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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 - 6/9/2014 0 comments
    Jun 9, 2014 11:26 AM

    Market Summary

    David Chojnacki, Market Technician

    Job numbers for May were lower than April, but investors seemed to ignore that fact and continue their buying spree. By late morning, the major indices were near their highs of the session and they skidded sideways into the close finishing at new highs. At the close on Friday, the DJIA was up 0.52%, the S&P added 0.46%, and the Nasdaq100 moving up 0.47%. Breadth was decidedly positive, on just below average volume. RSI's were up with the Nasdaq100 and S&P sitting at over-bought territory of 73. ROC(10's) were mixed in the session, but remain in positive territory. For the week, the major averages were up between 1.2% and 1.5%. Year to date, the DJIA is up 2%, the S&P + 5.4%, the Nasdaq100 + 5.6%. While the major indices made new highs last week, the volume has been low for the last several weeks, adding little conviction to the move. However, the age old saying, 'don't fight the Fed', remains true. The VIX dropped 8.1% to 10.73. It is now the lowest since 2007 when it hit 9.70.

    Trading Trends

     

    MAJOR INDICES Short term support and resistance level

    DJIA

    close 16924

    SP500

    close 1949

    N100

    close 3794

    16900

    16950

    1937

    1950

    3775

    3800

    16850

    17000

    1925

    1962

    3762

    3812

    16800

    17125

    1912

    1975

    3750

    3815

    16735

    17250

    1904

    1988

    3725

    3825

    16600

    17300

    1900

    2000

    3712

    3850

      

    1888

    2012

    3700

    3862

      

    1881

    2025

    3675

    3875

      

    1875

     

    3669

     
          

    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.

    Major Economic Reports Today

    No Reports scheduled

    Long term trend continues with an upside bias, as the major indices all made new highs last week. The S&P met resistance at the top of a one year channel for the S&P, which is near 1950. We expect to see formidable resistance at this level. Short term technicals remain strong. Near term, we are nearing some over-bought levels and at or above the top of Bollinger Bands. The Nasdaq100 developed an 'evening star' and the S&P is near important resistance. We would expect some consolidation at the levels before moving to new highs. Economic reports are fairly light this week, though we do get Retail Sales and PPI towards the end of the period. The Nikkei was up slightly over-night and Europe is mixed in early trade. U.S. futures are slightly lower pre-market.

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