I am at an age now (aka old) that I begin noticing more subtle things. I can differentiate between the cries of my infant daughter. I know when I ask my wife what is wrong and she says “nothing,” I can tell exactly how serious she is in the intonation. I know when my car is not acting right. But I am also that much more of a ‘listener’ to the markets. I preach all the time that we as traders should let the markets tell us how to trade rather than make our own guesswork and we got a subtle yet high-pitched squeal yesterday morning…certainly for a day trade. I even mentioned it briefly in yesterday’s market comment piece. The latest GDP report came out much worse than expected. In English, the economy is doing even worse than the wise economists opined when asked to give their estimates to services such as Dow Jones and Reuters. When a terrible economic number comes out, one would expect the market to fall. Indeed, S&P futures fell a couple or three handles when the GDP number was released, but within two minutes, all the ground had been regained and the market was even higher. That signaled to me that the news was already in the market plus if the market could not go down on that horrible piece of news, my trading for the day would be focused to the long side- and that is exactly what I did. I did not try to guess why the market performed as it did; I just went with it. So, as I try to improve on this facet of my trading performance on a daily basis, the daily epiphany is two-fold: 1) the tone of the market is very strong right now. It can change at a moment’s notice of course, but wow- yesterday was impressive. 2) Pay attention to what the market is telling you. Know the newsflow and have a rudimentary understanding of major events like economic reports; by doing so, one can actually earn a day’s pay trading equities.
Foreign markets soared overnight on the heels of Wall Street’s rally yesterday. Markets throughout Asia were up 3% to 4% across the board while prices in Europe are up 2% to 3%. There seems to be no real catalyst for the rally other than an increasing belief that the banking system is going to survive this financial crisis. Futures are sharply higher again and there just isn’t any real reason to see this changing as we approach some pretty big numbers on the S&P chart. Short covering is in vogue and that is that right now. Look for a continued upside day on the busiest earnings day of the season. It will likely be a bit calmer than yesterday; use banks as your benchmark, but it seems like the firm tone is going to hold ahead of Monday’s stress test results release.
Watch list:
04302009Eriklist.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
MGM- received a reprieve for its CityCenter deal in restructuring debt; LVS and WYNN may move with it
F,GM- rumors after the close that teh government may utilize TARP money to buy equity or debt stakes in the automakers
AKAM- good earnings
TRIB closed on a high
SRZ- closed on a high
NFP –closed near a high
PNRA- on “Mad Money”
TWC- closed on a high after posting good earnings
FSLR- great earnings
CTXS- good earnings
GMR- great earnings
OI- great earnings
TRN-great earnings
VARI- great earnings
GMCR- terrific earnings
FLS- great earnings
CCI- good earnings
AMKR good earnings
ARRS- good earnings
SKX- great earnings
TTEK- good earnings
ORLY- decent earnings
WYN- closed near a high
AMG- closed near a high after posting great earnings
CELG- good earnings
CLI- good earnings
DOW- great earnings
HOT- good earnings
MOT- good earnings
NWL- good earnings
PCX- good earnings
PG- good earnings
TNDM- good earnings
TYC- good earnings
WPI- good earnings
ASH- good earnings
CL- good earnings
IP- good earnings
NRG- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
SQNM- company indicated researchers falsified documentation on its lead drug
V- beat earnings, but volume growth slowed; MA may move with it
URI- terrible earnings
JDSU- terrible guidance
CVD- poor earnings
ITRI- terrible earnings
CBL- bad earnings
NTRI- poor earnings
FTI- bad earnings
AIZ- bad earnings
VAR- bad earnings
HAR- poor earnings
RYL- bad earnings
HIW- bad earnings
DRIV- bad earnings
RE- bad earnings
CAVM- bad earnings
FORM- bad earnings
RNR- bad earnings
MANT- bad earnings
AVB- bad earnings
CI- bad earnings
EK- bad earnings
OSK- bad earnings
Earnings:
THURS APR 30 BEFORE
AHL APA ASH
AWI AZN BBW
BC BRY BWA
CELG CI CINF
CL CLI CMI
CMS COCO COV
CTL D DLR
DOW DPZ DRE
EK EQR EQT
ERIC ETH EXPE
FAF FMX GEO
GTI GTIV HOS
HOT HP HS
IFF IP IRM
ITG K KBR
KIM KSU LNT
LZ MFA MOT
MRO MYL NBL
NEM NRG NU
NVO NWL NYX
OC OCR OMX
OSK PCBC PCX
PDE PEI PG
PTEN RGC RYN
SBH SEPR SPR
STRA SWY TNDM
TRH TRV TSM
TYC WMX WPI
XEL XOM
THURS APR 30 AFTER
ACS ARBA ATHN
ATO BGC BMRN
CAB CHH CMO
CPT CQB DLB
ELY FISV FR
GPRO HIG IM
IN ITMN MCRS
MET MFE MTD
MTW MWW MXIM
NETL NFG NLY
NST NTCT PKI
QLGC SQNM SSD
TEG TSRA TSYS
UGI VPRT VSEA
XRAY
Good luck today.
Epiphany Trading, LLC
http://www.epiphanytrading.com/
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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