"It's going to be a wild day," a television commentator forecast Friday morning. He based his prediction on the number of economic releases and Fed speakers scheduled for the day and on an expected sell bias at the close due to Google's (GOOG) addition to the S&P 500. As Jim Brown noted in an email, GOOG's addition meant that funds had to buy 18 million GOOG shares and sell $7 billion dollars of their existing positions in S&P 500 companies.
Added to the mix was the expected bullish bias of window dressing, somewhat volatile crude prices and an announcement that auto-parts-supplier Delphi was asking a judge to throw out its labor contract. Company-related news had not been entirely positive in the pre-market session, with Cognos (COGN) disappointing and Dow Chemical (DOW) receiving a downgrade from Prudential.
Overnight action on foreign bourses and our own futures did little to predict wild action. The Nikkei coiled around the flat-line level all night. Until the open of U.S. markets, the DAX churned in a 40-point range just below the flat-line level. Our futures had dipped with the European open, but not far. Although the SPX futures lagged the others, Nasdaq and Dow futures were near fair value again thirty minutes before the open, not reacting much to February's Personal Income and Spending numbers released at 8:30 EST. Futures were right and the commentator was wrong: that early prediction for a wild day didn't turn out to be true.
An early bounce was met with selling, but the selling was fairly orderly, if relentless, all day in the SPX, OEX, and Dow. The RUT and TRAN perhaps proved more volatile, although perhaps it would be a stretch to term their churning actions wild, either, unless viewed through the narrow lens of a five-minute chart. At the end of the day, most indices showed modest losses, with some, such as the RUT, showing modest gains, but with headlines able to crow about a quarter that ended in the black. Despite the down day, the S&P 500's first quarter was the strongest in seven years, a Marketwatch.com article noted, and the Dow's, its best since 2002.
Bond traders didn't think much had happened, either. The yield on the ten-year note closed at 4.85 percent, showing only a two-thousandth difference with Thursday's close. Despite the reassurance offered by economic numbers that showed tame wage-inflation, the steadiness in the ten-year's yield validated the thought that Friday's action had not accomplished much and markets were in a wait-and-see mode ahead of next week's data.
Along with the pressure due to GOOG's addition, the failure of this yield to retreat much probably also pressured the markets. In addition, after first dipping, crude prices bounced ahead of the weekend and on continued geopolitical concerns and closed at $67.93 after Thursday's $68.33 close.
The SPX retreated this week, but the retreat was modest and the index managed another weekly close above the 10-week moving average.
Annotated Weekly Chart of the SPX:
Wednesday's Wrap noted some resistance levels that might prompt a rollover but suggested that as long as the TRAN was either climbing or trading sideways, the SPX, OEX and Dow weren't likely to fall far. The TRAN tends to lead those indices.
Daily Keltner channels suggest the possibility that the SPX may dip toward 1285-1287, while the 30-minute nested-Keltner chart suggests closer support, perhaps at 1292-1293. If the SPX should dip to 1287, watch the TRAN's action to gauge whether buying the dip would be wise or inadvisable. If the TRAN drops strongly, too, caution might be advisable. If the TRAN drops heavily, it might be time to switch to a sell-the-rallies mode. So far, no such TRAN drop has taken place.
If the TRAN does remain strong, those buying the SPX dips should be aware that resistance may be strengthening near 1300, and resistance has been proven at the top of the rising wedge. With important economic releases expected next week, be quick to take offered profits in either direction.
The Dow fell back through the former rising wedge resistance and closed below its daily 30-sma's support on Friday.
Annotated Daily Chart of the Dow:
The Dow's daily Keltner chart suggests that 11,064-11,074 could be tested, but there's bullish divergence on that chart and on the 30-minute nested Keltner channel. The possibility exists that the selling was overdone Friday and that the Dow could bounce back above that daily 30-sma, with that target just overrun. If the Dow can't maintain values above that average, especially if the TRAN is weak, watch for a possible dip to the 50-sma. If the Dow bounces harder, watch the 10-sma for rollover potential unless the TRAN is breaking higher again.
Annotated Daily Chart of the Nasdaq:
The Nasdaq's daily Keltner chart suggests that it's likely to face rather strong resistance in the 2352-2362 zone. Guard bullish profits if the Nasdaq should bounce into that zone and appear to stall there. Daily RSI does not yet suggest that the movement is overdone to the upside, but upside gains may still be limited, especially without the participation of the SOX. The 30-minute chart shows an equal likelihood that the Nasdaq will bounce up into that resistance zone or drop toward the 2234 first thing Monday morning, with the Nasdaq having created a neutral triangle during Thursday's and Friday's trading. No prediction of next short-term direction is possible with that setup. Watch for the direction of the break, but be wary of that mentioned upside resistance if bullish and of the 10-sma's possible support if bearish.
The SOX has been holding back the Nasdaq, and it continued to do so into the end of the week.
Annotated Daily Chart of the SOX:
Friday's economic releases included February's Personal Income and Spending. One source forecast Personal Income up 0.4-0.5 percent after a prior 0.7 percent gain, but the actual number was a little softer, up 0.3 percent. Real disposable income rose 0.2 percent, the slowest growth in seven months. These numbers did not suggest any upside inflation pressure from wages.
Personal Spending was forecast to climb 0.0-0.1 percent, down from the prior 0.8 percent, and the number came in line with expectations at 0.1 percent. Core inflation figures climbed 0.1 percent and the savings rate was down 0.5 percent, continuing an eleven-month streak of negative savings rates. On a yearly basis, core prices rose 1.8 percent, termed a little hotter than expected by one commentator. While market reaction was muted, futures did rise after this number was reported.
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The University of Michigan's March Consumer Sentiment and Factory Orders for U.S.-made manufactured goods were next on the economic calendar. The Consumer Sentiment index rose more than the expected 86.9 number, to 88.9. February's Consumer Sentiment had been 86.7. Some were perplexed by the timing of the rise in sentiment, given the concurrent rise in gasoline prices, but the expectations and current conditions components both increased.
Factory orders disappointed, rising only 0.2 percent when they had been expected to rise 1.4 percent after January's revised 3.9-percent drop. Shipments, orders for core capital goods equipment and inventories fell, and unfilled orders rose. The drop in crude prices in February was at least partly responsible for the drop in the value of shipments since no adjustments are made for price changes. Transportation orders jumped 13.6 percent, driving orders for durable goods higher, too, but new orders dropped 2 percent when transportation orders were excluded. Some economists opined that this number would do little to impact rate-hike decisions, particularly with the ISM number that's due next week being considered of more importance.
The Chicago PMI also gave a glimpse of what the ISM might report next week and perhaps one in which many invested more trust. March Chicago PMI increased to 60.4 percent, up from February's 54.9 percent. The 50 percent level is a boom-or-bust level for this figure, with the majority of businesses reporting improving conditions when the number is over 50 percent. Components that rose included new orders, to 62.2 from the previous 54.9 percent, and employment growth, to 55.6 from the previous 54.9 percent. Prices paid eased to 71.1 from the previous 71.6 percent. Predictions for Monday's ISM had been from 57.7-58.0 percent prior to the release, but afterwards some were predicting numbers as high as 59.0 percent.
Company-related news dominated news reports Friday, with Delphi's decision domineering. Delphi reportedly took the drastic step of asking that union contracts and some GM contracts be set aside after the United Auto Workers rejected the company's latest demand for wage and benefit cuts. (Note: This report discusses developments without taking the side of either the union or the company. Nothing here is said in the spirit of a statement favoring one or the other.) Delphi also seeks to rid itself of some GM contracts it deems unfavorable.
One analyst likened Delphi's request to the pulling of the trigger in the company's negotiations with the unions. The UAW perceived it that way, too, immediately commenting that there was no basis upon which to continue talks with the company and charging that the company was misusing the bankruptcy procedure. One immediate effect of Delphi's request, some believe, is to ensure that weeks or months may be required to sort out union and company demands although some would reason that the company's step would hasten a resolution.
GM's CEO Rick Wagoner was not happy with the development but said that it was an anticipated possible step, and an analyst on CNBC concurred that GM could suffer from the Delphi development. Delphi's cost-trimming steps could subject GM to taking on more costs and charges. GM did drop to a day's low of $20.34, but rebounded to close $0.21 higher.
Delphi also announced that it could cut about 8,500 jobs across the globe, freeze the current hourly pension plan on October 1 and current salaried pension plan on January 1 of next year. Delphi will eliminate some product lines and trim the number of executives.
Other company news included GOOG's addition to the S&P 500, of course. GOOG traded 36.5 million shares today with the 30-day average volume at 13 million shares. All that volume produced a doji, however, with price changing only 0.40 percent for the day.
In addition to economic releases and company news, many paid attention to what FOMC members might have to say. One of the Fed speakers Friday was Kansas City Fed President Hoenig. As has been mentioned lately by others and covered previously on these pages, he expects the robust rebound of the first quarter to moderate, with his expectation for 3.5 percent growth for the full year. He mentioned an expectation that job growth would slow, too, but feels that the economy is vigorous and that core inflation should remain steady for this year, toward the upper end of the Fed's comfort level. All in all, his take on the economy and inflation trends might have encouraged those who hope for a pause soon, although he made no promises.
Earnings reports slow next week. So do the economic releases, but some of those reports could impact financial markets. That is particularly true when the FOMC has reiterated lately that committee members will be watching data as they make decisions about rates.
Economic reports next week start off with February's Construction Spending and March ISM at 10:00 Monday morning. February's Pending Home Sales will also be released. March Auto and Truck Sales follow, with those numbers expected to take a hit due to fewer fleet sales, according to one headline. Wednesday's reports include March ISM Services at 10:00 and the usual Crude Inventories at 10:30. Thursday's contingent includes the normal Initial Claims at 8:30 and then Natural Gas Inventories. Friday's schedule is busy and potentially market moving, with March's Non-Farm Payrolls, Average Workweek, Hourly Earning and Unemployment Rate at 8:30, February's Wholesale Inventories at 10:00 and February's Consumer Credit at 3:00.
Global developments should not be ignored. Big events in the Eurozone next week include PMI and Service PMI on Monday and Wednesday, respectively. Both are expected to rise, with the accidental release of Germany's PMI on Friday confirming that expectation. February's Retail Sales come on Wednesday, and are expected to slip after January's sharp rise. Here, too, Germany's release preceded that of the Eurozone and showed a softening, confirming Eurozone expectations for next week. Thursday, the ECB meets. No rate change is expected, but as happens here in the U.S., many may be particularly attentive to what is said and how that might impact expectations for their May meeting. An ECB member spoke today, praising the central bank's steps toward stability, keeping inflation risks contained, employment and growth strong, and rates low.
The Bank of Japan's much-watched Tankan survey will be released April 3 (Tokyo). The diffusion indices are expected to rise for large manufacturers, large non-manufacturers and small manufacturers, while that for small non-manufacturers is expected to remain unchanged. Higher costs are not expected to hit profits.
The SPX ended the week between strongest support in the 1283-1287 zone and strongest resistance in the 1307-1311 zone, so not in a good place to establish new positions on either the bearish or bullish side. The best tactic might be waiting until one of those is hit and assessing market conditions, including the TRAN's actions, before initiating new positions. Until the SPX breaks out of the choppy rise that's predominated for two months, selling at the top of the rising wedge and buying on bounces from the 10-week moving average might be best idea around, but with only small positions.
The TRAN's importance as a leading index has been mentioned several times in this article. Last week, the TRAN produced a doji at the top of a climb, but it failed to confirm the potential reversal signal this week. The week's candle was a small-bodied candle indicative of indecision, but it was not a tall red candle confirming an evening-star pattern. For the seventh week in a row, the TRAN has closed a week above a weekly envelope that had always before provided resistance on weekly closes, with that envelop now at 4472.51. The TRAN's performance remains bullish, despite a long-in-the-tooth rally, and bears should continue to exercise caution with bearish SPX, OEX and Dow positions while it is performing bullishly.
In contrast, the SOX continues to show some weakness, and Nasdaq bulls should continue to exercise caution until the SOX shows more strength. The Nasdaq ended the week consolidating above just broken resistance. In contrast to the SOX, the RUT ended the week at yet-another record weekly closing high, also rejecting a confirmation of a possible reversal signal that had been forming. While the sustainability of a Nasdaq rally is in question as long as the SOX remains weak, the RUT's strength argues against too strong a dip in the Nasdaq until the small caps weaken. Mixed evidence such as this can predict choppy behavior.
The three indices that often lead--the RUT, SOX and TRAN--lead different directions, and the indices are pulled different directions, too. The ten-year yields produced a doji, with bonds failing to predict next direction, either. However, some interest-sensitive sectors such as the DJUSHB, BIX and BKX had a rough week. Perhaps they're taking on the leadership role, and we should be watching them instead of the old standards. Keep them on your radar screen, too.
Trade with care next week until all these different market strands line up in
closer juxtaposition and expect chop until they do. No indices ended up at
strongest support or strongest resistance, so wait until you've got better
which to test your play before entering new plays in either
direction. If there's a bounce to strong resistance or a dip to strong support
ahead of Monday's 10:00 release of the ISM, study the TRAN, SOX and RUT before
taking a position.
Arch Cap. Grp. - ACGL - cls: 57.74 chg: +0.93 stop: 55.95
Why We Like It:
BUY CALL MAY 55.00 UOZ-EK open interest= 1 current ask $4.10
Picked on April xx at $ xx.xx <-- see TRIGGER
Panera Bread - PNRA - close: 75.18 chg: +0.37 stop: 71.95
Why We Like It:
BUY CALL MAY 70.00 UPA-EN open interest=1007 current ask $6.80
Picked on April 02 at $ 75.18
Biomet - BMET - close: 35.52 chg: -0.52 stop: 36.21
Why We Like It:
BUY PUT MAY 37.50 BIQ-QU open interest= 395 current ask $2.70
Picked on April 02 at $ 35.52
Texas Industries - TXI - cls: 60.49 chg: -0.99 stop: 61.35
Why We Like It:
BUY PUT MAY 60.00 TXI-QL open interest= 66 current ask $2.90
Picked on April xx at $ xx.xx <-- see TRIGGER
Apple Computer - AAPL - close: 62.72 chg: -0.03 stop: 57.65
Shares of AAPL churned sideways on Friday with its trading range narrowing somewhat into the afternoon. Volume was light. This remains an aggressive, speculative buy the bounce play. AAPL's P&F chart is bearish and points to a $52 target but the stock rebounded pretty sharply on Wednesday from its simple 200-dma. Most of the technical indicators on the daily chart have been stuck in oversold territory and shares were due for a bounce. Traders can choose to buy calls here but it might be better to wait. Look for a dip toward the $60 region and then look for a bounce. We have been aiming for the simple 50-dma but that means we have a moving target. Currently the 50-dma is at $67.85. We're going to adjust our target to the $67.00-68.00 range. More conservative traders might want to tighten their stops closer to the $60 level.
Picked on March 29 at $ 62.30
Anadarko Petrol. - APC - cls: 101.01 chg: -1.99 stop: 97.90*new*
A pull back in crude oil prices on Friday sparked some end of the week profit taking in the oil sector. Shares of APC gapped lower and dipped to the $99.91 level before bounce. This actually looks like a potential entry point to buy calls but we would wait for a new move over the $102.00 level before initiating new positions. The P&F chart for APC is bullish with a spread triple-top breakout buy signal pointing to a $121 target. We are aiming for the $109.50-110.00 range. We are adjusting our stop loss to $97.90. We do not want to hold over the late April earnings report.
BUY CALL MAY 100 APC-ET open interest=3877 current ask $5.70
Picked on March 28 at $102.10
Burlington NrthSanta Fe - BNI - cls: 83.33 chg: +0.22 stop: 78.99
A dip in oil prices lent some strength to the transports but gains were muted. Shares of BNI closed higher but only after another failed breakout at the $84.00 level. The overall pattern for BNI remains bullish. This past week the stock broke out over resistance in the $82.00-82.50 region to hit new all-time highs. The P&F chart hit a new buy signal and points to a $105 target. We would consider new bullish positions here but traders should be ready for a dip back toward the $80.00 level, which should be round-number support. Our target is the $87.50-90.00 range. We do not want to hold over BNI's late April earnings report. In the news on Friday BNI announced plans to expand rail capacity in Missouri, New Mexico, Texas, Washington, and Wyoming.
BUY CALL MAY 80.00 BNI-EP open interest=428 current ask $5.40
Picked on March 27 at $ 82.51
Bear Stearns - BSC - close: 138.70 change: +0.25 stop: 131.99
The XBD broker-dealer index managed to close in the green on Friday and close near an all-time high. The sector remains positive although the trading action in BSC is starting to look like a short-term top. Short-term technical oscillators for BSC are hinting at a further consolidation, probably toward the $136 region. Yet the stock could bounce at the 10-dma (137.25) or the 21-dma (134.92). We would watch for a dip before considering new bullish positions at this time. Our target is the $144-145.00 range.
Picked on March 24 at $137.65
ConocoPhillips - COP - close: 63.15 chg: -1.33 stop: 61.45
After a bullish week COP suffered some profit taking on Friday following a dip in crude oil futures. It looks like the bulls were defending the stock near technical support at the 200-dma (62.65). We would use any bounce above the $62.00 level as a new bullish entry point. More conservative traders may want to wait for a new move over $64.00 before initiating new call positions. Our target for COP is the $69-70 range. The P&F chart for COP is bullish with a triangle breakout and an $82 target. Statistics show that a bullish triangle breakout in a positive market is one of the best performing patterns to trade. Don't forget that COP is due to complete its acquisition of BR this weekend and we don't know if the transaction will have an impact on COP's shares come Monday.
BUY CALL MAY 60.00 COP-EL open interest=14888 current ask $4.60
Picked on March 29 at $ 64.80
Deere Co - DE - close: 79.05 change: -0.73 stop: 74.95
DE displayed relative strength most of the week and the stock hit a new high just under the $80.00 mark so it's not too much of a surprise to see some profit taking on Friday. We would watch for a dip into the $77.50-78.00 region and use it as a new bullish entry point to buy calls. More conservative traders may just want to wait for a breakout over the $80.00 mark. Our target is the $84.00-85.00 range. The P&F chart is bullish and points to a $112 target.
BUY CALL MAY 75.00 DE-EO open interest=157 current ask $5.70
Picked on March 22 at $ 77.29
Grainger W.W.Inc. - GWW - close: 75.35 change: -0.41 stop: 73.95
We are urging caution here. We were triggered on a morning spike higher this past Thursday but GWW failed to hold the breakout over resistance at the $76.00 level. The short-term technical oscillators are starting to roll over into bearish signals and the MACD doesn't look very healthy on the daily chart. The bottom of GWW's two-week trading range is $74.00. Aggressive traders might want to consider buying a bounce near $74.00. We are suggesting that traders wait for a new move over $76.00 or $76.50. Our target is the $79.90-80.00 range.
Picked on March 30 at $ 76.51
Lehman Brothers - LEH - close: 144.53 change: +0.99 stop: 140.79
LEH is still consolidating sideways. The stock did out perform the broader market on Friday but shares are stuck between support ($141 and the 50-dma) and resistance. The overall pattern remains bullish for LEH and this looks like an attractive area to consider call positions with shares near support. The MACD indicator on the daily chart is nearing a new buy signal. We are keeping our stop under support near $141. More conservative types might want to play their stop loss closer to the 50-dma near $142.50. We do expect some resistance near $150 but our target is the $153-155 range.
BUY CALL MAY 140.00 LES-EH open interest=274 current ask $7.80
Picked on March 22 at $144.61
Nabors Inds. - NBR - close: 71.58 chg: -2.20 stop: 68.85
NBR has been in a sharp rally mode for over a week. We are surprised the stock has gone this long without some profit taking so Friday's pull back wasn't too much of a surprise. More conservative traders may want to lock in some profits. We continue to target the $74.00-75.00 range. We would watch for support near $70.00. Don't forget that NBR is due to split 2-for-1 on April 18th. Don't forget that we plan to exit ahead of the late April earnings report.
Picked on March 28 at $ 68.85*gap higher*
Southern Peru Copper - PCU - close: 84.48 chg: -0.02 stop: 79.95
Metal and mining stocks turned in a strong week and the group was hit with profit taking on Friday. Fortunately, the bulls were ready and bought the dip in PCU at $82.60. We see the intraday rebound on Friday as a new entry point to buy calls. The P&F chart points to a $102 target. We are aiming for a rally into the $89.50-90.00 range. We do not want to hold over the late April earnings report.
BUY CALL MAY 80.00 PCU-EP open interest=365 current ask $7.00
Picked on March 30 at $ 84.50*gap higher*
Pantry Inc. - PTRY - close: 62.39 chg: +0.36 stop: 58.85
PTRY is still inching higher. The path of least resistance for PTRY seems to be up. However, the momentum has stalled and volume has dried up significantly. While we would consider new bullish positions here a preferable entry point would be a bounce from the $60 region. Our target is the $67.00-68.00 range. The P&F chart points to a $78 target. We do not want to hold over the late April earnings report.
BUY CALL MAY 60.00 PQR-EL
open interest= 43 current ask $5.00
Picked on March 26 at $ 61.85
Rio Tinto - RTP - close: 207.00 chg: -1.48 stop: 198.60
Friday proved to be another volatile day for RTP. The stock gapped lower and dipped toward the $201 level before bulls stepped in to buy the dip. Shares rebounded just high enough to fill the Friday morning gap. We remain bullish but we're not suggesting new call positions at this time. RTP is relatively close to our target in the $210-212 range. More conservative traders may want to plan an early exit right here or anywhere north of $209.
Picked on March 26 at $198.60
Schlumberger - SLB - close: 126.57 chg: -1.66 stop: 119.99
SLB experienced some profit taking on Friday after a bullish week of gains. Traders bought the initial dip toward the $125.00 level. If you were nimble enough a bounce from $125 could have been used as a new bullish entry point. Our target is the $129.75-130.00 range. The P&F chart is bullish and points to a $144 target. Please note that SLB is due to split 2-for-1 on April 10th. Our post-split target will be the $64.87-65.00 range. We do not want to hold over the April 21st earnings report.
Picked on March 23 at $123.02
Toyota Motor Corp. - TM - close: 108.90 chg: -1.25 stop: 105.95
TM did not escape the profit taking on Friday. It is unfortunate that the stock did not hold on to Thursday's breakout over the $110 level. If the current pattern of slowly drifting higher continues then we would watch for a dip back toward $107.00-107.50 before shares bounce higher again. We are not suggesting new bullish positions at this time. Our target is the $112.50-115.00 range. Traders with a longer-term horizon may want to aim higher.
Picked on March 12 at $106.68
Tenaris - TS - close: 180.67 chg: -1.83 stop: 177.79
We have nothing new to report on for TS. This oil services provider of steel pipe and other supplies has been stuck in a sideways consolidation pattern for more than three weeks. We are trying to catch a breakout over resistance in the $185-186 region. Currently we're suggesting a trigger to buy calls at $186.75. If triggered we will target a rally into the $198-200.00 range, which is consistent with the bullish P&F chart target. Keep your eyes and ears open for news this coming Thursday when TS will hold an investor conference.
Picked on March xx at $xxx.xx <-- see TRIGGER
Valero Energy - VLO - close: 59.78 change: -0.54 stop: 56.45
VLO, like most of the oil sector, experienced some profit taking on Friday. Bulls bought the initial dip at the simple 10-dma. While the current trend is bullish the momentum seems to be slowing. Short-term oscillators are starting to roll over. We are not suggesting new bullish positions at this time. Our target is the $62.50-63.00 range.
Picked on March 15 at $ 57.55
Gannett Co Inc. - GCI - close: 59.92 chg: -0.02 stop: 60.65
This doesn't look good. GCI has been trying to inch higher the last couple of sessions and volume has come in above average. So far resistance near $60.00 and its 21-dma are holding but it doesn't look good for the shorts. We are not suggesting new bearish positions at this time. We will keep our stop loss at $60.65. We do plan to exit ahead of the April 12th earnings.
Picked on March 19 at $ 59.04
(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)
Encana Corp. - ECA - close: 46.73 chg: -1.57 stop: n/a
We have three weeks left before April options expire. If this is going to be a profitable strangle play ECA needs to trade over $53.50 or under $36.50 soon. Right now odds look better for the calls but the MACD on the daily chart is nearing a new sell signal. We are not suggesting new strangle positions. Our strangle strategy involves the April $50 calls (ECA-DJ) and the April $40 puts (ECA-PH). Our estimated cost is $3.45.
Picked on January 10 at $ 45.56
Ryland Group - RYL - close: 69.40 change: -0.11 stop: n/a
The homebuilders continue to feel pressure from rising interest rates. Short-term technicals on RYL are looking more bearish. We have three weeks left before April options expire. Unfortunately, if this is going to be a profitable strangle play RYL needs to trade under $63. Conservative traders may want to plan an early exit now or on any dip toward the $65 region to salvage capital. We are not suggesting new strangle positions at this time. Our play involves the April $80 calls (RYL-DP) and the April $70 puts (RYL-PN).
Picked on January 22 at $ 75.19
Biosite Inc. - BSTE - close: 51.93 chg: +0.33 stop: 52.05
Ah, yes... Murphy's law wouldn't have it any other way. Most of the market turned lower on Friday but not BSTE. The stock broke out over short-term resistance at the $52.00 level. Of course we shouldn't be surprised. We've been urging caution for the couple of days given the reversal. Our stop loss was at $52.05.
Picked on March 28 at $ 49.75
Long-time Option Investor subscribers understand the site's emphasis on education. For many years, the "feed a man a fish" analogy was often quoted on the site. Our pages are filled with helpful advice on trading techniques, indicator usage, historical tendencies and the emotional aspect of trading, but it's not always easy to locate that information. No central listing of the Trader's Corners articles exists in the current format.
It's about time to go fishing through my listing of Trader's Corner articles produced for weekend editions of the newsletter. I thought I'd provide this reference for those who might want to investigate some aspect of technical trading and not know where to find the article. Unless otherwise indicated, I (Linda Piazza) was the writer of each of these articles, but I've included descriptions of articles written by other writers substituting for me on the weekend Trader's Corners.
To access any of the articles listed here, sign in on the website, click "Option Investor Daily" on the left-hand sidebar, and then scroll back until you find the date of the article. When you've clicked on that date, just click "Trader's Corner," and you'll be taken right to the article you seek.
"What's Your Favorite Indicator": January 30, 2005
"Free Website: What's to See at the CBOE": February 6, 2005
"Repairing Losing Positions": February 13, 2005
"Technical Analysis Is for the Birds": February 20, 2005
"Waiting for the Retest": February 27, 2005
"Got the Right Time?": March 6, 2005
"Building Better Trendlines with Logs": March 13, 2005
"Using Keltner Channels to Set Targets":
March 19, 2005
"Maintaining Control": March 26, 2005
"Trust Yourself and Nobody Else": April 2, 2005
"Turning the Abstract into the Concrete": April 9, 2005
"Sweeping Up": April 16, 2005
"PDQ (Pretty Darn Quick Customer Support)": April 23, 2005
"If/Then Statements with Keltner Channels": April 30, 2005
"Keltner-Style Divergence": May 7, 2005
"Just for Newbies: What on
Earth Are We Talking About?": May 14, 2005
"Going Keltnering": May 21, 2005
"When It's Good to Feel Bad:" May 28, 2005
"Range Bound or Trending?": June 4, 2005
"Basics of Candlestick Charting, Part 1": June 11, 2005
Gravestones and Shooting Stars: the Doji as a Reversal Signal in
Candlestick Charting": June 18, 2005
"Other Candlestick Reversal Signals": June 25, 2005
Reversal Signals: Multiple Candlestick Formations: July 2, 2005
"The Buck Stops Here": July 9, 2005
Up": July 16, 2005
"Fair Is Fair, or Is It?": July 23, 2005
"Curbing the Markets": July 30, 2005
"Put/Call Ratio: August 6, 2005
"Easy, Breezy Identification of Historical Support and Resistance Using Donchian
Channels": August 14, 2005
Analysis of Breadth and Volatility Measures": August 20, 2005
"Think Again": August 28, 2005
"That Hidden Average": September 4, 2005
"A Primer on Elliott Wave Theory": September 10, 2005
"What Day of
the Week Is It?": September 17, 2005
"Where's My Stop?": September 24, 2005
"Try to Top This--the Tale of Two Tails":
October 1, 2005
"The Best Fit": October 8, 2005
"Ozzy Osbourne's Option Advice": October 15, 2005
"Not-So-Secret Diaries": October 22, 2005
"New Kid on the Block": October 29, 2005
"Early Birds Get the Worms": November 5, 2005
"Opex Action Every Week of the Month": November 12, 2005
"Continuing Education": November 19, 2005
"Thankfulness": November 26, 2005
"Old School, New School": December 3, 2005
Gap in Logic": December 10, 2005
"Divergence": December 17, 2005
"The Transformers": December 25, 2005
"Yielding Up the Answers": December 31, 2005
"On Balance, It's a Good Indicator": January 7, 2006
"It's All About Commitment": January 14, 2006
"Double-Crossed": January 21, 2006
"It's a Record": January 28, 2006
"Step Away from the Computer": February 4, 2006
"Your Cup of Tea": February 11, 2006
"Shivers": February 18, 2006
"A Primer on Elliott Wave Theory--Part 1": February 25, 2006
"A Primer on Elliott Wave Theory--Part 2": March 4, 2006
"Relatively Speaking, It's a Simple Indicator": March 11, 2006
"Overdone Moves": March 18, 2006
"'Tis the Season": March 25, 2006
Today's Newsletter Notes: Market Wrap & Trader's Corner by Linda Piazza and all other plays and content by the Option Investor staff.
Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.
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