Traders Corner   8 comments

The S&P 500 seems to be having a hard time breaking through the 50 day moving average. It has tried over each of the last 3 days, only to fall back below it. It looks like the S&P will need some big news to push it over. On the other hand, the 1645-1646 range seems to be providing some solid support, with 3 of the last 4 trading days bottoming there. The exception? Wednesday’s low of 1639 came with the release of the FOMC meeting minutes. Because that was an exceptional circumstance, I am willing to overlook it.

One technical of note: The P&F chart showed a high pole warning 2 days ago. From Stockcharts.com:

The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future.

This is just a technical warning, not a guaranty. It should also be noted that the S&P 500’s P&F chart still has a bullish price target of 1970. However, and this is just my opinion, but I see it as an indicator that we may be range-bound for awhile, especially considering how we seem to have strong support and resistance levels. In addition, the Bollinger Bands have started to tighten up (although they are far from tight at the moment, with an 82-point difference between top and bottom).

Finally, the volume this week has been exceptionally light. Not once has the S&P 500 broken 3 billion shares. The last time that happened was the trading week of 12/24-12/28/2012. But this is normal for August: Last year, the S&P 500 had the same light volume during the week of 8/27-8/31. What makes it strange is that was the week before Labor Day weekend, and we are still a week away from that this year.

The S&P 500 levels to watch today:

UPSIDE: 1658-1659 (4 data points and the 50 day moving average), 1663 (August 16th’s high), 1679 (August 15th’s high), 1681 (20 day moving average), 1682-1684 (4 data points), 1686 (August 9th’s low), 1688-1693 (12 data points), 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 1722 (top of the Bollinger Bands).
LAST CLOSE: 1656 (August 21st’s high).
DOWNSIDE: 1654 (June’s high), 1652 (August 16th’s low), 1645-1646 (3 data points), 1640 (bottom of the Bollinger Bands), 1639 (August 21st’s low), 1604 (July’s low), 1597 (April’s high), 1581 (May’s low), 1572 (March’s high), 1560 (June’s low), and 1554 (200 day moving average).

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Posted August 23, 2013 by edmcgon in Daytrading, Investing, Market Analysis

8 responses to “Traders Corner

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  1. Marshall, I know you are looking at INTC. I have a half position and am looking to double. What buy price are you looking for?

    • Jeff – my INTC position is pretty sizable, it is my seventh largest. I have been adding incrementally in 2013 (June 21st at 24.22 and July 9th at 23.17). So I believe it is a bargin a current price, though I have not bought another slug. I typically will add to a mature position if the stock declines 5 to 10% from previous purchase and there s no material changes in story. So at around $22 I would probably think about increasing my share count by 15 to 20%. For me INTC is a core long term holding. I first bought in September 2010 at 18.91.

      • My current buy is at 24.35. I’m going to set a buy at 21.99 to double.

        I think Intel is set for a huge move in the next year and agree that its a great LT hold. 4+% DIVI doesn’t hurt

      • Marshall…is your INTC in a ROTH account or regular brokerage account?? If I buy anything, it can’t go in my ROTH since I’m retired.

        Thanks a bunch!
        STL

  2. what do you guys think about silver/gold at this point? I have some AGQ that I bought at $20.2. I plan to hold on to it for a while, but I will definitely appreciate each of your thoughts on it.

    • Ted,
      If you are going to hold a silver position for longer than a month, I’d go with SIVR unless you think it’s going parabolic at some point? I have heard a few theories on that, but I consider them as extreme views. However, I still think silver has some run left in it.

      As for gold, IAU is still the largest position in my IRA by far. However, I am thinking about reducing it a little after gold breaks $1400/ounce, and reducing it some more at $1470. I will maintain a core position after that just because I got it at such a good price.

  3. Looking at my portfolio today, GTAT continues to be the stock of the year for me. I am up 143% on them since buying on march 4th. I do not think I have ever had a stock in which I had a material position in go up that fast. I do worry that part of the rise is from momentum traders, who can jump off the train pretty quickly. But I really want to hold for a year as I am a tax adverse guy. If you assume solar is making a comeback and you assume they can break into gorilla glass space with their sapphire glass, the stock could certainly go up another 50%. But I am always wary of pricing in unproven things, I’d rather those be icing on the cake.

    Today my total portfolio is up 56 basis points and is now beating the Russell 3000 for the year by 5.2%.

    • nice work Marshall I’m actually several points below the Russell for the year right now but hey, there’s still 4 months left.

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