Ever been to a horse track “just” five minutes late so you miss placing a bet? Ever thought (or been involved with someone who thought) that there was just enough distance in a left turn lane while driving a car…but there wasn’t and it results in a horrific ka-boom? Ever cooked something and either put too much of an ingredient in or cooked it too long (or too little) and it tasted horribly? What do all of these things have in common? They require precision. The activities require precision and the timing requires precision. So does day trading- particular when one is attempting to catch lightening quick movement. It is never an exact science as to where to get into a stock, but amazingly close if done efficiently. Typically, there are two types of entries I do. The first is if a stock has a massive offer with a pattern I have been following- particularly at a high of the day at a round number. For instance, let’s say ABCD is in a range of 22-23 for the day and there are 48,000 shares offered only on NYSE at 23. Typically, when does not see a ‘1” preceded by ‘NSDQ’ or ‘ARCA’ it means that the likelihood of that massive refreshing itself is quite low. So, I’ll take the 23s as of the 48,000 share offer. If, however, NSDQ is offering with the NYSE, I’ll oftentimes wait until I see the 23’s totally clear…and I’ll pay 23.01 to 23.02 at most. These two types of entries are mechanical and ingrained in my mind to do. However, where many traders get into trouble is in being impatient in getting in at 23 when they should be waiting or they get in at 23.06 when they should not chase. Generally, I sell half of my position at the first pause of the move…so if this stock races to, say, 23.09 and gets stuck, I am selling half between 23.08 down to 23.06/05. So, I am a few cents ahead…but the person that chased is already down money on the position. I bring all of this help because as day traders have traded earnings plays and microcaps mainly these last few weeks, many players just want in so badly that they aren’t paying attention to where they are getting in. So, the three morals here: 1) make sure there are no reloaders; if not, get in quickly…if so, wait. But 2) wait only for two cents at most in general. If you overpay, as in everything in life, there is a consequence to have overpaid. And finally, 3) if you miss an opportunity, don’t sweat it. Others will present themselves. For every time you curse yourself for not chasing to enter, there are several instances in which you are better off for not doing so. Realize that and truly learn it…and it’ll help ingrain that much more confidence into your trade entries.
Markets in Asia were generally flat overnight, but the energy shift was quite negative in Europe with the bourses down a little more than 1% on average after negative news from UBS (down 9% as of this writing) overnight. Commodities are also down a bit after their huge run-up. The futures are indicated sharply lower this morning. People are ingrained right now to buy dips so look for a little rally shortly after the open. The strength of that rally will set the tone for the day. If the upblip is muted, the markets will likely have a low volume reversal sell-off. If the sell-off does not gain traction from the get-go, the rally will reassert itself strongly in a massive short covering wave. The first scenario is more likely ,but I really hope the 2nd one works because so many people are waiting for a spot to short and their fear of being wrong (again) would drive a strong rally up. Focus upon the earnings and microcaps once again.
Watch list:
08042009Eriklist.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
CEPH- its Treanda can be used to treat chronic Lymphoctic Leukemia
APC- decent earnings
WPI- received FDA approval for generic Toprol XL
CHK- decent earnings
RE- great earnings
HOLX- neutral earnings, but decent guidance
OSK- closed near a high after its new contract announcement
LZ- closed near a high
CVGI- closed near a high
IBM- closed near a high
BX- closed on a high
ONTY- closed near a high
DGW- good earnings
IPHS- good earnings
CPL, CIG, TWX- all on “Mad Money” last night
NEP- closed near a high
TSTC- closed near a high
MELA- the FDA formally accepted the company’s pre-market approval for MelaFind; this will expedite the review and processing
CTSH- good earnings
CVS- decent earnings
CAM- decent earnings
HGSI- raised to buy at Think Equity with a 26 price target
VRX- good earnings
DBD- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
HLF- terrible earnings
STEC- great earnings, but filed stock offering
WMGI- poor earnings
TEN- island reversal
SIRO- 7.5 million share offering
VMC- poor earnings
ADM- poor earnings
EMR- poor earnings
EXPD- poor earnings
AYE- bad earnings
BRY- bad earnings
RDC- bad earnings
MLM- bad earnings
SPG- bad earnings
Earnings:
TUES AUG 4 BEFORE
ACOR ADM ARM
AYE BBG BRY
CAM CAR
CTSH CVS DBD
DHI DNR DUK
ED EMR ETR
EXPD FTR HCP
HEW HNT HW
ICE JOE LPX
MAC MLM MVL
NI PNW RDC
SE SPG TRW
UFS VNO VRX
WTI
TUES AUG 4 AFTER
ACAS AMMD BID
BMC BRE CBL
CEPH CNO CRL
CSTR CTRP DEI
DTG DVA ERTS
FR FRT GCA
GGC HCC JACK
JLL KFT MOLX
NFP OKE ONXX
PGN PL PPL
PXD SOLR TRLG
TSRA UDR UNM
VCLK WFMI XCO
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
No comments:
Post a Comment