Traders Corner   25 comments

The S&P 500 levels to watch today:

UPSIDE: 1988 (August 20th’s high), 1991 (July’s high and the all-time high), and 2000 (top of the Bollinger Bands).
LAST CLOSE: 1986.
DOWNSIDE: 1982 (August 19th’s high), 1977 (August 20th’s low), 1971-1972 (2 data points), 1968 (June’s high), 1964 (August 15th’s high), 1958 (August 18th’s low and the 50 day moving average), 1955 (August 14th’s high), 1951 (20 day moving average), 1947-1948 (2 data points), 1944 (August 11th’s high), 1941 (August 15th’s low), 1927-1939 (July’s low and 9 data points), 1924 (May’s high), 1922 (100 day moving average), 1921 (August 4th’s low), 1916 (August 1st’s low), 1909-1913 (3 data points), 1904 (August 7th’s low), and 1902 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Positive
Overall: It looks like yesterday’s FOMC minutes gave the bulls a second wind, albeit a somewhat weak wind. With the S&P 500’s daily momentum looking strongly bullish, the only thing to worry about is the market’s conditions becoming overbought. But the futures are pointing to a bullish opening, so this run may still have some legs.

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25 responses to “Traders Corner

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  1. Ed and Marshall wondering your thoughts in BRDR?

    • OJunker – this is a recent IPO. One thing to watch is lock up expiration, which is 9/17. That is the date that insiders can sell, so there could be selling pressure leading up to that date. I am pretty neutral on it.

    • Ojunker,
      I like the business model, but I hate the price. Way too much for a so far unprofitable speculative play.

  2. Sold KNDI from yesterday for plus .63 3.2%

  3. Bought more CBI at 61.45. Now have a full position. This looks good Marshall

    • Back in 2007-2008 I bought into CBI when it dropped from $60’s into 40’s…..only to watch the entire bottom fall out after that as it dropped all the way below $10.

      Also found this article in SA

      http://seekingalpha.com/article/2272133-chicago-bridge-and-iron-acquisition-accounting-shenanigans-dramatically-inflate-profitability-prescience-point-initiates-at-strong-sell

      • Ojunker,
        Thanks for sharing that article. I’m removing CBI from my watchlist.

      • As a counter, you might want to take a look at this article

        http://seekingalpha.com/article/2429935-berkshire-ups-their-bet-on-chicago-bridge-and-iron

      • Jeff, I believe your article trumps the negative article:

        As I recently detailed on Real Money Pro, Prescience Point has been successful in knocking several stocks down in the short term with their scathing reports – although none as big as Chicago Bridge & Iron. They also have a horrid long term record (bottom 2% of over 6,800 financial analysts according to TipRanks), that should make every investor read their reports with a huge grain of salt.

        Four-star rated analysts at both Barclays and UBS have reiterated their “Buy” ratings on Chicago Bridge & Iron in recent weeks. Their price targets are $87 a share and $90 a share, respectfully. Both these targets are more than 40% above the current stock price.

      • Ojunker – thanks for sharing. Sorry you had a bad experience with CBI, 2007-08 was a very bad time to be in the construction business. You exhibit a very common psychological reaction amongst stock investors. We remember stocks we had done well on in the the past and are willing to buy again and we shun stocks that burned us in the past. I know I do it myself all the time.

        I was aware of the allegations, always difficult to know the truth. However that type of stuff is often what creates the best opportunities. In my MFI tranches, I almost always have one or two stocks with some “hair” on them – that is why I always use a portfolio approach and hold for a year. One may go down 50%, but the other may go up 100% – at the outset, you really can’t distinguish them. However if you buy both, you end up in a nice spot.

      • As someone without any skin in the CBI game, I have the luxury of viewing that negative review and just walking past the stock entirely.

        Mind you, I will invest in stocks with some hair on them, if I think the hair is already reflected in the stock’s price/value, and preferably over-reflected. With accounting shenanigans, it is hard to say sometimes. In the case of CBI, the market seems to like the stock in spite of the allegations. The stock is cheaply priced, but not cheap enough for the allegations. If it were under $40/share, then it might be worth the risk.

  4. Another nice move in TC today. Strong long term resistance around 3.10. If it can break that, could see 3.75.

    • I am hoping it can stay above $3 then get past the resistance. Makes no sense that this is trading as low as it has been.

    • I’ve got a sell in on TC for $3.00. I will continue to play this one in the $2.70-3.00 range.

      • Sold to the bidder in the ether for $3.00! Whiskey tonight! (And Marshall, don’t think I missed that completely unfair remark about me being a lush the other day. Damn near made me go sober for a day to prove you wrong but then I had another whiskey and forgot all about it.)

      • Seattle – everyone else picks on you, so I thought I should join in on the fun. Congrats for waiting two days longer than me on a TC and getting a 6% better return. Let me know when you want me to pump up a stock price again by selling it. If you are feeling generous, I like Makers Mark and Woodford Reserve – neat.

      • I usually have Woodford around the house along with Knob Creek. Makers used to be the whiskey of choice but got demoted once my wife quit looking at the whiskey bill each month. 🙂

  5. sold 9/20 calls on 1/3 of my GTAT shares for 1.15.

    We’ll see what Apples expected iPhone 6 release brings on September 6.

  6. GTAT is overbought on the daily chart. Room to move higher on the weekly. I would expect to see a pullback here. Probably another buying opportunity before the Apple announcement.

  7. Per Jeff’s recommendation I bought tcmcf. It is very illiquid but looks to me to be a far better option than TC when you consider dividend and conversion next May. Thanks Jeff! Hopefully with my sale of TC, it will continue to go up and stock gods will not punish tcmcf.

    • Misery loves company. It actually looks like a solid buy and has some significant upside based on TC’s latest earnings release.

  8. Been without internet the last few days and boy do I hate having to use my phone for trades. Either way here is a few updates on my positions. On Friday bought back GTAT Aug17C for .30 after selling for an avg price of .23 so I took a roughly 7 or 8 cent loss. Real kicker is my buy order for .10 did not get executed that day and came back to see that i’d be eating a small loss. Bought back the Sept 17 I sold last week for 1.00 for 1.90 today. Sold Sept 18’s for 1.50 and 1.75 so i’m fully hedged at this strike. I’ll have to re-calculate my basis but on my last count before these trades it was around the 17.60ish area after working it down from purchases in the 18 & 19 range. So Jeff there is a real life lesson on how these things can get you if you’re not prudent with their management, but you’ve picked up quite well and congrats on some of your recent success.

    SLV – sold Sept05 20C for .05, and will look to sell a lower strike the next day or two to keep this one more delta neutral.

    Also my AMRS position is starting to carry some weight for me and i’m nicely in the black. I was assigned July 5puts I sold for an avg of 1.25 giving me a basis of 3.75 on my new positions on top of my old positions I built up previously. Right now the stock is at 4.20 so I’m up 12% on the new purchase(I’ll need to calculate my basis on my other positions again since I occasionally sell calls), and since May the stock is up 50%. This one could be a nice speculative play as the company has just finished fresh financing this year, and should become cash flow positive from their operations in Brazil this fall. Need to be a beleiver in this technology though as the financials are very bad so this is not a stock for everyone. I should note i’m likely going to sell pieces of my position if it gets to $5-5.50.

    WWAV has been strong and i’m keeping an eye out to get a good price for OTM strikes.

    BRF found support back in the $28 range and looks like it might consolidate more.

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