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Kevin Vassallo's  Instablog

Kevin Vassallo
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Graduate of Brock University obtaining a degree in Business with a concentration in Finance. Is an Independent trader with a focus on the broad markets .
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Markets and CHarts
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  • attempting longs again, focusing on oil

    After trying to go long a couple of weeks ago and subsequently stopped out very quickly, its time to examine the current levels and valuations out there.

    I believe we are at a point of extremely oversold levels, it doesn’t necessarily mean it cant continue to be oversold, but the market looks as if its preparing for a short covering rally in which many sideline investors will cautiously jump on thinking the bottom is in. This should last approximately a month or so, now is a good time to bring out the shopping list.

    My favourite sector in terms of risk and reward would be the Oil industry. Many companies are selling at prices last seen in 2009 with oil at $45 a barrel! Many of these have potential to see 20% increases in a very short time frame.

    After being stopped out of Suncor (NYSE:SU), it seems my stop was well placed when considering how far it fell following the market collapse.Suncor daily

    Purchased around $29 gives us a great setup as we place a stop under $27 and look to take some off at $35 if it gets there

     

    Transocean (NYSE:RIG) also has a great setup as its sitting right on its support zone, this gives us a clearly defined trade with a buy around 50 and a stop below $45 This stock also is currently Yielding over 6% 
    RIG weekly
    RIG daily

    Tags: SU, RIG, OIH
    Aug 23 8:25 AM | Link | Comment!
  • looks like a short term bottom with the possibility of a bounce

    the markets came into today completely oversold and continued selling just after the open. I think the Easy money to the downside has been made now. Looks like we could have a bounce or at the very least a short covering rally. either way this looks to be a choppy end of the summer.

    All shorts are covered now and I’m looking at Long positions, it looks as if theres alot of fear out there it might be time to get greedy.

    The S&P500 has come off by over 100 points in a mere matter of days. I don’t know if we’ll make it back to the previous high but i think we might get back to the 1310-1320 area. After that i would be putting tight stops in and perhaps look to get short again.


    once the SPY rallies back up to the 131 area it should come down once again putting that big 200 day MA crossed over the 50, look out below after that. 

    I’m looking at some of the industrial names to play for a bounce in addition to the indexs. 

    Some particular names are Ford (NYSE:F) Eaton (NYSE:ETN) Suncor (NYSE:SU)


    I will be looking for Ford to bounce to around $14 


    ETN should boucne to about $49


    SU could make it back to about the $40 area. 
     

    This market does seem as if has turned decidedly to the downside, so i will be nimble in these plays and only take small positions as i do not want to get caught if the markets pulls a repeat of 2008. Looking at stops 3.5% under the entry positions of today, after that we’ll place at breakeven 
    good luck to all out there

    Tags: SPY, F, ETN, SU
    Aug 03 11:57 AM | Link | Comment!
  • Is this a Dip in a Bull Market or something else?
     Even the Strongest bull markets has its pullback on profit taking, but lets examine where we're at right now and see if the Bull is still alive or if the Bear is back.

     Fundamental 

    first let’s see if the Fundamentals are still in place for market participants to be buying; we have slowing growth in the U.S., debt problems in the European Union, an Asia which is seemingly all effected by the Japanese tsunami, housing markets in the U.S. Still in the Doldrums, fiscal problems in the U.S., Unemployment which hasn't come down in months and top it all off the Liquidity that the Fed was infecting into the markets end in July. So to sum it up I don’t believe the Fundamentals are in place.

    Its Clearly Visible when presented the chart of job losses compared to previous recessions post WWII that this time is "Different"

     

     housing prices have double dipped
    S&P/case-shiller

    The Employment to Population Ratio is not looking encouraging it is just above the level of the 1960's, a time when only a fraction of women were working compared to now.

    Employment to Population Ratio

    Technical 

    Now when we Examine the Technical's of the market; All the Major indices of the World are below their 50day moving avg's, we have a Left translated Edge which looks to be producing lower highs and lower lows.



    The market at the moment seems to be slightly oversold still but the depends on if the bull is going to continue or if its topped out already. 
    Advance/Decline



    The S&P500 has tagged the 200 day moving avg twice now, I believe a break is inevitable. But not just yet it should come back to test the 50day before the hard sell of takes place.
    SPX daily

    The weekly is showing the crawl along the 200 day moving avg and declining volume. 
    S&P500 weekly


    In conclusion the market is is looking bearish but we’re looking for a technical bounce on any good news, or “less than bad news” the S&P500 could rally up to about 1350 and the NASDAQ could break out to new yearly highs. If this does happen it will be a great time for bulls to exit their positions and bears to start putting large swing positions on. There will be plenty of tradable opportunities on both bearish and bullish positions in the next year. The main trend will however be to the downside. 

     

     



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Tags: SPY, QQQ
    Jun 24 12:24 PM | Link | Comment!
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