First, congrats to all the Yankee fans out there. Perhaps this isn't the best beginning post-celebration, but it is the best analogy I can think of off the top of my head: When the Florida Marlins faced off against the vaunted New York Yankees in the 2003 World Series, the Marlins had existed a mere 10 years whereas the Yankees had 26 World Series titles. Many pundits discussed that Yankee panache and the fact that the Marlins were this scrappy, upstart bunch. The Yankees had a great team and home field advantage. Relevantly to my upcoming point, the Yankees had the mystique of baseball players past as well as the cathedral known as Yankee Stadium. So, naturally the Marlins won the 2003 Series 4-2. You have to think that the Florida players heard all about the past, but to their credit, they did not let the ghost of Babe Ruth or the fact the Yanks had all those titles get into their heads. It is the same exact thing with stock trading. Ostensibly all that matters when looking at what a stock will do is the future...not the past. I bring this up due to the case of STEC (STEC). STEC on Tuesday afternoon warned of a shortfall in second quarter revenue guidance. The stock opened around 16, down approximately 7 points. Many investors much less traders look at a situation such as this and are petrified to short it because it's already down so much. But the fact that it STEC had a 30% haircut on the opening bell from its market capitalization sure didn't stop it from selling off about two more points. Thus, it's a very simple point- the fact that STEC already had a huge move didn't impede the stock from declining more. Do not let what has already occurred net-change wise in a stock directly affect your judgement in making a future trade in said stock.
Markets in Asia were weaker overnight with prices down about 1% on average. In Europe, the bourses were down substantially earlier, but have cut their losses to about 1/4% on average post-ECB interest rate announcement. Bonds are a tinge weaker with the dollar a tinge stronger and gold up a little as well. Futures are nicely higher on the heels of CSCO's strong data. For today, look for a bit of a retracement move from yesterday afternoon on the heels of the good earnings numbers. It will also likely be much more quiet than yesterday ahead of the unemployment report tomorrow. Focus on the news flow and do not scalp whatsoever as trading opportunities will not nearly be as numerous as in recent days.
Watch list:
11052009Eriklist.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
CSCO- great earnings
QCOM- good quarterly earnings; lukewarm guidance
CECO- great earnings
DOX- good earnings
MELI- good earnings
MCHP- good earnings
GGC- good earnings
EDMC- decent earnings
THOR- great earnings
NWS- decent earnings
SANM- raised earnnings outlook
WLP, TSRA, IMGN- mentioned positively on "Mad Money" last night
RIMM- announced a 21 miklion share buyback
H- debuting as an IPO with 38 million shares @ 25
ACOM- debuting as an IPO with 7.41 million shares @ 13.50
FSYS- great earnings
LAMR- decent earnings
PCS- decent earnings
PLCE- good same-store sales data
GPS- decent same store-sales data
PCS- decent earnings
WEN- decent earnings
MGM- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
WFMI- terrible guidance
ALL- poor earnings
IO- bad earnings
CXW- poor earnings
TRLG- closed near a low after posting terrible earnings
HGSI- reversed after several days of big gains
GRMN- closed near a low after posting earnings
STEC- closed near a low after posting horrible guidance
HIG- closed near a low after posting earnings
TEL- reversed in closing near a low after posting earnings
GDP- poor earnings
CPC- closed near a low
XJT- closed near a low after issuing poor earnings
JAKK- closed near a low after announcing a notes offering
SMSI- warned on earnings outlook
ARO- terrible same-store sales data
Earnings:
THURS NOV 5 BEFORE
ARD BVF CAH
CI CLR CTCM
CTL CVS DNR
DPS DTV FSYS
FTO HK HOC
HURN IGT KG
KIM LAMR MAC
MFC MGM NDAQ
OCN OCR PCS
PXP SE TWC
WEN
THURS NOV 5 AFTER
AINV ATVI CBS
CROX CSTR ECLP
EOG GFA HANS
IPI IRF JDSU
LEAP ME MGA
MIL NVDA PSA
ROVI SBUX SD
SUN SWKS VRSN
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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