Day Trading Thoughts For Wed. Dec. 17

E

erikrkolodny

ET Sponsor
Not so long ago, markets were paralyzed whenever a certain ‘event’ occurred- (cue “Twilight Zone” music): The Fed meeting. Even yesterday, although the markets chalked up some hefty gains before the 2:15 announcement, everything was relatively quiet with the lone exception of the steady march forward of Goldman Sachs (GS). In the eras of Volcker and Greenspan among other prominent Federal Reserve chairman, these one or two-day meetings were watched with baited breath by most traders. With the advent of the financial crisis and the almost surreal drop in bond yields, the market is ostensibly doing the Fed’s work for it and making it a near non-entity. As discussed in this space frequently, what will truly take the markets to snap out of it is, well, the markets to snap out of it. It is psychology. If I am given a top-of-the-line jumpsuit and free lessons for jumping out of a plane, it won’t help if I have a fear of heights in the first place. Second, it becomes a numbers game particularly in coordination with the aforementioned tenet. Interest rates are so low as is that it will take an external event or a palpable reduction in fear to spur interbank-lending. The credit markets have become much ‘easier’ with the decline in LIBOR to below 2%, but bank activity still has not augmented yet. And of course whenever nobody really pays attention to the Fed as was the case yesterday, they come out with violent surprises. This happened yesterday. The number behind the interest slashing yesterday has very little true meaning. However, the signal the Fed gave was extraordinary. Namely, the Fed indicated it’d keep rates this low for the foreseeable future and that they saw the economy worsening. What this does is show that the Fed will do whatever it takes to get things going. Stimulus package? No problem. Zero interest rates? No problem. Tarp? Yes, please. GM bailout? Sure. Now, the long-term consequences of all of these actions can potentially be very bad: inflationary and government meddling as this clearly smacks of desperation. Yet, in the immediate-term, this is indeed a shot of desperation but also an indication of “all-in” action by the government which could totally change the tone to a bullish environment. For day traders, what it tells you today, right now, immediately is to contemplate all of this because what has worked for months on end possibly will not anymore as risk takers buy a few shares of some banks, brokers, and other financials much less the broader market. This is what the Fed is trying to will everyone to do. Indeed, this incredible Fed action may well be the clarion call which is the anecdote to the risk aversion problem in the immediate-term.

Overnight, strength in Asia gave way over concerns about the weakness of the U.S. dollar and the breathtaking rise of the U.S. bonds. After opening strongly higher, markets in Asia closed mixed with prices across Europe down slightly across the board. State-side, the futures are indicated to give back a bit of yesterday’s gains. With the momentum to the upside the sell-off likely won’t gain many legs on the open so we should bounce off of the open. From there, the strength of the expected initial rally will indicate the rest of the day; if it is powerful, the trend will be higher. If it is a weak rally formed mainly from short covering on light volume, the averages will turn back down and then chop around aimlessly much of the afternoon thereafter.
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

SAY- the deal they made yesterday was cancelled

ADBE- great earnings

PAY- good earnings

CETV- closed near a high; looking at a buy thru 22.80 on an A-B-A2 in particular

RVI- continues its stunning momentum; using 2.84 as a key number…if it opens down, using Tuesday’s close as a entry and if it opens higher yet reverses, short it

RIMM- looking for A-B-A2 thru yesterday’s 40 high

SPG, VNO – among strong REIT’s which closed near a high; looking for follow-through

PRU, MET, TRV, AFL- among big insurers closing near their highs; looking for more follow-through

USB, WFC, JPM, BBT- among big banks very strong yesterday; looking for more upside follow-through

HIG- closed at 17.28 on its high; looking for more follow-through in some fashion as shorts cover this thing particularly after its great news last week

GILD, GENZ, CELG- leaders in one of the bets sectors yesterday- biotech. Could be more momentum today.

HSNI- its recent run continues; if it opens below yesterday’s 3.25 high, likely a buy at 3.25

ARSD- more than doubled yesterday; closed just off of 1.50 high. Looking to buy it thru 2.50 if it gets there.

SNH, MAC, DRE- small REIT’s the best performing sector yesterday; looking for more momentum today

AEM- among the stronger miners; looking to buy thru Tuesday’s 46.50 high.

CAG- good earnings

GIS- great earnings

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

LEG- warned on its outlook

SLAB- warned, but had a decent reaction after-hours last night

AAPL- pulling out of MacWorld, but more notably, Steve Jobs not delivering keynote address at MacWorld in three weeks thus starting rumors about his health anew

CLWwi – closed near a low yesterday; looking to short it thru yetserday’s 17.20 low.

JOYG- beat on quarter, but warned on year

WDC- revised guidance

SCHN- warned on earnings

NWL- warned on earnings

LNN- missed earnings

MS- missed earnings by a lot

Earnings:

WED DEC 17 BEFORE

CAG CMC GIS

JOYG LNN MS

WED DEC 17 AFTER

NDSN NKE PAYX TTWO


Good luck today.

Erik R. Kolodny
 
Market really wimped out yesterday.......heck the ES was not even able to hit the 919/920 level where all the inventory is resting from our recent two week highs???

If the market can't even get enough buyers to retest these highs in the next day or two that is a very bad sign.....very big hint then to get out of held LONG positions soon. Not too much time left before we are already into January (remember January this year....LOL!), and it seems there is no sign of Santa and his crew for the bulls this year! :eek:
 
Quote from erikrkolodny:

Not so long ago, markets were paralyzed whenever a certain ‘event’ occurred- (cue “Twilight Zone” music): The Fed meeting. Even yesterday, although the markets chalked up some hefty gains before the 2:15 announcement, everything was relatively quiet with the lone exception of the steady march forward of Goldman Sachs (GS). In the eras of Volcker and Greenspan among other prominent Federal Reserve chairman, these one or two-day meetings were watched with baited breath by most traders. With the advent of the financial crisis and the almost surreal drop in bond yields, the market is ostensibly doing the Fed’s work for it and making it a near non-entity. As discussed in this space frequently, what will truly take the markets to snap out of it is, well, the markets to snap out of it. It is psychology. If I am given a top-of-the-line jumpsuit and free lessons for jumping out of a plane, it won’t help if I have a fear of heights in the first place. Second, it becomes a numbers game particularly in coordination with the aforementioned tenet. Interest rates are so low as is that it will take an external event or a palpable reduction in fear to spur interbank-lending. The credit markets have become much ‘easier’ with the decline in LIBOR to below 2%, but bank activity still has not augmented yet. And of course whenever nobody really pays attention to the Fed as was the case yesterday, they come out with violent surprises. This happened yesterday. The number behind the interest slashing yesterday has very little true meaning. However, the signal the Fed gave was extraordinary. Namely, the Fed indicated it’d keep rates this low for the foreseeable future and that they saw the economy worsening. What this does is show that the Fed will do whatever it takes to get things going. Stimulus package? No problem. Zero interest rates? No problem. Tarp? Yes, please. GM bailout? Sure. Now, the long-term consequences of all of these actions can potentially be very bad: inflationary and government meddling as this clearly smacks of desperation. Yet, in the immediate-term, this is indeed a shot of desperation but also an indication of “all-in” action by the government which could totally change the tone to a bullish environment. For day traders, what it tells you today, right now, immediately is to contemplate all of this because what has worked for months on end possibly will not anymore as risk takers buy a few shares of some banks, brokers, and other financials much less the broader market. This is what the Fed is trying to will everyone to do. Indeed, this incredible Fed action may well be the clarion call which is the anecdote to the risk aversion problem in the immediate-term.

Overnight, strength in Asia gave way over concerns about the weakness of the U.S. dollar and the breathtaking rise of the U.S. bonds. After opening strongly higher, markets in Asia closed mixed with prices across Europe down slightly across the board. State-side, the futures are indicated to give back a bit of yesterday’s gains. With the momentum to the upside the sell-off likely won’t gain many legs on the open so we should bounce off of the open. From there, the strength of the expected initial rally will indicate the rest of the day; if it is powerful, the trend will be higher. If it is a weak rally formed mainly from short covering on light volume, the averages will turn back down and then chop around aimlessly much of the afternoon thereafter.
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

SAY- the deal they made yesterday was cancelled

ADBE- great earnings

PAY- good earnings

CETV- closed near a high; looking at a buy thru 22.80 on an A-B-A2 in particular

RVI- continues its stunning momentum; using 2.84 as a key number…if it opens down, using Tuesday’s close as a entry and if it opens higher yet reverses, short it

RIMM- looking for A-B-A2 thru yesterday’s 40 high

SPG, VNO – among strong REIT’s which closed near a high; looking for follow-through

PRU, MET, TRV, AFL- among big insurers closing near their highs; looking for more follow-through

USB, WFC, JPM, BBT- among big banks very strong yesterday; looking for more upside follow-through

HIG- closed at 17.28 on its high; looking for more follow-through in some fashion as shorts cover this thing particularly after its great news last week

GILD, GENZ, CELG- leaders in one of the bets sectors yesterday- biotech. Could be more momentum today.

HSNI- its recent run continues; if it opens below yesterday’s 3.25 high, likely a buy at 3.25

ARSD- more than doubled yesterday; closed just off of 1.50 high. Looking to buy it thru 2.50 if it gets there.

SNH, MAC, DRE- small REIT’s the best performing sector yesterday; looking for more momentum today

AEM- among the stronger miners; looking to buy thru Tuesday’s 46.50 high.

CAG- good earnings

GIS- great earnings

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

LEG- warned on its outlook

SLAB- warned, but had a decent reaction after-hours last night

AAPL- pulling out of MacWorld, but more notably, Steve Jobs not delivering keynote address at MacWorld in three weeks thus starting rumors about his health anew

CLWwi – closed near a low yesterday; looking to short it thru yetserday’s 17.20 low.

JOYG- beat on quarter, but warned on year

WDC- revised guidance

SCHN- warned on earnings

NWL- warned on earnings

LNN- missed earnings

MS- missed earnings by a lot

Earnings:

WED DEC 17 BEFORE

CAG CMC GIS

JOYG LNN MS

WED DEC 17 AFTER

NDSN NKE PAYX TTWO


Good luck today.

Erik R. Kolodny
More...

please stop rambling. I suggest you learn how to post more succinctly.

just buy all dips

buy goog, ewz, ma bidu
 
Darn......market TOTALLY wimped out again!!!

Was starting to sell the price action at the 917's (sold ES at 917.50 today) as I hoped we would retest the 919 level, and then the market stalls just below the inventory resting at 919 area and above (inventory with stops up to 922's). I covered my last 1/3'rd of position at 902.50 just before the close....oh well, maybe the BULLS will find some traction tomorrow??? :)


OH......and GO GOLD GO!!!!!!
 
If you don't want to read what I have to say, do not read it. I have been asked to make these posts by many people; I reluctantly agreed to do so when I saw it truly did help those with less experience at day trading than I. Note I don't say "less intelligence" than I per se, but "less experience at day trading." I give a little summary and then some ideas.

Pat concepts like "just buy all dips" are truly ingorant and will result in losses over the long run. Buying every dip in CEG intra-day today for example would have resulted in a massive destruction of wealth. Longer run, had I been buying BIDU for the last 200 points down, I'd have lost about 2/3 of my money. Before you flame me, think about that. Really think about it. This is the whole point of these posts for me. Glib generalizations do not work trading-wise.

I do not mind constructive criticism. It is, in fact, a fantastic learning tool for me. The day I stop learning and lose my humility much less my quest for knowledge is the day I will lose whatever ability I have to trade as the proverbial chip gets slammed off my shoulder. With all due respect, however, I do very much mind ignorance and sloth. I am trying to do something nice; that is all.


QUOTE]Quote from stock_trad3r:

please stop rambling. I suggest you learn how to post more succinctly.

just buy all dips

buy goog, ewz, ma bidu [/QUOTE]
 
Quote from erikrkolodny:
[speaking to stock_trad3r]
More...
erik, perhaps you are unaware of the fact that this individual stocktrad3r is the laughingstock of the website. I have been here for a few years and I've never seen a bigger fool. He does not trade stocks, futures, or anything else. I suggest you use the ignore feature and stop wasting your time reading his drivel or even responding to his posts.
 
I appreciate the heads-up, but my point remains the same- this is a board in which we should all try to learn from one another. I do not know who's who, but if I can help (and vice versa, hopefully), this is all I want. I've been doing this for 12 1/2 years (although it feels like 50 years!) and while I have a pretty good track record, I know that I for one have vast room for improvement as a trader. Thus, I want to learn whatever I can here yet a lot of people have honored and humbled me by telling me they feel that they can learn from me too so I am simply trying to help.

Have a good night.
Quote from traderNik:

erik, perhaps you are unaware of the fact that this individual stocktrad3r is the laughingstock of the website. I have been here for a few years and I've never seen a bigger fool. He does not trade stocks, futures, or anything else. I suggest you use the ignore feature and stop wasting your time reading his drivel or even responding to his posts.
More...
 
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