250 trading days on the wall..if one of those days happen to fall...

...249 trading days on the wall!  ...yep, the market had a hangover, but we've got 249 to go....Sure the ' Happy' in New Year went away to many a bull today, a day when a chorus line of bad headlines ripped throughout the day.   What didn't we get today?.  We got a contraction in the ISM number, Semi's got the hammer on INTC downgrade, oil kissed 100 on geopolitical and inventory stockpiles decline rumors, potentially more MER writedown noise came as well.  The FED minutes gave some an exit move, nothing more as the swing up was battered soon enough.   So, just another -250/50 new skool day, seems nothing has changed from 2007, but then why should it on the first trading of '08?.    Market made no resolution to change its rhetoric.   Despite the negative tone, the names and niches we've been following here surprised with an effort and a half.   This action might just go hand in hand with a nice bounce Thursday from these oversold levels. 'Oversold' is very subjective and differs between many any eye, technical ones as well.   The magnitude of a broad move may seem futile as the employment number might keep the easily scared away till after the report on Friday,  but we won't be surprised to see one anyways.  Either way a potentially big day is in the cards on Friday..up or down.   On to the niches that were going against the grain...

Thursday we will see what this late day solar move was all about.   We got a lot of noise premarket from supply deals, to guidance, to firms coverage, IBD ink on many a name including LDK, AKNS, FSLR, STP but most of the action that matters came around 320pm as SOLF, STP, JASO, FSLR got a bid into the close.  Going unnoticed last week was the Chinese gv't white paper writing that it will, 'vigorously' develop its renewable energy sources, add the oil spike and earnings coming and we should continue to get action here.

WBD had a strong day, including a strong finish closing at 136 at highs of day making it look good for Thurs.  VIP, we've noted allowing it to pullback recently before trying another entry.  It did as it backed up to 40 last session and closed near $44 today. Throw in MBT in the loop and you can see what we've been talking about the Russians showing resiliency even in the worst of days on the markets.

PBR, with oil making lots of noise, this giant has come to NCH territory at what just might be the right time for some follow soon to the upside.  PBR moves well off indices moves , not only when oil is spiking.   Another way we'd play this oil job is buying a move off 9ema which has worked very well with quality companies lately.  HES, at $98 is a play from that side of the track to look at. 

HRBN CMED SDTH noted midday.

MON'santo earnings release before open, keep CF AGU MOS and some POT near by.

DJIM #1 2008

Who would've thunk it that by the time we put out DJIM #1 of 2008, we'd be down between 4 and 6% on the major indices for the year .  Add the 10% off recent highs for the RUT and we have a mess on our hands.  An incredible week of headlines..ISM, FOMC minutes, employment report leading the way to a one sided week as the techs, small caps continued to fall for a 6th straight trading session.  Our methodology was always to not hold stocks into their earning reports, now 2008 is shaping up as a year where we might never hold anything at all into an ISM #, and especially payroll number!.  Imagine that!.  Talk about a daytraders market, a long term investor will see any gains generated quickly on a gap down like we saw Friday in this environment.   This will be a difficult market to move around in, the nervousness has really set in and it makes the credit crunch we've traded through look like child's play now.    Simply, the hype during the week to the payroll report led to something all feared, but there is no use to moan and groan and analyze here.   There`s enough media outlets to harp on the events and possibilities it holds.   We have to look to the very short term possibilities this week.    This includes a very technical bounce scenario that even has the Bears thinking a recovery of sorts is inevitable now.  How long it lasts if it happens is any ones guess.    Examples are The NASD comp, if you draw a trendline up touching  Feb-Mar, Aug bounce levels, the DOW you can go back to March, Aug and early Dec and do the same,  the SPX on its 400ma you can see the bounces Aug and December. The volume late last week suggests the panic has not set in.  Selling positions on Friday`s gap down could have been a losing proposition as it was day 5-6 of losses for the indices with technical bounce levels setting in.   The desks will finally fill come Monday as everyone gets back to work and many will start to see bargains in front of them.    Another possibility that can scare any Bear is the FED giving a surprise rate hike before the scheduled meeting as in 2007.   This market needs some intravenous therapy and it won`t be a quick fix unless the FED surprises, otherwise it will be a slow drip of help that could include technical, earning surprises etc.   Maybe the techs will get some help from the CES fair hype this week. 

As of now,  we are not going to change our trading methodology and what we have traded with success while the odds of recession grow.  The time might come where we have to look seriously at Golds, Oils, Widgets or consider shorting seriously, but in the meantime there are niches that we are familiar with that still have momentum in`08.   This inc. Chemical-Ag sec.   There are many things we can rally off and retrace back.  We need to see a start of it early this week.  Let`s wait and see...

..need to pull a 'Hillary'

Seems every morning the bulls have a glimpse of hope as either the futures indicate a good opening and/or we get a move higher early on.  Unfortunately, any hope is soon relieved and the indices start to sink sooner than later.  This is being repeated over and over again and all it does is make the bulls lose confidence.  This makes it easy for the Bears.  Considering we follow the small caps one thing we watch carefully is the IWM, yesterday the high of the day came at Fridays gap down high and there was no follow through higher. The next obvious step was to start looking at IWM's lows (low 71's) and if it was threatened it would break lower and it did to 70.   Considering the beating of growth stocks Monday masking the indices action as we noted, there is/was no belief we could have gone higher.  It makes no sense that we would with what is going on the day before in our favorite plays in '07.  All that was happening was these stocks were having bounces off a terrible day and were nothing but sucker bets at this point.  What you have to do is look around at what is still happening and that is a domino effect was in progress as more growth stocks were getting slaughtered.  If the bounce in the JASO's of the world was a beginning of a rally, why were stocks like ISRG, CMG still getting hammered?.  We need to see consistent action in the growth stocks, if some are still taking a fresh beating you have to ask which might be next?.  This is something we fear that a hot group like the Ag-Chemical shoe is yet to fall.  If MOS blows guidance today, we might just get this happening today. Considering there is plenty of institutional money in this sector with many of the stocks over $100, it would be pretty ugly if MOS gives any signs of a slowdown.  If they give a rosy outlook and don't move higher and/ or give up premarket gains later in day that would also be a bad sign for the sector.  Wouldn't you want to take money off the table if you were given a gap up in this market with one of your stocks?.  We only have to look at yesterdays words from AT&T that hit the market to understand what a negative word company related can do to the rest of the market.  It doesn't take much and in reality its nothing we haven't expected.  It's just the market is incredibly sensitive as of Friday.

Simply, it is easy to get suckered in now, especially if you are frustrated sitting on your hands. Just do it though until a clear trend change occurs.  So we repeat..we have to wait this out!.  What this market needs is to pull a ' Hillary' Clinton and cry a bit to pull off a comeback it seems, in the markets case this is called panic selling. A sob job!

*As earnings kick off what is essential is to not look at the headline number for the Q 'only' and jump in, but wait and see or hear the guidance. This is about looking forward now!

..what was that?

Somehow we just can't get excited about anything we witnessed in Thursday's action.  Actually, it was quite disappointing despite a +117/13 indices showing.  

If this is how a bottoming plays out, we're in for a rocky ride as the action was wilder than ever.   The day had no flow, no conviction you'd like to see on day 2 of a potential reversal in the making as the market simply ran up and down with the news flow.  The news flow, included the telegraphed rate move by Bernanke did nothing..nada...zilch for the stocks in our universe.  The late day BofA/CFC news did nothing either for our niche and that was the biggest disappointment.   Simply, we'd hate to see where the market would have ended up if it wasn't for the 'house'cleaning proposal of CFC.    The result is any confidence we had was squelched for the time being, maybe not for others as they see Thursday as a solid follow through day technically, especially considering the indices were down a pretty good chunk during the day.  We might seem greedy, but if we don't see growth stocks/ sectors in our niche performing along..we're not happy!.  The indices performance masked the underlying goings on in our view.   The day just reaffirms everything we said the day before in respect to how we are dealing with the prospect of a bottoming coming off Wednesdays action.  The AMEX news is really no surprise, especially after Capital One's bomb in the morning.  The market should be relieved a lot of the trash (CFC) and potentially next WMutual is being taken out literally to the curb.  The house needs a cleaning to boost confidence.  If it can't look past the inevitable news coming out of the 'consumer' card companies..we're in more trouble.  

In conclusion on TGIF day, we first need to see the market shake off the AH's Amex news at some point and not give us a 250/50 down day.  Secondly, we need to see some life in our niche after Thursdays disappointing day.  In the good old days, our niche would be in play after a dull day in which it did not participate.   Guess..it would be too much to ask for in this environment..lol..Okay, if we get pieces of any of the above today then we could go into the weekend on a mildly positive note.

..slippery when wet...

Frankly, if INTC reported a bullish forecast we doubt it would have anything close to the reaction IBM caused just hours before.  Reason being the market road showed there was dangerous curves in the making all day.  We underlined the ECO numbers heading into the week, the importance of them was overwhelming. The possibility also existed they could mute any positive earning reports from the big corporations.  This remains the case as we still have a plethora of economic data to be released this week that could drain this market even further.  The tap was opened by the PPI/retail, the flood ensued..."Still as of today, we have a flood of ECO numbers this week to deal with that will either salt the roads or make them slippery once again".   Simply, any walk up the hill was flooded and iced!.   Slippery when wet it is going to be even more this morning following INTC #'s and as the case with anyone living in a winterly climate, you'd know not to come out and try to drive through the mess outside.  In the trading world we will exercise this and not come out and play.  We're going sit on the sidelines and will only watch out the window, even if the skies clear some it is very doubtful we'd exercise the option of getting in on what is most likely another futile attempt of a rebound rally.     Any rebound in the short term will be sold off and we think it will be just another opportunity for the shorts to load up.  It is unimaginable to see where this market can get a leg up as of this morning.    The banks with the help of C and potentially more writedowns cooled any bottoming action for the moment.  The retail figures released showed the consumer has been screwed back to 2002 as numbers have not been at those levels since.   Geez, even Jobs couldn't pull a I'Rabbit out of his hat at AAPL.   Then finally AH's INTC crushed hopes of living on the hope of earnings getting us out of this mess.    So what's left that could get us back, even if for only a whipsaw move up?.  Well, we noted this a while ago and yesterday this became an almost inevitable outcome and that is helicopter Ben giving the market a rate ease before the end of January.   Still ..after yesterdays hammering this notion doesn't have the same flavor now to us.   A market going to hell feeling that flushes the market to much lower lows might the only way to go now!.  A smackdown is needed and one at the bell off INTC is not going to be enough.  Maybe the CPI can help add to it. 

There is no reason to moan about the bloodbath in individual stocks, but it never hurts to remind ourselves of what momo stocks are all about. The rides up have been incredibly enjoyed, but to stay in love with them and live with them when they have lost steam is a nasty divorce in the making where you are most likely to end up holding the bag.  This was everywhere yesterday in momo stocks of the past year or more.  The lights went out on solars as 10% plus losses were all over the place. The poor shippers had a big drop in their BDI index and sank!. The Chinese stocks fared not much better, nothing was more proof of a momo stock killing than the reaction to one of our biggest momo stocks of the past 2 years as the EDU classroom had the kids yelling fire as they ran out of the classrooms.  All this on a headline that didn't read that bad....Reports Q2 (Nov) earnings of $0.10 per share, excluding share-based compensation, $0.02 better than the First Call consensus of $0.08; revenues rose 50.9% year/year to $32.6 mln vs the $30.7 mln consensus. Co issues in-line guidance for Q3, sees Q3 revs of $42.1-44.2 mln vs. $44.22 mln consensus.  This just serves as a reminder here now as to what we have said and that is don't chase the headline, let the market show you the way first and if there is a CCall, either trade some before and get out as the call starts or jump in after unless you could follow the minute ticks while the call occurs to get a feel. 

Also...be careful of firms coming in today reaffirming their belief in the solars as an example.  They've been doing it almost daily since their highs.

Anyways...better to be safe than sorry at this point.  If you're not a daytrader or if you can't monitor your plays all day.. it is best to sit out. Definitely holding overnight is not a option as it stands now.  Take a breather.

...the flush

The headlines will be rampant tonight, tomorrow morning and into the long weekend.  We'll save the 10mth lows, 17th month lows speak.  What has happened in about 2 weeks of trading in 2008?.  How important is capital preservation?.  Let's see just a replay of 2008 so far!.  A full 11 trading days of it that has literally blown almost 11mths of market gains.    http://www.youtube.com/watch?v=WofFb_eOxxA

The purpose of our site was and is to provide commentary, methodology of doing and being in a trade(s) , the market.  Sometime in the early stages we started tossing email alerts-comments as an addition.  Some took this too far and blindly chased without doing any homework, but with the market firing on all cylinders it was easy to just jump on a train and rob it nicely.   Maybe fortunately, it is this group of so called traders that have been slowly getting removed from this market.  These are the first to crumble.  The plumbers have gone back to concentrating on plumbing, the teachers to teaching, the housewives back to 'wifing just like in those post bubble days.   Unbelievably, we've gotten a few complaints about not giving alerts on stocks in the past month or so!.  Sorry, but whose butt are we supposed to pull them out of in this crazy market?.  Besides, we weren't built on this.   We have a track record of 5 years or so in the online underground trading world, we've done the grunt work and were on the 'growth' train from the beginning and sometimes from the first minute on a DXPE, BTJ...BOOM...and so on and so on.    Well...times have changed!!   

You see the same subprime mess, ECO numbers as we do and the time has come to things differently, maybe.    One of them has always been the possibility of going into cash, capital preservation.  This is nothing new to our strategy, we've done it plenty of times before.  It's always been around but it's never been more important than these past few months and even more the past few days of horrible losses on the indices.  Hopefully, we've saved you a buck or two this week by sitting quietly.   This doing nothing is tremendously difficult for anyone doing this trading jig full-time as they always put candy in front of you and you get sucked into a play or two.   Why do you think we have so many false moves intraday, even the the biggest technical shorts are waiting for a rally and are dipping in as we see on so many blogs day after day .   Does this mean we needed or need to change to a Bear, a short sale idea site?.    Absolutely not!.   All you really ever needed was the Journal the way it is, our commentary offered many plays we didn't like any more and said why.  That's a short if there ever was one from us.  When were we off the Shippers and let you know, as one example?.  October? November?.   We know a few of you just short whatever stock and /or sec we stop discussing and following on the Journal.   That's cool with us and actually quite smart..lol   Too bad its always been hard to find shares to short for many of our plays or we'd been at it for years now.   Recently, we've talked about the fear the AG'sChem shoe was yet to fall.    We had day 1 on Wednesday, glimpses of it before on MOS's earnings day and before Thursday's open said a day 2 in a row was very possible.  One look around the losers list Thursday and you see TNH POT MOS MON etc. doing another 10% plus down days.  We've talked about panic setting in, something we want to wash this market out with.  We noted some of these stocks were great to set this panic off as they were expensive, widely institutionally held stocks related to something we all can understand and that is commodities and everything that encompasses it.   This doesn't mean we were making bushels off this commodity sale the past two days, it just shows the idea, potential lead was there for you and us to use.  We simply don't short for numerous reasons, the big one is we never needed to.   Thursday.. we finally got some panic, market volatility with the VIX spiking.  Will that continue into Friday?.  Probably not.    Despite the lower and lower market so far in '08, we have not seen this fear gauge move until today.  We may finally be on the cusp of what we need to bottom.   Say for a second that we are almost there, maybe we even start to bounce if there is some 'stimulus' and something to go with it ...maybe even the reports from multinationals GE-IBM will give a boost and short covering into the long weekend.  This will curb the VIX for now and give us a green day.  Not exactly what we wanted as of the close Thursday.

What would have been the point of turning this site into a 'short fest' of ideas and then switch back to what we do best sooner than later?.    Simply, if you wanted short ideas there were plenty, it is all in how you work and interpret the Journal.   The premise behind the Journal was to show how we think as traders, there was enuff to pick out to short if you wanted to play that way if sitting on cash is not for you.   Now...if this market bloodletting continues much longer, we have discussed and are open to changes we would make to deal with the changing and challenging environment..a Bear market.  For ourselves and therefore the site.   Until that day or until we are certain of a bottom to rally off for more than a few hours..we will promote cash is king.  We don't want any Gizmos' cats as members.   Let's just be ready to pounce with money in tow....

..UGLINESS

We must learn to live together as brothers or perish together as fools.
Martin Luther King Jr.

 Bloodletting has hit the world markets...

....SHANG -5%  HANG -5% BSE (india) -7% FTSE -5% DAX -7% Brazil -7  TSX -4%

...the long awaited gap down to flush?....FED intervention seemingly inevitable in the morning?...

...the possibilities are endless of the scene to be played out Tuesday

..big bang theory..

..yep..the big bang 'panic' theory was thrown out the window 8:20am Tuesday.  All the ducks were lined up and out comes the mother of 'ducks' and goes QUACK QUACK QUACK for each quarter and squelches any panic selling we were after.   Considering what happened Monday in the world markets, a 500pts drop in the 'electronic' cyber world of trading is of no consequence as a very small percentage of us had a chance to participate.  Simply, what happened was a disappointment.   There was no panic selling as nobody had a chance to begin the selling.   Surely the trading desks had thousands of sell orders to input in the morning, instead what we got was panic short covering in our view at the open and and 30minutes later we were left with an incredibly boring trading day to deal with the rest of the way as the market ran through a sideways consolidation phase..  Nothing happened after and it felt like were back to the previous weeks shenanigans.    We do not believe the institutions were lined up to buy the first half hour as it's not the way they do things, so the only answer is the .75  got the shorts covering and the ones who were scared and ready to sell after seeing the turmoil in world markets didn't have to and sat on their hands.  This was the opposite of what we wanted and of all the 'possibilities' this was not one we imagined.  If the buyers had flowed into the market after the 820am and before 930am to ride the Fed news, the gap down of 460pts would not have occurred as only some of the electronic losses were pared...instead the gap down gave the shorts an excellent opp' to cover and they went for it and most likely reloaded again by late morning and into the afternoon.    What a gift.   Some will say the fact we ended -128/47/15 in the indices as a positive and the start of the 'progression' into making a bottom, unfortunately for us we don't see this as a tradeable bottom we were looking for.  Great the financials and retailers rallied in many an eye, but we know how fast these party poopers can rattle any good time.  So what we have now is more of the waiting game, we now have to start to look to the jobs report and the size of the next Fed cut to potentially get this market going one way or another.  To make matters worse, we have to put profit fears back on the table..high on the table as AAPL's after hours forecast squelched any possibility of a follow through and early morning extension of what they called a rebound yesterday.  If the market can somehow shake off the AAPL news by the close, we'll then know if yesterday was anything of a bottoming process beginning. This is farfetched, but anything can happen in this craziness and if the market show signs of this late in the day then we know the buyers are stepping up and then we should all probably too.   In the meantime, we remain conservative and if nothing of substance happens today, we'll hope there are some earnings surprises that will get through the cracks and give us something to trade till this mess takes us to the end of the month. 

DJIM #4 2008

What didn't we get last week?.  Let's just say almost everything possible happened and just get on with the week ahead.  There is only so much we can talk about the bottoming process, the panic, the emergency cut, the guy who just wouldn't hedge his bets and lost 7 bln for his bank while going long.   We had everything and anything and it all makes for great story telling in every media outlet and so we'll leave it to them to tell.     Simply ...all we were concerned about going into Mondays trading was how we left off the market on Friday.   While the market was losing steam and falling victim to profit taking and a 300-80 pt intraday decline off highs,  we noted late that despite of this action we were finding stability in some of our closely followed and therefore adding pieces of POT, MOS, ISRG, DLB for different reasons heading into the weekend.    It was not only a case of profit taking off a quick ride up, it was the fear of some financial institutions mascot or someone in the mail room coming with an ingenious way to blow up another 7bln or something over the weekend.   We looked at it in a different way and that was because the real mascot was giving a state of the union address and his flock of Wall Street homies would make sure he'd have a 'green day'  platform to stand on.   One that could also carry a green market into Tuesday if they really wanted to make a statement.   Unfortunately, a last look at the futures showed a -100 DJIA and the Asian markets sinking before hitting the sack.   Despite the Shang showing a 7% decline, Hang/Nikkei -4%, the futures were edging up into the open!.     Hhhmmmmm?.     Have we become so immune to these steep declines overseas and here?.  Definitely not,  but this is not just any week with a pep talk leading the way on Monday night!.    This week is full of it..literally as a full calendar of important economic data.. Dec Durable Orders tomorrow morning at 8:30, advanced Q4 GDP ...Wednesday morning at 8:30 and the Jan Unemployment report on Friday morning at 8:30 and of course FOMC meet and decision and the herd of earnings reports can all play a roll in flushing us back down.   As far as trading tactics, we're not changing anything at this point in relation to sizes and the number of stocks we are prepared to hold this week. 

Despite the market indices looking quite green today +173/23/23, we didn't get much participation from the fast NASD stocks we are concerned about such as AAPL RIMM BIDU etc.  We got a mixed bag today but with some nice trading ranges from those highlighted late Friday..POT, MOS, ISRG.

The solars were mixed today, but if the LDK potential deal noted today in alerts happens it could not only move LDK quickly, but itcould get the whole sec' moving.  These upgrades and daily calls on the solars are not to be chased as we said recently.   These stocks move on deals and if this 1bln plus happens it could be the right spark.

Another play we moved in some for a trade is ACOR...yep the same ACOR we were trading back in 2006.  The news is below, but what we are trading is the volume and the NCH( new closing high).  A combination as such should get us some upside for a trade here.   Well, at least it did in a normal trading environment..lol..    Just like reading a juicy EPS headline and climbing into what you think will be a move up, but instead ending up in a slide down as seen in many a stock today we've been familiar with, we have no real clue about how the market will decipher the below news as the day progresses.   This is why we prefer to trade the close and not worry about if we missed some points intraday.  As with LDK, we're looking to trade it, not love it.

 ...Co announces results from a thorough QT study of Fampridine-SR. This study evaluated the potential to cause an increase in the electrocardiographic QT interval. Fampridine-SR, at both therapeutic and supratherapeutic doses, was found to be no different than placebo. The U.S. Food and Drug Administration requires thorough QT studies for all new drugs seeking regulatory approval, as increases in the QT interval may signify an increased risk of developing malignant cardiac arrhythmias.

..put up or shut up

Simply...the FOMC,  by cutting its target Fed rate and Discount rate by another .50pts said put up or shut up to the market.  They've given everything including the most recent .75 cut for all the dry powder, cash that has been sitting on the sideline waiting for a reason to get back into this dismal market.   It also happens to be the FED can't put up much more. It has pretty well exhausted it's ability to do more as they have little left to cut.  Seems the only thing cuts do these days is let the market use it as a reason to sell the news.  Considering the markets got what  they wanted it sure put in a paltry effort to show it was thankful.  Yes...the timing of the Fitch credit rating downgrades rumors of the insurers was quite suspicious, but the least the market couldn't have shown was not to sell so fast and show some appreciation and say we accept your apology for being so behind the curve.  That was no way to show confidence or give confidence to all of us looking forward as the markets weakness to sell on all the old concerns is still prevalent and overshadows anything the FOMC will do.   The expectation of yesterdays decision was like a New Years countdown only to have one guest (the insurers) come in and ruin the party. The only cork for the short term that popped was our confidence.  It's crazy to think one can spoil a party that should last into the morning, or next trading day as is the case here....but that is exactly what happened.  This FOMC decision lead in was worse than all the pre Super Bowl hype. Now, we didn't expect a rally out of the .50 cut as supposedly it was priced in, but to tempt and tease and than to close so weak was not priced in either.  It just leaves a sour taste in many and gave the shorts the ammunition they wanted and were waiting for.  What this means and was probably a big reason for the letdown was technically the DOW hit a point of resistance by hitting the 12600+ level.   Simply, the shorts were waiting with gloves on to put in a punch and drive the market back down, of course the bulls use it too as an area to sell and just added to the potential burn.   We've said the recent rally is probably a way for the shorts to reload and you can't blame them when even the bulls think we need to test the recent lows before we can move forward.  Talk about showing your hand!. 

What now?.  Well...things are not any clearer, sure the cuts will help down the line but it does nothing for the short term thinking we need to have at this time.  There isn't much to add today as we need to see more in the days ahead.  This starts with what GOOG produces tonight, unfortunately after seeing all the reports out of internet / tech we can't be all too thrilled of the possibilities we may see and get.  We also have the employment numbers coming up.   Basically, you can't expect an anticipated cut to do magic by itself, but if you stick it in a blender with a positive report from GOOG, a positive employment report you might be able to mix and blend it together to get something going in the near future...but, that's a lot to ask of this market and economy isn't it?.  

A good thing is the next meeting is 6 weeks away for the FOMC and the addicts, which probably most have us become to cut decisions will have to turn our attention to other things and not rely on this so much.  Trading individual stocks these days to long side, even to a day long is almost impossible as any gains are short lived....forget about a lunch outing, hell forget a pit stop in the can as by the time you get back your green stock is in the red.  Something that might take a few hours to built is evaporated in seconds.

If you believe we are going to test the recent lows very soon because of yesterdays action, you should start shorting the market and the high beta stocks on the heels of the reversal. 

DJIM #5 2008

A week of the improbable just passed.  We had FED slash and slash in attempts to stimulate the economy and at first it didn't seem stimulate a trader in sight.   A put or shut up sign was put up and come Thursday the traders showed signs of being inspired to put money in the markets and off the sidelines.    Speaking of sidelines, the NY Giants came off theirs late in the game and concluded a historic week with an improbable comeback upset.   Now if only the Giants can become the poster boys for the Bulls and push their own form of resistance out of the way and continue the bear market rally.   The resistance is in the charts coming up to the break down points as of Fridays close following a disappointing negative Payroll number but positive M&A noise...btw a number that 80 of 80 economists missed..the negative part.   The market is becoming more and more resilient to economic bombs and that's great, but it needs to continue to brush off the newest kid on the block ...the insurers and their crisis.    Hey, if the Giants can do it, a market can be full of surprises and play out in not so obvious ways.   Even if we retreat some off these technical levels, it does not mean we are going down to test lows again.   As far as trading strat',  we'd just prefer to lighten up as we did Friday and would today on any move upwards today into the levels noted yesterday.    Simply, we may break through to the upside at some point, but there may be no catalyst this week to accomplish this it seems.    Maybe some M& A activity will be spurred by the MSFT-YHOO bid.    This is already helping the public sentiment that stocks are cheap.   The next best thing is we begin to consolidate these recent gains.   In the meantime,  we can go on watching the second month of earnings unfold and concentrate on potential surprises.   The second month of earnings is the time the smaller companies release reports and so we'll look out for a surprise or two from an unknown play.  Now that money is seemingly coming off the sidelines,  the herd mentality might start to trickle in.  What we mean by this is we finally might get some runners as the hedgies come off the sidelines too and help run the little stocks that might surprise.   Nobody wants to be left out in the cold if the market has bottomed, even if it is possibly only for the short term.

It's 2008 and reliance on the stocks of 2007 is probably not the best thing to wait on.    We all get into habits and one is concentrating on the past winners to do it again.   Have an open mind at this stage, new winners, new sectors may emerge that may be in play the rest of the year..  In respect to this, we are heading into this week with a new sector we will closely watch...

COAL stocks, back in the summer we issued an alert on Shippers. At the time, the only chart making a new high was the BDI.  We went with it and the rest is history.  Today a new high is being reached in the price of coal, yep the boring black and sooty is making new highs. There is a huge demand for American coal, the terminals can't keep up to the surge and this won't stop in the near term.   What we need to see is traders looking for the next white hot sector flock here and this won't happen overnight, but if we stick it on watch and make some trades early we'll be a head of the curve.  Some of the stocks to follow include, FDG ARLP ACI NRP CLF CNX YZC WLB WLT ICO NCOC...It is hard to tell how much of the run was just the bounce in the market and how much was this play catching on last week.  A dip is probably the best time to start getting in on this, but if the game is on... we may start playing soon.

We also have ADM earnings Monday morning, depending on the report and CC, we may see this act as a catalyst for our Ag stocks, MOS POT

..Bullchit' it was!

The ISM Non-Manufacturing index was unexpectedly released ahead of its scheduled time this morning, with the Institute of Supply Management citing a "possible breach of information" ahead of the release.....

Who breached?....this was to save the mkt from intraday (morning) panic as far as we were concerned!....well. .okay maybe we can start to understand if some guy spewed the number to those Mexican reporters after the Super Bowl after a few too many;).    Yeah, you know to the one(s) from TV-Aztec with the Tom Brady wedding proposal ....

A lesson on ISM,  if you've never paid attention to it or cared much for it, you will now ......Europe had a bloody one and it just followed up here with CNBC masking the importance of it all morning it seemed.     This is supposed to twitch 1 or 2 pts from  each report to the next... today it went epileptic, whichever way you read it...new or old way.

http://www.nasdaq.com/econoday/reports/US/EN/New_York/non_manufacturing_napm/year/2008/yearly/02/index.html.

As you know, we've turtled ....luckily ahead of all this as of Friday and we'll stay that way.   Hopefully, you are with us and have come to understand the importance of capital preservation, if not before..well then the past few days.    Trading is not only about being in the right plays,  it's about having having money left to get in the right plays in a better market.       This is capital traders might start to use,  if we start a bounce off the 50% retracement off last weeks highs at some point soon in some of the indices.   We'll see,  hopefully there is a catalyst that comes with it and not just more techincal mumbo jumbo to create a move.    1335 on SPX, if we remember right,  is one to watch.   Who'd thunk it!,  we'd almost be at 50% retracements in a few trading hours after the fast move up.       Sincerely...be quick if you want to play this way,  its only 50% more to the most recent lows.     That's not a whole lot is it?

Update on Wednesday, February 6, 2008 at 07:45AM by Demi/ YourPersonalTrader

Jus' a follow up to yesterdays note for those not familiar with TRIN readings.

We wouldn't be shy about selling anything you still want to rid of if this comes to fruition.

* besides ILMN closing well, we'd keep YTEC around for a potential buy after its post earning action yesterday, preferably on a dip

DJIM #6 2008

Entering this week of trading, traders are seemingly in a conundrum due to the last two trading days.  After a couple of huge upturns and downturns, the market traded in a tight narrow range and no one really knows what swing will come next.   Of course, the market usually consolidates after big turns,  but since the market is near recent lows you have uncertainty come in.   Is it support finding its way above 12000 or is just a time out before that line in the sand falls?.     You have the Bears perplexed as more take on long trades and you have Bulls taking on some short bets.    At least this is what we are sensing, not only by the most recent action but by the general tone if you scope what is being said among traders on blogs etc.   It's definitely a puzzle and most are waiting for the next piece to drop to send this market either way.   Until that happens, we may get more of the same and that is consolidation action taking place early in the week.   Unfortunately, neither the Bulls nor the Bears knows what may be the next driver to make this market go their way.    The Bulls have used up their interest rate hikes, the Bears most of the economic bombshells like last weeks ISM.     What to do with the puzzle?.    One thing is certain and something to rely on is something you see, you may not always believe in it, but most are showing a reliance on charts now.    Everyone is watching support and resistance levels as a guide in a confusing market.     Actually...how can you not?, we all saw the importance of resistance during the Bear rally as the market hit a wall at 12800 Dow!.  In times of indecision it seems all have their eyes focused on TA and nothing is more simple than understanding resistance and support.     A wall is a wall and you don't need extensive TA training in getting with the program.     Simply, we want 12400 broken to have a potential retest of 12800 and not have 12000 broken on a downside close.     Considering this market can pull out a -250/50 day at a snap of a finger, we can see those levels toyed with at any point this week.   If you are turtled and away from the market, you should stay that way as a clearer picture may emerge to go either long or short very soon.  If you are dipping like us, it's best to hedge your bets and keep to small pieces.

Chemicals/Agri,  we discussed the need to contain ones after hour exuberance to $116 over CF earnings.   It wasn't much of a surprise to see the stock trade to as low as $105 during Fridays session.    What was somewhat surprising was to see MOS and MON make subtle gains and hold 9ema.   Due to CF's action our view did not change and we are biased to the downside for the reasons noted heading into Fridays trading.  POT' action was not fulfilling either.   We have AGU reporting this week and this could be the last short term blow for this sec'.

Coals, one place to stay long is seemingly in this group with this bunch of stocks making new highs last week. We've listed earlier the lot from the expensive to the cheapies.

We have some interesting reports this week stretching from FSLR to BIDU.   We all know the power these have on the rest of their sectors.  It will be a very exciting this week, up or down for momo traders.   So, let's wait and see what these reports provoke as far as trading possibilities go this week.

In Da Buff!

Well, at least that's how they call home next door in Buffalo.  In the markets it takes on a whole different twist these days!.   None of us should be surprised by today's market turnover.    You don't have to unwrap this market, you already know what's inside this box of tricks.   We highlighted the primary supports and resistance levels heading into the week, but before we get there we need to bypass a few secondary levels and today we got stomped at a few.   Most noticeable the 12400 on DJIA, we highlighted.  To get more technical you can see the QQQQ and SPY (S&P spdrs) did a u-turn and came up against the gap down highs from last week.   When you see things like this come to a screeching halt on charts and witness it all first hand in your watchlists, you can't help but wonder if we are to resume the downtrend.    Today's action was brutal, the quick move of 220+ up on Buffett was not Warren-ted and it proved so by end of day.    You see all the fixes including rate hikes, gov't lifelines and this news today don't do anything for the markets right here and now.   Buffett's 'guarantees' are for municipal bonds, they are not guarantees to turn this market up and get it roaring for more than a few hours or days before it bends over again..   All these maneuvers will graduallyl help the markets confidence over months, but what we need now is a flush and /or at least a test of lows.   No rally is satisfied knowing those lows need to be tested and we'll never get the rally we want if we don't go there first.    Market is just putting the inevitable on ice and so while on ice, we'll continue to get the melt downs we saw today.    This equals sloppy driving through the trading day.  On to the slop....

Ag's-Chemicals,  this group has had us teeter tottering for the past 3 days or so between trading it long or short.  The action following good earnings last week was quite meager following giving credence to this group possibly topping out.  Yesterdays action which we noted as surprising followed through early today.    What we didn't know is there was a Goldman Sachs Ag conference call for these players up today.  This explained the action yesterday and very early today.   Like a pre earnings run, we think we just had one to the conference and possibly nothing more.  As the conference winded down, we had these fall hard from NCH levels.   MOS and POT most notably.  This may have been a distribution day and so these may be topping out for the immediate future.   We will know better tomorrow following the AGU report.   If the report is very good and these don't react positively this will be a repeat of CF's upbeat disappointment the following day and we'll know its more likely a top here.  

Solars, as we reminded yesterday,  this group can't be trusted day to day now.   You might miss some nice days like Monday, but you may miss some pain like today as well.   FSLR, did a pre earnings day run, except it was a backwards one which saw it sliding $21 from high to low of day. It reports in the morning tomorrow and will probably beat handily.    It will be interesting to see the reaction..How good a  beat is cooked in?.   Be careful premkt if its not a beat of substance,  premkt lies a lot these days. 

The Coals jack-knifed today as if they had a momo group complex as well.  We'd look to pick up pieces on dips to get on this hot story in early '08.  It's definitely getting some attention now.

A few stocks off our recent pages managed to hold on to the green, so let's give them some print....

CMP, noted yesterday, looked finally discovered as a play with an Ag' angle as it rocketed from $47's open to 53 and managed to hold on to the gains on excellent volume.  Will need to digest these gains now, so if you missed it this morning its' probably best to wait on it and the sec' it put its head into today.  Another recent alert FLS touched $100 today and should not be left off any watchlist.  A few of the medical supply co's like BDX and new one we added some of today, ZMH , held on.  We'd throw in ILMN with this medical flavor even if its listed as a biotech.  On the cheap, VLNC painted a nice chart the last few days and has December highs in sight.

..Kiss of death

Okay..it wasn't that bad, but Batman And Robin testifying did enough to rehash slowdown concerns and consequently bring a big red day on Valentines day.  Red..how fitting!.  The duo did not rile up any new concerns, but after being up 4 of 5 last days on Nasd and 3 straight on DJIA/SPX, it was probably inevitable we have a pullback.    Unfortunately,  it doesn't look good when the only real gains came on Wednesday get grinded down almost in full the next day.    Simply... if you've got financials and tech leaning to the downside, your hands are tied and the outcome is predictable.     So...now heading into a 3 day weekend,  we are left with options expiration day to deal with and it's probable volatility and the usual Friday profit taking.  On the hand, maybe we got that out of the way yesterday and the Buls and Bears can just fight the 12400 and the SPX 1351 and let the market go into the weekend in some kind of peace.    Anyways...not to dwell on the big picture as it drives us all bonkers, lets deal with possible trading opp's for Friday considering our emphasis is on EPS trading and we have a few reports to potentially trade...

DRYS,  you gotta love a headline of a .47 beat, it sounds wonderful doesn't it!..One thing never to forget is to put this in balance. What we mean is this is a only a 10% beat and you have to consider what comes up on the CC as this co' doesn't  headline guide.   The company seems optimistic heading forward, but that we get from the report headlines and will let the market decipher early on if we want to play.  One thing we also need to watch is the BDI in the next few days because it has the tendency to go up 3-4 days straight days and then do same thing down.   Now it has been up 6 straight days and is up against the 200sma day.   Unless there is exuberance that you can swing a trade intraday today, we'd probably hold off holding these into the weekend.   One shipper that we have added to our watchlist is GNK after its report.  Many good things in its report and it is probably much better for those that want to avoid the volatility of the 3 main shippers we've traded here..DRYS, TBSI, EXM.

CMG, one of the big momo stocks of '07 became one the biggest short % stocks as well.  This provides a potential squeeze opp' at any time following the beating it took AH.  Look to maybe flip this today.   CLB followed by FTI could be potential early on trades with less volatility.

Amongst the beating yesterday what survived were the coal stocks.  Most strength was in the 2 big names we like FDG and MEE, which closed near high of days.    The cheapie covered here is JRCC and hit a high of 17.80 intraday high.  At this point with the markets the way they are we'd rather play the more liquid names with their institutional money.   A potential pisser today is some tier1 firm has downgraded the group.  If traders takes this seriously, we'd seriously look to add on the dip as earlier in the week

We've had a few nice EPS names going strong the last few days toying with highs.  CMP, ILMN, FLS.  The thing is this market wastes no time in taking away profits and it is very hard to even hold names like these through.  This is something we all deal with and should decide after DD if these plays are worth holding longer term, no matter the daily swings.    If you have the patience than you see this has been rewarding after introduction here.