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Keene Little : 5/11/2007 1:06:14 AM

I made the following comment at the end of the day for the DOW but it fits across the board:

If the DOW gets another big down day tomorrow then it's going to look bad for the bulls. I think much below 13200 and it will begin to look like too big of a drop for a 4th wave correction. The bullish green wave count (on the 120-min chart I just posted below) calls for another rally leg to finish the 5th wave to a new high. If the buyers aren't finished yet then we should see the mid line of the up-channel from March 14th hold (light blue dotted line that crosses 13200 tomorrow).

As mentioned with the other charts, if today's decline is followed by a corrective bounce and then a new low (shown with the dark red wave count on the charts), the bears' case becomes stronger. The key level for them is 13041 and especially a break below 13K which would likely be a break of its up-channel around the same time.

Also, as I mentioned earlier on Thursday, one of these days the pattern is going to break but remember that Thursday prior to opex has been the head fake day. With a big push down on Thursday, if the pattern holds, then we're set up for a rally into next week. The green (bullish) wave count fully supports that happening. The next bounce will give us clues as to what to expect next. Until then keep your trades light and quick.

Keene Little : 5/11/2007 1:01:30 AM

Friday's pivot tables: Link and Link

Roadmap updates (120-min charts):
DOW: Link
SPX: Link
NDX: Link
RUT: Link
GOOG: Link
CME: Link
Gold (GLD) Daily: Link

Jeff Bailey : 5/11/2007 12:19:38 AM

Hang Seng ($HSI) Link ... has battled late January/early Feb highs.

Down 279.90, or -1.35% at 20,466.37 Link

Jeff Bailey : 5/11/2007 12:15:55 AM

Nikkei-225 ($NIKK) Link ... tried to bust a move higher on Wednesday. One "headline" I read was "Nikkei closes at best level since dollar/yen.

$NIKK closed 17,737.

Currently -249.63, or -1.41% at 17,487.33. Link

Jeff Bailey : 5/11/2007 12:08:22 AM

NYSE, NSDQ Comp, SPX and RUT nh/nl readings at this Link to go with Thursday's Market Wrap.

Jeff Bailey : 5/10/2007 11:56:50 PM

OK ... SPY looked bullish. Could have been offset with more DnTick in the ES.

Keene Little : 5/10/2007 11:32:19 PM

Jeff, just got back in. No to your question (11:00 PM), I haven't checked any up/dn tick data.

Jeff Bailey : 5/10/2007 11:19:09 PM

SPX Daily Pivot Levels tomorrow are ... 1480.16, 1485.82, Piv= 1497.12, 1502.78, 1514.08

Jeff Bailey : 5/10/2007 11:12:45 PM

SPX Chart from this evening's Wrap at this Link

Jeff Bailey : 5/10/2007 11:11:13 PM

SPX Options Chain sorted by most active at this Link ... Jun $950 Puts for $0.05. That might skew the VIX.X upward. I'd think with SPX 1,491.47, those would be UPTick volume with $0.00 bid.

What about the bullish bias from the MAY 1,480 puts for Average $4.63. $1480 - 4.63 = 1,475.37

Long liquidator of those puts, or does OI rise tomorrow from sell to open?

Jeff Bailey : 5/10/2007 11:00:16 PM

Keene, Jane, Dan, or Marc?

Did anyone catch today's ES up/dn tick?

Jeff Bailey : 5/10/2007 10:58:35 PM

Ok... now the SPX, maybe see some "valero like" option action here.

Jeff Bailey : 5/10/2007 10:51:23 PM

SPY Option Chain sorted by most active Link ... Noting Up/DnTick in SPY itself.

Quite a few May $148 Put buyers and bearish bias. Any contrarians out there tonight?

Quite a few May $149 Put buyers and bearish.

Quite a few May $150 Put sellers and bullish.

Collar it with the $148 - $0.46 = $147.54 and those May $150 +1.07 = $151.07.

As noted today, VIX.X kept tapping MONTHLY Pivot, but call buyers/put sellers kept things in check against call sellers/put buyers.

OI Technical Staff : 5/10/2007 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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Jeff Bailey : 5/10/2007 6:35:17 PM

Forex Currencies benchmark at tonight's 06:19 PM EDT trade Link

Currencies screen capture after yesterday's FOMC statement at this Link

Jeff Bailey : 5/10/2007 6:27:49 PM

Mr. Cramer discussing BGC $63.36 -3.66% Link . A "fundamental" jewel discovered here in the MM at ~$15.00 in Aug'05 as a hurricane play.

Still hasn't given a "sell signal" since last "buy signal" at $36. Has exceeded its bullish vertical count.

Jeff Bailey : 5/10/2007 6:17:28 PM

Today's Global Economic Calendar at this Link

Jeff Bailey : 5/10/2007 6:09:11 PM

Earlier today Bank of England raised rates 25 bp to 5.50%.

Jeff Bailey : 5/10/2007 5:41:56 PM

Closing US Market Watch found at this Link ... I view cash as an asset class. I view gold and silver as an asset class, but the $HUI.X as an equity class.

Same for oil and natural gas (asset class) where OIX.X an equity class, and XNG.X an equity class.

As much focus as the dollar, oil, gold and silver get at times, as to "what they're saying" about the economy, it may be important to look at some bigger pictures.

Keene Little : 5/10/2007 5:37:01 PM

Friday's pivot tables: Link and Link

Jeff Bailey : 5/10/2007 5:02:25 PM

US Dollar Index (DXY) 82.27 +0.30% ... closes above its MONTHLY Pivot.

Keene Little : 5/10/2007 4:58:16 PM

If the DOW gets another big down day tomorrow then it's going to look bad for the bulls. I think much below 13200 and it will begin to look like too big of a drop for a 4th wave correction. The bullish green wave count calls for another rally leg to finish the 5th wave to a new high. If the buyers aren't finished yet then we should see the mid line of the up-channel from March 14th hold (light blue dotted line that crosses 13200 tomorrow). Link

As mentioned with the other charts, if today's decline is followed by a corrective bounce and then a new low, the bears' case becomes stronger. The key level for them is 13041 and especially a break below 13K which would likely be a break of its up-channel around the same time.

Jeff Bailey : 5/10/2007 4:51:11 PM

Per some of this morning's MM observations dollar/gold ...

ECB kept key interest rate unchanged at 3.75%, but hawkish bias to 4.0%

Jeff Bailey : 5/10/2007 4:34:57 PM

Today's quote of the day had to be CNBC commentator repeating what bears supposedly said ... "Earnings season is about over, and bulls lose their catalyst."

Remember what the "fundamental" bears were saying going into the quarter?

Jeff Bailey : 5/10/2007 4:31:36 PM

Today's Earnings List at this Link

Jeff Bailey : 5/10/2007 4:12:25 PM

American Intl. Group (AIG) $72.20 +0.27% ...

Earnings Press Release Link

Consensus was for EPS of $1.54 on Revenue of $29.45B.

Keene Little : 5/10/2007 4:07:01 PM

Here's how the pattern looks for the COMP. Price has clearly broken below the uptrend line from March 14th. If this is to be just the end of the 4th wave pullback then it will likely find support at or near the uptrend line that is parallel to the one from wave-1 to wave-3 (the bullish green wave count). The line is near 2522 tomorrow morning. Link

If the green wave count is in effect then we'll get another rally leg out of this and I'm just speculating where it could go but I like a retest of the broken uptrend line where it crosses 2600, which is where wave-5 = 62% of wave-1, by the end of next week.

But if the top is in (dark red wave count), then today's decline is just the 1st wave down and we'll get a bounce followed by new lows. The subsequent new low, especially if it drops below 2500, would be the stronger sell signal. The key level for the bears is 2457.

Jeff Bailey : 5/10/2007 4:00:59 PM

Keene ... 11:00 was the "short" entry with a/d lines as they were. My thinking last night was that if they gapped higher, it was a squeeze of biblical proportions similar to my absence 4/13-4/17.

a/d line this morning pretty much squashed it. Not to mention Blair news.

Jeff Bailey : 5/10/2007 3:50:07 PM

Bullish swing trade long setup alert ... Place an order to buy 1/3 position (100 shares for $10k=full) in shares of Dynamic Materials (BOOM) for $34.15.

Stop goes $32.00, Target $38.50.

Jeff Bailey : 5/10/2007 3:45:18 PM

Bullish swing trade long exit alert ... for shares of Dynamic Materials (BOOM) at the bid of $35.00.

Will look to get back on board if we the the "cramp" and ramp tomorrow morning.

Jane Fox : 5/10/2007 3:44:42 PM

Seen many days when the internals are this bearish and the bulls were able to turn it around and push the market to new daily highs. Do I need to back into the mode that I can believe this again. Link

Keene Little : 5/10/2007 3:43:38 PM

Jeff, you mentioned earlier you thought the majors would close near their lows today. Looking like a good call from here. No get up and go today. But some bullish divergences are sneaking in on the short term charts so we'll see what that means for tomorrow.

AIG reports tonight and they're one of the big dogs in the DOW and we have some potentially market-moving reports tomorrow morning. Flat is not a bad position for overnight.

Jeff Bailey : 5/10/2007 3:33:42 PM

03:00 Internals found at this Link

Keene Little : 5/10/2007 3:21:45 PM

Maybe not yet Jane (3:13). GLD has dropped down to retest its broken downtrend line right where it has two equal legs down from its April 20 high and at its uptrend line from October (if I ignore the intraday lows in January). I'm thinking it's good for at least a bounce. I covered my gold short and have gone long gold while I hold my silver short. I'll now let price lead the way to determine which side to cover next. Link

Jeff Bailey : 5/10/2007 3:20:14 PM

Earlier this morning, AMGN and JNJ went before the FDA regarding their anemia drugs for cancer patients.

Reuters Story Link

Jeff Bailey : 5/10/2007 3:19:01 PM

FDA Panel Seeks More Restrictions On Anti-Anemia Drugs

Jeff Bailey : 5/10/2007 3:17:39 PM

Amgen (AMGN) $58.62 -7.09% ... today's trade at $60.00 a reversing lower PnF sell signal.

Jeff Bailey : 5/10/2007 3:15:52 PM

Johnson & Johnson (JNJ) $63.23 -1.37% ... sames news item as AMGN.

Jeff Bailey : 5/10/2007 3:15:10 PM

QQQQ $46.24 -1.25% ...

Keene Little : 5/10/2007 3:14:22 PM

I guess that was just to shake the trees and knock the weaker longs onto the ground.

Jeff Bailey : 5/10/2007 3:14:10 PM

Amgen (AMGN) $59.11 -6.33% ... negative news.

Jane Fox : 5/10/2007 3:13:31 PM

It is now time to step aside long Gold. Link

Keene Little : 5/10/2007 3:11:52 PM

Hmm, getting a little deep in the retracement department. Lows need to hold. Since NDX has one of the cleaner looking patterns, if this drops to a new low then it'll be the 5th wave for today's decline. Wave-5 = wave-1 in that case at 1873.15 so a minor new low. Watch for bullish divergences in that case as another opportunity to try the long side.

Jeff Bailey : 5/10/2007 3:11:19 PM

Might get hit this time ... BOOM $34.98 -3.63% ...

Jeff Bailey : 5/10/2007 3:09:52 PM

CAT $73.53 -1.63% ... session high was $74.90.

Jeff Bailey : 5/10/2007 3:09:22 PM

VLO $72.71 -1.91% ...

Jeff Bailey : 5/10/2007 3:08:38 PM

SPY $149.60 -1.03% ...

Jeff Bailey : 5/10/2007 3:08:24 PM

SPX.X 1494.87 -1.17% ...

Jeff Bailey : 5/10/2007 3:08:06 PM

VIX.X 13.71 +6.52% ... back at MONTHLY Pivot.

Jane Fox : 5/10/2007 3:06:24 PM

Very interesting patterns today. Link

Keene Little : 5/10/2007 3:05:35 PM

This pullback should be just a correction to the bounce off the low and is a good time to try the long side, stop at a new daily low.

Jeff Bailey : 5/10/2007 3:05:12 PM

03:00 Market Watch found at this Link

Jeff Bailey : 5/10/2007 2:45:27 PM

YRC Worldwide (YRCW) $38.90 -1.09% ... not passing my test for what type of action I look for in a "bear trap"

Keene Little : 5/10/2007 2:44:10 PM

I don't know if anyone is playing the short side on the metals with me but just in case you are, or if you're thinking of trying a long play, now's not a bad time to take some money off the table if you're short and perhaps try the long side.

The pullback in YG from the April 20 high has two equal legs down at 666.00 (bad number) and it's at its uptrend line from October. For GLD this number is 65.84 and today's low is 65.80. If this is to be just a corrective pullback then this is where the next rally leg will begin. Based on the US dollar rallying, which I think will continue, I'm bearish the metals but until that uptrend line breaks gold is still in a bullish trend.

Jeff Bailey : 5/10/2007 2:34:05 PM


DJ- U.K. Prime Minister Tony Blair says that he will step down as prime minister on June 27, after a decade in office in which he brokered peace in Northern Ireland and followed the U.S. to war in Afghanistan and Iraq.

From earlier this morning.

Jeff Bailey : 5/10/2007 2:30:48 PM

VLO $73.20 -1.25% ...

Jeff Bailey : 5/10/2007 2:30:14 PM

SPX 1,499.50 -0.86% ...

VIX.X 13.39 +3.95% ...

Jeff Bailey : 5/10/2007 2:17:17 PM

Swing trade put(s) exit alert ... Let's blow out the two (2) Valero Energy VLO May $70 Puts (ZPY-QN) at the bid of $0.35.

VLO $72.91 -1.68%

VIX.X 13.51 +4.48%

Keene Little : 5/10/2007 2:16:46 PM

On the RUT chart that I posted look at the wave pattern between the high on April 16th and May 1st, where the a-b-c correction down to the spike low was then followed by another rally. You can see the pattern playing out from Monday's high is a small fractal of that larger correction. The upside resolution may look the same as well. The 62% projection at 836.82 could be the ultimate target for the move (assuming we get the rally from here).

Jeff Bailey : 5/10/2007 2:04:45 PM

I've got June Unleaded up 4.03%, July +2.76% ... June most likely holds bid into its contract expiration, or I'd be surprised if it fell below $2.10.

Keene Little : 5/10/2007 2:04:37 PM

Looking at the RUT in the same way as I showed for SPX and NDX, today's pullback could be the end of an a-b-c pullback from Monday's high (that high is labeled as green wave-A). Today's pullback held above the uptrend line from March 14th so nothing bearish yet about today's decline. Link

If yesterday's high was the end of THE rally then today's decline was the 1st wave down (dark red wave-(i)) which will be followed by a bounce and then a new low, which would obviously be a break of its uptrend line. Until that happens the bulls still have a chance to drive this up to the Fib projection at 847.30 now, for two equal legs up from May 1st. This would mean a bullish opex week. At this point I'd say opex week has the potential to be either very bullish or very bearish.

Jane Fox : 5/10/2007 2:03:39 PM

Buyers are relentless.

Jane Fox : 5/10/2007 2:03:22 PM

Bears certainly have their work cut out for them. TICKs just hit +1000.

Jeff Bailey : 5/10/2007 1:56:34 PM

With QCharts, you can "right click" your mouse on a retracement bracket and then alarm alerts when trade is seen at that level. I'd say current action is similar to that found in January.

Jeff Bailey : 5/10/2007 1:54:56 PM

VIX.X ... Daily Interval bar chart with MONTHLY Pivot retracement at this Link

Keene Little : 5/10/2007 1:51:49 PM

NDX looks like the cleanest pattern to the downside and looks like it made its bottom. The low must hold now so if you're trying the long side, use that as your stop.

Jeff Bailey : 5/10/2007 1:50:30 PM

While I'm monitoring those VLO puts, you can bet your bottom dollar there's some NAKED May SPX/SPY Call sellers doing the same.

Jeff Bailey : 5/10/2007 1:48:16 PM

VIX.X 13.67 +6.13% ...

Jeff Bailey : 5/10/2007 1:37:41 PM

YM 13,254 ... juuust undercut WEEKLY Pivot (13,249)

Jane Fox : 5/10/2007 1:36:23 PM

SPX broke 1500 and is now trading at 1493. You can just hear all the rhetoric and all the reasons why the market took a tumble today. I wonder if anyone will say it just plain Jane needed it.

Keene Little : 5/10/2007 1:36:13 PM

Watch for a little bounce and then another low and that should do it for today's decline. It should set up a long play for at least a bigger bounce. DOW 13200 makes for a nice round number for support.

Jeff Bailey : 5/10/2007 1:35:08 PM

VLO $72.53 -2.15% .... ZPY-QN are $0.40 x $0.45.

These are gone anywhere close to $0.85.

Jeff Bailey : 5/10/2007 1:34:15 PM

VIX.X alert! 13.81 +7.22% ... sticks its head above MONTHLY Pivot.

Jane Fox : 5/10/2007 1:33:53 PM

And breaks through as the VIX makes new daily highs.

Jane Fox : 5/10/2007 1:33:29 PM

ES is testing 1500.

Keene Little : 5/10/2007 1:30:17 PM

Silver is about to test its 200-dma at 13.078 so it too should find some temporary support soon. It's currently printing 13.078 now, down -.358 (-2.6%). A break much lower for both gold and silver would likely hit some major stops.

Keene Little : 5/10/2007 1:26:47 PM

The US dollar is getting a nice rally today and the metals are getting crushed. Gold is down more than $16, completely reversing the sharp spike up from last week's low, making new lows below that now. But it's testing its uptrend line from October so I would think it will be support for at least another bounce. But I do expect the trend line to break. This is why I like shorting the metals when I think there's a good setup (I will admit it took a few attempts and some patience waiting for this one)--declines happen very quickly and they're good money makers, silver especially. Link

Jeff Bailey : 5/10/2007 1:25:30 PM

01:00 Internals found at this Link

Jane Fox : 5/10/2007 1:22:41 PM

TRIN has hit 1.88.

Keene Little : 5/10/2007 1:21:49 PM

We've got some pretty bearish daily candlesticks in the making here. The DOW's daily chart shows a bearish engulfing pattern and about the only thing that could have made it more bearish would have been a gap up today and then collapse. Link

If I ignore the short term charts, which give me the impression we're going to see a reversal of this drop and head for new highs again, this daily chart would give me the willies if I were long the market. The dark red wave count calls the rally complete. The break of the trend line that was the bottom of the ascending wedge has been broken. Daily oscillators are rolling over. And as I said, that bearish engulfing candle.

What the bulls have going for them is that yesterday's high might have been the end of wave-3 instead of wave-5 (green wave count) and we'll see a choppy correction down/over to the parallel line that marks the bottom of the up-channel from March 14. After breaking above the top of its up-channel for price action from July it would be bullish if price now holds at the line (testing it at 13223).

So it's still too early to tell which way this will go next and we'll have to take it one leg at a time until the pattern gets a little more definitive. In the short term, a minor new low today will complete a 5-wave move down and the new low should be met with bullish divergences. It would be a buy signal for at least a scalp play. Then we'll watch the form of the bounce for clues as to what's next.

Jane Fox : 5/10/2007 1:15:02 PM

The VIX is telling me ES's daily lows will hold or any breach will not have follow through. Link

Jeff Bailey : 5/10/2007 1:07:29 PM

Majors should go out at, or near lows of session today.

Jane Fox : 5/10/2007 1:06:27 PM

OK TICKS back to -800. This is looking good for those of us who believe a correction is needed.

Jeff Bailey : 5/10/2007 1:02:56 PM

01:00 Market Watch found at this Link

Jeff Bailey : 5/10/2007 12:56:53 PM

Valero Energy (VLO) $72.85 -1.71% ... May's "Max Pain" Theory currently tabulated at $67.50 ($2.50 increments). OI on call side is heaviest at $70.00 (32,111). OI on put side also heaviest at $70 (18,202)

Jeff Bailey : 5/10/2007 12:52:53 PM

VIX.X 13.54 +5.12% ... pretty much has "stopped dead" at MONTHLY Pivot.

May Option Expiration next Friday.

Jane Fox : 5/10/2007 12:39:18 PM

The Dow's rally has been much stronger than the SPX's so it is harder to figure out where the upward channel should be placed. But in any case this market needs a healthy retracement back to 12800. That is 450 points but only translates into a 38.20% retracement from the March 14th lows. Link

Jane Fox : 5/10/2007 12:34:14 PM

SPX is now testing the lower trendline of its upward channel. I still contend that this market needs to make a healthy retracement to 1460 before it takes off again. Whether it will not is up to the trading Gods I guess. Link

Jane Fox : 5/10/2007 12:39:51 PM

Gold is back to support and if it does not hold then I will be back to neutral on the is market. Link

Jane Fox : 5/10/2007 12:29:43 PM

Oil is finding support at $61.00/bl. Link

Jane Fox : 5/10/2007 12:27:40 PM

I have seen many days when the internals were this bearish but the bulls were able to push price back to new daily highs just like they did this morning but today the bears were able to regain that control and push price back to new daily lows and actually have follow through on those lows. This is change folks and may be the beginning of the needed correction. Link

Keene Little : 5/10/2007 12:26:22 PM

We have a similar setup on NDX as I showed for SPX. If the leg down today is completing an a-b-c correction that started from last Friday's high, which is the way I'm leaning only because of the 3-wave bounce from Tuesday to yesterday's high, then we should be looking for another rally leg to follow. That's shown by the green bullish wave count on this 60-min chart: Link

The downside projection for wave-c of the a-b-c move from last Friday is at 1872.51 so another minor new low could tag that. The uptrend line from March 14th is currently near 1862 and if we've seen a top then we'll probably get a bounce off that uptrend line which could be a good short setup. The form of the bounce in that case will have to provide some clues. In the meantime, based on the short term EW pattern, I'm not ready to get bearish this market yet.

Jane Fox : 5/10/2007 12:09:48 PM

Very bearish internals. Link

Jeff Bailey : 5/10/2007 12:06:03 PM

VIX.X alert! 13.71 +6.25% ... MONTHLY Pivot here.

Jeff Bailey : 5/10/2007 12:05:17 PM

VIX.X 13.65 +5.97% ...

Keene Little : 5/10/2007 12:04:57 PM

I can't remember the last time I saw so much red splashed across my screen. Very odd sight.

Jeff Bailey : 5/10/2007 12:04:42 PM

S&P Depository Receipt (SPY) Alert! $149.83 -0.88% ... undercutting WEEKLY Pivot.

Keene Little : 5/10/2007 12:02:53 PM

Starting to get dangerous for the bulls here. They need to reverse this back up now.

Jane Fox : 5/10/2007 11:58:39 AM

After the bulls were able to make new daily highs the bears regain control and were able to bring price back to new daily lows. Is this the beginning of the correction? Let's hope so. Link

Jane Fox : 5/10/2007 11:57:04 AM

All markets are into a short only. Link

Keene Little : 5/10/2007 11:56:43 AM

How quickly things can change. We had a nice setup coming into today to get a new high and finish the rally. But now this drop, after only a corrective 3-wave bounce off Tuesday's low, opens up a different scenario. The rally will either last slightly longer (maybe not necessarily higher) or else it's immediately bearish but I'm leaning towards the bullish wave count here: Link

As long as SPX finds support at/near 1498 it's a setup for another rally leg in the 5th wave. Assuming 1498 is support then two equal legs up from May 1st (for the 3-wave move for wave-5) is just above 1531. If the 2nd leg up goes to 62% of the 1st then the Fib target is 1518.54 so perhaps the 1522 target will still be in play.

The bullish wave count says get ready for a bullish opex week and the bearish wave count says an early bounce next week will be followed by some strong selling. Right now SPX 1498 holds the key.

Jane Fox : 5/10/2007 11:47:39 AM

The $ is at a do or die spot here but that small higher low made on May 7th is telling me this resistance just may break. Of course if it does retreat from here and breaches that swing low then all bullish bets are off and my Gold bullishness stays in tact. Link

Jane Fox : 5/10/2007 11:43:27 AM

Needless to say the RUT is your weaker equity market but you all knew that anyway so based on this observation I have bot some IWM throw away puts (Puts that have no stop). According to the the jtHMA charts though this would be a very good spot to get long because we have the daily/120/60 charts red and this is a get long when the monthly and weekly charts are green and usually gives a very good place for a stop. However, I would not be going long this market here so like any other system you have to add some of your own trading objectivity.

The other thing that I find interesting here is the red as flowed into the Silver weekly charts telling me there is a very good chance red will flow into the Gold weekly charts as well.

Of course as a Goldbug I cannot ignore the US$ green has flowed into the daily and just may end up flowing into the weekly. This would usually give you your rally to sell but once again the daily charts are way oversold and I would not be shorting the $ here. When you look at the daily charts of the $ you certainly do get a feeling that this market has hit a bottom. Link

Jeff Bailey : 5/10/2007 11:36:42 AM

When I look at oil and unleaded and see VLO -1%, get the feeling today is some profit taking.

Jeff Bailey : 5/10/2007 11:34:42 AM

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

Keene Little : 5/10/2007 11:28:44 AM

I can't help but wonder if this move down is the head fake move before opex week. The Thursday prior to opex has been the head fake day. If true, you'll want to buy some May calls for your lottery play. One of these months this isn't going to work so don't spend anything you're not willing to lose--it's an all or nothing play.

Keene Little : 5/10/2007 11:24:49 AM

I sure hope the bulls can keep this afloat today. I'd hate to see it drop from here because that would leave the move up from Tuesday as a 3-wave move and not the end of the rally. It would be part of a slightly larger a-b-c pullback correction and this drop would be finishing the correction instead of the start of something more bearish. If this happens then a move down to SPX 1498 would be the Fib projection for it and then we start a new move up in the final 5th wave.

So don't get real bearish on this move yet. If SPX 1498 gives way then I'll be looking to short subsequent bounces but this move down should be followed by more rally, again.

Jeff Bailey : 5/10/2007 11:20:53 AM

11:00 Internals found at this Link

Jane Fox : 5/10/2007 11:07:41 AM

As the VIX was making new daily lows the AD volume was hovering around its daily lows and the bulls were able to get the markets to new daily highs. Now the AD volume as said enough and is making new daily lows again putting the market back into a sideways mode. Link

Jane Fox : 5/10/2007 11:05:24 AM

Here is the Smith Open Number charts. ER is on a short only. YM long only and ES either way or no trades. Link

Jeff Bailey : 5/10/2007 11:02:27 AM

11:00 Market Watch found at this Link

Jeff Bailey : 5/10/2007 10:56:09 AM

Dynamic Materials (BOOM) $35.36 -2.58% Link ... not considering sector, BOOM has a market cap of $428 million.

Keene Little : 5/10/2007 10:50:37 AM

Better SPX 60-min chart (the one I posted below got shifted): Link

Keene Little : 5/10/2007 10:47:04 AM

Zeroing in from the weekly SPX chart ( Link ) which shows price up against the top of its parallel up-channel from last July's low, the daily chart shows that channel and the ascending wedge that has developed for the 5th wave rally from July. Link

I show the bullish wave count calling for a larger sideways/down correction for a 4th wave but I'm liking that possibility less and less as the wedge pattern develops. I think the rally is going to finish inside this wedge. I show the Fib projection for the 5th wave where it equals 62% of the 1st wave (just above 1522). A top there would be a failure to make a new high for SPX but oh so close. Could get interesting.

The 60-min chart zooms in a little closer on the 120-min chart I posted last night (below). In addition to the 5th wave projection at 1522.32, since it will be a 3-wave move, the 2nd leg up will equal 62% of the 1st leg up at 1521.41. If SPX does not stop at 1522 (assuming it gets there) then there will be little doubt that we'll get the new highs. Link

Jeff Bailey : 5/10/2007 10:45:44 AM

Russell 2000 (RUT.X) 4-point box with 10-week trading bands at this Link

Jeff Bailey : 5/10/2007 10:38:45 AM

Keene: Very well then.

And a VERY good test going forward.

BIG caps may be a bit extended. May also be time for some rotation.

Keene Little : 5/10/2007 10:34:26 AM

Jeff, I guess I should instead say small caps are a good way to measure the aggressiveness of the bulls. If we see investors fleeing from small caps and techs that's usually a defensive sign that tells me to get ready for a market top. So by "barometer" that's what I'm looking for. Except this time around we just might see the whole market acting together.

Jeff Bailey : 5/10/2007 10:33:10 AM

EIA Weekly Nat. Gas Storage Table at this Link

Build of 96 bcf

Jeff Bailey : 5/10/2007 10:31:08 AM

Russell 2000 Index (RUT.X) 828.93 -0.69% ... 5-point box Link

+6.82% for 52-weeks.

Jeff Bailey : 5/10/2007 10:27:55 AM

Keene: I'd have to disagree that small caps are a good barometer for the market.

RUT.X a good barometer for small caps though.

Jeff Bailey : 5/10/2007 10:22:02 AM

Target (TGT) $59.82 +1.11% ...

Jeff Bailey : 5/10/2007 10:21:37 AM

Wal-Mart (WMT) $48.18 +0.52% ...

Jeff Bailey : 5/10/2007 10:21:11 AM

APRIL RETAIL SALES WEAK ON EASTER, WEATHER DJ- April U.S. same-store sales figures miss already dour expectations, resulting in some companies reducing 1Q expectations. Wal-Mart's comparable-store sales fall a worse-than-expected 3.5% in April, while Target's April sales drop 6.1%, in line with expectations.

Jeff Bailey : 5/10/2007 10:20:23 AM


DJ- U.S. trade deficit rises 10.4% to $63.89 billion in March, as higher oil prices fail to prevent a jump in American demand for crude. Rise in the deficit is higher than the $60 billion gap Wall Street economists predicted and a bit higher than the estimate the Commerce Department used in its calculation of 1Q GDP last month.

Keene Little : 5/10/2007 10:10:55 AM

The RUT, being a good barometer for the market, will be worth focusing on as well. I showed the weekly chart last night ( Link ) which shows some upside potential but waning momentum.

Dialing in a little closer, the daily chart pattern is pretty messy and choppy so it leaves open several possibilities. I'm showing the bullish and bearish wave counts where the bearish count says a top is in as of yesterday's high. It takes a break below 807 to confirm that while a break below 817 would be a heads up break of its uptrend line. Link

On the 60-min chart I show the potential for yesterday's high to have finished the rally but I can't say that I like it there. The top seems to be suspended in mid air. But take a break below 817 seriously. In the meantime I'm hoping to see the bullish wave count play out with a 5-wave move up from Tuesday's low that takes the RUT up near a Fib projection just under 850 which would have it back up to its broken uptrend line from August. Link

Jeff Bailey : 5/10/2007 10:02:47 AM

10:00 Market Watch found at this Link

Keene Little : 5/10/2007 9:36:34 AM

Ideally we'll see this morning's pullback stay relatively minor and then turn around and continue higher. If Tuesday's lows (DOW 13238 and SPX 1500.66) are violated then something more immediatley bearish has started. I'm hoping yesterday afternoon's post-FOMC lows (DOW 13281 and SPX 1503.77) hold and then see a push to a new high. That would give a cleaner looking 5th wave pattern.

Keene Little : 5/10/2007 9:30:23 AM

Jane mentioned gold could be in trouble if the US dollar keeps rallying. And that's what we're seeing this morning as both gold and silver are down more than 1% so far. The only thing I don't like is the choppy price pattern in the the drop this week--it's either getting ready for another push back up or a very strong decline. Being short the metals you know which one I'm voting for (sorry Jane).

I need to see the US dollar continue to strengthen and that's what I'm expecting. If you don't get the Market Wraps, here's a weekly chart of the dollar I showed last night and my expectation for a big rally coming in the dollar. There are a lot of dollar shorts out there right now. Link

Jane Fox : 5/10/2007 9:26:06 AM

Need the DOW back to 12800. Link

Jane Fox : 5/10/2007 9:24:31 AM

I still think the S&P needs to retrace at least back to 1460 which is a healthy 52 points. I just hope it will not do it all in one or two days. Link

Jane Fox : 5/10/2007 9:21:36 AM

The Russell 2000 cash index is probably the less bullish of all markets. If are brave and want to try and pick a top this is the market to use. Link

Jane Fox : 5/10/2007 9:15:59 AM

WASHINGTON (MarketWatch) -- Prices of goods imported into the U.S. rose 1.3% in April, driven higher for the second month in a row by a big increase in the price of imported petroleum. Petroleum prices climbed 6.5% last month, following a revised gain of 8.1% in March, the Labor Department reported Thursday.

Overall, the increase in import prices beat analysts' expectations. Economists surveyed by MarketWatch had been expecting import prices to rise by 0.9%.

Excluding petroleum, the gain in import prices was a modest 0.2%. Excluding all fuels, the gain was also 0.2%, as prices of imported natural gas fell by 1.8% after having risen by 4.4% in March.

All told, import prices have increased by 1.9% in the past 12 months.

Jane Fox : 5/10/2007 8:54:40 AM

Although the US$ daily chart is still quite bearish I have been seeing a bottom forming. This of course is certainly not good for my long Gold position but I do have a very clear "Get out" plan which I will execute if Gold continues to weaken. The one bright spot for us Goldbugs though is that little rally you see in Oil. Link

Jane Fox : 5/10/2007 8:49:30 AM

The equities market's overnight range was bearish because they have made lower lows and lower highs but PDLs have not even been tagged. Eventually we will have to pay the piper and this market will retrace and the longer that retracement takes the harder and faster it will be. Link

Jane Fox : 5/10/2007 8:40:07 AM

CHICAGO (MarketWatch) -- April was largely a sales disaster for most of the nation's largest retail chain stores.

But it wasn't unexpected. Retailers raised flags well ahead of Thursday's results and investors grounded themselves long before that for what undoubtedly would be the weakest month, so far, of the year.

Though they may have crossed their fingers for an upside surprise here and there, investors knew -- and priced into the stocks -- that the sorry combination of yucky weather, an early Easter and tough year-over-year comparisons would spell trouble for the final tab of same-store sales numbers in April.

And the early results bore that out. With more than half of retailers reporting to Thomson Financial, 79% of them missed expectations for same-store sales, the industry's benchmark for growth measured by receipts rung up at stores open longer than a year.

Thomson Financial's Jharonne Martis warned investors not to take the month's results to heart, urging them instead to combine March and April - what some analysts call "Mapril" -- for a clearer picture of how consumers are spending.

Jane Fox : 5/10/2007 8:37:57 AM

WASHINGTON (MarketWatch) - U.S. trade deficit in March widened sharply after showing some improvement over the past six months, a government report showed Thursday.

The nation's trade deficit widened by 10.4% in March to $63.9 billion, its highest level since last September, the Commerce Department said. It is the largest increase in the deficit since September 2005.

The size of the trade deficit surprised economists. Analysts surveyed by MarketWatch had expected the deficit to widen only to $59.6 billion. See Economic Calendar. The trade gap in February was revised down to $57.9 billion from the previous estimate of $58.4 billion.

For the first three months of the year, the deficit totaled $180.7 billion, down from $191.6 billion over the same period last year.

Jim Brown : 5/10/2007 8:23:00 AM

Same Store Sales Dismal
The numbers out this morning on Retail Sales show consumers stayed home in April. 79% of retailers tracked by Thomson Financial missed their same store sales estimates. Many had been warning for the last couple weeks but most missed even those lowered estimates. Wal-Mart was a major disaster with a -4.6% decline in the Wal-Mart label. Sams Club managed to post a minor gain of +2.5%. CostCo was the big winner with a +7.3% jump. The rest of the pack turned in dismal drops, many in the double digits. This has pressured the futures ahead of the open and we will see if the bulls are up to buying the dip one more time.

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