Epiphany Trading Daily Blog

I don’t understand the question; I apologize, but I don’t understand. The way it reads (to me) is a mutual fund type of thing (i.e. people putting in cash and one person trading it). So, please rephrase as I don’t want to answer until I truly understand what you’re asking because it’s not fair to me- or you- to comment otherwise.

Quote from paretrader:

Will you set up another account for your traders, fund it with 10k and have your top guy trade it while splitting the profits with your traders? All when the trader has NO downside risk on the 10k? If you are so confident in your method, why not? BRIGHT does this... what is your edge over this program?
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I post actual trades when it is relevant. I was not aiming to toot my own horn as I saw no need to post charts in this specific instance; I was aiming to make a point. My point in this blog post: traders should focus on opportunities in stocks which are not generally placid. I aim for trades in which I feel there is at least a chance to make at least 20 cents easily in a stock in two minutes or less. Obviously, I do not make at least 20 cents easily in every trade I do, but that is the goal. Thus, if a stock traded in a range of 34 cents the day before, I tend not to trade it. Whenever I discuss specific trades, I go into immense detail as I have at other spots on this forum. For instance,
here:

http://www.elitetrader.com/vb/showt...perpage=6&highlight=erik kolodny&pagenumber=3

or here:

http://www.elitetrader.com/vb/showt...perpage=6&highlight=erik kolodny&pagenumber=4

To directly address the issue out of deference to a very fair question (as cut and pasted from my trade data):

03/01/10 09:46:04 FCX SLD SHRT 1000 76.36
03/01/10 09:46:04 FCX SLD SHRT 40 76.35
03/01/10 09:46:04 FCX SLD SHRT 160 76.35
03/01/10 09:46:41 FCX BOT 1200 76.2399

And

03/01/10 09:30:44 BRK/B SLD SHRT 600 79.95
03/01/10 09:30:44 BRK/B SLD SHRT 800 79.95
03/01/10 09:32:25 BRK/B BOT 600 79.69
03/01/10 09:32:25 BRK/B BOT 200 79.68
03/01/10 09:33:32 BRK/B BOT 200 79.48
03/01/10 09:33:33 BRK/B BOT 200 79.48
03/01/10 09:33:33 BRK/B BOT 200 79.4798

And

03/01/10 09:42:10 NUVA SLD SHRT 400 41.99
03/01/10 09:42:10 NUVA SLD SHRT 200 41.99
03/01/10 09:42:10 NUVA SLD SHRT 200 41.99
03/01/10 09:42:11 NUVA SLD SHRT 200 41.9802
03/01/10 09:42:33 NUVA BOT 200 41.76
03/01/10 09:42:33 NUVA BOT 400 41.7798
03/01/10 09:42:48 NUVA BOT 400 41.819


Quote from Snowman75:

Please post an actual trade with a chart.

Saying I made this or that means nothing unless you are just trying to prove something so you can sell us something.
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IMHO, your journal is a little annoying as it looks like you are not posting a real journal but an ad to sell something.

You show trades of 3 stocks not mentioned anywhere else therefore cut the list of stocks in your posts and only talk about the stocks you actually trade. No one here cares about who made a new high. We already know. All it does is make your posts long.

The trades with the time stamps is a great idea. Thanks for posting. You should continue posting those and charts if you want anyone to read your journal. Otherwise it will hit alot of ignores. Good luck.
 
Re: “IMHO, your journal is a little annoying as it looks like you are not posting a real journal but an ad to sell something,” every piece here is simply my thoughts for that particular day. That's it. Furthermore, I tend to say things such as this from March 3: “Keep your focus on the stocks in the news and avoid all momentum trading until/unless the market perks up.” Or from March 4: “In the interim, continue to trade less frequently and in smaller size at that until things perk back up else if you’re a trend-following minute-to-minute day trader all you’ll do is leave at the end of any given day of work frustrated…and poorer…than when you walked into the office in the morning.” Or from March 4 in response to a comment: “I'll private IM you on this one because I don't want to do anything commercial per se on this forum as I just want this thread to be dedicated to the journal out of deference to any readers much less the spirit of Elite Trader.” If I wanted to post an ad to sell something, I can assure you I wouldn’t use phrases like that. All I can do is hammer out near stream-of-consciousness style what I see/think.

Re: “You show trades of 3 stocks not mentioned anywhere else therefore cut the list of stocks in your posts and only talk about the stocks you actually trade.” You’re missing the point. I provided those as examples for what it was I was trying to say: people focus on narrow moving stocks that they hope will make sudden big moves; instead, focus on the stocks actually moving. I was just showing what can be missed. Yesterday, for instance, two traders in my firm’s chatroom were bantering about a trade in TRA. TRA had barely moved in an hour and its performance is largely tied to that of CF. Not only did they both ended up losing small in TRA, they missed a bigger trade in AIG which fell 32 cents in 1 ½ minutes.

Re: “No one here cares about who made a new high. We already know. All it does is make your posts long.” I for one deeply care as do many of the traders at my firm. Many times, the concept makes my day. Nearly every single day, I mention the importance of ‘relative strength/relative weakness’ plays. I wrote about it here from Feb. 1 on the blog if you wish to view the link:
http://epiphanytrading.blogspot.com/search?q=relativity

Yesterday, as an example, I noted “AAPL- closed at a new high amid positive buzz following Cramer’s recommendation on “Mad Money” on Thursday night” in the stock section. I also noted as I do every day in the blog (cutting and posting the relevant passage) that “If something is good, assume either a short thru unchanged or (the other condition)….” As discussed in more detail on our chat room yesterday, AAPL cracked thru unchanged after opening sharply higher; it fell to 218.82 (down slightly on the day after initially gushing ever higher) before bouncing a little. I said there (at 9:57AM ET) that if AAPL touched a new low after the little bounce, I was going to short it thru a new low. Here is my trade:

03/08/10 09:58:15 AAPL SLD SHRT 200 218.8
03/08/10 09:58:15 AAPL SLD SHRT 100 218.8
03/08/10 09:58:15 AAPL SLD SHRT 45 218.8
03/08/10 09:58:15 AAPL SLD SHRT 120 218.8
03/08/10 09:58:15 AAPL SLD SHRT 35 218.8
03/08/10 09:58:15 AAPL SLD SHRT 100 218.82
03/08/10 09:58:15 AAPL SLD SHRT 100 218.82
03/08/10 09:58:15 AAPL SLD SHRT 300 218.8
03/08/10 09:58:31 AAPL BOT 100 218.67
03/08/10 09:58:31 AAPL BOT 100 218.67
03/08/10 09:58:31 AAPL BOT 100 218.68
03/08/10 09:58:32 AAPL BOT 200 218.7
03/08/10 09:59:24 AAPL BOT 300 218.33
03/08/10 09:59:32 AAPL BOT 200 218.389

Thus, I didn’t make a fortune, but a $350 or so profit in a minute and 17 seconds is not a bad thing- on a trade I never would have done had I not realized that AAPL closed near a high (as noted on yesterday’s blog) the day before and was relatively weak that morning.

Re: “The trades with the time stamps is a great idea. Thanks for posting. You should continue posting those and charts if you want anyone to read your journal. Otherwise it will hit a lot of ignores. Good luck.” You’re right. I should include more of the actual trades within the context of that day’s point in the blog and I will take that advice and go with it when possible.

Thanks for the feedback and good luck to you too.



Quote from Snowman75:

IMHO, your journal is a little annoying as it looks like you are not posting a real journal but an ad to sell something.

You show trades of 3 stocks not mentioned anywhere else therefore cut the list of stocks in your posts and only talk about the stocks you actually trade. No one here cares about who made a new high. We already know. All it does is make your posts long.

The trades with the time stamps is a great idea. Thanks for posting. You should continue posting those and charts if you want anyone to read your journal. Otherwise it will hit alot of ignores. Good luck.
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I'd rather be too detailed in making sure I answer the questions as completely as possible than too succinct.

Quote from 20angrygurus:

I nominate this guy as Jack Hershey #2 for verbosity.

however, he does know how to trade, so good stuff, so far.

:D
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WED. MAR. 10- When In Doubt, Get Out

In April 2000, I was dating a girl who I met through some friends. She was somewhat shy, but seemed to be a very nice person. Right around her birthday, we were talking about said birthday and somehow the topic of surprise parties came up. She noted she’d never been thrown a surprise party before. I don’t know if that was a hint or what, but I of course got right on it. Through mutual friends, I procured her best friend’s phone numbers/e-mail addresses and put something together. She was floored (or certainly seemed it). Fast forward three weeks. On my birthday, I got…nothing. Not a phone call. Not an e-mail. Nothing. I didn’t want a surprise party, but you know, a “Happy Birthday, Erik” would have been nice. The next day was the end of our relationship. Just over 2 ½ month later, I dated the last girl I’d ever date as this one (Robyn) became my wife just over a year later. While stuff like this may be more interesting than the stock stuff I discuss here typically, there is a business-related point. The day after my birthday 2000, my losses were cut. Was I upset (and am I still annoyed)? Yes. Would it have been much worse to have stuck it out? Yes. Would I have missed out on a much better opportunity in the imminent future? Yes. Guess what? It is the same trading stocks. Part of a trader’s life is encountering difficult/adverse trades. It’s going to happen- and to most of us- it is going to happen daily in some fashion. The trick is cutting your losses and awaiting the inevitable better opportunities that will tumble your way. I abhor when I hear someone say “I can’t get out” of a bad position. You can always get out. It just may not be at a price agreeable to you. But if you are short, say 2000 C from 3.67, you short 2000 more at 3.68, you short another 4000 at 3.69, and another 7000 at 3.70 because, you know, it just can’t go higher…yet it’s 3.72 bid and you just want out, guess what? First, it means you didn’t read what I wrote last Friday nor listen to our 15 minute discussion about it on the morning call that day regarding adding to losing positions when they are rapidly going against you nor did you have basic respect for trend trading…link to the blog entry can be found here:
http://epiphanytrading.blogspot.com/search?q=don't+fight+a+tidal+wave
*But* it does *not* mean that you cannot simply cut your losses when you are wrong. What you do if it is 3.72 to 3.73 with three million shares on the offer and you want to get out in the immediate-term due to emotion or prudence or a combination of both, you cue up an order at 3.73 and you hit your buy button for your 15,000 shares. Sure, you lost $590 gross…but you didn’t lose $1.500 more when it went up another dime in a relatively short time frame. I am well aware that some stocks are going to be less liquid than C, but the principle is the same. If you want to get out (right or wrong), you don’t wait nor hope nor try to save a penny a share; the option is always there for you to simply hit the button, take whatever liquidity is there, and you’re out. Once your mind is clear, you can then start doing what you’re supposed to do and get your money back (and more). But to say you cannot get out of a bad situation is utter rubbish; it is much better to exit expeditiously if you’ve screwed up and start anew…than to hang on to the person who didn’t so much as text you on your birthday and miss out on “the one” when the opportunity came along….or of course to hang onto a bad trade all the while missing out on better opportunities.

Markets throughout the world are little changed…in Asia, Tokyo was down 0.03% while Hong Kong was up 0.003%. Like I said, little changed. In Europe, prices are marginally higher by about ¼%. The dollar and oil are a little stronger as well. Futures are modestly higher again as there’s no earthshaking news. Look for a continued gentle rise higher with choppiness in individual stocks but no major move with the corollary that financial stocks are very strong this morning- if that holds and/or builds, we could set up for a bit of a rally today. Focus on those aforementioned financials, big cap techs, and the various stocks in the news/stock offerings for trades today.




Reiterating-


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

ITMN- FDA panel backed its lung drug Pirfenidone

FACT- received buyout bid of 27 from ABT

AGN- FDA expanded approval of Botox for elbow and wrist spasticity

AEO- closing its Martin+Osa stores

AONE- poor earnings, but signed contract with NAV

MGH- closed near a high after discovering a significant gold zone on the Ouijaba property in Canada

CMC- closed near a high after takeover chatter ruled the day yesterday

WNC- closed near a high; secured three-year purchase agreement from Swift Transportation after the close yesterday

SKT- featured on “Mad Money” last night

CYTK- CK-2017357 granted orphan drug designation for ALS treatment

OCLS- received FDA 510k clearance for Microcyn skin and wound HydroGel

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

ABT- acquiring FACT

PSS- lukewarm earnings

EQT- share offering

SLXP- poor first quarter earnings guidance

NAV- poor earnings

AGO- share offering

SVN- closed near a low after posting poor earnings

UAUA- island reversal in closing near a low after issuing positive revenue data

EDAP- island reversal after receiving Japanese approval for its Sonolith I-Sys

PLCE- poor earnings

JCG- decent earnings, but traded off a little after-hours






Earnings:

WED MAR 10 BEFORE

AEO PLCE SOL

WED MAR 10 AFTER

CLNE FCEL GYMB

MW


Good luck today.


Epiphany Trading, LLC


www.epiphanytrading.com


Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
 
THURS. MAR. 11- Handling Success With Dignity

I posted arguably my favorite blog post on September 28…it is something that took me about two hours to think about and type. Here is the link for those who do not remember:

http://epiphanytrading.blogspot.com/...8_archive.html

In the piece, I discussed ‘atoning’ for trading sins. I listed a number of things I needed to work on and a lesser number of things I did not do in the last 12 months. Number one on that list was this:
“I have never not one time called out how much money I made in a stock the instant I exited a trade nor have I even clapped my hands and exclaimed how well I did when right. It is obnoxious boorish behavior and impresses nobody when done over time. I did it for the last time ever 1 ½ years ago and saw a look of genuine jealousy and anger from a good friend of mine and hated myself instantaneously. Reputations speak for themselves.”

I absolutely need to elaborate.


When we saw the story of Baby Jessica rescued from that well on October 16, 1987 in the midst of the markets collapse, we were all universally happy when she was rescued. When Cal Ripken broke the consecutive games streak in baseball on September 6, 1995, fans collectively grinned in the midst of the good guy winning. Whether it is a uniform group as in the worldwide populace or a subgroup in the 2nd example, everyone cheered together and was happy together. The human psyche reacted in a positive way to good stories thus the spontaneous applause and burst of tears in both of those examples. But, you know, it just isn’t the same in trading. Do not get me wrong. I think I speak for every single day trader I personally know when I say that we all want to do well, but we also want one another to do well. But in the heat of the trading arena, basic decorum is oftentimes lost, forgotten, or totally utterly ignored. In all of the years that I’ve been doing this, one thing that has always amazed me is the propensity, desire, and inclination of traders to trumpet to the world how much money they make on a particular trade- particularly when they selfishly did the trade alone- particularly when they did not announce they were in the trade. These same people will not denote their losses, but will be happy to say something like “I made $500 in Goldman Sachs just now” to nobody and no one. But loud enough for all to hear. Or they will clap their hands loudly in pronouncing their gloating when many others did not hear of much less do the trade. The reason of course stems from giddiness and the desire for everyone to know that that particular trader is good at what he/she does. Oftentimes, malice is not meant, but there are consequences that inevitably occur. First, that trader tends to lose money on his/her next few trades net-net. The ego has a funny way of being overcome rapidly. Basically, the trader in this situation tends to forget what made him/her successful, thinks he/she is ready fur anything, and of course gets bludgeoned. The other two things occur due to perception. The trader who is not doing quite as well as the braggart feels resentful. This can lead to anger which leads to things like overtrading, containing aforementioned anger, and creating a desire to “keep up” (which by the way is ironic since people who tend to call out monetary amounts tend to lose money overall). Conversely and embarrassingly, a trader who is making substantially more money (even on the same trade) as the braggart tends to think less of him/her intellectually and personally. What I do chatroom-wise is call out every major trade I want to do and simply list the prices (win or lose) where I entered/exited) along with the fractional amount of shares I did. However, I will never ever never talk money (unless directly asked at a time far removed from the trade and only for educational purposes at that, i.e. posting a trade to back up a point at a much later date) because not only is it nobody’s business, all it can do is create resentment. Plus, frankly, I find it obnoxious and repulsive. The net of all of this is to truly realize that we really are in all of this together else we wouldn’t be trading for a living. But, like sticks and stones, words can come back to harm a trader who calls out how much money they made on any given trade in many more ways than one- from having the chip on his/her shoulder inevitably knocked off since it is inevitably the traders who are losing overall (even if they are having a good run) who are guilty of this to losing the respect of his/her peers.


Markets in Asia were generally higher overnight with Tokyo up 1% and Hong Kong ahead a relatively small 0.1%. In Europe, markets are just south of unchanged. Currencies and commodities are quiet too. Ho-hum. Futures are- gasp- pretty much unchanged. It is relatively quiet but for selected financials and techs with things like AIG and C trading higher again early this morning. The two notable differences are that big cap tech and big cap financials are trading slightly lower across the board and the newsflow overseas was a bit more negative with China once again warning of inflationary pressures and strikes in Greece intensifying (which dragged the futures down over ½% at one point). So, look for a downside bias off of the open…the first half hour will likely tell the tale for the day. If the market holds and the smaller financials hold, the market holds and rallies a little…if not, the market eases more. Tricky session with muted moves overall yet individual stocks will likely trade with more volatility today than they have in awhile as the newsflow has picked up.




Reiterating-


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

GHM- closed near a high

TEAR- announced TLC Vision will be incorporating TearLab in eight of its U.S. refractive surgery centers to study Dry Eye Disease symptoms as they relate to LASIK surgery

NUVA- closed near a high

GYMB- great earnings

CLNE- good earnings

SMTC- good earnings

OLP- closed near a high after posting great earnings

VICR- closed near a high after posting good earnings

MDR, WLT- on “Mad Money” last night

BKE- decent earnings

DVN- announced sale of its assets in the deepwater Gulf of Mexico, Brazil, and Azerbaijan to BP for $7 billion; noted that its after-tax proceeds for its divestiture program will exceed estimates

AIG- Taiwan will likely decide on approval of Nan Shan Taiwanese unit to a Hong Kong entity by June

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

MW- poor earnings

ROVI- convertible offering

AONE- closed near a low after posting earnings

JCG- closed near a low after posting earnings

CSR- filed to offer 20 million shares

JTX- poor earnings







Earnings:

THURS MAR 11 BEFORE

BKE CSUN JTX

LDK SFD


THURS MAR 11 AFTER

ARO GG NSM

PLL ZQK ZUMZ


Good luck today.


Epiphany Trading, LLC


www.epiphanytrading.com


Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
 
FRI. MAR. 12- Adapting When Things Change

Everyone has different aspects of their personality that can become accentuated. Furthermore, people tend to act differently in different situations. And don’t begin to think “I don’t” because everyone does. I am as much of a “what you see is what you get” person as you’ll ever meet yet I catch myself changing personalities involuntarily in different situations. For instance, around my daughters, I soften my voice tone, hold back any competitive spirit I have with anything in doing what I can to be nurturing to them. Around my wife, I’ll be anything from showing that same spirit to snippy when we have a disagreement about something. Around my friends, I can be bawdy at times in engaging about such topics as sports. Around ‘married’ couple friends, I am more stoic in engaging in such discussions as childcare and fixing closet doors. Basically, all of these facets of behavior are in fact “me.” Same goes for trading different kinds of markets. In 1999, I’d trade quite aggressively and almost only from the long side. In 2000, I’d trade quite aggressively and almost only from the short side. In this current environment, I trade aggressively only when there are pockets of activity else I go with the flow of the day and do nothing when there is nothing to do. In individual stocks, I refuse to trade stocks such as AAPL or GS when the market is quiet because these types of things don’t move smoothly when there is no momentum. I refuse to trade things like AIG when there is no news (but will at times trade it in size when it is moving). I focus on relative strength/weakness plays all day…except when the market is moving straight up or straight down because the extremes on both sides can catch up to the market at random. I aim to make at least 20 cents a share in everything I do except when the market is moving violently in which case my time horizon becomes compressed, my share size per trade goes down, and I seek to make more than 20 cents a share. In short, one has to change with the situation. Just like your own personalities can change as the situation dictates, your situational trading should adapt with changing market conditions as well. Just like you would not speak with your young children the way you would with your best friend, realize you cannot, say, trade C the same in a five cent intra-day range the way that you would with it in a 32 cent intra-day range. When the action in a stock or market changes, you must adapt your trading accordingly else the consequences can be harmful to your financial health.

Markets in Asia were generally higher overnight with the Nikkei up about 0.8%. In Europe, the bourses are up around 0.5% on average. Commodities are higher as well with the euro notably strong. This backdrop is setting the stage for another small positive session on Wall Street. The S&P 500 has been higher 10 of the last 11 days (the one day it was down, it fell 0.20). I know if I am playing roulette and the ball comes up red 11 times in a row in essence, I gotta bet red particularly with no real selling pressure evident. So, have a modest long side bias with a focus on fertilizers, big cap techs, and relative strength/weakness plays.

Reiterating-


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

NSM- decent earnings

ARO- good earnings

LDK- decent earnings

WPI- got FDA OK for new Trelstar formulation in advanced prostate cancer

NTRI- closed near a high

CLNE- closed near a high after posting good earnings

MBLX- closed near a high after posting good earnings

TVL- closed near a high after posting good earnings

GEOY- closed near a high after Lockheed Martin announced it’ll begin to engineer and manufacture GeoEye-2

GYMB- closed near a high after posting great earnings

GS- closed on a high

SWM- closed on a high

YUII- near island reversal after announcing its auditing firm resigned

AMZN- closed on a high

BUCY- island reversal in closing on a high after a brokerage downgrade

PNC- closed on a high

RXII- closed near a high

TREX- closed near a high

RFMD- mentioned on “Mad Money” last night

POT- raised earnings guidance; watch for MON and IPI to follow

AGU- withdrew offer to buy CF; TRA on upside as well

CTRN- decent earnings

HANS- announced $200 million repurchase program

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

ZUMZ- poor earnings

ERH- closed near a low

WG- closed near a low after posting earnings

AIG- reversed in closing near a low

SMTX- island reversal in closing near a low after posting earnings

PLL- terrible earnings

PSUN- poor earnings

SWHC- poor earnings

HRBN- closed near a low in a 2nd day of reversal following reporting earnings on Wednesday

BF/B- mentioned in “Sell Block” segment of “Mad Money” last night

CF- AGU terminated offer to buy the company





Earnings:

FRI MAR 12 BEFORE

ANN ARNA

Good luck today.


Epiphany Trading, LLC


www.epiphanytrading.com


Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
 
MON. MAR. 15- Deficit and Budget Worries

A friend of mine sent me a fascinating article recently from www.zerohedge.com with the tag headline “As Budget Deficit Hits Record High, Interest on US Public Debit Hits Record Low.” Usually, such ‘scare’ articles don’t have a lot of merit, but this one holds a lot of water. I’ll give a few highlights. The February budget deficit was $220.9 billion with $107.5 billion coming in and outlays of $328.4 billion going out. However, in a rather fascinating development, the interest on said debt was a relatively small $16.9 billion because as TreasuryDirect notes, the interest rate on public debt hit an-all time low of 2.55%. I mean, think about that- an increasing supply of debt is resulting in declining interest rates with bid to cover ratios at Treasury auctions at all-time highs! This is totally out of whack with regard to normal market action in which the more you borrow and the riskier the debt, the higher the interest rate you pay. Thus, the obvious question to ask, posits the author of the piece is: “When will rates start to rise and what will happen?” As recently as the last quarter of 2007, the interest rate on marketable debt was 5%. Well, the total debt is supposed to hit just over $14 trillion within the year as this was the target for the new debt ceiling by Congress not long ago. The marketable debt would be about $10 trillion. Thus, a rise from 2.5% to 5% would mean there’d be an additional $250 billion of additional debt each year. Thus, “when” is the true issue as it is apparent from studying this analysis why the Fed is campaigning to keep rates low- it’s not the worry over popping an excess liquidity bubble per se as much as it has to do with hoping rates don’t go to, say, 10% at which point the interest on the debt alone would be $1 trillion annually! Thus, while admittedly the excess liquidity can be an issue obviously, the real issue which is very much controllable is the fact that the ink continues to flow from DC. For day traders, quite admittedly, this is not a problem in the immediate-term. Very few people pay attention to the debt/deficit figures and that is not likely to change any time soon. People expect the numbers to be bad so they largely ignore them as do the markets. But, this is a burgeoning problem- certainly one that could affect all of us over time- and one that will eventually affect the markets with the advent of any headline such as the story from China over the weekend concerning its currency which kept futures under pressure the entire night.

Markets in Asia were mixed overnight with Tokyo flat but Hong Kong down 0.6%. In Europe, prices are marginally lower. The dollar is steady overall, but the pound is notably weak. Gold is up slightly with oil down slightly. Futures are down modestly. The main trigger is some talk out of China that the Chinese Finance Ministry feels that the yuan does not need to appreciate against the dollar so worries over U.S.-Sino relations are present anew. But really- it’s still quiet and likely to remain so. Notable, however, is that big cap tech and financials are lower so look for a modest downside bias on continued low volume. Focus on some of the biotechs in the news, the aforementioned techs and financials, and relative strength/weakness plays.


Reiterating-


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

ATPG- closed near a high after posting great earnings

SHO- mentioned on “Mad Money” on Friday night



GHL- had a strange move on the close upon going into the S&P 400; traded higher after-hours as well

CBEH- closed higher after posting good earnings

ULTA- closed higher after posting good earnings

IPCI- closed near a high after it noted NVS, CELG, and ELN have settled their patent suits with IPCI over a generic version of the Attention Deficit Hyperactivity Disorder drug Focalin XR

ZQK- closed near a high after posting good earnings

AMLN, ALKS, LLY- received complete response letter from FDA for Exenatide in which no requests were made for new pre-clinical trials

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

ATV- closed near a low after posting poor earnings

BWEN- closed near a low after posting poor earnings

CAGC- share offering

GOOG- there are reports out there that GOOG is going to have to leave China; could be good for BIDU though

BSX- rumors according to Bernstein that BSX has suspended sales of all of implantable cardioverter defibrillators



Earnings:

MON MAR 15 BEFORE

BPZ JST

MON MAR 15 AFTER

ATHN SQNM


Good luck today.


Epiphany Trading, LLC


www.epiphanytrading.com


Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
 
For those of you who love campy movies, "The Chase" is one of the campiest. It starred Charlie Sheen and Kristy Swanson and I shall quote the great Roger Ebert's review of it rather than trying to better the beloved movie critic: "" 'The Chase,' a movie named with unerring accuracy, takes place mostly in a car on a California expressway, where love blooms during a high-speed police pursuit. Once you grasp that premise, you know where the movie's going and more or less everything that is going to happen in it." Sheen kidnapped Swanson at a convenience store, they fall in love while racing towards the Mexican border and while I won't ruin the ending, let's just say reality was a trait left out of the flick. Now, in trading, a win is a win is a win. But there is such a thing as a bad win in an individual trade. Such an example occurred on the chatroom a week ago. Somebody called out ROVI after it had rallied 40 cents in minutes out of a tight range with no liquidity and no news in a neutral market. Unlike about the previous 11 set-ups in the same circumstances on that session which all would have resulted in losses, this one happened to work as ROVI popped a little more. The person who called it out obnoxiously asked the general populace if we’d seen the move (he of course did not do the same for the 11 previous calls he made that day with the same type set-up which proved to be wrong). I was and remain incredulous at his bravado. But the point here is that there is a reason there are certain rules to trading (as was shown once again as he happened to be right the 12th time….but wrong the previous 11 times). One of my personal major rules is that if a stock has ran a lot or sold off a lot- particularly for no particular reason and I have no idea what is going on- I always assume it is merely order flow or a news event I am not aware of and I stay far away from the stock- either way. In short, I don't chase it. So, as long as the markets remain in a low volume and low movement environment, be aware that this type of ‘chase’ is extraordinarily dangerous and being right once does not make up for the 11 times you’ll be badly wrong.

Markets in Asia were modestly lower overnight with Tokyo and Hong Kong down 0.3% each. In Europe, prices rebounded on the heels of Wall Street’s late afternoon rally with the bourses up about 0.5% on average. The commodities and currencies markets are quiet. The news backdrop is fairly positive with rumors of a quiet deal being made among the EU finance ministers not to let the Greek economy fail should that nation’s austerity measures falter. With a Fed meeting today, it’s going to likely remain very quiet through 2:15PM ET. Assuming nothing major comes out of the Fed, it’ll remain quiet overall but with a bit more activity. Look for the modest upside bias to stick throughout the session barring something unforeseen from the Fed.

Reiterating-


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

CXG- closed near a high after rumors came out that it will be bought out by CNX

STJ- closed near a high after BSX announced it’d halt the sale of implantable cardioverter defibrillators

AMLN, ALKS- closed near highs after receiving a positive complete response letter for Exenatide from the FDA

WPI- received FDA approval for generic Cardizem LA

ATHN- indicated internal accounting review is now complete

MCHP- boosted earnings guidance

ICGN- reported positive results for ICA-105665 in patients with photosensitive epilepsy

SINO- closed near a high

LTD- announced special dividend and stock buyback

BLTI- announced FDA 510k) clearance of iLase personal laser for dental market

DVN, MRX- featured on “Mad Money” last night

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

GKK- closed near a low after issuing terrible earnings

CNX- closed near a low after being rumored to buy out CXG

MDVN- poor earnings and cannot measure operating expenses for foreseeable future

MOV- earnings warning

HQS- earnings warning

SQNM- poor earnings and negative conference call

AMSC- closed at a new trend low

IOC- Antelope-2 well will need to be re-drilled

CFSG- poor earnings

DSW- poor earnings




Earnings:

TUES MAR 16 BEFORE

CFSG DSW FDS

TUES MAR 16 AFTER

DFS FMCN KONG


Good luck today.


Epiphany Trading, LLC


www.epiphanytrading.com


Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
 
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