Traders Corner   25 comments

Yesterday’s move up didn’t have the impact on the technicals which I expected, mainly because the volume was the lightest it has been since the first 2 weeks of January. The Williams %R is now overbought on both the daily and weekly charts, but the McClellan Oscillator didn’t budge even though NYSE advancers far outweighed the decliners. My purchase of SPXU yesterday was premature, to put it mildly. My bad.

The S&P 500 levels to watch today:

UPSIDE: 1830 (February 13th’s high), 1849-1850 (January’s high, December’s high and the all-time high), and 1863 (top of the Bollinger Bands).
DOWNSIDE: 1826 (February 12th’s high), 1823 (February 11th’s high), 1815 (February 12th’s low), 1810 (50 day moving average), 1809 (February 13th’s low), 1798-1800 (3 data points and the 20 day moving average), 1791 (February 10th’s low), 1784 (February 3rd’s high), 1777 (100 day moving average), 1774-1776 (2 data points and October’s high), 1770 (January’s low), 1767 (December’s low), 1758 (February 4th’s high), 1755 (February 5th’s high), 1752 (February 6th’s low), 1746 (November’s low), 1744 (150 day moving average), 1743 (February 4th’s low), 1737 (bottom of the Bollinger Bands), 1739 (February 3rd’s low), 1737 (February 5th’s low), 1729 (September’s high), and 1716 (200 day moving average).


Posted February 14, 2014 by edmcgon in Daytrading, Investing, Market Analysis, Technical Analysis

25 responses to “Traders Corner

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  1. Ed,

    BAM reported good earnings today, what is your take on the company? I like that they own real assets and they have the cash to scoop up deals in markets that are down. Ok dividend also, along with good long term returns.

    • ojunker,
      BAM is rock solid. Their good earnings report just solidifies that.

      Now for the bad news: The stock has been parabolic for a little over a week. While the good earnings should buy them another day or two of increases, they aren’t far from their 52 week high. I might wait a little while to see if the stock can come back down and test a new bottom. Even if you are looking at BAM as a long-term hold, I’d hold off for awhile. You missed their dividend for this month, so you have a few months until it pays again.

    • OJ

      Take a look at O. Similar to BAM but much higher divy and their properties have a occupancy rate above 98%. Triple net REIT with leases that allow rent increases to be passed along to renter.

  2. I sold the SPXU from yesterday at $61.25 in the pre-market for a small 0.33% profit. I’ll take the smaller profit since the technicals didn’t do what I expected.

  3. Ed,

    Farm related stocks have taken a hit as prices for corn and soybeans have plummeted and the forecast is that they will be down all year. Most ag related stocks have gone down but TWI has been strong over the last week. Could the fact that new farm equipment sales will be lower mean that farmers will be holding on to their equipment and thus having to replace the tires relate to TWI being stronger in the face of bad outlook?

    • ojunker,
      That’s a logical assumption. To use the auto industry as an example, parts manufacturers who supply both car manufacturers and retail tend to do just as well in down economies as they do in good economies.

    • Are retail stocks going to hit lows in the next reporting season due to the cold, icy, snowy weather and then bounce the following quarter when people can get out and buy the items they stayed home due to weather?

      • Or is it the economy? Or is it the internet retailers like Amazon stealing business? There are a lot of factors in retail’s decline, not just the weather. While they may get a slight bounce when the weather turns, I doubt it will be good enough to play it.

  4. Big move in silver this morning. I wouldn’t buy today. Buy on weak pullbacks close to the daily close.

  5. Ditched my CSCO this morning. I re-read the transcript again and I just wasn’t impressed. They seem a little to comfortable with their results at a time when I think competition is escalating. 1.5% gain and I’m happy to be out of this.

    • CSCO is a frustrating stock. I don’t remember if I made a profit with it, but I do remember I was happy to be out of it.

    • I sold my CSCO yesterday. It was one of my largest holdings and I had bought my first tranche almost three years ago. I did make 36%, so not unhappy. That did trail the broader market by about five points. I just am unimpressed with lack of revenue growth and more critically the dropping off of bottom line. It just feels like they are becoming more of a commodity. They were part of my dividend portfolio, so I have a couple holes there. I need a few good divvy ideas. Thinking about big tobacco (RAI), but nowhere close to pulling the trigger.

    • CSCO always struck me as an “arrogant” company. Early on they found a great nitch and dominated it, but after that they never really found anything else they could stick their money into, and competition keeps making inroads on their territory. The question has really always been how long can they keep their customers buying only their gear.

      Well recently I read an interesting article that VMWare is actually shaking things up. I guess it is no secret that companies/IT is all a blaze trying to virtualize everything. Well CSCO views it world that the control and flow of information should be in the hardware and the network department is the people that run that. VMWare/Virtualization on the other hand says “generic hardware” and control in the virtual software, which the IT people would control. It is far from clear who will when in this battle of how things show work, but if VMWare wins CSCO will be the loser. This also goes for some other concepts like virtual networks, ones that can be reconfigured at will, instead of changing out hardware.

  6. I bought IBM on 7/18/11 for $175.02 which generates a 2.17% dividend return to me. I bought it looking for a technology stock (I know little about technology stocks), its potential for share price increase and its small dividend. Today the stock is trading at $184 — bouncing back up after a less than stellar quarterly report — or a 5.1% gain over 2.5 years. This stock is in my 401K.

    Should I hold or sell and reinvest in something else?

  7. I increased my MUSA position by 33% today at 39.25. With MUSA and FGL I am getting into stocks that are really under covered by analysts, but appear inexpensive to me (and growing) by my metrics. MUSA does report next week on the 20th. I will be reading their report closely.

  8. Trader – I saw where PRAN and ANGI have taken some lumps lately. Were you able to get out or protect yourself?

    • Still have PRAN. Covered calls will expire worthless. Have a small position In Angie. I’ll probably wait a few days before I sell calls. Both look somewhat over sold. With the premiums I collected on PRAN, I’m still profitable at the current price.

      • I took a look at the March premiums on PRAN calls. They a crazy high. I can’t recall seeing premiums like this. If your are interested, run the numbers. Even the deep in the money premiums are through the roof.

  9. Anyone else concerned that this weeks rally may be a bull trap? I’m not seeing the strength in the weekly S&P chart that I would have expected for such a strong move.

    • Yes… I can’t see any way we aren’t headed down in the near future. Earnings reports have been very soft IMO… lots of Revenue declines. Gross margins hurting across the board due to promotional activity. Earnings still a little helped by cost cutting moves, but that only lasts for so long. consumer income flat.. retail numbers tough throughout holiday and continuing in January.

    • Trader, you know my opinion. I’m still holding SPXU and SQQQ.

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