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.

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.

2/18 Watchlist

There's no change in the indicators from this morning's trends. I won't waste our time trying to make something out of nothing new. Let's go straight to the scans.

Here's what's interesting among high-volume . . .

1/29 Watchlist

Blue chip stocks (SPY) for the fifth day are trading within a range, roughly 110.47 down to 107.91. More or less.

ESTRAGON: Charming spot. (He turns, advances to front, halts facing auditorium.) Inspiring prospects. (He turns to Vladimir.) Let's go.
VLADIMIR: We can't.
ESTRAGON: Why not?
VLADIMIR: We're waiting for Godot

"Godot" -- it is a little known fact -- is French for "volatility".

1/20 Watchlist: Whither Blue Chips?

Three days within a trading range (about 113.50 to 115 for SPY).
Three days of signals bear bull bear (using Person's Proprietary Signal).

What to make of the blue chip stocks? A major longer-term top or not? That is the question. . . .

1/19 Watchlist: Whipsaw Fever, Nothing is Forever

The blue chip stocks (SPY) are showing a pps bull signal, after they showed a pps bear signal just one trading day prior, and have retraced all of the loss they showed on the day before the long holiday weekend. This is the Mother of All Whipsaws. It certainly justifies my cautious stance on Friday.

Also goes to show, in the markets, nothing is forever. Ever.

The other indicators: The same as I noted in the Morningline, except more so.

Here's what's interesting in high-volume . . .

Closed HPQ +2.7% (+48.5% on the options)

I've closed my HPQ bull put spread (p49/-p50) at 50.61 on the stock, for a debit of 0.33 on the options.

That's a 2.7% gain on the stock price, and a 48.5% profit on the options, in a trade lasting 10 calendar days.

12/17 Watchlist

A new bull signal on Treasury long bonds (TLT), and a bear signal on gold (GLD). Otherwise, nothing to add to this morning's discussion of the indicators.

No new signals on the currency pairs (EUR/USD and USD/JPY)

Among holdings:

Three January bull positons -- AET, HPQ, VALE -- have pulled back from peaks. I'm thinking of closing the positions.

LVS, a January covered call, is showing a bear signal, and prices remain in a sideways range.

KO, a January iron condor, has moved back in to max profit territory.

UNG, my December covered call, is trading well above 10. The call is a 9 strike, so the position will be exercised by whoever bought the call.

High-volume stocks and etfs priced $20 and above:

• QQQQ, bear signal, uptrend
  
• EEM, bear with a downward gap, uptrend
  
• JPM, bear, downtrend, but already at resistance
  
• MSFT, bear, uptrend
  
• MJN, bear,sideways trend, on the fourth day following a bull signal; confused puppy mode
• FCX, bear, amid a sharp pullback following an uptrend, the day following a bull signal; drunken sailor mode
• PG, bear, uptrend, on the fourth day following a bull signal (no more metaphors)
  
• FDX, bear, uptrend, on a gap down following earnings
• VWO, bear on a gap down, uptrend
  
• MOS, bear, sideways with some deep fluctuations
  
• DTV, bear, uptrend
  
• IVV, bear, uptrend
  
• XLI, bear, uptrend
  
• XLV, bear, uptrend
  
• VOD, bear, uptrend
  
• AXP, bear, uptrend
  
• GPS, bear (but no gap), trend change (maybe) from up to down
  
• DIA, bear, uptrend
  
• COF, bear, sideways following a strong uptrend
  

So, all in all, a fairly broad switch into bear mode. A lot of the stocks, not just those noted above, showed whipsaws from bull to bear the last few days. With the holiday trading week coming up, closing questionable positions is the prudent course.

JPM is the only trend following trade  in the batch, and since it is already at resistance, I don't find it to be compelling.

No covered call scan today.

12/17 Morningline

The November leading economic indicators report will be out shortly.
This is my favorite economic indicator, because it's forward looking and so matches the mindset of the markets. October was the seventh month to show an increase.

Meanwhile, to the indicators:

• Blue chips (SPY) opens at 110.72 on a gap downward, entered bear mode at close on Dec. 8 (at 109.61)
• Fear index (VIX) gaps upward 21.79, bear, Dec. 11 (21.59)
• Treasury long bonds (TLT) 92.5 on an upward gap, bear, Dec. 1 (95.25)
• Gold (GLD) 109.47 gaps downward, bear, Dec. 4 (113.75)
• Oil (USO) 36.59 no gap, bear, Dec. 4 (38.33)

Mainly, it's a gappish sort of day.

Currency pairs:

• Dollars per euro (EUR/USD) 1.45, bear, Dec. 4 (1.49)
• Yen per dollar (USD/JPY) 89,76, bear, Dec. 9 (87.86)

Holdings, December expiry:

• UNG, covered call (-c9) 10.20, bull, Dec. 7 (9.22)

Holdings, January expiry

• AET, bull put spread (p31/-p32) 33.56, bull, Dec. 8 (30.47)
• HPQ, bull put spread (p49/-p50) 50.94, bull, Dec. 9 (49.95)
• KO, iron condor (p50/-p52.5/-c57.5/c60) 58.26 and falling, bull, Dec. 1 (58.08)
• LVS, covered call (-c16) 15.55, bull, Dec. 14 (16.31)
• X, bear call spread (-c40/c41) 49.26, bull, Dec. 9 (46.74)
• VALE, bull put spread (p30/-p31) 28.27 on a gap down, bull, Dec. 14 (29.20) 

VALE is showing a new bear signal on a gap down but with a rising price since the open. It will bear watching.

KO is dropping back into profitable territory on my iron condor.

(Signals derived using Person's Proprietary Signal applied to daily charts.)

12/16 Morningline

The Consumer Price Index rose 0.4 percent, a fraction of the Producer Price Index's 1.8 percent rise announced on Tuesday. So, we can all refrain from a full-scale inflation panic for at least another month.
The Federal Open Market Committee will make their statement on rates and the economy at 2:15 p.m. Eastern (11:15 a.m. Pacific).

December options expire on Friday, which is a Quadruple Witching day,  sort of a speculators' Halloween. Be sure to lay on a supply of candy for any frazzled traders that come trick-or-treating at your door on Friday.

No new signals on the things I look at.

The indicators:

• Blue chips (SPY) opens the day at 111.8, entered bear mode at close on Dec. 14 (at 111.87), barely changed from yesterday
• Fear index (VIX), 21.5 , bear, Dec. 11 (21.59), falling
• Treasury long bonds (TLT), 91.93, bear, Dec. 1 (95.25), at the top of yesterday's trading range.
• Gold (GLD) 110.83, bear, Dec. 4 (113.75), rising
  
• Oil (USO), 36.08 , bear, Dec. 4 (38.33), rising
  

Currency pairs:

• Dollars per euro (EUR/USD) 1.45, bear, Dec. 4 (1.49), rising and within yesterday's trading range
  
• Yen per dollar (USD/JPY) 89.6, bear, Dec. 9 (87.86), at the top of yesterday's range.
  

Holdings, December expiry:

• UNG covered call (-c9), 10.22, bull, Dec. 7 (9.22), at the top of yesterday's range
  

Holdings, January expiry

• AET bull put spread (p31/-p32), 33.54, bull, Dec. 8 (30.47), slight gap up and rising
  
• HPQ bull put spread (p49/-p50), 50.9, bull, Dec. 9 (49.95), at the top of yesterday's range
  
• KO iron condor (p50/-p52.5/-c57.5/c60), 58.95, bull, Dec. 1 (58.08), within yesterday's range (and 1.20 above max profit at expiry)
  
• X bear call spread (-c40/c41), 48.95, bull, Dec. 9 (46.74), at the top of yesterday's range
  
• VALE bull put spread (p30/-p31), 29.04, bull, Dec. 14 (29.20), within yesterday's range

(Signals derived using Person's Proprietary Signal applied to daily charts.)

12/15 Watchlist

Indicators, currency pairs and holdings are showing no new signals since the Morningline.
Mobile phone companies showed bear signals after reports that Google plans to enter the cellphone hardware and service business. Among the high-volume stocks and etfs:

• BBY, bear signal on a gap down following earnings guidance; the stock has shown three signals in five days. The stock has been on an uptrend since June, so a bull signal after a pullback would be playable.
  
• VZ, bear, uptrend since October
  
• T, bear, uptrend since July
  
• GILD, bear, pretty much sideways since February
  
• XLE, bull, downtrend since October
  
• BK, bear, sideways, mainly, all year
  
• FLR, bull, downtrend since July
  

The number of new signals is something of an indicator. Compared to yesterday, today is a yawner.

BBY, VZ and T  might be playable on the next bull signal, if accompanied by price/volume confirmation, but the bear signal is counter-trend, something I'm avoiding these days.

The rest are either counter-trend or stocks going nowhere, and so don't pique my interest.

Looking more closely at my holdings:

UNG, my remaining December option, just keeps rising. In hindsight, better to have held the shares rather than hedging with a covered call (-c9). Go figure.  Even so, I'll profit from the covered call when the shares are drawn away from me after the option's last trading day, Friday.

At current prices, it would cost net 0.14 to exit UNG and the covered call, against a net 0.39 profit if I wait until expiry.

The bull put spreads:

• AET (p31/-p32)  is bumping up against resistance set last January. I'm holding for now but will close at the first sign of a price pullback. 
• HPQ (p49/-p50) has hit resistance set in November, and I'll be fairly hair-trigger about closing that position as well.
• VALE (p30/-p31) is trading within the range set yesterday, when I opened the position

X, a bear call spread (c41/-c40) is toying with upside resistance set in September. If it bumps through then I'll close for a loss. The stock flipped into bull mode on the fourth day after I opened the position.

KO, an iron condor (p50/-p52.5/-c57.5/c60), sits at a resistance level set in May 2008 and remains above max profitability, proving yet again that an iron condor has double the risk of beaking your heart. It can be unprofitable on both the upside and the downside.

12/15 Morningline

A new bull signal is showing this morning on USD/JPY, the third signal in nine trading days. The price, now 89.94, remains below resistance at about 90.20 and is trading within Friday's range.

Treasury long bonds (TLT) gapped down in price after the Bureau of Labor Statistics said the producer price index increased by 1.8%. The TLT decline prices in a likelihood that the Fed will increase interest rates sooner rather than later to stave off inflation.  (Rule of thumb: Higher interest rates, lower bond prices.)

The Fed is meeting today and will make an announcement on Wednesday, at 2:15 p.m. Eastern (11:15 a.m. Pacific).

Indicators:

• Blue chips (SPY) opens at 111.46, entered bull mode at 111.87 on Dec. 14, but with a suspicious price bar that leads me to believe that it's a spurious signal. Prior, SPY entered bear mode at close on Dec. 8 (at 109.61)
• Fear index (VIX) , 21.09, bear, Dec. 11 (21.59)
• Treasury long bonds (TLT) 91.57, bear, Dec. 1 (95.25)
• Gold (GLD) , 109.94, bear, Dec. 4 (113.75)
• Oil (USO), 35.62, bear, Dec. 4 (38.33)

Currency pairs:

• Dollars per euro (EUR/USD) , 1.47, bear, Dec. 4 (1.49)
• Yen per dollar (USD/JPY) 88.62, bear, Dec. 9 (87.86), but with a new bull signal showing this morning, confirmed by an intra-day price rise.
  

Holdings, December expiry:

• UNG, covered call (-c9) , 9.99, bull, Dec. 7 (9.22)

Holdings, January expiry

• AET, bull put spread (p31/-p32) 32.13, bull, Dec. 8 (30.47)
• HPQ, bull put spread (p49/-p50) 50.52, bull, Dec. 9 (49.95)
• KO, iron condor (p50/-p52.5/-c57.5/c60) 59.15, bull, Dec. 1 (58.08)
• VALE, bull put spread (p30/-p31), 28.89, bull, Dec. 14 (29.20)
• X, bear call spread (-c40/c41) 48.18, bull, Dec. 9 (46.74)

(Signals derived using Person's Proprietary Signal applied to daily charts.)

12/14 Morningline

Indicators:

• Blue chips (SPY) opened at 112, entered bear mode at close on Dec. 8 (at 110). SPY is showing a new bull signal this morning.
  
• Fear index (VIX), 22, bear, Dec. 11 (22)
• Treasury long bonds (TLT), 93, bear, Dec. 1 (95)
• Gold (GLD), 110 , bear, Dec. 4 (114)
• Oil (USO) 36, bear, Dec. 4 (38)

Currency pairs:

• Dollars per euro (EUR/USD), 1.46, bear, Dec. 4 (1.49)
• Yen per dollar (USD/JPY), 89, bear, Dec. 9 (88)

Holdings, December expiry:

• UNG, covered call (-c9), 9.94, bull, Dec. 7 (9.22). I'm giving up 0.31 profit on the stock, and it would cost 0.99 to buy the call back.

Holdings, January expiry

• AET, 32, bull put spread (p31/-p32) , bull, Dec. 8 (30)
• HPQ, 50, bull put spread (p49/-p50) , bull, Dec. 9 (50)
• KO, 59, iron condor (p50/-p52.5/-c57.5/c60) , bull, Dec. 1 (58)X, 47, bear call spread (-c40/c41) , bull, Dec. 9 (47)
• X, 47, bear call spread (-c40/c41) , bull, Dec. 9 (47)

All in all, a fairly calm opening, except for some large bounces in SPY pre-open and the new bull signal, which must still be in place near the close to be valid. (My rule for trading signals is that a signal counts at the end of the period.)

12/11 Watchlist

BMY rose again today after a bull signal at yesterday's close. It has been in an aggressive uptrend since late October and has about $2 to go until it hits upside resistance set in January 2008. (Yes, I pegged it as a sideways trend in yesterday's Watchlist. I broadened by view.) It's looking interesting as a possible play.
BAX, a bull signal yesterday that looked interesting but which I didn't trade, has shown a strong rise for the second day and has pierced resistance set in September.

New signals among other high-volume stocks and etfs, with the direction of the signal and the trend in which it has occurred:

• ORCL, bull, uptrend since March, sideways since October.
• SMH, bear, uptrend since March
• HD, bull, uptrend since March (trading at resistance)
• CTL, bull, uptrend since March (whipsaw from bear signal given three days earlier)
• BRCM, bear, uptrend since March (strong reversal at resistance)
• DIA, bull, uptrend since March, sideways since November (trading at resistance, whipsaw from a bear signal given four days earlier)
• XRT, bull, downtrend since October
• POT, bear, uptrend since October
• AXP, bull, uptrend since March (about $4 away from upside resistance, but this is the fifth signal given in 11 days, so clearly the stock in neither a bull nor a bear but a confused puppy)
  

Of those, AXP is interesting because of the distance from resistance, but the false signals worry me.

Holdings:

UNG, a covered call (-c9) that expires in eight days, has fallen to 9.53 and remains profitable.

Of the January expiry holdings, there are no new signals.

X, a bear spread (-c40/c41), which has moved contrary to my bearish position, is pulling back a bit but remains worrisome.

AET, a bull spread (p31/-p32) that showed a nice rise this morning, has pulled back to within yesteday's trading range.

HPQ, a bull spread (p49/-p50), is stalled at the cusp of profitability.

KO, an iron condor (p50/-p52.5/-c57.5/c60) remains above the range of max profit at expiration.

No new signals among the indicators.

12/11 Morningline

The fear index (VIX) is showing a bear signal this morning on a rising price from the open. A bearish VIX is bullish for stocks.

Otherwise, blue chips (SPY) are in bull mode, and Treasury long bonds (TLT), gold (GLD) and oil (USO) are in bear mode.

In currencies, the dollars per euro (EUR/USD) pair remains in bear mode, and the yen per dollar pair (USD/JPY) is showing a new bull signal on a price rise.

Paper holdings:

Short USD/JPY is a paper holding in my portfolio. I'm closing now (buying back the position), and have done so at 89.44. The basis was 87.82, so the loss is 1.8%

Holdings (with real money; skin in the game):

My covered call (-c9) on UNG, which expires in eight days, remains well above the strike price and will be exercised, most likely. I keep the 0.51 premium on the covered call and lose 0.12 on the shares.

January expiry:

X is hesitating at the top of its large rise three days ago that put it in bull mode, at resistance. My position is a bear call spread (-c40/c41). If the shares break out above resistance, then I'll close.

HPQ, a bull put spread (p49/-p50), remains in bull mode with little price movement.

KO, an iron condor (p50/-p52.5/-c57.5/c60), is in bull mode and continues to trade about a dollar above max profitability.

AET, a bull put spread (p31/-p32), continues to rise in bull mode.

12/10 Watchlist

AET has penetrated resistance decisively on the third day after a bull signal and is a buy at 31.70 or below with upside resistance around 33.70. See the discussion in yesterday's Watchlist.

I've opened a bull put spread (p31/-p32) in AET at 31.70 for 0.47 credit. The position is profitable on expiration in January from about 31.55 upward.

New signals among the high-volume stocks and etfs, with the signal, mfi confirmation status, and the trend:

• QQQQ, bull, confirmed, sideways
• ORCL, bull, confirmed, sideways
• BMY, bull, confirmed, sideways
• SBUX, bull, confirmed, sideways
• UNH, bull, confirmed, sideways
• QCOM, bull, confirmed, sideways
• XLK, bull, confirmed, sideways
• CVS, bull, unconfirmed, sideways
• BAX, bull confirmed, sideways (at resistance following strong gain)
• MT, bull, confirmed, sideways

BAX has some interest. I'm not opening a position because of the sideways trend, but it could be a play.

The rest are mainly whipsawing in confused puppy mode -- a series of bull and bear signals every few days.

Indicators: The VIX bear signal (bullish for stocks) noted in this morning's Morningline has disappeared. Other indicators remain as described.

Holdings:

UNG had a sharp rise today and the December covered call (-c9) will be exercised at this level. The trade remains profitable.

HPQ, a January bull put spread (p40/-p50) remains in bull mode iwth a price rise today.

KO is trading above the upper end of profitability at expiry of the January iron condor (p50/-p52.5/-c57.5/c60).

X, showing a bull signal from yesterday, contrary to my Janurary bear call spread (-c40/c41), is pulling back a bit at the upper end of yesterday's trading range.

Currencies (paper trade):

USD/JPY remains in bear mode and is trading within yesterday's trading range. I continue to hold my short position.

12/10 Morningline

The VIX shows a bear signal this morning, two days after a bull signal, with little change in level. The true nature of the fear index is neither bull nor bear but rather confused puppy.

I add a new indicator, USO, which tracks light, sweet West Texas crude.

Indicators: 

• Blue chips (SPY), bear mode with a gap upward.
  
• Fear index (VIX), new signal, bull mode (bearish for stocks)
  
• Treasury long bonds (TLT), bear mode.
  
• Gold (GLD), bear mode
  
• Oil (USO), fifth day in bear mode
  
• Dollars per euro (EUR/USD), bear mode with a pause in the price decline
  
• Yen per dollar (USD/JPY), bear mode with a pause

Holdings:

With nine days until expiry of my covered call (-c9), UNG is trading a bit above 9.22 and would be profitable if exercised.

The January expiry holdings:

HPQ, a bull put spread (p49/-p50), has opened above yesterday's close and is tracking nicely in line with my position. This confirming price action comes after a whipsaw of three signals in four days.

KO, an iron condor (p50/-p52.5/-c57.5/c60) is trading about half a point above max profit at expiration.

X, a bear call spread (-c40/c41), is trading near yesterday's close on this second day in bull mode. It is near resistance and I shall close the position if it is about to close above 47. (X is presently trading at 47.02.)

Currency holding (paper):

My USD/JPY bearish paper trade, based on yesterday's pps bear signal, is going nowhere at the start of the morning, as it trades upward within the range set by yesterday's decline. (Paper trade means I have no real money on this position; I'm using the trade to test the pps indicator in the currency markets.)

12/9 Watchlist

New signals among the high-volume stocks and etfs, with pps signal, mfi confirmation status, and price pattern:

• TXN, bear, confirmed, counter-up-trend retracement
• PEP, bear, confirmed, counter-up-trend retracement
• T, bear, unconfirmed, counter-up-trend retracement
• WMT, bear, confirmed, counter-up-trend retracement

As a dedicated trend follower, I don't like any of these. They're all counter-trend pullbacks.

Or, as the option addict Jeff Kohler said yesterday in a plaintiff scream of agony, "Get me the hell out of this range. Please."

AET, which was on yesterday's watchlist with a bull signal, opened this morning at upside resistance and then declined to within yesterday's trading range. It didn't decisively pierce resistance, so no trade.

My holdings:

X, a January bear call spread (c41/-c40), is showing a bull signal with a push up to near-term resistance. If it pushes through, I'm closing.

HPQ, a January bull put spread (p49/-p50), is showing a bull signal today, after a bear signal yesterday. The issue is clearly in super-whipsaw mode, as it has given three signals in four days. I'll hang on for now pending some sort of price confirmation.

UNG and KO are about where they were in the morningline.

No new signals on the indicators.

The USD/JPY currency pair continues to show a bear signal confirmed by the rsi.

12/9 Morningline

Blue chips (SPY) open this second day after a bear signal within yesterday's trading range. The fear index (VIX), likewise, is trading within its range of yesterday, when it showed a bull signal, which is bearish for shares.

Treasury long bonds (TLT) are barely changed from yesterday on this seventh day since a bear signal.

Gold (GLD), likewise, is barely changed on the fourth day after a bear signal.

In the currencies,

Euros per dollar (EUR/USD) is unchanged this morning following a four day decline.

Dollars per yen (USD/JPY) are down on a fresh bear signal confirmed by the RSI. The pair has been declining since April, so this is a paper trade I'll be looking at later in the day.

My one December expiry holding, UNG, is running about 0.42 above the 9 strike of the covered call (s/-c9) and 0.30 above my base. So, at this point, we're giving up 0.30 in profit on the stock in order to gain 0.51 in premium on the call at expiration 10 days hence. It would cost about 0.54 to buy back the call this morning, so holding the position makes the most profit.

January expiry holdings:

HPQ, a bull put spread (p49/-p50), closed yesterday with a bear signal and is holding today at about the same price range as yesterday's trading. I'm holding on to the position until there's some clarity in the price action.

X, a bear call spread (c41/-c40), is running sideways on the fourth day since a bear signal.

KO, an iron condor (p50/-p52.5/c60/-c57.5) is trading about 30 cents into the max-profit-at-expiry range on the seventh day since a bull signal.

12/8 Wrap

HPQ keeps showing (and unshowing) a ghost bear pps signal. I'm going to keep my bull put spread and see what happens tomorrow.

AET is below 31, so no entry today.

No trades today. That's -30-.