MON. JUN. 30 THOUGHTS

Most people do not know the name Charles Wilson. But, he is attributed with one of the most famous misquotes in American business. Wilson was the one-time President of General Motors and the words “What is good for GM is good for America” are oftentimes mistakenly attributed to him. While he did not say that, the line is indicative of the sheer arrogance that many GM executives had while working at the company anytime following World War II. Some would say “pride” over arrogance; it is semantics for this discourse. Throughout the 1950’s, GM built its image as the premier company in the world. The company built itself to be at one point the largest corporation on the planet; it took about 50 years to build that image. Well, dividends aside, the stock has now officially 50 years of work as it is now trading at levels not seen since the Eisenhower administration of the late 1950’s. It is worth taking a few moments for us day traders to note this history lesson because of the true financial carnage that lies around among us. Every day, we buy and sell numbers on computer screens. No stock certificates. No balance sheets. Just numbers. But, we really need to have an understanding of what these numbers mean. It is not our job to worry about these concepts intra-day except for one major point: it is our job to act on these concepts so that we understand what we are dealing with. Furthermore, just because GM traded at levels not seen since 1982 two weeks ago didn’t mean that it couldn’t trade at lows not seen since 1957 last week…and one should not necessarily stray from trading GM (or stocks like it) just because it is inconceivable to many people that these stocks can act the way that they do in the bigger picture.

Overnight, markets in Asia were lower across the board; ditto for Europe with the notable exception of the FTSE in Britain. The dollar is weak and oil very strong in the early going. Futures, however, are not down all that much. If the market holds in here, that short covering scenario discussed in the blog post from Tuesday the 24th should come into play. Either way, the 3 ½ day workweek is going to lend itself to rather thin trade with little newsflow so as always, keep your eye on financials and oil yet if the market fails to react to bad news in either sector, this oversold market should find some sort of reversal move in here.

MYGN- one of its major drugs has a failed phase III trial. The stock has gotten thrashed this morning, but has trickled higher. Cannot pick numbers, but looks like an A-B-A2 to the upside.

HEV,UEC,RNN, FLS- Russell stocks which closed near their highs. All should trade lower this morning, but if they go thru unch on the upside, they are all likely buys

VLNC,CEDC,SDTH,MHO- all very strong on Friday; if they trade down initially, they are all buys thru unch

VMW, ABAX- weak on Friday; looking for continued momentum to downside in some fashion, particularly if they open higher, they are shorts thru unch

GSS,PRWT,PRC,TCM- weak on Russell. They all should open higher, but are shorts thru unch if they do open up

BEZ, HOS- on Cramer’s show Friday

TSL- closed on its low on earnings from Friday; if it opens up, and holds unch, it becomes an A-B-A2 to the upside

HRB- good earnings; likely an A-B-A2 to upside

Very low newsflow; very tricky today…trading will likely be thinner than normal and a bit more volatile on the average stock…not the breadth of the move for the day, but the breadth of moves while in day trades will likely be a bit wider than normal so be careful today (and all week much less always)

Good luck today.