As a kid, I always questioned how it was possible much less the sanity of friends of mine who had ferocious colds/fevers and/or something even more sinister wrong with them could manage to do things like play in major academic or athletic events. Note, I am not talking about minor maladies like a small cold or a cut or hypochondriacs who think there is something wrong when that is not the case. I’m talking about the person with the borderline thrashed Achilles tendon who plays well in a basketball game or the leader of the chess team with a 101 degree fever but wins the big match. While I can (and will at some point) go into a riff about how some of these people become traders, the focus for the moment is on the market. I typed out a piece giving every reason in the book yesterday as to why the market could in theory sell off a bit and ended it with this: “There are a lot of reasons for a countertrend reaction this week; the next few days will likely tell the tale on the strength and likelihood of the maintenance of this 13 month roaring bull market.” Well, the market passed through yesterday with flying color’s. By the NYSE open yesterday, the euro had fallen below 1.35, commodities were down 1% plus across the board, Europe was showing 1% losses, and everyone was waiting for healthcare stocks to get drilled. Ne-ver Hap-pened. The market, legs and arms tied behind its back, managed to sport very nice gains by early afternoon (albeit on anemic volume). Now, there is of course no guarantee to anything, but I will say this much: as a day trade, I trade what I see. I always do. But as this incredible bull market rolls along, one must be aware of the tidal force of liquidity just simply overruling all news flow in this current atmosphere.
Markets in Asia were mixed overnight with Tokyo down 0.5% but Hong Kong up 0.3%. In Europe, the bourses are up about ¾% on average in recouping most of yesterday’s early losses on the heel of Wall Street’s reversal. Commodities are down about 1/3%. The notable feature this morning is heavy losses in European currencies with the euro piercing the 1.35 level and the pound just below 1.50. Those numbers will likely tell the tale today. The market is clearly OK with the 1.35 euro/1.50 pound level at this point. If these levels hold, the early gains in the futures are likely built upon. If however, the European currencies begin really breaking for no apparent reason, there’s going to be some selling pressure in all likelihood for the broader tape. Focus on the relative strength plays as well as the stocks in the news with some momentum trades certainly possible if the dam breaks on the currencies otherwise stay the course in being extremely selective.
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
PVH- decent earnings
ISSI- good earnings
FCX- closed near a high
CNC- reversed dramatically in closing near a high
IDSA- closed near a high after posting great earnings
WSM- closed near a high after posting great earnings
LPNT- closed near a high
WYNN, LVS- closed near their highs in a strong casino sector
ITMN- closed near a high
NKE- featured on “Mad Money” last night
PRGO- acquired infant formula manufacturer PBM Holdings; expects acquisition to be immediately accretive
TGI- buying Vought Aircraft; expects acquisition to be immediately significantly accretive
SQNM- upgraded by Lazard Capital
DVAX- announced positive safety data from Heplisav
AOS- raised earnings guidance
BPAX- positive leukemia vaccine results and second FDA orphan drug designation
APCVZ- received FDA go-ahead for Indomethacin for injection
Bad-The following stocks have bad news and/or a weak technical pattern
SOMX- share offering
MEE- major share offering
MNKD- closed near a low
SPWRA- closed near a low on continued weakness after announcement an accounting restatement Thursday afternoon
UNH, WLP- closed near lows
KBH- poor earnings
ONTY- temporarily suspending program for Stimuvax after a patient developed swelling in the brain
Earnings:
TUES MAR 23 BEFORE
CCL FUQI KBH
WAG
TUES MAR 23 AFTER
ADBE DRI JBL
PRGS 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
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