Looking for an edge...

Traditionally, market will begin to slow down right about here.    So what are we going to be looking for the next few months?    Well, we know that some participants will take it the easy and take on a vacation, literally.    For others, they'd still grind it out day in and day out, but at a much slower pace.     What we at DJIM are going to look for are plays that aren't beta, but rather look for those plays that move independently from the market.    Of course, that is assuming that the market does not make a dramatic move in either direction.     So,  there's the big rally strategy, there's the big selloff strategy, and then there's this slow action, lazy summer kind of strategy.

How do we approach this market then?    Assuming that some of us have a sizable portfolio, we are going to commit 1/5th of the capital into work, as opposed to the usual amount we'd commit during a busy earning season.    This is just a form of discipline we practice during the slower market.   We found it that when dealing with a slower market, it's much easier to manage fewer positions and smaller sizes.   So at the end, we try to make our trading life easier.    However, managing fewer positions does not mean that we track fewer positions.  On the contrary, we may be forced to track more positions just because we have to expand our watchlist to include not only the smaller caps, but mid caps and some bigger caps as well.

The market may head into a uncertain direction, but our methodology and discipline do not change.   The intensity of trading may not be as high as a couple of months back but our focus is still right at the top.

Here are some stocks of interest today...

TRR, we bit a little bit of this one today.    We liked its action lately and felt it's in play and can last a little longer. The company reported recently and has climbed about 40%. Co reports Q1 (Sep) EPS of $0.01 vs ($0.34) in yr ago period; reports gross revs of $102.9 mln vs $110.6 mln in yr ago period. Co reports Q2 (Dec) EPS of $0.05, ex-items, vs ($0.37) in yr ago period; reports gross revs of $114.5 mln vs $96.2 mln in yr ago period. Co sees Q3 gross revs of $115 mln.  This is a turnaround story as the co`restructures that is seemingly liked.  NCH

TATTF, finally, this is no stranger to DJIM Forum, IBD talk and we have played this one numerous times before.  It reported its best EPS-Revenue Q yet and after taking a beating from $28 Feb- March, this looks like it could make up some of the lost ground off this report.

PCS, is one of the best IPO`s of 2007.   It traded 20mln shares on its opening day and has not stopped moving up since. The wireless carrier is showing tremendous growth as it offers a flat monthly fee for unlimited airtime and other combos including internet access.  Today's action was selling on the news.  The news being the lead brokerages quiet period ended (actually last week) and four came out with price targets between $41 and $46, including 2 buy ratings.  You could see one determined seller in the morning that wouldn't go away, you dont need level 2 to see him. What happens many times is a few load up into the end of the quiet period to unload into the brokerages coverage. This was clearly what was going on today and you should always back off a little if you see a dude throwing up 3-5k consistently to sell.  We think this will hold the 9ema and turn back up once the seller is driven away.  We will look to add on such action as this stock is in the right space with great growth.

MFLO,  this is a stock we were buying around $21 a few days ago and have been in with smaller positions for a couple of days now.    We added some today given its relative strength compare to the rest of the market.   It notched a new high and we like the way it held up most of its gain through the end.  Like we said the other night, we think something is up here that we little people don`t  know about.

TBSI, last couple of days proved to be a good test on this one as it bounced off its 9 ema.    Today's strength may suggests that the run-up is not over but we aren't certain at this point what kind of follow through it'll get.   The good thing about this one here, is that it's only a buck off its high.

MA/FWLT, these two, despite their strength among the bigger names we follow, follow the index much more closely than many of the smaller caps.  You can almost see the intraday correlation between them and the index.   To us, we can still scalp some nice points off them given the volatile nature of this market.