August 29th: Ed’s Daily Notes and Traders Corner   34 comments

The S&P 500 levels to watch today:

UPSIDE: 2001-2002 (2 data points), 2005 (August 26th’s high and the all-time high), and 2020 (top of the Bollinger Bands).
LAST CLOSE: 1996, inside the 1993-1998 (5 data points) range.
DOWNSIDE: 1982-1990 (July’s high and 5 data points), 1977 (August 20th’s low), 1971-1972 (2 data points), 1968 (June’s high), 1965 (50 day moving average), 1964 (August 15th’s high), 1959 (20 day moving average), 1958 (August 18th’s low), 1955 (August 14th’s high), 1947-1948 (2 data points), 1944 (August 11th’s high), 1941 (August 15th’s low), 1927-1939 (July’s low and 9 data points and the 100 day moving average), 1924 (May’s high), 1921 (August 4th’s low), 1916 (August 1st’s low), 1909-1913 (3 data points), 1904 (August 7th’s low), and 1898 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish (weakening)
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: Light volume with only small movement has left the technicals almost stalled this week. Momentum indicators for the S&P 500 seem headed to neutral, while overbought/oversold indicators still read about the same as they did at the beginning of the week.

And now for the news…

The Daily Beast: Why Obama Backed off More ISIS Strikes: His Own Team Couldn’t Agree on a Syria Strategy

After lots of bluster about striking ISIS on Syria, President Obama threw cold water on the idea Thursday, disappointing those who wanted him to take the fight to ISIS in Syria.
After a week of talk of eliminating the “cancer” of ISIS, President Obama said Thursday that he was not planning to significantly expand the war against the Islamic extremist movement anytime soon.

His remarks came after days of heated debate inside the top levels of his own national security bureaucracy about how, where, and whether to strike ISIS in Syria. But those deliberations – which included a bleak intelligence assessment of America’s potential allies in Syria — failed to produce a consensus battle plan. And so Obama, who has long been reluctant to enter into the Syrian conflict, told reporters Thursday that “we don’t have a strategy yet” for confronting ISIS on a regional level.

Only 875 more days of the lamest presidential administration ever…

Yahoo News: Nokia will have its revenge on the smartphone industry

Bobb posted this article yesterday in the comments:

Business Korea has just published a very provocative piece that depicts a monstrous troll attacking its home country’s pride and joy, Samsung. That troll, you’ll be surprised to learn, is Nokia.

The reason for this is easy to understand: Samsung may be forced to pay one of the history’s biggest patent royalty sums to Nokia, and fellow Korean electronics titan LG is not scot free, either.

What unleashed the beast in the Finnish company was its decision to sell its handset division to Microsoft a while back. As long as Nokia was a phone company, it was bound by a web of cross-licensing deals limiting how much it can charge for its thousands of handset-related patents. Nokia needed to use both essential and non-essential patents held by Samsung, Apple, Motorola and other industry giants, which put a rather severe cap on how much it could charge other phone vendors.

But when Nokia got out of handset business, the need for those cross-licensing deals vanished and Nokia emerged as a Non-Practicing Entity (NPE). Or as Business Korea defines the term, a patent troll.

This means the already competitive smartphone business just got a little more expensive.

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Posted August 29, 2014 by edmcgon in News, Politics, Stocks, Technology

34 responses to “August 29th: Ed’s Daily Notes and Traders Corner

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  1. I bought a half stake in ueps this morning before the opening bell. This is a company that I know pretty well and have owned in the past. They are a South African company that provides electronic payments between govt agencies and the general population (many people do not have checking accounts). Very interesting company. I bought in at $13.79. They just announced earnings last night of 1.51 for the year ending June 30 2014. Th expect sustained growth in 2015. There is risk in that they have large deals with govt agencies, which they could lose. Also their is foreign exchange risk, should the dollar strengthen against the ZAR. I will likely hold this for a year, unless I get an outsized gain quickly. People should do their own research as this is a very unique company.

    • Marshall,
      I would say there is a very strong risk of the dollar strengthening against the ZAR. Watch your back on this one.

    • bought a little to play at 13.04. 🙂

      • Buying before market opens works out for me about 10% of the time.

      • I guess we should have waited a little longer. 😦

      • Lynn and Marshall, one of the things you might want to check before you buy is the Keltner channels. When the price is outside the channel it almost always indicates a top with either a leveling or pull back. Usually a pull back. UEPS was way outside the channel on the open this morning. Take a look at a 5 minute chart and you’ll see what I’m talking about. If this is a longer term hold it may not matter. Hope it works out.

    • Marshall, I couldn’t stand watching it go down anymore, so I sold it for a loss. Luckily it is only a small position. sold at 12.47.

  2. Ed, Marshall, group, any thoughts on VOD? Used to be in news all the time when owned part of Verizon but not much talked about now. Nice divy.

    • Bobb,
      VOD is actually a better value play than dividend play. I expect their divvy will drop as the dollar strengthens against the euro over the next year or so (although they do have room to raise their payout, since the payout ratio is only 22%). But for value, it’s exceptionally cheap (book value of $44, trailing P/E of 0.92, and positive free cash flow). Certainly, there is European risk, but the EU will drag out their inevitable split for many years to come (maybe even a decade or longer). You may want to wait and see if it drops back closer to $32/share though (it’s already visited that area 3 times since June).

  3. Ed, to your question from yesterday. In looking at the daily chart of the SPY, I see numerous indication of a top. Does not mean a correction. I don’t think we can move much higher without some pullback or at least a leveling. Momentum and strength indicators reached a level where they have turned in the past and have started to move lower. One of the oscillators I follow is also close to a level where we have pulled back. The MACD is extended and starting to show weakness. The Stochastic RSI has been at 100 for quite a few days and is starting to turn lower today. UVXY appears to have bottomed and has started to show some strength. I think a lot of people use technicals to try and project the future. I try to look at the market, stock or etf and see how it responded to the technicals in the past. If I can see a pattern, then I’ll try to trade that pattern and hope it doesn’t change while I’m in. I also look at support and resistance levels along with the price action. With all of that, I’m just trying to put the odds in my favor while I continue to search for that magical crystal ball.

    • Trader,
      You’re looking for a crystal ball? Why didn’t ya say so?!? I happen to have one for sale that you just might like. Works great for picking stocks. I could make you a sweet deal on it. A special deal, just for a friend. 🙂

      • Thanks but I’ll have to pass. Not sure why, but something is telling me this is a screw job. Don’t take it personal my friend. 🙂

    • Trader, Thanks for passing this along. Sounds like you have me on the right track. I’ve used iwm spy ratio as well today it’s .5815. One thing that strikes me odd is uvxy the keltner channels keep tightening with price dropping which is bearish. Having said that I’ve done good with short term investing so I’d say keep doing what works till it don’t 🙂 Oh and great idea on uvxy haven’t done that.

  4. Closed my SDRL calls for +.45 this morning. Will look to sell another round soon. Also waiting to sell UCO calls. Just have high sell prices on them at the moment.

    • Maybe I need to hit the whiskey early… I posted after getting a text from IB on the close and didn’t read carefully. After checking my acct, half my SDRL calls closed for +.55. I remembered the wrong sell price.

      On second thought, where the hell is that whiskey… I’m gonna need it as my daughter’s 5th birthday party is today so I get to go home to 7 sugar filled 5 year olds rampaging through the house. I fully expect to be deaf by 7.

      • Have you thought of sharing the whiskey with the kids? A couple of shots and they should go right to sleep. Might run this one by the wife and make sure she is good with it. Enjoy the moment. They grow up way too fast.

      • She has been gone all week at Grandma’s so the wife and I have been having fun getting and making gifts as well as getting the house ready. It should be a fun party. I have ear plugs which I’m not sure work at the decibel range that young girls squeal at, but I’m gonna give them a shot. 🙂

      • Hey w_seattle have fun at your daughter’s birthday party. There fun at that age and what great for me is I can load my 5 year old nephew up with sugar and send him home. I bought my nephew a gun this month for his 5th birthday and I shot my wife with it 🙂

  5. Out of FEYE from yesterday for plus 83 2.7%. Reaching some short term resistance and didn’t want to risk the profit over a long weekend.

  6. sold my CSIQ today for 35.53. With option premiums earned, 17+% gain since 6-30.

    I like the stock LT but alot of the Chinese PV co.s have had some pullbacks so I wanted to lock in the gains. May buy again if there is a pullback down to around 32.

  7. Bought more UVXY for 24.50. this may be a day trade

    • Interesting, I really thought IVXY would spike before the weekend especially with all the russia invasion talk. Don’t want to hold so I sold at 24.70.

      Tiny gain.

  8. Trader and Ed , I am looking at BRDR as I think they have a interesting niche. It has been weak since there IPO even though last earnings report was good. Question is do you see it testing lows again from here?

    • bobb, not a lot of history to work with. From what I can see technicals are weak on the daily chart. Looks like there might be support around 12.50. Based on the last few days of price action it could be bottoming here. Hard to tell until it shows something to the upside. If you like the story, maybe a partial position. Until there is more history to work with it is difficult to tell where the support and resistance will be.

  9. Looks like my 18.50 GTAT options and 6.00 PLUG options will expire worthless. Probably sell weeklies again next week.

    • My 18.5 call should have expired as well so it reduced my cost 2.3%. I want sell calls, right now 18 and 18.5 strike price are weak and will loose a dime over the long weekend looking at the greeks.

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