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DJIMSTOCKS- since 2006-  Toronto, Canada/ London UK

 ·Daily stock market color and insight before every U.S market-open, (Ahead of the open- Into the trading week, 5X a week before 8:30 am/est. Follow our extensive trading desk experience and lead in recognizing daily event upside/ downside risks ahead of each trading day.

· DJIMstocks bridges the gap between the retail-investor / trader and the institutional players by filtering out the noise, abundance of information (good or bad) generated through the media/ Internet.

· Our daily Journals encompass our trading methodology allowing you to interconnect with us by ‘Shadowing’ our trading platform watchlist. A 'Shadow'list of 50-75 stocks is tailored and fragmented (outperforming SECTORS, MID-SMALL CAPS, EARNINGS/ GROWTH (EPS) linked stocks, IBD 50, MOMENTUM STOCKS) to gauge single stock action and the broad underlying market for SP 500 direction to go long or short. New plays (stock/sector) are added, especially during earnings season through Journal updates.

· A simple to follow package allowing any investor class to save time and enhance returns!.

 

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Tuesday
Jul262011

...resilient so far

The bloodbath/Armageddon called for over the weekend in the media/ paper dailies didn’t materialize. Instead a typical summer very quiet trading played out. The ES rebounded ~15 pts trough to peak by mid-day, but the saga is intensifying today/tonight with realization ….re:(SP)…”Still, rating agencies will eventually downgrade US ratings even if a compromise is reached as it will not reach expectations of the agencies”.  The bond market is still showing investor calmness, but USD is showing cracks as are a few other currencies and/or bid in some safety asset classes.  Also, sovereign issues are back weighing some on the markets, EFSF won’t be able to do what it needs to do until September making investors wary once again.

Aside, despite most if not all US market sectors in the red, yesterday’s note about lagging small/mid caps was still evident as mega caps outperformed by about 50bps with 5 tech super caps that have reported responsible for all SP tech index gains.  In mid caps, DTLK  initiated here yesterday popped 20% on volume before settling for a 10% gain is indicative of company specific stock action we should just focus on. Basically…finding a specific tree in a forest trading methodology.

Solid execution AMC in BIDU /BRCM reports.  Noted yesterday, "At some point this trend will end and that is something to monitor to see if sidelined buyers are stepping up".  So, watching here if recent trend ends making for a better earnings season trading environment ahead.

Wednesday
Jul272011

impasse...

The debt ceiling impasse has left a market impasse today.  Most of the action was earnings linked and even that was 50/50 with some tech (BIDU/BRCM) and financials leading peers up, while (MMM ITW AKS) industrials/materials led peers lower leaving the market in stalemate. 

In all, debt ceiling circus or not, the higher end range of SP1340-1360 once again was a booking gains level and will likely be so again, even if the best ‘circus’ outcome prevails this summer.  Unless yields shoot up like in Europe recently, Washington seems unlikely to do anything this week, hence a downgrade likely won’t be averted. Right now, WH and treasury is looking for cash under the mattress and it may be enough till August 10,according to some reports.  Plan ‘B'..'C' or whatever they are coming up, may just kick the can through August.

Aside, market is becoming fatigued and summer doldrums are around the corner, if not here already. It’s probably best to take August off and get refreshed for what may turn out to be a very meaningful last Q run-up.

Thursday
Jul282011

...DOWNBEAT

“. ….It’s probably best to take August off and get refreshed for what may turn out to be a very meaningful last Q run-up.”.

5 reasons why the above includes last few days of July…way too many for any Bull at this time...

  • · Debt ceiling circus
  • · European spreads widening
  • · Economic data
  • · Earnings- Guidance showing things slowed in back end
  • · Technical- lower highs/higher lows, SP at June –July trend-line
Saturday
Jul302011

Sabbatical on A downbeat market...

Dear Members,

After 5+ years / 5X a week of Daily Market commentary, DJIMstocks is taking a sabbatical of sorts starting in August to enjoy some summer and other endeavors..........

DJIMstocks will continue...

Sorry for any inconvenience to our member friends, please keep in touch as always!

DJIM

Sunday
Nov062011

Into the trading week, (Nov7- )

US vs. EURO'world

Although SP gave up >2% on the week on rapidly changing European headlines, bias/direction remains to the upside for risk markets. Market is seemingly taking Euro risks in stride last week(fatigued) on lack of concrete announcements/progress from last weeks summit, life goes on seems to be prevailing as it has since this all began 2 years ago (esp. relating to Greece/EFSF leveraging). A fresh and likely biggest wary to look at is Italian bonds/yields. ECB is intervening holding it below critical 6.5%, if it gets above it may trigger margin increase changes and the consequences (financial stresses) are inevitable and are unknown. After filtering all the Euro noise out this is likely most critical. Still, amazingly market is not so alarmed by Italian yields at these high levels giving credence to calmness/taking this in stride as well, which allows for any positive developments on this front to rally market.

Despite October rally, risk is underweight as most remain bearish. Performance chasing in risk is a good possibility into year-end, if European downside risk is reduced or at least the perception that it is for the time being. Improved US economic data and earnings is also offsetting Sovereign debt crisis noise as US double dip/recession fears have receded, while larger European economies confirmed a slide into recession last week (as expected this Q). (again)Italian 10yr’s must be kept in check for the offset to continue.

SP technical look for (limited) upside with a decisive break over 1275, Italian yields below <6% would likely calm fears and allow such a move. On downside, SP 1220-1230 and afterwards 1193 is the level to watch for support.

Earnings related stocks from last week:

N, SBUX, HANS, IACI, CVLT (cloud names N,FFIV, DTLK etc. acting well since EPS’), SIMO, MELI, FIO (caution: thin volume and competition coming make it volatile), EL, MDRX, CLH. *Some of these names are at double top levels.

Tuesday
Nov082011

Ahead of the open,(7-11)

Yesterday’s opening Journal paragraph started to play out overnight as Italy took over the front pages from Greece with its 10 yield shooting up to 6.65%. Importantly, as "amazingly" last week with the market not alarmed, the market was “taking this in stride” once again even with 30bps rise into dangerous (bailout) territory, while the SP rose to 1261 (+8). Part of the market seemingly being immune is the fact margin requirements were not changed (yet?), changes would likely provoke selling and we’d see 7% as margins get raised. It’s also possible it’s too early, a few days at these levels may change everything for the world’s 3rd largest debtor and market. A ‘no’ vote on some Italian budget measures Tuesday would likely cause yield surge and risk asset sale. Expecting more Pre/post vote erratic trading.

The good thing for traders is if Italian yields go down, it may give market fuel to move further.

Interestingly, Berlusconi possible exit was viewed as a positive (see below Greece), but this would likely bring on elections instead and would cause all austerity /reforms to be put on hold for a few months= more uncertainty in regards to Europe. A Greek style unity gov’t is an unlikely ‘positive’.

Do note R2K closed in the red (many times a sign of empty rally) and the reasons cited for afternoon melt up were numerous, but not one was really worthy.

Not much on single stock action off specific news/ earnings as market awaits CSCO ( 1st major end October data point report) on Wednesday.

Wednesday
Nov092011

Ahead of the open, (9-11)

..no more Bunga Bunga

Much to this trader’s chagrin, firstly watching a muted reaction to Berlusconi’s exit, followed by a late rally in the US markets has reversed dramatically at the European market open. If you looked at 10yr bonds following word of resignation, you’d see the dislocation. Call it an early sign the US markets were naïve and wrong as optimism has dissipated quickly.

Although, it was ‘yes’ vote on the Italian 2010 budget, it was still a ‘no’ vote as it’s forcing Berlusconi to step down. “...would cause yield surge and risk asset sale.”. As discussed, PM’s exit = more uncertainty for Eurozone and this morning markets realize this with yields skyrocketing to >7.40% with ECB intervening after margin rates were first raised in France. Deposit charges on 10yr went to 11.65% from 6.65% on the LCH clearing house arm.

Away from the Armageddon in Europe, which now enters a new ‘unknown’ phase, the US markets ironically tested the ~1275 resistance area and now will have an even tougher time to get over it in the future. Start looking at supports noted this weekend. Total denial by markets recently may reach a boiling point.

Thursday
Nov102011

Ahead of the open, (10-11)

As discussed for a few days as to how the market remains in denial was answered today in a bloodbath..”..It’s also possible it’s too early, a few days at these levels may change everything for the world’s 3rd largest debtor.” …and of course the market would follow. SP500 -47pts to 1,229, DJIA -389pts to 11,781, NASD-105.84pts to 2,622 and R2K -36 to 719 (which led the ride as mkts had their biggest decline since mid August, although market seemed less panicky than August b/c eventually (as always before), things will be fixed is the motto…

However, in this view, what was before was a solvency problem with Greece etc, Italy is a growing liquidity problem. Liquidity problems lead to monies not loaned to US companies etc.(last week saw loan surveys pointing to taps being closed for some US co`s dealing w Europe) and a Lehman situation arises. That`s how recessions grow from overseas, as noted other day `big`Europe is in a recession already (note only a analysts have stated this publicly last few days, so it`s only personal opinion from recent eco`data out of Europe) and today we saw GM blame Europe and GDP was lowered by a tier 1 financial after eco`numbers today showed US is not immune…so, question has the dam broken and the spill started from across the Atlantic. Oh yeah, earnings were horrible today, it’s possible to list 10+ single stocks(lots nasd tech stuff) that succumbed badly to bad earnings, although CSCO was quite positive AH’s.

Maybe this spillage realization took the market from down DJIA 300pts to 190 and back down to 400+ , instead of the usual afternoon rallies recently that were hyped all over the media today. Once this buying after Europe closed was not playing out in the afternoon, selling picked up last hour. Correlations were high with all sectors-stocks, all were hit.

Note there are plenty of so-called solutions (ECB, IMF, unity gov’t in Italy) to Europe-Italy, so market can rally at any time, but the question is will it come quick enough or be big enough (if ECB,IMF) to keep contagion away and not affect US corps’.

Friday
Nov112011

Ahead of the open, (11-11)

Some stabilization post bloodbath will likely continue into Remembrance /Veterans day with US bond markets closed/ little eco’ data (Mich. Confidence#). Some positive developments today and possibly over weekend in respect to Italy, but it seems it may too late to reverse direction considering SP~1275 was a stop sign this trading week. It’s also possibly late b/c eyes have moved on to France, it’s yields and spread vs. Bunds. Add the high possibility stabilization in the Eurozone is usually short lived and downtrend started last week may resume next week.

Not much conviction to lay out exposure on either side (longs or shorts) between 1275- 1230/1220, expectation is for November chop trade until these levels penetrated.

  • Noticeable is some negative trends circulating in the underlying market: momentum stocks stalling out and/or being shredded post EPS, R2K underperformance/ some mid –caps earnings late this week that should have had some upside up trade are being ignored. Too many times one or more of these has signalled an end to the uptrend trade.
Monday
Nov142011

Into the trading week, (Nov14-)

Heading into last week’s trading, cited.. “A fresh and likely biggest wary to look at is Italian bonds/yields. ECB is intervening holding it below critical 6.5%, if it gets above it may trigger margin increase changes and the consequences (financial stresses) are inevitable and are unknown.”. Incredibly, it seems the entire the ‘Italian’ story unfolded soon after and played out in the next 5 days from beginning to end, you may say. First, yield pushing above 6.5%, soon quickly to ~7.5% on margin increases and by end week back down below 6.5% with markets indices following in sync, while hitting the SP resistance and support levels laid out on the spot.

What’s really amazing is how fast the Italians moved to calm the financial markets from abyss vs, ie. Greece, which was an unexpected event (passing reforms through house and creating a unity gov’t in just a few days vs. going to elections and dragging everything with it), allowing the market to finish incrementally higher on the week. Yes, they may go to elections still, but it’s not an immediate factor now. Now the question is how Italy is assisted with its funding down the road if yields stay high, IMF/EFSF together is likely not enough. ECB powers in?

What the week did was demonstrate the market is still .. “taking this in stride”, as far as the European crisis. Despite the mid-week bloodbath day, markets didn’t even hit the prior week’s low achieved off Greek referendum news. Also importantly, as noted after the biggest decline day since mid-Aug,..” market seems less panicky than August b/c eventually (as always before), things will be fixed is the motto”. Ahead, any dip off any more sell offs stemming from Europe will be looked on as buying the dip opportunity again as US market showcases it’s resiliency and decoupling from European headlines.

Ahead of the trading week, still concerned with the underlying tape (see Friday’s ahead of open view). Note despite strong rally Friday, R2K and Nasdaq finished in the red for the week as higher beta (momentum stocks) still lagged. Also, financials were very strong during October rally are not participating here. Looking for these factors to change to get over 1275 SP.