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Jeff Bailey : 2/8/2007 12:27:49 AM

Walt Disney (DIS) $35.48 +0.82% ... Last tick extended was $36.20.

Earnings Press Release Link

Consensus was for EPS of $0.39 on Revenue of $9.51B

Keene Little : 2/7/2007 10:08:53 PM

Thursday's pivot tables: Link and Link

OI Technical Staff : 2/7/2007 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The Market Monitor has been archived.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.

Tab Gilles : 2/7/2007 8:40:56 PM

Been some time since I've updated the $NAHGH/$NALOW/$NDX chart. Link

As per 1/8/07 11:33AM post recapping USPIX & UCPIX cost basis.

USPIX Profund UltraShort OTC cost $13.05, closing price $12.83 down 1.69% Link

UCPIX Profund UltraShort SmallCap cost basis $13.42 closing price $12.54 down 6.55% Link

Jeff Bailey : 2/7/2007 8:20:20 PM

General Motors "Barks Loudest" In 2007's Pack of Dogs

With 25 trading sessions for 2007 now complete here is a quick review of this year's Dow Dogs (see also 12/29/06 MM) Link

2006's Worst Performing Dow Components were INTC -19.22%, WMT -2.73%, HD -1.42%, MMM -0.45% and AA +1.21%

Jeff Bailey : 2/7/2007 5:56:47 PM

NYSE Summation ($NYSI) +876.54 Link ...

Jeff Bailey : 2/7/2007 5:55:26 PM

NASDAQ Summation ($NASI) at +115.67 Link

Jeff Bailey : 2/7/2007 5:52:04 PM

Closing Internals found at this Link

Jeff Bailey : 2/7/2007 5:48:09 PM

Good Gravy! ... SPX NH/NL ends 82:0 ; easily surpassing the 67:0 from 12/15/06.

Just more than a week ago I felt, based on observation that the "inchworm" was coiling with the tail holding, yet the head moving lower.

SPX NH/NL was running roughly 24:1.

NYSE NH/NL was running 166:8 and NASDAQ NH/NL 165:40.

Jeff Bailey : 2/7/2007 5:23:28 PM

March Crude Oil futures (cl07h) settled down $1.17, or -1.99% at $57.71.

Jeff Bailey : 2/7/2007 5:20:35 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 2/7/2007 4:51:39 PM

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

Ahead of today's 10-year auction, decided to sell a covered call against the long TLT position. Raised stop on TLT to $86.80.

Keene Little : 2/7/2007 4:43:23 PM

For those following the DOW, here's a quick update. I haven't been able to do the daily and 120-min charts for it like I've done for the others but here's a 30-min chart similar to the one we've been following for SPX. The upside Fib target near 12703 was missed by about 2 points. Close enough for government work? We'll find out tomorrow. This afternoon's bounce should fail to make a new high and that's what I'd use for a stop level if you're playing YM. Link

Jeff Bailey : 2/7/2007 4:34:49 PM

EIA's This Week In Petroleum Link

A MUST read for ANY trader or investor of ANYTHING.

Changes, and adapting to that change.

Keene Little : 2/7/2007 4:26:29 PM

With the Fib target for the RUT at 816.16-816.332, and the closing price (and high) at 816.20 it could be interesting tomorrow. I've found the RUT often overshoots its Fib levels so I don't look for this one to necessarily nail its level but it does say heads up for a potential reversal now. If it keeps heading higher tomorrow morning then the next higher Fib target is just under 824.

Jeff Bailey : 2/7/2007 4:10:14 PM

Now we'll see if the MARKET agrees with it!

That's the true test.

Jeff Bailey : 2/7/2007 4:07:40 PM

My mindset too Mr. Santelli. Probably see less volatility in interest rates (Treasury YIELDs) in coming sessions.

Excellent commenatry. Especially since I agree with it! ;)

Keene Little : 2/7/2007 4:05:47 PM

ES 1455 got tagged so that's a good short entry. Proof will be tomorrow since it will have to drop out of the gate. Risk is to a new high above today's 1457.75 which keeps risk relatively small. Good luck if you're trying it.

Jeff Bailey : 2/7/2007 4:03:28 PM

Intl. Business Machines (IBM) $99.54 -0.01% ...

Jeff Bailey : 2/7/2007 4:03:23 PM

DIA $126.67 +0.01% ... Feb Call OI is heaviest at $126 (15,656). Feb Put OI is heaviest at $125 (49,878), then $126 (21,281).

Recent VXO and VIX action suggests another overly NAKED call position.

Keene Little : 2/7/2007 4:00:59 PM

If you're short the techs I'd stick with it and use today's high as your stop (that's true for DOW and SPX as well). Update on NDX bearish chart: Link

Jeff Bailey : 2/7/2007 3:57:34 PM

YM 12,696 ... smack in the middle of today's range. 50% dynamic here.

Jane Fox : 2/7/2007 3:56:12 PM

Something's happening here. Apple Inc.'s computer-meister is plotting something big. Really big. Like ... maybe ... new Beatles tracks we haven't heard ... which will be sold through iTunes and will not be protected by digital rights technology.

There was much speculation Apple (AAPL) would use last month's MacWorld to announce the addition of Beatles music to iTunes. Instead, Steve Jobs held up an iPhone, loaded with Beatles tunes, while Beatles graphics and music play onstage. Presumably the tracks came from his CD collection. (Yeah, right!)

Keene Little : 2/7/2007 3:56:00 PM

As a reminder, here's the bearish possibility for the RUT, showing the potential significance of the 816 area. Link

Jane Fox : 2/7/2007 3:54:28 PM

NEW YORK (MarketWatch) -- With a market capitalization likely to reach $7 billion or more in its closely watched initial public offering on Friday, Fortress Investment Group could easily meet the size requirements of the storied S&P 500 Index.

Inclusion in the index often boosts volume, demand and price levels as fund managers and ETFs buy into S&P index newcomers. As the first major hedge fund to stage an initial public offering in the U.S., Fortress Investment (FIG) plans to raise about $600 million by offering 34.29 million shares at $16.50 to $18.50 a share with underwriters Goldman Sachs and Lehman Brothers.

With about 400 million shares outstanding after the IPO, Fortress Investment Group will carry a market cap of more than $7 billion if it prices the midpoint of its estimated range.

That's well above the minimum level of about $4 billion to $4.5 billion in market cap for components of the S&P 500 ($SPX) .

Keene Little : 2/7/2007 3:53:30 PM

It looks like they're going to keep the DOW and SPX pinned near the flat line. Need to keep people interested in buying so that the inventory handoff can continue. Investors are running into the small caps--watch the 816 area for the RUT since that's a Fib projection for its 5th wave. It too may be ready to roll over tomorrow.

Jeff Bailey : 2/7/2007 3:52:48 PM

Dreyfus High Yield (DHF) $4.33 (unch) ... after dividend distribution.

Pacholder High Yield (PHF) $10.16 -0.39% ...

Jeff Bailey : 2/7/2007 3:50:34 PM

RUT.X 815.58 +0.63% ... best levels of session. WEEKLY R1 just ahead at 817.45.

Jeff Bailey : 2/7/2007 3:48:45 PM

US Oil Fund (USO) $48.29 -1.86% ... session low 2-cents above its WEEKLY Pivot.

Jeff Bailey : 2/7/2007 3:47:41 PM

VIX.X 10.40 -2.34% ... hit weekly Pivot and that was it.

7 days, 7 days until option expiration.

Keene Little : 2/7/2007 3:47:07 PM

Two equal legs up for the bounce in ES is at 1455 and that would also be a 62% retracement of this afternoon's decline. That would make for an even better short entry if you can get that.

Jeff Bailey : 2/7/2007 3:46:59 PM

YM 12,692 ... not even close to WEEKLY Pivot on that little decline.

Jeff Bailey : 2/7/2007 3:41:50 PM

Euro/Yen Cross Rates PnF chart at this Link

Jeff Bailey : 2/7/2007 3:28:00 PM

Kroger (KR) $26.10 +1.47% ... and another 52-weeker.

Jeff Bailey : 2/7/2007 3:14:16 PM

03:00 Internals found at this Link

Keene Little : 2/7/2007 3:13:31 PM

A bounce back up to the broken uptrend line from the end of January would get SPX back up to about 1450 (ES 1454) which is also a 50% retracement of this afternoon's decline. That's the first place I'd look for a short entry since the next leg down should be a good one.

Jeff Bailey : 2/7/2007 3:02:44 PM

03:00 Market Watch found at this Link

Jane Fox : 2/7/2007 2:48:24 PM

AD line has now dropped to +145 and AD volume is falling quickly and is below 0.

Keene Little : 2/7/2007 2:48:23 PM

Tthe DOW has now dropped below 12634, yesterday's low, and that confirms the 5th wave up from that low is finished. While it's possible we're still in a larger consolidation pattern from last Friday, and therefore warrants the usual care in risk management, the odds favor the fact that we've put in a very significant high now.

Keene Little : 2/7/2007 2:40:17 PM

The next good sized bounce, be it this afternoon or tomorrow morning will be a good setup to get short. Don't worry if you missed the high today and don't be in a hurry to chase this lower. We'll let a setup come back to us.

Jeff Bailey : 2/7/2007 2:40:08 PM


DJ- Energy company's shares drop 7% after it agrees to be acquired by Great Plains Energy in cash and stock deal valued at $1.7 billion and agrees to sell assets to Black Hills for $940 million. Hedge fund Pirate Capital will vote against deal.

ILA $4.34 -7.06% Link

GXP $32.15 +0.31% Link ...

Keene Little : 2/7/2007 2:39:04 PM

Clearly looking more bearish now. This pullback is well beyond what a small correction would be. Let the selling begin...

Jeff Bailey : 2/7/2007 2:34:04 PM

Excellent commentary/analysis by CNBC's Rick Santelli Link regarding 10-year auction.

Jeff Bailey : 2/7/2007 2:29:34 PM

iShares Lehman 20-year (AMEX:TLT) up 20 cents, or 0.22% at $88.00.

Jeff Bailey : 2/7/2007 2:28:56 PM

30-year Yield ($TYX.X) down 1.4 bp at 4.856% ...

Jeff Bailey : 2/7/2007 2:28:18 PM

10-year Yield ($TNX.X) down 1.5 bp at 4.750%.

Keene Little : 2/7/2007 2:27:34 PM

After this fairly sharp drop, if we now get a bounce that retraces some Fib portion of the drop and then proceeds to new lows I'd short it. If this is the end of the consolidation we should see price work its way higher again. But if the high is already in then a bounce will be followed by new lows for this move down and you'll want to short the breakdown, and then add to your short on rallies.

Jeff Bailey : 2/7/2007 2:26:05 PM

US 10-year Note Auction:

DJ- The U.S. Treasury awarded $13.00 billion in 10-year notes at Wednesday's auction at a high rate of 4.740%.

The Treasury received bids totaling $31.33 billion and accepted $13.00 billion, including $57.15 million of noncompetitive tenders, up from $12.89 million in noncompetitive tenders accepted at the previous 10-year note auction on Dec. 13, 2006.

The Treasury received no bids from foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 2.41, Treasury said.

Tenders submitted at the high yield were allotted 62.75%.

The dollar price was 99.092517 and the coupon rate was set at 4.625%, or 4 5/8%.

The median rate was 4.716%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 4.670%.

Accepted indirect bids for the 10-year note were 30.0% of the total, up from 12.6% in December.

The high rate was up from 4.580% at the previous 10-year note auction. The high rate was the highest since 4.810% at the 10-year note auction on Sept. 12, 2006.

The issue is dated Feb. 15, 2007, and matures on Feb. 15, 2017.

The CUSIP number on the 10-year notes is 912828GH7.

Tab Gilles : 2/7/2007 2:21:36 PM

Weekly EIA Report Link

Keene Little : 2/7/2007 2:17:35 PM

SPX and ES are about to test their uptrend lines from January 26th. Last stand for the bulls to get one more new high.

Jeff Bailey : 2/7/2007 2:17:25 PM


DJ- Treasury secretary doesn't believe Congress must increase taxes to raise enough money to fund a permanent fix to Alternative Minimum Tax. Also warns critics of Fannie Mae and Freddie Mac they may disappointed by deal to tighten their regulation.

Jeff Bailey : 2/7/2007 2:15:04 PM


DJ- Appliance maker posts net income of $109 million, or $1.37 a share. Earnings from continuing operations are $1.67 a share. Revenue jumps 25% to $4.95 billion. Analysts expected earnings of $1.44 a share.

WHR $92.05 -3.00% Link ...

Jeff Bailey : 2/7/2007 2:13:28 PM


DJ- Shares rise 5% after world's biggest miner surprises investors with a $10 billion buyback that returns record profits to shareholders while still leaving enough in reserve for global expansion. BHP also announces retirement of CEO Chip Goodyear.

BHP $44.01 +5.51% Link ...

Jeff Bailey : 2/7/2007 2:11:32 PM


DJ- Shares rise 5% after satellite-TV provider posts net income of $356 million, or 29c a share. Revenue rises 16% to $4.18 billion. Results helped by a jump in subscriptions and a drop in customers discontinuing service.

DTV $25.22 +5.21% Link ...

Keene Little : 2/7/2007 2:09:23 PM

If this is just a pullback to finish the consolidation this is about as far as it can go (SPX 1450). Any further drop starts to dramatically improve the odds that a high is already in.

Jeff Bailey : 2/7/2007 2:08:51 PM


DJ- Insurer posts 4Q net income of $232 million, or $2.28 a share, driven by higher medical memberships. Revenue flat at $4.21 billion. Adjusted income of $2.61 blow past analysts' mean estimate of $2.27.

CI $139.77 +1.93% Link ...

Jane Fox : 2/7/2007 2:08:10 PM

TICKS -800 and all long trades should be off the table.

Jeff Bailey : 2/7/2007 2:06:19 PM


DJ- U.S. productivity rises 3% on the back of a sharp increase in output, easing pressure on labor costs and suggesting the economy can still generate strong growth without inflationary pressures. Economists expected gain of 2.1%.

Jeff Bailey : 2/7/2007 2:04:53 PM


DJ- Shareholders overwhelmingly approve Blackstone's sweetened $23 billion bid for Equity Office. Vote comes hours after Vornado takes its $56 a share in stock and cash offer off the table. Bidding war forced Blackstone to eventually boost its original $48.50 a share bid to $55.50. Takeover could be completed by Friday.

VNO $134.48 +4.88%

EOP $55.46 -1.05%

Jeff Bailey : 2/7/2007 1:55:59 PM

EIA's Crude Oil Days Supply table at this Link ... gets updated later in the day.

Jeff Bailey : 2/7/2007 1:55:48 PM

EIA Capacity Table that I keep track of at this Link

On the far right is my (Jeff Bailey's) Crude Oil Days of Supply. It hasn't matched the EIA's exactly, but mirrors their reading on a week-to-week basis.

Since I'm a firm believer that the MARKET is all-knowing and is forward-looking, the USO prices are benchmarks to the EIA week ended data.

Keene Little : 2/7/2007 1:51:21 PM

The reason I'm suggesting caution about the little decline here is because I didn't see a small 5-wave move up from today's consolidation to tell me we put in the final high. It looks like we're still in the consolidation which means we haven't had the "one more new high" yet. That last high, especially on such short time frames, could be a no-show but if you're trading futures with a relatively tight stop I think it's better to wait for evidence of a high (and then short a bounce) rather than chase a move down. It's just a little more conservative approach and a little less prone to whipsaw.

Jeff Bailey : 2/7/2007 1:44:59 PM

US Oil Fund (USO) $48.50 -1.44% ... Friday's close (for week ended 02/02/07) was $49.33.

Jane Fox : 2/7/2007 1:31:03 PM

Getting more info on the health care story. I think that it will take Corporate America to make the changes we need and this may be the first step.

Jane Fox : 2/7/2007 1:29:51 PM

WASHINGTON (MarketWatch) -- An unlikely combination of business executives, labor leaders and public-policy gurus joined together Wednesday to write an obituary for the nation's employer-based health-care system and call for changes that would ensure universal and affordable coverage for all Americans by 2012.

"We need to change the current system and we need to change it now," said Lee Scott, chief executive of Wal-Mart Stores Inc. (WMT) , during a news conference launching a campaign that also features the Service Employees International Union, Intel Corp. (INTC), Kelly Services Inc. (KELYA) , AT&T Inc. (T) and the Communications Workers of America union.

The "Better Health Care Together" campaign offers no specific policy proposals, but participants endorsed a set of principles that includes calls for every American to have affordable health insurance, a dramatic improvement in the value that the nation receives for every dollar spent on health care, and a requirement that businesses, governments and individuals all contribute to managing and financing "a new American health-care system."

The campaign brings Wal-Mart's Scott together with one of the giant retailer's sharpest critics: SEIU President Andy Stern, who also chairs the board of "Wal-Mart Watch," a group that has regularly blasted the Bentonville, Ark.-based retailing giant and urged it to change its labor policies.

Keene Little : 2/7/2007 1:28:49 PM

A quick drop from the current level would not necessarily be the start of the decline so be a little careful if it happens. Using SPX/ES look at the consolidation on the 30-min chart from Friday and now look at a 5-min chart--notice the potential similarity (fractal pattern). The quick thrust down yesterday was followed by the current leg up and the same thing could happen on the shorter 5-min time frame.

If SPX makes it down through 1450.60 (ES 1454.50) then that would increase the odds that we've seen a high. Until then it's possible a quick move down here will be an ending move to today's sideways correction rather than the start of the decline.

Jeff Bailey : 2/7/2007 1:24:26 PM

Broadcom (BRCM) $33.97 +6.15% Link ... also challenges bar chart downward trend from March06 relative high to recent 11/20/06 releative high.

Not a dividend payer, so StockCharts' PnF matches that of Dorsey's.

Earnings after the bell. Consensus is for EPS of $0.31 on Revenue of $910.56M.

Keene Little : 2/7/2007 1:17:51 PM

I've got an EW count, Fibs, trend lines and cycle studies that tell me this is as good a place as any I've seen for a major market high. I'm trying real hard not to drool all over my keyboard. I won't pound the table very often about a setup but this is one of them. If you're long and not ready to get short, at least protect your positions.

Jane Fox : 2/7/2007 1:17:06 PM

ORLANDO, Fla. (MarketWatch) -- The U.S. housing market has not reached bottom and will likely not begin to recover until the middle of this year, three housing economists said Wednesday.

The weakness will extend to existing-home and new-home sales and housing starts as well as to home prices, which are likely to show their first full-year decline nationally since records have been kept, the economists told home builders at their annual convention here.

I don't think we've seen the bottom," said David Berson, chief economist for Fannie Mae. "We're going to see a much bigger drop in investor demand this year. But by the second half of the year the market will stabilize, if investors pull out quickly."

Berson said he expects the home-price index calculated by the Office of Federal Housing Enterprise Oversight will show a nationwide decline in values for 2007, the first time that will have happened since the data began being collected in 1975. Unlike other measures, the OFHEO data measure the price changes on the same homes over time, meaning the index is less likely to be skewed by the types and locations of sales

Jeff Bailey : 2/7/2007 1:16:00 PM

01:00 Internals found at this Link

Jane Fox : 2/7/2007 1:13:52 PM

NEW YORK (MarketWatch) - An afternoon auction of $16 billion in new 10-year Treasury notes attracted strong demand, including an above average 30% indirect bid, the carefully monitored category that includes foreign central banks. The auction also produced a bid-to-cover - or bids rendered to bids accepted - ratio of 2.41, which exceeded ratios in other recent 10-year notes sales. The high yield was 4.740% and the median yield was 4.716%. The 10-year benchmark note last was up 4/32 at 99-1/32 with a yield ($TNX) of 4.750%.

Keene Little : 2/7/2007 1:13:51 PM

I'm going to refer to this chart in tonight's Market Wrap as I make a case for a market top of signficance but I wanted to show it to those who don't get those Wraps. This chart is one that was done by Elliott Wave International and shows the time relationship between the major turn dates since the low in 2004. Notice the same length of time in the rally legs--141 day. The next turn date by this cycle study in February 8th +/- 1 day. We're there. Link

Keene Little : 2/7/2007 1:07:21 PM

As for an additional short entry point, and perhaps a little more conservative (rather than attempting to pick a top), once we get a new high followed by a break below the lows near 12:00 today that would be confirmation that the rally is done. Just use your normal risk (position size and stop level) and don't make any assumptions--stay disciplined.

Jeff Bailey : 2/7/2007 1:04:41 PM

01:00 Market Watch found at this Link

Keene Little : 2/7/2007 1:04:02 PM

Notice on the 5-min chart I just posted where the MACD peak is for wave-(iii). If we get a new high and a rollover with a lower MACD peak for wave-(v) then that will help confirm the wave count and add to your confidence level to be in a short play.

Keene Little : 2/7/2007 1:00:12 PM

Using a regression channel on the move up from yesterday afternoon, along with the Fibs, I still see SPX 1453-1455 as a key area for a potential high. But I'd like to see it head for that new high now. Link

Jeff Bailey : 2/7/2007 1:01:02 PM

Caterpillar Options Montage at this Link

PnF chart from Dorsey/Wright on 01/03/07 (not adjusted for CAT's dividend payments and "true" supply/demand chart) where some market participants did pay $82.00 for the stock on 05/10/06 Link

Now has two additional X's to $65.00.

Here's StockCharts.com's CAT Link , but they lower historical prices due to CAT paying dividends.

Jeff Bailey : 2/7/2007 12:47:17 PM

Caterpillar (CAT) $65.71 +2.00% ... session high has been $65.90

Jane Fox : 2/7/2007 12:43:46 PM

Here is your classic sideways move while MACD declines. This is bullish and the your highest odds trade is long. Link

Jeff Bailey : 2/7/2007 12:42:16 PM

Denver holds the highest number of foreclosures for major US cities. May contract bid/offer 134.20 x 136.60. Last Friday's close was 135.40.

Jeff Bailey : 2/7/2007 12:39:24 PM

"Bidder up" in CME's Miami housing futures for the November contract 272.80 x 273.40. Trade at 273.20 above Friday's high close.

Keene Little : 2/7/2007 12:24:44 PM

We've certainly seen enough of these sideways consolidations as we've been in for the past 90 minutes. And we know which way they usually resolve--up. The sideways shuffle here could be a little 4th wave correction in the leg up from yesterday afternoon and if true then we have just "one more high" to finish the whole thing off. Assuming we get the new high, watch it carefully for the setup to get short.

Jeff Bailey : 2/7/2007 12:24:31 PM

MBA Application Table that I monitor at this Link

Incredible how sophisticated homeowners are. How do they "know" when to refinance just prior to up-ticks in a 30-year fixed? Its almost as if they actually LISTEN to the Fed and look at a chart now and then.

Jane Fox : 2/7/2007 12:15:07 PM

Now someone going to jail for some of these mortgages I certainly do agree with.

Keene Little : 2/7/2007 12:13:39 PM

And that's my political statement for the day.

Keene Little : 2/7/2007 12:13:12 PM

And the Fed needs to be kicked off the pedestal so many have placed them on. They're not doing this country any favors.

Keene Little : 2/7/2007 12:11:42 PM

I completely agree with you Jane. The more we become dependent on the government taking care of us the more we as a nation will have problems like New Orleans (which has had a highly government-dependent group of people). But I'm also acutely aware of the number of people who are not sophisticated enough financially to understand the more complex lending practices that will result in huge increases in foreclosures among people who can least afford it, especially the elderly who refinanced. I can only hope some bankers will go to jail for what they've done.

Jeff Bailey : 2/7/2007 12:11:38 PM

Caterpillar (CAT) $65.74 +2.04% ... was looking for a trade at $63.00 for a prrrrrfect long call entry point. Simply too strong at this point.

Jane Fox : 2/7/2007 12:10:51 PM

I think that last dip was the one to buy.

Jane Fox : 2/7/2007 12:06:03 PM

Keene I agree that the government should get involved with the lending mess but you know on the other hand I think citizens should take a little responsibilty on themselves. I think we need agencies like the FDA because as a citizen I do not have the capacity to investigate drugs but I sure do have the capacity to investigate the terms of my mortgage.

Jane Fox : 2/7/2007 12:02:24 PM

My family lives in Vancouver and are very very nervous.

Jane Fox : 2/7/2007 12:02:06 PM

"B.C. put on alert for huge quake" Scientists have alerted British Columbia's emergency-planning department to the possibility of a catastrophic earthquake striking the province's southwest coast next week.While the probability of a quake is still low, rapid strides in earthquake detection have given federal scientists with the Pacific Geoscience Centre on Vancouver Island greater confidence in their ability to predict when and where one will occur. Garry Rogers, a seismologist at the centre, compared the current earthquake odds to the dangers of driving a car.

Jeff Bailey : 2/7/2007 11:58:36 AM

MBA's Weekly Application Survey Link

Keene Little : 2/7/2007 11:58:31 AM

The story that Jane posted at 11:46 about Congress getting involved in the lending mess is a good thing. Unfortunately it's a bit like closing the barn door after the horses got out. I lay the blame for the predatory lending practices squarely in the lap of our Fed governors. I hope it comes back to haunt them how they let the liquidity issue get out of hand to the point where the banks literally didn't know what else to do with all the money. If someone could fog a mirrow they got a loan. There will be enough blame to go around, that's for sure.

Jane Fox : 2/7/2007 11:48:10 AM

DAteline WSJ - An unlikely coalition of business and labor, including Wal-Mart Stores Inc. and the nation's biggest labor union, which has doggedly criticized the company, announced an ambitious campaign in Washington today to promote universal health coverage.

H. Lee Scott, president and chief executive of Wal-Mart, joined Andy Stern, president of the Service Employees International Union, at a press conference to announce a campaign to win public acceptance for a set of principles on health care policy that include providing affordable health coverage to all Americans by 2012.

"What unites us here today is our shared belief that it will be a far greater America when we get affordable health care for all American," said Mr. Stern, who has been one of Wal-Mart's staunchest critics but also publicly invited CEOs to work with him on the health-care problem. "This is not just a moral problem but a major drag on American business competitiveness and job creation."

Mr. Scott said, "We put aside disagreements to drive this debate forward."

The business and union leaders laid out four main goals, including universal health-care coverage for every person in America and raising the value for every health-care dollar spent.

Marc Eckelberry : 2/7/2007 11:47:55 AM

I have to close this since I have been called to a meeting and won't be around for this tricky part. The trendline has climbed a bit so we might get another high, which would be a short, but watch NQ 1825. YM should pull back to 12714 during lunch, though.

Jane Fox : 2/7/2007 11:46:54 AM

WASHINGTON (MarketWatch) -- U.S. homeowners are facing a "crisis" thanks to predatory and irresponsible lending practices, Senate Banking Committee Chairman Christopher Dodd, D-Conn., said Wednesday.

In an opening statement before a committee hearing about predatory lending, Dodd cited statistics showing the burgeoning growth of the sub-prime lending market, and said minorities, immigrants and the elderly are frequently the victims of such loans.

"It is time for the Congress, the administration, and the lending industry to face up to the fact that predatory and irresponsible lending practices are creating a crisis for millions of American homeowners at a time when general economic trends are good," Dodd said.

Democrats in both the House and the Senate have promised to put predatory lending and other consumer issues high on their legislative agendas this year. In the House, Reps. Mel Watt and Brad Miller of North Carolina are preparing to introduce a bill that would restrict the sale of loans with high interest rates and bar certain types of fees

Jane Fox : 2/7/2007 11:45:50 AM

WASHINGTON (MarketWatch) -- The federal government likely ran a $40 billion surplus in January, twice as large as last year, as tax revenues jumped and outlays slipped on reduced spending for hurricane relief, according to a Congressional Budget Office estimate.

For the first four months of the fiscal year, the deficit totaled about $40 billion, some $58 billion less than last year. Outlays grew 2% while revenues were up 10%, CBO said.

Official figures for January will be released next week by the Treasury Department.

For all of 2007, the CBO estimates a shortfall of about $200 billion, assuming additional funds for the war but no other legislative changes. The budget deficit amounted to $248 billion, or 1.9% of gross domestic product, in fiscal 2006.

Marc Eckelberry : 2/7/2007 11:45:45 AM

Alert: Exit YM short +4.

Keene Little : 2/7/2007 11:43:25 AM

As Marc has noted, the fact that the OEX has stalled at its 62% retracement of the 2000-2002 decline is potentially very important here. These are the smart generals and they know where the line is--taking profits (distribution) is very likely going on behind the scenes and they're handing off to the troops (retail) to charge forward (and get slaughtered).

Jeff Bailey : 2/7/2007 11:43:23 AM

Bullish swing trade raise stop alert ... to $86.80 from $86.40 for the underlying iShares Lehman 20-year (AMEX:TLT) $88.08 +0.31% ...

Keene Little : 2/7/2007 11:38:12 AM

Another little Fib trick I've seen work often enough to pay attention to it, is to look at a Fib projection based on a previous move. Using this SPX 5-min chart, I've placed a Fib retracement on the move down from Tuesday's high, which SPX has now rallied above, and the 162% projection of that leg down is at 1454.39. Link

It also happens to be at the trend line along the highs since yesterday's low. If we get another leg up, that's another level I'd watch for topping. This is slightly above the 1453.38 Fib projection for the 5th wave but obviously very close.

Jane Fox : 2/7/2007 11:37:35 AM

Dateline WSJ - Partnership including AT&T, Wal-Mart, unions announce health-care reform campaign. Full article coming soon.

Marc Eckelberry : 2/7/2007 11:35:59 AM

OEX still can't get above 61.8% 2000/2002 at 670, which is very odd. YM has a daily negative divergence on this new high as does RLX (retail).
This is a rally that has the top 100 S&P stocks lagging AND the top 100 Nasdaq stocks ( on a relative basis, i.e SPX 61.8% was at 1254). Another reason to start thinking end of run. The one thing bulls have on their side is ISEE not closing above 200 this year yet. In other words, still no excess optimism.

Keene Little : 2/7/2007 11:29:33 AM

With the pop higher in NDX this morning it too looks like it should be finishing up the corrective pattern since the low on January 22nd. Fibs and trend lines point to the 1819 area for a potential high (NQ 1827-1828) so perhaps a little higher to go. But again, you can start nibbling on a short, depending on your risk tolerance for new highs. Link

Marc Eckelberry : 2/7/2007 11:23:02 AM

I have to go, feel free to scalp it, especially if we can't get back below 12722, R1. But VIX is showing a bullish divergence on the 5 mn, which is also a reason I took this. I want a sell and hold at his point, but bulls have the reins, so there will be noise. YM could get up to 12764, monthly R1, just as ES did. But for now, with NQ below 1825, there could be some weakness. It's all nibbles until one holds for +200. I really thought we had it yesterday, but CSCO came to the rescue.

Jeff Bailey : 2/7/2007 11:20:12 AM

11:00 Internals found at this Link

Marc Eckelberry : 2/7/2007 11:18:35 AM

My post did not make it on time to get 12728, so I suspect most of you only got 12726, so I am changing the entry.

Marc Eckelberry : 2/7/2007 11:17:51 AM

Alert: Short YM 12726, stop 12738.

Marc Eckelberry : 2/7/2007 11:15:40 AM

Back for a sec. YM hits trendline R at 12734. If NQ stays belwo 1825, weekly R1, YM is a short.

Jeff Bailey : 2/7/2007 11:15:04 AM

Swing trade sell the covered call TLT-CJ at the bid of $0.90.

TLT $88.05

Jeff Bailey : 2/7/2007 11:08:06 AM

Covered Call Cancel order alert on the TLT-CJ.

Jeff Bailey : 2/7/2007 11:02:46 AM

11:00 Market Watch found at this Link

Keene Little : 2/7/2007 10:57:28 AM

With the expectation that the move up from yesterday afternoon is the 5th wave of the rally I like to see confirmation that it is weaker than the 3rd wave (last Friday's high). So far that's true if you look at the MACD peaks on the 30-min chart. It will of course need to be confirmed with a rollover in price and a sell signal on MACD from a lower high. I like the setup if you want to start thinking about nibbling on a short, especially if we get a slight poke higher now.

Jeff Bailey : 2/7/2007 10:47:18 AM

EIA: Weekly Percent Utilization of Ref. Op. Capacity rose to 87.34% from prior week's 87.06%.

Jeff Bailey : 2/7/2007 10:46:16 AM

EIA: Weekly Refinery Operable Capacity unchanged at 17.4 million barrels/day.

Jane Fox : 2/7/2007 10:45:51 AM

Dow to all time new highs - big yawn!!

Jeff Bailey : 2/7/2007 10:45:33 AM

EIA: Weekly Gross Inputs into Refineries rose by 49,000 barrels/day to 15,195,000 barrels/day.

Jeff Bailey : 2/7/2007 10:44:07 AM

EIA: SPR Stockpile unchanged at 688.6 million barrels.

Jeff Bailey : 2/7/2007 10:43:33 AM

EIA: Weekly Heating Oil Stockpiles down 1.9 million barrels.

Jeff Bailey : 2/7/2007 10:42:59 AM

EIA: Weekly Kerosene-Type Jet Fuel Stockpiles up 80,000 barrels.

Jeff Bailey : 2/7/2007 10:41:09 AM

YM 12,728 ... session high.

Jeff Bailey : 2/7/2007 10:40:35 AM

EIA: Weekly ULS Diesel Stockpiles down 1.4 million barrels.

Jeff Bailey : 2/7/2007 10:40:00 AM

EIA: Weekly Distillate Stockpiles down 3.6 million barrels.

Keene Little : 2/7/2007 10:39:32 AM

One of the other reasons I like the upside Fib target near DOW 12703 (on the chart I posted at 9:55) is that it's confirming the Fib projection for the move up from January 8th (for two equal legs up at 12708). This level bears a close watch to see how price reacts there. Link

Jeff Bailey : 2/7/2007 10:39:20 AM

EIA: Weekly Gasoline Stockpiles up 2.6 million barrels.

Jeff Bailey : 2/7/2007 10:38:52 AM

EIA: Weekly Crude Oil Stockpiles down 448,000 barrels.

Jane Fox : 2/7/2007 10:36:19 AM

SAN FRANCISCO (MarketWatch) -- The Energy Department said distillates supplies fell for a second week, down 3.7 million barrels to 136.3 million for the week ended Feb. 2. Crude supplies fell 400,000 barrels to 324.5 million, down for the first time in four weeks. Motor gasoline stocks climbed for an eighth week, up 2.6 million barrels to total 227.2 million barrels. Following the news, March crude added 57 cents to $59.45 a barrel. March reformulated gasoline rose 1.5 cents to $1.5875 a gallon and March heating oil traded at $1.713 a gallon, up 2.21 cents.

Jane Fox : 2/7/2007 10:36:04 AM

* Crude supply down 400,000 brls last week: Energy Dept.
* Distillate supply down 3.7 mln brls: Energy Dept.
* Gasoline supply up 2.6 mln brls: Energy Dept.
* March crude up 92 cents at $59.80/brl in NY

Jeff Bailey : 2/7/2007 10:34:54 AM

My Days of Supply rise to 21.33 for week ended 02/02/07 from prior week's 21.12.

Jane Fox : 2/7/2007 10:34:23 AM

All markets have broken their respective PDHs. Link

Keene Little : 2/7/2007 10:33:19 AM

As SPX works its way higher now, it'll be interesting to see if it stays held down by the trend line along the highs since January 16th. Between that trend line and the uptrend line from January 29th price could get pinched right into its Fib target at 1453.38. At this point a break to a new daily low could trigger some selling and I'd consider a short play if that happens. Link

Jeff Bailey : 2/7/2007 10:31:00 AM

Oil Service HOLDRs (AMEX:OIH) $140.01 +0.85% ... probes its 200-day SMA.

Jane Fox : 2/7/2007 10:29:29 AM

SAN FRANCISCO (MarketWatch) -- Gold futures barely budged Wednesday morning, holding their ground near $660 an ounce with traders reluctant to move prices in either direction after a two-session winning streak, but the metal's safe-haven appeal is expected to underpin prices.

The market sees the need "of maintaining $655 for as many days as possible ... before a move to higher ground is undertaken with confidence," said Jon Nadler, an investment-products analyst at bullion dealers Kitco.com, in e-mailed commentary.

Gold for April delivery was last up 10 cents at $658.80 an ounce on the New York Mercantile Exchange.

In the previous session, the contract closed up $2.60 at $658.70 an ounce, after reaching a high of $663.70. It's up $6.70 from Friday's closing level, but the contract remains below Thursday's close of $663, which marked its loftiest in nearly six months.

"Expectations of more favorable U.S. dollar/oil movements, coupled with the ongoing unrest in Iraq and continued defiance by Iran and North Korea to halt their nuclear-development programs, will draw investors toward gold properties both as a hedge against inflation and a safe haven," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.

Jane Fox : 2/7/2007 10:27:42 AM

AD line is now a healthy +634 and AD volume is climbing rapidly. The bulls have the ball and it is safe now to buy the dips.

Keene Little : 2/7/2007 10:22:29 AM

I don't mean to throw a whole bunch of different charts at you all at once, but I've cleaned them up and tried to make it a little easier to read with some uniform symbols and nomenclature. This is what I'll try to keep current and then with the road maps updated as often as I can we will then dial down during the day and see how the price patterns develop. This is clearly a work in progress and something I'm trying to get figured how it will best work.

Again, lots of feedback is requested (at Support) as this is a tool I'm trying to develop to help us identify the swing targets which will hopefully enable you to better manage the risk side of your trades (for example, those of you who are in spread trades. The big thing in my mind is to know when the price pattern has changed from bullish to bearish and vice versa.

SPX Daily: Link
SPX 120-min bullish: Link
SPX 120-min bearish: Link
NDX Daily: Link
NDX 120-min bullish: Link
NDX 120-min bearish: Link
RUT Daily: Link
RUT 120-min bullish: Link
RUT 120-min bearish: Link
CME Daily: Link
CME 120-min bullish: Link
CME 120-min bearish: Link
GOOG Daily: Link
GOOG 120-min bullish: Link
GOOG 120-min bearish: Link

I'm working on the DOW charts and the above charts are as of yesterday's prices but I thought it would be a good chance to get these to you and let you look them over at your leisure and let me know what's working and not working for you with these. It's a lot of info and can be rather confusing so I'm struggling with putting too much on the charts vs. not enough. Have fun with them.

Jeff Bailey : 2/7/2007 10:03:27 AM

10:00 Market Watch found at this Link

Jane Fox : 2/7/2007 10:01:54 AM

I think the your best trade right now is on the sidelines.

Jane Fox : 2/7/2007 10:01:01 AM

WASHINGTON (MarketWatch) -- Nortel Networks Inc. on Wednesday said it would eliminate 2,900 jobs and shift another 1,000 positions to "lower-cost" locations as part of another major overhaul in how the company does business.

The Canadian network-equipment maker, which has struggled in recent years to boost growth and profits, said the job reductions and other steps would generate annual savings of $400 million.

"These are tough but necessary measures, and we recognize the impact they will have on affected employees," Chief Executive Mike Zafirovski said in a statement. The company is holding a conference call at 10 a.m. Eastern to explain its latest restructuring.

Jeff Bailey : 2/7/2007 10:00:01 AM

Swing trade long sell covered call alert ... Place an order to sell covered one (1) of the the iShares Lehman 20-year TLT Mar $88 Calls (TLT-CJ) for $0.90.

TLT $87.91 +0.12%

TYX.X down 0.6 bp at 4.864%

Keene Little : 2/7/2007 9:55:33 AM

The DOW has a very similar pattern to the one I posted for SPX--it looks good for one more new high to finish off the rally from January 26th. It looks a little weaker than SPX and it has me thinking it will only rally to the Fib projection where the 5th wave would equal 62% of the 1st wave, at 12703 (cash). That would be about YM 12731. But that would not be a new high for YM so there could be a little higher potential there. Link

The higher Fib targets at DOW 12745 and YM 12774 are certainly possible and that is the upside risk that I currently see. Getting closer to the higher level for the DOW would mean SPX could get closer to 1455 (an upside target based on the longer term pattern). As this move up develops I'm hoping it will become clearer where the potential end of the move will be. Just remember, if you're long, this could end very quickly with a flush to the downside. It's not worth being long in my opinion.

Jane Fox : 2/7/2007 9:52:26 AM

AD line at -57 and AD volume flat so I am not trading. I was caught short yesterday when the buyers arrived. Thank heaven for stops.

Jane Fox : 2/7/2007 9:37:36 AM

VIX opens below its PDL as does the TRIN.

Jane Fox : 2/7/2007 9:37:12 AM

AD line is a -41 and AD volume below 0 and falling.

Marc Eckelberry : 2/7/2007 9:31:09 AM

Since I can't be around today, I had to close that trade, but if ES can't get a 5 mn candle to close above 1456.25, I really doubt a rally can stick for very long. NQ has big resistance between 1811 and 1814, watch that as well. A breakout there would hit 1823/1825 very quickly, but with recent semi weakness in earnings guidance, I also don;t see too muh upside there. I think these rallies are being sold into at this point, but of course there is always room for exuberance. YM below 12707 is back in trouble.

Keene Little : 2/7/2007 9:15:45 AM

Looks like we're getting some follow through to yesterday afternoon's rally. Sticking with the SPX 30-min chart, which we've been following since the January 26th low in order to identify where and when the rally will end, we should now finally be in the 5th wave of the move. A good Fib projection for the end of the move is at 1453.38 (about ES 1458) where the 5th wave would equal the 1st wave. Link

It doesn't mean it will get there, or stop there, but it does mean pay close attention to what happens there. I like the setup for a short play if SPX finds resistance there (or anywhere below 1455). This should be it for the entire rally from July. But, stay disciplined and understand there are higher upside projections. A rally through 1455 that stays there would have me backing off on any short plays. A drop through 1440 would have me getting more aggressive on the short side.

Jane Fox : 2/7/2007 9:14:33 AM

Then of course when trading any market you have to watch the daily charts and as you can see Gold is trading above its resistance. Link

Jane Fox : 2/7/2007 9:10:14 AM

Here is the weekly charts of the relationships I watch to help me trade Gold. You want Crude trading above its 12 weekly MA - it is. You want the US$ trading below its 7 weekly MA - it is trading right at its 7 MA. You want the Swiss Franc above its 5 weekly MA - it is. Link

Jane Fox : 2/7/2007 9:06:32 AM

The US $ is falling which should help my long Gold position. Also helping Gold is Crude pushing up against its overnight highs. Link

Jane Fox : 2/7/2007 9:03:31 AM

Big yawn another bullish overnight session. Let me tell you all this bullishness is getting real tiresome for us bears but I really cannot find much bearishness in the charts nor in the economy. Link

Jane Fox : 2/7/2007 8:52:39 AM

NEW YORK (MarketWatch) -- Crude oil futures climbed back above $59 a barrel early Wednesday, as continued cold weather in the Northeast attracted buyers ahead of the weekly inventory data.

Crude oil for March delivery tacked on 40 cents to $59.28 a barrel in electronic trading, and reached a high of $59.54 earlier in the session.

The contract had reached a high of $59.99 a barrel on the New York Mercantile Exchange on Tuesday, before backing off to close up 14 cents at $58.88 a barrel.

Jane Fox : 2/7/2007 8:50:55 AM

WASHINGTON (MarketWatch) -- The productivity of the U.S. nonfarm business sector soared in the fourth quarter, rising at an annual rate of 3% after a dismal 0.1% productivity loss in the third quarter, the Labor Department estimated Wednesday.

Unit labor costs -- a key inflationary signal -- rose at an annual rate of 1.7% in the fourth quarter, indicating that tight labor markets weren't contributing to higher overall inflation in the quarter.

Both numbers were better than expected. The median forecast of economists surveyed by MarketWatch looked for a 2.4% rise in productivity and a 2% gain in unit labor costs.

Real hourly compensation increased 7.1% as consumer prices fell 2.2%

Marc Eckelberry : 2/7/2007 8:47:57 AM

I'm not so sure the YM rally will stick with yields jumping, but I can't be around today to monitor this trade. If YM fails at 12707, you can re-enter the short. My guess is YM will still visit 12585, especially if ES can't make a clear move above 1456.

Marc Eckelberry : 2/7/2007 8:43:12 AM

NQ has moved above 1811.50.

Marc Eckelberry : 2/7/2007 8:42:53 AM

Alert: Exit YM short -12.

Marc Eckelberry : 2/7/2007 6:19:35 AM

No real lift from CSCO other than NQ and that one is stll stalled by its 2 DMA. YM has 61.8% Friday/Monday resistance a 12707. Obviously, the economic data at 8:30 is more important it seems, at least for YM and ES.

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