Day Trading Thoughts For Tues. Dec. 16

Discussion in 'Trading' started by erikrkolodny, Dec 16, 2008.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    There was a very curious article amid all the gloom; the piece appeared on Yahoo Finance via CNBC on Thursday mid-morning:

    The tag to the article is: “After largely fading from public consciousness following the dot-com bubble, day traders are back with a vengeance.” We spend so much time talking about individual themes such as oil prices, the financial crisis, and individual stocks that very little time is paid to the state of our industry. The whole genre started with the SOES bandits way back in the early to mid- 1990’s. The top wave occurred during the go-go years at the turn of the century when people could buy 500 shares of a stock, place an order 20 points above their purchase price, go take a shower, and come out of the shower clean and $10,000 richer (true story; it happened to my roommate in BAMM on the day after Thanksgiving in 1998). The next wave occurred in the early to mid part of this decade with the advent of rebate trading. But this year has created a new crew: the grayer, more mellow former floor trader or electronic day trader survivor who play the violent swings in a professional and diligent manner. The worst thing that can happen for any day trader is a lack of movement. Well, this year has seen the VIX rise to record levels which has become a siren call to people who have worked in the financial industry all their professional lives - many of whom have no other job or place to turn to- to become electronic day traders. Sectors such as utility stocks which were once considered stable slow-moving entities now wildly move up and down amidst energy and finance concerns the way the Internets used to move on revenue numbers and website creation. What is the point of all of this? Simple. To take a step back and acknowledge that while the work we are doing is not creating world piece, it is quite amazing to be a part of a select group of people whose typical profile are highly- intelligent highly-motivated people with a depth of experience. In 1998, as long as people maintained the least bit of discipline, they could make a lot of money doing this for a living. It is now much more difficult quite admittedly, but the market’s volatility has allowed this once-dormant industry to thrive anew.

    Stocks throughout the world were strong overnight. Hong Kong was up 1% with European bourses up 1% to 2%. However, the dollar broke the 90 yen barrier and bonds continue to rise as well. The move is rather odd considering today is the day in which the Fed will slash interest rates. Look for a quiet yet positive session in simply going with the flow up until the interest rate meeting. From there, everything will hinge upon the language of the Fed announcement. If the Fed sees ‘more risks to the downside,’ the markets will rapidly sell off in all likelihood. If there is no new verbage, prices will still sell off slightly, but then maintain their strength. Yep, that is what it comes down to today.

    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

    TITN- great earnings and raised guidance

    CXO- has been strong; looking for momentum buy thru 24 if oil is strong in particular

    RVI- has had explosive few days; looking for momentum buy thru 2.45

    FO – CEO on “Mad Money” last night

    CEG- EDF close to buying 50% stake in company’s nuclear business, but Buffett’s group will not raise 26.50 bid for company

    DRYS, GNK- dry bulk shippers strong in early going

    BBY- good earnings

    GS- missed earnings…but whisper number significantly higher than where many feared earnings would be

    AGM- managed to raise capital
    Bad-The following stocks have bad news and/or a weak technical pattern

    HUN – deal to buyout company is dead; company getting massive payment yet stock collapsed yesterday…settlement is worth more than the market cap! Stock should not be this weak, but if it keeps going, looking to short thru yesterday’s 2.82 low

    FLR- announced a filing of a mixed securities shelf

    MET/PRU- large insurers weak as a whole; looking to short thru yesterday’s low if they open higher (PRU 24.61 close/low of day and MET 29.12)

    NRG- closed absolutely on its low; looking to short thru unch if stock opens higher

    COF- has been particularly weak the last few days; looking for a short thru yesterday’s 25.81 low or an A-B-A2 buy to the upside

    JCI- warned on earnings

    ETN- warned on earnings






    Good luck today.

    Erik R. Kolodny
  2. tradersboredom

    tradersboredom Guest

    momentum==easy money.

    today's daytraders trade futures and forex.

    daytrading stocks in tech stocks is passe.

  3. To each his own. In this case, we trade equities and do it well.

    I have to thank Erik Kolodny for giving me the gift of trade. I am certain that I can make a living from trading equities because of his Epiphany Method, which is a scale / star rating that scores entry set ups. If a potential trade is ranked with one star, it is a do nothing. Likewise, a 7 star trade is do with size.

    No sir. "Easy Money" was only a movie, "Back to School" for you!!!
  4. erikrkolodny

    erikrkolodny ET Sponsor

    Many of today's day traders do indeed trade futures in particular. But a very significant number are trading equities.

    Furthermore, generalizations such as 'day trading stocks in tech stocks is passe' besides making no coherent sense could not be more away from the point I am making. I am simply taking a step back in noting that day trading is once again a vaible concept.

    The other part of your tenet that does not make sense is the 'tech' part. If you look at my suggested watch list from today, you'll note there were ZERO tech stocks. I for one trade based on what is active and volatile (as do most day traders); ergo, if the dry bulk shippers are moving up and down in 10% plus intra-day swings, why trade CSCO?

    Good luck to you and hope you have a good holiday season.

    QUOTE]Quote from tradersboredom:

    momentum==easy money.

    today's daytraders trade futures and forex.

    daytrading stocks in tech stocks is passe.
  5. [/QUOTE]


    I would be interested in trading futures and currencies. Spare me the homework, who should I use for either?
  6. Just go long. You cant fail buying all dips. Market set to surge much higer because all bad new priced in and the recession is fake. The core CPI is unchanged. I know almost everything.
  7. Everything? Hoffa? Where my girl really goes when she says she is hanging out with her girlfriends?