Calming down..

It seems that the volatility of this market has eased a bit.    Despite the intraday swing of the index, many of the plays on our watchlist do seem to calm down somewhat today.   We like this behaviour and this is the kind of mood we'd be able to deal with.     Even though the breadth is pretty balanced today but we somehow happen to have quite a few green ones on our watchlist.     This of course does not mean everything is playable but it's definitely a start.     Having a long list of stocks in green do give us somewhat of a comforting feeling to perhaps step back into a play or two.    This is supposed to be the follow through day and we also mentioned yesterday that we need a day or two to digest which plays might be worth playing.

Here are some plays we are looking at today....

VMW, we don't think the enthusiasm has died down from this IPO.    Again, if this one is claimed to be the next big thing, it should get some good momentum going as long as the techs in good shape.   We are watching $59 mark closely for a possible break there.

WX, this one did very well today and we chased some near the end.   We actually like some of the recent IPOs and they are faring this volatility pretty well.

JST, surprisingly, it held up really well today off a gap up.    We are watching this one with some great interest and want to see what this one is planning to do after today.

FSLR, can an upgrade be able to bring back the former glory out of this play?   One thing is for sure, there will be lots of resistance ahead of this one so expectation needs to be realistic from the bounce.    We are merely playing quick points here and until there's some improvement in the entire solar sector, it's just going to be quick point play off news.

Focusing on the sure plays...

Index is doing a good job confusing traders today and it looks as though it'll take a while for some conviction to kick in.    Most of us aren't counting on a major rally at the moment and we are only playing things off a tradable bounce.    As long as we are aware that this is the situation we are in, we then have to look at plays that offer us this kind of tradable opportunities.     There is really just a few obvious plays worth watching for today and we will go through them here...

VMW, we pointed out last night that the break out area is around $59 and boy did it explode after it broke through that mark.    Again, it's about emotion and momentum at this moment and there's really no need to even look at its fundamental aspect of this play.    The ones who paid $66/share only care if he/she can get out at $69 or higher.    Pay attention to the technical sign and intraday movement as they are the only necessary things you need to trade this play at the moment.    With its strong close today, we carried some position home and we'd be at it again aggressively tomorrow.     This one has the kind of liquidity and price movement we haven't seen in a long while.   Take our word for it, this kind of play doesn't come often and do take advantage of it.

ISRG, this one poked back above 9 ema today and closed near the high.   We are keeping our  eyes close on it for a potential follow through.   Unfortunately, many plays on our watchlist are very sensitive to the index movement and it's impossible to forecast the index on an hourly basis.   In another word, playing these kind of plays can be risky so we'd do small lots to cut the exposure down to minimum.

DRYS/TBSI, after DRYS eps report tonight, we'd keep our eyes closely on this pair tomorrow morning for a potential trade.    This group was taken down like others last few days and it'd be interesting to see if they can recover some off this DRYS report.

Bottom line, the index point movement  lately may not show the true potential of this market's volatility.    We shouldn't let this seemingly calm action lower our guard down.    The market can turn badly literally off one piece of bad news and we have to be prepared for it.    We are far from out of the woods  and it's definitely appropriate to trade lightly.    Keep the plays simple and short and we'd able to finish this month on a high note.

Timing is of Essence

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. 

Tug of war

Given the amount of points market has risen since the low of last Thursday, we think it actually did pretty good today.    Volatility has eased quite a bit and it seems there are willing buyers out there, on selective stocks.     Once again, we had some trading opportunities from some recent names that looked very interesting today.

VMW, it seems that there's not a day gone by without some sort of action from this one.    Because this one is so new and the momentum is still very strong, we literally just have to rely on 5 min. chart to watch for a reversal.   Action is definitely one of the fastest paced we've traded in a while.    We bought back some and added some near the end.     If a morning pop comes, we'd be willing to part some shares.

WX, ever since this one IPOed, it constantly reminded us of that other Chinese medical co.  MR.    Sure, the business is entirely different with these two companies but the trading resemblance is quite similar days after their IPO.   Top top it off, both had an awesome IBD eps rating to start.    We are trading on technicals only up until today and we will watch any further development to see if it can pick up any momentum like other IBD related stocks.

CRNT, speaking of IBD, this former IBD #1 stock is still live and strong.    Tomorrow comes a big test of $17 and we think if it breaks out clean, we'd see some quick upside.    Again, tomorrow's Friday and many traders may not push it too hard and as long as it stays up here for IBD, we can all leave it untill next week to try for a meaningful push.

ARCI/DOCX,  many of you may not even remember these two cheapies when we alerted a while back but they both had a fantastic day, in their respective way that is.    The trading in DOCX may seem iffy but it goes to show that sometimes it's worth it just to park a couple shares in these kind of stocks as long as they don't break down. 

DJIM #35

If you were told a week in advance where the stock indices would end up, what would you have done?   In other words, what stocks would you have bought or sold in anticipation of this move.   Frankly, we wouldn't have guessed right about any stocks even if we were told the indices would go up this much.    Instead, we just had to rely on our instinct and take cues from daily action.     Everyday, things can change and moves can be unpredictable.    This is definitely one of the toughest trading environment we had to encounter last little while.    Sure, at the end of the week, we can look back and see how easy all these plays would've been called and how everything just made sense the way they behaved.   So was it that obvious?   Lets just say, every one of us would have a different version of answer to that.

The fact of the matter is, despite what may seemed like a good week for many of us, we still played very cautiously.    We try not to out read the market or outsmart the trend.    We just stuck to a simple game plan.      We look for plays that have relative good strength and load them when market is in good momentum.     We lock profit constantly when the market looks directionless and buy them back when the market looks stable enough.    All in all, we simply stuck with a group of stocks that stood out from the crowd.    That, to us, is the key in trading in this kind of market.  This isn't to say this strategy is fire proof and can net you a crazy return.    To us, this is just the safest means to survive in this kind of unpredictable market.

In terms of crisis management, we seemed to have gotten less news(bad ones) from the market last week.   This definitely calmed down all of the market participants somewhat.   However, this doesn't mean that it's the end of this whole subprime and credit crunch saga and we are safe to move on.    This market still needs some strong test.    The kind of tests we are referring to are the "swallow the bad news" kind of test.    Basically, we wanted to see how this market copes with another round of subprime or credit crunch related news.    If by then, the market seems to absorb the news in a good way and focus more on the earnings side of things, we may then be able to expand our play list into other area and increase our exposure.     Basically, we just have to be prepared for alot of unknowns and everybody has a fair chance at this point.  Tthis is why we love this gig!

Now onto some plays...

WX, this one didn't make it to IBD100, in case anyone cared.    We don't think this is the concern at the moment.   What we notice is that this one is sure on alot of traders' radar as a hot play.    We like this fact!    This company is in a unique position to take advantage of its business.   Basically, nobody can compete with them in terms of cost, the cost of doing business that is.    As far as its business goes, you can simply read up the latest IPO filing.     Right now, we are playing this one like any other hot plays.  It means we are taking profit as often as  going for re-entries.    The play isn't looking tired in anyway at this moment and we hope it'd last alittle while longer.

VMW, perhaps we should just simply buy this one for long term, like back when Google IPOed.   But we then realized there's only one Google and this one is called VMW.    There's alot of expectation out of this one and institutions are getting involved in a big way.   Sure, we don't think its business can grow like Google but that is of no concern to us at this moment.   This play still has legs and we aren't playing this one casually either.

DRYS, this one just looks very tricky because it's at its previous high.    Keep in mind, we aren't talking about the earnings or fundamentals here and there's nothing wrong with that.    We are simply unsure if shippers as a group can gain a new leg up.   We don't believe DRYS can go up on its own without the whole sector following behind its leadership.   This is a big if and we have to keep it in mind constantly.

CRNT, who'd thought BIDU would take #1 spot on IBD100, instead of this one?   It's irrelevant at this point.    We got a feeling that this one can start a new leg from here.    Alot of this speculation hinges on the performance of the index, however.   Unlike some of the other plays here that trade less dependently on the market, this one seems to follow the indices better.

BCSI, even a monster needs a rest sometimes.    Of course, this one has the kind of float that reminded us of many great plays in the past.     We'd be alittle more careful trading this one.

One for the disciplined...

Basically, this market behaved just about as orderly as anyone could expect today.   Nobody imagined  we can duplicate the kind of performance we had last week, so the week started on a cautionary note and the day ended that way too.    This is ok!   Perhaps, we need to build upon last week's technical strength and build a stronger base here.    The longer we stay away from that low of a week and half ago, the better odds that we can stage a even more meaningful rally.    So, in order to see how strong this market can hold, we need to test this market.    Notice that we haven't used the word volatility in the last few days.   Indeed, the market's getting less volatile which means we would feel more comfortable of buying some of the strongest stocks on a pullback.     Could this also mean the calm before the storm?   It's possible that we can be setup for a big drop but even a storm would give us at least a couple of hours of heads up.    Right now, we just simply have to deal with the current forecast.

Now some plays...

CRNT, the way it ended today, it's both a good thing and a bad thing.    It's a good thing that it actually followed its usual pattern of being sold off after "getting listed on IBD100".     Well, that means we know the new resistance now and where to start buying back.    It's a bad thing that it didn't start a new leg, after it took on a nch on Friday that is.   Keep in mind, this stock tracks the Naz index pretty well and had the Naz stayed in greeen today, we might've gotten our wish.

WX, if you haven't sold at least some over $27, shame on you!    Does today's drop signify that the runup is over?  Hardly!   It just means that if you haven't taken advantage of the earlier strength and let some go(assuming you got some from last week), then it'd be just another lesson in your book.    We sold most earlier and we'd be looking for a green close to get back in some next few days.    This play is still very active and there's no reason to believe it would just top here.

EJ, this is a new play we added to our watchlist today.   Although we don't think it's nearly as sexy as WX, but being one of the recent Chinese IPO and the way many Chinese ADRs have been behaving lately, we think it has a chance to runup some.   The technical looks good and there's a test coming up to see if it can break out of $19.50, which is around the closing price on its IPO day.

MR, in keeping with the theme, we are putting this one near the top of our watchlist.    It's hard to say if it can break out cleanly but if it does, we feel it can do a multi day runup.    We are looking at around $35.25 as the breakout area.

VMW, this one had only 2 dollar trading range today.   The volatility has come down quite bit on this one and so has the volume.    Last time it had this little volatility and volume, it shot up quite a few points the day after.    Now, we feel it's ready to make a big move.   If it doesn't, we don't mind picking up some more a point or two lower.   In other words, we like this play alot.

DRYS, keep your fingers crossed, tomorrow we'd know if today's breakout is for real or not!

"..if you need a friend , get a dog"

...maybe Gekko meant..Paulson and /or Bernanke?...cause that's the kind of friend this market needs!.  Maybe today's action expedited the inevitable.  Back on Aug 21 premkt, we noted.. "yesterday around 130pm it was released that Paulson would be in on a slumber party w/ Bernanke today and a politician and market picked up...coincidence...nah...Now.....on CNBC U.S. Treasury's Paulson says U.S., Global economy are strong ..Says credit is being repriced across financial markets. Says there is liquidity concern, will take time to play out. ...Treasury Sec Paulson on CNBC says they've been seeing stresses and strains in a number of capital mkts, but this is against the backdrop of a very strong global economy ....definitely 'working the room' you could say..lets see if it helps today as well..Paulson usually gets his mates going.."

Interestingly, where their 'mates' got us going was taken away today.... 6-7 trading days gone in a 'poof'`today.  What we need now is intervention again, except this time in real terms.  No more working the rooms is going to sustain this market.  Simply, the day didn't start in a good way when Merrill became naughty and downgraded C-LEH-BSC.   This gave light to charts as the influential banking sec was going to play a role here. The break of Thursdays low's was noted this weekend in charts as a potential mark for further downside risk.  It came.  These levels were broken very early in the morning on the NASD 2530/ SPX.  If you're trading millions, fine, use these technicals to get your book out, but if you are trading a few stocks it is probably best you stick it out if you cannot trade these plays hour by hour. 

Midday,  you had to be impressed by the snap backs in VMW, DRYS and a few other recent DJIM names that were hanging 'green'.  Then the FOMC minutes were released and anything hanging tough, started to weaken as the selling gained steam.  If you have been trading this market with us, you know, we've said this volatility will not go away overnight and today it came back in bunches.   So, you still have a few choices and that is either suck up days like this and appreciate the recent runs in WX, VMW or go cash and miss the 'intervention' that will likely cause this market to go up and take your holds with it.  Overdone like dinner, todays selling activity was in most respects.  Also, as far individual stocks being traded here recently, watch the 9ema as potential bounce activity or if broken with volume as a way for you to say good bye to a loved one.  You had VMW , WX , DRYS  pretty well bounce off this level today.  Despite the flogging today, we still have most plays over 9ema and therefore, in play.

Dog days of summer... need some bark

They are scouting G.Gekkos next lunch in London now, unfortuantely,  all the material they need for the market charcters is in the U.S as far as wankers are concerned this summer.

...Viva Las Vegas...

.."All you need is a strong heart and a nerve of steel" ...How'd Elvis know that's what you need to play this dog days of summer game in late August?.   It's simply a game gone awry with attendance hovering below average and so with little volume, the movements are exaggerated in both directions.   This played in to our game plan for today, rest of week, we felt it was overdone yesterday and with a little intervention it was possible to see your holds shoot back up.  After the street suffered its worst day of losses in about 3 weeks, it was the same banking sec leading the way after starting the shakedown yesterday.  Only this time we had the energy/ semi kicking it up as well.   If you got these 3 sec's going, you got yourself the beginning of a nice move.  A move that was aggravated to the upside by a little intervention as whispers of Bernanke bark from early in the week hit the wires around 2:30pm....."act as needed" ... Ah timing, how sweet it was.  We thought we'd rebound, but the thinking was it would be leading into Bernanke address Friday that many are pushing.  We think it's a false push as Bernanke will avoid the juicy stuff and the market might not re-act so nicely as many are being given false hope something will be revealed.  There's a time and place and this shouldn't be it.

As for individual stocks...the snap backs mentioned last night continued and ones we noted hanging tough before being sliced and diced late in the day yesterday were the ones leading the way...

DRYS, with the BDI making new highs yesterday, it was almost silly to watch it slide yesterday . But..then again, this is DRYS and these moves are nothing new.  Today it pumped up 8% and finds itself at highs.  Will it hold this time?. 

GLDN, this is about 10 points since the 15th when we started covering it again after it signed a deal with McDonalds in Russia.  It's closed just under a NCH and with VIP, MBT reporting soon, we think it could go higher if these Russian buddies report well.  The dates are in the earnings link.  There is still a few days to those reports, so we'd watch this top area that has been touched a few times in recent history for now.

ISRG, finally!..after banging its head in the $212 area for like 5 or 6 consecutive days, it finally pushed through end of July high close. Any other time of the year, we'd say the volume was not convincing for a breakout.  But, considering its late August and dry everywhere this might be enough to push it further.

WX, continued its bounce of 9ema area early on, but the move never materialized further when the market kicked in.  One other disappointment was the action in VMW considering the technology sec was grooving and it opened $72's..  Sometimes the popular kids just don't go to these lame summer parties.  We think these got their own game going and today they just let others play after partying for days!

LDK, yes, we watched the FSLR, JASO % moves, but the one that stands out to us is LDK here.  If any of these solars should have moved the most, it was LDK as it got another 500mln supply gig.  The others just had recovery bounces.  The LDK chart looks best out of these and that's what we're going with into tomorrow's trading day.

A few other names familiar names we're trading into tomorrow are CRNT, PCR as they sit 9ema area.

Last  night, we said despite the beating, most DJIM plays were above the 9ema and therefore in play.  We saw that potential play today and now it is better as many are near or at highs.  If the market has room to go higher, this where we want to be...stocks making NCH's

Get use to it...

This kind of action will probably dictate us for a little while.    As the summer holiday is getting closer to an end and more market participants come back to the trading table, it isn't going to be smooth sailing.     There are still many things to be worried about and many potential negative news that would come our way.    The one thing that would keep everyone in check is the number of unknowns that's still yet to come.     On the bright side, it also looks as though it's going to take some really bad news to drive this market down and test the previous low.     Well, lets just hope it doesn't come to that point.      Yes, we have talked about the fact we need to test this market and we just had a taste of that the day before yesterday.    Testing the market does not mean testing the market's recent low, it simply means we have to test how resilient this market can be to recover from a bad day or how this market can hold up against bad news.    This will be an ongoing process  untill the time when  market  moves our attention away from this crisis.   Perhaps, and hopefully, the earning season can provide such a distraction.

Now some plays...

FSLR/LDK/JASO,  are solars making a comeback lately?    We haven't seen a coordinated group move in a while and all three stocks closed pretty strong relative to the rest of the market.     We have flipped some intraday but it's really too soon to tell if it's a good idea to pile back into this sector.    Do keep your eyes on these ones though because if they do move, you definitely don't want to miss the boat.

ISRG, this one is at an interesting point here.   It closed at the upper point of its recent trend and at a month high.   We'd really want to see a high volume breakout just to justify chasing this one with a meaningful position.    At this point, we aren't taking any bets and would rather be late to a confirmed breakout as oppose to going all in now with hope that it'd bust out.

CRNT,  we got back in a little bit of this one as things look to settled down somewhat on this one.   This is very much a swing trader's stock as it provides plenty of time for reentries and exit.

DJIM #36 2007

After all the volatility, turbulence in August, the indices finished a shade of green for the month!.    Hard to imagine, but with the needed intervention...bark by Bernanke and Bush late in the week to show we got your back....it was able to pull it off.    The futures boomed pre market off the Bush news, even though it has to do with a very small population.  We opined here last week, we thought Bernanke would not offer any more up and that was the case.   But, it did reinforce his whispers from earlier in the week.  This led to our early alert by 10am to take some profits off the table as we used Bush instead of waiting for Bernanke.    So what happens now?.  Well, why over analyze, just go day by day as August proved.   We don't think the sub prime tree is finished being shook and we expect a few bad apples to fall down and shake up the market here and there.   But...with the summer holidays finished, we think a few deals will come and get us through September that we can then follow through to take us to the late year months that are always considered the better, if not best trading months.   We aren't looking for 1-2 billion deals, we are looking for the 5++bln deals the market will take notice and then feel better about the credits markets.  There are plenty of healthy companies and those willing to give cash to them or for them.  Even though we were reducing the size of our positions and sold off all of some late in the week, those names are the names we will come back to.   A possibility for early in the week is of more momentum.... if you believe many are coming back to their desks and will be playing catch up early this week...bankers, investors, traders...either trying not to miss the market intervention on the long side or short covering.  We'll know soon enough....

In regards to recent DJIM closely followed stocks....it was a big week for many and the late week action provided an extra push and made some of the stocks a little extended and worthy of taking some cash out of them.    We liked seeing many break to new highs,  but we don't doubt some might retrace close to their breakout levels.  If the market dictates chase, well...we'll just chase..no harm as we've protected ourselves and got more to use on them if needed.

DRYS, last weekend we highlighted DRYS and the sector in an alert.  Simply, we had an index (BDI) making new highs while the rest of the market was in recovery and off highs.   Considering how closely trading NCH (new closing highs) is on our priority list here, this looked like a good place to be heading into last week.  This premise played out during the week as DRYS was one of the best to trade out there.  Low 63's to 72 on the week.  EXM , another name noted then also performed great as it also played off an IBD piece.  Their market is very tight, prices are rising for dry bulk vessels day after day but it does not mean we are holding them day after day.

ISRG, a  name thrown around here lately from $111 moved to $120 after taking out 1 month highs in 113, we were happy with that move and so it was one we were parting with until it gives clear indication/ volume of breaking out further.  Again, we after watching for better volume to keep this a sustained position and as of Friday it still wasn't there.

GLDN, we noted its recent tops here last week and after Fridays nice gap open, we'll watch to see if has the heart to move over this level that it has banged its head against twice before getting back in.   It did get a price tgt increase late in the week to $86 by one firm.   Now VIP has reported excellent earnings (a potential suitor of GLDN) and MBT is next line to report.  So, keep them on watch together, they usually work holding hands. Thin ROS might also come into play again.

LDK, it took its time to catch up to the solar movers last week,  but Friday, it tacked on a big day and didn't let us down for mentioning it as our solar play for the week in Wednesday's Journal.  Last two days, mid 45's low to mid 51's.  The DJIM methodology has always been to play stocks making new highs or very close to such.  Even though many solars were having recovery bounces, we preferred to play the safer bet in our view. A stock at highs.

If looking for some stocks that are not extended like some of the ones above might appear, look to other DJIM names we haven`t called out lately since earnings, such as FCN ARTC LDSH UA JST that have lagged...that`s if we see volume and continuation in the market, of course. 

BCSI looks very ready.

VMW WX PCR CRNT MR CUB continue to be tradable day after day and always near the top of our trading list.  BPHX continues to be a nice and popular 'ride' from our forum trader participants.

Also AG stocks came back into the picture after some USDA crop progress numbers released last week. Two recent DJIM names KMGB, TNH were a couple of the big winners...so you might wanna keep a closer eye on them heading into the week.

Trading on short term memory...

For a good while today, it seemed like we are actually trading on the heel of a very good summer.    Well, for some, they may very well just had a couple of good months.    We can only conclude that traders these days have a very short term memory.     This is neither good news nor bad news and we simply have to adapt to mindset of the majority.    For those of us who do rely on historical trading data going further back more than a couple of weeks, we definitely are in much better shape now than a week ago.    Market was tested severely last week and held its footing.    It looks more and more likely that we may get some volatile sideway action until some major news or catalysts that can propel us into another range.   Well, as long as market behaves in a somewhat predictable manner, we as traders can take opportunities as we know and profit from them.

Overall market aside, it's still about individual stock selection.    Basically, the recent playable action is consisted from the Shippers, Solars, few medical stocks, and a couple of oddball techs and misc. stocks.    Basically, we had a pretty big list of stocks to work with and it doesn't look like the list will shrink in size any time soon.    How do you stay ahead of this game with such a powerful list of stocks then?    If you have lots of capital, diversify and play them all and weigh more in those that have the best relative strength.   If you have small capital, be flexible and stay in green stuff at all time, and move out of those that are in sideway action and jump into those that have strong relative strength.        If you haven't been taking advantage of some of the recent runners, perhaps you should go over the priority of your watchlist and review what you could've done differently.

DRYS/EXM/TBSI,  both DRYS and EXM had some really nice early strength that weakened toward the late trading.   We'd be careful chasing these ones in sizes at this point.   The pullback on these can be quick and painful if you aren't careful.   TBSI, however, paints a different picture and it looks as though it's ready to break out.    Unfortunately, the group movement can overshadow any individual strength in this sector.   We'd look at leader for trading clue.

LDK/FSLR/JASO, out of all of the recent solar names we'd been trading, LDK is the only one that's been making new 52 week highs.   We are trading this group on a day by day basis.   Basically, we'd carry some into a good close and flip in out intraday.

MR, we said last week that we are looking for $35.50 area for a breakout with above average volume.    Obviously, we got that today and we added some aggressively.    It's been a long while since this play had a multi day runup and we are crossing our fingers this time too.

EJ, basically, we were looking for a break of $19 and a close above $19.50 to confirm a good breakout.   We got that today and we did the obvious.

WX, earning is coming out on Thursday morning and it's more than likely to be good.   However, we aren't taking any chances and we'd reduce our exposure to a bare bone position before the report.    Still, even at the closing price today, it's been a great runup for us since we started trading it about a week and half ago.

Other setups we like today and chased a few with include ARTC, NVT, and WBD.    There are quite few other stocks that showed good strength and are worthy of a play.   It's very much dependent on how many positions you'd be able to handle at one time.    It does take some experience to TRADE more than a dozen stocks at same time.    If you aren't there yet, just make sure you trade the ones you are most comfortable and most familiar with.

DJIM Journal

Due to us being overseas/ time zone switch ( London / Shanghai) in Sept/ October,  our nightly weekday (Mon- Thur) Journal will now be published before 8:30am EST, the next trading day. 

Choppy

...a case of a sore throat, stuffy nose and a slight temperature. In market terms, employment...housing numbers...credit stress made for fresh concerns of a spread and hurt to the real economy. Add the need for some technical consolidation off last weeks moves and you have a sell off.  We noted this weekend the potential momentum because those getting back to the markets after holidays might want to chase or cover.  That is what we got Monday and the action today was just pushed back a day in our view.  The NASD put in a inside day on the charts and sits around 50sma, we'd watch a break of yesterdays low for downside risk.  Choppy action should continue but that only provides more opportunity to recycle DJIM stock plays...so lets get to what matters  ..stocks...cuz' we have no knowledge of what CDO's CLO's, SIV's are or can we do anything about them or the credit markets...to us they sound like something you might pick yourself up at a singles bar....

EJ...who's in the DJIM house?....E-HOUSE!.  No doubt with volume doubling over previous days, a nice recovery in the afternoon off some selling and what you have is a stock in play. Slowly this has been getting discovered and is getting the feel some want or think it can be the next WX.  We were adding late again.

WX, honestly..didn't we have enough fun with it the past few weeks to chance holding what is really an unknown stock into earnings?.  Number one rule around here has always been not playing the risk involved with holding mico/small cap into earnings. We play off the earnings for those visiting DJIM.  If you want to hold a volatile, Chinese IPO into earnings such as WX, you might as well enroll in their pre-clinical (pre-earnings) drug safety evaluation centre first.  Lowered guidance is nothing we are looking to trade the next day. Maybe the 9ema comes into play one way or another (meaning bounce or further downside), but we've been moving into a new house..E- House before WX earnings.

DRYS/ EXM/ TBSI, this group seemed to have little consideration to what was going on around it.  DRYS made a nice comeback from 69ish to finish near highs.  You can't ignore a strong sector as a trading vehicle.

GRMN, we bought some early and it spiked 2 points soon afterward, but like most stocks it gave it back in the afternoon.  Going with the DJIM way of buying strong stocks at new highs, we can't ignore it.  NVT is the other name of interest here in this space.

WBD, traded in a thin range, consolidating action we hope after the earnings spike.  A stock over 100 buckaroos trading in a 2 pt range has attractive qualities if it breaks the top range. Looking for a potential chance of an upgrade in the near term as well. This usually moves the stock in a nice way. The trading action in the short term will show if there is that possibility.

CUB,  another NCH...lets go back in time to first alert off earnings back on May 3rd and fill a DRYS-TBSI vessesl with shares!..lol.. This baby is basically a double from those days.  As steady as they come its been as we've followed and traded it along the way.  Sometimes a fault is that your number one objective is to play the fast ones as we usually do and go for the fast, easy money...but as we've always said,  if you have a book of size capable of holding crawlers as well ...these plays can be just as profitable without the need to drink or do anti nausea drugs when playing some of our more volatile stocks;)

..wild swings or..

was it just our book of stocks?lol...you can't really tell if you look at the tight 20pt range the NASD put in, but the wild and choppy action was prevalent in DJIM stocks from the open.  You could have sold out your book of DJIM holdings in the first 10 minutes of trading and called it a great day, instead you might have ended up watching your gains quickly evaporate before recovering very nicely as the day progressed.  Unfortunately, unless you had pre set sell orders the chances are slim you could have sold a good portion at the higher prices.  Since , most are not in a position to trade by the minute, you just have to deal with the choppiness.    As we just said in yesterday's journal, this choppy action is a very good environment for trading, recycling the stocks listed here....

WBD, you're not going to find many more so thin and volatile to trade then WBD.   Already having a nice move since the premkt alert Wednesday when it was trading $102-03, it acted quickly to our strategy here,.."traded in a thin range, consolidating action we hope after the earnings spike.  A stock over $100 .....trading in a 2 pt range has attractive qualities if it breaks the top range".  Nothing like a gap to break that range and get enthusiasm started for a stock looking at weekly highs on the charts.   Momentum quickly grew and you still had plenty of time to catch our alert $112 level to catch a ride to $118+ high if you were not in already.   We will like this very much again if it breaks the 116-118 levels and holds, but at these prices we have stepped out as the possibility of hitting some psychological resistance was there if you look at the daily chart.  This is the same prospect we noted on GLDN after it hit the recent double tops after another nice run.  We want confirmation on the close for these plays to hold a NCH (new closing high), preferably with volume before we look to play the potential nice leg up that exists for both.

VMW,  it's good to see it's back to it's old self and trading with the momo that made it stand out here recently.  If you look at the daily chart, you will see it had support and usually bounced off the $66.50ish. As the days dragged on it found itself at that price with the 9ema caught up to it. You can almost call it a trap of sorts as Tuesday's morning tone made it gap down to $64's. Well...that pretty well cleaned out the weak hands. Once the stock recovered to above the 66.50ish, it was clear sailing.  You could see that by around 11:30, the volume move from that level to $68.    It continued on scored a nice close.    Again, we look for momentum here and start thinking of recent highs as a possibility soon.   We like this stock a lot as said before and not only for the trading possibilities it gives, so be patient and if it doesn't participate in rallys recently..remember this from a recent Journal  on Aug 29th. instead of asking us what's wrong with the stock..."WX, continued its bounce of 9ema area early on, but the move never materialized further when the market kicked in.  One other disappointment was the action in VMW considering the technology sec was grooving and it opened $72's..  Sometimes the popular kids just don't go to these lame summer parties.  We think these got their own game going and today they just let others play after partying for days!".   You only have to look at the flight of WX since that day and we hope yesterdays action in VMW is the beginning of a new trend up as well.  

A damper to this VMV move early on today might be MSFT product launch into the 'virtualization' space announced after close, but the piece of software is many months away and with MSFT's delays who knows when that might be.   Life goes on for VMW in the meantime with everybody wanting to do business with them.

WX...it held up reasonably well premkt off earnings, even trading at the previous days close before the report.  At the open it was a different story as it sank to high 25's. Yesterday, we said look for 9ema to possibly come into play and wow it did ever as the stock spiked back over 30. Hope some of you were watching and flipped 3-4 points quickly.  Action like that gets our attention and so we will keep it at the top of our trading list.

EJ,   it looked positive premarket and at the open but never recovered as most of the other plays after the initial sell off that occurred just after the open.  E-House won't be long in the DJIM house if it gets hosed down like that again....Ironically, it is chasing the easy money and not buying the CUB's that eventually calls for days like that as journaled yesterday.  So suck it up and have your anti- nausea medication next to your trading platform if you want to play these volatile sorts.  Sometimes we feel we waste our time on this Journal as seemingly some just speed read through it and then ask us what we are doing with EJ as it was coming off day's high.  These questions are always from someone who buys at the top of a day like yesterday, but on the other hand some on our forum do make notes in their trading notes and recalled EJ as a play mid 19's ....."EJ, this is a new play we added to our watchlist today.   Although we don't think it's nearly as sexy as WX, but being one of the recent Chinese IPO and the way many Chinese ADRs have been behaving lately, we think it has a chance to runup some.   The technical looks good and there's a test coming up to see if it can break out of $19.50, which is around the closing price on its IPO day."  Monday, Aug 27th.     

Anyways,  we'll see what today brings to it. We've already seen it bounce nicely off a smaller sell off Wednesday and we're basically back to where we started with EJ on DJIM.   This has similar characteristics to WX and others we have played here, so if WX recent run and its pop off the early selling yesterday is any indication then BJ is hardly going to become a dead play in one day.   Especially, if you consider its business and that the Shanghai composite closed at twice the level at which it started the year at.

GRMN, gapped but never saw that price again.   As long as it stays steady and tech performs well, we will stick to it.

DRYS/EXM/TBSI...we'll just repeat yesterdays and 2 weeks worth of blab on them..."you can't ignore a strong sector"

MR LWAY CUB JASO ISRG -CRDC round out the top of the trading list going into the trading day.

LDK coming off highs is paying 1bln to FLR. This might take a positive spin today as a confirmation of those 500mln deals going through.

DJIM #37 2007

History says that if implemented, US monetary easing is most likely to go with rising equity prices for the next 12 months...woo hoo, how's that for a cherry on top of all the turmoil in the markets this summer and now spread to the real the economy after the employment figs!.  Great, except we're not into putting anything in pen right now, everything we do is in pencil right now...we're not even looking 12hrs down the road.  The day of reckoning might have come for the Fed, the markets but when it's given with a stunner punch to the belly, it don't feel too good.  They might as well  have used a Taser for same effect.   So, the outlook is cloudy and the only thing that matters to us is to look through the clouds and look for trading opportunities.   Nothing has changed for us, we're here to trade.   Methodology here does not change, everything remains the same as to how we've approached every trading day this summer and now will in September.  There's no enlightenment here at this time, without being repetitive.   Best thing to do is go back and spent 10 minutes reading the Journals of the past month or so that relate to trading this market.  Nothing will change.  In all honesty, despite the stress of it all...the choppiness, volatility has been excellent for trading DJIM stocks and our books.  Only thing now and it could be only momentarily is to sharpen those pencils.   A swing trade, might only be a daytrade.  Our time horizon is even shorter for a trade now.  This a headline driven market and it's not of the daily newspaper variety.   These headlines change like the weather here in London...almost hourly.   So, if you aren't at your trading platform throughout the day, you'd better have researched your stock(s) hold and know its habits if keeping it close to your heart, your portfolio. 

We've outlined the DJIM plays in detail over the past week and it's probably worth a read back, our impressions of the shippers, solars, Chinese stocks have not changed or the potential next buy points for recent plays (on NCH's ).  Only thing that might not surprise us this week, is seeing new highs for VMW after its strength on Friday.