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  Jeff Bailey   6/13/200,  4:42:34 PM
Closing Internals .... today was the "first day" since Monday, that we have a comparable advance/decline ratio of 1:2 to really compare with. The one thing I really wanted to look for as it relates to internals and today's trade, is how the NH/NL ratios did. Here's my spreadsheet, and comments will follow.Link

One day isn't a trend, and Monday's trade will give greater focus, but see the "light volume" today? This is not too different than the "light volume" on Monday, after a "key reversal" day from Friday (06/06/03).

Today's NH/NL ratios were sligthly weaker than benchmarking back to 06/09/03, but not much were they? I don't think so, but we do notice some "stretching" at the head/NH and tail/NL for both the NYSE (301:10) and NASDAQ (171:5) when we compare back to 06/09. This "stretch" on a very short-term basis is what I think of as pulling a rubber band at both ends, eventually some thing will "snap!"

One reason I was a little more bullish today (sell June QQQ $29 put premium) and taking an SPX bullish trade at 988, is I think there's a good chance that there will indeed be some continued "urgency" among some fund managers to get invested by the June quarter, so that by end-of quarter reports, their investors "smile" knowing what wonderful stocks they've owned and how well they've done the recent quarter (I think they'll be a little less happy later this summer.)

For those that read last night's Index Trader wrap, I did profile the SPX as bullish 988, stop 972, target 1,080.

Now... at times I "assume" that a trader understands where the 1,080 comes from, and I "assume" that traders aren't loading the boad on out the money calls with thought 1,080 is destiny and easily achievable.

This should NOT be the "assumption!" I profiled this trade today using the DAILY/WEEKLY (which now will be changed) at a LEVEL that "made some sense" with our work in last night's Index Wrap.

I think Monday will be an important observation day for the SPX trade. Note today's low of 984.27, which was darned close to where a 3-box reversal of 984.00 would have taken place, and may still on Monday, per our unconventional 6-box scale. Link

As it relates to today's internals, I kind of like, or am comfortable with some of my bullish thoughts as it relates to the QQQ trade and SPX trade and it relates to what I think may happen into the end of the month.

 
 
  Jeff Bailey   6/13/200,  4:26:35 PM
Forest Labs (FRX) .... I disagree with Joe Kernen's (CNBC) saying FRX traded higher on "generic drug makers" news. While FRX does have a generic drug branch, I did find some that I think is/was driver today. Here's the news Link

 
 
  Jeff Bailey   6/13/200,  4:20:26 PM
June 975 puts/calls both most active option on SPX today. If anything, is notable with our 6-point box chart Link as if selling the 975 call ($19 credit) and buying the $975 put protection ($4.80), with thought SPX doesn't close above 995, or below 970 on June expiration?

 
 
  Linda Piazza   6/13/200,  3:57:21 PM
Now the NDX decides to test 1200!

 
 
  Jeff Bailey   6/13/200,  3:56:29 PM
HMO Index (HMO.X) 708.60 +0.12% ... edging green. I've got to at least be thinking some bullish rotation continues to this sector.

 
 
  Jeff Bailey   6/13/200,  3:54:51 PM
S&P Banks Index (BIX.X) 307.87 (unch)

 
 
  Linda Piazza   6/13/200,  3:53:14 PM
Jeff, can't help laughing about your Friday, the 13th story. I'm not a hunter (not in favor of guns, actually), but until the recent death of one dog, I had two: a golden retriever and a lab. The golden once killed two birds at once as they flew up as my husband was mowing the yard. I guess I'm lucky it was in our backyard, or I'd be in trouble, too.

 
 
  Linda Piazza   6/13/200,  3:50:27 PM
The OEX just hit 498.23, so even my second 498.20 stop would have been triggered, so I'm satisfied. I'll try not to watch if the OEX now craters below the day's lows, but any of the rest of you in bearish trades are free to celebrate. If I'd intended to hold over the weekend, I would have kept my original 501 stop, but without a move below 495, it was never my intention to stay, but rather to exit ahead of the weekend.

I've just been studying the daily chart, and it shows a classic evening-star reversal pattern being completed with today's trades. How many times have we heard those words lately? Even that reversal signal has not yet pushed the OEX below the midline support offered by the regression channel on the daily chart, however, and it will require a move below that level, at least, before bullish sentiment is undone.

 
 
  Jeff Bailey   6/13/200,  3:48:13 PM
So far today I've spent 45-minute with animal control as neighbor kid sees my Lab puppy chewing on a dead pigeon that fell off the roof, kid calls animal control in tears that my dog is killing the pigeon. Animal control sees some taxidermy on my walls, wonders if I didn't shoot the pigeon. Friday the 13th a "bad luck" day. I've said before I don't like to buy/sell any stock with the number "13" associated with it. Today's visit from animal control furthers my superstition.

 
 
  Jeff Bailey   6/13/200,  3:41:51 PM
Oxford Health (OHP) $42.40 +0.14% .... edges green here. Starting to wonder if there isn't a little "end of quarter window dressing" taking place here.

 
 
  Linda Piazza   6/13/200,  3:33:46 PM
This week, a lot of Monitor talk has centered on personal trading styles and how they work. Unlike Alan H.. I don't have a good feel for jumping on entries. I have to use various parameters that I've set up for myself: the "all the ducks in a row" stuff. However, I have a much better gut feel for exits. When I honor that gut feel, as I did a few minutes earlier when I kept lowering my stop on my OEX put position until I got taken out, I'm usually glad. It's when I don't honor that feeling because my original stop hasn't yet been hit that I'm usually not so glad. That gut feeling probably comes from a lot of cues I'm picking up that might not necessarily show up on the charts. Honor your own strengths and find ways to work around your weaknesses.

 
 
  Mark Phillips   6/13/200,  3:28:37 PM
Thanks Linda! The more time goes by, the more I see the merits of the ratio form of the data that you use. I may just have to start watching both.

 
 
  Mark Phillips   6/13/200,  3:24:18 PM
Amen, to that Jonathan! In reality, the biggest benefit I've found in following the ADVDECV indicator is not in its ability to signal a trade, but as a filter to tell me when the price and oscillator action is lying to me. That hasn't happened to anyone else lately has it? HUGE GRIN!

 
 
  Linda Piazza   6/13/200,  3:21:53 PM
Mark, I use raw data, delayed, and calculate it myself. There are pros and cons to each method. I prefer this calculation because it tends to stay more reliable when volume moves up and down. The ratios tend to stay purer.

 
 
  Linda Piazza   6/13/200,  3:19:28 PM
I'm out of my OEX put position on the move over the 30-minute 100-pma. This isn't the profit I hoped to take home, but, hey, a profit is a profit, right?

 
 
  Jonathan Levinson   6/13/200,  3:18:39 PM
Mark, it's for that reason that I only glance at those data. The PUTCALL vs. CBOE market data are always a source of bounteous debate too. Price and its oscillators are my primary sources, and I treat breadth as secondary.

 
 
  Linda Piazza   6/13/200,  3:17:11 PM
Because of personal considerations (I lack courage), I've decided to exit my OEX put position ahead of the weekend. Monday's economic calendar is light, and with today's pullback being light, too, I can see a bounce attempt early next week. There are opex shenanigans to factor in, too, plus the fact that the OEX never did drop below the 30-minute 130-pma.

 
 
  Mark Phillips   6/13/200,  3:15:02 PM
Glad to help, Jonathan! I can't tell you how long I blindly used the Quote.com numbers before figuring out the error. I'm not sure why they can't get that data correct, but it is one of the largest concerns I have in my daily monitoring of the ADVDECV ratio...if the absolute volume numbers are incorrect, then it begs the question as to the validity of the ADVDECV calculation.

In reality, it isn't a ratio, but a subtraction. Linda, I know you watch an indicator that is actually the ratio of advancing vs. declining volume. Is that on eSignal, or do you use another service?

 
 
  Jonathan Levinson   6/13/200,  3:09:21 PM
Mark, they appear to be grossly inaccurate in the present, too. Thanks for the correction. I use Quote.com's feed for my index streamer in Quotetracker, and it's currently displaying 2.12B shares traded on the COMPX. I'll ignore it and go with your data, as it seems to be out of line.

 
 
  Mark Phillips   6/13/200,  3:06:09 PM
Jonathan, I just saw your 14:32 post about volume levels and have to ask. where did you get those numbers? checking on Yahoo!, I show the NAZ having traded 1.46 billion and the NYSE still under a billion. If you're using the volume figures from Quote.com, I have found them to be grossly inaccurate in the past.

 
 
  Linda Piazza   6/13/200,  2:59:24 PM
With OEX 497 now having been confirmed as resistance, I will again lower my (mental) stop, to 497.20 this time, just above 497, and also the site of two one-minute troughs this morning.

 
 
  Jonathan Levinson   6/13/200,  2:56:32 PM
Other than the fallout in GE, this has been a quiet half hour. No breach of support for NQ, ES or YM at current levels, but the lack of bounce remains as surprising as it is bearish. The US Dollar Index is finding a new home below 92.30, while treasuries head into the just above their lows, FVX -5.9 bps, TNX -6.2 at 3.106% and TYX -4.7 bps.

 
 
  Linda Piazza   6/13/200,  2:50:03 PM
I had my finger on the trigger there as the OEX rose above 497, but my one-minute chart shows OEX rising in a classic bear-flag pattern and just now breaking down out of that pattern. There's still that 30-minute 100-pma to cause worry, however, with that average now located at 496.40 and the OEX currently just below that, at 496.36. Without a definitive break of that average, I may soon be exiting.

 
 
  Jonathan Levinson   6/13/200,  2:32:50 PM
Speaking of volume, the COMPX is already above 2B shares while the NYSE is at 1.12B shares so far traded.

 
 
  Linda Piazza   6/13/200,  2:25:52 PM
The OEX currently tests the oft-mentioned (at least today) 30-minute 100-pma, with that average currently at 496.51, and the OEX currently trading at 496.43, just above that average and the 496 S/R. The VIX has popped back up, and volume patterns continue to show weakness. In fact, those volume patterns may be slightly weaker, with down volume now 4 times up volume on the NYSE and 4.3 times up volume on the Nasdaq. I'm watching, and still want to exit just above 498 if the OEX continues to gain strength.

 
 
  Jonathan Levinson   6/13/200,  2:22:43 PM
August gold closed at 357.10, up 3.20, with the fast line on the 10 day stochastics turned back up from the bottom. Could it be a truncation of the downphase? No signal yet, but it's a good day for gold bulls. XAU and HUI mean business, scoping their previous topping levels, HUI +3.92 to 150.19, XAU +2.19 to 78.87.

 
 
  James Brown   6/13/200,  2:16:28 PM
Sector Losers today:

Actually, every sector I follow is in the red today, save for the XAU Gold & Silver index, which is up 2.58%. Here are the sectors suffering the worst:

FPP.X forest & paper products -7.24%
OSX.X oil services index -3.19%
SOX.X semiconductor index -3.64%
GHA.X hardware index -2.29%
INX.X Internet index -2.41%
XNG.X natural gas index -2.52%

 
 
  Jeff Bailey   6/13/200,  2:15:45 PM
June 5th Index Wrap ... now I've got to be alert to comments made in June 5th Index Trader Wrap, especially as it relates to today's bullish profile of SPX on risk/reward comments from last night.

Here's the Link to the June 5 wrap, and how I look to now have to tie in action with XAU.X at downward trend (right here) and will STAY FIRM with bullish stop in SPX as profiled this morning at 988 (spx 986 here).

 
 
  Ray Cummins   6/13/200,  2:14:46 PM
Spread/Combos & Premium-Selling -- More E-mail Replies

(Condensed) Hello Ray, I sold some puts that are almost "in-the-money" and since next week is expiration, it got me to wondering about possible assignment. Who determines if MY options are assigned when they are very close to the strike price at expiration?

First, you should know that options which are in-the-money by a specific amount or more (usually a minimum of $0.25) will automatically be exercised by the put buyer's broker on the expiration date. This is called Automatic Exercise. As far as the actual transaction, the Options Clearing Corporation (OCC) is the guarantor of all exchange traded options once an option has been bought or sold. After you write an option and a buyer purchases it, the OCC takes over and it is their responsibility to fulfill the exercise request.

It works like this: If you want to exercise an option, you notify your broker. The broker then notifies the OCC. The OCC then randomly selects a brokerage firm which is short that particular option and advises that it must purchase 100 shares of the stock. That brokerage firm then notifies one of its customers, who has written that specific option, and advises that he has been assigned and must buy 100 shares of the stock because a put contract has been exercised. The specific customer at the brokerage firm customer is generally chosen in one of two ways. He can be chosen at random, or he can be chosen on a "first-in/first-out" basis. Also, because the OCC has a certain risk in the transaction (they guarantee that the stock will be purchased if the seller of the option can't fulfill his contract), strict margin requirements are imposed on sellers. You can view these requirements at: Link

 
 
  Jeff Bailey   6/13/200,  2:12:20 PM
Gold/Silver Index (XAU.X) 78.50 +2.47% ... getting upside alert here to mark a break above June 6 relative high. This is the "right shoulder" that sector bears keep wondering if the head/shoulder pattern is intact. I didn't think it was, and today's trade from the MARKET doesn't think it is either.

 
 
  Jeff Bailey   6/13/200,  2:10:08 PM
02:00 PM EST Internals...

NYSE 5,585 -1.16% ... Vol. 786.5m A/D 10:21 NH/NL 254:7

NASDAQ 1,626 -1.67% ... Vol. 1.24b A/D 10:20 NH/NL 147:5

I'm looking back to Monday's internals, which also showed A/D of 1:2 and will benchmark what the NH/NL look like by today's session end. Looking for sign of "change in leadership" to the downside. At conclusion of Monday's session, NYSE NH/NL was 267:8 and NASDAQ NH/NL was 146:4

Current analysis is 4-lettered stocks a little weaker (NASDAQ) while NYSE (1,2, 3 lettered stocks) still holding the NH/NL ratio.

 
 
  Jonathan Levinson   6/13/200,  2:05:31 PM
The put to call ratio at .77 is quite tame compared with what we've seen during the rally, an encouraging sign for bears.

 
 
  Jonathan Levinson   6/13/200,  1:57:25 PM
This is getting interesting, with a renewed push lower at support.

 
 
  Linda Piazza   6/13/200,  1:54:24 PM
The OEX now trades below the 30-minute 100-pma, now at 496.29, although there still has not yet been a 30-minute close below that level. The 130-pma, another average Jim watches, lies below at 494.20. Coincidentally, the 494.50 level is one I've had marked on my intraday OEX charts for some time, since it proved to be S/R at various periods from June 4-10. I would expect another bounce attempt from the confluence of that average and that historical S/R, especially as it's natural to see the violated 100-pma retested. Now that I'm making money, I don't want to lose all my profits, so I'll lower my (mental) stop to 498.20, just above the last five-minute high. A move that high will have bounced the OEX back above the 30-minute 100-pma, too, so this would be a viable exit according to my system and Jim's.

 
 
  Jonathan Levinson   6/13/200,  1:53:10 PM
My dad called me yesterday at 5PM to express concern that he was "missing the rally." This could be a new indicator to track :)

 
 
  Jonathan Levinson   6/13/200,  1:49:25 PM
Not much bounce so far off those supports. Yields are still strong down, TRIN.NQ 2.06, TICK.NQ -110, QQV up a mere .10 at 28.71.

 
 
  Jeff Bailey   6/13/200,  1:49:00 PM
Maxim Integrated (MXIM) $34.42 -3.8% .... had downside alert set here for a semiconductor stock to look to short on triple-bottom sell signal. While bullish support trend may provide some near-term support, I like the series of lower highs back to December still in place and "early sell signal" when bullish % high compelling for bears on technical breakdown. Link

Relative strength vs. NASDAQ-100 has been weak, and recently gave "sell signal" on RS chart. Link

 
 
  Jonathan Levinson   6/13/200,  1:44:13 PM
Support continues to hold on the indices.

 
 
  Jeff Bailey   6/13/200,  1:38:55 PM
Gold Bugs Index (HUI.X) 149.13 +1.95% ... making its way above the June 6th relative high of 148 here. For further sign of bullishness, bulls should find a close at today's highs. $HUI.X looks to challenge its June 2002 and January 2003 highs of 155. Abover there.... supply is limited, if not... nonexistent. Here's a Link to the $HUI.X on expanded view to bring in the June 2002 high.

Current levels of trade are at the bullish vertical count of $148, its the short-covering that we've been looking for to get the real surge, which should be building, that we're looking to really get things going to the upside.

 
 
  Linda Piazza   6/13/200,  1:37:18 PM
Here comes the 1:45 test of support (or resistance), only it arrived about ten minutes early today. The OEX now tests that 30-minute 100-pma, with the average now at 496.30 and the OEX at 495.83. There has not yet been a 30-minute minute close below that average, however.

 
 
  Linda Piazza   6/13/200,  1:33:03 PM
Remember Ralph Bloch saying yesterday that he'd sold all of his long shares as of two days before his appearance on CNBC? He was selling into that strength. I wonder how many others were?

 
 
  Jonathan Levinson   6/13/200,  1:30:07 PM
Breaking to the downside out of those bear wedges here, but still above support.

 
 
  Jeff Bailey   6/13/200,  1:27:58 PM
01:00 Update posted at this Link

 
 
  Jonathan Levinson   6/13/200,  1:24:37 PM
The US Dollar Index has fallen through 92.50, laat on my delayed chart at 92.42. August gold is up 3 to 356.90.

 
 
  Jonathan Levinson   6/13/200,  1:22:04 PM
Aged Wards has just cut GE to "hold". Good news for those puts of mine.

 
 
  Linda Piazza   6/13/200,  1:20:08 PM
I'm still in my OEX put play, although I worriedly watched the 498 level as the OEX rose. What's keeping me in the play? Not the VIX, which is higher on the day, but far below this morning's high. It's the volume patterns. As yet, they've shown no marked improvements with advancers still about twice the decliners, and with down volume about 3.5 times up volume on the NYSE and about four times up volume on the Nasdaq. Repeated failures to take out 496 will have me exiting with my profit, however. As a heads up, the 30-minute 100-pma is now at 496.22.

 
 
  Ray Cummins   6/13/200,  1:06:36 PM
Spread/Combos & Premium-Selling -- E-mail Replies

(Condensed) My question is how can one determine what it would cost to buy back a given naked put at various levels if the stock price is moving towards the sold strike price. Is there a formula to calculate this?

Yes, there is a way to calculate the (expected) price of an option, for any given price in the underlying. However, don't get out your pencil and paper because there are a number of web-sites available (cboe.com is a good place to begin) on the Internet with free calculators that will make the process much easier. The one thing to be aware of is that you have to input the values of the individual components that affect the price of the option, the most arbitrary factor being its implied volatility. This is an estimated value that only you can provide, based on historical volatility and your forecast for the underlying issue. However, there are some tools to help you generate a reasonable approximation of that value and one of the best sources for option pricing education, models and volatility software is located at: Link

 
 
  Jonathan Levinson   6/13/200,  1:01:46 PM
They call that a bounce?

 
 
  Linda Piazza   6/13/200,  12:38:09 PM
The VIX falls back below 23 as the OEX attempts to move over its last five-minute high at 497.65. Volume patterns remain weak, but a sustained move over that 497.65 level predicts a rise back toward 499 since there's now a 496.50 double bottom on that five-minute chart.

 
 
  Jonathan Levinson   6/13/200,  12:31:39 PM
The recently weaker NQ contract is bouncing from its 1205 fib support level (61.8%) profiled on the daily charts. The bounce so far is quite weak, more of a pause. First resistance is at 1215, with stronger resistance at 1220. Meanwhile, August gold is up 3.50 to 357.50, which is just below former support-now-resistance in the 359 area. HUI is up 3.08 to 149.35, XAU +1.60 to 78.28.

 
 
  Linda Piazza   6/13/200,  12:24:25 PM
Jim often talks about the 30-minute 100 and 130-pma's. The OEX 30-minute 100-pma has risen through the morning and now crosses at 496. The OEX keeps testing this MA. Taking Jim's cue, if the OEX manages to trade beneath this average, I will hold on for a test of the 130-pma, currently just below 494. If bears can't push the OEX below that 100-pma, I'll be watching for an exit. My original stop was 501 when entering the trade, but if I don't like the way things are looking, I may exit ahead of that point. So far, the VIX remains up, the dollar remains down, and volume patterns continue to show weakness.

 
 
  Jonathan Levinson   6/13/200,  12:22:43 PM
Agree, Linda- looks like either bear flags or possibly pennants on the 5 minute charts.

 
 
  Jonathan Levinson   6/13/200,  12:20:18 PM
The US Dollar Index is testing the 92.50 support area on spikes lower, but holding so far. ES is just below it's 78.6% retracement level off the high on the daily candles, with 980 the next support. The intraday oscillators are trying to turn up for a bounce here.

 
 
  Mark Phillips   6/13/200,  12:18:35 PM
LLL $44.48 (+0.59) Hindsight being 20-20, it certainly looks like the apropriate course of action would have been to drop LLL last night. Bucking the trend in the broad market and even the DFI index, the stock is up again today. At its current price, the stock has exceeded its last two intraday highs ($44.46 and $44.40) and is poking through the 200-dma for the first time in nearly a month. While our stop is set at $44.70, I think conservative traders in the play may just want to cut their losses here and move on. At a minimum, I would look at a dip between now and the close as a better exit point, not an invitation to enter new positions.

 
 
  Jonathan Levinson   6/13/200,  12:12:05 PM
Really no change here, with the indices not bouncing, just bleeding lower so far. Put to call ratio dropped .01 to .75 as dip buyers stepped in.

 
 
  Linda Piazza   6/13/200,  12:01:03 PM
The OEX five-minute chart appears to show yet another bear flag, with the OEX currently testing the downside of that flag. If it does break to the downside, as it may be doing currently, I'll be watching this next approach to 496 even more close.

 
 
  Linda Piazza   6/13/200,  11:55:59 AM
To measure against the earlier volume patterns, current adv/dec ratios are .46 for the NYSE and 2.4 for the Nasdaq. Down volume is 4.2 times up volume on the NYSE and 4.4 times down volume on the Nasdaq. Although far from significant as yet, new lows have increased slightly today, now numbering 11 on the NYSE and Nasdaq and 2 on the AMEX. Total volume is 505 million on the NYSE and 862 million on the Nasdaq. So far, the volume patterns still support a put play, but they may be improving slightly through the morning, so I will continue to watch that trajectory.

 
 
  Jeff Bailey   6/13/200,  11:52:21 AM
S&P 500 Index (SPX.X) Here's my 15-minute interval bar chart. Link

 
 
  Jonathan Levinson   6/13/200,  11:38:25 AM
The put to call ratio is up to .76, a moderate reading.

 
 
  Jeff Bailey   6/13/200,  11:36:57 AM
SPX 988.01 ... Profiling bullish trade in SPX here at 988.01, target 1,080, stop 972. SPX PnF chart on 6-point box Link

 
 
  Jonathan Levinson   6/13/200,  11:34:53 AM
Endless phone call. The US Dollar Index is not breaking 92.50, and QQQ has not broken 29.90 support. NQ didn't come close to 1200 and ES to 980. The shorter cycle oscillators are maxxed out the downside and a bounce, obviously, is on the menu- a failure to bounce will bring in the supports listed above, and while I do expect the uptrend to break, traders need to be mindful of the likelihood of a bounce in the meantime, so whatever you do, use stops. TNX is down 6.8 bps at 3.1%, off its lows. QQV is holding right below 30. August gold is up 2 to 355.90.

 
 
  Jeff Bailey   6/13/200,  11:32:57 AM
S&P 500 Index (SPX.X) 986.35 -1.21% ... here we are, at the correlative DAILY S2 and WEEKLY Pivot levels mentioned from last night's Index Trader Wrap. Do I stick my neck out on this decline? What are next week's Pivot Analysis levels going to be?

This is where I will defer to the work we did with our "is it worth the risk" trade.

Here's what I'm going to do to set up a bullish action point. See if you follow. Starting with 60-minute intervals on the bar chart, I'm going to slowly click down to 30-minute interval, then 15-minute interval. See how each bar has yet to exceed the prior bar?

This is "similar" technique with what we did with the point and figure charts last night. Last 15-minute bar high was 987.38. I'm going to set a bullish action point to go long the SPX at 988.00

 
 
  Linda Piazza   6/13/200,  11:31:20 AM
The five-minute OEX chart does show a slowing of the descent and an attempt at a bounce at 496. The DJI continues to have trouble maintaining 9100, however, and the VIX is now considerably above 23, near its high of the day. Volume patterns show decliners more than double the number of advancers, and down volume 3.9 times up volume on the NYSE and five times up volume on the Nasdaq. I'm watchful, but enough factors still support the play to stay for now.

 
 
  Jonathan Levinson   6/13/200,  11:18:40 AM
Yields continue lower to levels that are becoming shocking today, while equities are testing relative supports within the daily uptrends we've been profiling in the nightly futures wraps. TRINQ 1.95, TICK.NQ -287, QQV +1.15 to 29.90.

 
 
  Jeff Bailey   6/13/200,  11:16:13 AM
11:00 Update posted at this Link

 
 
  Linda Piazza   6/13/200,  11:12:36 AM
My original plan when entering the OEX put play this morning was to exit just ahead of 496, since that had been S/R previously and since the 30-minute 100-pma lies just below at 495.77, but with the DJI falling beneath 9100 just ahead of OEX 496, I'll probably just watch a while. Volume patterns continue to be weak and the VIX holds near 23. I do anticipate an attempt at a bounce here, but so far there's no explosive rebound.

 
 
  Linda Piazza   6/13/200,  11:05:38 AM
The reason for the pause at the current 497.50-497.80 zone? That zone was support and resistance last Friday.

 
 
  Jonathan Levinson   6/13/200,  11:00:12 AM
New lows tehre, with the TNX down to 3.103%, -6.5 bps. TRIN.NQ 1.89, TICK.NQ -205.

 
 
  Linda Piazza   6/13/200,  10:58:27 AM
So far, the OEX five-minute chart shows the OEX falling and then pausing in measured distribution while forming bear flags. Despite the Michigan sentiment number today, overall market sentiment has been optimistic and strong, however, so this or the next bear flag could certainly break to the upside. Volume patterns, bond levels, and the VIX continue to support a put play today, but I'll keep watchful for shifts in those patterns.

 
 
  Jonathan Levinson   6/13/200,  10:44:38 AM
The COMPX volatility index, VXN, has broken above its 50 dma and is setting up a bullish cross of the 50 dma by the 13 dma, just kissing now. Bullish for VXN is, of course, bearish for the COMPX. Current level 35.40, up 1.39.

 
 
  Linda Piazza   6/13/200,  10:42:28 AM
Volume patterns remain weak. The dollar declines. Bonds and volatility indices are up. The indices are down, with the OEX having broken through 499. Although I'm nervous about it, this is my "all my ducks in a row kind of day," or almost all my ducks in a row, and since that's the kind of day I trade according to my plan, I entered a put play when the OEX had a five-minute close beneath 499. Also according to my plan, I do not play front-month options this close to opex, even though I may be exiting the play today, depending on what happens. My original plan is to exit ahead of the weekend, however.

 
 
  Jonathan Levinson   6/13/200,  10:36:11 AM
The put to call ratio is up to .65, a .19 jump from its opening level. TRIN.NQ 1.83 and TICK.NQ -161, QQV up 1.60. Light volume on the bounce so far, while I watch GE printing the right shoulder of a nice, tall head and shoulders formation, neckline at 30.66.

 
 
  Jeff Bailey   6/13/200,  10:35:32 AM
No worries Jonathan. Only reason that caught my eye is I get to say something here that I learned in college from marketing classes. (Grin) You just got about $40,000 worth of my total education in that comment. (10:32:15)

 
 
  Jonathan Levinson   6/13/200,  10:33:24 AM
Thanks, Jeff.

 
 
  Jeff Bailey   6/13/200,  10:32:15 AM
Per Jonathan's 10:23:45 yes "ultimately".... this is the preliminary, and final will follow. Bulk of survey is done and gives most of the data. Once the rest (about 100) are surveyed, may see some skew in the data, then the final number from the survey is released. Final released on June 27th.

 
 
  Jeff Bailey   6/13/200,  10:29:59 AM
Sector Strength Home Construction +0.95%, Gold/Silver +0.53%, Broker/Dealer +0.5%.

Sector Weakness Forest/Paper -6%, Semiconductor -2.9%, Oil Service -2.2%,

 
 
  Linda Piazza   6/13/200,  10:28:22 AM
As a benchmark, here are the volume patterns from a few moments ago: Adv/dec ratios stood at .70 for NYSE-traded issues and .58 for Nasdaq-traded issues. Up volume was 2.5 times down volume on the NYSE and 3 times up volume on the Nasdaq. Total volume was 185 million on the NYSE and 380 million on the Nasdaq.

 
 
  Jonathan Levinson   6/13/200,  10:23:45 AM
June 13 (Bloomberg) -- U.S. consumer confidence faded this month as rising unemployment sapped optimism, a University of Michigan survey found... The index is based on a survey that will ultimately include 500 households.

"Ultimately"?

 
 
  Jeff Bailey   6/13/200,  10:22:26 AM
August Fed Funds Futures (ff03q) 99.175 .... continues to raise day by day. Now has MARKET looking at 70% chance of 50 basis point cut by August meeting.

 
 
  Jonathan Levinson   6/13/200,  10:22:18 AM
You know, Alan, I always wished they'd call me as part of the sample :)

TRIN.NQ -1.90, TICK.NQ -333 and QQV up .94. This looks like the real thing so far, with NQ -21.50 at 1215 and ES -10 at 989.50. QQQ busted 30.30 with nary a pause.

 
 
  Jonathan Levinson   6/13/200,  10:19:48 AM
The US Dollar Index got croaked down to 92.70, but gold remains weak, -.20 at 353.70 on the August contract.

 
 
  Linda Piazza   6/13/200,  10:18:57 AM
We've had a move below 499, and one five-minute close below it.

 
 
  Jeff Bailey   6/13/200,  10:16:02 AM
QQQ $30.11 -1.72% .... falling sharp. One trade an options trader might look at is selling the June $29 puts (QAVRC) on offer at $0.20, with option expiration next Friday. Sell some spike in volatility/premiums today, deteriorate a bit over the weekend, then hold out for 5-days. The bet is QQQ doesn't close below $29.00 next Friday.

 
 
  Linda Piazza   6/13/200,  10:13:22 AM
Twice yesterday, the OEX bounced from just above 499. A bounce from that level again might reassure bulls, while a sustained fall through that level would be a more convincing rounding-down from the double-top formation seen on the hourly chart. That double-top still has not been confirmed, however, and won't be until a drop below 490. Bulls might be expected to defend that 490 level, then, as well as the 496 area that provided S/R lately.

 
 
  Mark Phillips   6/13/200,  10:12:35 AM
MERQ $42.70 (-0.39) Stock downgraded by JMP Securities this morning and I got a reader email asking if the opening dip was a buying opportunity or if we should stand aside. My response is "let price action decide". I don't say that to be a smart aleck, as that is precisely how I measure my trading decisions -- I let the market action tell me which way to go. That's so much easier than trying to force my will on the market or trying to outguess it!

As mentioned in last night's writeup, we were looking for a pullback into the $41-42 area to provide a solid entry into the play. Despite the downgrade this morning, the best the bears could muster was a print at $42.05 before the initial rebound began. Even with the poor reception of the 9:45am ET economic report, MERQ is trading well above its low of the day. This looks like a buyable dip to me. But the important caveat here is that I personally don't like this entry. Looking at recent support, a bounce from $42 looks like a decent entry, but the real solid entry to me would be a rebound from $41 support. It is all about balancing risk and reward. With a stop at $39.95, risk is much easier to manage with an entry near $41.

 
 
  Jonathan Levinson   6/13/200,  10:11:39 AM
Looks like those UMich frat boyz and sorority sisters called the wrong 250? 1000? people to poll.

 
 
  Linda Piazza   6/13/200,  10:10:20 AM
Those early volume patterns are shifting, of course, now showing more decliners than advancers and more down than up volume.

 
 
  Jonathan Levinson   6/13/200,  10:09:06 AM
Rubbing my bloodshot eyes- is there actually selling going on?

 
 
  Jonathan Levinson   6/13/200,  10:07:05 AM
Put to call ratio .46 with equity pcr .33 and index pcr 1.64- a very bearish reading.

 
 
  Jonathan Levinson   6/13/200,  10:06:16 AM
test

 
 
  Linda Piazza   6/13/200,  10:00:27 AM
Earliest volume patterns show a slight lead in advancers over decliners, but up and down volume equal. Volume is too light as yet to draw many conclusions from this information, however, and early volume patterns are often distorted as the first orders are conducted.

 
 
  Jonathan Levinson   6/13/200,  9:59:48 AM
Al Green just drained 5B with a 1.5B weekend repo to refund the 6.5B expiring.

 
 
  Jeff Bailey   6/13/200,  9:59:22 AM
Forest Labs (FRX) $58.59 +3.5% ... getting upside alert here as stock surging to 52-week high.Link

 
 
  Linda Piazza   6/13/200,  9:57:51 AM
That last OEX five-minute candle certainly was larger-than-normal, and now gives us a benchmark to watch during early trading. The 50% retracement of that larger-than-normal five-minute candle occurs at 502.80, already a known important level to watch. That brings in more confirmation of its importance. As I understand it, the theory behind these larger-than-normal candles is that they represent a change in sentiment. We all are familiar with the typical 50% retracement from Fibonacci retracement levels, too, so although the candle theory sounds a bit like hocus pocus, finding that midline support is simply finding the retracement point at which the bearish or bullish sentiment that produced that candle has been overcome.

 
 
  Jonathan Levinson   6/13/200,  9:57:26 AM
TRIN.NQ up to 1.25, TICK.NQ down to -109, QQV +.57 to 29.19.

 
 
  Jonathan Levinson   6/13/200,  9:52:52 AM
9:51am 1 KILLED AS FRENCH TANKER EXPLODES OFF SOUTHWEST FRANCE

 
 
  Jonathan Levinson   6/13/200,  9:52:24 AM
Bonds going nuts, with FVX -4.7 bps, TNX -6.1 bps to 3.107% and TYX -3.6 bps. We're watching history being made here.

 
 
  Jeff Bailey   6/13/200,  9:51:13 AM
University of Michigan Sentiment came in at 87.2 in June, compared to May's 92.1. Rather big surprise to the downside in this number. Economists' forecast was 93.1

 
 
  Jonathan Levinson   6/13/200,  9:50:24 AM
9:47 US June UMich consumer sentiment falls to 87.2 vs. 92.1

 
 
  Jeff Bailey   6/13/200,  9:48:17 AM
Sell Program Premium Alert SPX= 998, OEX= 502.88, INDU= 9,183, NDX= 1,225.80, QQQ=$30.48

 
 
  Jonathan Levinson   6/13/200,  9:47:20 AM
Must have been a bad con con number.

 
 
  Jonathan Levinson   6/13/200,  9:44:43 AM
The International Energy Agency (IEA), has made an unprecedented 79-million-barrel upwards revision to its oil inventory data for the industrialized world in March.

 
 
  Linda Piazza   6/13/200,  9:44:31 AM
That first five-minute OEX candle was not a larger-than-normal candle, and so its midrange value might not provide much information. I would watch its highs and lows, however, with those being a high of 504.21 and a low of 503.26, currently being tested. Note that 507 is the next (slight) resistance shown on the weekly chart, but that 518-520 is slightly stronger resistance.

 
 
  Jonathan Levinson   6/13/200,  9:38:42 AM
ORCL has been upgraded by AGed Wards.

TRIN.NQ is above 1 now, 1.06, at the light sell side of neutral.

 
 
  Jonathan Levinson   6/13/200,  9:35:49 AM
The market feels very quiet.

 
 
  Jeff Bailey   6/13/200,  9:35:19 AM
General Motors (GM) $36.30 -2.2% ... Moody's downgrades debt.

PnF looks short/put stop $38 with bearish count of $18 (column of O from $40-$30) still in play.Link

 
 
  Jonathan Levinson   6/13/200,  9:33:09 AM
TRIN.NQ is .71, TICK.NQ +372, QQV +.23, QQQ +.04.

 
 
  Jeff Bailey   6/13/200,  9:31:26 AM
Yesterday's sector bullish % moves... Gaming sector jumped 6.3% to 70% (those trading IGT from $90-$100, keep this higher level of risk in mind should IGT hit psychological $100 target). Leisure rose 4.2% and Steel/Iron gained 6.5%, both rising to 60% bullish and still decent field position considering many other sectors above 70%.

 
 
  Jonathan Levinson   6/13/200,  9:29:02 AM
I'm guessing that the PPI data is being seen as deflationary, which reinforces the idea that Al Green will cut one at the June 24th-25th meeting, which is leading to buying in treasuries.

 
 
  Jeff Bailey   6/13/200,  9:16:55 AM
09:00 Update posted at this Link

 
 
  Jonathan Levinson   6/13/200,  9:07:08 AM
WOW! TNX is now down 4.5 bps to 3.123%. We must be getting to or passing a 50 year low here.

 
 
  Jonathan Levinson   6/13/200,  8:55:30 AM
The Teflon Market is flat after the 8:30 data. Bonds are rallying to new highs, FVX -2.2 bps, TNX -3 bps and TYX -2. August gold is down .40 to 353.50.

 
 
  Jonathan Levinson   6/13/200,  8:38:03 AM
A sharp drop in oil prices pushed the U.S. trade deficit slightly lower in April, but it still was the third highest on record at $42.0 billion.

 
 
  Jonathan Levinson   6/13/200,  8:36:21 AM
The Trade Gap Narrows Slightly- Link

 
 
  Jonathan Levinson   6/13/200,  8:31:31 AM
8:30am US APRIL IMPORTED OIL PRICE FALLS $4.25 TO $26.02

 
 
  Jonathan Levinson   6/13/200,  8:31:09 AM
8:30am U.S. MAY PPI -0.3%, CORE RATE +0.1% MATCHING FORECAST

 
 
  Jonathan Levinson   6/13/200,  8:30:50 AM
8:30am FINISHED ENERGY GOODS PRICES -2.6%; FOOD +0.1

 
 
  Jonathan Levinson   6/13/200,  7:34:58 AM
The US Dollar Index is at 92.87, showing no strength so close to the lows. August gold is up 50 cents to 354.40. NQU3 futures down 3 at 1233, ESU3 -2 at 997.50, QQQ down 10 cents to 30.55.

 
 
  Jonathan Levinson   6/13/200,  7:23:44 AM
I have a goodly portion of my rrsp in a cdn bond index fund. Seemed a good place to park it and this has proven true with a 10% return this year. What's your views with risk/reward in Canadian Bonds now? Seems to me, with interest rates at lows, there's more risk, and it may be time to exit.

One would think, except that with the 2 hikes earlier this year and the Bank of Canada's governor's admission mentioned in last night's Market Wrap, I'm thinking that rates could be lowered this year- which is why I took my position in a bond fund earlier this year. I could well be wrong, but for the moment, I'm holding my bond fund.

 
 
  Linda Piazza   6/13/200,  6:58:33 AM
Good morning. The Nikkei fell into the red in early trading Friday morning, with chip-related stock struggling, but the index managed a climb above 8950 and maintained that level through the rest of the day. In the afternoon, the Nikkei attempted yet another foray above 9000, climbing as high as 9020.89, but could not maintain that level. It closed up 62.04 points or 0.70%, at 8980.64. South Korea's Kospi gained 1.11%, and Hong Kong's Hang Seng climbed 1.22%. Singapore and Taiwan traded flat, with Singapore's Straits Times down 0.01% and Taiwan's Weighted up 0.07%.

Although chip-related stocks dragged the Nikkei briefly into negative territory, those issues gained in later trading, buoyed by a gain in semiconductor prices. Thursday, the average price of the most popular chip surged 5.5%. In addition, exporter Canon added to its gains over the last few days after affirming that strong sales of copiers and digital cameras would drive its second-half and full-year profits higher.

European stocks currently trade back and forth across the flatline as they await the release of U.S. economic numbers. Talk on CNBC Europe this morning centered on the Michigan sentiment number and the PPI. Financials fell in early trading, with German banks giving back some of their recent gains. French consumer electronics maker Thomson warned of deterioration in the U.S. business environment for TV manufacturing and said its U.S. divisions were not profitable, souring optimism for a U.S. recovery. The company plans to close two of its four production lines in Marion, Indiana and will not go further in its plan to reopen a glass line at a Circleville plant. It will release half its Marion workforce. The company warned that it would see lower operating profit and full-year operating margin.

May European new car sales slumped 5.2% from the year-ago period, with Germany's car sales beating the trend and showing a 6.9% increase. SAP benefited from Oracle's results and some also conjecture that Oracle's attempted takeover of PeopleSoft will benefit SAP. As of this writing, the FTSE 100 was up 7.30 points or 0.18%, at 4168.60; the CAC 40 was down 4.07 points or 0.13%, at 3148.09; and the DAX was up 0.35 points or 0.01%, at 3219.82.

 
 
  Jeff Bailey   6/13/200,  4:58:30 AM
The Index Trader Wrap has been posted: Link

 
 
  Jonathan Levinson   6/13/200,  4:58:22 AM
The Futures Trader Wrap has been posted: Link

 
 
  Kent Barton   6/13/200,  4:57:51 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

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