Closed MRVL -8.0%

I've closed my stock options position on MRVL with the stock priced at 19.67, down 8 percent from where I entered. The option position, a bull put spread, closed for a 60.9% loss.

I opened the position on Jan. 5. I bought February puts with a strike price of 20, and sold puts with a strike of 22.5, with a stop loss of 20. The shares showed a bear singal on Jan. 12, and moved decisively below 20 about two hours into today's trading.

MRVL met my technical requirements for the trade. It showed a bull signal amid an uptrend. Problem is, the uptrend ended. It is the nature of trends they are trends until they quit being trends. Simple as that. The stall came at a congestion level that had been set in October 2000.

There is among traders a traditional mantra that is uttered fervently in times of loss, for its mixture of calmness and hope. . . .

1/15 Watchlist: The Blue Chip Bears

Blue chip stocks (SPY) are showing a bear signal and have dropped 1.3 percent from the opening price. The price has stalled at very near term resistance. This comes amid falling interest rates on 20- and 30-year Treasury bonds, and falling prices for gold and oil.

In terms of other technical analysis on the blue chips, the stochastic has crossed below the 80-line, a bearish signal. The macd remains in bullish territory. The price was approaching the upper Bollinger band, and the bands were widening, which can be taken as signaling continuation of the upward trend.

The blue chips have been in a strong upward trend since March. This signal is countertrend, and not a trade for me. Especially with so many mixed signals.

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

1/15 Morningline: The Inflation Puppeteer at Play

The price of the longest-term Treasury bonds, issued for periods of 20 and 30 years, gapped up by 3/4 of a percent this morning. Since trading opened yesterday, the bonds have risen 1.6 percent.

The Consumer Price Index, released today before the start of trading, showed very low inflation. Interest rates on bonds are typically a premium over and above the inflation rate. With expectations of lower inflation, the market prices in lower rates when selling bonds by lower the bond price.

The CPI is a like a gigantic global puppeteer. It pulls one string, and all of the world's economic arms and legs and heads spring into motion. . . .

1/14 Morningline: A Nietzschean Moment: Awake!!

The stock market, gold, oil, bonds -- long-term Treasuries and corporate junk bonds alike -- all are trading within a very, very narrow range this morning. It's as though someone put a magic sleeping potion in investors' breakfast cereal.

Even the Big 3 foreign exchange currencies -- the dollar, yen and euro -- are relatively quiet at the open.

Things are so quiet, and dull, and risk-free for the moment, even the  financial crisis inquiry commission would approve.

It's a Nietzschean moment: Sleeper Awake!

This morning's numbers . . .

1/13 Morningline: Blue Chips pause; fear, loathing and bullishness

Oil (USO) gaps down to 0.8% below the prior close. The other indicators and the currencies do little at the opening, as though exhausted by yesterday's drama.

Yesterday's potential bear signal on the blue chips (SPY) disappeared at the close of the day. So they remain in bull mode, and given the lack of follow through to yesterday's declines, my bias on blue chips remains bullish, but with a lot of caution, fear and loathing. . . .

1/13 Lookahead: Bearish bias switch? Brain-dead market stories.

I have two tasks on Wednesday.

First, in the light of the broad bear signaling on Tuesday, do I change my bias to bearish? What does this mean for my one remaining February position, MRVL, a bull in a china shop filled with bears?

1/12 Watchlist: SPY, many etfs show bear signals; Fear flies;

Blue chips (SPY) show a pps bear signal on a decline of 1.1% from Monday's close. The mfi and stochastic are falling toward their respective 80-lines. The macd remains in bull territory. The price remains above the 20-day moving average.

The decline is consistent with a minor pullback within an uptrend that began in early March 2008. A decline below the ma20 would suggest a larger decline, such as that seen in June and July last year, as well as in September, October and November.

The blue chips' bear signal coincides with a gap up and sharp rise in volatility (VIX, the fear index). It is trading 9.2% above Monday's close.

Gold (GLD) also shows a bear signal and a 2.2% drop from yesterday's close, with the 20-day moving average below the 50-day moving average but the price above the 50-day. Oil (USO) shows a similar pattern with a pps bear signal.

Bear signals all over the major exchange-traded funds. See below

Otherwise, the signals on indicators and currencies remain as described in the Morningline.

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

1/12 Morningline: Volatility gaps up, bear signs on oil and dollar/yen

Volatility (VIX), the fear index, gaps up by 6% after seven days of decline.

Blue chips (SPY) gap down a bit and bounce off of the day-before-yesterday's opening. The macd, stochastic, money flow index remain bullish. The price withdraws from the upper Bollinger band.

Treasury long bonds (TLT) gaps up by 1.5% and shows a potential pps bull signal, unconfirmed by the macd, stochastic, trend, mfi. The third pps signal in six days.

Oil (USO) shows a potential pps bear signal, as the stochastic dips below the 80-line. The 20-day moving average bumps up toward a cross of the ma50 -- a bullish sign -- and the macd and mfi remain in bull territory.

The yen-per-dollar currency pair (USD/JPY) whipsaws, with a pps bear signal on a decline of about 1%, after the second test of a top. The macd crosses below the zero-line, and the stochastic is plunging headlong toward the 20-line. This morning's decline pierces the Bollinger band middle line. All bearish for the U.S. dollar. See Bloomberg's trade deficit report. This is the third pps signal in six days with mainly sideways price movement.

The dollars-per-euro pair (EUR/USD) opens at the top of yesterday's range and stays put.

Among holdings: A pps bear signal on MRVL and VALE, both bull positions. MRVL remains above support, and VALE gapped down past very near term support.

1/11 Morningline: Euro Breaks Out; Fear Takes a Holiday

The euro per dollar currency pair, EUR/USD, shows a potential pps bull signal as it breaks out of an 11-day trading range. It will become the current signal if it still exists at the close of the U.S. markets. The dollars per yen, USD/JPY, pair shows no corresponding signal or movement.

The fear index, measuring volatility, gaps down by 6.5% and then falls further. Blue chips open higher and then, counter intuitively in light of the VIX, fall back into yersteday's trading range.

Gold gaps up by 1.8%.

No new signals on the indicators or holdings.

The numbers . . .

1/8 Morningline: Employment Numbers Savage Markets -- Not!

I woke up this morning to National Public Radio reporting a loss of 85,000 jobs in November, in the usual doomday tones that accompany such stories.

Blue chips (SPY) opened this morning -- well, unchanged, in the middle of yesterday's trading range. Illustrating once again that the monthly employment figures are a trailing indicator, showing where we were, and the markets are a leading indicator, showing where we think we'll be.

The dollar  retraced nearly all of yesterday's gains again the yen (USD/JPY), pulling back from resistance set in December and in recent weeks. The decline came the day after a pps bull signal.

1/7 Watchlist: Yen signal; AAPL, CVS, ITUB on the scan

• Blue chips, Treasury long bonds stagnate. 
• USD/JPY signals. 
• Junk bonds up a bit.
• AAPL, CVS, ITUB on the scan.
  

No new signals on any indicator, and prices are quite stable, except for corporate junk bonds (JNK) which, as noted in the Morningline, continues to rise for the fourth day.

The yen per dollar currency pair (USD/JPY) continues to show the pps bull signal that appeared this morning. The chart is uptrending, with the steep pullbacks, from early December. For me, it's not a trade at this point. The yen peaked above the top set on Dec. 31, and promptly pulled back to the resistance point. I would consider going long the yen if the price closed around 93.4 or higher. Also, the macd, while in bull territory, is declining toward the zero line, and the stochastic has moved below the 80 line.

1/7 Morningline: New signals on dollar-yen, semiconductors

A new potential pps bull signal on the yen per dollar (USD/JPY) currency pair, on the second day following a bear signal. A potential pps bear signal on SMH, the semiconductors etf, a bull holding.

Blue chips (SPY) remain in bull mode and open barely changed from yesterday's narrow trading range.The price, trending sideways the last three days, is pulling away from the rising upper Bollinger band.

Corporate junk bonds (JNK) continue their price rise (interest rate decline)for the fourth day, as the price marches along an uptrending upper Bollinger band.

1/6 Watchlist

Treasury long bonds (TLT) are declining in price, contrary to yesterday's pps bull signal. Otherwise, all indicators are in line with the signals noted in the Morningline.
The dollar is rising against the yen (USD/JPY), contrary to yesterday's pps bear signal, but remains nearly contained within the prior day's range. The stochastic is in bear mode, and the macd is heading that way. The 20-day moving average is rising and is above its 50-day counterpart.

The euro-dollar pair (EUR/USD) is in the ninth day of a sideways move.

My holding are marking time, except for MRVL, which shows a small rise. My positions is a bull put spread (p20/-p22.5).

Also interesting among the high-volume . . .

1/6 Morningline

The fear index (VIX) opens with little movement, but with a pps bear signal from very late yesterday. Bearish on fear is bullish on the blue chips. The VIX has been mainly downtrending since late October. The 200-50-20-day moving averages are all pointing downward and line up in descending order on the chart, a bearish sign. The macd is also crossing the zero-line back into bear territory.

Treasury long bonds (TLT) shows a pps bull signal from yesterday's close, unconfirmed by the trend, downward since early October, and by the inversed moving averages (200-50-20). The stochastic and macd, however, are peeking through into bull mode.

Neither the indicators nor the currencies nor the shares are showing movement this morning in the few minutes after the start of trading, prior to the 10ae (7ap) non-manufacturing index and the 2pe (11ap) FOMC minutes.

Opened MRVL bull put spread for February

I've opened a February bull put spread (p20/-p22.5) in MRVL. The options are still 45 days out from expiry, a bit long, but given the constant upward trendline I think it's worth the risk.

I sold the vertical spread for 1.15 net credit with the underlying at 21.38. The position is profitable anywhere above 21.35 at expiry.

Stop/loss at 20, based on support.

Topics: Marvell Technology Group, semiconductors

1/5 Watchlist

The Treasury long bonds (TLT) continue to show a potential pps bull signal on a rise from the open today of half a percent. Rising bond prices means falling interest rates (an amazing idea, given how low rates are already). I need to note that this etf fails the trend test. It has been trending mainly downward for a year. On the other hand, the macd and stochastic indicators are pointing in a bull direction.

The yen per dollar currency pair (USD/JPY) continues to show a bear flag, meaning stronger yen/weaker dollar, on a decline from the open of 0.9%.

Other movers today among my indicators and holdings:

• Corporate junk bonds (JNK), up 1.2% (meaning falling rates)
• LVS, a holding of mine in the form of a January covered call (-c16) is up 6.5% from the open after an overnight gap, a rise of similar magnitude, and another gap over the New Year's holiday. New reports are crediting gambling revenues in Macau, where Las Vegas Sands also operates. (What happens in Macau stays in Macau -- you betcha). I'll profit, but I would have profited more with a straight bull position without the covered call.
  
• KO has fallen 2.4% the last three trading days and sits nicely in profitable territory on my iron condor (p50/-p52.5/-c57.5/c60)
• SBUX, a bull holding,  jumped 4.5% from the open, although it has pulled back a bit. This is on the third day since a pps bear signal, with no new bull sig. Earnings is Jan. 20.
• SMH, a bull holding, is down a percent from the open.

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

. . . exchange-traded funds (etf):

• XLE, the energy etf, is up 2.2% in two days, with the pps, macd and stochastic all in bull mode. The 20-day moving average is slightly below the ma50, and poised for a crossover, restoring the standard 20-50-200 bullish order.
• FXI, the etf that tracks London's FTSE index, gapped up this morning and is trading 2.6% above yesterday's open. The issue fails the trend test -- it is a sideways meanderer -- but the macd and stochastic are in bull mode. The ma20, however, is trading below the ma50 and is trending downward, giving a bearish cast to the chart.
• KBE, which tracks a banking index, is up 2.7% from yesterday's open, the day after a pps bull signal. The trend is sideways, but the macd and stochastic are in bull mode.
• EWM, the Malaysian market etf, showing rise-gap-rise-gap-rise (the infamous rgrgr -- or roger-roger -- pattern, known as the inverse Asian Tiger roar). The trend is rangebound between about 10.40 and 11.20; pps, macd and stochastic all in bull mode.
  

. . . corporate stocks:

• JPM continues its rise after yesterday's pps bull signal
  
• KFT gaps up, and signals, on news.
• T drops below the point where it gave a pps bull signal yesterday. The chart shows a nice uptrend, though.
• CHK breaks past previous upside resistance with bull signals all around (but a sideways trend).
• QCOM gaps up with good trend, macd and stochastic in what appears to be an inverted head and shoulders pattern, which is bullish. Nice uptrend since mid-December and the all indicators are in bull mode. My problem is, when everyone sees the pattern, it kills the uncertainty and therefore the potential for profit.
• DOW with a nice rise through resistance after a pps bull flag yesterday, preceded by macd and stochastic bull signals
• CAL, large rise and a new pps bull flag, confirmed with the macd and stochastic, on a move through resistance and rising trend, and on news about revenue data. So the good news for the bottom line is no doubt already in the price.
• WMT, with a sideways trend, is showing the famous double whiplash pps signal, a bear, a bull and a bear within three days. The macd is heading toward bull territory, and the stochastic toward bear. Confused puppy mode, for sure.
• No new signals on MRVL, but it has a picture-perfect upward trend since late November and is blue sky (no resistance).

Topics:

Treasury bonds, Coca-Cola, Las Vegas Sands, gambling, resort, Starbucks, coffee, semiconductors, dollar yen forex, petroleum oil energy crude, London United Kingdom U.K., banks financial KBW banking index, Malaysia, J.P. Morgan, AT&T telecommunications, Chesapeake Energy, Qualcom, Dow Chemical, Continental Airlines, Wal-Mart retail, Marvell Technology semiconductors.