FRI. DEC. 11- Mish-Mosh

Over the last 15 years or so (and probably a lot longer for many people), I’ve heard the phrase “this isn’t a stock market; it is a market of stocks.” The general meaning behind this tenet is that there are times when all stocks in the market move in tandem whereas there are other times when different stocks are moving within the market. Simplified that much more, with the Dow and S&P 500 up more than 50% off the March lows, one can definitely say it was a ‘stock market’ as the rising tide carried almost every equity higher. However, we are having many more days like yesterday in which we have a market of stocks. By this, I mean that the NASDAQ for instance traded in an extraordinarily narrow range for much of the day yet there were massive divergences; at one point yesterday in the middle of the afternoon, RIMM traded at the day’s high while AAPL traded at an intra-day low. When GS traded at the day’s high, MS traded in negative territory. Healthcares traded strong while casinos were weak. What is important to note is that the environment constantly changes and we’re in the midst of a trading arena with a different variation of the game as compared to six months ago for sure. One must be aware of newsflow, not quite as absorbed with the market all the while realizing that a quiet tape usually means mere noise in individualized stocks, and of course said noise can be loud in both directions. Tread very lightly these next few weeks; it is quite easy for one or two bad trades to sabotage an entire day as the opportunities on any given day continue to decrease in quantity and quality as 2009 wraps up.

Markets overseas were strong overnight with Tokyo up more than 2% and Hong Kong ahead more than 1%. In Europe, the bourses are up about ¾% on average. Gold is rebounding about 1% with the dollar slightly weaker across the board. Futures are once again trading higher. It looks to be the same story as yesterday except even quieter. The bid beneath the surface continues particularly after great retail sales results this morning yet there is no mad rush to do anything. Look for a muted session with an upside bias as big-cap tech and commodities stocks are strong; focus only on the limited stocks in the news and on relative strength plays. Also, it is worth noting that some of the strength is giving way as we get closer to the open so watch the broader tape for some plays early on as well.

Watch list:
12112009Eriklist.zip

Reiterating-
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

AET, WLP, CI- managed healthcare providers was the strongest sector in the market yesterday; most of them closed near day’s high

OXM- closed near a high after posting good earnings

IOC- closed near a high after issuing positive oil well news

HNT- good earnings guidance, but missed revenue guidance

SNSS- closed near a high after issuing positive data at a hematology conference

CBK- decent earnings

GMCR- mentioned positively on “Mad Money” last night

UTX- confirmed earnings estimates

ALV- good earnings

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

NSM- poor earnings

ESL- poor earnings

AAPL- closed near a low

LIWA- major intra-day trend reversal in closing near a low

FSYS- closed near a low

SPCHB- reversed in closing near a low after a positive “Investor’s Business Day” story

SIRO- filed for a share offering

DEER- priced six million shares a t11- significantly below yesterday’s close

KAR- debuting as IPO at 12- below original thought of 15-17

DNDN- share offering at 24.75






Earnings:

FRI DEC 11

none

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