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Tab Gilles : 9/27/2006 12:54:09 AM

Open Positions & Watch List Link

Added a new stock to the watch list, Exploration Co, (TXCO) Link Link

$NDX continues to climb. Link

$NAHL/$NDX weekly w/10-ema Link

Daily $NDX Link


Profund UltraOTC (UOPIX) Link Link Link

Keene Little : 9/26/2006 11:13:29 PM

In the category of "what's wrong with this picture", the discussion about the stock market rallying after the Fed decided to pause in their interest rate hikes, I found some more interesting data. Peter Eliades at stockmarketcycles.com used data from Ned Davis Research and pointed out that since the Fed was created in 1913 they've raised rates to 6% (the discount rate) only 8 times including the most recent one. All previous 7 times were then followed by a significant market decline. It could of course be different this time but I'm thinking not.

It's a little hard to read this chart, courtesy Dr. Robert McHugh at technicalindicatorindex.com, but it shows the resulting market decline after each of those 7 times. Not specifically pointed out is the fast drop and recovery in 1987. This record of market declines following a rate increase to 6% is in keeping with the little discussed fact that the market is consistently lower 6 and 12 months following the time the Fed pauses their interest rate hikes. Link

This doesn't help us enter a trade here but it does show the significant declines that the market has suffered due to these rate changes. If a 30% decline in the market is going to be a "soft landing" then I guess that's what we're going to get. Be sure to strap on your bubble-wrap bum protector for that soft landing.

Jeff Bailey : 9/26/2006 10:52:38 PM

Suspected Human Bird Flue Case At Sydney Airport

DJ- Australian health authorities are investigating a suspected case of avian influenza after an ill passenger arrived at Sydney Airport earlier Wednesday.

The New South Wales state government's health department said the person had traveled from Vietnam and has a recent history of being in an area with chickens and having a previous influenza-like illness.

"This person has been taken to a Sydney hospital for routine medical assessment," NSW Health said in a statement.

"Health experts believe it is very unlikely that the diagnosis will be avian influenza."

NSW Health's Director of Communicable Diseases, Dr Jeremy McAnulty, will hold a media briefing at 0130GMT today.

Jeff Bailey : 9/26/2006 10:50:51 PM

Hmmm... BCRX $11.35 +10.62% today ... as I type I see DJ headline "Suspected Human Bird Flu Case At Sydney Airport"

Jeff Bailey : 9/26/2006 10:37:20 PM

MM Traders will want to keep an eye on the DAX Link as bulls look to be putting together a "special brew" for Oktoberfest.

Jeff Bailey : 9/26/2006 10:34:35 PM

Hang Seng ($HSI) awaiting trade after Tuesday's "Biggest 1-day fall in weeks" Reuters Story Link

Hang Seng ($HSI) PnF chart Link

Jeff Bailey : 9/26/2006 10:31:59 PM

Nikkei climbs 1.7% as Canon, SMFG gain ground ... Reuters Story Link

Nikkei-225 ($NIKK) PnF chart Link

Keene Little : 9/26/2006 10:16:11 PM

Wednesday' pivot tables: Link and Link

OI Technical Staff : 9/26/2006 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 : 9/26/2006 8:50:15 PM

"Crazy Train" SPX chart from 09/20/06 after FOMC at this Link (see 09/20/06 MM) Link at 09:48:26 PM

Now that's an upward "resistance" trend Link

Software and "info tech" will likely be the next key!

Jeff Bailey : 9/26/2006 7:24:22 PM

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

Today's Activity

Swing trade bearish put stopped on the one (1) Baker Hughes BHI Nov $60 Puts (BHI-WL) at the bid of $1.55 when the underlying shares traded $65.15. ($-0.85, or -35.42%)

Swing trade bearish stopped on the 1/2 position short in the iShares Silver (AMEX:SLV) at $114.15. ($-9.38, or -8.95%)

Swing trade closed out the one (1) Children's Place PLCE Dec $60 Calls (TUY-LL) at the bid of $6.50 ($+2.50, or +62.50%)

Swing traded long 1/2 position in the U.S. Oil Fund (AMEX:USO) at the offer of $56.01. Stop=$54.50 : Target= $61.75.

Swing traded long one (1) of the Sap Ag SAP Nov $47.50 Calls (SAP-KR) at the offer of $3.40. Stop= $46.00 : Target= $53.00.

** Traders that may be long the Overstock.com OSTK Oct. $20 Calls (QKT-JD) please have at least a partial position sell order placed with your broker at $2.40. Today's trade from $18.50 to $20.42 took place over 2-minutes.

Jeff Bailey : 9/26/2006 5:59:47 PM

Purdue University Study (Robert Earl Davis):

In a bull market condition the triple top formation was shown to be profitable 87.9% of the time, for an average gain of 28.7% in 6.8 months.

Jeff Bailey : 9/26/2006 5:41:31 PM

Keene : I like the "small jabs" in my side. Keeps me on my toes.

However, "the gloves came off when it traded $158" Link (see MM 09/12/06 @ 11:46:51 AM EDT) Link

Jeff Bailey : 9/26/2006 5:24:41 PM

Closing Internals found at this Link

Marc Eckelberry : 9/26/2006 5:20:48 PM

If NQ holds 1673, it could see a pop to 1680.

Keene Little : 9/26/2006 5:13:25 PM

Interesting look at the VIX. The pattern in the VIX can be "traded" just like any other symbol since the direction of the VIX is also a reflection of human emotion, which is what EW patterns measure. It is in a descending wedge while the OEX is in an ascending wedge. This pattern would look complete with a new low in the VIX, so sub-10. Talk about scary if it gets there! Link

Each move down inside this wedge is a 3-wave move (as it should be in a wedge) and there should be 5 major moves. The leg down from the high in early September is the 5th wave. Therefore, looking at this chart I'm expecting a move lower (so higher equity prices) and we could even see an under-throw which of course would be the sub-10 move.

But then we should get a relatively fast retracement of the wedge, so a VIX back above 24 in less time than it took to drop from there in June. And of course that would mean equities dropping below their June lows in the same time frame. Oh, and that would be true for XBD as well--small jab in Jeff's side :-).

Keene Little : 9/26/2006 4:54:34 PM

Jeff, I'm playing the major indices but had I bought puts on XBD I would have stopped out on the new high above 226 after it pulled back and tested the top of what looked like the ascending wedge on Sept 19th. That's what I had suggested when it pulled back--if the top of that wedge held the retest and climbed to new highs then you wanted to be out of bearish plays. I'm not sure you caught that posting of mine.

I've been waiting for the next bearish play to set up since I believe it's too dangerous to go long. Today is a nice setup for the short side but I don't like bearish plays for this week. If the brokers pull back a little and then give us another minor new high with lots of bearish divergences, I'd be all over that one and I'll call out bearish plays at that time (it would complete the wave count for the small ascending wedge in play since the pullback on the 19th. In fact I'd be salivating on that kind of setup.

Right now it's vulnerable but a pullback and another new high would make it too tempting not to short. Join me then as I'm sure the water will be fine.

Jeff Bailey : 9/26/2006 4:45:55 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/26/2006 4:36:53 PM

Have you stopped out of the XBD.X puts yet?

Keene Little : 9/26/2006 4:36:14 PM

Ah yes, isn't all technical analysis really just a subjective art. That's why we use stops.

Jeff Bailey : 9/26/2006 4:35:42 PM

Oh... I see.

I'm glad you're at least ignoring me regarding the brokers.

It's "twooo!" .... I don't understand EW patterns. It never made sense to keep drawing trends to keep capital in a trade that went wrong in the first place. Very much an art.

Keene Little : 9/26/2006 4:34:36 PM

BTW Jeff, the bottom of the flag for XBD is now near 211 so hopefully you'll still get your pullback to try a long play. I assume you weren't able to get long since neither one of us got the pullback we expected. Maybe next week?

Keene Little : 9/26/2006 4:31:19 PM

Yes Jeff, it turns out it's a parallel up-channel (bear flag) instead of that ascending wedge. That's what we of course need to watch for with these patterns--as we all know, they tend to morph into something else. Unfortunately for bulls I still see the current pattern as a very good bearish setup (as per my previous two posts). And don't worry, I simply ignored your CU later comment as something from someone who doesn't understand EW patterns ;-).

Jeff Bailey : 9/26/2006 4:25:43 PM

Keene ... should I throw this XBD.X chart away then? Link

I left off my CU LATER counts.

Jim Brown : 9/26/2006 4:12:36 PM

FBR said positive things about gas stocks intraday. They recommended DVN, XTO and CNX.

Jeff Bailey : 9/26/2006 4:10:36 PM

October Nat. Gas really turned around to its daily settlement. Actually settled up $0.051 at $4.526. October contract settles tomorrow.

Jane Fox : 9/26/2006 4:10:01 PM

Here is the headlines from the WSJ -
Dow Nears Record Territory
September 26, 2006 3:21 p.m.
Upbeat reports on consumer confidence and regional manufacturing pushed stocks higher Tuesday, elevating the Dow Jones Industrial Average to within striking distance of its all-time high.

The Conference Board said its monthly survey of consumer confidence rose to 104.5 from 100.2 in August, slightly above expectations for a reading of 102.7. And the Richmond Federal Reserve's manufacturing index for September rose to nine from six in August, offsetting concerns sparked last week by a soft manufacturing report from the Philadelphia Fed.

The Dow industrials recently gained 78.05 points to 11653.86, within about 70 points of their all-time high of 11722.98 set in January 2000. A close at this level would be the blue-chip average's second-highest close ever, surpassing the previous mark of 11645.45 set on May 10 this year.

Jim Brown : 9/26/2006 4:06:25 PM

QM starting to find a bid and $61.20 resistance is being tested.

Jane Fox : 9/26/2006 4:05:29 PM

Economic Reports for tomorrow include:

8:30a.m. Aug Durable Goods Orders. Previous: -2.5%.

10:00a.m. Aug New Home Sales. Previous: -4.3%.

Keene Little : 9/26/2006 4:04:59 PM

I like this chart even better for XBD--I drew in a parallel up-channel to show how it's about to tag the top of the channel while tagging to top of its little ascending wedge. I love setups like this one and would short it in a heartbeat if I weren't worried about the false propping this week. Link

Jim Brown : 9/26/2006 4:04:47 PM

Some funds trying to hold on to their winners until the new quarter begins on Monday will now start to hedge their risk against window undressing by shorting futures later in the week. Watch for futures volumes to increase as the week progresses.

Marc Eckelberry : 9/26/2006 4:03:56 PM

In fact, it is mostly the enerygy sector.

Marc Eckelberry : 9/26/2006 4:04:29 PM

SPX up .75%, DOW up .80%, QQQQ up .39%, GSO up .14%, BIX up .35%, SOX down .30%. The strength is not coming from techs or financials.

Keene Little : 9/26/2006 4:02:24 PM

Speaking of XBD, it is now up to its broken uptrend line from May-October 2005, right here at its closing price. And its 240-min chart doesn't support the new highs. As I said, this market is full of charts that look like this. Some serious buying needs to kick into gear to negate all these bearish divergences. Link

Jeff Bailey : 9/26/2006 3:58:08 PM

QQQQ $40.75 +0.44% ... isn't a broker or a bank in the bunch.

Keene Little : 9/26/2006 3:57:15 PM

Speaking of the Trannies, the 200-dma is at 4475 and this moving average has stopped every bounce since the 200 was broken in July. This test, if it fails again, will leave another negative divergence. But so what else is new.

Jeff Bailey : 9/26/2006 3:55:57 PM

XBD.X 230.37 +1.07% ... yep ... same setup as May. Except for one major thing ....

Keene Little : 9/26/2006 3:54:37 PM

If they'll be able to drive the DOW to new all-time highs in order to get the bullish press response they'll need to hand off inventory to the sheep, then all they need to do is ramp the Trannies back up from 4455 to above 5014 so as to avoid another bearish non-confirmation. That would only be a 12.5% rally from here. With such a bullish economy in front of us (cough) that should be a piece of cake.

Jeff Bailey : 9/26/2006 3:52:40 PM

Looking for any news on the "naked short" decision, but not seeing any.

OSTK $19.00 +3.03% ...

Marc Eckelberry : 9/26/2006 3:47:56 PM

My best guess now is that they want DOW 11750, all time high. You might wonder how we can hit an all time high without techs and commodities, and ahead of a a slowdown, well join the club.

Keene Little : 9/26/2006 3:45:44 PM

Jane I still show MACD and RSI not having climbed back up to their previous highs. Negative divergences continue on my charts. I use MACD 8,13,5 and RSI 10 for a faster response.

Marc Eckelberry : 9/26/2006 3:46:26 PM

This nonsense about housing having found a bottm. Any excuse to drive it up.

Marc Eckelberry : 9/26/2006 3:46:16 PM

They are driving it up buying all the big "safe" guys. But those stocks are trading already at multiples that do not justify a slowing economic background. There is no real safety in those stocks. This could get heavy soon.

Jim Brown : 9/26/2006 3:42:55 PM

It is always brightest just before the crash. The previous week with this exact setup was May 8-10th.

Jeff Bailey : 9/26/2006 3:42:26 PM

C'mon you piece of garbage! (Note: Historically, when I talk "bad" about a stock, it gets a move on.)

Jeff Bailey : 9/26/2006 3:41:52 PM

Overstock.com (OSTK) alert $20.11 +9.05% ...

Jane Fox : 9/26/2006 3:41:16 PM

MACD and RSI are making higher highs on ES's 240 minute chart as well. Bears did not want to see this.

Jane Fox : 9/26/2006 3:38:55 PM

Keene so much for our bear wedge theory.

Keene Little : 9/26/2006 3:36:41 PM

Look new highs! What a surprise. ES is now pressing above the top of its wedge so bulls will need to hold this above otherwise it will look too much like a throw-over. If this keeps heading higher I'll be one of those who look at it wondering why I didn't buy. But if I buy it I know I'll be the last one before the bottom falls out. I will always have my stop to protect against a big loss but I just don't feel like playing their game. That's the beauty about our job--we get to decide when we want to play.

Jim Brown : 9/26/2006 3:36:27 PM

I hope everyone is watching the Russell futures up a whopping +2.70 at 735.40. The Russell is lagging the big cap markets significantly and for me this is a prime indicator that we are going down hard next week if not before. The fund managers are doing their best to paint the tape for their end of quarter statements and doing an excellent job with the big caps. Unfortunately the small caps are the anchor and once this tape painting ends they will be the first to tank. Friday is the end of the quarter and the funds are going to have their work cut out for them to keep the indexes positive for three more days.

Jane Fox : 9/26/2006 3:31:26 PM

TICKs +1000 - 1353 here we come!

Marc Eckelberry : 9/26/2006 3:30:36 PM

They will hit 1348.

Marc Eckelberry : 9/26/2006 3:30:29 PM


Marc Eckelberry : 9/26/2006 3:26:12 PM

1335.05 is high.

Marc Eckelberry : 9/26/2006 3:25:32 PM

They are hitting SPX 1335. Bulls rule for now.

Marc Eckelberry : 9/26/2006 3:23:23 PM

SPX has lost that bid to 1335 for now and short below seems the play. Stop conditonal SPX 1335.25 if you are buying SPY puts.

Marc Eckelberry : 9/26/2006 3:21:20 PM

Again, ES 1347 to 1350 will be a huge wall, but will they get us there? This is always impossible to time so you have to nibble, which is what I am doing.

Jeff Bailey : 9/26/2006 3:20:23 PM

03:10 Internals found at this Link

Marc Eckelberry : 9/26/2006 3:20:12 PM

NQ was by far the better short. and I might stick with that.

Marc Eckelberry : 9/26/2006 3:19:55 PM

I might close it here and wait for 1648.

Jane Fox : 9/26/2006 3:19:31 PM

SPX has broken to new 5 1/2 year highs and I think ES could as well. Those highs are 1353.25 so keep that in mind.

Marc Eckelberry : 9/26/2006 3:17:51 PM

I would not consider it if the SOX wasn't lagging.

Marc Eckelberry : 9/26/2006 3:16:45 PM

I'm short at 1344.75 and I am lining up orders at 1347 and 1348, all stops at 1352. I am going wide and playing monthly R2 just like in August of 2005. Same set up. Not for everyone, but I like the odds.

Jeff Bailey : 9/26/2006 3:12:32 PM

03:10 Market Watch found at this Link

Marc Eckelberry : 9/26/2006 3:09:53 PM

SPX 1335 is now the big guy to take out.

Jane Fox : 9/26/2006 3:08:48 PM

Here come the buyers again TICK +1000.

Marc Eckelberry : 9/26/2006 3:07:27 PM

SPX up 7% for the year.

Keene Little : 9/26/2006 3:04:31 PM

The market keeps pressing to minor new highs while negative divergences continue. This can continue but it sure doesn't get me to feeling bullish here. Just need to wait for this nonsense to end this week. I don't want to buy it because it's hard to say when the support leg will get kicked out from under it. Surprises could be nasty to the downside. Just not worth it. There are better times to trade.

Marc Eckelberry : 9/26/2006 3:04:37 PM

AMD, NVDA, MU down. SOX is still red, but SMH is up thanks to INTC and TXN. They are showing the big guys in the books but getting out of the high flyers just in case.

Marc Eckelberry : 9/26/2006 3:01:54 PM

Always minimize cost if you can.

Marc Eckelberry : 9/26/2006 3:01:24 PM

+1 partial.

Marc Eckelberry : 9/26/2006 3:00:21 PM

Now we see if it is really that or just a pause up to ES 1348/1350. If you are back in, stops stay tight.

Marc Eckelberry : 9/26/2006 2:59:37 PM

Yep, that looked like some resistance. Here is the chart and that 61.8% fib: Link

Marc Eckelberry : 9/26/2006 2:56:24 PM

SPX 61.8% August projection is 1334.82 and was our exact high. I am re-enetring short ES at 1345, but that's me. Just a uqucik scalp to see if that fib holds.

Marc Eckelberry : 9/26/2006 2:53:18 PM

Big jump for ITC and the buls are back. The big guys stepped in at the close.

Marc Eckelberry : 9/26/2006 2:51:10 PM

Gunning for 1348/1350 where this rally should top out.

Marc Eckelberry : 9/26/2006 2:50:45 PM

Back. stopped out -2. SMH is now green.

Jeff Bailey : 9/26/2006 2:47:42 PM

Oracle (ORCL) $18.20 +1.27% ... set to challenge post-earnings high.

Jeff Bailey : 9/26/2006 2:44:43 PM

Bullish swing trade long alert ... for one (1) of the Sap Ag SAP Nov $47.50 Calls (SAP-KR) at the offer of $3.40. $3.20 x $3.40

SAP $49.17 +0.88% ...

Jane Fox : 9/26/2006 2:31:24 PM

TICKS +1000

Jane Fox : 9/26/2006 2:30:55 PM

I think we will see a bullish EOD.

Jeff Bailey : 9/26/2006 2:29:25 PM

Bullish swing trade call option close alert ... for the Children's Place PLCE Dec. $60 Calls (TUY-LL) at the bid of $6.50.

PLCE $63.23 +0.76%

Jane Fox : 9/26/2006 2:27:06 PM

TICKS +800

Marc Eckelberry : 9/26/2006 2:26:09 PM

Steppig away. This is a risky trade, so get out now if you don't like it. Resistance is 1343.50.

Marc Eckelberry : 9/26/2006 2:21:29 PM

Take + 1 partial, leave stop at 1345 on remaining.

Marc Eckelberry : 9/26/2006 2:20:15 PM

Somoene just dropped a pile of contracts

Marc Eckelberry : 9/26/2006 2:19:51 PM

-800 ticks, Well what do you know.

Jeff Bailey : 9/26/2006 2:19:24 PM

U.S. House Rejects Democrat's Motion For Closed Session On Terror

Marc Eckelberry : 9/26/2006 2:18:50 PM

Putting my stop back up at 1345. Others might want a more conservative and tigher stop or just stay out because anything can happen, especially if QM loses 61 again. I want a short goinginto the first week of October. 1348 would have been better, and maybe that is where we are headed, but we could back and fill for a day.

Marc Eckelberry : 9/26/2006 2:16:26 PM

Scalp it, don't love it.

Marc Eckelberry : 9/26/2006 2:15:39 PM

The ES high was 23.6% projection last week.

Marc Eckelberry : 9/26/2006 2:13:42 PM

Lower stop to 1344.25, no sense in getting hurt. I was waiting for 1348, but this might be an entry if oil holds up.

Marc Eckelberry : 9/26/2006 2:12:15 PM

I will never trust new highs with a bearish divergence on all the time frames. If I'mwrong, so be it, but I am not chasig this. In fact, an ES short here at 1343, stop 1345 is a play.

Marc Eckelberry : 9/26/2006 2:10:21 PM

They took the stops out and now we are back down below 1343.25. Don't you love it.

Jane Fox : 9/26/2006 2:05:36 PM

VIX makes a dip to new daily lows as ES stretches to new daily highs.

Marc Eckelberry : 9/26/2006 2:05:11 PM

Nothing to say other than we watch in awe as they take out stops using hundreds of millions of dollars. All that to make the books look good, but you can't hide te fact that techs are being sold on every rally. Whatever.

Marc Eckelberry : 9/26/2006 2:03:28 PM

NQ still having trouble with 1673, PMH.

Jane Fox : 9/26/2006 2:01:09 PM

These are not as bullish as some days but certainly bullish. Link

Marc Eckelberry : 9/26/2006 2:00:35 PM

ES does a higher high with another bearish divergence while QM rallies back above 61. Overall, ES has risk to 1648/1350, but it has to get over this hump here. Support is now 1343.25. NQ is still lagging.

Keene Little : 9/26/2006 1:56:48 PM

ES is pressing up against the top of its wedge again after its micro-pullback. This is the way the rally could progress for the week--slide up along the top of the wedge until the manipulators are done doing their business.

Jane Fox : 9/26/2006 1:54:17 PM


Marc Eckelberry : 9/26/2006 1:47:23 PM

Oil has come to the rescue. Big drop and reversal.

Marc Eckelberry : 9/26/2006 1:43:47 PM

ES dble top with a bearish divergence. I guess nothing will suprise me today, but I am noting.

Jeff Bailey : 9/26/2006 1:40:22 PM

BOE's Gieve (comments): Strong Business Investment Behind UK August Rate Hike

DJ- A pick-up in U.K. business investment in the first half of 2006 was one of the reasons the Bank of England's Monetary Policy Committee decided to raise interest rates in August, Deputy Governor Sir John Gieve said Tuesday.

"The stronger growth of investment in the first half of the year was one of the factors behind the MPC's decision to raise the bank rate by 25 basis points to 4.75%," said Gieve, speaking to an audience of academics at the University of West England in Bristol.

However, Gieve acknowledged that the increase in the first six months of the year was from a very low level of business investment in 2005 and admitted he remained "puzzled" as to the reasons for the stubbornly low level of investment.

He pointed to the fact that the Office for National Statistics had revised up the business investment figures for past years and said he wouldn't be surprised if there were further upwards revisions.

This is an often-cited argument employed by Bank of England officials for the low levels of business investment in recent years.

Earlier Tuesday, the ONS published revisions to second-quarter business investment figures, which saw the quarter-on-quarter rate shift downward to 1.6% from 1.7% reported earlier and the annual rate move sharply upward to 4.8% from 4.2%.

Gieve said that many of the arguments used to explain the low levels of investment didn't stack up when examined closely. These include the transition from a manufacturing- to services-led economy, the low return on investment in the U.K. compared with other countries and the impact of globalization, which has seen U.K. firms investing more abroad than in the U.K.

He also ruled out the argument that with the growing problem of workplace pensions deficits, companies may be opting to use spare cash to fill black holes rather than investing in their companies. He said that the anecdotal evidence from the bank's regional agents dotted across the country had found little to support this assertion.

"The strong overall corporate financial position and the ready availability of lending should mean that one-off cash flow pressures should not prevent the financing of productive investment," he said.

Gieve concluded by predicting that investment levels would pick up in the future as long as macro economic conditions in the U.K. remained stable.

Explaining his decision to vote for an interest rate rise at the August MPC meeting, Gieve said that in addition to the improving business investment levels, it was the removal of doubts about the continuing recovery in the U.K. economy and a desire to "send a signal of our determination to bring inflation back to target" to wage negotiators before the next round of pay settlements early next year that convinced him of the need to raise rates.

On Monday, Gieve was reported in an interview with the Financial Times to have said that there was deliberation over whether to raise rates again when the MPC met in the first week of September. But he said he had decided the committee could afford to wait to gauge the impact of the August hike.

The minutes of that meeting published last week showed that the vote was unanimous 8-0 to keep rates on hold in September.

And he referred to the market expectation that rates would go up again likely to 5% in November, but cautioned that "the real world rarely does follow the central forecast precisely."

He said there were many uncertainties including a weakening U.S. housing market, the future of oil prices, the impact of how growth in the labor market will affect U.K. wages and unemployment and future levels of business investment, which could act as a dampener on the expectation that rates would have to go up again.

Jane Fox : 9/26/2006 1:39:23 PM

S P 500 INDEX UP 5 PTS AT 5 1/2-YR. HIGH OF 1,331


Jane Fox : 9/26/2006 1:34:22 PM

ES is hanging around its daily highs and VIX hanging around its daily lows. I suspect we have higher highs in store for us today.

Jeff Bailey : 9/26/2006 1:34:15 PM

US House Dems Seek Closed Session On Terror Intelligence

DJ- House Democratic Leader Nancy Pelosi asked her colleagues Tuesday to close the House's doors for a highly unusual secret session to discuss a classified intelligence analysis on global terrorism.

Such a session hasn't happened in the House since July 1983, when the chamber went into a closed session to discuss the U.S.'s support for paramilitary operations in Nicaragua.

In an interview with The Associated Press, Pelosi, D-Calif., said the secret session is necessary to allow members to better understand the intelligence community's most recent assessment on global terrorism.

She said she hoped House Republicans would recognize the need for such an internal debate on the document, some of which leaked to the news media over the weekend.

According to the media reports, the intelligence estimate "is the administration's worst nightmare. It is not a corroboration of what the president is saying. It is a contradiction of what the president is saying," she said.

Pelosi's move followed President George W. Bush's announcement that he will declassify the key findings of the intelligence assessment, which he and his top advisers have portrayed as a broad look at trends in terrorism rather than focusing on the impact of Iraq on U.S. national security.

It wasn't immediately clear whether the Republican-controlled House would allow the Democratic effort to shift the chamber's attention to one of the most controversial political issues of the November elections: the Bush administration's policies in the war on terror and its handling of the situation in Iraq.

Pelosi's maneuver required a simple majority of the House to approve.

The National Intelligence Estimate on terrorism is the most recent analysis of the nation's top intelligence analysts who work in 16 different spy agencies. Since its disclosure, the Bush administration has been rebutting suggestions that the analysis finds the U.S. is at greater risk of attack because of the Iraq invasion.

Speaking at a Washington dinner Monday night, National Intelligence Director John Negroponte said the report broadly addressed the global terrorist threat, not just the impact of Iraq. He acknowledged that U.S. analysts believe "the Iraq jihad is shaping a new generation of terrorist leaders and operatives."

But he said the war in Iraq remains important to the outcome. "Should jihadists leaving Iraq perceive themselves, and be perceived, to have failed, fewer fighters will be inspired to carry on the fight," he said.

The House has only had five closed sessions since 1812, according to the Congressional Research Service.

In the Senate, any single member can take the chamber into closed session. As a result, the chamber has held several dozen secret sessions since 1929, including one last November called by Democrats who wanted to discuss the intelligence used by President Bush in the run-up to the Iraq war.

Pelosi surprised even most of her fellow Democrats in offering the motion. She said she was not trying to use the closed session for political purposes, but rather to discuss a serious assessment that is relevant to Iraq and U.S. national security. She wants to see the administration declassify the document - without using a selective lens.

"Quite frankly, my view is that any responsible declassification will change the course of this debate on Iraq," she said.

Jeff Bailey : 9/26/2006 1:31:19 PM

North Korea Rejects Further Nuclear Talks, Blames U.S.

DJ- North Korea on Tuesday rejected further talks on its nuclear program and blamed the breakdown in negotiations directly on the United States, claiming Washington wants to rule the world.

In a speech to the U.N. General Assembly that was peppered with anti-U.S. rhetoric, North Korea Deputy Foreign Minister Choe Su Hon also slammed Japan's push for a permanent seat on the Security Council and criticized the Security Council itself as irresponsible, unrepresentative and unfair.

Choe said U.S. financial sanctions, imposed shortly after a joint statement was issued at six-nation talks on the North's nuclear program on Sept. 19, 2005, had convinced Pyongyang that the negotiations were not worth pursuing.

"It is quite preposterous that the DPRK, under the groundless U.S. sanctions, takes part in the talks on discussing its own nuclear abandonment," Choe said, referring to North Korea's formal name, the Democratic People's Republic of Korea. He called it a "principle that cannot tolerate even the slightest concession."

Marc Eckelberry : 9/26/2006 1:27:50 PM

Michael Metz, chief trader at Oppenheimer is not a believer: Link

Marc Eckelberry : 9/26/2006 1:24:20 PM

Oil reverses hard and that could help NQ

Jane Fox : 9/26/2006 1:22:16 PM

Dateline WSJ - More than 2 1/2 years after pleading guilty for his participation in Enron Corp.'s collapse, financial whiz Andrew Fastow was sentenced Tuesday to six years in prison and two years of community service.

Mr. Fastow had faced a maximum of 10 years in prison under a plea deal. U.S. District Judge Kenneth Hoyt reduced Mr. Fastow's sentence following the former Enron finance chief's cooperation with the government investigation. At Tuesday's hearing, Mr. Fastow had asked the judge to reduce the prison sentence to five years.

Jeff Bailey : 9/26/2006 1:19:50 PM

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

Marc Eckelberry : 9/26/2006 1:15:58 PM

If this is not EOQ prop up, I don't know what is. Semis are down 1.22% but the markets keep holding up.

Jeff Bailey : 9/26/2006 1:11:34 PM

01:00 Internals found at this Link

Jeff Bailey : 9/26/2006 1:02:21 PM

01:00 Market Watch found at this Link

Marc Eckelberry : 9/26/2006 12:58:47 PM

Sept. 26 (Bloomberg) -- The U.S. Federal Reserve may have to extend its supervisory authority to securities firms and hedge funds to keep up with the growing role they're playing in the financial system, said Timothy Geithner, president of the Federal Reserve Bank of New York. "We have capital-base supervision over a diminished and smaller share of the system as a whole," Geithner said late yesterday at a panel discussion in New York. "We may come to a point in the future that we may have to revisit both the scope and the design of that framework." The Fed supervises and regulates commercial and consumer banks, historically the most powerful institutions in finance. While Citigroup Inc. and Bank of America Corp. remain the biggest lenders, Wall Street firms such as Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co. dominate trading and increasingly bankroll the $1.2 trillion hedge fund industry. The relationship between hedge funds and the prime brokers that provide them with margin loans drew renewed attention last week, when Amaranth Advisors LLC revealed that wrong-way bets on natural gas erased 65 percent of its $9.5 billion in assets. Amaranth, a Greenwich, Connecticut-based hedge fund, said it met all demands to repay the loans that financed its trades and plans to stay in business. William McDonough, 72, who preceded Geithner as president of the New York Fed and currently is a vice chairman at Merrill, the world's third-largest securities firm, said the central bank's limited jurisdiction may pose risks. While the current system, with the U.S. Securities and Exchange Commission overseeing Wall Street and hedge funds largely unregulated, can continue to work, it "invariably demands now that the Federal Reserve interest itself in institutions other than the banks more than it had to in the past," McDonough said. "One would hope that we would not wait for a crisis that is truly a mess for the Congress and the president to look at the structural issues and decide to put in place a supervisory system that is more appropriate," he said. The Federal Bureau of Investigation has identified hedge funds as "an emerging threat," said Chip Burrus, an assistant director at the FBI, in an interview. Specifically, the FBI is concerned about the number of smaller investors gaining access, mostly through pension funds, to private partnerships that are meant for investors with at least $1 million, he said. Hedge funds are mostly unregistered pools of capital that let managers participate substantially in the gain or loss of the money invested. Geithner, 45, who was responding to a question from JPMorgan Executive Vice President Heidi Miller, said the Fed has "ample authority today." The New York Fed is the most important regional bank in the Federal Reserve system and serves as the eyes and ears on financial markets for the board of governors. McDonough organized the $4 billion bailout of Long-Term Capital Management LP by more than a dozen banks and securities firms in 1998 when he was running the New York Fed. Amaranth's meltdown last week was the biggest since Long-Term Capital, which collapsed after leveraging $2.3 billion of capital into a portfolio of about $125 billion of securities. Paul Volcker, who was chairman of the Fed in Washington from 1979 to 1987, before Alan Greenspan, remains critical of the central bank's role in the Long-Term Capital rescue because it concerned a hedge fund and its dealings with securities firms. `Moral Suasion' "This wasn't an institution that by law had access to Federal Reserve facilities," said Volcker, 79, who also served as president of the New York Fed in the 1970s. Just by providing a meeting room for the fund's creditors, the Fed "provided a certain amount of moral suasion." None of the participants in yesterday's panel discussion, organized by the Women's Economic Round Table, commented on Amaranth's losses or their implications for the financial system. Gerald Corrigan, another ex-president of the New York Fed who's now a managing director at Goldman, also took part. Separately, the New York Fed has been gathering commercial and investment bankers to discuss the backlog of unprocessed paperwork in the credit-derivatives market. Geithner said one group will meet again tomorrow to outline plans to improve processing for other instruments, such as over-the-counter equity derivatives. "There are problems in other parts of the over-the-counter market that are sort of similar to some of the problems we've seen in the credit derivatives," he said. "They had a compelling interest in solving this and a compelling interest in showing us they could solve it quickly." Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or the weather. Link

Jeff Bailey : 9/26/2006 12:34:47 PM

Newswires Survey: Aug New Home Sales Seen 1.045M, -2.5%

DJ- Another falloff in new home sales is expected, continuing the softening in real estate activity which has been the leading sector of weakness in the economy and one that the Federal Reserve sees as particularly vulnerable.

Economists look for a 2.5% decline in new home sales to an annual rate of 1,045,000 in August from 1,072,000 in the prior month, according to the median estimate of 25 analysts surveyed Monday by Dow Jones Newswires.

The Commerce Department is due to release the new home sales report at 10:00 a.m. EDT (1400 GMT) on Wednesday.

The National Association of Realtors reported Monday that existing home sales fell by 0.5% to an annual rate of 6,300,000, boosting the stock of unsold existing homes to a supply of 7.5 months. Existing home sale are recorded at close, while new home sales are recorded at contract (there may be some overstatement due to a reported increase in canceled contracts).

"The July new home sales report suggests a faster slowdown in the housing market with a 4.3% decline in sales and record high inventories," noted Drew Matus, an economist at Lehman Brothers in New York. "We expect new home sales to continue to decline in August, falling 2% to a 1,050,000 annualized rate. Leading indicators of new home sales point to a decline in sales. Most notably, housing starts have declined sharply, with August starts falling 6% month-to-month or nearly 20% year-over-year."

"In addition," Matus said, "homebuilder sentiment has fallen rapidly: the National Association of Homebuilders sentiment index fell to 33 in August, the lowest in over a decade."

Jeff Bailey : 9/26/2006 12:22:36 PM

Swing trade short stop alert for the 1/2 position (all of it now) in the iShares Silver Trust (SLV) $114.15 +1.96%

Marc Eckelberry : 9/26/2006 12:20:28 PM

Stocks could very well rally out of this, so be careful. But as long as NQ has trouble with 1667 and more importantly 1673, I doubt energy stocks will be enough to propel ES to new higs. One never knows at EOM and EOQ. So use stops with discpline and watch NQ and the semis for any sign of a reversal.

Marc Eckelberry : 9/26/2006 12:18:29 PM

Gold bulls(me)want to see YG close above 598.10.

Keene Little : 9/26/2006 12:18:39 PM

Since we never got the pullback in XBD for Jeff to buy his call options at 210, and I never got the sell off I was expecting, I thought it was time for another update and am wondering if Jeff still likes the bullish side here. Because if he does I'll be glad sell short to him. It has now bounced back up to probe the underside of its broken uptrend line from May 2005. Link

Since the high on Sept 15th each new high has been accompanied by negative divergences. This too could be held up into the end of the week (and actually would look best with a pullback and one more minor new high) but regardless this one is a short waiting to happen. The market is full of charts looking like this one.

Marc Eckelberry : 9/26/2006 12:16:02 PM

I won't even mention the plethora of unfilled gaps above for YG. This could be a very sweet trade, just as nice as the July lows with techs.

Marc Eckelberry : 9/26/2006 12:17:08 PM

YG bullish divergence 60 mn and weekly fib projections and bull flags on the rally. We close above 598 and it's 610 by week's end: Link

Marc Eckelberry : 9/26/2006 12:12:31 PM

And I guess I am the lone one on gold as well now...I just cannot agree at all with Keene and Jane on this. YG has made a lower low with a clear bullish divergence. The chart is stair stepping higher as gold buyers step in cautiously the last few days of ECB selling. Inventories are way down, the season is upon us. We did not get the usual September rally, and I know many huge jewelry companies that are understocked, they have been so scared by the media to buy this dip. It won't take much for them too get scrambling. YG should be at 620 by next week. That's my gamble, but use caution since I am in a definte minority here.

Jane Fox : 9/26/2006 12:08:09 PM


Keene Little : 9/26/2006 12:03:39 PM

As for the housing market, since many are calling the July low the bottom and some are actually getting bullish, I couldn't disagree more. The bounce from July was expected and it has now managed to drift sideways/up to its downtrend line from January 2006. It is also nearing the top of its bear flag pattern. This index should have much further to fall before it finds a better bottom. Link

Marc Eckelberry : 9/26/2006 12:03:13 PM

Trillions moving from bonds to techs to energy in the space of 1 month. Sorry, Jeff, we are not on the same page. I see it at as a very heavy warning sign, even desperation to get some numbers in. Normally, this type of rotation is every few months, not three massive shifts like this in a month.

Jeff Bailey : 9/26/2006 11:59:49 AM

President Bush: Mistake To Believe Iraq War Makes US Less Safe

Says Leak Of Intelligence Report Was Political

Negroponte To Declassify Report's Key Judgments

Jane Fox : 9/26/2006 11:57:39 AM

Keene that is my take on Gold as well (11:55 post). I think it will see lower lows before it recovers (if it does).

Marc Eckelberry : 9/26/2006 11:55:34 AM

ES loses yesterday's trendline support (10 mn chart): Link

Keene Little : 9/26/2006 11:55:29 AM

My take on gold is still more bearish than Marc's. After bouncing off the bottom of its parallel down-channel, which was the June low as well, the bounce since the Sept low has been very corrective looking. It looks like a small ascending wedge for a 4th wave and it looks close to completion. We should see another leg down that breaks the June low. Link

There are a couple of things worth pointing out on this chart as it can be helpful in your technical analysis of other symbols. Whenever you see stochastics make it back to the other side (in this case it's almost back into overbought) while price makes a relatively small correction, that's usually a good sign the move is just a correction of the previous move (in this case the down trend should still be the dominant trend). The other thing is MACD has remained below zero and RSI below 50. Both of these suggest the bounce is just a bounce.

Jeff Bailey : 9/26/2006 11:55:05 AM

I've been trading and managing money for years and I've seen the "chase performance" trade so many times it isn't funny. Can last MUUUUUCH longer than many imagine.

Jeff Bailey : 9/26/2006 11:53:44 AM

Newswires Survey: August Durable Goods Orders Seen +0.5%

DJ- The durable goods report for August is expected to show a modest rebound.

The median estimate of 27 economists surveyed Monday by Dow Jones Newswires is for a 0.5% increase in new orders for durable goods in August compared with a 2.5% decline in July.

The Commerce Department is due to release the durable goods report for August at 8:30 a.m. EDT (1230 GMT) on Wednesday.

"After falling 2.5% in July, we look for flat durable goods orders in August," said Mickey Levy and Pete Kretzmer, economists at Bank of America. "Lower Boeing orders likely suppressed aircraft activity, but we expect a partial rebound from July's large decline in vehicle orders. Meanwhile, a decline in manufacturing hours worked in August suggests soft non-transportation orders for the month."

Jeff Bailey : 9/26/2006 11:50:00 AM

CBOE Oil Index (OIX.X) 576.72 +1.51% ...

Jane Fox : 9/26/2006 11:49:02 AM


Marc Eckelberry : 9/26/2006 11:49:54 AM

Definite roatation out of techs and into energy. One week, bonds are darlings, next week techs are darlings, and now it's the much reviled energy sector. What will it be next week? I think it will be precious metals and base metals. In any case, this market is chasing performance on a whim, it seems. I've never seen anything like it in such a short period of time.

Jeff Bailey : 9/26/2006 11:46:54 AM

Bullish swing trade long alert for 1/2 position in the U.S. Oil Fund (AMEX:USO) at the offer of $56.01. Stop $54.50, target a bounce to $61.75.

Jeff Bailey : 9/26/2006 11:45:19 AM


DJ- Wallop, spun out of Microsoft's research lab, is launching a test version of an online social-networking site where people will pay extra to look good. It hopes charging users for personal-page decorations will supplant ad revenue.

Jeff Bailey : 9/26/2006 11:43:27 AM


DJ- Former Fed chairman says most of the corporate-reform law has proved to be a "nightmare" and should be scrapped. He also tells the Massachusetts Technology Leadership Council that gasoline taxes should be raised.

Jeff Bailey : 9/26/2006 11:42:27 AM


DJ- Sales rise 0.1% in the first four weeks of September versus the previous month, according to Redbook Research. ICSC-UBS Index falls 0.6% last week from a week earlier, but group raises year-over-year growth forecast for September to 4%.

Jeff Bailey : 9/26/2006 11:41:46 AM


DJ- Auto parts maker expects 2H product sales will be about 10% lower than in the 1H, saying production cuts by U.S. auto makers continue to wreak havoc on suppliers.

VC $8.28 -2.01% Link

Jane Fox : 9/26/2006 11:36:44 AM

Notice how ES is using its PDH as support and VIX is using its PDL as resistance. That means if you see ES break its support you absolutely need to have the VIX break its resistance. Can't be much clearer than that! Link

Jeff Bailey : 9/26/2006 11:36:26 AM


DJ- Home builder reports net income of $207 million, or $1.30 a share, as revenue increases 20% to $4.18 billion. The company had previously cut its 3Q profit outlook to $1.25-$1.35. Lennar now expects fiscal 4Q earnings of $1-$1.30 a share, well below Thomson First Call mean estimate of $1.60. CEO Miller says U.S. housing market is falling 'further and faster than anticipated.'

LEN $46.91 +0.06% Link

Marc Eckelberry : 9/26/2006 11:35:39 AM

Jane, I wanted to short ZB at 114, it never go there. Linda, you will love that chart also, one of those little used averages like SOX 200 weekly I pointed out a few years ago. Look at that 200 ema on the weekly ZB: Link

Marc Eckelberry : 9/26/2006 11:32:26 AM

For now, trade it, don't love it. The only long I hold overnight these days is gold.

Marc Eckelberry : 9/26/2006 11:30:20 AM

If we get a severe correction soon, it will be the second time this year it is done with so- called put support below us. That will put many hedge funds out of business. The reason the VIX has been so low is because thousands of hedge funds have been selling billions in volatility expecting the easy upside party to go on forever. I remain extremely cautious here and I'm starting to think aggressively short. If hedge funds lose it a second time, it will get nasty. No one is expecting all those puts at QQQQ 40 and 39 to get in the money. That is what worries me. Yes, high pc ratio is a great contarian tool but it must be corroberated by a higher VIX/VXN. It is not.

Jeff Bailey : 9/26/2006 11:25:03 AM

Dollar Index (dx00y) 85.81 +0.60% ... not yet a trade at WEEKLY R1.

Marc Eckelberry : 9/26/2006 11:24:31 AM

QM could get up to 62.50, where I would book profits if you went long. It's even a good place for a short if we get there.

Marc Eckelberry : 9/26/2006 11:23:55 AM

Gold back up at 597. Looks like 600 right around the corner.

Marc Eckelberry : 9/26/2006 11:23:28 AM

QM rallies.

Marc Eckelberry : 9/26/2006 11:23:02 AM

There are no energy stocks in NDX. That is the story so far today.

Marc Eckelberry : 9/26/2006 11:22:34 AM

We have a slight rotation back into energy and out of techs and that was not scripted (SOX/GSO down, XLE up) It is also bearish for techs, as the energy rally has killed the ability of the COMP to move up as far as SPX and the DOW after the 2000 sell-off.

Jeff Bailey : 9/26/2006 11:19:32 AM

11:00 Internals found at this Link

Keene Little : 9/26/2006 11:16:54 AM

Tab, that bearish divergence would be fully expected if I've got the EW pattern correct. And look at that long term negative divergence since 2004! Goes to show you can't necessarily trade it but in hindsight many investors will do the ol' head-slap doh! and wonder why they didn't heed the huge sell signal.

Marc Eckelberry : 9/26/2006 11:18:18 AM

This is when you see that ES is the most manipulated instrument out there. NQ is stuck below 1673 but they keep shoving ES. It will have to break one way or the other. I suspect if NQ does not get above 1673 fast, the day will revert to the bears.

Tab Gilles : 9/26/2006 11:11:28 AM

Keene, On a weekly chart wwe could see this formation developing...? Link

Keene Little : 9/26/2006 11:03:49 AM

Jane and Tab, there is in fact divergence on RSI at the DOW's double-top. The reason it's not as obvious as the double-bottom in June/July is because of the time span between them.

Tab Gilles : 9/26/2006 11:03:47 AM

$INDU weekly Link

$SPX Link

Jeff Bailey : 9/26/2006 11:03:31 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 9/26/2006 10:59:46 AM

NDX back in the red for 2006, but NQ is holding 1637. Shorts be a little careful of the pre-lunch push in 15 mns.

Tab Gilles : 9/26/2006 10:56:28 AM

Jane...most definitely.

Short-term technical analysis shows caution is warranted: a Double Top formation is one of the worst formations for an index or a stock. The first peak from May is an "Adam peak," consisting of a pointed high. The most recent high could characterize the current rise as an "Eden peak," which is more rounded. This formation, studied 196 times by renowned technical analyst Thomas Bulkowski, forewarns of an average correction of 15% from the "confirmation line," currently at the Dow's 200-day Moving Average. A 15% move from there would mean a drop as far as Dow 9,447. Even a drop to the bottom of the Dow channel means a shocking correction to Dow 10,000. We may see a new high on the Dow then a correction. I posted earlier that the $NASI had given a bearish turn. Friday is the end of the Q and money managers are positioning. Should be interesting what occurs Oct 2nd. Let's say I've got my finger on the trigger!

Jeff Bailey : 9/26/2006 10:54:32 AM

Schlumberger: CEO (comments @ investor meeting)

Strong Growth To Continue Beyond 2010

Added Capacity Will Slow Growth In North America

Reserve Replacement Tech Will Boost N Amer Pfts

SLB $57.85 +1.42% Link

Marc Eckelberry : 9/26/2006 10:51:26 AM

NQ loses weekly pivot. ES weekly pivot is at 1337.

Marc Eckelberry : 9/26/2006 10:50:48 AM

NQ at weekly pivot. It should hold ahead of lunch. ES is showing better relative strength and that is not what bulls want to see, They want to see techs cracking with semis ahead. It is exactlythe opposite.

Jane Fox : 9/26/2006 10:49:38 AM

Tab I like your double tops but wouldn't you be more bearish if you saw the MACD diverge like it did on the double bottom?

Marc Eckelberry : 9/26/2006 10:48:47 AM

This is something everyone should do at the end of every month. Put up fib projections above and below and keep them there. Same with the end of every week and every day. It is a discipline that makes you able to see ahead, that way you don't only rely on pivots.

Marc Eckelberry : 9/26/2006 10:47:30 AM

August high low, Jane.

Marc Eckelberry : 9/26/2006 10:46:54 AM

NQ chart, you can see the fib tag as well, but it is much further out of the wedge, thus maybe in more danger: Link

Jane Fox : 9/26/2006 10:46:48 AM

Marc what are you using for your fib anchors?

Tab Gilles : 9/26/2006 10:46:21 AM

$INDU Double Top??? Link

The $SPX broke thru.... Link

PnF charts indicate higher to go. Link Link

Jeff Bailey : 9/26/2006 10:46:25 AM

Transocean (RIG) $71.70 +1.52% Link ... driller has been showing some relative strength on technical basis over last months. Sideways instead of down.

Marc Eckelberry : 9/26/2006 10:44:43 AM

ES tries to break out of the bearish ascending wedge. Note the August fib projections: Link

Keene Little : 9/26/2006 10:42:32 AM

One Fib projection I often talk about is for the c-wave in an a-b-c move to be only 62% of wave-a. If it weren't for my expectation for this week to remain bullish, and the upper target of SPX 1345, I'd be recommending a short at this morning's high, and it could still work for at least a scalp play.

Looking a little closer at the SPX chart I posted earlier, you can see that it has tagged the top of its wedge and the Fib projection for 62% (1331.78). The leg up from Sept 22nd could be counted as complete (5 waves which is what a c-wave needs to be) so it's an interesting possibility here and a caution if you're long. Link

Marc Eckelberry : 9/26/2006 10:42:35 AM

Just reinforces my feeling that gold will eventually take off and in a big way. 850 is on the distant horizon, but it is there.

Marc Eckelberry : 9/26/2006 10:40:24 AM

Shades of 1987. Volcker is back, warning about inflation. He is not in agreement with Bernanke it seems. Link

Jeff Bailey : 9/26/2006 10:40:00 AM

Richmond Fed Sept Manufacturing Index 9 Vs Aug 3

Economic activity in the Richmond region generally improved during September, the Federal Reserve Bank of Richmond reported Tuesday.

The bank's manufacturing index came in at 9 versus 3 in August. Numbers above zero point to growth. The bank's shipment's index also hit a reading of 9, versus -8 the prior month, while the new orders index stood at 10, from 5 in August.

The bank said its service sector revenue index improved to a reading of 11 in September, from 7, while its retail sales revenue index came in at -1, from -5 in August.

All companies that participated in the survey are located within the Federal Reserve of Richmond district, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia.

Marc Eckelberry : 9/26/2006 10:36:09 AM

The short was easier with NQ, no doubt. If you took an ES short, your stop should be at 1343.75. There is upside risk this month to 1348/1350. Noting also the bearish divergence on the new high for NQ on the daily chart. But who cares. Gotta make those books look good before we get more earnings warnings in the tech sector.

Marc Eckelberry : 9/26/2006 10:36:45 AM

There is a lot of short covering going on in addition to the EOQ plays. There are many puts sitting below and the pc ratio shows the bearish sentiment. The one variable has been the VIX which is at historical lows and the SOX of course which is lagging as usual. This could be a repeat of May when hedge funds sold volatility cheap and suddenly had to cover those naked puts. At least, that is what bears are hoping for.

Jane Fox : 9/26/2006 10:33:04 AM

ES's yearly highs are 1353.25 so I am wondering if the bulls are strong enough to test those highs today (or at least this week). If so then that would be a great place for a short because we would be very very overbot and testing a huge level of resistance.

Marc Eckelberry : 9/26/2006 10:30:29 AM

ES tags 50% projection August at 1343.25, which is also R1. NQ is back belwo 1673 and was the one to hit short, if that was your inclination.

Jeff Bailey : 9/26/2006 10:28:52 AM

Bearish swing trade put stop alert for the Baker Hughes BHI Nov $60 Puts (BHI-WL) at the bid of $1.55

BHI $65.15

Keene Little : 9/26/2006 10:28:51 AM

From a very short term perspective, the move higher now should be completing a 5-wave move up from this morning's low. That should be followed by a larger pullback. The problem right now is that these short term patterns are failing and I think it's because there's a large effort to just jam the market higher.

Marc Eckelberry : 9/26/2006 10:25:31 AM

Here comes the second wave of buyers. NQ tagged 61.8% projection August at 1677.50.

Jeff Bailey : 9/26/2006 10:24:27 AM

Baker Hughes (BHI) $64.79 +1.29% ...

Marc Eckelberry : 9/26/2006 10:23:18 AM

Both ES and NQ should retrace to their pivots. 1332.50 and 1656.25 if NQ stays very long below 1673.

Jane Fox : 9/26/2006 10:23:07 AM

Dateline WSJ - The health-care premiums of employers and their workers have climbed twice as fast as wages and inflation in 2006 -- to nearly double their cost in 2000 -- and look to rise at a similar clip next year, two nationwide surveys show.

The average family premium rose 7.7% in 2006, marking the third year employer health-care cost increases have slowed since soaring nearly 14% in 2003, according to a 2,122-employer survey by the Kaiser Family Foundation and Health Research and Educational Trust.

After several years of steady steep rises, the cost for family coverage under an employer health plan is now $11,480, well over the annual wage of a full-time minimum wage worker and beyond what many companies, mostly smaller businesses, and their workers can afford. While 98% of firms with more than 200 workers still provide some sort of employee health benefits, only 60% of smaller companies do. That's little changed from last year but down from 68% in 2000.

Marc Eckelberry : 9/26/2006 10:22:11 AM

SMH lost 200 day ema again. Whatis going on with the semis. They are not in the party.

Marc Eckelberry : 9/26/2006 10:21:50 AM

NQ loses 1673, previous month high.

Jane Fox : 9/26/2006 10:14:50 AM

I see no indication of this buying easing up yet.

Keene Little : 9/26/2006 10:14:49 AM

A new all-time high for the DOW for the end of the month/quarter would be a spectacular news event. It should have every Tom, Dick and Harry investing every penny they have into the stock market. What a shame, or should I say sham.

Jeff Bailey : 9/26/2006 10:13:13 AM

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

Jane Fox : 9/26/2006 10:12:43 AM

Internals are all in sync today; AD volume climbing, VIx falling, TRIN 0.83 and AD line +834.

Keene Little : 9/26/2006 10:12:46 AM

ES is not far from the top of its wedge (1344) so watch for potential resistance there. But this jam to the upside, which looks like short covering, could have a life of its own. Either side of a trade at the moment doesn't seem worth the risk to me. There are better (saner) times to trade when the technicals mean something.

Jane Fox : 9/26/2006 10:09:52 AM

TICKS +1000

Jane Fox : 9/26/2006 10:08:23 AM



Jane Fox : 9/26/2006 10:07:26 AM

NQ is the only market to break its PDH so far. Link

Marc Eckelberry : 9/26/2006 10:05:27 AM

NDX is now finally in the black for 2006.

Jeff Bailey : 9/26/2006 10:05:02 AM

Wal-Mart (WMT) alert $49.50 +1.45% ... see 09/21/06 MM.

Jane Fox : 9/26/2006 10:04:50 AM

DAteline WSJ Alert - U.S. health-care premiums have climbed twice as fast as wages and inflation in 2006, two surveys show.

Marc Eckelberry : 9/26/2006 10:04:46 AM

NQ new Sept highs, but SOX red. Strong resstance above 1673 is 1680/1681.

Keene Little : 9/26/2006 10:04:34 AM

Two equal legs up this morning (for a small a-b-c bounce) is at ES 1338.25. If this just keeps rallying instead of giving us at least some kind of pullback then I'll just hang up my mouse for the week. I don't want to buy it here but clearly shorting the market is not the best course of action this week.

Jane Fox : 9/26/2006 10:03:39 AM

WASHINGTON (MarketWatch) - U.S. consumer confidence rebounded in September, the Conference Board said Tuesday.

The consumer confidence index rose to 104.5 in September from a revised nine-month low of 100.2 in August.

The rebound was stronger than expected. Economists had forecast the index to increase to 102.7 from the initial August reading of 99.6, according to a survey conducted by MarketWatch.

Economists cited lower gasoline prices as the principal reason for forecasting the increase in confidence.

Confidence has trended lower after reaching a peak of 109.8 in April because of high gas prices during the summer-driving season.

The present situation index increased to 127.7 from 123.9, still below July's level.

The expectations index, seen as a better predictor of consumer spending, rose to 89.0 from 84.4 in August. This is the highest level since April.

Jeff Bailey : 9/26/2006 10:02:51 AM

10:00 Market Watch found at this Link

Keene Little : 9/26/2006 10:01:08 AM

The little bounce here this morning should lead to another leg down.

Jane Fox : 9/26/2006 10:00:51 AM


Jane Fox : 9/26/2006 9:55:54 AM


10:00a.m Sept Conference Board Consumer Confidence. Previous: 99.6

10:00a.m. Sept Richmond Fed Manufacturing Index. Previous: 3.

Jane Fox : 9/26/2006 9:55:15 AM

Equity marekts first line of support should be overnight lows so keep those on your radar screen as well.

Jane Fox : 9/26/2006 9:53:24 AM

S P 500 hits five-year high

Jane Fox : 9/26/2006 9:48:37 AM

PDHs may be resistance today so keep them on your radar. Link

Jeff Bailey : 9/26/2006 9:48:15 AM

Canada Job Insurance Claims Down 2.1% In July From June

DJ- Canadian government employment offices received a preliminary, seasonally adjusted 226,900 new and renewal claims for unemployment insurance benefits in July, 2.1% lower than the revised 231,700 in June, Statistics Canada said.

The number of claims was down 8.1% from a year earlier.

An estimated 474,830 Canadians received regular unemployment insurance benefits, down 1.1% from June and down 4.6% from July 2005.

Benefit payments totaled C$721.8 million (US$647 million), up 3.9% month-on-month and up 1.7% from a year earlier.

Jane Fox : 9/26/2006 9:44:02 AM

VIX opens midpoint to its PDR.

Jane Fox : 9/26/2006 9:39:12 AM

I have no VIX this morning. ARGHH!!

Jane Fox : 9/26/2006 9:36:01 AM

AD line is -16 and AD volume is below 0. This is the way the day started out yesterday so be careful.

Keene Little : 9/26/2006 9:36:11 AM

Since we're short term overbought and SPX appears to be still struggling with its May high, we'll probably get a pullback today. The form of the pullback (I'm expecting a corrective one) should give some clues as to how much and how long it should go. Considering the way these rallies have progressed in the past it wouldn't surprise me to see a shallow flat correction before heading higher again. But price action inside these wedges is highly unpredictable, meaning very difficult to trade.

Marc Eckelberry : 9/26/2006 9:30:07 AM

YG has support at 593 and 590. This is the last day ECB can sell their gold. They are most likely done already.

Marc Eckelberry : 9/26/2006 9:29:17 AM

NQ 1667 and ES 1337 are R. NQ has support between 1656 and 1658.50. That should get tagged ahead of CC. Semis look weak pre-open.

Keene Little : 9/26/2006 9:27:06 AM

SPX 240-min chart: Link
Assuming the market will be held up into the end of the week/month/quarter, the wedge and a Fib projection for the last leg up (for two equal legs up from Sept 11th, making the a-b-c move for the 5th wave) show me 1345 as the potential target. This is very interesting because it's the Gann number I've been mentioning since last spring when it looked like SPX might head for it back in May. Maybe this time it'll finally do it. The trend line along the highs from January 2004 and March 2005 is currently at 1345 (it briefly punched above this line in May). As the Church Lady would say, isn't that special.

DOW 240-min chart: Link
Similar pattern for the DOW and its projection is 11764. This would of course be a new all-time high for the DOW (11750 was the high in January 2000) and would have retail traders getting long at the worst possible moment. At least that's the way I see it.

Jane Fox : 9/26/2006 9:25:39 AM

ES's MACD and RSI support Keene's observations as well as YM's RSI. The only hold out is YM's MACD. Link Link

Keene Little : 9/26/2006 9:16:18 AM

I showed two 240-min charts of the wedges for SPX and DOW after the close yesterday (I'll repost shortly). These wedges have a habit of continuing on forever it seems. Ever time it threatens to roll over we're getting renewed, albeit weaker, buying. But there's little doubt in my mind what will happen out of this setup.

. The alternative is extremely bullish and it means we'll see a huge and strong rally soon. It could of course happen and we've seen it happen in the past but that's a lower odds scenario. Just keep it in mind though if you're getting uncomfortably short here and the market is going against you.

Keene Little : 9/26/2006 9:10:01 AM

Interesting comment Jane about some of the internals not giving you clues about yesterday's rally. That's been true on a daily basis as new market highs have been made--market breadth is getting noticeably, and bearishly, weaker as the rally progresses. This is classic behavior in a bearish ascending wedge. We all know why it's being held up this week so bears will just have to bide their time and wait their turn at the table.

Jane Fox : 9/26/2006 9:07:42 AM

Overnight both Oil and Gold made lower lows and highs and that is always bearish. Gold's overnight low so far is 591.70 and oil's 60.80. Gold was oversold on its daily charts but this sideways movement since September 11th has burned a lot of it off and it may be ready for its next move down. Oil is still oversold on the daily charts but has been since September 1st so who knows how long it will stay this way.

Natural Gas has also been oversold since the beginning of September and seems to be back in sync with Oil.

Tbonds made lower highs and lows overnight but has made a double bottom so overnight lows may be in for now. TBonds have had a great run lately (I will show the daily chart later). Link

Jane Fox : 9/26/2006 8:52:19 AM

Good morning all. Equities markets were mostly neutral overnight although they are becoming bullish because they are all making new overnight highs as I type. We certainly saw some bullishness yesterday which I expect will carry over into today. Yesterday's trading was very clear, in hindsight, but I got all muddled up because neither the AD line nor the TRIN were bullish. if I had used the VIX only I would have sold the morning and bot just about the bottom and would have had a great day trading. Unfortunately I didn't because the other internals were not supporting my observations. Link

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