Pair of Aces...

When you have a pair of Aces, you usually have a pretty unbeatable hand.   In our case, we had Amzn yesterday and Aapl today.    Does this pair of Aces have enough karma to save this market?    Or maybe, is this market really in need of saving?     Some are doing there best to make it sound so..

AAPL is definitely the big enchilada the market was waiting and expecting on today.   What everyone was hoping for was obviously an AMZN kind of reaction.    So far in AH, AAPL is delivering and is up over 10 bucks.    Now we are not going to analyze their report, their ipod or iphone, Mac shipment numbers.    That is really an irrelevant issue to us traders as our main concern is how this thing is trading and what's the likely implication it may have on others tomorrow.    So far, despite the early weakness, we say the reaction has been pretty good.    Hopefully, this can translate into a positive spirit into trading tomorrow with the help of some of the firms morning calls that cover it.    Market was hairy at times today but somehow the indices pulled into green territory.

Bottom line, we want to see that the good earnings report are still being rewarded.   This is the fundamental strategy of DJIM and without that, it'd be pretty much useless to trade.     Fortunately, good eps reports are still getting bid up, so we are still very much in this game.    What we do want to caution to our readers though, is that in light of the recent market volatility, we are cutting down our position number 'considerably'.    We are basically only trading a handful stocks now which we consider have the best potential and the safest setups.  We are also concentrating on new faces, leaving most of the recent winners behind.    We want to trade in a manageable manner so it's time to go back to our basic "be very selective" strategy. We are not in the buy the dip scene either now, so it is better to start with fresh names reporting well and avoid the dips in Solars, Shippers and others that have ran this last Q at this point..  Have a look at VSR, PCR for some more that have beaten up today..quickly.  We want to avoid anything close to this, the best way is with fresh names.  A good report is not going to fall 15-20%, an over extended stock, but a recent runner might for many reasons.  If a stock is breaking out to new closing highs as with LPHI, it is worth another flyer in our book. Still, you have to keep it manageable and in decent size.

here are some plays we are dealing with today...

LDSH, we bought some off its report today and liked the way it closed.   The report is pretty strong and the reaction is even stronger.  This one has basically been stuck around the $39 to $42 range since Feb. so this report is potentially giving this one a good excuse to kick into high gear, for a new runup.    We have been a little aggressive on this one today and we are looking for some multi day action from this one down the road.    Read the earning report, we think you would be impressed. It probably didn't hurt BA was up early with a nice report.

LPHI, how high can it go?  If we just stop asking ourselves that question and pay more attention to its action, perhaps we can get some more profitable trades out of it.   We added some today on anticipation of a good close.  It closed well and we are eyeing the $50 mark at this point.

ANIK, this one reported last night and we couldn't help noticing its strength today.    With its IBD number of 96 84, we think this one is also a candidate for a potential IBD runup. They had a FDA approval to go with the report.  Many of us traded this in the past, hopefully, we could have more glory days with it.

AAPL/BIDU, just a heads up for tomorrow and you case you haven't heard, they are both up multiple points in AH.

Dealing with the inevitables...

So everybody knew it's just going to be a matter of time, sooner or later...this market is going to rebound from that horrid 500 pt drop last week.   How could it not, right?   Of course, we just don't know when it'll happen and how it's going to happen.    Well, the day did not start with any conviction that we are going to have that rebound day.   You can just feel the jitters with fvery tick of the indexes, up and down.   Actually, there's always that fear looming over some people's head that "what if that 500 pt drop turns into a 1000 pt drop?"   Of course, it's just highly unlikely that market drops 1000 points without any kind of rebound.    We may very well drop a total of 1000 points over the next few months or years, but it probably won't take just 3 days to do that.   A little logic,  street sense, you may call it always plays a role in our thinking day to day.

There was a battle going on earlier in the day between those that looking to sell into any strength (the 1000 pt fearer) and dip buyers.    Finally, when it's apparent that market isn't going to drop today, the reverse happens and people just rushed in to buy up some of their favourite targets.  Hence, we had the inevitable rebound.    At this point, it's going to be hard to convince people that this is nothing but a short lived rebound attempt and the overall technical picture is pretty gloomy.   Well, at least this is probably the majority of the "smart" traders think anyway.    To us, we'll try not to out think the thinkers and outplay the markets.    The strategy is to go with the flow with some contained exposure.    We would bear in mind the potential risk of selling off again but still trade those with the best momentum and setup.    The point here, is that we have to stick with our game and plan.   If we took some loss from last week,  we'd grind it back, slowly but surely.   Having confidence in our ability to trade well in an up moving market is the key to long term success in this business. Some..most..can't do this...so stay put!....Right now, we just have to be super disciplined and be ready to go cash on a moment's notice.    Other than that, it's really business usual and last week's drop does not change our personality or strategy or discipline level whatsoever.    The only thing that may have changed since last week is perhaps our portfolio value ...   Frankly, that is the easier part to deal with given the number of similar scenarios we've gone through before.

Now a couple of earning plays and story stocks that should be kept a close eye on......

ARTC. this is a play that weathered a 300 point Dow drop by announcing its earning last Friday.    When market turned positive today, it's almost inconceivable that this one would do anything other than being up.   After another above average volume day, this one tacked on two points and a new closing high.    Again, we like this one's business and we don't think any "sub prime or prime concern" would have any adverse effect on this one.  It is at the most recent price targets set by a few recently.

AXYS, this one actually had a buy reiteration today, so some of the move maybe attributed to that.   In either case, any stock that gets a new closing high in this gloomy environment deserves a trade from you..

LDSH, this one actually had a downgrade the day after it ran up off earning.   We are just wondering if it wasn't for the downgrade, would this one already be well over $50s?   Of course, it's useless thinking about questions like that.   We just simply have to deal with what's already taken place.   It's going to get a good test to see if it can zoom past $50 and beyond.    We think a lot depends on the overall health of the market.   However, if this market rebound does carry some leg, there's no doubt that this one can be one of the leaders leading the gainer list.

FSLR,  if you happen to catch some intraday swing, it's pretty sweet.   Earning is tomorrow and this one is something we'd definitely keep an eye on as this can set the tone for the rest of the solar sector for next little while.  We said watch for pre-earnings moves in our listed stocks reporting, this one  definitely got one today.

GHM, for a small company with a small float, its earning looks pretty good.   Valuation is still very reasonable.    We would be trading some with the flow

PWRD, this is a new play we've added to our watch list last since Friday.    This can trade wildly but it can be rewarding if you are on the right side of the trade.    There's some good amount interest in this play, so we'd trade it until the characteristic changes. Not for all!. 

There are many bouncing as expected...CCF.....some of these are so thin it is easy to walk up as it was to walk down last week.

Volatile but better action...

We have gone through many volatile session recently and today's just no exception.    We can honestly say that nobody that we know expected  smooth action post Fed Decision.    Despite of the fact that we closed well off the highs off the day, but we also closed well off the lows.    More importantly, we closed firmly into the green territory and that's somewhat reassuring.      At least the breadth is much better today compare to yesterday.    We have been concentrating on some of the familiar names most of the day and carried some position home for a change of pace.

Here are some plays...

MR, this old play came out with pretty decent earning last night and we managed to play some middle way through the day.   Again, this one is from the medical sector and the it hasn't taken alot of damage during the past couple of weeks.   This is a strong sign and today we just got an excuse to get on board some.

CRNT, from the look of it, this play is not over by any means.   It may have a pull back here and there but the further away it moves from $15, the better trading action it gets in our opinion.   

LULU, we chased some of this one today as it cleared previous high pretty convincingly.   We are going to be flipping this one very aggressively as we believe taking short term profit is as important as getting in a good entry on it.

LDSH, this one also cleared it recent consolidation range pretty convincingly today and with the help of this market, we think this one can get some serious leg under it.    Of course, just like everything else, market behaviour is the key  here.

LKQX, given its usual churning nature, this one actually did exceptionally well today.    We aren't chasing much up here but in case the momentum persists, we'd be there without hesitation.

Taking advantage of the tape...

The truth is, it isn't exactly easy taking advantage of today's rally.   If you really paid close attention, many if not most of the stocks on our watchlist hit the day high right around 10 A.M. and it's pretty much sluggish action from that point on.    Sure, if you happen to have some poisitons tucked away going into today, then you'd have a pretty good day scaling out here and there.    For those that began the day literally flat, you almost have to buy stuff from the get go and cash it all out half an hour later to enjoy most of the rise.    Otherise, it'd be most likely a diffuclt battle making an entry middle day.     Stocks can be volatile even on a seemingly good day.   For us the traders, we have to recognize the volatility and making use of it to our advantage.    We have been cashing out quite a bit of stuff during the day because as the indices was heading higher, many of our positions were either stalling or drifting lower.    That's a sign of tired play and frankly, many of our recent plays have gone up enough to justfiy some sort of pullback.

Here are some plays that closed well off their highs...

FCN/LDSH/LKQX/ARTC, these four in particular all hit some really nice price point in the early going but they all couldn't stay up there long enough.   Yes, they have been up quite a bit past few days and we basically  have to take some profit here.   Don't forget, big point day like today don't come often and they only happen often in a volatile environment.   During the volatile environement, we have seen more big point down day than the up ones so we have to fully appreciate what's given us by locking in some profit.

CRNT, this one took a pretty nasty turn intraday and closed much lower than its day high.    We are not absolute certain if this is a sign of reversal but it does feel that the easy and sure money has been made in this play already.     Again, we'll leave it at this piont and let it sort itself out for the next few days.