Stabilizing or just holiday blip?

For the past 2 trading we've seen what usually signals a market trying to stabilize, indices sliding from green to red, red to green and so forth intraday, one major index green the other red at the close.   Yesterday, we noted before the ISM that the market felt like it wanted to do something in a big way, especially if the ISM came in beyond the mean estimate, either way.  It did showing a number over 50 which shows expansion.  The gap down was soon fixed.   This 'feeling' was in part because the FTSE stumbled bad overnight, we had a very negative futures pre-market, yet our shadowlist high beta stocks were acting 'fishy' well (AAPL, RIMM).    Sometimes when things don't make sense, they do in the markets.  To us it was a clue to what may occur later in the day.  Preparation is always a key in trading even if what you're looking for doesn't come to fruition. When it does, it shows you were on your toes and not bleeping yourself for a missed opportunity to make dough.    Unfortunately this fishy action and move faded bad and this soon smelled of  holiday blip of volatility as the market sank lower than the gap down as the FTSE approached its last hour of trading.  Doubt this was a coincidence as we mirrored the day drop overseas.   A positive came in the afternoon as a potential reversal started with end of day volume that  may signal a bottom, SPX shows what maybe a triple bottom.   For the market to stabilize capitulation is needed, but it does not have to come just yet.   The market can rally up for sometime before coming down again, in the meantime the market can reverse.  End of day preparation payed, high beta's AAPL, RIMM closed up 6-7 pts and the Financial UYG put in a big volume reversal day.  FLR, a E&C company had a 7 point move intraday feeding off the ISM number as we alerted. 

As far as we're all concerned about the action, well... okay, we're really not concerned because we're all " Shaleheads ", right?.    Simply, more data is to be released this week, including employment numbers which could fuel markets into next week or kill it.    We want to see this mkt up 2%-3% in either a big 1 day or on consecutive days to signal any possible trend change, until we should just focus with what's been working and let the big money others work it all out. 

Shales,   we had some very positive joint venture news from CHK AH's.   This partnership just confirms more and more the potential commercial development in HSP.  We're not concerned about what it may do to the Shales today, we're just more thrilled about the long term prospects for our plays.   As speculators get whiff off this play with momentum money, we may get more volatility in days and weeks to come.  This could always involve some selling, profit taking on any of the plays showing all mighty gap exuberance as we saw last night.  On the other hand momentum is a wicked thing, so who knows how far these can go in the short term.   Yes, more than ever after CHK venture, we think it will be a race amongst the plays for triple digits $100+ as we said the other day.

Steels,   if there was a disappointment it was the SCHN EPS follow through reaction we warned of.   The results were excellent, but initially we thought they may be cooked in for the entire group as seen soon after by the action in SCHN, X, CLF.   Just as since MON's EPS result, this group may have signalled a pause, but the Ag-Chem group is dealing with the recent USDA report as well so it may not follow their flight.   One thing we were impressed about is the rebound of the $CRX of 17pts late in the day.  We need to cut through a 6 day trading wall at 969 here to know there is potentially more breakouts in store for many of the plays/ groups and for others to just get going again such as the Shippers here in the short term. 

Update on Wednesday, July 2, 2008 at 07:56AM by Demi/ YourPersonalTrader

Update to acreage of Shale plays within DJIM world to most important player CHK's 440k net acreage,

HK  275,000, CRK 50,400, XCO 101,000, GMXR 21,000, GDP 70,600, PVA 63,000.   Remember, you cant just look at acreage without knowing share count and where the acreage is.   The medium value is 20k/acre after taking into consideration those within and outside of 15mile range of CHK's.   PXP, paid more likely 25k-30k/a.  CHK needed cash after all their land acqusitions and so this is best way of raising cash and go looking for it in the markets.