Tough to shake off earnings enthusiasm...

It's almost unthinkable that we'd start the earning season with a nasty drop which begins the long decline.   What happened yesterday simply gives many traders a dose of reality that nothing goes up forever and pullback/pauses are very common even in a seemingly bull market.    Hopefully, you just relaxed watched the All-Star game and watched our Blue Jay star make a catch late in the game!...Wow, wasn't that something..lol...Guess the manager thought his arms were too tired after the HR' derby the night before to let him get an at bat.   Thankfully, today proved that nothing has basically changed since the day before yesterday.     Good earning plays are still being rewarded and bad ones are being dumped.   Things are about as orderly as it gets.     Also, for most participants, it's irrational to sell before the optimistic expectations they have with respect to their holdings.     For DJIM, it works the opposite because we only get excited AFTER an earning has been announced.   For us, there's no optimism, no expectation nor any feeling toward any up coming earning announcement.    We are just excited over other people's excitement so we can take advantage when the actual trade comes.

There's no shortage of plays on the table today.    For us or for most traders in our loop, we'd like to point out that we have a habit of working with the green plays.    It's not only easier to do but it also makes a lot of sense regardless of the market condition.     In an up market, obviously you want to hang with the ones with the best momentum.  In a down market, anything green pretty much makes them stand out and you sure want a piece of the action unless the market is in a total distraught.    Buying dips, on the other hand, is definitely not our favourite strategy and we'd try to stay away from it as much as we can.     When you buy a dip, you couldn't help but thinking that you are just taking a chance that hopefully you are buying it near the intraday low.     The planning of the trade as well as the execution will be tough on your mind when you go against the trend.      That's why in an up market or when the market is in a clear bull mode, it's always better just to ditch those "buy on (#)ema dips" and work with the new highs and break outs.

LPHI, you are probably wondering why we weren't being aggressive buying the dips on this one when the "clear" outcome is for it to go challenge the new high.   Well, there's always the probability that it won't.     We basically want to strike when the moment is right.   Today we got that moment between $35 and $36 and we got in.    Instead of being in this one for a while and waiting for a move to happen, we'd prefer watching it until the move comes.    Now the chart looks good and it looks like this one is ready to challenge its old high and beyond.     We'd be adding more of this one aggressively if and when this one strengthens up.

CCF, our old friend did it again.   This one came out with pretty good number as noted last night and stock acted correspondingly.   We like the volume this one exhibited.    As we have mentioned earlier today, this one has an IBD rating of 85 93 before the report.  If the number gets revised up, it can mean a whole new world for this play.   Again, it's just a possibility and not a sure thing.

ASYS, finally, this is a new  play we are adding to our list after its tremendous "look at me" volume today.    This one has a very small float and since they are associated with solar plays, we think this one is way undiscovered compare to others.   Sure, many traders have started noticing this one today but we think the fun may be just the beginning.  If you played it off the alert, you got 2 runs of almost a $1 intraday...we're looking for more and so just added on the dips.  This little company is profitable, revenues growing and a very small float and not a one trick pony that was trading under 50k share day after day (2.2 mln today). This is the type of company when it reports that has the markings of potential yr. over yr numbers that will get it attention...but we're not waiting for that day off this volume. We said, we are seeking more attention for anything solar from the firms, news to keep these going, anything with solar has a ring to it to us, even if it is something like this today on a semi/solar like AMAT, which ASYS also happens to be...BofA believes solar opportunity transform AMAT into growth stock, BofA believe is AMAThas closed another solar thin flim deal with a European co. They est the size of the deal is 40MW with the initial investment in the 60m range. Firm believes the latest deal is particularly important as it is an emerging application, "building integrated photovoltaic". Total value of solar thin film contracts won to date, firm ests, is in the 540 mln range.They think AMAT will now win 600-900m in contracts in FY07 vs guidance of greater than 400 mln.

DRYS, this one was mentioned a couple days ago as our favourite shipper now before TBSI went tipsy.   It's been mentined here many times before that as well.  We felt TBSI needed a pullback but this one looked better chart wise, anyway.  btw..TBSI is back to $31 after yesterdays sale.  But it was DRYS today who showed us who's the boss and took on almost 10% and a new high.    Again, we wouldn't want to chase this one blindly as the risk/reward ratio is not nearly as good when it was around $45.

AZZ, to us, this thing for sure is going to break $40 and beyond.   Action looks superb in this one and we are adding.

Naz +49.9, Dow +283

Perhaps, there's really no need to write the journal tonight.    Again, as we said last night, we are excited over other people's excitement for this earnings quarter. Also..from weekend chart update.." Since, we have seen the market rally into the upcoming earnings season led by technology..the PHLX Semiconductor sector closed at a 52wk high to close off the week.  The HANG is taking over eyes and money from the SHANG and the day to day volatility in the latter seems to have little less effect on the markets here. That's a relief.  The HANG/HSI chart shows a clear breakout over 21,000 after a long fight (6 mths) with that level.  With a good start to earnings season, M&A activity still showing robustness, we don't doubt the markets can pull a move somewhat similar to HANG's after the DJIA/SPX bust through the 3 mth range over 13700 and 1540 respectively".      How's that for a start today!. Actually, today is that seemingly rolled into one day.  Despite the overall very bullish sentiment of this market, we want to quickly point out that people are only optimistic about the market as long as the earning delivers.    So far, we haven't had many companies to report but it feels like people are playing as if most companies are going to beat earnings expectation.    If this is how people think and at the same time the put the money where their thinking is, so be it.    For us, we still stick to our own game plan and concentrate on those that have reported good report.      A strong market will reward all kinds of traders, whether you are speculating blindly or working with a sound strategy.     Everyone makes money in this market!   

Now onto some of the DJIM plays...

LPHI, oh yes, this one is ready to challenge the old high.    We like where it ended up today and couldn't help but add some more.

DRYS/TBSI,  DRYS has just been a monster as of late.   The 7% gain today in addition to yesterday's gain is something that amazes us even.  TBSI, on the other hand, isn't looking too bad either as it shook off the sell off two days ago and it too  looks like it's ready to challenge its old high. DRYS, an upgrade was up late in the pm.

ASYS, an erratic one it seems or one that gives many opportunities to enter a trader might think.

SOLARS......they are hanging in and probably didn't participate as a few of us would have liked. ...who cares, really..maybe they are waiting to do it on their own...Still..they are hanging in tough and maybe the firms are really getting involved (hope) as we noted the other night.

In fact many stocks hit new high`s today and we are not going to list all of them.   Some email us as to why we don`t include their fave stock in the Journal.  That`s not what the Journal purpose is!.   If we already covered the stock endlessly, it is almost irrelevant if it appears on radar again with a NCH today or yesterday.  It`s worth maybe a note by you on the forum, but it is not enough reason to write about if there are many things better that we are concentrating on.   We also move on from turtles...Sharks eat turtles for breakfast, lunch and dinner and you don`t want be carrying a laggard in this market, especially if this stock in question already gave you a few points off an alert.  

Whether we like it or not, this month looks like it's going to be busier than recent July`s.   If you were invested heavily today, then you had a good time as it didn't take much trading to make money if you were already in the right stocks....you could have sat on your hands and just rang the register..or you could do it tomorrow off any follow through action early.

A few things going on here on the forum the past few days that resemble Summer Camp...

Let's be courteous on the forum... if someone gets bruised.....we've all been there and no reminding is needed....they've given you enough leads on winners that this is not needed and respect should be shown.    Also, if one didn't or don't get enough love from their closest in life or trading life ....let's not use DJIM to wax our egos now or cry for love....Also, if you don't like our comments about a stock we responded about (speak up and we'll debate) and don't do it in round about ways.  It's so obvious, it ridiculous to all...Don't think we are bullying your stock.....just read our comments over again and stop filling other members email boxes with this stock is up $1 nonsense ...hell, it better be in this market off  'pretty' earnings.  We are all here together trying to make $$, screw the summer camp crap....we`re not about to be counselors.  We`ll just call your parents and have them take you away.    Demi

Trading for the sake of trading....

On surface, this market didn't do alot on either direction today.    When we look closely, it's actually pretty volatile given  where we are, which is essentially the beginning of the earning season.    Some stocks have given up some gains early on but that is just part of the game.    As traders, we have to respect the nature of this game and participate actively as oppose to just spectating as by stander.    The point we are referring to is that we have to actively take profit when things are going good.    For those that have already gotten into this habit, then it's definitely something to treasure for.    We'll take a look at some stocks....

DRYS, this is definitely one of those stocks that have had a tremendous run in the last few days.    We thought it looked a little extended couple of days ago and today it confirmed our suspicion.    At this time, we are going to be shy away from it unless a dramatic move happens to the upside.

TSL, there was plenty of time in the early going to lock in some profit from its recent runup.   If you got a little greedy, well there goes the last few days worth of gains.    When treating the type of momentum stocks like TSL, it almost always pays to sell into strength and buy back on new highs.    Also, it's crucial to setup tight stops and this can save lots of pain for most traders.     This one touched 9 ema today and we'll see how it responds to it tomorrow and next couple of days.

LPHI, this is definitely one of the better, if not the best plays on our screen today.   Believe it or not, it tacked on almost 6 points since our b/o alert of $36 area.    Now, the worst thing you want to do with this kind of play is to set a price target.    In our opinion, it's just not realistic to set any kind of price target.    We go with the flow.    We'd sell some into the strength and if it comes back and goes higher, we'd chase it higher.    So how do you know when the runup will stop?    We'd get worried if it takes out previous day's opening price with a close.      Although this may not work every time as a reversal signal, you can always buy it back(higher) if you get shaken out.    Remember, we are traders so "get shaken out and selling too early" is just part of business.

ASYS, we like this one's setup even though you can say the other solar stocks are in bit of a funk today.    The low float is a definite plus when it comes to trading this stock.  The fact it's still a semi business after all  is also separating it from the other solar stocks.

PENX, this one also did not disappoint and closed reasonably well despite the market's late day weakness.    Based on its recent action, we think the race to $40 range is on for this one.

VSR, some of you have probably been trading this one last little while and so have we.   We think a pullback is definitely needed if this one wants to see even higher prices.   Momentum is very strong and news flow is very steady with this one.    The intraday action has been opportunistic but unless you can stomach the possibility of a pullback, it's better to wait for a better entry.

Market is heating up on the earnings front and even some of the speculative ones have been driven up on positive results.    We just want to caution readers that when looking at the price reaction relative to the earning report on the speculative ones,  ask yourself if the reaction is reasonable.   If you think the reaction is reasonable, then ask yourself again how long this reaction can last and ultimately ask yourself if you are going to be comfortable trading/holding it till next week.     No traders are alike when dealing with any kind of plays.   We just want to make sure that you are aware of the risk and effort that's involved into making a spec. play profitable.