Reassuring day?

Perhaps Not!    It's just troubling to see that index is up so much while the decliners are still out pacing the gainers.     Ok, many of us have to admit at the end of the day that this huge point gain hasn't really done much for us, the individual traders.    What the market is doing is that it's trying its best to confuse and frustrate traders at the same time.    Do we play this rally aggressively or not?   For all we know, tomorrow could be a nasty selloff day.   This is the kind of uncertainty we are facing day in and day out for the last little while.     Under normal circumstance, this rally would be viewed as very bullish.    In the current environment, it only makes us fearful that this is just another rally that would soon be crushed.    Well, if pattern serves right, we'd be going right down either tomorrow or the day after.      Ok, enough of this "once bitten, twice shy" analogy.

What we have been doing today is prioritizing our trading list and put those stocks that have just recently announced good earning as the ones to play and monitor.     Many stocks have suffered lots of damage technically but we are able to still find some decent plays that offer us good trading setups.    Here's a few that ought to be familiar by now...

FCN, this one came out with earnings when the Dow dropped close to 300 points last Friday.   Today we believe traders are realizing the value of its earning and bid it up.  We like this one's momentum and we are trading it aggressively.

ARTC, this one also is a recent earning play that has pretty much weathered the volatility of this market.    Perhaps it has alot to do with the type of business this company does and it's definitely standing out from the crowd and notched another high.

LKQX, it came out with earning last week and it notched a new high quietly.   We like this one's setup today and we are monitoring it very closely.

GHM, this is one of the very few small caps that actually did well today.  We added some and we are looking for some more follow through on this one.

DOCX, after its first earning reaction last Friday, we are more encouraged by its action today.   The more we read the report, the more we feel more confident about this little play.   The only question remains is the question of sustainable interest.   Will there be enough interest that can give this play a run?   At this point, we aren't too sure but we did add some today on its improved action.

CRNT, so this one came out as #1 on IBD100 and we got the initial pop as expected.    We don't think this play is over.  The longer it stay above $15, the more likelihood that  it can try for more upside. 

Taking advantage of the tape...

The truth is, it isn't exactly easy taking advantage of today's rally.   If you really paid close attention, many if not most of the stocks on our watchlist hit the day high right around 10 A.M. and it's pretty much sluggish action from that point on.    Sure, if you happen to have some poisitons tucked away going into today, then you'd have a pretty good day scaling out here and there.    For those that began the day literally flat, you almost have to buy stuff from the get go and cash it all out half an hour later to enjoy most of the rise.    Otherise, it'd be most likely a diffuclt battle making an entry middle day.     Stocks can be volatile even on a seemingly good day.   For us the traders, we have to recognize the volatility and making use of it to our advantage.    We have been cashing out quite a bit of stuff during the day because as the indices was heading higher, many of our positions were either stalling or drifting lower.    That's a sign of tired play and frankly, many of our recent plays have gone up enough to justfiy some sort of pullback.

Here are some plays that closed well off their highs...

FCN/LDSH/LKQX/ARTC, these four in particular all hit some really nice price point in the early going but they all couldn't stay up there long enough.   Yes, they have been up quite a bit past few days and we basically  have to take some profit here.   Don't forget, big point day like today don't come often and they only happen often in a volatile environment.   During the volatile environement, we have seen more big point down day than the up ones so we have to fully appreciate what's given us by locking in some profit.

CRNT, this one took a pretty nasty turn intraday and closed much lower than its day high.    We are not absolute certain if this is a sign of reversal but it does feel that the easy and sure money has been made in this play already.     Again, we'll leave it at this piont and let it sort itself out for the next few days.