Traders Corner   15 comments

The S&P 500’s technicals have a very different picture this morning, after yesterday’s drop. The weekly RSI is no longer overbought, the daily Williams %R is now oversold, and the McClellan Oscillator is nearing oversold (McClellan measures the NYSE, but there are many S&P 500 components from the NYSE). The futures are slightly down this morning, but the S&P 500 is already sitting near the bottom of the Bollinger Bands, which means a move down could be restrained somewhat. But that doesn’t mean we can’t drop, and I see the 50 day moving average at 1758 as the next major support level.

On the other hand, if we do get a bounce here, I see the 20 day moving average at 1796 as a strong resistance level, especially with weak sentiment going into next week’s Federal Reserve meeting.

Overall, I am playing it close to the vest here until I see the S&P 500 hitting a strong support or resistance level, and it holds. Then I will see what the technicals look like.

The S&P 500 levels to watch today:

UPSIDE: 1783 (December 5th’s low), 1787-1788 (2 data points), 1792 (December 5th’s high), 1794-1803 (5 data points and the 20 day moving average), 1806 (2 data points), 1808 (December 10th’s high), 1810-1811 (2 data points), and 1813 (November’s high and the all-time high and the top of the Bollinger Bands).
LAST CLOSE: 1782.
DOWNSIDE: 1779-1780 (2 data points), 1778 (bottom of the Bollinger Bands), 1775 (October’s high), and 1758 (50 day moving average).

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15 responses to “Traders Corner

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  1. I made a quarter sold spxu. Will not trade till after fed next week. I’d expect 1795 soon, but I think the trend is down.

  2. Not sure if this is a good idea or not, double down on GTAT at 7.90.

    • Lynn – you know my view. Over next 2+ years this is a $13 stock. That being said, it has been on the elevator down past 6 days.

    • Lynn, if it doesn’t hold above $8 this week, I will be looking for it to go to about $6.5 or so for the next major resistance. I’m holding my $12.5 calls waiting for a turn at which point I will close them out. I will probably double my position at the time that I close the calls and wait to sell more calls once the pricing looks favorable. The price on the calls has been holding relatively well given the downturn so people still have faith in this stock turning around.

    • Thanks guys for your suggestions. Like Marshall, long term hold. Hopefully this elevator knows how to go up instead of going down all the time.

  3. I added a small position of SPXU at $17.05. It looks like we are headed down to the 50 day MA.

  4. Ed, the hard part with technical analysis is trying to interpret what they are telling you. The main thing I look for is how is the price action responding to the movement in the technical indicator I use. While the market was moving down over the recent 5 day period the indicators were gaining momentum. We had a nice one day bounce but a very weak technical response. The next day was a nothing day and then we started down again. In looking at the long term weekly charts of the SPY I see a strong overbought picture. I would expect that we are in for at least another 3to5% pullback or possibly more. You should expect to see bounces. I’ll be watching to see if there is any technical strength behind those moves.

  5. Did a couple things this am. While I fully intended to continue to hold my SAND no matter what, I just plain got sick of watching it fall, every, single, day. Sold all of it for 4.03 for a 48% loss. Painful but I am very happy I will not have to watch if fall anymore.

    Also GTAT hit my target of 7.90 so I picked up a half position and will add if it goes lower. I’m also going to look at an options strategy using GTAT that Trader suggested a few days ago.

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