Ruby Tuesday - II

I bought RI a little after the open. It fell to S2 and printed an RSI(2) < 2 and so I decided not to wait any longer. We'll see how that turns out - if it gets to PP by COB I'll add to the load.

Doesn't look to me as if the market is going to do all that much today. It seemed to like the job cut report and that made the pre-market go higher.

The specialist opened JTX way high to stimulate a short squeeze and it has been falling ever since. I wouldn't buy it unless it sets up as a BOB or sits on a pivot point. It doesn't look like it's going to do either for awhile.

What Nonsense!

Sometimes I get so absolutely upset with the way radio and television report financial news it drives me to drink. (Well I don't usually need an excuse but hey whatever).

I just listened to a report on the radio regarding Jackson Hewitt tax preparation franchises and the fact that the Government is trying to close down, as the report said, "all 126 of them." Now it didn't connect right away but I looked at the chart from yesterday and this is what I saw.


What didn't connect is Jackson Hewitt is everywhere and this story regards only 126 stores.

Would you believe that the chart reflects a complete and total asinine overreaction to misreporting by the financial media? Well you don't have to take my word for it - all you have to do is read Notable Calls this morning.

William Blair notes it is critically important to note that the suits are aimed at this one particular Jackson Hewitt franchisee, not Jackson Hewitt corporate. It is also important to note that Jackson Hewitt's franchise agreements explicitly state that franchises are independently owned and operated and that any liability arising from faulty or fraudulent tax preparation belongs exclusively to the franchisee/preparer. Mr. Sohail's 126 Jackson Hewitt offices represent approximately 1.9% of Jackson Hewitt Tax Service's more than 6,500 locations, and, according to a news source, prepared 105,000 or 2.9% of the company's total network tax returns prepared last year. All of this suggests that the risk to the corporation-legally, operationally, and financially-is fairly well contained.

There is more but I am in agreement with Notable Calls - buy this stock up to 27 dollars if you can but keep it on a tight leash. This will be a great trade if you can get in.

Read Notable Calls - maybe I should tell the local radio station to read it too.

Update: I doubt anyone is going to get in at 27 - it is already up 2+ in pre-market trading and the specialist will probably open at 28.50 or better. After all he has a book full of the stock at 26 and change.