1/27 Watchlist

Blue chip stocks (SPY) barely blinked at a Federal Open Market Committee announcement that left low to non-existent interest rates in place while dishing out some modest happy talk about the economy's prospects.

SPY is trading down a bit from yesterday's range, Treasury long bonds (TLT) and gold (GLD) within the range, the dollar against the euro (EUR/USD) is worth a bit more, and oil (USO) is straddling the yesterday's range in a downward move.

In other words, its just another day in 2010's low-volatility paradise. (The VIX is trading down for the third straight day.)

12/16 Watchlist

Today it is 30 days before expiration of the January options, which means we're into prime time for covered calls. I'll be taking at look today and in subsequent Watchlists at high-volume stocks priced below $20 showing signals that might make them good covered call candidates. See the end of this posting.

A covered call stock needs to meet these criteria:

• Slightly bullish to neutral prospects. I.e., I don't want the shares to come crashing down, but I also don't want them to have huge rise.
• Price sufficiently low so that I can afford 100 shares. Calls come in 100-share units, so there's no way to sell a call against fewer than 100 shares.
• Volume sufficient to provide liquidity. Basically, the higher the better, but not below 1 million shares.

 Indicators:

USO is showing a bull signal on a 2.6 percent rise followed by a partial pullback. The trend has been sideways since June. Otherwise, no new indicator signals.

No new signals from the currency pairs or my holdings.

High-volume stocks and etfs priced at 20 or greater:

• CVS, bear signal, sideways trend since a huge gap down in November
• KR, bull, sideways since a huge gap down on Dec. 8
• BRCM, bull on a 4% rise, up since November
• EBAY, bull, down since September
• CIT, bear, unknown trend after five trading days since shares resumed trading
• ESRX, bear on a 4.7% fall, up since March; shares are trading where they were on Nov. 30, so it's not as apocalypic as it might sound.
• MHS, bear on 4.6% fall, up since March
• BBD, bear, up since March
• BA, bear, up since March (with some fairly deep pullbacks)
  

ESRX and MHS fell on news reports that healthcare would face increased regulation under Obama's policies. Duh.

The bear signals on those two issues are counter-trend, but I shall look hard at them at the next bull signal.

BRCM's with-the-trend bull signal pushes prices to upside resistance, the second test of those levels in the past four days. A possible trade if it breaks above 32.


High-volume shares and etfs below $20 that are possible covered-call candidates:

• GE, 15.71, bear mode, sideways since October,
• EWJ, 10.03, bull, sideways since September (with deep pullbacks)
• EWT, 12.40, bear, sideways since August
• LVS, 15.88, bull yesterday, sideways since July

All of these have 200-day moving averages that are turning up. GE has a 0.39 premium on the January 16 strike calls, and LVS a 1.09 premium on the 16-strike. Of the two, I would go for the premium and sell a covered call against LVS.

11/9 Watchlist

I'm looking to close NVDA. The MFI has turned downward, although the Persons remains bullish. It was an earnings play, and earnings are past. Time to take profits.

A disclaimer: I hate trading during holiday weeks, even those where the market doesn't close. Few people are trading, reducing liquidity. And when it comes to trading, my dream is Water World.

BAC shows a Persons bull signal with an MFI bounce out of oversold territory. Trading at 15.71, already near very near term resistance, with support at 14.12. More distant resistance at 17.50.

RIMM, a Persons bull signal, confirmed by the MFI, trading at 61.84 with resistance at 61.90 and support at 57.50.

11/6 Watchlist

GE, General Electric, shows a Person's PPS bull signal confirmed by an MFI bounce off the oversold line. (We've been waiting for this all week.) The stock is trading at 15.31, right at a downward-trending MA20, with upside price resistance at 16.80.

On the bear side, USO, an energy-sector ETF, is showing a bear signal on the Person's PPS, confirmed directionally by the MFI. However, the MFI moved off the overbought shelf 10 trading days ago, while my rules allow only five days, unless there is another reason, such as earnings, to take the trade. I probably won't take this trade.

(The MFI for BAC and INTC, previously on our watchlist, has turned back toward the oversold line.)

11/5 Watchlist: BAC INTC GE HD IWM NVDA

IWM, the Russell 2000 ETF, showing bull mode confirmed by an MFI oversold bounce. Currently trading at 57.20, below a downward-trending MA20, with upside price resistance at 51.50.

NVDA, Nvidia Corp., showing bull mode confirmed by an MFI bounce off the oversold line. Earnings announcement scheduled for after market close. Currently trading at 12.16, below a downward-trending MA20, with upside price resistance at 13.55 and downside support at 11.56. The Risk: A downside earnings surprise, but the technicals suggest current money expects an upsider.

HD, Home Depot Inc., showing bull mode confirmed by an MFI bounce off the oversold line. Now trading at 25.01, below a downward-trending MA20.

AMD, Advanced Micro Devices Inc., showing bull mode confirmed by an MFI bounce off the oversold line. Now trading at 4.79, below a downward-trending MA20

Also watching: BAC INTC GE on MFI oversold bounces without an entry signal.

11/4 Watchlist: CSCO IWM BAC INTC GE AMD

CSCO, Cisco Systems Inc., showing bull signals on the Person's PPS confirmed by a money flow index oversold bounce. Currently trading at 23.40, below a flat MA20, with upside price resistance at 24.50. The earnings announcement scheduled after market close today. The risk: A downside earnings surprise. But the signals suggest the current money is positioning toward the upside.

Also watching: BAC, INTC, IWM, GE, AMD. These issues are showing an MFI oversold bounce, but lack the bull signal.