Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Tab Gilles : 11/29/2005 12:01:04 AM

MURPHY OIL (MUR) Stopped Hit trailing 10-ema stopped @ $48.90 for a $0.90, +1.87% gain. Entered 11/16 @ $48 (12:10PM post). Link Link

OI Technical Staff : 11/28/2005 9:59:59 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The Market Monitor has been archived.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 most 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.

Jeff Bailey : 11/28/2005 8:09:44 PM

S&P Retail Index (RLX.X) ... Benchmark to last year's "Black Friday" at this Link ... Conflicting early holiday sales figures from ShopperTrak and National Retail Federation has RLX.X looking more like ShopperTrak's data.

Continuous Natural Gas ($NATGAS) Link reached a recent all-time high in October. PnF chart on $0.20 box scale at this Link

Continuous Unleaded ($GASO) Link reached a recent all-time high in early September, just after Hurricane Katrina. PnF chart on conventional $0.01 box at this Link

Jeff Bailey : 11/28/2005 5:55:52 PM

Chile's "morning-after" news (follow up) see 02:59:49 ... This news/decision by Chile's Supreme Court is thought by many to be an important event with potentially far-reaching implications on a global basis.

Demographics have roughly 90% of the country's poplution being Roman Catholic, a religion well-known for its anti-abortion stance.

Of late, Target (TGT) and Wal-Mart (WMT) executives have allowed their pharmacists to refuse to fill morning after pill prescriptions for emergency contraception if it is against the pharmacist's religious beliefs.

On August 26, 2005, the FDA delayed its decision on nonprescription sales of Plan B (aka Morning-after pill), calling for public comment Link

Just recently, the Government Accountability Office released a blistering 62-page document on the FDA's decision to not approve the Plan B pill for over-the-counter distribution, citing the decision was politically motivated.

Jeff Bailey : 11/28/2005 5:16:37 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 11/28/2005 5:09:41 PM

Closing Internals found at this Link

Jane Fox : 11/28/2005 4:12:44 PM

This was an easy day to read. Don't even think of going long.

Jeff Bailey : 11/28/2005 4:07:25 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... We were stopped out of the underlying swing trade long in the QQQQ at $41.70 ($-0.16, or -0.38%).

Jonathan Levinson : 11/28/2005 4:01:36 PM

Headlines:

SNOW: CHINA MUST TAKE MORE STEPS TO REVALUE YUAN

SNOW: CHINA FOREX MOVES TO DATE TOO SLOW TO BE SUFFICIENT

SNOW SEES PROSPECTS FOR GOOD GLOBAL GROWTH IN 2006

SNOW: U.S. SHOULD NOT TEST LIMITS OF CURRENCT ACCOUNT GAP

SNOW: U.S. IS DOING ITS PART TO REDUCE GLOBAL IMBALANCES

Jeff Bailey : 11/28/2005 4:01:11 PM

Buy Program Premium ... DIA $108.96, SPY $126.19

Jane Fox : 11/28/2005 3:56:04 PM

A CME January 410 put with at 75 delta is only 45.70 * 46.50.

Jane Fox : 11/28/2005 3:52:23 PM

A CME 440 March '06 put that will give you a 76 delta is going for 76 * 77.10. Heh let's buy a truckload full.

Jonathan Levinson : 11/28/2005 3:50:45 PM

Today's daily candle for QQQQ engulfed the previous 2 sessions' gains and almost tested Wednesday's low. It was enough to spell possible trouble for the bulls, but not enough to kick off the long-overdue daily cycle downphase: Link

Jane Fox : 11/28/2005 3:49:15 PM

CME seems to be setting up for a great short. The higher high on November 25 was met with a lower MACD but be careful with this stock it is a mover and can shake you out of a trade faster than you can say Jack Benny.

Jeff Bailey : 11/28/2005 3:44:44 PM

Barbados ... According to people close to the deal, Barbados priced $125 million of 30-year bonds through lead manager Deutsche Bank at 98.401; with coupon of 6.625%.

The 30-year Treasury Yield ($TYX.X) Link finished Monday's session with a 4.627% yield, falling 3.7 bp.

Jeff Bailey : 11/28/2005 3:35:41 PM

Dow Diamonds (DIA) 108.89 -0.40% ... off session low ($108.76) after kissing WEEKLY Pivot.

QQQQ $41.54 -0.93% ....

SOX.X 478.91 -1.17% ... after kissing its WEEKLY S1 (478.09). Session low has been .... 478.09.

Jeff Bailey : 11/28/2005 3:30:28 PM

Cumberland Resources (AMEX:CLG) $1.73 +0.58% Link ... Kinross Gold (KGC) $7.89 -1.86% Link saying it has sold its entire stake in Cumberland, selling 7.9 million shares for $1.76 per share on November 22.

Kinross Gold, a Toronto gold mining company, first reported a 4.8 million-share, or 8.8%, stake in Cumberland to the Securities and Exchange Commission in April 2004.

Kinross had steadily increased its stake since then, reporting a 7.6 million, or 14.1%, stake last month.

Jonathan Levinson : 11/28/2005 3:29:01 PM

Volume breadth is down to -2.5:1 on the NYSE, -2.4:1 on the Nasdaq.

Jane Fox : 11/28/2005 3:24:16 PM

None of the bullish divergences have played out today and this is why. Link

Jeff Bailey : 11/28/2005 3:21:05 PM

03:00 Internals found at this Link

Jonathan Levinson : 11/28/2005 3:13:32 PM

QQQQ's short cycle upphase is looking unhealthy here, with an extended wavelet bearish divergence (middle oscillator pane): Link . However, the 30 and 60 min cycles are looking extended to the downside, and are currently flattened in oversold territory. This could result in sideways chop, but either way, intraday support should continue to firm at current levels.

Jeff Bailey : 11/28/2005 3:09:21 PM

03:00 Market Watch found at this Link

Jeff Bailey : 11/28/2005 2:59:49 PM

Barr Pharma (BRL) $58.21 -1.33% Link ... DJ - Chile's top court authorizes morning-after pill sales.

Chile's Supreme Court voted on Monday to authorize sale and use of the so-called morning-after pill that helps prevent pregnancy.

The 5-0 vote upheld a decision by the Santiago Court of Appeals, which had turned down a request by a conservative group called Ages to ban the pill which it considers form of abortion. Abortion is illegal in Chile.

The Catholic Church has also strongly opposed the use of the pill, but the government firmly has ordered its distribution free to women who had been the victims of rape.

After Monday's ruling, which can't be appealed, the pill can be sold at drug stores, but a doctor's prescription is required.

Opponents insist the pill causes abortion, while backers argue that it operates as a contraceptive.

According to experts, the pill can lower the chance of pregnancy by up to 89% if taken within 72 hours of unprotected sex, but the earlier it's taken, the better it works. Because of that, supporters say, the requirement of a prescription reduces the effectiveness of its being legal.

Jonathan Levinson : 11/28/2005 2:53:40 PM

QQQQ is pinned to the 72 SMA, but still getting very poor traction on the short cycle upphase: Link

Jane Fox : 11/28/2005 2:50:18 PM

TICKS range so far today is 851 to -729 wider than Friday but not leaning bullish or bearish.

Jane Fox : 11/28/2005 2:44:25 PM

TICKS +800

Jonathan Levinson : 11/28/2005 2:38:27 PM

Volume breadth remains weak, -2.35:1 on the NYSE, -2.3:1 on the Nasdaq.

Keene Little : 11/28/2005 2:32:07 PM

Thanks Jonathan. Looks like I'll need to change my data source. I'll try a couple.

Jeff Bailey : 11/28/2005 2:41:46 PM

Unitedhealth Group (UNH) alert $58.94 -2.02% Link ... Stock is atop my list for bullish entry on pullback. Would like to see further profit taking to $57.00 for some UNH June $60 Call (UHB-FL), which are currently bid/offer $4.60 x $4.70.

Medicare Mondernization Act and Medicare Part D Link provide near-term bullish catalyst for new membership from November 15, 2005 to May 15, 2006 and sources I deem reliable have UNH seeing strong subscribership in past couple of weeks.

UNH newsroom and "Ovations" plan description at this Link

Jonathan Levinson : 11/28/2005 2:27:22 PM

Keene, you need to go to "Data sources" and select your historical backfill provider.

Jonathan Levinson : 11/28/2005 2:26:54 PM

QQQQ has yet to violate the 41.50 low, but it has yet to bounce either, just drifting sideways-up as the short cycle upphase struggles. Another small wavelet bearish divergence suggests trouble ahead if the bulls can't break 41.60 here. 72 SMA resistance is at 41.61, a break above which would turn the 30 min cycle up. Link

Jane Fox : 11/28/2005 2:26:31 PM

These two can make trading so much easier when they talk to you. Link

Keene Little : 11/28/2005 2:25:39 PM

That's pretty cool Jonathan about QT's historical charts. What's the trick to getting them? Whenever I select it it says not enough data and it doesn't seem to backfill.

Jonathan Levinson : 11/28/2005 2:17:12 PM

Quotetracker has finally added configurable historical charts to its roster, and I'm trying to get them configured in time for tonight's Market Wrap. Link Seems that I'm unable to backfill the indices, though, but I haven't given up yet.

Jeff Bailey : 11/28/2005 2:15:50 PM

02:00 Internals found at this Link

Jonathan Levinson : 11/28/2005 2:15:42 PM

Volume breadth -2.4:1 on the NYSE, -2.3:1 on the Nasdaq.

Jeff Bailey : 11/28/2005 2:06:43 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 11/28/2005 1:44:02 PM

QQQQ losing it again in the opening stages of a bullish-divergent short cycle upphase: Link If 41.50 holds, it should provide a good entry to ride the still-valid short cycle upturn, but bulls can't afford to lose the lows.

Jonathan Levinson : 11/28/2005 1:17:32 PM

30 min channel support is down to 41.47 as the short cycle indicators approach oversold territory for QQQQ. With month end approaching and the daily cycles very toppy, trending, and overdue for a downphase, I'm hoping for a bounce to provide an easy entry for a short to ride the daily cycle downphase. This morning's open would have been perfect, except that it lauched from within young 30 and 60 min cycle upphases. Light volume holiday trading resulted in weak support. Link

Jeff Bailey : 11/28/2005 1:14:30 PM

01:00 Internals found at this Link

Marc Eckelberry : 11/28/2005 1:07:05 PM

If you are still in those January 41 QQQQ puts, look to weekly S2 at 40.94 which coincides with gap open on 11/17. 40.41, weekly S1, should see a support, so pick your exits. My exit target remains that gap between 40.77 and 40.94.

Jeff Bailey : 11/28/2005 1:04:43 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 11/28/2005 1:04:28 PM

Foreign central banks took a respectable 9.95B of the 34B in 13- and 26-week bills auctioned. The 13-week bills sold for 3.9% yielding 3.994%, bid to cover 2.34. The 26 week bills sold for 4.155% yielding 4.303% and generated 2.31 bids for each awarded. IRX is currently down 1.2 bps at 3.84%.

Jane Fox : 11/28/2005 1:03:20 PM

Last week when the bears started to get some traction the rug was pulled out from underneath them. Today it is the other way around when the bulls start to get some traction the rug is pulled out from underneath them.

Jonathan Levinson : 11/28/2005 12:57:15 PM

QQQQ's 30 min channel support is at 41.49, but the oscillators have room to run lower and the short cycle is only now rolling over. Failing a bounce quickly back above 41.68, there's a good chance we'll see 41.49 keltner support edge its way lower.

Jane Fox : 11/28/2005 12:55:28 PM

VIX is not supporting this bearishness but I have found the VIX to be late these last few days so it may not mean anything but keep an eye on it. Link

Jonathan Levinson : 11/28/2005 12:51:35 PM

Awaiting the results of today's 13- and 26-week bill auctions. The Treasury is auctioning 34B in bills to refund 31.87B maturing, raising new cash (or draining from the market) 2.13B.

Jeff Bailey : 11/28/2005 12:51:13 PM

QQQQ $41.59 -0.71% ... daily interval bar chart with updated WEEKLY Pivot retracement at this Link ... Pivot Analysis note: First time in several weeks we've seen the QQQQ slip below its WEEKLY Pivot, then find some resistance on test from below.

Jonathan Levinson : 11/28/2005 12:48:01 PM

QQQQ's short cycle has rolled over. Volume breadth is very weak, -2.1:1 on the NYSE and -2.05:1 on the Nasdaq. Note that the SOX is setting new lows for the day, while the Qs are still a nickel away. Link

Jeff Bailey : 11/28/2005 12:27:24 PM

Nortel (NT) $2.96 -1.66% ... #14 most active.

Jane Fox : 11/28/2005 12:27:13 PM

As these two kept you on the long side on Friday, they should have kept you on the short side today. Link

Jeff Bailey : 11/28/2005 12:26:51 PM

10 Most Active ... QQQQ $41.67 -0.52%, INTC $26.99 +0.67%, MSFT $27.72 -0.18%, SPY $126.52 -0.47%, AAPL $69.90 +0.80%, CSCO $17.53 -0.11%, SIRI $7.01 -1.68%, LU $2.85 -1.38%, EWJ $12.54 +0.15%, PRGX $0.54 +74.19%

Jonathan Levinson : 11/28/2005 12:26:49 PM

QQQQ chart updated at this Link

Jonathan Levinson : 11/28/2005 12:24:19 PM

QQQQ - Exit Point Alert -

Out QQQQ long from 41.57 at 41.68, +.11. Bearish divergences popping up in the wavelet oscillators as the short cycle begins to stall near the top.

Jane Fox : 11/28/2005 12:21:08 PM

AD volume is now making new daily lows.

Jeff Bailey : 11/28/2005 12:20:12 PM

Disk Drive Index (DDX.X) 129.90 +2.40% Link ... Probes morning highs and bucks modest technology weakness.

DDX.X components sorted by daily Net% at this Link

Jonathan Levinson : 11/28/2005 12:11:38 PM

Need to step away for a few minutes. Updated QQQQ chart at this Link

Jeff Bailey : 11/28/2005 12:10:46 PM

12:00 Internals found at this Link

Jeff Bailey : 11/28/2005 12:02:55 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 11/28/2005 11:54:39 AM

On QQQQ, broken trendline resistance is at 41.98. Link

Jane Fox : 11/28/2005 11:52:34 AM

Your other clues were the divergences we have talked about.

Jane Fox : 11/28/2005 11:51:43 AM

From an internals point of view, the TICKS hitting +800 is your one of your first clues the bulls are gaining momemtum.

Jonathan Levinson : 11/28/2005 11:50:38 AM

Volume breadth -1.75:1 on the NYSE, -1.85:1 on the Nasdaq.

Jane Fox : 11/28/2005 11:49:52 AM

TICKs +800.

Tab Gilles : 11/28/2005 11:49:04 AM

MUR 5 minute chart Link

Jonathan Levinson : 11/28/2005 11:47:05 AM

Ten year note yields now down 2.9 bps to 4.404% Link , IRX up .5 bps at 3.857%. Lower yields, lower crude oil, and lower equities today.

Jeff Bailey : 11/28/2005 11:44:30 AM

OptionsXpress (OXPS) $23.98 +6.81% Link ... bucks intra-day trend and registeres post-IPO high.

Jeff Bailey : 11/28/2005 11:40:11 AM

Dow components ... Alcoa (AA) $$27.77 +1.60% and Coca Cola (KO) $43.21 +1.00% both showing relative strength and breaking above their 200-day SMAs.

Dow Industrials (INDU) 10,928.00 -0.03% ...

Jeff Bailey : 11/28/2005 11:36:56 AM

Newmont Mining (NEM) $47.48 +0.89% Link ... This weekend, Newmont's President Pierre Lassonde confirmed that the world's largest gold producer is considering making a rival bid for Canadian takeover target Placer Dome (PDG) $22.01 +0.27% Link

Last week, Placer Dome's board recommended to shareholders that they reject an unwelcome $9.2 billion takeover bid by Barrick Gold (ABX) $27.29 -0.10% Link , calling the offer "inadequate" and "opportunistic."

While Mr. Lassonde said the Denver-based Newmont is thinking about making a bid for Placer, he added there was "good reason" to steer clear of the deal.

"It would be fair to say that we have to at least think about it," he told Nine Network television.

Mr. Lassonde said one reason for caution was that Placer's suite of assets wasn't totally complementary to those of Newmont.

Jonathan Levinson : 11/28/2005 11:33:35 AM

QQQQ update at this Link with price chopping so far sideways within a short cycle upphase. The 30 min cycle is strying to stabilize, but it will take a break of the 72 SMA at 41.77 to turn it back up.

Tab Gilles : 11/28/2005 11:31:14 AM

Eaton Vance Limited Duration Fund (EVV) Last weeks candle long legged doju, almost a drangon fly...on a weekly chart. Link

Murphy Oil (MUR) 60 minute chart. Link

Jeff Bailey : 11/28/2005 11:27:20 AM

Pier 1 Imports (PIR) $13.48 +14.91% Link ... Percentage gainer among retailers and big board listed stocks. Last week, the troubled specialty home furnishings retailer said it secured a new $325 million secured credit line.

Jeff Bailey : 11/28/2005 11:22:21 AM

Ciber Inc. (CBR) $6.07 +1.16% Link ... Wins three-year, $3 million enterprise architecture pact with Idaho Transportation Department.

Jeff Bailey : 11/28/2005 11:13:51 AM

11:00 Internals found at this Link

Jonathan Levinson : 11/28/2005 11:13:44 AM

QQQQ - Exit Point Alert -

Long QQQQ at 41.57, raise stop to breakeven

Jeff Bailey : 11/28/2005 11:05:33 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 11/28/2005 11:01:56 AM

That's a high-risk/tight-stop entry to try to catch a bullish divergent bounce. IF the lows hold, the resulting bounce will cause a bullish divergent wavelet low. If the lows break, however, then we want to be out fo the way quickly. Link

Jonathan Levinson : 11/28/2005 11:00:54 AM

QQQQ - Entry Point Alert -

Long QQQQ at 41.57 stop 41.52

Jonathan Levinson : 11/28/2005 10:56:07 AM

Volume breadth remains weak despite the so-far sideways bounce, with declining volume leading 1.9:1 on the NYSE and 2.15:1 on the Nasdaq.

Jonathan Levinson : 11/28/2005 10:51:51 AM

Session low for crude oil at 57.425, natgas -.065 at 11.985.

Tab Gilles : 11/28/2005 10:47:09 AM

Murphy Oil (MUR) As per 11/23 12:19 AM posy...Trailing Stop 10-ema Link

Same on $NDX/UOPIX Link

Jonathan Levinson : 11/28/2005 10:45:52 AM

Once again the SOX is bouncing, this time off S1 at the lows, while QQQQ rests heavy just off the lows.

Jonathan Levinson : 11/28/2005 10:37:10 AM

Crude oil is down 1.175 to 57.525, a dime off the intraday low.

Jane Fox : 11/28/2005 10:35:04 AM

The markets are continuing to make new daily lows ignoring the positive MACD divergence and ignoring the fact that I thought a bottom was been hammered out.

Jeff Bailey : 11/28/2005 10:33:06 AM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 11/28/2005 10:32:28 AM

QQQQ now trades below all intraday and daily price channels. The SOX has whipsawed from its bounce and is also probing new lows. They ran the stops overnight and then flushed it lower, catching Wednesday's and Friday's buyers underwater. I'm not buying the lower channel breaks here, but am hoping for a bounce to short. Given the overbought daily/weekly setup, today's break could be the start of a longer decline. Link

Jane Fox : 11/28/2005 10:22:32 AM

These two are the exact opposite to Friday. Link

Jonathan Levinson : 11/28/2005 10:22:03 AM

41.68-.70 support is back in play, potentially setting up the entire pattern above it since Tuesday as a distribution top. I'm hoping it bounces to provide a short entry, as the SOX is already doing. But so far, QQQQ feels very heavy at the lows. Link

Jonathan Levinson : 11/28/2005 10:14:45 AM

Session high for ten year notes, TNX -1.3 bps to 4.418%. Link

Jane Fox : 11/28/2005 10:13:43 AM

I think the markets are trying to hammer out a bottom here but they are all still bearish and I wouldn't be trying any long positions until you see for sure a bottom has formed.

Jeff Bailey : 11/28/2005 10:12:50 AM

10:00 Internals found at this Link

Jeff Bailey : 11/28/2005 10:04:27 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 11/28/2005 10:03:28 AM

QQQQ's short cycle downphase has taken out Friday's low, while violating lower 30 and 60 min channel support. I'd be very surprised if the price just dives from here, given the short cycle oversold extreme being reached. 1st sign of trouble for bears will be a break back above 41.80. Link

Jonathan Levinson : 11/28/2005 10:01:00 AM

Headlines:

U.S. OCT. EXISTING HOME SALES FALL 2.7% TO 7.09MLN PACE

U.S. MEDIAN HOME SALES PRICE UP 16.6% Y-O-Y TO $218,000

U.S. OCT. EXISTING HOME INVENTORY UP 3.5% TO 2.87MLN

U.S. HOUSING MARKET HAS PEAKED, NAR ECONOMIST SAYS

Jeff Bailey : 11/28/2005 10:00:33 AM

Bullish swing trade stop alert ... for the QQQQ at $41.70 -0.45% from 11/23/05 entry at $41.86.

Jonathan Levinson : 11/28/2005 9:55:56 AM

The Fed announces a 5B overnight repo, a net add in that amount. Demand for the money was unchanged from Friday, with the stop out rate 3 bps below the 4% overnight target.

Jonathan Levinson : 11/28/2005 9:54:55 AM

The Fed has no repos expiring today- any amounts added will be net adds to liquidity available to the markets.

Jane Fox : 11/28/2005 9:48:04 AM

VIX makes a new daily high confirming ES's new daily low.

Jane Fox : 11/28/2005 9:47:02 AM

Both AD volume and AD line continue to make new daily lows and I would not be trying any long daytrades here.

Jonathan Levinson : 11/28/2005 9:45:14 AM

Ten year notes have reversed positive, TNX down to a .8 bp loss at 4.423%, while 13-week rates (IRX) are up 1.5 bps to 3.867%, flattening the yield curve.

Jane Fox : 11/28/2005 9:42:36 AM

Weekly update from Larry McMillan The current rally has confounded a lot of people -- mostly in the way that it has advanced rather steadily without any sort of a pullback along the way. This has made it extremely difficult for shorts and under-invested longs to "catch up" to the rally. In fact, any time that the market even hints at a decline, those groups step in to buy -- thereby quelling the decline and propelling a further rally. Only recently has the market become overbought. Even so, prices can climb substantially while the market is overbought; it merely means that the risk of a sharp, but short-lived correction is high.

The major indices continue to push forward nearly every day. Early in the rally, there was a stair-step pattern taking place, wherein the market rallied, then drifted sideways for a few days before the next rally occurred. In the last week, there hasn't been much sideways action -- just rally after rally. $SPX broke out to new multi-year highs, joining QQQQ. $DJX (the Dow) and $OEX remain as laggards, but they will likely catch up and trade at multi-year highs before this rally ends. $SPX and QQQQ have both climbed above the 3-standard deviation Bollinger Band, which is one way of saying that they have reached overbought status.

Equity-only put-call ratios remain very bullish. We continue to feel that they are the best intermediate-term indicators we have. As you can see from the charts, the ratios are dropping quite steadily, as they should during a strong bullish move like this. However, they are not near the bottom of the charts yet. When they do reach the lower regions of the chart, they could be classified as "overbought," but that would be premature at this time.

If the equity-only put-call ratios have been the strongest indicator, breadth has been the weakest. This is partly because the Bond market has struggled and there are many bond-related issues trading on the NYSE.

Furthermore, the small-cap indices have not done as well as the big-cap indices in this rally, and that has hurt breadth, too. Nevertheless, the strong rally associated with expiration last week and then carrying over into this week has been accompanied by reasonably strong breadth. Therefore both breadth has reached overbought territory for the first time in this rally. Frankly, we would have preferred to see breadth do better, but the rally seems to have been able to persist even without wide participation. If breadth now expands, that should aid the rally even further.

Finally, volatility indices ($VIX and $VXO) are trading at their lowest levels since July -- and very nearly 10-year lows. $VXO dropped below 10 recently, and $VIX is nearing that level as well. Their descent to these low levels is solid confirmation of the strength of the rally, but is also evidence that they are overbought. So, most of our indicators are now overbought. Many analysts have been claiming that the market was overbought for most of the past two weeks; they were wrong -- it has only become overbought in the last couple of days. The market can still rally while overbought -- in fact, it can rally quite strongly, just as we have seen oversold markets decline sharply -- but the chances of sharp, short-lived corrections are now considerably increased while the market is in this overbought state.

Jonathan Levinson : 11/28/2005 9:42:23 AM

I will be looking for an upside spike to short. As the 30/60 min cycles are in rising phases, the short cycle dips should prove shallow and show a tendency to flip back higher. So far, those upphases are doing nothing constructive, and below Friday's low, those cycles will whipsaw bearishly.

Jeff Bailey : 11/28/2005 9:41:55 AM

Sell Program Premium ... DIA $109.23, SPX 1,264.97, QQQQ $41.81

Jane Fox : 11/28/2005 9:40:58 AM

Both AD volume and AD line are bearish and below 0

Jonathan Levinson : 11/28/2005 9:40:26 AM

Volume breadth has reversed, now down to -1.12:1 on the NYSE, -1.1:1 on the Nasdaq. This is a hair below neutral, not showing any serious selling pressure.

Jeff Bailey : 11/28/2005 9:40:11 AM

Chicago Board of Trade (BOT) $97.65 -6.10% Link ... sharply lower after delayed open. Coverage initiated by JP Morgan at "neutral," Keefe Bruyette at "underperform," and CSFB at "underperform."

Jonathan Levinson : 11/28/2005 9:37:46 AM

The overnight stop runner has been reversed and QQQQ/NQ are back to the midpoint of Friday's range. This sets up the 30/60 min cycle upphases as corrective, if QQQQ holds below 42.

Jonathan Levinson : 11/28/2005 9:32:14 AM

Volume breadth is +1.3:1 on the NYSE, +2.2:1 on the Nasdaq at the open.

Jeff Bailey : 11/28/2005 9:31:55 AM

Yahoo! Inc. (YHOO) $41.63 -1.18% Link ... The company said its Yahoo! Shopping business reported that the number of visits to its site rose 52% on Friday, better than the 30% jump expected.

Jonathan Levinson : 11/28/2005 9:31:47 AM

QQQQ 30/60 min channel support line up at 41.85-.89, resistance at 41.98.

Jeff Bailey : 11/28/2005 9:29:55 AM

comScore Networks, an Internet research firm said non-travel online retail sales rose 22% to $1.89 billion on Friday, compared to the day after Thanksgiving a year ago.

Jeff Bailey : 11/28/2005 9:25:19 AM

Wal-Mart (WMT) $50.49 Link ... ticking higher at $50.80 in pre-market trade after the world's largest retailer reported a 4.3% increase in November sales.

In 2004, Wal-Mart's sales stumbled during the holiday season by not offering enough discounts. Early 2005 holiday sales reports had discounted TVs and DVD players atop shopper's lists.

Jonathan Levinson : 11/28/2005 9:20:54 AM

VTOReport's 21-DMA put-to-call ration is getting down to levels that have signalled caution for bulls in the recent past. There's room to run lower for the p/c ratio, however- August's lows are still considerably lower. Link

Jeff Bailey : 11/28/2005 9:27:54 AM

National Retail Federation said there was a 21.9% increase in shopping over the long Thanksgiving weekend, with electronics in hot demand.

According to a survey of 4,209 consumers, total weekend spending from Thanksgiving Day through Sunday totaled $27.8 billion, a 21.9% increase over last year's $22.8 billion. The figures included online spending.

Jonathan Levinson : 11/28/2005 8:30:06 AM

Ten year notes have recovered off their lows, with TNX opening +.8 bps at 4.439%.

Jonathan Levinson : 11/28/2005 8:17:48 AM

QQQQ's 30 min cycle is 2/3 of the way through the upphase that kicked off on Friday's low, while the 60 min cycle is in the opening stages of its own upphase. The bullishness in these intraday cycles lines up with a very extended and trending daily cycle upphase, and weekly cycle upphase that is overbought as well. Bearish divergences abound, particularly in the 30 and 60 min cycles, but that's been the case for 3 weeks. QQQQ has rising support at 41.90, and bears need to see a strong break below Friday's low before trusting any pullback as anything more than a dip to be bought as aggressively as all the others have been this month. I will update the intraday channel and SMA levels when they refresh at the opening bell.

Jonathan Levinson : 11/28/2005 8:05:54 AM

Dec. e-mini gold touched a high of 499.30 overnight, currently trading +4.70 at 497. Link . The daily cycle is overbought and price is testing upper rising linear channel and bollinger resistance on the daily chart, suggesting that longs keep their stops snug. As with the equity markets, this is an extended move that keeps growing more extended, but until we see a change in the pattern of higher daily highs and lows, the benefit of the doubt continues to go to the bulls.

Linda Piazza : 11/28/2005 7:18:05 AM

A family emergency calls me away today and perhaps for several days. I'll post if I have an opportunity.

Jonathan Levinson : 11/28/2005 7:10:57 AM

Equities are up, ES trading 1272.75, NQ 1709, YM 10979 and QQQQ +.15 at 42.04. Gold is up 5.7 to 498, silver +.154 to 8.284, ten year notes -13/64 to 109 1/16, crude oil -1.025 to 57.675 and natural gas -.05 to 11.955.

We await the 10AM release of Existing Home Sales for October, est. 7.2M.

Linda Piazza : 11/28/2005 7:02:33 AM

Good morning. The Nikkei soared last night, reaching highs not seen in almost five years. Most other Asian markets gained and European markets currently gain, too. As of 6:51 EST, crude was down $0.97 to $57.74. More details about Asian and European markets follows in succeeding paragraphs.

Still climbing off Friday's early morning low, the Nikkei gapped higher last night, reaching toward numbers not seen since December, 2000. The Nikkei closed higher by 202.65 points or 1.37%, at 14,986.94, at its high of the day. Exporters, including carmakers, benefited from the dollar's strength against the yen, with the dollar at a new two-year high against the yen. Some stocks also benefited when U.S. retail sales on Black Friday appeared reassuring to some. A survey said that private-sector companies in all industries will increase capital investments by 15.2% in fiscal 2005. October's retail sales fell by 0.3% year over year, however, when they had been expected to rise 0.3%. Autos, food and clothing sales declined. Consumer spending has been closely watched in Japan, with the government and central bank debating how soon the easy monetary policy should be altered and when the danger of a return to deflation might be ended. Just last week, an advisory panel suggested to the prime minister that the tax breaks meant to spur consumer spending now be phased out.

UBS AG's Tokyo unit revised its outlook for the semiconductor market, saying that it could see growth beginning in the second half of 2006 and that volume could expand by the double digits in 2007. In stock-specific news, Advantest rose after its rating was raised by an analyst at UBS AG's Tokyo unit. Tokyo Electron was also upgraded, and that stock leaped higher in early trading, too. In other stock-specific news, Sumitomo Mitsui Financial Group is under investigation by the Fair Trade Commission into whether it employed unfair tactics to sell financial products to borrowers. This specifically involves the sale of financial derivatives known as interest-rate swaps. Also, Pacific Gold International Holdings priced shares for its IPO.

Most other Asian markets gained, but most posted more modest percentage gains than the Nikkei. The Taiwan Weighted gained 1.23%, however, a strong gain, but South Korea's Kospi inched up only 0.04%. Singapore's Straits Times rose 0.56%, and Hong Kong's Hang Seng gained 0.12%. China's Shanghai Composite dropped 0.37%. The government released figures showing that China's foreign-exchange reserves have been boosted high enough to put upward pressure on the yuan, with the government saying that risks of inflation and asset bubbles have increased.

European markets post strong gains this morning. A weaker euro against the dollar helped exporters, with the European Central Bank's meeting this week likely to affect the relationship between the two currencies. Big news in Europe is a settlement reached by the troubled Ahold related to its U.S. food services division, with this settlement a "big deal," as reported on CNBC Europe, in Ahold's efforts to move forward. Ahold is due to report this week. Sales are not expected to be strong, but there is some enthusiasm that Ahold could begin to move forward now with this case settled, although the settlement was for a hefty $1.1 billion. Drugmaker Novartis saw its stock fall after it announced a deal to sell to ABN Amro Capital France its dietary food business Nutrition & Sante.

As of 6:48 EST, the FTSE 100 had gained 16.40 points or 0.30%, to trade at 5,540.20. The CAC 40 had lost 38.32 points or 0.84%, to trade at 4,625.16. The DAX had gained 50.29 points or 0.97%, to trade at 5,238.27.

Market Monitor Archives