When the Golden Globe for best motion picture went to âSlumdog Millionaireâ 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 itâd 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 CEOâs eyes- to legitimize the books of SAY, i.e. theyâd 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 âGroundhog Dayâ 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 rallyâ¦would buy thru Mon 8.34 high RMBS- tried to rally yesterday after Fridayâs 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 âMad Moneyâ 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 lowâ¦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 Earnings: TUES JAN 13 BEFORE none TUES JAN 13 AFTER LLTC Good luck today. Erik R. Kolodny
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.