Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Today's Technical Outlook - 6/3/2013

Market Summary

David Chojnacki S1F Market Technician

The Market opened slightly weaker on Friday, then tried to move to the upside late morning, even getting into positive territory briefly. After early PM sideways action, a heavy sell-off that began near 2PM and lasted into the close, left the indices significantly lower. At the close on Friday, the DJIA was off 1.3%, the S&P dropped 1.4%, and the Nasdaq100 slipped 1%. Breadth was decidedly negative, 4.8 to 1, on very heavy volume. For the week, the DJIA lost 1.5%, the S&P gave up 2.2%, and the Nasdaq100 falling 1.5%. It was the second straight week of losses. The Friday sell-off left the S&P nearly 3% lower from its recent highs. We have had three 3% sell-offs since the November 2012 rally began, and it looks like we are set for the fourth. All three indices fell below their 20D-SMA on Friday. The major averages closed at their lows of the session on Friday. RSI's remain bullish, but pulled back during the week. MACD's continue below signal for all three major indices. The MACD and creep up in the VIX last week were signals to Friday's sell-off. We mentioned last week that the VIX had developed an inverted head and shoulders and the potential to break above the neck-line into more volatile territory. The neckline is near 15 and on Friday the VIX closed up 12.1%, to close at 16.30.

Trading Trends

David Chojnacki S1F Market Technician

The bias for the long term continues to the upside as technicals remain strong. The major indices continue above key long term technical indicators and the rally since November 2012 remains intact. Short term technicals continue positive, however, a break-down in MACD'S signaled the recent pullback. A 3% pullback would put us near 1625 and 5% near 1597, in the S&P. Near term, last week's continued slide left the averages near the 3% pullback area. A break below and we may be headed for the 5% per cent support level. A big week foe economic reports including the ISM Index, Fed Beige Book, and Employment Report. Europe is mixed in early trade, and there was a 3.7% sell-off in Japan. Futures in the U.S. are significantly higher this morning, pointing to a strong open.

MAJOR INDICES Short term support and resistance level

DJIA

close 15115

SP500

close 1630

N100

close 2981

15000

15125

1625

1637

2975

2988

14952

15212

1612

1640

2962

2990

14887

15250

1600

1650

2950

3000

14874

15300

1599

1662

2937

3012

14865

15400

1597

1675

2925

3025

14800

15450

1588

1688

2912

3037

 

15500

1575

1700

2900

3050

   

1562

 

2888

3053

   

1556

   

3062

Major Economic Reports Today

ISM Index-10:00am Construction Spending-10:00am Auto/Truck Sales-2:00pm

 

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. Additional information concerning this publication may be available on request, if available. 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.