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Marc Eckelberry : 9/22/2006 1:12:09 AM

And I am very specific as to this trade with NQ. If 1644/1645 holds, they will try to rally EOM next week. If the gap gets closed and we lose the 10 dma, none of this will matter, there will be a scramble for the exit.

Marc Eckelberry : 9/22/2006 1:03:48 AM

Tab, I think Cramer made some valid points, but yes, he is not know for his timing. Nevertheless, he does know the fund mentality and he talks to these guys. So I will not readily discard what he says here. He has been wrong many times, but if he is right this time, it needs to be brought up. I just want the readers to understand that even though I think there are some very bearish developments, the markets could be held up until 9/30. After that, it's anyone's guess, but again, if the semis don't perk up and in a big way, I think we could be in for some storny weather. So I only brought this up as it relates to end of quarter dressing.

Jeff Bailey : 9/22/2006 12:27:26 AM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/22/2006 12:22:59 AM

Closing Internals at this Link

Jeff Bailey : 9/21/2006 11:45:44 PM

Current OPEN MM Profiles found at this Link ...

I did not post any new profiles. No OPEN positions from yesterday have been closed.

Today's General Headline "Philly Fed report signals hard landing"

The MM Profile Trade I focus on most is my current short position in the iShares Silver Trust (SLV) as it has been my scenario that declining inflationary pressures would bring continued weakness to "presious metals."

Both the dollar and treasury yields fell notably today, where my analysis (technical and economic) play out (no action Fed, if not dovish), yet gold and silver rose today. Dead cat bounce in the metals? Or something more?

Yesterday's analysis of the Fed commentary was that the Fed was more "hawkish." Today, those very same commentators' mantra is "I told you so, the Fed was wrong and they tightened too much!"

From hawkish (as it fit that day's mantra) to dovish (so it fits what the bear camp has been saying for... I've lost count how many quarters.

Today's dollar action was not that of a "hawkish Fed," but one that would be more dovish. Ditto for Treasury yields with the 10-year YIELD plunging 8.1 bp.

So sharply in fact, that at the closing on my recent home purchase, my loan broaker was on the phone with the initial lender negotiating a lower mortgage rate from when the loan was initially approved!

In essence (this is real life stuff), when I told my mortgage broker to "lock in" when the 10-year YIELD was just about to test 4.80%, I really thought the RISK of a bounce higher in Treasury YIELDS, which mortgage rates are derived from, might be a near-term low for several months. Now the 10-year YIELD drops sharply to close 4.648%.

Keene Little : 9/21/2006 10:26:55 PM

Friday's pivot tables: Link and Link

Tab Gilles : 9/21/2006 10:16:51 PM

Marc in response to you previous post....

Marc Eckelberry : 9/21/2006 9:52:43 PM Basically, it's an end of quarter call and he could be correct. In other words, funds will not want to own energy in their portfolio this quarter and will want to show techs and financials. Marc Eckelberry : 9/21/2006 9:49:16 PM Cramer is telling us to sell oil tomorrow and load up on techs and financials. Is he right? He makes a good case, so you be the judge.

I've been long tech for several weeks now and just got long oil today. As for tech, the move there has gone in my opinion about 1/2 way, as for oil the move there is just about done to the downside. My question is, if most fund managers don't want to own oil going into the end of Q...will they want to at the start of the next Q?

Cramer did make some valid points, but if I recall you mentioned the other day that he's a lousy market timer???

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.

Marc Eckelberry : 9/21/2006 10:00:49 PM

Please check the archive for my last comment. It's important.

OI Technical Staff : 9/21/2006 9:59:59 PM

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

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Marc Eckelberry : 9/21/2006 9:59:57 PM

This is what I would do, in case there is no sell-off before EOQ. Stay short until NQ 1645 area, watch that 10 dma and gap close. Take a long, with a tight stop and see if it bites. If it doesn't, get back to being short But I do think we have a little flush down to that level first, then they ramp it up EOQ. After September closes, see if they sell it. This is going to be a day to ady thing. Watch oil at 62 level. Equities will get support if oil starts falling again. So watch that.

Marc Eckelberry : 9/21/2006 9:54:21 PM

If he is right, than sell QM at 62.10 and buy NQ at 1644/1645, gap close. That's the line in the sand for techs.

Marc Eckelberry : 9/21/2006 9:53:07 PM

Just making you aware of the risks out there, both long and short.

Marc Eckelberry : 9/21/2006 9:52:43 PM

Basically, it's an end of quarter call and he could be correct. In other words, funds will not want to own energy in their portfolio this quarter and will want to show techs and financials.

Marc Eckelberry : 9/21/2006 9:49:16 PM

Cramer is telling us to sell oil tomorrow and load up on techs and financials. Is he right? He makes a good case, so you be the judge. Link

Marc Eckelberry : 9/21/2006 8:29:54 PM

I know Jim! But at least I'm long gold and was short ES, so I made out the same anyway. But I plan on hitting it on a pullback, no doubt. QM is really volatile overnight, I'll get an entry.

Tab Gilles : 9/21/2006 7:38:36 PM

$NDX/$NASI/$NALOW/$NAHL/$BPNDX Link

Jim Brown : 9/21/2006 6:43:07 PM

Marc, I am still long the QM. You got out way too early! (grin)

Jim Brown : 9/21/2006 6:41:01 PM

It has been ten years since we failed to have a correction in Sept/Oct. The recent ones occurred within 3 days of the Sept FOMC meeting. Check out this table and you will see why I am cautious about a potential sell off ahead. Link

Tab Gilles : 9/21/2006 6:39:38 PM

$GASO/$WTIC/VLO/XLE Link Link

Open Positions & Watch List Link

Keene Little : 9/21/2006 5:24:26 PM

I think the things you mention Marc are a couple more pieces to the almost complete jigsaw puzzle (of a marauding bear with huge teeth and claws). I'm moving my parents' balanced accounts completely into cash tomorrow. I'll do my bit to help funds increase their cash reserves. We could see a little more upside but I think we're too close to look for any more. It's time to hunker down to weather the storm.

Marc Eckelberry : 9/21/2006 4:57:53 PM

I am correcting the size of the last ES chart I posted (Jim noted it was too large): Link

Marc Eckelberry : 9/21/2006 4:50:19 PM

In any case, I much prefer shorting rallies at this point.

Marc Eckelberry : 9/21/2006 4:55:01 PM

Keene, I was not in agreement with you as to a potential crash scenario, but now I must admit the odds have increased. I thought we would get a summer rally, a correction, then a run into year end. I have to amend that because of the behavior of techs. For SPX to reach new year highs with NDX and QQQQ selling off at year open (not even getting green), is to me a big red flag. Add the lagging semis and I am really worried.
Flashback to 1987. We had a 10% correction or so in April 87, followed by a rally to new year highs in August followed by a 20% decline into year end. This year, we had a 9% decline (15 for COMP)in May, followed by a rally to new year highs for SPX by September with a quick sell-off (today). No confirmation by NASDAQ, NDX, SOX, TRAN and even the DOW. I think it is time to go to cash and play it real safe.

Keene Little : 9/21/2006 4:14:26 PM

One thing for bears to keep in mind (myself included) is that we could have further upside and that today's pullback was just that--a deep correction to the leg up from Tuesday. That interpretation says we'll have a strong rally tomorrow (no doubt assisted by those covering their bearish short positions).

We're very close to knowing where we are in the EW pattern. A bounce tomorrow followed by new lows will tell me the fat lady has sung. But a strong rally and I'll then be back to expecting SPX 1345 before the rally is complete.

Jane Fox : 9/21/2006 4:05:55 PM

Tomorrow's economic reports include:

10:00a.m. Aug Chicago Fed Natl Activity Index. Previous: -0.12.

12:00p.m. Sept Philadelphia Fed Business Index. Previous: 18.5.

Marc Eckelberry : 9/21/2006 3:54:41 PM

It was ok to buy them in July, but to buy them yesterday was a risky move. In any case, they will defend NDX 200 dma at all costs, but SMH is looking downright pitiful. I commented this morning that both SOX and GSO were down, while we moved up. You can't run an entire market on GOOG alone.

Marc Eckelberry : 9/21/2006 3:51:11 PM

No matter which way you spin it, for NDX to drop 20 points within minutes of hitting 2006 open (1654.50) is a bearish development. I wonder what screaming rant Cramer will come up with now that he had the entire planet buy techs yesterday.

Marc Eckelberry : 9/21/2006 3:42:18 PM

I agree Keene. 1330.75 is what I have up there. It will probably be the pivot, give or take .25.

Keene Little : 9/21/2006 3:40:16 PM

The 30 and 60-min charts are oversold and some bullish divergences are creeping into the charts. If you're just scalping moves here (recommended), covering shorts and thinking about a long play is the way to go. At least go flat for the rest of the day since downside should be limited. Perhaps a new low to complete a very smal descending wedge but I don't more than that. The test for ES on a bounce will be back up to its broken uptrend line from Sept 11th, currently just above 1330.

Marc Eckelberry : 9/21/2006 3:34:40 PM

How many times can you hit it and get away with it: Link

Keene Little : 9/21/2006 3:33:31 PM

DOW only got down to 11501. A little front-running I guess ;-)

Marc Eckelberry : 9/21/2006 3:33:20 PM

ES holding in that wedge, looks like I covered at the right spot, but frankly, I don't think it will hold (1326) as we move forward.

Marc Eckelberry : 9/21/2006 3:28:02 PM

Could get to 18.68, or even 50 dma at 18.50. But I don't think 19 will hold.

Marc Eckelberry : 9/21/2006 3:26:33 PM

Tab, I said yesterday I was waiting for INTC 18.88 or so, I might get it. 50% May high, June low.

Keene Little : 9/21/2006 3:25:11 PM

Friday the 22nd is the 1st day of Autumn and a New Moon. Stranger things have happened around this date than a market top.

Tab Gilles : 9/21/2006 3:28:59 PM

Intel (INTC)$19.17 -$0.32 Link Link Link

Marc Eckelberry : 9/21/2006 3:21:40 PM

Unfortunatley I am out of my QM long, but I am long YG. We could see a breakout any day for gold, resistance is 592. I will pick up some oil at support if it holds.

Keene Little : 9/21/2006 3:21:37 PM

It's not been since July that we've seen a -100 point day for the DOW so if that's how the day closes that in itself will be a change in behavior. Jim, you still around? Didn't your analysis on Sunday show an average date of Sept 22nd for a September high? If today was it (I'm counting my chickens a little here I'll admit) then that was a great call.

In the meantime, with the DOW only inches away from its July uptrend line at 11500, not to mention century support there, I'd say prepare for a bounce.

Marc Eckelberry : 9/21/2006 3:20:28 PM

60 mn RSI getting oversold, so I bailed. Still, I shorted 1337, 1335, 1330, 1331.50 and 1330.75. Good day.

Marc Eckelberry : 9/21/2006 3:19:33 PM

1325 is next support S2.

Marc Eckelberry : 9/21/2006 3:19:18 PM

We could go lower, but I will wait for an uptick. The NQ 1645 target still stands for those who like to hold. I like to catch the meat and guarantee money.

Marc Eckelberry : 9/21/2006 3:18:07 PM

I closed my 5th short of the day at 1326.50.

Keene Little : 9/21/2006 3:16:15 PM

A test of YM's uptrend line from July would also be a test of the low on Tuesday (11564) which makes that level doubly important for the bulls to defend. It would certainly be a good spot to try a long but with ES threatening to break down it may be good for only a bounce before it too breaks its uptrend. The bulls will need to reverse ES back up pretty quickly here to save the day.

Marc Eckelberry : 9/21/2006 3:09:44 PM

Shorts are holding on. They are seeing a big trade and they are not running as scared.

Marc Eckelberry : 9/21/2006 3:07:46 PM

I am targeting NQ 1644/1645

Marc Eckelberry : 9/21/2006 3:05:13 PM

Watch SMH 33.50.

Marc Eckelberry : 9/21/2006 2:58:50 PM

Bear flag confirmed. They shorted 1330.75. Here comes the turn, let' see if they get SMH back in the wedge. I doubt it.

Keene Little : 9/21/2006 2:50:52 PM

Interesting conversation about how the market might react to a Democratic House or a split House. In my studies of EW cycles, since it's a measure of human emotions swinging from glee to despair and back again, a reason for my longer term bearishness is due to the swing towards despair that we're due for. That will mean a "kick the bums out" response to who's ever in office and we'll see an escalation of anger on a worldwide basis.

The beating that Bush is taking in the UN (regardless of whether you think that's deserved or not) is indicative of more negative things to come. A recommendation for your personal lives is to not let all this make you depressed. It's just a cycle we're going to go through that will take a couple of years to run its course. But it will be negative for the market. "Throw the bums out" usually means "throw the baby out with the bath water" too. And that's why I continue to preach the fact that funnymentals don't matter squat. They'll merely reflect what's already happened in the stock market.

Keene Little : 9/21/2006 2:44:39 PM

One more minor new low could do it for the wave count. Try a long if you dare at the new low.

Marc Eckelberry : 9/21/2006 2:44:17 PM

It could even happen today. We wil see what the boyz have in mind the last hour.

Marc Eckelberry : 9/21/2006 2:43:38 PM

NQ is headed for 1643/1644 by tomorrow.

Jane Fox : 9/21/2006 2:38:22 PM

Here is that MACD divergence. Have to keep your eye on everything don't you. Link

Jane Fox : 9/21/2006 2:37:13 PM

As a matter of fact all markets' new daily lows have higher MACD lows and this is the making of a bottom.

Jane Fox : 9/21/2006 2:36:34 PM

ES's new daily lows although confirmed by the VIX have a higher MACD low. I am out of my long here.

Marc Eckelberry : 9/21/2006 2:36:05 PM

1329.25 is R, ex trendline support 60 mn, see chart.

Marc Eckelberry : 9/21/2006 2:32:42 PM

NQ in yesterday's gap

Marc Eckelberry : 9/21/2006 2:31:55 PM

Fib support right here for SMH at 33.48. WIll it hold?

Marc Eckelberry : 9/21/2006 2:31:28 PM

SMH breaks down under the wedge: Link

Marc Eckelberry : 9/21/2006 2:30:49 PM

ES 60 mn: Link

Marc Eckelberry : 9/21/2006 2:29:14 PM

Key support for ES. Better hold 1327.

Keene Little : 9/21/2006 2:29:13 PM

Getting ready to test the ES 1326.75 level to see if that's all there will be today.

Marc Eckelberry : 9/21/2006 2:28:55 PM

You could be right, Jim. When the house went after Clinton, the markets got hurt initially.

Jim Brown : 9/21/2006 2:26:32 PM

Marc, I have no argument with the market behavior under either party. I was only reporting what the Democrats are planning to do over the remaining two years of Bush's term. The last two of a term are normally bullish for the market but the Democrat plan could derail that historical cycle. Again, not taking sides, just reporting what I have been hearing.

Marc Eckelberry : 9/21/2006 2:25:19 PM

Bulls are in trouble. I guess someone finally noticed thatthe semsi are trading in July territory.

Marc Eckelberry : 9/21/2006 2:24:08 PM

I'm with you Jane.

Marc Eckelberry : 9/21/2006 2:23:37 PM

Check it out ...Despite the behavior of the market during the last Presidential election, over longer periods of time, the stock market has done significantly better under Democratic administrations. The accompanying chart shows stock returns under each occupant of the White House since the beginning of Harry Truman's second term. I have calculated the return from the end of the November election, since stocks will react to the policies of the incoming administration when it is elected, not when it takes office. Link

Jim Brown : 9/21/2006 2:23:17 PM

Jane, nice short on the ES. I think you picked the right spot.

Marc Eckelberry : 9/21/2006 2:20:23 PM

SMH at JUly high..33.50.

Marc Eckelberry : 9/21/2006 2:18:15 PM

I think the market doesn't care anyway. All they care about is yields and where to park money.

Jim Brown : 9/21/2006 2:16:44 PM

Actually, this time around it might not be positive. If they regain control of the house or senate in this election they have already stated they will hold hearings on everything from the Iraq war, 9/11, immigration, drug pricing, taxes, health care reform, etc. They are planning to cause so much uproar over the next two years that the republicans will not have a chance in 2008. Several analysts have said that this process will be very detrimental to consumer sentiment, the markets and the economy. I am not taking sides here but just reporting what I have been hearing.

Marc Eckelberry : 9/21/2006 2:16:49 PM

And as far as any investigations initiated by Congress, we survived the Clinton saga very well with the biggest bull run in histry from mid 98 to early 2000. Besides, the law is the law and if someone broke it, they should be accountable. Or at least, be a little more careful if there is accountability in the house.

Marc Eckelberry : 9/21/2006 2:13:21 PM

Actually, Tab, historically a democratic congress has been fine for the markets, or should I say gridlock is good. When one party controls everything, you have massive government spending. I think our system was designed to function around gridlock. It would be a positive to have a divided executive/legislature. At least we might see some vetoes for a change.

Marc Eckelberry : 9/21/2006 2:10:01 PM

I am making a pledge to never read the financial press again, unless it is for a contrarian take. If you listened to them, you would never buy oil, ever again and load up on stocks. Now look where we are: 61.55, a 1 point jump from yesterday.

Jim Brown : 9/21/2006 2:09:03 PM

Oil catching fire here just before the close of trading. QM to $61.75

Jane Fox : 9/21/2006 2:08:12 PM

I am going short ES here with a stop at 1332.50.

Jane Fox : 9/21/2006 2:06:59 PM

ES is making a double top at is PDHs. Sort of figured it would be hard to get through that resistance. Link

Tab Gilles : 9/21/2006 2:01:32 PM

Key to this market will be the upcoming mid-term election. If the democrats gain control...then all bets are off...that will be pivotal for the markets.

Jane Fox : 9/21/2006 1:53:28 PM

I somehow think it will.

Jane Fox : 9/21/2006 1:53:10 PM

ES is not testing its PDL for resistance. It didn't provide too much support on the way down so the bulls are hoping that it won't be too much trouble on the way up.

Keene Little : 9/21/2006 1:51:03 PM

One reason to think we could just head higher from here is because of the uptrend line that ES tagged to the penny and bounced off (1328.50). An under-throw followed by a rally would get the bears to start covering again.

Keene Little : 9/21/2006 1:49:17 PM

The little bounce off the low is looking corrective but these little bounces have turning into big bounces lately. But if we get another minor low today that will give us a 5-wave move down and it could be either the completion of the pullback from yesterday at 2:00 or just the beginning of the southbound journey.

In the meantime if we get another push lower look for that Fib projection at 1326.75 as a potential place to think about a scalp long play (in case it turns into the next jam to the upside).

Marc Eckelberry : 9/21/2006 1:46:58 PM

ES 60 mns. bulls hold on: Link

Jane Fox : 9/21/2006 1:46:35 PM

* NYSE VOLUME 1.03B
* NYSE HAS 1,300 ADVANCERS
* NYSE HAS 1,876 DECLINERS
* NYSE HAS 146 ISSUES UNCHANGED
* NYSE HAS 70 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 18 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 1.28B
* NASDAQ HAS 1,171 GAINERS
* NASDAQ HAS 1,754 LOSERS
* NASDAQ HAS 138 ISSUES UNCHANGED
* NASDAQ HAS 44 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 36 ISSUES SETTING 52-WEEK LOWS

Marc Eckelberry : 9/21/2006 1:35:24 PM

After September 26th, gold could be up above 600 once again. Needs to get rid of the ECB deadline.

Marc Eckelberry : 9/21/2006 1:33:21 PM

It is important for bulls that the general media turn bearish. If the press continues to say all is fine and it is no big deal, etc... then bulls should worry.

Marc Eckelberry : 9/21/2006 1:22:36 PM

Below that, we retest weekly P

Marc Eckelberry : 9/21/2006 1:21:54 PM

Resistance is 1330.75, 1332.75 and 1335. Support is 1326/1327.50.

Marc Eckelberry : 9/21/2006 1:20:51 PM

Actually, oil performed better. In any case, it was the righ tmove. I did it and I went short ES. I have covered my ES short for now and I'm waiting for a bounce.

Marc Eckelberry : 9/21/2006 1:17:36 PM

The best hedge for anyone long the markets yesterday was to buy gold and to a lesser extent, oil.

Marc Eckelberry : 9/21/2006 1:00:59 PM

Dollar down, oil up and Swiss franc up. That's my trio for being long gold. Support is 587.50, 586, 582 and 580.

Keene Little : 9/21/2006 12:57:36 PM

For ES the Sept 11th uptrend line coincides with its 30-min 100/130 moving averages in the 1328-1329 area. If that breaks then the bulls are in trouble. Last line of defense that I see is a Fib projection for this leg down (if it's part of the pullback that will then lead to another jam higher) at 1326.75. Call me a jaded bear but I don't yet believe this is the start of a sell off.

Jane Fox : 9/21/2006 12:55:14 PM

Please take note that the VIX is now making new daily highs confirming ES's new daily lows.

Marc Eckelberry : 9/21/2006 12:54:13 PM

ES gap is closed. NQ at pivot.

Keene Little : 9/21/2006 12:53:07 PM

The uptrend line for YM, from Sept 11th, is at 11610 so that would be the next support level. Below that, uh oh, could be taps for bulls. But YM 11564 needs to break before we can confirm the ascending wedge is kaput.

Keene Little : 9/21/2006 12:48:48 PM

YM has dropped more than I thought it would in its consolidation. Could it be over? Or are we just going to suck in some more bear fuel for the next jam higher? Should know soon. In the meantime, YM is about to test an old short term downtrend line at 11628 and it's now testing its 30-min 100-pma. If support is to be found, it should be within this area. Link

Keene Little : 9/21/2006 12:43:55 PM

The current sideways consolidation in gold since Sept 15th looks like a perfect little 4th wave consolidation (wave-(iv) on the chart I just posted) so I see nothing bullish here for gold. In fact, short this pop higher today since it should be finishing up the consolidation here.

Keene Little : 9/21/2006 12:36:08 PM

While we're on gold, here's my take on it, strictly from an EW perspective. The wave count that I'm tracking says we've got lower to go--stair-stepping lower towards a Fib projection at $509, perhaps into the end of October before setting up the next rally leg into 2007. Link

Marc Eckelberry : 9/21/2006 12:33:31 PM

NQ still way above that gap, even though SOX and GSO still down. Amazing. A lot has to do with pumping up GOOG, otherwise, it's empty.

Marc Eckelberry : 9/21/2006 12:31:35 PM

Gapclose is 1330.75.

Marc Eckelberry : 9/21/2006 12:31:25 PM

Yesterday's gap open for ES at 1334 is now R.

Keene Little : 9/21/2006 12:24:53 PM

I completely agree with you Marc-stagflation is very likely to happen now. That would be another similarity to the 1970's. So would a stock market drop below the October 2002 low, just like the drop in 1973-74 after making a new high in 1973 after a precipitous drop in 1970. A drop below the October 2002 low would also match the chart of the housing index vs. the S&P 500 (lagged 12 months) that I showed a couple of weeks ago in my market Wrap. For those who may have missed that chart here's an eye opener: Link

I'm waiting for the Acapulco swan dive from here. I believe the significant drop in commodities, such as oil, is about as clear a sign as we can get that we've got an economic slowdown, on a global basis, headed our way. The stock market is not going to like it one bit.

Marc Eckelberry : 9/21/2006 12:19:14 PM

Yes Jane, I am cost averaging into a gold position.

Jane Fox : 9/21/2006 12:19:12 PM

I have been trading many many years and have not found anything as predictive as the VIX and ES combination. Like everything else it does not work all the time but works more often than anything else. Then when you combine the VIX with the AD volume it is like ... well I really like it.

Keene Little : 9/21/2006 12:18:35 PM

I want to see ES 1329 give way and then confirmed with a break below Tuesday's 1322.75 low before I start to get really excited about a short play. I've been slowly legging into some December put options with risk management in mind where I'll puke the whole position at SPX 1350. The top of the ascending wedge from the July low continues to hold ES back and it has a new lower trend line from Sept 11th. It's really beginning to wedge itself into a corner here so it won't be long before we know whether we've got a bonafide breakout in the making or an ending pattern. Link

I strongly believe it's an ending pattern but I'm waiting for price to prove that to me. I've seen enough of these patterns in the past few years break to the upside and therefore am willing to sacrifice a few points to let this prove itself bearish before I lay on a big short position. There will be Plenty of money to make to the downside and therefore we don't need to catch the tippy top (even though that would be nice).

Jane Fox : 9/21/2006 12:16:54 PM

Marc, Gold's MACD and RSI are telling me Gold has made a temporary bottom.

Marc Eckelberry : 9/21/2006 12:16:30 PM

Sure looks like oil found a base.

Jane Fox : 9/21/2006 12:16:12 PM

Here is an excellent example why I love the VIX. Notice when ES retested its daily highs at 11:20, 11:25 and 11:55 the VIX was not retesting its daily lows, like it should have done. Heck the VIX wasn't even anywhere near its lows. That tells you very very clearly ES's daily highs are going to hold. I see this over and over again. Link

Marc Eckelberry : 9/21/2006 12:12:44 PM

They are not idiots and they are responsible. But this is why I think gold is a great tool going forward. Stagflation is upon us, it seems.

Marc Eckelberry : 9/21/2006 12:11:46 PM

Jane, it would have collapsed. At first a spike, then a complete sell-off. If the Feds get scared, you should to.

Jane Fox : 9/21/2006 12:11:12 PM

NYSE DECLINERS OUTNUMBER ADVANCERS 16 TO 15
NASDAQ ADVANCERS OUTNUMBER DECLINERS 14 TO 13

Jane Fox : 9/21/2006 12:09:24 PM

Marc could you imagine what the markets would have done if the FED LOWERED instead of pausing. It would have been fun to watch.

Marc Eckelberry : 9/21/2006 12:09:02 PM

Watch PP at 1335.25.

Marc Eckelberry : 9/21/2006 12:07:45 PM

ES should find support at gap close, 1330.75. But we should get down there.

Marc Eckelberry : 9/21/2006 12:06:57 PM

This could impact oil as well. I am flat QM and waiting for a test of lows to hold, or we will see 60.15, my next entry.

Marc Eckelberry : 9/21/2006 12:08:18 PM

The economy is falling apart at the seams. No wonder Feds are not raising. I fact, they would like to lower, but that would freak out the markets.

Keene Little : 9/21/2006 12:03:57 PM

That brief spike higher was another example of some big money selling into at as it now drops hard back down. But again, this leg down could be the last one within the sideways consolidation (a-b-c-d-e count is complete) so don't get suckered in short here, not yet anyway.

Jane Fox : 9/21/2006 12:03:18 PM

SEPT. PHILLY FED NEW ORDERS -1.3 VS. 30.9 IN AUG

Jane Fox : 9/21/2006 12:03:01 PM

SEPT. PHILLY FED INDEX FIRST NEGATIVE SINCE APRIL 2003

Jane Fox : 9/21/2006 12:01:55 PM

Opps Market didn't like the Philly Fed.

Marc Eckelberry : 9/21/2006 12:01:44 PM

ES at PP.

Marc Eckelberry : 9/21/2006 12:01:34 PM

Funds saw that NDX was sold at 2006 open and they are cashing in.

Jane Fox : 9/21/2006 12:01:30 PM

* SEPT. PHILLY FED WELL BELOW CONSENSUS 14.3
* SEPT. PHILLY FED -0.4 VS.18.5 IN AUG.

Marc Eckelberry : 9/21/2006 12:01:06 PM

Finally, some reason prevails.

Marc Eckelberry : 9/21/2006 12:00:46 PM

SMH lost 200 day ema support at 34.25 and is struggling to hold 34. How can this rally last without the semis? I know I keep pounding this, but someone has to...I get so sick of hearing in the press this rally was backed by the semis. IT WAS NOT or I would be long with everything I've got.

Marc Eckelberry : 9/21/2006 11:56:52 AM

A lot depends on QM holding 61.

Jane Fox : 9/21/2006 11:55:06 AM

Well the bears had their chance and they blew it, the bulls are back in the drivers seat.

Marc Eckelberry : 9/21/2006 11:54:02 AM

Watch QQQQ 40.68, 50% projection August. Above that, 61.8% at 40.03 is formidable resistance. But bulls need to get 40.68 first and soon: Link

Marc Eckelberry : 9/21/2006 11:43:00 AM

Nice drop now that QM is back above 61.25. No one believes an oil rally can come. Well, it can.

Jeff Bailey : 9/21/2006 11:40:19 AM

Speaking of C ULATER ... I have to get going. House inspection and closing.

See you after the close.

Jeff Bailey : 9/21/2006 11:38:45 AM

Broker/Dealer Index (XBD.X) 228.57 +0.87% ... After a C wave is broken ... what comes next? U LATER?

Keene Little : 9/21/2006 11:36:16 AM

If the sideways consolidation is going to lead to more upside then one more pullback, staying within the range of the consolidation, should do it and then proceed higher from there. So if you want to try a long play, look for an entry on the next pullback and place your stop below yesterday afternoon's pullback low. Or buy a break out above today's last high.

A possibility here, if this is indeed the last leg up as I believe, is that we'll chop our way higher rather than see another jam to the upside. That would tell me there's distribution going on and we should be doing the same if long this market. It's too early to tell about that but it would be fitting--big money likes to hold the market up while selling a little more each time it gets pushed higher (with the help of short covering).

Jeff Bailey : 9/21/2006 11:36:11 AM

Tsy Nominee Steel: Current US Govt Debt `Manageable'

DJ- The current level of U.S. government debt is "manageable" compared with both historic standards and the size of the economy, Robert Steel, nominee for the Treasury Department's top domestic finance post, said Thursday.

The current ratio of U.S. government debt to gross domestic product compares well with other members of the Group of Seven wealthy industrialized countries, Steel said in response to a question at his nomination hearing before the Senate Finance Committee.

Last month a senior Treasury official projected that the U.S. government may hit its current $8.965 trillion legal debt limit some time between March and September next year. Congress last approved an increase in the debt ceiling in March, lifting it by $781 billion to $8.965 trillion after Treasury spent several weeks using alternative financing to avoid exceeding the limit.

Sen. Max Baucus, D-Mont., ranking minority member on the committee, remarked that Steel's responsibilities, if he is confirmed, would include "the grim task" of recommending when Congress will have to raise the debt limit again. Baucus noted that the debt limit has risen about 50% over the past six years.

Steel also played down concerns about rising foreign holdings of publicly traded U.S. government debt, arguing it is a sign of healthy demand for the securities.

"While there are attendant risks potentially, I see it overall as a positive," he said.

Marc Eckelberry : 9/21/2006 11:36:55 AM

So let me see. The Feds did what everyone thought they would as we rallied for 2 1/2 months into it. WMT is warning of a falling economy, core cpi is at 2.3%, oil is starting to forge a bottom, NDX can't get above 2006 open, SOX and semis have been lagging in this rally and SPX is still in a monster bearish ascending wedge and we are near 5 year highs. What is the good news, aside from "it should go up"? I am like Keene, scalp long only, don't get married to this market especially below NDX 1654.50 and tray to find a solid short entry by nibbling here and there.

Tab Gilles : 9/21/2006 11:35:05 AM

MM Open Positions and Watch List Link

Marc Eckelberry : 9/21/2006 11:31:51 AM

NDX stalled at 2006 open. Exactly.

Marc Eckelberry : 9/21/2006 11:30:43 AM

INTC better hold 19.35.

Jeff Bailey : 9/21/2006 11:29:58 AM

I would "hope" by now that traders/investors that have followed my commentary over the years would know what I want to say and point out so badly.

Marc Eckelberry : 9/21/2006 11:29:19 AM

QM breakout above 61.25 resistance and that should calm down equities. But who knows.

Jeff Bailey : 9/21/2006 11:26:35 AM

NASDAQ 100 Heatmap Link

Marc Eckelberry : 9/21/2006 11:24:57 AM

Aside from the post fed noise and jiggling around, the news with WMT is indicating a seriously slowing economy. The fact that the Feds are not raising rates when core cpi is the highest it has been in a very long time, tells me they are very worried. Of course, that trade is not here yet, but you can bet many funds are lightening up on every rally while they show up on CNBC and tell you to buy. Just be careful, Keene is right. But be smart and look at the bigger picture: the economy is slowing down to the point that earnings could be affected.

Jeff Bailey : 9/21/2006 11:22:22 AM

11:00 Internals found at this Link

Marc Eckelberry : 9/21/2006 11:18:34 AM

GSO and SOX down, yet we move higher. As I said, hedge funds are chasing and they know how to do it with select issues.

Keene Little : 9/21/2006 11:09:23 AM

I'm back. It's amazing how well this market is being held up. There's certainly big money that does not want to see this market pull back and get away from them. The sideways consolidation since yesterday morning appears bullish but as I mentioned earlier I wouldn't want to go long now. Maybe quick scalps if you can watch it minute by minute but I'm worried that a downside surprise is right around the corner. Having said that, there's the potential for another 18 SPX points from here if 1345 is the target. I'm not sure enough about that to recommend a long play. Twiddling one's thumbs is not a bad way to go right here.

Jeff Bailey : 9/21/2006 11:06:30 AM

Baker Hughes (BHI) $64.09 +2.29% Link

Jeff Bailey : 9/21/2006 11:04:11 AM

Energy Select SPDR (XLE) $51.923 +2.02% Link

Marc Eckelberry : 9/21/2006 11:02:40 AM

As for QM, it needs a break above 61.25, or it will test weekly S2 at 60.15, which is a new target entry. Gold is holding 580, but it is entirely dependant on QM now.

Jeff Bailey : 9/21/2006 11:02:38 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 9/21/2006 11:01:08 AM

If short ES, your stops should be at 1338.25. Just be aware that hedge funds are under tremendous presure to get performance after the losses in energy, so they can run stops and retest overnight highs. Other than that, short is the way to be for now. It is a mickey mouse market, so careful. Eventually, it will fall into place.

Tab Gilles : 9/21/2006 10:59:46 AM

Energy Select Spyder (XLE) Entered this morning at $51.50 @ 10:30AM. Link

Marc Eckelberry : 9/21/2006 10:57:45 AM

They are quoting the full contract CL. As far as we are concerned, we quote the e-mini, which is QM and it is trading November and upward only.

Marc Eckelberry : 9/21/2006 10:55:45 AM

QM found resistance at PP 61.25. I have scalped in and out of that position. I'm now flat QM.
SOX/SMH down, any rally in equities should be short-lived as long as ES stays in the wedge. ES has risk to 1330.75.

Jeff Bailey : 9/21/2006 10:53:41 AM

Newtworking Index (NWX.X) 235.59 +1.04% ... just now bumping against its 50% retracement from March relative high close to recent July low closes.

Jeff Bailey : 9/21/2006 10:47:44 AM

They may have "rolled" to November contract after yesterday's October expiration for Crude Oil.

However Jane, as you and I pointed out in prior sessions, it is still VERY important for traders to have monitored the October Crude contract and Open Interest into its expiration.

Jane Fox : 9/21/2006 10:44:22 AM

But the news wires (10:32 post) are saying Oct to new lows. HMMM!

Jeff Bailey : 9/21/2006 10:43:13 AM

Jane ... October contract does NOT look to have traded new lows.

Jeff Bailey : 9/21/2006 10:42:24 AM

NYMEX showing Nat. Gas. (Nov) at new yearly lows Jane.

Traders using TS may want to check their accounts.

Jane Fox : 9/21/2006 10:36:23 AM

And I trust TS's data intregrity more than any.

Jane Fox : 9/21/2006 10:35:38 AM

My TS charts do not show Nat Gas to a new yearly low. Link

Jeff Bailey : 9/21/2006 10:34:23 AM

Children's Place (PLCE) $60.91 +1.48% Link

Jeff Bailey : 9/21/2006 10:32:39 AM

Gymboree Boosts Q3 Earnings Outlook

DJ- Boosted its third-quarter earnings view to a range of 53 cents to 55 cents a share, ahead of its earlier view of 43 cents to 45 cents a share. The retailer cited an expected same-store sales percentage increase in the low double-digit range.

GYMB $41.27 +6.69% Link ... new 52-weeker today.

Jane Fox : 9/21/2006 10:32:04 AM

* NATURAL GAS SUPPLY UP 93 BLN CUBIC FEET: ENERGY DEPT.
* OCT. NATURAL GAS FALL TO A 2.5-YEAR LOW OF $4.75/MLN BTU
* OCT. NATURAL GAS LAST DOWN 15.1 CENTS AT $4.78

Jeff Bailey : 9/21/2006 10:29:15 AM

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

Jane Fox : 9/21/2006 10:27:23 AM

If you trade Natural Gas remember inventories come out on Thursday at 10:30EDT.

Jane Fox : 9/21/2006 10:26:40 AM

WASHINGTON (MarketWatch) -- A leading gauge of the U.S. economy fell for the fourth time in the past five months in August, suggesting continued moderate growth through the end of the year, the Conference Board said Thursday.

The index of leading economic indicators fell 0.2% in August for the second straight month, the independent research group said.

Economists were expecting the 0.2% decline, according to a survey conducted by MarketWatch.

The recent decline in gasoline prices should offset some of the drag from "the sharp cooling" in the housing market," said Ken Goldstein, labor economist for the group. With profits slowing, "all this suggests the economy is going to remain slow."

The message from the leading indicators is: "Continued modest growth this autumn -- probably right through the holiday season and into the winter," Goldstein said.

The index is based on 10 indicators that typically lead growth.

Jane Fox : 9/21/2006 10:24:01 AM

Here is YM's bearish wedge confirmed by the MACD and RSI. THis was the chart Keene was talking about yesterday. Link

Jeff Bailey : 9/21/2006 10:22:54 AM

Western Digital (WDC) alert $17.50 +1.33% Link ... see 09/18/06 MM Post

Jane Fox : 9/21/2006 10:21:32 AM

Here is the ES 240 minute chart which shows the bearish wedge and confirmed by the bearish MACD and RSI. I like to see this formation on the daily before I get too bearish but the 240 will do for now. Link

Jeff Bailey : 9/21/2006 10:20:50 AM

Hewlett-Packard (HPQ) $35.28 -4.07% Link ... would be a major blow if HP lost Mr. Hurd.

Jeff Bailey : 9/21/2006 10:19:24 AM

HPQ's Hurd to hold press conference on scandal

Market Watch Story Link

Jane Fox : 9/21/2006 10:16:45 AM

Sure enough Oil is starting another down turn and breaks its ON low and tests its PDL.

Jeff Bailey : 9/21/2006 10:16:14 AM

Boeing (BA) $76.96 +1.00% Link ... challenging correlative 50-day SMA and 200-day SMA.

Jeff Bailey : 9/21/2006 10:14:38 AM

Emirates May Cancel ig Airbus Order

AP Story Link

Jane Fox : 9/21/2006 10:14:16 AM

The bearish VIX and AD volume should be enough to overcome the TRIN but it is a worry to us bears.

Jane Fox : 9/21/2006 10:13:07 AM

The only fly in the bearish ontiment is the TRIN which is testing daily lows and at 0.80.

Jane Fox : 9/21/2006 10:06:13 AM

Expect to find support at PDLs. Link

Jane Fox : 9/21/2006 10:05:12 AM

NYSE DECLINERS OUTNUMBER ADVANCERS 15 TO 13

NASDAQ DECLINERS OUTNUMBER ADVANCERS 13 TO 11

Jane Fox : 9/21/2006 10:04:13 AM

AD line now -207 and AD volume making new daily lows although still above 0. VIX to new daily highs and the bears have grabbed the ball. I wonder how long they will be able to hold on to it.

Jeff Bailey : 9/21/2006 10:02:52 AM

10:00 Market Watch found at this Link

Jane Fox : 9/21/2006 10:00:23 AM

AD line is now below 0 at -36.

Jane Fox : 9/21/2006 9:59:15 AM

TRIN at 0.83 and not moving is not confirming the move from bullish to neutral.

Jane Fox : 9/21/2006 9:58:01 AM

VIX is making new daily lows as the AD volume is falling. AD line is not a neutral +118. All bullish bets are off.

Jane Fox : 9/21/2006 9:47:01 AM

TRIN opens within its PDR but VIX below although it has returned back to its PDR - this are bullish as well.

Jane Fox : 9/21/2006 9:41:56 AM

AD line is a bullish +823, not as bullish as yesterday morning but still bullish. AD volume is climbing.

Jane Fox : 9/21/2006 9:25:37 AM

Data showed that weekly jobless claims rose by 7,000 to 318,000, though the four-week average of continuing claims hit its lowest level in a month.

Jane Fox : 9/21/2006 9:04:27 AM

I wonder if this is why the DELL chart remains so bearish even though the overall market is bullish.

Jane Fox : 9/21/2006 9:03:37 AM

Dell Inc. (DELL) plans to request a hearing before a Nasdaq Listing Qualifications Panel after being notified it isn't in compliance with the filing requirement for continued listing on the exchange.

The world's largest computer maker said Thursday its shares will remain listed on Nasdaq, pending a decision by the panel.

The Round Rock, Texas, company said on Sept. 11 it would delay filing its Form 10-Q for the second quarter ended Aug. 4, because of an informal investigation by the Securities and Exchange Commission, as well as a probe by the U.S. Attorney for the Southern District of New York, of its accounting practices.

Dell subsequently launched an independent investigation by its board's audit committee.

Jane Fox : 9/21/2006 9:00:14 AM

Oil was not able to make any kind of bullish move overnight and just limped along sideways. I have seen this kind of overnight action many many times in the last few weeks and it has always lead to lower lows. If you are long Oil I would suggest bailing.

TBonds had a very neutral day yesterday, even though we had a FED decision and to cap it off had a neutral overnight session as well.

Natural Gas tagged its yearly lows overnight to make a double bottom. I see neither a MACD nor RSI divergence on the daily charts but I do see that divergence on the 240 minute chart, which I will show later.

Gold has a 10 point spread overnight with higher highs and lows. I see some major MACD and RSI divergences on Gold's daily chart so it may be pounding out a bottom. Link

Jane Fox : 9/21/2006 8:49:29 AM

Good morning. All equity markets broke their respective PDHs overnight, albeit ES's break was by 1 tick but heh it's still a break. I was surprised yesterday was not more bullish because the internals were so strong but the FED interest rates decisions always puts a dampener on trading. Link

Keene Little : 9/21/2006 8:20:52 AM

Futures got a nice lift after the European markets opened, reaching a high around 7:00 AM that tested yesterday's high. I expected a pullback from that high at a minimum but if it continues higher today then that little micro pullback yesterday afternoon will be it and the Boyz' signature will be all over this one again--jam it higher and allow only small pullbacks. That would suggest a run up to SPX 1345 sooner rather than later.

But until it pushes higher today I would not want to go long the market here. Just looks too vulnerable (which may be why it continues higher if the bears keep trying to short this and forced to cover). I'll be away from the market for the 1st hour or so which will hopefully provide some good clues for the rest of the day.

Marc Eckelberry : 9/21/2006 4:02:47 AM

Initial target reached on QM long at 61.25 (from 60.675).

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