Day Trading Thoughts For Thurs. Jan. 15

Discussion in 'Trading' started by erikrkolodny, Jan 15, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    One of the wonderful features of day trading is the ability to find what I like to call ‘niche’ trades –trades that allow me to make use of whatever common sense we as day traders have. Such a niche trade was created on New Year’s Eve. With the takeover of Wachovia Bank and Merrill Lynch, those stocks were removed from the S&P 100 index. Thus, any S&P 100 money manager who owned shares of those stocks had to sell them out on that Wednesday as their deals closed. So, WB and MER both fell hard on the close. But guess what? So did they acquirers! Shares of Wells Fargo (WFC) and Bank of America (BAC) traded sharply lower after-hours on Wednesday with BAC down to 13.65ish (about 3% down) and WFC down to 28.25ish (down almost 5% after-hours). Yet, there was no intrinsic reason for BAC or WFC to go down since the selling was sparked by the S&P 100 reshuffling. BAC and WFC, however, acquired their targets in stock deals so a decline in the WB and the MER caused BAC and WFC to occur as well. Guess what happened? By mid-morning on Friday the 2nd, both BAC and WFC had recouped all of that ground and a little more. The moral here is to keep your eyes out for situations in which the odds are stacked in your favor when doing a trade. These types of plays do not occur often, but when they do, you’ve got to be knowledgeable as to what is occurring, and how to handle it…and then have the moxie to do the trade.

    Markets throughout Asia tumbled overnight with Tokyo and Hong Kong down 4%-5%. European bourses opened deep in the red, came back to unchanged, and then fell back. State-side, the focus is on JPM’s earnings, AAPL’s bombshell, and BAC’s application to the Fed for more money. Thus, the stage is set for a negative open. After what is one of the worst starts to a year for the stock market, there will likely be some sort of bargain hunting (particularly in JPM) so watch for a bounce. If said bounce does not occur by early afternoon, there will be another wave of selling around mid-day. After chopping for a bit, this afternoon could be very interesting ahead of options expiration tomorrow; either way, and it is far over my head to try to guess, there will likely be a pretty nice move this afternoon so this is not a day to step away. Also, I should note that JPM can likely be used as a proxy; if that thing can rally today, it will likely drag the rest of the market with it.

    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

    PPDI- preannounced upside earnings

    RIMM, PALM, NOK- should theoretically benefit from the turmoil at AAPL

    CYPB- received FDA approval on its lead drug

    FRX- co-sponsored with CYPB

    IDCC- announced licensing deal with Samsung

    BRKR- closed strong; looking for buy thru unch if it opens down

    VFC- nice reversal after earnings; looking for an A-B-A2 buy particularly thru Wed 54.33 high

    TSRA- won some money in a court case

    FXI- mentioned positively on “Mad Money”

    JPM- beat on earnings, but issued cautionary comments; traded higher initially around 6:45AM. Trade of day will be to short thru unch particularly pre-open if it goes negative.

    ASML- decent earnings

    BGG- beat for quarter; sees year slightly above estimates

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

    TRMB- warned on earnings

    FNB- closed near a low; looking to short thru Wed 8.89 low

    RWT- warned on earnings

    LEN- closed near low despite defending themselves vigorously against allegations of massive fraud at company; looking to short thru Wed 7.81 low

    CLF- closed near low; looking to short thru Wed. 20.90 low

    AAPL- Steve Jobs taking medical leave of absence through at least June

    XLNX- met earnings for quarter; warned for next quarter

    STSA- closed near low; if it opens higher, looking to short thru Wed. 3.39 low

    PLT –warned on earnings

    CVH- warned on earnings

    BAC- told Treasury it’d be unlikely it’d be able to complete MER buy in December without ‘assistance;’ details due January 20

    EWZ- mentioned negatively on “Mad Money”

    VLCM- closed weak; looking for short thru Wed 8.09 low if it opens higher

    BWA- looking for continuation down thru Wed low 19.03 on a technical basis

    APH- warned for next quarter








    Good luck today.

    Erik R. Kolodny
  2. looking for GNK to go higher today ;to the 17.20 area. i like the reverse head and shoulder type pattern it is exhibiting. a close above 17.50 means a very good chance to 20 in short order.but we are concerned with daytrades so 17.20 looks like it could be in the cards based on the chart. we'll watch how it opens and take it from there. lets not rule out a re test of yesterdays low near the 15.31 area and then a quick bounce to 16 either.
  3. Hi Erik Are you ready for stoney's BIG two day rally!

    That's right the futures may say otherwise and we have had a messy day yesterday but watch and see... or watch and prey I am doing both.

    First off PPDI!~ I sold that!!!!! Damn. I had a nice gain too... could of been bigger I guess. Thank's for ruining my morning. Just kidding.

    Actually I'm not you took BAC down in your analysis & I may be dead wrong here but I bought a boatload yesterday @ $10.25 or so. On the strategy side, I don't think they really need this new TARP money, it was a ploy by management to ensure the Merryl deal which is not in danger of falling through in my view but they threatened as much and now get more dollars... even though Dick Bove just yesterday said they could get by without any more. It's a land grab or dollar grab and they have pushed the Gov around. I see that as good. I was hoping for more ping off JP's #'s but alas BAC reports tuesday. I expect a $12 plus stk after that and a decision to be made for my real price target two years out is closer to $19! > $5 per share earnings power with no growth of franchise and of course franchise is growing fast... so you have labeled a possible 90% return a bad investment- well for the day anyway and that's the problem with day trading....

    Some stocks you should have covered-

    FSYS- alt fuel play had a miraculous day yesterday as I have sold out, it was with some satisfaction that I watched it dive to to $28 only to afternoon rally in the face of the market's turn back down and end up at $31... That kind of reversal on a down day bares further watching for this name.

    AVAV- highlighted by me as a chart play yesterday gave us a wonderful daytrade from $33 area to $34 and maybe more...

    MFLX is in a 5 day tear after earnings and extended but look at the action after noon yesterday wow. I wouldn't buy.

    SQNM day after day it does it's thing. You don't mention it that's fine let's wait to closer to $28 before bringing it up again.

    Rimm- looks up as you say.

    American Italian Pasta take a peek, AIPC-holding up well... Oh wait this isn't the Benign Relative Strength Thread!!!

    CYPB is the star of the day... I rode this from $5 to $15 two summers ago I think it was. Great stk Business Week Fave... Good Luck to you Erik!~ stoney
  4. erikrkolodny

    erikrkolodny ET Sponsor

    BAC- (that's just it For me)- you probably have twice the IQ points and 25 times the wallet I do. But none of it matters (for me) since iam playing only for the day (and more specifically for 2 1/2 minutes average). On the macro, every stock getting TARP money is getting diluted. So, you may well be right, but I don't see it.

    SQNM- did not mention it because there was nothing particularly newsworthy or chartworthy for day trading today. Harking back to the macro, i can see your point. You said today would be the day it'd explode, but this is why I am rarely precise- I can rarely be exactly sure. That said, I certainly see your thesis here and admittedly as a bystander, I think you'll be right. Company has a lot of buzz and as the husband of a woman who had two difficult pregnancies, the value of the company's product is not widely understood by the Street- yet.

  5. His Erik don't sell yourself short I only got 420 Math 480 English on my SAT's! But you got the rest right.

    Boy yes I have taken the mighty fall with BAC today saved only slightly by a counterweight I have had for a while FAZ which is one of those inverse financial index thingeroos... Also as for your daytrade there was one nice one BAC this morning that I caught and I'm waiting for one more good one. After that I'm hoping to be only marginally down. If you don't hear from me in a while it's because BAC will have failed... I also have my trust there that expires in ten years so it will be a complete vanishing of me as an entity and we can't have that can we?

    I'm really working this Benign Relative Strength Angle and I'm thinking of starting a Journal here on ET because unlike stonedinvesting which is somewhat manic and momentum chasing, BRS is a calmer more rational look at the same carnage... anyway today for you I'll highlight a few BRS names from withing the stonedinvesting universe....


    I find these names interesting because they are larger and of better value than previous cycle checks by me. And they are all up today.


    SHLD- can't imagine why but strong for days
    ITRI- smart meters a must for energy saving
    PETS- pet meds at home steady grower

    As today has the feel of capitulation (again) for the bankshares one might want to look at the CC companies- MA is down 10% and V is down 5%... VISA is the BRS winner and we have covered the name in a stock thread here recently.

    Regarding BRKR.Bruker Bio, Erik take a look at insider buying you might be surprised by what you find.

    Here's to staying cheery on yet another dismal, cold day of losses for the market and me...

    Except for AVAV, did you catch that luck? Got added to an index today- didn't know that was out there-- good for $2 on top of yesterday's buck reversal. That's why you hold names for more than a day! Sold a little on day 2 though! Holding the rest for the round trip! ~ stoney