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Jeff Bailey : 12/14/2005 1:59:10 AM

U.S. Dollar Index (dx00y) 89.94 and has seen overnight low of 89.85, thus MONTHLY S1.

e-mini S&P (es06h) down 1.75 points at 1,275.25.

December Gold (gc05z) down $6.00 at $515.00.

Jeff Bailey : 12/14/2005 2:08:13 AM

Precious Metals Bull % (BPPREC) from Dorsey/Wright at this Link ... Somtimes, the O is "all about the gOld." That's a commercial slogan from Overstock.com regarding their jewelry offerings.

Today, Tab Gilles and I chatted a bit in the MM regarding "what is driving gold?" Is it the demand for jewelry? Is there perhaps some seasonality to precious metals stocks that builds strength into December (C on a PnF chart)? When did the U.S. come out of its last recession? Do lower income people buy gold jewelry?

I don't know of any "seasonal" buying of gold by central banks.

Hedge a currency?


A commodity play during oil's decline from $70?

From a bear's perspective, I'd have to think a bear is counting on a reversal from this 72% level of bullishness, maybe things a little overbought. A bear is certainly hoping that the other 27.12% of stocks don't all find PnF buy signals anytime soon.

If so, then NEM may juuuust be starting to break out of a rather large base, where BLUE conventional 100% at $50.28 marks the breakout.

Jeff Bailey : 12/14/2005 1:32:41 AM

Newmont Mining (NEM) ... now with same conventional BLUE, but a new "bull fit 38.2" PINK at this Link ... If shorting NEM for an op-ex play, then looking to cover back into the $47.30-$48.05 zone.

BIG volume exit by smart bulls on Monday? Yeah, maybe, but would think twice, thrice on a close above $52.05.

Jeff Bailey : 12/14/2005 1:17:02 AM

Newmont Mining (NEM) PnF chart at this Link ... Yes, NEM didn't trade $42.00 in early November, but Stockcharts.com subtracts a stock's dividend (penalizes), thus it looks like NEM did trade $42.00. Dorsey/Wright doesn't subtract a dividend payment ($0.40 per share each year) so their chart doesn't show a trade at $42.00.

Now... here's a NEM bar chart with conventional BLUE and a "bull fit 38.2%" GREEN at this Link

I make some IMPORTANT notes as to current sector reading, and while 72% is "overbought" above the 70% level, this sector bullish % did reach 92% bullish in December 2003/January 2004. See NEM conventional 100% at $50.28.

Now, I'm not overly pleased with how NEM has traded against the GREEN bull fit, other than shorts getting their heads handed to them on the close above $48.62.

Why did NEM stop at $48.00 in late September? Let's mark that level with a new PINK bull fit. See what we can come up with... if anything.

Jeff Bailey : 12/14/2005 12:44:18 AM

Question regarding NEM and Op-ex ... Jeff, As an ardent follower of op-ex pinning, do you have any thoughts about NEM this week.

I am one of those bold enough to short gold via NEM, not a big position, but an interesting one. Thanks for this, and as always your astute observations throughout the day on MM.

Sincerely, Dan

OK Dan ... here we go. How about a Friday close at NEM's WEEKLY Pivot of $49.04?

Now, pretend YOU are the options market maker. You want to inflict as much "Max Pain" as you can on the Open Interest. Be careful! You don't wan't to inflict too much pain (up/down) so that you get too much of a call, or put in the money. You want to try and pin a Friday close, in between it all.

Here's the NEM option Montage. Same type of excercise we've been doing on the SPX option chain. Looking for the Open Interest, knowing where it is at. I look at what is IN, what is OUT, and what is AT. HEAVIEST OI is $45.00 put/call, so let's make that some solid support. Hey, GG is "thinner" and easier to move around, but with NEM, you're trying to push around the big gun, and there's some ardent gold bug bulls that may not let you get away with a push that low into Friday's close.

OK, the $55 Calls are now OUT the money and an options market maker hasn't hurt him/herself all that much as there's just 3,837 puts at the $55 strike.

Who is next? $50.00. Yes... got some action in the $55 Calls today (10,434) with that move lower to $49.51. Let's assume those are "weak hands." Yes .... the $50 puts got some action too at 5,051 and OI 11,430. Put longs or NAKED puts? We don't know for certain do we?

No, but if we're going to play the "pretend your an options market maker" and we're pretending we're the market maker, then we assume all calls and puts were BOUGHT from us, and you and I are NAKED options market maker.

$47.50 ... Now we're getting into a steep decline aren't we? What happens here? Those $50 PUT LONGS start making some money. Yes, YOU wipe out the $50 CALL LONGS, but now the $50 puts you are NAKED have appreciated with a lower move to $47.50.

The PINK arrow, between $47.50 and $50.00. That's my eyeball area for some type of "Max Pain" settle.

Here's the option montage at this Link

Jeff Bailey : 12/13/2005 10:54:00 PM

OK .... Keene's e-mini settlement is 0.25 different than what I used. CME does note that a 0.25 difference isn't uncommon. Here's where I usually go to get e-mini settlement as well as CME's explanation for rounding "error" Link

Jeff Bailey : 12/13/2005 10:48:30 PM

es06h ... floor trade only, now the QCharts' WEEKLY and DAILY Pivot Levels turned on at this Link ... If YOU are short the es from, say 1,270, where might YOU look to cover on a pullback?

Yep, I'm thinking same thing.

If WEEKLY Pivot traded, then will look to CLOSE OUT 1/2 of the SPX Dec 1,255 puts at SPX weekly Pivot.

A lot needs to happen between now and then.

Jeff Bailey : 12/13/2005 10:24:11 PM

es06h floor trade only, with WEEKLY Pivot Levels turned on at this Link

Jeff Bailey : 12/13/2005 10:09:30 PM

I don't see them, but I punched the number in as h/l/s of 1,281.50 , 1,267.25 , 1,277.00 and get 1,261.00, 1,269.00, Piv= 1,275.25, 1,283.25, 1,289.50.

QCharts' WEEKLY Pivot Levels are ... 1,246.50, 1,257.00, Piv= 1,269.75, 1,280.25, 1,293.00.

Jeff Bailey : 12/13/2005 10:01:14 PM

e-mini S&P (es06h) settled at 1,277.00 and I've got them down 0.75 at 1,276.25.

Has Keene posted tomorrow's DAILY Pivot Levels?

OI Technical Staff : 12/13/2005 9:59:59 PM

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Jeff Bailey : 12/13/2005 9:59:06 PM

U.S. Dollar Index (dx00y) now 89.84, and well below tomorrow's DAILY S2.

Two thought here. One is that foreign capital may be exiting the greenback and perhaps U.S. assets?

The second thought is that the "only asset" that foreign capital is leaving may be bonds, where based on any FOMC comments, foreign capital thinks the Fed is done.

Let's check equity futures and see what is going on.

Jeff Bailey : 12/13/2005 9:55:49 PM

SPX and Dec 1,255 puts chart montage at this Link

This chart comparison should show traders how difficult it can be to "predict" what an option is going to trade at, based on implied volatility. We were filled wel before the SPX traded WEEKLY R1.

When SPX did trade WEEKLY R1, volatility was rising (see my VIX.X notes today) and this option contract still fell to $1.00.

Two days ago (now 1/2 the time until Thursday's close) this option traded its WEEKLY Pivot. One fact I do know, is that we are two days away from the SPX option expire. Half of 5.40-$5.96 is about $3.00, thus an eyeball target of $3.10 should SPX trade WEEKLY Pivot. I'm assuming such a trade would have volatility measures rising.

Note: Remember on Monday, when I commented that the VIX.X had breached its WEEKLY Pivot, but was finding resistance at its DAILY Pivot? (12/12/05 12:48:36 and 01:43:56 and 01:58:26)

Now perhaps, we know the rest of the story.

What does VIX.X need to do tomorrow morning for an SPX 1,255 put holder? Yep, hold ABOVE its DAILY Pivot of 11.09, and shoot toward WEEKLY R1.

Jeff Bailey : 12/13/2005 9:23:07 PM

Recap/Observations of Monday's SPX 1,250 Put trade at this Link ... Is it just me, or do things happen at the top of an hour? Anyway, I "missed" a double yesterday, and don't want that to happen again if I can help it. It is sooooo difficult to try and predict what an option's price will be (based on that minutes implied volatility) that all a trader can try to do is punch in some price levels, perhaps use the VIX readings, to come up with an option price target. It is still guess work at best. For many of us, our broker only allows us to place one sell order (a stop or a profit exit point). I have the feeling, based on the historical work we've done leading up to this week, that SPX WEEKLY R1 needs to be "the resistance" for a put trader, or DIVERGENCE to the past would then present itself.

Chart of SPX and the Dec. 1,250 put are shown on 5-minute intervals.

On the SPX chart, I've also placed tomorrow's DAILY Pivot, DAILY S1 and DAILY S2. This is for PUT traders that may have taken my trade today.

I did NOT profile the trade based on anything the FOMC said, or didn't say. It has been an observation of mine, that of late, equities (and gold for that matter) have tended to follow the dollar around. The option work we've been doing for the SPX, has hinted of a "gravitational pull" lower.

Still, the 5-minute chart of the SPX may show that WEEKLY Pivot is a point of great contention.

Continued, but now with SPX 1,255 puts

Jeff Bailey : 12/13/2005 8:20:12 PM

S&P 500 Options Montage 12/13/05 Close at this Link

Options Calculator for SPX using the closing QCharts Implied Volatility reading for the Dec 1,255 Puts of 12.86 at this Link

Jeff Bailey : 12/13/2005 7:33:04 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... Swing trade closed out the naked puts on Goldcorp GG Dec $20 Puts (GG-XD) at the offer of $0.10. ($+0.10, or +50.00%)

Swing traded long the S&P 500 SPX Dec. 1,255 Puts (SZP-XK) at $1.40. Stop has been established at $0.70, with a target to sell if they trade $3.10.

Jeff Bailey : 12/13/2005 6:46:52 PM

Guitar George checks in on APA $72.16 +1.44%, which did fade after trading that $73.96 level (see 09:39:45 and 01:24:38).

Thanks Jeff, we made a little lunch money on APA. I am having monitor problems today. Lost color on one of them, I think it is a pin, and will have to try and patch it, with a kit or scrap it, if that doesn't work. Remember the days when they made stuff that lasts for awhile. Have a good one guys, and thanks Jeff.

Guitar George

George had asked a question on APA back on 12/09/05 at 02:04:19 Link

Jeff Bailey : 12/13/2005 6:25:55 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/13/2005 6:16:47 PM

Temperatures at 04:12 PM EST with January Nat. Gas and Heating Oil futures benchmarks at this Link

Jeff Bailey : 12/13/2005 5:59:19 PM

Closing Internals found at this Link ... Heavy volume at the big board, and brisk at the NASDAQ.

Notable NYSE NH/NL readings today. See today's MM at 11:25:36 for possible explanation of NYSE new lows.

Jeff Bailey : 12/13/2005 5:33:35 PM

Pivot Matrix for tomorrow found at this Link ... I note the DAILY R1/WEEKLY R1 correlations for the QQQQ/NDX.

As I look around at various options chains and tie to some past observations, $0.20-$0.25 either side of a round number keeps showing up in the QQQQ. Yes .... even last month's MONTHLY R2 of $41.24, which the QQQQ has refused to break below. A naked call seller that can't afford, or doesn't trade YM futures, then $0.30 might be a stop?

Today, Goldcorp (GG) $20.53 -0.24% was lower at the open, and the Dec. $20 Puts traded $0.20. "When in doubt, get out" at $0.10 if naked?

Jeff Bailey : 12/13/2005 4:14:06 PM

SPX goes out at 1,267.43 +0.55% ... DAILY Pivot Levels for tomorrow are ... 1,252.48, 1,259.96, Piv= 1,266.03, 1,273.51, 1,279.68.

Linda Piazza : 12/13/2005 3:59:41 PM

Dell: Big volume compared to last several days, sharp pullback from high. That suggests that no only was I right about being careful to protect longs, but Marc was about exiting. Not proof, but certainly supportive of the idea.

Jeff Bailey : 12/13/2005 3:47:57 PM

SPX Most Actives at this Link ... I had sorted by most active just prior to the FOMC news. For most part, I haven't noticed any particular option jumping in activity. Pretty much same sort order as 02:10 PM EST.

Linda Piazza : 12/13/2005 3:45:49 PM

End-of-day thoughts for the OEX: If the OEX should end the day below 578, it will have retraced more than 1/2 of the post-Fed announcement zoom, leading to the suspicion that it was just that--a post-Fed zoom, soon reversed. If it should end the day below 577, it will have moved back below that 577-578.40-ish S/R zone long marked on my charts. I don't think those are bullish events, and bulls really don't want to see the OEX leave a long upper candle today that again pierced the possible bear flag resistance on the daily chart, but with a candle that closed back inside that formation. Such a candle was produced on 12/06, for example, although the OEX pulled back much further inside the possible flag than it's done so far today. It's at the upper boundary of that flag as I type, at about 578.90.

Balance this against the OEX's near retreat down to test the descending trendline off the March high and then bounce back up through that descending trendline again. There is still mixed evidence and no assurance this time that the OEX will pull back through that channel, despite that long upper shadow (assuming it's still there at the close), but the day's action overall was not bullish, I don't believe, and certainly won't be if the OEX should retreat below 577-577.40 again by the close. That doesn't look likely as I type, but it's possible.

Jeff Bailey : 12/13/2005 3:42:16 PM

Swing trade put establish stop alert ... for the S&P 500 SPX Dec. 1,255 Puts (SZP-XK) at $0.70.

The thought being that if we are going to see any SIMILARITY to August trade (FOMC and expiration), then after a trade at WEEKLY R1, the SPX should not go back above.

2 days until SPX option expire

Jonathan Levinson : 12/13/2005 3:36:36 PM

Nasdaq volume breadth down to -1.02:1, neutral as QQQQ works on 42.00 support.

Jeff Bailey : 12/13/2005 3:35:49 PM

SZP-XK seeing 100 go off at $1.70. $1.50 x $1.90.

SPX 1,267.16

Linda Piazza : 12/13/2005 3:33:29 PM

On a 15-minute Keltner basis, the OEX tests S/R at 577.98-578.21 on a 15-minute closing basis, with the OEX at 578.01. If it drops through this, it has a long fall to next 15-minute support, as well as to next 10-minute. I'd watching for potential support in the 577.15 region, but if this decline gets going too fast, bulls are going to bail. Right now, the OEX has retraced about 50% of the post-Fed zoom higher, with that at about 578 or so. This could be a bounce point.

Linda Piazza : 12/13/2005 3:30:30 PM

OEX confirmed a H&S on its three-minute chart. Of course, that's competing with a much larger inverse H&S confirmed just prior to the Fed announcement, but I never trusted that one too mcuh. Still, we shold look for potential support, should that pre-Fed level be tested again.

Linda Piazza : 12/13/2005 3:26:49 PM

The SOX is trying to bounce, trying to avoid a confirmation of a double-top formation. Actually there was a slightly higher high on the second SOX push, not much, but perhaps enough to crease a potential H&S on the three-minute chart. Still needs a right shoulder, if so. Bears would like to see that right shoulder stop at 505.07-505.36, although it could go a little higher and not invalidate the formation as long as it was quickly slapped back. SOX at 504.22 as I type.

Jonathan Levinson : 12/13/2005 3:25:52 PM

Nasdaq volume breadth down to +1.04:1 as QQQQ tests support at 42.00-42.03. Possible head and shoulders at the highs, making that a neckline- but volume is falling on the decline here, and price continues to respect new support at old resistance. Link

Linda Piazza : 12/13/2005 3:23:56 PM

That SOX support at 503.74-503.82 on 10-minute closes still looks relatively strong, but we're about to see. SOX at 503.90 as I type.

Linda Piazza : 12/13/2005 3:23:02 PM

The OEX came right down to where it should for a neckline for a possible H&S and then it started bouncing. Now we'll have to see what it does. See my 3:13:48 post for numbers and explanation.

Marc Eckelberry : 12/13/2005 3:23:13 PM

Bearish divergences, NAZ ad line red and opex makes me step out for now. I will buy INTC again on a pullback.

Jonathan Levinson : 12/13/2005 3:22:17 PM

Session low for Feb gold at 522, -9.50. Silver is down .308 or 3.47% at 8.57.

Marc Eckelberry : 12/13/2005 3:21:16 PM

EXIT INTC APR 25 call at 2.65 for +0.70 (+35%)

Jeff Bailey : 12/13/2005 3:21:01 PM

SZP-XK $1.15 x $1.65

Jeff Bailey : 12/13/2005 3:20:36 PM

SPX 1,268.92 +0.67% ... since moving above DAILY R2, has been sitting on top since.

Linda Piazza : 12/13/2005 3:20:22 PM

I said earlier that the SOX's 10-minute chart didn't look healthy and that it looked as if it needed to retreat to next support. That's currently at 503.63-503.75 on 10-minute closes, and the SOX just hit a low of 503.97 before attempting this little bounce. Bears need to see the SOX drop below that next 10-minute support zone or else this was just a pullback to support before trying again.

Jeff Bailey : 12/13/2005 3:19:02 PM

S&P Banks Index (BIX.X) 366.87 +1.73% ... do see trade at WEEKLY R1. Some hint perhaps that today's "Fed speak" holds some thoughts that Fed is nearing an end to hikes.

Day by day.

Linda Piazza : 12/13/2005 3:18:06 PM

GE still within that potential bearish right triangle on its daily chart, the one I've been mentioning all day. Thanks to Jonathan to keeping us up to speed on the announcement, with Jeff and Jane also always doing a good job of that. That potentially bearish formation makes me think that someone already knew what was developing. It hasn't been confirmed. I've got an al-rt set for 35.25, but it hasn't sounded yet.

Jonathan Levinson : 12/13/2005 3:14:48 PM

Reuters reports that previous EPS estimates for GE in 2006 were $2 on revenue of $171.2B, and so today's announcement represents a lowering of the range to EPS of $1.92-2.02 on $165B revenue.

GE is up to a .10 loss at 35.45.

Linda Piazza : 12/13/2005 3:13:47 PM

Sigh. Shall I mention the potential H&S that the OEX builds on its 5-minute chart? Drop to about 578.18-578.45, rise to somewhere near or below 579.85 and then a rollover from there through the 578 level would confirm it. Or, the OEX could rise from here into a slightly higher right shoulder and then round down. Does it mean anything? We have to wait to see.

Jeff Bailey : 12/13/2005 3:12:22 PM

03:00 Internals found at this Link

Linda Piazza : 12/13/2005 3:10:33 PM

If you look at the SOX on a 10-minute chart, these post FOMC candles do not look bullish. On that chart, the SOX looks vulnerable to 503.70. SOX at 504.68 as I type.

Jonathan Levinson : 12/13/2005 3:09:53 PM





GE trades -.12 at 35.43 here, 8 cents off the session low.

Jonathan Levinson : 12/13/2005 3:05:01 PM

Looks like a bear wedge breakdown taking place on the Qs, with an implied target of 42, a retest of support. It held when first tested an hour ago. Link

Linda Piazza : 12/13/2005 3:04:29 PM

SOX dropping harder now. I wouldn't be surprised to see if find support somewhere between 503.25 and its current 504.48 level.

Linda Piazza : 12/13/2005 3:03:38 PM

The OEX has been bouncing even harder and faster, from 2-minute Keltner support now at 579.69, with the OEX now at 579.48, below that. Just the slightest change in tenor.

Linda Piazza : 12/13/2005 3:02:50 PM

Post Fed announcement, the SOX has been bouncing from three-minute Keltner support now at 505.16. The SOX is at 505.13 now, testing that.

Jeff Bailey : 12/13/2005 3:02:33 PM

03:00 Market Watch found at this Link ... Dollar Index reversing back lower.

Jeff Bailey : 12/13/2005 2:59:30 PM

SPX 1,271.73 +0.89% ... session high and gets a trade at WEEKLY R1.

SZP-XK are $0.95 x $1.20

Jane Fox : 12/13/2005 2:59:02 PM

The market surely liked what the FED had to say and this just may be the bullish impetus it needs for the rest of the year.

Linda Piazza : 12/13/2005 2:58:19 PM

The OEX has broken out on its 10-minute chart. Rolling up to the 15-minute one, next resistance at 580.76 on 15-minute closes. OEX at 580.44 as I type.

Jonathan Levinson : 12/13/2005 2:56:49 PM

Volume breadth +2.15:1 on the NYSE, +1.4:1 on the Nasdaq. Not exactly at meltup levels, but prics remain very firm.

Jane Fox : 12/13/2005 2:56:19 PM

AD volume and AD line are both making new daily highs here so shorts be careful.

Linda Piazza : 12/13/2005 2:55:49 PM

New HOD for the SOX. Minimally new high and it's again pulling back below the 10-minute resistance at 506.20 on 10-minute closes. SOX at 505.73.

Jane Fox : 12/13/2005 2:55:10 PM

TICKS +1000

Jeff Bailey : 12/13/2005 2:52:59 PM

Swing trade put filled alert for the SPX Dec 1,255 puts (SZP-XK) at $1.40.

SPX 1,270.22 +0.77%

Linda Piazza : 12/13/2005 2:52:29 PM

GE is facing 10-minute Keltner resistance of its own, at 35.65 on closes, with GE at 35.64 and still within a potential bearish right triangle on its daily chart.

Linda Piazza : 12/13/2005 2:51:31 PM

SOX's 10-minute Keltner resistance continues to hold into the closes. SOX at 505.36 as I type.

Linda Piazza : 12/13/2005 2:51:02 PM

OEX also testing 10-minute Keltner resistance at 579.14 on 10-mintue closes, having been closing periods at or below that resistance after piercing it--so looking as if it was going to hold--but now jumping above it. Still watching.

Linda Piazza : 12/13/2005 2:49:24 PM

SOX at 506.26, previous HOD at 506.36.

Jonathan Levinson : 12/13/2005 2:48:47 PM

Volume has gone back to green with the Qs consolidating just below the highs. The realtime CBOE put to call ratio holds at the lows, where it's been for most of the day currently at .62. NDX volatility as measured by the QQV is lower by 3.65% at 13.73. Highest volume in the front month chain is on Dec 42 QQQQ calls, up a dime at .35.

Linda Piazza : 12/13/2005 2:48:27 PM

Advdec line now coiling at the top of its post-FOMC climb.

Linda Piazza : 12/13/2005 2:47:35 PM

SOX rising again to test the 10-minute Keltner resistance at 506 on 10-minute closes and the 12/02 close that marked the top of its gap down on 12/05. SOX at 505.36 as I type.

Jeff Bailey : 12/13/2005 2:46:22 PM

SZP-XK $1.40 x $1.70 .... SPX 1,269.51

Linda Piazza : 12/13/2005 2:43:20 PM

SOX punching higher again, toward 505.95 next resistance on the 10-minute Keltner chart but also testing its 505.48 close on 12/02 before the gap lower on 12/05. As I typed, the SOX dropped lower again from that test, and is now at 504.45.

Jeff Bailey : 12/13/2005 2:40:37 PM

Buy Program Premium ... SPX 1,268.97

Linda Piazza : 12/13/2005 2:40:16 PM

The OEX punched above daily Keltner resistance at 576.55. Bulls don't want to see it drop back below that by the close. The OEX is at 578.72 as I type, with the day's high at 579.84. Turning to the 240-minute chart, the next resistance is at 580.03, tested as the OEX punmched higher. Next resistance above that at 582.61 on 240-miminute closes. Next support at 575.97 on 240-minute closes, with next support below that at 573.65.

Jeff Bailey : 12/13/2005 2:39:50 PM

SPX 1,268.05 +0.60% ... session high of 1,270.61 noooot quite to WEEKLY R1 at this point.

Jeff Bailey : 12/13/2005 2:37:08 PM

VIX.X 11.14 -2.87% ... spiked to a session low of 10.74, but back above WEEKLY S1.

Jonathan Levinson : 12/13/2005 2:36:00 PM

QQQQ is finding support on its first test of 42.00 from above. Link

Linda Piazza : 12/13/2005 2:34:45 PM

Lots of inverse H&S's building since last Wednesday have been confirmed to the upside by this push post-FOMC. That's the bullish news, but there's obviously been some selling into the post FOMC push and that's the bearish news. The OEX has been testing 10-minute Keltner resitance, at 579.02 on 10-minute closes. It pierced it on the last push but fell back below it by the close of that period. That suggests a pullback to 578.09 at least, and perhaps even to 576.96-577.14.

Jeff Bailey : 12/13/2005 2:34:42 PM

SZP-XK are $1.55 x $2.05 with SPX 1,267.25

Jonathan Levinson : 12/13/2005 2:33:10 PM

Crude oil closed +.05 at 61.35, natgas +.52 at 15.36.

Jonathan Levinson : 12/13/2005 2:32:28 PM

Ten year note yields -2 bps here at 4.527%, 13-week rates down to a 1.2 bp gain at 3.837%.

Jeff Bailey : 12/13/2005 2:30:47 PM

Buy Program Premium ... SPX 1,268.43

Jeff Bailey : 12/13/2005 2:29:50 PM

Speculative swing trade put alert ... place an order to buy two (2) of the SPX SPX Dec 1,255 puts (SZP-XK) for $1.40.

If filled, then place an order to sell them at $3.10.

Jonathan Levinson : 12/13/2005 2:29:40 PM

Volume breadth is up to +1.8:1 on the NYSE, +1.2:1 on the Nasdaq.

Jonathan Levinson : 12/13/2005 2:27:52 PM

The violation of QQQQ 42 needs to fail quickly to avoid forcing all those short calls to begin hedging long. QQQQ holds at 42.09 after pulling back from a doji spike to 42.21, at what should be a short cycle high. The upper 30 and 60 min channels have been broken, in what is either a throwover or the beginning of a more significant breakout. Link

Linda Piazza : 12/13/2005 2:27:15 PM

The SOX is so far having trouble with the top of the gap from the 12/2 close down to the 12/5 open. The close was at 505.48. The SOX just pierced it in the post-Fed fervor but has dropped back to 505.15 as I type. Keep those stops moving higher under your semi-related stocks in case this was just one of those post-Fed pops that's reversed.

Jeff Bailey : 12/13/2005 2:25:07 PM

Sell Program Premium ... SPX 1,268.75

Linda Piazza : 12/13/2005 2:25:06 PM

The advdec line has zoomed all the way up to register overdone levels through the 15-minute chart. It's not slowing yet, though, so dangerous to step in short on that evidence alone. If you're long anything, do remember that the first post-Fed reaction is not always the final one. Keep those stops following prices higher.

Jonathan Levinson : 12/13/2005 2:23:10 PM

QQQQ - Exit Point Alert -

Stopped out QQQQ at 42.17, -.05

Jonathan Levinson : 12/13/2005 2:22:00 PM

QQQQ - Entry Point Alert -

Short QQQQ at 42.12 stop 42.17

Jonathan Levinson : 12/13/2005 2:20:40 PM

New high for QQQQ at 41.99. Link

Jonathan Levinson : 12/13/2005 2:19:53 PM

Crude oil +.225 here at 61.575, natgas +.60 at 15.44.

Jeff Bailey : 12/13/2005 2:19:51 PM

Buy Program Premium ... DIA $108.19, SPX 1,265.37, QQQQ $41.96

Linda Piazza : 12/13/2005 2:17:53 PM

SOX tested the 12/12 high of 501.79, having jumped up to 501.74. It's now at 500.97.

Jonathan Levinson : 12/13/2005 2:16:23 PM

QQQQ tests 30/60 min channel resistance R1 and pulls back, still at new highs for today's range: Link

Linda Piazza : 12/13/2005 2:16:17 PM

The OEX's H&S on the five-minute chart was obviously invalidated.

Jeff Bailey : 12/13/2005 2:15:45 PM

Buy Program Premium ... DIA $108.06, SPX 1,264.26, QQQQ $41.90.

Jonathan Levinson : 12/13/2005 2:15:20 PM

Full text of the FOMC's press release at this Link

Jonathan Levinson : 12/13/2005 2:14:54 PM







Jeff Bailey : 12/13/2005 2:14:50 PM

02:00 Internals found at this Link

Linda Piazza : 12/13/2005 2:12:41 PM

And there was that spike I mentioned up from the OEX's neckline on the formation on its five-minute chart. This is symmetrical with the let shoulder, where a spike began that left shoulder. Bears don't want to see the OEX get too much above 576, however, although the neckline slants upward and so the appropriate right-shoulder level is higher than the left. OEX at 575.79 as I type, having just pulled back a little from its push toward 576.

Linda Piazza : 12/13/2005 2:05:39 PM

New low of the day for GE, a penny below the previous 35.36 low.

Jonathan Levinson : 12/13/2005 2:05:33 PM

Ten year note yields unchanged here at 4.547%, IRX up 3.2 bps at 3.857%.

Linda Piazza : 12/13/2005 2:05:05 PM

OEX just a few cents above the neckline level for its possible H&S on the five-minute chart. If there's symmetry with the left shoulder, there could be a pop high from the neckline test, perhaps up toward 576, but anything much above that would be an invalidation. Watching now as the OEX approaches the neckline, with the OEX now at 575.55, and the neckline at about 575.50.

Jeff Bailey : 12/13/2005 2:02:58 PM

02:00 Market Watch found at this Link

Linda Piazza : 12/13/2005 2:03:15 PM

All this activity right now is positioning ahead of the Fed. It could change in a snap once the decision is made and the language read. It may mean a lot and it may mean just positioning.

Linda Piazza : 12/13/2005 2:01:13 PM

Advdec line dropping, too, at a new low for the day.

Jonathan Levinson : 12/13/2005 2:01:04 PM

Volume breadth is 1:1 on the NYSE, -1.5:1 on the Nasdaq.

Linda Piazza : 12/13/2005 1:59:17 PM

TRAN beginning to drop again.

Linda Piazza : 12/13/2005 1:58:45 PM

SOX back inside that bearish right triangle, although only barely so. SOX at 500.01 as I type. Bulls don't want to see it drop heavily through that triangle.

Linda Piazza : 12/13/2005 1:57:03 PM

Bears don't want to see the OEX get much above 576 to keep alive that possibility of a H&S on the five-minute chart. Neckline now at about 575.50. Here's a picture on a line drawing, as they're sometimes easier to see that way: Link

Jonathan Levinson : 12/13/2005 1:55:45 PM

QQQQ is back to the mid 41.80s after a brief sojourn above 41.90, session high 41.93. Other than the two volume spikes, one to the upside and another back down, the range would likely have been entirely unchanged. A short cycle upphase approaches overbought territory as 2:15 draws nearer. Link

Linda Piazza : 12/13/2005 1:50:22 PM

SOX dropping back to retest that descending trendline off the 12/12 high to see if it holds as support, with that trendline now at about 500.24 and the SOX now at 500.56. SOX bulls do not want to see the SOX drop heavily through that bearish right triangle again, as that makes this upside breakout look like nothing but a stop-running move.

Linda Piazza : 12/13/2005 1:47:21 PM

The OEX hasn't invalidated its H&S on the five-minute chart yet, but it needs to round down soon, probably within the next 30-40 minutes, to avoid doing it just because the right shoulder would stretch out too long otherwise. Let's see, what happens in the next 30 minutes? Oh, yes, the FOMC decision. Seriously, I'm not putting a lot of faith in any five-minute chart formation right now.

Jeff Bailey : 12/13/2005 1:43:41 PM

GlobalSanta Fe (GSF) $50.10 +0.22% Link ... Going back through some notes from 12/07/05 MM.

Oil service name trades new 52-weeker again today, with bullish vertical count to $64.

Looking at its bar chart, with "head" at $40 and "neckline" at $48, the reverse head/shoulder objective would be $56.00. Bar chart Link

Linda Piazza : 12/13/2005 1:38:06 PM

Were those GM shorts sending GM higher, as per Marc's 1:35:36 post on the Futures side? So far, it's getting slapped back when it tries to move into this morning's gap, but it's still trying.

Jonathan Levinson : 12/13/2005 1:36:58 PM

Ten year note yields edge positive here, +.2 bps at 4.549%, while 13-week rates are up 2.7 bps at 3.852%. The 4-week bill auction saw foreign central bank participation low, buying 1.63B of the 14B total. The bills sold for a high rate of 3.57% yielding 3.63%, the bid to cover 2.39.

Linda Piazza : 12/13/2005 1:36:34 PM

Whoa. BIG jump in GM the last few minutes, as least as seen on a five-minute chart. No wonder some things are popping, but GM now testing the day's open (and previous high).

Linda Piazza : 12/13/2005 1:35:16 PM

GE sinking lower. SOX trying to break higher. RLX still climbing, but only now reaching the important five-minute 100/130-ema's and still below a 50% retracement of the drop off yesterday's last five-minute high. TRAN climbed, but then traded sideways outside of its rising regression channel, flattening. BIX still climbing.

Linda Piazza : 12/13/2005 1:31:46 PM

The SOX is now above yesterday's close, now pushing above the descending trendline off the 12/12 high. That triangle had looked like a bearish right triangle, but the SOX is attempting an upside break through that triangle. You have to watch and can't assume anything, especially not anything bearish. Now bulls need to be watchful, that the SOX doesn't get slapped back and that this isn't a stop-running move. SOX at 500.78 as I type.

Linda Piazza : 12/13/2005 1:23:28 PM

GE dropping, now at 35.36. Keep this on your radar screen, as it would appear to confirm a bearish right triangle if it drops below 35.25 and stays there into the close. It does have 200-sma and-ema support just below, though.

Linda Piazza : 12/13/2005 1:22:00 PM

The SOX still tests the descending trendline off the 12/12 high.

Jeff Bailey : 12/13/2005 1:24:38 PM

January Nat. Gas (ng06f) $15.50 +4.44% (30-min delayed) ... right at its 12/08/05 high settlement.

This "has to be" the bullishness into Thursday's report, based on last week's cold weather. Doesn't it?

APA $73.85 +3.82% ... has now retraced 80.9% of its high close (09/21/05) and recent low close (10/21/05).

Earlier this morning, Tab placed a link to some names that might be takeover candidates. APA was one of them.

Linda Piazza : 12/13/2005 1:17:03 PM

After breaking above the mid-channel S/R on the 15-minute chart, the OEX has come back to that level and produces small-bodied candles along it.

Jeff Bailey : 12/13/2005 1:15:36 PM

CME $368.41 +0.27% , BOT $96.51 +2.61%, ICE $36.23 -0.60% ... Was looking at BOT about an hour ago and it was flat.

Linda Piazza : 12/13/2005 1:15:11 PM

In the "does it matter" category is a potential H&S on the OEX's five-minute chart, neckline at about 575.40, OEX testing the right-shoulder level now, although it's possible that the right shoulder extends up to about 575.87 and that the neckline will actually be lower. OEX at 575.73 as I type.

Jonathan Levinson : 12/13/2005 1:14:16 PM

QQQQ hit a session high of 41.90, not testing yesterday's high but still trapping all sellers since yesetrday morning. Despite that, there's been no followthrough, and none seem compelled to cover. 42 call resistance and the narrowness of the range even at the highs leaves the market quiet- a break above 42 could change that if it occurs. Link

Jeff Bailey : 12/13/2005 1:13:40 PM

01:00 Internals found at this Link

Linda Piazza : 12/13/2005 1:13:10 PM

The SOX is charging up toward the descending trendline off the 12/12 high, with that descending trendline at about 500.36. The SOX has Keltner resistance at 500.44 on five-minute closes, too. Looks as if it's trying to break to the upside, but so far, just testing.

Linda Piazza : 12/13/2005 1:05:08 PM

GE at 35.41. The support for that possible bearish right triangle on its daily chart is at about 35.25, with the 200-sma below that at 35.07.

Jeff Bailey : 12/13/2005 1:02:54 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 12/13/2005 1:00:54 PM

QQQQ is taking a very slow drift lower within today's range, testing 72 SMA support at 41.81. Volume is light at 20.3M shares so far today, usually what we'd see in a normal 45 minutes after the opening bell. Volume breadth is -1.5:1 here, much weaker than on the NYSE, but it's a very weak directional vote given the light overall volume. Link

Linda Piazza : 12/13/2005 12:57:53 PM

Good to have your input on Dell, too, Marc. That 50% retracement of the decline off the August 17 high is at about 32.89 if I've drawn the Fib bracket correctly, and Dell is at 32.90 now, after having pierced that level today, and you and I both know that the 50% retracement can be powerful resistance. That's why I was suggesting tightening stops, at the least. I was watching to see what volume/price-spread does by the close today before I felt comfortable saying more, but I'd certainly be protecting my longs if I were long Dell, which I'm not.

Linda Piazza : 12/13/2005 12:53:42 PM

Anyone noticed Dell today? It's jumped above the 72-ema on the daily chart, and is above the 38.2% retracement of the rally from the September 2001 low to the December 2004 high, at about 32.42, with the two roughly in line with each other. This is after Dell fell to test the 50% retracement of that rally in November. It's move up to challenge the weekly 200-sma and -ema's, at 32.79 and 33.80, respectively, with price currently at 32.90. It has historical resistance in the 33.20-33.40-ish zone. It's not yet at a 38.2% retracement of that steep decline into the November low off the July 20 high. It is, however, at the 50% retracement of the decline off the August 17 gap. If you've been in a long position somewhere near that November low, it's probably time to start tightening stops, as it looks that somewhere through here there should be another consolidation period, if not a pullback.

Jeff Bailey : 12/13/2005 12:51:30 PM

SPX Option Montage with December (top) and March (bottom) strikes at this Link

March 1,270 call/put get the bulk of the action, both at about $30.00.

SPX 1,260 +/- $30.00 may give 1,230-1,290 type of range for next 3 months.

SPX PnF chart at this Link

S&P 500 Bullish % ($BPSPX) at this Link

Jonathan Levinson : 12/13/2005 12:43:27 PM

Ten year notes have given back most of their gains, TNX up to a .4 bp loss at 4.543%. IRX is up to a 2 bp gain at 3.845%.

Linda Piazza : 12/13/2005 12:32:58 PM

On the OEX, Keltner resistance from 576.13-576.34 looks strong, on 10-minute closes, and so does support from 575.16-575.40. Recipe for tight-ranged chop unless we get a jolt out of the range, one direction or another. OEX at 575.68.

Jeff Bailey : 12/13/2005 12:34:33 PM

Matrix (MTRX) $9.06 -1.09% Link ... another "small cap" name I like.

I don't think we'll hit the bullish vertical count of $20.75 by February expiration, but if demand will build to $10.00, that would be a triple top buy signal.

Jeff Bailey : 12/13/2005 12:27:05 PM

Small Cap Question ... I had a question the other day regarding any ideas in the "small cap" arena, with the Stock Trader's Almanac note (12/15/05) that "small cap strength starts in mid-December."

One stock I have accumulated, but is very thinly traded, is shares of Sport-Haley (SPOR) $4.75 +1.06% Link .

I used to manage a trust for one of the founder's children years ago. Ms. Haley did sell her company to pursue other interests. Last I knew, she had teamed up with Clint Eastwood to help him with his golf apparel line "Tehama."

A couple of weeks ago, SPOR announced that it had teamed up with Explorer Gear to manufacture and market Top-Flite(TM) branded apparel to Wal-Mart. Stock may be a "winner" come spring/summer 2006. Here's the Sport-Haley press release at this Link

Jonathan Levinson : 12/13/2005 12:22:56 PM

Volume breadth is down to +1.15:1 on the NYSE, steady at -1.3:1 on the Nasdaq.

Linda Piazza : 12/13/2005 12:21:57 PM

If you look at the SOX's pattern on today's five-minute chart, you see a triangle that's more bullish than bearish (supporting line slants up strongly) with the SOX now pushing above the triangle's resistance. If you back that out until Monday, you see a possible bearish right triangle, with horizontal support at about 496.70 and with a descending top trendline, now at about 500.50 or perhaps a little above. That happens to be hear the 61.8% retracement of the decline off the 12/06 high into the 12/08 low.

Linda Piazza : 12/13/2005 12:14:43 PM

Still watching GE. It dropped down to a low of 35.37 today, but hasn't dropped below the 35.25-ish horizontal support for what might be a bearish right triangle on its daily chart. Just after any such breakdown, if one should occur, GE would then test the 200-sma at 35.07. GE at 35.47 as I type, below the 21-ema at 35.53 and the 10-sma at 35.60.

Jeff Bailey : 12/13/2005 12:13:24 PM

12:00 Internals found at this Link

Jonathan Levinson : 12/13/2005 12:09:54 PM

Crude oil is down a nickel here, holding within what may be a bearish descending triangle off the morning high: Link

Linda Piazza : 12/13/2005 12:08:39 PM

The OEX has now climbed up to test 30-minute mid-channel resistance, at 576.33 on 30-minute closes. It does appear to have moved above the neckline for a well-formed inverse H&S, but one that formed within a consolidation pattern and not after a steep pullback. I haven't seen any confirmation yet of that upside breakout. The OEX does appear to be dropping back to retest one version of the neckline, at about 575.73, but with another version a bit lower. This just all seems so labored and not indicative of trade after an important breakout. That could be due to the whole FOMC action, but so could the breakout.

Jeff Bailey : 12/13/2005 12:02:52 PM

12:00 Market Watch found at this Link

Linda Piazza : 12/13/2005 11:59:07 AM

The OEX looks as if it will produce a second 15-minute close above the mid-channel level, but possibly another doji at the top of the climb.

Linda Piazza : 12/13/2005 11:58:16 AM

SOX still can't close the gap and, unlike the SOX and some other indices, has not yet produced a new high.

Jonathan Levinson : 12/13/2005 11:51:16 AM

Volume breadth firms to +1.3:1 on the NYSE, -1.3:1 on the Nasdaq even as the Qs approach today's high. 30/60 min channel resistance is holding at 41.97-.98, support rising to 41.70-.73. Link

Linda Piazza : 12/13/2005 11:47:53 AM

OEX certainly attempting a breakout. Will it hold? I'm not making any bets that it will right now.

Linda Piazza : 12/13/2005 11:46:27 AM

The SOX's five-minute Keltner chart shows that it's currently testing resistance at 499.36 on five-minute closes, but support begins to build a little on that chart, so the SOX may have a possibility of reaching the top of that channel, currently at 500.52. Well, obviously, it could even reach higher than that, but that's next resistance.

Tab Gilles : 12/13/2005 11:45:32 AM

Jeff, I suppose what time frame one uses. But your 10:38 post hit it right on the money.

"History shows that they can move in unison, also inverse of each other."

Linda Piazza : 12/13/2005 11:43:50 AM

SOX attempting an upside break out of its coiling triangle, but not yet at a new high for the day or above its gap from this morning. It's at 499.13 as I type. The OEX has just inched above the previous HOD.

Linda Piazza : 12/13/2005 11:42:20 AM

For benchmarking purposes, the previous high of the day for the OEX was 575.87, with the OEX currently at 575.77.

Linda Piazza : 12/13/2005 11:41:27 AM

Since trading sideways out of the rising regression channel that rose from yesterday's 1:35-ish high, the OEX has been climbing the underside of the channel. That's typical action after a sideways break. The OEX is still testing that mid-channel level on its 15-minute chart, still testing the potential neckline for an inverse H&S (at about 575.80), with the upside break only confirmed by a 15-minute close above 576.58, in my opinion. OEX at 575.74.

Jeff Bailey : 12/13/2005 11:43:56 AM

Tab (11:22:41) ... Yes, gold can be a "doomsday" indicator. However, I've seen traders short, short, short a broader market, or another security (the dollar, oil perhaps) thinking that gold is telling them something it really isn't.

I'm sometimes guilty of doing something I shouldn't, when I think an "indicator" is telling me something.

However, I'm also smart enough to STOP putting on a losing trade, when that losing trade doesn't pan out my prior conviction/analysis/scenario.

Speculation and rumor abound when something does something it shouldn't. When gold is on the rise, it has been my observation that most deem some type of bearish outcome.

Jonathan Levinson : 12/13/2005 11:36:00 AM

The wavelet oscillators are narrowin their range as QQQQ drifts sideways in a 5 cent range: Link

Jeff Bailey : 12/13/2005 11:32:47 AM

Pacholder High Yield (PHF) $8.98 +0.67% ... yesterday, this closed-end "junk bond" fund was down $0.08 per share. At Friday's close, the fund kicked off its monthly $0.075 per share dividend.

I was doing some account posting to my Quicken last night and saw my monthly ration showed up.

Linda Piazza : 12/13/2005 11:30:22 AM

And, depending on what happens in the next minute or two, the OEX may close yet-another 15-minute period below or at the resistance from 575.67-575.84. On any other day, this continual testing, especially with the small-bodied candles, and inability to move above that resistance would suggest that a deeper pullback is needed to gather steam, even if the outcome were eventually an upside breakthrough. On an FOMC day, it suggests that this is where the big money people want to park the OEX. Whether it can stay there or not, I don't know. OEX at 575.58.

Jeff Bailey : 12/13/2005 11:25:36 AM

Seeing quite a few "closed-end funds" on my QCharts' NYSE New Low list.

Nuveen Equity Income Fund (JLA) $17.39 -3.65%. Distributing income and capital gains with ex-dividend date of 12/13/05, which is today's date.

Might expect the bulk of "new lows" on the NYSE, which is home to many closed-end funds seeing similar action.

Tab Gilles : 12/13/2005 11:22:41 AM

Jeff, there are a culmanation of factors at work on gold. When stock markets get overvalued, or governments go on massive spending binges, or bubbles form in real estate or other places, that's when gold flourishes. Investors flee to safety, and flee to gold. It all comes down to fundamentals: supply and demand. Gold's supply has been falling, and demand has been accelerating.

Kenneth Rogoff, the former chief economist at the International Monetary Fund, said that Asian central banks should sell their dollars and diversify into gold. Link

Linda Piazza : 12/13/2005 11:21:38 AM

The OEX is trading sideways out of its rising regression channel off the 1:35-ish low yesterday. Normally, it would be a bearish thing to see prices break down below that rising support, but prices are not yet breaking down--they're moving sideways. It's still not a bullish thing, but not raving bearish, either. OEX at 575.43.

Jeff Bailey : 12/13/2005 11:18:32 AM

11:00 Internals found at this Link

Jane Fox : 12/13/2005 11:17:05 AM

If this isn's a recipe for stay on the sidelines then I'm sure I don't know what is. Link

Linda Piazza : 12/13/2005 11:15:53 AM

SOX still coiling inside this morning's gap.

Linda Piazza : 12/13/2005 11:15:11 AM

So far, it looks as if the OEX's mid-channel resistance at 575.67 on 15-minute closes may hold into this 15-minute close, too, the fourth 15-minute candle in a row that's tested this resistance and failed to move above it. The OEX needs a 15-minute close below 575.19 to suggests that it's beginning to lose its battle to test that resistance and a close beneath the line currently at 574.85 to confirm that impression. OEX at 575.47 as I type.

Jonathan Levinson : 12/13/2005 11:12:29 AM

QQQQ's 30 min cycle is stalled in yesterday afternoon's upphase while the 60 min cycle has rolled over. A short cycle downphase operating within those broader channels is getting no traction, ditto a wavelet upphase within that. The conclusion is chop, but zooming out at bit, this should continue to be at or near a top on the broader intraday cycles. If the price is going to skate sideways for another 3 hours, that picture could descend further into noise, but for the moment, it looks like resistance at yesterday's highs should prove to be a tough nut for the bulls to crack. Link

Linda Piazza : 12/13/2005 11:07:01 AM

I'm watching the OEX's one-minute chart, and it isn't even trading all the way from one side of the channel I'm watching to the other, even on a one-minute chart. Instead, it's moving between support currently at 575.51 and resistance currently at 575.77, with both support and resistance turning strongly upward. However, to counter that bullish view, it's staying in the bottom half of its rising regression channel, below the midline currentlya t about 576. OEX at 575.76 as I type.

Jeff Bailey : 12/13/2005 11:05:50 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 12/13/2005 11:04:56 AM

To add to the Best Buy problems, HPQ CFO forecast revenue in 2006 and 2007 below forecast. I would be very patient if you want to go long the Q's and wait for at least 41.23, if not even 41.

Jonathan Levinson : 12/13/2005 10:59:26 AM

Volume breadth holds at 1:1 on the NYSE, -1.4:1 on the Nasdaq.

Linda Piazza : 12/13/2005 10:58:18 AM

Still mixed up evidence from other indices. I won't bore you with it over and over, but it's there.

Linda Piazza : 12/13/2005 10:57:32 AM

The OEX's five-minute resistance, now at about 575.84, doesn't look as firm as it did earlier. Still watchin the OEX test the 15-minute resistance, at 575.67-575.81 on 15-minute closes. The daily 21-sma is at 575.96, the 10-sma at 576.65. Daily Keltner resistance is at 576.09. QCharts calculates the weekly pivot at 576.81. Lots of resistance, but the OEX tries to best it. OEX at 575.68 as I type.

Jeff Bailey : 12/13/2005 11:04:05 AM

Tab (10:37:42) ... Gold's price could be a reflection of jewelry demand, foreign central bank buying, euro hedging, on and on.

I've talked to small sized custom jewelry manufacturers and while their business has been robust, the price of gold has really hit their bottom line.

This article from 2001 suggested roughly 90% of gold production was for jewelry.

Next thing you know, people wearing big gold rings, or "bling bling" will be protested by some tree huggers.

Tab Gilles : 12/13/2005 10:51:00 AM

Thankyou Linda.

Linda Piazza : 12/13/2005 10:48:55 AM

No new low on the SOX. It's just coiling in a triangle.

Linda Piazza : 12/13/2005 10:47:52 AM

Once again, the OEX's mid-channel resistance at 575.67 held on a 15-minute close, with two 15-minute candles in a row testing that and then falling back and forming doji for the two periods. Looks as if the OEX has't given up testing resistance yet, though, now at 575.61. As I said earlier, until it drops below 574.81 on a 15-minute close, then we can't presume anything other than the little pullbacks are just pullbacks to gather strength before another attack on that resistance, with the outcome still uncertain.

Linda Piazza : 12/13/2005 10:44:58 AM

Great information, Tab, in your 10:42:02 post.

Linda Piazza : 12/13/2005 10:42:58 AM

Jeff, congratulations for play mentioned in your 10:38:01 post.

Linda Piazza : 12/13/2005 10:42:00 AM

The OEX is in a rising regression channel off yesterday's 1:35-ish swing low. A few minutes ago, it hit the bottom of the channel as QCharts draws it, at 575.11, and started up throughit again. I'm watching to see if there will be an equal high test, but five-minute Keltner resistance at near 575.75 is beginning to firm up rather significantly. So is support from 574.76-574.97, however. Without a surge through one or the other, there may be some chop ahead. No surprise pre-FOMC to see the charts set up this way.

Linda Piazza : 12/13/2005 10:38:58 AM

SOX dropping back but no new low yet. SOX at 497.43, and the low at 496.67.

Jeff Bailey : 12/13/2005 10:38:00 AM

On the Goldcorp (GG) naked put play (now close for 50% gain), I thought it best to simply remove the risk from traders' account with the dollar having shown some weakness in recent sessions, and having seen a trade at WEEKLY S2 yesterday.

I still don't think a trader can "bank" on the dollar/gold relationship as over the years I've made note that dollar action doesn't necessarily equate to gold action. History shows that they can move in unison, also inverse of each other.

Linda Piazza : 12/13/2005 10:37:57 AM

Advdec line dropping again, but no new LOD yet. Potential support currently being tested, extending down to -800, with the advdec line now at -688. No bullish divergence on the 10-minute chart, although there is beginning to be on the five-minute.

Jonathan Levinson : 12/13/2005 10:37:48 AM

QQQQ tests short cycle channel support here, the channel starting to roll over but the oscillators not yet stalled: Link . So far it's just a wavelet downphase, but again, the net price action is mostly flat.

Tab Gilles : 12/13/2005 10:42:02 AM

The Federal Reserve uses a very basic Phillips Curve approach Link , to manage monetary policy. With the unemployment rate at 5%, real GDP growing near 4%, and the economy with forward momentum, the Fed's models indicates that the risks are leaning towards inflation. Thus the rise in gold and commodity prices, and the fact that Fed Chairman Greenspan recently stated he's not worried by a flat or inverted yield curve and the markets anticipation of a change in the Fed statement or an end to rate hikes is, once again, premature.

If gold is right, why are 10-year Treasury bonds yielding just 4.5%? Link

So, which market should we believe? History shows that gold is a much better forecaster than the bond market. During previous periods of divergence between the two indicators, gold has been a more sensitive indicator of Federal Reserve policy. Link Link Link

From 12/75 to 12/77, the $TNX yield fell from 8.0% to 7.7%, while gold prices rose $130/oz. to $161/oz. The Fed held the funds rate relatively steady, near 4.75% for the first 16 months of this period and then lifted it sharply to 6.5% during the final eight months of 1977. This flattened the yield curve sharply,however gold prices continued to rise. As the stock market peaked in 1999/2000, the opposite occurred. Gold prices declined, while bond yields rose, yet deflationary fears swept the nation in the early 2000s. The $TNX yield eventually fell to a low of 3.1% in early 2003. Bottomline, gold prices have provided a much better indicator of Fed policy than bond yields, and gold is signaling more inflationary pressures ahead.

Jeff Bailey : 12/13/2005 10:33:18 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 12/13/2005 10:32:36 AM

Doji at resistance, at the top of a climb, for the OEX's last 15-minute candle. That's a small, not-too-glittery star on the bears' list of accomplishments. Now there needs to be a drop, preferably with a 15-minute close below 574.78 soon so they can add another star to their side of the page. Otherwise, this just looks like a pullback to reform before another attack on that resistance. OEX at 575.24 as I type.

Linda Piazza : 12/13/2005 10:28:42 AM

The BIX can't decide what it's doing, trading sideways near the 30-sma. The RLX coils at the bottom of today's steep drop. The TRAN's rise so far looks corrective on the 15-minute chart, but when the TRAn hits the bottom of the descending regression channel in which it's been trading since the middle of November, it's early rise often does look corrective, so that's not definitive evidence of anything. The SOX can't yet move above this morning's gap, but it hasn't rolled down to a new low, either. And all the time, the OEX is at a make-or-break level, rollover-or-break-through level.

Jeff Bailey : 12/13/2005 10:27:26 AM

Naked put close out alert ... Let's close out the Goldcorp GG Dec. $20 Puts (GG-XD) at the offer of $0.10.

GG $20.56 -0.09% ...

Marc Eckelberry : 12/13/2005 10:27:12 AM

QQQQ DEC 42 strike pc ratio at .64 as calls keep piling on. It is fairly safe to say that the Q's will have trouble getting above 42 during opex week. I note another 10,000 calls traded versus only 559 puts this morning. This is really not helping the bulls case.

Jane Fox : 12/13/2005 10:26:20 AM

AS long as the AD volume is making new daily highs I would stay away from the short side but with the Ad line below 0 I would stay away from the long side as well. That leaves us on the sidelines again. We seem to be here a lot but preservation of capital is more important than making it. Link

Linda Piazza : 12/13/2005 10:25:41 AM

The OEX's 15-minute Keltner mid-channel resistance holds again, so far, although this 15-minute period still has about five minutes to go. That resistance is at 575.68 on 15-minute closes, with the OEX currently at 575.44.

Linda Piazza : 12/13/2005 10:22:26 AM

The OEX now tests mid-channel Keltner resistance at 575.69 on 15-minute closes. This resistance gave it trouble all morning yesterday and then on the 8th, but the 575.95-ish zone, just above, may be the neckline for an inverse H&S on the 15-mintue chart, forming since the 7th. I'd want to see a 15-minute close above next Keltner resistance at 576.58 before I considered that formation confirmed. This is an important level for the OEX. Bears want to see the OEX roll down now and bulls want to see it break up through it. So far, the advdec line is finding resistance at the first 15-minute resistance encountered. If that continues, that's slightly in the bears' favor, but only slightly.

Jonathan Levinson : 12/13/2005 10:22:33 AM

No further repos from the Fed, so it looks like the 7.5B net drain is going to stick. Note that the Treasury drained around 2B via yesterday's 13-week and 26-week bill auctions (by raising new cash via its 34B auction size) and will add 10B via today's 4-week bill auction (by paying down 10B via its 14B auction size against 24B maturing). So the Treasury is adding a net amount around 8B on this activity, and the Fed just drained 7.5B, resulting in a net wash plus or minus a few hundred million. The stop out rate of 4.26% tells us that overall, the demand for the Fed's money on the part of the primary dealers who transact with the Fed for the repos and the Treasury for the bond sales is right where the Fed wants it- right around 4.25%. Now the only problem is the longer end of the yield curve- 10-yr note yields are at 4.521%, not far from the anticipated overnight rate.

Jeff Bailey : 12/13/2005 10:21:33 AM

Goldcorp (GG) $20.50 -0.38% ... GG-XD $0.05 x $0.15.

Linda Piazza : 12/13/2005 10:19:04 AM

SOX can't quite close the gap, at least not yet. SOX at 499.65 as I type. On a Keltner basis, the 15-minute chart shows it testing 499.05 S/R on 15-minute closes, having closed the just completed period just a little above that potential resistance, but not enough above it that we can say for sure that it's cleared it. If it maintains values above that through this 15-minute period, into the close, then it looks as if next resistance on that chart is at 501.08 and then 502.16. I'd certainly be watching the top of the gap, however, no matter what the Keltner charts show or don't show.

Jeff Bailey : 12/13/2005 10:19:35 AM

10:00 Internals found at this Link

Yesterday's Internals found at this Link

Jane Fox : 12/13/2005 10:12:49 AM

Here is a chart of IBM this morning. Link

Linda Piazza : 12/13/2005 10:10:10 AM

SOX just about to test the top of the gap from today. SOX at 499.73.

Jonathan Levinson : 12/13/2005 10:10:07 AM

QQQQ filled the gap and has returned to the premarket high after bouncing from a higher low. It looks bulish, but yesterday's high hasn't yet been tested. Volume remains light as expected. Link

Jonathan Levinson : 12/13/2005 10:05:35 AM





Jeff Bailey : 12/13/2005 10:04:34 AM

10:00 Market Watch found at this Link

Linda Piazza : 12/13/2005 10:04:33 AM

To me, these markets feel weak, but the advdec line currently bounces, the SOX coils, trying to move back into this morning's gap, the BIX holds oh-so-tentatively to the 30-sma, and the OEX just reached a new high for the day. It just doesn't feel strong, though.

Jonathan Levinson : 12/13/2005 10:03:13 AM

TNX is down 2.2 bps while IRX is up .7 bps at 3.832%. QQQQ prints a session high at unchanged, but Nasdaq volume breadth remains -1.3:1 as the NYSE goes neutral, 1:1.

Jonathan Levinson : 12/13/2005 10:01:38 AM







Linda Piazza : 12/13/2005 10:01:29 AM

No new low on the SOX as yet. It's coiling at/below those five-minute 100/130-ema's.

Jeff Bailey : 12/13/2005 9:59:46 AM

QQQQ / DIA relative strength shown on 0.50 box size at this Link ... Recent commentary in Market Monitor was based on Friday expiration. However, QQQQ has been a stronger performer vs. the DIA of late.

Trader's can change Box Size to 0.25 and introduce more "noise" into the chart like this Link

Jonathan Levinson : 12/13/2005 9:58:48 AM

The Fed announces a 3B 3-day repo of 3B, which drrains net 7.5B but leaves the door open for another repo for the next 20 minutes or so. The stopout rate is at 4.26%, 1 bp above the 4.25% target rate expected to be announced at 2:15.

Linda Piazza : 12/13/2005 9:57:09 AM

So far, the SOX's five-minute 100/130-ema's hold as resistance. The SOX hasn't dropped back below its open, although it's headed back to test it.

Linda Piazza : 12/13/2005 9:56:07 AM

With the RLX also seeing a big drop, I knew it must be the financials that were helping to support the OEX. They are. The BIX is currently positive, having bounced once again from its 30-sma, but not yet in any convincing manner. That 30-sma is at 360.14 with the BIX at 360.85. The BIX has a possible huge H&S on its weekly chart, neckline at about 327 currently, the head at the December 2004 high, shoulder level at about 368, already tested a few weeks ago. The BIX actually closed a couple of weeks above what would be the most optimum right-shoulder level, but not enough to undo that formation. That does not mean that the BIX will confirm the formation, and for the health of our stock markets, I hope it doesn't, but it should be noted that the the BIX is chopping around in a right-shoulder level.

Jeff Bailey : 12/13/2005 9:53:52 AM

U.S. Dollar Index (dx00y) 90.55 +0.22% (30-min. delayed) ... Of late, gold/dollar have been moving more in unison (up=up)(down=down).

Jonathan Levinson : 12/13/2005 9:52:30 AM

Awaiting disposition of the Fed's expiring 10.5B repo, and the 10AM release of Business Inventories.

Linda Piazza : 12/13/2005 9:51:48 AM

BIG drop in the TRAN today. It's at 4059.12 as I type, below the 12/5 and 12/8 lows.

Linda Piazza : 12/13/2005 9:50:46 AM

When the SOX gapped lower, it also gapped beneath the five-minute 100/130-ema's, averages that have appeared to have some relevance over the last few trading days, at least. Those are at 498.37 and 497.92, respectively, with the SOX testing them now. However, it gapped down to the 15-minute versions at 497.16 and 496.90, respectively, and the SOX bounced from them. The SOX is at 498.46 as I type, having just closed a five-minute period just above the five-minute 100-ema, but not enough above it to say that it's cleared its resisance. Still testing.

Jeff Bailey : 12/13/2005 9:51:47 AM

Goldcorp (GG) $20.21 -1.79% Link ... retraces 38.2% of its 10/19-11/28 move. The GG Dec. $20 Puts (GG-XD) are $0.20 (16) x $0.25 (754)

Linda Piazza : 12/13/2005 9:45:49 AM

Finally a quote on the SOX, and there's that gap lower from a doji that gapped higher that bulls did not want to see. The SOX gapped to the 10-sma at 496.94, with the SOX currently at 497.15. A close anywhere beneath the 10-sma today wouldn't look good for bulls, I don't think. The SOX is moving into the gap as I type, testing it.

Marc Eckelberry : 12/13/2005 9:45:42 AM

INTC APR 25 calls, stop stays at 1.95, break even.

Marc Eckelberry : 12/13/2005 9:45:18 AM

I think DOW will test 10700, where I would initiate a trade.

Marc Eckelberry : 12/13/2005 9:44:39 AM

Exit the DIA DEC 108 calls at .30, for -.05.

Linda Piazza : 12/13/2005 9:42:11 AM

The OEX is still testing a S/R level on the 15-minute Keltner chart. It looks possible that it could head lower, but if someone out there is betting on it with a bearish play, you need to see a 15-minute close below the Keltner line currently at 574.52 to give you any beginning confidence at all. I'm not betting on anything just yet, as the OeX is between the 575-576-ish potential resistance and the 572-573-ish support, squarely in the middle.

Jonathan Levinson : 12/13/2005 9:41:56 AM

So far QQQQ has traced a straight line lower from a near gap down open, now trading south of the 72 SMA and approaching 30 min channel support just above yesterday's low. Link

Jane Fox : 12/13/2005 9:41:39 AM

Has anyone noticed IBM is down -1.30 today.

Jeff Bailey : 12/13/2005 9:39:45 AM

Apache Corp. (APA) $72.44 +1.84% ... updated bar chart we were trading at this Link

PnF chart at this Link

Linda Piazza : 12/13/2005 9:37:11 AM

Big spring up in the advdec line from that support I mentioned earlier, with the advdec line dropping to -393 and now at -81. However, the spring is taking it only back to first resistance, and it's currently hanging up there, below about -25. No conclusion yet, although there are some early signs of weakness perhaps.

Jeff Bailey : 12/13/2005 9:36:12 AM

Apache Corp. (APA) $72.67 +2.16% ... Achieves my first bullish target zone. George... if you're still out there.... I'd take 1/2 position off the table here!

Linda Piazza : 12/13/2005 9:35:38 AM

GE is lower this morning. After gapping up on 11/18, GE has been forming what may be a bearish right triangle--flat support near 35.25, lower highs--above its 200-sma at 35.07. Market bulls want to see GE break higher and not below that 35.25 level or the 200-sma.

Jeff Bailey : 12/13/2005 9:34:21 AM

Taser Intl. (TASRE) $7.15 +16.66% ... SEC closes two of its investigations and has recommended no enforcement action be taken on safety claims stun gun maker Taser International Inc. made about its weapons and on another accounting issue.

Linda Piazza : 12/13/2005 9:34:16 AM

No figure on the SOX yet, but SMH turning a little lower, and INTC doing so, too.

Linda Piazza : 12/13/2005 9:33:05 AM

The OEX opens at 574.52-574.69 Keltner S/R, testing it to see if it holds on 15-minute closes. If it does, next resistance at 575.25 on 15-minute closes, then at 575.71, then at 576.53. OEX still testing right now, though, at 574.85, between possibly strong support and possibly strong resistance. No clues on direction with RSI pointed down but near neutral.

Jonathan Levinson : 12/13/2005 9:32:18 AM

Volume breadth is -1.25:1 on the NYSE, -1.65:1 on the Nasdaq at the open.

Jonathan Levinson : 12/13/2005 9:31:45 AM

QQQQ 72 SMA support is at 41.80, 30/60 min resistance 41.98, support 41.67-.71. Link

Linda Piazza : 12/13/2005 9:31:14 AM

Advdec line opens below the mid-channel level and heads down, toward first support possibly in the -450 region. Advdec line at -327 as I type.

Tab Gilles : 12/13/2005 9:26:47 AM

Two interesting reports on the oil sector concerning possible mergers on the BR/COP news. Link Link

Tab Gilles : 12/13/2005 9:24:56 AM

Nasdaq100 ($NDX) Daily chart... Link

Weekly... Link

Linda Piazza : 12/13/2005 9:18:08 AM

Well, here we are at FOMC day. Even if the trading pattern hadn't been so strange yesterday, some caution is usually the best idea ahead of the FOMC decision and afterwards, too, as Jonathan expressed in his Wrap last night.

Yesterday saw no follow-through on early bullishness, demonstrated on the SOX by its close only $0.20 away from its open. Yesterday, the OEX has tested the daily 21-ema again, but failed to hold above it for the third day in a row, with that average at 575.65. As I mentioned yesterday in my end-of-day-decisions post, 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. The most dreaded alternative formation and possibly most likely one that the OEX is 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, and that trickiness could be exacerbated by the Fed watch today. At the top of a climb, broadening formations are considered bearish, but they haven't always performed so, and there's still that possible bull flag interpretation, with a spike higher and a spike lower.

I've been saying that 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 and showed that it was now support. A drop and close below it would look less bullish. Last week's low came awfully close to that former resistance, so there's always the possibility that we've had that test. The OEX's two doji for Friday and yesterday demonstrate that I'm not the only person who doesn't know yet whether that was "the" test. We retail traders are not influential enough to produce those doji, either: that's the institutional people expressing their uncertainty. Doji at the bottom of a decline can express uncertainty about driving prices lower, and so can be a sign of an imminent climb, but when seen on intraday charts, these look like choppy climbs that are reversed.

The SOX is in a potential topping-out exercise, as I've been saying, and it might be an index to watch for guidance after yesterday's doji that gapped above Friday's candle. If the SOX should gap back down today and then head lower, that won't look good for short-term bulls, although the reversal signal produced won't be coming at the very top of the SOX's climb and so might predict only a cycling down through the SOX's recent consolidation pattern.

Other indicator indices I watch to tell me something about the components that make up the SOX showed combinations of strength and weakness yesterday, so it was no wonder that the OEX had a choppy day. 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. Futures aren't giving that clarity this morning, either. The daily chart shows some vulnerability toward 570, but only if daily closes continue to be below 576.28. Let's look back at the 15-minute channel. On that, the mid-channel resistance is now at 575.72 on 15-minute closes with 576.53 next resistance above that. Support is from 574.47-574.69 on 15-minute closes, with next support below that at 572.85. A 15-minute close above 576.53 would suggest the confirmation of the inverse H&S that's been building since about the 7th, so would be important, although inverse H&S's can be invalidated, too, by trade above the neckline and then a reversal back below it again. A violation of Thursday's low suggests that the OEX is just continuing to slide lower along Keltner support, with the lowest support now at 570.75 on 15-minute closes.

I wouldn't be fast to jump into any trade this morning without a whole lot of corroboration on your side. I'll tell you if I see that corroboration, but I'm currently not expecting to find it.

Jonathan Levinson : 12/13/2005 9:08:52 AM

The 30 min cycle aborted its downphase very early in its run yesterday afternoon, while the 60 min has just rolled over. QQQQ needs to break 41.70 to restart the downside, but with an FOMC announcement this afternoon compounding the usual op-ex week manipulations, this is not the time to be staring too closely at the charts. It's almost certain to be a light-volume rangebound morning. I'll update the levels when they refresh at the opening bell.

Jonathan Levinson : 12/13/2005 9:04:13 AM



Jane Fox : 12/13/2005 8:54:20 AM

Jonathan I was going to do a quick short on Gold yesterday based on your observations but I chickened out.

Jonathan Levinson : 12/13/2005 8:52:41 AM

Gold has broken back below 530 on a steep, high volume drop: Link while silver chops around in the mid 8.80s, within yesterday's post-clothesline-drop range: Link . 15 min chart of gold at this Link

Jonathan Levinson : 12/13/2005 8:32:53 AM

QQQQ holds flat at 41.87, ten year notes up with TNX -2 bps at 4.527%, IRX +1 bp at 3.835%.

Jonathan Levinson : 12/13/2005 8:32:17 AM











Jonathan Levinson : 12/13/2005 7:43:35 AM

Session highs across the board here for equities, ES trading 1270.5, NQ 1719, YM 10843 and QQQQ +.04 at 41.91. Gold is down 1.5 to 530, silver +.005 at 8.883, ten year notes +3/64 to 108 19/64, crude oil is up .15 to 61.45 and natgas is up .51 to a 15.35 high.

We await the 8:30 release of Retail sales, est. .4%, ex-auto est. 0%, then at 10AM Business Inventories, est. .5% , and at 2:15, the FOMC rate announcement.

Linda Piazza : 12/13/2005 7:16:36 AM

Good morning. The Nikkei posted a 40-point gain, a more-than-five-year closing high. Other Asian markets were mixed, as are European markets. As of 6:58 EST, gold was down another $3.50 at $528.80, and crude, up $0.05 to $61.35. The IEA monthly oil report has raised next year's demand estimate by 7.8%, with the U.S.'s demand expected to increase and China's to ease. As I was getting ready to upload this report, Goldman Sachs also issued a statement saying that this may be the beginning of the 4-5 year "super spike" period, in accordance with the "super spike" theory the firm proposed in March. Goldman Sachs' prediction won't be news to our readers, who were getting warnings much earlier last year from Jim Brown. More details about Asian and European markets follow in succeeding paragraphs.

Ahead of tomorrow's much-watched quarterly Tankan report, the Nikkei closed higher by 40.16 points or 0.26%, at 15,778.86, its highest close in more than five years. Although the firming yen proved problematic for some exporters, Canon reached a new record high in early trading after a newspaper speculated that it would beat its own forecast when reporting for the business year that ends this month. Mitsubishi Heavy Industries benefited from a report that it would form an alliance with Royal Dutch Shell. Rising crude helped boost energy-related shares in early trading, and other resource-related stocks tended to perform well. Brokerages tended to slip in and out of positive territory during the day, sometimes subject to profit-taking. Shipping firms saw increases in their stocks. A figure released in the morning showed that winter bonuses for workers at Japanese companies rose 3.54%, the biggest increase in fourteen years. A little later, October's revised industrial production was released, with the figure unchanged from the estimate of an increase of 0.6% month over month, with shipments increasing 1.9% and inventories falling 1.7%.

Other Asian markets were mixed. The Taiwan Weighted lost 0.08%, but South Korea's Kospi climbed 0.24%. Singapore's Straits Times dropped 0.16%, and Hong Kong's Hang Seng declined 0.55%. China's Shanghai Composite lost 0.18%.

European markets are mixed, perhaps on hold ahead of our FOMC decision and after some hesitancy in the Nikkei, too. The big news on the economic front in Europe is in the much-better-than-expected December ZEW index for Germany. The headline expectations number was forecast at 41.0, but the reported number was 61.6, up from November's 38.7. The ZEW pegged the increase on more optimism about investments, with the DAX having followed the global trend lately and rallied, although it's not climbing today. The uncertainty surrounding the elections in Germany has been eased, too. Now Germany will await Friday's IFO report, especially since the ZEW number moved so far away from the forecast, but some say that the ZEW number suggests that the ECB was right to change its policy stance.

In company-specific news, Deutsche Bank upgraded Siemens, a Germany conglomerate, to a buy rating from its previous hold rating, and Seimens was up more than 2% in the morning's trade. Royal Dutch Shell raised its plans for capital expenditures for 2006, and it was trading higher in morning trade. Vodafone announced that it won the auction for Turkey's second-largest mobile phone operator, Telsim.

As of 6:56 EST, the FTSE 100 was higher by 11.10 points or 0.20%, at 5,512.60. The CAC 40 was higher by 3.12 points or 0.07%, at 4,676.25. The DAX was lower by 8.49 points or 0.16%, at 5,292.72.

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