Traders Corner   23 comments

For you momentum followers, the S&P 500’s MACD histogram is starting to weaken. Although still technically bullish (+2.28), the histogram has been dropping since the February 18th peak. (For those of you novices out there, the histogram is the difference (shown as a bar) between the 2 lines on the MACD chart. A positive number is bullish, and a negative number is bearish.)

More bearishness: The longer term McClellan Summation Index is starting to turn downwards, at 1024, although it is still in overbought territory, along with the weekly Williams %R.

But for you bulls out there, overbought conditions have eased, with the short term McClellan Oscillator all the way down to -24 (-60 is oversold), and the daily Williams %R and RSI both falling out of overbought territory.

Overall, there is nothing in the technicals to signal a direction for today, but watch out for longer-term bearishness in the indicators.

The S&P 500 levels to watch today:

UPSIDE: 1870-1871 (2 data points), 1874 (March 6th’s low), 1876-1877 (3 data points), 1881-1883 (3 data points and the all-time high), and 1887 (top of the Bollinger Bands).
LAST CLOSE: 1867 (March 10th’s low and February’s high).
DOWNSIDE: 1863 (March 11th’s low), 1857 (March 3rd’s high), 1849-1850 (March 4th’s low and January’s high and December’s high and the 20 day moving average), 1834 (March 3rd’s low), 1828 (50 day moving average), 1812 (bottom of the Bollinger Bands), 1805 (100 day moving average), 1775 (October’s high), 1770 (January’s low), 1767 (December’s low), 1762 (150 day moving average), 1745 (November’s low), 1737 (February’s low), and 1734 (200 day moving average).


23 responses to “Traders Corner

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  1. PM at 78.98. This goes into my long term holding portion of the portfolio. Replaces my LO that I sold on the takeover rumors.

    • Hello mdistas.
      Your thoughts on PM vs MO?

      • CuriousGeorge,

        I actually like them both. I’ve bought MO for my parents retirement account that I manage for them in the last year. I went with PM based on the charts. Sitting above support at $75 I see it as having more room to run over the next year. Were you looking for more of a valuation or company finance perspective?

      • Just my 2 cents, but I would rate the tobacco stocks in this order:

        1. RAI
        2. MO (their debt/equity is high)
        3. PM (book value is non-existent)

  2. I added SPXU at $57.50, will sell at $58.08, or best price later today.

    I also added FXP (double short on China) at $76.60. I’m holding this one overnight.

  3. Interesting article on a play on marijuana growth and organic trends, I would wait for a further pullback in market before even looking at them though.

  4. Great read today. I do not know how to insert links, but Seth Klarman wrote his annual letter explaining why he is 40% cash right now. His analogy for the current state of the markets is the 1998 movie “the Truman Show”. I would encourage everyone to read it. It is a bit ominous for bulls.

    • Marshall will this change your cash postion?

      • Not over night. But I am at low end of my typical cash position and I will likely plan over next three months to swing towards higher end. LMNS is my largest discretionary holding that I would likely sell and not replace. SIRI is also on the list, but i want to wait for a Liberty offer. Those two sales would get me at 25% cash. I do think it is safe to say that I will not be buying anything (barring a remarkable opportunity). The only other items I can sell (per my sell imposed rules) are things like GTAT, GNW, RIOM, KLIC and FGL. I am pretty happy with the valuation of all those stocks ( meaning over time, if think they are likely to appreciate).

    • Marshall,
      Just copy the link from your browser and paste it in a comment.

    • I read the article and here is how it struck me.

      Nothing new, the same thing has been said every time the market has gone up in my lifetime (and probably when it was going down too).
      Anyone that believes the market has been truly been driven by “value” hasn’t been watching too close.
      The market has pretty much always been about the who blinks first and such.

      That has never been the question. The questions have always been.
      1) If you are the kind of investor that lives by the “blink”, the question is “Is this the right timing for the blink?”.
      2) If you are the kind of investor that lives by the “value”, you want to check your assumptions based on the real possibility they are wrong in comparison to the real world of today, and hopefully tomorrow, so that you can hopefully ride out the dips that are going to be there.

      In some ways this sort of illustrates my wonder about all the talk about beating the indexes, at least on a day to day basis.
      The current “value” of the market has always been fantasy. A belief in the ability to predict the future.
      It doesn’t happen. If you put in a thousand people’s guesses of what will happen tomorrow, someone will be right and “predict the future”, and when the future becomes the present and the market flows to the new reality everyone will believe that the writing was on the wall, when it wasn’t.

      To me there are only really two fundamental values, the they have nothing to do with some group of “experts” guesses about how much a company will make in the future.
      1) This is the kind of value Warren Buffet sees, as in he picks the company apart as “do I want to own this”. As In if this was the only company I would own or work for, what is the likelihood I would actually be able to pay myself out of the profits, or have a job.
      2) Markets/Indexes track things, but the biggest things they track are economies. So investing in say the S&P 500 is investing in where you think the US (and by reference to the global economy the world), if it is your belief that over time it will grow. That is important. Except for dividends you do not get paid for investing in something that stays the same size, even if you as company holder/employee could be very happy doing.

      That is not to say people can’t make money guessing at which way the market is going to turn.
      People do. The question is how good are you at knowing when people will blink?
      Because at any moment in time there will be the “predictors” some saying blink now, others saying “later”, …
      Look to the really good gamblers, they study the odds of each action, they are very good at reading the other players, …
      In reality they reduce the gambling to a domain that they can control the best.
      You never here of the professional gambler of slots.
      For the average person, relying on the “talking heads, which have their own agendas”, they are playing the slots.

    • Folks always have a great sounding reason why the end is near.
      Maybe all the bears are right or maybe they are wrong. The number of events over the last 5 years that were supposed to derail the current bull market could encompass several books. The fact of the matter is that if you choose the right companies and stocks you can make money no matter what the overall market does. Making small changes in your portfolio based on where you think the market is going seems reasonable (ie 20% cash to 30% cash) but making big moves (all cash or 100% invested) seems like a fool’s errand. I have yet to find anyone that can reliably predict to the ups and downs of the overall market.


  5. I sold SPXU at $56.85 and a 1.13% loss.

  6. Looks like s&p held. I’m most likely dropping sco bought @ 29.27
    Its just in a big downward move right now. Oil that is

    I’m most likely adding gtat and maybe a position in upro. Next week 1900?

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