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Thursday
Feb012007

Post Fed Day

Normally, or many times in the past, the "Post Fed Day" has not always been kind to the market.   This time the market definitely had a change of heart.    When it comes to DJIM stocks, we actually had a much better afternoon than in the morning.   Many of the stocks we are familiar with just simply strengthened up toward the end and some of them had pretty good closing actually.   We'll pick out a few and highlight them...

CCF, perhaps this one is the most surprising one out of the bunch.   It was very ironic that only a couple of days ago that we were worried about its above volume sell off.   Again, we pointed out that we'd give it a couple of days to let it show us which way it wants to lean.   Volume today isn't spectacular but we think it has potential.   We added back some shrs today and no doubt also contributed to some of the rise today.   Nonetheless a new closing high is a new closing high.    What this does is that it actually puts this one back to our top watchlist and we'll again be adding aggressively.   The conclusion is, let the stock show you how strong it is before making up your mind of adding/chasing.   There's no need to be overly optimistic on "the best play" if the action seems uncertain.   If uncertainty occurs, reduce position and sit on the sideline with a little exposure.   Once the danger is over and the trend is clear, then jump back in.    Actually, this is more like the strategy for surviving in the jungle. lol   But in all honesty, trading the market is like surviving in the jungle.  There's really nobody else to look after you other than yourself.   Making kills (plays) just don't come easy when you got so much competition out there.

MFW, it's been up three days in a row now since our alerts on it Monday and of course the little alarm might tick off for a possible pause in this latest runup.    It doesn't mean that we have to go all out and sell it out.   Just be prepared for reversal and when it happens, don't be hesitant to reduce.  Recently after our initial buy in, MFW provided one quick trip down and that has turned out to be one of the best trades recently for us adding in the $26's.

SILC, ok so this one sat there for a couple of days and today broke out on pretty good volume.  There's not much to say other than the fact we added some toward the end.   Why at the end you ask?    If a breakout does not hold till the end, then it may be a fake one and we simply hate any kind of fake break outs.

HRBN, what to expect tomorrow?   Ummm, there's a chance it may follow through and start some momentum.   We are keeping our fingers crossed and if there's any sign of momentum picking up, we'd be adding aggressively.   We are watching it very closely.

TGX, time to let some go today.   We all had a chance after alert at $4, 20+% in 2 days is just too good to ignore.    We reduced most and looking to add on pullbacks.  BT noted in forum some technical analysis on it today.

A note on tech earnings on the Nasdaq, a definite theme has developed that started with AAPL, a few names early this week and then GOOG today.  You can put SWIR in this bunch of sell offs off excellent results.  Last night, we talked of the slows action in AH in the 15's and up only 10% on SWIR..."Maybe we should listen to the CC to find out why this didn't trade higher, but instead we'll let the action in the morning dictate what we do".  The action early showed SWIR had no chance and why.  Simply these techs are selling off the stellar earning news.   As we always say and said last night, wait for the market to dictate what you should do on a earning reaction.  If you do take a position early make sure its a starter, something you can rid of without much of a loss quickly.   At this point, we are carrying between 10-15 positions on any given day and blowing out a small starter position as in SWIR from AH is nothing when you have positive action in so many DJIM stocks.  Cut the laggards and those behaving badly.  If you are one to carry 2-3 positions at a time, you definitely should not be going large into earnings plays until the market shows you what it thinks.   It tells you pretty fast as with GOOG and SWIR last night and today.  We are looking at DLB's earning with all this in mind tomorrow despite how attractive it looked on paper first.

Other stocks showing strength, some more than others.. include ENR ABM GLDN VARI CNS OEH NWK FSYS ALB CENX TRCR ... so most of them are eps plays and all of them you've seen at DJIM over the past 5 months.