BOMB- ay...the Turks are coming

Can't we just live in peace and drink up the US tech reports from last night!.  We've been beating our drum set in our gorilla suits anticipating the tech/internet earnings and now we get this stuff tossed around our heads!.   Geez.  Give us a break wasn't the subprime debacle enough!...Ah, the beauty of it all.    As far as the Turks and oil rocketing...doesn't anyone realize that the bulk of the oil is in the South and the pipelines in the North account for as much pipe as there is running from our toilets.    No doubt we will now get many attempting to get on the subject of the "Trick or Treat" due end of October by the FED as well.    Anything to turn our attention will be spinned to make the relevance of the earnings last night seem unimportant. lol.    We'll just reiterate what we said yesterday and that is to deal with what is front of us and pay no immeidiate attention to what geo-political, rate cuts etc. stuff we can't do anything about.    So..let's get on with the show and deal with what is front of us.   At this time...it is an up futures market here and we should all use it to our advantage in the morning...

YTEC,    this was thrown in recently on the forum amongst all the the China hype.    A big difference to many others that hit the board is this never got screwed by being run-up and then dumped.    Instead,  it has pullbacked slightly in recent days and then moved to its most recent highs yesterday and became a stock worth a try.   The almost quiet period it had, plus the reco by a firm recently gave this stock credibility in our view, something most of the recent gunners never had and therefore are sitting in the pump and dump category way off their highs.    Part of our trading methodology is to buy late in the day after we see if the stock has what it takes to possibly continue in the day(s) to come.  This is something we have repeated endlessly and this is why we were adding substantially into the close.    We don't take big slices of a pie until we are sure and that comes late in the dayl.    We don't mind missing the initial breakout and miss some gains.  We're looking at the bigger picture and have higher prices in mind.     If you're playing in size, it's irrelevant to go in on the initial break.  It's an unnecessary risk for us.  We've all seen failed breakout moves.  A starter maybe could be taken to keep track.    We rather be sure and then cut ourselves a hearty slice!.    This is the way we play on what is especially a stock showing signs of being a momentum play as YTEC did late in the day.      Another thing about yesterday is the China stocks we have traded here with you, such as WX, EJ were not having good days but the JRJC and YTEC were.  Hmmmm....What we got out if it is a preference for anything China bank related and went with it. 

As far as JRJC,...it has spent days seemingly consolidating around the 9ema and yesterday showed signs of moving off those levels and grabbed our attention as noted intraday.  Last nights EPS results gave early indications of spillover as traders looked for beneficiaries such as BIDU, which climbed $6 or so.  As noted AH, we saw JRJC as a one of those that might benefit off BIDU ( lumped in with it recently ) and it had no movement in shares being bought up as it stayed under $39.  Do you want to buy BIDU 6 bucks up or do you want to take a chance on one that hasn't moved and might be taken on as a potential secondary play. We prefer the latter..

VMW, performed well yesterday after possibly a 3 day slide down that might have grabbed the attention of technical traders. After the tech earnings it's a no brainer of what stock could do well from our DJIM playlist. Calculate the trading action intraday into the picture and you might have a good play today.

Despite a poor showing by the market yesterday, WBD, CETV and EDU showed resilience.  Strong stocks doesn't mean only those popping, most of the time this kind of showing is what grabs our attention.   Why?...because if good news strikes as it did last night these types of stocks should still move forward even if they have nothing to do with tech.   If the news was bad, they have a good chance of showing resiliency because they just demonstrated such the day before.     Another name that got our attention late in the day is FSLR and we will look at it closely today even though our hands might be full already.  This being the case, we apologize to those other stocks that might be worthy of more print.

..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!

Google effect

There is really only one company reporting tonight that matters to us and it is an important one, google!    Well, at least we can say that the results and the ensuing after hour action isn't disappointing.    With google at this price level and people aren't disappointed about its growth prospect and are willing to pay up, this only gives us a clue of the status of this market.    Yes, the big banks may give us some headache like headlines but we already expected that from them.   Banks are capable of taking this kind of earning hit(hopefully one time) and in our opinion will not impact the overall market that much.   This is still very much a growth dominated market.    We dig technology stocks as well as shippers and solars and any other sectors that's considered growth oriented.     To put this in perspective, many participants including DJIM traders believe that there's still quite bit of upside left in this market.   The key, of course, is to realize which stocks are the driving force of this market and stick with them at all time.   It's been a while since we have these many stocks that are triple digit or approaching triple digit on our watchlist.    This simply reflects the kind of activities that are going on in this market and we better be there to take advantage of them.

Right now, the last few days of weakness feel like nothing but a minor pullback.   In this case, strong stocks should be bought on dips aggressively as long as they are technically intact.   There's really only one way to play a bull market, you buy on dips and you buy on breakouts.   DJIM traders have been very aggressive on the long side the last while and we'd intend to keep it this way unless something dramatic happens.

Now onto some plays...

ASTI, exactly one month ago, this one pulled some stunning move and did a double within a matter of a week.   We definitely like to see the similar kind of movement this time around and so far we got a wicked start today.   This move got kick started by the news of insider buying yesterday and our beloved Briefing picked it up today.   Yes, it's in play and it's a hot one!

YTEC, for some reason, it just doesn't feel that this runup is over.   It's looking more and more like it's trying to setup for another run.   We are still holding our position and with the 9 ema catching up, it may just be a matter of days if not hours before it gets going.   It's certainly capable of doing that.

NTCT, this is a stock we've been watching for a few days and we finally jumped on it for a small position as it isn't pulling back from the recent runup.   This one has very good IBD rating but we feel in order for it to have a shot onto the IBD100 list, it will depend on its results next week.

Shippers,  EXM/TBSI/DRYS all had a good day and especially the first two.   This is really about how high these things can go as oppose to when they will stop going up.    We think the only reason that can stop them is when they forecast a slowdown in their business.

Besides all those usual suspects, we also like the action from GLDN, GSOL and ANW today.    Bottom line, keep an eye on all of the high flying stocks on your watchlist, as soon as you feel the consolidation is done, it's almost certain that they can go nowhere but up.  

One for the bulls...

Regardless how the individual stocks finished yesterday, the action has to look pretty good for the bulls.     Of course, you can say it's only a 200 point reversal on Dow and Naz still finished pretty red.    But, these are the kind of finishes that just cast aside any fear for a further meltdown.   Also, we had some pretty bad news and reports from the likes of MER and BRCM, and a poor trading reaction from AMZN. The market eventually absorbed all these very well.   This doesn't mean that everything is ok now and the market is heading back to new highs.    There will be more bad news from those sectors that are in trouble, and there will also be good news from those sectors that are doing well.    If this market can absorb the bad news and continue to reward the good news, then there's every reason to go long this market.      This was the first time in a while where the market seemed to absorb the bad news really well and give a cause to cheer at the end for bulls.  A big positive.

Don't throw away your momentum favourites.   This is definitely the lesson we have been learning in the past few weeks.   RECYCLE

LFT, this is probably the most exciting Chinese IPO since STV.   Compare to STV, this one has even a smaller issue size which explains the action we saw today toward the end of the day.    In terms of business, these guys design software for the financial market in China.    The financial sector is definitely one of the hottest sector in China right now and there's belief that companies like LFT will reap benefit from the huge growth there.   We were trading this aggressively just past the 3pm mark, timing it with the market turning.  It would be nice to see YTEC get a boost from the late surge in LFT.  It did look good in the morning....maybe this morning it will give it another try.

RBN EJ ISRG, if you hadn't thrown out these names, this would've been a pretty good day for you.

SPWR, with a 6+ pt reversal after 2pm.. you can see why this stock falls right in line with other DJIM plays.  Volume was there again, but after a 2 day run of nearly 10pts off an add alert, we used the strength to sell most.  We'll be back shortly.

Look around ( DJIM watchlist) today for stocks that did not particpate yesterday in the recovery. They might today if we have a good morning vibe going.

CSCO..the straw that broke the camels back?

..or is it really the last straw that broke the ' donkeys' back?.  Cause that's what this market is!...A wobbly donkey!.    We'll know soon enough, but this report/ outlook was not one that was expected and wanted.   This was not the 'water' the donkey/camel was in much dire need of yesterday after being pummeled by more of the subprime storm during the day.  This time from Morgan Stanley/AIG.. Of course, the USD played a big part too as did the talk of the Chinese putting their foreign exchange reserve into euros.  Hell, you got Brazilian models asking to be paid in Euros now.lol..who's..what's next in regards to the USD fallout.  Some intervention is needed here.  After loading up the markets back with all these subprime issues since summer, we've been able to still move thanks to the big techs earnings reports...RIMM, GOOG, AAPL, MSFT.  Now what might be a inconsequential seemingly in the grand scope of things, CSCO not giving a glowing outlook might cloud us even more.   There is a limit to everyone's endurance and everyone has a breaking point.  After literally trying to carry the market on its back, you have to wonder if the techs have had enough now.    Exhaustion might be here.    A breaking point might be reached, it is damn close with us.   What we said in the weekend chart note is we don't want a close under 1500SPX/ 13500 DJIA, well we got that as the market broke down these levels hard.  We are in a very cautious stance as seemingly nothing now can stimulate the market.   We will get the customary bounce very soon, but we'd look for that as an opportunity for the investor/ trader to sell some into and catch their breath.   Be selective if buying and go in smaller sizes.  Look for pockets of strength (eg. solars still?) and earning reports should still provide opportunities in individual stocks...eg...MA, we'd just not fall in love with too many of them and take profits sooner. 

When the subprime winds started to blow this summer, we suggested a potential switch into more Chinese and Russian (of the BRIC) stocks as this might be looked as a possible way out of what we were seeing and getting in US stocks.  This worked!.  The same concept might develop now if the techs can no longer carry the market and traders money looks elsewhere to park.  Considering all the new Chinese issues have been taken apart since the crazy run recently,  we'd not be surprised if the hedgies turn their attention on this group soon again to make some money off momentum.   Maybe it's just wishful thinking on our part, but if these guys are not meeting their goals again , they might as before and run these from the lows this time around.  It would be easy.  In the meantime, we still have the solars booming and today many names familar to DJIM, SPWR JASO etc.should benefit from darling.. FSLR report yesterday. 

earnings of $0.49 per share, excluding non-recurring items, .29c better than the Reuters Estimates consensus of $0.20; revenues rose 289.7% year/year to $159 mln vs the $120.7 mln consensus .See $480-485 mln, consensus is $412 mln, expect total production output of 200MW; planned start up costs are at the lower end of previous guidance range of $18-20 mln; 24-25% operating margin; taxrate for Q4 is 29-30%; CapEx for 2007 is $280 mln... Epcect $760-800 mln in revs in 2008, consensus is $699 mln; 1H08 revs will decline sequentially over Q4 in 2007 due to contractual price decline and foreign exchange rates;

YTEC also reported and looks good sequentially most importantly....beats by $0.06; gives outlook Reports Q3 (Sept) earnings of $0.18 per share, ex-items, 0.06 better than the Reuters Estimates consensus of $0.12. Revenues rose 44.0% sequentially, net income up 39% seq. and 51% YOY.   Co gives outlook saying, "We see Chinese banks continue to invest in IT infrastructure in order to further improve their operational efficiency and profitability, especially in our core service areas such as electronic customer service channels like web- banking and call centers, and risk management/performance solutions. We also see that small to medium sized banks are becoming more aggressive in IT investment as they prepare for public listing and increase their competitiveness in the industry. Since the acquisition of Easycon that was completed last quarter, we see great opportunity to penetrating this niche market, and we will expect greater contribution to our revenue and profit from the small and medium sized banks.