THURS. NOV. 13- Be Flexible

Following up on yesterday’s trading lesson themed blog, let’s do one more. This was a statement made yesterday morning when the blog was posted about 7:30AM ET: “With stocks having closed in the middle of a range and news flow slower, look for today to be a very difficult day trading day…prices will likely be rangebound on both sides of unchanged all day today.” The problem with going out on a limb is that while this blog has thankfully had a track record anybody would be proud of, predictions are certainly not infallible. Furthermore, trades can develop on all of the stocks mentioned in the idea section which one cannot fathom at 7AM much less one cannot predict everything with 100% at 7AM. Or at anytime for that matter! This leads to the point of this piece: the word of this piece is “adaptability.” The prototypical day trader must be ready to change held beliefs at a moment’s notice if the facts/situation deems it prudent to do so. When European markets began breaking, oil fell out of bed, and the currency market got out of whack by 9AM yesterday, it was clear that the situation had changed. One of the obvious yet stunningly incredible things about the practice of day trading is the rapidity with which the parameters of the situations we utilize change. Should one advocate scrapping everything at any point? No, not exactly. But if what one thinks does not seem to be playing out, it is certainly timely much less necessary to reevaluate one’s thinking. This all sounds so very obvious, but we have all been in situations – in trading and in life- where we are convinced something will happen when all the facts change thus proving us wrong yet we obstinately hold on to our incorrect belief. So, be aware when this happens and it’ll often save you a tremendous amount of money.

Overnight, markets in Asia were drubbed- down about 5% across the board. In Europe, stocks are also down, but off the floor. Futures don’t paint too bad a picture in the early going and a few entities out there have begun dipping some toes in; Goldman for instances has upgraded Dell (DELL). With little reaction to the INTC news, we may have a nice reversal day today…look for an A-B-A2 upside morning.

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-

NTAP- decent earnings

AMAT- beat on quarter, but warned on outlook

MELI- after terrific report, had major downside reversal; looking for A-B-A2 to upside if market bounces

SINA – decent earnings

ECL- doing massive share offering at 30.50…in all likelihood, it is a buy thru 30.75 if it holds 30.50 as it has been beaten down- particularly before 8AM- may be trade of day

Bad-

BXP- announced they are doing a $2 billion share offering

SOL- closed near a low; looking to short thru 3.40 if it opens higher

GAP- closed on a low; looking for renewed weakness

KHD- closed near a low; if it opens down, would like to do A-B-A2 thru 8.25

FNF/LFG- spread between the two stocks continues to widen; looks like deal may be off

GET- closed on its low; would like to short thru 8

USG- closed near its low; would like to short thru 9ish

IPI- closed near its low after earnings report; looking to short thru 15.25

MIC- downtrend continued; closed near a low and would like to short thru 3.90ish

JRCC- its decline continued as well; if oil rallies, look for short covering

CROX- warned, but Bill Gates took stake in company

NTES- earnings not great

GS- offered well down after-hours yesterday; something not right here to put it mildly

GHM- closed near a low

CACB- weakest among the small banks yesterday

WFMI- appears as if their capital raising plan is failing

LULU- among the weakest of the smaller clothing companies yesterday

PETM- WMT may be encroaching on their business; worth listening to WMT conference call this morning to find that out

SBAC- among the weakest of the small communications companies

LCC, UAUA, AMR, DAL- airlines were the worst performing sector yesterday

AMLN- this drug company keeps sinking

HOG- nobody is buying motorcycles right now; another new low for Harley

COP, MDR- among the oils and driller hit as oil prices sank to a 2 ½ year low

DRE- weakest of yesterday’s REITs

EAT- great company, but faces a capital shortage

HOT- among the weakest of the hoteliers; another downtrend low yesterday

CBS- lack of ad revenue leading to multi-year low for what was once the op media company on the planet

STP, LDK- helped to lead all of the solars down hard yesterday

AKS, NUE- among the weakest of the steels

AMB- this financial closed at a multi-year low as well yesterday

WMT- beat on quarter; warned on holiday quarter, i.e. next quarter




Earnings:

THURS NOV 13 BEF

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THURS NOV 13 AFT

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Good luck today.