..cards on the table..

Before the open tomorrow, we'll have many of the cards turned over to indicate where we're going.  The way today went , you'd think the downward bias will continue as the Economic data consisting of the CPI, Housing starts, Retail Redbook is unveiled and digested.   It seems to be too easy, too convenient to assume today's reversal will continue tomorrow as all the charts from the SPX to IWN have a narrowing >>>>> triangle formation looking more like a downward break coinciding with the big Eco' data day.     The trading programs must be ready to go.   In either direction.   To sell the break or will it program buy if a threat comes on the lower channel of the symmetrical triangle?.   Considering this market is so unpredictable, who knows what tomorrow will hold.   Today, we probably had a trap and tomorrow it might be reciprocated.   Who knows!.     As for today, the QQQ's already broke down just after 2pm in fast and furious fashion, only to be pushed back to the lower line of the triangle following HPQ's EPS after hours.   We're not putting too much on the prospects of HPQ rubbing off on the other techs and resuscitating them all by it's lonesome.   Today's gap was erased quickly, the commodities driven market today soon faltered as this only brought on more inflation fears.   With oil kissing $100 those $600 stimuli checks might not last too long. 

Yesterday, we led the Journal off with the Chemical/Agr'si because they were trading near 52 wk highs.  A few got up to those peaks and actually held the gap up opens.   Considering how fast the move was today and with the potential of misery in the market tomorrow, this is the first place we'd look to go short in if you haven't yet during today's reversal.    Yep, you can't pick sides for too long in this environment.  

The Coals also exploded with FDG leading the charge to a multi year high of $50 and change.   We've noted the past few journals of buying the dip, including after GS's downgrade on Friday.    These guys can do some consolidating now as well.  The idea of buying a dip is not in the cards in respect to a potential overall market hit tomorrow.

VLNC had a nice volume day and hit the 50% mark since being alerted to 8 trading days ago.  Too bad the truck wasn't loaded with it, tomorrow would not seem so important... GNK up over 10%, CLB should be watchlisted for a sunny day,  if you haven't done so yet after last weeks note on them. 

A clear head for tomorrow is the only option....we'll update if necessary before the open

DJIM #8 2008

...and the Oscar for 'Editing in a Rally' goes to.......CNBC and Charlie "Bull-father" Gasparino!.   We definitely have to put this in the comedy department, the only drama was for the Bears running to cover their steps.    As comical as this timing of the Friday rumor was, it only emphasized the craziness of this market and its dependence on news and the daily fear that is in the Bears.   This market can be turned on a dime, it just needed the right touch from those wanting to see this market hold on as long as it can.    It definitely didn't look good in the afternoon and had all the makings for a rough Monday.    Some say its in the charts and after almost two full days of a slow grind down, we noticed the IWM ( a measure we use during the day) had started to base and reminded us of the Friday before when the Financials led a charge up.   Is it..was it a coincidence the IWM based nicely before the CNBC 3:30 episode?.   Maybe, but if it is in the charts it definitely gave enough clues this time before the rally into the close.    Not everything ran, the techs and momentum stocks hardly participated.   The ones that did were GS for 6 points and MER for 3 as we had expected if a half ass rally of any kind ensued.   It had to be led by the financials as there is nothing else that could do it these days intraday.   These are usually the bets in our books, we prefer to sit out the MBI, ABK stuff.    So instead of a potential scary Monday, we had the futures up overnight with the world markets seeing green setting up for possibly a decent open in North America.  This comical event has the ability to turn into a drama,  if it does it would have to be some concrete news from the insurers and it could be enough to fuel a day or two of a rally.   Unfortunately, what we need to do is watch the plethora of data on the economy this week and therefore not get carried away in holding too many or too big of slices based any insurer noise.   Here's the potential goodies on the Bears :

http://www.nasdaq.com/econoday/calendar/US/EN/New_York/year/2008/month/02/day/25/daily/index.html

If by some remote chance we see anything of good news in the economy data, it will make the Bears scramble and we can have a rally based on something more reliable.  The subprime, insurer stuff will only give us a reprieve for a short time, the eco data is the crucial ingredient for a true reversal to start.

In the meantime, we need to be ready and know what to go after if a deal goes down!. We'd start with the financial stocks that work and only after some time would we go after the usual suspects in the momo world of the fast techs, shippers, solars etc.  We need confirmation of participation by these players this time around, we didn't get it Friday.   Stay cool this week, it should be quiet turbulent.

Remember..Futures lie these days and it works both ways.   A flat futures premarket may not tell the tale this morning.  Too many are thinking deal here and we may only start to see this it after the open intraday.

..Closer than you think!

Amidst this fast rally, you almost can't help but fall asleep at the wheel in regards to watching the digits of the DJIA.  You notice the100pts here and there, the back and forth swings, but you don't really pay attention to where DJIA 12800 is in comparison to where the market stands intraday.    Simply, we've moved so fast the past 2 days and 30 minutes off Friday that our closeness to 12800 was actually a surprise of sorts.   We noted this weekend 12800 is what really mattered and that we should try to brush those 'triangles' off to the side.  This rally has swept not just brushed the triangles off in fast and furious action,  but now has all eyes squarely on the next resistance at 12800 and the potential long side trades it would hold if broken.    Now, 12800 is just the sexy psych number, in reality what we are looking at is to break through and close above the Feb 1 high of 12767.     That's where the 'closer than you think' comes in as we hit a high of 12743 today.  Truthfully, we hope there is a sane pullback off this extended action.   One reason is we wouldn't mind to get some of our DJIM plays back cheaper before the markets kick it up again.   We know they held up well in a rough environment,  let them show what they can do in a better environment.   Monday,  we were releasing many of those extended plays from here, today we saw more of the extended feeling spread to other stocks we monitor.     Notice all the the stocks here hitting NCH's yesterday did not participate at all today.    That shows us they were extended the day before as they did not play along in the rally today.    What is quite amazing is this fast move has not included the momentum NASD stocks we have always associated with a move here the past year...The RIMM'..AAPL's have struggled for this entire move!.  As well, the Finanicals have not participated beyond intraday swings on the monolines headlines...the GS, MER, BAC etc...the XLF.    Something has to give here amongst the XLF and QQQQ's and it would hardly be a surprise to see a group(s) wake up for a day or two and try to lead the charge thru 12800.   It has to be something big to do this and whatever it is, it  better bring volume with it.   The reason it has to be big is we've been stuck in this range all of 2008 (12000-12800).   A top of a range like this should not go down so easy.

It was an uneventful day despite a follow through of the rally as we had pretty well emptied our bench before the Eco Data.   Better safe than sorry.    Even though we had started guessing and noted here the Eco data might be being priced in after the Feb 15th trading action, we still can't be sure what side of the bed the markets will wake up on and in what mood. (Mr. Market is really Mrs. Market these days;).    Still, a few names off DJIM that did not hit recent highs on Monday played some Tuesday.  JLL, its big chart was updated by BT the night before showing its potential set up to a new highs since earnings, not a NCH like the others and JRCC, the cheap coal hit an intraday new high as well.  ROH is one we started to watch closely Tuesday based on chart.  We did add AKS today, a metal to trade as long as this sector keeps rolling.    The Agri-chemical, most notably the POT-MOS put in a two day H&S pattern and if we are to pullback in the market, we'd look to short to some of these for a flip.    Simply, the market showed this higher inflation data (PPI) is a laggard at this point.  We already know the state of things, the idea of recession.   This only seemed to surprise the shorts who can't understand why the market goes up on bad eco news.  We all get trapped into one way of thinking ..long or short and its a hard habit to break when the same things work over over for you.  You gotta be open minded and think outside the box.

Oh yeah...it's Shanghai surprise anniversary ..lets hope Bernanke doesn't give us one when he begins to testify at 10am.

Spring Training...

Kinda felt like a lazy Spring Training game in Florida took itself to Wall Street today.  Nothing except da' boys playing catch today, back and forth till a half hearted swoon end of day.   Even the Bears couldn't be to thrilled by this triple digit loss on the lightest volume of the week, hey even in the middle innings today the Bulls almost turfed some green on them.   Must be pretty disappointing after fielding this line up card today....

Batting 1st:  A pullback was in the cards after 4 straight days made the market indices extended   2nd- GDP below consensus     3rd- Initial claims higher    4th- Benny talking of small bank failures  5th- Moody's headlines on regional banks  6th- Financials beaten all day(XLF -3.4%)    7th- Oil breaking out from its recent consolidation   7th -Commodities booming after a day off    8th-  US dollar at all time lows.  9th-, not sure what 9 was, but if you're going to rely on the 9th place hitter to hit one out of the park, you're in trouble!...You'd figure the Bulls had their doped up "Ace" on the mound to fend of this potent line up, but there really wasn't one!.     Don't tell us it was that Texas Ranger, George W. Bush claiming 'there will be no recession'..  talk about knuckle balls being thrown out by a knuckle head!

Anyways, it was a quiet premarket and as it turned out tossing out a few balls to hit before the open was the way to play out the game today.  So, instead of dwelling on today's overall market sentiment and what the last of the month might hold, we'll introduce or as re-introduce a few of the home runs today.

EOG, this O & G play just smelled of PBR that we traded here as soon as the news was released before their investor conference.   They announced 4 new plays with meaningful potential and also increased their Barnett gas play potential.   Poor Citigroup just downgraded it this week.    Basically, the Barnett play was this stocks growth at 5.0-7.2 tcfe's after today's increase.   To put it in perspective,  these 4 new plays carry mid potential of 8.5.   We don't need to know what tcfe's are all about, just that these finds are a greater # and the stock already traded over $100 based on mainly Barnett.  We're sure this will be around here as long as oil is gushing over $100. 

HURC,  guess most members that have been with us recall this play creeping in almost every Q after earnings the past few years.  After a few Q's off it reported a stellar Q today with what looked like record revenues and EPS.   Even though this was helped by way of dollar exchange, it still managed to hold its big gap and actually make another move late in the day.   It was a bit surprising as EPS stocks are just not running so far in this environment.   Having experienced this stock more than once, we'd wait for it to come back before considering further.

GTLS, (LNG) was a big play here last summer and its good to see it still is on radar of DJIM's bullpen. (sorry Mark..couldn't resist).  As we said this morning, it's not really about the EPS as the reason to chase, but possibly the combo of a decent report and the sector its in.   A CC is worth waiting for or at least trading into if you see a good reaction and then getting out as the call begins before evaluating if you should re-enter or just enter for the first time after the call.  Besides,  it is really hard to get a grip on earnings this Q and what will react in a positive manner.  You could see a blowout headline a la DECK this evening, yet by missing a detail in the actual report you could be in big trouble chasing at the crack of the bat.   It's really a crap shoot with earnings, a lot of things need to come together to get a reaction like HURC's/ GTLS today.   Just like HURC, lets keep them around and watch for them to come off these extended 1st day reactions.  We're not in a market where you want to hold on too long yet.    So, if you made it into these plays today,  it is best to pocket gains and be glad you had it on watch before most.    If they are really this good, we'll get around to them again.

Friday might come down to whoever has the biggest paint brush to close off the monthly on the charts.  As of yesterdays close (27th), the DJIA was up 1.7%,  SPX up 1.3% and the NASD was down -0.2% for the month.  After today, it looks more of a wash of a month.  Amazing, all things considered we've had to put up with.

..staring into the Abyss

The market pit abyss was right before our eyes today, one we have accepted to happen just to get all the talk of testing the bottoms of January out of the way.   It's March damn it and if we don't get over it soon, we just prolong the inevitable move up sometime this year from happening.   A real move, not just one to test 12800 all over again and then get pushed back down.   The backdrop was perfect today as the fast moving techs, RIMM, AAPL were getting crushed and the one symbol we watch most for direction, the small cap ETF IWM broke down hard with volume in tow around 2:15pm.   We had all the makings of a terrible day tomorrow,  if the DIA, SPY, QQQQ's just followed IWM into the door of the abyss!.     If we had the bad close as we noted today, those DIA, SPY's, QQQQ's would have followed without a doubt later in the day and screwed up many a support lines on the charts heading into tomorrows trade.    Instead of following IWM's lead, the DIA/SPY held on and about 3pm began to reverse and we ended slightly down on the DJIA(-7 ) and painted some green on the SPX.    We may have to accept that this was the beginning of a bounce,  but if we've gone this far the last 3 and a half days...let's just get it over with and test the pit .    We know this won't be a bottomless pit as there are tons waiting to buy this market when it happens.   So as the Nike 'swoosh'  said it.....Just do it!..!    If we do get an upward bias tomorrow it will be because the odds just favor it,  not because this move today was of any true substance.   If we don't move up Tuesday, we can blame it on the things we didn't like today as potential precursors.    Firstly, we watch the IWM as its a more honest reading of those trading intraday and its a better barometer for the kinds of stocks we trade and we simply didn't like it, today.   Secondly, the destruction in fast movers we trade on the NASD..RIMM, AAPL, GOOG were being trashed and with the Financials offering no reason to think they are ready to reverse....we are left with the question, who is capable of leading any move up now?.     After hours the QQQQ's are simply at the open price on January 23rd.   A little spooky.      Also, considering all the huge intradays moves we've seen in past months,  reversing around +100 on DJIA and 20 on NASD and having the majority of our DJIM watch listed be limp during the last hour didn't generate much buying excitement from us.  Actually..none at all.   The question here and now, is do the Bulls just let support crumble or do they make another half ass attempt for a rally??.   We actually don't think that too many shorts got positioned on this last leg up and then were taken by surprise at velocity of the drop since mid day Wednesday to set themselves up.   It makes us wonder how much short covering there would be to fuel a move of any substance and duration at this point for the Bulls.  Doubtful any rally would run anywhere close to 12800 this time before turning back to where we are now.  Basically an early March break before we test the January pit.   Anyways, so much could happen tomorrow that it almost seems right nothing will happen.    There is really nothing on the horizon tomorrow (no eco' data)  that could fuel a move either way other than the technical stuff.     Maybe the real set up on the horizon, one that will decide the markets direction Tuesday is a News Headline. 

Halt rally...

Quite fitting we had a Halt Rally to +150 on the DJIA considering we've speculated on Half Ass Rallies more than once the past few weeks off the ABK/MBI turmoil. The last 48 hours played out as we noted intraday with the shorts covering into the last hour on Tuesday to avoid being caught in the news of a ABK rescue and then the quick tick up as soon as ABK was halted followed by the sell off of about 200 points as reality set in.  A 1-2-3 shuffle that is no different than what we see in the markets on individual stocks as they move into an earnings report and then sell off.  Trading is a game of human nature and it is prudent to have some street smarts and try to think how the herd will react in order to be on the frontline and not be followers.   The difference comes in the form of dollars and that is why we are here, to make money and not lose it.   Not to be beat a dead horse without a white knight to bail it out, we are left thinking ahead and wonder what promise lies ahead for the market to move forward now that half ass rallies will stop on the monolines soap opera.   Now the Bulls are left wondering what bailout will come for them without these rallies to save the downticks into the pit!.   The tide has probably turned and if there is news on the monolines it will probably be negative, so we have to be prepared. 

Underlying all the ABK hype was what matters and that was the action in commodities and the stocks involved.   The melt up action rejuvenated overnight after a substantial down day as new highs were made all over the place.    Based on this action and on the decent last 10 minute close, we'd be looking to see which commod' will make the best trade of the day very early.  We wouldn't be afraid to jump in early today unless we get some bad headline in the pre market.   The market may will feel a sigh of relief today and just go after what is working in the commodities, in case it does we'd play the below.  

If its coals, we'd look early to FDG as it did not wilt under a downgrade, AKS, JRCC follow.

If its O & G's, we have BZP, EOG, CLHB and FLS potential 9ema'er rebounder.

If its Agri-chemicals, we'd add early to CMP as it made it back to NCH levels and then deal with usual suspects..POT, MOS

If its metals, we have to look at MTL and CLF

If its none of these, we'd stay away heading into Fridays jobs report and read the Ambac prospectus to kill time...okay maybe not.

...are we there yet, dad?

Honestly..the best lead we could give into tomorrows performance is to get a good nights sleep, brew a big chug of coffee by 830 am and just in case position a mickey of Jack D', Jose or whatever is your fave beverage in your desk drawer for later.     It's gonna be a helluva ride and most likely not just one way intraday and nothing less than triple digits.  We expect violent swings and actually would be disappointed if they do not come.   To predict what may happen would be insane, the possibilities are endless tonight.   The anticipation just got louder today as the Jobs report has collided with the SPX breaking to 1304.  Its amazing how often the ducks line up in the most opportune time.   Well today's flavor of day in TA' was this SPX close, tomorrow it might be 12000 and yesterday it was the wedgies.    It changes everyday as to what is important and is quite tiresome and gets confusing to the casual trader.   If we stick to the most simplistic, its the 12000 to 12800 range we've been keeping here to. 

Coming into the trading day, we said in part ..." Now the Bulls are left wondering what bailout will come for them without these rallies to save the downticks into the pit!."  What we were alluding to is that as more subprime fallout occurs and because the monoline fiasco gets pushed to the side now, where would a rally originate from to help the financials and therefore the market.   Little did we know they would drop so many bricks at once this premarket.   We had foreclosures, disclosures, delinquencies, failed margin calls, distressed selling at UBS, MER amending..blah blah.   They should've just gapped the market to closing levels instead of grinding.   But that's too easy, its the grinding the takes traders money away as itchy fingers make you jump in and then slowly rot you away with another leg down and then another and so on.   Anyways, the point was there is no saving the Gasparino way now.

Despite the day unfolding this way from the open, we had some nice moves from the mornings watch.  Unfortunately, this market continues to be made for ones with big bladders that can capitalize quick the gains in a CMP, BPZ, which got erased fast or the very patient nerves of steel ones who could have stuck with the CMP, FDG, JRCC calls here from its first days.    We also started to like the action in POT/MOS today once again.    So, not a wasted day and we'd stick to names highlighted this morning in case an opportunity to fade a move comes tomorrow or otherwise.  

Will we get there?.   Town of Capitulation?.   The truth is we'll probably not know till we've driven through it and then look back, we'd just settle for a gap down tomorrow and take it from there...or a surprise induced moon shot to just relieve the tension for now ....Good luck and we'll keep in touch during the day...

..burns money twice as fast...

We had everything answered today that we couldn't answer at the end of our last Journal.   Where was the correlation between the indices closes from Friday?.     Despite, the DJIA/ SPZ taking the brunt of losses after the jobs report, the NDX, the RUT finished with very little loss.  It hardly made sense considering the terrible news and being in such a vulnerable technical place in regards to a potential breakdown.  Something was amiss and today was the missing link from Friday as the NASD-NDX and RUT played catch up in a big way.   The big losers -1.95 -2.0 -2.45%, respectively amongst the indices.   In the past, we have discussed the probability of 'momo dominos' and today anything that resembles momentum plays from the past months burned twice as fast anything out there.

Considering the trading stance we've taken here of late,  this is one time where the hurt should have been minimal, if at all.   Instead of being creamed with the lot,  we are now looking at the possibility of a bounce where we could trade these in tow as we sit around SPX 1270.   Tuesday looks conveniently set up to trade some of these beaten ups.   While the market grinds down ..DJIA down 7 of 8 days,  RUT/NASD/NDX closing below intraday lows from Jan swoon, our trading stance which first is capital preservation should allow to capitalize on any reversal, short or longer term and in the meantime avoid losses like those seen today in this overall rough trading environment.

If something fresh doesn't sour the market more, a bounce of some sorts should be coming tomorrow as we are at some important ( yep..again.) FIB technical levels on the SPX.   We might even look at some of the firms like BSC, LEH for a trade.

Spitzed out....

Hopefully in weeks or maybe even days to come, this quick rally to 12300 won't be known as the 'Spitzer rally' that failed as bad as the man himself.  It seems as Wall Street was only sending Spitzer out with a celebratory rally, a bon voyage of sorts for the man so dear to their hearts.  As soon as the resignation came, the rally not only halted but by late afternoon sputtered quiet badly in our view.   A disappointment. All any Bull would have wanted to see would be a marginally green day and just call the days action the beginning of a needed and expected consolidation after a fast and furious run.    Unfortunately, a look at the day tallies on the indices and you see a drop of nearly 200 pts off the high and at days low.   As we noted, we would not worry about missing a gap up in the morning and preferred to be clean of positions heading into the day.  Well, we didn't even get the gap, but instead just a tradeable 1 hr rally to flip a few things in and out and then get back to waiting on the sideline.   Basically, the day was a write-off and a day to catch your breath and maybe to re-evaluate your heightened enthusiasm for this rally being different than the others in the past few months.   We really didn't have much to say before Thursday's open as we sit in cash,  but turning on the tele this morning and seeing the ticker on Bloomberg flooded with red,  we are fine with our decision.   It good have been better, if we had shorted the market by close, but we don't exactly want to wake up to another surprise to drive a short covering and be caught with our pants down like Spitzer.  The futures are off nearly 1.5% across the board this morning and it is really of no consequence to us why it is.   We'll check soon enough, but it hardly makes a difference.    We all can't be surprised by anything these days and so we'll just go with the flow.  One thing that is not a surprise today is with every injection by the FED, new or old, the euphoria in the market dissipates faster and faster.  This is looking like another squandered opportunity to get anything going to the upside.   Considering the economic numbers due on Friday, we'd just relax till the numbers paint a picture.  If you aren't into shorting intraday, don't be hooked into the market, your weekend may have started with Spitzer taking the podium yesterday. 

DJIM #11 2008

Despite the 400pt rally on Tuesday, we highlighted..bulletted what we thought was some kind of significance occurring that was of more importance than the rally. 

• One real concern is the BSC situation that must be resolved.  Good or bad to move on.  The financials, the market were acting too wildly on this stocks back today.

The next day the CEO of BSC appeared and assured BSC was fine!.  We might have not been around the Great depression, World Wars, past recessions that this investment bank survived, but we are here tonight in one piece to see it fall for $2 to JPM.  In so many ways the history of BSC puts todays financial crisis we're dealing with into perspective.  Build-A- Bear workshop ( BBW) even today trades at a Market cap of 169million,  BSC was just had for 236million.!!.   STUNNING developments in respect to the $2 virtually wiping any value of investments by shareholders  , but developments that had to occur this weekend or have more runs on banks because a crisis of confidence may have taken over.   Tonight the FED is proving to be adamant again on doing whatever is needed to halt the poisonous cycle by cutting the discount rate by another .25pts and created another new lending facility in efforts to boost market liquidity and bring some kind of stability.  The boys certainly are working overtime this weekend and last week, unfortunately their efforts are not going to be seen in the futures tonight. 

Emini S&P 1256.75 -34.75 -2.69
Emini Nasdaq 1675.75 -42.25 -2.46
Emini Dow 11723 -259 -2.16

We said 20minutes into the open Friday vibrations will be felt from BSC news. The market imploded soon after. Tonight many a mattress is feeling further tremors.  Tomorrow if panic sets in and there is no intervention, it will be tougher to play the fade and go against the down trend.  It actually may be quite dangerous if we go into uncharted territory..below Jan lows.

FED's sunday night

To understand the FED

Largecapbanks.pdf

"420" smokin out the Bears party ..

Where there's smoke...there's fire, or as in the case of the market, there's the smell of Bear hide after this days trading...

Maybe we didn't get the straight combination trifecta, but headlines of #1.  GS earnings, #2. FED, #3. VISA ipo pricing in mid $40's after hours is close enough.   All coupled you have to say we were off to the races.    How else would you describe a +420/91/54 ticket!.    Today was a beautiful follow through and a great reminder of why we love this sport.    Hopefully, we guided you in the right direction and you were prepared so far this week.    After all...trading is about preparation, whether it's through charts, due diligence or just experience and knowing what and where you should be trading at certain times.    As always, the point of the Journal is to lead, to give insight to our thoughts in respect to the markets and the stocks within.   For many of our members this is a huge time savior.  No clicking through hundreds of charts on a daily basis, no real due diligence on companies etc.   We provide the traders insight, trading methodology and the stocks to watchlist and use it on.   We don't need a 100-300 stocks to monitor, we have a compact Grade A watchlist of maybe 40 stocks that evolves day to day.   The worn out get tossed to backup lists, fresh faces emerge all the time.  Some previously used up and brought back and recycled.   This is plenty to be very profitable on and it's easy to follow.     We only have to watch the ticks on our stocks/list, concentrating on what is already in front of us and not going through endless pages of other information, trade prospects intraday.     We run a shadow service you might say.    So, let's leave all the hoopla to all the others today and focus on how this played out from here in about 48 hours and how you could make the most  advantage out of DJIM, especially if your are new to the scene here...

• Sunday night, we all got the shock of the $2 deal for BSC with the futures pointing down big time overnight.    We discussed the significance of BSC the previous Tuesday, it dampened that Tuesday rally for us.   Lost in the translation Sunday was the FED activity, we gave it half the Journal ..."Tonight the FED is proving to be adamant again on doing whatever is needed to halt the poisonous cycle by cutting the discount rate by another .25pts and created another new lending facility in efforts to boost market liquidity and bring some kind of stability.  The boys certainly are working overtime this weekend and last week, unfortunately their efforts are not going to be seen in the futures tonight".   Well, it might not have been seen by many as very important that night,  but 48hours later every talking head is on this ground breaking move.   Guess, its ground breaking when you see the powerful SPX climb from 1257 to 1330 within that time span.lol.     Come Monday at 730am, we shared a JPM report and the major changes within this next FED tinkering.   If you read the report, you were probably not surprised by the fight the market put in the morning at the lows and the springboard follow up.   So what should we all do?.   We go to our fave lists and start looking for something to chew on..trade.   You don't need us at this point to pick a stock, you should know by now what you favor after trading it many times over at DJIM.   You know what's been working the last month or two!.  This is what we meant by the ' usual suspects' we'd be buying in alerts 40 minutes before the close if the IWM popped 65.50, which it did less than 5 minutes later before giving way to last minute selling.   SAM a 5% day now sits near highs and CLHB are two others you should have on your Grade A list as we do.      We talked before Tuesday's open... "If GS and LEH come out with some assurance that liquidity isn't a problem and things aren't nearly as bad as people fear, we think this market may generate enough momentum to start a rally".     No guessing who were the darlings today is there.    The prices in premkt was the alert everything was rosy, we don't have to alert these things.   We also said,.. "The commodity prices 'apparently' all reversed today and took some pretty heavy damage.     In our opinion, if this is the first drop in a while, we are inclined to buy on the dip".    Apparently to others because we don't really trade Golds and Silvers.  The dip was Monday and we were buying them the 'usual suspects' late..anything like the often mentioned FDG,CMP,X, MOS etc.   You could have been buying late Monday or early on Tuesday any of our closely followed stocks and had a nice day by 11am after the GS/LEH gave the green light.     We outlined our intraday set ups today because it was an important day and the intraday ticks we were eyeing, we did get a stop at 67.0-.10 on IWM and guess what?.   The support line 65.50S was the bounce level after FED's .75 and then after kissing 67.40R for about 10-15minutes, the IWM exploded and the market followed in tow to a 420 day and left the Bears up in smoke.

If we thought Monday's day felt different than all the other reversals,  we are even more inclined to believe this has legs in the short term following this monster of a day.  The sentiment has changed, there is confidence emerging and there is of course lots of money on the sideline that won't want to miss the potential reversal of fortune.  In just 48hrs, the Bears $2 BSC ticket to market riches got screwed and there must be exhaustion setting in.    Coming into Wednesday trade, we expect a dip at the open or shortly, but we feel the trading environment has changed and money will be buying the dips, especially money coming off the bench.   We also have the advantage of a holiday weekend where the shorts may just rest instead of dealing with 3 days of what ifs.   Lots of the focus will be on the VISA IPO and will signal lots to the market. The pricing has already, now it gets more interesting to see.  We played some MA into this day even though there is this misconception that investors need to switch teams and do VISA now.   Actually, its mostly one ponytailed talking head spreading this smoke.  We think why not own both!. The painted close erased quite a few points, but AH's it climbed back up 4pts and we sold some just in case.  We'll look to re-position in this long running DJIM stock as we get a feel for the sentiment on VISA's day.    The GS and LEH are definite buys on dips going forward from here.   MS may add to the sector fire here today.    A few notes on our closely followed into the trading day, AG's-chem, the MOS and POT got some negative press from Barrons Online and either a early sell or buy the dip or both scenario exists here.   Also, some coals were upgraded at JPM this am (ICO, MEE).      Again, a reason to buy the dip when the market gives it.   This group is led by FDG in our books.   JRCC did a mall offering and will give an opp on the dip.   Remember the recent EPS day, if not just look at a chart and you'll clearly see what it can do. 

Oh yeah.."420"..guess you can Google it or ask your kids about..

Primary watchlist

A primary watchlist comprised of DJIM's closely followed as of close.

DJIM #12 2008

We don't like to dwell on the past, even if it's just last week, but what we experienced in all of 4 days last week may be remembered as a turning point down the road.   The BSC debacle, the commodity carnage, the FED cut(s), strengthening dollar may have intertwined in such a way that it signals a change of direction.   Still, even if we were all 95% sure of this, would we all throw our money into the market come this week?  Probably not, so let's not give a hoot about turning points and just take it day by day as we've been doing for a long time now.   Downside risk is not going away, even if the markets rally from here as the economy is no better shape than it was just days ago.  Volatility isn't going away either, we've had 28 days of +/- 1% days in the SPX already in 2008.   This week eyes will shift to Economic data and any pleasant surprises would fit perfectly in with last weeks action.    We're also about 2 weeks from a crucial earnings season kicking off and you know we don't believe in a market tanking just before such events. http://www.nasdaq.com/econoday/calendar/US/EN/New_York/year/2008/month/03/day/24/daily/index.html

As you know we didn't lose faith before the open Friday , even if we had every reason to be discouraged by the commodity free fall on the heels of a 420+  FED day.   We saw and still see the BSC and FED intervention on that Sunday as more integral to the market than the commodity shake up we witnessed.   The reports from GS and LEH were also very important ingredients for the financials and helps point to a bottom being put in on the sector.   This is much more important than any commodity bubble getting its due at this juncture in our view.   Early Thursday, we noticed IWM attempts at 67.40 and the more times you kick at the can, the better chance you have at a break move.  We also had some promise showing from GS/ LEH show up which coupled with the previous spelled a potential redemption day, we also noted the potential short covering to help out going into a long weekend.    The late afternoon was great and if playing our investment firms..GS, LEH you went into Easter weekend quite happy while the Bears were left scrambling and getting demoralized.   Being just under12400 DJIA at the close is significant, a move through here should take us to 12700-800 levels again.  

• So with this in mind and our readers, we've included a primary watch-trade list as of the close Thursday to take us into this trading week.  Setting this up relates to a Journal earlier in the week.  Some like the ETF's are for directional purposes on the market intraday, one like MF replaces the recent listed MBI/ABK to see trouble on the horizon intraday.  Stocks like AEM, SWC you don't see in Journal or alerts yet are there to monitor and trade a potential reversal in the Gold/silver miners at some point soon.  The other groups/ stocks you should know quite well from our pages.  Some like CHLB, SAM, HURC, LNN are recent EPS'ers of interest.   If say some stock is in the news premkt Monday, we would add it to our primary list and remove a Ag-chem stock like MON-CF to a secondary list b/c we really don't need 3 or 4 of them up on primary as they go through troubles now.  We don't need 5 Solars..Shippers on now either, we'll get all the signs needed from the ones we have up now to know if we should add a few more intraday to our main list.  This is a daily process, adding..subtracting..recycling stocks/sectors.  Simply, you don't need to complicate trading, you don't need tons of stocks to monitor or build yourself a wall of monitors to do well. 

We've held over the 3+1 subscription offer till March 31st as a few members are coming up for renewal at the beginning of the month. As of April 1st, the offer will be removed from Subscribe page and no special requests will be accepted. Thank you.

Sideways

As market participants we've become so used to turbulent days that yesterday seemed like too long of a walk in the park.   We've become so programmed to violent times that even slow sideways action that is 'good' for the market is excruciatingly boring.   Guess..we've just become adrenaline junkies relying on news headlines good or bad to get our fix for the day.   Yesterday was rehab for a day as normality returned.   What is left from the sideways action might as well be construed as constructive action.    We wanted the market to slow down from this recent rally and it did.    That's good part 1.  Another good point is our watchlist here at DJIM was 95% green, which would have given many of us some room to maneuver out of positions if we wanted to and told us we have a good bunch even if the market is mixed.     Right now, we are maintaining the idea of buying the dip on many of our favorites, yesterday was frustrating as most provided no such luck.    Instead many continued to run forward, especially the often mention lately names like X ballooning to nearly $127 intraday.  In runaway cases like this, we'd start to look more closely at other steel stocks that are behind the X curve like a MTL on our list if we can't get a dip on the best name out there.    Maybe , we'll get a little retrieve today to snag a few favorite names back.    Maybe the most important takeaway from yesterday was in premarket when MON raised guidance heading into earnings season.   As we noted heading into the trading day, pre-announcements are on deck and some reports are due that will most likely tell us if we are going to move further to the upside.    MON's raising guidance is a feel good start and comes at a time this sector was showing signs of slowdown on the trading end here.   MON's guidance holds the other Ag-Chem stocks on our primary and puts the junk small ones back on radar.   Maybe not on our radar, but maybe for some of you that like to play the cheapies like SEED.   One sector we started to watch is the Rail segment and added CSX as a start to our primary as it made new highs.   So basically not much to add here this morning, we're in buy the dip mode intraday and hope for some good to come out of ORCL after the close to set a tone.