MON. NOV. 17 -Who Gets What Anyway?

Let’s say you’re one of those diligent souls who toll away many hours a week at your job. You have a mortgage that you’ll be paying off for two decades to come. You have three kids, no significant debt other than your mortgage, and ostensibly do everything you’re supposed to do. Your neighbor, who happens to work with you, also has three kids yet he has two new cars, the best 42-inch TV screen on the planet, and the most extensive wine collection you’ve ever witnessed. Because your neighbor has a tremendous amount of debt on his credit card and he took out a 2nd mortgage, he now misses a mortgage payment. Or four. Guess which one of you is going to be bailed out in terms of renegotiated loan terms and amount? Guess which one of you gets to pump your arms in a ‘touchdown’ motion using excessive braggadocio while gloating to the other how you got $100,000 written off on the mortgage? Hint: not you. And therein lies the rub with the change in tone of these bailouts: where is the line in this ‘moral dilemma’ drawn and how much will it cost the responsible taxpayers of the world? In line with yesterday’s commentary, this issue pads the amount of uncertainty out there; this is absolute poison for equity prices. For day traders, it also adds to the muck of intra-day trading as equity prices attempt to position themselves based on the news of the moment. So, the conclusion to this one is the same as so many other pieces recently: you have to be prepared and up-to-date on all of the macro newsflow in addition to the micro. Know how to react based on Congressional testimony regarding an auto bailout or rumors of an airline bailout. By simply spending but a few minutes a day in intense study or thought after doing some homework, it can be the difference between consistently profitable and consistently losing at this point in day trading history.

Japan officially announced it was in a recession overnight yet the market held resilient there, up 0.7%. The other Asian markets were flat. However, European bourses are down 2%-3% across the board and futures are sharply lower state-following Friday’s last minute sell-off. Oil is down yet again but the currency and bond markets are relatively stable. Look for a bit of a bounce from opening levels, but the balance of the day will be thin and volatile. There is not a lot of good news around, but the bad news isn’t coming in torrents so the swings today will likely be sharp both up and down. Be careful.

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-

AMLN- Carl Icahn boosted his stake

COP, ETN- Warren Buffett sharply increased stakes in these two companies

HIG- announced agreement in TARP program Friday; if it opens higher and goes negative, short thru unch

FONR- $5/share buyout bid on table; stock spiked intra-day Friday yet closed way off of high…anything can happen anytime here

ALO- strong strong rally into close

ETN,AMD- on “Mad Money” on Friday night

GNW- applied for TARP money and S&L status

Bad-

UTHR- one of its leading drugs under studies right now failed to reach a primary endpoint in its trial…if you can short it above 70, particularly before 8AM ET, it is trade of week in all likelihood

TGT- bad earnings; suspended repurchase program

HPT- closed near a low

CUZ- closed on a low

AAPL, AMZN, RIMM- closed near a low

PLD- closed near a low; likely a short thru 5

ANF- closed near a low on bad earnings

MAR- leading hotelier particularly weak on Friday; looking to short thru Friday’s low if it gets there

SHLD, BIG- among other retailers closing at or near new trend lows Friday

EQR- leading office real estate entity closed at its low

DRE- very weak REIT Friday

HOG- The motorcycle entity keeps falling…at a new trend low

MAC- closed near low

CTB- cash crunch facing company; yet another company closing at a new trend low

COF- announced higher than expected charge-off rate

LOW- beat on quarter, but warned on year





Earnings:

MON NOV 17 BEFORE

COV LOW TGT


MON NOV 17 AFTER

CTRP







Good luck today.