Day Trading Thoughts For Mon. Jan. 12

Discussion in 'Trading' started by erikrkolodny, Jan 12, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    This will counterbalance Friday’s piece a bit re why there is quite possibly a ceiling on the market, but then isn’t what makes a market the hashing out of both sides? So let’s quickly discuss simply from market action last week three pieces of news. First, quite possibly getting the least bit of press for a major move in the history of network television, did anyone notice that oil was down almost 15% on Wednesday? It is important to realize that commodity stocks help lead up the stock market from its most recent low. Oil, which breached $50 a barrel on Monday morning actually traded below $40/barrel again by Friday morning! Four days and a 20% downdraft. And nobody discusses it. Second, Wal Mart issued a horrific earnings warning on Thursday morning which shoved WMT down yet the market did not sell off aggressively. Finally, we witnessed the worst jobs report in years on Friday- with the unemployment rate coming in worse than expected at 7.2%…and still all that occurred was a low volume non-violent sell-off. So, yes, there does seem to be a cap to everything, but the market is definitely telling me that there seems to be a floor barring something unforeseen as well. For day trading purposes, just continue to realize this is a totally different environment from three months ago and that we remain trapped in a trading range.

    Overnight, stocks in Asia were down across the board with the Hang Seng putting in the worst performance- about 3% lower. Prices are down in Europe as well between 0.5% and 1%. Oil is getting clobbered with the dollar weaker anew against the yen. Despite this negative cloak, volumes are relatively low and the selling pressure is not huge. There will likely be some sort of weak rally at some point this morning if no other reason than nobody is selling…but overall, it will likely be a quiet session as earnings season commences tonight amid a relative paucity of news and desire to get actively involved.

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

    DNA- up on rumors that it’d receive a higher takeover; 87 is where the deal is in place so looking to see if it trades above there

    AMOT- up after a bizarre buy imbalance on the open; looking for a short early morning if the rally fails to hold

    APEI, HD- on “Mad Money” Friday night

    FRD- has been up on speculation that Pres. Elect Obama’s policies will help the company; looking to buy thru Fri high of 9.90 or A-B-A2 reversal

    FED- announced tender offer for a significant amount of its senior debt securities

    HOLX-raised guidance for its next quarter’s earnings

    GTCB-noted that the Blood Products Advisory Committee of the FDA voted that its lead drug (Atryn) is safe; if approved, it’d be the first recombinant human antihrombin available I nthe U.S.

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

    RMBS- pummeled after losing a case to MU on Friday; may be A-B-A2 to upside if the selling fails to continue early

    LEN- down Friday after company accused of being in a Ponzi scheme; the company has vigorously defended itself on TV Friday and press release today. Should bounce today, but if it tries and fails, it is a likely short

    CVS- closed near a low after warning; looking to short thru Fri low of 25.50

    JPM- was down going on 20% last week in a quiet smashing. Looking for an A-B-A2 reversal or a short thru Fri’s 25.81 low

    MASI- pummeled last week; if momentum continues, looking for a short thru 23.59 Fri low



    None today



    Good luck today.

    Erik R. Kolodny
  2. Rodman & Renshaw notes Friday afternoon, in line with their expectations, Roche disclosed that it is preparing a new offer for Genentech expected to be at $95 per share for a total consideration of around $44 bln.
  3. oriol88


    buy high sell low
  4. go long at the open
  5. nice stuff erik!
  6. piezoe


    Very nice, well thought out commentary. Thank you. I am expecting trading over a fairly tight range in the S&P for the next two weeks or so. We are all expecting dismal 4th quarter earnings, but so is the market.
  7. Where is the volume though? been quit for the past month.
    Edit: we should close green today
  8. erikrkolodny

    erikrkolodny ET Sponsor

    That's just the point of what I wrote Friday and then followed-up with today. There is no impetus for anyone to do anything major. The major selling pressure (at least for now) seems spent yet nobody wants to be a hero and buy stocks either. So, we're stuck in this trading range.

  9. stock, did you call the powers that be and ask them to reverse the close? Why do you continue to post the same tired bs everyday? You should join the walmart manager program, in about 5 years, you might actually be a real working class stiff
  10. A trading range isn't a bad thing. Amazingly despite all this doom and gloom the dow is slightly above the October 10th close three months ago. If you bought DIA at october 10th you would have a solid gain if you include dividends.
    #10     Jan 12, 2009