Roller coaster...

...this is no walk in the park!..lol...once you're on a ride, it's not a 2 minute ride...this was a 6.5 hr marathon ride on Monday that vibrates and leaves you numb at times for an explanation as to what the hell is going on!.  This market has such a case of anxiety it's quite humurous at times. How else can you explain these intraday bounces of down 180DJIA /40 NASD and then bouncing off lows and then retrace back just when you think we'd finish a nice shade of green?.  Almost and incredibly seemingly off radar to the market was INTC guidance up.  Since when does a tech power house's news of this sort peeter out so fast.  Maybe this market needs a night to think this over and come back and do it right.  Simply, what we mean is this shouldn't be overlooked and forgotten.  Okay..back to the rides....

VMW, this was one ride that was straight up!.  Hopefully, we have overplayed this on the Journal so that that the majority of you were entertained.  We've definitely said enough of the prospects short and long term for this puppy to have it as a primary trading opportunity in this market.  Basically, it didn't go to those lame summer parties that dressed up like rallies and waited till September to kick it in by itself as we proposed.  Now, if we can get the tech sector to build off INTC news, we might just finally get it participating with the group.  At end of day, the daily chart looks like one of those explosive micro cap EPS stocks that we would be all over if it was in the $7's or 17's.  This would definitely get big attention heading into Tuesdays trading if it was a cheapie, unfortunately its in the $70's with a much bigger float.  Still, this chart that was painted might get VMW some new money coming in to play.

LDK, this one has definitely taken over leadership from FSLR as far as we've been concerned.  The deals have added up and the dressing was a deal to pay FLR 1bln to make those deals come to fruition.  We said Friday before the open this might turn into a positive spin and it definitely has as its gone from 52 to a touch of 59's in a couple trading days.  Receiving contracts is great for a potential stock move, we tried to point out it is also very good when you dish out the cash to someone else.  This is overlooked many times and every circumstance is different, but in this sector it gives these up and coming Solars credibility and therefore should be spun into a positive.  This stock seems to roll out some of the best looking set ups week after and after yesterdays NCH it looks to have again.  NCH.

WX,  this one has quieted down since the earnings up and downs and might have another storm up in the very near future, so we are watching closely for an opportunity to re-enter in a sizeable way. 

EJ,  hard one to figure out, it might be just a few sellers that are making it such.   So, when they disappear this might be a smoother one to ride. At this time it clings around its late August break out levels and 9ema that seems to giving it support. Once the trend changes it could be a pretty quick ride up, stay tuned in.

JASO ARTC TBSI  ...fill out the top of the trading list into Tues.

..Imbalances...

While they were talking up Global Imbalances in Berlin,  we were talking down on the imbalances we were seeing and not liking between DJIM closely watched stocks and the indices action all day.    We've seen days where DJIM stocks don't groove to the beat of the market, only to get it going big time the next day.  This felt different.  Our small cap plays don't always beat to the same drummer as we've experienced time over time, but yesterday was one for the memory books and it is hard to make out.    Maybe, it is because the low volume move in the indices was led by what is the majority of what makes the S&P...energy, financial, tech and there is just not too much of these in our play lists.   That's fine,  cause as a group we've cornered the fun stuff over the past while trading the lights out on Shippers, Solars, Chinese, IPO's and we could use a break...right?.. ..Yeah right, as if!...  We simply did not like how a lot of these recent plays we've traded performed, even though most held up and closed green with the market.    We trade on our gut to go with our heads and so we've got a pair of 'em here.  When both of us get that queasy feeling at the same time, we usually act upon on it and yesterday it involved reducing dollars invested overnight.  The same works with stock selection, it's quite easy to get a majority vote as its seldom we don't like the same stock at the same time.    Fortunately, reducing exposure was easy yesterday as it turned out because the majority was done before or around 10am thanks to the biggest holds gapping in the morning.   We always stress our buying and selling methodology, a big part of it is adding to positions we are playing late in the day and potentially selling them into good early action the next day.  This is taketh what they giveth and that is book your profits when they come in the form of a juicy gapper, especially in this volatile market that can evaporate your gains quickly.   We've said that enough here lately.  Our gig is to lead you to the stocks we trade, it is not to tell you how much is too much.  We can't measure ones greed.  Every individual's goal..needs are different and so selling is left to each individual.   Following our strategy, sell early is what we did with VMW and LDK after days of following them closely here and watching them balloon, even LDK since Fridays morning journal and its $52 open.  There was plenty to take off the table in points, especially in VMW after the last 3 days and if you didn't..you should rethink your strategy if you let these go down on you.   These two now go back on a wait and see for next entry.  Unfortunately they join many recent plays in such state.   The dwindling promise of the group of stocks they join making new set ups and therefore potential new highs makes looking for re-entry into these stocks shortly..unlikely.

So..our queasy feeling yesterday is not one of we are going to implode, but one of caution.   Simply, we saw nothing resembling a good set up for more action to the upside in most of the individual issues.  If you can't make money, what's the point!.  When this is hard fact, we sit back and wait.  This might be only consolidation on their part, but.... if another negative headline hits shortly, we fear these recent plays will need a hard hat because of what they showed us the past few days, especially yesterday.

The beauty of the market is this sentiment on our part can change so quickly, we will not even have time to lace up our runners full of cash to chase....

..Subdued

...if you ask us,  it is a little to early for the market to become subdued and not take positions before Sept 18 and Fed reserve day.   But, subdued is what we had yesterday, Sept 12th, as no one wants to show their hand..long or short.    For us traders, 4-5 days of this would be a lifetime if this continues into next weeks meeting. lol.    Now the Fed officials become mum as is customary for a week before the committee meeting, so don't expect any clues coming the markets way from that direction.  So, let the talking heads games oficially begin!.  A lack of direction for stocks till the FOMC might be just what we have to live with...oh well...  So, what we have is the probable we touched on yesterday...the dwindling promise of any good set ups possibly leading to new highs in the short term..    Yesterday, we had some early gains in our closely followed and a few stocks looked as if they might be setting up for breakouts.   Unfortunately, there is not a line up at the gas pumps and many a potential play begin to fizzle out.  The potential for false breakouts is magnified now and unless you see a flurry of buying on nice volume intraday, it is best to maybe hold off on the chase unless you want to scalp.  This type of activity is also why we prefer to do our buying late in the session as we see if the stock in question will at least hold the break and finish at or near highs of day.    This is no confirmation for follow through if volume was not there, but at least it puts the stock on radar for those perusing the new 52 week high lists when they sit with their drink(s) in the evening.

Some stocks that looked promising intraday and fell into that category were MR, GLDN, to a lesser extent EJ, GRMN. 

A possible theme emerging in our bored minds, even if it this play really never left  is the potential for DJIM foreign stocks.   Primarily, the Chinese and Russian telcos because some might be seeing the US' slowing economy and a faster global economy as a reason to get into foreign stocks.  This fact is just clearer now after Fridays employment figs and some might see it as a way out.   Of course , it is not that easy, the large caps  have more business outside of the U.S ... small caps sales is usually 1/2 that of what it is to the large caps.  So, if we do start see this trend emerge further, you'd better get the pie chart out to see where and how much business it does globally. 

MR, looking the best of the lot gave it a good shot before faltering after 2pm.  The volume was constant throughout the day and finished with a nice 1mln day. Still..it showed it wants to move to higher and if the market ducks line up better, we should see higher days ahead. The close might have been just an opportunity to add, especially if we get a good indication from the Asian mkts before the open.

ROS, for those with us since the beginning remember this one we grouped with the GLDN, VIP plays that were emerging back then.  This one enjoyed as much success since and recently picked some stake in GLDN.  This is one stock that held on late and finished with a NCH.  Couldn't ignore a position late in the chart and foreign angle.

EJ, definitely not for the faint at heart at this point.   It continues to move off the 9ema and yesterday looked as if it had the potential to move like it did in early September from 19.50-70ish level break we had looked for.  Because it is at this level again, it becomes interesting as a repeat play.  Volume will dictate this ones short term potential.

..Blue chips not small chips....

Thursday's action just added to the imbalances, subdued action we've been complaining about since Tuesday.  Adding to this boring action was a spark to the multinationals....blue chips..  Sorry, but a Big Mac in a GM is not our game, so we are left watching this grinding action amongst the small caps we've traded so often.   We've basically packed it in ahead of the weekend, maybe the Fed meeting.   The only thing we are doing is being patient and not trading for the sake of trading.  The time will come soon enough that plays, set ups,  emerge and you'll be happy you did not enter or chase this week.   As we discussed yesterday, we are not going after what looks like a break intraday.  Instead, we are waiting to the last half hour to see if what had potential midday has it at the close.  Time after time, what you might have thought was a possible good idea intraday turns out to be a stinker at the close.  Just too many head fakes, false breakouts out there and more than a few of them are listed on the forum. 

Our queasy feeling from Tuesday's action was nothing more than caution and it has saved us a few dollars in the past few days and still might more.  The shippers...DRYS, TBSI have dry docked...the solars are not so bright...LDK, FSLR giving up 7-8 pts in one day off an upgrade....and the Chinese stocks are not living up to the Shang.......VMW has never seen the heights reached since the first hour back on Tuesday.....Preserving the cash is just as important as ringing the register...you can't ring it later if you're not preserving it at one time or another during the trading year.   This is one week it's been called for.....live with it as we are...Don't stretch a play in your mind into something it is not capable of being this week!

L' Shana Tova!

DJIM #38 2007

The past week started with some promising setups and ended with some lackluster action.   Perhaps, many participants are looking forward to next week as the tone will be definitely set by the end of next week.   As the credit crunch crisis is winding down, many of us are going to be looking at the economic side of things to wage big bets.     There's still over three months left in the year and to many, this is the make it or break it kind of period.     Everyone fared the summer trading a little different, some did ok and some didn't do so well.   Well, all eyes and mindset are focused on the next three months.   Historically, last three months of the year produced good results for us, going back as far as we can remember.  This isn't just a coincidence since same could be said for most market participants.    Companies tend to forecast rosy growth number and institutions tend to mark up their favourite stocks to boost their overall performance in the winter.   That is a powerful combination that can benefit the retail traders immensely.     This is an overall picture that we have to keep in mind.

When you get down to the actual business of picking individual stocks and trade, you still have to stick to the strategy you've seen the most success with.    For us, the same strategy we've been using along with the appropriate level of caution we've been implementing have gotten us through a pretty good year, so far.   Here's a few pointers we like to share with everyone.

1. Stick with winners!  The ones with strong breakout that are hitting 52 week high should be the first ones on our trading list.

2. Trade with volume, the ones that breakout with above average volume are the easier ones to trade and have a better probability of follow through.   We have seen many failed breakouts that looked like results of well orchestrated trap by hedge funds.

3. Cut down on unnecessary speculations, if you aren't sure with the setups or not familiar with the setups, there's no need to play if aren't confident to handle it decisively.

4. No need to speculate on earnings, and unless you are trading on insider info, you just don't have the edge.

5. Cut the loss quickly, as a professional trader, we not only take losses frequently but we also accept it as a fact of trader's life.   

6. Go for the most obvious setups, the most probable setups, that's how you grind through a tough market.  Use the charts of our most recent plays provided to possibly guide you,  read the intro in the section.  This weekend edition provided by Blacktruck consists of BCSI CROX CUB DRYS EJ EXM GLDN GRMN ISRG JASO LDK MR ROS VMW WX

7. Get to know DJIM traders' trading style.    The better you know how we think and how we operate, the better you understand how other professional traders handle a particular situation.    Believe it or not, we know many of our members' trading style really well just by reading their posts from time to time.    Bottom line, trading is much like a sport where you got to know your competitors well, and use it to your advantage.

We've written many journals up until now and pretty much all of the points above were covered in one form or another in our past journals.   It's definitely a good idea to review some topics we've covered in the past to improve your own game.    We can't continuosly update our trading methodology as we attract new members, some research on your part of past journals would greatly help your understanding of what goes on at DJIM.  A search feature is available to get you started.

..Too close to call..

..25bps or 50bps?...How cares now..!.  Let's just get this over with and move on!.    Last Tuesday, we put a cautionary spin on the DJIM players and therefore the market.  This has turned completely into a lack of set ups and muted action in those players.  Just look at the Russell 2000. Last Tuesday's close was 782, yesterday 775 and nothing more than a 15pts range within this time frame to trade.   You can't do much with that as far as trading opportunities go.   We'd rather have the credit crunch back in the news and trade those small banks on the LSE the past few days than sit through more of this grinding action.    So, that's why we say, let's just get this FOMC over and take it from there.....it might be a case of double or nothing, or doubling up or not  on the bps cut and 50% of the experts who have put money to work..on the line are not going to be happy.   This decision is far reaching as its going to make a significant difference to all the markets from equity to currency.    We've taken a different approach and that is not bet on either and be positioned very thinly as far as dollars invested heading into the afternoon.    Just don't do 25bps today and say ..th-th-th-th- that's all, folks!.    This looney tune from the Fed would send the market tumbling.    It's the accompanying statement that will play a the vital role as we want to hear they will be ready to do more.   So, that is the afternoon, but let's not forget the very crucial morning as the report from LEH kicks off the big banks reporting season.   This might leave this market stained for the FOMC decision if they didn't find a way to fudge the book with BS MS GS that follow this week.  Traders / investors will scrutinise these results from head to toe.  

..as far as individual plays yesterday of interest....

BIDU was definitely the one and really only that was of interest yesterday for us and traders in the momentum space.  Unfortunately, as always BIDU to us is a day trading stock and really not fitting to most of our subscriber base. The price also dictates that many are not going to dish out the bucks to make this a worthwhile trade on most days, so we tend to leave it off the board here.

EJ, last week we said 'volume' will dictate if its worth a further trade.   Yesterday, the initiations started for this recent Chinese real estate IPO and it got the volume going.  CIBC with a $25 and Lazard with a $23.  There were also some huge trades in this at 20 even, so there might be some protection from the usual volatility, especially to the downside.   A possible spin that we are trading now is that the lead book runners of the IPO will initiate in the next couple days, maybe Tuesday...Merrill Lynch, a tier 1 being one of them.

ROS,  last week we alerted this Russian telco again.   It's slow, which might be the best medicine the past week. Yesterday in the afternoon it got highlighted by Briefingcom....New High Profiles: OAO Rostelecom(ROS) .....is sitting just below its all-time high of 61.55 set last Thursday after edging above the top of its Jul-Sep range.........it is difficult to pinpoint a single event that has acted as the catalyst for the shares. However, we note ....recently reported impressive financial results,  FY06 results on 7/19 in which the co posted a 49% YoY increase in net profit and a 50% increase in revs....Deutsche Bank recently commented (8/30) that Russian operators are continuing to benefit from growing usage and a benign pricing environment, after VIP reported strong Q2 results on 8/30...

CMED, SIMC  are a few names played here before making new highs intraday without faltering by close.

..what a helicopter drop!

What can you say?....A Helicopter Ben surprise with an aggressive helicopter drop down every chimney!.   Yes...kids there will be a Christmas this year, thanks to Santa Ben.   We can also get a bigger tree on credit!.    Most importantly..your parents will have something to trade into what is the usually the best trading season and so you might get presents under the tree as well!...   To us this is what mattered most, the ability to have a tradable winter!.   It is almost irrelevant if you missed one of the biggest Wall street day's in years.   You only need to look forward and the opportunities this will most likely give all of us.   This was so well orchestrated, the PPI #'s in the morning, the LEH report and then what they are calling now the 'shock and awe'.  But, was it really if you look at all the pieces and how they were lining up during the day.    Well, at least that's the way we were thinking as the day progressed.   Considering our stance heading into this was one of being thinly positioned, mostly because we'd seen nothing worthwhile to trade off the past 5 trading,  it might have come as a surprise why we alerting a buy into GS in the morning.  Not only is it a large cap, but it is a bank(s) that never floats DJIM's boat.   As we say often here, we trade with our heads, but the gut plays a role with the head making the last decision.  Guess we went out on the limb with GS, who we saw as potentially the biggest beneficiary of what we got. Also knowing the incredible up and down volatility that always immediately follows the FOMC minutes, we still alerted an invitation to an upcoming party for the market in whole. We never got the volatility, it was straight up to close at highs of day.  We had the inkling of one coming as the day wore on and us soon as we saw a 50bps -50 discount and a do as 'needed' statement, there was nothing left to do but press the send button at 2:15.   Still...like we said,  it's irrelevant if you missed the whole day or our party invitation.   It is the rosy forward trading picture that matters.   Still, we all knew this was shaping up as a historic day for weeks and it should have had you at the trading platform to be actionable just in case.    So, if 50% were correct on the 50bps, a much lesser % of the .50bps camp dreamed of the other .50 and accompanying statement and so what you got was all camps chasing, covering.....making a record day.   The biggest winners of course were the ones heavily positioned.   That's great, but to us the risk was not worth heading into Tuesday.. Instead, we simply reacted to the days flow and still had a nice day.  Reason being if you are mostly in cash heading into this surprise, you can allot the cash to the right sector, the right plays when given the green light.   You have money to burn!.     If you were invested too much, especially in sectors not benefiting, you might have been stuck in plays lagging with no extra cash to benefit.    Human nature is to wait and not believe your stock is not participating.   Remember, not all get invited to the party, we've been through this before recently with VMW,WX not playing along on nice days.   Today, we if get a nice follow through early...we will be selling lots and lots of yesterdays buys before catching our breath and possibly repositioning.    We've talked about this methodology here many times before and most recently put it to work last Tuesday morning to cash in.

GS, of course you could have played anything after the cut in this sector, but as far as we are concerned it was best to keep adding to the morning buys as GS is best of breed to us.  LEH did a lot to make you want to hold GS into earnings, we will be hard pressed not to hold some even if it goes against our DJIM methodology of not holding into earnings.  This is different considering the turn of events, including the LEH report. We still will take a handsome portion of the profits off and keep some into the report on Thursday.  This surely will present some quick in and out opportunities into the close today as speculating will come in.

EXM, DRYS, FREE when a sector shows strength before a FOMC even if it falters just before, it still should be on your radar as the first possibility to trade into following what was a surprise.    If it tries once, it should try again if the news is good.  As far as FREE is concerned, the market participants just haven't had reason to get on the small float, EPS bandwagon this Q.   It's as if the herd has left the building.  We saw that apprehension early in this stock, you can't really blame the herd as it was on the day of the FOMC.   Maybe, the mentality will change and the herd will remember the possibilities in these types of stock we all enjoy here when it's been fashionable.  There is also a seller that was creating a wall, if you have level 2 you will see him as ARCA and they are not showing how much they have.    Once this is/if removed this might move.  Of course, the sector motion will play a role here.  Many stocks take time to be discovered, especially if the time is not one where traders are scrambling to trade as we've seen lately.    We hope this action yesterday by the FED changes that for the sake of small float, EPS stocks as we head into earnings season, our bread and butter.

BIDU, EJ, ROS these stocks highlighted in previous days Journal all performed well leading into the afternoon. You don't need to chase stocks off alerts here, you have plenty of opportunities to get in stocks after the morning Journals and profit.  Every stock is different, some need to be chased, most don't.    There is something for every type of trader, investor here.   Each one of these stocks is different in its volatility and therefore suitability.    We just happen to like to trade all the colors.  EJ, had a tight .15 cent range, which might signal more accumulation after the heavy activity at $20.00 the day before. Where is Merril with a initiation?. This action we've seen the last 2 days might be the forward to it. ROS, russian telcos keep on acting well, even before the FED note.  BIDU, you probably have taken most off the table. It would be the smart thing to do after the last 2 days.

Best to look over the charts printed here for possibilities this morning.  Be careful and don't be trying to play catch up this morning if you missed some entries late yesterday.  We'd hate to be selling some of them to you.  Santa Ben has given us more time than we could have envisioned to make $....you won't be left behind.

.6 .6 .6%

Guess we should take those % gains from the DJIA/SPX/NASD yesterday as a sign from the devil that we are going to have a down day to follow.  It wouldn't be a surprise, but on the other hand that is what most expected yesterday and we just didn't get it.   The herd was playing catch up and the profit taking didn't hit till quite late in the day.  By this time, we were sitting pretty as we had done as promised before the open and that is, " we will be selling lots and lots of yesterdays buys before catching our breath and possibly repositioning".   The good thing about yesterday is the morning catch up lasted longer than anticipated and it gave ample time to sell and get a price.  The repositioning of the sells really didn't happen as the market slid too late in the day giving the impression a little more selling might continue into today.   So why reload at that stage, is our thinking.  Still, there were some stocks worthy of intraday plays and others worth holding to see what's further up possibly.  Also, instead of adding to stocks recently talked or alerted to the day before like the GS that went to a morning high of $207, EXM mid 48's, DRYS almost 76, BIDU almost 285, TNH to 123 which we sold in the morning...we went went after a MR late in the game because it was making another new charge to highs and because the Chinese stocks is one area that held up the best during the day.....

EJ, is one we keep on holding. Yesterday, we noted possible accumulation. This was even more evident as this one churned and rolled all day in even another tight range.  Either this a forward to ML's initiation or something else, or its just a fine piece of China making a dandy cup and handle.  This is not trading as before when volatility was huge, don't ever forget those days. A shakedown is always possible and don't all get shaky knees if it comes.   We've had a nice week and considering Chinese stocks are holding their own, like JRJC, MR its worth some more time.  As said before, we added back MR and as far as JRJC, we are only flipping it here and there.

LULU, MELI, and even WX, interestingly the recent IPO's had very nice days, actually some of the best out there and we have put these on our potential trading list.  MELI, is a new name here.  It got initiated yesterday and is of the foreign AMZN, EBAY biz nature.

GS, as a follow up to possibly hold a portion into earnings. We got a very nice price/ gain and after MS's report, we'd prefer to stay out and play it in the morning if they announce nicely.  For markets sake , we hope its great and so we can live with any points we might miss.

ICOC,  we'd just like to point out the concept here has always been playing the possibility of "IBD100 inclusion".  The main idea is finding and getting to them early and going big early into the $15 level late in the week.  Remember NGA, GTI, IDSA even SYX???.  If not go back to April, use search and see the prices we started and read up on the strategy.    So, if a stock is already at $15+ on a Wednesday, it really offers us little incentive at that price.   Also, do consider that a $15 stock with a beautiful run has been drummed around and pushed by either other stock forums, hedgies...or whatever and if they use the strategy as us in the NGA, GTI plays, guess what they might be doing here?.  Well, at least we would be dumping to newbies after getting 1-2-3-4-5 pts. We'll watch for now and if we get a nice dip we might add ..anyways, we'll see how it trades these last 2 days and deal with it hour by hour.

At this point, even if we didn't reload our sells late in the day, we'd look back to these names as soon as we see the buying of pullbacks starts in the market.  And it will as any dump will be seen as a buying opportunity for those who missed this move and think this market will be going higher in the days, weeks and months ahead.  Buying the dips in this market will again occur.

Petro-Currency

Growing up and then trading from Canada,  we'd never think we'd see the day the CDN$ reaching parity with US$....guess, they waited for us to be nice and far away for the historic day!..lol...OK...now back to the US markets we trade, a market we've had to greatly outpace just to deal with the greatly appreciating CDN$ over the last 6-12 mths.   Luckily our goal at DJIM is not to produce paltry returns in the single digits or the teens'. Anyway back to the pitch as the futball fans know it as ......living 3 minutes away from the Chelsea pitch on afternoon game day is quite the experience for any sports nut...or drinker!!

So...yesterday was hardly unexpected after the sprint we've had this week, the valiant effort of many to keep it where it was most of day was good to see.   Somewhat surprising was to see dip buying come in so early at times.    It would be a victory of sorts if we could end week basically unscathed without a serious short correction with the loss of momentum.   Despite the small caps, mid caps indices leading the way down in the afternoon, we were pretty well and running from the morning with our niche of players we had you following and hopefully trading.

MELI, LULU, WX, the trio we gave before the open outperformed anything and everything off the bat.   MELI steamed from the 33's to 38 and considering the force of the move maintained its lofty intraday perch and closed at 37 and change.  After 2 days of action, we know this is on radar now for those into a little action.    LULU and WX sprinted to new highs as well from the open.   If some of you want to trade broken down stocks and patiently wait and wait for the all mighty bounce....the best to you, but as part of the DJIM methodology says... look for the strong,52 week highs, which at more times than not is the easy play!.    These 3 had all these colors after their strong showing we pointed out in a market that was treading water the day before.  Wondering if Cramer put on some Yoga gear to demonstrate his bull-ishness on LULU last night..maybe a LULU thong or the LULU Hot shorts!.   Sorry to make you sick in the morning...

EJ,  we think we have walked you through this trade in the past week or so.   As we've been saying the accumulation is most likely a forward to Merrill Lynch's initiation of the stock.    In many a traders eye, the play could be over in terms of they got what they wanted this week and moved on.    The 22 level was a no a technical no brainer and was an exit door for some.   This is the one reason one should use charts, to use them as a guide to where you might find resistance or support for your stock.    The Merrill Lynch initiation will come today, we hope its enough to fuel this some more and at least get it on radar of more money.     Don't expect anything to send this to the moon though.   Just like pre-earnings runs, this might have been a pre-coverage run led by those in the know...we'll see shortly depending on the $ tgt ...if they give one.

APOG,   this one we bought into and as usual with it maybe a little early at 26, as it did its traditional yo-yo action on day of a good report. Every Q this one seems to beat and we were waiting for the exact action we saw later as this moved from 25' to high 27's intraday and finished strong.  The potential in this stock short term is in the charts. You can easily see the last two reports on gaps and then the follow through to higher ground.    Not sure why this got so beat up during the summer and frankly don't care after these earnings.    ----------------                Reports Q2 (Aug) earnings of $0.40 per share, $0.04 better than the Reuters Estimates consensus of $0.36; revenues rose 19.7% year/year to $217.7 mln vs the $209.1 mln consensus. Co raises EPS guidance for FY08, sees EPS of $1.43-1.53 vs. $1.50 consensus, up from $1.37-1.47; raises FY08 revs guidance; co sees revs growth of 11-13%, which equates to ~$887.1-903.8 mln vs. $877.17 mln consensus, up from revs growth of 10-13%, which equates to $879.1-903.1 mln. Co says, "We remain optimistic about our businesses and markets served, and are positioned to meet our longer-term objectives of 8% annual revenue growth and 20% average earnings growth through FY10. Our solid year-to-date earnings along with our strong backlog, commitments and bidding activity give us confidence in our ability to grow revenues and earnings through FY10.

LWAY, the chart was getting our attention the day before and the open, even on light volume showed us some potential....simple as that.  A nice move ensued and volume was pretty good on the day.   Hopefully, the chart came to a few more overnight and we will have some follow through action today.

LDK JASO MR ANIK ICOC GS ,   top out our trading list for Friday.

DJIM #39 2007

Last week was payday(s),  sitting on quite a bit of cash into Tuesday's helicopter drop was painstaking but very fruitful as it turned out..."only thing we are doing is being patient and not trading for the sake of trading".    This was the mentality for the prior 5-6 trading days heading into the FOMC due to what we saw as a lack of any meaningful set ups.   The FOMC provided a black hole for all of us to be sucked in and put that sidelined money to work!!.     Simply, the subdued action heading into the meeting turned into a wild and crazy trading week.. Even though the market pretty well consolidated for the next few days after the record day...,eg.. the Friday open gap led to the Nasdaq trading within a 10pt range, this did not stop the DJIM stock universe from having a great day on Friday.   Our DJIM index, if we may call it that of our closely followed/traded stocks outperformed everything in sight on Friday.  Take the stocks from the previous weekends chart section that we have you following and add a MELI or two late in the week and you can see the results if you stick to trading our book of stocks.  The 1 day returns are only surpassed by the 1 week return on this group of stocks.

The strategy continues...stick with winners and ones making strong breakouts and hitting new 52 week highs/new closing highs.  We won't be listing them, you know them, it is visible by a look of the charts up this weekend.   The Shippers, the Solars.. these two sec's are leading the way, but let's not forget the other flavors we beat on and that is the Chinese stocks and IPO's of choice. ..As we have been saying for days and weeks, months...'you can't ignore a strong sector'.   Still....never forget to take profits home with you, you can always reload and recycle these DJIM plays.    We've been doing it for months.   EJ, as an example was a 2nd time around in a month and it played out just like we wanted with the recent action a forward to the MLynch initiation.  No matter what it does now,  Friday move to almost $23 was as good as any reason to sell.    Just like a pre-earnings run, we had a pre-coverage one that we thought was worth trying.    By Fridays close, the list of these stocks at highs grew with a few DJIM names coming back back onto our closely followed trading mix...LXU, GTLS, VMW (coverage by book runners initiated today, should be quiet volatile).  We'd also include ANW ,a Barrons note this weekend and ATHN an IPO, on your potential trade list for Monday.   Btw.WBD initiation friday includes a $136 tgt. 

A seemingly perfect storm is brewing in late September and it's not a tropical one.  It is the trading vibe created, it is the end of Quarter that should bring in the buying from institutions to fudge their Q books and it is the 14000 chit chat.

..out of breath?

Early on yesterday it seemed like many DJIM plays just carried on Friday's action as if the weekend never came.  We saw action continue in the Shippers..DRYS, EXM...Solars..LDK JASO..Chinese..JRJC,BIDU stocks rolled, Russian stocks...GLDN, ROS had good days and a few like GRMN, and even CROX finally broke to the upside after a long period of consolidation.  Some lasted, some didn't and faltered as if out of breath.  Some definitely felt extended and if anything switching into names just breaking out might be a way to go now.   Basically a switch of asset classes you might say.   On Sept 13, we said a trend might emerge..."A possible theme emerging in our bored minds, even if it this play really never left  is the potential for DJIM foreign stocks.   Primarily, the Chinese and Russian telcos because some might be seeing the US' slowing economy and a faster global economy as a reason to get into foreign stocks.  This fact is just clearer now after Fridays employment figs and some might see it as a way out...".   Have you seem the dramatic recovery of the emerging markets since the low's hit on Aug 13th.  This is mostly driven by the BRIC economies..Brazil, Russia, India, China.  This BRIC index already was up 29% last friday, outperforming the emerging markets as a whole which was up just under 10%.  We definitely can't do all the letters of the BRIC, but trading the Russian and China has been a way to go.  A look at MCSI index will show this bubble like action.  This might be a bubble forming, but the underlying economic and earnings growth is there to support it for the time being and trading the China, Russian plays might be the safer bet right now than the high flying shippers, solars.......

DRYS, EXM..lets' be realistic. The last few days is money just waiting to be taken off the table. Don't forget the volatility swings both ways and when these rest..they really rest.

LDK, JASO, and the solars. We are actually surprised  by the strength exhibited by LDK early on.  Reason being a downgrade came in the morning, but it did come with some good news.  Eventually, the downgrade and the recent action took its toll and it succumbed to profit taking in a big way..as did JASO's run.   Let this action serve as a reminder of what we face trading these high flying shippers...solars.

IRBT, was a open speculative buy alert that ended on a good note. There is a possibility IRBT might be given a 2nd chance for the contract given to another company that sank this stock recently. We'll see as news is impending and that gap looks juicy on good news,  if it gets to that level starting over $19.

With the stocks talked above that show or showed signs of being extended, we'd turn to closely watch the potential in some names that came back up on radar yesterday..GRMN CROX APOG VMW  GTLS  ANW (new..but if shippers falter, this may too), for more trading possibilities in the right trading environment.

..unremarkable

but...considering the futures premarket and the somewhat grim, yet not horrible Eco #'s, the action in quite a few DJIM plays wasn't undermined. The market is finding some stability in the multi nationals and the dollars lows for technology stocks as if business will go on and prosper from the economies abroad.   This is all dandy but a lot of the action is institutions swooping up and dressing their books for Q end.   This should provide a decent vibe for the rest of the week unless some Eco' numbers come in and shock the markets.   If the energy and bank stock would participate, the majority with tech comprising the SPX and we would get a very decent up day before the Q ends.   So trading life goes on and opportunities are presenting themselves daily with the niche we cover.  Yesterday, we had good action from the usual suspects, besides the shipper and solars , a few nice breakouts continued in those that lagged or consolidated the most recently...notably GRMN (a buy $125 by DB this am) and CROX.   There is a lot of froth reminiscent of bubble and pre holiday trading running rampant in the Chinese cheap speculative stocks..sometimes this is a sign of a pin coming to burst a bubble.    A big IPO(bank) in China didn't get the usual response of a huge first day.  A modest response at best with a 30% up trading day. This might be something or its just a fact of the investors having many options to put their money at work in similiar stocks.  We'll see if this all adds up to something in the short term for the Shang or this these thoughts are a much ado about nothing.   The forum is free to use if you want to post the speculative China runners, but we won't be writing about them in the Journal as it doesn't fit into many of the subscribers wants and needs.   Most here don't have the capabilities to trade these in a timely and efficient manner in a day trading mode.

Away from the 'usual suspects' that should continue to provide trading opportunities, we will be looking at a few names early...

ICOC and LULU, we like the way these traded in the afternoon and will look at them early on to enter.

CDS,  we are fine with going with the China cheap momentum and so this issue may continue to get momo, but we do look at these plays that emerge from other groups, such as this that originated in Briefing as an opp' to flip quickly or be flipped on in the first couple of days of it being discovered and spread around.   Basically..at one point during a rise you are riding the coattails of those already loaded up and ready to dump on you in most instances as the herd comes in after getting wind of it.   It is not only the ones that first make it public in a group that load up before, it is also and may be the same loop that buys the stock ahead of the AMEX listing in this case and then breaks this stock to the public that will be the first out.  So, the mentality is 'trade it' till your blue in the face or till your pockets are full of the green stuff, but we are here to also give you a glimpse and an education of what we have experienced in the 'underground' trading world.  Just keeping those not familiar with such listings on their toes. The difference here is the thirst for these China cheapies that may carry this.  Good timing you could say.  

A while ago, we introduced FTK (Flotek industries), the morning before its listing on the AMEX at our old grounds, the stock has launched to ~$45/5X its purchase price that day..simply it was at right time at the right place with the oil sec plays in high fashion for months ahead...so this could be timed right as well.

..wavering

The action that we noted as unremarkable..out of breath?, the last 2 days showed it's colors yesterday as the high flyers of last week were wavering from the start of trading action yesterday.  As the market indices moved higher the stocks we closely follow... a few examples DRYS EXM EJ WX GRMN and a bunch of others were just boring.   Usually this is a sign for us to dwindle down our positions in our niche as many times they are a precursor to what the market may do.  The difference now is it is Q end and as we've been saying from last weekend the vibe should be good and so the chance of a decent pullback in the markets is remote the last days of the month.   Still, this lagging action in almost 2/3's of the stocks we eye closely does not look to give us an opportunity to look for further upside in many names into next week.    Right now, we'd be trading hour by hour, if some stock looks promising in the morning with volume it might be worth a buy in,  but that comes with a sell out most likely end of day.   We'd monitor yesterdays afternoon lows on the indices if it comes to that as a reason to get out.   Yesterday, we were somewhaton the ropes as we slipped to lows of day and then a timely report came out of a Buffett stake in BSC to get everyone's juices going again.  We'd be selective now in our choices, or frankly take a shot at some of these Chinese spec stocks for a whirl on a $2 dollar ticket. INTN?.  It seems fresh enough and undiscovered by the China spec herd.    Our else load up on GM or some other DJIA stock if you think you are missing something late this week. lol.  No wait, GS is plenty to get through the day if you want some big name to toss around.  JRJC is the one on the other side of the spectrum to keep trading. LDK, the primary play and the other solars still are playable. These are the same we'd concentrate on today most likey if we want to play.

We'll wait to see how the premkt and open shapes up and then decide if there is anything out there to chase.  The possibility exists that unless the indices breakout over the 14000 level in the short term, we might have some range trading and therefore a lack of potential breakout to the upside that would extend to our stocks under coverage.  Therefore, a lack of easy trades and phantom breakouts in the short term.

Reminder..

Reminder to our original members signed up for 3 month subscriptions that many subscriptions expire Sunday, September 30th.  Please check your Paypal receipts or your Paypal account, last day is before your last payment date. Last resort contact us for date.  Those that usually pay in advance, your subscription will run till end of December.

Thanks and hope to see you back for the start of earnings season...

a bunch of Yo- Yo's

Before yesterday's trading day,  we noted we'd be trading hour by hour, not a bad idea it seems as what we have is a bunch of yo-yo's day to day..hour to hour.  You almost have to make a choice of whether to hold these through the slips or just daytrade the heck out of them.  Unfortunately the 5-10% down days make it hard to hold till the next day and the daytrading mode might not be for you to capitalize when they pop in the other direction.  We've never been ones to daytrade these stocks, getting in and out of them on a daily basis was not the way we played them to these lofty perches they are sitting on.    Simply at this time, this is seemingly what you have to do with the DRYS EXM LDK GRMN FSLR JASO stocks or just hold through the volatile action and take some lumps on off days.   On any given day you are getting 5,6,7, 8 pt intraday trading range, with the close either at the low's or highs of that day in most instances.  One day they are tepid and lagging the overall mkt and/or red, the next day, they are flying.   Also, it is not so easy to say a stock making a NCH will continue on forward the next day.   Now, you simply don't know what the stocks we've covered this Q will do the next day.   There is only one way to explain the action and that is to understand it as a Q end phenomenon with a lot of hedgies flying in and out of these big winners of the past Q and creating this volatility.  Performance anxiety after a horrible July and August for too many of them.  Probably started padding the books with this China spec stuff and got the wildfire started.   We doubt the timing is a coincidence.   So...you have 3 choices really, one is take the lumps the bad days or even intraday moves can throw you...two...is buy and sell the same day ...or three...which is stay out completely to avoid the stresses of it all and await a calmer trading environment.   There is no reason to point out plays reaching NCH's Thursday,  you're most likely rolling the dice with most DJIM plays into the last trading day of the Q, even with less volatile issues like MR EJ.

Anyways..be careful today as the funky stuff will likely continue...either try get jiggy wit it on an uptrend or just stay out...

AZZ, an original DJIM play is one to possibly trade off today following earnings. $36 premkt.