TUES. MAR. 1 - Being Creative

My wife loves the excitement of gambling. Whether it's playing the slot machines or heading over to the craps table, the thrill of it gives her great joy. I am the opposite. I hate hate hate hate hate hate to lose so the thought of throwing coins into a machine and pushing buttons for hours on end (with the odds of me losing money quite high) just does not pass for my kind of entertainment. But on point, I do like making plays that can be quite lucrative when the odds are pretty good. For instance, there was actually an Oscars exotic bet the other night that one could make as to whether the leading actress winner would cry during her acceptance speech. I reasoned that if there was a surprise winner, there was a decent shot the winner would cry. So rather than betting the field against the favored Natalie Portman (a $100 bet on Natalie Portman would have yielded $6 based on Oscar odds), if I thought someone else would win it, the bet that the winning actress would have cried out of joy and shock would have been a decent way to play it. I bring this up because it is this type of thinking that I try to bring to my trading and encourage everyone else to do as well. It's not just a matter of looking at numbers or charts and trying to make sense of it. As I've mentioned repeatedly in this space, a high knowledge base is key which requires time before and after normal market hours to prepare and study past trades. Well, what I do is try to utilize the information in a creative manner in a way I feel can be profitable. For instance, if a stock like AAPL splits 10 for 1, although it shouldn't matter, the stock usually opens higher the day after the split particularly if the tone of the overall market is good. However, if the stock breaches unchanged, it almost just as nonsensically has an immediate-term sell-off as the new smaller holders quickly unload their shares. So my only intra- day trade (after learning how big the split is, studying the market, and knowing the effective date of the split) is to not guess as to where it'll open but to short it thru unchanged if a stock which split opened higher. Harking back to my original idea, the thought is as such: know your stuff...but try to use the information in a manner which most people don't think about (yet one that is very simplistic in nature) and you'll have an amazingly high chance of garnering a living at day trading.

Markets overnight were higher throughout Asia with Tokyo up 1.2%. Movement is a bit more muted and mixed in Europe with Frankfurt up 0.4% but London down 0.1%. Gold and oil are both higher (almost 1% each) with bonds down a bit and the dollar muted. Futures are up once again in continuing the recent immediate-term rally in shaking off oil gains. Construction Spending (-0.6%) and the ISM Index (60.5) are due out at 10AM with auto and truck sales to be reported throughout the day. Bernanke also delivers testimony at 10AM today. For the day, prices are likely to be more muted than yesterday with an eye peeled toward what Bernanke is saying and another toward commodities. The commodities should have next to no correlation as has been the case the last couple of days unless the gains become exacerbated. The focus will be on the casinos, earnings plays, biotechs in the news such as FRX, and the banks on the FITB subpoena.

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

SONS- great earnings

NVAX- received flu-vaccine contract with US government

LO- a U.S. advisory study indicated menthol cigarettes haven’t been proven to put smokers more at risk for tobacco-related diseases than unflavored cigarettes

GSM, LLNW- featured on “Mad Money” last night

BCOND- closed near a high after signing a contract with Northwestern Energy for flywheel energy storage program

TGIS- closed near a high

VRTX- closed near a high

NBL- closed near a high after receiving a Gulf of Mexico drilling permit

BRK/B- closed near a high after posting earnings

MRX- closed near a high after settling a lawsuit with TEVA

JOYG- closed near a high

ARGN- closed near a high after announcing an agreement to purchase the majority of W.E.T. Automotive Systems

FRX- announced FDA approval of Daliresp as a treatment to reduce the risk of COPD exacerbations in patients with severe COPD

AZO- decent earnings

BPI- decent earnings

FIG- decent earnings

SODA- decent earnings

TECD- good earnings

PSTI- reported positive pre-clinical data from muscle injury study

Bad-The following stocks have bad news and/or a weak technical pattern

RXII- share offering

YOKU- terrible earnings

EXM- poor earnings

URS- poor earnings

DGI- poor earnings

VVUS- poor earnings

WRC- poor earnings

BID- poor earnings

RST- poor earnings

EOG- share offering

HCN- share offering

QPSA- closed near a low

AIG- closed on a low

AMZN- closed near a low on a brokerage downgrade

FSLR- closed near a low

SFY- closed near a low

RBCN- closed near a low

MCOX- closed near a low

YRCW- closed near a low after announcing a restructuring which will involve share dilution

LVS- received a subpoena related to foreign corrupt practices and announced it’d be suspending several projects in its 10-K

SOL- bad earnings

LINE- share offering priced at 38.80


Earnings:

TUES MAR 1 BEFORE

AZO BPI BYD

FIG SODA SOL

TECD

TUES MAR 1 AFTER

DNDN GAME JOE

MBI MDR NKTR

PAY QLIK SGMS

SINA SNDA TIVO


Epiphany Trading, LLC
www.epiphanytrading.com

Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President