Day Trading Thoughts For Tues. Feb. 3

[erikrkolodny]

There was a tiny article on page A8 of the Sunday (January 31) “New York Times.” Why it was so tiny and why it has gotten such little press is something that is beyond my limited intellectual capacity. On Saturday, the Chinese premier Wen Jiabao said this: “Whether we will buy more U.S. Treasury bonds, and if so by how much- we should take that decision in accordance with China’s own need and also our aim to keep the security of our foreign reserves and the value of them.” He noted that he felt a stable yuan was in the best interest of the world as well. At this moment, the Chinese U.S. Treasury securities holdings account for approximately 17% (or about 1/6) of total foreign ownership of US Treasury securities. The imbalance of economics has been startling; in essence, the Chinese government has propped up the U.S. economy by lending money to Americans- who technically are borrowing from the relatively poor citizenry in China. This imbalance of course will not go on forever. It has, however, been a great schematic for the Americans and Chinese to both operate in for many years. The American economy could keep on going while China was able to keep its growth rate in line by lending out as much money as possible (with interest of course). The problem is that when this trend reverses, it can be devastating to the American economy. It’d reverse if the Chinese economic growth rate stalled simply because the Chinese would want to prop their own economy up with their own money (and American interest on the debt). Furthermore, it would cause interest rates to soar state-side and spark massive inflation because of the dearth of demand for U.S. treasury securities. Of course, we cannot forget as well that the Japanese are actually the largest holders of U.S. debt so this would have serious consequences for their economy as well. For day traders, it is an addendum to yesterday’s commentary as a reason that interest rate bond yields soared last month and certainly, it is something to be mindful of as Chinese economic data dribbles out as their New Year’s week concludes in the immediate-term much less for the foreseeable future.

Stock prices were down around 1% in Asia and up marginally in Europe. Oil, bonds, and currencies were all stable. Futures are quiet as well. With yesterday showing a mixed close as financials were generally down, but techs up, it shows there is a little support for equities. As futures were up sharply overnight, there is a little precedence for some gains today. Look for an attempted sell-off early, but nothing seemed to have much legs yesterday and I don’t think it will today yet there is no huge impetus to buy either. Thus, look for a quiet day overall, but likely with an upside bias.

Reiterating-
Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
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

ELN, BIIB- a CNBC report indicated that Tysabri can be eliminated from the blood within days

DNA, OSIP- phase III study showed OSIP’s Tarceva in combination with DNA’s Avastin proved effective

AFL- guided just below estimates for the year, but had do devastating news so should bs short covering here

RCII- great earnings

TSRA- decent earnings

FOR- closed near a high

FSYS- on “Mad Money” last night

MELI- featured on “Fast Money” last night

ADM- good earnings

EMR- good earnings

MRK- decent earnings

MYGN- great earnings

SMG- good earnings

TYC- decent earnings

ADP- decent earnings

ITMN- great drug results from its phase III trials


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

SNDK- missed earnings and doing stock offering, but did beat on revenues

HOLX- terrible earnings

PRE- terrible earnings

DRYS- closed near a low again, BUT did get an agreement staving off creditors

DOW- closed near a low

SUSQ- broke to a new trend low; looking to short thru Mon 10.13 low

ADCT- closed near a low after posting terrible earnings

AF-broke to a new trend low

CAM- poor earnings

DOW- terrible earnings

MOT- poor earnings

PNC- awful earnings



Earnings:

TUES FEB 3 BEFORE

ADM AMSC AVP

AXE BR CAM

CE CLP CME

CMI COCO COL

DHI DOW EMR

ETR HNT HW

IACI KSU MAN

MDU MOT MRK

MRO MYGN NOC

PEG PNC PNR

PRGO RTI SGP

SMG TYC UPS

WEC

TUES FEB 3 AFTER

ACE ADP AJG

BRE BYI CTX

DIS ERTS EW

FISV ILMN JKHY

JLL LEG MEE

MWA NETL NEWP

NLC PSE PXD

RVBD TRMB UNM

YUM




Good luck today.

Erik R. Kolodny

 

[zdreg]

drys up 33%

article is 4stars