Day Trading Thoughts For Mon. Feb. 23

Discussion in 'Trading' started by erikrkolodny, Feb 23, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    An article on Forbes.Com penned by economist Nouriel Roubini aka ‘Dr. Doom’ posits an idea that few of us dare mention. Is it possible that the entire concept of laissez-faire capitalism has failed? The latest data on 3rd growth GDP performance indicates a decline of 6% in the euro zone, 12% in Japan, and 20% in the Korean economies. Imagine. A 20% decline…In one year…in the economy of Korea. Most countries is now trying to do something about the economic travails, but the major concept- again according to Roubini- is this: some banks may be too big to fail, but also to big to save because the resources of the nation trying to keep said banks solvent don’t have the financial resources to do so. The entire process of ‘socializing’ the private losses from many banks/corporations from the private sector have been shoved onto the books of sovereign nations. Yet, as has happened in Iceland and other places, a sovereign bank could crack which would undermine all credibility of governments everywhere to support their financial systems. Ergo, the Anglo-Saxon model of largely unregulated markets has helped lead to this crisis and can never be allowed to operate in the same manner again. Now, it is not for me to say whether Roubini is right. What is for me to say is that calls like this can affect day trading- particularly if put out by the right person on the right day. Thus, more than ever, we as day traders must keep up with political rumblings as well as economic rumblings in order to do our jobs effectively particularly if Roubini’s perception become reality. The other point to be made here is one of optimism- maybe it is because of the personal tragedy I just witnessed, but a sense of optimism or at least a feeling of less pessimism can be awakened from huge loss. On Friday, the market held its own with wild gyrations; with all of the gloom out there such as Roubini’s piece, let’s see if the markets show some resilience to these types of concepts because in the immediate-term with banks having bounced huge, some short covering is very due.

    Markets in Asia were generally higher overnight; Tokyo was down slightly, but Hong Kong was up almost 4%. European markets are also up about 0.5% on average. Everything else is relatively steady. Now, call me crazy, but I think we’re due for a pretty good bounce. You have all the bad news on Friday and the market generally held. You have talk of nationalization this morning yet the markets are higher. It’d seem logical that there’d be a little sell-off assuming markets open higher, but assuming this sell-off is commenced on light volume and doesn’t have much punch to it, look for a pretty gradual uptrending session.


    Reiterating-
    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

    GPI- closed near a high

    CAB- closed near a high

    AVB, HCP, DLR- among the REIT’s which closed near a high; very interesting intra-day reversal in most REIT’s occurred on Friday

    PSA- closed near a high

    C- up very early amid reports of a partial nationalization; it is up because the theory goes that a partial nationalization is better than a liquidiation

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

    WCG- closed near a low after the terrible news re Medicare

    OC- closed just off of a low

    CQB- after having terrible earnings, closed near a low

    FDP- followed in CQB’s footsteps

    SFY- closed near a new low

    ATU- closed near a trend low

    FFG- closed near a new low

    GRMN- poor earnings

    WRI- bad earnings


    MON FEB 23 BEFORE

    CPB DDR KDN

    VAL WRI

    MON FEB 23 AFTER

    DTE EPR FST

    HMA HR HTZ

    JWN LBTYA OKE

    ONXX SM TXRH

    WLL


    Good luck today.

    Erik R. Kolodny