...hit the road, Jack!
Thursday, July 2, 2009 at 05:09AM ...but, do come back!...
Nowhere does it say the first trading day of 2H is like a change of seasons in the traders almanac. Today was just more of the same anemic volume grind, a day which probably sucked a few in the morning expecting something more than just a market that slowly rolled over by it's close. If you’re following the script here this week, you knew the day was probably done by 10:30. Firstly, we had a good China PMI overnight that erased all the previous days CCI# losses by premkt/ open as proposed yesterday. A decent ISM # that continues to show a bottom in manufacturing followed and we came up to our interim top levels of 930-935 quite quickly, a level that resembled the 4,000 mile long Great Wall as the market stretched along it all day and eventually rolled from it. Interestingly, the market push to 930 was not accompanied by the commodity linked stocks as is the case most often. What we had was a decoupled trade with the PMI- sectors that progressed into a bigger one as the USD rolled over later in the day. Our hesitation to enter a trade due to inactivity of the commodity stocks into the previous days close was not in vain.
The only stock(s) that garnered our attention was STEC as it lit up our shadow list/ platforms from the bell, the other was the SAFM for an 8% bounce from alert yesterday.
So, we didn’t muster enough strength to push through 930-935 today and putting all weight on NFP tomorrow to do so is seemingly a lost cause following ADP release today. Seemingly, the only probability is some disappointment, so you might as well hit the road now to avoid traffic out of the city!. Whatever you’re doing this holiday weekend, enjoy and play safe!. Oh yeah, speaking of play safe. You know our number #1 rule since day 1, we don’t hold stock into earnings!. As shown this past earnings season, you can make plenty of money after the release or pre-announcement of a report even after a gap up ..eg. STEC , DDRX, ARUN…and so on. You don’t need to gamble for a gap up by holding. If the last few days are a prelude of things to come, you are going to be sitting on a potential firecracker malfunction into the ground !….MYGN, BEAT. ILMN SCHN. Yes, a couple of these are pre-announcements/ one sector and you can’t do anything if you‘re unlucky to be caught in a pre-announcement, but, believe us!!…this is a sign of things to come if companies disappoint this Q. You will see huge 20%+ losers all over the place this upcoming Q.