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Entries in HITK (6)


...little blue pills

We’ll keep it tidy into Friday’s trade as there is not much we can say,  we haven’t said the past week or this month at lows.  We’ll ignore the Roubini wire cross (later rebuffed) that was credited with the 130pm lift off.  We saw other positives earlier (neg headlines..NOK EPS  shrugged off, CIT  noise again muted) and just before the wire cross (FDX  exploding over 200ma).   Besides,  what anyone says at this point is irrelevant to us!.  Why?.  We’ve believed one thing and we’ve stuck to not being held hostage since NFP report that brought down the house of green shoot cards and pessimism spread like wildfire..we said starting July 6th…“NFP…only a cautious bump as the world’s economies are not held hostage by one U.S payroll data point.  The manufacturing output bounce is still the focus with earnings around the corner to potentially carry weight for the recovery”.  So, nobody can say anything about recession, recovery blah blah…to change our minds and how to trade in the meantime.  In many respects, our 'The Premise'  trading methodology is stll holding true from late March.    If we had swayed any with the market pessimism at/near July lows, we wouldn’t have said what we said in (DJIM #28) and therefore, prepared for what has ensued this week.

A side note...It’s interesting and a good exercise to go back now to around July 6th and see how things played out… a standard correction of 10% on the dot to 869 the day after we noted such, the 2nd re-test of 869 mid day soon and that ‘Golden Cross’ thingy.  You only learn from experience as with anything and we can only say that we/you will and always respect some of these historical/ technical lessons 1-10-20 years from now.   One thing is to read hundreds of pages on trading, another is to experience to them first hand!.  Speaking for myself (Demi), I’ve never touched a trading book,…just picked up pieces off the street you can say, including off Jon and BT.   It’s the StreetSmart's trading book you can say, you’ll probably become a better trader off a psychology book(s) than any trading book(s).

So..what we’ve seen this week is corporate reports not  being hostage by a single July NFP report.  Why would they be?  Think about it logically.   The reports keep coming in solid as witnessed AMC today.  It’s been a steady stream.  China GDP  didn’t slow down last night because of NFP, did it?.  The breadth of the market has been a key to watch on this move, 4th impressive ratio today.   Performance anxiety(PA) pill is working!!.  Strong equities= weak $USD= commodity linked trade (even though, we think coal linked are due for a whipping down the road because of energy divergence).  Of course, China data helps commods as well.   Only slight negative is the move in afternoon was a SPY-ETF's-SPX fut motivated move with little participation from individual equities, but on the other hand individual stocks should digest some of these gains.

Oh boy...would we love a pause, a pullback now, but the market is overdosing on those little blue (PA) pills and wants to go all night and day, so who knows!  We'd continue to love our techs on some weakness from last Q..notably STEC  boom boom today..RVBD, STAR.   So far in this Q, ININ , didn`t need to consolidate as it's got caught up in the mkt tape, we had CSIQ  in forum premarket at 13 pop 8-9% for a quick trade.   HITK , only drawback is its a pharma and those usually dont' have a earning momo' shelf life, but in this market going forward, you may well be able to sell " **** in a shoebox" and get away with it.   We'll see.   Anyways, we're going to be more selective now (go earnings plays forward or scattered fast trade ideas like CSIQ) and go bigger in size on less plays to take advantage of the exuberance.  This way any real market quick downturn here will not include our cash profits.   Simply,  if we get a small cap earning surprise, it should not matter to that stock if the market is down 300 pts at the open or AMC when it's report is released.

Unfortunately,  if mainstream media-analysts get bullish now, we'll have PA investors jumping on the bed, climbing, chasing the SP names and so who knows how fast this emotional trading takes to break 956.   Most importantly here to us is the mood has changed!!.  This is all we ask for going forward as summer lows might not even be 869, but higher at that 884SPX futs level we busted the other day.  A good mood will pay dividends to what we eagerly await and that is the best part…micro small cap earning play possibilities, which will slowly start to come out as we go into July end.


Pints on us!

The solid earnings calls keep coming and the SPX keeps trotting along.  What else is new?.   To tell you the truth, unbelievably the short term outcome of SPX near 2009 highs is of little consequence to us at this stage.  Yes, that’s all the investing public is talking about as we close at a SPX‘09 high, we admit to hardly even glancing at SPX, SPY trading today.   All we see at DJIM is how well our shadow list is behaving and preparing for opportunities ahead for more Pint sized earnings on top of last Q's winners.   Okay, maybe not looking at SPX had to do in part being occupied with watching our premkt HGSI   forum post call at 3.5mln shares/ $10 that sprouted to 123 mln shares traded and a 25% gain from those levels.   But seriously, what excites us is not if the SPX breaks 956 intraday day high this week, but what possibly lies ahead as far as earnings are concerned.  What these solid earnings in the first week are telling us is we are going to get some nice EPS winners in the next 2 months.   Yes, 2 months because most Pint sized caps report for Q’s after all the Keg size stocks report.   Plus these Pint sized caps will have 1 to 2 months of better economy than the ones reporting end of June Q’s now, so earnings may be right out of the park!.  Also, remember half of these don’t even provide guidance which only makes an excellent past Q of relevance.  We should have much more than the (ININ  HITK ) so far this Q to play.

Back at DJIM farm today,  the  drunken’animals were running freely…just yesterday we said…“Even last week, we had past DJIM shadow-listed Q plays putting in new highs at some point ( STEC STAR  CVLT EJ   )”.   Today, we had a few more DJIM shadowed earning stars light up the sky, ( GMCR  PWRD  DDRX ) for 10-15% and some with new highs.  Nobody on the web can be beat that  "Fab 7”  for a few months now.  Also, if that’s not enough, recall in a Journal and later in Forum(06/24) we suggested a pre earnings move will probably come to Casinos after a member asked if it was a time to buy back than.  Well,  with earnings in a week or so these names eg  LVS, WYNN  are acting like earnings winners the past 4-5 days as prospects improve (may need a rest though).  

Even if the market falls into total darkness from something other than a solar eclipse, we have a ‘Premise’ here that's been working overtime since March and an easy to follow formula to stick to going forward.   Note, the "BAR' has been set high for the Keg sized companies by INTC, GS etc., so the big boys ahead will need to shatter numbers/guidance going forward for a great reaction.   On the other hand, if one of these misses it will lost likely be a very nice short quick intraday trade.  The good thing is our pint sized  earnings focus has "no bar" to play in.   Also, the probability a herd momentum mentality has set in and pints are the best way to cure any performance anxiety over one’s stock portfolio in years past.

Geez, just got all thirsty..luckily it's almost noon in London UK!. 



Bull Eclipse

As the other side of the globe is enjoying a once in a few hundred years event of a major Solar Eclipse, we couldn't help but wonder if the stock market, notably Nazzy days streak not seen for a decade), here is enjoying one of the rarest moment as well.    Yes, we are up again and perhaps it's getting a little tiresome?   Not a chance! :)   The only type of traders who are tired of our current rally are either in shorts or are in cash.    In fact, by visiting a few Bear blogs, you'd be able to find a communities of traders who are filled with disgust and anger with this 'Bull eclipse'  over their Bear dens.    Fortunately, they are the minority at this point, many are just a furball of their old selves and others are in the closet crossdressing as we speak.   We admit that we often visit such blogs as some of you seem to as well.   We do that not visit because we are looking for short plays or trading ideas.    Instead, we simply visit those Bearish sites to get an idea what them Bears are thinking and what their case of a trading argument is.    If a Bear is considered a Bull's enemy, then we have to understand our enemy to the fullest in order to beat them in this game.    Frankly,  it's been a scene of chaos at the Bear sites lately.    Many of the da’ Bears are self proclaimed very good technicians who make mince meat of the naïve or inexperienced traders looking for an edge.    However, at DJIM, we always believe that charting is a supplemental, extension to trading.   Understanding the big picture and understanding the market mentality, individual niches is much more important than looking at charts blindly for a trade.   Most importantly, we’ve always believed the first thing you need is to discover a good fundamental stock and than you chart to your hearts content as a guide for R/S levels.   This is where most of these Bear technical places go array.   Most only look at charts to begin with, probably night after night going over scans alphabetically till they see something that gets their Fibs excited.   They don’t care what stock ABC business niche is or care if eg.earnings are tomorrow.   We’ve seen humorous things such as going long a MOO etf trade, while shorting individual Chem fertilizers stocks and /or the corn futs in the group because charts painted such a picture at the same time. 

As we have been saying, what happens few months from now is anyone's guess.   Bears may argue that we may eventually head for a nasty downfall when all of the things unfold.    This may potentially happen, but come on, seriously, what does a hypothetical theory have anything to do with what's happening NOW?     It doesn't take a genius to figure out what's happening with the market these days.  ASK..Goldmans , Credit Suisse calls this week.  CS actually has just reversed their call into equities from their June call !.  You don`t see CS often in the news like GS-JPM, but believe us they are an integral big player in the marketplace.   

Yes,  the market has been up for more than a few days too many and we may very well pause here for a pullback.   So what?  The Bulls are in charge.  This current rally is the result of people believing and acting that things are improving from credit to corporate.  Yes, the consumer in US is behind, but as recently quoted here, "Build it, he will come".   Some of the major companies we know, have come out with some reports that handily beat the expectation and guided well.    We have discussed this "beat the bar" effect during the last few days, so we are not going to go there again.

Today's EPS winner has to be JDAS  alerted AMC yesterday!   We don't post # reports regularly here because this way you do some of your own DD before making a trading decision.   For those new or inexperienced this is the only way to learn/ decipher and understand what looks like a good trade and what isn't in the future.   We just have to say that the report is that good and that's the only lead we'll give on most plays.    As far as DJIM's strategy goes when it comes to earning plays, we are looking for those companies that delivers a big and positive earning surprise.  Unfortunately, if you just go on a 'headline' number wire cross you will sooner than later be finished as a trader. It's not that simple, you need to snoop around a headline number.  JDAS falls under the category and so did, notably GMCR STEC from last Q.     These are the best kind of earning plays we like because not only they are small enough to run up, they are also liquid enough because many institutions will own them.     On the other hand, eps play such as DDRX, BWY, ININ, HITK are always welcome to our list because they always have the "potential"  to pull a big one due to their float after the discovery process unfolds amongst traders.   In the case of DDRX, it pulled an amazing run-up.   In regards to MAIL post today, due to its thinness, it  may or may not do anything.  You don’t buy a stock like this to put in your top 5-10 holds at anytime.   Just like last Q reporting, we are creating a list of plays to keep an eye on (ININ HITK JDAS MAIL this Q so far) and hope for a portion to be become winners like last Q’s list.    Some will fall off the list as we progress, new ones will be added and some like STEC GMCR STAR, we’ll all be trading into the next Q.    These new ones, we now can follow on the charts, keeping an eye on such things as 9ema pullback to possibly buy again or for the first time.   In addition, we are also paying attention to 'group' earning plays.   A specialty group from a particular sector or country may get some hot attention if things turn for the better.   China plays fall into this group and as well as any commodity groups we might trade. 

We had a caution on commods/machinery trade today after CAT  up ~12% premkt pulled the group (JOYG BUCY ) up premarket as we may have “Johny-come-lately” playing here and so we may get sell the news after what we saw in China.  It didn't spill into the overall market, but, note banks( regionals) are not helping this market to break 956 roadblock today.  We can`t have BIOTECH outperform these last few days, most likely if a PB occurs here it will be because of Banks-Commods noise here.  

Most of these 'Machinary/Industrials' gapped and all lost roughly ~$3 off top as seen by JOYG chart below.   As a whole the commodity linked groups/stocks were mixed, notably BTU  (-5%) pulled coals group.   Considering, BTU is top of crop, some parts to their call will seemingly weigh more on other coal stocks down the road than itself.   Tomorrow morning is quite important to these groups as a number of each groups leaders report, so we remain patient here, but not confident any individual and/or group earning plays will emerge,  more importantly to us is what they say will give us signs for the market.

Bottom line,  there's many potential earning surprises from pint sizes down the road and we have to absolutely capture all of them.   It is our mission and our goal for this quarter.    This market may be a little overheated due to market's enthusiasm with earning reports from big companies.   If we get a pullback in the coming days, we'd be sure to get the latest, including last Q's earning plays on the cheap.


More disappointment...

Yes, don't be fooled by our journal title again!    On the contrary, this market has been anything but a disappointment.     We had a "mild" pullback early on into the middle of our 972-966 intraday note for a bid support.    It's considered mild because we really haven't even seen this mkt down more than 7 or 8 pts on SPX intraday in quite a while.  Believe it or not, today’s -2.5 pts SPX decline was the biggest in over 2 weeks!!.  So when this mkt was pulling back early on, we were excited and hoping that we may be able to get some stock cheap for once.  But…

Here comes the disappointment.   Things just don't seem to stay "low" for long these days and you only had a chance for a handful of light dips.  We had plenty of reason to dip (notably CC #), but long demand came in the form of an underlying bid.    Again, this is becoming a normal phenomenon with this market these days.     Little rants aside, this market has once again exhibited the kind of strength that is typical of a strong bull market.    Dip buying will be the game!   Plays like HITK SWI  don’t even give us a chance pause before they inch higher,  these names actually were climbing to 5-10% gains and new highs while market dipped.   HITK, for some reason, turned out to be the best runner among the ones we've covered, so far.     At this point, we do feel it may needs to settle down a bit.    We still have many reports left in the earning season and we won't be surprised to see some exciting reports/reaction surface as a result.   Currently, plays like JDAS  ATHR  ININ  are all developing nicely.  If Nazzy/ Techs come out of their oxygen tanks for some follow through this week these names should benefit.  If there's strength that accompanies a breakout among those plays, we won't be hesitating to chase higher aggressively by adding to positions.

Bottom line, we are pretty choosy as far as plays are concerned.  We do have plenty of earning plays to work with and we'd imagine there's more good ones coming out within the next couple of weeks.   For now, lets just enjoy what this market is offering us.


Leveling out....

It was the message from both the Fed and market.    While our economic activity is levelling out, the stock market seems to be doing the same.    In both case, it is good news.   From the Fed perspective, they are believing that the recession is coming to an end (only slightly raising growth).   This belief is followed by their announcement of Fed's end of purchasing long bond in October instead of September.  They`re being as conservative as possible, just in case.   Basically, if the mighty Fed is giving us the indication that we are done going down with pace of contraction slowing,  why shouldn't we listen?    The truth is, we should listen.    Some people may not agree with Fed on the current state of the economy,  so what?   Last time we checked, Fed's still running the show and anything they say and do are impacting our market, greatly.    So the conclusion is that we have to be confident going forward.

From this market's perspective, today's event provided a positive catalyst to squeeze the ‘stops’ out of the previous 1007 stiff R level after finding solid support at SPX 993.    Even though the market was up quite a bit before the Fed decision, importantly, it doesn't get ‘sold off ‘either after the decision came out.  We discussed someone needed to step up, early on Financial, Tech, Commods all stepped up together.  This early move definitely caught many by surprise even though we had some positive catalysts spread out, including TOL #’s.   As we said, odds were for a swing on FOMC day in either direction because we were on important support.

We wouldn't worry about the "weak" finish because no matter how you look at it, we still closed deep in the green.   The finish today erased all of yesterday's loss and puts us right where we were a couple of days ago.    It does feel like this market wants to level out a bit longer before making a big move.  We still favor a pullback before heading much higher.  This move today may put a scare into the shorts once again of trying to press new positions.  A close over 1014, even 1010 Fridays close would be looked on positively. 

In addition, we'd like to see more of our earning plays participate more on the green days.  Up until now, we have quite a few plays we are following after their earning reports.  So far, none of them have made any significant progress since their earning pop, except maybe HITK MAIL FIRE, but that`s not really the momo`we`re looking for, maybe too greedily after STEC DDRX and a few others last Q.  We believe some will eventually pop out of the range and challenge new highs.  Those are the ones we'd be chasing aggressively.  Still, a few bolded yesterday performed decently, FIRE  STEC  PWRD  EJ ( did same as PWRD following EPS, rising higher and selling off later).   A few liked stocks in July 28th alerts, PFE, RKT  had nice days as well.   So far, there's really no point betting heavily on one play or the other.   We simply have to let the plays behaviour dictate our funds.   In our opinion, every earning play has a chance to do well unless it breaks down badly.    Things are moving along somewhat slowly recently and it's fine with us.   The next couple of weeks may be a good test for some of our earning plays and we'll see if anything gets to be favoured by this market. 


....Humble Bull...

Even though we got what we wanted in the past 3 trading sessions..”We said we won't get bullish unless we get over 1015, we can add now over low 1020's and we think it is inevitable we go higher than recent high cycle“,  we have to remind ourselves this market can humble you quickly!.  Therefore, we choose to lighten up positions as all the strength in the market was in the 3 groups we were on top of…Commods, China, Gold.   We don’t need to be overly bullish now,  it doesn’t matter really considering we’ve been on right side anticipating a bounce since late last week with the right stocks.  So, right now, we’re taking a breather as the market should by lightening up.  If we can just eke out a slight green day tomorrow, it would be a positive.  

Interestingly, we gapped all the supports we’ve been noting by opening at 1018!. Clearly, this gap at supports (1016-1018 ) is even more important now and we’d be using it as support going forward.   We’re hardly TA experts, but this seems to be quite the bullish gap for a retest of 1039 at least.

As far as individual plays/ sectors, we’d still concentrate on the 3 sec's above and EPS plays.  We had a few making new highs,  ININ and ATHR  premkt was up to $29.  If you were frustrated by ATHR's lacklustre performance after we alerted the gap after earnings, you missed a 25% gain now this Q in it.  Clearly, if we go with an EPS play here the best past is you likely won’t be losing money, you just need patience sometimes for the results to come in and a good entry.   Others lining up might be, ROVI, CTSH, STEC  bounced nicely today again and should have follow through.  HITK  moved into earnings.  Many of the newer EPS stocks we liked this Q,  will move into their next dates and not just a few days before.  It’s not pre- earnings runs, it is simply the course of things these days as earnings winners don’t all go like MAIL , but take another route which means they get valued into next report.

Today, we had FSLR  for a possible max of 10 points as a day trade.  We knew a senior Chinese delegation was visiting the company over the weekend /late last week in the US and thought a deal of some kind would be in the works and so played it.  You don’t go all that way just to do nothing.   In the afternoon, a deal was announced for a major solar plant in China.  CTRP  was upgraded today by GS, but UTA  was the big winner as it’s run now 20%+ since alerted as a secondary play around $9.30.  We like this segment of China, also they are possibly opening up their skies to more business and becoming more friendly as far as flight plans/taxes.

After INTC guide recently,  we pointed out that their raising of guidance will lead to many more upside surprises going forward in tech.   We are getting glimpses of this daily with stocks such as MCHP  last night.  Reason, we are pointing this out now is that are fewer and fewer negative preannouncements in all sectors than in other years going forward and more upside.  This should lead to an interesting EPS season, yep, it’s close with RIMM  reporting Sept 24!.