Day Trading Thoughts For Thurs. May 7

Discussion in 'Trading' started by erikrkolodny, May 7, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    Timing really is everything, you know. Everything. This is particularly true when it comes to trading. When doing a trade, one must utilize precise disciplined timing. Rather than guessing at potential action or trying to ‘jump in early.’ Let’s give two examples from Friday the 24th. Around 11:46AM-11:54AM on Friday morning, MMM was trading in a very tight range between 55.89 and 55.99. The goal if momentum trading is to buy the thing on the good news at the new high of 56. Had anyone bought it between 55.90ish and 55.99 for the seven minute period preceding 11:54AM, he/she would likely have lost money because the stock dove quickly on the 11:54AM bar back down to 55.91. Yet, naturally when the stock touched 56, it popped 12 cents within one minute. If one properly executed the trade, he/she would have earned the quick pop by buying it at 56 rather than trying to assume it’d go and get a jump on the game. Example 2: At 1:23PM on Friday, BBT was ticking at its high of 24. With bank stocks on their highs, it seemed as if BBT should continue to soldier higher. There were approximately 40000 shares on the offer at 24. The goal is to buy the thing as the offering is disbursed as close to the end of the elimination of the offering just before the stock notches up yet fast enough to make sure one is in. A fine balance. Well, the instant the stock ticked 24, I decided it was gonna go and overeagerly hit the ‘buy button’ for 2,000 shares at 24. We all know what happened next. The stock stopped trading at 24 which indicated that buying interest just wasn’t there and the second any selling pressure entered, it was going to decline. Sure enough, I ended up selling at 23.97 for a $60 loss plus ticket charges (it hit 23.48 a few minutes later). Daily epiphany: balance the eagerness and desire with prudence and precision when doing a trade. Do not guess or hope –particularly in this fast-moving market; simply do what the action indicates and tells you to do.

    Markets stormed higher overnight with Asian exchanges up over 4% on average and European bourses up about 1.5% on average. Oil is quietly at a yearly high, up again as well. A short squeeze is in full effect on the banks ahead of the stress test report this afternoon; look for the banks to lead the market one way or another as the day progresses. The banks will clearly outperform the market as futures are not keeping up with the ascent of the bank stocks, but the entire sector is the key to today- if they hold, the gains will continue and if there is a breaking of the fever, watch out. Either way, it will be very fast today so use very tight stops and be well aware that the moves today will be exaggerated. A great day trading day just as yesterday was.

    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 (preferably to the downside in a downside market and the upside in an upside market) 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

    VNDA- got approval of its Schizophrenia drug (Fanapt) from the FDA

    COF- rumors abounding that it will not need additional capital from the stress test

    WFC, BAC, JPM, GS, MS, PNC, USB, BK, STI, ZION, BOH- among the strong bank stocks to watch ahead of the test; anything can happen but these things continued to rally yesterday with many closing at or near their highs

    PRU- decent earnings

    APAC- huge gain yesterday in closing near its high

    ARM- closed near a high

    TRK- closed near a high

    PDO- closed near a high

    UPFC- closed near a high

    ARG, CDNS- on “Mad Money” last night

    EOG- continued its massive rally; closed near a high

    DM- closed near a high

    TEN- closed near a high

    AMPL- good earnings

    CSCO- good earnings

    APC- decent earnings

    ECLP- great earnings

    ATW- good earnings

    PAA- good earnings

    ANDE- great earnings

    CENT- decent earnings

    NVEC- great earnings

    LOCM- good earnings

    PXP- good earnings

    ATPG- decent earnings

    CAM- decent earnings

    CXW- decent earnings

    PCS- decent earnings

    TDC- decent earnings

    WMT- better than expected same-store sales

    PRGO- good earnings

    RDC- good earnings

    FTO- good earnings

    CVC – good earnings

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

    CECO- bad earnings

    SPG- doing a share offering

    TBSI- terrible earnings

    BBBB- bad earnings

    MELI- bad earnings

    OTEX- bad earnings

    SYMC- bad earnings

    KAI- bad earnings

    TSO- bad earnings

    USU- bad earnings

    EGLE- bad earnings

    ENH- bad earnings

    HOTT- disappointing same-store sales

    LCC_ doing a share offering

    FOE- poor earnings

    WW- warned on earnings outlook




    Earnings:

    THURS MAY 7 BEFORE

    ABV ACM ARCC

    ARE ATK ATN

    ATPG CAM CLR

    CSE CTCM CVC

    CXW DHI DTV

    DYN EXH FOE

    FTO FTR GGB

    GMXR HOC HRP

    ISIS KEG LAMR

    LINE LXP MFC

    MPW NDAQ OMG

    OHI PCS PRGO

    PXP RDC SCI

    SFY SLF STE

    TDC WEN WW

    THURS MAY 7 AFTER

    ALL ALNY ATVI

    BID BYI CBS

    CROX CSTR DCT

    EBS FBN FSYS

    GNW INT IPI

    IRF KFN LEAP

    MAA MCHP MIL

    MVSN NHP NVDA

    OIS PCR PDLI

    PGH PSA RAH

    RATE RMD SD

    SGMS SHO SRX

    SVR THG THOR

    VRSN WTW


    Good luck today.


    Erik R. Kolodny