This week is monthly Option Expiry for VIX & Stocks.
Wednesday is VIX Option Expiry...
Friday is monthly Stock Option Expiry.....
These two expiry may impact TAPE in a negative mode.
Net new 52 wk highs are NOT expanding with market highs on Friday, which is an important technical picture.
With S&P sitting @ 1517.93, it looks like it is NOT likely to take on all time high of 1576.09 in S&P 500 in this run. On a closing basis there is resistance of 1560.......
TAPE looks tired @ this stage, so it needs rest & MAY pullback slightly.
Support in S&P 500 is @ 1480 area
Ratio of Bull / Bear is also getting into overbought territory, currently Bulls are 54.7% & Bears are 21.1%
VIX also in OVERSOLD area @ 13.02 awfully close to 52 wk low of 12.29........
In summary, we MAY have few more days of WEAK rally & then MAYBE downward move.
It is important to look @ technicals in a comparative picture, RSI which reached 74 area in third week of January 2013, brought it down to support in two weeks time & rally started again to current levels.
SO...we are looking @ short spurt of weakness & then rally.......
It is important to recognize that technicals are NOT robust lately.
Friday we made a new 5 year high on below average volume, NOT a sign of "strong technical picture"
How you play this weakening technical picture depends on your OWN comfort level & stock performance of your portfolio.
SO..keep a close eye on the performance of your stock portfolio.
Overall trend is UP but it may be more bumpy from hereon.
BLOG does NOT give buy or sell.
Saleem
8 comments:
Hey Saleem,
I always appreciate your cautious tone when things look overdone. I try to prune poorly-acting stocks into strength and rotate back into better ones on weakness later.
I believe the low volume on Friday was attributable a lot to the storm, and given the S&P was only up .57%, I didn't see anything glaringly wrong with the internals. The "worst" indicator to me is definitely the bullish sentiment readings, but I think this rally is being fueled by new entrants, so we don't necessarily have to convert bears to bulls for rally continuation.
This week I'm more focused on many smaller cap earnings--that's the fun part for me! :)
Stocktrader
Hi Stocktrader,
In my analysis i look @ most recent internals & some historical numbers..to get some perspective for next week...NOT any easy task..but i write what i see......
It is also good to know that we MAY be ready to pull back in a normal / acceptable range......
I still believe that "it is a stock picker's market" & 2013 may be the-best in a long time......
Saleem
Hey Saleem,
Sold CLF @ 36.41. I did more research over the weekend and the general consensus is that recent rise in iron ore prices is only temporary. This is partially due to the major restocking that just happened (and therefore temporary) and also the supply response can be fierce if prices remain this high. That leaves an overall picture with which I am not comfortable.
Bought YNDX @ 24.766. This search engine is becoming ever more relevant in the world, just last week surpassing Microsoft's Bing. The earnings momentum looks good, and the daily and weekly chart both show good consolidation at the top of a cup/handle formation. I bought a semi-speculative position size and will let things play out further before adding more.
I am looking to add an even smaller speculative position with the rest of the CLF proceeds (SONS/DSPG/AUDC being high on that list).
Stocktrader
Hi Stocktrader,
Sold BAC & guess what..bought more BBRY @ $15.40.....MUCHO OVERSIZE position.....
Good luck with YNDX..i have to read up on that.
Saleem
Hey Saleem,
Good luck with BBRY! I am nervous for you with such a large position.
Ended up buying DSPG @ 6.725. It provides communication chips and recently announced the development of a mobile noise reduction chip that appears favorably positioned versus competitors due to smaller size and more usability. It has pulled back after a post-earnings spike and has a great overall chart so I thought now might be a good entry.
I still want to enter APKT's old field through SONS or AUDC (or both) but need to find something to sell. Trimming some CRUS given my DSPG purchase might be one way to accomplish that.
Stocktrader
Hi Stocktrader,
Thanks for your concern for my "over exposure in BBRY".....With today's sell of BAC my market exposure is only 50%.......
BBRY is 70% & YHOO is 30%
CRUS proposed sell is a good idea....
Saleem
Hey Saleem,
Ok, so I sold STLD @ 15.64 to free up some cash. It ran up somewhat due to the MUSA buyout last week, but I think overall steel consolidation is not in the cards right now. Also, if we do get concerned about things later this week/month like possibly the sequester debate, I could see steel stocks selling off quite a bit. Lastly, the chart is showing some heavy resistance in this area along with the overall chart being stretched well above the 50 and 200 DMAs--it may have needed to rest anyways.
With some of those sale proceeds, I bought SONS at 2.72. Before APKT's buyout by ORCL, it was said that SONS was taking share. The chart looks great longer term, and despite the big pop on the APKT news, it has rested for a week at the top of that range. Throw in the fact that consolidation in the sector might continue, and I believe this is worth a speculative buy. I will also try to add some AUDC in coming days.
Stocktrader
Hi Stocktrader,
Good luck with SONS......
AUDC is most interesting....actually makes money.....
Saleem
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