Day Trading Thoughts For Mon. Dec. 29

Discussion in 'Trading' started by erikrkolodny, Dec 29, 2008.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    These are the volumes for the last several trading days of the QQQQ instrument: 172.1 million, 160 million, 142.8 million, 118.3 million, 95.4 million, 68.8 million, 27.2 million, 20.9 million. The pace of trading has not just slowed down these last few days; it has completely collapsed. On the day before Christmas (a half day of trading), the QQQQ traded just over 15% of what it had traded. On Friday (a full day of trading), the volume was less than it was on Christmas Eve! What does this tell you? Not only are people exhausted, they just did not want to trade last week Many people have gotten hit horribly from a financial standpoint this year and nobody wanted to be around. This week started out just the same. There is no point in extrapolating deeply in this except to quote from that esteemed stock market guru, Kenny Rogers in his song “The Gambler: ”You got to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run.” Well, this is one of those stretches in which the best choice has been to ‘walk away.’ Yet, most day traders are programmed to sit in front of their computer screens and push buttons. Why? There are so many better things to do whether the mundane like Internet surfing to the important like paying bills if you happen to be stuck at your desk. It is absolutely astounding to me that trading volumes for many day traders are almost the same during this stretch even as the level of activity is ostensibly nonexistent on the NASDAQ. All of this said, a)trading is still OK in pockets. Microcap stocks are having gigantic moves when the conditions are right. Witness JRT on Friday which went to 1.40 after stagnating all morning between 88 cents and 98 cents as an example. B) The past is not necessarily indicative of the future. It is still wise to pick spots in this terrible day trading environment, but there may be a bit more to do this week as the last of the year can be ripe for opportunities. Those big players left around are doing some window dressing as well as positioning for next year so things can be pushed around rather easily. Thus, be particularly nimble, but on alert for the opportunities that do present themselves.

    Markets throughout the world rose overnight; Asian markets were barely positive, but markets in Germany and Britain were both up over 2%. Violence in the Middle East has sparked a rally in oils and metals thus a sharp rebound in shares in those sectors have helped propel overall averages higher. It is likely that the same type of action will occur state-side. Overall, markets should be listless, but strength in the commodities will help net-net. Look for another quiet session with a slight bias to the upside, but again, an environment in which it will be relatively difficult to put significant positions on.

    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

    JRCC- closed near a high; looking to buy thru Friday’s 14.47 high

    JNY- closed near a high; looking to buy thru Friday’s 5.66 high

    GASS- closed near a high; looking to buy thru Friday’s 3.95 high

    ALD- closed near a high; looking to buy thru Friday’s 2.90 high

    NUE/X- among the steel stocks which closed near a high

    LZR- closed on a high; looking for continuation thru 7.71 close

    GNK- strongest of the dry bulk shippers; looking to buy thru 13.17 after strong Friday close

    JAG- closed near a high; looking to buy thru 4.71 high

    OCLS- closed near high; looking to buy thru 1.60 Friday high

    NYT- inexplicably rallied Fri afternoon; looking to buy thru 7.03 Fri high, but more likely an A-B-A2 to short side

    LINE- positive mention in “Barron’s”

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

    SIVB – just no life here; looking for a short thru 24.15 when/if it gets down there

    DOW- called off gigantic endeavor with Kuwaiti government; worries about its merger with ROH will be in the headlines as much of the financing of the takeover was to be from the Kuwaiti proceeds although both companies insist the merger is still on

    CALM- missed earnings





    Good luck today.

    Erik R. Kolodny