DJIM #40 2007

All the fist pumping, Q end dressing by the funds managers of all sorts didn't amount too much by the end of the week on the indices. The DJIA was up just over 70 and the NASD put in a 30pt week. The markets coming up to July highs coincides with the start of another earning season. The earnings will tell the tale if we break through.  Unfortunately, last Q didn't provide many stellar plays in the EPS world, we hope this season is better as it typically is.  The Shippers, Solars, Chinese stocks we follow will certainly provide more trading opportunities, but we hope there will be some fresh EPS stocks to trade in.

AZZ, seems every Q this stock starts off earnings season with a good report. This time was no different as it reported, Q2 (Aug) earnings of $0.66 per share, $0.18 better than the Reuters Estimates consensus of $0.48; revenues rose 29.8% year/year to $81.6 mln vs the $78.5 mln consensus. Co issues upside guidance for FY08, sees EPS of $1.95-2.05 vs. $1.82 consensus; sees FY08 revs of $315-325 mln vs. $316.31 mln consensus.  This stock is based on the US economy but its presence in new markets should provide stability if things dry up here. This really doesnt matter to us as AZZ has a tendency to binge to the upside or downside as evident in the charts making it a pure trend trading stock.

FSLR, despite the daily intraday up and downs this was the best looking of the big 3 solars here (LDK, JASO) on Friday.  Volume has been quite heavy on consecutive days and it is very close to a NCH.  It seems the solars are in the news daily now with price targets, contracts and if there is anything on FSLR in the days to come this could drive through its highs nicely.  This is one solar that hasn't pull backed the last two trading days.  BofA raised EPS estimates for FSLR on Friday. Earnings are end of month.

GS, this continues to be a good trade since we picked up coverage of it in the $190's. Volume has slowed down and the daily trading range is getting thinner. With more FED interest rate talk this month a stock in this sector might not be a bad idea going forward.

ANW BIDZ CLDA, are the A B C's of what traded well on Friday.   As far as SSTR, we think more digging is needed in finding the value of this company. A listen to the CC might be in order to get a better picture, it is not as simple as the headline number might suggest. We'll watch from here to see if this does have substance. That's easier then getting all muddy calculating the private placements/Outstanding share dilution.

...Mirage

A mirage..that's all this summer subprime crisis was!. A big head head fake just for some to buy lower and then have a meteoric rise to new heights...distortion created with lots of blowing of cold and hot air!. Okay, maybe not completely true but how else do you explain this recent rebound, yesterdays possible breakout moves off what could have been perceived as bad morning news.  The subprime news, the Citigroup headlines had no impact on the markets.  When was the last time we saw this?.   We've turned on a dime with every headline from this front....but not yesterday.   This is old news simply and the market wants to get on with earnings and what is generally the best Q in the markets.   A beneficiary of this market was plain and simple to see, one niche was the DJIM covered plays that blew past the competition.  A simple point to our trading methodology is to have a sane niche of stocks to follow, not an insane number that can't be watched closely enough to recycle. This is why we have a watchlist/play list that we hope you follow.    It saves you time and money.  Yesterday was a day for our beloved..

FSLR, an alert last week to a potential breakout move this week was the solar play to be in.  The other two we closely follow, LDK got 'briefed' to death yesterday on it's equipment pushouts,  JASO did nada and is selling more of their ADR's this morning.  If you shadow our plays, you saw we were only on FSLR back at this time.

GS, noted the tight range of trading the previous two days in yesterdays Journal.  On a good market day these ranges can balloon to the upside and this is what we saw here.  We are about collecting points and not the % gain, so to us this was up to a 8pt move yesterday. With FSLR and GS there was almost 15+ pts from our final remarks on Friday and yesterdays morning Journal highlighting them.

DRYS, EXM continued forward to new highs with some IBD print on the sector and a couple of price upgrades in the morning. TBSI got back in the hunt and is close to highs.

MR, EJ, moved to new levels and JRJC proved to be a worthy trade for those familiar with it.   Now, we just ask WX to get some game and it will have our most recent China plays on even ground. Oh yeah..where was BIDU yesterday?.  Lets no forget this rocket ship when looking for a good intraday trade.

VMW, we don't cover much tech, but VMW has been the one we have traded the most.   Finally..this one is acting with the sector which is leading the recent parade and not playing on its own terms. $90+ is in reach now.

ROS, GLDN our Russian telco plays are not be forgotten as long as they cling to highs and therefore offer more upside potential in the near future.  WBD moved to 114 intraday after it was noted as a possible reversal play from 111's. This one provides some volatile thin action with some large spreads. the worst thing you can do is put in market orders in this play.

ANW, LULU cover the ipo watchlist here.

LWAY, we don't know what rumor was out there but this recent play was a hurricane yesterday. Congrats to any that have held through. Yesterday was exit day.

CSCT, the chart looks good but we have to keep mum on OTB stocks or we will have a flood of them on the forum. Sooner or later a bad one be printed on the forum and will cause a few to drown, so we try to avoid till they are listed.

As important as finding the right and easy plays, it is just as important to think out load and give our thoughts on plays like SSTR, even if you won't like it.  We're not talking about your Mama, we're talking stocks here.!    Hopefully, we saved some of you some cash yesterday.   Anything could rebound, we just have no interest at this time.  

We'd also remove GRMN off our watchlist. There are too many unknowns here now.  Last week gains look like a set up to the news yesterday. Those shorts got something to cheer about yesterday.

This probably covers 80-90% of the plays here recently,  if you don't have all day to peruse the entire stock world for plays then this list is all you need to carry you and your book.  It's not a lot of stocks.  This is just a reminder and for those that are new here.   Days like yesterday are the icing and come around quite a bit.   Just have money on hand for fresh stocks this new earnings season, as we noted in our last alert.

Bulls on 'roids and Pigs can fly..!.

Those seem to be facts now!.   This is what we saw yesterday as the Chinese bulls roared off the Asian markets, even when left at home alone with the SHANG on holiday's.    With every Bull shot there is a pig in it's footsteps.   Meaning speculation on junk ones was wild and you need to be careful at this probable late stage in the game.    Back at the ranch, the market was doing better than expected with not a lot of profit taking.   We added this footnote to a post before noon,  "Considering yesterdays action this hasn't been bad at all or meager for the small caps /RUT been green most of the day. Bunch of those sorts here having good days WX EJ BIDU JRJC LULU MELI ROS GLDN FSLR EXM TBSI..AZZ might still " .    The day turned from good to very good late in the session for these stocks and a few others like GS, VMW, CSCT.    The market continued to trade sideways and finished mixed, yet for consecutive days now, we were in the right place at the right time.     Hopefully, our morning Journal steered you back home if you've strayed!.     This was the true Bull shot of the day, the DJIM index.    There is really not much to say heading into today trading, except that hopefully we all played these shooters smart and took some off the table.    This is especially true with the gains generated by the Chinese stocks covered here.    Even the good ones will get nosebleeds.

A member noted and what is probably a good way to understand the Journal is to see it as us thinking 'out load'.  One thing is to shadow plays, another is to shadow our mindset, which is probably the better way to go.     We can't give buy/ sell advice, all we could do is show what we are buying and thinking.    Hopefully, it rubs off on you and improves your trading ways.    When we noted yesterday.."Now, we just ask WX to get some game and it will have our most recent China plays on even ground. Oh yeah..where was BIDU yesterday?.     Lets no forget this rocket ship when looking for a good intraday trade.".    You need to ask yourself why are we even mentioning these two that under performed the day before.    Simply, we are thinking ahead and with a big overnight Asian market these just might come out and play with the rest of the kids.   Trading is so much a psyche game, you need to think ahead and think what others will or might do.   Your gig is to get there in the early stage or even ahead of the herd.   We gave the below leads yesterday, clues into where we might be leaning and why.  All you needed was one or two to have an excellent day.  The language is simple and we'd all should have been prepared..

TBSI got back in the hunt and is close to highs.

VMW, we don't cover much tech, but VMW has been the one we have traded the most.   Finally..this one is acting with the sector

which is leading the recent parade and not playing on its own terms. $90+ is in reach now

ROS, GLDN our Russian telco plays are not be forgotten as long as they cling to highs and therefore offer more upside potential in the near future.

WX and BIDU( wasn't all JPM initiation), it was a matter if you build it, they will come!.   The build up was the overnight markets and these were prime candidates to play in the mud with the others.    Anyways, yesterday was a day for us to daytrade these high flying Chinese stocks and it occupied most of our day.    Now, we need to get back to basics and deal with reality and concentrate on the others like GS, FSLR, VMW, AZZ etc.  The EPS winners and ones to come and the potential set ups that we can all get in early on. 

We all need to be a realistic after two days of solid gains!

A wait and see

A wait and see atmosphere will prevail most likely till Fridays key jobs report. Yesterday the markets simply consolidated and digested the recent move upwards, including Monday's big day.  Simply, the jockeying for position started and we'll now soon if the Sept jobs report was an anomaly. We're looking for a rebound here in the report and therefore are not going out without a fight.    Basically,  we are not abandoning ship with yesterdays expected slide.   The more recent names like VMW, AZZ, FSLR, we have no problems with, yesterday is probably just a blip and we are definitely not losing sight of GS.    Many names we've covered here were due for some profit taking, we've mentioned continuously the last few days not to forget to take home some of your gains.   They were obvious.   We might get another opportunity to load and recycle these big winners very soon but at lower prices, so they can wait.

LDK, noted in Forum in AH's as an opportunity last night following news of the Financial controller who exited the company saying they don't have as many Big Mac patties in their freezers as they say they do.   We thought a firm will come out this morning and help this rebound.  One still might.  Just as good is the company coming forward this morning and taking a business like approach to get this straightened out quickly.  The stock had rebounded about 10 bucks so far from AH's low's.  It should be a volatile trade today, but in the mid 50's we've taking quite a bit off premkt and then see how it shapes up early in the trading day.  The uncertainty here over the short term will make us look at LDK as a day trading opp' until this is resolved in some manner.

Just be patient now and maybe not start positions you'll regret tomorrow if the employment numbers are not to snuff.  Not much we're aching to try out today at this point .  We all know that can change quickly in this market.   The market players want a signal from the payroll # for direction to the FED and whether it continues to ease.   In the meantime, you could just trade the China spec's that have no interest in tomorrows report...lol

..SPIN

This ain't that first Friday of every new month when your significant other might allow you to partake in a night of drinking with your mates, it is instead the Friday of the dreaded US non-farm employment report that the market is highly anticipating that might cause you to lock yourself up and drink alone tonight!.   We don't think so and most don't,  but we've seen enough surprises over time.     Let's get the numbers out and allow the spin to start. Yes, the spin on the air waves, the spin in print.    Everyone will have a say and your mind might become mush come Monday morning.  A slant will come from every direction.....good news is bad news..bad news is good....blah blah.  We are just happy the day has come and we can get on with things.  Why?  The bar has been set low for earnings season, this can create many a opportunity as pleasant surprises should arrive.   We just want to get on with this possibility and find fresh meat to trade.   The pork can fly routine won't last forever.  We're gonna have to get back to analysis of companies, charts and trading with a more sophisticated crowd then some of the crowd that is going back to their day jobs after this China circus ends. lol    The good and/or  bad of this is it creates a false impression in many eyes that they can trade,  a few too many will take their lumps at the end of this and will be calling their bosses begging for more hours or their job back.    The hedgies started this last month to pump up their losing books after the subprime debacle, unfortunately they will leave a few in misery when the pigs nosebleed falls to their lips and turns to lipstick.    A bubble of any sort leaves a few or many in the dust.   As far as yesterdays action, the wait and see atmosphere prevailed and the snooze came over the market and the indices moved marginally higher by the close.  A little better action was seen in some of the DJIM stocks, we expected Wednesday dip to temporarily, at least wear off on the VMW AZZ FSLR GS.  We were not disappointed by their action..

FSLR closed up 3% and looked strong at the close, which is always the best measuring stock.    Just as we noted last week, this one remains the only solar we'd concentrate on.    LDK/JASO below 9ema will surely drive the dip binge buying soon, but we'll remain out.   As far as LDK, we said it will be volatile and so another slide was no surprise late in the day, we're following the script yesterday on this one going forwad.  VMW, AZZ had 2% rebounds and are fine holding above 9ema.   EJ, WX had similar days on the China front.    We want to be looking at stocks that were performing the best and close to most recent highs if the market gets a good vibe today again.    RIMM can only do so much by itself.

The shippers, notably DRYS TBSI moved off 9ema yesterday. EXM should follow if this small reversal holds. 

The HANG overnight might give the China's another round today. We picked up some MHJ yesterday. This is actually an interesting EPS story. This is a holding company with some interesting prospects to grow EPS in a big way.  It's EPS ain't too shabby now and can only grow.
STV, that China IPO has priced 12mln ADS at $16.   KUN RCH GSI will continue to be played.  Briefingcom is helping along with intraday notes as we saw in GSI..lol

So if the teachers still didn't go back to work and therefore be added to this non farm payroll, this Journal and the stocks in it could be firewood very soon.

DJIM #41 2007

Last weeks key event was hardly a surprise,  yet it was a big relief and a nice day was had to close off the week.   What we like most and what played perfectly into the hands of our niche was the strong day(s) put in by the Russell 2000.   We can't complain about a 5% move as our niche has a lot riding on it's performance.    The pressure is now off the FED to cut rates and the talk will turn to earning reports.    If everything was to be a RIMM, we'd be laughing heading into the end of the year.  Unfortunately, it won't be all coming up roses, so expect to see some bumps in the road here.    In charts section this morning,  we've touched on the action Friday and what may be going on as the buying conviction seemed not be fully there Friday.   All last week we stressed a little patience on taking extra positions, yet not losing sight and therefore holding on to recent plays.   The ability to lean forward into the expectation, it was widely thought the Sept jobs report was a anomaly and this proved to be a good bet.  Simply,  if you had the right stocks the probability was they would be the ones that would give the strongest day.   You have to feed off good news and use the lift provided by news to lift your stocks.   What stocks will be the beneficiary, which have the best chance of catching volume???.  Always ask yourself.   We should all know from the group of stocks we cover.   This was not a day to look to enter illiquid stocks that would not take advantage of intraday action.   We saw a few too many on the forum, save them for a rainy day.   You are not taking the lift you are given if you are entering those types of stocks on a day you can trade off the herd and swing a few trades in your favor.   We had a list of them Friday morning we were leaning with.   These included the Shippers potentially bouncing off 9ema the day before.  You don't have to be a wizard to know these would move on good market news!.  You had potential to play a few points off these intraday ranges.  DRYS $96-102, FSLR $5 range, EXM, VMW $3 all noted leading up to the good news in the morning and days before.  What did the illiquid ones give you except missed opportunities end of day?.   Traders are on this planet to collect points..shave, scalp do what you need to do if you are trading full time....collect them if you are given market opportunities in the future when there is exuberance.  Days when the NASD is running, you should not be putting fresh coin into liquid poor Chinese stocks or micro railways as if you wouldn't be able to buy them the following week close to the same prices.   

STV, away from the speculative side of the KUN, RCH, GSI that led top losers list on Friday, STV is a 3 letter symbol away from the dirty AMEX on the NYSE that will definitely sit on radar for traders.   We've had some great success following quality China IPO's from the gates, such as EDU, MR and then WX EJ as it became more fashionable lately to go after these China IPO's.  A 2x Premium on the pricing of this was not surprising Friday.  We think most have read up on this stock and its business and so if you think Tech and China make for a good mix..well, then you'll be either trading this or putting some away.   As far as those spec names above, a quick beating might have been the best thing for them if you are thinking of playing them in the short term again.

..as a lesson, reminder into reporting season off more follow ups to the LDK news......btw...this is really turning into the Young and the Restless.  We've noted to keep clear if you're not in a position to flip,  now we say really keep clear and be careful with other names in this niche, this is now the 2nd after CSUN to experience problems from within.   Wildfires spread and at the heights this niche has reached,  it is no time to get brave!.  Investors and traders are still jittery after the subprime and when a stock is due for a drop on bad news, it really drops!!!.  This brings us to what is important now.  Earnings season.  The same exaggerated drops will occur on bad or even maybe average reports, if you are thinking of holding into earnings of micro/small/ momo stocks featured here.   For those new to us, we do not hold into the earning reports of these stocks!.  Think NTRI here from last week, we'd hate to see any of you take a beating because you had done some beautiful DD and came up with the idea your stock of choice will have a great report and then have your profits from this recent run evaporate in a heartbeat.    Let's stick to finding new gems this EPS season as a group and take it from there.

The wait and see approach might come about again until tomorrow and the FED minutes.  There isn't any need to discuss in detail any plays now till we see the extent of profit taking from those that were not finished Friday.  We need to see how the DJIM names set up from here.  This is not going to be a straight line up in the indices, so always be prepared to chew off some profits from days like Friday.

..fence sitters?

Despite all the hoopla since the premarket note on non-farm last week, we haven't seen the volume we would like including on Friday.  Some did, we did not.   We figured there were a lot fence sitters waiting to jump off and into this market long. Unfortunately, we have not seen the conviction in buying.    This market might be a little exhausted after all the subprime events over the summer and now needs a push.   Earnings could provide this kick in the butt, but this could be a little ways away.     In the meantime, we deal with a possible lull or pullback in the short term.    Yes, you can blame the volume on Columbus yesterday for the lack of activity, but unless the FED minutes provide a surprise stimuli, we might be in for more mixed trading until we get the significant names reporting.   What matters this earning season is the guidance for the 4th Q.  A stock might be beat handily, but if the guidance is average the stock may still fall.   Be careful chasing the headline number and wait to see the guidance before jumping in.    So..while we might be taking a breather in the US indices, the Asian markets new highs spillover and we continue to find possibilities in the stocks listed US side....They have no fences left over there it seems!..lol....If we could highlight one stock every day before morning, like STV yesterday...wouldn't it be just swell!

STV,  definitely the attention grabber yesterday as seemingly a few dollars were made available over the weekend to chase this puppy. The reason for the action is just as expected.    A mix of China and tech with quality earnings is a fine blend to drink.   We have thirsty traders, they can't get enough of this China bubble tea stuff.  You already can see what happens and might happen day to day when this gets intraday toppy. The stock fell over 4pts in minutes to its breakout afternoon point where it gained steam upwards again.   It was fueled with a little print pumping by Briefingcom..well, what else can you call a posting profile 10 minutes before the close and some Cramer doing and this stock continued on AH and then today's premkt.  This is not a stock without fundamentals behind it.  Also as we said yesterday it trades on the NYSE, supported by Tier 1 firms which makes it different than the recent Amex high flyers.   This doesn't mean the action won't get volatile, it just means you may be able to put a few shares away for a rainy day and swing the rest day to day.  Will the action around $50 levels provide a psych wall in the very short term?.   It should and sometimes these plays high out premarket following a huge day, but after playing yesterdays action you know there are plenty of traders knowing and wanting to drive it down the fairway 400 yards soon!.  Have fun!.   Just remember to hit the deck when you hear 'FORE" at a toppy juncture!.  Don't ever feel left out and start chasing blindly.   This is not a Baskin Robbins flavor of the day or week stock, it will be here for a while.  It beats any XFML pump and dump on a Monday morning;)

DRYS EXM TBSI..oh, stop it, please...no wait don't!.  These guys keep on marching forward and while the solars (not FSLR state side) go through their internal problems, this niche is providing tradable days over and over again as they continue to make new highs.  PRGN, ESEA had nice days as well and might provide a continued secondary play.  For us, it's simply sticking with the 3 big boys we have followed for ages now.  It is easier to trade the ones you know then going off and participating in something you are not so familiar with.  Call this your little black stock book rule!.   This am, KKR bought up a Turkish shipper in a deal worth something like 900mln euros. We've said this last month as we alerted the shiipers as a whole, we expect consolidation in this sector to come and you have to thing one of the 3 boys will be swallowed up sooner than later. This gives the sec a little more juice.

VMW, this one has been cornered here again recently with the prospect of 90+ dollar days ahead. We are there now at $95 and might have to start looking soon at $100 prospects if the tech keep providing the lift it needs to go higher.

MHJ,  as we said we think this China has the fundamentals to go higher in the Q's to come.   We don't want it to be mixed in with the spec stuff and prefer to see it walked up.  This doesn't mean we won't take a bubble day or two, but it will mean we will take the profits it generated.  It's acting well.

..Boy Scouts

We welcomed a surprise Fed minutes stimuli in yesterdays Journal to get us out of a meandering market place and we got it good!.  Well..pretty good as the volume still sucks out there.    The policymakers acted like boys scouts in their last open committee meeting as all agreed.   A united group they stand.    As much as anything this shared analysis, therefore a determined effort by all on the correct response provided the kick we needed, included in this was Poole's comments that for once didn't rattle the markets.    There were no differences as earlier and this was probably the most important factor seen by the big players.   Equities simply rallied as the FED did not see broad based weakness in the economy and the market said let's get on with it and put the credit squeeze behind us.     A few M & A deals were overshadowed, but this was also a good sign.   Again, as discussed in the weekend edition of DJIM# 41, good trading is a case of being in the right stocks that would potentially move the best when the market gets a lift and therefore gives a lift to your stocks on the good news. ..."....Simply,  if you had the right stocks the probability was they would be the ones that would give the strongest day.   You have to feed off good news and use the lift provided by news to lift your stocks.   What stocks will be the beneficiary, which have the best chance of catching volume???.  Always ask yourself.   We should all know from the group of stocks we cover".        If you have your hand in these closely monitored stocks you'll know what we mean...starting with...

DRYS TBSI  EXM and the secondaries noted yesterday premarket ESEA/PRGN.  All up 5-10% on the day with DRYS the volume monster.  It was already a good day for all of these before the minutes gave them another round of kicks higher.  The Baltic Dry Index the gauge of freight costs was toying with the 10,000 point level.   The demand from emerging markets is incredible with port congestion in many a country.  The capacity is drained and these boys can kick up rates.   This is nothing new as this has been expressed here constantly, including yesterday.  A possible good sign is other smaller plays are participating in this last binge buying and it all started with the, ..."The shippers, notably DRYS TBSI moved off 9ema yesterday. EXM should follow if this small reversal holds" noted Friday morning.   A helluva run from that short term support area of the 9ema.  Maybe this FREE can catch on if the micros piggyback action in recent days continues, unfortunately, that bloody ARCA on level 2 is still on the ask and not showing his hand.  Once removed this could really move just off its tiny float. 

GS,  if you want a barometer for this market lately look no further.  The drift, the lull of fence sitters was evident in the action of GS proceeding the minutes.   Interestingly, we thought this was setting up to hear a clue of more interest rate cuts in the near term to drive it higher yesterday. Instead, it fed off the news and took a different approach as to signs the boy scouts gave.  To gauge the minutes reaction all you had to do was to watch GS's reaction.   It was evident instantly, we might be in for a good stretch run late in the day.   If we had to pick a large cap, we're glad GS has been a fave here since those recent $190's.

VMW,  recently we talked of this having a shot at 90+, yesterday we talked of $100..what next ?lol.  We're happy to have this as the tech stock of choice if the techs continue forward off good earnings.  Again, you don't need a lot of stocks, you just need the right ones.

STV,  a simple follow up is that it held the morning open prices after retracing to them midday. We'd keep an eye on that level in the short term if breached as a possible exit before re-entering at a later point. Otherwise ...have fun!. Just don't forget there is a market out there beyond watching the minute ticks of this all day.   If STV has you on the edge of the seat because you fear the drops it already has given, take a smaller position.  You don't want to miss other opp's this market gives daily.

A few others from our Journals.....LDK, trade it, flip it..we just won't hold it overnight.   A day turnaround does not make an uptrend in our minds.  Company can say one thing, but a few want to see the independent reports and simply the problem there is not yet solved or the stock would be up much more.     Looks like a lawsuit or two is coming already.     AZZ, maybe closed the gap created by earnings and will act like the earnings guided stock it should be..maybe not.   GLDN,  not sure why this reacted this way to a raising of guidance, this is a low float stock and sometimes you lose sight of that because of the group its in and make more of a move than you should.   One thing to consider is while STV might be the Digital play in China, a huge conversion to digital tv is going on in Russia where TV penetration is at 97%.   GLDN is not a pure telecom play, it is a Digital TV play as well and that will be slowly recognized over time.    CETV, this euro stock was a big winner here before and we took a place in it yesterday as it approaches old highs.     A focus here was creating a new watch list of tradable stocks for our members, over time this list has grown and some might be page on 2 or 3 now as those plays wore off.   As noted yesterday in the forum,  it's good to have past flyers around as they may fly again.   History is no mystery.  If a stock was a fast mover that we once liked, it might be again.    AXR might have been one the last few days, but there is a bigger past mover out there in AMAG $55-72 that has had a great month so far.       FWLT, GHM, GTLS might be ones to stick on closer watch again.

Despite the action in afternoon, volume is still a concern.   A few fell off the fence on to the long side yesterday, but not as many as we'd like to see.   What you don't want to see is a continued divergence in the volume with a ladder walk up in points on the major indices.  This is what we are seeing in the NYSE and SPX stuff.

...The Love boat (ship)

Despite the major indices puttering along, notably the Dow as the big caps lost its allure thanks to profit worries hitting the A-B-C's and even an M of the big cap niche (AA,BA,CVX,MON), the DJIM closely watched index hardly blinked an eye.  This midday down tick included the RUT, rotting away till a late push made for a mixed day.   Life went on here, the main concentration here this week continued on the Shipping stocks and most of us were humming....Love, exciting and new..Come aboard.  We 're expecting you.  Love, life's sweetest reward...let it flow, it floats back to you....Okay, no romance here, but we were all waiting for more traders to get aboard our ships filled with iron ore and cereals to send our stocks higher.   Most importantly, we were waiting for those interested in a FREE ride and we definitely got this low floater discovered as it hit Briefingtrader and then late afternoon the more widely read day log that really pushed it.  This was our cry in the forum early and our cries turned to smiles as they profiled FREE late in the day.

The boys DRYS, TBSI, EXM, the secondary plays ESEA, PRGN started great and of course the idea of FREE caught on.   For a second lets turn back the clock to Aug 26 when we issued a weekend alert as the markets were dwindling, yet the shippers were making new highs.   What a concept buying the NCH is!.  This time it wasn't for an individual stock, it was for a sector.    Why not?.   This just stamps the over played methodology here of buying the strongest, those near highs and those making NCH's.   Same goes for the China stocks we've been trading.   The idea Tuesday at noon that this sector might go even higher after an already great morning proved to be true and TBSI had a nice and quick 5 point upside from the $50 mark.  Oh yeah, great job Briefingcom for picking up on the secondary plays to the big boys, it only helps our cause that was expressed here early this week.  We're not looking for the recent China speculative action to repeat itself,  so what we do is sell to the ones boarding this train late...sorry meant ship!.   Hey, every nice size cargo has to be unloaded at some time and we're not shy about doing it.    FREE, we waited long enough for this to be discovered,  our last note was early Tuesday afternoon and of course we were selling quite a bit into the strength.   We've always tried and discovered stocks before the herd as many of you know from hanging out with us at those seedy bars before.   There is money to be made in getting early, it is a clear monetary advantage to get to something first and use the later herd discovery as an advantage to your pocket book.   This was the case with FREE, even MHJ got  some print and pump in other circles.    We don't doubt this could go higher as this discovery on huge volume should give it legs and we'll trade it accordingly.   Our only fault with it is it has a knack of giving it up (gains) and until that seller is completely removed, we aren't so sure it won't again.   If using the big volume surge as a gauge this shouldn't happen...still if some profit taking takes its course in the big boys soon, this FREE will see it too.  The BDI jumped 3.6% and the fever will continue into Q1 `08, but not without a few hiccups.   We've seen them before eh?.  Not all up days are 3.6% on a index are they.  Also, don't confuse dry bulk ships with those carrying crude.   There isn't a worse area to swim in.

Unless the #'s, guidance from the big techs ( most importantly) is terrible, we are of the gut feeling the RUT will have a melt up into the late stage of 2007 and catch up to the indices that are making new highs seemingly daily. We're in the right place with the niche we cover if this happens..okay, when it happens;).  So, don't panic when you see the DJIA drift lower just over100 points if your DJIM play list is not blinking like yesterday.  Anyways, a very good week as we've been in the loop as to what is going to move. 

A few scattered names of interest/ focus that we have been adding to or looking to possibly get in, include................

VMW, tgt raised yesterday by UBS,    China's STV, WX ,EDU (eps next week, maybe a little run before off a NCH today), also dirty Brean Murray is here so after JRJC who knows what they might have in mind here,    GLDN, which regrouped and had a solid day,   CETV near highs,   CSCT which had some news out on revenue yesterday,  maybe even GROW on a reversal following some asset news yesterday and ARTW, following EPS midday. 

..winds of change?

Winds of change?...on any given day that weak news breeze would not have moved a leaf on a tree.  The weak breeze, the ones given as explanation everywhere is the JPM estimate knock down of BIDU and this Weber's comments from the European Central Bankl on raising rates.  Okay..since when is a 2mln cut in revenue estimates in one individual tech stock enough to cause the NASD to drop so steeply.  This wasn't a downgrade, they didn't lower EPS, they didn't cut the $400 targets they set in early October.  They actually gave a few highlights and said the revenue loss was due to what was already known in early September as a slight possible short term negative.     Now, to this Weber guy.    Going through the Financial Times here in Europe, there is not even a mention of this, okay one ...one line on the last page.    So what happened?.   Simply,  we've been talking about the divergence in volume to the rising indices as a concern.   You can't keep this action up without a negative tone setting in if it continues.  Add... the fact we had possibly reached a short term tree top based on so many consecutive up days,  it was inevitable to see a correction sooner than later with a shake of that AAPL tech tree.    The surprise was the magnitude, the steepness, the speed of the snapback, especially in these momentum big caps.   On the other hand is it really a surprise to live this drop?.  Not really, if you understand the game and aren't blindly involved in it.   Momentum stocks give it ,  but they also take it back ruthlessly.    If you're here, you know this quite well as you've probably been a victim more than once and it doesn't matter if it's a momo shipper or the headline grabbers of AAPL and RIMM.    Live and learn.    Same holds true with stocks.   Maybe some of you were beaten up yesterday, but you should only blame that greedy bugger that sits on your shoulder as you sit in front of your trading platform.   We've had an awesome week here from the STV, VMW, FREE and the shippers to name a few.   Plus...the morning was great, more of the same and some new recent additions like MHJ to 16+ from 13 last week, GLDN to 68, CETV to 103, EDU to 70, all spiked and we had one for the scalpers in HSWI for a possible 20-25%.      But wait...ask yourself the question why were the markets up in the morning?.   Did the blue light special just go off?.    Think about, we were up on Wal-Mart!.   Since when are we gauging this market on this relic!.  This is froth when see the whole market gap, run up the Wal Mart aisles!.     Simply, 'we' the market set ourselves up,  we ran the market blindly yesterday and the days leading up for a mighty profit taking reversal.   The suspicious thing of this is it comes just days before the big tech stocks report.    A coincidence?.     Maybe a pullback, correction now so the big boyz get some cheap now and then rally us into Santa's lap?.    The idea of the indices going straight up from end of summer after all the turmoil till the end of the year, just doesn't fly if you are at all realistic and sane.    So just thinking out load that this is a short term ...much need breather to fuel up.   The DJIA respected 14000 as it did last week,  if we go below and start holding below 13950, we could be in for a further ride down.    Lots of possibilities now, lots of spin..lots of noise.   It's all about the big caps techs and the reports coming up shortly.    You just saw what a little noise can do yesterday, close your eyes and see the damage that can be done if these guys start disappointing.    Next Friday is the 20th anniversary of you know what!!!!!BOO-HOO!!.    There is no harm of staying clear until you know and see more.   Much easier to jump on a moving bus than sitting in one and waiting for it to move in the direction you want..we all want.   There is always 'only' a need to take profits in stocks.  If you already blew this opportunity for yourself this week,  you might want to keep a few pieces to possibly catch a bounce.   It's up to you.   Just know your stocks, know their capabilities...their stress level, their sensitivity to market conditions as they arise.

Also note, WBuffet is selling some of his large China stakes. Oh boy.   Is this more of the political angle involved with some of his holdings or is this what his view of China is in general?. hmmm.  Surely, the spin will start from this to scare you silly.

Tech stuff this am..ORCL M & A news,   AAPL tgt raised by MS,     IBM estimates raised by JPM before next weeks report...as if yesterday's tech wreck didn't happen;).

DJIM #42 2007

Here we are DJIM clan, the week we've been all anticipating as the tech giants start reporting...INTC, YHOO, EBAY, IBM, GOOG to give this market its course.  Somebody(s) wanted to start early Friday by showing that Thursday's beating was nothing but a mirage as noted in the last lines of the morning Journal.."Tech stuff this am..ORCL M & A news,   AAPL tgt raised by MS,     IBM estimates raised by JPM before next weeks report...as if yesterday's tech wreck didn't happen;)'.     This was was followed with Oppe' giving GOOG a $700 tag.     Aren't these guys off Fridays?.      Guess with a Blackberry you could shoot off a price tgt increase/ upgrade from anywhere these days.      Coincidence of all these coming out on what is usually a quiet Friday scene,  plus M & A activity tossed in?.       Doubt it, these firms are seemingly gonna do whatever they can to grease this market higher it seems,   maybe we're being set up for a final push into the end of '07..a push that could leave us all hiding in the bush for a while when this all ends.  lol.      Anyways...all we could do is take it one day at a time here and therefore we are all playing it smart....right?.     Without panicking on Thursday, we noted in the last half hour to let this market drain, "the market will still be there tomorrow and the noise will settle'.     We were asked by a few of you to give our interpretation of the steep and quick turnaround from the techs and that is what we did before the open the next day..     Well...it actually started with our AH Alert on BIDU and the BS surrounding the JPM report on it and the match it was on the box leading to the tech's fall.    Maybe the big boys wanted a fire sale just before earnings this week just to load up, maybe that's why the barrage of activity from them on these names premarket the next day.      If you weren't taking profits Thursday, well then you probably made up your paper losses by holding through the night.     Maybe you even added more as the bus got gased and you added to your positions into what turned out to be potentially a very profitable trading day.   Hell...just if you got on the BIDU bus once or twice it would have been nice.   We're not Cramer with a $500 push for BIDU late in the day, we don't care what is does today or tomorrow, all we try to do is give an early lead on a stock and maybe if you agree and see the ducks line up as they did with tech upgrades, then you will shadow us into the play.   Okay... We need to put last week behind us now as the EPS story starts to unfold,  but there are few quick stocks to note off the close last week...

CETV, looked sweet as it broke through the congestion noted at our $98 alert.     It had a nice afternoon as buying picked up and it closed at $104 mark.    You couldn't ask for a better chart on the daily and weekly leading up into earnings for this stock or any stock.   You might recall when the market was taking a beating, we discussed the potential of money flow into Chinese, Russian stocks, half of the BRIC.    On Friday, our GLDN reached another high off our last alert on it at $82 to $89's and it is taking the other Ruskies with it... VIP and MBT have reached new heights as well.      Another one followed here closely all the time because of its volatility and ability to shoot a moon shot intraday is WBD, the Russian dairy/beverage co.    It  had a beauty of a walk up Friday as you could see by the intraday chart.  This one could give it up just as quick always remember,  but the way it was ladder walked for 5 hours makes you wonder what's up.     It never trades so orderly.   Just like the Chinese stocks, we are continuing to favor this Euro flavor.

Speaking of the Asian stocks, if you look at the charts from this weekend, you'll see the potential resistance on the HANG at 29,000.   Have you seen the overnights?.    Unbelievable, these markets have no respect for any resistance, any potential top.  It just did a drive by and gave this 29,000 the finger!.  So what does mean?.  Well,   just potentially another day to trade our DJIM names.   There is a name that has crept up the last 2 days and has offered a whole lot of gain % potential.    If you didn't catch it Thursday, maybe you caught it on Friday and if it rides the train further off 2 consecutive volume days...well then we might get a 3rd day of opportunity.    Again, this HSWI falls into the speculative and does come with a warning, even though it looks to have some of the volatility subsiding and something might be cooking as its under accumulation it seems.   Icahn, making lots of headlines recently. EJ traded stupidly at first too.   Not saying its a EJ,  just how it traded in its first weeks when you had no clue which direction it would go on any given day.

EDU, a few nice points off the note on it in alerts Friday midday and going on the limb here at first glance over the report and saying this is a great report this morning!.   Still...remember let the market show you the way and if they agree with us, the bus will move and you will consider jumping on.   Why does this look good?.   Besides the headline numbers of beating by .12c  (91mln vs. a lofty 79c)55% growth YOY, 81 mln in revenues beats 72mln and is 42% growth YOY.   The kicker is a very nice 30% enrollment growth and 40%+ operating margins.      Sales growth of 42% and 30% enrollment means efficiency and power.    In our opinion, this is the barometer (enrollment)with operating/ gross margins that you judge this stock on!.   Hey, we went on the limb early with WBD recently off earnings and it payed off big quickly..lets try again.   Yes, this baby China was once $20 dollars here, she's all grown up and kicking on all cylinders.   Still...there is a CC to follow premkt.   Let the market show you the way.   It would be rude to have sell the news in this report, but who knows..lol. Good to have the Asian markets possibly lead this as well. 

We did a lot of selling into strength last week as we prepare to have cash readily available to barrel in on new plays arising from earnings reports. This is something we always preach here as we settle into another earnings season.   Have cash on hand!.   For some of you it might be a problem cause you've become infatuated with a big gainer such as DRYS, TBSI etc over the months.    Just remember, she can always dump you first from the lofty perch you have her sitting on.  There is a big derivative market here placing bets in the Shipping industry, you're with the Hedgies here big time and it will probably get more volatile as time passes.    At least consider lightening up some of your recent big winners into EPS season.    We've provided a look recently in the Journals as to the things to watch and be aware of when considering a headline EPS number.    We don't doubt the Shippers and stuff will be in play, but we have worked them over and over here and hopefully it is now time to discover some new blood and start from the bottom and watch them climb, just like we did with all the DJIM Shippers, China, even Russian plays.  We want the easy play and that usually starts with getting in on play before the herd comes marching in, sometimes it takes days or weeks...sometimes just a few minutes.

Cheers' mates!

YII - YANG..

No we're not talking YIN - YANG, we already have an understanding of how things work in the speculative market down in China that has more bubbles than MariaB has in her lips.   We're talking the YII, the Yhoo, Ibm, Intc.   This is in part is what we have been waiting for and soon enough their earnings and their outlook will start to cause everything to happen....good or bad.    Hopefully the YII won't be the start of the YIN, but instead the YANG and we could go upward and strong into the New Year.     Yesterday was just a pure lame trading environment, most traders seemingly stayed on the sidelines early while the few around picked up anything they could to take advantage of the boredom while most looked ahead to today and the week of tech earnings.  This included playing off the noise in good olde Oil, Citigroup..whatever they could get their hands on to create a negative spin.    Simply, we tossed this all aside, it is all pretty irrelevant in the scope of things, the scope of earnings coming up.   As traders our gig is too seek opportunities, no matter where they might arise.   We cannot dwell on things we cannot control such as the subprime, oil highs etc. and now earnings.   There will always be something to work off and if the earnings do not provide the backdrop we love to work with, we will just have to change our tone and seek opportunities elsewhere.    What we have had is an excellent enviro to trade the past month or so, you don't need many more chances than the one you just had to make for a very profitable year.    There has been more than one stretch this year to make your year, most times you can make your profits in a short time and then shut it off.   We have always stressed this if you catch up on your Journals.   So, what we are saying is we could shut it down for the year, but we love this gig too much and want to love it more into the New Year with all of you here.   It is not about greed,  it's about loving the venue and winning in it.   In essence you are competing, a sport of sorts but we are not going to risk our winnings shamelessly if the market hints at shutting it down and only looking very selectively at opportunities.   Yesterday, we had an early probability of a selective play to get us all through the day, it could have got you a nice morning and /or afternoon if you got tuned in early from our Journal....

EDU,  everything we wanted to say about it possibly today, we said yesterday.   We're glad most saw the report the way we did and perked it up two times yesterday. A nice few hours into the close.  If you kept some of the EDU at bargain prices when alerted Friday into the earnings, well then you really did well!.    If you want more on it, a suggestion is to find the transcript (try the yahoo page on EDU) of the CC and learn more about this story.

CETV,  we love these $100 dollar kinda of plays because before you blink they are up 6-7% as is the case with CETV since we picked it up last week.   We like these recent and not highly followed breakouts instead of the daily momo ones that can fall quickly down an elevator shaft and take your profits with them.

DRYS TBSI EXM, yeah yeah..what else is new, just more NCH's and more price tgt increases this am.lol  This story ain't going away heading into the New Year as we've noted before, but after this latest binge run we are more cautious and prefer a pullback to go with a worthy position overnight.  Lets just say, we liked a TBSI more at $50 recently than at $60 now.   In the meantime, we are trading these intraday and feeeding off the morning tone in these..no not in premk, but an hour or so in the day.

BOMB- ay...the Turks are coming

Can't we just live in peace and drink up the US tech reports from last night!.  We've been beating our drum set in our gorilla suits anticipating the tech/internet earnings and now we get this stuff tossed around our heads!.   Geez.  Give us a break wasn't the subprime debacle enough!...Ah, the beauty of it all.    As far as the Turks and oil rocketing...doesn't anyone realize that the bulk of the oil is in the South and the pipelines in the North account for as much pipe as there is running from our toilets.    No doubt we will now get many attempting to get on the subject of the "Trick or Treat" due end of October by the FED as well.    Anything to turn our attention will be spinned to make the relevance of the earnings last night seem unimportant. lol.    We'll just reiterate what we said yesterday and that is to deal with what is front of us and pay no immeidiate attention to what geo-political, rate cuts etc. stuff we can't do anything about.    So..let's get on with the show and deal with what is front of us.   At this time...it is an up futures market here and we should all use it to our advantage in the morning...

YTEC,    this was thrown in recently on the forum amongst all the the China hype.    A big difference to many others that hit the board is this never got screwed by being run-up and then dumped.    Instead,  it has pullbacked slightly in recent days and then moved to its most recent highs yesterday and became a stock worth a try.   The almost quiet period it had, plus the reco by a firm recently gave this stock credibility in our view, something most of the recent gunners never had and therefore are sitting in the pump and dump category way off their highs.    Part of our trading methodology is to buy late in the day after we see if the stock has what it takes to possibly continue in the day(s) to come.  This is something we have repeated endlessly and this is why we were adding substantially into the close.    We don't take big slices of a pie until we are sure and that comes late in the dayl.    We don't mind missing the initial breakout and miss some gains.  We're looking at the bigger picture and have higher prices in mind.     If you're playing in size, it's irrelevant to go in on the initial break.  It's an unnecessary risk for us.  We've all seen failed breakout moves.  A starter maybe could be taken to keep track.    We rather be sure and then cut ourselves a hearty slice!.    This is the way we play on what is especially a stock showing signs of being a momentum play as YTEC did late in the day.      Another thing about yesterday is the China stocks we have traded here with you, such as WX, EJ were not having good days but the JRJC and YTEC were.  Hmmmm....What we got out if it is a preference for anything China bank related and went with it. 

As far as JRJC,...it has spent days seemingly consolidating around the 9ema and yesterday showed signs of moving off those levels and grabbed our attention as noted intraday.  Last nights EPS results gave early indications of spillover as traders looked for beneficiaries such as BIDU, which climbed $6 or so.  As noted AH, we saw JRJC as a one of those that might benefit off BIDU ( lumped in with it recently ) and it had no movement in shares being bought up as it stayed under $39.  Do you want to buy BIDU 6 bucks up or do you want to take a chance on one that hasn't moved and might be taken on as a potential secondary play. We prefer the latter..

VMW, performed well yesterday after possibly a 3 day slide down that might have grabbed the attention of technical traders. After the tech earnings it's a no brainer of what stock could do well from our DJIM playlist. Calculate the trading action intraday into the picture and you might have a good play today.

Despite a poor showing by the market yesterday, WBD, CETV and EDU showed resilience.  Strong stocks doesn't mean only those popping, most of the time this kind of showing is what grabs our attention.   Why?...because if good news strikes as it did last night these types of stocks should still move forward even if they have nothing to do with tech.   If the news was bad, they have a good chance of showing resiliency because they just demonstrated such the day before.     Another name that got our attention late in the day is FSLR and we will look at it closely today even though our hands might be full already.  This being the case, we apologize to those other stocks that might be worthy of more print.

..Off-Roading

Hope you had yourself a good 4X4 yesterday for all the crazy bumps and bends of the market pounding your kidneys!.   A good seat belt might be in order not to get dismounted as the noise from all headlines is over bearing the earnings reports from the big names at this time.   As we said before the open yesterday, we can't do anything about the noise and just have to go on trading what is in front of us and hopefully working for more than a day trade.   Despite the jitters still prevailing in the market arena, opportunities were still there on the stocks we've been tossing out...

WBD,  ...this was one stock that required no seatbelt yesterday as it glided avoiding all the potholes others were encountering.  Just the day before we noted its $110 top and the moon shot came of 10-11 points from the top break.   This might have more legs as it made a NCH, but we know it's trading history well and always put days like this in our pocket and dismount.  We'll be back, especially if it holds these levels in the days to come and sets up again or if it shows signs of working the NCH higher.

"Another one followed here closely all the time because of its volatility and ability to shoot a moon shot intraday is WBD, the Russian dairy/beverage co.    It  had a beauty of a walk up Friday as you could see by the intraday chart.  This one could give it up just as quick always remember,  but the way it was ladder walked for 5 hours makes you wonder what's up.     It never trades so orderly. "

YTEC, now you know why we said this has momo trade capabilities.   The quickness and steepness of its late day charge shows what we might have on our hands here,  with it you have to accept the early action as a characteristic of such stocks.   Just have a barf bag in your 4X4 handy.  This China IT and outsourcing co' has a knack of reacting nicely to any news it throws out.    Considering their business is with the thriving bank business'',  you can expect this stock to be a possible PR machine of contracts that will jolt it constantly.     We noted midday these momo stocks do not play to a schedule, meaning if the indices are popping it shouldn't be a surprise they are not following along as we saw in the morning and then eventually an eye popping move late in the day when the markets were struggling.    As far as its fellow country bud, JRJC,   it basically followed the path of BIDU and many other stocks gapping and then steadily coming down.    The reason we book this with BIDU, is its in the same universe you could say.  It's from China and has the momo trading flavor of BIDU type...simply after its recent ride we know its capabilities to move and draw attention of traders just like BIDU has over time.    The 60min shows higher lows, a clean and jerk over $40, meaning a good close over $40 would give this a nice looking daily chart and most likely some much anticipated action again.    The risk should never be forgotten with momo stocks, we've also seen this side of JRJC.

The other names we are trading and/ or top of the trading list are all familiar DJIM names.... EDU CETV HMIN LULU BCSI GLDN VMW JST.  RBN off EPS and VMI, always seem to appear here after earnings and both do so again.

Even though trading opp's are all over the place, a day without some many bumps in the road would be a welcomed sight.....Yeah, right..as if!

Google effect

There is really only one company reporting tonight that matters to us and it is an important one, google!    Well, at least we can say that the results and the ensuing after hour action isn't disappointing.    With google at this price level and people aren't disappointed about its growth prospect and are willing to pay up, this only gives us a clue of the status of this market.    Yes, the big banks may give us some headache like headlines but we already expected that from them.   Banks are capable of taking this kind of earning hit(hopefully one time) and in our opinion will not impact the overall market that much.   This is still very much a growth dominated market.    We dig technology stocks as well as shippers and solars and any other sectors that's considered growth oriented.     To put this in perspective, many participants including DJIM traders believe that there's still quite bit of upside left in this market.   The key, of course, is to realize which stocks are the driving force of this market and stick with them at all time.   It's been a while since we have these many stocks that are triple digit or approaching triple digit on our watchlist.    This simply reflects the kind of activities that are going on in this market and we better be there to take advantage of them.

Right now, the last few days of weakness feel like nothing but a minor pullback.   In this case, strong stocks should be bought on dips aggressively as long as they are technically intact.   There's really only one way to play a bull market, you buy on dips and you buy on breakouts.   DJIM traders have been very aggressive on the long side the last while and we'd intend to keep it this way unless something dramatic happens.

Now onto some plays...

ASTI, exactly one month ago, this one pulled some stunning move and did a double within a matter of a week.   We definitely like to see the similar kind of movement this time around and so far we got a wicked start today.   This move got kick started by the news of insider buying yesterday and our beloved Briefing picked it up today.   Yes, it's in play and it's a hot one!

YTEC, for some reason, it just doesn't feel that this runup is over.   It's looking more and more like it's trying to setup for another run.   We are still holding our position and with the 9 ema catching up, it may just be a matter of days if not hours before it gets going.   It's certainly capable of doing that.

NTCT, this is a stock we've been watching for a few days and we finally jumped on it for a small position as it isn't pulling back from the recent runup.   This one has very good IBD rating but we feel in order for it to have a shot onto the IBD100 list, it will depend on its results next week.

Shippers,  EXM/TBSI/DRYS all had a good day and especially the first two.   This is really about how high these things can go as oppose to when they will stop going up.    We think the only reason that can stop them is when they forecast a slowdown in their business.

Besides all those usual suspects, we also like the action from GLDN, GSOL and ANW today.    Bottom line, keep an eye on all of the high flying stocks on your watchlist, as soon as you feel the consolidation is done, it's almost certain that they can go nowhere but up.