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)
- Dollars per euro (EUR/USD) $1.4054, bull, Jan. 11 ($1.4512)
- Yen per dollar (USD/JPY) ¥90.25, bear, Jan. 12 (90.97)
- 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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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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