TUES. JAN. 6- Bor-ing

Well, the new year has started and…ho-hum. Volume yesterday remained very lackluster and the general malaise that has overtaken the markets trading-wise over the last few weeks continues. There are a few reasons for this. First, a lot of people are just coming back from several days if not several weeks of vacation so it takes a little time for traders to figure out exactly what they want to do. Next, many people are still on vacation. As the father of two very young daughters, trust me when I say one of the best times to go to Disney World is the first week in January. The weather is picture perfect and the crowds of winter break kids are not there. There are many travel deals out there thus there are many people simply not at that desks yet. The third reason is that few people have any conviction in their thoughts as to what the markets will do this year much less this week. The war between those who think the worst is behind us and those who feel things like GM and Madoff can continue to sink the market is causing a stranglehold in activity as there is no confidence anyway. Finally, there is still a relative dearth of news. Earnings season does not start for a couple of weeks and few companies release major news the first week back. So, as we enter a busier time (as soon as Friday when the unemployment report is issued), tiptoe back into the trading arena, but be aware that this light volume environ will likely continue for a few more days.

Markets throughout the world continued to rally overnight. Asian markets were up around 2% across the board with European bourses up 1% or so. With oil up one more time again, prices state-side are up as well. Yesterday was a prime opportunity for a sell-off and when none happened, it has given some people a bit more of an impetus to get back in. Look for the gains to hold overall as there just is no real selling pressure out there, but in relatively placid trade.


Watch list:
162009Eriklist.zip

Reiterating-If the whole story is not there -
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 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-


Good- The following stocks have good news and/or a strong technical pattern

IDEV- being bought out by ENDP; unique structure…$4.50 in cash plus up to $3 more based on (vague) regulatory milestones…could be particularly interesting in the pre-open as people try to figure out the true value of this deal

MOS- beat on earnings, but said forward guidance is ‘weak’

MEA- very strong; looking for continuation thru Monday 2.79 high

CTDC – has doubled in two days; looking for more momentum to the upside today with an A-B-A2 preferably through 3.80, but ignore this if the stock is trading lower

SQNM- up huge yesterday; looking for buy thru 23.56 Monday high

ACAS- up strongly yesterday; looking for more momentum thru 5.39 Monday high

LNC- broke out; looking for more momentum thru 22 Monday high

WLL- very strong yesterday; looking for buy thru 43.30 Monday high

HPQ- on “Mad Money” last night

DOW- announced it is going to launch a lawsuit against Kuwait to restore its joint venture; also announced a series of capital preservation measures

OREX- received patent approval on its phase III product

Bad-The following stocks have bad news and/or a weak technical pattern

LDK- warned badly after-hours; should lead entire solar sector down, including STP, SOLF, FSLR, SPWRA

ENDP- acquiring IDEV; story described above

ELX- warned on earnings

IMN- warned on earnings

ICE- trounced yesterday; if it opens higher, looking for short thru unch..if it holds, A-B-A2 to upside…it wad downgraded this morning, however.

RCRC- very weak; looking for continuation short thru Mon’s low of 7

ALL- among other insurers downgraded

NUE- downgraded


Earnings:

TUES JAN 6 BEFORE

AYI

TUES JAN 6 AFTER

FINL GPN RECN

Good luck today.

http://www.epiphanytrading.com/

Erik R. Kolodny- Chief Markets Strategist of Epiphany Trading, LLC