For the first time in a long while, index gapped higher and stayed strong throughout the day and closed near the high. This is something we haven't experienced in a while and we welcome this change of pace. To be honest here, this month is supposed to be a vacation month for many participants and it's so far turning out to be anything but. The last time we had this much activity this time around was the year of the hurricane and it was very sector specific in terms of trading. This time around, we are dealing with a crisis and alot of people are sticking around to see it through. This can be both a good thing and bad thing. It's good that we are finally trading with some meaningful volume with some good plays in supposedly the slowest month of the year. It's bad that if we keep up this pace, most traders would get burned out sooner than later.
Now the topic of timing! Trading opportunities are useless if you can't time it right. Potential opportunities are only potential if you can't take advantage of the setup. We are stressing that because these days, a trade can only be maximized if you enter the setup and exit it correctly. Fundamentals, unfortunately only matters most in a calm and non volatile environment. We have to fully realize that we are "trading" the opportunities here in this extraordinary environment. Make sure you treat our plays here as a trade, not an investment. Earnings number merely provide a catalyst and ultimately it's the market participants' collective effort to dirve a stock higher or down. We at DJIM are doing what we can to gauge the force between demand and supply and take advantage of such imbalance in a timely manner. You enter a trade at the right time and exit when it calls for. This is called timing and we strongly encourage everyone to get to know intraday technical and other short term trend spotting technique to benefit and improve the trading.
Now onto some stocks...
DRYS, as noted last night, this one came out with earnings and it's the one to watch on top of our list. SO why didn't we enter the trade earlier? Again, timing is everything and we wanted to make sure the minute we enter the trade, it can only go nowhere but up. This is where intraday reading comes in. We aren't sure if traders would have enough to push this one higher earlier but toward the afternoon we were more confident to go in for a trade when it was pushed over $60. Had this one stayed around $59 in the afternoon, we would not have entered a trade. This one is not known for gap ups after a big day but it's so close to its old high and we couldn't help thinking that it's ready to bust through, given a little help from the overall market.
BCSI, the small float helped alot on this crazy mover today. We are definitely putting this one high on our watchlist too and looking to trade a few points when the appropriate setup comes.
VMW, you have to respect what this one is capable of. It can take you way up and can drop you down, all in a very liquid fashion. We alerted earlier that we'd be selling some into strength and lock up some nice profit and would reenter in the late afternoon if the pace keeps up. The close is a little disappointing so we have to see how it plays out tomorrow.
There are quite a few stocks that looked strong toward the end and it's definitely a good idea to keep an eye on them for tomorrow. Some of the stocks we are currently watching/holding for tomorrow include CRNT LDK MR TBSI ISRG GHM.... At the close, there's an announcement that BoA made an equity investment into Country Wide Financial. This news is causing some positive stir in the futures and it'd be interesting to see if we can get some positive follow through tomorrow.