..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. 

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.

Low Drama...

A pick up in volume, doesn't always translate into wicked action.    Today was one of those days where the volume seems heavier than average, but the stock action is overwhelmingly boring.    Of course, if you are heavy into the financial stuff, you actually may have had a couple of wild days in a row.     For those of us who are following the commodity plays, beta plays, today was not the day to get busy.    Basically, as we pointed out a couple of days ago, we have gone into cash mode to wait for entry.     Until this market gives us either some better action or better opportunity, we will be staying mostly put.   Lets run down a few sectors here for the heck of it...

Beta stocks, these include RIMM V AAPL MA GOOG SOHU..., other than SOHU (a nch today), everything seems to be in a consolidation phase here.    We want to make sure this market is able to hold the recent downside momentum.    There's really no point buying beta stocks now if this market takes another leg down off any potential bad news from the financial sector.    Playing this group is actually easier than the commodity group because all you have to do is to follow the main indices.

Coal, out of all of the commodity groups, this the group that's first on our buy list when it comes into range.    Lets face it, ever since the group's break out in the beginning of May, the group hasn't really had any pullback.    Right now, we'd be concentrating on PCX and ANR mostly but others like MEE, FDG, JRCC... can all fit into the profile.   So, it's a matter of personal taste in this case when the time comes again.

Steel, we have to admit, this group did have quite a run so far so extended consolidation is understandable.    We aren't sure how much more juice this group has left if another breakout takes place so we'll take other things into consideration when it happens. 

Oil, the ones that are discovering or proving more reserves are definitely faring better than others.    PVA CLR GDP types are holding much better than the rest of the oil sector.    If crude oil reverses the recent slide, we'd like to trade these more.    Believe it or not, even though crude price has dropped nicely the last few days,  we are still above $120/barrel!!

Agri-chem, this group is back onto the radar and a couple of them are nearing highs again.   This maybe the first commodity sector to turn to when a commodity reversal is evident.   Right now, we are only looking at some of the well known names from the past such as POT MOS CMP MON..

Solars, we just like to avoid this group at this point especially when FSLR is out there skiing in the Alpine.  After last Fridays gap this group has done very little with the German subsidy rumor.  As we said, we didn't chase the gap or look to buy until the news comes to fruition or something else fuels this group.

Yes, we know market action is kind of slowing down, so we have to be more prudent when it comes to choosing plays and their setups.   Bottom line, we'd rather miss an "opportunity" than getting into a potentially dangerous setup.   After today's data, the Friday's employment number may not be enough to give Bulls or Bears any leverage, instead we may get a play intraday on Thursday if the Financials don't cause more havoc.  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.