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Jeff Bailey : 12/9/2005 1:12:47 AM

Jan Nat. Gas (ng06f) PnF chart from Dorsey/Wright at this Link ... Current bullish vertical count is $21.00. I also looked at the Feb, Mar, Apr PnF charts and their bullish vertical counts.

Analysis would be that the MARKET may see $19-$21 in the cards (looking at Jan-Mar). April's PnF chart (after winter heating season) is under construction to $15.40 after a double top buy signal at $10.80.

Jeff Bailey : 12/9/2005 12:41:41 AM

National Temperatures 11:12 PM EST with benchmarked January06 Nat Gas and Heating Oil futures at this Link

On Thursday, Jan Nat Gas futures (ng06f) settled higher by $1.29, or +9.42% at $14.99. Jan Heating Oil (ho06f) settled up $0.0466, or +2.68% at $1.7832.

Jeff Bailey : 12/9/2005 12:01:42 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $10.12 and set for program selling at $+7.98.

Jeff Bailey : 12/8/2005 11:33:04 PM

SPX Daily Interval bar chart at this Link

Jeff Bailey : 12/8/2005 10:36:36 PM

Tentative WEEKLY Pivot Levels for next week ... For the SPX. While we have one more day to go in the week, I can still type in the current week's high and low (which was today) and then today's close to get ... 1,237.90, 1,246.87, Piv = 1,259.88, 1,268.85, 1,281.86.

Jeff Bailey : 12/8/2005 10:30:51 PM

SPY / SPX Options Montage found at this Link ...

I wanted to crisscross OI and Volume leaders again today (remember, OI reflects Wednesday's closing tabulations).

See the SPX Dec. 1,250 Put (SZP-XJ) and it's "Net" for the day? 0.00. With my current profile that has not been filled, I'm trying to catch an inflection point, with a downside target of 1,250. It doesn't mean the SPX can't go lower to X,XXX. Or go higher to X,XXX. But I take some notes here. Several sessions ago, a trader asked about buying the 1,250 puts. I don't want to pay "too much" espcially if I have to pay the offer to open a trade and sell the bid to close it. I need some fudge room.

I also make note (as I did intra-day) regarding the VIX.X, as it traded right down to its WEEKLY R1 (11.77). To get the price I want on the profiled put play, I had/have a pretty good feel that I need more call buying/put selling.

Note: For the SPY option chain, there were some crazy Volume readings coming out of QCharts today. I checked against the CBOE, started making some corrections, but gave up. I'm wiped out right now. Open interest checks out though.

Give or take a few contracts, the SPX volumes match up with CBOE as does open interest.

OI Technical Staff : 12/8/2005 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 : 12/8/2005 9:15:47 PM

Current OPEN MM Profiles found at this Link

Today's Activity at 11:53:17 AM ... Currently have an open order to buy two (2) of the SPX Dec 1,250 Puts (SZP-XJ) for $2.40. We got the "action" we began looking for earlier this week, just not enough to the upside today. The SZP-XJ traded a session low of $3.50 as the SPX itself traded a high of 1,263.36.

Jeff Bailey : 12/8/2005 8:48:45 PM

Swing trade naked put establish stop alert ... Let's establish a stop loss on the Goldcorp GG Dec. $20 Put (GG-XD) at $0.25.

Jeff Bailey : 12/8/2005 8:41:42 PM

Swing trade bullish call establish stop alert ... Let's establish a profit stop on the Apache Corp. APA Jan. $70 Call (APA-AN) at $2.90.

Jeff Bailey : 12/8/2005 8:31:17 PM

Closing Internals found at this Link

Traders were active among the four and five lettered names today.

Just 6 sessions into December, NASDAQ average daily volume up 7% from November's 1.74 billion and currently running 1.86 billion per day on average.

1, 2 and 3-lettered names were also brisk with volume running 2.24 billion, up a healthy 5% from November's 2.13 billion share per day average.

6 Days until December quarterly expiration!

Jeff Bailey : 12/8/2005 8:05:26 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/8/2005 8:01:14 PM

Pivot Matrix for Friday at this Link

Jeff Bailey : 12/8/2005 6:02:16 PM

Apache Corp. (APA) $70.98 +2.46% ... (see 05:35:34 PM too) ... Still show conventional (blue) and bull fit 38.2% (green) retracements. But I do add a PINK high/low close retracement and mark where APA was trading when Jan. Nat. Gas futures had just traded their highs. Chart Link

Jeff Bailey : 12/8/2005 5:35:34 PM

Nat Gas / Apache analysis ... I had a question from a trader regarding APA trade relative to the surge in natural gas prices. Here's some analysis, where things look to be in unison. Chart of January Nat. Gas (ng06f) at this Link with APA price benchmarks.

It would appear the the stock (APA) lead the natural gas price advance, then the weakness in APA lead the eventual pullback in natural gas prices. Now things are in unison.

Jim Brown : 12/8/2005 4:16:56 PM

Alert - Intel Mid Quarter Update - Intel Corporation expects revenue for the fourth quarter to be between $10.4 billion and $10.6 billion, as compared to the previous range of $10.2 billion to $10.8 billion

Linda Piazza : 12/8/2005 3:57:54 PM

End-of-day decisions: In addition to the INTC update after the close, tomorrow morning sees Michigan Sentiment and wholesale inventories, as Jonathan mentioned earlier. If you're thinking of the SPX's formation at the top of its climb on its daily chart as a triangle, with a spike outside that triangle on Tuesday, you had an almost matching spike below it today, but the candle body is back inside the triangle again. If you're thinking of it as a rising regression channel, the boundaries were roughly maintained. So were the boundaries of the OEX's falling regression channel, a possible bull flag, and it found support above a descending trendline off the March high. The last three days have felt terribly bearish and they have been, but they really haven't yet done terrible damage to the OEX. The jury is still out. Counter this with the information that I think both the TRAN and the SOX show signs of topping out, and the SOX's move down into that last gap, that possible exhaustion gap, looked like partial confirmation, even though the SOX has managed to almost bounce back above that gap. So, there's no strong confirmation of anything on the OEX, but some possible negative follow-through on the SOX and TRAN.

Linda Piazza : 12/8/2005 3:48:11 PM

The OEX finally closed a 15-minute period above the Keltner resistance at 573.82, suggesting from Keltner evidence that it could climb higher into the close. This is why I kept warning about potential support in the 572-573 zone. The OEX did dip a little below 572, to Keltner support exactly on the 15-minute chart. Keltner evidence isn't the only evidence, however. The OEX is now testing the QCharts-drawn descending regression channel's support, but from underneath, and it's now testing the 574.55 low from 11/30, but from underneath. Keltner evidence may suggest that the OEX will climb higher, but other evidence says that it's got some resistance to chop through, too. I have to say that bulls haven't exactly stepped up to buy here, and neither have bears been too concerned about taking profit.

Jonathan Levinson : 12/8/2005 3:42:26 PM

QQQQ daily chart updated at this Link , the bounce off the low leaving a lower doji shadow. The 30 min cycle is bouncing from a low at the midpoint of its range, while the 60 min cycle is resuming its upphase after pause on the afternoon selling. This is a continuing recipe for chop, but for the moment it has resolved itself to the upside with the short cycle upphase still rising off the session low: Link

Linda Piazza : 12/8/2005 3:40:11 PM

The SOX is attempting a bounce back above the gap from last Thursday. The top of that gap is at 489.36 and the SOX is at 487.85, off the day's low of 484.20. This is expected short covering ahead of INTC's update (at least by me), but the SOX also hit 15-minute Keltner support, now at 485.65 on 15-minute closes. Already, it's begun to erase some of the oversold pressure and RSI may reach the neutral 50 level by the time the SOX tests Keltner resistance at 489.27-490.67 on 15-minute closes, if it reaches that high. The SOX, of course, is one of those indices that not only slides along descending or climbing Keltner support but sometimes breaks outside the channels entirely. Despite the short-covering being expected, bears would not like to see the SOX close the day above that gap, leaving a candle that sprang up from gap support.

Jane Fox : 12/8/2005 3:36:58 PM

I heard on NPR that the tax cut package that has just been approved will benefit only 1% of the population.

Linda Piazza : 12/8/2005 3:34:05 PM

Market on close orders come in a few minutes.

Jonathan Levinson : 12/8/2005 3:33:35 PM

WASHINGTON (MarketWatch) -- The House voted 234-197 Thursday to approve a package of tax cuts totaling $56.1 billion through 2010, including an extension of lower tax rates on capital gains and corporate dividends otherwise set to expire in 2008. President Bush and GOP leaders have made extension of the 15% rate on investment income a top legislative priority, saying the 2003 cut has been key to the economic rebound. Democrats charge that the measure has done little to benefit most taxpayers and that its extension would worsen future deficits. Negotiators must work out differences with the Senate's version of the tax package, which doesn't include the extension of the investor break.

Jonathan Levinson : 12/8/2005 3:28:55 PM

Headlines:

HOUSE PASSES $56.1B IN TAX CUTS THROUGH 2010

HOUSE PLAN EXTENDS LOWER DIVIDEND, CAPITAL GAINS RATES

Jeff Bailey : 12/8/2005 3:27:29 PM

03:00 Internals found at this Link

Linda Piazza : 12/8/2005 3:26:24 PM

The OEX's five-minute Keltner channel support is trying to firm, but the 15-minute resistance looks just a firm. Barring a strong thrust one direction fo the other, the OEX could chop sideways to sideways down the rest of the session. The OEX attempts an upside break right now, but will need a 15-minute close above 573.79 resistance to confirm any upside attempt.

Jonathan Levinson : 12/8/2005 3:25:29 PM

Volume breadth climbs to -1.1 on the NYSE, -1.6:1 on the Nasdaq.

Jonathan Levinson : 12/8/2005 3:21:52 PM

QQQQ wavelet upphase is approaching overbought territory, and the short cycle indicators are just now ticking up with preliminary crosses. 72 SMA resistance is way up at 41.70, however, and I have my doubts as to whether QQQQ bulls are going to be buying that aggressively ahead of INTC. Link

Linda Piazza : 12/8/2005 3:13:51 PM

That may have been the bounce attempt, with resistance that I mentioned near 573.75-574 holding on that attempt and with the OEX back below Keltner resistance, too, perhaps able to slide toward 571.80. Bears need to make up their minds soon if they want to hold overnight. I'd be at least taking partial profits somewhere through this level, however, if I didn't want to exit all my position.

Jeff Bailey : 12/8/2005 3:05:26 PM

03:00 Market Watch found at this Link

Jane Fox : 12/8/2005 3:02:54 PM

Oh give me a break TICKS back to +800!!!!!

Linda Piazza : 12/8/2005 3:02:51 PM

The OEX has confirmed its inverse H&S. Although I'm not at all sure how far the OEX will get, perhaps only to the 573.75-574.00 level now being tested, but I would have been surprised not to have seen some kind of bounce attempt from the support being tested.

Jonathan Levinson : 12/8/2005 3:02:18 PM

There goes the trendline: Link

Linda Piazza : 12/8/2005 3:00:29 PM

The OEX hasn't made much progress in confirming that inverse H&S seen on its one-minute chart. It's carrying the right-shoulder a bit too long, however, and will soon invalidate the formation if it doesn't climb above 573.30 soon. OEX at 573.02. Bulls and bears alike need to be careful this last hour with much positioning perhaps going on ahead of INTC and technical anlysis perhaps being of less use than usual.

Jeff Bailey : 12/8/2005 2:58:14 PM

Jonathan ... thanks for the reply (01:57:46). I saw a "bad tick" to $41.00. So far, last month's MONTHLY R2 $41.24 hasn't been tested. Session low ... $41.27.

Jonathan Levinson : 12/8/2005 2:56:02 PM

QQQQ is trying to hold the higher low just below the descending trendline. The short cycle indicators are on the verge of joining the oversold wavelet in a trending move, and the battle is being joined at that intraday descending trendline: Link

Jeff Bailey : 12/8/2005 2:54:31 PM

02:12 PM EST National Temperatures with Jan Nat. Gas and Heating Oil futures benchmarks at this Link

Tab Gilles : 12/8/2005 2:51:19 PM

Nasdaq100 ($NDX) followup to 12/7 11:03 AM Post.

It appears the NDX is finally pulling back as the indicators suggested. Link Link

Linda Piazza : 12/8/2005 2:51:02 PM

Potential inverse H&S on the bottom of the OEX's one-minute chart, too, shoulder level at about 572.70, neckline at about 573.35. OEX at 572.81 as I type.

Linda Piazza : 12/8/2005 2:49:55 PM

Potential inverse H&S on the bottom of the advdec's 1-minute chart.

Jeff Bailey : 12/8/2005 2:47:59 PM

Apache Corp. (APA) $70.44 +1.68% Link ....

Chesapeake Energy (CHK) $31.18 +1.03% Link ...

Jeff Bailey : 12/8/2005 2:45:40 PM

Feb. Nat Gas (ng06g) $14.88 +7.74% (30-min delayed) ... gets the trade at WEEKLY R1.

10/05/05 contract high was $15.20.

Jonathan Levinson : 12/8/2005 2:44:10 PM

Volume breadth is down to -1.15:1 on the NYSE, -1.8:1 on the Nasdaq.

Linda Piazza : 12/8/2005 2:44:09 PM

SOX testing the bottom of the gap from last Thursday morning, the potential exhaustion gap. It's also testing some trendline support. This is a natural place for a bounce attempt, especially ahead of INTC's update, and the SOX is attempting a bounce, although a tepid one as yet. If you're in bearish positions, this is another reason to protect your profits. It's not a time to be bullish, necessarily, but consider how you'll handle a bounce attempt as bulls and bears consider how to handle their positions ahead of INTC's update.

Jonathan Levinson : 12/8/2005 2:36:57 PM

QQQQ came close but didn't touch gap support on the plunge to the low, but the surge of volume and downside doji spike suggests that the 41.25 touch has a good chance at holding. Bulls need a break above the steep declining resistance line at at 41.45 to reverse the downward trend here. It should also be enough to kick off the overdue upturn in the short cycle indicators: Link

Linda Piazza : 12/8/2005 2:35:19 PM

Advdec line still dropping. No pull up or even steadying yet, but OEX has now hit Keltner support. At about 571.16 it will hit the descending trendline off the March 7 high, potentially powerful support, so there's a lot of support just underneath. Today's action has confirmed that H&S on its chart, but that doesn't preclude at bounce back to test the neckline.

Jeff Bailey : 12/8/2005 2:31:29 PM

Apache Corp. (APA) $70.18 +1.31% ... edging off of DAILY Pivot. DAILY R1 $70.49 has kept the stock in check.

Nat Gas futures press their highs. Jan $14.69 +7.22% ...

Jeff Bailey : 12/8/2005 2:30:14 PM

Chesapeake Energy (CHK) $31.12 +0.87% ... bugger gapped lower to, to, to $30.00 this morning. Bet there was some option open interest there. DAILY Pivot $31.13 here.

Jonathan Levinson : 12/8/2005 2:27:55 PM

Headlines:

2:25pm NATURAL-GAS FUTURES TAP $15.10, A RECORD FOR A FRONT MONTH

2:25pm JAN NATURAL GAS LAST UP $1.30, OR 9.5%, AT $15./MLN BTUS

Jonathan Levinson : 12/8/2005 2:24:40 PM

Volume breadth is down to 1:1 on the NYSE, -1.7:1 on the Nasdaq.

Linda Piazza : 12/8/2005 2:22:36 PM

OEX approaching the neckline of that H&S on its 15-minute chart, also visible up through the 60-minute chart. The OEX appears to be breaking down below the rising regression channel's support, but the day isn't over. Bears want the OEX to go ahead and crash through the 572-573 support, but be aware that this is potential support.

Jonathan Levinson : 12/8/2005 2:22:26 PM

QQQQ daily chart updated at this Link . Keene's interpretation of the break of the upper trendlines earlier this week on a doji spike as a "throwover" was correct.

Jeff Bailey : 12/8/2005 2:18:10 PM

02:00 Internals found at this Link

Linda Piazza : 12/8/2005 2:18:08 PM

OEX approaching potential support now, now from 572.15-573. OEX at 573.22 as I type. There's no guarantee that potential support will hold, but bears with profits are getting a heads-up to that potential support, in time to decide what to do.

Jonathan Levinson : 12/8/2005 2:13:32 PM

10-min, 10-day chart of QQQQ at this Link with the Qs testing lat Thursday's gap support, below which the gap bottom is at 41.20.

Linda Piazza : 12/8/2005 2:11:50 PM

SOX dropping further toward the bottom of that gap from last Thursday. SOX at 487.26.

Linda Piazza : 12/8/2005 2:10:55 PM

Looking at longer-term OEX charts, it appears that there may be some significant Keltner support near 573. The OEX could still pierce it and then bounce back above it by the close of, say, a 240-minute period and the support would still have held, but it just makes me wonder how much more downside there might be today for the OEX. It looks possible to me that if it should drop further, it might find support between 572.25-572.75, so bears should decide how they'll handle that level, if it should drop that far.

Linda Piazza : 12/8/2005 2:05:20 PM

The SOX is now dropping into that last gap higher from last Thursday morning, the gap that I said then might be an exhaustion gap. If the SOX closes this gap, that will suggest that's exactly what it was. I said last Thursday that I thought the SOX could be in a topping-out procedure but that momentum could carry it higher first, and that's what happened. The SOX is far from closing that gap, with the 11/30 intraday high at 484.50 and the close at 481.64, and with the SOX currently at 488.68, but the fact that the SOX traded into the gap at all makes it less likely to have been a runaway gap.

Jonathan Levinson : 12/8/2005 2:04:14 PM

Session high for crude oil here at 60.25, natgas +1 at 14.70.

Jeff Bailey : 12/8/2005 2:02:33 PM

02:00 Market Watch found at this Link

Jeff Bailey : 12/8/2005 1:59:43 PM

SOX 489.11 -1.56% ... not yet a trade at its WEEKLY S1. Session low 488.60 juuuust undercuts DAILY S2.

Jonathan Levinson : 12/8/2005 1:57:46 PM

Re: QQQQ Dec. opex: Nothing beyond noting the monstrous put open interest at 41 and the donminant call open interest at 42. 41 support looks stronger than resistance on that basis. A strong flush below 41 could cause an avalanche if those 41 Dec. put writers begin hedging off the positions, but more likely to me would be a close between 41-42 for next week.

Linda Piazza : 12/8/2005 1:56:30 PM

OEX against testing the bottom of that new regression channel (morphed from other formations) off its 11/23 high, with this being potential support. The Keltner support does not look strong here, but the OEX has so far managed to stay above yesterday's low and find support on that regression channel. It's attempting a bounce as I type, but on the last bounce, it found resistance at a Keltner line now at 575.30, so watch to see if that again serves as resistance on 15-minute closes. OEX at 574.50 as I type.

Jeff Bailey : 12/8/2005 1:57:29 PM

Jonathan ... have you done any work with the QQQQ options this expiration?

QQQQ $41.53 -0.33% .... close to a round $41.50. WEEKLY S1 $41.49.

Jeff Bailey : 12/8/2005 1:53:22 PM

It's a cold day for drillers in the Hugoton gas field (largest onshore gas field in U.S.). Garden City coming in at 9 degrees f at 11:12 PM CST.

Jonathan Levinson : 12/8/2005 1:51:54 PM

The Qs faled to regain 41.62 and have fallen back to the lows, retesting the 30 and 60 min channel bottoms and not yet violating S2 at 41.50: Link

Jeff Bailey : 12/8/2005 1:47:40 PM

Hmmm.... is that what this week's pivot is all about? Perhaps the MONTHLY Pivot too. The mid-point for the roll?

Jeff Bailey : 12/8/2005 1:47:16 PM

Just thinking ... Traders noticed today that HL Camp's buy/sell premiums rose due to futures roll.

That may well explain all of yesterday's sell program premium. Longs selling the December contract to roll to next expire. Some "buy in" this morning (Jane's futures trading systems for the er signals bullish morning).

Didn't jive until just now.

Jeff Bailey : 12/8/2005 1:33:51 PM

US Dollar Index (dx00y) 91.12 -0.77% (30-min delayed) ... did kiss its WEEKLY S1 just before 12:00 PM EST.

QQQQ $41.63 -0.57% ... session low so far $41.54

Jonathan Levinson : 12/8/2005 1:30:19 PM

Slight bullish wavelet divergence here to suggest that we're looking at a short cycle low, but the wavelet has been trending in oversld for the past hour and is therefore unreliable. QQQQ is fighting resistance at yesterday's low, and needs to retake 41.62 to have a chance at a new upphase to test the 72 SMA at 41.80: Link

Linda Piazza : 12/8/2005 1:27:35 PM

OEX starting a bounce from the recession channel's support and some Keltner support. I said earlier that I wouldn't be surprised to see a bounce. Now watch the 575.60-576 level for potential resistance, if the OEX should rise that high.

Linda Piazza : 12/8/2005 1:18:45 PM

Now that both the SPX and OEX have invalidated potential inverse H&S on visible on their 15-minute charts, we can start watching the bigger regular H&S's. The neckline for the SPX's is currently at about 1251.50, but I think the SPX wold have to fall below the 11/30 low before I'd consider it confirmed. For the OEX, it's at about 573, below the 11/30 low of 574.55. OEX at 574.44 as I type, but it's again nearing that potential bull flag's support and some Keltner support. I wouldn't rule out another bounce attempt through here, although I'd expect it to be tepid.

Jeff Bailey : 12/8/2005 1:17:05 PM

01:00 Internals found at this Link

Jonathan Levinson : 12/8/2005 1:11:59 PM

Volume breadth +1.15:1 on the NYSE, -1.3:1 on the Nasdaq.

Tab Gilles : 12/8/2005 1:09:07 PM

TLT Update

March 89 Call Link June 90 call Link

Daily chart Link Weekly chart Link

Linda Piazza : 12/8/2005 1:09:02 PM

SOX testing that neckline of its H&S as I type. It's actually eased just a little below it, but not below the Keltner support that's bounce the SOX on the last three swing lows. Remember that another second right shoulder rise wouldn't invalidate the SOX's H&S formation, so it's not precluded even if the SOX does rise.

Keep in mind that I've been warning that the SOX's last gap looked like an exhaustion gap, so that I've been watching for signs of an exhaustion. You'll see an article this weekend in the newsletter on exhaustion gaps, and I'll point out then that prices can run higher after an exhaustion gap. If the SOX drops back into that gap and then through it, it's either time for it to start a decline or else a prolonged consolidation while it works off overbought levels.

Jonathan Levinson : 12/8/2005 1:08:51 PM

That strong 10-yr note auction last month kicked the equity rally into overdrive, and following today's result, the session lows are breaking. QQQQ tests yesterday's lows, currently trading 41.62 and right on the 60 min channel bottom: Link

Jonathan Levinson : 12/8/2005 1:05:43 PM

Foreign central banks took 1.36B of the 8B in ten year notes auctioned today, nothing like the 55% record participation they set last month. The notes sold for a high-yield of 4.49%, generating 2.19 bids tendered for each awarded.

Jeff Bailey : 12/8/2005 1:05:09 PM

01:00 Market Watch found at this Link ... It is an "oil and water" trade in the VIX / VXN.

Linda Piazza : 12/8/2005 1:02:59 PM

On some charts, the OEX is looking vulnerable to 574.72. Broke lower, toward that, as I typed.

Jeff Bailey : 12/8/2005 1:00:54 PM

According to recent studies it is estimated that 570,260 Americans will die due to cancer in 2005. Lung cancer remains the biggest killer, estimated to claim the lives of 163,510.

Linda Piazza : 12/8/2005 12:58:12 PM

Like the SOX, the RUT has a potential H&S on its chart, building in the RUT's case since about 12/01, when the RUT began rising into a left shoulder. The RUT is nowhere near approaching the neckline area, however, as is the SOX, but instead is near the top of the right shoulder. The neckline for the RUT's formation is at about 680.50 currently, but descends. The RUT is at 688.15, with the top of the right-shoulder area near today's top.

Jonathan Levinson : 12/8/2005 12:52:22 PM

Volume breadth +1.7:1 on the NYSE, +1.05:1 on the Nasdaq.

Linda Piazza : 12/8/2005 12:51:14 PM

The OEX looks as if it's invalidated the inverse H&S on its 15-minute chart (unless there's a quick punch higher right away), but it did confirm a smaller H&S on its five-minute chart, analogous to the SPX's that I mentioned earlier, and did meet its downside target. For the short-term bears did have the reins. Of course, as I type, the OEX is trying to punch higher, trying to undo that invalidation of its inverse H&S, leaving only a candle shadow below the appropriate right-shoulder level. I came into today and warned last night in my Wrap that today's trading could be choppy. So far, there's always been some technical analysis sign that there could be a move in the direction the move is eventually seen, but there hasn't been enough confirmation any time from the advdec line to post a trade.

Jonathan Levinson : 12/8/2005 12:47:45 PM

QQQQ returns to the lows, breaking lower 30 min channel support and approaching the 60 min channel bottom at 41.62. The 30 min cycle is only now stalling near the top of its range, and if those lows break, it could result in a plunge. However, the 60 min cycle is still up, and it's still due for an upphase- could result in net chop as we've had since yesterday at 1PM. Link

Jeff Bailey : 12/8/2005 12:43:26 PM

I placed the SZP-XJ's in the MM Profiles. Not activated as profiled. Their session low has been $3.50.

Jeff Bailey : 12/8/2005 12:42:07 PM

VIX.X 11.90 -2.29% ... couldn't quite get the move below WEEKLY R1 (11.77).

Linda Piazza : 12/8/2005 12:40:28 PM

It's the battle of the competing H&S and inverse H&S's today. There's a potential inverse H&S on the OE's 15-minute chart, head at yeaterday's low, right shoulder in the current 576.35-ish zone and neckline at about 577.80 currently, but it descends slightly.

Jeff Bailey : 12/8/2005 12:39:57 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 12/8/2005 12:31:56 PM

SOX did not hold the 498 support that bulls wanted to see it hold. The SOX sill looks as if it's building a H&S on its 15-minute chart, and I think the neckline would actually be near 492.25. The SOX has spent the minimum time needed to build that right shoulder, so that it could be time to validate it, if it's going to do so, but another hours-long right shoulder bounce would still fit the pattern. Of course, not all H&S's are confirmed.

Jonathan Levinson : 12/8/2005 12:30:25 PM

QQQQ loses it here, the wavelet flatlining in oversold after losing its bounce. 72 SMA support is being broken on the move below 41.82: Link

Linda Piazza : 12/8/2005 12:29:26 PM

OEX headed now into support at 576.59 on 15-minute closes. Bulls want to see that hold. OEX at 576.68 as I type.

Jonathan Levinson : 12/8/2005 12:21:17 PM

Headlines:

12:18pm MILD BIRD FLU PANDEMIC WOULD KILL 100,000 IN U.S.: CBO

12:18pm SEVERE BIRD FLU PANDEMIC WOULD KILL 2 MILLION AMERICANS: CBO

12:18pm MILD BIRD FLU PANDEMIC WOULD CUT U.S.GDP BY 1.5%: CBO

12:18pm SEVERE BIRD FLU PANDEMIC WOULD CAUSE U.S. RECESSION: CBO

Jonathan Levinson : 12/8/2005 12:18:34 PM

Session high for Feb. gold here, +4.90 at 523.

Jeff Bailey : 12/8/2005 12:14:49 PM

12:00 Internals found at this Link

Jonathan Levinson : 12/8/2005 12:14:26 PM

QQQQ's wavelet is bouncing against a fresh short cycle sell signal, which should mark the top of the bounce from this morning. A break above 42 would change that, as the short cycle begins trending. Shorts will look to enter at the top fo the wavelet bounce trying to kick off here- should be the last push or "Keene's Wave." Link

Linda Piazza : 12/8/2005 12:10:30 PM

Don't look now, but the SPX has a nicely formed H&S on top of its one-minute chart, to be confirmed by a decline below 1262.16, with the SPX dipping just below that as I typed. On days such as these, be particularly careful of quick reversals after a seeming confirmation.

Jonathan Levinson : 12/8/2005 12:09:14 PM

Stepping away for a few minutes.

Jane Fox : 12/8/2005 12:06:19 PM

Yup Jeff I would off to the spa but alas...

Linda Piazza : 12/8/2005 12:05:52 PM

RUT at 690.00, more closely approaching the 690.91 potential resistance.

Jeff Bailey : 12/8/2005 12:05:43 PM

Oh Jane! You would have had a beauty this morning. "Spa day" as you like to call it.

Jeff Bailey : 12/8/2005 12:04:51 PM

12:00 Market Watch found at this Link

Linda Piazza : 12/8/2005 11:57:26 AM

SOX dropping. Watch the currently being tested 498 zone for potential support. SOX at 498.04 as I type.

Jonathan Levinson : 12/8/2005 12:03:36 PM

The Treasury has announced that it will auction $34B in 13- and 26-week bills on Monday to refund 31.7B, raising new cash of 2.237B for a drain in that amount. Today's auction will be for 10-year notes, which will raise 8B of new cash.

The big bid under the Treasury markets is likely the result of the maturity of the huge amount of cash management bills coming up. Unless the Treasury borrows big against them, those maturing amounts will be net adds/paydowns to the markets. From the Treasury website:

Also maturing are an estimated $11,000 million of publicly held 7-day Treasury cash management bills, an estimated $18,000 million of publicly held 13-day Treasury cash management bills, an estimated $20,000 million of publicly held 14-day Treasury cash management bills, and an estimated $24,000 million of publicly held 4- week Treasury bills. The disposition of the maturing 4-week Treasury bills will be announced December 12, 2005.

Linda Piazza : 12/8/2005 11:55:28 AM

The OEX is not holding well above that breakout on the 7-minute Kletner chart. If it can't hold the currently being tested support at 577.20 on 7-minute closes, it looks vulnerable to 576.91 and then perhaps 576.07-576.31. That's about where it will stop if this is anything more than a spike higher in an otherwise bearish short-term period. OEX at 577.18 as I type.

Linda Piazza : 12/8/2005 11:51:23 AM

RUT approaches the top of its recent consolidation band, with the top of that band at about 690.91 but with the RUT having pierced it on Tuesday, rising to a high of 693.10 before falling back that day. This must be a really iffy point for RUT bulls. It's maintaining the support of its 10-sma, rising from it again today, but they have to be thinking about what happened the last time prices poked above the top of this consolidation zone. RUT at 689.80 as I type.

Jeff Bailey : 12/8/2005 11:53:17 AM

Swing trade put cancel order alert ... Cancel the order to buy two (2) of the SPX Dec. 1,250 Puts (SZP-XJ) for $2.40 at this time.

Pretty close for an eyeball price, but might be able to get a little cheaper, and I can follow the action now.

Here's an SPX and SPX Option Montage we've been following. Link

OK ... What were some of YOUR answers to my 11:30:02 Post. Are some of you OPTION CHAIN answers confirmed by what you now see?

OK ... At SPX WEEKLY Pivot, 1,261, you see the heavier SELLING of the 1,240 PUT (that's your MONTHLY Pivot) for $2.00, with an AVG OHLC of $2.42.

OK ... that's about all an SPX 1,250 PUT BUYER really wants to pay ($2.00-$2.45) for an expiration (similar to August setup) then.

Linda Piazza : 12/8/2005 11:48:07 AM

SPX tests the 10-sma, with that at 1260.84 and the SPX currently at 1262.29, just off its 1263.36 high. Bulls want to see the SPX maintain values above that average.

Linda Piazza : 12/8/2005 11:42:30 AM

There has been no pullback in the OEX, and it's breaking through the 7-minute Keltner resistance that had looked so strong. It was 7-minute support lines that were holding up the OEX late yesterday and this morning, so that's why those are being watched. The OEX is rising further within that long-term resistance band, toward the midline of its descending regression channel (bull flag?), with 577.90 and 578.25 looking like resistance, too. As I said earlier, there's not enough evidence to suggest a new bearish play, but bulls should continue to prepare for a possible pullback. Currently, you're doing well and any pullback might be a minor one, but just know how much of a pullback you want to endure.

Jonathan Levinson : 12/8/2005 11:39:36 AM

Session highs for ES and YM, QQQQ holding 4 cents below its earlier 42 spike high. This is coinciding with a wavelet downphase, and obviously that downphase is getting poor traction within the broader short cycle upphase. That upphase is approaching overbought territory, and 42-42.10 still looks like important confluence resistance. Link

Linda Piazza : 12/8/2005 11:38:54 AM

SOX still testing that 500 level, right at 500 as I type. It's still sort of maintaining that Keltner support at 498.70-499.23, but it isn't really breaking free of it yet, with candles forming along it rather than moving above it. If it can continue to maintain this support, however, chances increase that it will move up toward next resistance, near 504, a retest of the broken rising trendline off the 11/30 low.

Jeff Bailey : 12/8/2005 11:36:10 AM

Ensco Intl. (ESV) $49.97 +1.40% Link ... just got a trade at $50.00. That's a triple top buy signal for this oil service-related stock.

See Tuesday evenings MM. Might be lower part of Wednesday's MM.

Linda Piazza : 12/8/2005 11:33:55 AM

Advdec line still climbing. The five-minute chart shows the move way overdone, and with bearish divergence when compared to this morning's first rise. The advdec line is at 10-minute resistance, but still climbing. Today's pattern has been nothing like usual ones.

Jonathan Levinson : 12/8/2005 11:33:43 AM

Volume breadth is up to +2.1:1 on the NYSE, +2.05:1 on the Nasdaq.

Linda Piazza : 12/8/2005 11:32:35 AM

The OEX has been coiling at the top of its range and so might rise further into that resistance band.

Jeff Bailey : 12/8/2005 11:30:02 AM

Working on my SPX setup right now with 30-min chart and options montage. While I'm doing this, don't look at the SPX option montage. You've been following the action on a day-to-day basis.

What do YOU think today's action has looked like? Are you surprised by this morning's dip, then bounce? Even as natural gas futures rocket higher?

With some of the sector bullish % action showing reversal back higher, is an SPX put BUYER overly anxious to get involved right now?

Jeff Bailey : 12/8/2005 11:27:14 AM

Have been getting upside alerts I had set on Jan/Feb Nat. Gas futures.

Linda Piazza : 12/8/2005 11:26:16 AM

SOX testing 500 from the underside. In the last 15-minute period, the SOX broke above it, to 500.56, but is at 499.62 as I type. The SOX shows some signs that it might be able to climb to 503.93 next Keltner resistance, however, if it can maintain 15-minute closes above 499.23-498.69. The evidence is tentative as yet, especially with today's high giving it trouble. If the SOX does climb that high, that would constitute a retest of the broken rising trendline off the November 29 low.

Linda Piazza : 12/8/2005 11:23:32 AM

OEX tests fairly significant resistance here. The signs I watch tell me to expect a potential pullback from somewhere within the 577-579 range, and probably toward the lower end of that range, but they don't yet give enough clues as to tell whether it's a minor pullback to about 575.76-576.06 or a more major one. If in bullish plays, I'd look for the possibility that a pullback might occur and decide now how much of one you want to weather. Not enough evidence to suggest a new bearish play, especially as the advdec line still heads higher. OEX at 577.09 as I type.

Jane Fox : 12/8/2005 11:23:07 AM

TICKS are very bullish today +800 again.

Jeff Bailey : 12/8/2005 11:15:22 AM

11:00 Internals found at this Link

Jonathan Levinson : 12/8/2005 11:14:02 AM

Session high for ten year notes, TNX -4.7 bps at 4.47%, flattening against the 13-week bill rate, down 3.8 bps at 3.892%.

Linda Piazza : 12/8/2005 11:13:47 AM

The OEX has climbed into a resistance zone, with Keltner, trendline and other resistance grouped from 577-578.19 on 15-minute closes, and then another band beginning above that. Currently, the resistance looks strong enough to send the OEX lower again, but perhaps only to 575.80-576.22 on 10-minute closes. On the advdec line's chart, the five-minute shows bearish divergence now, with the move way overdone to the upside. The 10-minute shows the advdec line testing resistance, but not with the same bearish divergence. So, I'd think a pullback soon, but not guaranteed to be a big pullback.

Jonathan Levinson : 12/8/2005 11:12:02 AM

Crude oil is up .625 at 59.825 here, off a high of 60.00. Natgas is +.74 or 5.4% at 14.44, 10.5 cents off the high.

Linda Piazza : 12/8/2005 11:07:55 AM

Advdec line still climbing.

Jane Fox : 12/8/2005 11:07:27 AM

TICKs +1000

Jonathan Levinson : 12/8/2005 11:06:57 AM

QQQQ 42 is current 30 and 60 min channel resistance as well, but so long as price holds above the 72 SMA at 41.78, we can expect those channels to creep higher. The cycle picture is ambiguous currently, but on an intraday basis at least, it's bullish. Link

Linda Piazza : 12/8/2005 11:06:46 AM

Advdec line still climbing.

Jeff Bailey : 12/8/2005 11:03:50 AM

11:00 Market Watch found at this Link

Linda Piazza : 12/8/2005 11:03:47 AM

Advdec line hitting the resistance that stopped it earlier, at about 1225, with the advdec line at 1222 as I type. Might be time for a pullback. If long equities, make sure you know how much of a drop you want to take in this climate. If long, you'd like to see 370 support maintained.

Jane Fox : 12/8/2005 11:03:45 AM

The bulls have grabbed the reins. Link

Jonathan Levinson : 12/8/2005 11:01:41 AM

Volume breadth +1.5:1 on the NYSE, +2:1 on the Nasdaq.

Jeff Bailey : 12/8/2005 11:00:31 AM

Buy Program Premium ... DIA $108.27, SPX 1,260.47, QQQQ $41.92

Jeff Bailey : 12/8/2005 10:59:48 AM

APA Option Montage at this Link ... A little bit of put selling in the Jan $65 and $70.

A bull likes that $70 action ... $70 +3.20 = $73.20.

Jane Fox : 12/8/2005 10:59:31 AM

TICKs +800

Linda Piazza : 12/8/2005 10:59:30 AM

Here's a bounce attempt on the OEX, one that I thought might occur but that the advdec line did not signal as a good bet for a long play. The OEX now tests Keltner resistance at 575.55-575.65 on 7-minute closes, and then will retest the day's high of 576.01, with the outcome as yet undetermined. If you're in a long play, be particularly careful. As I said earlier, I don't think this is a time for a new bearish entry, but I'll watch as the OEX gets closer to that 577-579 zone to see if one sets up. Today may remain difficult to gauge all day, with technical analysis not be particularly helpful, although it was this morning, showing that a bounce looked likely, even if all the ducks weren't lining up in a row enough that I could suggest a long play. OEX at 576.46 as I type.

Jeff Bailey : 12/8/2005 10:52:56 AM

Apache Corp. (APA) $70.06 +1.14% ... back above Dec. $70 Call "resistance."

Ya think it a good idea to sell some Dec. $70 Calls?

Hmmm... remember what happened to us with the WLP Nov. $70 Calls.

Nope... won't go there.

Jonathan Levinson : 12/8/2005 10:51:59 AM

Back to find QQQQ reversing back up from a higher short cycle low, confirming 30/60 min cycle upphases. Link

Jane Fox : 12/8/2005 10:44:59 AM

TICKS +800.

Jeff Bailey : 12/8/2005 10:42:09 AM

EIA Weekly Distillate and Nat. Gas. Storage Table found at this Link

Distillates, which include heating oil, were reported yesterday.

Linda Piazza : 12/8/2005 10:36:48 AM

SOX still continuing its potential bear flag bounce right from where I thought it might begin. The question is whether it's a bear flag that's only a small bear flag that will retrace a portion of today's range, perhaps a 50-61.8% portion, or whether it's going to broaden into a wider one capable of climbing into the 505-508 right shoulder level for the potential H&S that's been building since 11/30.

Linda Piazza : 12/8/2005 10:34:52 AM

Advdec line still coiling. If you look at the 7-minute chart, the one that defined resistance at the top of the advdec line's early move this morning, you'd say that support is firming. If you look at the 10-minute chart, however, you'd say that resistance is firming. No wonder that the advdec line isn't moving.

Jeff Bailey : 12/8/2005 10:34:50 AM

EIA Weekly Nat. Gas Storage by Region Link

Jonathan Levinson : 12/8/2005 10:34:36 AM

Stepping away for a few minutes.

Jonathan Levinson : 12/8/2005 10:31:38 AM

Headlines:

10:31am U.S. NATURAL GAS STKS DOWN 59 BLN CUBIC FT: ENERGY DEPT

10:31am JAN NATURAL GAS UP 31C AT $14.01/MLN BTUS ON STK DECLINE

Jonathan Levinson : 12/8/2005 10:28:45 AM

The overlapping cycles are holding price flat just off the lows, and at a higher low from yesterday. That's not bearish, but the 41.62 QQQQ level needs to hold if tested. Link

Linda Piazza : 12/8/2005 10:26:28 AM

I can't remember a day recently when I've seen the advdec line so flat at the beginning of the day. It usually jumps around in the beginning of the day and then settles for a while before the afternoon move.

Linda Piazza : 12/8/2005 10:24:40 AM

The SOX begins a bounce from its test of the 12/06 low, but the bounce looks bear-flaggish so far. If it's going to form a right shoulder for a potential H&S, that bear flag rise could take it up into the 505-508 region over the next couple of days, however.

Jeff Bailey : 12/8/2005 10:23:23 AM

10:00 Internals found at this Link

Yesterday's Internals found at this Link

Linda Piazza : 12/8/2005 10:21:31 AM

OEX dropping back toward yesterday's 573.82 low, back toward Keltner support and the potential bull flag support. There is just the slightest hint of Keltner support firming, up through the 7-minute chart, with that now at 573.95-574.24 on 7-minute closes. OEX at 574.31 as I type. These lines still turn lower, but their slopes are decreasing, hinting that they're trying to flatten and provide support. I don't see enough evidence to suggest a new long just yet and am dealing with a family situation that may require a family hospitalization anyway, and so some time away, but I don't think I'd be initiating any new bearish positions just yet, for sure.

Jonathan Levinson : 12/8/2005 10:17:48 AM

QQQQ's short cycle downphase hasn't come close to threatening the current 30 and 60 min channel bottoms, and a bounce from here should have a good chance of cracking the current high at 42. On the flip side, volume has been declining on the bounce off the low, and this underlines the fact that the short cycle downphase still has room to run lower. Link

Linda Piazza : 12/8/2005 10:17:25 AM

I'm back. I've switched to a 7-minute chart for watching the advdec line, and it shows support building, and the advdec line trying to rise again from that support. It hit the 7-minute resistance this morning, now at 1078 but then lower, and turned back, so if it does rise, potential resistance exists near 1080. The advdec line is at 62 as I type. There's just nothing definitive right now. The OEX is showing some efforts at steadying near the bottom of its new regression channel and with regard to Keltner support, but that Keltner support isn't yet strong enough that I can say with any certainty that it's going to hold. Or, rather, I think it's going to hold, but I can't say with any certainty that the OEX isn't going to slide lower along that support and the descending support of its potential bull flag. I can say that it looks as if it's trying to steady and rise, but I just don't have a good enough signal to tell you to go long just yet, and may not get it.

Jeff Bailey : 12/8/2005 10:08:41 AM

10:00 Market Watch found at this Link

Jane Fox : 12/8/2005 10:08:01 AM

I see a divergence between the VIX and ES this morning. VIX is making new daily highs but ES is not making new daily lows. I read this as bearish.

Jonathan Levinson : 12/8/2005 10:00:20 AM

The Fed announces a 12B overnight repo for no net change, but the highest rate submitted was 4.13% and the stop out rate climbed to 4.1%, on its way to 4.25% as demand for the Fed's repo money rises.

Linda Piazza : 12/8/2005 9:56:59 AM

Advdec line heading lower. Watch the SOX as it tests that 12/06 low. It's slipping just to that 493.09 low as I type, just having hit a low of 493.05 and now having bounced to 493.57. This is a sort of guaranteed bounce, but now we have to see whether it holds or not. If so, it could bounce other indices, too.

I'm stepping away for a few moments to reboot my computer. The idle process is hanging up.

Jonathan Levinson : 12/8/2005 9:53:46 AM

And so is Wholesale Inventories. My apologies: I misread my economic calendar. Both reports, Michgian Sentiment and Wholesale Inventories, are scheduled for tomorrow, not today.

Linda Piazza : 12/8/2005 9:53:11 AM

SOX still sliding toward the 12/06 low.

Jane Fox : 12/8/2005 9:52:51 AM

Jonathan isn't Michigan Sentiment tomorrow.

Jane Fox : 12/8/2005 9:51:22 AM

These two are telling us to stay out of the market and wait until a direction has been determined. Link

Linda Piazza : 12/8/2005 9:50:51 AM

There's still mixed evidence here when looking at the advdec line.

Jonathan Levinson : 12/8/2005 9:50:07 AM

Still waiting for Michigan sentiment.

Jonathan Levinson : 12/8/2005 9:47:02 AM

QQQQ's short cycle upphase stalls here near the top of its range. 30 min channel support at 41.60, if touched, should confirm the old bottoms in those cycles printed yesterday afternoon. I don't think that today's bounce was enough to exhaust those upphases. A failure of yesterday's lows would suggest very bearish action from the broader daily cycle.

Tab Gilles : 12/8/2005 9:46:35 AM

TLT Gapped up on open right upto weekly 40-ema $89.97.

Jonathan Levinson : 12/8/2005 9:43:32 AM

Awaiting Michigan sentiment in the coming minutes.

Linda Piazza : 12/8/2005 9:39:23 AM

The advdec line pierced central S/R and then dropped back, but it hasn't dropped away from the mid-channel level yet. Still holds that potential support, so the picture is still mixed.

Jonathan Levinson : 12/8/2005 9:38:20 AM

Looks like the channel violation mattered this morning, as QQQQ pulls back to unchanged at 41.86: Link

Linda Piazza : 12/8/2005 9:38:36 AM

Looking at the SOX's 30-minute chart, I've wondered if the SOX might not be ready to climb into a right shoulder for a potential H&S, with the formation beginning to set up about November 30, as the SOX began rising into a right shoulder, with that right shoulder level at the 12/02 high of 508.34, the head at Tuesday's high of 510.38, and the right shoulder still to be formed. If that's going to happen, the SOX might drop this morning to retest Tuesday's low or maybe just yesterday afternoon's low just above 495 and then bounce again. The 12/06 low was 493.09. The SOX is at 496.82 as I type, having filled this morning's gap.

Jonathan Levinson : 12/8/2005 9:36:22 AM

Against the 23B in various repos expiring today, the Fed has its 5B 28-day advance repo announced yesterday and a 14-day 6B repo announced this morning, leaving 12B to address at its short term announcement. I'm guessing at a net drain for the day as the Fed begins walking up its overnight rate toward an anticipated 4.25% target. We'll find out at 10AM.

Linda Piazza : 12/8/2005 9:34:36 AM

TRAN moving higher. SOX jumped back above 500, at 500.27 as I type, but right at resistance. Oops, down below 500 again, dipping into this morning's gap.

Jonathan Levinson : 12/8/2005 9:34:24 AM

Volume breadth is +1.25:1 on the NYSE, +2.55:1 on the Nasdaq.

Linda Piazza : 12/8/2005 9:33:25 AM

The OEX moves higher, still moving off the 10-minute Keltner support and the bottom of the new rising regression channel, but the possibility remains that it's going to drop down to retest that support again, especially with the advdec line where it is. No strong signal of any kind right now.

Jonathan Levinson : 12/8/2005 9:33:14 AM

QQQQ breaks upper 30 and 60 min channel resistance at the open. 72 SMA support is at 41.78: Link

Linda Piazza : 12/8/2005 9:31:42 AM

Advdec line starts below midline S/R and moves up. This is a bit iffy to interpret as it's essentially testing resistance.

Tab Gilles : 12/8/2005 9:28:04 AM

+20 Year Treas Bond Fund (TLT) Yesterday I mentioned EVV (11:47 AM post), today I want to highlight TLT. This weekly chart shows that a nearterm bottom was put in at the $88/$89 level.I'd be much more bullish if and when it crosses over the 40 week ema- 90. Two options I'm watching at the March 89 call (TLTCK) & the June 90 call (TLTFL). Link Link

Jonathan Levinson : 12/8/2005 9:21:27 AM

QQQQ has bounced to a 12 cent gain at 41.98. The 30 and 60 min cycles are still at the outsets of the upphases that were building yesterday afternoon, and while this strong surge should test upper channel resistance at the opening bell, they will have more room to run before being overbought. I will update the intraday channel levels when they refresh at the cash open.

Linda Piazza : 12/8/2005 9:15:55 AM

Yesterday, the OEX moved lower with other indices, perhaps morphing into yet another formation in the process: a descending regression channel forming off the 11/23 high. The late-day bounce occurred right at the bottom support of the QCharts-drawn new descending regression channel and also from just above the 21-ema. Is this likely to be a bull flag? If it is, trading is likely to be choppy while the OEX remains within that formation, and care should be exercised, particularly today, ahead of INTC's update after the close. Recent optimism that INTC raise expectations have degraded to fears that it will disappoint.

The late-day spring in prices probably occurred due to the impending TXN update and the recent pattern that stipulates that bears better take profits when they have them. There were probably some bears taking those profits at the close. However, the bounce from that new regression channel support suggests that the OEX may be trying to move up through that potential flag formation. If so, look for resistance at the midline, at about 578.27, but also throughout that whole 577-578.40 zone that's long-term S/R. Watch for a potential rollover from that point. If the OEX can break through that zone, it may head up to the top of the channel to retest this week's high.

If, instead of following through with the bounce this morning, the OEX declines, look for support again near the bottom of that channel, or near 573.90-573.99 on 10-minute closes. The Keltner support has not yet firmed up, indicating the possibility that prices could still just slide lower, so a breakdown through that channel is not precluded.

Usually, I have a firmer idea of what might happen, whether or not that idea pans out. However, today, the bounce and rollover from mid-line resistance and the dip-and-slide-along weak support seem about equally weighted to me, and I'm not the only one who might be seeing those various possibilities. That could lead to some choppiness and some trading that's not particularly amenable to technical analysis.

Watch the SOX and the TRAN, two key indices that may be topping. Topping doesn't mean that they'll fall back immediately. They could even print higher highs, but if the SOX or TRAN should break down, it grows more possible that there isn't anything bullish about the current pullback on the OEX, either. For now, though, we'll assume that the regression channel's boundaries will be honored, even if the OEX should slide down along the descending support.

Jonathan Levinson : 12/8/2005 8:39:44 AM

Session high fo ten year bonds, the TNX testing 4.5% here.

Jonathan Levinson : 12/8/2005 8:31:46 AM

No movement in equities or treasuries from their pre-data levels, QQQQ -.02 at 41.84 after edging higher over the past hour, TNX -1.3 bps at 4.504%.

Jonathan Levinson : 12/8/2005 8:30:51 AM

Headlines:

U.S. WEEKLY JOBLESS CLAIMS UP 6,000 TO 327,000

U.S. WEEKLY JOBLESS CLAIMS ABOVE CONSENSUS 318,000

U.S. 4-WEEK AVG. JOBLESS CLAIMS DOWN 250 TO 322,500

U.S. CONTINUING JOBLESS CLAIMS DOWN 137,000 TO 2.60 MLN

Jonathan Levinson : 12/8/2005 8:22:04 AM

Ten year notes hold a 1/8 gain at 108 39/64 ahead of the Initial Claims data, TNX quoted -1.5 bps at 4.502%. IRX is down .8 bps at 3.922%.

Jonathan Levinson : 12/8/2005 7:36:45 AM

Equities are down, ES trading 1254.75, NQ 1696, YM 10792 and QQQQ -.11 at 41.75. Gold is up 1.8 to 519.90, silver is -.039 at 8.831, ten year notes are up 3/32 to 108 35/64, crude oil is up .30 to 59.90 and natgas is up .27 to 13.97.

We await the 8:30 releases of Initial Claims, est. 315K, then at 9:45, Michigan Sentiment, est. 85, then at 10AM, Wholesale Inventories, est. .5%.

Linda Piazza : 12/8/2005 7:14:15 AM

Good morning. The Nikkei fell hard last night, more than 300 points. Other Asian markets dropped, as do European markets this morning. As of 6:54 EST, gold was higher by $1.90 to $519.70, and crude, up by $0.44 to $59.65. Overnight, someone that a news service termed an "OPEC boss" said that Monday's summit was unlikely to result in a trimming of output, but crude traders seemed to take little notice. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei chopped lower in earliest trading, then plunged through the afternoon, closing 301.30 points or 1.95% lower, at 15,183.36. Japan's long anticipated October core machinery orders disappointed, rising 8.5% year over year against expectations of a 9.9% gain, and 4.8% month over month, against expectations of a 5.9% gain. The cabinet office still believes that the trend for orders is increasing and that the projected 6.2% quarter-over-quarter growth can be met. That disappointing release and fear of the GDP release tomorrow led to the strong afternoon sell-off, but some blame also landed on an erroneous sell order for an IPO for more than 40 times the number of outstanding shares that began triggering the sell-off. Even early in the day, before the disappointing machinery orders release, technology stocks were declining. Enthusiasm that INTC will upgrade turned to fear that it would disappoint. Matsushita continued the losses from yesterday, with the company announcing yesterday that it was recalling kerosene heaters.

Other releases than the machinery orders number included the before-the-open release of figures on November bank loans and money supply, with those showing that liquidity rose 2.1% year over year, up from October's 2.2%. During the day, the Ministry of Finance's corporate survey produced figures--including a better-than-expected rise in capital spending for the quarter, a broadening in the capital expenditures among manufacturers and non-manufacturers and steady consumer spending--that suggest that the GDP growth for the third quarter will be revised higher.

Other Asian markets declined, too. The Taiwan Weighted fell 1.27%, but South Korea's Kospi dipped only 0.04%, even after the central bank unexpectedly raised rates by a quarter percentage point. Singapore's Straits Times dropped 0.26%, and Hong Kong's Hang Seng lost 1.69%. China's Shanghai Composite lost 0.12%. CNOOC is interested in buying $10 billion in non-core assets from Russia's Yukos Corp, CNOOC's chief executive said in an interview.

European markets fall today, too, with the U.K. awaiting a rate-hike decision and Germany's October industrial production number. The Bank of England is not expected to raise rates. Today the ECB released its December monthly bulletin, but basically kept the same stance as that repeated by ECB members lately, that there are upward pressures on the CPI from crude prices, possible second-round inflation effects and possible excessive liquidity, but the report maintained a cautiously optimistic tone.

Miners and insurers tend to trade lower today in Europe. J.P. Morgan revised its rating on European insurers, lowering ratings on Munich Re, AXA and Generali. In earliest trading, Skandia Insurance and the U.K.'s Old Mutual bucked the downward trend after a newspaper speculated that Skandia will accept Old Mutual's takeover bid. The decline in miners was attributed to profit-taking after a strong run by some. The Royal Bank of Scotland reported earnings in line with expectations, and the stock dropped in early trading. In other stock-specific news, Merrill Lynch trimmed the rating of British Airways PLC to a neutral, down from the previous buy rating, but the airline's stock was in the green as this report was prepared. German retailer KarstadtQuelle saw strong early gains after it said that it might either sell its real-estate operations or set up an IPO. The retailer also detailed other plans to pay down debt.

As of 6:59 EST, the FTSE 100 was lower by 19.20 points or 0.35%, to 5,509.60. The CAC 40 was lower by 25.22 points or 0.54%, to 4,635.36. The DAX was lower by 29.48 points or 0.56%, to 5,237.27.

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