The Day that Was - July 11th 2007

Today the market was able to recover some of its big drop from yesterday. Yesterday the big driving force that made the already nervous market take a dive was that ugly word popped up again. That word is "sub prime". Any time the market hears that word there is a fear that runs all the way down the spine of the markets. Personally I feel the sub prime issue is still looming over the economy and it will manifest itself into other areas over time. We are not done hearing about sub prime woes.

Today the market was helped by the M/A news of Chaparral Steel being purchased by Gerdau Ameristeel Corp. That boosted the metals sector today. And the rebeltrader portfolio holding A K Steel Holding Corp (AKS) got a boost from that today as well closing up 1.78%.

Portfolio holding Grant Prideco Inc. (GRP), an oil services sector play remains in play. I am still bullish on GRP. Yesterday Motley Fool mentioned that GRP is still on their 10 highest rated stocks list per their investors subscriber base of recommendations.

Yesterday I took a position in JSDA as it was advancing throughout the day after it had closed above a key support level ($17.00). The entry price was $17.85. Today JSDA sold down to $17.07 on a CEO interview that made it through the markets as being "not so hot". I watched the interview and while the CEO was not well spoken he did not say anything in my view that warranted a sell off. But one always has to remember the market does not care about the old saying "what have you done for me lately", but instead wants to hear more of what are you going to do for me tomorrow. The CEO addressed that by the end of the year they would be introducing some sort of new product. For me it does not matter what the CEO says or not. I'm playing the chart. And for now $17.00 is still a support line that if there is going to be a leg up it has to start from somewhere. And $17.00 is that starting point. Every swing trade has to have a plan. You can not just buy something you hear about or see flash by on a ticker window showing a big gain. You have think like a tiger, stalking your prey. A tiger waits for the right moment to attack. JSDA was a stock that ran from $14 to as high as $19 in the span of 3 days. It was a moving target in the middle of a freeway at rush hour. Trying to rush into traffic to catch it could either get you run over or when you caught it the stock could change direction and head for the off-ramp. Smart traders will wait for a setup. The setup was the formation of a base above $17.00. That we got, we made the kill on the move up out of the base (albeit a short time frame base) and we will play it by the book. If it fails the base then this stock is not ready for prime time yet.

Discipline is always the key. Never buy any stock that is being talked about in the news blindly without looking at it carefully, plan your attack, and wait for the conditions to establish and then you have your trade. Have a plan and trade the plan.

Today I entered ALGN on a very healthy advance. The volume was good and it closed up 5.23%. Today it set a new 52wk high. I did not enter the second 1/2 of my swing trade funds to this trade yet. Although it did clear the second buy point it did it at the end of the day and by only a couple cents so I will wait until tomorrow. If you had a pre programmed trade setup to grab it at the second buy point then that is fine, you may end up with a better entry than I will when I enter my second buy.

We are still in a place I don''t like being. We are still in this sideways trading range on the major indices and it's makes swing trading difficult. But perseverance I have and I will keep looking for good trading ideas. For those of you that email me asking me what are some good trades I can only tell you that I have a list of stocks in my office up on the wall that I like, but I am stalking them and looking for the setups to establish themselves. Over the weekend I will post a picture of the RebelTrader 'research department' and you will see my wall of stock plays.. LOL

I hope all my fellow Rebels had a great day and to all I wish a wonderful good night.

p.s. - Today I was contacted by Lindsay, a wonderful lady at http://www.ino.com/ asking if I would be interested in providing some guest commentaries for their site. So from time to time I will provide her with some articles that I write and she will share with me some of their content in return. Thank you Lindsay for considering my market views as worthy for your site.

Updated ONT and ALGN charts: