waiting for catalyst perhaps?

It seems slowly, if not surely, that people are beginning to forget about the dreadful one day decline we had a couple of weeks ago.  Others are spreading fear that we are in for a rude awakening. We just go with the flow.  We can't predict the market's direction by reading into people's mind, but we can definitely gauge people's mood by reading their action.   Market has again firmed up today without a hint of slowdown anytime soon.   Oracle's earning is apparently good tonight and the fed policy statement is also going to be released tomorrow.   However, what will be the catalyst for this market to get a volume move is still something we are wondering about.   Maybe it'll be a combination of things that'll get things going.     For now, we are simply playing one opportunity at a time and pick only the obvious plays and staying away from those rebound plays. We haven't put up many plays lately, but being selective has produced some nice days in stocks like DXPE,GLDN, HNSN.  When one runs out of gas... get filled up with the next until it's ready again or at least reduce in size to hold through.

ASTI, the reason why we are writing this one first is that we felt many readers may not be up to par on the 1234 setup mentioned on this forum.  Basically, a 1234 setup works if the stcok closes above previous day's range on its fourth day.   We had an attempt earlier but as everyone can see, the setup failed near the end.   The lesson learned here is that it's imperative not to jump into the conclusion of a potential breakout unless it's confirmed.    The confirmation either comes with volume and a break of the resistance and hold through the end of the day.   We noted earlier that we are looking for a break of $8.65 (this was our confirmation to go hard in size soon after) on volume to consider a good signal and guess what?  The day high was $8.62!   Unless flipping for 30 cents or so is your game then staying disciplined is a priority if you are new to the trading small floaters.    Trading aside though, we still think this one is a good play for a solar stock.    The overall solar sector is still in some of a funk right now that none of the other two DJIM big boys can seem to get any steam going, not yet anyway.   We'll just have to be patient and watch and wait for opportunities. 

HURC,  we have been noting this one as one to keep on top of your trading list. Today we got a good close that we've been waiting for to add to. This one in our opinion is ready to start a new leg.

HNSN, it's in play and believe us, it's not just retail traders like us that are putting this one in play.   Momentum is pretty high with this one and we like this sort of breakout that started the other day.

SIMO, this one came out with earning premarket and raised Q guidance ( a sequential declince of 3-7% instead of the previous 15-20% in revenue) and it climbed steadily higher throughout the day.   For some reason, we are actually pretty comfortable trading some selective tech stocks.   This one is also no stranger to trading community and it'd be interesting to see where it goes from here.   We bot a small position today and will watch for signs to add.  SIMO is IBD#6 (98EPS,97RS)

NVTL, this was an alert on the 13.70's and we said it was a steady bugger that survived the meltown. Seemingly nothing has changed as it creeps along. TWeisel came out with some positive comments on the momentum their business is having.

DXPE, a slight pullback is expected and hopefully you all locked in some gains today.   We'd be watching this one closely for a reversal at some point and given the small float, the reversal can come at literally anytime.   If playing conservatively, we'd be looking for the recent high as the breakout point for a chase.

What's next?

The indices poked their neck out today and broke out of their trading range from the last little while.    As we were saying yesterday, market was looking for a catalyst and today we got one.    Does that mean that we are ready to challenge the old high next week?   Ah ha, if market is predictable like that, then we all should be running multi billion dollar hedge funds.    The truth is that we just had a good old relief rally today and what comes afterward is usually trickier than what most people would expect.    One good thing about the reaction of the fed decision today is that we are that much farther away from the recent low.   Today can be used as a good indication that we've just had our bottom for this correction.   The sub-prime issues are being sorted out and worked out slowly and many institutions now have a realistic expectation of what to expect from some of the firms involved in the sub-prime lending.    This is good news!   Uncertainty tend to raise fear and certainty raises optimism.     Seasonally, we are ready to kick off another earning season.     What?   It seemed like we've just finished our last earning season.    Yup, this gig is literally all year around and right now we are back to focus on finding earnings plays that fit into our criteria and trading theme.      In a way, we are kind of glad that the big drop happened before the earning season. Does anyone else feel like "we just got rid of a monkey off our back"?   In plain words, now that we just had a correction, bears can all suck up and go away.   Hopefully this is the case but we do need confirmation from market action during the next little while.     The best case scenario for this market is to inch up slowly and digest any big market gains like today with time.    The absolute last thing we need is for this market to go up in a few straight days and then to get smack down hard which will for sure shatter investors' confidence.

Now onto our small cap land....  When the market is in a good mood generally, the small caps always tend to get busier and see an influx of funds.  Here are some of the stocks we are noticing today...

CSV,  we have to crown this one tonight as it joined the 25%+ gainer club today.   This one is such a sleeper that despite the fact it doesn't generate any buzz among the momentum traders, but it generated 25% during the last month or so.   And do we even have to remind people that last few weeks hasn't been the most friendly to many investors. The same goes for HTC, the Euro Telecom which has produced 25% too. The reason we bring these up tonight is after today, it is time to look around at past DJIM stocks and see which survived through the turmoil best.  It is probably best to start doing some homework and expanding your tradable watchlists.   Another reason is just a reminder that despite the volatile stocks we mostly cover there are plenty of quality crawlers that work for the longer term investor.  Last Q, we had EML, SYNL, AMIE's and this Q the CSV and HTC have already stood out.

HURC HDNG,  yes keep on going and make those new highs.    Market really owes those two as the market environment was not friendly when these two came out with stellar earning report. UEIC falls into this boat as well.

FSLR TSL, we wish these two had done a little better prior to today.   Nevertheless, whatever it takes to kick-start the momentum is fine by us.

SIMO SNCR UEIC,  had new closing highs and we are definitely gonna look more on the tech side of the plays as the earning seson goes on.  SNCR was probably towed by AAPL today.

AMAG, we used to trade this back in early 06' with great success under a different symbol, it's a streaky stock and if you get on the right side..at the right time this one can be quite the winner. It's in late-stage development for iron deficiency related anemia in chronic kidney disease and that is the speculation part.  We started very small and will see if the small float and big short interest can dance with the Deutsche Bank $100 target put on it today. Wait for confirmation of a turn here before taking on a play like this or just start very small and make sure you have many more plays before it.

Folks, market definitely seems to turn for the better last couple of days and especially today.   With the earning season coming up, we feel like we should get right back into it 100% and pick up where we left off.   This doesn't mean that we are gonna be committing all of our capital.  It just means that we are gonna be committing 100% of our time and focus in finding trading opportunities for the next little while.    Hopefully we'd get some really nice plays that'll make up for some of the lost time that we incurred from earlier this month.  Just remember, we might need to curb our enthusiasm as traders soon after a day like this and that simply means taking some profits before kicking it up again.