NLY Watch

Real-estate investment trust Annaly Capital Management (NLY) has moved to bull phase on Person's Proprietary Signal (pps). The dividend play has a current yield of 15.58%, paid in quarterly installments.

	trend	adx	psar	pps	macd	macd trend	sto	sto zone
$17.36

At this point the pps stands alone in bullishness. And it is ghosting -- appearing and disappearing like the Cheshire Cat in "Alice".

The fast stochastic is in bear phase, but on Aug. 24 it fell just short of dropping below the 20-line and then moving back above, which would have given a bull signal. So, given the steep upward slope of the fast-sto since then, I'm willing to consider it be a bull-phase wannabe.

Prime Fact: NLY lives and dies by real estate, specifically collateralized debt obligations of the sort floated by Fannie Mae and Freddie Mac. In a real says, as goes Fan and Fred, so goes Nelly.

The price hit a near-term low on Aug. 25, when analysts downgraded NLY out of worries about Fannie's and Freddy's ability to collect on their mortgages. Since then the price has risen 4.4% to just below the 20-day simple moving average. The price is also trading just below the 200-day moving average.

On the Person's chart, with weekly pivots, NLY has pushed through the midline.

Person's Table

	pps	pps open	upper pivot	lower pivot
NLY $17.36		$17.27 aug31	$17.78 +2.4%	$16.67 -4.0%

Reversal Levels

• $17.78, +2.4% (swing high)
• $17.53, +1.0% (200-day ma)
• $17.40, +0.2% (20-day ma)
• $17.36 <== You are here.
• $16.73, -3.6% (swing low)

Bottom line: I like NLY for the dividends -- I own shares -- and I'm slow to trade in and out. Right now it's working through a sideways pattern, and as long as it stays in that range, then I'm happy to keep holding.

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.

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
• 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.
• sto zone: green for bull phase, red for bear phase.

====== Forex table:

	pps	pps open	upper pivot	lower pivot
EUR/USD US$1.27		US$1.32 aug11	US$1.34	US$1.25
USD/JPY¥84.53		¥85.15 aug24	¥88.41	¥83.96
GBP/USD US$1.54		US$1.59 aug11	US$1.60	US$1.51
EUR/JPY ¥107.53		¥107.37 aug17	¥115.86	¥104.43
USD/CAD C$1.06		C$1.06 aug31	C$1.08	C$1.01
USD/MXN M$13.17		M$12.70 aug20	M$13.37	M$12.24

The analysis uses the daily Person's Proprietary Signal, developed by John Person, and the monthly Person's Pivot, which he also developed. These are black box signals -- the "proprietary" means that Mr. Person knows how they work under the hood, and I don't. But they have shown a fair degree of success in identifying good entry and exit points, and I find them useful. On the glance, "pps open" means the price at the start of trading in the United States on the day the signal appeared. 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.