Somebody recently made an appearance in the middle of the day in our chatroom and asked why the drillers were up on the session. Let’s forget the fact that serial perpetrators of randomly appearing at work at random times indicate (to me anyway) a complete lack of preparation much less chance of succeeding at a trading career. The more important thing here over and above the lack of doing any homework whatsoever is an ability to understand how trading works. And this goes for many people (including myself in the early part of my career…much less at the present at times!). Yes, there was of course a specific reason why the drillers happened to be rallying that particular day (which was discussed on that morning’s blog, forum, and morning call). It should be known and not asked at 9:39AM ET so as to be properly ready. But overall and above the ignorance, even if you don't know what is going on, why would anyone fight the tide? Even if you think that the entire Gulf of Mexico will be engulfed with oil before this mess is over with, if the rig stocks much less British Petroleum (BP) are rallying on any given day and you are a day trader, you will lose heavily if you short the stocks as they rally intra-day. There is a huge difference between investing (you may be right over the long-run) and trading (you can be very wrong over the next two hours or two minutes). Thus, this is but one real-life example of suspending any sense of disbelief; the numbers reflecting where stocks are trading tell the true tale- always.
Markets overnight rose throughout the world on the heel of the strong gains on Wall Street yesterday. In Asia, Tokyo was up 1.7% with Hong Kong ahead 1.2%. The gains aren’t quite as fierce in Europe as markets rallied with Wall Street into their close yesterday; gains range from 0.2% in Germany to 0.8% in London. Oil is down almost 1%, gold is flat, and the euro is marginally stronger against the dollar following a good day yesterday for the euro. In the U.S., futures were down modestly most of the overnight, but the losses accelerated after horrible retail sales data this morning. For today, look for some profit taking overall after the big gains of yesterday in a relatively narrow range on low volume. Most of the action will take place in the morning as traders leave early for the weekend with a focus on the drillers and the big caps. Fairly vanilla, but with little news flow, that’s how it is 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
NSM- decent earnings
FNSR- decent earnings
BP, APC, DO- closed near a high in a very nice rebound
POT- closed near a high
AAPL- closed near a high
BHI, SII, SLB, FTI – closed near highs
SWN, RRC, DVN- closed near highs
BUCY, JOYG- closed near a high
CAT- closed near a high
APA- closed near a high
SYUT closed near a high after posting great earnings
ARST- good earnings
FCX- closed near a high
CLF- closed on a high
WYNN- closed near a high
WEN- Nelson Peltz considering proposing an acquisition transaction of Wendy’s/Arby’s
BGH- to be acquired by BPL at a ratio of .7 share of BPL for each BGH share which values BGH at around 41
Bad-The following stocks have bad news and/or a weak technical pattern
GS- closed off of its low, but never got traction yesterday
DELL- established a $100 million liability fund to help settle litigation brought against it by the federal government some time ago
Earnings:
None today
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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