We better get ready...

Before you know it,  half of the companies out there may have reported their earnings already.  The flow is about to start. Frankly, we feel that this mkt needs to kick a gear higher to really start this earning season.   What we mean is that we want to see more volume and more volatility!    Good earnings get bid up and bad earnings get dumped kind of volatility.    When things are chaotic, there's always opportunity.    We don't want to speculate which sector or individual company is going to shine this quarter, but we have to keep a sharp eye out for outstanding report.    

Today's action from DJIM land is surprisingly quite good given the weakness in technology sector.     Of course, we are only concerned about individual action here and we'll let the talking heads discuss the theoretical side of things.    Most of the DJIM stocks enjoyed some very nice gains and here is a run down..

MFW, financial companies, especially the little ones like this definitely can trade on their own.  Come looking back, an entry point at $28 is not that bad of a deal.    We've been actively trading this one last couple of days .

AMK, as mentioned last night, we thought this had the best early chance this week alon,g with MR.  It didn't disappoint with a nice day.

MR, so it looked like it had a seller or two mid way through the day as it reached highs.  This one had above average volume today and we'd be watching it closely next couple of days to see if it has the juice to take out the old high and start a new leg.

HMIN, it looked like it almost had some steam to break out but only to come back some in the afternoon.    It's having a pretty stubborn consolidation so far.    Again, we are not eager to chase potential breakout but once it gets some push under some heavy volume, we'd chase and alert everyone at the same time.

GLDN, new closing high, there's not much else to be said about this one.   In fact, this is definitely the best Russian stock on our list right now.

CCF, slow down Jose.   To be honest, we actually aren't comfortable for it to trade into the $32s this early.  It was here for all high 27's/low 28's to snap up last trading afternoon.  We definitely want to see some base building here.   Let everyone catch some breath and accumulate some position.

AXR, though we did not actively participate in this most recent run-up, this one should always be on anyone's top trading list and its good readers have not forgotten this $90's DJIM.  Its been up in charts all along, so there's really no excuse to at least have admired this move..lol.   Honestly, it's not easy to chase a 30 pt move and we just have to take it as is.  If you played some, congrats to you but if not, no big deal as opportunities will come.   It is a little stretched at his point so we aren't looking to do anything here.

Some other stocks on our list that closed well include, GRC OPTM HRT OMRI.    One last note on EDU and future earnings, earning dates are to be played, not to be held through.  We didn't say anything cause there was nothing impressive about the report. Last report which was sensational sold off, so this one is no surprise.  Still, it's pretty good, it''s just the market doesn't care.  CHDX, this one was in play a month or two ago and today it broke out apparently on good volume.   Keep an eye on this one for potential follow through or not, it's not the most consistent day to day performer.  Another is a big DJIM flyer from last quarter, CETV which put in a NCH today on a gap. Not sure what the beef is here today! . Good stocks just grind it out over time and before you know it...boom...a NCH

cheers,

..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!

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.

Accumulation...

Despite the overnight surge in the Asian market, the North American market didn't seem to quite match the same kind of intensity as overseas.    Still, market closed pretty well.   We have Fed meeting this coming Wednesday and the consensus is that Fed will lower the rate.    Again, this is not just anticipated,  it's also being expected.   The question now is how big of a rate cut will we be facing?    Is this the real question we should care about?    No, what we really care is how this market reacts to a 25 pt cut or a 50 pt cut?    In the unlikely event, how will the market react to a no rate cut?    Basically, there are two probable scenario and one unlikely one.   At this point, there's really no reason to overwork a strategy to anticipate the reaction, we'll just have to deal with whatever happens.

As we have been saying for a while, we don't think this rate cut will impact the overall market sentiment by much.    Hopefully, this market is still being earnings driven, and not fear driven, which means that the familiar names will carry this market higher.    There's a lot of disbelief of why this market is at the current level and that actually serves as a good point.    You definitely don't want to see everyone being optimistic and basically we need just as many bears calling for downturn, recession etc. in order for this market to go higher.

LFT STV.    Lets talk about these two as we have been getting some emails toward the end of the day concerning the well being of these two plays.    At this point, what we really want to stress is that these two are IPO's and now LONG term plays as yesterdays Journal noted.  These were already short term plays if you're only looking for a fast trade.  Being an IPO, there's basically no historical trading pattern to dictate a stocks movement.   It means that they will be volatile at the early going, especially the first week or two after its IPO.    That's the way it is!    We have to accept the fact these stocks are brand new and we have to slowly work our positions for a longer time frame as oppose to treating it like a JRJC or EFUT!     If you have any doubts about these two plays, just think about the following facts.     When was the last time can you recall a Chinese IPO on NYSE that have done badly three or four weeks into trading?    Yup, we can't recall a name that we've covered that didn't give us some good movement.    WX, EJ, EDU, LDK, TSL, YGE (nice action yesterday), MR... all serve as good examples of the stocks we've been trading in the past and now months later.     If you include the good ones on NASD, then there's just tons more.     Since we are talking about a NYSE stock here, this instantly gives credibility to these IPOs.    It means that the company is not only profitable but also meets the stringent listing requirement.   CSR (CSCT.ob) got that finally and is now trading on NYSE.   So back to the question, why are these stocks down today despite some good action from other Chinese stocks?   Well, one possible scenario is that some traders were looking for some carry through action like STV on its third day and did not get it, hence they just bailed out.    That is just part of trading and we can live with it.   Other recent momo China stocks like YTEC, JRJC put in quiet red days as well, a pattern emerged quickly as these names underperformed those China names near or at highs.   Our game plan is establishing a good position at this level.   We aren't buying all of our shares at once and that would simply be arrogant and undisciplined.     Now does it mean that LFT is done gong down after today?   Well, we don't know that and there could be some more downside action but we think the downside is limited.     As far as STV goes, the recent low is still intact and we are looking to average some more into any more weakness as we see.      Basically folks, we are dealing with a couple of strong growth oriented Chinese stocks here and they have just been out on the market for a few days.     Rome wasn't built in a day,  so let's just give these plays some room and time to work.

Hopefully, you are running a balanced book of sorts and participating in more than just these IPO's.  Just look at the number of charts updated from our closely followed that were hitting new highs yesterday....CETV-CROX-DRYS-EDU-FSLR-JASO-SPWR-VMW-WBD and GHM.     There is always the big caps GS AMZN, AAPL to balance the book even more.

November, finally....

So, Thursday's drop is the kind of action we should've gotten yesterday?   Perhaps some will say!    In all fairness, people should focus on the sector that is growing and making profit for a change.    It's unfortunate that we live in a world where media plays such a big role on every day affairs, including the stock market.     Today, we had the spin cycle start all over again.  As we said yesterday...we have things to do and that is only trade individual stocks and mute out the talking heads.     In our opinion, whatever things need to be done by those financial institutions,  just get it done and move on.     If you don't relieve the management team that's responsible for the credit loss of their duties, and if you don't disclose in transparency what you've lost,  you are always inviting those sneaky analysts/market pundits to jump on the bandwagon to call out a doomsday scenario.    Things just aren't that bad, we think!.   Take a look at MSFT, AAPL, GOOG, RIMM... and you'd see a pattern developing.   If you are long just those names in your portfolio/fund, you'd wonder what's with this 362 pt drop?    Ok, the names above isn't the entire stock market and they represent just a specific sector, but it is a very important one!  The point is,  if we all move away from the attention of the Citi and Exxon's, there are stocks out there that can be traded higher, with sizes.  Not just traded, but made money on!

The money comes out of a troubling sector will always flow into somewhere else.    This time around, yield is getting lower so the interest bearing instrument won't look attractive.   The only place you've got left is still the equity sector.     That is why we think the market is still going higher.    As we have said before, companies like Citi or Exxon can afford to take a 8 billion dollar shortfall in earning where as companies like Apple and Rimm can't.    Lets just move on with it....We do remain bullish, just understand we are extremely selective at the same time seeking out plays that produce like CETV, GLDN, SPWR big gains in short periods of time.   We are not holding 10 positions seeking out a paltry return from each and then falling hard on big down days like today while waiting for such.  As we've said this ain't old skool market, it's 250 DJIA ...50 NASD +/- days in the hood!  Selective...the right groups/ sectors is the game.

Tomorrow we have the job report and it seems media is playing it again as if the market can go triple digit either way depending on the outcome of the report.    Our game plan is that if the report sets a negative tone in pre market, we'd most likely go aggressive on the long side in the early going.

Some stocks..

CETV,  we've had some nice runs in $100 stocks the past month from GLDN, WBD, SPWR and of course CETV an alert buy Oct 9.  CETV already had am impressive run to $119 and with Wednesday's big dip we couldn't avoid it for a spec buy into earnings as per forum note.   If it wasn't for the selloff prior to earnings , we wouldn't have moved in.   The drop gave some room for error and provided lots of upside if the report was just good as it may go back to highs just off that.    Yes, we don't recommend buying into earnings, but once in awhile the temptation is there for a few shares.   Looking at the headline today this looked like a big miss on EPS, but the market action dictates and premkt it was trading up.     So the idea is to never just judge a book by its cover or in the case of stocks by the headline number.     Let the market dictate and do some digging inside the report and/or listen to CC to get the big picture before jumping in.   We noted some aspects of the report in a forum note while everything was getting beaten up, yet CETV was still strong and only a few dollars off recent highs.  We liked the impressive revenue beat of expectations and took into consideration the EPS miss was in large part to currency translations.     A few dollars here can go pretty quick and after climbing some more it then spent a lot of time eating at 119.50 before exploding to a day high of $126.50.   Yep, thats 7 points from morning note or about 16-17 off yesterdays low.  So on a dismal day this provided some fire power to offset a lot of the gap down loss.    At this point, we're resting CETV and as with the streaky GLDN's WBD types, we'll look for another entry down very soon.

PSEM, this is a stock which came out with a pretty nice report the day a few days back.   We like this name for the fact it's in the technology sector.   It also did extremely well in Thursday's environment.    This is a fresh name that currently sports a 93 95 IBD rating.    We will be getting more aggressive in trading this one tomorrow.  Note:  NTCT is also in play for IBD and as well as SIMO potentially.

LFT, based on the trading today, it looks as though it put in a short term bottom today.    There's strong reason to believe that any weak hand who's holding this one would've been shaken out today, as evidenced by the drop around 2 o'clock.    Toward the latter half of the afternoon, it looked as though there's a bidder or two sat there and scooped up all the shares that's available which inevitably caused a rush to the upside near the end.    This isn't to say that this play is ready to bust through $30 and beyond right away but we are very encouraged by its action last couple of days, given the circumstance of this market.

STV, does anybody feel there's just a magnet at $38 for this stock?   The company announced that it's releasing earnings on Nov. 15th and we are thinking there's a high probability of an earning run prior to that.  Notice the last minute finish as it climbed and actually hit $39 before some fancy footwork a few times to get the final trade back to $38 even. 

GA, in terms of profitability, this is probably the most profitable Chinese IPO we've seen in the recent history.    This also explains its giant offering of 57.2 million shares.    We are putting this one on watchlist to trade as it did extremely well relative to the market action today.   Given the size of the offering, the action looked pretty impressive.   Just don't overdose on all these China names that are fresh.

Some notable EPS to investigate, potentially watchlist this morning..NRG, ATRO, NTLS, ATNI, SWIM, GFIG, HAIN, MR