Traders Corner   31 comments

The S&P 500 levels to watch today:

UPSIDE: 1965 (July 9th’s low), 1968-1969 (July 10th’s high and June’s high), 1972-1978 (7 data points), 1984 (July 7th’s high), 1985 (July 3rd’s high and the all-time high), and 1987 (top of the Bollinger Bands).
DOWNSIDE: 1962 (July 1st’s low), 1959 (July 8th’s low and the 20 day moving average), 1952 (July 10th’s low), 1931 (bottom of the Bollinger Bands), 1925 (50 day moving average), 1924 (May’s high), 1915 (June’s low), 1897 (April’s high), and 1892 (100 day moving average).

S&P 500 Daily Momentum: Bearish
S&P 500 Daily Overbought/oversold: Neutral
S&P 500 Weekly Momentum: Bullish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Positive
Overall: The McClellan Oscillator (short-term indicator for the NYSE) is getting close to oversold levels. With S&P 500 futures flashing green this morning, don’t be surprised if we get an upward move in the equity markets today. However, with the weekly bullish momentum starting to weaken, we may not be done with this correction.

31 responses to “Traders Corner

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  1. Wow, today was the worst round of early morning news I remember for my stocks in a long time. Looks to make a miserable week a terrible week.

    1. RCII announced reduced guidance. The stock is trading down about 15% this morning.
    2. GPS announced weak June sales. Trading down about 2%.
    3. FSC announced a secondary offering. The stock is trading down almost 5% (I do think this might be a good entry point).
    4. GNW just found out about new capital requirements for mortgage insurers. They are trading down over 3> this morning.

    W-Seattle, save some of that whiskey for me. I generally don’t start this early….

  2. Sorry to hear Marshall. Another red flag. We need to be concerned when high quality stocks take a hit on less than positive news.

  3. Thanks for the empathy Trader. I have had bad weeks before. Sun will still come up tomorrow. BTW, did people see where SEC has suspended trading on CYNK? That can’t be a good feeling for those shelling out $14 and $15 a share on the ultimate Dutch Tulip momentum bubble.

  4. FSC goes ex dividend today as well which could explain at least part of the drop.

    • 10% dividend at my buy price and still a small green number. Of course I hate to see a down day especially as large as today but bought it for the dividend. Now a dividend reduction would be a disaster for its price and the reason I bought.

    • Thought they just raised their dividend on the 7th? Went from 8.33 cents per month to 9.17. a 10% increase

  5. GTAT looks like it maybe forming a bottom. If the markets don’t fall apart, it should move higher. Some resistance around 18. I’m still taking a wait and see approach.

  6. Marshall… RCII is under 26 at the moment and seems to have leveled off. Think this a decent entry point? Might there be a bounce in the near future?

    • I went to my brokerage account three times this morning and almost added to my positions in several stocks I own that are down today, RCII, GNW, NADL and FSC. But I could not pull the trigger as I am worried about a correction right now. So I think RCII is an attractive price right now, but my “feeling” is that better entry points are down the road. I put feeling in quotes as my track record on a market downturn is abysmal. But I keep trying!

      • Marshall,
        I don’t know if this will help, but have a rule about adding to existing positions: I generally don’t do it unless the stock is trading at less than my original cost basis. Why pay more for the same cow I already have?

      • ED, I can’t help myself. Maybe I buy more cow because my neighbor decided to feed steroids to my cow and it is putting on more weight and faster than I expected and therefore I will be able to sell it earlier and for more.

      • You need to look at adding on a case by case basis. I’ll add at any price if the momentum is working for me. Adding because it is less than you paid before can be dangerous.

      • Agree with trader, there is no rule that works in all situations.

      • Ed – in my view, the price I paid for a stock should have nothing to do with buying more. The question you should always be asking is ” what do I think the company is worth?” If the answer is much more than current price, then buy more. Great example was GTAT. I bought at about $3 in March 2013. In November, after the AAPL deal was announced, they had a secondary and dropped from $11 to under $9. I increased position 50% because at that point I felt stock was worth $13 to $16. With a view of a potential double, why would I hamstring myself by tethering my decision to a $3 price from eight months agp?

      • Guys, I never said it was an “absolute” rule. But it does make a useful guideline for when you are unsure as to whether to add to an existing position.

  7. All in all pretty boring day. Broke dead even. up .0001%. Economy is still improving. I’m still pretty much all in but I’m watching carefully. Rates will absolutely rise over time. China must absolutely continue to grow at 7%+.

  8. I can see a correction but barring some kind of “event” I don’t even see a 10% drop right now. Let’s see what earnings bring.

  9. Bill, nice day for SCO. Hope you’re still holding.

    Marshall, sorry to hear about the down day. Sometimes a nice bourbon at 10am on a Friday is the right way to go! 🙂

    • Yea boy I’m glad to put that trade behind me. I was getting worried cause that was way more than a normally invest. Good luck on your SCO

  10. Took a look at my GTAT activity over the last 3 months including stock and call activity. Overall, I’m up approx 27% and I continue to own an outsized position in the stock. Most recently, on Friday I bought back 1/3rd of my calls for .75 (premium was 2.40 so gain was 68%) and looking back its easy to see that my call activity has been the primary driver of my success in this stock as well as others.

    For those of you who don’t use covered calls in their investing or trading. I can’t emphasize enough what a game changer this tool can be.

    Good luck to all.

    • Jeff that is very nice work. You have done great this year.

    • Thanks Bill. Except for a couple stupid mistakes (bought YGE at exactly the wrong time, down 45%) I’ve done well this year. Up over 18% so far. With help from Marshall’s stock picks and listening to ideas from mdista, trader and others like you I’m having a pretty good year and feeling alot more confident in starting and holding positions even in the face of some significant drops like GTAT and SCTY. Let’s hope this continues and good luck to you as well

      • Well I’m no expert 🙂 I feel good having all positive oil trades this year. I like the get in get out approach. On Tuesday for this past week everything turned down. I don’t feel comfortable investing into anything at this time after looking at the charts. If a market top is not in things don’t point much higher. GTAT could be a good trade but it will be very small and very small gains. I’ll have to watch for strength but seeing strength isn’t a strong area for me yet.

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