Day Trading Thoughts For Fri. Jan. 2

Discussion in 'Trading' started by erikrkolodny, Jan 2, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    So, we’ve now shaken off the cobwebs of the New Year’s parties and flipped the calendar over to 2009. Now what? Well, first, don’t expect many answers today as the crowds of traders take one more day off and maybe not even next week amidst a relative dearth of news. There are two main schools of thought (and far be it from me to pick which one is accurate; after all, I am merely a day trader yet would like a framework from which to work from). The good one first- 401k money piles in as January starts. The market shook off bad news at the end of last year. Oil prices are low which like a small tax cut for the American taxpayer. And the system is stable as the spate of bankruptcies has stopped. Thus, the market maintains its year-end rally and keeps going. Or. Money managers get back from their holidays and discover the Madoff fiasco has impaired their funds thus starting a new round of hedge fund selling. The GM crisis fails to ease with it trending toward zero by the end of the month. Banks continue to fail to lend money the way they need to be doing so. Worries about inflation begin creeping in. So, what’s the answer? Haven’t I already addressed that? I am a day trader and day traders do not need to worry about such heady things when focusing upon the immediate-term. Yet, I do simply because I abhor when someone comes to me and says things like “I don’t get it; the market was up XYZ points today…why did that happen?” First, it does not matter. But second, it is because one of the two aforementioned described scenarios is playing out. For 2009, it will likely be a bit calmer than 2008 as the VIX has tumbled more than 50% from its high, but there is still plenty of good trading to be had. It'll likely be noted for its lack of financial surprises all else equal as opposed to the financial bombshells of '08. So, always remember the macro, but focus upon the micro in terms of trading for the day if your focus is as mine in deriving an income over what will happen over the next 2 ½ minutes rather than the next 2 ½ years.

    Markets in Asia were up very nicely overnight and this spilled over to Europe with the main bourses up about 1% there. However, oil is off dramatically and the dollar is notably stronger this morning. Thus, markets will likely open a bit higher future-wise eaely on via hope if nothing else that 2009 is gonna be a good year, but I don’t think it holds. Look for choppy trading on thin volumes as Monday is the first real day of trading in ’09, but there will be pockets to trade- focus on those pockets only…scalping will not work whatsoever today.

    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

    BLTI- exploded into close; if/when it approaches the 1.49 close, buy thru unch

    CNO- closed strong; likely a buy thru Wed close of 5.21

    PNX- closed near a high; looking to buy via A-B-A2 and/or thru Wed’s. 3.47 high

    XTXI- closed near a high; looking to buy thru 4.09 Wed high

    TBBK- massive rally the last two days; looking for buy thru unch if it opens at or below unch at 3.75; otherwise, A-B-A2 to the downside on what seems to be a window dressing situation

    HPT- strong on Wed.; looking to buy thru Wed 14.99 high when/if it gets there

    LRY- strong on Wed.; looking to buy Wed. 23 high when/if it gets there

    ALY- closed on high on big uptick; looking for A-B-A2 to downside in the vein of NLC on Wed.

    CTDC- received a contract to build a power station

    DRYS, EXM, EGLE, GNK- dry bulk shippers up on nice gains in the dry bulk index overnight in Asia

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

    WFC, PNC, BAC- all sold off dramatically after Wednesday’s close; these things are likely buys particularly in the pre-open…sold off as MER, WB, NCC came out of the S&P indeces so theoretically it sparked some artificial selling in these new parent companies

    SCG- offering 2.5 million shares at 35.50; if it opens below the offering price and tries to rally, it is likely a buy thru 35.50 as it’d shoe the offering is priced into the stock


    None today

    Good luck today.

    Erik R. Kolodny
  2. DRYS , I'm in @10 1/2 , also LDK at this price is a good buy
  3. i am looking at some shippers as well; drys and gnk. however, i am looking at FSYS if it holds 32.40. FSYS could see a nice move to 34.50- 35. it can be quick.
    also keep an eye on some basica materials such as steel due to hopes of obama's stimulous package. this includes NUE-STLD-JEC to name a few.
    FSYS is the one i will be watching at the open though.
  4. nursebee


    So how did this pan out?