Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
OI Technical Staff : 6/22/2007 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The Market Monitor has been archived.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 : 6/22/2007 9:41:55 PM

Closing Internals found at this Link

Note: Both the NYSE and NASDAQ's 5-day NH/NL measures reversed back lower. "Green" as the 5-day's reside above their respective 10-day's.

Jeff Bailey : 6/22/2007 9:26:25 PM

Closing U.S. Market Watch found at this Link

Keene Little : 6/22/2007 8:19:31 PM

Monday's pivot tables: Link and Link

Jeff Bailey : 6/22/2007 6:50:57 PM

Last 2 and next week's WEEKLY Pivot Matrix found at this Link

BIX.X -2.94% and with a beta of roughly 0.5, that's about a -6.0% equivalent for the SPX (beta of 1.0).

Jeff Bailey : 6/22/2007 5:59:23 PM

S&P 500 Index (SPX.X) ... fell 19.6 points, or -1.28% today. Fell 30 points, or -1.98% this WEEK.

So far this MONTH has fallen 28 points, or -1.83%.

So far this QUARTER has risen 82 points, or +5.75%.

Jeff Bailey : 6/22/2007 5:57:26 PM

10-year Yield ($TNX.X) ... fell 2.5 bp today, fell 3.3 bp on the WEEK.

So far this MONTH has risen 24.8 bp.

So far this QUARTER has risen 58.8 bp.

Jeff Bailey : 6/22/2007 5:12:54 PM

Email ... What's going on the the biotech's? They've been seeing a lot of selling lately. Is this related to the RUT reconstitution?

Reply: ... I can't say for certain, but might be a little. I will note that on Wednesday, President Bush vetoed the Stem Cell Bill.

Jeff Bailey : 6/22/2007 5:01:51 PM

CNOOC Ltd. (CEO) $113.69 -2.78% ... first time in weeks the stock has backfilled a gap higher (from gap-a-palooza 5/31/07). Now slap a 02/27/07 low close ($78.18) to yesterday's 06/21/07 ($116.95) retracement on the stock. Bullish vertical count was $99.00.

Keene Little : 6/22/2007 4:33:47 PM

The RUT has the same pattern as the DOW and SPX over the past week so I'm showing the same potential moves for next week. Link

Jeff Bailey : 6/22/2007 4:33:15 PM

SPY $150.55 -0.94% ... does see its first WEEKLY close below its 5/11/07 "doji" close.

SPY did go ex-dividend on 06/19 (see 06/15/07) and I'd have to say dividend bulls took the money and ran the morning of 06/20.

Maybe today's news has forward impact on company's dividend policy.

Keene Little : 6/22/2007 4:19:28 PM

NDX still looks more bullish to me because of its corrective pullback. It might drop a little lower to its uptrend line from March but I see a bullish resolution out of this (supported by what I see in GOOG's chart). It might be forming a larger ascending wedge (which will mean a choppy trading pattern) but until support breaks at 1909 I would not trust the short side on the techs. Link

Jeff Bailey : 6/22/2007 4:19:37 PM

Excellent comments/analysis from Mr. Santelli regarding "the hunger for yield" among fixed income traders/investors, and the constant reassessment of the risk/rewards that present themselves over the past couple of weeks regarding the jump in YIELD on Treasuries.

Nothing new to long-time followers of my commentary regarding how bond traders look at, and measure risk/reward.

Mr. Santelli noted the "risky" yet very "high yielding" mortgage backed securities, which looked attractive when Treasury yields were lower earlier this spring, suddenly don't look as attractive considering the "safest" Treasury Yield(s) rise.

Yes! The iShares Lehman 20-year (TLT) $83.76 +0.65% looked attractive on 6/6/07 at $85.51, but the gap UP in yield (lower on price) on 6/07 had bond bulls pulling the plug, as there was some type of "adjustment" set to take place, where the "risk" relative to the "reward" (a bond's coupon) wasn't there.

Keene Little : 6/22/2007 4:11:08 PM

The DOW and SPX remain attached at the hip--same patterns. What I said for SPX applies for the DOW. Link

Jeff Bailey : 6/22/2007 4:04:50 PM

Listening to Mr. Santelli here ...

Jeff Bailey : 6/22/2007 4:02:30 PM

Buy Program Premium ... SPY $150.52

Keene Little : 6/22/2007 3:59:08 PM

If we have an impulsive decline from last Friday's high then the 5th wave looks near complete (which is why I suggest flat for the weekend--could see this come roaring back up on Monday). After a 5-wave move down we can expect a bounce and that's what I'm showing in the updated SPX 60-min chart here (note the bullish divergence at this afternoon's new low): Link

I haven't written off the possibility that we'll see a smaller bounce that finds resistance at the downtrend line from Tuesday and then a new low from there (green depiction). That would actually give the move down over the past week a more corrective look and suggest a larger rally will follow. So ironically a larger bounce into the end of the week will be more bearish while a small bounce and another new low could be more bullish into July.

Keene Little : 6/22/2007 3:58:52 PM

Looks like we're not going to get the new low into the close.

Jeff Bailey : 6/22/2007 3:55:10 PM

eBay To Resume Ads On Google (update)

Jeff Bailey : 6/22/2007 3:54:04 PM

I wish I'd a bought it!

Jeff Bailey : 6/22/2007 3:52:20 PM

Google (GOOG) $523.28 +1.76% ... Don't wory Jane! I'm sure Keene's wishing he hadn't shorted the GOOG at $480.

Keene Little : 6/22/2007 3:48:17 PM

Short term pattern looks like it needs to push a little lower which is why I think it will close at or near the day's low.

Keene Little : 6/22/2007 3:46:45 PM

Be careful of round number support at SPX 1500.

Keene Little : 6/22/2007 3:44:00 PM

If you shorted the breakdown from this afternoon's bounce just lower your stop to breakeven now and let it ride into the close (where I'd cover and go home flat).

Jeff Bailey : 6/22/2007 3:41:13 PM

10-year Yield ($TNX.X) ... WEEKLY Pivot Levels for next week are ... 50.15, 50.77, Piv= 51.42, 52.04, 52.69.

Keene Little : 6/22/2007 3:32:02 PM

I haven't updated this in a while--approximate futures premium over cash (September futures):

YM -- +110
ES -- +13.00
NQ -- +23.00
ER -- +6.40

Keene Little : 6/22/2007 3:33:58 PM

NDX is showing a very short term potentially bearish ascending wedge for its bounce off this afternoon's low. Short any breakdown from this (5-min chart): Link

Jeff Bailey : 6/22/2007 3:25:20 PM

Traders with my DIA NAKED puts, may want to quickly review HIG within last week's WEEKLY Pivot. Closed out the NAKED HIG puts on 6/7. HIG trading at 06/08/07 relative low today.

From 06/08 relative low, HIG reversed course to reclaim its 6/11-6/15 WEEKLY Pivot, then WEEKLY R1 before downturn.

HIG is not a INDU/DIA component, but a financial, and only stock we've traded (other then GM that went bonkers) that might be a match.

Keene Little : 6/22/2007 3:20:48 PM

Jane, you can still short gold, it's not too late. I'll keep the lights on.

Jane Fox : 6/22/2007 3:15:31 PM

Keene, I stubbornly held to my position that I would not short Gold and I see that was a not a position I should have held on to. I should have shorted Gold when you did for sure.

Jeff Bailey : 6/22/2007 3:13:16 PM

December Fed Funds Futures alert! 94.81 ... just more than 10% chance that FOMC may NOT tighten between now and December expiration.

100 - 94.81 = 5.19%

Keene Little : 6/22/2007 3:10:35 PM

Jane, as to your 2:55 question, yes, I watch the US dollar very carefully, thanks. The dollar/gold relationship doesn't always hold day to day (or even week to week) so I'm trading just the gold chart and holding short as long as the down-channel is in force. The bearish wave count keeps me short since it means we're about to get a crushing sell off. Otherwise it's a corrective pullback since its April high and I'll just switch to the bright (long) side of the metal if it breaks its downtrend.

Jeff Bailey : 6/22/2007 3:04:02 PM

Sell Program Premium ... SPY $150.41

Jeff Bailey : 6/22/2007 3:02:52 PM

03:00 Market Watch found at this Link

Jeff Bailey : 6/22/2007 3:00:36 PM

I like to set alert's on the QChart's S&P 500 Premium ($PREM.X) when I sense/observe great pressure building in the pivots.

Jeff Bailey : 6/22/2007 2:58:57 PM

Sell Program Premium ... SPY $150.50

Keene Little : 6/22/2007 2:57:52 PM

A small two-equal-leg bounce off this afternoon's low for SPX would be at 1511.44 (ES 1525.25). The broken uptrend line is near 1510. This is an area I'd look to short since your risk is small--I'd use about 1512 (ES 1526) for my stop. As Scott emailed to me, they'll probably park this at the broken uptrend line and leave us guessing over the week end as to whether the move down was a bear trap or the touch of the broken trend line is a kiss goodbye.

Jane Fox : 6/22/2007 2:56:50 PM

Of course this is not the what you would call a bullish chart. Gold has a lot of resistance to overcome. Link

Jane Fox : 6/22/2007 2:55:33 PM

Keene, have seen what the $ is doing today? I would be careful if short Gold. Link

Jeff Bailey : 6/22/2007 2:47:08 PM

IWM $82.86 -0.75% ... "in the zone" ... MONTHLY Pivot and 08/11/07 close.

Jeff Bailey : 6/22/2007 2:38:20 PM

With U.S. Market Watch all red for the equity-based indexes, wasn't hard to see.

Jeff Bailey : 6/22/2007 2:37:22 PM

Oil Service HOLDRs (OIH) 179.15 -0.10% ... after sticking its head into the green.

Keene Little : 6/22/2007 2:33:59 PM

Gold is still a short and I'd use a violation of its last high at 665.70 as a stop (which would also be a break of its downtrend line). Link

Jane, when are you going to stop being a gold bug and come join me on the dark (short) side of the shiny metal. Really, the water's fine over here.

Jeff Bailey : 6/22/2007 2:28:21 PM

Just more than 90-minutes left in this year's Russell reconstitution.

Keene Little : 6/22/2007 2:27:32 PM

On the last update to CME on June 14th ( Link ) I was hoping to see a minor pullback and then a continuation higher. The pullback has lasted longer and dropped a little lower than I thought it would but it's a very choppy pullback and leads me to believe it's still going to resolve higher and possibly form an ascending wedge with an upside target under 585: Link

CME has been holding above its broken downtrend line from January and with the choppy pullback that's why I'm thinking that support will hold. It takes a drop back below 508 to negate the bullish wave pattern and I would look for much lower lows to follow in that case.

Jeff Bailey : 6/22/2007 2:26:17 PM

TRIN 1.34 +168% ... session high has been WEEKLY R1. (can tie with VIX.X), thus the sense/observation of great pressure.

Jane Fox : 6/22/2007 2:25:36 PM

Jeff, my internals agree. Link

Jeff Bailey : 6/22/2007 2:25:02 PM

NASDAQ a/d 820/2132

Jeff Bailey : 6/22/2007 2:24:49 PM

NYSE a/d 708/2553

Jeff Bailey : 6/22/2007 2:24:29 PM

Downside should VIX.X lurch above WEEKLY R1, and Stocks lose session lows.

Internals really suggest a trend day lower.

Jane Fox : 6/22/2007 2:22:22 PM

Jeff pressure to the upside or downside?

Jane Fox : 6/22/2007 2:24:38 PM

When you start developing a system you start with some basic ideas then as you use it you do some fine tuning. I also have to have money on the line before I can really test a system and was why I traded IWM, WFC and MACD using the jtHMA. What I have found so far is that I really like the jtHMA for entries but it does not give me a good way to exit, which is every bit as important as your entries. (as we have seen today). I have also found the monthly chart is too long and does not fit my swing trading. I wanted to take crude long (USO) but didn't because the monthly jtHMA was still red. So I am putting the monthly jtHMA aside for now and will use the weekly to determine the direction of my trades.

Jeff Bailey : 6/22/2007 2:21:00 PM

I feel/observe great pressure building.

Jeff Bailey : 6/22/2007 2:18:49 PM

BIX.X 392.29 -1.09% ...

Jeff Bailey : 6/22/2007 2:18:29 PM

TNX.X down 1.8 bp at 5.145% ...

Jeff Bailey : 6/22/2007 2:18:03 PM

RUT.X 832.53 -0.86% ...

Jeff Bailey : 6/22/2007 2:17:42 PM

DIA $133.85 -1.12% ...

Jeff Bailey : 6/22/2007 2:17:27 PM

SPY $150.31 -1.09% ...

Jeff Bailey : 6/22/2007 2:17:12 PM

VIX.X alert! 16.23 WEEKLY R1.

Jane Fox : 6/22/2007 2:15:40 PM

Not yet. Link

Jane Fox : 6/22/2007 2:14:40 PM

Time for SPX puts?

Jane Fox : 6/22/2007 2:14:29 PM

MACD is telling me the lower trendline at 1490 will break before the upper.

Jane Fox : 6/22/2007 2:13:20 PM

Here is the SPX range McMillan is talking about. Link

Jane Fox : 6/22/2007 2:10:34 PM

McMillian's weekly commentary. - The stock market remains very volatile, within what is now developing as a trading range. Clearly the top of the range is 1535-1540, which $SPX has probed at least 7 times in the past month -- without being able to punch on through. There is some debate as to where the bottom of the range is, but it's somewhere between 1490 (the early June lows) and 1505 (today's low). In either case, both bulls and bears have thought they had upper hand, only to see the market reverse and head the other way. This back-and-forth action increases actual (statistical) volatility, without really giving any particular market direction. Since the trading range is so wide, there is enough room to trade within it. Eventually, a breakout will occur -- either above 1540 or below 1490 -- and then a more trend ing environment may unfold.

The equity-only put-call ratios are designed to be intermediate-term indicators. They have been low on their charts for some time, indicating that they are in overbought territory. There have been a couple of sell signals (see figures 2 and 3), but the averages continue to "wiggle" at low levels, as the market flips back and forth. But unless these ratios break down to new lows (which is a possibility, of course) we will continue to view them as bearish. In the bigger picture, they are telling us that a huge number of call options (versus put options) has been traded (purchased?) and this is a generally dangerous situation for the intermediate-term health of the broad stock market.

Market breadth (advances minus declines) reached overbought levels again this week, as $SPX approached the 1540 area. Then, when the market fell sharply on Wednesday, new sell signals were generated by the breadth oscillators. Despite the market advance today (Thursday), breadth was only modestly positive. Hence these indicators -- which we prefer to view only as confirming indicators -- are bearish.

Finally, there are the volatility indices ($VIX and $VXO). Early in the week, $VIX fell back below 14, completing a buy signal (see Figure 4). That buy signal may have trouble sustaining itself, though, as $VIX jumped higher yesterday and remains above 14 today. A new uptrend in $VIX would be regarded as bearish. The volatility futures are all trading at a premium to $VIX, and that is a mildly bearish sign as long as $VIX is rising. Also, since the actual volatility of $SPX has increased -- due to volatile movements in both directions -- $VIX should naturally trade at somewhat higher levels, just to keep pace.

In summary, the indicators are a bit mixed, as you might expect since the market is in a volatile trading range. Breadth and $VIX flip back and forth quickly as the market makes each volatile move. Even the more intermediate-term equity-only ratios have had trouble sustaining a signal. This is rather unnerving, but is probably to be expected during a trading range.

Jane Fox : 6/22/2007 2:09:21 PM

Too funny - we just hit target.

Keene Little : 6/22/2007 2:08:44 PM

Time to review GOOG since my last update on June 4th ( Link ) as this one can often act as a good barometer for how bullish market participants feel. It ended up rallying a little higher than I thought it would and so I've created a new up-channel for it: Link

GOOG has been chopping sideways since its high on June 7th and I think it will pull back again (might get one more minor new high first) as part of a larger 4th wave correction, shown in green. Then it'll be off to the races again for a potential high near 550 by early to mid August. That's the bullish projection and from here I think there's a good chance for that to happen.

If GOOG manages to rally higher then I think the broader market will also rally to new highs and could follow a pattern similar to what I showed yesterday for SPX (daily chart: Link ). But a drop below the April 20 high of 492.50 would negate the bullish wave pattern so that will be an important level to watch should it drop down that low.

Jeff Bailey : 6/22/2007 2:07:27 PM

BARCLAYS SEES US SUBPRIME FUND EXPOSURE IMMATERIAL

DJ- Barclays says any losses incurred due to its exposure to funds that invested in subprime mortgage assets in the U.S. are not expected to be material. However, it did admit its exposure to the Bear Stearns-run fund on the brink of collapse.

Jeff Bailey : 6/22/2007 2:06:27 PM

CFTC PLANS MARKET MANIPULATION RULE

DJ- Commodity Futures Trading Commission proposes a new rule that will give the watchdog agency greater oversight over market manipulation. Proposal comes as momentum gains in Congress for more stringent oversight of energy markets.

Jane Fox : 6/22/2007 2:06:03 PM

Target is 839.40 - 1.3 pts = 838.10

Jane Fox : 6/22/2007 2:05:33 PM

Of course we are not to target so I should not counting those proverbial chickens before they hatch.

Jeff Bailey : 6/22/2007 2:05:12 PM

SOROS REPORTS SALE OF $20.5M IN JETBLUE SHARES

DJ- Billionaire financier reports selling 36,616 shares Tuesday for $10.95 each and 1.83 million shares Wednesday at prices ranging from $10.85 to $11.07 each. Sales leave Soros with direct ownership of 72,354 shares and indirect holdings of 17.5 million shares.

JBLU $11.30 +0.26% ...

Jane Fox : 6/22/2007 2:04:30 PM

WEll that was obviously a well placed stop.

Jeff Bailey : 6/22/2007 2:03:57 PM

EBAY TO RE-ENTER CHINA AUCTION BUSINESS

DJ- EBay is on track to rejoin the online auction business in China this summer, with tight restrictions on sellers to clamp down on sales of counterfeit goods, The New York Times reports.

EBAY $31.90 +2.47% ...

Jeff Bailey : 6/22/2007 1:58:20 PM

Bear Offers $3.2B Fund Bailout

AP Story Link

Jeff Bailey : 6/22/2007 1:57:31 PM

News pouring out on Bear Stearns (BSC) $143.90 -1.28% ...

Jane Fox : 6/22/2007 1:55:15 PM

ER just made a high of 841.00 so still short.

Jane Fox : 6/22/2007 1:51:30 PM

I completely agree with Keene that 820 is the key to the $RUT. The low on June 12th was 819.75 so a close below this level is very bearish. Link

Keene Little : 6/22/2007 1:48:53 PM

But then there's the RUT. After a bearish kiss goodbye at the restest yesterday of its broken uptrend line, it certainly looks bearish from here. But the pattern is similar to the DOW and SPX so it could get a minor bounce here followed by a new low that stays above 820 and then start a whole new rally leg back up. As long as price stays above 820 that remains a distinct possibility. Break 820 and it's game over, bears. Link

Jane Fox : 6/22/2007 1:47:58 PM

Dang thing turned around on me but still short.

Jane Fox : 6/22/2007 1:45:51 PM

Need to move into profit a bit more before I move the stop.

Keene Little : 6/22/2007 1:45:09 PM

NDX is dancing around potential support by its uptrend line from June 8th, currently at 1923.60, and if that breaks then next support is its uptrend line from March, near 1907. The choppiness of the decline from last Friday still gives me the sense that price will resolve to the upside out of this mess. The bearish projection has the lowest odds in my opinion. Link

Jane Fox : 6/22/2007 1:44:49 PM

Stop on the short from 839.40 is 841.2 until I can lower it.

Jane Fox : 6/22/2007 1:41:18 PM

Short now at 839.40 alert

Keene Little : 6/22/2007 1:34:20 PM

The DOW doesn't retest its broken uptrend line until a little higher, closer to 13450.

Keene Little : 6/22/2007 1:33:03 PM

Market made a quick jab down, leaving a bullish divergence and then spiked back up. But SPX just smacked its head on its broken uptrend line at 1509. Will it make it back above, leaving this as a head fake (bear trap). Could happen but in the meantime, this is where you want to short it--at the retest.

Jane Fox : 6/22/2007 1:32:12 PM

I will short ER at 838.80. - alert

Jeff Bailey : 6/22/2007 1:20:28 PM

01:00 Internals found at this Link

Jeff Bailey : 6/22/2007 1:16:08 PM

A trade like today (bond yield and stocks) a very big "test" for the lower yield, stock higher, or the lower yield defensive and stock weakness.

Democrat's decision may keep Fed on sidelines, will learn more. I haven't fully read the bill, see if they benchmark to a future date, or backdate it.

Remember some recent news out of China and "taxing" equity.

Jeff Bailey : 6/22/2007 1:02:08 PM

01:00 Market Watch found at this Link

Keene Little : 6/22/2007 12:52:52 PM

SPX has the same pattern and possibilities from here as the DOW. For now I'd short the broken uptrend line if retested. Link

Jane Fox : 6/22/2007 12:53:00 PM

And now our orginal stop at 835.80 has been tagged. So moving it up was a good thing.

Jane Fox : 6/22/2007 12:51:08 PM

Stopped at 836.40

Jane Fox : 6/22/2007 12:50:55 PM

Jeff you are right all the volume from BX going into that advancing issue. Thank you so much.

Jeff Bailey : 6/22/2007 12:49:50 PM

Jane! TRIN "skewed" just before 10:00 for Blackstone (BX) ... Low most likely 1.03

Jane Fox : 6/22/2007 12:48:57 PM

Target is at 839.00

Jane Fox : 6/22/2007 12:48:26 PM

Raise the stop to 836.4

Jane Fox : 6/22/2007 12:47:25 PM

Reached a low of 835.90 so still long.

Keene Little : 6/22/2007 12:44:43 PM

With the new low, it's now possible to count a 5-wave move down from last Friday, June 15. If true that will set up a bounce into next week before letting go to the downside (bearish wave count on this updated DOW 60-min chart): Link

If we get only a minor bounce and head lower again, as per the bullish (green) wave count, then it will be possible to call the whole pullback from last Friday as just one big correction to the rally. In that case we'd see another rally leg get started. For now we'll watch to see if the broken uptrend line from March acts as resistance on a retest, which is where I'd short it.

Jane Fox : 6/22/2007 12:44:13 PM

Triggered long at 837.70

Jane Fox : 6/22/2007 12:43:00 PM

Stop will be 835.80

Jane Fox : 6/22/2007 12:42:23 PM

Oversold so let's try a long at 837.70 - alert.

Jane Fox : 6/22/2007 12:39:19 PM

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

Jeff Bailey : 6/22/2007 12:33:48 PM

If any type of bounce is to be found, this would be it at WEEKLY S1.

Jeff Bailey : 6/22/2007 12:32:35 PM

DIA $133.80 -1.17% ...

Keene Little : 6/22/2007 12:32:22 PM

So much for the bulls holding this up. New lows below yesterday's for the DOW and SPX. Now it's for the bears to lose--they need to keep prices below support-turned-resistance at the broken uptrend lines (confirmed with the new lows).

Jeff Bailey : 6/22/2007 12:32:11 PM

TRIN alert! 1.45 +190% ... after trade at WEEKLY R1.

Keene Little : 6/22/2007 12:24:04 PM

NDX's uptrend line from June 8th is currently near 1922.70 so it also is near potential support.

Jane Fox : 6/22/2007 12:23:56 PM

OK now I am kicking myself got out way too early. Ya gotta love that VIX and AD volume though.

Keene Little : 6/22/2007 12:22:49 PM

With this move lower now, the DOW is breaking it uptrend line. But watch 13424 which is a Fib projection for this leg down. It might end up being a spike down like yesterday morning's. SPX is now testing its uptrend line.

Jane Fox : 6/22/2007 12:21:52 PM

Well I took my chunk out of that drop and on the sidelines now. I C I am missing some of the move down but that is OK.

Jeff Bailey : 6/22/2007 12:20:52 PM

No Effictive Date Set For Democratic Carried Interest Bill

DJ- U.S. House Democrats, including the chairman of the chamber's tax-writing committee, introduced legislation Friday that would require investment fund managers to pay income tax on carried interest.

Currently, managers of private investment partnerships are able to receive compensation in the form of carried interest, which is taxed at the much lower 15% capital gains rate rather than the regular income tax rate.

Jane Fox : 6/22/2007 12:20:03 PM

Nice move down. VIX and AD volume were talking today.

Jane Fox : 6/22/2007 12:19:13 PM

I just got a note that IB's TRIN has been above 1 all day. I wonder if anyone else is getting a TRIN different from me.

Jane Fox : 6/22/2007 12:18:37 PM

The short I am in is not from a nice setup (those setups have not worked today) but purely based on the VIX and AD volume. I have seen the VIX and AD volume this bearish too many times before to ignore it, however the TRIN has been at least neutral during those times and not as bullish as it is today.

Have you noticed no follow through on the selling?

Jane Fox : 6/22/2007 12:11:31 PM

VIX making new daily highs and AD volume to new daily is just too tempting to me and I went short. Nervous though because of the TRIN.

Jane Fox : 6/22/2007 12:10:22 PM

Normally I don't pay too much attention to the TRIN but when it is so much out or sync to the other internals I take notice and will be much much more careful when going short. Link

Keene Little : 6/22/2007 12:02:56 PM

Into the lunch hour and we're just chopping sideways since the initial decline. That could be viewed as bearish so I agree with Jane here--I don't see a good setup at the moment for either side. There will be better times to trade. My preference is the long side until I see support break. In fact the closer we get to support (SPX 1509 and DOW 13448) the lower your risk to try the long side.

Jeff Bailey : 6/22/2007 11:48:27 AM

30-year ($TYX.X) unchanged at 5.284% ...

Jeff Bailey : 6/22/2007 11:46:55 AM

Slight reversal in 10-year Yield ($TNX.X), up 1.3 bp at 5.176% looks technical as morning gap up got backfilled. Perhaps some "defense" on geopolitical news.

Jeff Bailey : 6/22/2007 11:40:54 AM

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

Jane Fox : 6/22/2007 11:29:37 AM

So with the AD line/volume and VIX bearish I will not go long but the darn TRIN is telling me to very careful if short. The result is a very choppy and hard to trade market. Just like yesterday.

Jane Fox : 6/22/2007 11:27:54 AM

VIX up and AD volume down is bearish - but look at the TRIN a very bullish 0.66. Link

Jane Fox : 6/22/2007 11:26:37 AM

These are extremely bearish. Link

Jeff Bailey : 6/22/2007 11:20:21 AM

11:00 Internals found at this Link

Note: It would take a closing measure of 76.00% for the NYSE 5-day NH/NL ratio to reverse back lower.

It would take a closing measure of 68.00% for the NASDAQ 5-day NH/NL ratio to reverse back lower. It would also take a closing measure of 70.00% for the NASDAQ 10-day NH/NL mesure to reverse back higher.

Keene Little : 6/22/2007 11:17:25 AM

Good observation on the TNX Jeff. In fact last week's weekly candle was a shooting star which is bearish. But as shown on this weekly chart I'm thinking this week's doji could be just part of the indecision before getting a final leg higher which I think will mark the top in yields (bottom in bond prices) to be followed by a long drop back down, well into 2008. It should be a good time to invest in bonds for the coming rally in their prices. Link

Marc Eckelberry : 6/22/2007 11:11:13 AM

TNX is all the market cares about today, so watch it. Above 52 (5.2%) and bears will get new lows.

Marc Eckelberry : 6/22/2007 11:07:36 AM

The level bulls need to hold is SPX 1512.50 and NQ 1951.75. This could be a nasty close, but keep in mind all the end of quarter adjustments. There is no news so hedge funds can feed your broker with chop. This is a day to scalp only. Buy support, sell reistance until one breaks.

Jeff Bailey : 6/22/2007 11:02:49 AM

11:00 Market Watch found at this Link

Jeff Bailey : 6/22/2007 11:00:24 AM

Check out 60-minute interval chart of 10-year yield. I'm not a "candle-sticker" but some type of "doji" there at WEEKLY Pivot.

Potential reverse h/s pattern on DIA's 60-minute interval chart.

Keene Little : 6/22/2007 10:56:33 AM

Do you give much credence to this bear flag the markets have broken below? I'm looking at the OEX and the SPX.

Scott, I'm assuming you're talking about yesterday's price action. There are a couple of ways of looking at yesterday's 3-wave bounce (which formed the bear flag). One is very bearish and says the break down from it is going to lead to a move below yesterday's low which would be a break of support by the uptrend line from March and the 50-dma. I'd be bearish if that happened.

But it's just a hunch at this point that the move up yesterday was wave-A, today's pullback is wave-B and now we're going to get a strong move higher out of this as wave-C (two equal legs up for SPX would now be just above 1529). This is based on the stength I see in NDX and a belief that we're going to see the market held up into end-of-month/quarter, so through next week. Link

But if support breaks then the bearish wave count on the SPX 60-min chart shows the potential to break support and then retest it next week, thus being held up into the end of the month. That would set up a strong sell off after the holiday.

Jeff Bailey : 6/22/2007 10:45:58 AM

VXO.X 15.09 +5.08% ...

Jeff Bailey : 6/22/2007 10:44:50 AM

Swing trade sell NAKED Put alert with the Dow Diamonds (DIA) $134.70 -0.49% ... sell one (1) of the DIA July $133 Puts (DAW-SC) between the bid/offer of $1.20/$1.30, so $1.25.

Stop would be $133.40 in the underlying.

Jeff Bailey : 6/22/2007 10:35:25 AM

Crocs (CROX) $46.67 +1.67% Link ... Either side of WEEKLY R1 ($46.99) again today. Buyers stood their ground on Tuesday at WEEKLY S1 ($43.95) and yesterday at WEEKLY Pivot ($45.37).

Keene Little : 6/22/2007 10:35:19 AM

Still chopping a little lower which will lower the upside projection (for the bullish case). But the fact that it's chopping lower, with some bullish divergences starting to show up on the 3-min chart, is what gives me the impression we're going to rally out of here.

Jeff Bailey : 6/22/2007 10:32:06 AM

Germany's DAX ($DAX) Link ... is off 16 points, or -0.20% at 7,948. Session low/high has been 7,925/8,013. Didn't get the bounce I thought it might after yesterday's U.S. trade.

Jane Fox : 6/22/2007 10:28:38 AM

AD line is very bearish -1345 but the TRIN is a bullish 0.71. More volume going into the advancing issues so bears beware.

Jeff Bailey : 6/22/2007 10:27:05 AM

Blackstone (BX) $36.71 ... day trader's upper/lower 5-MRT at this Link

Keene Little : 6/22/2007 10:19:41 AM

I see the stock market has followed through a little more to the downside from where futures were when I left this morning. The overall pattern since yesterday's low still gives me the feeling we're going to consolidate today rather than make new lows below yesterday's. I'm watching SPX to see if it drops down to and finds support at its uptrend line from March, currently near 1508.60 so still 5 points lower. Its 50-dma, where it found support on its spike down yesterday (and June 8th and 12th) is a tad lower at 1505.63.

Watch for a choppy day today. The one bullish possibility I see is for another push to new highs for the bounce off yesterday's low. Two equal legs up in that case, using this morning's recent low for the projection, would be near 1531 and a 78.6% retracement of this week's decline.

Jeff Bailey : 6/22/2007 10:14:29 AM

Asian Markets: at this Link

Jeff Bailey : 6/22/2007 10:01:54 AM

10:00 Market Watch found at this Link

Jeff Bailey : 6/22/2007 9:58:02 AM

Blackstone (BX) $36.90 ...

Jeff Bailey : 6/22/2007 9:56:17 AM

Disclosure: I currently hold bullish position in PBT.

Jeff Bailey : 6/22/2007 9:55:51 AM

Bullish Swing trade long alert ... for 1/3 position (250 shares for $10k=Full) in the Permian Basin Royalty Trust (PBT) at the offer of $13.50 +0.67%. Stop goes $12.60, target $16.00.

Jeff Bailey : 6/22/2007 9:52:48 AM

NDX.X 1,937.03 -0.22% ....

Jeff Bailey : 6/22/2007 9:52:10 AM

RUT.X 837.98 -0.21% ...

Jeff Bailey : 6/22/2007 9:51:34 AM

BIX.X 394.45 -0.54% ...

Jeff Bailey : 6/22/2007 9:51:09 AM

SPX 1515.91 -0.41% ...

Jeff Bailey : 6/22/2007 9:50:42 AM

10-year YIELD ($TNX.X) +4.3 bp at 5.206% ... sticks its head above WEEKLY Pivot first time this week.

Jeff Bailey : 6/22/2007 9:45:50 AM

Disclosure: I currently hold bullish position in EBAY.

Jeff Bailey : 6/22/2007 9:44:32 AM

Bullish swing trade long alert for 1/3 position (100 shares for $10k=full) in shares of eBay (EBAY) at the offer of $32.15.

Stop goes $29.80, target $36.00.

Jeff Bailey : 6/22/2007 9:41:45 AM

eBay (EBAY) $32.02 +2.89% Link ... Started at "outperform" at Bernstein.

Jeff Bailey : 6/22/2007 9:39:45 AM

The Blackstone Group (BX) indicated $38.50

Jane Fox : 6/22/2007 9:11:08 AM

The US$'s support from the 20 and 50EMAs seems to be slipping away. This is important because the higher low made on June 20th needed to hold to confirm June 13th's swing high. The next support level is the black trendline, December 2006 lows. Link

Jane Fox : 6/22/2007 9:11:20 AM

The MACD is giving Gold a bullish divergence but this market has some pretty good resistance to overcome. Resistance from the 20, 50, 100EMAs, downward trendline then last but not least is the upward trendline. Link

Jane Fox : 6/22/2007 9:03:32 AM

The NAZ daily chart clearly shows a continuation of the MACD bearish divergence. Link

Jane Fox : 6/22/2007 9:01:12 AM

Ditto here. Link

Jane Fox : 6/22/2007 9:00:52 AM

The MACD is telling me the DOW's double top will hold and it needs either a retracement or a sideways move for the MACD to "catch up." Link

Jane Fox : 6/22/2007 8:57:51 AM

The head and shoulders forming on the Russell 2000 cash index is supported by a H&S in the MACD. The H&S is confirmed once this market closes below the upward blue trendline. Link

Jane Fox : 6/22/2007 8:53:47 AM

The US$ is down and Gold is up which is good for us goldbugs but unfortunately an important part of the Gold puzzle is Crude and it needs to rally to support Gold. And no one likes the idea of crude in rally mode.

Interestingly I see the DAX did not make a new daily high off the 10:00 lows and did not close at daily highs. Therefore its overnight dip has almost tested its PDL. It is still not really clear to me if the DAX leads the American market or the other way around (probably a little of both) but what I have found is that the DAX needs to be in sync with the American markets and when it is not one or the other will correct to get back in sync. Link

Jane Fox : 6/22/2007 8:44:02 AM

NEW YORK (MarketWatch) -- The Blackstone Group's initial public offering raised $4.13 billion for its stock market debut Friday by pricing at the top of its estimated range as the sixth richest IPO in U.S. history.

The private equity firm launched in 1985 with $400,000 on its books ballooned to a market value of more than $33 billion after pricing at the high side of its $29-$31 range.

"I'm very surprised," Blackstone co-founder and senior chairman Peter G. Peterson said in a brief interview on CNBC-TV. "I couldn't have imagined this 31 years ago."

Blackstone (BX) priced 133.33 million shares at $31 a share, the high side of its $29-$31 a share. Blackstone's offering represents a 12% stake in the firm.

A high level of demand had been expected for Blackstone's IPO as Wall Street clamored for a stake in the firm behind a string of high profile deals involving Cadbury Schweppes, Celanese, Freescale Semiconductor, Houghton Mifflin, Michaels Stores, Universal Orlando and many others.

Jane Fox : 6/22/2007 8:39:44 AM

Yesterday morning the markets were in a slump and the selling was coming fast and furious then around 10:00EDT the buyers arrived and it was up up and away for the rest of the day. All markets broke to new daily highs and although we all thought the bears were reasserting themselves after the 2:00 high the bulls regained their footing and were able to close the market almost at daily highs.

Although the overnight session is making lower lows it is nothing more than a retracement from yesterday's rally. I measured the overnight move and no market has dipped below a 50% retracement. Link

Keene Little : 6/22/2007 6:55:43 AM

I will be away from the market until about 10:30 AM. It's looking like the morning will start out in the hole with futures currently down pretty hard. China got hit on speculation their government is going to raise interest rates to cool off the economy and stock market so that could be spooking the other markets right now.

Yesterday's bounce looks corrective so there's certainly the possibility that we're going to continue lower again (watch those uptrend lines for SPX and DOW). The RUT looks particularly vulnerable since it came up for a retest of its broken uputrend line. But I've been thinking we're going to consolidate for another day or so and that would mean we'll just chop around between yesterday's highs and lows.

Market Monitor Archives