Traders Corner (7/2/2014)   29 comments

Another dull day for news, so no daily notes…

The S&P 500 levels to watch today:

UPSIDE: 1974 (top of the Bollinger Bands), and 1978 (July 1st’s high and the all-time high).
LAST CLOSE: 1973.
DOWNSIDE: 1968 (June’s high), 1957-1962 (8 data points), 1950 (20 day moving average), 1927 (bottom of the Bollinger Bands), 1924 (May’s high), 1913 (50 day moving average), 1897 (April’s high), and 1883 (March’s high and the 100 day moving average).

S&P 500 Daily Momentum: Bearish (weakening)
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bullish
S&P 500 Weekly Overbought/oversold: Overbought
S&P 500 Futures: Positive
Overall: The S&P 500 daily technicals aren’t really saying anything, but the weekly technicals are now decidedly overbought, with both the Williams %R and RSI overbought. With the NYSE’s McClellan Summation Index, a long-term indicator, also in overbought territory, I would say this current bullish trend is nearing an end. As usual, this doesn’t mean we will get a correction. As long as sentiment is positive or mixed, I would say the market is due for a period of sideways movement. But watch out: One bad news story could send the market tumbling. With the monthly U.S. Employment Report due tomorrow, I wouldn’t expect too much from markets today.

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29 responses to “Traders Corner (7/2/2014)

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  1. My Solar City SCTY is on fire. Up 4% pre-market. ADP report was good. Looks like another great day. knock on wood

  2. CSIQ as well up 3% pre-market. We’re going to make some $$ today! (says Jeff as he wrings his hands and makes his evil Jamie Dimon laugh, Ha Ha Ha)

  3. Marshall I’m looking to put some money back to work and i’m looking at one or your picks, NSR. Do you have any idea when they might find out if their contract got renewed?

    • Jeff – I am not sure of the date. I will say that everything I have read suggests that at best they will only get part of the contract. I believe this is already priced in, but there is chance for a sharp sell off on bad news.

  4. I bought a full share of DAL today at 38.09. I have been watching the airline space for quite a while (recall I debated HA versus Alaska Air at start of year, HA is up 40% since then). I think demand right now far exceeds supply, and that equals continued good profits for carries like Delta. I have talked to business associates about airfare costs and everyone is commenting for business people how much higher they are than a year ago.

    • Marshall, doesn’t look like it is going anywhere fast. Maybe a good candidate for covered calls. Every flight I have been on recently has been full. Do you know how they hedge their fuel cost? If fuel goes higher and they are not hedged properly higher fees won’t necessarily mean higher profit.

      • Trader – I agree on comment on fuel costs. Not sure how DAL hedges, though I know they actually own a refiner. This is actually a more macro play on the fact that I think over time fuel costs will be coming down. I view recent spike as temporary and that has allowed me to buy dal 10% under recent high.

  5. GPRO What goes up, will come down. And fast. Good example of taking quick profits and not getting greedy.

    • Trader, I thought of you when I saw gpro this morning. That is an example of why not to get greedy, but to me it is also an example of potential to get burned in event the drop happens right after one buys. I have played a few after market IPOs with little success.

      • That is why you have to play these with intraday technicals, momentum and price action. I’m probably the only one on this blog who plays this way. As a side note, I don’t post these trades to try and impress anyone. At my age I’m way beyond that. I post to show the trading side of the market for those who maybe interested.

      • I for one and I am guessing my how many now follow you do not believe your trade posting is to impress others. I do believe most of us find it as a very helpful tool. I keep looking at charts but am no where as good a reader of charts as you are.

  6. An interesting stock I have placed on my watch list is VRTV. This is a spin off from IP, and my experience has been these small spin offs often sell off at the start and then can do very well.

  7. Another GTAT position in at 19.68 and sold July 20’s for .80 = 5.6% for just over two weeks.

    • I’m thinking of doing the same after the holiday. I have two large positions that look like there is a good chance they will be called out in July. 17 and 19. It’s reached the 19-20 resistance level. Based on the way it is holding up, there is a good chance it will break through unless we get a decent drop in the market. GTAT has been very nice to me.

      • Yeah this is my last trade for the week unless its closing or hedging an existing one. I want to wait until all the big players return from vacation next week. It’s been very nice for sure! Trader I like the good volume spikes I’ve seen since the middle of June. Seems to be a lot of big money put to work in the stock, so I feel pretty good it will hold up in a pullback.

  8. On another note, I heard GPRO is going to start trading options on Monday. Will be interesting to see the premiums. Might give us some idea how the market is looking at the upside potential. For those of you who are interested in trades, I would keep this one on your watch list.

    • thanks for the heads up trader

      • In addition to day/swing trades, I’m thinking there maybe an excellent opportunity to trade options around a core position. I would expect there will be continued volatility with this one. I see far less risk than biotechs.

  9. Except for my oil and natural gas which are trading about even all my other material/mining stocks are on a definite upward move. FCX, NUGT (only down 85% now), SAND, VALE, TC, and RIOM all up.

    I can’t make up my mind — up because (1) dollar is falling, (2) inflation is on the horizon, maybe or (3) the world’s economy is improving.

    • I’m guessing we are in the early stages of inflation. Have a friend who is a Shriner. Every year they sell sweet onions. Last year paid $300 shipping. This year (same quantity) $1,000. I know they don’t count food in the inflation numbers, but this type if increase is going to effect everything.

      • Trader, This is the 2nd time you have said inflation. When the fed started buying these mortgage back securities and treasury’s the investors feared inflation. Were they worried that by the time the fed sees “real inflation” they won’t be able to stop it? How does the market react to inflation scare?

      • BillR, I quite trying to figure how the market will react to anything a long time ago. When you start to think the market will do certain things you will be wrong way more often then right. Market was supposed to go down when the Fed started to tapper. You see how that worked out. As for Vegas, how do you know I’m not a rain man? 🙂

      • Ok Wapner fan 🙂 I understand your point and thank you for your take on it. I was also implying past inflation scares. You seem to be very disciplined in your trading manner.

  10. Well it looks like a good time to cut my losses on sco. I’ll most likely cut tomorrow. It may keep going up but I’m not taking my chances. Hard lesson rolling the dices. Trader good luck in Vegas you’d do better trading 🙂 Ed have a good time on your vacation.

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