Day Trading Thoughts For Tues. Mar. 3

Discussion in 'Trading' started by erikrkolodny, Mar 3, 2009.

  1. erikrkolodny

    erikrkolodny ET Sponsor

    On Friday, after many reiterations that it was not going to happen from CEO Jeff Immelt, General Electric (GE) cut its dividend on Friday massively- in a move that will save the company approximately $9 billion in dividend payouts. In fact, Immelt put his money where his mouth was in buying 50,000 shares of GE stock and brought along the vice-chairman of the company for the ride as he too bought 50,000 shares. There are two ways to look at this. First, many prospective investors took the glass half-full perspective in noting that the company is preserving its capital which strengthens its balance sheet which will hopefully allow the firm to keep its AAA corporate bond rating. Those bearish on the stock would note the obvious- how many people/entities out there own GE stock for its staidness- its conservatism- indeed, its steady dividend? And now, many of those people have taken the last day to sell their shares as they are unwilling to accept the possibility of more risk; this action shoved GE down incredibly over 10% more to another multi-year low yesterday. For the purpose of day traders who don’t want to scalp GE as doing so can be quite difficult (my worst trade on Friday occurred when I shorted GE on the news of its dividend cut as the stock promptly spiked), there is a point to all of this: namely, in addition to everything else, we can actually possibly bring into the mix a discussion of financial problems at GE. I am not sure that happens quite yet, but any rumors of problems there will impact the market dramatically and day trading at that. One of my favorite factoids is that approximately one cent of every dollar the average American spends goes to GE- whether on aerospace or a light bulb. This is a gigantic company and any rumors of anything –good or bad- at GE will have a direct impact on the stock market.

    Markets in Asia were down about 1 to 2% on average, but did close off of their lows. European bourses are actually mixed after opening down. Oil is up with gold continuing its recent pullback. Futures are indicated higher. The markets are very oversold with the Dow down almost 20% in the last month with bearish sentiment palpable. Thus, any breath of good news or an abatement in selling could lead to a round of short covering- I think that happens today. After opening higher, look for the built-in mentality of ‘sell strength’ to kick in, but I don’t think that the selling has legs today as the overseas market had the opportunity to really be crushed yet it did not happen. Thus, look for an A-B-A2 day to the upside…and it could be a very strong one at that.


    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 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

    HPT- decent earnings

    MWE- great earnings

    PDLI- solid earnings

    EGLE- good earnings, but doing a shelf offering for capital

    EIX, PEP- mentioned positively on “Mad Money” last night

    AZO- strong earnings

    XLNX- raised quarterly revenue guidance


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

    MDR- missed earnings estimates for the quarter

    TEG- closed on a low

    MIR- the tumble on poor earnings continues…closed on a low

    ICTG- received 8/share takeover bid, but sold off much of day yesterday

    SFL- closed near a low

    TXT- closed near a trend low

    CLF- closed near a trend low

    JPM, USB, COF, GE- all closed near their lows

    SLM, NNI- sell-off in student loan marketers continued; both closed near their lows

    WYNN- closed on a low

    HUM, WCG- among health care equities closing near their lows

    XOM, CVX- big-cap oil stocks followed oil prices down in closing near lows of day

    GENZ- FDA requested more paperwork from the company for one of its drugs

    HWG- filed chapter 11 paperwork. Stock was at 19 Friday. Wow.
    BMRN- closed on a low

    SHLM- closed on a low

    ESRX- closed on a low; down 10 points plus in days

    EXPD- closed on a low

    ABMD- closed at a trend low

    ENER, GMXR, XTEX, DVN, XEC- among energy stocks- large and small- closing on their lows

    WMGI- closed on a new trend low

    SWSI- broke to a new trend low

    MDCO- closed on a new trend low

    MNTA, VVUS- among smaller biotechs belted in closing near their lows

    PWRD- major reversal after posting earnings

    UNT- closed on a low of day

    CRK- closed near a low

    CMI- broke to a new trend low

    OI- broke to a major trend low

    PTV- closed on a new trend low

    CVH- among healthcare entities breaking to a new low

    TWP – closed at a new trend low

    IDCC- missed quarterly earnings estimate



    Earnings:

    TUES MAR 3 BEFORE

    ARD AZO BMO

    BNS CHS CRZO

    SSW TECD TSL

    XLNX

    TUES MAR 3 AFTER

    ADCT NZ PAY


    Good luck today.

    Erik R. Kolodny