Remaining untrustful....

For a market that went up 150 point, there's really not much to cheer about.     In fact, the breadth stinks on this "bounce" day.       What happened today may be the fact that we had entered a fairly oversold condition so any more selling was just not sustainable given the damage we've already taken.    One thing remains clear about this market, is that it is going to be very volatile the next little while, with the bias to the downside.    The question though, are we going to play this  bounce?    We think the answer really lies in the individual action, which is not much today.    The psychology is to play just anything when you see Dow rallying hard.   However, we think it's best just to stay put and remain calm.   Less trading in this environment is better for most.   Basically, we are dealing with lots of unpredictable pattern that do not put a favourable odds on trades.     If you absolutely have to trade, just make sure you stick with the 52 week high stuff and carry your trade for as short term as possible.

GRMN/TRMB/NVT/TRMB, this is the GPS group that's being pushed by traders today.    Just about every single on in this group hit a new high today because of earning.    This is the kind of leaders we are looking for in a turbulant time like this.   However, we also want to caution that this group isn't exactly new to traders/fund managers and momentum may not carry them as far as we may like.    For the time being, this is about the only tradable group we have left  at the 52 week high.

UA, this play had some good follow through today and it definitely stood out from the crowd.   Again, this is considered one of the most uncertain weeks we've encountered in a while so any long trade will have a very short time frame.

Bottom line, it doesn't feel that market is done getting through the subprime worries.  Also, we really don't have any positive catalysts we can look forward to the next little while in order to push this market higher.   It may take more than a few days for us to sort things out and pick out the tradable names.   Meanwhile, we should really not push for trades but rather just watch the market events unfold.

..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.

..unremarkable

but...considering the futures premarket and the somewhat grim, yet not horrible Eco #'s, the action in quite a few DJIM plays wasn't undermined. The market is finding some stability in the multi nationals and the dollars lows for technology stocks as if business will go on and prosper from the economies abroad.   This is all dandy but a lot of the action is institutions swooping up and dressing their books for Q end.   This should provide a decent vibe for the rest of the week unless some Eco' numbers come in and shock the markets.   If the energy and bank stock would participate, the majority with tech comprising the SPX and we would get a very decent up day before the Q ends.   So trading life goes on and opportunities are presenting themselves daily with the niche we cover.  Yesterday, we had good action from the usual suspects, besides the shipper and solars , a few nice breakouts continued in those that lagged or consolidated the most recently...notably GRMN (a buy $125 by DB this am) and CROX.   There is a lot of froth reminiscent of bubble and pre holiday trading running rampant in the Chinese cheap speculative stocks..sometimes this is a sign of a pin coming to burst a bubble.    A big IPO(bank) in China didn't get the usual response of a huge first day.  A modest response at best with a 30% up trading day. This might be something or its just a fact of the investors having many options to put their money at work in similiar stocks.  We'll see if this all adds up to something in the short term for the Shang or this these thoughts are a much ado about nothing.   The forum is free to use if you want to post the speculative China runners, but we won't be writing about them in the Journal as it doesn't fit into many of the subscribers wants and needs.   Most here don't have the capabilities to trade these in a timely and efficient manner in a day trading mode.

Away from the 'usual suspects' that should continue to provide trading opportunities, we will be looking at a few names early...

ICOC and LULU, we like the way these traded in the afternoon and will look at them early on to enter.

CDS,  we are fine with going with the China cheap momentum and so this issue may continue to get momo, but we do look at these plays that emerge from other groups, such as this that originated in Briefing as an opp' to flip quickly or be flipped on in the first couple of days of it being discovered and spread around.   Basically..at one point during a rise you are riding the coattails of those already loaded up and ready to dump on you in most instances as the herd comes in after getting wind of it.   It is not only the ones that first make it public in a group that load up before, it is also and may be the same loop that buys the stock ahead of the AMEX listing in this case and then breaks this stock to the public that will be the first out.  So, the mentality is 'trade it' till your blue in the face or till your pockets are full of the green stuff, but we are here to also give you a glimpse and an education of what we have experienced in the 'underground' trading world.  Just keeping those not familiar with such listings on their toes. The difference here is the thirst for these China cheapies that may carry this.  Good timing you could say.  

A while ago, we introduced FTK (Flotek industries), the morning before its listing on the AMEX at our old grounds, the stock has launched to ~$45/5X its purchase price that day..simply it was at right time at the right place with the oil sec plays in high fashion for months ahead...so this could be timed right as well.

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.