Traders Corner   15 comments

Contrary to Media reports, I would call yesterday’s rally more technical than news-driven. But today is a new day…

S&P 500 futures are showing some strength this morning, with the September futures (currently at 1590) actually pointing above yesterday’s close. Is this a turnaround, or a market head fake? The technicals aren’t showing me anything definitive, so either possibility seems open. The P&F chart still has a bearish price target of 1480, although that could change if we see a longer term move upwards. The Williams %R and the McClellan Oscillator both moved out of oversold territory with yesterday’s bounce. With the S&P 500 finishing above the bottom of the Bollinger Bands (at 1578), either direction remains a possibility.

My magic 8-ball says “Reply hazy, ask again later”…

The S&P 500 levels to watch today:

UPSIDE: 1593 (June 25th’s high), 1597-1599 (3 data points, including April’s high), 1607-1608 (2 data points), 1610 (June 12th’s low), 1613 (10 day moving average), 1618 (50 day moving average), 1622-1625 (7 data points and the 20 day moving average), 1628-1630 (3 data points), 1637 (June 12th’s high), 1639-1640 (5 data points), 1644 (June 7th’s high), 1646 (2 data points), 1648 (June 10th’s high), 1652 (June 19th’s high), 1654 (June 18th’s high), 1669 (top of the Bollinger Bands), and 1687 (May’s high and the all-time high).
LAST CLOSE: 1588 (June 24th’s high).
DOWNSIDE: 1584 (June 20th’s low), 1581 (May’s low), 1578 (bottom of the Bollinger Bands), 1577 (2 data points), 1572 (March’s high), 1560 (June 24th’s low), 1536 (April’s low), 1530 (February’s high), 1509 (January’s high), and 1507 (200 day moving average).


Posted June 26, 2013 by edmcgon in Daytrading, Investing, Market Analysis

15 responses to “Traders Corner

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  1. This morning’s disappointing 1Q GDP report (lowered to 1.8%) muddies the picture even more. Obviously, the economy is weaker than expected, but is it weak enough for the Fed to continue QE?

  2. I tripled my SPXU at $24.74, lowering my dollar cost average to $24.83. I will sell it at $25.10, or later today regardless.

    • In case you are wondering, I read this morning’s pop as a HUGE overreaction to the GDP report. The “amateur hour” investors are looking at the disappointing GDP report as a reason to continue QE. Unfortunately, that report was for the 1st quarter, so it is backward-looking data. The Fed is already past that number. My prediction is saner trading heads will sell-off into the pop, and probably bring the market lower today. How much lower remains to be seen.

      • The markets are so unpredictable. I know Trader Mike/Katie and Seattle try to give directional guidance, but at times it seems totally random. After a terrible Monday, which was actually much better in second half of day, I have had a very solid Tuesday and Wedesday. I am up over a percent today and am beating the indices for second straight day. Howver, I still have some catching up to do as I am up just shy of 10% this year and trail the Russell 3000 by 330 basis points. Of the eight purchases I made during this mini correction, only three are in the black (TCRD, HIG-WT and CIM). The other five (TGONF, ACAS, KLIC, FCX and INTC) are in the red. Of course I sold NEM and ABR, which in composite have dropped since I sold. I have buy orders (at puke prices) in on LYB, MRK, PNC, STO, TGONF, KKR and NSC). I really want PNC, I do not own any banks right now and I think their exposure to Pennsylvannia will be good. I also am very interested in NSC as I think railroads have such a competitive advantage in fuel savings and a near monopoly in that you really can not build any new ones.

      • Just work on probabilities -Sometimes they work and sometimes they don’t. We both have different assumptions as to how this ends- me I think there will be dues to pay- sometime. I play with very little of my net worth. I try to predict ?? where bounces will be and trends- that is all- I do not think we are finished with downside for summer. Especially gold and silver.

      • Marshall, I agree on the rail lines. I don’t know jack about investing in them, but solid moat and it will only get tougher to compete with them by trucking. For a clarification, I don’t try to give directional guidance. I have my thoughts as to which direction the market will tend to go and occasionally by buying/selling calls/puts make bets on market direction. Usually these bets are on the market being unpredictable and offering up a big enough move to make the bet pay off. In the case of SPXU, with its leverage and inherent volatility, it doesn’t take much of a drop (say 1%) in the S&P for the calls to pay off. In essence, I could care less if the bull is still running strong as long as I get a solid down day. The rest of my trades typically just play the ranges whether they are stocks or options. Most stocks abide by my modified newtonian law of stocks, a stock in a range will stay within its range until acted upon by an outside force. For some stocks outside forces are few and far between. GLW, INTC, and CSCO were stocks that I did really well on over the last few years. BTU was fine until acted upon by an outside force (I now have the image of Obama in robes using “the force” to attack coal). I’ve never trusted market direction as I could never read it confidently enough to put my money there after being burned. May be more than you wanted to know but with the amount that I post, it is probably good that people understand the basic rationale for how I look at the market.

      • Marshall, unless you are a short term trader the day to day up and down moves of the market don’t mean much. For an investor, you want to be on the right side of the longer term trend. I try to help by sharing what I see from a technical perspective. Sometimes right and sometimes not so much. In determing trend I have learned to pay more attention to the weekly charts. I’ve been fooled too many times by the daily. Using the SPY, the weekly chart looks weak. I would expect more downside. The market will move up and down within a trend. I certainly don’t know for sure that we will continue down. I just wouldn’t let a couple of up days signal the all clear. I did add to SPXU this morning.

  3. Picked up some Telus shares this morning. “telecoms stocks dropped after reports that big U.S. player Verizon Communications Inc (>> Verizon Communications Inc.) is looking to enter the Canadian market” There is no way that CRTC would approve of the buyout of Mobilicity and Wind Mobile.

  4. Ed,

    Back to the industrials I brought up yesterday. I think you stated that FLS had a 3.1% yield. I see that they have a 1.1% yield. Would that change your opinion on FLS or DOV?

    • Sam,
      You’re right. I thought FLS hadn’t split yet.

      In that case, I would lean towards DOV, but it is still close either way. I still prefer DE over both of them.

  5. To be clear, not being critical of anyone in my comments. Just reflecting how on this board and from many talking heads on TV, it was gloom and doom on Monday. Now I hear the cry again to buy on the dips. I try to shut it out and just stay with my general plan. The most clear thing to me is not to get emotional and make panicked decisions. Also not to go too far in any one direction, as the markets in short term are very unpredictable IMHO.

    • So maybe I should not talk about those S and R points. I know you stated a couple weeks ago you wished you had not listen to me about silver. Market is a very large vehicle and it turns very slowly. Predict every move no way. Idea is to be right enough to make up for wrong moves.

      • Mike – funny thing it was good I listened to you about silver. Short term I should have stayed with SLW, but glad I exited. The real lesson to me is that I need to stick with approaches I am familiar with. That may not be true of every one on this board, as many may want to earn and replicate a covered call approach. But this is real money for me and I will be happy as a clam if I can just beat the market by a couple points.

    • “I try to shut it out and just stay with my general plan. The most clear thing to me is not to get emotional and make panicked decisions.” You’re spot on Marshall. Regardless of how you play the game, those words are the key to success. I didn’t take what you said as being critical. Just think it is a good reminder from time to time to refresh on how I see the game. Hopefully it helps other see my prejudices with regard to my viewpoint of the market and the trades I make.

  6. Sold SPXU at the end of today for a loss of 0.72%. The dip didn’t last as long as I expected.

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