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Keene Little : 10/5/2006 11:56:37 PM

Friday's pivot tables: Link and Link

Keene Little : 10/5/2006 11:51:40 PM

Marc, it seems investors never learn. I'm just surprised the message from only 6 (almost 7) years ago has been forgotten so soon. For those who are still feeling bullish, here's a gentle reminder of what's to come. Link and Link

We don't know when a big correction is coming but we have a pretty good idea this is not the start of a new bull leg.

Marc Eckelberry : 10/5/2006 10:22:52 PM

I wasn't thinking meltdown, but now I am 100% on Keene's side. How can we put such valuations on retail stocks, more than they EVER had, 4 years into a bull market and a 3 month rally right before the start of the Christams season. All the good news is baked in. What if the consumer does not show up? Right now, RLX is pricing in a jolly consumer spending billions at Christmas, not a worry in the world. WHAT IS GOING ON? And the constant giddiness in the media. I feel like we are on the moon. If I hear one more bull giving more bull about how it will just keep going up, I think I will puke. Who is paying them to be so carefree?

Marc Eckelberry : 10/5/2006 10:10:07 PM

RLX and retail stocks hit an all time high. Even higher than 2005. This right before a possible recession, a housing slump and the Christmas season. Is everyone chasing the same dog? I love rallies, I just don't like rallies before the news.


OI Technical Staff : 10/5/2006 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 10/5/2006 9:17:44 PM

Hmmmm... NYSE volumes averaged about 2.5 billion shares per day in September, running 2.6 billion so far this month.

April, May and June average daily volumes were 2.24, 2.48 and 2.47.

Marc Eckelberry : 10/5/2006 9:10:17 PM

Thanks Tab. I also loved NVDA a few months ago, just because of Vista. Now I think it has been played, but what a run up. In fact, the whole Vista thing was accumulated for some time. We will have to wait and see guidance now, and I suspect funds will be in a wait and see mode soon.

Jeff Bailey : 10/5/2006 9:10:19 PM

Very informative discussion on CNBC regarding "new" electronic trade setup at ICE. Specialist firms will get PAID a fee if their bid, or offer is traded by a market participant.

The fee paid to the specialist firm is to try and compensate the RISK that the specialist firm assumes for providing the liquidity to market participants.

What this is designed to do is provide tighter spreads, and GREATER liquidity to all market participants and facilitate larger block trades.

ICE Link

I think NYX Link was mentioned as another benefactor.

And ... BIG brokers like Goldman Sachs (GS) Link

And now we know why there's been a tidal wave of bullish enthusiasm.

Tab Gilles : 10/5/2006 9:03:57 PM

Here's an interactive chart of MFE, MSFT, DELL, AAPL, INTC & AMD. Link

Marc Eckelberry : 10/5/2006 8:57:28 PM

I am a seller of SYMC and all anti-virus on rallies. That area wil be killed by the new Microsoft One: Link

Tab Gilles : 10/5/2006 8:54:01 PM

Jim,

How would you play that? Short the antivirus stocks? Long or short Apple or Dell? What about AMD or INTC?

Jim Brown : 10/5/2006 8:40:08 PM

I agree with Marc on Vista. I thought about downloading it in the Beta version just to see what the differences were. I downloaded the Vista Advisor analysis program here: Link

I have a less than 12 mo old PC, state of the art, dual processors, big video card, etc runing WinXP. The analysis program basically said Vista would not work without a couple dozen changes. Almost none of the drivers for my current hardware were supported. Almost every device had a warning flag. "Not compatible with Vista, check with vendor for driver upgrade or replace equipment." It may be a very long time before I make the conversion and I suspect there will be a slower than usual conversion wave due to Microsoft providing the tool up front to tell everyone why their system won't run Vista.

It will promote a strong build wave for new PCs with Vista preloaded. That way all the bugs have been resolved by the hardware manufacturer and you can get all the benefits of Vista.

None of the antivirus programs, McAffe, Symantec, ZoneAlarm, etc are compatible with Vista according to Microsoft. Vista has its own firewall/spyware/virus components and it appears Microsoft is going to shut out the 3rd parties by not disclosing the internal code for Vista according to a press release I saw last week.

Tab Gilles : 10/5/2006 8:36:05 PM

The two largest sectors of the QQQQ are the Hardware $GHA and Software $GSO sectors.

$GSO has made a new high... Link

$GHA is right at its recent high... Link

QQQQ has some more to go... Link

Jeff Bailey : 10/5/2006 8:33:13 PM

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

Today's Activity

Swing trade NAKED Call stopped on the two (2) Baker Hughes BHI Oct. $70 Calls (BHI-JN) at the offer of $2.10, when the stock traded a snugged down stop of $70.10 from $70.25 (see intra-day comments as to why). ($-1.50/contract, or -250%)

Bullish swing trade closed partial 1/4 in the California Pizza Kitchen (CPKI) at the bid of $31.94 (see BHI-JN and account management). ($+1.56/share, or +5.13%) Still long 1/4 position.

Trade Blotter of CLOSED and current OPEN Position with stops/targets at this Link

Tab Gilles : 10/5/2006 8:29:02 PM

QQQQ SBUX, AMGN and QCOM helped today. Link Link Link

Tab Gilles : 10/5/2006 8:26:06 PM

Micron (MU)$17.54 -0.54 (-2.99%)

After Hours $16.12 -1.42 (-8.10%) Link

Tab Gilles : 10/5/2006 8:19:30 PM

Murphy Oil (MUR) MUR issues upside guidance for Q3, sees EPS of $0.95-$1.05 vs. $0.72 Reuters Estimates consensus. Q3 results also include an $18 mln charge associated with a 10% tax rate increase on oil and natural gas profits in the U.K. North Sea which was enacted on July 19. Link

Marc Eckelberry : 10/5/2006 8:18:27 PM

Vista is a memory and graphics hog, so when you look at so-called Vista stocks, also look at companies that sell ram and video cards as well as hard drive memory. NDX Vista: MSFT -.07%, INTC -.19%, ATYT - .28%, NVDA -2.83%, DELL + 0.65%
Non NDX Vista plays: MU -10%, AMD -.15%, WDC -1.15%, STX -.70%.
The reason I bring this up is because of the inventory build up that has been hurting the semi group recently. Simply looking at DELL or MSFT does not give you an idea as to what is happening with the core stocks that are supposed to benefit from Vista. They are all down today while NDX rallies, except DELL, but that is suspect, as the stock is always bought by retail on stock market rallies. In other words, how long can we keep going on software and Starbucks? The core group that revolves around computers is not participating today and that includes AAPL, a non Vista play, but a retail force nevertheless.
Granted, these stocks have seen a run-up, but if they are down today while the market is up, then it tells you we have some profit taking coming pretty soon. I'm not saying we collapse, just that players are taking money off the table in key areas that drove the rally earlier.
As we press forward, keep an eye on the biggest beneficiaries from Vista: MSFT, MU, NVDA, ATYT, AMD, INTC and STX.

Jeff Bailey : 10/5/2006 7:51:01 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/5/2006 7:46:29 PM

Closing Internals found at this Link

Industry gainers today were Iron/Steel +4.79%, Mobile Homes/RVs +4.41%, Hotel/Motel +3.94%, Coal +3.62%, Construction/Agriculter Machinery +3.34%, Metal Mining +2.78%, Non-Metallic Mining +2.61%, Oil Service/Equipment +2.44%, Fish/Livestock +2.22%, Gold/Silver +2.16%

Industry Losers were Retail/Drugs -2.11%, Retail Department/Discount -1.47%, Retail Grocery -1.31%, Audio/Video Equip -1.05%, Major Drugs -0.87%, Jewelry/Silverware -0.81%

Jeff Bailey : 10/5/2006 7:19:31 PM

Please feel free to review 09/13/06 MM Posts that evening Link

Jeff Bailey : 10/5/2006 7:12:55 PM

QQQQ's 50 Worst 20-dayNet% Gainers at this Link (see 50 Top 20-dayNet% Gainers at 06:08:14)

Tab Gilles : 10/5/2006 6:56:09 PM

Open Positions & Stock Watch New addtion ATHEROGENICS INC (AGIX)... AtheroGenics, Inc. engages in the discovery, development, and commercialization of drugs for the treatment of chronic inflammatory diseases, including coronary heart disease, organ transplant rejection, rheumatoid arthritis and asthma in the United States. It owns a vascular protectant or v-protectant technology platform to discover drugs. The company's products primarily include AGI-1067, a Phase III clinical trail product, which would be used for the treatment of coronary heart disease atherosclerosis; and AGI-1096 a Phase I clinical trial antioxidant and selective anti-inflammatory agent, for the treatment of transplant rejection. The company has collaboration agreement with AstraZeneca for the development and commercialization of AGI-1067; and Astellas Pharma, Inc. to develop AGI-1096. AtheroGenics was founded in 1993 and is based in Alpharetta, Georgia.

Tonights closing numbers.... Link

$NDX/ $NAA daily Link

$NAHGH/$NALOW 10-ema weekly Link

$NASI/$NDX Weekly Link

$NDXA50 & $NDXA200 daily Link Link

Profund Ultra OTC (UOPIX) Link

Profund Ultra SmallCap (UAPIX) Link

Jeff Bailey : 10/5/2006 6:52:01 PM

Fed's Plosser: Fed Policy To Be Driven By Data

DJ- Federal Reserve Bank of Philadelphia President Charles Plosser on Thursday said that the monetary policy outlook will be driven by incoming economic data.

What happens with monetary policy is a "decision the (Federal Open Market) Committee will make as a whole, and it evaluated each meeting by what the data is telling us," Plosser said.

Plosser's comments followed a speech in which the newly installed central banker warned that if inflation pressures do not fall back, the Fed may well have to raise interest rates again. Plosser is not currently a voting member of the interest rate setting Federal Open Market Committee, which is widely expected to hold rates steady through the remainder of the year.

Plosser's formal remarks added to a fresh round of hawkish talk that stands at odds with sentiments in the bond market, which reckons the Fed will soon be cutting rates due to a weakening economy.

In his post-speech remarks Plosser largely reiterated his outlook on the economy. "The economy is certainly weaker than it's been" but "I am more confident than some about how quickly the economy might rebound," he said. The Fed official said the slowdown in housing has been substantial, but added, "the spill-over effects of housing have not materialized so far" on the broader economy.

"I think inflation remains a concern," and "it's a very uncertain time" for the economy, Plosser said. Still, he said "the decline in oil prices is clearly desirable," even as he claimed "I don't have a clue" what the right price range is for oil.

Plosser was also asked about the bond market's dovish rate expectations, and said, "I try not to speak for the bond market," declining to give an assessment of investors' sentiments. But he did say that the current negative spread seen between short- and long-dated Treasury yields wasn't indicative of a recession, and added, "I don't believe right now real interest rates, by historical standards, are high."

Plosser was asked if he shares with other Fed officials a desire to see inflation, as measured by the core personal consumption expenditures price index, range between 1% and 2% on an annualized basis. The core PCE price index strips out food and energy costs, and as of August, it was running at a 2.5% rate from a year ago.

He said the current core PCE price index level "is too high." But, Plosser added, "for the time being, I'm going to stay away from giving a number" and will mull what the appropriate range should in fact be. Plosser also said that he supports the Fed adopting what is called an inflation target, which is a publicly stated objective for where the central bank wants inflation to range. The Fed doesn't have a formal goal at this point, but Fed Chairman Ben Bernanke has said he would like to see one adopted at some point.

Plosser did say that managing public expectations of inflation expectations is important, saying "what I don't want to happen is that expectations become unhinged."

Plosser briefly touched on the hot-button topic of the U.S.'s large current account deficit, which now shows a strong inflow of foreign capital into the U.S. He said this deficit wasn't a short-term concern, and reckoned that "in the longer run, market forces will help achieve a more sustainable path."

Jeff Bailey : 10/5/2006 6:43:36 PM

I'm not very knowledgeable about CELG and its drugs. But ... if you are as "confused" about the economy as I am (this blog and that blog), but see the stock market climbing and climbing, the biotech sector "gets away" from oil, GDP growth, inflation relative to other sectors.

Marc Eckelberry : 10/5/2006 6:18:20 PM

SAN FRANCISCO, Oct 5 (Reuters) - Micron Technology Inc. on Thursday posted a quarterly profit that rose from a year earlier but fell short of Wall Street expectations, sending shares of the memory chip maker down 7 percent.

Jeff Bailey : 10/5/2006 6:13:08 PM

As of yesterday's close ... Dorsey/Wright's BIOMed bullish % was "bull alert" status at 36%. It would currently nead a 56% reading to achieve bull confirmed status, and 30% reading to turn back to bear confirmed.

Jeff Bailey : 10/5/2006 6:10:42 PM

Celgene (CELG) $45.57 +2.38% Link

Jeff Bailey : 10/5/2006 6:08:14 PM

QQQQ's 50 Top 20-dayNet% Gainers at this Link ... see CELG and AMGN?

Check out the pattern on CELG's bar chart Link . Remember BSC and break of "right shoulder?" Think supply/demand and who might be on the WRONG side of the trade.

Jeff Bailey : 10/5/2006 6:01:45 PM

Oooooo.... Celgene (CELG) $45.57 +2.38% ... could be a squeeeeeze.

Jeff Bailey : 10/5/2006 6:16:10 PM

Billions were made ... IF you believe that for every buyer there's a seller.

It has been rumored that John D. Arnold, a former natural gas trader at Enron, was one of the "big winners" that took the other side of several Amaranth bets.

Jeff Bailey : 10/5/2006 5:42:46 PM

QQQQ Top 50 Weighted Components

That was then on 09/13/06, the day after the BPNDX achieved "bull confirmed" status Link

This is now where the BTK.X shows some life Link

Note "Vista" stocks and Biotech

Marc Eckelberry : 10/5/2006 5:19:58 PM

I don't think billions were made on the energy drop. Maybe some very savvy hedge funds were shorting it, but for the most part, it was a stampede to get out and no buyers to be found. The billions were made by the funds who bought low five years ago and sold the rallies.

Jeff Bailey : 10/5/2006 5:09:44 PM

That was a good one Marc. Page 7 (elevator) ... He's got to be a "conservative." Anymore, I'm not sure I can link "conservative" with "Republican."

Jeff Bailey : 10/5/2006 4:53:23 PM

Billions were also made in the energy drop and there are some still wondering when the drain plug will be inserted to stem the decline.

That would be the other side of buy-side logic.

Nobody has to be the Amaranth of anything, but I can't wait for the book. It will be a best seller.

I'll bet there were 500 good reasons as to why Nat. Gas was going to $20 from $10 (we've probably mentioned them here in the MM) that held Mr. Hunter's conviction until he lost roughly $3 billion!

There seems to be a broad concensus that a trader "can't chase" a bullish move in equities right now.

Trading, even investing isn't an "all or nothing" business.

I would think it is when reading some newsletters. "You can't buy it here" as been staggering the last 4-weeks. Each one has a unique "spin" to keep traders either in cash, or trying to short.

The small caps were the BEST risk/reward short against horizontal resistance. But now, like the other majors, they break that resistance.

You "can't buy them here?" Tell that to an INDU, SPX, OEX short from 1.5 months ago.

Marc Eckelberry : 10/5/2006 4:50:10 PM

A top CEO just sent me this, a copy of a 1961 stayrical book on exectuives of the time. For laughs. Link

Marc Eckelberry : 10/5/2006 4:42:01 PM

Anyway, we hit a VIX low of 10.54 on September 13th and have rallied ever since while the VIX rises. It is supposed to be a rally on a falling VIX, not the other way around.

Marc Eckelberry : 10/5/2006 4:40:42 PM

Jeff, I think billions were lost in the energy drop and they are playing catch up with equities. You just wonder when they will pull the plug. No one wants to be the Amaranth of the stock market.

Marc Eckelberry : 10/5/2006 4:38:42 PM

The VIX keeps climbing on this rally, in a steady upward channel: Link

Marc Eckelberry : 10/5/2006 4:34:51 PM

If they get it above 1709 for NQ, there is risk to 1713/1715. Support overnight will be 1699.50.

Jeff Bailey : 10/5/2006 4:37:13 PM

Marc ... the "same folks" that told everyone to sell oil two days ago at $58.00. Are they any different than the "same folks" that told everyone $65 was a floor?

Am I the only person that has read anything on the Amaranth debacle?

I'm sure there were those saying "sell $10, then $9, then $8, then $7, then $6."

Keene Little : 10/5/2006 4:31:37 PM

I find it a little more than interesting that the bond market gave up all of yesterday's gains today. That's where the smart money trades and they listened when the Fed starts jawboning about not only should we not expect a rate cut but in fact we should be thinking about additional rate increases. The stock market is a little slow on the uptake but they'll soon get it too.

Jane Fox : 10/5/2006 4:18:43 PM

Economic Reports for tomorrow include:

8:30a.m. Sept Non-Farm Payrolls. Previous: +128K.

8:30p.m. Sept Unemployment Rate. Previous: 4.7%.

8:30a.m. Aug Consumer Credit. Previous: +$5.5B.

Jeff Bailey : 10/5/2006 4:17:51 PM

Great point Marc ... REMOVE EMOTION from your trade and before you trade DEFINE you STOP and TARGET.

REMEMBER! ACCOUNT MANAGEMENT comes BEFORE ANYTHING ELSE.

Just like MARKET, SECTOR, STOCKS

It should be ACCOUNT, then TRADE.

Marc Eckelberry : 10/5/2006 4:13:37 PM

Is there something about no rate cuts they do not understand? You sit there as a trader glued to your screen and you get all emotional as you your stops get taken out and you forget to sit back and look at the bigger pciture and try and relax: you are right to book profits even if it was lower or to start shorting this. Higher oil, higher rates, no rate cuts coming, no earnings yet. Be unemotional and stop letting the micro ticks get to you. The time to be long was when NQ broke out above 1661. Now is the time to wait for a pullback. Let them have it if they want, what do you care? Do you want the 20 point NQ trade or do you want the 5 point with quick hands to get it and heartburn at every tick?

Keene Little : 10/5/2006 4:10:42 PM

I'm liking the setup for an early morning pop that should be a good short play. Zooming in a little on the ES chart I posted earlier (1:42), where I said the EW pattern is calling for a 5th wave up to finish the move up from October 3rd, the final leg up itself now needs a 5th wave. I'm thinking a target around ES 1365 should do it and I'd try a short there early tomorrow (assuming of course we get the early pop up). Link

Marc Eckelberry : 10/5/2006 4:08:10 PM

Oct. 5 (Bloomberg) -- Keeping interest rates at current levels or even pushing them higher may be in the "best interests" of the U.S. economy over the long run, Federal Reserve Bank of Philadelphia President Charles Plosser said. "We need to remain vigilant and recognize that maintaining the current stance of policy, or even firming further, may be in the best interests of the economy's long-run performance," Plosser told the CFA Society of Philadelphia in his first public remarks on the economy. He said the "predominant risks" facing the economy now "are on the inflation side."

Marc Eckelberry : 10/5/2006 4:06:39 PM

QQQQ closes at 41.50.

Jeff Bailey : 10/5/2006 4:06:13 PM

Ooops ... The Vista group... yes, very good group to be monitoring.

Marc Eckelberry : 10/5/2006 4:03:39 PM

Just rememeber: these are the same folks who told you to sell oil at 58 two days ago.

Marc Eckelberry : 10/5/2006 4:01:04 PM

I wonder how they will spin this in November when they are getting out of everything.

Marc Eckelberry : 10/5/2006 4:00:17 PM

So we are supposed to chase small caps now? Rates are going higher and we are supposed to go to the group that gets hurt the most by that? What the heck is going on?

Marc Eckelberry : 10/5/2006 3:56:41 PM

This is the "Vista" group: MSFT, INTC, AMD, NVDA, MU, STX, DELL. They are not up as a group, don't buy NDX. That's my take, others might disagree, but I don't trust this day at all.

Jeff Bailey : 10/5/2006 3:52:03 PM

RIO $22.29 +2.52% ... its late-session high was $22.54.

I think it is too early in the month to be thinking pre-expiration action, but know where your strikes are at.

Marc Eckelberry : 10/5/2006 3:49:38 PM

Wait for a pullback to 1685. It will happen.

Marc Eckelberry : 10/5/2006 3:49:19 PM

I hate repeating this, but please don't chase this here. So what if you miss 5 NQ points upside. Big deal.

Jeff Bailey : 10/5/2006 3:49:08 PM

California Pizza (CPKI) $32.08 +0.69% ... still long 1/4 position and will continue to follow and trade.

If you think I'm "mad" from BHI, guess how "mad" I, perhaps you would be if CPKI slipped back to $30.75 tomorrow?

Ahhh.... but if it does .... (stay tuned)

Marc Eckelberry : 10/5/2006 3:48:40 PM

The key NDX stocks I follow are all down. That includes the Vista group.

Marc Eckelberry : 10/5/2006 3:47:07 PM

QM bid.

Marc Eckelberry : 10/5/2006 3:46:55 PM

I still think they want to shove YM 12K up our throats, but so far, its stalling here.

Marc Eckelberry : 10/5/2006 3:46:21 PM

I just hope the average Joe didn't go out and sink his life savings into stocks this morning after all the new high hoopla.

Marc Eckelberry : 10/5/2006 3:45:32 PM

I guess you can't have an unpopular war, sex scandals and bribery scandals and a down market as well. Gotta give the masses something to cheer about.

Jeff Bailey : 10/5/2006 3:42:25 PM

During today's session I told myself this ... if BHI doesn't close back below at LEAST $69.00 into the close, I'm going to close it out anyway. The stock gapped up $1.00 this morning.

Today's trade at $69.00 does get the stock back on a PnF buy signal. Link

Marc Eckelberry : 10/5/2006 3:42:23 PM

Now they are chasing small caps and letting go of some big cap techs. This is healthy, but also a sign of a tired market trying to find new blood. We have been running for 3 months now, non-stop.

Tab Gilles : 10/5/2006 3:41:26 PM

NASDAQ100 HEATMAP Link

Marc Eckelberry : 10/5/2006 3:40:24 PM

Scalp it. Take 'em when they come, but we could get a move to sub 1700 at the close.

Jeff Bailey : 10/5/2006 3:39:58 PM

I don't profile too many naked puts/call here in the market monitor, but from time to time I see one that really makes technical/fundamental sense.

Let me tell ANY trader this!

I think it was two years ago I had profiled a naked call in WLP and it was doing just fine with about 4 or 5 days into expiration. The stock started to rebound, it traded right up to my initial profiled stop. I think the next morning it gapped higher and we/I took a pretty good hit on the account.

BHI $69.84 and now off its $70.23 late session high (my initial stop was $70.25).

Marc Eckelberry : 10/5/2006 3:39:28 PM

I got back in at 1704, stop 1705. This is absurd.

Marc Eckelberry : 10/5/2006 3:38:36 PM

INTC, MSFT, DELL, NVDA, GOOG, TXN, AMD all in the red. This is blatant manipulation with QQQQ volume barely above 50% normal.

Marc Eckelberry : 10/5/2006 3:36:44 PM

If not, then expect 1709 and possibly 1713 by tomorrow

Marc Eckelberry : 10/5/2006 3:36:15 PM

If 1703.50 acts as R here, then we saw the highs.

Keene Little : 10/5/2006 3:36:13 PM

Jeff, I agree there's some short covering going on in this market but I am utterly convinced that it's Fed money driving this thing. The money given to their primary dealers, who simply pile on with it (and the major upticks as Joe sent me prove it), the buying is coming in waves rather than the normal ebb and flow of buying and selling. The hard part for intraday traders is knowing when the next wave of buying will come, or end for that matter.

Marc Eckelberry : 10/5/2006 3:35:21 PM

I see most tech leaders in the red. Makes no sense. This is hedge fund pushing futures, but they will have to reconcile with cash.

Jeff Bailey : 10/5/2006 3:33:18 PM

Bullish swing trade sell partial alert ... Let's sell a portion of the California Pizza Kitchen (CPKI) at the bid of $31.94, limit $31.89.

1/2 of the current 1/2 position, so 82 shares for the risk managed MM profiles.

Jeff Bailey : 10/5/2006 3:30:55 PM

This one is for some account management.

Jeff Bailey : 10/5/2006 3:30:38 PM

I'm not leaving today with a bad taste in my mouth. The BHI naked call really gets to me. I want to end on a positive note as we've worked and traded so hard, and so smart.

Keene Little : 10/5/2006 3:29:29 PM

Couldn't have said it better myself (thanks Joe):

15:06pm - 858 point move on the Nas NMS tick in one minute just hit. What does this mean? Out of 2650 stocks in the Nasdaq NMS, 858 more of them had an uptick buy on the bid than the previous one minute time frame. A buy program that can do that boggles the mind in the size it would have to be to pull off such a feat.

BTW, the NYSE had a 1004 move in the tick in one minute at the same time. Put the two together and we are talking major dollars. The fact that this buying hit all at once off of no news...well, how the hell can you trade intraday against that kind of power.

Jeff Bailey : 10/5/2006 3:27:43 PM

IWM $73.87 +1.25% ... see that 2.8 million shares 10-minutes ago? Somebody else may have had a furball in their throat.

Marc Eckelberry : 10/5/2006 3:22:25 PM

TRINNQ keeps rising and oil is still above 60. NQ back below previous highs. Nice job guys.

Jeff Bailey : 10/5/2006 3:17:54 PM

Ouch!

Jane Fox : 10/5/2006 3:17:52 PM

OK now we have the VIX making new daily lows and AD volume making new daily highs. All is well in bull country.

Jeff Bailey : 10/5/2006 3:17:04 PM

Swing trade NAKED Call Stop Alert with BHI $70.10 ... buying back the two (2) BHI-JN $2.10.

Jane Fox : 10/5/2006 3:15:04 PM

TICKS are going crazy.

Marc Eckelberry : 10/5/2006 3:14:05 PM

Next entry would be ES 1364? Or NQ 1709. But they might have just hit all the stops at 1704 and that's it.

Marc Eckelberry : 10/5/2006 3:12:51 PM

Now watch them sell it.

Marc Eckelberry : 10/5/2006 3:12:37 PM

out -2

Marc Eckelberry : 10/5/2006 3:12:08 PM

NQ has not hit new highs, ES did. So far.

Jeff Bailey : 10/5/2006 3:10:37 PM

RIO $22.53 +3.58% ... session highs ...

Jeff Bailey : 10/5/2006 3:10:09 PM

IWM $73.60 +0.89% ...

Keene Little : 10/5/2006 3:10:07 PM

Rallying without another pullback now tells we either have major manipulation going on here (not hard to believe) or else we're already into an ending pattern rather than a stronger wave up as I had posted on the ES chart. In other words, if we chop our way higher now we could/should see a top fairly soon and one that is marked with more bearish divergences. I'm no longer interested in scalping a long but instead will wait to see if we get a small ascending wedge for the 5th wave up, which would make for a good short play setup (probably not until tomorrow though).

Jeff Bailey : 10/5/2006 3:09:45 PM

CPKI $31.91 +0.15% ... gets green for first time today.

Jeff Bailey : 10/5/2006 3:09:20 PM

Here they go ... looks like offers being pulled.

Jane Fox : 10/5/2006 3:08:12 PM

I don't see these ES new daily highs having followthrough. VIX is not making new daily lows.

Jeff Bailey : 10/5/2006 3:06:52 PM

I feel a fur ball in my throat.

Jeff Bailey : 10/5/2006 3:06:32 PM

BHI $69.81 +2.70% ...

Jeff Bailey : 10/5/2006 3:04:30 PM

03:00 Market Watch found at this Link

Jeff Bailey : 10/5/2006 3:00:39 PM

I really try and put myself in a bull and bear's shoes with BHI.

Negatives in my opinion would be some of the Nat. Gas shut ins. OPEC potentially cutting production (what OPEC members do vs. say they do is debatable).

Positives are that energy companies can still make a lot of money with oil above $35.00. And Nat. Gas above $4.00 is great compared to several years ago.

Marc Eckelberry : 10/5/2006 2:59:58 PM

INTC, MSFT, AAPL, CSCO down. If they jam it up, well, you know we are all fools anyway.

Marc Eckelberry : 10/5/2006 2:57:52 PM

There is still life in the short lane, but if it wasn't for QM 60 and TRINNQ 1.17, I would be flat. Let's give it a few more minutes and see the 3 pm turn. Don't bet the farm with this trade, please. If it works, you can build on it later by adding contracts. If stopped, it will be a minor loss and well worth the try.

Marc Eckelberry : 10/5/2006 2:52:34 PM

60 oil better hold...

Jeff Bailey : 10/5/2006 2:52:13 PM

Baker Hughes (BHI) $69.63 +2.44% ...

Marc Eckelberry : 10/5/2006 2:51:24 PM

I am going to get busted and then they will immediately pull it back.

Jeff Bailey : 10/5/2006 2:48:10 PM

White House's Hubbard Sees 3Q GDP in 1%-Low 2% Range

Marc Eckelberry : 10/5/2006 2:45:10 PM

Sure wish I had bought more gold at 565. It just reminds me to stay away from the news.

Jeff Bailey : 10/5/2006 2:45:32 PM

U.S. Oil Fund (USO) $54.52 +0.88% ... right where we got bullish stopped.

Jane Fox : 10/5/2006 2:44:49 PM

WASHINGTON (MarketWatch) -- It is premature to talk about interest rate cuts when more rate hikes might be needed in coming months to combat inflation, the newest Federal Reserve bank president said Thursday.

Charles Plosser, an academic who took over the reins at the Philadelphia Federal Reserve Bank earlier this year, said he is much more concerned that inflation could spiral out of control than he is about a sharp slowdown.

In his maiden speech to an accounting trade group in Philadelphia, Plosser said the economy is on firm footing and the slowdown under way in the housing sector is not unwelcome.

"Recent developments in the real economy may be suggesting that lower interest rates are called for, but I do not believe that is the case," Plosser said in prepared remarks made available in Washington.

Plosser will not be a voting member of the Federal Open Market Committee until 2008. But his comments put him squarely in the camp of Richmond Fed president Jeffrey Lacker, who has advocated rate hikes at the last two FOMC meetings. The majority of FOMC members have supported holding rates steady at the past two meetings

Marc Eckelberry : 10/5/2006 2:43:56 PM

In fact, my stop is back at 1704. Others, exit now for +1 if you wish before Jeff throws another exclamation point at me.

Marc Eckelberry : 10/5/2006 2:41:26 PM

I think a short at 1702, stop 1703 can be hardly characterized as inflicting pain on bears. It's a teaser trade, just in case we do get a closing pullback. It's counter-trend, but it's at highs.

Marc Eckelberry : 10/5/2006 2:39:35 PM

They are holding it up, I don't exopect much from this, but I'll leave it open just because of NDX 1687. Besides, I'd rather have that than a long now.

Jeff Bailey : 10/5/2006 2:39:23 PM

Those "bear wedges" have been "bear killers" for several weeks now. Link

Jeff Bailey : 10/5/2006 2:36:26 PM

I'll bet ER traders are watching this ... Link

Jeff Bailey : 10/5/2006 2:33:17 PM

Marc! Are you inflicting some pain on those bears?

Jeff Bailey : 10/5/2006 2:32:30 PM

CONOCO, ENCANA TO BOOST CANADA OIL, REFINING

DJ- Second-largest U.S. refiner and Canada's largest oil and gas producer to spend $10.7 billion over next decade in joint ventures to boost Canada's oil production and deepen U.S. market access.

Marc Eckelberry : 10/5/2006 2:30:58 PM

I'm moving that stop up just a hair to 1703.

Marc Eckelberry : 10/5/2006 2:29:03 PM

1350 lines up indeed with call resistance (see my post wee hours of the morning 2:16:49 AM)

Jeff Bailey : 10/5/2006 2:27:11 PM

OPEC TO HOLD OCT 18-19 MEETING

DJ- OPEC will hold an extraordinary meeting on Oct. 18-19, sources told the state-run Algerian Press Service. Earlier, senior OPEC officials said the majority of the group's 11 members will cut some 3.5% from its current production levels.

Keene Little : 10/5/2006 2:26:10 PM

How aobut your take on some action in the SPX calls. Yesterday AM someone bought 1500 of these at 13.80 and someone closed 1500 in PM at about 28.50. Now I think it was someone with very deep pockets who knew what they were going to be buying with Fed money and first of quarter funds. They pocketed a tiddy sum for their efforts. I gleaned the buy and sell since the Open Interest ended the same at EOD as Start of Day. Bottom line is someone just sold 1000 and 150 of these at 31.3. Could they be planning an enod of day run down? Thoughts please.

Dave, good analysis on the OI for these call options. It makes me challenge my thinking on what I've been posting today. The EW pattern tells me we're going to get another leg higher, probably into the close and maybe finishing up tomorrow morning before we start a more significant pullback. How significant a pullback is the big question in my mind. You pose a great question for others to think about though so thanks for the email.

Marc Eckelberry : 10/5/2006 2:24:25 PM

Short NQ 1702, lowering stop to even.

Marc Eckelberry : 10/5/2006 2:21:34 PM

The SOX is keeping smart money from committing more to this. Besides, now some are putting money to work in energy and metals.

Jeff Bailey : 10/5/2006 2:21:30 PM

I'm going to associate AMGN $75 with BTK.X 705.00

Jane Fox : 10/5/2006 2:19:30 PM

More from Linda, "If the TRAN stays below and closes below that daily Keltner resistance, the relentlessness may be ending. Did you notice that the SOX has broken down out of its rising price channel off the summer's low, a couple of days ago, and for the last couple of days, it's been retesting the channel from the bottom? So far, that channel's support is now serving as resistance."

Marc Eckelberry : 10/5/2006 2:19:13 PM

So COMP 2300, SPX 1350 and QQQQ 41.50. It's not rocket science.

Marc Eckelberry : 10/5/2006 2:19:51 PM

Oh, I forgot: QQQQ 41.50 (41.49). That was predictable with all that huge call resistance at 42 and minor put support at 41.

Marc Eckelberry : 10/5/2006 2:17:50 PM

Ok, that's better.

Marc Eckelberry : 10/5/2006 2:17:40 PM

NYSE 8550. TRAN 4600.

Marc Eckelberry : 10/5/2006 2:17:12 PM

SPX 1350, COMP 2300, DOW 11850. They like the round numbers.

Marc Eckelberry : 10/5/2006 2:16:42 PM

They are doing a good job of scaring me.

Marc Eckelberry : 10/5/2006 2:16:11 PM

ADDEC lines positive but up down volume not confirming per TRIN and TRINNQ.

Marc Eckelberry : 10/5/2006 2:15:09 PM

If NQ breaks out, resistance is 1709.

Marc Eckelberry : 10/5/2006 2:11:12 PM

OIl back below 60. Now we find out if bulls still feel excited at the close.

Jeff Bailey : 10/5/2006 2:10:14 PM

AMGN did "bouble bottom" on its bar chart at the End of July

Sector Seasonality Calendar Link

Jeff Bailey : 10/5/2006 2:06:31 PM

Amgen (AMGN) $74.39 +1.94% Link ... might be the "theme" of large cap.

Jane Fox : 10/5/2006 2:05:13 PM

It is so nice to have Linda in my corner.

Jane Fox : 10/5/2006 2:04:37 PM

Here is a comment from Linda. "Gosh, Jane, are you watching the TRAN? The SPX and Dow aren't going to retreat much or any as long as the TRAN is pushing higher. The TRAN has pushed past a 50% Fib retracement from the May high into the summer low and it's pushed past daily Keltner resistance at about 4608 too."

Marc Eckelberry : 10/5/2006 2:04:25 PM

You see how 61.8% projection of wedge apex points had resistance for some time (1677). 100% projection is 1718, but I think we have seen te highs for now, especially with NDX 1687.

Marc Eckelberry : 10/5/2006 2:02:25 PM

Here is a better chart of NQ. I updated fib projections and define the channel more as a wedge. As you can see, I drew a projection off apex points of wedge in case we break out. But so far, NQ is respecting resistance and the short from 1702 is alive: Link

Jim Brown : 10/5/2006 1:58:58 PM

Reader Challenge - The results from my reader challenge yesterday were surprising. The S&P closed at 1350 on Wednesday. Exactly half of the responses picked numbers higher and half expected a lower close on Friday. The range of guesses were from a low of 1321 to 1382. Almost exactly a 30 point range both above and below yesterday's 1350 close. I view this as a nearly perfect market. Half expected 1350 to be bought and half expected it to be sold. It is not surprising that today's market action is flat if this is an indication of investor sentiment across the total spectrum. However, More than half of the predictions for moves over 1350 also said they would be looking to short the market if their predictions were reached. It appears those with higher targets felt that the move was going to exhaust itself fairly soon. It should be interesting as the week comes to a close.

I will announce the winner of the book in the monitor tomorrow afternoon. Start sharpening your pencils and study your charts for a new challenge I will announce in the monitor next Tuesday.

Marc Eckelberry : 10/5/2006 1:55:06 PM

For most traders, it might be a better day to stay flat. As I said, this is just a test entry and it all depends on QM holding above 60 at the close.

Marc Eckelberry : 10/5/2006 1:54:16 PM

I'm still short NQ 1702, stop 1704. I am looking at QM with some concern, but my stop is so tight, it is worth a shot. We should pullback to 1683/1685 by tomorrow if these highs hold as R.

Marc Eckelberry : 10/5/2006 1:52:37 PM

As Keene said, we will find out vey quickly how much manipualtion is going on. The justification for pushing to all time highs before earnings was lower oil and lower rates. We have neither today.

Marc Eckelberry : 10/5/2006 1:51:02 PM

As long as oil holds 60, it will be tough for bulls to press much higher.

Jeff Bailey : 10/5/2006 1:48:18 PM

Irving Oil Explores Building 2nd New Brunswick Refinery

DJ- Irving Oil Ltd. is looking at the possibility of building a second 300,000 barrel-a-day refinery in Saint John, New Brunswick, the company said Thursday.

Irving Oil plans to decide on whether to move forward with a permit application for the new refinery by early 2007, said a company release.

In the meantime, the company is conducting marketing, feasibility, environmental, socio-economic and siting studies.

The refinery "would respond to a clear market opportunity in the U.S. Northeast," which consumes 1.7 million barrels a day of transportation fuels, the release said. The project would be the first major refinery built in North America in over 25 years.

Irving Oil owns and operates the 300,000 barrel-a-day refinery at Saint John on the Canadian east coast. The refinery, which is Canada's largest, predominantly exports petroleum products to the northeastern U.S. market. The company will continue to invest in its existing facility, the release said.

Irving is also a 25% partner in Canaport LNG, with Spanish energy company Repsol holding the remaining 75%. Canaport LNG has begun construction of an LNG terminal at Saint John, which is expected to have an import capacity of 1 billion cubic feet a day of natural gas and be operational in 2008.

Marc Eckelberry : 10/5/2006 1:46:54 PM

COMP 2300.

Jeff Bailey : 10/5/2006 1:44:08 PM

AMEX Networking Index (NWX.X) 241.58 +0.71% ... edges above its 200-day SMA for first time since falling below in early June.

Jeff Bailey : 10/5/2006 1:42:58 PM

GSTI Software Index (GSO.X) 180.96 +0.15% ... challenges recent congestion highs.

Keene Little : 10/5/2006 1:42:25 PM

If this rallies higher directly from here then it will be another example of the short term EW patterns being skewed by manipulation. But if we get another pullback, this is the pattern I believe is playing out on the ES 10-min chart here and why I think it sets up a long play (for a scalp): Link

Tab Gilles : 10/5/2006 1:40:31 PM

Jeff, in reference to OSTK, another similar company...BIZAUCTIONS INC (BZCN.PK)is also up today. Link

Jeff Bailey : 10/5/2006 1:40:15 PM

California Pizza Kitchen (CPKI) $31.74 -0.37% ...

Jeff Bailey : 10/5/2006 1:38:36 PM

iShares Russell 2000 (IWM) alert $73.43 +0.62% ... 61.8% retracement of 05/08/06 high close to recent 06/13/06 low close.

Marc Eckelberry : 10/5/2006 1:34:17 PM

NQ is also right at trendline resistance. With oil up, semis down, it will be pretty much impossible to get above that today. I think...

Keene Little : 10/5/2006 1:34:11 PM

If you're interested in trying the long side for another run higher, I'd suggest ES 1357 for an entry and use 1355 for your stop. Nice and tight and see if the trading range holds. Upside target would be near 1368 (will know better once the current leg down finishes, assuming of course it turns back around and rallies).

Marc Eckelberry : 10/5/2006 1:32:43 PM

ES did not make the cut for long above 1359.25. NDX still faces resistance at 1687. I'm short NQ 1702, stop 1704.

Jane Fox : 10/5/2006 1:25:50 PM

* NYSE VOLUME 978M
* NYSE HAS 1,721 ADVANCERS
* NYSE HAS 1,430 DECLINERS
* NYSE HAS 154 ISSUES UNCHANGED
* NYSE HAS 190 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 9 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 1.13B
* NASDAQ HAS 1,635 GAINERS
* NASDAQ HAS 1,263 LOSERS
* NASDAQ HAS 160 ISSUES UNCHANGED
* NASDAQ HAS 65 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 19 ISSUES SETTING 52-WEEK LOWS

Jeff Bailey : 10/5/2006 1:27:10 PM

Almost profiled a swing trade long on break above $97,500 on Wednesday.

Jeff Bailey : 10/5/2006 1:26:09 PM

Berkshire Hathaway Class A (BRK.A) alert Link $100,000.00 !!!!! and another all-time high.

Jeff Bailey : 10/5/2006 1:23:25 PM

Overstock.com (OSTK) $18.54 +6.12% ...

Jeff Bailey : 10/5/2006 1:21:43 PM

01:00 Internals found at this Link

Keene Little : 10/5/2006 1:20:00 PM

One more move back down to the bottom of today's trading range should set up the long play for the next leg up (which should be the last one before a much bigger pullback if not the start of something more serious to the downside).

Jeff Bailey : 10/5/2006 1:11:05 PM

Oil Service HOLDRs (OSH) jumped to their 10/02/06 pre-gap down close and 21-day SMA, and give back some of morning's gains.

I'm DARNED SURE that my BHI NAKED CALL stop should be HONORED above $70.00.

Marc Eckelberry : 10/5/2006 1:07:56 PM

Stops should be no higher than 1359.75 if short.

Marc Eckelberry : 10/5/2006 1:05:30 PM

OIl drops and I would not be short ES if it gets above 1359.25. QM support is 59 now that 59.80 broke.

Jeff Bailey : 10/5/2006 1:03:56 PM

01:00 Market Watch found at this Link

Jeff Bailey : 10/5/2006 1:00:24 PM

MARRIOTT 3Q NET DROPS 5.4%, UPS VIEW

DJ- Hotel operator reports net income of $141 million, or 33c a share, beating analysts' expectations of 30c. Revenue is flat at $2.7 billion, slightly lower than predicted. Marriott raises 2006 view to $1.59-$1.64.

MAR $39.88 +4.04% Link ... that's an all-time high.

Jane Fox : 10/5/2006 12:56:31 PM

ES has traded in a very narrow 4 point range today. This type of consolidation at yearly highs suggests it will move higher although in light of the rally we saw yesterday I'm not so sure that scenario will play out today.

Marc Eckelberry : 10/5/2006 12:50:24 PM

ZB keeps finding solid resistance at 200 weekly ema (Linda, here it is again, just like the SOX in the past). Bond bulls have their limit there: Link

Jane Fox : 10/5/2006 12:49:20 PM

ER has been using its PDH as support today so if it closes below its PDH I will turn bearish. Link

Marc Eckelberry : 10/5/2006 12:46:27 PM

QM drops below 60 and bulls will try again. This could end in a doji day, no one really wins, but bulls don't lose.

Keene Little : 10/5/2006 12:45:38 PM

Thinking that we're going to get an a-b-c pullback for a 4th wave correction (if not an a-b-c-d-e sideways correction), this morning's pullback would be wave-a and the bounce to the high just before noon would be wave-b. Now we're due for wave-c down which is what it looks like we're getting now.

If it's going to just go sideways then we'll hold at today's low and get another up-down sequence before it's ready to rally again. If it drops further then I'll be watching for a Fib projection to 1354.25 (where the 2nd leg down today reaches 162% of the 1st leg down). We're getting a sharp bounce back up as I type which makes it appear we're just going to get the sideways consolidation.

Marc Eckelberry : 10/5/2006 12:44:46 PM

ES resistance is now 1359.25.

Marc Eckelberry : 10/5/2006 12:45:32 PM

The weakest link (SMH): Link

Marc Eckelberry : 10/5/2006 12:39:25 PM

Anyway, the rule is never buy new highs, wait for the confirmaton pullback and support holding, which is now DOW 11750. Most big traders wait for that and don't get all emotional about such an event. If we pullback to DOW 11750 and hold it, there will be some serious buying. Now it's just a lot of jagged movement.

Marc Eckelberry : 10/5/2006 12:36:56 PM

The proof is in the sell the news reaction in RLX, retail index. That means perfection is priced in. In line means sell, miss will mean more sell and only upside suprise will get buys. Retail had uspide suprise but it was all predicated on lower gasoline prices and early cold weather. That can change in a week, even a day. No wonder traders are getting cautious.

Marc Eckelberry : 10/5/2006 12:33:16 PM

I think billions of dollars were short DOW new highs and that is what gave us yesterday. Nothing more than that. Now they have to prove that it is worth it and that will be interest rates, oil and earnings.

Jeff Bailey : 10/5/2006 12:31:09 PM

The volume in the BHH on the move above its 200-day SMA isn't what I would consider "realization" volume. That is, a sudden shift in MARKET think. When a longer-term SMA like the 200-day is violated (up/down) I look for VOLUME, which to me signals a sudden "realization" that something has, or is changing longer-term.

Marc Eckelberry : 10/5/2006 12:29:30 PM

Funds did all their buying in September. I think the extraordinay amount of short interest and rotation out of energy contributed to this slightly premature push ahead of earnings.

Jeff Bailey : 10/5/2006 12:24:37 PM

I should say BUYERS in my 12:22:57. If you've been following some of the commentary since September 1, you know there are some that have been shorting the scale all the way up.

Marc Eckelberry : 10/5/2006 12:23:02 PM

No one is interested in buying it, but no one is interested in selling it. Where will they run the stops? Below, or above?

Jeff Bailey : 10/5/2006 12:22:57 PM

NASDAQ getting in gear again. RUT.X probes quarterly resistance.

Looks like bulls are playing another "ace card" with the biotechs. (first it was semiconductors, then software)

Biotech HOLDRs (BBH) $186.20 +0.83% Link

NQ/QQQQ/NDX bulls will leverage with first sign of weakness under yesterday's lows.

Might be some NAKED calls sellers in trouble here too?

Jeff Bailey : 10/5/2006 12:11:28 PM

Starbucks (SBUX) $38.71 +7.64% Link ... nearing all-time highs.

Jeff Bailey : 10/5/2006 12:10:32 PM

Kraft Ups Maxwell House Ground And Instant Coffee Prices

DJ- Kraft Foods (KFT) Thursday hiked the list prices of Maxwell House ground and instant coffee effective this week, following similar increases this week by P&G Folgers.

The price of Maxwell House ground coffee has been raised 12 cents per 11 to 13 ounces, the company said. Instant coffee prices were lifted 3 cents an ounce or 48 cents a pound.

"We responded to sustained higher green coffee prices associated with robusta beans, which have risen 70% in price in the last year," said Larry Baumann, Kraft spokesman in Tarrytown, N.Y.

Maxwell House last changed its list prices in August 2005 with a reduction, following an increase in March 2005.

Kraft Maxwell House and Folgers - units of multinational companies - answer to shareholders and are driven by bottom-line results, traders said. With their huge grocery customers, revenues at Maxwell House and Folgers are affected by even-moderate changes in green coffee prices.

KFT $35.65 +0.11% Link

Marc Eckelberry : 10/5/2006 12:01:15 PM

If we close up today, I expect a deeper pullback tomorrow. If on the other hand, we can get some profit taking today, we coud see a strong weekly close. Watch ES 1359 here. But frankly, I think NDX hit the high for the week.

Marc Eckelberry : 10/5/2006 11:59:01 AM

NDX found precise resistance at 76.4% 2006, 1687.19. This is why I use 23.6 and 76.4. They are the standard now, just as much as 38.2 and 61.8.

Marc Eckelberry : 10/5/2006 11:56:45 AM

Bearish divergences on that last spike and we should visit ES 1354/1355.

Marc Eckelberry : 10/5/2006 11:57:13 AM

As I mentioned earlier, QM has support at 59.80 (9:28:34 AM ). This is excatly where they started bidding it again. I think we close above 60 now that opec is in the cutting game.

Keene Little : 10/5/2006 11:53:56 AM

That spike up finished a 3-wave bounce from this morning's low and so now we should get a deeper pullback or just a continuation of the sideways consolidation.

Marc Eckelberry : 10/5/2006 11:53:42 AM

YG closed the gap this morning and has support at 571.30.

Marc Eckelberry : 10/5/2006 11:53:21 AM

Bulls need to hold ES 1359, or the traditioanl bond relationship with stocks takes hold, which it should have since the open. I am using wide stops today.

Jane Fox : 10/5/2006 11:52:44 AM

Here is how the markets are trading in relation to their PDRs. Link

Jeff Bailey : 10/5/2006 11:41:50 AM

European Central Bank's Wellink (comments)

Inflation Risks Still On Upside

Monetary Policy "Still Accommodative"

ECB 'Always Vigilant', Closely Monitors Inflation

Growth Stronger Than Expected

Domestic Demand Drives More Dynamic Growth

Oil Prices "Making A Difference"

Keene Little : 10/5/2006 11:39:17 AM

It's certainly been a sideways correction so far. We should get another leg down but if it instead continues sideways and holds above this morning's low then we'll have a pretty clear sign that this will continue higher.

Jeff Bailey : 10/5/2006 11:34:42 AM

Baker Hughes (BHI) $68.76 +1.17% ... moves into morning gap.

Jeff Bailey : 10/5/2006 11:33:12 AM

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

See BHI update at this morning's 10:57:07

Jeff Bailey : 10/5/2006 11:27:53 AM

Swing trade NAKED CALL lower stop alert ... For the two (2) Baker Hughes BHI Oct. $70 Calls to $70.10 in the underlying shares.

Jeff Bailey : 10/5/2006 11:26:37 AM

Baker Hughes (BHI) $69.37 +2.07% ...

Jeff Bailey : 10/5/2006 11:21:34 AM

11:00 Internals found at this Link

Jane Fox : 10/5/2006 11:13:44 AM

This is pretty cool.

Link

Jeff Bailey : 10/5/2006 11:03:55 AM

11:00 Market Watch found at this Link

Tab Gilles : 10/5/2006 11:01:07 AM

DYNAVAX TECHNOLOGIES (DVAX) $6.37 +1.43 (28.83%)

Six weekly shots supress hay fever for years - study Wed Oct 4, 2006 5:00 PM ET

By Gene Emery

BOSTON, Oct 4 (Reuters) - A new allergy treatment may offer long-term relief from the miseries of hay fever with only six weekly shots, instead of injections once or twice a week over three to five years, researchers reported on Wednesday.

Not only does the relief seem to last more than a year, the technique may be applied to other substances that spark allergic reactions, said Peter Creticos of the Johns Hopkins Asthma and Allergy Center in Baltimore, leader of the team.

"We're interested in grass, we're interested in dust mites, we're interested in cats," he told Reuters.

Of the 40 million hay fever sufferers in the United States, about 20 million to 30 million are allergic to ragweed, a yellow flowering weed which appears east of the Rocky Mountains and is a top cause of hay fever symptoms in the autumn season.

"Ragweed is misery for people in the fall," said Creticos.

Recipients of the treatment, known as AIC, had fewer hay- fever symptoms, used less allergy medication and reported a better quality of life than volunteers who received six dummy shots.

"We're not just treating the symptoms, we're targeting the fundamental defects in the immune system that cause allergy," said Creticos. "It's really exciting."

Even if larger tests confirm the findings, published in the New England Journal of Medicine, the shots probably wouldn't be available to the public until 2009 or 2010 at the earliest.

The treatment is being developed by Dynavax Technologies Corp. of Berkeley, Calif. Four of the 11 authors of the Journal study have financial ties to Dynavax or a financial interest in the process.

AIC stands for Amb a 1-immunostimulatory oligodeoxyribonucleotide conjugate.

ALLERGIC REACTIONS

The current system of shots used by doctors for nearly a century is effective but carries the risk of a life-threatening allergic reaction. They are also so inconvenient many people forego the treatment.

The Creticos study involved 25 volunteers who experienced ragweed allergic problems each fall season. Six weeks of shots, given prior to the 2001 ragweed season, produced more than a year of relief for 14 volunteers, gains not seen in the 11 who received placebo injections. Not only did the AIC recipients do better that fall, they also scored better on measures of symptoms in the peak of the 2002 season.

For example, while placebo recipients typically took antihistamines for eight days and decongestants for four days, the AIC patients felt they needed few, if any, allergy medicines.

The researchers did not track the volunteers after the 2002 season because the number of people willing to continue in the study was too small to be meaningful, Creticos said. A larger study that will try to enroll 140 volunteers is underway.

There were no short-term side effects from the treatment, but the longer-term risks need to be assessed, the researchers said.

People develop an allergic reaction because their immune system overreacts to a substance.

"Allergy shots haven't changed since 1911 when they first started," Creticos said. "Now we're beginning to learn how to redirect the inappropriate immune response and shut it down much more quickly and much more efficiently for, we hope, at least two ragweed seasons, if not longer." Link Link

Jeff Bailey : 10/5/2006 10:58:06 AM

BHI Oct. $70 Naked Call (update alert) see below at 10:57:07 time stamp

Marc Eckelberry : 10/5/2006 10:52:18 AM

Watch SPX 1350. That has large call resistance and a psychological barrier until further news on earnings. That is my take at this point, Maybe some overrun, just to keep shorts honest, but we have come a long way since July with no real earnings news to speak of. at some point, that and the health of the economy will come back in focus.

Jeff Bailey : 10/5/2006 10:57:07 AM

Baker Hughes (BHI) Oct. $70 Naked Calls alert $69.48 +2.25% ... 60-minute interval chart at this Link

For my MM Profiles this trade is NOT looking favorable at this point and STOP is firm at $70.25 in the underlying. October "Max Pain" theory is $70.00, with OI looking heaviest at $65 and $70 strikes.

Stock "should" backfill today's gap at some point, and the sooner the better. IF NAKED 2, could either close out, OR, go LONG 100 share as near-term hedge.

Marc Eckelberry : 10/5/2006 10:48:21 AM

I agree Keene. Too many wanting to grab the bullish headlines. But I was hoping for a retest of 1350/1352.

Keene Little : 10/5/2006 10:41:12 AM

I'm not seeing anything yet that suggests more than a pullback coming. A sideways/down correction today, and maybe into tomorrow, would fit the EW pattern as I showed in the ES chart below (12:23 AM). It would make intraday trading very difficult.

Marc Eckelberry : 10/5/2006 10:39:29 AM

TRAN finds R below 50% 2006, 4574.19. Talk about non-confirmation of the DOW theory.

Jeff Bailey : 10/5/2006 10:38:37 AM

EIA Weekly Nat. Gas Storage Table at this Link

Build of 73 Bcf

Jane Fox : 10/5/2006 10:38:24 AM

If the VIX were making new daily highs along with the AD volume making new daily lows I would say jump on board but this is not the case. And as you can see there is no follow through.

Marc Eckelberry : 10/5/2006 10:38:18 AM

Watch RLX for any clue of a turnaround.

Jane Fox : 10/5/2006 10:36:48 AM

TRIN is a very neutral 1.06.

Jane Fox : 10/5/2006 10:36:08 AM

AD volume to new daily lows and you know what I say when the AD volume is making new daily lows. Don't even think long.

Jane Fox : 10/5/2006 10:34:02 AM

AD volume dips below 0 and AD line is +137. AS I said very unclear.

Jane Fox : 10/5/2006 10:33:26 AM

VIX is telling me ES's daily lows will hold or, if broken, will not have followthrough. Internals very unclear right now.

Marc Eckelberry : 10/5/2006 10:30:54 AM

1354 is support followed by 1350. Then I might consider.

Marc Eckelberry : 10/5/2006 10:30:24 AM

Nevertheless, I would not take a long even if you paid me.

Marc Eckelberry : 10/5/2006 10:29:31 AM

Friday could see a retest of the breakout at 1350, but I was hoping for today. Could still happen, but bears sneed to wake up. QM will see some profit taking and that will be all the excuse they need to blow through stops.

Marc Eckelberry : 10/5/2006 10:26:36 AM

Rates are up accross the board, oil is up, retailers are down, SOX is down, TRAN is down: can we please get logical again?....This is when you know the rally is on thin ice. I am vaguely bullish into November (although now too many leaning on that), but if we rally today with this set up, a curse on rational thinking.

Jane Fox : 10/5/2006 10:16:58 AM

These certainly do not have the clarity they did yesterday. Link

Marc Eckelberry : 10/5/2006 10:09:47 AM

RLX 487.22, down 3.25.

Marc Eckelberry : 10/5/2006 10:09:32 AM

Then why is RLX down?

Jeff Bailey : 10/5/2006 10:07:23 AM

Retail Sales Rise Sharply in September ... AP Story Link

Jeff Bailey : 10/5/2006 10:04:30 AM

10:00 Market Watch found at this Link

Keene Little : 10/5/2006 10:03:14 AM

Choppy and spiky price action near the highs here probably means a pullback is coming.

Marc Eckelberry : 10/5/2006 9:58:13 AM

QM bid and we keep holding. Someone has to blink: oil shorts or equity shorts.

Marc Eckelberry : 10/5/2006 9:57:37 AM

The qusetion is when: now, or after a bounce.

Marc Eckelberry : 10/5/2006 9:57:17 AM

Bulls have been pushingthrough bearish duvergences and non DOW theaory confirmation on the lower rate and lower oil premise. Today, oil is back above 60 and the jobless claims has ended any rate cut notion for now. What is left is just speculative air. Unless QM drops below 60, we should get at least a move to ES 1354/1355 and NQ 1685.

Marc Eckelberry : 10/5/2006 9:54:30 AM

Everyone waiting for oil to drop, but it is holding 60.60.

Jeff Bailey : 10/5/2006 9:54:36 AM

I was under the impression that Alcoa's (AA) earnings were being released this morning. They are not. They're slated for release on Tuesday, 10/10/06. Consensus $0.79 per share.

Marc Eckelberry : 10/5/2006 9:48:54 AM

Momentum traders will have to make a fast decision soon. Once they decide to book profits, it will get down to ES 1351 and NQ 1683 pretty quickly.

Marc Eckelberry : 10/5/2006 9:47:51 AM

I know it's 2 weeks away, but too many traders leaning on SPX 1350. As I pointed out last night, SPY pc ratio is .38. That doesn't mean we can't rally now, just that 1350 will be tough next week.

Keene Little : 10/5/2006 9:44:26 AM

The immediate question for traders this morning is whether or not this very early push to the upside is an effort to continue yesterday's rally or instead a push up to sell into. As I said, the market needs at least a rest to digest but if a lot of new money is coming into the market (via the Fed) then charts won't mean much right now. This is a risky spot for both sides.

Marc Eckelberry : 10/5/2006 9:42:10 AM

NQ overnight highs is channel resistance on the daily. Bulls are hoping to break out above that, but it's not a done deal.

Marc Eckelberry : 10/5/2006 9:39:13 AM

Since QM has R at 61, it will probably retrace here and give bulls an excuse to run stops at overnight lows or slightly above.

Marc Eckelberry : 10/5/2006 9:38:12 AM

The darlings of ths rally, retailers, are down.

Jane Fox : 10/5/2006 9:33:50 AM

Well so much for my theory we would have a bullish open. Ad line -94 and AD volume flat.

Marc Eckelberry : 10/5/2006 9:28:34 AM

QM has resistance at 61, support at 59.80.

Jane Fox : 10/5/2006 9:28:32 AM

WASHINGTON (MarketWatch) -- First-time filings for state unemployment benefits fell to their lowest level since July in the latest week, in an indication the labor market is stabilizing.

U.S. initial jobless claims dipped by 17,000 to 302,000 for the week ending Sept. 30, their lowest mark since July 22, the Labor Department said Thursday.

The four-week moving average of new claims also fell, to 313,500. It's a decrease of 2,750 and is the lowest since Aug. 12.

Economists consider the four-week average a better indicator of labor market conditions because it smoothes out one-time events like strikes and weather interruptions.

Jane Fox : 10/5/2006 9:27:37 AM

YORK (MarketWatch) -- The dollar traded little changed against the euro early Thursday after the European Central Bank lifted its key interest rates and hinted at further rate hikes down the road.

The European Central Bank on Thursday raised its key interest rate for the fifth time in eleven months. The interest-rate hike, to 3.25% from 3%, was widely expected. ECB President Jean-Claude Trichet said that the central bank will need to watch prices "very closely" and that a further reduction of accommodation is warranted if the economy grows as forecast. Monetary policy in the eurozone remains accommodative, he said

Marc Eckelberry : 10/5/2006 9:25:39 AM

Again, I stay on this one: gold, gold, gold.

Keene Little : 10/5/2006 9:25:30 AM

With a flat overnight session we don't have much of a sense of direction from that. A little follow through to the upside perhaps but I wouldn't be surprised to see the market take a rest after the 2-day romp in the fields by the bulls.

Marc Eckelberry : 10/5/2006 9:25:03 AM

The basic premises for this entire rally is starting to look mighty doubtful.

Marc Eckelberry : 10/5/2006 9:24:31 AM

With jobless claims down, the whole rate cut scenario is petty much dead, at least for this year.

Marc Eckelberry : 10/5/2006 9:23:58 AM

Oct. 5 (Bloomberg) -- Federal Reserve Vice Chairman Donald Kohn warned investors not to underestimate the central bank's inflation concerns and challenged the wagers of some traders that interest rates may be cut.

Jane Fox : 10/5/2006 9:12:56 AM

Both Oil and Natural Gas's overnight sessions have the same patterns and they both hit ON lows at 5:40EDT so it looks like these two are back in sync. I see Nat Gas testing its PDH and a level from where it could springboard to new ON highs. Therefore, we can expect a bounce in Oil as well.

Gold is already making new ON highs and has a similar ON pattern adding to the theory both Gas and Oil will make new ON highs. Although Gold has not broken its PDH like Oil and Gas have.

Tbonds stayed within their PDR overnight because we didn't have any major reports out this morning. Link

Jane Fox : 10/5/2006 9:02:18 AM

Dateline WSJ - Target reported September same-store sales rose 6.7%, "well above" its expectations, and said quarterly profit would beat Wall Street's estimate. Nordstrom, Saks and American Eagle also posted strong results as retailers were helped by cool fall weather and lower gasoline prices. Wal-Mart posted a weak gain of 1.3%, as expected.

Jane Fox : 10/5/2006 9:01:10 AM

Good morning everyone. Hanging around highs usually means higher highs so I suspect we will have a bullish open and the markets will push higher first thing this morning but what they do from there is anyone's guess. I don't see a lot more upside without a correction to revisit the 200EMA unfortunately, although I see this correction in my Taro cards, I don't see when it will happen. Link

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