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Street One Financial LLC (S1F or Street One) is an independent entity affiliated with GWM Group Inc., a full service registered broker dealer and a member of FINRA/SIPC. Street One specializes in educating, evaluating and trading ETFs, equities and options. Our firm assists portfolio managers in... More
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  • Today's Technical Outlook -1/6/2014 0 comments
    Jan 6, 2014 11:04 AM

    Market Summary

    David Chojnacki S1F Market Technician

    After moderate losses in the first trading day of the new year, equities tried to recover some of those losses on Friday. The major indices opened to the upside on Friday, but by the close only the DJIA was able to eke out a gain. At the close on Friday, the DJIA added 28.6 points, the S&P was down 0.61 of a point, and the Nasdaq100 losing 0.7%. Breadth was positive, 2 to 1, on below average volume. The RSI for the Nasdaq100 slipped in the session, but was fairly steady for the other major indices. ROC(10's) were also mixed with only the Nasdaq100 declining. For the week, the DJIA was down just 9 points, the S&P lost 0.5%, and the big loser was the Nasdaq100, down 1%. The Nasdaq100 had its MACD slip below signal on Friday. Last week took some of the near term over-bought condition out of the market. The key now is will the indices hold near term support and advance or degrade into a more pronounced pullback. The VIX was down 3.3% on Friday to end at 13.76. It has bounced off the 12 area once again.

    Trading Trends

    David Chojnacki S1F Market Technician

    Long term technicals remain positive, though we went through some near term consolidation last week. Short term technicals remain strong, only the Nasdaq100 showed any weakness dropping its MACD below signal. We will watch that this week. The indices continue to hold short term support. Near term, the indices lost some of their over-bought condition last week, but managed to hold near term support. We look for the Nasdaq100 to hold the 3540 area, and the S&P to hold 1810-12. Economic reports pick-up this week as the holidays are finally over. We see employment numbers and FOMC minutes this week. Over-seas markets are mixed this morning. Futures are mixed and little changed versus fair value pre-market.

    MAJOR INDICES Short term support and resistance level

    DJIA

    close 16469

    SP500

    close 1831

    N100

    close 3538

    16400

    16500

    1825

    1837

    3537

    3540

    16300

    16550

    1812

    1850

    3525

    3550

    16250

    16600

    1800

    1862

    3522

    3562

    16155

    16650

    1792

    1875

    3512

    3575

    16000

    16700

    1788

    1888

    3500

    3588

    15944

     

    1775

    1900

    3488

    3600

    15800

     

    1762

    1912

    3475

    3612

      

    1750

     

    3462

    3625

          

    DISCLAIMER LANGUAGE -ALL PRICES NOTED IN THIS PUBLICATION ARE AS OF THE CLOSE ON TRADING PRIOR TO

    TODAY'S DATE, UNLESS OTHERWISE INDICATED

    This publication is neither an offer to sell nor a solicitation to buy any securities mentioned herein. The information contained herein is based on data obtained from recognized sources that are believed to be reliable. Street One Financial LLC (S1F) have not independently verified the facts, assumptions and estimates contained in this publication.

    Accordingly, no representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions contained in this publication. The information contained in this publication is not and does not purport to be a complete analysis of every material fact respecting any company, industry, ETF or other security You should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The performance data quoted represents past performance. Past performance does not guarantee future results. The Fund's investment return and principal value will fluctuate. Upon redemption, shares may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Go to toll free telephone number or Web site to obtain performance current to the most recent month-end. The average annualized total returns reflect the deduction of the Fund's maximum sales load. (When also showing non-standardized performance, if the sales load is not reflected, the disclosure must state that performance does not reflect the deduction of loads or fees and, if reflected, would have reduced performance.)

    You should read the prospectus carefully before investing. You should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. Many of the securities mentioned in this publication involve a higher degree of risk and more volatility than the securities of more established securities. For these and other reasons, the investments discussed in this publication may be unsuitable for investors depending on their specific investment objectives and financial position. Each investor should complete his or her own additional investigation and assessment prior to making investments in any securities. You should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing Transactions in securities mentioned herein may be affected only in those states where such securities are qualified for sale.

    Street One Technical Analysis LLC is an independently owned Company from Street One Financial LLC (S1F). S1F is an independent Company specializing in ETF's, equities, and options utilizing the Broker/Dealer services and licenses of GWM Group Inc., a fully registered Broker Dealer and member of SIPC/FINRA. S1F specializes in agency ETF/ETP, equities, and options trade execution. On the ETF/ETP end, S1F may work with the ETF issuers to understand their products more thoroughly and how they can complement an investor's portfolio.

    Data sources include ETF Database, ETFTrends.com, IndexUniverse.com, Google Finance, and Bloomberg data and at times other data sources are utilized. Leveraged, Inverse & Leveraged Inverse Conclusions and Risks 1) Leveraged, Inverse, and Leveraged Inverse (L&LI) ETFs generally capture a high percentage of their expected daily returns, particularly on a net asset value basis. 2) L&LI ETFs are not appropriate for all investors. However, we believe they can be appropriate tools for some investors looking to make short-term tactical trades if they perceive a high likelihood of a strong market move occurring in a relatively short time period. In strong trending markets, being on the right side of the "trade" with L or LI ETFs can lead to very strong returns. 3) Investors should not expect these ETFs to deliver total returns linked to their benchmarks over any period other than daily. The effects of compounding and the daily re-leveraging or de-leveraging that occurs with L&LI

    ETFs can lead to unexpected results over the long term. As a result, we believe longer-term investors should consider regularly rebalancing positions. 4) Trendless markets, particularly those with a high level of volatility, can lead to substantial relative underperformance of L&LI ETFs. 2) Leveraged and Leveraged Inverse (L&LI) ETFs typically utilize futures and equity swap agreements. The use of these derivative instruments increases risk and enhances the possibility of tracking error.

    Relative to traditional ETFs, leveraged, inverse and leveraged inverse ETFs typically have higher costs and lower tax efficiency. 3) The effects of compounding can lead to significant deviations from traditional benchmarks over longer time periods. For example, if $100,000 is invested in an index that increases in value by 10% on day one and then decreases in value by 10% on day two, the investment will be worth $110,000 at the end of day one and $99,000 after day two. However, the value of a security that doubles the daily performance of the index would be worth $120,000 on day one and $96,000 after day two. Thus, the index is down 1% after two days, a doubling of which would be down 2%. However, the security attempting to double the return of the index is down 4%. Investors should consider carefully the potential impact over longer periods. MLP and MLP ETF Risks Individual MLPs are publicly traded partnerships that have unique risks related to their structure. These include, but are not limited to, their reliance on the capital markets to fund growth, adverse ruling on the current tax treatment of distributions (typically mostly tax deferred), and commodity volume risk.

    For tax purposes, MLP ETFs are taxed as C corporations and will be obligated to pay federal and state corporate income taxes on their taxable income, unlike traditional ETFs, which are structured as registered investment companies. These ETFs are likely to exhibit tracking error relative to their index as a result of accounting for deferred tax assets or liabilities (see funds' prospectuses). The potential tax benefits from investing in MLPs depend on their being treated as partnerships for federal income tax purposes and, if the MLP is deemed to be a corporation, then its income would be subject to federal taxation at the entity level, reducing the amount of cash available for distribution to the fund which could result in a reduction of the fund's value. MLP funds accrue deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments; this deferred tax liability is reflected in the daily NAV; and, as a result, the MLP fund's after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked. Commodity ETF Risks Commodity ETFs may be subject to greater volatility than traditional ETFs and can be affected by increased volatility of commodities prices or indexes as well as changes in supply-and-demand relationships, interest rates, monetary and other governmental policies, or factors affecting a particular sector or commodity. Currency ETF Risks Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations. ETFs mentioned at times may have material exposure to small cap and/or international securities that may have higher levels of risk and volatility than other ETFs.

    Major Economic Reports Today

    Factory Orders-10:00am ISM Services-10:00am

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