Day Trading Thoughts For Tues. Jan. 27

[erikrkolodny]

For all you homeowners out there (including myself), the median home price plunged by an astounding 15.3% year-to-year from December 2007 to December 2008 according to the National Association of Realtors. This is the largest annualized decline since the Great Depression. However, the focus for us as day traders is not to focus upon the past, but rather what is to happen. Despite the horrific price decline, there were two very notable pieces of good news in this report. First, the inventory of existing homes for sale fell almost 12% which translates into a very manageable 9.3 month supply of homes. But more notably is that there was an increase of 6.5% in the amount of existing homes sold in December on an annualized basis; this was very quietly the strongest report since the beginning of the decline of the real estate market over two years ago. Now, there is no guarantee that this will maintain itself, but it may well be the beginning of a bottoming process for real estate as supply dwindles a little bit and buyers step in. Again, there are no guarantees here; it may well be a blip, but it is a very welcome blip. For day traders, we have stopped monitoring reports such as this one. Home data must come back onto our radars. The Dow quietly rallied almost 100 points in about 10 minutes early yesterday morning. For some day traders, that little pocket can make (or ruin) a day for day traders out there. So, definitely monitor things like new home sales as well as existing home sales data as these economic reports without a doubt are influencing intra-day trading once again.

(FYI...edited...idiot me wrote an early draft of this, but changed my mind a little and posted the wrong draft...totally my fault...posting this 15 minutes after the original post...again, totally my fault and my apologies).

In Tokyo, stocks rallied 5% while Australia was up 3% overnight with the rest of the markets closed for the Chinese New Year. Things started positively in Europe, but as commodities prices gave way a little, the bourses have turned moderately negative (all less than 1%). Futures were up strongly state-side overnight, but have given back all their gains and more. Look for this chop-chop to continue all day today. There definitely is a bid in here for equities as the markets tried to rally yesterday, but there also is a ceiling in the absolute immediate-term as the rally failed numerous times. Keep an eye on commodities to see if oil and gold give back which would drag down shares of commodities-based equities and the market with it, but overall, look for a very choppy trading session with prices on both sides of unchanged throughout the day albeit with the bias to the upside.


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

AXP- beat earnings

TXN- beat earnings significantly for the quarter, but warned for the year

VMW- similar to TXN; beat for quarter but warned on year. Watch EMC as well as they own a significant part of VMW

ZION- took huge non-cash charge, but operating earnings OK

NFLX- terrific earnings

MCK- terrific earnings

QLGC- good earnings

CVH- CEO resigned, but actually viewed as positive after-hours yesterday in terms of stock price as company is trying to shore up its image

CR- beat earnings

DGX- closed near a high after posting great earnings

BJS- decent earnings

BMY- solid earnings

JEC- decent earnings

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

AMGN- missed earnings slightly for the quarter

GGG- met earnings, but hazy on outlook

AFL- despite repeated guidance reiterations and statement of adequate capitalization, stock keeps falling. Looking for short thru yesterday’s low of 19.35 or a A-B-A2 to upside

GNK-suspending their dividend and stock buyback program

THMD- closed near a new trend low yesterday

RF- broke to a new trend low; look to short thru Mon low of 4

DOW- CEO tried to talk company up on CNBC interview this morning, but noted the board may have to cut the dividend

MHP- beat on quarter, but warned on year

GLW- missed earnings and warned on next quarter’s earnings

DD- missed earnings for quarter

Earnings:

TUES JAN 27 BEFORE

AKS ASH AVY

BJS BMS BMY

BTU CBE CHKP

CP CRS CVG

DD EMC ENR

FMER FPL HSY

JEC KCI KRC

LXK MHP NUE

NYB PBKS RYN

STE STJ TIN

TRV VLO VZ

WAT WDR X


TUES JAN 27 AFTER

ALTR AMLN CHRW

DV ELX EWBC

GILD MOLX NSC

SYK TSS VPRT

YHOO

Good luck today.

Erik R. Kolodny

 

[redwagon]

Thanks for the posts Erik. It's nice to have a different perspective of the market sometimes.

Don't let the other people push you around. If they don't like your analysis, they should stay the heck out of your posts, plain and simple.

Your time and effort are appreciated. I don't take your posts as the end all of trading but I do take a look at the stocks and check out how they are trading. Unlike other people who like to flame you out and expect you to be right 100% of the time, which is impossible as any good trader knows.

Cheers and good luck out there!

 

[erikrkolodny]

I do not mind and in fact, encourage (constructive) criticism. It is the only I can improve myself as a trader much less a person. I am fond of saying that the only thing I know is that there is awhole lot more that I don't know than what little I do know.


And you are 100% right- you should not take my posts as the bible for day trading. It is precisely why I have the word 'thoughts' in the subject line every day. I encourage and indeed crave feedback - that is the point of these threads. I want to help as a lot of people have asked me to post here and I want to learn as much from everyone here as well. There is no way I am 100% right; if anyone claims to be, run for the hills. But I am (thankfully) right often enough that I can earn a respectable living.

All the watch lists do is provide a guide for some symbols for traders to look at as well the way I for one would play those stocks. I've traded a grand total of one stock mentioned there all day because I missed two set-ups and nothing else set up the way I wanted, but that one trade was good...most days, I get 3-5, but even if I get one trade out of all that work, it is very worth it.

Be well and thank you.

Quote from redwagon:

Thanks for the posts Erik. It's nice to have a different perspective of the market sometimes.

Don't let the other people push you around. If they don't like your analysis, they should stay the heck out of your posts, plain and simple.

Your time and effort are appreciated. I don't take your posts as the end all of trading but I do take a look at the stocks and check out how they are trading. Unlike other people who like to flame you out and expect you to be right 100% of the time, which is impossible as any good trader knows.

Cheers and good luck out there!