On a day like yesterday when the markets hovered around the unchanged level for most of the session on low volume, one emotion comes to the mind of most 9not all, but certainly most) traders: “frustration.” Either people were sitting on their hands doing nothing or trying to get in/out rapidly with more shares because the moves weren’t as exaggerated yesterday as compared to recent weeks. The people who sat on their hands of course grow antsy and aggravated due to not seeing anything to do while people trying to move in and out of a market not moving tended to spin their wheels. As I fell into the former category in not trading a whole lot yesterday, I had three main thoughts to try to remediate the trading tedium over and above the normal “find other things to do while at your desk in case something happens” tag I always maintain. First, traders (including myself) can be upset as they want about the relative paucity of movement, but there is absolutely nothing we can do about it. There are going to be days like yesterday which require “No-Doze” pills in the trading world. Just like we have precious little control over 1,000 point Dow days, we have just as little control over the days in which the market holds near unchanged much of the session. The sooner that is accepted, the better mentally. Secondly, patience is always a virtue but especially so on a day like yesterday. It’s not the world’s worst thing to pick out only the best spots and to hold things slightly longer as long as the trades are within the framework as to whatever it is you’re trying to do. Finally, remember how you felt as well as how little money you put in your wallet on a day like yesterday when things are moving and you’re having a good day. If during a busier day next week as earnings season kicks into gear, you find you’re having a fine morning, keep plugging away as the anecdote to the slower sessions. Remember the frustrating feeling and let it keep you hungry. So, as with any negative emotion, try to focus on the positive side of frustration and what you can do to combat it when the time is right rather than trying to create something out of nothing. And realize- on a day like yesterday in particular- you are not alone if you walked away feeling like you wasted a day of your life...which you most certainly did not as long as you learned from it.
Markets in Asia overnight were down overall with Tokyo off 0.1%, Hong Kong 0.2%, and Shanghai almost 2%. But the trend shifted in Europe on the heels of good earnings on Wall Street with the bourses ahead anywhere from 1.3% to 1.7%. Currencies are quiet with gold and oil both up almost 1%. Futures are up sharply. There seems to be nothing stopping this immediate-term rally amid sudden optimism about earnings. For the day, there likely won’t be a ton of movement although it should be more volatile than yesterday with plenty of stock stories around. Focus on the earnings plays, the smallcap biotechs in the news, the momentum movers from the last few days (for reversals and A-B-A2’s) and the drillers on the myriad of news from BP.
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
AA- decent earnings
CSX- decent earnings
NVLS- decent earnings
CVX- decent earnings guidance
THLD- announced two preclinical presentations on its clinical stage TH-302 drug
SNDK- closed near a high
AMZN- closed near a high after being upgraded by Blair
WY- closed near a high after announcing a special dividend and conversion to a REIT
IFLG- closed near a high
MBI, AIG- investor Bruce Berkowitz announced large stakes in both companies
DSTI- closed near a high
DIN- closed near a high after a positive “Barron’s “article
PNG-mentioned on “Mad Money” last night
VVUS- the FDA noted that VVUS’s Qnexa resulted in “significant” reductions in body-weight among patients in clinical trials
Bad-The following stocks have bad news and/or a weak technical pattern
BMTI- 5 million share offering
MOS- closed near a low after announcing it may need to close a mine due to an environmental lawsuit
FCX- closed near a low
CLF- closed near a low
ADS- closed near a low after a negative “Barron’s “article
ID- warned on revenue outlook
AMED- earnings warning
CVLT- earnings warning
INFY- poor earnings
Earnings:
TUES JUL 13 BEFORE
FAST INFY
TUES JUL 13 AFTER
ADTN INTC YUM
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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