Once again, the Blogger software is not working properly so I will send the watch list out via e-mail as I did the last few days.
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In what has overall been an amazing time for stock trading (the last two weeks notwithstanding), quite possibly the most astounding story of the year took place in the day trading world a few weeks ago on June 24, 2009. On that Wednesday morning, MTM Technologies (MTMC) issued a press release in which it indicated it had attained a “multi-million dollar” enterprise-wide award to provide data to the U.S. Department of Navy. The stock which closed at 1.39 on Tuesday on volume of 34,000 shares exploded almost 300% to 5.25 on Wednesday afternoon on over one million shares of turnover before it was halted. There was nary a peep from the company until Thursday morning when the company issued another press release in which they indicated the previous day’s release had not been authorized by management. The last sentence of the amended press release was the most telling and relevant note of all: “MTM does not anticipate that this contract will have a material impact on its financial condition or results of operations.” So, the stock should have gone right back down to Tuesday’s level since there was no net new news when all was said and done, right? Wrong-o. The stock re-opened at 2.66, fell to 1.98 and then more than re-doubled to 4.45! So, what happened? The best guess is that many people long the stock decided they were just going to hold it. Yet many people short the stock when faced with the happy prospect of easy money took their profits. However, since the stock had such low liquidity and there was such a seller’s strike, there was nobody left to buy from so the stock raced higher. Even if this analysis is completely wrong, it does not impact my main point: if you are a day trader, you should be looking to get in and out of a stock. You do not want to become an analyst; you should be acting on what you see. We all complain about situations in which we could have/should have made more money. But we don’t often talk about the situations where one could have lost a tremendous amount of money. This MTMC case is certainly a crystal example. If one was short this MTMC on Thursday, one could have asked why the thing was rallied…it is a legitimate question. But, in the end, it doesn’t matter…if the numbers on that computer monitor are not in accordance with your liking, you exit and start anew. Stocks are things; they are not people and have to answer to nobody.
Markets in Asia were nicely higher overnight with the average index up about 1.5%. The trend followed through to Europe with their markets up about ¾% across the board. Oil and gold are strong with the bonds and dollar steady. Wal Mart announced solid earnings tthis morning and the Paulson BAC news was good, but it has been offset a bit by poor jobless claims data. Still, the stage is set once again for an up day overall as long as the market holds in the morning; if not, all bets are off with the most likely scenario being a choppy day on both sides of unchanged. The strong tone should hold most of the day with the focus upon the smaller stocks, the earnings plays, and the financials.
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
BAC, COF, RF- John Paulson took stakes in each of these companies
UTA- great earnings
HRS- great earnings
CACI- good earnings
ANW- good earnings
SRX- good earnings
CVGI- closed near a high
CRY- positive FDA news yesterday; closed near a high
TOL- closed near a high on great earnings
ADCT- closed near a high on great earnings
STWD- closed on a high after its initial public offering yesterday
ADP, PAYX, EGO- featured on “Mad Money” last night
URBN- decent earnings
DPS- great earnings
GIL- good earnings
WMT- good earnings
WW- good earnings
BPAX- positive phase III LibiGel safety data
TPI- received Chinese SFDA approval for various tablets
Bad-The following stocks have bad news and/or a weak technical pattern
LDK- bad earnings
AAP- bad earnings
BYI- bad earnings
CHLN- bad earnings
MIDD- terrible earnings
YSI- share offering
SOLR- share offering
EM- closed on a low after its initial public offering yesterday
EL- bad revenue miss specifically
KSS- bad earnings
URS- bad earnings
NTES- poor earnings
Earnings:
THURS AUG 13 BEFORE
ABV BGG DPS
EL GIL KSS
RGLD SPPI URBN
URS WMT WW
THURS AUG 13 AFTER
ADSK APP DAR
DV JWN PVX
RRGB
Good luck today.
Epiphany Trading, LLC
http://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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