Option Investor
Printer friendly version
Tab Gilles : 8/28/2006 10:45:28 PM

I'd mentioned using the QLD from Proshares several times on MM , and as far back as 7/28/06 5:00PM post. Reason- I use UOPIX is that it enables me to annotate charts over a longer period of time, since it has a longer data period to refer to. The Proshares have only been around a few months, but yes they are best for intraday trading. The Rydex fund trades twice daily with a mid-day and closing NAV. One can even use QQQQ options or even LEAPS. Bottom line and my point is- presenting charts indicating entry and exiting levels.

Keene Little : 8/28/2006 10:39:01 PM

I had mentioned just before the end of the day on Monday that it looks like a big negative divergence setting up on ES's 120-min chart as it tested the August 18 high of 1307.75, and closed the gap. And as this YM 120-min chart shows, an ascending wedge with negative divergences doesn't bode well for the bulls. We've seen them overcome these setups before and keep the market heading higher but I'm not sure I'd want to bet my money that way from here. Link

Keene Little : 8/28/2006 10:27:13 PM

I don't play with the various ETFs (Exchange Traded Funds) out there so I'm not that familiar with all that's available. However, for those of you who like ETFs and would like to play the market on the short side there are some new toys you can play with. Thanks to Al for forwarding this to me:

I am not sure if anyone has mentioned in the Monitor but there is a new series of ETF's that were launched about a month ago that allow you to short select indexes using an ETF instead of a mutual fund like Rydex. They are leveraged just like the Rydex Dynamic Funds. The link is www.proshares.com. Solves the problem of not being able to get in or out during the day.

Tab Gilles : 8/28/2006 10:31:24 PM

Profund UlrtaOTC (UOPIX) $21.08 +$0.32 (1.54%)

As per entry level 6/27 $20.27, up +4% thus far.

Here's a chart using several market breadth indicators and buy and sell points. Link

Keene Little : 8/28/2006 10:11:08 PM

Tuesday's pivot tables: Link and Link

OI Technical Staff : 8/28/2006 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The Market Monitor has been archived.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 : 8/28/2006 4:47:30 PM

Closing Internals found at this Link

Jane Fox : 8/28/2006 4:42:32 PM

Economic Reports on the docket for tomorrow include.

10:00a.m. Aug Conference Board Consumer Confidence. Previous: 106.5.

Jeff Bailey : 8/28/2006 4:22:42 PM

Closing U.S. Market Watch found at this Link

Marc Eckelberry : 8/28/2006 4:14:04 PM

Welcome to summer trading. It can hurt.

Jeff Bailey : 8/28/2006 4:09:08 PM


DJ- Bank's Midwest manufacturing activity climbs for a second-straight month despite a drop in auto production. Regional output climbs 6.1% in July from a year earlier.

Jane Fox : 8/28/2006 4:02:19 PM

Dateline CNN - DNA found on JonBenet Ramsey's body does not match sample DNA from suspect John Mark Karr, Denver, Colorado's KUSA television station reports.

Marc Eckelberry : 8/28/2006 4:00:40 PM

That was pretty clear, wasn't it? Exact bounce off 1570.75, gap open last week. Use those fibs I posted as trading in the gap is ALL about fibs.

Marc Eckelberry : 8/28/2006 3:58:41 PM

Here are the fibs in the NQ gap from last week, stops on longs should be no lower than 1568: Link

Marc Eckelberry : 8/28/2006 3:58:38 PM

Last week's gap open at NQ 1570.75 is support. Gap close is at 1585, not done yet (unlike ES). I was worried about that VIX and sure enough, we could not break out above 1580.75, weekly R1. Let's see what happens from here, support is pretty clear. The easier trade was to stay short commodities. Nice and clean.

Jeff Bailey : 8/28/2006 3:51:44 PM

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

We were stopped out of buth the DE Put and QQQQ short.

Went long approx. 1/3 bullish, or two (2) of the AMAT Jan $15 Calls

Keene Little : 8/28/2006 3:41:51 PM

At least the gap for ES from the gap down on Monday the 21st has now been closed by tagging that high on the 18th.

Keene Little : 8/28/2006 3:39:50 PM

With the 120-min chart showing a clear negative divergence against the high on Aug 18th I'd say we have a failed retest of that high. It may not pull back much today but I wouldn't want to be long from here.

Jeff Bailey : 8/28/2006 3:20:13 PM

Bullish swing trade call option alert ... let's take two (2) of the Applied Materials AMAT Jan $15 Calls (ANQ-AC) at the offer of $2.20.

AMAT $16.34 +1.30% ...

Jeff Bailey : 8/28/2006 3:15:01 PM

Intel (INTC) $19.37 +2.48% ... challenges its July 3 relatitve high!

Jeff Bailey : 8/28/2006 3:13:54 PM

03:00 Internals found at this Link

Jeff Bailey : 8/28/2006 3:03:30 PM

03:00 Market Watch found at this Link

Jane Fox : 8/28/2006 2:56:16 PM



Jeff Bailey : 8/28/2006 2:55:56 PM

iShares Russell 2000 (IWN) $72.17 +1.07% ... Daily interval bar chart at this Link

Jane Fox : 8/28/2006 2:54:26 PM


OCT. CRUDE FALLS $1.90, OR 2.6%, TO END AT $70.61/BRL

Jane Fox : 8/28/2006 2:52:50 PM

Markets have build some nice little bull flags here. Link

Jeff Bailey : 8/28/2006 2:35:55 PM

Looking at the iShares Russell 2000 Value (IWN) $72.11 +0.99% option chain and see 2,533 put options traded on DnTick at $0.15 on the Sep $67 Puts (IWN-UO).

Looking at some 07Calls for a "pull back" entry (sometimes they don't come), but noting the rather bullish selling of puts.

Jane Fox : 8/28/2006 2:21:11 PM

Marc most surely those "guesses" are ball park.

Marc Eckelberry : 8/28/2006 2:16:07 PM

My concern is the VIX and VXN, which are at the lower end of the envelopes I use (10% of 10 day ema). This is getting a little scary, so I might take some off the table before the close.

Marc Eckelberry : 8/28/2006 2:14:41 PM

Close enough to 50% 2006 at NQ 1620, Jane.

Jeff Bailey : 8/28/2006 2:14:29 PM

EIA: U.S. June Crude Imports 2nd Highest; -0.07% Vs. Year Ago

DJ- U.S. crude oil imports in June averaged 10.681 million barrels a day - the second-highest-ever - and were down 0.7% from the record 10.753 million barrels a day set a year earlier, revised government data show.

Earlier this month, preliminary data, also published by Energy Information Administration, showed crude imports set a record in June, at 10.779 million barrels a day.

The revised figures show Canada was the top crude oil supplier for the fourth consecutive month, but shipped lower volumes than in May.

U.S. crude imports from Canada averaged 1.799 million barrels a day, down from 1.868 million barrels a day in May. Canada's 16.8% share of U.S. crude imports was down from 18.2% in May, but was up from 15.9% a year ago.

Jane Fox : 8/28/2006 2:11:04 PM

I believe the bulls have proven to us that they have taken the ball and are running with it. The next logical question is how far can they go. Well of course no one knows for sure but a good guess is the 127.20% fib level of the rally from July lows. Those numbers are as follows:

YM - 11600
ES - 1328
ER - 727
NQ - 1628

Marc Eckelberry : 8/28/2006 2:04:44 PM

Got the same idea, Jeff, just read your post.

Marc Eckelberry : 8/28/2006 2:01:48 PM

This is a very bullish day now as the pullback was minor and stayed within R1 support. We are entering the disbelief stage and more short covering. We could see new highs for August today if we get NQ above 1580.75.

Jeff Bailey : 8/28/2006 2:01:13 PM

SPY alert $130.70 +0.68% ... edges above its 80.9% retracement of 05/09 to 06/13 relative high/low closes.

This could bring in some further intermediate-term short covering, momentum bull buying.

Marc Eckelberry : 8/28/2006 1:57:19 PM

The jump above 1576 is bullish. R is 1580.75, then 1583 then 1587. Support is 1576, 1573.50.

Jane Fox : 8/28/2006 1:55:53 PM

TICKS hit +1000 but I would not be fading this market today.

Jane Fox : 8/28/2006 1:53:29 PM

Here is ES's 240 minute bull flag I showed on Friday. Link

Keene Little : 8/28/2006 1:49:38 PM

We're either at the beginning stages of a waterfall rollover or else this is correctively pulling back and we're going to see another move higher. At this point it's looking like it's consolidating underneath the 1307.75 resistance which says we should see another move higher.

Jeff Bailey : 8/28/2006 1:48:30 PM

Now that I've got some intra-day charts, only NDX/QQQQ and RUT.X only majors not yet trading their respective WEEKLY R1.

SMH $33.09 +0.97% did violate its WEEKLY R1 by 6 cents, and hints NDX/QQQQ still some room today.

Marc Eckelberry : 8/28/2006 1:32:13 PM

This rally is about oil falling, so watch QM. My target is 68/69, but we could get some choppiness, especially until we know what happens after Cuba and Ernesto gets back on water. Right now we have a small bid, so NQ is stalling.

Jane Fox : 8/28/2006 1:30:44 PM

TRIN has fallen to below its PDL also supporting the bullish view.

Jane Fox : 8/28/2006 1:30:06 PM

These support my bullishness. Link

Jane Fox : 8/28/2006 1:29:10 PM

I see the markets are indeed consolidating at daily highs suggesting they will make another move higher later in the day.

Marc Eckelberry : 8/28/2006 1:23:51 PM

QQV and VXN are dangerously oversold. Bear flags forming on 5 mn NQ. This can press on higher, but be careful if we can't get back above NQ 1576 soon.

Jeff Bailey : 8/28/2006 1:18:08 PM

01:00 Internals found at this Link

Jane Fox : 8/28/2006 1:13:48 PM

VIX and ES are in sync today. Link

Jeff Bailey : 8/28/2006 1:02:08 PM

01:00 Market Watch found at this Link

Keene Little : 8/28/2006 12:44:53 PM

Another press higher inside today's ascending wedge, perhaps with a small over-throw up to the 1307.75 high, could do it for this pattern (5-wave move up from this morning's low). The negative divergences are a warning to the bulls here. Link

Keene Little : 8/28/2006 12:37:36 PM

ES 1306 was tagged but it wasn't exactly showing strength there. I can't say I like the upside from here but the bears need to prove themselves here. The high at 1307.75 hasn't been tagged yet and with the negative divergences appearing I'm not sure it will. I'd still be testing the short side with tight stops since I think one of them is going to stick.

Jeff Bailey : 8/28/2006 12:06:50 PM

I'm having some computer memory problems and trying to free up some computer memory.

Keene Little : 8/28/2006 11:54:35 AM

If another stab higher here leaves a negative divergence on the short term charts, it'll be a signal to get short. Otherwise it may just keep going. ES 1306 is still the right place for a stop. The high on the 18th (1307.75) would be the next logical resistance level for the bulls to break.

Jane Fox : 8/28/2006 11:48:52 AM

I have an appointment so will be gone for a few hours.

Jeff Bailey : 8/28/2006 11:19:01 AM

11:00 Internals found at this Link

Friday's Internals found at this Link

Jeff Bailey : 8/28/2006 11:06:33 AM

Swing trade put stop alert ... with Deere, Co (DE) $75.56 +2.26% ... DEVO $2.70 x $2.85.

Marc Eckelberry : 8/28/2006 11:05:45 AM

I am concerned about the green VXN, but SOX is green and AD lines are clean. The gold short is really gaining traction, target is still 604. Oil could flip once Ernesto hits water again, so I would be a little cautious here and book some profits, although we might not be done with this bounce. I had basically called for a rally all the way into Labor day, and it is on track. But keep in mind that we have CC and ISM coming this week. INTC is rocking but has R at 19.35.

Jeff Bailey : 8/28/2006 11:02:32 AM

11:00 Market Watch found at this Link

Jane Fox : 8/28/2006 10:59:31 AM

I don't expect too much more of a move today. Remember this is still summer and although we have had a great daytrading summer it doesn't mean it will last.

However, the onus is on the bulls now to prove they are worthy and "should" keep price hugging daily highs.

Jane Fox : 8/28/2006 10:42:51 AM

Jeff, thank you for the reminder for I was planning on posting a chart of QN the natural Gas emini.

Remember I have talked ad naseum about the swing high at 7.44. Now notice the last swing high at 7.717 which tells me we have some serious resistance in this zone. Now notice the support at ~6.40 - 6.60 and the bearish triangle this market is building. I would not be long this market.

With that said I need to add that I put a little less emphasis on the market's technicals because it is so influenced by the weather. Link

Keene Little : 8/28/2006 10:42:35 AM

I still don't like the bullish side from here. The past few days looks too much like a bear flag and the current leg up should be the last one. Two equal legs up this morning is at 1303.75. The top of the flag is at 1305. I think another attempt at a short play is in order. Short it at any time with a stop at 1306. Link

Jeff Bailey : 8/28/2006 10:38:13 AM

Not seeing any, or much sign of long liquidators.

Last week I noted The StockTrader's Almanac note that the end of August murderous 6 of last 9 years, average loss last 5 days: Dow -2.9%, S&P -2.7%, NASDAQ -2.4%

WEEKLY R1s all look in play to Tuesday at this point.

Wednesday has historicaly been the most bearish day.

Jane Fox : 8/28/2006 10:37:29 AM

AD line at +1148 tells me the bulls have a firm grip of the reins.

Jeff Bailey : 8/28/2006 10:34:14 AM

October Nat. Gas (ng06v) $6.67 -9.17% ... has probed Monday's lows. WEEKLY S1 ($6.56) with WEEKLY Pivot ($6.91).

Floor session low/high has been $6.60/$6.70.

Jeff Bailey : 8/28/2006 10:29:15 AM

Bearish swing trade short stop alert ... for the QQQQ $38.55

Jane Fox : 8/28/2006 10:29:00 AM

So does ER. NQ is the laggert today.

Jane Fox : 8/28/2006 10:28:26 AM

ES and YM both break their PDHs.

Jane Fox : 8/28/2006 10:27:31 AM

But looking at the daily chart Gold bugs, although worried, should not start to panic yet. Link

Jane Fox : 8/28/2006 10:26:17 AM

Gold is really losing it and is now down to 625.30

Jeff Bailey : 8/28/2006 10:26:05 AM

Deere, Co (DE) $75.11 +1.65% Link ... Today's trade at $75.00 gets stock back on a PnF "buy signal" and negates its prior bearish vertical count to $59.00.

Stock has also moved above WEEKLY R1 ($74.43) with WEEKLY R2 ($75.58) just ahead.

Not looking promising for my bear target of $65. Stop currently $75.56 could be adjusted $0.20 above WEEKLY R2, but that would be it.

Keene Little : 8/28/2006 10:24:15 AM

Stopped out of the short. Looks like the bulls might pull a rabbit out of the hat this morning. The other possibility is that this is the last leg up in the consolidation which is often a fast thrust and a head fake. A reversal that takes ES back below 1295 is needed now in order for the bears to have their turn.

Jeff Bailey : 8/28/2006 10:19:40 AM

YM 5-minute interval chart at this Link

Keene Little : 8/28/2006 10:16:37 AM

Still a good short here, stop at 1301. Nice tight trade.

Jeff Bailey : 8/28/2006 10:15:56 AM

VXN Weekly Pivot Levels 17.54 +3.29% ... 14.37, 15.67, Piv= 18.20, 19.50, 22.03

DAILY Pivot = 17.88

Jeff Bailey : 8/28/2006 10:12:59 AM

Volatility and major stock index divergence abound again today.

VIX 12.59 +2.27% with SPX 1,297.03 +0.16%

VXN 17.53 +3.23% with QQQQ $38.42 +0.26%

Jeff Bailey : 8/28/2006 10:08:46 AM


DJ- Western Refining will pay $83 a share in cash for Giant Industries, a nearly 16% premium to Friday's closing price. Western Refining will assume $275 million of Giant's debt.

Jane Fox : 8/28/2006 10:07:54 AM

Both Oil and Gold are breaking their respective overnight lows. Oil has made a low of 70.675 and Gold 628

Jeff Bailey : 8/28/2006 10:07:20 AM


DJ- Energy company agrees to be bought by a group of investors for $107.50 a share, a 27% premium to the closing price on May 26, the day before investor group made its $100 a share proposal to take the company private. Buyers include CEO Richard Kinder, Goldman Sachs, AIG and the Carlyle Group. Deal also includes the assumption of around $7 billion of debt.

Jane Fox : 8/28/2006 10:06:05 AM

AD line is a bullish +700 and AD volume is climbing.

Jane Fox : 8/28/2006 10:05:47 AM

Vix making new daily lows is supporting ES's new daily highs.

Jeff Bailey : 8/28/2006 10:03:34 AM

10:00 Market Watch found at this Link

Keene Little : 8/28/2006 9:53:22 AM

This could be the retest of the trend lines. I'd look to short it with a stop at 1301.

Jeff Bailey : 8/28/2006 9:48:54 AM

Conoco To Remobilize Gulf Workers Tuesday if Storm Stays East

Jeff Bailey : 8/28/2006 9:47:32 AM

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

Keene Little : 8/28/2006 9:41:46 AM

That spike up at the open is often a trap. It's usually big money pushing the market in one direction to get some liquidity so that they have some volume to do the opposite, in this case sell into it. It's usually a signal for the direction you want to take for the morning so in this case to the downside.

Jeff Bailey : 8/28/2006 9:39:26 AM

Energy futures notably lower as Tropical Storm Ernesto tracks towards Florida and looks as if it will miss Gulf of Mexico platforms.

NHC's 5-day Cone Link

Jane Fox : 8/28/2006 9:38:50 AM

TRIN has hit a high of 1.38 so far today. This is bearish.

Jane Fox : 8/28/2006 9:36:49 AM

TICKS hit +800.

Jane Fox : 8/28/2006 9:36:05 AM

HMMM VIX opens well above its PDR and TRIN is testing its PDH - these are bearish.

Jane Fox : 8/28/2006 9:35:11 AM

AD line is a neutral +191 and AD volume is basically 0 so no one has the ball this morning.

Jane Fox : 8/28/2006 9:32:48 AM

NQ's line in the sand is very clear and a CLOSE under this support would be bearish. Link

Jane Fox : 8/28/2006 9:12:21 AM

ER remains less bullish than ES and YM because it is below all the major MAs plus the August 17/18th swing high was a lower high whereas ES and YM's August 18th high was a higher high. But notice the MACD and RSI made higher highs on August 18th. Link

Jane Fox : 8/28/2006 9:07:38 AM

As you can see YM is almost to the bottom of its upward channel but even if it does break I think where the 50EMA and the 100EMAs meet is the line in the sand with this market. Link

Keene Little : 8/28/2006 9:07:20 AM

For the potentially bullish scenario I don't like the fact that ES dropped below Friday's low of 1295.50 in overnight trading. A retest of that low will negate the bullish setup and put us into the downside pattern I showed below (11:52 PM). Since ES closed on the uptrend line on Friday at 1297.75 any break below that level is a break of the uptrend line. A break below 1295.50 would confirm it.

At this point it's looking like ES will open with a break below that trend line. A retest of the line, or the downtrend line from Aug 18th (1299.75), could be a good spot to try a short play.

Jane Fox : 8/28/2006 9:03:04 AM

ES has not done much since I posted this chart on Friday morning so I still think the bulls have the ball and could retrace all the way back to 1280 (the bottom of the upward channel and the 50EMA) and still remain bullish. If I see a close below this level all bullish bets are off but for now I think the August 18th swing high at 1308 will at least be challenged. Link

Jane Fox : 8/28/2006 8:57:29 AM

Dateline WSJ - Houston-based energy, transportation and storage company Kinder Morgan Inc. (KMI) said Monday it has agreed to be bought by a group of investors, including its chief executive, for $15 billion, plus the assumption of around $7 billion of debt.

Under the terms of the agreement, Kinder Morgan shareholders will receive $107.50 cash for each of their shares.

The deal represents a 27% premium to the closing price of $84.41 on May 26, the day before the investor group made its proposal to take the company private, Kinder Morgan said. Shares in the company closed Friday at $101.70.

Jane Fox : 8/28/2006 8:52:36 AM

TBonds were bearish overnight which is bullish for yields and does not help the equity markets move higher.

Natural Gas broke its PDL on the news that Ernesto has been downgraded to a Tropical Storm but found support at 6.67.

Oil also broke its PDL with an overnight low of $71.00/bl

Gold was neutral during its overnight session. Link

Jane Fox : 8/28/2006 8:47:35 AM

Good morning all. Equity markets mostly stayed within their PDRs overnight with ES the only one tagging its PDL. ER seems to be the strongest market making a new overnight high at 8:50 Link

Tab Gilles : 8/28/2006 8:35:11 AM

Intel (INTC) Pre-Market (RT-ECN): 19.15 0.25 (1.32%) Link Link

Market Monitor Archives