Sometimes, we struggle so much to figure things out that we miss obvious signs right in front of our eyeballs. Yesterday was one of those days. While volume was admittedly anemic, it was an exceptionally bullish trading session. The first of the major bond auctions of the week received a very lukewarm reception with a respectable bid-to-cover ratio, but not a rip-roaring one- particularly with interest rates haven risen rather significantly in the last few weeks. The other issue was the near-bombing of a Northwest Airlines flight on Christmas Day. Maybe it takes an actual bombing to truly take notice? Regardless, an extremist came within inches of blowing up an airplane and taking 300 people with him. Furthermore, al-Qaida actually claimed responsibility for said attempt yesterday in response to events in Yemen. Yet, all of the benchmark averages closed near their intra-day highs. My takeaway in the macro is that the markets remain incredibly resilient and in the micro, there’s no point in trying to find trouble where trouble doesn’t exist. Geopolitics will likely play a bigger part in market forces next year, but for now, day trading remains ostensibly a parlor game with an upside bias trading-wise in a shrinking pool of select stocks as 2009 comes to a close.
Markets in Asia were marginally higher overnight with the European bourses generally up about 1/3% on average. The dollar, gold, and oil are all slightly weaker. Futures are up slightly. There is an absolute dearth of news; there are a handful of upgrades this morning in some of the big cap techs and financials which are lending support to the futures. But, it is extraordinarily quiet. Look for it to remain placid all day with an upside bias. Trading opportunities will be few and far between so be in capital preservation mode with a focus on any tiny microcap stock with news along with relative strength plays in big caps.
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
GMCR- continued an amazing run in once again closing near a high
NEP- closed near a high
APOL- closed near a high
RIMM, IBM- closed on a high
IPSU- settled $345 million insurance claim in which it expects to recognize pre-tax gains of $278 million next quarter
SPA- closed near a high
VVUS- submitted Qnexa new drug application to the FDA following successful completion of phase 3 program
Bad-The following stocks have bad news and/or a weak technical pattern
BUCY- closed near a low
QCOR- closed near a low in a continued reversal from last week
Earnings:
none today
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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