THURS. AUG. 21 THOUGHTS

Yesterday afternoon, one of the traders was looking to buy Suntech Power (STP) around 42.50 on a new high, up 5 ½ on the day. Upon calling out the idea, he was told by one of the newer traders that the stock was already up 5 ½. That brings up a concept foreign to many day traders- just because the stock was up 5 ½ did not mean that it could not be up over 6 (which it eventually did). Another person wanted to buy FRE/FNM at some point mid-morning simply because they were beaten down so much (before they both fell a lot more). As day traders, we must study history and learn from it, but not become so enthralled with the net change of a stock that it impedes us from making an objective prognostication. What matters for us to earn a living is the future-not the past. Thus, do not be afraid of buying STP up 5 ½ or shorting FNM down 1 simply because the changes seem preposterous. Situations are what they are- it is our job to do determine what happens next based on the information at hand rather than in many times taking the wrong side simply because of existing breadth of the delta.

Overnight, stocks throughout Asia were down across the board with Hong Kong down over 2%. European stocks followed suit with prices down about 0.5% to 1% throughout the continent. Commodities are up with the dollar down. Futures state-side are indicated lower. Look for a troubling start, but watch FNM, LEH, and FRE for direction today.


Reiterating-New code for the next few days if the whole story is not there due to an expansive number of ideas-
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 based on direction of the market unless specified

Good-

BYI- good earnings

NOVN- positive drug news

ENER- extremely strong yesterday

MEE, ACI, BTU- coals strong yesterday and strong again this morning amidst an oil bounce

CSIQ, STP, SOLF- all strong yesterday on STP’s earnings

FED- very strong yesterday on short covering

PLCE- good earnings


Bad-

FNM, FRE, LEH- if market accelerates to downside, these three will lead it. People are scared. Likely, however, is that the bets and easiest trades will be made in these things before 8:30AM so please please be careful thereafter.

CRM- bad earnings

SNPS- bad earnings

JDSU- bad earnings

SMTC- bad earnings

FRO- bad earnings

GME- bad earnings

THURS AUG 21 BEF

ARO .30/374M .60/472M 2.16/1.82B 2.41/2.05B

BKE .60/166M .84/188M 3.11/746M 3.47/822M

BKS .09/1.24B -.13/1.19B 1.74/5.46B 1.86/5.57B

CYBX .02/33M .03/34M .22/137M .45/155M

DKS .36/1.10B .09/936M 1.26/4.28B 1.49/4.87B

FRO 2.33/402M 2.12/305M 9.05/1.64B 5.62/1.24B

GME .28/1.66B .36/1.79B 2.39/8.62B 2.97/9.61B

HNZ .66/2.45B .77/2.74B 2.90/10.84B 3.19/11.50B

HRL .40/1.61B .67/1.74B 2.26/6.57B 2.50/6.89B

PDCO .39/755M .46/801M 1.94/3.23B 2.19/3.49B

PLCE -.44/341M .79/465M 1.87/1.68B 2.43/1.80B

SFL .83/123M .82/122M 3.43/539M 3.10/521M

TECD .46/6.11B .72/6.50B 2.57/25.81B 3.14/27.31B

TTC .97/473M .17/338M 3.21/1.86B 3.65/1.88B

THURS AUG 21 AFT

BCSI .16/103M .20/119M 1.02/482M 1.66/581M

DRYS 4.57/275M 4.63/308M 18.55/1.06B 14.22/1.08B

FL .02/1.27B .26/1.33B .72/5.37B .86/5.43B

FMD -.39/? .03/156M -2.39/? .05/288M

GPS .29/3.52B .33/3.74B 1.33/15.18B 1.45/15.40B

HIBB .15/124M .26/141M 1.02/566M 1.18/623M

INTU -.08/470M -.11/484M 1.60/3.06B 1.86/3.34B

PSUN .06/311M .23/335M .55/1.30B .72/1.32B

VRGY .28/176M .31/179M 1.34/717M 1.80/799M
ZUMZ .07/93M .29/118M .90/438M 1.07/515M

Good luck today.

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