Over the weekend, we couldn't help but notice that the general media is a bit worried about the current state of this market.    There were numerous articles citing that we could be getting a bumpy ride over the next few weeks.    This is due to the fact we had two down days last weeks and that was enough to bring out the skeptics once again.     We don't want to read the media comments after today's action, however.    Frankly, we are just a little tired of the media lately and all the back and forth.  This includes every wishy washy regular guests on CNBC that switch sides on a daily basis.   There are many reasons that caused the market go up/gap in strong fashion, but we think the biggest reason is the reason we've been saying all along.   There's underlying bid from the money managers who like to see this market higher, as oppose to lower into year end.

Headlines are plenty today, the weak USD due to dovish comments, China growth forecast of 10% in 4Q, potential FOMC minutes containing upward eco. growth forecasts and European markets were substantially higher due to German/ Eurozone PMI‘s (we noted Euro data as a potential catalyst this week.)    All of these contributed to a quick rise in equity market today as 1100 and 1005 resistance got pummeled.    Are we surprised?   Nope!   Just like on a down day, people need reasons to explain the market action.   For DJIM, a day like today does not shock us because we're 'Bull' prepared due to expectation of a potential underlying bid as this time around 1085.   If you're not a ' Bull' and preparing for a bid, you miss most gains due to a gap like today if you're not invested.   Still, we do have to point out that not all of the stocks were enjoying the kind of gains the indicies are suggesting as the USD decoupled for many commodity linked stocks.   MELI  and AIXG  ( a DJIM add last week) were outperformers though.  Big caps have obviously benefited from the broad market gain, some of the smaller stuff may still play catch up.

Then there is the coffee frenzy.   PEET  was originally a stock we played due to their announced "acquisition" of DDRX, (a stock we covered since high single digits.)    Remember, a while back we concluded that the price PEET offered to buy DDRX is considered an outright steal.   Today, GMCR , the other favourite EPS/coffee stock here thought the same and outbid PEET.   Naturally this type of an event causes a sell off as a bidding war is a negative for the original bidder.   PEET, raised the offer, but will probably lose DDRX all together was the sentiment.     This superior GMCR offer puts PEET in a very difficult situation.    Despite the fact PEET announced to raise their offer with a mixture of cash/share, it still doesn't come close as good as GMCR's offer of ALL CASH.    As of the closing price today,  PEET's offer is effectively lower than GMCR's offer on DDRX.    Why are these two fighting for DDRX?   We have discussed here many times before, it's all about the growth of k-cup.    In our opinion, the bidding war, if it continues, will be unfavourable to PEET and we decide it's no longer an attractive play based on the current event.    At this point, it's even hard to say if anybody ELSE may come into the picture and give DDRX a fresh bid.     You have to remember, the bidding war between the two may actually draw out other potential interested party.     As it stands, even at $30/shr, it's only $172 million.    The reason we gave this a lengthy paragraph is that we wanted everyone to understand our logic to go long PEETin the first place and why we think PEET is no longer a play going forward.  This is not a 'weakness' , we buy, as it’s news flow related.    Do we still like GMCR?   Yes, of course, especially now that it has a chance to grab DDRX.

One of our readers also mentioned SEED,  a stock that doubled up today off volume that's four times its own float.    As of right now, we don't really know the long term impact of this particular announcement.   Bascially there's no telling of what it means for SEED as far as dollar amount is concerned.    What we do know, however, is that this stock may just be the favourite stock of the day traders and speculators for this holiday week.    It might be worth to trade this thing for as long as the story lasts, but ideally it's best to stick to what you know heading into year end.

This is a shorted trading week and many traders are away on holiday as we all know.    Today's volume is relatively low, but it's still pretty decent given the circumstance.    It might not be realistic to expect this market to break out of recent high cleanly, but we do think there are some trading opportunities worth participating in.