.6 .6 .6%

Guess we should take those % gains from the DJIA/SPX/NASD yesterday as a sign from the devil that we are going to have a down day to follow.  It wouldn't be a surprise, but on the other hand that is what most expected yesterday and we just didn't get it.   The herd was playing catch up and the profit taking didn't hit till quite late in the day.  By this time, we were sitting pretty as we had done as promised before the open and that is, " we will be selling lots and lots of yesterdays buys before catching our breath and possibly repositioning".   The good thing about yesterday is the morning catch up lasted longer than anticipated and it gave ample time to sell and get a price.  The repositioning of the sells really didn't happen as the market slid too late in the day giving the impression a little more selling might continue into today.   So why reload at that stage, is our thinking.  Still, there were some stocks worthy of intraday plays and others worth holding to see what's further up possibly.  Also, instead of adding to stocks recently talked or alerted to the day before like the GS that went to a morning high of $207, EXM mid 48's, DRYS almost 76, BIDU almost 285, TNH to 123 which we sold in the morning...we went went after a MR late in the game because it was making another new charge to highs and because the Chinese stocks is one area that held up the best during the day.....

EJ, is one we keep on holding. Yesterday, we noted possible accumulation. This was even more evident as this one churned and rolled all day in even another tight range.  Either this a forward to ML's initiation or something else, or its just a fine piece of China making a dandy cup and handle.  This is not trading as before when volatility was huge, don't ever forget those days. A shakedown is always possible and don't all get shaky knees if it comes.   We've had a nice week and considering Chinese stocks are holding their own, like JRJC, MR its worth some more time.  As said before, we added back MR and as far as JRJC, we are only flipping it here and there.

LULU, MELI, and even WX, interestingly the recent IPO's had very nice days, actually some of the best out there and we have put these on our potential trading list.  MELI, is a new name here.  It got initiated yesterday and is of the foreign AMZN, EBAY biz nature.

GS, as a follow up to possibly hold a portion into earnings. We got a very nice price/ gain and after MS's report, we'd prefer to stay out and play it in the morning if they announce nicely.  For markets sake , we hope its great and so we can live with any points we might miss.

ICOC,  we'd just like to point out the concept here has always been playing the possibility of "IBD100 inclusion".  The main idea is finding and getting to them early and going big early into the $15 level late in the week.  Remember NGA, GTI, IDSA even SYX???.  If not go back to April, use search and see the prices we started and read up on the strategy.    So, if a stock is already at $15+ on a Wednesday, it really offers us little incentive at that price.   Also, do consider that a $15 stock with a beautiful run has been drummed around and pushed by either other stock forums, hedgies...or whatever and if they use the strategy as us in the NGA, GTI plays, guess what they might be doing here?.  Well, at least we would be dumping to newbies after getting 1-2-3-4-5 pts. We'll watch for now and if we get a nice dip we might add ..anyways, we'll see how it trades these last 2 days and deal with it hour by hour.

At this point, even if we didn't reload our sells late in the day, we'd look back to these names as soon as we see the buying of pullbacks starts in the market.  And it will as any dump will be seen as a buying opportunity for those who missed this move and think this market will be going higher in the days, weeks and months ahead.  Buying the dips in this market will again occur.

Petro-Currency

Growing up and then trading from Canada,  we'd never think we'd see the day the CDN$ reaching parity with US$....guess, they waited for us to be nice and far away for the historic day!..lol...OK...now back to the US markets we trade, a market we've had to greatly outpace just to deal with the greatly appreciating CDN$ over the last 6-12 mths.   Luckily our goal at DJIM is not to produce paltry returns in the single digits or the teens'. Anyway back to the pitch as the futball fans know it as ......living 3 minutes away from the Chelsea pitch on afternoon game day is quite the experience for any sports nut...or drinker!!

So...yesterday was hardly unexpected after the sprint we've had this week, the valiant effort of many to keep it where it was most of day was good to see.   Somewhat surprising was to see dip buying come in so early at times.    It would be a victory of sorts if we could end week basically unscathed without a serious short correction with the loss of momentum.   Despite the small caps, mid caps indices leading the way down in the afternoon, we were pretty well and running from the morning with our niche of players we had you following and hopefully trading.

MELI, LULU, WX, the trio we gave before the open outperformed anything and everything off the bat.   MELI steamed from the 33's to 38 and considering the force of the move maintained its lofty intraday perch and closed at 37 and change.  After 2 days of action, we know this is on radar now for those into a little action.    LULU and WX sprinted to new highs as well from the open.   If some of you want to trade broken down stocks and patiently wait and wait for the all mighty bounce....the best to you, but as part of the DJIM methodology says... look for the strong,52 week highs, which at more times than not is the easy play!.    These 3 had all these colors after their strong showing we pointed out in a market that was treading water the day before.  Wondering if Cramer put on some Yoga gear to demonstrate his bull-ishness on LULU last night..maybe a LULU thong or the LULU Hot shorts!.   Sorry to make you sick in the morning...

EJ,  we think we have walked you through this trade in the past week or so.   As we've been saying the accumulation is most likely a forward to Merrill Lynch's initiation of the stock.    In many a traders eye, the play could be over in terms of they got what they wanted this week and moved on.    The 22 level was a no a technical no brainer and was an exit door for some.   This is the one reason one should use charts, to use them as a guide to where you might find resistance or support for your stock.    The Merrill Lynch initiation will come today, we hope its enough to fuel this some more and at least get it on radar of more money.     Don't expect anything to send this to the moon though.   Just like pre-earnings runs, this might have been a pre-coverage run led by those in the know...we'll see shortly depending on the $ tgt ...if they give one.

APOG,   this one we bought into and as usual with it maybe a little early at 26, as it did its traditional yo-yo action on day of a good report. Every Q this one seems to beat and we were waiting for the exact action we saw later as this moved from 25' to high 27's intraday and finished strong.  The potential in this stock short term is in the charts. You can easily see the last two reports on gaps and then the follow through to higher ground.    Not sure why this got so beat up during the summer and frankly don't care after these earnings.    ----------------                Reports Q2 (Aug) earnings of $0.40 per share, $0.04 better than the Reuters Estimates consensus of $0.36; revenues rose 19.7% year/year to $217.7 mln vs the $209.1 mln consensus. Co raises EPS guidance for FY08, sees EPS of $1.43-1.53 vs. $1.50 consensus, up from $1.37-1.47; raises FY08 revs guidance; co sees revs growth of 11-13%, which equates to ~$887.1-903.8 mln vs. $877.17 mln consensus, up from revs growth of 10-13%, which equates to $879.1-903.1 mln. Co says, "We remain optimistic about our businesses and markets served, and are positioned to meet our longer-term objectives of 8% annual revenue growth and 20% average earnings growth through FY10. Our solid year-to-date earnings along with our strong backlog, commitments and bidding activity give us confidence in our ability to grow revenues and earnings through FY10.

LWAY, the chart was getting our attention the day before and the open, even on light volume showed us some potential....simple as that.  A nice move ensued and volume was pretty good on the day.   Hopefully, the chart came to a few more overnight and we will have some follow through action today.

LDK JASO MR ANIK ICOC GS ,   top out our trading list for Friday.

DJIM #39 2007

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

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

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

Bulls on 'roids and Pigs can fly..!.

Those seem to be facts now!.   This is what we saw yesterday as the Chinese bulls roared off the Asian markets, even when left at home alone with the SHANG on holiday's.    With every Bull shot there is a pig in it's footsteps.   Meaning speculation on junk ones was wild and you need to be careful at this probable late stage in the game.    Back at the ranch, the market was doing better than expected with not a lot of profit taking.   We added this footnote to a post before noon,  "Considering yesterdays action this hasn't been bad at all or meager for the small caps /RUT been green most of the day. Bunch of those sorts here having good days WX EJ BIDU JRJC LULU MELI ROS GLDN FSLR EXM TBSI..AZZ might still " .    The day turned from good to very good late in the session for these stocks and a few others like GS, VMW, CSCT.    The market continued to trade sideways and finished mixed, yet for consecutive days now, we were in the right place at the right time.     Hopefully, our morning Journal steered you back home if you've strayed!.     This was the true Bull shot of the day, the DJIM index.    There is really not much to say heading into today trading, except that hopefully we all played these shooters smart and took some off the table.    This is especially true with the gains generated by the Chinese stocks covered here.    Even the good ones will get nosebleeds.

A member noted and what is probably a good way to understand the Journal is to see it as us thinking 'out load'.  One thing is to shadow plays, another is to shadow our mindset, which is probably the better way to go.     We can't give buy/ sell advice, all we could do is show what we are buying and thinking.    Hopefully, it rubs off on you and improves your trading ways.    When we noted yesterday.."Now, we just ask WX to get some game and it will have our most recent China plays on even ground. Oh yeah..where was BIDU yesterday?.     Lets no forget this rocket ship when looking for a good intraday trade.".    You need to ask yourself why are we even mentioning these two that under performed the day before.    Simply, we are thinking ahead and with a big overnight Asian market these just might come out and play with the rest of the kids.   Trading is so much a psyche game, you need to think ahead and think what others will or might do.   Your gig is to get there in the early stage or even ahead of the herd.   We gave the below leads yesterday, clues into where we might be leaning and why.  All you needed was one or two to have an excellent day.  The language is simple and we'd all should have been prepared..

TBSI got back in the hunt and is close to highs.

VMW, we don't cover much tech, but VMW has been the one we have traded the most.   Finally..this one is acting with the sector

which is leading the recent parade and not playing on its own terms. $90+ is in reach now

ROS, GLDN our Russian telco plays are not be forgotten as long as they cling to highs and therefore offer more upside potential in the near future.

WX and BIDU( wasn't all JPM initiation), it was a matter if you build it, they will come!.   The build up was the overnight markets and these were prime candidates to play in the mud with the others.    Anyways, yesterday was a day for us to daytrade these high flying Chinese stocks and it occupied most of our day.    Now, we need to get back to basics and deal with reality and concentrate on the others like GS, FSLR, VMW, AZZ etc.  The EPS winners and ones to come and the potential set ups that we can all get in early on. 

We all need to be a realistic after two days of solid gains!

Too much to handle...

Some may call the most recent rally as a massive short covering that will not last.    Well, today those participants got what they wished for, a fizzling follow through, especially late in the day.    Ok, if this is all what it seems, then much of the action in the future can be anticipated, right?   Not so fast!    Regardless how you interpret Monday's action, it was basically due after days of relentless selling.    You don't think this market won't put up a fight and just let it slide 30% straight?    In this day and age, longs still dominate the shorts and bulls dominate the bears.    Most of us are raised to buy stocks, and most of us had to learn the hard way to know how to sell stocks.    It was just an oversold situation that was being taken advantage of and that's the end of that for now.    So where are we now?   We can either retest the lows or trend sideways for a bit.    After a big sell off like we just did, the best case of scenario is always trending sideways, in order to find a true bottom.    It's true that we may still go lower but until that day comes, we'll assume otherwise.

We had a couple of pre-earnings run ups today.    The strength in EJ STV LFT looked particularly good but we have to understand that they are all due for an earnings release.    EJ and STV are releasing on 15th, while many other Chinese co. are releasing on 19th and 20th.   So keep an eye on those releasing before and after the reports.

QSC, it sure feels nervous trading this thing the last couple of days.    After all, it was merely 40 cents three months ago and around a buck three days ago and even up another 50% from our alert late Tuesday.  This one had a tremendous run so far and odds definitely favours a pullback at this point.     This one may have a much higher valuation down the road but at this instant, it needs a pullback.    We cashed out most of our holdings today and will watch how far this one pulls back to in order to find a possible re-entry point if warranted.

PSEM, this one in our opinion is near the end of a setup and something is about to happen.   9 ema has caught up to the recent rise and the next move will determine where this one wants to go.     We have a strong likings to this one but as it's proven to us many times before, seeing is believing and this could use a little help from the tech sector.    No matter how strong we feel about a stock, the stock has to act accordingly to our feeling.    We are eyeing this one closely and waiting for a move.

MELI, reported accelerating revenue and slightly beat the estimates. This one moves fast when it wants to and did at the open before settling down the rest of day. Considering it didn't slide further while most did late, we'd keep a close eye on it here. Also, because it might get a positive spin from a firm covering it as it did last report that pushed it higher. NCH is not far here. CDS , the possibility a firm covering it will put out a positive spin is here also as last Q after earnings. Considering the reaction was muted to their report, we'd look for another angle here such as that to get it going.

The bottom line, if you must trade, trade small, trade those that had good earning recently, and most importantly, trade those that have strong technical setups.    We aren't out of the woods yet in terms of dealing with extreme volatility.    We have to be prepared that the market can swing triple digit point either way on any given day.    This can be a very stressful market if you trade actively.   In our opinion, it's best to go light and pick your play selection carefully.

...same old stuff

well that's what it feels like...when you have no patience like us, especially after the early week snapback rally.  Now, it seems its the same old as late day fades rule, yesterdays a bit earlier than the previous and then a battle at around 1450 on the SPX with buyers stepping up to close it above this line.  Indecision is running on both sides (but the shorts may be more nervous), maybe it is plain exhaustion and we all just need the weekend to get here quick and some headlines to give this market a course for the short term.  Still, yesterday was not without what's important to all of us and that is there were a few names off DJIM Journal that were making some noise...

MELI, seems a few agreed with us and came to play as MELI got pushed 5.5pts from lows to highs of day.  Earnings reaction are not always a first day thing as MELI showed yesterday.   Now with it showing up on a very THIN new highs list across the market, especially those tracking NCH's, we'd hope the idle money comes here to spend some time.

QSC, the other day this had a big buyer eating up shares at $4 even, millions of dollars worth, sooner than later this was pushed to the high 4's as such action seemingly always does.  Yesterday's pullback might be sufficient, a plus is it was on fairly light volume. 7mln to 10 to 11 to 3mln volume.   If this was a quick flash in the pan, you'd think we'd have more selling yesterday.  Anyways, this regained the $4+ level and closed at the highs of the day.   A quick volume move might be in store in the short term, watch for that as a possible entry if not holding already.

STV, EJ.... the concentration here the past week was to use STV as a possible pre earnings mover on the heels of WX and EJ.  STV had climbed about 25% since the week started and to many that is good enough!.    So, it is not surprising profit taking was part of the equation after STV released earnings.   All stocks are different and in the case of EJ the pre earnings move translated into profit taking the day of earnings giving it some leg room to move forward on a good report as we saw last night to recent highs.   As we've noted recently regarding WX...expectations are over the top on these Chinese IPO's.   You are not going to get a surprise reaction and a fast move up like with other nice earning reports that come out of the blue and immediately push a stock higher.    These Chinese IPOS' would not be trading on the NYSE now if tremendous earnings growth YOY didn't put them there in the first place.   Great YOY numbers are expected and you could say priced in.    What these stocks need to get a big push higher right after earnings is something almost impossible unless you are a GOOG!.     What we look at instead of YOY growth is how a company performs sequentially to get a better read of how business is progressing the past few Q's.    STV's revenue came in at 14mln after 20mln for the past 2 Q's, so there is nice growth that is ongoing.    Also, things like operating margins,  in the case of STV are just not to be found in many other stocks.   What these stocks now need is the firms to possibly set a good tone in their reports, initiations in the case of STV.   As we said, we like both reports and STV might have been a bargain last night after hours at $32,33,  but it is the market the will dictate the stocks path and a firm or two the day(s) after...a good market would help too!.

DJIM #46, 2007

Three sucky days, one so so day and a really awesome day.   This is pretty much the action from last week.    While this isn't for certain a bottoming action, we can see that this market is working pretty hard to fight off this extreme volatility.    There have been signs of the market rebounding from some excessive selling.    We are glad to see a somewhat different pace toward the end of the week and hopefully it carries into the coming holiday week.    This doesn't however ensure that we won't go down in the near future and break the previous low.   We have to be prepared for any possibility.    At the end of the week, we seemed to have some good action from the solar sector and some bottoming action from the big tech names AAPL, RIMM etc.  This might bode well for the up coming holiday trading week.     Traditionally, the Thanksgiving holiday week has been a strong week for the bulls.    Although we can't promise the same this time around, our fingers are crossed in hope for some good action.    Even just to show some good action, we can demonstrate to the public that this market isn't just a one way ticket, down.    Right now, the most important ingredient this market needs is the confidence.    The confidence level to see a market turning to the upside is comparable to that of August's level.    We as traders don't really know what to expect on a daily basis.    Do we have to deal with gap downs after gap downs or a strong rebound?   This is pretty much the same dilemma for everyone here.     If we put a big wager on one direction, we'd pretty much end up just hurting ourselves.    This is the period where our confidence level, our patience and our discipline level are being tested severely, and repeatedly.     If you took some losses, just leave it behind and do not let it get to you.    The last thing you want, is to go reckless and chase back the losses in an extremely difficult trading environment.

Our game plan here, is to go after the safest and most obvious kind of plays.    We are cutting our sizes down to absolute minimum so the volatility has little or no effect on our position.    Now it's easier to assume that you want to carry some hefty positions to enjoy a day like last Tuesday.   The fact is, for every huge day, there's probably four to five times as many really crappy days waiting to hammer you down at this time.    Since we are still facing a very uncertain market with extreme volatility, we have to use our disciplined judgement to carry ourselves through this downturn.    The bottom line, there will be a time, sooner or later,  where we can go big in the market, but now it's not the time.

Some potential plays for the coming week....

Solars, FSLR JASO STP SPWR etc., this group seems to go the same direction as oil price, and more so lately.    It might be too cute to think that this group can challenge the old high on its own while ignoring the overall market condition.    As long as you have both the oil and market in the green, this is the group you want to be in for some quick trades.    Also, since many of the plays in this group tend to move in a healthy percentage on a given day, we'd think smaller sizes is the prudent way to go.

QSC, it seems this little bugger refuses to pull back in any meaningful way.    Trust us, nothing goes up forever and we'd really like to see a good pullback sooner rather than later print on the daily chart.   If you missed the big run so far, there's no need to chase it aggressively knowing that a pullback may be just around the corner.    We've seen on Friday how quickly it drops from $5+ to $4.30 and that's just a quick 15% that nobody would enjoy.

PCLN MELI, MSTR, DLB are some of the recent earning plays that seem to trade much better compared to the rest of the market coming off earnings.

China plays, it is becoming obvious that it's absolutely essential NOT to play the earnings.   We've seen it from the likes of WX and now EJ STV so far that regardless the earning number and expectation, those stocks are getting sold hard.  It is also micro-small caps in general that are not getting a positive reaction off earnings at this time.   So don't expect too much out of these next little while since it's very much a sector problem rather than individual report.   Be careful with other China's reporting this week as well.  We'd look for the group/sector to see some sign of life before we are willing to really get back into some of these plays. 

Pre Fed

Many are lead to believe that last couple of day's action is due to the anticipation of a Fed rate cut tomorrow.     We think it's a combination of many factors that are setting us up for some really good action in this month.    However, Fed is still Fed and anything they say tomorrow can have a dramatic impact on the course of this rally.      As far as we are concerned, as long as the Fed addresses the current financial environment we are in and it's willing to adjust its policy to help the market, we basically get a green light for the next few weeks.    If for some reason the market sells off the Fed news, and especially if it's some good news, we wouldn't be hesitate to buy into the dip. 

Now the playlist...

Over 90% of the stocks on our watchlist are green and we just have to be very encouraged by the market action today, but FOMC on deck!!.  We'll get into detail of some of the action here,

Solars,  this group has been on fire since the Energy bill.   If you miss the low of the group on Thursday, then Friday would've been just fine getting into some of the popular names.    Today we are getting some really good follow through on top of the good action from last Friday.   Our top favourites are now STP LDK JASO FSLR...  we are also trading SOLF CSIQ as well to throw in the mix.     

China Plays, we are actually surprised that some of the more speculative names are still holding up and showing signs of perkiness.   This leads us to believe that there's definitely more pop to come with the whole sector.    The quality ones we like had some mixed action today with STV WX outshining EJ LFT by a wide margin.     STV has a particularly nice breakout out of the recent consolidation off very good volume and we think it has potential to return to its former glory.    We are definitely trading more aggressively toward STV after today's action.   With LFT, the consolidation is still between $23.50 and $25 and it may require some more time to really break out of it clean.

EPS winners, MELI had a very nice breakout today on very healthy volume.  It notched a nch and sits well above the recent range.    We were really hoping for an intraday dip to buy some more but it just never came.   It looks like we may just have to chase it if we want to get some more of this.  SIGM MA VIP MBT continue to trade with this market.   One thing we have to remind people that the eps winners do trade in a rational manner so the further away they move from 9 ema, the more likely that they'd stall and pullback.    We simply have to be a little patient with the eps winners and have a bit longer term perspective.     

The bottom line, this market still feels unconvinced for a rally and many people are still underinvested.   Alot of negative news are being absorbed by this market recently and all these are all considered bullish sign.    We have LEH releasing earning this Thursday and that may give us a clue of how the financial world will react, which is very important to gauge the market sentiment.

..some calmness

Seems many gurus are writing off the market saying this latest liquidity plan is just for the big boyz to get out higher and fry us all.  Hell, many have predicting doom since summer or years for different crisis situations, but we just keep playing along with many of you as we have done so for 3-4-5 years.   We love conspiracy theories , but we don't trade them unless they are ours and we won't give up now thinking this market can trade up still.   Maybe , we are too simple and too simple in our methodology... We/You are not giving our neighbour a loan and they won't give us one and so the banks have the same situation.   They don't trust each other and so the liquidity plan comes to fruition.   Simple...  someone steps in and helps both sides.   We are in favor of this intervention and think this will help soothe out things eventually.   It's a start.   The last time anything close to this being done  on such a worldly scale was after 9-11.  That puts things into perspective in more than one sense.   The severity of it all now and the ability to fight back is there as we've seen before.    Day by day things will clear... if the market can't hold a13500 DJIA or NASD 2700 close in the short term, we'd start to worry more from a technical standpoint.   But...until then we are ready to jump on Santa's sleigh and go for a ride with a few of his helpers.     Well, the DJIA did hold 13500 (barely) and the NASD is still some 30 pts away, but we all know what 30 points is like and that's a half day of a run these days.    The way RIMM, AAPL BIDU performed makes it even more plausible soon and therefore an opportunity to strike these names up again will come.   We are encouraged by today's action, the lows of Wednesday were hardly touched on the indices and we worked higher into the close.  A little grit and determination was seen today and everything held together after yesterdays big intraday slide.  ' If ' we get a manipulated CPI number premarket, we could have an added ingredient for a move starting for next week.   We are getting to the biggest time of the year for manipulation as the volume will soon start to dry up.  This is the time for all the manipulators to step forward..big and small and boost year end totals on all boards.    Surely, a BIG lot(s) will be there to help out the market.  You help us out with liquidity....we'll help up you in other ways, guys!.. told you we love conspiracy theories, we just like'em on the bull side.

LRN,   K12, how cool a name is that!;).  Anything/anybody to help the kids from Kindergarten to grade 12 surf online other than us is a great concept!.  Okay, so its a little more than that as LRN offers a 'real' curriculum of educational services, lessons.    A virtual public skool alternative to supplement the kids education.  A recent educational IPO, APEI serving the military/law enforcement had a big run since it IPO'd as we noted with LRN today in the $22's.  It had nice full day trading to the $25's and we were trading/taking positions throughout the day.  A 6mln float makes it attractive to boot.

MELI, a long standing citizen here and a recent alert this week at $45 was making some people very happy last night as it traded to $58 AH's off Cramer.  It's only a recap if you are not trading it this week as it's held its ground near highs through all the volatility we've seen.  We have always liked to sell to an incoming herd from another source.

MA,  another long term play here and again highlighted a few times this week hit a NCH with a $224 close with a converted touchdown and field goal day..10pts. No yellow flags with this machine.

Solars, we highlighted this bunch into the trading day and it was really the only 'group' action going with FSLR, ESLR leading the way off the upgrades mentioned in the morning.  JASO, SOLF, YGE all held green as well and if we keep seeing this group up, STP, SPWR will join the ranks again.

MBT, VIP, after making NCH's recently they have tested 9ema and seem ready to resume if the market gives them a chance.   The telecom sector has been one of the leaders on bad days in the market and with Russia's political picture clearing up it should bode well for these ADR's soon enough.  These have always held up during the rocky days of November.    ROS,  a secondary play on the above when we started coverage back who knows when is a clear beneficiary as its practically a 'state owned co'.  The other two offer volume and so we'd continue playing with them.

RICK, so this is where all the bankers are striking up liquidity plans these days!..No wonder they have no $$$$.  This one just keeps on doing a slow dance up.

GXDX,  no big surprise the traders didn't show up the day after EPS.  We've outlined numerous times recently that small/ float EPS plays are not getting the love immediately as we have been used to in the past. The chasers are still not there as we saw today and since this stock had a very nice pre earnings run, its really not surprising to see profit taking come in.  Keep it up there on your potential playlist.  A pullback always balances your risk/reward out.

Oh yeah, RIGL,  wait till phase 3 comes out, it will go to $100..;).  The beauty of this action is there's crazy foolish money out there still to play feverishly and we like that.   Along with interest seen in the IPO LRN,  it gives us more hope in the coming weeks for plays as there is a willingness to put money to work.  It's sporadic now and sometimes doesn't last too long , but that could all change as spreads widen in more names when the volume starts to dry up into the New Year.

DJIM 50, 2007

As the year winds down with this upcoming last full week of trading, we find ourselves at the crossroads here.    We are here because there's definitely two distinct possibility in front of us.    One possibility is that we roll over from the recent gain and try to test the November low and who knows what happens after that.   The other possibility is that we stop going down right about here and churn our way upwards, in an apparent and somewhat violent manner.

Lets talk about what happened in the past week first.    The action from past week is purely centered around Fed decision and we can understand how market participants feel after the decision.  They have a hangover.  In our opinion, unless Fed surprised us in the optimistic way, this market would get sold off regardless because  as we had come off such a good 2 week rally from the November low.     In terms of Fed's decision, in our opinion, they are doing the right thing even though it may not be "instant market friendly" kind of decision.     The bottom line with the Fed is that we have the Fed on our side still.    They aren't being ignorant contrary to many people's thought and they are simply being patient to help out the financial crisis.   This of course isn't being bought by everyone because many wanted that "magical potion" from Fed that can solve all of the problems once and for all.    Believe it or not, many if not most of the problems associated within the financial sector still need to be addressed and resolved by the companies involved themselves.   In other words, market needs to do the most to bail themselves out.    This is only healthy in the long run.

Too many people are too negative toward this market and too many shorts have piled onto the recent upward momentum in our opinion.    Basically, we believe that when you want to trade this market down, you definitely want to do it with good timing.   First of all, you want to go negative really hard at the beginning of the crisis and in a seasonally slow environment.    Right now, there's definitely no saying that we are at the end of the crisis but we are definitely far from the beginning of it.     People are fully aware what the problem is and measures are being put in place to correct the problem.   It does take time.    However, you don't want to go really short when things are being fixed, slowly but surely.  

So against all odds, we think the second possibility is that this market churns upwards has much better probability.    In order for this market to dive and take out the November low, you'd need some really disastrous news or the proof that we'd go into a real recession to do that.    Somehow we just don't think any of those two things is in the cards at this moment.    At least, not during the Christmas shopping season, we might add.

Earnings Earnings and Earnings!    What more confident catalyst you need other than earnings?    We have them coming up and the way this market has been setup, anything better than the lowest expectation can cause a good rally upside.   Of course, that also depends from company to company and sector to sector.     Last week we had LEH reporting and we have to say markets reaction has been very positive, despite the drop of all major indices.     In the coming week, we have GS reporting and this is considered best financial house there is.    Again, the way it sets up is that the shorts wanted to push it below $203, which is the recent low and knock it down for good.     If this stock is at $240, we say the odds of getting sold off is pretty high regardless the earning number.    In our opinion, the trade definitely calls for the upside when the number is released.     The next important report in the coming week is RIMM.    In our opinion, the recent 20% drop from the $122 area took away any bearish surprise.    It feels that shorts have pressed a bit too early going into this report on the heels of a couple of firms analysis of RIMM.    It is "unlikely" that RIMM would report a slowdown in its business and we can almost ensure a massive squeeze if it doesn't play out the way bearish camp wanted.     There are quite few other reports in the coming week which include  NKE FDX MS BSC BBY ACN JOYG GIS... quite a few different and important sectors.   This should provide us a good picture whether our economy is heading into a recession or not.     Again, we believe in our thesis that market rarely goes into a crash into an earning season.     Basically, we'd be much more nervous being short than long at this point.

Now some plays....

Solars, is it us or does it feel that most if not all solar stocks are being setup conspicuously on Friday?   Just look at some the chart setup from some of the popular names and we swear they are all setting up for a good run-up in the coming week.     By the way, they are being setup(in a very positive way) on a day that all indices dropped well over 1%.    This is simply amazing which tells us that people want to own these things at year end.   Basically we still have a bit over a week to window dress these names and it isn't a myth that the best stocks get owned at the end of the year to show them on your book.

STP/FSLR/JASO/LDK,  these are what we considered the favourite solar names to trade last week.    With the exception of LDK EPS Dec.19th, which we are still waiting for the audit report to cast away the cloud, a start today as (independent Audit out according to LDK concluded allegations incorrect), the other three are being setup superbly going into next week.  YGE, IBD #92 is also enjoying a nice trend change.

SOLF/CSIQ, these secondary solar plays are also setting up nicely, especially with SOLF.  The 9 ema has just caught up with SOLF and the next move might be big and will likely get this thing out of the recent trend.   With the entire solar sector heating up, we feel the move is very likely to be up than down.  ESLR had 2 nice days after Thursday premkt upgrade and follow up news.

Asian stocks, as seen in charts this weekend they took the week off after a 2 week recovery, following overnight numbers from HANG/SHANG they will most likely continue to be out of favor to start the week. 

LRN, 300k volume and a higher finish on day 2 of trading. If this thing had any volume Friday, it might be already looking at the high $20's.

MELI, this is the play you only can wish we'd all bought more of before Cramers mention.   On the other hand, this is no longer a strange name to traders and with its tighter float and story, anything is possible.    Basically, this one is better now with Cramers exposure than before which is largely an unknown stock to many.    The trading in this one is rather volatile so we'd continue to be inclined to buy on intraday dip and sell into strength.   It has worked beautifully in the past so there's no reason to change the strategy with this stock.  The trend is firmly to the upside since the break at $45.

RIMM, we've been buying some late in the week looking to hold up to the earning report and then play after its EPS is digested.    Again, in either case, if this company reports a good number or the market rallies, we'd be all over this beta name along with other heavy favourites like BIDU AAPL GOOG etc.

VIP, MBT..also seemingly against all odds these were green on Friday, closing around highs of day.  Another Russian stock, WBD pulled off another impressive Q with what looks like their best EPS number yet. Again as we 've seen too many times lately, nobody was interested in earnngs, this time because of CPI data headline.   Simply, you had pockets of strength to buy...the solars, the biotech, the russian stocks late in the week despite the volatility to the downside in the overall market.

Bottom line, this is the time where you have to be playing the most popular stocks.   We have seen it that the small caps aren't exactly working so you might as well join the crowd.   The more crowded it gets with a good mover, the better.    We can even see it with some of the recent story stocks from the biotech sector like RIGL SVNT BMRN etc.   You trade what others trade, when a stock is showing upside momentum that is.   Only then, you'd have a chance to outperform others.

Santa showed up...

The so called Christmas rally or the Santa Claus rally has been something of a mixed bag in the past.   There were years we just wished the Christmas season would last longer and there was last year which we all would like to forget.   This year, Santa is back to give us traders something to remember as of now.    This of course, is probably due to the fact that we had a very very tough fourth quarter coming into the Christmas holiday.     All of the problems we have had to endure as traders during the last while, from credit crunch, housing bubble and recession worry are being put behind this last few days of the year.    Put it this way, we won't deal with it until the new year.    It is about time that we can end this year in a rather peaceful way.

If it's peace you want, then you are glad to know that major indices have held up well and many big cap stocks have either inched up or stayed unchanged, in a non volatile way.    If you are like us who like to take advantage of this opportunistic time, then the only thing you'd be doing on a boxing day is buying and selling hot stocks online.     People, if you are serious in trading like us, then you would've tied yourself to your chair during the last few trading days.     These past few trading days have produced some of the best action since early October.    And if you were hurt by the downturn in the late November period, then now is the perfect time to get some respect back from this market.

Basically we are about half way over this holiday trading and we'd imagine most traders would be back in force after Jan 1st.    This gives us another 2 1/2 holiday trading days to do our thing.     Right now, we are playing stuff that are currently in play.    It is crucial that we stick to that theme for the next few days.

Solars, 2007 is the year of the solars and we think we'll carry some good momentum into the new year as well.    Today's action seemed to be spreading all over the smaller and less established solar players which include SOLF CSIQ CSUN ESLR CTDC etc., while the bigger names seemed to pause to catch some breath, with the exception of FSLR.      Yup, we are playing just about every single one of those smaller names today and we'd continue to play until the momentum stops.    Keep in mind, many if not most of those less established solar names are still not proven in terms of earning track record.    When some of these names reverse, it is crucial that you don't buy the dip thinking all solars are created equal and have awesome earnings growth.     Buying dips on plays like FSLR STP JASO SPWR... have good probability that they will come back in a hurry.   Buying dips on the smaller ones may get you into a situation that you'd lose another 30% before even seeing an uptick.   Bottom line, you have to know what you are playing distinguish the type of plays among solar names.

MELI, then there's this one!   If you cashed out last time after Cramer's mention, then today's the day to get it back.    We alerted early in the morning that it looked promising but we did not imagine it'd pull a move anywhere close to 20% today.    This one, unfortunately we have to agree with Cramer for once, has the marking of being a monster.     Yes, it can definitely go into triple digit based on what we have seen with other similar type of stocks.

Bottom line, there's no need to go nuts with all of the hot plays out there and just trade the ones you are most comfortable with.   Stay focused and stay clear headed, and we may just finish this year on a high note.