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Jeff Bailey : 7/15/2006 3:07:14 AM

Why mention July Max Pain values? (A trader once said... "I don't follow them, because the indexes rarely finish near the values.") I about flipped out of my chair!

In Friday's MM, I talk about how I believe, based on my experiences, hedge funds trade, think, and manage risk.

That is a building block of account management for any trader or investor.

A hedge fund isn't a capital manager for PURE DIRECTIONAL play. They'll "hedge" their bets (capital at RISK) here and there, this stock against that stock, this derivative against that derivative, this sector against that sector, this market against that market, this currency against that currency, etc. etc.

Surely when you look at my trade blotter, you see what I do. I'll buy full positions, partials, I sell full or partials. I'm long this, or short that, and I sell for this reason, or that reason. When I thought we should sell a portion of the SPY Puts, it was as MUCH ABOUT SELLING VOLATILITY and RISK OF POSSIBLY LOSING A decent ONE-DAY GAIN as anything.

As promised when I first started profiling trades years ago, I would only do so as though I were trading my own account. It is the ONLY way I believe I can trade, based on my firm belief that account management will keep me on the RIGHT SIDE of a market trade. That is, if I'm losing money, then I'm obviously wrong about something (scnenario, analysis, etc.). Even when/if I'm making money, but the gains are "small" ( percentage gain, or total capital gain) and working VERY HARD, then I'm NOT CERTAIN that I've got the MARKET figured out.

But let's take that trade (selling a put based on a "spike" in volatility) a step further.

Who has some RISK right now?

One could say Jeff's got some DIRECTIONAL RISK as he's BEAR, BEAR, BEAR in the MM Profiles. Yep! And I'm ready, or may have a plan on Monday to do something about it. Heck, on Thursday I "tried" to be BULL the SMH, but the market just didn't agree with me.

Ask any trader that has been buying calls the past month, and they'll tell you they have LITTLE RISK OF LOSING GAINS.

Ask any trader that has been buying puts the past month, and they'll most likely tell you they have GREATER RISK OF LOSING GAINS.

So... as of this minute... who is on the RIGHT SIDE of the TRADE? Also important is understanding who is on the WRONG SIDE of a trade.

One trader that could be on the WRONG SIDE of a trade is the now OUT THE MONEY NAKED PUT seller.

I say "could be" if he hasn't hedged that bet with either a SHORT in the stock, or a SHORT in the INDEX FUTURES.

One reason I think the markets hav been under selling pressure the past several weeks all began May EXPIRATION when the majors finished well away/below the "Max Pain" values. I could, or maybe have mentioned "10 good reasons" to be a bull the past year, quarter, month, but as the market gets new information each minute, hour, day, week, it assesses the RISKs that come with that information.

Let's say that there was a lot of NAKED PUT holders into May expiration, then in June the majors finish BELOW "Max Pain."

It is that very action that creats the NEED to sell SHORT another HIGHLY LEVERAGED security (like stock index futures) in order to HEDGE the incorrect judgement and being on the WRONG side of a NAKED options position.

(to be continued)

Jeff Bailey : 7/15/2006 1:27:31 AM

Now some updated July "Max Pain Theory" tabulations ...

QQQQ/NDX ... $38 ($1 increment) / 1,550 (25-pt inc.)

DIA ... $110 ($1 increment)

SPY/SPX ... $126 ($1 increment) / 1,270 (5-pt increment)

Jeff Bailey : 7/15/2006 1:12:29 AM

Now your three VOLATILITY indexes ...

VXN (tie with QQQQ) Link

VXO (tie with DIA) Link

VIX (tie with SPX) Link

Now we're back to MEASURING, and testing my 12:07:09 and 12:09:06 post. Do you see where I'm taking you?

What is a TOOL you have to MEASURE the RELATIVE MOVEMENT (up/down) of VOLATILITY vs. and INDEX? Yes! A Pivot Matrix!

Jeff Bailey : 7/15/2006 12:43:48 AM

Now ask yourself "why" (besides the FACT that the MARKET SELLS RISK) the technicals of those three markets (12:26:46) have different technicals.

It is then an understanding of what IS inside, and what IS NOT inside, and how each index/market is WEIGHTED that a day trader, or a short-term trader, or a swing-trader, or even a longer-term investor needs to have a grasp of.

Jeff Bailey : 7/15/2006 12:26:46 AM

Now look at these three bar charts ....

The weakest major index, or the one the MARKET sees/saw has having GREATEST DOWNSIDE RISK ... Link (well below 06/13/06 relative low)

Next weakest market from technical perspective (at its 06/13/06 relative low) Link

And third-weakest from a technical perspective Link

Jeff Bailey : 7/15/2006 12:12:20 AM

Hint #1: The MARKET SELLS RISK. The MARKET is an EXPERT at sniffing out RISK, then SELLING it.

Hint #2: The BEST OPTIONS TRADERS ... they SELL PREMIUM, or HIGH VOLATILITY when the RISK feared subsides (for a day, two days, a week, a month, a quarter, a year).

Jeff Bailey : 7/15/2006 12:07:09 AM

Question for an OPTION trader for Monday: What is the BIGGEST PROFIT POTENTIAL short-term trade an options trader can make under the SCENARIO of a "dead cat bounce?"

OI Technical Staff : 7/14/2006 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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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 : 7/14/2006 10:02:45 PM

Trade Blotter of CLOSED/July and OPEN MM Profiles at this Link

This week and again today I "talked" a lot about account and trade management. Hopefully you PRACTICED SOME of it today!

What is the current OPEN profile strategy weakness at this point? If you're saying "I'm too Bearish, then I would AGREE with you.

But! The MARKET can't take away, what a trader/investor has already booked in REALIZED gains.

Jeff Bailey : 7/14/2006 9:48:12 PM

Current OPEN MM Profiles at this Link ...

Today's Activity

Cover a portion (1/2 of the 1/2 position short) in shares of Black & Decker (BDK) at $75.12. ($+3.62/share, or +4.60%)

Risk management tells me NOT to be in a "gold stock" at this time and I thought it best we exit with small gain in shares of Newmont Mining (NEM) at the offer of $54.67 ($+0.20, or +0.36%).

New geopolitic events since profile (I did not profile SPY puts based on Middle East events yesterday afternoon) I thought a trader should take 1/2 of their puts off the table. Closed out one (1) of the two (2) S&P Dep. Receipt SPY Aug. $126 Puts (SPY-TV) at the bid of $3.60. (see some of today's VIX.X notes too) ($+1.05, or +41.18%)

I will continue to target $120.50 with the other 1/2 position and will establish a stop of $128.25 in the SPY for the remaining position.

Jeff Bailey : 7/14/2006 9:17:30 PM

NYSE, NASDAQ and SPX NH/NL Table found at this Link

Per today's 01:18:31 PM Post and 01:21:52 PM.

NYSE NH/NL current readings aren't surprising to a trader/investor. On 06/13/06 the NYSE Comp closed 7,720 and tonight we're at 7,950.

Aha! But the NASDAQ Comp NH/NL, now that should be "surprising!" This is what I would describe as bullish divergence. On 06/13/06 we close 2,073 and tonight we're at 2,037.

And the narrower S&P 500. Some sign of further weakness to come, or "softening at the bottom" that must be observed and followed going forward. On 06/13/06 the SPX goes out at 1,224 and tonight we're at 1,236 (intra-day low was 1,228). One could probably imagine that the same 34 stocks that hit 52-week lows on 06/13/06 were doing it again today. It is the other 18 that has some players being removed from the bullish field of play.

Jeff Bailey : 7/14/2006 8:52:24 PM

Closing Internals found at this Link

Jeff Bailey : 7/14/2006 8:38:35 PM

Closing U.S. Market Watch found at this Link

Marc Eckelberry : 7/14/2006 6:09:30 PM

Marc: I do live in Europe. Would you mind sharing what strategy your would use in trading the US overnight session? What would you look at in particular: if the European bourses were up or down, highs/lows of previous day US session, etc? And what times would you trade? Thank you

Thank you for your note. I trade the overnight session on occasion and absolutely love it. The problem is that I get no sleep...I had told readers a few months ago that I would indicate during the day when I would do these sessions and then trade them on the monitor. Frankly, a few traders were interested, but the idea died down.
The overnight session should only be traded with Globex instruments, as they are the only ones that honor stops. Forget YM, forget ZB and forget QM. Trade ES, ER or NQ only. I like ES the most, but for some the margin requirements are too high, so NQ does just fine (especially now, with the new spread: it is becoming my favorite overnight). The overnight session trades like commodities: it stays linear once a direction is set at a specific time, then it ususally does a blow off top or bottom. It's all about the time of night (day in Europe), and you must understand that pros trade it very heavily and they know how to knock your stops. Don't trade the lower volume times, unless you are establishing a position early on with some room. The use of pivots is critical (did you notice last night's early PERFECT low at NQ s1 (1477)? A great long trade overnight up to 1493.50)and oversold/overbought readings actually mean something, especially on the 10 mn time frame. You don't get the scalper noise (except during the low volume hours, but who cares, don;t go there). It's all pros and charts work very well with little slippage. It's the way of the future I think, since the US regular hours has become an absolute nightmare for veteran traders. It is polluted with "Starbuck" scalpers, happy to make a +$25 trade. As far as specific strategies, that would require an entire chapter of a book, so I will explore that with you piecemeal. I will tell you one thing: there is a bullish bias.

Jeff Bailey : 7/14/2006 5:05:20 PM

Hmmmm .... Lam Research (LRCX) $42.68 +0.30% ... (note for Monday if you hunger for tech right now).

It's crazy isn't it? As weak and out of favor as the sector and its bellwether (Intel) has been, why has LRCX performed so well?

Option Expiration? Company specific?

Jeff Bailey : 7/14/2006 4:58:08 PM

Hmmmm .... Altria (MO) $77.39 +0.88% (note for Monday)

Jeff Bailey : 7/14/2006 4:55:20 PM

Think about, or pretend you're running a hedge fund (some subscriber don't have to pretend) .... short futures into the weekend, long STRONGER equities.

If the hedge comes off near-term, QUICKLY buy back your futures, then its "no stock for you" on Monday especially in the "strong ones" where overhead supply is limited, or stock is still in a couple of month's base and has been shorted, just to be shorted.

I profiled OUT THE MONEY PUTS on Bidu.com (BIDU) $87.70 +5.14% for a reason. "Minimal capital risk" and if market wants to dump gains/bull risk on a negative event, then there's a lot of bull risk here. Piper's bullish call this morning is an "in your face" to bears type of call. That's a BOLD call in my opinion. To say "buy it regardless of what's happening in the Middle East" hints to me that Piper is SURE about something. Piper UPGRADED the stock to "market perform" from "underperform" back on 05/10/06 after stock gapped up from $61.38 to $77.00 and today they come with an "outperform" from "market perform." That's a call that hints to me Piper was looking for a pullback in order to upgrade further, didn't get it, but sees current events bringing SELLING as an opportunity to get some good buying liquidity, perhaps a short squeeze going to benefit their 05/10/06 upgrade.

Disclosure: I was SHORT Bidu.com into last night's close. I'm no longer short the stock.

Jeff Bailey : 7/14/2006 4:31:15 PM

Hmmmmm .... GRMN $97.27 -0.53% .... not willing to "flush it" this time are they? (note for Monday)

Jeff Bailey : 7/14/2006 4:29:57 PM

Hmmmm .... BOOM $30.58 -4.34% .... looking attractive from the long side (note for Monday).

Marc Eckelberry : 7/14/2006 4:45:58 PM

On that, I will fire up my Toyota Prius ( I am doing my part, I hope) and check out the California surf.

Marc Eckelberry : 7/14/2006 4:14:01 PM

I think if I hear the word Hezbollah or Hamas once more, I will puke. Let's do a real deal with Russia, take more of their oil over the darn middle-east and the preferential treatment we give them. Sick of those wackos.

Marc Eckelberry : 7/14/2006 4:09:23 PM

Some big cap tech stocks, trading at market multiples, are definitely getting some buyers today. INTC, DELL, MSFT, TXN

Marc Eckelberry : 7/14/2006 4:07:02 PM

No courage out there, not many sellers left, but no buyers. I mean, who wants to sell everthing they have now? To see it go back up in a month? Retail invetors are not as dumb as fund managers, who are like a bunch of hysterical ducks, never selling at highs and never buying at lows. Hedge funds do all the nasty work, although it isn't always on the up and up. Especially that naked short selling scandal. Hang'em high.

Keene Little : 7/14/2006 4:04:36 PM

ES consolidated today in a clear bear flag whereas YM consolidated in a flat correction. Both are continuation patterns (down) so we'll have to see what that means for Monday. I think we might see the consolidation continue a little longer, perhaps until Monday afternoon but this is a pretty clear setup for a short play. I hope everyone has a great weekend.

Keene Little : 7/14/2006 4:00:45 PM

I've been curious to see whether or not SPX can get back above its trend line along the lows since August 2004 (the bottom of its ascending wedge that I've been showing on the weekly charts in my Market Wraps). It looks like it's not going to be able to do it today (the daily chart shows a poke below and a close just about right on it at 1237).

This 5-min chart looks bearish because it has stopped at the line. The daily chart is potentially bullish having closed on/near the line. I still think we'll see some more downside action before setting up a bigger bounce. Link

Jane Fox : 7/14/2006 4:00:19 PM

Econ reports for Monday include:

8:30a.m. July Empire State Fed Manufacturing Index. Previous: 29.

9:15a.m. July Industrial Production. Previous: -0.1%.

9:15a.m. July Capacity Utilization. Previous: 81.7%.

Jeff Bailey : 7/14/2006 3:59:57 PM

MM Profiles Note: alert ... The ONLY trade I put on yesterday that was "Middle East Event" related was the BIDU puts.

Today's activity has been to either profit from the reaction, or REMOVE RISK from the account.

Marc Eckelberry : 7/14/2006 3:58:34 PM

Over the weekend, investors will look at these market multiples on growth stocks and they will wonder why they are not putting some money to work. If DOW 10725 holds up, it will bring in the big guns at some point. Hezbollah or whatever.

Marc Eckelberry : 7/14/2006 3:53:36 PM

New traders should always look at the 20 sma on ALL time frames. It is the most critical MA, much more than 200 dma, which is overhyped. 20 month, 20 week and 20 day are just naturals, bear markets cannot survive above the 20 month and bulls cannot survive below. As for intraday time frames, switch to ema.

Jeff Bailey : 7/14/2006 3:51:01 PM

Per 03:48:07 ... Futures have WAY MORE LEVERAGE to them, which can QUICKLY be removed if need be.

Marc Eckelberry : 7/14/2006 3:49:47 PM

DOW 20 month is 10726. No way they were going to close it below that today.

Marc Eckelberry : 7/14/2006 3:48:58 PM

DOW dble bottom off June low. They are going to close that one above 10750.

Marc Eckelberry : 7/14/2006 3:47:24 PM

QQQQ back above 36 and I should have stayed with my gut instead of booking only +3 on that last trade.

Jeff Bailey : 7/14/2006 3:48:07 PM

See... I think hedge funds will be net short futures markets, but they'll be long equities.

I SAY THIS NOW for Monday morning. If stock futures are ES +7 or more, that becomes a BUY DAY.

Marc Eckelberry : 7/14/2006 3:45:50 PM

I have to make a correction. NVDA 20 month MA s at 17.60, which is why you are seeing this action here. Nevertheless, I will leave the stop at 17.15 for now, but it chould be moved up to 17.45 or so once the coast is clear. It's a very key support level for that stock (any stock).

Jeff Bailey : 7/14/2006 3:44:25 PM

Swing trade short cover partial alert ... Let's cover part (1/2 of the 1/2) Black & Decker (BDK) short here at $75.12 -1.17%. This leaves us short 1/4. If we get a rally next week, short again. Homebuilders very weak, and consumer discretionary very much in question in my opinion.

Jane Fox : 7/14/2006 3:43:49 PM

Looking for YM 10767

Marc Eckelberry : 7/14/2006 3:46:51 PM

As I said, I would be amazed if they close it below QQQQ 36, but these days...

Jane Fox : 7/14/2006 3:39:51 PM

TICKS +1000 YM 10782

Jeff Bailey : 7/14/2006 3:38:15 PM

Can kind of see the gold commodity edging lower, with gold stocks rising to the close trade taking place.

Was thinking that a hedge fund probably thinks that recent 5-day differential in % change has them shorting gold and buying some beta in the stocks for the arbitrage.

20-day % just about equal, but 5-day % "out of whack.

When you look at the YrNet%, you see why gold commodity and and gold STOCK INVESTORS argue about which one should be owned over the long term.

Marc Eckelberry : 7/14/2006 3:33:21 PM

Thanks Jeff.

Marc Eckelberry : 7/14/2006 3:32:21 PM

But where was Ronaldinho? All that hype. Anyway, I was sad smaller countries that played very well, like Portugal and Ghana were so badly referreed and cheated out of better results.

Jeff Bailey : 7/14/2006 3:30:37 PM

Thats a GREAT day Marc! Especially from the long side in a down market.

Jeff Bailey : 7/14/2006 3:28:28 PM

03:00 Internals found at this Link

Marc Eckelberry : 7/14/2006 3:28:08 PM

Day recap: NQ +8.
Way too much work. I will do the week later.

Marc Eckelberry : 7/14/2006 3:24:14 PM

And on that, I am out. Next week, we will play with opex.

Marc Eckelberry : 7/14/2006 3:23:50 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 3:23:39 PM

Happy Bastille day to our French readers, by the way. Zidane blew it near the end, but it was still one heck of a match and one heck of a career by that wild man.

Jane Fox : 7/14/2006 3:22:04 PM

Look at how the markets have retested that bear flag.. Link

Jeff Bailey : 7/14/2006 3:15:03 PM

Swing trade short stop alert for NEM

Jeff Bailey : 7/14/2006 3:13:49 PM

Newmont Mining (NEM) $54.63 +0.96% ...

Marc Eckelberry : 7/14/2006 3:10:14 PM

Got that right, Jane. Speaking of time zones, if I ever move to Europe, I will make a living trading the US overnight session. It is like ringing up the cash register.

Marc Eckelberry : 7/14/2006 3:08:58 PM

QQQQ 36 and that is where they want it, not below, me thinks.

Jane Fox : 7/14/2006 3:08:16 PM

Lunch time for us westerners - heh Marc?

Marc Eckelberry : 7/14/2006 3:08:26 PM

NQ Exit Point Alert -
Long 1471, move stop up to even.
They can have it, I am burned out. Speaking of gut, I am going to make myself a sandwich.

Jeff Bailey : 7/14/2006 3:06:59 PM

Stay al_rt folks .... don't get lulled to sleep.

Jane Fox : 7/14/2006 3:06:48 PM

TICKS +1000 YM 10795

Marc Eckelberry : 7/14/2006 3:06:41 PM

+5.5 partial, I wil move remaining up.

Jeff Bailey : 7/14/2006 3:06:12 PM

Or they're lurking in the shadows, waiting to make their move. It could be sudden and without warning.

Marc Eckelberry : 7/14/2006 3:05:56 PM

Hey, my gut is working

Marc Eckelberry : 7/14/2006 3:05:44 PM

This is how bottoms are formed, when volume dries up from complete lack of inventory to sell.

Marc Eckelberry : 7/14/2006 3:04:29 PM

No one is around, everyone is sick of the markets, so they can do what they want now.

Jeff Bailey : 7/14/2006 3:04:29 PM

03:00 Market Watch at this Link

Quickly noted the 5, 10 and 52-week % Change in $HUI.X and GLD.

Marc Eckelberry : 7/14/2006 3:02:38 PM

this is just gut feeling, so don;t put a whole lot on it.

Marc Eckelberry : 7/14/2006 3:01:48 PM

Lows held up and shorts are getting worried, especially after all the gains they made. We should get a squeeze soon

Jeff Bailey : 7/14/2006 3:00:36 PM

How much is NEM, GG and GLD Up/Down the past 5-days? The difference could be the "fear premium" that has suddenly been factored in by the MARKETS.

Marc Eckelberry : 7/14/2006 3:00:24 PM

They are going to drive the close up

Marc Eckelberry : 7/14/2006 3:00:15 PM

NQ Entry Point Alert -
Long 1471, stop 1468.

Jeff Bailey : 7/14/2006 2:59:22 PM

Day before shorting GG, got stopped on NEM from in $54.19 and stop at $55.56.

NEM $54.40 here.

Jeff Bailey : 7/14/2006 2:58:10 PM

Hmmmmm Goldcorp (GG) $29.57 -0.10% ... and we covered a short on GG 07/12 at $30.62 for a gain!

Marc Eckelberry : 7/14/2006 2:57:45 PM

3pm turn

Marc Eckelberry : 7/14/2006 2:56:59 PM


Marc Eckelberry : 7/14/2006 2:55:54 PM

Waiting for 1466, or nothing.

Marc Eckelberry : 7/14/2006 2:55:41 PM

I can't take this anymore.

Marc Eckelberry : 7/14/2006 2:55:32 PM

NQ Exit Point Alert -

Keene Little : 7/14/2006 2:53:29 PM

The pullback from this afternoon's high is also corrective which means we'll likely motor sideways into Monday or get another leg up in the bounce that started at this morning's low. But the whole thing looks exactly like I suspected we'd see--it's a correction to the decline which means we've got more downside work to do. You could scalp a few pennies to the long side but the better scalp is a short that will probably set up either at the end of today or on Monday.

Marc Eckelberry : 7/14/2006 2:52:18 PM

NQ Exit Point Alert -
Lower stop to 1468. We are going for it, no more scalping.

Marc Eckelberry : 7/14/2006 2:51:00 PM

QM loses 77. Again. If it lasts, we will get a run to 1580 on NQ

Jeff Bailey : 7/14/2006 2:50:19 PM

Get six positions open and it will keep you on your toes!

Jeff Bailey : 7/14/2006 2:49:40 PM

Boy ... I think today's trade is EXCITING!

I feel great pressure and wonder if somebody will flinch, send a stock surging higher, or plunging lower, drawing a broader market reaction.

Marc Eckelberry : 7/14/2006 2:49:28 PM

Hold the fort, men. Hold it.

Marc Eckelberry : 7/14/2006 2:47:21 PM

NQ Entry Point Alert -
Long 1471.75, stop 1469.75.

Marc Eckelberry : 7/14/2006 2:46:54 PM

getting boring

Marc Eckelberry : 7/14/2006 2:46:46 PM

NQ Exit Point Alert -

Jane Fox : 7/14/2006 2:46:56 PM

TICKS +1000 YM 10773.

Jeff Bailey : 7/14/2006 2:46:23 PM

If GLD were to "plunge" to $64.00 by the close, THEN I could see holding the NEM trade, if its price fell enough to give a cushion on a gap higher Monday. Gold STOCKS are tought aren't they? They are "just a stock" and if the stock market "crashes," a mining stock can "crash" with it.


You be the judge .... just speaking what might be a trader's thoughts as to risk management.

Marc Eckelberry : 7/14/2006 2:46:21 PM

big 1 mn candle

Marc Eckelberry : 7/14/2006 2:45:23 PM

NQ Exit Point Alert -
raise stop to 1469.50, even.

Jane Fox : 7/14/2006 2:43:58 PM

Not Marc :)

Marc Eckelberry : 7/14/2006 2:43:51 PM

They are holding the lows in the face of huge pressure. Opex?

Marc Eckelberry : 7/14/2006 2:43:34 PM

NQ Entry Point Alert -
Long 1469.50, stop 1463.

Jane Fox : 7/14/2006 2:43:25 PM

Let's take a poll how many think we will break daily lows?

Jeff Bailey : 7/14/2006 2:42:51 PM

GLD $66.00 ... fading a bit from $66.42.

660.00 from 664.20 is the way I think/measure GLD.

Jane Fox : 7/14/2006 2:41:54 PM

* August crude climbs closer to the session's record high
* August crude last up $1, or 1.3%, at $77.70/brl
* August natural gas taps 3-week high of $6.45/mln btu
* August natural gas last up 28.1 cents at $6.41

Marc Eckelberry : 7/14/2006 2:41:50 PM


Marc Eckelberry : 7/14/2006 2:41:29 PM

tick divergence

Marc Eckelberry : 7/14/2006 2:40:53 PM

wait for the tick

Jeff Bailey : 7/14/2006 2:40:25 PM

Swing trade short lower stop alert on Newmont Mining (NEM) $54.38 .... to $54.67.

Marc Eckelberry : 7/14/2006 2:40:17 PM

smells too much like distribution so I will step aside a second

Marc Eckelberry : 7/14/2006 2:39:51 PM

NQ Exit Point Alert -

Jane Fox : 7/14/2006 2:37:27 PM

NEW YORK (MarketWatch) -- Petco Animal Supplies on Friday said it agreed to be acquired by two private equity groups for about $1.8 billion, including debt, sending shares of the pet-supply retailer soaring. Under the terms of the deal, Leonard Green & Partners and Texas Pacific Group -- the same investors that took Petco private in 2000 -- will pay $29 a share, a 49% premium to Petco's Thursday closing price.

Shares of Petco (PETC)(27.91, +8.46, +43.5%) were up 43.5% at $27.91 in afternoon trading. Link

Marc Eckelberry : 7/14/2006 2:35:40 PM

EVerytime I play a QM drop below 77, it bounces.

Marc Eckelberry : 7/14/2006 2:35:10 PM

NQ Entry Point Alert -
Long 1471.75, stop 1468.

Jane Fox : 7/14/2006 2:35:00 PM

SAN FRANCISCO (MarketWatch) -- Chemed Corp.'s (CHE) shares fell 20% to $40.52 midday Friday after the company said late Thursday that its 2006 earnings could be cut by 9 cents a share to 14 cents a share due to potential Medicare cap billing limitations that could total $4 million to $6.1 million. Link

Marc Eckelberry : 7/14/2006 2:34:21 PM


Marc Eckelberry : 7/14/2006 2:34:12 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 2:33:47 PM

I would be amazed if we close below QQQQ 36. Amazed.

Jane Fox : 7/14/2006 2:32:58 PM

See how the VIX broke its "bear" flag as well. Link

Jeff Bailey : 7/14/2006 2:32:20 PM

Baidu.com (BIDU) $87.23 +4.57% ... in a WORLD of its own, and not close to its daily low of $85.21.


Spells BIG TROUBLE for a BEAR if "bullish reaction" from markets next week.

Marc Eckelberry : 7/14/2006 2:32:09 PM

I thought we would get a new low before the turn, but QM is struggling also. Scalp this as much as you want.

Marc Eckelberry : 7/14/2006 2:31:27 PM

2:30 turn

Marc Eckelberry : 7/14/2006 2:31:09 PM

NQ Entry Point Alert -
Long 1471, stop 1468.

Jane Fox : 7/14/2006 2:30:55 PM

The red arrows are your retest of the bear flag. Classic. Love those bear flags. Link

Marc Eckelberry : 7/14/2006 2:29:44 PM


Jeff Bailey : 7/14/2006 2:29:35 PM

TEVA simply "stuck" at $30.50

Marc Eckelberry : 7/14/2006 2:28:49 PM

Back to trying the lower low

Jeff Bailey : 7/14/2006 2:28:46 PM

Agree Marc ... NEM $54.39 also approaching low of $54.31.

BDK approaching low of $74.27

NYT approaching low of $23.50.

Marc Eckelberry : 7/14/2006 2:28:36 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 2:28:13 PM

QM is dropping again.

Marc Eckelberry : 7/14/2006 2:28:03 PM

NQ Entry Point Alert -
Long 1471, stop 1468.

Jeff Bailey : 7/14/2006 2:26:35 PM

Newmont Mining (NEM) trade alert $54.47 +0.66% ... this trade will be closed at by today's close. Don't need the short exposure on this type of stock over the weekend.

For weakness to the close (I've been snugging down stop) WEEKLY S1 is closest at $53.86, then DAILY S1 at $53.45.

Marc Eckelberry : 7/14/2006 2:25:22 PM

remember 1465.75, is 50% June

Marc Eckelberry : 7/14/2006 2:25:09 PM

test of lows coming

Marc Eckelberry : 7/14/2006 2:25:00 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 2:24:17 PM

I am goingto let the QM noise pass

Marc Eckelberry : 7/14/2006 2:22:49 PM

NQ Exit Point Alert -
Lower stop to 1469 again

Jane Fox : 7/14/2006 2:22:06 PM

Cracker Barrel unit Logan's Roadhouse files $350 mln IPO

Jeff Bailey : 7/14/2006 2:21:52 PM

You short oil Marc?

Marc Eckelberry : 7/14/2006 2:21:27 PM

September contract sold off at 79.70. That tells you something.

Jane Fox : 7/14/2006 2:20:53 PM

* Moody's cites high fuel prices, shift away from SUVs
* Moody's rating outlook on ford is 'negative'

Marc Eckelberry : 7/14/2006 2:20:33 PM

Everyone knows if there is a resolution of the crisis over the weekend, oil will drop $5.

Marc Eckelberry : 7/14/2006 2:20:08 PM

QM is getting dropped.

Marc Eckelberry : 7/14/2006 2:19:55 PM

NQ Exit Point Alert -
Raise back to 1471.75, even.

Jeff Bailey : 7/14/2006 2:20:19 PM

Yesterday I tried the "cornered bull" with an SMH long, but the angry bear was simply too strong for my stop and assessment of risk.

Jane Fox : 7/14/2006 2:19:35 PM

Moody's downgrades Ford (F) credit to 'B2' from 'B3'

Marc Eckelberry : 7/14/2006 2:19:27 PM

NQ Exit Point Alert -
lower stop to 1469

Jeff Bailey : 7/14/2006 2:18:16 PM

But trader's may want to take note of Marc's bullishness and the psychological impact a positive semiconductor trade can have on traders and market participants alike.

That trade will take hold at some point and the cornered bull will release its fury.

Marc Eckelberry : 7/14/2006 2:17:45 PM

NQ Exit Point Alert -
Long 1471.75, raise stop to even on remaining.

Marc Eckelberry : 7/14/2006 2:17:15 PM

+4 partial

Marc Eckelberry : 7/14/2006 2:17:08 PM


Jane Fox : 7/14/2006 2:16:57 PM



Jane Fox : 7/14/2006 2:16:20 PM



Jeff Bailey : 7/14/2006 2:16:13 PM

There could be some sharp action into the close though as that will most likely be when the bull/bear fight takes place (how short/long does the MARKET want to be into the weekend).

Marc Eckelberry : 7/14/2006 2:15:34 PM

QM drop, let's go for it

Marc Eckelberry : 7/14/2006 2:15:25 PM

NQ Entry Point Alert -
Long 1471.75, stop 1469.

Marc Eckelberry : 7/14/2006 2:14:35 PM

I can't win if QM stays above 77.50

Jane Fox : 7/14/2006 2:14:25 PM

I have to agree Jeff, I think the bears are firmly in control and have been all day.

Marc Eckelberry : 7/14/2006 2:14:20 PM

NQ Exit Point Alert -

Jeff Bailey : 7/14/2006 2:14:18 PM

Tough to smell any "bear blood" today Marc.

Going to be tough sell to make bull bets into the weekend.

Scalp longs maybe, but pops are going to find just as many scalp sellers in my opinion.

Marc Eckelberry : 7/14/2006 2:12:08 PM

NQ Entry Point Alert -
Long 1473.50, stop 1471..50

Jeff Bailey : 7/14/2006 2:10:38 PM

SPY $123.40 -0.48% ... ASSUMING week's low/high has been established and ASSUMING a close of $123.50 ... WEEKLY Pivot Levels for next week would be ... 119.99, 121.74, Piv= 124.59, 126.34, 129.19.

Jane Fox : 7/14/2006 2:10:15 PM

... and that is always bearish.

Jane Fox : 7/14/2006 2:10:03 PM

AD volume plunging again.

Marc Eckelberry : 7/14/2006 2:10:02 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 2:09:22 PM

Can't type fast enough

Marc Eckelberry : 7/14/2006 2:09:15 PM

NQ Entry Point Alert -
Long 1573, stop 1571.

Marc Eckelberry : 7/14/2006 2:08:54 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 2:08:42 PM

Price is not following these ticks,

Marc Eckelberry : 7/14/2006 2:07:14 PM


Marc Eckelberry : 7/14/2006 2:07:08 PM

let's move those ticks up

Marc Eckelberry : 7/14/2006 2:05:55 PM

let's get a little QM drop

Marc Eckelberry : 7/14/2006 2:04:13 PM

NQ Entry Point Alert -
Long 1472.50, stop 1469.

Marc Eckelberry : 7/14/2006 2:03:23 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 2:02:29 PM

Back in

Jane Fox : 7/14/2006 2:02:24 PM

HMMM thought these could be bear flags but I was giving the bulls the benefit of the doubt and they were not worthy of it. Link

Marc Eckelberry : 7/14/2006 2:02:17 PM

NQ Entry Point Alert -
Long 1472.50, stop 1469.25.

Marc Eckelberry : 7/14/2006 1:59:43 PM

Waiting out this QM bid a litte.

Marc Eckelberry : 7/14/2006 1:59:25 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 1:59:16 PM

The horror, the horror...

Marc Eckelberry : 7/14/2006 1:57:54 PM

Bt of course, QM bids and now I am about to get out of dodge.

Marc Eckelberry : 7/14/2006 1:57:11 PM

I smell bear blood.

Marc Eckelberry : 7/14/2006 1:56:24 PM

NQ Exit Point Alert -
Long 1472.25, raise stop to even.

Marc Eckelberry : 7/14/2006 1:58:56 PM

ALERT: NVDA long Jan 17.5 calls at 3.50, stop is conditional at 17.15 underlying. GTC.

Marc Eckelberry : 7/14/2006 1:54:29 PM

NVDA did a nice bounce off 20 month MA. That will be the line in the sand, and you might want to put a conditional stop at 17.15.

Marc Eckelberry : 7/14/2006 1:53:15 PM

No traction either way, but bulls are starting to hold a slight edge

Jane Fox : 7/14/2006 1:49:40 PM

Looks like the TICK fades are working again.

Jane Fox : 7/14/2006 1:50:13 PM

McMillan's Weekly commentary

The bulls had every opportunity to move the market higher over the past couple of weeks, but they were unable to do so. Even before today's global problems surfaced, the bulls were woefully lacking in ability to counteract the bearish trends. As a result, $SPX slipped back below support (1255) and NASDAQ made new lows. It now appears that the bears are in charge again, and it would take a whole new setup of buy signals to generate another rally. Perhaps $SPX will find support near 1240 again, as it did in the second half of June, but it's more likely that it will try to retest the June lows near 1220. We had expected such a retest to take place, although we thought it might be later this year. When a retest takes place, we look for divergences: are the technical indicators in better or worse shape than the first time the averages visited this level? That will be important, and it's something that we'll definitely be keeping an eye on. For example, from Figures 2 & 3, we can see where the put-call ratios were when $SPX bottomed out in June. Will they be higher if $SPX trades down there again? If they are, that's bearish, but if they're lower, that would be a bullish divergence.

Speaking of the equity-only put-call ratios, they have been on buy signals for 2-3 weeks, but they were mostly alone in that stance and hence nothing much ever got going on the upside. They may roll over and start moving higher again. If that happens, they would revert to sell signals. It's possible.

Market breadth has been poor all along, and nothing has occurred to change that. Breadth indicators are bearish at the current time.

Finally, the volatility indices ($VIX and $VXO) had been taking a rather benign view of this decline when it first started about a week ago. However, they are now moving sharply higher, which is bearish while it's ongoing. Eventually another spike peak in $VIX would be bullish, but it's too early to call for that yet.

In summary, $SPX is going to try to find support at 1240 and then 1220. If both give way, this could get very nasty. In the meantime, we will take a somewhat bearish outlook unless new buy signals set up something that doesn't necessarily happen overnight.

Jeff Bailey : 7/14/2006 1:43:56 PM

Bearish swing trade short lower stop alert ... on Newmont Minings (NEM) $54.67 +1.03% .... to $54.82.

Today's "dynamic" 50% at $54.81.

Jane Fox : 7/14/2006 1:42:23 PM

TICKS reached at +1000 with YM at 10810. 15 points would be 10795.

Jane Fox : 7/14/2006 1:39:48 PM

TICKS +1000 watch to see if the bears can overtake the bulls here and if not then we have a divergence from yesterday.

Jeff Bailey : 7/14/2006 1:40:15 PM

Teva Pharma (TEVA) $30.50 -0.03% Link ... with bearish vertical count already met, I wonder if the MARKET didn't already know about today back in April at $39.00.

Stocks can exceed, meet, or sometimes never achieve their vertical counts, but over the years, it is amazing how many we see meet their vertical counts as the market is all knowing.

Jane Fox : 7/14/2006 1:37:24 PM

The VIX will have to break out of its regression channel as well and also return to successfully (unsuccessfully?) retest it. Link

Jeff Bailey : 7/14/2006 1:36:55 PM

On CNBC the other night, I think it was Dylan Ratigan's show, that trader said "sell short FRX" has he was thinking FRX would lose the Lexapro case and benefit TEVA.

FRX shorts get squeezed this morning. If traders had the "short FRX and long TEVA trade on" then I'm fascinated by TEVA's $30.50 line in the sand.

Jane Fox : 7/14/2006 1:34:46 PM

Since the bears have the ball today (according to the internals) I need to have the bulls prove to me that they have taken it and are able to run with it. To me that would be breaking out of these regression channels and a return to test them - or rather a successful return to test them. Now since the AD line is well below -1000 asking for it to get above 0 is probably asking too much but above -1000 is not asking too much. Later I will show you what I require of the very important VIX. Link

Jeff Bailey : 7/14/2006 1:31:03 PM

Teva Pharma (TEVA) $30.50 (unch) ... check out a 5-minute interval chart.

FRX news ragarding Lexapro patent.

Jeff Bailey : 7/14/2006 1:30:16 PM

Dollar Index (dx00y) 86.17 +0.44% ... Question: Flight to quality? Or yesterday's budget figures?

Question can also be directed to gold, silver, or other hard assets."

Always a dilemma, which is best left to account/trade management.

Jeff Bailey : 7/14/2006 1:21:52 PM

A BEAR that has been ruthless and shorting the NQ, hungering for handsome gains. You too will be monitoring things.

At some point, "the bear eats too much" and can be chased off by a pesky coyote.

The bull becomes cornered. How much fight will he have left in him? For the bullish traders, it is being able to have the cash to fight at this point and not having overleveraged in a trade, or used a protective stop to have that cash.

Jane Fox : 7/14/2006 1:15:32 PM

NEW YORK (MarketWatch) - Gold futures rallied afresh Friday, climbing to over $660 an ounce, as violence between Israel and Lebanon drove crude oil prices to unprecedented highs, fuelling safe-haven demand for gold. Gold for August delivery was last up $12.30 at $666.70 an ounce on the New York Mercantile Exchange, reaching its highest level since May 30.

With the escalation of violence and political tensions around the world this week, gold's safe-haven allure has spurred buying.

On Thursday, Israel intensified its attacks on Lebanon, continuing to bomb Beirut's international airport, major roads, power and communications infrastructure. Earlier this week, deadly train bombings in India's financial center of Mumbai and developments surrounding Iran's and North Korea's nuclear ambitions have also boosted demand for gold.

Jeff Bailey : 7/14/2006 1:18:31 PM

01:00 Internals found at this Link

What to Monitor and Understand: Over the years, I've given traders and investors some analogies to think of, when observing NH/NL indications. The "inchworm" and a "soggy cardboard box." Now I focus a bit on the NASDAQ NH/NL 10-day ratio. It will likely reverse lower at 34%, but begin to monitor its "rate of change." You've picked up a box full of books haven't you? And the bottom fell out? At one point, you sensed it giving way, you knew it was going to give in. Was it a slow feeling, where you could quickly shift your hand underneath and support it, or did it feel as if it was giving way, and before you could put it on your knee and hold it, all the books just fell at your feet? Observe and sense.

Jeff Bailey : 7/14/2006 1:03:06 PM

01:00 Market Watch found at this Link

Keene Little : 7/14/2006 1:03:21 PM

Back for a look and I see ES has made a nice 3-wave bounce off this morning's low, and achieved two equal legs up at 1243.25. This looks like a very clear corrective bounce and should lead to new lows on Monday. But again, new lows should be relatively minor. I just think it's a touch too early to be thinking about buying it unless you're just scalping. We'll probably get another pullback this afternoon as part of the consolidation.

Jeff Bailey : 7/14/2006 1:00:35 PM

Should I issue a "refinance your mortgage" for our friends in Japan? .... Certainly so! Or if you've got an ARM, convert it to a fixed.

Jane Fox : 7/14/2006 12:59:46 PM

NEW YORK (MarketWatch) - Shares of small and mid-cap brokerage and investment banking firms slipped Friday as analysts cautioned that second quarter earnings may be pressured by weak stock markets, and the firms face a difficult climate in the short term.

"The decline in the equity markets and lower block-trading activity in the second quarter will likely translate into less robust equity trading results," wrote Goldman analyst William Tanona in a note to clients issued Friday.

Meanwhile, David Trone, an analyst with Fox-Pitt Kelton, said mid-sized brokers may report good results in the coming weeks, but those numbers could cool before the end of the year.

Jeff Bailey : 7/14/2006 12:59:06 PM

Haven't even gotten around to updating traders on foreign markets.

Bank of Japan did raise the expected 25bp.

Still some relatively "free money" at 0.25%.

Jane Fox : 7/14/2006 12:57:47 PM

NEW YORK (MarketWatch) -- Home-building stocks were trading lower Friday after D.R. Horton Inc., the nation's largest builder, cut its full-year earnings forecast by almost a third due to tough conditions in the residential-real-estate market. D.R. Horton (DHI) late Thursday reported third-quarter sales orders fell to $3.8 billion, or 14,316 homes, from $4.1 billion, or 14,980 homes, in the year-earlier period. The figures indicate drops of more than 7% in dollar value and more than 4% in units.

Donald Horton, chairman of the S&P 500 constituent based in Fort Worth, Texas, noted the "difficult selling conditions the homebuilding industry is experiencing.

Jeff Bailey : 7/14/2006 12:55:34 PM

Ameritrade up and running

Jeff Bailey : 7/14/2006 12:48:26 PM

Swing trade short lower stop alert for Newmont Mining (NEM to $54.90.

Jeff Bailey : 7/14/2006 12:46:13 PM

I'd sell some of my SPY puts to, but I'm "on hold" for a client representative.....

Jeff Bailey : 7/14/2006 12:45:24 PM

BIX 369.02 -0.15% ....

Jeff Bailey : 7/14/2006 12:44:45 PM

Sell some jacked premiums .... manage the account. Hold other 1/2 and see what happens. Build profits!

Jeff Bailey : 7/14/2006 12:43:25 PM

VIX 18.32 after DAILY R1

Jeff Bailey : 7/14/2006 12:42:49 PM

Swing trade put close out 1/2 position for the SPY Aug 126 Puts (SPY-TV) at $3.60.

Jane Fox : 7/14/2006 12:34:22 PM

AD volume continues to plunge to new daily lows so the bulls need to get out of the water.

Jeff Bailey : 7/14/2006 12:33:33 PM

Was considering AMTD as a post-summer bullish play, but this morning's "shut down" sours me on the idea. Maybe e-Trade later this summer a better candidate.

Jeff Bailey : 7/14/2006 12:30:18 PM

Ameritrade (AMTD) $13.38 -2.33% ... System is down this morning.

Remember this as they will likely get a great number of account closings from their day trading clients.

Marc Eckelberry : 7/14/2006 12:20:31 PM

+3 partial now.

Marc Eckelberry : 7/14/2006 12:20:23 PM

we just need to get back above 1477.

Marc Eckelberry : 7/14/2006 12:19:27 PM

every bit counts.

Marc Eckelberry : 7/14/2006 12:18:53 PM

NQ Exit Point Alert -
Long 1472.25, raise stop to 1469.25.

Marc Eckelberry : 7/14/2006 12:17:53 PM

NQ Entry Point Alert -
Long 1472.25, stop 1468.

Marc Eckelberry : 7/14/2006 12:17:24 PM

QM bid, let's get the drop.

Marc Eckelberry : 7/14/2006 12:17:14 PM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 12:16:28 PM

Another deadly QM bid.

Marc Eckelberry : 7/14/2006 12:14:25 PM

SMH green, not SOX. That is due to the weight INTC carries with SMH. INTC is green.

Marc Eckelberry : 7/14/2006 12:13:34 PM


Marc Eckelberry : 7/14/2006 12:12:56 PM

NVDA at 20 monthly MA. There is a cost avergae play here on those calls, but I would not do that. Wait for a bounce if you are not comfortable. Otherwise, just let it ride into closer to Vista.

Marc Eckelberry : 7/14/2006 12:10:30 PM

Forget holding anything else over.

Marc Eckelberry : 7/14/2006 12:10:03 PM

That is why I suggest QQQQ September 35 or 36 calls ahead of the weekend. Yes, WWW3 could happen, but then again, option guys are like nukes when it comes to a 5 pc ratio to protect. It's a gamble, but a pretty good one. And you get time. The markets will come back, weekly RSI is getting just like October 2002.

Jeff Bailey : 7/14/2006 12:05:31 PM

Excellent reporting from CNBC regarding trader's thoughts of .... "Do I want to go home net long, or net short?"

Not just equities, but crude oil, gold, you name it!

Think about it. "Good, or bad events" over the weekend could have the momentum (up or down) quickly reversing.

This is where ACCOUNT MANAGEMENT becomes so important!

Marc Eckelberry : 7/14/2006 12:02:10 PM

Stepping away, don;t let thme stop me out. Exit target will be 1490.

Marc Eckelberry : 7/14/2006 12:01:35 PM

If we can get the opposite pattern as yesterday, in other words selling that holds until 11:30, then a closing bounce, we wil set up a rally on Monday if there is still oil flowing out of Iran.

Jane Fox : 7/14/2006 12:01:04 PM

If you are inclined to take a long I would NOT use YM, it remains the weaker market.

Jane Fox : 7/14/2006 12:00:25 PM

Looks like the -1000 TICK reading was the bell that rung at the bottom. This a divergence from yesterday when those readings hardly made a blip.

Marc Eckelberry : 7/14/2006 12:00:17 PM

NQ Exit Point Alert -
Long 1469.50, raise stop back to even. Worst is over.

Marc Eckelberry : 7/14/2006 11:56:03 AM

QM bid. Jeez.

Marc Eckelberry : 7/14/2006 11:55:34 AM

Just in time. These guys have my number, 1469.50 was the hit.

Marc Eckelberry : 7/14/2006 11:53:59 AM

NQ Exit Point Alert -
Lower stop to 1468.

Marc Eckelberry : 7/14/2006 11:53:35 AM

I would not hold any long futures in equities over the weekend

Marc Eckelberry : 7/14/2006 11:53:02 AM

This is a good spot to pick up some QQQQ 35 or 36 September calls.

Jeff Bailey : 7/14/2006 11:47:22 AM

Will try and get as much of the aversion to equity risk as we can in the Newmont Mining (NEM) trade as we can today.

Marc Eckelberry : 7/14/2006 11:45:51 AM

You have to be flexible, especially with NQ. All those scalpers in there and you can't count on too much precision. If I could not have been here, my signal wouldd have been long at 1470, with a stop at 1463. But I had the luxury to play with it. Now we could go back down there, no doubt, this is why the stop is at even, and we enter then closer to 1465.

Jeff Bailey : 7/14/2006 11:45:57 AM

Swing trade short lower stop alert for the 1/2 position short in Newmont Mining (NEM) $54.75 +1.18% ... to $55.35.

I thought yesterday's budget figures would have gold and gold stocks falling. I didn't account for geopolitical events that have unfolded, and change in market psychology.

I agree with Jane that the more bearish sentiment to stocks probably capping gains on NEM today.

With other bearish plays doing well, this trade will be closed by today's session close.

Marc Eckelberry : 7/14/2006 11:43:59 AM

Close enough to work it: Link

Marc Eckelberry : 7/14/2006 11:41:13 AM

NQ Exit Point Alert -
Long 1469.50, raise stop to even

Marc Eckelberry : 7/14/2006 11:41:00 AM

But NQ holds its ground

Marc Eckelberry : 7/14/2006 11:40:44 AM

QM bid again

Jane Fox : 7/14/2006 11:39:28 AM


Jane Fox : 7/14/2006 11:39:03 AM


Marc Eckelberry : 7/14/2006 11:38:50 AM

remaining will be moved up

Marc Eckelberry : 7/14/2006 11:38:27 AM

+3 partial now.

Marc Eckelberry : 7/14/2006 11:37:52 AM

We will stay in this one with a wider stop. I am confident 1465/QQQQ 35.74 (50% June) will hold today, view the slugihs decline and impulsive buying now

Marc Eckelberry : 7/14/2006 11:36:45 AM

My signal was at 1466, I think th market front run at 1468.25

Marc Eckelberry : 7/14/2006 11:36:25 AM


Marc Eckelberry : 7/14/2006 11:36:18 AM

NQ Entry Point Alert -
Long 1469.50, stop 1464.

Jeff Bailey : 7/14/2006 11:36:18 AM

Exactly what is taking place in equity futures markets, but they had little momentum .

Jeff Bailey : 7/14/2006 11:35:37 AM

AMR $22.90 -8.5% ... plunging ... understand what is going on. Grrrr says the aggressive hedge fund bear. Ruthless and hungry to chase out the momentum bulls.

Marc Eckelberry : 7/14/2006 11:35:37 AM

QQQQ withing 5 censt of 50% June

Marc Eckelberry : 7/14/2006 11:35:17 AM

NYSE 7900

Jeff Bailey : 7/14/2006 11:34:32 AM

SPX NH/NL 1:40

Jeff Bailey : 7/14/2006 11:34:20 AM

11:00 Internals found at this Link

Jane Fox : 7/14/2006 11:34:14 AM

TICKS -1000 so expect a retracement although it may be a small one.

Marc Eckelberry : 7/14/2006 11:33:54 AM

here we come.

Marc Eckelberry : 7/14/2006 11:33:48 AM

Reluctant disgust. I think all the retail investors are not even watching anymore, as we end the pattern with pros slamming what is left

Marc Eckelberry : 7/14/2006 11:32:00 AM

665 is a target on gold longs above 640, I would book profits there.

Marc Eckelberry : 7/14/2006 11:31:26 AM

sorry, 77

Marc Eckelberry : 7/14/2006 11:31:16 AM

QM belwo 76

Marc Eckelberry : 7/14/2006 11:29:46 AM

Monthly S2

Marc Eckelberry : 7/14/2006 11:29:40 AM

I might override, but that is the plan.

Marc Eckelberry : 7/14/2006 11:29:13 AM

NQ Entry Point Alert -
Long at 1466, stop 1463.

Marc Eckelberry : 7/14/2006 11:28:31 AM

S1 is a hurdle

Marc Eckelberry : 7/14/2006 11:28:13 AM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 11:27:09 AM

It's cheating, I know, but stuffing the channel works.

Marc Eckelberry : 7/14/2006 11:26:49 AM

In order for DELL to do all these price cuts, they must have taken a lot of chips out of the channel from INTC last month. This will show up on 7/19. All the market wants to see is INTC clearing that inventory and moving into the new chips. You can be sure INTC made sure it got them out before 6/30. GO to DELL and see those deals. Amazing. That is entirely an INTC push.

Marc Eckelberry : 7/14/2006 11:22:53 AM

Call resistance is at 38, so we should stall near 37.50 on a rally next week, then proceed higher after opex.

Marc Eckelberry : 7/14/2006 11:21:58 AM

PC ratio at 37 is 2.5.

Marc Eckelberry : 7/14/2006 11:21:45 AM

I am not waiting for 1465. I think opex players could use some lighter volume here to get some money back on those 36 puts.

Marc Eckelberry : 7/14/2006 11:20:53 AM

Too much typing

Marc Eckelberry : 7/14/2006 11:20:35 AM

NQ Entry Point Alert -
Long 1475, stop 1473.

Jeff Bailey : 7/14/2006 11:20:00 AM

California Pizza Kitchen (CPKI) alert $26.00 -2.62% ...

Marc Eckelberry : 7/14/2006 11:19:59 AM

PC ratio at QQQQ 36 is 5. FIVE.

Marc Eckelberry : 7/14/2006 11:18:46 AM

My guess is we will close just above 36.

Marc Eckelberry : 7/14/2006 11:17:53 AM

If we do get a bounce, I suspect it might not last as no one wanst to be long over the weekend, so this will be a daytrade.

Jane Fox : 7/14/2006 11:17:05 AM

The -1030 TICK reading gave us an 18 point bounce if you got in at the bottom, which was unlikely.

Marc Eckelberry : 7/14/2006 11:16:48 AM

It's all about oil.

Marc Eckelberry : 7/14/2006 11:16:40 AM

QM bid

Marc Eckelberry : 7/14/2006 11:16:14 AM

ALERT: NVDA Jan 17.50 calls at 3.50, lower stop to 2. This is a long term play, no need to get panicky. It;s a VISTA play and it will kick in.

Jeff Bailey : 7/14/2006 11:16:37 AM

Forest Labs (FRX) $44.05 +14.71% ... must be news regarding Lexapro patent. If long, would suggest taking some off the table.

I do see Jefferies upgraded stock to "buy"

Marc Eckelberry : 7/14/2006 11:15:00 AM

Rates down, oil down. Q getting to 50% retrace June f we hit 1465.

Marc Eckelberry : 7/14/2006 11:14:04 AM


Marc Eckelberry : 7/14/2006 11:13:09 AM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 11:08:50 AM


Marc Eckelberry : 7/14/2006 11:08:40 AM

NQ Entry Point Alert -
Long 1476.50, stop 1473.50

Marc Eckelberry : 7/14/2006 11:07:54 AM

NQ Exit Point Alert -

Jeff Bailey : 7/14/2006 11:07:47 AM

VIX alert 18

Marc Eckelberry : 7/14/2006 11:06:34 AM

NQ Entry Point Alert -
Long 1476.50, stop 1473.50

Marc Eckelberry : 7/14/2006 11:05:55 AM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 11:05:37 AM

YM 10800 and QQQQ 36. Let's get them back and start at least a counter-trend move

Jane Fox : 7/14/2006 11:05:19 AM

Oh BTW VIX and TRIN to new daily highs!!!

Marc Eckelberry : 7/14/2006 11:04:38 AM

NQ Exit Point Alert -
lower stop to 1473.50.

Marc Eckelberry : 7/14/2006 11:04:21 AM

buying Q 36.

Marc Eckelberry : 7/14/2006 11:04:12 AM

NQ Entry Point Alert -
Long 1475, stop 1474

Jane Fox : 7/14/2006 11:03:59 AM


Jeff Bailey : 7/14/2006 11:03:42 AM

Semiconductor HOLDRs (SMH) $30.53 -0.48% ... sharp reversal lower here. Light volume suggest lack of buyers.

Jane Fox : 7/14/2006 11:03:31 AM

HMMMM Gold will not retrace so I can buy on a dip and now the equity markets will not retrace so I can sell on a rally.

Marc Eckelberry : 7/14/2006 11:03:29 AM

QQQQ below 36. There are SO MANY PUTS from 36 up to 38....just like October.

Marc Eckelberry : 7/14/2006 11:03:00 AM

NQ monthly s2 is 1465, next target.

Jeff Bailey : 7/14/2006 11:02:48 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 7/14/2006 11:02:15 AM

determined enough.

Marc Eckelberry : 7/14/2006 11:02:08 AM

NQ Exit Point Alert -

Marc Eckelberry : 7/14/2006 11:01:23 AM

NQ Entry Point Alert -
Long 1478.50, stop 1475.50.

Marc Eckelberry : 7/14/2006 11:01:00 AM

this does not look very determined.

Marc Eckelberry : 7/14/2006 11:00:39 AM

test of s1

Marc Eckelberry : 7/14/2006 11:00:14 AM

NQ Exit Point Alert -

Jeff Bailey : 7/14/2006 10:59:31 AM

New York Times (NYT) $23.76 -0.62% Link .... "media sector"

Jeff Bailey : 7/14/2006 10:58:25 AM

Media Sector Bullish % (BPMEDA) reverses back lower to "bear confirmed"

Marc Eckelberry : 7/14/2006 10:58:09 AM

NQ Entry Point Alert -
Long 1480.50, stop 1475.

Keene Little : 7/14/2006 10:57:15 AM

Chop chop, no surprise. SPX headed for another test of the low but short term bullish divergences are building. We'll just consolidate. We'll probably head lower on Monday, consolidate and then maybe another minor new low but then I agree with Marc--we should see a rally into the end of opex week, but not yet. See you later to check on things after lunch.

Marc Eckelberry : 7/14/2006 10:55:46 AM

SMH up .39%

Jeff Bailey : 7/14/2006 10:56:43 AM

IBM $73.57 -0.91% Link .... as "everyone knows," this is the key pulse stock for technology. Nearing its bearish vertical count of $72 (Dorsey/Wright PnF chart not artificially adjusted for IBM's dividend payments).

Marc Eckelberry : 7/14/2006 10:55:37 AM


Jane Fox : 7/14/2006 10:55:33 AM

Looks like the bears are winning again today. YM to new daily lows.

Marc Eckelberry : 7/14/2006 10:55:10 AM

1480 holds, I take it.

Jeff Bailey : 7/14/2006 10:51:18 AM

EMC Corp. (EMC) $9.57 -4.10% Link ... (see Monday's Market Wrap) really getting whacked today.

Marc Eckelberry : 7/14/2006 10:54:30 AM

Corrections: SOX 20%, NDX over 15%, COMP just under 15% and SPX 8%: I think bears are getting a little carried away. In fact, with opex next week and this many puts above us, we are going to rally hard soon.

Jane Fox : 7/14/2006 10:50:04 AM

Pulling that long order. Weakness has come back.

Jane Fox : 7/14/2006 10:46:50 AM

I am going to try an ES long at 1250.25. Based on the VIX and the aD line and volume "improving."

Jane Fox : 7/14/2006 10:44:13 AM

First time I have heard from the TICK today +800.

Jane Fox : 7/14/2006 10:43:12 AM

VIX peeks to a new daily low and this could mean ES will peek to a new daily high.

Marc Eckelberry : 7/14/2006 10:42:55 AM

IN fact, the 38% projection for QQQQ is 36.08, our exact bottom as well ( I had profiled that yesterday : Link )

Marc Eckelberry : 7/14/2006 10:41:12 AM

Nevertheless, things are looking up a little an dsetting up a rally on Monday, should WWW3 not erupt over thew weekend. S1 hedl all night, which was exact correltaion 32.8% June H/L. With SMH and SOX up, as well as GE, markets could have found support, especialli with opex right around the corner.

Jeff Bailey : 7/14/2006 10:40:59 AM

You can only imagine the chatter/speculation of "who" that the individual investor is.

Marc Eckelberry : 7/14/2006 10:39:06 AM

Got triggere on the breakout at 1493, but unfortunately, we got stoppd at 1488. That is the problem with signals that can't be monitored.

Jeff Bailey : 7/14/2006 10:39:05 AM

Individual Investor Buys Over 5% Of Rosneft IPO

DJ- An unnamed high net-worth individual investor has purchased more than 5% of the shares issued in Russian state-owned oil producer OAO Rosneft's (ROSN.RS) initial public offering, a person familiar with the situation told Dow Jones Newswires Friday.

The person declined to name the individual.

Three other buyers will also break the 5% barrier, the person said: BP PLC (BP); Malaysia's Petroliam Nasional Bhd, or Petronas; and Gazprombank, the banking arm of Russian natural gas producer OAO Gazprom (GSPBEX.RS).

Marc Eckelberry : 7/14/2006 10:37:59 AM

NQ Exit Point Alert -

Jane Fox : 7/14/2006 10:36:46 AM

I ain't buying and I ain't selling. AD line and volume are bearish but the VIX and TRIN are neutral. This is a battle and there is no clear winner - yet!

Jeff Bailey : 7/14/2006 10:36:07 AM

Current OPEN MM Profiles that I've made at this Link

Jeff Bailey : 7/14/2006 10:29:26 AM

General Electric (GE) $32.30 -1.13% Link ... Did trade a 52-week low this morning, juuuust under its 02/07/06 relative low of $32.21.

Jane Fox : 7/14/2006 10:28:45 AM

AD Volume continues to plunge and as long as it does I will not buy this market especially when the aD line is below -1000.

Jeff Bailey : 7/14/2006 10:27:17 AM

Black & Decker (BDK) $74.85 -1.52% Link ... notable 52-weeker at the big board today.

Keene Little : 7/14/2006 10:27:16 AM

So far the June 28th low for SPX (1237.59) held on that test. I'd say try a long above this but keep a tight leash on it and only look to scalp. Otherwise I continue to think today will just consolidate and may not be worth trading.

Jeff Bailey : 7/14/2006 10:21:02 AM

Bema Gold (NYSE:BGO) $5.44 +2.25% ... moves from the AMEX to the big board.

Congratulation Bema Gold, you've made it to the big time!

Jeff Bailey : 7/14/2006 10:11:41 AM

For BIDU July $75 Put (BDQ-SO) alert I would hold today, see what shakes out over the weekend.

If you are short the stock I would keep VERY DISCIPLINED STOP above $90.00

Jane Fox : 7/14/2006 10:09:58 AM

Both AD line and AD volume to new daily lows now.

Jeff Bailey : 7/14/2006 10:08:07 AM

Baidu.com (BIDU) $87.61 +5.05% Link ... Upgraded at Piper Jaffray.

Jane Fox : 7/14/2006 10:04:34 AM

AD volume plunging to new daily lows and I would not try going long just yet.

Jane Fox : 7/14/2006 10:02:50 AM

WASHINGTON (MarketWatch) - Inventories at U.S. businesses tightened further in May, as sales grew faster than inventories, the Commerce Department said Friday.

Inventories increased 0.8%, double the 0.4% expected by economists.

Sales, meanwhile, increased 1.4%. The inventory-to-sales ratio fell back to a record low 1.25.

The typical business has 38 days of sales on hand.

Inventories remain very tight, suggesting that companies may seek to boost production in coming months if retail demand comes back. If demand does not increase, the tight inventories would reduce the adjustments needed to match production to final demand.

Jeff Bailey : 7/14/2006 10:02:21 AM

10:00 Market Watch found at this Link

Jane Fox : 7/14/2006 10:01:22 AM


Jane Fox : 7/14/2006 9:59:58 AM

... although the internals are not giving me any indication it is.

Jane Fox : 7/14/2006 9:58:55 AM

YM's ON lows were 10840 and intraday lows are 10833. THis may be the bottom.

Jane Fox : 7/14/2006 9:56:07 AM

Remember 10a.m. May Business Inventories. Consensus: +0.4%. Previous: +0.4%

Jane Fox : 7/14/2006 9:55:22 AM

Nope YM breaks overnigh lows.

Jane Fox : 7/14/2006 9:54:15 AM

Keep your eye on overnight lows - YM testing it now.

Jane Fox : 7/14/2006 9:53:51 AM

New daily lows across the board.

Jane Fox : 7/14/2006 9:52:20 AM

TRIN is a very narrow range at 0.80. Sometimes I just totally do not understand this internal although it is based on two others I watch very closely, AD line and volume.

Jane Fox : 7/14/2006 9:51:13 AM

I would be very hesitant to short this market considering the decline we have seen these last two days yet nothing is telling me to buy either.

Jane Fox : 7/14/2006 9:48:02 AM



Jane Fox : 7/14/2006 9:47:00 AM


Jane Fox : 7/14/2006 9:43:08 AM

Opps the AD line is now -986 and falling.

Keene Little : 7/14/2006 9:40:21 AM

If ES can hold its June 28th low at 1246.50 there's a good chance we'll see at least a choppy bounce attempt today. Could be worth a scalp attempt here.

Jane Fox : 7/14/2006 9:40:06 AM

Markets are breaking PDLs but so far the overnight lows are holding. Those lows just may be our support today and a spring board for shorts to cover and shoot us higher.

Jane Fox : 7/14/2006 9:37:47 AM

VIX to new daily highs tells me the bears are getting stronger.

Jane Fox : 7/14/2006 9:36:34 AM

VIX opens below its PDH but in the top quartile. TRIN below its PDL which is bullish.

Jane Fox : 7/14/2006 9:35:03 AM

The bears are in control this morning. AD line is -472 and AD volume under 0 but I think that could change in a NY minute. The VIX and TRIN should give us a clearer picture.

Jane Fox : 7/14/2006 9:31:13 AM

Don't forget 9:45a.m. Mid-July Univ. of Michigan Sentiment Index. Consensus: 86. Previous: 84.9.

Jane Fox : 7/14/2006 9:30:37 AM

Looking at the ES charts I think 1260 would be a good place to short (or buy puts on the cash index) the S&P futures. 1260 is the 50% retracement bracketed from the June lows at 1230 to the July highs at 1290 and is also a 38.20% retracement bracketed from the July highs to yesterday's lows at 1242. Link

Jane Fox : 7/14/2006 9:16:13 AM

The bulls have lost and there is now little doubt this is a sell the rallies market. OK so how do we do that and what is a rally and when do we sell it? Questions I have struggled with for a long time. I think YM has a very natural place to try a sell and that is at the June 28th lows 10970. Link Let's drill down to the 240 minute chart and take a look. The 240 MACD is just about to cross back up so a return to 10970 would give it a chance to burn off the oversold condition and then make another bearish cross below the 0 line. Now that would be a picture perfect short entry. Link

Keene Little : 7/14/2006 9:07:44 AM

Equities got a very nice bounce off the 8:30 reports (probably more a relief bounce than anything else). The recovery off last night's overnight low is strong so it remains to be seen whether or not there will be any follow through. I highly suspect we'll see consolidation today.

I don't think we've seen the lows for this move down but I also don't think there's much more to go before we see a larger bounce into opex. We could stair-step lower into early next week but it's probably not worth new short positions (except for intraday scalping).

Jane Fox : 7/14/2006 8:57:56 AM

TBonds gained nicely on the 8:30 retail sales and import data but have lost those gains and is now on their way to test overnight lows.

Natural Gas bullishly broke its PDH overnight. This is not the commodity to short for now. The daily charts are still quite bearish but it has been on a tear for a couple of days and best to stand aside until either the bearishness returns or the daily charts turn bullish.

Oil retreated back to its PDR but holding on to most of its gains.

Gold is doing its straight up thing again and not letting those who missed this move a chance to get in. (Sigh!) Link

Jane Fox : 7/14/2006 8:51:29 AM


Jane Fox : 7/14/2006 8:50:58 AM

Treasurys cling to gains after unexpected retail sales drop

Jane Fox : 7/14/2006 8:50:20 AM

Dateline WSJ Broadcom Inc. said it expects to record additional non-cash stock-based compensation expense of more than $750 million, as it corrects accounting for past stock-option grants.

The company believes that substantially all of that expense will be recorded in the years 2000-2003. The company said no issues have been identified that affect equity awards issued to Broadcom's co-founders or CEOs or any member of the board. Also, based on preliminary findings, the company's audit committee has determined the company should restate its financial statements for 2000 through 2005, as well as for the first quarter of 2006.

Jane Fox : 7/14/2006 8:49:14 AM

DAteline WSJ General Electric Co. reported a 4.4% rise in second-quarter profit as gains from the sale of its insurance operations and strength at its health-care, consumer-finance and industrial operations offset continued weakness at NBC Universal. The company also reaffirmed its outlook for the year.

The Fairfield, Conn., conglomerate said net income rose to $4.85 billion, or 47 cents a share, from $4.65 billion, or 44 cents a share, a year earlier.

The company said total revenue rose 9.2% to $39.90 billion, compared with $36.54 billion last year. Financial services revenue rose 10% to $15.3 billion, reflecting core growth and the effects of acquisitions. Revenue at Infrastructure rose 11% to $11.33 billion.

"Our solid quarterly results were highlighted by strong top- and bottom-line growth at commercial finance, demand for our products and services at infrastructure and strong profitability at healthcare, consumer finance and industrial," said GE Chairman and Chief Executive Jeff Immelt. "We are making good progress at NBC Universal, which continues to improve with increasing ratings and a diversified business model of content leveraged across all delivery platforms."

Jane Fox : 7/14/2006 8:47:09 AM

July 14 (Bloomberg) -- Sales at U.S. retailers unexpectedly fell in June, a sign near-record gasoline prices and higher interest rates are becoming a bigger burden for consumers and the economy.

Last month's 0.1 percent decline, the first decrease since February, reflected fewer purchases of autos, electronics and building materials, the Commerce Department said today in Washington. Excluding autos, sales rose 0.3 percent after a 0.7 percent increase in May.

Federal Reserve policy makers are counting on weaker growth to help tame inflation, bringing them closer to ending a two-year campaign to raise rates. Americans are finding little relief at the gas pump as prices jumped this week to a 10-month high on violence in the Middle East.

"Growth will be sub-par, not terribly weaker, but sub- par," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, before the report. "The slowing in growth is not unambiguous enough yet and there are still concerns about inflation. Odds still favor one more move" by the Fed next month, he said.

Economists expected retail sales would rise 0.4 percent last month after a 0.1 percent increase in May, based on the median forecast of 74 estimates in a Bloomberg News survey. Sales excluding automobiles were expected to rise 0.4 percent following a previously reported 0.5 percent increase.

Jane Fox : 7/14/2006 8:42:54 AM

TOKYO -- The Bank of Japan Friday abandoned its five-year zero-interest rate policy, indicating the central bank believes the world's second-largest economy has entered an era of healthy economic growth and price stability.

In a widely expected move, the BOJ said it had raised its target for the uncollateralized overnight call rate - the short-term rate at which banks lend to each other - to 0.25% from zero. It said the decision was voted for unanimously by the central bank's policy board. Looking ahead, the BOJ said it would adjust this rate "gradually" according to price and economic conditions. It added, however, that easy monetary conditions would likely be maintained for some time, with "interest rate levels remaining extremely low."

Jane Fox : 7/14/2006 8:42:02 AM

All the markets broke their PDLs overnight but regained them between 5:30 and 6:00EDT. YM and ES are now trading right at their PDLs, Nq slightly above and ER below. Link

Jane Fox : 7/14/2006 8:37:22 AM

* June retail sales ex-autos up 0.3% vs. 0.4% expected
* June retail sales fall 0.1% vs. 0.4% gain expected
* June retail sales ex-autos, ex-gas up 0.1%
* May retail sales unrevised at 0.1% gain
* 2q retail sales up 0.9% vs. 1q
* retail sales up 5.9% y-oy
* June import prices ex-fuels up 2.2% yr-over-yr
* June non-fuel import prices rise 0.7%
* June non-petroleum import prices rise 0.4%
* June auto sales fall 1.4%
* June import prices rise 0.1% vs 0.4% expected
* June gasoline sales up1.1%

Jane Fox : 7/14/2006 8:30:21 AM

Dateline WSJ Broadcom expects to record compensation expense of more than $750 million to correct stock-options accounting.

Jane Fox : 7/14/2006 8:30:07 AM

Good Morning all.

Marc Eckelberry : 7/14/2006 4:19:42 AM

NQ Entry Point Alert -
Buy stop long 1493, stop 1488.

Marc Eckelberry : 7/14/2006 4:19:34 AM

I can't be around for the open, so the trade I will put in is a buy stop above yesterday's morning lows of 1591.75. It's safer than getting in on lows when I am not around to analyze.

Marc Eckelberry : 7/14/2006 3:55:11 AM

The markt is intent on getting up to 80 oil, it's all over the media. We will see.

Marc Eckelberry : 7/14/2006 3:54:34 AM

Israel pulls out of Gaza. Oil drops below 78 on the news. NQ gets a bid. Link

Marc Eckelberry : 7/14/2006 3:41:07 AM

I won't be in early tomorrow, but watch the pre-open and GE.

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