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Jeff Bailey : 1/6/2006 1:34:20 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+7.11 and set for program selling at $+5.18.

OI Technical Staff : 1/5/2006 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The Market Monitor has been archived.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 : 1/5/2006 6:42:57 PM

Out of Office ... I will be out of the office on Monday 01/09/06. I plan on returning at the market open on Tuesday 01/10/06.

Jeff Bailey : 1/5/2006 6:35:08 PM

Closing Internals found at this Link ... Note: Today's action good enough for the NASDAQ's 5-day NH/NL ratio to move above its 10-day NH/NL ratio. It would currently take a closing reading of 58% for the NASDAQ's 10-day NH/NL ratio to reverse up 3 boxes.

Updated NASDAQ NH/NL Ratio chart at this Link

Jeff Bailey : 1/5/2006 5:16:31 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 1/5/2006 6:11:49 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... Stopped out of the Valro Energy Feb $50 Calls (VLO-BJ) at $5.20 ($+1.10, or +26.83%). Intra-day range on VLO was $55.15 to $53.53 and closed $54.70 -0.25%.

Stopped out of the remaining Matrix Service MTRX Feb $7.50 Calls (QXW-BU) at the quoted bid of $2.15. ($0.70, or +48.28%). Intra-day range on MTRX was $10.60 to $9.12 and closed $9.93 +5.63%.

Swing trade long 1/3 position in the Chesapeake Energy CHK Apr $32.50 Puts (CHK-PZ) at the offer of $3.10. Will begin with a stop should the underlying shares trade $35.10. Current target is $24. PnF chart from Dorsey/Wright at this Link

Mark Davis : 1/5/2006 4:38:38 PM

Don't you just love Iran's President's comments, Jeff? The guy just doesn't know how to keep his mouth shut. He is NO diplomat, and evidently there is nobody around (advisors) who have the guts to tell him he's a diplomatic moron. That tends to be the case in regimes run by fear... lot's of "yes men".

Jeff Bailey : 1/5/2006 4:20:49 PM

Headline ... U.S. State Department spokesman Sean McCormack saying Ahmadinejad's remarks "hateful and disgusting." Mr. McCormack added that the Iranian people "are suffering as much as anybody else from this particular regime. This regime has isolated the Iranian people from the rest of the world in a matter of months - through its actions and its statements."

Jeff Bailey : 1/5/2006 4:20:10 PM

Headline ... Iran's ultraconservative president Mahmoud Ahmadinejad hopes for Sharon's death.

Jeff Bailey : 1/5/2006 4:11:23 PM

Buy Program Premium ... DIA $108.85, SPY $127.38

Jeff Bailey : 1/5/2006 4:09:12 PM

03:12 PM EST Temperatures with February Nat. Gas and Heating Oil futues settlement at this Link

February Crude Oil settled down $0.63, or -0.99% at $62.79.

February Unleaded settled up $0.0025, or 0.14% at $1.787.

Jeff Bailey : 1/5/2006 3:49:04 PM

IBM $82.46 +0.62% Link ... bounces along its 200-day SMA.

Possible h/s top with neckline at $80.

Break above $85 could be powerful.

Jonathan Levinson : 1/5/2006 3:47:01 PM

Headline:Snow says press may be bored because economy is so good By Greg Robb

WASHINGTON (MarketWatch) -- Treasury Secretary John Snow issued a wake-up call to the financial press. In a speech prepared for delivery to the Chamber of Commerce, Snow said the U.S. economy is on "solid footing." Snow said he agreed with a suggestion in an op-ed by columnist Robert Samuelson that good economic news is bad news for the news business. "The press may find this economy of ours to be downright boring...but I don't find it boring," Snow said. "Rather it is a reason for optimism," he said.

Jeff Bailey : 1/5/2006 3:46:20 PM

Altera (ALTR) $19.78 +3.02% Link ... XLNX rival.

Nasty looking reverse h/s bottom.

Jeff Bailey : 1/5/2006 3:45:13 PM

Xilinx (XLNX) $28.56 +6.05% Link ... strong move with some volume on extended move above 200-day SMA.

Jonathan Levinson : 1/5/2006 3:41:03 PM

QQQQ daily chart at this Link , stacking another green day, higher high and higher low, the retest of broken descending resistance providing a doji bounce at the low. While volume is declining on the rise, this remains an exceptionally strong daily cycle bounce, comparable to the bounce off the July low.

Jonathan Levinson : 1/5/2006 3:26:53 PM

Volume breadth -1.05:1 on the NYSE, +3.05:1 on the Nasdaq. No downside traction whatsoever in QQQQ's 30 and 60 min cycle downphases, fighting the daily cycle upphase. However, the short cycle upphase of the past hour has so far also been its wheels- could be that the market's going to wait until tomorrow AM's employment report. Link

Jeff Bailey : 1/5/2006 3:17:27 PM

Sun Microsystems (SUNW) $4.63 +4.98% ... notable new 52-weeker.

Jeff Bailey : 1/5/2006 3:13:16 PM

03:00 Internals found at this Link

Jeff Bailey : 1/5/2006 3:03:19 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 1/5/2006 3:01:52 PM

So far, QQQQ's intraday action has almost perfectly echoed yesterday's intraday pattern. If it continues to play out, then the short cycle upphase will begin to dig in and we'll see a gun higher into the close. Still no clue as to which way it breaks, except that the longer intraday cycles are due for downside, as they've been all day. Link

Jeff Bailey : 1/5/2006 2:49:59 PM

IntercontinentalExchange (ICE) $39.25 +6.36% ... back to its IPO day closing price.

I think the "foreign energy" trade has to be responsible for part of these recent gains.

ie. Russia's Nat. Gas and now Prime Minister Sharon's health.

Jonathan Levinson : 1/5/2006 2:40:38 PM

The short cycle indicators are oversold for QQQQ, with a minor potential bullish wavelet divergence. With the 30 and 60 min cycles so precariously perched at/near highs, the short cycle upphase has a greater than usual chance of failing- but if they're going to try for a bounce, it should be here, at or above 41.80. Link

Jeff Bailey : 1/5/2006 2:34:13 PM

Minerals Management Service Hurricane Katrina/Rita Shut-in Report Link

Jeff Bailey : 1/5/2006 2:30:04 PM

ConocoPhillips (COP) $59.58 -0.70% Link ... Saying Q4 production will be higher than the previous quarter as a result of maintenance completed during the third quarter in the North Sea, as well as the impact of unplanned downtime and seasonality in Alaska.

The integrated energy company said it sees Q4 crude oil and natural gas production of 1.6 million barrels of oil equivalent, or BOE, per day and 2005 production of 1.56 million BOE a day.

Jonathan Levinson : 1/5/2006 2:27:45 PM

QQQQ is back to 41.80 on a small uptick in volume, dragging Nasdaq volume breadth all the way down to +2.85:1, still deep in bullish territory. This is just cat and mouse-type play compared with the vertical upside candles we saw earlier this week. Below 41.60-.65, that might change, but for the time being, there's really no evidence of weakness in any of the longer intraday cycles. Updated 2-day chart at this Link

Jeff Bailey : 1/5/2006 2:15:26 PM

02:00 Internals found at this Link

Jeff Bailey : 1/5/2006 2:03:33 PM

02:00 Market Watch found at this Link

Jeff Bailey : 1/5/2006 2:00:31 PM

Midday news update:

The major indices are mixed to higher with the technology shares helping offset weakness in energy.

NASDAQ-100 (NDX.X) 1,703.71 +0.46% heavyweight Cisco Systems (CSCO) $18.31 +2.57% has built gains for a second-straight session and lends to tech's strength after Citigroup analyst Alex Henderson said in a research note that Wall Street is underestimating Cisco's growth going forward. He added that the company's revenue growth rate could reach 12% to 15% by the middle of the year after several quarters in which orders grew faster than sales.

Citigroup reiterated its "buy" rating on the shares with a target price of $22, or 21 times its estimate for 2006.

Cisco's advance also boosted sentiment among tech with the Semiconductor Index (SOX.X) 507.54 +2.18% looking to challenge its December highs of 510.38, while the CBOE Internet Index (INX.X) 230.80 +2.02% advanced sharply with bullish implications as MACD indications begin to turn higher above zero.

Retailers as depicted by the S&P Retail Index (RLX.X) 457.44 -0.33% were mixed. Wal-Mart (WMT) $45.59 -1.57% said sales for stores open at least a year rose just 2.2% in December, at the low end of analysts' estimates.

Target (TGT) $54.31 -0.62% shares slid after the retailer posted a 4.7% same-store sales gain, which was slightly above analysts forecast.

Economic data had the Institute for Supply Management saying its index of nonmanufacturing activity increased to 59.8 last month from 58.5 in November. The new figure was above the 59 reading forecast by analysts.

Additional economic data showed jobless claims fell by 35,000 last week to 291,000, the lowest level in more than five years and a sign that labor markets are shaking off the effects of Hurricanes Katrina, Rita and Wilma.

Geopolitical news had Israel's Prime Minister in deep sedation after the leader underwent emergency surgery to for a massive stroke, but officials said predicting his future prospects was almost impossible until he was awake again and the damage could be assessed.

The uncertainty surrounding Sharon's health brought to the forefront some uncertainty to near-term stability in the Middle East.

Weekly energy inventory figures released showed crude oil inventories falling by 1.013 million barrels, while warmer weather had natural gas inventories rising by 1 bcf.

Jonathan Levinson : 1/5/2006 1:54:10 PM

Ten year notes back to negative, TNX now up .4 bps at 4.37%. IRX holds its 1 bp gain at 4.092%.

Jonathan Levinson : 1/5/2006 1:41:02 PM

QQQQ is sticking to the 72 SMA here, and volume has slowed to a trickle. Breadth is -1.15:1 on the NYSE and +3.15:1 on the Nasdaq, a tale of two markets. Crude oil has returned to unchanged, ticking +.05 at 63.475.

Jonathan Levinson : 1/5/2006 1:29:48 PM

Despite the Fed's big repo drain today and yesterday, price is holding solidly within its opening range. My thought is that this would be distribution, just as we saw in early to mid December, based as well on the intraday cycles, all overdue for a decline with price holding unchanged. A break above the highs could result in a rocket ride, however, as all the accumulated sellers rush to cover. In all, a very tricky and headachy range today. Link

Jeff Bailey : 1/5/2006 1:16:56 PM

01:00 Internals found at this Link

Jeff Bailey : 1/5/2006 1:04:58 PM

01:00 Market Watch found at this Link

Jeff Bailey : 1/5/2006 1:00:24 PM

April Nat. Gas (ng06j) $9.34 -4.50% ... session low has been $9.25. Here's an intra-day updated PnF chart on this contract Link

Chesapeake Energy (CHK) $32.20 -2.54% Link

Jonathan Levinson : 1/5/2006 12:59:24 PM

Stepping away to nurse a headache.

Jonathan Levinson : 1/5/2006 12:56:08 PM

Natgas has recovered to a .595 loss at 9.60, crude oil down .175 at 63.25 here.

Jonathan Levinson : 1/5/2006 12:46:09 PM

The longer intraday cycle setup for QQQQ has barely changed since this morning's open, the 60 min cycle maxxed out a diverging lower within overbought, the 30 min cycle stalled in overbought after a brief upside whipsaw. The short cycle is maxxed out and drifting lower with negligible corresponding traction in the price, which is holding impressively on the strong +3:1 Nasdaq volume breadth. QQQ is testing 72 SMA support for the first time today: Link

Jeff Bailey : 1/5/2006 12:44:21 PM

Sell Program Premium ... DIA $108.73, SPX 1,273.25, QQQQ $41.92

Jeff Bailey : 1/5/2006 12:43:04 PM

Should be getting the Minerals Management Service Hurricane Katrina/Rita Evacuation and Production Shut-in Statistics Report at 02:00 PM EST.

Here's the most recent report as of 12/29/05 at this Link

Jeff Bailey : 1/5/2006 12:28:59 PM

Filled on two of the QXW-BU at $2.25

Jeff Bailey : 1/5/2006 12:26:44 PM

QXW-BU $2.15 bid.

Jeff Bailey : 1/5/2006 12:24:30 PM

Bullish swing trade stopped alert ... MTRX $9.40

Jeff Bailey : 1/5/2006 12:23:05 PM

Matrix Service (MTRX) $9.50 +1.06% ... hasn't shown anything from the bullish side since opening ticks.

Quick check of today's option action across all hints that $10.00 is going to be a cap for January.

Jonathan Levinson : 1/5/2006 12:17:08 PM

Stepping away.

Jonathan Levinson : 1/5/2006 12:14:59 PM

From the Treasury website:

The Treasury will auction 13-week and 26-week Treasury bills totaling $34,000 million to refund an estimated $32,878 million of publicly held 13-week and 26-week Treasury bills maturing January 12, 2006, and to raise new cash of approximately $1,122 million.

Jeff Bailey : 1/5/2006 12:12:27 PM

12:00 Internals found at this Link

Jonathan Levinson : 1/5/2006 12:03:12 PM

Session high for QQQQ at 42.00, the short cycles maxxing out to the upside and on the verge of a trending move. Link

Jeff Bailey : 1/5/2006 12:02:29 PM

12:00 Market Watch found at this Link

Jeff Bailey : 1/5/2006 11:56:11 AM

Feb Unleaded (hu06g) $1.78 (unch) ... did tick $1.80 after today's release of EIA inventory data.

Jonathan Levinson : 1/5/2006 11:53:57 AM

QQQQ holds just below the highs, no sign of weakness so far. 30 min channel resistance is up to 41.12 in the event that 42.00 resistance breaks. Link

Jeff Bailey : 1/5/2006 11:47:23 AM

Today's EIA Inputs, Op Capacity and Utilization data sure looked more bullish than bearish for the refiners and refined products markets.

Valero (VLO) $54.51 -0.74% has snapped back from a session low of $53.50. Might have been a little to tight with the $5.20 stop on the VLO Feb $50 Calls (VLO-BJ) at $5.20. My calculations "should have" had $5.20 not hit until VLO below $5.20.

Jonathan Levinson : 1/5/2006 11:47:17 AM

Headlines:

WHITE HOUSE SEES 176,000-JOB GROWTH IN DEC - CEA'S SLAUGHTER

Jonathan Levinson : 1/5/2006 11:42:56 AM

Headlines:

GERMANY'S DAX INDEX ENDS DOWN 0.1% AT 5,516

FRANCE'S CAC 40 SHEDS 0.07% TO 4,835

U.K.'S FTSE 100 ENDS DOWN 0.4% AT 5,691

Jonathan Levinson : 1/5/2006 11:37:10 AM

Volume breadth -1.1:1 on the NYSE, +3:1 on the Nasdaq.

Marc Eckelberry : 1/5/2006 11:19:51 AM

ALERT: Raise stop on INTC APR 15 call to 1.70, even. Trading at 2.25 now.

Jeff Bailey : 1/5/2006 11:18:25 AM

11:00 Internals found at this Link

Jonathan Levinson : 1/5/2006 11:16:20 AM

The Fed announces another permanent market operation, a TIPS purchase of $448M. This reduces the amount of the Fed's net drain today by that amount, but this is another permanent addition to liquidity, the Fed buying treasury bonds outright.

Jeff Bailey : 1/5/2006 11:09:28 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 1/5/2006 11:05:54 AM

Huge drop in the CAD today, with the March loonie future down 1.22% here at .8629, off a low of .8617. 100-tick chart at this Link

From Reuters 1 hour ago:

TORONTO, Jan 5 (Reuters) - The Canadian dollar eased off its highest daily close in 14 years versus the U.S. dollar on Thursday, ahead of Friday's jobs data for both Canada and the United States.

Looks like the Initial Claims data packed a big punch in the forex market.

Jeff Bailey : 1/5/2006 11:03:49 AM

Swing trade put alert for one (1) of the Chesapeake Energy April $32.50 Puts (CHK-PZ) at the offer of $3.10.

CHK $32.00 -3.17%

Jonathan Levinson : 1/5/2006 10:58:36 AM

Headlines:

INTERNET SPENDING ROSE 22% TO $143.2B IN 2005 -- COMSCORE

INTERNET NON-TRAVEL HOLIDAY SPENDING ROSE 25% -- COMSCORE

Jonathan Levinson : 1/5/2006 10:56:36 AM

LONDON, January 5 /PRNewswire/ -- Avian flu is now so widespread in poultry flocks in many countries in Southeast Asia that it is endemic, and will be very difficult to eradicate over the next decade, according to a new report from Informa, Avian Flu: The role of animal health companies in its control and eradication. Moreover, the report makes it clear that it will almost certainly spread to commercial poultry flocks in Europe during 2006.

Link

Jeff Bailey : 1/5/2006 10:54:01 AM

EIA Weekly Crude Oil, Gasoline, Distillate, Nat. Gas Storage Table found at this Link

Jonathan Levinson : 1/5/2006 10:49:52 AM

QQQQ holds above the earlier morning low, and the 72 SMA has made it up to 41.64. 30 min channel support is up to 41.60, where it overlaps the pivot. A short cycle downphase is in progress, but the bears are going to have to get much better traction than this slow drift if it's to turn down the longer intraday cycles. Volume breadth holds at +3.2:1, very strong. Link

Jeff Bailey : 1/5/2006 10:47:54 AM

EIA Weekly Nat. Gas by region/total Link

Jeff Bailey : 1/5/2006 10:39:42 AM

Sell Program Premium ... DIA $108.59, SPX 1,271.78, QQQQ $41.80

Jeff Bailey : 1/5/2006 10:39:00 AM

Bullish swing trade stopped alert ... for the Valero Energy VLO Feb $50 Calls (VLO-BJ) at $5.20.

VLO $53.79 -2.07% ...

Jeff Bailey : 1/5/2006 10:37:39 AM

EIA Weekly Gross Inputs, Operable Capacity, Pct. Utilization Table at this Link ... Note: Decline in Operable Capacity.

Jonathan Levinson : 1/5/2006 10:36:21 AM

Need to step away for 10 minutes.

Jonathan Levinson : 1/5/2006 10:34:16 AM

Natural gas getting slammed, now down .715 at 9.48, -7%. Crude oil -.625 at 62.80.

Jonathan Levinson : 1/5/2006 10:33:16 AM

Natgas storage report from the EIA:

Working gas in storage was 2,641 Bcf as of Friday, December 30, 2005, according to EIA estimates. This represents a net increase of 1 Bcf from the previous week. Stocks were 79 Bcf less than last year at this time and 168 Bcf above the 5-year average of 2,473 Bcf. In the East Region, stocks were 72 Bcf above the 5-year average following net withdrawals of 19 Bcf. Stocks in the Producing Region were 50 Bcf above the 5-year average of 699 Bcf after a net injection of 12 Bcf. Stocks in the West Region were 46 Bcf above the 5-year average after a net addition of 8 Bcf. At 2,641 Bcf, total working gas is within the 5-year historical range.

Jonathan Levinson : 1/5/2006 10:32:39 AM

Headline:

NATURAL-GAS STOCKS UP 1 BLN CUBIC FEET: ENERGY DEPT

Jonathan Levinson : 1/5/2006 10:32:30 AM

Headlines:

10:31am U.S. CRUDE STKS DOWN 1 MLN BRLS LAST WK: ENERGY DEPT

10:31am U.S. DISTILLATE STKS UP 2.1 MLN BRLS: ENERGY DEPT

10:31am U.S. GASOLINE STKS UP 1.4 MLN BRLS: ENERGY DEPT

Jonathan Levinson : 1/5/2006 10:32:12 AM

From the EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) inched up by 0.1 million barrels from the previous week. At 322.6 million barrels, U.S. crude oil inventories are well above the upper end of the average range for this time of year. Total motor gasoline inventories declined by 1.2 million barrels last week, putting them in the lower half of the average range. Distillate fuel inventories fell by 0.9 million barrels last week, and are just above the lower end of the average range for this time of year. A drop in high-sulfur (heating oil) distillate fuel more than compensated for a slight increase in low-sulfur (diesel fuel) distillate fuel inventories. Total commercial petroleum inventories dropped by 7.4 million barrels last week, but remain above the upper end of the average range for this time of year.

Jonathan Levinson : 1/5/2006 10:31:59 AM

Session high for ten year notes, +7/64 at 109 57/64. TNX is down 1.6 bps here at 4.34%, IRX holding up at 4.092%.

Jeff Bailey : 1/5/2006 10:28:10 AM

Current OPEN MM Profiles found at this Link

Jeff Bailey : 1/5/2006 10:23:51 AM

Bullish swing trade raise stop alert ... for the Matrix Service MTRX Feb $7.50 Calls (QXW-BU) to $1.75.

This would equate to approx. $9.20 for the underlying shares.

Jonathan Levinson : 1/5/2006 10:21:32 AM

Volume breadth is up +1.05:1 on the NYSE, +4:1 on the Nasdaq.

Jeff Bailey : 1/5/2006 10:15:38 AM

10:00 Internals found at this Link

Yesterday's Internals found at this Link

Jonathan Levinson : 1/5/2006 10:14:37 AM

QQQQ nearly tagged R1 on that push. There's a short cycle bearish divergence set up now if the price doesn't crack 42 on the next surge. Just an amazing display from the bulls. The maxim that markets fall faster than they rise simply hasn't been true in recent months. This week's rally looked more like a crash in reverse than anything else. Link

Marc Eckelberry : 1/5/2006 10:10:57 AM

INTC is kicking. The option trade is up 35%.

Tab Gilles : 1/5/2006 10:08:09 AM

EVV ready to test 200-ma. Link

Jonathan Levinson : 1/5/2006 10:04:01 AM

Headlines:

U.S. DEC. ISM SERVICES PRICES 69.5% VS 74.2% IN NOV.

Jeff Bailey : 1/5/2006 10:02:56 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 1/5/2006 10:02:06 AM

Ten year note yields drop to flat at 4.286%, IRX up 1 bp at 4.092%.

Jonathan Levinson : 1/5/2006 10:03:10 AM

Headlines:

U.S. DEC. ISM SERVICES 59.8% VS 58.5% IN NOV.

U.S. DEC. ISM SERVICES ABOVE CONSENSUS 58.9%

U.S. NOV. PENDING HOME SALES INDEX FALLS 2.5% TO 120.6

U.S. NOV. PENDING HOME SALES INDEX DOWN 2.5% Y-O-Y

U.S. PENDING HOME SALES INDEX SHOWS SLOWING: NAR

U.S. DEC. ISM SERVICES EMPLOYMENT 57.1% VS 57.0% IN NOV.

Jonathan Levinson : 1/5/2006 10:07:42 AM

Good Morning Jon, last night I was reading an article about when indicators that worked in the past stop working. Could this mean that the trend and picture is changing?

During the 80's and 90's the market tended to go up from January to August, then dip from August to October, and then rebound for the rest of the year, with the Santa rally. This trend has happened so often, that people expect it every year, and has conditioned them that it will be the same, year after year.

However, this year it did not occur, and perhaps this is why the indicators we normally count on are not working properly, due to the trend change, to a bear market via a stage three top.

Does this make sense to you?

It does, but there are so many implied premises that the conclusion is still a reach. Firstly, you're describing the rule of alternation (if I haven't screwed up the name)- the effect being that whatever seasonal pattern the crowd comes to expect will be more likely not to recur for that very reason. This is the same thinking behind the now-debunked "years ending in '5'" rule. However, seasonal patterns are often based on recurring events- such as seasonal tax payments first draining liquidity available to retail traders, then adding it to the Treasury's coffers.

Second, there's always a cycle tracking the price action- just depends on the timeframe. So, when indicators "stop working," it's often a temporary distortion caused by the dominance of a longer cycle. I don't track the longer (multiyear) cycles here, as they're effectively untradeable using leverage (such as via options or futures)- but if indicators are getting skewed, that's my immediate interpretation. Because each price cycle moves relative to the next longer cycle that contains it, a weekly cycle upphase could trend/become right-translated under the influence of a monthly cycle upphase.

It's those longer cycles that effectively dictate whether we're in a bear or bull market. At this point of abstraction, anything is possible- I don't know enough above e-wave, and the "grand supercycle" or "kondratieff" cycles to comment.

Jonathan Levinson : 1/5/2006 9:54:21 AM

Looks like the upside 30/60 min channel violations marked the short cycle top, with a bearish divergent wavelet downphase kicking off. Awaiting the ISM data at 10 and the EIA Petrol report at 10:30. Link

Jonathan Levinson : 1/5/2006 9:52:30 AM

A 5.75B overnight repo from the Fed drains 8B net for the day.

Jonathan Levinson : 1/5/2006 9:44:16 AM

Volume breadth has firmed to +1.1:1 on the NYSE, +3.8:1 on the Nasdaq as QQQQ holds above the 30 and 60 min channel tops. This may well prove to be a sell signal, but with the daily cycle in a so-far very strong upturn, I'm in no hurry to jump in front of it. Link

Marc Eckelberry : 1/5/2006 9:38:23 AM

INTC at 30 monthly. Some of you may want to take partial profits. I'm still shooting for 28.23 if we can close above 26.33. Support is 25.70. Bullish confirmation would be when 10 ema crosses above 20 dma. Not quite there yet.

Jonathan Levinson : 1/5/2006 9:32:31 AM

Volume breadth is -1.7:1 on the NYSE, +3.3:1 on the Nasdaq at the open.

Jonathan Levinson : 1/5/2006 9:31:01 AM

QQQQ's 72 SMA is at 41.62 , 30/60 min channel resistance at 41.78-.80 , 30/60 min channel support 41.41.-.43 .

Jeff Bailey : 1/5/2006 9:25:16 AM

Matrix Service (MTRX) alert $9.40 ... called higher at $10.65 after the specialty construction service provider reported quarterly net income of $2.2 million, or $0.07 per share.

The company said it has raised its revenue outlook for fiscal 2006 to be between $450 million and $475 million, up from its previous view of between $400 million and $450 million.

--For 2006, two analysts on average are expecting revenue of $475.4 million, according to Reuters Estimates.

The company said it has dismissed Ernst & Young LLP as its independent registered public accounting firm effictive January 6, and has approved Delloitte & Touche LLP as a replacement for the fiscal year ending May 31, 2006.

Jane Fox : 1/5/2006 9:14:59 AM

Dateline WSJ Shoppers were selective on Christmas purchases, either splurging on a few hot items or holding out for steep discounts, resulting in modest December sales for most retail chains.

Many retailers struggled last month, as shoppers appeared to put off their buying until even later than in the past. There were a number of factors at play, including Hanukkah falling particularly late this year, on Dec. 25, and the New York City transit strike, which occurred in the critical final days before Christmas, hurting retailers in Manhattan.

Gift-card sales were also likely to push December business into January or even later; gift card sales are only recorded when they are redeemed.

Jane Fox : 1/5/2006 9:12:26 AM

Dateline WSJ Blackstone Group and Hewlett-Packard Co. are exploring a possible buyout of Computer Sciences Corp., according to people familiar with the matter, as private-equity buyers begin to sweep through the computer-outsourcing business.

Separately, private-equity firms could finalize a deal to buy Affiliated Computer Services Corp. for $8 billion as early as next week.

The discussions concerning Computer Sciences were described as preliminary, the people familiar with the matter said, and could well stumble on a number of issues ranging from price to ownership structure.

The relationship between Blackstone and H-P is still in flux. It is currently envisaged that H-P would initially own a minority stake in CSC, but it could later buy out Blackstone and any other private-equity owners

Jonathan Levinson : 1/5/2006 9:08:19 AM

Analysts are expecting a 1.2M barrel decrease in crude inventories in the 10:30AM report.

Jonathan Levinson : 1/5/2006 9:05:54 AM

QQQQ's 30 min cycle delivered a downphase yesterday that was so weak as to actually see the price continue rising as the oscillators declined. That downphase has stalled, in what is either a bearish divergence or a weak correction. In the former case, a breakdown in price from here could be very sharp, but price needs to actually decline for that to be valid. Meanwhile, this all occurred within the 60 min cycle upphase, which as of this morning is right at the top of its range and due for an imminent reversal lower. With QQQQ still failing to break and hold above 41.80, the bearish interpretation isn't yet invalidated, but any further upside this AM should be enough to do it. I will post the intraday SMA and channel points when they refresh at the opening bell.

Jonathan Levinson : 1/5/2006 8:54:16 AM

The Fed has 24.75B in various repos expiring today, and has just announced an 11B 14-day repo. 13.75B remain outstanding and will be addressed in the 10AM shorter-term announcement.

Jonathan Levinson : 1/5/2006 8:32:45 AM

Equities sink back toward their overnight lows, not yet testing them with only a slight loss, QQQQ still up a cent at 41.75. Bonds have weakened further, TNX now up 1.9 bps at 4.375%.

Jonathan Levinson : 1/5/2006 8:30:36 AM

Headlines:

U.S. INITIAL JOBLESS CLAIMS FALL 35,000 TO 291,000

U.S. INITIAL JOBLESS CLAIMS LOWEST SINCE SEPT. 2000

U.S. 4-WK AVERAGE INITIAL CLAIMS FALL 9,250 TO 316,750

U.S.CONTINUING JOBLESS CLAIMS UP 13,000 TO 2.72M

JOBLESS CLAIMS VOLATILE THIS TIME OF YEAR: DOL SPOKESMAN

Jonathan Levinson : 1/5/2006 8:23:51 AM

Ten year notes hold a 3/64 loss, and TNX opens +.8 bps at 4.364%. Five year yields (FVX) are up 7 bps at 4.293% and the 13 week rate (IRX) is up .3 bps at 4.085% ahead of the initial claims data.

Jonathan Levinson : 1/5/2006 8:21:57 AM

Headline:

SNOW: IDEA OF FEDERAL BUYOUT AGENCY FOR LOUISIANA HAS MERIT

Jonathan Levinson : 1/5/2006 8:13:11 AM

Headlines:

SNOW: CHINA SHOULD CONTINUE TOWARD CURRENCY FLEXIBILITY

SNOW SAYS INFLATION IN U.S. 'IS WELL IN CHECK'

SNOW: INVERTED YIELD CURVE NO LONGER A SIGN OF RECESSION

Jonathan Levinson : 1/5/2006 7:50:05 AM

Equities are holding above their overnight lows, slightly lower with ES trading 1279.75, NQ 1713, YM 10910 and QQQQ up 8 cents to 41.82. Gold is down 5.2 to 530.70, silver is down .145 to 9.028, ten year notes are down 1/16 to 109 23/32, crude oil is down .15 to 63.275 and natgas is down .415 to a session low of 9.78.

We await the 8:30 release of Initial claims, est. 320K, then at 10AM ISM services, est. 59, and at 10:30, the EIA Petrol report.

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