DJIM #5 2008

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

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

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

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

You have our respect, Mr. Market...

It just feels too easy that we would be starting a strong rally from such an auspicious beginning late Friday.    Sure, news flow has been pretty positive as of late with respect to the bond insurers.    But, they are only positive with respect to themselves really at this point, the bond insurers.    What we have today is definitely a divergence of force going a separate way.    On one hand, every single strong and good play we've talked about on the site for the past few weeks were doing some fancy upside moves, corresponding to the index action.   On the other hand, everything else just didn't seem to catch this 189+ point drift.  Poor AAPL RIMM BIDU, where's the momo in all of these?. Only FSLR continues to provide some fast trading action.

What's good about the unchanged rating of these bond insurers is good for some of the parties involved, namely the financials.  But they had other things weighing on them early and only started to move late after selling off Fridays upward move.   The financials are not done writing down more stuff.    In the morning,  Goldman Sachs noted that all of the major brokerage are in for a writedown of between 1 to 12 billion dollars this quarter with Citi leading the charge.   We definitely have heard this song before roughly three months ago.    Only difference between then and now is that we are in a much more difficult economic situation this time around.

Leadership in this markets rally is still very narrow.    Basically we are only concentrating on a handful of stocks and they are the same names you are probably sick of hearing by now.   Truth is, we'd like to start play some other names without having to chase those names that have become extended today.   New closing highs were always something we used to add pieces to as part of our trading methodology near the close on index action like today.  Now the market is such that you need to take the profits before they evaporate.   Unfortunately, nothing else is really coming up on our scans to turnover into.

Tomorrow, we have some key economic number to be released and they are PPI and Consumer Confidence index.    A disappointing number from those two would definitely cast a shadow over the recent rally and it wouldn't be a surprise if the market gets smacked down hard.   We've pointed out the importance of the Eco data this week and so we all should've been thinking of taking profits off by close to avoid some breakfast spillage.    Technically, you can say this market has broken out of the wedge and we are up from here.     But seriously, we just can't imagine many more positive catalysts down the road once this ABK fever wears off.     We have lightened up most of our long positions today and will be eyeing the economic reports to determine if it's worth to get back in for another round.

Plays that are working....

Agri.-Chemical,   trust us, even we are sick of seeing them POT MOS etc. going up and making new high every other day. lol   The truth is, the higher they go, the smaller the risk/reward and more cautious we get.     Ever since the group's break out on Feb. 12th, the group has not been tested to the downside.    It means that we have not seen any kind of meaningful pullback to warrant much more upside.     Sure, these names can move off a 190+ Dow day, but we all know that those days are still far and few between.     We are trading them still but with a much reduced exposure at this point.

Coal-Steels-Metals-Oil, you can't seem to have an up day without these commodity plays.    The ones on our watchlist FLS CLB FDG MEE and CLF HES are two more we've recently added... all had a good day.  Even our rock salt-potash play, CMP keeps making highs.

Biotechs like ILMN ZMH off here showed some strength as well.   Remember, we try to concentrate on earnings and most making NCH's today from DJIM were selected off their last reports/guidance this Q. 

Bottom line, although this market is rallying off ABK news, you still can't underestimate the power of a near 200 point rally.    Traders could use this as an excuse to chase stuff that was working well, regardless the relevancy.    Tomorrow will be a real test with the economic reports and if this market takes the reports well,  it's likely that this rally will continue a bit longer.

Anyways, today played out to script from our morning intro to the day.  The 'concrete' news came and it turned into a real drama for the shorts.  The financials were the beneficiary, GS and MER moved back up 6 and 3 points respectively and we didn't get the momo stocks participating.  Hopefully you didn't jump in as there was no confirmation of them wanting to play just like on Friday.  Basically, it came down to holding the stocks followed here for the past few weeks to carry the load.   And yes, the futures lied again as they set a negative/flat tone before the open.  They started to pick it up nicely in the morning before the news came rocking down.      Tomorrow is a mystery. 

Shifting Focus...

In a way, this market is getting extremely difficult to lean heavy in one direction at any point.    Even if you are a super bear, and with every economic indicator going your way, you still want to arm yourself with enough hedge to deal with a day like today.     This market started off just as everyone suspected but the turn of events in the afternoon astonishes even the most optimistic bulls.    Did it really matter what S&P said in the morning with regard to the conclusion of writedowns from major financial institutions or the housing rescue plan?    We think the market rallied because a lot of people believe that our Fed. will do anything creative to keep this market afloat, while delaying the inevitable indefinitely.     Of course, any policy announcement by Fed these days is greeted with warm welcome.   We just had a super 200 billion "cash for trash" injection announcement and now people are asking for more, at least they are hoping so.

More importantly, we have to understand why we gapped down earlier in the first place.    Perhaps our market here is solely focused on subprime and credit crunch crisis the last couple of days, while the rest of the world is however, only focusing on the weakness of the U.S. dollar and the strength of Gold/Oil.    The weakness of U.S. dollar basically hurts all those countries who export a great deal of stuff to America, which is just about everybody.    The high oil is also increasing the cost of doing business because a high percentage of fixed cost in transporting goods is the fuel.  With the dollar getting trashed, as traders, the only protection and hedge we can use is to buy gold and other base metals.     All of these factors are creating what we call an inflation environment here.     This is still in addition to the credit crunch crisis we are dealing with here that is still months away from being resolved, in our opinion.     The more Fed tries to save the capital market by boosting up the lending programs and lowering the rate, the worse it gets with the inflation as traders use every Fed policy to sell the dollar off, hard!

Fed right now is in a very difficult position as on one hand, they want to stop the bleeding in the financial market.    You have to give Fed credit these days as both the surprise rate cut back in Jan. and the recent 200 billion lending program came when the market is about to break new lows.  Basically, it feels that there must be a chartist out there working for the Fed to try to kill the bears in a timely fashion.     Oh yes, we forgot that this is an election year too.   The last thing Fed or the government wants is a financial market in total disarray going into the election.     This may sound like a conspiracy theory but you just have to admit the impeccable timing of both Fed's announcement the last two months.

Now that we know Fed can and will rescue the financial market, is there anything they can do about this inflation or the recession we are facing?   Absolutely nothing we think.    Both the inflation and recession are part of the economic cycle and it just takes time to get through them.    However, now that the Fed has signaled their intention with the financial market, the focus will be on recession and inflation going forward.    This is why we think the volatility of the market lately is the result of crosswind between Fed and economic events.    To sum it up, people are buying this market because of the endless bailout attempts from Fed while people are also selling at the same time because of the poor economic indicator which points to both a recessionary and inflationary environment.

With DJIM, we'd keep monitoring any ongoing events while keeping score of which sectors are getting bid up and which sectors are getting sold during this volatility.     Looking at today, Oil , Agri/Chem, Steel and base metal were all getting bid up aggressively.  

Just to highlight some of our favourite buy on dips play here, we like Oil stuff such as EOG BZP HES, Agri/Chem POT MOS CF, MTL CLF X STLD from the steel sector.  

On the short side, we still like the idea of shorting tech, shippers and solars on strengh only when fading the move.

Going into the trading day, the focus will rest solely on CPI and inflation.  The market seemed to have a memory lapse going into it.

A welcomed pullback...

We are glad that the indices pulled back 'some'.   It definitely takes some heat away off the overextended rally we've wanted to avoid.    Oracle's earning tonight isn't too inspiring and coupled with the always potential negative economic reports, we may see some further pullback.  This is all good news in the grand scheme of things.   One thing we may simply see Thursday is a disconnect between the DJIA and NASD off ORCL, if ECO data doesn't hurt the whole market.      The reason we keep saying this 'good' is that the further away we are from 12700 Dow and 1380 SPX, the less pressure it is to buy on the dip.     Market is actually in an interesting juncture here because we think it would take a lot of negative headlines to push this market below last week's low, which is still 700 points away for the Dow and 65 points away for the SPX.     That is a lot of ground to cover which means the chance of it happening within the next little while is slim unless something dramatic happens.  Oracle is not dramatic.

The thesis of DJIM here, is to buy on weakness while trimming some off on strength.    Unfortunately, the trouble we are having lately when it comes to work this thesis out is the fact MOST if not all of our favourite plays just refuse to come down this week.    If you look at today, and from the watchlist which we posted over the weekend, over three quarter of the plays still ended up green!   Takeaway the banks, which is something you can't play every day and the list is looking even better.   This is actually in fact scary because you can't imagine what can possibly happen to these plays if we are up triple digits.

What can we do?   Basically, not having any positions in your account while watching some of these plays like X, CLF, EOG, BZP, RIMM, AAPL... rocketing away in a down day is simply, unsettling.    So, at any time, we'd at least carry 100 or 200 shares of each just in case we have a type of day like today.     Honestly, without looking at the final box score, we really couldn't tell if we had a bad day simply by looking at our primary watchlist.

To review some action here...

Oil, today's surge in crude price not only broke the short term down trend, but it feels it has legs to challenge its recent high.    This is shown in pretty much all of our oil plays here.     We like EOG, BZP and HES the most as they are pure play here.    BZP also has a fresh breakout and notched a new closing high, the technical looks very good on that one.    RIG is another one we are now watching in addition to the above ones.

Steel,  this is the group which we are currently in a love/hate relationship.   We love it because it is the absolutely best performing group out there.    We hate it because we simply don't own enough of their shares and there has been literally no dip opportunity to add in the past few days.     This is really a pity because the higher it goes without any pullback, the more likelihood we wouldn't buy on its first dip.    In the group, we like X, CLF and STLD the best but just about every other name is also kicking in the sector.  This is the one sec you've noticed we've stuck with as the commoditity crunch came last week and our most mentioned X is becoming a darling with CNBC talking heads and last night it was Cramer pet rock.  Hopefully that doesnt ruin the group.

Agri/Chem,  as early as this Monday, we even had the idea of shorting this group as the technical picture just looked downright awful for the group.   However, one pre-announcement from MON changed all that.    The sentiment is again that this whole group will crush the number and guide higher.    We'd be very aggressive in buying any dips in this group including MON MOS CF and POT.    However, as most of you have noticed, there really isn't any dips offered in this group in the past couple of days so in a way we are kind of hoping market pulls back some again tomorrow.

Shippers, this is another area which we are taking some interest lately as the prior downtrend seemed to be over.    We aren't being aggressive in buying up the strengh last couple of days but we are rather taking opportunities to add when they get sold off along side the market.    We like DRYS the most but we also have EXM TBSI on the watchlist.  GNK another we may consider that's been here before if the sector runs and you want to purge.

Solars, this group has take on some very nice gains the last few days and we couldn't help but wonder how much further it can continue up.   The only play in the group that really interests us is FSLR so when it stops going up, we generally just wait and see what happens next with the group.

Techs,  not all technology stocks are the same and it pays to follow what is going on in the market right now.    We are staying away from the internet group in general except for an occasional intraday flip from the likes of BIDU and GOOG.    We'd be playing some RIMM/AAPL but feel the recent surge in price has been too much too fast.    RIMM's eps is only four trading days away so it's best to take it lightly at this point.

Other than the plays above, we also have ISRG, V... FDG JRCC (Coal plays), AEM (gold) that are performing well in this market.     In addition, it's getting closer that we can also give GS MS type a try on any further pullback.    Bottom line, we have some economic reports tomorrow that could give this market some cause to move and if some of our favourite plays pullback (keep our fingers crossed), we'd be there to lineup the bids.   Keep in mind, nothing is for certain in this market so we'd keep our sizes relatively small and spread out the purchase just to be conservative.   Lots of names in bold here, but that's simply because things are working off the list.

...a fickle lot

..and picky..picky aren't we!.  After the 3rd 3% day on the indices in less than a month, traders were in a corrective mode and excellent earnings were tossed to the side in many respects.    How else can you explain MON being taken down yesterday on the same numbers they only guiding up 2 weeks earlier?.    What did the crowd expect in 2 weeks?.    Last night we had RIMM report excellent numbers and guidance and the highest price it saw AH's was in the low 120's.    Not exactly the same exuberance as we usually see from a mighty report from RIMM.  Are these reactions a negative?.    In our view..no...as we are just glad the market did not do what it did 2 times off huge surges last month and that is give it up big time the next day, even with Bernanke's potentially damaging words in the market.     The market hit some technical resistance on the SPX and NASD and we need to do some corrective trade after the latest rally and no matter how good earnings are as of yesterday, they too need to be taken in stride.    Also, many stocks here need to set up to go forward once again, so have some patiance.    Believe that these earning reports are in the back of the minds of Bulls and Bears as they possess the ammunition to go forward and they both know it.   The Bullets won't and can't be used up to blow forward now as we have the employment report on Friday and so we'd expect some subdued action today heading into it.    UBS hasn't helped this morning by D-grading CSCO, but this should be pushed under the rug soon enough. 

Yesterday was an oil/energy day ( RIG, CLB off list here) and this included the Solars moving which had a lot of company specific news as well.   We all know how deadly solars could be and after this recent run, we'd be careful chasing as there many more things out there we'd prefer to trade...the steels/coals are still cooking..X, AKS, CLF ...the RIMM types off our list

Even though we'll probably get some subdued and defensive trading before the employment report, it doesn't mean there won't be a 'pocket' of strength in some sector and that is what we'd concentrate on.

No biggie...

As brief as it was, market today did break through 12700 Dow and 1380 SPX.    We know from a while ago how powerful and how meaningful  these resistance levels are to traders and their psychology.     The fact traders were not seeing a significant follow through after we broke through caused a wave of profit taking.    In the big picture, this is ok and it's not a big deal that we didn't close near the high today.   In our opinion, there will be more attempts to break those levels in the coming days and one of those attempts will break it cleanly with a rush of buying.      Also, the first half hour of trading action from the resource based plays was just too crazy and difficult to hold onto thanks to a flurry of upgrades.  The gaps were gifts to take down positions.     

Lets take a look at a few sectors here...

Coals,  we have FDG, JRCC, a rejuvenated MEE, and WLT now as our main coal plays and all of them exhibited a similar trading pattern today.   They all broke to new high earlier before retreating later in the day.    The catalyst for profit taking was ACI's mid day guidance call and we think this one is nothing more than an excuse for profit taking.    In fact, we'd be ready the next day or two to pick up some shares back if opportunity comes.    Again, we like this sector very much as pricing power and demand is extremely favourable for the group.

Steels, even though most of them did not close anywhere near the high, the common theme is that most of them notched a new high intraday.   X, STLD,AKS, CLF (coal as well),  all hit new highs.   This is one powerful group and expectation is very high from the group.    We are still trading them aggressively but we reduced our position sizes quite a bit.    Basically, trading X at $140+ just isn't nearly as comfortable to us as trading it at around 115 when first introduced on DJIM.    There hasn't been any pullback for 6 or 7 trading days and from our past experience, we have to be cautious at this point.

Agri/Chem, this group also is trading near the high on the back of MON and MOS earning.   POT earning is toward the end of the month and we think there's still room left to trade.   We'd go aggressive on dips and light when chasing strength.  This has worked very well recently and we'd go back to this strategy.

Shippers, even though earnings is still quite some times away but we feel with the recent activity in resource sector, this group is getting more attractive by the day.    We still like DRYS (thanks Barrons for 4 point gap) the most with TBSI closely behind.    In this sector, it is not necessary to play all of the names, you just have to stick with the best one.  Also, as the steels, coals get upgraded, we think it is a matter of time before they start doing the same to the shippers.

Solars, today's the first day where the group is showing some weakness.   We'd be patient and will be looking to add little bits at a time over the next couple of days.   We are eyeing 9 ema as a possible point to rebound.  

Time after time, as much as we like to move away from the resource plays and into some more technology oriented and other eps related plays to take full advantage of this rally, we still can't help but notice that we end up going back into the resource plays as our biggest trades.     Seeing is believing, whatever gets the most attention these days also gets our biggest attention.    At the beginning of the year, we had a feeling that this might be the year of commodity for DJIM.   So far, it is turning exactly into that.

Fed, who?

Another Fed decision day on tap!   Time sure flies these days!   Coming toward the half year mark, there'll be nothing but uncertainty ahead for the Fed into the next 6 months.   This Fed statement is going to be as difficult as ever.  Basically, taking action in their statement against one set of problem will hurt the other set of problems.    This time, we have inflation against economic growth, dollar against crude, financial sector against commodity sector.     The point is,  if they tilt one way to address one side of the problem it will definitely upset the balance of the other side.    In our opinion, it's best for Fed. to remain vague at this point until "more data " is revealed.      Addressing the high energy price and inflation worry does not mean Fed is going to take any immediate measure to counter them.    "We know the problem of this economy and market,  but we just do not have a satisfying solution at this point!"     This is most likely the best read we are going to get from Fed.  Wishy-washy.   Honestly, what can Fed do at this point?    There's simply no brilliant policy to improve the current situation.      Time is the only thing that can cure an economic downturn and/or an inflationary economy.

Ok, enough Fed noise!   Market seems quite oversold recently and some technicals formed today to suggest it may coincide with the FED. Spinning daily candles all around.   We are talking about the overall market, the indices here and we won't be surprised if a short term bounce starts at some point.    However, even if this bounce starts,  we are likely not going to participate as usual with the beta stocks because the next bounce will simply be a relief bounce at best.   Okay, maybe we'd flip one or two, but that's it.   The commodity market, will also react somewhat to Fed policy tomorrow and we WILL use any weakness to get some of our recent favourite plays.   Also, if the FED is wishy washy as we expect, the dollar bulls will not be happy and this will help the commods'.   If the dollar is to rally, the market needs reassurance rates will go up later in year.  These plays include many "Shale" plays and a few Steel plays.    Speaking of which,  in respect to steels, the RTP Australian price increase achieved of 96.5% for iron ore lumps and 79.9% increase for fines iron ore fines with a Chinese steel producer confirms that supply/ demand for steel making materials is staying tight, which should boost raw material and steel prices.   Higher steel costs in Asia should also lead to greater opportunities for the CLF' X's.   But, this is not the only positive for CLF as the world's largest steelmaker( ArcelorMittel) announced it had signed an agreement to acquire Appalachian based Vol Coal grp, which produced 1.5mln of met coal last year.  Severstal (Russia) has also supposedly submitted a bid for a coal mining complex in the U.S.   This shows the world thinks the U.S is an attractive place to produce,  it shows steel producers are more concerned with the guarantee of supply than costs.   CLF is a key supplier of the iron ore and the met coal they all need.   Arcelor eats up 45% of CLF's iron ore and Severstal recently renegotiated its ore supply agreement with CLF, guess Arcelor will be next!...No better way up for a big steelmaker to shore up supplies than eat up a CLF for breakfast in the future.

Coal and Agri have cooled off a bit lately and today Agri, possibly due to earnings jitters sold off at 2:30pm and many commodity plays followed.  It doesn't really bother us.    In fact, the consolidation action is much needed.    While coal and agri have been cooling off, we've been picking up the heat in the Shale and steel plays since last week as seen in latest alerts.    You see, it just doesn't stop.    We are going to pay particular attention to MON report tomorrow, as oppose to the other major event.  We'd likely save an entry, good or bad guidance report from MON until later.   The guidance that'll be provided during CC will give us a very good clue on the rest of the industry.    As for entertainment, we'll also stick around AH's for RIMM report, as a tradition more than anything else for us Canucks.

DJIM #26 2008

Really, nothing brilliant to say to kick off the week...everything we do or are looking to do is in the past weeks Journals'..at least!.  It's been a tumultuous first half, the noise of doom is becoming louder and we're still standing tall while the DJIA sinks 1200 pts this June alone, making it the worst performance since post 1930.   Bottom feeding is not our game, if we're going to spread our money out in this market, it better put in a few 2-3% day to the upside first.   Till this seemingly impossible feat other than for techincal reasons...we live by the last words here and so should all.   Some charts of our fave group stocks are up..not all...to show the potential of another leg up on breakouts...

Oh yeah, a short week gives us employment numbers on Thursday, just in time to potentially throw out the kitchen sink.  May just be a volatile 4 days!.

A few notes early morning can't hurt some of our groups...Arcelor Mittel, world's biggest wig of steel may have sights on RTP now, also MT has increased stake in Macarthur coal and PKX wants 10% in same, Lehman also upgrades PKX to overweight...JRCC acquires more reserves in hot Appalachia area,  Deutsche raises CLF to $150 from 115.   We've discussed all these types of possibilities the past little while...reserves, stakes, estimates climbing.

• The market, majority of sectors have no positive catalysts, the Shales (exploration & production), the Steels, the Coals....DO!.  It's simple, do you want to be where bearishness is contagious or do you want to be where bullishness is contagious? 

holiday spirit

Walking around town in this fine city of Toronto this week, there's no hint of a slowed economy.   Of course, we are talking about a big holiday week here where most people try to enjoy themselves.      When we walk away from our trading screen, and out on the street, we really don't feel the kind of gloom and doom this market fears.  Maybe that's because the major Canadian exchange (TSX) has been up around 20% in 2008, one of the world's best performers.  Why?.  Well, that's because the index is about 50% resource plays!.  So, Happy Canada Day, today.  Hopefully, our resource plays can survive today with the TSX closed today.;).   There's no hint of inflation, no stress and everyone just goes about his/her business it seems.    This is definitely a strange feeling, for us traders who witness all the daily doom and gloom reporting !    When we get back to work and look at the quotes of many companies that supposedly represent the pillars of the economy across the border, things can be so far from the truth.    Companies that are perceived as "American Icons", such as GE, GM, Citi..., their stocks are hitting new low on a "daily" basis!    On the other hand, there are those companies that do nothing but dig stuff out of the ground, are hitting new high on a daily basis.   Even US coal companies are popping IPO's onto the TSX here, one PHC, Phoenix coal just had a 18% pop going from 1.76 to over $2 yesterday.   Ok, the comparison ends here and no more philosophical discussion on how and why or if...

What we want to know, as traders, are questions of when is the overall market going to rebound and when is the madness of the commodity plays going to end?    Either question, if you attempt to answer this in some sort of logical way during the last couple of months, you'd have simply driven yourself insane by now.    We feel the questions are best answered by the market itself, whenever they happen! 

In the mean time, today's strength from DJIM shadowlist came from HK's rosy drill report.  We've highlighted these intertwined HSP plays, GDP, CRK, PVA, XCO will live off 'catalysts' such as results, acreage acquisition etc.   This could not have been more true than yesterday as these plays exploded.    HK provided very strong results, the initial rate is the highest rate so far of 16.8 mmcfpd.   It is twice the rate of those recently announced by ECA, PVA and an average of 5 Bcf per well can easily be assumed based on this.   They also announced acreage increased 83% from 150 to 275K net acres.

We noted before the open of possible catalysts for our resource plays.  We had a timely upgrade of CLF, and continued follow through action from coal plays including JRCC, also highlighted.    In essence, resource plays have covered about 90% of our most recent favourite trades.    Yes,  it'd be hard not to have a great day, even 20 minutes into the open.    Excitement aside, we still have to do enough profit taking to ensure that our hard work get recognized.    Also, we wouldn't want to call today's action a gift either because we'd been riding this for quite sometimes now.    The probability of an upgrade in the steel sector to estimates and stocks themselves, a turn in coal sector and positive catalysts from shale plays have all been discussed extensively in the Journals.  Don't shoot the messengers,  if sooner than later these pause, money should have been made already.  To start, it will be interesting to see the reaction to SCHN's eps today in the entire steel sector.  Will the probably great numbers be cooked in or not, that is the question!!.  Wait and see, here this morning.