6/30/2014 8:41:33 AM
Multi-year high for NASDAQ-100...
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Stock Market Trends:
- ETF Positions indicated as Green are Long ETF positions and those indicated as Red are short positions.
- The State of the stock market is used to determine how you should trade. A trending market can ignore support and resistance levels and maintain its direction longer than most traders think it will.
- The BIAS is used to determine how aggressive or defensive you should be with an ETF position. If the BIAS is Bullish but the stock market is in a Trading state, you might enter a short trade to take advantage of a reversal off of resistance. The BIAS tells you to exit that ETF trade on "weaker" signals than you might otherwise trade on as the stock market is predisposed to move in the direction of BIAS.
- At Risk is generally neutral represented by "-". When it is "Bullish" or "Bearish" it warns of a potential change in the BIAS.
- The Moving Averages are noted as they are important signposts used by the Chartists community in determining the relative health of the markets.
Best ETFs to buy now (current positions):
Long DIA at $161.48 as of December 19, 2013
Long QQQ at $85.99 as of December 19, 2013
Long SPY at $181.19 as of December 19, 2013
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Value Portfolio:
Long SDRL at $33.90 on June 15, 2012 (Shares were put to us when options expired. We were paid $1.10 per share when we sold those options and bought shares for $35.00 each.) We have collected dividends: June 10, 2014 $1.00, March 5, 2014 $0.98, December 3, 2013 $0.95, September 5, 2013 $0.91, June 5, 2013 $0.88, $1.70 Dec 4, 2012, $0.84 Sep 4, 2012. Total = $6.28 in dividend payments.
Short FXE at $124.19 on August 24, 2012
Long UUP at $22.43 on August 24, 2012
Short FXE at $134.48 on October 4, 2013
Long SDRL at $35.43 on Feb 18, 2014
Long SDRL at $33.50 on March 21, 2014 (Shares were put to us when options expired. We were paid $1.50 per share when we sold those options and bought the shares for $35.00 each.) We have collected dividends: June 10, 2014 $1.00.
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Equities opened lower and spent the first hour and a half attempting to move higher with modest success. The rest of the morning and lunch hour say the bears drive prices lower but then the bulls began buying in early afternoon and the buying continued essentially into the close. This lef the major indexes with gains with the NASDAQ-100 closing at a multi-year high, and with the S&P-500 closing just below an all-time high. Even with the small gain for the Dow, it still closed even with its upward sloping 20-Day Moving Average (DMA). The Finance Sector ETF (XLF 22.76 +0.09) was able to close back above its 20-DMA. All other equity indexes we regularly monitor remain above their 20-, 50-, and 200-DMAs. Only the NASDAQ-100 maintained its uptrend state with all other equity indexes in trading states. The Dow Jones Transport Index (IYT 146.63 +0.44), the Semiconductor Index (SOX 629.27 +1.00), the Russell-2000 (IWM 118.34 +0.89), the Bank Index (KBE 33.36 +0.06), and the Regional Bank Index (KRE 40.33 +0.15) all posted fractional gains. All equity indexes remain with a BULLISH BIAS. Longer Term Bonds (TLT 113.27 -0.17) posted a modest loss but closed above its 20-, 50-, and 200-DMAs, has a NEUTRAL BIAS, and is in an uptrend state. Trading volume rose to a heavy 1.339B shares traded on the NYSE. Trading volume on the NASDAQ also rose to a heavy 2.629B shares traded.
There was a single economic report of interest released:
• UofMichigan Consumer Sentiment - Final (Jun) came in at 82.5 versus an expected 81.7
The report was released twenty-five minutes into the session.
Apple (AAPL 91.98 +1.08) added more than one percent. It had been falling since a 7:1 stock split on June 8th. AAPL constitutes about 20 percent of the NASDAQ-100 and nearly five percent of the S&P-500.
Seadrill Limited (SDRL 39.43 +0.25) rose fractionally. The next target above remains $40.96, it's closing price on the last trading day of 2013. It is in an uptrend state. We sold March 2014 $35.00 put contracts for $150 at the open on Feb 18th, 2014 and bought shares at $35.43. The stock is now trading ex-dividend for $0.98 and one dollar for total dividends issued of $1.98. The stock fell back to just below its 200-DMA. The shares were put to us at $35.00 less the $1.50 per share we were paid for the puts, so we have an effective price of $33.50.
The U.S. dollar fell three tenths of one percent while the Euro rose a quarter of one percent. The dollar continues to trade below its 200-DMA as does the Euro.
The yield for the 10-year treasuries was unchanged at 2.53. The price of a barrel of crude oil fell ten cents to close at $105.74.
The implied volatility for the S&P-500 (VIX 11.26 -0.37) fell three percent. The implied volatility for the NASDAQ-100 (VXN 12.03 -0.17) fell one percent. Both measures remain well below their respective 200-DMAs.
Market internals were bullish. Advancers led decliners 2:1 on the NYSE and by 5:3 on the NASDAQ. Up volume led down volume 4:3 on the NYSE and by 3:2 on the NASDAQ. The index put/call ratio rose +0.24 to close at 1.29 equity put/call ratio fell -0.06 to close at 0.52.
Conclusion/Commentary
Friday saw the bears force a lower open but then fail to hold that advantage and a second push lower failed to make much headway. This allowed the bulls to ensure a higher close across every equity index we regularly report on on much heavier than normal volume. This allowed the NASDAQ-100 to notch its highest close since the end of the .com era. Until something changes, we will remain long.
We hope you have enjoyed this edition of the McMillan portfolio. You may send comments to mark@stockbarometer.com.
