Showing posts from October, 2018

The indicator that Wall Street will follow this week

The important SMA10.
The SP500 index, the most representative and important of the NYSE, has been sinking more than 9% this October, losing near all YTD gains. The Nasdaq is also a loser, having its worst month since 2008. Some ideas and reasons for this sell-off, I outlined in this previous post. Now, this week, Wall Street' trader's eyes will be on a specific technical indicator. It is the 10-month simple moving average or "SMA10".

The 10-month SMA indicator is equivalent to the well-known and widely used 200-day SMA, given that 10 months of sessions equals almost 200 trading days. The great advantage of the monthly is that it gives a cleaner signal and reading, free of so many false signals of breakouts, pullbacks, and whipsaws that are usually presented in a daily candle chart. It is not infallible, but the 10-month SMA helps to filter out all the 'noise'. It's well known that banks and financiers use it and make their investments in the stock market…

Following AMD, SQ, TWTR, VMW in October

Brief comments and ideas of stocks that belong to my Watchlist. Today the SPX is, technically, in a 2-day slow recovery, but still below its key simple moving average 200, with many bearish signals. Let check some Nasdaq stocks:

1. Twitter TWTR, $32.36

2. Advance Micro Devices AMD, $17.75

3. Square SQ, $71.43

4. VMWare VMW, $145.02

Nasdaq stocks for this week: AMD, DBX, PYPL, VMW

1. Advance Micro Devices AMD, $25.04 - Its next earning report (Oct 24th) need to be convincent for investors. Nvidia NVDA is again turning strong in the cryptocurrency and gaming markets and Wall Street is reacting to this, giving down AMD price to the important 38.2% level of Fibonacci and with its first MACD bear crossover since April.

- Is increasing its volatility to levels of 90%, making this stock better for daytrading or swing trades. A bit dangerous for invest long.

- I'm neutral this week until Q3 earning.

2. Dropbox DBX, $23.49 - My favorite file-sharing application since it appeared 10 years ago. What makes it special is its ease of use, intuitive and elegant, that served as a model to its giant competitors: Google Drive, Microsoft OneDrive and Apple iCloud. What keeps her alive in the face of these monsters, is its accumulated prestige over the years and its focus exclusively on file-sharing.

- After your recent IPO this 2018 at $ 29, today you are near your minimums…

My Stock Watchlist for October 2018

On my Thinkorswim trading platform, I manage several watchlists, differentiating them according to the instruments it contains. There are stocks, futures, ETFs, sectors, and indices.

The ETFs watchlists usually keep the same symbols in time, having sectors, countries, commodities, both at 1X normal speed and 3X triple speed. Indices, sectors, and futures are also fixed, covering the main index and commodities in Wall Street and major foreign exchanges, the usual managed by all traders.
Those that change permanently (usually weekly) are the symbols of the stock watchlists.

I divided them into two groups for follow-up: Main, which I follow on a daily basis, and Movers, important stocks to follow due to news topics, popularity, unusual volume in shares or options, huge changes in price or volatility. Over time, appears a new, disappear other, some ascend to Main, or vice versa, according to the importance they are acquiring, in my opinion.

That a certain stock is in these lists does NOT …

Uber and the future of the Unicorns

The IPO (initial public offering) of Uber Technologies, even without a defined date, promises to be the most attractive next year (valuation $120B), as they were Snapchat SNAP,(2017), Alibaba BABA (2014) or Linkedin LNKD (2011). And it is that the famous application for private transport, already present in almost 600 cities around the world, is extremely popular, required, valuable and, therefore, full of demands (mainly of nonconformist users and other formal taxi services) and competition in many countries (Lyft, Curb, Didi, among other apps), all copying the same principle. Even Google GOOG, is developing its product, relying on its acquisition of the popular Waze, and its upcoming developments of autonomous driving, something that Uber has also focused its latest efforts.

The shocking news in 2017 in this unicorn (start-up with a billionaire valuation) perhaps the most renowned start-up of its genre, was the departure of its CEO, founder, Travis Kalanick, forced to resign by the…

Sell Off: factors behind the correction

As all market sell-off as the present, the analysts begin to look for explanations to it. Which main force is behind it, and if this trend will continue. Yesterday SPX dropped 3.3% and today 2.06%, causing it to break the important SMA200 level that for months had become invincible and caused successive rebounds when it price reached it. The Nasdaq COMP had its worst session in 2 years, dropping 4.1%. And VIX volatility skyrocketed to levels of $ 25, which did not have in months. There are some factors that have accumulated over time, and that have led to this expected correction. I throw some ideas about it.

Trump and the dollar: short and long term
It is not new the complicated relationship that Trump usually has with the FED, simply in these days it is reaching its highest peaks. His phrases generally scare Wall Street and this time they did more than ever. His statement 'the FED is going crazy' try to influence them, because he believes that the interest rate is going up …

The VVIX / VIX ratio in all-time highs

Today the VIX, known as the 'fear gauge', which measures the frequency and intensity of changes of the SP500, closed near to its multi-year minimum, at $ 9.79, fifth consecutive day below the $ 10.00 level, demonstrating passivity (or permissiveness, or complacency) of the current market, faced with events like yesterday's. What happened was that the repeal of Obamacare (one of Trump's key proposals, which moved Wall Street upwards when they were announced months ago) failed in the US Senate, suggesting that the next big goal of its plan, the tax reform, it can have the same outcome. Even so, the SPX was not aware of the matter, raising 0.54% to $2,473.83, a new all-time high.

On the other hand, the VVIX index measures the volatility of the VIX volatility index, it is also at a minimum, since both indices travel together. However, if the ratio between the two is plotted, we see that it is at historic highs. That is to say, never a market so calm, so little fearful, as …

Stocks to Watch: AK Steel $AKS, Ubiquiti Networks $UBNT

1. AK Steel Holding AKS, $4.83.

When Trump took office in 2016, one of the industries that seemed to will have the best growth was construction. In those days the confirmation of the execution of the border wall with Mexico favored several stocks and etf of the sector: construction companies, cement companies, machinery, Mexico. Several of them followed in my watchlist, even today: Lennar Corp LEN (one of the largest construction companies in the USA), Caterpillar CAT (the giant of machinery, the Big Cap that advanced the most in 2017) or IShares Mexico EWW (etf that follows the Mexican market). Among the construction materials, the steel stood out. remember it was one of the industries hardest hit after the recession of 2007. The rebound that had since November 2016 with the remembered 'Rally Trump' and its plan 'Rebuiding America', for 3 months, was spectacular, near a 100% rise.

Within the small capitalization companies on Wall Street, there is an attr…