[goodtyneguy]

gbarb, I've been on the side lines for a couple of weeks after having a series of losses using the trader method in this market. I will continue to be on the side lines until we get in my opinion a more conducive market to using the trader method. Since I started using the method many of the sectors and stocks in the US have been in very bullish territory but we've had at least one swing to near bear territory. Most stocks were in late stage 2B territory therefore the momentum in most stocks that have been breaking out has not been there and very few have been showing decent volume to follow through. Consequently the failure rate has been high. Many stocks I think are now arguably in either stage 2B, 2B- or stage 3 tops . Even Stan Weinstein said that we were in a challenging market when he recently replied to isatraders email enquiry.

My view is that this type of market action will continue until QE is stopped at some point whether voluntarily or otherwise. We had Bernanke recently saying that he "might" taper QE so the markets drop and just today we have had Fisher, one of the Federal reserve bank officials jawboning the other way and the markets rally hard. Crazy times!

Back to your picks and I would like to point the following with regard to selling short. The following comes from the the book and a from what came to light in one of Weinstein's Financial Sense interviews. Isatrader and I recently had a discussion about it in the private section of the forum but I'm sure he won't mind if I quote him here.

Weinstein on short selling page 230:

The Market – The very important starting point is the overall market trend. While I'm not going to tell you that you can never sell a stock short when the major market trend is bullish, this should be the exception, certainly not the rule. Just as I showed you back in chapter 5 how an outstanding bullish chart pattern could have been bought in the 1973 bear market, so too, an outstanding bearish chart pattern can be sold short even when the overall market trend is favourable.

So he did not advise against short selling when the trend was bullish but he did say that one could become aggressive when, and I think these a relevant to your short picks:-

1) When all market averages are below their 30 week MA's and in stage 4 with other bearish indicators – Then look for sell candidates.

2) Look for vulnerable stocks in a week group especially when overall market is negative

3) The stocks group must be below 30 week MA and RS trending down.

There is an exception to the 30 week MA rule in 1) and 3) above and that is when stocks are in stage 2B-. This is isatraders quote so that you can understand stage 2B- if you are not already au fait with it.

listen to the first interview around the 30 to 33 minutes period of it http://www.financialsense.com/financial-...-territory. He talks about trading oversold 4B- stocks. Tickers ANR, X and one that wasn't yet a 4B- which was AKS, and then he went on to recommend some home builders which were also 4B-. The interview was on 11th November 2011, and all are way below declining 30 week MA's, and I'm sure I've seen a few more over the years in the GTA reports I've read.

I looked at ITB the housebuilders ETF, I do not see it as a week group. The 30 week MA is still rising and unless I am missing something it does not qualify to be in stage 2B- and neither does LEN.

I may have missed something but that's my take on the house builders, I'm sure isatrader when he get's back will have some input on it to clarify things.