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Marc Eckelberry : 10/5/2006 2:22:04 AM

ECB should raise rates which would impact the dollar negatively. I am suprised to see so much dollar optimism ahead of an ECB rate hike and a possible US rate cut. If oil keeps this bid, gold could surprise some traders. For now, support at 565 is important.

Marc Eckelberry : 10/5/2006 2:19:05 AM

AA has 3 times the amount of puts at 27.50 strike and could benefit from some short covering if it comes in line.

Marc Eckelberry : 10/5/2006 2:16:49 AM

SPY 135 strike .38 pc ratio (SPX 1350).

Jeff Bailey : 10/5/2006 2:03:56 AM

RIO put holders. Let's keep a close eye on AA tomorrow/this morning and market reaction to earnings.

RIO Link and AA Link considered "non-ferrous metals" stocks. RIO not just aluminum, but many industrial metals as well as some precious.

Marc Eckelberry : 10/5/2006 1:40:14 AM

KOHN SAYS SURPRISED MARKET DOESN'T SHARE HIS SENSE OF RISK
KOHN SAYS HEIGHTENED RISKS ON ALL SIDES OF HIS FORECAST
KOHN SEES UPSIDE INFLATION RISKS AND DOWNSIDE GROWTH RISKS

Jeff Bailey : 10/5/2006 1:04:26 AM

Mortgage Bankers Assoc. week ended 09/29/06 release Link

Tab Gilles : 10/5/2006 12:53:01 AM

Yesterday, morning 10/3 11:21AM, I questioned the selling as being a major or a pullback?....my opinion was it was a pullback according to indicators I track. Remain bullish...going much higher.

Open Positions and Stock Watch Link

$NDX/$NAA Link

$NAHGH/$NALOW/$NDX Link

$NASI/$NDX Link

$NDXA50 & $NDXA200 Link Link

Profund UltraOTC Fund (UOPIX Link

Profund Ultra SmallCap (UAPIX) Link

Jeff Bailey : 10/5/2006 12:47:34 AM

None of those PnF charts really winds my clock at this point. I'd rather be a buyer of a stock like GRMN Link that is above trend, triple top buy signal. It's in ELECtronics.

Jeff Bailey : 10/5/2006 12:40:21 AM

Auto Parts stores/companies by Market Cap ... Link

AZO Link

ORLY Link

AAP Link

PBY Link (One of Jane's old favorites)

CAO Link

MDS Link

Jeff Bailey : 10/5/2006 12:34:09 AM

What did you think of regarding AUTO&parts? Me too! Link ... I think I missed that one.

A little "retail" flavor too!

Jeff Bailey : 10/5/2006 12:30:01 AM

Sector Bullish % Changes

AUTO&parts reversed back up from bear correction to bull confirmed.

REALestate reversed back up from bear correction to bull confirmed.

Keene Little : 10/5/2006 12:23:15 AM

We've had an ascending wedge developing for many of the indices and sectors since July and yet prices keep pressing higher. Without trying to sound like a conspiracy theorist I will say we seem to have "extra" money coming into the market that keeps driving it higher while the market breadth continues to deteriorate as compared to each previous high. How long this can continue is anyone's guess.

The EW pattern that I show on this ES 60-min chart appears to be a good fit and I show a projection now to 1365 early next week for an end to the run. Price will of course be the final arbiter but I'm looking for a sideways/down correction over the next day or so that takes ES back down to around 1354. Link

I like that number only because it sets up a Fib projection (for the 5th wave to equal the 1st wave in the move up from Oct 2nd) to be the same as the Fib projection for the move up from Sept 22nd (two equal legs up) at 1365. The equivalent level for SPX is 1356 which would stop me out of my short position but if I like the setup at 1356 I'll get right back in short.

Keene Little : 10/4/2006 10:02:36 PM

Thursday's pivot tables: Link and Link

OI Technical Staff : 10/4/2006 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.

Marc Eckelberry : 10/4/2006 9:29:27 PM

NDX could get right up to 1744 if they mean business.

Marc Eckelberry : 10/4/2006 9:18:45 PM

Given the light amount of cash left out there from funds, this rally smells like good old short covering. Smart money does not commit at "all time highs". They are already in. It's retail and more importantly a tough group of big traders that run stops to nail all the shorts. It's a game and they play it well. But where are the semis?

Marc Eckelberry : 10/4/2006 9:13:18 PM

Mmm. QM 60.60/60.65 looks attainable. Everyone shooting for a 60.30 short, but that one could get hit just to run some stops.

Marc Eckelberry : 10/4/2006 9:08:49 PM

QM is back above 60.

Marc Eckelberry : 10/4/2006 9:08:23 PM

My only caveat is the everyone is expecting DOW 12K, so I think it could be YM 12K, and that's it. Of course, if we correct tomorrow because of Alcoa (commodities are having a rough time), then it might be postponed enough to bring futures closer to cash.

Marc Eckelberry : 10/4/2006 9:05:49 PM

Reading through the posts...Here is my guess for the top, SPX: 1367.79, although we might waffle a few days before getting it.

Marc Eckelberry : 10/4/2006 8:41:51 PM

QM has resistance at 60.35, R1 and 5 DMA

Marc Eckelberry : 10/4/2006 8:39:04 PM

Gold, gold, gold.

Marc Eckelberry : 10/4/2006 8:38:38 PM

Oct. 4 (Bloomberg) -- Federal Reserve Vice Chairman Donald Kohn said he's more concerned about persistent inflation than slowing growth in an economy that's likely to avoid a recession. "The risks to my outlook for economic activity may be skewed to the downside, while those to my forecast of gradually declining inflation are tilted to the upside," Kohn said in the text of remarks to the New York University Money Marketeers. "In the current circumstances, the upside risks to inflation are of greater concern."

Marc Eckelberry : 10/4/2006 8:22:58 PM

What boggles the mind is that we haven't even kicked off earnings season yet. Alcoa tomorrow.

Marc Eckelberry : 10/4/2006 8:21:41 PM

I step away for a few hours and the market explodes. I guess my quip about YM 12K might not be so far from the truth! Absolutely amazing.

Jeff Bailey : 10/4/2006 7:47:20 PM

I haven't seen any same-store sales from CPKI at this point. Link

I have to run ... see you in the morning.

Jeff Bailey : 10/4/2006 7:39:19 PM

Papa John's (PZZA) $36.68 +3.85% Link

Jeff Bailey : 10/4/2006 7:37:17 PM

Restaurants Rally

AP Story Link

Jeff Bailey : 10/4/2006 6:36:20 PM

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

Today's Activity

Bullish swing traded long one (1) of the Altria MO Jan $80 Calls (MO-AP) at the offer of $1.95. Not stop for now and targeting a pop to $81.00.

Jeff Bailey : 10/4/2006 5:54:52 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/4/2006 5:51:20 PM

Closing Internals found at this Link

Jeff Bailey : 10/4/2006 5:51:16 PM

Good Gravy! Are those NYSE NH correct? I thought we might see a build when the BIX.X achieved another new high, but really now!

Jeff Bailey : 10/4/2006 5:50:47 PM

Oh my! Look at today's NYSE and NASDAQ volumes. Me thinks some M2 came into the markets today. It sure didn't come OUT of Treasuries.

Jeff Bailey : 10/4/2006 5:32:07 PM

Brazil's Closing Stock Prices Link

Brazilian Bovespa ($BVSP) Link was up 1,311.74, or +3.60% at 37,749.29.

RIO Link

Jeff Bailey : 10/4/2006 5:32:02 PM

Key U.S. Treasury Interest Rates at this Link

Jeff Bailey : 10/4/2006 5:31:50 PM

Very good coverage (05:08:54) of the "dynamics" of how bond traders look at things. (ie. Government, then corporate, eventually "junk")

Jeff Bailey : 10/4/2006 5:08:54 PM

Bear Stearns Cuts Indonesia Sovereign Debt On Tight Spreads

DJ- Bear Stearns on Wednesday downgraded its recommendation on Indonesia's sovereign debt to marketperform from outperform, citing the recent sharp rise in prices and the current tight level of spreads.

"After widening out during the market malaise in August, Indonesian bonds have appreciated sharply in price, while their yields have fallen rapidly," Bear Stearns said in a research note.

The spread on Indonesia's 2016 Global bond is around 188 basis points while the spread on the 2035 bond is around 228 basis points, it said.

"Given these tight spreads and high prices, we see lesser prospects for further appreciation in the near term, and, thus, downgrade our rating for Indonesia," it said.

"Nevertheless, we expect Indonesian economic performance to improve significantly by year-end as inflation and interest rates come down. This should help set the stage for a recovery of investment and bank lending in 2007," Bear Stearns said.

The investment bank highlighted the electric power sector as "one key weakness," with the state power company likely to issue new bonds to finance investments.

Repeated brown-outs and blackouts over the last year in the capital, Jakarta, and other cities reflect "little spare capacity in the national power grid and a steady decline in excess production capacity," it said.

The state-owned power company, Perusahaan Listrik Negara, or PLN, plans to issue up to $1.5 billion of foreign bonds to fund expansion of its power production and transmission capacity, the investment bank said.

Standard & Poor's and Moody's Investors Service both have rated the new issue at the level of their respective sovereign ratings, double-B-minus and B1, Bear Stearns said.

"The sovereign, it seems, will not offer a guarantee for these bonds," it said.

While the company has "implicit sovereign support" because the government is the sole owner, PLN by itself appears to be financially weak, Bear Stearns said.

"Thus, we would expect the bond to come to market at a premium over the sovereign. The attractiveness of the bond will depend on the size of the premium," it said.

Jeff Bailey : 10/4/2006 4:53:51 PM

Headlines still streaming on AAPL. PR Newswire Story Link

Jeff Bailey : 10/4/2006 4:50:45 PM

Apple Computer (AAPL) $75.38 +1.75% Link ... $76.00 extended.

Jeff Bailey : 10/4/2006 4:49:28 PM

Alert! Apple Computer: Special Committee Reports Findings of Stock Option Investigation

No Misconduct By Any Member Of 'Current Management'

Jobs Aware Of Favorable Dates In A Few Instances

Jobs Did Not Receive Or Benefit From Grants

Fred Anderson Resigns From Bd

Jeff Bailey : 10/4/2006 4:45:36 PM

Integrated Device Tech To Cut 300 Jobs At Malaysia Plant

Integrated Device Technology Inc. (IDTI) will outsource assembly operations that are currently based at its Penang, Malaysia, plant, eliminating 300 jobs, the semiconductor products company said Wednesday.

Assembly work that has been done at the Malaysia assembly and test facility will be done by semiconductor assembly and test services company Advanced Interconnect Technologies Ltd., Integrated Device Technology said in a Securities and Exchange Commission filing.

The move is part of Integrated Device Technology's long-term profitability strategy and should reduce ongoing operating expenses, the filing said.

The company's total operating expenses jumped almost 90% to $87.6 million for the first quarter ended July 2, up from $46.5 million for the same period in 2005, according to a report filed with the SEC in August.

Integrated Device Technology in San Jose said the transfer of assembly work to Advanced Interconnect Technologies should take a year, the filing said.

The filing didn't say where Advanced Interconnect Technologies will do the assembly work, but according to its Web site, Advanced Interconnect Technologies has factories in Batam, Indonesia, and Sunnyvale, Calif.

Integrated Device Technology's Penang facility will remain open after the transition and the company expects it to continue testing and other support activities, the filing said.

Integrated Device Technology shares closed Wednesday at $15.71, up 19 cents.

Jeff Bailey : 10/4/2006 4:42:31 PM

Small Stocks Climb After Data, Bernanke Speech

DJ- Small stocks climbed and outpaced the broad market Wednesday as inflation worries eased and investors reacted positively to comments from Federal Reserve Chairman Ben Bernanke.

Consumer-sensitive sectors were among the day's biggest gainers. Small restaurant stocks rallied after P.F. Chang's China Bistro said its consolidated third-quarter revenue rose 14% to $231 million from $203 million. P.F. Chang's rose 3.01, or 8.5%, to 38.61; Bob Evan's Farm's rose 2.12, or 7%, to 32.59; and CEC Entertainment climbed 1.24, or 3.9%, to 32.92 on the NYSE.

The biotechnology sector climbed as investors weighed the possibility of more mergers and acquisitions within the group. Large cap ImClone said billionaire investor Carl Icahn rejected a major pharmaceutical company's bid last month to acquire the biotechnology company for $36 a share in stock. Among small biotech stocks, Regeneron Pharmaceuticals gained 85 cents, or 5.4%, to 16.49, and Albany Molecular Research rose 47 cents, or 5.1%, to 9.66.

The Russell 2000 small-stock index added 15.12, or 2.10%, to 733.47. The Standard & Poor's SmallCap 600 Index climbed 7.01, or 1.90%, to 375.

"The Fed chairman gave some clues that rates are going to be unchanged, and seems like we are heading for a soft landing (in the economy)," said Anthony Conroy, managing director at BNY Brokerage. "Investor sentiment is good and the rally was broad based with transports leading the way."

Stocks also did well because oil remained below $60 a barrel and data from the Institute for Supply Management indicated that inflation is in check, he added.

Jeff Bailey : 10/4/2006 4:39:25 PM

Hasbro Started At "Mkt Perform" At BMO Capital

HAS $22.91 +1.86% Link

Jeff Bailey : 10/4/2006 4:36:16 PM

Jakks Pacific Started At "Mkt Perform" at BMO Capital

JAKK $18.18 +1.73% Link

Jeff Bailey : 10/4/2006 4:33:57 PM

SBUX $35.96 +5.73% ... jumps to $37.07 extended.

Jeff Bailey : 10/4/2006 4:33:28 PM

Starbucks Sept. Same-Store Sales Up 6% ... Sept. Revenue $790M

Jim Brown : 10/4/2006 4:33:35 PM

HOTT sames-store-sales -7.3% - Hot Topic Inc., an apparel retailer for teens and young adults, said Wednesday its same-store sales in September fell a sharper-than-expected -7.3 percent and projected third-quarter earnings at the low end of a previously issued forecast.

Jeff Bailey : 10/4/2006 4:31:55 PM

Holly Corp. (HOC) $41.50 +4.14% Link ... DJ- Company's Chairman Is Hospitalized In London.

Jeff Bailey : 10/4/2006 4:28:29 PM

FASB MAY CHANGE PENSION DISCLOSURE

DJ- Financial Accounting Standards Board considers tomorrow whether to require companies to reveal how much they expect to contribute to employee pension plans. Currently companies only disclose such plans for upcoming year.

Jeff Bailey : 10/4/2006 4:27:25 PM

CBOE SEEKS TO GET CBOT SUIT TOSSED

DJ- Chicago Board Options Exchange wants a judge to dismiss a lawsuit filed by the Chicago Board of Trade, claiming it is 'premature' for CBOT to take legal action as the CBOE goes public.

Jeff Bailey : 10/4/2006 4:26:23 PM

HENDEL TO RETURN TO MORGAN STANLEY

DJ- Stuart Hendel is leaving the $5.5 billion hedge fund Eton Park Capital Management to return to Morgan Stanley to head the firm's global prime-brokerage business, which caters to hedge funds.

Jane Fox : 10/4/2006 4:06:05 PM

SAN FRANCISCO (MarketWatch) -- Starbucks Corp. headlines a raft of retail sales reports due after the bell Wednesday as investors tune in to the extended session to see if the market can hold on to the heavy gains notched in regular trading.

Coffee giant Starbucks (SBUX) may set the tone later, joining other retailers Hot Topic (HOTT) , American Eagle (AEOS) and Ethan Allen (ETH) with their monthly sales results.

On the tech front, watch for Sirius Satellite Radio (SIRI) to again show up among the most actives. The stock took a hit early after rival XM Satellite Radio (XMSR) said one of its board members resigned for personal reasons.

Jeff Bailey : 10/4/2006 4:05:16 PM

Thanks Keene!

Keene Little : 10/4/2006 4:03:01 PM

Interesting chart on UPS Jeff. As you've shown, UPS has bounced up to the 50% retracement of its decline. At the same time it's reached the top of its ascending wedge for price action since the August low (mine is drawn a little differently than yours since I use only the highs following the low). It appears to be an a-b-c-d-e type of correction (very common count within triangles, as this one is). Link

Wave-e could be finishing very close to today's high; maybe a little throw-over above the line. I've also shown a retracement for the gap since typically 50% of a gap is resistance. That's at $75.90. The 2nd leg up in the bounce from Sept 22nd reaches 162% of the 1st leg at $75.08 and would give us the little throw-over. Something to watch for here as I think this is setting up a good short play.

Jim Brown : 10/4/2006 4:01:49 PM

ER Short - I did not get the exact top but I am now short at 739 with a stop at 742. Any warnings after the close could be exciting.

Jeff Bailey : 10/4/2006 4:01:09 PM

Didn't want that much broadening out of internal strength.

Jeff Bailey : 10/4/2006 3:58:20 PM

Companhia Vale do Rio Doce (RIO) $21.69 +3.77% ... moves into yesterday's gap.

Jim Brown : 10/4/2006 3:58:04 PM

The Russell futures are nearing the 740 resistance I mentioned earlier. I am going to take a short at the close with a stop at 742.

Jeff Bailey : 10/4/2006 3:55:04 PM

FedEx (FDX) $111.53 +1.81% ... edges above its 61.8% ($111.28) 05/09/06 high to recent 08/24/06 low closes.

Keene Little : 10/4/2006 3:54:57 PM

One thing I wish we were still getting is M-3 data--how much money the Fed is creating. Much of their work behind the scenes is not with interest rates but instead with the amount of money in the banking system. If they're worried the economy is slowing down too much, especially with the "softening" in the housing market, they could easily be pumping large amounts of money into the system.

This money typically gets injected into the banking system via their primary dealers which of course are the same big banks making gazillions with their trading teams. They simply buy up the market, adding their own considerable cash to the Fed's, and we get rallies like we're seeing today in bonds and equities.

Jim Brown : 10/4/2006 3:54:22 PM

Tomorrow is earnings warning day.

Jane Fox : 10/4/2006 3:53:12 PM

The only thing on the Economic Report docket tomorrow is the 8:30 initial claims.

Jeff Bailey : 10/4/2006 3:52:29 PM

Need a wave count on this one Keene ... UPS Link

Jeff Bailey : 10/4/2006 3:51:37 PM

S&P Insurance Index ($IUX.X) 374.02 +1.03% ... that's a 52-weeker.

Keene Little : 10/4/2006 3:48:44 PM

NYSE is now not far from the top of its channel/ascending wedge at 8556 (currently 8534).

Jeff Bailey : 10/4/2006 3:47:33 PM

Oh my...

Jeff Bailey : 10/4/2006 3:47:02 PM

Not bad for somebody "new" to this stuff ... (grin) ... (jab, jab)

Keene Little : 10/4/2006 3:46:39 PM

Obviously those who are trying to short this market are not having an easy time of it. But looking at the advance-decline numbers and the new highs vs. new lows continues to throw cold water on this rally. Market breadth is waning, not improving. Even the chart of new highs since the May high and the rally since June shows weakening participation. Notice the bearish divergences on this chart as well. Once again, it doesn't mean it'll turn back down now (especially since we don't know what big money will try to do in holding this market up into elections) but it is a warning sign for the bulls. Link

Jim Brown : 10/4/2006 3:45:56 PM

Jeff, RE your 3:43 post. I think you will see Dow 12000 next month.

Jeff Bailey : 10/4/2006 3:45:16 PM

S&P Retail Index (RLX.X) 490.08 +2.00% ... new 52-weeker and all-time high here.

Jeff Bailey : 10/4/2006 3:43:44 PM

Now Jim's "cheating".... (see 09/28/06 04:13:04)

Jim Brown : 10/4/2006 3:43:27 PM

I would sure love to see one more short covering spurt at the close to take us back to the highs and provide a good short entry at ER 740.

Jim Brown : 10/4/2006 3:43:58 PM

I am not going to post all the individual email guesses and just provide a summary instead. However, some are worth printing. So far the estimates are trending lower than our current level. Here is an interesting post:

I'll bite. SPX at 1365. That roughly equals Dow 12k

Now, while I expect to see that in the next few days, hard to know about the close but that's what I'll run with. Wherever it happens, that will be the short opp that I'm looking for next. AW

I am with you AW!

Jeff Bailey : 10/4/2006 3:36:35 PM

Hint: SPX kissed WEEKLY Pivot, then rockets to WEEKLY R1. (see Monday's wrap) SPX chart then Link

Jim Brown : 10/4/2006 3:29:50 PM

Reader Challenge Alert - Readers, send me an email with your target price for Friday's close on the S&P and I will accumulate all the responses and show them in the monitor. The person with the closest guess will receive the book, "Futures, A Personal Seminar" from the New York Institute of Finance. Send your guesses to jim at optioninvestor.com before the close of trading today.

Jeff Bailey : 10/4/2006 3:24:23 PM

SPX showing 42 new highs and 7 new lows.

Pretty close to 09/15/06 42:0.

Last couple of days' 20:0, 17:2 and 25:5

Jeff Bailey : 10/4/2006 3:23:09 PM

03:12 Internals found at this Link

Keene Little : 10/4/2006 3:22:54 PM

Looks like they're going to jam it higher into the close to make sure they get the last of the shorts to throw in the towel (those who were desperately waiting for a pullback that's not coming). Again, it's the signature of big money driving this up.

Jim Brown : 10/4/2006 3:22:24 PM

LOL! Good one Jane!

Jane Fox : 10/4/2006 3:21:55 PM

HMMMM I only have a crystal ball that goes backwards. :)

Jane Fox : 10/4/2006 3:20:17 PM

Here are the full charts. Link Link

Jim Brown : 10/4/2006 3:19:06 PM

I scanned the Russell and the SPX back through 2000 and did not see that pattern. Thanks for the brain teaser. Now, the question for you is where will we be at Friday's close. Enquiring minds want to know!

Jane Fox : 10/4/2006 3:17:43 PM

Thank you Jim - I wasn;t going to say anything until I got some response. The first chart is the DOW in late 1999 and earlier 2000 and the second of course is today's chart.

Jim Brown : 10/4/2006 3:16:07 PM

Ok, Jane, you peaked my interest. What are those charts?

Jeff Bailey : 10/4/2006 3:14:21 PM

03:12 Market Watch at this Link

Jane Fox : 10/4/2006 3:12:15 PM

Although I didn't show the RSI the MACD divergences in both cases were confirmed by a RSI bullish divergence.

Jane Fox : 10/4/2006 3:10:40 PM

Here is what I see. A huge rally that was started with a very clear MACD divergence then Macd virtually goes sideways.

Jane Fox : 10/4/2006 3:06:21 PM

Take a look at these two charts and see if you can see a similarity between them. I won't tell you right now what they are charts of because I want your total unbiased opinion. Link Link

Jeff Bailey : 10/4/2006 3:02:39 PM

Strooong smell (odor in some cases) last couple of weeks too Jane.

Jane Fox : 10/4/2006 2:48:34 PM

Sometimes you can just smell these rallies. 12:48 post

Jeff Bailey : 10/4/2006 2:47:43 PM

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

Keene Little : 10/4/2006 2:41:43 PM

This has the signature of big money rallying this (only allowing small pullbacks and then running it higher to jam more shorts out). It could end at any time which is why chasing it higher is dangerous. But Jim's right--we need to see a deeper pullback now to indicate the ramming is finished.

Jeff Bailey : 10/4/2006 2:40:54 PM

Sellers just seemed to vanish on that new high.

Jeff Bailey : 10/4/2006 2:39:26 PM

A "quick 5.5" anyway. (see 01:31:27)

Jeff Bailey : 10/4/2006 2:37:35 PM

SPX 1,347.19 +0.98% ... gets a trade at WEEKLY R1/WEEKLY 80.9% retracement.

Keene Little : 10/4/2006 2:32:26 PM

The big market, the NYSE, shows a little more room to the upside as it presses back towards the top of its parallel up-channel from the June low, which is also the top of its ascending wedge for price action since July, currently near 8556. Link

Keene Little : 10/4/2006 2:25:08 PM

The Trannies reached the 50% retracement of the July-August decline, at 4555.14 (high so far is 4555.61).

Keene Little : 10/4/2006 2:23:25 PM

A little higher and the RUT will test its downtrend line again from its May high, currently near 733.50 (cash). The choppy rally from July is only something a bear could love. Link

Keene Little : 10/4/2006 2:17:54 PM

SPX is ringing the bell at its 1345 Fib/Gann target (which is actually 1345-1347). At the same time it's running into the top of its ascending wedge (redrawn to accommodate the new highs in the wedge) and the trend line along the highs since January 2004. Could be an interesting test of the bulls' stamina now. Link

Jeff Bailey : 10/4/2006 2:16:32 PM

Dow Transports (TRAN) 4,550 +1.81% Link ... best levels of the session, the week, the month, and the new quarter.

I think I can, I think I can.

Jeff Bailey : 10/4/2006 2:14:34 PM

SAP Ag. (SAP) $50.51 +2.49% ... test for strength here Link

Jane Fox : 10/4/2006 2:10:43 PM

On May 5th ES hit a high of 1353.25 and so far that is today's high as well.

Jim Brown : 10/4/2006 2:10:31 PM

That last spurt on the Russell turned it into the strongest index gain for the day at +1.33%. This compares to the Dow +0.60, Nasdaq +1.21% and S&P +0.70%. Maybe some of those fund managers think this rally will stick and they are moving money from the overbought blue chips to the underperforming small caps. That would be a major change in market sentiment and a very bullish turn of events. That suggests they are willing to accept more risk and feel the chances for an October decline are lessening.

Jim Brown : 10/4/2006 2:03:41 PM

That last buy program took me out of my ER short at 732 for a loss of -4 from yesterday's entry at 728. Rather than continue jumping in front of the train I am waiting for a break of 729 on the downside or a failure at 740 to reenter. I am not inclined to go long right now due to the strong resistance at 740. We could fail anywhere between the current 733 and that level. I am choosing to wait for a failure rather than chase the long.

Jane Fox : 10/4/2006 1:57:24 PM

I expect bullishness into the close.

Keene Little : 10/4/2006 1:55:20 PM

As I suspected might happen this week, it's turning out to be a stop run on the bears who bet we'd see a correction to the EOM/EOQ activity last week. Too many were expecting a pullback and therefore it was relatively easy for big money to spike them out. In addition to that, with all the positive press last night on nightly news programs, I wonder how much retail money is coming into the market right now. I do feel sorry for all the ones who are probably buying very near the top (imho).

Jeff Bailey : 10/4/2006 1:53:34 PM

Elmo and Bratz Are Tops for Holiday Toys

AP Story Link

Jane Fox : 10/4/2006 1:41:43 PM

Because I was concentrating on Oil and Gold I missed a sweet trade in Natural Gas. The magenta trendline was overnight highs. Notice how QN broke above those highs and came back to test it. I see this all the time and it is usually a very nice trade. Link

Jane Fox : 10/4/2006 1:36:10 PM

VIX confirms ES's new daily highs.

Jane Fox : 10/4/2006 1:35:50 PM

Ad line is +1123 and AD volume making new daily highs. When the internals are in sync trading is so much easier.

Keene Little : 10/4/2006 1:34:40 PM

If this spike up doesn't hold then it will be a classic 5th wave up with lots of negative divergences. Based on that interpretation and the Fib target for ES being hit you should short it here.

Keene Little : 10/4/2006 1:33:26 PM

Just a few buy programs hit all indices. Looks like they're going to run the bears out of town. ES 1351.75 got tagged but it's still pressing higher. Looks like SPX could test its 1345-47 (cash) target sooner rather than later.

Jeff Bailey : 10/4/2006 1:31:27 PM

Could be a "quick six" for ES bulls.

Jane Fox : 10/4/2006 1:30:39 PM

I wonder if the late day rally is starting. A tad early though isn't it?

Jane Fox : 10/4/2006 1:26:12 PM

Here is more statements from Bernanke

Saving more requires that we consume less or work more, Bernanke said.

Reducing the Federal budget deficit would be the most straightforward way to promote national savings.

Corporate saving, in the form of retained earnings, is currently at relatively high levels, he said.

But it is the lack of savings by consumers that continues to puzzle economists.

One idea to boost savings that doesn't receive much attention, Bernanke said, was better financial education that helps people understand alternative saving vehicles.

And a simple change in company 401 (k) retirement plans to enroll new employees automatically may help consumers save more.

Jeff Bailey : 10/4/2006 1:25:03 PM

01:08 Internals found at this Link

Jane Fox : 10/4/2006 1:23:45 PM

WASHINGTON (MarketWatch) -- Although there are critical public-policy reasons to get U.S. consumers to save more money, no easy way has been found for the federal government to increase private savings, said Fed chief Ben Bernanke on Wednesday.

"Unfortunately, many years of concentrated attention on this issue by policymakers and economists have failed to uncover a silver bullet for increasing household saving," Bernanke said in remarks prepared for delivery to a business group here.

Increasing national savings is essential as the aging of the U.S. population moves from theory into fact. The first members of the baby-boom generation will reach the minimum age for receiving Social Security benefits in 2008.

Bernanke said that the aging population will be the most important factor shaping our economy and society in coming decades. Preparation for the impact of these demographic changes must start quickly.

Congress and the executive branch must view their fiscal policy decisions as either explicit or implicit choices on how to distribute the economic burdens of the aging of our population across generations.

"I suspect that many people would agree that a fair outcome should involve the current generation shouldering at least some of the burden, especially in light of the sacrifices that previous generations made to give us the prosperity we enjoy today," Bernanke said.

"By saving more today, we can reduce the future burden of demographic change," Bernanke said.

Jane Fox : 10/4/2006 1:22:11 PM

* BERNANKE:'SUBSTANTIAL CORRECTION' UNDERWAY IN HOUSING SECTOR
* BERNANKE: HOUSING MARKET SUPPORTED BY GOOD FUNDAMENTALS
* BERNANKE: KEY QUESTION IS IMPACT OF HOUSING ON CONSUMERS
* BERNANKE: FED REMAINS CONCERNED ABOUT INFLATION

Keene Little : 10/4/2006 1:21:30 PM

ES would have two equal legs up in its bounce from yesterday morning at 1351.50 which correlates nicely with the other Fib projection at 1351.75. Therefore I'd look at that level for another shorting opportunity. If it doesn't roll over from there I'd stop trying the short side since it would be more likely we'll see a rally into the close.

Keene Little : 10/4/2006 1:19:18 PM

Looking at ES's climb off this morning's low, and the current sideways consolidation, it looks like we could get another move higher to give it a 5-wave advance. If it does pop up to a new high I've got a Fib projection for the leg up at 1351.75 for its high.

Jeff Bailey : 10/4/2006 1:13:17 PM

01:08 Market Watch found at this Link

Jeff Bailey : 10/4/2006 1:11:28 PM

eh... came as cl06z was trading $59.75.

Keene Little : 10/4/2006 1:10:59 PM

Keeping an eye on the YM short I can't quite figure out if we've topped out or if instead we're just pulling back. If this is going to be just a pullback then two equal legs down is at 11825. If the 2nd leg goes to 162% then that gives us 11811 for a downside target. Think about partial profits at either level if hit.

Jeff Bailey : 10/4/2006 1:10:20 PM

Jot this down ... "bad tick" on cl06z to $69.75.

Jeff Bailey : 10/4/2006 1:08:32 PM

Dr. Bernanke's speach so interesting, I've lost track of time!

Jeff Bailey : 10/4/2006 1:07:16 PM

Tab ... OK ... I'll look at some others too.

Here's ALKS Link and EMIS Link

Jeff Bailey : 10/4/2006 1:01:21 PM

Altria (MO) $76.41 +1.01% ... PnF chart from Dorsey/Wright at this Link

Tab Gilles : 10/4/2006 12:58:20 PM

Jeff,

I've been eyeing the $BTK also...via EMIS& ALKS (Stock Watch) and another stock I'm currently researching AGIX.

Jeff Bailey : 10/4/2006 12:56:40 PM

Bullish swing trade long alert ... for one (1) of the Altria MO Jan07 $80 Calls (MO-AP) at the offer of $1.95. No stop for now, target a pop to $81.

MO $76.46 +1.08% Link ... chart does not reflect true supply/demand due to dividend distributions.

Tab Gilles : 10/4/2006 12:54:57 PM

$GOX Link

$GOLD Link

SILVER Link

$XAU Link

$COPPER Link

Jane Fox : 10/4/2006 12:50:03 PM

WASHINGTON (MarketWatch) -- Emerging market economies have made a lot of progress since the financial crisis of 1998, but have a lot more work to do before they are fully integrated into the global economy, said Tim Geithner, president of the New York Federal Reserve Bank.

Speaking at the Nitze School at Johns Hopkins University, Geithner said the large accumulations of current account surpluses and large currency reserves have contributed to financial stability and make a repeat of the disaster of 1997 and 1998 much less likely.

Geithner, the vice chairman of the Federal Open Market Committee, made no comments on U.S. monetary policy in his prepared remarks.

"The improvement is striking in a number of dimensions," Geithner said. Emerging markets have improved their balance sheets, accumulating reserves and borrowing more in their own currency and for longer periods of time at a fixed interest rate.

Global reserves have risen to $4.8 trillion from less than $2 trillion in 2000, according to Nouriel Roubini, an economics professor at New York University. Emerging markets are estimated to have more than $3 trillion in reserves; China alone is said to have reserves of about $1 trillion.

Jeff Bailey : 10/4/2006 12:49:47 PM

Biotechnology Index (BTK.X) 691.88 +1.34% Link ... if you thought "software" caught some NQ/QQQQ/NDX traders by surprise in early September, keep an eye on this group. Break above 200-day SMA, "doji" yesterday, and some strength again today.

Group doesn't "say" much about the economy, but some big guns in here too.

Jane Fox : 10/4/2006 12:48:11 PM

I feel there is a big end of day rally coming.

Tab Gilles : 10/4/2006 12:46:52 PM

$WTIC Link $GASO Link

Jane Fox : 10/4/2006 12:45:25 PM

One thing I have learned, if trading QM take your profits when you have them because they can be taken away from you very quickly.

Jeff Bailey : 10/4/2006 12:44:27 PM

FORECAST SEES PAYROLLS GROWTH OF 78K

DJ- ADP and Macroeconomic Advisers project Friday's employment report will show a private-sector job increase of 78,000 for September. Economists on average estimate growth of 125,000.

Tab Gilles : 10/4/2006 12:42:41 PM

DJUS Oil & Gas Index Weekly... Link PnF... Link

Jane Fox : 10/4/2006 12:41:38 PM

Marc no arguement there but on Oct 2nd the $ was falling and so was Gold so I think it is more in sync with Oil now although the $ certainly has its affect.

Jeff Bailey : 10/4/2006 12:39:23 PM

COURT GRANTS ECHOSTAR STAY REQUEST

DJ- TiVo slumps 12% a day after a federal appeals court grants EchoStar's request to stay the permanent injunction that prevents it from making, using or selling certain DVR products in the U.S. Echostar (DISH) shares unchanged.

Marc Eckelberry : 10/4/2006 12:38:57 PM

Jane, it's energy 50% and currency 50%. The reason for gold weakness is the dollar rise and the perception that oil has not bottomed. I think QM will do a lower low at 57.50 and possibly hold that.

Jane Fox : 10/4/2006 12:38:02 PM

Oil finds support at its PDL.

Jeff Bailey : 10/4/2006 12:37:58 PM

FUJITSU TO RECALL SONY BATTERY PACKS

DJ- Fujitsu will recall 287,000 battery packs made by Sony for its laptop personal computers on a global basis in connection with possible overheating problems, Kyodo News reports, citing a Fujitsu spokesman. Sony (SNE) falls 2%.

Jane Fox : 10/4/2006 12:37:09 PM

I shorted QM because of Gold and sure enough it is following Gold's lead.

Marc Eckelberry : 10/4/2006 12:37:05 PM

We have gone from exuberance to despair in oil and gold. It's only a matter of time before we find a bottom. The last longs are about to throw in the towel. That is when you need to step in. Others, with a longer term horizon, just cost average on the dips.

Jeff Bailey : 10/4/2006 12:37:02 PM

MICROSOFT TO BOOST ANTI-PIRACY MEASURES

DJ- Software giant's forthcoming Windows Vista will take harsher steps to curtail piracy than previous versions of its operating system, including restricting the usefulness of computers found to be running unlicensed copies.

Jeff Bailey : 10/4/2006 12:36:08 PM

GM UPGRADED WHILE FORD IS CUT

DJ- Bear Stearns says Kirk Kerkorian building up his stake supports GM in the near term, but catalysts for Ford, such as lower gas prices and September sales, already have unfolded. GM down 1.5% as Ford is up 2.0%. Both are now rated peer perform.

Jeff Bailey : 10/4/2006 12:34:43 PM

US SERVICE SECTOR COOLS IN SEPTEMBER

DJ- U.S. service sector turns in weakest performance in three years in September, but price pressures ease as well, also to their most tepid advance since 2003. Institute for Supply Management's non-manufacturing index hits 52.9, from 57.0 in August. It was expected to come in at 56.0.

Jeff Bailey : 10/4/2006 12:33:50 PM

WAL-MART CUTS SAME-STORE SALES VIEW

DJ- WMT shares fall 1.0% after retail giant cuts September U.S. same-store sales estimate to a 1.3% rise from previous forecast of a 1.8% gain. Wal-Mart attributes change to "the monthly reconciliation process" used to determine same-store sales change.

Marc Eckelberry : 10/4/2006 12:33:22 PM

YG loses 565. Could now see 555.

Jane Fox : 10/4/2006 12:33:15 PM

MACD is not showing any bearishness. Link

Jeff Bailey : 10/4/2006 12:32:45 PM

GM, NISSAN-RENAULT ALLIANCE TALKS TERMINATED

DJ- CEOs decide the auto makers are too far apart on the value of the potential tie-up and decide to stop the high-stakes talks which had been underway for two months. GM's demand that Nissan-Renault pay "control premium" if it bought 20% of GM's stock played major role in breakdown, says person familiar with the matter.

Jane Fox : 10/4/2006 12:26:49 PM

Just as I was typing I see that Gold did indeed dip lower. Now will Oil follow? These two switch leadership quite often.

Keene Little : 10/4/2006 12:26:20 PM

In the meantime, if you're short YM, lowering your stop 3 whole points to be 3 ticks above the last bounce, so 11850, is the right way to play this pullback. A rally back up from here would leave just a 3-wave corrective pullback.

Jane Fox : 10/4/2006 12:25:57 PM

I have bailed on my gold long - I have seen Gold consolidate at lows and then take another dip too many times now for me to think Gold will move higher.

Keene Little : 10/4/2006 12:24:34 PM

The short term pattern for the brokers would look best with one more minor high today but that could be the often-missing 5th wave on the very short term charts. But another high with more negative divergences would be a good sell signal for them.

Keene Little : 10/4/2006 12:21:22 PM

I've been trying to figure out the wave pattern for the brokers considering the type of bounce we've had since the June low has been so corrective. That corrective pattern follows a clear impulsive move down from the April high and therefore I'm expecting new lows before new highs. I see an interesting possibility here and we could very well have seen the high today. Here's the daily chart: Link

It has bounced slightly above its broken uptrend line from May 2005 just as it did at the end of June (another little over-throw?). That move up from the June low was wave-A. The whole mess until early September fits as a sideways wave-B and then the thrust higher from there is wave-C. Equality between waves A and C is at 234.81 (today's high so far is 234.74). The negative divergences on this chart do not suggest a bullish outcome here so it could soon be that bulls find themselves in the hot seat as Jeff likes to say.

Marc Eckelberry : 10/4/2006 12:19:33 PM

I have to go, see you later.

Marc Eckelberry : 10/4/2006 12:19:18 PM

YG hit a lower low earlier when it got to March lows and di it with a bulish divergence. It might be worth a scalp long here, stop 565. Just be mindful of oil. If QM loses 58.65, it could spell more trouble for gold.

Jeff Bailey : 10/4/2006 12:18:30 PM

I will say ... when XBD got above that 78.6% on 60-minute interval, it sure didn't want to come below and my 80.9% acted like "zone resistance."

80.9% more of a challenge the trade.

Marc Eckelberry : 10/4/2006 12:14:51 PM

My suspicions that we are in a range bound market would be confirmed if ES can't close a 30 mn candle above 1350.

Marc Eckelberry : 10/4/2006 12:13:52 PM

SMH found resistance once again at 200 day ema. Semis are lagging on a relative basis overall. That hasn't changed. SMH would have to be up at least 4% today to make the difference and catch up. Only up .30%. TXN is red, and that stock is a tech darling.

Jeff Bailey : 10/4/2006 12:14:28 PM

I've noticed that over the years Keene. I'll stick with the 80.9%.

I added your 78.6% to the XBD.X to mirror your chart from a couple of weeks ago.

Jeff Bailey : 10/4/2006 12:08:31 PM

U.S. Oil Fund (USO) daily interval bar chart with WEEKLY/MONTHLY Pivot retracement at this Link

Monday's close below WEEKLY Pivot after last WEEKS trade at WEEKLY R1 was an al_rt that we should be defensive with the USO 1/2 position long.

No Amaranth-like trading from me.

Jane Fox : 10/4/2006 12:08:26 PM

I have my trusty old VIX back as well. Link

Jane Fox : 10/4/2006 12:06:51 PM

These two are quite bullish. Link

Keene Little : 10/4/2006 12:04:53 PM

Actually Jeff, re: your 12:01 comment, I don't use the 80.9% retracement. I use 78.6% as an important retracement.

Jane Fox : 10/4/2006 12:04:04 PM

Natural GAs has broken its overnight high.

Marc Eckelberry : 10/4/2006 12:03:33 PM

YG found support at March low 565.70. If QM keeps that bid, we could have hit a temporary bottom. I was expecting 560, but so far they took 565.

Jeff Bailey : 10/4/2006 12:03:25 PM

U.S. Oil Fund (USO) $53.31 +0.13% after near-kiss of overlapping WEEKLY S2/MONTHLY S1.

Jane Fox : 10/4/2006 12:02:34 PM

... and time to try another Gold long.

Jeff Bailey : 10/4/2006 12:02:20 PM

I noticed it Marc.

Marc Eckelberry : 10/4/2006 12:01:29 PM

Everyone got all excited about lower oil yesterday, but no one seems to notice that QM did a bullish turnaround at 57.75 and is now up, Surprise.

Jeff Bailey : 10/4/2006 12:01:03 PM

Broker/Dealer Index (XBD.X) 234.74 +1.48% ... pull's well free of Keene's 80.9% retracement.

Gett'n a little too "hot" in the tub for bears I guess.

Jeff Bailey : 10/4/2006 11:59:51 AM

S&P Bank Index (BIX.X) 395.92 +0.58% ... new all-time high.

Jane Fox : 10/4/2006 11:56:45 AM

* NYSE ADVANCERS OUTNUMBER DECLINERS 20 TO 11
* NASDAQ ADVANCERS OUTNUMBER DECLINERS 2 TO 1

Marc Eckelberry : 10/4/2006 11:56:36 AM

In a perverted twist, they could very well be going for YM 12K before calling this rally over. That would be DOW 11950 or so. It would not suprise me. Just be aware that they do like those round numbers with YM.

Jane Fox : 10/4/2006 11:55:40 AM

* NYSE VOLUME 707.1M
* NYSE HAS 1,942 ADVANCERS
* NYSE HAS 1,150 DECLINERS
* NYSE HAS 163 ISSUES UNCHANGED
* NYSE HAS 87 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 35 ISSUES SETTING 52-WEEK LOWS
* NASDAQ HAS 1,842 GAINERS
*NASDAQ HAS 968 LOSERS
* NASDAQ HAS 124 ISSUES UNCHANGED
* NASDAQ VOLUME 862.9M
*NASDAQ HAS 48 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 54 ISSUES SETTING 52-WEEK LOWS

Jeff Bailey : 10/4/2006 11:55:24 AM

Bear Stearns (BSC) $147.06 +0.54% ... stock was a rock'n on the "right shoulder" break yesterday. I priced out options on Friday and just too rich.

Looking at new high here.

Jeff Bailey : 10/4/2006 11:52:23 AM

AMEX Interactive Internet (IIX.X) 181.14 +1.46% ... breaks above monthly highs. Set to challenge 80.9% retracement (185.24) of 04/19/06 high to recent 07/21/06 relative low. Buyers stood firm yesterday morning at 61.8% 178.53.

Marc Eckelberry : 10/4/2006 11:48:46 AM

Good call, Keene. I took ES 1349, but I think there is still risk to 1350.50, so watch 1347.75 support. COMP is still below 2272.70, the threshold that would lead much higher. More new yearly lows still for Nasdaq.

Keene Little : 10/4/2006 11:47:04 AM

If you took the short at YM 11848, lower your stop right away now to 3 ticks to a new high (so 11853). This has to work from here otherwise I'm not sure how high this will go.

Jeff Bailey : 10/4/2006 11:45:50 AM

CRB Index (cr00y 292.84 -0.77% (30-min delayed) ... challenges its 05/16/05 relative low close.

Jeff Bailey : 10/4/2006 11:44:39 AM

Children's Place (PLCE) $66.67 +1.69% ... edges above its all-time high close of $66.52.

Jane Fox : 10/4/2006 11:44:24 AM

Dateline WSJ - DETROIT--The chief executives of General Motors Corp. and Nissan-Renault terminated talks about a possible globe-spanning alliance, according to a person familiar with the situation.

In a phone call this morning, GM's CEO Rick Wagoner and Carlos Ghosn, chief executive of Nissan Motor Co. and Renault SA, decided that the two sides were too far apart on the value of the potential tie-up and decided to stop the high-stakes talks which had been underway for two months.

Jane Fox : 10/4/2006 11:47:01 AM

This just in from Linda " I don't know if you know, but three Fed speakers are starting at noon, with Bernanke one, but with Jim saying that Kohn is probably the most important because he will be speaking about the economy. Geithner also speaks."

Tks Linda - didn't know that.

Keene Little : 10/4/2006 11:29:11 AM

YM 11848 is the equivalent level so look to short it there if we're getting some sell signals.

Keene Little : 10/4/2006 11:28:19 AM

Looking at the mighty DOW, with this push higher again, it's looking like the 5th wave of the move up from this morning's low. The 5th wave will equal the 1st wave at 11783 (cash) so that could be the end of this run.

Jane Fox : 10/4/2006 11:28:09 AM

I think ES will break its PDH. Opps there it goes.

Jeff Bailey : 10/4/2006 11:27:38 AM

11:00 Internals found at this Link

Marc Eckelberry : 10/4/2006 11:25:57 AM

QM hit a target I mentioned earlier at 57.75 and is now bouncing. There is still risk today to 57.50, so just scalp it for now.

Jane Fox : 10/4/2006 11:24:05 AM

Though on second look I see all the other markets have broken their respective PDHs so maybe not.

Jane Fox : 10/4/2006 11:23:23 AM

ES's PDH is 1347.75 and will probably be resistance today.

Marc Eckelberry : 10/4/2006 11:21:01 AM

Tech continue to lead and NQ should hit 1675. NDX is now finally back in the green for 2006.

Jeff Bailey : 10/4/2006 11:16:24 AM

Bema Gold (BGO) $4.00 -4.07% Link ... double bottom sell signal here.

Marc Eckelberry : 10/4/2006 11:08:23 AM

This market looks range bound at this point, especially ES. I just don't see anything bullish fundamentally, WMT confirms that, but they are getting all excited about lower oil. Remember when we thought 55 oil was expensive? And that was during a booming economy. 55 oil is not going to save the consumer from the housing slump.

Jane Fox : 10/4/2006 11:08:12 AM

I don't expect Gold to hit 559 today but heck, although I expected Gold to hit 576, I surely didn't expect it to hit 576 this week and it did.

Jeff Bailey : 10/4/2006 11:04:52 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 10/4/2006 11:04:47 AM

Gold should be accumulated between 540 and 560 where it should find a base over the next week or so. That is my take now that we lost 579.

Jane Fox : 10/4/2006 11:04:17 AM

I fixed the link in my 11:03 post.

Keene Little : 10/4/2006 11:04:08 AM

Price is king and we all must remember that. All the other technicals we follow don't mean squat as compared to what price is doing. Having said that I still can't get myself bullish after this morning's spike up. SPX is leaving more bearish divergences, this time a short term one against yesterday's high. This combined with the longer term bearish divergences makes me bearish this market.

The problem of course for bears, and I've received a few emails from some very nervous readers who are short, is that the market can remain irrational (propped up) far longer than you can remain solvent trying to fight it. Amaranth and their natural gas trades gone bad comes to mind.

Looking at SPX, another small push higher would have it testing the top of its ascending wedge again, currently near 1339.20. While it could continue higher from here there's no way I could recommend a long play from here. It could work but that's not how I read the charts. Link

Tab Gilles : 10/4/2006 11:03:06 AM

Open Positions & Watch List Link

Jane Fox : 10/4/2006 11:03:49 AM

Gold's next stop maybe June lows at 559.80. Link

Jeff Bailey : 10/4/2006 11:02:11 AM

CNOOC (CEO) $79.43 -2.82% ... set to test 09/11/06 lows of $79.15.

Jane Fox : 10/4/2006 11:00:10 AM

There goes Oil to new yearly lows.

Marc Eckelberry : 10/4/2006 10:59:04 AM

If we have flat markets through October, you want to limit your trading at the open and the close, where you will catch all the swings.

Jane Fox : 10/4/2006 10:58:50 AM

Marc I completely agree the elections will be end of this rally. As far as oil is concerned though I truly just don;t know.

Marc Eckelberry : 10/4/2006 10:58:23 AM

Today, we should see QM hit 57.50/57.75. I will scalp long there and see how it goes. You never know when the boyz decide enough is enough. However, I do have a 38.2% fib projection at 54.925, so be aware that QM longs are to be treated as a trade, not an investment and use tight stops. By early November, we should be back to the races with oil, which will also pretty much be the end of the equity rally. I am targeting the elections as the kiss of death for equities. There is little doubt republicans will lose and I think they will lose even bigger than they think. This is 1994 the other way. That will be bad news for the markets initially.

Jane Fox : 10/4/2006 10:56:08 AM

Oil is now testing its yearly lows and finds support.

Jane Fox : 10/4/2006 10:54:39 AM

Gold down to 573.80 now. So much for support!!!

Jeff Bailey : 10/4/2006 10:49:52 AM

Ameritrade (AMTD) $19.44 +1.99% ... edges above my 61.8% retracement (03/03/06 relative high close to 07/17/06 low close)

Jeff Bailey : 10/4/2006 10:48:21 AM

Broker/Dealer Index (XBD.X) 232.21 +0.39% ... edges above Keene's 80.9% retracement.

Marc Eckelberry : 10/4/2006 10:48:30 AM

My longer term outlook for gold and oil is bullish. Gold will be trading at 850 by the end of next year and challenge all time highs as stagflation creeps in. For now, it is time for a little patience, but don't think gold is dead. It is merely hibernating a little. I will be accumulating on pullbacks multiple contracts.

Jeff Bailey : 10/4/2006 10:46:38 AM

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

Marc Eckelberry : 10/4/2006 10:42:13 AM

Energy will be sold on rallies up until probably mid October. I am waiting for QM 57.50/57.75 to initiate a long. I am in no hurry. This makes me think short ES, rather than NQ. Watch ES 1348.75 and 1350.

Marc Eckelberry : 10/4/2006 10:39:39 AM

If YG loses 576, it will test 560, which will only hold for so long, then it will close the January gap between 540 and 545. At this point, I do not wish to commit long below 579. Wait and see for now. If we get back above 579 and hold, ok, go for it. But for now, I am cautious.

Marc Eckelberry : 10/4/2006 10:36:28 AM

Techs are leading and so is the SOX.

Jane Fox : 10/4/2006 10:35:15 AM

DOW has made another new all time high today at 11769.

Jane Fox : 10/4/2006 10:34:17 AM

Keep your eye on the PDHs. Link

Jeff Bailey : 10/4/2006 10:34:16 AM

YM 11,829 +0.33% ... all-time highs on this contract. Overhead supply should be limited.

Keene Little : 10/4/2006 10:33:27 AM

It looks like a little too much too fast this morning and short term divergences are starting to show up so be careful if you're chasing this higher.

Jane Fox : 10/4/2006 10:32:06 AM

* CRUDE SUPPLY UP 3.3 MLN BRLS LAST WEEK: ENERGY DEPT.
* DISTILLATE SUPPLY UP 200,000 BRLS: ENERGY DEPT.
* GASOLINE SUPPLY UP 1.2 MLN BRLS: ENERGY DEPT.
* NOV. CRUDE DOWN 8 CENTS AT $58.60 AFTER CRUDE SUPPLY RISE

Jane Fox : 10/4/2006 10:30:58 AM

Inventories probably came in high.

Marc Eckelberry : 10/4/2006 10:30:39 AM

NASDAQ year lows higher than year highs. All very strange, but don't fight the tape. Just realize it can flip pretty quickly.

Jeff Bailey : 10/4/2006 10:30:31 AM

California Pizza (CPKI) $31.03 +2.03% Link ... bar chart with dual retracement.

Jane Fox : 10/4/2006 10:30:30 AM

Oil falling!

Jane Fox : 10/4/2006 10:26:04 AM

Anyone in a Oil trade remember inventories at 10:30.

Keene Little : 10/4/2006 10:25:01 AM

NQ has retraced 62% of its decline from last Friday at 1665.25. Two equal legs up in its bounce from yesterday's low would be at 1673 so that would be a logical place to watch for a potential top to this bounce. Otherwise it's looking like it could continue higher.

Marc Eckelberry : 10/4/2006 10:24:13 AM

In any case, NQ broke above key 1661/1662 reistance, now support.

Jane Fox : 10/4/2006 10:23:31 AM

I am trying another long in Gold but using YG (less leverage). This is just too nice a setup.

Marc Eckelberry : 10/4/2006 10:23:18 AM

Ok, we know he won't raise rates. NOw we need to think why.

Marc Eckelberry : 10/4/2006 10:22:53 AM

Oct. 4 (Bloomberg) -- Service industries in the U.S. expanded at the slowest pace in more than three years in September as the housing slump deepened. The Institute for Supply Management's index of non- manufacturing businesses fell to 52.9, the lowest since April 2003, from 57 in August. Readings above 50 indicate expansion in industries including construction, banking and retailing that account for almost 90 percent of gross domestic product.

Jeff Bailey : 10/4/2006 10:20:49 AM

YG06Z 578.80 -0.43% ... slips below upward trend and probes 09/15/06 relative low of 576.70.

Keene Little : 10/4/2006 10:18:30 AM

Bonds are rallying in a spike as well. There's a lot of money pouring into this market. I wonder where it's coming from...

Jane Fox : 10/4/2006 10:16:38 AM

ZG's (Gold 100 oz emini) low on Sept 15th was 576.80 and today's low so far has been 576.40. This market needs to bounce here because it is way oversold and at a major support.

Jeff Bailey : 10/4/2006 10:15:19 AM

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

Keene Little : 10/4/2006 10:14:59 AM

Looks like the buyers have stepped in. This quick of a spike up looks like they're jamming the shorts. Either that or someone with deep pockets just wants to load up on stocks.

Jane Fox : 10/4/2006 10:13:12 AM

Both AD line and volume are now making new daily highs and VIX is making new daily lows. Finally a sense of direction.

Jane Fox : 10/4/2006 10:09:53 AM

Keene internals are just as choppy and have no sense of direction either.

Jeff Bailey : 10/4/2006 10:09:33 AM

Starbucks (SBUX) $34.45 +1.29% Link ... still either side of its 200-day SMA. About 10-sessions now.

Keene Little : 10/4/2006 10:08:41 AM

We're getting very choppy price action here and no sense of direction yet.

Jane Fox : 10/4/2006 10:08:31 AM

TICKS +800 but little reaction in the markets.

Jane Fox : 10/4/2006 10:07:40 AM

WASHINGTON (MarketWatch) - New orders for U.S.-made factory goods were unchanged in August after a 1% drop in July, the Commerce Department reported Wednesday.

Orders for both durable goods and nondurable goods were flat in August, as well. Declines in orders for petroleum, civilian aircraft, electronics and machinery were offset by higher demand for defense airplanes, ships, pesticides and tobacco, the government said.

A week ago, the government had estimated that orders for durable goods fell 0.5%. The upward revision was due in large part to smaller decline in orders for computers.

Economists were looking for a 0.1% decline in factory orders in August, according to a survey conducted by MarketWatch.

July's orders were revised lower to a 1% drop from a decline of 0.6% earlier.

The report points to a softening of growth in the factory sector, consistent with the decline to 52.9% in the Institute for Supply Management index for September reported on Monday. The orders and shipments data are very volatile month-to-month, however.

Jane Fox : 10/4/2006 10:05:09 AM

I was wrong on the gold long and sure glad I bailed. If it revisits it PDL and I see a MACD divegerence I may get back in.

Jane Fox : 10/4/2006 10:04:56 AM

* SEPT. ISM SERVICES 52.9% VS 57.0% IN AUG.
* SEPT. ISM SERVICES BELOW CONSENSUS 56.2%

Jeff Bailey : 10/4/2006 10:04:52 AM

10:00 Market Watch found at this Link

Jane Fox : 10/4/2006 10:04:14 AM

* AUG. FACTORY ORDERS EX-TRANSPORTATION DOWN 0.7%
* AUG. FACTORY INVENTORIES UP 0.3%
* AUG. NONDURABLE GOODS ORDERS UNCHANGED
* AUG. CORE CAPITAL EQUIPMENT ORDERS RISE 0.4%
* AUG. DURABLE-GOODS ORDERS REVISED TO FLAT FROM -0.5%
* AUG. FACTORY ORDERS FLAT VS. 0.1% DROP EXPECTED

Jane Fox : 10/4/2006 10:00:01 AM

Look at those sweet bearish divergences on INTC. Of course one would have to bearish on the market to take this stock short but if you are bearish then shorting INTC is a wise choice. Link

Jeff Bailey : 10/4/2006 9:52:35 AM

British Airways Trims Revenue Outlook, More Optimistic On Fuel

DJ- British Airways PLC (BAB) Wednesday trimmed its full year revenue forecast amid weaker traffic volumes but said it's more optimistic over its fuel costs following the recent fall in oil prices.

BA said it now expects revenues over the financial year to March 31, 2007 to rise 5-6% on the year compared to its previous guidance for a 6-7% increase. The carrier said September transfer traffic and short-haul volumes in business and first class were impacted by tighter carry on baggage restrictions in the U.K.

The airline said it now expects its fuel and oil bill to be some GBP450 million higher this financial year than the previous one. It was previously predicting a GBP550 million to GBP600 million rise.

BA said market conditions continue to be good and most segments of the business are recovering well from the major terror alert in the U.K. during August. The U.K. tightened restrictions on what passengers can take onboard airplanes following an alleged plot to blow up transatlantic airlines with liquid-based explosives.

BA and other carriers were forced to cancel hundreds of flights in August due to long delays at airports.

The airline said passenger traffic, measured in revenue passenger kilometers, rose 1.5% in September on the year with premium traffic up 1.5%. The passenger load factor - a measure of how full BA's planes are - fell 0.8 percentage points to 78.8%.

BAB $84.60 +2.42% Link

Jane Fox : 10/4/2006 9:51:44 AM

Remember the reports at 10:00:

Factory orders and SEpt ISM

Jane Fox : 10/4/2006 9:50:05 AM

VIX making new daily lows and the TRIN making new daily highs. This is not conducive to easy trading.

Jeff Bailey : 10/4/2006 9:49:00 AM

Airbus Delay To Take EUR100M-120M Off Sales To 2008

DJ- Airbus is a unit of European Aeronautic Defence & Space Co. (5730.FR), which late Tuesday announced further delays in deliveries of the new aircraft.

MTU expects to book most of the lost sales in 2008, while lost sales in 2007 will be in the double-digit million euro figure, an MTU spokesman told Dow Jones Newswires.

The sales will eventually be realized and the delay isn't expected to affect profit because of the design of the contract with Airbus, he said.

At 1336 GMT, MTU shares in Frankfurt were trading at EUR29.63, up EUR0.25, or 0.85%, in an overall market which was slightly higher.

Engines for Airbus' A380 are supplied by MTU Aero Engines, General Electric (GE), United Technologies Corp. (UTX) unit Pratt & Whitney, French aircraft engine manufacturer Snecma SA and Rolls-Royce Group PLC (RR.LN).

The first A380 aircraft for delivery to Singapore Airlines and Lufthansa will be equipped with Rolls-Royce engines.

MTU is to supply the A380 engines for planes ordered by Air France (AKH) and Emirates Airlines.

In 2005, MTU posted revenue of EUR2.15 billion and had earnings before interest, taxes, depreciation and amortization, or EBITDA, of EUR233 million.

Jane Fox : 10/4/2006 9:48:38 AM

I am out of the Gold trade - it is taking too long for my liking.

Jane Fox : 10/4/2006 9:46:55 AM

Watching the 20 minute chart of OIl and it needs to make a higher high here or I am out of my daytrade in Gold.

Keene Little : 10/4/2006 9:42:46 AM

Not surprisingly they're pushing the DOW up more than techs. It's only minor but it's there. The flight to the safety of the biggest of the big caps continues.

Jane Fox : 10/4/2006 9:40:04 AM

AD line is -183 but AD volume is above 0 and climbing.

Jeff Bailey : 10/4/2006 9:38:16 AM

California Pizza Kitchen (CPKI) $30.71 +0.98% Link ...

Jeff Bailey : 10/4/2006 9:36:58 AM

Darden Restaurants (DRI) $43.62 +0.69% Link ... new 52-weeker and all-time high at the big board.

Keene Little : 10/4/2006 9:29:47 AM

The market will open down but not by much. We'll need to see yesterday's lows taken out in order for the bears to make a statement. Likewise the bulls will make a statement if they take out yesterday's highs. In between we'll have to wait and see. Hopefully the intraday moves will provide some clues as to a trend (impulsive vs. corrective moves).

Jane Fox : 10/4/2006 9:22:20 AM

ES and YM make new overnight lows but only by a few ticks.

Jane Fox : 10/4/2006 9:20:38 AM

This may be a good place for a long daytrade in Gold with a stop just below PDL. I believe Gold will retrace to at least its 50% retracement at 590. This is only a daytrade though I am still bearish on Gold longer term. If you decide to take the trade keep your eye on Oil.

Jane Fox : 10/4/2006 9:14:34 AM

WASHINGTON (MarketWatch) -- With homeowners rushing to refinance loans to take advantage of low interest rates, applications for mortgages at major U.S. banks surged last week by 11.9%, the Mortgage Bankers Association reported Wednesday.

The upsurge seen in the week ended Sept. 29 left the level of applications at their highest in eight months. Applications are down 10.9% in the past year, but this marked the smallest year-over-year deterioration since April.

Last week, applications for refinance loans soared 17.5% to the highest level in nearly a year. Refinancings accounted for 46.7% of applications, the highest share since February 2005, compared with 44.3% the previous week.

"Refinance applications continue to increase as mortgage rates have declined to their lowest levels since the beginning of the year," said Michael Fratantoni of the bankers' group.

Mortgage rates have fallen 30 basis points in the past seven weeks, retracing from 6.54% to 6.24%, and are down 57 basis points in the past 12 weeks from 6.81%.

"While it is clear that the housing market is in a softening trend, these almost real-time data, combined with the recently reported increase in pending existing home sales and still quite healthy actual existing home sales, indicate that so far at least the decline in demand is not a precipitous one," said Joshua Shapiro, chief economist for MFR.

Jane Fox : 10/4/2006 9:13:00 AM

WASHINGTON (MarketWatch) - The U.S. economy added about 78,000 private-sector jobs in September, another month of "sluggish" hiring, according to the monthly ADP employment report released Wednesday.

"These finding indicate continued sluggish gains in private-sector employment," said Joel Prakken, chairman of Macroeconomic Advisers LLC, the economic firm that computes the ADP index from anonymous payroll data provided by Automatic Data Processing Inc. (ADP)

The ADP report covers private-sector jobs only. After adding in the 10,000 government jobs added in a typical month, the ADP report indicates nonfarm payrolls rose by about 90,000 in September. That would be the weakest job growth since last September and October, just after Hurricane Katrina hit the Gulf Coast.

The ADP report comes two days before the Labor Department reports on September nonfarm payroll growth. Economists surveyed by MarketWatch are currently looking for payrolls to grow about 124,000, after 128,000 in August.

Jane Fox : 10/4/2006 9:11:20 AM

Dateline WSJ - As the Dow Jones Industrial Average climbs to record heights, many hedge funds are stumbling and more than ever are closing shop.

The latest to falter: Vega Asset Management. One of the world's largest hedge funds a few years ago, Vega has suffered losses from a bad bet against U.S. bonds, and is now down roughly 75% from its peak two years ago to about $3 billion in assets. The firm says it has no plans to cease operations.

New figures show that more than 1,000 hedge funds have shut in the past two years, as competition has squeezed profits. Even some veteran managers, in a bid to boost returns, have made concentrated bets that have backfired. All this has set up the $1.23 trillion industry for its first meaningful consolidation, Wall Street executives say.

In just the past few weeks, Amaranth Advisors LLC announced plans sell to its investments after losing $6 billion, mostly in the energy markets, heightening the prospects it will close its doors. Narragansett Management LP in New York recently said it will return $800 million to investors. And two European-based hedge funds recently have told investors they are shutting down one or all of their funds.

Vega, which has offices in Spain, London and New York, managed about $12 billion a couple of years back and about $6 billion as recently as January. It once was seen as a winner in the growing popularity of hedge funds among large institutions.

Jane Fox : 10/4/2006 9:09:02 AM

Oil bears are finally taking a breather and during the overnight session Oil was able to make higher highs and tag its 38.2% retracement of its PDR, however, the bulls have not been able to get it above $60 yet.

Gold is trading in sympathy with Oil once again and seems to be following its each and every move but as you can see Gold did not make it to its 38.20 retracement.

Natural Gas is in rally mode and even broke its PDH overnight.

TBonds tagged its PDH and this may be a very good spot to daytrade a short at least back to overnight lows. Link

Jane Fox : 10/4/2006 8:56:22 AM

Good morning. For most of the overnight session the equity markets were making bullish higher highs but they all topped at 7:30EDT and are now making new overnight lows. If the intraday session continues with this recent bearishness I would be watching the PDLs. I don't know if you have noticed but if we do not have a strong move one way or the other the PDRs exert much more influence on support or resistance. Link

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