Before the Open (Jun 11)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mixed. Japan and Indonesia did well; India lagged. Europe is currently mostly down. Greece is down 2.7% followed by Germany, Spain, Italy and Austria which are down more than 1%. France, London and Norway are also down noticeably. Futures here in the States point towards a relatively big gap down open for the cash market.

The dollar is down. Oil is up, copper down. Gold and silver are up.
The market traded quietly yesterday. The range was small, and the energy level was low. This is what I posted during the day yesterday and again after the close. It’s worth driving home.
Trading right now is a little tougher than it’s been the last two weeks. The market is stalling, so we’re all pressed with management questions.
Do you sell and wait for a pullback?
Do you assume an uptrend has begun and therefore loose stops that give positions room should be employed?
You certainly don’t want to give decent profits back. Letting a 15% profit turning into a 5% profit sucks.
But you also don’t want to take a quick profit if we’re in the beginning stages of a rally. Taking a 10% profit when you could have made 30% had you held sucks too.
What to do?
There is no definite right answer. You gotta do what your style dictates.
If you’re a shorter term trade who doesn’t typically hold for more than a week or two, you can’t let a stock move against you much because sitting and waiting for it to recover would require you to hold much longer than you’d like. Yes you will miss some upside from time to time, but your draw downs will be minimal.
If you’re a longer term trade who wishes to hold for several weeks or a couple months, then yes you can give positions time and space to move around. You’ll occasionally give profits back in return for maintaining exposure and nailing bigger moves.
Overall there’s no right or wrong answer, but there is definitely a right or wrong answer for you. This is why you journal all your trades. Your style isn’t just a random guess, it’s based on the results of many trades. Every mistake made and missed opportunity nudges you in a direction, and after many months of trades, probably 1-2 years, you find yourself managing trades based on what you’re comfortable doing and what your results have been. Jesse Livermore said: “the game taught me the game.” This is what he was talking about. Your trades are your best teacher.
Stock headlines from barchart.com…
B. Riley kept its ‘Sell’ rating on Radio Shack (RSH -10.39%) and cut its price target on the stock to $0, saying a turnaround at RadioShack is unlikely given its balance sheet and limited cost cutting opportunities.
Stryker (SYK -0.47%) was upgraded to ‘Buy’ from ‘Hold’ at Argus.
Marvell (MRVL -0.07%) was upgraded to ‘Buy’ from ‘Neutral’ at Nomura.
Reynolds American (RAI -0.29%) was upgraded to ‘Buy’ from ‘Neutral’ at BofA/Merrill with a price target of $65.
Molson Coors (TAP +5.36%) was upgraded to ‘Buy’ from ‘Underperform’ at BofA/Merrill with a price target of $80.
Tiger Global Investments reported an 8% passive stake in Restoration Hardware (RH -0.94%) .
Covidien (COV -0.21%) announced U.S. FDA approval of its Apollo Onyx delivery micro catheter; the first detachable tip micro catheter available in the U.S.
Third Avenue reported a 16.36% passive stake in Spanish Broadcasting (SBSA +1.71%) .
Baker Bros. Advisors reported a 10.8% passive stake in Avanir (AVNR +2.43%) .
Sooner Holdings reported a 8.3% passive stake in Renewable Energy (REGI -0.38%) .
Ulta Salon (ULTA -0.12%) rose over 5% in after-hours trading after it reported Q1 EPS of 77 cents, better than consensus of 74 cents.
United Natural Foods (UNFI -0.85%) reported Q3 EPS of 73 cents, right on consensus.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:00 MBA Mortgage Applications
10:00 Quarterly Services Report
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Bond Auction
2:00 PM Treasury Budget
Notable earnings before today’s open: HRB, MDCI
Notable earnings after today’s close: DDC, RH, SIGM
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers