You should not be surprised by this weak open. Since first week of August the Market Monitor has been indicating a possibility of a correction. As I have said before tops/corrections are long drawn out efforts. This correction has followed that script perfectly. See my previous posts explaining why this is the most likely scenario. If you are surprised by market action, study Market Breadth, it will help you stay ahead of the curve.
I have extremely low amount at risk and would not hesitate to close positions here.
This market has seen repeated dip buying, so we will see if the dip buyers step in today or not.
See old posts from this month:

What is market breadth telling us
  • A short term top is in the process of forming here. That is my reading and hunch based on MM data and my cumulative trading experience.
  • As indicated in last Market Monitor update the risk of market getting hit was extremely high.
  • If you were slow to act on that signal, you would have watched with stunned disbelief as many of your open positions got hit.
  • I have heard lot of sob stories today, my message is same, which I have been repeating for days here, "if you want to anticipate market turns study and understand market breadth".
  • The Market Monitor is breadth based indicator which I designed after lot of research and thinking and it has saved me tons of dollars.
  • All the long term members will tell you how we avoided the entire vicious bear market due to MM signal.
  • We were out of the market long before the bear savaged account.
  • The MM signal market turn on 17th March and we made lots of money in March, April, and May doing tactical hit and run trading.
  • The reason for hit and run tactic was at that time it was not clear whether this was a real rally or just counter trend bounce. Plus junk was leading the rally.
  • In second phase my strategy was different as I had clearer idea of sectors and stocks. Plus some growth stock were leading.
  • In last couple of days all the MM indicators were approaching their extreme zone and it was time to be cautious.
  • The index yesterday and today may not show much damage, but I am not trading indexes, I am trading individual stocks.
  • You will see lot of damage on individual stocks.
  • There are some big volume reversals in number of stocks which were rallying till now.
  • Just see the bearish EP scan and Bearish EP monthly scan.
  • Such ugly reversals typically happen at turns.
  • At this stage both possibilities exists:
    • another correction followed by a rally
    • or a reversal
  • At this stage we do not know how this correction will grow.
  • Tops take long time so expect lot of attempts at rallies and gap ups and sell offs.
  • It will be volatile for few days or weeks.
  • My strategy is to watch market from sideline for time being, but I will keep my option of getting in to a outstanding EP. But will probably play with beer money.
  • Shorting pre maturely can be trouble. So unless breadth confirms downtrend I will not look at short opportunity.
  • There is still opportunity to make money on long side but for that I would like the extreme MM readings to reverse to normal.

Market Monitor
Market monitor is market breadth
based market timing tool
Current Readings
A short term top being formed
Earnings season currently on
Type IndicatorValueComments
Daily# of stocks up >4% on high volume179
Daily# of stocks down>4% on high volume 289Not much damage.
But below surface ugly reversals.
Primary# of stocks up >25% in a quarter2134
Primary# of stocks down>25% in a quarter296This indicator did its work as intended.
Perfect timing in terms of signal once again.
Secondary # of stocks up> 50% in a month98At extreme level
Secondary # of stocks down>50% in a month1
Secondary # of stocks up>25% in a month705At extreme
Secondary # of stocks down>25% in a month7
# of stocks up>13% in 34 days2723
# of stocks down>13% in 34 days490
MMA+% of stocks in confirmed uptrend73This is in bearish territory.
MMA-% of stocks in confirmed downtrend 11
10 day
#of stocks up> 4% in last 10 days/
#of stocks down>4% in last 10 days
2.09A reading of below .5 on this
will confirm bearish trend.

  • Based on Market Monitor readings, price action in rally leaders, and the action in laggard stocks, a correction is in early stage of development here.
  • Markets will try and make repeated attempt to breakout but a breadth climax happened this week and that has to get resolved.
  • That means two possibilities either a slow grinding sideways move or a series of 500 plus downside days on stocks down 4% or more.
  • The action in laggard stocks like C, AIG, and other financials suggests the second scenario is most likely.
  • When market runs out of good stocks to run, there is a intense set of 3 to 5 days of speculative frenzy in beaten down names, Chinese stocks, heavily shorted stocks, and some random stocks.
  • When pig begin to fly it is time to be cautious.
  • One of the problem with such corrections is the side drama of these speculative stocks can suck you in to staying fully invested and then a big 1000 plus down day on 4% breakouts traps you.
  • I have seen this or very similar movie before.
  • In fact I developed Market Monitor after twice getting caught in such topping process.
  • Twice after building the account by 70 to 80% in the bull phase by being excessively bullish at end I ended up giving up 20 to 30% of that profit when the market turned.
  • That is when I developed Market Monitor as a overall filter to tell me when to be aggressive and when to run to sidelines.
  • In the last 15 or 16 trading days we had a bull market which during normal market conditions would have been 3-4 months bull market.
  • There was no correction during the entire move.
  • Stocks with growth characters and future growth prospect were the leader unlike the first phase of the market where junk was making big moves.
  • Chinese stocks were the early leaders. They have the best financials in the market currently. They started topping out couple of days ago some like UTA, RINO, CGA continued their move. But now look vulnerable. The early leaders like CYOU, NTES, PWRD, SOHU , BIDU, have gone sideways or are churning.
  • Stocks in top 3% by MDT ranking are way overextended and some are showing early signs of reversals.
  • In last 5-6 days there has been a steady increase in number of stocks down 4% on a daily basis. In the beginning of the move they were in double digits, now they are in triple digits daily.
  • So if you look carefully there are signs of distribution and selling in to strength.
  • My personal objective here is to protect profits made last month. That over rides all other convictions. I am ready to go to full cash if I see further weakness.
  • Once i figure out the nature of correction, I can always get fully invested in a jiffy.
  • As of now if you want to play the market, your best bet is short term day trades.
  • But I will still be looking for quality Episodic Pivots with outstanding earnings and catalyst and will still put money to work if I find good EP.
  • One of the things you must mull over and think a lot about is the nature of moves in the market currently.
  • Market moves which take year to happen are happening in weeks.
  • Historically there have been periods where such behavior has happened for some years.
  • In such trading environment, if you are slow to recognize opportunity or market turn or trading pullback based or mean reversion kind of methods,or waiting to add to positions, you are likely to be a toast.

Market Monitor
Market monitor is market breadth
based market timing tool
Current Readings
Market in a rally mode.
Earnings season currently on
Type IndicatorValueComments
Daily# of stocks up >4% on high volume257
Daily# of stocks down>4% on high volume 160
Primary# of stocks up >25% in a quarter2272
Primary# of stocks down>25% in a quarter249Approaching 200 indicates extreme bullishness
Intraday readings were around 230 levels .
Secondary # of stocks up> 50% in a month118At extreme level
Secondary # of stocks down>50% in a month1
Secondary # of stocks up>25% in a month831
Secondary # of stocks down>25% in a month5
# of stocks up>13% in 34 days2855
# of stocks down>13% in 34 days359
MMA+% of stocks in confirmed uptrend74This is in bearish territory.
MMA-% of stocks in confirmed downtrend 10
10 day
#of stocks up> 4% in last 10 days/
#of stocks down>4% in last 10 days

Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.

What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.

How can I become a member?

To sign up go to and follow the sign up process. The site uses Paypal for payment processing.