Day Trading Thoughts For Fri. Feb. 13

Discussion in 'Trading' started by erikrkolodny, Feb 13, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    So what happened late yesterday afternoon? In a nutshell, Reuters reported that the Obama administration was attempting to create an entity which would subsidize mortgage payments for homeowners who are financially in trouble, but not delinquent yet. The programs that exist currently only provide assistance to borrowers who are already in arrears on their mortgage. Under the ever-changing plan, homes would undergo a standardized reappraisal with current homeowners facing a uniform eligibility test to see if they qualify for aid. On Thursday, Treasury Secretary Geithner told the Senate Budget Committee that the Obama administration would attempt to put together a package which uses “a mix of incentive and persuasion” in an effort to get mortgage entities to re-do their loans and provide relief for more homeowners. Thus, the plan in theory is trying to give some sense of benchmark for values and if it can be done on a sustained basis, the markets can definitely rally around it. Why? It’d force people to reprice bonds, view credit risk differently, and provide an ephemeral floor at a minimum to the housing market which would potentially get the housing market going again. This is a great idea in theory, but in practice, who really knows how much money it will take, how fast can a test be set up, and will it halt home property values from falling? These are certainly questions over my head. But the reason the markets rallied is on the hope that something like this plan can work simply put. For day traders, yetserday was but one more example of why one cannot be a permabear or a permabull intra-day anyway. It is very very easy to get caught up sticking with what one thinks rather than what one is viewing. Also, it shows once again the importance of having an outpoint when wrong. Looking ahead, it certainly is a schematic to monitor because any rumors (or facts that leak out) about this infant plan can cause wild swings in the market today in particular as some people take a four day weekend and/or leave early.

    Markets throughout the world bounced overnight. Asian markets were up 1%-2% with similar gains in Europe. Oil is flat, the dollar is losing ground, and bonds are slightly weaker as well. Futures are mildly positive early this morning. The bounce yesterday was on low volume on rumor…not really a sustainable bounce…unless there is a deserved catalyst for it. With that in mind, people will be a little reluctant to sell into the bounce in the immediate-term simply because of momentum. I know. Circular logic. But this is the way it works. Thus, the net of all of this is that today will likely be a relatively low volume choppy day driven by rumors and politics ahead of bills to be signed by president Obama and a G-7 meeting over the weekend. Most action will likely take place in the first hour or two with increasingly thin trade as the day progresses as traders gear up for an extended weekend.

    Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
    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

    CEPH- raised earnings guidance, but cut revenue guidance

    MFE- warned slightly for next quarter, but better than the whisper number

    VCLK- great earnings

    PFG- closed near a high amid a reversal

    ASIA –closed near a high

    BWA- closed near a high after posting earnings Thurs morning

    BWLD – closed near a high after posting great earnings Wed afternoon

    ALXN- closed near a high

    KO- closed near a high amidst great earnings

    CF, MOS, POT, MON—among fertilizer stocks closing near their highs

    GDI- good earnings

    AIPC- closed nears it high after posting great earnings

    BKE- closed near a high

    WSH- closed at an intermediate-term high after posting great earnings

    RACK- beat earnings estimates and announced stock buyback

    BBND- good earnings

    YRCW- announced agreement with it lenders in restructuring some of its debt

    NITE- CEO on “Mad Money” and stock got rated positively on show

    ANF- good earnings for the quarter

    PEP- good earnings

    CTSH- great earnings

    PALM- broke out to a new trend high yesterday morning and started with a buy recommendation this morning at Oppenheimer

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

    INSP- closed near a low

    GERN- planning on doing a secondary offering between 6.60 and 6.85

    WFC- taking $328 million charge for 4th quarter…completely unexpected

    REV- closed near a new trend low

    OEH- closed near low of day

    SVNT- FDA delayed a decision on SVNT’s product

    CSR- announced $125 million offering in an S-3…except that it seemed to be an update of a filing from November…if this is correct, stock could bounce hard

    ITMN- selling 2.5 million shares between 15.80 and 16.35

    LPHI- mentioned negatively on “Mad Money”








    Good luck today.

    Erik R. Kolodny
  2. Triskaidekaphobics should take the day off.
  3. S2007S


    That 200+ point rally into the close was stunning, what a great time to release news that they will step in and help all losers who are facing trouble paying their mortgage, what about the homeowners who actually pay their mortgages on time, do they get any special treatment, this is a Fu$king joke. This is just getting more pathetic each day.