Leading Indicator Stocks Sucking

I went cash in my accounts for two main reasons. The first is that I’m transferring to Scottrade. Supposedly it has the best all-around service and features in the discount broker industry. My old Datek got swallowed up by AmeriTrade, which blows. E*Trade gives you IPO shares but there’s not many hot IPOs and it’s awfully bloated.

I don’t have much of an opinion of Scottrade so far. Their Java client seems kind of poor. Their attempt to make branches that you can walk into (my local one is an hour away in downtown Nashville) seems overly costly but I guess they want to portray themselves as a personable broker. That seems kind of self-deceiving though because a broker’s job is to sell you services and to sell you stock that the company’s traders are trying to dump. I thought discount brokers got so successful because they tossed out all the sheeple fleecing of Wall Street. Oh well. We’ll see how it goes.

I wanted to cycle out of my Vanguard 500 for my Roth. While it is the best fund to be in if you just want to earn what the market makes, while taking advantage of the lowest fees around, I think I might be better stock-picking or going into international funds (which have a disadvantage of high fees). I also wanted to trade some money I made from deployment.

Right now the indices are not that far off their multi-year highs. I’m a little worried though because I have always thought that certain hype stocks will lead each bull run by a time period of perhaps a few weeks. The crazy stocks that make their runs rally a lot, and eventually the rest of the market catches the fever. Eventually those stocks’ rallies begin to fail while the rest of the market tops out. If you look at these charts, you’ll see that perhaps this will happen again.

Here’s the most popular hype stock right now, Google. You can see that it’s failed its 50dma but bounced off its 200dma, so its long-term trend is still okay.

Google (GOOG)

Perhaps the second most popular stock is Apple. But it’s stalling at its 50dma and could go test its 200dma.

Apple (AAPL)

Whole Foods made big news by going above and beyond in purchasing wind energy credits last month. It’s a darling. And it sells good food. Its stock is suffering though, having broken its 200dma, a serious problem.

Whole Foods (WFMI)

And finally, here’s my new darling, Nintendo, running away without me! (my money is still in transit)

Nintendo (NTDOY.PK)

The NASDAQ itself is stuck in a triangle pattern. TraderMike has covered its chart better than me. If the past is any indication, the NASDAQ will begin to fail and correct. I don’t expect the correction to be very bad. I just hope I’m right…I have been very wrong before. =)