How To Find Good Stocks In The First 15 Minutes

After yesterday’s
performance one had to wonder what all the chaos was for earlier in the week. 

It would appear now that the sun will in fact rise tomorrow despite the prospect
of higher rates.  Ahhh, the market, what a perverse entity.  However, you will
not get any complaints from me.  HVT and FX all provided ample opportunities
this week, compliments of Mr. Greenspan.

The S&P’s are now sitting comfortably back above
the 50-day EMA (1127).  This should keep the market happy for now and possibly
set the stage for a move towards critical resistance at 1161. 

Financial stocks were the ones that saw some
fantastic action yesterday, stocks like AIG,
COF and FDC
kept me and those in my

Trading Room
rather busy and shall we say,
very content.  I have received a few emails in recent weeks asking how come I am
not going into depth about what to trade in the day ahead.  Well the long and
short of it (no pun intended) is that the markets have changed so much in recent
months that it is no longer possible to focus exclusively on 1 or 2 stocks and
then share that collected knowledge with you in order to assist in spotting
trading opportunities.  The market has become so rotational, that I have been
forced to seek out the stocks that are moving once the markets open.  The
strategies for trading these stocks has not changed a bit, but now I need to go
find the stocks.  While this takes some getting used to, it is simply a fact
that trades must address.  The first 15 minutes of each session is usually spent
sizing up the stocks that are moving.  Which of them is likely to provide the
best movement etc.  I can tell you that with a good set of eyeballs on the
Most Actives and
Most Up/Down
you will be able to spot some good stocks.

^next^face=”Arial”>Forex/FX:

As I stated in an email yesterday afternoon, the
big moves have come and gone for the week in FX, all we can do now is trade in
the wake of those moves and wait again for some solid set-ups off the dailies. 
This is the wonderful thing about FX trading.  Not only does it dovetail in with
HVT (i.e. it does require one to be glued to the screen) the moves, when they
occur are quite trending.  In between you must focus of short-time frame set-ups
or, not trade at all. 

So what about the G7 meeting this weekend, any
possibilities there?  I suspect not.  Unlike the last two meetings where the
EUR
and JPY
took center stage there does not appear to be that same spin on any other
currency this time around.  However, one can never know.  I do not have any
positions going into the weekend, but will keep my ears open for comments that
come out of the meeting and will trade accordingly. 

Update on XLF:
 earlier this week I mentioned that this security (S&P
Financials) might offer a good trading opportunity as it appeared that the
financials were a bit washed out after higher interest rate fears made the
rounds.  Today the trade is back to roughly break-even.  The daily chart is
improving, technically that is, so I am going to hang on.  I will keep you
posted.

From the completely absurd department, read this
quote/news release from Bill Fleckenstein and the Bureau of Labor Statistics:

And, to illustrate how absurd
government statistics are, the BLS claimed that gasoline prices were down 2.8%
year-over-year in March (whereas gasoline at the NYMEX is up about 25% in the
last year). Anyone pulling up to the pump knows that gasoline hasn’t gone down
since March 20003.

Hmmm, someone is not telling the truth here. 
Last time I filled up here in So Cal, I paid $2.39 for the cheap stuff.  Unless
my math is incorrect, that is nearly 50-60 cents higher then last year, a 26%
increase.  But if the BLS tells me gas prices fell, well, who am I to complain.

I will be attending a hedge fund (I mean
“Alternative Investment Conference”) this weekend here in La Jolla, there are
some great speakers lined up.  I will share with you any interesting thoughts
and outlooks in my column on Monday.

As always, feel free to send me your comments and
questions.

Dave