7/21/2014 9:04:59 AM
Equities back up near all time highs...
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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 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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A significant gap up open was followed by more buying leaving gains across the board for equities and with the Dow and S&P-500 closing just below their all-time highs and with the NASDAQ-100 closing at a new multi-year high. This left all three major indexes closing above their 20-, 50-, and 200-Day Moving Averages (DMAs). The three canaries; Russell-2000 (IWM 114.23 +1.75), Bank Index (KBE 32.39 +0.27), and Regional Bank Index (KRE 38.95 +0.37) allowing the Rusell-2000 to close back above its 200-DMA but with the bank indexes posting only fractional gains, they were unable to get back above their 200-DMAs. All three are below their 20- and 50-DMAs and are in downtrend states. All three maintain a BULLISH BIAS but all three have warned of a potential change to a BEARISH BIAS. Longer Term Bonds (TLT 114.52 -0.37) posted a modest loss but maintains an uptrend state and a BULLISH BIAS. It remains above its 20-, 50-, and 200-DMAs. Trading volume increased but remains well below average with 754M shares traded on the NYSE. Trading volume on the NASDAQ diminished and is below average with 1.799B shares traded.
There were five economic reports of interest released:
• UofMichigan Consumer Sentiment (Jun) came in at 81.3 versus an expected 84.0
• Leading Economic Indicators (Jun) rose +0.3% versus an expected +0.5% reading
Both reports were released with the first half hour after the open.
Apple (AAPL 94.43 +1.34) added more than one percent. AAPL constitutes about 20 percent of the NASDAQ-100 and nearly five percent of the S&P-500.
Seadrill Limited (SDRL 37.50 -0.67) lost most of two percent. 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 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 unchanged with the dollar poised just below its 200-DMA.
The yield for the 10-year treasuries was unchanged at 2.48. The price of a barrel of crude oil fell six cents to close at $103.13.
The implied volatility for the S&P-500 (VIX 12.06 -2.48) plummeted seventeen percent! The implied volatility for the NASDAQ-100 (VXN 13.40 -2.45) plummeted fifteen percent!
Market internals were bullish. Advancers led decliners better than 4:1 on both the NYSE and the NASDAQ. Up volume led down volume 7:2 on the NYSE and by 7:1 on the NASDAQ. The index put/call ratio rose +0.33 to close at 1.11. The equity put/call ratio fell -0.11 to close at 0.56.
Conclusion/Commentary
The market maintains a "buy the dip mindset." We are watching to potentially exit long trades. With the Dow and S&P-500 poised to close at new all time highs, you can not yet write the bull off. Stay tuned as we are day-to-day on maintaining our current long positions.
We hope you have enjoyed this edition of the McMillan portfolio. You may send comments to mark@stockbarometer.com.
