Worth every bit of headline...

We had a little hope yesterday!   We hoped that the market today would at least close flat and not to lose any ground on the day following a rally.    Boy did we close "flat"!   To summarize the action today, it was simply breathtaking.    There are basically two parts to today's theme.    The first part is of course the 'trading part' and as long as you had a little merchandise from the day before, or played just about anything intraday, you'd come out on top.   This is good because everybody is making money today, even probably the shorts!   Why?   We are assuming some shorts would be smart enough to cover today and booked some of their profit.   This is least important as it's really about the possibility to trade and make money into the New Year, not just today.    The second part is the psychological part!    Yes, the rally today does resemble the rally we had two Tuesdays ago but both rallies do seem a world apart.    Today's move is followed by a very strong move off yesterday and this is a very bullish sign.   This tells us that there can be momentum on the upside, and this market isn't just a one way ticket down.    Over 500 points were made in two days' worth of trading.    You can attribute some of those point gains to short covering but shorts cover for a reason don't they?     Now granted, we've come from a very oversold condition that is almost a month long, and today doesn't guarantee the end of this downturn.     However, odds have dramatically improved that we have just witnessed a bottom couple of days ago.     Basically, we need to fall more than 500 points just to reach the previous low and somehow we don't think there's that much more merchandise left for people to dump.     Even the financials, all of them, had a great day today.     Ok, we aren't going to get too cute with the financials and we still don't think they should be on our playlist, except GS here and there.   However, seeing the financials behave the way they did today does inject some much needed confidence back into ourselves which benefits our trading with other names.

Let's talk about some names....    First of all, the rally today is so broad based, we couldn't really find anything that's not working.    We'll just stick to some of the obvious and highly playable ones from our previous leaders. 

RIMM BIDU AAPL GOOG, out of these liquid ones, we actually liked the action from BIDU the best.   It does give you the best bang for the buck kind of deal.    Of course, today's isn't one of those average up days, so we'd cash out most of positions toward the end and only leave a small one in case we have another positive surprise.    The odds of this market having another great day like today is almost slim to none but we still have to respect what this market is capable of.

Solars,  SPWR/FSLR/STP, these three have become our favourites among the solar names because of their relative performance to the rest of the sector.    STP, a recent addition here and FSLR are near all time high and SPWR went up the most today.    We think given the current rosiness of this market, these names may get another leg up.     Remember, short term players will always look for plays that are fast and furious when the market is in a good mood.

Shippers, although this is the group that took the biggest damage last little while, they are being cheered for today.    We aren't looking for extended gains in names like DRYS EXM since they were beaten so badly and there's probably tons of resistance on their way up.   We'd simply be trading them in a day by day case.

ISRG, usually can pull off more than a few consecutive up days when it changes trends and VIP, a recent noted for a pre-earnings move with a NCH in sight, cashed in on one and will now feed or not feed off the report. These are of trading interest as well.  SIGM, put in an impressive Q and we will watch for a pullback here most likely.

Now, if we can only get the Asian DJIM plays joining, maybe we just will as a Chinese official said the country "will' proceed with a plan allowing individual purchases of the city's stocks.  Remember, this is a big part of the rally in the HANG this year and is also a big part of why the market corrected recently after an official said this was most likely being postponed. The HANG was up 4% overnight, large part to the activity in North America, but also to this 'will' proceed.  LFT, STV, EJ, WX, a few of the most widely played here...let's keep a close eye on them today for an opportunity.

Bottom line, the action may signify the end of the recent correction.    We aren't completely out of the woods yet but odds are pretty good that we won't go visit the recent lows in the 'short term'.     This does not mean that we have to go 100% back into this market right away.   Remember, we still need this market to find a strong footing and let it go back and forth and go sideways a bit before mounting an assault higher.   It does look like a Santa Claus rally may just be possible this year.