Day Trading Thoughts For Fri. Dec. 5

Discussion in 'Trading' started by erikrkolodny, Dec 5, 2008.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    Typically, when we were kids and we had good report cards, we could not wait to go home and show them to Mommy and/or Daddy. When we had bad report cards, we did everything we could to delay showing them the terrible results. It’s the darndest thing that the same phenomenon occurs in the trading world also. When a company has good news, it tends to put it out either first thing in the morning or just after the market closes with big bold headlines like “XYZ Has 45th Consecutive Quarter Of Growth And Raises Internal Earnings Estimates.” When a company has bad news, it tends to attempt to put a positive spin on it yet it is rarely done either just after the close or before the open. In extreme cases, companies will put out earnings results at strange times in an effort to try to bury the bad news. Now, mind you, there is something to be said for not wanting to have a stock crushed in thin conditions after-hours, but the other school of thought on the matter is that the sooner the news is out, the more readily it can be digested. Well, Research In Motion (RIMM) decided to warn on its quarter at 10:30PM on Tuesday night. It is not as bad as the instances in history when a company has warned at 11:48PM on Christmas Eve, but it is still pretty bad. RIMM actually finished higher on the session on Wednesday, but the low of the day was achieved when it first began actively trading around 7AM ET. In arguably a better example, Chesapeake Energy (CHK) announced on the Wednesday before Thanksgiving late in the afternoon that it ‘may’ file a shelf offering. There was vague text disclosed on the “Wall Street Journal” website on Thanksgiving Day that the shares may be issued at 15.52. And the stock has not seen the light of day since. As day traders, we need to be attuned to the news as well as the context of it as we always preach- but also the time in which it is released. It can give clues about not only the state of a company’s business, but the state of its management as well.

    Stock prices in Asia were marginally higher overnight, but stocks in Europe are down about 2%-3% across the board as of this early writing. Oil and currencies are relatively flat while bonds are up a little once again. The market’s performance in the 1st half of the day at least will hinge upon the unemployment report this morning. It is worth noting, however, that futures are not down a lot in the very early-going which portends some degree of strength/bid under the market combined with rumors that yesterday’s sell-off was ‘forced’ by hedge fund selling. Thus, we’re inclined to think that the market has a bit of a bounce today. Trading will likely be illiquid and very choppy; if the gains aren’t garnered by the 1st half of the day, however, all bets are off for the afternoon.

    Reiterating-If the whole story is not there -
    If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-

    Good- The following stocks have good news and/or a strong technical pattern

    YUM- preannounced earnings growth of ‘at least’ 10% for 2009

    SIFY- exploded higher into close yesterday on big buy imbalance; should trade down all day, but likely a buy thru unch if it gets there

    THOR- positive news on its Heartmate II device

    TOL, MTW, UA- on “Mad Money” last night

    ACTU- management to buy back shares between 3 and 3.50

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

    GES- beat for quarter, but warned for year

    TRW- withdrew guidance for the balance of the year

    CHK- stock has traded horribly for over a week now (and much longer actually); looking to short thru 11.50 if it gets there

    .HTE- closed near a new trend low; looking to short thru 8 if it gets there

    MMR- closed near a low; looking to short thru Thursday’s 7.50 low if it gets there

    CLWRD- closed at a low; looking for more follow-through today

    REXX- closed near a low; looking to short thru yesterday’s 3.45 low

    DPS- broke to a new trend low; looking to short thru yesterday’s 13.70 low

    BIG- met for quarter; warned slightly for fourth quarter




    Good luck today.
  2. Let them look at it themselves. This site is time stamped.

    Hopefully someone got some value out of it.