DJIM #10 2007

...19 DJIM weekend hold/ hit lists to close '06, 9 more to start '07 and we can finally say we don't have a hit/hold list this weekend after 28 straight weeks.  Its' been a helluva run in those 28 weeks with 4 weekday Journals thrown in each week without missing a beat!.  That's a lot of stocks, lots of profits and a lot of lessons in trading and investing.   Unfortunately,  last week provided what we all feared to hit one day and that is corrective activity where it does not matter what your stock does or did in the months, weeks, days leading up to the inevitable.  Was it inevitable?, of course it was and we've been hearing about it for months but without pausing once in buying!.   Many have missed months of buying because of the stance they took months ago, we know who they are and so do you!.  The funny thing is they are going to tell you over and over again.."I told you so"... You know what you say?..."What about the months sitting on your hands and not buying a lick as the market and DJIM stocks continued to new highs!... Look...we've had a beauty of a run, now we've had bloodletting hit the markets and hopefully most kept from getting any mess on their shirts and books.   We truly hope our cautious stance before the meltdown and our views during the week made a difference in saving you money and now what you saved is there to use to make money!.   Look...most of us have been through this before and guess what??...We are all still here and again we are ready to go!.  Most of us went through this in May '06 and guess what?...We were up soon and even DJIM was up and running at full speed come August.  Is it going to take a month or two?..We don't know when we will be going at full speed, but we do know is there will be trading opportunities before you know it and we are ready to capitalize.   In a lot of respects, nothing could be better than starting fresh with cash to use as some of the plays have been for around for months.  Will they lead again?...The EDU'S HMIN's GLDN's..we don't know but actually hope new leaders will emerge.   Money likes new names when it comes to momentum.  The only difference in strategy is maybe we will use a little more cash on a starter position as there might be fewer plays to start, but our holding period is shorter and probably will not extend to overnight initially.   Still,  you should not get away from what you did before if it was a successful strategy.  A starter position is best now in anything that is not an obvious runner catching momo.   We will look for short term trading opportunities.. a point here and there until we see a definite market direction change.   If we alert a buy in and the stocks moves another $1-2,  we will probably be taking profits that day.   This is not as before when we had earnings coming out of our noses with the USAP's that you could add and add and add to and then hold for days.  It's different now, it's as simple as that!.  Last week we saw money was not chasing new earning plays in stocks like GEF, even ATNI had a good Q but was pushed down another 10+% just because the giant Guyana gets some competition, slowing organic growth...it's a tough crowd last week.   Maybe a good sign will be if we get a new EPS stock to play and see money chase it,  if we see this we might have a green light of sorts that money is ready to jump in and chase all around.  Patience will make your money go further now.   Do not throw anything we said last week out the window at the first taste of a change in the trend...we won't.  Stay cool...

Question of the day...

Should we be down more today given the overnight carnage from Japan (-3%) and HK(-4%)?    To some, the action today may be a little disappointing since it was a perfect scenario before the beginning of the day to create a panic scenario.    The reason why we may be better off with some serious panic selling now is that there's a better likelihood a bottom can be formed after all the short term players get shaken out.    Instead, we had a so so open, a silly intraday rally but only to get crushed again at the end.    We didn't close as bad as some of the other markets but that's hardly anything to get excited about.   What's troubling to see here today is that there's absolutely no rush of buying even with some hint of a rally brewing.    Long players are still exiting the strength and it feels much of the intraday rally may be caused by short term flippers and shorts covering.    Of course, this is just all too analytical for anyone to take so we'll just stop right here.

The bottom line is that market didn't look like it's done going down nor it looked like it's in a process of bottoming after today.    There's still lack of any real tradable opportunities out there and it's still dangerous to venture into this market.    There's lots of fear in this market which is responsible for the lack of buying attempt.    Many traders don't think this correction is near the end so almost none of DJIM type of small caps get a bid from this sort of action.   Stocks like HMIN EDU TSL.. don't even seem to have a bottom in sight.   Where do we go from here can only be speculated one day at a time.   As of now, we just have to be patient and focused and very very disciplined.    It's much easier to lose money than to make money from trading to begin with and the probability of that just multiplies in this kind of market.

So it had to happen...

We are glad that it happened this week as opposed to last week.   Of course, we are referring to the "big rally" we had today.   A big rally like today is inevitable in a correction and this is more of a relief rally than an opportunistic trading rally in our opinion.  Three ingredients to it today.  First..it was just a matter of time.  Second, world markets bounced and hardly last is the fact the big boys upstairs brought out Sec.Treas.Paulson to give a push.  Funny how the timing of such notables appearing works into the market.   The rally today definitely has been led by those big caps that were hit the hardest last few days.    Unfortunately, as much as this rally is "jawchopping" to us, it's still hard to see how it can spill to those stocks that a retail trader trades right away.      Interestingly, the DJIM stocks that stand out the past couple of days as best behaving are the ones with earning just before the meltdown......these include UEIC, HURC and HDNG and are on the top of our list. These had only a few hours to show off their goods before the corrective action started and are seemingly fresh on some minds.  You can throw NVTL into the mix which guided higher for next Q and year recently and has held up the past week to close at NCH today.   Still most of the stocks we used to follow have a pretty damaging technical picture.   We feel a lot of the stocks on our screen are being whipsawed by the index volatility rather than their own movement.   Since it's futile to predict the index movement, we feel it's still better to wait till the index volatility eases before we consider jumping back into some of the plays with good beta.    Basically, what we want to see is traders/institutions buy stocks to hold rather than to flip and buy them not b/c of the index is rallying but for individual strength of a particular stock.     Despite the big day today, the best thing we feel for this market is to go sideways and halt the slide.    Testing the lows may also be helpful as many still trade as if the market will make lower lows and market needs to prove them wrong before we can head higher.    This is unfortunately a somewhat lengthy process and it requires days and weeks to complete.  One thing to note today is despite the indexes gradual climb most of the day, many of the 4,5,6, 7% gains we saw from former DJIM plays are from the gap open.  Many small cap plays never saw higher highs after the first 10-20minutes (eg. almost all recent China plays).  So, unless you went after the big caps during the day there was not much upside to individual small caps the rest of the day.  You didn't miss much if you slept in and shouldn't think you missed something mighty as you look at those percentage gains.  Basically, the dip buyers yesterday had an opportunity to flip their shares early on to those thinking they would be missing something bigger.  Sooner or later the dip buyers had to get the day right..yesterday was finally it.

Bottom line, today is a good day and we'd like to see more stocks participate in a meaningful way.   Next few days may give us a better picture about the health of some of the individual stocks. We'd really love to see more stocks move back toward if not above 9 ema.    We will be busy updating our watch list and prioritize the plays as they start coming up.     Keep in mind, this is not the end of the correction but a step toward the right direction.     Yesterday's low will be viewed as short term support and this is how a lot of us are basing our trading strategy on the next little while until it proves otherwise.    For now,  we are gonna be going through charts of our favourite plays in the next couple of days just to see if any is worth playing.    Financials were the cream of the crop today, if this continues look to KBW as it was forgotten today.

What is every trader thinking?

What's on many traders' mind today may be the fact that we are about 35 pts from the recent low on Naz and about 150 pt from the recent low on Dow!   And when are we going to test that low again?   This may explain the lackluster follow through we are having today with the usual recent late day selling helping out the cause.  Maybe the recent volatility including yesterdays impressive up day might have tired out a few traders or maybe we are just stabalizing which would be a good sign.  The fact that many momentum traders are simply sitting on the sideline and many institutions are having a "wait and see" attitude is not helping to fuel this market higher.  It's natural considering what we just went through, but it's still frustrating to traders wanting to get in and play.  It very much feels like the only players trading this market are the short term flippers, short sellers, and those with a compulsive addiction to trading.      Maybe it is inevitable that we will test the low again but untill somehow that perspective goes away, many market participants are just not going to commit lots or any of their capital back into this market.    Is this market tough?   Yes if you have a lot of positions or if you have to trade to meet a performance goal.      We are currently taking the stance like majority of traders out there and sit on the sideline as much as we can.    

Looking back...you can now see why we have not taken periods of good market environment for granted and why you need to take advantage of the days we had 10-15 charts up of plays on a daily basis.    We have often stressed in the past that when the going is good, we have to go all out using all we have (time, capital and effort) to make as much gains as we can.   If done right, it's possible to have made enough gains during the good market that the average investor/trader can afford to completely ignore this market now.    We learn as we go along and it's no different whether you've been at it for months or years.

ABM, sure the EPS doubled yoy and they beat expectations, but it is not why we wanted to take a stab at it again this morning. We just thought the sell off yesterday provided an opportunity like last Q and the fact it behaved quite well during the meltown is also a good sign. We were able to easily get it under $27 early and it moved a good $1 before the markets took it as a guest downward.  We were able to add and trade it upwards knowing full well we are not going to throw a 2-3% move in a day without some repositioning if the tide turned.  We've kept our starter. We are not about to get foolish, it's a scratch and claw market for profits at this time.

SNCR,  we bought a little of this one intraday thinking it has held reasonably well during the last little while.   Of course, like 99% of the stocks out there, this stock too can not escape general market pessimism when the whole market poops.   We are watching this one closely and if there's any sign of weakness we'd be bailing fast.  Again, we are concentrating on stocks that have held up well and that are near highs following the corrective activity.  You know the steadiness of a ABM compared to the volatile nature of SNCR as both have been on DJIM for months. Knowing this allows you see to see how much risk you can put out.  Think before you act and make sure what you are buying is suitable to your style/risk at this point.

BZP,  hopefully this is one of those 1% stocks that does not get tied to the general market pessimism.    This one came out with news that they had some positive drill results that exceeded management's expectation.   Very refreshing to DJIM land we think.    Hopefully this is the news that gets it up on institutions' radar so it can gain some exposure down the road.    Again, this is not a typical DJIM play so we'll have to assess it on a daily basis, but it is cheap with a story that might make the rounds.

Other than a couple of slow trades here and there, there's really not much going on out there.

To chase a little or not?...

Just as the stress seems to have abated to a certain degree, we are faced with trading going into a weekend.  If the markets takes comfort today in the international markets and uses it as a catalyst to gap at the open, we wonder if taking solace in the rebound action carries over to holding into a weekend.  Somehow, we think the investor/trader would rather get back in the cautious tent, put away the bargain hunting for a day and just wait for the signals from trading overseas come Monday morning to proceed.  Yes, it felt better today but we prefer to lose sight of this and just head into the weekend with a cautious stance before everyone else.   Hey, if we're wrong today, it doesn't mean we won't be kicking and screaming in if the market shows strength tomorrow. This was part of the thinking today and not getting overzealous in finding stocks off the gap that we would want to hold into the weekend.  The gaps are great on the heels of a foreign market if you bought the day(s) before, but to chase them is not so fruitful as the days have been met with late day sell offs.  Today was different,  well actually it was not as the sell off started at 2pm instead of after 3pm when the subprime mumbo hit the market.  These market opens are great if you want to dish out for 1000k shares of a HMIN type and make a quick grand+, somehow we don't think many of us are using this leverage but many smartly are as they sell off to others that chase these opens.  Today just proved how sensitive the market is to any headline as we regurgitated more of this subprime news that has been burdening the market.   Simply, it puts into perspective that even though some might be thinking we have bottomed, they will still run at first sight of any negativity.  Most are thinking what ma and pa would do and not what they want to do themselves.  Everyone is thinking what their fellow trader will do and right now it seems one doesn't have much confidence in the other to hold into a potential change in tide.  Yep, we're guilty!.  We have been bunkered 8,9 days and we won't miss something beautiful by jumping the gun, especially heading into a weekend....The commodities are showing they are game and financial are participating which has been a good sign.  Besides doing some of the fashionable day trading here and there, we continue to be selective in what we put up.... 

KBW , we mentioned as a follow up Tuesday night to the banks has moved from $34 to a touch of $37 today.

NVTL , had climbed 5% to a high until taken down with the market. We said because we expected fewer plays, we'd taking bigger positions than usual if we had something showing movement upward.  To work this strategy which includes adding on a sign of a move to a starter, we also said we expected to sell sooner..meaning a change of tide and we would bail most of our position.  We did this with ABM yesterday and today with NVTL. We are not giving up profits in this market and there is no such thing (not that we have such) and that is a stop loss.  We sold a sizeable amount on the 2pm swoon but think this will play todays highs soon again.  In some respects it easier to trade now as you are concentrating on fewer positions and can see a move begin to materialize and therefore add or subtract in a more timely manner. 

Today, we picked up FSLR again. It closed in NCH territory and is one of the few stocks that has regained all that it lost this past week.

DJIM #11 2007

You can't tell traders, investors,  'March Madness' is about to tip off.....it's been center court since February 27th and there is no Cinderella story emerging.   Actually, she went to a 'Rally ball'  last week with a tall checklist but all she had was change it seems.  She wasn't the only one.  Simply,  you can summarize last week as a week of high expectations for bargain hunting without a lot of buying.  By Friday volume had dried up, there is simply too much apprehension in the players even after 3-4 days of a reversal. Three days of a rally mustering up barely 1% of a gain in the indexes is little to get excited up.   As we've been saying this bleeding might need time to stop, right now the traders are looking under the band aid for reassurance the cut has healed.  Simply they are re-bandaging all over again just to be sure it doesn't bleed again with an unexpected news blurb.  Somehow the trust has to come back,  maybe we will just consolidate till earning season blooms again.   Hey, it's only a few weeks away till April kicks in, yet we are still finishing of the first Quarter of  '07 with micro/small caps reporting that are giving some play (JSDA #99 IBD).   If there is anything to look forward to, it is a fresh Q of potential plays to feed on.  Considering this is what DJIM is centered around...we've got more hope and can live through this corrective activity more than others playing a different niche.  Oh yeah and one thing is if you don't follow our, "No holding into earnings" stance..maybe you should at least follow it now until this correction subsides. The guillotine is sharper than usual in this sort of market as seen by the PSPT,GMKT beheadings last week....... Be cool, be selective is the daily memo here.  The momo trader needs something, even if they are in rehab at the moment.  One play that seems to be gaining traction again is the Solar play, actually this slowly should become a longer term play as this area is not going to go away.  Sooner than later owning one of these and putting it away under a pillow might be the best strategy.   We are playing both again and have written about them in detail as to their differences.  TSL closed much better than FSLR on Friday but FSLR still had some higher price buying AH's.  Right now, it's a game of jumping tracks as one or the other is providing opp's for a nice gain and we are doing the same a lot of the time.

SNCR, finished well Friday and is one of the few we had selected earlier last week. A timely move just after mentioned in the forum of setting up nicely showed promise at the close.

Early in the week on the Journal we pointed out HDNG KBW UEIC HURC as ones we are looking at first at that moment for a trade. This still holds into next week as one or two moved nicely ( KBW 34-38 ) and most are holding up well or setting up for a move up in a good market follow through day.  With oil stabilizing over $60 recently, BTJ is definitely one that looked best late last week and should be closely followed or traded.  SYNL had a nice week and CYNO is the IBD in America profile this weekend.   As far as JSDA, we'll see..we're not very patriotic it seems..lol.  Comparisons to HANS is like comparing Footballs across the border...the NFL to the CFL..not even on the actual product or earning, but the ability for JSDA to ever trade anything close to how HANS did.  These are the stocks we will continue to closely follow and possibly trade on Monday.  Of course... a wake up call from overseas mkts will play a role on which side of the bed we wake up on tomorrow.

OEH, our lodging lux play before the meltdown made NCH Friday as merger, speculation activity is foaming again in the sec.

Churning..

and possibly more churning ahead of us!    Despite the fact we are green today, we are very much in a churning mode.    As far as the overall picture is concerned, this is considered healthy.     We churn churn until we see a clear break out or break down of the major indices.    If we break out, we would know exactly where the resistance is but if we break down, it's hard to gauge the exact support line.   Of course, you can always argue that last July's low may be the area but we feel that low may be too low for the current market environment.  All this market gibberish does not mean there were not a load of tradable opportunities from this weekends DJIM#11 and that is all we care about end of day!.

So what's happening with the market these days?   We think many Briefing.com chasers have the answer and we are sure they are having a blast taking advantage of some of the headlines there over the past 2 weeks.  We have said its a traders market the past 10 trading days, it's a scalpers market and this all most use the service for.   Does that mean we all have to switch our strategy now to a day trader mentality and chase the headlines one at a time?   Of course, we were all going a little brain dead sitting in a lot of cash, but it does not mean you switch your strategy and start going for the headlines just because you are a little bored.  If you're not at work...Have an early drink and then a nap but don't switch your style!.    DJIMstocks.com is not for scalpers, headline chasers.  Scalping, flipping headlines is not for the majority of subscribers here and this type of trading is not for us.    For us, we just can't see ourselves going through that transformation and there were many lessons learned from the past that we have to stick to what we are good at, more so now than ever.     Besides, there's really no art or longevity to trading briefing type of plays unless you have no trading life or life and can address and listen to 300 "peeps" alerts all day..then read and then be ready to jump in and out.   We prefer to use our own imagination and our own opinions.  It helps as any news wire, but it's not something we need or would ever live by to trade.  Also,  it's two of us against 300 of them in an office and we still get out enough winners to live off before they get to profiling them.  That has been shown way too many times over the past few years.  Anyways...We gave a weekend hit list for Monday as to what we'll be looking to trade.  You didn't need a Briefing for these moves, all you needed was a "lead' from DJIM;).. FSLR+11.2%  TSL+9.2%  CYNO +8.45% BTJ +7.5% JSDA+9% or give a "one damn eye " on AFAM when it had traded 100 shares premarket at 20.90 and then later to a high of $23.90.   Nobody is expected and we don't expect to catch all these moves, but if you had a small hit list as given last night... you should have had a stellar day just by going after one or two.   What we are giving is what we are looking at, if you don't want to look at it and give it some attention when its behaving well..meaning it's green and getting interest....well then you're missing the point of DJIMstocks.  You should not be looking for other opportunities if these are in front of you already and working.  We become oblivious to other names when the going is this good.  All efforts and capital are with what is working!!!.  No time for laggards!!!  No time to look for other plays.     OK...   We weren't fans of JSDA and said last night we'll see...well we saw very good interest and traded it but still are not waving the Maple Leaf flag.  Still fresh on our minds as per Journal and IBD listing and therefore this should've been on top of your trading list as well for the day. End of day we are empty of it, but will play it again. No flag burning, we will just wait to see if it has more in its tank. 

So how do we approach this market then?    We are still finding some of those earning plays that we've been covering for a while and singling them out as our trading candidates.   Here are some more...

BTJ, could it be that ppl are discovering this stock for the first time and trading it like a momo or could it just all be IBD fever?    We think it may be a little of both and we are definitely leaning more toward that IBD thesis and as pointed out last night the steadiness of Oil over $60 recently..helps!.   Yes, it's ranked as #1 IBD100 over the weekend and the reaction today is very good, especially given the fact how much it has climbed last week.    At this point, we have to caution that being IBD #1, this stocks's fundamental may be thrown out the window and momentum/trading will be taking the dominant force behind the action.   Watch the action more and don't ever let your feeling of "how much the stock should be worth" get in the way of making proper entry/exit point as the stock behaves along.

FSLR TSL, this pair has definitely been our favourite solar plays, or rather, the only solar plays we trade during the last few days.    Again, we'd favour FSLR slightly more here as TSL is more prone to "gap downs" off weakness in Asia.    Also, we are pointing out that these two are mainly eps driven, and this is the reason why these two have the biggest momentum among the solar space.    See, the action still comes down to earning.     So are we going to play any other solar laggards?   At this point, we aren't even considering touching any other solar plays b/c in the world of stock market, only the best get rewarded.   In other words, there's no second or third place when it comes to naming a best play.     We have been trading these ones aggressively on the long side but we have been doing it with smaller sizes than we would normally do in a favourable market condition.    

EML, this little one made a new closing high but we aren't willing to give it a hard chase b/c of the volume and still just hold a part of position from earning time.  The point of pointing this one out is that odds are always on your side when you are stuck with an "eps story" as oppose to other kind of plays. Just look how far SYNL, EML have come since being DJIM insertions last Q. If you want to tuck a stock in a drawer these thinsters with earnings provide a safe play early on.  AFAM and EML are very similar, except AFAM has a history of holding its big gains better.  AFAM made a revenue high of 26.32mln and reported a high EPS Q of 26c vs. 16 YOY.  We held a small piece through to close after taking advantage in some of the 3 pt move intraday.  Simply, we don't want DJIM filled with these plays at this time, it does not mean you can't put it in a drawer.  It just should not be the focus of so many members as EML started to become at one point early on.

Dealing with the inevitable...

or dealing with the ugly.... whatever you want to call it, it is here and right in our faces.    Perhaps,  we had a very tiny bit of hope that we would not be visiting the low and get another leg down this soon.   Wishful thinking?    From the look of it today, yes it's wishful thinking that we'd be all hunky doray after the big selloff couple of weeks ago.   So, it's a good thing we had a game plan and we had enough cautiousness to not let ourselves get surprised.     Will today's action lead to further downside?   From a technical point of view, you betcha!    However, market timing is never as easily predictable as many claim it can be.    Even though we all think that it should test the low again now and head even lower, there's still a possibility that it may not turn out to be the way we expect.

The bottom line is that we have to deal with this situation and stick with a strategy that has the highest probability of surviving this potential downturn.   Our plan is simple and we go cash.    We don't believe in hedge b/c if there isn't anything that needed to be hedged, why even go into the trouble of doing so?   Let the billion dollar manager do their thing and talk their beautifull hedgin strategy on CNBC.... where as we, the common retail trader, will humbly stand on the side and watch the fireworks.

How about the flipping strategy and day trading strategy or Briefing headline trades?   At this point, we think it's totally not worth our time or energy to pursue day trading opportunity when the market is at a major turning point.    To be honest, most of the stocks (small caps wise) on our watchlist do not allow us to short them freely, even if we wanted to.    Due to the lack of liquidity or simply lack of coverage, many of these stocks are deemed as unshortable in our book.

What should we do now?  Well..nothing really different than what we've been saying since the Asian surprise.  We wait wait and wait and keep an eye on the 52 week high list.    There will always be some stocks that will stand out from even the worst kind of market and that's where we'll keep watch.   Hopefully, we'd find some decent sized stocks with enough liquidity to keep us traders through this game.    Basically, we're going to trade more of the safe and conservative kind and lean heavily on the cash side.    This, of course, does not exclude the occasional and obvious hot story stocks that may provide us with a nice intraday swing or two.     We'll just have to be very selective about that and be precise with our trades.  Today was much easier to deal with and accept,  this is because we stuck again to the stay cool..be selective...with smaller lots in your possesion.  Hopefully you were prepared as well. 

Can't wait to see the overseas markets reaction in the morning.  Let's see..they follow us to the downside...then we gap to the downside?.   The past few weeks we followed them.....This merry -go- round is out of sync.  Each dog sniffing the others...Only good thing to possibly come out of this....is a helluva of a short term rally that could happen if the recent lows are broken and then we break them to the upside quickly!. 

Tricky Environment

Maybe we should have a huge sigh of relief over today's results or better yet, a drink or two!   Overseas markets were rocked by 'our' yesterday's mkt,  so expecting a retest of the recent low was just about what everyone expected.   What everyone expected came as expected but we bet not many expected such a wimpy test of the low and the almost immediate recovery.   In conclusion last night, we mentioned a break of the recent low support and then a break of what should become resistance to the upside quickly as a possibility.  Well, it happened and we could get continuation but this definitely puts this market in a trickery position as this happened a little too fast and easy.   If you believe that we've just hit the bottom then further churning would make this thesis very healthy.   If you believe that there's way more downside to come, then today's action may be nothing more than a wishful blip until the real selling starts.

Either way, we don't take a stand and we take the action one day at a time.   One thing is for sure though, we keep mostly cash and only trade with small sizes and trade those names that are currently in favour and in play.  Of course, if momentum comes we add and trade some parts intraday making sure we are not over extended overnight.   This may sound too corny to many of you b/c we have been saying this just about everyday but unfortunately we have to show how serious we are when it comes to how we approach this market.

Here are some stocks we've been trading today....there were a few nice opp's out there.

ASTI, perhaps we should've alerted this a little earlier and the reason why we didn't is that the index was getting hammered earlier and we weren't sure if any plays could've been dragged lower by the potential panicky market action.   When the index turned around, we knew we want to get out hands on this one as we thought the news the co. released was some very positive stuff.  Still a possible opening entry was available between 7.50 to 7.90's after we threw it out for some time.  We think this may legitimize this co. as a solid player in the solar space.   The float is tiny and momentum was strong.  

AFAM had a beauty of a day with a close over $25 and now is 4+ points since Mondays note on it premarket off earnings.

TSL, no one is a stranger to this stock, we chased some near the end looking for some follow through tomorrow.    Keep in mind, as long as this one is above its 9 ema and near 52 week high, this one would always be in play off a strong index move.

BTJ, maybe we shouldn't call this an oil stock anymore.   This looks as if it has IBD trading all over it.   Yes it's currently ranked as #1 IBD100 and yes emotion is high with this one.   Throw out the fundamental and pure action takes over when it comes to BTJ.   We'd be following its action closely to gauge its momentum.  It works both ways never forget.

The most entertaining was the mother of all squeezes in LEND that was just beginning when we noted it in the forum in the low 5's.  Even if you didn't trade it and only watched, you probably still got a rush out of it racing to 6.60's.  Anyways, it was a good reminder of why we love this gig! ..Cussin' for all the right reasons in amazement instead of yesterdays type of cussin' at the market.  We'll keep this close by for another intraday trade after getting to know its potential.

What Bracket?

Seems the East, Midwest, West and South brackets are more important than the Trading bracket game to many today...or did we just need a breather and some caution before tomorrows CPI?.....or maybe too many were hypnotized by the Level 2 trading on LEND..lol.  Man, we're turning that damn thing off..promise!..another day of that and we'll need medication to get over the spins besides a stint at rehab.  That was definitely the 'play' the last two days doubling since yesterdays mention.  Either way there was some follow through on the indices and many DJIM small caps performed well and that is what we are taking into Friday.

ASTI, it really had no chance today for more gains as the Solar plays FSLR, TSL fell out of bed at the open and never got up. If ASTI starts to act like the others it will be a good sign of recognition in the space and we wouldn't mind that all.  The ups or the downs, as long as it is bunched in with the familiar names.  Sooner than later the market cap comparisons to those bigger names will get this noticed even more.  Considering the day it had yesterday, todays dead solar dead day and being down this much is nothing to a low float stock.  Another thing is to not forget the price of the deal.  It was big 23% of shares and with a big name (NHY),but it was $5.77.  This deal, this stock needs to digest the gains over the placement price.  Give it time, the smart ones will probably be accumulating this over next little while on any dips. Also... a morning note today from Lazard had some nice price targets on the solar stocks, one of which was a $65 target on FSLR.

By the open tomorrow after the CPI is released, we will know what to do with these names.  If we can look forward to any buying before the weekend it is on these familiar DJIM stocks, HDNG UEIC CYNO BTJ and AFAM.  Oh yeah, blast from recent past CCF is almost there too, but we'd prefer to be trading something more liquid now.   All these EPS stocks are looking pretty good as they are at highs (HDNG AFAM) or looking for a sign to get at one.  At this point we have small pieces of each and will look to add on those showing momentum...if momentum shows its pretty face.

We are working with our host Squarespace scanning DJIM postings to see why a small percentage of you are not getting 100% of the posts. Thank you for co-op and please let us know by email if this is still occurring as we go along.

DJIM #12 2007

For the week, the indices consolidated and despite a reversal Friday there were a few new plays emerging. 'But'..considering we still don't have any indication of where the market will blow, the same strategy holds going into the trading week as we've discussed numerous times.  What you like to do is to hold stocks that are strong when the market turns like it did Friday.  We made a few buys Friday and for the most part they continued strong into the close.

DXPE, might have made it over the hump with its earning.  We've been following DXPE since its first earning surprise below $10 and it kind of feels like it might become a tradable play once again after a long stay in the house of boredom.  Reported .68 vs. 43c/ Rev 79mln vs. 55mln.  What we like is the sequential growth!.   After a couple of flat sequential Q's, this one proved DXPE has some growth left in its tank and that's what you want if you hope momo traders will start looking at it again.  Anyways, it's good to see there might be another play besides BTJ in this sector that fits into DJIM's mold.

HNSN was a nice quick pickup for those buying, not shorting in the $19's for a quick and furious run to over $21 mid day. This is a medical device player that we've traded before and it seems to be picking up some noise again.  This was a perfect example of a stock wanting new highs.  The nice open and then the pullback where you can load up as it starts to move back up.  That's what we did adding to the starter position and blowing past the initial highs.  Patience.  We've kept some but are not wasting 10% trades without taking them profits on the trading position we acquired during the move.  Oh yeah...Seems Cramer thinks its the next ISRG..lol

GLDN , we noted Thursday night to keep it up there on your trading list despite a cool first day on earnings.  It pulled off a 5+% move, one of the best on the day and now sits over 9ema.  What impressed us was the volume, end of day it had volume it had not seen since being a DJIM pick up in the $30'S.  We'll see if this means more upside soon enough.

AFAM, our little pick up recently made a quiet debut on IBD #77.

Solar plays will be interesting to watch this week after gettin' a beatin' Friday after some broker comments.  We'd still look to FSLR, especially after IBD's profile this weekend.  Remember, we mentioned CYNO last weekend as an IBD play and the follow up big day Monday.  We think this is a little different as FSLR falls in with many names , while a CYNO was less known and not really thrown in with other names in its sector, so it could move on its own.

For other plays we are following/ or trading, see Thursdays Journal.  Most of those names including HDNG held up pretty good. Some other notables are in charts like NVTL, which just keeps ticking slowly along.

all is well....

That's what most people wanted to feel today probably.   The truth is, we are still working off the ugly damage from couple of weeks ago.    In this case, churning is good and more up days and less down days within a contained range make a good setup for future rally down the road.   Meanwhile, when the index is churning away, we ought to be catching some opportunities and keeping an alerted stance at the same time.    Today.. definitely feels like one of those relaxed days and we welcome that change of pace.   Some stocks we are following...

DXPE,  yes it made it back onto the IBD100 list and this one has had a history of being on and off the infamous list.    Is this a big deal anymore?   We think it's not nearly as big of a deal as it once was couple of years ago.   In fact, the IBD play has toned down so much over the time that we find alot of better plays that aren't IBD associated these days.    The float is one thing that keeps DXPE interesting and as long as there's interest in this one, we are willing to stay in and trade it on the long side, aggressively.

HDNG, why this one still isn't on the IBD100 list while some other "crap" got on is still a mystery to us.    Well, IBD or not, the action still looks very healthy and it notched another high today.

FSLR TSL ASTI, a firm had negative comments on the sector premarket and therefore these names under performed the market.  ASTI has its own issues to get over, the private placement price.  FSLR got a lift from the IBD article and it feels like a less volatile bet at this moment.    We are keeping our eyes closely on these and will re-enter when they gain some momentum to the upside again.

CYNO/ JSDA, both stocks gapped at the open off the positive market and held the gap till the close. We sold off some of the CYNO move, the JSDA we weren't holding.  We'll keep an eye on both for another try.

VIP/ ROS,  it seems that some stocks just won't go away and these pair notched a new closing high today off pretty good volumes.    Yes these are foreign stocks that can be volatile at times.    However, when the momentum clearly shows one direction, this type of move can be very rewarding as well.  If you didn't get in or trade them today, we'd pay attention to the charts as these Russian telcos made not the prettiest of candles giving up quite a bit off the top.  This included MBT, to a lesser degree GLDN.  Be patient for indication this move is real now.

Overall, we feel that market is doing a pretty good job of working out of its corrective phase.   At this point, nobody can say for sure how long this corrective phase will last.    One thing is for sure though is that there's still tons of cash on the sideline and ppl won't hesitate twice to jump into a hot sector, story stock, or a general market rally.    We'll just have to make sure that we get in at the right time to get our money's worth.

waiting for catalyst perhaps?

It seems slowly, if not surely, that people are beginning to forget about the dreadful one day decline we had a couple of weeks ago.  Others are spreading fear that we are in for a rude awakening. We just go with the flow.  We can't predict the market's direction by reading into people's mind, but we can definitely gauge people's mood by reading their action.   Market has again firmed up today without a hint of slowdown anytime soon.   Oracle's earning is apparently good tonight and the fed policy statement is also going to be released tomorrow.   However, what will be the catalyst for this market to get a volume move is still something we are wondering about.   Maybe it'll be a combination of things that'll get things going.     For now, we are simply playing one opportunity at a time and pick only the obvious plays and staying away from those rebound plays. We haven't put up many plays lately, but being selective has produced some nice days in stocks like DXPE,GLDN, HNSN.  When one runs out of gas... get filled up with the next until it's ready again or at least reduce in size to hold through.

ASTI, the reason why we are writing this one first is that we felt many readers may not be up to par on the 1234 setup mentioned on this forum.  Basically, a 1234 setup works if the stcok closes above previous day's range on its fourth day.   We had an attempt earlier but as everyone can see, the setup failed near the end.   The lesson learned here is that it's imperative not to jump into the conclusion of a potential breakout unless it's confirmed.    The confirmation either comes with volume and a break of the resistance and hold through the end of the day.   We noted earlier that we are looking for a break of $8.65 (this was our confirmation to go hard in size soon after) on volume to consider a good signal and guess what?  The day high was $8.62!   Unless flipping for 30 cents or so is your game then staying disciplined is a priority if you are new to the trading small floaters.    Trading aside though, we still think this one is a good play for a solar stock.    The overall solar sector is still in some of a funk right now that none of the other two DJIM big boys can seem to get any steam going, not yet anyway.   We'll just have to be patient and watch and wait for opportunities. 

HURC,  we have been noting this one as one to keep on top of your trading list. Today we got a good close that we've been waiting for to add to. This one in our opinion is ready to start a new leg.

HNSN, it's in play and believe us, it's not just retail traders like us that are putting this one in play.   Momentum is pretty high with this one and we like this sort of breakout that started the other day.

SIMO, this one came out with earning premarket and raised Q guidance ( a sequential declince of 3-7% instead of the previous 15-20% in revenue) and it climbed steadily higher throughout the day.   For some reason, we are actually pretty comfortable trading some selective tech stocks.   This one is also no stranger to trading community and it'd be interesting to see where it goes from here.   We bot a small position today and will watch for signs to add.  SIMO is IBD#6 (98EPS,97RS)

NVTL, this was an alert on the 13.70's and we said it was a steady bugger that survived the meltown. Seemingly nothing has changed as it creeps along. TWeisel came out with some positive comments on the momentum their business is having.

DXPE, a slight pullback is expected and hopefully you all locked in some gains today.   We'd be watching this one closely for a reversal at some point and given the small float, the reversal can come at literally anytime.   If playing conservatively, we'd be looking for the recent high as the breakout point for a chase.

What's next?

The indices poked their neck out today and broke out of their trading range from the last little while.    As we were saying yesterday, market was looking for a catalyst and today we got one.    Does that mean that we are ready to challenge the old high next week?   Ah ha, if market is predictable like that, then we all should be running multi billion dollar hedge funds.    The truth is that we just had a good old relief rally today and what comes afterward is usually trickier than what most people would expect.    One good thing about the reaction of the fed decision today is that we are that much farther away from the recent low.   Today can be used as a good indication that we've just had our bottom for this correction.   The sub-prime issues are being sorted out and worked out slowly and many institutions now have a realistic expectation of what to expect from some of the firms involved in the sub-prime lending.    This is good news!   Uncertainty tend to raise fear and certainty raises optimism.     Seasonally, we are ready to kick off another earning season.     What?   It seemed like we've just finished our last earning season.    Yup, this gig is literally all year around and right now we are back to focus on finding earnings plays that fit into our criteria and trading theme.      In a way, we are kind of glad that the big drop happened before the earning season. Does anyone else feel like "we just got rid of a monkey off our back"?   In plain words, now that we just had a correction, bears can all suck up and go away.   Hopefully this is the case but we do need confirmation from market action during the next little while.     The best case scenario for this market is to inch up slowly and digest any big market gains like today with time.    The absolute last thing we need is for this market to go up in a few straight days and then to get smack down hard which will for sure shatter investors' confidence.

Now onto our small cap land....  When the market is in a good mood generally, the small caps always tend to get busier and see an influx of funds.  Here are some of the stocks we are noticing today...

CSV,  we have to crown this one tonight as it joined the 25%+ gainer club today.   This one is such a sleeper that despite the fact it doesn't generate any buzz among the momentum traders, but it generated 25% during the last month or so.   And do we even have to remind people that last few weeks hasn't been the most friendly to many investors. The same goes for HTC, the Euro Telecom which has produced 25% too. The reason we bring these up tonight is after today, it is time to look around at past DJIM stocks and see which survived through the turmoil best.  It is probably best to start doing some homework and expanding your tradable watchlists.   Another reason is just a reminder that despite the volatile stocks we mostly cover there are plenty of quality crawlers that work for the longer term investor.  Last Q, we had EML, SYNL, AMIE's and this Q the CSV and HTC have already stood out.

HURC HDNG,  yes keep on going and make those new highs.    Market really owes those two as the market environment was not friendly when these two came out with stellar earning report. UEIC falls into this boat as well.

FSLR TSL, we wish these two had done a little better prior to today.   Nevertheless, whatever it takes to kick-start the momentum is fine by us.

SIMO SNCR UEIC,  had new closing highs and we are definitely gonna look more on the tech side of the plays as the earning seson goes on.  SNCR was probably towed by AAPL today.

AMAG, we used to trade this back in early 06' with great success under a different symbol, it's a streaky stock and if you get on the right side..at the right time this one can be quite the winner. It's in late-stage development for iron deficiency related anemia in chronic kidney disease and that is the speculation part.  We started very small and will see if the small float and big short interest can dance with the Deutsche Bank $100 target put on it today. Wait for confirmation of a turn here before taking on a play like this or just start very small and make sure you have many more plays before it.

Folks, market definitely seems to turn for the better last couple of days and especially today.   With the earning season coming up, we feel like we should get right back into it 100% and pick up where we left off.   This doesn't mean that we are gonna be committing all of our capital.  It just means that we are gonna be committing 100% of our time and focus in finding trading opportunities for the next little while.    Hopefully we'd get some really nice plays that'll make up for some of the lost time that we incurred from earlier this month.  Just remember, we might need to curb our enthusiasm as traders soon after a day like this and that simply means taking some profits before kicking it up again.

Tanned....

and not the crispy burned type......Damn....it was hot in here!.  It doesn't take more than a 60 watt bulb to tan these Toronto boyz but nothing gets them hotter than a few of their Solar plays movin' and grovin'.   Rumor has it the market took the day off as many had expected following yesterdays blow out afternoon.   Well,  we didn't notice as this was one those 'oblivious' to the market indices days as our closely followed had a helluva day.  DJIM's gig is to get you following what we trade,  the tedious research can wait till we throw out a new stock to consider ...we'll find what you can trade over and over again and as noted last night some you can store away as well.    Recently, we said it might be wise to put some shares of solar plays away in a shoe box and not worry about trading them in and out as this story is not leaving us for a while....Today..was a perfect example of the potential in these names.  Solar stuff is nothing new as we've traded the WFR SPWR'sin 06, but we like the FSLR, ASTI, TSL to concentrate on in 07'!.   For the average investor or trader to be,  there is no extra plays you need.   We're full time and it's plenty for us.   Until a secondary play catches the same fever as our current plays..we won't go there!.  We welcome the next FSLR...when it comes!...

ASTI...wow are members are the greedy bunch...lol.  We 're not going to push it to $10, we were just below $8 yesterday.  We said when to expect 'us' to come in the last few days.  The script was written and we kept in touch all the way through.  Still...more than one opportunity existed today!.  We've talked about the day if ASTI catches the solar fever and gets bunched in with our other names.  We wanted that!.   If you begin to think like us, the early action in TSL and FSLR should have made you think it might spill to ASTI or at least hope for such and therefore been watching closely.   If you consider our mentions of a potential powerful  'flag' move that ASTI was creating yesterday.  Whats a flag?.  In laymen terms, it's a pennant of sorts in some circles....one look at the chart and the tight range (spread hi-low) yesterday was a move in the making and today there was a catalyst to use to solar it up...the TSL and FSLR to set the bugger off.    So there was two trades in ASTI today.  One was the piggyback ride of the solars to the first leg to the $8.70-80's and the second which we spoke of the last few days.    We had numerous emails, "is the love" and we responded on the forum that you will feel and see it.  The volume was a measly 700k at this point.  The love did come and ASTI added 2 million more shares to the volume end of day and a high of $9.70 was hit on the move we were looking for.   Maybe after 17% on the day gain, we should not concern ourselves about the close.  Sure, we would have liked the highs to be taken out end of day, but 17% is plenty and enough to spread the ASTI name around for a little while....30 cents off the top is nada!.  Maybe we should also accept this is not a Baskin Robbins stock, as in flavor of the day, small float momo stock to run EFUT, FFHL style and accept this is a longer term investment like Norsk (NHY) thinks it is by picking up all those shares.

FSLR, what can we say? ...our fave ain't going to the doghouse after a NCH.  TSL, a top 3 solar here..still has some catching up to do but definitely played its part today.   When we started DJIM, we talked about catching points and watching them add up....parts of 3 points on these two and the ASTI play and you should have a nice glow about you tonight!.

OEH, this has turned quietly into a pride and joy type here.  It is these stock picks that we really like to hit on the head.  Also VTRU,  a earnings and takeover play for DJIM this Q was taken out today for $48 or so.   Well, we already saw higher than todays trade in VTRU after we started covering it,  so today just nailed the trade idea for DJIM.    OEH was here first as a trade that busted out in the 40's after an alert and later it turned into a takeover play.  See Alerts in preview section.   This was confirmed a few weeks ago by Briefingcom and today it hit the press big time.  We got a little lucky buying it again yesterday........well, maybe.......when you look for strength, you sometimes get rewarded and we did today.    We buy NCH's and OEH was flying yesterday as noted in the morning forum before the market even had a chance to suck up the Bernanke.   Looks we don't need to stay at a HMIN at $16 bucks a night now!..lol.  We've kept some and traded this 6% move today and think our OEH can fetch some more room service.  Our mini bar needs re-stocking after todays DJIM stock ride.

KBW, the financials were running hard yesterday afternoon after the FED talk and if you didn't want to dish out about $200 bucks for some GS, we gave the forum an alternative DJIM play at $35.  GS exhausted today, KBW ...which was available for under $35 yesterday... closed at the days high at $37.08.  No easier play for a few shares out there.   We had a laggard as in one not many still associate with a financial play and it proved to be a good bet for a few points.

Where do we stop?;)

BTJ, our oil play..up 2 bucks-6% to a NCH.

CYNO hit 27.66 and still made a NCH,  NVTL almost to mid 15's and looks to solidify the $15's,  HDNG another NCH.  Some others had little spikes like SIMO and GLDN before giving it up, but they've had a few real nice days to follow up on.   Only real loss was a measly $1.20 in HURC. The few that were red, closed less than 1% off.   You can't argue with what our closely followed did today in a boring market day.   Last night, we said you might want to take some profits as this market digests yesterdays afternoon roll.   If you didn't today with this golden opportunity while the market lagged DJIM stocks....consider some tomorrow if profit taking Friday comes.   Still,  this weekend should provide some merger activity that has been shelved before the FED action yesterday.

We dabbled in some CRZ and to a lesser degree OYOG.  CRZ, asset management co' is one we watched before and it reported last night, Crystal River Captial reports Q4 EPS of $0.57 vs $0.07 yr ago; revs rise 69% to $59.1 mln . We like the way it traded and will look at a break over $28 to add.  OYOG is coming to high today and is involved in the oil and gas biz.  It's float is all of 4mln shares and when it comes at a price of $60-70 bucks, you can expect some big spreads.  We'll see if it continues to new highs before adding to a very small piece we hold now.