Traders Corner   14 comments

The S&P 500’s Bollinger Bands moved sideways yesterday, meaning they are ready to break open. Fortunately, or unfortunately depending on your perspective, we know which direction we are heading, and that will be down. Futures are solidly down this morning, and the S&P 500 broke below the 20 day moving average support yesterday. Next stop: the 50 day moving average, at 1812. If we close below that in the next few days, look out below! The next stop after that is the 200 day moving average, all the way down to 1700, which is a 7% drop from yesterday’s close. Stock up on antacids and SPXU…

The S&P 500 levels to watch today:

UPSIDE: 1835 (January 17th’s low), 1837-1840 (7 data points and the 20 day moving average), 1843-1847 (7 data points), 1849-1850 (January 21st’s high, December’s high and the all-time high), and 1852 (top of the Bollinger Bands).
LAST CLOSE: 1828, inside the 1827-1832 (7 data points) range.
DOWNSIDE: 1823 (January 6th’s low and the bottom of the Bollinger Bands), 1820-1821 (2 data points), 1815 (January 13th’s low), 1812 (50 day moving average), and 1700 (200 day moving average).

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14 responses to “Traders Corner

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  1. FYI: SPXU has a 1:4 reverse split today. Ergo, the position I bought yesterday would have been bought at $62.24 in today’s value, although I only have 1/4 the shares I had yesterday.

    • I will sell my SPXU at $63.55 today. If it doesn’t reach that, I will decide what to do with it later today.

    • Ed, wondering why you were so quick to sell since this was a small position and you believe the market is heading lower?

      • Trader,
        The key is the S&P has to finish below the 50 day MA, which is looking more likely. It could have easily just bounced there, which it did for awhile.

        I’m going to wait and see what the S&P does the rest of today, and if it looks like it will finish below the 50 day MA, then I can buy back some SPXU. While it will be at a higher price, the next firm support I see is at the 200 day MA, which the S&P has plenty of room to reach.

        There is another factor too, and that is the “dead cat bounce” factor. If the S&P drops too far, too fast, we could get a one-day bounce, which could make for an even better entry point into SPXU. So I need to watch the technicals to make sure they don’t get too oversold, or else buying SPXU now would be too early.

  2. Took some gains on half my GTAT and all my XBI

    • Jeff – regarding your sale of GTAT. I see where Tim Cook is going to be on ABC tonight and they are asking him specifically about the role of sapphire with AAPL products. Could really increase awareness in GTAT. May be the reason the stock held up well in today’s sell off.

  3. ANGI again at 16.65.

  4. More PRAN at 9.00

    • Sold Feb 9 calls for 1.85. If called profit will be 1.85 20.6%. Can’t resist these huge premiums. I just hope it doesn’t tank before the expiration date. If it starts to drop I can buy back the options and sell the stock. If it does a PVCT, I may not be able to get out fast enough. Keeping my fingers crossed.

  5. I added a large position of SPXU at $65.25. FOMC next week looks like the only thing that will stop this bear train to 1700. If we close at the present level, the S&P 500 P&F chart will be showing a high pole warning, yet another bearish signal. The daily Williams %R is showing oversold for the first time, but that can last for quite awhile unless it gets a confirming technical, and it doesn’t have that yet.

  6. Liquidated some additional winners early today including swc gtat fgl xbi. ALso reduced some of my long funds so I’m about 30% cash now.

  7. I’m not planning on reducing positions any further until possibly after the FOMC

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