Tough but understandable...

Well, at least we know why some of the money market funds are earning higher yield  than others.    Joking aside, this is becoming a difficult market to trade(flip) when a sudden drop of news can literally derail whatever the bullish momentum.    Good thing is that we are pretty much used to this kind of volatility by now so today's action is not that surprising given the circumstance.     Basically, you have to flip into strength as oppose to wait till some bad news comes out that'd drop the market and your stocks along with it.   Sell when you can!   We have to be very vigilant about taking whatever the quick profit we may have on the table these days.

The way this month is going so far, it's going to be in the history book as something to remember.    Right now, the game plan is the same which means we  leave very little on the table going home on most nights.    The only exception is that we have a strong close like yesterday and only then we could have a strong case of carrying some stocks for a potential flip the next morning.

Here are some plays....

JST, this one had some very good follow through today and closed pretty strong too despite the dreadful index performance.   For us, if it isn't showing sign of stalling, we are sticking to our long strategy and added some near the end.

VMW, we have put this IPO on our watchlist today as we think this one will generate quite bit of interest days if not weeks down the road.   They claim this is the biggest tech IPO since Google and we'll see about that.

ARCI, we bought a little bit of this one late as it's showing some good relative strength in a very weak market.  To top it off, it closed at a new 52 week high with a break out.   Again, this one is small and may not be for everyone.

SIMC, this one came out with earning very late in the day and from the look of it, earnings looks to be decent.   However, given its past performance, it remains to be seen if this can get any kind of trading interest going this time around.   We'd find out more tomorrow.

Dealing with the reality

So the indices broke through last week's low today.     As many of you have gotten used to it by now, the possibility of seeing some very ugly action in this particular month is more probably than ever.     Hopefully, most of us did not carry much of anything  into last night's close and avoided the action today.    The theme remains the same.   We aren't expecting anything positive from this market and most of the newsfront would involve damage control.     This too, will pass eventually.    At the mean time, we just chew our fingers and wait to see how bad this thing can really get.     If the bounce comes, which will come inevitably, technical bounce or not, we'd be there to hopefully catch a few trading opportunities here and there.

VMW,  this is perhaps the only shining star out there.    There's definitely lots of trading interest about this one and whether you believe this is the next big thing or not, you have to respect the trading force behind it.    Perhaps, this one attracts more traders than usual because there's really no other games in town today, or last couple of days.    Call it a place of trading sanctuary or something else, some of us are watching the 5 min. chart religiously today trying to get a good trade or two out of this one.     Outside of this one, it's just a matter of debating on either cash or money market.    If you go with money market, make sure yours doesn't have any "asset backed commercial paper" in its pool.

Bottom line, market does have a very legit reason to get ugly and this is the month to get ugly.    In the whole process, we don't want to get caught in it and become a casualty.    Just like dozens if not hundreds of crisis we've had in the past, this one ranks somewhere in the middle and it will pass eventually.    New leaders will come out and old names will be forgotten.     We are looking at the financials very closely these days and feel that the day those names bottom, and that's the day we'd get back into this market in a meaningful way.

Calming down..

It seems that the volatility of this market has eased a bit.    Despite the intraday swing of the index, many of the plays on our watchlist do seem to calm down somewhat today.   We like this behaviour and this is the kind of mood we'd be able to deal with.     Even though the breadth is pretty balanced today but we somehow happen to have quite a few green ones on our watchlist.     This of course does not mean everything is playable but it's definitely a start.     Having a long list of stocks in green do give us somewhat of a comforting feeling to perhaps step back into a play or two.    This is supposed to be the follow through day and we also mentioned yesterday that we need a day or two to digest which plays might be worth playing.

Here are some plays we are looking at today....

VMW, we don't think the enthusiasm has died down from this IPO.    Again, if this one is claimed to be the next big thing, it should get some good momentum going as long as the techs in good shape.   We are watching $59 mark closely for a possible break there.

WX, this one did very well today and we chased some near the end.   We actually like some of the recent IPOs and they are faring this volatility pretty well.

JST, surprisingly, it held up really well today off a gap up.    We are watching this one with some great interest and want to see what this one is planning to do after today.

FSLR, can an upgrade be able to bring back the former glory out of this play?   One thing is for sure, there will be lots of resistance ahead of this one so expectation needs to be realistic from the bounce.    We are merely playing quick points here and until there's some improvement in the entire solar sector, it's just going to be quick point play off news.

Focusing on the sure plays...

Index is doing a good job confusing traders today and it looks as though it'll take a while for some conviction to kick in.    Most of us aren't counting on a major rally at the moment and we are only playing things off a tradable bounce.    As long as we are aware that this is the situation we are in, we then have to look at plays that offer us this kind of tradable opportunities.     There is really just a few obvious plays worth watching for today and we will go through them here...

VMW, we pointed out last night that the break out area is around $59 and boy did it explode after it broke through that mark.    Again, it's about emotion and momentum at this moment and there's really no need to even look at its fundamental aspect of this play.    The ones who paid $66/share only care if he/she can get out at $69 or higher.    Pay attention to the technical sign and intraday movement as they are the only necessary things you need to trade this play at the moment.    With its strong close today, we carried some position home and we'd be at it again aggressively tomorrow.     This one has the kind of liquidity and price movement we haven't seen in a long while.   Take our word for it, this kind of play doesn't come often and do take advantage of it.

ISRG, this one poked back above 9 ema today and closed near the high.   We are keeping our  eyes close on it for a potential follow through.   Unfortunately, many plays on our watchlist are very sensitive to the index movement and it's impossible to forecast the index on an hourly basis.   In another word, playing these kind of plays can be risky so we'd do small lots to cut the exposure down to minimum.

DRYS/TBSI, after DRYS eps report tonight, we'd keep our eyes closely on this pair tomorrow morning for a potential trade.    This group was taken down like others last few days and it'd be interesting to see if they can recover some off this DRYS report.

Bottom line, the index point movement  lately may not show the true potential of this market's volatility.    We shouldn't let this seemingly calm action lower our guard down.    The market can turn badly literally off one piece of bad news and we have to be prepared for it.    We are far from out of the woods  and it's definitely appropriate to trade lightly.    Keep the plays simple and short and we'd able to finish this month on a high note.

Timing is of Essence

For the first time in a long while, index gapped higher and stayed strong throughout the day and closed near the high.    This is something we haven't experienced in a while and we welcome this change of pace.     To be honest here, this month is supposed to be a vacation month for many participants and it's so far turning out to be anything but.    The last time we had this much activity this time around was the year of the hurricane and it was  very sector specific in terms of trading.    This time around, we are dealing with a crisis and alot of people are sticking around to see it through.     This can be both a good thing and bad thing.   It's good that we are finally trading with some meaningful volume with some good plays in supposedly the slowest month of the year.    It's bad that if we keep up this pace, most traders would get burned out sooner than later.

Now the topic of timing!    Trading opportunities are useless if you can't time it right.    Potential opportunities are only potential if you can't take advantage of the setup.    We are stressing that because these days, a trade can only be maximized if you enter the setup and exit it correctly.   Fundamentals, unfortunately only matters most in a calm and non volatile environment.    We have to fully realize that we are "trading" the opportunities here in this extraordinary environment.  Make sure you treat our plays here as a trade, not an investment.     Earnings number merely provide a catalyst and ultimately it's the market participants' collective effort to dirve a stock higher or down.    We at DJIM are doing what we can to gauge the force between demand and supply and take advantage of such imbalance in a timely manner.     You enter a trade at the right time and exit when it calls for.   This is called timing and we strongly encourage everyone to get to know intraday technical and other short term trend spotting technique to benefit and improve the trading. 

Now onto some stocks...

DRYS, as noted last night, this one came out with earnings and it's the one to watch on top of our list.   SO why didn't we enter the trade earlier?   Again, timing is everything and we wanted to make sure the minute we enter the trade, it can only go nowhere but up.   This is where intraday reading comes in.    We aren't sure if traders would have enough to push this one higher earlier but toward the afternoon we were more confident to go in for a trade when it was pushed over $60.    Had this one stayed around $59 in the afternoon, we would not have entered a trade.    This one is not known for gap ups after a big day but it's so close to its old high and we couldn't help thinking that it's ready to bust through, given a little help from the overall market.

BCSI, the small float helped alot on this crazy mover today.   We are definitely putting this one high on our watchlist too and looking to trade a few points when the appropriate setup comes.

VMW, you have to respect what this one is capable of.   It can take you way up and can drop you down, all in a very liquid fashion.   We alerted earlier that we'd be selling some into strength and lock up some nice profit and would reenter in the late afternoon if the pace keeps  up.    The close is a little disappointing so we have to see how it plays out tomorrow.

There are quite a few stocks that looked strong toward the end and it's definitely a good idea to keep an eye on them for tomorrow.   Some of the stocks we are currently watching/holding for tomorrow include CRNT LDK MR TBSI ISRG GHM....     At the close, there's an announcement that BoA made an equity investment into Country Wide Financial.   This news is causing some positive stir in the futures and it'd be interesting to see if we can get some positive follow through tomorrow. 

Tug of war

Given the amount of points market has risen since the low of last Thursday, we think it actually did pretty good today.    Volatility has eased quite a bit and it seems there are willing buyers out there, on selective stocks.     Once again, we had some trading opportunities from some recent names that looked very interesting today.

VMW, it seems that there's not a day gone by without some sort of action from this one.    Because this one is so new and the momentum is still very strong, we literally just have to rely on 5 min. chart to watch for a reversal.   Action is definitely one of the fastest paced we've traded in a while.    We bought back some and added some near the end.     If a morning pop comes, we'd be willing to part some shares.

WX, ever since this one IPOed, it constantly reminded us of that other Chinese medical co.  MR.    Sure, the business is entirely different with these two companies but the trading resemblance is quite similar days after their IPO.   Top top it off, both had an awesome IBD eps rating to start.    We are trading on technicals only up until today and we will watch any further development to see if it can pick up any momentum like other IBD related stocks.

CRNT, speaking of IBD, this former IBD #1 stock is still live and strong.    Tomorrow comes a big test of $17 and we think if it breaks out clean, we'd see some quick upside.    Again, tomorrow's Friday and many traders may not push it too hard and as long as it stays up here for IBD, we can all leave it untill next week to try for a meaningful push.

ARCI/DOCX,  many of you may not even remember these two cheapies when we alerted a while back but they both had a fantastic day, in their respective way that is.    The trading in DOCX may seem iffy but it goes to show that sometimes it's worth it just to park a couple shares in these kind of stocks as long as they don't break down. 

DJIM #35

If you were told a week in advance where the stock indices would end up, what would you have done?   In other words, what stocks would you have bought or sold in anticipation of this move.   Frankly, we wouldn't have guessed right about any stocks even if we were told the indices would go up this much.    Instead, we just had to rely on our instinct and take cues from daily action.     Everyday, things can change and moves can be unpredictable.    This is definitely one of the toughest trading environment we had to encounter last little while.    Sure, at the end of the week, we can look back and see how easy all these plays would've been called and how everything just made sense the way they behaved.   So was it that obvious?   Lets just say, every one of us would have a different version of answer to that.

The fact of the matter is, despite what may seemed like a good week for many of us, we still played very cautiously.    We try not to out read the market or outsmart the trend.    We just stuck to a simple game plan.      We look for plays that have relative good strength and load them when market is in good momentum.     We lock profit constantly when the market looks directionless and buy them back when the market looks stable enough.    All in all, we simply stuck with a group of stocks that stood out from the crowd.    That, to us, is the key in trading in this kind of market.  This isn't to say this strategy is fire proof and can net you a crazy return.    To us, this is just the safest means to survive in this kind of unpredictable market.

In terms of crisis management, we seemed to have gotten less news(bad ones) from the market last week.   This definitely calmed down all of the market participants somewhat.   However, this doesn't mean that it's the end of this whole subprime and credit crunch saga and we are safe to move on.    This market still needs some strong test.    The kind of tests we are referring to are the "swallow the bad news" kind of test.    Basically, we wanted to see how this market copes with another round of subprime or credit crunch related news.    If by then, the market seems to absorb the news in a good way and focus more on the earnings side of things, we may then be able to expand our play list into other area and increase our exposure.     Basically, we just have to be prepared for alot of unknowns and everybody has a fair chance at this point.  Tthis is why we love this gig!

Now onto some plays...

WX, this one didn't make it to IBD100, in case anyone cared.    We don't think this is the concern at the moment.   What we notice is that this one is sure on alot of traders' radar as a hot play.    We like this fact!    This company is in a unique position to take advantage of its business.   Basically, nobody can compete with them in terms of cost, the cost of doing business that is.    As far as its business goes, you can simply read up the latest IPO filing.     Right now, we are playing this one like any other hot plays.  It means we are taking profit as often as  going for re-entries.    The play isn't looking tired in anyway at this moment and we hope it'd last alittle while longer.

VMW, perhaps we should just simply buy this one for long term, like back when Google IPOed.   But we then realized there's only one Google and this one is called VMW.    There's alot of expectation out of this one and institutions are getting involved in a big way.   Sure, we don't think its business can grow like Google but that is of no concern to us at this moment.   This play still has legs and we aren't playing this one casually either.

DRYS, this one just looks very tricky because it's at its previous high.    Keep in mind, we aren't talking about the earnings or fundamentals here and there's nothing wrong with that.    We are simply unsure if shippers as a group can gain a new leg up.   We don't believe DRYS can go up on its own without the whole sector following behind its leadership.   This is a big if and we have to keep it in mind constantly.

CRNT, who'd thought BIDU would take #1 spot on IBD100, instead of this one?   It's irrelevant at this point.    We got a feeling that this one can start a new leg from here.    Alot of this speculation hinges on the performance of the index, however.   Unlike some of the other plays here that trade less dependently on the market, this one seems to follow the indices better.

BCSI, even a monster needs a rest sometimes.    Of course, this one has the kind of float that reminded us of many great plays in the past.     We'd be alittle more careful trading this one.

Roller coaster...

...this is no walk in the park!..lol...once you're on a ride, it's not a 2 minute ride...this was a 6.5 hr marathon ride on Monday that vibrates and leaves you numb at times for an explanation as to what the hell is going on!.  This market has such a case of anxiety it's quite humurous at times. How else can you explain these intraday bounces of down 180DJIA /40 NASD and then bouncing off lows and then retrace back just when you think we'd finish a nice shade of green?.  Almost and incredibly seemingly off radar to the market was INTC guidance up.  Since when does a tech power house's news of this sort peeter out so fast.  Maybe this market needs a night to think this over and come back and do it right.  Simply, what we mean is this shouldn't be overlooked and forgotten.  Okay..back to the rides....

VMW, this was one ride that was straight up!.  Hopefully, we have overplayed this on the Journal so that that the majority of you were entertained.  We've definitely said enough of the prospects short and long term for this puppy to have it as a primary trading opportunity in this market.  Basically, it didn't go to those lame summer parties that dressed up like rallies and waited till September to kick it in by itself as we proposed.  Now, if we can get the tech sector to build off INTC news, we might just finally get it participating with the group.  At end of day, the daily chart looks like one of those explosive micro cap EPS stocks that we would be all over if it was in the $7's or 17's.  This would definitely get big attention heading into Tuesdays trading if it was a cheapie, unfortunately its in the $70's with a much bigger float.  Still, this chart that was painted might get VMW some new money coming in to play.

LDK, this one has definitely taken over leadership from FSLR as far as we've been concerned.  The deals have added up and the dressing was a deal to pay FLR 1bln to make those deals come to fruition.  We said Friday before the open this might turn into a positive spin and it definitely has as its gone from 52 to a touch of 59's in a couple trading days.  Receiving contracts is great for a potential stock move, we tried to point out it is also very good when you dish out the cash to someone else.  This is overlooked many times and every circumstance is different, but in this sector it gives these up and coming Solars credibility and therefore should be spun into a positive.  This stock seems to roll out some of the best looking set ups week after and after yesterdays NCH it looks to have again.  NCH.

WX,  this one has quieted down since the earnings up and downs and might have another storm up in the very near future, so we are watching closely for an opportunity to re-enter in a sizeable way. 

EJ,  hard one to figure out, it might be just a few sellers that are making it such.   So, when they disappear this might be a smoother one to ride. At this time it clings around its late August break out levels and 9ema that seems to giving it support. Once the trend changes it could be a pretty quick ride up, stay tuned in.

JASO ARTC TBSI  ...fill out the top of the trading list into Tues.

..Imbalances...

While they were talking up Global Imbalances in Berlin,  we were talking down on the imbalances we were seeing and not liking between DJIM closely watched stocks and the indices action all day.    We've seen days where DJIM stocks don't groove to the beat of the market, only to get it going big time the next day.  This felt different.  Our small cap plays don't always beat to the same drummer as we've experienced time over time, but yesterday was one for the memory books and it is hard to make out.    Maybe, it is because the low volume move in the indices was led by what is the majority of what makes the S&P...energy, financial, tech and there is just not too much of these in our play lists.   That's fine,  cause as a group we've cornered the fun stuff over the past while trading the lights out on Shippers, Solars, Chinese, IPO's and we could use a break...right?.. ..Yeah right, as if!...  We simply did not like how a lot of these recent plays we've traded performed, even though most held up and closed green with the market.    We trade on our gut to go with our heads and so we've got a pair of 'em here.  When both of us get that queasy feeling at the same time, we usually act upon on it and yesterday it involved reducing dollars invested overnight.  The same works with stock selection, it's quite easy to get a majority vote as its seldom we don't like the same stock at the same time.    Fortunately, reducing exposure was easy yesterday as it turned out because the majority was done before or around 10am thanks to the biggest holds gapping in the morning.   We always stress our buying and selling methodology, a big part of it is adding to positions we are playing late in the day and potentially selling them into good early action the next day.  This is taketh what they giveth and that is book your profits when they come in the form of a juicy gapper, especially in this volatile market that can evaporate your gains quickly.   We've said that enough here lately.  Our gig is to lead you to the stocks we trade, it is not to tell you how much is too much.  We can't measure ones greed.  Every individual's goal..needs are different and so selling is left to each individual.   Following our strategy, sell early is what we did with VMW and LDK after days of following them closely here and watching them balloon, even LDK since Fridays morning journal and its $52 open.  There was plenty to take off the table in points, especially in VMW after the last 3 days and if you didn't..you should rethink your strategy if you let these go down on you.   These two now go back on a wait and see for next entry.  Unfortunately they join many recent plays in such state.   The dwindling promise of the group of stocks they join making new set ups and therefore potential new highs makes looking for re-entry into these stocks shortly..unlikely.

So..our queasy feeling yesterday is not one of we are going to implode, but one of caution.   Simply, we saw nothing resembling a good set up for more action to the upside in most of the individual issues.  If you can't make money, what's the point!.  When this is hard fact, we sit back and wait.  This might be only consolidation on their part, but.... if another negative headline hits shortly, we fear these recent plays will need a hard hat because of what they showed us the past few days, especially yesterday.

The beauty of the market is this sentiment on our part can change so quickly, we will not even have time to lace up our runners full of cash to chase....

..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.

Bulls on 'roids and Pigs can fly..!.

Those seem to be facts now!.   This is what we saw yesterday as the Chinese bulls roared off the Asian markets, even when left at home alone with the SHANG on holiday's.    With every Bull shot there is a pig in it's footsteps.   Meaning speculation on junk ones was wild and you need to be careful at this probable late stage in the game.    Back at the ranch, the market was doing better than expected with not a lot of profit taking.   We added this footnote to a post before noon,  "Considering yesterdays action this hasn't been bad at all or meager for the small caps /RUT been green most of the day. Bunch of those sorts here having good days WX EJ BIDU JRJC LULU MELI ROS GLDN FSLR EXM TBSI..AZZ might still " .    The day turned from good to very good late in the session for these stocks and a few others like GS, VMW, CSCT.    The market continued to trade sideways and finished mixed, yet for consecutive days now, we were in the right place at the right time.     Hopefully, our morning Journal steered you back home if you've strayed!.     This was the true Bull shot of the day, the DJIM index.    There is really not much to say heading into today trading, except that hopefully we all played these shooters smart and took some off the table.    This is especially true with the gains generated by the Chinese stocks covered here.    Even the good ones will get nosebleeds.

A member noted and what is probably a good way to understand the Journal is to see it as us thinking 'out load'.  One thing is to shadow plays, another is to shadow our mindset, which is probably the better way to go.     We can't give buy/ sell advice, all we could do is show what we are buying and thinking.    Hopefully, it rubs off on you and improves your trading ways.    When we noted yesterday.."Now, we just ask WX to get some game and it will have our most recent China plays on even ground. Oh yeah..where was BIDU yesterday?.     Lets no forget this rocket ship when looking for a good intraday trade.".    You need to ask yourself why are we even mentioning these two that under performed the day before.    Simply, we are thinking ahead and with a big overnight Asian market these just might come out and play with the rest of the kids.   Trading is so much a psyche game, you need to think ahead and think what others will or might do.   Your gig is to get there in the early stage or even ahead of the herd.   We gave the below leads yesterday, clues into where we might be leaning and why.  All you needed was one or two to have an excellent day.  The language is simple and we'd all should have been prepared..

TBSI got back in the hunt and is close to highs.

VMW, we don't cover much tech, but VMW has been the one we have traded the most.   Finally..this one is acting with the sector

which is leading the recent parade and not playing on its own terms. $90+ is in reach now

ROS, GLDN our Russian telco plays are not be forgotten as long as they cling to highs and therefore offer more upside potential in the near future.

WX and BIDU( wasn't all JPM initiation), it was a matter if you build it, they will come!.   The build up was the overnight markets and these were prime candidates to play in the mud with the others.    Anyways, yesterday was a day for us to daytrade these high flying Chinese stocks and it occupied most of our day.    Now, we need to get back to basics and deal with reality and concentrate on the others like GS, FSLR, VMW, AZZ etc.  The EPS winners and ones to come and the potential set ups that we can all get in early on. 

We all need to be a realistic after two days of solid gains!

..fence sitters?

Despite all the hoopla since the premarket note on non-farm last week, we haven't seen the volume we would like including on Friday.  Some did, we did not.   We figured there were a lot fence sitters waiting to jump off and into this market long. Unfortunately, we have not seen the conviction in buying.    This market might be a little exhausted after all the subprime events over the summer and now needs a push.   Earnings could provide this kick in the butt, but this could be a little ways away.     In the meantime, we deal with a possible lull or pullback in the short term.    Yes, you can blame the volume on Columbus yesterday for the lack of activity, but unless the FED minutes provide a surprise stimuli, we might be in for more mixed trading until we get the significant names reporting.   What matters this earning season is the guidance for the 4th Q.  A stock might be beat handily, but if the guidance is average the stock may still fall.   Be careful chasing the headline number and wait to see the guidance before jumping in.    So..while we might be taking a breather in the US indices, the Asian markets new highs spillover and we continue to find possibilities in the stocks listed US side....They have no fences left over there it seems!..lol....If we could highlight one stock every day before morning, like STV yesterday...wouldn't it be just swell!

STV,  definitely the attention grabber yesterday as seemingly a few dollars were made available over the weekend to chase this puppy. The reason for the action is just as expected.    A mix of China and tech with quality earnings is a fine blend to drink.   We have thirsty traders, they can't get enough of this China bubble tea stuff.  You already can see what happens and might happen day to day when this gets intraday toppy. The stock fell over 4pts in minutes to its breakout afternoon point where it gained steam upwards again.   It was fueled with a little print pumping by Briefingcom..well, what else can you call a posting profile 10 minutes before the close and some Cramer doing and this stock continued on AH and then today's premkt.  This is not a stock without fundamentals behind it.  Also as we said yesterday it trades on the NYSE, supported by Tier 1 firms which makes it different than the recent Amex high flyers.   This doesn't mean the action won't get volatile, it just means you may be able to put a few shares away for a rainy day and swing the rest day to day.  Will the action around $50 levels provide a psych wall in the very short term?.   It should and sometimes these plays high out premarket following a huge day, but after playing yesterdays action you know there are plenty of traders knowing and wanting to drive it down the fairway 400 yards soon!.  Have fun!.   Just remember to hit the deck when you hear 'FORE" at a toppy juncture!.  Don't ever feel left out and start chasing blindly.   This is not a Baskin Robbins flavor of the day or week stock, it will be here for a while.  It beats any XFML pump and dump on a Monday morning;)

DRYS EXM TBSI..oh, stop it, please...no wait don't!.  These guys keep on marching forward and while the solars (not FSLR state side) go through their internal problems, this niche is providing tradable days over and over again as they continue to make new highs.  PRGN, ESEA had nice days as well and might provide a continued secondary play.  For us, it's simply sticking with the 3 big boys we have followed for ages now.  It is easier to trade the ones you know then going off and participating in something you are not so familiar with.  Call this your little black stock book rule!.   This am, KKR bought up a Turkish shipper in a deal worth something like 900mln euros. We've said this last month as we alerted the shiipers as a whole, we expect consolidation in this sector to come and you have to thing one of the 3 boys will be swallowed up sooner than later. This gives the sec a little more juice.

VMW, this one has been cornered here again recently with the prospect of 90+ dollar days ahead. We are there now at $95 and might have to start looking soon at $100 prospects if the tech keep providing the lift it needs to go higher.

MHJ,  as we said we think this China has the fundamentals to go higher in the Q's to come.   We don't want it to be mixed in with the spec stuff and prefer to see it walked up.  This doesn't mean we won't take a bubble day or two, but it will mean we will take the profits it generated.  It's acting well.

...The Love boat (ship)

Despite the major indices puttering along, notably the Dow as the big caps lost its allure thanks to profit worries hitting the A-B-C's and even an M of the big cap niche (AA,BA,CVX,MON), the DJIM closely watched index hardly blinked an eye.  This midday down tick included the RUT, rotting away till a late push made for a mixed day.   Life went on here, the main concentration here this week continued on the Shipping stocks and most of us were humming....Love, exciting and new..Come aboard.  We 're expecting you.  Love, life's sweetest reward...let it flow, it floats back to you....Okay, no romance here, but we were all waiting for more traders to get aboard our ships filled with iron ore and cereals to send our stocks higher.   Most importantly, we were waiting for those interested in a FREE ride and we definitely got this low floater discovered as it hit Briefingtrader and then late afternoon the more widely read day log that really pushed it.  This was our cry in the forum early and our cries turned to smiles as they profiled FREE late in the day.

The boys DRYS, TBSI, EXM, the secondary plays ESEA, PRGN started great and of course the idea of FREE caught on.   For a second lets turn back the clock to Aug 26 when we issued a weekend alert as the markets were dwindling, yet the shippers were making new highs.   What a concept buying the NCH is!.  This time it wasn't for an individual stock, it was for a sector.    Why not?.   This just stamps the over played methodology here of buying the strongest, those near highs and those making NCH's.   Same goes for the China stocks we've been trading.   The idea Tuesday at noon that this sector might go even higher after an already great morning proved to be true and TBSI had a nice and quick 5 point upside from the $50 mark.  Oh yeah, great job Briefingcom for picking up on the secondary plays to the big boys, it only helps our cause that was expressed here early this week.  We're not looking for the recent China speculative action to repeat itself,  so what we do is sell to the ones boarding this train late...sorry meant ship!.   Hey, every nice size cargo has to be unloaded at some time and we're not shy about doing it.    FREE, we waited long enough for this to be discovered,  our last note was early Tuesday afternoon and of course we were selling quite a bit into the strength.   We've always tried and discovered stocks before the herd as many of you know from hanging out with us at those seedy bars before.   There is money to be made in getting early, it is a clear monetary advantage to get to something first and use the later herd discovery as an advantage to your pocket book.   This was the case with FREE, even MHJ got  some print and pump in other circles.    We don't doubt this could go higher as this discovery on huge volume should give it legs and we'll trade it accordingly.   Our only fault with it is it has a knack of giving it up (gains) and until that seller is completely removed, we aren't so sure it won't again.   If using the big volume surge as a gauge this shouldn't happen...still if some profit taking takes its course in the big boys soon, this FREE will see it too.  The BDI jumped 3.6% and the fever will continue into Q1 `08, but not without a few hiccups.   We've seen them before eh?.  Not all up days are 3.6% on a index are they.  Also, don't confuse dry bulk ships with those carrying crude.   There isn't a worse area to swim in.

Unless the #'s, guidance from the big techs ( most importantly) is terrible, we are of the gut feeling the RUT will have a melt up into the late stage of 2007 and catch up to the indices that are making new highs seemingly daily. We're in the right place with the niche we cover if this happens..okay, when it happens;).  So, don't panic when you see the DJIA drift lower just over100 points if your DJIM play list is not blinking like yesterday.  Anyways, a very good week as we've been in the loop as to what is going to move. 

A few scattered names of interest/ focus that we have been adding to or looking to possibly get in, include................

VMW, tgt raised yesterday by UBS,    China's STV, WX ,EDU (eps next week, maybe a little run before off a NCH today), also dirty Brean Murray is here so after JRJC who knows what they might have in mind here,    GLDN, which regrouped and had a solid day,   CETV near highs,   CSCT which had some news out on revenue yesterday,  maybe even GROW on a reversal following some asset news yesterday and ARTW, following EPS midday. 

..winds of change?

Winds of change?...on any given day that weak news breeze would not have moved a leaf on a tree.  The weak breeze, the ones given as explanation everywhere is the JPM estimate knock down of BIDU and this Weber's comments from the European Central Bankl on raising rates.  Okay..since when is a 2mln cut in revenue estimates in one individual tech stock enough to cause the NASD to drop so steeply.  This wasn't a downgrade, they didn't lower EPS, they didn't cut the $400 targets they set in early October.  They actually gave a few highlights and said the revenue loss was due to what was already known in early September as a slight possible short term negative.     Now, to this Weber guy.    Going through the Financial Times here in Europe, there is not even a mention of this, okay one ...one line on the last page.    So what happened?.   Simply,  we've been talking about the divergence in volume to the rising indices as a concern.   You can't keep this action up without a negative tone setting in if it continues.  Add... the fact we had possibly reached a short term tree top based on so many consecutive up days,  it was inevitable to see a correction sooner than later with a shake of that AAPL tech tree.    The surprise was the magnitude, the steepness, the speed of the snapback, especially in these momentum big caps.   On the other hand is it really a surprise to live this drop?.  Not really, if you understand the game and aren't blindly involved in it.   Momentum stocks give it ,  but they also take it back ruthlessly.    If you're here, you know this quite well as you've probably been a victim more than once and it doesn't matter if it's a momo shipper or the headline grabbers of AAPL and RIMM.    Live and learn.    Same holds true with stocks.   Maybe some of you were beaten up yesterday, but you should only blame that greedy bugger that sits on your shoulder as you sit in front of your trading platform.   We've had an awesome week here from the STV, VMW, FREE and the shippers to name a few.   Plus...the morning was great, more of the same and some new recent additions like MHJ to 16+ from 13 last week, GLDN to 68, CETV to 103, EDU to 70, all spiked and we had one for the scalpers in HSWI for a possible 20-25%.      But wait...ask yourself the question why were the markets up in the morning?.   Did the blue light special just go off?.    Think about, we were up on Wal-Mart!.   Since when are we gauging this market on this relic!.  This is froth when see the whole market gap, run up the Wal Mart aisles!.     Simply, 'we' the market set ourselves up,  we ran the market blindly yesterday and the days leading up for a mighty profit taking reversal.   The suspicious thing of this is it comes just days before the big tech stocks report.    A coincidence?.     Maybe a pullback, correction now so the big boyz get some cheap now and then rally us into Santa's lap?.    The idea of the indices going straight up from end of summer after all the turmoil till the end of the year, just doesn't fly if you are at all realistic and sane.    So just thinking out load that this is a short term ...much need breather to fuel up.   The DJIA respected 14000 as it did last week,  if we go below and start holding below 13950, we could be in for a further ride down.    Lots of possibilities now, lots of spin..lots of noise.   It's all about the big caps techs and the reports coming up shortly.    You just saw what a little noise can do yesterday, close your eyes and see the damage that can be done if these guys start disappointing.    Next Friday is the 20th anniversary of you know what!!!!!BOO-HOO!!.    There is no harm of staying clear until you know and see more.   Much easier to jump on a moving bus than sitting in one and waiting for it to move in the direction you want..we all want.   There is always 'only' a need to take profits in stocks.  If you already blew this opportunity for yourself this week,  you might want to keep a few pieces to possibly catch a bounce.   It's up to you.   Just know your stocks, know their capabilities...their stress level, their sensitivity to market conditions as they arise.

Also note, WBuffet is selling some of his large China stakes. Oh boy.   Is this more of the political angle involved with some of his holdings or is this what his view of China is in general?. hmmm.  Surely, the spin will start from this to scare you silly.

Tech stuff this am..ORCL M & A news,   AAPL tgt raised by MS,     IBM estimates raised by JPM before next weeks report...as if yesterday's tech wreck didn't happen;).

..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!