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Jeff Bailey : 8/17/2006 2:11:53 AM

Just seeing Keene's 09:00:53 AM EDT post regarding CPI

Producer price fall + Consumer Prices Rise = Improved Gross Margins manufacturers.

Jeff Bailey : 8/17/2006 1:56:30 AM

Hmmmm ... might also want to be very careful of a "dip and rip" back higher.

IBM $79.09 ... August Max Pain is $75 (5 increments)

Index Pivot Matrix for Thursday at this Link

Jeff Bailey : 8/17/2006 1:19:32 AM

SPY August "Max Pain" $127.00 ($1 inc)

SPX 1,265 (5 inc)

OEX 585 (5 inc)

Jeff Bailey : 8/17/2006 1:17:47 AM

DIA August "Max Pain" $111.00 ($1 increments)

Jeff Bailey : 8/17/2006 1:11:44 AM

QQQQ Option Montage at 08/16/06 Close Link ... Tonight's August "Max Pain" calculation up to $37.00. Link

Jeff Bailey : 8/16/2006 11:41:20 PM

nq06u and chart I put together a couple of months ago with a then "conventional" (blue) and my "bear fit 38.2" at this Link

Jeff Bailey : 8/16/2006 11:17:06 PM

nq06u ... be alert for a "pop" and then a pullback toward "QQQQ $37.70" with 2-days left in OP-EX. NQ with contract high/low settlement retracement at this Link

Keene Little : 8/16/2006 10:13:20 PM

Thursday's pivot tables: Link and Link

OI Technical Staff : 8/16/2006 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 8/16/2006 7:08:56 PM

Lam Research (LRCX) $41.94 +1.87% Link ... was one of the stronger chip names up until Intel's most recent quarterly earnings.

Jeff Bailey : 8/16/2006 7:05:17 PM

Marvell Tech (MRVL) $20.64 +10.84% ... we put this one on 5/11/06 at the $27 level (pre split). Might be worth a long after achieving bearish vertical count just on trend.

Jeff Bailey : 8/16/2006 6:23:15 PM

Qualcomm (QCOM) $37.83 +6.71% Link ... After multiple broker upgrades starting in late June at the $40 level, stock just back above most recent upgrade (07/20/06 @ $36.26) from CSFB. CSFB downgraded the shares on 01/17/06 at $47.42.

Jeff Bailey : 8/16/2006 6:11:58 PM

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

Today's Activity

Just after the market open we were stopped out of the NASDAQ-100 Tracker QQQQ Sept. $36 Puts (QQQ-UJ) when they traded at the bid of $0.20 ($-0.20/contract, or -50%)

With energy related stocks and commodities trading weak, I decided not to risk a decline back below the Aug $60 Call strike and closed out the Intercontinental Exchange (ICE) 1/2 position long at $62.65, which was shy of $64.00 target. ($+3.15/share, or +5.29%)

Marc Eckelberry : 8/16/2006 6:16:46 PM

QCOM and NVDA, 7% winners. Brokers are scrambling to upgrade stocks, after spending three months bashing them in order to get their firms in at lower prices. If you don't believe this, you have another thing coming. The game never changes. To beat them, you just have to hold your nose, close your eyes, shut out the noise and buy when you see value. This requires work and study, something too many traders are not willing to do. Go and look at some balance sheets and check out the stores and so forth, because the real money lies in this kind of work. No chart in the world was going to tell you QCOM would jump 7% today. In fact, PEG was cheap, forward p/e was below projected growth and revenue was solid, with high profit margins. This action today unfortunately puts the stock back at par and correct value, which is to say it would have been a better deal yesterday.

Jeff Bailey : 8/16/2006 5:27:14 PM

Closing Internals found at this Link

Jeff Bailey : 8/16/2006 4:57:47 PM

Closing U.S. Market Watch found at this Link

Marc Eckelberry : 8/16/2006 4:19:15 PM

It's basically when option sellers lose control and they have to cover. It adds even more fuel.

Marc Eckelberry : 8/16/2006 4:20:17 PM

I will never forget the option expiration week of October 2002. I had calls set to expire that Friday and I let go on Tuesday. By Friday, they had climbed another 200%. Lesson? When things get really kicking in one direction during opex week, you better stay in or stay out of the way. It is like a freight train. Look at May, same thing the other way around.

Jane Fox : 8/16/2006 4:17:38 PM

Economic Reports for tomorrow include:

8:30a.m. Initial Jobless Claims For Aug 12 Wk. Consensus: -4k. Previous: +7k.

10a.m. July Conference Board Leading Indicators. Consensus: +0.1%. Previous: +0.1%.

12p.m. August Philadelphia Fed Business Index. Consensus: 8.0. Previous: 6.0.

Jane Fox : 8/16/2006 4:10:36 PM

H-P posts surge in earnings from a year earlier, when results were weighed down by currency repatriation, as revenue climbs 5.4% to $21.89 billion. H-P's board also authorizes $6 billion share repurchase.

Jane Fox : 8/16/2006 4:09:49 PM

Just like yesterday we have a late day small selloff.

Tab Gilles : 8/16/2006 4:09:45 PM

HPQ closed @ $34.43; After-hours Bid: 34.92 Ask: 34.94 Link

Marc Eckelberry : 8/16/2006 4:09:53 PM

If SPX holds on to 1285, 61.8%, wecould see new highs this year, as unreal as it sounds.

Jeff Bailey : 8/16/2006 4:09:07 PM

Sell Program Premium ... SPY $129.70

Marc Eckelberry : 8/16/2006 4:07:56 PM

That said, in 1987 we reached new highs in late summer, after a big correction. We then proceeded to crash all the way down through December. So if we hit new highs on SPX, I am out of there...

Marc Eckelberry : 8/16/2006 4:06:57 PM

SPX is back above the 2003 bull market trendline and well above 10 month MA as well as 20 dma. I'm not sure we can call this a bear market rally since we are now only 30 points away from multi year highs. We have retraced almost 75% of the entire decline of 2006. Not a bear market in my book, just a well needed 10% correction. The story is very differnt for techs, but they are about to catch up.

Tab Gilles : 8/16/2006 4:06:04 PM

Hewlett-Packard Company (HPQ) HP Reports Third Quarter 2006 Results HP announced financial results for its third fiscal quarter ended July 31, 2006, with net revenue of $21.9 billion, representing growth of 5% year-over-year, or 6% when adjusted for the effects of currency. GAAP operating profit was $1.5 billion and GAAP diluted earnings per share (EPS) was $0.48 per share, up from $0.03 in the prior year period. GAAP financial information for the third quarter 2005 reflects a tax adjustment resulting from HP's decision to repatriate $14.5 billion in cash from foreign earnings.

Tab Gilles : 8/16/2006 4:02:55 PM

Xilinx (XLNX) $22.72 +$2.07 (+10.02%) Link Link

Marc Eckelberry : 8/16/2006 4:03:02 PM

I don't think I've see two back to back +35 NQ daily candles in a long time.

Marc Eckelberry : 8/16/2006 4:03:14 PM

I mentioned SMH 33.43 yesterday, high today was 33.11. We started the week at 30.90 or so.

Keene Little : 8/16/2006 3:58:26 PM

It'll be interesting to see if these gains are held tomorrow or if this is mostly opex related. The ascending wedge could still be in play and any drop out of it could be swift. But the overall chop we've been in makes it difficult to get a sense of direction. Too many times each side has thought we're establishing a new trend only to see it reversed on them. I wouldn't be a bit surprised to see this get reversed on all those who bought this the past 2 days.

Marc Eckelberry : 8/16/2006 3:55:29 PM

If they start getting behind this rally, I will start booking profits. As long as they pooh-pooh it, it will keep going.

Marc Eckelberry : 8/16/2006 3:53:00 PM

The only time I will ever read a high circulation general public web site is to get the contrarian viewpoint, because if you listen to those guys, you would have been running for cover on Monday.

Marc Eckelberry : 8/16/2006 3:51:09 PM

Sure wish I still had those NVDA Jan 17.5 calls. I thought it was a great tradae at 110%, but it is now at 10.70, or 300%.

Jeff Bailey : 8/16/2006 3:49:03 PM

QQQQ Options Montage ... OI updated to yesterday's close at this Link ... OI on the $37 Calls (QQQ-HK) actually increases! Yesterday's closing Dn/Up was 7,215/3,860. The INCREASE in OI with that type of Dn/Up suggest NAKED, or COVERED Call writing on the $37.00 strike yesterday.

Today's price action in the QQQQ suggest it was NAKED selling to me.

Now the NASDAQ NH/NL, not nearly as bullish as I would have thought.

That suggests STRONG INDEX buying (buy all 100) with either the QQQQ, or NQ to hedge off yesterday's mistake of selling $37 Naked.

Marc Eckelberry : 8/16/2006 3:48:45 PM

You bought just about any semi stock last month, especially the ones hit with option backdating stuff, and you made a small fortune by now. NDVA, ALTR, XLNX etc... I won;t even mention TXN, just rocking.

Marc Eckelberry : 8/16/2006 3:44:15 PM

SOX 200. Right. I remember that debate with Greenberg I had last month at MarketWatch in is blog. I told him we would be well into 400's in August. Here we are almost at 450.

Marc Eckelberry : 8/16/2006 3:34:48 PM

Bear market rallies can last a couple of weeks. I had mentioned a month ago that I thought we would get a big August rally, well here it is, a little late, but it;s happening. Just the opposite af last year, so forget your Almanacs (I never pay attention to that usless piece of junk, maybe November but that's it).

Jeff Bailey : 8/16/2006 3:32:31 PM

QQQQ $38.47 +2.04% ... so far I'm off an entire $1.00 (that's way off in my opinion) of yesterday's forecasted $37.43 Friday close

Marc Eckelberry : 8/16/2006 3:31:02 PM

DELL tomorrow after the bell. We should pause before that, but be careful, when opex goes on a rampage in one direction, it is almost unstoppable, so shorting is a dangerous game this week.

Marc Eckelberry : 8/16/2006 3:28:30 PM

ES monthly R1 is 1304.

Jeff Bailey : 8/16/2006 3:28:21 PM

NASDAQ's New Highs of "just" 67 compared to yesterday's 73 seems a little weak to me.

I'm not long any calls, I wish I were, but if I was, I'd sure be a bit skeptical that price action is LARGELY due to option expiration.

All is fair regardless, and while it is just as tempting to go short for a dip back towards the lower strike, shorts are getting the "Max Pain"

Marc Eckelberry : 8/16/2006 3:27:38 PM

NQ monthly R1 at 1595. It all adds up with July 3rd gap close. I would say lighten up on all longs between NQ 1590 and 1600.

Tab Gilles : 8/16/2006 3:26:04 PM

Back on 6/27/06 I posted that the $COMPQ and $SPX presented a buying opportunity and one way to play it was to use the Profund, eg. UOPIX...

Tab Gilles : 6/27/2006 11:20:55 AM

The weekly $NASI gave a reversal signal after yesterday's close. I'd like to see a few more days go by to see if that this isn't a false reading. However, with all the other technical and sentiment reading in both the $COMPQ & $SPX giving bottoming signals, I'd say this presents a buying opportunity. My belief is that when the Fed makes it's move the markets will rally. Link Link Here again are some of the charts I posted yesterday at 11:26 AM. Link Link Link

One way to play tis rally is with leverage sector funds either Profunds or Rydex. ....UOPIX.. Link

Follow-up

Entered Profund Ultra OTC (UOPIX) 6/27 $20.27/ entered Profund Ultra Russell (UAPIX) $25.62.

UOPIX Link UAPIX Link

Several other indicators... Link Link Link Link

Jane Fox : 8/16/2006 3:22:37 PM

Today a carbon copy of yesterday. That is pretty weird! Link

Jeff Bailey : 8/16/2006 3:22:05 PM

03:00 Internals found at this Link

Marc Eckelberry : 8/16/2006 3:20:31 PM

My guess is we go and close the July 3rd gap at NQ 1603.50, probably stall at 1599 or so. That is the target. For QQQ it could be 39, or a little under that. Open is 38.64, so take our pick. In light of the extreme move lower on QQV and VXN (VIX as well) I would get out of any longs at that point if not a little earlier and wait and see. NQ 1587.50 to 1603.50 is the zone.

Jeff Bailey : 8/16/2006 3:12:11 PM

ICE $62.60 +2.87% ... hanging around mid-point of $60/$65 strike.

Marc Eckelberry : 8/16/2006 3:11:53 PM

Elsewhere in the sector, Advanced Micro Devices Inc. shares, which have traded between $16.90 and $42.70 over the last year, were up $1.43, or 6.8 percent, to $22.30 on the New York Stock Exchange. The stock jumped despite cautious comments from Cowen analyst John Barton, who initiated coverage on the stock with a "Neutral" rating and said he believes the company's momentum in market share gains has peaked. "We expect that Intel's current, broad product refresh cycle will close the performance and architectural advantage that drove the gains," Barton wrote in a note. Barton initiated coverage on Intel with an "Outperform" rating, and said he believes the stock is a "high-quality turnaround story." Intel shares were up 35 cents, or 2 percent, to $18.48 on the Nasdaq. Link

Jeff Bailey : 8/16/2006 3:10:21 PM

SPY $129.80 +0.90% ... pennies away from MONTHLY R1.

Jeff Bailey : 8/16/2006 3:09:25 PM

Ferocious amount of call buying/put selling the last two days.

Jeff Bailey : 8/16/2006 3:07:43 PM

VIX 12.22 -8.94% ... it could go MONTHLY S1

Tab Gilles : 8/16/2006 3:03:59 PM

Weekly EIA Report Link

Marc Eckelberry : 8/16/2006 3:06:37 PM

SPX 1286 is now support. What a drmatic change and a lot of that because COMP and NDX closed above 50 dma yesterday. Of course, the Fed easing is the main reason, but it was reflected in the tech sector, which is rate sensitive (and small caps)

Jeff Bailey : 8/16/2006 3:02:59 PM

03:00 Market Watch found at this Link

Marc Eckelberry : 8/16/2006 3:01:26 PM

The COMP has busted through trendline resistance and neckline of inverted HS and looks headed for 2230 in the next week or so.

Marc Eckelberry : 8/16/2006 3:02:03 PM

Jane, my bet on Gold is that it is being used as a hedge toady, especially December contract, hence the excess volume on that one. It's the safe bet if you go long equties to hedge with gold. With the huge drop in oil and fear of inflation abating, I'm not sure I would chase it. In fact, October gold is falling to 631 and could easily get back to 626, 50 dma. I;m using October for chart purposes as it has less time premium.

Keene Little : 8/16/2006 2:46:22 PM

Today is another one of those days that has all the markings of big money jamming the shorts, something we've seen time and again during opex weeks. The mega banks' trading teams have all the money they want to move the market in the direction that is beneficial to them. The volume is low and they don't let it pull back before jamming it higher again. There's certainly nothing we can do to fight it and yet we don't know when they're going to stop. Continue to be cautious here since this is now being built on fluff.

Jane Fox : 8/16/2006 2:42:17 PM

ES tags 1297.75 will it go higher? The internals say yup!

Jane Fox : 8/16/2006 2:34:24 PM

DEC. GOLD CLOSES HIGHER FOR FIRST TIME IN FIVE SESSIONS

DEC. GOLD CLIMBS $6.10 TO CLOSE AT $639/OZ IN NY

Jane Fox : 8/16/2006 2:31:43 PM

WASHINGTON (MarketWatch) -- The economy and interest rate policy are at a crossroads and any Fed watcher who is certain about which road the central bank will take should be taken with a grain of salt, said Dallas Fed president Richard Fisher on Wednesday.

The U.S. economy is downshifting, but there is also a definite increase in inflation momentum, he said.

Although the Fed expects that the lagged effects of the past 17 rate hikes and tightening by other central banks around the globe may "tamp down" inflation pressure, "nobody knows with precision how the dynamics of the global economy affect these lags or the practicability of our policies. At least I don't," Fisher said.

"If anybody tells you with absolute conviction that the Fed is done raising interest rates or with equal conviction that they have only paused and will raise rates more starting in September or October, remind yourself that at best -- and I'm being generous here -- they are only guessing," Fisher said in a luncheon speech to a real estate trade group in Dallas.

Fisher said the Fed decided to pause on Aug. 8 "in significant part because of the lags in time it takes for the tightening measures the FOMC had taken over the previous 17 meetings to affect the economy's inflationary impulses."

Jeff Bailey : 8/16/2006 2:28:45 PM

Bullish swing trade exit alert for ICE $62.65 +2.95%

Jane Fox : 8/16/2006 2:25:35 PM

ES tags daily highs but VIX does not tag its daily lows.

Jane Fox : 8/16/2006 2:24:07 PM

Gee I just checked and today's high was 1297 HMMM maybe that is all there is.

Jane Fox : 8/16/2006 2:23:08 PM

ES is getting overbot and 1298 is a logical spot for it to take a rest.

Jane Fox : 8/16/2006 2:22:10 PM

If you are long ES I would put a limit order in at 1298 based on this chart. Link

Jane Fox : 8/16/2006 2:16:03 PM

TICKs reach +1000 but today is not a day to be fading.

Jeff Bailey : 8/16/2006 2:04:31 PM

ICE ... MWSE is $60.80/$63.50 on Level II

Jeff Bailey : 8/16/2006 2:03:31 PM

ICE ... $62.40 +2.54% ... on the alert ...

Jeff Bailey : 8/16/2006 2:02:50 PM

ICE Options Montage had 1,956 OI at the $60 Calls and 2,177 at the $65 Calls.

I don't want to RISK an op-ex decline back below $60.

Do see 333 calls Up/Dn tick 137:8 having traded at the CBOE, so I get the feeling/observation, price rising from the $60.00, but that's where the RISK is at into Friday's close.

I don't think OXY's trade at $52.50 and intra-day reversal should go without some mention.

Jane Fox : 8/16/2006 2:02:00 PM

I think our next move is to new daily highs and a repeat of yesterday.

Jeff Bailey : 8/16/2006 1:39:43 PM

01:05 Internals found at this Link

Jane Fox : 8/16/2006 1:36:29 PM

Once the VIX settled down from this mornings gyrations, it has been tracking ES just like it should and can be used to help you trade ES again. Link

Jeff Bailey : 8/16/2006 1:34:08 PM

Be al_rt on ICE if it trades $62.50.

Jeff Bailey : 8/16/2006 1:33:41 PM

Occidental Petroleum (OXY) $51.59 -0.61% ... after session high trade of $52.50.

Jeff Bailey : 8/16/2006 1:31:45 PM

Bullish swing trade long raise stop alert ... for ICE $62.16 +2.15% ... to $61.40

Jeff Bailey : 8/16/2006 1:23:07 PM

Bad tick in MSFT to $25.00 ... MSFT $24.64 +0.08%.

Dutch auction ends at today's close.

Jeff Bailey : 8/16/2006 1:19:52 PM

01:05 Market Watch found at this Link

Keene Little : 8/16/2006 1:11:54 PM

With the DOW at its downtrend line from May and SPX testing its Aug 4th high, I'm sure a continuation higher would hit a few short stops. But again, until that resistance is broken, this is a good place to try a short and we'll see if and what kind of pullback we get.

Jane Fox : 8/16/2006 12:56:18 PM

WASHINGTON (MarketWatch) -- The pace of activity in building new homes fell in July to the lowest level in nearly two years, adding another piece of evidence indicating a slowing U.S. economy.

Housing starts, tracking the nation's rate of construction on new homes, fell 2.5% last month to 1.8 million on a seasonally adjusted annual basis, the Commerce Department said Wednesday.

This marked the fifth decline in housing starts in the last six months. It's the lowest level since November 2004.

Economists surveyed by MarketWatch had been looking for a smaller decline, to about 1.82 million starts in July.

Meanwhile, building permits -- an indicator that foreshadows future construction activity -- plunged 6.5% to 1.75 million annual units for July. This was the sixth straight monthly decline and the largest drop seen since September 1999.

Permits are at their lowest level since August 2002.

Jane Fox : 8/16/2006 12:52:02 PM

Nat GAs and Oil are falling to new daily lows.

Jane Fox : 8/16/2006 12:43:55 PM

SInce early this year whenever RSI got above 70 NQ has retraced. I expect it to do the same this time. Link

Keene Little : 8/16/2006 12:41:16 PM

The DOW has now pressed up against its downtrend line from May through the Aug 4th high, at 11295. Once again this is a good place to try a short but realize short plays are dangerous at times like these during opex week.

Jane Fox : 8/16/2006 12:39:05 PM

Internals remain very bullish and not a time to get short - yet.

Marc Eckelberry : 8/16/2006 12:17:45 PM

Got it, you are December Gold, which is probably the right one. It shows bigger volume today. I'll change charts, although results are the same relatively.

Jane Fox : 8/16/2006 12:16:02 PM

I have a delay on big Gold contract so I use and trade an emini.

Keene Little : 8/16/2006 12:15:42 PM

Even today's price action is forming a small ascending wedge with the bearish divergences to support it. If this is being manipulated higher by big money then technicals will be meaningless here, otherwise this has all the markings of a rally topping out.

Jane Fox : 8/16/2006 12:14:13 PM

Marc I am quoting the December ZG (100 oz emini)

Marc Eckelberry : 8/16/2006 12:11:36 PM

Jane, are you quoting futures on Gold? Because the contract being traded in volume now is October and it is at 635.80. My MA and quotes have been for this one since last week. Support 626 resistance 642. HIgh so far is 637.

Jane Fox : 8/16/2006 12:10:17 PM

NYSE ADVANCERS OUTNUMBER DECLINERS 23 TO 8

NASDAQ ADVANCERS OUTNUMBER DECLINERS 16 TO 11

Jane Fox : 8/16/2006 12:03:28 PM

This 240 minute chart of NQ tells me this market needs to take a rest because it is getting quite overbot. Link

Jane Fox : 8/16/2006 11:59:20 AM

Gold breaks to a new daily high at 643.

Jane Fox : 8/16/2006 11:57:46 AM

YM and ER's H&S are still in play but I wouldn't try shorting them.

Jane Fox : 8/16/2006 11:57:11 AM

NQ just made a higher high, ES an equal high and YM and ER lower highs.

Marc Eckelberry : 8/16/2006 11:55:47 AM

So much for shorting this market. The bulls are back and they will run this higher over the next few weeks.

Jane Fox : 8/16/2006 11:55:41 AM

TRIN also tests daily lows so the internals are all still quite bullish.

Jane Fox : 8/16/2006 11:55:16 AM

... and at the same time VIX tests daily lows confirming ES's test of daily highs.

Jane Fox : 8/16/2006 11:54:40 AM

ES tests daily highs and negates the bearish H&S.

Keene Little : 8/16/2006 11:50:14 AM

ES is fighting to hold onto its uptrend line from Monday's low. As long as it holds shorts will have trouble but the minute it breaks it could break hard.

Jane Fox : 8/16/2006 11:46:08 AM

ARe we adding some H&S to the bearish MACDs now? Link

Jeff Bailey : 8/16/2006 11:45:26 AM

Bearish swing trade short lower stop alert ... for the StreetTracks Gold (GLD) $62.71 +1.12% ... to $62.90.

Jeff Bailey : 8/16/2006 11:35:54 AM

Hang Seng ($HSI.X) Link trades new 52-week high in Tuesday's session and closes +176 points, or +1.02% at 17,451

Jeff Bailey : 8/16/2006 11:26:27 AM

37 New Lows at the NASDAQ are the fewest since 07/03/06 when NH/NL came in at 79:37.

On July 3, the QQQQ closed at $39.00.

QQQQ $38.01 +0.82% ...

Jane Fox : 8/16/2006 11:25:09 AM

Inco (N) was halted for trading because Teck Cominco announced that it will not amend the outstanding offer to purchase Inco.

Inco has resumed trading within the last 10 minutes and is now down 1.84 at $77.91. The stock is pulling back from the upper end of a 3-week range at the highs of the year

Marc Eckelberry : 8/16/2006 11:23:42 AM

If you went short at 1552.50, put your stop at 1555. I am not doing signals because I don;t have the time today. Keep in mind this is a counter-trend play, and I would go long again above 1533. This rally should go on until about Labor day.

Jeff Bailey : 8/16/2006 11:22:29 AM

11:00 Internals found at this Link

Note: Current 5-day NH/NL ratios for both the NYSE and NASDAQ would show 3-box reversals back higher of 52.00% and 22.00%.

Daily ratios will easily have 5-day's moving above 10-day's tomorrow.

Jane Fox : 8/16/2006 11:19:16 AM

* INNERWORKINGS (INWK) IPO OPENS AT $10.25, ABOVE $9 PRICE
* INNERWORKINGS IPO TRADES AT $10.51
* INNERWORKINGS IPO VOLUME 2.3 MLN SHARES

Jane Fox : 8/16/2006 11:14:49 AM

Yesterday MACD confirmed the bullishness but the bearish divergences today may be saying we have hit a top. Internals are still strong so don't try shorting but make sure you keep an eye on the MACD. Link

Keene Little : 8/16/2006 11:14:08 AM

The rally looks to be petering out as negative divergences appear. It also looks like the rally has formed an ascending wedge. A break down through 1291 would be confirmation and if this wedge goes the way wedges normally go we'll see a relatively fast retrace back to the start of it--near 1270. In the meantime this could still press higher, especially if we get a throw-over the top in which case ES could approach 1300. But it's getting to the point where it's dangerous to chase this higher. Link

Jane Fox : 8/16/2006 11:10:01 AM

These are just like yesterday and telling me shorting will not give me the highest odds of a successful trade. Link

Jeff Bailey : 8/16/2006 11:04:35 AM

11:00 Market Watch found at this Link

Jeff Bailey : 8/16/2006 11:03:55 AM

StreetTracks Gold (GLD) ... 60-minute interval chart at this Link

Marc Eckelberry : 8/16/2006 10:56:16 AM

Bit of a squeeze going on.

Marc Eckelberry : 8/16/2006 10:53:14 AM

If NQ can't clear 1552.50, it will be time to book profits.

Marc Eckelberry : 8/16/2006 10:52:26 AM

If producers can't raise prices (see yeaterday's PPI) than you can bet it will help retail keep prices lower and eventually ease core cpi even further. That is what the street is rallying on and the drop in oil.

Keene Little : 8/16/2006 10:51:03 AM

If that was a test of this morning's high, and doesn't keep going now, it will leave a negative divergence and that'll be a signal to get short.

Marc Eckelberry : 8/16/2006 10:50:40 AM

YG 639/643 is confluence 10 amd 20 ma. I would go along with a gold rally if it closes above that, but not quite yet. If oil drops further, the inflation fears will be even further negated.

Marc Eckelberry : 8/16/2006 10:47:49 AM

I think inflation is not a threat, so I would short gold at 642.

Jane Fox : 8/16/2006 10:47:03 AM

Oil seems to be finding support at the 200EMA but could get all the way down to 70 to test the bottom of this channel. Link

Marc Eckelberry : 8/16/2006 10:45:54 AM

Big drop in NQ ADVDEC line and I think we have topped out for now, or close. Watch NQ 1552.50.

Jane Fox : 8/16/2006 10:43:03 AM

This chart certainly helped me take the long in Gold last night. Link

Marc Eckelberry : 8/16/2006 10:42:26 AM

NQ resistance is 1552.50, 61.8% June 30 high/ July low.

Jane Fox : 8/16/2006 10:41:04 AM

SAN FRANCISCO (MarketWatch) -- Gold futures rose Wednesday morning and were on track to break a four-session losing streak, as softer-than-expected consumer inflation data dulled expectations that the Federal Reserve will raise interest rates again and put pressure on the U.S. dollar.

The inflation data release clearly shows that Federal Reserve Chairman Ben Bernanke is "deluded in thinking that inflation is going to wither," said Ned Schmidt, editor of the Value View Gold Report.

"Gold giving short-term buy signal in U.S. dollars, Canadian dollars, euros and British pounds," he said.

Why you need to watch the $ if trading Gold.

Jane Fox : 8/16/2006 10:38:45 AM

ER tags its PDH and finds support. Link

Jane Fox : 8/16/2006 10:36:43 AM

OPEC cut its 2006 oil demand forecast by 80,000 barrels a day, citing an unexpected decline in OECD country demand. The cartel is now expecting demand in 2006 to rise 1.3 million barrels a day to 84.5 million barrels a day.

Growth in the OECD countries is expected to be somewhat stronger in the second half given the stabilization of gasoline prices, continued economic expansion, and normal weather in the fourth quarter, OPEC said. It held onto its view that oil demand should rise 1.5% in 2007

Jane Fox : 8/16/2006 10:34:56 AM

NEW YORK (MarketWatch) -- A pipeline in the hobbled Prudhoe Bay oil field has been taken out of service after coming close to being smashed or broken open twice last week, according to a report in the Anchorage Daily News Wednesday.

The newspaper, citing a spokesman for BP PLC (BP), said the pipeline remained intact, no oil leaked and no one was hurt after the two incidents.

In one incident, a drilling rig nearly tipped over onto the pipeline, and the other occurred when a sudden surge inside the line caused it to twitch like a live wire, knocking the elevated pipe off its support mounts and onto the tundra below, the Anchorage Daily News said.

BP, the U.K. oil giant that runs Prudhoe, has been forced to take the pipeline out of service, halting its flow of 20,000 barrels of oil per day, the newspaper said.

Keene Little : 8/16/2006 10:34:53 AM

The pullback from this morning's high looks a little corrective so as long as ES 1291 holds this should continue higher. It's a good place to try a long since you can keep your stop tight. But if 1290 is broken then I'd say the rally is in trouble.

Jeff Bailey : 8/16/2006 10:33:22 AM

Occidental Petroleum (OXY) $52.30 +0.75% Link

Jane Fox : 8/16/2006 10:32:21 AM

VIX is all over the map and since this is OPEX I don't think I will be relying on too much today.

Jeff Bailey : 8/16/2006 10:32:11 AM

EIA Weekly Inventory Data

Crude Oil -1.6 million barrels

Gasoline -2.3 million barrels

Distillates -300,000 barrels

Jeff Bailey : 8/16/2006 10:20:09 AM

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

Jeff Bailey : 8/16/2006 10:12:46 AM

Bullish swing trade raise stop alert on the 1/2 bullish position in shares of Intercontinental Exchange (ICE) $61.31 +0.75% ... to $60.90.

Marc Eckelberry : 8/16/2006 10:10:45 AM

Going to be about oil.

Marc Eckelberry : 8/16/2006 10:10:08 AM

Dave, I sure hoped this worked out for you.

Marc Eckelberry : 8/16/2006 10:09:06 AM

SMH has regrouped and the SOX is up 1.02% thanks to INTC.

Jeff Bailey : 8/16/2006 10:08:44 AM

10:05 Market Watch found at this Link

Marc Eckelberry : 8/16/2006 10:07:05 AM

INTC fired up on a broker call (Cowen outperform). I'm still in the January calls, I wish I had kept the readers in as well, but I felt the play had tremendous risk (still does) and decided it was not for what option traders are used to in the monitor. I save my wild plays here using futures, but this one I should hve left in for you. Nevertheless, INTC is coming up against some stiff resistance soon and a big gap close.

Jane Fox : 8/16/2006 10:05:59 AM

Expect PDHs to be support today if/when prices tests them Link

Jane Fox : 8/16/2006 10:04:28 AM

Now add an RSI to the chart and you see that NQ may just need a little more time before it can break out of this wedge. Link

Jeff Bailey : 8/16/2006 10:03:07 AM

For the QQQ-UJ, might get a fill today at the offer of $0.25.

Marc Eckelberry : 8/16/2006 10:01:36 AM

The SMH weakness was a clue as we head down a little. Watch NQ 1544 support and gap close at 1540.50.

Jane Fox : 8/16/2006 10:01:18 AM

Just to make sure you don't get too bullish too soon here is another chart of NQ. First of all it has not even reached a 38.20% of the fall from April. Secondly it has not broken out of this bear wedge. NQ is starting to look a lot more bullish than before but the bulls still have a lot of work ahead of them. Link

Keene Little : 8/16/2006 10:00:44 AM

The test of the strength of this move (vs. an exhaustion gap) will be a test of the broken downtrend line from May, just below 1291.50 now. A successful test of that level and reversal higher means buy the dips for now. A break back below 1291 that stays there will tell us this was a head fake move and the Boyz used it as an opportunity to unload some more inventory.

Marc Eckelberry : 8/16/2006 10:00:30 AM

Updated COMP chart with fib projections off neckline. Minimum target 2230 IF we close above 2125: Link

Jeff Bailey : 8/16/2006 10:00:07 AM

Option symbol change alert ... with the 2:1 stock split on Occidental Petroleum (OXY) $52.07 +0.30% ...

Traders should now have double the number of contracts purchased, and have an option symbol change.

New option/symbol is OXY Sep $52.50 Call (OXY-IX) with bid/ask of $1.45/$1.55

Jeff Bailey : 8/16/2006 9:56:07 AM

Swing trade trade put stop alert on the five (5) QQQQ Sep $36 Puts (QQQ-UJ) at the bid of $0.20 ($0.20 x $0.25) with QQQQ $37.92 +0.58%.

Keene Little : 8/16/2006 9:53:00 AM

This morning's gap up was the 3rd one in the move up from last Thursday. This could be the exhaustion gap for the move. If true, it will be downhill from here today.

Marc Eckelberry : 8/16/2006 9:48:39 AM

SMH getting weaker. This could be a signal here that the rally is about to stall.

Marc Eckelberry : 8/16/2006 9:46:29 AM

Gold is a concern. I hope it is not saying something other than low dollar. Bonds are enjoying a nice rall.

Jane Fox : 8/16/2006 9:46:07 AM

This certainly one of your get long and stay long kind of days but the bulls need to the digest the huge bite they took this morning and prices may be real choppy until they do.

Marc Eckelberry : 8/16/2006 9:44:37 AM

A pretty wild idea, but if QQQQ gets above trenline R at 38.13, I just might get 38.64 July gap open after all. As I said, a wild idea, but it has happened before. Bear market rallies can be very powerful and last a few weeks.

Jane Fox : 8/16/2006 9:42:38 AM

WASHINGTON (Reuters) - Output at U.S. factories, mines and utilities rose by a smaller-than-expected 0.4 percent in July, while capacity use edged higher but also came short of forecasts, according to a government report on Wednesday signaling a hot manufacturing economy may be ready to cool.

Capacity use rose to 82.4 percent, the highest rate since 82.5 percent in June 2000, from a downwardly revised 82.3 percent in June, the Federal Reserve said.

Analysts polled by Reuters had expected a 0.5 percent gain in July industrial production and capacity use at 82.6 percent after June's output of 0.8 percent and capacity use originally reported as 82.4 percent.

The data could provide some comfort to an inflation-wary Federal Reserve, which paused a more than two-year campaign of interest rate hikes earlier this month in the hopes that a slowing economy would control price growth.

Marc Eckelberry : 8/16/2006 9:41:57 AM

This is the next big deal, the COMP and trendline R as well as neckline. That inverted head and shoulder I wrote about last week is getting some air play: Link

Marc Eckelberry : 8/16/2006 9:39:54 AM

The crowd was just too bearish and a perfect recipe for this.

Marc Eckelberry : 8/16/2006 9:35:38 AM

I think we could ease today on growth concerns. The inflation rally is a little tired, and we have DELL coming tomorrow, so mind your step at this point. NQ above weekly R2 is somewhat limited. But again, we should stay the course as long as we hold on to COMP 50 dma on any pullback (2098).

Marc Eckelberry : 8/16/2006 9:33:41 AM

The main thing for technicians was to not ignore yesteday's move and close by COMP/NDX/QQQQ/SMH/SOX above the 50 dma for the first time since May. I had a feeling it was a big deal and I kept pointing it out. The other inportant move is SPX trading above the 10 month moving average. Now SPX is above 1286 a very key number.

Jane Fox : 8/16/2006 9:32:04 AM

Oh my goodness VIX is not only below its PDR but way below it.

Jane Fox : 8/16/2006 9:31:10 AM

Interesingly AD line is only +437 whereas yesterday's open was over +1000.

Marc Eckelberry : 8/16/2006 9:30:49 AM

With oil dropping and probably having a lot further to go, concerns about energy price inflation are easing as well. The core is what counts, but there is a school of thought that likes to include energy, so it is important to see oil drop further. This could be an other expkanation for gold strength asuide from dollar weakness. Oil inventories will be very important today.

Marc Eckelberry : 8/16/2006 9:28:06 AM

Aug. 16 (Bloomberg) -- Prices paid by U.S. consumers excluding food and energy eased last month, making it easier for the Federal Reserve to hold interest rates steady. So-called core prices, excluding food and energy, rose 0.2 percent, the smallest increase since February, after a 0.3 percent gain a month earlier, the Labor Department said today in Washington. Counting food and energy, prices rose 0.4 percent following June's 0.2 percent increase. The lower reading on core prices comes a day after the government reported that inflation remained unexpectedly tame at the wholesale level last month. Bonds and stocks extended their rally as traders judged the figures increase the chances Fed Chairman Ben S. Bernanke is finished lifting borrowing costs this year. The dollar weakened. Link

Jane Fox : 8/16/2006 9:27:59 AM

Here is an update of the GOLD chart I showed yesterday with only one trendline on it. I went long Gold last night based on this chart alone. Link

Marc Eckelberry : 8/16/2006 9:26:09 AM

Gold is up 7 and that is tied to the falling dollar (here we go again) as Ten year slips below 4.9%. Gold resistance is 642 and a possible short there since there is no reason to drive it up much higher. Gold traders have to decide between inflation protection and dollar weakness and today they are back to currency concerns.

Jane Fox : 8/16/2006 9:24:38 AM

This is the chart that has my attention. Notice how the overnight session is trading above the blue downward trendline and the 50EMA. The bulls need to get price above the 100 and 200 but this is the first step. The second thing that I see the higher low from earlier this month has now confirmed. Also MACD is agreeing with price. Simply said the charts are now telling me it is time to abandon my bearishness and start looking at this market from a bullish perspective. Link

Marc Eckelberry : 8/16/2006 9:23:25 AM

NQ now well above weekly R2 so I think we will see some pulling back, but at least it looks like a change in trend is now possible. That move and hold above 50 dma for QQQQ and SMH was important and we should hold it now. That is what counts going forward and this rally should have legs into Labor day.

Marc Eckelberry : 8/16/2006 9:21:47 AM

We hit the whisper at .2.

Jane Fox : 8/16/2006 9:16:02 AM

Just using plain Jane trendlines see how clear resistance is on this chart. Now using the MAs as a "standard" for bullishness or bearishness; price is above the MAs so bullish.

ES broke out of its magenta upward channel on August 8th and now needs to retest it before it can resume its downward trek. It just so happens that the swing high at 1298 is the exact number ES needs to reach in order to test the lower trendline.

The bulls are far from out of the water yet but I am giving them the benefit of the doubt here.

Technical analysis doesn't need to get any harder than this. Link

Keene Little : 8/16/2006 9:00:53 AM

Let's see if I've got this right. Yesterday the market gapped up because PPI had dropped and that was good news for the Fed. This morning futures have gapped up on the news that CPI and core CPI are up ("the highest year-on-year reading since December 2001."). Me thinks the market has an agenda regardless of the news, and of course opex will only exagerrate movement this week. We've either got a runaway market to the upside at this point or this will end badly for the bulls. Be careful.

Jane Fox : 8/16/2006 8:55:04 AM

Tnotes also like the CPI data out at 8:30. Bonds are the true test of what the market really thinks of economic data and they are agreeing with the equities.

As to be expected the commodities didn't make a blip on the news. Notice that Oil broke its PDL and Gold its PDH. Link

Jane Fox : 8/16/2006 8:50:49 AM

Needless to say the markets liked the CPI data. This move has broken all resistances on the daily charts and now the bulls need to close above those resistances and not lose what they have gained. For the shortterm I will have to do a Mea Cupa and put away my bears claws and put on some bulls horns. This move is impressive. Link

Jane Fox : 8/16/2006 8:43:06 AM

Dateline WSJ - WASHINGTON -- Higher energy prices pushed U.S. consumer prices higher in July but underlying inflation came in below expectations, breaking a string of four-straight elevated readings due to a steep slide in clothing prices.

Coming on the heels of a surprisingly restrained report on July producer prices, the consumer price data should provide some comfort to Federal Reserve officials that inflationary pressures aren't taking a significant hold in the economy, though they remain a risk.

The consumer price index increased by 0.4%, after climbing 0.2 in June, the Labor Department said Wednesday. The core consumer price index, which excludes food and energy items, grew 0.2%, after rising by 0.3% in each of the preceding four months. The median estimate of 22 economists surveyed by Dow Jones Newswires had projected a 0.4% gain in the CPI and 0.3% rise in the core.

Overall consumer prices were 4.1% higher than a year earlier. Core consumer prices grew 2.7% over that period, the highest year-on-year reading since December 2001.

Keene Little : 8/16/2006 8:09:09 AM

Late yesterday I recommended a short play for ES as it approached its downtrend line from the May high through the Aug 4th high, currently at 1291.50. Yesterday's high of 1290.50 got close and if we see a minor push higher early this morning I'd takea shot at a short. Link

ES is currently struggling with the same 1288-1289 area that has acted as resistance this month. If we get a pullback or consolidation underneath this area then we'll be getting a good signal that the market will probably rally above it. But for now it's resistance and is why I'm suggesting trying a short play.

Marc Eckelberry : 8/16/2006 5:55:53 AM

CPI core .3 expected but the whisper is now .2. A little too optomistic? Let's hope not.

Jeff Bailey : 8/16/2006 3:28:44 AM

Index Pivot Matrix for Wednesday at this Link

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