Epiphany Trading Daily Blog

FRI. APR. 30- Navigating The Oil Slick

A few days ago, I wrote a piece about paying attention to all parts of the newspaper rather than just the business and sports sections of the daily rag/Internet site if you day trade. Such a very bold example occurred yesterday. I was taken aback when three people asked me some derivation of the inquiry “I didn’t know there was an oil spill near the United States. When did it occur and where did it happen?” Of course, this has been the top story in the news for quite some time now, but it harks back to making sure one is well-read about everything because one never knows when one will need said knowledge base for trading (much less educated about current events). There are numerous horrific environmental consequences which do not make for an eco-friendly world and of course numerous fantastic entities to help serve a “greener” world such as an entity like (http://www.tinygreenbubble.com). However, this is a day trading blog so I am going to stick with some pretty amazing economic facts. According to the Christian Science Monitor from an April 27 article, the oil spill from a Transocean Deepwater Horizon oil rig was swelling dramatically in size with almost 50,000 gallons of oil pouring into the Gulf of Mexico on a daily basis. The accident thankfully is generally a derivation from the stable norm for the industry but underscores the fragility of the deepwater oil drilling business (much less puts into doubt President Obama’s plans for expanding offshore drilling). Economically, some are now saying that the spill may well be bigger than the Exxon Valdez oil slick and may well cause serious damage to the already delicate fish and shrimp nurseries off the coast of Louisiana by this weekend. Specifically in day trading land, while many people were lunching, there was quite an opportunity. All sorts of rumors floated that the spill may be the worst of all time (or not as bad as thought), legislation would be tightened on oil drilling (or not), and that Obama’s plan was in immediate danger (or not). Stocks such as RIG, HAL, CAM, APA, OII, and BP became major trading vehicles around 12:30PM-1PM ET as various news pieces and confirmation of a presidential speech came to fruition. Thus, the daily epiphany is two-fold: first, one never knows when something can happen. If it’s a 73 degree sunny day and you want to go outside (G-d knows I wanted to do so), know you are taking the risk of missing terrific trading opportunities. Second, besides the obvious Boy Scout “be prepared” theme, do keep up with what is going on with this oil situation. It may well have major repercussions for not only the planet and the United States, but oh yeah, it will very much affect day trading as well in the coming days.

Markets in Asia were up sharply overnight with Tokyo up 1.2% and Hong Kong ahead 1.6%. European markets are lightly mixed with the bourses in a band of down ¼% to up ¼% depending on the nation. Oil and gold are both ahead again with the euro notably strong. The two major headlines overnight are of the Greeks seemingly on the verge of accepting an austerity package while the Feds have launched a criminal probe into Goldman Sachs (GS). Futures are focusing on the former with prices a little higher. For today- the last day of the month- it looks like the mo-mo train will continue. It likely will not be a dramatic trading session as the weather will be beautiful so lots of Manhattanites will likely leave a little early to get nine holes in. Focus on the myriad of earnings plays, the relative weakness plays, and try to do most of your trading in the morning. Keep a weary eye to GS and the euro.

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

WYNN- good earnings

DNDN- closed near a high on its Provenge approval

SHOO- mentioned on “Mad Money” last night

ABG- closed near a high after posting great earnings

RAS- closed near a high after posting great earnings

ITRI- closed near a high after posting great earnings

EVVV- closed near a high after posting great earnings

SPG, BXP, VNO, EQR- among the REIT’s closing near their highs yesterday

GTI- closed near a high after posting good earnings

HRS- closed near a high after posting good earnings

BC- closed near a high after posting good earnings

TWC- closed near a high after posting good earnings

HOT- closed near a high after posting good earnings

ORLY- closed near a high after posting good earnings

CSTR- great earnings

APKT- great earnings

SWKS- good earnings and mentioned on “Mad Money” last night

VSEA- good earnings

AMCC- decent earnings

THOR- great earnings

DLB- good earnings

KLAC- decent earnings

DHI- decent earnings

VFC- decent earnings

JRCC- decent earnings

RPRX- FDA may lift clinical hold on testing of Proellex at low doses

CVX- decent earnings









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

GS- Feds have now launched a criminal probe into the company’s mortgage practices

BP, RIG, HAL, CAM- all closed sharply lower on the Gulf oil spill story

IRM- closed near a low on poor earnings

HAR- closed near a low on poor earnings

APOL, CECO- among the education stocks closing sharply lower after critical comments from a Department of Education spokesperson

MET- poor earnings

MFE- poor earnings

WFR- poor earnings

MWW- poor earnings

MCBC- poor earnings

ATHN- terrible earnings

NETL- poor earnings

MXIM- poor earnings

QLGC- poor earnings

DRIV- poor earnings

CQB- poor earnings

TSO- poor earnings

AMX- poor earnings

NDAQ- poor earnings

MSTR- terrible earnings

AXL- poor earnings


Earnings:

FRI APR 30 BEFORE

AGN AGP AIV

AON AVP AXL

CEG CVH CVX

DISCA DHI ENDP

ITT JRCC NDAQ

NWL PAG SPG

UFS VFC


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. MAY. 3- Volatility Is Baaaaaaack (Hopefully)

The VXX (an instrument used to attempt to replicate the S&P 500 VIX volatility index) had its first higher close on a month-to-month basis since March 2009. What is interesting about this to me is that this was the first month in quite some time that I felt was actually an “up” month for the markets- mainly because I am biased by tracking stocks such as AAPL every day. Thus, I was a little surprised to see that the S&P 500 was only ahead 1.5%. So, what exactly is different? First, as evidenced by Friday, Goldman Sachs (GS) is behaving even worse than many market observers would expect it to particularly when the investigation into the company went from civil to criminal on Friday- a development that was actually largely expected! Second, commodities had a bang-up month. Very quietly, gold approached $1,200 an ounce anew with oil having breached $86/barrel. New developments such as the burgeoning crisis in the Gulf of Mexico contributed to the dramatic ascent in prices. Third, the threat of contagion in Europe became quite real. Greece’s bonds went into freefall with yields on bonds rising in nations such as Portugal, Ireland, and Spain. Counterbalancing all of this has been a tide of money from Europe looking to find a home, very strong corporate earnings and economic data, and hope- hope for an economic recovery and continued improved performance overall. For much of the last year, the atmosphere was one of living in fear…now it is one of that aforementioned “hope” with some “greed” tossed in for good measure in smaller stocks and remnants of “fear” showing how much air can be taken out of stocks on news such as what has occurred in GS. Thus, as we begin May, realize the atmosphere for the first half of the month at least will be one of volatility as the latter third of earnings season winds up along with more of a resolution to the Greek situation in the immediate-term and a more concrete picture of what will happen at GS combined with renewed terrorism fears based on the events of Saturday night in Times Square. Be ready.

Markets overseas were generally lower overnight but somewhat muted because of the May Day holiday. Hong Kong fell 1.4% with Germany down about 0.25% but markets in places like Tokyo and London were closed. There is a wealth of headlines this morning. There’s been an (expected) approval for an austerity package for Greece. There was an attempted car bomb attack in Times Square on Saturday (which thankfully failed big-time). There’s been a sudden increase in taxes in Australia on mining entities. The estimates on the oil slick in the Gulf continue to grow. The net of all of this is a bit of a rise in commodities and a weakened euro as doubts remain over whether Greece will adhere to terms of their deal much less if the damage is truly contained. Yet, AAPL is way ahead on positive sales data with GS sharply higher upon getting a vote of confidence from Warren Buffett over the weekend. This combination is leading to a small rise in the futures. Track GS and AAPL for signals as to what will happen today; the likelihood is that the markets will maintain a small rise in a quiet session. Focus on big cap techs and financials, the oil drillers, and the small caps in the news.

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

BPOP- 3 of 10 Puerto Rico-based banks were closed with BPOP acquiring the assets from one of them

POZN- won FDA approval of its arthritis drug (Vimovo)

OFG- acquired assets of Eurobank (EUBK) from FDIC

KT- closed near a high

GFIG- closed near a high after posting earnings

OCLRD- closed near a high

CTIB- closed near a high after posting earnings

AGN- featured on “Mad Money” on Friday night

DLB- closed near a high after posting earnings

CAL- announced mergers of equals with UAUA; CAL shareholders will receive 1.05 shares of UAUA for each CAL share they own

BRK/B- announced decent earnings over the weekend

RPTP- announced phase 2a NASH study met primary endpoints

SYY- decent earnings

VRX- decent earnings

DTG- rumors of a bidding war for the company

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

ENP- announced lower than expected dividend as well as an intention to explore an alternative to its partnership with DNR

MEE- closed near a low amid worries of government action regarding the company’s operations

WLP- closed near a low after California rescinded its planned rate increase

AAPL– closed near a low

GS- closed near a low after the Fed said it was launching a criminal investigation into GS

TSL- closed near a low

VSEA- closed near a low after posting bad earnings

MSTR- closed near a low after posting bad earnings

OSK- closed near a low for 2nd day after posting earnings

FSS- closed near a low after posting bad earnings

FTBK- closed near a low in continuing a massive reversal

WFR- closed near a low after posting bad earnings

GMCR- closed near a low for 2nd day after posting earnings

SPG- closed near a low after posting earnings

WLT- closed near a low for 2nd day after posting earnings

WYNN- closed near a low after posting earnings

JOYG- closed near a low

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

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

BHP, RTP- Australia imposed a somewhat anticipated surcharge type tax on these resource companies


Earnings:

MON MAY 3 BEFORE

AUXL AWI CLX

L MD SYY

VRX

MON MAY 3 AFTER

APC ASIA AUY

CAR CNQR CRK

EOG EXR FMC

FST GNK HCN

HLF HOLX LF

MCK NTRI PBI

PFG SM VMC


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
 
TUES. MAY 4- Cancer Research

The approval by the FDA of Dendreon's (DNDN) prostate cancer vaccine Provenge was a major coup for the company. It is in fact the only product that the company has been developing; they took a huge gamble and won with several analysts estimating the company could reap billions of dollars in revenues within a decade. The company has waged a three-year war with regulators over its drug. It has been a frequent subject of discussion among traders and scientists alike. Provenge is the first therapeutic entity which is designed to treat the body's immune system to destroy tumors rather than the common alternative which is to attack the tumors directly. Pretty heady stuff- the stuff of what has been entirely science fiction until now. I don't think it's a stretch to note that almost everyone reading this piece if not everyone has been touched by cancer in some way whether it be directly or a family member or friend. Thus, the FDA approval of Provenge opens up an array of possibilities in the world of cancer research. For day traders, the focus can now go on to companies attempting to develop drugs in the cancer immunotherapy genre rather than just an anecdote to the problem (instead of solving the problem). Companies such as tiny Oncothyreon (ONTY) and Celldex Therapeutics (CLDX) to big companies such as Bristol Myers (BMY) are feverishly attempting to develop similar products using similar methods. What this now does is open up a whole new group of stocks for day traders- particularly now- as the focus once the DNDN fever settles down is "who's next." Thus, expect shares of tiny companies to randomly soar (and fall back) as rumors spread over the coming days much less years as people in general (including day traders) try to play the game of "who can be the next DNDN."

Markets throughout the world were weaker overnight with Hong Kong down 0.2%, but China down over 1%. Most European bourses are down 1% as well. Commodities are mixed with oil down over 1%, but gold up a little. The dollar is again the strongest currency with it up slightly against the yen and the euro now testing 1.31. The major triggers seem to be worries about the approaching oil slick to the U.S. coastline and rumors that Spain will soon need a bailout as unemployment exceeds 20% there. Futures are retracing about half of yesterday’s gains at this point. For today, look for a very choppy session with prices remaining on the downside. Track the euro and keep an eye on the drillers and earnings plays as your main stocks to trade on the session.

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

SLXP- positive phase III results for Xifaxan

MCK- great earnings

NTRI- great earnings

CSTR- closed near a high

TEX- closed near a high on vague takeover rumors

ASIA- good earnings

PFG- decent earnings

SM- decent earnings

SNCR- good earnings

HLF- decent earnings

NKE- mentioned on “Mad Money” last night

CVS- decent earnings

IPXL- great earnings

CTSH- good earnings

PFE- decent earnings







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

CLF- closed near a low

ENP- closed near a low

BZH- poor earnings and share offering

LF- poor earnings

HOLX- poor earnings

GNK- poor earnings

PBI- poor earnings

EOG- poor earnings

APC- poor earnings

FMC- poor earnings

DEER- closed near a new trend low

TNL- poor earnings

PEI- share offering

AOL –closed near a low

MAC- poor earnings

SU- poor earnings

TEVA- poor earnings

ADM- poor earnings

EMR- poor earnings

OSG- poor earnings

RDN- poor earnings

COCO- poor earnings

SHOO- poor earnings






Earnings:

TUES MAY 4 BEFORE

ADM AMT ARM

BHI BZH COCO

CTSH CVS DIN

EMR HNT HSIC

LNT MA MAC

MLM MMC MRK

MRO NYX OSG

RDC RDN RTI

SHOO SU TEVA

VNO

TUES MAY 4 AFTER

ACAS ATW BRE

CEPH CHK ECLP

FRT INT IPI

MWA MYGN ONXX

PXD SBAC SGY

TIE TRLG UNM

XCO XL


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
 
Wed. May 5- British Elections

I’ve written in immense detail in this space about the problems facing Europe specifically in Greece, Spain, and Portugal, most recently warning of a pick-up of volatility in Monday’s piece. The European problems in turn led the euro to a breach of the crucial 1.30 to the dollar yesterday and put immense pressure on American stocks. I am sure there will be more to write on this topic as the situation deteriorates on the other side of the pond, but I want to briefly discuss a new European topic that few traders are paying attention to at this point. Namely, there are elections in Britain on Thursday. There are numerous topics on the table there which can have a substantial impact on the worldwide trading community such as continued talk there of a transaction tax on stock transactions. Most notably, what we may well see is the most divided parliament in over 100 years with the general end of two-party rule. As of this morning, most polls put the election results around the following numbers: Conservatives 35%, Labour 30%, Liberal Democrats 25% with the other 10% split among even smaller parties. With scandals such as British taxpayers footing bills for duck ponds and pornography (British politics is actually amazingly interesting), there looks to be a major shake-up of parliament with Labour losing its majority…but no one party taking control! It is likely that David Cameron- the Conservative leader- will have the first shot at forming a government but he’ll need major alliances to get anything done. Now, while it can be good to have divided government, it is not good to have such a paralyzed government that it’ll be ostensibly impossible to get anything done without major compromise- something very worrisome when many market experts worry about the British pound much less economy. So, keep a weary eye to the election results coming out of Britain as the week progresses as there may well be some impact come Friday morning particularly if the euro continues to plunge.

Markets were lower overnight throughout the world with Hong Kong down 2.1%, Germany down 0.5%, and London almost 1%. Oil is down 2% more although gold is slightly ahead. The dollar is flat against the yen but strengthening once again against the euro with the 1.29 level rapidly approaching. With the declining euro and pictures of Greek riots being flashed on TV, futures are falling again as well. Look for a weaker open with the euro leading the way today. Barring a freefall, there will likely be a slight bounce in the markets mid-day as the U.S. is seen as a bit of a safe haven right about now plus there will inevitably be rumors about Greece being released from the euro currency. Focus on the big caps, the relative strength/weakness plays, and the earnings plays once again.

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

OSIR- received FDA orphan drug status for Prochymal

XL- decent earnings

CHK- decent earnings

SLXP- closed near high

NTRI- closed near high after posting earnings

IPXL- closed near high

DVN- decent earnings

RRD- decent earnings

TWX- decent earnings



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

ITMN- FDA did not approve lung-drug Esbriet; CLDX, DNDN may move with it

MYGN- terrible earnings

TRLG- terrible earnings

SBAC- poor earnings

NWS- poor earnings

ONXX- poor earnings

BHI- poor earnings

CMA- Fed issuing warrants

CRAY- poor earnings

CAGC- closed near low significantly under stock offering price

WLK- closed near low after posting earnings

CLH- poor earnings

FWLT- poor earnings

SPW- poor earnings

GRMN- terrible earnings

PWR- poor earnings


Earnings:

WED MAY 5 BEFORE

AGU ANR AYE

CTB CTL DVN

FWLT GRMN HK

ICE ID IT

MED PHM PKD

PWR RRD SIRO

SPW TRW TWX

UPL VSH WCG

WMB XTO

WED MAY 5 AFTER

ADCT BMC CBS

CECO CELL CLR

CNW CXW ESS

EXM EXPD FLS

JAZZ KIM LVS

MUR OEH PL

PRU RIG SLXP

VALE



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. MAY 6- Australia Mining Issues

Last weekend, the Australian government imposed a proposed 40% tax on resource companies in a move designed to raise the government's coffers. It was a somewhat surprising move with three potential dampening effects and/or one positive effect. The positive first- what if it works? What if no behavior patterns change and everything goes along hunky-dory? According to Prime Minister Rudd, Australia would have taken in an additional $35 billion Australian dollars- a very sizable amount of money over the last decade. But at what cost? First, there have been numerous mergers, expansions, and acquisition in the resource industry in Australia in the last year. Companies such as BHP Billiton and Xstrata to grow many come to a halt on the Australian plan. The reason is simple: the proposed plan (scheduled to take effect in 2012) effective raises the bar for prospective buyers in the resources industry in Australia simply because profits will automatically be reduced due to the tax at the margins. Deals such as the proposed acquisition of MacArthur Coal by Peabody Energy (BTU) are now in danger because the acquisition targets suddenly don't have the same potential for profits. Second, there is a concern that the tax could halt Australia's nascent recovery. Resources companies compose about 10% of Australia's economy thus investment in crucial infrastructure much less the incentive to ascertain even more resources diminishes. Furthermore, it almost destroys the playing field for smaller start-up entities as they have to work that much harder to succeed. Finally, day traders (much less all American investors and government officials) will be watching the situation as it develops. There has been talk on and off of a similar tax in the United States. The likelihood of such a tax has diminished in recent weeks with the oil spill in the Gulf of Mexico, but with oil prices trending toward $100/barrel, it is entirely plausible that we may see a similar situation (or at least talk of a resources tax) spring up again as we progress toward Election Season 2010.

Markets in Asia were hit very hard overnight with Tokyo off 3.2% after a three day holiday, Hong Kong almost another 1%, and China 3% plus on worries their economy is slowing. As of this writing, the trend shifted a bit in Europe with the bourses up from 0.2% in London to 0.6% in Frankfurt. The bounce is partially because the U.S. stock market was near its intra-day low when Europe closed yesterday and partially because there was no other major news overnight. Oil is flat, gold up almost another 1%, and the dollar is a bit stronger across the board with the euro now under 1.28 to the dollar. For today, ahead of a jobs report tomorrow and after a failure by the markets to implode yesterday, the feeling is a bit more muted with cautious optimism out there. Despite the euro tumbling to almost 1.27 and TGT posting weak sales data, the futures failed to really break down in the early going. Thus, look for a quieter session today barring a complete collapse of the euro with prices on both sides of unchanged. Conditions will likely be fairly thin so it is much more of a ‘pick your spots’ session than we’ve seen in recent days with a heavy reliance on relative strength/weakness trades.

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

RIG- decent earnings

FLS- decent earnings

MED- great earnings

JAZZ- good earnings

SYMC- good earnings

ADCT- good earnings

CELL- good earnings

CLH- mentioned on “Fast Money” last night

FSYS- good earnings

MGA- good earnings

PCS- good earnings

SMG- good earnings

CAAS- good earnings

KERX- begin phase III registration program of Zerenex

DPS- decent earnings

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

JDSU- poor earnings

BMC- poor earnings

CECO- poor earnings

CBS- poor earnings

HIL- terrible earnings

MUR- poor earnings

CETV- closed near a low after posting terrible earnings

WHX- continued to decline after posting earnings Tuesday morning

EZPW- closed near a low

TKLC- poor earnings

TGT- weaker-than-expected retail sales data

Earnings:

THURS MAY 6 BEFORE

ARG BVF CI

DNR DPS DTV

EP FSYS FTO

GAP HEW HOC

LAMR MGM OCR

PCP PCS PNW

PXP RRI SFY

SMG THS TKLC

WNR


THURS MAY 6 AFTER

BGC CLNE CNQ

CPT CROX DCT

GXP HANS HLIT

HME KFT LEAP

LVS MELI MIL

PRE PSA ROVI

RST SGMS SQNM

STEC WRI WTW



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. MAY 7 - The Takeaway From An Extraordinary Day

As noted in our chatroom and over our audio feed, for once, despite my status as the Great Pontificator, I was at a loss for words (stop cheering/jeering, please) for quite some time. After thinking about it, I thought about writing a piece about the electronic markets versus the specialist system, just the computers, how things like this can happen, and about 10 other things which I will think about and write about over time once I feel more comfortable doing so with the passage of time and the acquiring of knowledge. Five distinct thoughts do come to mind which are worth discussing for all traders. First, from my vantage point, I was smart enough yesterday to trade when things were a little more settled in getting/out of positions rapidly, but when there was complete chaos, I decided to step away. I had absolutely no clue what was going on. I half-expected to see that a dirty bomb was tossed among the throngs of people in Athens with the image of the riots plastered on our television. I did not know if a terrorist got lucky with a car bomb in New York. I did not know if a nation defaulted on its debt. I did not know. I did not know. But what I did know was that it was better to be a bystander with no positions than to hemorrhage money. The time to try to make money was around 15 minutes after the calamity when things were volatile yet calmer. Second, I don’t want to hear one person yap about they should have been done this or they should have done that. See number one. I certainly did not know what was going on (have I mentioned that yet?) and I’m not taking a stab in the dark when I say that most people didn’t either. Most could not buy PG at 39 or Accenture at 0.01 a share unless they had orders (which are still being investigated). What if I bought a mere 1,000 shares of AAPL at 230 and it fell to 130? I’d be out $100,000 in minutes. Third, let’s go over the concept of the ‘fat finger.’ You know how you along with everyone else has hit a button and realized almost instantaneously that you made a mistake, i.e .you meant to buy instead of sell for instance? That is likely what happened yesterday when all was said and done. Fourth,
This caused real real pain yesterday. Many people and funds were totally ravaged. Numbers and computers can cause real real pain. Realize that. Finally, don’t take away from what actually did occur net-net. The markets finished down about where they were before the mess- over 3%. The euro is crumbling. The oil slick is getting closer. There is real trouble here. I wrote a piece on Monday about how volatility is back…welcome to it, traders.

Markets in Asia predictably fell overnight with Tokyo down 3.3% and Hong Kong down 1.1%. In Europe, markets were down sharply, rallied a bit, and then came in with Germany down 1%, London down 0.5%, and Paris down 2.2% as of this writing. Following British elections and the approval of the German parliament for the Greek aid, the dollar is notably weak with the euro back up over 1.27 and the yen back above 92 yen to the dollar. Futures are slightly over. Overnight, the major exchanges agreed to bust trades up or down at least 60% from where the price was from where the intra-day collapse began. What this means is this: if IBM was at 124, went to 3, and back to 123-
If you bought it at 20 and sold It at 100, you’re short from 100. So, a lot of those shorts are stuck. Combine with a great jobs report and there’s an uptick. Off-hand, the markets are going to track the currencies- no doubt about it. But if there is stabilization, look to play this as an A-B-A2 to the upside with the oversold conditions and decent news flow. Trade ostensibly only relative strength/weakness and only big caps.

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

ROVI- decent earnings

STEC- decent earnings

CROX- decent earnings

MED- closed near a high after posting good earnings

AIG- decent earnings

LVS- decent earnings; MGM and WYNN may trade with it





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

HANS- terrible earnings

GXDX- terrible earnings

RST- poor earnings

CLNE- poor earnings

CNQ- poor earnings

SQNM- poor earnings

SGMS- poor earnings

HIL- closed near a low after posting poor earnings

SMP- closed near a low after posting poor earnings

PPC- closed near a low after posting poor earnings



Earnings:

FRI MAY 7 BEFORE

CF EIX HUN

MIR PCG XEC



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. MAY 10- Viva Europe

On Friday, despite the market chaos, it was very notable that the euro was notably higher for the first time in quite awhile. Admittedly, the retracement was but a mere fraction of the ground it has lost against a basket of the world's currencies over the last several months, but it was still a very dynamic feature amid a weak equities environment. The reason for the rally was attributed to persistent rumors that the EU nations and IMF would act in a concerted manner over the weekend to halt the crisis. Fair enough. But markets certainly did not expect the result that did come out. Last night, European policy makers produced a loan package worth almost $1 trillion (not billion- trillion) as well as an array of proposed bond purchases in an aim to halt the euros slide. The 16 euro nations agreed to offer financial assistance of that amount to countries in severe financial straits (think Greece and potentially Spain and Portugal). The clear message is that the euro zone is going to defend its beloved currency through sheer financial will. Over the longer-run, I am not sure what it does as far as sending messages that getting oneself in trouble is inconsequential. I also am not sure if providing good paper after bad is going to necessarily work. In the intermediate-term, there is major upheaval right now in German politics and if they have to restructure the Bundesrat, this deal may need to be restructured. However, what it does do in the immediate-term is buy time. My guess is "a lot" of time. This is why the markets are so sharply ahead this morning. The crisis in the immediate-term is seemingly over because no matter what, Europe is showing it's going to come together to bail out the weak links. You are going to hear a lot of bearish talk these next few days. A lot of it may come to fruition. Ergo if the markets were inherently weak last week mainly over the euro, why shouldn't they rally now that the crisis is over in the immediate-term? Thus as you day trade today, certainly keep an eye on the euro because that is going to tell a lot of the story. But if it is stable, expect much less volatility today much less the next few days as compared to last week and don't get trapped in short squeezes. What was done over the weekend was unprecedented, unexpected, and far above what anybody would ever have thought possible. Let the euro tell the tale as we kick off one of the most important weeks in the history of modern finance.

Markets, needless to say, were sharply higher overnight with equities rallying 1.5-2.5% throughout Asia and 4% to 5% in Europe (with France up 8%). Oil is up almost 4%, gold down almost 2%, and the euro up about 2 ½ cents against the dollar. Futures are up gigantic- about 3.5% as of this writing. Today seems to be one of those days where it’s great to be an investor but much harder to be a trader. Many people will use the initial strength as a selling opportunity…but just as many people (if not more) who are short will be scared and will gradually cover (forced or otherwise). Thus, assuming the euro holds the 1.295-1.305 general area, look for relatively range-bound trading following the strong open. Trade relative weakness in particular (as there will be precious little of it) otherwise simply trade the ranges of the big cap stocks.


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

GS, AIG, CLF- all traded relatively strong Friday in closing higher on the day

CAGC- decent earnings






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

ITMN- closed near a low once again after their horrible drug data results on Wednesday

GXDX- closed near a low after posting poor earnings

DRWI- closed near a low after posting poor earnings

LEAP- closed near a low after posting poor earnings

DTG- closed near a low

MRX- closed near a low

ACM- closed near a low

R- closed near a low

MHK- closed near a low

PLD- closed near a low

VRX- closed near a low

AWI- closed near a low

TEX- closed near a low

BID- closed near a low

AMLN- closed near a low

HSNI- closed near a low

LAWS- closed near a low

SGMS- closed near a low

CHNG- poor earnings

Earnings:

MON MAY 10 BEFORE

BPZ BR DF

DISH DYN ENER

LPX NRG SOL

TSN WPI

MON MAY 10 AFTER

AGO FLR LDK

LM MBI MDR

MDVN MR PCLN

SLXP VISN


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
 
TUES. MAY 11- What Now, Euro?

In a day of short covering on some very crowded short positions, the most crowded of all shorts failed to launch yesterday. Despite yesterday’s 405 point Dow rally good for 3.9%, a 49 point S&P 500 rally good for 4.4% and a 109 point NASDAQ rally good for 4.8%, the euro currency finished down against a basket of the world’s currencies. It actually makes some sense when one thinks about it. If you love apples and have three of them at home, they are pretty valuable commodities to you. If you have 175 apples left (some beginning to turn) after you’ve just eaten three apples, having all those apples probably doesn’t matter as much because all you really need is a few more anyway. Well, there is a certain quantity of supply of euros in the world. All of a sudden, that supply just went up by a tremendous amount. If the rest of the world’s supply of currencies is steady, well, doesn’t that make each euro worth less via dilution? Yet, the markets rallied. Why? This one is simple and harks back to yesterday’s blog. The belief is that despite the creation of this paper out of thin air (and despite the IMF guaranteeing they will help contribute), these electronic numbers wipe out the immediate issue. Nations like Greece can tap the monies (again, as long as the agreement among the EU countries maintains itself) which creates a bastion of calm. Now, austerity measures will still take effect, but there is a safeguard in effect. What will be interesting for day traders in the coming days is to see if the correlation between the euro and the equity markets remains valid. There has been a near direct correlation in the last few weeks; that changed yesterday with the euro going down on increased supply yet the problem solved in the immediate-run. What we need to watch for in coming days is if the euro truly goes into freefall and if so, would that totally undermine the system on the other side of the pond? Conversely, if the euro stabilizes (or falls gradually in a controlled manner) would the bull market of 2010 assert itself? These are not questions I am qualified to answer. But I know this as an intra-day active trader- it is extraordinarily important in the next 48-96 hours to watch for the relative performance of the euro vs S&P 500 because of the two become decoupled and/or have no correlation, it’ll be time to move on (for now) to the next point of focus for the markets. And if the two are still truly correlated with yesterday a mere aberration and the euro slides dramatically from present levels, watch out.

Markets overnight were down with prices falling a bit over 1% on average in Asia with declines a bit sharper in Europe as the bourses are down just over 2% on average. Oil is down 1.5% with gold approaching new highs, up just under 1%. The trigger seems to be that oft-discussed euro which is down about 1% against the dollar- to the level where it was trading before the rescue package was announced. Consequently, futures are sharply lower with the S&P 500 futures down about 1% as of this writing. Barring a drop towards 1.25 in the euro, look for a bit of a quieter day albeit a very choppy one with a downside bias with the euro quite weak. Focus on relative strength plays as well as quick moves in the big caps for your trading focus.

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

LDK- decent earnings

LM- decent earnings

SLXP- good earnings

HQS- good earnings

TRGL- good earnings

ADY- good earnings

AAPL- closed near a high

AIG- closed near a high and announced Fairholme Capital increased its stake

WLT- closed near a high

CLF- closed near a high

BUCY- closed near a high

MEE- closed near a high

GOOG- closed near a high

BIDU- closed near a high

ESRX- closed near a high

CTXS- closed near a high

NTAP- closed near a high

CTSH- closed near a high

CREE- closed near a high

SNDK- closed near a high

BRK/B- closed near a high

DHR- closed near a high

AGN- closed near a high

CXO- closed near a high

VNO- closed near a high

NFX- closed near a high

ANF- closed near a high

NKE- closed near a high

BTU- closed near a high

SWK- closed near a high

PXD- closed near a high

ATI- closed near a high

ZLC- closed a deal to obtain new financing

CRUS, AMT- on “Mad Money” last night

JASO- decent earnings

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

PCLN- poor future earnings guidance

MBI- poor earnings

FLR- poor earnings

NUAN- poor earnings

JAZZ- share offering

V- closed near an intra-day low in an island reversal

DF- closed near a low after posting terrible earnings

ITMN- closed near a low

DNDN- closed near a low

KSP- closed near a low

BEE- 40 million share offering




Earnings:

TUES MAY 11 BEFORE

ALD BPZ HEAT

JASO MFB SEED

TUES MAY 11 AFTER

AONE CTRP DIS

ERTS HMIN SPWRA


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
 
worthless thread, i didn't spend 5 seconds trying to read your endless paragraph and your random stock symbols

waste of space, no one cares keep it simple or post charts
 
JTNet-

Many people want a broad understanding (at the top of my list, myself) of what is occurring in the world. I've found (the hard way) that if one doesn't have a specific knowledge base of the forces affecting markets, one tends to lose.

As far as the symbols, they are not random. Those are stocks in the news and/or closed near highs or lows yesterday as stated on the blog every single day. To me, these provide momentum-based ideas and are the focus of my trading each day. I don't do a tremendous amount of trades each day; I just pick spots based on that list of symbols.

I always write this passage each day:
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.

Well, yesterday, as GS got negative on the session, i.e. going thru unchanged, I tried shorting 5,000 shares of the stock although I unfortunately only got 1000 with the trade below (it was the first trade I'd done in an hour and I did not do another one for 1 1/2 hours thereafter):

Date Time Sym Side Qty Exe Price Acct Dest Ord Rec ID
05/10/10 13:41:36 GS SLD SHRT 20 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 15 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 65 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 55 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 45 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 100 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 55 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 45 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 100 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 100 143.42 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 100 143.42 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 100 143.41 EPIPHANY18 NIX 16775085
05/10/10 13:41:36 GS SLD SHRT 100 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:41:37 GS SLD SHRT 100 143.4 EPIPHANY18 NIX 16775085
05/10/10 13:42:38 GS BOT 62 142.72 EPIPHANY18 NIX 16775864
05/10/10 13:42:38 GS BOT 100 142.72 EPIPHANY18 NIX 16775864
05/10/10 13:42:38 GS BOT 25 142.72 EPIPHANY18 NIX 16775864
05/10/10 13:42:38 GS BOT 100 142.72 EPIPHANY18 NIX 16775864
05/10/10 13:42:39 GS BOT 113 142.72 EPIPHANY18 NIX 16775864
05/10/10 13:42:39 GS BOT 100 142.71 EPIPHANY18 NIX 16775864
05/10/10 13:42:44 GS BOT 200 142.8 EPIPHANY18 NIX 16775903
05/10/10 13:42:44 GS BOT 100 142.8 EPIPHANY18 NIX 16775903
05/10/10 13:44:28 GS BOT 100 142.35 EPIPHANY18 NIX 16777087
05/10/10 13:44:28 GS BOT 100 142.35 EPIPHANY18 NIX 16777087

Had I not honed in on that from yetserday's list, I probably never would have done the trade and missed out on the $750 or so profit I earned on the trade (although I certainly wish it was $3,750...I just was not fast enough to get all 5,000 shares...nobody to blame but myself).

As far as "keeping it simple," I cannot make it any more simpler. I provided what I felt to be a relatively easy-to-understand explanation for the reason the euro was down yesterday while the stocks rallied while noting it is weak again this morning along with the implications (or lack thereof) of the euro's performance relative to the other world currencies. I also do not go into specifics for each stock symbol over and above the reasons cited; it is up to each trader to do some homework.

I wish you much luck with your own trading.



Quote from jtnet:

worthless thread, i didn't spend 5 seconds trying to read your endless paragraph and your random stock symbols

waste of space, no one cares keep it simple or post charts
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