Traders Corner   38 comments

Yesterday didn’t happen. For the S&P 500, which was up by 4 cents, yesterday was almost the mirror image of Tuesday: High of 1852, low of 1840, close at 1845. Needless to say, the technicals barely moved.

Futures are down a little this morning, but I wouldn’t expect a huge move until Federal Reserve Chairman Janet Yellen gives her Senate testimony this morning. I expect she will stick to her guns on tapering, with the only question being whether she appears dovish or hawkish towards raising the prime rate. Her history leans towards dovishness, but the last Fed meeting minutes showed some hawkishness starting to form in the group. Stay tuned…

The S&P 500 levels to watch today:

UPSIDE: 1849-1850 (January’s high and December’s high), 1852 (2 data points), 1858 (February 24th’s high and the all-time high), and 1875 (top of the Bollinger Bands).
LAST CLOSE: 1845, inside the 1840-1847 (7 data points) range.
DOWNSIDE: 1835-1836 (3 data points), 1830 (February 13th’s high), 1823-1826 (5 data points), 1817 (50 day moving average), 1815 (February 12th’s low), 1809 (February 13th’s low), 1808 (20 day moving average), 1798-1800 (3 data points), 1791 (February 10th’s low), 1788 (100 day moving average), 1784 (February 3rd’s high), 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 an the 150 day moving average), 1745 (November’s low), 1743 (February 4th’s low), 1740 (bottom of the Bollinger Bands), 1739 (February 3rd’s low), 1737 (February 5th’s low), 1729 (September’s high), and 1724 (200 day moving average).

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38 responses to “Traders Corner

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  1. PRAN @ 11.07

  2. That was quick. Out for plus 42 3.8%. PRAN can go down just at fast as it goes up. Not taking any chances with a move that fast.

  3. Thanks. Tom, what do you expect for an old guy? 🙂 Bought a partial position in GTAT @ 14.68. I was hoping to get it cheaper but it doesn’t want to drop. Not selling covered calls yet. Will look to add more if it does drop. Keeping covered calls on the table if I need them. I don’t see much over head resistance until the 17 to 18 level.

  4. I am watching the LMNS IPO. I may jump in early if not too crazy.

  5. Sold RIOM for 2.20. I reconvinced myself that I have too many miners and I’m happy to get out of this with a small profit. No more Miners! Dammit.

    • Jeff – glad you made a profit. Would have been great to have sold late last week. I am staying with them. Thought about adding yesterday, but would rather be underweight the sector right now.

      M

  6. Silver is looking better this morning. If we can close above yesterdays high or close and then see some strength tomorrow we maybe out of the woods. If you are willing to take some risk, you could put on a partial position towards the end of the day if the move holds.

  7. Bought LMNS post IPO at 12.98. Not advocating others to follow.

    • Bought lmns at 12.77. Life is short. I have a very tight stop at 12.49

      • Do not go cursing me! I will say you got (as usual) a better entry point.

      • The only reason I am getting a better entry point is because I immediately look at everything you mention or buy and wait for it to drop just a little and start to recover before I buy. I owe the success of these buys solely to you. I owe you my thanks for spotting some great stocks. LMNS is 3.20. Thanks Marshall.

    • Marshall, two articles in Yahoo were saying that the IPO would go out at 16 but it in fact started at 12? Do you know why the difference?

      • Jeff – they did price last night at $12, which was 25% below the target range of $15 to $17. There is a lot of debate on whether that is a negative. It probably does add to the risk profile.

      • Marshall, so any idea why the price dropped almost instantaneously at 3:15 ET from $13.20 to $12.30. Looks like there was a huge sale at the same time of about 1 million shares?

    • Hopefully this will make you feel better. I got it at 13.19. 🙂

      • Lynn – that does not make me feel better. It is trading down now.

      • Sold it at 12.84 for a loss. This daytrading thing not working out.

      • Lynn, trying to trade an ipo on the first day is about as high risk as you can get. You are rolling the dice because you have nothing to look at. I’m surprised that Marshall does this when covered calls are scary. But, each to his own. If you are going to daytrade stick with something that is volatile and look for patterns. Look for stocks that have daily highs that are higher than the open and are volatile. Look at a one month daily chart of PRAN. Doesn’t work everyday but you could profit on most days. You also reduce your risk by playing when it is in an uptrend. Better odds for a swing trade if the daytrade doesn’t work out. PRAN is one of my best plays at the moment. Those high call premiums are an added bonus. If anyone is going to play this one , please take small positions. This kind of volatilty can work against you in a hurry.

      • Thank you Trader for your comment. Luckily it was only a small position.

      • I echo trader’s comments. The post IPO trading is very risky. That is why I caveated my buy saying I would not advocate it for others. That being said, this board is generally very civil and people do not finger point as we all have to be responsible for our own trading decisions. I still like LMNS, they make money and at $12.00 are almost bordering on reasonably priced (though certainly far from cheap).

  8. One more update – oil. Oil is stuck. I have a partial position in SCO, no UCO. I still expect oil to resolve to the downside. I’m starting to see some technical weakness.

  9. For those looking at a decent entry in BBEP, it is down 8% today. Recent quarter was a bit light, but guidance for 2014 looked pretty good to me.

  10. Bought BBEP (increased holding about 20%) at 19.46. Also put in sell order on MBUU (do not need too many of these post IPO plays running simultaneously).

    • Nice buy on BBEP. I’m going to take a longer look at it before I buy.

    • Marshall looking for your thoughts on buying more BBEP when I am guessing your original buy is up 15 to 20%. I bought and am up 21%. Answering a previous question by me you said you sometimes bought more of a company when it had fallen at least 5% from your original buy price. Being up on BBEP why another buy at this time?

      • Tom – I added as I liked what I read in their earnings report. Their adjusted ebidta was 275m in 2012, 370m in 2013, but they are guiding to 500m to 510m in 2014. I love that trajectory and I think the stock selling off 8% was short sighted.

      • Typically you hold for a year. When you buy more does the calendar start new for all you own or only those of the new buy?

  11. Tom – with a partial buy like this, I still view my start date as early July when I bought the bulk of my BBEP. I am am trying to accomplish two things with self imposed dates: (1) a form of discipline and (2) and eye on capital gain taxes (good problem to have). Saying that, I view BBEP as an extremely long term core holding for me. It is a terrific income stock, I think they have good management and I like the idea of reinvesting dividends over the next x years and growing my worth. At a 10% yield, I will double my holdings in 7 years.

    • I bought BBEP as a dividend stock and am not planning on selling anytime in the near future. As you noted with a 10+% dividend this is a long term hold for me.

      I’ve owned CIM for over two years and even though it is currently in the red on price I just keep banking the dividends and therefore am a very positive green when I add my dividend gains to my stock loss. Same for SAN which all dividends are reinvested in stock. I’ve owned ETP and COP and a couple of others for over a year or two — they are up 20% or more but I am more interested in the dividend. For example: COP’s dividend is 5.7% at my buy price and up 38.6% in the 18 months I have held.

      I am a fan of dividends; less taxes to pay. And a fan of long term holds (1 yr); less taxes.

      Wished I had bought more BBEP at your morning price — its already up $3/share on your morning buy price. Great buy.

  12. I tossed my remaining SPXU position from earlier this month, at $58.50, for a 16.79% loss. There is no telling when the market will make it’s next move, and the triple leverage is killing me in this sideways market.

    • Are you planning to introduce some more discipline in selling your day/swing trades when they go against you? You tend to sell your winning day/swing trades with very small percentage gains but you seem to hold onto your losers for much more significant losses. I was guilty of holding losing trades far too long, especially during the market crash in 2000, because I thought I was right with my logic for the original trade. I still am to a degree but have started adding a covered call strategy if the short term trade doesn’t work out. Seems like you need to set a hard stop loss or some other mechanism because you have a hard time admitting your thought process behind the trade was wrong/flawed. It seems like you will need 20 or 30 successful day trades to make up for this one loss which is not conducive to overall success.

      Robb

      • Robb,
        In looking back on this trade, I forgot one rule of trading: When the reason for getting into a trade no longer exists, sell. I should have sold it immediately, regardless of the loss, which was a lot less than the final loss.

      • Tough market. I bought a teeny little SPXU as insurance when the market crossed above the 50 day MA, thinking if it holds . I’m down about 6% because, duh?, the market’s gone even higher, making me feel like I need the insurance even more.

        So it’s hard to ditch the insurance policy as the fire gets closer, particularly as the price of the insurance is going down…

        Tough to decide. Sympathies Ed.

  13. Bought PRAN again at 11.47. I like the way the daily chart is setting up. I;m willing to take a little extra risk here. Don’t plan to sell today.

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