Traders Corner   13 comments

The S&P 500 levels to watch today:

UPSIDE: 1912 (May 27th’s high), and 1914 (May 28th’s high and the all-time high).
LAST CLOSE: 1909 (top of the Bollinger Bands).
DOWNSIDE: 1907 (May 28th’s low), 1901-1902 (3 data points), 1896-1897 (4 data points and April’s high), 1893 (May 23rd’s low), 1891 (May 2nd’s high), 1883-1889 (9 data points and March’s high and the 20 day moving average), 1880 (May 12th’s low), 1878 (5 data points), 1872-1873 (2 data points and the 50 day moving average), 1870 (May 8th’s low), 1865-1868 (4 data points and February’s high), 1862 (May 15th’s low and the bottom of the Bollinger Bands), 1859 (May 7th’s low), and 1850 (100 day moving average).

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Mixed (trending bullish)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures (June): Slightly positive
Overall: It is hard to say what we are looking at today until we get the U.S. GDP report. Even then, the market could ignore it.

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13 responses to “Traders Corner

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  1. ED, I saw this posted on Morning Star Dividend Forum. ARCP, an REIT that bought 500+ Red Lobster Properties (Sale/Lease). 7.6% Dividend Yield. With the Economy slowing down again I don’t think this stock will move up very fast from it’s lows today (I hope) . I will put it on my list to watch. What do you think about it ??

    • Steve,
      While their revenue has improved, ARCP needs to work on their bottom line. Their operations aren’t producing cash flow yet. The stock needs to drop down to $11.50 before I would consider it, since it would at least have reasonable book value plus technical support at that price.

      • Thanks again. I am just looking for some Long Term Dividend Stocks that will not reduce their Payouts if the market drops again and are still around in 10 years when I retire. (But mostly I want to get the best price possible and have plenty of time to wait)

  2. Marshall, good pick on NADL, which is up 5%. Next time, I will follow you exact move. 🙂

  3. Update on some of my trades.

    Last week my OIH was called out that I purchased april 25 at 52.18. I sold May2nd 52.5C for .35, May9th 52.5 for .20, may 17th for 52C for .45, and May 23rd 52C for .15. Basis reduced to 51.03 and called out at $52 for 1.9%. Didn’t reach my goal at all on this one but happy to still make the profit. This week I repurchased OIH at 52.39 and sold May30th 52.5C for .35, if called out my profit for the 4 days is .9%. Slightly short of my goal of 1% minimum each week. This one looks very likely to be called out.

    GTAT – Wish I would have waited to sell calls on this one. I sold the July17C for 1.30 on part of the position and hope to repurchase some of the July 16’s I sold for .75, Looking to purchase them back at 1.55 or lower in the next day or two.

    Also purchased WWAV for 31.96 today. Looking to start buying this one and selling calls as the stock looks strong. Premiums are not as high, but this is a companies whose products my entire family uses and I have to say I absolutely love each one. Hoping that love will turn into some $$$$ for me since those half gallons of soy & almond milk are not cheap.

    Overall i’m still cautious for the next few months and rest of yearr. Market seems to have avoided a downturn for now, but market breadth indicators have not been strong overall and volume has not been strong on the up days. I’m keeping one eye on the exit.

    • mdistas – my family too loves soy and almond milk! We shop at Trader Joe’s. The shelves for these and other vegan foods are never full because they are emptied out so fast. Looks like more vegetarians are becoming vegans – at least in the NYC area.

      Ed – your thoughts on WVAV for growth? How about WFM – is it time to buy?
      Thanks!

      • George,
        WWAV has certainly shown some good growth. The big worry I have with that play is the current drought conditions in the U.S. could impact food prices, and WWAV’s bottom line. I’d stay away from food plays.

        WFM is almost an exception to the rule about food, because of their higher end customers. One of the plays I like is service-oriented groceries. As Walmart goes into decline, some people will gravitate towards the higher end grocery stores for their better service. The only question is whether WFM will be able to take advantage of this trend. I have noticed foot traffic picking up at the local Publix, so I think they are doing a good job of it. (Sadly, Publix is privately owned, or else I’d recommend it).

        If you do buy WFM, now is probably the best time.

      • I think as a staple the company will have some pricing power. I do not believe if you are buying their plant based products you will substitute back to unorganic dairy milk at $4 a gallon which is about half the cost for a full gallon of the plant based products. If you even want to buy a gallon of their organic Horizon dairy brand it will still cost you about $6. Commodity cost is always the central issue in this business, and it comes down to who can manage it better.

  4. Hi Ed,
    What do you think of O these days? Looking for LT dividend.
    Many thanks as always.

    • George,
      O looks a little pricey to me, especially with their dividend payout ratio at 235% and their yield only at 5.1% (that is middle of the pack for a REIT). You can find better plays for real estate.

  5. Thanks Ed.
    So – any recs for better plays for real estate?

    • George, I’m not really fond of real estate right now. If rates go up, it’ll kill this sector. On the other hand, if they don’t go up, we’re in for a longer period of slow/no growth economy, which won’t help the sector at all. The sector is in a catch-22. On top of the economic questions, a lot of the REITs have been overbought for their dividends.

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