I have decided to follow the KISS rule for this post going forward, and just summarize what I see in the technical indicators.
S&P 500 Daily Momentum: Bearish
S&P 500 Daily Overbought/oversold: Neutral
S&P 500 Weekly Momentum: Bearish
S&P 500 Weekly Overbought/oversold: Neutral, leaning overbought
S&P 500 Futures (June): Slightly up
Overall: Look for our usual opening pop, followed by a drop.
The S&P 500 levels to watch today:
UPSIDE: 1862-1863 (3 data points and the 20 day moving average), 1866-1877 (15 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: 1857, inside the 1849-1858 (11 data points and January’s high and December’s high) range.
DOWNSIDE: 1839-1842 (4 data points and the bottom of the Bollinger Bands), 1833 (March 3rd’s low and the 50 day moving average), 1819 (100 day moving average), 1779 (150 day moving average), 1775 (October’s high), 1770 (January’s low), 1767 (December’s low), and 1748 (200 day moving average).
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Ed's Talking Stock 
I plan to try my first covered call trade today with GTAT (I bought shares for that purpose on Friday at $17.22). Hopefully I have gotten the proper clearance from ML to make those trades. I am thinking about June at $20. They are paying $1.50 right now. Gad, or maybe Septmeber at $21. That is trading for 2.34. Will let the board know.
Trader, is the lesson with PRAN that in the end, you have to want to own the stock? Regardless of your strategies.?
Jeff – as I enter into covered call trading today, I have thought about this question. Essentially, when you boil it down, covered calls are a process for you to sell your upside potential in the security, but retain the downside potential. At times, you can get paid very well to give up the upside – but in many of these cases (as we see with PRAN this morning), these can often tend to be riskier stocks. So my view is that these absolutely have to stocks that you want to hold. In addition (for me at least), I really have no interest in being called out – as I am picking stocks I like and I want the upside potential, I would just like it delayed for a period of time. Also, not getting called out will minimize my taxes.
Jeff, it depends on your approach to the game. As a trader, I don’t plan to hold anything for a long time. Sometimes things go South on me and I end up holding things much longer than I like. In that case, I like covered calls to generate income and lower my basis as I work my way out. For investors, covered calls are a great way to generate income on long term holdings. I think the way Marshall is using calls on GTAT is appropriate for the way he plays the market.
Those high premiums on PRAN gave me a way to play a high risk stock and reduce my risk at the same time. Overall, its worked out fine since it hung in there for a nice run.
Thanks Marshall
Ironic that I was talking about the risks with biotechs and PRAN in particular on Friday. This morning, WHAM off the cliff it goes. What I do next will depend on its volatility and the premium on the options. I’ve made a lot on PRAN so overall I’m ok. Just looks like the party is over. I’ll find another one.
That was ironic. I hope the hit is not too bad for you and others who may be in PRAN.
I’m good Marshall. With the huge profits on previous trades I’m ahead on PRAN even with the hit today. Even though I have a large position, it’s a small part of my portfolio. A great example of the importance of risk management. High reward comes with high risk. Very important to understand the game you are playing.
What was anyones thoughts here on RGR? I thought there might have been a few previous owners. It looks real cheap right now and I’ve been thinking of selling my SWHC soon so thought of maybe putting into RGR. Any reason for the decline from the $80’s to $59 and change
I wouldn’t buy it until it starts to show some strength. There isn’t any follow through on the days it moves higher. Looks like the interest is selling not buying.
Just placed a cc on GTAT for September 2014 at $22 for 2.05. I will let people know if it fills.
The 2.05 price has not hit and GTAT has pulled back a bit. It is a September expiration and I am in no rush. Will try again another up day for GTAT.
I sold my FXP at $66.55, and a 6.47% loss.
I added SPXU at $56.10. Will sell at $56.67, or best price later.
I sold it at $56.10, flat return. The MACD was looking like it was shifting, as both 3 and 5 minute divergences turned positive. I’m not taking much of a risk on this play on the last day of the quarter.
Again, I don’t see what you see. 3 and 5 are positive and SPXU is moving higher for now.
Trader,
I look at the 3 and 5 on the S&P 500, not SPXU. The price of SPXU will move based on the S&P 500, regardless of how many people want to buy or sell SPXU. Also, the triple leverage of SPXU can skew the momentum indicators, giving you a false reading.
Ed, interesting approach Ed. I would think you would want to look at the chart of whatever you are trading. If you had followed the SPXU chart on your last two trades you would have done much better.
Trader,
You have to ask yourself if you are trying to maximize gains, or avoid losses? I take the latter approach with it.
Ed, I like the new format. Easier and quicker to review. Thanks.
Thanks. Just keeping it simple.
Based on Yellen’s speech it appears it will take something more than the threat of ending cheap money to halt the upward surge in the stock market. She says cheap money is here till things get much better.
Latetom,
The FOMC’s projections for raising rates tell a different story than Janet does. Maybe this is the Fed’s version of “tail wagging the dog”?
Ed – did you see where NDZ (a stock you recommended around the end of last year) is getting sold today at $11.75?
I’m rather surprised actually. Last I heard, they were still looking for radioactive suppliers.
I have to laugh, PRAN crashes after I sold the Apr 17th 9.00 CC’s for 3.90 last week. Had I gone deeper ITM, to 3.00, I would look brilliant now. But… So to dig myself out (or dig deeper??), I just sold Apr 17th 3.00 PUT’s for 0.45. I hope I’m not shooting myself in the foot.
Marshall, good work hanging in there. I like your picks CALL and CTCM (if the Ukrainian thing cools down?) Do not like LMNS (selling $4 below expected IPO price seems odd?) and I intend to take a closer look at FGL.
Good luck on all
Charles, just out of curiosity, what were the $3 calls selling for last week?
Jeff, actually I don’t know. Only in hindsight I say that (half jokingly), because anyone holding them would almost certainly be ahead. My hope is that it will go 7.00, my break-even point, I think. I hope anyone else caught it this drop will come out okay.
Having a very strong day. Some of my recent ill timed buys are starting to show some life. LMNS is up 8% (hope spring eternal), CTCM is up 4.5%, CALL is up 3.7% and FGL is up 4.5%.
Just a heads up to CTCM owners. Dividend is cash only, no DRIP.