Your Personal Trader - DJIM Journal 2011

As if on cue (DJIM's ;), despite a very ordinary flat open, the market roared soon afterwards for the first hour…”we may have some follow through with risk assets (commodity linked stocks, growth stocks) playing some catch up.”. After days of underperformance, it was the RUT~2%, not the DJIA that pushed the market to SPX 1300 as ‘ dead cat bounces’ just discussed in our ‘momentum and commodities' section updates ensued. Rotation occurred as the materials/ tech(momo) led the way. All in, the RUT excelled, but this is only a dead cat bounce until it at least makes it back into the Sept – Jan channel (closed at ‘R’). The NAZ faces the same 'R' in its chart and both are hovering around 20ma. It was nice to see short covering (mostly) in the first hour come into ‘indvidual stocks’, but the lack of conviction for further gains is still evident as the market flaltlines rest of the day. On the SPX look to 1307’ish for “R”, not 1300 as an Initial claims under 400k should spur a move.

Shadowlist

Momentum/earnings/“winners of ‘10 – The flyers, CRM RVBD NVDA RHT etc.’ finally caught a bid due to…”positive takeaway it was FFIV’s reversal from $102 -$107 in the green. ….Earnings positive was an upbeat JNPR”. JNPR, ^1.50 /4% off premarket price after a subtle earnings reaction, it speaks volumes for many techs’/ clouds so it definitely helped the sector mood.
Q4 earnings update - we’ve been anticipating better EPS reactions post FFIV AAPL GOOG due to bar being lowered and today small caps were prime examples of this occurring from JNPR, FNET, MSTR, KEYN. AMC, NFLX fits into this premise as do a bunch of strong tech earnings with favourable reactions. (QCOM TER etc.)
Commodities – Materials, one of the top sectors today climbing ~2%. Steels, (X) led early, related name CLF and WLT joined in with nice days.