For those poker players out there (must less anyone who pays attention to any real-life situation which requires guesswork), one tends to look for a ‘tell.’ In poker, it may be if a player fidgets with his/her hands or if one blinks excessively when having a particularly good hand. Outside of poker, it could be a parent asking a question of a child and trying to tell based on stuttering or facial expression if the child is telling the truth. So it is with the stock market. Despite the weak overall tape yesterday, it was notable that WMT was actually higher. There was a ‘tell,’ however, on Wednesday afternoon which helped to set up many traders yesterday morning in buying the stock through Wednesday’s close in the pre-hours. Around 11;45AM on Wednesday, the former CEO of WMT (H. Lee Scott) who by the way is still the chairman of WMT’s executive committee noted that WMT “expect(ed) a very challenging, difficult Christmas.” Quite naturally, the stock immediately dip on the comments from such a creditable individual. Yet, within a couple of hours, the stock rallied in closing at the day’s high much less the high of the last several months. Think about that- the company flat-out said its outlook wasn’t so rosy yet the stock ignored it…ahead of its earnings release due out yesterday morning. So, it occurred to me- what could they possibly say that would defray the upward trajectory of its stock price? They already ostensibly warned on its outlook…and the stock didn’t budge. Sure enough, they missed their quarterly revenues and issued lukewarm guidance which led to a lot of freaked out people in the early early going. But the buoyancy reasserted itself and I entered WMT on the long side when the stock inevitably got to unchanged on the morning. So, whether a short-term trader such as myself or one who swing trades a bit, paying rapt attention to what the market tells you is an absolute must…and you never know what you’re gonna pick up here and there.
Markets overseas were mixed overnight. Tokyo was down slightly while Hong Kong was up 0.5%. Markets in Europe are a hodgepodge as well with prices on all the major bourses within ¼% of unchanged. The dollar is weaker against the yen and euro with oil down slightly and gold up slightly. Futures are mildly ahead due to the reassertion of the dollar decline. On a very rainy Manhattan Friday, look for a particularly quiet day. There will likely be one attempted small sell-off to pad on to yesterday’s weakness, but the movement of the dollar is the key to the equity markets today all else equal. Thus, as long as the dollar remains down, look for small gains overall. Focus on the stocks with particularly limited news flow and don’t scalp for the sake of trading.
Watch list:
11132009Eriklist.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 specified.If 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
NLST- closed near a high amid a continued rise after launching a 16GB, 2 Virtual Rank memory module on Wednesday
PLA- closed near a high amid rumors that the company is putting itself up for sale
DIS- great earnings
ABC- boosted buyback program
CY, COST- featured positively on “Mad Money” last night
TSTC- fantastic earnings
PDLI- paying out $200 million to shareholders in the form of a special dividend
NANO- closed near a high
KNDI- closed near a high after announcing it had sold its first electronic car in China
IOC- positive initial logging results from Antelope-2 oil well
ANF- great earnings
RUE- IPO- 6.77 million share at 19, above expected range
A- good earnings
RINO- great earnings
JCP- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
DNDN- closed near a low after officially posting earnings on Wednesday night
STT- closed near a low
FSLR- broke down to another new trend low
JWN- guidance missed whisper numbers
ESE- terrible earnings
MSCC- poor earnings
LIME- poor earnings
ZAGG- poor earnings
DG- IPO- priced on lower end of range- 34 million shares at 21
CADX- FDA extended new drug application review for three mnoths
Earnings:
FRI NOV 13 BEFORE
A ANF JCP
MBT TK URS
YGE
Good luck today.
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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