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.

..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.

..Off-Roading

Hope you had yourself a good 4X4 yesterday for all the crazy bumps and bends of the market pounding your kidneys!.   A good seat belt might be in order not to get dismounted as the noise from all headlines is over bearing the earnings reports from the big names at this time.   As we said before the open yesterday, we can't do anything about the noise and just have to go on trading what is in front of us and hopefully working for more than a day trade.   Despite the jitters still prevailing in the market arena, opportunities were still there on the stocks we've been tossing out...

WBD,  ...this was one stock that required no seatbelt yesterday as it glided avoiding all the potholes others were encountering.  Just the day before we noted its $110 top and the moon shot came of 10-11 points from the top break.   This might have more legs as it made a NCH, but we know it's trading history well and always put days like this in our pocket and dismount.  We'll be back, especially if it holds these levels in the days to come and sets up again or if it shows signs of working the NCH higher.

"Another one followed here closely all the time because of its volatility and ability to shoot a moon shot intraday is WBD, the Russian dairy/beverage co.    It  had a beauty of a walk up Friday as you could see by the intraday chart.  This one could give it up just as quick always remember,  but the way it was ladder walked for 5 hours makes you wonder what's up.     It never trades so orderly. "

YTEC, now you know why we said this has momo trade capabilities.   The quickness and steepness of its late day charge shows what we might have on our hands here,  with it you have to accept the early action as a characteristic of such stocks.   Just have a barf bag in your 4X4 handy.  This China IT and outsourcing co' has a knack of reacting nicely to any news it throws out.    Considering their business is with the thriving bank business'',  you can expect this stock to be a possible PR machine of contracts that will jolt it constantly.     We noted midday these momo stocks do not play to a schedule, meaning if the indices are popping it shouldn't be a surprise they are not following along as we saw in the morning and then eventually an eye popping move late in the day when the markets were struggling.    As far as its fellow country bud, JRJC,   it basically followed the path of BIDU and many other stocks gapping and then steadily coming down.    The reason we book this with BIDU, is its in the same universe you could say.  It's from China and has the momo trading flavor of BIDU type...simply after its recent ride we know its capabilities to move and draw attention of traders just like BIDU has over time.    The 60min shows higher lows, a clean and jerk over $40, meaning a good close over $40 would give this a nice looking daily chart and most likely some much anticipated action again.    The risk should never be forgotten with momo stocks, we've also seen this side of JRJC.

The other names we are trading and/ or top of the trading list are all familiar DJIM names.... EDU CETV HMIN LULU BCSI GLDN VMW JST.  RBN off EPS and VMI, always seem to appear here after earnings and both do so again.

Even though trading opp's are all over the place, a day without some many bumps in the road would be a welcomed sight.....Yeah, right..as if!