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Marc Eckelberry : 4/19/2007 2:59:17 AM

Monday's gap close for NQ is 1832, looks likely.

Marc Eckelberry : 4/19/2007 2:39:34 AM

Nokia will be releasing in a few hours. The Yen keeps climbing. ES and NQ lose S1.

Marc Eckelberry : 4/19/2007 1:03:42 AM

Everyone is fearing a repeat of February. It's highly unlikely.

Marc Eckelberry : 4/19/2007 1:02:12 AM

April 19 (Bloomberg) -- Asian stocks slid from a record on concern economic growth and inflation reports being released today in China will lead to higher interest rates in the region's second-largest economy. China Mobile Ltd. led the drop. Link

Marc Eckelberry : 4/19/2007 12:29:46 AM

NQ could go all the way down to 1820 and still be at trendline support and 20 DMA. That's how far we've come.

Marc Eckelberry : 4/19/2007 12:28:01 AM

YM is miles away from its 10 DMA (12700). That is an accident waiting to happen, but it does not mean bulls are done, just over-extended. I was hoping NQ would hit weekly R2 at 1862, but unless the Yen reverses overnight, it might not happen this week. You should not be long on that loss of 1847. Line in the sand for the markets is NYSE 9455/9460.

Marc Eckelberry : 4/19/2007 12:14:45 AM

Don;t forget that this is opex week, not end of month. If the dollar gets some gains back pre-open, they will blast all the overnight shorts. Use caution either way, these guys will do anything to hold things up.

Marc Eckelberry : 4/18/2007 11:43:17 PM

Gold is a carry trade, so don't use that as a hedge, at least for now. Buying the Yen was the best bet, it seems. USD/JPY now below 118.

Marc Eckelberry : 4/19/2007 12:12:59 AM

When I posted the JPY long recommendation, we were at 0.008518. Now trading 0.008541. Move stops up to even and let them play it out. This should cover any cash position damage should the Yen keep climbing, although USD/JPY 118 is supportive. Watch YM 12813 support.

Marc Eckelberry : 4/18/2007 11:31:03 PM

JPY above 50 dma for the first time in April. Time to play defense. The jobs report better prop up the dollar. This time around, no one wants to see further weakness.

Keene Little : 4/18/2007 11:17:40 PM

Updated 60-min charts: for the indices:
DOW: Link
SPX: Link
NDX: Link
RUT: Link
NYSE: Link

Keene Little : 4/18/2007 11:07:14 PM

Thursday's pivot tables: Link and Link

Marc Eckelberry : 4/18/2007 10:27:04 PM

NQ dropped 1847 support and you should be flat equities until the dust settles. The dollar will need to catch a bid pre-open to calm some nerves.

Marc Eckelberry : 4/18/2007 10:14:58 PM

If you have long positions you can hedge with JPY June above 0.008514, 20 dma.

Marc Eckelberry : 4/18/2007 10:07:49 PM

The Yen is bidding again and that is hurting overnight futures. Keep an eye on that development.

OI Technical Staff : 4/18/2007 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.

Marc Eckelberry : 4/18/2007 4:41:25 PM

YM looks way out of line, so I am only buying NQ.

Marc Eckelberry : 4/18/2007 4:40:15 PM

We're getting very overextended and I am trading this day by day now. Conservative traders might want to patiently wait for a pullback to 10 DMA, although we pretty much did that today with NQ. I'm shooting for 1859.

Keene Little : 4/18/2007 4:37:56 PM

Speaking of OEX, this is the updated daily chart I showed last night. Today it tagged the 62% retracement level of the decline from the 2000 high (based on using the March 2003 low, arguably the end of the bear market leg down). At today's 675.93 high the OEX came within 4 cents of tagging the Fib level and left a potential evening star candle. Again, the bulls do not want to see a red candle tomorrow, especially one that starts with a gap down. Link

Marc Eckelberry : 4/18/2007 4:35:59 PM

Big caps are cheap, especially OEX.

Marc Eckelberry : 4/18/2007 4:31:05 PM

Small caps had their run. It's time for the big guys of OEX to take over. They have been lagging for years, now is their time to shine if this bulls has gas.

Keene Little : 4/18/2007 4:26:38 PM

With the candlestick left on INTC's daily chart the bulls definitely don't want a red candle to follow. SMH bulls will want to see INTC keep going as well. Link

Marc Eckelberry : 4/18/2007 4:24:46 PM

If NQ 1847 holds overnight, I have a target of 1859. Above that, bulls would be pushing their luck without a 10 DMA test.

Marc Eckelberry : 4/18/2007 4:15:04 PM

NQ closes above 1847.

Jane Fox : 4/18/2007 4:07:19 PM

Late day selloff is ominous.

Keene Little : 4/18/2007 4:00:27 PM

If ever there was a time we need tech support, now is it. But as usual, anyone looking for it is on hold. As a review, this is the NDX 60-min chart that I showed earlier today, with the Fib projection near 1850: Link

With the techs and small caps not participating in today's rally, like yesterday, it leaves one to wonder if this isn't some kind of warning that money is rotating into the large caps for safety. Something to think about anyway. In the meantime, NDX hit its first upside Fib target at 1839.53 today (22 cents shy) which is where the 5th wave in the move up from April 12th = 62% of the 1st wave. That being a common relatiohship I'm paying close attention to what happens next.

While the DOW moved up through its Fib target at 12814 it has now closed back under it (and the closing price is more important than the intraday price). So heads up here as something is starting to smell fishy with this rally (that's a technical but early call).

Marc Eckelberry : 4/18/2007 3:58:49 PM

Lower high and lower low for NQ, so I would not like an NQ close below 1845/1847 if long.

Jane Fox : 4/18/2007 3:57:42 PM

Economic Reports for next week include:

8:30a.m. Initial Jobless Claims For April 14 Week. Previous: +19K.

10:00a.m. March Conf Board Leading Indicators. Previous: -0.5%.

12:00p.m. April Philadelphia Fed Business Index. Previous: 0.2.

Marc Eckelberry : 4/18/2007 3:53:28 PM

There is pin action at QQQQ 45, so rallies get sold pretty quickly, be aware of that if scalping. But it also means that selling is limited.

Marc Eckelberry : 4/18/2007 3:52:43 PM

NQ closes the gap but still holds 1847, weekly R1. If bulls keep that, we could see more gains this week.

Marc Eckelberry : 4/18/2007 3:51:20 PM

Of course the party will end one day, but as long as I see this big wall of worry, I think bulls will keep chugging up. By the way, ISEE +200 will be your clue to get out. Not there yet: Link

Marc Eckelberry : 4/18/2007 3:46:13 PM

I know I blew the October rally amongst many other plays, but I was also not convinced either way, so I stepped aside. I certainly did not short it until techs right after Thanksgiving. But this set up from March was perfect: bearish sentiment everywhere, all the bad news in the world and a market that starts climbing in a fast way. That I won't fight.

Jane Fox : 4/18/2007 3:45:12 PM

The bullishness did not have the follow through you see on some days. If the AD line was above +500 then you would be seeing more follow through.

Jane Fox : 4/18/2007 3:43:48 PM

SPX's jtHMA 60 minute chart turned red for a while this morning but it never flowed into the even the 120 minute charts and has now gone back red. I require the daily charts to turn back red then green before I will add to my long SPX position.

Marc Eckelberry : 4/18/2007 3:39:52 PM

I made the call on March 14th when the April contract traded 639, if I recall. The chart confirmed at 665 and Jane is a much more disciplined trader than me, she waited for confirmation. But even when it hit 670, all the talk was about shorting when the chart was massively bullish.

Jane Fox : 4/18/2007 3:38:24 PM

This bullishness is relentless. I am a bull on the equity markets but this is getting a tad overdone and is just plain Jane not healthy.

Keene Little : 4/18/2007 3:37:53 PM

BTW, if we were to get the kind of bullish move that I show on the DOW chart, especially with the steepness of the rally and at the end of a long rally, can you say blow off move? It wouldn't be pretty what follows but for the time being understand that the final "irrational" move in a bull market can be the strongest move. Oh oh, I'm starting to sound like Marc. I'll go find something bearish to talk about.

Jane Fox : 4/18/2007 3:35:54 PM

Marc - Here all along I thought I was bullish on Gold as well.

Keene Little : 4/18/2007 3:34:38 PM

That's my job Marc (wink)--point counter-point.

Marc Eckelberry : 4/18/2007 3:33:10 PM

You must admit Keene, I have been fought every step of the way, whether on the gold recommendation, NQ at 1780 (I actually put the signal in) and SMH last week. And today's dip.

Keene Little : 4/18/2007 3:32:24 PM

The DOW breaking above 12814 is a good sign for the bulls. The top of its parallel up-channel for price action since the March low is currently up near 13K. In the move up from the March 30 low, the 2nd leg up would achieve 162% of the 1st leg (equality was at 12814) at 12995 which is at the top of the channel. It's beginning to look more and more like the bullish EW pattern is unfolding here. The techs and small caps need to join in the bullfest though, 2nd day in a row now with them lagging. Link

Marc Eckelberry : 4/18/2007 3:31:18 PM

I'm not saying any of this to pat my back. Lord knows I have been wrong before. I am just trying to get through pervasive bearishness here and in the press that is stopping readers from making money. It;s an exhausting argument and I have only come back on the monitor when I saw a big opportunity (gold at 639 was the other).

Jane Fox : 4/18/2007 3:28:04 PM

VIX to new daily lows AND ad volume to new daily highs. I don't care what the AD line is telling me this is bullish.

Jane Fox : 4/18/2007 3:27:27 PM

Ok this is getting downright bullish

Marc Eckelberry : 4/18/2007 3:27:45 PM

Speaking of buys, the Yen was way oversold on Monday and a sweet on to pick up. Now it;s back with 50 dma struggle, which is why stocks are getting a lift.

Jane Fox : 4/18/2007 3:21:25 PM

You know the old saying you should learn a word and use it for a day. Bullishier is my new word. (Smile)

Jane Fox : 4/18/2007 3:20:07 PM

Things are getting bullishier and bullishier.

Keene Little : 4/18/2007 3:17:23 PM

Marc, when you're ready just let me know and I'll help you unhook your arm from around your back from patting it.

Marc Eckelberry : 4/18/2007 3:16:17 PM

Enough said, I am venting frustration at the constant wall of worry (it was all over the press the past 2 weeks), but I am thankful for it because that is the best thing a trader can hear if he is thinking long.

Marc Eckelberry : 4/18/2007 3:15:06 PM

And if old time traders haven't understood by now that option expiration week has a bullish bias 3 out of 4 times, they need to brush up on theirhomework as well. I said last week that the drop on Thursday was the pre-opex low. How many of you bought stocks that morning? I hope many of you bought, because it was a very rewarding trade.

Jane Fox : 4/18/2007 3:13:20 PM

ES is approaching its PDH at 1482.75 but with an AD line under 0 I don't suspect it will break it easily.

Jane Fox : 4/18/2007 3:08:49 PM

AD volume is now above 0 and is making new daily highs so not a time to be short, however, with an AD line at -206 it is not a time to be long either. It is however, a very good time to get caught up on your reading. Link

Marc Eckelberry : 4/18/2007 3:08:43 PM

I'll give novice traders a tip: find something to buy, quit thinking about shorting. That is for skilled traders who understand the process and know the risks associated with short covering rallies. You will learn a lot more by trying to find a sector to buy rather than trading only one group long and short. I bet there is not one reader who bought copper last month. You don't like equities? How about buying oil back in January? Find something to buy. That is the best advice I will ever give you.

Jane Fox : 4/18/2007 3:05:31 PM

Here is how the markets are trading in relation to their PDRs. Link

Marc Eckelberry : 4/18/2007 3:02:09 PM

Worst of all, you missed out on 80 YM points, 10 NQ points and 8 ES points. Which is the story of bears since mid-March.

Marc Eckelberry : 4/18/2007 3:00:11 PM

When the SOX, financials and TRAN are up sharply and the market waivers, or even sells, that's called a bullish divergence. Which is why those who bought the dip were rewarded. Don't let your bias change the facts. If you freaked out with the crowd and jumped in all hands short this morning, you did not do your homework and deserve the loss.

Keene Little : 4/18/2007 2:56:51 PM

With NDX threatening to make a move higher (maybe next week) to retest its high near 1850, I see the same possibility for INTC. It's currently coiling in a sideways triangle today and a push higher out of it could have it running up to its downtrend line from January 2004, currently just above 22, which would be a retest of its highs in November and January. Another triple top in the making?

Keene Little : 4/18/2007 2:50:22 PM

GOOG is trying to break its downtrend line from January but after what can be counted as a 5-wave move up from this morning's low, it's possible to count the bounce up from March 5th as complete. Today's high was met with bearish divergence. The implication from that is that tomorrow's earnings report (after the close) could lead to a downside reaction. But there's lots of time between now and then. I'll be watching this one closely as we head into tomorrow's close. Link

Keene Little : 4/18/2007 2:36:44 PM

I had mentioned earlier the Fib target for NDX if it gets another leg up (could be next week) would be near 1850 (two equal legs up from March 14th). That would of course be another potential test of the highs in January and February. Triple top anyone? The bulls will need to wipe out the very bearish negative divergence on the weekly chart. Link

Keene Little : 4/18/2007 2:28:51 PM

While hope will continue to be alive among those wanting to find a tradeable bottom in housing (nice rally the past few days), the price of lumber says not so fast. Link

Keene Little : 4/18/2007 2:10:14 PM

As the DOW inches higher today (news headlines are already out about the DOW hitting new all-time highs intraday, but where are the techs and small caps?), keep an eye on the 12814 area. This is where it has two equal legs up from March 14th.

Keene Little : 4/18/2007 2:06:35 PM

I showed a chart earlier this morning of the euro (10:02) and how it's up against a trend line. It has since pulled back and looks like a bearish gravestone doji at resistance. A down day for the euro tomorrow will be confirmation of the reversal signal. That would very likely mean a dollar rally and a decline in the metals.

The Canadian dollar is also up against resistance--trying to break its downtrend line from May 2006 but ran right into the 62% retracement of the drop from that May 2006 high. This also supports the idea that we're about to see a reversal in the currencies. Link

Keene Little : 4/18/2007 1:40:26 PM

Now that the Trannies have rallied back up I'll be watching an upside Fib target at 5225 for an end to the move (it would be a near perfect double top). The red lines show a parallel up-channel and the dark lines show a possible ascending wedge (with some bearish divegences supporting this). If price were to stall out here and drop back down, it could be the end of the wedge pattern and down we go (shown in light red). But the internal wave count would look better with a small pullback and final high to test the February high. Link

Keene Little : 4/18/2007 1:20:49 PM

Looking at the breakout in the banks has me feeling more bullish about the market currently and it's looking like we could see the BIX press up to the 405 area (currently trading 397) for two equal legs up from the March low. But then I looked at the brokers (XBD) and am having second thoughts about that. Link

The index has pressed back up to the its broken uptrend line from June so this one has the caution flag out. But if it also can press higher to get two equal legs up from the March low, that gives us 253 for an upside target. I consider both the banks and brokers very important to the bulls.

Keene Little : 4/18/2007 1:01:30 PM

I'm cleaning up a few things on my many QCharts (trying to reduce the file size) and noticed this older chart of NYSE with its broken uptrend line from July. I also added in the trend line along the highs from April 2006 and February 2007. Price is up against these trend lines and yesterday left a shooting star doji and today's candle so far looks like a hanging man, both are potential reversal candles. Link

After tagging its Fib projection at 9655 (less than 2 points shy) yesterday, this one holds the potential to be topping here. Or it could continue to press up underneath its broken uptrend line from July. We've seen that happen a lot during this rally, especially on the DOW late last year. At the very least it does warn of potential topping here.

Jane Fox : 4/18/2007 12:52:43 PM

Of course you cannot chart UNG but you certainly can use the big contract NG or the emini QN.

Jane Fox : 4/18/2007 12:48:13 PM

I see Natural Gas a buy and I have just been informed there is a new Natural Gas ETF that started trading today - UNG.

Excellent news!

Marc Eckelberry : 4/18/2007 12:39:15 PM

Buchanan is a bit over the top, but he makes a good point here, if you are interested in the world bank saga (my father was a 20 year consultant for that institution, so I follow this story). Link

Marc Eckelberry : 4/18/2007 12:34:23 PM

TRAN approaching all time highs.

Jane Fox : 4/18/2007 12:31:28 PM

NEW YORK (MarketWatch) -- Airline shares traded higher Wednesday, with low-cost carrier JetBlue Airways Corp. leading advancing shares as oil futures ticked down slightly.

Investor George Soros reported an 11.5% stake in the New York low-cost carrier JetBlue (JBLU) , helping push the shares up 3.4% to $11.60.

Jane Fox : 4/18/2007 12:29:52 PM

VIX hovering at daily lows and AD volume still well below 0 tells me not even think about trading.

Marc Eckelberry : 4/18/2007 12:28:06 PM

Someone write Qcharts so we can get this bad tick off. It's messing up my charts.

Keene Little : 4/18/2007 12:27:31 PM

I agree that SMH looks like a bullish coil which is why a breakout followed by a retest of the top of the coil would make a great long play. But I wonder how many times bulls have played the coming breakout in this index only to be disappointed again. Let it prove itself from here before you get long today.

Marc Eckelberry : 4/18/2007 12:27:03 PM

But an omen?

Marc Eckelberry : 4/18/2007 12:26:56 PM

That was a bad tick.

Marc Eckelberry : 4/18/2007 12:26:12 PM

SMH 36 just hit.

Marc Eckelberry : 4/18/2007 12:23:43 PM

2645.67 to be precise.

Marc Eckelberry : 4/18/2007 12:22:06 PM

To me the SMH pattern was clear coiling on a multi month basis that was going to explode to the upside based on semi inventory cycles. It was not an idle call. And Vista will be a stealth monster buy for techs. This is why I think COMP will finally hit 2600.

Jane Fox : 4/18/2007 12:20:48 PM

TRIN at 0.78 and testing daily lows should have the bears quite nervous.

Marc Eckelberry : 4/18/2007 12:18:47 PM

Initial target is 36.20.

Keene Little : 4/18/2007 12:18:06 PM

I very definitely never said SMH was a short. I've been saying for months now it's a no-trade index with it mired in its trading range.

Marc Eckelberry : 4/18/2007 12:17:54 PM

SMH is headed for 40. Today's is a huge breakout candle which will find some resistance at 36, but I bet we see 40 before the summer. It's a winner and intend on letting it run.

Keene Little : 4/18/2007 12:16:29 PM

On SMH, two equal legs up from the end of March is at 35.76. If this is just another bounce then today's move up will be the end of it, especially with the trend line located at the same spot. But if it breaks out then it could get very bullish. I'd wait for the break out and retest of the trend line on a pullback. The risk is missing a move higher that doesn't pull back but it's certainly a risk I'd be willing to take if considering a long play here.

Marc Eckelberry : 4/18/2007 12:16:25 PM

Like you told me it was a short last week? (wink).

Keene Little : 4/18/2007 12:13:30 PM

Quick Marc, take your profits and run! Link

Marc Eckelberry : 4/18/2007 12:10:04 PM

Cost average on SMH AUG 35 calls was 1.77 (last week's recommendation). Now trading at 2.40.

Keene Little : 4/18/2007 12:09:53 PM

The price pattern today is starting to give me the feeling we're going to consolidate for a a few days instead of immediately heading higher. I modified the SPX chart to show what the pattern would look like with a sideways/down consolidation into the end of the week before pressing higher again. That kind of move would give us a 5-wave move up from March 30th and would complete wave-C in the bearish pattern or wave-3 in the bullish pattern. Link

It's possible we'll get surprised with a sudden drop (shown in the light red). As shown by the key level at 1448, that's the level the bears need to break in order to declare the rally dead. But if it does consolidate for a little longer and then head higher again, the correlation of Fib projections around SPX 1484 makes for a good upside target. Then we would once again be watching the form of the pullback to help determine whether it's the start of a more bearish move or another larger 4th wave consolidation.

Marc Eckelberry : 4/18/2007 11:55:14 AM

Remember, oscillators can move down on a sideways market. We can consolidate without falling apart. I am not a perma bull (you know how bearish I can get), but this V bottom rally off a severe correction needs to be respected in terms of potential upside strength.

Marc Eckelberry : 4/18/2007 11:52:44 AM

This is opex week, they will pin QQQQ 45 as much as they can. This will give the MA's time to move up and we will be ready for the next leg. May could be very bullish. I am more concerned about the second half of the year.

Jane Fox : 4/18/2007 11:47:31 AM

You are not going to tell me this is heading higher!! THis needs to take a rest and revisit support so we can take off again. Link

Marc Eckelberry : 4/18/2007 11:46:26 AM

I have a rule, and it's simple. When both the SOX and BIX are up, I never, never trade the short side.

Marc Eckelberry : 4/18/2007 11:45:23 AM

That's not directed at anyone posting news, it's important to have the data and Jane does a great job keeping you informed, but how the market reacts is what counts. Semis up, Housing up, OEX up, financials are up and you want to short this for more than scalps?

Marc Eckelberry : 4/18/2007 11:36:42 AM

HGX is up, that is all you should be looking at. If the Housing index is up on bad news, that is all the info you need as a trader. Not the mass-fed news.

Jane Fox : 4/18/2007 11:24:01 AM

VIX is making new daily lows but so is AD volume. This should be telling you choppy and you will not get follow through on any trade.

Jane Fox : 4/18/2007 11:22:53 AM

WASHINGTON (MarketWatch) -- A surge in foreclosure activity continued for a third month in March, according to an online firm that maintains a database of homes in foreclosure.

Foreclosure filings -- including default notices, auction sale notices and bank repossessions -- increased about 7% from February's levels, to 149,150, and were up 47% compared with March 2006, according to Irvine, Calif.-based RealtyTrac. There was one foreclosure filing for every 775 households in America during March.

Foreclosures were concentrated in the Sun Belt and the Rust Belt. Indeed, half of the March filings were in just five states -- California, Florida, Texas, Michigan and Ohio -- a reflection of local property markets and varying state laws on foreclosure

Jane Fox : 4/18/2007 11:12:11 AM

Gold could very easily retrace back to its 50EMA at $667.00. Link

Keene Little : 4/18/2007 11:11:32 AM

One other possibility is that we're going to chop sideways for another day or two (instead of immediately pressing higher). It would be a bullish consolidation but it could mean lots of chop and whipsaw for the remainder of the week. Would be kind of fitting for opex.

Marc Eckelberry : 4/18/2007 11:10:56 AM

When will bears get that we are going up? When we hit SPX 1500? I know I have been pounding the table and annoying everyone, but the signs are everywhere for more upside, not downside.

Keene Little : 4/18/2007 11:10:05 AM

And there's the press above yesterday afternoon's high, confirming the 3-wave pullback. Now I'm watching the pattern for the leg up to help identify where the top could be. The NDX has one of the cleaner patterns so I'm watching that one for more clues. The upside target near 1850 may not get tagged but so far it's a good guide so trade accordingly.

Marc Eckelberry : 4/18/2007 11:08:16 AM

Bear for lunch. Say goodbye.

Marc Eckelberry : 4/18/2007 10:54:17 AM

I can't do all this posting (my blog and here) and trade, but you got the idea. Buy the dips as long as COMP 2500 holds.

Marc Eckelberry : 4/18/2007 10:39:26 AM

Watch the Yen, it's bidding again.

Keene Little : 4/18/2007 10:35:51 AM

If this bounce doesn't proceed higher from here but instead turns back down to a new low then the wave pattern turns potentially much more bearish. In that case Marc might have to eat that last statement of his (wink). But until we get a new low from here I like the wave count on NDX that shows the need for another push higher.

Keene Little : 4/18/2007 10:30:16 AM

If we get another push higher, this NDX chart shows a very nice count for NDX to push up to a Fib target at 1849.57. That level is where the move up from March 14th would have two equal legs and in the move up from April 12th (wave-C) the 5th wave will equal the 1st wave at the same level, within a penny. Very good correlation there and it would be a no-brainer short play. Link

Jane Fox : 4/18/2007 10:30:15 AM

If you are going to try a short I would be using ER. Link

Marc Eckelberry : 4/18/2007 10:22:34 AM

Don;t say I did not warn shorts.

Keene Little : 4/18/2007 10:19:13 AM

Looking at the SPX, the pullback from yesterday's high has two equal legs down at 1466.78 so a reversal back above yesterday afternoon's bounce high would say new highs are coming. You can use a downtrend from yesterday's high as a guide since a break above that would be a heads up that a continuation higher is likely.

Keene Little : 4/18/2007 10:11:28 AM

The one bullish thing I see today is what's happening in the banks--big up day for them and the BIX has now jumped above its 200-dma, the downtrend line from February and is now pressing above its 50-dma. This is very bullish if it can hold onto this morning's gains. The close today will be important.

Marc Eckelberry : 4/18/2007 10:11:09 AM

It's the Yen. Watch for reversal to be confirmed by a dropping Yen, that's all.

Keene Little : 4/18/2007 10:08:20 AM

Marc raises an interesting point--from an EW perspective this bounce is meant to look extremely bullish. I don't know yet for sure whether this bounce is just a b-wave in a larger a-b-c move down from the February high but so far it has all the markings of one, including weaker volume. These b-waves have a nickname "sucker wave" for a reason so be careful about the long side. The jury is still out on that one.

Marc Eckelberry : 4/18/2007 10:05:53 AM

NQ is 20 points away from its 20 DMA. This day was bound to happen. 10 DMA is at 1831, the whole zone between 1831/1835 should be bought by opex players. There is a daytrade short today, but I would not back up the truck on puts. IMHO.

Marc Eckelberry : 4/18/2007 10:02:56 AM

This is just a normal pullback. Only if NQ loses 1831 would I say the tide is turning. Just look at the moving averages. NQ will probably move down to 1835, which would be a buy.

Keene Little : 4/18/2007 10:02:39 AM

In last night's Wrap I showed the US dollar chart and how it is nearing potential support. The chart of the euro shows it tagged potential resistance this morning at the trend line along its highs since May 2006. You can see the longer term MACD bearish divergence against its last high in December. We should get a reversal in the currencies soon, and that should put downward pressure on the metals as well. Link

Marc Eckelberry : 4/18/2007 10:01:30 AM

This is the most bullish market I have seen since 1995.

Marc Eckelberry : 4/18/2007 9:56:40 AM

Otherwise, just another opex Wed.

Keene Little : 4/18/2007 9:56:19 AM

INTC has now given up the bulk of its opening gain. Tech bulls do not want to see INTC close in the red today--it would be a very bearish key reversal day for the stock at resistance by its downtrend line from December 2005, which it jumped above on this morning's gap open.

Marc Eckelberry : 4/18/2007 9:52:49 AM

The Yen is the problem.

Marc Eckelberry : 4/18/2007 9:51:26 AM

My advice to cost average into SMH (semi conductors) last week is paying off as that group is now breaking out. Don't bet too much against bulls on a day with green SOX.

Jane Fox : 4/18/2007 9:40:02 AM

YM is testing its overnight high here but the only market to do so. YM is the stronger market lately playing a game of catchup.

Keene Little : 4/18/2007 9:39:18 AM

Very often the initial move out of the gate is a head fake so be careful here. Opex will only confuse the situation some, and increase the volatility.

Keene Little : 4/18/2007 9:37:56 AM

It certainly looks like some big funds and their buy programs are jamming the market back up so as to scare the bears away. Need to protect all those short puts through opex.

Jane Fox : 4/18/2007 9:36:28 AM

AD line is a very bearish -850.

Keene Little : 4/18/2007 9:34:44 AM

Looks like at least YM is going for gap close earlier rather than later. It'll be a good test for what's next.

Jane Fox : 4/18/2007 9:30:49 AM

Looks like the $ is getting stronger (a bit) which should put some downward pressure on Gold. Gold needs to take a break as well. Link

Jane Fox : 4/18/2007 9:28:14 AM

ER and NQ broke their PDLs overnight and will probably have gap downs this morning. This is the needed retracement I have been talking about and may give us another spot in which to get long. Link

Keene Little : 4/18/2007 9:24:06 AM

Carrying over into this morning from last night, INTC is in the green, currently up 0.34 (1.6%), IBM is down 2.60 (-2.7%) and YHOO is getting crushed, down 3.26 (-10%).

Jane Fox : 4/18/2007 9:19:55 AM

WASHINGTON (MarketWatch) -- U.S. foreclosure filings increased 7% in March from February's levels and were up 47% from a year ago, according to RealtyTrac, an online real estate database. Nationally, there was one foreclosure filings for every 775 households. Five states -- California, Florida, Texas, Michigan and Ohio -- accounted for half the nation's total in March. In California, foreclosure filings increased 36% from February and were up 183% compared with a year ago. Nevada had the highest foreclosure rate at one in every 183 households, followed by Colorado. Six of the top 10 cities were in California, led by Stockton. The data include default notices, auction sale notices and bank repossessions.

Keene Little : 4/18/2007 9:12:00 AM

Unless we see a miraculous recovery in the next 20 minutes we're going to have a gap down open and that always leaves us to wonder when the gap will get closed. Shorting a gap down is always risky so if not short from yesterday then I'd wait until we see what shakes out early. If you shorted the high or the afternoon bounce then I'd have my stop just above the afternoon high--any bounce back above that high would leave a corrective 3-wave pullback and would be pointing to new highs.

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