Traders Corner   24 comments

Yesterday, the S&P 500 couldn’t break through the upside resistance range (1867-1877). On the other hand, we also have a strong support level forming in the 1849-1858 range. These could be areas to play intra-day reversals.

Other than that, the technicals look about the same today as yesterday, and the day before that, and the day before that, etc. We are stuck in a trading range for now.

The S&P 500 levels to watch today:

UPSIDE: 1867-1877 (13 data points and February’s high), 1881-1883 (4 data points and the all-time high), and 1885 (top of the Bollinger Bands).
LAST CLOSE: 1865.
DOWNSIDE: 1862-1863 (3 data points and the 20 day moving average), 1849-1858 (8 data points and January’s high and December’s high), 1839-1842 (3 data points and the bottom of the Bollinger Bands), 1834 (March 3rd’s low), 1832 (50 day moving average), 1816 (100 day moving average), 1775 (October’s high), 1774 (150 day moving average), 1770 (January’s low), 1767 (December’s low), and 1745 (November’s low and the 200 day moving average).

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24 responses to “Traders Corner

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  1. For an overheated market an article on some value stocks, I have been building a position in TWI mentioned in article.

    http://www.marketwatch.com/story/8-stocks-for-a-value-investor-2014-03-25?mod=flipboardbizfeed

    • The only thing that keeps me out of TWI is their dividend. They could really have a bigger payout ratio than 3%, or bigger yield than 0.1%. Also, I like the company, but I wouldn’t call the stock “cheap”. It’s fairly valued currently.

      • I think the article is probably stating that these stocks are cheap relative to most stocks in the market at this time. MSFT is mentioned as a value stock by many people and its PEG is 1.96 right now.

      • Ojunker,
        “Cheap relative to a bunch of overpriced stocks” isn’t cheap.

        As for MSFT, I own it mostly for it’s dividend, and the off chance it could become more competitive in the mobile market. Safe money with a chance for growth.

    • TWI looks pretty reasonable right now. I peg them at a pretty decent earnings yield, so they are “cheap”. I am not sure if they are a great company – I guess my concern would be that they seem pretty capital intensive. I compared them to cat, joy and mtw and TWI seems to fare pretty well in the comparison.

  2. BLDP @ 4.85

  3. GTAT @ 17.54. Not selling calls yet.

    • Trader,

      Ive been watching it too, I think we might get the bounce once it hits the 20 day sma. I bought some at 17.28 and have another order in at 17.05.

      • I bought a partial position. I’ll buy more.

      • Agreed. I’m looking to see if it can find a bottom the next day or two and I might add another. Sold April 18C @.75 on partial position.

      • I wouldn’t be surprised to see it at 15.50-16.00. The price action the last few days has been weak. It moves lower after the open and fails to recover. The daily close has been lower the last three days and unless something changes today, that pattern will continue. I’ll probably wait to add until that pattern changes.

  4. Added SPXU at $56.35, will sell at $56.93, or best price later.

    • Sold SPXU at $56.40, for a small 0.09% gain.

      I tried something a little different today. While I did use the 3 and 5 minute MACD charts, I also kept an eye on the S&P 500’s overall trend. As long as it kept hitting lower highs and lower lows, I ignored the minor reversals in the MACD. After the first higher low, then I waited for the next reversal on the S&P 500 and sold SPXU immediately. By doing this, I kept from selling at a loss on the earlier MACD reversals, but it also forced me to sell immediately at the first profit, even though it was less than I wanted.

      All that said, the S&P 500 could still go down later today.

      • I am not sure I understand the overall day trading strategy if it results in making a couple pennies. You are basically being paid nothing for the risk you took on by establishing your initial position and had a minimal gain overall planned/expected for the trade. I would think choosing a stock with wider swings would be far more beneficial and lucrative especially if you can establish a pattern that allows you to sell prior to any significant downward movement.
        It seems that looking at some of the stocks Trader follows and trying to test/perfect your strategy with them might be better for you.

        Robb

      • Robb,
        Because I follow the S&P 500 every day, I am more familair with it. However, I have done daytrades with stocks I owned before.

        Also, I prefer the S&P 500 because it’s movements are generally less volatile than specific stocks, thereby limiting losses should the trade go south on me. I won’t make as much, but I also won’t lose as much.

  5. Trader, can you chart ETF’s just like an individual stock? I am wondering about XLF and KBE?

    • ojunker, yes. I looked at the daily and weekly for both. If you think the market will go higher, they should move in the same direction. I continue to believe the market will trade flat, so I wouldn’t expect much movement until the trend changes.

  6. Crappy day. Nothing is working and too cold to play golf. I see a nap in my future. 🙂

    • So just a normal day for you 🙂

    • Trader – for me it is shaping up as a crappy week. Down almost 3% while Russell 3000 is down 1.2%. Am still solid on the year, up 6.9%. There does seem to be a shakeout in some of the non profitable companies that have been soaring so far this year – 3d printers, biotech, battery companies and even poor old GTAT! Question of course is whether this represents a buying opportunity? I actually tried in my Merrill Lynch account to buy my first options ever on GTAT (January 2015 with a $17 strike price for $4), but was told my account was not authorize dr that type of transaction. So I need to find out why that is. Otherwise, I am pretty much just standing pat. Wishing I had not bought CALL and LMNS while selling INTC – that (at least in a one week view) was a series of bad moves. At least I sold my HIMX at $14.12 at the start of the year – they got downgraded by GS and are now 11.83.

      • Marshall, a volatile market that goes nowhere if very frustrating for most. Up 200 and the talking heads say we are on the way up, down 200 the next day and that is the start of a correction. Trying to predict or make investment decisions on a single days move is just going to add to the frustration. To repeat, we haven’t even reached the 50 day ma. I don’t care which way it goes since there are tools available to make money in any market. Back in the old days there weren’t many options available for the retail investor. Pretty much long only. the game has changed and in many ways has become more difficult. I think we will see more volatility as time goes on. The challenge is how to make money in a volatile market that goes nowhere. That will change but for now it’s the hand we have been to play.

  7. Sold April 12 calls on two PRAN positions for 2.20. Here’s where I stand.
    1) 2-5 PRAN @ 12.00. With todays sale I have collected 4.71 in premiums reducing my basis to 7.29. If called our my profit will be 4.71 64.6%. If not called I’ve collected a 39.3% return on my purchase.
    2) 3-5 PRAN @ 11.20. 2.20 today on sale of calls reducing my basis to 9.00. If called, profit of 3.00 33.3%. If not called 19.6% on my 11.20 buy.

    When I see a stock open at it’s high for the day, move lower and then fail to recover, it is a red flag. I’m seeing that today so far in PRAN and GTAT. I may trade the options around PRAN if it does move lower. PRAN has worked great so far; however, there is an extra element of risk with biotechs. One bad news release and they drop like a rock. As long as that doesn’t happen with PRAN, these huge premiums are a real bonus.

  8. One final posting, a company that is really starting to look cheap to me is SYMC. They fired their CEO last week and the price has dropped a couple bucks (about ten percent). They pay a 3.3% dividend, have a strong balance sheet with almost $4 billion in cash and trade at 10x next years earnings. They will definitely be on my list for new stock tranche in May.

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