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VIDEOBuzz on the Street: Whipsaw Action in S&P Opens Trading Opportunities
By
Terry Woo Jul 30, 2010 3:30 pm
Some of this week's most insightful and timely vibes.
All day and every day, some of the stock market's best and brightest traders and money managers share their ideas, insights and analysis in real-time on Minyanville's Buzz & Banter. Check out some of the best of the buzz and for those Minyans not currently subscribed, click here for a free two-week trial.
Note: Some links may require Buzz subscriptions.
Monday, July 26, 2010
Smita Sadana
The Market's Stress Test
The one great thing about the market is that it offers many different time frames to choose for trading. Since I spend most of my day with the tape, I usually pay close attention to short-term signs of confirmation and divergences.
In that spirit, McClellan Oscillator has reached levels not seen since Jan 2009. At that time though, I thought Alarm bells were ringing.
Given such high readings, the market might be vulnerable to a slight dip. We last saw overheated numbers from Standard and Poors Short Range Oscillator on 7/21, Bernanke provided the excuse for the market retreat.
However, I do think that just like the earlier episode with the S&P Oscillator, the dip might be temporary. Since there are no red flags on my horizon thus far, I might simply lower my long exposure (with an intent to reload it, if a dip occurs), rather than go short. I would also note that the best way for the market to work off such readings would be a sideways consolidation.
Click to enlarge
Michael Paulenoff
Shanghai Extends July Rally
The Shanghai Composite Index closed higher for the seventh consecutive session, and more importantly from a technical perspective closed above its (now flat) 50 DMA for the first time since mid-April. The strength extends the July rally, which could be morphing into a technically significant key monthly upside reversal.
If the SH Comp hurdles and remains above the June high at 2598.33 at Friday's close, then the benchmark China equity index will register a potentially very powerful positive technical signal that should be associated with a near and possibly intermediate-term turn in trend. ETF traders may want to watch the iShares FTSE/Xinhua China 25 Index (FXI). Such a signal could have meaningful positive implications for global growth, corporate profits, and equity prices.
Click to enlarge
Phil Erlanger
Short Squeeze Update
Last week's Short Squeezes from this screen averaged 3.25%, compared to a 2.29% gain in the S&P 500. These performance numbers include basis pricing after the first hour of last week’s trading for new additions to these screens. Since we at my firm began publishing these screens (3059 calendar days ago), the hedge has gained 420.92% compared to a 13.52% change in the S&P 500. Issues that contributed to the strength of the Short Squeeze screen: XLNX (5.84%), BRCM (4.92%), AMCC (5.97%), JNPR (6.28%) and MCHP (4.80%.).
Because I expect these Issues to outperform the market, I see these stocks as potential longs.
Every week we update this screen from my selected Erlanger universe of issues (these include the Dow 30 issues, S&P 100 issues, NASDAQ 100 issues and more). This screen mines for those issues that our data uncovers as "short squeeze" candidates. I find these attractive because the price action is relatively positive despite the heavy short selling.
Click to enlarge
Tuesday, July 27, 2010
Smita Sadana
Grudging Pullback
Tragedy in life normally comes with betrayal and compromise, and trading on your integrity…. That's really where failure comes.
-Tom Cochrane
The way I see it, I think it’s just a decline brought on by `exhaustion’. As I shared yesterday, some of the indicators I follow hit overheated territory and this is a necessary respite. One way to work it off would be to do just what the market is doing!
But ‘grudging’ pullbacks like this do not necessarily start new downtrends. Declines that become virulent are often brought upon by several indexes and indicators being in discord. I have shared several instances of such acts of betrayal. The most recent was from the Euro in early May that unleashed a serious decline. (Click here for my May 12th note)
As of now, I would be looking to buy a low volume decline closer to the vicinity of 1094 to 1100; 1094 is the point of convergence of the 50 and 200 EMA's.
Click to enlarge
Todd Harrison
Eyes of the World
Today is an important close through a technical lens; the broader market, as measured by the S&P, is currently tracing out a sequence of four lower highs, which is a bearish progression. If Hoofy can buck the Turnaround Tuesday trend, he'll have a feather for his rally cap.
Just something to keep an eye on as we edge towards the bookend bell.
Click to enlarge
Wednesday, July 28, 2010
Scott Redler
POT Ready to Go
Agricultural group is getting better. Potash (POT) is in the mix.
It has a great pattern.
My buy price: 98-98.50 for a move back to 103 -105 short term
Then 110.
Click to enlarge
Phil Erlanger
Latest Short Interest Release Summary
Short interest numbers for the NYSE are reported for the period of settlement date July 15th. The NYSE saw short interest decrease to 13,757,829,749 from 13,927,200,566 which is revised. My calculation shows a decrease of shares 169,370,817 or -1.21%. There were 1,583 increases with 1,697 decreases. In the last 18 reporting periods, NYSE has seen more advancers than decliners in 10 of the 18 reporting periods.
During this period on a trade date basis (6/25 to 7/12), the S&P rose 0.18%. The conclusion is shorts basically remained with what they were short. In the prior reporting period, shorts held to what they were short just as they have for this latest period.
There were no outliers of note in terms of increases or decreases that overly contributed to the change in short positions.
Short interest numbers for NASDAQ are reported for the period of settlement date July 15th. Short interest rose to 7,422,838,678 shares from 7,392,006,897 for an increase of 30,831,781 or 0.42% . There were 1,187 increases and 1,533 decreases. In the last 18 reporting periods, NASDAQ has seen more advancers than decliners in 14 of the 18 reporting periods.
Dedicated short sellers made 5.35% in June, as reported by www.hedgeindex.com. YTD this index is down -2.77%. July will see short sellers end their two month win streak and see the YTD number drop back to down -8% at least as it stands right now. 2009 will go down as the worst year since 2003 for short sellers. For 2009 this style lost -25.03%. In 2008, short sellers made 14.87%. In 2007 short sellers made 6.04%.
Note: Some links may require Buzz subscriptions.
Monday, July 26, 2010
Smita Sadana
The Market's Stress Test
The one great thing about the market is that it offers many different time frames to choose for trading. Since I spend most of my day with the tape, I usually pay close attention to short-term signs of confirmation and divergences.
In that spirit, McClellan Oscillator has reached levels not seen since Jan 2009. At that time though, I thought Alarm bells were ringing.
Given such high readings, the market might be vulnerable to a slight dip. We last saw overheated numbers from Standard and Poors Short Range Oscillator on 7/21, Bernanke provided the excuse for the market retreat.
However, I do think that just like the earlier episode with the S&P Oscillator, the dip might be temporary. Since there are no red flags on my horizon thus far, I might simply lower my long exposure (with an intent to reload it, if a dip occurs), rather than go short. I would also note that the best way for the market to work off such readings would be a sideways consolidation.
Click to enlarge
Michael Paulenoff
Shanghai Extends July Rally
The Shanghai Composite Index closed higher for the seventh consecutive session, and more importantly from a technical perspective closed above its (now flat) 50 DMA for the first time since mid-April. The strength extends the July rally, which could be morphing into a technically significant key monthly upside reversal.
If the SH Comp hurdles and remains above the June high at 2598.33 at Friday's close, then the benchmark China equity index will register a potentially very powerful positive technical signal that should be associated with a near and possibly intermediate-term turn in trend. ETF traders may want to watch the iShares FTSE/Xinhua China 25 Index (FXI). Such a signal could have meaningful positive implications for global growth, corporate profits, and equity prices.
Click to enlarge
Phil Erlanger
Short Squeeze Update
Last week's Short Squeezes from this screen averaged 3.25%, compared to a 2.29% gain in the S&P 500. These performance numbers include basis pricing after the first hour of last week’s trading for new additions to these screens. Since we at my firm began publishing these screens (3059 calendar days ago), the hedge has gained 420.92% compared to a 13.52% change in the S&P 500. Issues that contributed to the strength of the Short Squeeze screen: XLNX (5.84%), BRCM (4.92%), AMCC (5.97%), JNPR (6.28%) and MCHP (4.80%.).
Because I expect these Issues to outperform the market, I see these stocks as potential longs.
Every week we update this screen from my selected Erlanger universe of issues (these include the Dow 30 issues, S&P 100 issues, NASDAQ 100 issues and more). This screen mines for those issues that our data uncovers as "short squeeze" candidates. I find these attractive because the price action is relatively positive despite the heavy short selling.
Click to enlarge
Tuesday, July 27, 2010
Smita Sadana
Grudging Pullback
Tragedy in life normally comes with betrayal and compromise, and trading on your integrity…. That's really where failure comes.
-Tom Cochrane
The way I see it, I think it’s just a decline brought on by `exhaustion’. As I shared yesterday, some of the indicators I follow hit overheated territory and this is a necessary respite. One way to work it off would be to do just what the market is doing!
But ‘grudging’ pullbacks like this do not necessarily start new downtrends. Declines that become virulent are often brought upon by several indexes and indicators being in discord. I have shared several instances of such acts of betrayal. The most recent was from the Euro in early May that unleashed a serious decline. (Click here for my May 12th note)
As of now, I would be looking to buy a low volume decline closer to the vicinity of 1094 to 1100; 1094 is the point of convergence of the 50 and 200 EMA's.
Click to enlarge
Todd Harrison
Eyes of the World
Today is an important close through a technical lens; the broader market, as measured by the S&P, is currently tracing out a sequence of four lower highs, which is a bearish progression. If Hoofy can buck the Turnaround Tuesday trend, he'll have a feather for his rally cap.
Just something to keep an eye on as we edge towards the bookend bell.
Click to enlarge
Wednesday, July 28, 2010
Scott Redler
POT Ready to Go
Agricultural group is getting better. Potash (POT) is in the mix.
It has a great pattern.
My buy price: 98-98.50 for a move back to 103 -105 short term
Then 110.
Click to enlarge
Phil Erlanger
Latest Short Interest Release Summary
Short interest numbers for the NYSE are reported for the period of settlement date July 15th. The NYSE saw short interest decrease to 13,757,829,749 from 13,927,200,566 which is revised. My calculation shows a decrease of shares 169,370,817 or -1.21%. There were 1,583 increases with 1,697 decreases. In the last 18 reporting periods, NYSE has seen more advancers than decliners in 10 of the 18 reporting periods.
During this period on a trade date basis (6/25 to 7/12), the S&P rose 0.18%. The conclusion is shorts basically remained with what they were short. In the prior reporting period, shorts held to what they were short just as they have for this latest period.
There were no outliers of note in terms of increases or decreases that overly contributed to the change in short positions.
Short interest numbers for NASDAQ are reported for the period of settlement date July 15th. Short interest rose to 7,422,838,678 shares from 7,392,006,897 for an increase of 30,831,781 or 0.42% . There were 1,187 increases and 1,533 decreases. In the last 18 reporting periods, NASDAQ has seen more advancers than decliners in 14 of the 18 reporting periods.
Dedicated short sellers made 5.35% in June, as reported by www.hedgeindex.com. YTD this index is down -2.77%. July will see short sellers end their two month win streak and see the YTD number drop back to down -8% at least as it stands right now. 2009 will go down as the worst year since 2003 for short sellers. For 2009 this style lost -25.03%. In 2008, short sellers made 14.87%. In 2007 short sellers made 6.04%.
Position in GS, gold, gold stocks
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