Traders Corner   25 comments

Since Monday’s S&P 500 low of 1560, we have seen a 60 point move to yesterday’s high of 1620, which is a 3.8% increase. Pretty nice for one week, but it is playing havoc on the technicals. The McClellan Oscillator has gone from oversold to approaching overbought at 21 (if it closes at or above 60 today, then it is overbought). It isn’t a concern for today, but we could see some profit-taking early next week if this continues.

Speaking of 1620, that sticks out like a sore thumb as resistance, with both the 50 and 20 day moving averages sitting there, especially considering it was where the S&P 500 couldn’t break yesterday. Even if the S&P breaks through that today, it will have to get past 1625, and the 10 week moving average, before I would call this a resumption of this year’s bull market. Considering we have opened above the previous day’s close for three days in a row, the bull market case is looking stronger.

But there is still a bearish case to be made. Even though the S&P 500 futures are up slightly this morning, the September futures are still pointing below yesterday’s close (1611 versus 1613). In addition, it is summer, which isn’t typically the season for big bull moves. After we get the final window dressing on the 2nd quarter today, a sell-off could be in the cards for next week.

For the record, you have to go back to December 31st/January 2nd to see a month-end/month beginning where they both went in the same direction. Don’t expect Monday’s results to be the same as today.

The S&P 500 levels to watch today:

UPSIDE: 1620 (June 27th’s high and the 50 day moving average and the 20 day moving average), 1622-1625 (7 data points), 1628-1630 (3 data points), 1637 (June 12th’s high), 1639-1640 (6 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), and 1662 (top of the Bollinger Bands).
DOWNSIDE: 1610 (June 12th’s low and the 10 day moving average), 1606-1608 (4 data points), 1597-1599 (3 data points, including April’s high), 1592-1593 (2 data points), 1588 (June 24th’s high), 1584 (June 20th’s low), 1581 (May’s low), 1577 (2 data points and the bottom of the Bollinger Bands), 1572 (March’s high), 1560 (June 24th’s low), 1536 (April’s low), 1530 (February’s high), 1509 (January’s high and the 200 day moving average).


Posted June 28, 2013 by edmcgon in Daytrading, Investing, Market Analysis

25 responses to “Traders Corner

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  1. Lynn and Others – sorry about blackberry implosion. I did think they were turning the corner, but perhaps it was just hype. The smartphone market is getting insanely competitive. Everyone who sells in that space has seen sharp stock drops (BBRY, aapl, Samsung and Nokia). Margins are getting eroded and the high end of market is getting saturated and the marginal improvement is hitting law of diminishing returns.

    • To add to what Marshall said, it might be prudent to look at companies that will profit from the smartphone explosion, rather than the manufacturers. Suppliers like GLW and Android designer GOOG come to mind.

      On a related note, I am adding GLW to my watchlist. It looks like a good buy for value below $14, so a little dip would make it attractive.

  2. Yes brutal day for us bbry holders. Not sure what to do now, sell for a 35% loss or hold on?

    • Sorry Lynn. Turn around plays are always very high risk. Hope it wasn’t a big position.

    • I hate to say it, but it was 2 boatloads of it. ๐Ÿ˜ฆ I will sell them before the end of today.

      • I’m holding… for whatever that’s worth. Loss was smaller than LY (year was profitable), cash position increasing. disappointing for sure, I was hoping for a surprise quarter in the other direction, but I don’t think they are a bankruptcy risk

    • I gave up and sold all for 35% lost…. there is going to be more downgrade to come. The stock will tank some more. I am looking forward to this long weekend (Canada day), nice and sunny.

      • Lynn – that is tough. I could just never pull the trigger on BBRY (or NOK), but thought about it many times as the bar seemed low. It is interesting that a number of analysts such as socgen just upgraded based on channel checks. Makes you wonder how they could be so wrong. I have to believe that even in a close the doors scenario, they are worth at least 11 or 12 dollars. Enjoy the sunshine at least.

      • Hello Marshall, I was very bullish on the stocks based all the excellent reviews on all the carriers websites on these 2 new phones. And with all the upgrades lately, this disappointing earning came as a surprise. Lessons learn here, don’t listen to those analysts, their guesses are as good as mine.

  3. Hello all,
    Just discovered this unique blog recently.
    Like Lynn I have lost a bit on AAPL, bought at $530 – fortunately a very small position. Been holding thinking like a few others that it will recover in time. Probably time to sell? Or buy more because it is looking like a ‘buy’?
    Appreciate your thoughts. Thanks.

    • Welcome, I avoid individual stocks and trade strictly on technical indicators. Charts do not look good yet. Having said that, I wouldn’t sell here. It does have some support around the current price. Adding another small position would seem like a decent play and start to average down. I sure wouldn’t go all in. Good luck.

    • Welcome as well. I am an AAPL believer, probably a minority on this board. I think current price is a tremendous value. It is my largest position, so I am not aggressively adding more. But I may add more shares later this summer if still under 425.

    • EJ,
      I’m the “anti-Apple” person in the crowd. In summary, Apple’s innovative days died with Steve Jobs. The stock will not see another run-up like in previous years until Tim Cook is gone. And that is my opinion.

  4. Thank you everyone!

  5. Wow.. go NUGT! From the second lowest depth of hell to the third and rising!

  6. Here’s a post from Jeff Miller, one of my favorite sites. It talks about dividend stocks and covered calls which I thought was relevant since Trader is always talking about them(covered calls).

  7. Interesting week for me. I am up 2.4% on the week, but 5.4% the past four days (you can do the math regarding Monday). I did do some tax harvesting on Monday (NEM and ABR). Wile I did reinvest most of the money, it has been a poor move so far as ABR is up almost 5% and NEM is up as well. The offset is that my buys of TGONF, TCRD and HIG-WT during the last ten days of turmoil have been quite profitable. All-in-all pretty content with where my portfolio is today. I expect (barring high volatility) that I will likely only be making moves on the margins. I do want to add to STO (seems very chep under 21 dollars) and am looking to add to TGONF position. PGR is the obvious stock for me on the sell block. I bought them july6th last year and they are up 30% since then and appear fully valued to me. But I would like to wait and make my gain a long term gain. So I will probably just move the proceeds from the sale into STO and TGONF. Have a great weekend everyone.

    • I think I will just buy what you buy. You can do all the DD for me. ๐Ÿ™‚ My picks this year have been horrible.

    • Lynn, Sorry about your loss, let me pour you never mind here’s the bottle of wine. ๐Ÿ™‚

    • Then again, Lynn you got out of NGUT and I haven’t. The NUGT is costing me a lot — about a quart of Wild Turkey every night.

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