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Jeff Bailey : 9/27/2006 10:31:32 PM

October Natural Gas (ng06v) official settlement was $4.201. That was down $0.325 from Tuesday. (expired today)

November Nat. Gas (ng06x) settled down $0.136, or -2.34% at $5.669.

Keene Little : 9/27/2006 10:05:48 PM

Thursday's pivot tables: Link and Link

OI Technical Staff : 9/27/2006 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The Market Monitor has been archived.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 : 9/27/2006 9:33:48 PM

The oil rally and falling dollar (who could bet against that after the lousy durable goods)contributed to a nice pop for gold above key 604 resistance. YG has R at 610, 61.8% June/July. If that breaks, look for a quick run to 617/620, where we have a gap to close (623). Take some profits there if that happens, and reload on a pullback that closes above 20 dma (presently 605). As you know, I have been bullish on gold for a few weeks and we should be off to the races if oil holds its own. There usually is a 50 to 70% correlation there, the rest is currency and seasonal jewelry demand. Remember that outside of banks, investors hold and trade 600 tons, more than all the central banks combined. But first things first, we neeed to hold 603/605 area. Looks good for now, we have the first close above 600 in 13 trading days and it wasn't a spike and drop. The one problem could be a dollar rebound on inflation news tomorrow. Big day for everyone.

Tab Gilles : 9/27/2006 8:03:11 PM

Can you say 7 Eleven in Japanese???

Today's news was interesting, a Japanese owned company is severing business ties with a Venezuelan oil company, because of what their country's President said about our American President. 7 & Eleven will now supply their own gasoline...which will purchased on the open market.


Link Link Link

Tab Gilles : 9/27/2006 7:16:46 PM

Open Positions & Watch List Link

$NDX Link

$NAHL Link


Profund UltraOTC (UOPIX) Link


Jeff Bailey : 9/27/2006 7:08:57 PM

Just seeing Jim's post (02:47:43) regarding another potential reason for oil's rise today.

"Oh thank heaven for 7-eleven" ....

Might just start buying some diesel (if they have it) from them!

Jeff Bailey : 9/27/2006 6:59:43 PM

Weekly Mortgage Application Survey ... The Mortgage Bankers Assoc said its seasonally adjusted Market Composite Index, a measure of mortgage loan application volume fell 4.9% from a week earlier to 566.6.

The seasonally adjusted Purchases Index fell 5.5% to 375.90, the Refinance Index fell 4.1% to 1,677.50, the Conventional Index fell 5.04% to 840.0, while the Govt. Index fell 3.32% to 110.5.

The average contract interest rate for a 30-year fixed-rate mortgage fell to 6.18% from 6.36%, with points decreasing to 1.06 from 1.11.

CME May07 Regional Housing Futures Link

CME Aug07 Regional Housing Futures Link

Jeff Bailey : 9/27/2006 6:59:30 PM

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

Today's Activity

I did not profile any new trades, or close any existing OPEN position trades.

Jeff Bailey : 9/27/2006 5:39:04 PM

Closing Internals found at this Link

Jeff Bailey : 9/27/2006 5:15:00 PM

Closing U.S. Market Watch found at this Link

Dow Industrials close at new 52-week high for second-straight session and follow OEX and broader SPX after they first did a couple of weeks ago.

Most broad NYSE and NASDAQ Comp., as well as RUT.X still well off their 2006 relative/all-time highs and suggest to me that bulls really want to start seeing some "broadening out" of gains.

Jeff Bailey : 9/27/2006 4:46:38 PM

And the "mother ship" XOM Link ... Dow component (where its membership has had great privilege)

Jeff Bailey : 9/27/2006 4:42:32 PM

BHI's bar chart Link

does look similar to the USO Link

Jeff Bailey : 9/27/2006 4:35:23 PM

Not that I understand the dynamics of a "Force Majeur," or why oil seems to trade inverse what I think it would (when first announced, I thought oil would spike higher and it fell. Now it rises?)

My "go long oil" decision yesterday was really a combination of what the STOCKS did (BHI somewhat, even though they are Nat. Gas/Oil dependent) and commodities, like SILVER.

Made an adjustment, and it may have paid off.

Jeff Bailey : 9/27/2006 4:31:26 PM

I think that/those were the reasons for today's rise in oil prices.

As I scroll back through my DJ "hot news" headlines, I see Conoco's at 01:35 PM EDT.

Jeff Bailey : 9/27/2006 4:21:55 PM

Alert! Exxon/Mobil: To Suspend Prudhoe Bay Force Majeure Oct. 15

DJ- ExxonMobil Corp. (XOM) will lift its force majeure on Alaska North Slope crude oil from the Prudhoe Bay field by mid-October, a spokeswoman said Wednesday.

"We have suspended the force majeure effective on Oct. 15, 2006, and we are in the process of notifying our Prudhoe Bay crude oil customers," said ExxonMobil spokeswoman Prem Nair in an e-mail.

The Irving, Texas-based oil company issued force majeure notifications to its customers after operator BP PLC (BP.LN) shut the Prudhoe Field following the discovery of corrosion in the pipeline system.

The lifting of the force majeure is based on information from BP that "production rates are expected to begin to ramp up toward normal levels over the coming days," Nair said.

Exxon owns about 36% of the field.

ConocoPhillips (COP), which owns 36.1% of Prudhoe Bay, also said Wednesday that it would lift its force majeure toward Oct. 31.

Last week, BP obtained authorization to restart the eastern part of the Prudhoe Bay field, shut down since early August. BP said Monday it was producing 100,000 barrels a day from east Prudhoe Bay, and expects to add another 50,000 b/d by Saturday. Western Prudhoe Bay currently produces 250,000 barrels a day of oil.

Jeff Bailey : 9/27/2006 4:13:10 PM

Buy Program Premium ... SPY $133.74 : YM 11,773

Keene Little : 9/27/2006 4:12:17 PM

Here's another reason the buyers need to step up to the plate tomorrow--YM did a throw-over above its ascending wedge today and then dropped down below the line. That's bearish. Now it's bouncing back up for what could be a retest and if it gives it a kiss goodbye that too will be bearish. I'm trying not to lick my chops yet. Link

Jane Fox : 9/27/2006 4:07:54 PM

DAteline CNN - Authorities confirm a bomb squad and SWAT team sent to a school in Bailey, Colorado, after shots reported, The Associated Press reports.

Keene Little : 9/27/2006 4:07:00 PM

SPX needs a green candle tomorrow otherwise today's spinning top doji followed by a red candle tomorrow would be a strong sell pattern. Tomorrow could be a telling day.

Keene Little : 9/27/2006 4:00:27 PM

It's looking like we should higher tomorrow. SPX 1345 and DOW 11764 are still on the table. But it has to rally tomorrow and can not break today's low.

Jane Fox : 9/27/2006 3:59:27 PM

Economic Reports for tomorrow include:

8:30a.m. Initial Jobless Claims. For Sept 23 Wk. Previous: +7K.

8:30a.m. 2Q Final GDP. Previous: +2.9%.

10:00a.m. Aug Help Wanted Index. Previous: 33.

Tab Gilles : 9/27/2006 3:40:05 PM

Follow-up to post made 9/15 on metal stocks...

Tab Gilles : 9/15/2006 10:52:58 AM

Commodity - Follow up to post made 8/17 2:19 PM Geopolitical concerns, especially with Iran never really escalated. I mentioned if that occuredgold would go lower. $580 was my target. It now looks likely that June low of $540 is iin play.

As for the $XAU that is testing the lower end of a trading range.

$Silver is testing it's 200-ma too. Link

$WTIC late last night Jim Brown, Marc and I discussed the XLE. We brought up how oil is likely to test $60 a bbl before a bounce.

Currently oil is plunging @ $62.35. Link

XLE Targeting $50/$51 as an entry point in coming days or weeks.

$GOLD Link $XAU Link $SILVER Link

Keene Little : 9/27/2006 3:37:21 PM

The buyers are saving it here. Interesting that the DOW found support at the bottom of a parallel up-channel for price action since Monday. There's still a good chance we'll see the DOW get pushed up to the new highs that everyone wants to see. It's the only way to pull in the retail traders so the Boyz can unload their inventory without causing a sell off. Link

Keene Little : 9/27/2006 3:25:29 PM

The DOW has given us a little 3-wave bounce off the low and has two equal legs up while just barely holding below 11688. It needs to drop back down now in order to give us a 5-wave move down from this morning. A continuation higher from here leaves the door wide open to a continuation to new highs.

Tab Gilles : 9/27/2006 3:22:15 PM

7-11/Citgo news link Link

Tab Gilles : 9/27/2006 3:19:34 PM

XLE Energy Spyder in my MM Open Position Portfolio, and VLO, MUR TXCO 3 stocks in my MM Stock Watch List.

XLE[followup 9/21 10:59AM post] Link


Jeff Bailey : 9/27/2006 3:18:00 PM

Look at that volume in the November Nat. Gas today Jane!

Jeff Bailey : 9/27/2006 3:14:11 PM

03:00 Internals found at this Link

Keene Little : 9/27/2006 3:12:26 PM

I just read Jim's post about 7-Eleven severing its tie with Citgo. I applaud 7-Eleven's action and will definitely give them my business in the future. What a great call on their part. Bravo.

Keene Little : 9/27/2006 3:10:43 PM

Looking at the move down in oil the past two months, and drawing in a parallel down-channel, the current bounce is taking it up to the top of the channel near $63.20. It has already reached the point where it had two equal legs up off the low on Sept 25th (at $62.60). The 30-min 100 and 130-pma's are at $62.88 and $63.73, resp. These averages stopped the bounce the last time it was tested on August 25th. So I'm thinking the bounce is about finished in oil and we should see the next leg down begin soon. Link

Jeff Bailey : 9/27/2006 3:03:33 PM

03:00 Market Watch found at this Link

Jane Fox : 9/27/2006 3:02:44 PM

Natural Gas is now "cooking with Gas."

Jeff Bailey : 9/27/2006 2:57:11 PM

Applied Materials (AMAT) $17.56 (unch) Link

Intel (INTC) $20.33 +1.85% Link

Keene Little : 9/27/2006 2:52:58 PM

So far we've got just a 3-wave pullback and internal Fibs say it could be done. If so we should see the buyers (and we know who they are) step back in and drive it higher. If we get a little sideways consolidation with the DOW staying below 11688 and then a new low, creating an impulsive 5-wave move down from this morning's high I'll dare say the fat lady has sung, maybe.

Jeff Bailey : 9/27/2006 2:47:05 PM

Newmont Mining (NEM) $42.70 -2.97% ... that's a "surprise" to me.

Jim Brown : 9/27/2006 2:47:43 PM

Here is the reason for the spike in oil prices:

Convenience store giant 7-Eleven has terminated its contract with CITGO gasoline.

CITGO is a subsidiary of the Venezuelan national oil company, Petroleos de Venezuela.

According to the Associated Press report:

7-Eleven spokesman Margaret Chabris said that, "Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president Hugo Chavez."


Jim Brown : 9/27/2006 2:44:59 PM

Dow has joined the Nasdaq and S&P and is now negative for the day as traders desert the sinking ship. The +50 point gain has been erased and the tape painters are beginning to lose traction. Don't count them out yet with two days left in the quarter but it is going to be a tough uphill battle from here.

Keene Little : 9/27/2006 2:43:05 PM

From a wave count perspective, looking at the rally up from Monday, the DOW needs to break below 11642 before any bearish damage is done. Until that happens this could be just another pullback before heading higher. For futures players I'm trying to anticipate the high in order to help reduce risk in entering bearish positions (since a new high is the time to jump back out and wait for another attempt). Entering lower is more difficult for me (I'm not a momentum player) because it's harder for me to select where an appropriate stop should be.

Keene Little : 9/27/2006 2:38:40 PM

It's looking to me like the brokers were the canary in the coal mine today. We'll have to see if it turns into something more significant (as in THE top) but so far it's a good start for the bears. I'm just having trouble believing the Boyz will let this go yet so I'm not ready to jump in with both feet. I added to my December puts position today and got a good price. At least I've got a tight stop on my whole bearish position at SPX 1350.

Tab Gilles : 9/27/2006 2:38:06 PM

Weekly EIA Report Link

Jim Brown : 9/27/2006 2:35:16 PM

Some Uranium links: Link Link Link Link

Jeff Bailey : 9/27/2006 2:34:00 PM

California Pizza Kitchen (CPKI) $30.20 +1.37% ...

Jeff Bailey : 9/27/2006 2:33:29 PM

The "fat lady" might be hungry for some pizza too.

Jim Brown : 9/27/2006 2:35:58 PM

CCJ has 20% of world production and RTP and BHP together control 30%. USEG is a very junior player with Uranium only a small part of its hard rock mining activities. Areva is also trying to gain market share at 15% but it is not traded in the US.

Jeff Bailey : 9/27/2006 2:30:07 PM

U.S. Energy (USEG) $3.89 +6.28% ... I'm not certain Jim, but I think they are perhaps one of the "biggest" uranium miners.

They've been selling this, and partnering with all sorts of other company's of late, I'm just not sure anymore.

Jim Brown : 9/27/2006 2:29:11 PM

Nasdaq and S&P now negative.

Jim Brown : 9/27/2006 2:28:16 PM

Oil $60 to $63 in a single day. Amazing.

Jeff Bailey : 9/27/2006 2:27:48 PM

Might take a week Jane ... remember your and my warnings to Oil bulls that were only watching the November crude oil contract into October expiration, not understanding trend and delivery implications.

Very similar dynamics to an option expiration.

Jim Brown : 9/27/2006 2:26:42 PM

Jeff, I wish they would start a Uranium fund like the USO. Uranium prices have not fallen for a single day since 2001. Global production is well below global consumption and there are 41 new plants under construction and another 50+ on the drawing boards. There is a uranium fund in Canada (TSE:U) but it is not big enough to properly reflect the rise in prices. A uranium fund in the states that controlled the actual product like USO or GLD would be huge.

Jeff Bailey : 9/27/2006 2:22:28 PM

U.S. Oil Fund (USO) $56.90 +2.67% ... a lot of work to be done, but so far, so good. Was close to my stop of $54.50 this morning Link

Jane Fox : 9/27/2006 2:22:05 PM

Jeff it is hard to tell if Oil is leading Gold or the other way around however, I do know that Crude leads Natural Gas. Unforunately NG is not following Crudes lead - yet. I am long Nat Gas.

Keene Little : 9/27/2006 2:21:22 PM

It's hard to believe the rally could be over, considering how close we came to the upside targets and an all-time high. But this break down looks bearish. This will either suck in enough shorts to help the manipulators jam it up one more time or else the fat lady is singing.

Jane Fox : 9/27/2006 2:17:35 PM

I expect 606.50 to be resistance for ZG the 100 oz Gold emini. I see a high today at 607 so this could be all we get. BUTTT I have been known to be wrong before... :)

Jim Brown : 9/27/2006 2:14:32 PM

BHI has turned into a rocket with a +$3 gain for the day on top of yesterday's gain.

Jeff Bailey : 9/27/2006 2:14:03 PM

Perhaps the economy isn't as weak as some thought?

Jim Brown : 9/27/2006 2:13:01 PM

Unbelievable spike in oil to $62.85. Somebody definitely believes the OPEC support at $60 scenario.

Jane Fox : 9/27/2006 2:11:55 PM

Commodities buyers have returned.

Jeff Bailey : 9/27/2006 2:11:51 PM

The CRB Index first broke above 300.00 in late February of 2005.

Jeff Bailey : 9/27/2006 2:08:54 PM

CRB Index (cr00y) 302.38 +0.55% (30-minute intervals) ... held the test pullback of 300.00 earlier this morning.

Jeff Bailey : 9/27/2006 2:08:51 PM

Yes Jane ... but it seems that oil is following gold. This may be a "key" observation not noted by some commodity traders in recent weeks (myself included).

Jane Fox : 9/27/2006 2:03:12 PM

Oil rallys and so does Gold.

Jane Fox : 9/27/2006 2:00:42 PM

Crude Oil is trying to break its PDH - just did!

Jane Fox : 9/27/2006 2:01:10 PM

Gold's price action and the MACD in the red boxes "predicted" the rally off the August 19th lows but now the the bulls have to prove the rally was more than just an oversold bounce. A close above 606.50 would give me a heads up and I would lose some of my bearishness. Link

Jeff Bailey : 9/27/2006 1:58:56 PM

What do all you Nat. Gas futures traders think? Repeat of Oil's October expiration? Yep... a little history repeating itself.

Jeff Bailey : 9/27/2006 1:54:35 PM

S&P 100 (OEX) with an out of its mind "bull fit 38.2%" retracement. Comments regarding major benchmarks and impact of 52-week highs. Link

Jane Fox : 9/27/2006 1:52:11 PM

Gold breaks to a new daily high. Its 200EMA is sitting at 606 (ZG and YG) and is the first resistance it needs to break and close above.

Jane Fox : 9/27/2006 1:46:02 PM

This has been one of the more tough days to trade.

Keene Little : 9/27/2006 1:45:54 PM

SPX is in the same boat as the DOW--a break to new daily lows will also be a break back below the top of its ascending wedge, leaving a throw-over in its wake. The picture just doesn't get much more bearish than that if it happens. Just be careful since we've still got 2-1/2 days for EOM activity. And so far the tops of those wedges are holding so the bulls still control the ball.

Keene Little : 9/27/2006 1:39:36 PM

Jim, I think you might be right. The brokers just broke below the bottom of its ascending wedge. The fat lady just sang on that one.

Jim Brown : 9/27/2006 1:36:46 PM

I think I hear the fat lady getting ready for the final performance.

Jeff Bailey : 9/27/2006 1:35:42 PM

01:15 Internals found at this Link

Keene Little : 9/27/2006 1:35:12 PM

The bulls are struggling with this here. The uptrend line from Monday is being lost. But the real test, as it did this morning, will be the top of its ascending wedge. A drop back to a new daily low will also be a drop back inside the wedge which would be a sell signal. Hard to believe they won't drive this to a new high since we're oh so close. I'm watching the DOW carefully since that's the one I've been most sure will get jammed higher. Maybe a head fake break to the downside to get the bear fuel they need for one more thrust to glory? Link

Jeff Bailey : 9/27/2006 1:17:40 PM

01:15 Market Watch found at this Link

Keene Little : 9/27/2006 1:03:03 PM

The bulls are doing it--DOW is driving back up above its broken uptrend line.

Jeff Bailey : 9/27/2006 1:01:23 PM

Well ... that's not bullish at all (OSTK). IF OSTK were to get a short-term bid on naked short sale legislation, those calls are gone at specified targets.

Keene Little : 9/27/2006 1:00:59 PM

It's all small stuff, but the DOW is in danger of losing it here. It has broken its uptrend line from Monday and is now back up for a retest. Come on bulls, don't lose it now--you're too close to letting CNBC pop the champagne corks (and probably put their eye out in the process). Link

Jeff Bailey : 9/27/2006 12:57:31 PM

Overstock.com Drops on Cut to "Sell" ... AP Story Link

Jeff Bailey : 9/27/2006 12:55:46 PM

There might be a "good test" for Keene's most recent bearish scenario.

Jeff Bailey : 9/27/2006 12:55:21 PM

Brazil Reduces Long-Term Interest Rate to 6.85%

Keene Little : 9/27/2006 12:55:13 PM

The OIX chart ties in with what I think will play out in oil--another drop after the current correction finishes and then a rally into the new year before rolling back over to new lows. The mid to upper $50's is a good downside target in my opinion. Link

Jeff Bailey : 9/27/2006 12:53:50 PM

Microsoft (MSFT) $27.36 +0.55% ... chief "rival" of RHAT and their open source Linux operating system.

Jeff Bailey : 9/27/2006 12:51:01 PM

Sun Microsystems (SUNW) $5.03 -0.98% ... might be one name among tech to keep an eye on.

RHAT $20.25 -23.06% earnings might have some very profitable SUNW bulls taking profits.

Keene Little : 9/27/2006 12:50:09 PM

The oil index (OIX) looks to be in a 4th wave correction and once it's complete we should see another move lower to finish a 5-wave count down from its August high. We should then get a bigger bounce into the end of the year before it rolls back over and heads lower. The index is hitting its 200-dma today so it'll be interesting to see if this tops off the bounce (it could continue sideways for another few weeks before heading lower). Link

Jeff Bailey : 9/27/2006 12:45:47 PM

Today's surge in unleaded inventory looks to be the refiners "topping off" as they get ready for the heating oil runs.

Distillate 15-500ppm would show inventory down 47.6% from this time last year. They can turn that out like candy, but its getting time for them to switch.

Jeff Bailey : 9/27/2006 12:42:16 PM

The next couple of weeks' EIA Oil Inventory data will be closely monitored. That's when the Katrina and Rita supply disruptions will give a more "clear" year-over-year inventory measure.

Jeff Bailey : 9/27/2006 12:36:36 PM

U.S. Oil Fund (USO) $55.97 +0.99% ... get'n green.

Jeff Bailey : 9/27/2006 12:32:22 PM

I have a craving for pizza, but I've been doing so much buying in recent weeks, I kind of want to see how things settle out next week.

Jane Fox : 9/27/2006 12:28:09 PM

The thing with Gold Keene is that I agree with Marc's fundamental analysis but I just don't anything bullish in the charts yet.

Tab Gilles : 9/27/2006 12:26:00 PM

A look at the $OEX & $EUR along with the $USD & $GOLD. Interesting look at the US & Europe. Link Link Link

Jeff Bailey : 9/27/2006 12:26:34 PM

Fascinating isn't it?

GSO.X +0.04% for last 5 sessions, but up 9.07% last 20.

SMH +1.42% for last 5 sessions, but up just 1.39% last 20.

Just like an inchworm moves.

QQQQ +1.08% last 5 sessions, +5.03% last 20.

Keene Little : 9/27/2006 12:22:25 PM

I agree Jane. Besides, Marc would be no fun to joust with if he gave in easily. I've also been proven wrong too many times by him to not take what he says seriously. I'm even eyeing a possible pattern for gold that is quite bullish.

Keene Little : 9/27/2006 12:20:33 PM

Another index that I like to watch, considering the fact that it's harder to manipulate, is the NYSE. It has an interesting setup that could be calling for a high right here. In the move up from Sept 11th it looks to have created an a-b-c move to the upside with wave-b as an expanded triangle (megaphone). Link

This type of pattern, with wave-b like that, almost always points to another leg up as the last leg up. Wave-c = wave-a at 8475 which was tagged today. It's a little early to call it here since this is just one idea for the pattern, but as I said, it raises an interesting possibility that today will be the market high, wherever that will be for SPX and DOW.

Jane Fox : 9/27/2006 12:17:02 PM

Marc no one talks you out of anything :)

Marc Eckelberry : 9/27/2006 12:16:00 PM

No one will talk me out of accumulating gold. It's the buy and hold trade going forward. See you later.

Jane Fox : 9/27/2006 12:13:26 PM

It is very possible ES will test its yearly highs at 1353.25 today and maybe even breach it by a few ticks but that resistance will not be easy to break. I will be watching the MACD when/if it does.

Keene Little : 9/27/2006 12:13:21 PM

Tab, that chart of VLE also shows the longer term bearish divergences at each new high. No surprises there.

Jeff Bailey : 9/27/2006 12:11:00 PM


DJ- Fast-food giant will pay an annual dividend this year of $1 a share, up from 67c last year. Firm has raised its dividend each year since paying its first dividend 30 years ago and is more than quadruple 2002's payment.

MCD $39.80 +1.92% Link

Jane Fox : 9/27/2006 12:10:33 PM

Take note that the VIX is breaking its daily lows at the same time ES is breaking its daily highs suggesting this new high is sustainable.

Keene Little : 9/27/2006 12:08:19 PM

The DOW's ascending wedge also shows a good possibility to reach its Fib target of 11764 by this afternoon. Looking at the move up from Friday there's an internal Fib projection from the wave count that points to 11757 which is good correlation with the larger pattern pointing to 11764. As shown on this chart, an extended 5th wave will sometimes reach equality with waves 1 through 3. If the DOW does in fact fail at the 11760 area that would be one heck of a double-top failure against the 2000 high. Link

Tab Gilles : 9/27/2006 12:02:01 PM

$VLE PnF Link

Jane Fox : 9/27/2006 12:00:39 PM



Marc Eckelberry : 9/27/2006 12:00:28 PM

Watch the COMP today and the May gap close at 2272.70. Above that, we have R at 2283 and 2289. Good places to start thinking short again.

Marc Eckelberry : 9/27/2006 11:58:44 AM

Back for a sec. If ES breaks above 1351, I would be looking at SPX 100% Projection August at 1352. That would be ES 1362 or so, but I think we will stay shy of that. Since I cannot trade anymore today, I have put an ES short at 1358.50, stop 1363.50. ES 1359 is 100% projection of last week. This would be a blow-off top scenario. I don't think we will get there, the news is quite bearish with durable goods. But I have the order in place, just in case. Anything is possible these days. But remember that initial bad news usually gets reflected agian at the close. I think many funds will book profits on the way up now and you never know when.

Tab Gilles : 9/27/2006 11:58:49 AM

Everyone has been concentrating on the DJIA, question is...How is the broader market doing?

Value Line Arithmetic Index ($VLE)

The Value Line Arithmetic Index contains approximately 1,650 stocks including blue-chip, mid-size and small-cap issues from a wide variety of industries, and they are equally weighted, making the Value Line the broadest-based of the major stock indexes with futures contracts. Other stock indexes are weighted by capitalization (the stock price multiplied by the number of shares outstanding) or by price. In those indexes, the movement of larger or higher-priced stocks has a disproportionate influence.

Because of these differences, the Value Line index's broad makeup makes it an excellent candidate for spread trading between more narrow indexes such as the Dow Jones Industrial Average SM index and the S&P 500 and broader capitalization-weighted indexes. Link

$DJIA Link Link

Jeff Bailey : 9/27/2006 11:57:25 AM

Swim with the tide ...

Keene Little : 9/27/2006 11:54:56 AM

Notice on that SPX chart that the negative divergences continue against new price highs. The hangover from this blatant manipulation could be very painful for those getting sucked in on the long side (other than scalping longs).

Keene Little : 9/27/2006 11:53:09 AM

SPX 1345 by this afternoon is a good possibility inside its short term ascending wedge (just another one of many on the different time frames in this market). Since many are expecting a rally into the end of the week, and we know what happens when too many expect something, it's possible we'll see the rally top out today. That's obviously pure speculation but an interesting idea as I look at this pattern today. Link

Jane Fox : 9/27/2006 11:50:31 AM

U.S. House committee issues subpoenas to five more subcontractors in H-P leak probe.

Jeff Bailey : 9/27/2006 11:49:14 AM

SAP Ag (SAP) my bar chart and passing a "first test" for strength at downward, and an old upward trend Link

Jane Fox : 9/27/2006 11:36:18 AM

Keene's frustration is been felt my the readers as well.

Dear Jane,
This market is so screwed up, so manipulated by the big traders that a lot of the time most of the technical analysis goes out the window. Things keep going up against all logic that it seems that the only way to make money is to be inside of the heads of the people that move the markets. And that ain't easy. So that's how I feel.

Jeff Bailey : 9/27/2006 11:31:27 AM

Disk Drive Index (DDX.X) 153.90 +2.29% ... tries to reclaim its 200-day SMA.

Jeff Bailey : 9/27/2006 11:30:26 AM

Oh My! ... AMAT $17.94 +2.16% ...

Jane Fox : 9/27/2006 11:26:23 AM


Jeff Bailey : 9/27/2006 11:22:50 AM

11:00 Internals found at this Link

Jeff Bailey : 9/27/2006 11:21:05 AM

CRB Index (cr00y) 300.10 -0.20% (30-minute delayed) ...

Keene Little : 9/27/2006 11:19:52 AM

We may have seen the high for the bounce in gold. It needs to get back below 590 to confirm but the wave count for a 4th wave correction looks complete at this morning's high. Even got the little throw-over. The reason it needs to break back below 590 is because the ascending wedge could continue higher after a pullback but so far this looks good for a short play. Link

Jane Fox : 9/27/2006 11:19:22 AM

IF ES breaks out of its range make sure that break is confirmed by the VIX breaking its range as well. Link

Keene Little : 9/27/2006 11:12:14 AM

The DOW is getting a slightly higher lift today as compared to the SPX. We'll probably see this as the Boyz try to jam it higher to a new all-time high. It's very easy to do when you're talking about only 30 stocks to manipulate.

Jeff Bailey : 9/27/2006 11:03:36 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 9/27/2006 10:56:04 AM

I have to go. OIl is holding on to 60. ES has R at 1347.25, 1348 and 1350. Support is 1343.25, 1337.

Jeff Bailey : 9/27/2006 10:55:01 AM

I was NOT expecting that type of build in Gasoline, and was looking for another draw of at 1 million barrels in Crude Oil.

Jeff Bailey : 9/27/2006 10:53:48 AM

U.S. Oil Fund (USO) $54.70 -1.29% ...

Jeff Bailey : 9/27/2006 10:49:27 AM

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

Jane Fox : 9/27/2006 10:48:22 AM

TRIN climbing to new daily highs at 1.25

Marc Eckelberry : 9/27/2006 10:47:51 AM

As expected, the dollar has reversed and is now lower.

Marc Eckelberry : 9/27/2006 10:43:10 AM

The housing jump is viewed as temporary. There is lots of inventory. The durable goods order is what will matter in the end. Rightnow, lost of noise over the oil drop, but we could have hit the highs for ES and NQ.

Tab Gilles : 9/27/2006 10:41:43 AM

Link for previous post - 9/27/2006 10:17:43 AM

Sept 27 (Reuters) - Jefferies & Co. said it raised its price target on Intel Corp. (INTC.O: Quote, Profile, Research). to $24 from $22 and maintained its "buy" rating on the company.

The brokerage said it was getting increasingly convinced the semiconductor company has turned around and is poised to regain market share with its new products, superior roadmap and manufacturing capabilities.

Tab Gilles : 9/27/2006 10:38:06 AM

$DJIA On 8 April 2004, American International Group, Pfizer, and Verizon joined the average, replacing AT&T, Eastman Kodak, and International Paper.

Since then the new replacements have underperformed the old replacements. AIG -12%; PFE -17%, VZ +6.5%/ Old stocks- T +45%; EK -10%; IP -16%.

So when the report that the DJIA is making new highs, its reality, based on the 2000 list, already has Link

Jane Fox : 9/27/2006 10:36:35 AM

Internals are unclear today causing the markets to trade all over the map with no direction.

Jane Fox : 9/27/2006 10:33:07 AM

Nat Gas is also falling in support of Oil

Marc Eckelberry : 9/27/2006 10:32:41 AM

QM has support at 60.85.

Jane Fox : 9/27/2006 10:32:28 AM

TICKS +800.

Jane Fox : 9/27/2006 10:32:12 AM

Crude futures didn't like the inventories report and neither did Gold. Gold and Oil trade in unison.

Marc Eckelberry : 9/27/2006 10:32:09 AM

This should help stocks for now.

Marc Eckelberry : 9/27/2006 10:31:36 AM

Big drop in oil.

Jane Fox : 9/27/2006 10:31:19 AM


Keene Little : 9/27/2006 10:28:33 AM

The brokers (XBD) are in an ascending wedge from the Sept 11th low and have tagged the top of the parallel up-channel (bear flag from the July low). I showed a 240-min chart yesterday and this 60-min chart zooms in a little closer. The uptrend line from Sept 11th is near 228.25 so we'll get to see if that acts as support for one more fling to the upside (the way I'm currently leaning) or if instead we start to see a break down. The brokers have been a good proxy for the broader market so this chart bears watching. Link

Jane Fox : 9/27/2006 10:26:26 AM

Crude inventories out in 5.

Jane Fox : 9/27/2006 10:26:11 AM

Natural GAs breaks to new yearly lows.

Keene Little : 9/27/2006 10:21:32 AM

The banks and the brokers are more negative today than the broader market. That's not usually a good sign for the rally.

Marc Eckelberry : 9/27/2006 10:21:28 AM

Oil is next on the radar

Keene Little : 9/27/2006 10:18:23 AM

SPX only needs 5 more points to hit its 1345 target and the DOW needs 50 more to hit its Fib target at 11764. The question is whether it'll be straight up from here or after a pullback. The uptrend line from Monday morning, which SPX has been riding tightly up since yesterday morning's pullback, should be a good guide in that respect. The current little pullback is again hitting that uptrend line (ES is slightly breaking below it).

Tab Gilles : 9/27/2006 10:17:43 AM

Intel (INTC) One of the stock I track in my Stock Watch List. Link Link

Jane Fox : 9/27/2006 10:15:11 AM

EGads first of all the bears have the ball then the bulls grab it now the bears have it.

Marc Eckelberry : 9/27/2006 10:12:46 AM

Who will win. Durable goods or home sales. Or window dressing. Watch ES 1347.25 and above that 1348.

Marc Eckelberry : 9/27/2006 10:10:01 AM

COMP almost closed the May gap at 2272.70.

Marc Eckelberry : 9/27/2006 10:09:43 AM

ES must hold 1347.25 here.

Jane Fox : 9/27/2006 10:07:04 AM


Keene Little : 9/27/2006 10:07:15 AM

In the category of "How do they get away with this?", reader Joe emailed me a link to the following news release:
NEW YORK (MarketWatch) -- Six brokerage firms said Wednesday they are teaming up to fund and form Block Interest Discovery Service ("BIDS"), an alternative trading system for big blocks of shares. The companies said the system is designed increase competition. The six firms are Citigroup (C), Goldman Sachs (GS), Lehman Brothers (LEH), Merrill Lynch (MER), Morgan Stanley (MS) and UBS (UBS). The group said BIDS expects to name a CEO in the next few weeks and, subject to regulatory approval, begin trading in early 2007."

As I've reported several times in the past, these are the mega-banks (the Fed's primary dealers) that are funded and fully supported by the Fed and SEC to do their "risk-free" trading. They've been making billions with their trading teams and now that's apparently not enough. Now the Fed and SEC will give them further license to steal from the public by allowing them to create a monopoly that would never be tolerated anywhere else. As Joe said to me, can you imagine if the top oil companies tried to do something like this? They'd be accused of price fixing. Our financial system has truly become a government controlled entity and our free market no longer is. Makes me sick.

Marc Eckelberry : 9/27/2006 10:05:02 AM

ES hits montly R2 at 1350.

Jane Fox : 9/27/2006 10:04:53 AM

WASHINGTON (MarketWatch) - Sales of new homes increased 4.1% in August to a seasonally adjusted annual rate of 1.05 million from a three-year low in July, the Commerce Department reported Wednesday.

It was the first increase in new-home sales since March.

Sales are down 17.4% in the past year and are down 23% from the peak last July.

Sales in May, June and July were revised sharply lower. July's sales pace was revised to 1.009 million, the lowest since March 2003, from an earlier 1.072 million.

According to the MarketWatch survey, economists were expecting sales to fall about 3.4% in August to a seasonally adjusted annual rate of 1.036 million. The August result is about 1.4% higher than expected.

Marc Eckelberry : 9/27/2006 10:04:12 AM

A thing of beauty, this paint taping.

Jeff Bailey : 9/27/2006 10:03:33 AM

10:00 Market Watch found at this Link

Jane Fox : 9/27/2006 10:01:53 AM

These are getting pretty bullish and certainly no tiem to be short. Link

Jane Fox : 9/27/2006 10:01:16 AM


Jeff Bailey : 9/27/2006 10:00:18 AM

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

Jane Fox : 9/27/2006 9:58:58 AM

VIX hugging daily lows now suggesting ES's daily highs will break.

Keene Little : 9/27/2006 9:54:20 AM

I don't watch the Cheerleading Network of Buffoons and Clowns but Denise emailed me to let me know they're on DOW watch now, waiting to celebrate the inevitable new high. They mentioned that the DOW is composed of a couple of different stocks than it was in 2000 and that the 2000 composition would already be at a new high.

Whatever. As Denise mentioned, it's all a game anyway. We know that the DOW stocks removed tend to do much better than the DOW the following year and just the opposite for the stocks added to the DOW. Whoever is on that selection committee is someone you don't want managing your portfolio. And as for the level of the DOW this year as compared to 2000, it should be around 15,000 if it had only kept pace with inflation. Bulls need to stick that in their pipe and smoke it.

Jane Fox : 9/27/2006 9:46:17 AM

ES's PDH is 1347.25 and may be resistance before it reaches the ON highs.

Jane Fox : 9/27/2006 9:45:34 AM

Well so much for the bears taking control - tICK +800

Jane Fox : 9/27/2006 9:44:03 AM

ES's overnight high was 1348.75 and should be resistance if it reaches that level today.

Marc Eckelberry : 9/27/2006 9:42:33 AM

YG support: 599.30, 597 and 591.

Jane Fox : 9/27/2006 9:41:31 AM


Jane Fox : 9/27/2006 9:40:35 AM

Looks like the bears are gaining the upper hand here.

Jane Fox : 9/27/2006 9:37:40 AM

ES probes its daily highs as VIX probes its daily highs. Don't think ES will break those highs.

Keene Little : 9/27/2006 9:35:38 AM

SPX and DOW are holding the line here. No spike down. No pullback this morning off the bad economic news will frustrate the bears to no end.

Jane Fox : 9/27/2006 9:32:57 AM

AD line -366 and AD volume is basically 0 - no direction.

Marc Eckelberry : 9/27/2006 9:31:29 AM

Watch ES now and the 1348 level.

Marc Eckelberry : 9/27/2006 9:31:00 AM

In any case, gold is up 5% from lows of 577.

Jane Fox : 9/27/2006 9:30:33 AM

Surely cannot disagree with that either.

Keene Little : 9/27/2006 9:30:27 AM

If SPX opens down this morning, and stays there, that would damage its chart. Yesterday's close was a small pop above the top of its wedge (throw-over?) and a drop back below the line is a sell signal. It's there but the mitigating factor, as we all know, is the big money behind holding the market up this week (for all we know it could be held up well into October for elections).

The minimum Fib projection for the leg up (62%--1331.78) from Sept 22nd has been met and it's an impulsive move for the c-wave as it needs to be. If I were going strictly off this chart and nothing else, I'd be shorting it with a drop back down. Link

Marc Eckelberry : 9/27/2006 9:30:03 AM

I read the charts as bullish for gold now starting on the lower time frames. It always takes a little time.

Jane Fox : 9/27/2006 9:28:15 AM

Actually Marc fundamentally I agree with you - it is just that the charts do not agree.

Marc Eckelberry : 9/27/2006 9:28:30 AM

Jane, we are in such fundamental economic disagreement, we will leave it at that. But I think gold will be at 850 next year.

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

You cannot have a strong dollar with rate cuts and a slowing economy. Of course, if housing picks up and we have a surprise economic boom, Feds can raise again and the dollar will find its footing. But I doubt it.

Jane Fox : 9/27/2006 9:24:48 AM

And then there was the study done on which markets correlate to Gold the best. This study found three; US $ (inverse), Swiss Franc (inverese) and Oil (direct). Then found the weekly MAs that each market needs to trade above or below. Here are those charts. Another nail in the coffin for Gold bugs - albeit this is a much longer term look at Gold. Link

Marc Eckelberry : 9/27/2006 9:23:56 AM

I doubt we will get a soft landing now and Feds will not be able to raise rates and support the dollar. We could be in a recession by Q1. That will not be bullish for the dollar.

Marc Eckelberry : 9/27/2006 9:22:05 AM

I doubt that will last Jane. In any case, gold had a lower low with a bullish divergence and bull flags all the way up. I still don't see the problem with having bought gold in the 580"s. In fact, it is turning out to be one heck of a trade. As for the dollar, it is headed down, down, down.

Jane Fox : 9/27/2006 9:19:49 AM

The last nail in the coffin for Gold is that the charts of the US $ are bullish.

Keene Little : 9/27/2006 9:19:06 AM

The last paragraph of Jane's 8:45 post: "Continued strength in capital spending is considered to be essential to the expected soft landing in the U.S. economy." Got your bubble-wrap underwear on?

The Boyz may let this pull back today, maybe even hard, so as to suck in the bears who will believe the market can't possibly rally on bad economic news. Oh no? How many times have we seen that happen? With a little more bear fuel in the tank the Boyz can then ramp it up again for the finale this week. Being this close to new all-time highs for the DOW and the 1345 target for SPX and I'll be very surprised if we don't make it. Another failure to do so, like in May, would be bearish to an extreme. Hmm, keep those bubble-wrap knikcers around.

Jane Fox : 9/27/2006 9:18:04 AM

Marc I cannot argue against your position on Gold it is just that the charts (IMHO) are showing that traders are not thinking the same way.

Marc Eckelberry : 9/27/2006 9:17:29 AM

Frankly, no matter how much they tape it, it will be hard to justify DOW new all time highs now. First the Philly and now the durable. Add rising oil (for now) and I remain very cautious. I think many longs will be getting out on rallies. I covered a short from 1348.50 at 1344, and I will see what opening bounce there is.

Marc Eckelberry : 9/27/2006 9:14:47 AM

Jane, I like gold more than ever now. This report will weaken the dollar and we should see 620 by week's end. The question will be how much it can withstand a drop in oil, since the economy is slowing this much. But gold is the refuge against a falling currency.

Jane Fox : 9/27/2006 9:13:42 AM

NEW YORK (MarketWatch) -- Treasury prices shot higher early Wednesday, sending yields lower, after news that durable-goods orders unexpectedly declined in August, confounding economists' expectations for an increase.

The bond market cheered the news because it advances the case for an end to the Federal Reserve's rate-tightening cycle.

Jane Fox : 9/27/2006 9:12:30 AM

Gold is also not showing me any MACD or RSI divergences to suggest it will close above resistance.

Jane Fox : 9/27/2006 9:11:21 AM

I have shown this chart many times but let's do a quick recap. I will remain bearish on Gold until I see it close above resistance - just that simple. Resistance is Blue Trendline from August 2005, 200EMA, support turned resistance at 615-616.50 (the biggest hurdle), 50EMA, 100 EMA and Red downward trendline from August 2006. Link

Jane Fox : 9/27/2006 9:03:17 AM

TBonds' overnight highs and lows match its PDH and PDL giving you a very clear picture of support and resistance. This market has had a very nice run of late and needs to take a rest. I would not try shorting it but if long you may think about taking some profits here. I will show a daily chart of TBonds later.

OIL had a mostly neutral overnight session and remains severely oversold.

Natural Gas broke its PDL overnight and remains severely oversold as well.

Gold broke its PDH overnight but remains in a sideways coil that I think will break to the downside. Link

Jane Fox : 9/27/2006 8:54:50 AM

Equity markets did not like the durable goods report and all made new overnight lows. Considering the rally these markets have had the last two days though a little profit taking is not unexpected. When you see the markets drop or rally in response to an 8:30 economic report the overnight highs and lows become very clear levels of support and resistance so make sure you mark them on you charts for today's trading. Link

Marc Eckelberry : 9/27/2006 8:53:37 AM

Regardless of the news, the charts hit exact key resistance. NQ monthly R2 and ES weekly R2 and more importantly, 1348.75 which is 61.8% August projection. See my post before the news broke at 8:02:17 AM.

Marc Eckelberry : 9/27/2006 8:49:57 AM

Gold broke out above the 600 level. Support is now 599.30.

Marc Eckelberry : 9/27/2006 8:47:30 AM

NQ pivot support here at 1670, but that was one big slam. Computer orders dropped as well. NQ hit the 1680 level I talked about yesterday and now we see where we go from here, but that was an exact high so far.

Jane Fox : 9/27/2006 8:45:57 AM

WASHINGTON (MarketWatch) - Despite increased demand for autos, orders for U.S.-made durable goods fell 0.5% in August as orders for aircraft, electronics, machinery, metals and electrical goods crumbled, the Commerce Department reported Thursday.

It was the first back-to-back decline in orders since early 2003. July's decline was revised lower to 2.7%.

Ominously, the report showed weak demand in almost every sector except autos, which is undergoing a traumatic restructuring and is not likely to contribute much to growth in the near-term.

Orders for core capital goods equipment - business investment goods - fell 0.3% in August. Shipments of core capital goods rose 0.3% after a 1.6% gain in July, an indication that business investment could be weaker than expected in the third quarter after a surprising drop in the second quarter.

Continued strength in capital spending is considered to be essential to the expected soft landing in the U.S. economy.

Jane Fox : 9/27/2006 8:41:22 AM

Dateline WSJ Alert - The chief executives of GM and Nissan-Renault decided to continue talks about a possible alliance.

Marc Eckelberry : 9/27/2006 8:36:26 AM

Big dro on the durable goods order. Looks like we nailed a good spot at 1348.75. Pivot is 1342.50 and support.

Marc Eckelberry : 9/27/2006 8:02:17 AM

ES 1348.75 is 61.8% projection August. We should back down to about 1343/1344 at this point before the next leg up. At market open, I am watching the COMP and May gap close at 2272.70.

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