Traders Corner   36 comments

The S&P 500’s technicals haven’t reached oversold territory yet, so negative sentiment could drive markets down again today. However, the early futures are looking flat so far, so there could be some bargain hunting this morning. If you are going to bargain hunt (which I don’t recommend), you may find better prices later in the day today, unless the markets get some kind of good news today.

Don’t be surprised if the S&P 500 ends up challenging the 50 day moving average (1828) today. I would be surprised to see it challenge the 100 day MA at 1807 today, although Monday isn’t out of the question.

Just a reminder: Next Tuesday is the start of the Federal Reserve’s Open Market Committee meeting, with Wednesday being their announcement. More tapering won’t give the markets anything to cheer about now.

The S&P 500 levels to watch today:

UPSIDE: 1849-1850 (March 4th’s low and January’s high and December’s high), 1853 (20 day moving average), 1854 (March 12th’s low), 1857 (March 3rd’s high), 1863 (March 11th’s low), 1867-1868 (2 data points and February’s high), 1870-1871 (2 data points), 1874 (2 data points), 1876-1877 (3 data points), 1881-1883 (3 data points and the all-time high), and 1886 (top of the Bollinger Bands).
LAST CLOSE: 1846.
DOWNSIDE: 1841 (March 13th’s low), 1834 (March 3rd’s low), 1828 (50 day moving average), 1821 (bottom of the Bollinger Bands), 1807 (100 day moving average), 1775 (October’s high), 1770 (January’s low), 1767 (December’s low), 1765 (150 day moving average), 1745 (November’s low), 1737 (February’s low), and 1736 (200 day moving average).

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36 responses to “Traders Corner

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  1. I am setting my initial limit sell order on SPXU at $60.32. I may adjust this after the markets open.

    On a side note, I am not planning to have a short position, other than EUM, at the end of the day today. Even though S&P 500 technicals aren’t oversold at the moment, another day like yesterday will easily get them there.

  2. I saw where the bid for SIRI was removed by Liberty. Will likely sell today and take my lumps. GTAT is also down early. This has not been a great week. Down 2.2% going into today (r3k down 1.8%).

    • Interesting, looks like SIRI is up a little? Some of Malone’s comments seem supportive of the company but without the bid I’d be worried about the bottom dropping out? I wouldn’t get greedy here.

      • Yes. I sold at 3.41. Took about a nine percent loss. Oddly, it is shaping up as a very nice day for my portfolio in total so far.

      • Marshall,

        Surprised you sold this one. I’d think with the amount of cash generation you’d hold onto them just a little bit longer A lot of participants trading the stock today. Over 230Mil shares have traded hands.

      • I agree with Marshall on SIRI, because if I understand it correctly, no one was buying it because they believed in SIRI. They bought it because is supposedly was going to be bought. If you are wrong about your assumptions, holding and hoping that the company is some how now “good” seems foolish.

      • I’m with Marshall on this one as well

      • SIRI was always on my list to sell post knowing what Liberty was going to do. I am not super crazy about their business model, though I do like their product.

  3. For the techinical chart readers, how does EMC look to you? I bought at $23 and it has been moving up nicely, got some upgrades lately.

    • ojunker,
      EMC looks like the broader market a few days ago: Losing bullish momentum. My guess is yesterday’s peak might be as good as it gets for awhile. On the other hand, if it closes below $27, the bottom could drop out, and it could fall all the way to the $24-25 range.

    • I don’t see anything in the charts that would lead me to sell. If you are concerned about giving back your profit, sell half and let the rest run. If it drops you can buy in. The long term charts still look good.

  4. I still don’t see anything scary in the charts. Unless, you are a trader, trying to make decisions on the movement in any single day is nothing more than rolling the dice. You have to expect the market to move down from time to time. Take a look at monthly and weekly charts of the SPY When the daily chart of the SPY reached the 150 ma, the weekly saw nothing more than a bump and the monthly didn’t even notice. At the beginning to the year I posted that I expected the market to be flat this year. So far that has proven to be the case. As long as this continues, I would buy the dips on your favorite long term holdings. Don’t forget to take a look at those covered calls. You can generate a nice income and still collect your dividends even with little movement in the stock. Having said that, all of this could change at any time. Until it does, I would stay the course.

    • Trader, looking at the s&p on monthly the macd looks to have crossed. Now while I think its to early to tell if this is a sign of a pull back. I’d say hold tight and wait for market to turn positive.
      Any advice?

    • I don’t look at monthly, but the weekly S&P 500’s MACD histogram reads -1.8, which is bearish. Whether this is a temporary bearish trend or something longer, remains to be seen.

      • So, what do you think? Buy, sell or hold?

      • Trader,
        Buy sell or hold the S&P 500? I would say “avoid” is the better term, at least for mid-term investing. Truth be told, my gut feeling is that it feels early for a market collapse. But even if this is just a little correction, and the market comes roaring back, I doubt we go much higher than previous highs. In other words, I don’t see enough upside to justify investing in this market, but I do see a whole lot of downside risk.

        Personally, your daytrading approach could work quite well here. We’re seeing plenty of volatility, which seems to be your “stock in trade”, so to speak. 😉

  5. Silver is starting to look interesting again. If we get some follow through and break out above the recent highs, it probably moves higher. Unless you are comfortable with the risk, I wouldn’t buy today. We’ve seen these failed moves before.

  6. Russia is the huge problem today but the RSX is up 2%??? Short covering most likely. Looks very interesting to me for playing to the long side if this all gets resolved the next couple weeks.

  7. I sold SPXU at $59.17, and a 0.63% profit. The market could still go down some more, but I’m going to be busy for the next few hours. I’ll take the profit I know for sure. 😉

  8. Trader, LMNS is below 12 now. Should I sell?

    • Lynn – it has been frustrating. It was at 12.80 yesterday about this time and I almost sold half my position. Then it just evaporated. Curious what trader thinks. I will at least wait until the end of the quiet period post IPO (unless we hit 12.80 again!).

    • Lynn, this is a tough one since it hasn’t been around long enough to get a technical picture. All I have to work with is the price action which has not been good. So far the buyers have not been interested in the stock. Take a look at the daily chart. Look at the daily open price, the high for the day and the closing price. You see the closing price is at or close to the low for the day. On days that it opens higher it sells off and closes at the low for the day. Unless that pattern changes, it will probably go lower. Unless you believe in the long term story, it might be best to sell. You can always rebuy if it starts to show some strength. As a side note, I would encourage everyone to watch the price action of your stocks. Even if you don’t follow or understand technicals, you can certainly watch the price action to get a feel for how the buyer and sellers feel about the stock. If you want an example of good price action, take a look at the daily chart of GTAT. No interest in selling this one yet. Note the daily closing price. It just doesn’t go down.

    • Thank you for your time trader, it is heading lower as we speak. 11.70.
      What is your take on this Marshall?

      • Lynn – it is a speculative play for me, albeit a large one. I have made part of my strategy to buy stocks every now and then that I think have short term potential post their IPO. It has been a terrific strategy (thus far). The eight stocks I have bought (VJET, SCAI, ATHM, FGL, MBUU, LMNS and TPVG) have made me in aggregate 4.6%. I have held them all short term, so that is a very attractive return, and I have taken outsized positions. Interestingly, they have in aggregate gone up another 10% post my sales. This one may not work – I really do not know. But I do know that four to five weeks post IPO all the stocks I have owned have moved up quite nicely as buy side analysts start to hawk them. I plan to wait for that to see if it provides a lift.

    • Lynn – did you hold you call? It is up 9% today

      • Marshall, No, I didn’t. It was meant for a quick trade and I got my 10% and got out. I am holding tight on LMNS. Hopefully it will go back to 12.80.

  9. Someone here had mentioned Kinder Morgan the other day. Here is an excerpt from Briefing.com. I still think its one of the better pipeline copmanies out there and an 8% increase in cash distributions is a very nice return for KMI

    8:33 am Kinder Morgan Partners: Kinder Morgan reconfirms its 2014 financial dividend and distribution guidance for Kinder Morgan (KMI), Kinder Morgan Energy Partners (KMP), Kinder Morgan Management (KMR) and El Paso Pipeline Partners (EPB); KMP expects to generate distributable cash flow per unit nicely in excess of its budget targets (KMP) :
    •”2014 is off to a great start and the future outlook for the Kinder Morgan companies remains very bright. We have identified approximately $14.8 billion in expansion and joint venture investments that we are confident will contribute to our growth, and we are pursuing customer commitments for many more projects. Since our 2014 budget was announced in early December of 2013, KMP has completed an approximately $962 million acquisition of crude oil tankers that are engaged in marine transportation for U.S. domestic trade through the Jones Act, and Tennessee Gas Pipeline completed a successful binding open season for incremental, north to south natural gas transportation capacity totaling 500,000 dekatherms per day, which will move gas from the Marcellus and Utica shales to multiple delivery points on the Gulf Coast.”
    •As previously announced, KMI expects to declare dividends of $1.72 per share for 2014. This represents an 8 percent increase over its 2013 declared dividend of $1.60 per share. Growth at KMI in 2014 is expected to be driven by continued strong performance at KMP and contributions from EPB.
    •KMP expects to declare cash distributions of $5.58 per unit for 2014, a 5 percent increase over its 2013 distribution of $5.33 per unit. KMP expects to exceed its distributable cash flow per unit target primarily as a result of the positive impact of the previously noted tanker acquisition, TGP’s incremental north to south firm transportation contracts, which are expected to begin service in April 2014, and additional long-term contracts on its El Paso Natural Gas pipeline system.
    •KMR also expects to declare distributions of $5.58 per share for 2014 and the distribution to KMR shareholders will be paid in the form of additional KMR shares. EPB expects to declare cash distributions of $2.60 per unit for 2014, a 2 percent increase over its 2013 distribution of $2.55 per unit.

    • In taxable accounts, of the three “K” choices, I would recommend either KMI or KMR. In fact, today KMR is priced at a 5% discount to KMP for exactly the same dividend/distribution. Also, you will not have to file annual K1s with KMR. If you’re looking for a lower dividend but more dividend growth potential choose KMI. Like KMR, you do not have to file a K1. Richard Kinder is buying loads of KMI with his own money.

      As far as retirement accounts go, you will not have to file a K1 for KMP, but if the UBTI in all MLP retirement accounts does exceed $1000, the custodian that holds your IRA would have to file a form 990T to the IRS. The tax is paid out of the IRA on the net income from your MLP distributions, which are taxed at the corporate rate.

      Bottom line, stick with KMI or KMR regardless of the account.

    • Just to get smart — I have been an owner of ETP of ETP for 18 months. Does ETP compare favorably to KMI? ETP at today’s close generates a 6.8% dividend and at my purchase price a 8.1% dividend.

  10. Ed, Did you notice that 1845 was where the S&P was the last week of February and than right back at it on 1st of March.
    Trader, guess you checked out for the day, well that’s the chart I was looking at.

    Have a good weekend all my UNC Tar Heels are about to start playing.

    • Bill,
      I’m not sure what that means?

      • S&P500

        Support: – 1842.57(main). Break will give 1834.11, where correction could be. Then follows 1827.42, where correction could also be. Be there a strong impulse, we would see 1816.80. Continuation will lead to 1810.20 .
        Resistance: – 1873.98, 1881.72, 1890.07 and 1902.28(main), where a correction may happen. Break would result in 1921.30, where correction may also be. Then 1934.00. Be there a strong impulse, we would see 1946.27. Continuation will lead to 1956.50.

    • I see the cross on the daily chart. Don’t see it on the monthly. In any case, I wouldn’t panic yet. Haven’t even reached the 50 ma.

      • Ok sorry for not understanding. And thank you. I like using a 1 month view on a daily bases. I use the 10 day on 15 min and hourly as well. I’m finding a way to trade and it not be as worried about the real time market fluctuations. Also using your idea of 50 ma sell above buy below.

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