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Jeff Bailey : 12/5/2006 2:00:49 AM

Dow Diamonds (DIA) now the same chart as 01:53:00, but 30-minute intervals with QCharts' WEEKLY Pivot Levels turned on at this Link

Jeff Bailey : 12/5/2006 1:53:00 AM

Dow Diamonds (DIA) 60-minute interval chart with Sep, Oct, Nov and Dec MONTHLY Pivot retracement at this Link ...

December "Max Pain" currently tabulated at $120 ($1 increments)

January @ $119

February @ $122.

Jeff Bailey : 12/5/2006 1:09:05 AM

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

Keene Little : 12/5/2006 12:04:35 AM

If the VIX were a stock I'd be buying it. Link

After breaking out of its descending wedge, with the bullish divergences (shown on the MACD) suggesting for a couple of months that we'd get the upside breakout, it came back down for a retest of the broken trend line and bounced. RSI broke the trend of lower highs and has come back down for a retest of that trend line. The 20 and 50-dma's appear to be supporting the pullback in the VIX.

And of course if I want to buy the VIX then I want to sell stocks. It doesn't mean we can't see stocks chop a little higher, and in fact the short term pattern suggests that's a distinct possibility (should get a pullback on Tuesday though), but again, chasing stocks higher at this point seems too risky to me. I'll continue to look for shorting opportunities.

Keene Little : 12/4/2006 11:48:42 PM

A good market to keep an eye on is the NYSE. As it chugs to new highs we'd like to see if it has any resistance levels to be aware of. As this daily chart shows, price is now pressing towards the top of its long term parallel up-channel from 2004 and the top of an ascending wedge for price action since July. Link

Price can obviously spike above the upper lines, even as it did in May, but it's a warning that a top may not be far off. The bearish divergences over the past 6 weeks also tell us that the new price highs are not being supported with the same internal market breadth. This looks like classic topping action here. The only question in my mind is where and when but it sure looks close.

The trend is still up though and we really don't have a trend change until it breaks back below 8800. We'll have a heads up before that level is reached that tells us something bearish is happening but that's the confirmation level for a trend change to the down side. This chart tells me I really don't want to take the risk of chasing this higher. It may be early to short but I don't believe the risk for new longs is warranted.

Jeff Bailey : 12/4/2006 11:22:18 PM

Sirius Satellite Radio (SIRI) alert $4.17 -1.88% ... stock lower at $3.99 in extended.

Cuts Subscriber Guidance to 5.9-6.1 million from 6.3 million for 2006 ... AP Story Link

Keene Little : 12/4/2006 11:14:37 PM

Tuesday's pivot tables: Link and Link

OI Technical Staff : 12/4/2006 9:59:59 PM

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

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Jeff Bailey : 12/4/2006 6:13:54 PM

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

Note: Stopped in the StreetTracks Gold (GLD) when it traded my profiled stop of $63.85.

Jeff Bailey : 12/4/2006 5:32:02 PM

Closing U.S. Market Watch found at this Link

QCharts symbol changes ...

CEC:DXY = US Dollar Index

CEC:CRY = Reuters/Jefferies CRB Index

Jeff Bailey : 12/4/2006 5:24:53 PM

Closing Internals found at this Link

Note: 460 new highs at the NYSE easily surpasses the 390 found on 10/26/06 (390:8)

Keene Little : 12/4/2006 4:18:35 PM

An alternative to the immediate-down scenario on the YM chart I just showed is that we'll first see a rally back up for another test of the bottom of the channel, perhaps for a retest of today's high. If that were to happen I suspect we'd see some negative divergences associated with it and it would make for a good short play there.

I could be mistaken but today's rally just didn't have the strength associated with it to make me want to buy into it, or even buy the next dip. It'll have to be read and react on the next dip (assuming we get one in this highly manipulated market) but I just don't like the lack of volume as NYSE makes a new high. Something smells fishy.

Keene Little : 12/4/2006 4:11:40 PM

Taking another look at the YM 5-min chart and today's up-channel, price broke down from it this afternoon, popped up for a quick retest and then dropped away. Best guess here is that we'll see at least a deeper pullback tomorrow. The measured move to 12330 was missed by only 2 points. Link

Jane Fox : 12/4/2006 4:00:36 PM

Economic Reports for tomorrow include.

8:30a.m. 3Q Revised Productivity. Previous: Unch.

8:30a.m. 3Q Revised Costs. Previous: +3.8.

10:00a.m. Oct Factory Orders. Previous: +2.1%. Previous: +2.1%.

10:00a.m. Nov ISM Non-Manufacturing Business Index. Previous: 57.1.

Keene Little : 12/4/2006 3:41:55 PM

ES and YM are spiking back up and may get sold into. Be careful. Resistance is at YM 12310.

Keene Little : 12/4/2006 3:21:10 PM

Time for the fund managers to move into profit protection mode. You have to figure the majority of them are holding the exit door open in order for them to protect their profits, and bonuses (boni?).

Keene Little : 12/4/2006 3:06:47 PM

I said daily R1 for ES and YM but those values are weekly R1, the same as for NQ. Looks like computers were set to sell ES at its 1413.50 level.

Keene Little : 12/4/2006 3:00:14 PM

Daily R1 is just ahead--YM 12333 and ES 1413.50. Weekly R1 for NQ is also just above at 1815.50.

Keene Little : 12/4/2006 2:48:00 PM

The DOW is up over 100 points but on lower volume. This is not the stuff of bull rallies that you want to buy into. Obviously shorts aren't working but I sure don't like the long side either. The next surprise could be a sell program.

Keene Little : 12/4/2006 2:17:13 PM

I'm able to get onto the optioninvestor.com site.

Keene Little : 12/4/2006 2:15:06 PM

As for ES's upside potential, two equal legs up off its November 28t low would be at 1416.25.

Keene Little : 12/4/2006 2:13:13 PM

I see the possibility for YM 12330 to cap this rally but if it can press higher than that then next target should be 12354, gap fill from November 24th.

Keene Little : 12/4/2006 1:58:01 PM

It's kind of weird pattern that's playing out today and I'm not sure what to make of it. After the spike up Friday afternoon the rally has continued in a shallower up-channel as shown here for YM. Link

A measured move off Friday's low would be at 12330 and that would be at the top of the channel if it heads for there right now. It takes a break below 12280 to suggest we might have seen the high for the day.

Jane Fox : 12/4/2006 1:45:07 PM

I have a funny feeling that the sellers will not arrive today.

Jane Fox : 12/4/2006 1:41:29 PM

When the internals looks like this you do not want to be short. Last week the internals were this bullish and we had some big sellers come in but the highest probablity trade is not short. Link

Keene Little : 12/4/2006 1:39:29 PM

DOW just rang the bell at 12292 and now we'll see if it just keeps chugging higher. If it does then this will have turned into another one of those stealth rally days--new money, from who knows where, just keeps pushing the indices higher but without the participation of the majority of players. I'd try a short here based on resistance--YM 12310, small position, slightly wider stop.

Keene Little : 12/4/2006 1:35:06 PM

DOW just closed that silly little gap at 12283 and next up is its broken July uptrend line and measured move at 12292.

Keene Little : 12/4/2006 1:09:53 PM

Also for the DOW I just noticed that two equal legs up from the low on November 28th is at 12292. I'm not sure what's playing out here but if we're in just a larger sideways consolidation, that kind of measured move could see a reversal.

Keene Little : 12/4/2006 1:07:19 PM

Keep an eye on those DOW levels I gave earlier--12283 gap close and 12294 broken uptrend line from July.

Keene Little : 12/4/2006 1:05:53 PM

Here comes the push higher. This is the one that could be the last minor new high before dropping back.

Jane Fox : 12/4/2006 1:04:50 PM

Here comes the rescue team TICK +1000

Keene Little : 12/4/2006 1:01:28 PM

This consolidation near the highs should be making bears nervous. The flip side to this consolidation is that if it breaks down it will likely catch a lot of traders leaning the wrong way and watch for a fast break to the downside. The short game continues to be risky.

Jane Fox : 12/4/2006 12:30:28 PM

It takes a lot of volume in a NAZ stock to knock those 5 off the top.

Jane Fox : 12/4/2006 12:29:37 PM

* NYSE most active stocks: PFE LSI BK F BAC
* Nasdaq most active stocks: QQQQ INTC SUNW CSCO MSFT

Keene Little : 12/4/2006 12:24:07 PM

For those who like to play the bonds, or perhaps even looking to refinance or lock in a mortgage rate, I see a possibility for rates to drop slightly lower before getting a bigger upward correction. As shown in this 30-year daily chart, the yield is dropping towards the bottom of a parallel down-channel for price action since this year's highs. Link

The previous lows at the beginning of the year, around 4.476%, match with a Fib projection for the current leg down and it hits the bottom of the channel at the end of this week. I don't know if the bullish divergences will continue but based on the bullish divergence, these channels, price support and Fib projection I'd watch for the likely possibility that that's where rates will bottom out for at least a while. That could make for an opportunity to short the bonds at that point.

Keene Little : 12/4/2006 12:04:41 PM

The other line of resistance for the DOW is its broken uptrend line from July, currently near 12292. This line has been tested repeatedly and has repeatedly beat price back. This is of course bearish but we don't know when the last test will be (or if it will continue as resistance of course).

Keene Little : 12/4/2006 11:58:46 AM

I keep testing the OIN web site to let you know when it's back online. The problem has been fixed but it could take up to 24 hours to get it back on line. Sorry for the inconvenience that it's causing.

Keene Little : 12/4/2006 11:56:43 AM

If this does push higher again watch DOW 12283. There's a tiny little gap down on November 27th that has not been filled (due to the DOW being relatively weaker than the other markets). The gap is only 4 points so I have no idea whether or not it's significant but it'll be interesting to see if it gets closed. It would also be near the top of a potential small ascending wedge for today's price action.

Jane Fox : 12/4/2006 11:52:35 AM

* NYSE volume 545M
* NYSE has 2,334 advancers
* NYSE has 783 decliners
* NYSE has 118 issues unchanged
* NYSE has 244 issues setting 52-week highs
* NYSE has 3 issues setting 52-week lows
* Nasdaq volume 807.1M
* Nasdaq has 2,037 gainers
* Nasdaq has 879 losers
* Nasdaq has 112 issues unchanged
* Nasdaq has 113 issues setting 52-week highs
* Nasdaq has 20 issues setting 52-week lows

Keene Little : 12/4/2006 11:45:30 AM

If you're trying a short here I do see the possibility for another push higher in a small ascending wedge but only if ES finds support above 1406. Another push higher could take it to about 1411. A drop below 1406 would say we might have seen the high.

Keene Little : 12/4/2006 11:40:17 AM

From Dave: "I agree with your concern. The volume is very low. Looks to me like an early OPEX run. Heck they all want to be squared up before the holiday parties. Seems to me we could be seeing the buying with first of the month inflows. They will do all the buying in the morning and do all the selling this afternoon, if this is the pattern we have seen the last several months. I have not looked closely at the options data yet but this would sure fit."

Thanks Dave. The lack of volume that you pointed out and the lack of internal breadth that I'm observing tell me to be careful with this morning's rally. We've seen these kinds of stealth rallies continue all day (from lack of selling) and that's a distinct possibility here. But it's not a trade I could recommend based on what I'm seeing. I'm testing weakness one more time at ES 1408 to see if the buying disappears.

Jane Fox : 12/4/2006 11:27:02 AM

We continue to have a little issue with OI today.

Jane Fox : 12/4/2006 11:24:34 AM

I really thought the TRIN was telling us that the bulls would not be in drivers seat today but nope that was not the case. The VIX and AD volume are certainly on the side of the bulls. Link

Keene Little : 12/4/2006 11:20:20 AM

It's a hard rally to trust. Bearish divergences are saying there's a lack of participation in it and the TRIN remains high. I get the feeling it's being manipulated higher again but we know that can go on for some time.

Keene Little : 12/4/2006 11:18:08 AM

ES and YM are pushing up through their downtrend lines and now ES is challenging last Thursday's high of 1408.75. YM's high then was 12298.

Jeff Bailey : 12/4/2006 11:14:22 AM

ImClone Systems Scientific Chief Resigns ... IMCL $30.15 -0.23% ... did see a quick dip to $29.92.

Jane Fox : 12/4/2006 11:13:55 AM

TICKS daily high +1152.

Jane Fox : 12/4/2006 11:13:34 AM

Heck, who cares that the TRIN is +1.50 up up and away.

Keene Little : 12/4/2006 11:12:07 AM

The downtrend lines from November 22nd are at ES 1408 and YM 12273 so watch those levels for resistance to try a short play.

Jeff Bailey : 12/4/2006 11:10:40 AM

11:00 Internals found at this Link

Jane Fox : 12/4/2006 11:07:08 AM

There go the TICK again +1000

Jeff Bailey : 12/4/2006 11:02:44 AM

11:00 Market Watch found at this Link

Jane Fox : 12/4/2006 10:55:45 AM

TICKS +800 and AD volume to new daily highs but so is the TRIN to new daily highs. Opps TICKS +1000

Keene Little : 12/4/2006 10:52:55 AM

Last night I posted a couple of charts of CME and GOOG (10:52 PM below). I showed the potential for CME to get another push higher after it completes its current small pullback. In line with that I see the possibility for ES to press higher once it consolidates a little more near its highs. If we get a sideways triangle as shown on this 120-min chart then I could see an upside resolution out of this. It's still early on this but watch for the possibility that we'll chop around for another few days. Link

Jane Fox : 12/4/2006 10:46:21 AM

These are strong and remain quite bullish. Link

Keene Little : 12/4/2006 10:29:45 AM

TRIN remains stubbornly high for the bulls' liking. ES and YM are still pressed up near resistance and appear to be struggling. There's not the threat of a rollover yet but that's the way I'm still leaning.

Jane Fox : 12/4/2006 10:24:41 AM

WASHINGTON (MarketWatch) - A gauge of future home buying declined slightly in October, a sign that the housing market could be stabilizing, the National Association of Realtors said Monday. The pending home sales index fell 1.7% in October after a 1.1% drop in September. The index is down 13.2% in the past year, but the decline from year-ago levels has narrowed since August. David Lereah, chief economist for the realtors' group, said a fairly steady pace of home sales can be expected for the next two months. "It's important to focus on where the housing market is now -- it appears to be stabilizing and comparisons with an unsustainable boom mask the fact that home sales remain historically high," Lereah said.

Jeff Bailey : 12/4/2006 10:16:32 AM

Bullish swing trade stop alert ... for the StreetTracks Gold (GLD) $63.85 -0.42% ...

Jeff Bailey : 12/4/2006 10:06:47 AM

Pfizer (PFE) $24.50 -12.06% Link ... Stock weak after company said it has halted the development of a key new cholesterol drug torcetrapib.

AP Story Link

Keene Little : 12/4/2006 10:04:21 AM

YM's downtrend line is at 12275.

Jeff Bailey : 12/4/2006 10:03:04 AM

10:00 Market Watch found at this Link

Keene Little : 12/4/2006 10:02:21 AM

So much for a rollover. ES 1408 is next resistance by a downtrend line from November 22nd.

Jane Fox : 12/4/2006 10:01:13 AM

There it goes. ES to new daily highs and breaks its PDH.

Jane Fox : 12/4/2006 10:00:09 AM

Although the TRIN is bearish I see ES testing its PDH again and the VIX is telling me it will break upwards real soon.

Jane Fox : 12/4/2006 9:57:37 AM

TRIN continues to hang out at at 1.46 which is quite bearish and could be your canary in the mine today.

Jane Fox : 12/4/2006 9:55:47 AM

ES is not able to penetrate its PDH.

Keene Little : 12/4/2006 9:55:25 AM

A slight push higher by ES and YM look like they'll leave negative divegences on their 1-min charts and I've got 5 and 15-min charts overbought. I'd consider a short play here.

Jane Fox : 12/4/2006 9:47:52 AM

WASHINGTON (MarketWatch) -- Michael Moskow, the president of the Federal Reserve Bank of Chicago, said weaker-than-expected economic data released last week has not caused him to second-guess his outlook of moderate growth in 2007. "Overall, I think the economy is solid," Moskow said in an interview on CNBC.com. Moskow said he still expects growth somewhat below 3.0% trend rate in the beginning of next year, with steady improvement as the year progresses. Moskow has been one of the more-hawkish members of the FOMC in recent months, warning that interest rates may have to move higher if there is no improvement in the core inflation rate. Financial markets increased their expectation of a rate cut in the first quarter after the Institute for Supply Management reported that is manufacturing index fell to 49.5% in November, the first sign of contraction in the sector in almost three-and-a half years.

Jane Fox : 12/4/2006 9:47:02 AM

NO market has broken its PDH as yet although ES has tested its PDH.

Jane Fox : 12/4/2006 9:43:24 AM

I agree Keene. The TRIN is not an internal that you can use minute to minute like the VIX and AD volume but it helps to give you a "bias." So a TRIN at 1.40 is telling me to be very cautious if long.

Keene Little : 12/4/2006 9:43:19 AM

I'm always a little leery of a quick spike out of the gate. It's often a head fake move. I see resistance right here where the quick spike up has taken the market and therefore I think it's risky for the bulls to chase it here.

Jane Fox : 12/4/2006 9:37:25 AM

VIX making new daily lows confirming ES's new daily highs.

Jane Fox : 12/4/2006 9:36:55 AM

TICKS +800 ignoring the bearish TRIN.

Jane Fox : 12/4/2006 9:35:20 AM

AD line continues to climb but AD volume is heading in the opposite direction. Confusing internals so far.

Jane Fox : 12/4/2006 9:34:14 AM

Bulls beware TRIN is 1.44 and climbing.

Jane Fox : 12/4/2006 9:33:28 AM

AD line is +458 and AD volume above 0 and climbing.

Jane Fox : 12/4/2006 9:32:06 AM

Dateline WSJ - President Bush has accepted the resignation of U.N. Ambassador John Bolton when his recess appointment expires. Full article coming soon.

Jane Fox : 12/4/2006 9:21:37 AM

NEW YORK (MarketWatch) -- The dollar rose against major currencies early Monday, consolidating after steep losses last week.

The U.S. currency has come under heavy pressure in recent sessions, hitting a 20-month low versus the euro and 14-year nadir versus the British pound Friday on growing expectations the U.S. economy is slowing enough for the Federal Reserve to lower interest rates soon.

The dollar's modest gains "appear to be largely a function of a bout of profit-taking and not an underlying change in sentiment," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

"Some short-term players appear to have turned a little cautious," ahead of Thursday's European Central bank meeting and Friday's U.S. employment figures, he said. "Nevertheless, other participants are likely to see the firmer dollar as a new opportunity to sell it."

Keene Little : 12/4/2006 9:20:33 AM

For those who like to log into optioninvestor.com there's a problem with the site this morning. Hopefully it will get resolved quickly.

Jane Fox : 12/4/2006 9:20:13 AM

YM seems to be forming a new trading channel that is not quite as steep as the one it has traded within since July.

The MACD and RSI divergences I have shown on the chart may have already played out and it will be interesting to see what these two will do when/if YM tests its yearly highs again. Will the MACD/RSI confirm those highs or will they diverge again. Link

Keene Little : 12/4/2006 9:19:25 AM

After Friday's strong afternoon bounce (nice job by the rescue team) we're left with a confusing price pattern--it could literally go either way. I see potential for ES to bounce up to about 1405 or it could roll over immediately. The overnight range doesn't give us many clues either so I'll be watching early price action for a better idea what's next.

Jane Fox : 12/4/2006 9:12:37 AM

ES's daily chart remains quite bullish but bulls should take note that it is building a bear wedge and with a MACD and RSI negative divergence. I will not become the least bit bearish until I see ES CLOSE below its 50EMA, which is at 1377 and a long ways from where ES is now trading at 1399. Link

Jane Fox : 12/4/2006 9:06:04 AM

All equity markets traded mostly in a straight line sideways overnight and within their PDRs. If the bulls can get all the markets above their respective PDHs and stay above them then I think we have a good chance at least testing yearly highs this week. Link

Jane Fox : 12/4/2006 9:02:23 AM

NEW YORK (MarketWatch) -- Crude oil futures fell Monday after the President of the Organization of Petroleum Exporting Countries said that supplies continue to outpace demand, despite recent efforts by the oil cartel to cut production.

Crude for January delivery fell 69 cents to $62.74 a barrel in electronic trading.

On Friday, the contract rode a five-session winning streak to close on the New York Mercantile Exchange at its highest level since Sept. 29, as traders pushed up prices on concerns over potential supply shortages for the winter.

The OPEC president's comments helped soothe trader worries.

"I think there is a lot of excess volume out there," Edmund Daukoru said at a Middle East gas conference. "The cushion for OPEC countries is somewhere around 2 million barrels a day in terms of excess capacity because of the reduced call on OPEC."

Jane Fox : 12/4/2006 8:57:46 AM

LONDON (MarketWatch) - Shares of Pfizer Inc. dropped early Monday after the Dow component halted clinical trials and development of its important new cholesterol drug torcetrapib, citing deaths and cardiovascular problems in patients who used it.

The news was a serious blow to Pfizer (PFE), which has been developing the combination drug as a possible successor to it primary revenue driver Lipitor, which loses patent protection around 2010. Lipitor is also the world's best-selling branded prescription drug, with 2005 sales of $12.9 billion, according to IMS Health.

Shares lost were off almost 14% to $24 in recent pre-market action.

The company announced the plans to end the trial on Saturday, saying the independent Data-Safety Monitoring Board urged the company to end the clinical trial "because of an imbalance of mortality and cardiovascular events." Pfizer was developing torcetrapib as a drug to help boost good cholesterol, setting it up as the potential follow-up to Lipitor.

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