What's to come...

We aren't exactly sure what may be in store for us from this market the next few weeks.   What we do feel comfortable of doing right now is trading on reduced size with selective picks and if and when we say `morning trade opp`...`flip` this means , we are looking to trade those first,  not get in bed with at this point.  We state our intentions.  Those not in the trading hood yet....time to get with the lingo.  This all should be obvious from the last few Journals.  We are happy with a one night stand at this point because of what we have said on the market.  A quickie ain`t bad either.  If something was lost in the language the last few days, maybe this just cleared it up.

We don`t like it the past few days, but we keep on looking for a point or two, here and there and everywhere..  If you can`t flip or be there for a morning opportunity,  just leave it alone and wait for something more than a trading opportunity.  We had members throwing up today and ones checking for news if a bomb had dropped on a Jack in the Box because the stock we gave at 78 premkt was at 77 in a falling market.  If trading causes such reactions in some, seriously consider stacking the Zantac or do something completely different.

To us if finally just feels that this market needs to crack in order to get the monkey off lots of people's back.   Did you notice the SOX was red end of day, while the NASDAQ finished up 22 and every other sector was green!.  You cant go forward if this one doesn`t show leadership of some sorts.  It all looks a little screwy now.   As we said before, we are thinking it is the overseas markets that will spook our market here overnight.   If we can`t do it ourselves, someone will do it for us from the other side.   Just a hunch.   Seasonality favours a pullback here and the run-up from this market also suggests some consolidation here too.    Despite our feeling, we aren't going to walk away from this market completely but instead, we are just going to be trading lightly with a cautionary hat on.    There definitely seems to be lack of a theme now that the earning season comes to an end.   From our experience, there's almost always some jittery at the end of the earning season.    Ok onto the plays that are keeping us interested this week...

GTI, this one just amazes us!  Sure, the performance of the run-up isn't killer like but the steadiness of it makes it a quality hold.    We added a bit of this one today near the end.   Again, this one is also an IBD play but we think there's just much more to it than the IBD crowd.

TBSI,  a new EPS play that came around yesterday that also happened to be yet another.... you guessed it, IBD play.    The chart looks very  powerful in this one and we can feel the momentum crowd having their hands full with this one.   Take it or leave it, this one is in play and we are getting involved as well.

NGA, perhaps our feeling has been exaggerated by the split announcement and maybe all is still well with this play.    No matter, we can not let our own emotional feeling from making good trading decisions based on the actual action of the stock.    This one did come back very nicely and in fact notched a new closing high.    We bought some back today and feel the IBD theme is still intact with this one.   We'll see how this one develops next couple of days.  Again, we`re back but we`re not back in sizes that we carried since the $10`s..11`s..12`s

FWLT, we are watching very closely on this one for any sign of pickup in volume/strength.   Perhaps this is the one with the highest probability of making it to the triple digit club on our watchlist.

Bottom line, we are being very selective in this market right now and try not to get carried away with sizable positions.

Ho-Hum

A day of rest it seems.  Not much conviction, a few flickers of green and then much ado about nothing
by the close as the Bulls got the sword in it's butt and backed off for the time being.  Sitting Bull.  At this point, we are not expecting new stocks to emerge as quickly. So, what we do is look to the stocks we have played or watchlisted this Q to see if these names have any potential if the melt up continues.  Preparation is best, trading stock for the sake of trading is not.   A little boredom might sink in, but sticking to your style..your niche is essential.  Easiest way to curb your need for a hit might be to look at your successful trades recently and see if what you are considering to trade has any of the characteristics of your winners.  Simply, we are not seeing a NGA, IDSA, LXU, CROX emerge. Still micro-small caps will still continue to expose themselves while you hear earning season is basically over now.  So what do we do?, well we back off and just bother each other over IM until a play comes along we like and fits DJIM.   So, considering we are not seeing anything new come that needs immediate attention....here's a few you have seen cross the DJIM wire recently that we are holding and/or adding to today.

TBSI, we like to nickname our stocks. Tipsy is fitting for TBSI in the first hour today. We thought we'd better get the barf bags out for the quesy ones as it slipped from a good open to low 20's. We knew of the shipping D-grade before the open on a few names but we did not think this would it would spread to the TBSI,DRYS and a few others BofA did not cover.  When the drop started, the first thing we looked for was how the sector names were performing.  Seeing a few names had rebounded already, we averaged down and took more TBSI on.  By the early afternoon, it was back grinding away at $21 and eod definitely had some steady buy interest.  If this this makes it to IBD this weekend, it will be a new name to many and will most likely have interest next week. This one is completely different than the IDSA inclusion type play goal of $15 where you expect to sell the following Monday on the exuberance follow through.  This a dry bulk shipper,  a hot sec with earnings numbers that will be revised after their report.  We mentioned DRYS and the sector back in April, few money players might be looking for a new name to grasp. We hope Tipsy could be it.

CROX,  This is as pure a earning play as you will ever get.  You can't beat this Q's results and guidance. Solid since our first buy-in mid 60's AH, it is now closing on 80.  We said the guidance was crazy and with a little patience you are seeing what a stock that actually has a solid company behind it can do.  An upgrade was noted yesterday, don't be fooled these upgrades don't show it's worth immediately.  It's the D-grades that you should worry about immediately. Volume was there today, highest since earning day.

GTI,  hung in there and looks to be shaping up for a try at IBD tomorrow. This one is quite different than the
IDSA, NGA we have considered as a IBD inclusion plays.  There are hedgies here that will knock you
down silly if the trip to $15 gets silly with exuberance. Think of it, you are a hedgie and you know the crowd
might be bidding hard for 15, maybe you'd just set a wall of sells at/near/above $15 on a Friday?. Could be a lot
of smoke and mirrors tomorrow...also, you don't know who might be pushing it up, including other hedgies late
in the week...and you don't who's waiting at $15 if it gets there.  Take out the IBD stuff and you have a pure turnaround story who's bottom line is changing. Sooner than later this will be at $15 +....Volume should surpass 2mln easily tomorrow and like CROX volume maybe the kick start to a good close.

Speaking of volume..this is what is lacking right now in some other holds like FWLT, LXU etc.  Like CROX today, volume tick to the upside should be what gets these stocks rolling again and gives us a reason to add shares.

DJIM #23 2007

Last weekend the hope was a few billion dollar M&A deals to get the market stimulated again. A few billion turned into 60 billion worth of deals or more brought back from the Hampton's. Our one concern to stymie this market was if the Shang' would sooner than later unravel our market again.  A few did their best trying to make the stamp tax a double shot of the Shanghai surprise we saw early in the year. We didn't even touch on this in Wednesday's Journal because we saw it as a non event. As far as we're concerned, the Chinese government is gonna do things their way and it will take a few more maneuvers of this type to cause the bubble to burst and spread to here.  Likely they'll be careful now after the early year swoon.  Soon after the FOMC minutes came and we were off to the races.  Well...races, but not what we would call a sprint!.   Still...what last week did was provide some DJIM stocks an opportunity to come of their shell and play....So on to some names heading to the trading week...

TBSI, we are all familiar with this shipper now ( #8 IBD ), we were adding late in the day and think this is ready to resume upwards. While ESEA looks quite extended, TBSI keeps putting in tails off the 9ema (showing support).

ESEA, this shipper intro'd Thursday night turned into a 16% move come Friday. Yes, a full 16% as the open price (13.40) and later a dip gave a chance to catch most of this move. Of course, we took some profits but we were back for more during the day. The PE seemed to be below the norm for these shippers and probably helped out its cause.

DRYS, is another Greek shipper we took a position in.  If this sector continues to climb, we like where this one sits on the chart to play along. This is a good and fast mover when caught at the right time.  We took a smaller position as we wait to see if this has the ouzo to bust out.

MR CYNO, a couple of names here for months made it to IBD's front page this weekend as both busted out to new highs. CYNO was basing between 30-32 for about a month, while MR is getting quite jumpy, you really have no idea day to day what it is going to do.  Sometimes with quality names you just have stick it out.  The front page coverage might get them some more air this week. We'll see...

PCS, TTC, MFLO recent pick ups closed at NCH's or close.  A few others that have been around longer at DJIM.. GTI NTLS RCCC TRCR also remain strong.

FWLT CROX MA continue to get DJIM trading dollars, mostly on positive index days.  Not much can be said that hasn't been said about these stocks since their earnings.

NOVC, as we said, the easy money has been made and we are only looking to trade it when there is some signs of life. The biggest mistake you can make is trying to get a piece of NOVC, if you missed the first move.  Too may are looking for a repeat move.  It's not going to happen to that magnitude without more news, so there is no need to feel left out.  Also, do understand it is inevitable with biotechs that firms come out and raise targets to very high levels. They have no choice as now there is finally news.  These targets, sometimes 50-100% higher are looking a year and more down the road and are calculating a perfect storm of everything going right to that time.  The chances are a biotech will leave your mind in a week or two as another takes it's place.  It does with us.    Unless you are a long term speculative investor, you are unlikely to see those price targets hit for NOVC, CYBP etc.this summer.

PLPC, bought a few shares to tuck away, maybe this has a little HTC, EML in it. These types are only if you have space and time to spare in your book for some not so liquid stocks.

DJIM #27 2007

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

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

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

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

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

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

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

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

DJIM #28 2008

In a typical holiday week trading fashion, things just went by quickly.    At the beginning of the week, we stressed out the importance of holiday week.   True to our belief, there was no shortage of plays and many were very opportunistic.    As the week has gone by, we are basically back to the point where we expect a flurry of earning reports.    Unlike the other quarters, this earning period seems to last the shortest with possibly the worst market reaction.    This is typical of this time of the year.    However, judging by the enthusiasm we've seen during the past few weeks, it doesn't really feel that we are slowing down, as far as trading goes.    Perhaps this has alot to do with the fact that the market is sitting relatively near the year high.   When the market is at or near the high, there always tend to be opportunities, and people always tend to be optimistic and are willing to put money into work.    This is just the way our psychology works.

So far, we had RIMM to thank for.   In the coming weeks, we are going to see more reports coming out.   Some reports will be praised and some will not be.    As far as our game plan goes, we are going to sift through reports that spawn the strongest trading reaction, positively of course.   We'd try to catch those that hopefully give us enough time and room to play.     

here are some strong plays from last week that may carry over into the coming week....

DRYS/TBSI, these two are the only two shippers we played last week and both of them pretty much closed out the week near the high.   At this point, we like DRYS's chart slightly better as TBSI looks a little too extended at this point.   However, we've learned too much from the past that we can only be so cautious.    A play will run its course whenever it decides to.   For us, even when we decided we should raise our cautionary flag, we'd still only keep it in the back of mind and react quickly once the reversal does happen.    Basically, we just have to be better prepared when the action gets too extended.

LPHI, this one is beginning to look better now.   After its initial sell of and the breach of 9 ema, it seems to stabilize the last few days.    If it can break the $36 area, we'd be back in full force.

AZZ, this one had a pretty good earning reaction and last few days have just been phenomenal.    It's now back near the old high and we'd see if it gather enough momentum to start a fresh legup from this point.

FWLT, volume didn'st seem to drop that much last week.   This is a good sign as the stock basically broke out from its consolidative trendline.   How high can it go or will it go?     We don't know but we know that we'll play this one untill the music stops.

FSLR/JASO/LDK/TSL,  we added TSL to the group last week.   This group has done some nice work last week.   As long as the 9 ema is in tact, we are trading them actively.

PENX, can this one pull a LPHI or RCCC?   In honesty, we'd like to see this one consolidate a bit.   The sooner it can consolidate, the better chance it can pull another runup.    We are keeping our eyes on this one very closely.

DDUP/SCOR, these two recent tech IPOs are hot on our list last couple of days.   We like their action in conjunction with the rest of the tech sector.   We think the runup will definitely carry into next week and we'd be trading these two aggressively.

Other notable gainers last week include SPAN MBLX GTLS CUB BTJ TRCR...

..How about...??

..we just put this day away and watch the All-Star game or something?.  Honestly..despite what looks like a terrible day on paper..NASD down 30, DJIA almost 150, it all seemed without real conviction on the sellers side.  What transpired today was an overloaded bag of expectation for Bernanke to give this market a lift.  You've heard us talk of Paulson repeatedly coming to the rescue of the market... go back recently here on the Journal and see how it coincided with the recent market rally......when he speaks, we go up and this is somewhat expected of Bernanke speak..unfortunately.  Those in the market loop knew Beranke wasn't going to let any tricks out of the bag today...it was what they call an 'academic' speech.  Somehow without him spilling the beans the market used it as an excuse to turn back to the HD guidance and somewhat unravel the market later in the day. But, seriously how much unravelling is there to do when the market is extended as it was heading into today's trading?.  Won't take much!...NASD up 5 straight days, the DJIA/SPX near resistance points.  Today was a distribution day no doubt and it was simply time we eased on the accumulation of stocks.  AA was never the end all of earnings reports, it's just tee-off time in our books for another season....but as we say around here... it's earnings season 12 months a year at DJIM, as the likes of PENX never seem to put a close to an earnings Q...

What were the notables on this distribution day?. You can't expect many as distribution doesn't play favorites and usually goes after biggest gainers first...so, it is no surprise most of the closely followed here closed in the red...A few stood out.  Despite the early sell off gap in the Solars at the open, a couple of names showed vigor as any sell off in the markets taking them down intraday was shrugged off constantly....

LDK, noted this one off the chart last night.  It definitely trades choppy, but there was interest throughout the day as every dip was being bought up.  All you have to do is look at the last dip as the market slipped deeper into the red late and the recovery it made closing back near the the day highs at $37.

TSL, whenever a momo stock can make an intraday bounce of 6 pts, you have to give it kudos for its days action.  So, we'll give it such for today.  FLSR might have a needed a rest , don't you think after yesterday?.  A downgrade didn't help but a 4 point intraday trading range is nothing cry over.  You really have to take a 4+% slide into context here and with any momo stock trading at high prices.   It comes with the territory.

TBSI, this is where experience and an understanding DJIM stocks came into favor today.  Don't remember exactly at what price we started covering TBSI at DJIM,  but one thing you might have seen and noted is the dips this stock is capable of.   If you've held it or just watched, you know a dip has been an opportunity to re-enter this stock.  Sure..today's dip was exaggerated but it only warrants more of your attention and action.  What happened today at the open?. They bought a vessel for 29mln.  Siince when is that a bad thing?.   Some saw it as a reason to dump, a flood ensued and what was a damn extended stock as we have noted recently...fell from 33 to 27's.  If all you wanted to do was flip, our alert probably gave you a fast flip as it moved to 31.50.  We traded some and held some of what we picked up in the 28's and are fine with it at the close as it held above 9ema.

Speaking of 9ema...well ...we don't really in this case as it's speculative junk, but you might want to give LOCM a look very soon for a possible trade. Again, remember we are not in for a relationship on these types as when we alerted and watched it go to $13+ the next day recently.

CCF, you probably remember this one from an alert play in January that turned into a little winner. At that time, it reported something like .62 cents to get our attention. Well, this time it reported .68 AHours, if you forget the split it did for a second.   In other words, this Q is better EPS and Revenue than what got our interest 2 quarters ago.  The question is who wants to get involved tomorrow in a EPS winner after a day like this and especially one stock that is not very liquid.  We`ll see tomorrow if it can attract interest, liquidity most importantly of all.  We don`t want to be stuck with nice size lots with no one to sell it to at the beginning of earnings season in the days to come....might as well stuff a fat ceramic pig instead...

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.

You want tech earning?

Well, there you go tonight!    The highlight is the two of the biggest technology companies reporting tonight.   We are not going to discuss nor analyze their earning because there's tons of dedicated websites/articles/analysts for that.   What we keep an interest on is the reaction for each respective stock in after hour.     The action doesn't look too positive.    This is probably due to the expectation that's been set in place for these companies.   After all, the rally we've been having the last little while is largely due to the anticipated good results from the tech sector.

For one thing, tomorrow is going to be interesting as we'll be able to see if there's going to be a change in shift of the trading mood.     It's important because when we are in a bull mode( so far), every downtick or dip can be bought safely in anticipation of a bull push sooner or later.   When the bull mood changes to the cautious mood, the dip may not be bought aggressively or at all and this can dramatically lean heavy to the other side of the spectrum.    Of course, we don't want to make a quick judgement either if the market opens sluggish tomorrow because there's still tons of tech and non tech stocks that matter to this market that haven't reported yet.

Bottom line, don't play the earnings before hand and play them afterwards.    For us, it's also true that big companies make up the headline but the small companies make up the profit in our portfolio.     So, we keep in mind the potential change in trading mood but still actively hunt for good quality earnings report from small and mid cap sectors.

DRYS, if you really had to point out a real winner today then this one is on top of the list.   Yesterday's sluggish close is all but distant memory.   Of course, we'd wonder if it wasn't for that price target increase from Jefferies, would all these shippers even go up at all?    At this point, we are simply playing some intraday moves and aren't holding any over night.   We still feel the risk to enter for a long position is too high and we'd prefer some consolidative action first.

LPHI, we are parting away a fair portion of our position in this one.   What this play has done for us the last few days has been nothing short of phenomenal.   It's just a little too far extended at this point.

Solars, if yesterday didn't raise any cautionary flag from this sector, then today it's screaming that the sector is breaking down.    Believe it or not, every one of our favourite solar stocks we've been trading the past while, including FSLR, TSL JASO LDK, have broken below 9 ema today, all at the same time.    These stocks have not closed below 9 ema in about one month of trading time and that's about 20 trading days.    Now, this may not look like anything meaningful to some but to us, it probably means the fun time may be come to an end with this sector and we are shying away from this group untill some dramatic positive catalyst happens.

LKQX, we bought a starter in this one as the reaction to their takeover of Keystone has been very positive.   We are going to be watching its action closely.   This one is sitting on a huge short interest, fyi.

..can't we all just get along?

...Can't we just use the late afternoon pre 4pm Journal edition and not the 4:01pm GOOG edition.  What was an impressive day with earnings from many giving the hyper bulls more ammo turned quickly sour with GOOG's results.  Maybe if GOOG gave guidance, we'd not be sitting here guessing what will transpire next.  There is really no point to guess the extent of the damage tonight.  A first step is to see reaction of firms in their notes in the morning and then to see where the spillover might or might not be.  Do all the better than expected reports, including NASD tech get washed out by GOOG's report?. The short fear mongers will definitely give this news a good run for your money.  All we could do is watch what our closely followed do tomorrow and that does not mean just in the first hours of trading...Back to before 4pm with DJIM stocks...

AP, opened strong and then basically flat lined the rest of the day. We couldn't have asked for a better follow through day of about 4%.

DRYS, TBSI etc., the shippers are getting positive morning calls day after day. At these levels we are somewhat fearful of nosebleeds to hold these overnight. The best way to trade these is to watch for more morning calls on the sector and trade them from the open and swing some points out of them.

LDK, last night we noted some of the targets on it and the fact that it was only 7pts off IPO price. Well..make that 10 now as it was the most impressive solar out there. We'd look for a pullback if this missed today even off the NCH as the solars might get some pressure... FSLR is off AH about 5 pts due to an offering of 9.65 mln shares... "We are selling 4,000,000 shares and the selling stockholders named in this prospectus are selling 5,650,000 shares of our common stock. We will not receive any of the proceeds from the sale of shares by the selling stockholders."  The interesting thing about these offerings is they should be assumed to occur sooner than later.  You don't sign up 1.28 bln in contracts and continue to work out of your single garage...you need a double garage and you need to fund it.   Still, one of the shorts fave words is dilution and they will work it.

TXT, we thought this could do a quick move off the open and it that shooting 6-7pts.  Short lived as it might be, it serves some of our subs' trading tactics.  We liked the report and if the market sentiment doesn't turn here, we'll hold on to the starter.  We think it has upside off this report ...Reports Q2 (Jun) earnings of $1.69 per share, $0.24 better than the Reuters Estimates consensus of $1.45; revenues rose 14.7% year/year to $3.23 bln vs the $3.09 bln consensus. Co issues in-line guidance for Q3, sees EPS of $1.45-1.55 vs. $1.53 consensus. Co issues upside guidance for FY07, sees EPS of $6.35-6.55, up from previous guidance of $6.10-6.30, vs. $6.31 consensus; sees FY07 rev growth of approx 12%, which equates to revs of approx $12.87 bln vs. $12.6 bln consensus. Also announced repurchase and stock split. Primarily aviation, defense play.

Whatever happens tomorrow, trading opportunities will still come forward.  If you looked over VMI, BMI from last nights Journal lead...or a quick in the form of SBEI's to $7, a DDUP move today to almost $29 shows there is and will be plenty of plays depending on your style.....but what we are gearing for and anticipating is micro- small cap earnings to concentrate on outside of the GOOG world noise.

TTPY, also have a look at this recent IPO, next generation radiation oncology equipment that is gaining acceptance in the marketplace.

DJIM #30, 2007

If there's one thing the market has taught us in the past, it's that you have to always be prepared to face the surprises.    Out of all the companies that have reported last week, nobody expected an earnings miss from the growth behemoth Google.    Sure, some of you can argue that you saw it coming, and that sooner or later it'll happen to Google.    However, lets really be honest here, there was just no indication or any warning from the company or analysts that suggest a short fall was in order for Google's current quarter.     Well, it just made this situation very tricky for this market.   Of course, one company cannot bring down the whole market.  So, CAT helped.  A few of the well respected and cheered companies can certainly derail the market's bull pace, that's for sure.    So what we are going to be keeping an eye on the next little while, is to see if there's going to be a fundamental change in market participant's trading behaviour.    Usually a market participants sentiment would directly translate into his/her trading action.    Action, is what most of us are concerned about.     Well, we do this sort of mental checks often to keep us disciplined.    Before we commit lots of our capital and energy into this market, we have to make sure market's in a favourable environment where mistakes can turn out to be forgiving, not disastrous.   Now lets review some of the plays from last week....

DRYS/TBSI, this duo along with the rest of the shipping sector, has enjoyed one of the most profitable weeks in their lifetime.   It seems analysts are just jumping bandwagon with one upgrade after another.   Nobody wants to be left behind when the whole sector is hot and in play.   Of course, it does make them smart to act the "correct" way.     The difference between us and those analysts is that although we also jump on the bandwagon, but we only jump on because of the trading opportunities.    We can jump off just as quick too.    When dealing with a hot sector, we'd definitely separate the stock action from the companies' business.    Basically, even though one's business may be the excuse to explain the stock behaviour, but ultimately, we trade stock action, we don't trade a company's business.

Solars, this sector has seen some intensive selling for the first time in a while.   Sure, you can say it's just healthy consolidation and it's just a matter of time before they break up again.    For us, until they break do break out, we'd remain very cautious on any bounce attempt.    The only exception from the sector is LDK, which had some company specific news.   We'd keep an eye on that one to see if it warrants further trading opportunities.

AP/TXT, these are two new plays we've added to our watchlist/portfolio.   We are feeling very positive about their earnings and the way traders reacted to their earning.   It's definitely more important to get the right kind of reaction than number.   Again, you only profit from a good reaction, not an actual eps report.

Bottom line, we still have a large portion of stocks that have yet to report and we continue to look for that unlikely hero.    To us, the big companies provide the headline but the little ones provide our bottom line.    As long as the big companies stay in line for the most part, we should still go aggressively after those small ones with a favourable reaction to their earnings report.

...Viva Las Vegas...

.."All you need is a strong heart and a nerve of steel" ...How'd Elvis know that's what you need to play this dog days of summer game in late August?.   It's simply a game gone awry with attendance hovering below average and so with little volume, the movements are exaggerated in both directions.   This played in to our game plan for today, rest of week, we felt it was overdone yesterday and with a little intervention it was possible to see your holds shoot back up.  After the street suffered its worst day of losses in about 3 weeks, it was the same banking sec leading the way after starting the shakedown yesterday.  Only this time we had the energy/ semi kicking it up as well.   If you got these 3 sec's going, you got yourself the beginning of a nice move.  A move that was aggravated to the upside by a little intervention as whispers of Bernanke bark from early in the week hit the wires around 2:30pm....."act as needed" ... Ah timing, how sweet it was.  We thought we'd rebound, but the thinking was it would be leading into Bernanke address Friday that many are pushing.  We think it's a false push as Bernanke will avoid the juicy stuff and the market might not re-act so nicely as many are being given false hope something will be revealed.  There's a time and place and this shouldn't be it.

As for individual stocks...the snap backs mentioned last night continued and ones we noted hanging tough before being sliced and diced late in the day yesterday were the ones leading the way...

DRYS, with the BDI making new highs yesterday, it was almost silly to watch it slide yesterday . But..then again, this is DRYS and these moves are nothing new.  Today it pumped up 8% and finds itself at highs.  Will it hold this time?. 

GLDN, this is about 10 points since the 15th when we started covering it again after it signed a deal with McDonalds in Russia.  It's closed just under a NCH and with VIP, MBT reporting soon, we think it could go higher if these Russian buddies report well.  The dates are in the earnings link.  There is still a few days to those reports, so we'd watch this top area that has been touched a few times in recent history for now.

ISRG, finally!..after banging its head in the $212 area for like 5 or 6 consecutive days, it finally pushed through end of July high close. Any other time of the year, we'd say the volume was not convincing for a breakout.  But, considering its late August and dry everywhere this might be enough to push it further.

WX, continued its bounce of 9ema area early on, but the move never materialized further when the market kicked in.  One other disappointment was the action in VMW considering the technology sec was grooving and it opened $72's..  Sometimes the popular kids just don't go to these lame summer parties.  We think these got their own game going and today they just let others play after partying for days!

LDK, yes, we watched the FSLR, JASO % moves, but the one that stands out to us is LDK here.  If any of these solars should have moved the most, it was LDK as it got another 500mln supply gig.  The others just had recovery bounces.  The LDK chart looks best out of these and that's what we're going with into tomorrow's trading day.

A few other names familiar names we're trading into tomorrow are CRNT, PCR as they sit 9ema area.

Last  night, we said despite the beating, most DJIM plays were above the 9ema and therefore in play.  We saw that potential play today and now it is better as many are near or at highs.  If the market has room to go higher, this where we want to be...stocks making NCH's

DJIM #36 2007

After all the volatility, turbulence in August, the indices finished a shade of green for the month!.    Hard to imagine, but with the needed intervention...bark by Bernanke and Bush late in the week to show we got your back....it was able to pull it off.    The futures boomed pre market off the Bush news, even though it has to do with a very small population.  We opined here last week, we thought Bernanke would not offer any more up and that was the case.   But, it did reinforce his whispers from earlier in the week.  This led to our early alert by 10am to take some profits off the table as we used Bush instead of waiting for Bernanke.    So what happens now?.  Well, why over analyze, just go day by day as August proved.   We don't think the sub prime tree is finished being shook and we expect a few bad apples to fall down and shake up the market here and there.   But...with the summer holidays finished, we think a few deals will come and get us through September that we can then follow through to take us to the late year months that are always considered the better, if not best trading months.   We aren't looking for 1-2 billion deals, we are looking for the 5++bln deals the market will take notice and then feel better about the credits markets.  There are plenty of healthy companies and those willing to give cash to them or for them.  Even though we were reducing the size of our positions and sold off all of some late in the week, those names are the names we will come back to.   A possibility for early in the week is of more momentum.... if you believe many are coming back to their desks and will be playing catch up early this week...bankers, investors, traders...either trying not to miss the market intervention on the long side or short covering.  We'll know soon enough....

In regards to recent DJIM closely followed stocks....it was a big week for many and the late week action provided an extra push and made some of the stocks a little extended and worthy of taking some cash out of them.    We liked seeing many break to new highs,  but we don't doubt some might retrace close to their breakout levels.  If the market dictates chase, well...we'll just chase..no harm as we've protected ourselves and got more to use on them if needed.

DRYS, last weekend we highlighted DRYS and the sector in an alert.  Simply, we had an index (BDI) making new highs while the rest of the market was in recovery and off highs.   Considering how closely trading NCH (new closing highs) is on our priority list here, this looked like a good place to be heading into last week.  This premise played out during the week as DRYS was one of the best to trade out there.  Low 63's to 72 on the week.  EXM , another name noted then also performed great as it also played off an IBD piece.  Their market is very tight, prices are rising for dry bulk vessels day after day but it does not mean we are holding them day after day.

ISRG, a  name thrown around here lately from $111 moved to $120 after taking out 1 month highs in 113, we were happy with that move and so it was one we were parting with until it gives clear indication/ volume of breaking out further.  Again, we after watching for better volume to keep this a sustained position and as of Friday it still wasn't there.

GLDN, we noted its recent tops here last week and after Fridays nice gap open, we'll watch to see if has the heart to move over this level that it has banged its head against twice before getting back in.   It did get a price tgt increase late in the week to $86 by one firm.   Now VIP has reported excellent earnings (a potential suitor of GLDN) and MBT is next line to report.  So, keep them on watch together, they usually work holding hands. Thin ROS might also come into play again.

LDK, it took its time to catch up to the solar movers last week,  but Friday, it tacked on a big day and didn't let us down for mentioning it as our solar play for the week in Wednesday's Journal.  Last two days, mid 45's low to mid 51's.  The DJIM methodology has always been to play stocks making new highs or very close to such.  Even though many solars were having recovery bounces, we preferred to play the safer bet in our view. A stock at highs.

If looking for some stocks that are not extended like some of the ones above might appear, look to other DJIM names we haven`t called out lately since earnings, such as FCN ARTC LDSH UA JST that have lagged...that`s if we see volume and continuation in the market, of course. 

BCSI looks very ready.

VMW WX PCR CRNT MR CUB continue to be tradable day after day and always near the top of our trading list.  BPHX continues to be a nice and popular 'ride' from our forum trader participants.

Also AG stocks came back into the picture after some USDA crop progress numbers released last week. Two recent DJIM names KMGB, TNH were a couple of the big winners...so you might wanna keep a closer eye on them heading into the week.

Trading on short term memory...

For a good while today, it seemed like we are actually trading on the heel of a very good summer.    Well, for some, they may very well just had a couple of good months.    We can only conclude that traders these days have a very short term memory.     This is neither good news nor bad news and we simply have to adapt to mindset of the majority.    For those of us who do rely on historical trading data going further back more than a couple of weeks, we definitely are in much better shape now than a week ago.    Market was tested severely last week and held its footing.    It looks more and more likely that we may get some volatile sideway action until some major news or catalysts that can propel us into another range.   Well, as long as market behaves in a somewhat predictable manner, we as traders can take opportunities as we know and profit from them.

Overall market aside, it's still about individual stock selection.    Basically, the recent playable action is consisted from the Shippers, Solars, few medical stocks, and a couple of oddball techs and misc. stocks.    Basically, we had a pretty big list of stocks to work with and it doesn't look like the list will shrink in size any time soon.    How do you stay ahead of this game with such a powerful list of stocks then?    If you have lots of capital, diversify and play them all and weigh more in those that have the best relative strength.   If you have small capital, be flexible and stay in green stuff at all time, and move out of those that are in sideway action and jump into those that have strong relative strength.        If you haven't been taking advantage of some of the recent runners, perhaps you should go over the priority of your watchlist and review what you could've done differently.

DRYS/EXM/TBSI,  both DRYS and EXM had some really nice early strength that weakened toward the late trading.   We'd be careful chasing these ones in sizes at this point.   The pullback on these can be quick and painful if you aren't careful.   TBSI, however, paints a different picture and it looks as though it's ready to break out.    Unfortunately, the group movement can overshadow any individual strength in this sector.   We'd look at leader for trading clue.

LDK/FSLR/JASO, out of all of the recent solar names we'd been trading, LDK is the only one that's been making new 52 week highs.   We are trading this group on a day by day basis.   Basically, we'd carry some into a good close and flip in out intraday.

MR, we said last week that we are looking for $35.50 area for a breakout with above average volume.    Obviously, we got that today and we added some aggressively.    It's been a long while since this play had a multi day runup and we are crossing our fingers this time too.

EJ, basically, we were looking for a break of $19 and a close above $19.50 to confirm a good breakout.   We got that today and we did the obvious.

WX, earning is coming out on Thursday morning and it's more than likely to be good.   However, we aren't taking any chances and we'd reduce our exposure to a bare bone position before the report.    Still, even at the closing price today, it's been a great runup for us since we started trading it about a week and half ago.

Other setups we like today and chased a few with include ARTC, NVT, and WBD.    There are quite few other stocks that showed good strength and are worthy of a play.   It's very much dependent on how many positions you'd be able to handle at one time.    It does take some experience to TRADE more than a dozen stocks at same time.    If you aren't there yet, just make sure you trade the ones you are most comfortable and most familiar with.

..wild swings or..

was it just our book of stocks?lol...you can't really tell if you look at the tight 20pt range the NASD put in, but the wild and choppy action was prevalent in DJIM stocks from the open.  You could have sold out your book of DJIM holdings in the first 10 minutes of trading and called it a great day, instead you might have ended up watching your gains quickly evaporate before recovering very nicely as the day progressed.  Unfortunately, unless you had pre set sell orders the chances are slim you could have sold a good portion at the higher prices.  Since , most are not in a position to trade by the minute, you just have to deal with the choppiness.    As we just said in yesterday's journal, this choppy action is a very good environment for trading, recycling the stocks listed here....

WBD, you're not going to find many more so thin and volatile to trade then WBD.   Already having a nice move since the premkt alert Wednesday when it was trading $102-03, it acted quickly to our strategy here,.."traded in a thin range, consolidating action we hope after the earnings spike.  A stock over $100 .....trading in a 2 pt range has attractive qualities if it breaks the top range".  Nothing like a gap to break that range and get enthusiasm started for a stock looking at weekly highs on the charts.   Momentum quickly grew and you still had plenty of time to catch our alert $112 level to catch a ride to $118+ high if you were not in already.   We will like this very much again if it breaks the 116-118 levels and holds, but at these prices we have stepped out as the possibility of hitting some psychological resistance was there if you look at the daily chart.  This is the same prospect we noted on GLDN after it hit the recent double tops after another nice run.  We want confirmation on the close for these plays to hold a NCH (new closing high), preferably with volume before we look to play the potential nice leg up that exists for both.

VMW,  it's good to see it's back to it's old self and trading with the momo that made it stand out here recently.  If you look at the daily chart, you will see it had support and usually bounced off the $66.50ish. As the days dragged on it found itself at that price with the 9ema caught up to it. You can almost call it a trap of sorts as Tuesday's morning tone made it gap down to $64's. Well...that pretty well cleaned out the weak hands. Once the stock recovered to above the 66.50ish, it was clear sailing.  You could see that by around 11:30, the volume move from that level to $68.    It continued on scored a nice close.    Again, we look for momentum here and start thinking of recent highs as a possibility soon.   We like this stock a lot as said before and not only for the trading possibilities it gives, so be patient and if it doesn't participate in rallys recently..remember this from a recent Journal  on Aug 29th. instead of asking us what's wrong with the stock..."WX, continued its bounce of 9ema area early on, but the move never materialized further when the market kicked in.  One other disappointment was the action in VMW considering the technology sec was grooving and it opened $72's..  Sometimes the popular kids just don't go to these lame summer parties.  We think these got their own game going and today they just let others play after partying for days!".   You only have to look at the flight of WX since that day and we hope yesterdays action in VMW is the beginning of a new trend up as well.  

A damper to this VMV move early on today might be MSFT product launch into the 'virtualization' space announced after close, but the piece of software is many months away and with MSFT's delays who knows when that might be.   Life goes on for VMW in the meantime with everybody wanting to do business with them.

WX...it held up reasonably well premkt off earnings, even trading at the previous days close before the report.  At the open it was a different story as it sank to high 25's. Yesterday, we said look for 9ema to possibly come into play and wow it did ever as the stock spiked back over 30. Hope some of you were watching and flipped 3-4 points quickly.  Action like that gets our attention and so we will keep it at the top of our trading list.

EJ,   it looked positive premarket and at the open but never recovered as most of the other plays after the initial sell off that occurred just after the open.  E-House won't be long in the DJIM house if it gets hosed down like that again....Ironically, it is chasing the easy money and not buying the CUB's that eventually calls for days like that as journaled yesterday.  So suck it up and have your anti- nausea medication next to your trading platform if you want to play these volatile sorts.  Sometimes we feel we waste our time on this Journal as seemingly some just speed read through it and then ask us what we are doing with EJ as it was coming off day's high.  These questions are always from someone who buys at the top of a day like yesterday, but on the other hand some on our forum do make notes in their trading notes and recalled EJ as a play mid 19's ....."EJ, this is a new play we added to our watchlist today.   Although we don't think it's nearly as sexy as WX, but being one of the recent Chinese IPO and the way many Chinese ADRs have been behaving lately, we think it has a chance to runup some.   The technical looks good and there's a test coming up to see if it can break out of $19.50, which is around the closing price on its IPO day."  Monday, Aug 27th.     

Anyways,  we'll see what today brings to it. We've already seen it bounce nicely off a smaller sell off Wednesday and we're basically back to where we started with EJ on DJIM.   This has similar characteristics to WX and others we have played here, so if WX recent run and its pop off the early selling yesterday is any indication then BJ is hardly going to become a dead play in one day.   Especially, if you consider its business and that the Shanghai composite closed at twice the level at which it started the year at.

GRMN, gapped but never saw that price again.   As long as it stays steady and tech performs well, we will stick to it.

DRYS/EXM/TBSI...we'll just repeat yesterdays and 2 weeks worth of blab on them..."you can't ignore a strong sector"

MR LWAY CUB JASO ISRG -CRDC round out the top of the trading list going into the trading day.

LDK coming off highs is paying 1bln to FLR. This might take a positive spin today as a confirmation of those 500mln deals going through.

..Blue chips not small chips....

Thursday's action just added to the imbalances, subdued action we've been complaining about since Tuesday.  Adding to this boring action was a spark to the multinationals....blue chips..  Sorry, but a Big Mac in a GM is not our game, so we are left watching this grinding action amongst the small caps we've traded so often.   We've basically packed it in ahead of the weekend, maybe the Fed meeting.   The only thing we are doing is being patient and not trading for the sake of trading.  The time will come soon enough that plays, set ups,  emerge and you'll be happy you did not enter or chase this week.   As we discussed yesterday, we are not going after what looks like a break intraday.  Instead, we are waiting to the last half hour to see if what had potential midday has it at the close.  Time after time, what you might have thought was a possible good idea intraday turns out to be a stinker at the close.  Just too many head fakes, false breakouts out there and more than a few of them are listed on the forum. 

Our queasy feeling from Tuesday's action was nothing more than caution and it has saved us a few dollars in the past few days and still might more.  The shippers...DRYS, TBSI have dry docked...the solars are not so bright...LDK, FSLR giving up 7-8 pts in one day off an upgrade....and the Chinese stocks are not living up to the Shang.......VMW has never seen the heights reached since the first hour back on Tuesday.....Preserving the cash is just as important as ringing the register...you can't ring it later if you're not preserving it at one time or another during the trading year.   This is one week it's been called for.....live with it as we are...Don't stretch a play in your mind into something it is not capable of being this week!

L' Shana Tova!