big time lenders and players involved the business of lending to consumers for those big item purchases that are the cornerstone of the American Dream. One wonders how the car companies will deal with no car leasing business, or even how they can survive taking another hit as leased cars already out on the streets get traded in for less than they are worth as the lease agreement expires. One also wonders when credit card debt - which is the last bastion of consumer credit still standing - also takes a hit.

Hard to imagine that this massive financial instrument can survive unscathed from the credit bubble collapse when the other two big sectors of consumer borrowing have taken such a beating. While the financial media seemed to ignore today's news on car leasing troubles, we believe it is simply a matter of time before the headlines are filled once again with the grim reality that the big players in the debt financing business have taken on more than they can chew. Needless to say, we remain bearish in-line with our trend indicators.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Still a Bear Market

Trader Talk

The major stock indexes were down 2% yesterday so of course today they were up a similar amount, with such volatility no doubt good for the business of anti-stomach ulcer drug makers. Officially, the NASDAQ advanced 2.5% on 2.3 billion shares, while the Dow Industrials rose 2.4% on NYSE volume of 5.4 billion shares. The leadership profile remains negative, with 80 stocks making new highs versus 233 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. As trend followers we do not need to be able to predict the markets to make money, and certainly no one can predict stock market turns and trends with any high degree of success over the long term. With that said, here's what we believe to be the higher probability plays going forward. The first is based on Elliott Wave and our experience of the breakdown/pullback historical pattern of expectation. That says since the S&P500 fell in five clear waves over four days prior to today's bounce, and today the S&P500 shows a Fibonacci 50% recovery of points lost during the prior slide, what should follow very soon is a continuation of the collapse, all as part of something very bad indeed for those long the market.

The second most likely outcome is based on our experience of technical analysis, which says those 50 day MAs shown in the charts below look mightly enticing to the bulls, and it wouldn't be a major surprise to see those technical-lines-in-the-sand be the final resting place for this counter-trend advance within an on-going bear market. We have seen no sign yet that the stock market wants to flip to bull mode, and we remain very cautious until the investment ducks start to turn for real. The next down move should be much more scary than we have seen so far during this bear, and we believe strongly that it remains a question of when the next down-leg of bear starts, rather than if.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Lower Lows & Lower Highs

Trader Talk

The major stock indexes took it on the chin once again today, with the NASDAQ falling 2.0% on 2.0 billion shares, while the Dow Industrials dropped 2.1% on NYSE volume of 4.3 billion shares. The leadership profile remains negative, with 71 stocks making new highs versus 240 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. The economic news remains grim, and can only be expected to deteriorate going forward. The Dow Industrials (chart on left below) came close to touching their 50 day moving average a couple of weeks ago, and such resistance points often provide the death sentance to bear market rallies. While one day popping rally days can be expected to pop up from time to time, we expect the red ink bloodletting to pick up steam as the weeks going forward turn into months of bear misery.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Weekly Trend and Trade Review

Trader Talk

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading indicator. The accumulation/distribution profile remains negative, with a failure of the second 2%+ high volume follow-through advance needed to confirm a new buy signal from this very important trend confirming indicator. The leadership profile remains bearish, with Friday's close yielding 98 stocks making new 52 week highs versus 236 stocks making new 52 week lows.

The 4% rule has turned positive, confirmed with bullish Federal Reserve policy. The VXO volatility indicator closed the week at 24.1, showing some lessening of fear, and remains contrarian bearish. The primary Elliott wave count continues to suggest a wave 3 melt-down run remains underway, with the current wave count wave (ii) of Wave 3, and an out-right crash in the wave (iii) of 3 should land in the non-too-distant future as the wave (ii) counter-trend push exhausts itself.

Traditional seasonal trends have us looking for a difficult third quarter for the bulls after a modest summer rally attempt stalls, while the Presidential cycle remains bullish for the remainder of 2008. The Benner-Fibonacci cycle will remain bullish until 2010, though this prolonged time period may include one or more cyclical bear phases. The AlphaKing combination cycle sees a bear market slump running all the way into mid-December when the next major turn-date is slated to land.

Summary:

While the rally off last week's near crashing lows has been swift, the internal technical set-up appears to confirm the move nothing more than part of a counter-trend rally within an ongoing bear market. The stock indexes have so far retraced a Fibonacci 38% of points lost in the wave 1 collapse, which is the first potential stopping point for Elliott wave 2s. The 50% and 63% Fibonacci retracement levels are near the 50 day moving averages for the stock indexes, which remain the most likely stopping points for this advance. What should follow - once the wave (ii) ends for real (either here or at the 50 day MAs) - is a bona-fide melt-down run and probable crash in wave (iii) of wave 3. The current rally - which should end very modest, if it hasn't ended already - should be the last chance to exit longs and enter shorts ahead of the pending collapse. Things should move very quickly to the downside once wave (ii) has ended, so any portfolio pruning should be done sooner rather than later, as later may never happen. Capital preservation remains the key to the next few tricky months.

Kevin Wilde, Chief Trading Strategist, AlphaKing.com

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Expect More Stock Market Selling Next

Trader Talk

The major stock indexes took it on the chin once again today as news on housing and car sales slapped traders awake to the reality the economy is fast headed toward a recessionary day of reckoning.

Officially, the NASDAQ fell 2% on 2.6% billion shares, while the Dow Industrials dropped 2.4% on NYSE volume of 6 billion shares. The leadership profile remains negative, with 89 stocks making new highs versus 245 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. The economic news remains grim, as both home sales and home prices continue to plummet. Ford Motor Co. also came out with news they are burning through $1 billion each month as sales of SUVs and trucks continue to collapse. That puts the American car manufacturing icon in jeopardy of running out of money as early as next year.

Technically, we are open to the possibility that the bounce off last week's near-crashing lows has further to run to the upside, especially since counter-trend corrective moves usually come in a three-step format. Thus yesterday's high may very be the first of that three, with the pullback today potentially part of the middle second, before a continuation of the rally would be expected to land to complete the entire corrective move within an on-going bear market. However, an outright crash going forward is not out of the question. Either way we expect a continuation and acceleration of the red ink over the next few days - at least - and we will evaluate the internal technical action for signs of which path is the more likely going forward, adjusting our portfolios accordingly. Such volatility is what bear markets are all about.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Interview with AlphaKing.com Founder

Nov 11, 2006 12:23 ET

Superstar Stock Picker Shares His Secrets and Top Stock Picks

CHARLOTTE, VA -- (MARKET WIRE) -- November 11, 2006 -- We're talking with Kevin Wilde, a six-year investment superstar at Marketocracy.com, who has a stunning stock-picking performance record. The Five Year Rankings, through Sept. 2006, just came out and Kevin placed fourth out of 70,000 investors. "Kevin, how were you able to beat 70,000 investors in the stock market competition run by Marketocracy.com? That seems an incredible feat!"

The simple reason for my success is having a strategy designed to outperform during all market cycles -- up, down, sideways -- one that told me when to buy, hold, or sell to lock in profits. I had my AlphaKing strategy, my systematic approach, and my competitors didn't.

"If it was designed to outperform in all market environments, how did it do in the grueling bear market years from 2000 to 2003?"

The AlphaKing strategy shot to the top of the rankings at Marketocracy.com, and my personal account made money each and every year, despite the bursting of the stock market bubble that caught so many people off guard. And, I did it long only, without shorting any stocks or indexes.

"But how were you able to thrive when so many others lost their shirts?"

I recognized that stocks can go up incredible amounts during the good times, only to retrace all of those gains and then some when the tide turns, often with little reason for the rise, let alone for the fall. So, when building the AlphaKing System, during my research, I looked for ways to recognize when a stock or stock market had peaked, so that I could move into stocks on the rise rather than face the misery of watching profits disappear and turn into losses.

"It sounds like you use some sort of technical analysis to time your moves into and out of stocks."

AlphaKing uses fundamental analysis to screen for those superior stocks that offer the best chance of going up during favorable trends, while using technical analysis to highlight when to buy, hold, and sell these investment gems.

"What indicator do you use to time the entries and exits?"

Of all the findings of the AlphaKing Research Project, the answer to this question is probably the most important of all, though the answer itself is more complex than simply saying choose this or that as the best technical indicator. I had to build my own technical indicator that I call the AlphaKing Trading Signal, since none of the commonly available indicators worked well enough for what I needed. The stock market never goes straight up, then straight down, then straight up again, so it is vital that whatever technical entry and exit system a trader uses is robust enough to be able to handle the churning periods of indecision. It is imperative that traders, portfolio managers, end up with a reasonable profit after a stock or stock market has completed a full bull and bear corrective cycle. The AlphaKing Trading Signal is an amalgamation of trading rules I have found to most effectively handle the complex trading patterns stocks and stock markets undergo in real time.

"Do you charge for access to this indicator at your website?"

Actually, no. You can access all trading signals on the 4,300 most popular stocks for free at http://alphaking.com/ along with a graphical snapshot rating of each company's most important fundamentals. The system doesn't own any stocks when the AlphaKing Trading Indicator is in sell position.

"So the trading signals and fundamental ratings are free on the stocks you can get data on, but you do something different in the portfolios, which are available by subscription. How do you select the stocks that go into the 8-position long or short group, and in the 25-stock long-only small cap group? Do you still use a system, or is there subjective reasoning involved?"

It's a combination of both. There are 4 basic questions that need to be answered before I buy a stock: Market Direction, Company Fundamentals, Short Term Chart, and Long Term Chart.

Market direction is answered by the AlphaKing Trading Indicator. Next, I seek companies with great fundamentals using a quantitative process which takes into account superior growth, value, financial health, and institutional support. In the short term chart, I look for stocks rallying off of strong short term support near longer term moving averages, with favorable volume trends. In the long term chart, I want stocks that are rallying off of longer term support, after a prolonged, multi-year sideways basing process. What is most interesting is the double bottom formation. Fundamentals on the double bottom retest are usually the determining factor whether such support will hold. Stocks with strengthening earnings and good value as the stock is forced to endure a large double bottom retest are apt to be the next stock market leaders during the next rally phases, provided the companies are able to deliver on their earnings forecasts, and the stock market stays clear of any major reversal signal.

"So what is the best way for the individual investor to take advantage of AlphaKing?"

AlphaKing aims to help people make money over time, and I believe the charts, trading signals, model portfolios, and daily summary published at http://alphaking.com/ are a giant step forward for the individual investor. They should use the information in any way they feel it is of help to them. I manage my own money using the system, timing entry and exit of my 401K using the timing signals of the Index portfolio, and my individual stock picks in-line with the GrQ/8 Hedge Fund, and GrQ/25 Small Cap portfolios. Some may want to use the trading signals and fundamental ratings shown in the free chart section as a second opinion or to time buys and sells in stocks of interest.

Very few financial websites provide trackable performance to measure the value of their services. I believe that investors and traders should target only those investment elements and stock selection methods that have proven to have outperformance value over the long term, and how can they possibly do that effectively if there is no performance data they can track? I update the performances of our portfolios each day on the Performance and Portfolios pages, as well as highlighting returns for every trade since 2000 in all 4300 stocks in our database.

"Do you offer services to manage individual investor money?"

I currently do not, though I do plan to open a hedge fund in the future designed along the lines of the AlphaKing 100 index (which you can read more about on the Performance page at alphaking.com). I have partnered with the online stock broker, FolioFn.com, so that investors can trade the larger AlphaKing portfolios for a one-time annual commission of $199, which is a savings of thousands of dollars each year in trading commissions compared to the discount brokers. Individuals have to enter the trades themselves, though FolioFn makes this very easy. The goal of http://alphaking.com is to make making money in stocks as painless and profitable as possible.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Only One Accumulation Day, Need Two

Trader Talk

The major stock indexes traded back and forth the unchanged level once again today, with modest gains going into the close run on higher volume. Officially, the NASDAQ advanced 1% on 2.8% billion shares, while the Dow Industrials rose 0.3% on NYSE volume of 6.5 billion. The leadership profile remains negative, with 133 stocks making new highs versus 187 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, and today's action changes nothing in that regards. Both the S&P500 and Dow Industrials smashed below their March lows a few weeks ago - in five waves - and have now rallied back to that former support level in three waves, which suggests that current levels should provide formidable resistance to any attempts at continuing the advance, and thus lower prices lay ahead. We are trend followers who follow the big picture based on historical cycles and signals from major technical indicators, and all of that continues to suggest our bearish view is correct no matter the amount of intra-day, daily, weekly, or monthly volatility.

We experienced one 2%+ mega volume accumulation day advance late last week, and the bulls are dead in the water so long as such rally days land in singular form, rather than the double follow-through variety that signals a change in trend is in progress. Breakdown followed by pullbacks is the normal fare of bear markets, and the current technical set-up suggests that is what we have been experiencing over the past week or so.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.
How to Profit in Bull & Bear Markets
For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Next Move Down for Stock Market

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with modest gains going into the close run on higher volume. The leadership profile remains negative, with 104 stocks making new highs versus 219 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, and today's action changes nothing in that regards. Indeed, the push into the green going into the close today looks like the finishing touches being added to close the counter-trend rally that began late last week. It should be all downhill from here.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Ending Soon: Stock Market Bear Market Rally

Trader Talk

Sellers jumped on board positive early action today, with the modest red ink going into the close for the major stock indexes run on lower volume than we experienced on Friday. The leadership profile remains negative, with 70 stocks making new highs versus 198 stocks making new lows.

The short term momentum oscillators have turned negative once again, confirming the bearish stance of the AlphaKing Trading Indicator. We have new trades below to add to our short exposure ahead of an expected move to new lows.

The overall pattern remains solidly bearish, with every sell-off running in five waves and every bounce in three, all absent any sign of a capitulation spike down and corresponding up-spike in fear for the VIX. The rally last week has offered a great opportunity to add to short positions, and that is exactly what we are doing at this juncture.

The action today that matters landed after hours, with American Express and Apple both falling hard post earnings releases, on the backs of news that signals a struggling consumer resulted in both lower retails sales and deteriorating credit quality. In short: consumers can't pay their bills, thus they can't be expected to buy retail luxuries such as I-Phones and Plasma TVs. The technical set-up argues very strongly for a smash below last week's lows for the stock indexes, and a bona-fide crash may very well develop from that position. Time to batten down the hatches...

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Caution! Plunge Protection Team at Work

The short term momentum oscillators are positive, in contrast with the bearish stance of the AlphaKing Trading indicator. The accumulation/distribution profile remains negative, confirmed with a bearish leadership profile, with Friday's close yielding 86 stocks making new 52 week highs versus 246 stocks making new 52 week lows.

The 4% rule remains negative, while Federal Reserve policy remains bullish. The VXO volatility indicator closed the week at 25.5, showing some deceleration in fear, though well shy of anything that would signal the sell-off has suffered a capitulation needed to signal a turn positive. The primary Elliott wave count continues to suggest a wave 3 melt-down run is underway, with the current wave count wave (i) of Wave 3, though an out-right crash at this point is not out of the question.

Traditional seasonal trends have us looking for a difficult third quarter for the bulls after a modest summer rally attempt stalls, while the Presidential cycle remains bullish for the remainder of 2008. The Benner-Fibonacci cycle will remain bullish until 2010, though this prolonged time period may include one or more cyclical bear phases. The AlphaKing combination cycle sees a bear market slump running all the way into mid-December when the next major turn-date is slated to land.

It was a wild week in the stock market, with total volume just a bit higher than last week, and one accumulation day. We don't have the statistics yet, but it sure looked like some major short-covering was going on, as the Plunge Protection Team, with all the heavy hitters out trying to forestall a crash, and finally words from the SEC that they're going to crack down on naked short-selling. While we applaud the new enforcement promises, there is no credible evidence that it will keep stocks from falling. We expect the S & P 500 Index to break below 1200, with 1150 our target, to be followed by a larger, sideways churn area.

Chief Trading Strategist Kevin Wilde returns from vacation next week.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Ugly After-Hours Session for the QQQQ

The major stock indexes zig-zagged higher today, the NASDAQ gaining 1.2% on 2.6
billion shares as the Dow Industrials rose 1.85% on 7.3 billion. The Leadership
profile is bearish, but the new lows list has contracted dramatically in this 3-day
rally, today posting 89 new highs and 271 new lows.

The short term momentum oscillators have turned positive, contradicting the bearish
stance of the AlphaKing Trading Indicator. We have no new trades at this time.

It sure looks like the SEC has put the fear of God into the naked short-sellers
who had really piled into financial and homebuilding stocks to record highs. Monday
July 21 is judgment day, the start of the new enforcement of an old rule. Traders
do not want to worry about scrambling to find shares to borrow by the settlement
dates. The stock indexes continue to map out in near-perfect bear market pattern,
and with many big earnings releases after the close today - GOOG, MSFT, IBM - and
the reactions to them after hours, the Nasdaq 100 etf fell hard to below its
lowest trade of the regular session. Things don't look rosy for the bulls here,
and we eagerly anticipate Monday's trade in the dreary homebuilding and financial
stocks.

Chief Trading Strategist Kevin Wilde returns from vacation next week.
For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Goodbye Naked Short-Selling!

Trader Talk

The major stock indexes enjoyed a big rally today. The NASDAQ rose 3.1% on 2.5 billion shares and the Dow Industrials gained 2.5% on NYSE volume of 6.7 billion shares. The Leadership profile improved somewhat, still just 73 new 52-week highs as new lows dropped to 615, still quite negative.

The short term momentum oscillators are still negative, barely, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

Positive news from Wells Fargo this morning was the initial catalyst that drove the financials much higher today (on lower volume than yesterday's dip) as well as more testimony from Federal Reserve Chairman Ben Bernanke, who said Fannie Mae and Freddie Mac are well capitalized. Bear market rallies are sharp but short, and we're not convinced today's action in the market was anything to get excited about. In fact, it wouldn't surprise us if this move turns out to be just about over here.

1150 is our short term target for the S&P 500, where we plan to lighten up on our short positions, which should be followed by a larger sideways churn area. There is a slight possibility of a big drop from the 1150 area. The VXO and VIX fear indicators sank much today, and the Bulls in the AAII survey were only at 27% last week, while short interest in the NYSE was at record levels, much of it in the financials and homebuilding groups. SEC Chairman Chris Cox was on TV again talking about naked short selling, and the new enforcement policy, which may have had some effect. He explained that the rules will be enforced immediately in FNM and FRE, plus several major banks, but the SEC will not be concerned with past instances in which short-selling without borrowing shares occured. We're pleased that the SEC laid out a broader plan to later include all stocks. Short selling provides added liquidity and is not something evil. Naked short selling is illegal. Cox also said the SEC now has the tools to ferret out those spreading false rumors in order to benefit their positions, and they will use them. We applaud these long overdue changes.

Chief Trading Strategist Kevin Wilde returns from vacation next week.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Wild Stock Market, an end to Naked Short-Selling?

Trader Talk

Results were mixed in the major stock indexes today. The NASDAQ gained 0.1% on 2.8 billion shares as the Dow Industrials lost 0.8% on NYSE volume of 7.3 billion shares. The Leadership profile is extremely negative with 36 new highs and 1,820 new lows - 1,272 of them in the NYSE alone.

The short term momentum oscillators are negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The Bigwigs talked with Congress today, Paulson, Cox, and Bernanke, while President Bush spoke to the public separately. Serious problems with the U. S. financial system, plus it's an election year. Christopher Cox of the SEC spoke about naked short-selling, a practice in which shares are sold short without borrowing them first. Finally, the SEC has decided to enforce its own rules. We applaud this change, but we don't think for one minute that it will stop stocks from falling. The major indexes rallied hard on the news, only to give much of it back by the close.

We believe the market will fall more before any significant counter-trend rally ensues, so we're holding our short positions for now, and still plan to cover some or all on a capitulation meltdown, and add shorts after any counter-trend rally ends.

Chief Trading Strategist Kevin Wilde will return from vacation next week.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Stock Market Selloff Continues, No Relief in Sight

Trader Talk

The major stock indexes traded lower today, with the NASDAQ dipping 1.2% on 2.1 billion shares, and the Dow Industrials slipping 0.4% on NYSE volume of 5.4 billion shares. The leadership profile continues very negative with only 77 stocks making new 52-week highs, and 1053 posting new lows.

The short term momentum oscillators are negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

Futures were up strong early this morning on news that the Fed will support Freddie Mac and Fannie Mae, which hold 50% of all U. S. mortgages, but the higher open quickly faded, as the reality of the dour situation in financial stocks set in. Big takeover news no longer buoys the market. The market is very oversold, but investors understand that it can stay oversold for a long time. We see no reason to cover our short positions now, and we'll add to them on a decent rally that meets our upside counter- trend rally targets. We may cover our shorts on a big selloff from these levels, depending on our market indicators.

Chief Trading Strategist Kevin Wilde will return from vacation next week.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Serious, Long, Bear Market Underway

Trader Talk

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading indicator. The accumulation/distribution profile remains negative, confirmed with a VERY bearish leadership profile, with Friday's close yielding 77 stocks making new 52 week highs versus 1211 stocks making new 52 week lows.

The 4% rule remains negative, while Federal Reserve policy remains bullish. The VXO volatility indicator closed the week at 29.9, showing some acceleration in fear, though well shy of anything that would signal the sell-off has suffered a capitulation needed to signal a turn positive. The primary Elliott wave count continues to suggest a wave 3 melt-down run is underway, with the current wave count wave (i) of Wave 3, though an out-right crash at this point is not out of the question.

Traditional seasonal trends have us looking for a difficult third quarter for the bulls after a modest summer rally attempt stalls, while the Presidential cycle remains bullish for the remainder of 2008. The Benner-Fibonacci cycle will remain bullish until 2010, though this prolonged time period may include one or more cyclical bear phases. The AlphaKing combination cycle sees a bear market slump running all the way into mid-December when the next major turn-date is slated to land.

Summary:

The technical ducks all continue to confirm a major bear down-leg remains underway, with an acceleration of the selling landing this week. The 2002 lows remain the downside target for this leg of the bear. There remains zero sign yet of the heightened capitulation selling to signal a reversal to the upside is slated to land anytime soon. All major stock indexes continue the pattern of lower high and lower lows, with Friday suffering yet another high volume distribution day. The fundamentals continue to show consumers hanging on by a thread now the rebate checks have been spent, while at the same time confirming the credit bubble implosion continues to pick up steam, with Fannie Mae and Freddie Mac this week's disasters. While we can expect some volatility of trading as the FED, Treasury, and Wall Street Plunge Protection Team try to prop up the collapsing markets, the numbers of losses involved, and depth of the leveraged debt problems, are simply too large to prevent the bear market from eventually turning nasty. The stock market is severely oversold, and thus due a bounce, though there have been many times in history where this set-up continued with the downtrend that led to a real bonafide capitulation melt-down without any major bounce landing. When the technicals show some signs of a washout of the bulls, or indeed some sign of buy interest from traders and investors, we will change our stance. But so far all investment ducks point in the same direction: WAY DOWN. Be aware of, and prepared for, a genuine collapse going forward. Look to take profits on shorts on any capitulation melt-down, and look to add to short positions on any rally attempt, especially those that touch the 20 or 50 day MAs.

Kevin Wilde, Chief Trading Strategist, AlphaKing.com

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

No Tradable Bottom Yet

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with the NASDAQ advancing 1.0% on 2.6 billion shares, while the Dow Industrials rose 0.7% on NYSE volume of 5.2 billion shares. The leadership profile remains very negative, with 55 stocks making new highs versus 801 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with every sell-off running in five waves and every bounce in three, all absent any sign of a capitulation spike down and corresponding up-spike in fear for the VIX, which suggests no meaningful or tradable bottom has been reached yet. Speculation in commodities remains high, with investor sentiment remaining ridiculously bullish, and thus that trend is destined for a hard fall somewhere around here. We do expect a summer rally of sorts for the stock market - once a capitulation low is reached - though an outright crash is not out of the question. What walks and talks like a duck is best called a duck until proven otherwise.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Stock Market Crash Not out of the Question

Trader Talk

The major stock indexes suffered another pummeling today, reversing yesterday's rally gains - and then some - with volume a tad lighter than yesterday.

Officially, the NASDAQ fell 2.3% on 2.6 billion shares, while the Dow Industrials dropped 2.1% on NYSE volume of 5.2 billion shares. The leadership profile remains very negative, with 63 stocks making new highs versus 449 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, and the main question when and how will this portion of the slide end? Our best technical guess - based on past bear patterns - suggests we are headed for some of kind scary drop below recent support, and that swoon either reverses very quickly on a big spike in the VIX, or, barring such a spike of investor fear landing to help save the day, the stock indexes suffer some kind of melt-down crash, perhaps a bona-fide scary one destined for the history books. Hard down and up before a few weeks of sideways churn is the more probable of the two, though a 1987-style running melt-down is certainly very possible.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Nothing but a Bear Market Rally

Trader Talk
The major stock indexes traded back and forth the unchanged level today, before a late-day rally surge pushed the indexes solidly into the green by the close. Volume was heavier than yesterday.

Officially, the NASDAQ advanced 2.3% on 2.5 billion shares, while the Dow Industrials rose 1.4% on NYSE volume of 6.1 billion shares. The leadership profile remains very negative, with 52 stocks making new highs versus 806 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The trading action today changes nothing with the overall technical set-up, which remains solidly bearish. We plan to add to our short positions on any continuation of the rally, though bear market counter-trend moves usually come to a quick end. The 20 day MA for the stock indexes is our expected entry point for new shorts.
For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Stock Market Due for a Little Bounce

Trader Talk

The major stock indexes suffered a volatile whipsaw day today as sellers jumped on board positive early action, driving the stock indexes hard into the red, only to see a late-day rally attempt stem some of the lost red ink. Volume was heavy, with most stocks doing much worse than the stock indexes.

Officially, the NASDAQ fell 0.1% on 2.4 billion shares, while the Dow Industrials dropped 0.5% on NYSE volume of 5.3 billion shares. The leadership profile remains VERY negative, with 43 stocks making new highs versus 1,137 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The S&P500 continues to smash through the March low, with zero sign yet that the sell wave is set to end anytime soon. The MACD turning positive from this position would be one clear sign that the breakdown was a fake out before a snap-back rally would launch a new bull phase, though that indicator also continues to trend down in classic bear fashion. We are oversold, and due a bounce, though investor sentiment remains stubbornly complacent, with the VIX closing no where near the 40ish level that indicates the necessary fear is present for a bull turn to land. The VIX spikes to such levels at important bottoms as investors race to buy protection from further losses in the put option market. Such a spike happened around the March lows that lead to a two month advance, and so far such fear has yet to materialize. Which means the capitulation crash - real or fake-out - has yet to land. A bona-fide crash is not out of the question from this position.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Major Bear Market Downleg Underway

Trader Talk

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading indicator. The accumulation/distribution profile remains negative, confirmed with a very bearish leadership profile, with Friday's close yielding 44 stocks making new 52 week highs versus 900 stocks making new 52 week lows.

The 4% rule remains negative, while Federal Reserve policy remains bullish. The VXO volatility indicator closed the week at 26.4, showing some acceleration in fear, though well shy of anything that would signal the sell-off has suffered a capitulation needed to signal a turn positive. The primary Elliott wave count continues to suggest a wave 3 melt-down run is underway, with the current wave count wave (i) of Wave 3, though an out-right crash at this point is not out of the question.

Traditional seasonal trends have us looking for a difficult third quarter for the bulls, while the Presidential cycle remains bullish for the remainder of 2008. The Benner-Fibonacci cycle will remain bullish until 2010, though this prolonged time period may include one or more cyclical bear phases. The AlphaKing combination cycle sees a bear market slump running all the way into mid-December when the next major turn-date is slated to land.

Summary:

The technical ducks all continue to confirm a major bear down-leg is underway, with an acceleration of the selling expected to land soon, with the 2002 lows the target for the stock indexes for this leg of the great bear. Such prolonged and deep bear phases do not end until we see some form of capitulation selling that results in a rapid melt-down. Sentiment continues to remain complacently bullish, thus no major rebound rally or change in trend from bull to bear is slated to land anytime soon. The S&P500 broke below the March lows, making a new 52 week low in the process, confirming the Dow Industrial's breakdown run of a couple of weeks ago. Low volume on rallies, high volume on sell offs, an expanding number of stocks making new lows, the stocks indexes joining that expanding list of new lows, confirm we are in an on-going bear market of some significance. When the technicals show some signs of a wash-out of the bulls, or indeed some sign of buy interest from traders and investors, we will change our stance. But so far all investment ducks point in the same direction. Be wary of, and prepared for, a genuine collapse going forward, as we believe strongly that we've seen nothing yet, despite the stock indexes being down very hard on the year.

Kevin Wilde, Chief Trading Strategist, AlphaKing.com
For Free charts with trading signals and fundamentals ratings, visit AlphaKing

March Lows Won't Hold-No Rally Soon

Trader Talk
Sellers jumped on board positive early action today, driving the major stock indexes hard into the red by the close, with volume a tad lighter than yesterday.

Officially, the NASDAQ fell 2.3% on 2.4 billion shares, while the Dow Industrials dropped 1.5% on NYSE volume of 5.3 billion shares. The leadership profile remains very negative, with 106 stocks making new highs versus 816 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The S&P500 continues to flirt with its March intra-day low around 1260, closing just 1.5 points above that must-hold-if-we-are-to-avoid-a-crash level. This fits the usual bear path that suggests a retest of the 2002 lows is in play. What we should see here is a hard breach of current levels that runs for a while, before a snap-back rebound to broken support lands. And from there the great bear slide would resume. So perhaps one more week of hard selling to be followed by a one to two week rally before the crash run resumes. An out-right running crash from this position is not out of the question, so do not look at any potential for a rebound rally with the view of making some profits on the long side, rather continue to be heavily invested short through-out this process, and look to add to those short positions on any rally.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Stock Market Forecasting Bad Recession

AlphaKing.com
Daily Trend and Trade Review	July 1, 2008
Trader Talk The major stock indexes traded back and forth the unchanged level today, with the mildly positive close run on higher volume. Officially, the NASDAQ advanced 0.5% on 2.7 billion shares, while the Dow Industrials rose 0.3% on NYSE volume of 5.9 billion shares. The leadership profile remains very negative, with 77 stocks making new highs versus 1154 stocks making new lows. The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time. The stock market fell to new lows today, seeing the S&P500 touch its March intraday bottom, before a late-day rally saved the day for the bulls. The reaction tomorrow is going to be very interesting. A hard rally from such support may open the door to a larger bounce, along the lines of the one to two week thing we mentioned yesterday. No follow-through from today's rebound, and the selling flood-gates should open for real as the March lows get taken out for the S&P500, as it did a week or so ago for the Dow Industrials. There are no signs that the bearish stance of our indicators is in danger of being proven wrong. As trend-followers, who would just love to fatten our 401Ks going forward from any major bottom here, being proven wrong this time around would be met with a nice smile. We believe the larger picture is of recession that has the potential to turn into a depression, thus a return to the financial world of complacent money-debt-spin-around as we used to know it would be just fine with us. The AK Trading Indicator was designed to make big money when-ever a big move landed, and folks we have a big move headed our way in a hurry. Up, would be fine with us, though it's more likely to be its evil money-destroying twin. Kevin Wilde, Chief Trading Strategist AlphaKing.com. For Free charts with trading signals and fundamentals ratings, visit AlphaKing