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Keene Little : 8/3/2006 11:34:29 PM

Friday's pivot tables: Link and Link

OI Technical Staff : 8/3/2006 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 8/3/2006 5:25:33 PM

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

Today's Activity

Stopped on the remaining short position in Expeditors Intl. (EXPD) at $41.32 ($+3.58/share, or +7.97%)

Swing trade short 1/2 position in StreetTracks Gold (GLD) at the bid of $64.22. Stop currently $65.50, targeting $58.00.

Raised stop in the 1/2 bullish position for Ryland Group (RYL) to $39.30.

Jeff Bailey : 8/3/2006 4:45:18 PM

Closing Internals found at this Link

Marc Eckelberry : 8/3/2006 4:30:08 PM

1522 is the big number for NQ going forward. We hold that in the next sessions and we will see 50 dma at 1549.50. Support is 1510.50.

Marc Eckelberry : 8/3/2006 4:28:23 PM

Trade Recap
Day: NVDA Jan 17.5 call +3.40 (110%)
Week: NQ +7, NVDA option +110%

NVDA looks headed a little higher, but I apply the 100% rule to options, even that far away. At this point, I would wait for a pullback to get back in. The other option, which I outlined as well, was to sell front month OTM calls against the January, but that was up to you.

Jeff Bailey : 8/3/2006 4:26:20 PM

Closing U.S. Market Watch found at this Link ... SPX gets a close above 1,280.00.

Next test comes from NQ. Can it get a settlement above 1,533 and my "bear fit 38.2%" retracement?

Keene Little : 8/3/2006 4:08:25 PM

Actually, the extra dip just before the close now gives us an upside Fib target for the next leg up at 1292 instead of 1293. But two equal legs up from the low on Aug 1st is at 1292.75 so I'd say watch for 1292-1293 for resistance tomorrow morning to try a short for at least a pullback before potentially heading higher again.

Jeff Bailey : 8/3/2006 4:07:24 PM

Buy Program Premium ... SPY $128.25 : YM 11,285

Jane Fox : 8/3/2006 4:05:29 PM

Economic Reports for tomorrow include:

8:30a.m. July Non-Farm Payrolls. Consensus: +150K. Previous: +121K.

8:30a.m. July Unemployment Rate. Consensus: 4.6%. Previous: 4.6%.

Keene Little : 8/3/2006 4:04:55 PM

Into the close and it looks like the bulls are getting their consolidation. This should give us another leg up tomorrow morning. A Fib projection (for the 5th wave up in today's rally to equal the 1st wave up) is at ES 1293 and that's where I'd look for a pullback to start. The larger ascending wedge is still in play, the top of which is close to 1296 now, but it probably won't be in a straight line up to there. A scalp short from 1293 would be my next bet.

Jane Fox : 8/3/2006 4:04:06 PM

This market does not instill a great deal of bullishness in me but it certainly is not bearish enough to go short. It remains in no man's land. Link

Jeff Bailey : 8/3/2006 4:01:20 PM

SPX alert looks to go out at, at.. 1,280.17

Jeff Bailey : 8/3/2006 4:00:12 PM

NYMEX: MotherRock Closure No Threat To Members, Customers DJ- The closure of the MotherRock LP energy hedge fund after natural gas futures losses doesn't pose a threat to any members or customers of the New York Mercantile Exchange (NYM.XX), the exchange said Thursday.

"The system is working and clearing members or other customers are not currently at risk," Nymex President James Newsome said.

MotherRock is shutting down after suffering big losses in the natural gas market in June and July, the fund said in a letter to investors Thursday.

Jeff Bailey : 8/3/2006 3:52:53 PM

SPX 1,280 .... 8 minutes ... 8 minutes to close.

Jane Fox : 8/3/2006 3:52:01 PM

Tks Jeff - you do a pretty good job as well.

Jeff Bailey : 8/3/2006 3:50:20 PM

SPX 1,280.83 +0.78% ... 10 minutes to close.

Jane Fox : 8/3/2006 3:48:53 PM

And once again the VIX saved us from getting long at ES's new daily highs.

Jeff Bailey : 8/3/2006 3:43:03 PM

Bullish swing trade raise stop alert ... on the 1/2 bullish position in Ryland Group (RYL) $42.90 +4.35% ... to $39.30.

Jeff Bailey : 8/3/2006 3:31:06 PM

RYL WEEKLY Interval chart with 3-year SMA Link

Jeff Bailey : 8/3/2006 3:29:57 PM

Excellent news coverage Jane ... Here's a WEEKLY Interval chart of the $DJUSHB with a 3-year SMA Link

Jeff Bailey : 8/3/2006 3:21:03 PM

03:00 Internals found at this Link

Jane Fox : 8/3/2006 3:12:30 PM

NEW YORK (MarketWatch) -- The number of defaults on mortgage payments rose to a three-year high in the second quarter in California, a 67% increase from the year earlier period, according to DataQuick, a real estate data-compiling firm.

Lenders sent 20,752 default notices to homeowners across the Golden State, up 10.5% from 18,778 the previous quarter and up 67.2% from 12,408 in the second quarter of 2005. Notices of default are formal documents filed with the county recorder's office which mark the first step of the foreclosure process.

The 20,752 defaults were the highest since 25,511 were filed in the first quarter of 2003.

"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "We would have to see defaults roughly double from today's level before they would begin to impact home values much."

Jane Fox : 8/3/2006 3:08:44 PM

The bulls have certainly made an impressive move today but they are not out of the woods yet. They need to not only break this red trendline but close above it. Link

Jane Fox : 8/3/2006 3:05:32 PM

Well once again ES's attempt at breaking daily highs with follow through has failed. I think the bulls are done for the day.

Jeff Bailey : 8/3/2006 3:04:52 PM

Shorts are pressured ... SPX 1,283.34 ... SPY $128.45 ... WEEKLY R1 should be conceded.

Jeff Bailey : 8/3/2006 3:03:12 PM

03:00 Market Watch found at this Link

Jane Fox : 8/3/2006 2:56:45 PM

My goodness AD line is +930

Jane Fox : 8/3/2006 2:56:24 PM

I guess what I am saying is don't buy an ES new daily high but certainly don't short it either.

Jane Fox : 8/3/2006 2:55:16 PM

ES tests daily highs again but once again the VIX is not confirming however, the third try just may.... we'll see.

Jeff Bailey : 8/3/2006 2:53:19 PM

Swing trade short 1/2 position alert .. for the GLD here at $64.22.

Cancel prior order of $64.40

Jeff Bailey : 8/3/2006 2:53:15 PM

StreetTracks Gold (GLD) $64.23 -0.80% ... edges back from after-noon and session high of $64.33.

Jeff Bailey : 8/3/2006 2:49:34 PM

Amex Gold Bugs ($HUI.X) 341.91 -1.52% ... trades WEEKLY R1 here.

Jeff Bailey : 8/3/2006 2:43:50 PM

StreetTracks Gold (GLD) $64.32 -0.66% ... same bar chart I've been trading from the June lows, with profiled trades at this Link

WEEKLY R1 just ahead at $64.50.

Jane Fox : 8/3/2006 2:40:22 PM

The lack of confirmation from the CCI coincided with the VIX not confirming ES's new daily highs also.

Jane Fox : 8/3/2006 2:38:45 PM

I don't follow CCI much but have just recently been watching it because a reader suggested it could help with my TICK fades. Along the way I have noticed that maybe it could be helpful in other ways as well. Notice how YM's higher highs this morning were confirmed by CCI higher highs. Then just recently YM's higher highs were not confirmed by CCI higher highs maybe suggesting a top as been formed. Link

Jeff Bailey : 8/3/2006 2:34:40 PM

Dow Transports (TRAN) 4,426.53 +2.30% ... back above 200-day SMA.

Probing WEEKLY Pivot here.

Keene Little : 8/3/2006 2:32:38 PM

Now that we've had a 3-wave move up from this morning's low the bulls will want to see a sideways consolidation from here that lasts at least an hour (maybe even into the close) and then another leg higher. ES 1290 could be a tough nut to crack this time around.

Jane Fox : 8/3/2006 2:31:39 PM

Look at this reversal. Impressive. Link

Jane Fox : 8/3/2006 2:28:34 PM

Sure enough the VIX did not confirm ES's new daily high and there was no follow through.

Jeff Bailey : 8/3/2006 2:27:20 PM

Ryland Group (RYL) $42.72 +3.93% ... gets a trade at WEEKLY R1 ($42.68)

Jane Fox : 8/3/2006 2:22:10 PM

AMD is even trading under its weekly 200EMA!! Link

Jane Fox : 8/3/2006 2:20:11 PM

I certainly do not see anything bullish about the AMD chart other than maybe a MACD divergence but even that is very suspect. Link

Marc Eckelberry : 8/3/2006 2:19:27 PM

ES is solidly bullish above 50% May decline at 1285 and a break above 1289 sets up 1300, so watch out there. NQ is bullish above 1522. I had a bullish bias this morning and that proved correct. There is government money supporting the markets ahead of the elections so I would NOT favor the short side.

Marc Eckelberry : 8/3/2006 2:23:09 PM

The INTC weakness is due to an analyst predicting DELL will announce on Sept 12 that 20% of personal computers will have AMD in their lineup. While this is good news for AMD (compared to what it had before), but remember that AMD has 6% margins versus 18% for INTC. PC sales is the low margin business, so no real benefit for AMD there. The high end servers is the margin game and where INTC is working to get market share back from AMD. It is still the leader anyway. I would not chase AMD here. No way. It bought a low margin company (ATYT) so p/e going forward will be lousy. Stick to INTC in this game, forget the crowd right now.

Jeff Bailey : 8/3/2006 2:16:17 PM

Expeditors Intl. (EXPD) $42.19 +4.07% ... edges into recent 07/31/06-08/01/06 gap.

Shorts should be closed in my MM profiles with BIG gains booked.

Jane Fox : 8/3/2006 2:15:29 PM

ES breaks thru to a new daily high that is not confirmed by the VIX so now I'm thinking it will not have follow through.

Jane Fox : 8/3/2006 2:14:16 PM

ES is testing daily highs but VIX is not testing daily lows so I think ES's highs will hold until the VIX tests or breaks its daily lows.

Jeff Bailey : 8/3/2006 2:09:12 PM

StreetTracks Gold (GLD) $64.24 -0.78% ... 40-cent box chart (get to scale of futures) at this Link

Keene Little : 8/3/2006 1:56:06 PM

It looks like a small 5-wave move should finish about where ES is testing yesterday's high. Yet another place to try a scalp short but obviously shorts are fighting a bigger trader(s) these days. With the continued negative divergences I can't in good conscience recommend long plays. Either short or flat is my recommendation.

Jane Fox : 8/3/2006 1:54:35 PM

All other markets have broken their PDHs already.

Jane Fox : 8/3/2006 1:53:53 PM

ES's previous day high is 1288.25 and this market should find resistance here.

Jane Fox : 8/3/2006 1:49:16 PM

TICKS +1000 but I will be ignoring this one.

Jane Fox : 8/3/2006 1:47:01 PM

Looks like the last +1000 TICK wouldn't have given you much either confirming that indeed the tide as changed to bullish (today that is).

Jane Fox : 8/3/2006 1:45:36 PM

Notice on the chart of ZG that MACD and RSI are both following price confirming the bullishness. If I saw any divegences I would not be as bullish on Gold.

Jane Fox : 8/3/2006 1:43:44 PM

Here is a chart of the Gold 100 oz. emini which is a proxy for the big Gold contract and GLD. This is a bullish chart but it could retrace back to the 620 - 630 area where I see a bunch of support. First of you have the magenta upward trendline that originated from the June lows, then you have red upward trendline that originated in November 2005 and of course the red dotted 100EMA. On the other hand if this market closes below these support levels and breaks the swing low made on June 24th (615) that would confirm the lower high and be time to exit stage left on your long positions. Link

Jane Fox : 8/3/2006 1:38:03 PM

* NYSE VOLUME 1.03B
* NYSE HAS 1,641 ADVANCERS
* NYSE HAS 1,457 DECLINERS
* NYSE HAS 161 ISSUES UNCHANGED
* NYSE HAS 87 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 29 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 1.04B
* NASDAQ HAS 1,535 GAINERS
* NASDAQ HAS 1,332 LOSERS
* NASDAQ HAS 149 ISSUES UNCHANGED
* NASDAQ HAS 40 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 53 ISSUES SETTING 52-WEEK LOWS

Jane Fox : 8/3/2006 1:33:28 PM

Notice how each TICK reading was a little lower while price was making higher highs. You just never know though do you? That of course is a chart of ES and I was fading YM but the same holds true for YM.

Jane Fox : 8/3/2006 1:32:01 PM

I may have put my stop just a little too close and that last +1000 TICKS reading might just work. Link

Jeff Bailey : 8/3/2006 1:30:02 PM

Advanced Micro (AMD) $20.42 +4.18% ... after kiss of WEEKLY R2

Jeff Bailey : 8/3/2006 1:29:22 PM

Intel (INTC) $17.44 -0.34% ... after kiss of WEEKLY S1

Jane Fox : 8/3/2006 1:28:57 PM

Dateline WSJ - AOL said Thursday it would drop as many as 5,000 employees, or a quarter of its global work force, within six months as the company restructures its business to draw more online advertising dollars.

The announcement came a day after the Time Warner Inc. unit said it would no longer charge high-speed Internet customers for email and other services.

An unknown number of European employees will still have jobs but with a different company as AOL looks to shed its Internet access businesses in France, Germany and the U.K. AOL currently has 3,000 access employees in Europe.

Massive layoffs around the world are expected as AOL stops actively marketing its dial-up services in the U.S. and reduces its need for customer-support centers.

Employees were informed of the work force plans at a companywide meeting and Webcast Thursday. Specific notifications are expected by October.

Jane Fox : 8/3/2006 1:26:25 PM

Out the YM short at 11285.

Jeff Bailey : 8/3/2006 1:25:57 PM

SPY $128.25 +0.11% ...

Jeff Bailey : 8/3/2006 1:25:24 PM

Jane's "tick fade" comments may signal a turn in market bias.

Jeff Bailey : 8/3/2006 1:22:54 PM

SMH alert $31.51 +1.42%

Jeff Bailey : 8/3/2006 1:22:25 PM

Good adjustment Jane!

Jeff Bailey : 8/3/2006 1:22:00 PM

01:00 Internals found at this Link

Jane Fox : 8/3/2006 1:20:12 PM

VIx is falling and the AD line and volume are climbing. I think we are no longer in Kansas Toto and fades will not work now.

Jane Fox : 8/3/2006 1:18:44 PM

... which is just a tad higher than July 28th's high of 11279.

Jane Fox : 8/3/2006 1:19:00 PM

My stop on the YM short is 11285.

Jeff Bailey : 8/3/2006 1:10:32 PM

01:00 Market Watch found at this Link

Keene Little : 8/3/2006 1:09:40 PM

ES 1286 is where we'd have two equal legs up off this morning's low so keep an eye out there for an opportunity to scalp a short.

Jeff Bailey : 8/3/2006 1:08:27 PM

Swing trade short stop alert ... for Expeditors Int. (EXPD) $41.32 +1.99% ... good trade!

Keene Little : 8/3/2006 1:07:58 PM

Keeping with the same ES chart that showed a very nice short play setup yesterday, we can see that this could rally up to 1295 now before it runs into resistance at the top of a larger ascending wedge. Between here and there is probably a lot of chop and whipsaws. Link

Jane Fox : 8/3/2006 1:06:24 PM

Another TICK +1000 and the 3 min CCI this time is +238. Short YM when CCI cross back below +200. Short YM at 11268

Keene Little : 8/3/2006 1:04:55 PM

This latest spike up is what I'm talking about. It's too easy for big money, likely the trading teams in the mega banks, to just hit it with a couple of buy programs and goose it higher to get out the short players. It doesn't take much money on these kinds of days. It also can't be known when they'll hit it. It's certainly not an easy time to be a short player.

Jane Fox : 8/3/2006 1:03:07 PM

AD line is now +236 however, AD volume is still below 0.

Jane Fox : 8/3/2006 1:02:42 PM

TICKS +1000 but CCI on the YM chart only reaches +165

Jeff Bailey : 8/3/2006 1:02:30 PM

Dow Jones Home Construction (DJUSHB) 625.68 +3.17% ... 5-points box chart at this Link

Jane Fox : 8/3/2006 12:54:31 PM

ES to new daily highs? Link

Keene Little : 8/3/2006 12:49:37 PM

It looks like there's an effort by somebody to hold this market up. As we've seen it's hard to argue with bigger money so don't fight it. We could see this kind of price action into next week.

Tab Gilles : 8/3/2006 12:43:15 PM

Intel (INTC) Double bottom @ $17? Link

Jane Fox : 8/3/2006 12:36:00 PM

ER makes it to a new daily high.

Jeff Bailey : 8/3/2006 12:31:00 PM

Swing trade short setup alert for 1/2 position in the StreetTracks Gold (GLD) $63.78 -1.49%.

Let's go short a trade at $64.40 (day order only), stop $65.50, target $59.00.

Please consult your tax advisor for the treatment of capital gains/losses.

Jane Fox : 8/3/2006 12:30:21 PM

At first glance IBM looks bearish but then if you look a little closer at the MACD and RSI bullish divergences you see that it maybe not all that bearish. I would not be taking a short of this stock right now.

Jane Fox : 8/3/2006 12:27:59 PM

Link Link

Jane Fox : 8/3/2006 12:26:15 PM

LOS ANGELES (MarketWatch) -- International Business Machines Corp. on Thursday said it agreed to buy MRO Software Inc. for around $740 million in cash in a move to strengthen its consulting and software business.

IBM will pay $25.80 for each MRO share (MROI) ($25.45, +3.85, +17.8%) under the deal, assigning a 19% premium to the shares compared to the prior session's closing price. IBM (IBM) ( $76.19, -0.13, -0.2%) expects to close the acquisition in the fourth quarter following approval by MRO shareholders and regulators.

MRO's stock surged past a 52-week high on news of the acquisition, gaining $3.81, or 18%, to $25.41 in morning trading. IBM shares, a component of the Dow Jones Industrial Average, eased fractionally to give up 9 cents to $76.23.

Based in Bedford, Mass., MRO provides software and consulting services to help companies manage the lifecycle of assets such as production equipment, facilities and hardware and software from their purchase to retirement.

Jeff Bailey : 8/3/2006 12:12:16 PM

INTC and CSCO seem married at the hip too.

Jeff Bailey : 8/3/2006 12:06:31 PM

INTC $17.25 -1.32% ... WEEKLY S1 $17.47 ; S2 $16.78

AMD $20.12 +2.60% ... WEEKLY R1 $19.80 ; R2 $20.39

Tab Gilles : 8/3/2006 12:05:29 PM

Murphy Oil (MUR) continues decline. Link

Jeff Bailey : 8/3/2006 12:03:05 PM

Was thinking of a "pairs trade" for long INTC and short AMD, but that may not be a very good trade near-term.

INTC "makes sense" for August max pain theory, but AMD does not makes sense. Too strong above $20.00 at this point.

Jeff Bailey : 8/3/2006 12:01:02 PM

AMD Options Montage found at this Link

Jeff Bailey : 8/3/2006 11:56:04 AM

Intel (INTC) Option Montage found at this Link

Jane Fox : 8/3/2006 11:43:37 AM

VIX climbing as the AD volume makes new daily lows and things are starting to get back into sync now.

Jane Fox : 8/3/2006 11:39:29 AM

Notice how the VIX and ES broke their respective trendlines (green) at the same time. Link

Jeff Bailey : 8/3/2006 11:38:45 AM

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

Jane Fox : 8/3/2006 11:38:02 AM

Just bot 2 INTC Sept 20 puts. I will stop these out if INTC trades at 18.30.

Jane Fox : 8/3/2006 11:34:49 AM

Jeff your last chart of the Dow so I thought I would chime in with a shot of INTC. Pretty sick looking puppy. Link

Jeff Bailey : 8/3/2006 11:32:29 AM

Intel (INTC) $17.27 -1.25% Link ...

Jane Fox : 8/3/2006 11:31:52 AM

ES is now testing its PDL and so far is holding up as support.

Jeff Bailey : 8/3/2006 11:31:45 AM

Advanced Micro (AMD) $20.03 +2.19% ... edges above last week's highs ... moves into 07/20-7/21 gap Link

Jane Fox : 8/3/2006 11:30:00 AM

There is your 15 points 11225. Took a little heat but it worked.

Jane Fox : 8/3/2006 11:27:14 AM

I have lowered my stop to breakeven now and holding out for my 15 points.

Jane Fox : 8/3/2006 11:23:12 AM

THis is such a good example of how you need all the internals in sync. Even though the VIX was bullish it was not enough when the ADs were bearish. And on the other hand even though the ADs were bearish it was not enough when the VIX was bullish. The result is up and down with little direction.

Jeff Bailey : 8/3/2006 11:19:03 AM

11:00 Internals found at this Link

Wednesday's Internals found at this Link

Jane Fox : 8/3/2006 11:17:50 AM

If I had gotten a better entry I could probably be out of my short by now or at least a lot closer.

Keene Little : 8/3/2006 11:16:59 AM

Nice recovery off this morning's low. I'm sure it caught a few shorts by surprise by the looks of the spike up. So far it's looking like it will leave yet another bearish divergence (unless it can keep going). It's just too easy for the Boyz to shove this around and spike it up to help them unload more inventory. Another high would give us a 5-wave move up from this morning's low (and close ES's gap at 1284) and then I'd look to short it again.

Jane Fox : 8/3/2006 11:08:23 AM

Looking for 11240 - 15 = 11225

Jane Fox : 8/3/2006 11:07:20 AM

3 minute CCI has now crossed back below +200. I have started using the 3 min CCI at the suggestion of a reader who thinks I can time my fades a bit better. If had waited 'til the CCI crossed back below +200 I would have gotten a better entry for sure.

Jane Fox : 8/3/2006 11:04:30 AM

AD volume is still below 0 though.

Jane Fox : 8/3/2006 11:04:19 AM

AD little spurt of buying brought the AD line above 0 to +41.

Jeff Bailey : 8/3/2006 11:02:49 AM

11:00 Market Watch found at this Link

Jane Fox : 8/3/2006 11:02:17 AM

VIX breaks to new daily lows which will certainly put a dampening on the YM short.

Jane Fox : 8/3/2006 11:01:01 AM

Another TICK +1000.

Jane Fox : 8/3/2006 11:00:43 AM

Short YM at 11240.

Jeff Bailey : 8/3/2006 11:00:07 AM

10-year YIELD ($TNX.X) quiet ... up 0.8 bp at 4.969%

Jane Fox : 8/3/2006 10:59:52 AM

3 min CCI on YM is +248

Jeff Bailey : 8/3/2006 10:59:33 AM

Ryland Group (RYL) $41.73 +1.45% Link ... edges above yesterday's highs. Reclaims June Lows.

Jane Fox : 8/3/2006 10:59:11 AM

TICKS +1000 and 1 min CCI is +236. This may be one to fade.

Jane Fox : 8/3/2006 10:56:24 AM

SL Green Realty Corp. (SLG) and Reckson Associates Realty Corp., (RA) two publicly traded office real-estate investment trusts with sizable New York-area presence, are in discussions for a possible merger or acquisition, sources close to the deal said.

No details of the possible deal were available and the deal could still fall apart. Reckson asked the New York Stock Exchange to delay trading this morning, pending a new announcement.

Jane Fox : 8/3/2006 10:55:29 AM

Another TICK +800 let's see if the market can markets can make new daily highs this time.

Jeff Bailey : 8/3/2006 10:54:57 AM

Microsoft (MSFT) $24.36 +0.24% Link ...

Jeff Bailey : 8/3/2006 10:54:15 AM

Intel (INTC) $17.40 -0.51% Link ...

Jeff Bailey : 8/3/2006 10:53:22 AM

Ciscso Systems (CSCO) $17.24 -1.37% Link ... Weak ... probing critical support.

Jane Fox : 8/3/2006 10:51:15 AM

This is a bullish chart and a buy on the dips. Link

Jeff Bailey : 8/3/2006 10:50:02 AM

NHC: Tropical Storm Chris Likely To Weaken To Depression; May Happen Later Thursday

Jeff Bailey : 8/3/2006 10:48:17 AM

ENI Makes New Deepwater Gas Discovery In Gulf Of Mexico

DJ- Italian oil and gas company Eni SpA (E) said Thursday it made a new gas discovery in the Gulf of Mexico deepwater at the Longhorn exploration well, 195 kilometers southeast of New Orleans.

E $60.90 -0.68% Link

Jane Fox : 8/3/2006 10:47:13 AM

I want to buy ES because of the VIX but the AD line and volume will just not let me.

Jane Fox : 8/3/2006 10:45:59 AM

That buy program got the TICKS to +800 but the markets were not able to make new daily highs. HMMM

Keene Little : 8/3/2006 10:44:41 AM

If they can manage another push higher here then there would be a pretty good chance of closing this morning's gap.

Jeff Bailey : 8/3/2006 10:43:58 AM

Buy Program Premium ... YM 11,225 : SPX 1,275.49

Jane Fox : 8/3/2006 10:42:42 AM

Natural Gas is now sitting at its red dotted 100EMA. This chart remains quite bullish. If you see the jtHMA turn back red and the MACD cross it is time to get out of Dodge and back on the sidelines. Link

Keene Little : 8/3/2006 10:42:26 AM

Two equal legs up in this morning's bounce was at 1280.50 so that was the place to look for a short entry. Now we'll see if the decline continues. Obviously a break below this morning's low would also be a break of ES's uptrend line. Layered support would then be at the previous lows of 1270.25 and 1267. Then there's plenty of air down to 1244.

Jane Fox : 8/3/2006 10:39:29 AM

WASHINGTON (MarketWatch) -- Growth in sectors of the U.S. economy not involved with manufacturing slowed during July, the Institute for Supply Management said Thursday.

The ISM nonmanufacturing index fell to 54.8% last month from a reading of 57.0% in June, the private group said.

The drop was sharper than expected. Economists had been looking for the index to inch lower, to 56.9%, according to a survey of economists conducted by MarketWatch.

The gauge of new orders fell to 55.6% from 56.6%, while prices paid rose to 74.8% from 73.9%.

The supplier delivery index fell to 54.5% in July from 56.0% in the previous month. Readings over 50% indicate a plurality of purchasing managers at firms across the nation reported increased activity.

One positive note in the ISM nonmanufacturing report was the employment index, which rose to 54.5% from 52.0%.

During July, eleven of 17 industries were growing, led by other services, retail trade and education, according to the ISM data. Three industries were contracting: construction, whole trade and public administration.

Jane Fox : 8/3/2006 10:38:04 AM

NATURAL-GAS SUPPLIES UP 19 BCF IN LATEST WEEK; DOE

Jane Fox : 8/3/2006 10:36:46 AM

AD volume to new daily lows so forget about anymore upside for now.

Jeff Bailey : 8/3/2006 10:34:28 AM

EIA Weekly Nat. Gas Storage Table Link

Marc Eckelberry : 8/3/2006 10:33:19 AM

I have to leave, I just wanted to close the NVDA trade for now. My bias is still bullish ahead of the Feds.

Marc Eckelberry : 8/3/2006 10:32:06 AM

We are having rate fears because Europe raised. A little ridicuous, but that's the way it goes. Link

Marc Eckelberry : 8/3/2006 10:32:37 AM

NQ gap is closed. Weekly pivot is at 1500, 10 dma at 1498 and that needs to hold going forward. Oil and gold have dropped, there is just lots of jockeying around ahead of the jobs report tomorrow.

Jeff Bailey : 8/3/2006 10:26:25 AM

Starbucks (SBUX) $29.71 -10.78% Link ...

MarketWatch Earnings Story Link

Marc Eckelberry : 8/3/2006 10:26:04 AM

Time to take some off, to be revisitied. Earnings are due 8/10.

Marc Eckelberry : 8/3/2006 10:27:04 AM

NVDA OPTION Exit Point Alert
Exit NVDA Jan 17.50 calls at 7.40, +3.40 or +110% (trade was entered at 3.50 two weeks ago).

Jane Fox : 8/3/2006 10:24:14 AM

AD line and volume are climbing but both are still below 0.

Jane Fox : 8/3/2006 10:23:20 AM

VIX suggested ES would make a new high and it did but the AD line below 0 is making any new headway difficult.

Jeff Bailey : 8/3/2006 10:15:41 AM

Medtronic (MDT) $44.90 -11.82% Link

Reuters Earnings Story Link

Jane Fox : 8/3/2006 10:11:08 AM

WASHINGTON (MarketWatch) - Demand for U.S.-made factory goods rose 1.2% in June as new orders for ships more than doubled, the Commerce Department said Thursday.

Transportation orders climbed by 7.4% on across-the-board increases in all types of equipment. The biggest gain - 119% -- came in orders for ships and boats.

Excluding transportation, orders for factory goods rose 0.1% in June, the eighth increase in the past nine months.

Factory orders are up 7.6% year-to-date. Factory orders in June were a bit weaker than the 1.7% gain expected by economists surveyed by MarketWatch. Factory orders rose an upwardly revised 1% in May.

Details of the report were weaker than the headline indicated. Much of the gain in orders came from the one-time jump in orders for military ships and big increases in orders for civilian and military aircraft.

Investment in business equipment softened. Confirming the surprising 1% drop in business investment in the second quarter reported last week in the gross domestic product data, the factory orders report shows shipments of core capital goods fell 0.5% in June after no change in May.

Jane Fox : 8/3/2006 10:10:00 AM

* JUNE FACTORY INVENTORY-SALES RATIO RISES TO 1.16
* JUNE EX-TRANSPORTATION FACTORY ORDERS UP 0.1%
* . JUNE CORE CAPITAL EQUIPMENT ORDERS UP 0.9%
* JUNE NONDURABLE SHIPMENTS FALL 0.7%
* JUNE DURABLE GOODS ORDERS REVISED TO 2.9% VS. 3.1%
* JUNE FACTORY SHIPMENTS FALL 0.3%
* JUNE FACTORY ORDERS UP 1.2% VS. 1.7% EXPECTED

Jane Fox : 8/3/2006 10:08:18 AM

VIX may be bullish but these two are certainly not and suggest today is a get short and stay short day. Link

Jeff Bailey : 8/3/2006 10:08:03 AM

US ISM July Non-Mfg Business Index 54.8 Vs June 57.0

ISM July Non-Mfg Prices Index 74.8 Vs June 73.9

ISM July Non-Mfg New Orders Index 55.6 Vs June 56.6

ISM July Non-Mfg Employment Index 54.5 Vs June 52.0

ISM: Increased Prices,Fuel Costs 'Areas Of Concern'

Jeff Bailey : 8/3/2006 10:05:12 AM

10:00 Market Watch found at this Link

Jane Fox : 8/3/2006 10:04:55 AM

ES is pressing up against its daily highs but has not been able to break through.

Jane Fox : 8/3/2006 10:02:43 AM

TRIN is making a series of higher highs and lows and is printing above its PDH - this is bearish and supports the bearish AD line and volume. The only internal that is out of sync is the VIX so I will stay on the sidelines until I see how this plays out.

Jeff Bailey : 8/3/2006 10:00:15 AM

Sprint Nextel (S) $17.23 -14.45% Link ...

AP Earnings Story Link

Jane Fox : 8/3/2006 9:59:59 AM

VIX is hanging around its daily lows suggesting ES will make a new daily high but and AD line at -595 makes me believe the new daily high, if we get one, will not make much headway.

Jeff Bailey : 8/3/2006 9:54:56 AM

Colorado State University: Reduces 2006 Hurricane Forecast

7 Hurricanes This Season, Vs 15 In '05

3 Intense Hurricanes Seen '06,Vs 7 In '05

Had Estimated 9 Hurricanes Back In May

Still Calls For Above-Avg Aug,Sep Activity

73% Chance Major Hurricane Will Hit US

64% Chance Major Hurricane Will Hit East Coast

28% Chance Major Hurricane Hits US Gulf Coast

Jane Fox : 8/3/2006 9:50:12 AM

VIX tests its PDH as ES tests its PDL, just like it should be. Link

Keene Little : 8/3/2006 9:48:46 AM

ES got the bounce off 1274.75 so now we'll see what develops from it. Gap close? I'd be a little surprised if that happens but this market has been full of surprises (called whipsaws). The 60-min chart of ES now shows the potential for an island reversal (gapped up yesterday and gapped down today leaving an island of candles stuck up there). The 1279-1280 area is where I'd look for resistance.

Jane Fox : 8/3/2006 9:43:28 AM

YM breaks to a new daily high followed by ES. NQ is struggling with its PDH and ER is ... well bringing up the rear.

Jane Fox : 8/3/2006 9:36:25 AM

NQ does not quite hit its 127.20% of yesterday's range. YM tags its 127.20%. Both ES and ER have surpassed their 127.20% Link

Jane Fox : 8/3/2006 9:34:34 AM

VIX opens above its PDH but the TRIN opens within its PDR.

Jane Fox : 8/3/2006 9:33:49 AM

AD line opens at -599 and volume below 0. The bears have the ball this morning and will be interesting to see if they can keep it.

Jane Fox : 8/3/2006 9:27:08 AM

NQ has two red trendlines that are working against the bulls and putting a lid on any further advances. As I have stated before this market should make bulls in all other markets worry. Link

Keene Little : 8/3/2006 9:23:59 AM

Going back to the ES chart I posted late yesterday, a drop this morning will take it down to its uptrend line from July 18th, currently at 1274.75. This morning's pre-market low is so far 1275.25. I would think that uptrend line will provide support for at least a bounce. Link

Yesterday's gap gets closed at 1276.75 which is where ES is currently trading. So I'd look for a bounce attempt this morning but a drop back down through 1274 could accelerate. Light volume summer time trading means moves could happen faster than normal.

Jane Fox : 8/3/2006 9:21:20 AM

Isn't it amazing how that red downward trendline has been resistance? Also do you see a H&S forming? Although a H&S here is not anything I would trade because this pattern is so much more powerful at highs but it does make the bulls worry all the more. Anyway you look at this chart, it is not bullish. Link

Jane Fox : 8/3/2006 9:14:49 AM

DES MOINES, Iowa (MarketWatch) -- Starbucks Corp. (SBUX) Wednesday blamed a disappointing comparable-sales increase in July on a service bottleneck created by surprising demand for cold beverages during its peak morning hours.

But Chief Executive Officer Jim Donald said during a news conference he was confident the issue can be resolved quickly, and he indicated it shouldn't be a significant factor in August results.

"Once we identified the bottleneck our immediate reaction was to deploy additional partners (employees) to handle it," he said. Also, some equipment will be rearranged and "we're looking at blender speed," he said.

Because of surprising demand mornings for frappuccino and juice-based blended cold beverages, some store work schedules will be revised to alleviate future service slowdowns, the CEO said

Jane Fox : 8/3/2006 9:12:15 AM

YM has been in a range since early June as well (from 11340 to 10720) and I will remain bullish until I see a close below the lower red trendline which would be a close below all major MAs as well. This would also cause the MACD to cross but with a small bullish divergence. This is never easy is it? Link

Jane Fox : 8/3/2006 9:07:35 AM

I don't need to show you this chart for you to know that the S&P futures are still in the range from ~1290 to 1230. These ranges are great for credit spreads but not for swing trading. I can't get too excited about any market right now, as I have stated ad nauseum, and I just cannot shake the bearishness I feel. Link

Jane Fox : 8/3/2006 9:00:49 AM

Here is the reason Oil and Nat Gas are down

NEW YORK (MarketWatch) - Crude prices fell in early trading Thursday after Tropical Storm Chris weakened overnight easing concerns about a potential threat to oil installations in the Gulf of Mexico, with natural gas likely to be a focus later in the session as traders await weekly supply data.

Crude for September delivery was last down 76 cents at $75.05 a barrel in electronic trading. Gasoline futures were down 5.07 cents at $2.287 a gallon while heating oil futures fell 2.89 cents to $2.10 a gallon.

"The fact that the tropical storm is probably not going to strike the U.S. mainland is the main reason," behind the fall in crude, according to Jim Wyckoff, analyst at TradingEducation.com. "But in the three days of trading prior to today's session, we saw a very good run-up and we're just seeing a corrective pullback."

Tropical Storm Chris is "weakening in a hurry," according to the National Hurricane Center. Maximum sustained winds have fallen to around 45 mph, with little change in strength forecast over the next 24 hours. A tropical storm warning, however, remains in effect for the coast of the Dominican Republican, although it has been discontinued for Puerto Rico and the U.S. and British Virgin Islands.

Jane Fox : 8/3/2006 8:55:13 AM

Tbonds broke their previous day highs overnight but were not able to follow through on the break and have retreated back to about 50% of its PDR.

Oil broke its previous day low overnight in a series of lower lows and highs so it was not Oil that is driving down the equity markets. Oil's low overnight was 74.90

Gold also broke its previous day lows but his market needed a rest and remains bullish. Gold's low overnight was 655.10

Obviously tropical storm Chris is not much of a threat because Natural Gas has made a series of lower lows and highs overnight.

It seems like everything sold off overnight. Natural Gas overnight low as 7.325. Link

Jane Fox : 8/3/2006 8:47:54 AM

WASHINGTON (MarketWatch) -- The number of people collecting state unemployment benefits over the past four weeks rose to the highest level since March, another sign that hiring in the U.S. economy has softened.

The Labor Department said Thursday that seasonally adjusted first-time claims for unemployment benefits rose by 14,000 to reach 315,000 in the week ended July 29. The four-week average of new claims, which smoothes out one-time factors such as weather or holidays, was nearly flat at 313,750. Read the full government report.

The number of workers collecting jobless benefits rose by 11,000 to stand at 2.48 million in the week ended July 22. The four-week average of continuing jobless claims rose by 8,000 to 2.47 million, the most since March.

The insured unemployment rate, measuring the percentage of those eligible for benefits who are collecting them, remained at 1.9%.

Jane Fox : 8/3/2006 8:45:07 AM

I can't grab an image fast enough to show you how fast the markets are falling and making new daily lows. ER has just broken its PDL, NQ will probably be next then ES and YM. Not sure what fueled this fall. Link

Jane Fox : 8/3/2006 8:42:35 AM

Dateline WSJ Most major retailers reported mixed July same-store sales Thursday amid concerns about the health of U.S. consumers' spending power.

In the face of soaring gasoline prices and a slowing housing market, U.S. consumers appeared to defy gravity through late spring, snapping up clothing, electronics and groceries with abandon. Sales, however, had fallen short of expectations since mid-June, and some economists were concluding that the economy's drag is finally gripping consumers.

In an effort to grab shoppers' attention, Wal-Mart Stores Inc. already has begun to slash prices on back-to-school merchandise, from school supplies to fall apparel. The world's largest retailer posted a 2.4% gain in same-store U.S. sales for July, landing on the high end of its forecast for the month and rebounding from a relatively weak showing in June.

For its July U.S. sales, Wal-Mart had forecast a gain of 1% to 3%, repeating the range for August expectations. It has cited high gasoline prices and soaring energy costs as burdening its customers and sapping its sales gains. In addition, many of Wal-Mart's sweeping measures to remake itself -- including remodeling stores and revamping work schedules -- are likely hindering sales temporarily.

Target Corp. fueled worries earlier this month when the discount chain lowered its outlook for July sales. The company reported a 3.1% increase, below its earlier forecast of a 4% to 6% rise.

Jane Fox : 8/3/2006 8:38:53 AM

'Morn Keene.

Jane Fox : 8/3/2006 8:34:32 AM

Dateline WSJ FRANKFURT -- The European Central Bank raised its key interest rate by a quarter of a percentage point to 3% on Thursday, the fourth such increase in eight months as it tries to curb inflation.

The move had been expected as the bank tries to reign in price increases, and could lead to a sustained acceleration in the pace of rate increases -- something markets will be looking for hints about from ECB President Jean-Claude Trichet.

It also follows a similar move earlier in the day by the Bank of England, which raised its key interest rate a quarter of a percentage point to 4.75% in what it said was a necessary move to curtail inflation. That was the first change to the rate since August 2005, when the Bank of England cut the rate by a quarter of a percentage point to 4.5%.

The U.S. Federal Reserve is scheduled to meet next to mull its own interest-rate move.

Keene Little : 8/3/2006 8:27:29 AM

Late yesterday I posted an ES chart that showed a picture perfect short play setup at 1288. This YM chart shows a bearish picture as well--the ascending wedge broke to the downside on Tuesday and yesterday's rally came back up for almost a retest of the broken uptrend line. It didn't make it for a touch of the line like ES did so the entry would have been more difficult for this one. But the picture presented here is bearish. Link

The negative divergences against the new highs during this rally support the bearish ascending wedge interpretation. These wedges tend to retrace quickly which says we should see a quick drop back down to the July 18th low. What I don't know yet is whether or not a decline from here (if we get it) will be the start of a larger decline (I have my doubts about that based on the season) or if instead it will be just part of the choppy summer rally scenario.

In yesterday's late-day post I had mentioned that the short term pattern for ES would look better with a small 5th wave up in the leg up from Tuesday's low so beware of that possibility today (which would be a reversal of this morning's down open). I wouldn't plan on that happening but if it did then it should provide an excellent short entry. However, at this point I'd be inclined to short the bounces rather than buy the dips.

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