One way or the other, it's not so easy to take advantage of this headline driven market. Extreme emotion leads to extreme volatility and we have just witnessed two of the most volatile trading days. Now that the Fed thing is over, we can move on and focus on events that'll shape up the rest of the year. The big picture is that we are still in a much better shape than a month ago. Regardless how you judge Fed's recent decision, Fed is doing something to help out the credit crunch by addressing the liquidity issues. That to us, this the encouragement this market needs, but we have to see if it's enough. Financial stocks are just weighing in on this market, day in and day out too much. Soon we will get some good insights off reports from LEH and GS. Hopefully, these two would provide the kind of certainty this market needs to get some stability from the sector.
Solar plays, basically you just can't go through a trading day without playing these it seems. Crude broke $90 signalling a possible technical recovery and that should bode well for the solar group again. LDK has been active the last couple of days and think this one needs to catch up to others in terms of valuation in light of the recent development and therefore might have more leg room. SOLF is also becoming one of our favourite to trade along with STP JASO and FSLR. Again, remember we noted the upgrades seen recently as a possible prelude to their action as we've seen in the past. At least, 2 more are out this morning, including one on FSLR with a $300+ target.
GXDX, this is a biotech co. similar to WX and it's based in U.S noted in the forum Oct 31. It came out with an eps report tonight and we think it's a very good report that showed a tremendous growth rate. The issue size was only 5 million shares. This one also doesn't trade a lot so the volatility can be high when it comes to trading. Knowing what they just reported, we are putting this one on our active playlist and will add incrementally when opportunity comes. There hasn't been many good eps report from small caps lately, so this is definitely refreshing. It will be interesting to see if there is interest in this kind of play from the market.
Turned out the prudent thing to do yesterday was to sell the gap and not just consider it as we noted in yesterdays pre trading note. The swings are wild and you have to your trading hat on or lose all or most of your gains as the market digests the rate cut and the follow up liquidity plan. It may take a few more days and it's best we wait it out to see a trend emerge. Again.. .."what we need to see is the indices recover and hold 13500 on the DJIA and 2700 on the NASD to start thinking of accumulating positions of substance". This would be a start!