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Stocks giving back some gains

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Stocks are giving back some of yesterday's gains as the Dow Industrials slips back 77 points at 10,064 (-0.75%), the S&P 500 falls 11 points to 1,077 (-1.05%) and the NASDAQ Composite (COMPX) gives back 29 points at 1,667 (-1.7%).

After a sharp round of selling in the Treasury bond market yesterday, Treasuries are hovering near unchanged levels currently, after seeing some follow through selling earlier in the session. We're keeping a close eye on the 10-year YIELD ($TNX.X) currently at 5.218%. A move much above the 5.25% YIELD level could provide bullishness to stocks.

Some of the 60-minute charts I'm looking at show both the 50-pd and 200-pd MA's potentially in play. Not just in some of the braoder market averages, but individual stocks.

Dow Industrials Chart - 60-minute interval

The Dow Industrials (INDU) rallied right to their 200-pd MA yesterday. I'm expecting bears to try and short that level and look for a pullback to the 10,000 level as a near-term target.

Expedia Chart - 60-minute interval

In yesterday's and today's market monitor, I've tried to address questions from bulls and bears regarding Expedia (NASDAQ:EXPE). You can really see how the retracement on the 60-minute chart has the stock basically sitting right at the 50% level, or "neutral." The rising 200-pd MA has served as support for moves higher. With MACD trying to round out at a lower level, I'd be looking for the stock to trade higher, stop under 61.8% retracement of $72.02 (say $71.95) and target a move higher at $80.60. This is a SHORT-TERM observation. Lots of bears in this one, some may want out as the stock traded against the market declines earlier this month. Yesterday the stock was hit by selling due to potential competition from hotel chains discounting their own hotel rates.

Try looking at some charts on different time frames. Start with weekly interval, then move in to daily and then hourly. Almost like looking at the earth from space, then from a plane, then at ground level. It's time to roll up those sleeves and get dirty!

Jeff Bailey
Senior Market Technician
Option Investor

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