Yesterday for the first Wednesday morning in quite some time, there was something I did not do: halt everything and stare at my computer terminal at 10:30AM for the weekly oil inventories report. From the positive perspective, it is shows how little oil is correlated with the market these days because I didn’t think to look plus my focus was elsewhere. From the negative perspective, well, my focus was elsewhere and I didn’t think to look. Let’s briefly discuss both points. As far as oil is concerned, everyone tracked oil at this point last year to the point where many trading operations did their trades with a darn near inverse tick-for-tick oil to S&P 500 futures mindset. It is almost impossible to believe, but it is still less than a year that oil was selling for over 100 dollars a barrel higher than it is now. As time went on, the correlation swung the other way; falling oil prices were viewed as a negative for the worldwide economy. Thus, for awhile, as the market rallied, so would oil and vice versa. But now? Now the markets are much more focused on things like the survival of the banking system with oil way on the backburner. Moral 1: don’t stare at oil on any given day right now for clues as to where the market goes. As for the second point, even though it is not good to stare at oil prices, it is also not good not to glance either. As traders, we must be attuned to every piece of news there is that can move markets; it is why I tend to be so very busy during earnings seasons. While information overload is not good obviously, I do what I can to simply keep up rather than try to know every piece of minutia. And the fact of the matter is that a particular bad or good oil report can provide a jolt still because of the whole ‘world economy’ paradigm in that building or declining inventories can signal the temperature of the economy. Thus, moral 2: don’t repeat my mistake; indeed, oil prices broke fairly hard right at 10:30AM yesterday and it was an opportunity missed. One must keep up with every major piece of news (even oil news) because one never knows where the next trade may exist.
Markets in Asia were up a bit overnight with the Nikkei up over 1% and the Hang Seng over 2%. The European bourses are generally up slightly with the DAX down slightly. State-side, futures are up a bit with techs leading the way; there seems to be no real reason for that to change despite yesterday afternoon’s freaky sell-off. I am looking for a grinding generally upside session with the best trades coming in techs and the myriad of earnings plays out there.
Watch list:
04232009Eriklist.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 (preferably to the downside in a downside market and the upside in an upside market) 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
AAPL- good earnings
EBAY- good earnings
QCOM/BRCM- on verge of finally announcing settlement
NUVA- great earnings
CMG- terrific earnings
YUM- great earnings
EFX- good earnings
PTV- great earnings
TSCO- good earnings
ABMD- received 510k clearance on its lead device
WGOV- good earnings
NE- good earnings
FMER, TOL- featured on “Mad Money” last night
DOX- decent earnings
XLNX, NVLS- decent earnings
DO- good earnings
FITB- great earnings
HSY- good earnings
MAR- good earnings
NIHD- good earnings
PNC- good earnings
RTN- good earnings
STI- good earnings
ZMH- good earnings
RSH- good earnings
ESI- good earnings
OXY- good earnings
NVS- good earnings
RCL- good earnings
UNP- good earnings
JBLU- great earnings
LCC- good earnings
MI- good earnings
COP- good earnings
DLX- good earnings
EXC- good earnings
ABC- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
BCR- poor earnings
VMW- atrocious earnings
FFIV- poor earnings
TMK- poor earnings
LRCX- bad earnings
WCN- closed near a low
ARE- closed near a new trend low…scary considering most other REIT’s are well off of their lows
SVR- closed near low of day
CVA- closed near low of day
RJF- bad earnings
BG- bad earnings
NCR- bad earnings
POT- lowered guidance
TMO – bad earnings
ALXN- bad earnings
CIT- bad earnings
BDK- bad earnings
NOV- bad earnings
HSC- bad earnings
Earnings:
THURS APR 23 BEFORE
ABC ALK ALXN
AN AUO AVT
BDK BG BHE
BLL CBE CIT
CLP CLS CME
COP CP DHR
DLX DO EMC
ESI ESV EXC
EXP FCF FITB
GDI GMT GR
HSC HSY IGT
IVZ JBLU JNS
LCC LH LLL
LTM MAR MI
NCR NFX NIHD
NOV NUE NVS
ODFL OMTR ORI
OXY PENN PEP
PM PNC POOL
POT RCL ROP
RS RTN RX
SCG SEIC SIAL
SPWRA STI SU
SVU TASR TCB
TMO UCBI UNP
UPS VLY WCC
WTNY ZMH
THURS APR 23 AFTER
ACF ALGN AMGN
AMZN ATHR AVCT
AXP BNI BUCY
CAKE CATY CB
CF CNW CPHD
CYBS CYN DDR
DECK DFG DV
EMN EZPW FII
FNB GBCI GRA
IBKR INFA INSU
JNPR KLAC MHK
MSCC MSFT NFLX
NTY PMCS RMBS
RVBD SIVB SKT
STAR STSA SWKS
SYNA WDC WFR
YRCW
Good luck today.
Epiphany Trading, LLC
http://www.epiphanytrading.com/
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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