The Kirk Report

Never Short A Dull Tape?

I thought the first hour was slow, but it seems as the day goes on, it just gets even more dull. They say you should never short a dull tape, but I'm not sure I've ever heard the saying that you always buy a dull tape instead.

In the end, I'm going to call it a day to take care of non-market related business. Once earnings season begins, it will be hard to get much else done, so like a lot of others, I'm going to take advantage of the calm before the earnings storm. As always, I hope you're trading well. See you tomorrow!

Another Good Day For Research

With a couple of my positions under pressure this morning, and very few ideal trading setups, the week is off to a very slow and miserable start. I'm not letting it get to me, however, as this environment has provided me with the opportunity to get some important homework done ahead of earnings.

For the moment, a few buyers can be found in biotech, healthcare, drug, consumer staples & utilities while sellers are heavy in energy, homebuilding, chips, transports, telecom, & brokers. It seems like everyone is on hold until the reports start to roll in. I can't say I blame them much, because until we get a better idea how this earnings season is going to go, the best play is no play.

Find Your Edge

When trading, an important step on the road to success is to learn one thing really well. It doesn't matter what that one thing is, just that one thing will give you at least a slight edge against the next guy. Usually that edge is achieved either through research, experience, and/or skills that others do not possess.

In fact, that one thing may even be special insight to a particular industry, an unusual technical analysis pattern that offers a sense of predictability, or even a stock screen which produces consistently good investment candidates. The key is that you've got some special edge. And, no matter how much I desire to help you and will provide you with numerous clues to how I trade successfully, there are some things that I won't ever reveal and will never share with you. Like any successful trader, I fiercely protect my edge. You will do the same once you acquire your own.

No matter what level of a trader or investor you are, you will see benefits from focusing your energy toward the mastery of that one thing. For example, there are specific methods of stock selection (i.e. stock screens) that I've been working on developing for at least three years. While many times it may seem to be a fruitless and complete time wasting effort, I continue because I think I'm on the right track AND because I know from experience that doing so has paid off very well in the past. In addition, sometimes this path of learning exposes me to new ideas and strategies that help me trade better.

Those who don't do well in the market, tend to try to know everything and be an expert of nothing. If you're going to beat the majority, you have to do something to acquire that one thing that will provide you the edge to succeed. But, here is the bad news - doing so requires very hard work, patience, and absolute determination, all of which are in short supply. But, then again, success usually comes to those people who simply do things the losers won't. And, as I've told thousands of traders by email, there are no short cuts to success.

Random Thoughts & Readings

• It's a slow start out there as everyone prepares for the earnings avalanche. Stocks on my trading radar this morning include INTZ, NFLD, ATPL, CFCI, HYSL, SEPR, WGAT, MCRI, SHOE, EDGR, ENMD, CNTY, MUSE, APCS, CLCT, HITK, ASTE, & CIG


• Three men with three different strategies all lead investors to profit


• There is an increasing likelihood that the Pentagon will reduce U.S. troop levels in Iraq by the beginning of next year


• Pop goes the homebuilding bubble?


• According to the Stock Trader's Almanac, the Monday before expiration the Dow posted a gain in 8 of the last 9 years (2002 was the lone loser)


• Like to keep a track on what sectors are moving higher and lower? Here are Prophet.Net's sectors by rank


• How to clear your desk after tax season


• Big risk frequently blinds traders to the big picture, because it becomes an all-or-nothing situation. Small positions can be managed objectively and by the numbers. Keep in mind it's the numbers that will save your hide in the long run, not the big play


• Bill Sarubbi, editor of Cycles Research, sees a buying opportunity even though oil prices are headed to $80 per barrel


• Aaron Pressman joins the water investment bandwagon


• Elliott Spitzer's latest jihad has Seth Faler hoping that he will keep a sense of proportionality


• The next big thing? Hedge funds move into private biotechs


• Paul Volcker worries that "what can be left to later, usually is - and then, alas, it's too late."


• Making money when the market is wrong?


• You can't drive straight on a twisting lane


• IBM opens lid on its treasure chest


• Intense reactions make for significantly worse trading performance according to a MIT study


• This is already shaping up as the year of the unexpected


• Even a monkey can index the market?


• Last week's AAII sentiment survey may hint that better times are ahead. Since 1987, there have been a total of 73 weeks that showed a 4-week AAII bull ratio of 40% or below. Around sixty trading days later, the S&P was higher a little over 90% and posted an average return of +6.5%


• Jesse Livermore & his trading lessons


• Mandel & Siegel continue their debate on the technology sector


• Danielle DiMartino finds that it can be slow or quite crazy on two Chicago trading floors


• Google chiefs agree to work for $1


• US inflation forecast ticks up in Blue Chip survey


• Dr. Marc Faber finds no joy in Greenspan's wonderland


• Are FDA approvals of new drugs too fast?


• Drillers want more access to U.S. coasts


• Will the next version of Microsoft's Windows be worth the wait?


• The Oracle of Omaha's latest riddle


• A lot of caution these days isn't unhealthy


• Over the weekend I found myself rooting for both Chris DiMarco & Tiger Woods at the Masters. What other sport could you be in the position of rooting for both sides at the same time? You gotta love that!


• Costs of Medicare start to snowball


• Is Bernanke going to be the next Greenspan successor?


• Economics often a bundle of contradictions


• Steve Forbes asks Bush to put a specific, comprehensive proposal for the reform social security


• Across wealthy nations, pay has stagnated and job creation stalled at a time when corporate profits are soaring


• What's next in evening news? Stay tuned!


• Enjoy the little things, for one day you may look back and realize they were the big things


• Mercury retrograde ends tomorrow! Not that I pay much attention to these things!


• Honolulu in debt despite thriving economy


• 95% of the game is half mental, is just one of fifteen Yogisms


• AFM's 25 top investment tips


• With the help of Google, you don't have to leave your desk to go sightseeing


• "Choose a job you love and you'll never have to work a day in your life." - Confucius

Earnings Season Begins

Good morning. Premarket futures currently indicate a positive open this morning as oil prices fall for a six straight trading session. OPEC is on track to boost supplies to world markets by 500,000 barrels per day (bpd) next month to help build stockpiles ahead of an anticipated demand surge later this year. And, although we have some negative news from Ford Motor (F) and Circuit City (CC), there is hope in the air that not all earnings reports over the next couple of weeks will be all that bad.

As I wrote in this weekend's newsletter, what it all comes down to is the forward guidance that companies will be providing to the market over the short-term. Investors desperately want to hear that higher oil prices and inflation haven't created a major economic slowdown and the signs of a possible recession around the corner are still not present. If that happens, the market is positioned to rally. If it doesn't, expect more of the same as we've seen over the past few weeks.

My goal this week is to be much easier on myself, work consciously to be much less stressed than before, and to keep working on finding and taking advantage of opportunities as I see them. I hope you have a great day and a very good week.