I want to follow-up on one point from a piece I did yesterday about “paying retail.” This time, I want to focus more on exiting. It is often said that traders tend to cut their profits short and let their losses run. I’ve discussed many times in this space and on our chat room the import of not building positions and exiting quickly when wrong if you are an immediate-term trader. But in one of the great paradoxes of all-time, traders tend to have hope when positions are against them and fear losing gains when they have them so they inevitably exit too quickly. It’s basic human nature. We as a species much less as traders want to protect what we have when acquiring more yet when we’re losing we as the eternal optimists most of us are rationally or irrationally hope/think/hope/believe/hope that we’ll get our money back. But it should be the opposite. When one is wrong and one ignores his/her uncle spot, usually, there’s a reason to have had the uncle spot in the first place and the loss gets worse. But on the opposite yet just as important a place on the spectrum is that it is asinine just to post bids or offers when a stock is going your way if for no other reason than to protect your winnings. All this can do is limit your gains. The question to ask yourself is this: if I had no position in the stock, what would I do? What I do is I let the market tell me what to do. If I am right and a stock goes my way, I exit half of my position as soon as the stock pauses. But I do the same thing twice more with the other quartiles of my shares in letting the market dictate what to do rather than guessing. By doing so, it allows me to better maximize a move. If the thing is going my way, why would I randomly throw out a price when it could easily go a lot more? All this does is contain my profits. So, please, when wrong, exit. But when right, let the market tell you what to do rather than guessing what to do else you’ll leave a lot of money on the table time and again.
Markets overnight were lower throughout the world on the Egyptian strife. Tokyo was down 0.5% and the bourses throughout Europe were down from 0.3% in London to almost 1% in Paris. Gold is down slightly, oil is up a bit, and the dollar remains quietly strong. Futures are down a bit after yesterday’s rally. Michigan Sentiment (75.5) is due out at 9:55AM ET. For today, the strong Bernanke put is fighting tooth and nail with the chaos on the streets in Cairo (which will likely dramatically worsen today). Whether it spreads to the Suez Canal is the key; that will likely set the day’s tone. Otherwise, prices will likely remain choppy with no major bias. The focus will be on the earnings plays (CMG, et al), stocks with major news (MCP), and all of the news plays yesterday which closed strong for a shot at short covering today (OPEN,MOS, et al).
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
CLB- closed near a high after posting earnings
ALXN- closed near a high after posting earnings
WFMI- closed near a high after posting earnings
SWI- closed near a high after posting earnings
GT- closed near a high after posting earnings
IPGP- closed near a high explosively after posting earnings
EQIX- closed near a high after posting earnings
LMLP- closed near a high after posting earnings
SCI- closed near a high after posting earnings
TLEO- closed near a high after posting earnings
RAS- closed near a high after posting earnings
DIOD- closed near a high after posting earnings
SFSF- closed near a high after posting earnings
RIMM- closed near a high after it was said that RIMM is planning Playbook software to run GOOG's Android
BIDU- closed near a high
POT- closed near a high
RIG- closed near a high
CREE- closed near a high
ICE- closed near a high
DSCI- closed near a high
SCON- closed near a high
CTXS- closed near a high
REGN- closed near a high
CVLT- closed near a high
NTES- closed near a high
QLIK- closed near a high
ESV- closed near a high
JNPR- closed near a high
FTO- closed near a high
MDS- closed near a high
CMG- great earnings
FALC- great earnings
STMP- great earnings
OPEN- closed near a high and was featured on “Mad Money” last night
CEPH- decent earnings
DVA- decent earnings
GRM- decent earnings
PNRA- great earnings
RNWK- decent earnings
NBIX- decent earnings
VITA- received 510k clearance for Vitoss bimodal bone graft substitute
Bad-The following stocks have bad news and/or a weak technical pattern
AKAM- closed near a low after posting earnings
IFF- closed near a low after posting earnings
TRGL- closed near a low
MCP- closed near a low
WYNN- poor earnings
EXPE- poor earnings
KFT- poor earnings
IM- poor earnings
MNKD- poor earnings
NILE- terrible earnings
RSG- poor earnings
LF- poor earnings
KOOL- poor earnings
OPTR- share offering
NOK- announced a broad strategic partnership with MSFT…but no far-reaching strategic changes
MCP- share offering at 50
Earnings:
FRI FEB 11 BEFORE
BPL DISCA MDC
WBC
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
No comments:
Post a Comment