The Morning Report for Wednesday, May 23, 2012
June 15, 2012 6:42:05
The biggest fallacy in day trading is that success breeds success. Preparation and good situational awareness breeds success. Never trade yesterday’s stocks, today.
So, we knocked it out of the park Tuesday. We called JPM long out of the gate in the morning, caught amazing trades on PCX as rumors of bankruptcy then a line of credit rocked the stock through multiple halts and went short SAP off the news wire on announcements of its intent to acquire ARBA. Had you been in our trading room, you would have received the calls early, unlike my Facebook friends, but there were plenty of profits to go around. Now that I have rung the register and taken a bow, the time for celebration is over. Turn the page onto a new day filled with a whole new set of parameters.
The state of the world is “on edge.” Asian markets and European Futures are trading sharply lower into the early hours of Wednesday. All eyes are on the summit in Brussels to see what fate Europe has in store. Greece cannot elect a government and the Dutch right-wing politician, Geert Wilders, who aims to turn a September 12 parliamentary election into a referendum on the euro and EU membership, filed a lawsuit on Tuesday aimed at postponing the Netherland's ratification of Europe's permanent bailout fund until after the poll. Someone ought to tell these guys to get some Belgian chocolates after the summit breaks.
My geopolitical tirade aside, the dollar is getting stronger. Commodity prices will continue to see pressure if the dollar remains strong. Considering 20% of the S&P is based on energy, a strong dollar does not bode well for a strong market in the absence of economic growth.
Our eyes will be on DELL after they reported another disappointing quarter. Other notables are PETM and PCX. How can I forget Facebook? Looks like it will be available to short and, given the bad press, there could be good opportunity to beat the stock down further. No mercy!
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