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.

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.

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.

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...

.

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!

It would've been a lot easier...

if all we had to is to check the final box score of the market action today.    Oh yes, it's just another logical follow through of Friday's decline.....  However, today's action is just anything but calm!!.    The key of today's action is the reversal of all of the intraday gain.    Despite the fact that both indices did not close near the low, it is the shear volatility that gave many traders that unsettling feeling, it is something we all need to care about.   It's whacky out there and seemingly many are following the major indexes, even the micro/small caps start to follow immediately,  which is making this out of whack in some respects.  Sure, this is summer trading but we are still few days before July kicks in.    What it means that it is going to be another long summer for traders unless earnings gives us a jolt!    We also want to point out that both Dow and Naz are getting very close to the 50 ema and that is something some of us may need to keep it in our mind for.

As traders, we definitely liked the way the day started but do not like the way the market finished or what transpired mid day..    Sure, many stocks on our watchlist still ended up in green territory but many of them are quite a way off their intraday top.    Here are some interesting ones...

LPHI, if we all knew what this one was capable of, we'd all have parked lots of cash into this one when we first noticed it.    This one pulled another impressive finish today and at this point we are not even speculating how much higher it can go.    One thing for sure though, is that this one is super extended and any long trade here requires super caution to execute.   We'd really prefer a pullback from this one and we'd just have to wait and find out when it will happen.

FSLR/JASO/LDK,  in terms of solar plays, it's getting more obvious that these three are the leaders and ones we'd be looking to play to this time around.   And out of these three, the best one is still FSLR and there's no sign of its slowing down this original DJIM solar play.    These are niche plays that people tend to trade...irrespective of the index movement.

TNH, lately, it seems this is really the only chemical co. that mattered in the world of stock trading.    We really liked its action today and especially its finish.    We do want to point out that this one can be very volatile when it's having a bad day.

CMED, maybe we just need to give this one some more time and some more room before it's done digesting its recent move.    We will be keeping our eyes closely on this one as the breakout could literally come any time. 

Almost identical...

The index action today is... you guessed it.. almost identical as yesterday's.    The only difference is that today's point range is not nearly as dramatic as yesterday's.    Individual action, however, is not as bad today compared to yesterday.   As you can tell, this is somewhat comical that we are actually analyzing and comparing daily movement.    Such is summer trading, unfortunately.    If we really want to sit inside an air conditioned room on a hot day like today, we just couldn't help but trying to digest every little bit of volatility.    Is the earning season almost here yet? lol

Lets take a look at some of the strong plays out there in what is otherwise a very shaky, on the edge of its seat market....

TNH, some of us may actually get tired of even looking at this one on a daily basis.  The truth is, it's up 45% since our latest alert of around $90 about 3 weeks ago and it's just been a monster ever since it broke $100.   Folks, forget about those cheapies that may get you a "sizable" position.   Park a few hundred shares in this one and you'd be all set for this summer.    Ok, it isn't that simple but we do want to stress that this is the kind of play we favour the most.    So eventually this one will get sold off so we are keeping our stops very tight.   

LPHI, ok, so we don't have any clue why it's doing what it's doing ever since the earning report.   We liked this one a lot back when it reported a few weeks ago but nothing stuns us more than the latest action this one is getting, irrespective of market environment that is.   Now for a stock to pull a double from $20 range in as little as a month, is just something we have to give our highest respect for.   Even though this one has been on our play list for a while, we do feel that we haven't given it enough attention/time to fully taking advantage of its performance.   So what is our game plan now then?   The higher it goes without a pullback, the more cautious we get on any slight downtick.   In fact, it does feel that a strong pullback is imminent.   So if you are still in this one from day one, make sure you monitor this one very very closely.

RCCC, one of our favourite plays the past few months, came back and got a nch today.  This one, unlike LPHI above, has had its share of consolidation last little while and we are just not as cautious when chasing this one.    For what it's worth, we think there's potentially some more upside on this one.

TBSI, those darn shippers just can't all move together.   No matter, the idea of playing sector is always go after the top performer.  In this case, we feel this one is the best performer in that sector, much like TNH and FSLR in their respective sector.    This one made a new high and we followed through with some shares.

HOKU, some of our readers have brought this one up and we just want to say that when looking at a play like this one, it is crucial to understand the players behind the action.   This one has traded twice its float two days in a row and there's no doubt this belongs to the day trading crowd, for the most part.   If you really want to try this one, make sure you keep your eyes on the 5 min. chart and as well as the volume, and hope somebody else buys it higher from you.

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.

The importance of holiday trading...

To say that we had a pretty good day today simply does not do its justice.    What we had today is one of the best days in 2007, in our opinion.   This is not an exaggeration.   Of course, you still have to be familiar with all of the names that we have been trading during the past few weeks, in order to fully appreciate what we feel.     What caused the market action today?     Two words, holiday trading!    Still, this is just not just any holiday trading.     In order for a good holiday trading week to work, we definitely need some ingredients.    One, there has to be money waiting to be put into work.   Two, market has to be near at or close to the high in order to attract the momentum.  Three, there needs to be something optimistic(earning season this time) that people can look forward to.    Basically, we had just about all three ingredients and we kicked off this holiday trading week with literally a bang.     This is back to the topic why we are stressing the importance of holiday trading.   Now we know what makes a good trading environment, and if you are like us dedicated professional, or if you simply have a passion for trading, this is the kind of week you just CAN NOT let go by.   Folks, taking a much needed week off and enjoy the weather and other activities is fine if you need it badly.   For others, this is a week where you can probably take some serious revenge from this market by profiting from quite a few opportunities.

Yes, market is pretty forgiving right now and many traders are doing just fine.    We at DJIM, however, feel that this is the kind of time where we have to absolutely out work and out perform other traders in order to make our lives a little easier when the going gets tough.    See, it's always about making a killing during an easy trading environment and survive during a tough environment.    If you can't make a meaningful percentage gain in this kind of market, what odds do you really have when the market heads the opposite direction.

Our game plan, is to lock in those potential huge winners with sizable positions and ride it on the back of this favourable condition.     We have been ultra aggressive today in terms of adding positions(mostly familiar ones) to our portfolio and doing it with a much bigger size than we'd normally do.      There are simply too many stocks to name at this moment so we are gonna highlight some worthy ones tonight....   if you have built your watchlist around DJIM names last few months, you'd know which ones are doing good today.

PENX, what may take some stocks a year to accomplish took this stock only three trading days to achieve.     Sure, I'm only talking about its 35% runup since the time it announced its earning, excluding its gap gain of 20% off the news.     This one is just HOT!     This stock actually surpassed our most optimistic expectation up to this point.    So, the rest will be just so easy and simple at this point.     We'd stay aggressive with this one.

TNH, holiday trading brings out some animal spirit out of many stocks and we didn't expect anything less from this one.   This one got a NCH today and closed near its high of the day.    Given its past performance we'd expect some good follow through off a good move.

LPHI, this one still needs to battle over 9 ema and today may be a good cause to get back in some with the assumption that the play is not over.   We did buy alittle back today but we'd watch this one closely in case if it shows any kind of weakness.

CUB, for a while, we felt the play might be over but today it literally breathes new life into this one.   It took out the $30 mark convincingly and it looks as though it's ready to start a new leg.   Again, this is an unusual kind of week and we'd always bias those that breakout and make new highs.

FWLT, this one spent literally a month during its current trend line between 100 and 110.   Currently sitting at the upper end of its trend line with a strong close, again given the bullish sentiment from the market, we feel this may be able to breakout cleanly.   We bought some today and looking for the breakout.

RRST, we actually traded this one a while ago but it didn't do much for us.    We are back in it again and thinking this time it may get some momentum going.    This one actually has a pretty high IBD rating(98 95 as of tonight) and we think with the recent RS, it can potentially move up in ranking.

FSLR/LDK/JASO/TSL,  so we added TSL to our mix of solar plays today.    This group basically goes with every other momentum plays.    When market is up, count on this group to shine.

Some of the other stocks closing at high or strongly and we've been trading actively include DRYS AZZ RIMM GTLS RCCC SNHY BTJ TBSI TRCR MR EDU...

Tough to shake off earnings enthusiasm...

It's almost unthinkable that we'd start the earning season with a nasty drop which begins the long decline.   What happened yesterday simply gives many traders a dose of reality that nothing goes up forever and pullback/pauses are very common even in a seemingly bull market.    Hopefully, you just relaxed watched the All-Star game and watched our Blue Jay star make a catch late in the game!...Wow, wasn't that something..lol...Guess the manager thought his arms were too tired after the HR' derby the night before to let him get an at bat.   Thankfully, today proved that nothing has basically changed since the day before yesterday.     Good earning plays are still being rewarded and bad ones are being dumped.   Things are about as orderly as it gets.     Also, for most participants, it's irrational to sell before the optimistic expectations they have with respect to their holdings.     For DJIM, it works the opposite because we only get excited AFTER an earning has been announced.   For us, there's no optimism, no expectation nor any feeling toward any up coming earning announcement.    We are just excited over other people's excitement so we can take advantage when the actual trade comes.

There's no shortage of plays on the table today.    For us or for most traders in our loop, we'd like to point out that we have a habit of working with the green plays.    It's not only easier to do but it also makes a lot of sense regardless of the market condition.     In an up market, obviously you want to hang with the ones with the best momentum.  In a down market, anything green pretty much makes them stand out and you sure want a piece of the action unless the market is in a total distraught.    Buying dips, on the other hand, is definitely not our favourite strategy and we'd try to stay away from it as much as we can.     When you buy a dip, you couldn't help but thinking that you are just taking a chance that hopefully you are buying it near the intraday low.     The planning of the trade as well as the execution will be tough on your mind when you go against the trend.      That's why in an up market or when the market is in a clear bull mode, it's always better just to ditch those "buy on (#)ema dips" and work with the new highs and break outs.

LPHI, you are probably wondering why we weren't being aggressive buying the dips on this one when the "clear" outcome is for it to go challenge the new high.   Well, there's always the probability that it won't.     We basically want to strike when the moment is right.   Today we got that moment between $35 and $36 and we got in.    Instead of being in this one for a while and waiting for a move to happen, we'd prefer watching it until the move comes.    Now the chart looks good and it looks like this one is ready to challenge its old high and beyond.     We'd be adding more of this one aggressively if and when this one strengthens up.

CCF, our old friend did it again.   This one came out with pretty good number as noted last night and stock acted correspondingly.   We like the volume this one exhibited.    As we have mentioned earlier today, this one has an IBD rating of 85 93 before the report.  If the number gets revised up, it can mean a whole new world for this play.   Again, it's just a possibility and not a sure thing.

ASYS, finally, this is a new  play we are adding to our list after its tremendous "look at me" volume today.    This one has a very small float and since they are associated with solar plays, we think this one is way undiscovered compare to others.   Sure, many traders have started noticing this one today but we think the fun may be just the beginning.  If you played it off the alert, you got 2 runs of almost a $1 intraday...we're looking for more and so just added on the dips.  This little company is profitable, revenues growing and a very small float and not a one trick pony that was trading under 50k share day after day (2.2 mln today). This is the type of company when it reports that has the markings of potential yr. over yr numbers that will get it attention...but we're not waiting for that day off this volume. We said, we are seeking more attention for anything solar from the firms, news to keep these going, anything with solar has a ring to it to us, even if it is something like this today on a semi/solar like AMAT, which ASYS also happens to be...BofA believes solar opportunity transform AMAT into growth stock, BofA believe is AMAThas closed another solar thin flim deal with a European co. They est the size of the deal is 40MW with the initial investment in the 60m range. Firm believes the latest deal is particularly important as it is an emerging application, "building integrated photovoltaic". Total value of solar thin film contracts won to date, firm ests, is in the 540 mln range.They think AMAT will now win 600-900m in contracts in FY07 vs guidance of greater than 400 mln.

DRYS, this one was mentioned a couple days ago as our favourite shipper now before TBSI went tipsy.   It's been mentined here many times before that as well.  We felt TBSI needed a pullback but this one looked better chart wise, anyway.  btw..TBSI is back to $31 after yesterdays sale.  But it was DRYS today who showed us who's the boss and took on almost 10% and a new high.    Again, we wouldn't want to chase this one blindly as the risk/reward ratio is not nearly as good when it was around $45.

AZZ, to us, this thing for sure is going to break $40 and beyond.   Action looks superb in this one and we are adding.

Naz +49.9, Dow +283

Perhaps, there's really no need to write the journal tonight.    Again, as we said last night, we are excited over other people's excitement for this earnings quarter. Also..from weekend chart update.." Since, we have seen the market rally into the upcoming earnings season led by technology..the PHLX Semiconductor sector closed at a 52wk high to close off the week.  The HANG is taking over eyes and money from the SHANG and the day to day volatility in the latter seems to have little less effect on the markets here. That's a relief.  The HANG/HSI chart shows a clear breakout over 21,000 after a long fight (6 mths) with that level.  With a good start to earnings season, M&A activity still showing robustness, we don't doubt the markets can pull a move somewhat similar to HANG's after the DJIA/SPX bust through the 3 mth range over 13700 and 1540 respectively".      How's that for a start today!. Actually, today is that seemingly rolled into one day.  Despite the overall very bullish sentiment of this market, we want to quickly point out that people are only optimistic about the market as long as the earning delivers.    So far, we haven't had many companies to report but it feels like people are playing as if most companies are going to beat earnings expectation.    If this is how people think and at the same time the put the money where their thinking is, so be it.    For us, we still stick to our own game plan and concentrate on those that have reported good report.      A strong market will reward all kinds of traders, whether you are speculating blindly or working with a sound strategy.     Everyone makes money in this market!   

Now onto some of the DJIM plays...

LPHI, oh yes, this one is ready to challenge the old high.    We like where it ended up today and couldn't help but add some more.

DRYS/TBSI,  DRYS has just been a monster as of late.   The 7% gain today in addition to yesterday's gain is something that amazes us even.  TBSI, on the other hand, isn't looking too bad either as it shook off the sell off two days ago and it too  looks like it's ready to challenge its old high. DRYS, an upgrade was up late in the pm.

ASYS, an erratic one it seems or one that gives many opportunities to enter a trader might think.

SOLARS......they are hanging in and probably didn't participate as a few of us would have liked. ...who cares, really..maybe they are waiting to do it on their own...Still..they are hanging in tough and maybe the firms are really getting involved (hope) as we noted the other night.

In fact many stocks hit new high`s today and we are not going to list all of them.   Some email us as to why we don`t include their fave stock in the Journal.  That`s not what the Journal purpose is!.   If we already covered the stock endlessly, it is almost irrelevant if it appears on radar again with a NCH today or yesterday.  It`s worth maybe a note by you on the forum, but it is not enough reason to write about if there are many things better that we are concentrating on.   We also move on from turtles...Sharks eat turtles for breakfast, lunch and dinner and you don`t want be carrying a laggard in this market, especially if this stock in question already gave you a few points off an alert.  

Whether we like it or not, this month looks like it's going to be busier than recent July`s.   If you were invested heavily today, then you had a good time as it didn't take much trading to make money if you were already in the right stocks....you could have sat on your hands and just rang the register..or you could do it tomorrow off any follow through action early.

A few things going on here on the forum the past few days that resemble Summer Camp...

Let's be courteous on the forum... if someone gets bruised.....we've all been there and no reminding is needed....they've given you enough leads on winners that this is not needed and respect should be shown.    Also, if one didn't or don't get enough love from their closest in life or trading life ....let's not use DJIM to wax our egos now or cry for love....Also, if you don't like our comments about a stock we responded about (speak up and we'll debate) and don't do it in round about ways.  It's so obvious, it ridiculous to all...Don't think we are bullying your stock.....just read our comments over again and stop filling other members email boxes with this stock is up $1 nonsense ...hell, it better be in this market off  'pretty' earnings.  We are all here together trying to make $$, screw the summer camp crap....we`re not about to be counselors.  We`ll just call your parents and have them take you away.    Demi