MON. FEB. 22- Slow Going

So often, we all talk about how busy it is. Well, today, I want to go over a very weird calendar quirk. As a general rule, earnings season is very busy yet certain times like the final week of the 2nd month of each quarter tend to be relatively slow. In May, the last week of the month tends to coincide with the Memorial Day holiday. In August, the last week usually precedes Labor Day week and is usually the last week off for the kiddies for the summer. The final week of November is usually centered around Thanksgiving. Which brings us to February. The only relatively major holiday of note has just passed (and although my wife would beg to differ, I am not referring to Valentine’s Day since the stock exchanges aren’t closed for that holiday!). Yet, the phenomenon remains in force this time of year as well. Schools were closed in the New York City area for President’s Day week so many people take a couple days off during this time. Also, earnings flow slows a bit with many of the major entities having reported by now. Thus, the pace of trading tends to slow- and will likely remain below normal this week barring a major news event of some sort. Thus, have particularly sharp focus when doing your trading as the opportunities will likely not be numerous and the losers will be that much more difficult to recover from.

Markets in Asia rebounded overnight after selling off Friday morning ahead of Wall Street’s open on the discount rate hike in the U.S. with Tokyo up 2.7% and Hong Kong up 2.4%. Prices are up about ¼% in Europe as Wall Street’s morning rally was digested. Oil and gold are up slightly with the dollar lightly mixed. Futures are quietly ahead. Ahead of semi-annual testimony given to Congress by Chairman Bernanke on Wednesday and Thursday this week, trading will likely remain quiet today with prices maintaining a small upside bias. Focus on relative strength plays in particular as well as sectors such as oils, techs, and financials.

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

XNPT- closed near a high in bouncing back from Thursday’s pounding

BRK/B- closed near a high

INTU- closed near a high after posting good earnings

SII- closed near a high amid rumors of being bought out by SLB

BIDU- closed near a high

X- closed near a high

HUM, UNH, AET- among private insurers taking part in a Medicare Advantage program; the federal government noted late Friday that there’d be a small increase in payments to these companies

JNPR- closed near a high

CAGC- closed near a high

SII- being acquired by SLB for .6966 shares of SLB for each SII share

ENDP- decent earnings

OIS- decent earnings



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

FSLR, CSIQ- closed near a low after posting disappointing earnings outlook

KNOT- closed near a low after posting terrible earnings

SLB- acquiring SII








Earnings:

MON FEB 22 BEFORE

CEG COG CPG

ENDP LOW OIS

PWR VCI VRX

MON FEB 22 AFTER

BRCD DRC FST

HMA JWN MELI

OKE RSH SM

XNPT




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