For those of you who love campy movies, "The Chase" is one of the campiest. It starred Charlie Sheen and Kristy Swanson and I shall quote the great Roger Ebert's review of it rather than trying to better the beloved movie critic: "" 'The Chase,' a movie named with unerring accuracy, takes place mostly in a car on a California expressway, where love blooms during a high-speed police pursuit. Once you grasp that premise, you know where the movie's going and more or less everything that is going to happen in it." Sheen kidnapped Swanson at a convenience store, they fall in love while racing towards the Mexican border and while I won't ruin the ending, let's just say reality was a trait left out of the flick. Now, in trading, a win is a win is a win. But there is such a thing as a bad win in an individual trade. Such an example occurred on the chatroom a week ago. Somebody called out ROVI after it had rallied 40 cents in minutes out of a tight range with no liquidity and no news in a neutral market. Unlike about the previous 11 set-ups in the same circumstances on that session which all would have resulted in losses, this one happened to work as ROVI popped a little more. The person who called it out obnoxiously asked the general populace if we’d seen the move (he of course did not do the same for the 11 previous calls he made that day with the same type set-up which proved to be wrong). I was and remain incredulous at his bravado. But the point here is that there is a reason there are certain rules to trading (as was shown once again as he happened to be right the 12th time….but wrong the previous 11 times). One of my personal major rules is that if a stock has ran a lot or sold off a lot- particularly for no particular reason and I have no idea what is going on- I always assume it is merely order flow or a news event I am not aware of and I stay far away from the stock- either way. In short, I don't chase it. So, as long as the markets remain in a low volume and low movement environment, be aware that this type of ‘chase’ is extraordinarily dangerous and being right once does not make up for the 11 times you’ll be badly wrong.
Markets in Asia were modestly lower overnight with Tokyo and Hong Kong down 0.3% each. In Europe, prices rebounded on the heels of Wall Street’s late afternoon rally with the bourses up about 0.5% on average. The commodities and currencies markets are quiet. The news backdrop is fairly positive with rumors of a quiet deal being made among the EU finance ministers not to let the Greek economy fail should that nation’s austerity measures falter. With a Fed meeting today, it’s going to likely remain very quiet through 2:15PM ET. Assuming nothing major comes out of the Fed, it’ll remain quiet overall but with a bit more activity. Look for the modest upside bias to stick throughout the session barring something unforeseen from the Fed.
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
CXG- closed near a high after rumors came out that it will be bought out by CNX
STJ- closed near a high after BSX announced it’d halt the sale of implantable cardioverter defibrillators
AMLN, ALKS- closed near highs after receiving a positive complete response letter for Exenatide from the FDA
WPI- received FDA approval for generic Cardizem LA
ATHN- indicated internal accounting review is now complete
MCHP- boosted earnings guidance
ICGN- reported positive results for ICA-105665 in patients with photosensitive epilepsy
SINO- closed near a high
LTD- announced special dividend and stock buyback
BLTI- announced FDA 510k) clearance of iLase personal laser for dental market
DVN, MRX- featured on “Mad Money” last night
Bad-The following stocks have bad news and/or a weak technical pattern
GKK- closed near a low after issuing terrible earnings
CNX- closed near a low after being rumored to buy out CXG
MDVN- poor earnings and cannot measure operating expenses for foreseeable future
MOV- earnings warning
HQS- earnings warning
SQNM- poor earnings and negative conference call
AMSC- closed at a new trend low
IOC- Antelope-2 well will need to be re-drilled
CFSG- poor earnings
DSW- poor earnings
Earnings:
TUES MAR 16 BEFORE
CFSG DSW FDS
TUES MAR 16 AFTER
DFS FMCN KONG
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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