Sterling Market Commentary for Tuesday March 27th, 2012
A Look at Monday’s Market: The overall market moved sharply higher in a broad based move that saw every index I track move higher on […]
Month: March 2012
Sterling Market Commentary for Monday March 26th, 2012
A Look at Friday’s Market: The overall market finished Friday moderately higher in a relatively broad based move that saw the vast majority of the sector indices I track move higher on the day as well. There was strength in the Gold/Silver, Oil Services, Airlines, Chemicals, Broker/Dealers, Natural Gas, Oil & Gas, Banking, Biotech, Transports, Consumer, High Tech, and Retailers. There was weakness in the Telecom and Dow Jones Transportation Average. There was strength in the bond markets as interest rates moved lower. In the commodities markets, Oil was higher by $1.52 to $106.87 per barrel, and Gold was higher by $19.90 to $1,662.40 per ounce. In the grain markets, Wheat was higher by $0.080 to $6.542 per bushel, and Corn was higher by $0.020 to $6.464 per bushel, while Soybeans were higher by $0.162 to $13.656 per bushel.
Sterling Market Commentary for Tuesday March 20th, 2012
A Few Thoughts on Tuesday’s Markets: In looking at the charts from yesterday’s market, I noticed that the vast majority of the sector indices and heavy volume stocks that I follow all looked very positive on their charts. However, I am always cautious the 1st couple of days following an options expiration week. Experience has taught me that it generally takes a day or so, for the underlying trend to resume its movement. As a result, I expect the activity of Tuesday and Wednesday to set the general direction of the market for the next few weeks. Also, in general we have been in a very tight trading range for the last several months. We all know that this is rather unusual given the trading history of the markets over the last couple of years. My underlying concern is that the longer we track sideways, the greater the move to either the up or downside will be when we finally break from this tight trading range; and I do not want to be caught to heavily weighted to the wrong side.
Sterling Market Commentary for Friday March 16th, 2012
It is also very important to remember that today is quarterly options and futures expiration day. It is not unusual to see a short reversal of the overall trend as traders unwind their position, only to see the trend resume at the start of next week. Therefore a word or warning, there is always the possibility that any perceived upward trend of the last couple of days could be reversed at the start of next week.
This morning we have managed to select our candidate for today’s trading position. We are looking at covered puts on Newmont Mining ‘NEM’. We have not yet selected the options position and will tweet our selection as soon as it is made. On Twitter we can be found at sterlinginv
Sterling Market Commentary for Thursday March 15th, 2012
Twitter Model Portfolio Tweet Policy: Currently Sterling Investment Services is managing a trading strategy based upon covered puts and calls. Sterling Investments is currently running a “Model Portfolio” that is based upon this strategy. It should be noted, that at this point in time, Sterling Investment Services is only “paper trading” this model portfolio, and not actually executing trades and creating actual positions within this model portfolio. Therefore, please do not look for actual volume associated with our options selections. It is Sterling Investment Services goal to initiate trading in an actual account based upon our model portfolio in the near future. When that change actually occurs, Sterling Investments will notify its readers via Twitter and our website.
Sterling Market Commentary for Wednesday March 14th, 2012
We are going to start something new today at Sterling Investments; we are going to start tweeting our daily trading idea. I used to to publish a daily trading letter, the Sterling Prime Stock Newsletter, but I found that the changes to the market from the rise of modern computer driven trading has pushed the time by which I selected the day’s recommendation closer and closer to the open where I was unable to publish the recommendation with enough time for my readers to take advantage of the recommendation. Additionally as the volatility in the market increased, I found the short term trading of individual stocks to be increasingly more difficult to manage. This resulted in my shifting my trading strategy to one of covered puts and calls. Granted it is not the most exciting, but the results are a lot more consistent. So, starting with tomorrow’s market commentary, I am going to start tweeting our daily stock and options recommendation once we have selected the position.
If you would like to follow our daily activities, on Twitter we can be found at sterlinginv
Sterling Market Commentary for Tuesday March 13th, 2012
I have written many times in the past that I believe that during options expiration week you will see a reversal of the overall trend of the market as traders unwind their positions prior to the actual expiration; then following expiration at the start of the next current month, the trend will resume. What that means for today and this month is that I have felt there is a slight downward bias to the market, that could see a temporary reversal back to the upside this week before resuming its slight downward movement next week. ….
Sterling Market Commentary for March 12th, 2012
In looking at the charts from Friday’s trading activity there was not a whole lot to see, it was pretty much a dull market. There really was not a whole lot to see, with many of the sector indices and individual stocks are somewhere between support and resistance. Basically a lot of sideways movement, but not a lot of clear breakouts to the upside or downside. There has been a definite decrease in the volatility in the markets this year. While this decreased volatility has gotten a minor amount of coverage in the press, one of the consistent themes for this decreased volatility is the upcoming “Volker Rule,” and that many of the big banks and investment banking firms have curtailed their proprietary trading operations. I definitely believe that time will tell on this topic, I do think the volatility last fall had gotten out of hand, and that sort of volatility can do long term damage to the market. While I still have some mixed feelings about the Volker Rule, I think any reduction in volatility, if it can be legitimately attributed to the Volker Rule, is more of an unintended consequence than a designed effect.
Sterling Market Commentary for Thursday March 8th, 2012
In looking at the charts from Wednesday’s trading the trend of the market remains weak, however yesterday’s big bounce tends to pull stocks and indices that recently broke below support back above those support levels. What this really ends up doing in my opinion is that it greatly reduces the number of potential trading candidates for the day. It also tends to throw the continuation of any downtrend in doubt.
With the volatility we have seen in the market over the last several years I have adopted my strategy from one of being a purely short term, day trader to one of selling covered puts and calls. This results in my building a portfolio of covered puts and calls over the course of a month that then reverts back to cash on options expiration. During this process I generally try to build a portfolio that is a mixture of long and short positions. I am looking for today to be a day where I can balance out my put positions with a call position that will not get stopped out prior to expiration.
Sterling Market Commentary for Wednesday March 7th, 2012
A Few Thoughts on Wednesday’s Market: In looking at the charts from yesterday’s trading activity it is pretty clear that basically every index I track has broken its upward or sideways trend and looks to starting what should be at least a short term pullback. There only 2 stocks with a more than a million shares in average daily trading volume that closed at a new yearly high yesterday; and the very vast majority of the heavy volume stocks moved lower on the day.
I continue to see support on the Dow Jones Industrial Average coming in at….