WED. JUL. 28- Malaise

Yesterday, something occurred for a period of hours- this “something” has not been present in the markets for awhile. Thankfully, it is a word most of us have not used in awhile, but it is time to bust it out as we get ready to turn the calendar to the month of August: “malaise.” Yep. I dared to say it. Malaise. For several hours yesterday, the S&P 500 traded in a range of about four handles. For perspective, there were there several days in the last few months where almost every single five minute bar of activity had a range of four points! In a world of an ever-shrinking pool of investors- one in which 8 of every 10 shares traded on the NYSE are done by high frequency firms- many people are enjoying some much needed and much-deserved time off. Earnings season is still in full force, but we’re certainly in the latter half of it. The news flow overall has calmed. The market has had a huge rally. And it’s beautiful outside. Pick your reason. But whatever you pick, particularly in what has been a trading range market, the stretches of placidity are likely to continue through at least Labor Day. What can we as traders do about it? Ab-so-lu-te-ly nothing. Pick spots, have orders out there, but the fills will unfortunately become less and less frequent as we approach Labor Day. Bathing suits usually aren’t purchased in December in Manhattan and trading slows in late summer; it’s a cyclical business. Do NOT get me wrong. There will be some very active patches to come in the days ahead. I am just noting that when it's calm, it's going to be really calm. So, again, be ready when there is action and seize upon it but do not force things when oftentimes, there may not be much to do for long periods of time over the next few weeks.

Markets in Asia were strong overnight with Hong Kong up about 0.6%, but Shanghai notably rallied 2.2% with Tokyo even stronger up 2.7%. The gains failed to carry through to Europe, however, with the major indexes mixed as Paris is up 0.5%, but London is down 0.3% with Frankfurt off 0.5%. Oil is flat, gold is up a little, the dollar is quiet, and bonds are little changed. Futures were modestly higher, but lost all of their gains and more after poor durable goods data. For the day, look for a choppy environment with a modest downside bias. Focus on the earnings plays- particularly those near unchanged on the open, any relative strength play particularly with news as it’s a ripe environment for short covering, and sectors such as the drillers after a BP downgrade.

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

BRCM- decent earnings

NUVA- good earnings

ILMN- good earnings

DWA- decent earnings

BWLD- great earnings

SIMG- great earnings

CHRW- decent earnings

AAPL- closed near a high

ENR- closed near a high after posting earnings

ACE- decent earnings

FISV- decent earnings

LVS- good earnings

WAT- decent earnings

JNY- decent earnings

S- good earnings

REGN- extended antibody deal with Astellas

ARW- good earnings

COP- good earnings

Bad-The following stocks have bad news and/or a weak technical pattern

CEPH- poor earnings

NSC- poor earnings

PNRA- bad earnings

PMTC- poor earnings

CENX- bad earnings

WBSN- bad earnings

GPN- poor earnings

IGT- poor earnings

ITMN- poor earnings

TMO- closed near a low after posting earnings

RIMM- closed near a low

X- closed near a low after posting earnings

OXY- closed near a low after posting earnings

DNDN- closed near a low

SANM- closed near a low after posting poor earnings

HTCH- poor earnings

DJSP- announced it is suspending financial guidance

MEE- poor earnings

BA- poor earnings guidance

CVS- poor earnings

NEM- poor earnings

PFCB- poor earnings

GLW- poor earnings

IP- poor earnings

SLAB- bad earnings



Earnings:

WED JUL 28 BEFORE

ARW ATI BA

CMCSA COP CP

D EK GD

GLW HES HSP

ID IP JNY

MWV NEM NYB

PFCB PX ROK

S SEE SLAB

WAT WDR WLP


WED JUL 28 AFTER

AEM AKAM AMAG

AMP BMC CERN

CLF CTXS CVD

CYH DRC DRYS

ELY EQIX FLS

FMC GMCR GNK

LNC LRCX MYL

NETL NUS OI

OII ORLY PDLI

PXD RE RYL

SKX SYMC TER

TMK TSO V

VAR VRTX WLL

WLT

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