Before the time I became an adult (but then did I ever become an adult?) and had truly lazy time, I’d occasionally watch a college basketball game- particularly one in which the team of my alma matter (Indiana University) was a part of. I also would watch the press conferences thereafter just to watch the body language of the team. One thought that’d go through my 20-25 year-old mind was how different the body language could be even if raw numbers were the same regarding the outcome of the game. For instance, if Indiana was down by 20 and lost by 3 albeit to a team they should have beat, they’d at least feel like they were doing something right based on what they were saying and how they looked (‘they’ being the coaching staff and the players). Conversely, if they were winning by 15 against the same team and ended up losing by 3, the reactions, verbiage, and performance the next game were often different. Now, don’t get me wrong- I understand that having a win taken away causes different emotions than almost coming back and winning a game. But after a little time has passed before the next game, it’s important to realize that the history books will read that they lost by three points in both situations. It is the exact same in trading. In the last two losing days I had, I finished down a nearly identical amount of money. Yet I had been down a lot more before coming back in one of them whereas I had a good day going in the other and gave it up and more. I couldn’t have felt differently emotionally. But by the beginning of the next trading day, the emotions of the previous session- in both cases- were forgotten. It took me many years to learn that while one should always learn from one’s trades- good and bad- numbers are numbers so there was/is no need to let anything fester that I shouldn’t. It allowed me to focus solely on the next day’s action- and both times, I had very good days following the downers. So, I hope everyone out there can realize in less time than it took me- the ultimate journey for most traders is to earn enough money so you don’t have to work anymore. Along the way, there are going to be great days and bad days. The trick is to not let the emotion of a comeback – or a giveback- to overwhelm you to the point of not properly focusing on future trades.
Markets were slightly higher in Asia overnight with Tokyo up 0.2% and Hong Kong ahead 0.5%. Europe is quiet with London up 0.3% and Frankfurt down 0.1%. Gold is back above the $1,400 level in trading ahead almost 1% with oil flat. The dollar is a bit weaker across the board. PPI came in as expected with retail sales ex auto stronger than expected (1.2% vs 0.6% expected). The FOMC rate decision is expected at 2:15PM today. News flow for industries has been varied this morning with BBY posting awful earnings yet things like the banks were talked up a bit last night on “Mad Money.” Look for a quiet day through the FOMC meeting with a slight positive bias; it is highly likely there will not be any surprises so things likely remain quiet after 2:15PM as well. The focus should be on the retailers with the awful BBY news out, biotechs with news from big caps like AMGN to small caps like INHX, volatile China plays, and the myriad of companies with share offerings to see if they can shake off an increased amount of stock coming to market.
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
AMGN- positive Xgeva news
GXDX- said to seek sale of company; has hired Barclay’s
ONVI- closed near a high
MELI- closed near a high
EW- closed near a high after announcing positive earnings guidance
MGIC- closed near a high
TMO- closed near a high after announcing an acquisition
AGU- in talks to sell AWB Commodity Management businesses
CGEN- positive CGEN-15001 rheumatoid arthritis results in animal model trial
LIWA- received new copper anode orders
MTXX- to be acquired by H.I.G. for $8/share
ISS- priced IPO at high end of range…10.8 million shares at 13
SAFM- great earnings
Bad-The following stocks have bad news and/or a weak technical pattern
INHX- negative phase II trial results of FV-100
DANG, YOKU- closed near their lows
AMSC- closed near a low on a negative “Barron’s” story
FFIV- closed near a low
RIMM- closed near a low
NFLX- closed near a low
LNDC- share offering
LCI- share offering
ICO- share offering
HMIN- convertible notes offering
YMI- share offering
MILL- closed near a low
MOS- closed near a low
DORM- closed near a low
BBY- terrible earnings
Earnings:
TUES DEC 14 BEFORE
BBY FDS SAFM
TUES DEC 14 AFTER
None today
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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