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Jeff Bailey : 12/21/2006 11:00:46 PM

When the TRIN "jumps" as it did this morning, and stays there, even as the a/d measures were positive, that's usually an intraday sign that something's "up."

Jeff Bailey : 12/21/2006 10:58:32 PM

YM Pivot Matrix for tomorrow at this Link ... Had a decent day trade short setup today and I simply messed it up. I'm still rather tentative with shorts as overhead supply is void at this point. Longs getting a little tougher with the signs of weakness for the NASDAQ.

I don't think institutions that started gobbling up stock in August/September are going to just let things "fall apart."

You can see the weakness in NDX/SMH and RUT relative to SPX/OEX/INDU.

The pivots usually reveal the eventual distribution lower when the currently WEAK looks "strong" for about a week, and the currently strong (SPX/OEX/INDU) then looks WEAK.

IF a broader market decline is coming (as hinted by some of the NASDAQ measures), it will be when EVERYTHING gets in unison.

Keene Little : 12/21/2006 10:46:59 PM

Friday's pivot tables: Link and Link

Jeff Bailey : 12/21/2006 10:34:19 PM

This storm Link that hit Denver was a dinger and close to the storm of 83 Christmas. It's at Chicago, but not as much snow.

Jeff Bailey : 12/21/2006 10:27:16 PM

Labranche (LAB) went out at $9.72 -1.91% ... and here too, last tick well away at $9.99.

Jeff Bailey : 12/21/2006 10:26:23 PM

Well... tomorrow's MM Profiles Net and Net% are going to be messed up is my guess.

Jeff Bailey : 12/21/2006 10:24:40 PM

Hmm... Schlumberger (SLB) went out at $63.87 -1.51% and I'm showing last tick in extended at $64.91.

Jeff Bailey : 12/21/2006 10:20:39 PM

Could be the same type of prints for KGC. Today's trade had a wierd look/feel to it. Almost like an option expiration. Especially for the gold stocks.

Jeff Bailey : 12/21/2006 10:19:34 PM

Red Hat (RHT) $17.96 -4.16% ... Not sure if these late trades at $18.37 are accurate or not. I'm thinking not and might be late prints of regular session trade. $18.36 was mid-point of regular session.

Jeff Bailey : 12/21/2006 10:13:49 PM

Kinross Gold (KGC) $11.50 -2.04% ... did get some upside action at $11.72 in tonight's extended. No news that I can find.

Jeff Bailey : 12/21/2006 10:09:38 PM

Index Pivot Matrix for tomorrow at this Link ... S&P Banks (BIX.X) see trade at WEEKLY R2. The 10-year YIELD ($TNX.X) slips back under its WEEKLY Pivot to close 4.549%. BIX.X might be vulnerable to some profit taking should 10-year YIELD continue to pull back (narrowing lending spread). While Wednesday's Mortgage Bankers data (for week ended 12/15/06) did pull back from the 12/13/06 report data (for week ended 12/08/06) most of the data matched prior week's (for week ended 12/01/06).

OI Technical Staff : 12/21/2006 9:59:59 PM

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Jeff Bailey : 12/21/2006 5:45:05 PM

Red Hat (RHT) $17.96 -4.16% ... $20.68 extended.

Jeff Bailey : 12/21/2006 5:44:16 PM

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

Jeff Bailey : 12/21/2006 5:31:42 PM

Bearish swing trade put place order to close alert ... Place an order to close out the two (2) Red Hat RHT Mar $12.50 Puts (RHT-OV) at a limit price of $0.25.

Jeff Bailey : 12/21/2006 5:21:53 PM

Closing Internals found at this Link

Jeff Bailey : 12/21/2006 4:38:52 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/21/2006 4:28:03 PM

RHT $19.89 extended. Low/high has been $17.95/$20.50

Jeff Bailey : 12/21/2006 4:27:41 PM

Unless a shoe falls in RHT's Link conference call, it looks like the MARKET got it right on 10/26/06 when the company warned about future prospects/trends.

Jane Fox : 12/21/2006 4:15:39 PM

Economic Reports for tomorrow:

8:30a.m. Nov Durable Goods Orders. Expected: +1.2%. Previous: -8.2%.

8:30a.m. Nov Personal Income. Expected: +0.4%. Previous: +0.4%.

8:30a.m. Nov Personal Spending. Expected: +0.5%. Previous: +0.2%.

10:00a.m. End-Dec U Of Mich Consumer Sentiment Index. Expected: 90.2. Previous: 90.2

Keene Little : 12/21/2006 4:09:04 PM

The afternoon bounce has a bear flag appearance to it so at this point I still expect to see the bounce fail and price head lower. YM and DOW have not been able to recapture the uptrend line from December 1st, now at 12513 and 12440, resp.

Jeff Bailey : 12/21/2006 4:08:16 PM

Looks like a good report. Deferred revenue was $311.7, up $27.6 million, or 10% from prior quarter.

Jeff Bailey : 12/21/2006 4:06:21 PM

Red Hat (RHT) Earnings Press release Link

Jeff Bailey : 12/21/2006 4:04:45 PM

RHT $17.96 -4.16% ... $19.40 extended.

Jeff Bailey : 12/21/2006 4:03:59 PM

Red Hat (RHT) $0.14 (adjusted) on Rev. of $105.8M

Jeff Bailey : 12/21/2006 4:01:46 PM

Red Hat (RHT) $17.97 -4.10% Link ... waiting for earnings ...

Jeff Bailey : 12/21/2006 3:58:56 PM

YM 12,503 ...

Jeff Bailey : 12/21/2006 3:41:06 PM

And NEM $45.20 -1.48% ...

Jeff Bailey : 12/21/2006 3:40:30 PM

BGO $5.00 -2.15%

KGC $11.51 -1.95%

ABX $29.98 -0.82%

Jeff Bailey : 12/21/2006 3:38:18 PM

Red Hat (RHT) $18.11 -3.36% ... earnings after the bell. Consensus is for EPS of $0.12 on Revenue of $104.16M.

Keene Little : 12/21/2006 3:36:37 PM

If you had raised your stop on a YM short to 12520 then you're still in the short play. I wouldn't raise it any higher at this point and just hope that was it for the bounce. It poked above today's downtrend line but has fallen back under. So far it was just a stop run knowing how many traders probably had their stops just above the line.

I have some upside potential Fib targets for this bounce (if it's to be just a correction to the delcine) now at ES 1431.75 and YM 12523 but any further probes above the last high of 12517 could just continue higher so it's risky to raise the stop any higher. So far the bounce off the low looks like a correction rather than the start of something bigger to the upside but these corrections can morph into bigger ones. If you're in a longer term short position, just hang on through this bounce.

Jeff Bailey : 12/21/2006 3:31:54 PM

03:00 tick on DXY was 83.56

Jeff Bailey : 12/21/2006 3:31:13 PM

Keep talking (CNBC / gold) ... KGC $11.51 -1.95% ... session low has been $11.43.

Jeff Bailey : 12/21/2006 3:20:52 PM

Today's Top Stories DJ-

GAZPROM TAKES CONTROL OF SAKHALIN-2 FOR $7.45B

Russia-owned Gazprom and Royal Dutch Shell agree to allow Gazprom to buy 50% plus one share in the massive Sakhalin-2 oil and gas development project for $7.45 billion in cash. Shell says prior deals will be honored.

LACKER SEES INFLATION AS CHIEF RISK

Federal Reserve Bank of Richmond President Jeffrey Lacker says inflation threat is the chief risk faced by the U.S. economy, with housing and oil prices of particular concern. He sees housing starts possibly realigning with sales in mid-2007.

GENERAL MILLS 2Q NET RISES 4%, LIFTS VIEW

Cereal maker posts net income of $385 million, or $1.08 a share, as revenue rises 5% to $3.47 billion. Analysts expected EPS of $1.03. Company raises fiscal full-year earnings view to $3.09-$3.13 a share from $3.03-$3.08 a share. Shares add 1%.

CONAGRA 2Q NET SURGES 44%, BOOSTS OUTLOOK

DJ- Shares rise 2% as packaged-food firm earns $219.6 million, or 43c a share. Revenue rises 3% to $3.09 billion, boosted by food and ingredients unit. Analysts expected EPS of 33c. Full-year EPS outlook is raised to $1.28-$1.33 from $1.17-$1.22.

Jeff Bailey : 12/21/2006 3:15:51 PM

03:00 Internals found at this Link

Keene Little : 12/21/2006 3:13:53 PM

Two equal legs up for ES is at 1431.75.

Keene Little : 12/21/2006 3:12:55 PM

Two equal legs up in the bounce for NQ is at 1793 which would take it up to its downtrend line from Monday.

Jeff Bailey : 12/21/2006 3:02:37 PM

03:00 Market Watch found at this Link

Jeff Bailey : 12/21/2006 3:00:05 PM

YM 12,501

Jeff Bailey : 12/21/2006 2:59:46 PM

Aides: Shiite Cleric Al-Sadr To End Boycott of Iraq Govt.

Jane Fox : 12/21/2006 2:58:42 PM

I think we have seen daily lows. I see reverse H&S forming supported by the MACD. Keene's observation about the MACD divergences was spot on. Link

Keene Little : 12/21/2006 2:39:12 PM

It's interesting that the home building index is falling in the same pattern as the techs in 2000-2002. The current bounce in the housing index mirrors what the Naz did in the summer of 2001 which is also a time we heard a continual drumbeat about how the bottom had been found. It turned out to be a long ways from the bottom. Same for housing. The collapse from bubbles typically follows the same kind of pattern and the current bounce in housing is a bull trap. Spring time will likely be ugly for housing.

Jane Fox : 12/21/2006 2:29:35 PM

BOSTON (MarketWatch) -- Single and multi-family housing starts should decline in early 2007 but then level off and improve later in the year, said David Seiders, chief economist for the National Association of Home Builders. He said he sees "modest erosion" of home prices in 2007, during a conference call Thursday.

Keene Little : 12/21/2006 2:28:11 PM

YM testing its broken uptrend line again. Two equal legs up in its bounce is at 12510 so 12515 is the right place for the stop even if it's subject to a stop run. The most I'd want to move it up is 10520 if you'd like to give yourself just a bit more staying power (puts it just above today's downtrend line).

Jane Fox : 12/21/2006 2:23:55 PM

WASHINGTON (MarketWatch) -- Higher inflation remains the chief risk to the economy, a top Federal Reserve official said Thursday. Speaking in Charlotte, N.C., Richmond Federal Reserve Bank President Jeffery Lacker said he's not persuaded that inflation has moderated. "Such a moderation is not yet evident, despite the two most recent CPI reports," he said in his prepared remarks. "It would take several months worth of data to provide statistically convincing evidence of a moderation in inflation." The CPI has been flat or falling for three months. Lacker cast the only dissenting votes to raise the Fed's target interest rate at each of the past four meetings. In January, Lacker rotates off the voting membership of the Federal Open Market Committee.

Keene Little : 12/21/2006 2:22:05 PM

From strictly a trend line analysis basis for the DOW today's break of its uptrend line from December 1st is bearish. After breaking below its uptrend line from July, back on November 27th, and bouncing higher just underneath that trend line (for a month now which is itself pretty amazing) that uptrend has now been broken. So its attempt to stick to the July uptrend has now broken down and sets off sell signals in my mind. Who knows how this will play out the rest of this month but I sure don't like the upside at all.

Keene Little : 12/21/2006 2:16:34 PM

It's possible that from an EW perspective a minor new low will be followed by a slightly larger corrective bounce (could be the sideways/up variety) so if bullish divergences continue at new lows think about taking some profits. If the bounce gets sloppy and corrective then that will be a signal to reenter a short.

Keene Little : 12/21/2006 2:12:02 PM

Bullish divergence on ES 5-min MACD and that deserves attention if you're short.

Keene Little : 12/21/2006 2:08:17 PM

If you shorted YM's bounce back up to its broken uptrend line I'd now lower my stop a bit. Looking at some Fibs and trend lines I think a good place for a stop is at 12515.

Jeff Bailey : 12/21/2006 2:05:49 PM

Yep ... DIA and unconventional $0.20 box Link

Jeff Bailey : 12/21/2006 2:04:57 PM

Still get feeling that YM needs to undercut today's lows, then if it is going to recover, and not be a "trend day lower" it will whip around.

Jeff Bailey : 12/21/2006 2:03:13 PM

VIX.X 10.84 ... still marching

Jeff Bailey : 12/21/2006 2:02:54 PM

YM 12,485 ... came close to re-test of session's low.

Jeff Bailey : 12/21/2006 2:02:32 PM

TRIN 1.47 ... after just matching h/o/d

Jeff Bailey : 12/21/2006 1:53:54 PM

VIX 10.76 +4.87% ... best levels of the session.

Jeff Bailey : 12/21/2006 1:51:45 PM

KGC traded "up" to $11.59, but still pinned between DAILY S2 $11.49 and WEEKLY S1 $11.45.

I need a BUYER

Jeff Bailey : 12/21/2006 1:50:29 PM

The dollar index (DXY) intra-day low came at 12:00 on the nose.

Keene Little : 12/21/2006 1:49:21 PM

Keep an eye on 5 and 15-min MACD. I use a faster setting than normal (8,13,5--note all Fibonnaci numbers) since MACD is more of a lagging indicator than even stochastics so I like to get a little earlier heads up (but I also get more false signals). After this morning's initial high today's bounce couldn't get the 5-min MACD above the zero line and that was a signal to help keep bears in their shorts.

So far both these time frames continue to have MACD in negative territory so if the 5-min MACD manages to climb above zero then we'll probably have a stronger bounce in progress and I'd look for a pullback at that point to take some profits. I'm trying to stay in my short from yesterday but I'm looking for a time when I want to take some money off the table. Two equal legs down from last Friday's high for ES is at 1423 and would be a good downside target for the current leg down.

YM has been in a flatter move since last week's highs and that means two equal legs down from last Friday has already been met at 12480. The next Fibonacci downside target for YM is where the 2nd leg down achieves 162% of the 1st leg down and that's at 12420. As long as YM 12509 continues to keep YM down there's a decent possibility we'll see that lower level. If weekly pivot at 12486 lets go then weekly S1 at 12394 is another possibility.

Jeff Bailey : 12/21/2006 1:47:43 PM

I don't need the frustration today, and if you're following my YM signals ... you probably don't either.

Jeff Bailey : 12/21/2006 1:46:29 PM

You see ... If I attempt a long in the YM now, I'll be second-guessing the trade. Initial analysis from this morning was "correct" in direction, I didn't stick with the TRIN, and got my stop too tight (trade blotter is why.)

the YM long only compounds uncertainty the remainder of the day.

Jeff Bailey : 12/21/2006 1:36:58 PM

QQQQ $43.39 -0.66% ... did test its 50-day SMA ($43.31) today. First test since QQQQ broke above on 08/15/06 at $37.37

Jeff Bailey : 12/21/2006 1:33:00 PM

TRIN 1.24 ... DAILY R1

Jeff Bailey : 12/21/2006 1:31:52 PM

YM 12,505 ... if bullish and played a bounce from WEEKLY Pivot, your 38.2% dynamic overlaps DAILY S2 here.

Keene Little : 12/21/2006 1:31:51 PM

YM is pushing up for a retest of its broken uptrend line. If we haven't seen the lows for this move yet then YM should fail at or below 12509.

Jeff Bailey : 12/21/2006 1:30:35 PM

01:10 Internals found at this Link

Keene Little : 12/21/2006 1:16:01 PM

The bond market liked the slowing economy news as the bonds rally and yields drop. They're clearly expecting the Fed will have to lower rates soon. I think that market is in for a rude awakening as well. The Fed is boxing itself into a corner on this one and won't be able to lower rates. There are a lot of bond holders who could get shocked into dumping bonds in the next few months.

Note that my opinion on this is 180 out from Bill Gross's opinion and that man is a whole lot smarter than I am on the bond market. He's forgotten a whole lot more than I know. But I just have this feeling the Fed isn't going to be able to accommodate the bond market.

Jeff Bailey : 12/21/2006 1:12:00 PM

01:10 Market Watch found at this Link

Keene Little : 12/21/2006 1:08:37 PM

The fund managers would of course like to prop this market up by hitting it with some buy programs. Only problem is they're already fully invested in order to catch the for-sure Santa Claus rally. With everyone in already the only one who can do more buying is the Fed. Be careful about that one. Here's the chart of calculated M3 as of last Friday. The Fed continues to pump money into the economy at a hyperinflationary rate. Link

Jeff Bailey : 12/21/2006 1:06:03 PM

Humph ... YM 12,525 , YM 12,518 and YM 12,486

Jane Fox : 12/21/2006 1:05:56 PM

The lowest the TICKS have reached is -709.

Keene Little : 12/21/2006 1:04:58 PM

It's about now that the junior traders, filling in for the vacationing senior traders, are afraid for their jobs as they get a tad worried about this selling. The senior traders, from the comfort of their Hampton homes, watching the market on their 60" plasma screens, are on the phones wondering what these good-for-nothing underlings are doing. Bonuses are at stake! Don't they realize that?

Jeff Bailey : 12/21/2006 1:04:13 PM

12:00, 12:16 and 12:37

Jeff Bailey : 12/21/2006 1:03:31 PM

We've had 3 sell program premiums so far today.

Jeff Bailey : 12/21/2006 1:02:27 PM

TRIN 1.34

Jane Fox : 12/21/2006 1:02:03 PM

New lows almost across the board.

Jeff Bailey : 12/21/2006 1:01:41 PM

YM probes WEEKLY Pivot

Jeff Bailey : 12/21/2006 12:59:02 PM

The additional "negative" is that the CRB Index has undercut its December 12th lows of 309.80.

Jeff Bailey : 12/21/2006 12:57:20 PM

KGC 11.47 -2.29% ... same spot we were in with the GLD trade on Friday.

Jeff Bailey : 12/21/2006 12:56:03 PM

US Dollar Index (CEC:DXY) 60-minute interval chart at this Link

Keene Little : 12/21/2006 12:55:26 PM

YM broke below its uptrend line from December 1st so any bounce back up to it at 12509 (which is also daily S2) that finds it to be resistance would be a good time to try a short but it might be good for only slightly lower before getting another bigger corrective bounce. Note that YM found support at its weekly pivot at 12486 (Jeff's and my numbers differ slightly).

Keene Little : 12/21/2006 12:43:41 PM

The move down from yesterday is looking impulsive but it needs a sideways consolidation near these lows and then another push lower in order to get a cleaner impulse down. So far ES 1428 is holding so a consolidation below 1431 for a couple of hours followed by a new low after that would go a long ways toward saying we've seen THE high for the market.

Keene Little : 12/21/2006 12:36:49 PM

Right now the bull flags that I mentioned earlier have failed to the downside and the break was fast. This is very typical, and bearish. I still don't think we'll see a big move in this holiday period but with everyone and their brother on the long side for the Santa Claus and January effect rally we could see that suprise downside move. If you're short that's what we're hoping for.

Jeff Bailey : 12/21/2006 12:36:38 PM

The "pattern" on BRK.A has been each new high's pullback has found buyers at/near the prior "buy signal."

Jeff Bailey : 12/21/2006 12:35:11 PM

Berkshire Hathaway (BRK.A) 110,000.00 -1.27% Link

Keene Little : 12/21/2006 12:32:56 PM

DOW is holding at support at 12430 but not exactly a bullish looking bounce yet. If the market drops a little further then I see support for SPX/ES at 1417/1428 which would be about another 25 DOW points lower.

Jane Fox : 12/21/2006 12:24:33 PM

Internals are bearish. Link

Jane Fox : 12/21/2006 12:22:07 PM

Me thinks the TRIN above its 3-day range was the canary in the mine.

Jeff Bailey : 12/21/2006 12:21:49 PM

VIX 10.50 +2.33% ... sticks its head above WEEKLY Pivot

Jane Fox : 12/21/2006 12:21:08 PM

Ad line is now below 0 at -22 AD volume is also below 0. This has been quite a coup for the bears I must say.

Jeff Bailey : 12/21/2006 12:19:45 PM

NYSE NH/NL fading 1,637/1,532

Jeff Bailey : 12/21/2006 12:17:43 PM

YM 12,515 alert

Keene Little : 12/21/2006 12:17:35 PM

For YM that support line is just above 12500.

Jeff Bailey : 12/21/2006 12:17:10 PM

TRIN was the "only thing" that gave a directional bias, but after YM kiss of DAILY S1/MONTHLY R1, I have/had feeling that might be it for a day's low.

Not the case as YM 12,519

Keene Little : 12/21/2006 12:16:54 PM

The DOW's uptrend line from November 28th is currently at 12430 so if this manages to drop a little further watch for support there.

Jane Fox : 12/21/2006 12:16:53 PM

I am a huge Harry Potter fan and can hardly wait for the next movie out this spring.

Jane Fox : 12/21/2006 12:16:25 PM

SAN FRANCISCO (MarketWatch) -- Scholastic Corp. said Thursday that J.K. Rowling has announced the title of the seventh and final book in her Harry Potter series: "Harry Potter and the Deathly Hallows." The publication date has not been set. Scholastic is Rowling's U.S. publisher.

Jeff Bailey : 12/21/2006 12:15:57 PM

YM 12,528

TRIN 1.40

Keene Little : 12/21/2006 12:13:45 PM

With the plethora of bad news we've had this week, and an even smaller chance the Fed will lower interest rates, this market should be down hundreds of DOW points. The fact that the DOW is flat on the week shows that the market isn't forward projecting. It's driven by emotions and psychology and right now people are in a bullish frame of mind. When the psychology changes this market will start to sell off, even with the Fed trying to pump more money into the economy. This week completely backs my opinion on this.

Jeff Bailey : 12/21/2006 12:10:31 PM

Current OPEN MM Profiles that I've made and Watch List at this Link ... I certainly don't understand the SLB/BHI action. Today, or last 5-days.

Jeff Bailey : 12/21/2006 12:10:14 PM

Current OPEN MM Profiles that I've made and Watch List at this Link ... I certainly don't understand the SLB/BHI action. Today, or last 5-days.

Jane Fox : 12/21/2006 12:09:36 PM

* NYSE advancers outnumber decliners 17 to 14
*Nasdaq advancers outnumber decliners 15 to 13

Jane Fox : 12/21/2006 12:09:01 PM

WASHINGTON (MarketWatch) -- Manufacturing activity contracted in the Philadelphia region in December, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed index fell to negative 4.3 in December from 5.1 in November. Readings below zero indicate contraction. Economists expected sentiment to remain relatively weak at 5.3. Indicators for new orders and unfilled orders also fell below zero. Shipments remained healthy.

Keene Little : 12/21/2006 12:07:50 PM

Philly Fed index fell to -4.3 from +5.1 in November. That shows contraction and warns of further slowing in the economy. Should be good news for the market right? (wink) Let's see if a rally starts. I'm kidding of course as it's not a reason to buy the market but the bad news bulls could step back in at any moment.

Keene Little : 12/21/2006 12:01:59 PM

A little sell program hit at 12:00. Must be the Philly Fed number. Haven't seen it but I guess it wasn't good.

Jeff Bailey : 12/21/2006 12:00:33 PM

YM probes session low.

Jeff Bailey : 12/21/2006 12:00:09 PM

FedEx (FDX) $108.54 -2.95% ... 50% retracement of 05/09/06 to 08/24/06 high/low closes.

Jeff Bailey : 12/21/2006 11:56:47 AM

And that will be it for any more YM trades today from me. Session low still a point above MR1.

Jeff Bailey : 12/21/2006 11:56:10 AM

YM long stop alert 12,533

Jeff Bailey : 12/21/2006 11:55:26 AM

YM 12,535

Jeff Bailey : 12/21/2006 11:54:12 AM

I'm "with you" Jane 11:48:46 and today may be like trying to squeeze blood from a turnip.

Keene Little : 12/21/2006 11:53:00 AM

The bears are thinking "they're just not going to let this sucker drop" and the bulls are thinking "where's my Santa Claus rally?". Each side is disappointed right now. The only ones who are happy are the fund managers who are holding onto their profits a little longer.

Jane Fox : 12/21/2006 11:48:46 AM

Not a lot going on and I don't have any clear direction today.

Jeff Bailey : 12/21/2006 11:44:42 AM

YM long entry alert ... here at 12,544 , stop 12,533, target 12,565

Jeff Bailey : 12/21/2006 11:37:21 AM

Phelps Dodge (PD) $118.37 -2.00% .. with copper breaking down below $3.00, any subscribers still long having benefited from the FCX $55.50 -4.93% buyout offer, I wouldn't be waiting around for a better offer as one large shareholder suggested several days ago. If PD shareholders turn down the offer, PD might get hit hard to the downside.

Keene Little : 12/21/2006 11:34:03 AM

The light volume environment makes it relatively easy to jerk the market around without big buy and sell programs (no big tick readings). The whole pullback from yesterday's high looks a lot like a bull flag--the DOW has formed a clean parallel down-channel. A downtrend line from yesterday's high may be one of the easiest ways to scalp a long play.

I've been thinking we're close to getting surprises that will be to the downside and that's why I'd prefer to wait for a break of the downtrend before trying a long. The flip side of the bull flag is a fast break to the downside out of it (catches traders leaning the wrong way). In this light holiday environment we may be expecting a bit much to see any big moves.

Jeff Bailey : 12/21/2006 11:32:15 AM

11:00 Internals at this Link

Jane Fox : 12/21/2006 11:27:17 AM

I have no evidence of the rescue team (no +800 TICKS) but we do seem to have some buying going on although no new swing highs have been made yet.

Jeff Bailey : 12/21/2006 11:22:22 AM

Not realizing where MONTHLY R1 was ... about a $75 opportunity cost mistake on 1 contract. That's MY fault.

Jeff Bailey : 12/21/2006 11:21:09 AM

YM short stop alert 12,543

Jane Fox : 12/21/2006 11:17:47 AM

I just got a clarification from the lady that wrote the article on Natural Gas hitting 2 year lows. She is saying the January 2007 contract is at 2 year lows. Duh!

Keene Little : 12/21/2006 11:14:23 AM

With each push back up you have to wonder if this is the one that will continue or will it get sold into again. This is what will make shorting the market very difficult. You'll have to scalp the moves down or else be willing to let the market bounce back up in your face and hope it will continue lower. The risk of course with the hold strategy is that a real rally could take hold and you'll give back everything. It's not going to be easy being a bear.

Jane Fox : 12/21/2006 11:04:52 AM

NG is now trading at 6.73 and yearly lows at 4.40.

Jane Fox : 12/21/2006 11:05:11 AM

As you can see the Natural Gas big contract (NG) is not any where near those yearly lows. I do have a delay on the this contract but it is like a 20 minute delay so there is a big disconnect between the emini and the big contract. News wires are saying Natural Gas at 2 year lows, which is just not right. Link

Jeff Bailey : 12/21/2006 11:03:18 AM

11:00 Market Watch found at this Link

Jeff Bailey : 12/21/2006 11:00:05 AM

TRIN 1.45 ... WEEKLY R1 becomes target for this measure.

Jeff Bailey : 12/21/2006 10:59:12 AM

YM short lower stop alert to break even.

YM 12,532

Jane Fox : 12/21/2006 10:58:01 AM

For those who are interested Natural Gas is plummenting to test yearly lows (6.281). Link

Jeff Bailey : 12/21/2006 10:56:58 AM

YM short update alert ... IF we were to see a trade at DAILY S1 and correlative MONTHLY R1 (12,527) be very alert there.

I confess, when I identified target I did NOT have my chart up with MONTHLY R1

Jane Fox : 12/21/2006 10:53:32 AM

Time to start watching the TRIN because it has now broken above its 3-day range and is a warning to the bulls.

Keene Little : 12/21/2006 10:50:26 AM

NQ is getting the biggest bounce but watch its downtrend line from Monday's high--it has been holding down every bounce for the past day including the last one that just tagged 1802. More distribution, clear as day here. It doesn't mean it can't rally again though if distribution takes a rest. Keep an eye on that downtrend line.

Jeff Bailey : 12/21/2006 10:49:09 AM

NYSE a/d 1770/1233

Jeff Bailey : 12/21/2006 10:48:46 AM

TRIN 1.34

Jeff Bailey : 12/21/2006 10:48:38 AM

YM short entry alert 12,543

Jeff Bailey : 12/21/2006 10:47:14 AM

YM 12,550 alert

Jeff Bailey : 12/21/2006 10:46:47 AM

TRIN's high has been 1.36 and close to DAILY R2. If that's "it" for today's sell-side pressure, then I don't want to blanket short a trade at 12,550

Jeff Bailey : 12/21/2006 10:45:39 AM

YM short setup alert ... look for a trade at YM 12,550, then go short a trade at 12,543, place stop at 12,560 and target 12,515.

Jeff Bailey : 12/21/2006 10:44:25 AM

YM 12,545

Jeff Bailey : 12/21/2006 10:44:17 AM

YM short setup cancel alert ... cancel order to just go short on tick at 12,550.

Jeff Bailey : 12/21/2006 10:41:03 AM

KGC $11.60 -1.19% ... session low has been $11.51.

Jeff Bailey : 12/21/2006 10:40:39 AM

ABX $29.95 -0.89% ... thinking "below $30.00" not that bullish.

Jeff Bailey : 12/21/2006 10:39:47 AM

An intra-day "moment of truth" for gold. YG 623.70. WEEKLY Pivot 623.93 and DAILY Pivot 624.33.

Jeff Bailey : 12/21/2006 10:36:49 AM

EIA Nat. Gas Table at this Link ... draw of 71 Bcf

Jeff Bailey : 12/21/2006 10:33:06 AM

Newmont Mining (NEM) 45.44 -0.95% ... broke similar upward trend yesterday, probes its 50-day SMA as I type. This is "last" upward anything for NEM.

Jeff Bailey : 12/21/2006 10:31:36 AM

KGC 11.53 -1.78% ... right at its upward trend (similar to CRB Index).

Jeff Bailey : 12/21/2006 10:28:57 AM

YM 12,537

Jeff Bailey : 12/21/2006 10:28:44 AM

YM short entry setup alert ... let's try a YM short on a trade back up at 12,550, stop goes 12,560, and target 12,515.

Jeff Bailey : 12/21/2006 10:26:26 AM

TRIN 1.24 and DAILY R1

YM down 4 at 12,540

Keene Little : 12/21/2006 10:25:02 AM

Breaking yesterday's lows now makes it a little more bearish. It doesn't get really bearish until Tuesday morning's lows are taken out (DOW 12397 and SPX 1415). In the meantime we could still chop sideways. Also, SPX is close to hitting its uptrend line from November 28th, currently just above 1422.

Jeff Bailey : 12/21/2006 10:25:24 AM

CRB Index (CEC:CRY) Daily interval bar chart (very wide to view and think about INFLATION, or lack of it at Mfg./wholesale level) Link

Jane Fox : 12/21/2006 10:21:19 AM

Now ES is as well.

Jane Fox : 12/21/2006 10:21:09 AM

Both YM adn NQ are testing their respective PDLs.

Jeff Bailey : 12/21/2006 10:11:58 AM

TRIN 1.13 (above 1.00 and DAILY Pivot is more bearish)

YM 12,548

Jeff Bailey : 12/21/2006 10:11:28 AM

In my mind, a YM trader today is going see today's range as DAILY R1 to DAILY S2 and putting on a trade before DAILY R1 or DAILY S2 is traded, or at least DAILY S1, is going to be a 50/50 proposition. That is... if going short here with TRIN 1.13, then RISK has to be measured to DR1.

Jeff Bailey : 12/21/2006 10:07:45 AM

10:05 Market Watch found at this Link

Jane Fox : 12/21/2006 10:07:43 AM

US $ is trying to roll over and if it does then Gold will break through its resistance the only problem is silver. It has one of the most bearish charts I have seen for a while and gold and silver usually trade together.

Jane Fox : 12/21/2006 10:06:52 AM

Egads Keene!

Keene Little : 12/21/2006 10:06:31 AM

Same thoughts Jane :-)

Keene Little : 12/21/2006 10:05:57 AM

It's at about this time that the sign gets posted on the beach--SHARKS. Do not go into the water (market)! I like the short side in this market but probably better with some put options instead of futures (unless you can live with a really wide stop and live with the consequence of a continued rally). Buy some time, don't go hog wild and let this market putz around without you. Low VIX makes it a good time to buy a couple more.

Jane Fox : 12/21/2006 10:04:38 AM

I think the DOW will stay strong until the new year and then it will be time to get short and enjoy the ride down. Book gains for 2006 and then selloff? You may want to try a short now but short the weaker markets; NAZ first and then maybe the Russell. QQQQ puts anyone.

Jeff Bailey : 12/21/2006 10:03:20 AM

And that TRIN and YM are in syncronicity.

Keene Little : 12/21/2006 10:02:38 AM

Time to push it back up.

Jeff Bailey : 12/21/2006 10:01:43 AM

It "looks" like my TRIN feed from QCharts has been fixed.

Jeff Bailey : 12/21/2006 10:01:13 AM

TRIN 1.10

YM 12,543

Jane Fox : 12/21/2006 9:59:01 AM

And sure enough the bullish internals that were slam dunk before are not now. We are no longer in Kansas Toto.

Keene Little : 12/21/2006 9:58:09 AM

Hmm, push it up, sell into it, push it up, sell into. I sure smell distribution going on in this market.

Jeff Bailey : 12/21/2006 9:57:09 AM

TRIN 1.03

YM 12,555

Jeff Bailey : 12/21/2006 9:55:25 AM

Lehman Bros. (LEH) $78.48 +0.60% ... set to challenge its all-time high.

Keene Little : 12/21/2006 9:54:23 AM

The DOW is sporting an interesting pattern that calls for a high between 12501 and 12513. The lower number is the trend line along recent highs, and potentially the top of an ascending wedge, and the upper number is the Fib projection for the 5th wave of the rally from December 12th. Link

Jeff Bailey : 12/21/2006 9:54:13 AM

CRB Index (CEC:CRY) 310.53 -0.15% ... testing its 50-day SMA and upward trend from 10/04/06 relative low to 11/17/06 pullback low.

Jane Fox : 12/21/2006 9:51:08 AM

These are about as bullish as they can get. Link

Keene Little : 12/21/2006 9:47:44 AM

Certainly we have to figure that with the additional bad news this morning (slowing growth and higher inflation) that the market is going to rally (wink). Talk about a major disconnect between the market and reality! It's why I say the market is dumber than a rock. Manipulation and Fed money is what has created our monster rally, in the face of deteriorating economic conditions. It's why I think January won't be so pretty. Can't buy it here and can't sell it. Patience.

Jane Fox : 12/21/2006 9:46:38 AM

Yesterday ES was not able to break through its PDH and overnight high even though the internals were quite bullish. This is telling me there is an underlying strength to the bearishness that was not there before.

Jeff Bailey : 12/21/2006 9:46:03 AM

Jane! My QCharts currently shows today's TRIN h/l of 0.95 and 0.65 with tick of 0.89. Does that match your feed?

Jeff Bailey : 12/21/2006 9:44:25 AM

Correction to Daily Pivot levels for TRIN ... 0.67, 0.88, Piv= 1.03, 1.24, 1.39

Jeff Bailey : 12/21/2006 9:42:40 AM

Thank you!

Jane Fox : 12/21/2006 9:41:01 AM

TRIN from yesteday was a High - 1.18, low - 0.82 and close - 1.09.

Jeff Bailey : 12/21/2006 9:38:32 AM

Jane! Could you give me yesterday's h/l/c for TRIN from your data source?

Jane Fox : 12/21/2006 9:38:04 AM

AD line is healthy +471 and AD volume above 0 and climbing. The bulls are grabbing the ball and trying to run with it.

Keene Little : 12/21/2006 9:37:40 AM

Both sides are sitting here wondering who's going to blink first.

Jane Fox : 12/21/2006 9:31:17 AM

Notice the range the TRIN has been in for the last few days. Until it breaks this range I will not be using the TRIN as an internal. Link

Jane Fox : 12/21/2006 9:25:55 AM

I agree Keene, if we get a new high and the indicators do not agree, which is very likely, the possibility of a serious decline in January becomes all the more likely. However if the overbot environment is once again burned away with an sideways movement the bulls win and sets us up for new yearly highs next year that have a higher level of sustainability.

Keene Little : 12/21/2006 9:21:24 AM

If ES and YM break yesterday's lows then it raises some serious doubt about being able to push to a new high but until that happens I'd be thinking another push higher or possibly just continue to chop sideways. Sideways is still a win for the bulls.

Jane Fox : 12/21/2006 9:17:25 AM

Little reaction to the revised GDP numbers. Link

Keene Little : 12/21/2006 9:16:42 AM

Looks like another overnight session that was pushed steadily higher from about midnight to 4:00 AM and then chopped lower with a spike down on the GDP and Core CPI numbers (GDP came in at 2% vs. 2.2% expected and Core CPI came in at 2.2%, still above the Fed's target). It looks like a pattern of holding futures up in the light volume overnight session so as to better hold the market up at the open and hopefully continue to hold the market up for the rest of the month.

At this point, by holding above the uptrend line from December 1st for ES and from December 12th for YM I'd have to say the bulls are holding on here. If they're able to push the market back up for a retest of the overnight highs I think there's a good chance they'll continue to new highs again. The upside targets are still DOW 12513 and if it goes higher then SPX's upside target near 1431-1433 comes into play. ES 1445-1450 gets into some tough pivot resistance. If they can just hold it here or inch it higher for another few days there will be high fives all around.

Jane Fox : 12/21/2006 9:07:46 AM

NEW YORK (MarketWatch) -- The dollar was little changed against major rivals early Thursday after third-quarter gross domestic product was revised lower, defying expectations. The dollar was last trading down 0.03% against the yen and up 0.1% against the euro. The Commerce Department said the economy grew at a 2% real seasonally adjusted annual rate in the quarter, the Commerce Department said Thursday, down from an initial reading of 2.2%. Economists polled by MarketWatch were expecting an unchanged reading.

Jane Fox : 12/21/2006 9:04:35 AM

WASHINGTON (MarketWatch) - The U.S. economy grew at a 2% real seasonally adjusted annual rate in the third quarter, slightly lower than the 2.2% estimated a month ago, the Commerce Department reported Thursday.

It was the slowest growth since the fourth quarter of 2005, when hurricane damages slowed the economy to 1.8%. The economy grew at a 2.6% pace in the second quarter.

The big picture take away from third and final estimate of gross domestic product was little changed from the report from a month earlier. As before, the collapse of homebuilding was a large drag on growth, offset by healthy consumer spending and robust capital spending by businesses.

Disposable personal incomes were revised higher, while profits were slightly lower, although profits have still risen at the fastest pace in 22 years over the past year.

Jane Fox : 12/21/2006 9:03:46 AM

WASHINGTON (MarketWatch) -- The number of Americans filing applications for unemployment benefits climbed back in the latest week, while the number of workers continuing to claim benefits rose to its highest level since the beginning of the year.

The Labor Department reported that 315,000 workers filed initial claims for jobless benefits in the week ending Dec. 16, an increase of 9,000 from the previous week.

Initial claims fell for the first two weeks of December. Holidays between Thanksgiving and New Year's Day can skew the data, because the normal filing pattern can be disrupted.

Continuing jobless claims, meanwhile, rose to 2.52 million, the highest since January.

The four-week moving average of new claims fell by 2,000 to 325,750 during the week ending Dec. 9, the government report said.

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