Yesterday morning was something else. I tried shorting FCX at 54.85, missed, and watched it decline 30 cents in the next 30 seconds. About 1 ½ minutes later, I tried shorting FFIV and missed only to watch it decline 75 cents in the next minute. In the interim, the three trades I did do netted me a small loss of about $500 or so. Well, that is the perfect recipe for having much much much much much bigger losses very very very very fast. There are certain mistakes that one (certainly I) can make which can be deemed as stupid. Buying more and more shares as a stock is plunging tends to be a recipe for disaster. So does buying a stock after it has rallied two points in two minutes as there is a high propensity for at least an ephemeral reversal. Ditto for trying to buy large blocks of superliquid stocks and expecting giant moves. However, when missing great moves all the while doing things which are wrong in practice albeit trades which have historically worked, this is not a time to self-destruct psychologically but to bear down. Following, this terrible cluster, I captured a lot of a NFLX move starting around 9:50AM, a nice piece of the NOG move upward, and a respectable piece of the sell-off in BBY in turning my small early loss into a four figure session. The moral: if everything is going wrong, that’s one thing. But if you’re ‘just’ missing the ‘right’ trades and not doing anything overly (and overtly) stupid, realize that discipline and studying past mistakes will inevitably win out over time.
The story was the same for the bulls this morning- Tokyo closed ahead 1% and Hong Kong 1.1% overnight with Frankfurt and London ahead about 0.3% each. Oil is up slightly, gold down slightly, and the dollar is marginally stronger across the board. There are a number of Fed speakers today with Kocherlakota having spoken at 5AM, Fisher at 7:30AM, Evan due to speak at 8:30, Lockhart at 9:15, and Plosser at 12:15. GDP (3.2%) is due out at 8:30 and the University of Michigan Confidence Index (67) due out at 9:55AM. Futures are nicely higher on the heels of good earnings by Oracle (ORCL). The market strength will likely give way a little today on simple profit taking ahead of the weekend but on light volume and in a choppy fashion. The focus will likely be on tech in the news (RIMM, ORCL, NFLX), casinos on an LVS upgrade, smaller caps which have been the subjects of rumors (EBIX), and relative weakness plays specifically off of the opening bell.
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
RHT- closed near a high after posting great earnings
TLB- closed near a high after posting great earnings
LPTH- closed near a high after signing two new distributors in China
AMZN- closed near a high
AAPL- closed near a high
WYNN, LVS- closed near a high
MEE- closed near a high
JOYG- closed near a high
VHC- closed near a high
COOL- closed near a high
CRM- closed near a high
VMW- closed near a high
PSTR- closed near a high
ORCL- decent earnings
A.CN- good earnings
BODY- good earnings
WTSLA- decent earnings
ATEA- good earnings
ENB, PKI- featured on “Mad Money” last night
Bad-The following stocks have bad news and/or a weak technical pattern
BBY- closed near a low after posting bad earnings
SCHL- closed near a low after posting bad earnings
EBIX- closed near a low after being mentioned negatively in a newsletter
RIMM- terrible earnings
SMOD- poor earnings
DRI- poor earnings
FINL- poor earnings
ACTG- share offering
HS- share offering
HDY- share offering
NFLX- Starz is planning a 90-day window for some NFLX content
PANL- 5 million share offering priced at 46
Earnings:
None today
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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