Yesterday had all the feel of a decent day during a bull market on the first day of the year. The averages were broadly higher with strength to be found in most sectors. However, there was one thing very notably missing- volume. In fact, the pace of trading was barely above that of Thursday’s pace. Amazingly, this has actually become the norm of the last few years. There is historically a bullish bias on the first day as the optimism and hope most of us tend to feel on New Year’s Year take effect with the added impact of a slew of new 401-k money and money managers wanting to get off to a good start to the young year. However, many managers still aren’t sure what to do on day one of the year (as discussed in Thursday’s blog to some extent). Plus, news flow tends to be slow; no companies report their earnings on the first day of the year for example. Finally, there’s still a bit of a holiday feel in the air combined with the “let’s get to work” attitude as many people tend to be tired from vacations much less travel back home so fatigue plays a part in this phenomenon as well. The bottom line: just because the pace of activity wasn’t feverish yesterday (nor is it likely to be hectic until earnings season in a couple of weeks), this is not a reason to make a trade or not. While veracity of volume matters in a macro scale, do not think much of the low activity yesterday and instead focus very hard on the intra-day trend you see.
Markets in Asia were ahead overnight with Tokyo up fractionally, but Hong Kong up over 2%. The European bourses are up much more moderately- about ¼% on average. Oil is up slightly as is gold with the dollar down a bit. Futures are moderately higher. Today seems to be a bit of a consolidation session with choppy markets albeit a strong undertone. Focus on the microcaps and relative strength plays as the news flow is not strong yet and trade nimbly as things will continue to pick up as we head towards earnings season.
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
RIMM, QCOM-started as “Overweight” at Morgan Stanley
CAGC, CAAS, NTES- among Chinese entities closing at or near a high
AAPL- confirmed its tablet will be released in March and will have a 10-11 inch screen
CHK- closed on a high after announced a $2.25 deal yesterday morning
BSQR- renewed OEM deal with MSFT
YTEC- formed joint venture with NTT Data
WYNN, LVS, MGM- closed near a high after the sector was upgraded by UBS yesterday morning
CSIQ- closed at a high
MERX- decent earnings
SYNA- closed near a high
DGLY- closed near a high after raising earnings guidance yesterday morning
BUCY, JOYG- closed near highs after Barclays Capital boosted earnings guidance on both companies
BTU, ANR- closed near their highs
GNK- closed near a high
STEC- closed on a high after being mentioned positively by Deutsche Bank yesterday morning
APC, WPRT- featured on “Mad Money” last night
POT- upgraded by Credit Suisse
APWR- signed licensing agreement with W2E Enterprises
ARYX- positive FDA data and seeking partnership with a large pharmaceutical company
Bad-The following stocks have bad news and/or a weak technical pattern
ACL- closed on a low after news of a very confusing acquisition from NVS was digested
Earnings:
TUES JAN 5 BEFORE
None today
TUES JAN 5 AFTER
MOS SONC
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
No comments:
Post a Comment