I made money on this stock yesterday — and I’m trading it again today

During the last 2 hours of the market, a stock came up on the news reader that
made my day. Boston Scientific Corporation
(
BSX |
Quote |
Chart |
News |
PowerRating) announced lower
revenue and earnings expectations during a presentation at the Thomas Weisel
Partners Healthcare Conference in Boston. Of course I was just sitting around
waiting for this presentation. I am joking of course, frankly I had no idea such
a thing was occurring. Let me give you a little background on what I do know
that occurs.

One of the tools I use for my hyperactive style of trading is the news. I try to
stay aware of events that affect the stock markets and the individual stocks
that make up the market. These types of news events are the news stories that we
are all aware of.

There is another layer of news that is stock-specific and can be expected to
have a significant impact on a stock’s price as the news is disseminated. This
type of news requires a special service providing speed and accuracy. I want to
be in my positions as the news is disseminated via traditional news services and
exiting into the “late arrivals” so to speak. A good example of this was last
Wednesday’s August 31, 2005) news on General Motors
(
GM |
Quote |
Chart |
News |
PowerRating).

The service I utilize provides an audio feed. The service provided the
information that Kirk Kerkorian was purchasing additional shares of General
Motors to increase his stake in the company. In my opinion, this was news that
would cause the price of the stock to rise. I had about 15 to 20 seconds to
react before this news would be more widely disseminated on text based wire
services. The text based services would provide the first wave of buyers after
my audio alerts. The later buyers would come from other news sources such as
CNBC.

In the world of hyperactive trading, I am only looking for the short-term trade.
The effect that this news would have on the stock over the next several days is
not part of my thinking. I leave that analysis and trading to the many other
market commentators and traders with a longer time perspective.

Now with BSX, the news reader mentioned lower earnings and revenues and BSX. I
immediately put out a short order to every market. Even our news reader was
probably 10 to 15 seconds behind the alerts sent out by the conference attendees
to their trading desks. The stock had already started to freefall, but I was
able to get to get a short position at 25.80. This began a series of profitable
trades as the range over the next 2 hours widened to 2 points. This is/was a
$26.00 stock, so the range was almost 8 %.

The best trades came as the stock broke through support levels. The first
support was at 25.60. The break down was almost a point on a 15 minute bar with
a low of 24.64. There were bounces that allowed for short sales as short term
scalping. But again the best moves came when the stock broke support. I kept a
position short at all times waiting for this break. I might cover a part of this
position, but would short again a like amount when the opportunity presented
itself. I was again rewarded with another break through the prior low of 24.64
to a low of 24.25. I started to cover there and was completely flat at 24.50. I
then shorted again on the small rallies, looking for the break of 24.50. The
final break came in the last 15 minutes of the trading day with a sell off to
the 24 area where I covered my last shorts.

This last series of trades in BSX turned a dull day into an exciting and
profitable one.

It was so slow that I prepared this picture of the NYSE open book showing the
bids and offers in ABS earlier in the day. I have had several emails about the
open book, so I decided a picture was worth a thousand words.

You can see the supporting bid at 23.00 a share, this is the area I am watching
for a break.