Option Investor
Printer friendly version
  Linda Piazza   6/24/200,  3:57:18 PM
The lopsided five-minute OEX H&S formation, comparable to the one Jane and Jonathan are mentioning on the ES contract, has also been resisting a confirmation of its neckline. Unfortunately, even if it did, with OEX spreads being what they are, an option player can't benefit from a two-point downside target. Two downside points would still keep the OEX within its recent congestion band, too, so wouldn't even give us much information.

  Jeff Bailey   6/24/200,  3:55:36 PM
Maxim Integrated (MXIM) $34.04 -2.82% ... "semiconductor" stock noted as weak ahead of option expiration. Stock now threatens to close below its longer-term 200-day SMA. Good looking put/short in the semiconductor group!

  Jonathan Levinson   6/24/200,  3:49:26 PM
Thanks, Keith:

FYI- Hearing big put buyers in QQQ Aug 28... 128,000 contracts accumulated

  Linda Piazza   6/24/200,  3:47:47 PM
The OEX breaks through that trendline and heads back toward the congestion zone. I had my finger on the trigger so many times today, but just couldn't bring myself to enter a trade either direction, mostly because I was too hesitant to do it ahead of tomorrow's FOMC decision but also because of this chop. When oscillators show mixed messages as they did much of today, the trading pattern is often choppy. When sentiment is guiding trading behavior as much as it might be today, the trading pattern is often choppy, too.

  Linda Piazza   6/24/200,  3:43:32 PM
The OEX comes back down to test the ascending trendline I showed in my 15:17 post. On that posted chart, I asked whether the OEX could make any headway, and apparently the answer is, no. At least not today. Either direction. We'll see what tomorrow sets up for us.

  Jonathan Levinson   6/24/200,  3:35:21 PM
The put to call ratio is up to .86 on a sudden spike for this half hour. It could be that someone big and liquid just read my last post in the futures monitor (big grin).

  Linda Piazza   6/24/200,  3:17:32 PM
Here's the ascending five-minute trendline I mentioned in my last post. I still remain unconvinced of direction. Link

  Jonathan Levinson   6/24/200,  3:00:51 PM
Treasuries are about to close, again at their highs of the day, with FVX -5.1 bps, TNX -5 and TYX -5 bps. Not a typo. The strongest buying today looks to have been in the long bond, which would normally rise less than its shorter term peers.

  Jeff Bailey   6/24/200,  2:59:58 PM
Nortel (NYSE:NT) $2.85 +1.06% ... bearish day trader list for tomorrow. Stock hovering right at its 50-day SMA Link may begin to look "technically expensive" as Lucent (NYSE:LU) $1.86 -3.10% extends yesterday's losses after breaking below its 50-day SMA early in the session. Link

  Linda Piazza   6/24/200,  2:52:15 PM
I show the OEX resting on the newest five-minute trendline drawn from yesterday's lows through today's dips.

  Linda Piazza   6/24/200,  2:50:33 PM
For reference, the FTSE 100 closed down 27 points or 0.66%, at 4060.90 and just off its low of the day. The CAC 40 closed down 15.90 points or 0.51%, at 3103.34, clinging to the 3100 level. This was near the middle of its day's range. The DAX trades longer than the other markets, however, and seemed to catch a tailwind as our markets moved up from the day's lows. The DAX closed up 30.95 points or 0.97%, at 3214.34.

  Jonathan Levinson   6/24/200,  2:45:39 PM
No bounces so far in August gold, down 7 at 346.40, low of the day at 346.10. HUI is down 1.23, XAU -1.48.

  Jeff Bailey   6/24/200,  2:37:53 PM
QQQ $29.84 -0.26% .... comes back for another test of WEEKLY S1 at $29.79. Q's have been "sloppy" at WEEKLY S1 today, but traded "like a champ" from MONTHLY 38.2% $29.58 and WEEKLY 80.9% $29.74 zone of support. This zone served support on June 9th pullback too. Upward trend from the March lows also in play as support here.

Everything seems to be coming to a head for tomorrow's FOMC data.

Bounce or trounce?

I'd be more inclined to play the "bounce" in an OEX long and a "trounce" lower in the QQQ.

  Linda Piazza   6/24/200,  2:35:30 PM
After reaching that new high of the day, the OEX pulled back. On the five-minute chart, this shows a formation that could be a bull flag--a tight range of lower lows and lower highs. Wait for an upside breakout before concluding that's what it is, but be alerted to the possibility. Note that the OEX advance was halted at the top of a gap seen on the five-minute chart. That gap was formed yesterday at 10 ET as the OEX gapped from 498.95 down to 498.39.

  Linda Piazza   6/24/200,  2:29:00 PM
Here's a chart I first posted a couple of weeks ago. Link As I mentioned earlier this week or late last week, I was wrong about the point from which the OEX would turn down, but the ideas were right. Since some time has elapsed, too, an OEX move down to 489-490 would slightly violate the ascending channel. Over the last couple of days, the OEX has been steadying at its 21-dma. I enlarged the part of the indicator bars showing RSI so that you could see that the RSI attempts to bounce from its trendline of higher lows. I've been watching for that trendline to be violated as a sign of increasing weakness. So far, that hasn't happened, but the current bounce is tentative as yet. I can see the OEX trading up toward that midline again, currently between 504-505, or falling down toward 489-490. With the FOMC meeting concluding tomorrow, sentiment may direct the action more than anything seen on this chart, however.

  Jonathan Levinson   6/24/200,  2:28:26 PM
It feels like the sellers are coming back, with the 5 hour oscillators on ES finally back on bearish crosses.

  Jeff Bailey   6/24/200,  2:26:39 PM
Randgold (GOLD) $17.20 -4.4% .... this was "the stock" that generated the most recent sell singal on PnF chart at $16.50, which turned Dorsey/Wright's precious metals sector bullish % (BPPREC) back lower to "bear confirmed." Sector traders may want to continue monitoring this one going forward. Recent rebound came right back to $18.50, but not enough demand to outstrip supply at $18.99. Stock and sector could be in trouble on this one if GOLD trades $15.50, generates spread-triple bottom and breaks bullish support trend. Link

Here too a sector that may be very sensitive to tomorrow's FOMC announcement. With "bear confirmed" status at this point, bullish caution looks to be advised.

  Jonathan Levinson   6/24/200,  2:21:53 PM
The lower ascending trendline on the ES bear wedge is now at 984, upper trendline 986. That would be the range for longs (above) and shorts (below). It's awfully choppy in the middle, and with the stoch rolling over here and about to cross, my thoughts are more bearish than bullish.

  Jonathan Levinson   6/24/200,  2:12:19 PM
Put to call ratio down to .71, equity pcr .61 and index pcr 1.14.

  Jeff Bailey   6/24/200,  2:11:41 PM
QQQ $29.91 (unch) .... unlike the OEX, which did trade new intra-day high, QQQ does find selling below its morning high of $30.13, right at the 200-pd SMA on 5-minute chart.

OEX bull would certainly like to see QQQ get above the $30.00 mark and "have the tail" pull free to allow further OEX upside into the 500-502 area by the close. Build a little room into tomorrow's FOMC meeting.

  Linda Piazza   6/24/200,  2:09:51 PM
Volume patterns are too evenly matched to be much help this afternoon. They could still go either direction.

  Jonathan Levinson   6/24/200,  2:09:36 PM
August gold has been beaten with an ugly stick, down 7.20 here at 346.20. HUI is down 1.13, less than I'd have expected, XAU -1.39.

  Jonathan Levinson   6/24/200,  2:06:43 PM
The spike above the trendline is blowing off here, and we might have just seen the blowoff I was looking for to top out the oscillators. The 26-3-18 stoch is now showing signs of an imminent cross, but the price needs to let go of the upper trendline on the 6 minute bear wedge we've been following.

  Jeff Bailey   6/24/200,  2:05:25 PM
02:00 internals ....

NYSE 5,563.50 +0.25% .... Vol. 854m A/D 16:15 NH/NL 56:7

NASDAQ 1,620 +0.56% ..... Vol. 1.05b A/D 15:15 NH/NL 66:7

A/D improving from earlier, while NH gains seen in both NYSE/NASDAQ and NL steady at the bottom.

  Linda Piazza   6/24/200,  2:04:15 PM
Here's what I'm watching on the OEX 60-minute chart: Link

  Jonathan Levinson   6/24/200,  2:03:36 PM
ES has broken above the upper trendline, as the oscillators continue to grow toppier but with no sign of rollover. The market feels quite strong here. If it is a breakout, 991 should be the next target.

  Jeff Bailey   6/24/200,  2:02:48 PM
S&P 100 Index (OEX.X) 498.71 +0.59% ... had set alert at 498.50, which was just above this morning's highs. Bulls from 497.00 profile looking better here.

  Jeff Bailey   6/24/200,  2:01:04 PM
Altria (MO) $44.98 +2.57% ... today's trade at $45 (session high $45.04) enough to generate "spread-triple top" buy signal. Link

Still like this one for "dividend seeking bull"

Dorsey/Wright has stock classified as food/beverage/soap and sector bullish % (BPFOOD) still "bull confirmed" at 62.25%, just off bull cycle high reading of 64%.

Despite today's gains, annual dividend YIELD is roughly 5.69%.

  Linda Piazza   6/24/200,  1:56:34 PM
For reference, this morning's OEX high was 498.32.

  Jonathan Levinson   6/24/200,  1:55:48 PM
Still no rollover on the oscillators. It'll take a break of the lower trendline to do that, below 983 ES. Currently at 984.75, ES is right at the upper ascending trendline.

  Jonathan Levinson   6/24/200,  1:53:38 PM
Here's our blast higher, but it's strong so far. If you're aggressive, A short at 984.75 with a stop just overhead at 986. Again, this one's high risk, and I'm still watching.

  Linda Piazza   6/24/200,  1:50:20 PM
Today, the 1:45 ET push appears to be to the upside, toward the day's high. Remember that this is a test of resistance, and not a prediction of the outcome. Let's see what happens.

  Jonathan Levinson   6/24/200,  1:48:43 PM
I'm looking for one more blast up to take out oscillator upphase. However, if ES breaks 985, I'll step aside- no need to short an upside breakout.

  Jonathan Levinson   6/24/200,  1:45:54 PM
ES looks like a short if it can print below 982.50. Given the upslope we have on this formation, a bounce at 982 is likely, but the oscillator upphase is almost done. The bear wedge projects to the 977 level if it plays out fully.

  Jonathan Levinson   6/24/200,  1:42:06 PM
ES is getting toppy on the oscillators and getting pinned above the ascendline lower trendline on the bear wedge and the upper 984 fib resistance. Upper trendline is now up to 985 ES for upper trend resistance if the fib level fails.

  Linda Piazza   6/24/200,  1:36:34 PM
Today's OEX move is beginning to have a bullish cup-and-handle look to it, but confirmation would require a move over today's high. Lots of potential formations have set up today as the OEX chopped back and forth, however, without confirmation ever coming. The thirty-minute oscillators are now in full bullish mode, but the RSI keeps showing a tendency to flatten out again. That's not particularly reassuring to bullish players.

  Jeff Bailey   6/24/200,  1:28:10 PM
01:00 Update posted at this Link

  Jonathan Levinson   6/24/200,  1:28:08 PM
ES tried to break down out of the ascending wedge but just climbed back above the lower trendline, with an upside target of 984.25 on this run. The oscillators are getting toppy but they're not there yet.

  Linda Piazza   6/24/200,  1:13:37 PM
I've been whittling down my already small positions this morning ahead of tomorrow's FOMC decision. I took advantage of a more than $1.00 (more than 17%) climb in CCK this morning to unwind a bullish position ahead of that meeting, and I'm not anxious to jump into the chop this afternoon with any index plays unless I see a stronger setup--either up or down--than I've seen so far. I have only one position left--a covered call on OSUR--against which I've been selling calls long enough to have substantially lowered my basis. If I'm selling into strength today, I'm wondering if that's what bigger players than I am will be doing, too.

  Jonathan Levinson   6/24/200,  1:08:36 PM
The put to call ratio is .74, equity pcr .66 and index pcr 1.03. ES is still within the ascending wedge, butting up against fib resistance at 984.

  Jonathan Levinson   6/24/200,  12:58:53 PM
It looks like a bearish ascending wedge on the ES 6 minute candles, with the short cycle oscillators on buy signals. The upper trendline is gettng pressed above 983.25, lower trendline now at 982.

  Linda Piazza   6/24/200,  12:51:30 PM
The OEX cleared the 497 hurdle. I agree with Jeff that 497 is a significant number, but would now like to see a move over the current day's high at 498.32 as further confirmation of bullishness. Volume patterns have shown a trajectory upward, although decliners still slightly outnumber advancers and down volume is still slightly ahead of up volume.

  Jonathan Levinson   6/24/200,  12:30:00 PM
Beaucoup buying in bonds, with FVX now down 4.1 bps, TNX -3.2 bps and TYX -2.9 bps. Gold still getting nailed though, down 5.8 at 347.60 on the August contract. HUI -1.46 and XAU -1.42. I'm in a quandary, because my CDN dollar precious metals investments, my mining funds, would be in sell territory here on a US chart, but the Cdn dollar is due for a good dunking once our Bank of Canada gets off its megadose of silly pills and lowers rates back to where they belong. Holding but confused for the moment.

  Linda Piazza   6/24/200,  12:29:34 PM
This push up is finally turning all the OEX 30-minute indicators the same direction--up. The 60minute indicators also attempt a move up, although CCI is still red and the 5(3)3 stochastics haven't redrawn their bearish kiss just yet.

  Jeff Bailey   6/24/200,  12:26:46 PM
S&P 100 (OEX.X) 496.47 +0.14% .... trying to break above "post consumer confidence" intra-day resistance of 496.25 here.

S&P Banks Index (BIX.X) 301.42 -0.26% still fractions lower, but 300.00 looks to have held so far today with low of 300.50.

  Jonathan Levinson   6/24/200,  12:20:53 PM
ES is hugging the upper descending trendline of a very small pennant on the ES 6 minute bars.

I can't believe that I dreamed about Al Green last night. He was in a classroom, and I was one of the students. Ron Paul was haranguing him, calling his failure to fight the Kondratieff Winter "catastrophic" and asking if Al Green would propose to impose carry taxes on cash savings, or perhaps a new form of US currency with an expiration date, after which it would become worthless in the holder's hands. In all seriousness though, it is tragic that the stimulation efforts of the fed have made it such that the nation's savers and prudent investors can no longer buy t-bills or money market funds and expect to even keep pace with inflation. We must all place our money at risk just to stay flat.

  Linda Piazza   6/24/200,  12:10:45 PM
It's all in the eye of the beholder: Link

  Jeff Bailey   6/24/200,  12:08:02 PM
12:00 Internals ...

NYSE 5,540.76 -0.15% .... Vol. 564m A/D 14:16 NH/NL 38:7

NASDAQ 1,602.63 -0.5% .... Vol. 722m A/D 13:15 NH/NL 47:7

A/D line has been gaining at both ends so far.

NYSE has had more positive trend for NH/NL, while NASDAQ NH/NL rather unchanged in last hour.

  Jonathan Levinson   6/24/200,  12:07:43 PM
Put to call ratio stabilized, up .01 to .73 for the past half hour.

  Jonathan Levinson   6/24/200,  11:55:35 AM
Buy signals coming through on the 26-3-18 stochastics and 12-26-9 MacD on the 6 minute ES. Famous last words, but it's probably just more sideways chop.

  Jonathan Levinson   6/24/200,  11:52:33 AM
Nov. 6 2002 from MSNBC

MOST FINANCIAL ANALYSTS and traders had expected only a quarter-point cut, perhaps to be followed by another quarter-point in December or early in 2003. But Fed policy-makers decided instead on a single half-point cut and signaled they do not intend to cut rates any further for fear of triggering inflationary growth.

  Jonathan Levinson   6/24/200,  11:50:05 AM
This is pretty much untradeable- a narrow, whippy range. Perfect stop-running environment. Gold is still in the dumps, down 5.50 to 347.90 on the August contract, HUI -2.24 and XAU -1.55.

  Linda Piazza   6/24/200,  11:49:56 AM
The H&S formation on the OEX five-minute chart hasn't been ruled out yet. As Jonathan said earlier with respect to the ES contract, H&S formations usually form at market tops. However, they can be continuation patterns. I've been studying a possible neckline for that five-minute H&S formation. At first, I'd drawn a slanting neckline, as shown in my 11:06 post, but now I'm wondering about a straight neckline at about 494.75. The trouble with that neckline is that a confirming move through that level would not yet have breached either today's or yesterday's lows. The trouble with waiting for a breach of yesterday's low before entering a put position is nearby support: 492, 490, 488. With an OEX July 500 put currently showing a 12.60 x 13.50 spread, for example, traders would need a pretty big move just to break even. I'm not sure the time is right for a call play, either, with the OEX still mired in that congestion.

  Jeff Bailey   6/24/200,  11:47:08 AM
Home builders had been early sector gainers. However, this morning's consumer confidence survey showed that 3% of those surveyed said they plan to buy a home during the next 6 months, but this was down from 3.8% in May.

Might be seeing some consumer confidence toward owning a new home based on the prospects of getting a job, and with job market still rather weak, pushing out their new home buying until a job is found?

  Jonathan Levinson   6/24/200,  11:44:20 AM
The put to call ratio is down to .72 for the past half hour, dropping like a stone off its intraday high above 1.0.

  Jeff Bailey   6/24/200,  11:42:56 AM
Dow Jones Home Construction (DJUSHB) 440.54 -1% ... getting downside alert here from conventional retracement I had set at 19.1% (October lows to recent highs).

Centex (CTX) $79.79 -0.32% Link and Ryland (RYL) $68.65 -1.39% Link are two stocks mentioned as partial bearish positions last week.

  Jonathan Levinson   6/24/200,  11:36:51 AM
The right shoulder of that ES 6 minute head and shoulders pattern never made it down through the neckline, and is now chopping along at the peak of the shoulder. A move higher, above 982 on a 6 minute closing basis, will invalidate the pattern, and the neckline is now at 978.75ish.

  Jeff Bailey   6/24/200,  11:34:42 AM
QQQ $29.64 -0.93% .... This morning's lows have been testing upward trend taken from the March 12 low of $23.54 and attached to the April 10 pullback of $25.30. On May 20 and 21, QQQ did violate trend on intra-day basis, but never closed below this trend and eventually set new highs. At this point, would view a close much below today's lows of $29.53 as more significant technical weakness.

This too should tie in pretty good with our unconventional $0.35 box size and "finite" level of $29.40 for bullish trader/investor stopping point. Here's the $0.35 box size chart Link

  Linda Piazza   6/24/200,  11:30:33 AM
The OEX is now back above the 21-dma, currently at 495, and attempt a move out of the congestion zone. The 30-minute RSI has cupped back up again, although other 30-minute indicators remain mixed. This still looks like a possible bounce zone, just as it did yesterday when the OEX was trading here, but decliners continue to gain strength over advancers, and down volume outpaces up volume, not bullish signs. Right now, I'm just glad I didn't enter a position early this morning, only to endure the chop.

  Jeff Bailey   6/24/200,  11:25:19 AM
11:00 Update posted at this Link

  Jonathan Levinson   6/24/200,  11:09:51 AM
It could be a small head and shoulders in the process of completing with a neckline at 978. I'm uncertain, because head and shoulders patterns belong at the top of a move, and not within a choppy range, but that's how it looks. It projects to 970 ES.

  Jonathan Levinson   6/24/200,  11:07:36 AM
The put to call ratio has dropped down to .85. That's a big downward spike- could be indicating that the high opening readings were a large position being put on by a single or small number of large traders.

  Linda Piazza   6/24/200,  11:06:23 AM
I talked yesterday and today about a possible H&S formation setting up on the OEX hourly and 30-minute charts, with only the left shoulder and head visible. There's another and obviously smaller possible H&S setting up on the five-minute chart, however, with the right shoulder perhaps now forming. The neckline slants, and it appears that it would be crossed with a fall through 494. Link

  Jonathan Levinson   6/24/200,  10:53:56 AM
FV is now down 1.8 bps, TNX -.3 and TYX +.3 bps. The TRIN.NQ is at 2.32, TICK.NQ -463, and I'm actually expecting a bounce, which goes to show how much mental damage the rally has inflicted on me. In a former life, the TRIN.NQ at 2.32 would have looked like the sellers are just starting to awaken, the put to call readings would show the first signs of justified terror in the options market, ditto the QQV +.52, and the TICK.NQ would be worth cheering. Now, however, I see a selling spike occurring, and these have been reversed consistently all year on the Fed's money. The ES has advanced 2 points in the time it took me to type this.

  Linda Piazza   6/24/200,  10:52:14 AM
Volume patterns have shifted, with advancers and decliners even on the NYSE and with advancers 100 issues ahead on the Nasdaq. Down volume leads on both the NYSE and the Nasdaq. As of a few minutes ago, total volume was 310 million on the NYSE and 446 million on the Nasdaq.

  Linda Piazza   6/24/200,  10:47:23 AM
The OEX has currently retraced 70.7% of the move from yesterday's low to this morning's high, a deeper retracement than the usual 1/3 to 2/3. Conventional wisdom says that the full amount should now be retraced--a move to yesterday's low--but since that deeper retracement took the OEX right back into the congestion zone, it's still difficult to draw too many conclusions, in my opinion.

  Linda Piazza   6/24/200,  10:42:13 AM
The OEX is once again below its 21-dma, currently at 494.94.

  Jonathan Levinson   6/24/200,  10:42:07 AM
The NQ futures are down below 1200 hitting new lows of the day at 1194, TICK.NQ -454, TRIN.NQ 2.31 and QQV +.54. Little support so far, with new lows printing as I type. Next support is at 1192 NQ and 976 ES.

  Jeff Bailey   6/24/200,  10:41:22 AM
S&P Banks Index (BIX.X) 301.05 -0.39% ... session lows here. Keeping very close eye on 300 leve from pivot analysis matrix for support.

Bank of America (BAC) $77.49 -0.55% off its lows of $75.77. Evidently there was a sell order imbalance as some employee options were freed up when BAC closed above $76 for 10-consecutive sessions and employees could exercise/sell some of their holdings.

  Linda Piazza   6/24/200,  10:41:06 AM
The OEX now moves toward the bottom of the congestion zone, and the 30-minute RSI does look to have forecast this drop, too, as it hinged down.

  Jeff Bailey   6/24/200,  10:37:58 AM
Sell Program Premium Alert SPX= 981.30, OEX = 495.50, INDU= 9,090, NDX = 1,194.5, QQQ = $29.70. (Comes right at WEEKLY S1s)

  Jonathan Levinson   6/24/200,  10:34:40 AM
The put to call ratio is up to 1.02 for the 2nd half hour just ended.

  Linda Piazza   6/24/200,  10:31:29 AM
Although the OEX did fall below 496, it looks to be steadying at the top of that congestion band from yesterday.

  Jonathan Levinson   6/24/200,  10:30:45 AM
It would seem to me that the equity portion of the PCR has evolved over time. After getting burned in the past many smaller investors and money managers are likely to buy insurance than they were prior to 2001-2002. As more and more investors (though still a small percentage) are aware of options as a tool I wouldn't expect the indicator to behave as it has before.

I agree, Chris. That's the problem with any indicator, and it's particularly acute with options-based indicators because of the versatility of options for creating bullish and bearish positions. That said, I'm still inclined to fade a sudden spike in the equity pcr. Going further though, I believe that there will come a day when the pcr will spike through the roof and the equity indices will spike through the floor- the MOPO, if you will. For all these reasons, I watch the pcr closely, but it's very, very that it will trigger a trade for me one way or the other.

  Linda Piazza   6/24/200,  10:28:58 AM
Earliest volume patterns are mostly positive, although down volume is a little ahead of up volume on the Nasdaq. This gives a somewhat positive bias to the day, although it's tentative as yet and may still be skewed the reaction to the Consumer Confidence number. New highs are down drastically from recent numbers, however, with only 63 new highs on both the NYSE and Nasdaq combined. That doesn't bode well for the intermediate term.

  Linda Piazza   6/24/200,  10:24:15 AM
I trust RSI more than I trust stochastics, and OEX thirty-minute RSI had been flat all morning, as I had mentioned earlier, keeping me from feeling confident of upward direction ahead of the reaction to the Consumer Confidence number. Now that the OEX trades back into the congestion zone, it's difficult to be sure of any direction. Thirty-minute RSI now hinges down, but only minimally, and other oscillators are mixed. MACD lines have made a bullish touch, 21(3)3 stochastics are turning up out of oversold, and 5(3)3 stochastics are trying to hinge over from just under levels that indicate overbought conditions. CCI is trending up. Sixty-minute indicators are somewhat mixed, too.

  Jeff Bailey   6/24/200,  10:23:53 AM
Sector Weakness SOX.X -2%, XAU.X -1.91%, NWX.X -1.29%

Sector Strength DJUSHB +1.5%, XAL.X +1.25%

  Alan Knuckman   6/24/200,  10:22:49 AM
Gold has taken out the significant support at the $351 level and is down $6. The Dollar is steady and holding its recent gains making gold purchases not as inexpensive in relative currency terms as it has been. The extremetly high number of speculative Gold longs has made this top heavy market subject to liquidation selloffs. Some traders may look at this as an opportunity for the support at the lower $340 levels to hold. As we have stated before, selling put options on extremes can be used as an entry method. The Aug $345 put is selling for $500 and lowers the basis entry price to $340 with 34 day until expiration.

  Jeff Bailey   6/24/200,  10:18:53 AM
QQQ $29.68 -0.73% ... session low here. Really got sold after headline consumer confidence number.

  Linda Piazza   6/24/200,  10:16:50 AM
The OEX moves back toward that congestion zone, but hasn't yet entered it. Bulls still want to see the OEX steady at the top of that zone, near 496. Currently, the OEX also touches an ascending line that began building on the five-minute chart at just after 3:00 ET yesterday afternoon, and appears to be steadying at that ascending line. If a bounce ensues, that would reassure bullish traders. A fall beneath that line and into the congestion zone again would not be so reassuring, leaving traders right back where they were yesterday afternoon, but with 30-minute oscillators having relieved oversold conditions already. Note: as I typed, the OEX began falling beneath that trendline.

  Jonathan Levinson   6/24/200,  10:16:47 AM
982 ES has fallen, with all of my short cycle oscillators now on sell signals.

  Jonathan Levinson   6/24/200,  10:15:15 AM
Note on the put to call ratio that the index pcr was 1.41, but the equity pcr was .88. The jump in the "smaller money" equity pcr accounted for the spike, and that's not the part of the options market that I think to follow literally- a high index put to call ratio strikes me as bearish, and a high equity pcr strikes me as bullish. It could just be a high opening number caused by a single trade, so we'll watch this secondary indicator and be alert.

  Jeff Bailey   6/24/200,  10:14:40 AM
August Gold futures (gc03q) 347.00 -1.8% ... getting downside alert I had set here. Has contract breaking below its 50-day SMA of 352. (I had set aler several days ago when 50-day SMA was at 347). Negative action here.

  Jeff Bailey   6/24/200,  10:12:23 AM
QQQ $29.84 -0.25% ... selling in the last 10-minutes here.

  Jeff Bailey   6/24/200,  10:11:18 AM
June consumer confidence came in at 83.5, which was above consensus. (Jim Brown) reported in futures monitor on release.

  Jonathan Levinson   6/24/200,  10:10:11 AM
The put to call ratio opened at .96, which is the highest I've seen in a long time. I see it as bullish for the market. There's a failure on ES just below 988, high of the day 986.75. We'll see support at 982 ES tested now. The oscillators have not yet rolled over, so it's just a shake so far.

  Linda Piazza   6/24/200,  10:07:05 AM
OEX 498 is the site of S/R from June 6, 11, and 13, so that's one reason for the hesitation here. Bulls want to see the OEX retracement stop at 497, preferably, but certainly at 496.

  Linda Piazza   6/24/200,  10:00:53 AM
So far, there's been no first retracement in the OEX, so I'm waiting until the release of the Consumer Confidence number to see if there's a retracement and how deeply it takes the OEX. Usually when there's consolidation of an upswing rather than retracement during this period, as happened today, that's a bullish signal, but I hesitate to jump in ahead of the reaction to the Consumer Confidence number. We're having that first reaction now, it appears.

  Jeff Bailey   6/24/200,  10:00:58 AM
Buy program premium alert SPX= 986.9 , OEX= 498.12, INDU= 9,136, NDX = 1,209, QQQ= $30.00

  Jonathan Levinson   6/24/200,  9:59:51 AM
Al Green has added 3.75B via 2 day repo, which is a net addition against no expiries today.

  Jonathan Levinson   6/24/200,  9:56:17 AM
Gold is getting creamed, down 5.10 at 348.30, with HUI down 2.09 and XAU down .97.

  Jonathan Levinson   6/24/200,  9:55:25 AM
ES is struggling between the 38.2% and 50% retracements of yesterday's full range, between 982 and 984. Next significant resistance comes at 988.

  Jeff Bailey   6/24/200,  9:55:27 AM
OEX 497.18 +0.28% ..... will go long the OEX on move above 497 per last night's Index Trader Wrap. Don't have the consumer confidence numbers at this point.

BIX.X 302.58 +0.11%

  Jeff Bailey   6/24/200,  9:53:15 AM
PMC-Sierra (PMCS) $11.73 -3.13% ... Piper Jaffray downgrades to "underperform" from "market perform" due to weak service provider spending in Asia and the seasonal summer slowdown. Firm things stock vulnerable to correcting the excesses of the Feb-June runup. Price target is $5.00. Link

  Jeff Bailey   6/24/200,  9:50:06 AM
QQQ $29.98 +0.2% ... showing some early morning "tech leadership" that OEX bull from last night's index trader wrap wanted to see for bullish trade setup.

  Jonathan Levinson   6/24/200,  9:48:36 AM
If we had a stop of the day award, Jim would have won it with that excellent exit 2 points ago.

  Jeff Bailey   6/24/200,  9:48:18 AM
S&P 100 (OEX.X) session high has been 496.99, which is penny shy of bull's action point of 497.00. A bull would just as soon have OEX sit here and wait for June consumer confidence at 10:00 AM EST (13 minutes away). Then, if market response is favorable, let OEX trade 497.00 and go long.

  Linda Piazza   6/24/200,  9:46:47 AM
The release of the Consumer Confidence number comes right in the middle of the usual first retracement of the day. Bulls will want to see that retracement stop short of the congestion zone from yesterday, if possible, but certainly short of yesterday's low. Bears want to see the OEX driven below the congestion zone and then yesterday's low.

  Linda Piazza   6/24/200,  9:44:11 AM
Yesterday morning I mentioned one reason for my wariness in entering short positions: the left-shoulder-and-head appearance of the OEX movement on the 30-minute and hourly charts. I wondered if the OEX would then pop up to form a right shoulder. Although it's far from forming that right shoulder yet, it does appear to have hit the neckline and bounced back up. The left shoulder topped out just over 504, so if the OEX continues rising, we might watch that level.

  Jonathan Levinson   6/24/200,  9:39:56 AM
Next resistance is in the 982 ES area. The oscillators are turning back up on this opening bounce.

  Linda Piazza   6/24/200,  9:39:02 AM
The first five-minute OEX candle spanned a normal, run-of-the-mill range, and so won't give us many benchmarks to watch. The OEX also opened within that congestion band I mentioned, with that band spanning roughly from 494.50 to 496. An upside break is being attempted and that may give us more information as we watch what happens. Thirty-minute and sixty-minute charts show some incipient bullishness, although RSI has flattened on both, giving mixed signals.

  Jonathan Levinson   6/24/200,  9:37:10 AM
NQ is back to 1200, QQQ to 29.80, but need to break above these levels to deter the wall of sellers in this area. TRINQ is up to 1.25, TICK.NQ -255, QQV +.59 at a measly 28.1. FVX is down 1.1, TNX flat and TYX up 1.4 bps.

  Jonathan Levinson   6/24/200,  9:36:17 AM
NQ is back to 1200, QQQ to 29.80, but need to break above these levels to deter the wall of sellers in this area. TRINQ is up to 1.25, TICK.NQ -255, QQV +.59 at a measly 28.1. FVX is down 1.1, TNX flat and TYX up 1.4 bps.

  Jeff Bailey   6/24/200,  9:34:34 AM
Bank of America (BAC) $78.00 .... indicated lower at $76.60, which would be -1.79% decline. No news to explain this morning's lower indication. Link

Component of both the BIX.X and BKX.X

  Linda Piazza   6/24/200,  9:33:00 AM
The OEX opens inside the congestion band that contained its prices most of yesterday. We don't have many clues yet from that action.

  Jeff Bailey   6/24/200,  9:27:23 AM
Advanced Micro Devices $6.59 .... hit lower at $5.80 after cutting Q2 views to $615 million, down from previous guidance of $715 million. Company said "The anticipated global sales improvement in the month of June did not materialize as we had anticipated." Link

QQQ $29.70 ... down 21 cents from yesterday's close on this warning.

  Jeff Bailey   6/24/200,  9:18:11 AM
09:00 Update posted at this Link

  Jonathan Levinson   6/24/200,  9:06:17 AM
93.90 has held as support on several tests last night for the US Dollar Index, currently at 94.11.

  Jonathan Levinson   6/24/200,  9:01:22 AM
Tricky spot- it's tempting to go long here so close to the upper channel breakout line, except that the short cycle oscillators are very toppy. It's tempting to go short with the oscillators topped out, except that we're above the channel line, which has been solid support for most of the night.

  Jonathan Levinson   6/24/200,  8:54:20 AM
There's a battle going on in the futures, with buyers struggling to keep ES and NQ from slipping back into yesterday's channel below 980 and 1200 ES and NQ.

  Jonathan Levinson   6/24/200,  8:52:50 AM
"Like it or not, we're in uncharted waters, both in diagnosing the world's problems as well as in prescribing the remedies. Today's dysfunctional global economy is replete with massive external imbalances and heightened deflationary risks. Traditional policy options have all but been exhausted. The Authorities are now being forced to improvise. Notwithstanding newfound optimism in world equity markets, there are no guarantees of policy traction in this post-bubble era. I never dreamt that I would live to see such profound challenges to core macro principles. " - Stephen Roach, Morgan Stanley

  Jonathan Levinson   6/24/200,  8:45:17 AM
I dreamt of Al Green being harangued by Ron Paul, of theoretical carry-taxes on savings, and woke up for the kickoff of day 1 of the scheduled Fed meeting. Futures are mixed, ES +1 and NQ -1, at 982 and 1204, QQQ 29.87. FVX +1.6 bps, TNX +2.3 and TYX +2.6. August gold is up 2.10 to 355.50.

  Linda Piazza   6/24/200,  7:29:20 AM
Good morning. The Nikkei opened down in Tuesday's trading and soon tumbled beneath 9000. After the midday break, the index continued its downward slope, closing only a few points off the low of the day, down 217.88 points or 2.38%, at 8919.26. Despite the downdraft on the Nikkei, Seiko Epson's IPO performed strongly, with the printer and electronics maker's stock gaining 40% from its IPO price. Exporters led the Nikkei down.

In South Korea, Hyundai Motor Company had traded down this week on fears that its labor union would strike, and today was joined by a partner in misery as labor unions said they would strike both Hyundai and Ssangyong Motor Companies. A strike affected South Korea's Chohung Bank, too, as depositors withdrew $5 billion during the five-day strike last week. The central bank had to provide emergency funds to the bank, depleted of one ninth of its deposits. This week, Chohung promised higher rates to customers, and almost a third of the money was returned. The workers had been protesting the sale of Chohung to Shinhan Financial Group. To get the workers back, Shinhan agreed to raises and said Chohung would be kept separate for three years.

Although China closed flat, most other Asian bourses traded down. Taiwan's Weighted fell 0.26% and South Korea's Kospi fell 1.57%. Singapore's Straits Times plunged 1.85%, and Hong Kong's Hang Seng declined 1.08%.

Most European markets currently trade down, too. Today, results of an Italian consumer confidence survey showed the number dipping in June rather than rising as expected. Although Italy is only the fourth-largest economy in Europe, its consumer confidence number is the first to be released and might be seen by some as a harbinger of things to come for other European countries. Anglo-Dutch Unilever's (UL) disappointing earnings report yesterday continues to impact European markets, too, and the U.K.'s Woolworth's added to the concerns when it said like-for-like retail sales were flat on the same period last year.

As of this writing, the FTSE 100 is down 12.30 points or 0.30%, to 4075.60. It's 20 points off its low of the day. The CAC 40 trades down 14.22 points or 0.46%, at 3105.02. It dipped briefly below 3100 this morning, but then climbed back above that level. The DAX has just edged barely into positive territory, trading up 0.44 points or 0.01%, at 3186.83. Like the FTSE, the DAX is also about 20 points off its day's low.

  Jeff Bailey   6/23/200,  9:47:19 PM
The Index Trader Wrap has been posted: Link

  Jonathan Levinson   6/23/200,  9:47:11 PM
The Futures Trader Wrap has been posted: Link

  Jim Brown   6/23/200,  9:46:37 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


Market Monitor Archives