Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Jeff Bailey : 12/12/2005 11:45:23 PM

Program Trading Levels for Tuesday ... HL Camp & Company has their computers set for program buying at $+9.58 and set for program selling at $+7.44.

OI Technical Staff : 12/12/2005 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The Market Monitor has been archived.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 : 12/12/2005 9:18:50 PM

December Fed Fund futures (ff05z) 95.84 ... FOMC tomorrow. With Fed Funds currently 4.0%, this futures contract currently predicting 65% chance of 25 bp rate hike at tomorrow's meeting.

Marc Eckelberry : 12/12/2005 8:17:25 PM

A reminder that the stop on the INTC APR 25 calls is at 1.95 break-even.

Jeff Bailey : 12/12/2005 8:10:28 PM

Pivot Matrix for Tuesday found at this Link

Marc Eckelberry : 12/12/2005 8:16:34 PM

What are your thoughts on breaking QQQQ 42 in Dec. I'm short the calls.

Open interest is pointing to a close this week below 42 and above 41. That is not to say things can change very quickly, especially tomorrow. My play would be to hedge with long DIA Jan calls, since DEC strikes have put support at 107,108 and 109, making them a good candidate to hold above water this week. Just keep in mind that QQQQ will be all over the place tomorrow and Wednesday. Watch the chips, especially INTC, which is looking weak after-hours.

Jeff Bailey : 12/12/2005 5:09:52 PM

SPY / SPX Options Montage ... At the close. Now I've turned on today's Low/High for the call options Link

Just prior to today's close, I captured the same montage with put Low/High turned on at this Link ...

This should give current month options traders some idea of option prices within an 8-point range for the SPX, with days to expiration now just 3 for the SPX.

Looks like a little "burst" of put buying in the SPY $125 Puts (SPY-XU) to the close as volume rose to 4,117 from 2,902 in last minutes of trade.

The SPX 1,250 Puts (SZP-XJ) also got a little action, finishing with 9,265 from 6,532. Note: Dn vs. Up tick volume for these puts was net Down all day. Finished 3,581:788. This more bullish in my opinion. Bulls were "on the ropes" again today, but they wouldn't give up 1,255.

Jeff Bailey : 12/12/2005 4:48:36 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... We were swing trade put filled on the S&P 500 SPX 1,250 Puts (SZP-XJ) at the open of $2.05. While trade began to unfold as envisioned Friday afternoon (MM 05:19:36 PM), we were eventually stopped at $2.60. (+0.55, or +26.83%).

On Friday we were swing trade stopped on the Apache Corp. APA Jan $70 Calls (APA-AN) at the bid of $2.90 ($+0.50, or +20.83%).

Jeff Bailey : 12/12/2005 4:41:50 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/12/2005 4:36:21 PM

Closing Internals found at this Link

Jeff Bailey : 12/12/2005 4:01:29 PM

Sell Program Premium ... DIA $107.75, SPY $126.47

Jeff Bailey : 12/12/2005 4:00:52 PM

SPY / SPX Options Montage into the closing bell at this Link ... I also turned on today's Low/High for Put options.

Linda Piazza : 12/12/2005 4:17:03 PM

End-of-day decisions: This is going to be difficult, because it's been a difficult-to-gauge day, with no follow-through on early bullishness, barring such follow-through at the end of the day. The OEX has tested the daily 21-ema again today, but failed to hold above it for the third day in a row, with that average at 575.65. There's still a possibility that the OEX will bounce above it by the close. The OEX remains within a rough and not particularly well-formed descending regression channel, pulling back off the 11/23 high, although there can be other interpretations for that formation, with the most dreaded one and possibly most likely one that it's in another broadening formation at the top of its climb. Trading can get really tricky inside these formations, and we've certainly seen some of that. At the top of a climb, they're considered bearish, but they haven't always performed so, and there's still that possible flag interpretation, with a spike higher and a spike lower. As I said earlier today, I wouldn't be at all surprised to see the OEX decline toward the 30-sma, now at 571.23 and located near the descending trendline off the March high, and it wouldn't be a particularly bearish thing for it to do, either, to come back and retest that former resistance, as long as it bounced from it. Last week's low came awfully close, so have we had that test? I'm not sure and neither is anyone else, and that's why we're seeing these long-legged doji Friday and today, if the OEX should close the day anywhere near its current 574.79 level.

The SOX is in a potential topping-out exercise and is producing a doji today (so far) gapping above the previous candle, but it's still hanging around the high of the day and near recent highs. The TRAN declined and tested that 30-sma today and is bouncing, but it also rose to test the 10- and 21-sma and is so far below them, perhaps also printing a doji for the day. The BIX had a down day although its range is totally within Friday's. Like the TRAN, it bounced from its 30-sma but also bounced back from its 10- and 21-sma's. The BIX has a sort of H&S-ish formation on its daily chart, and its weekly one. The RLX shows a gain today, and it did push back above its 10- and 21-sma'a, but even the RLX has dropped back off its high. There's a wild mixture of potentially bullish and bearish observations here. So far, the OEX is traveling inside the lower half of its 15-minute nested Keltner channels and below the 577-578.40-ish next resistance, but it's currently about midway between strong support and likely strong resistance, and there's really not a lot of clarity yet about next direction.

Jonathan Levinson : 12/12/2005 3:37:44 PM

Perfect op-ex action, with QQQQ roundtripped right back to its premarket levels. Link

Linda Piazza : 12/12/2005 3:31:03 PM

The SOX is just weaving in and out of the 61.8% retracement of the decline from last week's high into Thursday's low, with that at 500.35, and with the SOX currently at 500.36. It's possible to view that bearishly--the SOX can't consistently stay above that resistance. It's possible to view it bullishly--that's near the location for a potential inverse H&S on the SOX's 15-minute chart, and the SOX is staying near the neckline. And that's about the way the whole day has been.

Jane Fox : 12/12/2005 3:28:17 PM

Short on the red exit on the yellow then go long on the blue. Link

Jeff Bailey : 12/12/2005 3:25:33 PM

National Temperatures at 01:13 PM EST with January Nat. Gas and Heating Oil futures benchmarks at this Link

Linda Piazza : 12/12/2005 3:22:30 PM

The SOX was making an attempt to break high as I typed and then uploaded my 3:16:47 post, but it wasn't successful, at least not yet, showing a divergence from the earlier pattern. The SOX is going to have to drop below 500.07 and stay there to invalidate that pattern, though. Otherwise, maybe it just needed one more "wind up" bounce to get going. SOX at 500.23 as I type.

Linda Piazza : 12/12/2005 3:16:47 PM

On the SOX's one-minute chart (and you know what the day's like when we're watching one-minute charts), the formation looks remarkably like that from about 2:02-2:35, and the SOX broke to the upside out of that one. If it's going to repeat the pattern, it's about time for it to try again.

Linda Piazza : 12/12/2005 3:13:58 PM

The OEX has risen to again test that Keltner resistance, from 574.65-574.83 on 15-minute closes, with the OEX now at 574.77 and only a minute or so left in the period. Next resistance at 575.76 on 15-minute closes.

Jeff Bailey : 12/12/2005 3:13:11 PM

03:00 Internals found at this Link

Jonathan Levinson : 12/12/2005 3:12:50 PM

QQQQ - Exit Point Alert -

Stopped out of QQQQ short at 41.88, breakeven

Linda Piazza : 12/12/2005 3:03:55 PM

On the first test, anyway, the OEX's resistance now at 574.56-574.64 held on a 15-minute close, but so far, so does the support at 573.97, so the OEX might not be through challenging that resistance. And that's the most I can say. This has been the strangest day. I thought the OEX looked as if it might head lower and it did, and I thought it might bounce from 572-573 and it did, but there's never been any sense that anything is working right today. I can name any number of competing bullish and bearish formations on charts, I can point out that the SOX and RLX are close to challenging the day's highs (although maybe turning down a bit from those challenges as I type) but that the BIX and TRAN show only oversold bounces so far.

Jeff Bailey : 12/12/2005 3:02:58 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 12/12/2005 3:01:46 PM

QQQQ peaked at 41.87 on this move, the wavelet edging lower from overbought territory as the short cycle indicators enter overbought. A move back below the 72 SMA would confirm a new short cycle downphase from a lower high, and restore the tepid 30 min channel downphase. Link

Marc Eckelberry : 12/12/2005 2:57:03 PM

ALERT
DIA DEC 108 call at .35, place a stop at .20. This is a lottery play, but it can still be controlled.

Jeff Bailey : 12/12/2005 2:55:49 PM

SPX 1,259.41 (unch) ... SZP-XJ $2.75 x $3.20

Linda Piazza : 12/12/2005 2:53:04 PM

I'm staring at the SOX's 15-minute chart since December 1 and trying to make some sense of the patterns and just am not seeing much except a Pick-Up-Sticks jumble of trendlines, a possible broadening formation--the most likely explanation, I think-- a potential inverse H&S within that formation, building since the 7th, a possible descending regression channel with a wayward spike to the upside and a wayward one to the downside. It's a mess, and this mess began forming after that last gap high on the morning of December 1, that potential exhaustion gap. It's disorganized, emotion-based trading typical of a topping-out process. This does not look like the typical consolidation before a move higher, but that doesn't mean that there won't be a move higher.

Jeff Bailey : 12/12/2005 2:51:25 PM

Swing trade put exit alert for the SPX Dec. 1,250 Puts (SZP-XJ) at $2.60.

SPX 1,259.32

QQQQ $41.86 ... back to DAILY R1 here

Linda Piazza : 12/12/2005 2:48:42 PM

OEX climbing toward next Keltner resistance, at 574.64-574.65 on 15-minute closes. OEX at 574.45 as I type.

Jeff Bailey : 12/12/2005 2:42:47 PM

SPX 1,258.60 -0.06% ... sets up for re-test of DAILY Pivot.

SZP-XJ $3.00 x $3.40

Linda Piazza : 12/12/2005 2:42:01 PM

OEX still climbing from its test of the 572-573 zone. It's currently testing 15-minute resistance at 573.85 on 15-minute closes, with a number of minutes still left in the 15-minute period. Next resistance at 574.61 on 15-minute closes. OEX at 574.01 as I type.

Linda Piazza : 12/12/2005 2:39:58 PM

SOX approaches first Keltner resistance at 500.41, next at 501.51 on 15-minute closes. SOX at 500.42 as I type, again testing the 61.8% retracement of the decline off last week's high into Thursday's low.

Jonathan Levinson : 12/12/2005 2:39:12 PM

QQQQ clears 72 SMA resistance here. Link

Jane Fox : 12/12/2005 2:38:28 PM

TICKS +800

Linda Piazza : 12/12/2005 2:37:14 PM

SOX breaking higher again, breaking above that potential H&S's appropriate right-shoulder level.

Jeff Bailey : 12/12/2005 2:36:14 PM

U.S. Dollar Index (dx00y) 90.33 -1.00% (30-min. delayed) ... ticks back up to WEEKLY S2 here.

Gold Bugs ($HUI.X) 260.41 -0.35% ... even with price 30-minutes ago.

Jonathan Levinson : 12/12/2005 2:28:54 PM

Session high for crude oil approaching the 2:30 close, +1.90 at 61.30.

Linda Piazza : 12/12/2005 2:29:11 PM

The advdec line is beginning to move past resistance that was stopping it earlier. It's looking as if a bounce could be in the works from just where you'd expect, but I'm watching the SOX begin to round down into right shoulder for a potential H&S on its 1-minute chart, so there's still mixed evidence, and I'm not sure whether this bounce is just a countertrend bounce or something more. I haven't been tempted to enter new positions yet today.

Linda Piazza : 12/12/2005 2:20:53 PM

The advdec line tests resistance that held about midmorning, when last tested. That's at about -525 on 10-minute closes, with the advdec line just closing the 10-minute period below that. There's a hint of an inverse H&S on the advdec line's five-minute chart, however. Stronger resitance is near -350. Advdec line now at -578, QCharts value.

Jonathan Levinson : 12/12/2005 2:18:13 PM

WASHINGTON (MarketWatch) -- The U.S. federal budget deficit widened as expected to $83.1 billion in November, the largest deficit of any November, the Treasury Department said Monday. A year ago, the deficit was $57.9 billion. In November, receipts rose 3.2% to $138.8 billion, while outlays were up 15.3% to $221.9 billion. For the first two months of the 2006 fiscal year, the deficit has totaled $130.2 billion, vs. $115.2 billion at this time last year. The White House expects the deficit to rise to $390 billion from $318.5 billion in 2005.

Linda Piazza : 12/12/2005 2:17:56 PM

Watch for the possibility that the SOX might rise again toward 499.50 and then round down again. it's at 499.18 as I type.

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

02:00 Internals found at this Link

Linda Piazza : 12/12/2005 2:09:31 PM

Hmm. Another little inverse H&S on the OEX's 1-minute chart, but the OEX went nowhere after confirming it, and is now back below the neckline. Doesn't mean it won't climb, but we're seeing a lot of signs like this today.

Jonathan Levinson : 12/12/2005 2:06:45 PM

QQQQ just aborted a wavelet downphase in the early going, and the short cycle has turned up. 72 SMA resistance is now being tested at 41.82-.83, above which our breakeven stop on the 41.88 short will be in the crosshairs. 30 min channel resistance is down to 41.90, and the 30 min cycle downphase should have plenty of room to run- provided that the 72 SMA doesn't fail as resistance. Link

Jeff Bailey : 12/12/2005 2:04:26 PM

02:00 Market Watch found at this Link

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

The OEX tests Keltner resistance at 573.41-573.44 on five-mintue closes, bursting (at least temporarily) above it as I typed. This resistance has been holding the OEX back since about 12:30. The 15-minute view shows next resistance at 573.93. As I've been warning since before the OEX headed down to test 572-573, you needed to have a plan for handling this test and now you need to adhere to it, whatever it was. Bears would obviously like to see the OEX fail at that next resistance on a 15-minute close.

Linda Piazza : 12/12/2005 2:00:03 PM

The SOX's potential H&S on its five-minute chart is no longer valid, and the formation appeared to morph into a possible falling wedge, with support now at about 496 and resistance now at about 499.

Jeff Bailey : 12/12/2005 1:58:26 PM

VIX.X 11.80 +0.94% ... still pinned under DAILY Pivot at this point.

SPX 1,256.28 -0.24% ...

SZP-XJ $3.50 x $4.10

Jeff Bailey : 12/12/2005 1:56:58 PM

TRIN 0.98 ... has edged above its DAILY Pivot. Bears want higher measure above the "neutral" 1.00.

Jeff Bailey : 12/12/2005 1:54:42 PM

Gold Bugs ($HUI.X) 260.88 -0.17% ... reverse earlier gains.

Goldcorp (GG) $20.73 -0.43% ...

GG-XD $0.10 x $0.15.

Jonathan Levinson : 12/12/2005 1:48:36 PM

Stepping away for a few minutes.

Jonathan Levinson : 12/12/2005 1:46:47 PM

Session low for Feb. gold here, up .10 at 530.30.

Linda Piazza : 12/12/2005 1:46:40 PM

The SOX continues to hold to five-minute support at 496.56-497.03 on five-minute closes. There's some slight softening of that support, but slight only. Resistance is near 498.24-498.31 on five-minute closes and it looks almost, but not quite, as strong as support. Without a strong thrust one direction or the other, there could be some chop.

Jonathan Levinson : 12/12/2005 1:46:09 PM

Ten year note yields hae popped to a 2.8 bp gain at 4.565%, steepening further against the 13-week rate, -.7 bp at 3.835%.

Jeff Bailey : 12/12/2005 1:43:56 PM

VIX.X 11.75 +0.51% ... refuses to move above DAILY Pivot at this point.

SPX 1,256.91 -0.19% ...

SZP-XJ $3.50 x $4.00

Linda Piazza : 12/12/2005 1:40:56 PM

OEX dropping now toward 572.76 support on 15-minute closes, although the five-minute chart suggests a deeper drop. It's time for bears to continue following the OEX lower with their stops, but not necessarily for bulls to step in. There's still a mixture of evidence. On the advdec line, there's a hint of bullish divergence beginning to creep in up through the five-minute charts, and I wouldn't be surprised to see a bounce to relieve some of the overdone nature of the short-term move, but it doesn't yet give any kind of buy signal.

Jeff Bailey : 12/12/2005 1:38:16 PM

U.S. Dollar Index (dx00y) 90.20 -1.15% (30-min. delayed) ... big move lower in the greenback today. After trade below WEEKLY S2 (90.33), MONTHLY S1 (89.92) next level of pivot support.

Linda Piazza : 12/12/2005 1:36:26 PM

The SOX is rising now, but its potential H&S on the five-minute chart has now grown all out of shape and I don't know if it has any validity at all. If it does, the neckline is now at about 496.30.

Jeff Bailey : 12/12/2005 1:34:36 PM

SPX 15-minute interval chart at this Link ... with QCharts' DAILY Pivot levels turned on.

Jonathan Levinson : 12/12/2005 1:29:50 PM

Volume breadth is -1.1:1 on the NYSE, -1.13:1 on the Nasdaq.

Marc Eckelberry : 12/12/2005 1:25:56 PM

ALERT
Lottery play: buy DIA DEC 108 calls at 0.35. No stops.

Keene Little : 12/12/2005 1:24:56 PM

Jonathan, good observation on gold. It's that gravestone doji that I've been waiting for before shorting the gold e-mini. It's been quite a run for gold.

Linda Piazza : 12/12/2005 1:20:28 PM

OEX looking more vulnerable now to the Keltner line currently at 572.85, although it came fairly close to that line during the last 15-minute period before bouncing, so perhaps that was the test when the OEX dipped to 573.17 and that line was then at 572.84. Bears need to begin to be careful of their profits here. I see potential for more downside, but I'm also looking at a big potential inverse H&S on the OEX's 15-minute chart, head a Thursday's low and right-shoulder level being tested. This formation set up within a descending regression channel and it's big with respect to the decline that preceded it, so I'm not sure whether it's a valid formation or just part of the pullback. A climb much above 576.30 would be a confirmation of that formation, however, whle a drop much below 572.85, particularly on a 15-minute close, would invalidate it.

Jonathan Levinson : 12/12/2005 1:18:24 PM

Feb. gold has pulled back to a 3.7 gain at 533.90. While this is still a green print so far for the day, it's still 10.70 off its earlier intraday high. That leaves a tall upper doji shadow, and a negative close would result in a gravestone doji for the day.

Jeff Bailey : 12/12/2005 1:18:06 PM

Swing trade put establish stop alert ... Let's raise a stop on the SPX Dec 1,250 Puts (SZP-XJ) to $2.50.

SPX 1,256.49 -0.22% ... SZP-XJ $3.30 x $4.00.

Jeff Bailey : 12/12/2005 1:14:34 PM

01:00 Internals found at this Link

Linda Piazza : 12/12/2005 1:10:41 PM

Five-minute support for the SOX, at 496.79-496.98 on five-minute closes, has become important for the SOX. It's been tested twice in the last hour, springing up from that support both times. Bulls wouldn't like to see it violated ona five-minute close, then.

Jonathan Levinson : 12/12/2005 1:08:48 PM

QQQQ bounces from a low of 41.68. If it's going to bounce, this is where it should commence with a bullish wavelet divergence. I'm letting the short play from 41.88 ride for now, in the hope of catching a 30 min cycle ride to the mid-to-low 41.20 area. Link

Jonathan Levinson : 12/12/2005 1:07:00 PM

Looks like they didn't like the Treasury auction results. Foreign central banks took 9.6B of the 34B total. The 13-week bills sold for a high-rate of 3.82%, median rate 3.79%, yielding 3.911%. Bid to cover was 2.32. On the 26 week bills, the high rate was 4.18% yielding 4.33%, bid to cover 2.11.

Jeff Bailey : 12/12/2005 1:05:18 PM

Sell Program Premium ... SPX 1,256.22 -0.25% ...

Jeff Bailey : 12/12/2005 1:03:53 PM

01:00 Market Watch found at this Link

Linda Piazza : 12/12/2005 1:01:14 PM

Not much progress yet on a H&S for the SOX on its five-minute chart, and currently, the five-minute chart suggests that without a strong push one direction or the other, it's going to chop around for a while in a tight range. I'd expected the SOX to rise closer to 500-501. The SOX does, however, have Keltner resistance at 498.84 on 15-minute closes, with that being the Keltner line that was previously providing support.

Jonathan Levinson : 12/12/2005 12:59:19 PM

Awaiting the Treasury auction results.

Jonathan Levinson : 12/12/2005 12:51:01 PM

Thanks, Linda. We'll see if the lows hold here. Below 41.67, which was old support on the bounce last week, the Qs should attract more sellers as the 30 min cycle downphase kicks in. Link

Jeff Bailey : 12/12/2005 12:48:36 PM

VIX.X 11.69 (unch) now .... Trades WEEKLY Pivot .

SPX 1,257.74 -0.12% ...

SZP-XJ $3.20 x $3.70

Linda Piazza : 12/12/2005 12:47:26 PM

Congratulations on the QQQQ trade, Jonathan. Looks as if it's doing well.

Linda Piazza : 12/12/2005 12:44:23 PM

I still wouldn't be surprised to see the OEX dip into the 571-571.25 zone. Nor would I believe that was a particularly bearish event, as long as that support held on daily closes. It would just look like a dip to retest the descending trendline off the year's high, with that trendline now just below the 30-sma at 571.22. There's much support in the 572-573 region, however, so the dip toward 571-571.25 is far from guaranteed, and I'd be taking steps to protect bearish profits in that region, even if that's just lowering stops.

Jonathan Levinson : 12/12/2005 12:36:35 PM

QQQQ is finding support at lower 30 min channel support. The 30 min channel is starting to roll over, and given that's due for a downphase, the 72 SMA will now provide resistance. If that resistance fails, then our breakeven stop will protect the short play. If it holds, next support should be tested in the 41.67 area, at the 60 min channel bottom which overlaps S1: Link

Marc Eckelberry : 12/12/2005 12:34:55 PM

Buying 23.6% at 10817. Oil backing off a bit and we should bid here, We got a little stop run push below gap, let's see if we can get back above 10830 pivot.

Linda Piazza : 12/12/2005 12:34:02 PM

OEX 15-minute Keltner outlook: The OEX's failure to be able to close above mid-channel resistance looked suspicious this morning, despite all the bullish internals. However, those bullish internals and a mixture of evidence from other indices made it difficult to believe in too much downside, either. The OEX is now testing Keltner support at 574.36 on 15-minute closes. If that doesn't hold, 572.96 looks like a possibility. OEX at 574.03 as I type. If in bearish positions, I'd know ahead of time how I intended to handle that 572-573 zone, if touched, since it's potentially strong support.

Marc Eckelberry : 12/12/2005 12:33:42 PM

YM Entry Point Alert -
Long 10817, stop 10815.

Marc Eckelberry : 12/12/2005 12:33:19 PM

YM Exit Point Alert
Stopped out -10

Jonathan Levinson : 12/12/2005 12:32:31 PM

QQQQ - Stop Loss Adjustment Alert -

QQQQ short from 41.88, lower stop to breakeven

Jeff Bailey : 12/12/2005 12:32:15 PM

Options Calculation for the SPX Dec 1,250 Puts (SZP-XJ) should we see a trade at WEEKLY S1, with VIX.X rising to WEEKLY R1 today (12/12/05). Link

Linda Piazza : 12/12/2005 12:30:49 PM

If the SOX is going to rise into a right shoulder for the potential H&S on its five-minute chart, it probably shouldn't drop too much lower than 498, although one chart suggests that 497-497.20 might be tested before the SOX attempts another rise. SOX at 497.91 as I type.

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

SPX 1,259.19 -0.01% ....

Jeff Bailey : 12/12/2005 12:29:07 PM

Dow Diamonds (DIA) 107.73 (unch) ... trades back to test DAILY Pivot after gap higher open.

Jonathan Levinson : 12/12/2005 12:21:24 PM

QQQQ now tests 72 SMA support at 41.85 as the wavelet reaches oversold territory: Link

Linda Piazza : 12/12/2005 12:21:10 PM

The SOX drifts ever so slowly toward next Keltner support, at 498.16 on 15-minute closes, with next support near 496.43-496.67. It's drifting slowly because it's in the gap zone from this morning. The five-minute chart shows a possibility for a rise, beginning anywhere from the current level to about 498, into a right-shoulder for a H&S with shoulders near 501-501.10. SOX at 499.08.

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

SPX 1,260.12 +0.05% ... slips back under WEEKLY Pivot.

SZP-XJ ... $2.45 x $2.90 ... QCharts' Implied Volatility 0.1167

VIX.X 11.58 -0.94%

Jane Fox : 12/12/2005 12:14:13 PM

MSFT is on a sell signal. Link

Jeff Bailey : 12/12/2005 12:13:13 PM

12:00 Internals found at this Link

Jonathan Levinson : 12/12/2005 12:09:53 PM

Stepping away for a few minutes.

Jonathan Levinson : 12/12/2005 12:09:42 PM

QQQQ finally tests lower short cycle channel support for the 2nd time today, as the wavelet approaches oversold territory. Link

Jonathan Levinson : 12/12/2005 12:07:59 PM

Jane, it's an interesting point. Note that the Fed's 10.5B overnight repo this morning went off at the highest rate submitted of 4.27%. The dealers are paying 4.27% for the Fed's overnight money, while the 13-week bill rate is just 3.81%.

Linda Piazza : 12/12/2005 12:07:49 PM

Bulls couldn't move the OEX above resistance and keep it there. Now bears need to move it below support or else we're just in the same chop. One benchmark might be the five-minute 100/130-ema's at 575.24 and 575.23 on five-minute closes. The OEX is at 575.29 as I type.

Jane Fox : 12/12/2005 12:06:34 PM

As the Fed boosted short-term rates over the last few years long-term rates have not changed a great deal resulting in a flattening yield curve. Many view a flattening yield curve as a predictor of future economic malaise because it means investors are nervous about the short-term so demand more return. However, the Fed has been questioning the reliability of this thought process based on the incredible levels foreigners have been gobbling up US treasuries, which drives bonds prices up and keeps longer term yields down.

You can find any number of analysts to agree that indeed this time it is different and a flattened yield curve is not the precursor it has been in the past and just as many who agree that believing it to be different this time could be disastrous to your investment portfolio.

I'm sure history will bear out that the answer is somewhere in the middle but in the meantime the stock market could be in for some sideways movement, which will be disastrous for both sides.

Linda Piazza : 12/12/2005 12:04:36 PM

The SOX has closed a 15-minute period below the former Keltner support currently at 499.89 on 15-minute closes. That suggests a potential pullback to next Keltner support, currently at 498.24 or perhaps stronger support at 496.60, but only if the SOX remains beneath the former support on 15-minute closes. SOX at 499.54 as I type.

Jeff Bailey : 12/12/2005 12:03:57 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 12/12/2005 12:02:27 PM

Further to the earlier headline on the DOE's long term projections:

WASHINGTON (AP) -- Oil prices are projected to remain well above $50 a barrel for years to come, resulting in a greater shift to more fuel efficient cars and alternative energy sources, according to an analysis released Monday by the Energy Department.

The analysis reflected a sharp change from the department's projections a year ago when it predicted oil prices in constant dollars - not counting normal inflation - would decline to $31 a barrel by 2025.

The report, issued Monday by the department's Energy Information Administration, now projects oil will cost an average $54 a barrel in 2025 and $57 a barrel in 2030 before inflation. Currently, crude oil prices have been hovering around $60 a barrel, briefly soaring as high as $70 earlier this year.

The EIA report, however, projected that natural gas prices, which have soared to more than $14 per thousand cubic feet in recent weeks, would retreat and return to below $5 a thousand cubic feet in the years ahead. It projected a likely price of $4.46 per thousand cubic feet in 2016 as demand for the fuel eases and supplies increase.

I wonder what the DOE would charge for a Dec. 2030 $57 call contract on light sweet crude oil...

Linda Piazza : 12/12/2005 11:56:35 AM

Still plenty of time to go in this 15-minute period, but the SOX currently drops below the Keltner support at 499.96 on 15-minute closes, with this being the first time that it's dropped beneath it by more than a few cents since it stopped consolidating and began climbing off Thursday's low. SOX at 499.54 as I type.

Jeff Bailey : 12/12/2005 11:53:16 AM

SPX ... updated August expire comparison, with current trade and this week's WEEKLY Pivot retracement at this Link

Setup for decline into option expiration comes after prior month's trade of MONTHLY R2.

Linda Piazza : 12/12/2005 11:50:32 AM

TRAN still looks vulnerable to a further decline, perhaps to next Keltner support near 4070-4075, but perhaps not until a bounce up toward 4084-4085. The TRAN is at 4081.84 as I type. The SOX still chops around near its day's high, however, performing opposite of the TRAN, staying above the Keltner support at 500.04 on 15-minute closes. The SOX currently tests that support, though, with the SOX at 500.21. If the SOX loses that support and sees follow-through to the downside, other indices could decline, too, as it's been helping to buoy them.

Jonathan Levinson : 12/12/2005 11:50:29 AM

This sideways range should be the "weightless" period as the 30 and 60 min cycles crest and begin to roll over, but then, this is opex week, and flat extended ranges have a habit of appearing and lasting longer than expected. Link

Jane Fox : 12/12/2005 11:45:43 AM

I probably should have waited until IBM breached the Dec 9th low but it has breached the Dec 8th low so I went for it.

Linda Piazza : 12/12/2005 11:45:31 AM

Advdec line turning down again. It's at potential support but below the 10:44-ish swing low.

Jane Fox : 12/12/2005 11:43:36 AM

I have taken a short in IBM based on this chart. Link

Linda Piazza : 12/12/2005 11:33:56 AM

While I wasn't looking (forgot to set an al-rt), the TRAN broke down out of the rising regression channel in which it had climbed off Thursday's low. The TRAN is now at 4082.36, testing Keltner support, with next support below that at 4074.15 and looking like a possible short-term target for the TRAN.

Linda Piazza : 12/12/2005 11:32:15 AM

SOX testing the Keltner line that's been providing support since the SOX began climbing off its Thursday low. That's at 499.91 on 15-minute closes, with the SOX now at 500.40, having just dropped to 499.99.

Jonathan Levinson : 12/12/2005 11:28:36 AM

That was a crummy entry on the short and a good example of why I hate chasing breakouts. The 41.88 print represented a break of the rising triangle support line on QQQQ, and of couse the second I hit "Post", the 41.88 print dojied up into a fakeout and whipsaw to 41.91. The short cycle and wavelet cycle are both heading lower, but without that trendline break, the chance of getting stopped is uncomfortably high. Day traders can exit here for a .01 loss, while swing traders could widen the stop to just above 42 to allow for more opex churm along the top. I'm going to let the position ride and live with the 41.95 stop- the intraday cycles are still due for a downturn.

Linda Piazza : 12/12/2005 11:25:37 AM

The OEX is still mostly (one exception) closing 15-minute periods below the Keltner line currently at 576.21. It's mostly (one exception) closing 15-minute periods above support at 575.78 on 15-minute closes, too, though.

Linda Piazza : 12/12/2005 11:23:14 AM

Benchmark for the SOX: As long as it's maintaining 15-minute closes above the Keltner line now at 499.90, it's maintaining the upward trend it established as it began climbing off Thursday's low. SOX at 500.77 as I type. It certainly didn't make any progress after confirming that continuation-form inverse H&S at the top of its climb, though, did it? It's back below the neckline. These are never particularly trustworthy as to meeting upside targets, but they can show us these things.

Jonathan Levinson : 12/12/2005 11:21:14 AM

Session high for crude oil, +.95 at 60.35.

Marc Eckelberry : 12/12/2005 11:20:36 AM

I hope some of you stayed in that APR 25 call INTC trade. The option is now at 2.70, for +.75 in one day. All that bearish talk about INTC was just nonsense. Margins are fine and that stock will be trading in the 30's next year.

Jonathan Levinson : 12/12/2005 11:19:33 AM

QQQQ - Entry Point Alert -

Short QQQQ at 41.88 stop 41.95

Jeff Bailey : 12/12/2005 11:13:55 AM

11:00 Internals found at this Link

Linda Piazza : 12/12/2005 11:11:21 AM

When the OEX is adhering fairly well to the boundaries of the mid-sized Keltner channel on the one-minute chart, you know it's range bound. Those boundaries are now from about 575.51 on the downside to 576.23 on the upside. On breakouts, 574.85 is next support on that chart and 576.69 is next resistance. It shouldn't adhere to these boundaries too long--that's just too tight a range--but who knows. No predictions to be seen here as to the direction of the breakout and if I look at other indicator indices, they're predicting opposite directions.

Jeff Bailey : 12/12/2005 11:03:23 AM

11:00 Market Watch found at this Link

Linda Piazza : 12/12/2005 11:00:30 AM

Advdec line now trying to confirm an inverse H&S at the bottom of the descent off the day's high.

Linda Piazza : 12/12/2005 10:58:21 AM

The advdec line's climb is tepid, at best. It's not corroborating much of anything. So far, the OEX continues to find resistance at mid-channel Keltner resistance now at 576.21 on 15-minute closes, although there are still a few minutes left in this 15-minute period. The SOX is trying to lead indices higher, but it may be working mostly alone. The OEX is at 575.93 as I type.

Jonathan Levinson : 12/12/2005 10:58:03 AM

Headlines:

ENERGY DEPT. SAYS CRUDE OIL WILL COST $57/BARREL IN 2030

ENERGY DEPT. RAISES LONG-TERM OIL PRICE BY $21/BARREL

ENERGY DEPT. LOWERS FORECAST FOR GLOBAL OIL PRODUCTION

Jeff Bailey : 12/12/2005 10:56:37 AM

VIX.X 11.48 -1.79% ... session low/high that I show from intra-day chart has been 10.98 just after the open, to 11.60 within the last 15 minutes.

SPX Dec 1,250 Put buyers from this morning want to see that VIX.X get above the WEEKLY Pivot (11.70) and jolt toward correlative DAILY R2/WEEKLY R1.

That might then see SPX 1,249.22.

Jonathan Levinson : 12/12/2005 10:54:28 AM

QQQQ is trading a narrow range along the highs, the short cycle and wavelets becoming opposed as the sideways range holds longer than it should. The session high is a penny away, above which resistance to 42.00 is in play: Link

Jeff Bailey : 12/12/2005 10:53:29 AM

SPY / SPX Options Montage at this Link

Linda Piazza : 12/12/2005 10:52:23 AM

New high on the SOX. If it maintains this, it sets an upside target around 504, from a confirmed continuation-form inverse H&S on the five-minute chart.

Jane Fox : 12/12/2005 10:50:12 AM

VIX is now starting to make some sense in that it is making new daily highs confirming ES's new daily lows. Strange market today.

Linda Piazza : 12/12/2005 10:49:52 AM

TRAN headed down; SOX headed up, over the very short term. Today, the RLX heads up (but possible prints a H&S on the five-minute chart) and the BIX headed down. There is no final direction predicted here.

Linda Piazza : 12/12/2005 10:48:00 AM

TRAN testing the rising regression channel support, with the channel forming as it climbed off Thursday's low and see on the 10- and 15-minute charts. The actual ascending trendline off Thursday's low is now at about 4090.85 if I placed my cursor correctly, and the TRAN is at 4091.45 as I type.

Jonathan Levinson : 12/12/2005 10:46:41 AM

Stepping away for a few minutes- stuck on a call.

Linda Piazza : 12/12/2005 10:46:08 AM

The caveat to my 10:44:59 post is that the SOX so far holds support above a Keltner line currently at 499.07 on 15-minute closes. As long as it's doing that, it's still maintaining its short-term bullish tenor. SOX at 500.15 as I type.

Linda Piazza : 12/12/2005 10:44:59 AM

I'm going to be away for a portion of the morning today, in and out, but I don't see strong evidence of a trade either direction as yet anyway. I'm leaning slightly toward more weakness, but mostly only because there wasn't any follow-through with the overnight bullishness and the bullish opening. That could change in an instant if overhead supply gets absorbed or markets retreat to some slightly lower level from which bulls feel comfortable buying again, so right now, that "leaning slightly toward more weakness" is just markets to test where support lies.

Linda Piazza : 12/12/2005 10:34:03 AM

Once again, the OEX closed a 15-minute period below the mid-channel level, leaving only a candle shadow above it. It's closed every 15-minute period at or below that resistance, now at 576.23 on 15-minute closes, but has pierced it nearly every 15-minute period. Right now, I'm having trouble predicting an outcome. This shows that bulls have the stamina to keep trying, but that so far, supply slightly overwhelms demand, so that the OEX can't quite maintain its breaks above this level. One or the other is going to win, but evidence shows right now that bulls are bears are about evenly matched. OEX at 576.13 as I type. Next resistance at 576.68 and then at 577.41, on 15-minute closes. Next support at 575.70 and then 574.71-575.10 on 15-minute closes.

Jane Fox : 12/12/2005 10:33:34 AM

The VIX is acting really weird today, at least on my TS charts, so I cannot use it as an internal yet. This could be due to OPEX week or just TS's reporting I'm not sure.

Jane Fox : 12/12/2005 10:30:39 AM

WSJ A judge declared a mistrial in the first federal lawsuit over Merck's once-popular painkiller Vioxx. After 18 hours of deliberations over three days, the jury failed to side with the drug maker or the widow of a 53-year-old Florida man who died after taking Vioxx for about a month.

Linda Piazza : 12/12/2005 10:26:47 AM

SOX charging higher, trying to close the gap again. Fifteen-minute Keltner resistance at 500.30-500.78 on 15-minute closes, SOX at 500.20 as I type.

Linda Piazza : 12/12/2005 10:24:49 AM

There's now a potential inverse H&S on the OEX's two-minute chart, but it's a continuation-form one, and the OEX is beginning to take a bit too long to push up through the neckline, perhaps at about 576.86 currently, but still rising. That formation, as untrustworthy as it already is, is going to be invalidated if the OEX doesn't soon rise above the neckline.

Jeff Bailey : 12/12/2005 10:23:29 AM

10:00 Internals found at this Link

Jonathan Levinson : 12/12/2005 10:19:02 AM

Current session low 41.79 QQQQ as the wavelet prints its buy signal. The next high should be a short entry against the short cycle oscillator, provided that it doesn't exceed the previous 41.92 high by much or for long. Link

Linda Piazza : 12/12/2005 10:19:12 AM

SOX coming back up through this morning's gap again. SOX at 499.51 as I type, and so far, it did maintain support at the Keltner line now at 498.23 on 15-minute closes. There's still a lot of time left in this 15-minute period, but at least some will likely be spent testing 500.17-500.44 next Keltner resistance, on 15-minute closes.

Linda Piazza : 12/12/2005 10:17:00 AM

This morning's failure to follow through on early gains was a warning. So far, we don't know whether it was a warning that a minor pullback was impending or something more, but advdec line was climbing (although into resistance, as I mentioned) and the SOX had gapped higher and was tentatively above 500 and all should have been right with the bullish world. There should have been a higher zoom before any pullback, at least in my opinion. If bears don't follow through to the downside, though, bulls are going to try again. One key may be the TRAN, now at 4097.35, still above the rising support of the channel in which it climbed off its Thursday low. So far.

Linda Piazza : 12/12/2005 10:12:39 AM

At 498.82, the SOX has dropped down into this morning's gap higher. The SOX's one-minute chart's formation looks a little like a falling wedge, a bullish formation, so it's possible that the SOX will rise from somewhere in the current level down to about 498.25, rising up to retest resistance. The 15-minute chart now suggests that it's ultimately--either before or after a bounce attempt--going to retest that support now 497.97 on 15-minute closes. A failure to hold that support will be a small change in tenor from the SOX's climb off Thursday's low.

Jonathan Levinson : 12/12/2005 10:12:19 AM

QQQQ tests short cycle and gap support at 41.80 here as the wavelet cycle enters oversold territory. Link

Jonathan Levinson : 12/12/2005 10:11:35 AM

Volume breadth +2.2:1 on the NYSE, +1.6:1 on the Nasdaq.

Linda Piazza : 12/12/2005 10:09:33 AM

The TRAN is dropping through its rising regression channel off Thursday's low. It's now testing 4100, and may try to steady there. The bottom of its rising regression channel is at about 4091.10 according to QCharts, but the actual rising trendline off Thursday's low is at about 4089.30. The TRAN is at 4097.74 as I type.

Jonathan Levinson : 12/12/2005 10:05:45 AM

Headlines:

REPORTS SAY MISTRIAL DECLARED IN MERCK'S FEDERAL VIOXX CASE

MRK -1.61% at 28.66.

Linda Piazza : 12/12/2005 10:04:26 AM

OEX Keltner picture: The OEX still can't close 15-minute periods above the Keltner resistance at 576.23-576.57, suggesting that test of 575.01-575.48 next support that I mentioned earlier (although the numbers were slightly different then).

Jeff Bailey : 12/12/2005 10:03:51 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 12/12/2005 10:03:37 AM

Headlines:

10:01am JAN CRUDE CLIMBS 86C TO $60.25/BRL IN EARLY NY TRADING

10:01am JAN NATURAL GAS RISES 55.8C, OR 3.8%, TO $14.86/MLN BTUS

Linda Piazza : 12/12/2005 10:02:21 AM

SOX tests 499.92-500.15 support on 15-minute closes, closing right on that support during the just-completed 15-minute period. The SOX may be dropping a little below that support as I type, but not precipitously as yet. Looks like a pullback or sideways trading is in order. As long as the SOX maintains 15-minute closes above the Keltner line currently at 498.11, it's maintaining its trend since beginning to climb off last week's lows, but a close below that would question the trend. SOX at 499.31 as I type.

Jonathan Levinson : 12/12/2005 10:02:05 AM

QQQQ's short cycle still rises, the wavelet downphase so far hesitant and gradual. If this is just a downside correction, it should be setting the stage for one last test of the short cycle highs. If not, then a break of 41.80 would set the stage for a gap fill. Link

Linda Piazza : 12/12/2005 9:59:32 AM

The advdec line is so far finding resistance at the Keltner resistance at 1875-2100 on 15-minute closes, with the advdec line at 1587 as I type.

Jeff Bailey : 12/12/2005 9:58:04 AM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 12/12/2005 9:57:36 AM

Volume breadth down to +2.8:1 on the NYSE, +1.9:1 on the Nasdaq.

Linda Piazza : 12/12/2005 9:55:39 AM

I'm frankly surprised that gains aren't bigger than they are, and that there's the even minimal hesitations that we're seeing. It's making me wonder a bit, in fact, about whether we're not seeing some selling into the gains. That doesn't mean that markets are necessarily going to roll over. That depends entirely on whether there's enough demand to soak up the supply being off-loaded, but it's making me a bit hesitant about proclaiming that bulls are going to be supreme all day.

Jonathan Levinson : 12/12/2005 9:53:13 AM

A huge 10.5B overnight repo from the Fed for a net 5B add. But the stopout rate rose to 4.27%, 2 bps against an anticipated 4.25% overnight target to be announced at the FOMC meeting, showing a rising demand for the money on the part of the Fed's dealers.

Jonathan Levinson : 12/12/2005 9:51:31 AM

Session low for ten year notes at 108 11/32, TNX up to a .2 bp loss at 4.535%, still steeper against IRX, -1.7 bps at 3.825%.

Linda Piazza : 12/12/2005 9:51:06 AM

Advdec line headed higher again.

Linda Piazza : 12/12/2005 9:50:53 AM

The OEX closed the first 15-minute period below first-encountered Keltner resistance, but it's pushing back above it as I type, pushing a few cents above the previous high of the day, but essentially testing it. It's not through testing that resistance from 576.24-576.63 with next resistance at 577.36. Bears want to see another 15-minute close beneath this resistance, also near resistance of several other types. The OEX has dropped back to 576.29 as I typed.

Linda Piazza : 12/12/2005 9:48:19 AM

The SOX looks as if it's likely to form a doji for its first 15-minute candle--just did. This doji sits at the top of a steep rise off last week's low, right at the 61.8% retracement of the decline from last week's high into last week's low. Classically, if this were a true reversal signal, the SOX would be declining right now, but it's not. It's still finding support at the Keltner support at 499.94-499.76 on 15-minute closes and is currently trying for a new high of the day, although perhaps having some difficulty achieving it. Bears need to see 15-minute closes beneath a Keltner line currently at 497.83 before there's even the mildest change in tenor. I'm not sure about the SOX. There are still many mixed signals.

Marc Eckelberry : 12/12/2005 9:48:18 AM

INTC is rocking above the 20 dma again and the option trade is now up 35% to 2.60.

Jonathan Levinson : 12/12/2005 9:46:23 AM

The Fed has 5.5B in expiring repos to cover this AM. The announcement is due just before 10AM.

Linda Piazza : 12/12/2005 9:44:48 AM

So far, the OEX's first 15-minute Keltner resistance encountered is holding as resistance. This is important mid-channel resistance, which means that the OEX so far remains within the bottom half of its nested Keltner channels. If this continues to hold into the close of this period, it's possible that the OEX could drop to retest 574.93-575.25 support,although it's possible and perhaps even likely that support could come in a bit higher than that, perhaps closer to 565.60. OEX at 576.15 as I type, still testing.

Jonathan Levinson : 12/12/2005 9:41:48 AM

QQQQ blown up to the 41.90-42.00 confluence zone at Thursday's highs. There are bearish divergences on the short cycle indicators near what should be 30/60 min cycle tops, but we've seen those divergences fail regularly during the past month. Swing shorts will look to place stops just above 42. Link

Linda Piazza : 12/12/2005 9:41:34 AM

Slight advdec line hesitation near 2125 resistance, with the advdec line now at 1965 and turning lower.

Linda Piazza : 12/12/2005 9:40:13 AM

The OEX still tests 15-minute resistance at 576.24-576.61 on 15-minute closes, with the OEX currently at 576.31. Next Keltner resistance above that at 577.36.

Linda Piazza : 12/12/2005 9:38:56 AM

The SOX has been adhering fairly well to S/R levels on its 15-minute Keltner chart. This morning's gap was above the resistance currently at 499.45-499.60. SOX bulls want to see the SOX maintain those levels into the first 15-minute close. Otherwise, they look like resistance rather than support. So far, with the SOX at 500.85, they're holding as support.

Jonathan Levinson : 12/12/2005 9:37:44 AM

Volume breadth still strong, +3.4:1 on the NYSE, +3.6:1 on the Nasdaq.

Jeff Bailey : 12/12/2005 9:37:04 AM

Swing trade put filled alert for the SPX Dec. 1,250 Put (SZP-XJ) at $2.05.

SPX 1,263.78 +0.35% ....

Jonathan Levinson : 12/12/2005 9:35:06 AM

QQQQ 30/60 min resistance is at 41.78-41.89, a wide range caused by the gap up open, support 41.48-41.56, with 72 SMA support at 41.66. Link

Linda Piazza : 12/12/2005 9:34:25 AM

The SOX has leaped all the way up to test that 61.8% retracement of the decline from last week's high into last week's low. It's now retreating just a bit, still in the right-shoulder level for a potential H&S, but it just can't climb too much higher without risking invalidating that formation. SOX at 500.20 as I type.

Linda Piazza : 12/12/2005 9:32:46 AM

As expected, the OEX has totally invalidated that little H&S visible on its 5-minute chart, and it's climbed all the way into resistance at 576.24 on 15-minute closes. Next resistance at 577.33 on 15-minute closes. Watching to see what happens next.

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

Volume breadth is +2.4:1 on the NYSE, +4.2:1 on the Nasdaq at the open.

Marc Eckelberry : 12/12/2005 9:33:25 AM

Alert: Raise the stop on INTC APR 25 call to 1.95, break -even. Now trading at 2.50.

Linda Piazza : 12/12/2005 9:31:40 AM

Advdec line opens at support and climbs toward resistance, but so far, climbs strongly. Upward bias, as expected. Now, will it last?

Linda Piazza : 12/12/2005 9:27:11 AM

Just noted that the SOX also ended the week right below the 50% retracement of the decline off the week's high into the week's low, with that 50% level at 497.31. The 61.8% retracement is at about 500.45, although there are some little swing highs at 500.56-500.66, so that I'd consider hitting them as part of a test of that 61.8% retracement. The SOX's climb off that low has looked a bit corrective, but I just have the feeling that we have to consider everything as starting over this morning and see what occurs. The SOX presented conflicing views, with a potential exhaustion gap that was tested, unlike its other gaps during this rally, but with prices springing back above that gap. There's been no daily close below it.

Linda Piazza : 12/12/2005 9:04:36 AM

The SOX ended the week with a potential H&S visible on its 30- and 60-minute charts. I showed the chart in my Trader's Corner article this weekend. There was bearish divergence as the head was formed at last week's high, but if the SOX climbs much past 502.80, it's going to invalidate that formation, and may even be risking it, if it climbs much higher than its 497.22 close. Watch the SOX this morning.

Linda Piazza : 12/12/2005 9:00:15 AM

The OEX ended Friday and last week having just confirmed a H&S on its five-minute chart, when it broke below 575. We're going to have to take a new look at the action today to see if that little H&S formation meant anything, but futures currently suggest that it didn't. As I mentioned late Friday afternoon, the OEX still could be considered to be roughly holding to a descending regression channel on its daily chart, a possible bull flag with boundaries roughly at 572 on the bottom and 579.35 on the top, with a couple of spikes outside that formation. The OEX is currently below the midline of that formation, seeming to find resistance there, and also closed the week below the 577-578.40-ish long-term support/resistance level.

As I said Friday, there just isn't a lot of clarity right now as to whether the OEX is more likely to round down through that regression channel again or push up, at least further into the 577-578.40 level and perhaps to 579.13. Friday's close suggested one possibility as being more likely and today's futures' levels suggests another. If the OEX should rise again into that 577-578.40 region, it should be watched for rollover possibilities, but the first place to be watched is 574.86 on 30-minute closes and 575.12 resistance on 15-minute closes.

The daily close beneath both the 10-sma and the 21-sma, and even the 23.6% retracement level that Marc often watches suggests a further pullback, perhaps toward the descending trendline off the year's high, now at about 570.80, now converging with the 30-sma at 570.56, but if that pullback is going to occur, it's likely going to occur after an early bounce. As charts were set up Friday, it looked possible that the pullback could even take the OEX to the 38.2% retracement of the rally, at about 568.60, but if there is a pullback, the 572.60 should be watched closely for potential support before the OEX ever gets near 570.60-570.80 or even lower.

At the close last week, the best bet appeared to be that the OEX would move lower this morning, but the Nikkei's huge rise carried futures higher with it overnight and Jim's Wrap this weekend pointed out a more bullish possible scenario for early this week. We're going to have to see how the bounce looks this morning.

Jane Fox : 12/12/2005 8:55:25 AM

Dateline WSJ A split has developed within the entertainment industry as several major cable operators signaled their willingness to give in to regulatory pressure by providing a so-called family-friendly package of programming, despite resistance from many cable programmers.

The nation's two largest cable operators, Comcast Corp. and Time Warner Inc., indicated they are considering creating a "tier" of cable channels that would exclude channels airing risque programs. Two smaller operators, Cox Communications Inc. and Insight Communications Co., hinted they are ready to do the same.

Jane Fox : 12/12/2005 8:52:54 AM

Dateline WSJ ConocoPhillips is in advanced talks to purchase oil and gas producer Burlington Resources Inc. for more than $30 billion, people familiar with the matter say, in what would be a major bet that supplies of natural gas will remain tight and prices high for years to come.

This would be the largest oil-field deal in the past several years. The talks are still fluid, these people warn, and could fall apart. But should the discussions stay on track, a deal could be announced this week.

Jonathan Levinson : 12/12/2005 8:46:36 AM

QQQQ's 30 and 60 min cycles are pointed north, while a short cycle downphase has been playing out overnight from a higher high above Friday's range. Unless it breaks sharply lower at the open, my guess is that this short cycle downphase is corrective within the broader 30/60 min cycle upphases. I will update the channel and SMA levels at the open when they refresh.

Jonathan Levinson : 12/12/2005 8:21:50 AM

Ten year notes trade session highs at 108 31/64, up 5/32, with TNX quoted -4.1 bps at 4.496% here.

Jonathan Levinson : 12/12/2005 7:45:56 AM

Equities are up, ES trading 1272.5, NQ 1717.5, YM 10873 and QQQQ +.18 at 41.89. Gold is up 10.60 to 540.80, silver is up .216 to 9.31, ten year notes +3/64 to 108 25/64, crude oil is up .75 to 60.15 and natgas is up .39 to 14.70.

We await the 2PM release of the Treasury budget, est. -61B.

Linda Piazza : 12/12/2005 7:26:05 AM

Good morning. The Nikkei posted a more-than-300-point gain again last night, and brought other Asian bourses higher with it. European bourses gain, too, despite a massive fire in England after the explosion at the Buncefield oil depot. As of 7:11 EST, gold had gained $10.90 to trade at $541.10, and crude, $0.60 to trade at $59.99. Overnight reports indicated that OPEC has reached an agreement to maintain the existing quotas and says that capacity could expand next year, but there were hints that production could be cut in 2006. More details about Asian and European markets follow in succeeding paragraphs.

Three-hundred-point gains are going to become the usual thing on the Nikkei. The Nikkei had hit a 300-point gain within the first hour of the open. In the next hour, it had added more than 350 points and was at yet-another new five-year high. It spent the rest of the day in a 100-point range, beginning to be a rather narrow range for the wildly swinging Nikkei, and it closed higher by 334.65 points or 2.17%, at 15,738.70.

Before the open, Japan's domestic CGPI (corporate goods price index) for November showed a flat month-over-month figure, but a 1.9% year-over-year rise. The number was lower than the published forecasts, as was October's current account surplus, released separately. Some still termed it in line with expectations since the month-over-month number was measured against a revised-higher October number. All in all, it revealed that the prices of finished goods are showing some increases for the first time in almost nine years. During the day, Japan's November consumer confidence was released, rising to 48.2 from October's 47.9.

Banks led early gains after the Tokyo Stock Exchange admitted that it, too, was partially responsible for the debacle last week. When the brokerage unit of Mizuho Financial Group Inc. realized two minutes after placing that 610,000-share sell order that it had made a mistake, it tried four times to cancel the order, but was not successful in doing so, with that lack of success attributed in part to problems with the Tokyo Stock Exchange.

Other Asian markets gained, too. The Taiwan Weighted rose 0.03%, and South Korea's Kospi climbed 1.20%. Singapore's Straits Times gained 0.44%, and Hong Kong's Hang Seng increased by 0.50%. China's Shanghai Composite rose 0.26%. In China, the consumer price index climbed 1.8% year over year. Roche Holdings has granted the first sub-license related to Tamiflu, to Chinese partner Shanghai Pharmaceutical Group.

European markets post gains, with one headline crediting French media companies as buoying sentiment and sending equity prices higher throughout the region. Vivendi confirmed that it's in talks with rival TPS to combine its Canal Plus pay-TV business with its rival's. In other developments, last night, explosions hit the U.K.'s Buncefield oil depot, with France's Total and Chevron Texaco owners of the field. The U.K. Petroleum Industry Association has asked that motorists not engage in "panic buying" of gasoline. The Petrol Retailers Association said that the site wasn't critically important and said that there shouldn't be a market effect. At first, it was feared that the explosion might have been related to terrorists' activities, but now officials look to a probable accidental cause.

In other news in the U.K., figures released over the weekend revealed that the average asking price for homes in the U.K. declined 0.8%, according to the Rightmove survey, with the survey covering a period from November 13-December 3. For next year, Rightmove expects some price inflation, to about 4%, but that gains would be capped at average wage inflation. Also in the U.K., November's input prices rose more than expected, by 1.4% month over month against expectations that the number would fall 0.2%. Year over year, the rise was 12.5% from a revised-higher October prices. Output prices fell 0.2%, a better-than-expected result. Year over year, the increase moderated, as it did with the core output index. Fuel was of course partly responsible for the higher input prices. In yet-another release, the October ODPM HPI (housing price index) moderated sharply, as one source characterized the report. The U.K.'s CBI industrial trends survey showed falling factory orders, but orders that fell at a lower pace than had been feared, so that the results were characterized as better than expected. However, the export outlook deteriorated, a concerning result.

My usual quote source is in error again as it was once last week, so I won't be giving full information for European bourses. However, as of 7:11 EST, the FTSE 100 was higher by 15.60 points; the CAC 40, by 28.62; and the DAX by 37.03.

Market Monitor Archives