Maybe the market is disappointed that Microsoft was not able to pull through a deal with Yahoo, index traded down most of the day and ended near the low of the day. So, market had a pullback, right? Well, only if you aren't trading the DJIM stuff! To all of us playing the DJIM market, today might as well be a triple digit gainer day. From the beginning of the day, we were actually hoping and looking forward to some dip buying opportunity when we saw the softness of the index action. However, it doesn't take long for us to realized that we better chase some action or else we'd be sorry for our inaction. Are you following the $CRX we noted, support of 907 was regained late last week and today it gap opened 930!. To put it simply, today's a superb day for majority of plays on DJIM watchlist. We were very busy buying high and selling even higher. Yesterday, we said the commods' will still offer the best bang for the buck on any given day....did it ever this day! It is really hard to imagine what some of our plays would do had this market been in positive territory.
Still, we are glad that this market has this much needed "pullback" occurring!. To be honest, this market does have a little over heated feel going into the week. One day worth of pullback isn't probably going to alleviate this overbought feel but it's a start. It relieves much needed pressure for this market to pullback. Our original plan was to use any market weakness to get in on some of our favourite plays but this isn't the case today. Basically we know how this goes, when a sector is hot, there's nothing to stop it from going up.
MVL, we also added this play and consider it a story stock due to the Iron Man flick that made 100mln over the weekend. Its first self produced film release. This opening guarantees a sequel to go along with Thor, Captain America, Avengers flicks in the next few years. We've traded this years ago on the same sort of hype and recall it being a nice story mover. It also reported EPS and all is swell, so it fits here. Anyways, it doesn't hurt to look beyond the obvious plays and play something outside the box once in awhile.
Today's strength comes from pretty much all of the plays on DJIM watchlist. Ok, there's really no need to point out the gainers one by one because one just needs to only look at the watchlist. Coal group had a boost from of course the CRX, but also the multiple price tgts increases for WLT and a EPS report from the alerted ANR (yesterday alert) that popped in the afternoon nicely to almost $58. This is the group we liked the most from commodity sector from late last week if you remember. Oil stocks also had a big day because we had another strong showing from the spot market. Basically, it pays to buy oil stocks on weakness.
Today's the day which proves what happens when you trade the "right" kind of group. Tuesday we have the CSCO report to watch for but we think Cisco hasn't been a factor in a long time. But as we see with MSFT/YHOO, the market will use any excuse to either sell or buy up a day. In any case, we are sticking to "buy weakness on a slow performing day and chase strength on strong performing day" with respect to our plays.