2/5 Watchlist

The indicators I follow are all undergoing aftershocks after yesterday's marketquake.

SPY down, TLT up, JNK down, GLD down, USO down, EEM down.

Yesterday's moves were mainly blamed on the debt crisis in the euro zone, especially Greece. Today's reports are following the same line.

But I wonder. Search the Google News archive for last year and you'll find plenty of news stories about the debt crisis in Europe. This is old news.

12/18 Watchlist

No new signals on the indicators or the currency pairs since today's Morningline.

Among my holdings, the LVS January covered call  (-c16) continues to show a bear signal, with a small decline in price. Trading remains within yesterday's range.

A bit of a change in today's scan of high-volume stocks. Rather than listing all of the signals and then rejecting those that don't accord with my trend-following style, I'll list only those issues where the signal and the trend match my method. A shorter list.

High-volume stocks of $20 or greater:

• SBUX, bull signal on a 6.5% price rise, within an uptrend

The SBUX rise keeps above all prior highs. It's a blue-sky stock, with no upside price resistance. The uptrend has been in force since November 2008. An attractive bull play.

Next, a scan for possible covered calls. We're 28 days from expiration of the January options, so it's prime time for these instruments.

• GE, trading in a narrow range since November, currently in bear mode, stock 15.70, strike 16, premium 0.34; GE earnings are on Jan. 18, at the time of expiration.
  
• DELL, narrow range since September, bull mode, stock 13.76, strike 14, premium 0.37

It's hard to find decent covered call trades; premiums are low because volatility is low.

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 Morningline

No significant economic releases today.

SPY (tracking the SP500) is in the third day of a Persons PPS uptrend. GLD (the gold ETF) is in the sixth day of a PPS uptrend. Both are confirmed by the MFI.

USO (tracking oil) flipped into a PPS downtrend on Friday, unconfirmed by the MFI, and that was two days after entering an unconfirmed uptrend. Bottom line on oils: They are confused puppies who don't know where they want to go. Indecision is the enemy of profit.

In the currencies, EUR/USD is in the fourth day of a PPS uptrend, confirmed by the Wilder RSI, and the USD/JPY is in the 9th day of a confirmed RSI downtrend. (I use the RSI on currencies because they have no volume data, which the MFI requires. The RSI is a volume-less surrogate for the MFI.)

In the portfolio this morning, these positions continue their PPS bull moves:

• AMD, third day of the move, but the MFI has diverged
• CSCO, fourth day
• GE, second day
• HD, third day
• IWM, third day
• NVDA, third day, but the MFI has diverged

Opened GE bull put spread

Opened GE bull put spread at 15.38 on the underlying, short the DEC 16 and long the DEC 15, for 0.52 in credit.

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.