Friday was the second day in a row the S&P 500 finished below the Bollinger Bands. It also finished below the 50 day moving average, which is a bad sign.
On a more bullish note, the McClellan Oscillator finished Friday at -80. But is it bullish enough? I personally prefer a reading closer to -100. The Williams %R is still oversold too, at -94. While I am not convinced we are oversold enough for a bounce, another negative day or two could convince me. However, since the S&P 500 is already below the Bollinger Bands, that could put a limit to any downside moves.
The S&P 500 levels to watch today:
UPSIDE: 1657 (50 day moving average), 1658 (August 15th’s low), 1663 (August 16th’s high), 1664 (bottom of the Bollinger Bands), 1679 (August 15th’s high), 1682-1684 (4 data points), 1686 (August 9th’s low), 1688-1693 (12 data points and the 20 day moving average), 1695-1696 (3 data points), 1698-1700 (2 data points and July’s high), 1703 (August 5th’s low), 1705 (August 6th’s high), 1707 (August 1st’s high), 1709 (2 data points and the all-time high), and 1715 (top of the Bollinger Bands).
LAST CLOSE: 1655.
DOWNSIDE: 1654 (June’s high), 1652 (August 16th’s low), 1604 (July’s low), 1597 (April’s high), 1581 (May’s low), 1572 (March’s high), 1560 (June’s low), and 1549 (200 day moving average).
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Ed's Talking Stock 
Don’t expect it to last through the close of the market but all five of my Apple buys are now in the green. The first and highest price buy, $512.19 was made on 12/14/12 or eight months ago. I have a limit sell on these shares set at $542.00. If these shares sell, my average price per share will fall from its current $486.81 to $480.36. My current average share price generates a dividend yield of 2.51%.
Reviewing my 401K holdings. What is everyone or anyone’s though on the following three stocks which I own:
Breitborn Energy Partners (BBEP) — Marshall bought/owns and up 10% with a dividend yield of 10%
Vector Group (VGR) down 5% with a dividend yield of 9.5%
Banco Santander (SAN) down about 12% with a dividend yield of 10.6%
I am not taping into this 401K for at least several more years and maybe not until I turn 70 in another 8 years. I don’t have to sell. As long as the yield stays where they are my thoughts are sit on these stocks until the two losers get back to green and then maybe sell. Or does someone see the potential of the bottom falling out from underneath these stocks.
Latetom,
BBEP is a nice one (not perfect, but nice financially). For the dividend, it’s hard to argue with it.
VGR is a worry, with a heavy debt load (672%) and a large dividend payout ratio (302%). While they do have positive levered free cash flow ($46 million), will it be enough? Unless you think the company can turn itself around, I’d look for the first opportunity to sell.
SAN looks cheap at the current price. I’d hold it, but keep an eye on Chile’s political situation.
Thanks Ed. I agree with you on VGR and put a limit sell price on it last week for my purchase price. If I can get out for my purchase price I will still have better than a 9% gain due to the dividend (which beats a government bond).
Bought TZA this morning at 26.96. Sold Friday 27.50 calls for .50 reducing my basis to 26.46. If called out, plus 1.04 3.9%
Looking at the daily chart of AGQ, it appears we may move flat for a while. Starting around mid June, silver was in a period of accumulation. My guess is we are in accumulation again. Unless we start to see larger drops, it looks like it’s going higher. I’ll look to add more it we see another move up supported by strong technicals. Silver continues to look stronger than gold, although I would expect them to move in the same direction.
I like the potential for a pop tomorrow. I will add UPRO before the end of today if the market’s numbers remain down, and especially the NYSE advances/declines (this is the basis for the McClellan Oscillator), which are currently at 21%/77%. I have a limit buy order for UPRO at $68.00, but I will adjust as we get closer to the close. The only risk here is if the markets pop at the end today, in which case my order won’t process (unless it drops and pops, which is always possible, but it would still have to be a significant pop, in which case I could sell it today).
I added UPRO at $68.01.
Ed, You could be a little early on upro but the battle of the bulls bears should push us back to the 1670 area. I’m still short my spxu bought on fri @ 22.07. I most likely will not trade upro this fall, I’m finding I like the use of monthly chart. With that being said I’m short till we get back to 200 ma.
I see GNW closed down to about $11.99 for the day – about 15% off their high in mid July. Ed, I know you like this company and got in at $9.37. Any thoughts about what $ would be a good point for new money to jump in?
For value, GNW is still a good price. Anything at $12 or less should be good from a technical perspective. However, I would buy small to start here, as the overall market may drag it down some more. Be ready to double your position later.