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Monday, April 4, 2011

MON. APR. 4- The Pause Before The Storm

One of my favorite feelings occurs on warm summer afternoons. No, I'm not talking about laying down on a hammock reading a book...after all, I do have two young children! Instead, I am talking about how a few clouds roll in replacing the puffy white ones with the wind still albeit a few birds chirping. We all know what happens next. A few cracks of thunder followed by cooling rain. But that feeling of the inevitable storm coming...the anticipation...it's exciting. However it also brings out in me the adrenalin but a nervous energy of not being able to do anything. And that, everyone, is what this week holds barring some unforeseen circumstance. There is very little economic data and only a handful of companies are due to report their earnings. So movement becomes a bit more muted on even weaker volumes than normal. It is, however, a great shot to do some homework for the earnings season to come and truly hone skills at making selective trades as moves can and will be sharp for people craving action. Thus be ready for the relative paucity in opportunities, again, barring something out of the ordinary but also be prepared for the onslaught of activity to come later this month.

Markets were generally higher in Asia overnight with Hong Kong posting a particularly strong showing in trading up 1.5% with Tokyo up 0.1%. In Europe, prices are lightly mixed across the board. Oil is up slightly with gold up about 0.5%. The dollar is slightly stronger. Futures are up marginally with no major economic nor earnings news out. The session will likely be a quiet one with selected opportunities like in the rare earths, big cap tech, the airlines, and the exchanges.

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

CBE- closed near a high on vague takeover rumors

ALEX- closed near a high amid a story that Pershing has taken a stake in the company

VRX- closed near a high

VHC- closed near a high

INHX- closed near a high

WPRT- closed near a high

SVN- closed near a high

TDSC- closed near a high on positive comments from a brokerage house

RRR, GIII- featured on “Mad Money’ on Friday

IDRA- decent phase I IMO-2125 data

OPTR- upgraded at Bank of America Merrill Lynch

MCP- acquiring controlling stake in an Estonia facility

VVUS- positive Qnexa data presented at the American College of Cardiology Annual Meeting

DEER- reported “significant” growth momentum in first quarter


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

FFIV- closed near a low on negative comments from a brokerage house

RBN- closed near a low on negative comments from a brokerage house

CDTI- closed near a low after posting poor earnings

RECN- closed near a low after posting poor earnings

KKD- closed near a low after posting poor earnings

CPX- closed near a low

SYNA- closed near a low

RVBD- closed near a low

LUV- negative reaction to the pressurized plain problem over the weekend

OVTI- removed as a long-term idea at JP Morgan

RVSN- cut earnings guidance

Earnings:

MON APR 4 BEFORE

None today

MON APR 4 AFTER

SCHN


Epiphany Trading, LLC
www.epiphanytrading.com

Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President

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