TUES. FEB. 9 - Watching Iran

February 11, 1979. The author of this piece was not even five years old at that point yet did understand something major was going on even if he didn’t quite understand it. As February 11, 2010 approaches, it’s important to study history and its implications for the future. That fateful day in 1979 can arguably be called the worst day in the history of the modern incarnation of the Iranian people- an opinion formed not only on various readings, but also on personal conversations I’ve had with Iranian exiles. The return of Ayatollah Khomeini to Iran from France set in place a dictatorship which has eliminated human rights and laid witness to many people who have been murdered. The repressive regime has remained in place for all of this time in the stead of what was generally a 2,500 year Persian monarchy. The reason I bring this up now is because the 31st anniversary of the beginning of the regime change will occur on Thursday and will likely be very noisy. In the last few weeks, the peoples of Iran have taken to the streets in increasing numbers and increasing frequency. Well, an anniversary day tends to bring out massive crowds and it sets the stage for a potential major event there. Also, President Mahmoud Ahmadinejad has typically made major announcements on the 11th. While he is quite bombastic for those that follow him, there is the off chance that something of consequence could be said or done particularly in-line with the recent announcement of an enriching of uranium in its reactors. So, for day traders, keep your eyes on that country and its politics as the 11th approaches and especially on that particular day as well as the few days that follows as it is quite possible that something of consequence may well occur in Iran in the next few weeks.

Markets in Asia were mixed overnight with Tokyo down 0.2% and Hong Kong up 1.2%. The European markets are up about ¼% to ½% across the board. State-side, however, futures are very strong. European Central Bank Chairman Jean-Claude Trichet abruptly changed his plans to leave Australia and return to Europe for an EU summit on the economy on Thursday. This has led the rumormongers to speculate that a rescue package for Greece will be initiated at the meeting. Consequently, oil and gold have turned around into positive ground and the euro is particularly strong with the yen notably weak. As of this writing, S&P futures have recouped all of the ground lost yesterday afternoon. Look for rumor-driven trading all day in thinner volume than normal ahead of the approaching Northeast snowstorm. Focus on relative strength plays and news plays in which the stocks should be up, but are dwindling lower in A-B-A2 fashion. Be careful, however on the ‘gap up’ open. The natural inclination for traders is to short stock into the gap, but if there is any credence to these rumors, there is no reason for this particular gap to be filled today.

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

HAR- great earnings

AMGN- announced that Denosumab demonstrated superiority over NVS’s Zometa in phase III head-to-head prostate cancer trial

ADCT- decent earnings

AXS- decent earnings

AGU- good earnings

ANR- good earnings

BIIB- good earnings

CTSH- good earnings

KO- good earnings

NYX- good earnings

PHM- decent earnings

UBS- decent earnings

TCK- decent earnings

CAM- decent earnings



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

ERTS- terrible earnings

HIG- bad earnings

LNC- bad earnings

VECO- poor earnings

CPT- poor earnings

DDR- share offering

NLY- share offering

WTU- announced Friday afternoon that the trust will dissolve as of March 1; closed near a low

CHDX- closed near a low after announcing poor earnings

AAPL, AMZN- closed near lows

GS- closed near low of day

SWI- poor earnings

AMAG- closed near a low despite having a positive conference call regarding one of its drugs Friday afternoon





Earnings:

TUES FEB 9 BEFORE

ACM AGCO AGU

ANR BIIB BJS

CAM CE CGEN

CTSH CVH ENER

IACI KO MLM

NYX PHM TAP

TIN UBS VMC

VSH

TUES FEB 9 AFTER

BIDU CERN CXW

DEI DIS EOG

LGF TCO UDR

XL



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