THURS. JUL. 3 THOUGHTS

Today’s word is illiquidity. On half-days for the market before a big holiday when nobody’s primary focus is on business and a ton of people aren’t at their desks, the market gets very very thin. Two things typically happen on a day like this. First, nothing. Nothing at all. The Dow trades in a range of 40 points and stocks mark time. The other thing is that stock prices have a bizarre move which happens easily simply because a few big players can push stocks up or down easily because there is not much of a push back as so many people are out of the office. For perspective, the Dow rallied almost 200 points on the half day of trading following Thanksgiving in 2007. Now, there is rarely a way to tell which scenario will occur. However, given the fact that this is a 3 ½ day weekend, given the fact it is a big terrorist worry weekend, given the fact that oil is where it is, given the fact that people are worried about the financial system, do not be surprised whatsoever if there is a substantial move today. Either way, be very very careful because the spreads will be big for the average stock today so the atmosphere is what the day trader makes of it- cut down on your size today and don’t be shocked at anything that happens.

Overnight, markets in Asia were generally down, Europe generally lower as well with oil up again. But, the jobs report came out neutral this morning- this is good because it indicates that the worst fear of many people that unemployment is exploding will not come to pass. So, look for a higher open. If the market opens higher and sells off, look for an A-B-A2 to the upside. The market is oversold and this is a great shot for short covering.

Yesterday was a stunning day in the scheme of things. The breadth of moves yesterday in steels and some of the oil stocks was something the likes of which many of us have never seen- this despite the fact that commodities prices rallied. A lot of the commodities rally was due to things like the raising of margin requirements which forced traders to put up more money which forced many shorts to cover. So, the watch list today is centered around many of thedse stocks and it is a rather long one for a short day:

LIZ- closed near major low yesterday; if it opens higher, looking to short 13 if it gets there.

AXL- looking to short 7.50, particularly if it opens higher.

LEG- if it opens above 15 and goes below, looking to short south of 15

CAR- closed near low; looking to short at unch if it opens higher

CQB- if it opens higher, looking to short at unch and especially 13

PCR- if it opens north of 28 and sells back off, looking to short thru 27.95

ACI,BTU,JRCC,ICO- coal stocks destroyed. Looking for A-B-A2 on long side unless the things uptrend from opening lower in which case, massive buys thru unch.

CLF,MEE,STLD,WLT- incredible materials losses and same spot analysis as above.

X, AKS, NUE- steels rocked. Same as above.

ANR, CHK, SLB, PDO- a few oils which were destroyed. Same as above.

IPI, POT, MON- a few fertilizers that got killed. Same as above.

FSLR, SPWR, LDK, CSIQ- days of getting hit…if they open down in particular and go positive, particularly on a half day, could have major major short covering,

PDX, SE- Cramer

NVDA- warned…looking for some sort of A-B-A2…will probably trend with market

GOOD LUCK TODAY and have a wonderful holiday.