It looks like the Plunge Protection Team is trying to defend the January lows again. The Fed did a surprise rate cut back in January around these levels and they made another surprise move today. This time it was an increase in the Term Auction Facility. The futures popped on that news for about a millisecond then the market went right back to worrying about the jobs report. And rightly so b/c that jobs report, and adjustments to the December and January reports, stunk up the joint. So all eyes will be on those January intraday lows to see if they hold or break.
P.S. I see that this site is getting a lot of hits from people searching for inverse ETFs again. Maybe it's time for a bounce...
On Today's Calendar:
- nothing
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: PSPT -23.7% (also downgraded to Mkt Perform at Piper Jaffray), CPRT -13.5%, BLG -13.4%, BOOM -10.4%, VE -9.7%, ANGO -9.3%, RAE -7.8% (also downgraded to Market Perform from Outperform at Morgan Keegan), CASY -6.9%, MRVL -6.6%, DSTI -5.6%, UMC -1.5%... Select financial stocks showing weakness on multiple negative news items: LM -5.6% (announces that it has obtained a letter of credit from a large bank to provide support to a Structured Investment Vehicle holding in a money market fund), WM -4.5% (seeks cash infusions from private-equity and sovereign-wealth funds), CIT -2.2%, C -2.1% (to reduce residential mortgage assets in its U.S. mortgage biz by approx $45 bln over the next 12 months), LEH -2.0%, MS -1.9%, GS -1.6%, MER -1.4%, BSC -1.3%... Select solar stocks showing weakness: YGE -4.2%, SOLF -3.7%, CSIQ -3.1%, FSLR -2.4%, JASO -1.6%, ESLR -1.3%, SPWR 1.5%... Other news: FRZ -22.1% (Federal officials executed a search warrant at the co's office and downgraded to Mkt Perform at Wachovia), ABK -11.1% (prices common stock and equity unit offerings for an aggregate of $1.5 bln), NG -8.0% (plans C$130 mln shr offering), ALD -7.0% (files for a 4 mln share common stock secondary offering), TI -6.9% (showing continued weakness after reporting qtrly results yesterday), PNM -6.2% (announces electric rate recommended decision issued), MT -2.6%, BHP -1.6% and RTP -1.6% (still checking)... Analyst downgrades: ZINC -8.5% (downgraded to Mkt Perform at Friedman Billings), RAE -7.8% (downgraded to Market Perform from Outperform at Morgan Keegan), SHO -6.5% (downgraded to Mkt Perform at Keefe Bruyette), RDY -3.8% (downgraded to Hold at Citigroup), FCX -2.2% (downgraded to Mkt Perform at Friedman Billings), TRAK -2.1% (downgraded to Mkt Perform at JMP), HSII -1.7% (downgraded to Reduce at SunTrust), INFY -1.4% (downgraded to Hold at Kaufman), KWK -1.3% (hearing downgraded to neutral from buy at tier 1 firm and removed from "America's Buy List" at tier 1 firm).
Gapping UpIn reaction to strong earnings/guidance: MVIS +19.3%, SMTX +17.5%, UWN +17.2%, ZQK +10.2%, OPTM +9.6%, EBS +9.3%, EJ +8.2%, IDIX +7.4%, NSM +7.1%, SWHC +7.0%, COO +6.2%, VVUS +5.2%, ANSW +5.1%, PSMT +4.8%, NSTR +4.6%, CIEN +4.3%, AUO +3.5%, MF +3.3%, CPE +2.8%, DEPO +2.3%, FIZZ +2.0%, IVC +1.3%... M&A news: ATAR +8.1% (receives offer from Infogrames Entertainment S.A equal to $1.68/share)... Other news: SFI +14.4% (co declared regular dividend & is holding business update call), PWER +10.0% (extends $50 mln loan agreement for 2 yrs), VMED +6.3% (appoints Neil Berkett as CEO and announces the upcoming resignation of its Chief Financial Officer), TMS +6.3% (rebounding after this week's ~11% decline), CHU +4.3% (to spend RMB20 bln on GSM update - Pacific Epoch), CMO +3.4% (modestly rebounding after yesterday's ~30% drop), SPC +2.9% (has entered into a confidentiality and standstill agreement with Harbinger Capital), ARRY +2.9% (Director bought 30K shares at $6.37 on 3/5), NFLX +2.2% (announces authorization of new $150 mln stock buyback), ALB +2.1% (to raise prices of ETHACURE curatives), SAP +2.0% (still checking), EGO +1.8% (continued momentum following yesterday's 12% surge), BHI +1.8% (reports Feb 08 rig counts), KNL +1.7% (announces 10b5-1 Plan; Banc of America Securities will have the authority to repurchase up to an aggregate of ~$10 bln worth of the cos stock)... Analyst upgrades: BBI +6.2% (added to Top Picks list at Citigroup), URBN +4.7% (upgraded to Equal Weight at Morgan Stanley), BIG +3.7% (upgraded to Buy at Soleil), GLBL +3.0% (upgraded to Buy at Jefferies), STRA +3.0% (upgraded to Buy at Stifel), CEO +2.7% (hearing upgraded to Buy at tier 1 firm), MKTX +2.5% (upgraded to Neutral from Underperform at Credit Suisse), FLWS +2.3% (initiated with Buy at Soleil), MPG +2.0% (upgraded to Hold from Sell at Deutsche Bank), HITT +1.7% (upgraded to Overweight at Thomas Weisel), EAC +1.2% (hearing added to "America's Buy List" at tier 1 firm), ULTI +1.2% (upgraded to Accumulate at Brean Murray and upgraded to Buy at Broadpoint), SWX +1.0% (upgraded to Buy at Citigroup).
Disclaimer & How I use this list
Mike,
I notice you use the january 'range low' of the candles. This mornings 9.30 bounce seems to have come off the 'price low'.
I'm curious what the pros & cons are of each approach.
Thanks in advance.
P
Phil,
I'm not sure I know what you mean by range & price lows. But in general, I like to see a prior low broken just so that all the stops beneath it can be taken out. I think that's the best way to flush out the sellers and get some Johnnie-come-lately shorts on board.
Mike,
I'm using daily candles and keeping an eye on the levels of 23rd Jan.
By a range low I mean the bottom of the thin stick of the candle. For price low I should have said close.
So I was watching the bottom of the stick but today the bounce seemed to come off the close (ie the solid part of the candle).
I know you use the stick but reading other bloggers I get the impression they use the open & close prices.
Anyway I was wondering if you had an opinion.
Hope that all makes sense!
P
I prefer to use the absolute (intraday) low for the reason I mentioned above -- that's likely where the stops are. What you're calling the "stick" is usually called either the wick or the shadow of the candlestick. So I use the bottom of the lower wick in this case. But there are plenty of examples of double bottoms that didn't quite reach the prior intraday low.
The new 2X long gold ETN is DGP, the 2X short is DZZ. The new long unleaded gas is UGA.
I noticed your comment about several hits for the inverse ETF's. I have been short in the market (QID's) since Christmas. In fact my account is up almost 60%. However today I did not place a trade except for a very short time on the long side with Amazon calls. It was just a small trade. However I could not put a QID position on because the market appears to me to want to bounce. I don't have that much confidence in my feelings but I did not buy the QID's because of it. The whole time I kept thinking am I crazy. Then I read your comment. I guess we will find out early next week. Thanks
Bill,
My point wasn't that people shouldn't be short it was about the timing of trying to initiate shorts yesterday morning. It seems like a bad spot technically to start shorting to me. I prefer to short bounces.
Given all the bad news yesterday and the fact that it was so obvious that the market was headed lower that people were Googling for ETFs to short it seems like that trade is too obvious and too crowded.