WED. APR. 22- Going With The Flow

Without a doubt- certainly in the immediate-term- this is an entirely different trading market that we are involved with. Look no further than the last two days as evidence of that. On Monday, the financial stocks were absolutely drubbed in their sector percentage decline in several weeks. Yesterday morning, pre-open ZION and BK both reported atrocious earnings. ZION was particularly notable as it fell a stunning 40% plus from its high on Friday to its low this morning. But a peculiar thing happened on the way to disasterville: selling pressure just was not there. The futures were never really weak all morning yesterday and an attempted early sell-off was meted by weak volume. So, when the selling pressure dried up, a vacuum was created in which shorts who made a lot of money very fast decided to take their money and run. This in turn brought out some momentum players and you saw the likes of STT rallying from down a couple to finish up 5. Whether one is skeptical about stress tests or any other form of government intervention much less whether we are in a recovery, do not doubt one thing if you are a day trader: trade what you see. So many traders cannot understand why an STT did what it did and really, does anybody truly know with 100% certainty? But there is something with 100% certainty that is true: if you trade with your heart and your brain rather than ostensibly going with the flow when there is a steamroll of momentum as occurred in the BK and STT type plays of the world yesterday, you will not be around in this business very long.

Markets in Asia were mixed overnight with Tokyo up slightly but Hong Kong down 2.5% plus. European bourses are quiet, but trending lower after trading higher earlier. Futures are being dragged down by the massive MS miss. This will set the tone almost all day from Wall Street; look for a downside day (albeit not a horrible one), but it is a good day trader’s market for selected stocks. Use MS and WFC as your benchmarks for the financials as well as the market; if WFC in particular rallies after the open, it will be a flashing light that the sell-off will be meted.


Watch list (only top 100 symbols displayed here):
04222009Eriklist.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

SNDK- good earnings

YHOO- good earnings

CHRW- beat slightly, but traded sharply higher last night after-hours

GILD- good earnings

DDRX- closed near high after great earnings

TCK- closed near high after debt restructuring

FRZ- closed near high of day

QLGC- rose sharply on takeover rumors yesterday; may reverse today if nothing comes to fruition

ALXN, MEDX- mentioned on “Fast Money” last night

LNC- closed on high of day

USB, STT, BAC, JPM, STI, PNC- all closed near highs

PFCB- positive earnings

BA- good earnings

TROW- good earnings

T- good earnings

IR- good earnings

MCD- beat earnings slightly

WFC- beat earnings, but may be dragged down by MS


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

COF- bad earnings; AXP, DFS may move in sympathy

NSC- poor earnings

TEX- poor earnings

ILMN- bad earnings

PXP- doing massive share offering

JAH- poor earnings

VNO-share offering; all REIT’s (particularly SPG, EQR) rose sharply into close yesterday as well

DOV- bad earnings

WLP- bad earnings

ABFS- bad earnings

GSK- bad earnings

LII- bad earnings

PPDI- bad earnings

FCX- missed earnings

GNTX- poor earnings

MS- atrocious earnings




Earnings:

WED APR 22 BEFORE
ABFS APD ATI
BA CAL CFR
DOV ECA EGN
ELN FCX FMBI
GENZ GNTX GSK
IR KMB LII
MCD MO MS
NITE NOC PBG
PDS PFCB PFS
R SNA STJ
SY T TDY
TIN TNB TROW

WAB WFC WIT
WLP WWW
WED APR 22 AFTER
AAPL AB ACL
ADS AF AFFX

ASIA AXYS BCR

CMG CVA DOX
EBAY EFX EQIX
FFIV FIC GGG
HUBG ISIL KNX
LEG LHO LOGI
NE NUVA NVLS
PTP PTV QCOM
RHI RJF SLM

SNV STLD SUSQ

THRX TMK TSCO

VMW WGOV WOOF

XLNX YUM

Good luck today.

Epiphany Trading, LLC

http://www.epiphanytrading.com/

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