DJIM 1st Edition, 2007

First of all, we'd like to wish every one of our DJIM members a Happy New Year.     As we are kicking off this new year with our first DJIM weekend edition, we'd also like to thank each one of our members for their continued support of DJIM and making it a very unique and special place to be.

Toward the end of last week, we had a little pullback from some of the momentum favourites from the early part of the week, especially Friday from Thursdays runners. We'd think it has had a lot to do with the fact we were heading into this weekend with a 4 day rest, and also the fact that some of those runners just had a way too big of a run-up in such a short period of time.  This was actually widespread come Friday in the markets.   As you are familiar with us, you know we've been very vocal and adamant about taking profits. This is especially true starting off the year, as it is now about 'new' points and adding them up through 2007.   Some of these plays such as FFHL GROW, just cannot continue their run-up without pauses, assuming they are still in play.    Nothing goes straight up, so bear that in mind, we take profits as the play pauses.     If we don't take profits when they pause, we might be looking at a 10 to 15% pullback and a very useless alert that was once very profitable.  This is very common when dealing with small caps and momentum plays.    Because we never assign any artificial price target or predict long term direction, we never have to worry about catching the top, nor we have to worry about making a perfect trade.    What we are really trying to achieve here,  is to capture every trading opportunity that is presented to us, early, and sometimes very very early!     When you start trading those potential 25%+ gainers early, you are almost ensured some good gains even if your trading skill isn't as experienced as some of the others.   In time though, the more trading you do, a more improved trader you'll  become and better you'd be at mastering this game.

here are some stocks of interest from last week.....

FFHL, in our opinion, this play last week really highlighted what DJIM is sometimes all about, catching the momo early and often.  Most of you have seen it through 2004-2006.  A couple of these plays a year, if attacked properly can make your entire year or at least give you a nice cushion to trade/invest off.    This is not saying that we'd be getting a play like this every week, but when it comes, we'd be there first to give members a heads up.    From the look of its action near the end of the week, we'd be looking for another entry point next week.   At this point, we are looking for $17.50 as potential b/o point with good volume for a possible entry.   So you'd ask why not buy it now if we think it's gonna go back to mid $17s?   The point is, we don't know when it'll happen or if it's going to happen.  Last week, we couldn't wait for the entry we were looking for as all the stars lined up at a lower price.   We just want to make sure when it happens, with a crystal clear sign, we'd be there and play it again.   Judging by its prior move, when it moves, it just doesn't settle for a buck or two.     At this point, we don't want to risk anything and only want to play the "sure" or "high probability" money.   This can be either viewed as stubbornness or discipline, but we just like to think of it as a smart way to play these momo stocks.

HMIN, this one gave us a good pop last week and it looks like it wants to consolidate for a bit.   Unlike FFHL, we think HMIN is definitely a more legit play which has alot more staying power.    You can say that HMIN is a pure China economy play and we like the sound of it.   As long as the trend is pointing up and shows no sign of reversing, we'd be buying on dips.

The Asian markets, ones that are open today were hitting new highs today. The Shanghai(China) is closed but the chance it might play a little catch up is probable when it opens. In this case, DJIMS Pacific-Asia stocks like the above and JST, MR, EDU still might catch a bid early tomorrow.

FSYS, the increase in volume last week, and with corresponding price action, caught us with a slight surprise and we are definitely giving it more attention in the coming days.  

Most DJIM stocks you can review in charts are in the 'hub', they've flown long haul and now are back on the ground waiting for a flight plan to continue on. Basically, most have seen some distribution, profit taking yet look no worse off as most are near their highs.  It is best we let the market find a remedy for the hangover from late 2006.  In the meantime, we will seek out new plays if these are not ready to lift off again.

Breakout action vs. Pullback action

We have touched on this subject many times on this site and older forums.     Today is a typical example of chasing the breakout action.  Here's a trading idea for some of you.   On a strong index day when a lot of things are up, you definitely want to concentrate on the "GREEN" stuff to participate in the rally of performers rather than to anticipate the recovery of the "RED" stuff.   Because when you are debating whether to add on a pullback, there'd be lots of opportunity passing you by with strong gains, especially on a good index day.   When the index is not doing much or down just slightly, that's when you look at pull backs more assuming there isn't that many "strong green" stocks to play.   Always prioritize your trading list and go with the strong beta first.    Just because you bought the stock couple of days ago and it isn't doing much for you doesn't mean that you can't cut it lose and go into something else.  We did that with OSIR today, we're not going to give up what we earned the last couple of days and blow a call from between 25's to 28's.    It's definitely easier to play break outs than to play pull-back.    The strategy is also dependent of your portfolio size as well.   We knew a guru who would hold 200+ positions on a day like today.   For most of us that would just be impossible to manage.   The point is, if you have a big account, you can afford to hold many positions and even consider buying on pull-backs.  If you have a small account, consider going with the stocks with the best action on a daily basis.   There will be a lot of trading for you but unfortunately it's part of our strategy and part of the game we play.   When a stock drops below 9 ema, it simply looks less attractive to us, pullback or not.   When you have so many stocks breaking out, the last thing we want to be doing is to be stuck on a consolidation play and "hoping" it'll breakout.   When it does breakout, we'd be there.     Our mentality is that we participate a run, but we don't anticipate one.   Also again, before we are moderators and writers of this site, we are traders.   We spend most of the time trading for our own accounts and writing-updates for this site is just an extension of what we do.    Of course, our priority is to write and alert/update on the stocks we think that are showing the best action(opportunity) for the day.  Whats there to talk about SNCR or AAPL today?.  The fun was had and now take the consequences of a stock going 14's to 17.50 in less than a full trading day or one going mid 80's to high 90's the next day.   Going through the entire list of DJIM watchlist every day may need full time attention.  Use the charts to help paint a picture.  Maybe we can do a weekly recap on some special requests on some of the stocks we seem to have missed..so far we have not heard back from those public requests..if we don't know the stocks, we can't help.   Now onto some today's movers....

VOL, this one probably overwhelmed the most optimistic traders given its 3 day action.   Again, we are not saying today is the end of this run-ups but it does feel a little tired at this point.  As far as trading tactics, there was a question and answer in the forum yesterday.  In the example you can see how you can take profits around 60 and then buy the strong close which leads to another 3-4 points today. You sold the 51-59's run to lock in partial profits, then buy maybe the same 1/4 back into the strong close and walk away with another 3-4pts today on the full lot you played.  This is what we did reducing our exposure and now are in a wait and see mode with a very slim position.  In fact, how can you not resist taking some profit at this point?..

CCOI, This one has institutional prints all over it today and you can see the large number of blocks traded from its time and sales. It wasn't over at $ 19. Plenty of people buying a stock up $1.50 at $19 early, these traders are not contemplating a pull back, they are buying a ticket on a train!.   Same goes for SNCR yesterday.   The first thought of a successful trader/investor cannot be when and where is the pullback going to be.

MFW, it seemed as little as two days ago there were concerns of chasing this stock in the 26s or 28s.   Well we had a dip and dip was quickly bought on that day.   What followed is today's advance and if you blink, you'd missed it. The pullback you saw the other day off a NCH is one of a few you should consider. You know its a hot stock and a pullback is extreme.  Thats called opportunity. A .50 cent pullback on a 20 buck stock is not a pullback in our book, it's life..life of a stock.

EDU, now out of all of the China based(quality) stocks, we like this one the best today and yesterday.   See, sometimes we don't have to predict, we just let the stock show us the path.   This is actually a new closing high and we believe it's ready to challenge its all time high. Instead of looking for a pullback what has been happening for months is we trade a EDU for a MR and back and forth with HMIN. They take turns it seems and with these names there is no need to wait for a pull back. A move comes and that's when you buy back.

ABM, it sure tried to breakout today and it closed about mid way between the day high and day low.   At this point, we think this is the right direction and momentum is definitely on the upside.

HLYS, we alerted this one late in the day only because this one has had a history of intraday fake break-outs.   Hopefully, and keep our fingers crossed, that this one may get some kind of follow through after today's near day high close.

GLDN, was a rocket again as it climbs with some news.  MTRX is a piece of work while this oil massacre continues, just one nice oil day should pop this higher.

PTT from premarket is a 'trade' like NWK was. If the flow keeps on we'll be there, otherwise we have no love for keeping this long.

Resiliency continues...

We definitely had some resilient action going on today.   There's just not enough force to knock this market down, especially DJIM stocks.     In any case, we feel that a big market move is in the cards to get us out of this range bound trading environment.    At this point, it's almost pointless to speculate which way the market wants to go.   The only thing we can do is to be prepared one way or the other.   Fortunately the indecision of the market isn't deterring some movers from the small cap land.    Here are some few worth noting...

EML, what else are you gonna talk about first? lol    Again, this one followed through very nicely and we added some.    When it comes to an earning play like this one, it's very hard to say where the initial run-up will end and stop.    What we do know, however, is that the first pullback has to be bought aggressively.   How high can the initial run-up can go?   Your guess is as good as ours and we just have to take it day by day.

EDU HMIN,  in the case of EDU, yesterday in the forum we said around $40.50 this is being walked up to the offering price..Well..well,  the pricing for the secondary was announced tonight at $41.50/shr. For EDU, that's heck of a pricing.   We think the recent rise in price in conjunction with this pricing is the fact there's lots of institutional demand for this share offer.   This one is definitely interesting as 7 million shares at 40+ bucks isn't chump change for institutions.    Basically, we like this one again(what else is new), now that the cloud is lifted.    HMIN, simply broke out!   We bought this breakout as mentioned in the Forum after noting on it and we are looking for follow throughs.   Again, at this stage either take the points on moves and wait for a pullback or just stick through the tough days cause it just keeps going higher. You should know how it works by now.

VE,  this euro has been a nice steady performer from 68's and it's definitely not a small cap..lol. Tonight we noticed its been upgraded to a buy by Dresdner in Europe.  Looks like a $77 area target.  Analysts at Dresdner Kleinwort upgrade Veolia Environnement SA from "hold" to "buy." The target price has been raised from E48 to E60.  In a research note published this morning, the analysts mention that the company secured extra revenues of about €1.5 billion per annum from contract wins and acquisitions in 2006. Veolia Environnement is poised to increasingly benefit from its maturing contracts, the analysts believe. These contracts offer visibility into cash flows, which the company can reinvest to maintain above-average profit growth, Dresdner Kleinwort adds. Veolia Environnement has limited commodity exposure, the analysts add.

GLDN, talk about resiliency!!. Just incredible $4 dollar move from 9ema levels in one day.  If you're reading the Journal, Forum..looking at charts you are up to speed and probably making nice trades in this stock.  Believe it or not, this finished 4 cents off a NCH after yesterdays dismal day.  Will it bust out soon or will this become a visit to a potential wall?.  Give us a good Naz and this baby will go higher!

MFW, AVZA had nice days and finished right up there at the highs and we were adding to both along the way.

MDCI, last night we said the action was better than the earnings.  Today, we can only say the action was worse than the earning indicates.  A few things...yesterdays action, especially the close was probably toooo ' good and we probably should have exited the last 10 minutes when the stock had a final big stick up.   Unfortunately, the action by noon today showed we should leave for the time being.   Something might have been said at the CC after the close and for us it's always better to leave and ask questions later.  It also could have been a D grade, likely on valuation.  We don't care much for these as we've seen plenty of stocks shake these off quickly.  We think this one will, maybe as quickly as tomorrow on split day and we will aggressively buy back to add to our original starter.

CGX, we added today to this name as the action was much better than what you saw in MDCI.  An almost identical day to MDCI yesterday and today this one showed it might be the better of the two.

SSRX,  this one is actually a Chinese biotech IPO from yesterday.  Its debut action was not impressive but today's action felt much better.   This is a profitable co. as well and we bought a starter position in this one.  There are lots of IPO's the last few days, we're dipping here for a start around $16.

SYNL, thin stock seem to rule these days.   Earning came out and it didn't take much for this one to move.  We are keeping a close eye on this one to see if there's any follow through.  We have some thoughts on it in the Forum, we are looking for the angles (eth) here more than the earnings to play it in the future.

Year of the Pig!

We are definitely enjoying this first trading day of the Pig year.    Of course, the word Pig in Chinese is usually associated with prosperity as opposed to our association of greed.    But today, we are just enjoying being a pig, in either association. lol      Action is pretty broad across the DJIM land and many stocks gained momentum as the index crossed into the green territory.      Here are some highlights...

KRSL, we highlighted this one late Friday and suggested a possible gap up today.   Well we got a gap up and the stock spent plenty of time above $22 today.   That's almost five point play from where we alerted.    We aren't being greedy here and sold most of the trading positions and left with a small trading position.   If this thing gets further momentum tomorrow, we'll definitely chase it but with a controlled pace.  The play as noted was to take advantage of a potential gap we thought we could already see in the $17's Friday being formed....How?...big fat crystal ball!..lol...okay more like a gut of experience.  We did give out the same trade in EFUT, FFHL for gap po'!.  Sometimes its not the length of stay but what you get of it.  If you can get 3-5 pts in 1 day of trading, you're not going to risk it the next day(s).

KBW, we were also surprised by its earning and thought it just seemed to good to be true.   This financial company IPO'ed not too long ago and currently have 4 analysts rate it as a hold with low estimate going forward.   This in our opinion will sure change as analysts will have to raise their estimate based on its report today.   The stock also has a very small float and financial stock in this market cap range always look attractive to us.   We are gonna be trading this one higher.

HURC SYNL CGX BW TRT,  all these recent earnings play have enjoyed some nice follow through and made new closing highs.  FSLR FCN are two more we are trading but have run out of space to discuss lately.

EDU, this familiar one which priced its secondary has broken out today on pretty good volume.    We chased some and are keeping a close eye on any further strength.  If this wasn't enough, recent Russian DJIM stocks made NCH's VIP MBT and GLDN is right there.  This is why we started a hit/hold list so your list starts to resemble ours and we all recycle when the time is right.   At this point the lineup at DJIM closely followed is a World Series lineup and there is just no reason to alert/ forum recent DJIM plays like these.  Hopefully you've listed them to trade or still have them in your books as holds. 

ONXX MFW USAP CSV SNCR, these familiar DJIM stocks all have enjoyed some nice gains and we added appropriately with some of them.

The bottom line is, if any stock did not go up in the DJIM land, then it's really considered as a laggard and we are better off just cutting them lose.   Today was not the day to play a 9ema level bounce. When the market is this rosy and most things seem to work, the trading strategy should be focused on "making most bang out of a buck" and we gotta hammer those stocks with the highest momentum.     We are looking forward to trading tomorrow.    A nice reversal of 35pts on the Nasdaq today and the close over 2500.  Now, let's just stick it!

...The Love boat (ship)

Despite the major indices puttering along, notably the Dow as the big caps lost its allure thanks to profit worries hitting the A-B-C's and even an M of the big cap niche (AA,BA,CVX,MON), the DJIM closely watched index hardly blinked an eye.  This midday down tick included the RUT, rotting away till a late push made for a mixed day.   Life went on here, the main concentration here this week continued on the Shipping stocks and most of us were humming....Love, exciting and new..Come aboard.  We 're expecting you.  Love, life's sweetest reward...let it flow, it floats back to you....Okay, no romance here, but we were all waiting for more traders to get aboard our ships filled with iron ore and cereals to send our stocks higher.   Most importantly, we were waiting for those interested in a FREE ride and we definitely got this low floater discovered as it hit Briefingtrader and then late afternoon the more widely read day log that really pushed it.  This was our cry in the forum early and our cries turned to smiles as they profiled FREE late in the day.

The boys DRYS, TBSI, EXM, the secondary plays ESEA, PRGN started great and of course the idea of FREE caught on.   For a second lets turn back the clock to Aug 26 when we issued a weekend alert as the markets were dwindling, yet the shippers were making new highs.   What a concept buying the NCH is!.  This time it wasn't for an individual stock, it was for a sector.    Why not?.   This just stamps the over played methodology here of buying the strongest, those near highs and those making NCH's.   Same goes for the China stocks we've been trading.   The idea Tuesday at noon that this sector might go even higher after an already great morning proved to be true and TBSI had a nice and quick 5 point upside from the $50 mark.  Oh yeah, great job Briefingcom for picking up on the secondary plays to the big boys, it only helps our cause that was expressed here early this week.  We're not looking for the recent China speculative action to repeat itself,  so what we do is sell to the ones boarding this train late...sorry meant ship!.   Hey, every nice size cargo has to be unloaded at some time and we're not shy about doing it.    FREE, we waited long enough for this to be discovered,  our last note was early Tuesday afternoon and of course we were selling quite a bit into the strength.   We've always tried and discovered stocks before the herd as many of you know from hanging out with us at those seedy bars before.   There is money to be made in getting early, it is a clear monetary advantage to get to something first and use the later herd discovery as an advantage to your pocket book.   This was the case with FREE, even MHJ got  some print and pump in other circles.    We don't doubt this could go higher as this discovery on huge volume should give it legs and we'll trade it accordingly.   Our only fault with it is it has a knack of giving it up (gains) and until that seller is completely removed, we aren't so sure it won't again.   If using the big volume surge as a gauge this shouldn't happen...still if some profit taking takes its course in the big boys soon, this FREE will see it too.  The BDI jumped 3.6% and the fever will continue into Q1 `08, but not without a few hiccups.   We've seen them before eh?.  Not all up days are 3.6% on a index are they.  Also, don't confuse dry bulk ships with those carrying crude.   There isn't a worse area to swim in.

Unless the #'s, guidance from the big techs ( most importantly) is terrible, we are of the gut feeling the RUT will have a melt up into the late stage of 2007 and catch up to the indices that are making new highs seemingly daily. We're in the right place with the niche we cover if this happens..okay, when it happens;).  So, don't panic when you see the DJIA drift lower just over100 points if your DJIM play list is not blinking like yesterday.  Anyways, a very good week as we've been in the loop as to what is going to move. 

A few scattered names of interest/ focus that we have been adding to or looking to possibly get in, include................

VMW, tgt raised yesterday by UBS,    China's STV, WX ,EDU (eps next week, maybe a little run before off a NCH today), also dirty Brean Murray is here so after JRJC who knows what they might have in mind here,    GLDN, which regrouped and had a solid day,   CETV near highs,   CSCT which had some news out on revenue yesterday,  maybe even GROW on a reversal following some asset news yesterday and ARTW, following EPS midday. 

..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!

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.

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.

..Off-Roading

Hope you had yourself a good 4X4 yesterday for all the crazy bumps and bends of the market pounding your kidneys!.   A good seat belt might be in order not to get dismounted as the noise from all headlines is over bearing the earnings reports from the big names at this time.   As we said before the open yesterday, we can't do anything about the noise and just have to go on trading what is in front of us and hopefully working for more than a day trade.   Despite the jitters still prevailing in the market arena, opportunities were still there on the stocks we've been tossing out...

WBD,  ...this was one stock that required no seatbelt yesterday as it glided avoiding all the potholes others were encountering.  Just the day before we noted its $110 top and the moon shot came of 10-11 points from the top break.   This might have more legs as it made a NCH, but we know it's trading history well and always put days like this in our pocket and dismount.  We'll be back, especially if it holds these levels in the days to come and sets up again or if it shows signs of working the NCH higher.

"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. "

YTEC, now you know why we said this has momo trade capabilities.   The quickness and steepness of its late day charge shows what we might have on our hands here,  with it you have to accept the early action as a characteristic of such stocks.   Just have a barf bag in your 4X4 handy.  This China IT and outsourcing co' has a knack of reacting nicely to any news it throws out.    Considering their business is with the thriving bank business'',  you can expect this stock to be a possible PR machine of contracts that will jolt it constantly.     We noted midday these momo stocks do not play to a schedule, meaning if the indices are popping it shouldn't be a surprise they are not following along as we saw in the morning and then eventually an eye popping move late in the day when the markets were struggling.    As far as its fellow country bud, JRJC,   it basically followed the path of BIDU and many other stocks gapping and then steadily coming down.    The reason we book this with BIDU, is its in the same universe you could say.  It's from China and has the momo trading flavor of BIDU type...simply after its recent ride we know its capabilities to move and draw attention of traders just like BIDU has over time.    The 60min shows higher lows, a clean and jerk over $40, meaning a good close over $40 would give this a nice looking daily chart and most likely some much anticipated action again.    The risk should never be forgotten with momo stocks, we've also seen this side of JRJC.

The other names we are trading and/ or top of the trading list are all familiar DJIM names.... EDU CETV HMIN LULU BCSI GLDN VMW JST.  RBN off EPS and VMI, always seem to appear here after earnings and both do so again.

Even though trading opp's are all over the place, a day without some many bumps in the road would be a welcomed sight.....Yeah, right..as if!

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.

La lidia......art of bullfighting

...and we got ourselves a toro bravo (fighting bull).  We said he ain't dead this weekend, Tuesday was proof....and you know what?...the bravery, performance surprised not only the shorts, but even some of us longs....the scale of it in one big swoop as the bloodied bull fought back was great to see.

We recently noted this was new skool trading..Oct 26th...and finally we got one of those on the long side.
...."let's just accept 100+ /-Dow and 25+/-  point NASD days are old skool.!!!     This is intraday stuff now and we don`t think it was a good day or bad day till we see 250 +/-and 50 point days at the close..."   

Are we jiggy wit it?...We've had all summer to get wit it and now we will most likely close off the year in the same fashion with volatility!

Lets not kid ourselves and admit this was great to see.  It doesn't matter if you made money as many purely gapped.  The reason is,  if you want to make money going forward on the long side this was the medicine you were looking for.  You could not have rolled a better one....This was much better than expected as it came in one nice shot to give the QID's 2x,(-8%) the FXP 2x (-15%) inverse thingy a slow burn...mmmmmm.  Somewhat off topic...but if you want  to short the market don't do it on day 3-4 of the biggest pullback you've seen in recent history.  We doubt many can keep to this game of shorting any index 2x, the FXP 2x without jumping ship as soon as a reversal is in sight or worse a wake up gap up.   If you do want stick to this game plan, do it earlier so you get a big piece of the drop we've had since last Wednesday and not go in the following Monday when the conditions are way oversold short term and risk the great possibility of a technical bounce.  Too many inexperienced traders are entering these plays and getting burned.

Will this move continue today? ..All that matters right now is it was a 'feel good' day, showing the market is capable of a fight.  The bull has some fight in it and this action will open some eyes and most likely bring a better trading environment back.

Before the morning open, we noted we thought the Asian hooligans had some fight in them soon.  Soon was yesterday as many led the way...EJ before eps, hey remember WX moved before EPS ...so who's next today?....  We will also get initiations on the STV IPO today, possibly just at the right time.   Yesterdays action should bring some life into earnings plays as well, before and after the report.  EDU, BIDU, JST CSR YGE led with 10%+ days yesterday and a few followed.   The point here is they are not DEAD,  not if you caught a piece of the action.  The HANG SHANG up around 4% overnight.   A note on WX, the expectations were simply too high.   After a few months trading this must be valued at market prices to a certain degree amongst its peers in the industry.  It is way over the top already with it's PE and had nothing left to do but fall without amazing growth guidance.

In this market, we need to look for opp's that may not be the norm.  One example is a QSC or an E-trade.  Monday morning, we were laughing this QSC might be $3 the next day if we dont mention it.   Guess...the laugh was on us as we saw this late in the day over 2.50 and up over 50% after Briefing profiled it's earnings.   Still, not late, even at 2.90 note as it seems to have traded as high as 3.35 AH.   What we think is as this trading enviro becomes possibly more difficult,  we will turn to some 1-24 hour plays like this as an alternative time killer, money maker.  This is something we all can participate in and skin a cat or two on, so as we suggested during the China revolution a month back...give us..the readers your junk and we'll throw in some as well.   This is just the idea of throwing something out for all to decipher, investigate as they please.  Nobody will judge you, its all speculative..We also have Thanksgiving holiday trading coming up which usually gets some junk flying around as the retail traders play while the desks empty at the firms.

DLB PBR PSEM MELI  are a few names of trading interest.

Fruits of the consolidation...

We now know why the market wanted to consolidate for the past few days, the market was setting up for action like today.    Ok, we have pointed out in the past few days that consolidation can be frustrating and not fun.    Fortunately, consolidation comprises down and up action.  Hopefully, today's action would make us forget about the frustration we had to endure the last couple of days.    Now lets recap some action here...    First, some of our members would like to know what's the point of recapping everyday's action at the end?    For starter, recapping the action would give us an idea what events and action transpired during the day so we can better prepare for trading ahead.    We can look forward to the plays that were doing well today, assuming good action gets some kind of follow through.    Secondly, by recapping the action, we'd have an idea exactly where we are in this market.     Compare to yesterday, today's events are much more exciting and meaningful, in our opinion.     By not having to review the action at the end of the day, we would simply start the next trading day half blindly, in a way.  It all depends how one uses the Journal, for many its been a learning tool of our methodology, our frame of mind.  This morning the Journal might have reminded you of SIGM recently noted here as a buy the dip earnings play prospect.  It had a great day.   Our lead was the China's and that we are still trading the lot of them.  This has worked for a week and today it spread to the more speculative lot.  Makes sense doesn't it that this part might try to get into the act sooner than later.  We also said the Solars heading into today are getting harder to see as an easy trade, today that spilled further as most finished lower than their opening price in a fast market.  Bascially, it's all in your interpretation of how you take the Journal in.  To most the Journal is 'leading' them into the next trading day, this includes recapping.

So it this market more of the same?   Are we expecting some better action in the near term or what?    We think today's the proof that we CAN definitely get some good trading action in the next little while.    This time, Fed is on our side and recent oversold condition coupled with the seasonal factor can and should propel this market to gain some upside ground.

Many big technology stocks did well today!  It's always good to see companies like INTC MSFT AAPL to carry the index weight.    As long as the Indices are in the firm green territory, we as traders can pick off little ones to make our play.

SIGM/PCLN/VIP/MBT, these are few of the latest earning winners we are busy trading today.    We have mentioned all of these before on the site, (a few for over a year) and they all notched a nch today.    This goes to show that even in a crisis environment, we can still have earning plays that stand out from the crowd.   We like all of their action and we'd expect follow through from them if the market keeps up the good spirit.    We'd also wouldn't mind buying these on dips as long as the 9 ema isn't breached.  If you want firm coverage reports on MBT- Russian mobile and VIP following it's earnings, send an email for the PDF's.

WDC, we noted this one following earnings Sept 11 on a premarket Journal note.  The stock was $22-23, today it hit $31 after raising its profit forecast including December.  In our view this a huge revision and a good market will definitely take note.  On the other hand this stock has performed well in rocky times.

China Plays, from early last week, we'd pointed out that many Chinese plays seemed to be stabilizing and we'd be getting our foot back into some of these names.   Today, the entire sector lit the fire and all of the names on our watchlist have done heck of a job with some speculative leading the charge.     Our strategy here is that since it's the entire sector move, we can not afford NOT to play even the speculative ones.  Just to point a few out, we still like EDU LFT STV WX CMED... as the quality ones but the speculative ones like CHNR JRJC EFUT... are also on our playlist.   Now we believe the move we seen today may last a few days because the last time we recalled, China sector move doesn't just pop one day and die.  Keep you eyes open for a possibility of more.

Solars, this is the area which we were concerned about heading into the day as per Journal.   We are a little concerned over the somewhat overheated action from the speculative solar plays but as well as the looming energy bill.    There's a very likelihood that there's going to be a "sell on news" reaction.   We'd like to see how some plays react to the news first before venture our way back in.    Because of many other plays out there today, we all can afford to take a little cautious attitude toward this sector for now. 

DJIM #49 2007

Tis the giving season and Tuesday afternoon,  we're gonna get some in the way of a FOMC rate cut.   Following Fridays data, a .25pt cut is the most likely outcome, but there are enough still in the .50pt camp.  One thing is for certain is the decision won't be unanimous as we'd all like and all eyes and ears will be fixed on the statement attached.  Unless there is a knockout grinch punch to the market in the language, we think the market will move forward and set it's course on continuing the recent rally into the holidays and New Year.   Basically,  just get this over with and lets move on the heels of last weeks bullish days as the indices finished near the weeks highs.  Last week many quality stocks continued to get out of their bases with many more bouncing off the 50MA with follow through days.   Also, recent quality earning stocks showed some life as quiet a few closely followed at DJIM broke to new highs during the week.    They include...

MA, ISRG, AAPL,  we have always preached set ups with NCH's in place or in sight.  The market started to provide these trading opportunities once again after a long lull as these leading stocks in the past regained their lofty positions.  That's the kind of action any growth investor or just any trader wants to see and trade. 

VIP, MBT, SIGM, WDC, PSEM are the other recent EPS stocks that reported very good numbers and are now being recognized and given spurts of buying leading to NCH's almost daily.   MBT and VIP have an overweight initiation out from Lehman this morning.

SOLARS, the picture was not so clear heading into Fridays trade, but as we noted there were a couple of buy upgrades on YGE and SPWR to possibly play a part ahead of the trading day.  These upgrades definitely fueled the solars up again as many had nice days, including JASO again and STP...FSLR ran up on rumors of a contract.  We've seen the firms 'lead' this sector forward before when they start with upgrades, initiations. We might have some of that starting up once again.

Our closely followed China stocks LFT, STV, WX, EJ, EDU snailed to a 2nd consecutive week of gains since we turned our focus back on them. The volatility seems to have been removed for the time being and we started to call this group of stocks a Mutual Fund as they creep slowly higher and higher.

After weeks of trying to find a decent play, the market has started to give us plays that fit our methodology, eg NCH's and we welcome it and will concentrate on the above sorts with the usual sector (solar, china, shippers) tossed in.  It is a time for all of us to look at the 52week high lists and find more names that might provide a good trade while they trade at these levels.  You will start to find many former DJIM site names thrown around in this crop of stocks as you do your nightly homework...BOOM FWLT FSTR GEF LIFC PTT RICK TXT VE WGOV etc.   You want to trade strength and get out of any bad habits you've found yourselves in trying to trade a corrective market, such as bounces etc.  This may really be the time once again,  if we clear tomorrows FOMC hurdle in one piece.