Market Direction Intraday Comments Feb 12 2013 – Grinding Higher

Market Direction so far today is continuing to grind higher as investors prepare for the State of the Union Address this evening. Personally I see nothing to get excited about in the address that will boost or drop the market direction. The economy is creeping along with bright spots here and there and shadows everywhere. Nonetheless the market direction remains positive.

Market Direction Action For Today

Not a lot to report so far today with market direction action. Facebook Stock is back on my radar. Facebook Stock is my speculative trade which investors probably recall. I will write-up more about Facebook Stock this evening. Meanwhile my best trade today is with Fortis Stock which is in my retirement account. Fortis Stock is a stock I have traded repeatedly over decades, not just years. A very strong management team behind Fortis makes this a winning stock. I have more to write about Fortis Stock this evening as well.

Market Direction Chart

Only a couple of things to point out in today’s chart.

market direction - intraday Feb 12 2013

Click to enlarge image for Market Direction Chart

The S&P 500 continues to indicator poor conditions which is common with bull markets that grind higher against the disbelief of investors and in particular analysts. The morning sees a bit of selling. Within a half hour at point A a bottom is put in and the market has a very nice rally up to point B. A pullback sets a new higher low but at point C investors worry that the point B is resistance and fail to push the markets higher. Following Point C investors sell, but the resistance holds at a point higher than point A. Finally investors decide that today won’t see a sell-off and traders step in and push stocks higher.

The push higher brings in more investors who looks at the overall market direction, basically shake their heads and usually mutter something about not being able to get into their favorite stocks because they “just won’t pull back” enough and so they buy which supports yet another new 5 year high in the S&P 500. This has been the pattern for much of last week. Once selling happens but the market hardly falls, investors almost grudgingly buy in.

Put Selling Market Direction

I have no interest in chasing stocks higher at this stage. The obvious direction is still higher but there are so many warning signs that staying cautious I believe is a better bet when looking at market direction. This is the beauty of Put Selling. Pick the stronger stocks and sell puts against them. Watch carefully and close when profits are there. Buy back naked puts early is always worthwhile and quite profitable.

Market Direction Intraday for Feb 12 2013

It’s a matter of staying nimble and staying with the trades that should the market direction take a bit of a tumble on any catalyst to the downside, the puts sold can be quickly closed and new positions established should the market direction fall back. Put Selling a rising market direction that is overvalued in my opinion, is still safe if one stays nimble and realizes that when Put Selling, don’t worry about holding until options expiry. Look for opportunities as you remain aware of market direction and the risk of a pullback. In this way you are not chasing stocks higher, but still building profits in an overbought market.

Internal Market Direction Links

Profiting From Understanding Market Direction (Articles Index)

Market Timing Articles Index

How I Use Market Timing

Understanding Short-Term Signals

Various Market Timing Systems

Market Direction Candlestick Daily View (Members only)

Market Direction Portfolio Ongoing Trades (Members only)

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  • jesse

    hi teddi, is it safer to sell puts on stocks that are below there 200ma when the market appears to be overvalued?

  • If you do not want to own shares ever, then it is safer to sell puts on rising stocks.