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Keene Little : 6/8/2007 1:09:58 AM

End of day re-posts:

Friday's pivot tables (updated for September contracts): Link and Link

I'm going to be hitting the road early on Friday as I start my annual trek across country to head for eastern Canada and join my folks for the summer as I did last year. My father and I should finish up our airplane (it'll be on floats since we live on an island just east of Lake Ontario) and get to do some flying around that gorgeous part of the country this summer.

I'll be staying connected via wireless internet but obviously won't be able to monitor the market closely until I arrive at my destination by next Tuesday. I'll pull off the road and make comments as I'm able to and when I see certain setups. Take care and trade carefully over the next few days as it could get volatile and whippy.

In the meantime, here's what I see setting up for the next few days. The next significant Bradley turn date is June 14th. The way it's looking right now that could mark the high for a 2nd wave correction to this week's decline. Using Thursday's low (may not be the final low), a 62% retracement would take the DOW back up to the bottom of its up-channel from March on June 14th at 13527. Link

SPX is set up for a rally into opex as a 2nd wave correction and I like the 1525 area by next Thursday as an upside target. Link

NDX has the same setup as the others now, except it maintains a better possibility for a rally to a new high since it hasn't yet broken below its May 24th low. But assuming it's on the same path as the DOW and SPX, especially with the break of its uptrend line from March, a 2nd wave correction into opex week could have NDX topping out around 1919 (62% retracement, which will change if NDX drops lower on Friday). Link

The RUT broke marginally below its uptrend line from March so it could still be in "throw-under" territory but considering what has happened in the market I'd be more inclined to believe it too has put in a major high. A rally back up to the 840-850 area next week could set up a good short play. But the first trade setup on Friday should be a long play into next week. Link

CME stopped at resistance at 545 yesterday and today (spiked a little higher this morning) and turned back down. If it consolidates here a little longer then the likelihood is that it will rally higher in which case I'd watch 555 for potential resistance and then layered resistance up to about 585. Otherwise a turn back down here should have it heading for new lows. Link

After a gap up on Thursday and rally higher, GOOG then gave it all back and then some, dropping more than $10 from its morning high. It found support at previous resistance at 513 so as long as that holds it could continue rallying up to the 538-540 area. Otherwise a drop back below 513 could have it testing 490 next. Link

SMH broke below 35.70 and created a sell signal. The semis have been underperforming the tech index for a long time and I suspect they'll be leading the techs to the downside. Link

Jeff Bailey : 6/8/2007 12:55:56 AM

As Keene and Jane noted early yesterday morning (Thursday), Thursday was "roll" day for June to September equity futures.

Going forward, any YM trades I profile with be for the September (ym07u) contact.

Thursday's YM close/settle via CBOT at this Link

Jeff Bailey : 6/8/2007 12:51:19 AM

Hang Seng ($HSI) Link ... currently down 324, or -1.56% at 20,476.

Low/High has been 20,434/20,531.

Jeff Bailey : 6/8/2007 12:48:47 AM

Nikkei-225 Link ... currently down 279, or -1.55% at 17,775.

Low/High has been 17,697/17,904

Jeff Bailey : 6/8/2007 12:45:36 AM

Current MM Close/Open Positions that I've made at this Link

I hope to have my charts up and running at some point tomorrow. IT support working on a fix, but it doesn't appear to be QCharts specific.

Thanks to Jane and Keene and subscribers for their help on Thursday.

Jeff Bailey : 6/8/2007 12:33:07 AM

Money Stock Measures (Money Supply) released today (6/07/07) at this Link

Marc Eckelberry : 6/7/2007 11:18:34 PM

SMH managed a close above 50% 2007 today and all indications from NSM are that semis are turning a corner. SMH up to 35.90 after hours. Link


OI Technical Staff : 6/7/2007 9:59:59 PM

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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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Keene Little : 6/7/2007 5:30:44 PM

Friday's pivot tables (updated for September contracts): Link and Link

Jeff Bailey : 6/7/2007 5:23:49 PM

Parting quote of the day ... "Bears, Paris Hilton get out of jail!"

Keene Little : 6/7/2007 5:15:12 PM

I'm going to be hitting the road early tomorrow morning as I start my annual trek across country to head for eastern Canada and join my folks for the summer as I did last year. My father and I should finish up our airplane (it'll be on floats since we live on an island just east of Lake Ontario) and get to do some flying around that gorgeous part of the country this summer.

I'll be staying connected via wireless internet but obviously won't be able to monitor the market closely until I arrive at my destination by next Tuesday. I'll pull off the road and make comments as I'm able to and when I see certain setups. Take care and trade carefully over the next few days as it could get volatile and whippy.

Jeff Bailey : 6/7/2007 5:09:32 PM

Ok, I've got to get my charts up and running, but I thought it important to get the OI's of at least the IWM/RUT and SPY/SPX at this point.

If I can get QCharts up and running before midnight, I'll get the Up/DnTick readings.

Jeff Bailey : 6/7/2007 5:06:56 PM

CBOE's RUT Option Montage at this Link ... "Why" so much action on the puts, but the in the money calls from 820-830 rather "complacent?"

Keene Little : 6/7/2007 5:04:22 PM

If we are starting Bear Market II then keep in mind that the typical intermarket relationships will get skewed. Because all asset classes have benefitted from the credit expansion and global liquidity increase, most asset classes will also decline together due to a credit collapse. Gold, bonds, equities, real estate, etc. will all suffer together. Trade each on its own merits/charts and be careful about trading one off another.

Keene Little : 6/7/2007 4:59:39 PM

Here's the SMH (semi holder) chart from last night, updated with today's price. I had said a break below 35.70 would be a sell signal. We got it today. The semis have been underperforming the tech index for a long time and I suspect they'll be leading the techs to the downside. I believe we started the next bear market leg down this week. Link

Jeff Bailey : 6/7/2007 4:55:51 PM

CBOE's IWM Option Montage at this Link

Keene Little : 6/7/2007 4:52:03 PM

CME stopped at resistance at 545 yesterday and today (spiked a little higher this morning) and turned back down. If it consolidates here a little longer then the likelihood is that it will rally higher in which case I'd watch 555 for potential resistance and then layered resistance up to about 585. Otherwise a turn back down here should have it heading for new lows. Link

GOOG had a great start to its day but then gave it all back and then some, dropping more than $10 from its morning high. It found support at previous resistance at 513 so as long as that holds it could continue rallying up to the 538-540 area. Otherwise a drop back below 513 could have it testing 490 next. Link

Jeff Bailey : 6/7/2007 4:49:06 PM

CBOE's SPY Option Montage at this Link

Jeff Bailey : 6/7/2007 4:43:57 PM

CBOE's SPX Option Montage at this Link

Marc Eckelberry : 6/7/2007 4:37:24 PM

Look to buy NQ September 1900/1902 area (NDX 1877, 50 dma), which would be around QQQQ 46. That's the opex trade going into next week. We never get three -2000 NYSE days without a strong rally. My guess is one more low tomorrow and a mid-day rally that will find more buyers next week. Don't chase it lower here. Wait for a rally to go short.

Keene Little : 6/7/2007 4:34:24 PM

The RUT broke marginally below its uptrend line from March so it could still be in "throw-under" territory but considering what has happened in the market I'd be more inclined to believe it too has put in a major high. A rally back up to the 840-850 area next week could be a very nice short play setup. But first trade setup on Friday should be a long play into next week. Link

Jeff Bailey : 6/7/2007 4:31:37 PM

SPY 149.23 -1.72% ... as I type.

Per my Market Wrap of 5/27/07, I must now turn more defensive the broader market Link

Marc Eckelberry : 6/7/2007 4:23:24 PM

I think the selling in bonds is an unwinding of the recession trade, not inflation fears. This means we could be topping out very soon on yields and setting up a monster equity rally. The economy will slow down again in Q3. This panic bond selling will not last.

Keene Little : 6/7/2007 4:21:06 PM

NDX has the same setup as the others now, except it maintains a better possibility for a rally to a new high since it hasn't yet broken below its May 24th low. But assuming it's on the same path as the DOW and SPX, especially with the break of its uptrend line from March, a 2nd wave correction into opex week could have NDX topping out around 1919 (62% retracement, which will change if NDX drops lower on Friday). Link

Jeff Bailey : 6/7/2007 4:13:08 PM

CBOE's Most Active Call, Put Option Series at this Link

Keene Little : 6/7/2007 4:12:12 PM

I've mentioned in the past, including in last night's Wrap, that the next significant Bradley turn date is June 14th. The way it's looking right now that could mark the high for a 2nd wave correction to this decline. Using today's low (probably not the final low), a 62% retracement would take the DOW back up to the bottom of its up-channel from March on June 14th at 13527. Link

Jane Fox : 6/7/2007 4:09:09 PM

SPX closed BELOW the 50EMA. Egads I guess those bearish MACD divergences we saw were telling us something. Link

Keene Little : 6/7/2007 4:05:04 PM

Still no bullish divergences at the lows so it's too early to be thinking of stepping in front of this train. We'll see what the morning brings us. Tough to sell in hole here but clearly too early to buy it.

Keene Little : 6/7/2007 4:00:37 PM

Ugly finish to an ugly day. SPX is already at 1490.

Keene Little : 6/7/2007 3:55:59 PM

SPX is set up for a rally into opex but not the kind I was thinking before today. Now it looks like it's set up for a 2nd wave correction and I like the 1525 area by next Thursday as an upside target. Link

Jeff Bailey : 6/7/2007 3:55:33 PM

^VIX Link from Yahoo! is 16.31 ... if correct, that would be well above MONTHLY R2 (15.46)

Jeff Bailey : 6/7/2007 3:53:46 PM

If VIX.X is above MONTHLY R2, get your RISK under control. NAKED PUTS may well be at great risk.

Jeff Bailey : 6/7/2007 3:51:46 PM

Mr. Gross made his call at the close, and tomorrow morning's bond trade could be a dinger.

I (Jeff Bailey) and followers of my MM profiles are OUT of the 1/2 bullish position in the TLT.

Jeff Bailey : 6/7/2007 3:49:54 PM

If I can't get my charts running by tomorrow morning, I don't want that trade unfollowed. Not sure I want it open even if I do get charts.

Jeff Bailey : 6/7/2007 3:49:10 PM

Swing trade NAKED Put close out alert ... buy back the Hartford Financial HIG July $95 Put (HIG-SS) at the offer of $1.30.

HIG $98.42

Keene Little : 6/7/2007 3:43:02 PM

Getting what looks like should be the next, and maybe last, leg down for this decline. We could see some follow through selling tomorrow morning as those who review tonight's papers decide they better sell some of their stock. But we should put in a tradeable bottom very soon. I would guess the most we'll see is SPX 1490-1491 to the downside.

Jeff Bailey : 6/7/2007 3:40:57 PM

IWM $82.32

Jeff Bailey : 6/7/2007 3:40:30 PM

GS $221.48

Jeff Bailey : 6/7/2007 3:40:10 PM

JPM $50.11

Jeff Bailey : 6/7/2007 3:39:45 PM

AIG $71.52

Jeff Bailey : 6/7/2007 3:39:28 PM

C $52.91

Jeff Bailey : 6/7/2007 3:39:09 PM

RKH $157.65

Jeff Bailey : 6/7/2007 3:38:48 PM

HIG $99.00

Jeff Bailey : 6/7/2007 3:37:58 PM

Can see some "improvement" after bond market's close. Very subtle though. As if computers "turned off" their systematic selling after losing the bond trade.

Jeff Bailey : 6/7/2007 3:34:30 PM

03:30 Watch/Internals at this Link

Jeff Bailey : 6/7/2007 3:32:44 PM

CNBC saying Pimco's Bill Gross turning bearish on Treasuries.

Jeff Bailey : 6/7/2007 3:20:13 PM

NASDAQ Summation ($NASI) ... as of last night's close was -7.22, but in a column of X. Link

Jeff Bailey : 6/7/2007 3:19:10 PM

NYSI Summation Index ($NYSI) as of last night's close was still in column of "O" at +574. Link

Jeff Bailey : 6/7/2007 3:13:25 PM

Pacholder High Yield (PHF) $10.09 is up $0.03.

SEC Yield would be $0.90/$10.09= 8.92%.

Jeff Bailey : 6/7/2007 3:11:40 PM

iShares Russell 2000 (IWM) $82.47 is down $1.04.

Jeff Bailey : 6/7/2007 3:09:41 PM

Goldman Sachs (GS) $221.72 is down $5.58.

Jeff Bailey : 6/7/2007 3:08:25 PM

JP Morgan (JPM) $50.15 is down $0.41.

Jeff Bailey : 6/7/2007 3:08:54 PM

American Intl. Group (AIG) $71.67 is down $0.50.

Jeff Bailey : 6/7/2007 3:07:25 PM

Citigroup (C) $52.96 is down $0.37.

Jeff Bailey : 6/7/2007 3:06:46 PM

Regional Bank HOLDRs (RKH) $157.61 is down $1.32.

Jeff Bailey : 6/7/2007 3:06:13 PM

HIG $98.86 is down $-1.64.

Jeff Bailey : 6/7/2007 3:04:49 PM

Trader/investors have to get their mind around what Mr. Santelli is discussing.

Those that have been following my commentary over the years will know that I become VERY alert to sudden shifts in currency and Treasury YIELD.

It can become some type of "revalation" or turning/inflection point.

Jeff Bailey : 6/7/2007 3:03:16 PM

03:00 Watch/internals snaphsot at this Link

Jeff Bailey : 6/7/2007 2:55:19 PM

Deleted my 02:52:15 post. USO high has been $51.24, not the needed $51.50 Link

Keene Little : 6/7/2007 2:53:56 PM

I'm thinking this bounce will fail and we'll drop to another new low. Then it might be a good setup for a long play but at this point it's risky since it's more common for the late afternoon move to be in the direction of the day's direction--down in this case. We might get one more minor push higher before it drops again.

Jeff Bailey : 6/7/2007 2:49:14 PM

PTR-II are $3.20 x $3.50.

Jeff Bailey : 6/7/2007 2:46:00 PM

Unleaded was higher last I saw.

Jeff Bailey : 6/7/2007 2:45:32 PM

VLO $73.44 is down $0.82.

Jeff Bailey : 6/7/2007 2:45:05 PM

PTR $132.63 is down $0.64.

Jeff Bailey : 6/7/2007 2:44:35 PM

US Oil Fund (USO) $50.76 is up $0.44. High/Low has been $51.24/$50.26.

Jeff Bailey : 6/7/2007 2:43:21 PM

DJ- Oil Futures: ... Crude Rallies $1, Poised For Highest Close Since September

Jeff Bailey : 6/7/2007 2:41:08 PM

GLD $65.30 is down $1.10

Jeff Bailey : 6/7/2007 2:40:26 PM

DJ- Precious Metals: ... NY gold falls amid fund selling; stops hit.

Keene Little : 6/7/2007 2:36:50 PM

Marc, I completely agree with you on the volatile triple witching coming up. This week's leg down should bottom soon (looks like new lows for the day still coming) but then we'll get a 2nd wave bounce into opex so it'll be an outstanding trade to the long side--SPX 1525 is what I'm thinking we'll see. But it will probably be a pretty whippy climb back up. And then post-opex or even starting mid week, will likely be the start of a wicked sell off (wave-3 down).

Jeff Bailey : 6/7/2007 2:36:11 PM

I'm showing 26 contracts having traded in the HIG-SS so far today. Low/High $0.85/$1.20

Marc Eckelberry : 6/7/2007 2:29:54 PM

I would patiently wait for a rally up to 20 dma's to short, or buy 50 dma's on SPX and COMP, coming right up.

Jeff Bailey : 6/7/2007 2:29:14 PM

I've loaded and reloaded QCharts twice now and can't get anything. Something must be wrong with computer, but I'll work with what I've got.

Want to "judge" equity reaction when bond market closes. Observation to this point is that the "jolt" higher in yields as triggered a "jolt" lower in equities.

Marc Eckelberry : 6/7/2007 2:28:25 PM

It looks like NYS 10K was the top. Just remember that 2 days in a row of -2000 ADVDDEC might have a third, but after that, rallies can be very strong. It is going to be the most volatile triple witching in years.

Jeff Bailey : 6/7/2007 2:27:13 PM

Swing trade NAKED Put establish stop alert ... I've got HIG $98.59 x $98.62 $-1.88 and the HIG-SS at $1.20 x $1.30.

This is my MM Profiles BIGGEST RISK trade, and at this time, need to control risk.

If it takes out current session low of $98.24, will have to CLOSE out the HIG-SS.

Keene Little : 6/7/2007 2:23:31 PM

The NYSE daily chart shows a clear fractal pattern that has played out. The overlapping 5-wave move into the February high resulted in a fast break down. The overlapping 5-wave move into Monday's high has resulted in a fast break down. Link

The difference here is the wave count--the February high was the end of the 3rd wave in the rally from October 2005 and Monday's high finished the 5th wave. If the count is correct then you don't want to buy any more dips (other than short term trades) but instead look for rallies to sell. The kind of recovery off the March low to another new high is now much less likely to happen (but the dipsters will try).

I had said in last night's Market Wrap that the market could tolerate a quick spike down today but it had to rally otherwise the wave pattern turns bearish. Well the wave pattern has turned bearish. I just can't figure out a way to put a bullish spin on this. The only ones who could still put in a new high next week are the techs and small caps.

Jeff Bailey : 6/7/2007 2:23:02 PM

Forex Currency Link ... dollar index should be higher, but don't have a composite.

Jeff Bailey : 6/7/2007 2:20:54 PM

Paris can wait ... Jane ... any help with a U.S. Dollar Index quote?

Jeff Bailey : 6/7/2007 2:19:00 PM

Equity bulls really don't want to see the dollar index dart back below MONTHLY Pivot. In my opinion, that could signal significant rotation of capital out of US assets.

Jane Fox : 6/7/2007 2:17:33 PM

And we are heading down once again.

Jane Fox : 6/7/2007 2:17:06 PM

My long from 834.70 was stopped at 832.80.

Jeff Bailey : 6/7/2007 2:16:17 PM

10-year looks to be juuust under MONTHLY R2.

Jeff Bailey : 6/7/2007 2:15:27 PM

Key Interest Rates at 02:00 PM EDT source Dow Jones Link

Jane Fox : 6/7/2007 2:13:20 PM

Oh my gosh Paris Hilton is out of jail and is on a house arrest. Her house is fabulous, poor baby.

Jane Fox : 6/7/2007 2:10:53 PM

I was wondering this morning if the RUT and NAZ would bring the SPX and DOW or the SPX and DOW would bring the RUT and NAZ back up. well I guess we have our answer.

Marc Eckelberry : 6/7/2007 2:09:50 PM

You have to go to May 2004 to get a worse NYSE ADVDEC line. It could mean a bounce coming, either at the close or tomorrow. Either that or we really crash.

Jeff Bailey : 6/7/2007 2:09:38 PM

OI was heaviest at $35.00 strike.

Jeff Bailey : 6/7/2007 2:08:57 PM

BOOM $34.91 x $34.95 ... small cap "favorite" weak.

Jane Fox : 6/7/2007 2:07:44 PM

The last time the DOW was under its 20EMA was April 2nd when it was coming off the Chinese debacle on Feb 27th

Jane Fox : 6/7/2007 2:06:47 PM

This drop is more than the little swiggles we have since April.

Jeff Bailey : 6/7/2007 2:06:34 PM

Gulp! ... NYSE NH/NL currently 37:94.

Yhoo! Finance Internals Link ... wait, they've got a/d too.

Keene Little : 6/7/2007 2:05:06 PM

The last times the NYSE a-d got this negative was on May 7, 2004, April 13, 2004 and October 9th, 2002 (THE October 2002 low). The difference here is that this kind of negative breadth is the kickoff to the decline and not at the end of one. This is a huge difference. So it may result in an oversold bounce but understand the significance of today's sell off. This is potentially serious.

Jeff Bailey : 6/7/2007 2:04:31 PM

On 3/5/07 the NYSE recorded NH/NL of 41:88.

Jane Fox : 6/7/2007 2:03:54 PM

Just a tad overdone me thinks.

Jane Fox : 6/7/2007 2:03:39 PM

Jeff the -2732 is the advancing minus the declining.

Jane Fox : 6/7/2007 2:02:26 PM

833.80 was just a tad close :(

Jeff Bailey : 6/7/2007 2:02:24 PM

If so, then the last time we saw two back-to-back A/D lines was 03/02/07 (friday) and 3/5/07 (monday)

Jane Fox : 6/7/2007 2:02:07 PM

Sorry stop is 832.80

Jane Fox : 6/7/2007 2:01:40 PM

Triggered long at 834.70 stop is 833.80.

Jeff Bailey : 6/7/2007 1:59:35 PM

Jane! Is that 2,735 down on the NYSE?

Keene Little : 6/7/2007 1:58:50 PM

The last two times the a-d got this negative were May 10th and 24th, both of which were followed by rallies the following days. We know this is overcooked to the downside now so it's risky for shorts. Are the Boyz going to step back in soon, after having picked up their boatload of cheap June call options and jam the shorts again? Beware the v-bottom from this kind of selling.

Jeff Bailey : 6/7/2007 1:58:16 PM

What's notable out the decline yesterday, and then today is the seeming VERY bullish UpTick/DnTick observation in the IWM from 06/05/07, that then unleashed to the downside. "Something changed" ... OP-EX, or reconstitution provides the uncertainty.

Jeff Bailey : 6/7/2007 1:56:39 PM

RUT.X looks to be testing 50-day SMA Link ...

Jane Fox : 6/7/2007 1:55:26 PM

NYSE AD line is reeeeediiiculous. Link

Keene Little : 6/7/2007 1:54:39 PM

Jeff, QCharts is reporting NYSE a-d at -2732 and NAZ at -1734.

Jane Fox : 6/7/2007 1:53:31 PM

WE are very oversold.

Jane Fox : 6/7/2007 1:53:08 PM

Lowering my long ER to 834.70.

Jeff Bailey : 6/7/2007 1:50:06 PM

I'm reloading my QCharts to see if I can't find a fix.

Jeff Bailey : 6/7/2007 1:49:44 PM

Jane, Keene ... any help on the NYSE and NASDAQ a/d?

Jeff Bailey : 6/7/2007 1:49:03 PM

If A/D lines aren't at least 1,000 on the advance, then no real bounce in my opinion. If below 600, then likely lower to the close.

Jane Fox : 6/7/2007 1:45:51 PM

Isn't the pattern on the DOW chart called 3 black crows or something.

Jeff Bailey : 6/7/2007 1:46:42 PM

Got to think ... China weakness, then hits Europe, then hits US.

Hang Seng Link rallies back to triple-bottom sell, Europe continues to weaken, US picks up downside momentum, should see China sell off again.

Jane Fox : 6/7/2007 1:44:45 PM

Please give me my DIA puts back :( Link

Jeff Bailey : 6/7/2007 1:44:01 PM

ACH $32.62 x $32.63 ... down $0.96.

Jane Fox : 6/7/2007 1:43:32 PM

My goodness gracious the SPX is actually testing its 50EMA. Looks lile the MACD divergences were telling us something. Link

Jeff Bailey : 6/7/2007 1:43:12 PM

Discosure: I currently hold bearish position in ACH

Jeff Bailey : 6/7/2007 1:42:49 PM

Swing trade put alert for an additional ACH-WF) at the offer of $2.30.

Linda Piazza : 6/7/2007 1:41:59 PM

The TRAN continues to print lower lows (although with bullish divergences on the 30-minute chart) as does the EUR/JPY, although the USD/JPY appears to be attempting to steady at yesterday's low. The TRAN tends to lead the OEX, SPX and Dow, so that's why I'm watching it. The EUR/JPY (thanks, Marc) and USD/JPY give us some insight on what might be happening in the global community with the yen carry trade, even those of us such as me who are relatively unversed in economics.

Jeff Bailey : 6/7/2007 1:39:23 PM

Would also want to see a MINIMUM of four (4) equity-based indexes in the green.

Jeff Bailey : 6/7/2007 1:38:19 PM

Wouldn't even try to pick a bottom in equities until bond market closes, or Treasuries stabilize.

QCharts still down on this end.

I've got TLT $83.94, session low has been $83.73 with high still $84.71. That puts mid-point at roughly $84.25. TLT Level II Link

Keene Little : 6/7/2007 1:37:24 PM

And NDX has now tagged its Fib projection (dropping a tad lower) at 1893.41 for a throw-under of its March uptrend line. It needs to turn back up now otherwise its pattern starts to look bear-ugly (or would that be bear-beautiful?) as well.

Jane Fox : 6/7/2007 1:34:56 PM

Smith Open Number system is saying only short. Link

Keene Little : 6/7/2007 1:33:15 PM

Sorry, that's 1496 on SPX not 1498.

Keene Little : 6/7/2007 1:32:41 PM

Last Fib support for SPX is near 1498. If that doesn't hold then I'm not even interested in finding a low until 1491.

Keene Little : 6/7/2007 1:27:22 PM

Sometimes you just need to keep things real simple and trend lines are about the simplest way to trade. So, the break of the up-channel for the DOW is now bearish. Any questions? This might end up being another head fake day for a rally into opex but at this point I'd have to say the odds are increasing that it will only be a rally to correct this week's decline. The more this drops the greater the likelihood that the DOW and SPX (not sure about NDX and RUT yet) have already put in their highs. DOW daily: Link

Keene Little : 6/7/2007 1:19:40 PM

This is surprising. With the previous two days having strong negative breadth the odds (81%) were that we'd get a rally today. Just goes to show when you get a parabolic rally that the unwinding can be stronger than odds would tell you. This is now getting ugly.

Keene Little : 6/7/2007 1:17:22 PM

Nope, new lows.

Keene Little : 6/7/2007 1:16:23 PM

Nice tight risk to try a long play now, stop at a new daily low. Needs to bounce now though.

Jane Fox : 6/7/2007 1:12:03 PM

I will go long ER at 838.60

Linda Piazza : 6/7/2007 1:05:14 PM

OEX and SPX short-term bears: it's time to be sure you've got profit-protecting plans in place. Although the OEX and SPX can of course continue to tumble, I have short-term downside targets of 689.05-689.32 for the OEX, from 30-minute Keltner channels (689.05 on 30-minute closes, not intra-30-minute periods) and 689.32 from a fitted Fib bracket. I have tentative SPX downside targets of 1500.74 (on 30-minute closes) from the 30-minute Kelter chart and 1500.87 from a fitted Fib bracket. Both of those were just exceeded by a bit.

I'm not saying that the indices can't go lower. They've blown through many support levels already, and it would seem likely that we need at least a retest of the low (after a first bounce attempt) before anything bigger could get underway, and I'm not suggesting you switch sides, but I am suggesting that it's time that you know how much you're willing to give back in case a bounce does begin. Just do account-management type things such as lowering your stops to an account-appropriate amount, considering stepping out of partial positions and locking in profit, not letting a profit turn into a loss, that sort of thing.

Jeff Bailey : 6/7/2007 1:04:53 PM

Feel like Ge Hong on Monday. She probably had charts though.

Keene Little : 6/7/2007 1:04:38 PM

That last low on SPX has now left a bullish divergence on the 5-min chart. Just maybe. A pullback to a higher low will be the time to try a long play--stop at a new daily low.

Keene Little : 6/7/2007 1:01:42 PM

Gold remains more in synch than not with equities, selling off today as well. It was a picture perfect short setup at the retest of its broken uptrend line on Monday--a kiss and a slap. Link

Jeff Bailey : 6/7/2007 1:00:04 PM

I'm down ... (No charts, data feeds)

Jeff Bailey : 6/7/2007 12:51:04 PM

SPY Jun $149 Puts (SFB-RS) #2 most active on CBOE at 26,656 with OI 42,668.

Jane Fox : 6/7/2007 12:50:27 PM

Target hit at 837.00

Jeff Bailey : 6/7/2007 12:50:05 PM

Recent highs for majors came on the 1st/or 2nd of month and counter lows that came on 1st of April and May. Quarterly rebalance of some kind is all I can think of at this point in time.

Jane Fox : 6/7/2007 12:49:56 PM

Once ER breaks the daily low at 837.50 move stop to b/e

Jane Fox : 6/7/2007 12:49:12 PM

Now to 838.80 so we have 4 ticks at risk here.

Jane Fox : 6/7/2007 12:48:43 PM

Lower stop to 839.80

Jeff Bailey : 6/7/2007 12:48:31 PM

Can't get option montage reads at all via QCharts.

Option chain has SPY July $147 Put (SFB-SQ) unwinding. 35,669 traded, OI just 20,929

Jane Fox : 6/7/2007 12:47:55 PM

Target 837 which is 14 ticks.

Jane Fox : 6/7/2007 12:47:30 PM

Move stop to 840.30

Keene Little : 6/7/2007 12:45:43 PM

I'm back. What's up with the bonds? They're still dropping (yields rising). And now equities are dropping lower again. The bottom of the down-channel for SPX is now appoaching 1500 and at the downside Fib projection I mentioned earlier. Watch the 5-min chart for the first hint of bullish divergences and if there are none then don't step in front of this train. The trend is down and it could get ugly with yields getting as high as they are.

Jane Fox : 6/7/2007 12:45:19 PM

Triggere short at 838.40 stop at 840.70

Jane Fox : 6/7/2007 12:44:43 PM

Short at 838.40

Jane Fox : 6/7/2007 12:42:28 PM

Stopped at the low tick 838.80.

Jeff Bailey : 6/7/2007 12:40:11 PM

VIX.X alert! 16.15 +8.60% ...

Jeff Bailey : 6/7/2007 12:39:17 PM

TLT 83.91 -1.73% now.

Jeff Bailey : 6/7/2007 12:38:15 PM

Trader that bought TLT on 5/24/07. Play some defense, perhaps a covered call.

Longer-dated may well go 5.25% at minimum. Volume still rather light and more liquidation to come. No sign of capitulation.

Jeff Bailey : 6/7/2007 12:31:25 PM

RUT.X 4-point box chart Link

Marc Eckelberry : 6/7/2007 12:24:13 PM

In fact, I think a great trade out there is to sell EUR September (USD globex). I think spot 1.35 is toast and we could get down to 1.20/1.30 by year end.

Jane Fox : 6/7/2007 12:21:15 PM

Triggered long at 841.70 stop is 838.80 for now.

Marc Eckelberry : 6/7/2007 12:21:53 PM

Yen is not bidding against the dollar, that is the only good news out there. The real panic is in JPY/EUR carry trade unwinding. I would be a EUR short against the dollar, use EUR globex if you wish. 1.35 looks dead. Over here, it seems they are putting on some risk money in techs, so if you want to get long, stick to NQ/QQQQ/NDX. Stay away form anything rate sensitive. Only high margin companies, which is why GOOG and AAPL are bidding.

Jane Fox : 6/7/2007 12:19:02 PM

ER made a high of 841.60 - no cigar!

Jane Fox : 6/7/2007 12:17:52 PM

If triggered long at 841.70 I will put at stop at 838.80 and raise the stop as soon as I get into profit.

Keene Little : 6/7/2007 12:16:48 PM

Stepping away for about 30 minutes. Watch the current bounce for two equal legs up off this morning's low. If it fails there then we're probably going to head back down to a new low. Then watch for bullish divergences to dip you toe in on the long side. Careful of them gators though.

Jeff Bailey : 6/7/2007 12:16:30 PM

OK ... $83.00 is key near-term resistance for IWM. See my "wave count" analysis from 06/04/07. DO NOT move that lower channel upward trend. Also, slide my #3 down to the 06/01/07 all-time high.

Jeff Bailey : 6/7/2007 12:13:06 PM

There ... CNBC ... currency "rotation" looks to be yen/euro

Keene Little : 6/7/2007 12:07:24 PM

The corrective pullback pattern for NDX continues to keep me from getting too bearish on this decline. It really looks like it's going to set up for another rally leg into next week. There are a couple of ways to look at the decline from last Friday, from an EW perspective, and I get different downside projections based on those interpretations but here's my best guess at the moment: Link

Friday's high was a throw-over above the top of the large ascending wedge pattern developing over the past 6 weeks or so. This is often followed by the same but opposite move on the next swing--so a throw-under below the wedge. I have a Fib projection at 1893.41, just below the uptrend line from March, and this week's decline is looking like a descending wedge. I still think we'll see a rally out of this. Just need to find the bottom.

Jeff Bailey : 6/7/2007 12:07:13 PM

Trying to pull up RUT/IWM and SPY/SPX options chains, but having problems with QCharts. Pretty good idea from past posts where OI is at on RUT/IWM from recent MM postings, but VIX.X action suggests it is NAKED PUT traders having some problems.

Jane Fox : 6/7/2007 12:06:43 PM

Just above the consolidation band we are now in.

Jane Fox : 6/7/2007 12:06:19 PM

I am going to go long ER at 841.70.

Jane Fox : 6/7/2007 12:04:12 PM

How many of you are now singing "I'm So Excited"?

Jeff Bailey : 6/7/2007 12:03:02 PM

Hartford Financial Services (HIG) $98.96 -1.53% ... still "dipping"

Jeff Bailey : 6/7/2007 11:59:51 AM

H/S Top pattern objective on TLT still in play to $82.00.

Jane Fox : 6/7/2007 11:59:19 AM

I have gone through the OEX and DOW stocks and picked out some really good candidates for "Buy the DIP." I will spend some time this weekend setting up the spreadsheet for them and once the 120/60 charts turn green we can pounce. These are stocks you can trade with options because they have large volume. Also I will restrict the list to ones that have had a very nice runup lately.

Jeff Bailey : 6/7/2007 11:57:49 AM

10-year YIELD ($TNX.X) 5.088% ... has retraced 80.9% of its 6/29/06 (5.245%) to 12/01/06 (4.425%) decline.

MONTHLY R2 at 5.119%.

Jane Fox : 6/7/2007 11:55:33 AM

I see the DOW and SPX daily jtHMA have now turned red so once the 120/60 charts turn back green you have a long trigger. I feel like a Pointer Sister, "I'm so Excited." Link

Jeff Bailey : 6/7/2007 11:52:18 AM

Amerco Earnings Press Release Link

Jeff Bailey : 6/7/2007 11:51:01 AM

There's some type of "rotation"

Jeff Bailey : 6/7/2007 11:50:50 AM

200-day SMA alert ... UHAL $77.48 +11.67%

Jeff Bailey : 6/7/2007 11:48:21 AM

Keene ... what you see in Treasuries that different today than 5/23/07 at 02:33:26?

I'm not seeing any sign of "rotation." Am I missing something?

Keene Little : 6/7/2007 11:48:04 AM

The internal pattern of the the down legs in the decline from Monday afternoon has not been clear but the larger pattern certainly looks like a clean 5-wave move down: Link

There's another Fib relationship between waves where the 5th wave is often 62% of waves 1-3, which as shown on the chart is at 1503.90, right where price tagged the bottom of the parallel down-channel. But without the bullish divergence at the last low I'm not trusting it enough to recommend a long here. Another bounce and new low that finds support at the bottom of the channel with bullish divergence would have me testing it again (it's possible there's a slightly different wave count to the downside with another low to go).

Jeff Bailey : 6/7/2007 11:33:06 AM

11:00 Internals found at this Link

Jane Fox : 6/7/2007 11:42:45 AM

Very clear as to who has the ball this morning. The AD line is -2227 so I guess you could say the bears have field position as well. Link

Keene Little : 6/7/2007 11:30:13 AM

Equality between the 1st and 5th waves for SPX is at 1505.36 which has already been tagged. But I don't like the unfinished look of the move down from late yesterday afternoon--it doesn't look like it's found a bottom yet. A larger A-B-C pattern from last week has a Fib projection at 1500.61 so possibly nice round number support at 1500 is where we're headed.

Keene Little : 6/7/2007 11:27:02 AM

For a 5-wave move down in the DOW it would have equality between the 1st and 5th waves at 13360 so that's the next level I'd now watch for potential support. Also, since it now looks like a 5-wave move, we should expect at least a correction to the move down from Monday. If it is instead finishing a larger 3-wave correction from last week then we'll start another rally leg. For this reason I'm looking for where support will be and try the long side--it will either give us a good bounce or a rally to a new high, either of which will make for a good trade.

Keene Little : 6/7/2007 11:18:15 AM

Here's the updated TNX daily chart now that shows my expectation for a sideways/down (4th wave) correction, perhaps back to the broken downtrend line from January 2000 at 5.0% over the next month, to be followed by another rally leg into the summer: Link

The current rally leg from the May low could continue higher before we get a pullback but I see the risk shifting in the short term to bond bears since I think we're close to getting at least a bounce in bonds (pullback in yields). But to keep things in perspective, here's the weekly chart that I last showed in April where I made the projection for a rally to get up near 5.5% which should finish the bounce in yields from the 2003 low: Link

Note the ascending wedge pattern on the weekly chart. This is what has me thinking the rally in yields this year will be the last leg up before rates start dropping precipitously to lows below 3% over the next couple of years. One can only guess what's going to be happening in our economy (and the Fed's reaction to it) that will cause that kind of drop in rates.

Keene Little : 6/7/2007 11:14:57 AM

Dropping right through. Don't step in front of the freight train. Now we need to see a bounce and a retest of the low before thinking long (the risk is a v-bottom but those are hard to play and it's usually due to short covering).

Jeff Bailey : 6/7/2007 11:14:08 AM

Bear raid ...

Keene Little : 6/7/2007 11:11:14 AM

DOW just dropped through 13392 but only marginally so far. This is where it should hold if this is finishing the leg down from Monday. Look for evidence of bottoming here to start nibbling on the long side again.

Jeff Bailey : 6/7/2007 11:01:34 AM

11:00 Market Watch found at this Link

Jeff Bailey : 6/7/2007 10:56:17 AM

Russell 2000 (RUT.X) 835.22 -0.71% ... probes MONTHLY Pivot and short-term upward trend.

Keene Little : 6/7/2007 10:52:45 AM

Definitely some selling in the treasuries today. TNX has now made it up to the Fib projection at 50.97 (this morning's high is 50.99) and will likely lead to a pullback now (rally in bonds).

Keene Little : 6/7/2007 10:39:35 AM

So far we're doing the consolidation thing but it's possible that we're getting a small descending wedge (looking at the DOW) and one more minor low could do it.

Jeff Bailey : 6/7/2007 10:36:36 AM

EIA Weekly Nat. Gas Storage Table at this Link ... build of 110 bcf.

Jeff Bailey : 6/7/2007 10:34:01 AM

Since April 30, the CRB Index (CRY) 313.65 (unch), has gained 0.30%.

Jeff Bailey : 6/7/2007 10:32:07 AM

Since April 30, the US Oil Fund (USO) $51.05 +1.47% ... has fallen 0.37%.

Jeff Bailey : 6/7/2007 10:30:41 AM

Since April 30, the S&P 500 Index (SPX.X) 1,511.26 -0.40% ... has gained 1.94%.

Jeff Bailey : 6/7/2007 10:28:47 AM

Since April 30, the iShares Silver Trust (SLV) $136.40 +0.01% ... has gained 2.28%.

Jeff Bailey : 6/7/2007 10:27:00 AM

Since April 30, the Street Tracks Gold (GLD) $66.31 -0.15% ... has fallen 1.16%.

Jeff Bailey : 6/7/2007 10:24:51 AM

Since April 30, the US Dollar Index (DXY) 82.12 ... has risen from 81.27, so roughly 0.83%.

Jeff Bailey : 6/7/2007 10:20:33 AM

Large amount of cash has been coming out of Treasuries since our bullish exit in mid-March'07 (TLT around $89.50) and I certainly thought, or still think some cash would/will find its way back to these yields. Today's sharp move lower at the open "surprising" to me and suggests there may still be some capitulation to come.

Should be getting some updated money supply figures Link

Jeff Bailey : 6/7/2007 10:14:25 AM

TLT $84.62 ... new 52-weeker. Down -0.61% for 52-weeks.

Jeff Bailey : 6/7/2007 10:12:35 AM

10:10 Market Watch found at this Link

Jeff Bailey : 6/7/2007 10:05:37 AM

Amerco (UHAL) $73.89 +6.50% ... strong early. 3.5-month highs. 200-day SMA and 38.2% retracement of 4/06 to 3/07 decline just above at $77.25.

Keene Little : 6/7/2007 10:01:43 AM

If the market consolidates for just a bit here and then makes a new low that's when I'd watch to see if the DOW holds at or above its 13392 Fib projection, and the new low should be accompanied with bullish divergence on the shorter term charts. Right now it looks like the DOW is finding support from its May 24th low at 13424. Link

What the bulls are not going to want to see develop over the next week or so is a bounce back up to a lower high that creates a right shoulder for a H&S top. That kind of bounce followed by a break below the neckline would be a huge sell signal. Just something to keep in mind as we move into next week.

Jeff Bailey : 6/7/2007 10:02:59 AM

European Bourses weak with the FTSE-100 Link down 17 points, or -0.27% at 6.505, DAX Link down 79 point, or -1.03% at 7,651, CAC-40 Link lower by 56 points, or -0.94% at 5,921.

Jeff Bailey : 6/7/2007 10:00:42 AM

Asian Markets: ... were mostly higher. While the Hang Seng ($HSI) Link edged down 18 points, or -0.09% to close at 20,800, the Shanghai Composite ($SSEC) Link jumped higher by 114 points, or +3.03% to 3,890. Japan's Nikkei-225 ($NIKK) Link was up 12 points, or +0.07% at 18,053.

Jeff Bailey : 6/7/2007 9:51:12 AM

TLT did pay an ordinary dividend of $0.336/share today. Not on those shares purchased yesterday though.

Jeff Bailey : 6/7/2007 9:42:15 AM

10-year ($TNX.X) up 7.3 bp at 5.043% ...

30-year ($TYX.X) up 6.5 bp at 5.149% ...

Jeff Bailey : 6/7/2007 9:41:15 AM

Bullish swing trade stop alert for the iShares Lehman Trust 20-year (TLT) $84.67 -0.85% ...

Keene Little : 6/7/2007 9:31:00 AM

We got a big spike up in rates (bonds sold off overhight) and now TNX has jumped above its downtrend line from January 2000. It may head directly for a Fib projection just shy of 5.1% before we get the pullback that I expected before seeing rates head higher still. This will not make it easy for a stock rally. This is yesterday's unmodified TNX chart with this morning's price: Link

Keene Little : 6/7/2007 9:20:36 AM

The big overnight rally in equity futures got quite the reversal since the European markets opened. A 10 point swing in ES is a big move from top to bottom this morning. There's no telling where it might find support but now we've got a setup for the spike down this morning that gets reversed into some strong buying. That would be the head fake move before heading into opex.

But one thing's for sure, if this decline is the start of something bigger then it's going to catch a lot of people by surprise so be careful about stepping in front of the freight train. First let's see if SPX finds support at or above 1510 (pullback low on May 30th which is where ES found support this morning) and DOW at it's downside Fib projection at 13392 (YM 13407).

Jane Fox : 6/7/2007 9:11:51 AM

WASHINGTON (MarketWatch) -- First-time filings for state unemployment benefits fell 1,000 to a seasonally adjusted 309,000 last week, the Labor Department said Thursday.

This is the lowest level since the week ended May 12. Claims in the previous week fell 4,000 to 310,000.

Economists had been expecting jobless claims to tick slightly higher in the latest week, to about 312,000

Jane Fox : 6/7/2007 9:11:02 AM

The NAZ has used the blue trendline for support since December 2006 and I do believe it could return to test it again. When I look at the RUT and COMPX charts I realize that these two markets have more downside before they get to their support and if these two have more downside potential then the SPX and DOW should as well. So the $64000 is will the RUT and NAZ bring the SPX and DOW down or will the SPX and DOW hold the RUT and COMPX up. Only time will tell. Link

Jane Fox : 6/7/2007 9:01:53 AM

This may be all we get from the bearish MACD/RSI divergence.

Jane Fox : 6/7/2007 9:00:14 AM

The blue trendline I have drawn on the SPX chart was resistance from August 4th 2006 to September 25th 2006. SPX then broke above the trendline and it became support until February 27th when the SPX fell along with all other markets. On April 25th it broke above this trendline again and has used it as support ever since. I have no reason to think it will not be support again. Link

Jane Fox : 6/7/2007 8:55:06 AM

The DOW is testing its 20EMA and that may be all we get. As you can see the DOW has not spent a great deal of time under this MA since August of 2006 except for the month when it was forced down by the Chinese market. So unless something else happens to force this market back down again I will assume it will stay above the 20EMA for now. Link

Jane Fox : 6/7/2007 8:44:26 AM

The US$ up so Gold is down up Crude is up so I don't expect Gold will revisit if PDL soon. Link

Jane Fox : 6/7/2007 8:38:26 AM

Using the September contract all markets have now broken their PDLs on the dip they took at 8:15. I will be closing my July put position this morning because it has hit my target. Probably should have closed it yesterday. Link

Jane Fox : 6/7/2007 8:32:31 AM

I would like to say that I will be trading the September contract this morning. I have found you do not need to trade June until the volume comes into the contract because that happens very quickly with the Russell, usually by 10:00EDT.

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