Schaeffer's Trading Floor Blog

Updated Index Charts

by 4/14/2005 12:56 PM
Stocks quoted in this article:

Even though the whipsaw action of the last few days has me convinced these will be obsolete as soon I post them, I have updated the index charts we have been tracking...I guess I am just a glutton for punishment.

Created with SuperCharts by Omega Research

As you can see, we glide through lunch with the RUT and QQQQ testing the water below the recent lows while the DIA follows closely behind.

In other words, these three are trading at new lows for 2005... This does not seem like constructive action....

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Checking Back on QLGC

by 4/14/2005 11:59 AM
Stocks quoted in this article:

A little while ago an alert on my screen was triggered on QLogic (QLGC)...which I talked about last month and said I use as a proxy for "smaller-cap/tech/momentum" area. The alert was set at the short-term support zone which was aligned with the 20-week moving average. The daily chart below highlights the interaction around that support...


Created with SuperCharts by Omega Research

While the equity scorecard is still rather neutral, it might be worthwhile to keep an eye on this stock as it appears to potentially be in the early stages of rolling over. As I noted in the link above, analysts have become decidedly more bullish in the last couple of months. A check of Zacks shows that 13 of the 18 analysts (72 percent) still rank QLGC with a "buy" rating so weakness has the potential to "spook the herd"...


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Chop

by 4/14/2005 11:30 AM
Stocks quoted in this article:

With nearly two hours of trading under our belts we see...


Chart Courtesy of Thomson/ILX

...the SPX still trading below breakeven in a choppy fashion. Around an hour ago I saw some excited chatter about oil ticking below 50 but this really didn't do anything to improve the equities picture.


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Readers Respond - Insurance?

by 4/14/2005 11:11 AM
Stocks quoted in this article:

Michael says - "I enjoy reading your trading blog and ETF info. Have you heard about any insurance company ETFs?"

My response - Unfortunately, I am not aware of any Exchange Traded Funds (ETFs) that the focus primarily on insurance. While there are a few financial based ETFs...such as iShares DJ US Financial Sector (IYF), iShares DJ US Financial Svcs (IYG), and Financial Select Sector SPDR (XLF)... they tend to focus on the banking/finance behemoths like Citigroup, Bank Of America, and JP Morgan. You might find AIG in the top ten weighted stocks but the insurance sector as a whole tends not to get much weight.

I will admit, however, that I may not be aware of every ETF out as they seem to be popping up all over the place. If someone does know of one - can you pass it along so that we can all enhance our knowledge?

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Stocks quoted in this article:

Mike says - "First, thanks a ton for the explanation regarding the differences in the XOI, OSX and OIH--I had actually forgotten! next, regarding the interesting Bernie article "Watch Out Below", I'm a bit confused. He cites good reasons for an impending downturn in the NDX, yet says that put support for both April and May should keep the cubes at 36. This seems contradictory, but I may be missing something. Could you explain if you have the desire and time? Thank you and keep up the great work."

My response - I saw this question right after I posted the email below...

In the trading world nothing is certain and many times (if not nearly all the time) you will be presented with conflicting information. In this case there is overwhelming complacency (VXN) pitted against support (QQQQ put open interest).

Each person may have a different takeaway, but for me, it warns that it is important to keep an eye on risk because a break may catch many off-guard and fits with comment this morning that things have a way of "sneaking" up on the Street....

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