Day Trading Thoughts For Tues. Jan. 13

Discussion in 'Trading' started by erikrkolodny, Jan 13, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    When the Golden Globe for best motion picture went to “Slumdog Millionaire” on Sunday night, it cemented the status of Bollywood as a legitimate worldwide entity. As much as I want to see this movie (heck, I even bet someone the day after Thanksgiving that it’d win a Golden Glove) when I first read the concept, the point of this piece is how worldwide cultures and businesses are pervading our culture. And it has happened in the trading world as well. Last week, Satyam (SAY), one of the largest technology firms in India ostensibly became the Enron of that nation. The CEO announced that the accounting practices of the firm were a complete hoax. Unlike Enron, there are some legitimate assets over at SAY, but the books were inflated with things like the cash balance incorrect. In fact, they even tried to buy out another company not long ago in an effort- in the CEO’s eyes- to legitimize the books of SAY, i.e. they’d replace the bogus books of Say with the legit books of the firm they bought out and then hope that things came through for SAY in time. The advent of the announcement of the scandal sparked a 7% decline in the Bombay stock market. Furthermore, it helped provide a cap for worldwide markets because, really, who really knows who else is out there? There is a palpable unease to enter stocks right now due to things like this; can anybody be certain of the finances of any company anymore? Combined with the failure of the market to rally ahead of the Obama presidency, events like this and the failure of commodities to maintain their headway have help lead to this slow but steady low volume bleed lower equities-wise. Will it continue? It is not for me to know or to care if my time horizon for holding a position is just over two minutes. However, it provides another bulwark for the framework in which I much less all day traders should utilize when doing any significant day trading through Inauguration Day.

    I feel a bit like Bill Murray in “Groundhog Day” as I type this, but: Equities continued their swoon overnight with markets in Tokyo down over 4% and the slump extended to Europe with most bourses down around 2%. Oil also continued downward, off about 2% as well. Futures state-side are weak one more time again. After a 600 point decline in the Dow, the markets would appear to be due for a bounce this morning. That said, there is no real impetus to buy stocks- particularly financials- as the push for the remaining TARP money would seem to decrease the value of financial stocks. Thus, I look for some sort of bounce shortly after the open (with JPM as a benchmark after they pushed up their earnings date). If the initial rally fails to gain traction, look for more downside pressure on continued relatively low turnover.

    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

    ZGEN- announced licensing deal with BMY

    HUM- warned slightly, but still sees $3.80-$3.90 versus $4.20 so news may well be factored in; stock traded higher after-hours yesterday

    LNY- following cancellation of merger, stock tried to rally…would buy thru Mon 8.34 high

    RMBS- tried to rally yesterday after Friday’s debacle; looking to buy thru Mon. 11.66 high

    JPM- pushed up its earnings date; this is usually a good sign

    VAR- announced solid orders guidance

    APC, TNH, POT- mentioned on “Mad Money” last night

    ELN- putting itself up for sale

    LIZ- warned, but extended credit waivers for another year thus giving it more time to try to survive amidst the retail crisis

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

    AA- warned on earnings, but beat on revenues

    WAT- forecast a slight beat of revenues, but sees much uncertainty ahead

    ZEP- issued terrible earnings on Friday afternoon; closed near low…looking to short thru Mon 13.14 low

    EJ- weak; looking to short thru Mon. 6 low

    X- very weak in terrible performing steel sector; looking to short thru 31.80 Monday low

    CSX- warned on 4th quarter earnings

    KLAC- warned on earnings

    SUSQ- broke to a multi-week low; looking to short thru Tues 12.76 low

    IPGP- has broken down in recent days; looking for continuation thru 10.47 Monday low

    CNO- breaking down anew; looking to short thru Mon. 3.16 low

    WLP- suspended from selling Medicare products due to audit from CMS

    LXK- warning on outlook






    Good luck today.

    Erik R. Kolodny
  2. Great stuff, your threads have become a reason for me to log in ET early in day :)
  3. Go long. Don;t fight the fed. More stimulus, more bailouts. Buying up bad debt. Obama won't raise any taxes for the next 4 years atleast.
  4. 37 was a wonderful buy level for WLP. Got two good trades..