THURS. NOV. 6 - Thinning The Herds

Something to note amidst the volatility of the last couple of days is one very striking feature: the rallies have been massive and the declines just as bad- but on low volume. Volume for the Monday-Wednesday time frame was the lowest for a three day period in several months. Why is this? First, prices are in the middle of a range. at Protrading Network, we aim to only trade stocks that are near their highs or lows. Well, many stocks have bounced off their bottoms, but are now in no man’s land thus nobody knows what to do. Second, many hedge funds have blown out and those still around are afraid to put on major positions. They do not want to get hurt nor do they want to take any chances of further impairing performance this year…plus, they are trying to conserve capital should investors ask for withdrawal. Third, we are coming out of a major news cycle and into a holiday period. Earnings season is gradually winding down. The election is over. The period of bankruptcies every day in financials is over. Thus, there is not a lot to trade on. And fourth, we are gradually heading into the holiday season. Historically, trading slows in November and December from the frenetic pace of October and everything is sticking to form here. For day traders, this makes things every bit as choppy- but much more illiquid. Stocks can go up and down a lot faster – on a lot less volume. Thus, it all goes back to the same theme- preparation and discipline. We are entering a phase in which prices are going to move fast still, but with less and less shares so mistakes will be that much more punishing. The plus though is that the volatility is there so do your homework, do not do seemingly random trades in the middle of the day, and you’ll come out OK.

Markets overseas were drubbed overnight on the heels of the declines on Wall Street. With CSCO warning today and the interest rate cut factored in, expect more of the same...should be choppy with downside action in the techs and mixed elsewhere. There will likely be a rally at some point ahead of the jobs report, but trading should thin out this afternoon again as entities do not want to put too much money into things ahead of the big report tomorrow.

Reiterating-If the whole story is not there -
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 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified


Good-

WFMI- earnings OK, but raised needed capital through equity investment

ATVI- good earnings

SUN- smashed earnings

EXM- good earnings

UM, DUK- lukewarm mentions on “Mad Money;” Cramer liked both but said he’d hold off on buying both for now

OMG- good earnings

Bad-

WFC- undergoing a 10% dilution to raise capital…not that the stock will fall 10%, mind you, but something to watch

CSCO- wretched guidance

DOX- terrible earnings

FCN- abominable numbers

MDR- terrible earnings

THQI- horrible earnings

CRL- terrible earnings

CXW – bad earnings

LFG- horrible earnings

MNT- bad earnings

NWS- earnings warning

LVS- despite strength in MGM, LVS closed on a low…could be pretty good A-B-A2 to downside with horrible news in LVS as the company may well default

OEH- continued weak; looking for short thru yesterday’s 8.08 low if it opens higher

CLNE- declined on a failed California initiative. Could be short thru 7.20

CNB- liquidity concerns; may be short thru 3…particularly early in morning

EQR- helped lead property stocks down

CBG- another REIT which closed near a low

PLD- closed very weak; watching for potential significant weakness today

GS- downgraded

JRCC- terrible earnings

HK- poor earnings

BX- bad earnings



Earnings:

THURS NOV 6 BEF

ABV AN ANSS

ARD ATPG BR

BRL BRS BX

CCOI CEG CLR

CRZO CVC CXW

DPTR DTV EP

FLO FTO HK

HOS HUN JRCC

KEG KG LAMR

LXP MFC MIC

NDAQ OMG ROCK

SE SFY SNH

TEL TEVA URS

VCI VRX WMB

WNR


THURS NOV 6 AFT

BYI CBG DIS

DLB FLR FRP

FSYS FTI GNW

HANS MVSN NDN

NFG ONXX PCLN

PCR PDLI PSA

PXP QCOM RMD

RRGB SD TBSI

TS VRSN


Good luck today.