Wednesday, January 27, 2016

Wednesday's Agenda

I am staring this morning at eight stock symbols lying on my desk, each on the verge of being hit by an earnings announcement: They are, in descending volume order, FB, BABA, QCOM, CAT, ABT, BMY, MO and LVS.

I said on Monday that my goal was four or five new positions for the week. I've entered three so far, so if I'm true to my resolve, I have one or two left. I shall be merciless in weeding the eight down to a number that will allow me to achieve that goal.

Looking ahead, I have five potential earnings plays for Thursday and one for Friday. So it is in my interest to pick one entry today, keeping one in reserve for the last two days of the week.

Let's weed the garden.

Two of the symbols are pharmaceutical companies, a sector that has never been friendly to profits the way I trade. Perhaps it is because pharma is more dependent on regulatory news than other sectors are, making them impervious to my odds-based analysis. So out goes ABT and BMY.

BABA, although traded in New York, is mainly dependent upon China, whose stock market and economy are presently suffering through a crisis of confidence. It is a crisis that has prompted the government to intervene repeatedly to support the stock market. In this case, as in pharma, regulation is a poor environment for my trading system to thrive in. So, it's bye bye to BABA.

Of the five symbols remaining, MO and LVS have lower volume than the rest. They are in the two lowest quintiles of the list, so I shall summarily dismiss them on the theory that the more the liquidity, the better the trade.

And then there were three: FB, QCOM and CAT. I shall analyze them in that order with the aim of finding one trade. It's a sudden death contest, on the model of the Hunger Games. If FB wins, then I won't look at the others; if it loses, then QCOM will get a shot.

So, let the games begin.

-- Tim Bovee, Portland, Oregon, Jan. 27, 2016


Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.


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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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