Day Trading Thoughts For Tues. Dec. 9

E

erikrkolodny

ET Sponsor
With the advent of the CEO’s of the ‘big three’ automakers on CNBC almost ‘round the clock along with discussions as to exactly who will get TARP monies, it was interesting to come across this article:

http://money.cnn.com/2008/12/05/real_estate/bail_outs_fair_or_foul/index.htm

This exact same topic was featured in an article on this blog several weeks ago:
http://www.epiphanytrader.com/blog/2008/11/who-gets-what-anyway.html


With articles such as the CNN piece headlining their business news site on Friday morning, it is worth taking a moment or two to readdress this matter again now that it is becoming more relevant by the day. There is an old saying: “What’s good for GM is good for America.” Is that true anymore? It will be horrific if one of the big three autos go under, but in all likelihood, it will be horrific for just the people who lose their jobs along with the regions of the country most affected as in Detroit. Plants from companies such as Toyota would likely increase in time whenever the American economy exits its stupor as quite frankly, demand for General Motors automobiles is not what it was, say, 30 years ago. More on point, should the government have a right to play G-d in deciding who gets what? Evidently so. Putting that aside, can their actions ultimately be bad for banks in the long run? Let’s put it this way as the reality of the article penned on this blog begins to sink in: where exactly is the line drawn? If someone is overextended on their credit because of their 2nd home in the Hamptons, why should they get easier credit terms on their debt? The answer to that one is simple: it is much more prudent for a ban to at least collect something on its loan rather than let the loan go bad because now the bank is forced to become a property owner in a declining real estate market on a property it does not want as they’d be the ones selling in order to recoup their loan. This does two things: it keeps the cycle of real estate in decline that much more extended. But, it makes the average debt holder of a mortgage or a car loan wonder why they should not be entitled to the same reduction in loan terms as the people overextended on their debt got to receive. If banks don’t bend, you get a lot of very angry people (and voters at that). And if they do bend, profits that many analysts foresee for fiscal 2009 and 2010 for banks will not materialize particularly when taken in combination with the fact that banks don’t want to loan out the monies they do have in this recessionary environment. For day traders, it is something to ponder as earnings season approaches next month as the focus on this topic will become increasingly intense as banks forecast their fiscal 2009 earnings; this will likely keep the volatility in the financials rather high for some time to come.

Overnight, stocks in Asia were mixed in narrow percentage bonds while European bourses are up about 1% across the board at this early writing. Oil, currencies, and bonds are all quiet. The market is shaking off multiple warnings from some major companies with futures not down all that much. Look for the rally to continue early on with selected strength in the financials. However, things seemed a bit capped today after the huge run-up and the bad news out there so look for a relatively calmer session with trading on both sides of unchanged.


Reiterating-If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf 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

POT- among the fertilizers closing near a high

SPG, VNO- among big REIT’s to close on their highs

FSP- closed very strong after multi-day run near a high; likely a buy thru Monday’s 13.48 high if/when it gets there

KAZ, HEV- both closed at highs on buy imbalances; both should be down today, but buy both thru unch if they approach unch

REG- closed strong; looking for high above Monday’s 41.48 high if it opens down

WRI, DEI, DRE, DDE, SLG, DRH- all among smaller REIT’s which closed near highs; if momentum continues, look to buy each of them around or above yesterday’s highs

WEC, FO, NAT, GPX, KMP, BMY- all mentioned positively on “Mad Money” last night

AZO- decent earnings

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

HIG- had major reversal; looking to short thru Monday’s 14.70ish low in a weak environment else A-B-A2 back up

MET-warned Monday morning; tried to rally, but failed. Likely a short thru yesterday’s 29.70ish low in a weak market

FDX- warned very badly for 2009

PFG- had a reversal; likely a short thru 17.50 (Monday’s low) in a weak market

CHK- had terrific conference call, but stock was up a lot yet not what it could have been. Looking to short thru Monday’s 13.75 low when/if it gets there

RIG- switching headquarters to Switzerland from the Cayman Islands; this will force the company to leave the S&P 500

HTS- announced share offering

TRGT- failed phase II drug trial

NSM- warned abominally for next quarter

DHR- warned for the fourth quarter

TXN- warned terribly for quarter

BRCM- warned, but it could have been much worse

Watch list:
12092008Eriklist.zip

Earnings:

TUES DEC 9 BEFORE

AZO KR MTN

PBY TTC

TUES DEC 9 AFTER

ADCT COO OXM

PLL SAI

Good luck today.

Erik R. Kolodny
 
Very nice. Took some thought, some effort.........

A lot of times, we 'see' things, and because of this or that, don't cognitively process the information.

I watched Met and Hig fail yesterday, but did not thing of them as a short because that squeeze was imprinted on my short term memory. I'll take another look.

Again, you are to be congratulated for being constructive.

Keep it up, if you have the time. You will develop a following and some Karma.

Nice. Really nice.
 
Very thorough, thanks for touching base on Asia. I think that is a very important criteria in todays market uncertainty
 
No need for alias (1st post) to compliment your work. If your work is good people will like and find it (in this case it is good, so far).
Quote from JMAC2066:

Very thorough, thanks for touching base on Asia. I think that is a very important criteria in todays market uncertainty
More...
 
Quote from USAtrader:

No need for alias (1st post) to compliment your work. If your work is good people will like and find it (in this case it is good, so far).
More...

Alias = False name

He posted as Erik R. Kolodny, which is his real name. Let keep this thread academic and pristine., opposed to the normal screaming matches. I get the "X has responded to a post that you subscribe to" so I check.

I have been following Erik for some time now. My results have been positive. His thoughts are of value.
 
Quote from hittinbidz:

Alias = False name

He posted as Erik R. Kolodny, which is his real name. Let keep this thread academic and pristine., opposed to the normal screaming matches. I get the "X has responded to a post that you subscribe to" so I check.

I have been following Erik for some time now. My results have been positive. His thoughts are of value.
More...

thank you. I agree 100%. If you don't like it, don't read it. Let one pure sown seed bloom on what has become the 'confrontation station'.

If he anoints himself as the Son of God, I'll hit the complain button. I promise.
 
Notice my reference. It was to an immediate response by 1st time poster, to a 2nd time poster. That aspect is suspect. Reread my post, it was complementary.

Like I said however, I agree with you, Erik's work product seems good (based on 1st post on thread), so this sort of thing is not necessary.


Quote from hittinbidz:

Alias = False name

He posted as Erik R. Kolodny, which is his real name. Let keep this thread academic and pristine., opposed to the normal screaming matches. I get the "X has responded to a post that you subscribe to" so I check.

I have been following Erik for some time now. My results have been positive. His thoughts are of value.
More...
 
Quote from erikrkolodny:

With the advent of the CEO’s of the ‘big three’ automakers on CNBC almost ‘round the clock along with discussions as to exactly who will get TARP monies, it was interesting to come across this article:

http://money.cnn.com/2008/12/05/real_estate/bail_outs_fair_or_foul/index.htm

This exact same topic was featured in an article on this blog several weeks ago:
http://www.epiphanytrader.com/blog/2008/11/who-gets-what-anyway.html


With articles such as the CNN piece headlining their business news site on Friday morning, it is worth taking a moment or two to readdress this matter again now that it is becoming more relevant by the day. There is an old saying: “What’s good for GM is good for America.” Is that true anymore? It will be horrific if one of the big three autos go under, but in all likelihood, it will be horrific for just the people who lose their jobs along with the regions of the country most affected as in Detroit. Plants from companies such as Toyota would likely increase in time whenever the American economy exits its stupor as quite frankly, demand for General Motors automobiles is not what it was, say, 30 years ago. More on point, should the government have a right to play G-d in deciding who gets what? Evidently so. Putting that aside, can their actions ultimately be bad for banks in the long run? Let’s put it this way as the reality of the article penned on this blog begins to sink in: where exactly is the line drawn? If someone is overextended on their credit because of their 2nd home in the Hamptons, why should they get easier credit terms on their debt? The answer to that one is simple: it is much more prudent for a ban to at least collect something on its loan rather than let the loan go bad because now the bank is forced to become a property owner in a declining real estate market on a property it does not want as they’d be the ones selling in order to recoup their loan. This does two things: it keeps the cycle of real estate in decline that much more extended. But, it makes the average debt holder of a mortgage or a car loan wonder why they should not be entitled to the same reduction in loan terms as the people overextended on their debt got to receive. If banks don’t bend, you get a lot of very angry people (and voters at that). And if they do bend, profits that many analysts foresee for fiscal 2009 and 2010 for banks will not materialize particularly when taken in combination with the fact that banks don’t want to loan out the monies they do have in this recessionary environment. For day traders, it is something to ponder as earnings season approaches next month as the focus on this topic will become increasingly intense as banks forecast their fiscal 2009 earnings; this will likely keep the volatility in the financials rather high for some time to come.

Overnight, stocks in Asia were mixed in narrow percentage bonds while European bourses are up about 1% across the board at this early writing. Oil, currencies, and bonds are all quiet. The market is shaking off multiple warnings from some major companies with futures not down all that much. Look for the rally to continue early on with selected strength in the financials. However, things seemed a bit capped today after the huge run-up and the bad news out there so look for a relatively calmer session with trading on both sides of unchanged.


Reiterating-If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf 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

POT- among the fertilizers closing near a high

SPG, VNO- among big REIT’s to close on their highs

FSP- closed very strong after multi-day run near a high; likely a buy thru Monday’s 13.48 high if/when it gets there

KAZ, HEV- both closed at highs on buy imbalances; both should be down today, but buy both thru unch if they approach unch

REG- closed strong; looking for high above Monday’s 41.48 high if it opens down

WRI, DEI, DRE, DDE, SLG, DRH- all among smaller REIT’s which closed near highs; if momentum continues, look to buy each of them around or above yesterday’s highs

WEC, FO, NAT, GPX, KMP, BMY- all mentioned positively on “Mad Money” last night

AZO- decent earnings

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

HIG- had major reversal; looking to short thru Monday’s 14.70ish low in a weak environment else A-B-A2 back up

MET-warned Monday morning; tried to rally, but failed. Likely a short thru yesterday’s 29.70ish low in a weak market

FDX- warned very badly for 2009

PFG- had a reversal; likely a short thru 17.50 (Monday’s low) in a weak market

CHK- had terrific conference call, but stock was up a lot yet not what it could have been. Looking to short thru Monday’s 13.75 low when/if it gets there

RIG- switching headquarters to Switzerland from the Cayman Islands; this will force the company to leave the S&P 500

HTS- announced share offering

TRGT- failed phase II drug trial

NSM- warned abominally for next quarter

DHR- warned for the fourth quarter

TXN- warned terribly for quarter

BRCM- warned, but it could have been much worse

Watch list:
12092008Eriklist.zip

Earnings:

TUES DEC 9 BEFORE

AZO KR MTN

PBY TTC

TUES DEC 9 AFTER

ADCT COO OXM

PLL SAI

Good luck today.

Erik R. Kolodny
More...
 
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