Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Jeff Bailey : 10/24/2006 2:59:53 AM

Daily/Weekly/Monthly Index Pivot Matrix found at this Link

Equations for Pivot Levels

To derive the various pivot levels, the first step is to establish the Pivot, which is thought by many to be just that. A center point, or a point of equilibrium. Once the pivot level is tabulated, then the S1 and R1 is calculated. Once S1 and R1 are calculated, then S2 and R2 are calculated.

In the above pivot spreadsheet, I'm showing columns C thru K and multiple rows.

Let's calculate the DAILY levels for the Dow Industrials begining with Monday's High/Low/Close (columns C thru E and row 6) for the Pivot. The Excel spreadsheet formulas are as follows

Pivot... =SUM(C6, D6, E6)/3

S1... =(I6*2)-C6

R1... =(I6*2)-D6

S2... =((J6-H6)-I6)*-1

R2... =(J6-H6)+I6

Jeff Bailey : 10/24/2006 1:10:43 AM

Norman! you should receive a response and a pivot level calculator per your email question earlier today.

Tab Gilles : 10/24/2006 12:27:01 AM

This market keeps on climbing...however I'm getting very cautious here..it is very overbought. Yet no sell signals.

Open Positions Portfolio & Stock Watch List Link

$NAHGH/$NALOW/ $NDX Link

$NDXA50 & $NDXA200 Link Link

Bullish Percentage $BPNDX Link

Nasdaq Summation $NASI Link

Nasdaq High/Low $NAHL daily 10-ema Link

Profunds UltraOTC (UOPIX) & Ultra SmallCap (UAPIX) Link Link

Keene Little : 10/23/2006 10:22:04 PM

Tuesday's pivot tables: Link and Link

OI Technical Staff : 10/23/2006 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The Market Monitor has been archived.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 : 10/23/2006 9:43:25 PM

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

Today's Activity

Swing trade closed out the Altria MO Jan $80 Calls (MO-AP) at the bid of $3.80 ($+1.85, or +94.87%)

Trade Blotter of CLOSED Trades month-to-date as well as stops/targets for OPEN positions at this Link

Jeff Bailey : 10/23/2006 9:17:24 PM

StockCharts.com's Major Market Bullish %

NYSE Bullish % ($BPNYA) Link (very broad, roughly 3,000 stocks)

NASDAQ Comp Bullish % ($BPCOMPQ) Link (very broad, roughly 3,000 stocks)

S&P 500 Bullish % ($BPSPX) Link (see tonight's Market Wrap)

S&P 100 Bullish % ($BPOEX) Link (narrower, just 100 stocks)

NASDAQ 100 Bullish % ($BPNDX) Link (narrower, just 100 stocks)

Jeff Bailey : 10/23/2006 5:34:57 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/23/2006 5:24:56 PM

Closing Internals found at this Link

Keene Little : 10/23/2006 4:46:42 PM

There's another Fib level that was achieved today that could be important, but only if today's high is the high. In addition to SPX reaching its 1377.79 (missed by 0.39) target where it has two equal legs up from October 2005, an internal Fib projection for the move up in the DOW shows it too has reached a potentially important level by reaching 12114. Link

While its target for two equal legs up from October 2005 is up at 12212, this lower number could be a warning for bulls to be cautious here. Looking at the move up from July, the 2nd leg up has achieved the level where it is 162% of the 1st leg up. This is a very common Fib relationship between legs within a move so this deserves a careful watch here.

If we've got a more bullish impulsive pattern playing out to the upside then we should see a corrective sideways/down pullback (assuming we'll start a pullback from here) in which case I'll be looking at as an opportunity to get long again. But if we start seeing some important support levels get taken out, and get some impulsive declines going, that would then indicate that we may have topped out. It's clearly too early to tell here but keep pulling those stops up.

Keene Little : 10/23/2006 4:23:41 PM

It looks like the bulls were the ones afraid as we headed into the close. I don't think anyone is going to trust overnight action. As one reader wrote in--trade very light and don't use a stop if you want to hold overnight. Jamil waited until after the spike up, put in an order to close his short just below Friday's close, got it and stayed flat for the open. It was a great example of risk management as long as you understand the risks of trading futures without stops (the reason for trading very small position size).

Jim Brown : 10/23/2006 4:20:18 PM

With the Fed meeting tomorrow I would think there would be some profit taking ahead of Wednesday's announcement. However, nothing seems to bother the bulls this month. Should be interesting.

Jeff Bailey : 10/23/2006 4:18:35 PM

If bears haven't been so far, they might tonight Keene.

Keene Little : 10/23/2006 4:15:41 PM

A little profit taking as we head into the 16:15 close. Maybe everyone will be afraid of the dark after last night's manipulation of ES.

Keene Little : 10/23/2006 4:13:10 PM

Cash stopped in a position where it looks like they're going to push it up higher again tomorrow. At this point it's looking like they're going to want this as high as possible as we head into Wednesday's FOMC announcement. More cushion that way?

Jeff Bailey : 10/23/2006 4:01:33 PM

Juuuuuust above WEEKLY R1.

Jeff Bailey : 10/23/2006 4:01:15 PM

Sell Program Premium ... SPY $137.60 +0.55% ...

Jeff Bailey : 10/23/2006 3:53:43 PM

Boy ... Jim's 02:50:23 post was really depressing.

Not even a 94.87% gain is enough to cheer me.

Keene Little : 10/23/2006 3:46:05 PM

I had mentioned earlier that SPX has achieved the level where it has two equal legs up from its October 2005 low (1377.79). Interestingly, considering the relative strength of the DOW lately, the DOW may have only been in catch-up mode. It would achieve two equal legs up at 12212 (cash).

Jeff Bailey : 10/23/2006 3:43:19 PM

Altria (earnings preview) ... AP Story Link

Jane Fox : 10/23/2006 3:41:24 PM

Tomorrow's Economic Report docket has only one entry - 10:00a.m Oct Richmond Fed Mfg Business Index. Previous: 9.

Jane Fox : 10/23/2006 3:36:27 PM

* NYSE VOLUME 1.31B
* NYSE HAS 1,849 ADVANCERS
* NYSE HAS 1,349 DECLINERS
* NYSE HAS 169 ISSUES UNCHANGED
* NYSE HAS 228 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 4 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 1.59B
* NASDAQ HAS 1,494 ADVANCERS
* NASDAQ HAS 1,552 DECLINERS
* NASDAQ HAS 141 ISSUES UNCHANGED
* NASDAQ HAS 128 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 31 ISSUES SETTING 52-WEEK LOWS

Jane Fox : 10/23/2006 3:32:31 PM

NEW YORK (MarketWatch) -- EXL Service Holdings Inc. gave back some gains in its second day of trading Monday after rising 39% in its debut. EXL Services, a former unit of insurance firm Conseco, fell 53 cents to $18.31.

The IPO came ahead of a healthy calendar for new issues this week including a $1 billion IPO from real estate investment trust Douglas Emmett, a $250 million debut from energy firm Eagle Rock, a China IPO from Home Inns, and a tech debut from Optium.

On Friday, EXL Service (EXLS) opened at $15.95, ahead of its price of $13.50 a share. It ended the session at $18.84.

Keene Little : 10/23/2006 3:31:50 PM

Volume has tailed off into the last hour. Bears are staring at this market in disbelief that it won't sell off so that they can short it. Bulls are staring at this market in disbelief that it won't sell off so they can get a better entry. So both sides sit on the sidelines wondering what exactly is going on here.

But each time it's pushed higher both sides scramble to buy it for fear of greater losses, either real (for bears) or missed opportunity (for bulls). I think most recognize that we've moved up into rarified air and at least a pullback would be healthy. If we don't get a pullback before FOMC I can pretty well guess what's going to happen after it.

Jeff Bailey : 10/23/2006 3:31:08 PM

Swing trade bullish call exit alert ... let's blow out of the Altria MO Jan $80 Calls (MO-AP) at the bid of $3.80 ($3.80 x $4.00)

MO $80.11 +0.55%

Jeff Bailey : 10/23/2006 3:27:20 PM

Exxon/Mobil (XOM) $69.85 +0.43% Link ... no at all phased.

Jeff Bailey : 10/23/2006 3:25:50 PM

December Crude Oil (cl06z) settled down $0.52, or -0.88% at $58.81.

Jeff Bailey : 10/23/2006 3:17:53 PM

03:00 Internals found at this Link

Jeff Bailey : 10/23/2006 3:11:58 PM

I've yet to come up with, or reason, any trade (bullish/bears) where we can benefit from global nuclear war. Think about that.

I don't think I'd want to survive such an event, and all the money in the world would do me no good.

Keene Little : 10/23/2006 3:09:34 PM

After that pullback Big Money said that's enough of that nonsense and stepped back in to lift the market back up.

Jeff Bailey : 10/23/2006 3:04:47 PM

03:00 Market Watch found at this Link

Jim Brown : 10/23/2006 2:50:23 PM

Everyone should also realize that Iran is already making plans for the bomb it does not yet have. They have tested delivery systems for launching a nuclear tipped missile high over the US to produce an EMP blast that would cripple all electronic devices for thousands of miles. If the bomb was big enough it could reach from both coasts, into Canada and Mexico, knocks back into the late 1800's as far as technology goes and do it without killing one single person. The US estimates there is better than an 80% chance of an EMP blast over the US within the next ten years. No computers, no cell phones, no cars, no TVs, no airplanes, nothing. Think about it. Link Link

Jeff Bailey : 10/23/2006 2:48:37 PM

Northrop Grumman: Homeland Security to Evaluate Skyguard

NOC $69.07 +0.39% Link ...

Jeff Bailey : 10/23/2006 2:38:19 PM

Iran Sets Up 2nd Pilot Enrichment Facility - Diplomats

DJ- Diplomats said Monday that Iran has started a second pilot uranium enrichment facility, in a sign of Tehran's defiance of the U.N. Security Council.

The diplomats, who spoke on condition of anonymity because they weren't authorized to divulge the information to the media, told The Associated Press that Iranian nuclear experts had started up a second facility within the past few weeks.

They said Iran is expanding its enrichment program even as the Security Council focuses on possible sanctions for Tehran's defiance of its demand that it give up the activity and ease fears it seeks nuclear weapons.

The council had set an Aug. 31 deadline for Tehran to cease all experiments linked to enrichment, which can produce the fissile material for nuclear warheads. It may start full deliberations on sanctions as early as later this week.

Iran produced a small batch of low-enriched uranium - suitable as nuclear fuel but not weapons grade - in February, using its initial cascade of 164 centrifuges at its pilot plant at Natanz. The process of uranium enrichment can be used to generate electricity or to create an atomic weapon, depending on the level of enrichment.

Iran said it plans to install 3,000 centrifuges at its enrichment plant in Natanz, central Iran, by the last quarter of 2006. Industrial production of enriched uranium in Natanz would require 54,000 centrifuges.

Although it is nowhere near that goal, successful testing of other "cascades" would indicate that Tehran is slowly mastering the complexities of producing enriched uranium.

A U.N. official said that even a "dry-run" allows Tehran "to develop the technology, to make sure that things work."

There was no official confirmation from the International Atomic Energy Agency, which has taken the lead in probing Tehran's nuclear program since the existence of a clandestine enrichment program was revealed more than three years ago, with after hours calls unanswered.

Ali Ashgar Soltanieh, the chief Iranian envoy to the IAEA, said he had no knowledge of "new developments" at Natanz. But he told the AP that all nuclear activities "are going on as planned."

In Tehran, President Mahmoud Ahmadinejad suggested his country remained firmly committed to enrichment, boasting that his country's nuclear capability had increased "10-fold" despite international pressure to roll back its efforts.

"The enemies, resorting to propaganda, want to block us from achieving (nuclear technology)," Ahmadinejad told a crowd on the southern outskirts of Tehran. "But they should know that today, the capability of our nation has multiplied 10-fold over the same period last year."

Ahmadinejad boasted that "the power of our enemies is less than one-tenth of their power in last year."

The president didn't elaborate, and the remarks appeared aimed primarily at rallying public support amid the Security Council preparations.

Iran insists its nuclear program is for peaceful purposes. The U.S. and dozens of other countries fear, however, that it is secretly trying to make nuclear arms.

In the speech, Ahmadinejad repeated that Iran was ready to negotiate about its nuclear ambitions. But the six nations that have spearheaded the most recent attempts to bring Iran to the negotiating table continue to call on Iran to first suspend enrichment.

Beyond disregarding the Aug. 31 deadline imposed by the Security Council to stop enrichment, the Islamic republic also has turned down a package of incentives offered by those six world powers - the U.S., Russia, China, U.K., France and Germany - on condition that all enrichment activities cease.

Marc Eckelberry : 10/23/2006 2:34:39 PM

SPX 1376.39 is also Feb 2001 high, Keene.

Keene Little : 10/23/2006 2:28:31 PM

Not only is SPX up against the top of its parallel up-channel for price action since the August 2004 low, it also achieved a "measured move" today. SPX 1377.79 is the level where the leg up from June is equal to the leg up from October 2005 to the May high. Today's high was 1377.40 and I'd call that close enough. It's amazing how often these measured moves mark reversal points. It's a good time to consider legging into a couple of longer term put options. Just use today's high as your stop level. Link

Marc Eckelberry : 10/23/2006 2:26:32 PM

There could be an "abandon ship" syndrome if the rally has no affect on election polls. No one wants to go down with the rest, so we could even see a beginning sell-off before November. It's always hard to decipher, but today was a good day to see the lack of enthusiasm building, especially in NQ relative to ES. The Saudis are going to get sick of pumping to max capacity even when demand slows. They are staunch friends of this administration and they definitely helped the past few months, but other opec nations are just not into it and once everyone sees the writing on the wall, it could be a "forget those guys" event.

Jeff Bailey : 10/23/2006 2:22:08 PM

Note: On November 9, 2005, the December Crude Oil (cl06z) settled at $60.66.

Jeff Bailey : 10/23/2006 2:19:50 PM

Russell 2000 Index (RUT.X) 760.56 -0.20% ... slips red. Just below its 80.9% retracement (05/05/06 Close to recent 06/13/06 low close)

Keene Little : 10/23/2006 2:19:00 PM

If ES breaks down below 1380 there's lots of air (called fluff) below it.

Jeff Bailey : 10/23/2006 2:18:16 PM

Ex-Oil Executive Lee Raymond's (Exxon/Mobil) Statement 11/09/05 (Joint Hearing of the Senate Committees on Energy and Natural Resources and Commerce, Science and Transportation) Link

Jane Fox : 10/23/2006 2:13:13 PM

TBonds are making a pretty ugly H&S here suggesting bonds will go lower and yields higher. Link

Keene Little : 10/23/2006 2:10:09 PM

With SPX up against the top of its parallel up-channel for price action since Sept 11th, and at the trend line along the highs from August 4th, one could say the market is ready for a pullback. With SPX 6% above its 200-dma, screaming for a pullback, I'd say the stock market is vulnerable at this point. Link

Marc Eckelberry : 10/23/2006 2:10:48 PM

NQ was a warning flag today and still is (lower highs while ES and YM made higher highs, even higher yearly highs: does not work that way especially when financials lag).

Marc Eckelberry : 10/23/2006 2:06:45 PM

I guess no one is mentioning that these are heavily reduced earnings expectactions after the May/June sell-off. Take all the earnings estimates in January 2006 and compare them to July and see if this market should really be up where it is. Anyway, that's the game, just try and find the next turning point and you will be fine. My guess is still a big oil rally in November and a drop in equities. If you want to chase this rally, I would do so only on daytrades.

Jeff Bailey : 10/23/2006 2:03:07 PM

AMERICAN EXPRESS 3Q NET DOWN 6%

DJ- Firm's net income falls to $967 million, or 79c a share, as income from continuing operations increases 11% to 78c a share, beating expectations by 2c. Revenue climbs 12% to $6.8 billion.

AXP $57.08 -1.65% Link ...

Jeff Bailey : 10/23/2006 2:01:46 PM

US STOCKS RISE ON EARNINGS; DJIA AT RECORD

DJ- Enthusiasm about earnings, which have so far exceeded analysts' expectations by a fairly wide margin, as well as another sharp drop in oil prices help spark another stock-market rally. Dow Jones Industrial Average hits new intraday high and gains 1%, helped by 4% gain in Wal-Mart. Nasdaq adds 18 points.

Marc Eckelberry : 10/23/2006 1:59:08 PM

And as long as ex-oil exces are running the other branches, you can be sure this QM decline is only temporary. Politics and the markets do mix, unfortunately. I gotta go, but look for buying opportunities in oil and gold (QM 57.70 to 58.15) and try to get a good short entry on equities at some point.

Marc Eckelberry : 10/23/2006 1:56:06 PM

Maybe one day the SEC will spend more time and money investigating these shenanigans instead of trying to nail the token insider. But since Paulson, our newly appointed treasury sec, used to be chairman of Goldman Sachs, I will let you draw your own conclusion. This is for those who remain somewhat naive as to what is going on.

Keene Little : 10/23/2006 1:53:08 PM

I think you've got it right Marc. And if the market is magically held aloft until the elections (we could however see a decline and then a bounce into elections), Democratic control of either or both houses could spark a sell off. That's not a political statement but instead just an observation. The market could have its excuse for taking profits out of "concern about the change in the House".

Marc Eckelberry : 10/23/2006 1:50:31 PM

SPX 1376.38 is R, above that it;s 1383. But BIX failed at 10 dma and that is not a good sign. ES nevertheless still has blow-off potential to 1389. WIth the VIX starting to rise off 2006 lows support, the upside bets are limited in potential. Q's have supportive puts, but that means nothing ahead of the Feds. As for Gold, it closed the gap at 583 and has 50% support at 582.20. There is risk to 577, but since gold bears are at historical highs, the potential for a monster short squeeze to 640 is getting very real every day. It's the only hedge going forward against inflation.
Note the bearish divergence between NQ and ES: techs should not be making lower highs when ES makes higher highs. Nevertheless, the election manipulators are driving this rally higher everyday, usually in the low volume lunch hour to create a short squeeze and they use ES and YM, never NQ, so there is your clue. It's the only card the party in control has to play at this point and they are getting desperate as even the senate could be in jeopardy. The house is pretty much lost, the question is by how much. There will be investigations and the markets will not like it.

Jeff Bailey : 10/23/2006 1:50:56 PM

S&P Depository Receipts (SPY) ... Daily Interval bar chart with updated WEEKLY Pivot Retracement at this Link ... SPY does get a trade at my bullish resistance trend, but observation of put #1 doesn't want me living/swiming in "the river named denial" on a near-term pullback to MONTHLY R1 for the November $136 puts. (see 12:27:24 PM EDT post)

Jane Fox : 10/23/2006 1:35:31 PM

* NYSE VOLUME 900M
* NYSE HAS 1,833 ADVANCERS
* NYSE HAS 1,356 DECLINERS
* NYSE HAS 173 ISSUES UNCHANGED
* NYSE HAS 211 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 6 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 1.11B
* NASDAQ HAS 1,531 GAINERS
* NASDAQ HAS 1,421 LOSERS
* NASDAQ HAS 160 ISSUES UNCHANGED
* NASDAQ HAS 104 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 23 ISSUES SETTING 52-WEEK LOWS

Keene Little : 10/23/2006 1:34:51 PM

Thanks to Al for forwarding this information that appeared in Bloomberg, written by Craig Torres and Carlos Torres this morning:

The Fed's number-crunchers, rushing an analysis based on data that arrived about a week before, threw out previous conclusions about how fast the economy can grow without fueling inflation. They concluded that the speed limit is lower than previously thought -- and they lowered it still further in the "Greenbook" for the September policy meeting.

The staff's revisions, reflected in minutes of the last two meetings, shake the foundations of the fast-growth, low-inflation economy Americans enjoyed from 1995 to 2005. The implication: Unless the economy slows more than the Fed now expects, the central bank may have to resume raising interest rates sooner rather than later to control inflation.

"The tide is shifting," says David Greenlaw, chief U.S. fixed-income economist at Morgan Stanley in New York. "I do not think the Fed is out of the game just yet."

This supports the idea that yields are headed higher as in the chart I showed earlier (10:50). And it supports the idea that the stock market is in for a rude awakening.

Jeff Bailey : 10/23/2006 1:29:11 PM

Yum Brands (YUM) $59.73 +2.89% ... ticks a new all-time high.

Jane Fox : 10/23/2006 1:30:39 PM

Piece of Trivia I heard on NPR the other day. Steve Winn of the Winn Resort and Hotels in Las Vegas (the most expensive hotel in Las Vegas) was offered $139 million for one of his Picassos, the highest price anyone has paid for a painting anywhere in the world. He had a party to celebrate the sale and apparently was waving his arms around and put his elbow through the painting. Opps.

Jane Fox : 10/23/2006 1:23:07 PM

Although I am bullish on Gold in the short term (at least to 615-616 resistance) I am bearish on Gold for the longer term based on these 3 weekly charts. Link

Jeff Bailey : 10/23/2006 1:20:15 PM

01:05 Internals found at this Link

Jeff Bailey : 10/23/2006 1:08:21 PM

01:05 Market Watch found at this Link

Jeff Bailey : 10/23/2006 1:01:57 PM

Japan's Watanabe: (comments)

Japan's Growth "In Line" With Potential

Japan's Growth "Sustainable For Coming Years"

Financial Sector Has Made "Remarkable Progress"

Consumer Price Inflation Remains "Very Weak"

Japan In "Final Stage" Of Deflation

Japan Econ Shown Resilience To High Oil Price

Oil Prices Still "Very High"

Global Rate Tightening "Slowing"

Japan, US Central Bank Rate Hike Pace Slowing

China Must "Adjust" Forex System

Japan Committed To Better Relations With Neighbors

Can't Postpone Fiscal Consolidationn Reforms

Jane Fox : 10/23/2006 12:55:29 PM

This consolidating at daily highs usually means higher highs later in the day. Are we setting up for another late day rally? Internals are on board.

Jeff Bailey : 10/23/2006 12:41:19 PM

LAZEAR SAYS HOUSING HURT 3Q GDP

DJ- The cooling of the once-hot housing market will "take off a very significant chunk" from the economy's growth in the July-to-September quarter, says Edward Lazear, chairman of the White House's Council of Economic Advisers.

Jane Fox : 10/23/2006 12:37:34 PM

Thank you for your ongoing assistance.

I use MetaStock for charts. I have managed to get charts up for the number of advancing issues minus the number of declining issues; however, I dont yet have a chart for advancing volume minus declining volume. MetaStock support said that there is no code available and that I would have to create a formula for it.

Are you able to advise on getting up the AD Volume chart?

Norman
I had to build my own indicator in Tradestation as well using the advancing volume minus the declining volume. You may have to call MetaStock support to see if they can help you out there.

Keene Little : 10/23/2006 12:37:10 PM

From Denise, re: the ES spike to 1398 last night. Thanks Denise.

just was on phone with a chicago broker--he said rumor there is it was a fat finger trade..more plausible--and they won't bust it--they entered too many digits..he says.

Jeff Bailey : 10/23/2006 12:35:09 PM

NYSE, EURONEXT NEAR AGREEMENT

DJ- NYSE and their European counterparts are close to a memo of understanding on how the combined NYSE Euronext would be regulated after their merger. Decision on the agreement is up to regulators, including SEC and European agencies.

NYX $74.75 +2.04% Link

Keene Little : 10/23/2006 12:31:48 PM

If Mark were still writing for us he would note the bearish divergence on the SPX 60-min chart I just posted, followed by a blah blah blah. Those divergences haven't meant diddly to this market.

Keene Little : 10/23/2006 12:28:30 PM

If this can rally a little further I like just under SPX 1382 for an upside target. That would be another 6 points higher and that could be a stretch for today but anything's possible in this bullish market. The remaining shorts are clearly running for cover and they should all be pretty much run out of Dodge after this. Link

Jeff Bailey : 10/23/2006 12:25:26 PM

WAL-MART FOOTPRINT GROWTH TO SLOW

DJ- Shares climb 3.5% as retailer says new-store growth will slow slightly in fiscal 2008, with capital-spending growth to be sharply reduced. In the year starting in February, Wal-Mart plans to open 305-330 U.S. stores and 320-330 abroad.

WMT $51.11 +3.52% Link ...

Jane Fox : 10/23/2006 12:25:25 PM

TICKS +1000

Jeff Bailey : 10/23/2006 12:17:24 PM

Bearish swing trade put raise target alert ... on both (2) of the S&P Depository Receipt SPY Nov. $136 Puts (SFB-WF) from $132.50 to $135.30 in the underlying.

SPY $137.73 +0.65% ...

Keene Little : 10/23/2006 12:15:18 PM

NYSE is now starting to poke its head above the top of its wedge at 8730, the trend line along the highs since August 4th. Any failure from this latest push higher and it could give us a sell signal.

Jane Fox : 10/23/2006 12:28:01 PM

It does not matter that the VIX may be suggesting a top is in as long as the AD volume is making new daily highs I never go short.

Jane Fox : 10/23/2006 12:13:41 PM

HMM Vix did not make a new daily low confirming ES's new daily high. Is the cheese getting stinky?

Jeff Bailey : 10/23/2006 12:09:02 PM

FORD LOSES $5.8B IN 3Q; TO RESTATE RESULTS

DJ- Preliminary net loss balloons to $5.8 billion, or $3.08 a share, compared to year-earlier net loss of $284 million, or 15c a share, as the No. 2 U.S. auto maker continues to battle high costs and sluggish sales. Excluding charges for restructuring and other items, loss from continuing operations is $1.2 billion, or 62c a share. Ford says it will restate financial results from 2001 through 2Q of this year. CEO Alan Mulally says he sees opportunities for improvement.

F $7.90 -1.37% Link

Jane Fox : 10/23/2006 12:08:16 PM

Shorts beware AD volume to new daily highs.

Jane Fox : 10/23/2006 12:04:41 PM

AD volume almost to new daily highs and I see the VIX falling albeit not to new daily lows. I don't like how this feels and will bail on my short.

Jeff Bailey : 10/23/2006 12:00:11 PM

That move on such light volume ... no guarantee a stop loss would have gotten filled at a specified level.

Jim Brown : 10/23/2006 11:59:42 AM

Jane I don't know if shorting this morning spike is brave or stupid but I jumped on the ER with a short when it failed at 772 for the second time. The Russell is not nearly as bullish as the other indexes over the last week. I believe it is going to be the canary in the coal mine this week. If it dies the rest may not be far behind.

Jeff Bailey : 10/23/2006 11:58:29 AM

I begin to wonder how many bears will be wanting to hold some equity futures shorts overnight the next several sessions.

Jeff Bailey : 10/23/2006 11:55:51 AM

RISK for bears can be VERY HIGH when overhead supply is limited ... e-mini S&P (es06z) 15-minute interval chart (all sessions) at this Link

Jane Fox : 10/23/2006 11:55:43 AM

Being short here is a brave trade (or many may call it something else) so I am watching the internals very closely. If I see AD volume to new daily highs I will bail. If I see the VIX to new daily lows I will bail.

Keene Little : 10/23/2006 11:49:53 AM

Oops, I take it back on the ES high--that 1398 is now being reported as the "High".

Jane Fox : 10/23/2006 11:47:38 AM

I am going to try an ES short here with a stop 2 ticks above daily highs.

Keene Little : 10/23/2006 11:45:07 AM

My chart shows that spike to 1398 but it doesn't show in the "High" column in the list of symbols (US Market Watch).

Jeff Bailey : 10/23/2006 11:35:44 AM

My QCharts does show the overnight spike in ES to 1,398.00. ES spiked from 1,375.75 to 1,398.00 on 10,142 contracts to close at 1,386 from Sunday's 06:25-06:30 PM EDT time interval.

Keene Little : 10/23/2006 11:28:43 AM

While I'm jokingly (or am I?) referring to the number of points ES still needs to rally to hit the overnight spike to 1398 (still not registered on QCharts though) the real target I'll be watching is just under 1387. The way the pattern has progressed from the October 3rd low, the 5th wave up in the count will typically go to 62% of the 1st wave and that's what I show on this chart. It doesn't mean it'll get there, or that it'll stop there, but it bears watching if that level gets tagged. Link

Jane Fox : 10/23/2006 11:20:39 AM

BOSTON (MarketWatch) -- Shares of Forest Laboratories and partner Replidyne Inc. were hit hard Monday by news that the Food and Drug Administration has given the thumbs down for their antibiotic candidate faropenem medoxomil, recommending additional studies that could take up to two years to complete.

Shares of Replidyne (RDYN) plunged 50% to $5.16 in late morning trade, while Forest (FRX) shares skidded 6% to $48.49.

Early Monday, Forest and Replidyne announced that the FDA had issued a non-approvable letter for their marketing application for faropenem, stating it would not approve the antibiotic unless more clinical trials were conducted.

Jane Fox : 10/23/2006 11:17:40 AM

VIX hanging around daily lows usually means ES will make new daily highs, which I see it continues to do.

Jeff Bailey : 10/23/2006 11:17:39 AM

11:00 Internals found at this Link

Jane Fox : 10/23/2006 11:16:09 AM

NQ's overnight high was 1747.75 and ER's overnight high was 774.80, its previous overnight high.

Keene Little : 10/23/2006 11:12:13 AM

15 points to go on ES (to get to 1398).

Jane Fox : 10/23/2006 11:10:46 AM

TICKS hit +1200

Jane Fox : 10/23/2006 11:10:30 AM

Obviously the news out of Venezuela has not affected KO. Link

Jane Fox : 10/23/2006 11:08:07 AM

CARACAS (MarketWatch) -- A Venezuelan lawmaker said early Monday that workers have taken over several Coca-Cola Co. (KO) plants with support from pro-government politicians in protest over worker debts.

"We have seized Coca-Cola plants.... We will not allow a single truck from Coca-Cola to leave with soft drinks," Iris Varela, a National Assembly member, said during a televised interview.

Varela did not specify how long the seizure would last or what role the government is playing in this dispute between the company and its workers.

"Now we will see if they will pay workers what they owe them," she said. Coca Cola officials could not immediately be reached for comment.

Jane Fox : 10/23/2006 11:05:16 AM

TICKS +800.

Jeff Bailey : 10/23/2006 11:02:50 AM

11:00 Market Watch found at this Link

Jane Fox : 10/23/2006 11:00:34 AM

I see the buying slowing down now but there is nothing telling me we will get a trable retracement.

Keene Little : 10/23/2006 10:50:55 AM

Bonds are down today and yields are up. Is the bond market getting a whiff of something more hawkish coming from the Fed? Is the stock market setting itself up for the perfect storm? I've been watching the yields because of a potential inverse H&S pattern that I thought would be telling us the bond and stock markets had it wrong in late September.

Since then the bond market corrected the big rally but the stock market has kept rallying. It is truly in lala land and ignoring the signals that the bond market has picked up on from the Fed. Today's drop in bond prices has sent yield above its inverse H&S neckline as shown on the 30-year chart (the same one I've used the past couple of weeks in my Thursday Market Wraps). Link

If yields follow through to the upside from here then there's little question in my mind that the Fed is going to lay a stick bomb and the stock market will have a little hissy fit. The sell off could be dramatic. That's all speculation at this time but I think the stock market is setting itself up for failure and is going to get a reality check.

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

My 10:34 post reinforces the weekly charts I show of the US $, Crude OIl and then of course I add the Swiss Franc. These are all saying Gold is bearish longer term.

Jeff Bailey : 10/23/2006 10:34:33 AM

CISCO ENTERS VIDEO CONFERENCING

DJ- Cisco is entering the video-conferencing market with a high-end system that continues the company's push beyond networking equipment. The new offering includes three high-definition video screens and multiple cameras.

CSCO $24.41 -0.57% Link

Jane Fox : 10/23/2006 10:34:20 AM

SAN FRANCISCO (MarketWatch) -- Gold futures fell to their weakest level in more than a week Monday, pulling other metals with them as oil prices again retreated and the dollar strengthened ahead of a Federal Reserve decision on interest rates.

Gold for December delivery was last down $9.60 at $586.80 an ounce in early action on the New York Mercantile Exchange, a modest recovery from a low of $585.30 -- its weakest intraday level since Oct. 12. On Friday, the contract lost $6 of its value although it scored a modest gain for the week.

The metal was hurt by weak oil prices after the Organization of the Petroleum Exporting Countries' production cut announced last week failed to convince oil traders it would be enough to halt a slide in prices. Weaker oil prices tend to ease investors' concerns about inflation, decreasing demand for gold as an inflationary hedge.

"The rally of late last week appears to have been a one-day wonder, for the strength that developed Thursday vanished Friday and remains 'in-hiding,' " said Dennis Gartman, editor of The Gartman Letter.

Gartman expects gold to remain in a trading range until either the dollar breaks to the upside, pushing the euro through the $1.25 resistance level, or oil prices turn higher.

"Until one of the other of these outside markets moves materially, gold is trapped and our urge to hold anything other than our 'insurance' position is low ... and is falling," he said.

Jeff Bailey : 10/23/2006 10:32:27 AM

HASBRO 3Q NET RISES 8.2%

DJ- Toymaker reports net income of $99.6 million, or 58c a share, as revenue increases 5.2% to $1.04 billion. Analysts forecasted EPS of 50c on $963.4 million of revenue. Growth comes despite sharp decline in Star Wars sales.

HAS $24.09 +3.39% Link ...

Jane Fox : 10/23/2006 10:31:39 AM

Dateline WSJ - International Business Machines Inc. said it filed two patent infringement lawsuits against Amazon.com Inc., claiming key aspects of the Internet retailer's Web sites violate patents held by Big Blue.

IBM, based in Armonk, N.Y., said it is seeking unspecified damages from the Seattle online retailer for infringing on five patents, including technologies that govern how the site handles customer recommendations, advertising and data storage.

IBM said other companies have licensed the same patents, and that it tried to negotiate licensing fees with Amazon "over a dozen times since 2002" but "Amazon.com has refused every time."

IBM said its two lawsuits were filed in U.S. District Court in the Eastern District of Texas, one in the Tyler Division and the other in the Lufkin Division. Texas has emerged as a frequent site for patent cases in recent years because of a perception that certain districts there are more responsive to such claims

Jeff Bailey : 10/23/2006 10:30:58 AM

KIMBERLY-CLARK 3Q NET CLIMBS 12%

DJ- Consumer-products firm earns $364.2 million, or 79c a share, as sales climb 5.2% to $4.21 billion. Excluding restructuring charges, earnings rise to 99c a share, a penny better than Wall Street estimates. Full-year EPS view affirmed.

KBM $66.75 -0.99% Link ...

Keene Little : 10/23/2006 10:30:50 AM

NYSE has now completely recovered from that break down below its ascending wedge and now looks like it could head to the top of its longer term wedge near 8730. The very sharp v-bottom today is again not normal. Maybe at the bottom of a long decline but not near the top of a long run higher. Something very weird about this market today, which started in last night's futures.

Jane Fox : 10/23/2006 10:29:44 AM

ER and NQ on their way to overnight highs. Link

Jeff Bailey : 10/23/2006 10:29:38 AM

SAUDI CUTS CRUDE SUPPLY TO SOME ASIAN BUYERS

DJ- Saudi Arabia formally informs some of its Asian customers that it will cut term crude oil supplies for the first time in 19 months, trading sources say. Announcement comes after OPEC last week agreed to cut crude oil production.

Jeff Bailey : 10/23/2006 10:28:52 AM

XEROX 3Q NET SURGES ON TAX BENEFIT

DJ- Xerox net climbs to $536 million, or 54c a share, from $63 million, or 5c a share, a year ago, helped by a 45c-a-share tax benefit. Excluding items, Xerox earns 23c a share, a penny above analyst expectations.

XRX $16.33 +2.06% Link ...

Jeff Bailey : 10/23/2006 10:27:30 AM

AT&T 3Q NET SOARS 74% ON DEAL

DJ- Telecommunications giant reports net income of $2.17 billion, or 56c a share. Excluding merger-related costs, EPS of 63c is 5c above expectations. Revenue jumps 52% to $15.64 billion amid SBC's acquisition of AT&T.

T $34.28 -0.46% Link

Jane Fox : 10/23/2006 10:27:01 AM

Hard to argue with the tajectory of these two. Link

Keene Little : 10/23/2006 10:16:29 AM

Only 20 more ES points to reach its overnight spike up to 1398 (wink).

Jane Fox : 10/23/2006 10:13:36 AM

Keene me thinks you are right.

Keene Little : 10/23/2006 10:12:50 AM

Clearly this kind of buying is not normal. It's normally a flameout waiting to happen. Unfortunately we don't know if there's still a lot of Fed money coming into the system which will create only small pullbacks and further ramps. But this looks like a blow off move.

Jeff Bailey : 10/23/2006 10:14:28 AM

Wal-Mart (WMT) $51.34 +3.99% Link ... surging to a new 52-weeker.

Jane Fox : 10/23/2006 10:12:13 AM

AD line is +54 and AD volume barely above 0. Oh I would not be buying this.

Jane Fox : 10/23/2006 10:11:48 AM

VIX took a big spike downwards this morning but has since stabalized and is not making new daily lows as ES is making new daily highs. Oh I would not be buying this.

Jane Fox : 10/23/2006 10:09:52 AM

My goodness gracious what is going on??

Keene Little : 10/23/2006 10:07:25 AM

A little factoid that I read over the weekend referred to SPX and how overbought it is. Imagine that. Doesn't seem to stop the buying but there's no question the rubber band is stretching. SPX is now 6% above its 200-dma and there's only one other time in the past 2 years that that has happened--December 2004.

Previous times, including December 2004, have always marked at least a 2% price correction, often greater, which in this case would be a pullback to 1343 (from 1370). In the meantime, if we're in a blow-off top we could see a wicked spike to the upside so don't get in the way of this.

Jeff Bailey : 10/23/2006 10:03:08 AM

10:00 Market Watch found at this Link

Jane Fox : 10/23/2006 9:59:31 AM

Like I said "Don't be short here."

Jeff Bailey : 10/23/2006 9:59:04 AM

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

Keene Little : 10/23/2006 9:55:37 AM

Watch the test of the overnight high for YM at 12074.

Keene Little : 10/23/2006 9:53:35 AM

It looks like they sucked in some shorts on the early morning dip and now they're ramping it back up again. It's pretty much a DOW show still.

Keene Little : 10/23/2006 9:49:41 AM

A little closer view of the NYSE chart I showed below (10:40 PM) shows price has dropped down below the bearish ascending wedge. That doesn't bode well but the real test will be its May high near 8652 (low so far this morning is 8659) and then its uptrend line from Sept 25th at 8632. It could also rally back up near Friday's close in order to test the bottom of its broken wedge. Link

Jane Fox : 10/23/2006 9:45:58 AM

Only problem with the bearish picture is that the VIX is making new daily lows and the trin is 0.86. Don't try a short here.

Jane Fox : 10/23/2006 9:45:10 AM

AD line has hit a low of -1330 but is now -1080. Ad volume continues to make new daily lows.

Keene Little : 10/23/2006 9:42:16 AM

The RUT has already dropped below last Tuesday's low and therefore violates the bullish sideways triangle. But ES is currently testing the bottom of its triangle and its uptrend line from Sept 22nd is near 1368.25 so we have nothing more than a small pullback so far. If ES 1368 and YM 12K hold on any further pullback it might even be worth an attempt at a long play and see what kind of bounce develops. RUT is a heads up though that something might be changing.

Keene Little : 10/23/2006 9:37:21 AM

I could be mistaken but I think I just saw a selling spike on NQ. I have to go look that up in the dictionary since I forget what that means.

Jane Fox : 10/23/2006 9:32:45 AM

AD line is a bearish -740 and AD volume below 0 and falling. The bears have the ball this morning.

Jeff Bailey : 10/23/2006 9:32:08 AM

Bullish swing trade raise stop alert on the Altria MO Jan $80 Calls (MO-AP) to $79.70 in the underlying shares.

MO $80.15 +0.60% ...

Keene Little : 10/23/2006 9:30:45 AM

Jim had shown a chart of the RUT in his weekend Wrap that showed a sideways triangle that formed last week and looks like a bullish continuation pattern. It's also at the uptrend line from October 3rd as of Friday's close. If it breaks below Tuesday's 758 low then the pattern would be busted. Here's how I've got it on my chart and I show a bullish resolution out of it to test the May high: Link

A drop out of the pattern would be a pattern failure and pattern failures typically see price go the other way in a hurry so watch for that possibility. I showed a YM chart on Friday and said a test of 12K that holds could also see a bullish resolution. Link

Jane Fox : 10/23/2006 9:14:21 AM

All markets have now made new overnight lows except NQ.

Keene Little : 10/23/2006 9:07:38 AM

The cynic in me would say someone knew we'd have a down morning and wanted to run in down without having shorts "in the way" (having stopped them out last night so they can't prop it up now). It's certainly been a wild time in the futures in the overnight session. We'll have to see how that translates into the cash market.

Jane Fox : 10/23/2006 9:00:53 AM

And here is the daily chart of Gold showing a retest of the upper trendline of the bullish wedge Link

Jane Fox : 10/23/2006 8:58:53 AM

Here is the daily chart of Crude Oil showing the bearish triangle. Link

Jane Fox : 10/23/2006 8:57:31 AM

Overnight Oil broke out of it bearish daily triangle (I will show the daily chart later) and made a new yearly low overnight, 58.375. You probably have noticed the price of filling up your car with gas has gotten a lot cheaper lately. Yesterday on NPR I heard that the price of gasoline has dropped faster in the last few months than at any other time in history.

Gold made a low overnight of 586.10 and is on it way to retest the top of its daily bullish wedge (I will also show this chart later). I think it will hold and take another run at resistance 615-616.

TBonds broke their PDL overnight and are now testing the daily 200EMA.

The only bullish commodity was Natural Gas which broke its PDH overnight. Link

Jane Fox : 10/23/2006 8:41:28 AM

Certainly don't know what spiked the futures as soon as they opened yesterday but from what I can see Ym did not partcipate. Link

Market Monitor Archives