Traders Corner   51 comments

The big technical event yesterday was the McClellan Summation Index passing into overbought territory, hitting 1011 (1000 is overbought). Because of the long-term nature of the MSI, this doesn’t mean we will immediately enter a bear market. Actually, I would be far more concerned if it were to hit 1200, and it could. That has been a more reliable indicator of a correction or bear market.

The daily MACD is still trending bullish, and we could see this trend continue. The party can continue, but be aware there are dark clouds on the horizon.

The S&P 500 levels to watch today:

UPSIDE: 1876 (2 data points and the all-time high), and 1891 (top of the Bollinger Bands).
DOWNSIDE: 1871 (March 5th’s low), 1867 (February’s high), 1857 (March 3rd’s high), 1849-1850 (March 4th’s low and January’s high and December’s high), 1834 (March 3rd’s low), 1831 (20 day moving average), 1824 (50 day moving average), 1796 (100 day moving average), 1775 (October’s high), 1770 (January’s low and the bottom of the Bollinger Bands), 1767 (December’s low), 1757 (150 day moving average), 1745 (November’s low), 1737 (February’s low), and 1730 (200 day moving average).


51 responses to “Traders Corner

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  1. Yesterday Marshall asked about the actual predictive ability of the indicators you watch. You said they had to be watched over time and then good for a day and who would be willing to do that when the opportunity only pops up occasionally. Any computer trading algorithm would be able to do what you describe.
    I continue to think that you need to focus on picking stocks and stop worrying about the day to day gyrations of the market. Based on your long term day trading results your 401k is going to significantly outperform your IRA because it forces you to do what you are good at.


    • You may be right.

    • Have to agree with Robb. Trying to be a technician, follow fundamentals, be an investor, swing trader and daytrader is not going to produce long term positive results. If I were you I would forget technicals and trading. Marshall’s approach makes the most sense for most people. One of the many lessons I learned early in business was surround yourself with people who know more than you do. That one was easy for me.

      • Why do you think I keep Marshall around? It’s not for his skiing skills! 😉

      • I figured you were about to give me the boot pretty soon Ed. I have been a bit cranky. 🙂

      • Agree with the skiing. Have to wonder why your rarely follow him. Seems like you feel you have to do something different. His results are impressive. No need to prove anything Ed. We all participate to help each other make money. That is all that matters here.

      • Trader,
        He made me a good bit of money in GNW. I love his picks, even if I don’t always jump on them.

        It’s not the cranky part about you that bothers me. It’s the puns! 😛

      • Yes, Marshall’s picks have been incredible. Even i sold early on SYNA and GTAT, I still do pretty go on FGL , Riom, Avg, Atvi and Lmns. I just let him do all the hard works and follow his picks. Of course, i did some reading myself. 🙂

      • Marshal and Trader are both very good at what they do. Marshall’s picks are outstanding and while some of Trader’s strategies are a little over my head I’m learning and intend to start taking advantage of them in the near future ala his GTAT covered call strategy.

    • I agree too. This is not the first time we are telling you this. You’re really good at picking stocks, less at the timing. I think you know so much about the fundamentals, that the fundamentals are blurring you’re technical view.
      And another point of critic: Mike has said a lot of crude things here, but he did say some really smart things too. One thing I always remembered he (and now I hope it really was him and not somebody else) said was “before you enter a position, know when you’ll exit”. And this is something you’re violating in my opinion.

    • I’ll just add, since I and others have made these points before (after which you agree, but then continue to do what you’ve been doing) that a few months ago, you said what you had learned from analyzing your losses was not to do the leveraged day trades unless you were really, really convinced, and to do far fewer of them. I think that lasted about a week. (And to be clear, I agree with others that you shouldn’t do any. It seems to be a slippery slope.)

      Actually, one more point. I also completely skip the technical analysis you post every day, b/c I think, “What good can it possibly be? Ed follows it, he’s a really smart guy and his market timing still sucks.”

  2. Sold SCO yesterday at the close. Here’s the final line. 2-20 at 28.66. Sold 3-5 for 29.20 plus 54 1.9%. I still think oil will move lower. I sold since I was close to my monthly goal of 2% for this play and I want to allocate my oil funds to other areas. I want to try and take advantage of the volatility and look for better returns without a big increase in risk. I’ll be back to UCO/SCO when we lose the volatility.

  3. Looks like PRAN is losing its volatility. May have to change the game plan and switch to covered calls. As long as it doesn’t drop below 7 those high premium calls will work fine.

  4. Not sure if anyone on this board is still in GNW. They have really started to move up nicely, about 16% in past month. If you do a sum of the pieces exercise, they still look pretty cheap. They own 57% of Genworth canada. Just that is almost $2 billion. They are going to try and go forward with the Australian Mortgage IPO. I also estimate that as worth $2 billion. So if they sell 40% of that, they will have $800 million of cash and can likely start a dividend or buy back shares. Then core businesses are starting to look better.

  5. I added SPXU at $55.80. This is a momentum play, so I will sell it at $56.35, or best price in this trend.

  6. Bought GTAT @ 16.67 and KNDI @ 20.15 and sold March 22.50 calls for an average of .87. Not selling calls yet on GTAT

    • Guess I did sell calls on GTAT. Limit order filled for March 17’s @ .80

    • wow, march 17 calls are now at .95. Trader since I now own GTAT at 17, does that means a minimum 6% return in 2 weeks even if they get called out on March 22? If so then I think you have convinced me that I need to learn a new trick. Question, if GTAT is over 17 on March 22, do the calls automatically get exercised against the shares I own?

      I have applied to Fidelity to get rights to do covered calls which I should get in 1-2 days. Trader, hopefully I can bend your ear a little?

      • Jeff,

        If the calls are in the money(in this case $17.00 and above) at expiration you do not need to do anything. Your broker will exercise the options automatically and sell the shares at $17. Your account will show the sale of the stock with the proper credit, less any transaction fees.

      • Thanks Trader, This really looks like a no brainer! GTAT is below 17 on March 22, I keep the call premium of .95 and I still have the GTAT shares. Am I right?

      • No worries about the confusion. I’ll take the compliment!

        Yes if the shares trade below $17(16.99 or less) the call premiums are yours and the shares stay in your account. This allows you the opportunity to sell calls again. Its not neccessarily a no brainer. The stock can fall fast and the call premiums will drop with it. It’s just a tool to reduce risk.

      • Hopefully Trader doesnt mind if i take some of the questions directed at him. Hopefully it will keep him more talkative about other things.

      • I came up with 5.6%. Agree with what mdistas said. And no I don’t mind mdistas or w_seattle answering questions about options. I’ve been told I talk too much anyway. 🙂 I see GTAT as a low risk play. I think we are going to have a major market correction for GTAT to drop big. My goal is 5% a month or better on this one. On my buy today, I’ll get 4.7% it not called and over 7% if I am. For two and a half weeks, I’m happy either way. Lets just hope that Black Swan doesn’t show up.

  7. Sorry, thanks mdistas

  8. I should have held my MBUU two more days. I sold on Tuesday at 19.18 and felt good about a 10% gain in my month + holding period. It has now run up another 15% and they announce earnings are the bell.

  9. Bought sco 29.27
    If oil makes it to 50 day ma I’ll be happy. I could end up stuck for a while crossing fingers.

  10. I just did a very uncharacteristic trade. I was looking at top and worst performers on the day (a great place for ideas) and saw PXLW up 50%. This is a stock that has been profiled by that poised to triple guy (he also recommended Dlia which was posted here). I had actually considered PXLW a couple months ago, but did not buy as too speculative. Well today they disclosed a relationship with AAPL, and this the pop. I have bought at 7.39. I am just looking for a quick momentum pop.

    • I was looking at that last night after hour (it was only up 7% then) and wanted to buy when the market opened, but it was open up 40%. Too scare to buy.

    • Just sold for 7.63. That is. 3.2% gain in fifteen minutes. Now I know what trader feels like. Pretty good!

    • Marshall, you are good. It is $8 now. UP 67% .

      • Yes – I made 3% (24 cents) but left another 50 cents on the table. Hard to be unhappy. That was unexpected money and it was actually a largish position.

      • Nice trade Marshall. I never worry about where it goes after I sell. 3% for a few minutes. Doesn’t get any better than that. Always have to remember on these short term trades, they can go down as fast as they go up. So, is daytrading in your future?

      • No – not in my future. Do not have stomach for it. But I have to admit it is a rush. I will watch PXLW the rest of the day. If it pulls back near end of day, I may re-enter. I have now officially left $1.20 (about 17% extra) sur la table.

    • Marshall, Mark Gomes also mentioned TPCS right after DLIA any thoughts on that? This guy seems to have either a great track record of finding undiscovered stocks, a large following who buys after he posts or maybe a combo of both?

      • I did look at tpcs. I was not interested. I think he has a very good track record, though he feels a bit “fast”. I did actually go to his website once and toyed with the Ida of subscribing. He is not cheap. With the accurate call on PXLW I may take another gander.

      • I did rebuy into PXLW near end of day at 8.90. I was hoping for a bit more of a pullback, but never happened. I am hoping this is like GTAT. When they had a strong day based on some news, they have then generally popped again the next day as many people saw the news over night. I just bought a half share this time. Do not want to be greedy (though it is already at 9.18 post the close). I could just make a quick 28 cents…

      • He does have a free newsletter also, I just signed up for that one.

      • DLIA is up 10% ah and TPCS was up 10% during the day. I wonder if it is because people are checking Mark Gomes’ recommendations and starting to buy them. His free website is Marshall is right, he is not cheap for his work.

      • Hmmm maybe if we all chip in a few bucks….ha

      • Exact ly my thought. :).

      • hmm? when you say this guy is expensive what do you mean by expensive?

  11. $1,400 for a year or $5,000 for lifetime subscription. That is high compared to a lot of newsletters, but it could pay for itself very quickly. I am tempted, but it feels a bit wrong as the stocks are so small in market cap that it could be construed as pump and dump. I could subscribe. Then buy a DLIA before the broader market. Then he publishes his recommendation on seeking alpha a month later and stock spikes 20%. I profit, but perhaps not because the stock is “good”, but because I knew he was going to publish on SA.

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