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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Market Notes: How To Profit From A Sinking Ship -- October 1

    The bears continue to dominate and were able to push the major averages below recent support levels with many of them on the verge of testing new ones. Here are the next support levels:

    Dow Transports (DTX): 820, 800
    S&P 500 (SPX): Just broke 1950, 1900
    Dow Industrials (DJIA): Just broke 17000, testing 16800, 16400
    Nasdaq: Testing 4400, 4200, 4000
    Russell 2000 (RUT): Testing 1080 (a major level), 1000

    While today's down draft was depressing, bulls should take some comfort in the fact that market internals are moving strongly into the bearish contrarian zone. What with the Trin pushing above 1.6 and VIX volatility spiking, we could see a relief rally as early as tomorrow. But don't party yet--this could be the pause that refreshes before the next leg down. With only three stocks populating today's New High list, this market is still firmly in control by the bears.

    Relief rallies in bear markets provide a good time to initiate bearish bets. If you need inspiration, there's a lot to choose from as pretty much every sector is showing weakness. Many sector exchange-traded funds and notes broke support levels today with the most compelling (technically) being the following: Water (PHO, PIO, FIW), Timber (NYSEARCA:CUT), Agribiz (NYSEARCA:MOO), Financials (NYSEARCA:XLF), Insurance (NYSEARCA:KIE), Retail (NYSEARCA:RTH), Regional banks (IAT, KRE), and Shippers (NYSEARCA:SEA).

    Regarding the shippers, Navios Maritime (NM, $5.52) broke below $6 support to touch a new yearly low. The bearish momentum is indicating that the stock could sink much further--possibly to the $3 level. If you're considering shorting this stock (or any of the other shippers), note that many of them pay a dividend which short sellers are required to pay when the stock goes ex-dividend. As an alternative to the inherent risk of shorting as well as being obligated to pay the dividend, if the stock offers options (as does NM) you could buy a put instead.

    Oct 01 7:29 PM | Link | Comment!
  • Market Notes: Raise High The Roof-Beam, Investors! -- September 29

    Today's notable movers to the upside

    NiSource (NI, $40.85): The stock leapt to a new all-time high, tacking on 6% to its closing price on Friday on more than 4 times normal volume. Over the weekend, the company's board decided to spin off its natural gas pipelines from its utilities business. The split is expected to occur in mid-2015.

    Federated National Holding (FNHC, $26.89): This Florida-based residential property insurer gained 4% on twice normal volume to break above major resistance following a big move on Friday. There was no discernible news to account for the move.

    ClubCorp Holdings (MYCC, $19.85): This company manages and operates golf, sports, and business clubs. Today, the stock hurdled out of an eight month consolidation stage, gaining nearly 6% on twice normal volume to notch reach an all-time high. Investors cheered the news that an activist investor is urging the board to consider converting the business to REIT status. According to the company's Press Release, the spun-off assets could offer shareholders an upside of 65% to 90% from Friday's closing price of $18.74.

    Beacon Roofing (BECN, $26.18): This New England based supplier of roofing materials has been in a major slump since January. It sunk to a new yearly low on Friday but got a big boost today from a favorable article appearing over the weekend in Barron's. (You need to be a subscriber to access the article.) According to the article's author, improving demand along with ongoing consolidation in the roofing space could boost the stock 40% from current levels. If you're looking to take a bullish stake in this one, I would recommend using options (perhaps selling a put to take advantage of heightened options volatility or using a call credit spread) to reduce risk.

    Sep 29 5:37 PM | Link | Comment!
  • Market Notes: Weight Watchers Bulking Up -- September 23

    Yesterday's death cross in the small-cap laden Russell 2000 (RUT) cast a pall over today's market action. Midday, it appeared as if the bulls were trying to plug the hole in the dyke but the bears roared back with a late day route. VIX volatility took a jump helping to push the VIX close to the bull/bear dividing line at 15. (Over 15 is bearish and under 15 is bullish.) The major averages themselves are getting close to testing their next support levels. A fall below would be a strong indication of further downside, likely to their next levels of support.

    Support Levels for the Major Averages
    S&P 500 (SPX): 1975, 1950, 1900
    Dow Tranports (DTX): 840, 820, 800
    Dow Industrials (DJIA): 17000, 16500, 16000
    Nasdaq: 4500, 4000
    Russell 2000 (RUT): 1100, 1080

    Sector etf breakdowns today: Industrials (NYSEARCA:XLI), Retail (NYSEARCA:XRT), Insurance (NYSEARCA:KIE), Aerospace & Defense (NYSEARCA:PPA), Consumer Discretionary (NYSEARCA:XLY), REITs (VNQ, MORT, DRN). The downward pressure in all of these etfs are indicating a high probability of further downside.

    Notable Stock Weakness: Gun makers Sturm Ruger (RGR, $46.09) and Smith & Wesson (SWHC, $9.41) have been falling for months and they both recently broke major support levels to hit new yearly lows. Smith & Wesson won't face support until $8 while Sturm Ruger won't see it until $40, roughly 13-15% below today's closing prices.

    Notable Stock Strength: Weight Watchers (WTW, $27) has been rallying off its mid-July low (a five year low!) and today closed the gap formed after its worse than expected earnings report in mid-February. The stock made a 7% move to the upside on over three times normal volume. The stock doesn't face major resistance until the gap at $34 which is 25% above its current price. Its past two earnings (post the bad February report) have surprised to the upside and the company could surprise again in its next announcement scheduled for October 29th.

    Sep 23 8:50 PM | Link | Comment!
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  • Does anyone else dislike the new MSN? There's no email access on the MSN Money page & have to go elsewhere. Considering switching homepages.
    about 11 hours ago
  • Market Notes: How To Profit From A Sinking Ship -- October 1 $PHO, $PIO, $FIW
    about 15 hours ago
  • Intraday support/resistance: $SPX 1943.5/1971.5, $DTX 817.25/844.75, $DJIA 16760/17040, Nasdaq 4413/4487, $RUT 1084/1101; $VIX 16.1/17.9
    about 21 hours ago
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