Stock Trade Team

Yesterday DNDN plunged from the 24-25 range all the way down to 7.50’s before being halted.  The Nasdaq isn’t giving much of an explanation other than the trades will stand.  I’ve read a bunch of message boards, blogs, articles, etc with a lot of people upset with what happened, but this isn’t anything new.  To investors it doesn’t seem to make a whole lot of sense how they could get stopped out of a trade that tanked hard only to see it recover in the after hours market.  There’s a ton of money at stake here in DNDN, with tons that were on the short side and now obviously tons on the long side.  Do some research on the FDA guy who made the decision 2 years ago to not approve Provenge after the advisory board gave their approval of it with flying colors.  Anyway, back to the present, if this drug gets approved this will be a blockbuster drug.  We’re talking like when asprin first came out, or claritin, heck even viagara type numbers.

So what happened yesterday?  This is my take on it so it’s speculation, but I think it’ll give you a pretty good idea of what really happened…  We all know big money moves the market, us small fish just have to be vigilant to catch the ride whether you take a fundamental or technical approach to the market.  Here’s a good way to think of it.  Have you ever seen shark documentaries that show sharks in the ocean that are followed closely by several fish or schools of fish?  Well that’s the same way you should look at the market.  The big money players are the “sharks” and us small money are the schools of fish following.  They go in for the attack and we can scrounge up leftovers.  Anyway, the big money yesterday alot of which was positioned on the short side but also on the long side probably dumped as much as they could to drop the price, at the same time had orders to buy as much as they could.  Remember the stock market’s prices are determined by open available shares to sell and to buy.  Those who put in stops had to understand that they put them in place to say if the price of the stock goes down then trigger my stop so I don’t lose more if it continues downward.  The “sharks” went ahead and sold down, and then covered as it was in the tanker.  For 2 minutes they were making the market.  Now it could have been a couple large holders or funds that collaborated in that.  Again speculation but it makes sense and to some degree follows the set up of the open market.  So is it illegal, you’ll have to get a good lawyer to figure that out, was it manipulation, for sure it was.  The thing that gets me though is that the Nasdaq didn’t seem to want to offer an explanation, just that the trades will stand.  Ok, hopefully that made sense   Anyway, needless to say DNDN should be on your watch list for sure.  The next phase is if it gets approved by the FDA.  We’ll have to see if there’s any timelines or if it gets fast tracked.  Speculators are ranging this one all over the place.  Saying it could be $35-50 very soon and some are even saying it could be a $100-$350 stock if it gets approved.  We’ll continue to monitor this one but be sure to keep an eye on it!

Futures way down this morning.  Fears of Swine Flu contributiing to the downside premarket action.  Seems kind of like an excuse to have the markets sell off a bit here, but we’ll keep an eye on things.  If you decide to dabble in the hysteria of it today GILD and NVAX may be the ones to trade because of their price and volume.  Alot of the other ones seem to be more risky in that they’re cheap pennies and can easily be manipulated.

What we’re watching today:

In addition to those we’re going to watch what HUM does.  We don’t have a lot of price points that we’re comfortable with just yet but we’ll have to see how things play out this morning.

DNDN as well ahead of tomorrow’s research conference.

Trade Smart!

TREASURY STRESS TEST ASSUMPTIONS: BANKS TO BE TOLD TO HOLD BUFFER FOR LOSSES THROUGH 2011 <related: XLF BAC C PNC STI BK JPM RF WFC > 4/24/2009 2:00:13 PM

Futures way lower this morning.  Isn’t that just like the MM’s to do that?  Our SPY and SDS positions went past our stop levels on Friday and now are gapping a good bit in the direction we would have wanted to ride it up.  Well, you do want to have stops in place though, especially if you’re set up is to daytrade it.  Anything could have happened over the weekend so not a big deal, just have to be ready for today’s action.  This is an exremely high/low gap in premarket action so make sure you’re watching direction before jumping in.  This does set things up for the SPY and SDS set ups on Friday so if you take them trade them cautiously.

What we’re watching today:

With the large gap down this morning things aren’t setting easy(granted in this market it’s never easy).  So here’s just a few we’re going to watch…

GS – trading down to 116.50’s here in premarket.  If it opens and starts to run a bit decent short entry may be in the 118’s and if it does end up breaking down today it may see the 112-113 area today.

DNDN- we should have just stuck to this one on Friday as it ran up 10% intraday.  This morning it gapped up on more positive data news.  This one continues to be a good buy the dips play with the pending news.  This one could go either way if it gets approved by the FDA.

Trade Smart!

Markets continued to run a bit to the upside today.  GOOG and GE both reported with decent earnings and GOOG even had large upside after hours action, but has since come back down to close to even on what it closed at.  Tomorrow is options expiration so we can expect to see another run in the morning then possibly quieting down in the afternoon as most positions will probably get close to being pinned in price.  It should be a very volatile session though.  We were looking at SPY and SDS and saw some key pivotal levels being tested even today.

On SPY we’re looking at around 87.10 or so as resistance so we’re leaning towards the short side unless the market gaps up for some reason above that.  Use that as a stop and if there’s enough downside we could see 83.50’s.

On SDS which is the ultrashort of the S&P 500 we’re looking at 65.75 area as a stop to going long.  This one would have more upside action at a target close to 72.50.

Of course we’ll have to see how the markets open tomorrow.  It’s options expiration and we’ll have to see how the street reacts to GOOG’s and GE’s earning reports.  We’ve seen the past where after hours it spiked then came back down, then in the morning it could be way up which could cause the market to open to the upside.

When we said a few weeks ago that SPY could see the 86-88 range we weren’t sure how realistic that could be but it hit 87.15 today which is just crazy!  A lot of traders we talk to can’t believe how high the market has come back to and are wondering how much higher can the street really bring it back up.  Goes to show what the big money in the market can do.  Alright this is overtime so we’ll see you in the morning!

Trade Smart!

Futures way up this morning.  JPM beat expectations and the markets continue to run higher!  Be cautious though, we actually think it’s a decent short below 34.50 with a fairly tight stop.  Just be careful don’t wanna step in front of a moving train!    GOOG reports today after the close so be careful in trading tech today.

What we’re watching:

JPM- with the recent rally and good earnings it might be time to ride some of the profit taking.

EBAY- they’re making interesting moves as of late, proposing to offer SKYPE in an IPO, and now the purcahse of GMKT.  Could see some volatility in it.

Also watching some of the indexes and ultrashorts.  It’s options expy tomorrow so expect more volatility today and tomorrow.

Trade Smart!

Futures mixed this morning.  The Government plans go reveal some data from their “stress test”  Hmm, will we see more of a rally with these results or will we see downside action from here?  SPY tested the 86 level not quite to the 88 level yet.  Things are starting to look bearish with all this negative news coming out, but just when it looks like it’s time to take the short side… if you decide to start building the short position just be careful with the stress test results.  I havn’t seen when they plan to let that info loose though.  Consider using a trailing stop like the 85 level, we’re seeing more downside in premarket it’s currently trading below 84.

What we’re watching today:

AAPL – with INTC’s earnings last night we’re watching the tech leader.  117 looks like a pivot, if it breaks down could see 115 today, if it pops 118+.

DNDN – this one could somewhat weather the storm of the overall market.  With data to be presented it looks like this one could be a fairly safe long play on dips for the next few days.

Markets not really showing too much direction so far so stay alert!

Trade Smart!

Futures slightly down this morning.  GS reported this morning claiming to have made a large profit, but still warns of the financial sector.  That 88 level is really close in the SPY.  We might start to see some downside action as the market has had a monster rally the past few weeks.  Alot of this upside action has to be caused by some short squeezing and then of course the short covering which propels the stock price even higher.  Those who have covered and have gotten on the long side are probably going to start scaling out and building their short side positions again.  It’s looking like we’re getting back to some pretty high levels and some selling looks poised to happen unless that reversal level around the 86-88 level breaks then we could continue even higher.

What we’re watching today:

DNDN- wow I just saw the pre market action this morning and it’s trading over$20 this morning.  This one closed at $7.30 yesterday!  The price action on this one is going to be very volatile but it could continue to see some upside today.

MS- if it stays below 26 we think it has some more downside to it.

Indexes of course.  OK have more to check out before the open.

Trade Smart!

Futures a litte lower this morning as things look a little uncertain.  Hope everyone had a great Easter weekend!  I was glad to hear that the captain of that hijacked ship was rescued!  What a relief!  That was very brave of that guy to sacrifice himself for his crew, pretty fitting that he was rescued yesterday!  Back to the old grind… Do we see continued strength in the markets or do we start to see some selling and profit taking.?  That remains to be seen.  Remember, it’s options expiration week so we could see more volatility throughout this week.  Also, some of the big banks report their earnings this week, which usually always leads to big market reaction.

What we’re watching:

YHOO- trading up in pre market on speculation of MSFT interest.  We may take a nibble at it today depending on what it does.

DNDN- Popped big in premarket as well, but these drug related stocks can move so fast just have to becareful with them.

Also the indexes and ultrashorts like SDS, FAZ, with the recent rally, there’s potential to catch some off the profit taking and fear selling.

Trade Smart!

It’s been a crazy morning and I didn’t have time to post.  Looks like the market wants to continue to rally.  86-88 level is what we called last week and it appears it’s still headed that way.  We were considering holding some positions over the weekend, but things are looking a little way overdone so we’ll just pick back up on Monday.  Everyone remember what this weekend is all about, not just easter eggs and bunnies!  Have a great extended weekend!