Option Investor
Printer friendly version
OI Technical Staff : 2/9/2007 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The Market Monitor has been archived.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 : 2/9/2007 7:55:17 PM

Closing Internals found at this Link

Jeff Bailey : 2/9/2007 7:52:37 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 2/9/2007 5:30:52 PM

Of Interest ... Per some of today's MM postings regarding "Capital Gains Shelter" and Ms. Smith, but ONLY from a market perspective at this Link

Jeff Bailey : 2/9/2007 5:04:37 PM

Fed's Poole: (comments) ... Recap from DJ- Link

Jeff Bailey : 2/9/2007 4:37:24 PM

Speaking of Ameritrade (AMTD) $17.40 -1.41% ... It's January Op-Ex close was $17.47. 3 cents below the $17.50 strike.

Jeff Bailey : 2/9/2007 4:32:11 PM

VIX.X ... Daily Interval chart with MONTHLY Pivot retracement at this Link ... Since QCharts' Option chains are so poor, I utilize my Ameritrade LevelII for more accurate quoting, entry and exit pricing.

Jeff Bailey : 2/9/2007 4:25:09 PM

VIX.X goes out at 11.10 ... WEEKLY Pivot Levels for next week are ... 9.25, 10.17, Piv= 10.89, 11.81, 12.53

For those that may be holding the VIX-BV's ($0.15 x $0.20), which traded 8,315 contracts today, we're taking note of MONTHLY R1, then MONTHLY R2.

Jeff Bailey : 2/9/2007 4:03:59 PM

Removing BGO from our MM Watch List (to make room for NEW) ... BGO being acquired by KGC

Jeff Bailey : 2/9/2007 4:02:33 PM

Buy Program Premium ... SPY $143.98 : YM 12,617

Jeff Bailey : 2/9/2007 4:01:40 PM

Adding NEW to our MM Watch List.

Jeff Bailey : 2/9/2007 4:00:57 PM

New Century Finance (NEW) $18.22 -5.30% ... finishes smack in the middle of today's range.

Jeff Bailey : 2/9/2007 3:54:26 PM

General Motors (GM) $36.08 +6.74% ... 7 minutes, 7 minutes as GM threatens its 10/24/06 high close of $36.19.

Keene Little : 2/9/2007 3:54:53 PM

I've got to get out of here before the bell and will be out for a couple of hours. I'll get all the "road maps" updated, possibly before the end of today and certainly over the weekend so we have them ready to go for next week. I like the start for the bearish wave count here but it is by no means locked up. Stay disciplined and don't be afraid to take money off the table (especially when you consider the 3-wave decline I just showed you on the DOW and what it could mean). See you later.

Keene Little : 2/9/2007 3:50:59 PM

I get a little more bearish when I look at the DOW because today's leg down looks like it's the 1st wave of the 3rd wave. So after a bounce we would be due a 3rd of a 3rd wave down (the screamer wave). So that's what I depict here: Link

The big caution, to keep the bears from over salivating here, is the fact the move down from Wednesday is only a 3-wave move. That's a corrective pullback if it stays that way. So the "negation" symbol goes to 12650--any rally back above that level and I'd be dropping my claws in a hurry.

Jeff Bailey : 2/9/2007 3:44:16 PM

US Oil Fund (USO) $50.00 +0.48% ...

Jeff Bailey : 2/9/2007 3:38:56 PM

Begin to see the difference between a "good buy", a "better buy" and a "best buy?"

Institutions LOVE to sell premiums.

I thought $1.75 on VIX at 9.75 was a great trade, but OUT the money doesn't seem to be the way to trade VIX.X options. Even as VIX.X moved "sharply" higher from entry point, I was and still am VERY disappointed in how an OUT the money option becomes valued.

Keene Little : 2/9/2007 3:37:16 PM

Pretty much the same wave count for the RUT as for NDX--looks like wave-(i) may have finished at today's low and now we'll see a 2nd wave bounce. For a 50%-62% retracement we could see the RUT bounce up to 810-812 before it rolls back over in a stronger 3rd wave down. Link

Jeff Bailey : 2/9/2007 3:33:28 PM

SPX 1,437.70 here.

Jeff Bailey : 2/9/2007 3:32:56 PM

Hmmmm .... SPX's session low has been 1,433.44.

If I take 1,435 - 1,433.44 = 1.56.

Even as VIX.X rose to 12.83 in early January (from below 9 in mid-December), those VIX-BV never did much above 2.00.

Keene Little : 2/9/2007 3:32:44 PM

The NDX dropped below 1785 which was my confirmation level for the bearish wave count. It's getting a good bounce now and could be considered holding onto its up-channel. Its choppy pattern requires wider price levels to confirm or negate what's happening here and therefore I'd say the bearish wave count would be negated with a rally back above 1811 (78.6% retracement of today's decline) and confirmed with a drop below today's low at 1780. Link

A typical retracement, if this is the start of a 2nd wave bounce, as labeled on this chart, would be 50%-62% so that would be 1800-1804. And if this wave count is correct then the next leg down should be a strong 3rd wave decline.

Jeff Bailey : 2/9/2007 3:24:38 PM

Playboy Enterprises (PLA) $10.61 +3.71% ... Note: 50%, or "center" of 06/14/06 low close to recent 11/14/06 high close is just ahead at $10.76.

Keene Little : 2/9/2007 3:17:47 PM

It's possible this afternoon's low finished the 3rd wave for the move down from Wednesday's high. If so we should consolidate for a bit in a sideways/up 4th wave correction, possibly through Monday before getting the 5th wave down to complete a larger degree 1st wave down. That would then set up a big bounce into the end of opex week. This bearish wave count would now be violated with a rally above 1443. Link

Jeff Bailey : 2/9/2007 3:16:19 PM

03:00 Internals found at this Link

Jane Fox : 2/9/2007 3:11:40 PM

Buyers are back TICK +800

Jane Fox : 2/9/2007 3:10:50 PM

A Los Angeles judge orders the body of Anna Nicole Smith to be preserved pending a February 20 hearing on the paternity dispute surrounding her five-month-old daughter, lawyer says. CNN reports

Jeff Bailey : 2/9/2007 3:05:50 PM

03:00 Market Watch found at this Link

Jeff Bailey : 2/9/2007 2:59:31 PM

Aha! Actually both are correct ... US and North American.

Baker Hughes ... US Rig Count -2, North American +17.

Jeff Bailey : 2/9/2007 2:56:28 PM

Good Gravy! ... Sounds like the press is giving some innacurate information. Better go to the source.

Jane Fox : 2/9/2007 2:56:04 PM

As Jeff would say "Good Gravy." Link

Jeff Bailey : 2/9/2007 2:55:41 PM

Forbes- US Weekly Oil and Gas Rig Counts Increased by 17 In Latest Week

Jeff Bailey : 2/9/2007 2:54:44 PM

MarketWatch- North American Rig Counts Decline By Two (2) In Latest Week

Jeff Bailey : 2/9/2007 2:46:47 PM

Sell Program Premium ... SPX 1,435

Jeff Bailey : 2/9/2007 2:45:13 PM

Lam Research (LRCX) $44.10 -3.50% Link ... Warned on 01/17/07 with stock closing $54.13. Opened 01/17/07 at $48.55.

Jeff Bailey : 2/9/2007 2:42:37 PM

Applied Materials (AMAT) $18.07 -1.31% Link ...

Jeff Bailey : 2/9/2007 2:41:40 PM

Applied Materials Outlook Eyed In FY1Q Report

DJ- Chip equipment maker Applied Materials Inc. (AMAT) is scheduled to report fiscal first-quarter earnings Tuesday. With concerns over excess inventory and lackluster demand, analysts and investors are sure to pay close attention to Applied Materials' outlook. In January, chip-equipment competitor Lam Research Corp. (LRCX) issued a bearish outlook for its third quarter, which weighed on shares of most chip equipment stocks.

Jeff Bailey : 2/9/2007 2:38:59 PM

A "dinger" of a sell program premium ... EPREM.X fell to 1.78

Jeff Bailey : 2/9/2007 2:37:09 PM

KB Home (KBH) $51.71 -2.74% Link ...

Jeff Bailey : 2/9/2007 2:35:52 PM

KB Home Seen Taking Write-Downs Of $343M In 4Q

DJ- KB Home (KBH) is expected to take land-related write-downs of $343 million when it posts results Tuesday for the fourth quarter ended Nov. 30.

Investors will be watching for updates on company plans to restate financial results to fiscal 2003, any update on the Securities and Exchange Commission's formal investigation, launched Jan. 19, into the stock option controversy, and any signs of a rebound in any of the company's markets.

Several senior executives, including Chief Executive Bruce Karatz, resigned in November in connection with a stock-options backdating scandal. The company's independent investigation concluded that KB Home had improperly backdated certain stock option grants to Karatz and others between 1998 and 2005, which incorrectly inflated their pay.

The probe estimated the errors would cost the company about $50 million in additional expenses. (Karatz voluntarily agreed to reimburse the company $13 million in gains related to the backdating).

Keene Little : 2/9/2007 2:21:40 PM

The DOW just hit its 50% retracement of the rally from January 26th, at 12566, and SPX will do the same at 1435. So for the move down from this morning's high it wouldn't be at all surprising to see us go into a 4th wave correction this afternoon before dropping lower again.

Jeff Bailey : 2/9/2007 2:20:37 PM

BHI $70.48 +0.05% ...

Jeff Bailey : 2/9/2007 2:20:14 PM

SLB $64.52 -0.66% ...

Jeff Bailey : 2/9/2007 2:19:19 PM

Ecuador To Cut Ex-Occidental Oil Field 2007 Investment 15%-20%

Jeff Bailey : 2/9/2007 2:18:04 PM

DAW-NP $0.00 x $0.05

Jane Fox : 2/9/2007 2:16:56 PM

Would be nice if the market were this easy to read all the time.

Keene Little : 2/9/2007 2:16:17 PM

The DOW has dropped below 12575. Bears win.

Jeff Bailey : 2/9/2007 2:16:05 PM

"Good Buy" alert SPX 1,437 (see Monday's Market Wrap)

Jeff Bailey : 2/9/2007 2:15:29 PM

Sell Program Premium

Jeff Bailey : 2/9/2007 2:14:55 PM

UTH +0.04% and HUI.X +0.24% ... only equity-based indexes I show green in US Market Watch.

Jane Fox : 2/9/2007 2:13:40 PM

I love trading bear markets. Fear is so much more of a motivating force than greed and markets fall much more orderly than they rally.

Jeff Bailey : 2/9/2007 2:12:29 PM

That could be the most "negative" news of the year for equities.

Jeff Bailey : 2/9/2007 2:11:17 PM


DJ- Wealthy taxpayers wouldn't be able to use their children to shelter capital gains income under legislation the House Ways and Means Committee will consider next week.

Jane Fox : 2/9/2007 2:10:35 PM

SAN FRANCISCO (MarketWatch) -- Crude-oil futures topped $60 a barrel Friday, sending their benchmark contract to its highest level since early January, with prices ready to end the week more than 2% higher as traders' concerns zeroed in on news of a refinery snag in California, ongoing tension between the U.S. and Iran and the cold weather which has been drawing down supplies of heating fuels.

Prices have been "vacillating around the $60 range," trading higher for the week because of the cold weather and a bigger-than-expected supply decline than was priced into the market, said Jason Schenker, an economist at Wachovia Corp.

Crude for March delivery was last at $60.30 a barrel, down a penny on the New York Mercantile Exchange. It climbed to a high of $60.60 during the session, the highest level since Jan. 3. Prices are poised for a more than $1 gain for the week.

Jeff Bailey : 2/9/2007 2:09:04 PM

ConocoPhillips (COP) $67.01 +0.20%

Jeff Bailey : 2/9/2007 2:08:31 PM

ConocoPhillips (COP) Increases Buyback; Increases Dividend

DJ- ConocoPhillips (COP) on Friday raised its quarterly dividend 14% to 41 cents per share from 36 cents a share.

The oil company said the dividend is payable March 1 to stockholders of record as of Feb. 20.

The company also said that it plans to buy back up to $4 billion of its common stock in 2007, including the $1 billion previously announced on Jan. 12. ConocoPhillips expects to repurchase about $1 billion in the first quarter.

Jeff Bailey : 2/9/2007 2:06:59 PM

Fed's Pianalto: Unworried By Large Foreign Treasury Holdings

Jeff Bailey : 2/9/2007 2:05:54 PM

Fed's Fisher: Examines Natl. Debt For Stimulus Effect On Economy

Keene Little : 2/9/2007 1:58:53 PM

With the break below SPX 1443 I'd say my diamond-top pattern is not going to happen. Darn shame for those of us who are short the market. The only thing I don't know yet is whether Wednesday's high or today's high was the end of the rally from January 26th since either one fits as an acceptable wave count. The only reason it will matter is where the 3rd down will be (since it's the stronger move).

So far I'd have to say I'm leaning towards today's decline being part of the 3rd wave (meaning the high on Wednesday was the top) simply because of the strength of the selling here. This ties in with the RUT count I showed earlier (1:14) and my expectation for a quick retracement of its ascending wedge. Link

Jeff Bailey : 2/9/2007 1:51:53 PM

YM 12,600

Jeff Bailey : 2/9/2007 1:51:30 PM

INDU alert 12,575

Jeff Bailey : 2/9/2007 1:49:23 PM

VIX.X alert! 11.13 ... WEEKLY R1

Jeff Bailey : 2/9/2007 1:47:40 PM

VIX.X alert! 11.04 and MONTHLY pivot

Jeff Bailey : 2/9/2007 1:36:10 PM

Decent volume in the VIX-BV ... 4,671 contracts 0.10 x 0.20. VIX set to test MONTHLY Pivot.

Jane Fox : 2/9/2007 1:35:23 PM

Bears gotta love this. TICKS -1000 Link

Keene Little : 2/9/2007 1:35:18 PM

BTW, referencing that DOW chart I just posted, you can visualize the rally of the past week as the head of a developing H&S pattern with the coming decline finishing the head. Then a big wave-2 bounce into the end of February will create the right shoulder to be followed by a big 3rd wave down into March. From a bearish point of view that's what I'm expecting to see develop.

Jeff Bailey : 2/9/2007 1:31:08 PM


DJ- Bies tenders her resignation, effective March 30, to spend more time with family. Fed says she won't attend March meeting, and Bernanke praises her 'unique perspective.' Resignation leaves two vacancies on Board of Governors.

Keene Little : 2/9/2007 1:30:46 PM

The DOW has a 100 points to play in now--the bearish wave count on this 60-min chart shows the count is negated at 12676 and confirmed at 12575. Let the battle begin. Link

Jeff Bailey : 2/9/2007 1:30:29 PM


DJ- Deutsche Bank upgrades its ratings on Ford Motor and General Motors to buy from hold, reflecting optimism related to domestic auto industry's ability to further negotiate reforms on health-care costs.

Jeff Bailey : 2/9/2007 1:28:29 PM

DJ- Iraq's South Crude Oil Exports Up At 1.75M B/D In February

Jeff Bailey : 2/9/2007 1:27:38 PM

Fed's Pianalto: US Productivity Is "Envy Of The World!"

Jeff Bailey : 2/9/2007 1:21:31 PM

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

Jeff Bailey : 2/9/2007 1:15:20 PM

01:00 Internals found at this Link

Jane Fox : 2/9/2007 1:14:33 PM

Here is how the markets are trading in relation to their PDRs. Notice how ES has respected its PDL. Link

Keene Little : 2/9/2007 1:14:12 PM

(re-posting updated chart) I think the RUT confirmed for us the break of its ascending wedge: Link While I discussed the possibility for a lot of back and forth price action in a potential diamond-top pattern for SPX, the one thing to keep in mind about ascending wedges is that they typically retrace quickly. This pattern suggests we'll see the RUT back below 780 in less time than it took to rally to 817. I slapped a Fib time projection on the RUT chart to show that's what I'm expecting to see here.

Jeff Bailey : 2/9/2007 1:11:29 PM

US Oil Fund (USO) $50.44 +1.38% ... oil is biggest weight in CRB INdex.

Jeff Bailey : 2/9/2007 1:10:47 PM

I think that was a "bad tick" in the CRB Index to 319.41.

Jane Fox : 2/9/2007 1:08:51 PM

The TRIN certainly didn't warn of this selloff. It is still sitting a bullish 0.77.

Jeff Bailey : 2/9/2007 1:08:40 PM

Wells Fargo (WFC) $35.68 +0.33% ...

Jeff Bailey : 2/9/2007 1:08:21 PM

HSBC Holdings (HBC) $89.72 -0.06% ...

Jeff Bailey : 2/9/2007 1:07:29 PM

New Century (NEW) $17.01 -11.74% ... reverses gains.

Jeff Bailey : 2/9/2007 1:02:31 PM

01:00 Market Watch found at this Link

Jeff Bailey : 2/9/2007 12:58:32 PM

QQQQ alert! $44.00 ... February's "Max Pain"

Keene Little : 2/9/2007 12:54:42 PM

It's certainly beginning to look a bit like a bull-trap rally this morning. Just don't be surprised by bear-trap declines for the next few days as well.

Jane Fox : 2/9/2007 12:54:33 PM

Hopefully you all bailed on your long positions and got short.

Jeff Bailey : 2/9/2007 12:54:10 PM

VIX-BV $0.05 x $0.15

Jeff Bailey : 2/9/2007 12:52:58 PM

VIX.X alert ... 10.60 +1.53% ...

Keene Little : 2/9/2007 12:52:39 PM

GOOG has been consolidating around the 470 level and barely got a bounce after a relatively steep drop from 506. It's common to see a larger correction--either in time or price. But it's threatening to roll over now and if it does I'd say there's a real good chance it will head quickly for the 450 area. It's also possible it's still in a sideways consolidation with a higher bounce coming so I'm keeping that possibility on this chart. But with MACD hanging around under zero it's looking a bit bearish at the moment. Link

Keene Little : 2/9/2007 12:42:45 PM

Following up on the CME 120-min charts I updated yesterday, it's looking like it's tipping over. Because of the competing bullish vs. bearish wave counts on this one I'll be watching one leg at a time here. First support is its uptrend line from December 26th, currently near 565. Link

If we're going to see a large sideways triangle develop (shown on the bullish 120-min chart) then a typical support level will be the 62% projection at 557. Then two equal legs down from the January 24th high is at 539 and if it takes a week or more to get there then it will also find support at its uptrend line from August 2006 at that level. But at least for the time being I'd say short CME is the right play, stop at 590.

Jeff Bailey : 2/9/2007 12:40:59 PM

G7: PBOC's Zhou: China Not Likely To Hit 8% GDP Rise in 2007

Jeff Bailey : 2/9/2007 12:40:07 PM

Swiss Govt: Bolivia Must Indemnify Glencore For Unit Seizure

Jane Fox : 2/9/2007 12:37:10 PM

AD line is -387, AD volume making new daily lows and VIX making new daily highs. We are now into a sell the rallies.

Keene Little : 2/9/2007 12:35:40 PM

Did someone say something? Looks like a sell program.

Jane Fox : 2/9/2007 12:34:57 PM

TICKS -1000

Jane Fox : 2/9/2007 12:34:25 PM

TICKS -800. Good timing ticks!

Jeff Bailey : 2/9/2007 12:34:18 PM

iShares Russell 2000 Index Options Montage found at this Link

Jane Fox : 2/9/2007 12:34:11 PM

Once daily lows are broken I will be turn officially bearish.

Keene Little : 2/9/2007 12:24:08 PM

The RUT has continued to find resistance near its Fib projection at 816. This is a projection for wave-5 = 62% of wave-1, common in an ascending wedge shown here: Link

Today's minor break below its uptrend line from January 26th (and hard to see but it did a tiny little bounce and kiss goodbye so far) could be the first sell signal on this one. At this point I'd say shorting the RUT with a stop at a new daily high is a good play.

Jeff Bailey : 2/9/2007 12:22:08 PM

iShares MSCI S. Africa (AMEX:EZA) $116.06 -0.34% ...

Jeff Bailey : 2/9/2007 12:21:16 PM

iShares MSCI Brazil Index Fd (NYSE:EWZ) $47.95 -0.24% ...

Jeff Bailey : 2/9/2007 12:20:23 PM

iShares Latin America 40 (AMEX:ILF) $177.46 +0.20%

Jeff Bailey : 2/9/2007 12:18:04 PM

Coeur D' Alene (CDE) $4.39 +0.68% ...

Jeff Bailey : 2/9/2007 12:17:32 PM

Apex Silver (SIL) $13.78 -1.07% ...

Jeff Bailey : 2/9/2007 12:14:14 PM

Glencore: Bolivia's Nationalization "Violates Our Rights

DJ- Bolivian President Evo Morales Friday nationalized the Vinto tin smelter of Switzerland's Glencore International AG, according to the Andean government's news service, ABI.

"I want to tell you we are recovering the companies of the state," ABI quoted Morales as saying.

Mining and Metallurgy Minister Guillermo Dalence Jose Guillermo Dalence said the Vinto smelter would hold a monopoly on tin production in Bolivia, ABI reported.

The Vinto smelter was owned by Glencore subsidiary Sinchi Huayra, which also operates five mines in the Oruro and Potosi regions of Bolivia. The smelter treats ore from Sinchi Huayra's own mines and third parties, according to Glencore's web site.

Glencore said it bought 100% of the Sinchi Huayra holding company in 2005. Last year, Bolivia's La Razon daily reported that Glencore had paid $100 million for the company, acquiring it from a firm linked to ex-President Gonzalo Sanchez de Lozada.

Jeff Bailey : 2/9/2007 12:11:59 PM

DJ- US Earnings: Q4 Results +8% Vs. 2005, Up 5.3% Vs. Views

Jeff Bailey : 2/9/2007 12:06:54 PM

Playboy Holdings (PLA) $10.49 +2.54% ... sticks its head back above a declining 200-day SMA.

Jeff Bailey : 2/9/2007 11:58:38 AM

US Energy Group (USEG) $4.89 +0.82% ...

Jeff Bailey : 2/9/2007 11:58:16 AM

UN Nuclear Group Halts Over 12 Technical Aid Projects With Iran

Jeff Bailey : 2/9/2007 11:56:03 AM

Oil traders need to be VERY, VERY, VERY disciplined with their stop (long/short) in crude.

I should note that the various Force Majeure's due to Prudhoe Bay found crude oil plunging in following days.

Jeff Bailey : 2/9/2007 11:54:15 AM

Nigeria Force Majeure On February Crude Exports (update)

DJ- National Nigeria Petroleum Corp. Corp. has confirmed it will cut crude loading volumes for February and declared force majeur on cargoes.

In a letter issued late Friday and seen by Dow Jones Newswires, NNPC said the export program had been revised lower in line with government directives to reduce crude oil exports by 250,000 million barrels a day in February.

Jeff Bailey : 2/9/2007 11:52:11 AM

Fed's Pianalto: Inflation Expectations Have Been Stable

Jeff Bailey : 2/9/2007 11:51:47 AM

Fed's Pianalto: Recent Housing Data Has Been "Encouraging"

Jeff Bailey : 2/9/2007 11:51:07 AM

Maguire Properties (MPG) Cut to "Sell" at Goldman

MPG $42.30 -3.06% ... darts to lows of session. Fell sharply on 02/07/07 to $39.00 according to my bar chart.

Jeff Bailey : 2/9/2007 11:49:33 AM

Fed's Pianalto: Housing Troubles Have Pulled Down US Growth

Jeff Bailey : 2/9/2007 11:46:59 AM

G7: US's Paulson Repeats Japanese Yen Set In Competitive Market

Jeff Bailey : 2/9/2007 11:41:39 AM

Alert! Nigeria Force Majeure Part of 250,000 B/D February Export Cut

Jeff Bailey : 2/9/2007 11:39:50 AM

That looks like a tin smelter.

Keene Little : 2/9/2007 11:36:29 AM

There's another reason I like the diamond-top idea and it has to do with opex week. I'm obviously speculating here but that pattern would have the market holding up through opex week. That would enable the Boyz to collect the premium on their short puts. If price starts to jump up and down and push the VIX a little higher that would then juice the option premium. With a bullish public buying calls, smart money will be the sellers. Then let the market drop.

Jeff Bailey : 2/9/2007 11:34:11 AM

Glencor's Web Page Link

Privately held.

Jeff Bailey : 2/9/2007 11:30:35 AM

Bolivia's Government Nationalizes Glencore's Vinto Smelter Complex

Jeff Bailey : 2/9/2007 11:28:56 AM

Targa Resources Partners (NGLS) +12% In Post-IPO Trading

Energy group Targa Resources Partners LP (NGLS) debuted Friday on the Nasdaq Stock Market, opening at a 9.5% premium to its initial public offering price. The stock opened at $23 a share, up from its IPO price of $21. It was recently trading at $23.58, up 12.3%. Targa sold 16.8 million common units at the top end of the expected range of $19 to $21, set by underwriters Citigroup Global Markets Inc., Goldman Sachs & Co., UBS Securities LLC and Merrill Lynch. The Houston-based company was formed by its parent company Targa Resources Inc., which is 73.6% owned by private equity firm Warburg Pincus LLC. Merrill Lynch owns another 6.5%. The units sold into Targa's offer represent 58% of company. Post IPO, Targa Resources Inc. will hold 39.9% of the company. Targa Resources Inc. had natural gas and natural gas processing assets valued at $3.4 billion as of Sept. 30, 2006. Assets in the Fort Worth Basin in north Texas valued at $1.1 billion will be contributed to Targa Resources LP as part of the offer. In calendar year 2005, Targa reported a pro forma net loss of $6.8 million. For the nine months as of Sept. 30, it posted net income of $400,000. Targa said it intends to use about $307.1 million of the IPO proceeds to retire debt with its affiliate. It also plans to borrow $342.5 million under a new credit facility to pay to retire additional debt with Targa Resources Inc. Publicly traded energy limited partnerships are structured so that much of their available cash flow is paid out to investors through a dividend. Targa plans to offer a dividend yield of more than 6%.

Jeff Bailey : 2/9/2007 11:26:37 AM

Fund Manager BWM: To Vote Against Icahn Deal With Lear

Jeff Bailey : 2/9/2007 11:25:59 AM

Moody's Assigned Provisional Rtgs To American Express 2007-1 Credit Card-Backed Securities

Jeff Bailey : 2/9/2007 11:21:14 AM

February "Max Pain" Theory (updates)

DIA $125.00 ($1 increments)

SPX 1,425 (25-pt increments)

SPY $143 ($1 increments)

OEX 665 (5-pt increments)

NDX 1,800 (25-pt inrements)

QQQQ $44.00 ($1 increments)

SMH $35.00 ($2.50 increments)

Jeff Bailey : 2/9/2007 11:13:52 AM

11:00 Internals found at this Link

Keene Little : 2/9/2007 11:06:01 AM

Without a new high above Wednesday's we could still be in the very early stages of setting up a strong move down. That would be the "diamond-top in the rough" pattern. Here's a slight modification to it after this morning's high. If price plays out this way over the next couple of days it could drive traders crazy--both sides will get whipped out of their trades so stay aware of this possibility. Opex week could simply aggravate this. Link

Jeff Bailey : 2/9/2007 11:02:17 AM

11:00 Market Watch found at this Link

Jeff Bailey : 2/9/2007 10:55:36 AM

Freddia Mac (FRE) $65.00 +0.77% Link ...

Jeff Bailey : 2/9/2007 10:54:50 AM

Fannie Mae (FNM) $57.08 +1.15% Link ...

Keene Little : 2/9/2007 10:54:27 AM

Speaking of GM, it spiked up to test its October 2006 high at 36.56 (this morning's high was 36.62 so it's new 52-wk high) and looks like it could struggle with that level. The daily chart is overbought.

Jeff Bailey : 2/9/2007 10:54:02 AM

Fannie Mae Announces New Issue 5-year Benchmark Notes (R) and Reopening of 5.00% 10-year Benchmark Notes

Press Release Link

Jeff Bailey : 2/9/2007 10:51:40 AM

MasterCard (MA) $106.00 -7.61% Link ... Wiiiild trade with session high/low so far $118.03/$103.33

Jeff Bailey : 2/9/2007 10:50:04 AM

MasterCard Sees No Major Price Hikes; May Pressure Margins

Jeff Bailey : 2/9/2007 10:49:17 AM

G7: German Finance Minister: "Self-Understood" We Will Discuss Forex

Keene Little : 2/9/2007 10:49:05 AM

With GM feeling the love this morning (+6.2%) the DOW is outperforming the others at the moment. The techs and small caps are slightly negative and SPX is neutral. Overall we've got a flat market that's chopping around. So far it's looking like a typical Friday.

Jeff Bailey : 2/9/2007 10:47:46 AM

EU Almunia: Sharp Forex Movements A Threat To Growth

Forex Rates Should Reflect Economic Fundamentals.

Jane Fox : 2/9/2007 10:44:41 AM

TICKS +800.

Jeff Bailey : 2/9/2007 10:42:38 AM

US Oil Fund (AMEX:USO) $49.98 +0.46% ...

Jeff Bailey : 2/9/2007 10:41:50 AM

PetroChina (PTR) $122.66 -1.43% Link ... lows for the week.

Jeff Bailey : 2/9/2007 10:38:03 AM

Most Actives ... F $8.82 +3.15%, QQQQ $44.40 -0.11%, LVLT $6.32 +3.77%, INTC $21.44 +0.37%, CHTR $3.33 +2.46%, BRCM $34.96 +3.83%, MSFT $29.26 (unch), LI $34.35 +8.85%, SIRI $3.73 (unch), GM $35.90 +6.21%

Jeff Bailey : 2/9/2007 10:35:29 AM

Charter Communications (CHTR): Refinances $6.58B; Post Preliminary Q4 Rev

DJ- Shares of Charter Communications Inc. (CHTR) rose as much as 7% on Friday on news that the debt-laden cable operator will be refinancing and expanding existing $6.58 billion senior secured credit facilities. The company also said gave preliminary fourth-quarter results that showed a 9.8% increase in revenue.

Charter, St. Louis, said Friday that it plans to establish $8.05 billion worth of senior secured credit facilities, including a $1.5 billion revolving credit facility, a $1 billion new term facility, a $5 billion refinancing term loan and a $550 million second lien term loan.

The deal is expected to be completed within the next few weeks. With the refinancing, the company expects to have adequate liquidity to fund operations through 2008.

Shares rallied on the news, hitting close to two-year highs. Charter's stock recently traded up 3.1% at $3.35, although earlier in the day the stock reached $3.50.

Part of the proceeds will be used to redeem up to $550 million worth of floating rate notes due 2010 issued by CCO Holdings LLC and up to $187 million worth of 8.625% senior notes due 2009 issued by Charter Communications Holdings LLC.

While the rest of the cable industry spent heavily in the 1990s in order to offer the "triple play" bundle of TV, Internet and phone service, Charter, which had $19.06 billion in debt at the end of 2006, fell a bit behind its peers because of a heavy debt load and liquidity issues. The company was also sidetracked by an accounting debacle that led to the resignation of several senior management members. In the last few years, however, Charter has been working on turning itself around. It has refinanced debt, pushed back maturity dates, and invested in upgrading its networks. The moves have helped the company hold on to subscribers and grow revenue.

As part of its refinancing plans, Charter provided preliminary fourth-quarter results. The company said it currently expects revenue of $1.41 billion, 9.8% higher than a year ago. On a pro forma basis, adjusted for the sale and acquisition of various cable systems in 2005 and 2006, revenue was up 11.7%. Analysts, on average, had been expecting revenue of $1.41 billion, according to a survey by Thomson Financial.

Adjusted earnings before interest, taxes, depreciation and amortization is expected to be $503 million, up 10% from a year ago.

CHTR $3.33 +2.46% Link ... #4 Most Active

Keene Little : 2/9/2007 10:35:26 AM

The pattern for NDX over the past two weeks is a bit funky looking so there are a couple of different corrective wave counts I could use. The bottom line is that the bounce looks choppy and corrective and that continues to support the bearish interpretation on the techs. This morning's spike up to 1819.30 is where there are two equal legs up from the low on January 26th, at 1819.47. It's also slightly above a 62% retracement of the decline from the January high, at 1815.54. Link

There's another Fib target I'd keep in mind--the 1825 area shows up in a couple of different Fib projections, and is also the top of a parallel up-channel (bear flag). While I see potential for a little higher I don't think it's worth the risk of being long the techs as this is a bearish pattern. Just keep in mind that any rally above 1827 negates the bearish wave count.

Jeff Bailey : 2/9/2007 10:31:13 AM

EU Almunia: G7 Against Too Much Hedge Fund Regulation

Jeff Bailey : 2/9/2007 10:30:05 AM

Moody's Cuts Ratings Of Xerium Technologies (XRM)

XRM $10.72 -0.64% Link ...

Jeff Bailey : 2/9/2007 10:27:35 AM

Sysco Corp. (SYY) $34.28 +0.23% Link ...

Jane Fox : 2/9/2007 10:25:41 AM

Ok officially time to bail on longs and sit this out.

Jeff Bailey : 2/9/2007 10:25:12 AM

Fitch Cuts ARAMARK's IDR To 'B' & Rates Sr. Notes 'B-/RR5'

Jeff Bailey : 2/9/2007 10:21:34 AM

QQQQ $44.52 +0.15% ... after session high of $44.72 (WEEKLY R1 $44.61)

Jeff Bailey : 2/9/2007 10:20:02 AM

Semiconductor HOLDRs (SMH) $34.67 +0.87% Link ... Did see trade at WEEKLY R1.

Jane Fox : 2/9/2007 10:18:54 AM

If you need to trade I would be long but it is looking more and more like you should be on the sidelines.

Jeff Bailey : 2/9/2007 10:18:45 AM

KLA-Tencor (KLAC): SEC Opens Formal Probe Over Options Grants

KLAC $50.31 -1.19% Link ...

Jeff Bailey : 2/9/2007 10:16:59 AM

Merrill Lynch Upgrades Brazil Steel Co. CSN To "Buy"

Jane Fox : 2/9/2007 10:14:09 AM

NEW YORK (MarketWatch) - Gold futures rallied on Friday, tracking a surge in crude-oil futures, as traders shrugged off slight gains in the U.S. dollar.

Gold for April delivery climbed to a six-month high, up $7.90 at $670.70 an ounce on the New York Mercantile Exchange. On Thursday, gold closed up $5.50 at $662.80 an ounce.

The rally was triggered by oil futures, which have provided much of the direction for gold in recent weeks. Crude for March delivery topped $60 a barrel, its highest level since Jan 3.

Jane Fox : 2/9/2007 10:13:27 AM

TICKS have been quiet this morning. Range from +750 to -300

Jeff Bailey : 2/9/2007 10:13:23 AM

DJ- Spot Gold Hits 7-Month High of $665/oz As Funds Buy

Jeff Bailey : 2/9/2007 10:02:51 AM

10:00 Market Watch found at this Link

Jeff Bailey : 2/9/2007 9:56:15 AM

Bank of America (BAC) alert! $53.47 +0.28% ... recaptures its 12/29/06 close.

Keene Little : 2/9/2007 9:55:24 AM

The one thing I forgot to show on the SPX 60-min chart is the Fib projection where wave-5 = wave-1 if this leg up from yesterday is in fact the 5th wave. I put it on this chart and it was tagged at 1451.89 (and would be considered a "truncated 5th" only because it didn't make a new high above wave-3). This one is a distinct possibility. But any continued press higher now certainly raises the probability that SPX will head for at least 1455. Link

Jeff Bailey : 2/9/2007 9:52:00 AM

HSBC Holdings (HBC) $89.86 +0.08% ...

Jeff Bailey : 2/9/2007 9:50:56 AM

Wells Fargo (WFC) $35.56 (unch) ...

Jeff Bailey : 2/9/2007 9:50:13 AM

New Century Finance (NEW) $19.50 +1.35% ...

Keene Little : 2/9/2007 9:43:29 AM

The risk for the bulls here is that this leg up from yesterday's low could be the 5th wave in the move up from January 26th. In that case the 4th wave correction would have been an expanding triangle (megahorn). If the bearish divergence continues at a retest of Wednesday's high, or slightly higher, and then rolls over again it would help confirm that possibility. It's still possible SPX is gunning for 1455 but the risk of a rally failure at any time remains high. Link

Jane Fox : 2/9/2007 9:41:48 AM

TRIN at 0.69 is bullish.

Jeff Bailey : 2/9/2007 9:41:28 AM

Daimler Chrysler (DCX) $64.45 +2.70% ...

Jeff Bailey : 2/9/2007 9:40:58 AM

Ford (F) $8.84 +3.39% ...

Jeff Bailey : 2/9/2007 9:40:41 AM

General Motors (GM) alert! $35.91 +6.18% ...

Jeff Bailey : 2/9/2007 9:40:07 AM

Lear Corp. Agrees To Buyout From Icahn Group ... AP Story Link

Jane Fox : 2/9/2007 9:39:09 AM

The large caps have broken their respective PDHs but ER has only tagged its PDH.

Jeff Bailey : 2/9/2007 9:38:22 AM

Lear Corp. (LEA) $38.00 -5.16% ... released for trade.

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

VIX and TRIN both open below their respective PDLs supporting long positions.

Jeff Bailey : 2/9/2007 9:37:15 AM

Baker Hughes (BHI) $70.91 +0.66% ...

Jane Fox : 2/9/2007 9:36:51 AM

AD line is modestly bullish at +503 and AD volume above 0 and climbing. I would be long but tight stops.

Jeff Bailey : 2/9/2007 9:36:49 AM

Schlumberger (SLB) $65.16 +0.32% ...

Jeff Bailey : 2/9/2007 9:36:01 AM

Oil Service HOLDRs (AMEX:OIH) 139.87 +0.51% ... stick their head back above the rounding lower 200-day SMA. Did this Wednesday and found too much selling.

Jane Fox : 2/9/2007 9:25:35 AM

Gold breaks its overnight highs.

Jane Fox : 2/9/2007 9:21:57 AM

LONDON (MarketWatch) -- Alcatel-Lucent, the world's largest telecommunications-equipment maker, on Friday announced it will cut an additional 3,500 jobs, taking the total to 12,500, after it lurched into a fourth-quarter loss and forecast a drop in first-quarter sales

Jane Fox : 2/9/2007 9:21:18 AM

SAN FRANCISCO (MarketWatch) -- Fortress Investment Group priced its initial public offering at the top of the range late Thursday, raising $634 million as it becomes the first hedge fund firm to go public in the U.S.

The offering of 34.3 million class A shares was priced at $18.50, at the top end of a previously disclosed $16.50 to $18.50 range, according to an underwriter.

The IPO values Fortress at more than $7 billion and leaves the founders and principals owning just over three quarters of the business.

Fortress's move is a milestone in the history of the hedge fund business. In 1990, it was a $40 billion fraternity of private-investment partnerships. By the end of 2006, assets stood at more than $1.3 trillion, according to industry tracker Hedge Fund Research.

Jane Fox : 2/9/2007 9:18:22 AM

Crude finally broke $60.00 yesterday but retraced back under overnight.

Gold hit that number we were all talking about last August 666 yesterday and is posed to break it today.

The $ was strong overnight so I am a bit surprised that Gold held on to its gains.

TBonds are testing their PDLs. Link

Jane Fox : 2/9/2007 9:13:20 AM

It was your normal overnight session and does not give us any hints as to direction. Notice, however, where ES's overnight highs found resistance, its PDH. This should give you a good idea of bullish and bearish (or neutral). Over this resistance is bullish and under neutral. I would become bearish on this market if it closed under its PDL, which does not look it will happen today. Link

Keene Little : 2/9/2007 9:12:13 AM

We had a slightly bullish overnight session for equities (bonds are pulling back) but they've returned to the flat line. A little pop after the open could set up a short play. At least the risk is relatively tight since any rally above Wednesday's hight negates the bearish wave count and I would step out of any bearish plays in that case. It would be time to reevaluate.

Jane Fox : 2/9/2007 9:03:00 AM

WASHINGTON (MarketWatch) -- The U.S. economy should grow at a sustainable pace while inflation should continue to decline, said William Poole, the president of the St. Louis Fed bank, in a speech presenting his outlook on Friday.

"As I step back and survey the economic landscape, I see an economy that appears to be transitioning quite nicely from last year's slow patch, to more sustainable growth," Poole said in a speech prepared for delivery to the AAIM Management Association in St. Louis. Read entire speech.

Poole, a voting FOMC member this year, is one of three top Fed officials discussing the economic outlook on Friday. Next week, Fed chief Ben Bernanke will deliver the Fed's formal economic forecast to Congress when he testifies on Fed monetary policy.

Financial markets pay close attention to speeches by the St. Louis Fed president. A recent study of market impact of Fed speakers listed Poole as the second most market-moving Fed official after Bernanke.

Jane Fox : 2/9/2007 8:59:31 AM

Dateline WSJ - Steve Jobs helped negotiate an employment contract with a top film director that included a large stock-options grant with an especially well-timed date, according to a person familiar with the matter.

The options grant, part of a 2001 employment contract reached between Pixar Inc. and noted animated-film director John Lasseter, carried the lowest share price of the previous year -- on a date more than three months before the employment contract was actually signed. Mr. Jobs, then Pixar's chairman and chief executive, signed the agreement on behalf of Pixar.

It remains unclear what role, if any, Mr. Jobs played in selecting the prior grant date of the agreement's stock options. The grant is one of several the Emeryville, Calif., movie company awarded at yearly lows, a pattern that has raised questions about whether the Pixar grants were improperly backdated.

Market Monitor Archives