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Street One Financial LLC (S1F or Street One) is an independent entity affiliated with Precision Securities, LLC., 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... More
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  • Today's Technical Outlook -3/31/2014  0 comments
    Mar 31, 2014 11:46 AM

    Market Summary

    David Chojnacki, Market Technician

    Strength in the overseas markets set the stage for a descent open in the U.S. market on Friday. Equities moved higher through the morning and reached their high of the day near 11:00am. A slow decline ensued in the PM, but the major averages hung on for a small gain. At the close on Friday, the DJIA added 58 points, the S&P tacked on 8.5 points, and the Nasdaq100 was up 8.3 points. Breadth was decidedly positive, 2.4 to 1, on below average volume. RSI's moved up slightly in the session. ROC(10's) declined in the session with the S&P moving back into negative territory. MACD's remain below signal. For the week, the DJIA added 0.1%, the S&P was down 0.4%, and the Nasdaq100 losing 2.2%. As we end the first quarter, YTD the DJIA is down 1.5%, S&P up 9 points, and the Nasdaq100 off 0.5%. The major indices are mixed or nearly flat for the year. The IWM(small caps ETF) is off 0.9% YTD. Though we have had day to day volatility, the S&P has traded in a 39 point narrow range for the month of March.

    Trading Trends

    Long term trend continues with an upside bias, as the averages maintain positive long term technicals. Some indication of 'topping' as the S&P may be making a double-top and 'choppiness' at the top can indicate a roll-over. The Nasdaq100 closed right near its 1year trend-line support of 3570. Critical to hold this level. Short term technicals are weakening for the Nasdaq100, however, still positive for the DJIA and S&P. Near term, the major indices were choppy last week and we could see more volatility in a narrow range until some event risks are resolved. 1860 is a key near term short level for the S&P. Geo-political issues will remain on investors' minds next week, as Kerry made no progress in his talks with the Russians over the weekend. Futures are pointing higher this morning versus fair value.

    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 Precision Securities, LLC, 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.

    Registered Representative of and Securities Products offered through Precision Securities, LLC Member FINRA SIPC. Street One Financial LLC (S1F) and Precision Securities LLC are not affiliated entities.

    Long term trend continues with an upside bias, as the averages maintain positive long term technicals. Some indication of 'topping' as the S&P may be making a double-top and 'choppiness' at the top can indicate a roll-over. The Nasdaq100 closed right near its 1year trend-line support of 3570. Critical to hold this level. Short term technicals are weakening for the Nasdaq100, however, still positive for the DJIA and S&P. Near term, the major indices were choppy last week and we could see more volatility in a narrow range until some event risks are resolved. 1860 is a key near term short level for the S&P. Geo-political issues will remain on investors' minds next week, as Kerry made no progress in his talks with the Russians over the weekend. Futures are pointing higher this morning versus fair value.

    MAJOR INDICES Short term support and resistance level

    DJIA

    close 16323

    SP500

    close 1857

    N100

    close 3571

    16301

    16400

    1850

    1862

    3570

    3575

    16250

    16500

    1840

    1863

    3562

    3583

    16120

    16576

    1837

    1875

    3550

    3588

    16000

    16600

    1825

    1888

    3549

    3600

    15900

    16625

    1812

    1900

    3537

    3612

    15813

     

    1809

    1912

    3525

    3622

    15800

     

    1800

    1925

    3512

    3626

    15676

     

    1793

     

    3500

    3637

      

    1788

     

    3488

    3650

    Major Economic Reports Today

    Chicago PMI-9:45am

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