One of the major obvious factors in determining whether to do a trade is the immediate-term direction of the stock market. That sounds very obvious and even the newest of the newbie traders understands that it’s a lot easier to earn money from buying a stock in a market that is rising or shorting a stock in a market that is falling rather than vice versa. With that in mind, there are certain types of plays and stocks that as long as the market is generally flat when one takes a step back that can be trades regardless of market direction from minute-to-minute. For instance, if on the same day that the Dow was up 200 points, a company (with a stock that closed at a brand new high the day before) warned on its earnings, announced its chief auditing firm had resigned, announced the CEO resigned, and noted it’d have to restate its earnings, it’s a pretty good bet that the stock of the company being discussed would decline anyway. I mean, just because everything is getting better for everyone else, it doesn’t mean that a stock of a company with all that horrible news is going to go along with the upward tide. The same is true of individual stocks/trades. Such an example occurred on Thursday March 11th when AIG after a huge run-up and a story out of Taiwan indicating another unit was about to be sold began giving way intra-day and got negative. AIG was in its own cocoon at that point. The market was grinding higher but not only was AIG relatively weak, it was so disparate from the market that it went anyway. I bring this up only because we are beginning to see more of these types of trades with more speculation going back into the market. Exaggerated moves can take place in select issues which have little if anything to do with the overall tape. I certainly don’t advocate seeking these plays out, but when one comes up, don’t be afraid to push the button.
Markets were higher across the world on Friday on the heels of a decent jobs report. The government released the numbers early Friday; bonds immediately declined with the 10-year yield racing towards 3.95%. This morning, Tokyo was up about 0.5%, but most of the rest of Asia and all of Europe was closed for various holidays. Futures are higher across the board state-side. With the weather absolutely beautiful and a dearth of participants with many gone for vacations and Europe shut down, look for a very slow day. Prices likely stick to the upside albeit on anemic volume. Focus only on stocks in the news big-cap wise (track AAPL’s numbers from their product launch over the weekend) as well as several small caps with news as well as relative strength/weakness plays otherwise if you’re gonna be at your desk, keep one eye to the markets but the other to busywork you can do to keep yourself from scalping.
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
CRAY- awarded $45 million supercomputer contract from National Nuclear Security Administration
FCX- closed near a high
HWG- closed near a high after posting great earnings
GPOR- closed near a high
ARD- received takeover over from SD for $2.50 in cash plus 4.7771 shares of SD
RPRX- requested a lift of clinical hold on its Proellex
Bad-The following stocks have bad news and/or a weak technical pattern
UEPS- closed near a low
GPN- total reversal after reporting earnings; closed near a low
RINO- closed near a low after reporting earnings
APWR- closed near a low
RIMM- closed near a low after reporting earnings
ENCO- delaying the filing of its 10-K
CCME- closed on a low
TASR- poor earnings guidance
SCR- China’s State Food and Drug Administration found various asundry activities took place at a SCR facility
Earnings:
MON APR 5 BEFORE
none
MON APR 5 AFTER
none
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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