Wednesday, February 07, 2007

Wednesday Wrap

Good Evening - with the exception of a paltry few thousand shares of DHI my trading account is empty. I gave you the saga of CRVL earlier today and I wish those shareholders the best - but it really looks like a miss. I hit my target with JNPR (18.90) plus 30 cents and I rang the cash register. A nice profit for a three day trade. I sold KKD for break even at the open and I'm not looking back - it was a profitable ride but it looks to be over.

I did a day trade on HLTH which gapped down and then hit its mid-point low where I took it. Rode it up to the max of the day at 14.40. I think it could have gone higher but we'll get to that presently. I also took a trade at the same time on BRKS which was a gap-up and return to 4 where I took it (off the third bar) and it made a buck before coming back. This one probably wasn't going to go any higher. It did all of that based on an earnings statement where it beat expectations by three-100ths of a cent. What a psychotic market.

Around 10 A.M. or so a certain Charles Plosser who is a member of the Federal Reserve Board of Directors gave his now monthly recurring speech about the need to contain inflation and raise interest rates and the market stopped going up. Thank you, Charles, mission f$#@%ing accomplished. Someone please wheel Charles back to the crypt - See you next month, Chuck.

I don't know if any of you noticed but the Dow actually went red this afternoon for a matter of minutes. It was down around 20 some odd points before the dip buyers rushed in and made it better again. There is a beautiful doji spot where it hit bottom - it's worth a look and then check it out on the DIA too, the SPY and the Q's. IWM pretty much ignored it - I'm beginning to really like small cap.

Jimmy Crack Corn Pone says that you should buy stocks on good earnings - the market is only going to keep going up. Facts are pesky things though and the fact is a study done a couple of years ago regarding stocks during earnings season suggests that beating expectations is only a two or three day story, if that. A whole raft of other studies including a number I have done has suggested that stocks are best purchased cold not hot, stirred not shaken. And we are still waiting for that magical short squeeze on the almighty GOOG (had another long squeeze today). And as I have shown a number of times tech as represented by the Q's is on its way up, right now, even though Jimmy Crack CP said that it shouldn't be. My take is the only thing that really went up today for example was tech and, of course, small caps. So you can listen to JCCP if you want - I choose to listen to the market and let it tell me what to do.

Disney blew the doors off with its earnings but for all practical purposes it wasn't a continuing stream of revenue - they sold off some properties. I doubt they will get a boost from the wholesale trade on that - the retail trade just sees "double earnings" and that's enough to get them wet. DIS is up 57 cents right now in after hours but that's pocket change and just reflects the brokers trying to get some inventory to sell the chumps in the morning. And that's already almost a half a buck down from where it was. NASDAQ finally fixed their after hours volume widget - it was broken for a couple of weeks and we see that the volume is around 890K which isn't too shabby and reflects the fact of a lot of big transactions (retail trade? - I think not).

I'm almost back to full time day trading. If I find a good dip to buy with a good set-up I'll take it and hold it for awhile but otherwise I'm going to play my two stocks a day and go flat every evening. It is the best way.

Now for the part everyone waits for every day - I know I do - the up/down ratio is at 54% which is neutral - what's new with that? The new 20-day high/low ratio is at 87% which, for the deaf, is screaming OVERBOUGHT! OVERBOUGHT! OVERBOUGHT!. But - and this is the good news - I think - the last time we were this high we actually went higher and that was just 4 days ago. The VIX remains non-committal which is probably a safe thing to do and all four indices finished the last hour with strong white candles which signifies a whole lotta buyin' goin' on. (Jerry Lee - you made my childhood the envy of all these youngsters around me - imagine being one of the first to hear - goodness gracious great balls of fire!).

And all of this activity this week is expected because - yes - 401K money. Good for you.

About the only bad part of today was that GS went down and that is unheard of. GS started dropping just in front of the Dow. No explaining that.

I'm forecasting an up day tomorrow (what again? - yes again). I think there is still some 401K money that has to be placed and it is always placed at the highest possible prices.

Meanwhile the magic coin having thought and thought and thought (about dinner not about the market) says ... Heads - bull tomorrow - the coin is finally on the same page.

I'm calling it an up day regardless of the final score and that makes the score Marlyn 9 - 6 and 4 and the coin is 6 - 9 and 4. Bad coin ... very bad coin.


TradingGoddess said...


I just wanted to tell you that even though I am a "long", rarely do I hold through earnings.

I have found that even if a company meets or beats by a penny, you can quickly see your profits disappear.

And, you can always get back in a stock afterwards.

I really am enjoying your blog! Thanks for all the hard work you do. It is very much appreciated! People like you, who take the time to teach others to profit in the market, are a rarity indeed. Many kudos to you!

Wishing you many greenbacks and happy trading!


Marlyn Trades said...

That's a good answer - most people understand intellectually that earnings can be a blessing or a curse - the problem is it normally takes too many blessings to overcome one curse. I buy back also if I like a stock I just wait for it to stabilize after the announcement.

Thanks for calling - you are always welcome.


Great news