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Epiphany Trading Daily Blog
- Thread starter erikrkolodny
- Start date
erikrkolodny
ET Sponsor
I appreciate the kind words, nickdes and zdreg...good luck trading.
erikrkolodny
ET Sponsor
On Monday, the following link was issued from the SEC:
http://www.sec.gov/rules/final/2010/34-61595-secg.htm
In essence, the SEC adopted Rule 201 of Regulation SHO which is designed to prevent abusive short selling. Quoting directly from the SEC dictum: âRule 201 of Regulation SHO requires a trading center1 to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent it from executing or displaying any short sale order of a "covered security," absent an exception, at a price that is equal to or below the current national best bid if the price of that security declines intra-day by 10% or more from the security's closing price as determined by the covered security's listing market as of the end of regular trading hours on the prior day. If the security experiences such a 10% or more price decline, the Rule's restrictions will be in place for the trading day on which the circuit breaker is triggered and the following day. In addition, a trading center's policies and procedures must be reasonably designed to permit the execution or display of an order marked "short exempt," regardless of its price. A trading center must also regularly surveil its policies and procedures to ascertain their effectiveness and take prompt action to remedy any deficiencies. Rule 201 applies to any "covered security," which is any NMS stock. Thus, Rule 201 generally applies to all securities, except options, that are listed on a national securities exchange, whether traded on an exchange or in the over-the-counter market.â Ergo, what is notable for day traders here is that if a stock experiences a decline of 10% or more from the previous dayâs close, a stock cannot be shorted at a price at or below the prevailing bid price. For instance, if C was 4, down 70 cents with a bid-offer of 4 to 4.01, one could not place a sell order for 25,000 shares to short at 3.99. The order would instead go in at 4.01. The other thing of note is that the effective date for these amendments was May 10, 2010, but all market participants have until November 10, 2010 to adopt the policy. The SEC actually presented several different rules which ranged from a ban of short selling if a stock fell sharply to the uptick rule to the alternative uptick rule that was ultimately approved. So, simply be ready for this rule change because to trading because it is coming.
Markets in Asia were generally higher overnight with Hong Kong up 0.3% and Australia up a similar amount. Prices are higher in Europe, but quite disparate in the nominal amount with the FTSE up 0.2% but the DAX ahead over 1%. Gold continues its breakout in trading ahead 1.5% anew and oil up slightly. The euro is actually making slight gains this morning. Futures are trading slightly higher after trading sharply lower overnight. Itâs yet another day of euro tracking. If the euro remains steady, look for the gains to hold but if it gives way, the gains will rapidly dissolve. The band of the trading range will likely narrow with an upside bias for most of the session as the market failed to yield much of Mondayâs strong gains despite a weakened euro yesterday.
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
CCME- closed near a high after raising earnings guidance
ASEI- decent earnings
ACHN- announced positive phase 1b clinical trial of ACH-1625; drug used to treat Hepatitis C
WX- decent earnings
SMTX- good earnings
HMIN- good earnings
CWS- good earnings
NLST- good earnings
CTRP good earnings
RIG- closed near a high
Bad-The following stocks have bad news and/or a weak technical pattern
DIS- poor earnings
ERTS- poor earnings
SPWRA- poor earnings
AONE- poor earnings
DFT- 11 million share offering
BXP- filed $2 billion mixed securities shelf
WLT- closed near a low
CLF- closed near a low
FCX- closed near a low
POT- closed near a low
GS- closed near a low
X- closed near a low
CF- closed near a low
NTY- closed near a low
MS- allegations have been made that MS misled investors about CDOs although hthe company has not been contacted by the US Justice Department
Earnings:
WED MAY 12 BEFORE
M
WED MAY 12 AFTER
ANW CSCO DRYS
SLW URS WFMI
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
http://www.sec.gov/rules/final/2010/34-61595-secg.htm
In essence, the SEC adopted Rule 201 of Regulation SHO which is designed to prevent abusive short selling. Quoting directly from the SEC dictum: âRule 201 of Regulation SHO requires a trading center1 to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent it from executing or displaying any short sale order of a "covered security," absent an exception, at a price that is equal to or below the current national best bid if the price of that security declines intra-day by 10% or more from the security's closing price as determined by the covered security's listing market as of the end of regular trading hours on the prior day. If the security experiences such a 10% or more price decline, the Rule's restrictions will be in place for the trading day on which the circuit breaker is triggered and the following day. In addition, a trading center's policies and procedures must be reasonably designed to permit the execution or display of an order marked "short exempt," regardless of its price. A trading center must also regularly surveil its policies and procedures to ascertain their effectiveness and take prompt action to remedy any deficiencies. Rule 201 applies to any "covered security," which is any NMS stock. Thus, Rule 201 generally applies to all securities, except options, that are listed on a national securities exchange, whether traded on an exchange or in the over-the-counter market.â Ergo, what is notable for day traders here is that if a stock experiences a decline of 10% or more from the previous dayâs close, a stock cannot be shorted at a price at or below the prevailing bid price. For instance, if C was 4, down 70 cents with a bid-offer of 4 to 4.01, one could not place a sell order for 25,000 shares to short at 3.99. The order would instead go in at 4.01. The other thing of note is that the effective date for these amendments was May 10, 2010, but all market participants have until November 10, 2010 to adopt the policy. The SEC actually presented several different rules which ranged from a ban of short selling if a stock fell sharply to the uptick rule to the alternative uptick rule that was ultimately approved. So, simply be ready for this rule change because to trading because it is coming.
Markets in Asia were generally higher overnight with Hong Kong up 0.3% and Australia up a similar amount. Prices are higher in Europe, but quite disparate in the nominal amount with the FTSE up 0.2% but the DAX ahead over 1%. Gold continues its breakout in trading ahead 1.5% anew and oil up slightly. The euro is actually making slight gains this morning. Futures are trading slightly higher after trading sharply lower overnight. Itâs yet another day of euro tracking. If the euro remains steady, look for the gains to hold but if it gives way, the gains will rapidly dissolve. The band of the trading range will likely narrow with an upside bias for most of the session as the market failed to yield much of Mondayâs strong gains despite a weakened euro yesterday.
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
CCME- closed near a high after raising earnings guidance
ASEI- decent earnings
ACHN- announced positive phase 1b clinical trial of ACH-1625; drug used to treat Hepatitis C
WX- decent earnings
SMTX- good earnings
HMIN- good earnings
CWS- good earnings
NLST- good earnings
CTRP good earnings
RIG- closed near a high
Bad-The following stocks have bad news and/or a weak technical pattern
DIS- poor earnings
ERTS- poor earnings
SPWRA- poor earnings
AONE- poor earnings
DFT- 11 million share offering
BXP- filed $2 billion mixed securities shelf
WLT- closed near a low
CLF- closed near a low
FCX- closed near a low
POT- closed near a low
GS- closed near a low
X- closed near a low
CF- closed near a low
NTY- closed near a low
MS- allegations have been made that MS misled investors about CDOs although hthe company has not been contacted by the US Justice Department
Earnings:
WED MAY 12 BEFORE
M
WED MAY 12 AFTER
ANW CSCO DRYS
SLW URS WFMI
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
erikrkolodny
ET Sponsor
THURS. MAY 13- When 2+2=5
When you were a kid, did you ever take a piece of paper and rip it into 10 pieces because you were just that bored? And if you did, donât you wish you had so much free time on your hands in the present that you were just that bored? In any case, what did you get when you ripped that piece of paper into 10 smaller pieces? If you said â10 smaller pieces of paper,â you get a gold star. So, what do you get when you split a stock 10 for 1? If you said, â10 shares for each share held,â youâll need to give me your gold star back. Particularly in a bull market, the math does not hold. I give you the most recent example out there. Yesterday, BIDUâs 10-1 stock split became effective on the market open post Tuesdayâs close of 71.42. In yesterdayâs NASDAQ, a 2%-3% rally would have been normal. However, BIDU actually traded ahead almost 10% at one point yesterday. Why does this happen (particularly in bull market environments)? Itâs almost nonsensical, but the reason is actually common sense. Most smaller investors (and some mutual funds) only like to buy lower-priced stocks. They wonât touch a GOOG at 500, for instance but they have no problem buying SIRI at 1. The thought process is as such: âI canât buy as many shares of GOOG as I can of SIRI.â Strictly hypothetical, but if the prospects for GOOGâs business call for 100% growth whereas SIRIâs prospects call for a 25% decline in business over the next three years, wouldnât it be more likely that the share price of GOOG would double than the likelihood that SIRI has an explosive upside move? No matter though when it comes to stock splits. BIDU at 71 with 10 times as many shares outstanding is the exact same as BIDU at 710 with 1/10% the shares. However, John and Jane Investor suddenly think that $7,000 thrown into the BIDU pot for 100 shares may be a good idea (even though itâs the same thing as if theyâd bought 10 shares at 700) if the stock price doubled- because theyâd double their money from 700 to 1400 just as easily as from 70 to 140. Ask Warren Buffettâs Berkshire A shareholders if stock splits matter. With this in mind, again in a rising tide, it gives some speculative players an incentive to buy shares because they appear cheaper- even if they arenât. For day traders, there are three main ways to play this. My favorite way is to offer the stock way above market in the very early pre-hours session. For instance, at 6:30AM ET yesterday, I had an offer to on BIDU at 80 just in case somebody came in and did not do homework. Second, I love the unchanged play. On good market days, if stocks like BIDU cannot hold up, they are great shorts thru unchanged typically and vice versa. Finally, on strong market days, a stock like BIDU will usually gap higher and then come in a little. But if it gets back to where it opened, itâs usually a buy. So, be aware of major stock splits as such knowledge can definitely enhance your trading.
Markets overnight were higher throughout the world with markets up 1% in Hong Kong, 2.2% in Tokyo although more muted in Europe with London up slightly and Frankfurt up 0.7%. Notably, oil and gold are both weaker with the euro below 1.26. Futures are slightly weaker as there is a tug-of-war between CSCO and commodity weakness versus trapped shorts and momentum players believing in the EU plan. Today looks to be relatively quiet (when compared to the last few days) with trading on both sides of unchanged albeit with an upside bias based on broad sector strength. The bias should remain to the upside barring a dramatic move in 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
WFMI- good earnings
URS- good earnings
SY- SAP buying out company for $65/ share
DECK, HLF, CLNE, CMCSA- featured on âMad Moneyâ last night
NCS- closed near a high
MBLX- closed near a high after receiving FDA clearance for Telles project
BIDU- closed near a high after announcing a stock split
IBM- closed near a high after issuing positive financial guidance
AMZN- closed near a high
GS- closed near a high
FCX- closed near a high
MEE- closed near a high
CAM- closed near a high
INFA- closed near a high
NFLX- closed near a high
CREE- closed near a high
CTRP- closed near a high
WLP-closed near a high
GIL- decent earnings
X- closed near a high and upgraded by Goldman Sachs
Bad-The following stocks have bad news and/or a weak technical pattern
CSCO- poor earnings
DRYS- poor earnings
AIG- closed near a low
TMH- closed near a low after posting poor earnings
KSS- poor earnings
Earnings:
THURS MAY 13 BEFORE
ACXM AMSC GIL
KSS URBN VIT
WEN
THURS MAY 13 AFTER
ALKS CA DAR
JWN NVDA
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
When you were a kid, did you ever take a piece of paper and rip it into 10 pieces because you were just that bored? And if you did, donât you wish you had so much free time on your hands in the present that you were just that bored? In any case, what did you get when you ripped that piece of paper into 10 smaller pieces? If you said â10 smaller pieces of paper,â you get a gold star. So, what do you get when you split a stock 10 for 1? If you said, â10 shares for each share held,â youâll need to give me your gold star back. Particularly in a bull market, the math does not hold. I give you the most recent example out there. Yesterday, BIDUâs 10-1 stock split became effective on the market open post Tuesdayâs close of 71.42. In yesterdayâs NASDAQ, a 2%-3% rally would have been normal. However, BIDU actually traded ahead almost 10% at one point yesterday. Why does this happen (particularly in bull market environments)? Itâs almost nonsensical, but the reason is actually common sense. Most smaller investors (and some mutual funds) only like to buy lower-priced stocks. They wonât touch a GOOG at 500, for instance but they have no problem buying SIRI at 1. The thought process is as such: âI canât buy as many shares of GOOG as I can of SIRI.â Strictly hypothetical, but if the prospects for GOOGâs business call for 100% growth whereas SIRIâs prospects call for a 25% decline in business over the next three years, wouldnât it be more likely that the share price of GOOG would double than the likelihood that SIRI has an explosive upside move? No matter though when it comes to stock splits. BIDU at 71 with 10 times as many shares outstanding is the exact same as BIDU at 710 with 1/10% the shares. However, John and Jane Investor suddenly think that $7,000 thrown into the BIDU pot for 100 shares may be a good idea (even though itâs the same thing as if theyâd bought 10 shares at 700) if the stock price doubled- because theyâd double their money from 700 to 1400 just as easily as from 70 to 140. Ask Warren Buffettâs Berkshire A shareholders if stock splits matter. With this in mind, again in a rising tide, it gives some speculative players an incentive to buy shares because they appear cheaper- even if they arenât. For day traders, there are three main ways to play this. My favorite way is to offer the stock way above market in the very early pre-hours session. For instance, at 6:30AM ET yesterday, I had an offer to on BIDU at 80 just in case somebody came in and did not do homework. Second, I love the unchanged play. On good market days, if stocks like BIDU cannot hold up, they are great shorts thru unchanged typically and vice versa. Finally, on strong market days, a stock like BIDU will usually gap higher and then come in a little. But if it gets back to where it opened, itâs usually a buy. So, be aware of major stock splits as such knowledge can definitely enhance your trading.
Markets overnight were higher throughout the world with markets up 1% in Hong Kong, 2.2% in Tokyo although more muted in Europe with London up slightly and Frankfurt up 0.7%. Notably, oil and gold are both weaker with the euro below 1.26. Futures are slightly weaker as there is a tug-of-war between CSCO and commodity weakness versus trapped shorts and momentum players believing in the EU plan. Today looks to be relatively quiet (when compared to the last few days) with trading on both sides of unchanged albeit with an upside bias based on broad sector strength. The bias should remain to the upside barring a dramatic move in 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
WFMI- good earnings
URS- good earnings
SY- SAP buying out company for $65/ share
DECK, HLF, CLNE, CMCSA- featured on âMad Moneyâ last night
NCS- closed near a high
MBLX- closed near a high after receiving FDA clearance for Telles project
BIDU- closed near a high after announcing a stock split
IBM- closed near a high after issuing positive financial guidance
AMZN- closed near a high
GS- closed near a high
FCX- closed near a high
MEE- closed near a high
CAM- closed near a high
INFA- closed near a high
NFLX- closed near a high
CREE- closed near a high
CTRP- closed near a high
WLP-closed near a high
GIL- decent earnings
X- closed near a high and upgraded by Goldman Sachs
Bad-The following stocks have bad news and/or a weak technical pattern
CSCO- poor earnings
DRYS- poor earnings
AIG- closed near a low
TMH- closed near a low after posting poor earnings
KSS- poor earnings
Earnings:
THURS MAY 13 BEFORE
ACXM AMSC GIL
KSS URBN VIT
WEN
THURS MAY 13 AFTER
ALKS CA DAR
JWN NVDA
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
erikrkolodny
ET Sponsor
FRI. MAY 14- Push It Real Good
A dialogue I was having with someone the other day sparked the following thought: what should one do if faced with the pleasant situation of earning a dayâs pay by 9:35AM ET. Most people do one of two things. The terrible thing they do is up their size on future trades, because, well, they are ahead and it is âhouseâ money. Of course, this could not be further from the truth because last time I checked, the money I earn before 9:35AM ET(and many days, before 7:35AM ET) is in my account already and belongs to me and me only. The other thing that traders typically do when in this happy predicament is to shut the computer off. Yes, I agree- it is a measure of good discipline to get ahead and stay ahead. But, let's say you want to average $1,000 a day of income. You are up $500 day one, $1,000 day two, $1,000 day three, down $1,000 on day four, and up $1,000 on day five. That means you are up $2,500 ($500 a day). If on day 6, you storm out to a $2,000 lead, why not build on that? What does one trade or one day have to do with another? So, why change anything? Basically, when you have a good day by, say,10AM, be pleased...but realize there are bad days out there to come so whatever youâre doing by 10AM, keep doing it. One trade and one day has very little if anything to do with another. I know for instance that it is much easier for me to earn a living on days like last Thursday when the markets are really moving than the bulk of yesterday when things were quiet. There are people, I am sure who will disagree, with me, but my core belief has always been to not change your mentality just because you're ahead because you may miss out on something great.
Markets were down in Asia with Tokyo and Hong Kong both down about 1.5%. In Europe, the bourses are falling very heavily with prices down from 1.3% in Germany to 2.3% in France. The euro continues to decline as the 1.24 level is approached with talk of a potential breakup of the entire mechanism by the likes of people like former prime ministers who helped construct the currency in the first place. Gold is approaching $1,250/ounce with oil down yet again to the tune of 2%. Here were also reports overnight that the oil spill in the Gulf may be substantially worse than expected. All of these factors are lending to a lower open for Wall Street. It looks to be a very dangerous day; Fridays can have some very exaggerated moves on days in which currencies are moving. Focus on relative strength/weakness plays, the stocks in the news (such as RIG), and the small-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
HAUP- closed near a high after launching live TV support for the iPad and iPhone
IFLG- continued to rally in closing near a high after announcing it will enable a product at the Premiere SAP Conference
SPDE- closed near a high after announcing its attendance at a conference
CGX- closed near a high after the CEO announced heâd bought a substantial position in the company
CWS- closed near a high
RPC- closed near a high
YHOO- mentioned on âMad Moneyâ last night
Bad-The following stocks have bad news and/or a weak technical pattern
NVDA- poor earnings
JWN- poor earnings
CA- poor earnings
ALKS- poor earnings
DGW- closed near a new trend low
ASIA- closed near a low
GS- closed near a low
BIDU- close near a low
AMZN- closed near a low
AIG- closed near a low
POT- closed near a low
CLF- closed near a low
PNC- closed near intra-day low
KSS- closed near a low after posting earnings
PBH- closed near a low after posting earnings
RAS- closed near a low
AGNC- share offering
NS- share offering
JKS- 5.84 million share IPO at $11.00 per share, at the low end of the $11-13 range
NOR- 10 million share IPO at $8 per share at low end of 8-9 range and was originally supposed to price 16.67 million shares at 14-16
V, MA- U.S. Senate arroved Durbin amendment yesterday which will allow the Federal Reserve to impose limits on debit-card feeds collected by banks; BAC, WFC, and JPM may also be affected
Earnings:
FRI MAY 14 BEFORE
JCP
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
A dialogue I was having with someone the other day sparked the following thought: what should one do if faced with the pleasant situation of earning a dayâs pay by 9:35AM ET. Most people do one of two things. The terrible thing they do is up their size on future trades, because, well, they are ahead and it is âhouseâ money. Of course, this could not be further from the truth because last time I checked, the money I earn before 9:35AM ET(and many days, before 7:35AM ET) is in my account already and belongs to me and me only. The other thing that traders typically do when in this happy predicament is to shut the computer off. Yes, I agree- it is a measure of good discipline to get ahead and stay ahead. But, let's say you want to average $1,000 a day of income. You are up $500 day one, $1,000 day two, $1,000 day three, down $1,000 on day four, and up $1,000 on day five. That means you are up $2,500 ($500 a day). If on day 6, you storm out to a $2,000 lead, why not build on that? What does one trade or one day have to do with another? So, why change anything? Basically, when you have a good day by, say,10AM, be pleased...but realize there are bad days out there to come so whatever youâre doing by 10AM, keep doing it. One trade and one day has very little if anything to do with another. I know for instance that it is much easier for me to earn a living on days like last Thursday when the markets are really moving than the bulk of yesterday when things were quiet. There are people, I am sure who will disagree, with me, but my core belief has always been to not change your mentality just because you're ahead because you may miss out on something great.
Markets were down in Asia with Tokyo and Hong Kong both down about 1.5%. In Europe, the bourses are falling very heavily with prices down from 1.3% in Germany to 2.3% in France. The euro continues to decline as the 1.24 level is approached with talk of a potential breakup of the entire mechanism by the likes of people like former prime ministers who helped construct the currency in the first place. Gold is approaching $1,250/ounce with oil down yet again to the tune of 2%. Here were also reports overnight that the oil spill in the Gulf may be substantially worse than expected. All of these factors are lending to a lower open for Wall Street. It looks to be a very dangerous day; Fridays can have some very exaggerated moves on days in which currencies are moving. Focus on relative strength/weakness plays, the stocks in the news (such as RIG), and the small-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
HAUP- closed near a high after launching live TV support for the iPad and iPhone
IFLG- continued to rally in closing near a high after announcing it will enable a product at the Premiere SAP Conference
SPDE- closed near a high after announcing its attendance at a conference
CGX- closed near a high after the CEO announced heâd bought a substantial position in the company
CWS- closed near a high
RPC- closed near a high
YHOO- mentioned on âMad Moneyâ last night
Bad-The following stocks have bad news and/or a weak technical pattern
NVDA- poor earnings
JWN- poor earnings
CA- poor earnings
ALKS- poor earnings
DGW- closed near a new trend low
ASIA- closed near a low
GS- closed near a low
BIDU- close near a low
AMZN- closed near a low
AIG- closed near a low
POT- closed near a low
CLF- closed near a low
PNC- closed near intra-day low
KSS- closed near a low after posting earnings
PBH- closed near a low after posting earnings
RAS- closed near a low
AGNC- share offering
NS- share offering
JKS- 5.84 million share IPO at $11.00 per share, at the low end of the $11-13 range
NOR- 10 million share IPO at $8 per share at low end of 8-9 range and was originally supposed to price 16.67 million shares at 14-16
V, MA- U.S. Senate arroved Durbin amendment yesterday which will allow the Federal Reserve to impose limits on debit-card feeds collected by banks; BAC, WFC, and JPM may also be affected
Earnings:
FRI MAY 14 BEFORE
JCP
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
erikrkolodny
ET Sponsor
MON. MAY. 17- Taking A Macro Step Back
I started writing about the situation in Greece in this space several months ago. I've described the situation and tried to provide a guide for exactly why I noted a few months ago that the likelihood of riots in Athens by summertime was quite high. I want to take a step back though from the specifics of the situation for a moment to simply describe why this is important. It literally sickens me after I've seen images of protesters clashing with police and members of the Greek armed forces to the point where innocent pregnant women have been killed/trampled. It is almost as sickening whenever I hear complete uneducated and ignorant people say that Greece doesn't matter with callousness, disdain, and sheer stupidity. In the United States, we take for granted that a dollar bill is worth the same in the downtrodden slums of East St. Louis as it is in the wealthy town of Atherton, California. We take for granted that when Michigan plays Ohio State, the National Anthem of the United States is sung rather than the state songs of both states. This is not true in Europe. I have been blessed to have many European friends. Yet, I cannot imagine my French friends singing "G-d Save The Queen" any more than I can imagine the Londoners and Dubliners I know singing Greece's "The Hymn To Freedom." Thus, the entire mechanism of the euro is actually an amazing concept and an experiment which I hope succeeds over and above economics. But it always comes down to economics, doesn't it? Here's the issue: if Greece is let go out of the euro, it's a sign that the concept is beginning to fail if not already failed. It'd also effectively force the Greeks to begin using their own currency again and devalue it substantially. Imagine if overnight, your wages were cut in half (or more). The alternative is to cut wages 25% or so yet stay in the euro system all the while cutting social programs across the board to reduce burgeoning and crippling deficits. Even if Greece is spun free, there are problems in Spain, Portugal, and Italy as well as other nations like Thailand where massive bloodshed occurred once again over the weekend. These problems can (and already are) spreading like wildfire to places like Britain where the pound is getting thrashed. In the interim, as the dollar strengthens, it makes foreign goods that much cheaper...which blows an even bigger hole in the U.S. deficit. Yet, multinational corporations such as IBM potentially take an earnings hit because of slower overall growth in Europe. Printing one's way out of the problem isn't the issue either- ask Germans who used bags of marks to buy a loaf of bread in the 1930's (which set up the power vacuum for Hitler) how they felt about just printing more paper. This is a real mess- one much more serious than many people can fathom. And the U.S. is not immune. So, the next time you see tear gas being thrown at a crowd of people in an Athenian thoroughfare, really watch it and understand the seriousness of the situation- in the immediate-term, it is shaking up day trading and in the longer-run, it truly makes for a powerful question of whether the world we live in truly is all that modern.
Last night was one of the more fascinating spates of activity as Iâve witnessed in recent memory. Both Tokyo and Hong Kong closed down in excess of 2% each with Shanghai down 5% after announcing a wide array of credit tightening measures. Dow futures overnight traded down about 130 points (the nadir of the evening) just after midnight when I went to bed, but by my 4:30AM wake-up call, the indexes had recovered a significant amount of ground. Credit Suisse and Morgan Stanley recommended European stocks and UBS suggested buying German shares. The euro fell to almost 1.22 overnight, but the bourses rallied anyway (most up over 1%) following the upgrades as well as hope from a positive resolution from a meeting of European finance ministers in Brussels today. Futures have totally turned around with prices at their high of the morning as of this writing. For the day, the resolution of that meeting and performance of the euro will likely be table setters. Volume will be lighter with 70 degree plus sunny weather in the forecast in Manhattan so expect illiquidity. Focus on relative weakness plays as well as short covering on some beaten-down stocks on any whiff of positive 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
NBS- closed near a high
AONE- closed near a high
PTV- Apollo Global Management may acquire PTV according to âWSJâ
DEER- announced stock buyback and raised earnings estimates
BUCY- upgraded by Baird
GLG- to be acquired by Man Group for 4.50 in cash
AMSC- received $445 million contract
VHC- settled patent dispute with MSFT for $200 million
Bad-The following stocks have bad news and/or a weak technical pattern
TIVO- closed near a low after DISH won an appeal against TIVO re an earlier Fed decision over a patent issue
SVA- closed near a low after posting poor earnings
ADS- closed near a low
HOT- closed near a low
OSIP- Astellas raised their bid to 57.50, but that is below Fridayâs closing price
LOW- poor earnings
HAUP- poor earnings
Earnings:
MON MAY 17 BEFORE
LOW PWRD
MON MAY 17 AFTER
A GA SINA
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
I started writing about the situation in Greece in this space several months ago. I've described the situation and tried to provide a guide for exactly why I noted a few months ago that the likelihood of riots in Athens by summertime was quite high. I want to take a step back though from the specifics of the situation for a moment to simply describe why this is important. It literally sickens me after I've seen images of protesters clashing with police and members of the Greek armed forces to the point where innocent pregnant women have been killed/trampled. It is almost as sickening whenever I hear complete uneducated and ignorant people say that Greece doesn't matter with callousness, disdain, and sheer stupidity. In the United States, we take for granted that a dollar bill is worth the same in the downtrodden slums of East St. Louis as it is in the wealthy town of Atherton, California. We take for granted that when Michigan plays Ohio State, the National Anthem of the United States is sung rather than the state songs of both states. This is not true in Europe. I have been blessed to have many European friends. Yet, I cannot imagine my French friends singing "G-d Save The Queen" any more than I can imagine the Londoners and Dubliners I know singing Greece's "The Hymn To Freedom." Thus, the entire mechanism of the euro is actually an amazing concept and an experiment which I hope succeeds over and above economics. But it always comes down to economics, doesn't it? Here's the issue: if Greece is let go out of the euro, it's a sign that the concept is beginning to fail if not already failed. It'd also effectively force the Greeks to begin using their own currency again and devalue it substantially. Imagine if overnight, your wages were cut in half (or more). The alternative is to cut wages 25% or so yet stay in the euro system all the while cutting social programs across the board to reduce burgeoning and crippling deficits. Even if Greece is spun free, there are problems in Spain, Portugal, and Italy as well as other nations like Thailand where massive bloodshed occurred once again over the weekend. These problems can (and already are) spreading like wildfire to places like Britain where the pound is getting thrashed. In the interim, as the dollar strengthens, it makes foreign goods that much cheaper...which blows an even bigger hole in the U.S. deficit. Yet, multinational corporations such as IBM potentially take an earnings hit because of slower overall growth in Europe. Printing one's way out of the problem isn't the issue either- ask Germans who used bags of marks to buy a loaf of bread in the 1930's (which set up the power vacuum for Hitler) how they felt about just printing more paper. This is a real mess- one much more serious than many people can fathom. And the U.S. is not immune. So, the next time you see tear gas being thrown at a crowd of people in an Athenian thoroughfare, really watch it and understand the seriousness of the situation- in the immediate-term, it is shaking up day trading and in the longer-run, it truly makes for a powerful question of whether the world we live in truly is all that modern.
Last night was one of the more fascinating spates of activity as Iâve witnessed in recent memory. Both Tokyo and Hong Kong closed down in excess of 2% each with Shanghai down 5% after announcing a wide array of credit tightening measures. Dow futures overnight traded down about 130 points (the nadir of the evening) just after midnight when I went to bed, but by my 4:30AM wake-up call, the indexes had recovered a significant amount of ground. Credit Suisse and Morgan Stanley recommended European stocks and UBS suggested buying German shares. The euro fell to almost 1.22 overnight, but the bourses rallied anyway (most up over 1%) following the upgrades as well as hope from a positive resolution from a meeting of European finance ministers in Brussels today. Futures have totally turned around with prices at their high of the morning as of this writing. For the day, the resolution of that meeting and performance of the euro will likely be table setters. Volume will be lighter with 70 degree plus sunny weather in the forecast in Manhattan so expect illiquidity. Focus on relative weakness plays as well as short covering on some beaten-down stocks on any whiff of positive 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
NBS- closed near a high
AONE- closed near a high
PTV- Apollo Global Management may acquire PTV according to âWSJâ
DEER- announced stock buyback and raised earnings estimates
BUCY- upgraded by Baird
GLG- to be acquired by Man Group for 4.50 in cash
AMSC- received $445 million contract
VHC- settled patent dispute with MSFT for $200 million
Bad-The following stocks have bad news and/or a weak technical pattern
TIVO- closed near a low after DISH won an appeal against TIVO re an earlier Fed decision over a patent issue
SVA- closed near a low after posting poor earnings
ADS- closed near a low
HOT- closed near a low
OSIP- Astellas raised their bid to 57.50, but that is below Fridayâs closing price
LOW- poor earnings
HAUP- poor earnings
Earnings:
MON MAY 17 BEFORE
LOW PWRD
MON MAY 17 AFTER
A GA SINA
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
erikrkolodny
ET Sponsor
TUES. MAY 18- Changing With The Markets
Iâve made the topic of Europe kind of a topic du jour recently. The oil spill is not progressing. The 2nd quarter earnings season is ostensibly over. And happily, I am coming off of a weekend in which my focus was totally on my kids rather than doing intense research for trading over and above what I normally do on Sunday nights after my two little angels are fast asleep. Now, there is never nothing going on in the markets. I mean, it amazes me that one hears barely a comment in the media regarding the fact that a barrel of oil has fallen near 20% in price this month. But my point is that as Memorial Day Weekend approaches, volatility will likely remain amid all the euro turmoil but volumes are going to likely slow as they already have. With that in mind, there was a great deal of chatter yesterday about how the trading day was a âhardâ day. It was not a âhardâ day. It was a different type of trading session with prices chopping tremendously. It absolutely amazes me to no end the number of times Iâve cautioned in this space not trade in too much size particularly when markets and stocks are moving in a way traders are not accustomed to:
http://epiphanytrading.blogspot.com/search?q=size+does+matter .
Furthermore, Iâve also written numerous pieces on the strategy of exiting losers as I did in this piece entitled âexiting losers:â
http://epiphanytrading.blogspot.com/search?q=exiting+losers
I repost those entries after having learned the very hard way over a period of years to follow my own words of warning. Not months. Years. I donât want others following in my lead in learning the hard way. Please donât get me wrong. Volatility has picked up significantly in the last few weeks and is not likely to wane all that much. But the loss of participants to things like the beach, the boat, vacations, and downright fright from active movement is going to result in decreasing liquidity as we approach Memorial Day and for a few days (and maybe months) thereafter. Thus, donât act on frustration with the likely lighter level of trade to do things you would not ordinarily do. Use the volatility and decreased level of activity to your advantage by trading smaller size but expecting wider swings on days when volume is notably lower than normal. Finally, itâs worth noting that when volatility does ebb, donât even rely on wider swings with smaller trade sizeâ¦just focus on the smaller trade size part! When conditions are right, play full-boatâ¦if not, adapt accordingly.
Markets throughout the world were generally higher overnight following Wall Streetâs Monday rebound with Toyo up nominally but Hong Kong and Shanghai ahead over 1% with London up 0.7% and Frankfurt up 1%. Gold is notably weaker in trading off over 1%. Oil is bouncing 2%. The ever-important currency markets are quiet with the dollar little changed against the yen and euro. Big-name earnings are up this morning with WMT leading the pack. The muted newsflow is leading to a vacuum of sellers which is leading to a positive picture in the pre-hours. Look for the strength to maintain itself today as big caps and the limited news are good. It should be much more muted than recently with fewer opportunities. Trade relative weakness plays in particular as well as the stocks in the news. The most likely play to work will be the A-B-A2âs to upside if the market grinds higher, but you have to show some patience on those.
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
COCO, CECO, ESI, APOL, DV- closed near highs on reports of a positive broker comment regarding the changing of a post at the Department of Education
MGM- Paulson & Co. reported a 40 million share stake
GOOG- closed near a high
BMO- mentioned on âMad Moneyâ last night
AKNS- entered exclusive agreement to provide solar panels to Westinghouse
HD- decent earnings
DKS- decent earnings
SPRD- good earnings
WMT- decent earnings, but warned for 2nd quarter; stock still ticking slightly higher in pre-open
SKS- decent earnings
CLH- pre-announced positive earnings
ALTH- received orphan-drug designation for bladder cancer drug
Bad-The following stocks have bad news and/or a weak technical pattern
V- closed near a low on continued follow through from Fridayâs weakness
A.- poor earnings
MEE- closed near a low on continued worries about litigation from the mine disaster
ANR- closed near a low
FMER- closed near a low upon announcing a stock offering following its Midwest Bank acquisition
PWRD- closed near a low after posting poor earnings
VOD- poor earnings
FIS- plan to take company over by BX has collapsed according to âWSJâ
ABK- poor earnings
NBS- provided negative update on its pharmaceutical subsidiary
FMER- share offering priced at 19
TJX- poor earnings
Earnings:
TUES MAY 18 BEFORE
ANF DKS HD
SKS TJX VOD
WMT
TUES MAY 18 AFTER
ADI HPQ
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
Iâve made the topic of Europe kind of a topic du jour recently. The oil spill is not progressing. The 2nd quarter earnings season is ostensibly over. And happily, I am coming off of a weekend in which my focus was totally on my kids rather than doing intense research for trading over and above what I normally do on Sunday nights after my two little angels are fast asleep. Now, there is never nothing going on in the markets. I mean, it amazes me that one hears barely a comment in the media regarding the fact that a barrel of oil has fallen near 20% in price this month. But my point is that as Memorial Day Weekend approaches, volatility will likely remain amid all the euro turmoil but volumes are going to likely slow as they already have. With that in mind, there was a great deal of chatter yesterday about how the trading day was a âhardâ day. It was not a âhardâ day. It was a different type of trading session with prices chopping tremendously. It absolutely amazes me to no end the number of times Iâve cautioned in this space not trade in too much size particularly when markets and stocks are moving in a way traders are not accustomed to:
http://epiphanytrading.blogspot.com/search?q=size+does+matter .
Furthermore, Iâve also written numerous pieces on the strategy of exiting losers as I did in this piece entitled âexiting losers:â
http://epiphanytrading.blogspot.com/search?q=exiting+losers
I repost those entries after having learned the very hard way over a period of years to follow my own words of warning. Not months. Years. I donât want others following in my lead in learning the hard way. Please donât get me wrong. Volatility has picked up significantly in the last few weeks and is not likely to wane all that much. But the loss of participants to things like the beach, the boat, vacations, and downright fright from active movement is going to result in decreasing liquidity as we approach Memorial Day and for a few days (and maybe months) thereafter. Thus, donât act on frustration with the likely lighter level of trade to do things you would not ordinarily do. Use the volatility and decreased level of activity to your advantage by trading smaller size but expecting wider swings on days when volume is notably lower than normal. Finally, itâs worth noting that when volatility does ebb, donât even rely on wider swings with smaller trade sizeâ¦just focus on the smaller trade size part! When conditions are right, play full-boatâ¦if not, adapt accordingly.
Markets throughout the world were generally higher overnight following Wall Streetâs Monday rebound with Toyo up nominally but Hong Kong and Shanghai ahead over 1% with London up 0.7% and Frankfurt up 1%. Gold is notably weaker in trading off over 1%. Oil is bouncing 2%. The ever-important currency markets are quiet with the dollar little changed against the yen and euro. Big-name earnings are up this morning with WMT leading the pack. The muted newsflow is leading to a vacuum of sellers which is leading to a positive picture in the pre-hours. Look for the strength to maintain itself today as big caps and the limited news are good. It should be much more muted than recently with fewer opportunities. Trade relative weakness plays in particular as well as the stocks in the news. The most likely play to work will be the A-B-A2âs to upside if the market grinds higher, but you have to show some patience on those.
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
COCO, CECO, ESI, APOL, DV- closed near highs on reports of a positive broker comment regarding the changing of a post at the Department of Education
MGM- Paulson & Co. reported a 40 million share stake
GOOG- closed near a high
BMO- mentioned on âMad Moneyâ last night
AKNS- entered exclusive agreement to provide solar panels to Westinghouse
HD- decent earnings
DKS- decent earnings
SPRD- good earnings
WMT- decent earnings, but warned for 2nd quarter; stock still ticking slightly higher in pre-open
SKS- decent earnings
CLH- pre-announced positive earnings
ALTH- received orphan-drug designation for bladder cancer drug
Bad-The following stocks have bad news and/or a weak technical pattern
V- closed near a low on continued follow through from Fridayâs weakness
A.- poor earnings
MEE- closed near a low on continued worries about litigation from the mine disaster
ANR- closed near a low
FMER- closed near a low upon announcing a stock offering following its Midwest Bank acquisition
PWRD- closed near a low after posting poor earnings
VOD- poor earnings
FIS- plan to take company over by BX has collapsed according to âWSJâ
ABK- poor earnings
NBS- provided negative update on its pharmaceutical subsidiary
FMER- share offering priced at 19
TJX- poor earnings
Earnings:
TUES MAY 18 BEFORE
ANF DKS HD
SKS TJX VOD
WMT
TUES MAY 18 AFTER
ADI HPQ
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
erikrkolodny
ET Sponsor
WED. MAY 19- Nervousness In Germany
First, for anyone interested, I have the honor of being the featured guest today just after the close on "Trader Talk." The focus will be on how I got to where I am now (wherever that is!) along with a discussion about my methodology. The link is here if you want to listen to the broadcast:
http://www.blogtalkradio.com/tradertalk
Back to normal programming-
There was a relatively placid session for much of the day yesterday until the late afternoon. What occurred brought back bad memories as well as fears of âhere we go again.â At about 9PM local time last night in Berlin, Germany prohibited naked short-selling as well as short-selling on European government bonds with credit-default swaps. The governmentâs attempts to calm markets totally backfired with the euro plunging to a four year low against the dollar and setting off a 1.45 selloff in the S&P 500. The whole thing wreaked of an escalation of regulatory risk for the worldwide trading environment. Furthermore, the move may well add to worries that the EU nations are not working in coordination with one another as Germanyâs unilateral action was not reciprocated through the rest of Europe. But the most detrimental effect took us back to the pre-Lehman days when the U.S. government willy-nilly temporarily banned short selling in select stocks. Forget the fact that the S&P 500 declined sharply during the ban with financial stocks underperforming. The issue was that it was a precursor to much of the turmoil in the financial sector that followed. Worries that such a thing is occurring all over again actually increased worries rather than decreased nervousness. For day traders, the key number to watch will continue to be the euro in the immediate-term with a major correlation between U.S. stocks and the direction of the euro- with random news coming out at random timesâ¦and causing random intra-day moves.
Markets overseas were hit hard overnight with prices falling 1.8% in Hong Kong, 1.6% in London, and 1.7% in Frankfurt. Oil got below $68/barrel this morning before bouncing a little. Bonds are giving back a little of their recent huge gains. Most notably, the euro is staging a bit of a rebound this morning with it trading around 1.224 to the dollar as of this writing after trading near 1.215 overnight. Futures are down a bit state-side, but well off of their lows. One interesting if ephemeral aspect to some short covering in the euro is the CDO issue- with entities not being able to hedge by shorting some collateralized debt, it takes some pressure off of the euro. So, it seems forced and artificial, but the euro has gained a little ground. This will be the topic of the day again so track the euro for an idea of how the stock market will do. Best guess is that we chop much of the day with no gigantic move on either side, but quite honestly, itâs truly a minute-to-minute market for me right now. Focus on relative strength/weakness plays along with select techs in the news such as HPQ.
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
HPQ- good earnings
ADI- decent earnings
LGL- closed near a high after posting great earnings
SWN- CEO featured on âMad Moneyâ last night
DE- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
VECO- closed near a low
TSL- closed near a low
BIDU- closed near a low
BUCY- closed near a low
CLF- closed near a low in a reversal
FCX- closed near a low in a reversal
MEE- closed near a low
X- closed near a low in a reversal
UFS- closed near a low
NPD- closed on a trend low
HRL- poor earnings
Earnings:
WED MAY 19 BEFORE
BJ DE EV
HRL RL
WED MAY 19 AFTER
AAP ADSK AMAT
BRS GYMB HOTT
LTD NTES PETM
SNPS
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
First, for anyone interested, I have the honor of being the featured guest today just after the close on "Trader Talk." The focus will be on how I got to where I am now (wherever that is!) along with a discussion about my methodology. The link is here if you want to listen to the broadcast:
http://www.blogtalkradio.com/tradertalk
Back to normal programming-
There was a relatively placid session for much of the day yesterday until the late afternoon. What occurred brought back bad memories as well as fears of âhere we go again.â At about 9PM local time last night in Berlin, Germany prohibited naked short-selling as well as short-selling on European government bonds with credit-default swaps. The governmentâs attempts to calm markets totally backfired with the euro plunging to a four year low against the dollar and setting off a 1.45 selloff in the S&P 500. The whole thing wreaked of an escalation of regulatory risk for the worldwide trading environment. Furthermore, the move may well add to worries that the EU nations are not working in coordination with one another as Germanyâs unilateral action was not reciprocated through the rest of Europe. But the most detrimental effect took us back to the pre-Lehman days when the U.S. government willy-nilly temporarily banned short selling in select stocks. Forget the fact that the S&P 500 declined sharply during the ban with financial stocks underperforming. The issue was that it was a precursor to much of the turmoil in the financial sector that followed. Worries that such a thing is occurring all over again actually increased worries rather than decreased nervousness. For day traders, the key number to watch will continue to be the euro in the immediate-term with a major correlation between U.S. stocks and the direction of the euro- with random news coming out at random timesâ¦and causing random intra-day moves.
Markets overseas were hit hard overnight with prices falling 1.8% in Hong Kong, 1.6% in London, and 1.7% in Frankfurt. Oil got below $68/barrel this morning before bouncing a little. Bonds are giving back a little of their recent huge gains. Most notably, the euro is staging a bit of a rebound this morning with it trading around 1.224 to the dollar as of this writing after trading near 1.215 overnight. Futures are down a bit state-side, but well off of their lows. One interesting if ephemeral aspect to some short covering in the euro is the CDO issue- with entities not being able to hedge by shorting some collateralized debt, it takes some pressure off of the euro. So, it seems forced and artificial, but the euro has gained a little ground. This will be the topic of the day again so track the euro for an idea of how the stock market will do. Best guess is that we chop much of the day with no gigantic move on either side, but quite honestly, itâs truly a minute-to-minute market for me right now. Focus on relative strength/weakness plays along with select techs in the news such as HPQ.
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
HPQ- good earnings
ADI- decent earnings
LGL- closed near a high after posting great earnings
SWN- CEO featured on âMad Moneyâ last night
DE- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
VECO- closed near a low
TSL- closed near a low
BIDU- closed near a low
BUCY- closed near a low
CLF- closed near a low in a reversal
FCX- closed near a low in a reversal
MEE- closed near a low
X- closed near a low in a reversal
UFS- closed near a low
NPD- closed on a trend low
HRL- poor earnings
Earnings:
WED MAY 19 BEFORE
BJ DE EV
HRL RL
WED MAY 19 AFTER
AAP ADSK AMAT
BRS GYMB HOTT
LTD NTES PETM
SNPS
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
erikrkolodny
ET Sponsor
THURS. MAY 20- Trading As Safe As Possible
First, for those interested, below is the link to my interview yesterday on "Trader Talk." I want to thank Troy Peterson for the opportunity/honor as well as Rob Smith for the very kind recommendation:
http://www.blogtalkradio.com/trader...r-talk-interviews-professional-trader-erik-ko
There is a time and place for most great trades. Such was the case on a lazy Thursday afternoon a few weeks ago. Just after the close that Thursday, PALM reported abysmal earnings information. They had worse than expected lossesâ¦and the future forecast was even grimmer. The stock immediately from Thursdayâs 11.72 close to below 11. It traded around 11 for a bit, but then RIMM delivered its good numbers. PALM rallied to 12 (up from the close!). Yet, these two companies are competitors and reiterating- PALM delivered absolutely terrible earnings numbers. Sure enough PALM began to decline towards the 11.72 close (âunchanged from the closeâ). There was a major 11.75 seller and with a pool of liquidity at 11.70, it was quite commonsensical to short the thing through unchanged. The risk was a nickel quite plainly as the 75 seller put out a lot of shares and if right, well, the stock had just been 11 a few minutes prior. Sure enough, the stock fell from 11.70 to 11.20 in a couple of minutes in providing many day traders with their best trade of the week. There was a stretch where I didnât make a trade for almost three hours on that Thursday. But I was totally ready to operate when a trade did present itself. Thus, rather than randomly making trades in the middle of the day, I waited for my spot and hit it with what I could stomach. This was a news-centric trade combining relative weakness and a stock near unchanged. If one followed RIMMâs numbers and PALMâs numbers as well as understood just a minimal amount about the companies, one could do this trade. Finally, it is but one more example of the folly of posting orders. If one threw a bid out at, say, 11.50 for 20 cents in seconds, one would have missed the opportunity to earn an extra 30 cents in 15 more seconds. So, be aware that while the markets are dangerous right now, there are indeed plenty of relatively safe opportunities around right now as well. As weâve all learned the hard way, please focus on those âsafeâ spots in this very turbulent time.
Markets are getting hit throughout the world as currency woes in Europe as well as more Greek riots are causing turmoil in the financial system. Tokyo finished down 1.5%. In Europe, every major bourse is down around 2% as of this writing. The parade of red continues in commodities with gold off 1%, oil 2%, and platinum almost 6%. The yen is the strongest currency on the board with the dollar down a yen, the euro way down, and the British pound getting heavily crushed. All of this is leading to strong declines in the futures. Today is a very perilous day. There is a tremendous amount of nervousness out there. Off-hand, look for a small bounce after the open. From there, itâs going to be very dependent on what the euro currencies do ahead of options expiration on the close tomorrow. Play relative strength plays in the early going otherwise trade very nimbly with much smaller size lots than normal.
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- closed near a high
TSL- closed near a high in a nice intra-day reversal
AAP- good earnings
AMAT- decent earnings
ADSK- good earnings
HCN- on âMad Moneyâ last night
Bad-The following stocks have bad news and/or a weak technical pattern
IOC- closed near a low
MED- closed near a low after a negative report from The Fraud Discovery Institute
LTD- poor earnings
HOTT- terrible earnings
NTES- poor earnings
WNC- 11 million share offering
APP- closed near a low after issuing poor preliminary earnings and warning of a debt covenant violation
MF- poor earnings
GME- poor earnings
Earnings:
THURS MAY 20 BEFORE
CSC GME MF
PDCO ROST SHLD
SPLS TDW
THURS MAY 20 AFTER
ARO BRCD CPWR
CRM DELL FL
GPS INTU MRVL
RRGB VRGY
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
First, for those interested, below is the link to my interview yesterday on "Trader Talk." I want to thank Troy Peterson for the opportunity/honor as well as Rob Smith for the very kind recommendation:
http://www.blogtalkradio.com/trader...r-talk-interviews-professional-trader-erik-ko
There is a time and place for most great trades. Such was the case on a lazy Thursday afternoon a few weeks ago. Just after the close that Thursday, PALM reported abysmal earnings information. They had worse than expected lossesâ¦and the future forecast was even grimmer. The stock immediately from Thursdayâs 11.72 close to below 11. It traded around 11 for a bit, but then RIMM delivered its good numbers. PALM rallied to 12 (up from the close!). Yet, these two companies are competitors and reiterating- PALM delivered absolutely terrible earnings numbers. Sure enough PALM began to decline towards the 11.72 close (âunchanged from the closeâ). There was a major 11.75 seller and with a pool of liquidity at 11.70, it was quite commonsensical to short the thing through unchanged. The risk was a nickel quite plainly as the 75 seller put out a lot of shares and if right, well, the stock had just been 11 a few minutes prior. Sure enough, the stock fell from 11.70 to 11.20 in a couple of minutes in providing many day traders with their best trade of the week. There was a stretch where I didnât make a trade for almost three hours on that Thursday. But I was totally ready to operate when a trade did present itself. Thus, rather than randomly making trades in the middle of the day, I waited for my spot and hit it with what I could stomach. This was a news-centric trade combining relative weakness and a stock near unchanged. If one followed RIMMâs numbers and PALMâs numbers as well as understood just a minimal amount about the companies, one could do this trade. Finally, it is but one more example of the folly of posting orders. If one threw a bid out at, say, 11.50 for 20 cents in seconds, one would have missed the opportunity to earn an extra 30 cents in 15 more seconds. So, be aware that while the markets are dangerous right now, there are indeed plenty of relatively safe opportunities around right now as well. As weâve all learned the hard way, please focus on those âsafeâ spots in this very turbulent time.
Markets are getting hit throughout the world as currency woes in Europe as well as more Greek riots are causing turmoil in the financial system. Tokyo finished down 1.5%. In Europe, every major bourse is down around 2% as of this writing. The parade of red continues in commodities with gold off 1%, oil 2%, and platinum almost 6%. The yen is the strongest currency on the board with the dollar down a yen, the euro way down, and the British pound getting heavily crushed. All of this is leading to strong declines in the futures. Today is a very perilous day. There is a tremendous amount of nervousness out there. Off-hand, look for a small bounce after the open. From there, itâs going to be very dependent on what the euro currencies do ahead of options expiration on the close tomorrow. Play relative strength plays in the early going otherwise trade very nimbly with much smaller size lots than normal.
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- closed near a high
TSL- closed near a high in a nice intra-day reversal
AAP- good earnings
AMAT- decent earnings
ADSK- good earnings
HCN- on âMad Moneyâ last night
Bad-The following stocks have bad news and/or a weak technical pattern
IOC- closed near a low
MED- closed near a low after a negative report from The Fraud Discovery Institute
LTD- poor earnings
HOTT- terrible earnings
NTES- poor earnings
WNC- 11 million share offering
APP- closed near a low after issuing poor preliminary earnings and warning of a debt covenant violation
MF- poor earnings
GME- poor earnings
Earnings:
THURS MAY 20 BEFORE
CSC GME MF
PDCO ROST SHLD
SPLS TDW
THURS MAY 20 AFTER
ARO BRCD CPWR
CRM DELL FL
GPS INTU MRVL
RRGB VRGY
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