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...

Tough to shake off earnings enthusiasm...

It's almost unthinkable that we'd start the earning season with a nasty drop which begins the long decline.   What happened yesterday simply gives many traders a dose of reality that nothing goes up forever and pullback/pauses are very common even in a seemingly bull market.    Hopefully, you just relaxed watched the All-Star game and watched our Blue Jay star make a catch late in the game!...Wow, wasn't that something..lol...Guess the manager thought his arms were too tired after the HR' derby the night before to let him get an at bat.   Thankfully, today proved that nothing has basically changed since the day before yesterday.     Good earning plays are still being rewarded and bad ones are being dumped.   Things are about as orderly as it gets.     Also, for most participants, it's irrational to sell before the optimistic expectations they have with respect to their holdings.     For DJIM, it works the opposite because we only get excited AFTER an earning has been announced.   For us, there's no optimism, no expectation nor any feeling toward any up coming earning announcement.    We are just excited over other people's excitement so we can take advantage when the actual trade comes.

There's no shortage of plays on the table today.    For us or for most traders in our loop, we'd like to point out that we have a habit of working with the green plays.    It's not only easier to do but it also makes a lot of sense regardless of the market condition.     In an up market, obviously you want to hang with the ones with the best momentum.  In a down market, anything green pretty much makes them stand out and you sure want a piece of the action unless the market is in a total distraught.    Buying dips, on the other hand, is definitely not our favourite strategy and we'd try to stay away from it as much as we can.     When you buy a dip, you couldn't help but thinking that you are just taking a chance that hopefully you are buying it near the intraday low.     The planning of the trade as well as the execution will be tough on your mind when you go against the trend.      That's why in an up market or when the market is in a clear bull mode, it's always better just to ditch those "buy on (#)ema dips" and work with the new highs and break outs.

LPHI, you are probably wondering why we weren't being aggressive buying the dips on this one when the "clear" outcome is for it to go challenge the new high.   Well, there's always the probability that it won't.     We basically want to strike when the moment is right.   Today we got that moment between $35 and $36 and we got in.    Instead of being in this one for a while and waiting for a move to happen, we'd prefer watching it until the move comes.    Now the chart looks good and it looks like this one is ready to challenge its old high and beyond.     We'd be adding more of this one aggressively if and when this one strengthens up.

CCF, our old friend did it again.   This one came out with pretty good number as noted last night and stock acted correspondingly.   We like the volume this one exhibited.    As we have mentioned earlier today, this one has an IBD rating of 85 93 before the report.  If the number gets revised up, it can mean a whole new world for this play.   Again, it's just a possibility and not a sure thing.

ASYS, finally, this is a new  play we are adding to our list after its tremendous "look at me" volume today.    This one has a very small float and since they are associated with solar plays, we think this one is way undiscovered compare to others.   Sure, many traders have started noticing this one today but we think the fun may be just the beginning.  If you played it off the alert, you got 2 runs of almost a $1 intraday...we're looking for more and so just added on the dips.  This little company is profitable, revenues growing and a very small float and not a one trick pony that was trading under 50k share day after day (2.2 mln today). This is the type of company when it reports that has the markings of potential yr. over yr numbers that will get it attention...but we're not waiting for that day off this volume. We said, we are seeking more attention for anything solar from the firms, news to keep these going, anything with solar has a ring to it to us, even if it is something like this today on a semi/solar like AMAT, which ASYS also happens to be...BofA believes solar opportunity transform AMAT into growth stock, BofA believe is AMAThas closed another solar thin flim deal with a European co. They est the size of the deal is 40MW with the initial investment in the 60m range. Firm believes the latest deal is particularly important as it is an emerging application, "building integrated photovoltaic". Total value of solar thin film contracts won to date, firm ests, is in the 540 mln range.They think AMAT will now win 600-900m in contracts in FY07 vs guidance of greater than 400 mln.

DRYS, this one was mentioned a couple days ago as our favourite shipper now before TBSI went tipsy.   It's been mentined here many times before that as well.  We felt TBSI needed a pullback but this one looked better chart wise, anyway.  btw..TBSI is back to $31 after yesterdays sale.  But it was DRYS today who showed us who's the boss and took on almost 10% and a new high.    Again, we wouldn't want to chase this one blindly as the risk/reward ratio is not nearly as good when it was around $45.

AZZ, to us, this thing for sure is going to break $40 and beyond.   Action looks superb in this one and we are adding.

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

DJIM #29 2007

The easiest thing to do would be to speak of the big market move last week, but we won't do that and instead look forward to the week ahead. Hopefully, we steered you in the right direction in our Journals the past while and you have stayed invested heavily in the market and our plays as they were the beneficiaries as much as anything else last week. Just looking at the list from DIM #28...DRYS TBSI LPHI AZZ FWLT PENX DDUP SCOR FSLR TSL LDK JASO and you see who played with enthusiasm.  If you need still need to grasp the significance of last weeks action, just look at the weekend charts/comments.  Funniest quote so far heard though, is ..."meanwhile while the media is enjoying their victory lap, many investors are less than enthusiastic about the moves in their accounts at the end of the week....they didn't see the same huge gains in their accounts".  Name the the tout and win a free month at DJIMstocks...NAH, that wouldn't work as too many of you are quite familiar with this singer.  Sounds like sour grapes for some reason, if you ask us!.   At this point in the game, we have to look for some potential stalled action, fortunately we have earnings as the base of this DJIMstocks and it should not stop us from going forward as earnings will pick up this week and new picks will start to show their colors.  We already had some nice reports from CCF, GBX, SCHN  indicating a diverse crop of good reports possibly to follow. Use our Earnings Dates link to see some notables reporting.  Again, we ask for members to post within that link any earning dates for DJIM stocks past and present plays you might come across and we will edit them into a list for all to keep track of this Q.  Going forward, we're basically keeping to the same list as last weekend of stocks we are concentrating on, plus a few new ones that appear all over DJIM last week.  Take into consideration some stalling action in the market realistically should come to some of our names as well.  When that happens we wait and see if the stock sets up again for us to enter a buy in. Examples of this are PENX and DDUP late Friday. LPHI was another were patience is rewarded as it put in a 5pt move after we moved in again.  There is not much to add to individual stocks that was not already said last week, nothing has changed really in our thinking towards those plays  A few other breakouts of past DJIM stocks that we have not signalled out but have been mentioned in our forum such as CMED, SPEC should also be included in any watchlist. The most important thing right now is probably to start freeing up some cash if you are heavily invested to use on new plays that will emerge.  It is quite hard now as everything seems to be running and gunning out there, but it is something you might start doing this week.

Trading for the sake of trading....

On surface, this market didn't do alot on either direction today.    When we look closely, it's actually pretty volatile given  where we are, which is essentially the beginning of the earning season.    Some stocks have given up some gains early on but that is just part of the game.    As traders, we have to respect the nature of this game and participate actively as oppose to just spectating as by stander.    The point we are referring to is that we have to actively take profit when things are going good.    For those that have already gotten into this habit, then it's definitely something to treasure for.    We'll take a look at some stocks....

DRYS, this is definitely one of those stocks that have had a tremendous run in the last few days.    We thought it looked a little extended couple of days ago and today it confirmed our suspicion.    At this time, we are going to be shy away from it unless a dramatic move happens to the upside.

TSL, there was plenty of time in the early going to lock in some profit from its recent runup.   If you got a little greedy, well there goes the last few days worth of gains.    When treating the type of momentum stocks like TSL, it almost always pays to sell into strength and buy back on new highs.    Also, it's crucial to setup tight stops and this can save lots of pain for most traders.     This one touched 9 ema today and we'll see how it responds to it tomorrow and next couple of days.

LPHI, this is definitely one of the better, if not the best plays on our screen today.   Believe it or not, it tacked on almost 6 points since our b/o alert of $36 area.    Now, the worst thing you want to do with this kind of play is to set a price target.    In our opinion, it's just not realistic to set any kind of price target.    We go with the flow.    We'd sell some into the strength and if it comes back and goes higher, we'd chase it higher.    So how do you know when the runup will stop?    We'd get worried if it takes out previous day's opening price with a close.      Although this may not work every time as a reversal signal, you can always buy it back(higher) if you get shaken out.    Remember, we are traders so "get shaken out and selling too early" is just part of business.

ASYS, we like this one's setup even though you can say the other solar stocks are in bit of a funk today.    The low float is a definite plus when it comes to trading this stock.  The fact it's still a semi business after all  is also separating it from the other solar stocks.

PENX, this one also did not disappoint and closed reasonably well despite the market's late day weakness.    Based on its recent action, we think the race to $40 range is on for this one.

VSR, some of you have probably been trading this one last little while and so have we.   We think a pullback is definitely needed if this one wants to see even higher prices.   Momentum is very strong and news flow is very steady with this one.    The intraday action has been opportunistic but unless you can stomach the possibility of a pullback, it's better to wait for a better entry.

Market is heating up on the earnings front and even some of the speculative ones have been driven up on positive results.    We just want to caution readers that when looking at the price reaction relative to the earning report on the speculative ones,  ask yourself if the reaction is reasonable.   If you think the reaction is reasonable, then ask yourself again how long this reaction can last and ultimately ask yourself if you are going to be comfortable trading/holding it till next week.     No traders are alike when dealing with any kind of plays.   We just want to make sure that you are aware of the risk and effort that's involved into making a spec. play profitable. 

You want tech earning?

Well, there you go tonight!    The highlight is the two of the biggest technology companies reporting tonight.   We are not going to discuss nor analyze their earning because there's tons of dedicated websites/articles/analysts for that.   What we keep an interest on is the reaction for each respective stock in after hour.     The action doesn't look too positive.    This is probably due to the expectation that's been set in place for these companies.   After all, the rally we've been having the last little while is largely due to the anticipated good results from the tech sector.

For one thing, tomorrow is going to be interesting as we'll be able to see if there's going to be a change in shift of the trading mood.     It's important because when we are in a bull mode( so far), every downtick or dip can be bought safely in anticipation of a bull push sooner or later.   When the bull mood changes to the cautious mood, the dip may not be bought aggressively or at all and this can dramatically lean heavy to the other side of the spectrum.    Of course, we don't want to make a quick judgement either if the market opens sluggish tomorrow because there's still tons of tech and non tech stocks that matter to this market that haven't reported yet.

Bottom line, don't play the earnings before hand and play them afterwards.    For us, it's also true that big companies make up the headline but the small companies make up the profit in our portfolio.     So, we keep in mind the potential change in trading mood but still actively hunt for good quality earnings report from small and mid cap sectors.

DRYS, if you really had to point out a real winner today then this one is on top of the list.   Yesterday's sluggish close is all but distant memory.   Of course, we'd wonder if it wasn't for that price target increase from Jefferies, would all these shippers even go up at all?    At this point, we are simply playing some intraday moves and aren't holding any over night.   We still feel the risk to enter for a long position is too high and we'd prefer some consolidative action first.

LPHI, we are parting away a fair portion of our position in this one.   What this play has done for us the last few days has been nothing short of phenomenal.   It's just a little too far extended at this point.

Solars, if yesterday didn't raise any cautionary flag from this sector, then today it's screaming that the sector is breaking down.    Believe it or not, every one of our favourite solar stocks we've been trading the past while, including FSLR, TSL JASO LDK, have broken below 9 ema today, all at the same time.    These stocks have not closed below 9 ema in about one month of trading time and that's about 20 trading days.    Now, this may not look like anything meaningful to some but to us, it probably means the fun time may be come to an end with this sector and we are shying away from this group untill some dramatic positive catalyst happens.

LKQX, we bought a starter in this one as the reaction to their takeover of Keystone has been very positive.   We are going to be watching its action closely.   This one is sitting on a huge short interest, fyi.

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.

DJIM #30, 2007

If there's one thing the market has taught us in the past, it's that you have to always be prepared to face the surprises.    Out of all the companies that have reported last week, nobody expected an earnings miss from the growth behemoth Google.    Sure, some of you can argue that you saw it coming, and that sooner or later it'll happen to Google.    However, lets really be honest here, there was just no indication or any warning from the company or analysts that suggest a short fall was in order for Google's current quarter.     Well, it just made this situation very tricky for this market.   Of course, one company cannot bring down the whole market.  So, CAT helped.  A few of the well respected and cheered companies can certainly derail the market's bull pace, that's for sure.    So what we are going to be keeping an eye on the next little while, is to see if there's going to be a fundamental change in market participant's trading behaviour.    Usually a market participants sentiment would directly translate into his/her trading action.    Action, is what most of us are concerned about.     Well, we do this sort of mental checks often to keep us disciplined.    Before we commit lots of our capital and energy into this market, we have to make sure market's in a favourable environment where mistakes can turn out to be forgiving, not disastrous.   Now lets review some of the plays from last week....

DRYS/TBSI, this duo along with the rest of the shipping sector, has enjoyed one of the most profitable weeks in their lifetime.   It seems analysts are just jumping bandwagon with one upgrade after another.   Nobody wants to be left behind when the whole sector is hot and in play.   Of course, it does make them smart to act the "correct" way.     The difference between us and those analysts is that although we also jump on the bandwagon, but we only jump on because of the trading opportunities.    We can jump off just as quick too.    When dealing with a hot sector, we'd definitely separate the stock action from the companies' business.    Basically, even though one's business may be the excuse to explain the stock behaviour, but ultimately, we trade stock action, we don't trade a company's business.

Solars, this sector has seen some intensive selling for the first time in a while.   Sure, you can say it's just healthy consolidation and it's just a matter of time before they break up again.    For us, until they break do break out, we'd remain very cautious on any bounce attempt.    The only exception from the sector is LDK, which had some company specific news.   We'd keep an eye on that one to see if it warrants further trading opportunities.

AP/TXT, these are two new plays we've added to our watchlist/portfolio.   We are feeling very positive about their earnings and the way traders reacted to their earning.   It's definitely more important to get the right kind of reaction than number.   Again, you only profit from a good reaction, not an actual eps report.

Bottom line, we still have a large portion of stocks that have yet to report and we continue to look for that unlikely hero.    To us, the big companies provide the headline but the little ones provide our bottom line.    As long as the big companies stay in line for the most part, we should still go aggressively after those small ones with a favourable reaction to their earnings report.

..nice day in select group...

Another round of M&A activity on a Monday gave the markets reason to bounce after Fridays sell off.   However, the taste of disappointing tech earnings lingers on as the NASD gave up most of its gains by days end. Somewhere in the middle of all this were a bunch of closely followed DJIMstocks that had some fabulous action.

TXT, after consolidating some of its gap gains off earnings, today it showed some of it's potential by climbing a steady 3%. Now we see if it can take out the highs on earnings day and gain some momentum to which we can add to.

DDUP, we`d love to see what this one could do with some volume. Could easily be a 2-3 point day in store for it if the volume actually showed up.

TTPY, this newbie from last week pushed hard early to mid 26's on the heels of its late day push Friday.  We'll see if this action puts this IPO on some trading screens by watching the volume before adding more.

TBSI, DRYS, this incredible action continues. We`ve outlined previously how we`d approach trading these at such lofty levels.

LDK, we talked about the targets this one got, well today at least one of them got hit. Unfortunately, it is really the only solar doing anything at the moment.  Maybe this is the way it will be until FSLR reports on the 31st.

PENX, looks to be back in the game as it closed with a NCH.

CMED, tacked on about 6% and could be the beneficiary of some of the ISRG action.  Reason being it has been mentioned as the next ISRG.

With AAPL to report on Wednesday, we`d put good ole`SNCR on top of your trading list for the next couple of sessions. Today it gapped off an upgrade related to the iphone.

Clearly...

You have to respect what this market is capable of.    Also, we are crystal clear on what sort of market news this market does not like.    As we have said before, as long as there's no heavyweights that can tip the fine balance of this market, we should be ok.     However, if there's enough market moving negative news coming out in a steady fashion, even the most bullish case will have to be shoved to the side, for now.     It isn't pretty out there and we really have to raise our cautionary flags a few notches today.    Market has been very volatile lately and unfortunately much of the volatility seems to weigh on the negative side.  It's been bad..good..bad..good and today it got ugly.  We all can read about it elsewhere, we had some prelim numbers on AAPL's iphone biz premkt and then we supposedly had the entire market on CFC's CC of 3 hours taking us down late in the day. Earnings are not stellar and there is fuel being added with the housing, sub prime hourly reports.  AMZN up 12 bucks AH and maybe others, including AAPL AH's can give us some reflexive bounce action soon.  At this point as we said this weekend in the charts, the lines are drawn in the sand  on the indices and today the NASD cut one to start.   We'd be selling holds into any strength now, unfortunately..many will be thinking this way.   Tomorrow is probably the busiest EPS day with many S & P co's set to report, willl we get some reprieve or will focus shift further after CFC into the ECO/ housing #'s out tomorrow.  There are a few small cap reports that aren't getting the attention they might otherwise, despite AMZN's move tonight.  We'd just say be a little more careful now if a stellar report comes out on a micro/ small as the interest might not be as we are accustomed to.  So watch the chasing of the gap if one comes along.  We'll see...volume will always tell the tale.

At this point, we'd like to stick with the more predictable plays as oppose to wager on a bullish market to bail us out on some of the potential setups.      Ok, some companies have reported some nice earnings but they are also prone to be vulnerable to severe market sell offs.    We are back to a stance of taking a wait and see mode on new buys.   We've talked about only using the morning calls, early action if any, as in indication if to trade the TBSI, DRYS on a particular day lately.  Today, clearly was what we feared if you were holding these overnight.  TBSI was ugly late in the day as the cries of all overboard were heard on this shipper.

We basically want to see which plays can emerge as potential winners when things do settle down.  

Today, a few probably got lucky by selling off the DDUP, AP first thing in the morning as it turned out.  For stocks trading this thin..market orders, stops are usually suicidal.  We've seen both of these stocks bounce nicely in the past few days after such action.  Watching a stock down 2 bucks on less than 50K early volume is simply a few causing a stock to falter fast.  Best to sell into positive action, you'd get a better price yesterday than fleeing early as today in most circumstances!.  Most circumstances are not -200/50 point days.

CRNT, this is probably the only predictable thing on our screen today, despite a downgrade.    It's predictable as in a sense it's being played for a potential high ranking IBD100 debut.  Too bad we didn't start earlier than today as on other plays where the potential % return leading to IBD listing was much greater, such as GTI, NGA.   We'd be playing this one aggressively as long as the mood is right with it.

Bottom line, we want to have a clear vision when it comes to trading and we aren't getting any today.    It is best to protect the capital at the moment and let other market participants sort out the mess.    There will be opportunities when things get settled down.

Pair of Aces...

When you have a pair of Aces, you usually have a pretty unbeatable hand.   In our case, we had Amzn yesterday and Aapl today.    Does this pair of Aces have enough karma to save this market?    Or maybe, is this market really in need of saving?     Some are doing there best to make it sound so..

AAPL is definitely the big enchilada the market was waiting and expecting on today.   What everyone was hoping for was obviously an AMZN kind of reaction.    So far in AH, AAPL is delivering and is up over 10 bucks.    Now we are not going to analyze their report, their ipod or iphone, Mac shipment numbers.    That is really an irrelevant issue to us traders as our main concern is how this thing is trading and what's the likely implication it may have on others tomorrow.    So far, despite the early weakness, we say the reaction has been pretty good.    Hopefully, this can translate into a positive spirit into trading tomorrow with the help of some of the firms morning calls that cover it.    Market was hairy at times today but somehow the indices pulled into green territory.

Bottom line, we want to see that the good earnings report are still being rewarded.   This is the fundamental strategy of DJIM and without that, it'd be pretty much useless to trade.     Fortunately, good eps reports are still getting bid up, so we are still very much in this game.    What we do want to caution to our readers though, is that in light of the recent market volatility, we are cutting down our position number 'considerably'.    We are basically only trading a handful stocks now which we consider have the best potential and the safest setups.  We are also concentrating on new faces, leaving most of the recent winners behind.    We want to trade in a manageable manner so it's time to go back to our basic "be very selective" strategy. We are not in the buy the dip scene either now, so it is better to start with fresh names reporting well and avoid the dips in Solars, Shippers and others that have ran this last Q at this point..  Have a look at VSR, PCR for some more that have beaten up today..quickly.  We want to avoid anything close to this, the best way is with fresh names.  A good report is not going to fall 15-20%, an over extended stock, but a recent runner might for many reasons.  If a stock is breaking out to new closing highs as with LPHI, it is worth another flyer in our book. Still, you have to keep it manageable and in decent size.

here are some plays we are dealing with today...

LDSH, we bought some off its report today and liked the way it closed.   The report is pretty strong and the reaction is even stronger.  This one has basically been stuck around the $39 to $42 range since Feb. so this report is potentially giving this one a good excuse to kick into high gear, for a new runup.    We have been a little aggressive on this one today and we are looking for some multi day action from this one down the road.    Read the earning report, we think you would be impressed. It probably didn't hurt BA was up early with a nice report.

LPHI, how high can it go?  If we just stop asking ourselves that question and pay more attention to its action, perhaps we can get some more profitable trades out of it.   We added some today on anticipation of a good close.  It closed well and we are eyeing the $50 mark at this point.

ANIK, this one reported last night and we couldn't help noticing its strength today.    With its IBD number of 96 84, we think this one is also a candidate for a potential IBD runup. They had a FDA approval to go with the report.  Many of us traded this in the past, hopefully, we could have more glory days with it.

AAPL/BIDU, just a heads up for tomorrow and you case you haven't heard, they are both up multiple points in AH.

What will it be?

Tequilla...JD...Vodka....maybe a shot of each...or maybe a two-four, as we so dearly call it in these parts.   You're/ we are entitled to whatever tonight!.   If you wake with the spins, that's okay cause it might you keep away from buying this slaughter house in attempt to make some of your money back.   Our preference now is to stay in bed ..alone..when it comes to buying any dip or holding anything in size overnight.   We're not about to make this into a daytrading site as it doesn't suit the majority of our membership.   But, if we see an opportunity or if you do.. shout it out. 

There is no way you could have avoided any or most parts of today.   If you were 100% cash heading in, that's only possible if you trade 1-2 stocks at a time.   A scene was supposedly set last night with the Q's being up from the AAPL report.  Some kind of positive was expected by all coming into this morning.   Unfortunately ...and surprising to most the futures woke up with bad breath.   Simply, even if you liquidated 90% of your holdings the past few days, you were still in big trouble at the open as the market plays no favorites.   Stocks gapped down 1-2 dollars and there was nothing you could do, not so liquid DJIM stocks were shot first.   What you do is natural and that is wait for some reflexive bounce action, we've seen it for months as buyers step up to the plate...so you look for it... okay...now as the Naz is down 15...down 20...then down 30...oh yeah its coming at Naz down 40...okay maybe ....50.....60....chit 70+??    If you are looking forward to tomorrow to catch more of this late bounce, that's fine,  there will be short lived opportunities to cash some back in.   But.. in the big picture, you really need to do some background research and realize that this sub-prime, housing story is coming to a 'global' mess created by the US credit market if you have a book of stocks.    We have mentioned many times over,  we love when 'Paulson' comes in to save the market.   He usually does, but it never needed saving like it did today... Paulson says..."Mortgage/Sub prime Collapse Doesn't Threaten Economic Growth" .  The bounce started late as all of a sudden his comments were released...hmmm, yep, that's how it works.  The big boys call their ex wall street frat boy in power and try to have him save..help out....but, today he didn't need a call or 100.   It was a no brainer for him to step in.   Unfortunately, the mess they created is spreading where fear is being felt overseas.   Confidence is dwindling by those around us and that's not good at all.  

In the premkt, we had more than a few excellent reports as pointed out by members.  There was something fishy going on at that point, besides the Q's being down, there was no interest at all in some excellent EPS reports.  Nada..zilch..goose egg...no hitter.   No volume was seen.  Q's are constantly down in the morning, but usually there is still interest in individual issues out with nice EPS..not today!.   Only the big fish have received a good trading enviro in the past week and they are AAPL, AMZN.  We have seen too many enthusiastic, no volume opens on good results from small caps and what has resulted has been short lived up gap opens on low volume where a few end up holding a white flag for help because they basically buy at the high of the day by chasing.   We tried to convey this in the forum this morning..be careful out there as it's not the same market we are used to where EPS winners fly!.    It is best now to get your bearings straight on a stock before chasing it off EPS #'s.   Give it time from premkt to early on it in the trading day, this will probably exclude the micro/ small cheapies with characteristics we all so love to play when they come.    btw..there were a few small caps that acted well today OMTR, AXYS.     Others might just need to be watched and if the market begins to have a positive bias, maybe they will be the first place we should look for an opportunity in.  The dominos are falling....you never know if your stock is next in line.   We all can't liquidate 100% and pretend to see this coming today, most accounts are set up that such quick action would not be possible and if it was... you still take a beating today.   It doesn't help in this market that you can't find a buyer in sight for many of our closely followed small caps.  Your only option might be to send off a market order and bail.  Well, that only adds fuel to the fire and we have collapses left, right and center.  

The only thing left to do tonight is to suck it up and tell yourself with a little discipline you will peck and chew away at the market and get your money back and hopefully more.   There is still that glimmer of hope in the AMZN's..AAPL and many more of good earnings.  This might be an underlying base that will get this correction out of the way fast or at least give us something to eat at the rest of the summer.    The difference from recent times, we the little people really don't know the extend of this credit failure and what it could possibly do from here on in...the impression it is leaving is spreading beyond North America.  Just be smart, disciplined and wait for an opportunity to score...it will come no matter what...just maybe not in a boatload as seen recently.