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DJIMSTOCKS- since 2006 - Toronto, Canada/ London, U.K

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Entries in CRNT (7)


So it's another meltdown....

Being a trader in this environment is definitely tough.   This has nothing to with the fact whether you have 20+ years of trading experience or not.  It's simply tough out there.   Ok, lets rephrase it, it's tough for those that are actually "trying" to trade this market.   If you have been on the sideline the last little while, you can literally laugh at this in a comical fashion.

Basically, market's short rebound since yesterday which carried into this morning, got severely rolled over.   We are using the term severe because it really felt that there's just no hope in sight, to trade (long side) out of it.    Of course, all market sell off feel that way and this time is no different.    The "smart" way again is to sell into market's strong open this morning and lock up whatever the profit you've been carrying 24 hours ago.    In our opinion, we don't even think most people had that many profitable positions to begin with to sell into the morning strength.   More than likely, many people have used the morning strength to let go or lighten up whatever the losing position which they weren't able to sell during last week's debacle.

If last week's sell off was due to some worrisome news on potential sub prime fallout, then today we tasted a dose of reality from that fear.   The culprit is AHM and we are sure you must have heard of it by now.     Without needing to analyze the actual effect this can bring to the financial market and god knows how many other companies in a similar situation, we just need to realize how severe and devastating the mentality is among the market participants.     Yes, it can get much uglier in our opinion.   Coupled with one of the worst trading months coming up, we can get fairly rocky within the next little while.    So basically, this comes down to the question, is this market worth trading?   In our opinion, the market overall is not playable.    Trying to time this market movement with sector leading stocks just don't work unless you have deep pockets and a heck of a long term perspective.    To us the little guys, we just have to do what we know best in a situation like this.   We stay put!  Save money.   This doesn't mean that we'd lock up our computer and go away for a long while.   It just means that we are going to be very very very disciplined about our stock selection and setup.  Cutting the number of positions and sizes down to bare minimum is simply the way we go here.     Think of it as a challenge to us the professional traders.   

Some stocks recently noted...

CRNT, for an hour or two, this play reminded you what was going on earlier last week.   Yes, it's only Tuesday and already people are pushing for an IBD run-up.    We are following this one closely to see if there's enough interest on this IBD thing, it may just ignore the overall market sentiment fo the time being.    That's a big if, though.

LULU, this is a recent IPO we started playing off the UA earnings.   Again, when the market sells off hard, you pretty much want to stay away from everything.

Shippers, don't be fooled that this is the sector worth holding onto.   We think it's better to take some profit or trade them in a very short term fashion rather than waiting for them to get shot down like solars.   Momentum stocks can suffer pretty dramatically when overall market gets sold off.    Relative P/E on these don't mean much when they all have pretty much climbed over 100% last little while.

Solars, all eyes on FSLR eps tonight and AH result isn't very encouraging.    There's also a secondary overhanging this stock and we really don't want to speculate what the deal makers going to do if the stock gets sold off hard.    Basically, if FSLR gets sold off hard tomorrow, there's pretty much no point playing any other solar stocks. 

..just to bruise some more, this came out AH...The Wall Street Journal reports BSC already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 mln in mortgage investments, according to people familiar with the matter. The fund, known as the Bear Stearns Asset-Backed Securities Fund, ran into trouble in July and has refused to return investors' money for the moment



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. 


Volatile but better action...

We have gone through many volatile session recently and today's just no exception.    We can honestly say that nobody that we know expected  smooth action post Fed Decision.    Despite of the fact that we closed well off the highs off the day, but we also closed well off the lows.    More importantly, we closed firmly into the green territory and that's somewhat reassuring.      At least the breadth is much better today compare to yesterday.    We have been concentrating on some of the familiar names most of the day and carried some position home for a change of pace.

Here are some plays...

MR, this old play came out with pretty decent earning last night and we managed to play some middle way through the day.   Again, this one is from the medical sector and the it hasn't taken alot of damage during the past couple of weeks.   This is a strong sign and today we just got an excuse to get on board some.

CRNT, from the look of it, this play is not over by any means.   It may have a pull back here and there but the further away it moves from $15, the better trading action it gets in our opinion.   

LULU, we chased some of this one today as it cleared previous high pretty convincingly.   We are going to be flipping this one very aggressively as we believe taking short term profit is as important as getting in a good entry on it.

LDSH, this one also cleared it recent consolidation range pretty convincingly today and with the help of this market, we think this one can get some serious leg under it.    Of course, just like everything else, market behaviour is the key  here.

LKQX, given its usual churning nature, this one actually did exceptionally well today.    We aren't chasing much up here but in case the momentum persists, we'd be there without hesitation.



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.




Eyeing the range...

Regardless what comes at the newsfront, we believe alot of traders would be eyeing last week's high and low as the sticky point to trade.    Unfortunately for traders, those sticky points amount to almost 500 point range on Dow and about 100 point range on Naz.    Such is the life of traders and this is what we have to deal with.    In our opinion, this range bound trading can last a long while and we have to get ready for it.

Today is the first day in a while, well it seems like in a while, that we've seen less volatility from this market.   This is a good thing and less volatility definitely gives confidence back to traders.    The more orderly the trading becomes, the better looking chart setup we'd get and better probability comes out of each play.   Well, so far we can only hope that is the case and we'd get some more opportunities to trade.

here are some interesting plays we are looking at today...

CRNT, after some very volatile trading in the past three days, it seemed to settled in somewhat today.    Good thing for this one is that it's now back above 9 ema and above $15.    How firm is this price?   We don't know at this point and we'd have a pretty good picture next couple of days to find out.    What is worth noting at this point, however, is that the play doesn't seem to be finished.   As long as there are crowds willing to push it for that IBD100 listing, we can certainly take advantage of such case and trade a point or two out of it.    The most important thing here though, is not to get greedy and remember this is nothing more than a play.    This one looks to be at a pretty good range bound between $14 and $17.

JST, we noticed the earning release from this one in the morning and couldn't help but started a small position.   Well, at the time both indices were well into the green.    What we like about this one is that it held on to its gain and even attempted to run up even near the end.    Its earning didn't seem too bad to us either since both its revenue and income are at the record high.    Of course, this one isn't new to us and if it moves, it can really move.   We are putting this one high on our trading list at this moment.

STAR, this one seemed to enjoy the day far better than many other stocks.   We like the kind of business it's in and the fact it broke out into a new 52 week high is also a huge bonus.    We got a starter in this one and will trade accordingly.

WX, this is almost a brand new stock.   It only traded for three days and again we think this is the kind of stock that may not be affected by what's happening in our financial market these days.   The co. of course seems expensive in terms of valuation but really we haven't found one recent IPO that's trading at a reasonable price level.    It's all about perception and as long as "the crowd" likes it, we'd play along with it.

BIDZ, perhaps it's our bad that we didn't notify everyone that it's releasing earning report tonight.   Well, guess it's ok to slip one through once in a while.    Company came out with earning and forward guidance after the close.   We actually like the number and its guidance.    What we want to point out is that another company NILE has enjoyed lots of success with its model.   There's always the possibility that this one is gaining some good growth in a big market, even at the expense of others.     If it wasn't for its earning report tonight, the setup looks great.   We do have to see if it gets run up tomorrow or not and reaction is really unpredictable at this moment.    Basically, keep a close eye on this one.

FCN, finally, after some much needed pullback on Friday, this one again regained its footing today.    Perhaps couple more consolidation days and we can get another strong runup going.


Tug of war

Given the amount of points market has risen since the low of last Thursday, we think it actually did pretty good today.    Volatility has eased quite a bit and it seems there are willing buyers out there, on selective stocks.     Once again, we had some trading opportunities from some recent names that looked very interesting today.

VMW, it seems that there's not a day gone by without some sort of action from this one.    Because this one is so new and the momentum is still very strong, we literally just have to rely on 5 min. chart to watch for a reversal.   Action is definitely one of the fastest paced we've traded in a while.    We bought back some and added some near the end.     If a morning pop comes, we'd be willing to part some shares.

WX, ever since this one IPOed, it constantly reminded us of that other Chinese medical co.  MR.    Sure, the business is entirely different with these two companies but the trading resemblance is quite similar days after their IPO.   Top top it off, both had an awesome IBD eps rating to start.    We are trading on technicals only up until today and we will watch any further development to see if it can pick up any momentum like other IBD related stocks.

CRNT, speaking of IBD, this former IBD #1 stock is still live and strong.    Tomorrow comes a big test of $17 and we think if it breaks out clean, we'd see some quick upside.    Again, tomorrow's Friday and many traders may not push it too hard and as long as it stays up here for IBD, we can all leave it untill next week to try for a meaningful push.

ARCI/DOCX,  many of you may not even remember these two cheapies when we alerted a while back but they both had a fantastic day, in their respective way that is.    The trading in DOCX may seem iffy but it goes to show that sometimes it's worth it just to park a couple shares in these kind of stocks as long as they don't break down. 


DJIM #35

If you were told a week in advance where the stock indices would end up, what would you have done?   In other words, what stocks would you have bought or sold in anticipation of this move.   Frankly, we wouldn't have guessed right about any stocks even if we were told the indices would go up this much.    Instead, we just had to rely on our instinct and take cues from daily action.     Everyday, things can change and moves can be unpredictable.    This is definitely one of the toughest trading environment we had to encounter last little while.    Sure, at the end of the week, we can look back and see how easy all these plays would've been called and how everything just made sense the way they behaved.   So was it that obvious?   Lets just say, every one of us would have a different version of answer to that.

The fact of the matter is, despite what may seemed like a good week for many of us, we still played very cautiously.    We try not to out read the market or outsmart the trend.    We just stuck to a simple game plan.      We look for plays that have relative good strength and load them when market is in good momentum.     We lock profit constantly when the market looks directionless and buy them back when the market looks stable enough.    All in all, we simply stuck with a group of stocks that stood out from the crowd.    That, to us, is the key in trading in this kind of market.  This isn't to say this strategy is fire proof and can net you a crazy return.    To us, this is just the safest means to survive in this kind of unpredictable market.

In terms of crisis management, we seemed to have gotten less news(bad ones) from the market last week.   This definitely calmed down all of the market participants somewhat.   However, this doesn't mean that it's the end of this whole subprime and credit crunch saga and we are safe to move on.    This market still needs some strong test.    The kind of tests we are referring to are the "swallow the bad news" kind of test.    Basically, we wanted to see how this market copes with another round of subprime or credit crunch related news.    If by then, the market seems to absorb the news in a good way and focus more on the earnings side of things, we may then be able to expand our play list into other area and increase our exposure.     Basically, we just have to be prepared for alot of unknowns and everybody has a fair chance at this point.  Tthis is why we love this gig!

Now onto some plays...

WX, this one didn't make it to IBD100, in case anyone cared.    We don't think this is the concern at the moment.   What we notice is that this one is sure on alot of traders' radar as a hot play.    We like this fact!    This company is in a unique position to take advantage of its business.   Basically, nobody can compete with them in terms of cost, the cost of doing business that is.    As far as its business goes, you can simply read up the latest IPO filing.     Right now, we are playing this one like any other hot plays.  It means we are taking profit as often as  going for re-entries.    The play isn't looking tired in anyway at this moment and we hope it'd last alittle while longer.

VMW, perhaps we should just simply buy this one for long term, like back when Google IPOed.   But we then realized there's only one Google and this one is called VMW.    There's alot of expectation out of this one and institutions are getting involved in a big way.   Sure, we don't think its business can grow like Google but that is of no concern to us at this moment.   This play still has legs and we aren't playing this one casually either.

DRYS, this one just looks very tricky because it's at its previous high.    Keep in mind, we aren't talking about the earnings or fundamentals here and there's nothing wrong with that.    We are simply unsure if shippers as a group can gain a new leg up.   We don't believe DRYS can go up on its own without the whole sector following behind its leadership.   This is a big if and we have to keep it in mind constantly.

CRNT, who'd thought BIDU would take #1 spot on IBD100, instead of this one?   It's irrelevant at this point.    We got a feeling that this one can start a new leg from here.    Alot of this speculation hinges on the performance of the index, however.   Unlike some of the other plays here that trade less dependently on the market, this one seems to follow the indices better.

BCSI, even a monster needs a rest sometimes.    Of course, this one has the kind of float that reminded us of many great plays in the past.     We'd be alittle more careful trading this one.