Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
OI Technical Staff : 6/15/2007 9:59:59 PM

The Market Monitor has been archived.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

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

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 6/15/2007 8:52:17 PM

DAILY/WEEKLY/MONTHLY Index Pivot Matrix at this Link ... with some correlations outlined.

The cleanest is the BIX.X for Monday. Daily Pivot and WEEKLY Pivot overlap, then DAILY R2 and WEEKLY R1. What a move that would be! Dip to Daily S1/Weekly Pivot with a close at DR2/WR1.

Might be helpful for RUT traders, as all we've got is a target overlap at WEEKLY R1/MONTHLY R1. Financials are biggest weighting in RUT and SPX.

SMH I'll give some DAILY S1 (instead of Daily Pivot) and MONTHLY R1 support.

Anyhow ... a starter and other overlaps noted.

Jeff Bailey : 6/15/2007 7:57:50 PM

BIX's beta is about 0.5, so a 1.52% gain on the week is roughly equivalent to 3% SPX. Chips starting to show some life. Except for AMD of course.

See RUT's WEEKLY Pivot? Link

Jeff Bailey : 6/15/2007 7:51:37 PM

Last 2, and upcoming WEEKLY Pivot Matrix at this Link

Jeff Bailey : 6/15/2007 7:26:40 PM

Yes, you're on track. Get that DIA July option chain up. Buy the underlying DIA on Monday, especially on a pullback. Get in there for the record date (see 06:40:54). Look for a bounce higher into Tuesday's close on the dividend run, sell an at, or in-the-money call premium.

Jeff Bailey : 6/15/2007 7:12:24 PM

DIA WEEKLY Pivots using High/Low/Close of $136.77/$132.91/$136.19.

$131.44, $133.82, Piv= $135.29, $137.67, $139.14.

Jeff Bailey : 6/15/2007 7:07:32 PM

Hmmmm... what are next week's DIA pivots? Nice dividend play in the making?

Gosh... DIA +1.56% on the week.

Jeff Bailey : 6/15/2007 6:58:02 PM

some will win, some will lose...

Jeff Bailey : 6/15/2007 6:57:15 PM

Dow 14,000 ... "Don't Stop Believin!" Link

INDU Link

Jeff Bailey : 6/15/2007 6:50:58 PM

'Don't Stop Believin" in the Music of Journey: Downloads Of Definitive Power Ballad Jump 482% in Wake of Tony Soprano's Final Cut-to-Black

DJ- "The Sopranos" may be over, but the timeless music of Journey lives on. After Journey's classic power ballad "Don't Stop Believin'" served as the soundtrack to the climactic final set-piece of HBO's hit mafia family television series, download sales of the song on iTunes rocketed an incredible 482% for the period from Saturday, June 9 (the night before "The Sopranos" finale) through Tuesday, June 12.

As downloads of Journey's "Don't Stop Believin'" reached record numbers, demand for the band's CD catalog began accelerating. By Thursday, June 14, sales for Journey's "Greatest Hits" album had increased 104% at Best Buy; 98% at Borders; 97% at Target; and 40% at Circuit City.

During a typical week, "Don't Stop Believin'," a perennial favorite, averages roughly 1,000 downloads per day on iTunes. On Sunday, June 10 (immediately post-finale), that number jumped to 2,491. On Monday, June 11, that figure hit 6,531. By Wednesday, June 13, the song was #1 on the iTunes Music Rock Chart and #18 on the iTunes Music Top 100 chart, a phenomenally strong showing for a track that's turning 26 this year.

Following its original release in 1981, "Don't Stop Believin'," the second single from Journey's groundbreaking chart-topping "Escape" album, peaked at #8 on Billboard's Mainstream Rock chart and at #9 on the Pop Singles chart. Propelled by what the All Music Guide has called "one of the best opening keyboard riffs in rock," "Don't Stop Believin'" quickly established itself as one of Journey's signature songs while defining the possibilities of the classic rock power ballad.

Like the rest of the Journey catalog, "Don't Stop Believin'" continues to connect with the hearts and lives of pop music lovers. The song has been a perennial favorite with producers and directors of both movies and television. It was featured memorably in "Monster," starring Charlize Theron, and last made its way into the iTunes Top 10 most downloaded list in 2005 following same-week appearances on both Fox's "Family Guy" and MTV's "Laguna Beach."

"Don't Stop Believin'" hit a grand slam in 2005 when it became the unofficial theme song for the Chicago White Sox, World Series Champions. Journey frontman Steve Perry performed the song at the World Series Championship celebration in Chicago.

Apple Computer (AAPL) $120.50 +1.47% ...

Keene Little : 6/15/2007 6:32:14 PM

Monday's pivot tables: Link and Link

Jeff Bailey : 6/15/2007 6:40:54 PM

Dividend ...

DIA $0.1688/share. Payable July 16, Record June 19.
SPY $0.6556/share. Payable July 31, Record June 19.
QQQQ $0.036/share. Payable July 31, Record June 19.
MDY $0.4236/share. Payable July 31, Record June 19.
XLE $0.2032/share. Payable June 27, Record June 19.
XLF $0.2039/share. Payable June 27, Record June 19.
KBE $1.1527/share. Payable June 27, Record June 19.
KRE $0.5543/share. Payable June 27, Record June 19.
XLU $0.2756/share. Payable June 27, Record June 19

Just a sample, but if short, or thinking short, remember dividend is borrowed too for Record date.

Jeff Bailey : 6/15/2007 5:44:30 PM

Closing U.S. Market Watch - June Op-Ex - Bradley Turn Day #2 at this Link

Jeff Bailey : 6/15/2007 5:32:52 PM

Closing Internals found at this Link

Jeff Bailey : 6/15/2007 5:22:26 PM

Hamas Aide: Making "Serious" Efforts To Free UK Journalist

DJ- Hamas said Friday it has made contact with the captors of kidnapped BBC journalist Alan Johnston, and is taking "serious and practical steps" to win his release.

Hamas spokesman Abu Obeideh told reporters in a midnight news conference that Hamas, which seized control of Gaza a day before, "will not allow anyone to attack journalists or foreigners, because they are helping our people."

Asked whether the use of force is possible in winning Johnston's release, Abu Obeideh said all options are open.

The Hamas spokesman said the fate of another captive, Israeli soldier Gilad Shalit, is unchanged. He said Hamas' conditions for the release of Shalit, including freedom for hundreds of Palestinian prisoners, are "humanitarian and fair."

In seeking Johnston's release, Hamas is sending a signal to other armed groups that it intends to impose order in chaotic Gaza.

Johnston, 45, was snatched in Gaza three months ago by a group believed to have some links to Hamas, and a message purporting to be from his captors has demanded the release of Islamic prisoners, including a cleric being held in the U.K.

Hamas has been negotiating with the captors through a mediator. An official involved in the talks, speaking on condition of anonymity because of the sensitivity of the talks, said the captors pledged Friday to release Johnston within 24 hours.

In London, a BBC spokeswoman said, "We are aware of the reports, but have not received any firm confirmation of Alan's situation." She added: "We continue to work with everyone involved to try to effect Alan's safe release." She spoke on condition of anonymity under BBC guidelines.

Early Friday, Abu Obeideh demanded that those holding Johnston free him at once.

"We will not allow his continued detention," he said. "We warn against not releasing him."

Johnston was seen for the first time since his abduction in a video posted two weeks ago on a Web site used by Islamic militants. He appeared calm and said he was being well treated and was in good health.

His disappearance is the longest of any Western journalist abducted in Gaza and has sparked numerous protests and solidarity marches in London and the Palestinian territories.

Palestinian officials have said they know where to find Johnston, but have held back on raiding the hideout at the U.K.'s request, for fear of harming him.

Jeff Bailey : 6/15/2007 5:16:08 PM

Hey! IIG $24.98 +1.01% ... Admitted my mistake on 06/08 and closed the puts on the pullback at $24.19.

Jeff Bailey : 6/15/2007 5:11:17 PM

Actually, IWM official close on 06/05 was $84.43.

Hey! VIX.X was 13.63 that day. Link

Jeff Bailey : 6/15/2007 4:50:58 PM

IWM $84.33 +1.18% ... yep, pretty much "squared up." Maybe 4-cents stronger than 06/05/07 close.

Jeff Bailey : 6/15/2007 4:49:14 PM

I think RUT/IWM bulls want to see NH north of 60. No more than 29 NL. The reason I didn't set a test for NL yesterday, was reconstitution (see today's 03:04:02 and 03:06:21). For bears, you want to see fewer NH and more NL.

Keene Little : 6/15/2007 4:17:57 PM

I've been struggling with my internet connection for most of the day, including for the past couple of hours. I haven't been able to switch between charts to get them updated for you to study over the weekend. But nothing has significantly changed from the charts I posted earlier today (DOW at 10:53, SPX at 11:10, NDX at 12:06, RUT at 12:29 and YG (gold contract) at 12:59). I'll update them over the weekend and be sure to have them out before Monday morning. Have a great weekend.

Jeff Bailey : 6/15/2007 4:16:16 PM

Symbol Change alert! ... The Olin Corp. Jan $20 Calls symbol has been changed to OLN-AD from YS-OAD.

Jane Fox : 6/15/2007 3:52:30 PM

Here is McMillan weekly commentary. - The market encountered some rough water last week and early this week, as it broke down below what had been support in the 1510-1520 area (basis $SPX). At the same time, other technical indicators chimed in with sell signals. A mildly oversold condition occurred when $SPX declined towards support at 1490. Then the market rallied back towards resistance at 1510-1520 (support, once violated, generally becomes resistance). This was all "normal" action, but then the Fed released its Beige Book report on Wednesday afternoon and very heavy buying has taken place since. As a result, despite continuing sell signals from some of our technical indicators, the picture is no longer definitely bearish (nor is it bullish -- as you shall see when the individual indicators are discussed).

Therefore, we are adopting a neutral stance at the current time. $SPX now has support at 1490, as noted above. Any close below there would return the entire picture to a bearish status. However, $SPX has rallied strongly from that level and has now closed above the 1520 level, meaning that is has overcome resistance at 1510-1520. $SPX could now move somewhat higher, although thereis relatively heavy resistance all the way up to the highs at 1540. Perhaps it has just established a rather wide trading range of 1490 to perhaps 1540. The market is much more volatile recently, so it's not impossible to consider that $SPX could gyrate quickly within that range.

The equity-only put-call charts remain on sell signals. I really do not like taking a position that differs with these usually reliable intermediate-term indicators, but the bulls have been so excited about the disappearance of inflation (if you believe the Beige Book report) that they are throwing money at the market. Perhaps tomorrow's CPI Report will bring a dose of reality to the market. If that pushes $SPX back below 1520, then modest bearish positions could be considered again.

Market breadth has been extremely positive or extremely negative, switching from day to day on a moment's notice (see box, below left). Technically our breadth oscillators are modestly overbought right now, but the important "stocks only" oscillator never got oversold enough to generate a buy signal.

The volatility indices rose sharply during the decline, but have now fallen back below the 14 level. That's a buy signal, and $VIX has now returned to neutral status. Since overall (actual) volatility has increased, it is probably about right to see $VIX reside in the 13-14 area.

In summary, $SPX price action has overcome resistance and is neutral to bullish, breadth is neutral to slightly positive, and $VIX is positive. Only the put-call ratios are bearish. So, the evidence seems to indicate a neutral or trading range approach. This could last until $SPX sets up a new breakout move. So, while we are still somewhat suspicious of this latest rally, we are officially adopting a neutral outlook for now.

Jeff Bailey : 6/15/2007 3:54:30 PM

EBay Sees Life Without Google Ads Lasting About A Week

DJ- EBay Inc. (EBAY) expects to keep advertisements off Google Inc.'s (GOOG) search engine for about a week, as it tests how effectively Google ads drive visitors to its auction site and produce sales.

EBay said on Wednesday that it stopped buying ads that appear next to Google's search results in the U.S. as part of a "test." The auctioneer said it has run similar tests in the past; however, the decision has been seen as tied to a spat over a high-profile Google marketing event.

"We usually let these things run the length of a normal auction cycle," or about seven days, said Matt Ackley, eBay vice president of Internet marketing. "We will continue to evaluate the situation, and when we feel we have enough data will go back," Ackley said at eBay's annual confab for buyers and sellers, eBay Live, in Boston.

EBay similarly stopped advertising on Yahoo Inc.'s (YHOO) search engine during the fourth quarter for about five days, he said. He declined to say what eBay learned from that experiment.

EBay and Google clashed earlier this week over a party that Google had planned to host Thursday night for eBay Live attendees. The party was to be held by Google Checkout, a new online payment service that competes with eBay's PayPal service, and was cheekily dubbed the "Freedom Party" in an apparent reference to the fact that eBay currently does not allow Checkout on eBay. Google on Wednesday canceled the event following talks with eBay officials, who had called the approach unseemly behavior for a business partner.

The online auctioneer is one of Google's largest advertisers and typically runs ads tied to 15 million search keywords at any given time. Google also has a deal to provide advertising on eBay's international sites.

Some analysts and market watchers have speculated that eBay's boycott of Google ads might hurt eBay more than Google. But eBay spokesman Hani Durzy shrugged off that notion, noting that eBay gets traffic from many sources.

"We don't know where it's going to go," he said of the test. "If we recognize, on balance, it's not good for the marketplace, it's not in our interest or our sellers' interest to keep doing it."

Jane Fox : 6/15/2007 3:49:48 PM

Looks like the US$ has found some resistance but I suspect it will revisit the 50EMA, make a higher low and break that downward trendline. Link

Jeff Bailey : 6/15/2007 3:42:12 PM

HOME DEPOT GETS $10B OFFERS FOR UNIT

DJ- Home-improvement retailer doesn't comment on a report that it received two separate $10 billion offers for its HD Supply unit. Analysts say the figure would roughly match recent expectations.

HD $38.11 +0.84% ...

Jeff Bailey : 6/15/2007 3:41:15 PM

CITIGROUP MEXICO UNIT PLANS MAJOR EXPANSION

DJ- Mexico's second-largest banking group, Grupo Financiero Banamex, a unit of Citigroup, plans to hire about 1,600 people and open about 230 bank branches and consumer finance offices this year.

C $53.82 +0.27% ...

Jeff Bailey : 6/15/2007 3:40:09 PM

NYMEX UP ON REPORT IT'S EXPLORING SALE

DJ- Shares up 1.3%% on a Bloomberg News reports that the parent company of the New York Mercantile Exchange is exploring a sale to the NYSE Euronext, Deutsche Boerse or Chicago Mercantile Exchange Holdings. NMX $141.79 +1.42% ...

NYX $79.97 -1.03% ...

CME $549.89 +0.43% ...

Jeff Bailey : 6/15/2007 3:37:43 PM

PENN NATIONAL GAMING OKS $5.73B BUYOUT

DJ- Casino and horse-racing company agrees to be acquired by affiliates of Fortress Investment and Centerbridge Partners for $5.73 billion, or $67 a share, including the repayment of $2.8 billion in debt.

PENN $62.15 +21.5% ...

Jeff Bailey : 6/15/2007 3:36:02 PM

Peru Foreign Reserves Rise To Record $22.03 Billion As of June 12

DJ- Peru's net international reserves rose to a record $22.03 billion as of June 12, compared with $21.49 billion as of June 5, the Central Reserve Bank of Peru said Friday.

The central bank said that the June 12 reserves were $763 million higher than at the end of May, due mainly to increased deposits in the financial system and to central bank foreign exchange operations.

The central bank has been intervening regularly to buy dollars to ease movements in the foreign exchange market and to build foreign reserves.

Peru's foreign-exchange position was $15.32 billion as of June 12, a rise of $249 million from the end of May, the central bank added.

The foreign-exchange position doesn't include public sector deposits with the central bank or commercial bank reserves.

Jeff Bailey : 6/15/2007 3:26:51 PM

03:10 Internals found at this Link

Jeff Bailey : 6/15/2007 3:23:34 PM

Bullish swing trade long sell partial alert ... Let's go ahead and sell 1/2 (50 shares) of the Aluminum Corp. China (ACH) at the bid of $42.30 +9.16% ...

Jeff Bailey : 6/15/2007 3:12:18 PM

03:10 Market Watch found at this Link

Keene Little : 6/15/2007 3:12:01 PM

Back for a last-hour check on the market and no surprise it hasn't gone anywhere. Just another one-and-done opex Friday kind of day. The pullback already has the earmark of a 4th wave correction that I showed on the earlier charts. This should continue for a couple of days next week before rallying higher again.

So a short could work into next week but I don't consider it worth the risk. Once it looks like we might be bottoming in the pullback then I'll be looking for a place to get long for the next (and should be final) leg up for this rally. This makes the decision to be flat over the weekend an easy one.

Jeff Bailey : 6/15/2007 3:08:06 PM

See the "turn date?" ;)

Jeff Bailey : 6/15/2007 3:07:10 PM

See the "bear trap" Link

Jeff Bailey : 6/15/2007 3:06:21 PM

This Russell reconstitution is similar to what we see for the major indexes at a year's end, with tax-gain/tax-loss selling really picking up into the end of December. Have to SELL trade date +3 for the trade to settle prior to end of year close.

Jane Fox : 6/15/2007 3:05:31 PM

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

Jeff Bailey : 6/15/2007 3:04:02 PM

iShares Russell 2000 (IWM) ... 30-minute interval chart at this Link

Here's what I came to "realize" on Wednesday, as it related to the reconstitution. Remember! Russell gave the MARKET those stocks that were being deleted. In order to match the rebalance, MARKET participants (mutual funds that track Russell) knew what to sell. That created the weakness (artificial or not), that created the "bear trap" pattern alerted to yesterday at RUT 840. Look where IWM coils today. Remember MM observation on 6/05/07 and closing of COVERED and NAKED PUTS?

Jane Fox : 6/15/2007 2:38:37 PM

The short at 852.8 did not trigger so it is now off the table.

Jim Brown : 6/15/2007 2:31:43 PM

PENN - JP Morgan is saying the bid for PENN could rise to as much as $80 before the deal is done. With option prices over $60 capped by the current $67 offer this would make a fairly cheap speculative trade. I picked up some of the Oct $65 calls this morning.

Jeff Bailey : 6/15/2007 2:30:55 PM

Aluminum Corp. China (ACH) $42.01 +8.41% ... Here's 5-minute interval chart. Green retracement is 5-mrt from yesterday. Looks "in play" by specialist/computers, so will follow. Blue are daily "dynamics" and QCharts' Daily pivot levels. Link

Jeff Bailey : 6/15/2007 2:20:53 PM

BKX.X 116.65

Jeff Bailey : 6/15/2007 2:20:39 PM

BIX.X 402.19

Jeff Bailey : 6/15/2007 2:20:28 PM

OEX 704.34

Jeff Bailey : 6/15/2007 2:20:03 PM

INDU 13,637

Jeff Bailey : 6/15/2007 2:19:46 PM

RUT.X 847.17

Jeff Bailey : 6/15/2007 2:19:26 PM

SPX 1,532.86

Jeff Bailey : 6/15/2007 2:19:10 PM

30-year Yield ($TYX.X) down 4.9 bp at 5.246% ... juuuust under current Fed fund target.

Jane Fox : 6/15/2007 2:12:58 PM

I will short ER at 852.80.

Jane Fox : 6/15/2007 2:09:07 PM

I have been having Internet issues today but I seem to be back.

Jeff Bailey : 6/15/2007 1:19:29 PM

Intel (INTC) $23.98 +3.27% ... was $23.21 last night in extended. Good call Jimmy C!

Marc Eckelberry : 6/15/2007 1:13:38 PM

VXN danger zone is getting close: Link

Jeff Bailey : 6/15/2007 1:08:49 PM

01:07 Market Watch found at this Link

Marc Eckelberry : 6/15/2007 1:07:37 PM

It doesn't matter if you are right one day, even Monday. You left too much money on the table not being long all these months.

Jeff Bailey : 6/15/2007 1:05:48 PM

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

Established stop on ACH long at $41.45.

Close out portion of IOW-GE at $2.54, IWM was trading $84.40. Raised stop on remaining to $83.38.

Symbol change for the CROX puts.

Marc Eckelberry : 6/15/2007 1:05:21 PM

I want you to be mad. I want to to become traders and stop being intellectuals and always in disbelief. When we really go down, you will know it. Because sentiment will be bullish while we drop, unlike last week. THAT is when I go 100% short.

Marc Eckelberry : 6/15/2007 1:03:39 PM

It's a phenomonal bull market and only fools kept shorting every rally (or traders who went long in 2000 at the top and still can't get over it).

Marc Eckelberry : 6/15/2007 1:11:45 PM

If you bought last Thursday's pre-opex low of NQ 1900 and just held, as opposed to day trading or always looking for the next top, you would have made your month. Think about it next time you buy into the crowd mentality (bearish) when it is at odds with the trend. Shorts have not quite yet thrown in the towel, but I will be checking sentiment numbers. An ISEE reading above 200 will get me short. VXN is now right where I would start considering putting in some put trades. My target for the COMP is still 2645, so I am not in a hurry, but it's on my radar any day.

Keene Little : 6/15/2007 12:59:04 PM

Yo Jane, you ready to join me on the short side of gold? I see a setup coming. The bounce off the June 8 low looks like it could be finishing up here shortly (no pun intended). Two equal legs up in the bounce would be at 670.70 (Aug YG contract) and the 38% retracement of the June decline is at 659.95. Price is currently in between its 200-sma at 656.38 and 200-ema at 660.73. So I'm seeing Fibs and pattern lining up here for a short entry around 660. Come on in, the water's fine :-) Link

Keene Little : 6/15/2007 12:29:05 PM

The RUT's pattern is very messy and leaves open several possibilities. I've left the daily chart the same as I used in last night's Wrap. This morning's rally went higher than the 844 level I thought would make for a great short play setup but it has stalled at the trend line along the highs from May 2006 and it's still possible the bearish wave count is the correct one. If true then we'll probably see the small caps lead the show to the downside. The only question is when. Link

Keene Little : 6/15/2007 12:14:45 PM

Along the lines of the "shoeshine boy" sell signal (sell all your stocks when the shoeshine boy starts giving you stock tips), this from Joe:

I was watching a Toyota commercial last week. It was a mom and two sons sitting at a table glowing about the new car they bought and how much they saved on the purchase. The mom asks her sons what to do with all of the savings. One son says hedge funds and the second one says international funds. When you get shows and commercials telling what to do with your extra money that is a top in my book.

It's a well known fact that major media, including business publications, tend to mark tops and bottoms with their headlines (by the time they recognize it and get it into their publication the move is finishing). The advertisement that Joe is referring to is a classic example of the mania that has been created by this stock market run. It won't be long now.

Jeff Bailey : 6/15/2007 12:13:29 PM

Bullish swing trade call raise stop alert for the remaining iShares Russell 2000 IWM Jul $83 Call (IOW-GE) to $83.38 in the underlying shares of IWM.

IWM $84.36 +1.22% ...

Keene Little : 6/15/2007 12:06:16 PM

Sometimes a pattern will just pop out at me and I think I've got the NDX pattern figured out. All the sideways chop over the past month has created a megaphone pattern and in the rally from March it fits as a 4th wave correction starting at the May 4 high. It's typically a topping pattern and now I see how it fits. Here's how it looks on the daily chart: Link

After dropping out of its up-channel it has climbed back up inside. But the negative divergences suggest it's on its last leg up, which fits as the 5th wave. The projection for wave-5 = wave-1 is at 1972.67 which crosses the mid line of the channel on Thursday June 21. Now for a closer look at that 4th wave correction and the projection for the 5th wave: Link

The wave count for the move up from June 8th is shown and I'm projecting a small 4th wave correction into next week followed by another push higher in wave-(v) to complete the rally leg from June 8th which will complete the rally leg from March which will complete the rally leg from July, etc. Notice too that a 162% projection from the previous decline (June 1 to 8) is at 1976.21, just above the projection for equality for the 5th wave. That makes for a good upside target for next week after a small pullback.

Jeff Bailey : 6/15/2007 12:02:43 PM

Jane ... out of curiosity, and a trader's question I received on 6/12 regarding "why is RUT falling into reconstitution," ... what do you think took place?

Jeff Bailey : 6/15/2007 12:00:28 PM

Good idea Jane ... did same for subscribers this morning (see 10:24:28).

Jane Fox : 6/15/2007 11:57:17 AM

I have traded these with options so I am taking some of the options off the table today.

Jeff Bailey : 6/15/2007 11:56:58 AM

Will also review reconstitution events ... making the adjustment needed.

Jane Fox : 6/15/2007 11:56:30 AM

And that is more important - to me - than the entry.

Jane Fox : 6/15/2007 11:56:12 AM

My jtHMA system is great for entries but I have yet to figure out a good trailing stop system.

Jane Fox : 6/15/2007 11:55:45 AM

Well maybe I will just use yours Jeff.

Jeff Bailey : 6/15/2007 11:55:04 AM

I'm doing the same with the IWM Jane ... coming in a second.

Jane Fox : 6/15/2007 11:53:17 AM

My long positions in MCD, WFC and IWM are doing well but now I need to figure out where I put my stops.

Jeff Bailey : 6/15/2007 11:18:48 AM

11:00 Internals found at this Link

3/20/07 Bradley Turn Date Internals at this Link

Keene Little : 6/15/2007 11:10:01 AM

The bullish wave count for SPX now gets preferred status even though a new high hasn't been made yet. In fact the Fib projection at 1538.77 looks like it might hold (high so far 1538.71) but I'm thinking we'll get a 4th wave pullback into next week that then sets up the 5th wave for the rally leg from June 7th. Link

It'll be hard to justify (from an EW perspective) any additional rally beyond that but I'll worry about that if and when we get up there. Depending on how far back the 4th wave drops will determine the Fib projection for the 5th wave but as I show on the chart there's a good chance we could see SPX at least up to the 1560 area before the end of the month. But first we need the pullback and today's rally could be finishing (or finished).

Jeff Bailey : 6/15/2007 11:05:46 AM

Oh my...

Jeff Bailey : 6/15/2007 11:02:47 AM

11:00 Market Watch found at this Link

Jeff Bailey : 6/15/2007 11:00:29 AM

On ACH, take a 5-mrt from yesterday's first 5-minute bar. Check out this morning's open at Green #3, low at Green #2. Green #4 $42.73, #5 at $44.11.

Jeff Bailey : 6/15/2007 10:56:16 AM

General Motors (GM) $34.41 +2.41% ...

GM July $32.50 (GM-GZ) covered calls $2.70 x $2.75 ... do nothing. If called away, deliver at this point.

Keene Little : 6/15/2007 10:53:36 AM

NDX has pressed higher than its prior June high and the DOW is within spitting distance of its June 1st high so I've taken the bearish count off the DOW 60-min chart here (it's been essentially negated now) and showing just the bullish count. The leg up from Tuesday is the 3rd wave (not wave-C of an A-B-C corrective bounce) which means we'll now need a 4th wave pullback (probably next week and won't be fun to trade) followed by another rally leg for the 5th wave. Upside Fibs look to be around DOW 13850. Link

Jeff Bailey : 6/15/2007 10:50:20 AM

Swing trade long establish stop/target alert for Aluminum Corp. China (ACH) $42.37 +9.39%. Place stop at $41.45, target $44.00.

Jeff Bailey : 6/15/2007 10:42:36 AM

China Eastern Airlines (CEA) $48.05 Link ... still halted.

Jeff Bailey : 6/15/2007 10:41:53 AM

Could become a "gap fest" for Aluminum Corp. China (ACH) Link $42.28 +8.9%.

Keene Little : 6/15/2007 10:37:03 AM

New high here has negative divergences on the short term charts so it's coming together for a high within the Fib resistance zone.

Keene Little : 6/15/2007 10:35:54 AM

If the rally continues then you're right about that Jeff. It'll need to top out no later than today in order to meet the date otherwise just another turn date come and gone.

Jeff Bailey : 6/15/2007 10:33:25 AM

Bradley turn date sure looks bullish to me.

Keene Little : 6/15/2007 10:32:34 AM

Is this going to turn into another one-and-done kind of day again? This sure gets old fast. It being Friday of opex, and in summer time trading, it just might be setting up to be a pretty boring day in the market. How about a spike down so the bears can party a little? Continue to watch for a minor new high this morning that is met with negative divergences. Regardless of the intermediate term pattern here, the current leg up should be finishing very close to these levels. Getting the new highs as I type.

Jeff Bailey : 6/15/2007 10:25:37 AM

I'm once again having "issues" with QCharts and can't get a session to stay open. I need to get this problem resolved.

Jeff Bailey : 6/15/2007 10:24:28 AM

Bullish swing trade long sell partial alert ... Let's go ahead and sell three (3) of the four (4) iShares Russell 2000 IWM July $83 Calls (IOW-GE) at the bid of $2.54.

IWM $84.40.

Keene Little : 6/15/2007 10:06:13 AM

The pullback looks a little corrective so if you shorted this morning's high, pull your stop down to a new daily high. The short is a quick test at resistance and it's better to keep risk as small as possible right now. If we get a new high that's still within the Fib resistance zone I gave earlier, and with negative divergences on the 3, 5 or 10-min charts, then try it again.

Keene Little : 6/15/2007 9:39:47 AM

ES and YM are now into the lower end of their potential Fib resistance zones so heads up for potnetial topping.

Keene Little : 6/15/2007 9:21:19 AM

Using YM (since it's trading before 9:30) here are the Fib projections I'm talking about for the move up from June 7th. Link

The 2nd leg up is 162% of the 1st at 13798. Within that 2nd leg up (which needs to be a 5-wave move), the 5th wave equals the 1st at 13788. So watch for a failure below 13800.

Jane Fox : 6/15/2007 9:17:23 AM

Can the $ close above this downward trendline? If it can then I think there is little hope for goldbugs. Link

Keene Little : 6/15/2007 9:10:12 AM

It's not quite as tight a Fib zone for SPX/ES but I get 1534.80-1538.77 for SPX and 1551.50-1553.50 for ES (a little tighter for ES). ES and YM have already rallied close to their potential Fib resistance zones so a little higher out of the gate could still set up a gap n crap.

Jane Fox : 6/15/2007 9:07:31 AM

Link

Keene Little : 6/15/2007 9:06:27 AM

Just playing around with some short term Fib projections for the move up from June 7th for YM and I'm getting 13788-13800 as a level where the leg up from Tuesday could finish. If YM were to head much higher then obviously it will make a new high (13825 is the June 1 high) and confirm the bullish pattern. But even if we're going to rally into the end of the month we'll need to see a pullback before continuing the rally. So watch the above levels for resistance (DOW 13651-13667).

Jane Fox : 6/15/2007 9:06:22 AM

WASHINGTON (MarketWatch) -- The U.S. current-account deficit climbed by nearly $5 billion on a sequential basis in the first quarter but remained below its year-ago level, the Commerce Department reported Friday.

The current account gap rose to $192.6 billion in the first three months of the year, up from a revised $187.9 billion in the fourth quarter of 2006, the government's data showed. In the first quarter, the current account made up 5.7% of gross domestic product.

A year ago, the current-account deficit was $213.8 billion, or 6.6% of GDP.

Jane Fox : 6/15/2007 9:03:58 AM

Even though crude broke the $67.00/bl resistance yeaterday it has not had any follow through yet. This market may fall back into the trading range it has been in since March. Link

Keene Little : 6/15/2007 8:52:44 AM

Also, data from Markettells shows a high probability for a market that is higher 3 days from yesterday based on the buy signal generated from the strong buying over the past few days. So this is just another piece pointing to the possibility that the rally will take us to new all-time highs. Bottom line--no gap n crap this morning means new highs but a gap n crap will mean at least a larger pullback.

Jane Fox : 6/15/2007 8:49:04 AM

The DAX broke its OH high at the same time the American indexes broke theirs OH highs.

US$ falling as Gold breaks its OH highs. Link

Keene Little : 6/15/2007 8:48:22 AM

At least we'll know quickly this morning whether or not the bounce off last week's low is just a correction or instead something that's going to turn into a more bullish 5-wave advance to new highs. After this morning's gap up it will need to fail immediately (gap n crap) in order to keep the bearish wave pattern (3-wave bounce to correct last week's decline) alive. Any further rally today will negate that and point towards new highs.

As pointed out in the SPX charts I've been posting, a continuation higher will likely have SPX running up to some Fib targets in the 1562-1566 area. I was reading some of Jeff Cooper's work last night and he sees a strong "resonance" of time and price for a high on July 4th (either side of that) and 1576. This is based on the Square of Nine chart (Gann). So if the rally continues to hold up today then we've got some upside targets to look for.

Jane Fox : 6/15/2007 8:46:50 AM

The DAX is certainly leading the way upward, will probably be the first market (that I watch) to break to new yearly highs and is almost at its 2000 highs 8136. Link

Keene Little : 6/15/2007 8:35:59 AM

ES closes its gap from the close on June 5th at 1549. It will need to do that after the cash market opens so if futures pull back before the open then I'll be watching for a retest of the high, which will "officially" close the gap, and then a failure from there. I'm just speculating for now but that would be the first short play I'd consider.

Jane Fox : 6/15/2007 8:34:20 AM

WASHINGTON (MarketWatch) - The effect of changes in home values on consumer spending remains an open question and would be a fruitful field for academic research, said Fed chief Ben Bernanke on Friday.

While there is some research that suggests that a drop in home values may effect spending by more than conventional wisdom, there is no conclusive evidence one way or the other, Bernanke said in a speech prepared for delivery to a conference on banking and economics sponsored by the Federal Reserve Bank of Atlanta.

"I do not think we know at this point whether, in the case of households, these effects are quantitatively significant in the aggregate," Bernanke said. "Certainly, these issues seem worthy of further study," he said.

Jane Fox : 6/15/2007 8:33:40 AM

OH highs continue to get extended higher.

Keene Little : 6/15/2007 8:33:25 AM

This now sets up the potential for a gap n crap after the open.

Jane Fox : 6/15/2007 8:32:39 AM

Link

Keene Little : 6/15/2007 8:32:38 AM

I'd say they liked the data--big jump up in the equity and bond futures.

Jane Fox : 6/15/2007 8:31:47 AM

WASHINGTON (MarketWatch) - Higher energy prices drove the consumer price index up by 0.7% in May, its largest increase since Hurricane Katrina and the second largest in 16 years, the Labor Department reported Friday.

But while consumer inflation was scorching hot, the core rate of inflation - which excludes food and energy costs - rose just 0.1%.

Core inflation has thus risen at 2.2% in the past 12 months, the smallest gain in more than a year and close to the Federal Reserve's target range. Core inflation has risen at just 1.6% annualized in the past three months.

The 0.7% gain on the headline CPI was just as expected by economists. But the 0.1% increase was less than the 0.2% anticipated by economists surveyed by MarketWatch.

The hot and cold inflation keeps the Federal Reserve in a bind. It's been expecting core inflation to subside, but it's also worried that higher energy and labor costs would bleed over into other prices, fueling a new round of generalized inflation.

Jane Fox : 6/15/2007 8:28:06 AM

The overnight session was a sideways consolidation at PDH suggesting it will move higher intraday. However, we still have the 8:30 reports to move it above the ON highs or below the OH lows. Link

Keene Little : 6/15/2007 8:22:53 AM

Futures are slightly positive but basically flat. There's no real hint of which direction traders think the market will head once we get through the first economic reports at 8:30. All's quiet for now.

Market Monitor Archives