Day Trading Thoughts For Tues. Dec. 30

Discussion in 'Trading' started by erikrkolodny, Dec 30, 2008.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    There are a few unique features which tend to occur only around this time of the year. One of the more prominent features which the day traders that are around tend to love is the reaction to the CNBC chatter. Most institutional players either are away or have little interest in trading this time of year so the pool of participants is different. The retail investor becomes a much more prominent player in immediate-term stock movement. Many people are home from work and have nothing better to do so they put on their retail stock accounts at bigger name places like E-Trade or Ameritrade and spend the day in front of their computer terminals. Thus, moves can occur which usually do not simply because volume is driven by these smaller players. On Friday, for example, Amazon (AMZN) said at 8AM ET that it had its highest volume holiday season ever. It did not mention numbers nor did it mention earnings. Plus, I got an e-mail message in my in-box around the same time with the tag line “Up To 70% Off Year-End Deals” from AMZN which indicates to me that gross margins may not be so hot on these record sales. Yet, CNBC reported the headline at 8:28AM (20 minutes after the story broke, mind you). Often-times, there is a bit of a CNBC ‘bump’ in which a stock will move a little after a commentator touts whatever positions has and/or recommends and the stock goes right back down. Not AMZN. AMZN –already up a bit over a dollar- ran a full 2 ½ more points! And it held for awhile before coming gradually back to Earth over time. So, two points here: 1) keep your ears peeled to CNBC the next few days because this whole retail trade concept is in full effect and 2) in the illiquid conditions, stocks can and likely will move much more than you can begin to imagine due to the plethora of retail customers and the lack of the ‘big money’ players.

    Markets remain muted throughout the world. Prices were generally down a fraction of a percent in Asia and up 1% or so throughout continental Europe. Same schpiel today- markets will likely be quiet again amid a dearth of news and participants with an upside bias. Pick entry spots carefully.


    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-


    (and there are not many of them today, unfortunately)

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

    HOKU- receiving financing from U.S. Bank and a fund advisor for solar power projects in Hawaii

    GM- GMAC received TARP monies last night


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

    DOW- potential for follow-through on yesterday’s atrocious news; looking for short thru 14.93 low

    MAC- hit very hard yesterday; potential follow through with an entry point of yesterday’s 16.58 low

    CAB- one of weakest stocks yesterday; looking for continuation short thru yesterday’s 4.90 low

    SFI- looking for continuation short thru Mon.’s 2.10 low after closing near a low

    RZ- closed near a low; looking for continuation short thru Mon.s’ 4.22 low

    Earnings:

    None today


    Good luck today.


    Erik R. Kolodny
     
  2. great post erik.
     
  3. The Journal Forum. Look into it........Yawn. :(