...Viva Las Vegas...

.."All you need is a strong heart and a nerve of steel" ...How'd Elvis know that's what you need to play this dog days of summer game in late August?.   It's simply a game gone awry with attendance hovering below average and so with little volume, the movements are exaggerated in both directions.   This played in to our game plan for today, rest of week, we felt it was overdone yesterday and with a little intervention it was possible to see your holds shoot back up.  After the street suffered its worst day of losses in about 3 weeks, it was the same banking sec leading the way after starting the shakedown yesterday.  Only this time we had the energy/ semi kicking it up as well.   If you got these 3 sec's going, you got yourself the beginning of a nice move.  A move that was aggravated to the upside by a little intervention as whispers of Bernanke bark from early in the week hit the wires around 2:30pm....."act as needed" ... Ah timing, how sweet it was.  We thought we'd rebound, but the thinking was it would be leading into Bernanke address Friday that many are pushing.  We think it's a false push as Bernanke will avoid the juicy stuff and the market might not re-act so nicely as many are being given false hope something will be revealed.  There's a time and place and this shouldn't be it.

As for individual stocks...the snap backs mentioned last night continued and ones we noted hanging tough before being sliced and diced late in the day yesterday were the ones leading the way...

DRYS, with the BDI making new highs yesterday, it was almost silly to watch it slide yesterday . But..then again, this is DRYS and these moves are nothing new.  Today it pumped up 8% and finds itself at highs.  Will it hold this time?. 

GLDN, this is about 10 points since the 15th when we started covering it again after it signed a deal with McDonalds in Russia.  It's closed just under a NCH and with VIP, MBT reporting soon, we think it could go higher if these Russian buddies report well.  The dates are in the earnings link.  There is still a few days to those reports, so we'd watch this top area that has been touched a few times in recent history for now.

ISRG, finally!..after banging its head in the $212 area for like 5 or 6 consecutive days, it finally pushed through end of July high close. Any other time of the year, we'd say the volume was not convincing for a breakout.  But, considering its late August and dry everywhere this might be enough to push it further.

WX, continued its bounce of 9ema area early on, but the move never materialized further when the market kicked in.  One other disappointment was the action in VMW considering the technology sec was grooving and it opened $72's..  Sometimes the popular kids just don't go to these lame summer parties.  We think these got their own game going and today they just let others play after partying for days!

LDK, yes, we watched the FSLR, JASO % moves, but the one that stands out to us is LDK here.  If any of these solars should have moved the most, it was LDK as it got another 500mln supply gig.  The others just had recovery bounces.  The LDK chart looks best out of these and that's what we're going with into tomorrow's trading day.

A few other names familiar names we're trading into tomorrow are CRNT, PCR as they sit 9ema area.

Last  night, we said despite the beating, most DJIM plays were above the 9ema and therefore in play.  We saw that potential play today and now it is better as many are near or at highs.  If the market has room to go higher, this where we want to be...stocks making NCH's

DJIM #36 2007

After all the volatility, turbulence in August, the indices finished a shade of green for the month!.    Hard to imagine, but with the needed intervention...bark by Bernanke and Bush late in the week to show we got your back....it was able to pull it off.    The futures boomed pre market off the Bush news, even though it has to do with a very small population.  We opined here last week, we thought Bernanke would not offer any more up and that was the case.   But, it did reinforce his whispers from earlier in the week.  This led to our early alert by 10am to take some profits off the table as we used Bush instead of waiting for Bernanke.    So what happens now?.  Well, why over analyze, just go day by day as August proved.   We don't think the sub prime tree is finished being shook and we expect a few bad apples to fall down and shake up the market here and there.   But...with the summer holidays finished, we think a few deals will come and get us through September that we can then follow through to take us to the late year months that are always considered the better, if not best trading months.   We aren't looking for 1-2 billion deals, we are looking for the 5++bln deals the market will take notice and then feel better about the credits markets.  There are plenty of healthy companies and those willing to give cash to them or for them.  Even though we were reducing the size of our positions and sold off all of some late in the week, those names are the names we will come back to.   A possibility for early in the week is of more momentum.... if you believe many are coming back to their desks and will be playing catch up early this week...bankers, investors, traders...either trying not to miss the market intervention on the long side or short covering.  We'll know soon enough....

In regards to recent DJIM closely followed stocks....it was a big week for many and the late week action provided an extra push and made some of the stocks a little extended and worthy of taking some cash out of them.    We liked seeing many break to new highs,  but we don't doubt some might retrace close to their breakout levels.  If the market dictates chase, well...we'll just chase..no harm as we've protected ourselves and got more to use on them if needed.

DRYS, last weekend we highlighted DRYS and the sector in an alert.  Simply, we had an index (BDI) making new highs while the rest of the market was in recovery and off highs.   Considering how closely trading NCH (new closing highs) is on our priority list here, this looked like a good place to be heading into last week.  This premise played out during the week as DRYS was one of the best to trade out there.  Low 63's to 72 on the week.  EXM , another name noted then also performed great as it also played off an IBD piece.  Their market is very tight, prices are rising for dry bulk vessels day after day but it does not mean we are holding them day after day.

ISRG, a  name thrown around here lately from $111 moved to $120 after taking out 1 month highs in 113, we were happy with that move and so it was one we were parting with until it gives clear indication/ volume of breaking out further.  Again, we after watching for better volume to keep this a sustained position and as of Friday it still wasn't there.

GLDN, we noted its recent tops here last week and after Fridays nice gap open, we'll watch to see if has the heart to move over this level that it has banged its head against twice before getting back in.   It did get a price tgt increase late in the week to $86 by one firm.   Now VIP has reported excellent earnings (a potential suitor of GLDN) and MBT is next line to report.  So, keep them on watch together, they usually work holding hands. Thin ROS might also come into play again.

LDK, it took its time to catch up to the solar movers last week,  but Friday, it tacked on a big day and didn't let us down for mentioning it as our solar play for the week in Wednesday's Journal.  Last two days, mid 45's low to mid 51's.  The DJIM methodology has always been to play stocks making new highs or very close to such.  Even though many solars were having recovery bounces, we preferred to play the safer bet in our view. A stock at highs.

If looking for some stocks that are not extended like some of the ones above might appear, look to other DJIM names we haven`t called out lately since earnings, such as FCN ARTC LDSH UA JST that have lagged...that`s if we see volume and continuation in the market, of course. 

BCSI looks very ready.

VMW WX PCR CRNT MR CUB continue to be tradable day after day and always near the top of our trading list.  BPHX continues to be a nice and popular 'ride' from our forum trader participants.

Also AG stocks came back into the picture after some USDA crop progress numbers released last week. Two recent DJIM names KMGB, TNH were a couple of the big winners...so you might wanna keep a closer eye on them heading into the week.

Trading on short term memory...

For a good while today, it seemed like we are actually trading on the heel of a very good summer.    Well, for some, they may very well just had a couple of good months.    We can only conclude that traders these days have a very short term memory.     This is neither good news nor bad news and we simply have to adapt to mindset of the majority.    For those of us who do rely on historical trading data going further back more than a couple of weeks, we definitely are in much better shape now than a week ago.    Market was tested severely last week and held its footing.    It looks more and more likely that we may get some volatile sideway action until some major news or catalysts that can propel us into another range.   Well, as long as market behaves in a somewhat predictable manner, we as traders can take opportunities as we know and profit from them.

Overall market aside, it's still about individual stock selection.    Basically, the recent playable action is consisted from the Shippers, Solars, few medical stocks, and a couple of oddball techs and misc. stocks.    Basically, we had a pretty big list of stocks to work with and it doesn't look like the list will shrink in size any time soon.    How do you stay ahead of this game with such a powerful list of stocks then?    If you have lots of capital, diversify and play them all and weigh more in those that have the best relative strength.   If you have small capital, be flexible and stay in green stuff at all time, and move out of those that are in sideway action and jump into those that have strong relative strength.        If you haven't been taking advantage of some of the recent runners, perhaps you should go over the priority of your watchlist and review what you could've done differently.

DRYS/EXM/TBSI,  both DRYS and EXM had some really nice early strength that weakened toward the late trading.   We'd be careful chasing these ones in sizes at this point.   The pullback on these can be quick and painful if you aren't careful.   TBSI, however, paints a different picture and it looks as though it's ready to break out.    Unfortunately, the group movement can overshadow any individual strength in this sector.   We'd look at leader for trading clue.

LDK/FSLR/JASO, out of all of the recent solar names we'd been trading, LDK is the only one that's been making new 52 week highs.   We are trading this group on a day by day basis.   Basically, we'd carry some into a good close and flip in out intraday.

MR, we said last week that we are looking for $35.50 area for a breakout with above average volume.    Obviously, we got that today and we added some aggressively.    It's been a long while since this play had a multi day runup and we are crossing our fingers this time too.

EJ, basically, we were looking for a break of $19 and a close above $19.50 to confirm a good breakout.   We got that today and we did the obvious.

WX, earning is coming out on Thursday morning and it's more than likely to be good.   However, we aren't taking any chances and we'd reduce our exposure to a bare bone position before the report.    Still, even at the closing price today, it's been a great runup for us since we started trading it about a week and half ago.

Other setups we like today and chased a few with include ARTC, NVT, and WBD.    There are quite few other stocks that showed good strength and are worthy of a play.   It's very much dependent on how many positions you'd be able to handle at one time.    It does take some experience to TRADE more than a dozen stocks at same time.    If you aren't there yet, just make sure you trade the ones you are most comfortable and most familiar with.

..wild swings or..

was it just our book of stocks?lol...you can't really tell if you look at the tight 20pt range the NASD put in, but the wild and choppy action was prevalent in DJIM stocks from the open.  You could have sold out your book of DJIM holdings in the first 10 minutes of trading and called it a great day, instead you might have ended up watching your gains quickly evaporate before recovering very nicely as the day progressed.  Unfortunately, unless you had pre set sell orders the chances are slim you could have sold a good portion at the higher prices.  Since , most are not in a position to trade by the minute, you just have to deal with the choppiness.    As we just said in yesterday's journal, this choppy action is a very good environment for trading, recycling the stocks listed here....

WBD, you're not going to find many more so thin and volatile to trade then WBD.   Already having a nice move since the premkt alert Wednesday when it was trading $102-03, it acted quickly to our strategy here,.."traded in a thin range, consolidating action we hope after the earnings spike.  A stock over $100 .....trading in a 2 pt range has attractive qualities if it breaks the top range".  Nothing like a gap to break that range and get enthusiasm started for a stock looking at weekly highs on the charts.   Momentum quickly grew and you still had plenty of time to catch our alert $112 level to catch a ride to $118+ high if you were not in already.   We will like this very much again if it breaks the 116-118 levels and holds, but at these prices we have stepped out as the possibility of hitting some psychological resistance was there if you look at the daily chart.  This is the same prospect we noted on GLDN after it hit the recent double tops after another nice run.  We want confirmation on the close for these plays to hold a NCH (new closing high), preferably with volume before we look to play the potential nice leg up that exists for both.

VMW,  it's good to see it's back to it's old self and trading with the momo that made it stand out here recently.  If you look at the daily chart, you will see it had support and usually bounced off the $66.50ish. As the days dragged on it found itself at that price with the 9ema caught up to it. You can almost call it a trap of sorts as Tuesday's morning tone made it gap down to $64's. Well...that pretty well cleaned out the weak hands. Once the stock recovered to above the 66.50ish, it was clear sailing.  You could see that by around 11:30, the volume move from that level to $68.    It continued on scored a nice close.    Again, we look for momentum here and start thinking of recent highs as a possibility soon.   We like this stock a lot as said before and not only for the trading possibilities it gives, so be patient and if it doesn't participate in rallys recently..remember this from a recent Journal  on Aug 29th. instead of asking us what's wrong with the stock..."WX, continued its bounce of 9ema area early on, but the move never materialized further when the market kicked in.  One other disappointment was the action in VMW considering the technology sec was grooving and it opened $72's..  Sometimes the popular kids just don't go to these lame summer parties.  We think these got their own game going and today they just let others play after partying for days!".   You only have to look at the flight of WX since that day and we hope yesterdays action in VMW is the beginning of a new trend up as well.  

A damper to this VMV move early on today might be MSFT product launch into the 'virtualization' space announced after close, but the piece of software is many months away and with MSFT's delays who knows when that might be.   Life goes on for VMW in the meantime with everybody wanting to do business with them.

WX...it held up reasonably well premkt off earnings, even trading at the previous days close before the report.  At the open it was a different story as it sank to high 25's. Yesterday, we said look for 9ema to possibly come into play and wow it did ever as the stock spiked back over 30. Hope some of you were watching and flipped 3-4 points quickly.  Action like that gets our attention and so we will keep it at the top of our trading list.

EJ,   it looked positive premarket and at the open but never recovered as most of the other plays after the initial sell off that occurred just after the open.  E-House won't be long in the DJIM house if it gets hosed down like that again....Ironically, it is chasing the easy money and not buying the CUB's that eventually calls for days like that as journaled yesterday.  So suck it up and have your anti- nausea medication next to your trading platform if you want to play these volatile sorts.  Sometimes we feel we waste our time on this Journal as seemingly some just speed read through it and then ask us what we are doing with EJ as it was coming off day's high.  These questions are always from someone who buys at the top of a day like yesterday, but on the other hand some on our forum do make notes in their trading notes and recalled EJ as a play mid 19's ....."EJ, this is a new play we added to our watchlist today.   Although we don't think it's nearly as sexy as WX, but being one of the recent Chinese IPO and the way many Chinese ADRs have been behaving lately, we think it has a chance to runup some.   The technical looks good and there's a test coming up to see if it can break out of $19.50, which is around the closing price on its IPO day."  Monday, Aug 27th.     

Anyways,  we'll see what today brings to it. We've already seen it bounce nicely off a smaller sell off Wednesday and we're basically back to where we started with EJ on DJIM.   This has similar characteristics to WX and others we have played here, so if WX recent run and its pop off the early selling yesterday is any indication then BJ is hardly going to become a dead play in one day.   Especially, if you consider its business and that the Shanghai composite closed at twice the level at which it started the year at.

GRMN, gapped but never saw that price again.   As long as it stays steady and tech performs well, we will stick to it.

DRYS/EXM/TBSI...we'll just repeat yesterdays and 2 weeks worth of blab on them..."you can't ignore a strong sector"

MR LWAY CUB JASO ISRG -CRDC round out the top of the trading list going into the trading day.

LDK coming off highs is paying 1bln to FLR. This might take a positive spin today as a confirmation of those 500mln deals going through.

..Blue chips not small chips....

Thursday's action just added to the imbalances, subdued action we've been complaining about since Tuesday.  Adding to this boring action was a spark to the multinationals....blue chips..  Sorry, but a Big Mac in a GM is not our game, so we are left watching this grinding action amongst the small caps we've traded so often.   We've basically packed it in ahead of the weekend, maybe the Fed meeting.   The only thing we are doing is being patient and not trading for the sake of trading.  The time will come soon enough that plays, set ups,  emerge and you'll be happy you did not enter or chase this week.   As we discussed yesterday, we are not going after what looks like a break intraday.  Instead, we are waiting to the last half hour to see if what had potential midday has it at the close.  Time after time, what you might have thought was a possible good idea intraday turns out to be a stinker at the close.  Just too many head fakes, false breakouts out there and more than a few of them are listed on the forum. 

Our queasy feeling from Tuesday's action was nothing more than caution and it has saved us a few dollars in the past few days and still might more.  The shippers...DRYS, TBSI have dry docked...the solars are not so bright...LDK, FSLR giving up 7-8 pts in one day off an upgrade....and the Chinese stocks are not living up to the Shang.......VMW has never seen the heights reached since the first hour back on Tuesday.....Preserving the cash is just as important as ringing the register...you can't ring it later if you're not preserving it at one time or another during the trading year.   This is one week it's been called for.....live with it as we are...Don't stretch a play in your mind into something it is not capable of being this week!

L' Shana Tova!

..what a helicopter drop!

What can you say?....A Helicopter Ben surprise with an aggressive helicopter drop down every chimney!.   Yes...kids there will be a Christmas this year, thanks to Santa Ben.   We can also get a bigger tree on credit!.    Most importantly..your parents will have something to trade into what is the usually the best trading season and so you might get presents under the tree as well!...   To us this is what mattered most, the ability to have a tradable winter!.   It is almost irrelevant if you missed one of the biggest Wall street day's in years.   You only need to look forward and the opportunities this will most likely give all of us.   This was so well orchestrated, the PPI #'s in the morning, the LEH report and then what they are calling now the 'shock and awe'.  But, was it really if you look at all the pieces and how they were lining up during the day.    Well, at least that's the way we were thinking as the day progressed.   Considering our stance heading into this was one of being thinly positioned, mostly because we'd seen nothing worthwhile to trade off the past 5 trading,  it might have come as a surprise why we alerting a buy into GS in the morning.  Not only is it a large cap, but it is a bank(s) that never floats DJIM's boat.   As we say often here, we trade with our heads, but the gut plays a role with the head making the last decision.  Guess we went out on the limb with GS, who we saw as potentially the biggest beneficiary of what we got. Also knowing the incredible up and down volatility that always immediately follows the FOMC minutes, we still alerted an invitation to an upcoming party for the market in whole. We never got the volatility, it was straight up to close at highs of day.  We had the inkling of one coming as the day wore on and us soon as we saw a 50bps -50 discount and a do as 'needed' statement, there was nothing left to do but press the send button at 2:15.   Still...like we said,  it's irrelevant if you missed the whole day or our party invitation.   It is the rosy forward trading picture that matters.   Still, we all knew this was shaping up as a historic day for weeks and it should have had you at the trading platform to be actionable just in case.    So, if 50% were correct on the 50bps, a much lesser % of the .50bps camp dreamed of the other .50 and accompanying statement and so what you got was all camps chasing, covering.....making a record day.   The biggest winners of course were the ones heavily positioned.   That's great, but to us the risk was not worth heading into Tuesday.. Instead, we simply reacted to the days flow and still had a nice day.  Reason being if you are mostly in cash heading into this surprise, you can allot the cash to the right sector, the right plays when given the green light.   You have money to burn!.     If you were invested too much, especially in sectors not benefiting, you might have been stuck in plays lagging with no extra cash to benefit.    Human nature is to wait and not believe your stock is not participating.   Remember, not all get invited to the party, we've been through this before recently with VMW,WX not playing along on nice days.   Today, we if get a nice follow through early...we will be selling lots and lots of yesterdays buys before catching our breath and possibly repositioning.    We've talked about this methodology here many times before and most recently put it to work last Tuesday morning to cash in.

GS, of course you could have played anything after the cut in this sector, but as far as we are concerned it was best to keep adding to the morning buys as GS is best of breed to us.  LEH did a lot to make you want to hold GS into earnings, we will be hard pressed not to hold some even if it goes against our DJIM methodology of not holding into earnings.  This is different considering the turn of events, including the LEH report. We still will take a handsome portion of the profits off and keep some into the report on Thursday.  This surely will present some quick in and out opportunities into the close today as speculating will come in.

EXM, DRYS, FREE when a sector shows strength before a FOMC even if it falters just before, it still should be on your radar as the first possibility to trade into following what was a surprise.    If it tries once, it should try again if the news is good.  As far as FREE is concerned, the market participants just haven't had reason to get on the small float, EPS bandwagon this Q.   It's as if the herd has left the building.  We saw that apprehension early in this stock, you can't really blame the herd as it was on the day of the FOMC.   Maybe, the mentality will change and the herd will remember the possibilities in these types of stock we all enjoy here when it's been fashionable.  There is also a seller that was creating a wall, if you have level 2 you will see him as ARCA and they are not showing how much they have.    Once this is/if removed this might move.  Of course, the sector motion will play a role here.  Many stocks take time to be discovered, especially if the time is not one where traders are scrambling to trade as we've seen lately.    We hope this action yesterday by the FED changes that for the sake of small float, EPS stocks as we head into earnings season, our bread and butter.

BIDU, EJ, ROS these stocks highlighted in previous days Journal all performed well leading into the afternoon. You don't need to chase stocks off alerts here, you have plenty of opportunities to get in stocks after the morning Journals and profit.  Every stock is different, some need to be chased, most don't.    There is something for every type of trader, investor here.   Each one of these stocks is different in its volatility and therefore suitability.    We just happen to like to trade all the colors.  EJ, had a tight .15 cent range, which might signal more accumulation after the heavy activity at $20.00 the day before. Where is Merril with a initiation?. This action we've seen the last 2 days might be the forward to it. ROS, russian telcos keep on acting well, even before the FED note.  BIDU, you probably have taken most off the table. It would be the smart thing to do after the last 2 days.

Best to look over the charts printed here for possibilities this morning.  Be careful and don't be trying to play catch up this morning if you missed some entries late yesterday.  We'd hate to be selling some of them to you.  Santa Ben has given us more time than we could have envisioned to make $....you won't be left behind.

.6 .6 .6%

Guess we should take those % gains from the DJIA/SPX/NASD yesterday as a sign from the devil that we are going to have a down day to follow.  It wouldn't be a surprise, but on the other hand that is what most expected yesterday and we just didn't get it.   The herd was playing catch up and the profit taking didn't hit till quite late in the day.  By this time, we were sitting pretty as we had done as promised before the open and that is, " we will be selling lots and lots of yesterdays buys before catching our breath and possibly repositioning".   The good thing about yesterday is the morning catch up lasted longer than anticipated and it gave ample time to sell and get a price.  The repositioning of the sells really didn't happen as the market slid too late in the day giving the impression a little more selling might continue into today.   So why reload at that stage, is our thinking.  Still, there were some stocks worthy of intraday plays and others worth holding to see what's further up possibly.  Also, instead of adding to stocks recently talked or alerted to the day before like the GS that went to a morning high of $207, EXM mid 48's, DRYS almost 76, BIDU almost 285, TNH to 123 which we sold in the morning...we went went after a MR late in the game because it was making another new charge to highs and because the Chinese stocks is one area that held up the best during the day.....

EJ, is one we keep on holding. Yesterday, we noted possible accumulation. This was even more evident as this one churned and rolled all day in even another tight range.  Either this a forward to ML's initiation or something else, or its just a fine piece of China making a dandy cup and handle.  This is not trading as before when volatility was huge, don't ever forget those days. A shakedown is always possible and don't all get shaky knees if it comes.   We've had a nice week and considering Chinese stocks are holding their own, like JRJC, MR its worth some more time.  As said before, we added back MR and as far as JRJC, we are only flipping it here and there.

LULU, MELI, and even WX, interestingly the recent IPO's had very nice days, actually some of the best out there and we have put these on our potential trading list.  MELI, is a new name here.  It got initiated yesterday and is of the foreign AMZN, EBAY biz nature.

GS, as a follow up to possibly hold a portion into earnings. We got a very nice price/ gain and after MS's report, we'd prefer to stay out and play it in the morning if they announce nicely.  For markets sake , we hope its great and so we can live with any points we might miss.

ICOC,  we'd just like to point out the concept here has always been playing the possibility of "IBD100 inclusion".  The main idea is finding and getting to them early and going big early into the $15 level late in the week.  Remember NGA, GTI, IDSA even SYX???.  If not go back to April, use search and see the prices we started and read up on the strategy.    So, if a stock is already at $15+ on a Wednesday, it really offers us little incentive at that price.   Also, do consider that a $15 stock with a beautiful run has been drummed around and pushed by either other stock forums, hedgies...or whatever and if they use the strategy as us in the NGA, GTI plays, guess what they might be doing here?.  Well, at least we would be dumping to newbies after getting 1-2-3-4-5 pts. We'll watch for now and if we get a nice dip we might add ..anyways, we'll see how it trades these last 2 days and deal with it hour by hour.

At this point, even if we didn't reload our sells late in the day, we'd look back to these names as soon as we see the buying of pullbacks starts in the market.  And it will as any dump will be seen as a buying opportunity for those who missed this move and think this market will be going higher in the days, weeks and months ahead.  Buying the dips in this market will again occur.

..out of breath?

Early on yesterday it seemed like many DJIM plays just carried on Friday's action as if the weekend never came.  We saw action continue in the Shippers..DRYS, EXM...Solars..LDK JASO..Chinese..JRJC,BIDU stocks rolled, Russian stocks...GLDN, ROS had good days and a few like GRMN, and even CROX finally broke to the upside after a long period of consolidation.  Some lasted, some didn't and faltered as if out of breath.  Some definitely felt extended and if anything switching into names just breaking out might be a way to go now.   Basically a switch of asset classes you might say.   On Sept 13, we said a trend might emerge..."A possible theme emerging in our bored minds, even if it this play really never left  is the potential for DJIM foreign stocks.   Primarily, the Chinese and Russian telcos because some might be seeing the US' slowing economy and a faster global economy as a reason to get into foreign stocks.  This fact is just clearer now after Fridays employment figs and some might see it as a way out...".   Have you seem the dramatic recovery of the emerging markets since the low's hit on Aug 13th.  This is mostly driven by the BRIC economies..Brazil, Russia, India, China.  This BRIC index already was up 29% last friday, outperforming the emerging markets as a whole which was up just under 10%.  We definitely can't do all the letters of the BRIC, but trading the Russian and China has been a way to go.  A look at MCSI index will show this bubble like action.  This might be a bubble forming, but the underlying economic and earnings growth is there to support it for the time being and trading the China, Russian plays might be the safer bet right now than the high flying shippers, solars.......

DRYS, EXM..lets' be realistic. The last few days is money just waiting to be taken off the table. Don't forget the volatility swings both ways and when these rest..they really rest.

LDK, JASO, and the solars. We are actually surprised  by the strength exhibited by LDK early on.  Reason being a downgrade came in the morning, but it did come with some good news.  Eventually, the downgrade and the recent action took its toll and it succumbed to profit taking in a big way..as did JASO's run.   Let this action serve as a reminder of what we face trading these high flying shippers...solars.

IRBT, was a open speculative buy alert that ended on a good note. There is a possibility IRBT might be given a 2nd chance for the contract given to another company that sank this stock recently. We'll see as news is impending and that gap looks juicy on good news,  if it gets to that level starting over $19.

With the stocks talked above that show or showed signs of being extended, we'd turn to closely watch the potential in some names that came back up on radar yesterday..GRMN CROX APOG VMW  GTLS  ANW (new..but if shippers falter, this may too), for more trading possibilities in the right trading environment.

a bunch of Yo- Yo's

Before yesterday's trading day,  we noted we'd be trading hour by hour, not a bad idea it seems as what we have is a bunch of yo-yo's day to day..hour to hour.  You almost have to make a choice of whether to hold these through the slips or just daytrade the heck out of them.  Unfortunately the 5-10% down days make it hard to hold till the next day and the daytrading mode might not be for you to capitalize when they pop in the other direction.  We've never been ones to daytrade these stocks, getting in and out of them on a daily basis was not the way we played them to these lofty perches they are sitting on.    Simply at this time, this is seemingly what you have to do with the DRYS EXM LDK GRMN FSLR JASO stocks or just hold through the volatile action and take some lumps on off days.   On any given day you are getting 5,6,7, 8 pt intraday trading range, with the close either at the low's or highs of that day in most instances.  One day they are tepid and lagging the overall mkt and/or red, the next day, they are flying.   Also, it is not so easy to say a stock making a NCH will continue on forward the next day.   Now, you simply don't know what the stocks we've covered this Q will do the next day.   There is only one way to explain the action and that is to understand it as a Q end phenomenon with a lot of hedgies flying in and out of these big winners of the past Q and creating this volatility.  Performance anxiety after a horrible July and August for too many of them.  Probably started padding the books with this China spec stuff and got the wildfire started.   We doubt the timing is a coincidence.   So...you have 3 choices really, one is take the lumps the bad days or even intraday moves can throw you...two...is buy and sell the same day ...or three...which is stay out completely to avoid the stresses of it all and await a calmer trading environment.   There is no reason to point out plays reaching NCH's Thursday,  you're most likely rolling the dice with most DJIM plays into the last trading day of the Q, even with less volatile issues like MR EJ.

Anyways..be careful today as the funky stuff will likely continue...either try get jiggy wit it on an uptrend or just stay out...

AZZ, an original DJIM play is one to possibly trade off today following earnings. $36 premkt.

..Boy Scouts

We welcomed a surprise Fed minutes stimuli in yesterdays Journal to get us out of a meandering market place and we got it good!.  Well..pretty good as the volume still sucks out there.    The policymakers acted like boys scouts in their last open committee meeting as all agreed.   A united group they stand.    As much as anything this shared analysis, therefore a determined effort by all on the correct response provided the kick we needed, included in this was Poole's comments that for once didn't rattle the markets.    There were no differences as earlier and this was probably the most important factor seen by the big players.   Equities simply rallied as the FED did not see broad based weakness in the economy and the market said let's get on with it and put the credit squeeze behind us.     A few M & A deals were overshadowed, but this was also a good sign.   Again, as discussed in the weekend edition of DJIM# 41, good trading is a case of being in the right stocks that would potentially move the best when the market gets a lift and therefore gives a lift to your stocks on the good news. ..."....Simply,  if you had the right stocks the probability was they would be the ones that would give the strongest day.   You have to feed off good news and use the lift provided by news to lift your stocks.   What stocks will be the beneficiary, which have the best chance of catching volume???.  Always ask yourself.   We should all know from the group of stocks we cover".        If you have your hand in these closely monitored stocks you'll know what we mean...starting with...

DRYS TBSI  EXM and the secondaries noted yesterday premarket ESEA/PRGN.  All up 5-10% on the day with DRYS the volume monster.  It was already a good day for all of these before the minutes gave them another round of kicks higher.  The Baltic Dry Index the gauge of freight costs was toying with the 10,000 point level.   The demand from emerging markets is incredible with port congestion in many a country.  The capacity is drained and these boys can kick up rates.   This is nothing new as this has been expressed here constantly, including yesterday.  A possible good sign is other smaller plays are participating in this last binge buying and it all started with the, ..."The shippers, notably DRYS TBSI moved off 9ema yesterday. EXM should follow if this small reversal holds" noted Friday morning.   A helluva run from that short term support area of the 9ema.  Maybe this FREE can catch on if the micros piggyback action in recent days continues, unfortunately, that bloody ARCA on level 2 is still on the ask and not showing his hand.  Once removed this could really move just off its tiny float. 

GS,  if you want a barometer for this market lately look no further.  The drift, the lull of fence sitters was evident in the action of GS proceeding the minutes.   Interestingly, we thought this was setting up to hear a clue of more interest rate cuts in the near term to drive it higher yesterday. Instead, it fed off the news and took a different approach as to signs the boy scouts gave.  To gauge the minutes reaction all you had to do was to watch GS's reaction.   It was evident instantly, we might be in for a good stretch run late in the day.   If we had to pick a large cap, we're glad GS has been a fave here since those recent $190's.

VMW,  recently we talked of this having a shot at 90+, yesterday we talked of $100..what next ?lol.  We're happy to have this as the tech stock of choice if the techs continue forward off good earnings.  Again, you don't need a lot of stocks, you just need the right ones.

STV,  a simple follow up is that it held the morning open prices after retracing to them midday. We'd keep an eye on that level in the short term if breached as a possible exit before re-entering at a later point. Otherwise ...have fun!. Just don't forget there is a market out there beyond watching the minute ticks of this all day.   If STV has you on the edge of the seat because you fear the drops it already has given, take a smaller position.  You don't want to miss other opp's this market gives daily.

A few others from our Journals.....LDK, trade it, flip it..we just won't hold it overnight.   A day turnaround does not make an uptrend in our minds.  Company can say one thing, but a few want to see the independent reports and simply the problem there is not yet solved or the stock would be up much more.     Looks like a lawsuit or two is coming already.     AZZ, maybe closed the gap created by earnings and will act like the earnings guided stock it should be..maybe not.   GLDN,  not sure why this reacted this way to a raising of guidance, this is a low float stock and sometimes you lose sight of that because of the group its in and make more of a move than you should.   One thing to consider is while STV might be the Digital play in China, a huge conversion to digital tv is going on in Russia where TV penetration is at 97%.   GLDN is not a pure telecom play, it is a Digital TV play as well and that will be slowly recognized over time.    CETV, this euro stock was a big winner here before and we took a place in it yesterday as it approaches old highs.     A focus here was creating a new watch list of tradable stocks for our members, over time this list has grown and some might be page on 2 or 3 now as those plays wore off.   As noted yesterday in the forum,  it's good to have past flyers around as they may fly again.   History is no mystery.  If a stock was a fast mover that we once liked, it might be again.    AXR might have been one the last few days, but there is a bigger past mover out there in AMAG $55-72 that has had a great month so far.       FWLT, GHM, GTLS might be ones to stick on closer watch again.

Despite the action in afternoon, volume is still a concern.   A few fell off the fence on to the long side yesterday, but not as many as we'd like to see.   What you don't want to see is a continued divergence in the volume with a ladder walk up in points on the major indices.  This is what we are seeing in the NYSE and SPX stuff.

YII - YANG..

No we're not talking YIN - YANG, we already have an understanding of how things work in the speculative market down in China that has more bubbles than MariaB has in her lips.   We're talking the YII, the Yhoo, Ibm, Intc.   This is in part is what we have been waiting for and soon enough their earnings and their outlook will start to cause everything to happen....good or bad.    Hopefully the YII won't be the start of the YIN, but instead the YANG and we could go upward and strong into the New Year.     Yesterday was just a pure lame trading environment, most traders seemingly stayed on the sidelines early while the few around picked up anything they could to take advantage of the boredom while most looked ahead to today and the week of tech earnings.  This included playing off the noise in good olde Oil, Citigroup..whatever they could get their hands on to create a negative spin.    Simply, we tossed this all aside, it is all pretty irrelevant in the scope of things, the scope of earnings coming up.   As traders our gig is too seek opportunities, no matter where they might arise.   We cannot dwell on things we cannot control such as the subprime, oil highs etc. and now earnings.   There will always be something to work off and if the earnings do not provide the backdrop we love to work with, we will just have to change our tone and seek opportunities elsewhere.    What we have had is an excellent enviro to trade the past month or so, you don't need many more chances than the one you just had to make for a very profitable year.    There has been more than one stretch this year to make your year, most times you can make your profits in a short time and then shut it off.   We have always stressed this if you catch up on your Journals.   So, what we are saying is we could shut it down for the year, but we love this gig too much and want to love it more into the New Year with all of you here.   It is not about greed,  it's about loving the venue and winning in it.   In essence you are competing, a sport of sorts but we are not going to risk our winnings shamelessly if the market hints at shutting it down and only looking very selectively at opportunities.   Yesterday, we had an early probability of a selective play to get us all through the day, it could have got you a nice morning and /or afternoon if you got tuned in early from our Journal....

EDU,  everything we wanted to say about it possibly today, we said yesterday.   We're glad most saw the report the way we did and perked it up two times yesterday. A nice few hours into the close.  If you kept some of the EDU at bargain prices when alerted Friday into the earnings, well then you really did well!.    If you want more on it, a suggestion is to find the transcript (try the yahoo page on EDU) of the CC and learn more about this story.

CETV,  we love these $100 dollar kinda of plays because before you blink they are up 6-7% as is the case with CETV since we picked it up last week.   We like these recent and not highly followed breakouts instead of the daily momo ones that can fall quickly down an elevator shaft and take your profits with them.

DRYS TBSI EXM, yeah yeah..what else is new, just more NCH's and more price tgt increases this am.lol  This story ain't going away heading into the New Year as we've noted before, but after this latest binge run we are more cautious and prefer a pullback to go with a worthy position overnight.  Lets just say, we liked a TBSI more at $50 recently than at $60 now.   In the meantime, we are trading these intraday and feeeding off the morning tone in these..no not in premk, but an hour or so in the day.

Google effect

There is really only one company reporting tonight that matters to us and it is an important one, google!    Well, at least we can say that the results and the ensuing after hour action isn't disappointing.    With google at this price level and people aren't disappointed about its growth prospect and are willing to pay up, this only gives us a clue of the status of this market.    Yes, the big banks may give us some headache like headlines but we already expected that from them.   Banks are capable of taking this kind of earning hit(hopefully one time) and in our opinion will not impact the overall market that much.   This is still very much a growth dominated market.    We dig technology stocks as well as shippers and solars and any other sectors that's considered growth oriented.     To put this in perspective, many participants including DJIM traders believe that there's still quite bit of upside left in this market.   The key, of course, is to realize which stocks are the driving force of this market and stick with them at all time.   It's been a while since we have these many stocks that are triple digit or approaching triple digit on our watchlist.    This simply reflects the kind of activities that are going on in this market and we better be there to take advantage of them.

Right now, the last few days of weakness feel like nothing but a minor pullback.   In this case, strong stocks should be bought on dips aggressively as long as they are technically intact.   There's really only one way to play a bull market, you buy on dips and you buy on breakouts.   DJIM traders have been very aggressive on the long side the last while and we'd intend to keep it this way unless something dramatic happens.

Now onto some plays...

ASTI, exactly one month ago, this one pulled some stunning move and did a double within a matter of a week.   We definitely like to see the similar kind of movement this time around and so far we got a wicked start today.   This move got kick started by the news of insider buying yesterday and our beloved Briefing picked it up today.   Yes, it's in play and it's a hot one!

YTEC, for some reason, it just doesn't feel that this runup is over.   It's looking more and more like it's trying to setup for another run.   We are still holding our position and with the 9 ema catching up, it may just be a matter of days if not hours before it gets going.   It's certainly capable of doing that.

NTCT, this is a stock we've been watching for a few days and we finally jumped on it for a small position as it isn't pulling back from the recent runup.   This one has very good IBD rating but we feel in order for it to have a shot onto the IBD100 list, it will depend on its results next week.

Shippers,  EXM/TBSI/DRYS all had a good day and especially the first two.   This is really about how high these things can go as oppose to when they will stop going up.    We think the only reason that can stop them is when they forecast a slowdown in their business.

Besides all those usual suspects, we also like the action from GLDN, GSOL and ANW today.    Bottom line, keep an eye on all of the high flying stocks on your watchlist, as soon as you feel the consolidation is done, it's almost certain that they can go nowhere but up.  

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.