Even the best baseball players on the planet can get a base hit about 3 out of every 10 times at the plate. The best Broadway performers can have an off night. The best day traders tend to be right about 59 out of every 100 times. I am right about 55 of every 100 trades I make which is not too horribly bad…as long as I can make the 55 times stand up for the 45 times I am wrong which is something I've somehow been able to do for almost 15 years. Well, yesterday’s market prognostication (while not a trade) was not even close to right. If you remember, yesterday, I wrote this: “Don’t look for a lot of excitement today with most external markets relatively docile. Prices will probably straddle either side of unchanged with low volume and news.” Well, I was right for a few minutes in that the markets did open barely higher and drifted back toward unchanged. But, really, about the only way I could have been more wrong would have been to call for a 275 Dow point sell-off. There were two takeaways that I have from the bad mistake. First, I have a lot of pride, but have no problem admitting when I am really wrong. One of the major keys to trading is recognizing your own failings and owning up to them. The second thing career-wise is even more important- rectifying the aforementioned tenet. You see, had I been shorting all the way up, I’d have lost a tremendous amount of money. So, what I did instead was execute a couple of very early trades and then…I totally missed the initial 50 Dow point blip higher in watching the market rally and educating myself/reprogramming my belief. From there, I quickly realized my initial thought was wrong and knew trapped shorts would cover thus I adapted accordingly for the rest of the session. The moral of the story: when you make a mistake trading-wise, quickly admit it and then quickly rectify it in your own trading.
Markets overnight continued to rally worldwide with Tokyo up 2.8% and Hong Kong ahead 1%. The gains in Europe are a bit more moderate with the bourses having rallied nicely yesterday in helping to spark the move on Wall Street with Frankfurt up about 0.7%. Oil is up ¾% with gold and the dollar generally flat. Bonds are a tinge stronger. Futures are resoundingly flat at this early writing. I’m going to go with what I said yesterday in that markets likely won’t move dramatically but the bias does seem to be to the upside for sure with nothing having been given back futures-wise early on. Track bonds and the yen for clues as the day progresses, i.e. if the 10 year backs off from 3% somewhat rapidly into the afternoon, there will be a bit of a give-back but it’s not likely. Focus on story stocks like MSG, relative strength plays, retailers such as TGT after releasing same-store sales data, and the banks to see if they can hold up yesterday’s nice gains.
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
TSCO- pre-announced positive earnings guidance
MSG- closed near a high on speculation Lebron James will sign with the New York Knicks
STT- closed near a high after pre-announcing earnings to the upside
CLF- closed near a high
POT- closed near a high
BIDU- closed near a high
RIMM- closed near a high
AAPL- closed near a high
GS- closed near a high
AMZN- closed near a high
WYNN- closed near a high
FSLR- closed near a high
RIG- closed near a high
UAUA- closed near a high
BUCY- closed near a high
X- closed near a high
SLB- closed near a high
FCX- closed near a high
V- closed near a high
IBM- closed near a high
PNC- closed near a high
FFIV- closed near a high
CREE- closed near a high
NFLX- closed near a high
CMI- closed near a high
JKS- closed near a high
ANF- good same-store sales results
Bad-The following stocks have bad news and/or a weak technical pattern
DRWI- warned on its earnings outlook
FDO- closed near a low after posting terrible earnings
SKH- closed near a low after losing a court case which could force the company into bankruptcy
FCN- closed near a low after posting poor earnings
CISG- share offering
HAST- closed near a low
Earnings:
THURS. JUL. 8
None 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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