I lived in Chicago for a number of years. Although I was never a Chicago Bulls fan, I always respected the fact that they were ridiculously good at the height of their best years in the late 1990’s. One year, they won something like 72 regular season games out of 82 played. By the same token, the 1998-2000 New York Yankees were very impressive as well with the 1998 team winning a then AL- record 114 regular season games. But here’s the thing- both the Bulls and Yankees did indeed win championships in their respective leagues the year that they had those monster seasons. But it did not preclude them from winning two more championships in each case. People did not wait around and wonder when it’d end. Instead, fans of both teams and both sports appreciated the great teams for what they were and expected them to win rather than lose. So why is it then that it is the polar opposite when it comes to the stock market? I mean, I get it to a degree- when you have Michael Jordan at the prime of his career, you’re less likely to worry about the Bulls going into the tank than you are when it comes to wondering if spiraling debt can take the stock market down. But really. There is no such thing as ‘overbought’ or ‘oversold.’ Just as great teams in certain times find a way to keep winning, so does the stock market. Indeed there are many reasons for the market to go up right now these last few days with one of the most glaring being that ‘the 2010 money chase’ may well be on. Basically, the fiscal year for mutual funds ends on October 31 and many jobs are on the line so performance can beget performance. But the bottom line is that there is no such thing as ‘overbought’ or ‘oversold’ when doing intra-day trading. Seemingly extended moves can always get more extended and indeed in phases like the one the market has been in for the last few days, the disbelievers tend to miss out- or worse yet- lose a lot of money.
Markets overnight were mixed in Asia with Tokyo down 0.3% but Hong Kong up 0.2%. In Europe, prices are a bit higher with 0.3% gains in London and 0.4% and Frankfurt. Currencies and bonds are quiet. Gold is down slightly, but oil is notably weaker by about 1%. Futures are slightly weaker early on. Housing starts (550K estimate) and Building Permits (560K estimate) are due out at 8:30AM. For the day, it’ll likely be quiet with a downside bias based on the fact that a lot of the recent leaders are ticking slightly lower. Sounds strange, but every morning recently (the last seven mornings), they’ve been higher. The FOMC rate decision meeting results at 2:15PM will rule the day with prices likely remaining in a tight range within that downside bias. Focus on all of the recent momentum leaders for A-B-A2s, the few companies that reported earnings today, and big cap techs and financials (particularly after 2:15PM today).
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
AAPL- closed near a high (at a new all-time high)
VHC- closed near a high
ROVI- closed near a high after signing a contract with AAPL
OSBC- closed near a high
MMR- closed near a high after getting a further capital infusion from FCX as well as acquiring assets from PXP
BIDU- closed near a high
MA- closed on a high
WYNN- closed near a high
TNAV- signed an agreement with S
FTNT, RDWR, NTGR, NICE- mentioned on “Mad Money” last night
AMSC- closed near a high
INFN- closed near a high
EBIX- closed near a high
VVUS- announced positive top-line results from a two-year study of Qnexa
AAWW- great earnings guidance
Bad-The following stocks have bad news and/or a weak technical pattern
HCN- stock offering
HTS- stock offering
CYS- stock offering
BORN- closed near a low
CAG- poor earnings
SNDK- downgraded to neutral at Sterne Agee
Earnings:
TUES SEP 21 BEFORE
AZO CAG CCL
FDS
TUES SEP 21 AFTER
ADBE CTAS DRI
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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