FRI. AUG. 15 THOUGHTS

By far the most common question/topic around the office yesterday (other than the fate of the Yankees and Mets for the rest of the season) was a trade that a group of traders did in U.S. Airways (LCC). Thus, it is really relevant and in everyone’s best interests to take a couple minutes out and really explain what happened yesterday. Late morning yesterday, LCC was halted after they announced a share offering with the proceeds from said offering to be utilized for general corporate purposes. The stock was halted just before noon around 9.50. The pricing of the offering was announced around 1:15PM at 8.50. With more shares now outstanding and the company flat-out putting a value of 8.50 on the shares, it means that the stock should trade around 8.50. When it reopened, LCC fell to about 8.65 before rallying to 8.75. Think about that. It was holding above where the offering was. It’d be like me telling you that you could $8.50 worth of groceries from a store and you telling the cashier that you’d like to pay more for the food than the $8.50. Without going into the ‘why’ this sometimes occurs because it’d take several pages of computer space, let’s focus on what happened. The stock consistently traded in a range of 8.70 to 8.75 for about two minutes between 1:27 and 1:29. Again, note that this is above 8.50 (where it should theoretically trade). So, if you are a day trader and either (luckily) shorted the stock before it was halted or you (intellectually) did it after it re-opened in thinking it’d go to 8.50, you are watching on pins and needles in that there was a buyer at 8.70 and a seller at 8.75. Most day traders pile on to the momentum no matter what so it was to be no different here. The only difference was that it was to be exaggerated. When the 8.75 reloading seller left, countless day traders went to hit the ‘buy to cover’ key while other momentum players hit the ‘buy’ button at the same time. This created a mini short covering panic as the stock ran to 9 in seconds. The moral of the story is a recurring theme: namely, if a stock is not performing as expected, the ferocity of an immediate-term move is often fierce in the opposite direction from where it should be going. Basically, don’t think…just act.

Overnight, markets were up globally with commodities drilled; oil is down over 1% and platinum is down 6% at this writing. Other stories out are generally positive; for instance, ABK and MBI got taken off of CreditWatch. So, there should be a bid to the market today.

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-

ABK/MBI- up on the CreditWatch story. Best trades will likely be done before 8AM wf there are bids/offers way away from the things went out last night.

PMI- should move in sympathy with ABK/MBI

LEH- Soros fund boosted stake

CY- buying back shares via a convertible; SPWR should move in sympathy

A- good earnings

ADSK- great earnings

KSS- good earnings

IRF- received 21.22 takeover bid; it is a buy thru 21.22 if it goes above there

FFHL- good earnings

Bad-

DV- bad earnings

HAR- bad earnings

JCP- bad earnings

FRI AUG 15 BEF

ANF .91/868M 1.37/1.06B 5.53/4.07B 6.14/4.53B

GU .22/57M .25/64M .95/254M 1.41/420M

JCP .42/4.28B .75/4.67B 3.25/19.41B 3.55/19.78B

NWY .09/284M .11/281M .54/1.20B .63/1.26B


Good luck today.

www.protradingnetwork.com

THURS. AUG. 14 THOUGHTS

How fast things change. Oil had it biggest one day gain in a few weeks yesterday as prognosticated in this space. Along with it went many of the oil stocks and cousin issues like fertilizers. Financials were smacked again in the early-going. However, an interesting feature occurred in the afternoon. The financials got up off the floor and began to lift. For day traders, all this does is emphasize a point made in this blog countless times- do not let a mindset be set in stone if you are day trading. Just because oil is way up does not mean that there is a 100% chance of the equities market falling. Act with the momentum rather than overthinking. If oil is up 3 dollars yet you look up and see LEH approaching unchanged after being down all day, it does not mean that LEH can’t go up 70 cents in five minutes (which it did). Always remember to act on facts rather than a perception of what you feel the facts should be.

Overnight, markets across the world are quiet in all sectors following yesterday’s declines in the U.S. and the higher oil prices. There seems to be a small bid to the market this morning so look for a quiet day with a bias to the upside barring unforeseen events.

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-

IPI- good earnings; trade of day- IPI not really trading a good deal higher in pre-open; it is a short thru unch for a point or more.

CTRP- good earnings

IOC- great earnings

NTES- good earnings

WMT- mixed; good on quarter, but guidance does not appear to be great.

PDO- very strong yesterday; if it opens lower and approaches unchanged particularly if oil is up, good be a great buy thru unch

LNG- has been very strong last couple of days; with strong oil, probably a buy thru 4.60

EL- great earnings

Bad-

NTAP- bad earnings

FOE- very weak yesterday

TWB- atrocious earnings yesterday; if it opens above 7.90 and approaches that level (yesterday’s low), likely a short thru 7.90

GSOL- bad earnings

THURS AUG 14 BEF

ABV 1.09/? 1.09/? 3.47/12.22B 4.09/12.66B

BGG .23/634M -.22/385M .62/2.20B 1.08/2.29B

BR .70/788M .24/471M 1.40/2.20B 1.53/2.29B

CCJ .40/? .45/? 1.54/2.12B 1.93/2.09B

CPA .56/299M .60/342M 2.80/1.28B 3.36/1.46B

EL .56/1.93B .24/1.86B 2.36/7.82B 2.66/8.39B

FLO .27/524M .28/521M 1.21/2.26B 1.36/2.45B

GSOL .20/62M .16/41M .79/215M 1.04/259M

SJM .77/647M .97/788M 3.44/3.86B 3.64/4.86B

URBN .29/442M .33/469M 1.26/1.87B 1.54/2.21B

WMT .84/101.74B .76/99.70B 3.49/412.07B 3.86/442.48B

THURS AUG 14 AFT

A .54/1.47B .64/1.56B 2.12/5.88B 2.45/6.31B

ADSK .52/606M .55/622M 2.24/2.50B 2.63/2.81B

DV .38/272M .51/288M 1.80/1.09B 2.26/1.24B

HAR .77/1.05B .56/1.04B 2.44/4.09B 2.95/4.46B

JWN .64/2.33B .56/1.96B 2.68/8.76B 2.93/9.12B

KSS .73/3.76B .57/3.97B 3.07/17.05B 3.46/18.16B

RRGB .49/211M .50/220M 2.09/905M 2.41/1.04B

SID .93/2.33B .92/2.76B 3.20/9.83B 4.37/13.24B

Not a lot doing so be a little more cautious than normal. Good luck today.

www.protradingnetwork.com

WED. AUG. 13 THOUGHTS

Despite the continued broad decline in oil prices yesterday, there was a discernable shift in market sentiment. Notably, shares of many energies companies like HK closed higher yesterday. Yet, the financial sector was one of the weakest areas of the market yesterday with shares of entities like GS and WB closing down several percent each. What is particularly relevant is that the opposite divergence occurred just before the market began to rally. Thus, if the trend holds, weakness may take ahold of the market during the malaise period of late August. For day traders, it means increased vigilance and care. We as a group should not become giddy with excitement simply because what we’ve known to hold true for so many months might be coming back in vogue. However, we should be aware of the noted change in sentiment and trade accordingly all the while aware that some external event could change the market’s tone dramatically in the low volume and news flow period to come as the calendar progresses toward labor Day. For today, however, it'd seem like commodities are due to bounce.

Markets throughout Asia were down hard although the declines were stemmed in Europe. Oil is bouncing a bit and the metals markets look good to go for a huge rebound. Look for choppiness all day with commodities a feature.

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-

NVDA- good earnings

AMAT- good earnings

CREE- good earnings

CFSG- good earnings

Bad-

CVS- buying out LDG in a huge drugstore deal

CSIQ- great earnings, but the stock may fall after the run-up

DE- atrocious earnings. CAT may follow through

WCG- bad report filed with the government

PODD- bad earnings

TWB- horrible earnings

airlines- should be weak with oil; could reverse at 10:35AM when oil stocks reprot comes out...worth monitoring

LIZ- bad earnings

M- bad earnings


WED AUG 13 BEF

BVF .35/188M .27/170M 1.24/742M 1.16/675M

CSIQ .45/206M .56/240M 2.22/896M 3.50/1.56B

DE 1.37/7.24B 1.14/6.56B 5.08/25.86B 6.09/28.38B

GIL .45/356M .45/340M 1.48/1.23B 2.09/1.47B

LIZ 0/970M .58/1.16B 1.39/4.37B 1.53/4.45B

M .19/5.76B .02/5.78B 1.86/25.76B 2.03/25.96B


WED AUG 13 AFT

ANW .23/616M .37/743M 1.21/2.69B 2.65/4.14B

CAI .77/644M .68/631M 2.72/2.41B 3.09/2.63B

CLNE -.11/34M -.04/38M -.32/143M .28/217M

CTRP .22/55M .26/63M 1.04/242M 1.49/349M

IOC -.11/230M -.21/208M -.51/926M -1.01/1.18B

IPI .38/96M .62/125M 2.19/466M 4.59/798M

NTAP .22/862M .30/919M 1.41/3.87B 1.72/4.41B

NTES .39/99M .36/103M 1.44/398M 1.66/452M

WX .14/68M .18/76M .70/285M .91/388M


Good luck today.

www.protradingnetwork.com

TUES. AUG. 12 THOUGHTS

Whether one uses fundamental analysis, technical analysis, a blend of the two, random strategies based on events like the outcome of the Super Bowl or any other methodology to trade stocks, realize this: trading is about 5% all of that stuff and 95% psychological. When nothing changes in a particularly rapidly ascending or descending market, the only reason said market tends to move is psychology. Even when we use the hocus pocus of technical analysis or make an often (uneducated) guess as to whether the departure of a CEO is good for a company, the fact of the matter is that we should largely be focusing on the psychology of the situation. If a stock opens down dramatically because a company missed its earnings estimates and it gets positive on the day, it does not matter se why it happened; just accept the fact that it happened. Our job is to figure out what is inside the head of the person on the other side of the computer terminal. If we control what they are thinking rather than react to it, we will be much better off. Along with this, the most important thing written in this space to date: trust your own instinct and never hesitate. If SHLD trades down 4 because they missed earnings by 60 cents and now it is unchanged on the day, don’t ask why it is not down; rather, merely accept that it is not down and buy it. There are only a few great opportunities each day. If you hesitate, you cannot win. So, since you know better than anybody else knows you, trust yourself. Much more often than not, you are better listening to your own internal voice rather than asking around you what they think of a situation- this is true whether it be a life situation or specifically, a trading situation.


Markets are quiet right now; Asia and Europe mixed. The stock market here will probably seek direction from oil with choppy trading likely ahead.

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-

HK- share offering 26.53. It is down 8 points in two days; if it opens down (even pre-open), it is the trade of the day thru 26.53 (which is where it is priced)

CRD/B- very strong yesterday.

LNG- very strong yesterday

LDK- great earnings; CSIQ, STP and other solars will likely sympathize

PBR – good earnings

FLR – great earnings

JASO- fair earnings

MBT – good earnings

FOSL- good earnings

HANS- strong yesterday

CAL, UAUA, DAL, AMR- strong on declining oil

AAPL- upgraded


Bad-

SD- has been beaten down last few days

SONS- bad earnings

MDR- bad earnings

SCA- atrocious earnings



TUES AUG 12 BEF

COMV -.38/13M -.24/26M -.52/99M .04/141M

DNDN -.22/70K -.23/90K -.93/450K -.84/2.91M

FOSL .25/347M .56/411M 2.21/1.65B 2.64/1.87B

GIGM .17/53M .17/53M .77/222M 1.08/286M

GRO ?/44M ?/16M ?/92M .18/101M

HPT 1.22/295M 1.21/295M 4.80/1.35B 4.79/1.35B

JASO .15/170M .28/305M .91/1.03B 1.47/1.73B

MBT ?/2.56B ?/2.80B 6.41/10.33B 7.12/11.68B

SWC .22/217M .46/226M .90/822M .99/803M

TJX .45/4.61B .62/5.05B 2.26/20.18B 2.47/21.20B

TWTC .01/290M .04/297M .13/1.18B .45/1.28B

VSE .02/925M -.01/1.09B .09/3.81B .43/5.34B

WW .80/430M .85/435M 3.35/1.74B 3.71/1.86B

TUES AUG 12 AFT

AMAT .14/1.84B .19/2.02B .78/8.08B 1.07/9.26B

BOBE .44/443M .49/444M 2.10/1.81B 2.44/1.90B

CREE .09/131M .10/137M .37/488M .53/592M

NVDA .12/908M .22/1.01B 1.01/4.16B 1.22/4.43B

Good luck today.

www.protradingnetwork.com

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.

www.protradingnetwork.com