Pre Market - July 20th 2007

The futures are down in the US markets this morning. And most of that in my view is on the bad news from Google last night(we also have options expiration today so that adds extra volatility). We also have Caterpillar (CAT) adding to the negative view this morning as they reported earnings this morning and they missed expectations by a fairly large margin.

I think Google sent their shareholders a wake up call. People have been buying up Google thinking they were infallible. But last night Google revealed that they are not so perfect as everyone (including analysts) have been touting. Google has been damaged and it will be a while before it trades back at the levels it was at. I see Apple doing the same thing. Everyone thinks Apple is perfect and they can never do any wrong. But one day Apple will have their own wake up call. It may come next week as Apple will release their earnings.

Earlier I had to sell BVF on news of a FDA letter telling the company that they were not going to approve one of their drugs. BVF has settled at support around $21.50 and already I am seeing some buying come back in as speculators are speculating that BVF will resolve the FDA issue and the drug will eventually be approved. But as swing traders we don't want to wait for something that may never happen. We take our money out and move on. BVF was a loss but that is why we divide our capital up into pieces and only expose one piece to a trade. The goal is to always protect the total capital. A loss in one piece is made up in the gains of the other pieces. It's all about having more winners than losers.

RebelTrader swing trade Western Digital (WDC) is trading up in pre market on upgrades and good earnings from SeaGate last night.