What's next?

The indices poked their neck out today and broke out of their trading range from the last little while.    As we were saying yesterday, market was looking for a catalyst and today we got one.    Does that mean that we are ready to challenge the old high next week?   Ah ha, if market is predictable like that, then we all should be running multi billion dollar hedge funds.    The truth is that we just had a good old relief rally today and what comes afterward is usually trickier than what most people would expect.    One good thing about the reaction of the fed decision today is that we are that much farther away from the recent low.   Today can be used as a good indication that we've just had our bottom for this correction.   The sub-prime issues are being sorted out and worked out slowly and many institutions now have a realistic expectation of what to expect from some of the firms involved in the sub-prime lending.    This is good news!   Uncertainty tend to raise fear and certainty raises optimism.     Seasonally, we are ready to kick off another earning season.     What?   It seemed like we've just finished our last earning season.    Yup, this gig is literally all year around and right now we are back to focus on finding earnings plays that fit into our criteria and trading theme.      In a way, we are kind of glad that the big drop happened before the earning season. Does anyone else feel like "we just got rid of a monkey off our back"?   In plain words, now that we just had a correction, bears can all suck up and go away.   Hopefully this is the case but we do need confirmation from market action during the next little while.     The best case scenario for this market is to inch up slowly and digest any big market gains like today with time.    The absolute last thing we need is for this market to go up in a few straight days and then to get smack down hard which will for sure shatter investors' confidence.

Now onto our small cap land....  When the market is in a good mood generally, the small caps always tend to get busier and see an influx of funds.  Here are some of the stocks we are noticing today...

CSV,  we have to crown this one tonight as it joined the 25%+ gainer club today.   This one is such a sleeper that despite the fact it doesn't generate any buzz among the momentum traders, but it generated 25% during the last month or so.   And do we even have to remind people that last few weeks hasn't been the most friendly to many investors. The same goes for HTC, the Euro Telecom which has produced 25% too. The reason we bring these up tonight is after today, it is time to look around at past DJIM stocks and see which survived through the turmoil best.  It is probably best to start doing some homework and expanding your tradable watchlists.   Another reason is just a reminder that despite the volatile stocks we mostly cover there are plenty of quality crawlers that work for the longer term investor.  Last Q, we had EML, SYNL, AMIE's and this Q the CSV and HTC have already stood out.

HURC HDNG,  yes keep on going and make those new highs.    Market really owes those two as the market environment was not friendly when these two came out with stellar earning report. UEIC falls into this boat as well.

FSLR TSL, we wish these two had done a little better prior to today.   Nevertheless, whatever it takes to kick-start the momentum is fine by us.

SIMO SNCR UEIC,  had new closing highs and we are definitely gonna look more on the tech side of the plays as the earning seson goes on.  SNCR was probably towed by AAPL today.

AMAG, we used to trade this back in early 06' with great success under a different symbol, it's a streaky stock and if you get on the right side..at the right time this one can be quite the winner. It's in late-stage development for iron deficiency related anemia in chronic kidney disease and that is the speculation part.  We started very small and will see if the small float and big short interest can dance with the Deutsche Bank $100 target put on it today. Wait for confirmation of a turn here before taking on a play like this or just start very small and make sure you have many more plays before it.

Folks, market definitely seems to turn for the better last couple of days and especially today.   With the earning season coming up, we feel like we should get right back into it 100% and pick up where we left off.   This doesn't mean that we are gonna be committing all of our capital.  It just means that we are gonna be committing 100% of our time and focus in finding trading opportunities for the next little while.    Hopefully we'd get some really nice plays that'll make up for some of the lost time that we incurred from earlier this month.  Just remember, we might need to curb our enthusiasm as traders soon after a day like this and that simply means taking some profits before kicking it up again.

DJIM #18 2007

NUMBERS, NUMBERS...there's the ECO. which include numbers of the crumbling USD, the poor GDP# number released Friday, the poor housing #'s and then there are the EPS numbers which are fueling the market with money that does not want to be left out of a bullish party.  Which numbers are we concerned about?.   The answer is easy as hot money keeps flooding the market, everyone is chasing the EPS numbers of the giants and now the more speculative, smaller caps instead of worrying about all the eco numbers and what they could be pointing to.  If we had millions, billions maybe we'd be concerned about what the eco numbers are pointing to and that includes slower growth/EPS numbers in Q2 and beyond, instead our goal as always is to capitalize on what we are given today, tomorrow and taking advantage of it fully. Go hard or go home is the premise here recently. You will not need to go hard or stress later in the year, instead you might go on a extended vacation if you are capitalizing on this bull run we are experiencing.  Simply, companies which are producing results, giving a good outlook are being rewarded big time. We can't ask for anything more as this is DJIM's niche!...So enough of the banter, lets get the nitty and gritty and that is the stocks we have our eyes and hands on..

IDSA, we discussed the possibilities of this beast Wednesday night and Thursday we all had a chance to accumulate in the $12's. We are patient and wanted IDSA to maintain some integrity by not finishing the day over $15 and then be prone to a sell off Monday if it was included in IBD so soon.  When we started buying Thursday, all we had hoped for was a decent finish in the $14's come Friday.  IDSA did turn out to be fun, even if an hour or two before we thought on Friday and made a couple of tries at and over $15.  We anticipated a roadblock of sorts at 15, it wasn't major but you have to understand many were happy to get out here knowing many are anticipating this level.  We did some selling in this area as well, 20%+ in a few days was sufficient for now.  Don't forget many got in even lower Wednesday on the results and were willing to sell around $15 for even larger gains.  We are glad to buy any dips and now look forward to IDSA having 5 full days of trading to rock $15 and beyond. The best it could have done Friday was finish in the $15's, but with a week to do some damage we think it has a better chance to go into the high teens in a somewhat orderly manner.

TO, easy symbol, brutal name Tech/ Ops Sevcon..hey but with a 2.2mln float and nice earning you could call yourself whatever you want!. This one has a string of EPS somewhat similar to TRCR with the last being in the mid-to high teens.  It also just put in it's first 10 mln revenue Q like TRCR. There is also 15% institution ownership with a few names we are familiar amongst the holders. This gives this unknown company some respectability. We feel with fast money back in the market chasing an IDSA or two, a play like TO should get some interest in the week ahead. You don't if you don't try!

CMI, guess we'll look at this again but after giving a ride from low $90's to $107 off the opening bell, you'd have to think you are not going to match that any time soon.  So why bother going back right away!. The co' beat expectations and gave a rosy outlook.  That was the spark to ignite what we thought would be a nice short covering in the morning.  As we noted in the forum that morning...more goes into finding a play than the headline numbers in many cases.  It would be too easy if all companies with excellent numbers did the same thing.  CMI had a big run recently due to M&A rumors, these rumors evaporate most of the time and this idea brings in shorts expecting the stock to come back to reality.   Nothing like a kick ass report to get them covering in a hurry.  This was the idea behind the trade for a early morning move.  Anyways this was exciting and you could put this one with the MFW's huge day recently when we gave out a play with something like 20-40k volume before it exploded to record volume and big quick gains.  If you're not pocketing these types of gifts and moving on or recognizing them as an opportunity to jump in as soon as huge momo comes in.... something is wrong.  Also, if you're still scared to buy expensive stocks get over it.  These expensive stocks present incredible opportunities.

VSEA, a semi beat by 3c and guided higher. Not big fans of Semis here for the longest time, but with market the way it is we need to diversify some and see what the bigger names are capable of.  Besides, this one was a nice chart heading into earnings and this weekend moved to #4 on IBD. A few firms already reit it a buy and boosted price tgts.. We bot late, low 69's.

MFW, a familiar name we bot back Friday. It kinda pissed as off as we only had a few shares and were ready to add for days $60-62 and now had to deal with a sipke at the open to as high as $68.  Well..at least we know the Perelman money was smarter than us by picking up $12mln at $60. We like this kind of news and bot mid day off the pullback.

TRCR , quite the nice run in 4 days. We said we'd be looking to sell some if it reached the 14 area. Friday it was 3 plus points over our alert on it and we booked some profits into the weekend.  Nothing wrong here, just the right thing to do. We'll be back.

SYNL ,what can we say about the last 6 trading days, except its a pretty thing. We're all probably enjoying this move.

DXPE, was a casualty Friday but you don't need to be one.  Past knowledge of DXPE volatility puts this move into perspective. It's nothing but profit taking off a 8 point move. One way you might avoid more damage than you need to is set a mental stop in the area of the previous days long stick around that days low and or open. This is not a hard rule but if you had this point in your head it might have saved you a few points Friday. For us as full time traders it is of course easier to exit, if you can't deal with these types moves it is best you stay away...or you just accept them if you like the story and stick with it through the bumps in the road.

A few names for the pillow are acting well, past and present....VE hit 83, HTC near $24, CPY exploded Friday to 60's. These stocks have never seen RED, as in lower than our initial DJIM buy in's ( VE-$68,HTC-$17, CPY-$43) besides returning 20%-40% profits in months.   You can't beat that for a safe crawler. We try to give a bit of everything to satisfy all tastes.

One discussed in the forum early this week kept going creeping up and that is TWIN. ...... Remember SYNL EML were these pillow stocks when first intro'd here.  We can't discuss these much as they trade so thinly day after day, but for those of you with a longer term view on some of your positions these have been or are great stocks so far for under the pillow. An extra screener for these types is best to keep track and visit.  ABM, has pulled off a NCH and a nice weekly chart as well.