3/15 Morningline

The S&P 500 exchange-traded fund, SPY, touched 10¢ below a major upturn level at $115.04, and then did exactly that: turned up.

Shares are trading narrowly at the lower end of Friday's range. The new higher high is $115.97, and SPY must pierce that to be counted as resuming its upward much.

Treasury long-term bonds (TLT) are trading, also narrowly, in the upper half of Friday's range. The Federal Open Market Committee, the nation's rate-setting body, meets on Tuesday, so I would expect bonds and stocks to be marking time ahead of the Fed announcement at 2:15 p.m. Eastern.

It has been an exciting morning, so far, for my March options holdings. I've closed a covered call on GCI for a profit, and a  bull call spread on GME for a loss.

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Abbreviations:
psar - Parabolic Stop and Reverse, adx - Average Directional Index, pps - Person's Proprietary Signal, ma20 - 20-day moving average, macd - Moving Average Convergence-Divergence, mfi - Money Flow Index, sto - Fast Stochastic

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The GME loss was classic bad news -- an analyst lowered ratings, and the price had begun to decline at the end of last week. So it counts as a news surprise.

How to defend against such upleasantness? Aside from not trading, I mean.

One is to ensure all positions are well out from earnings announcements; GME's earnings are just a couple of days away. Surprises -- no surprise here -- tend to be focused on the earnings release dates.

Another is to trade only exchange-traded funds with a broad list of component stocks. Such a SPY or QQQQ. In those cases negative news regarding one stock tends to get buried by all the other, news-free stocks. Of course, sometimes the trader really do want to have surprises. If it's a directional trade, then an earnings surprise can produce huge profits. At the end it comes down to the trader's appetite for risk. To the numbers, at about 10:35 a.m. Eastern . . . Indicators:

New this week, from the author of Liar's Poker, a look inside the Doomsday Machine.

• Blue chip stocks etf (SPY) is trading at $115.16, in psar bull mode with an adx of 23, entered at close on Feb. 11 (at $108.13)
• Fear index or volatility (VIX) 18.35, bear/11 (bullish for stocks), Feb. 17 (21.72) The sto has moved out of overbought territory into the neutral zone, a bearish sign for the VIX (bullish for stocks).
• Treasury long bonds (TLT) $89.82, bear/11, March 10 ($89.59)
• Corporate junk bonds (JNK) $39.49, bull/28, Feb. 22 ($38.91) 
• Emerging markets (EEM) $41.10, bull/19, Feb. 3 ($39.40) The sto has moved from overbought to neutral, a bearish sign.
• Gold (GLD) $108.41, bear/12, March 9 ($109.72)
• Oil (USO) $38.90, bull/19, Feb. 16, ($37.20) A psar bull signal showing today.

Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3701, bull/24, March 3 ($1.3696) Sto moved from overbought to neutral.
• Yen per dollar (USD/JPY) ¥90.71, bull/14, March 10 (¥90.51)

Stock option holdings, March expiry:

• AKS, iron condor (p19/-p20/-c25/c26), $22.94, bull/14, March 3 ($22.81) Pps bear signal on Friday.
• WFC, iron condor (p26/-p27/-c29/c30), $29.63, bull/22, Feb. 22 ($28.01)

Zombies:

• MCO, long shares, $28.40, bull/14, March 5 ($28.11) 
• PALM, long shares, $5.62, bear/42, Feb. 18 ($9.62)
  

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Topics: S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, emerging markets, gold, precious metals, oil, petroleum, AK Steel Holding, Alpine Total Dynamic Dividend fund, Moodys bond rating, Annaly Capital Management real estate REIT mortgage-backed securities, Palm smartphone Pixi Pri,  Wells Fargo banking financial.