7/8/2014 8:50:20 AM
A light volume day results in losses...
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- At Risk is generally neutral represented by "-". When it is "Bullish" or "Bearish" it warns of a potential change in the BIAS.
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Long DIA at $161.48 as of December 19, 2013
Long QQQ at $85.99 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.
Short GDX at $26.38 on July 3, 2014
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Equities gapped down at the open and worsened from there. Although the major indexes posted losses of less than one half of one percent, other indexes lost more than one percent. All equity indexes that we regularly monitor closed above their 20-, 50-, and 200-Day Moving Averages (DMAs) but the Russell-2000 (IWM 117.77 -2.05) and the Dow Jones Transports (IYT 147.14 -1.56) shifted to trading states. All maintain their BULLISH BIAS. Longer Term Bonds (TLT 111.49 +0.81) posted a fractional gain and maintained a downtrend state. It closed below its 20- and 50-DMAs and maintains a NEUTRAL BIAS. Trading volume remained light with 600M shares traded on the NYSE. Trading volume on the NASDAQ was also light with 1.670B shares traded.
There were no economic reports of interest released. We are readying for earnings season which kicks off on Tuesday, July 8th.
Apple (AAPL 95.97 +1.94) added two percent! AAPL constitutes about 20 percent of the NASDAQ-100 and nearly five percent of the S&P-500.
Seadrill Limited (SDRL 39.60 -0.62) lost 1.5%, once again closing just over its 200-DMA. The next target above remains $40.96, it's closing price on the last trading day of 2013. It is in an trading 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 and the Euro were all but unchanged. The dollar continues to trade below its 200-DMA while the Euro failed to break up through its 200-DMA.
The yield for the 10-year treasuries fell three basis points to close at 2.62. The price of a barrel of crude oil fell fifty-three cents to close at $103.53.
The implied volatility for the S&P-500 (VIX 11.33 +1.01) soared ten percent. The implied volatility for the NASDAQ-100 (VXN 12.44 +1.12) also soared ten percent.
Market internals were bearish. Decliners led advancers 2:1 on the NYSE and by 4:1 on the NASDAQ. Down volume led up volume better than 7:2 on both the NYSE and the NASDAQ. The index put/call ratio fell -0.04 to close at 1.35. The equity put/call ratio rose +0.12 to close at 0.61.
Conclusion/Commentary
Light volume trading results in losses across the board for equities. Although losses to the major indexes were relatively modest, higher beta indexes were hard hit with many losing more than one percent. The major indexes have held onto some of their gains from the previous section but the other equity indexes gave back their gains. Market internals were all bullish as equity indexes mostly hit all time or multi-year highs. This market is still the bulls to lose. Longer term bond prices continued breaking down. Gold miners (GDX 26.04 -0.46) closed down most of two percent. We advocated shorting GDX at $26.38. We will place a stop to lock in profits at $26.28. We will remain long equities for another day to see how the bulls react to the first day of earnings season.
We hope you have enjoyed this edition of the McMillan portfolio. You may send comments to mark@stockbarometer.com.
