TXN, AMZN, AAPL...

There definitely is a pattern going on.   Big tech stocks delivering good earning and pushing the market up along the way.   It feels good out there, especially for those co's that have delivered optimistic news, earnings related or not.    This is good news for everyone.    When market is in a good mood, it's just much much easier to deal with everything else.    We don't necessarily have to trade THE stock in news such as AMZN or AAPL, but we can take the advantage of the rosiness of this market to tackle other stocks that we are familiar with and in our niche.     There have been tons of small caps releasing earning these days and with the help of the generosity of this market, we can sure capitalize on some good stuff out there.

First of all, you have to make money on a day like today.   What we said this morning was vital to tackle today.  If you aren't, then there's something wrong with your holdings/strategy.    What's a cure?   Dump the laggards and get into the winners.   Yes, it's that easy.    For us, we only fall in love with a stocks action, never the stock itself.   So if a stocks action gives us headache, we cut it and move on.

Earnings play!    We have stressed enough times that a pre earning run is merely a PRE earning run.    Holding through the earning defeats the purpose of playing the pre-earning run.   This is not a complicated concept but a much useful discipline for DJIM traders.   We don't hold into earnings, period. We just play earnings.  There are quite a few earnings related plays today so we'll go over some of them...This morning we gave our strategy to a few names we'd closely monitor for a potential play...

DXPE, earning came out last night and stocks action delivered today.    What may cause this is the possible fact that the stock did NOT have a typical pre-earning run-up prior to the announcement.  It just had a fews days sandwiched between a so-so day.  The stock price pretty much sat in a flat line since the last earning report and this time it just jumped much like last time.   Like we said before, seasonality factor favours DXPE, BTJ kind of stocks going into the summer.    The action today only further confirms our thesis and we bot some during today's run-up. Our approach was to watch tape, the market reaction after the bell and "go from there".  Soon, it was clear the crowd, the market wanted a piece of DXPE.

RVBD,  "We will play accordingly if we see it has potential to smash that level or if it does". Well as it happened, low $33 area was attacked and we entered into this play. We are not chartists, but one look at the chart today showed and area of tops from Dec to March. Our 'charts for dummies', handbook said if it takes this level, we'd like to play it. The factor of a hot tech market made RVBD an easy choice today.

BTJ, much like DXPE, this one did very well off the earning.   Mood is very positive for this sector and we have no reason to doubt that this one can run much further.     Float is small with this one and it doesn't look like it'll give up its spot on IBD100 list anytime soon. 

What did these 3 have that SILC didn't?. A mixture of sequential growth and good guidance, something SILC didn't.  If reading numbers isn't your game, let the market make the deciding factor for you before you enter a trade.  Simply..you want to be where there is a influx of money going in..not going out. The easiest way to do so is WAIT!.  Also, it is not just about reading the headline numbers.  If that was the case we'd all be buying EML today!

SCHN, oh how we like this steel earning addition to DJIM. Closed up another 6% higher. This is up from $45 when first intro to a high of $53.50ish today.

IDSA, this is and old friend for us that came out with results mid day.    The stock caught on fire b/c of the recent surge in scrap metal stocks and whole sector in general.   What got us more intriguing is the fact that IDSA's IBD number 90 90, prior to the report, is good enough to get on the IBD100 list.   Be caution though, this one is volatile and can turn on a dime.    We do, like the risk/reward of this one at this point given the rosiness of the sector, the market in general and the potential IBD fever attached to it.

PAE, this one was profiled in briefing yesterday but we mentioned it 8 trading days ago b/c of its earning, plus a recent alert on a move on $2.   All we can say it is a beautiful thing to sell our stocks into briefing profiles that get new bait for our already discovered fish!.  This one has gone up nearly 50% ( 1.70 to 2.50 close today) since our Journal on it but you'd hardly notice it b/c of its cheap price and with what's going on with all the other action. " Usually a stock turning the corner on profitability gets some attention sooner than later.  It actually got into IBD's top earning announcements column and might get a look Monday or simply crawl slowly upwards from here.   It can be a complete bore or its numbers and float and price will get some cash into.." DJIM 

MTOX ROS keep on ticking best. Some others we were trading today in smaller sizes and/or closely watching, MFW RCCC CYNO BW(eps in am).

Clearly...

You have to respect what this market is capable of.    Also, we are crystal clear on what sort of market news this market does not like.    As we have said before, as long as there's no heavyweights that can tip the fine balance of this market, we should be ok.     However, if there's enough market moving negative news coming out in a steady fashion, even the most bullish case will have to be shoved to the side, for now.     It isn't pretty out there and we really have to raise our cautionary flags a few notches today.    Market has been very volatile lately and unfortunately much of the volatility seems to weigh on the negative side.  It's been bad..good..bad..good and today it got ugly.  We all can read about it elsewhere, we had some prelim numbers on AAPL's iphone biz premkt and then we supposedly had the entire market on CFC's CC of 3 hours taking us down late in the day. Earnings are not stellar and there is fuel being added with the housing, sub prime hourly reports.  AMZN up 12 bucks AH and maybe others, including AAPL AH's can give us some reflexive bounce action soon.  At this point as we said this weekend in the charts, the lines are drawn in the sand  on the indices and today the NASD cut one to start.   We'd be selling holds into any strength now, unfortunately..many will be thinking this way.   Tomorrow is probably the busiest EPS day with many S & P co's set to report, willl we get some reprieve or will focus shift further after CFC into the ECO/ housing #'s out tomorrow.  There are a few small cap reports that aren't getting the attention they might otherwise, despite AMZN's move tonight.  We'd just say be a little more careful now if a stellar report comes out on a micro/ small as the interest might not be as we are accustomed to.  So watch the chasing of the gap if one comes along.  We'll see...volume will always tell the tale.

At this point, we'd like to stick with the more predictable plays as oppose to wager on a bullish market to bail us out on some of the potential setups.      Ok, some companies have reported some nice earnings but they are also prone to be vulnerable to severe market sell offs.    We are back to a stance of taking a wait and see mode on new buys.   We've talked about only using the morning calls, early action if any, as in indication if to trade the TBSI, DRYS on a particular day lately.  Today, clearly was what we feared if you were holding these overnight.  TBSI was ugly late in the day as the cries of all overboard were heard on this shipper.

We basically want to see which plays can emerge as potential winners when things do settle down.  

Today, a few probably got lucky by selling off the DDUP, AP first thing in the morning as it turned out.  For stocks trading this thin..market orders, stops are usually suicidal.  We've seen both of these stocks bounce nicely in the past few days after such action.  Watching a stock down 2 bucks on less than 50K early volume is simply a few causing a stock to falter fast.  Best to sell into positive action, you'd get a better price yesterday than fleeing early as today in most circumstances!.  Most circumstances are not -200/50 point days.

CRNT, this is probably the only predictable thing on our screen today, despite a downgrade.    It's predictable as in a sense it's being played for a potential high ranking IBD100 debut.  Too bad we didn't start earlier than today as on other plays where the potential % return leading to IBD listing was much greater, such as GTI, NGA.   We'd be playing this one aggressively as long as the mood is right with it.

Bottom line, we want to have a clear vision when it comes to trading and we aren't getting any today.    It is best to protect the capital at the moment and let other market participants sort out the mess.    There will be opportunities when things get settled down.

Pair of Aces...

When you have a pair of Aces, you usually have a pretty unbeatable hand.   In our case, we had Amzn yesterday and Aapl today.    Does this pair of Aces have enough karma to save this market?    Or maybe, is this market really in need of saving?     Some are doing there best to make it sound so..

AAPL is definitely the big enchilada the market was waiting and expecting on today.   What everyone was hoping for was obviously an AMZN kind of reaction.    So far in AH, AAPL is delivering and is up over 10 bucks.    Now we are not going to analyze their report, their ipod or iphone, Mac shipment numbers.    That is really an irrelevant issue to us traders as our main concern is how this thing is trading and what's the likely implication it may have on others tomorrow.    So far, despite the early weakness, we say the reaction has been pretty good.    Hopefully, this can translate into a positive spirit into trading tomorrow with the help of some of the firms morning calls that cover it.    Market was hairy at times today but somehow the indices pulled into green territory.

Bottom line, we want to see that the good earnings report are still being rewarded.   This is the fundamental strategy of DJIM and without that, it'd be pretty much useless to trade.     Fortunately, good eps reports are still getting bid up, so we are still very much in this game.    What we do want to caution to our readers though, is that in light of the recent market volatility, we are cutting down our position number 'considerably'.    We are basically only trading a handful stocks now which we consider have the best potential and the safest setups.  We are also concentrating on new faces, leaving most of the recent winners behind.    We want to trade in a manageable manner so it's time to go back to our basic "be very selective" strategy. We are not in the buy the dip scene either now, so it is better to start with fresh names reporting well and avoid the dips in Solars, Shippers and others that have ran this last Q at this point..  Have a look at VSR, PCR for some more that have beaten up today..quickly.  We want to avoid anything close to this, the best way is with fresh names.  A good report is not going to fall 15-20%, an over extended stock, but a recent runner might for many reasons.  If a stock is breaking out to new closing highs as with LPHI, it is worth another flyer in our book. Still, you have to keep it manageable and in decent size.

here are some plays we are dealing with today...

LDSH, we bought some off its report today and liked the way it closed.   The report is pretty strong and the reaction is even stronger.  This one has basically been stuck around the $39 to $42 range since Feb. so this report is potentially giving this one a good excuse to kick into high gear, for a new runup.    We have been a little aggressive on this one today and we are looking for some multi day action from this one down the road.    Read the earning report, we think you would be impressed. It probably didn't hurt BA was up early with a nice report.

LPHI, how high can it go?  If we just stop asking ourselves that question and pay more attention to its action, perhaps we can get some more profitable trades out of it.   We added some today on anticipation of a good close.  It closed well and we are eyeing the $50 mark at this point.

ANIK, this one reported last night and we couldn't help noticing its strength today.    With its IBD number of 96 84, we think this one is also a candidate for a potential IBD runup. They had a FDA approval to go with the report.  Many of us traded this in the past, hopefully, we could have more glory days with it.

AAPL/BIDU, just a heads up for tomorrow and you case you haven't heard, they are both up multiple points in AH.

What will it be?

Tequilla...JD...Vodka....maybe a shot of each...or maybe a two-four, as we so dearly call it in these parts.   You're/ we are entitled to whatever tonight!.   If you wake with the spins, that's okay cause it might you keep away from buying this slaughter house in attempt to make some of your money back.   Our preference now is to stay in bed ..alone..when it comes to buying any dip or holding anything in size overnight.   We're not about to make this into a daytrading site as it doesn't suit the majority of our membership.   But, if we see an opportunity or if you do.. shout it out. 

There is no way you could have avoided any or most parts of today.   If you were 100% cash heading in, that's only possible if you trade 1-2 stocks at a time.   A scene was supposedly set last night with the Q's being up from the AAPL report.  Some kind of positive was expected by all coming into this morning.   Unfortunately ...and surprising to most the futures woke up with bad breath.   Simply, even if you liquidated 90% of your holdings the past few days, you were still in big trouble at the open as the market plays no favorites.   Stocks gapped down 1-2 dollars and there was nothing you could do, not so liquid DJIM stocks were shot first.   What you do is natural and that is wait for some reflexive bounce action, we've seen it for months as buyers step up to the plate...so you look for it... okay...now as the Naz is down 15...down 20...then down 30...oh yeah its coming at Naz down 40...okay maybe ....50.....60....chit 70+??    If you are looking forward to tomorrow to catch more of this late bounce, that's fine,  there will be short lived opportunities to cash some back in.   But.. in the big picture, you really need to do some background research and realize that this sub-prime, housing story is coming to a 'global' mess created by the US credit market if you have a book of stocks.    We have mentioned many times over,  we love when 'Paulson' comes in to save the market.   He usually does, but it never needed saving like it did today... Paulson says..."Mortgage/Sub prime Collapse Doesn't Threaten Economic Growth" .  The bounce started late as all of a sudden his comments were released...hmmm, yep, that's how it works.  The big boys call their ex wall street frat boy in power and try to have him save..help out....but, today he didn't need a call or 100.   It was a no brainer for him to step in.   Unfortunately, the mess they created is spreading where fear is being felt overseas.   Confidence is dwindling by those around us and that's not good at all.  

In the premkt, we had more than a few excellent reports as pointed out by members.  There was something fishy going on at that point, besides the Q's being down, there was no interest at all in some excellent EPS reports.  Nada..zilch..goose egg...no hitter.   No volume was seen.  Q's are constantly down in the morning, but usually there is still interest in individual issues out with nice EPS..not today!.   Only the big fish have received a good trading enviro in the past week and they are AAPL, AMZN.  We have seen too many enthusiastic, no volume opens on good results from small caps and what has resulted has been short lived up gap opens on low volume where a few end up holding a white flag for help because they basically buy at the high of the day by chasing.   We tried to convey this in the forum this morning..be careful out there as it's not the same market we are used to where EPS winners fly!.    It is best now to get your bearings straight on a stock before chasing it off EPS #'s.   Give it time from premkt to early on it in the trading day, this will probably exclude the micro/ small cheapies with characteristics we all so love to play when they come.    btw..there were a few small caps that acted well today OMTR, AXYS.     Others might just need to be watched and if the market begins to have a positive bias, maybe they will be the first place we should look for an opportunity in.  The dominos are falling....you never know if your stock is next in line.   We all can't liquidate 100% and pretend to see this coming today, most accounts are set up that such quick action would not be possible and if it was... you still take a beating today.   It doesn't help in this market that you can't find a buyer in sight for many of our closely followed small caps.  Your only option might be to send off a market order and bail.  Well, that only adds fuel to the fire and we have collapses left, right and center.  

The only thing left to do tonight is to suck it up and tell yourself with a little discipline you will peck and chew away at the market and get your money back and hopefully more.   There is still that glimmer of hope in the AMZN's..AAPL and many more of good earnings.  This might be an underlying base that will get this correction out of the way fast or at least give us something to eat at the rest of the summer.    The difference from recent times, we the little people really don't know the extend of this credit failure and what it could possibly do from here on in...the impression it is leaving is spreading beyond North America.  Just be smart, disciplined and wait for an opportunity to score...it will come no matter what...just maybe not in a boatload as seen recently.