DJIM #18 2008

Despite the undeniable strength of the indices, the market,  some Bears are clinging on almost new daily interpretation of why this can't be happening.   The latest was evoked by what some, even some Bulls, may not have liked and that is how the markets pared their gains on Friday.  A shooting star on the SPZ seems to have given some Bears a glimmer of hope once again.   Oh, Please!.  How about the confirmed the DOW signal as the SPZ broke 1400 confirming the reversal in the DOW?.    Sure, the Payrolls shrank to 20k against the streets 75k consensus and indicates the recession is not really an imploding economic recession.   But, come on.   Lets' be realistic after Thursday's march up, are you not surprised profit taking would come in early even if this number was excellent for the Bulls.   We noted before Fridays open our view on the Payroll number, even if we got a bad number.    The shaving of gains Friday is irrelevant to us and if we get a further retracement Monday, we'd still be approaching this market with the same strategy and that is buy the dips.    So, after shaving the final tallies to +.4% DJIA, .3% SPZ and a small loss on NASD on Friday, the market still delivered an excellent week and that is all that matters!.    The FED has done everything, everything possible including getting into the act Friday by announcing further steps to stomp out the global credit crunch with more dollars and co-operation from the ECB/Swiss National Bank.    Simply, the FED is showing they are on the ball and even as the market goes up and fear is diminished, they are still showing they are right there to watch our backs!.     At this point the Bears could only be pulling at straws as too many things have gone against them and there is all the rate cutting consequences, the tax rebate checks looking them in the face in the coming months.    It's not a pretty picture.    Oh yeah and in the short term, it's good ole May trading time where it will be hard to draw up any volume to do any real damage heading into the summer.

Okay so onto this week.....last week notably, we had the techs lead the NASD to the market's leading index and the emerging markets in China and Brazil show some spunk.    One is showing signs of recovery , while the other is making new highs!.     As much as we have loved the Commodity trade in '08, we are enthusiastic to have the above 3 markets giving us more to play with!!.   As this plays out, our shadowlist will be generating a nice turnover or just grow into a shadowlist #2.   To keep your list tuned, follow the Alert-comments and Journal mentions to add and deleting should be obvious as you remove stale plays or sectors.    We don't need to constantly update, it should be obvious when you should remove themes like Gold/ stocks from the list as in the past few weeks to make room for new plays.   A few things regarding those emerging markets, we are not gonna go overboard now and think every stock in its sector will be going up as other times have allowed..eg last years China run.    Until, we have confirmation, we'll only know when we see it, we will be either very selective or just play the EWZ and FXI.   On a daily basis, we still expect the commodity plays here to give best bang for the buck from day to day.   You'd have to really wait a while on some individual Brazil/China stocks to get the % gains we all witness on either a shipper..coal on any given day.   With this mind and not to take away from what we know works, keeping to the ETF's in emerging markets is probably best at this point.

Anyways...the shadowlist is updated, a few notable charts and a list of potential earnings calls to watch this week.  Let's get it on!

..What can we say?

Things are just peachy, you can't say it any other way if we're all on the same DJIM page!.   As the trading day kicked off, the indices gapped lower and so we got more of the pullback we were pulling for here.  On the other side, our side, the $CRX was gapping higher signalling our commodity laced list was going to be just fine for possibly another day.    Slowly, but surely the list was getting crowded with green in the morning and we were getting 2 for the price of 1 special.    A pullback to ease the effect of the recent rally, an opportunity to test supports and eventually give us more plays than just the commods' in the days ahead.    In the meantime, we're riding the commods' to what can be a test of recent highs in the $CRX 970's and eventually possibly switch over to the rest of the market when/if the commods' are running on fumes with cash in hand.    But, we're not waiting for fumes, we're taking profits on strength as this carries on.     It could be the best of two worlds if the $CRX stalls ...out of one area and into the another to catch another move up somewhere else.    Maybe the stock planets will line up this way, maybe not...   The SPX ran a successful test of the recent break point of around 1397 and end of day was knocking close to last weeks highs.  So, technically its all fine and dandy.    We already knew CSCO would be somewhat irrelevant this Q,  MSFT proved the mkt was only concerned by what some still consider wrongly MSFT peers...IBM, GOOG, RIMM.    The only thing that mattered is that CSCO report would be clean and on the surface it seems that way, judging this book by its cover might be enough to get through this and the fact CSCO isn't the holy grail,  but if you look under the hood every primary driver of this company is experiencing slower order growth.    Oh well, not our problem to decipher, we're just going to react to the markets voice and take it from there.

Let's not forget the importance of any trading day and that is take your gains, slice and dice, do whatever you need to pad the accounts.    Not everyday is gonna be a SuNHY day!.. The good thing is no matter how extended some of our listed puppies feel, we've had new plays to toss out that are giving potential points galore quickly the past few days....ANR up to 5 (ANR, likely to become #1 coal here...alert section)( SNHY 5, MVL 2+ in just hours.   There's nothing like a hit and run when you beat the herd and get in early, you then sell to the herd and regroup and get ready to buy a pullback...recycle

a few blurbs this am ......strong eps from a few of our recent O&G plays...RIG, XCO and CLHB.  CLHB on the surface looks best opp', but remember being the first in a stock following eps could leave you stranded on top if you buy the gap.  We're just reading the shiny surface (headline) here, not whats in the report or 9am cc.     The shippers could be worth a strong look today.  SOHU cut at Deutche to hold.  Funeral reception for good ole buddy, SNCR is at 930am.

...making plans for the weekend...

When the market quietly reverses the day after a somewhat nasty late Wednesday charge, you begin to understand the big drop was caused by pure May complacency setting in.     Luckily, we've had some nice plays earlier in ANR, SNHY, MVL to get us through the week and can deal with doing little now.   There was no outstanding reason for that drop, nothing that seemed too matter much yesterday and that is why played in the green on the indices most of the day.   There was probably more reason to go down yesterday as the financials were under pressure and oil was gushing to $124.   Instead, we got an up day as the technicals took took over.   Right now, the SPX is within striking distance of many support lines 1385,1386, 1387, 1389 all have something behind them like last weeks lows etc..  Considering, we have no economic data of significance this week,  it is no surprise we drift along with no catalysts to trade off.     As we've said, we are very light in positions at this stage, mostly from profit taking and not wanting to buy these commod' rockets as the $CRX comes to recent highs.    This is one way and probably the best way not to become complacent.    We rather wait it out and see if the CRX can breakout as it sits with a NCH and just off new highs as of close before we decide to chase anything.   We may have no option , even though we really want a dip on our favorite names.    The way things are going, we maybe eating coal cakes for days as this group keeps on rolling.   We look at ANR and keep thinking this stock is so capable of pulling of a 3 day move like WLT, PCX have done recently.  This is one stock we don't a commod' dip because we think its potential is here and now.

PCLN, one of the few internet stocks we list showed it belongs there as it produced one of the best reports this Q due to global strength.  Raising of expectations is likely to come from firms in days ahead and we expect to trade this for another Q.   Gapping to 140+ will produce buying opp's on dips indays to come, we'd probably avoid chasing today unless we see more exuberance in volume than we currently expect.   We also have a market that will try to use any excuse to move and will probably overreact to AIG`s report.   It will be interesting to see where we stand end of day with this credit stuff once again a backdrop to the market.   The Armageddon cometh boys will probably begin to emerge from the sidelines and try to scare the pants off.    We`ll see, we`re in no hurry with weekend almost here....

Have a good one... 

Solid..

Anyway, you look at it....The trading day was solid and it doesn't include a disclaimer as in little volume!.  We've been alluding to the fact volume is and will deteriorate heading into the summer and so we can't put much emphasis into the volume day to day now.    In other words, a +130, +42, +15 is a nice rally, nothing less!.   Last week as the indices declined, we headlined, "Not worried" and heading into this weeks trading..."In other words, we're not really worried about the markets performance/ declines last week, we think this is all the normal course after a significant breakout".    Today's performance did nothing to squelch that belief with the IWM/RUT back at resistance with the potential to create a significant breakout.  The SPX back at the psychological mark of 1400+ is where we want to be while the NDX leads the market.  At these closing levels on the IWM NDX is where you want to see volume kick up to create a talked about breakout.     If we don't get the volume breakout the Bears will do their best to diminish the move.   Considering the way we've been grinding up, we just may continue to do so even on a breakout.  lol.  A slow burial for the Bears is just fine.  Maybe a few put a gun to their heads already as FDX, MBIA stories rebounded.

Nothing extraordinary to add today as all the recent alerted new plays continued to make new highs.  We are speaking of the SOHU ANR, SNHY, MVL, and even the BZP which we nudged a few times last week.    In the meantime if this isn't enough points pocketed, we have other tradeable opportunities stepping up as in RIMM and ENER.    As we said yesterday RIMM is long term again in our view.    It wasn't just the intro of the Bold device, it's the RIMM plan at analysts day that sparked a lot of interest.      If you were around AH's, you may have caught FLR with us for what is already a nice trade.   Management raised guidance to 6.25-6.55 from 5.10-5.50 on strength from all segments.  You don't have be a genius to understand this headline.     One sector though was priming up (Shipping plays) as shipping rate noise and as to why they are this high hit a few publications like FT.    Wow, what a shocker, we've only been writing about this scenario since DRYS was in the high 50's in March-April. 

Oh yeah, doesn't it feel like the sleeping giants are about to roar once again! .  Maybe its just withdrawal we are feeling from the Chemicals-Ag, steels, but with $CRX keeping its head up...who knows, we could be playing hard again very soon.

The premise behind DJIM has always been based on earnings and even in what is the worst of eco times supposedly, we are full of plays riding this methodology.

...cooling off

If investors were sitting on their hands the past few weeks waiting for a breakout and proceeded to attack yesterday, they were sadly trapped as those not sitting on their hands rightfully took their profits after being players for weeks.    Any other day, we'd consider such a reversal with a negative tone, but with the market really having no economic, no bad news yesterday..we simply look at it as a technical selling reversal.  The eco data was actually a pleasant surprise with the CPI coming in below consensus and putting a hush of sorts on the word recession.  The report coincides with the FED's eyes that there should be moderation in inflation coming,  but at this point during the uptrend in the markets you realize the market was expecting this sooner or later.     In Tuesday's Journal,  we noted we'd like to see volume to create a significant breakout and clearly we weren't getting that or the DJIA/SPX confirming the move in the NASD.     This was enough for the NASD giants..GOOG, RIMM, BIDU, AAPL say we can't lead anymore and their holders said screw this for today and created a spiral of selling interest that gained speed across the market indices, including the $CRX which was also breaking out.   The failure of the $CRX to hold or continue started to make the commodity plays we follow look toppy. 

The perfect storm scenario of breakouts everywhere was halted for the day, but what may have arrived is a reason to start buying the pullback at some point before we close off the week.    We don't think this pullback made the Bears overly excited, but we may give them some hope if we break Tuesday lows.   That's still about 120 and 25 points off on the DJIA/NASD respectively.  Simply, we don't wanna go there and without bad news it may be hard to reach this week.    At this point, we'd be looking at this as an opportunity to buy the dip in the next few days as many good plays started to look attractive again, this is especially true on any further downticks that look to be nothing more than some follow through action from Wednesday. 

Holiday weekend -DJIM#20 tonight

We have a holiday today here in Canada and some of us are just getting back from a weekend up in the country.  We'll do an in-depth journal tonight.  We'll be around during the day to trade with you.   Quite a few EPS from ships and solars to watch this week...take your time if a few are seemingly worthy of entry..selling on news a possibility.

..what's the fuss, we were fuzzy on CPSL, CLR

Sure, the major market indices from highs to lows have dropped 430/ 73/ 31, DJIA/NASD/SPX respectively, in a 1.5 days, but we've had some of the easiest gains back to back thanks to alerts on CPSL and CLR yesterday.  Not only were they easy gains, they were continous throughout the day and excessively high giving plenty of potential to all of us at DJIM to get in on.  Oh yeah as in CPSL, we will wait to get back in on CLR.    The same can be said from the excellent Forum discovery of PDO from last week.    When things run like these, our greed does not get as excessive as the action does.     As far as we're concerned their moves couldn't have happened at a better time as the market rests and digests the move from March.    Rest doesn't always mean sideways action, it means pullback off a lot of profit taking when the run is excessive in a short period of time as it was now.   We noted before the trading day the market may rest more than a day it needed last week due to the fact Monday's reversal was the 2nd big one in the last 4 days.  It surely did as it fell at least 240/40 on the DJIA/NASD by 2pm.  The fall was precipitated by a break of the 12893 DJIA pointed out day before.  This was a technical retracement level and it had no bounce in it.   When this fails as in any support, you know you are going lower and should pack your bags and head for the bunker in the hills for the short term.   But, this wasn't even the case if you had your DJIM list up and saw very minimal damage at 2pm.   Basically what we were seeing was a disconnect between what we trade and follow and what the market indices were doing.    Maybe it would have been better if our commods' took a nice hit and they still may, so we could recycle back into our favorites.    If this occurs today..tomorrow, that's fine with us as we liked the action in stocks like RIMM and a few other techs on our list, even things like V that were hardly bothered yesterday and showed resilience while the market was dumped out.  We think if a bounce is in the cards very soon these types may offer the best short term upside trade as they would climb with the indices.  The commods' may not.  We'll see....

The market has clearly succumb not only to a beautiful move from March, but to record oil and a dead dollar rally in the last few days.  A lethal combination if you are in the wrong places with your trading book.   Fortunately, if your on the same page with us, the DJIM page, you should be well ahead of the game and use this action to start to look for a potential bounce coming.   The SPZ held up so far a few points off the 1415 noted yesterday, but it does not necessarily spell the end of this corrective trade as it sits near a lower trendline possible break.    No time to be a hero, just wait for a confirmation of a trend change.    The other thing to remember... is be selective always in your choices as we try to be on new stocks alerted. 

..already shaky

Yesterdays late afternoon developments should serve as a reminder to all of us that this game is full of surprises.  Being complacent and thinking this market will continue to run to the moon is just a trap.   We usually mention at least a blurb on some economic data to be released that can play a role, but who'd thunk it we all need to be around and set up on our trading platforms for the FOMC minutes yesterday.  We weren't and were quite surprised what we saw once onboard.   Maybe, we should have considered that a shaky market from oil might plunge the market if something of a surprise appeared in the FOMC minutes,  but clearly that would just be too much analysis for traders !.    The release of the minutes included that the last cut was a close call, inflation outlook was increased and several FOMC members said it was 'unlikely..appropriate' to ease monetary policy in the near future.   This sent the markets tumbling down, but it surely wouldn't have been this furious if we did not have an already shaky market due to soaring oil!.   Oil was the push as the market was standing on one leg the past few days.  It was getting quite wobbly in the morning and the FOMC minutes was the shove to spiral the markets downward.     We really want to say this is the pullback we've  wanted.  Unfortunately, this pullback has occurred on a fast spike in crude and Fed's economic outlook.   Basically, the playing field has changed once again and we need to be on our toes if we ain't gonna live by the "go away in May...." and continue trading.    Yesterday, we said don't be a hero.  Today we can only repeat it when it relates to getting into any new positions unless you just want to swing a few around intraday. If you're holding through it's quite fine as we are getting into oversold territory and it's not the end of the world.   Do consider selling some though into any rally.   Waiting for Oil price dips is what the market will most likely wait on to pounce and bounce.    It just might become too predictable and we'll start to see volatile days trading off the price of crude.    Geez, that sounds like subprime stuff all over again,  if we get close to that volatility.    BTW, it doesn't help we're getting noise on the financials again including downgrades the past few days. 

The commods' are still showing strength or at least one is every trading day.  Yesterday, it was coals early on, but we are not chasing at this point day to day as we'd love a pullback to hit here of substance.   Interestingly enough after yesterdays mulling, European markets saw commodity stocks surge to bring that market back up to flat early on.  Will see if this crosses the pond or will even continue in Europe.  Just watch $CRX for clues.

a blessing?

It is going to be one long summer if the market gets oil massaged tick by tick.  Watching the market indices tick upward or downward on every Oil movement was incredibly boring and frustrating while holding in a tight trading range.    Hopefully, this obsession fades some over time, but at this point its clear nobody wants to do anything or dare to go against oil.     Thursday's trade may have had a lot to do with trading desks being emptied before the long weekend and Friday may be more of the same unless we get a short covering rally of sorts.    If you were still short heading into a 3 day layoff after a big drop with the chance of news come Tuesday...would you not cover?.      This would be a blessing as nothing witnessed Thursday gave hope of a reversal.      Maybe it's wishful thinking, but it's the only thing we can see happening Friday to initiate an intraday trade.      Despite the modest green in the major indices, we were hardly impressed with the NASD pulling off a +16.   Reason is the action in AAPL, BIDU, RIMM simply continued to suck even after the big stumble this week.   Considering we always use these stocks as a measuring stick of sorts on the market, we were disappointed and left wondering wazzup?.     We're not going to get the Financials leading us out of this,  so we need the techs to do something to lead out of this oily mess and it needs to include the above.    Maybe Merrill Lynch is thinking this by raising AAPL target to $215 from $186 this morning..lol. 

Early in the week in DJIM #20 (below) , we discussed the possibility and need of a pullback in Shippers and Solars.   Well, we 're getting one..one that gained steam yesterday for quite a few familiar names.     The difference though is our plan to buy the dips was in a healthy market, not one that has been drastically damaged this week.    The playing field has changed since and so we're clarifying this buy dip strategy here.    We can't see ourselves accumulating these names just yet despite the big haircuts.    Of course, trading opps' will present themselves as bargain hunters will come in,  so trade them if you can watch them all day, just don't love them again and take them home with you for too long.    Letting this selling play out and waiting for the market/ individual sector to make a move up first is how we're approaching this.    The same can be said for the rest of the stocks in our watchlist.

Shippers,  with EXM earning out of the way and DRYS set to report AH, we feel this sector is desperately in need of a pullback.    The further it moves up without a healthy pause, the more likely the group can take some beating on the next pullback.     We'd love to get back into some with sizes on dips though.    At the moment, the risk/reward is only good if we do intraday flips.

Solars, enough is enough, already! Lol    Ok, it seems it's never enough for these solars!   Our favorites have changed recently SOL CSIQ ENER... are just behaving like wild animals and we'd concentrate on these names.    At this point, there's no technical setup and the only spirit out there when comes to the solar sector is buy as many as you can!   Ok, again, we like pullbacks in this group and otherwise we'd only resort to day trades.

Have a great long weekend! 

...quite predictable now

Last Thursday..."..we are getting into oversold territory and it's not the end of the world.   Do consider selling some though into any rally.   Waiting for Oil price dips is what the market will most likely wait on to pounce and bounce.    It just might become too predictable and we'll start to see volatile days trading off the price of crude.    Geez, that sounds like subprime stuff all over again,  if we get close to that volatility".

This is exactly what we saw today as a substantial downward move occurred in crude ($-4.71).  The drop and roll scenario played out as lower oil brought out buying interest in the afternoon to close market around highs.   We don't expect this or any near term move to last further than say $125 Crude, so we'd ride the bounce tide until.     Tech was the strength...finally!.....On Friday....we noted....."This would be a blessing as nothing witnessed Thursday gave hope of a reversal.      Maybe it's wishful thinking, but it's the only thing we can see happening Friday to initiate an intraday trade.      Despite the modest green in the major indices,  we were hardly impressed with the NASD pulling off a +16.   Reason is the action in AAPL, BIDU, RIMM simply continued to suck even after the big stumble this week.   Considering we always use these stocks as a measuring stick of sorts on the market, we were disappointed and left wondering wazzup?."  

Okay, we got what we wanted post Memorial weekend not before, as the momo techs performed.   Shouldn't really be a surprise considering there was not much money left to play as of pre-holiday Friday.    These are momentum names we want to be looking to trade, intraday, short term before we consider the commods' as of now.    Today leading the NASD (+1.5%), RIMM, AAPL, BIDU were all up nicely and we 'll throw in V  off the NYSE as the stocks off our DJIM list that fit this trading theme.  Throw in SOHU too.    As of now,  we don't see a catalyst or even one in the very near future for this market to do anything but bounce here and then stall from last weeks oversold state.   Unless we can get a catalyst to out play Oil and summer boredom, we will most likely come down to last weeks lows soon enough.   Keeping this in mind, we'd be selective and keep positions small.

As far as we're concerned,  we are getting what we want here!.  We've had a great run with our commodity stocks and now we are getting a NICE pullback as the $CRX has fallen from the 1029 to 969 close today.    These are the same levels at 960-970 that we said on May15th in alerts was eyeing the 1000 mark.   The fall in shippers has continued, but finally found support from the 50ema for DRYS, TBSI.."....buying on dips doesn't mean trying to catch a a bottom, buying a 15% dip and knowing a trend has changed is different than now catching a bottom at 20%..we just always prefer to know a trend change has been confirmed and go harder than nibbling in".   We have seen significant drops in these stocks since discussing them in the forum last week.     Unless, you are trading full time and can flip fast buying these would have been unsettling only a few trading hours/days later.    The reason we are pointing this out is we all have to play it cool now and not let the malaise in the market take us down with it.   It is difficult to sit around, watch and not jump in on things such as seemingly over extended dips.    So, as of this trading close,  we have no reason to think the commods' are ready to go up just yet!.     What we'll do now is we will let the $CRX dictate any reason to get back in even if only for a quickie.   Remember..morning or intraday $CRX  seems to lead and we should have plenty of time to get in on a steel, coal..whatever.    The doldrums are no reason to chance now and blow the rush, including your profits, we've had from the mid March run.    There are better things to do this summer than blow it now, so be patient and be selective.     There is also a lot of noise around the Financials now that has an unsettling tone suggesting we may be in for some problematic surprises.    You'd hate to wake up to some surprise at this point.  We've all been through enough of those the past year.

...a tad frustrated...

We can't make buy and sell decisions for our subscribers,  but what we can do is lead and hope most follow the drift.  If succesful in the past from doing so,  you'll continue to shadow DJIM.    Hence, Shadowlist and Alerts, Journal etc.   Our site is different from others, we put it on the line daily as not many do.    Our language has to be one way and we do have do mince our words in Journal and Alerts to some extent.      If you don't get yet it,  you'll never likely will.     We do what we do and we can only go so far without being Advisors.     Please read the disclaimer at the bottom of our Journal pages from the last 2 years.        It hardly means we are always right,  but we do what we say and you just might have to learn to read between the lines.     The reason we say this is we get dumbfounded by some comments as yesterday showcased,  but we are also pleased some get it as seen in response.     We want everyone to succeed from our site as this is not about us!.    What some still don't get is our question... if you don't get it or are new to DJIM...email us and we will walk through it with you.   We've done it in the past and we'll do it now with our subscribers.    If there is a question about if we do what we talk, we can prove.   In other words..walk the talk!.    We have our managed accounts, which include some members of DJIM that can confirm we trade what we say and also say we've produced 70% return since last summer in the worst of times.

We said in the morning...."As far as we're concerned,  we are getting what we want here!. We've had a great run with our commodity stocks and now we are getting a NICE pullback as the $CRX has fallen from the 1029 to 969 close today.    These are the same levels at 960-970 that we said on May15th in alerts was eyeing the 1000 mark"....

We got we want want and we aren't alerting a potential bounce in Alerts at 10 o'clock to waste an email or post.    We don't waste space unless we think we need something to be considered amongst us all.    Right or wrong, we had a change of pace from morning Journal and we spit it out early.    This could be the time!.     You know what "showing some bounce" is and you know what sec' could go and everything it falls with.   We can only lead and if we thought a reversal is potentially there finally, we alert and that is what we did.   " A heads up of sorts"..are the words from the forward in Alerts page.     We've said enough that the $CRX will tale and it did as everything under the commodity sky boomed during the day.   The only ones who didn't notice were the puppets on CNBC as all they reported was a flat and boring day..all day.    It was incredible as our shadowlist lit up like a freakin' christmas tree after 10 as they kept talking Oil mumbo jumbo.       It's irrelevant if we held positions into the close..money is money and if a X goes as an example from 171 to 176 in a few hours after an alert, you take the almost 3% as a walk off Home Run.   That's a lot of points and easy points.    If FDG ( a COAL!) is mentioned, it's an option as is every other coal stock we have profiled if chit moves.      ANR, PCX , MEE ...blah blah.    That's why a shadowlist, a watchlist to know what to trade.   You make the decision, we can't on your buy/sells.   Any coal stock after 10:00 am would have been a winner!.     Simple.   We really enjoy writing and have made a great a bunch of friends over the years on the net,  if someone doesn't get it yet or how to approach.....please email us and we'll help.    We doubt we have given any stocks that are down in 2008 and if your balance reflects a poor year....we should figure it out together and see what's the problem.   Yeah, a little peeved just because we want all to succeed here.     It's simple as that!   If you didn't catch the BIDU, FDG..coals,  X, you need to figure out why you didn't.    The market was a mess up according to CNBC all day,  it wasn't here.   That's all and honestly don't give a damn what today brings after yesterday.   If you have a comment, we welcome it to our email.  

DJIM #22 2008

Over the weekend it seems many were saying the 4 day shortened trading week was much ado about nothing with not many stocks to chase.  That's true if you are judging this market by the DJIA.   Here, we are not as the concentration on commodity stocks continued with two big days sandwiching one not so.   That's fine as it presents the chance to recycle your favorites over and over again.   Also, quiet important was that the market was mending itself after the previous weeks fall.   We said be patient and let things settle down heading into last weeks trading and that is just what we got.    The healing process is most evident in the IWM as  it seems to have confirmed its breakout over 73 after a test.   We also had the NDX confirming the earlier breakout over 2000 by putting in a nice week.   It's clear from these broad indexes there is a big game going on between Oil vs. Tech.

Heading into this week the playground for DJIM remains the same.  The only differences to note week to week now is which commodity sector is best to trade at that particular time.  Example of this is just as we were once again becoming cautious on the Solars important subsidy news surfaced out of Germany premarket on Friday which made solars gap up at the open.  If this news comes too fruition, we will have all the time in the world to chase these stocks over the next Q as the news is quite significant.   One thing we wont do and didn't do is chase the gap open we saw on Friday, instead we are just moving up this sector up our trading ladder and we'll keep a closer eye on the stocks here.    We'll keep saying.." Out of all the commodity groups, coals are still showing the best technical with steels a distant second".    The amazing streak in the coals continued with DJIM's bushel of ANR, PCX and FDG making new highs on Friday.  MS has put ANR on overweight and FBR has put PCX as a top pick at their firm this morning while raising estimates on the whole sector.   We can only ask what took you boys so long?.  Always better to be early to a stock party isn't it or be stuck scratching your head if PCX is now too expensive at $108.   It was profiled here April 15th in the low 60's.

Really nothing has changed about what we'll most likely continue to trade, hell why would we!.   Until, we'll just pluck at a few new plays here and there as they emerge like on Friday with PVA, which even after a gap open managed to pull off about 4 pts after our alert.   We simply liked the idea off going back to the 'WELL' after our CLR play and just waited for the right time to alert.    If you want to get into the tech fever, we think the only stocks you need to trade are the RIMM, AAPL, BIDU, SOHU, GOOG.   If you want a few DJIA stocks, there is nothing wrong with concentrating on V, MA.    It's all there on the Shadowlist simplifying what we should be looking to trade depending on what area of the market is moving.   Have a good week!

**NOTE-  We added a direct link to the DJIM Shadowlist on the navigation column that you may enjoy.  Scrolling over names allows you access more info and you can change all charts to daily just above the first 3 charts.  We will update every week or two, until use new names from Alert, Journal to add until.

nutty...

We'd prefer to go to a ride park than go through the up and down swings with market so far this week.   Some may say the almost seemingly miraculous recovery late is a good sign, as far we're concerned a -100 day is -100 day!  Down is Down, yesterday just engraved in our minds to stay cash at least till Friday's possible employment trade.     Some triggers for further downside went off and this includes the $CRX that we use to gauge the commodity plays here.    We may have been only a few hours early in our last commodity Alert and last Journal when we said the 'toppy' feeling is in the coals.    Those were some nasty reversals in our favorite coal names and a short term top might have made in the morning.   It's unlikely these stocks will break to new highs while the market goes through some turmoil.  Considering, we've been living off the commodity stocks, we're not going to go elsewhere just to trade.  (This includes going long Ag's-Chem for more than an intraday swing unless we see continuation this week).  Remember..solars recent big day, not much has happened there since.    We had something like 11 stocks off our list hit new highs during the day, we want to see them duplicate this feat before we chase them again.

Oh yeah...the market and oil going in the same direction,  Lehman buying shares in the open market to prevent a free fall in their stock before issuing shares makes for a slippery playing field we'll avoid. 

Secrets of trading revealed!

SSSShhhhhh...don't tell, okay?.  We're working on the home version to get out on the market before Xmas.  What is it?.  Maybe you've figured it out by now, why else would you guys still be here!.     Well, we could all do it this weekend and we could all add to crazy U.S buyer who just doesn't know how to quit and stay out of the mall,  off the streets according to the retail numbers.   It's simple...get the board game of 'Wheel of Fortune' and tape over the spinning wheel and its individual dollar values with commodity stocks off DJIM's shadowlist.   Replace the $500 with POT, the $1000 with X...etc..you get the drift!.    Yep, that's the secret and all you have to do is keep track of the $CRX before you close eyes and spin away!.    Of course, it would also help if you read the DJIM Journal and pick up on things we are watching for or anticipating wishfully such as in yesterday's final paragraph.     All week we were anticipating not doing much before the employment report, but that all changed due to some precursor data to the report and so we said."..instead we may get a intraday play on Thursday..".  Add to this the idea of traders fascination with 9ema, 50 ema and you needed to understand the cliff diving $CRX was at its 50ema and needed to be watched closely..." The $CRX has fallen to the 50ema quickly (980 to 943 this week), we'd love to see it slip some more and after do an intraday reversal to spell a short term end to the downside.".     Simply, we just try to lead by giving our perspectives, our thought process to the next trade in the Journal and if you only want to live off our alerts, you're missing the purpose of DJIM.    To us it's a Diary and even we go back and read our stuff so we don't stray from we were or are feeling and doing.    Call it a bunch of 'post it' notes to self.    Anyways, we just had the biggest rally in over 2 months with anything from the Retail to the ECB comments to $ strength to initial claims to an Obama rally or is it really just Hilary finally giving up as the reasons.    Who knows, who cares!.    What matters is these ducks lined up and mother duck $CRX was sitting on 50 ema and the belief employment numbers may only surprise to the good side.   Interestingly, a surprisingly very good report may now get the reaction we don't want and the market will sell off due to noise of what the FED will do next.  Be careful if you left profits on the table, it never hurts.

We'll leave stock specifics to the weekend edition of our Journal after we monitor today's action and get a clearer picture of what the rally really means to the market for the days ahead.    For now, we're on the hunt for ice to get through what will be a scorching hot weekend by the lake over here. 

If you click on the shadowlist and change screener setting to new highs, you'll see about 8 off our list.  We'll update the link over the weekend, but it's pretty obvious the only names that should be added are the shale plays to go with PVA...HK, GDP 

Have a good one, all

..wagging the tail?

Did the market wagging tails like a dog signal anything of significance at the close?.  Did it signal a nod of recognition to get traders back in the game?.   If a tail is truly a communication device , well then we were being told we should think about buying because of the tails forming on many a stock and index end of day.     Did we?..Well, no, not just yet as we know confirmation is needed in this market and we'd rather wait till the next morning because we never know what we may wake up to.     Wakey, wakey!..it looks like Bernanke wagged his tongue late in the night and has sent the dollar higher by hinting more than ever the cuts are done with.   Chances are any late day buyers holding overnight will see there gains flushed away in the morning.  Are Bernanke's comments enough to block any technical momentum formed late in the afternoon?.   The futures suggest such, but we know the futures are the biggest headfake around these days.    Be prepared for anything intraday now as big moves should rule with volatility back in the game.   Buying the fade for a flip may be the flavor making a comeback intraday.

As far as the trading day, besides the "Shales" being the new Solar ;),  it was looking quite pathetic.  Even the CRX was ready to eclipse the previous trading day lows, but then seemingly out of the blue stocks like RIMM started to move, even the commodity index we track closely reversed nicely...  Hmmm, one look at a few things like the NDX, SOX and you understood why.    A reversal was occurring as these hit the 50ema.   Yep, the same 50ema which we just saw balloon a move in the $CRX recently.   But, do we really care about the NDX?.    Yes, we do for the overall health of the market, but the concern here is Bernanke popped the commodity run for today as a higher dollar psychology will hurt our winning plays.    It may hurt more than usual if you haven't been taking profits along the way, but it also should be looked as a possible opp' in the near term.   Any exaggerated drop in our commodity plays is a strong possibility at these lofty heights.    Watch the $CRX early on.   A game of dominos potential is there, never think your hottie stock is immune.     Overall, we'd look at drops as an opportunity to pick up some favorites on the cheap sooner than later.    Dollar or no dollar noise,  strength in these commodity plays is not going away in 2008!.   It may get stalled here and there, but it ain't going away.  

As you are well aware of, we don't look for potential bottoms to squeeze out a play in individual stocks and we're not doing it here on any potential technical reversal signal given along the way.   We always want confirmation on stocks ..a change of pace and we definitely want to see one on the indices before buying back into this game.    The brutal action from Friday is fresh on traders minds, scars were left and they didn't heal overnight.  We are maintaining a very light exposure to stocks...commodities ...widgets.