Traders Corner   20 comments

All of my technicals are fully on board today for a pullback:

1. The McClellan Oscillator is the most overbought I have seen it in quite awhile, at 86.
2. Williams %R remains overbought at -4.
3. RSI entered overbought territory at 72.
4. The S&P 500 closed above the top of the Bollinger Bands (1717).

Of course, the futures are up this morning, since they have to play catch-up to the large pop we got yesterday. Don’t be surprised if we see a large pop at the open today. Ultimately, I think the best the bulls can hope for today will be a sideways move. The McClellan Oscillator won’t remain overbought after today, which means about half (or more) of the NYSE has to decline by the end of the day.

The S&P 500 levels to watch today:

UPSIDE: 1729 (September 18th’s high and the all-time high).
LAST CLOSE: 1725.
DOWNSIDE: 1717 (top of the Bollinger Bands), 1709 (August’s high), 1704-1705 (2 data points), 1700 (September 18th’s low), 1697-1698 (September 17th’s low and July’s high), 1691 (September 16th’s low), 1687-1689 (3 data points and May’s high), 1684 (September 10th’s high), 1681-1682 (2 data points), 1678 (September 11th’s low), 1676 (50 day moving average), 1675 (September 10th’s low), 1672 (September 9th’s high), 1665 (20 day moving average), 1664 (September 6th’s high), 1659 (September 5th’s high), 1651-1656 (4 data points and June’s high), 1640 (September 6th’s low), 1637 (September 4th’s low), 1633 (September 3rd’s low), 1627 (August’s low), 1613 (bottom of the Bollinger Bands), 1604 (July’s low), 1597 (April’s high), 1581 (May’s low), and 1579 (200 day moving average).

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Posted September 19, 2013 by edmcgon in Daytrading, Investing, Market Analysis

20 responses to “Traders Corner

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  1. GTAT got upgraded by UBS this morning. They are up another 8% in early trading. I think they are getting pretty fully valued, but I really want to wait until March to avoid short term capital gains on a stock up 150%.

  2. There’s a LOT of pre-market trading this morning. All but 4 of the stocks on my watchlist have had at least one pre-market trade this morning, which is unusual. Most of the ones with pre-market trades are up.

  3. Ed, sorry to rain on your parade. First, the markets do not have to follow your technicals. If it was as easy as reading a number then everyone would do it and of course it wouldn’t work. Second, you are missing a key point in using technical indicators. You have to watch how the price is moving in relation to the indicators. The technicals I use are flashing overbought; however, the price action is still strong. There will be a safer time to short when technicals start to move lower with a corresponding move in price.

    • Admittedly, I did jump in too soon. In hindsight, I was anticipating the technicals a little too much. In the future, I will wait until they “happen” before jumping in.

  4. I just increased my holdings in RIG by 20% (46.12). This stock still has the overhang of the Deepwater Oil spill, but has a 4.8% dividend and by my metrics is quite cheap.

  5. I sold half of SPXU at $19.36. That’s a 0.52% increase today, although a 1.27% loss overall. As I stated earlier, I jumped into this one too early.

    I will sell the rest of it before the end of today.

  6. NNVCD is falling. Would you guys be buyers here??

    • My interpretation is that something is up with this stock right now. Wild swings like that are not normal. NNVCD has been pretty erratic the last week. Understandable a lot of news and events have happened, but just doesnt look right. Does not make it true though.

    • Under $4.70, I’d consider buying more. It was running far too high before. Over $6? Really? That was nuts!

  7. Why is NUGT down today and gold is up $66. Is now a good time to pick up some? 🙂

  8. I sold the last of my SPXU at $19.36, again for an overall loss of 1.27% (but an increase of 0.52% today). I’ll play the technicals for a day or two, but that is all, especially in the face of the first rule of the markets: “Don’t fight the Fed”. And SPXU’s time is up, for now.

    • Indeed Ed, buying a leveraged play just before a serious announcement -or even a regular one- at FOMC, is nothing more than gambling – even if technicals say otherwise. If you do want to gamble/play at such a moment, a play like I did is much safer: buy both out-of-the-money put and call and if there is a rather large movement, you make a nice profit. Downside is very limited, because both are out-of-the-money and you have both sides of the play.

      • plas,
        I’ve never felt comfortable with options. Maybe some day I might take a shot at them, but it would be gambling for me to try them now.

        In my defense, who knew the Fed was going to do nothing? While I read a few suggestions that the Fed should do nothing, they were just suggestions, not rumors. However, that said, daytrading into the face of the FOMC is gambling, like you said. In the future, I will keep that in mind.

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