Watchlist for March 10, 2008

I got in a short discussion on Friday with Phil about whether to use the low close or the intraday low when looking for a double bottom. Phil said that he's seen other people talk about using the January closing low while I've been using the intraday low. As I explained on Friday, I like to use the intraday low because I want to see the market attempt to take out any stop loss orders under the market. I believe you'll get a better bottom if those stops are triggered, thereby flushing out those who are not committed longs (the weak hands).

It's important to keep in mind what really transpired on those days when we made the lows in January. Things were very weak in the pre-market and the market gapped down big both days (1/22 and 1/23). The Nasdaq chart shows clearly shows the gaps:

But as I'm always saying, the candlesticks for the S&P and most indices that contain NYSE stocks don't show the true opening action b/c of the staggered opens of NYSE stocks. Note the lack of gaps onthe S&P chart:

But SPY shows the real opening action and what prices you would have got if you bought the S&P at 9:30:01:

So in this case especially, it doesn't make sense to me to ignore the lower wicks on the S&P. There was a lot of very critical trading (and support) down at the extremes of those January candles.

On Today's Calendar:

10:00 -- Wholesale Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

See one of the recent 'Chart Reading' posts for some potential swing candidates. Also be sure to check my typical swing trade entry & exit rules.

Potential day trades:

(From Briefing.com)

Gapping Down

In reaction to weak earnings/guidance: CRAI -31.9% (also downgraded to Hold at Stifel), , SSRI -2.9%, BX -2.3%, SIX -1.2%... Select mining stocks showing weakness on lower metals' prices: CDE -4.3%, PAL -3.8%, HL -3.3%, BHP -3.0%, RTP -2.6%, GOLD -2.5%, DROOY -2.4%, MT -1.4%... Other news: KERX -85.0% (announces that SUN-MICRO phase 3 clinical trial fails to meet primary efficacy endpoint; stock has been subsequently downgraded by multiple analysts), LVLT -7.4% (announces that President and COO Kevin O'Hara is resigning; Sunit Patel, co's current CFO, will continue in the role of CFO), CFC -4.3% (FBI investigates Countrywide), FNM -3.5% (Barron's mentions Fannie Mae negatively), STI -3.0% (Fitch places on Rating Watch Negative), MICC -2.8% (still checking), FITB -2.0% (Fitch places on Rating Watch Negative)... Analyst downgrades: LPSN -6.0% (downgraded to Sector Perform at RBC), SMTS -4.5% (downgraded to Reduce at SunTrust), LNCR -3.8% (downgraded to Sell at Deutsche Bank), CIEN -2.7% (downgraded to Mkt Perform at RBC and downgraded to Underperfrom at JMP), ARO -2.6% (downgraded to Sell at Citigroup), TTGT -2.6% (downgraded to Perform at Oppenheimer), AHG -2.4% (downgraded to Sell at Deutsche Bank), SPLS -2.3% (downgraded to Neutral at tier 1 firm), VCLK -1.2% (downgraded to Perform at Oppenheimer).

Gapping Up

In reaction to strong same store sales: MCD +4.5%... M&A news: TCM +28.8% (receives proposal to acquire all outstanding for $10.25 per ADS), NFS +23.9% (receives $47.20 per share offer from parent company) ACLS +2.4% (Sumitomo Heavy and TPG to raise bid for ACLS to $6/shr from $5.20/shr)... Other news: FMT +25.8% (Kelly Capital Investments files 13D; express' its interest in opening discussions on an acquisition), SPPI +16.8% (FDA approves NDA marketing approval for LEVOleucovorin), IMAX +10.4% (signs exclusive 35 theatre deal for South and Central America),SEED +10.3% (announces nationwide corn seed approvals and additional provincial approval), BCE +6.6% (plan of arrangement approved - debenture holders' lawsuits dismissed), BBI +6.3% (Fine Capital Partners discloses 6.13% stake in 13D filing, Cramer makes positive comments on MadMoney), NLY +5.4% (announces Q1 dividend of $0.48/share), ABK +4.4% (trades as high as 9.50 in after-hours on mkt on close imbalance of ~6.7 mln shares), TSRA +3.4% (says arbitration with Amkor to proceed as scheduled), TSO +3.1% (drops poison pill; may spark positive response - Citigroup), HBC +2.5% (shares jump as bigger stake in Bank of Communications eyed - WSJ), BP +2.1% (still checking), AMGN +1.2% (announces update to U.S. Prescribing Information for Aranesp and EPOGEN; revised boxed warning applies to oncology indication for the class of approved ESAs)... Analyst upgrades: MFA +2.4% (upgraded to Strong Buy at JMP), JWN +2.0% (hearing upgraded to Buy at tier 1 firm), ARTG +1.8% (upgraded to Buy at Roth Capital), OMTR +1.7% (upgraded to Outperform at Friedman Billings), MHS +1.7% (upgraded to Buy at tier 1 firm), JCP +1.6% (hearing upgraded to Buy at tier 1 firm).