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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 - 8/25/2014 0 comments
    Aug 25, 2014 10:49 AM

    Market Summary

    David Chojnacki, Market Technician

    It was a typical summer Friday, with little participation, causing the major averages to trade choppy in a narrow range. Comments from Yellen did little to sway the market. By the end of the day, the major averages were little changed and mixed in the session. At the close on Friday, the DJIA gave up 38.3 points, the S&P slipped 3.9 points, and the Nasdaq100 added 5.7 points. Breadth was negative, 1.6 to 1, on weak volume. RSI's were little changed, with the Nasdaq100 beginning to move into over-bought territory. The Nasdaq100 is now up for eight straight sessions and closed Friday at new highs. The DJIA is the only index of the big three not to close above its July closing high of 17138. Friday was an inside day for both the S&P and DJIA. For the week, the DJIA was up 2%, while the S&P and Nasdaq100 gained 1.6%. IWM(small-caps) remains a concern, as it has not been able to retrace 50% of the recent pullback. The VIX, down every day last week, finished at 11.47, suggesting little fear in the market.

    Trading Trends

    MAJOR INDICES Short term support and resistance level

    DJIA

    close 17001

    SP500

    close 1988

    N100

    close 4052

    16900

    17138

    1975

    1994

    4050

    4062

    16856

    17200

    1962

    2000

    4037

    4075

    16725

    17225

    1961

    2012

    4025

    4088

    16706

    17300

    1952

    2025

    4012

    4100

    16700

    17325

    1950

    2037

    4000

    4112

    16650

     

    1940

    2050

    3988

    4125

      

    1937

    2062

    3975

    4150

      

    1925

     

    3962

     
      

    1921

     

    3950

     

    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.

    Major Economic Reports Today

    New Home Sales-10:00am

    Long term trend continues with an upside bias. The DJIA is the only major index not moving above its July closing high(17138). The Nasdaq100 continues to lead the indices. Short term bias remains to the upside, as technicals continue to strengthen last week. The Nasdaq100 trend line resistance is near 4125, while the S&P is near 2012. All three major indices are just below their Bollinger Band tops. Near term, the indices are stretched a bit and may see some consolidation this week. Geo-political concerns, especially in Ukraine, may cause some near term risk. Sanctions are weakening the European economy. A slew of economic reports this week, which may impact the market. Europe is trading higher in early trade. US Futures are pointing to a higher open.

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