Solid..

Anyway, you look at it....The trading day was solid and it doesn't include a disclaimer as in little volume!.  We've been alluding to the fact volume is and will deteriorate heading into the summer and so we can't put much emphasis into the volume day to day now.    In other words, a +130, +42, +15 is a nice rally, nothing less!.   Last week as the indices declined, we headlined, "Not worried" and heading into this weeks trading..."In other words, we're not really worried about the markets performance/ declines last week, we think this is all the normal course after a significant breakout".    Today's performance did nothing to squelch that belief with the IWM/RUT back at resistance with the potential to create a significant breakout.  The SPX back at the psychological mark of 1400+ is where we want to be while the NDX leads the market.  At these closing levels on the IWM NDX is where you want to see volume kick up to create a talked about breakout.     If we don't get the volume breakout the Bears will do their best to diminish the move.   Considering the way we've been grinding up, we just may continue to do so even on a breakout.  lol.  A slow burial for the Bears is just fine.  Maybe a few put a gun to their heads already as FDX, MBIA stories rebounded.

Nothing extraordinary to add today as all the recent alerted new plays continued to make new highs.  We are speaking of the SOHU ANR, SNHY, MVL, and even the BZP which we nudged a few times last week.    In the meantime if this isn't enough points pocketed, we have other tradeable opportunities stepping up as in RIMM and ENER.    As we said yesterday RIMM is long term again in our view.    It wasn't just the intro of the Bold device, it's the RIMM plan at analysts day that sparked a lot of interest.      If you were around AH's, you may have caught FLR with us for what is already a nice trade.   Management raised guidance to 6.25-6.55 from 5.10-5.50 on strength from all segments.  You don't have be a genius to understand this headline.     One sector though was priming up (Shipping plays) as shipping rate noise and as to why they are this high hit a few publications like FT.    Wow, what a shocker, we've only been writing about this scenario since DRYS was in the high 50's in March-April. 

Oh yeah, doesn't it feel like the sleeping giants are about to roar once again! .  Maybe its just withdrawal we are feeling from the Chemicals-Ag, steels, but with $CRX keeping its head up...who knows, we could be playing hard again very soon.

The premise behind DJIM has always been based on earnings and even in what is the worst of eco times supposedly, we are full of plays riding this methodology.

A Defiant Market....

Even as bulls, we sometimes can't help but be amazed by the resilience of this market lately.     Just when you think the market is showing weakness and a potential rollover is in the works, you get this incredible support that simply pushes away any further declines.    The final score for the plays on our watchlist has been eerily similar the last little while.    No matter how volatile they trade intraday, the majority of them seem to turn green before the day is up.   Is this getting old?   We hope not!

We had a couple of reports which really set the tone today.    FLR, which was alerted last night, gave a total of 24 points, of which 17 or 18 points can be had if you bought some in AH last night.  Buying at the open would not have hurt either.   Keep in mind, FLR isn't exactly a small cap so by getting this kind of gain on a day is very noticeable.     On the small cap side wise, we have CSIQ , which had a very good report and stock is instantly rewarded with a gap up and strong intraday gain.    This is the one we noted to watch for earnings along with SOL (reports tomorrow AM).   Remember, SOL guided recently and that's why we played in the first place.  Will they raise '08 again?  Technically, CSIQ is probably the best solar stock out there among the smaller ones.    Even though today's finish isn't exactly grand, we still think there's definitely more to come from this one.    ENER, the recent solar addition had another great day.    At this point, we aren't sure at what price level this one is willing to settle and so letting it ride may be the best strategy.   To top off the solar sector, the big brother FSLR had a new closing high above $300.    This move is about as stealthy as it gets because most solar traders were probably dealing with CSIQ, SOL or ENER all day.

As far as commodity plays go, coal sector had a group move and many of our favourite notched new highs today,  ANR continues to blossom.  In terms of other plays, we bought some V toward the end for a rebound play here.    There's good odds that the low from two days ago will be held before we see a rebound.     MR also looks like it's ready to move higher after three days of consolidation from its initial earning pop.   So be ready to get this early DJIM gem back in your book.    If you recall, many of these earning plays don't finish after their initial pop.      Just about every earning play we encountered the last while moved significantly higher after the initial move so we are inclined to buy on dips right after the initial pop.    It worked great with V, SOHU, FSLR.. and pretty much every commodity play out there recently.

Bottom line, it is ok that the indices don't make weekly highs because as long as the sectors on your watchlist are in play, that's all we can ask for

CPI at 830am. 

Change in dynamic? or.....

In a typical "shrug off the bad news.. (more slashing in guidances..AOU,MMM, MET), and propell on good new...eg..(reports that November hedge fund declines slowed vs. October, giving hope that the industry's forced selling may be abating,  a slew of market ‘bears’  making some sanguine comments...Heebner, Fleckenstein, Ritholtz, Birinyi),  we rallied again today.    It seems market is craving for good news while bears do what they can to hide from the action for now.    The biggest "good news" lifted the infrastructure group, (stocks here on list include FLR, VMI,  along with steel and few others, had the biggest gains for the day.   This is all thanks to the new administration's proposed infrastructure program.    By the way, the new program is supposed to be the biggest since the 50s.   In addition, the hope that an Auto bailout deal will be reached added to the enthusiasm.....Into the trading week...... We also have some more Obama noise on a massive public spending program hitting the rounds and the apparent progress this weekend in regards to the Automakers.).     It may be time to let these infrastructure stocks, including steels to consolidate to buy later or short shortly.    There is also the big tech infrastructure play now creeping in as Obama spoke of Web expansion this time helping the CSCO's along.

So,  with market's late ability to shrug off every piece of bad economic news, why would anyone even consider shorting this market?.    How about because we've gone too far, too fast.  This move brings technical analysis to the forefront some more...SPX note later here.

Well,  unless anyone thinks we are NOT back into the beginning of an economic boom soon, there's about every reason to short this market.    The afterhour news lately just hasn't been friendly for the bull, either.   Tonight we have TXN, NSM, ALTR, BRCM, FDX all warning for the coming quarter.    Can we 'shrug' this off tomorrow,  it would seem improbable as we near 930 SPX, but stranger things have happened this year.    This would be impressive if it occurs!.    Basically, the infrastructure program may be all that,  but it isn't going to help those white collar workers who prefer to work inside the office.    Frankly, the rally we've been getting lately is bit of a challenge to categorize.  Positive is we do have real buyers coming off the sidelines, not only short squeezes paving the way and we have seen some unwinding of the safety flight.   But, confidence is still an issue as nobody wants to get shot in the foot by chasing too far.

We know things move fast, and the next thing you know,  we can be testing SPX 930 (50ma, next vital level),  than 950 and SPX 1000 successively.    It can happen in a matter of days, not weeks.    This actually gives us a pretty good range to work with.    Essentially,  we feel that we may be going (stuck) into ranged trading for the next while until something major happens.    From SPX 780 to SPX 1000 is what we are looking at.    Right now,  as we set eyes on mid 900s, we think it may prudent to have the short side itch.    Currently, we are still monitoring the Financial sector, as much as anything else.    The less drama and more stability we get from the sector, the more likelihood that we may have seen the bottom last month.

Plays like HIG,... may give us some quick points here and there,  but, we may start to do some more position trading in the near term,  in addition to trading the index ETFs.   This is all assuming that market doesn't collapse with VIX gunning for 80+ any time soon.

CHK,  with the cold weather upon us, Oil lifting off $40, hedgies taking a potential break, it might be time to look at some energy stocks once again.  We opened a position in CHK instead of the pure Shale plays based on some good news from them in that they could be fully funded for '09/'10 and thus an overweight from JPM.