The best performing sector in the S&P 500 in the last week has been the banking sector. How good has it been? The performance of the banking stocks was the best over a five day stretch in recorded history. Like ever. Of all-time. This ends today of course, but that is not the point...what did the overall stock market do in the last few days? Well, it confounded most people (including myself) who thought the market would rally once the financials showed any stabilization. Well, what happened? Simple. Other sectors got absolutely crushed for reasons that actually could have been foreseen had one done a lot of homework. For instance, the healthcare and biotech sectors have gotten rocked in recent days amid worries that the government will be impeding upon the profitability of healthcare companies to operate profitably. Another example is the student loan sector; the once great Sallie Mae (SLM) is in danger of no longer being a viable entity. For day traders, it creates all sorts of turmoil- yet, amid the chaos comes opportunity. If Capital One (COF) is in the middle of a range, maybe Humana (HUM) is on a low. If IBM (IBM is at the top of a range after pre-annnouncing to the upside, maybe one should focus on that tech stock rather than a Chevron (CVX) in the middle of a range. More than ever, know your sectors, understand your politics, and trade with joy yet caution as the last few days have been very whippy.
Markets in Asia were mixed with Europe down 2% or so across the board. The main impetus here this morning is C. If the market shakes off the weakness in the first half hour, look for a very very very strong rally...however, should the market fail to bounce whatsoever on what is expected news this morning, this afternoon will likely be very choppy and generally weaker. AS DISCUSSED ON THE NIGHTLY EPIPHANY VIDEO LAST NIGHT, the banking situation is the thing to watch as things progressively worsen.
Watch list:
2272009Eriklist.zip
Reiterating-
Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
DELL- beat for quarter on earnings
SBAC- good earnings
UHS- good earnings
BCSI- good earnings
SNDA- decent earnings
INT- great earnings
PBT- on “Mad Money” last night
WG- reversed its downtrend and closed near high
HBI- closed near a high
Bad-The following stocks have bad news and/or a weak technical pattern
C- TRADE OF THE YEAR: The Fed is going to partially nationalize this thing. If the stock trades higher in the pre-open…particularly BEFORE 8AM ET, SHORT THRU UNCH. Watch all other banks as well.
NNI, SLM- among main student loan lenders demolished yesterday amidst worries that their business will be annexed by the Feds
TEG- closed near a low after posting bad earnings
CDI- closed near a low
CVH, HS, HNT, AMGN, HUM, WCG- all closed near lows among other healthcare entities amid worries about the government’s plans
SWN- poor earnings
CVA- poor earnings
DECK- terrible earnings
KSS- bad earnings
GPS- bad earnings
CTV- poor earnings
ADSK- bad earnings
OVTI- abominable earnings
SNTA- discontinued its phase III trial of its lead drug
SOMX- discontinued a trial of its lead drug as well
ERES_ bad earnings
RWT- bad earnings
HK- announced 22 million share offering
CELG- closed near a low
WMGI- closed at a new trend low
CBST- closed near a low
LNCR- closed near a low
FCFS- breaking down anew; closed near a low
AMED- closed near a low
AMAG- huge percentage loss and closed near a low of day
ETN- closed near a low
CNW- closed near a low
MD- huge percentage loss; closed near low
MIC- in danger of going bankrupt; closed near low
Earnings:
FRI FEB 27 BEFORE
AMAG AYR BX
CCC CPN CSE
DRH ENDP FRO
IPG JRCC MGLN
MIR PGR RSG
SNDA TTI WCRX
WR WTR
Good luck today.
Epiphany Trading, LLC
http://www.epiphanytrading.com/
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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