I have a pretty good sense of humor. Well, at least I like to think I do! See, wasn’t that funny? But I also have a passionate part to my personality and a very serious strain as well…and when one combines the passion with the seriousness, it can be an extraordinarily powerful combination. This is how I have always treated day trading since my career started over 13 years ago. I used to laugh it off a little when people from random strangers to close family members would say things to me on a day in which the averages were moving up or down 5% like “Well, you’re your own boss. You can leave work whenever you want.” This is not true. My boss happens to be the harshest, meanest, cruelest, and most masochistic boss that there is. The name of my boss happens to be “Mr. Market.” See, the market dictates what I do and when I should be paying strict attention. I have begged, pleaded, and cajoled over and over and over and over and over and over and over and over and over and over and over and over and over and over and over again these past few weeks to anyone and everyone who trades for a living whether orally or in this blog space of the most recent earnings season of the importance of being here when needed. When its not earnings season, I tend to come in slightly later and leave slightly earlier. But the market does not open at 9:30AM ET nor does it close at 4PM ET. During the heavy periods of earnings season (when my income tends to be the most substantial as the newsflow is usually the heaviest), I do 3-5 hours of preparation before the 9:30AM open (including several trades) in terms of going through reams of earnings data and a myriad of stories. In the afternoons, I am going through the biggest stocks of the day, the afternoon earnings flow and news, doing research for the next day in addition to aggressively trading. My best seven trades this week took place at 8:02AM Monday morning, 7:38AM on Tuesday morning, 6:27PM ET on Tuesday evening, 8:06AM on Thursday morning, 10:10AM on Thursday morning, 6:01PM Thursday evening, and 7:08AM this Friday morning. What this shows is that if I want to retire at a relatively early age, I need to be in the office- and prepared at that- when the markets and news flow are busy. Would I rather not set my alarm for 4:45AM? Would I rather eat dinner at 5:30PM? Of course. I go home each afternoon/evening and spend every minute possible with my beautiful kids and wife without so much as even talking about work. But this much I know: one needs to be around for trading opportunities much less to be properly prepared each and every day. Sometimes, life gets in the way. In the last year, I personally witnessed the birth of my daughter and the death of my father-in-law. I’ve had some physical issues as well. So, I do understand. This is a masochistic game…but it is just that: a game. There are going to be days like yesterday when the market is active, one can blindly listen and follow, and do phenomenally in stocks such as AIG. But let’s be crystal clear: confidence and preparation are the two biggest ingredients for success at day trading (much less anything). And they are intertwined. If you don’t do homework and don’t study past trades and you’re not around to get a feel for the action, you cannot be sure as to what to do which leads to a confidence issue as well. Now, I don’t know much. I am the first to admit that. But I have been doing this for over 13 years full-time so I’ve seen a lot. And I can tell you this: You can be the nicest person on the planet. You may have an inordinate amount of personal crises. But, much much more often than not, if you come in late (I am working by 5AM during earnings season and 6AM when its not earnings season; I start from home and then soak things in during my drive in), leave early (I never leave when at all possible before the major news of the afternoon is out, namely 6:30PM during earnings season and 5:15PM when its not earnings season), and/or randomly appear at work- particularly if you don’t take the time to do proper analysis and preparation, your chances of sustained success at day trading in this electronic age are ostensibly zero.
Markets in Asia were hit overnight with China giving back 2% and Hong Kong following in-tow. European markets were down as well until the jobs report came out and they have now turn uniformly positive. Commodities are down and the dollar is sharply higher. The jobs data came in better than expected with the unemployment rate notably stronger than estimated. Futures are sharply higher and on a sunny Friday, no reason to stop. Look for the action to occur at the beginning of the day and for things toflatten out rapidly. Trading once again will be concentrated in earnings plays and microcaps. Get the bulk of your trades in between 7AM and 10:30AM as people filter out early to enjoy what will hopefully finally be a nice summer weekend in the New York area.
Watch list:
08072009Eriklist.zip
Reiterating-
Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
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
CQB- good earnings
HANS- good earnings
CROX- good earnings
CSC- good earnings
ACS- good earnings
NVDA- good earnings
FSYS- good earnings
INT- good earnings
MCHP- good earnings
AINV- good earnings
BZH- good earnings
CBS- good earnings
MXIM- decent earnings
MRT- mentioned positively on CNBC last night
OPXA- received licensing deal from Novartis
C, AKO/B, DUF, FCN- mentioned positively on “Mad Money” last night
FBN- closed near a high
AIG- good earnings
RBA- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
OSK- share offering at 25
LEAP- bad earnings
SQNM- bad earnings
EOG- bad earnings
IPI- bad earnings
AGO- bad earnings
VRSN- bad earnings
CAL- share offering
EAT- closed near a low
BGC- closed near a low
PXP- closed near a low; offering 15 million shares at 24
PMI- bad earnings
NAT- poor earnings
Earnings:
FRI AUG 7 BEFORE
ABK AIG ARD
BAM BECN EIX
LINTA LPNT MGA
MIR NAT NVAX
PMI RBA SNH
WCRX XEC XTEX
XTXI
Good luck today.
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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