Author Archive for sterlinginvestments

Sterling Marekt Commentary for Wednesday April 11th, 2012

A Few Thoughts on Wednesday’s Market: In looking at the charts from Tuesday’s trading activity I noticed a couple of items of significance. The 1st being that volume increased significantly on Tuesday. Heavy volume on the way lower is always considered a bearish trading signal for the markets. The other significant item I noticed was that the very vast majority of the indices and individual stocks I looked at broke through support during their moves lower. This break below support was significant enough that even a 100 point move higher in the Dow Jones Industrial Average will not get many of these stocks back above those support levels, which are now upside resistance levels.

While early morning futures are looking positive, I do not see any move higher today being much more than a bounce before the market moves back lower. I am going to be looking for a covered put position to enter for this morning’s trade.

Sterling Weekly for the Week of April 2nd, 2012 – A Look at 1st Quarter Index Performance Results

We saw the end of the 1st quarter of the year last week. As usual I like to take a look at the performance of the various sector indices I track and see what the market is telling us. I usually find these results to be somewhat interesting. I have published the results below for your review as well……………..In looking at the results of the 1st quarter 2012, the average index gained 12.21%. Overall a very good performance, but one that we should not expect to be repeated for each of the remaining 3 quarters as that would equate to a 48% plus annualized return. As far as the major market indices are concerned, the Dow Jones Industrial Average was up by 994.48 points or approximately 8.14%, the S&P 500 was higher by 150.87 points or approximately 12%, and the NASDAQ 100, obviously benefiting from the effect of Apple, was higher by 477.44 points or approximately 20.96%………………………..i have stated many times that I believe that Bull Markets are primarily the result of 2 things; the first being new technology, and the second being changes in government regulation. The results of the 1st quarter are pretty well explained by that thesis. The top performing indices were either the result of new technologies, such as the Amex Biotech Index and the various technology indices that were heavily influenced by Apple, Inc. ‘APPL.’ The second set of indices, those influenced by government regulation were the interest rate indices, the TYX, TNX, and FVX. The poor performing indices reflect the same results, rising interest rates is a negative for the Utility industry, and precious metals such as gold and silver. Additionally the beginning of the implementation of Obamacare and its massive amounts of regulation is a negative for the Healthcare related indices.

Sterling Market Commentary for Wednesday April 4th, 2012

After looking at the charts from Tuesday’s trading activity, it is somewhat surprising the turnaround. Despite the moderate move lower in yesterday’s market, the vast majority of the heavy volume stocks I looked at showed negative chart patterns. I attribute this to two primary factors. The 1st being the statements from the Fed that there will probably not be any additional quantitative easing, and the second being that the call for Apple to move to $1,001 per share, said that a big portion of the increase in value in Apple would come from market share gains at the expense of its competitors. Not good to be those guys, and as a result, Apple went higher, while many of the high tech indices went lower.

Sterling Market Commentary for Tuesday April 3rd, 2012

The overall market moved moderately higher on Monday and showed broad based strength in the process as the majority of the various sector indices I track moved higher, displaying solid chart patterns in the process. It has been a long time since I felt the overall market showed the strength that I saw in Monday’s charts. I am looking for the overall market to continue to move higher. In looking at a chart of the Dow Jones Industrial Average, I see that it completed a “cup pattern” in late February with a measured move to 14,955.78 While I do not expect the move to 14,955.78 to be in a straight line, and I expect at least 1 pullback along the way, I am now setting our new intermediate to long term target on the Dow Jones Industrial Average at 14,955.78

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.