MON. AUG. 11 THOUGHTS

First and foremost, on a personal note, a heartfelt ‘thank you’ to everyone who sent me (Erik Kolodny) kind words as well as kept my new daughter in their thoughts. It has not been an easy few days and we are hoping all will be OK in time. The world’s newest trader was born on Wednesday morning at 5:25AM with a weight of 6 lb, 5oz. Her name is Samara Addy Kolodny.

On another note, my appearances this week should increase in frequency and duration, but it obviously a very hectic time in my life right now so bear with me blog-wise and on the chatroom should I seemingly randomly appear and disappear; I will, as always, do my best.

Ok. So now everybody has their ‘why’ re the run-upand the market ‘acted as it was supposed to do so.’ Oil prices continued their very steep decline and the Fed left interest rates alone (as expected) last week. Thus, all of a sudden, a vacuum was created; investors jammed out of their oil stocks. But what to do with their money? It went across a potpourri of asset classes from the dollar to bonds to stocks. But not commodities. Suddenly, the reason the financials began outperforming last week became a little clearer: inflation is not as big of a problem as was thought. If this is the case, it certainly took time to believe it (thus the reason for the decline in oil stocks to outweigh neutrality and gains in other sectors last Monday), but the rest of the week was a different story. With the Fed definitely on the dovish side of the fence (else more than one Fed governor would have dissented), the signal was ‘steady as she goes’ with the implication that not only is inflation not an issue, but the financial crisis of 2008 is seemingly in the past. As day traders, the theme remains two-fold and is something we’ve been trying to hammer home for several days now: 1) whether the aforementioned analysis is correct and more to the point whether you agree is irrelevant. What is relevant is that as a day trader, only day trade these stocks with a mind to the big picture. Which leads to 2)if the aforementioned hypotheses are true, the mind of the average day trader is entrenched on shorting financials; if indeed this is not the thing to do anymore – ‘right’ or ‘wrong,’ all that matters for day traders is what happens in the next few minutes rather than few days or months. So, don’t get caught up in the whole “I can’t believe this is happening” mind-set. Act briskly and professionally; doing so prevents paralysis of holding positions on the wrong side of the fence.

Reiterating-New code for the next few days if the whole story is not there due to an expansive number of ideas-
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 based on direction of the market unless specified

Good-

FEED- good earnings

FSYS- extremely strong on Friday, closing at high of day

RIMM- closed very strong on Friday at high of day

CPN- good earnings
LDK- upgraded this morning ahead of this afternoon’s earnings

AAPL- announced brisk sales of software for its iPhone

DBD- fantastic earnings

WRC_ closed strong on Friday

POWR- strong on Friday


Bad-

SRDX- discontinued phase II trial with MRK

SIRF- lost a patent lawsuit with BRCM

FMCN- stock has been beaten down for the last few days

HK- announced share offering

Not looking to be gangbuster day trading day following wild vacillations last week combined with it being a summer Monday.

Good luck today.

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