THURS. MAR. 19: March Madness

Tomorrow, I will write a more detailed explanation of what happened yesterday as things sort out a bit, but for today, I have to write the following piece as this is amazingly arguably more important for the day trading world in my head (and I’m not kidding) as the next two days are fraught with peril for day tradersparticularly in the afternoons ergo I must make the point: Louisville. UConn. Pitt. UNC. MSU. Memphis. Duke. Oklahoma. Should Memphis have gotten a 1 seed over Pitt? If MSU had won the Big Tournament, should they have gotten a 1 seed? A five loss Louisville team got the overall top seed in the NCAA’s? Of course, if L’ville did not get it, who would? Nope, I am not guest writing a column for ESPN or Yahoo Sports. Rather, I am making a point – particularly to those who are either new to day trading and/or those with a propensity to scalp. I don’t have numbers in front of me, but it is safe to say that a high proportion of those who trade for a living also have an interest in the basketball tournament whether it be a rooting interest or a monetary interest. So what ends up happening on the first Thursday and Friday of the tournament? TV’s all across the great USA become tuned to CBS over CNBC and people want the score reports over the Faber Report. Thus, the bulk of the trading tends to be done in the first half of the day as the games typically starts just after 12:30PM ET. Furthermore, the tournament also typically occurs during quadruple witching for various expiring financial instruments (options, et al) thus most big players do what they have to do ahead of time in an anticipation of the expiration. Ergo, what it tends to set up is some extra volatility in the 1st half of the day, placid trading in the middle ¼ of the day, and illiquid trading in the last ¼ of the day. Now, of course, things can change, but what won’t likely change is that interest in the tourney will be very high today and tomorrow so be well aware of the aforementioned game plan as to how these two trading days tend to go flow-wise and trade accordingly.

Markets in Asia were lightly mixed overnight with the bourses in Europe up about 1% on average. Gold and oil are both sharply higher (about 5% plus) in the early going with the dollar weaker. Futures are higher with notable strength in selected financials and tech (BAC, ORCL). Look for a slower much more choppy day today with prices on both sides of unchanged as the tug of war over the government’s actions along with those of C dominate the landscape. With that in mind, if C holds well, the ‘choppiness’ will continue to be to the upside. Trade very nimbly…and try to get most of your stuff done in the 1st half of the day due to the slowing pace this afternoon re the tournament.

Watch list:

03192009Eriklist.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

CETV- closed near a high

CRBC, SBIB, FMER, BBX- among the small banks rallying hard on short covering

XL- among the small insurers rallying hard on short covering

MRX- very nice reversal after its poor Tues afternoon drug news; settled with TEVA as well

GES- closed near a high after a major reversal

DRI- up sharply after posting terrific earnings

BXC- closed near high of day

JPM, WFC, PNC, USB, STT, STI, BAC- all closed at or near highs of day I na continued surging banking sector

AFL, ALL, PRU, MET, CB- among the big insurers closing at/near highs of day

ORCL- beat earnings and raised guidance

NEM, GOLD, GG, AEM, - among gold stocks which exploded higher yesterday afternoon

WMI- on “Mad Money” last night

SA- closed near a high

NAK- closed near a high

MPWR- closed near a high

CREE- closed near a high

DFS- good earnings

ROST- good earnings

DRYS- signed a contract to lease one of its ships


Bad-The following stocks have bad news and/or a weak technical pattern

C- provided more color on its plans; among other things ,they will be doing a reverse stock split…although stock is mildly positive pre-open

NKE- beat on quarterly earnings, but warned on outlook

CTAS- poor earnings

CLC- terrible earnings

PRGN- bad earnings

FDX- bad earnings and warned



Earnings:

THURS MAR 19 BEFORE

BKS DFS FDX

PLCE ROST WGO

THURS MAR 19 AFTER

PALM TKTM

Good luck today.

Epiphany Trading, LLC

http://www.epiphanytrading.com/

Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President