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Marc Eckelberry : 9/21/2006 1:49:42 AM

Not much progress either way and traders need to par down risk. Short equities and long oil is almost the same trade, so pick one, but don't do both in the overnight session.

Jeff Bailey : 9/21/2006 1:27:44 AM

09/13/06 to 09/20/06 Sector Bell Curve found at this Link

Marc Eckelberry : 9/21/2006 1:24:07 AM

Just can't get a bid going on oilpast 61 to PP at 61.25. I suggest booking partial profits, although I still think we wil getthat hit above but I have a feeling many traders will go shrt and try to have the Nov contract test 60 as well. I am not falling in love with is trade right now.

Jeff Bailey : 9/21/2006 12:53:15 AM

52-week High/Low by sector at this Link

Table from 09/13/06 Link

Jeff Bailey : 9/21/2006 12:21:39 AM

Oh my! Link

About time for some "pie?" Link (see 07/11/06 MM) the day before that gap up to the 50-day SMA and following decline to the double bottom near $25.00.

Jeff Bailey : 9/21/2006 12:01:00 AM

FOMC's June 29 statement after 25bp hike to 5.25% Link

Housing and energy.

Jeff Bailey : 9/20/2006 11:55:01 PM

Wait! That's actually 2 pieces of "good news" on the inflation front here in Colorado.

Denver housing prices since 06/28/06 (according to CME housing futures) have fallen 4.9%!

Jeff Bailey : 9/20/2006 11:49:58 PM

Some "good news" for a change on the inflation front here in Colorado ... Link

Jeff Bailey : 9/20/2006 11:36:18 PM

CME Housing Futures ... screen capture taken intra-day today.

For May07 Link

For Aug07 Link

This is where the May07 contract(s) were trading on ...

07/12/06 Link

and on 06/28/06 Link

Jeff Bailey : 9/20/2006 11:12:17 PM

SPX Option Chain sorted by today's most active Link

Question is ... WHY would the market be buying, or selling those particular options.

Third quarter comes to an end in 7 days.

I noted earlier that December Fed Funds currently tabulated a 100% probability of no FOMC action to that expiration.

FOMC paused again this meeting.

What was one of the Fed's concernes regarding inflation several months ago? Yes! Housing prices.

What have the CME Housing futures been "saying" in recent months?

Jeff Bailey : 9/20/2006 10:30:55 PM

SPX Option Chain sorted by Open Interest (OI is 09/19/06 Close) at this Link

Keene Little : 9/20/2006 10:23:25 PM

Thursday's pivot tables: Link and Link

Tab Gilles : 9/20/2006 10:12:31 PM

Unleaded Gasoline ($GASO)/ Valero (VLO) With Unleaded Gasoline falling to support @ 1.45, it appears that perhaps VLO will find support at $47/$48?

Two charts depending how you want to view VLO/$GASO. Link Link Link

Jeff Bailey : 9/20/2006 10:12:54 PM

"Crazy Train!" Link and Link

Marc Eckelberry : 9/20/2006 10:09:25 PM

It would not be surpised one bit to see the rally go on until EOM.

Jeff Bailey : 9/20/2006 10:09:14 PM

Oh my #2! What September's MONTHLY R2?

Jeff Bailey : 9/20/2006 10:06:54 PM

Laughing to myself ... we're acting like a bunch of investors, not traders, when discussing P/E ratios aren't we Marc?

Some of the BIGGEST declines and BIGGEST gains I've ever seen is when a stock looks cheap because its P/E is low, or P/E seems unreasonably high.

I've seen stocks with "low multiples" get crushed as eventually the past earnings declined, and even as the stock declined, its multiple ROSE as earnings/share were falling faster than the stock's price.

Then I've see stocks with "unreasonable high" multiples see their PRICES RISE and their multiples DECLINE as the earnings accelerate at rapid pace.

The reason I put much greater weight in technical analysis than fundamental, was I eventually came to the conclusion that the MARKET is forward looking. Earnings reports, and stated earnings are backward looking.

OI Technical Staff : 9/20/2006 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 : 9/20/2006 9:59:07 PM

Laughing to myself ... we're acting like a bunch of investors, not traders, when discussing P/E ratios aren't we Marc?

Marc Eckelberry : 9/20/2006 9:57:11 PM

I should have bought support, Jeff, but I am more comfortable shorting rallies these days.

Marc Eckelberry : 9/20/2006 9:55:54 PM

Core CPI was well below 2 in the 90's (1.7/1.8). It is now at 2.3%. If the Feds thought there was going to be an economic boom like you predict (p/e above 17 is that), then they would be raising rates at least .50. You can't have a core CPI at 2.3% and big growth prospects and leave rates unchanged. It is just not possible. Therefore, the Feds are expecting a very serious slowdown, enough to offset a 2.3% read.
I would buy selective stocks that will do well in specific areas, like Vista upgrade and so forth, and be very careful elsewhere, should the consumer not spend at Christms if housing takes a dive.

Jeff Bailey : 9/20/2006 9:49:40 PM

Marc! Nice cover, or downside target on that ES trade yesterday. Amazing call.

Jeff Bailey : 9/20/2006 9:48:26 PM

SPX with newly added "bull fit 38.2%" at this Link just in case the financials/brokers/banks continue to lead this advance, similar to that found last fall.

Marc Eckelberry : 9/20/2006 9:47:18 PM

Mean pe ratios for the entire market over 50 years. Link
Of course, we might not get an economic slowdown and we could have a booming economy with trillions in consumer debt. Then I guess Feds should be raising rates?

Tab Gilles : 9/20/2006 9:40:32 PM

$GSO/Citrix Systems (CTXS) Link

Jeff Bailey : 9/20/2006 9:36:07 PM

Oh my!

Jeff Bailey : 9/20/2006 9:33:11 PM

If SPX were to trade 1,405 and at recent Standard & Poors 78.28 earnings per index share, the SPX would trade 17.95-times earnings.

Jeff Bailey : 9/20/2006 9:28:24 PM

Correction to 6:29:40 Post ... last sentence should read ... SPX closed 1,325 tonight and "valuation" has stretched to a don't chase it of 16.93 times earnings!

(1,325 / 78.28 = 16.926)

Jeff Bailey : 9/20/2006 9:01:55 PM

Good gravy! MONTHLY Interval chart of the SPX had that month's low of 884.54 and high of 957.73. May's close was 885.15 and July's close was 954.29. (Up 7.8%)

SPX action for August was H/L of 964.17/893.34. (Down 7.3%)

Jeff Bailey : 9/20/2006 8:56:30 PM

Forex Currency screen capture just taken Link

Yesterday's capture at this Link

Jeff Bailey : 9/20/2006 8:56:25 PM

Thailand's Set ($SETI) Link ... I think it is slated to open "today," or Thursday.

Reuters SETI Link

Marc Eckelberry : 9/20/2006 8:35:50 PM

YG gap was almost closed. It's a scalp buy here on a QM rally at 581, stop 579.

Jeff Bailey : 9/20/2006 8:56:14 PM

Here's something I was looking for via yesterday's comments from CNBC's Rick Santelli. It was July 1997 and I think they called it "The Asian Contagion"

Market Watch Link

Marc Eckelberry : 9/20/2006 8:27:41 PM

I smell a down day tomorrow if QM rallies.

Marc Eckelberry : 9/20/2006 8:24:13 PM

Good read, see link for Author: ...So historically, when short-term interest rates rise, we've consistently seen fund managers shift more and more client assets into cash and other liquid instruments.
Until now.
Over the past couple of years, short rates have jumped significantly higher as noted above. But the amount of cash that fund managers are holding (as a percent of total assets) has actually decreased from 4.4% to 4.1%. This is abnormal behavior, and it has reached an extreme. The chart below shows mutual fund cash levels, after adjusting for the prevailing level of short-term interest rates. The most recent data suggests that funds are holding about 3% less cash than they "should" be given where interest rates are, a deficit that has been matched in extreme only by January 1981 and February 2000 over the past 56 years. On the chart, I've marked other times when cash reserves became ominously low. Link

Jeff Bailey : 9/20/2006 8:19:40 PM

REGULATORS WATCHING EXOTIC MORTGAGES

Federal bank regulators tell a Senate panel they are monitoring the impact nontraditional mortgages could have on borrowers and lenders as interest rates increase. GAO report says regulators should consider expanding oversight for such loans.

Jeff Bailey : 9/20/2006 8:18:44 PM

BP PLANS $3B REFINING PROJECT

Oil giant plans to reconfigure its oil refinery in Whiting, Indiana for more processing capacity of Canadian crude. Investment could increase production of gasoline and diesel fuel at biggest Midwest refinery by 15%.

See today's MM Post at 11:36:52

Jeff Bailey : 9/20/2006 8:16:44 PM

Toyota Motor ADS (NYSE:TM) $107.29 +0.87% Link

Jeff Bailey : 9/20/2006 8:14:56 PM

Nikkei-225 pulse Reuters Story Link

Jeff Bailey : 9/20/2006 8:04:09 PM

Japan

August Exports +17.7% on Year

August Imports +16.1% on Year

August Trade Surplus Y626.8B; +29.0% Y/Y

August Asia Trade Surplus Y521.6B; +28.5% Y/Y

August China Trade Deficit Y261.8B; -9.1% Y/Y

Marc Eckelberry : 9/20/2006 7:55:37 PM

As for YG, since I was asked, I have a buy order at 569 in case 577 does not hold. But I will be scalping some contracts above 577 and see if they stick. If 568 does not hold, next support is 560 followed by 539.

Jeff Bailey : 9/20/2006 7:47:37 PM

I think I/we sold MSFT waaaaaaayyyyy to soon.(taking notes)

Jeff Bailey : 9/20/2006 7:46:29 PM

Good Gravy! Look at CTXS go!

Jeff Bailey : 9/20/2006 7:44:33 PM

Tab looks bullish too! He posted his open positions at 07:10:49.

Jeff Bailey : 9/20/2006 7:43:16 PM

I'm bullish! On most things (grin)

Marc Eckelberry : 9/20/2006 7:37:17 PM

I think INTC will correct to 18.69 where I will buy it. Again, there are just too many calls sitting at 20, the stock is being chased but it is not moving. I agree that it is a great 2007 play, but that is one stock you can work in and out of.

Marc Eckelberry : 9/20/2006 7:34:45 PM

Hard to find a bear in the press (and I am not saying I'M bearish, I am just cautious), but this one makes a good point: Link

Jeff Bailey : 9/20/2006 7:36:20 PM

I hear you there Marc. You can never sell to soon, or late for that matter! Any time I think I sold to soon after booking a profit, my ego isn't too big to get back on board.

INTC was trading $20 in May and its trading $20 today.

New MSFT products due out next year!

Marc Eckelberry : 9/20/2006 7:31:36 PM

NQ 1680/1686. It's a 15 to 20 point trade from here and I might take it if ES moves above 1338. But I will only do that with futures, not options. I want to be able to get out overnight.

Jeff Bailey : 9/20/2006 7:30:52 PM

SILICON LABS CUTS 3Q OUTLOOK

DJ- Integrated-circuits maker cuts revenue outlook for 3Q to between $113 million and $116 million from $122 million and $127 million, blaming weaker demand for its Aero transceivers on prolonged inventory adjustments in China and lower sales.

JB- SLAB $32.06 +0.28% Link ... $30.75 extended.

Marc Eckelberry : 9/20/2006 7:27:51 PM

Right now, I see only a 60 cent upside in QQQQ. That's not enough for me to load up on options. When it was at 36, I loved it.

Marc Eckelberry : 9/20/2006 7:26:18 PM

And there is nothing wrong with cashing in on a rally. Sell to soon is not a problem for me. I don't have an ego there.

Marc Eckelberry : 9/20/2006 7:27:01 PM

I see value in some techs, Jeff, as I did in June. As I said, I like INTC, NVDA. But I don't like the way the SOX is behind on this rally, that's all. Nothing to write 3 pages about. When the SOX leads again, I will be a big buyer of techs. Right now, I nibble with caution and if some great tech stocks drop to a PEG level I can love, I'll go in. But do you really want AAPL and NVDA here?

Jeff Bailey : 9/20/2006 7:23:06 PM

JPMORGAN, CITADEL TAKE OVER AMARANTH ENERGY BOOK

Hedge fund says it has transferred its portfolio of energy trades to a third party. JPMorgan Chase and Citadel Investments will take over the portfolio, people familiar with the matter say.

Tab Gilles : 9/20/2006 7:10:49 PM

Open Positions and Watch List Link

Technical Charts $NDX/$NASI Link

$NALOW/UOPIX/$BPNDX/$NASI Link

$NAHL/UOPIX/$NDX Link

Jeff Bailey : 9/20/2006 7:04:24 PM

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

Today's Activity

Bearish swing trade put one (1) of the Baker Hughes BHI Nov $60 Puts (BHI-WL) for $2.40. No stop for now with target of $55 in the underlying.

Jeff Bailey : 9/20/2006 7:04:12 PM

Stockcharts.com's S&P 500 Bullish % ($BPSPX) Link saw a net gain of 2 stocks to versing higher point and figure buy signals today. Now 62.60%. Still "bull cofirmed"

Jeff Bailey : 9/20/2006 7:04:04 PM

Note which way everyone is running, and what they're running with Link

Watch what happens when the bull turns and what the "herd" does.

Jeff Bailey : 9/20/2006 7:03:27 PM

Well, that is certainly a change from your convictions in May Marc. AMAT and INTC will certainly be "key."

Jeff Bailey : 9/20/2006 7:03:18 PM

When will that be Marc? (06:28:24 PM)

NOBODY KNOWS FOR SURE, if at all

This market Link , or that market Link

Jeff Bailey : 9/20/2006 6:29:40 PM

And some say the roughly 17-times earnings should be fairly valued at 25-times (how, I don't know). Or the SPX is still WAY "undervalued!"

Hey in Friday evening's MM, I noted S&P Price/Earnings at 16.86. SPX closed 1,319.87.

So, that's roughly 78.28 earnings per index share.

SPX closed 1,325 tonight and "valuation" has stretched to a don't chase it of 78.59!

Marc Eckelberry : 9/20/2006 6:28:24 PM

When some big hedge funds will have made back their losses from the May BOJ hedge disaster (selling volatility using zero interest, and BOJ raises rates )then this market will see some selling. We just don't know when that is. They are pushing it up because they need to raise more cash. They know that you are looking at those charts and they want you in. But it is interesting to note that they are not buying semis. I think semis are being bought by the retail crowd, which is why you notice selling pressure on every SMH and SOX bounce, as if someone was drawing them in to collect some cash. If the big guys were buying that sector, it would be ahead of NDX.

Marc Eckelberry : 9/20/2006 6:20:46 PM

I know a couple of pro-traders who were waiting for SPX 1327/1328 to get in short. That wedge play is on many radars, but since it is, I remain cautious that they will chase the stops and run the markets up into EOM.

Marc Eckelberry : 9/20/2006 6:18:26 PM

Jeff, I'm all cash in my trading account, except for QM long, maybe YG soon and ES short. All daytrades. I don't feel like chasing this one with options. When some stocks I like to get back to levels I deem of value, I will buy some leaps. For now, the only longs I will play are in my future's account and with tight stops. In fact, my shorts have very tight stops as well (ES 1338.25).

Marc Eckelberry : 9/20/2006 6:14:41 PM

You have to do simple math: SPX is up more than 6% for the year. What is overall economic growth? The fact that high beta stocks in techonolgy are just even for the year does NOT make them a deal. I tend to look at SPX year over year to moderate my expectations, whether on the up side or downside. Remember just a few months ago when we were at SPX 1225? Everyone was saying 1200. But growth was and is still positive, there was no real logic behind having a negative year.

Jeff Bailey : 9/20/2006 6:17:23 PM

So true Marc ... If your sitting on the side you can't lose any money. You can't make any either.

I'd rather "chase a market" that is moving higher than try and pick a bottom in something that the market doesn't find favor in.

Hey... end of Q3 coming up for mutual funds. What's in their wallet? What are the big guns going to show their investors? Remember... they want to look smart! Especially if they've been sitting on the sidelines and THEIR fund has been underperforming their peers.

Marc Eckelberry : 9/20/2006 6:09:08 PM

This is not the roaring 90's. INTC will not go from 19 to 25 in a week. New 52 weeks highs does not mean another 10% follow through. It's just not the same game.

Marc Eckelberry : 9/20/2006 6:07:56 PM

This brings up another subject, cash flow. You have to have cash on hand to pounce on the great deals when they come, like many stocks in June/July. When everyone is screaming "new 52 week highs", that is the time to raise cash. When everyone is screaming "new 52 week lows", that is the time to try and find some good deals. If there are no good deals,take a pass. But you need the cash to make the choice.

Marc Eckelberry : 9/20/2006 6:05:42 PM

You win some, you lose some. But you have to play it or you never win anything. The company I want to own at some point is GM when they start getting a little more lean. I know what they are preparing with China and the new hydrogen prototypes. Their new hybrid system is also superior to Toyota. Just a little patience on that one and it will be a great play for the next 5 years. A little crowded right now, needs a pullback.

Jeff Bailey : 9/20/2006 6:04:16 PM

Levitz Furniture ... they went bankrupt. I had bought about $2 million worth of their "junk bonds" for clients accounts at $0.60 on the dollar. Saw $0.75 and sold half. Sold the rest at $0.50 on the dollar when the stock went no bid.

I and my head fixed income analyst had our convictiions. To a point anyway. Eventually we had to admit we were WRONG.

Certainly the trader/investor we sold the $0.50 on the dollar to saw "value." When Levits announced they were no longer able to service the debt, somebody else saw "value" at $0.15 on the dollar.

Remember their commercials .... "You'll love it at Levitz"

Jim Brown : 9/20/2006 5:59:26 PM

They also add in the pre-market and after market trades to give true numbers. Sometimes there are huge trades after the bell that are never reported by the major portals like Yahoo. They only track 9:30-4:00 and that ignores a lot of activity.

Jeff Bailey : 9/20/2006 5:57:16 PM

Jim ... I'm not sure, but I think they "screen out" many of the closed end mutual funds, like PHF. I actually prefer that as I want the nuts and bolts of stocks.

A couple of times I've shown Dorsey/Wright's breakdown of NH/NL by sector, and "real estate" and some "fixed income" type of closed end funds were really pushing the numbers much higher than investertech's tabulations for the NYSE.

Marc Eckelberry : 9/20/2006 5:56:00 PM

Jeff, Enron was a broker, not source product. Hard to determine value there. I would never have invested in Enron, especially when everyone was saying there was value, just like they were saying there was value for CSCO at 50. I do my own research.

Jim Brown : 9/20/2006 5:53:55 PM

I agree Jeff, hardly a day goes by that I don't use their statistics pages.

Jeff Bailey : 9/20/2006 5:54:28 PM

Thanks Jim ... I only had 81 new highs on the NYSE for 06/02/06, with 50 NH the day before and day after.

I've never been able to find a day when several data providers all show the same number of NH and NL. That's just a fact of life we internal followers live with.

Investertech's seems to be "in the middle" of several vendors and I thank Jim each and every day (in my mind) for telling me about their service. Link

Later this evening, the numbers may change a bit. Eventually they also give "correct" NH/NL for the Russell 2000. Yesterday's RUT.X NH/NL was 33:22.

Jeff Bailey : 9/20/2006 5:46:53 PM

And what is "value" ... that is the question that has NEVER been answered. There is a second in time, where a stock trades at a PRICE that the market determines its BEST value and when the security finds its eventual "low."

Enron had "great value" according to many. History showed, fortunes can be lost if courage and convictions don't pan out.

Is anyone fallowing this Amaranth story?

Jim Brown : 9/20/2006 5:44:19 PM

Jeff, I show 200 new highs today and 212 was the next highest level back on June 2nd. Highs are still WELL BELOW levels seen back in May. Link to May/June highs/lows: Link

Marc Eckelberry : 9/20/2006 5:44:47 PM

I know some of you took that QM trade at 60.675. Put a stop limit at 60.52 and an auxilliary at 60.50, GTC. Initial target is 61.25. If stopped out, remain patient and wait for 60.15, next entry.

Jeff Bailey : 9/20/2006 5:39:03 PM

Closing Internals found at this Link

I can't be certain, but today's 200 New Highs at the big board are most since 05/10/06. On 05/05 new highs reached 369:58.

Today's 117 at the NASDAQ are highest since 06/30/06 121:62.

I do not have the NH/NL for 09/01, 09/05 and 09/07.

Marc Eckelberry : 9/20/2006 5:33:11 PM

The only true fortunes made in the stock market have been from investors buying value when no one else wants it. "Analysts" who just repeat what the herd is doing are of no use to you there. Daytrading and investing are two different subjects. Making a fortune at daytrading is a myth. Making a fortune at investing with courage and conviction is a reality. And I can tell you that because I daytrade pretty darn well, it's just a lot of work to pay the rent, basically. Your retiremnt will most likely not be funded by daytrading.

Jim Brown : 9/20/2006 5:17:12 PM

Jeff, that CNBC headline was just a sound bite for a guest Kudlow had on his show. The guest was far from calling peak oil a myth. In fact when questioned he swapped sides several times. He felt technology would continue to produce oil through 2100. That is not the point. The point of peak oil is that we can no longer produce it at the volume we need for our daily use because all current fields are depleting faster than new fields can be added. Nobody is saying oil will disappear, only cheap oil will disappear.

Jeff Bailey : 9/20/2006 5:15:28 PM

I've heard from sources deemed reliable that many firms have been reviewing their floor trader's books a little more closely in just the past few days.

Jeff Bailey : 9/20/2006 5:13:22 PM

Excellent discussion taking place on CNBC regarding Amaranth ... impact on markets.

Jeff Bailey : 9/20/2006 5:10:54 PM

One of my biggest pet peeves is when "analysts" tell us all to buy something, it gets crushed 30%, then months/quarters later, when the stock recovers, or shows a gain, they pound their chest like King Kong.

Marc Eckelberry : 9/20/2006 5:06:25 PM

This brings up a pet peeve of mine. Of course when you buy a stock at lows or bottoms the outlook is bearish. If it wasn't bearish IT WOULD NOT BE AT THAT PRICE. It's like Intel. That was a perfect example. I loved the stock at 17/18 because it has forward value. But that is when Cramer told us to sell it, and everyone was talking about INTC at 12. I knew it was time to hang on because everyone was singing the same song. Fast forward 2 months and Cramer tells you to buy INTC at 20, just when you should sell it and book profits. I still ike INTC, but I think we could see 18.85 again. And I'll bet everyone will be singing INTC at 12 when that happens. Anyway, this applies to oil. There are just too many folks calling for 50 oil and this is exactly what happened a year ago when they were warning about 40 oil.

Jeff Bailey : 9/20/2006 5:04:18 PM

Thoughts to ponder for sure Marc. Why just last week (09/15/06) CNBC headline was Peak Oil A Myth

November Crude has dropped $3.23 since then.

Jeff Bailey : 9/20/2006 4:58:55 PM

And what might the CRB index have to do with anything ? Feel free to visit the Federal Reserve's website and calendars of Fed policy meetings at this Link

That's about the time I made my "end of recession" market call. It was scary and "everyone" was saying the CRB was sure sign of a failed Fed policy and the next leg of a bear market was soon to take hold in broader equities as the economy was then headed for a depression.

Marc Eckelberry : 9/20/2006 4:55:39 PM

The press is your worse enemey if you believe them. They are great as a contrarian tool. Remember at 75 when everyone said 100 by year end? T boone jumped in with 80 by year end. Well, we hit 80 in August and it was all over. I wonder what T boone is saying now, or for that matter all those jabbering heads at CNBC. I think the reporters are scrambling to find someone who will tell them oil will be at 40, just so that you can freak out or feel all cozy and buy equities at 5 year highs. Right. Are you REALLY going to do that?

Marc Eckelberry : 9/20/2006 4:52:07 PM

And I remember buying it at 57.75 or so and it was scary. Everyone was talking about 40 oil (just like now: they keep saying 50 oil, ok, maybe). Which is why I never listen to the press. They will freak you out of any position.

Jeff Bailey : 9/20/2006 4:49:51 PM

Great comment/note Jim. Just pulled up a MONTHLY interval chart of the cr00y. Each interval is just about 20 days. In March of 2002 the cr00y gained 6.8%.

Jim Brown : 9/20/2006 4:48:28 PM

The -20% drop in oil prices marks the 7th time in the last three years that is has corrected by -20% or more. In August of 2005 oil fell from a high of $71 to $56 in November.

Marc Eckelberry : 9/20/2006 4:49:11 PM

NDX closes right at December 2005 close, which means we are barely in the green for the year. The SOX is under. Logic would say we go higher and close the year in the plus column, but this rally is already 2 1/2 months old and NDX is only even for the year. Very odd.

Jeff Bailey : 9/20/2006 4:44:49 PM

Closing U.S. Market Watch found at this Link

Jim Brown : 9/20/2006 4:42:21 PM

The recent -15% drop in the CRB over the last 30 days is an all time record.

Jeff Bailey : 9/20/2006 4:40:47 PM

CRB Index (cr00y) settles at 52-week low !

Jeff Bailey : 9/20/2006 4:40:07 PM

November Natural Gas settles at 52-week low!

Jeff Bailey : 9/20/2006 4:38:49 PM

November Heating Oil settles at 52-week low!

Jeff Bailey : 9/20/2006 4:37:35 PM

November Unleaded matches 52-week low settlement!

Marc Eckelberry : 9/20/2006 4:36:26 PM

I don't like the fact that QM has daily s1 now at 60.15 and weekly S2 at 60.15. If we get a move to 6120 or so, book some partial profits and makes sure we don't tumble to a lower low. If it holds, go back in. The overnight session should give us a move to 61.25.

Jeff Bailey : 9/20/2006 4:35:09 PM

Pacholder High Yield (PHF) $10.20 +1.09% closes at new 52-week and multi-year high!

Jeff Bailey : 9/20/2006 4:31:20 PM

North American Telecom Index (XTC.X) closes at new 52-week and multi-year high!

Marc Eckelberry : 9/20/2006 4:30:15 PM

WASHINGTON (MarketWatch) -- The Federal Reserve held overnight interest rates steady at 5.25% on Wednesday but left the door open for further increases if inflation does not behave...
The statement "retains the FOMC's flexibility to hike in coming months if growth should reaccelerate and inflation data turn more adverse," said Andrew Tilton, economist at Goldman Sachs. "It was a bit hawkish," said Mike Englund, chief economist for Action Economics. "They retained a bias to tighten, and there was a dissent."
Link

Jeff Bailey : 9/20/2006 4:30:01 PM

GSTI Software Index (GSO.X) closes at new 52-week and multi-year high!

Jeff Bailey : 9/20/2006 4:28:50 PM

S&P 100 (OEX.X) closes at new 52-week and multi-year high!

Marc Eckelberry : 9/20/2006 4:26:39 PM

VIX closes at 11.39.

Marc Eckelberry : 9/20/2006 4:23:53 PM

XLE closed above the 20 month MA. If September holds that MA at the close of the month, it sets up a run to 10 month ma at 54.95. It's a heck of a trade.

Marc Eckelberry : 9/20/2006 4:22:14 PM

Since everyone probably dove into all this QM chatter, let me brief you on the overnight Nymex session. It is very volatile and market stops are not native. You should use limit WITH an auxilliary price cushion, or it will just roll by you. Just a heads up.

Marc Eckelberry : 9/20/2006 4:16:06 PM

QM weekly pivots: S2 60.14, S1 62.075, pp 64.75. Right now last at 60.80.

Jeff Bailey : 9/20/2006 4:14:51 PM

QQQQ ... $0.25 box chart Link

SMH $0.25 box chart Link

Tab Gilles : 9/20/2006 4:13:55 PM

Jim...I use the Barbell investment style. Oil is offset by tech/NDX. Reallocating as one declines and one rises. Besides the Profund UOPIX & UAPIX funds, I've used the QQQQ options, more specifically QQQAK.X for my personal accountHaving entered last July around the $2 area, I took some money off the table at $4.50 today, entering into some call leaps on some oil plays. I'm still bullish on NDX and RUT and until I get a sell signal technically...I'll stay long. I mentioned earlier today that depending what the markets reaction was after the Fed announcement, I'd either stay long ore sell. The market did sell down slight from earlier highs but managed to recoup most of those gains. I'm holding onto the long position for now. I'll recap with NDX,NASI,NALOW etc...charts later tonight.

Marc Eckelberry : 9/20/2006 4:12:16 PM

Well, all I want right now is a trade to 63 with QM. That's 2.5 points or $1250 per contract. And it can happen in a day or two.

Jeff Bailey : 9/20/2006 4:11:08 PM

Great observation Marc ... Remember folks ...

Institutions tend to dump stocks in a single transaction and buy, if possible, in smaller lots, gradually accumulating a position. Therefor, many more big blocks are traded on downticks than on upticks. - Justin Mamis

Monitor the 5-day and 20-day Net% changes in the U.S. Market Watch. That's what they are there for.

Marc Eckelberry : 9/20/2006 4:11:05 PM

SMH chart, still in the wedge and now back below 200 day ema and way belwo 200 dma which it never conquered in this rally: Link

Marc Eckelberry : 9/20/2006 4:07:40 PM

SMH just took a hit after the close. Down to 34.05 and below 200 ema.

Jim Brown : 9/20/2006 4:05:09 PM

Gas supplies in storage last week hit 3,084 BCF after an injection for the week of +108 BCF. That level of injection could continue due to cooler but mild weather. That give us 3 maybe 4 weeks before maximum storage levels are reached. We either need a really hot indian summer to appear or an early blast of winter to shock gas demand and prices back into a positive trend. According to the weatherman long term outlook is for more mild weather until Halloween.

Marc Eckelberry : 9/20/2006 4:03:31 PM

By SMH/SOX lame, I mean relative to QQQQ/NDX/GSO. Not even back above 200 dma and barely holding on to 200 ema.

Jeff Bailey : 9/20/2006 4:01:50 PM

Seagate Tech (STX) alert $23.00 +2.31% Link ... (see 09/18/06 MM)

Jim Brown : 9/20/2006 4:01:21 PM

Gas supplies hit record levels of 3,327 BCF in 2004. We are on track to break that record over the next 2-3 weeks. Maximum storage capacity is seen to be 3,500 TCF. Once that max is reached there will be no place for gas to go and pipeline pressures will rise locking out gas from low pressure fields. Those storage owners with extra capacity will begin buying only the cheapest gas available to put in storage creating a bidding war for any remaining capacity. This gas against gas competition could push gas under $4 and that could drag oil to $56 or so.

Marc Eckelberry : 9/20/2006 4:00:44 PM

The SOX and SMH once again put in a lame performance. How long can this last?

Marc Eckelberry : 9/20/2006 3:56:39 PM

I will be watching XLE very carefully and that 20 month MA.

Jim Brown : 9/20/2006 3:55:08 PM

Other than an oversold bounce I would not bet on any immediate recovery in oil. I am expecting late October to early November before any real uptrend develops. It will take that long for the winter heating oil cycle to have any impact on the surplus crude supplies. Of course logic and fundamentals sometimes don't matter as evidenced by the $5B implosion at Amaranth. Anybody with a brain could see the record inventory levels building and the coming gas on gas price competition. Once gas prices start to implode over the next couple weeks, I mean really implode, the price of oil will follow. Oil and gas trade on a parity basis based on BTUs. Buy the oil dip but make it a trade not a major position.

Marc Eckelberry : 9/20/2006 3:55:00 PM

ES is having trouble getting 1337.50 back.

Jeff Bailey : 9/20/2006 3:54:45 PM

November Crude Oil (cl06x) settled down $1.43, or -2.30% at $60.74.

Marc Eckelberry : 9/20/2006 3:53:08 PM

QM traders can get very bullish or very bearsih on any news item. We could be at 65 on Friday or at 59. It's a wacky sector, no doubt.

Marc Eckelberry : 9/20/2006 3:50:05 PM

Thanks for clarifying on the longer term inventory picture, Jim. But bears have priced in to perfection their scenario. Oil bulls will not need much to get it rolling again.

Jeff Bailey : 9/20/2006 3:49:43 PM

In the U.S. Market Watch, I'll now begin posing November for Crude Oil, Unleaded, Heating Oil and Natural Gas.

Jim Brown : 9/20/2006 3:49:37 PM

Even if OPEC does support $60 it will take 45-60 days for any slowing production to make its way through the system. Just cutting production today has no impact. The oil in the system and on tankers has to be delivered first. Once supplies begin to tighten (45-60 days) the refineries will bid the price higher to acquire the specific grades they need. It is a long term event, not days but weeks.

Marc Eckelberry : 9/20/2006 3:46:57 PM

Bulls do not want to see an ES close below 1337.

Jeff Bailey : 9/20/2006 3:46:04 PM

October Crude Oil (cl06v) official settlement at the NYMEX was $60.46. Down $1.20, or -1.94%.

Marc Eckelberry : 9/20/2006 3:45:56 PM

And I might add, OPEC has made it clear they will not stand by and let oil fall below 60. You can bet all this pumping will slow and all of a sudden, we will have to buy oil to make up for lost inventory going into the winter. A mild winter is priced in. That could change.

Jim Brown : 9/20/2006 3:46:57 PM

Marc, inventories are not down. They are at highs not seen since 1999. Crude inventories at 327.7 mb are +12.9% OVER the five year average. Gasoline, +2.6%, Distilates (heating oil) +13.2%, residual fuel oil +26.1%. There is no shortage of oil right now and it will take a couple months to burn it off. This inventory build came from a record warm winter, a mild summer and no hurricanes. Oil stocked in case of hurricanes is now surplus. The drop in oil inventory levels this week was due to higher refinery utilization and sporadic deliveries if imports due to hurricanes in the Atlantic delaying shipments slightly.

Marc Eckelberry : 9/20/2006 3:40:18 PM

Unless the Chinese get nuked, I don't see oil getting much lower right before the winter with inventories down.

Marc Eckelberry : 9/20/2006 3:38:19 PM

Here is the XLE monthly chart. Look at that hit of 20 month ma today: Link

Jim Brown : 9/20/2006 3:37:53 PM

Tab, Marc, I am with you with a QM long on that dip. $60.60 held and the expiration of Oct futures should give us a roll over bounce tomorrow.

Marc Eckelberry : 9/20/2006 3:36:09 PM

I think we're in sync on this trade, Tab.

Jim Brown : 9/20/2006 3:36:06 PM

Keene, I agree to some extent. I believe all the good news is priced in and we could see some profit taking tomorrow. Of course should we move much over 1325 it could trigger some serious short covering. Oil is due a bounce here now that October futures have expired. That could boost the S&P and cause that move over 1325.

Marc Eckelberry : 9/20/2006 3:35:05 PM

Could change any second. But they will hit some stops.

Marc Eckelberry : 9/20/2006 3:34:45 PM

The book is supportive of an ES bounce into the close at this point.

Tab Gilles : 9/20/2006 3:35:43 PM

Sorry...Marc...I didn't want to validate his PO...just that what his observation of end of the Q and money managers not wanting to own oil. My point was to step in soon ahead of them. Matter of fact, I was did alittle buying today for my own account.

I'll most likely post a buy to the MM open position tomorrow for the XLE.

Keene Little : 9/20/2006 3:32:47 PM

We got a little 3-wave bounce off the pullback so it should continue lower. If we get another leg up in the bounce as we head into the close then I think it will be a setup to get short out of the gate tomorrow morning.

Jeff Bailey : 9/20/2006 3:32:18 PM

03:15 Internals found at this Link

Marc Eckelberry : 9/20/2006 3:29:16 PM

Above 1337.50, I would not be short, or at least be careful. 1341/1343 could be next.

Marc Eckelberry : 9/20/2006 3:27:35 PM

I am long QM NOV at 60.675, stop 60.525. Taking very little chances. I also like being short ES under 1337.50.

Marc Eckelberry : 9/20/2006 3:26:17 PM

XLE is now very close to the 20 month MA and QM has not budged since hitting 60.60.

Marc Eckelberry : 9/20/2006 3:23:44 PM

Reading the book has saved me from trouble today.

Marc Eckelberry : 9/20/2006 3:25:42 PM

The problem with Cramer is that he is a lousy market timer. He is a good stock picker but he is is mostly momentum. Nothing wrong with that, but he also said to sell INTC at 18, buy LU at 4 etc...So I don't really care what he says about oil or gold. I respect Marc Faber a lot more.

Jeff Bailey : 9/20/2006 3:17:45 PM

03:15 Market Watch found at this Link

Tab Gilles : 9/20/2006 3:15:48 PM

XLE Hitting $51 level. Link

Listening to Cramer on CNBC...he believes oil will hit $56. Sees no money manager wanting to hold oil in their portfolio before end of Q. Valid point...I agree. I would say now is the time to start averaging in here. We'll get the natural gas #s tomorrow, I like to see a few days more and some sort of buying stepping in. However, the risk/reward scenario is more favorable now than several weeks ago.

Jane Fox : 9/20/2006 3:09:43 PM

QM may be at some level of support here. Link

Jane Fox : 9/20/2006 3:09:50 PM

The crude emini QM has hit a low of 60.60 today. When will the selling end?

Jeff Bailey : 9/20/2006 2:58:41 PM

Filled alert @ $2.40 with BHI $62.82

Marc Eckelberry : 9/20/2006 2:58:12 PM

I picked up some November QM at 60.675. The hit of XLE 51 is holding and we are oversold 30 and 60 mn. Stop is very tight as we could very well swing down to 60.

Jeff Bailey : 9/20/2006 2:57:44 PM

Swing trade put option alert for one (1) of the Baker Hughes Intl. BHI Nov $60 Puts BHI-WL) at the offer of $2.45.

BHI $62.66 -1.12% ... target $55.

Jeff Bailey : 9/20/2006 2:44:45 PM

iShares Silver (SLV) $109.31 +1.32% ... moves into this morning's gap higher open.

Marc Eckelberry : 9/20/2006 2:35:22 PM

XLE 50.68 is 20 month ma. We get it and hold it, buy it.

Jeff Bailey : 9/20/2006 2:30:08 PM

10-year YIELD ($TNX.X) ... steady ... down 1.2 bp at 4.725%

Tab Gilles : 9/20/2006 2:29:47 PM

Crude Oil $60.20; XLE $51.21

Jeff Bailey : 9/20/2006 2:29:26 PM

Amex Gold Bugs ($HUI.X) 292.42 -0.53% ... darts to new lows of the month.

Jeff Bailey : 9/20/2006 2:28:12 PM

FOMC Statement at this Link

Jeffrey Lacker once again preffered a 25 basis point increase.

08/08/06 Statement at this Link

Tab Gilles : 9/20/2006 2:25:43 PM

EIA Weekly Report Link

Keene Little : 9/20/2006 2:23:49 PM

The brief spike up in SPX tagged the top of its wedge to the penny. No overthrow so I don't know if that's it but the new high finished the wave count for the move up from yesterday's low. Being short here with a stop at a new high is a good bet. Assuming we get a pullback now I'll be watching it like a hawk to see if we get a sign that the top is in or just the 1st wave of 5 larger moves as SPX works its way higher to 1345.

Jeff Bailey : 9/20/2006 2:23:26 PM

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

Jeff Bailey : 9/20/2006 2:17:51 PM

FOMC Leaves Rates Unchanged with target 5.25%

Jeff Bailey : 9/20/2006 2:17:19 PM

02:15 Market Watch found at this Link

Jeff Bailey : 9/20/2006 2:14:38 PM

Sell Program Premium ... SPY $132.45

Jeff Bailey : 9/20/2006 2:13:26 PM

PAULSON BACKS STRONG DOLLAR

DJ- Treasury Secretary, during trip to China, says he is striving to maintain investor confidence in the U.S. economy, thereby achieving a strong dollar. U.S. and China also establish a fresh channel for economic dialogue.

Jeff Bailey : 9/20/2006 2:12:29 PM

AMARANTH TRANSFERS ENERGY PORTFOLIO

DJ- Struggling hedge fund moves its portfolio of energy trades to a third party, who isn't named. Man Group, the world's largest manager of funds of hedge funds, is among the firms with a large exposure to Amaranth's heavy losses.

Jeff Bailey : 9/20/2006 2:11:24 PM

MORGAN STANLEY 3Q NET SOARS ABOVE EXPECTATIONS

DJ- Investment bank posts net of $1.85 billion, or $1.75 a share, as revenue rises 15% to $7.99 billion. Analysts expected the company to earn $1.37 on revenue of $7.82 billion. CFO Sidwell says firm's investment-banking pipeline is flourishing in two-thirds of its businesses and is largely finished with big layoffs in its wealth management division.

MS $72.52 +0.93% Link

Marc Eckelberry : 9/20/2006 2:08:53 PM

Everyone is way above weekly pivot and about to challenge weekly R1 while semis are getting happy to just barely make weekly pivot. Right.

Jeff Bailey : 9/20/2006 2:06:50 PM

CBOT has a very nice Level II order book too! Link

Jeff Bailey : 9/20/2006 2:05:00 PM

All-time high alert ... S&P Banking Index (BIX.X) 392.50 +0.98%

Marc Eckelberry : 9/20/2006 2:04:37 PM

Good day Marc Could you post the gold ticker for the month you are trading and do they offer a mini?
December and yes the e-mini is YG. Symbol YG06Z.

Jeff Bailey : 9/20/2006 2:04:07 PM

Semiconductor HOLDRs (SMH) $34.39 +1.17% ... recaptured WEEKLY Pivot ... challenge morning highs.

Marc Eckelberry : 9/20/2006 2:00:59 PM

Watch the dollar.

Marc Eckelberry : 9/20/2006 1:58:27 PM

QQQQ 41.03 should cap this rally if we get above 40.68. If they can't get above 40.68, that would initiate some selling. We are getting close.

Jeff Bailey : 9/20/2006 1:53:21 PM

Another "bullish catalyst" for oil? ... OPEC cuts?

What went wrong at Amaranth? How could a trader that profited so much on the way up, then lose it all, and THEN SOME, all the way down? Link

Jeff Bailey : 9/20/2006 1:47:58 PM

AmeriTrade (AMTD) $18.06 +2.32% .... always in the wings.

Jeff Bailey : 9/20/2006 1:47:13 PM

Shhhooot ... ET $24.82 +1.59% .... I say it now, and will be ready if given a shot.

Jeff Bailey : 9/20/2006 1:46:15 PM

Broker/Dealer Index (XBD.X) 226.82 +2.12% ... another "wave" of bullishness taking hold.

Marc Eckelberry : 9/20/2006 1:46:31 PM

Opec will annouce a cut in poduction any day now. Their tolerance has limits.

Jeff Bailey : 9/20/2006 1:44:54 PM

01:30 Internals found at this Link

Marc Eckelberry : 9/20/2006 1:45:20 PM

QQQQ option chain has call R at 41 ( I think we will get up there) and put support at 39. Tight range. 40 looks a little too overloaded with calls as well. In other words, upside could be limited to 41. Link

Marc Eckelberry : 9/20/2006 1:42:47 PM

Just give me 60 oil, please.

Marc Eckelberry : 9/20/2006 1:41:33 PM

SPX is near the highest level in 5 years and the Feds are going to do what we know they are going to do. The VIX is near 12 year lows again. Do you really want to throw your nest egg at this? I don't. I will scalp long only and see if I can get a swing short at a higher level that could last. Don't fight it, but as I said don't love it.

Jeff Bailey : 9/20/2006 1:40:57 PM

Hmmm ... as I update NH/NL from Link , I see Jewelry/Silverware as percentage gainer. Last night this sector was also a percentage winner.

Want to take some notes. I have my convictions about Silver, the commodity, but not married to them at this points. Are the end-USERS of the metal the winners on price decline, or is this a sign that commodity and stocks with a silver taste going to move together.

Thus the SIL and CDE additions to "watch list" as they are the PRODUCERS. All channels covered here.

Marc Eckelberry : 9/20/2006 1:38:16 PM

So trade it, don't love it.

Marc Eckelberry : 9/20/2006 1:37:59 PM

Maybe 1350 for ES.

Marc Eckelberry : 9/20/2006 1:36:54 PM

Right now, I much prefer loading up on gold on pullbacks. I want to accumulate a nice position going into 2007.

Marc Eckelberry : 9/20/2006 1:37:32 PM

NQ upside risk is to 1680 if they go beserk. I see ES limited at 1345.

Marc Eckelberry : 9/20/2006 1:35:30 PM

I mean, they are even chasing MU this morning after the warnings. It is going to be painful one of these days.

Marc Eckelberry : 9/20/2006 1:32:11 PM

I have a bad feeling about the hedge fund scenario. I think they are getting desperate and chasing performance in equities to make up for steep losses in commodities. Some are even shorting oil and gold near bottom levels. It is not going to be pretty when more and more lose money and people want to get their money out. There have been many warnings over the past few years about these hedge funds and how they drove the VIX to these levels. I smell a rat and a big one. Those of us who have been around a while know how fast this stuff can unwind.

Jeff Bailey : 9/20/2006 1:32:11 PM

01:30 PM EDT Market Watch found at this Link

Jeff Bailey : 9/20/2006 1:29:23 PM

Look at a stock like CHK $29.05 -0.47% ... company KNOWS how to hedge prices.

Jeff Bailey : 9/20/2006 1:25:30 PM

Last night I sent Jim an e-mail ... "How does a trader go from big winner in Nat. Gas to getting crushed?"

Jeff Bailey : 9/20/2006 1:24:36 PM

Jim! Listening to CNBC?

Jeff Bailey : 9/20/2006 1:21:47 PM

iShares Silver Trust (AMEX:SLV) $110.48 +2.41% .... "ditto" SIL and CDE.

All squared technically.

Jeff Bailey : 9/20/2006 1:20:09 PM

Coeur d' Alene Mines (CDE) $4.60 -0.64% ... has been hovering around its 61.8% (6/13/06 and 09/05/06) low/high closes of late.

Marc Eckelberry : 9/20/2006 1:20:02 PM

Caught a few waves in Malibu and now I'm back. Nothing has changed except that semis still look lame. OIl is right back at 62 and we are definitely building a base above 61. Gold is in the morning gap, and I would see if we close it a little mre before jumping in.

Jeff Bailey : 9/20/2006 1:18:07 PM

Apex Silver Mines (AMEX:SIL) $14.70 -0.27% ... testing 61.8% retracement of recent June low close to 08/21/06 relative high close.

Jane Fox : 9/20/2006 12:38:05 PM

* NYSE VOLUME 719.7M
* NYSE HAS 2,217 ADVANCERS
* NYSE HAS 921 DECLINERS
* NYSE HAS 161 ISSUES UNCHANGED
* NYSE HAS 113 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 26 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 1.09B
* NASDAQ HAS 1,950 GAINERS
* NASDAQ HAS 906 LOSERS
* NASDAQ HAS 168 ISSUES UNCHANGED
* NASDAQ HAS 68 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 16 ISSUES SETTING 52-WEEK LOWS

Jane Fox : 9/20/2006 12:29:34 PM

DEC. GOLD UP $6.40 AT $589.60/OZ AFTER $592.50 HIGH

DEC. SILVER CLIMBS 25.5 CENTS TO $11.20/OZ

Jane Fox : 9/20/2006 12:23:20 PM

NASDAQ MOST ACTIVE STOCKS: ORCL QQQQ CSCO MSFT YHOO

Jane Fox : 9/20/2006 12:22:14 PM

NYSE MOST ACTIVE STOCKS: LU F GLW TWX VLO

Keene Little : 9/20/2006 12:05:12 PM

The sideways/down consolidation this morning fits well as a 4th wave correction in the move up from yesterday's low (as long as it doesn't go too deep). As a c-wave in the chart I posted earlier it needs to be a 5-wave impulsive move and it fits nicely as that. A final 5th wave up post-FOMC (or into FOMC) would work very nicely to complete the pattern. Starting to salivate...

Jeff Bailey : 9/20/2006 11:55:55 AM

Mom has locked herself out of the house and dad is out of town. Jeff to the rescue!

I'll hopefully be back before FOMC.

Jeff Bailey : 9/20/2006 11:51:10 AM

Reviewed 07/24/06 MM Link ... We were short gold that day, a beauty and lowering stops. Gold got a bounce that day and days following, but that's all I see.

Keene Little : 9/20/2006 11:50:35 AM

Jane, I know what you mean about needing the negative divergences inside a wedge. I'd like to see it in RSI as well but if you look at a 240-min chart you can clearly see the negative divergences in MACD as the wedge has progressed since the beginning of August. Based on the internal wave structure (3-wave moves) there's no question in my mind what we have here and it's very bearish. This leg up should complete it. I don't often pound the table on a play but this is one of them--I'm looking for a shorting opportunity once the current leg up finishes.

Jeff Bailey : 9/20/2006 11:46:02 AM

NovaGold Resources (AMEX:NG) $15.54 +1.17% Link ... I don't see any "news headlines" on Yahoo! Finance as to why stock shot higher from its 07/21/06 close.

Jeff Bailey : 9/20/2006 11:36:52 AM

EIA Weekly Gross Inputs, Refinery Operable Capacity and Pct. Util. of Ref. Op. Capacity Table found at this Link

Jane Fox : 9/20/2006 11:36:34 AM

AD volume making new daily highs and VIX hugging daily lows is all you need to know. The bulls have the ball and I don't think the bears will have much of a chance of taking control of it today.

Jane Fox : 9/20/2006 11:28:52 AM

The SU and NG chart patterns are what I am looking for on the major indexes and I am just not seeing them.

Jane Fox : 9/20/2006 11:27:45 AM

Here is another excellent example. Link

Jane Fox : 9/20/2006 11:26:47 AM

Here is that chart of SU showing you what I am talking about. Link

Jane Fox : 9/20/2006 11:24:56 AM

Keene, here is a chart of YM I posted earlier this week showing that same bear wedge. My only problem with it is that the MACD and RSI are not telling me it is a bear wedge. I showed a chart of Suncor where we can see a bear wedge supported by the MACD and RSI bearish divergences and then showed how much it fell so the combination is powerful. Unfortunately I don't have that confirmation on YM. Link

Jeff Bailey : 9/20/2006 11:23:40 AM

NASDAQ volume has and edge on NYSE! That's a change!!!

Jeff Bailey : 9/20/2006 11:23:10 AM

11:00 Internals found at this Link

Keene Little : 9/20/2006 11:12:12 AM

Same observation on the DOW as I just showed for SPX. A Fib target for wave-c = 62% of wave-a in the final 5th wave of the ascending wedge is at 11667 (cash). If we get that post-FOMC it would give us a little throw-over and if that is then followed by a sell off then we'd have sell signal #1. A new high should be accompanied by negative divergences as well. A break of yesterday's low would be confirmation of the end of this wedge and it would be time to get shorty in a big way. I like this setup. Link

Jeff Bailey : 9/20/2006 11:07:51 AM

11:00 Market Watch found at this Link

Jeff Bailey : 9/20/2006 11:03:26 AM

Good observation Jane ... and I've noticed same thing in other securities last couple of weeks. I believe, based on observation, it has something to do with trend.

ES was sitting right on its WEEKLY Pivot yesterday too.

Keene Little : 9/20/2006 11:02:10 AM

Very interesting setup as we head into FOMC. If the pullback correction to the rally from Sept 11th is finished and we call it all of wave-b (in the a-b-c finish I'm looking for) then the leg up now could be part of wave-c. If wave-c goes to 62% of wave-a, which would be a logical target if we're looking at the end of the rally, that gives us an upside target of SPX 1333 (cash). Link

Perhaps a spike up on the FOMC news and then a sell off to follow? Wouldn't be the first time. Looking at this possibility I'd say short that high. But if that's not all there is to the upside (we might instead get a knee-jerk sell off to correct the leg up from yesterday's low) and then more upside and head for the 1345.92 Fib target (for two equal legs up). The interesting thing about that higher target is that it matches a Gann target from the Square-of-Nine chart.

Jeff Bailey : 9/20/2006 11:01:26 AM

Gross inputs rose by 66,000 barrels per day, Refinery Op. Capacity was unchanged at 17.4 million barrels/day while Capacity Utilization rose 0.38% to 93.42%. (Table will follow after 11:00 AM EDT)

Jane Fox : 9/20/2006 10:57:33 AM

Yesterday my bearish example of price moving sideways and MACD climbing did not pan out. Well I now have an example of the bullish reverse, price moving sideways and MACD falling. Link

Jeff Bailey : 9/20/2006 10:56:21 AM

Kerosene-Type Jet Fuel should be "green" and build of 1.27 million barrels.

Jeff Bailey : 9/20/2006 10:53:22 AM

EIA Weekly Crude Oil, Gasoline, Distillate, Diesel, Jet Fuel Inventory Table found at this Link

Marc Eckelberry : 9/20/2006 10:50:32 AM

ES 1339.50 or so should cap this move before the Feds.

Marc Eckelberry : 9/20/2006 10:45:46 AM

Post feds upside risk is ES 1345. I would sell it.

Jane Fox : 9/20/2006 10:44:05 AM

VIX is hugging its daily lows but TRIN is making new daily highs albeit at 1.08 it is not what you could call bearish. Bulls would like to see the TRIN a tad more neutral though.

Jane Fox : 9/20/2006 10:41:07 AM

Dow's yearly high made on May 10th was 11670, DOW currently at 11609.

Tab Gilles : 9/20/2006 10:48:21 AM

Citrix Systems $36.60 up $2.52 (+7.37%) Link

One of my MM watch list stocks I mentioned 9/8 12:42PM around $31.

As I brought up early this morning tech will lead ...but lets see what the markets will do after the Fed this afternoon. Oil nearing $60...currently at $60.86.

Watching XLE Looking to step into at $50/$51 level as mentioned on 9/15 10:52 AM post. Link

Jane Fox : 9/20/2006 10:37:54 AM

* NYSE ADVANCERS OUTNUMBER DECLINERS 23 TO 7
* NASDAQ ADVANCERS OUTNUMBER DECLINERS 19 TO 6
* DOW INDUSTRIALS ADVANCERS OUTNUMBER DECLINERS 26 TO 4

Marc Eckelberry : 9/20/2006 10:35:04 AM

Watch a retest of 61 and if it hold, buy it. Otherwise wait for 60. Forget equities, get in on gold and oil at some point.

Jane Fox : 9/20/2006 10:34:34 AM

ES's yearly highs are 1353.25 made on May 5th.

Jane Fox : 9/20/2006 10:31:55 AM

* CRUDE SUPPLY DOWN 2.8 MLN BRLS LAST WEEK: ENERGY DEPT.
* DISTILLATE SUPPLY UP 4.1 MLN BRLS: ENERGY DEPT.
* GASOLINE SUPPLY UP 600,000 BRLS: ENERGY DEPT.
* OCT. CRUDE FALLS 56 CENTS TO $61.10/BRL AFTER $60.90 LOW

Tab Gilles : 9/20/2006 10:31:33 AM

EIA WEEKLY #s Crude-2.8M bbl Distallates+4.1M

Jane Fox : 9/20/2006 10:31:10 AM

S P 500 INDEX UP 8.59 PTS AT 1,326.90
S P 500 HIGH OF 1,327.44 IS HIGHEST SEEN SINCE FEB. 2001

Marc Eckelberry : 9/20/2006 10:30:54 AM

NDX is green for the year.

Jane Fox : 9/20/2006 10:30:07 AM

S P 500 INDEX REACHES 5 1/2-YR. HIGH

Marc Eckelberry : 9/20/2006 10:29:35 AM

NQ upside risk to 1686 this week. ES 1341. On a breakout.

Marc Eckelberry : 9/20/2006 10:25:59 AM

ADDEC lines are very bullish but please note the VXN divergence.

Jane Fox : 9/20/2006 10:25:27 AM

Crude Inventories in 5 minutes.

Marc Eckelberry : 9/20/2006 10:25:07 AM

DOW holding below 11600.

Jane Fox : 9/20/2006 10:24:36 AM

TICKS +1000

Jane Fox : 9/20/2006 10:24:23 AM

These are very bullish. Link

Marc Eckelberry : 9/20/2006 10:24:00 AM

Lots of stops they would love to hit at 1327

Marc Eckelberry : 9/20/2006 10:23:44 AM

SPX right at the top of the sedge.

Marc Eckelberry : 9/20/2006 10:22:58 AM

The SOX is pitiful, limping up to 460. I still don't see anything to get excited about.

Marc Eckelberry : 9/20/2006 10:21:54 AM

Semis still underperforming.

Marc Eckelberry : 9/20/2006 10:19:49 AM

with a bearish divergence.

Marc Eckelberry : 9/20/2006 10:19:28 AM

NDX 1641 61.8% 2006.

Jane Fox : 9/20/2006 10:19:09 AM

A long ES here with a stop 2 ticks below daily lows is a high probability trade IMHO.

Jeff Bailey : 9/20/2006 10:11:18 AM

AMTD and ET are HIGH beta names in the brokers. Much more dependent on the "retail" investor/trader.

Some think "retail" is equivalent to "out of the loop." All you have to do is look at the refinancing portion of MBA data and KNOW that is not the case.

Jeff Bailey : 9/20/2006 10:09:07 AM

Low beta financials still impress.

Jeff Bailey : 9/20/2006 10:08:01 AM

Software challenges Airlines and Retail for 20-day sector winner.

Jeff Bailey : 9/20/2006 10:05:59 AM

10:00 Market Watch found at this Link

Jane Fox : 9/20/2006 9:54:51 AM

On Sept 15th ES hit a high of 1336.75 and today's high so far is 1337.25. Do we have enough buying power to push through this resistance. Internals say yes.

Jane Fox : 9/20/2006 9:48:39 AM

This is starting out to be a "get long and stay long" type of day. AD line is now +1455

Jeff Bailey : 9/20/2006 9:47:48 AM

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

Jane Fox : 9/20/2006 9:45:35 AM

TICKs +800

Jeff Bailey : 9/20/2006 9:39:54 AM

Nikkei-225 ($NIKK) finished 15,719, but did trade as low as 15,622.28, so O's to 15,650.

Jane Fox : 9/20/2006 9:38:49 AM

* DEC. GOLD CLIMBS $4.60 TO $587.80/OZ IN MORNING TRADING
* DEC. SILVER UP 17.5 CENTS, OR 1.6%, AT $11.12/OZ
* DEC. COPPER FALLS 7.05 CENTS, OR 2.1%, TO $3.305/LB

Jane Fox : 9/20/2006 9:44:29 AM

VIX and TRIN both open below their respective PDLs so all internals are bullish and I see no reason to short.

Jane Fox : 9/20/2006 9:37:09 AM

AD line is a very bullish +1240 and AD volume is pointing upward.

Marc Eckelberry : 9/20/2006 9:36:55 AM

QM could very well hold 61 if inventroies cooperate, but I would not be surprised to see one final push to 60. But everyone is waiting for that one.

Jeff Bailey : 9/20/2006 9:36:53 AM

Asian markets weathered the storm Link

Marc Eckelberry : 9/20/2006 9:33:05 AM

I see the book to bill declined to 1 (thanks Jeff). There was a reason semis were underperforming, let's see how they hold up today and especially watch SMH 35 level.

Keene Little : 9/20/2006 9:32:37 AM

I don't like to trade days like today because I find them to be even more manipulated than usual. Technical trading is not as reliable. I'll offer brief commentary as the day progresses but until FOMC passes it's a good day to find something else to do.

Marc Eckelberry : 9/20/2006 9:31:04 AM

I thought for weeks that gold would get a bid ahead of the Feds and here we are, but it has been the most difficult trade, that's for sure. Now here we are with YG back up at 588. This is putting a floor in gold at 577.

Jeff Bailey : 9/20/2006 9:29:39 AM

WMB $23.00 .... 3.4 million shares crossed in pre-market.

Marc Eckelberry : 9/20/2006 9:29:41 AM

Gold is way up while crude is way down. This tells me the market sees inflation as a risk if Feds don't act. As for Nov oil, it looks like we could hit weekly S2 at 60.

Jane Fox : 9/20/2006 9:27:32 AM

TBonds have broken their overnight and previous day highs.

Jane Fox : 9/20/2006 9:11:45 AM

I see no divergences on the QM chart which fits with Keene's scenario. My long QM was an anticipation of an oversold bounce and nothing longer term.

Jane Fox : 9/20/2006 9:09:55 AM

Here is how I see the MACD and RSI divergences on the major indexes:

ES MACD bearish RSI bearish
YM no divergences
NQ MACD no divergence RSI bearish
ER MACD bearish RSI bearish
So based on the MACD and RSI, ES and ER are your weakest markets and YM is your stongest. I would also like to add that no divergence is huge and probably why they are all mixed up.

Keene Little : 9/20/2006 9:01:22 AM

My two cents on oil is that we're not near a bottom yet, at least not from a time standpoint. The EW pattern needs some "unwinding" to do--a couple of 4th wave corrections followed by new lows, so a stair-stepping lower is what I expect. We could see oil climb back up to $65 and not mean anything since it would still be inside its steep down-channel. I'm just guessing but by the looks of the pattern I'd say we'll see $58 before $68. But it should take a week or two to work through the corrections and new lows.

Keene Little : 9/20/2006 8:54:43 AM

While the futures are up this morning, making for a bullish start to the day, don't forget about the volatility around today. If we do get a sell-the-news post-FOMC we could see a fast drop down to the uptrend line from July (the bottom of the ascending wedge I've been showing on SPX). Keep this chart in mind if we get that kind of move since I think it will make a good spot to try a long play. Link

A fast drop that gets reversed to new market highs would totally frustrate the bears and get many of them to throw in the towel. That would make the market vulnerable to the eventual sell off.

Jane Fox : 9/20/2006 8:46:26 AM

Here is your daily chart of QM and all I can say is it is getting RIDICULOUS! Link

Jane Fox : 9/20/2006 8:43:39 AM

Well I tried a long QM position AGAIN last night and sure enough got stopped AGAIN. Oil made a low of 61.10 overnight. Many traders, like me, are wondering when this market will find a bottom.

Gold was able to hold on to its PDL. I should have taken a long in Gold last night instead of Oil.

Natural Gas broke its PDL overnight but has retraced back into its PDR.

TBonds are hugging their PDHs ready to break out but may just sit there and wait for the almighty 2:15 announcement. Link

Jane Fox : 9/20/2006 8:37:29 AM

A bullish overnight session with both ES and YM breaking their PDHs so onward and upward. Link

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

WSJ Alert - Morgan Stanley earned $1.85 billion, or $1.75 a share, in the third quarter, beating Wall Street estimates.

Keene Little : 9/20/2006 8:20:08 AM

It sure seems like there's a concerted effort to hold this market up as we finally head into the home stretch with the FOMC announcement today. With the futures up strong this morning it's possible the pullback is finished and we'll head to new highs from here. I'm not willing to bet that way in front of FOMC since it's just as likely the market is being manipulated higher for a sell-the-news event. It'll certainly be a day for caution.

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