Traders Corner   26 comments

The S&P 500 levels to watch today:

UPSIDE: 1937 (June 13th’s high), 1940-1944 (5 data points), 1947 (June 9th’s low), 1949-1950 (3 data points), 1955 (June 9th’s high and the all-time high), and 1966 (top of the Bollinger Bands).
LAST CLOSE: 1936.
DOWNSIDE: 1927-1928 (2 data points), 1924-1925 (3 data points and May’s high), 1922 (June 5th’s low), 1918 (2 data points and the 20 day moving average), 1915 (June 2nd’s low), 1897 (April’s high), 1888 (50 day moving average), 1883 (March’s high), 1869 (bottom of the Bollinger Bands), 1867 (February’s high), and 1862 (100 day moving average).

S&P 500 Daily Momentum: Bullish (turning bearish)
S&P 500 Daily Overbought/oversold: Neutral
S&P 500 Weekly Momentum: Bullish
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Negative
Overall: We are looking at a negative opening this morning, but that was true on Friday when the S&P 500 finished up 0.31%. Personally, I expect a flat day unless the markets get concerned about Wednesday’s Fed announcement. I have heard rumors the Fed might pull a little more QE off the table, although I tend to doubt them. Of course, the other market-moving news could come out of Iraq, which will continue to weigh on the markets unless we get news of American action there.

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26 responses to “Traders Corner

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  1. Wondering thoughts on WSTC? Marshall I know at one time this was a company on your May tranche list. Nice dividend, looks like a solid non flashy company

    • Ojunker – I do like the company. I am just nervous about being in micro caps in general right now. I am making a concerted effort to be in larger cap stocks.

    • Ojunker,
      Even though their book value is crap, WSTC does seem to be making an effort to clean up their financials. Looks like a solid play. However, I would wait for it to get around (preferably below) $25 before buying.

  2. Whoops – got confused with wstg. Wstc seems like a solid choice in today’s market.

  3. Looks like we will see a few days of indecision. No buyers and no sellers. My guess is the market is waiting to see what happens in Iraq. If that continues to become a bigger problem, we are probably headed lower. Once again, we let the middle east control the price of oil and our economy. 4.50 to 5.00 gas should put the brakes on our recovery. Damn the people. Save the caribou!!

  4. I sold the igt I bought Friday for a quick 2% gain.

    • Well done. This has been a traders market since the first of the year. Have to be flexible and adjust to what the market will give you.

      • Trader – I agree, although the market has at times given you prices you can buy and hold this year. For instance I have bought a bunch of KLIC this year a bit under $12 and today it is trading up 59 cents to $14.95. RIOM at the end of May was $1.65 and has quickly spiked to $2.12 today. Both KLIC and RIOM (in my opinion) still have significant upside, so I am in no rush to sell.

        Have people noticed this year how in M&A the acquirer is often being rewarded? I see where SNDK has put in a bid to buy FIO today and SNDK is up 3.5% on the news.

      • Marshall, I’ve noticed that. Any idea why that has changed? My guess is that the market is seeing M&A is the only way to grow in this economy. If that is the case, I don’t think this is good for a higher market. Doesn’t seem like there is much room for error. Something goes wrong and the market could drop like a rock.

      • Trader – I think you are absolutely correct. The market is viewing m&a as an accretive way to grow in today’s economy. I just worry that the market is being shortsighted and many of these deals are too rich. SNDK seems to be getting FIO at a decent price, but I do not believe that makes SNDK 3 to 4% more valuable.

  5. Bought OIH at 55.01. Sold June 20th 55.5C for .20. 1.2% if called out for the week.

    • This play seems to be working well for you. Have you looked at using the same approach with UCO/SCO? Weekly options are available.

      • Trader, if I can get .2 on the weekly options I may take what I can get.

      • Shouldn’t be swinging for the fences in this market. Play for the bunts and singles. You’ve got the right idea.

      • Trader,

        Thanks, been pretty successful with this one. This and GTAT have been making the year pretty good. I’m thinking of branching into UCO/SCO too. I’ve been trying to keep my holdings to around 4-5 positions, Right now with WWAV, BRF,GTAT, & OIH I’m right there. Plus if I include AMRS and FB i’m a little over, but they are buy and hold. So its on the radar, just not enough room right now.

  6. More TZA @ 15.30. May hold this for a few days.

  7. Silver has reached resistance. If it breaks through, there is room for a decent move up. It’s overbought on the daily chart so we may see it level or pullback. If it does not drop, my guess is it will break resistance this time. Plenty of room to move higher on the weekly charts.

  8. Bought FEYE @ 38.24. Sold Friday 35 calls for 3.36 reducing my basis to 34.88. FEYE has been on a roll so I don’t want to chase it here. If it drops, I’ll trade the options around this position. If I get called out, I essentially break even. I usually don’t play the options this way, but I’m not finding much in the market I like. Seems like a fairly conservative play for a week unless the bottom falls out. Bottom line, I’m looking for a pullback this week. Just don’t fall off the cliff.

  9. FYI, my solar stocks scty and yge have been on a tear the last couple days. probably driven by the iraqi crisis. Both shares are covered, SCTY at 60 and YGE at 5. Only option is whether to close the calls but since neither stock is near the assignment price at the moment ($55 and 3.50 respectively) and its probably best to just sit tight and let the shares continue to rise comfortable that if they do reverse course, my calls guarantee a nice return and a reduction of my basis.

    • Jeff – that is a nice luxury. I have done the same with my GTAT calls. I suppose I could gave bought them back when stick was under $14, and then sold again later, but I am happy to have made my 2.50 per share. It pretty much guarantees a profit.

      One stock that was mentioned today on cnbc was tlm. I took a look and there was a tremendous amount of option activity on it today, with the call prices going up pretty significantly on the heavy volume. However, the actual stock price was up less than 1%. The suggests some. people are expecting them to be bought. I may buy some actual shares tomorrow. It is a beaten down oil company in turnaround mode.

      • Marshall, I may join you on this one. I like the charts. Looks like it has some momentum. Have to see how it starts the day.

    • TLM definitely has some momentum. I’m looking as well.

    • Jeff – looks like YGE had decent earnings and us up 3% this morning. I keep wanting to buy a solar stock, but just can’t pull the trigger.

  10. Interesting, Jubak dropped CSCO from his LT portfolio today. He thinks Software Defined Networking will reduce CSCO margins over the next year or 3. I actually agree with him, I think the cloud is where everything is going (FYI, just had another hard drive crash last week and the cloud is looking pretty good to me right now). I was thinking of making an investment in CSCO but now I think not.Marshall and Ed, you guys are the investors of this group, what do you think?

    • Jeff,
      I still like CSCO in spite of what Jubak thinks, because the cloud doesn’t eliminate the need for routers. To paraphrase Mark Twain, reports of the death of the pc market have been greatly exaggerated. CSCO will be around for quite awhile. That said, I also think their stock is on the pricey side right now, especially considering their last earnings report showed a drop in both earnings and revenue. At most, I wouldn’t pay more than $20 for it, and I wouldn’t consider it a bargain until it gets to $19.

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