REMINDER: The Epiphany Trading, LLC Networking Reception will be held today. It will be at 75 Broad Street, Suite 205, across the street from the New York Stock Exchange. It will start at 5:30PM.
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As I continue what is becoming a week-long theme regarding the slowing trading volume, let me touch on a different theme which in skimming back, I’ve actually never discussed in this space. Namely, the concept of trading volume in correlation to the market. If you want to go swimming in an Olympic size pool yet there is only six inches of water in the pool, I hope nobody reading this make a running leap and then jump in head first. Well, why do this financially? When markets are quiet overall particularly on days like yesterday, one must cut down on trading size. There are three main reasons for this. First, there is a relative paucity of trading opportunities. One bad loss oftentimes cannot be overcome because of the lack of chances to get it back. Second, with fewer participants and fewer reasons for buying or selling overall, conditions are much more illiquid. If you are incorrect, it can be uncomfortable to downright difficult to exit a position expeditiously. Finally, the follow through to moves can either be very easy or very hard. Due to the illiquidity, panics and exaggerated moves can happen when right thus an exacerbation of a potential trade can definitely occur. However, the odds of the smooth movement are declining with each passing day right now making tradition conditions overall harder. So, be aware of the changing market conditions and adapt accordingly.
Markets overseas are higher across the board with the Hang Seng up 1.5% and European bourses up 1% on average. Oil is up, gold is up, and the dollar down as the carry trade soldiers onward. Futures are stronger in the U.S. as well. Look for very slow trading today as it’s a bank holiday and the bond market is closed. The gains will likely hold, but regardless, trading will be ploddy and illiquid. Trade only the best opportunities and focus on the stocks in the news as well as on the hot sectors such as big-cap tech for chances.
Watch list:
11112009Eriklist.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
CRI- island reversal after announcing it will restate earnings results
REGN- conference call this morning at 8:30AMET to discuss a partnership with SNY
MON- closed near a high after increasing its acreage forecast
TOL- good earnings
CYD- closed near a high after posting good earnings
AMZN- closed near a high; various big cap techs did well yesterday as well (AAPL, PCLN among others)
CHLN- great earnings
Bad-The following stocks have bad news and/or a weak technical pattern
AONE- beat on revenues, but not earnings
AGO- poor earnings
EM- poor earnings
STV- poor earnings
RAH- bad earnings
ATO- bad earnings
FLR- closed near a low after posting bad earnings
ZION- closed near a low
M- poor earnings
PCLN- cut to neutral at Credit Suisse
Earnings:
WED NOV 11 BEFORE
FLO M PGR
WED NOV 11 AFTER
AAP AMAT CSC
CTRP GMCR ONTY
RA TTEK
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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