Option Investor
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Jeff Bailey : 9/1/2006 1:14:56 AM

I won't see you again until Sept. 11

I will be out of the office on Friday and won't be back until Sept. 11. I'm off to the high peaks in the Rocky Mountains near Rabbit Ear's Pass on my annual search for the majestic bull elk.

It has been cold in the hills and brings a sense of fall. Chatter is that the bulls are starting to "talk" as they begin rounding up their harem. My trip is complete if I just hear one bugle!

In the peak of the rut, it is the overzealous BULL that can end up on the dinner table.

If you've observed elk during the rut, it is an educational event in animal behavior.

The cows (femal elk) are the smartest of the species, and it is the cow that decides which bull she favors for her offspring.

It is also the herd cow that is most alert, and knows every escape route, which the rest of the herd depends for their safety.

Bulls are on the alert Link

Jeff Bailey : 9/1/2006 12:48:19 AM

Current OPEN MM Profiles that I've made as well as an IWM call awaiting execution Link

My August Stock/Option/Futures Trade Blotter as well as current OPEN MM Profiles Targets/Stops at this Link

Keene Little : 9/1/2006 12:35:30 AM

Friday's pivot tables (new monthly pivots): Link and Link

Jeff Bailey : 9/1/2006 12:19:17 AM

Swing trade bullish call alert place a GTC order to buy two (2) of the iShare Russell 2000 (IWM Jan07 $71 Calls (DIW-AS) should the IWM trade $70.10.

IWM $71.77 with DIW-AS $4.30 x $4.50

Jeff Bailey : 9/1/2006 12:10:04 AM

iShares Russell 2000 (AMEX:IWM) closed $71.77

Jeff Bailey : 9/1/2006 12:01:36 AM

YM06U closed 11,400

YM06Z closed 11,477

Will need the YM06Z close for Q4 roll.

Jeff Bailey : 8/31/2006 11:59:29 PM

Closing Internals found at this Link

OI Technical Staff : 8/31/2006 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The Market Monitor has been archived.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 : 8/31/2006 7:14:11 PM

Closing U.S. Market Watch found at this Link

Jane Fox : 8/31/2006 4:12:53 PM

Another full docket for Economic Reports tomorrow:

8:30a.m. August Non-farm Payrolls. Previous: +113K.

8:30a.m. August Unemployment Rate. Previous. 4.8%.

9:45a.m August University Of Michigan Consumer Sentiment Index. Previous: 84.7.

10:00a.m. August ISM Mfg Index. Previous: 54.7.

10:00a.m. July Construction Spending.Previous: +0.4%.

10:00am July Pending Home Sales.Previous: +0.4%.

Jeff Bailey : 8/31/2006 4:05:04 PM

This isn't all that unusual of action if thinking about the "buy side" shops. Head traders headging some things to the close (not sure how much a buy side shop needs to hedge right now)

Watch for some continued weakness in the morning ....

Then at about 11:00, the head guns leave for a long lunch (3.5 days) and leave things to their assistants with the orders .... "just don't skrew anything up" and a buy side bias begins to take hold to the Friday close.

Jane Fox : 8/31/2006 4:01:01 PM

Markets started a selloff as soon as the cash markets closed.

Jeff Bailey : 8/31/2006 4:00:23 PM

Sell Program Premium ... SPY $130.67 : YM 11,392

Jane Fox : 8/31/2006 3:59:35 PM

VIX spiking, AD line and volume falling.

Jane Fox : 8/31/2006 3:58:52 PM

ER to new daily lows.

Keene Little : 8/31/2006 3:57:21 PM

All of today's (in)action looks like a continuation of the sideways consolidation since the pop higher off the low on Tuesday. Another small pullback should set up another leg higher to at least equal the leg up from Tuesday's low to Wednesday's high. That would give us an upside target, perhaps tomorrow, to about ES 1316.

Jeff Bailey : 8/31/2006 3:56:30 PM

XOM's Option Montage found at this Link ... Will note current Short Interest (as of 08/15/06) is 12-month high.

September/October last year has Sep shorts taking some heat (hurricanes) but eventually winning by mid-October.

NASDAQ Short Interest Table Link

Jeff Bailey : 8/31/2006 3:30:45 PM

YM Long close out alert 11,407

Jeff Bailey : 8/31/2006 3:29:08 PM

YM Long finger on the button alert ... with YM 11,407 ... might fade.

Jeff Bailey : 8/31/2006 3:17:44 PM

03:00 Internals found at this Link

Jeff Bailey : 8/31/2006 3:05:06 PM

YM raise bullish stop alert ... to break even.

YM 11,405 here

Jeff Bailey : 8/31/2006 3:03:50 PM

03:00 Market Watch found at this Link

Jeff Bailey : 8/31/2006 3:01:08 PM

I'll get the XOM option montage up before the close, but I'm not taking much away from it at this point. I want to get some OI screen captures, so if stock does take the dart lower like I think it will, we have an idea what to look for, or be doing. I'm really looking to try and exit some type of volatility spike on a move to $65.00.

Jeff Bailey : 8/31/2006 2:55:43 PM

DIA $113.94 ... afternoon highs and gets above all those $113.91's ... YM 11,405 as we approach the most important hour of the session.

Jeff Bailey : 8/31/2006 2:44:45 PM

There's not much premium at all in the Sep $70 Puts relative to where the stock is trading from that strike, so the DnTickVol would have to be initiated by a long liquidator and close of the option. Could be a premium seller, but I would think that would be offset with the $70 call selling, also $0.35 premium.

Jeff Bailey : 8/31/2006 2:39:08 PM

Now I want to look at a MONTAGE ... see where the Open Interest is at. Is the chain's activity directional? Or perhaps squaring up?

Jeff Bailey : 8/31/2006 2:38:05 PM

XOM's Option Chain sorted by most active at this Link

Jane Fox : 8/31/2006 2:34:02 PM

DAteline CNN - -- The National Hurricane Center says Tropical Storm Ernesto's top sustained winds have increased to near 70 mph and the storm could reach the U.S. East Coast as a hurricane.

Jeff Bailey : 8/31/2006 2:26:46 PM

Cool chart tool from YHOO though ... Link

All kinds of features ... can "compare" stocks against each other

Jeff Bailey : 8/31/2006 2:24:08 PM

Had a question regarding confirmation of put/call on XOM ... working up an option chain, but not sure what I'm supposed to be confirming.

Jeff Bailey : 8/31/2006 2:18:44 PM

Drake's on the phone with the mortgage lender ...

Jeff Bailey : 8/31/2006 2:18:20 PM

10-year yield ($tnx.x) plunges further ... down 3.1 bp at 4.732%.

Jeff Bailey : 8/31/2006 2:15:35 PM

YM on 2-minute interval has 21, 50 and 200-pd SMA's all converging here at 11,395.

A point of equilibrium ....

Jeff Bailey : 8/31/2006 2:13:46 PM

SPY $130.72.

Jeff Bailey : 8/31/2006 2:13:22 PM

There's some volume in the SPY current 5 minutes.

Jane Fox : 8/31/2006 2:06:29 PM

Dateline WSJ - For the first time in the history of treating cancer, gene therapy has apparently succeeded in shrinking and even eradicating large, metastatic tumors.

The therapy worked in only two of 17 patients who were treated. But many researchers are hailing the study, which was published Thursday in the online edition of Science, as groundbreaking because it provides compelling evidence in human patients that gene therapy can be effective against one of the toughest challenges in medicine: terminal cancer.

Moreover, the technique used in this pilot study -- genetically altering immune-system cells so that they target tumors -- could eventually apply to many different kinds of cancers, not just the cancer that afflicted patients in this trial, which was melanoma.

"It's very impressive," said David Baltimore, the Nobel laureate who is himself conducting similar research. Dr. Baltimore noted key caveats: Only a small number of patients responded to the treatment, and the study's lack of a control group means there is no way to be absolutely sure that the treatment was responsible for their improvement. Given the fact that those patients had late-stage melanoma that almost never goes into remission on its own, had failed all conventional treatment, and responded as soon as they were given the experimental treatment means "it's likely" that gene therapy is what worked against their cancer, said Dr. Baltimore. "But likely and proven are two different things," he cautioned.

Marc Eckelberry : 8/31/2006 1:57:41 PM

I am now flat and will not trade the close as I have booked solid gains and do not wish to give it back to the bank. I will see you tomorrow and elaborate on what I think will happen in September.

Jane Fox : 8/31/2006 1:57:31 PM

This week has been fairly poor trading but can you imagine what tomorrow is going to be like? A summer Friday before a long weekend. May be a good day to not show up.

Jane Fox : 8/31/2006 1:55:40 PM



Jeff Bailey : 8/31/2006 1:55:15 PM

Absolutely "no volume" in the YM ... 11,393

Jane Fox : 8/31/2006 1:55:11 PM

(RTTNews) - A UN deadline calling for a halt to Iran's nuclear program passed-off on Thursday without Iran's compliance. Meanwhile, findings in a report by the International Atomic energy that's due to be submitted to the U.N. Security Council later could eventually lay the foundation for sanctions. "Iran has not suspended its enrichment related activities," the IAEA report is quoted as saying and adds that Iran neither addressed the long standing verification issues nor had it been transparent in removing the uncertainties associated with some of its activities.

Marc Eckelberry : 8/31/2006 2:00:32 PM

I find it difficult, if not unproductive to swith gears in a session, unless we hit extremes. If I am in a long term position, I don't care that much, but if I'm daytrading, I prefer to trade my bias for the day. That does not mean I hold a position all day, quite the contrary, today for instance, I covered three shorts and kept re-shorting rallies. One of the key determinations for my bias is the SOX/SMH and VXN. I suggest the beginning trader do the same and keep it simple. Once your bias is proved wrong, then switch, but as a rule, stay with what works. That said, I remind you that trading in a range bound day like today means not holding on to gains for long. Do your entry, exit and take profits, re-enter, exit and take profits, etc..., but always with the bias. You can play it both ways, but I have found over the years that you end up giving most of your gains by switching bias mid-stream when the basis for your bias has not changed. Today, at no time did I see a reason to switch out of my bearish bias.
Of all the things I can teach you for daytrading futures, I think this would be the most important lesson. Beginners lose money because they overtrade and they overtrade because they have not figured out the bias for the day and stuck with it.

Jeff Bailey : 8/31/2006 1:48:50 PM

MMM $71.74 +0.41% ... softening up in last 20-minutes.

Jeff Bailey : 8/31/2006 1:44:45 PM

Deere, Co (DE) $77.70 +3.90% ... only news I see is company declared regular quarterly dividend of $0.39.

Somebody coughed up a fur ball just prior to 01:00 PM EDT.

Marc Eckelberry : 8/31/2006 1:30:30 PM

I could be wrong, especially with crude dropping, but I'd rather be flat now.

Marc Eckelberry : 8/31/2006 1:28:04 PM

Many traders expecting and gambling on a closing bounce as in the past three days, but I don't think it's the right trade today. I have to go, watch NQ 1585 for any sign of a breakout. Breakdown is 1580.

Jeff Bailey : 8/31/2006 1:23:24 PM

YM day trader's 5-minute interval chart at this Link

Jeff Bailey : 8/31/2006 1:18:36 PM

YM long entry alert here at 11,398, stop 11,389, target 11,440.

Jeff Bailey : 8/31/2006 1:16:08 PM

01:00 Internals found at this Link

Marc Eckelberry : 8/31/2006 1:10:26 PM

Tight range but if you drew your fibs you would notice NQ failure at 50% today, 1584.75. Stops on shorts should be no higher than 1585.25 now. Support is 38.2% at 1583.25. My bias remains bearish, unless bulls close a 5 mn candle above 1585.

Jane Fox : 8/31/2006 1:05:16 PM

(RTTNews) - Bernanke: case can be made that strong productivity growth of post-1995 era likely to continue for some time .

Keene Little : 8/31/2006 1:03:51 PM

Bernanke's speech put the market to sleep and it's not waking up. I can't quite figure out if we're going to get another small push lower before rallying or if we'll rally from here. I'm thinking a little lower first. In either case I'd be looking to buy this rather than sell it.

Jeff Bailey : 8/31/2006 1:02:58 PM

01:00 Market Watch found at this Link

Jane Fox : 8/31/2006 12:58:04 PM

TICKS hit +1022 at 12:55EDT.

Jeff Bailey : 8/31/2006 12:57:32 PM

That's right where your earlier "tick fade" came from Jane.

YM 11,403

Jane Fox : 8/31/2006 12:55:37 PM

TICKS +1000 however, CCI has not made it to +200.

Jeff Bailey : 8/31/2006 12:54:34 PM

YM 11,404

Jeff Bailey : 8/31/2006 12:54:18 PM

Dr. Bernanke's speach ends ... discussed productivity in great detail.

Question/answer session about to begin.

Jeff Bailey : 8/31/2006 12:35:29 PM

Fed Chairman Bernanke begins speach

Jeff Bailey : 8/31/2006 12:27:41 PM

Ferocious buying in Treasuries continues with 10-year yield down 1.6 bp at 4.747%

Jeff Bailey : 8/31/2006 12:26:50 PM

Dollar Index (dx00y) 85.17 +0.23% ... goes coast-to-coas in Daily Pivot (S2 now R2) and creeps above WEEKLY Pivot.

All squared with yg06z $631.90 after kiss of its WEEKLY Pivot $632.90.

Jeff Bailey : 8/31/2006 12:22:34 PM

Deere, Co (DE) $76.38 +2.13% ... just off session high of $76.49.

Jeff Bailey : 8/31/2006 12:21:28 PM

Tractor Supply Co. (TSCO) $42.49 -0.54% ... slips to lows of the session.

Jeff Bailey : 8/31/2006 12:15:43 PM

Ciena (CIEN) $4.00 -7.19% ... #2 most active and lower on earnings. Also announces plan for a 1-for-7 reverse stock split.

Market Scan Story Link

Jeff Bailey : 8/31/2006 12:12:47 PM

JDS Uniphase (JDSU) $2.30 -12.54% ... Atop this morning's most actives and brings some weakness to technology/networking after the optical components maker guided Q1 below consensus.

AP Story Link

Jane Fox : 8/31/2006 12:00:52 PM

Although the CCI did not get above +200.

Jane Fox : 8/31/2006 12:00:35 PM

I turned my TICK alerts off yesterday and did not put them back on. I see TICKS hit +1000 11:04EDT. Oh that would have been a nice fade!

Jeff Bailey : 8/31/2006 11:59:51 AM

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

Jeff Bailey : 8/31/2006 11:48:33 AM

Caterpillar (CAT) $65.24 +0.27% Link and its PnF Link

Jane Fox : 8/31/2006 11:48:15 AM

Well I see the VIX "fooled" me and once it does that I put a lot less emphasis on it. The VIX is just too reliable on other days to use it when it does not work.

Jeff Bailey : 8/31/2006 11:46:32 AM

Deere, Co (DE) $76.34 +2.08% Link ... tries to reclaim its rising 200-day SMA ($76.43).

Formidable test for strength when combined with bearish resistance trend Link

Jeff Bailey : 8/31/2006 11:41:21 AM

Goldcorp (GG) daily interval bar chart we've been following/trading at this Link ... just enough reasons to take a gain ahead of vacation.

Marc Eckelberry : 8/31/2006 11:33:27 AM

QQV/VXN and SOX were the warning signs today. Bias remains short below 1585/1587, although we coud have actually seen the range today and trading is now for scalpers. There is still the possibility of an upside breakout, on this low volume anything is possible, but I would not bet on it today.

Jeff Bailey : 8/31/2006 11:33:18 AM

Swing trade put close out alert ... let's take the money and run ... in the Goldcorp GG Oct. $30 Puts (GG-VF) at the bid of $3.20

GG $27.57 -9.51% ...

Jeff Bailey : 8/31/2006 11:25:41 AM

11:00 Internals found at this Link

Jane Fox : 8/31/2006 11:12:16 AM

You may want to keep an eye on this piece of data The Fed chief is scheduled to speak on productivity at lunch time.

Jane Fox : 8/31/2006 11:07:00 AM

AD volume just made a new daily high as well but the AD line has not. Looking a little more bullish now.

Jane Fox : 8/31/2006 11:06:12 AM

Ok so the VIX was helpful when ES made a new daily low so maybe I need to watch it. VIX has just made a new daily low suggesting ES will make a new daily high.

Jeff Bailey : 8/31/2006 11:05:56 AM

11:00 Market Watch found at this Link

Jane Fox : 8/31/2006 11:04:27 AM

The National Hurricane Center has issued a hurricane watch for South Carolina and North Carolina as Tropical Storm Ernesto's winds strengthen to 60 mph.

Jeff Bailey : 8/31/2006 11:02:10 AM

Swing trade put lower stop alert ... on the Goldcorp GG Oct. $30 Puts (GG-VF) to $27.85 in the underlying. Target remains $27.00.

GG $27.55 -9.55% ...

Jeff Bailey : 8/31/2006 10:59:15 AM

GG $27.63 -9.32% ... probes morning low

Marc Eckelberry : 8/31/2006 10:49:52 AM

NQ is a short below 1585.50/1587.50

Jeff Bailey : 8/31/2006 10:47:13 AM

Exxon/Mobil (XOM) $67.89 -0.60% ...

Jeff Bailey : 8/31/2006 10:46:05 AM

EIA Weekly Nat. Gas Storage Table found at this Link

Jane Fox : 8/31/2006 10:37:40 AM

Here is how the markets are trading in relation to their PDRs. Link

Keene Little : 8/31/2006 10:36:33 AM

Looking at the price consolidation since yesterday's high, two equal legs down for ES is at 1303. If the 2nd leg down (the one in progress) goes to 162% of the 1st then we get a 1300 downside target. The uptrend line along the lows since Aug 23rd is currently near 1300 as well. Therefore watch either of these levels for a place to get long.

Jane Fox : 8/31/2006 10:36:07 AM

ES is making new daily lows with out a confirmation from the VIX. Things are so mixed up today though I am not using the VIX nor the TRIN nor the AD line and volume to trade. I am not trading.

Jane Fox : 8/31/2006 10:34:06 AM

AD volume falls to below 0.

Jane Fox : 8/31/2006 10:33:21 AM

EIA - Natural Gas Inventories Up 48 BCF

Marc Eckelberry : 8/31/2006 10:25:19 AM

TRINNQ is bearish and signals declining volume exceeding advancing volume, so the actual ADDEC line is deceptive. Again, watch the SOX. QQV is finding a bid from deeply oversold conditions, which could also lend to some selling, although pre-holiday days are usually bullish. I am still unwilling to commit further to the longside until I see what NDX does at the 20 month MA. It is key.

Jane Fox : 8/31/2006 10:22:03 AM

So far today is shaping up to be another day when the trading mouse should be put aside. This is not an environment that is condusive to making money.

Marc Eckelberry : 8/31/2006 10:21:11 AM

SMH and SOX down. SMH has resistance at 200 ema 34.30 and as long as techs trade below that today, there will be downside pressure. Immediate resistance is NQ 1587.75, gap open July.

Marc Eckelberry : 8/31/2006 10:14:53 AM

NDX double top at 20 month MA (1584.30). As I have stated before, it would be nice for bulls to get a close above. If they don't, it could trigger some selling in early September.

Jane Fox : 8/31/2006 10:07:23 AM

WASHINGTON (MarketWatch) - Demand for U.S.-made factory goods fell 0.6% in July on a large drop in orders for transportation goods, the Commerce Department said Thursday.

Excluding the 10.1% decline in transportation orders, factory orders rose 1.1% in July, the government said.

The 0.6% decline was slightly stronger than the 0.9% drop expected by economists surveyed by MarketWatch. In addition, June's increase was revised higher to 1.5% from 1.2%.

Shipments of factory goods were unchanged in July. Shipments of durable goods fell 1.3%, led by the 6.7% drop in transportation goods.

Factory inventories increased 0.6%, the ninth increase in the past 10 months. The inventory-to-shipments ratio rose to 1.17 from 1.16.

Unfilled orders rose 1.3%, a sign that production lines should be busy in coming months.

Orders for durable goods fell 2.5%, revised from last week's estimated 2.4% decline. Shipments (and therefore orders) for nondurable goods rose 1.6% in July on big increases in petroleum and chemicals, especially pesticides

Jane Fox : 8/31/2006 10:03:29 AM


Jane Fox : 8/31/2006 10:02:10 AM


Jane Fox : 8/31/2006 9:56:22 AM

Remember :
10:00a.m. July Factory Orders. Previous: +1.2%.

10:00a.m. July Conference Board Help-Wanted Index. Previous: 33.

10:00a.m. Aug Chicago Purchasing Managers Index. Previous: 57.9.

Jeff Bailey : 8/31/2006 9:51:37 AM

Goldcorp (GG) alert $27.92 -8.33% ... Announced that they have agreed to merge with Glamis Gold (GLG) $46.70 +20.2%.

Under the terms of the transaction, which is structured as a Plan of Arrangement, Glamis' common shareholders will exchange each Glamis share for 1.69 common shares of Goldcorp, representing a value of US$51.49 per share based upon the closing price of Goldcorp on August 30, 2006. This represents a premium of 32.7% to the closing price of Glamis' shares on the TSX on August 30, 2006 and 34.8% to the 20 day volume weighted average trading price of Glamis' shares on the TSX.

Jane Fox : 8/31/2006 9:48:54 AM

I cannot believe how strong resistance is for ES, YM and NQ. However, if the bulls do break through (and I think they will, eventually) we could see a huge flush upward that may be hard to trade. The other scenario is that the bulls are just not strong enough to overcome the sellers and they have to retreat before they take another run at it.

Jane Fox : 8/31/2006 9:41:48 AM

ER has broke its resistance yesterday but the big caps are still struggling with theirs.

Jane Fox : 8/31/2006 9:37:55 AM

VIX opens in its PDR but TRIN is well above its PDH at 1.60. Bulls beware.

Jane Fox : 8/31/2006 9:37:01 AM

AD line is bullish +649 but AD volume is only slightly above 0.

Jane Fox : 8/31/2006 9:22:54 AM

TORONTO, ONTARIO, Aug 31, 2006 (MARKET WIRE via COMTEX) -- Goldcorp Inc. (TSX: G)(NYSE: GG) and Glamis Gold Ltd. (TSX: GLG)(NYSE: GLG) announced today that they have agreed to combine in a US$21.3 billion transaction to create one of the world's largest gold mining companies. The new company will continue under the name Goldcorp Inc.

Under the terms of the transaction, which is structured as a Plan of Arrangement, Glamis' common shareholders will exchange each Glamis share for 1.69 common shares of Goldcorp, representing a value of US$51.49 per share based upon the closing price of Goldcorp on August 30, 2006. This represents a premium of 32.7% to the closing price of Glamis' shares on the TSX on August 30, 2006 and 34.8% to the 20 day volume weighted average trading price of Glamis' shares on the TSX.

Jane Fox : 8/31/2006 9:21:57 AM

The five most actively traded over-the-counter stocks on NYSE-Arca this morning are: CIEN, JDSU, CYTR, RMBS, ASML

The five most active listed stocks are: AD, GG, LU, GLD, GLG

Jane Fox : 8/31/2006 9:17:31 AM

Here is the daily chart of Gold and as you can see it has not regained the 50EMA, which has been resistance since August 14th. Link

Jane Fox : 8/31/2006 9:14:44 AM

Here is why MACD is so important. I will use the ER chart for an example but this same scenario played out on all markets. Link

Jane Fox : 8/31/2006 9:10:06 AM

On all these markets keep a real close eye on the MACD and be on the lookout for divergences. They will show up first on the 240 minute and eventually seep into the dailies.

Jane Fox : 8/31/2006 9:08:17 AM

And the first market to break resistance, ER. Link

Jane Fox : 8/31/2006 9:06:20 AM

NQ Link

Jane Fox : 8/31/2006 9:05:16 AM

YM Link

Jane Fox : 8/31/2006 9:04:24 AM

I am going to show the 240 minutes charts of the four major markets we follow instead of the daily. These give you a little bit better perspective of the bullish triangles I have been monitoring. Here is ES. Link

Jane Fox : 8/31/2006 9:02:03 AM

With all the news about hurricanes it is very surprising to me that Natural Gas broke its PDL. The daily charts are bearish but I thought the weather would put a bid under this market but obviously it has not.

Gold certainly got a bid overnight. I will check later to see if it has regained its 50EMA on the daily chart.

Oil had a nice bounce yesterday and did break its PDH overnight but it has retreated and is breaking its overnight low as I type.

TBonds tagged its PDH overnight but was mostly neutral (using the December contract now) during the overnight session. Link

Jane Fox : 8/31/2006 8:54:02 AM

Markets liked the income/spending data out at 8:30. Notice that ER and NQ are playing a game of catch up and are the two markets that have broken their PDHs. This last few weeks ES has been leading the market with YM close behind. ER gained a little yesterday by breaking its resistance and since NQ doesn't want to be left behind it is making a gallant attempt at breaking resistance as well. Link

Jane Fox : 8/31/2006 8:47:44 AM

WASHINGTON (MarketWatch) - Core consumer inflation moderated in July while inflation-adjusted consumer spending expanded at the fastest pace in 2006, the Commerce Department reported Thursday.

Core consumer prices, as measured by the personal consumption expenditure price index excluding food and energy, rose 0.1% in July, the smallest gain since December. Economists were expecting a 0.2% gain.

In the past year, core prices are up 2.4%, matching the biggest gain in 11 years and well above the Federal Reserve's implied comfort zone of 1% to 2% for core inflation.

Nominal consumer spending rose 0.8% in July, the biggest gain since January and just ahead of the 0.7% expected on Wall Street. After adjusting for inflation, real spending rose 0.5%, the biggest gain since December.

Spending was boosted by a 1.6% increase in durable goods purchases, as auto sales surged once again on renewed dealer incentives to buyers. Real spending on nondurable goods and services rose 0.4%.

Personal incomes increased 0.5%, as expected. Incomes after taxes and after inflation rose 0.3%. Incomes from wages and salaries increased 0.6%.

Jane Fox : 8/31/2006 8:46:31 AM

WASHINGTON (MarketWatch) -- The four-week moving average of continuing jobless claims rose to its highest level since the end of February during the week ending Aug. 19, the Labor Department said Thursday, even as weekly jobless claims dropped.

The four-week average of continuing claims came in at 2.48 million, an increase of 13,500 from the previous week's revised average of 2.47 million, the Labor Department said.

With more people out of work and continuing to collect unemployment benefits, the Federal Reserve may feel less pressure to increase interest rates to slow the economy. Meanwhile, initial claims for state unemployment benefits fell by 2,000 to 316,000.

Claims for the week ending Aug. 19 were revised upward, to 318,000 from a previously estimated 313,000

Keene Little : 8/31/2006 8:42:09 AM

Looking at the same ascending wedge for YM that I've shown a couple times this week we see the possibility still for a push higher. The move up from Tuesday's low followed by the sideways consolidation makes it look like another leg up is coming. Internal Fib projections point to the 11445-11451 as a likely target for a high before a deeper pullback or the start of the next bear leg down. Note the negative divergences against recent highs--supportive of the bearish interpretation of the ascending wedge here. Link

Jane Fox : 8/31/2006 8:36:25 AM

Dateline WSJ - It was a mixed bag in August for retailers carrying back-to-school merchandise. While new fashion trends and consumer electronics gave chain retailers hope for a strong back-to-school season, the reality of dwindling consumer confidence and high gas prices damped some sellers' upbeat expectations.

According to Thomson Financial, of the 34 retailers that have reported same-store results so far, 17 beat estimates, while 17 missed. Same-store sales are sales at stores open at least a year and are considered a key measure of a retailer's health.

Teens flocked to a few highflying chains for early fall fashions, but many mall-based stores continued to struggle with sluggish traffic and markdowns. Wal-Mart Stores Inc. said its U.S. same-store sales for August rose 2.7% -- at the high end of its earlier forecast for a 1% to 3% increase, but some analysts cite early and aggressive promotions. Rival Target Corp. reported a 2.8% rise in same-store sales.

"Fashion changes this season will benefit with those stores with the right merchandise," said Pacific Growth Equities retail analyst Christine Chen, who expects specialty teen retailers that stock skinny-leg denim jeans, longer tops, dresses and leggings to do particularly well.

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