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Jeff Bailey : 11/2/2006 10:28:14 PM

10/26/06 to 11/02/06 Sector Bell Curve from Dorsey/Wright at this Link

Keene Little : 11/2/2006 10:03:45 PM

Friday's pivot tables: Link and Link

OI Technical Staff : 11/2/2006 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The Market Monitor has been archived.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 : 11/2/2006 5:51:58 PM

OATS $16.94 -4.18% ... lower at $16.50 extended on the heels of WFMI $60.12 -4.81% earnings, with WFMI $50.89 extended.

Jeff Bailey : 11/2/2006 5:46:00 PM

NASDAQ NH/NL Ratio Chart with "f"ive day and 10-day (X,O) at this Link (A point and figure chart each day's closing NH/NL measures).

I've still got Halloween on my mind, but check out the 10-day NH/NL ratio. The first charting point for the month of November is noted with a "B". (1-9 is Jan-Sep and A-C is Oct-Nov)

Jeff Bailey : 11/2/2006 5:27:52 PM

Closing Internals found at this Link

Jeff Bailey : 11/2/2006 4:46:28 PM

Closing U.S. Market Watch found at this Link

Keene Little : 11/2/2006 4:20:43 PM

It looks good for an early decline tomorrow to be followed by a rally. In order for that to happen though we'll need to see a decline out of the gates. Perhaps a negative reaction to tomorrow morning's reports. And then assuming we'll find support around DOW 11960/SPX 1359 I still like the setup for a long play there.

Jeff Bailey : 11/2/2006 4:18:33 PM

Whole Foods (WFMI) earnings press release Link

Jeff Bailey : 11/2/2006 4:08:16 PM

Trading Halts ... LF, CROX

Jane Fox : 11/2/2006 4:06:45 PM

Economic Reports for tomorrow.
8:30a.m. Oct Nonfarm Payrolls. Consensus: +125K. Previous: +51K.

8:30a.m. Oct Unemployment Rate. Consensus: 4.6%. Previous: 4.6%.

9:40a.m. Oct ECRI Inflation Gauge. Previous: 120.3.

10:00a.m. Oct ISM Non-Mfg Index. Consensus: 54.8. Previous: 52.9.

Jeff Bailey : 11/2/2006 4:04:12 PM

Whole Foods (WFMI) $60.12 -4.81% ... lower at $57 on headline numbers.

Jeff Bailey : 11/2/2006 3:54:12 PM

Wild Oats (OATS) $16.95 -4.12% Link ...

Jeff Bailey : 11/2/2006 3:53:28 PM

Whole Foods Market (WFMI) $60.32 -4.49% Link ... trades weak into tonight's earnings.

Keene Little : 11/2/2006 3:46:49 PM

ES has two equal legs up, from its last low, at 1372.75. This should be resistance if we've got another leg down coming.

Keene Little : 11/2/2006 3:44:56 PM

It looks like an effort to get the markets to close at least flat for the day, just to show that they ain't afraid of no ghosts.

Jeff Bailey : 11/2/2006 3:40:39 PM

MICROSOFT, NOVELL NEAR PARTNERSHIP

DJ- Novell shares jump 16% as the company is near a final deal to partner with Microsoft to boost Linux OS, Windows' rival. Software giant will offer sales support for Suse Linux, potentially pressuring Red Hat, whose shares drop 3%.

MSFT $28.75 -0.20% Link

NOVL $6.93 +18.05% Link

RHAT $16.09 -2.06% Link

Jim Brown : 11/2/2006 3:31:47 PM

IFF - On fire after earnings today on top of a monster move.

Jeff Bailey : 11/2/2006 3:22:57 PM

Oh yes ... it can go from $16 back to $150 too. $1,000 for that matter.

Jeff Bailey : 11/2/2006 3:19:40 PM

03:00 Internals found at this Link

Jeff Bailey : 11/2/2006 3:15:12 PM

The last time the NASDAQ nh/nl were inverted was 10/03/06 at 55:75. The following day was 102:81 and stayed positive until today. On 10/03/06 the NASDAQ's 5-day/10-day NH/NL ratios were 56.3%/53.1% and "mid-field"

Keene Little : 11/2/2006 3:11:21 PM

This is the setup I see right here. The current bounce should set up the short play and depending on where the bounce ends that will determine the Fib projection for the next leg down. As an example on this chart, if the bounce stops at 1371.50 and rolls back over from there, I get a downside target of 1364.50 as the place where I'll want to go long. This would also be very close to the DOW 11960/SPX 1359 uptrend lines. So get ready to go short and then reverse long perhaps early tomorrow. Link

Jeff Bailey : 11/2/2006 3:04:34 PM

03:00 Market Watch found at this Link

Jeff Bailey : 11/2/2006 3:01:41 PM

Red Hat (RHAT) ... MONTHLY Intervals and one more "entire life" retracement at this Link

If it can go from $151 to $2.40, it can go from $16 to $10, if not $1.

Jeff Bailey : 11/2/2006 2:52:19 PM

Red Hat (RHAT) ... with a retracement from the recent highs, to the PnF chart's bearish vertical count of $1.00 Link

Jim Brown : 11/2/2006 2:46:59 PM

Caution Political Joke:

I am sure everyone has heard about the John Kerry comment that got him in trouble with the armed forces this week. Basically, he said if you go to school and get a degree you can get a good job. If you don't finish school you will end up in Iraq. Apparently some soldiers in Iraq heard his comment are are asking for his help. Link

Keene Little : 11/2/2006 2:44:09 PM

Trying to trade a 5th wave is always a little tricky because they're very unreliable moves--it could extend, it could truncate or anything in between. But another bounce from this pullback would set up a good short play. Just be quick to take profits at a new low.

Keene Little : 11/2/2006 2:42:45 PM

Starting to get a little more of a pullback again. It looks like we're getting a sideways coil so one more bounce after this dip should then complete the sideways consolidation. From there we should get another leg down which should be the time we'll find DOW and SPX finding support at their uptrend lines near 11960 and 1359, resp. Very often a sideways coil tells you the last leg of the move (down in this case) is coming. That's because the sideways coil is a very common 4th wave correction.

Jeff Bailey : 11/2/2006 2:37:43 PM

RHAT $15.71 -4.44% ...

Jeff Bailey : 11/2/2006 2:35:49 PM

Swing trade put option alert for two (2) of the Red Hat RHAT Mar07 $12.50 Puts (RCV-OV) at the offer of $0.70. Target $10.00 on or before expiration.

Jeff Bailey : 11/2/2006 2:31:12 PM

RHAT $15.66 -4.56% Link ... gives up its WEEKLY Pivot ($16.29) .... if there's one tech stock I think has the potential to trade "$0.01", this is the one.

Jeff Bailey : 11/2/2006 2:27:14 PM

When I look at the SPY, I see this .... "Bear gulp" on 10/23/06 as SPY breaks to another new high and computers exhausted and run out of inventory from October's MONTHLY R2.

Now on first test of a BIG PICTURE MONTHLY Pivot, and add the WEEKLY S1, institutional computer "have" to be turned on to buy back some inventory that was shorted to the market (in order to provide liquidity to buyers) on the 10/23/06 and following move higher.

Jeff Bailey : 11/2/2006 2:21:39 PM

SPY ... here's the same 60-minute interval chart with my WEEKLY/MONTHLY Pivot retracement. Now adding the possible h/s top observation and its pattern objective. Elections are Tuesday! Link

Jane Fox : 11/2/2006 2:16:42 PM

Dateline WSJ - Microsoft Corp. is entering into an unusual partnership with Novell Inc. that gives a boost to the Linux operating system, a rival to the software giant's Windows software, according to people familiar with the companies.

Under the pact, which isn't final, Microsoft will offer sales support of Suse Linux, a version of the operating system sold by Novell. The two companies have also agreed to develop technologies to make it easier for users to run both Suse Linux and Microsoft's Windows on their computers. The two companies are expected to announce details of their plan today at a press conference in San Francisco.

In addition, Microsoft won't assert rights over patents over software technology that may be incorporated into Suse Linux, the people said. Businesses that use Linux have long worried that Microsoft would one day file patent infringement suits against sellers of the rival software.

The pact marks an unusual level of cooperation between two longtime rivals. Microsoft has been battling all versions of Linux, but has faced pressure to assure that customers can run both Windows and Linux without problems

Jeff Bailey : 11/2/2006 2:10:31 PM

SPY $136.76 -0.07% ... here's a 60-minute interval chart with what looks to be a little h/s top pattern. Slap a retracement (one tool in your tool box) to get an objective. Show with this WEEK's pivot levels Link

Jeff Bailey : 11/2/2006 1:55:08 PM

Its great to see some other trades in the MM and have them followed. Can really help other traders get a feel/observation of what is working and what's not. Any themes?

Jeff Bailey : 11/2/2006 1:53:25 PM

I wonder if trader "DB" is selling any premium and out the money November puts today?

See GR's trade, which was established all at once.

Jeff Bailey : 11/2/2006 1:49:28 PM

CDE $4.91 +1.86% ... my decision to go long today was based on yesterday's observation, and today's action in BGO.

Jeff Bailey : 11/2/2006 1:48:51 PM

BGO $4.60 +3.13% ... my decision to exit yesterday was based on action from the WEEKLY Pivots, and action in CDE.

Jeff Bailey : 11/2/2006 1:46:06 PM

The SWF-WF have traded low/high of $0.67/$0.95, but $0.90 has been the high at CBOE.

$136 - $0.90 = $135.10.

A NAKED SELLER of $136 is a bet that SPY won't see $135.10, or that's the defense level for the bull.

Jeff Bailey : 11/2/2006 1:43:38 PM

Ugh! I've never liked an option that trades $0.90. Just seems like they go "poof" at expiration.

Keene Little : 11/2/2006 1:42:34 PM

After only a 3-wave pullback from this morning's high it's pressing higher again. This could mean we're into a larger A-B-C bounce off this morning's low where the current leg up would be wave-C. Two equal legs up in that case gives us an upside target of ES 1375 and YM 12069. Whether that's happening or instead we get just a sideways consolidation from this morning's low is not clear yet. If we get those levels above I'll be watching to short it. If we get a sideways consolidation we'll have more sideways to go, probably into tomorrow, before heading lower again.

Marc Eckelberry : 11/2/2006 1:26:22 PM

They are holding that old bottom at 1713.25 for NQ. Traders are teeing off QM. YG has closed agap, should find a pause here. This is the kind of chop day that only gets resolved at the close. At some point, traders need to be mindful of all those QQQQ puts at 42.

Jeff Bailey : 11/2/2006 1:22:53 PM

Look how "firm" the NYSE NH/NL are compared to the NASDAQ's

Jeff Bailey : 11/2/2006 1:22:21 PM

01:00 Internals found at this Link

Jeff Bailey : 11/2/2006 1:08:01 PM

SPY slips back under its WEEKLY S1. If you pull up a 60-minute interval chart, SPY does show a h/s top patter. Head at $139.00, neckline $137.25, and that retracement does show some significance. Objective of pattern at $135.47.

Jane Fox : 11/2/2006 1:07:02 PM

I'm Gonna' try a short again.

Jeff Bailey : 11/2/2006 1:06:39 PM

01:00 Market Watch found at this Link

Keene Little : 11/2/2006 1:06:19 PM

If the move down from this morning's bounce is to be the last leg of the decline before setting up a bigger bounce then it looks like it might form a small descending wedge. If so then we should see a small bounce after this move down and then another low to finish it off. If that kind of move is accompanied by bullish divergences on the short term charts it will add to my confidence that buying it is the right play. Otherwise be careful about stepping in front of the southbound train.

Keene Little : 11/2/2006 12:55:43 PM

ES is banging around between two different downtrend lines now from yesterday--the 2nd one through this morning's bounce. If this continues to chop lower now and we get a new low with lots of bullish divergences that's when I'd be looking for an opportunity to test the long side. As Jeff just mentioned, starting further out and looking at the daily chart shows me uptrend support at DOW 11960 and SPX 1359.

Driving in closer and using ES as an example, its uptrend line is at about 1364 (I like cash indices better for the longer term view since time premium decay on futures can distort the picture). But as shown in this updated 5-min chart there's a Fib projection for the 5th wave down (as I've got it counted) at 1366.75 which would essentially be a retest of this morning's low. There's a lower Fib projection at 1362.50 that would take ES closer to its uptrend line. Link

Bottom line for me is I'll be watching for strong support at or just below this morning's low. If you're short I'd take some money off the table (and keep using the lower highs to chase this down). If you want to try the long side I like the setup there for it. It might be only a scalp or 1-2 day swing trade but it should work.

Jim Brown : 11/2/2006 12:54:38 PM

Reader Challenge Update - Correction, the "Short QQQQ Calls should have been positive not negative. It is also the position with the biggest percentage gain and the current leader.

Short QQQQ Calls from reader WL
NOV $43 Call QQQ-KQ @ $.85 Now $0.25, +$0.60, +70%

Jane Fox : 11/2/2006 12:48:26 PM

Gold is breaking out all over. 625.80

Jim Brown : 11/2/2006 12:46:11 PM

They are really trying to hold Dow 12000. It appears to be the line in the sand this afternoon.

Jeff Bailey : 11/2/2006 1:34:16 PM

Question: Regarding time intervals and why Jim, Keene, Linda and I use different intervals.

Jeff's Reply : I would love to show you 5 different time intervals of the any security's chart each day/wrap, but I usually don't have that kind of time.

Some traders will only view a certain time interval, say daily intervals. Some only look at 2-minute interval charts.

Here's what I do

I ALWAYS look at the PnF chart first. Get the BIG picture of supply and demand. Where has it been, where might it be going LONGER-TERM. Utilize that with the MARKET/SECTOR observations/analysis.

From there, I'll look at a DAILY Interval chart. Where are my 21-day, 50-day and 200-day SMAs?. If the PnF analysis is BULLISH/BEARISH, what observation comes from the DAILY Intervals? Slap on those MONTHLY Pivot retracement. How have computers been managing inventory?

From there, I'll move in closer to a 60-minute interval. This time interval gives me enough length of time that I can view several weeks of trade. Now slap on those WEEKLY Pivot Levels. Again asking myself, where has it been, how has it been managed, and where might it still go?

Then a 30-minute. Still "fine tuning" for a swing trader, maybe getting to a point where a day trader would have his/her "big picture" view. However, even a day trader should start with the BIG picture in my opinion, then work inward, brining down the time interval of observation. If all you do is look at 2, 3, 5-minute intervals, EVERY security will look "overbought" and "oversold."

From 30, comes 15, then 10 and even 5-minute intervals, but now you're getting into the day trader's area and you'll slap on the DAILY Pivot levels.

Jim Brown : 11/2/2006 12:54:58 PM

Reader Challenge Update -This is the current status of the reader suggested plays this week. The results are not good. Only a couple plays are profitable and those were the SPX puts. This underscores the problems of trying to anticipate stock direction over an earnings event. But, as they say it is not over until the fat lady sings and in this contest that will be Friday's close.

Long Google Puts from reader JK
NOV-$500 Put GOP-WO @ $29.10 Now $31.20, +$2.10, +.7%

Long SanDisk Calls from reader FP
JAN-$50 Call SWF-AJ @ $3.50 Now $2.65, -$0.85, -24%

Long Newmont Puts from reader GG
JAN-$45 Put NEM-MI @ $2.80 Now $1.80, -$1.00, -35%

Short SPX Call from reader DB
NOV-1350 Call SXY-KJ @ $33.80 Now $23.00, +10.80, +32%

SPX Put Spread from reader GR
Long SPX NOV 1390 Put SXY-WR @ $18.20 Now $25.30, +$7.10
Short SPX NOV 1350 Put SXY-WJ @ $3.50 Now $5.30, +$1.80
Net gain +$5.30, +36%

Long Ford calls from reader WR
NOV $9.00 Call F-KL 2 $.15 Now $0.00, -$0.15, -100%

Long OEX Calls from reader AW
NOV 660 Call OEY-KL @ $.50 Now $0.00, -$0.50, -100%

Long BOOM Call from reader WO
NOV $35 Call QCB-KG @ $.95 Now $0.10, -$0.85, -89%

Short QQQQ Calls from reader WL
NOV $43 Call QQQ-KQ @ $.85 Now $0.25, +$0.60, +70%

Long Sysco Calls from reader KK
NOV $35 Call SYY-KG @ $.55 Now $0.55, even

Long Amazon Puts from reader JS
NOV $40 Put ZQN-WH @ $2.25 Now $2.40, +$0.15, +0.6%

Long PCU Puts from reader SB
NOV $50 Put PCU-WJ @ $1.45 Now $1.15, -0.30, -20%

Long CME Puts from reader DW
NOV $480 Put CNM-WP @ $3.90 Now $3.50, -$0.40, -10%

Long TIE Calls from reader JB
NOV $30 Call TIE-KF @ $3.30 Now $0.95, -$2.35, -71%

Long US Steel Put from reader NM
DEC $55 Put X-XK @ $ $.60 Now $0.40, -$0.20, -33%

Keene Little : 11/2/2006 12:20:53 PM

Other than the DOW getting hurt by INTC and WMT today, the bulls don't have much to complain about yet since the other indices are holding up quite well, especially considering the bad news this morning. A slowing economy must be a good thing (wink). And it takes a break below DOW 11960 and SPX 1359 before one could say the bulls are in more serious trouble.

Jane Fox : 11/2/2006 11:59:53 AM

Well I certainly got played today. All my ducks were in a row and a buy program came along and they are all over the place now. Dang buy programs.

Keene Little : 11/2/2006 11:44:47 AM

ES has pulled back to its broken downtrend line so the bulls will want to see it hold above 1371 and then proceed higher. The overall look of this morning's bounce still looks corrective (like a bear flag) so I can't say I like the upside prospects. If short I'd lower my stop now to 2 ticks above the last high, so 1374.25. Keep a tight rein on trades in this market.

Jeff Bailey : 11/2/2006 11:43:18 AM

OK ... I'm more interested in the SPY $136 Puts (per MM Profiles), but not this morning's VIX spike up above WEEKLY R2, then quick decline. Where did the SPY trade within its Pivots? Yep, dip under correlative WEEKLY S1 and MONTHLY Pivot, computers turned on an bring.

The NEXT time (if there is a next time) we see that, then that's the close out on the SPY $136 Puts. Perhaps Tuesday of next week?

Jeff Bailey : 11/2/2006 11:36:47 AM

SPY Option Chain from yesterday's close Link

Option Chain today (Kept yesterday's sort order), with updated OI at this Link

Keene Little : 11/2/2006 11:25:30 AM

I've got some internal Fib projections for this move pointing at 1374.50 right where I said to place a stop for a short. I'd move the stop up to 1375 just in case.

Jeff Bailey : 11/2/2006 11:23:30 AM

11:00 Internals found at this Link ... NASDAQ volume looks incorrect. Current NASDAQ 10-day NH/NL ratio would reverse lower into column of O.

Keene Little : 11/2/2006 11:15:57 AM

For SPX its uptrend line from July through the Sept 11th low is near 1359 which would be 3 points lower than this morning's low. Again, if we get there I'd be a buyer to see what kind of bounce develops.

Keene Little : 11/2/2006 11:13:20 AM

If the DOW manages to drop lower today, its uptrend line from July through the Sept 22nd low is currently near 11960 which make for a good spot to try a long. That should be pretty solid support for at least a good sized bounce. Its 20-dma is at 11991 and that's certainly providing support as well.

Jeff Bailey : 11/2/2006 11:08:53 AM

Should be Bullish swing trade filled alert on CDE at $4.84.

Keene Little : 11/2/2006 11:07:26 AM

Brokers are back in the green. Jeff, did you do that?

Keene Little : 11/2/2006 11:06:51 AM

At about this point the bears are thinking "what am I missing?" It's the ol' bad news must be good news thing. Trading the news can be more than frustrating. But so far it still looks good for a roll over.

Jeff Bailey : 11/2/2006 11:05:55 AM

11:00 Market Watch found at this Link

Keene Little : 11/2/2006 11:03:51 AM

If I've got the wave count correct for the decline from yesterday's high we should get another low from here and then be set up for a stronger bounce. Shorting ES here, or possibly at gap closure at 1372.75 should work (famous last words). I'd have my stop at 1374.50, two ticks above yesterday's late afternoon high of 1374.

Jeff Bailey : 11/2/2006 11:02:59 AM

Couer d'Alene Mines (CDE) ... 60-minute interval chart at this Link

Keene Little : 11/2/2006 10:55:58 AM

This morning's bounce has a corrective look to it so I'm not sure it will amount to much. But we know what buy programs/short covering can do.

Keene Little : 11/2/2006 10:54:34 AM

The downtrend line for ES is at 1372.25 and gap closure is at 1372.75.

Keene Little : 11/2/2006 10:53:10 AM

NDX/NQ in the green for the day. This will frustrate the bears. Short covering could easily flare this up.

Jeff Bailey : 11/2/2006 10:48:34 AM

Bullish swing trade long 1/2 position for shares of Cour d'Alene Mines (CDE) on the bid of $4.84, stop $4.64, target $5.20.

Keene Little : 11/2/2006 10:39:42 AM

The tight steep down-channel for ES's decline from yesterday shows a potential move for today--the current bounce to be followed by another low before we see a larger bounce that breaks the down-channel. The top of the channel is currently near 1372.50. Link

Jeff Bailey : 11/2/2006 10:36:14 AM

Bullish swing trade cancel order alert to buy 1/2 position in Bema Gold (BGO) $4.55 +2.01% at $4.30.

Jeff Bailey : 11/2/2006 10:31:50 AM

Weekly Nat. Gas Storage Link ... draw of 9 bcf

Keene Little : 11/2/2006 10:30:04 AM

Two equal legs up in this little bounce (so far) will be at YM 12045 and ES 1371.75. If this is to be just a corrective bounce we should find resistance there.

Jeff Bailey : 11/2/2006 10:28:33 AM

December Copper (hg06z) $3.29 +1.54% ...

Jane Fox : 11/2/2006 10:25:57 AM

ES will just refuse to do anything unless the VIX is on board. I thought the TRIN and AD Volume would be enough but it looks like the VIX is the leader duck.

Jeff Bailey : 11/2/2006 10:25:35 AM

BGO $4.51 +1.12% ... spiked to $4.60, sitting on WEEKLY R2 here.

Jeff Bailey : 11/2/2006 10:24:23 AM

BARRICK 3Q NET MORE THAN TRIPLES

DJ- Gold miner reports net income of $405 million, or 46c a share, as revenue more than doubles to $1.63 billion. Growth due to in part to its acquisition of Placer Dome. Analysts on average expected EPS of 49c.

ABX $30.754 -0.80% Link ...

Keene Little : 11/2/2006 10:21:55 AM

Gold has broken its downtrend line from July and is now approaching its broken uptrend line from August 2005, currently just above 627. It looks overbought now so that could offer up stiff resistance. Link

It's beginning to look more and more like gold is going to mirror the US dollar's sideways consolidation into the new year. I'm expecting the dollar to rally back up to the top of its pattern and gold to drop back down to the bottom of its pattern (near $550). Then the dollar should break down early in the year (based on its pattern and the flood of money coming from the Fed) and a sideways consolidation for gold would suggest just the opposite--a rally to new highs next year.

Jane Fox : 11/2/2006 10:19:53 AM

TRIN to new daily highs and AD volume to new daily lows. I think this would be a very good spot to short ES with a stop just above PDL.

Tab Gilles : 11/2/2006 10:17:29 AM

Correction to 12:02 AM post....

I mistakingly posted the Profund Short Small-Cap (SHPIX)...should of been the leveraged Ultra Short Small-Cap (UCPIX). Link

Jane Fox : 11/2/2006 10:16:06 AM

TRIN is now making new daily highs and has climbed to 1.20. No longer a threat to the bears.

Jeff Bailey : 11/2/2006 10:15:13 AM

July, Aug, Sep Factory Orders/% Change found at this Link ... big jump in Trans. Equipment. Non-Durable Goods and Factory Shipments weak.

Jane Fox : 11/2/2006 10:15:14 AM

Taking into consideration the divergences Keene mentioned, the AD volume continues to make new daily lows so I think the best we will do here is move sideways.

Keene Little : 11/2/2006 10:09:23 AM

Some short term bullish divergences are starting to show up so we may be putting in at least a temporary bottom here.

Keene Little : 11/2/2006 10:05:22 AM

Brokers continue to get punished today following yesterday's wicked sell off. This shows what a "relatively fast" retracement of an ascending wedge looks like. Link

Jane Fox : 11/2/2006 10:04:05 AM

There they are TICKS +800.

Jeff Bailey : 11/2/2006 10:03:09 AM

10:00 Market Watch found at this Link

Jane Fox : 11/2/2006 10:00:08 AM

Right about now we should see the rescue team show itself but the TICKS have nicely stayed under +200 all day.

Keene Little : 11/2/2006 9:55:51 AM

The Trannies are getting clobbered this morning, down 102 points (-2.1%).

Jane Fox : 11/2/2006 9:52:57 AM

Keep your eye on the TRIN but this could very well turn out to be a get short and stay short kind of day.

Jane Fox : 11/2/2006 9:49:39 AM

Link

Keene Little : 11/2/2006 9:49:22 AM

There's one other Fib projection on the DOW chart that I didn't put on there (makes it too cluttered) which shows a potential downside traget for the current leg down at DOW 11976 so keep an eye on that level if it's reached.

Jane Fox : 11/2/2006 9:47:49 AM

OK my ducks are telling me the bears have now a firm grip of the reins.

Jane Fox : 11/2/2006 9:45:23 AM

Gold has spiked to 624.10. Inflation anyone?

Jane Fox : 11/2/2006 9:44:38 AM

Notice the roll the PDLs are playing today. Link

Keene Little : 11/2/2006 9:42:11 AM

This is the DOW 30-min chart I posted twice yesterday to watch the progress of a potential pullback to the bottom of a new down-channel and to a Fib projection at 12K. If this level holds I still see the possibility for a rally out of this. That of course doesn't make any sense considering the economic news this morning, to which I say "so what else is new". Link

Jane Fox : 11/2/2006 9:42:09 AM

Interestingly the TICKs have stayed below 0 so far today. I thought for sure we would have seen the rescue team by now.

Jane Fox : 11/2/2006 9:39:34 AM

... but the VIX and especially the TRIN will keep me out of short positions.

Jane Fox : 11/2/2006 9:38:29 AM

These would certainly keep me out of long positions. Link

Keene Little : 11/2/2006 9:37:26 AM

A trend line along the lows since Monday for YM is at 12020 which is where it found support this morning.

Jane Fox : 11/2/2006 9:36:46 AM

I wouldn't be rushing into any shorts this morning. AT least not yet.

Jane Fox : 11/2/2006 9:34:16 AM

Bears be careful the TRIN is below its PDL and this is bullish.

Keene Little : 11/2/2006 9:34:11 AM

DOW 12K is going to be defended so we'll get to see how successful they are at doing that this morning. Holding so far.

Jane Fox : 11/2/2006 9:33:20 AM

AD line is -674 and AD volume is below 0 and falling. The bears have the ball this morning.

Keene Little : 11/2/2006 9:17:48 AM

This morning's data shows that the expected soft landing may be firming up a bit. The pillows are being removed. Higher labor costs and flat productivity is the kind of news that will put the Fed back in a hawkish mood. And then they'll be stuck between a rock and a hard place trying to decide whether or not to raise rates to fight inflation or keep them steady to help the economy. The amount of money they've been pumping into the economy in hopes of keeping the pump from sucking air will also add to inflationary concerns. Stagflation will be the result.

Today is critical. A new closing low today would be a break of support across the board, whether it's uptrend lines or 20-dma's. Of course a 1-day break can always be reversed and make another run higher but the risk is the psychological damage to bulls who themselves know this market has been stretched to the upside. Profit protection will become more important than hanging on for another run back up.

Jane Fox : 11/2/2006 9:01:42 AM

The commodities I watch and Tbonds had a very neutral overnight session. Link

Jane Fox : 11/2/2006 8:59:16 AM

Markets did not like the economic reports out at 8:30. Both ES and ER broke their respective PDLs and YM and NQ have tagged their PDLs. Link

Jane Fox : 11/2/2006 8:56:22 AM

WASHINGTON (MarketWatch) - The number of workers filing for state unemployment benefits rose by 18,000 to a 16-week high of 327,000 last week, the Labor Department reported Thursday.

The four-week average of new claims, which smoothes out one-time events such as holidays, weather or strikes, rose to 311,250, the highest in three weeks.

There were no special identified factors boosting last week's filings, a Labor Department spokesman said.

The report reflected a relatively healthy job market, with the number of former workers collecting unemployment benefits dropping by 27,000 in the week ending Oct. 21 to 2.42 million, the lowest in four months. The four-week average of continuing claims dropped by about 6,000 to 2.43 million, the lowest since early July.

The insured unemployment rate - the percentage of those covered by unemployment insurance who are collecting benefits -- fell to 1.8% from 1.9%. It's the lowest since May.

In the past year, initial claims are essentially unchanged while continuing claims are down about 2%.

The report reflected a relatively healthy job market.

Jane Fox : 11/2/2006 8:55:28 AM

WASHINGTON (MarketWatch) - With output slowing, the productivity growth of U.S. nonfarm businesses fell to 0% in the third quarter, the Labor Department estimated Thursday.

Unit labor costs - a key gauge of inflationary pressures stemming from a tight labor market - increased at an annualized rate of 3.8%.

Over the past year, productivity increased 1.3%, the slowest growth since 1997. Unit labor costs are up 5.3% in the past year, the fastest increase in 16 years. The last time unit labor costs increased faster was in 1982.

Real hourly compensation rose 0.7% in the third quarter, and is up 3.2% in the past year.

Higher unit labor costs could fuel inflationary pressures as firms struggle to recover their labor costs. Unit labor costs had been subdued in the past few years, rising 2% in 2005 and 0.7% in 2004.

Productivity, a concept that's simple in theory but elusive in practice, is output divided by hours worked. Productivity gains are the key to higher living standards, higher wages, increased profits and low inflation.

The economy had undergone a productivity boom in the past five years. After averaging about 2% in the post-war years, productivity gains have averaged 3.1% since 2000. Unit labor costs had increased an average of 0.8% since 2000.

Jane Fox : 11/2/2006 8:53:49 AM

Dateline WSJ - NEW YORK - Consumers appeared to take a break in October, holding back a bit after September's shopping spree and giving retailers a mixed sales performance. In a worrisome note for the holiday season, Wal-Mart warned it expects flat November sales.

Department stores and specialty chains posted some strong gains, helped by demand for coats, sweaters and other cold-weather gear amid one of the chillier October periods on record. Discount retailers, however, struggled, as lower-income shoppers have been slow to ramp up spending following an August drop in gasoline prices.

According to Thomson Financial, based on 50 merchants that have reported so far, 28 retailers had results that missed expectation; 22 beat estimates.

"There are some signs of strength in these reports, but clearly there were more companies missing expectations," said Ken Perkins, president of RetailMetrics LLC, a research firm in Swampscott, Mass, who said he was surprised by the results.

But Mr. Perkins added, "I am not sure if this says a lot about the consumer." He said he believes strong sales in September stole away some business from October and believes shoppers consumers should regain their stride for the holiday season. Retailers agreed, claiming that they faced a weak start to the month and saw positive improvement towards the end of the month, positioning them for a good holiday sales season.

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