Expectation!

We are almost two months into the new year and many of us have been asking the same question.   Is this the kind of market we have been expecting?   The truth is, nobody can really answer this question.    Just like an individual stock, the overall market would spend most of its time in the consolidation mode.    It seems we have been stuck in this mode for the longest time.    Unfortunately, there's really not much we can do about this and we can only do our best to cope with this situation.     Today it started off as if the market wants to go down hard but it ended up in a meaningless way.    Our DJIM stocks have fared better than most in this market environment and this is the exact sort of things we liked to see to end our trading day.      Here are some highlights...

FSLR TSL JASO, even though we are grouping these three together since they are all solar plays, we do have to point out that FSLR is the only one that we have considered as an earning plays.    Solar plays are hot and there's no doubt about that.   We think these three represent the best in the solar trading world where both the liquidity and technical signs are top rated.

CSV, this little funeral service stock broke out today on pretty convincing volume.   We didn't think those insider buying was meaningless so we added then and again some today.    It's hard to speculate how high the institutions will take this one up to but one thing we can all agree about its business is that "it's just a proven business".

BW OEH VTRU HURC TRT CGX,  again we are grouping these together b/c these are familiar names that always seem to outperform the rest of the market.    Steady as she goes!    It's nice to have a 20%+ mover in your portfolio but it's the steadiness of some of our stocks that make our portfolio really shine.  All these have been early earning buys this Q at DJIM and OEH, is a sec play on other hotel earnings plays that came out with nice reports.  Now, it gets some takeover speculation with the CEO departure. We thought this speculation was already underway due to industry conditions and company internals, today Bear Stearns added some fuel to it.

CENX survived earning with a NCH to boot and shows this aluminum play is looking for its 52 wk highs down the road.  A couple of recent faves CCF, HMIN are now over 9ema and back on close watch.

Things are definitely looking pretty rosy at this moment and we have seen no shortage of leaders among the stocks on our watchlist on a daily basis.    Does this mean that we are committing heavily into this market?    At this point, we feel we are committing more capital but only on a selective basis.    Things can get out of hand when you add too many positions and it's easy to lose track of things.     A good strategy is to limit our portfolio to a certain number of positions.     For example, when we get to near the close of the trading day, we always ask ourselves a question, "are we going to be holding the best 10 stocks on my screen overnight?"   If things do check out then we can end the day happy but if one or two stocks seem like a laggard then we just cut them lose or replace them as in a CXW yesterday.    This is of course assuming the market is still in a pretty good stand and there are stocks on our watchlist that are outperforming.     Basically the point is that we are always extremely picky about what we hold in our portfolio and this means ...yep, we'll say it again thanks to MFW finance biz...no holding into earning. 

Spotlight on Solars...

Some of us really wished that the trading day would last just a little big longer today.     Some of us really wished that we would repeat the same day tomorrow.   Some of us really wished that we could've started the day over so we could've better prepared for today's action.   In any case, today's undeniably a great day for the all who have been following today's winners here.   It just felt like payday, a culmination to a few highlighted DJIM stocks.     We definitely agree today was spectacular and did what we could to preserve the outcome.    Here are some of the plays today...

TSL, solar stocks stole the show today and we think this one is by far the best deal momentum wise.   Today's rise may not truly justify its presence since the break out started essentially 23 pts ago.    The question now is how high this one will go and we'll just have to monitor this one closely and with some care.

JASO, the only regret we had on this one is that maybe we should've played it aggressively and from the get go last Thursday.   But that's in the past and we just have to look at what's in store for tomorrow.   This one had a pretty big 3 day run-up which we think is not sustainable and a pullback could be imminent.   The only saving grace is that if the whole group gets some crazy momentum again, then the pullback may not come right away.  If a stock doesn't get a pullback, all you could do is go with the momentum, especially if a whole sector is running as was the case early and often today.

FSLR, in terms of percentage, this one lagged behind the others.  Funny to say when a stock finishes 6% up.  Nonetheless, this one pulled a NCH(new closing high) and we are expecting some follow through for tomorrow.

SOLF, lastly, put this one on the list too even though this is nothing more than a sympathy play. Glad to see this one pop for a few of our readers who have kept up on it.

JSDA, we were actually a little worried about this one's action today as it seemed a little climatic, or toppy as some would call it.   We are not saying that this one is done by a long shot, merely suggesting that a pullback is desperately needed.   We think that odds favours a pullback here so we let go most of our shares.    This one is heavily shorted so we think any pullback will be violent but short lived.  Of course, we are using the chart to determine the outcome as it rolls along.

URZ UXG, we took some off the table but added some URZ later on today.  Many are trying to call a top to this Uranium bubble.  We'll keep blowing air into for now.

SILC, we added some today to our buy in late last week. A NCH here

A few more to keep on top your play/watch list tomorrow...

EML, we put this back on watch a weekend ago because of the potential DOD contracts in '07 going to Armor Holdings.  Today, it closed with a NCH and got a little volume.

CYNO, pulled off a NCH, lets see if it holds here before adding.

RCCC FCSX, both of these we added to our watchlist today and are eyeing for a pullback for an entry.   These are earning plays that have had a great reaction.  With the big winners the past few days, a few earning stocks haven't got the attention from us that they deserved.

Spotlight on Solars, Part II

Climatic, climatic and climatic!   This is how we described action with TSL, JSDA and JASO toward the end yesterday.    Looking back, we felt that it was definitely a right thing to sell/ blow out our positions into the strength and leaving home with little to no position yesterday.    Was today's early downgrade merely a coincidence or was today's decline inevitable?   Whatever the conclusion anyone can come up with, we think odds did favour a pullback based on yesterday's action.    Momentum stocks tend to move up in a violent fashion and they can come down just as violently.    As traders who trade a lot of this kind of stocks, we have to respect the beasts' potential and act accordingly.  

For us, in case those are not familiar with our style.    We sell momentum stocks aggressively when they reach a climatic phase in our view..   We also sell most if not all of our position if stocks breach 9 ema or in an attempt of doing so.   This is not be mistaken with stocks that climb 20% for us and then start fading.   We do not wait for these to come to 9ema, we leave with most of gains in tact.   Use CIMT as an example here.   A $3.70-80 buy in, climbing to 4.60-70's...we do not wait for it to come down and hit 9ema like yesterday.  Look at it this way, if a stock you bought at $38...it goes to $46-47.   Will you let it slide back to $ 41's?.   We hope not , so look at a cheapie stock the same way.   These are some automatic reflexes we preach as part of our trading discipline.   Trading is solely about preserving most of the gains out of a play while cutting the losses as early as possible.    We use a rather conservative approach when dealing with these super momo stocks.   Here is a rundown...

TSL JASO SOLF FSLR, so now the stocks have pulled back and what do we do now?    We'd be eyeing 9 ema for the support and to see if the pullback can stop there for a potential quick rebound.   Otherwise, we'd be eyeing yesterday's high as the potential b/o point for re-entry.    The one thing we don't want to do now is to enter a trade here, where they closed today.   This is what we feel is no man's land and it just offers nothing but uncertainty.

JSDA, this is the exact same situation as solars and to a more extreme degree.   We really wanted to see where this stock would settle once the volume settles down.   Again, going in and picking an artificial bottom may as well mean that you are treating this game like a craps table.  

RCCC, this one held up really well but we think better entry pts are still ahead of us.  Others behaving SYNL, MFW.  Eyeing GROW, TRT some.

All this can change as lots of market moving co's. are reporting tonight , so we'd see how the market is going to react to their earnings tomorrow.   Unless the momentum is clear within a particular sector, we'd do what we normally do and pick one earning play at a time and highlight only those that are worthy of DJIM.

It would've been a lot easier...

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

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

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

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

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

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

The importance of holiday trading...

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

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

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

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

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

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

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

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

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

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

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

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 high can they go?

The better question might be... is how high can you go with some these solar stocks?   Remember the trip down can get pretty trippy when you are dealing with momentum stocks that have powered up as much as some of these have lately.  Still, a new twist to these big plays is that a few of them produced contracts today to help push them. FSLR got the ball rolling announcing deals worth around 1.3 billion with renewable energy co's out of Europe and TSL followed up with more deals. So are these deals enough to push these even higher or do they just tap the recent run?. Time will tell, but the best thing is to have these on a tight leash..in other words trade them, get in and get out with the tide.  Another positive for FSLR and JASO today was the intervention by a few firms to raise price targets.  A RJ up to $48 really got JASO clicking later in the day.  Are these firms late to the party or are they going to push these higher?.   Lots of questions, lots of momentum and even some secondary solar plays are putting up charts at the close that can't be ignored.  LDK, HOKU are two examples of NCH's, nice charts that can't be overlooked even if they are solar powered.  It's really up to the individual on some of these as to your comfort level. If you've been following them daily off the Journal since the 25th of June, you likely took some of the table today or plan to tomorrow into any morning strength or maybe not and you'll keep riding the momo for as long as it lasts. Just be on guard is all we can say on some of the flying solars.  Hopefully, the contracts and firms getting involved further at these lofty heights is enough for this to continue.  Lets hope for more contracts and more firms upping the estimates/targets. These stocks are not going away in the long run, they came back from the early part of the year when we were trading them hard and now is just another opportunity to capitalize. There will be others down the road if this detours any time soon.

Now..back on planet earth this Monday. We didn't wake to a slew of M & A deals, but you have appreciate the huge buybacks today by JNJ/COP.  Besides, earnings/ M&A action in 07', buybacks have a been an important catalyst as well.  If the firms are buying back at these prices, well then the investor asks why shouldn't I?. It also didn't hurt a 20% premium was put on the head of FDX by a weekend publication.

CMI, this is the 2nd time we hit it nicely off an alert in the past of months. We liked how the stars were aligning with a breakout on the heels of a Bear Stearns upgrade. What you can't ignore is a 10 point move and that it is best to take profits along the way. A steady move such as this allows for entry almost at any point to then take a few points off.  If what you had hoped for in a few days happens within hours...all you could do is take profits somewhere within todays price range and look to re-enter another time.

SPAN, this was highlighted a few weeks back in DJIM #26 as a potential play from around $24. Today it tacked on another 5% to a NCH at $30.60. Buying the pullbacks has been a profitable trade in this one. Maybe we'll get another one later this month.

PENX, TBSI, CUB, DDUP ..usual suspects had nice days again.

And if there is ever any reminding needed of why we trade BTJ the way we do (this sort of came up recently on forum)....well, today's action is the simple reason why.  This is also they type of action some of the solars are capable of sooner or later.

..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...

Naz +49.9, Dow +283

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

Now onto some of the DJIM plays...

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

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

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

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

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

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

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

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

Not a bad reaction...

Well, it was expected that we'd be getting a poor reaction from the market.    What we really wanted to see is how much damage it can spill over to other stocks and sector.     For a good portion of the day, it looked as though we'd have an ugly one in the book.      In the end, especially during the last half an hour or so, things have turned around and we closed near the highs.  Pullbacks are seemingly short lived in this market this month again and a bounce at retrace/ or MAverages occured today....25pts off NASD low, about 95 off DJiA low etc.  So how do you interpret this?    We say "don't interpret this"!    There are analysts/fund managers who get paid millions of dollars to think their brain out to interpret this kind of action and be wrong.   For us, we can simply conclude that "it just didn't close as bad as we thought it would!"      So basically, we try to use a simple man's approach to this market and let those who manage billions to figure out the exact meaning of the market action.    Yes, we do worry about the change in market sentiment and the only way we are able to tell the change is from our watchlist of stocks.    Individual stocks, collectively, paint us a pretty good picture whether the overall market is healthy or not.     As long as we have opportunities to trade, and as long as the market isn't in a panic driving mode, we'd be actively looking for things to hunt onepiece at a time.

IBM reported tonight and the stock is up slightly in AH.    This is what makes this market particularly interesting.    We know that not all companies can deliver great results or expectations.    We also know that market cannot just sell off just because a couple of companies might be losing market share or are under margin pressure.  If you look at expectations of firms, most expectations were met and at least one upgraded one of them a few points.   So what do we have left?    How about those companies that don't have the margin pressure or those still in a strong growth phrase.    Like we said last night, we aren't saying this bull market is done at all.   We are speculating that a couple of disappointing reports from some heavy weights can change the trading sentiment of the entire market.    This is definitely a big if but we still have to keep it as a possibility now that we are in the middle of the earning season.     It was easier before this earning season started because the market was running on hope and optimistic expectation, now we have the sub-prime stuff re-visiting the market to mix in with the reports.  When the real thing hits the wire, it's just oh so hard to predict what money mangers' reaction is.

Bottom line, we stay sharp and play our game.    We'd try not to get caught up in a bad market vibe so we have to keep our eyes on the reaction of those heavyweights.    In the meantime, we actively hunt for stocks like AP to pull off a trade or two.

AP, this is not a stranger to us because we have played this one a couple of times before, though maybe not since  we started DJIM.    This one is also in a sector where it seems everybody is having good reports.    Again, it's very important whether people 'appreciate' its earnings or not.    There is no question that this stock was  being bid up today off their report, despite the weakness of the overall market.    We like this kind of action and we are putting it near the top of our trading list to trade this one higher. You cannot ignore the small float, the chart and these earnings...$1.02 vs .67, revenues up almost 18% to 88.74mln. To get a bigger picture see Q1 and read the companies comments in this report.  We like a EPS with some history and growth, we'd much prefer to trade a AP, PENX, LPHI than a company like DYII that hired more Dr's and all of a sudden become profitable. Couldn't management pull the same before, probably it is not that easy. 

VSR, we noted this one the other day, bought a piece today given its relative toughness to hang in there.    We are hoping that there's enough volatility from this market to give us some opportunities to add to this position at a reasonable price.

Solars, some of you may point out that the group is enjoying a good day given the weakness of the market.   We think the group was probably oversold the past couple of days and there's still alot of interest in playing this group.   A bounce is definitely inevitable, even on a day like today.  We spoke recently of wanting to see action from the firms continue.  We've had 2 more tgts on FSLR since of $140 and 145, we 've had LDK initiated with a $49 and today a $44 from CIBC today.  LDK was only trading 7pts above its IPO debut price and JASO had a positive clip out of IBD this morning.  We are hoping this is the support this sector needs to keep the dips from becoming a meltdown.   We are very clear on our position still.   Unless some positive catalyst that can take this group into another drive, more coverage, more contracts...we'd more than likely to shy away from this group unless for some intraday swing.  Of course...it is hard to not want a piece of the so called, 'next big thing',  just make sure you are not overloaded % wise in your book and think you have a decent price average to try to go forward with any of these. 

At first glance tonight, a few good EPS reports tonight from VMI, BMI to look over some more.

Get use to it...

This kind of action will probably dictate us for a little while.    As the summer holiday is getting closer to an end and more market participants come back to the trading table, it isn't going to be smooth sailing.     There are still many things to be worried about and many potential negative news that would come our way.    The one thing that would keep everyone in check is the number of unknowns that's still yet to come.     On the bright side, it also looks as though it's going to take some really bad news to drive this market down and test the previous low.     Well, lets just hope it doesn't come to that point.      Yes, we have talked about the fact we need to test this market and we just had a taste of that the day before yesterday.    Testing the market does not mean testing the market's recent low, it simply means we have to test how resilient this market can be to recover from a bad day or how this market can hold up against bad news.    This will be an ongoing process  untill the time when  market  moves our attention away from this crisis.   Perhaps, and hopefully, the earning season can provide such a distraction.

Now some plays...

FSLR/LDK/JASO,  are solars making a comeback lately?    We haven't seen a coordinated group move in a while and all three stocks closed pretty strong relative to the rest of the market.     We have flipped some intraday but it's really too soon to tell if it's a good idea to pile back into this sector.    Do keep your eyes on these ones though because if they do move, you definitely don't want to miss the boat.

ISRG, this one is at an interesting point here.   It closed at the upper point of its recent trend and at a month high.   We'd really want to see a high volume breakout just to justify chasing this one with a meaningful position.    At this point, we aren't taking any bets and would rather be late to a confirmed breakout as oppose to going all in now with hope that it'd bust out.

CRNT,  we got back in a little bit of this one as things look to settled down somewhat on this one.   This is very much a swing trader's stock as it provides plenty of time for reentries and exit.

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.

..out of breath?

Early on yesterday it seemed like many DJIM plays just carried on Friday's action as if the weekend never came.  We saw action continue in the Shippers..DRYS, EXM...Solars..LDK JASO..Chinese..JRJC,BIDU stocks rolled, Russian stocks...GLDN, ROS had good days and a few like GRMN, and even CROX finally broke to the upside after a long period of consolidation.  Some lasted, some didn't and faltered as if out of breath.  Some definitely felt extended and if anything switching into names just breaking out might be a way to go now.   Basically a switch of asset classes you might say.   On Sept 13, we said a trend might emerge..."A possible theme emerging in our bored minds, even if it this play really never left  is the potential for DJIM foreign stocks.   Primarily, the Chinese and Russian telcos because some might be seeing the US' slowing economy and a faster global economy as a reason to get into foreign stocks.  This fact is just clearer now after Fridays employment figs and some might see it as a way out...".   Have you seem the dramatic recovery of the emerging markets since the low's hit on Aug 13th.  This is mostly driven by the BRIC economies..Brazil, Russia, India, China.  This BRIC index already was up 29% last friday, outperforming the emerging markets as a whole which was up just under 10%.  We definitely can't do all the letters of the BRIC, but trading the Russian and China has been a way to go.  A look at MCSI index will show this bubble like action.  This might be a bubble forming, but the underlying economic and earnings growth is there to support it for the time being and trading the China, Russian plays might be the safer bet right now than the high flying shippers, solars.......

DRYS, EXM..lets' be realistic. The last few days is money just waiting to be taken off the table. Don't forget the volatility swings both ways and when these rest..they really rest.

LDK, JASO, and the solars. We are actually surprised  by the strength exhibited by LDK early on.  Reason being a downgrade came in the morning, but it did come with some good news.  Eventually, the downgrade and the recent action took its toll and it succumbed to profit taking in a big way..as did JASO's run.   Let this action serve as a reminder of what we face trading these high flying shippers...solars.

IRBT, was a open speculative buy alert that ended on a good note. There is a possibility IRBT might be given a 2nd chance for the contract given to another company that sank this stock recently. We'll see as news is impending and that gap looks juicy on good news,  if it gets to that level starting over $19.

With the stocks talked above that show or showed signs of being extended, we'd turn to closely watch the potential in some names that came back up on radar yesterday..GRMN CROX APOG VMW  GTLS  ANW (new..but if shippers falter, this may too), for more trading possibilities in the right trading environment.

a bunch of Yo- Yo's

Before yesterday's trading day,  we noted we'd be trading hour by hour, not a bad idea it seems as what we have is a bunch of yo-yo's day to day..hour to hour.  You almost have to make a choice of whether to hold these through the slips or just daytrade the heck out of them.  Unfortunately the 5-10% down days make it hard to hold till the next day and the daytrading mode might not be for you to capitalize when they pop in the other direction.  We've never been ones to daytrade these stocks, getting in and out of them on a daily basis was not the way we played them to these lofty perches they are sitting on.    Simply at this time, this is seemingly what you have to do with the DRYS EXM LDK GRMN FSLR JASO stocks or just hold through the volatile action and take some lumps on off days.   On any given day you are getting 5,6,7, 8 pt intraday trading range, with the close either at the low's or highs of that day in most instances.  One day they are tepid and lagging the overall mkt and/or red, the next day, they are flying.   Also, it is not so easy to say a stock making a NCH will continue on forward the next day.   Now, you simply don't know what the stocks we've covered this Q will do the next day.   There is only one way to explain the action and that is to understand it as a Q end phenomenon with a lot of hedgies flying in and out of these big winners of the past Q and creating this volatility.  Performance anxiety after a horrible July and August for too many of them.  Probably started padding the books with this China spec stuff and got the wildfire started.   We doubt the timing is a coincidence.   So...you have 3 choices really, one is take the lumps the bad days or even intraday moves can throw you...two...is buy and sell the same day ...or three...which is stay out completely to avoid the stresses of it all and await a calmer trading environment.   There is no reason to point out plays reaching NCH's Thursday,  you're most likely rolling the dice with most DJIM plays into the last trading day of the Q, even with less volatile issues like MR EJ.

Anyways..be careful today as the funky stuff will likely continue...either try get jiggy wit it on an uptrend or just stay out...

AZZ, an original DJIM play is one to possibly trade off today following earnings. $36 premkt.

Solar Burn...

What is really funny about this market is that while a couple of big names that kept on going down every day, we have some names that are going the total opposite direction, which is up.   The Citi news may have very well kick started this week, but all the focus now is on Cisco's earning tomorrow night.  As oil price keeps going higher, so too are the names from solar sector.   This is really the kind of market where you are either in a lot of pain or a lot of joy.    What makes it tough though, however, is to maintain a balanced portfolio where you try to speculate on which sectors would move next.   As we have witnessed, many of the Asian names have been under pressure the last few days while some of the more expensive names on our watchlist  kept us in the game.       

First, the good ones...

FSLR/SPWR/GOOG/MA/BIDU/AAPL/RIMM,  basically, had we been trading nothing but the expensive tickers ($100+), we literally would've been making a killing in this market.    These aren't the names we are unfamiliar with.   In fact, pretty much all of these names are positions in our portfolio at one time or another.    You can say that these are some of the obvious leaders in the market and those are the ones we ought to be owning if we believe this market is going higher.   The point it, we gotta have some of these names in our portfolio.   We may not afford all of them with big sizes but these are the ones that are carrying this market higher.

Solars, JASO TSL SPWR FSLR ASTI, every time dollar gets dumped, and oil gets bid up, and then these guys zoom another 10% it seems.    Some of these names are releasing earnings next few days so we'd have a pretty good picture how traders would react to their report given the current valuation.

AIXG, a somewhat new name to these parts is this German ADR semiconductor/equipment maker bought up early in the morning after earning. It's 9mth eps.17c vs. (0.03), while revenues jumped nearly 50%.  This co' is thriving on the demand for LED units which is in a strong secular growth mode.  The order intake Q# and the resulting backlog was very good here.  In the last 3 Q it's order intake has gone from 40 to 50 to 70mln euros resulting the co' largest ever order backlog.   This stock trades overseas as well and takes it's open gap cue from its action over there.

GHM/DXPE, these two are couple of the recent earning plays that are being bid up quietly.   We definitely don't want to ignore these as they can creep 10% on a weekly basis.

Now the nervous ones...

STV/LFT/CISG/GA,  all these have one thing in common and they are recent Chinese IPOs.    Aren't we supposed to be up 25% by now by holding these?   Right now, we are as puzzled as many others as to why all of these names aren't getting any momentum to the upside.    It feels like in  20 more trading day, there won't be anything left in these stocks;).     At this point, we simply have to play the statistics and probability game.    Any of these would be considered longer term plays and we just have to play that way accordingly.    The quiet period is going to end soon enough for some of these names and earnings are coming up as well.    We are looking forward to those events as they can be the kind of positive catalyst that can drive these stocks.    The bottom line, these plays are still at the beginning.

Simply, you cannot hold one or a few of these IPO's, 'nervous ones' without balancing out your book by trading/ holding the 'good ones'.  That is missed opportunities day after day.