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Keene Little : 1/4/2007 1:05:50 AM

Thanks Jeff, I checked my charts again after your note on the YM low on 12/1/06 and see the same low. For whatever reason YM is not showing that day's prices on the daily or monthly chart but can be seen on the intraday charts (the 12/29/06 candle is also missing). So I corrected the monthly low and this is the corrected pivot table with the monthly numbers: Link

Jeff Bailey : 1/3/2007 11:54:56 PM

YM Pivot Matrix for Thursday at this Link

Note: I show the YM07H having traded a MONTHLY LOW of 12,194 on 12/01/06.

Keene Little : 1/3/2007 11:20:58 PM

Thursday's pivot tables: Link and Link

OI Technical Staff : 1/3/2007 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The Market Monitor has been archived.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 : 1/3/2007 6:22:45 PM

Money-Market Funds Remove $10.7 Billion For Week Ended Tuesday

DJ- Investors to money-market funds removed $10.70 billion in the week ended Tuesday, bringing total net assets to $2.234 trillion, according to the Money Fund Report newsletter, published by iMoneyNet Inc.

Institutional investors removed $13.07 billion, while individual, or "retail," investors contributed $2.36 billion.

Assets in taxable money funds fell $8.57 billion to $1.950 trillion. The average seven-day simple yield for taxable funds declined to 4.72% from 4.74%. The average seven-day compound yield, which assumes reinvestment of dividends, declined to 4.83% from 4.85%. Thirty-day simple yields remained at 4.74%, while 30-day compound yields remained at 4.85%.

The highest seven-day compound yield among retail taxable general-purpose money funds was followed by a three-way tie between Harbor Money Market Fund, Transamerica Premier Cash Res/Inv, and Vanguard Prime MMF/Investor at 5.24%.

About $2.13 billion was removed from tax-free funds, putting total tax-free assets at $373.03 billion.

Institutions removed around $2.22 billion, while retail investors contributed $87.80 million.

The average seven-day simple yield for nontaxable funds rose to 3.28% from 3.17%. The average seven-day compound yield, which assumes reinvestment of dividends, rose to 3.33% from 3.22%. The 30-day simple yield rose to 3.07% from 3.01%, and the 30-day compound yield rose to 3.11% from 3.05%.

The highest seven-day compound yield among retail tax-free money-market funds was Alpine Municipal MMF/Investor at 3.90%, followed by Vanguard PA Tax-Exempt MMF at 3.84% and Vanguard OH Tax-Exempt MMF at 3.82%.

Jeff Bailey : 1/3/2007 5:59:48 PM

Text of EIA Comment On Errors In Oil Inventory Data

DJ- EIA's weekly supply data for the week ending December 15, 2006 (published on December 20) included incorrect data on PADD 2 (Midwest) crude oil stocks due to reporting errors by one or more companies. The timing of the discovery of the errors was such that revising data for December 15 would have delayed release of data for December 22 (released on December 28). Timely release to the market of correct data for December 22 was the highest priority, and we acted accordingly.

EIA's policy on revising weekly data is that revisions will occur only if the revision is expected to substantively affect understanding of the U.S. petroleum market, based on EIA's judgment of the revision's expected effect. At this point in time, it is EIA's judgment that a revision to the December 15 data will not have a significant market impact. Therefore, there will not be any official revision to EIA's December 15 weekly supply data.

For informational purposes, resubmitted data indicates that Midwest crude oil stock levels would have been 68.9 million barrels and U.S. total crude oil stocks 317.6 million barrels as of December 15, rather than the 80.5 million barrels and 329.1 million barrels, respectively, as published on December 20, 2006.

Jeff Bailey : 1/3/2007 5:51:11 PM

Gibraltar Industries (ROCK) $22.45 -4.50% ... ticks higher at $22.81 in extended trade after S&P announces company will replace Global Payments (GPN) in the S&P Smallcap 600 on January 9, 2007.

Jeff Bailey : 1/3/2007 5:48:47 PM

Global Payments (GPN) $47.77 +3.17% ... higher at $48.41 in extended session after S&P said company will replace Banta Corp. (BN) in the S&P Midcap 400 on January 9, 2007. Banta is being acquired by RR Donnelley & Sons (RRD).

Jeff Bailey : 1/3/2007 5:46:19 PM

AvalonBay Communities (AVB) $128.75 -0.99% ... jumps to $131.19 in extended after S&P announces company will be added to S&P 500 (no date specified at this time), replacing Symbol Technologies (SBL), which is being bought by Motorola (MOT).

Jeff Bailey : 1/3/2007 5:41:45 PM

Energen Resources (EGN); 70% of 2007 Production Already Hedged

Jeff Bailey : 1/3/2007 5:32:22 PM

Daily/Weekly/Monthly Index Pivot Matrix for Thursday at this Link

Note: The Dollar Index (CEC:DXY) did trade as low as 83.15 on Tuesday 01/02/07.

Jeff Bailey : 1/3/2007 4:58:46 PM

Closing Internals found at this Link

Jeff Bailey : 1/3/2007 4:38:40 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 1/3/2007 4:33:26 PM

2007 "Dow Dogs" up 0.58% first trading day of year.

Keene Little : 1/3/2007 4:20:13 PM

The bears will see this afternoon's bounce in SPX back up to its broken uptrend line from July as a test and hopefully a kiss goodbye tomorrow. The bulls will see the close as holding the uptrend line. We'll have to wait until tomorrow before we hopefully get some answers as to who is right.

In the meantime, with the DOW holding its uptrend line and if the bulls win this round, this is the new wave count for the A-B-C move up from last week's low with an upside target now at DOW 12648 for two equal legs up. This count requires a fairly strong rally from here (for wave-c) which could top out next Monday. If it instead starts chopping its way higher and especially if it turns back down and hits new lows below today's then this bullish possibility gets thrown out. Link

Jane Fox : 1/3/2007 4:07:29 PM

Remember I said earlier that I thought we would see +1000 TICKS. Well we just got it - after the cash market closed. Too funny!

Jeff Bailey : 1/3/2007 3:58:45 PM

Alon USA Cuts Cat Cracker Rates To Aid Maintenance

DJ- Alon USA reduced the processing rates of a key gasoline-producing unit at its Big Spring, Texas, refinery Tuesday to facilitate maintenance on associated equipment, the company said in a report to a state environmental agency.

The charge rate to the fluid catalytic cracker (FCC) was reduced so that the wet gas compressor could be shut and partially replaced, said the report to the Texas Commission on Environmental Quality. The report didn't quantify or characterize the rate cut or say how long FCC operations would be reduced.

The FCC isn't one of the units being shut down for planned seasonal maintenance.

On Tuesday, Alon reported to the TCEQ that it was shutting a number of units - including the crude unit, reformer, gasoil hydrotreater, sulfur recovery unit and diesel hydrotreater - for planned repairs.

The units are being taken down successively, one or two each day, the report said. Emissions from the shutdowns and maintenance are expected to last until Jan. 18.

The Alon refinery has a crude oil throughput capacity of 70,000 barrels a day.

ALJ $24.92 -5.28% Link ...

Keene Little : 1/3/2007 3:58:44 PM

Bears beware. If you were hoping for a repeat pattern to January 2005, this day is already finishing differently. The first day of trading in January 2005 ended down -54 on the day. Today it's looking like a flat to maybe slightly positive finish. The only similarity is profit taking but that's not surprising and not yet bearish.

Keene Little : 1/3/2007 3:51:35 PM

Hmm, if they can push SPX back up to 1417-1418 for the close it will look like a doji candlestick on its July uptrend line. The bulls could declare victory with that one.

Keene Little : 1/3/2007 3:47:16 PM

I thought we'd see some volatility today and it certainly appears we got it. I think that will likely be true for January as well.

Keene Little : 1/3/2007 3:44:59 PM

If they can drive the DOW back into positive territory for the close, which appears they're doing, they'll at least be able to keep the sheeple from being scared away.

Keene Little : 1/3/2007 3:27:52 PM

As bearish as today looks I still can't help but feel this has been engineered to suck in the bears in order to get their help to launch the market to new highs. A sell off from here is just too easy. Too many bears are expecting it. Stay very cautious if you're on the short end.

Keene Little : 1/3/2007 3:20:34 PM

While I've been looking for a 2nd leg up to equal last week's rally (for the A-B-C move up from last week's low), which is where I was getting upside targets at DOW 12630 and SPX 1434, today the 2nd leg up achieved 62% of the 1st leg up (at DOW 12564 and SPX 1427.60). That's the minimum and is typically found in a truncated move. Truncated moves are typically found at turning points and this adds to the potential bearishness of today's move.

We're due for a bounce to correct today's drop and if that bounce turns around and heads for new lows then it would be a very strong statement that we've seen THE top. We don't know that yet so continue to scalp the moves in the meantime.

Jeff Bailey : 1/3/2007 3:14:33 PM

03:00 Internals found at this Link

Keene Little : 1/3/2007 3:21:19 PM

The bears will be all excited after today. SPX has broken, and looks like it will close below, its uptrend line from July (currently just under 1418). A higher open today followed by a lower low and a close below last Friday's close will leave a bearish engulfing candle on the daily chart and could be a key reversal day. The bulls will have a chance tomorrow to reverse this potentially major sell signal but they can't waste any time doing it.

Jane Fox : 1/3/2007 3:08:24 PM

This is not looking good for the bulls I'm afraid. Link

Jeff Bailey : 1/3/2007 3:04:12 PM

03:00 Market Watch found at this Link

Jeff Bailey : 1/3/2007 2:56:33 PM

Sell Program Premium ... YM 12,450 : SPY $140.65

Keene Little : 1/3/2007 2:51:40 PM

SPX dropped down to test last week's low near 1410. This has the potential to turn bear ugly but not quite yet.

Keene Little : 1/3/2007 2:50:30 PM

DOW dropped down to test its uptrend line from July through the December 1st low, currently at 12430.

Jeff Bailey : 1/3/2007 2:47:38 PM

VIX 12.58 +8.82 ... set to test WEEKLY R2/Monthly R1.

Jeff Bailey : 1/3/2007 2:46:45 PM

Sell Program Premium ... YM 12,504 : SPY $140.85

Jane Fox : 1/3/2007 2:45:45 PM

TICKs -800. Wow!

Keene Little : 1/3/2007 2:40:26 PM

ES made a quick dash down to its daily S1 level at 1423.50. Monthly pivot is at 1424.25. Next support on the pivot table is weekly S1 at 1419.75 and that would be a swing today from weekly R1 to S1.

Jeff Bailey : 1/3/2007 2:39:24 PM

DaimlerChrysler December Sales Fall 1%

Story Link

DCX $62.15 +1.20% Link ...

Jeff Bailey : 1/3/2007 2:35:24 PM

Ford Motor December Sales Fall 12.8%

Story Link

F $7.56 +0.66% Link ...

Jeff Bailey : 1/3/2007 2:33:12 PM

General Motors December Sales Fall 13%

Story Link

GM $29.40 -4.29% Link ...

Keene Little : 1/3/2007 2:22:24 PM

Quite a turnaround in those puts today Jane.

Jane Fox : 1/3/2007 2:20:39 PM

Keene, those QQQQ puts we have are looking a lot better now.

Jeff Bailey : 1/3/2007 2:20:21 PM

Swing trade VIX.X call target alert ... sell the three (3) VIX.X Feb 12.50 Calls (VIX-BV) should the VIX.X trade 13.00 (prior target from 12/14/06 entry was 12.50).

VIX 12.36 with VIX-BV $1.60 x $1.75

Keene Little : 1/3/2007 2:20:34 PM

The DOW is now holding onto a 50-pont spread between it and SPX (just for today).

Jane Fox : 1/3/2007 2:20:08 PM

Clearly one of those days when the AD volume was wrong and clearly the bears are getting a lot stronger. If the bears can turn the AD volume around like this you know there is something going on under the hood.

Keene Little : 1/3/2007 2:17:32 PM

Today's selling is a clear example of what happens when a bull flag fails--we have so many traders now conditioned to believing that a sideways/down consolidation, after a big spike up, is an opportunity to get long that when it doesn't happen they bail in a hurry. It's just the opposite of short covering and this afternoon is a perfect example of it.

This week has the potential to be full of these head fake moves, including the current sell off. Scalp 'em, don't stick with 'em. Once we get a new downtrend started then we can swing trade that move. For now we're still potentially in topping action. Emotions (fear and greed) are running high right now and today's full moon could be exacerbating that.

Jeff Bailey : 1/3/2007 2:16:20 PM

Swing Trade target cancel alert ... with VIX 12.31, cancel prior orders

Keene Little : 1/3/2007 2:11:28 PM

On the 1st day of January 2005 the DOW was taken from a 90-point rally to a 54-point loss and it started a month of selling. That's cleary what the bears hope to see here. The jury's still out as I continue to think this pullback will lead to another push higher. The important level is last week's low.

Keene Little : 1/3/2007 2:07:11 PM

The uptrend line from November 28th for ES is currently at 1427 so watch for support there if tagged.

Jane Fox : 1/3/2007 2:06:35 PM

WASHINGTON (MarketWatch) - Members of the Federal Open Market Committee agreed unanimously in December that inflation remained the primary risk to the economy, although they acknowledged that the economy may have been a "touch softer" than they had previously believed, according to minutes of the Dec. 12 meeting released Wednesday. While all the central bankers continued to see inflation as the primary threat, several members argued that "subdued" data meant that "the downside risks to economic growth in the near term had increased a little and become a bit more broadly based than previously thought." One member of the group argued for a more balanced statement that would have raised the possibility that rates could be cut, the minutes said.

Keene Little : 1/3/2007 2:06:04 PM

Now we'll see how well YM 12575 area holds up.

Keene Little : 1/3/2007 2:05:30 PM

On our way towards giving up today's gains. Not a surprise at all.

Jeff Bailey : 1/3/2007 2:04:06 PM

Sell Program Premium ... YM 12,585 : SPY $141.87

Keene Little : 1/3/2007 2:02:35 PM

ES is bouncing off support near 1431 while YM (DOW) continues to show relative strength by holding well above this morning's lows.

Jeff Bailey : 1/3/2007 2:02:32 PM

FOMC December 12, 2006 Minutes Link ...

Jeff Bailey : 1/3/2007 1:47:32 PM

Belarus Slaps Customs Duty On Russian Oil Transits (update)

DJ- Belarusian President Alexander Lukashenko lashed out angrily at the Russian leadership Wednesday over energy price increases, calling its conduct "shameless," and his government said it was slapping a customs duty on Russian oil pumped across its territory to Europe.

The oil transit fee and the fiery remarks were the latest salvos in a politically charged struggle over Russia's moves to end years of preferential treatment that have helped the authoritarian Lukashenko keep his country's Soviet-style economy running and maintain his grip on power.

They came after Belarus averted a New Year's Day cutoff of Russian natural-gas supplies by grudgingly agreeing to pay twice the previous price this year and even more in the future, and appeared aimed at prompting Russia to scrap a new customs duty this year on oil exports to its neighbor.

Belarus has stopped importing Russian oil as it seeks to persuade Moscow to reconsider the duty of $180 per metric ton, saying the additional charge makes oil purchases too expensive and could badly damage the economy.

"If they are drowning in petrodollars and other currency income and have decided ... to place us in conditions worse even than Germany and other European countries, then let's ask this rich Russia to pay us for our services," said an agitated, pale-looking Lukashenko, shouting at times in televised remarks during a government meeting.

Later, Prime Minister Sergei Sidorsky told a news conference Belarus has imposed a customs duty of $45 per metric ton on Russian oil crossing Belarus, also effective Jan. 1. According to government figures, nearly 79 million metric tons of Russia oil transited the nation's pipelines last year.

Lukashenko said he had ordered the government "to send Russia a proposal on payment for everything they get here for free - from military facilities and transit."

The trade disputes reflect severe strains in ties between the two former Soviet republics, which go back centuries and remained very close after the 1991 Soviet collapse but have been frayed in recent years by a power struggle between Lukashenko and Russian President Vladimir Putin's Kremlin.

Belarus is a key Russian military ally and buffer against NATO, and the nations agreed a decade ago to form a close union. But the recent energy pressure suggests the Kremlin is growing tired of supporting Lukashenko, who has resisted efforts to grant Moscow more control over his country and its economy.

Lukashenko, who gave in to long-standing Russian pressure to sell a half share in his country's gas pipeline system as part of the gas price agreement signed in the final minutes of 2006, said that he had fulfilled Russia's demands and now wants Russia to fulfill his.

He said he had issued Sidorsky "a direct order to sign an unfavorable agreement on gas" because, he claimed, Russian Prime Minister Mikhail Fradkov had promised that reaching a gas deal would bring a resolution to disputes on the oil customs duty and what Belarus says is blockage of its sugar exports.

The customs duty would deprive the Belarusian government of major profits it has reaped by exporting oil products made from cheap Russian oil.

The outspoken Lukashenko said it would bring the oil price to levels that would put "millions of people in Belarus" out of work - an apparent reference to refineries that are now operating on reserves and other industrial enterprises that could be affected in the nation of 10 million.

He said Belarus is ready to evenly share revenues from the oil products it sells.

Belarusian officials have said they are hoping for a favorable resolution to the oil customs duty dispute by mid-January. Russian officials have said little about the issue and could not be reached for comment late Wednesday, during a holiday that ends next week.

Russian authorities have virtually halted imports of Belarusian sugar as of Jan. 1, Ivan Danchenko, head of the state-run agricultural production concern Belgospishcheprom, said Wednesday, adding that Belarusian sugar producers have lost some $2 million.

Sugar made from Belarusian sugar beets is not subject to Russian customs duties. Belarusian producers began experiencing problems with exports late last year, amid Russian suspicions that they were sending Latin American-produced cane sugar to Russia in the guise of beet sugar to avoid customs duties.

Jeff Bailey : 1/3/2007 1:41:56 PM

Toyota Reports 2006 and December Sales

DJ- With eleven consecutive years of record-breaking sales, Toyota Motor Sales (TMS), U.S.A., Inc., today reported total best-ever year-end sales of 2,542,524 vehicles, up 12.9 percent over 2005.

"2006 was a respectable year for the industry if you consider the strain of erratic fuel prices and a housing bubble on an industry weaning itself from incentives," said TMS Executive Vice President Jim Lentz.

Camry became the best-selling car in America for the fifth consecutive year and the ninth time in the past decade. Lexus retained its crown as the best-selling luxury brand in America for the seventh consecutive year, selling a total of 322,434 units in 2006, up 6.8 percent over 2005. With overall sales of 173,034, Scion was a significant contributor to the record sales year.

TMS reported best-ever overall sales month results of 228,322, an increase of 16.6 percent over the same period last year.

Toyota Division

Toyota Division recorded best-ever year-end sales of 2,220,090 vehicles, up 13.8 percent. Toyota Division passenger cars recorded best-ever year-end sales of 1,275,119, up 12.4 percent over last year. Passenger car sales were led by Camry, which posted year-end sales of 448,445, an increase of 4.2 percent. Corolla posted year-end sales of 387,388, an increase of 13.9 percent. The all-new Yaris subcompact, which went on sale in March, posted year-end sales totaling 70,308. The Prius gas-electric hybrid mid-size sedan posted best-ever December sales of 9,291, an increase of 6.9 percent over the year-ago month. Year-end Prius sales reached 106,971 units.

Toyota Division recorded all-time best-ever year-end light truck sales of 944,971, an increase of 15.7 percent. Toyota Division light trucks also reported all-time best-ever December sales of 88,370, up 15.9 percent over the same period last year. Light truck sales were led by Sienna with December sales of 16,090, up 10.5 percent over the same period last year. The RAV4 compact sport utility vehicle (SUV) reported year-end sales of 152,047, up 116.3 percent over the same period last year. The all-new FJ Cruiser, which went on sale in March, reported year-end sales of 56,225 units. The Highlander Hybrid gas-electric mid-size SUV reported sales of 2,354 in December. Highlander and Highlander Hybrid posted combined December sales of 11,700, up 7.4 percent over the same period last year.

Contributing to the light-truck sales record was the Tacoma pickup truck with December sales of 15,857, up 7.3 percent. Year-end Tacoma sales were 178,351, up 6 percent over 2005.

Scion reported December sales of 10,326 units. The Scion xB urban utility vehicle recorded December sales of 3,330 units with year-end sales totaling 61,306, an increase of 13.8 percent over 2005. The tC sports coupe reported December sales of 4,996 units with year-end sales reaching 79,125 units, an increase of 6.7 percent over 2005.

Lexus Division

Lexus reported best-ever total year-end sales of 322,434, up 6.8 percent over last year, and all-time best-ever overall sales month of 37,235 units, up 9.9 percent over the year-ago month. It was the second consecutive year Lexus posted sales above 300,000 units.

Sales of Lexus passenger cars achieved best-ever year-end results of 183,037 units, an increase of 21.4 percent. Lexus passenger car sales reported best-ever overall sales month results of 20,913 units, an increase of 21.6 percent over the year-ago month. For the month, passenger car sales were led by the ES 350 luxury sedan with best-ever December sales of 8,736 units, up 34 percent. The ES 350 luxury sedan reported best-ever year-end sales of 75,987 units, up 12.8 percent. The IS 250 and IS 350 luxury sport sedans recorded combined best-ever December sales of 5,538 units and combined best-ever year-end sales of 54,267 units, an increase of 244.8 percent. The all-new LS 460 premium luxury sedan reported December sales of 3,865, an increase of 73 percent, and year-end sales of 19,546 units.

Lexus Division light trucks reported December sales of 16,322 units and year-end sales of 139,397 units. The RX 350 and RX 400h enjoyed combined best-ever December sales of 12,779 units and year-end sales of 108,348 units. The RX 400h luxury hybrid SUV reported sales of 1,981 units for the month.

TMS calendar-year-to-date hybrid sales totaled 191,742 units. In December, hybrids sales posted 17,883 units.

There were 306 selling days in 2006, as compared to 307 selling days in 2005. There were 26 selling days this month, as compared to 27 selling days last December.

TM $135.90 +1.18% Link ...

Jane Fox : 1/3/2007 1:40:44 PM

Ex-Enron exec Richard Causey reports to prison

Keene Little : 1/3/2007 1:40:11 PM

YM's previous December highs of 12577 offered support this morning and that's the level to watch for continued support, or not, should this drop further this afternoon. Poor ES (never mind NQ) is struggling just to reach the December high of 1444.25.

Jeff Bailey : 1/3/2007 1:34:00 PM

Belarus Slaps Customs Duty On Russian Oil

Jeff Bailey : 1/3/2007 1:30:03 PM

PacificNet Games (PACT) $6.66 +7.76% ... jumps after announcing exclusive Asia distribution agreement with Euro Games Technology.

Keene Little : 1/3/2007 1:29:15 PM

Starting to look like funds are taking advantage of today's spike up to do a little selling. Put out the upgrades, get the sheeple buying and then offload their inventory. It works every time. But I still don't think we've seen the highs for the week. This is a scalpers market for now.

Jane Fox : 1/3/2007 1:28:52 PM

Could this be one of those days when the AD volume was wrong?

Keene Little : 1/3/2007 1:27:03 PM

ES and YM are now breaking the bottoms of their bull flags. This could start accelerating lower now.

Marc Eckelberry : 1/3/2007 1:26:04 PM

Gotta go, I wanted to do a few more posts than normal on this important day. Being short is looking better and better and I think the copper sell-off is your heads up. Watch YM 12626 and NQ 1802! Long above, short below. Stops on YM short should be no higher than 12642. I prefer a YM short to NQ.

Keene Little : 1/3/2007 1:22:05 PM

ES and YM have pulled back to the bottoms of potential bull flags for today's pullback.

Jeff Bailey : 1/3/2007 1:20:09 PM

01:00 Internals found at this Link

Marc Eckelberry : 1/3/2007 1:19:28 PM

Bulls are losing it. No surprise there. YM wedge R is at now at 12640 and it was sold on that last bounce. Again, a close above 12626 is important for bulls. ER drops 800 and NQ loses 20 dma.

Keene Little : 1/3/2007 1:18:07 PM

We're continuing to chop our way lower from this morning's highs so it still looks like this will resolve to the upside. But I'm wondering if we'll get a big pullback today, even wiping out most of today's gains. That kind of drop would certainly pull in the bears and give the Boyz the fuel to launch this again tomorrow.

Jeff Bailey : 1/3/2007 1:03:16 PM

01:00 Market Watch found at this Link

Jeff Bailey : 1/3/2007 12:55:00 PM

Royal Dutch Shell Class A (NYSE:RDS.A) $70.45 -0.48% Link ... announces that on 3 January, 2007 it purchased for cancellation 635,000 "A" Shares at a price of 26.82 euros per share. It further announces that on the same date it purchased for cancellation 60,000 "A" Shares at a price of 1807.60 pence per share.

Following the cancellation of these shares, the remaining number of "A" Shares of Royal Dutch Shell plc will be 3,694,460,000.

As of 3 January, 2007 2,759,360,000 "B" Shares of Royal Dutch Shell plc were in issue.

Holders of A Shares and B Shares are entitled to one vote per share.

Marc Eckelberry : 1/3/2007 12:50:08 PM

If interest rates hold a rise, I would be tempted with an ER short.

Keene Little : 1/3/2007 12:48:28 PM

With an upside target for DOW near 12630 (by the Fib projections I've discussed recently, and SPX projection to 1434, here's a chart of ES that shows a potential price pattern for this week: Link

Two equal legs up from last week's low (to give us the A-B-C move up that I've been looking for) would be at 1445 by the end of this week. That would essentially be a retest of the December high. If we've got all kinds of negative divergences associated with that high then it'll be a good long term short entry point.

But if the bulls can really launch this higher then the upper Fib projection at ES 1456.75 into the middle of January is a likely possibility. That would be near the trend line along the highs since the end of October (and briefly broken at December's high).

Jane Fox : 1/3/2007 12:46:48 PM

SAN FRANCISCO (MarketWatch) -- Ford Motor Co. (F) on Wednesday posted a 12.8% decline in December U.S. auto sales to 233,621 vehicles. Most of the weakness came from the truck side, which saw a 14% drop to 163,003 units. Ford's top selling F-Series truck handed in a 21.1% retreat to 70,580 units. Passenger cars fell 9.9%, with much of the pullback attributed to Ford cutting its Taurus line. For the full year, sales fell 8% to 2.9 million cars and trucks compared to 2005. Land Rover stood out as the only Ford brand to post higher sales in 2006.

Marc Eckelberry : 1/3/2007 12:49:48 PM

Bulls keep control if YM stays above 12626, NQ 1802 and ER 800. Speaking of ER, it's a little strange that RUT is still stuck below old trendline support, now resistance. January effect is earlier every year, since we peaked in early December.

Jeff Bailey : 1/3/2007 12:44:38 PM

CRB Index (CEC:CRY) 299.99 -2.30% Link ... (30-minute delayed)

Marc Eckelberry : 1/3/2007 12:37:27 PM

YM back in the wedge and below 12626. The Trin is still bearish at 1.1.

Marc Eckelberry : 1/3/2007 12:32:03 PM

If YM holds 12626 at the close, risk is to 12668, which would tag DOW 12600, or close enough. But that is a big if with retail numbers on tap tomorrow.

Jeff Bailey : 1/3/2007 12:30:14 PM

Swing trade put option alert ... for two (2) of the PetroChina PTR Feb $130 Puts (PTR-NF) at the offer of $2.35.

PTR $138.22 -1.81% Link ... no stop, target $122.

Marc Eckelberry : 1/3/2007 12:30:02 PM

YM 12626 is where bulls should step in if they are believers.

Marc Eckelberry : 1/3/2007 12:29:01 PM

I don;t know, Jane. There were billions of dollars on stanby orders at open, as the press pushed equities all weekend long. The question will be what will the big guys do at the close, not what retail does at the open, especially on a day with mixed news.

Jane Fox : 1/3/2007 12:28:58 PM

US $ in rally mode while Gold and Oil are falling. Gold has fallen from a high of 646.50 to 627.50. Oil is now at 58.50/brl.

Marc Eckelberry : 1/3/2007 12:26:34 PM

I would bet YM saw the highs. Actually, I did bet...

Jane Fox : 1/3/2007 12:25:46 PM

Market is feeling heavy but I'm telling ya' the AD volume is saying don't get fooled. The AD volume can be wrong but it is right a lot more often than wrong.

Jeff Bailey : 1/3/2007 12:23:48 PM

General Motors (GM) $30.00 -2.34% Link ... Last years top % gainer among Dow components. Bank of America downgraded to sell from neutral, based on lower market share and an expected decline in new product volume.

Jeff Bailey : 1/3/2007 12:21:56 PM

Merck (MRK) $44.798 +2.70% Link ... "2007 Dow Dog" gets an upgrade at Bear Stearns to "outperform" from "peer perform," primarily based on higher expectations for several of its products.

Jeff Bailey : 1/3/2007 12:19:10 PM

Wal-Mart (WMT) $47.58 +3.03% Link ... The company is revamping the scheduling of its work force, moving to a new computerized scheduling system based on the number of customers in stores at any time.

Jeff Bailey : 1/3/2007 12:16:59 PM

Home Depot (HD) $41.41 +3.11% Link ... Home Depot's board and Chairman and Chief Executive Robert Nardelli have agreed that he should leave the company, and he will take a $210 million severance package with him.

Jeff Bailey : 1/3/2007 12:15:44 PM

UAL Corp. (UAUA) $46.86 +6.50% Link ... Calyon raises UAL to "add" from "neutral," citing what it sees as "good prospects" in 2007.

Marc Eckelberry : 1/3/2007 12:13:47 PM

The broader media is starting to mention the copper collapse.

Keene Little : 1/3/2007 12:12:34 PM

The market is consolidating after its spike up this morning and looks like it will press higher again. That's been this market's pattern--shoot higher out of the gates, consolidate and then do it again. One of these days that pattern will fail and catch a lot of traders on the wrong side. But for now stick with the pattern. Just don't stick with a long if this starts to break down since all those traders leaning to the long side could cause a very quick flush.

Two equal legs down in the pullback for ES is at 1434.75 and a 38% retracement of the rally off Friday's low is at 1434.50 so that is potential support. A 50% retracement is at 1432.75 and 62% is at 1431 which was this morning's support (top of the gap now).

Jane Fox : 1/3/2007 12:11:43 PM

I may have put my stop too close to the market and I have been stopped out but I see AD volume continuing to make new daily highs so I will not be going short for sure.

Marc Eckelberry : 1/3/2007 12:11:48 PM

Bonds reverse and now YM drops back in the wedge. The game going forward will be about interest rates, don't get sidetracked if you are thinking longer term.

Jane Fox : 1/3/2007 12:01:24 PM

VIX has just made a new daily low suggesting ES would make a nice move upward but that does not seem to be happening. If you are long ES you are probably wondering if you will ever get out of this so called daytrade.

Keene Little : 1/3/2007 12:01:21 PM

To show you the difference between the generals (NDX) and the troops (COMP), compare this chart of the COMP to the one I just posted on the NDX. Link

The COMP has bounced off its 50-dma and uptrend line from October 2002 whereas NDX is finding the trend line to be resistance. We'd really prefer our generals to be leading not lagging.

Jeff Bailey : 1/3/2007 11:55:06 AM

Cytokinetics (CYTK) $8.48 +13.36% Link ... Cytokinetics and Amgen (AMGN) $69.34 +1.50% Link on Wednesday disclosed plans for a strategic collaboration to develop heart failure treatments.

Keene Little : 1/3/2007 11:50:04 AM

All those upgrades on the Transport stocks by Bear Stearns (after the Trannies have been selling off pretty hard) makes me wonder if Bear Stearns has been heavy into the Trannies themselves and is looking to unload some of their inventory. Nothing like a big upgrade to get the public excited to take the stock off their hands. Nah, that wouldn't be ethical of them to do that (cough).

Keene Little : 1/3/2007 11:47:37 AM

It's amazing how they're pouring money into the DOW relative to SPX. Just since last week's lows the DOW is up the equivalent of 100 more points than SPX. That's a huge difference in such a short period of time. It's a defensive move when you see that much more money running for the safety of the bluest of the blue chip stocks.

While the techs are strong today, NDX has managed to tag its 62% retracement of its December decline and is back up for a test of its broken uptrend line from October 2002 (through April 2005 low). Link

The COMP has done a little better than that, having retraced 78.6% but today it has achieved the level where it has two equal legs up from last week's low so if this is just a corrective bounce then that one is in danger of peaking out around here.

Jeff Bailey : 1/3/2007 11:44:30 AM

C.H. Robinson Worldwide (CHRW) $43.28 +5.84% Link ... Bear Stearns upgrades to "outperform"

Jeff Bailey : 1/3/2007 11:43:03 AM

Old Dominion Freight Line (ODFL) $25.74 +6.93% Link ... Bear Stearns upgrades to "Peer Perform"

Jeff Bailey : 1/3/2007 11:41:29 AM

J.B. Hunt Transport (JBHT) $22.52 +8.42% Link ... Bear Stearns upgrades to "outperform"

Marc Eckelberry : 1/3/2007 11:40:41 AM

The ISM numbers should not be met with a continued sell-off in copper. Unless of course, it is forming a bottom from deeply oversold levels. Keep an eye on it and interest rates.

Jeff Bailey : 1/3/2007 11:38:55 AM

Rambus (RMBS) $19.85 +4.86% Link ... Signed a licensing agreement with Qimonda (QI) $18.22 +4.05% Link , a provider of DRAM memory products to be used in Qimonda's game consoles, digital televisions, set-top boxes and PC graphics.

Marc Eckelberry : 1/3/2007 11:36:55 AM

ZB is now red (30 year bonds). The upward trend in yields does not seem to be in danger.

Marc Eckelberry : 1/3/2007 11:34:18 AM

Copper is now below May levels and loosing April bounce support. The drop is now 7.5%.

Keene Little : 1/3/2007 11:27:17 AM

It's probably way too early to interpet today's move down in commodities as meaning much but one of the concerns that some are starting to talk about is the 'D' word again--deflation. In a deflationary environment all asset classes, including commodities (which includes gold) will decline in value. But today's move may be more US dollar related--the dollar is up and attempting to break its downtrend line from October again. It might do it this time. Gold has made a big reversal this morning and has now gone negative on the day.

Marc Eckelberry : 1/3/2007 11:23:04 AM

Commodities are looking bleak. This whole day is not telling me to be long equities. Good long day for daytraders, but I am scaling out even more of equity longs. I don't care if it leaves without me.

Jeff Bailey : 1/3/2007 11:21:38 AM

11:00 Internals found at this Link

Jane Fox : 1/3/2007 11:16:35 AM

This may be a very good spot for a long ES trade with a stop at 1436.00, 2 ticks below the last swing low.

Jane Fox : 1/3/2007 11:15:47 AM

I would be using the dips to get long.

Marc Eckelberry : 1/3/2007 11:18:43 AM

Gold is finally going south. Commodities are doing poorly on the first day of the year. Watch copper, it is often an indicator of upcoming recesssions (HG, now down 6.5%).

Keene Little : 1/3/2007 11:11:14 AM

We could get a minor new high for today's rally and then start a deeper pullback. For a pullback target, whether from this morning's high or a little higher, I'd look at a 38-62% retracement of the rally off Friday's low. The top of this morning's gaps could continue to act as support.

Marc Eckelberry : 1/3/2007 11:03:53 AM

Targeting QM 58.05.

Jeff Bailey : 1/3/2007 11:02:57 AM

11:00 Market Watch found at this Link

Jeff Bailey : 1/3/2007 10:55:11 AM

MIVA, Inc. (MIVA) $3.83 +3.31% ... jumped as high as $4.67 on news of service pact with Google (GOOG)

Marc Eckelberry : 1/3/2007 10:48:10 AM

The VIX is not dropping much from the critical 12 level, even though the DOW is making new all time highs. That is because ES is relatively weaker than the rest. Bonds are very close to reversing. Gold refuses to drop even though oil is down at 59 and the dollar is rising. It is bullish that techs and small caps are leading, but YM traders should be careful.

Jane Fox : 1/3/2007 10:39:32 AM

SAN FRANCISCO (MarketWatch) -- Massachusetts Gov. Mitt Romney said he is forming an exploratory committee to run for president, according to media reports Wednesday. A spokesman for Romney said the paperwork would be filed late Wednesday in Washington with the Federal Election Commission, the Associated Press reported. The formation of the committee allows him to raise and spend money for a presidential run. Wednesday is Romney's last day in office as governor of Massachusetts.

Keene Little : 1/3/2007 10:33:35 AM

"Dow industrials start 2007 with triple-digit rally to all-time intraday high." That was just posted on MarketWatch. They're not wasting any time declaring new DOW highs. Keep sucking in the sheeple. If the big gains today hold from here into the close then it will be a bullish statement but I'm waiting to see if distribution kicks in. It may not though--if a lot of money is coming into mutual funds then this could continue for a few days.

Jeff Bailey : 1/3/2007 10:31:29 AM

Q1 2007 Circuit-Breaker Levels Link

Jane Fox : 1/3/2007 10:30:35 AM

These are about as bullish as you can get. Well I guess the TRIN below 1 would help but it's tajectory is important today. Link

Marc Eckelberry : 1/3/2007 10:29:07 AM

Bonds could reverse as the prospects for a rate cut dies with the ISM numbers. Watch TNX and the 4.7% level this week, or even today.

Jane Fox : 1/3/2007 10:28:50 AM

* Feb. crude contract taps $59.30, lowest level since Nov. '05
*Feb. crude last down $1.70 at $59.35/brl in NY

Keene Little : 1/3/2007 10:26:58 AM

The bulls are punching right through resistance levels so it's not a time to bet against them. But I'm not so sure we'll see this hold up. I still think we're going to get a steep pullback before pressing higher.

Jane Fox : 1/3/2007 10:26:58 AM

Crude inventories are supposed to be out at 10:30 today but with the holiday and a day off for Ford's funeral I'm not sure when they will be out this week.

Jane Fox : 1/3/2007 10:25:43 AM

Well 2007 is certainly starting off with a bang. Link

Jeff Bailey : 1/3/2007 10:22:53 AM

Forex Currency Link

Jeff Bailey : 1/3/2007 10:21:35 AM

Dollar Gains, Euro Dips Below $1.32 After ISM Data

DJ- The dollar is extending earlier gains after the release Wednesday morning of a U.S. manufacturing report that exceeded market expectations.

The Institute for Supply Management's December index came in at 51.4, compared with a consensus forecast of 50.0 and November's 49.5.

The euro dipped below the $1.32 level minutes after the report came out, while the dollar was trading near two-month highs against the yen at around Y119.48.

Recently, the euro stood at $1.3190 from $1.3276 late Tuesday, while the dollar was at Y119.44 from Y118.85 late Tuesday, according to EBS. The euro was at Y157.48 from Y157.56 late Tuesday. The dollar stood at CHF1.2235 from CHF1.2133, while the U.K. pound was at $1.9519 from $1.9728 late Tuesday.

Keene Little : 1/3/2007 10:20:28 AM

The broken uptrend line from December 1st is also being retested here near DOW 12565.

Jane Fox : 1/3/2007 10:20:10 AM

SAN FRANCISCO (MarketWatch) -- EarthLink Inc. (ELNK) said Wednesday President and Chief Executive Garry Betty passed away Tuesday due to complications from cancer. Betty was 49. The Atlanta-based Internet service provider said Mike Lunsford will remain interim CEO, a position he has held since Nov. 27. "We are greatly saddened by today's news," said Robert Kavner, EarthLink's chairman, in a statement. "Garry was instrumental in building EarthLink into the company it is today. He leaves behind a tremendous record of achievement and an accomplished management team committed to pursuing his strategic vision."

Jeff Bailey : 1/3/2007 10:19:55 AM

EarthLink CEO Garry Betty Dies

DJ- EarthLink Inc. (ELNK) said Wednesday President and Chief Executive Garry Betty passed away Tuesday due to complications from cancer. Betty was 49 years old.

The Atlanta-based Internet service provider said Mike Lunsford will remain interim CEO, a position he has held since Nov. 27.

ELNK $7.20 +1.40% Link ...

Jane Fox : 1/3/2007 10:19:38 AM

ISM report certainly helped lift the markets.

Jane Fox : 1/3/2007 10:18:55 AM

WASHINGTON (MarketWatch) - The U.S. manufacturing sector expanded again in December following a rare contraction in November, the Institute for Supply Management reported Wednesday.

The ISM manufacturing sentiment index rose to 51.4% from 49.5% in November. Readings over 50% indicate the sector is growing. Economists surveyed by MarketWatch were expecting the index to remain below 50% at 49.5%.

It was the first gain in the index since July. The ISM index is considered to be one of the best real-time economic indicators. The Fed has always cut interest rates when the ISM goes below 50% for an extended period. The index had been above 50% for 42 consecutive months before November's slide to 49.5%.

New orders and production rose, while inflationary pressures eased. Employment was stagnant

Keene Little : 1/3/2007 10:18:22 AM

The DOW has reversed back up and is now tagging the top of its ascending wedge. If you feel brave you can try shorting it here.

Jane Fox : 1/3/2007 10:18:15 AM

Rescue team as arrived. This is why I have been warning about been short. TICKS +800. I bet we see a TICKS +1000 today.

Jane Fox : 1/3/2007 10:09:28 AM

The markets are all over the place and YM and ER have made new daily lows but these are still strong so I would not be flirting with shorts yet. Link

Jeff Bailey : 1/3/2007 10:03:08 AM

10:00 Market Watch found at this Link

Keene Little : 1/3/2007 10:00:08 AM

At 12553 the DOW just about tagged the top of its ascending wedge that I showed below (11:27 PM) so a pullback should be expected after the early morning spike up. It could be a fairly sharp pullback as part of what I think will be a day of more whipsaws. But I don't think the top is in.

Jeff Bailey : 1/3/2007 9:50:05 AM

Weekly/Monthly Pivot Matrix found at this Link

Keene Little : 1/3/2007 9:40:38 AM

They're liking them techs! Small caps are right behind on this push up. That's a bet on higher beta stocks doing well in January. We'll see.

Jane Fox : 1/3/2007 9:38:22 AM

No a time to be short here. AD line and volume are strong.

Jane Fox : 1/3/2007 9:34:18 AM

Interestingly VIX is well above its PDH but is falling.

Jane Fox : 1/3/2007 9:33:34 AM

AD line +636 and AD Volume well above 0.

Keene Little : 1/3/2007 9:30:36 AM

A drop out of the gate could be a good buying opportunity if the normal pattern is in play today (early head fake move).

Keene Little : 1/3/2007 9:20:31 AM

The overnight action in the futures was more or less a slow drift lower from the big pop they got Tuesday morning. A retest of the highs would seem logical and that would be a 5-point ES run. How much of a dip we get first is hard to say but again be careful about increased volatility (whipsaws) today. It's very typical for the first day and first weeks of January.

As for the economists and their projections for the housing market and for our economy, I continue to believe they're a better contrarian indicator than anything else.

Jane Fox : 1/3/2007 9:19:10 AM

Notice the indirect relationship between the Gold and US$ charts. Sort of like the VIX and the ES charts isn't it? Link

Marc Eckelberry : 1/3/2007 9:18:12 AM

YM gap open is 12612. 38.2% fill is 12585, also R1. My advice is to watch WMT today once the heavy short covering is over with. The figures look great on headlines, but it comes after a big drop, so it was easy to make. Furthermore, margins are at risk. Just a heads up, stay safe.

Marc Eckelberry : 1/3/2007 9:11:31 AM

They were all wrong in 2000 and 2001, Jane. Looks like they are wrong again.

Jane Fox : 1/3/2007 9:11:15 AM

ES and YM broke their respective PDHs overnight whereas ER and NQ did not. Link

Jane Fox : 1/3/2007 9:09:30 AM

This report from Lennar Corp's CEO is in stark contrast to what economist's are saying. Article after article I shave been reading of late is saying most economists think the housing bottom is in. Personally from some of the graphs John Maudlin shows in his weekly newsletter I don't think so but I'm not going to go up against the WSJ economists.

Jane Fox : 1/3/2007 9:05:07 AM

Dateline WSJ - Lennar Corp. Chief Executive Stuart Miller said he sees no signs the home-building market has hit bottom, signaling the industry could continue to face pressure on its financial results.

The Miami company also said it expects to report a fiscal fourth-quarter loss amid land-related write-downs of between $400 million and $500 million. "Market conditions continued to weaken throughout the fourth quarter, and we have not yet seen tangible evidence of a market recovery," Mr. Miller said.

Lennar said it slashed its exposure in California, where market conditions have been deteriorating. The company, along with partner LNR Property Corp., agreed to sell a 62% stake in their LandSource joint venture, whose primary investment, Newhall Land and Farming, owns 15,000 acres in the Santa Clarita Valley.

Lennar and LNR, a holding of Cerberus Capital Management LP, each will receive $660 million for the stake from MW Housing, which is co-managed by real-estate investment-management firm MacFarlane Partners and includes the California Public Employees' Retirement System. Lennar will continue to get management fees and retain a 19% stake in the partnership. "It sends a signal that they don't want to have their capital at risk in Southern California for the next few years," said Raymond James Financial Inc. analyst Rick Murray. He sees the sale as a sign the company doesn't believe a rebound in California will happen in the near future.

Jane Fox : 1/3/2007 8:59:28 AM

Goldman cuts oil services sector rating to neutral

Jane Fox : 1/3/2007 8:58:18 AM

WASHINGTON (MarketWatch) -- U.S. private-sector employment fell by 40,000 in December, the first decline in nearly four years, according to the ADP employment report released Wednesday.

"These findings suggest an abrupt slowing of employment," in contrast to relatively strong job growth averaging 121,000 over the past three years, said Joel Prakken, chairman of Macroeconomics Advisers, the economic firm that computes the ADP index from anonymous payroll data supplied by Automatic Data Processing Inc.

The last time that the ADP report showed a decline in jobs was in April 2003, coinciding with the pre-war economic slump.

The ADP report's results are in sharp contrast to the upbeat projections of economists for the government's nonfarm payrolls survey to be released on Friday. Economists surveyed by MarketWatch are expecting payrolls -- both public- and private-sector -- to grow by about 103,000 for December.

Together with an estimated 15,000 or so additional government jobs that aren't included in the ADP index, the report suggests nonfarm payrolls likely fell by about 25,000 in December. That would be the first decline since July 2003.

Marc Eckelberry : 1/3/2007 3:52:46 AM

12600 does look like the new level they want to hold. If so, we could be headed to 12626, weekly R1. ES weekly R1 is 1438 and if that is broken, confluence weekly R2 and monthly R1 is a possible target at 1447/1449. The open usually tests overnight lows and highs and most of the data is coming at 10 AM, so don't jump in quite yet. Also note that January has been down 4 times out of 7 this decade (2000, 2002, 2003 and 2005).

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