Carnage in the far east...concentrated

Fortunately, the damage in Shanghai did not spill over to North America.  On the contrary, we actually had a pretty good day for a lazy summer session and many DJIM type of stocks were particularly shiny today.   If the market was to get a shake, you'd have seen the beginning premarket.  Nothing of that sort happened as the FXI stayed calm and a few Chinese stocks were actually green. Instead of any housecleaning, we were buying most of the day.  Does today's action mean it's a sign of things to come?   We'd like to hope so but we aren't wagering all of our eggs in anticipating anything.    Basically, our game plan is not to get too over our heads in worrying about the big market movement, but rather, focus on individual plays and sectors that are attracting hot and momentum money.    Afterall, we are not economists that emphasize on theory which goes into the far future but we are traders that focus on the live battlefield level action day in and day out.    There are quite a few interesting plays today, so we are not going to waste anymore time and just go right into them...

TBSI, this is a play that we have been involved in the last couple of weeks or so.    What we really liked about this play is its text book style of action.   Sure, it doesn't have the heart pounding NOVC like of action but this one gave us the kind of setup that most traders would be happy for.    This one built a beautiful flag pattern last little while and it shot up today and closed near the high, with some good volume.    This is the kind of play we love b/c not only it gave us enough time to get in during the setup, but we are also able to built up a comfortable position that mattered in a very controlled, conservative, and highly probable way. A nice 5-6% day.

KMGB, this one came to our attention before the market opened and we immediately put it on our watchlist.  We actually put this one up back in 2005 and it doubled by the next morning.  That was its first stellar EPS Q.  Today it came out with earning that not only beat the analyst's estimate by a nice margin, but looked very good year over year, and sequentially, by our book.    After further checking its IBD number (92 98 now), we just couldn't help but start buying up shares.    Now, every once in a while you get a high calibre, high momentum IBD play that gets lots of traders' attention and we think this one is a very good candidate, after NGA that is.

ATLS AHD, a few weeks ago ATLS came on our radar after it acquired some assets and made a nice move. On the weekend, we had put AHD on our watch for the week because the chart made a NCH and was related to ATLS.  Before the open this all came together in a different way, the idea behind these names and a trade on news.  ATLS, which owns partner units of AHD announced the APL (Atlas Pipeline, LP), had made agreements to acquire assets of Anadarko and then Atlas Pipeline would distribute $$ per limited partner unit and increase distribution....LOL. Confused?. Hell yeah and all this doesn't mean anything to us!.  All we know is this was another 1 billion asset deal that was liked once, so why shouldn't it be once again. The fact the charts were prime and the trading action called for an entry in our book.

LPHI, this one definitely caught some wild fire after it guided up intraday. Early this year, we put this one up after a good EPS Q to look at. We wondered if a life settlement stock can actually get that sexy look.  It didn't for traders, but quietly it had almost doubled since.  We really couldn't speculate the true effect today until after the initial excitement settled down. This one can have some whacky spreads.  When it looked like there isn't any sign of pullback, basically there's only one place to go and that is up.   We are also trading this one aggressively. Co sees Q1 EPS to be approx $0.49 per share vs $0.11 single analyst est compared with earnings of $0.05 per share for the same period last year. The co also expects Q1 revs to be approx $17.5 mln vs $8.4 mln single analyst est compared with revenues of approx $6 mln last year.

TNH, after about three weeks of consolidation, we think this one is ready to break out again or at least test the high area.    Yes, it's a $90 dollar stock and we aren't discriminating any stocks that we feel have the potential to pull a good move. We all know the power of the MA, CROX, FWLT expensive plays now, don't we!.  We are monitoring the action closely. The mid May high is around 92.50 after the sell off.  Today was the first day it closed over 90 since.

There were quite a few new positions /stocks taken today.  This shouldn't take the spotlight away from this Q's DJIM plays that had a very good day.  TRCR +14%, CUB +6%, RCCC 3.9%, IDSA +4%, GTI +2%.  Not bad for a day the DJIA up 8pts and the NASD up 4pts.

A Good Test...

When a market participant looks for a catalyst that can potentially change the general direction of the market, he/she usually looks at the homefront, where it matters.    Sure, last few days the oh so powerful Shanghai market seemed to have derailed badly but there isn't any talk of catastrophic consequence in their economy as a result.   Hence, the action did not spill over to America and whatever happens there, stays there.   Today we had a little something different and the worry stemmed from within America and the never ending talk of "interest/inflation worry" came up again and many talking heads feel this is the cause for today's slide.    For us, we literally had to check our quotes more than a few times just to realize that we are indeed in a "selloff".    Oh yeah, GOOG just made a new high and closed well over $500.    Maybe, people are just spooked by the fact we haven't had a good ole "whack the bid" kind of day in a long time.   So there, we got the selloff today and it's time to move on.

Aside from the Index action(which is total BS in our opinion), we are seeing some very good and healthy action among few individual stocks and certain sectors.     Ok folks, whenever you see more than 90% of holdings on your watchlist are having a bad day, then you may get a bit worrisome and think about some quick exit strategy.    Good breadth gives us the courage to stay and chase while bad breadth simply chases us away.   In our opinion, breadth is the key telling of whether we should be hanging in this market or not.

TNH, +5%, this one did not disappoint a bit and came out smoking off yesterdays buy in and finished just as strong.    This is in fact a new closing high and it'd be interesting to see if it can challenge the triple digit area.    The whole group seems to be up today and we wouldn't be surprised if this one goes even higher given the sustained movement in the entire sector.

CROX, whenever the other two DJIM big guns are taking a rest, this one takes over the baton and charges higher.    This is almost 20 pts higher since our initial buy about a month ago.    This goes to show that whenever we see a highly liquid stock with a very favorable probability of pulling multi point runup, we just have to go in big and patient.    By the way, during the runup thus far, this one has never closed below 9 ema.   It kissed 9 ema a couple of times but that's about it.   This is a sign of a very strong stock, historically speaking.   As a matter of fact, exact same deal with both FWLT and MA, neither of those closed below 9 ema ever since their EPS breakout.

GHM, this is an old name that came out with an excellent Q.  We admired the effort premkt as some(one) was working hard to prop up the price. buying lots of 50 shares, including one order at 23+ plus.  Unfortunately, they don't seem to know these odd lots don't appear on many trading platforms. Oh well. The action picked up a bit premkt and it traded to $22 in the first 10minutes and $23 in 10 more after the bell.  ,With the market sliding, a CCall coming and we just preferred to play some later on a probable dip later.

A few a stocks off yesterdays buy list hung in tough considering the early market action, but especially since they were up big yesterday. This includes KMGB LPHI  AHD and ATLS which was given a tgt bump up to $67 by FBR

CUB, up over 25% since we alerted May 3rd closed with another NCH, this is probably finally being recognized as a defense name!. Another DJIM defense stock hovering near highs, SPAR also had a nice day up 7%

MFLO LXU,  we are keeping a close eye on these two as both are in our opinion setting up for a potential b/o into new highs.

A true test...

If yesterday was a good test of your holdings against a shaky market, then today definitely gives a true appreciation of how "good" your holds are.     Of course, if we get few more back to back shaky days like today, it probably wouldn't have mattered much what you hold.   Overall, we think the market action is healthy.    For whatever the catalyst/excuse that caused the slide, it's needed to correct this market into a healthier stand.    This is assuming that this is not the beginning of an end for this market here.   At this point, we don't believe it is and we are acting that way also.

We have a number of good closes today and given another hour, we think some more stocks culd have battled their way into the green.    Individualism is running full and strong in this market today.   Breadth is poor but if most of your holdings are in green territory, you'd feel that you are doing something right and will try to keep it up.   Can you imagine if last two days were up?   We'd been asking that question throughout last couple of days...

KMGB LPHI,  these two were the stars two days off their respective earnings announcement and they've held up very well despite the market weakness.   We added some LPHI today because we feel this one has had the best action amongst our holds.

CROX, good stock battles back and this one did exactly that toward the end.     As it comes near its split date and we think the action will heat up accordingly.

AHD, so this one only did less than 40k shrs today.   This stock also has only 4 mill float and probably less if you take into account the institutional holders.    We liked the deal that was announced couple of days ago and think this one definitely has the potential to move up.

GHM CUB put in very respectable green days as well.

Many recent names here such as NTLS MFW LXU RCCC ATLS TTC SPAR MA TBSI barely broke a sweat in the profit taking sweep across the market,  even the volatile TNH battled at over $95 till the last 30 minutes. 

One we added today, VSNT (Co reported May29th,Q2 EPS of $0.52 vs $0.32 in 2Q06; revs rose 37% YoY to $5.2 mln (no estimates). Co raises FY07 guidance to $1.50-1.62) falls into above category.  But as we said at the start, if we get more shaky days it probably won't matter what you hold.  Unless it's cash of course.

DJIM #24 2007

In Sopranospeak, FUHGEDDABOUTIT! was the markets message Friday.  Unfortunatley, it won't be so easy going forward.  The rally defintely has felt true pressure and last week has fueled the bears.  What spawned the rally we've experienced for months was rehashed as earning (NSM) and M&A (X) activity were again two of the catalysts the spurred the recovery rally Friday. Oil helped and CNBC feeling the uproar from their audience got Gross to appear to elaborate, more like clarify on the headline they spewed Thursday afternoon.  All this closed out one wild week and if you took a chill pill Thursday night with us before drawing any drastic conclusions, you had no need to empty your book before the weekend.  What the recovery rally provided is it drew a line in the sand.   The lows on the major indices Friday will be the area to watch for many.  If we break this area, we will become very cautious of a secondary correction.   If this area is kept away from, we should be able to trade accordingly. One thing though is earning season is over and that major market catalyst is removed for the time being.  Can the market continue on with M&A activity pushing it till next earning Q.  We've got about 3-4 weeks to find out and we will trade in smaller sizes until, especially if playing this Q's DJIM names.   You want to be in size at the beginning of a potential earning move eg CROX, FWLT.  The first leg you could say.  At this point there is no way we would play these in the same sizes as before, we prefer to wait for a new crop and by that time we will know exactly where the market stands!. So for now we'll remain cautious and go with a manageable book.  Not too many positions and not oversized.  If this was a sign of volatility for the summer of 100+/-30+/- pts days, we'd prefer it to the laziness we often start to see at this time of the year.

Even after the tumultuous week there are more than a few DJIM's still trading near highs or making them. These are the stocks we are concentrating on. The partial theme here is to always play strong stocks!. Common sense says a stock that survived last week and finished near highs is a strong stock...common sense also tells you if the market starts showing signs of slipping again, these probably won't stay strong much longer.  Unless fertilizer is the next black gold!...A few of those are...

KMGB LXU TNH are all chemical stocks in one way or another, all showed strength before the rally clicked and so we were buying them again as the market gained strength. KMGB made it to the #40's in IBD this weekend.

CUB CROX RCCC NTLS MFLO still trade 9ema or above, very little damage sustained over the week.  Again 9ema is an area of short term support for most of the stocks we cover. We want to hold stocks above it, not below it!.

LPHI, GHM are fresh names (3-5 days off gap earnings) and of course are trading above 9ema.   

MA got some good news and might recapture the 9ema quickly from it.  FWLT did that Friday, but barely.

ATLS, if sec turns this could be ready to bounce off 9ema level.  AHD, holding up well.  

The shippers got whacked and we'll likely just watch them for now.

Sluggish mkt...except

The only thing last weeks terrible performance not do to DJIM stocks was put a ribbon on them for today's action.  Today was definitely a GIFT as there were plenty of remarkable performances.  You have to figure the bargain hunting started Thursday afternoon and today was just the icing.  With the icing comes some froth, which is always a good time to pocket some points.  That is unless you think a KMGB, TNH, GMH, CROX will put up back to back huge days.   We'd rather not think and just line our pockets first and then consider re-entry.  This is especially true when DJIM stocks are outperforming the market as a whole.   We love NCH's but when you get a intraday 10%+ move in a KMGB or a 8pt move from TNH since friday, we will always take a load off and ignore a potential NCH end of day..... This is especially true if the market is showing signs of losing steam off only modest gains during the day.   You couldn't really call this bargain hunting buying as almost all of these big gainer stocks were already trading near highs, so maybe it was just being in the right place at the right time.  But the right place and the right time require the right stocks!.   Not much else to say about today, hopefully this euphoria over DJIM's today carries over to the rest of the market tomorrow.  We can't survive on our own.

Shaky start ends with a ....

Shaky Finish!    Once again, the relief rally we had two days ago is erased from our memory and we are back where we were pretty much the day before last Friday.    Some can argue that having worries is good and it's called "climb a wall of worry".    We definitely have some cause for worry these days and it's mainly because of the dreaded "interest rate talk" and resulting jump in the 10 year bond yield.   So, now we have the worry and ask can we climb this?    Theoretically, yes we can.   Technically, it's going to be very tough if we don't have any near term positive catalyst that can drive this market higher.    So, we are definitely feeling the heat both from the market and from outside our air conditioned environment.   The key to cope with both kind of situation is to stay cool, and very cool we have to be.

Well, our strategy in this kind of market is  1. We trade very short term and use technical signs rigorously.  2. We only trade those that are making new highs or are in a setup to do so 3. We stay very liquid and will not make any sizable bets  4. Hope is the word we are taking out of our vocabulary which means we only trade on what we see out there.      Basically, you can get the idea that the last thing we want to do at this point is to turn ourselves from traders into investors.    You'd be surprised that how many seasoned traders can fall into the trap with just one little slip.   We just have to stick to what have gotten us to this point and we are taking many lessons from the past summers into incorporating our strategy.

here are some stocks of interest...

KMGB/LPHI,  as much as we've liked the recent action from these two, we've felt compelled to part way with most of our shares as the major indices deteriorates and while there are profits to take this week.   This market is not about hoping but rather acting on better probabilities.    At this point, this market feels about as uncertain as it gets.   With last Friday's low looming around the horizon, we just don't know if the next push will send it lower and spark some more nasty action.    This is not a calling the top shot for these stocks but rather it's just our own defensive and mechanical maneuver to take some good profits in a murky market environment.   We are very glad that these two stocks held up well enough to provide us with some very nice gains.   Of course, if market gives us clear direction that it's headed higher, we'd be sure to have these two back on our priority trading list.

CROX, this is the same story as above except this one has served us much better and much longer.   This one has got everything you can ask for, liquidity, chart and a hot story.   We don't know how much of the rise lately is due to the up coming split but we feel if we don't sell some more here, we'd just be asking for it.    We are still keeping a little and will see how much more it can take us at this point.

RCCC, we guess something has to shine in this market and this unlikely hero is there to give us a reason to get up early tomorrow and trade.   We'd think some of our other uneventful stocks such as MFLO VSNT TRCR etc. may become the "unlikely heroes" in this uncertain market.  We just have to keep a close eye on those day in and day out. MFLO is a dime off a NCH and we picked some up today.

What can we learn from today?

...or what can we learn from the past few days?   We are learning that we can not draw any definitive conclusion about this market.    It just looks like it doesn't take much to push this market into either direction.    The giant point swing is a mere exaggeration of the uncertain status this market is currently in.   Unfortunately, all these volatility isn't creating that many tradable opportunities for most of us.     What we look for here are the plays that can sustain an upward movement for a number of days or enough of a percentage run that make the risk/reward worth while.    So once again, we are just going to take some plays as is and not to extrapolate anything from their movement today.  

here are some notables..

TNH, chemical plays are hot and given a favourable market condition, they tend to out shine most others.    Ok, so we know this is like the beta play when it comes to following the index.   This one can trade very volatile intraday, point wise and you can find a lot of resemblance if you compare to the indices.    Bottom line, this one made a NCH and it's ready to challenge that magical triple digit mark.    Trade this wild one if you can but full attention is required to make the best out of it.  TRA got a buy rating today from Matrix and that got it rolling.  Do take note of the mass defection at $100 once, we tried the other day getting to $99.75 and you could see some shaky nerves at work.

KMGB, it feels like this little one is following TNH and it popped up during last half an hour on a big volume surge.   Momentum is very much alive with this one and we have no choice but to follow through some with this one.

KHDH, this one broke out on a long consolidation base . We added and will be watching this one closely to see if it can muster some extra follow through to give us potentially more over $60.  This has been one steady player since we introduced last earning.

CUB RCCC VSNT,  sure, there seem to be a lot of popular heroes out there today but these three just keep on moving up quietly in their own way.  All three made a NCH.   We are trying our best not to let our eyes off these ones because next thing you know, they are up 10%.   In this market, if you can find something that can get you 10% with a relative low risk within a few days, you'd be considered a champ.

Like we said this weekend....  "If this was a sign of volatility for the summer of 100+/-30+/- pts days, we'd prefer it to the laziness we often start to see at this time of the year".  Opportunities abound with volatility.  Does get funny though when NGA runs on 2 day old information. That's why it's not exactly our favorite environment but it beats the summer lull.

DJIM #25 2007

This is definitely a helluva of a start to the summer. The recent scare of back to back to back days of declines leading to last weeks broad rally is volatility at it's best and every traders dream.  It was just on the 14th (3rd day of declines), we said lets all take a chill pill and not act hastily with our books and wait to see who/what puts the bears into the woodshed.  Seemingly, everyday since there has been something to reignite the Bull and his herd.  Friday was the crowning as tepid inflation numbers brought back hopes of better growth to go with it.  If you had the QQQQ on level2 as the CPI came out, you'd think you won the lottery before the open.  An important ingredient to last weeks rally was being prepared.  The only way to do that is having stocks in tow or watch listed to recycle into that were strong to begin with. We think we were definitely ready here at DJIM by having 'strong stocks' as the market finished its tumble.  In DJIM #24, "Even after the tumultuous week there are more than a few DJIM's still trading near highs or making them. These are the stocks we are concentrating on. The partial theme here is to always play strong stocks!. Common sense says a stock that survived last week and finished near highs is a strong stock...".

Included in this list were :         KMGB    LXU    TNH     CUB    RCCC   LPHI     GHM    MA     FWLT 

1 week % performances          21.46    8.16   19.15   4.37  19.73    25.72  10.28   9.80   5.49

Simply all you needed was a healthy dose of DJIM stocks to recycle if need be.  It is so much easier when you have the right watch list without having to seek out what is hot in a fast and furious market. This allows you time to concentrate on trading and getting in early if you were not there already.  Saves time and money.

Beyond the above DJIM stocks that we will continue to stalk, we also had a few names..old and new come to forefront last week...

One of our all time DJIM favorites, MFW was picked up on the hunch they will do something with their cash, well more of a hunch the hedgies will feel that way.

KHDH was one we didn't get much out of recently but oh boy did it show its magic for the last 3 days since alerted $58.5`s. A fast 5 points-8% to the high of Friday.

AIRT, was introduced Thursday $9.60`s area and almost hit $11 at the open the next day before digesting its previous days gap and big percentage day.

SDTH, we just couldn't buy and type fast enough it seems. We started buying the low 5`s and by the time we got the alert out it was 5.30 and then exploded to 6.25 in the next 15 minutes. We said what we saw as angle to this play and soon enough it seems Briefing saw it the same way. Fertilizer and China with earnings.   See their write up posted in Forum by a member. 

AHD MFLO VSNT pretty well round out the play list.

..most importantly today...A Happy Father's Day to our friends here!

..What was that?

Well...that was what is a typical summer snooze off!. The indices churned and churned with no catalysts ( eg. little M&A activity or Eco numbers) to serve up any conviction on either side.  Maybe we shouldn't complain after the excitement lately, but if you're doing this full time, days like this make you cringe at the thought of more listless days.    Luckily, there were a few DJIM gorillas to get some through the day. Both MA and TNH continued their extended run with 4% days, another $100+ gorilla FWLT had a nice follow through day and closed with a NCH. You wanna talk about extended, how about that LPHI!.lol.   It probably causes a few hearts to skip a beat the way it trades intraday, but at the end of the day it closes at the the days high once again.  When a stock does get extended you might get a RCCC reaction day sooner than later. Oh yeah this one has bounced nicely off 9ema around $30 last so keep an eye on for a trade possibility here at that point.

Besides adding CMED off earning early on,  there was nothing new we bought.  We actually did more selling today, reducing some position sizes such as in KHDH, now KHD on nyse just to lock in some profits. 

KMGB shrugged off the IBD omission nicely.

MFLO reversed nicely back to $23 intraday. This one is fixated on $23 and it makes you wonder how many shares can go at that price before something positive happens.

Hopefully tomorrow brings some excitement..with a bullish bias of course.

Hump day..

Unfortunately, there isn't much to get over on hump day Wednesday following these last two days, which might be a good thing!. Considering the market has done little but trade in a tight range following the gap up, this lull might be more positive than anything else.  Still this market is driven now by the slightest news, so what might look positive can change in a flash.  Tomorrow is an important transport  FDX earning that might move things one way or another.  In the meantime, we'll continue to look at for the next new mover or the next move in an already played DJIM stock as in a couple today...

CMED, this one can catch the momo as seen this morning and this possibility is one reason we entered yesterday..playing off its history. Now that the stock has come down from its lofty heights following its IPO date in 2005, it might be ready for another leg up off its latest earning. Today's early morning spike to 32.98 might be due to a brokerage call on it and there might be more to follow. By adding another product line recently, it's growth is likely to keep ticking. As we said in our initial alert, its trading can be erratic. The good thing about that is it provides new buying opportunities.

AIRT, the good part of a slow moving market is it gives you time to lurk around some plays in more detail. Today we spotted a potential 'nibble' to be at around $10.50 that materialized into a move over $11. As other recent plays that are comparable to AIRT dry out,  we might get more traders coming to this fresh play. Today's chart might catch an eye or two as well now.

RCCC, last night we touched on RCCC as a potential trade to watch today. If you had it close on hand, maybe you were able to get something out of the nearly 4pt rebound.  When a stock climbs like RCCC from say $15 to over $40 in a few months sooner than later you get a biggie breakdown. They are inevitable and the same probably is the case for KMGB late in the day...

KMGB, and on the 15th of trading day following earnings it fell through the chimney and stomped its butt on the 9ema!. There was nothing we could see for the drop other the inevitable drop after 15 or so days of solid gains, especially for a low float winner.  We dont consider this play over at all and took this as an opportunity to get some back.  It might fall more tomorrow even if there is nothing of news substance, but like RCCC did today...we expect this to move back up.  We'll most likely start building up a position back up as the dust settles or see buying come in.  This sector is not going to fade off into the distance, today it was the #1 performer for most of the day and it will be again and again. We'd be more careful with TNH now.

CUB, continues on and today it was an extension of a big contract. Now nearly 50% since we alerted, we can say it has been recognized as a defense play as we noted it would sooner than later.

SDTH, it just feels its not far away from another leg up. With China cheapies getting play today, don't be surprised if it swings to here if the mania continues into tomorrow.

Also TBSI is back as one to possibly move into as it made a NCH today. ESEA is around as well.

...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.

Better than nothing....

"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?." 

Well...we didn't get any news noise in the morning but we still got an early continuation bump from yesterday, which was hardly a surprise considering what was a sizeable drop.  By 10am we hit that 2590ish mark (2586 low to be exact) and the rest is history.  Last night we thought there was no reason to fret, simply the bears caught the bulls napping after 3 days of churning yesterday.  That's the way we felt while it was all going on and later last night after catching our breath.   If it was the yield climbing yesterday...why didn't we go lower as it climbed to 5.19% today?.    Are we satisfied with today's reversal?.   The answer is no, but that could change tomorrow.   You see DJIM stocks have a way outperforming the indices and not performing on par when the market rallys.   We have seen this time and time again and have written about it many times.   Despite the rally today, it was really only for the techs on the Nasdaq...even the big caps really didn't perform to NASD snuff.   There were a few DJIM's that bounced nicely off low's...MA 6 pts...TNH 12 pts..FWLT got in the grove late for 3 pts, but the problem was with many of the small-micro caps that have been running here that didn't perform as we would have liked.   This list includes SDTH, KMGB, CMED, LXU, AIRT, VSNT etc. but a few did like LPHI, TBSI, GHM  (34k vol. woo hoo).   Still..besides the few it was uninspiring in the scope of things, but at least yesterdays fall did not continue today.   So..maybe we shouldn't be so picky....Yeah right!.  Let others and their niches have a good time while we are predominately left out.   NO WAY, JOSE!

If today wasn't just a blip like the fall yesterday was....well then we expect some action in the DJIM stocks that did little today to move tomorrow. This is even if the market digests today's gains and does little all day...but we do have the Blackstone (BX)  IPO tomorrow, which should help the karma on the trading floors.  Maybe it can spread...

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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 #27 2007

One thing is for sure, the only thing that can seem to wake people up in this market is "earnings"!    The past week was filled with some dramatic volatility.   In the early part of the week it seems that market was ready to give up.    We had back to back days of strong opening and a very weak close.    Both indices were flirting around 50 ema and it just looked that shaky.    Come into rescue toward the end of the week is of course the prospect of the earning season.   The fed decision is once again a none  factor in this market this time of the year.    We feel many people are sitting on the sideline waiting for some good earning opportunities to get into.     From the big cap earnng front, RIMM definitely sets the tone as well as the benchmark for others to follow.   20% gain in one day given RIMM's market cap is still a very big deal, regardless of its momentum status.   To put this into perspective, GOOG has to gain over 100 bucks in one day just to gain 20% and that'd be just something unthinkable at this point of GOOG's growth cycle.

So what are we really looking forward to at this point?   Earnings, of course!   The earning season usually starts with Alcoa kicking off and that comes around second week of July.   Our game plan is the same as before, go after the winners early and aggressively.   If the apparent "winner" does not get the kind of attention we wanted, we simply move on for our next kill.    With earning season, we'd usually be busy enough to trade multiple earnings winners at same time.  So rest assured, if one doesn't work out, there'd always be the other one or two that will work out.    Now the key in trading that kind of strategy, is to stay with the winner, at all time.      We had a little taste of the earnings drive last few weeks from the likes of LPHI KMGB TNH FSLR RCCC TBSI... etc.   All of them have returned substantial gain given our usual time frame.      So be prepared and be ready, both financially and mentally, because the next 3 to 5 weeks of trading is probably the only trading matters in the summer.

Here are some stocks that are worth reviewing over the past week....

PENX, one thing about this earning winner is that it never had this kind of volume in its past quarters.   Perhaps, this quarter's number is just that good, or it is the fact that it's in a sector people really go gun ho about.   In any case, we the momentum traders may also have something to do with its latest volume surge.    Well folks, this baby is in play and that's all you need to know.     Remember our favourite strategy,  if you missed the first runup lets say from $24 to whatever price it stalls, the first pullback should always be bought, aggressively!   We are fortunate that we caught majority of the move so far but the rest of our game plan is still the same.   Just because we did well the first run up doesn't mean that we can slack off on the second time around.    So keep a close eye on this one and trade on the long side aggressively.    Always put the 9 ema up and imprint it in your mind to know where it is at all time.    Nobody wants to miss another RCCC or LPHI type of move again.    The funny thing is, at this point, we don't think people even care about their actual eps number anymore.   There's really no need to extrapolate their number to calculate a "proper" valuation price or assign P/E or whatever.    Know this, this one is in play and professional traders like us and others are trading sizable shares to drive this one higher.

KMGB, almost a month ago, this one came out with a strong report.   One month later, this one is roughly 30% higher, and it closed with a NCH on Friday.    Ok, we didn't stay in this one the whole one month.   As far as we did, we basically traded two runup.   The first runup was from the initial earning/IBD and second runup, which we are still in it, started couple of days ago as per our alert.    The coming week should be interesting since this one did not make it to IBD100 again but we think this shouldn't be an issue any more.    Float is pretty tiny for this one so as long as the chemical sector is in play, we'd like this one's odds to go much higher.

TNH, speaking of chemical sector, this one is probably the epitome of chemical stocks during the last three months or so.    The recent 10 point drop in one day may set a warning sign of its extended runup but we are still keeping this one as one of our favourite trading stock.   If you look at its chart, it hasn't closed "below" 9 ema ever since the breakout area of $90 and we think as long as this is the case, this one is still relatively safe to play.    The only thing of concern lately is that the volatility is getting to the extreme side of things and it may eventually crack its uptrend completely.

TBSI/DRYS, when shippers move, they move together and we like these two the best.   They both notched a new closing high on Friday and we'd see if this generates a new round of enthusiasm in the coming days.

FSLR/JASO/LDK, so once again solar plays have been hot lately.   Out of all of the solar plays we have touch based before, these three are the closest to their respective all time high.    If anything, we'd be trading among these three when the sector is having a good day.