All geared up...

Basically, there's an equal consensus that we are setting up for either a big down move or a big up move.    The problem here is that nobody is willing to put lots of capital down to bet on either direction.     Not yet, at least!   The way this market has been trading, you realize it wont be a slow grind up or down.  Before the open, we said, "...we may get more of the same and that is consolidation action taking place early in the week." and that is exactly what we got as the major indices traded in a narrow range.

If we want a rally, we have to pay attention to the financials.   We have said often before that this market can not rally without the participation of financials and we saw that last time around.    As you can tell from today, if it wasn't for the financials, we'd probably be up by triple digits.    The ones who are currently on the sideline waiting would probably jump in as well if they see a better behaving financial group.     However, this subprime thing just doesn't seem to get old day in and day out.   For DJIM traders, it's the same.    Until we see financials move up as a group, we wouldn't want to chase anything aggressively.     For now, it's best for us to wait for something to happen before deciding to act.

Of course, if sitting in front of the market and doing nothing doesn't seem to be productive, so there's always the entertaining Solar plays and as well as the Chemical/Agri. group and the new group (coals) we intro'd in DJIM #5.    We are actually astonished by the behaviour of Chemical/Agri. as many of the popular names got some life today and could be setting up to challenge its old high soon.     Again, if this market is in a firm rally mode, we wouldn't hesitate to chase MOS POT MON in sizes but due to the lack of true direction of this market, we'd stay to trading small sizes. 

CMP, a potential fertilizer' play noted in Alerts section xmas time came out with excellent earnings AH's, unfortunately it had a nice pre run today already and so tomorrow may be more difficult to move.

Coals, again this group performed well led by ACI and JRCC in the cheapie category making or being at NCH's.  ARLP, NRP , CNX fared well as well.  MEE and FDG lagged today. One thing you notice about the group is all the stocks don't move in stride.  This could change if this sector becomes more of a momo group as the others did.

Solars had a very decent day today and you can either attribute it to the rise in oil price or the anticipation of a great FSLR eps report.   In either case, we'd only make intraday moves with the solar names because of their inconsistency day to day this earnings season.    The FSLR report carries pretty heavy weight on the overall sector and we surely remember what happened to many solar names when FSLR reported last time.

Bottom line, we want to stay light at this juncture and wait for more clues before jumping into a trading conclusion.    There's quite a few earning reports this week and a key retail sales number to be released mid week to possibly entertain us.

In Da Buff!

Well, at least that's how they call home next door in Buffalo.  In the markets it takes on a whole different twist these days!.   None of us should be surprised by today's market turnover.    You don't have to unwrap this market, you already know what's inside this box of tricks.   We highlighted the primary supports and resistance levels heading into the week, but before we get there we need to bypass a few secondary levels and today we got stomped at a few.   Most noticeable the 12400 on DJIA, we highlighted.  To get more technical you can see the QQQQ and SPY (S&P spdrs) did a u-turn and came up against the gap down highs from last week.   When you see things like this come to a screeching halt on charts and witness it all first hand in your watchlists, you can't help but wonder if we are to resume the downtrend.    Today's action was brutal, the quick move of 220+ up on Buffett was not Warren-ted and it proved so by end of day.    You see all the fixes including rate hikes, gov't lifelines and this news today don't do anything for the markets right here and now.   Buffett's 'guarantees' are for municipal bonds, they are not guarantees to turn this market up and get it roaring for more than a few hours or days before it bends over again..   All these maneuvers will graduallyl help the markets confidence over months, but what we need now is a flush and /or at least a test of lows.   No rally is satisfied knowing those lows need to be tested and we'll never get the rally we want if we don't go there first.    Market is just putting the inevitable on ice and so while on ice, we'll continue to get the melt downs we saw today.    This equals sloppy driving through the trading day.  On to the slop....

Ag's-Chemicals,  this group has had us teeter tottering for the past 3 days or so between trading it long or short.  The action following good earnings last week was quite meager following giving credence to this group possibly topping out.  Yesterdays action which we noted as surprising followed through early today.    What we didn't know is there was a Goldman Sachs Ag conference call for these players up today.  This explained the action yesterday and very early today.   Like a pre earnings run, we think we just had one to the conference and possibly nothing more.  As the conference winded down, we had these fall hard from NCH levels.   MOS and POT most notably.  This may have been a distribution day and so these may be topping out for the immediate future.   We will know better tomorrow following the AGU report.   If the report is very good and these don't react positively this will be a repeat of CF's upbeat disappointment the following day and we'll know its more likely a top here.  

Solars, as we reminded yesterday,  this group can't be trusted day to day now.   You might miss some nice days like Monday, but you may miss some pain like today as well.   FSLR, did a pre earnings day run, except it was a backwards one which saw it sliding $21 from high to low of day. It reports in the morning tomorrow and will probably beat handily.    It will be interesting to see the reaction..How good a  beat is cooked in?.   Be careful premkt if its not a beat of substance,  premkt lies a lot these days. 

The Coals jack-knifed today as if they had a momo group complex as well.  We'd look to pick up pieces on dips to get on this hot story in early '08.  It's definitely getting some attention now.

A few stocks off our recent pages managed to hold on to the green, so let's give them some print....

CMP, noted yesterday, looked finally discovered as a play with an Ag' angle as it rocketed from $47's open to 53 and managed to hold on to the gains on excellent volume.  Will need to digest these gains now, so if you missed it this morning its' probably best to wait on it and the sec' it put its head into today.  Another recent alert FLS touched $100 today and should not be left off any watchlist.  A few of the medical supply co's like BDX and new one we added some of today, ZMH , held on.  We'd throw in ILMN with this medical flavor even if its listed as a biotech.  On the cheap, VLNC painted a nice chart the last few days and has December highs in sight.

Bullish surprise...

We have to admit, even for a bull, Wednesday's rally was a bit overwhelming.      Many traders just aren't prepared for such a move given Tuesday's not so impressive finish and the constant giveth and taketh attitude of the market intraday.     It of course,  all started with a better than expected retail sales number that helped ignite the good sentiment.   On the contrary, many retail stocks actually closed relatively flat today.   It was pretty much a broad rally where even the beaten down techs like AAPL RIMM and GOOG all had a good close.    The one group that didn't participate is the Agri/Chem.   We have noticed that this bunch looked a little toppy recently, but we are still surprised that the extreme market bullishness did not help the chemicals/agri at all.   All in all, we hope we had you prepared for the possibilities leading into the day.  This included the idea FSLR would beat handily, the Ag's-Chem's possible reaction to AGU EPS and the dip on the Coals to take advantage of possibly.

As the Dow took out Tuesday's high..12400, traders just rushed in with more buying.    We are actually getting closer to the previous resistance of 12800 heading into options expiration.     One thing we have to give to this particular market environment is that every major move is done in such a relatively short time.    It literally goes its own way without traders preparing for a proper trading strategy.     Basically, we have to either chase up a bullish move or sell short on down tick in order to maximize a play.     Does it sound scary?   It actually is.     If you are feeling you've been under performing this market, either when it's going up or going down,  you are not the only one.   You almost have to guess the trend and get in before a move happens to take advantage.  This of course also relates to some sector plays as we saw yesterday, it is impossible to prosper as we'd all like because the stocks in the group are up 10% by 930am on light volume before you had your first cup of coffee.   As much as we are flexible in trading, we just can't simply put on both the bear and bull outfits at the same time on any stock, group or the whole market.      Right now, as we inch closer to the previous resistance in such a short time, the risk/reward to go long at this point isn't that favourable.    If we were to assault 12800 meaningfully and hope to take it out, we better consolidate the next little while before such an attempt.     We are eyeing 12400 now as a short term support and hope to see some consolidation back and forth for the next little while.    At the same time, we are keeping our eyes on any economic development and the situation with the financial sector.

Now some plays...

Solars, it started with FSLR and ends with it.    We are talking about this sector run here.   We recall that FSLR did the exact same thing with its last quarterly report and basically lit a fire across the entire group.   This time though, we think we all should exercise some caution because we have been getting mixed earning reports from some key solar players.    We'll take today as a good and solid solar day but we have to be smart to take profit in this environment when given the chance.

Coals, this group had some very good action and most of our recent mentions have done well.   We like this group because buying the weakness usually rewards.

Shippers, this group has also done some major upside move just the past few days and allows to flip in and out some during the day.   We do want to caution that the run up is pretty extended at this point and if it looks that way to you, it probably is getting close to a pullback.   We'd be inclined to buy on pullback though due to the recent interest in this group with the BDI climbing seemingly every day now.

Let's see if the market continues to shell out the luv on V-day!  This depends if Bernanke's testimony doesn't include "MISREMEMBERED" something as Roger Clemens testimony did;).  If it does this market will take a flogging like Ace did.

DJIM #7 2008

It's just simply getting very technical out there.   Although headline news may dominate the movement of a particular trading day,  the overall movement of this market is becoming more range bound with the underlying downward bias still holding.    Things are tightening up on the technical side and we feel a move is coming sooner or later to break the latest range.   The more likely scenario recently has been a break to the downside and a test of last week's low just under 12100.   However, we may get some surprises judging from the futures trading at the current moment that coincides nicely with Fridays reversal led by financials after a BBY warning and weaker NY Empire number, Michigan sentiment.  Is the market starting to price in some of the bad Eco data?.  Well, we'll definitely know after this weeks data. http://www.nasdaq.com/econoday/calendar/US/EN/New_York/year/2008/month/02/day/18/daily/index.html

Quite a few earning reports and some economic news dominated the pace of trading last week.   Even in this recession fearing trading environment, we still have market participants speculating on earnings reports/guidance to the long side.  BIDU FSLR PCLN and even the CMG, we noted before the Friday open as a possible trade after the initial sell off.   This goes to show that speculation money is still out there.    This is definitely good news if your trading time horizon is no more than a couple of days at a time and you don't swing with huge bets.   After all, this market is only rewarding those with a quick trigger and a neutral mentality.

At DJIM, we are sticking with our recent theme of "long the good eps winner on weakness and short the crappy plays on strength".    Fading the strong market move in either direction until a major trendline gets broken should remain the theme.    Basically, this market has been trading between 12200 and 12700 over the last three and half weeks and we feel one of those level will get broken eventually.  The SPX is about mid point in a narrowing range for the last 17 trading days since Jan lows. 

For now, we are trading both sides of the market so we don't get completely left out when a strong move occurs in either direction .    What we aren't willing to do at this moment, is to commit large amount of capital to bet on any one direction.    If you want to minimize risk in this kind of environment, you just have to accept the fact that you have to churn to make a living at this point.

Chemical/Agri.  the reason we keep mentioning this group on a daily basis the last while is the fact this is one of the few sectors that is still trading near its 52 week high range.    With some names trading at a very decent P/E and a majority forecast of strong growth the next couple of years, we'd still be pounding on the long side of this group when opportunity presents itself.    You really don't have to trade every single name of the group, but to trade the ones that represent the sector best like POT MOS MON CF etc.

Solars, we'd remain very selective in this sector and pretty much stick to the saying "what's good for FSLR is only good for FSLR".    Trading a solar play that has a great outlook is less risky than trading those that don't.    If you are long those solar names that were being dumped on their earnings report, you'd likely suffer more pain once the sector pulls back meaningfully.  Citgroup upped a German solar to BUY giving a favourable outlook on the sector today.

Coals , just like we said the GS downgrade could play havoc and also produce more opp's to buy the dip.  Some like ACI, MEE took it on the chin, well actually it was a low blow. We all know most stocks in a particular sector, even if not included by name in a downgrade suffer. One that did not is FDG.  After trading it here now for a few weeks, we'd have to say there is more involved here, as in strategic possibilities.  We'd stick to FDG , MEE and JRCC for a more volatile cheaper play.

Shippers, the recent surge in DBI index, as well as earning anticipation have caused many popular names in the group to move a substantial amount off their recent lows.   After a couple of key name's reports late last week, we noted to be careful with the exuberance especially off DRYS big sounding beat.  We feel the run-up may need to consolidate for a while, especially after the fade witnessed.

ILMN, CMP continue to show strength. FSL is coming back to be picked up again.

If the Footsie(FTSE) can use todays strength which evolved from the banking stocks prospects later in the week and carry it over 6000 by the time we get started tomorrow, we could see a nice follow through on top of the futures we see now.  Qatar also said it has $15 bln it wants to put into Euro/US banks over the next year.  Some financials would not be a bad idea to trade. GS, MER etc. 

..cards on the table..

Before the open tomorrow, we'll have many of the cards turned over to indicate where we're going.  The way today went , you'd think the downward bias will continue as the Economic data consisting of the CPI, Housing starts, Retail Redbook is unveiled and digested.   It seems to be too easy, too convenient to assume today's reversal will continue tomorrow as all the charts from the SPX to IWN have a narrowing >>>>> triangle formation looking more like a downward break coinciding with the big Eco' data day.     The trading programs must be ready to go.   In either direction.   To sell the break or will it program buy if a threat comes on the lower channel of the symmetrical triangle?.   Considering this market is so unpredictable, who knows what tomorrow will hold.   Today, we probably had a trap and tomorrow it might be reciprocated.   Who knows!.     As for today, the QQQ's already broke down just after 2pm in fast and furious fashion, only to be pushed back to the lower line of the triangle following HPQ's EPS after hours.   We're not putting too much on the prospects of HPQ rubbing off on the other techs and resuscitating them all by it's lonesome.   Today's gap was erased quickly, the commodities driven market today soon faltered as this only brought on more inflation fears.   With oil kissing $100 those $600 stimuli checks might not last too long. 

Yesterday, we led the Journal off with the Chemical/Agr'si because they were trading near 52 wk highs.  A few got up to those peaks and actually held the gap up opens.   Considering how fast the move was today and with the potential of misery in the market tomorrow, this is the first place we'd look to go short in if you haven't yet during today's reversal.    Yep, you can't pick sides for too long in this environment.  

The Coals also exploded with FDG leading the charge to a multi year high of $50 and change.   We've noted the past few journals of buying the dip, including after GS's downgrade on Friday.    These guys can do some consolidating now as well.  The idea of buying a dip is not in the cards in respect to a potential overall market hit tomorrow.

VLNC had a nice volume day and hit the 50% mark since being alerted to 8 trading days ago.  Too bad the truck wasn't loaded with it, tomorrow would not seem so important... GNK up over 10%, CLB should be watchlisted for a sunny day,  if you haven't done so yet after last weeks note on them. 

A clear head for tomorrow is the only option....we'll update if necessary before the open

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.

Slow things down a bit....

Basically, as much as we'd like to see 200+ pt gain every day, the best course of action for this market at the moment is to chill.     Yes, we have broken that all important resistance level last Friday and now comes the task of defending that level as support.    Because we are still in the midst of an earning period, the market will tend to be volatile because of the uncertain outcome of earning reports.    We'd allow this market to go 100 points either way, as long as there is strength in selected plays.    We cannot control nor predict whether a market will go up or down 100 points tomorrow, but we can definitely take advantage of opportunities that are presented to us.    This is assuming that we are on top of our game and know exactly what to look for.

Today's slide is mainly from the technology area and we aren't particularity concerned about that.    Yes, some of the tech names have gone up tremendously ahead of their earnings and it's only natural to see some pullback.    Frankly, if AAPL's earning suck tomorrow, nobody wants to pay $150+ for it.  It's as simple as that!.  On the other hand, the commodity market is still alive and kicking.   What else is new eh?    Honestly, this is getting to a point where we don't even care about any sector other than the commodity ones we've been stalking.     It's not that the commodity plays go up the way like in the dotcom days.   It's the fact of how scarily steady they go up with respect to the overall market.    It doesn't seem matter whether we have a down market or an up market, there's always one area of the commodity market that's getting hot money.    In today's case, we have oil and agri. and shippers and a selected steel MTL, we long ago said might follow in the footsteps of our big play (X) when it dipped into $110's.   To us, that's more than half of the plays on our watchlist, your DJIM shadowlist.    To some, this may get frustrating as the inevitable question arises "why don't some of these names pullback for once?"     Well, this is the perfect illustration of hot money flows.    Is this going to be a bubble waiting to be burst?    Frankly, we don't know and we don't care at this point.  They blew it up once recently and we came back and said this is not 'dead' and soon after it all started up again!.   Only thing we have to say at this point is that, if you don't trade the commodity this year, you will be greatly under performing those who do.

Now some sector digestion in no particular order...

Oil, it sure is getting hotter out there and we are not even through April yet.   What ever happened to spring?   We literally jumped from freezing temperature to mid 20s C in a matter of a week.    This can also illustrate the market with oil right now.    It just feels like there's no stoppage, now that the summer is coming, which is seasonally strong for oil price.    As far as plays wise, we are sticking with some of our popular ones like HES, EOG, RIG, XCO, ATLS and BZP.   

Coal, with earning reports out of the way from BTU ACI and FDG.  We only have a couple of interesting ones left to report.    We are looking to establish some good positions next few days hopefully on dips.    The story with this sector is again demand + pricing power.   The current reports may not justify the future potential of this sector.

Shippers,  just about every shipper had a good day today and this is more of a recent sector move than anything.   We started getting very bullish on this sector at the beginning of April and it's been paying off nicely so far.   This is a secondary play for the commodity market, but it's a very important sector.    Basically, you have only so many vessels and you can only built so many of them a year.   The rising demand of commodity will give those shippers good bargaining power down the road.    Most of these shippers are already trading at a very low P/E so now it's the matter of change in perception as far as trading goes.    DRYS, EXM and TBSI are of course our three top dogs we like to trade and we'd stick to them for the next while.   We rode them last summer after alerting the sector and we are once again since the start of April.  If you're visiting DJIM, you can go to our Alerts-page and /or search our stocks through our search of Journal entries, or just keep scrolling down these pages and see the stocks we've been playing highlighted in bold.

Agri.,  about a year go, not many people have even heard of POT.   These days, you can't log into a trading system without at least checking to see how much POT is going for on the street.   How ironic, eh?    The success with POT has everything to do with how huge the IPO of IPI was today.    IPI is a pure potassium play that markets its product to America.   Given the scarcity of this resource and the increasing demand of this ingredient in food planting, IPI will likely get some more momentum down the road.   POT is reporting on 24th and we think both the report and guidance will be good.    It's hard to say how these stocks will react initially, but we'd be buying/ recycling on any weakness.

Bottom line, it pays to go after the obvious and easy plays.    In a bull market, every play will look extended and that's the way it's going to be.   This is the case with commodity plays right now.    We have to constantly remind ourselves that this is where the hot money is and this is where we want to trade.

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.

Big 15..

Today's the kind of day which you can just sit back and relax.   Ok, maybe it's just a little wishful thinking here as traders hardly ever relax.   The truth is, there is not a lot of news headline today and market behaved with very low volatility.    We like this!   Why?  We just can't help but noticing that whenever market is low on volatility, our playlist is almost always high on greens.  Just check out the "BIG 15" from yesterday making new highs off our Shadowlist.   Go to Shadowlist link and change signal box to new high.

With the turmoil in financial stocks and this being a supposedly "tough" trading year, how often do you get asked by friends/relatives that if you are doing well with your portfolio?    Instead of a straight answer, we simply tell them that we've been trading the commodity stocks, which is the same reply a month ago, two months ago, and three months ago and the lead into 2008.

As you can see, this game still rewards the mentality of "it's better late than never"!    However, if you are stubborn enough to refuse to accept this fact, then a lot is being missed out on the table.     Sure, playing some commodity now definitely does NOT give you the same kind of risk/reward ratio compared to a months or two ago.    It just doesn't mean it won't give you any reward.    In fact, we like to trade stuff with the greatest visibility.     If a stock has great earning report, it gives us good visibility that it may do so again in next quarter.   This view/strategy is shared by so many and that's the reason why we have had so much success with the earnings winners in the past.     For this year, the visibility isn't with earnings plays because a lot of uncertainty within our economy is bringing a very murky picture on what lies ahead.     What is clear though is that commodity prices are increasing and at a pace we've never dealt with before.    This is just the beauty of trading world.    If we can all foresee the high energy prices a year ago, we all should be billionaires by now.    Nope, it doesn't work that way.     We have to constantly evaluate the situation and be prepared for surprises and the "unthinkable"!

Many commodity plays on our shadowlist are slowly grinding higher.    Some of you may already got uncomfortable playing some prices knowing that you were playing these at a much lower level just few weeks ago.    We say, don't ever let that mentality get into your head because that'll hurt you from making good trading judgements down the road.     Basically, trading POT at $230 is no different than trading POT at $150, as long as you are aware what the trend is and you are trading WITH the trend.    Sure, you may not want to commit the same size when the stock moves higher and that's just fine.  Maybe PCX and ANR seemed expensive in the $50's just weeks ago after introduction here, hopefully this finally confirms quality is better than the quantity of shares in $5-10 stocks.    We haven't done any major updates to our shadowlist and it may be "boring" to look at the same plays every day if your not participating.   The point is, you have to absolutely stick with what's working currently. Anyways, the most recent plays we introduced are doing great.   The Shale Gas plays and IPHS come to mind.   Even as a lousy trader, you just can't lose over a period of time with the right kind of plays.  In some cases, a DJIM investor with a longer term perspective may be doing better than a DJIM trader so far in 2008.     The past couple of years, the reason why our plays changed so quickly is the fact many if not most of those plays are "small caps earning winners" based and we know how fast flavour was changing from one to another.     This year, we are going through an unprecedented run-up in commodity prices and we simply don't want to be anywhere else, focus and/ or money wise.

"Shale Plays" got a kick start this week as the news from GDP/CHK just spread across the zone.   Also, ECA has stuck their behemoth hand into Haynesville with a boatload of acreage.  The potential for the smaller caps names noted here, is of course the better trade as far as potential percentage gains than huge ECA.  There is only about 60mln float between GMXR, PVA, GDP.   We are in a few of these Shale plays and we'd intend to add on weakness.   

Agri. plays are still working and our little IPHS has gone from $28 alert to notch another nch and the action has simply been spectacular.    There's a possibility that the IPHS is in imminent need of a pullback and we'd get on the bids aggressively when it comes.    

Coals, what more can be said?    NCH's all over the joint.

A couple of beaten down groups (Ships and Solars) also made a little advance today and we are looking at some solar plays for potential intraday action tomorrow.    ENER, a name we switched to in mid- May as far as Solars were concerned, is basically trading in the world of its own and it's on pace to become the baby FSLR.   We highlighted this a while ago as one of our favourite Solar plays and it's apparent that this one is emerging to be the "real deal"!   We are hoping to catch it again on a break , well any break really.

Bottom line, GS is reporting tomorrow and lets hope it's another none event.   Seriously, enough damage has been done in the financial sector and lets cross our fingers for some good news from this sector.