I love love love love love love love baseball. Love it. I could watch 10 hours of the sport on TV in a day and not get bored. My fantasy baseball league is my one diversion from life. And don’t worry for you non-baseballphiles out there. This is not a piece about the finer points of the game. Rather, this is about the feeling I get in the hours leading up to Opening Day. Many people get a little ‘spring fever’ type adrenalin earlier than now. Not me. Tax season and quarter end trading when news flow is slower tends to dampen that for me (combined with what is usually very cool weather throughout the month- today’s terrible weather in the Northeast notwithstanding). But the feeling of seeing the red, white, and blue bunting at baseball stadiums across the country, the knowledge that many sunny days are on their way, and the lengthening of the afternoons gives me a bit of an intra-year re-birth every year. It’s also right around this time of year that I tend to evaluate how I’ve done so far this year, what has changed both with me and the markets, and most relevantly- I seek to reenergize myself as we had into 2nd quarter earnings season. How have I done so far? Not bad. I had a better January and February than March (despite a pretty good day yesterday) but that was also because news flow (and volume) was much heavier in the first two months of the year. But at least as of this writing, I am on pace for a respectable year. What has changed? The algorithms have become much more noticeable on the positive delta days as well as the lower volume days because volatility is not as present. They have also become pervasive in the 11AM ET-3PM ET timeframe many calmer days. When the markets have had down days, movements have been much faster- and smoother. We’ve seen Libya, Japan, and Portugal. We’ve seen QE2 and a wildly resilient tape. And what’s to come as the weather gets warmer? A budget impasse. More trouble in the Mid East. More QE2 (and worries about it ending). A pretty good earnings season. Most important, I always have a little surge of adrenalin at the beginning of January. Well, as the baseballs begin flying today, I have that same surge of adrenalin today. Spring is a season of renewal and hope- moreso than any other. So, evaluate, study, and become even more doggedly determined on what is to come as the next month or two progress.
Markets in Asia were a bit higher overnight with Hong Kong and Tokyo ahead 0.4%. The trend is slightly weaker in Europe on worries about Ireland with Frankfurt down 0.1% but Paris off 0.5%. Gold is flat with oil notably about 1% higher. Jobless claims data came in slightly weaker than expected with PMI (69.0) due out at 9:45, Factory Orders (0.3%) at 10AM, and Feddies Lacker and Tarullo speaking today. Markets are down on the Ireland concerns. Look for a very choppy day on the last session of the quarter with some decent intra-day movement in individual stocks. The focus will likely be on the fertilizers, the automakers in the news (TSLA), the reaction to the Sokol story (BRK/B), and the casinos on LVS’s Macau issues.
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
OXM- closed near a high after issuing great earnings
PPG- closed near a high after issuing great earnings
QIHU- closed near a high on the day of its successful IPO
RAX- closed near a high amid collaboration with DELL and EQIX
AMIE- closed near a high
WPRT- closed near a high
CRM- closed near a high
FFIV- closed near a high
BVX- closed near a high
FSYS- closed near a high amid positive buzz on the clean energy stocks after a speech from President Obama
DNDN- according to “ESJ,” Medicare proposed coverage of DNDN’s prostate cancer treatment
ENDP- closed near a high amid vague takeover rumors
IDCC- closed near a high despite announcing a senior convertible notes offering
PTIE- closed near a high after a positive brokerage mention
SURW- closed near a high after setting a CapEx plan and declaring a quarterly cash dividend
MAKO- received pact for 11 Makoplasty sites from Hospital Management Associates
AMCF- decent earnings
SYMX- announced major investment by China Energy
TSLA- upgraded to “Overweight” at Morgan Stanley
Bad-The following stocks have bad news and/or a weak technical pattern
MOS- poor earnings
GMR- poor earnings and announced a share offering
BRK/B- Buffett’s top lieutenant resigned
ABAT- closed near a low
EPOC- closed near a low after posting poor earnings
LSE- share offering
CELM- possible discrepancies of company’s banking statements
NXPI- 30 million share offering at 30
LVS- being investigated by Hong Kong’s securities regulator for its Sands China division
Earnings:
THURS MAR 31 BEFORE
KMX LWSN
THURS MAR 31 AFTER
GPN KKD
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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