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!

...like a hot knife through buttah!

You can only churn and churn so much before the inevitable happens.  The inevitable could be a spike up or as said last night it could change in a 'flash' to the other side...down.  There is a mystery out there as to what transpired this afternoon.  In our view,  we churned so much the past few days, we became butter.   Briefing is left blaming it on the Bear Stearns hedge fund trouble because of subprime.  Hold on there...didn't we get past this and the possibilities that the subprime story could have created.  This news was also known on the 18th without a tear dropped. Another view is the bond yield soared!.   Puleeeze.... we just peaked at 5.30% and today it "soared" to 5.15 from 5.09%.!  Come on!.   All we can confirm once more is traders seem to go to the bathroom holding hands.   What is about 2pm that makes them go?.   Just like in skool, they all are seemingly instructed to holds hands and enter..or is it exit as was the case today.   As far as we can see, and we really don't want to see too far as we are trading for the moment (short term).. is that today was another day of churning that made holders weak and they were then easily sliced through at the first sign of weakness...like a hot knife through buttah!!!. We all lose patience and the slightest tick of selling showed many the door, even if the news is not clear or if there is none at all of true importance.   They wait and wait and if the tick aint up, it doesn't take much to create a wave of selling.  Today it happened in a flash and it wasn't something that headlined , but one that left many scrounging for answers as to why after the close.  

We are looking at the Nasdaq here and will not get that bearish feeling maybe until/ if 2590ish is broken end of day.  What we expect here is the gap from Friday to hold and some buying to come in tomorrow.   Now, if we get some morning news to favor the Bears, well then we ain't going to get the buying, are we?.  

Basically, there was no real damage done to most of the stocks followed here at DJIM...

Still, this morning provided some opp's to either take some profits or just make the late selling not that big of a deal in a particular stock.  The names we are alluding to are stocks like....

KMGB, was a either a great trade off yesterdays plunge or just a good excuse to start another position in it.  Not bad if you picked up even at the open and not during yesterday late day fall, $23 to a high 24.70's and not a bad finish after all.  We'll hold tight.

SDTH, last night we pointed out the potential of this catching maybe some of the China mania we saw yesterday.  Maybe it spilled into it this morning, but we think it is more of this being a Chem-fertilizer with excellent earning then some beaten down cheap China stocks they've been speculating on into today's action again.   You could have enjoyed the trip to 5.90's or/and you could be very pleased with a NCH on this by close. Volume was good and there was interest left in the day for it not to be involved in the selling activity. A few were panicky, but the smart ones might have bought it back up by the close.  Last night we said don't be surprised.  Tonight, we repeat don't be surprised but with more conviction.

GTLS,  it made a nice move 26.80 to 27.50's after noted today and then got vacuumed by the market draft later on.   Well, at least now you know how it can move...up and down and why we've liked to trade it some before.   As far as the timing of the alert and how it coincides with a 1 minute chart today, all we could say is to each his own...own trading motives.  Some background on Chart Industries inc....manufactures and supplies engineered equipment used in the production, storage, and end-use of hydrocarbon and industrial gases. It operates in three segments: Energy & Chemicals(E&C), Distribution and Storage (D&S), and BioMedical.  A MS analyst gave it a $38 buy tgt today and said this is a possible next in line to Dresser-Rand which doubled since October.

Despite the close today, some morning movers held on to what they could to close green. These include CMED, TBSI, CROX, MFLO. CUB . As we said before....nothing was severely damaged that we follow and we'd look to capitalize on any rebound after today is digested late this week. Remember, we expect and welcome volatility this summer and considering today was nothing compared to what we witnessed just over a week ago in that 3 day sell off, it's not the end of the world as we know it.....Simply if you didn't act hastily during that plunge after day 3...why should you now with nothing concrete to push you over the edge.

A nice reversal is quite important tomorrow.... no matter what you make of today's exaggerated move.

Better than nothing....

"We are looking at the Nasdaq here and will not get that bearish feeling maybe until/ if 2590ish is broken end of day.  What we expect here is the gap from Friday to hold and some buying to come in tomorrow.   Now, if we get some morning news to favor the Bears, well then we ain't going to get the buying, are we?." 

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

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

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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!