On Tuesday, much less most days in recent memory, I was involved in a discussion with a group of people who just knew they should have held a certain stock longer. Just knew it. One person, however, noted something quite wise for that particular day: “Today has been choppy. Nothing has been smooth.” The simple response/add-on to the entire matter is as such: for every one stock that just keeps on going upon exit from said position, there are about 4-5 that will move 10-20 cents in your favor fast, move 5-30 cents against you, and then do whatever it was they were meant to do. When stocks are not moving dramatically, moves such as the ones we’ve been accustomed to in the immediate-run much less slightly longer-term just don’t occur as frequently or as ‘easily.’ By ‘easily,’ I mean stocks can still get their moves, but they do it in a manner that is ostensibly 22 steps ahead and 21 back. If the market is placid, why should the one trade that you do necessarily going to be the one that is gonna go smoothly? So, there are a few takeaways from this thinking. First, there is no point in being excessively frustrated in this trading environment. One can be angry and stew as much as one wants (and I for one am certainly guilty of internalizing), but the market is an entity. Sometimes it is moving rapidly; sometimes it is not. And there is nothing we can do about it. Second, it is pointless to think about what could have been except to deeply analyze how and why you can do better. I was short 10000 shares of VVUS at numerous times yesterday. But what I focused my energies on last night during my three hours or so of analysis was on how to improve my actual trades as well as to seek future trades rather than “gee, had I held 10000 shares from 9.50 to 8.60, I’d have made $9,000.” Yes, of course that thought did occur to me and yes, I did study the stock to see if I could have held it and yes, I do introspection…but the fact of the matter is- that is not how I have trained myself to trade. Finally, harking all the way back to the previous sentence, one must figure out/decide what type of trade one wants to make. If one wants to enter and exit VVUS in 30-90 seconds, that is fine. If one wants to hold it for 30-90 minutes, that is fine too. But don’t get the styles mixed up. In this environment (which will likely get only harder as we approach Thanksgiving), adaptability to placid market conditions, recognizance of intra-day trading for what it is, and the ability to keep one’s emotion in check are an absolute must these days.
Markets overnight were hit in Asia overnight with Tokyo and Hong Kong both down about 1%. Prices followed suit in Europe with the bourses down about ¾% on average. The carry trade is in reverse with the dollar notably stronger against the euro and the metals and oil lower. Futures are indicated weaker ahead of options expiration tomorrow. Today will likely be an “outside” day in that today’s range should be bigger than yesterday’s. Watch for that dollar-euro relationship. It is going to be particularly tricky to trade as things will be very choppy. One idea is to look for things that don’t look down all that much early on because in any rally, those will likely rally first and hardest. Otherwise, focus on the solars (because of the earnings), the retailers, and selected specialized situations.
Watch list:
11192009Eriklist.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
MON- closed near a high
NTAP- beat earnings estimates and raised guidance
PVH- decent earnings
LTD- decent earnings
DCI- decent earnings
CYBX- decent earnings
CGA- announced a VAT exemption for organic fertilizer product sales in a Chinese province yesterday; stock closed near a high
EXM- closed near a high in a strong dry bulk sector
LZB- closed near a high after posting great earnings
TWLL- closed near a high
OC, WSO, DVN, BTE- mentioned positively on “Mad Money” last night
SRZ- completed the sale of 21 community portfolio for $190 million
XIDE- announced it’d be battery supplier for the Toyota Highlander in the US
SHLD- decent earnings
STP- good earnings
TSL- good earnings
WSM- decent earnings
CO- IPO pricing 3.6 million shares at 6.05
GME- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
NANO- closed near a low after announcing a shelf offering
ZOOM- continued to decline despite posting great earnings on Monday afternoon
GYMB- poor earnings
PETM-poor earnings
HOTT- poor earnings
WGOV- poor earnings
SMTC- poor earnings
MFC- fortifying its capital position by offering C$2.5 billion in capital equity
NTES- poor earnings
JACK- poor earnings
CMED- terrible earnings guidance
TEN- secondary offering of 12 million shares at 16.50
DKS- poor earnings
ROST- poor earnings
Earnings:
THURS NOV 19 BEFORE
BKE CMED DKS
HP PDCO PLCE
ROST SBH SHLD
STP TSL WSM
THURS NOV 19 AFTER
ADCT ARUN FL
GPS INTU VRGY
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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