Wednesday, March 31, 2010

4/1 Almanac

Econ: The Manufacturing index and weekly jobless claims.
On Thursday, April 1, there are 16 trading days left before April options expire, 51 the May and 79 the June.

On the jump, market stats, mediawatch, rules, econ reports, portfolio and a good book...

3/31 Watchlist

Blue-chip stocks  (SPY) are trading in-range.
Neither Treasury long bond (TLT), nor oil (USO) nor gold (GLD) has done much since the morning's gap up.

High-yield corporate debt (JNK) is showing a psar bear signal while trading downa bit from yesterday's range, but very narrowly. With an adx of 17, JNK is by the book prone to whipsaws.

In forex, USD/JPY is trading higher; EUR/USD within range.

3/31 Unanalyzed

Lots of counter-trend bear reversals in my scan today.

Also, many psar signals that didn't make the cut because, by my rules, I've now moved on to May options, which expire May 21.

BBY bear signal

Best Buy Inc. (BBY), the tech and media big box store, is showing a psar bear signal today on the third day of decline.
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BBY $42.55

The macd and the sto are showing bearish signs. The pps remains in bull mode.

The bear signal comes in the midst of a year-long sideways trend. In the shorter term, it runs counter to an upward move that began Feb. 12.

The break came after earnings unsettled traders.

DIA bear signal

The exchange-traded fund that tracks that Dow Jones Industrial Average, DIA, is showing a psar bear signal today.
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DIA $108.92

The adx is at 30, reflecting the run-up from $98.36 on Feb. 5 to $109.53 on March 25. The current signal is counter-trend and therefore, suspect.

The macd and sto are showing bear signs; the pps remains in bull mode.

CHF Signals

I have from time to time heard talk of "perfidious Albion", but sure Albion cannot hold a candle to the inconstant Swiss.
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GBP/CHF SFr.1.5958
USD/CHF Sfr.1.0527

The Swiss Franc forex currency pairs with the U.S. dollar and British pound are showing fresh psar signals, in the case of the dollar (USD/CHF) ending a five-day running of the psar bulls and in the case of the pound (GBP/CHF), a bull signal ending an eight-day bear spree.

USO bull signal

The exchange-traded fund that tracks crude oil, USO, gapped higher at the open and is showing a psar bull signal. The pps went into bull mode two days earlier.

The 1.1% gap puts USO at a reversal point that has been touched six times previously in the past three months.
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USO $40.41

With an adx of 14, USO must count as a weakly trending stock prone to whipsaws, and the three-month chart shows two psar signals lasting only three days each, and one lasting two days.

So trader beware!

3/31 FNM Watch

Fannie Mae (FNM) continued to show lower highs and lower lows for a second straight day. The low so far today has been $1.04.

Volume was down for the fourth straight day.

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FNM $1.04

The stock appears to be tracing out a pennant, a pattern that indicates a continuation in the upward move in the price that culminated on March 9 at $1.17.

3/31 Morningline

U.S. Treasury 20- and 30-year bonds (TLT) gapped up by 0.4% at the open, suggesting that traders don't expect the Fed to tighten credit any time soon. A rise in long-bond prices means an expectation of lower yields.

Blue chip stocks (SPY) were trading at the lower end of yesterday's range. Crude oil (USO) also gapped higher and showed a new psar bull signal. Gold (GLD) also gapped higher.

Tuesday, March 30, 2010

3/31 Almanac

Employment: The preview edges out main event.

On Wednesday, March 31, there are 17 trading days left before April options expire, 52 the May and 80 the June.

On the jump, market stats, mediawatch, rules, econ reports, portfolio and a good book...

3/30 Watchlist

The market so far today has sat like a stagnant pond filled with frogs sunning themselves on rotting logs and lazy dragonflies . . .

Oh, to heck with it. In a market this boring, I lack the energy for even an overdrawn simile.

Very narrow trading ranges on the indicators, except for TLT. The Treasury long-bonds etf set a low on the three-month chart, and has risen, covering 0.7% low to high. This is a significant break a six-day decline.

How to calculate percent change

More often that I would expect, I run across people who don't use percentages when looking at the charts.

Like a guy the other day on the Yahoo! Finance message board for FNM who was sneering something along the lines of, "Oh you idiots. This turkey isn't going to move by more than a penny."

Well, sometimes a penny is a lot.

3/30 Unanalyzed

The avoidance of the period close to earnings is in my rules, but not everyone agrees. I'm a base hits sort of  player. If I can get on first, I'm happy. Other traders go for home runs, and that style will seek out the weeks before an earnings announcement because that's when the surprises happen.

AUD/CAD and AUD/USD Bull Signals

Two Australian dollar forex currency pairs are showing a psar bull signal: The U.S. AUD/USD pair and its Canadian counterpart, the AUD/CAD pair.

Both have been trading sideways since Febuary.

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AUD/CAD C$0.9360
AUD/USD $0.9182

Both are showing low adx numbers, indicating very week trends with high whipsaw probabilities. The adx is 12 for AUD/USD, and 13 for AUD/CAD.

EEM Bull Signal

The emerging markets etf, EEM, displayed a psar bull signal this morning, a day after the pps flashed bull. The macd also moved above the zero line, and the sto rose into overbought territory.
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EEM $42.01

With an adx of 13, EEM by the book is a perfect candidate for whipsaws. The three-month daily chart, however, shows no evidence of whippiness. The shortest psar signal chain lasted seven days.

FNM Watch

Fannie Mae (FNM) opened below the 20-day moving average this morning on teh fourth day after major signallers began flashing "bear".

The open was equal to the prior day's close, and thereafter FNM declined by 0.9% high to low before pulling back.
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FNM $1.05

Volume on Monday was 11 million, about a third the number of shares traded Friday and less than a fourth of Thursday's action. Peak volume in the last three months was nearly 102 million shares on March 9.

3/30 Morningline

The emerging markets exchange-traded fund (EEM) opened just above the top of Monday's range and is displaying a psar bull signal. A pps bull signal showed yesterday.

The signals come amid a narrow sideways trend -- $40.50 to $42 -- that has began March 10.
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SPY $117.75
TLT $88.32
At 9:55 a.m. Eastern

Blue-chip stocks (SPY) is trading narrowly at the top of Monday's range. Treasury long-term bonds (TLT) opened down for the seventh consecutive trading day.

Monday, March 29, 2010

3/30 Almanac

Home prices: Rising or not, cold or hot? Consumers: Confident or scared, or just struggling too hard to care?

On Tuesday, March 30, there are 18 trading days left before April options expire, 53 the May and 81 the June.

On the jump, market stats, mediawatch, rules, econ reports, portfolio and a good book...

3/29 Watchlist

Today's market is a lesson in classical physics: An equity at rest remains at rest.

The indicators I follow are barely changed from the morning. The Watchlist corporate shares and exchange-traded funds, with a few exceptions, are also sunk into a deep torpor.

Forex was the exception, with a success, a wash and a failure recorded on bearish currency pairs.

The Watchlist:

3/29 Unanalyzed

Aside from DWA, which I wrote about separately, there were 10 corporate stocks and exchange-traded funds that showed signals but didn't make the cut under my rules.

Here's the list of what and why:

DWA bear gap

Dreamworks Animation SKG Inc. (DWA) gapped down sharply at the open on the third day of a decline and showed a new psar bear signal.

Dreamworks' new film, "How to Train Your Dragon", got a C-minus on its opening weekend revenues.

Analysts, as is their nature, quickly piled on, downgrading after the movement.
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DWA $38.90

DWA breaks my rules for a trade.

EUR/CHF psar bull signal

The euro-Swiss franc (EUR/CHF) Forex currency pair is showing a psar bull signal on a price increase that covered 0.7% low to high before pulling back.

The pair has been on long slide from mid-October 2007, with the usual ups and downs. Most recently the price dropped precipitously over nine days, lossing 2.7% of its long value.
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EUR/CHF SFr. 1.4316

So bull signal is, to say the least, counter trend. And the pair is no stranger to whipsaws in times of change.

FNM Watch

Fannie Mae (FNM) opened within Friday's trading range with a downward move that has covered 1.9% high to low so far today.

Today's low, at $106, is at the same price as Friday's close.

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FNM $1.08

The price pattern could be interpreted as a pennant -- a continuation pattern -- with March 9 rise from 99¢ to $1.17 as the base. Continuation in this case would a continuation up, I would think, something that flies in the face of all the signals except the sto.

3/29 Morningline

Gold (GLD), oil (USO) and emerging markets (EEM) are showing pps bull signals this morning, six days after the pps and the psar both flashed bear.

All three have low adx numbers ranging from 11 to 13 and so stand in whipsaw heaven. That level of adx means that there is no strong trend and the signals have credibility problems.

The euro opened higher against the dollar (EUR/USD) with an adx of 25 indicating a moderate trend. The 5-day moving average, which I use as a short-term trend measure, is down but moderating to sideways.

Sunday, March 28, 2010

New Look(s)

Blogger, which provides the infrastructure for the Private Trader market letter, has improved their design selections, and this week I'll be working with the new choices to improve the look and feel.

One immediate benefit of  the design tool is the ability to produce three-column designs, which has allowed me to move the search box and the index to a more accessible position.

Friday, March 26, 2010

3/29 Almanac

On Monday, March 29, there are 19 trading days left before April options expire, 54 the May and 82 the June.

Blue chip stocks (SPY) closed the latest regular session at $116.58, down 0.06% from the prior close.


SPY closed within today's DeMark pivot points, trading above by 1¢ during the day. The next DeMark pivots are $115.70/$117.00.


In total, 3.3 billion shares were traded on the three major U.S. stock exchanges

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/26 Watchlist

It has proven, in the main, to be a day for trading in the established range.

The Treasury long-term bonds (TLT) rose 0.7% low to high before pulling back but stayed within Thursday's bounds.

The one breakout was gold (GLD), which traversed 1.5% low to high, breaking out of a two-day range to the level where it stood last Tuesday.

The Watchlist:

Unanalyzed

Today was not a signalful day.

Here are the issues with new psar signals that I've turned down for the Watchlist, and why:

JNJ psar bear signal

Johnson & Johnson (JNJ) is showing a psar bear signal on the third day of a decline.

I'll say up front I don't like it as a directional play. The trend in JNJ has been sideways in a $62 to $65 range since last December, and the adx reflects that, with a score of 17.

I could see JNJ as an iron condor. The April position provides a decent premium.
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JNJ $64.57

The one gotcha is earnings, which are schedule for before the market open on April 20.

MDZ psar bear signal

MDS Co. (MDZ) isn't one of the household names that regularly pops up on my scans. MDZ showed a psar bear signal today with a sharp drop unmotivated by any news report.

MDZ provides materials and services to companies that are developing drugs and therapies in medicine. I think of it as a research infrastructure company.
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MDZ $8.27

The stock has traversed 3.2% high to low so far today with volume over the past week running three times and more the normal level.

EUR/CAD psar bull signal

The euro and Canadian dollar  (EUR/CAD) showed a psar bull signal on a sharp rise. The Forex currency pair has traversed 1.6% low to high so far today.

The adx is at 48, a level in theory not much prone to whipsaws. However, a glance at the three month chart shows occasional bouts of whippiness: a Three-day whipsaw to the bull side in late February, six days in late January, three days in mid-January and one day in early January.
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EUR/CAD 1.3787

3/26 Morningline

Every trading day opens with a question.

For the news inclined, it might be, "Do I care that GDP was was revised downward, suggesting a less robust economy? Or consumer confidence? Or weekly jobless claims? What are the rumors?"

For the fundamentalist, it's likely to be, "What's the forward earnings projection? What are the analysts saying? What's the trend in sales and earnings, and can it be sustained?"
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SPY $117.07
TLT $88.72
At 10:03 a.m. Eastern

For technical traders like me, it's much simpler. There are two questions I ask: "Where's the floor?", and "Where's the ceiling?" On the foundation those questions  the market day is built.

Thursday, March 25, 2010

The case for FNM

There's a case to be made for trading Fannie Mae (FNM).

Like most traders, I consider anything under $15 to be a bit sketchy, and anything under $2 is in the realm of mad penny stock dreams.

Yet it is in that dreamland where the mortgage giant. No, behemoth. No, colossus, FNM now stands. Just a couple of years ago it was a $70 stock. Today it closed at $1.06.
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FNM $1.06

FNM showed a psar bear signal today after remaining in bull mode from Feb. 10 onward. The next downside reversal level is at $1.03, and below that, 0.96 and 0.91. So the signals now point toward a bearish stance.

3/26 Almanac

On Thursday, March 26, there are 22 trading days left before April options expire, 57 the May and 85 the June.
Blue chip stocks (SPY) closed the latest regular session at $116.65, down 0.2% from the prior close.


SPY closed within today's DeMark pivot points but traded above for awhile by as much as $1.03. The next DeMark pivots are $115.75/$117.41.


In total, 3. billion shares were traded on the three major U.S. stock exchanges, up 15.2% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/25 Watchlist

The S&P 500 exchange-traded fund -- SPY -- retreated below the high set on Tuesday, transforming a solid break-out into just another wannabe.

SPY is trading at about $117.20. The reversal level, $117.51, for much of the morning acted as a reversal level where prices bounced back up. That changed a little after 2 p.m. Eastern, and $117.51 became a ceiling under whose loving shelter SPY huddled ever lower.

Treasury long-term bonds (TLT) took a walk on the downside, ignoring happy low-rates talk from Fed Chairman Ben Bernanke. At the lowest point, TLT overshot the reversal level of Feb. 18, hitting $88.37 before retreat back up.

Dividend Plays JNK, AOD

I've opened positions on JNK and AOD as dividend plays. AOD's foreign exposure is considerable.

I had sold both earlier in the month upon pauses or signals.

I bought back in to JNK at $39.71 after the price broke above a 12-trading-day sideways trend.

Unanalyzed: Take my money, please!

It's not easy to find trades during earnings season if earnings surprises scare you, as a trader, half to death.

That's the sort of trader I am, and today's list shows the consequences of that, as signal after signal is disqualified from the Watchlist because earnings are too close.

AMZN psar bull signal

Amazon.com (AMZN), the online books-and-whatever seller, is showing a psar bull signal with a price rise so far today that has traversed 4.8% and hit a high of $135.37.

There's no obvious news to account for the move. The new signal comes after a three-day whipsaw.
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AMZN $134.46

The macd move above the zero line and the sto into overbought territory are new with today's price leap.

3/25 Morningline

Blue chip stocks (SPY) opened above the past week's trading range, breaking through the $117.51 downturn reversal.

If SPY begins to treat that level as an upturn reversal point, as it was about 10 minutes into trading, then conditions will be in place for a run up to the next reversal level, $121.91.
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SPY $117.44
TLT $89.14
At 9:55 a.m. Eastern

The long-term Treasury bonds (TLT) lay morosely at the bottom of yesterday's range of sharp decline, like a Raggedy Ann doll tossed carelessly in the closet by an child now older and moving on to other toys.

Wednesday, March 24, 2010

3/25 Almanac

On Thursday, March 25, there are 23 trading days left before April options expire, 58 the May and 86 the June.
Blue chip stocks (SPY) closed the latest regular session at $116.84, down 0.5% from the prior close.

SPY closed within today's DeMark pivot points but traded below for awhile by $1.32. The next DeMark pivots are $115.29/$117.14.

In total, 3.3 billion shares were traded on the three major U.S. stock exchanges, unchanged from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/24 Watchlist

SPY, tracking the S&P 500,  is trading narrowly at the midpoint of yesterday's range, with less than a dime's worth of difference between the opening price and the current price.

TLT, tracking 20- and 30-year Treasury bonds, having gapped down this morning, has bounced off of a reversal level set in mid-February.

The big winner of the day is the dollar: Up 2.1% low to high against the yen (USD/JPY). Up 1.4% against the euro (EUR/USD).

The media chit-chat credits fear of the Greek Eurozone credit crisis (once again, ad infinitum) for the dollar's strength. Which certainly goes nowhere to explain the greater rise against the yen.


Unanalyzed

The signal today that I'm picking up in my scan are very broadly based. So, for the general stock indexes, I've rolled QQQQ, IWF and IWM into my SPY analysis. And I've placed two bank index, KBE and BKX, into my XLF analysis.

Here's a list of the issues screened that I chose not to analyze, and why:

XLF psar bull signal

The exchange-traded fund that tracks the financial sector, XLF, shows a similar psar signal pattern to SPY -- a two-day sojourn in bearland before whipping back into bull mode.

The bull signal is with the trend that has held in force since Feb. 5. However, the 5-day moving average has turned flat, the macd has been falling since March 12, with a one-day respite, and the sto, in overbought territory, is declining toward neutrality.
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XLF $15.90

The adx, at 28, is just below the point where whipsaws are deemed unlikely.

SPY psar bull signal

A quick look the new bull signal on SPY that kicked in late yesteday.

The signal ends a two-day bear whipsaw (which was counter-trend). The adx, at 26, is at a level that lies between whipsaw junky and directional saint.
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SPY $116.75

The recent history of SPY is too well known to require a long explanation.

USD psar signals against GBP, CHF

The GBP/USD and USD/CHF currency pairs are showing new psar signals this morning.

The GBP/USD bear signal comes after a sideways move in psar bull mode that lasted eight trading days. Today's bear signal is in line with the longer-term trend of decline that began on Jan. 19, at 1.6457.

3/24 Morningline

Treasury long-term bonds (TLT) gapped down at the open by 1.2%.

News reports pinned the move on disappointment over the 2-year bond auction held Tuesday.

Some said the gap was due to concern over the amount of debt the Feds would have to issue (surely not fact that bond traders only discovered today!).
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SPY $117.21
TLT $89.01
At 10:14 a.m. Eastern

But, as Master Yoda would have said had he been a private trader, "Ask not. Do or do not. There is no ask." As traders, we care nothing for motivation, only for consequences.

Opened NLY shares for dividends

I've re-opened my position in NLY as a dividend play.

I had closed my position on March 19 after a fairly sharp price reversal the prior day. That turned out to be a very smart move -- on March 23 the company announced it was reducing its dividend.
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NLY $18.18

Getting out allowed me to avoid a 3% gap down (36% annualized), and re-enter at a lower price.

Tuesday, March 23, 2010

Opened XLE iron condor

I've opened an April iron condor on XLE, with maximum profit at expiration between $56 and $59.

The stock was trading at $57.35 at the time the trade was executed, for a 44¢ premium credit.

The March 17 analysis that underlies the trade.

The position structure is: p55/-p56/-c59/c60

Disclaimer
Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.


No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

3/24 Almanac

On Wednesday, March 24, there are 24 trading days left before April options expire, 59 the May and 87 the June.
Blue chip stocks (SPY) closed the latest regular session at $117.41, up 0.7% from the prior close.

SPY closed within today's DeMark pivot points but traded above for awhile by 2¢. The next DeMark pivots are $116.90/$118.03.

In total, 3.3 billion shares were traded on the three major U.S. stock exchanges, unchanged from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/23 Watchlist

The indicators I follow have barely budged since this morning.

Rather than trying to mitigate boredom, I'll go straight to the Watchlist.

Unanalyzed

Several stocks showed up in my scan but didn't make the grade. Here's a list:

  • CMCSA, bull, earnings too close (4/28)
  • GS, bear, countertrend
  • JBL, bull, earnings announced today
  • KBH, bear, earnings announced today
  • MTG, bull, earnings too close (4/29)
  • NLY, bear, company announced lower dividend
  • ONNN, bull, low adx (12)

GNW psar bull signal

The psar bull signal on Genworth Financial Inc. (GNW) holds some promise, but also a bushel basket of disappointment.

The stock was on an uptrend from early January to late February, when it softly moderated into the present sideways trend.

Despite a high adx of 35, the rise looks weak on the chart, with some psar whippiness. Moreover, the macd is in bear mode, although it is rising, shallowly, toward the zero line.
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GNW $16.38

It's in the area of price levels that the promise and disappointment lie.

DIS psar bull signal

The Disney Co. (DIS) is showing a psar bull signal, after a one-day bear whipsaw. The ADX is 40, so a bull whipsaw is unlikely.

The psar signal comes after an uptrend that began Jan. 28 leveled out beginning March 11.
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DIS $34.03

In a broader view, DIS has been rising for the past year and has moved back to the top of a long-running sideways trend that ran throughout 2007 and ended with market break of the Autumn of '08.

Opened MGM iron condor

I've opened an iron condor for April on MGM, with maximum profit in the range $10 to $12. The shares were trading at $12.31 when I opened the position for a premium credit of 46¢

The structure of the position is p9/-p10/-c12/c13.

CSCO psar bull signal

The networking company Cisco Systems (CSCO) is showing a psar bull signal today after a one-day bear whipsaw. (This sort of reversal seems to be the Theme of the Day.)
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CSCO $26.44

CSCO shows a string adx of 40 reflecting its price rise from Jan. 28. A break above the current level would bring it into reversal zones in the $27s, $28s and $29s before getting a clear shot at the $32-$34 range.

Earnings are May 10 are far enough from the April expiration date to be within my zone of comfort.

XLY psar bull signal

The exchange-traded fund that tracks the discretionary consumer spending sector, XLY, is behaving (no surprise) as a mirror image of the retail sector, XRT, which I analyzed earlier today.
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XLY $32.58

The points in common: Psar bull signal after a one-day bear whipsaw, high adx (37 in XLY's case), macd in bull mode but declining toward the zero line, uptrend that began Feb. 5, heavy congrestion to the upside.

XRT psar bull signal

The retail sector exchange-traded fund (XRT) show a psar bull signal this morning, with the price at $41.32, at the top of yesterday's broad trading range.

By the book, there's a lot to like about this signal. The strong adx, at 47, suggests little likelihood of bullish whipsaws. The fact that this bull signal comes after a one-day bear whipsaw reinforces that conclusion. The stock has been trending upward since Feb. 5.
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XRT $41.32

Yet, there are also grounds for caution.

The uptrend is old. A fine wine or whiskey may improve with age; a stock-market trend, rarely so. After so many weeks of soaring, XRT is overdue for a downward swoop.

3/23 Morningline

Indicators spanning the range of human aspiration from stocks and fear to gold, oil and currency speculation were unmoving this morning. Each traded at the open within the ranges set over a period of several days.

Change, I can believe in it. No change, I can believe in that as well, but it's hard to turn a profit on neutrality.
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SPY $116.56
TLT $91.08
At 9:56 a.m. Eastern

Blue chip stocks (SPY)) opened within today's DeMark pivots range of $115.92 to $117.48. A close above or below the range would constitute, respectively, a bull signal or a bear signal.

Monday, March 22, 2010

3/23 Almanac

On Tuesday, March 23, there are 25 trading days left before April options expire, 60 the May and 88 the June.

Blue chip stocks (SPY) closed the latest regular session at $116.59, up 0.05% from the prior close. The DeMark pivot points for SPY are $115.92/$117.48.

In total, 3.3 billion shares were traded on the three major U.S. stock exchanges.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/22 Watchlist

The exchange traded fund that tracks oil, USO, is rising sharply today after a morning fall. Altogether USO has traversed 3.3%, low to high, so far today.

All other indicators, except for gold (GLD) were trading within Friday's range. GLD was down.

Media reports (Dow Jones) credited the USO rise to investors moving money from less risky to more risky vehicles because stocks are up.

Unanalyzed Part Two

Earnings was the main barrier to stocks making the cut in my analysis of the high-volume corporate issues.

I hate news surprises. I've been burned to a crisp by news surprises, most recently by PALM in the midst of a covered call.

One way to lessen the chance of a news surprise is to trade well out from earnings. My rule of thumb is for earnings to be at least two weeks past the options expiration date, and maybe three if I'm feeling nervous, as I am these days.

MGM psar bear signal

MGM Mirage (MGM) is showing a psar bear signal with a very strong intra-day uptrend traversing 9% low to high. The stock is trading at $12.28.

The stock has been trading sideways since mid-January, and today's upward move stopped and pulled back at the level of the Jan. 14 close, the day the stock set a high of $12.30 in a broader sideways movement that began in October 2009.
trendadxpsarppsmacdmacd
trend
stosto
trend
MGM $12.30

The glance shows a pretty mixed technical picture, with the one-day price raise and most technicals at odds with the psar.

Unanalyzed Part One

A scan of the exchange-traded funds shows this morning's wave of psar bear signals to be pervasive across the market sectors.

I find them all to be wanting, either because of a low adx or on grounds that a decline goes against the trend.

I've found that trading with the trend gives the best odds of success.

Indicator Signals

Four of my indicators are showing psar bear signals this morning, but none are credible. Those exchange-traded funds all have low adx levels, which means that they're prone to whipsaws and don't meet my trading rules.
For a psar signal to be tradable, I like to see a psar of 30 or above.

The etfs and their adx levels:

3/22 Morningline

For blue chip stocks, it was a trampoline morning. SPY was trading at around Friday's close after opening lower and then bouncing back up, with the psar in bear mode and a flickering pps bear signal that, like the Cheshire cat in Alice, couldn't make up it's mind whether it wanted to be visible or not.

Treasury long-term bonds (TLT) opened above Friday's range and was trading near the high attained on Wednesday.
trendadxpsarppsmacdmacd
trend
stosto
trend
SPY $115.91
TLT $91.42

High-yield corporate bonds (JNK) and emerging markets (EEM) also opened lower and then bounced back into range.

Gold (GLD), oil (USO) and the EUR/USD currency pair opened below Friday's range and stayed in the cellar. The USD/JPY stayed within the nine-trading-day range.

Friday, March 19, 2010

3/22 Almanac

On Monday, March 22, there are 26 trading days left before April options expire, 61 the May and 89 the June.
Blue chip stocks (SPY) closed the latest regular session at $115.97, down 0.05% from the prior close. The DeMark pivot points for SPY are $114.86/$116.63.

In total, 4.9 billion shares were traded on the three major U.S. stock exchanges.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/19 Watchlist

The way days like today are supposed to be written up is like this: Blue chip stocks plummeted today amid fears of (fill in the blank: Greece? China? Commodities? Health care reform?).
Well, SPY is trading lower, but a look at the very short term chart shows the exchange-traded fund, which tracks the S&P 500, as trading very much in a sideways range, between say $115.75 and $116, with a few breakouts at either end of the range.

So, Apocalypse Now it is not. After three up days amid a 27 trading day upswing that swung up by 12.3%, it's not too shocking to see a pause. Today's low is within the range of trading set last Tuesday.

I'm not exactly singing, "Don't worry be happy," but I am saying, "Get a grip, man! It's not as bad as it seems!!".

Treasury long-term bonds (TLT) are up and trading within the range of the two prior days. Gold (GLD) is showing a sharpish decline, but is trading at Monday's level. Oil (USO), which I think will be deemed a culprit in the market stories, is at the levels it saw Monday and Tuesday.

Unanalyzed Part Deux

Many signals on the corporate stocks today, most of which don't meet my criteria.

My reasons usually come in these categories:
  • The movement was due to news or analyst comment
  • It was against the trend
  • The stock is whipsaw-prone with a low adx
  • Earnings come before or shortly after April options expire.
Here's a list of those that didn't make the grade, and why.

AAPL bear signal

The computing company Apple, AAPL,  is showing a psar bear signal at the end of a week-long sideways trend.

The sto has moved from overbought to neutral -- a bear sign, like paw-prints -- and the macd has declined for seven days toward the zero-line, although it remains in bull territory.
trendadxpsarppsmacdsto
AAPL $222.09

The adx, at 29, is just on the cusp of the lower limit for whipsawlessness. And AAPL, with two whipsaw periods shorter than a week in the last months, can be as whippy as Indiana Jones on a very irritating day.

F bear signal

Ford Motor Co., F, shows a psar bear signal today and is trading 6.8% below yesterday's close.

The signal is confirmed by the sto, which has dropped from overbought to netural, and a declining, though still bullish, macd.
trendadxpsarppsmacdsto
F $13.55  

The adx, at 36, is at a level where whipsaws are unlikely. And in the past three months the shortest psar stretch for F has been six trading days.

KBE bear signal

The exchange-traded fund KBE, which tracks the KBW Bank Index, is showing a psar bear signal with a high adx, backed by a declining bull-territory macd and a sto that today moved from overbought to the neutral zone.
trendadxpsarppsmacdsto
KBE $25.40

I posted earlier to say I would analyze this position. At second glance, I don't like it so much. It's countertrend, and the adx no doubt applies more to the run up from early January rather than a pending run down.

But let's run some levels anyhow.

Unanalyzed Part One

What an interesting day! My scan of the exchange-traded funds finds them all aglow with new signals, a witches brew of change. Quadruple Witching Day indeed!

After a slow start in the indicators I'm seeing SPY, way down, TLT, way up, USO and GLD, way down.

VIX is way up. Are you feeling fearful yet?

EUR/USD, AUD/USD bear signals

New psar bear signals are showing today on two currency pairs.

I mentioned the EUR/USD signal in the Morningline.  The other pair is AUD/USD.

The euro-dollar pair has been trending sideways since February. Today's move still leaves above the low point for that period. The reversal levels are quite congested on the downside.

Closed dividend positions AOD, NLY

I've closed my two dividend-stock holdings, AOD and NLY, on reversals. I've learned with these that it's good to get out early on, although the natural temptation is to stay aboard in order to capture the dividend.

AOD dropped sharply today as the signals turned sour. I sold my shares for $8.90, for a capital gain of 52¢, or 6.2%. Moreover, I got a 12¢ dividend, so the total yield is 64¢, or 7.6%. Not at all bad for a month-long position.

trendadxpsarppsmacdsto
AOD $8.90

NLY also began a decline, although less pronounced than AOD's. The shares went for $18.46, for a capital loss of $1.01, or 5.2%. In six months I held the shares, I collected $1.44 in dividends, so the total yield was 2.2%. Not great, but not awful.

trendadxpsarppsmacdsto
NLY $18.46

3/19 Morningline

Update 10:35 a.m. Eastern:  SPY is on the move, dropping 0.9% high to low so far today. So much for "Sleeping Beauty".  TLT has also picked up some velocity, traversing 0.5% on a rise.




 All was quiet among most indicators at the open, as though the quadruple witching day had cast a spell upon the markets. Although it is quite hard to imagine Wall Street as Sleeping Beauty, no image can go too far in the search for the perfect metaphor.

The big mover was EUR/USD currency pair, as the euro opened at the bottom of yesterday's trading range, and then continued to fall.

Blue chip stocks (SPY) opened down and dropped to the bottom of yesterday's range, traversing 0.4% high to low. Treasury long-term bonds (TLT) opened below yesterday's range and then rose, covering 0.4% low to high.
trendadxpsarppsmacdsto
SPY $116.58
TLT $91.01
The EUR/USD decline marked a breakdown from the range that has held pretty steady for a week. So far today it has traversed 0.7% high to low.

Thursday, March 18, 2010

3/19 Almanac

Friday, March 19, is a quadruple witching day. Hide your children. Keep your pets indoors. Hang garlic over the computer where you trade.

On the Day of Dread there is one trading day left for March options (one fourth of the quadruplicity), 29 the April and 64 the May.

A quadruple witching day is when stock index futures, stock index options, stock options and stock futures all expire.

Blue chip stocks (SPY) closed the latest regular session at $117.04, down 0.05% from the prior close.


In total, 3 billion shares were traded on the three major U.S. stock exchanges, down 6.3% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

Closed WFC iron condor

I've closed the remainder of my WFC March iron condor, for a loss.

The order executed with the stock priced at $30.02. That's 6.8% above the entry price and $1.02 over the top of the maximum profit zone of the iron condor (p26/-p27/-c29/c30).

On the options, the net cost of closing was an 86¢ debit, for a net loss of 40¢, or 46.5%.

Links to when . . .

A sad cautionary tale of misspent youth (or at least misspent trading funds).

Topics: Wells Fargo Bank finance.

3/18 Watchlist

A stellar day for the Watchlist: A resounding success, an excellent success and a qualified success. Music to a trader's ears. Champagne corks are a-poppin'.

My indicators are marking time 90 minutes before market close, with two exceptions:

Gold (GLD) showed a new psar bull signal, but no corresponding price breakout. The adx, at 11, is deep into whipsaw territory.

trendadxpsarppsmacdsto
GLD $110.42

The euro/dollar (EUR/USD) currency pair showed a new pps bear signal with a corresponding decline to the the 20-day moving average. The adx is 21, which is bit of a whippy level, and the sto is nearing the oversold line.

trendadxpsarppsmacdsto
EUR/USD $1.3622

The watchlist:

GME gaps up

Absolutely nothing of interest in my scan of the currencies, exchange-traded funds and corporate shares, except to note that my ex, GME, has gapped up to as high as 11.3% above Wednesday's close.

The move came on the day a fourth-quarter loss was reported, but the company made a lot of happy talk about future potential.

On March 15 I closed a covered call on GME after the price blew past several lower reversal levels, rather than moving up as the technicals had signaled.

3/18 Morningline

I'll be doing something different, and graphical, with the Morningline, beginning today, with the goal of making it easier to take in the state of the signals at a glance. Read on . . .

Blue chip stocks (SPY) opened in the upper half of Wednesday's range, marching in place the first half hour of the session.

Long-term Treasury bonds (TLT) did the same. So did the other indicators in my collection, except the currencies, which moved but kept the spread between the opening price and the current price within Wednesday's trading ranges.

The two blockbuster econ reports of the morning -- the consumer price index and the weekly jobless claims -- could each have come with caveat, "No blocks were busted in the making of this report."
trendadxpsarppsmacdsto
SPY $117.22
TLT $91.47

It was that kind of morning, as quiet and dreary as a small town in western Oklahoma, where dust and tumbleweeds race each other in slow-mo down the otherwise deserted main drag.

Wednesday, March 17, 2010

3/18 Almanac

Thursday, March 18, is 2 days before the last trading day of March options, 30 the April and 65 the May.

Friday is a quadruple witching day, when stock index futures, stock index options, stock options and stock futures all expire. It's definitely not as much fun as drinking green beer on St. Patrick's day.

Blue chip stocks (SPY) closed the latest regular session at $117.10, up 0.6% from the prior close.

In total, 3.2 billion shares were traded on the three major U.S. stock exchanges, up 3.2% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/17 Watchlist

Blue chip stocks (SPY) reached a new high today in the rise that began on Feb. 5. Altogether, SPY has gained 12.3% from the low set on that date.

Long-term Treasury bonds (TLT) stood about where they were at the open, just a bit above Tuesday's trading range. Higher bond prices suggest that traders expect lower interest rates, as they gaze about whispering sotto voce, "I'm sure Ben won't blow. He'll get it right. Won't he?"

High-yield corporate bonds (JNK) are showing a pps bull signal. The psar has been in bull mode since Feb. 22, and the macd from the day before. However, the macd is falling back toward the zero-line, a caution sign.

Closed half of WFC iron condor

I've closed half of my March WFC iron condor position with the stock selling for $30.55, 5.3% above the zone of maximum profit.

The net loss on the options was 51%.

As an iron condor, WFC stayed within the expected range until March 5, when it started easing out. It did so without a lot of commitment, which makes the decision to exit much more difficult.

Opened MCO covered call

I've sold a covered call against my long-standing shares in MCO. The premium on the April call option was 75¢.

I bought the stock a year ago for $29.85. The analysis of this position only is unpromising: A 10¢ loss if the stock closes above $29, and a 75¢ gain if it closes below.

But, there's a history here. I've sold covered calls twice against these shares already, once for $1.96 and again for 70¢. Moreover, MCO pays a dividend, which I've collected four times, for 40.5¢ per share.

ADBE psar bull signal

Adobe Systems (ADBE), the software company that among other things makes it possible for people to read PDF files on their PCs, is showing a psar bull signal after a one-day whipsaw.

The stock has been in an uptrend since Feb. 16 and is showing a strong adx of 29. The macd, having fallen for 11 trading days, is on the cusp of turning up again as it meanders through bull territory. The so is in the neutral zone and rising toward the overbought line, a bullish sign.

XLE psar bull signal

The energy-sector exchange-traded fund XLE is showing a psar bull signal this morning, a whipsaw after two days in bear mode.

I dislike it as a directional trade.

First, there's the whipsaw. A whippy psar is an evil psar. You can put that over your door as a truth for all time.

GBP psar signals

The British pound showed psar signals of strength against the euro and the Swiss franc.

EUR/GBP stood at £0.8976, having traversed 1.2% high to low so far today. Next reversal point at £0.8750. The macd moved into bull mode. The adx showed a strong trend of 36, although it was lessening, suggesting that the number covered the uptrend that ended three days back.

3/17 Morningline

Blue chip stocks (SPY) gapped up, opening 0.3% above Tuesday's close. The latest high -- $116.92 -- stands 1.5% above the prior high set in January prior to the recent 9.2% correction.

Long-term Treasury bonds (TLT) also gapped up by 0.3%. Tuesday's movers -- gold (GLD) and oil (USO) were trading within the prior day's range.

All in all, a happy market. An exuberant market. A market for all seasons, at least so hope the bulls.

The February producers price index released today fell 0.6%, the biggest decline in seven months. In January the index rose by 1.4%, so the net gain is 0.8%.

Tuesday, March 16, 2010

3/17 Almanac

Wednesday, March 17, is 3 days before the last trading day of March options, 31 the April and 66 the May.
Blue chip stocks (SPY) closed the latest regular session at $116.41, up 0.08% from the prior close.

In total, 3.1 billion shares were traded on the three major U.S. stock exchanges, up 10.7% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/16 Watchlist

The FOMC statement, released around 2:15 p.m. Eastern, has been worth 32¢ to blue-chip stocks (SPY). That's only a 0.3% move, from $116.02 up to $116.34. It is a new high in the current price run-up, but all in all, a bit underwhelming.

The dollar saw a bump up against the euro and the yen, but it quickly retraced.

All in all, my indicators came through the experienced unscathed, and barely changed.

The watchlist:

AUD/NZD

The AUD/NZD currency pair is showing pps and macd bear signal as the Australian dollar declines for the third day in a row.

AUD/NZD has traversed -0.9% so far in the U.S. market day.

The psar remains in bull mode, and the sto has moved into oversold territory. The adx is at 26, indicating a middlin' sort of trend.

3/16 Morningline

This morning's trading focused on the value of money, not unexpectedly, with the FOMC meeting today and the rating agency Moody's having raised the possibility of lowering U.S. debt below AAA.
The value-haven gold (GLD) gapped up to 1.6% above Monday's close, moving above the 20-day moving average for the first time in four trading days. This shows a lack of confidence in the dollar's value.

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

The metal is showing a pps bull signal; the psar and macd remain in bear territory, although the macd this morning began rising toward the zero line. The sto moved from oversold to neutral, a bullish sign.

With weakening trending (the adx is 11), signals on GLD are prone to whipsaw at this time.

Monday, March 15, 2010

SPY Chart Talk

Very briefly, SPY succeeded in pushing past the $115.14 reversal point at 2:52 p.m. Eastern, and after testing it twice, walked back up to the higher levels, peaking today at $115.58.

The next higher reversal point is at $115.97.

What all of this tells me is that the markets are in a fairly high degree of uncertainty, what with the FOMC statement on Tuesday, and then with a quadruple witching day on Friday.

Whenever I've tried to trade indecisive markets like this, I've always ended up getting burned, so I'll be in super-cautious mode until the situation become clearer.

3/16 Almanac

Tuesday, March 16, is 4 days before the last trading day of March options, 32 the April and 67 the May.

Blue chip stocks (SPY) closed the latest regular session at $115.49, up 0.03% from the prior close.

In total, 2.8 billion shares were traded on the three major U.S. stock exchanges, down 9.7% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/15 Watchlist

The S&P 500 exchange-traded fund, SPY, continues to trade below the reversal level of $115.14 set in January at the end of a 10-month, 70%+ rise.
SPY had pushed through that level last week, using it as a reversal-upward level. Today, that's all changed, and $115.14 is a reversal-downward level. Once so far SPY tested that level, but fell 3¢ short of attaining it.

Treasury long-term bonds (TLT) continue to trade narrowly in the upper half of Friday's range.

Odds and Ends

Blue chip stocks,  SPY, have dropped below the nearest upturn level of $115.04 and is bouncing down from $114.80 to the upside.

I've decided not to do a morning stock scan this morning, and most likely none on Tuesday, either. I want to see what the FOMC does its interest-rates announcement at 2:15 p.m. Eastern on Tuesday.

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.

Closed GME bull call spread

Just after my "in trouble" post, GME started moving down again, so I lowered my price and got out. Here are the numbers:

Stock at $18.83, down 2.3%

Options at 30¢, down 30%.

Here's the initial analysis.

Here's the position opening.

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


Topic: Gamestop video game retailer

GME in trouble

Bad-boy GME, a March bull call spread, got lost and dropped through two reversal points before pausing just below the second, $18.85.

The stock got bad press from analysts before the open. Earnings will be released on March 18 before the market opens.

So it's important to close this position today, and I'm watching the 133-tick chart to find a decent exit price, based on the price behavior. At this moment $18.83 is acting to block further upward movement, having been tested six times in the last 20 minutes.

Closed GCI covered call

I've bought back my covered call on GCI and sold the stock. The stock began to turn bearish on the chart, with a pps bdar signal, a six-day decline in the macd, and the sto moving in a day from overbought to oversold.

Although the stock is trading 4.5% above the strike price, getting out for a profit seemed to be the better part of wisdom.

Sunday, March 14, 2010

April Covered Calls

With 33 trading days before the April options expire, it's time to think about covered calls.

Today's search turned up fewer candidates than I've seen in the past, and some of them are sort of sketchy; at least they aren't household names.

For this analysis, I'm looking at stocks priced at $20 or less with average volume over 30 days of 1 million shares or more.

I think the rise in stock price since March of last year has moved a lot of shares above my $20 maximum. I could get more possibilities by raising the max price, but I'm reluctant to do that because covered calls are so capital intensive even at the lower prices. Or I could lower the minimum volume to 500,000 shares, which lesses the liquidity but half a mill' is still pretty adequate.

Within that universe, I select like this.

Saturday, March 13, 2010

Changes: Forex expanded, terminology changed, security tightened

I've made some changes that you'll notice this coming week.

You'll see expanded coverage for Forex: 18 currency pairs. In the analysis posts, I'm tossing the terms "support" and "resistance", replacing them with variations on "reversal". I'm also changing how I count days remaining in the life of an option. And to avoid a growing problem with comment spam, I've tightened security so commenters will need to register.

Here are the details:

Friday, March 12, 2010

3/15 Almanac

Monday, March 15, is 4 days before the last trading day of March options, 32 the April and 67 the May.

Blue chip stocks (SPY) closed the latest regular session at $115.46, up 0.01% from the prior close.

In total, 3.1 billion shares were traded on the three major U.S. stock exchanges, down 3.1% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

3/12 Watchlist

The S&P500 exchange-trade fund, SPY, fell to touch support early in the day and then bounced up, never to go there again (so far).

Treasury long-term bonds (TLT) rose by 1% low to high, pausing at resistance set last December.

Not a good day on the Watchlist: One success, two failures, one massive failure and a wash. Items marked with an asterisk are in my portfolio.

In mitigation: The massive failure would be a wash if played as an iron condor, which I suggested was the best course. The success and two of the failures were analyzed before I started factoring in the adx, which is a corrective to avoid whipsaw. And in the case of one failure and the wash, I noted the weak adx readings in the analysis. Also, one of the failures came on a news surprise.

So all in all, I don't feel too despondent.

3/12 Roads not taken

I've chosen not to analyze seven stocks showing psar bull signals. Here's the list and the reasons why.

My underlying principle is that if the reason for the signal is known, then I'm not interested because it's already reflected in the price.

SD psar bull signal

Sandridge Energy (SD), a natural gas exploration company, is showing a psar bull signal and trading 2% above Thursday's close. At $8.17 the stock is trading at a significant resistance level set in early 2009.

The pps and macd moved into bull mode on Thursday, and the sto kicked into overbought territory, a bullish sign until it reverses back into the neutral zone.

EUR/JPY, GBP/JPY, CHF/JPY psar bull signals

Yen psar bull signals all over the Forex map, except for the U.S. dollar, which is in its third day trading in Psar Bullandia, and the Australian dollar, which is in its sixth day.

GBP/USD psar bull signal

In Forex, Cable is showing simultaneous psar, pps and macd bull signals.

The adx at 37, a level that, according to doctrine, means a lesser chance of whipsaws.

However, the adx rose during GBP/USD's decline from mid-January to early March, and is tipping down a bit. So I think the high adx is more of a timelag artifact than anything to do with a retracement of that decline.

3/12 Morningline

Shares in large companies (SPY) opened 0.4% above yesterday's high and then rose a couple of cents to $115.97 before dropping backing back, using the $115.60 level as support on the low-level chart. After that, SPY turned jittery.

SPY moved up to $15.70 as support and then moved down toward resistance at $115.14.

Treasury long-term bonds (TLT) opened in the middle of Thursday's range and stayed their, barely changing from today's initial price.

None of my other indicators showed breakouts (or breakdowns) from yesterday's trading ranges, and the technical signals for all indicators, SPY included, remain as they have been.

Thursday, March 11, 2010

3/12 Almanac

Friday, March 12, is 7 days before March options expire, 35 the April and 70 the May.

Blue chip stocks (SPY) closed the latest regular session at $115.45, up 0.4% from the prior close.


In total, 3.2 billion shares were traded on the three major U.S. stock exchanges, down 11.1% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

SPY Chart Talk

The S&P 500 exchange-traded fund SPY closed decisively above the $115.14 resistance level, suggesting that the uptrend that began in March 2009 at $67.10 has resumed.

SPY opened the day zig-zagging below $114.70 and then made a series of upward runs, beginning around 12:35 p.m. Eastern.

The first charge ran out of steam at $115.03. The second succeeded, closing above resistance at 3:08 p.m.

SPY pierces resistance

The SPY etf has again pierced resistance at $115.14, at 3:08 p.m. Eastern. I'll do a closer examining the low-level chart.

Closed T bull put spread

I've closed my March bull put spread on T with the stock at $25.57, or 1.1% above the entry point.

It cost me a 51-cent debit to buy back the options, so my profit on the trade was 9 cents, or 17.6%.

I had opened the position on Monday, so not bad for four days work.

3/11 Watchlist

The S&P 500 exchange-traded fund, SPY, came within a 6 cents of the Jan. 14 high before motivated sellers overwhelmed the rise. A second run only made it to within a dime.
Today's trading on the low-level chart was a far cry from Wednesday's exuberant push above $115.14, the high set Jan. 14 at the end of a 10-month run up from $67.10.

A successful, persistant push above $115.14 means that the bull market begun in March 2009 still has legs. A drawback from current levels suggests further correction and perhaps even another bearish slide back into the double digits.

The Treasury long-term bonds, TLT, pushed up to cover the area of Monday's downward gap before retreating a bit, this despite a two-day-old psar bear signal.

3/11 Roads not taken

A number of psar signals that I chose not to analyze. Here's the list and the reasons why.

HPQ psar bear signal

The technology company Hewlett-Packard (HPQ) is showing a psar bear signal as the sto moves from overbought territory down into the netural zone.

The macd is in bull mode but has been declining since Feb. 22.

The adx is a bit on the low side -- it stands at 25 -- so I see a somewhat heightened chance of a whipsaw here.

Opened GME bull call spread

I've opened a bull call spread on GME for a 43-cent debit with the stock trading at $19.28.

The vertical debit spread expires after trading on March 19 and is structured as long the $19 strike, short the $20 strike.

The break-even points is $19.43, with a max profit of 0.57 and a max loss of 0.43 (ignoring trading fees).

Earnings are on March 18, so I must exit nimbly.

See my analysis from earlier today.

GME psar bull signal

The video game retailer GameStop Corp. (GME) is showing a credible psar bull signal amid reports that the company might be taken over.

The stock has traversed 7.2% today, low to high, and is trading at about $19.17, a resistance level.

The adx stands at 36, but has been declining since March 2. The sto today moved into overbought territory. The macd is in its fourth trading day in bull mode.

AUD/CAD psar bull signal

The Australian-Canadian dollar currency pair (AUD/CAD) is showing a psar bull signal, accompanied by a pps bull signal.

The macd has been in bull territory since Tuesday, and the sto is in the neutral zone heading up toward the zero line.

Thinking about my WFC iron condor

My March iron condor on WFC is turning sour. With expiry only eight days a way, I need to figure out what to do.

Iron condors have their maximum profit at expiry within a range, and outside of that range the profit drops rapidly into a loss.

In other words, an iron condor has two ways to break the trader's heart.

3/11 Morningline

Blue chip stocks (SPY) and Treasury long-term bonds (TLT) opened in the middle of Wednesday's ranges, as though hung over from that day's excesses.

SPY on Wednesday slightly overshot its high of Jan. 14 but failed to establish that price, $115.14, as a new support level.

Will SPY again attempt to pierce that major resistance and resume the bull market that began in March 2009? Will SPY, despondent, sink back into beardom? Or will it stay put, embracing boredom as the price goes nowhere?

The morning's theme song is from the 1934 Cole Porter: "Anything Goes".

Tech Tool Changes

I'm changing my suite of technical tools by swapping out the Money Flow Index (mfi) and replacing it with the Average Directional Index (adx).

Altogether, I'll be looking at five technical signals to assess stocks. They are:


Wednesday, March 10, 2010

3/11 Almanac

Thursday, March 11, is 8 days before March options expire, 36 the April and 71 the May.

Blue chip stocks (SPY) closed the latest regular session at $114.97, up 0.4% from the prior close.

In total, 3.6 billion shares were traded on the three major U.S. stock exchanges, up 9% from the day before.

On the jump, mediawatch, rules, econ reports, portfolio and a good book...

SPY: The final hour

As shadows lengthened across Wall Street, thoughts turned to home, and traders sought a final if temporary truth in the wandering prices that are the market, the low level chart of blue-chip stocks displayed the terrifying face of the Anti-Borg.

Resistance was anything but futile.

On the 133-tick chart, in the last hour of trading SPY tested the $115.14 resistance level 11 times, made it as high as $115.16, but then drew back.

3/10 Watchlist

The exchange traded fund SPY, which tracks the S&P 500, is trading at $115.14 at this moment (2:28 p.m. Eastern), exactly the level of the Jan. 14 high that ended, for the moment, a 10-month rise in the market.

The price pierced the $115.14 resistance level several times during the day, peaking at $115.28 at 11:03 a.m. Each time it drew back to and below resistance.

I'm reading this book, and it is so excellent.

At no point so far today that I can discern did $115.14 become a support level. And that's really the key to judging today's action, for $115.14 must be transformed from resistance to support for today's move to truly count as a higher high and resumption of the bull market that began in March 2009.

What SPY needed was some alchemy to change resistance lead into support gold.