...like a hot knife through buttah!

You can only churn and churn so much before the inevitable happens.  The inevitable could be a spike up or as said last night it could change in a 'flash' to the other side...down.  There is a mystery out there as to what transpired this afternoon.  In our view,  we churned so much the past few days, we became butter.   Briefing is left blaming it on the Bear Stearns hedge fund trouble because of subprime.  Hold on there...didn't we get past this and the possibilities that the subprime story could have created.  This news was also known on the 18th without a tear dropped. Another view is the bond yield soared!.   Puleeeze.... we just peaked at 5.30% and today it "soared" to 5.15 from 5.09%.!  Come on!.   All we can confirm once more is traders seem to go to the bathroom holding hands.   What is about 2pm that makes them go?.   Just like in skool, they all are seemingly instructed to holds hands and enter..or is it exit as was the case today.   As far as we can see, and we really don't want to see too far as we are trading for the moment (short term).. is that today was another day of churning that made holders weak and they were then easily sliced through at the first sign of weakness...like a hot knife through buttah!!!. We all lose patience and the slightest tick of selling showed many the door, even if the news is not clear or if there is none at all of true importance.   They wait and wait and if the tick aint up, it doesn't take much to create a wave of selling.  Today it happened in a flash and it wasn't something that headlined , but one that left many scrounging for answers as to why after the close.  

We are looking at the Nasdaq here and will not get that bearish feeling maybe until/ if 2590ish is broken end of day.  What we expect here is the gap from Friday to hold and some buying to come in tomorrow.   Now, if we get some morning news to favor the Bears, well then we ain't going to get the buying, are we?.  

Basically, there was no real damage done to most of the stocks followed here at DJIM...

Still, this morning provided some opp's to either take some profits or just make the late selling not that big of a deal in a particular stock.  The names we are alluding to are stocks like....

KMGB, was a either a great trade off yesterdays plunge or just a good excuse to start another position in it.  Not bad if you picked up even at the open and not during yesterday late day fall, $23 to a high 24.70's and not a bad finish after all.  We'll hold tight.

SDTH, last night we pointed out the potential of this catching maybe some of the China mania we saw yesterday.  Maybe it spilled into it this morning, but we think it is more of this being a Chem-fertilizer with excellent earning then some beaten down cheap China stocks they've been speculating on into today's action again.   You could have enjoyed the trip to 5.90's or/and you could be very pleased with a NCH on this by close. Volume was good and there was interest left in the day for it not to be involved in the selling activity. A few were panicky, but the smart ones might have bought it back up by the close.  Last night we said don't be surprised.  Tonight, we repeat don't be surprised but with more conviction.

GTLS,  it made a nice move 26.80 to 27.50's after noted today and then got vacuumed by the market draft later on.   Well, at least now you know how it can move...up and down and why we've liked to trade it some before.   As far as the timing of the alert and how it coincides with a 1 minute chart today, all we could say is to each his own...own trading motives.  Some background on Chart Industries inc....manufactures and supplies engineered equipment used in the production, storage, and end-use of hydrocarbon and industrial gases. It operates in three segments: Energy & Chemicals(E&C), Distribution and Storage (D&S), and BioMedical.  A MS analyst gave it a $38 buy tgt today and said this is a possible next in line to Dresser-Rand which doubled since October.

Despite the close today, some morning movers held on to what they could to close green. These include CMED, TBSI, CROX, MFLO. CUB . As we said before....nothing was severely damaged that we follow and we'd look to capitalize on any rebound after today is digested late this week. Remember, we expect and welcome volatility this summer and considering today was nothing compared to what we witnessed just over a week ago in that 3 day sell off, it's not the end of the world as we know it.....Simply if you didn't act hastily during that plunge after day 3...why should you now with nothing concrete to push you over the edge.

A nice reversal is quite important tomorrow.... no matter what you make of today's exaggerated move.

DJIM #26 2007

You wanna talk about a market driven on any hint of news..well we've got one, which is leading to volatility left, right and center. This is hardly a bad thing for many traders who are being selective and opportunistic.  We've noted a finish below 2990 NASD would give us maybe that bearish feeling, well 2589 Fridays close is really not it.   We are seeing recent leaders maintain their 'strong' stock tags and that gives some optimism that we won't see big declines with earning season approaching once more.  We are simply being driven by any news, unfortunately some old and some new crept into the market Friday. The old is the possibilities of a Bear Stearns saga unfolding, we all knew this could rear its ugly head one day or another and it is coming to the market now once again.  Frankly we like the battle between BS and ML.  It's funny.  All they are doing is pounding each others stock.  You think BS didn't kick MLynchs butt back on the market for what they did?.. They didn't do it by selling 100 ML lots.    The new news is the government intervention into the markets.  It started with trying to stop the BX IPO and then spilling into a full blown attack by introducing legislation that would more than double taxes on the hedgies, buyout firms and more.  This accelerated the selling Friday and we are clearly at the mercy of news.. any news.  If it's not the Yield, then it's the Gov's nose..then its the subprime stuff coming into the psyche of traders.  The thing that got this rally going was brought on by earnings!!.  It was earnings driven and the savior in all this might be that the focus will slowly turn to earnings in the media that kick off July 9th.   As we've said many times before, we don't see a market tanking just before earnings.   We hope this is the case this summer and with the SMH showing some leadership,  it might be the way to think.   Anyhoo.., what we will continue to do is be selective and opportunistic with a hint of caution, which is never a bad thing to keep you on your toes... A few selective opp's from last week, lead off for this week, everything else just keep an eye on 9ema, volume and  look over the charts posted.  They are there as a 'GUIDE' for those not so experienced, those who can't pull the trigger one way or another...buy, but most importantly SELL....Don't get beaten down in any position that you can't get back up from!....How do you know you can't or won't? ...well you don't, so don't risk finding out!

CMED, an early week alert for a buy in under $30, it traded between 31-33 for the rest of the week.  It has a few things going for it into this week. First, technically as you probably can see by its 30 minute chart.  Second is you throw it's IBD inclusion at #82 this weekend into the pot and stir. What you have is the ingredients to see this go through it's resistance from last week.

GTLS, a buy in in the $26's mid week this sustained its move and showed even better strength on Friday as it kicked up to $28.80 high. Another 1mln volume day and you start to think it is slowly being discovered. DRC is #64 IBD and this is the one GTLS was compared with as noted in a Journal entry last week.

LPHI, MACHINE!. What else can you say about it so far.   It trades in its own little world away from all the noise of the market. 

SDTH, it looks quite ready for another leg up and the best thing was maybe it didn't move yet (on Friday). Nothing like a few more days for some to digest the potential chart play here on a break if it occurs.

SPAN, this recent alert DJIM for a leg up is a trade idea for early in the week.  A helluva week for it and then a drubbing from $27+ to 24 on Friday intraday. Over 3 pts down on Friday market action down.  Thinking this will get a rebound , it is IBD100 inclusion at #73. 

You have to deal with what is front of you.  At this point, we have to admit the market took a drubbing last week and because of that we should be more cautious.  Nobody knows what will come out of the horses mouth next..or do we know who or what will be the horse that leads a stampede one way or another.   We just think earnings chit chat will take over shortly and the other noise might actually stop.  We'll see...let's hope!

so it comes at the middle of the week...

Of course, we are referring to the strong action this market has given us today.    What started as a shaky morning turned to a very strong and positive finish in the afternoon.   We are very impressed and we like the action market exhibited today.     At one point in the morning, the breadth on our watchlist was so terrible that we only found a few greens with next to no volume.    Does this mean that the recent slide of the indices is halted?   At this point, we aren't absolutely sure but we think today's action is one step toward the right direction.    Folks, this is summer trading so we shouldn't look too far beyond what's immediately in front of us.   Still, the nerves quieted down some.  Not so much edge of the seat about to fall over by the close today feeling.  Here's a hint to the market, you've seen it mentioned plenty around here.  PAULSON.  This is one name the big boys want to speak out load.  He's the insurance policy for the market.  Today was no different as he took it from red to green.  Others will tell you otherwise for today's buying.  If you believe there are higher forces controlling the fate of this market, well then you should pay attention when he speaks.  The timing is always impeccable, over and over again.

Here are some notable plays to keep close eye on...

LPHI/TNH, ok lets just get the negatives out of the way first.   Isn't it funny that when market is having a good day while these two get hammered badly?    Well, didn't we see it coming from a mile away? lol    As we have noted in recent journal and even in last night, we feel these two may get sold off imminently due to their very extended action.   We hope you did what we said and kept the stops tight.    Once the stop hits, out it goes.   There's really no point to wait for a bounce for a better exit point.    In terms of getting back in, we feel that the most recent phase of run up may be over for these two and we'll have to see how they consolidate the next few days to determine where we may get back in. There is no hurry. If a stock deserves higher prices, it will show it to you soon enough. Jumping in the first sign of weakness is not our game.  It's only an excuse for missing TNH from something like the 60-70's or so here or when LPHI was alerted almost 100% lower than a month ago.  If you snoozed, don't try to pick up the pieces later in the game at first sign of weakness.   It's like going for sloppy seconds, let it simmer for a bit before proceeding.  It will tell you if you should.

KMGB, unlike the two above, this one has not had the kind of monster run-up and it ran into consolidation recently.   We like the action today and think that it may resume its upward action and challenge its old high.

RCCC GTLS, put in a nice day all around.

DDUP/SCOR, today's definitely an IPO's day and these three all traded really well since their opening price.   We are keeping them on our active trading list to trade on any kind of meaningful follow through.

JASO, solar plays seems to taking turns to shine and this one is taking its turn today.    Although we like its action but we are only limiting our action to intraday trading.   This one is prone to quick sell offs so we constantly keep that on the back of our minds.

LXU LDK, these two had a late day surge and we are going to be watching it closely tomorrow morning to see if there's any potential for breakout action.

AAON SPEC are past DJIM entires that should be included in a trading watch list now.

DJIM #28 2008

In a typical holiday week trading fashion, things just went by quickly.    At the beginning of the week, we stressed out the importance of holiday week.   True to our belief, there was no shortage of plays and many were very opportunistic.    As the week has gone by, we are basically back to the point where we expect a flurry of earning reports.    Unlike the other quarters, this earning period seems to last the shortest with possibly the worst market reaction.    This is typical of this time of the year.    However, judging by the enthusiasm we've seen during the past few weeks, it doesn't really feel that we are slowing down, as far as trading goes.    Perhaps this has alot to do with the fact that the market is sitting relatively near the year high.   When the market is at or near the high, there always tend to be opportunities, and people always tend to be optimistic and are willing to put money into work.    This is just the way our psychology works.

So far, we had RIMM to thank for.   In the coming weeks, we are going to see more reports coming out.   Some reports will be praised and some will not be.    As far as our game plan goes, we are going to sift through reports that spawn the strongest trading reaction, positively of course.   We'd try to catch those that hopefully give us enough time and room to play.     

here are some strong plays from last week that may carry over into the coming week....

DRYS/TBSI, these two are the only two shippers we played last week and both of them pretty much closed out the week near the high.   At this point, we like DRYS's chart slightly better as TBSI looks a little too extended at this point.   However, we've learned too much from the past that we can only be so cautious.    A play will run its course whenever it decides to.   For us, even when we decided we should raise our cautionary flag, we'd still only keep it in the back of mind and react quickly once the reversal does happen.    Basically, we just have to be better prepared when the action gets too extended.

LPHI, this one is beginning to look better now.   After its initial sell of and the breach of 9 ema, it seems to stabilize the last few days.    If it can break the $36 area, we'd be back in full force.

AZZ, this one had a pretty good earning reaction and last few days have just been phenomenal.    It's now back near the old high and we'd see if it gather enough momentum to start a fresh legup from this point.

FWLT, volume didn'st seem to drop that much last week.   This is a good sign as the stock basically broke out from its consolidative trendline.   How high can it go or will it go?     We don't know but we know that we'll play this one untill the music stops.

FSLR/JASO/LDK/TSL,  we added TSL to the group last week.   This group has done some nice work last week.   As long as the 9 ema is in tact, we are trading them actively.

PENX, can this one pull a LPHI or RCCC?   In honesty, we'd like to see this one consolidate a bit.   The sooner it can consolidate, the better chance it can pull another runup.    We are keeping our eyes on this one very closely.

DDUP/SCOR, these two recent tech IPOs are hot on our list last couple of days.   We like their action in conjunction with the rest of the tech sector.   We think the runup will definitely carry into next week and we'd be trading these two aggressively.

Other notable gainers last week include SPAN MBLX GTLS CUB BTJ TRCR...

DJIM #39 2007

Last week was payday(s),  sitting on quite a bit of cash into Tuesday's helicopter drop was painstaking but very fruitful as it turned out..."only thing we are doing is being patient and not trading for the sake of trading".    This was the mentality for the prior 5-6 trading days heading into the FOMC due to what we saw as a lack of any meaningful set ups.   The FOMC provided a black hole for all of us to be sucked in and put that sidelined money to work!!.     Simply, the subdued action heading into the meeting turned into a wild and crazy trading week.. Even though the market pretty well consolidated for the next few days after the record day...,eg.. the Friday open gap led to the Nasdaq trading within a 10pt range, this did not stop the DJIM stock universe from having a great day on Friday.   Our DJIM index, if we may call it that of our closely followed/traded stocks outperformed everything in sight on Friday.  Take the stocks from the previous weekends chart section that we have you following and add a MELI or two late in the week and you can see the results if you stick to trading our book of stocks.  The 1 day returns are only surpassed by the 1 week return on this group of stocks.

The strategy continues...stick with winners and ones making strong breakouts and hitting new 52 week highs/new closing highs.  We won't be listing them, you know them, it is visible by a look of the charts up this weekend.   The Shippers, the Solars.. these two sec's are leading the way, but let's not forget the other flavors we beat on and that is the Chinese stocks and IPO's of choice. ..As we have been saying for days and weeks, months...'you can't ignore a strong sector'.   Still....never forget to take profits home with you, you can always reload and recycle these DJIM plays.    We've been doing it for months.   EJ, as an example was a 2nd time around in a month and it played out just like we wanted with the recent action a forward to the MLynch initiation.  No matter what it does now,  Friday move to almost $23 was as good as any reason to sell.    Just like a pre-earnings run, we had a pre-coverage one that we thought was worth trying.    By Fridays close, the list of these stocks at highs grew with a few DJIM names coming back back onto our closely followed trading mix...LXU, GTLS, VMW (coverage by book runners initiated today, should be quiet volatile).  We'd also include ANW ,a Barrons note this weekend and ATHN an IPO, on your potential trade list for Monday.   Btw.WBD initiation friday includes a $136 tgt. 

A seemingly perfect storm is brewing in late September and it's not a tropical one.  It is the trading vibe created, it is the end of Quarter that should bring in the buying from institutions to fudge their Q books and it is the 14000 chit chat.

..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.

..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.