On May 14, following several discussions the previous day, I wrote a piece about a topic that seems to be very cut and dry from a pure logical standpoint. I literally pleaded for anybody who disagreed to comment and never heard any feedback- negative or positive. We had a 10 minute discourse on it in our morning call that particularly Friday. I asked orally if anybody disagreed from a logical standpoint with my main point to please comment. Silence. And yet, on a nearly daily basis, the main thrust of the piece is thrown into focus by what I consider to be some really inane comments. This was the piece:
http://epiphanytrading.blogspot.com/search?q=push+it+real+good
I am going to try to tackle this from another angle. I should first note that I’ve written many ‘getting back on the horse’ pieces if one finds themselves down money on a given day. But precious little is written about ‘winning’ thus I am going to give this another more forceful “go.” I’ve been fortunate enough to have had a career which has provided me with a means to put food on the table and a roof over the heads of my children. I’ve had some great years of trading whereby I’ve done significantly better than covering the bills so to speak. But as I’ve maintained for many years, the happiest day of my professional life will be the day I am able to walk out of my office and ever come back. Don’t get me wrong. Please don’t get me wrong. I am blessed with more friends than anyone I know and consider myself fortunate to know every single person in my office right now much less ostensibly everyone who walked in the door and/or chatted me up. I do not take lightly the fact that I’ve been fortunate enough to play a computer game for many years for income rather than a much harder vocation such as, say, washing the 32nd floor of the Empire State Building on a 14 degree day. But this isn’t about friendships or counting my (many) blessings. This is about having a goal and working toward it. For me, I yearn for the day when I don’t awaken at 5:15AM on a Wednesday morning and feel like I slept in much less a period where I am able to ‘give back’ much more than I do at present. Anybody reading this, I am sure, has different things they want in this world whether they be material, intangible, or significantly life-changing. Thus, in the scheme of things, does it make a difference whether one is ahead $1,000 or down $1,000 at 9:35AM? From both a macro *and* a micro vantage point, the answer is “no.” Nobody should change what it is they are doing except to change in accordance with the markets…but not their mindsets. By that, I mean if the market is presenting itself with multiple opportunities, take advantage of the opportunities without holding yourself back just because you happen to be slightly richer than you were a few minutes ago. So, why, why, why, why, why , why is it that people who are ahead, say, a very small $300-$400 at 9:45AM talk of leaving for the day and are not only admonished, but they are encouraged to do so?! Isn’t the ‘best’ trader the one who makes the most money? Isn’t a goal or an end to all of this (again, with mine doing the best I can now so I can eventually move on to what will hopefully be an early and fulfilling requirement)? How can I, for instance, settle for a good few minutes of action when the goal is not the day, but the career? So, really, if you are fortunate enough to get off to a good start to a trading day, think of it as a baby step to your ultimate goals…not a day ender.
Markets in Asia were mixed overnight. Tokyo rallied 1.4% on the weaker yen. But Hong Kong fell about 1% after China once again raised their reserve requirements in an attempt to stem surging capital inflows. Prices are moderately down in Europe with London down 0.4% and Frankfurt off 0.3%. The dollar is slightly stronger across the board with commodities slightly weaker across the board. Bonds had an aggressive sell-off yesterday and are extending those losses this morning as well with the 10-year yield back over 2.70%. Jobless claims came in generally as expected, the trade balance slightly better, and import prices in-line. Crude Inventories are out at 10:30AM with the Treasury Budget (-$140 billion) out at 2AM. The German-Irish debt spread has widened significantly to a new record level but that seems to be shaken off. Futures are ahead modestly as the market is shaking everything off in focusing on strength in selected retailers. For the day, look for it to be quite choppy with metals leading the way; when silver’s margin requirements were raised yesterday, it sold off in leading to a sell-off in other commodities as well and it fed on itself. The focus will likely be on the earnings plays, the casinos, components makers such as AKAM and LLNW, the metals/rare earths such as MCP, REE, and SLW, and the myriad of small-cap momentum stories from this morning and yesterday.
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
URS- decent earnings
WX- decent earnings
BSFT- closed near a high after posting great earnings
APEI- closed near a high after posting great earnings
BNVI- approved clinical development plan for Menerba
RL- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
MBI- poor earnings
TSLA- poor earnings
AONE- bad earnings
JOBS- bad earnings
IGT- poor earnings
LOPE- poor earnings
MDMD- closed near a low after posting poor earnings
ENOC- closed near a low after posting poor earnings
TNL- closed near a low after posting poor earnings
GSS- closed near a low after posting poor earnings
DF- closed near a low after posting poor earnings
CAAS- closed near a low after posting poor earnings
WG- closed near a low after posting poor earnings
ADY- closed near a low
TIVO- closed near a low after the US Appeals Court announced it’d again consider the TIVO-Dish DVR case
SLW, EXK- closed near a low as silver reversed yesterday
BLK- closed near a low after announcing a share offering
FSLR- closed near a low
VHC- closed near a low
FEED- terrible earnings
SMT- terrible earnings
CAGC- poor earnings
CPB- poor earnings
Earnings:
WED NOV 10 BEFORE
CSC M MFB
RL
WED NOV 10 AFTER
AAP BRKS CSCO
HMIN ZAGG
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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