Everybody Knows it’s a Top

Even I thought the markets had topped three weeks ago, or a least I feared it, and did not want to give back too much of what I had won. I got stopped out of and/or sold everything. I even put on a healthy dose of SPXU and I did it while considering myself a long term investor.

However the markets quickly told me that this was a correction as quality stocks especially Dow stocks began advancing.  Also my canary in a coal mine SPXU was not providing a clear profit signal.

So what do you do? Well I used the opportunity to rebalance and spread my positions out since I was ahead. It felt like it was too soon to flipflop yet again like switch on a micro processor YES/NO/YES/NO/YES/NO. But I felt that the markets kind of tricked me into cash and being short thus I wasn’t going to stay scared AND wrong for long.

Well three weeks later… my QUANTUM and MACRO DOW THEORIES are holding up, by pointing me in the right directions and even helping see through the market’s noise.

So here we are heavy in biotech and 3D printing.

Scottrade20130423

PowerSecure International, Inc.
Beautiful chart note the spike of CONSEC UPDAYS as the stock punched through 7-7.5 pivot. It then rested for 2 months neatly at the 8.75 pivot, before punching through 10 to come to rest at 12.5 followed by the nice pop today.

Also note that the SHANNON signal is getting clearer as the RANDOM WALKS ON PRICE NODES are confirming price.

POWR20130423

Albany Molecular Research, Inc.
Another step to step from one pivot to the next each time the price was driven up on CONSEC UPDAYS. Note the last two CONSEC UPDAYS as the price attains the 5 dollar pivot then the 10 dollar pivot.

Also note that the SHANNON signal is getting clearer as the RANDOM WALKS ON PRICE NODES are confirming price.

AMRI20130423

ISIS Pharmaceuticals, Inc.
This stock behaved perfectly from pivot to pivot note how it tops at 15 then falls to 7.5 (exactly a 50% retracment). Then it regains 15 on two strong spikes of CONSEC UPDAYS.  The stock then blew past the 15 pivot on another CONSEC UPDAY spike before blowing past 20.

Note here that the SHANNON signal was almost noiseless during the first runup but after the 50% shakeout look at how much more incoherent the signal had become. The SHANNON signal did its job perfectly here showing that the market was much less sure this run up which is what the professionals wanted before letting it go higher.

SOME ONE WANTED TO ACCUMULATE MORE STOCK BEFORE LETTING IT RUN UP.

ISIS20130423

Very neat basing around pivot points (heck lets call them strange attractors like in Chaos Theory) the market prices are ping-ponging off the pivot levels. Note the dive down to 3 and then back up bracketed by the spikes in the reddish CONSEC DOWNDAYS  towards 3 dollars and the blue-ish CONSEC UPDAYS spikes away from 3 dollars.

WE CALL THIS NON-RANDOM ACTVITY.

CADX20130423

Pharmacyclics, Inc. and Infinity Pharmaceuticals Inc.

Both of these stocks show what a coherent price pattern is supposed to look like in the SHANNON signal, look at how little noise there is in both stocks until the recent correction. And yes the prices are at first gravitating towards one pivot level, and then being repelled from the next while heading higher and higher.

BY NOW YOU MAY HAVE NOTICED  THAT THERE ARE KEY NUMBERS THAT (ACTIVE/LEADING) STOCKS RESPOND TO AND THAT MY CHARTS ARE CONSTRUCTED TO HIGHLIGHT THEM .

INFI 20130423

PCYC 20130423

ENJOY!!!

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