June 26, 2013
Walter Energy, Inc. (NYSE:WLT) has hit the $10.00 level. It is down 12% today alone. The stock was at $40.00 earlier in 2013. This $10.00 even number represents a high risk but also very high reward buy level. It is known as an even number play.
June 24, 2013
iShares Dow Jones US Real Estate (ETF) (NYSEARCA:IYR) hit two major support levels today. Ring the bell, jump for joy, lock and load. Please note the chart below. Notice that IYR is hitting the top pivot from 2011 and the up-sloping trend line from 2012. When two major trend lines converge, the likelihood of a bounce is amplified. This means the odds are strongly in the favor of buyers.
June 20, 2013
One of the most important charts that any trade can follow is the chart of the 10-year U.S. Treasury yield. When yields move higher it means that bond prices move lower. So if you are following an equity like the iShares Barclays 7-10 Year Treasury Bond Fund (NYSEARCA:IEF), or the iShares Barclays 20+ Yr Treasury Bond (ETF) (NYSEARCA:TLT) you should realize that yields will move inversely to these equities. When bond yields move higher it will usually have a negative effect on the interest rate sensitive sectors such as utilities, REITS, home-builder stocks, and many consumer staples.
Today, the yield on the 10-year U.S. Treasury bond surged above 2.4 percent. This looks to be a breakout move on the yields today. Please understand, the yields are now extended and may pullback in the near term, but any consolidation on the yield chart should signal further upside. It would not be surprising to see another 50 basis point move in the yield on the 10-year U.S. Treasury Note. Some ETF’s that will trade higher with bond yields include the ProShares UltraShort 7-10 Year Treasury (ETF) (NYSEARCA:PST), and the ProShares UltraShort 20+ Year Treasury (ETF) (NYSEARCA:TBT).
June 19, 2013
Yesterday, I touched on the financial stocks and their relative weakness as the market was rallying. Today again, the financial stocks are weaker than that market. Is this a false signal or a valid heads up of a market sell off on the FOMC comments at 2PM ET?
Goldman Sachs Group Inc (NYSE:GS) is trading at $162.90, -1.25 (-0.76%) while JPMorgan Chase & Co. (NYSE:JPM) is trading at $54.02, -0.09 (-0.17%).
If the Federal Reserve were to make love to the stock market by extending QE indefinitely, one would think the financial stocks would be leading the market instead of lagging. Let’s see what happens at 2PM ET.
June 17, 2013
This Friday is going to be options expiration for the month of June. It is also a quadruple witching expiration which occurs four times a year on the third Friday of March, June, September and December. This is a time when stock index futures, stock index options, stock options and single stock futures will expire.
It is safe to say this is a period when the major stock indexes could be very volatile. Traders and investors should expect lots of rumors to be announced out of the blue. Just today, there is a rumor being reported that the Federal Reserve will begin to taper there current $85 billion a month QE-3 program. This is also a time when many leading stocks will be part of a rumor. Do not be surprised if you hear or read about a ridiculous upgrade or downgrade in many of the popular stocks. This unusual activity happens every quarter before quadruple witching expiration.
Some of the leading stocks that are usually very volatile during options expiration week include First Solar Inc (NASDAQ:FSLR), Green Mountain Coffee Roasters Inc (NASDAQ:GMCR), Netflix Inc (NASDAQ:NFLX), Priceline.com Inc (NASDAQ:PCLN), and many others. This is a trading week when traders and investors should expect the unexpected into the closing bell on Friday.
June 17, 2013
Shipping stocks, one of the few sectors still near/at their 52 week lows are on the move in dramatic fashion. The smallest of the group are getting the biggest move. FreeSeas Inc. (NASDAQ:FREE) is trading at $0.580, +0.215 (58.81%) while NewLead Holdings Ltd (NASDAQ:NEWL) is trading at $0.188, +0.048 (34.00%).
This is a classic short squeeze. Other shipping players are up as well, though not seeing massive gains. DryShips Inc. (NASDAQ:DRYS) is trading at $1.86, +0.04 (2.20%).
As long as the market stays strong over the next week, focus on the shipping stocks that are near their lows but have not moved in a big way yet. DryShips would be one, along with Genco Shipping & Trading Limited (NYSE:GNK).