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Well the fact that the Nazdog has reached new 4 month highs has NOT been confirmed by the SPX and that has caused a BIG negative divergence. Before this rally a DIVERGENCE of transports and DOW theory pointed the way... this too should be taken as a direction changer.

There have been some studies of option ending weeks and wed tend to be the best day so might we have a big up and fade day tomorrow and a change of direction ahead of us? I have not checked cycle theory on this but going off my own level of grumpiness and a torrid of successful trades it feels to me like it might be time to back off a bit.

Wednesday brings data on the Consumer Price Index for April, followed by reports on capacity utilization and industrial production on Thursday. The week closes with building permits and housing starts. In my view thursday and fri offer glimpses at a rapidly slowing economy and the next leg down the double part of our double dip theory will no doubt be set off by numbers indicating a slowing ecomnomy combined with rising inflation indicating a boxed in fed. For now we coast along on these rebate checks but for how long? The market feels like it wants to look past that story and what i sense might be around the corner is (1) a big drop in oil and (2) a relatively flat line market. We will be asking ourselves shouldn't we be rallying with oil down and the talking heads will be telling us over and over that falling oil is the same as tax relief for the consumer and money will be lured into the market in that way and then the carpet yanked out.

Make no debate about it-- there's a lot of cash on the sidelines, that needs to be invested before we can really dive and it is for that reason that i sense a flatline situation arising soon. Probably at S&P 1,350 the site of the SPX's 80-day moving average. This would have as many bears trapped as bulls as violating 1400 will cause a lot of hoopla. 50 S&P points is not the end of the world but it's not a sneeze either. I'm debating selling some winning positions in tech tomorrow and into next week. If a stock you own is up 14% - 20% in two weeks and the market has just given a divergence warning.... it's perhaps pig headed to stay with too many tech stocks here.

I'm wondering if this is really pure buying we are seeing today and yesterday. Or is this the result of so much portfolio insurance unwinding the other way? In other words we keep hearing about how to sell calls in front of a winning position to hedge risk I don't do this of course but enough people do and this leads to a continual pushing ahead of stocks and likewise the unwinding of index options ahead of expiration are those selling the puts short stock futures to hedge their short put positions. I think. As expiration approaches, portfolio insurance sellers unwind their short futures positions, behavior that becomes supportive of stocks.

A lot of folks are wishing that oil would just come down can you imagine where our stock market would be if that happened... well be careful what you ask for, oil might just come down hard but that does not mean our beloved stocks will go up.

That being said folks I keep buying!!! but now I am catching falling knives! It's time to change styles and prune the hedges. Some stks not in this account but highlighted for you in watch list... SIMO was sold for 14% gain in 2 weeks or so ditto FFIV except that returned 23%, I've got MRVL on the trigger for after their earings. In this account we took a big huge gusher of a gainer in GEOI off the table and sold JRJC perhaps a tad early... CHNR exploded but we grasped and missed CRNT has completed a wonderful head and shoulders bottoming pattern and looks good. We caught CHDX today, it's seriously oversold and ditto HOLX a powerhouse earnings name on sale. And MXWL is my new little Green Dream.

We have added emphasis on DGLY in this account even ruining out cost basis to buy more.... this may make a crazy move today even I'm not sure what to do there....

If this week ends down and next week starts a correction we will have been smart to take off the table extended names... The DUG anti oil play is next but do I have the balls? ~stoney

The market looks like it's setting up for a period of flat lining. From here it will be oil vs market who will blink first.  An emergency  OPEC meting  would seem in order. Furthermore wall street will want to see if any of the relief checks make it into the general economy or will they all get sucked up by gas and food? Tech stocks can shine here as investors look for guaranteed growth but asking for oil to turn over is a double edged sword... the energy stocks will pressure the overall market and there are no longer enough strong sub sectors to keep us afloat. Setting up for a June Swoon? Most likely.

CRNT is the purchase today it culminates a frustrating run I've had with the WIFI plays. I had a limit order in on this the day before it took off and now I'm buying a retrace. Never fun. Sometimes you just have to go market. This will be a big 2nd half story as they are a supplier into the WIFI excitement of late... I totally blew a huge gain in CLWR and settled for a small one got greedy. I'll remove it from the watch list. I sold Cadiz who cares let em bake in the sun bastards. I'm eyeballing a high yield play ALSK and have asked for some more pro guidance on the name. AMAG interests me and small stk VSCI... Off to Ct. The account looks pretty good we have moved into some oil plays and I encourage you all to follow.

BUY NOG NOW1!!!!!~!!!!!

and GEOI the day before yesterday when I did! ~ stoney

Wow what a report. It always is weird when you have an unknown stock with no analyst coverage... who is going to shout to the moon these earnings! I AM!!!!

Digital Ally reports Q1 revs up 150% -- Co reports Q1 (Mar) EPS of $0.10 vs $0.01 a year ago. Revenue rose 150% yr/yr to $8.6 mln. There are no analyst estimates. Co says "We continue to see follow-on orders with larger quantities from many existing customers, while converting a high percentage of opportunities with new customers to our product. Our DVM-500 In-Car Video Rearview Mirror System has achieved increasing acceptance among law enforcement agencies throughout the US and within a growing number of foreign countries."...

Yes that's 10 cents vs 1.... that's what we call GGGGGRRRRROOOOWWWWTTTHHHHH!

~stoney

Folks remember to Watch My Watch List for the watched stocks are all additions I have made to my large account. As you can see we are doing quite well. 

Today we buy MNTA.

Yup I'm backing up the old station wagon and loading up the MNTA today. There is PR release today getting NO LOVE THAT IS HUGE FOR THIS CO..... Read it, I'll post it in a bit... Not only that they were upgraded by Rodmin & Renshaw yesterday; not only that NotableCalls had a piece out this week on the name that I put in my Where We're At thread-

Morgan Stanley is upgrading Momenta Pharma (NASDAQ:MNTA) to Overweight-V and increasing their target to $22. Firm believes the stars could be finally aligning for the FDA approval of MNTA/NVS’s M-Enox in 2008-09 as the only genericversion of SNY’s Lovenox (blood thinner), potentially leading to: 1) 40-50% share of the $1.5+ billion U.S. Lovenox market, 2) peak potential earnings of $3/sh and 3) a share price of $40+. The downside risk of a long delay or non-approval is that the stock returns to $6.

Why are they upgrading now? Firm believes that the heparin (a complex sugar) contamination crisis may have given MNTA the unique opportunity to prove to the FDA its proprietary technology for characterizing complex sugars. Last week’s Nature publication shows that MNTA worked with the FDA to identify the heparin contaminant. They view this work as a game changer, underestimated by the Street. In our opinion, the FDA is now more likely to view MNTA’s technology as sufficient to show that M-Enox is the same as Lovenox (also a complex sugar) — a key regulatory hurdle and one they feel competitors Teva and Amphastar cannot achieve.

Notablecalls: This is a game-changing upgrade for this stock. Morgan Stanley has been neg on MNTA for quite some time (UW rating) and now they are saying the stock could do $35+ under bullish scenario.

The NC crew missed the fact that a news release further down shows MNTA announcing a presentation at.... of course Morgan. It's always hard to figure out the order of these things is the presentation set and then as luck would have it herceptin gets tainted or does the Co have a story to tell now... the fact that the co worked with the FDA in the emergency lends major creed to their case in my view. Perhaps sometime between today and the presentation Wed this could be bought for a nice hold. Big price target.

Ok Folks today we have new FDA news going into a speech today and a stk not reacting @$15.... opportunities like this is why I keep my nose to the grindstone every day. I bought this name lightly yesterday in anticipation of the analyst meeting at Morgan as well now we have an upgrade this news and another presentation on May FIVE..... This has some BIG possibilities a large super drug to be sure and a co that now seems to be on the same page with the FDA... this is a 1 year DOUBLE. Stoney PT. ~ $30.

The heck are all my followers. I'm hitting a lot triples here kids in case anyone is watching. I'm going to put SIMO in my watch list which is my way of telling you all I just bought it in a larger account. I'm frozen now in this account that Titan wheel is sucking up funds that I would rather place on DGLY Digital Angel now... it's a bit of a stand off between me and my account now... everything else seems properly placed....~stoney

Well folks are we about to blast off or not?

That seems to be the question.
The SPX closed marginally above its January-April trading range on Friday on below-average volume.The SPX continues to flirt with both horizontal resistance and with the upper limit of a developing "bearish ascending wedge." If 1400 and the upper limit of the wedge aren't broken soon, then a test of the lower limit of the wedge would appear imminent, now near 1375.

The NDX has broken horizontal resistance, up and out of its Jan-April trading range. The index is flirting with the upper limit of its rising trend zone, so a pullback to test the lower regions of the zone would by no means be a surprise. The other alternative would be a parabolic upside move, up and out of the zone. Given the light volume on the breakout, this would seem less likely but with buyouts like this morning helping and checks in the mail we may have hit our upwards air pocket here for a quick sprint. Fingers crossed.

On the buy front today is a hard day. VM Ware is up $2 and if you go to check it's fundamental s at street.com all it's mving averages are sloping up somehow although the stock is beneath them.. this is the type of power stock you may want to take a ride on for this final push up.

On NotableCalls this caught me eye
Morgan Stanley is upgrading Momenta Pharma (NASDAQ:MNTA) to Overweight-V and increasing their target to $22. Firm believes the stars could be finally aligning for the FDA approval of MNTA/NVS’s M-Enox in 2008-09 as the only genericversion of SNY’s Lovenox (blood thinner), potentially leading to: 1) 40-50% share of the $1.5+ billion U.S. Lovenox market, 2) peak potential earnings of $3/sh and 3) a share price of $40+. The downside risk of a long delay or non-approval is that the stock returns to $6.

Why are they upgrading now? Firm believes that the heparin (a complex sugar) contamination crisis may have given MNTA the unique opportunity to prove to the FDA its proprietary technology for characterizing complex sugars. Last week’s Nature publication shows that MNTA worked with the FDA to identify the heparin contaminant. They view this work as a game changer, underestimated by the Street. In our opinion, the FDA is now more likely to view MNTA’s technology as sufficient to show that M-Enox is the same as Lovenox (also a complex sugar) — a key regulatory hurdle and one they feel competitors Teva and Amphastar cannot achieve.

Notablecalls: This is a game-changing upgrade for this stock. Morgan Stanley has been neg on MNTA for quite some time (UW rating) and now they are saying the stock could do $35+ under bullish scenario.

The NC crew missed the fact that a news release further down shows MNTA announcing a presentation at.... of course Morgan. It's always hard to figure out the order of these things is the presentation set and then as luck would have it herceptin gets tainted or does the Co have a story to tell now... the fact that the co worked with the FDA in the emergency lends major creed to their case in my view. Perhaps sometime between today and the presentation Wed this could be bought for a nice hold. Big price target.

Other than that I'm seeing very little going on. My favorite police camera stock Digital Angel is reporting this week, they have in the past had blow out numbers. I have a small position and am entertaining the thought of buying more today... DGLY going to $14 I hope....

Hard to get going this week after the NFL draft!
I'm only giving the Giants a B or B- and I'm catching a lot of flack. ~ stoney

If you don't own MRVL buy it now. I bottomed fished this name a while back in a buy and hold account and it has not partied with other tech. It was named by Deutch Bank today as their top big tech for risk reward and that's just why I bought it. This is- god willing -a two year hold. In that same vein I screwed up. I charted FLIR TO DEATH and I researched the name enough to get a little bored with it yet it fits into water plays which I eventually want to rotate into. I let this one gap away.

You will see I took a small stab at Cadiz yesterday just to test it becausxe it acts so illiquid. Well I instantly got smacked around so we have to be careful with this name, this is a bit by bit story- build a position and then cross your fingers and hope for the court case starting now to go their way. With all the water shortage problems everywhere common sense says the judge would side very much with Cadiz and would encourage the sides to make a deal. This has to be done water must be diverted from the Colorodo and STORED FOR FUTURE DROUGHT! We are burning up folks! Anyway so FLIR nailed earnings will be looking for a good retrace but may have to wait for the whole market to tank and that doesn't appear to be happening anytime soon.

You should now I hate kramer. I have challnged him many times to a stock picking contest. I email nothing. he's a clown. A dangerous clown as they all are. (Don't be fooled by lacluster results at Covestor friends this account often lays dormant for long periods I use it to trade small stocks and when I find reliable names I export them in large size to several accounts. You could go to Elite trader and go through my thousands upon thousands it seems of great calls). Anyway I don't watch Kramer his fan base scares me but I noticed today in my morning scans that he highlighted a company with a hidden wind division and those always get my attention- OTTR Otter Tail, cool name to.~stoney

I'm feeling for a biotech and this fits the bill. Ill go into pipeline at a later time suffice to say $6 is important resistance and when we slice through that we will be at $6.75 shortly where we were just a little while ago when all this good news about insider buying came out and Jeffries analyst put a $13 price target on the name. A very good risk down here a buck or so off the low... knock on wood this should see $9-$11.~ stoney

I took the plunge and bought two Chinese names. JRJC is easy it's The Street.Com of China and a renewed interest in Cinese stocks means a renewed interest in this name. It's a great overall way to play China and I have used it before including once from $9!!

CHNR I have mixed feelings about. If you forget the facts and just go off the chart you will see an extreme narrowing of a huge spike and almost 100% retest but not quite it did consolodate at higher levels and for quite a few months. A break to the upside here well if you count the super spike which I do and draw some trendlines... that's how I got forced into the name... Now this is one of those companies that became a mining concern over night and may only have one smelter blah blah blah... If you can trust the numbers and quite possibly you can't well... neither of these two companies is losing money let's put it that way....

In the afternoon session lets keep an eye on DGLY. This we bought just a little ways back and folks she's going to tear someones eye out I hope it's just not mine... I may buy some more of that today for it has yet to do it's thing for me (although my wife has had $2 of love since I discovered it) and maybe a bio HALO.... ~stoney

What up Stocksters! Well Thursday is here and the earnings are good. Futures are down but we should be able to turn them around without much effort.

Today I will be looking at FLIR. I've been charting the stock for quite some time as I have felt it was undervalued. After it's earnings report I certainly regret not buying the many many times I had the opportunity to in and around $29.... That will certainly be support from here on out as they say... Doesn't move quite as fast as some stocks so we may jump on board, doesn't retrace much though so it may be tricky.... Water filtration is a good place to be... speaking of water Cadiz Land CDZI is an old old name for me... it has absolutely zero coverage on the street so it's weird... and no volume to speak of which is holding me away but at some point we have to start buying some water plays. I'm getting thirsty just thinking about it... well we do have one Carbon CCC in a different account and somehow I'm down 10%, the only investor to lose money in water. Still believe in the company though.... China Organic CNOA.OB is a stupid play organic rice costs more than regular rice and that's at an all time high! But there's rice shortage talk on the news today Costco is actually not allowing it's customers to buy more than 4 pounds of rice! Yikes food rationing in America due to commodities we are surly just about to bust this Ag bubble and it's going to be ugly when it goes... still for a quick trade this CNOA.OB might work it's down 65% from a recent high... All day yesterday I played cat and mouse with China Nat Resources... CHNR. This is a weird company I've come full circle on this name. It was a little nothing and they bought into a zinc mine and shell company and everything you don't want to have in an investment but the numbers are there now as are the assets so now after months and months of staying away and calling it junk I've changed my tune. Obviously if I do buy it immediately copper and zinc prices will dive as the metals look shaky....  CHNR CNOA.OB FLIR and I may rummage through NTRI, why not it's at a 2 1/2 month high and well down for the year. A nice turnaround rally today and a far east follow through overnight sure would send us into the weekend on the right note. Through everything the street has come to terms with only one more fed cut and that's a good thing. The sooner we get the Dollar going up the sooner we get all these high commodities down! ~ stoney