Tuesday, January 26, 2010

1/26 Morningline

The blue chip stocks (SPY) are trading near the bottom of the range set by Friday's large decline.

The blue chips have fallen half the distance of the rise that began in November. SPY set a low of $103.08 on Nov. 2 and showed a steady daily increase up to a high of $115.14 on Jan. 19, and then fell to the current level.

As a result, the blue chips for a third day were paused at a key level, called a 50 percent Fibonacci retracement. . . .


A 50 percent retracement is a Fibonacci level, a point at which prices tend to pause and possibly reverse. If SPY moves through the 50 percent line, then the next Fibonacci level is a 61.8 percent decline, or about $107.50.

Bob Prechter, who quite literally wrote the book on Fibonacci levels and Elliott Waves, has tons of material on his website, www.elliottwave.com.

Investopedia also has a fine article about Fib retracements.

There are no new potentials pps signals on the indicators, currencies or my holdings in early trading.



Let's run the numbers.

Indicators, at about 10 a.m. Eastern:
  • Blue chip stocks (SPY) is trading at $109.20, entered bear mode at close on Jan. 21 (at $111.70)
  • Fear index or volatility (VIX) 25.89, bull (bearish for stocks), Jan.21 (22.27)
  • Treasury long bonds (TLT) $91.90, bull, Jan. 12 ($90.32)
  • Corporate junk bonds (JNK) $38.83, bear, Jan. 13 ($39.85)
  • Gold (GLD) $107.13, bear, Jan. 12 ($110.49)
  • Oil (USO) $36.43, bear, Jan. 12, ($39.63)
Forex currency pairs:
  • Dollars per euro (EUR/USD) $1.4054, bull, Jan. 11 ($1.4512)
  • Yen per dollar (USD/JPY) ¥90.25, bear, Jan. 12 (90.97)
Stock options holdings, February expiry:
  • CVS, iron condor (p29/-p31/-c34/c36) $33.03, bull, Jan. 21 ($33.24)
  • ERTS, iron condor (p15/-p16/-c18/c19)  $16.77, bear, Jan. 22 ($16.27)
  • PALM, covered call (s/-c13)  $11.27, bear, Jan. 22 ($11.93)
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Topics:
S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, gold, precious metals, oil, petroleum, CVS, pharmacies, drugs Electronic Arts games Palm smartphone Pixi Pri.

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