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Keene Little : 4/3/2007 10:51:37 PM

While expecting additional upside, with perhaps a continuation of the sideways/down consolidation first, the only caution I'll throw out there is to be careful about downside surprises. The mood of the market is changing and I'm expecting that to continue. Therefore always have an exit plan and be very careful about holding overnight longs right now. It seems easy to get the shorts to run for cover but one scare and this market will drop like a stone.

We've met the minimums for the bounce to be considered complete and therefore the upside targets I show on the charts are just that--they're targets, not guarantees. Just as they're not necessarily resistance, just possible places to look for a short entry if reached. One other chart to show is for the NYSE since it's showing potential to rally a tad higher as well. But just overhead is the top of its parallel up-channel from 2004 where price found support and resistance since hitting it in December. It's currently at 9420, only 23 points higher than Tuesday's high. And like the others, the negative divergence in RSI may continue to hold this back. Link

Keene Little : 4/3/2007 10:36:42 PM

Tuesday was a big day, and not just because of the big rally. By rallying above some key levels on the roadmaps we have some bullish wave counts that have taken over since negating the immediately bearish wave counts. For an explanation of each of the below charts you can check Tuesday's archives. But when asked which of the wave counts is my preferred I'll use the DOW's daily chart to show what I think will play out next. Link

The dark red wave count shows two Fib projections for an a-b-c move up from the March 14th low, the first at 12596 and the 2nd at 12814. The first is where the 2nd leg up (wave-c) = 62% of the 1st leg up (wave-a) and then the higher target is where there would be equality between the legs. The equivalent levels for SPX are 1455.14 and 1483.73. That would create a larger degree wave-B as the leg up from March 14th and it calls for a decline below the March low in wave-C as the next move. Any higher than 12814 and we're very likely looking at a move above 13K.

Here are the rest of the updated charts:
DOW 60-min: Link
SPX Daily: Link and 60-min: Link
NDX Daily: Link and 60-min: Link
RUT Daily: Link and 60-min: Link
GOOG Daily: Link and 120-min: Link
CME Daily: Link and 120-min: Link

Keene Little : 4/3/2007 10:14:55 PM

Wednesday's pivot tables: Link and Link

OI Technical Staff : 4/3/2007 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.

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Keene Little : 4/3/2007 8:40:08 PM

GOOG found support at its uptrend line from August 2004 and today gapped up and rallied above resistance near 466. The daily chart has been showing the possibility for a rally back to its highs as either part of a longer sideways consolidation or a push up inside a larger ascending wedge. Link

The other possibility, seen better on the 120-min chart, is that the leg up from March 14th is forming an expanding triangle for the end of the bounce. This is not as common as a contracting triangle (such as an ascending wedge) but it has the same ending pattern connotations. In this case the Fib projection near 483 would be the area I'd watch for a potential short play to set up. Link

Keene Little : 4/3/2007 8:27:28 PM

There hasn't been much of a change to the CME charts that we've been following since that one was more clearly pointing to the possibility for another push higher. The current leg up looks on target to hit its Fib projection just shy of 558 where it could turn back down and finish its sideways triangle consolidation since January. More bearishly it will turn back down and sell off hard. More immediately bullish it will continue rallying above 558 and the key level after that will be its last high near 575.
Daily: Link
120-min: Link

Keene Little : 4/3/2007 6:34:18 PM

The bulls really messed things up. I had some good wave counts for both sides but now the way the RUT is rallying it makes it very difficult to make some projections for what might be happening. So I'll just lay it out and we'll have to see how the pattern develops further. Starting with the daily chart, as I had mentioned earlier today, the higher low on March 14th makes it possible for the RUT to have a few different wave counts for its bounce, and it makes the chart look messy. Link

It's possible we have an impulsive count up from March 5th or a corrective a-b-c count up from March 14th. Interestingly they both point to the possibility that the end of the rally will be in the 821-823 area I mentioned yesterday. If it gets up there and the pullback continues to be corrective then we'll know it's probably pointing towards a higher Fib target near 840 if not 860.

I tried to simplify the 60-min chart a little bit and I'll update the potential wave counts once we get some more price action. Right now you want to trade this on the long side but it won't be long before we have another good shorting opportunity--the dark green count shows the impulsive count up from March 5th and the end of it points to the same 821-823 area as wave-C in the A-B-C move up from March 14th (where wave-C = 62% of wave-A). It would also be a retest of the broken uptrend line from August and it would close the gap from February 27th. Link

It's highly likely we'd get a pullback from that level so that's why I think it'll be a good short play. If the decline looks choppy and corrective then that would be an indication that the rally will press higher in which case I'd only be interested in the long side since it should lead to a strong rally. But that's later. Right now keep an eye on how the current rally leg develops.

Jeff Bailey : 4/3/2007 5:57:19 PM

Blair: UK Speaks With Top Iran Envoy, Urges Bilateral Talks

DJ- U.K. officials spoke for the first time Tuesday to Iran's chief international negotiator about 15 captured U.K. sailors and marines, Prime Minister Tony Blair's office said, calling for direct bilateral talks to end the 11-day-old dispute.

In a statement, Blair's Downing Street office said "both sides share a desire for an early resolution to this issue through direct talks."

Hours after Foreign Secretary Margaret Beckett cautioned against expecting a swift resolution to the crisis, Downing Street struck an upbeat note, announcing there had been "new contacts" between the two countries.

Blair said earlier Tuesday that the next 48 hours would be critical to resolving the standoff over the U.K. personnel, who have been held by Iran since March 23.

Jeff Bailey : 4/3/2007 5:39:34 PM

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

Jeff Bailey : 4/3/2007 5:25:48 PM

Google (GOOG) $472.60 +3.06% ... I think stock was upgraded today.

Net Stocks In the News Link

Jeff Bailey : 4/3/2007 5:23:50 PM

eBay (EBAY) $33.80 +2.42% ... probing 5-month highs again.

Jeff Bailey : 4/3/2007 5:21:09 PM

Closing Internals found at this Link

Jeff Bailey : 4/3/2007 5:21:04 PM

At 11:00 AM EDT this morning, SPX NH/Nl was 26:4, but that was just before my data vendor I've been using for years went down.

Jeff Bailey : 4/3/2007 5:20:57 PM

May Unleaded (rb07k) settled down $0.0251, or -1.23% at $2.0177.

Jeff Bailey : 4/3/2007 5:01:29 PM

May Crude Oil (cl07k) settled down $1.30, or -1.97% at $64.64.

Jeff Bailey : 4/3/2007 4:59:23 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 4/3/2007 4:48:45 PM

Nasty looking reverse h/s patterns developing in Natural Gas futures.

Jeff Bailey : 4/3/2007 4:44:01 PM

Oil should find some pretty good bids at WEEKLY S1 if traded.

Jeff Bailey : 4/3/2007 4:43:39 PM

PetroChina (PTR) $118.80 +0.35% ...

Jeff Bailey : 4/3/2007 4:43:17 PM

US Energy (USEG) $5.56 +2.96% ...

Jeff Bailey : 4/3/2007 4:37:51 PM

NYMEX is gridding Brent Crude futures today!

Keene Little : 4/3/2007 4:39:27 PM

For the shorter term view of NDX's possible wave counts, this 60-min chart shows more detail for the leg up from March 14th. While the key level for the bears is 1761 a break back below 1781 would be a heads up that something more bearish is happening. A break of its uptrend line from March 14th is currently near 1767. Link

But at this point it's the bulls' to lose. As long as pullbacks look corrective, and stay above the 50-dma near 1781, I see this working its way higher with the broader market. It might do it more weakly, which would be a bearish indication that some are not wanting to be in the higher-beta stocks, but it won't be bearish until we see firmer support breaking and some impulsive price action to the downside. Run with the bulls for now.

Jeff Bailey : 4/3/2007 4:31:51 PM

DOLLAR FINANCIAL TO MOVE LOANS TO WEB

DJ- Dollar Financial is developing an Internet-based lending platform for its three global units and expects to launch the service in the U.S. this month. Company backs previous forecast of fiscal 2007 revenue of $400 million to $405 million.

DLLR $25.79 +8.63% Link ...

Jeff Bailey : 4/3/2007 4:28:19 PM

Millennium Bankshares (MBVA) $10.00 -3.28% Link ... Company press release from 01/27/07 Link

Jeff Bailey : 4/3/2007 4:21:04 PM

MILLENNIUM DELAYS 10-K, CITES MORTGAGE OPS WRITE-DOWN

DJ- Millennium files with the SEC to delay its annual report because it has experienced difficulty in finalizing loss estimates in connection with winding down its mortgage operations.

Jeff Bailey : 4/3/2007 4:20:32 PM

KKR POSTS $104.5B BUYOUT VOLUME

DJ- Kohlberg Kravis Roberts' planned buyout of credit-card processor First Data takes the total spent by the private equity powerhouse to $104.5 billion already this year. Nearest competitor, TPG, has spent about $49 billion thus far.

Jeff Bailey : 4/3/2007 4:19:06 PM

GLOBAL INVESTMENT BANKING REVENUE UP 10%

DJ- Global investment banking revenue rises, helped by extra business from financial sponsors on the back of strong debt markets, research firm says. JP Morgan leads the revenue ranking, followed by Citigroup and Merrill Lynch.

Jeff Bailey : 4/3/2007 4:17:55 PM

Intuit (INTU) $27.43 +1.14% Link ...

Jeff Bailey : 4/3/2007 4:17:17 PM

H&R Block (HRB) $21.37 +0.51% Link ...

Jeff Bailey : 4/3/2007 4:16:38 PM

DOJ TARGETS 125 JACKSON-HEWITT SITES

DJ- Justice Department is trying to shut down 125 Jackson-Hewitt franchises in four states that are partially owned by one person and are alleged to have engaged in and facilitated 'a pervasive and massive series of tax-fraud schemes.'

JTX $26.53 -18.11% Link ...

Jeff Bailey : 4/3/2007 4:14:39 PM

INSURERS READY FOR 2007 STORM SEASON

DJ- Insurers are prepared to deal with increased hurricane activity in upcoming year, in part because they used the past year to get ready. Allstate has been the most aggressive in reducing its exposure in coastal regions.

Jeff Bailey : 4/3/2007 4:09:35 PM

USD/JPY looking to go out at highs of the session 118.98 +0.96% ...

Keene Little : 4/3/2007 4:06:08 PM

If you look at the length of time it took for the previous correction (before today's big rally), which took almost 2 days, that's probably how long the current correction will last. So a little deeper or more sideways can be expected through tomorrow. So far, unless this has been the start of a sneaky decline, the corrective consolidation today looks bullish.

Keene Little : 4/3/2007 4:02:57 PM

Because the techs and small caps have a slightly different pattern than the large caps, the wave count presents a couple of different possibilities. On the NDX daily chart I'm showing the possibility that the current bounce is only part of a larger developing bearish wave count (dark red) and this count portends a very hard sell off right around the corner. The trouble with that interpretation is that I have difficulty reconciling it with the pattern for the larger caps. Link

But if the bearish wave count is correct on this then you don't want to be long (since it'll probably start down with a downside surprise). A break below 1753 would likely see a strong decline to follow. The upside looks corrective and that suggests that if we are to proceed higher from here then it might do it in a larger ascending wedge over the next month (shown in green). A push above 1808 would confirm something more bullish is happening with this index as well.

Jeff Bailey : 4/3/2007 3:57:09 PM

PETsMart (PETM) $33.19 +0.94% Link ... notable 52-weeker at the NASDAQ.

Jeff Bailey : 4/3/2007 3:55:30 PM

US Importer: No Tainted Gluten Went To Food For Humans

DJ- None of the contaminated wheat gluten that led to the U.S. recall of pet food went to manufacturers of food for humans, the ingredient's importer said Tuesday.

The Chinese wheat gluten imported by ChemNutra Inc. all went to companies that make pet foods, Stephen Miller, chief executive officer of the Las Vegas company, told The Associated Press.

Miller declined to identify what companies ChemNutra supplied. Nearly 100 brands of cat and dog foods made with the ingredient, since found to be chemically contaminated, have been recalled.

The recalled pet food apparently has resulted in kidney failure in animals across the country. The Food and Drug Administration has confirmed 15 pet deaths, and anecdotal reports suggest hundreds of cats and dogs may have died.

FDA testing of the wheat gluten has revealed it was contaminated with melamine, a chemical with a variety of industrial uses, including the manufacture of plastic kitchenware. As late as Monday, FDA officials had said they were uncertain if the contaminated ingredient had been used in any foods destined for human consumption.

Last week, the FDA blocked wheat gluten imports from the Xuzhou Anying Biologic Technology Development Co. in Wangdien, China, saying it was the source of the contaminated product. The agency had refused to identify who had imported the ingredient, used as a protein source.

"Obviously, if this ingredient was responsible, it's just very upsetting," Miller told the AP.

Jane Fox : 4/3/2007 3:49:51 PM

This was a "get long and stay long" kinda day.

Jane Fox : 4/3/2007 3:47:08 PM

Hopefully you did not try any shorts today. Link

Jeff Bailey : 4/3/2007 3:41:41 PM

Golman Sachs (GS) $209.50 +1.87% ... after kiss of WEEKLY 38.2% pivot retracement ($209.61)

Jane Fox : 4/3/2007 3:40:53 PM

Ya I am back - just as the market closes. Sigh!

Jeff Bailey : 4/3/2007 3:39:39 PM

Treasury's Paulson Discloses Previously Omitted Mutual Fund Holding

DJ- U.S. Treasury Secretary Henry Paulson on Tuesday disclosed a mutual fund investment of less than $15,000 that had been omitted from his earlier financial disclosure reports.

In a letter to the U.S. Office of Government Ethics, dated March 28, a Treasury official said Paulson's accountant had "recently discovered that one of Mr. Paulson's assets, the Goldman Sachs Asia Equity Fund, was inadvertently omitted" from the secretary's financial disclosures.

Treasury spokeswoman Brookly McLaughlin said Paulson had just learned of the omission, which was the result of an "oversight," she added.

According to the paperwork released Tuesday, the investment is worth between $1,000 and $15,000.

"Because the asset is a diversified mutual fund and is valued at less than $15,000, it is my opinion that it poses no potential conflict with the secretary's duties," said Brian Knight, an ethics official at Treasury who signed Tuesday's letter.

Jeff Bailey : 4/3/2007 3:36:39 PM

Freeport McMoran (FCX) $67.34 +0.91% Link ...

Keene Little : 4/3/2007 3:36:36 PM

Looks the bears and the bulls are staring at each other across the table wondering who will blink first. Volume has dried up, which is fitting for a consolidation period. I can't quite figure out from this pattern whether we'll get a sell off or buying into the close. I'm thinking more shorts might cover if no pullback gets started. On the other hand, we're at resistance and some bulls might like to take some money off the table before going home tonight. Flip a coin, and I don't like playing coin tosses.

Jeff Bailey : 4/3/2007 3:34:59 PM

May Copper (hg07k) $3.31 +4.08%

Jeff Bailey : 4/3/2007 3:34:16 PM

Companhia Vale do Rio Doce (RIO) $38.77 +3.74% Link ...

Jeff Bailey : 4/3/2007 3:33:20 PM

Brazil's Real Closes At 6-Yr High of BRL 2.036 Per Dollar

Keene Little : 4/3/2007 3:32:09 PM

There are several ways the short term pattern could play out but so far the sideways consolidation is what I expected to see for the rest of today. It should resolve higher again tomorrow. The SPX 60-min chart is again similar to what I showed for the DOW. Upside Fib projections that we'll need to watch for potential failure of the rally, for the bearish wave count, are 1455 and then 1484. If we're into the bullish wave count then we should see only corrective pullbacks through the next month. Link

Jeff Bailey : 4/3/2007 3:12:07 PM

03:00 Internals found at this Link

Jeff Bailey : 4/3/2007 3:02:16 PM

03:00 Market Watch found at this Link

Keene Little : 4/3/2007 2:58:01 PM

The SPX daily chart here shows the same potential wave pattern possibilities as I showed on the DOW chart. For the bearish wave count the first upside Fib target is 1455 and then just shy of 1484. The bullish count shows a rally through the end of April that presses up to the 2000 high. Link

A break below last week's low near 1409 would negate the bullish wave count which projects SPX up to the 2000 high near 1553. Use the new parallel up-channel from the March 14th low as your guide now. I still wonder about that downtrend line on RSI...

Jeff Bailey : 4/3/2007 2:54:17 PM

CEGE PnF chart Link

Jeff Bailey : 4/3/2007 2:52:31 PM

Oh my! ... Cell Genesys (CEGE) $5.82 +35% ...

Jeff Bailey : 4/3/2007 2:47:00 PM

Bavarian Motor Works' US Domestic Sales up 2.2% ... MarketWatch Story Link

Jeff Bailey : 4/3/2007 2:45:02 PM

Nissan Motor (NSANY) $21.59 +0.23% ...

Jeff Bailey : 4/3/2007 2:44:17 PM

Nissan Motor March Sales Up 7.8% ... MarketWatch Story Link

Jeff Bailey : 4/3/2007 2:40:33 PM

Forex Factory's Domestic Sales forecast was for 12.8 Million rate.

Jeff Bailey : 4/3/2007 2:39:53 PM

DJ- US March Domestic Auto Sales Said 12.2-12.4 Million Rate

Jeff Bailey : 4/3/2007 2:39:19 PM

DJ- US March Total Auto Sales Said 16.1-16.2 Million Rate

Jeff Bailey : 4/3/2007 2:37:56 PM

Ford Motor (F) $8.13 +0.49% ...

Jeff Bailey : 4/3/2007 2:37:31 PM

DaimlerChrysler (DCX) $82.95 -1.27% ...

Jeff Bailey : 4/3/2007 2:37:00 PM

General Motors (GM) $31.48 +2.10% ...

Jeff Bailey : 4/3/2007 2:36:39 PM

Toyota Motor (TM) $126.93 (unch) ...

Jeff Bailey : 4/3/2007 2:35:54 PM

Toyota Sales Up; GM, Ford, Chrysler Fall ... AP Story (recap) Link

Jeff Bailey : 4/3/2007 2:34:57 PM

GM March Sales Fall 4% ...

Jeff Bailey : 4/3/2007 2:18:43 PM

Just the mention of subprime has some impact.

Keene Little : 4/3/2007 2:18:36 PM

Gold's weakness now is a bit surprising (naturally since I got spiked out of my short). YG has now broken its uptrend line from yesterday and I would have expected that to hold if we were getting another leg up in the shiny metal. But, the metals have been whacking around sideways for almost two weeks now so broken trend lines is to be expected in times like this. The pullback from this morning's high looks corrective enough to have me watching and waiting to see what's developing here.

Jeff Bailey : 4/3/2007 2:18:15 PM

GS $208.63 +1.44% ... Thanks Jimmy C ... 01:36 PM EDT article Link

Jeff Bailey : 4/3/2007 2:14:18 PM

M&T Bank Corp. (MTB) $105.82 -0.12% ... should probably add to my "Market Watch"

Keene Little : 4/3/2007 2:12:50 PM

The DOW is struggling with its March high and the 62% retracement of the Feb-Mar decline (12509) as it's still in "throw-over" territory here. But I think the bulls will prevail as important resistance levels have been broken. This 60-min chart shows the close-up action for the leg up from March 14th. It will either be an A-B-C move up (dark red), or we're just into the start of the 3rd wave up (green). Link

The first Fib resistance, as mentioned for the daily chart, is at 12596 and then 12814. But if the bullish count is the correct one then we'll see at least 500 points above that. As on the daily chart, the key level for the bears is previous low at 12243 but a break below the uptrend line from last Friday would be a heads up for a potential break lower.

Jeff Bailey : 4/3/2007 1:47:51 PM

Maybe sell a GPY-DB near GS $215, pick up some USO just below $52.00?

Jeff Bailey : 4/3/2007 1:46:33 PM

Goldman Sachs (GS) $209.14 +1.69% ... testing bar chart's downward trend.

Jeff Bailey : 4/3/2007 1:45:58 PM

Would really like to see more selling into that recent 03/27 to 03/28 gap on USO.

Keene Little : 4/3/2007 1:45:49 PM

Now the others are following higher but YM is holding back. Something weird going on here.

Keene Little : 4/3/2007 1:44:51 PM

What the heck was that in the DOW and YM? A sudden blast higher not matched by the others and then a quick pullback. Fat fingered trade?

Jeff Bailey : 4/3/2007 1:44:50 PM

US Oil Fund (USO) $52.74 -1.55% ... testing WEEKLY Pivot here.

Keene Little : 4/3/2007 1:42:55 PM

Working on some upside projections here. If the February high was the end of the rally from last summer, then the current bounce would be a b-wave correction to the decline into the March low(which would have been wave-A in that case, labeled in dark red). Link

Since b-waves can overlap the previous high in this case we can't use that as our guide as to where this could get to. So looking at the 2nd leg up (wave-C), starting from last Friday's low, the Fib projections are at 12596 (62% of the 1st leg up) and 12814 (equality between the two legs up). A failure at 12814 would be a clear double top. The key level for the bears is a move back down below 12242.

That would be the bearish wave count. It could of course fail at any time but that's not what I see happening. The bullish wave count calls the March low the end of the 4th wave in the longer term rally pattern. That says we need a 5-wave move to a new high, labeled in green. It projects the DOW above 13K but shy of 13500. The interesting thing to watch here, as far as the daily oscillators, is to see if the downtrend line holds them down.

Jeff Bailey : 4/3/2007 1:40:02 PM

Good Gravy ... SIL $14.07 +6.51% ...

Jeff Bailey : 4/3/2007 1:31:14 PM

Go too far out the money on calls and VIX.X can eat you up.

Jeff Bailey : 4/3/2007 1:30:14 PM

GPY-DB $3.50 x $3.60

Jeff Bailey : 4/3/2007 1:29:14 PM

VIX.X 12.96 -10.80% ...

Jeff Bailey : 4/3/2007 1:28:19 PM

Goldman Sachs (GS) $208.85 +1.55% ... intra-day new high. Bar chart downward trend just ahead at $209.00

Marc Eckelberry : 4/3/2007 1:26:27 PM

NQ 1818/1819 is R, but you can still find some slightly lagging tech stocks with a bullish set up. I think NQ is headed for 1840. I like NVDA and INTC.

Jeff Bailey : 4/3/2007 1:26:15 PM

XBD.X 238.50 +1.80% ... intra-day new high.

Marc Eckelberry : 4/3/2007 1:25:05 PM

YG needs to hold 670 now, no fooling around anymore.

Jeff Bailey : 4/3/2007 1:22:00 PM

01:00 Internals found at this Link

Jeff Bailey : 4/3/2007 1:15:37 PM

If we're at 263 NH on the big board,that's very bullish.

Jeff Bailey : 4/3/2007 1:14:55 PM

Shoot! Data source for NH/NL is "stuck" or not updating now. May have to use Yahoo Finance's again. Link

Marc Eckelberry : 4/3/2007 1:11:22 PM

Note the oil bid off 200 ema. They are not ready to dump QM completely. I am waiting fro 62.50 area to buy ahead of the summer, but that might not happen. 65.40 is R.

Jeff Bailey : 4/3/2007 1:06:16 PM

PetroChina (PTR) $118.59 +0.17% ...

Jeff Bailey : 4/3/2007 1:05:33 PM

Exxon/Mobil (XOM) $76.63 +0.61% ... challenges its 12/26/06 close. A "general" returns.

Marc Eckelberry : 4/3/2007 1:05:11 PM

Dan, we should be fine, it seems IMF ok'd central banks to load up on gold as an alternate currency. They are dumping dollars on rallies and even Euros and buying gold. Quick contact if you need it: marc@aheadofthenews.com


Jeff Bailey : 4/3/2007 1:02:18 PM

01:00 Market Watch found at this Link

Jeff Bailey : 4/3/2007 12:56:30 PM

Bullish % Auto (BPAUTO) ... as of last night was still "bull correction" status at 74.74%. February high measure 84%, has seen reversal to 72.00% on chart. Need 68% to get "bear alert"

Keene Little : 4/3/2007 12:51:01 PM

Playing the breakdown in VIX yesterday afternoon from its sideways triangle (by getting long the market) turns out to have been the right play as I would have been positioned for this morning's gap up. Too bad I didn't take it. It would have been a good hedge against my metal shorts. Link

Now if the market continues its rally, as I think it will, we should see VIX drop back down near 11 (uptrend line from December). If that's coinciding with the NYSE approaching 9500 and RUT 821-823, then I'll be more confident about the short side again. But for now we need to be running with the bulls.

Jeff Bailey : 4/3/2007 12:50:45 PM

Goldman Sachs' (GS) $208.19 +1.23% ... QCharts WEEKLY Pivot Levels ... $200.32, $203.45, Piv= $207.83, $210.97, $215.35.

April's "Max Pain Theory" currently tabulated at $200.00 ($5 increments below $200, $10 above)

Jeff Bailey : 4/3/2007 12:47:44 PM

XBD.X ... QCharts' WEEKLY Pivot Levels ... 227.33, 230.90, Piv= 236.47, 240.04, 245.61.

Jeff Bailey : 4/3/2007 12:45:25 PM

Little "pennant" forming for XBD.X on 30-minute interval chart.

Jeff Bailey : 4/3/2007 12:39:03 PM

iShares Japan (EWJ) $14.64 +1.03% Link ...

Jeff Bailey : 4/3/2007 12:38:15 PM

Toyota Motor (TM) $127.00 +0.06% Link ... reversing earlier losses. Today's trade at $126.00 a triple bottom sell signal. Will check sector bullish %. Potential "bear trap" if autos in "bull mode"

Jeff Bailey : 4/3/2007 12:35:58 PM

Ford Motor (F) $8.10 +0.12% Link ...

Jeff Bailey : 4/3/2007 12:34:56 PM

Ford Motor March Auto Sales ... Company Press Release Link

Jane Fox : 4/3/2007 12:33:34 PM

How do you produce your spreadsheet? What determines green or red? (I like it!)

I will show all the charts I use to produce my SS once I get my internet back.

Jeff Bailey : 4/3/2007 12:32:58 PM

Correction ... Chrysler's sales were for March

Keene Little : 4/3/2007 12:20:11 PM

It's quite possible we're only going to see a sideways/down consolidation near today's highs that takes up the rest of the day. In other words, other than small scalps today's trading may be done.

Jeff Bailey : 4/3/2007 12:20:01 PM

SPG's session high has been $114.91. Several days ago I made mention of a BIG volume spike that took place on Friday, 03/23/07 at $114.89, where that volume eventually saw the stock's price fall.

We're there now and tense moments for bulls and bears.

Keene Little : 4/3/2007 12:14:13 PM

I forgot to mention on the RUT daily chart, where I show upside Fib potential to the 821 area, if the rally takes another couple of days to finish and tags its broken uptrend line from August, it will also close its gap from February 26th at 823.69. Unless I see something develop to the downside that looks bearish I think buying the dips is what we should be looking to do until that level is reached. Then I'll be looking for another shorting opportunity.

Jeff Bailey : 4/3/2007 12:32:18 PM

Chrysler's March U.S. Sales Slip 4.6%

Company Press Release Link

Jeff Bailey : 4/3/2007 12:04:50 PM

CHRYSLER FUTURE MAY BE ANNOUNCED NEXT WEEK

DJ- German-U.S. auto maker DaimlerChrysler may meet possible buyers of its U.S. unit early next week in New York and possibly close a deal, German magazine Wirtschaftswoche reports.

DCX $83.43 -0.70% Link ...

Jeff Bailey : 4/3/2007 12:04:47 PM

UK SHARES IRAN'S PREFERENCE FOR EARLY TALKS

DJ- U.K. government says that it and Iran share the goal of 'early bilateral discussions' to end the crisis over a captured U.K. naval crew. Separately, an Iranian diplomat kidnapped in Baghdad in February has been released and Iraq says it's seeking release of five Iranians held by U.S.

Keene Little : 4/3/2007 12:02:23 PM

The pattern for the NYSE (NYA.X) looks similar to the one I just showed for the RUT, except for the new low that was made on March 14th. If I ignore that spike low (which is not the right thing to do in an EW pattern) then there is a potential for a 5th wave up like for the RUT. The projection for it is just shy of 9500 which would also be a retest of its broken uptrend line from July. The top of its longer term parallel up-channel from 2004 is currently near 9416. Notice that this has the potential to make a double top against its February high. Link

Jeff Bailey : 4/3/2007 12:04:42 PM

S&P Banks Index (BIX.X) 386.64 +1.46% Link ...

Jeff Bailey : 4/3/2007 12:00:53 PM

MOODY'S MAY CUT RATINGS ON 40-50 BANKS

DJ- Ratings agency identifies 40-50 banks whose ratings under the revised joint default analysis bank rating methodology are being placed on review for downgrade.

Jeff Bailey : 4/3/2007 11:56:53 AM

Japan, China Agree To Accelerate Gas Field Development Talks - Kyodo

DJ- Japanese Foreign Minister Taro Aso and his Chinese counterpart Li Zhaoxing agreed Tuesday to accelerate negotiations over a bilateral gas dispute, a Japanese official said, Kyodo News reported.

The two made the agreement when they met during Aso's trip to India, the report said.

Jane Fox : 4/3/2007 11:54:03 AM

If the SPX or the DWC weekly jtHMA changes to green by Friday then I will be putting IRA funds back to work. I do think we will visit yearly highs soon. Heck with the way this market moves maybe this week.

Jane Fox : 4/3/2007 11:51:47 AM

All of Oregon, Washington and a few cities in Northern California do not have Charter internet. Great big sigh! Maybe I should just hit the gym and forget about it for the rest of the day.

Jane Fox : 4/3/2007 11:49:07 AM

Here is the spreadsheet. Please remember this is as of last night and I know it has changed today. What I found interesting is that if you wanted to get long this market you should have used the mid caps. I am long IWM, the small caps and suggested in the monitor to get long the S&P. Notice also the US$, which is only good for my long GLD position. Link

Jeff Bailey : 4/3/2007 11:47:45 AM

SPG $114.62 +1.72% ... has broken above bar chart downward trend ($113.97). Trades WEEKLY R1 here.

Keene Little : 4/3/2007 11:43:18 AM

The RUT has also rallied above the March high, thus negating its bearish wave count. We're now into the bullish wave count so now it's time to look at some potential upside targets. The RUT is the only one that supports a potential impulsive wave count off the March 5th low (no overlap between the highs and lows and the March 14th low was a higher low. Therefore it's hard to know whether the RUT is on a different count than the others. Link

What's interesting about the setup on the RUT, as shown on its daily chart, is the Fib projection for a 5th wave in the move up from March 5th at 821.24 (where it will be equal to the 1st wave in the move up). This coincides with a potential retest of its broken uptrend line from August.

Looking a little closer at the rally from last week's low, the wave count looks to be in the middle of completing its 5-wave move. Some consolidation near the high should be followed by stair-stepping higher to that 821 area. From there we would be due at least a pullback and therefore it would be the next level to watch for a short to set up (just in case this move up finishes off the rally). Then we'll have new key levels to watch in order to help determine whether or not this market has much higher levels in store for us. Link

Jeff Bailey : 4/3/2007 11:36:57 AM

XBD.X 237.83 +1.51% ...

Jeff Bailey : 4/3/2007 11:35:58 AM

VIX.X 13.23 -8.94% ...

Jeff Bailey : 4/3/2007 11:35:14 AM

Bullish swing trade call option alert ... for one (1) of the Goldman Sachs GS Apr $210 Calls (GPY-DB) at the offer of $3.20.

No stop for now, target $215 in the underlying.

GS $207.92 +1.10%

Jeff Bailey : 4/3/2007 11:19:05 AM

11:00 Internals found at this Link

Jane Fox : 4/3/2007 11:08:32 AM

The spreadsheet is on my other computer and since I do not have an internet connection my connection between my two computers is down as well. I will figure this out.

Jane Fox : 4/3/2007 11:06:15 AM

Last week I introduced an indicator that I have used for a long time called the jtHMA. I downloaded it from the Tradestation forum and use it on the monthly and weekly charts. I have just recently started using it to time my daytrades but the concept of how I use it was based on another daytrading system. I asked the fellow who developed the system (although it uses a different indicator) if he thought I was revealing proprietary information and he thought I could be. Therefore I cannot reveal how I use the jtHMA to daytrade.

That is OK because there are many out there who do not use TS and would not have access to this indicator anyway. But that does not stop me from showing you another really neat trick.

Remember when I showed you the jtHMA on the monthly and the weekly and how I will use the weekly charts to time my longer term (IRA) trades? Well I have extended this concept a little further to the monthly, weekly, daily, 120 minute, 60 minute, 30 minute and 15 minute charts. Then I put the colors of the jtHMA on an Excel spreadsheet. It gives you a very visual idea of where each market is and how bullish or bearish each one is. I will try to get the spreadsheet uploaded for you to see.

Please remember though it is as of last night because I do not have charts.

Marc Eckelberry : 4/3/2007 11:05:16 AM

Hurricane season could get oil up to 70, regardless of Iran.

Marc Eckelberry : 4/3/2007 11:06:30 AM

Gold is telling us it sees some housing weakness after this bump, inventories are still high. I also think many funds are buying gold as a hedge on tday's equity rally. It is bullish for gold to see a bid even though oil is falling hard and the dollar is up, although modestly.

Jeff Bailey : 4/3/2007 11:02:41 AM

11:00 Market Watch found at this Link

Keene Little : 4/3/2007 11:00:22 AM

Out of my silver short as well. Oh well, the setups were good but no follow through to the downside so now I'll watch the pattern of the pullbacks for opportunities to get long.

Marc Eckelberry : 4/3/2007 10:57:34 AM

NQ tagged my target of 1818, I am now looking at individual stocks such as INTC, about to break trendline R at 19.30.

Jeff Bailey : 4/3/2007 10:57:23 AM

Sure looks like some PnF-ers trading USO.

Marc Eckelberry : 4/3/2007 10:56:44 AM

I got back into gold on that dip to 669. It seems that copper bid really holding up metals even with the drop in crude. Stops should be moved up to 667 for YG.

Jane Fox : 4/3/2007 10:56:06 AM

Sounds like we are having a wonderfully bullish day.

Jeff Bailey : 4/3/2007 10:57:04 AM

USO $52.31 -2.33% Link ... session low $52.05.

Keene Little : 4/3/2007 10:55:51 AM

The DOW has pushed marginally above its March high and that negates the bearish wave count. NYSE has done the same thing. I suspect the others will follow--at today's high SPX is only a point away. It doesn't mean the market will plow higher from here, since it could very well find the March highs to be resistance and we'll now get a pullback, but at this point I'm abandoning the bear side in favor of the sidelines until the larger pattern becomes clearer.

Jane Fox : 4/3/2007 10:55:34 AM

Help I have lost my high speed connection and cannot get quotes (said to the tune of Help I have fallen and cannot get up).

Jeff Bailey : 4/3/2007 10:55:03 AM

USO's WEEKLY Pivot Levels ... $49.17, $51.29 (good buy), Piv= $52.74, $54.86 (incredible strength), $56.31

Jeff Bailey : 4/3/2007 10:51:00 AM

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

Jeff Bailey : 4/3/2007 10:42:53 AM

Wow! SIL $13.48 +2.04% ... I exited the long at $13.35. Up 4.01% last 20-days.

CDE $4.33 +0.69% ... up just 0.93% last 20-days.

Jeff Bailey : 4/3/2007 10:38:48 AM

CSU's Hurricane Forecast hit the wire at 09:47 AM EDT, but 10:00 as close as I could get.

Jeff Bailey : 4/3/2007 10:37:41 AM

At 10:00 AM EDT the US Oil Fund (AMEX:USO) was trading $52.58.

Keene Little : 4/3/2007 10:34:18 AM

The pattern of the pullback/decline will now be very important. For example, the pullback so far is only a 3-wave move (looking at a 1-min chart). Until we see a 5-wave decline then the trend remains up.

Jeff Bailey : 4/3/2007 10:32:55 AM

10:00 AM EDT Crude Oil, Unleaded, Nat. Gas Benchmarks (May-October) at this Link

Keene Little : 4/3/2007 10:30:09 AM

The bulls are close to doing something important here but they've got to keep this rally alive. I've changed the key levels on the SPX chart to show the setup now. A contiuation above the March high negates the bearish count and would be potentially very bullish. I certainly would not want to be short the market any longer if that happens. So 1439 is now the key level for the bulls. Link

It takes a drop back below 1416 to suggest the bears are back in control although a break below this morning's low would be a heads up that the upward correction has finished and the next large decline may be starting. I still like a short from here with a stop above the March high since the risk is small.

Marc Eckelberry : 4/3/2007 10:27:42 AM

Gold is riding the copper rally. Bullish for now.

Keene Little : 4/3/2007 10:20:34 AM

A downtredn line from the March high for NDX (instead of February's high) shows price stalled at the line. Link

Jeff Bailey : 4/3/2007 10:14:51 AM

If long YM on break above 12,507, would protect gains here 12,547.

SPX "stalled" at WEEKLY R1.

Jeff Bailey : 4/3/2007 10:12:16 AM

CME's Regional Housing Futures Table (Aug'07, Nov'07 and Feb'08 to Friday's closing benchmarks at this Link

Keene Little : 4/3/2007 10:08:38 AM

As the DOW approaches its March high the bulls need to hope the rally can keep on going otherwise a turn back down, with a lower MACD and RSI high, will look like a clear double top. Link

Jeff Bailey : 4/3/2007 10:08:15 AM

Pending US Home Sales Increase Modestly In February - NAR

DJ- A forecasting tool for sales of previously owned homes rose in February.

The National Association of Realtors' index for pending sales of existing homes increased at a seasonally adjusted annual rate of 0.7% to 109.3 in February from January's 108.5, the industry group said Tuesday.

Its index, based on signed contracts for used homes, was 8.5% below the level of February 2006.

"If it wasn't for the unusually bad weather in February, we'd be seeing a better performance in pending-home sales," NAR chief economist David Lereah said. "We also may be seeing some fallout from a decline in subprime lending, but a slight improvement in the more volatile month-to-month index is encouraging - the data suggests an underlying stabilization is taking place in the housing market, but it will take another month or two to clarify."

Lereah added, "Problems in the subprime mortgage market will become more apparent over time, and they will modestly depress the overall level of improvement in existing-home sales we expect as the year progresses."

By region, the index showed a 1.3% decline in the Northeast in February from January - and an 8.2% decrease since February 2006. The index increased 2.9% in the Midwest - but was down 9.7% in the 12-month span. The South saw a 4.5% rise - and an 8.0% decline in the past year. The index for the West fell by 6.0% - and was 8.2% lower since February 2006.

The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.

Existing-home sales unexpectedly climbed in February, rising to a 6.69 million annual rate, the NAR said. Weather was seen as a factor, and subprime mortgage woes could reduce some demand down the road. Inventories of homes rose 5.9% in February to 3.75 million available for sale.

Jeff Bailey : 4/3/2007 10:04:53 AM

VIX.X 13.59 -6.46% ...

Jane Fox : 4/3/2007 10:04:51 AM

I use Charter for my ISP and apparently they use At&t's backbone. It looks like Keene is OK though. He must use a provider that does not use At&t's backbone.

Jeff Bailey : 4/3/2007 10:04:29 AM

S&P 500 (SPX.X) 1,434.50 +0.69% ... bold move from WEEKLY Pivot

Jeff Bailey : 4/3/2007 10:03:44 AM

If bulls were "banking" on the banks, they're getting some lift!

Jeff Bailey : 4/3/2007 10:02:41 AM

10:00 Market Watch found at this Link

Keene Little : 4/3/2007 10:01:36 AM

Getting the pop so watch those levels now--this could be a good setup for the brave to get short. Use the March highs for your stop.

Jane Fox : 4/3/2007 9:59:57 AM

At&T's backbone on the west coast is down so I have no High Speed internet. I am limping along on dial-up and needless to say cannot run my charts.

Jeff Bailey : 4/3/2007 9:58:58 AM

Colorado State University: 9 Hurricanes, 5 Intense In June-November Season

DJ- The 2007 Atlantic Basin hurricane season likely will be "very active," with 17 named storms, nine hurricanes, including five intense storms ranked as Category 3 or above, forecasters at Colorado State University said Tuesday.

Forecaster Phil Klotzbach said the season won't be as active as the 2004 or the 2005 season, which was noted for the landfall of Hurricanes Katrina and Rita.

In 2006, no hurricanes made landfall along the U.S. coastline.

The probability of a major hurricane making landfall along the U.S. coastline is 74% compared with the last-century average of 52%, Klotzbach said.

There is a 50% chance that a hurricane could make landfall on the East Coast, including the Florida peninsula, compared with a long-term average of 31%, the forecasters said.

There is a 49% chance of a major hurricane making landfall on the Gulf Coast, from the Florida Panhandle west to Brownsville, Texas, compared with a long-term average of 30%. The region houses a large portion of the U.S. oil refining industry and sustantial offshore oil and gas production.

In 2006 the season included 10 named storms, five hurricanes and two intense hurricanes with sustained winds of 111 miles per hour or greater.

Long-term averages are for 9.6 named storms, 5.9 hurricanes and 2.3 intense hurricanes per year in the season that runs from June 1 to Nov. 30.

Keene Little : 4/3/2007 9:55:37 AM

Right now it looks like the indices could be in synch to tag the levels I identified earlier for potential resistance--NDX 1791, SPX 1434 and DOW 12484. The bulls just need to keep the buying going a little longer.

Jeff Bailey : 4/3/2007 9:52:46 AM

Coeur D' Alene (CDE) $4.27 -0.69% ... just above its WEEKLY R1 ($4.26).

Jeff Bailey : 4/3/2007 9:52:07 AM

iShares Silver (SLV) $133.00 +0.43% ... just above its WEEKLY Pivot ($132.82)

Jeff Bailey : 4/3/2007 9:51:36 AM

SIL $13.35 +1.05% ... just above its WEEKLY Pivot ($13.25)

Jeff Bailey : 4/3/2007 9:48:25 AM

CDE $4.26 -0.93% ...

Jeff Bailey : 4/3/2007 9:48:04 AM

Selling long SIL from yesterday's "looks cheap"

Keene Little : 4/3/2007 9:47:59 AM

YG poked through its downtrend line and snagged my stop at high tick. If it drops back down now without me, well, my dog better go hide. Only kidding, I kick the kids instead.

Keene Little : 4/3/2007 9:45:49 AM

I'm still short silver and have my stop just above the last high at 13.48.

Marc Eckelberry : 4/3/2007 9:44:59 AM

I guess my gold bias of yesterday was still valid. Gold shorts just got whacked.

Keene Little : 4/3/2007 9:44:43 AM

Looks like the metals and equities are still in synch and rallying together this morning. I'm out of my gold short at 672.80 at breakeven. It's possible this is a whipsaw but I'm joining Marc on the sidelines until the dust settles. See Marc, sometimes we do agree (wink).

Jeff Bailey : 4/3/2007 9:39:38 AM

Accredited Home Lenders Secures New Financing From 2 Banks

AP Story Link

LEND $10.45 +23.34% ...

Marc Eckelberry : 4/3/2007 9:24:57 AM

Don't argue with price and forget your bias if stocks rally. I don't think we will see a strong reversal as we are breaking out of a multi-day coil.

Marc Eckelberry : 4/3/2007 9:25:21 AM

NQ long from 1779.50 was exited at overnight 1798.25, I am going to re-enter on a drop in gap or 1794.50 if it holds. That one is bullish.

Marc Eckelberry : 4/3/2007 9:21:45 AM

I'm flat gold until the dust settles, Rates are going up and oil could drop heavily. If we get back above 670, I would consider a re-entry.

Keene Little : 4/3/2007 9:20:39 AM

With equity futures up as much as they are this morning, which is the result of a fairly steady climb during the overnight session, it would appear we're going to see prices follow a path at least similar to the light red one that I showed for NDX ( Link ). As I had mentioned yesterday, its downtrend line is near 1790 and two equal legs up in its bounce off the March 29th low is at 1791.55. A push above 1792 would signify something potentially more bullish is happening.

I have SPX 1429 as a key level for the bulls but watch 1434 if it gets that high since I have a Fib projection for this bounce at that level which could mark a top for it. The equivalent level for the DOW is at 12484 which means a break above its key level at 12420 would be bullish and then I'll be watching price action as they approach the March highs for the potential for a double top. But keep an eye on NDX since it could be our indicator for what's next.

Jane Fox : 4/3/2007 9:17:17 AM

I think this drop in oil is very healthy, of course you have to be careful it doesn't drop too far but support is very clear. But a revisit back to 62.00 support is not out of the picture. Link

Jane Fox : 4/3/2007 9:13:39 AM

The line in the sand for my GLD position is 658-661 on a EOD basis, that means Gold has to CLOSE below with support before I will step aside. Link

Jane Fox : 4/3/2007 9:11:22 AM

US $ strong and crude oil weak makes for a weak gold chart and that is exactly what we have but, as far as my long GLD position is concerned, I try really hard not to take note of these day to day gyrations. However, there are times when I see a really good setup, like I did yesterday, and I will daytrade gold. Link

Marc Eckelberry : 4/3/2007 9:10:23 AM

Gold holds on to support but it's precarious. NQ on the other hand is cranking. If 1794.50 holds at the open, we could see 1818 soon. Lots of short covering in stocks.

Jane Fox : 4/3/2007 9:04:22 AM

All markets broke their PDHs overnight and all have made higher highs and lows. There is no doubt as to who has the ball. I suspect the AD line will open very strong. Link

Jane Fox : 4/3/2007 8:54:33 AM

April 3 (Bloomberg) -- Crude oil fell after U.K. Prime Minister Tony Blair said the U.K will negotiate with Iran on the release of 15 British captives, easing concern the dispute would disrupt crude supplies from the Middle East.

Britain wants to maintain "peaceful and calm negotiations" to free sailors and marines, Blair said today. Iranian Vice President Parviz Davoudi said he expects the conflict to be resolved "soon," Agence-France Presse reported.

"We are getting some softer tones," Kevin Kerr, the president of Kerr Trading International, said from Wilton, Connecticut. "That's pushed the oil back down a bit."

Crude oil for May delivery declined as much as $1.21, or 1.8 percent, to $64.73 a barrel in after-hours electronic trading on the New York Mercantile Exchange and was at $65.07 at 1:15 p.m. London time. Oil has risen about 5.4 percent since the sailors and marines were seized, on March 23.

Marc Eckelberry : 4/3/2007 7:35:17 AM

Retail sales at 7:45 will have an impact on the dollar and gold.

Marc Eckelberry : 4/3/2007 7:27:46 AM

YG trendline support is around 665, 50 dma is 666/667. I don't think gold would come back from a strong drop below that as it has the past three days. If we don't get back above 668 soon, I would take some chips off. We are coiling with lower highs and higher lows, it can go either way, but it seems equities have decided north and oil is thinking south.

Marc Eckelberry : 4/3/2007 7:17:10 AM

I need to caution gold longs on a potential big drop in crude should the Iran crisis get resolved. Be disciplined with your stops. Confluence weekly and daily pivots at 668/669 will be an important overnight battle. Oil is trading below 65 and the dollar has a bid. YG could not get much higher than 670 after yesterday's bounce, so I am watching these developments carefully. ON the other hand, NQ is doing very well, now trading above weekly pivot of 1794.50.

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