In 1989, as the Nikkei galloped toward 40,000 in Tokyo (the all-time high was hit on New Year’s Eve of 1989), Japanese management philosophy was the “in” thing as the 1990’s started. Now, nobody knows with any certainty how the 2010’s will play out, but one thing that was always shown on TV on the first day of trading and is a good theme for anybody’s trading day much less trading year is the idea of jumping jacks. The Japanese firmly believe (and I fully agree with them figuratively and literally) that exercise is a good way to start a day. While I rarely get a shot to get to the gym before I get into the office, I do try to follow that model a bit in getting my blood going. When one does jumping jacks, one clears one’s head and begins to get a bit of a positive tilt in getting all the good hormones going. Whether you agree or not, there is one item which is an absolute take-away- one must must must have a positive attitude when trading, but particularly at the start of a year. Everybody always has a little extra adrenalin going as we all want to get off to a good start. The two-pronged point is this: first, know how to harness it. Things tend to remain somewhat slow news-wise at the start of the year and big money managers and hedge funds tend to settle in rather than blast off so follow their lead. The last thing you want to do is to get yourself in an unnecessary hole 2-3 days in to the year when many opportunities will gradually but surely present themselves as markets begin moving anew and the news flow picks up as earnings season approaches. The other point is more macro and more important- that same excitement/level of interest/hope you have around 9:29AM ET this morning is the same feeling we should all bring with us to work each day. Every day and every trade cannot be a winner, but by doing what we’re supposed to do and keeping a positive attitude overall, it sure makes things easier. We all get moody and really angry at times and will continue to do so (myself the top of that list). However we must all intrinsically realize that with the right amount of work and discipline…and positive overall psychology, we can all make money as day traders in the overall scheme of things. Anybody can have a bad day or two…and we will all always be mad about it. By merely brushing it off, we refuse to accept responsibility and that’s not good either. Yet in the scheme of things, we must realize that bad things are going to happen and we must fight them off. So, while I harp on the preparation and discipline themes perpetually, let’s today focus on maintaining a great positive outlook…and aim for a winning trading day, week, month, and year- one day at a time- one careful trade at a time.
Markets in Asia were mixed overnight with Tokyo up 1% and Hong Kong down slightly. In Europe, markets are up about 2/3% on average. The dollar is slightly weaker with gold and oil strongly ahead. Futures are nicely up too in rebounding from Thursday afternoon’s late swoon. For the first day of the year, look for a somewhat slow day as people tend to settle in after the holiday. There is a tremendous amount of news flow from the brokerage houses so if something gaps up or down a lot, definitely check the news. Focus on specialized situations with stocks in the news as momentum trading likely will not work today. In all likelihood, stocks maintain their positive bias all day.
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
WBD- closed near a high after being upgraded by Citicorp
CHK- announced $2.25 billion venture with a subsidiary of Total
LVS, WNN- upgraded by WYNN
NIV- entered into development deal with China Potevio to develop a 3G mobile phone
Bad-The following stocks have bad news and/or a weak technical pattern
OSIS, ICXT, ASEI-among airline security stocks closing in the lower band of their ranges
SEED- closed near a low in reversing some of Wednesday’s massive gains
AMZN, AAPL, IBM, GOOG- closed on or near lows
CNW, ABFS- closed near a low after YRCW seems to have gotten itself out of immediate trouble, i.e. competition remains in trucking industry
AIG- several managers as well as Federal Reserve representatives deemed the stock worthless according to the “New York Times magazine”
ACL- very complex story; Nestle getting rest of stock for 180, but rest being bought out by NVS for 153. may be trade of month if it opens higher
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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