A rather long time ago, a friend of mine (not me, I promise) who is otherwise uber-intelligent did something pretty stupid. He went to the barbershop for a haircut as his hair was slightly long. When the barber asked him if everything was as he liked it, he asked for a little more to be cut in the back and the front. The request was granted. Now he felt it was slightly even. So more came off. Before he knew it, he was almost totally bald. There are distinct times that doing absolutely nothing and taking the hand one is dealt is absolute right thing to do. By simply not being a perfectionist, my friend would have had (almost exactly) the haircut he wanted. The same is true in the day trading arena. I had to miss the start of trading on Friday due to circumstances way beyond my control. When I looked back, I noted that the Dow fell almost 100 points in mere minutes just after the bell- an otherwise wonderful opportunity. As frustrating as that was (and it was very frustrating), when I commenced trading around 1PM, the pace had slowed for the day. In fact, from 1PM-4PM, the NASDAQ traded in a range of eight points. You know what I did? Very little. I traded less than 10,000 shares and walked away $100 richer. What took me many years to understand is that when the markets are good, one has to go full throttle. When the market is slow- no matter one’s personal circumstances- one has to go much slower. It is that type of environment where many people get into trouble because they churn themselves up in taking many small losses and leave the trading desk poorer and angry. Basically, it’s the good trading markets/years that can make people a terrific living…it is the stasis type of environment that knocks most traders out of the game.
Markets in Asia were quiet overnight with Tokyo closed and Hong Kong ostensibly unchanged. Markets in Europe are stronger overall with the DAX up 1.1% and the FTSE up 0.7%. Oil is up slightly, gold another ½%, and the dollars and bonds are quiet. Futures are nicely ahead on continued optimism over recent economic numbers as well as a mini-merger Monday. The NAHB market index is out at 10AM with an expectation of 13. President Obama has an hour forum on CNBC today at 12PM. Thus, look for a quiet day with a modest upside bias. The focus will likely be on small biotechs in the news, the various stocks being acquired or rumored to be acquired, and the relative strength plays (particularly stocks which closed near their highs on Friday).
Reiterating-
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
SFUN- wonderful IPO; closed near a high
SFSF- closed near a high
LOPE- closed near a high
NTGR- closed near a high
PEGA- closed near a high
FTNT- closed near a high
GSM- closed near a high after posting earnings
JOBS- closed near a high
MSPD- closed near a high
CO- closed near a high
THO- closed near a high after announced an acquisition of Heartland Partners
CHTP- positive phase III Northera trial results showing benefits for hypotension
ID- Safran bid $12/ share cash for the company
NZ- IBM bid $27/share for the company
DFS- decent earnings
LEN- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
MEE- closed near a low after warning of a slower outlook
CLF- closed near a low
ARNA- closed near a low after the FDA rejected its lead drug
JPM- closed near a low
PSBH- closed near a low
Earnings:
MON SEP 20 BEFORE
DFS LEN
MON SEP 20 AFTER
None 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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