TCM Notes : 4/15/09

• Tuesday's session gave us a distribution day for all the major indexes. That gives us 2 for the S&P500 and DOW / 1 for the Nasdaq. IBD says 5 to 6 distribution days tend to give way to a market correction.
• Keeping with Investor's Business Daily founder Bill O'neil has a new book coming out in June that the first 100 pages are charts of the biggest winners. Too many people are still not using the charts. This is why somebody skilled in technicals and fundamentals can gain an edge in the market. 21min interview with O'neil in the IBD TV section of www.investors.com
• Jesse Livermore said there are two emotions in the market : Hope and Fear. "People always hope when they should fear, and they fear when they should hope." This parallels Buffett's "Be fearful when other's are greedy, and become greedy when other's are fearful."
• Once again those secondary education stocks ran counter trend to the market Tuesday. Which really hammers home the fact that these stocks are going to tank when the market truly recovers. Analysts still clanging the pans together for the "recession proof trade." They will prove yet again to be losers for their clients.
• HAPPY 35th to my brother!!! The check is in the mail!!!
• The tax man cometh, and he left his friend Death behind for now. A refund for me!
• RGR and SWHC still near their highs. 60 Minutes had another gun segment recently. Dealers in the interview were noting that some models are up 100% in price YoY. This has reversed earnings from negative to positive in RGR. The market is fast to price it all in, so I wonder if they are moving to far too fast. Both still above the 20dma as the volume / price moves the past 2 months are evidence of big money pushing in. Margins could stay high for these guys as the "fear" of losing guns still makes it way across the masses.
• O'neil also thinks the market is more like 1938 which saw a 62% gain. However, it led straight into WWII. He was not implying that's where this was all going, but rather pointing out that fact. Uh, thanks I guess? Yeeesh.
• Since my notes are IBD centric today.....one more thing. Their research shows that winning stocks seldom get 23% above their 10dma. So keep that in mind when you see something go parabolic.
• DNDN - while it was just provenge data that was better they are still a long way from being FDA approved. They still have another trial. My fault in not flagging this one as the options action on Monday was flagged to the out of the money calls being bought on the ask heavily all day. 137% pop in the equity and some of the options saw 800% moves. Now that's a squeeze! This goes to show that selling out of the money calls to collect "easy money" in an expiration week can prove to be fatal if you are not in the know.