Thursday, July 29, 2010

NLY Watch

The high-yield real-estate investment trust Annaly Capital Management Inc. (NLY) announced earnings after the close yesterday. Surprise, surprise. Earnings per share fell 3¢ short of the consensus, throwing the chart and its signals into hard reverse.

NLY $17.46

Person's Proprietary Signal, the parabolic sar, the macd -- all moved to the bear side today. Only five days earlier the pps had turned bullish, two days the psar and one day the macd.

Oh, well. This illustrates yet again the Iron Rule of Technical Signals: They are always correct, except when they are not.

The price move was nowhere near as reversy: A 3% gap down at the open from the prior day's close, but it reversed and an hour before the close showed a net intraday rise. Today's low has stayed above the recent swing lows, just as the recent swing high was lower that it's predecessor.

However, the gap did pierce the 20-day simple moving average, a bearish sign.

All in all, the surprise means that NLY keeps on trucking the way it has for the couple of months, on a sideways romp between $16.90 and $18.40.

The very-short-term, 133-tick chart shows that all of the decline happened in after-hours trading last night, and today's moves were mainly sideways, with $17.40 and $17.60 the rough bounds.

On the Person's chart, the decline put the price solidly at the midline, $17.36, from which it rebounded.

Person's Table
ppspps openupper pivotlower pivot
$17.46 $17.44 jul29 $18.62 +6.6% $16.63 -4.8%

Bottom line: NLY is part of my portfolio, for the high, 15%+ yield. In an earlier posting, I discussed the dividend play in detail, including my rules I when I would get out.

The Great Reflation: How Investors Can Profit From the New World of Money
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we reemerge from the wreckage.

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.


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

About the glance: The colors indicate the state of each signal.

  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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