Option Investor
Printer friendly version
Jeff Bailey : 8/9/2007 12:54:35 AM

Lawmakers See Low Fannie, Freddie Risks (Top Story update) AP Story Link

Jeff Bailey : 8/9/2007 12:45:29 AM

OK ... Off to bed. Exhausted ... simply exhausted.

Jeff Bailey : 8/9/2007 12:44:19 AM

Here's StockCharts.com's $BPSPX Link

Jeff Bailey : 8/9/2007 12:42:18 AM

Bear Correction ! ... Tuesday's action did see the broader S&P 500 Bullish % (BPSPX) see a net gain of 4.63%, so roughly net gain of 23 stocks to reversing higher PnF buy signals. That was enough to have Dorsey/Wright's BPSPX reversing back up at 54% (similar to July'06) at tonight's closing measure of 55.53%.

Jeff Bailey : 8/9/2007 12:37:27 AM

Other "Wows!" ... 7/24/07 Link

Then 07/26/07 Link

Then 08/06/07 Link

Jeff Bailey : 8/9/2007 12:28:14 AM

As always ... will continue to test, observe and bring you the facts as I see them.

Jeff Bailey : 8/9/2007 12:27:22 AM

Now I observe bear season.

Jeff Bailey : 8/9/2007 12:26:48 AM

Market/Sector Bullish % Recap for 08/08/07 Link

Jeff Bailey : 8/9/2007 12:18:30 AM


Jeff Bailey : 8/9/2007 12:17:29 AM

I should have answered the RUT too. MUCH stronger than I would have answered. 131? A post Russell reconstitution high for NH's?

Shoot, we dumped those IOW-GE's faster than you can turn a bull into a steer in late June as something didn't look right.

SPX NH/NL close enough to my "bear perspecitve" to keep my claws dug into the tree trunk, but sense bear season not too far around the corner.

Jeff Bailey : 8/9/2007 12:04:59 AM

Wednesday's Trivia (Answer):

SPX 28:13

RUT 131:96

Jeff Bailey : 8/8/2007 11:35:55 PM

So you know the NEWS. You know the recent NAV of PHF ($9.50). What SHOULDN'T this closed-end junk bond fund do?

Jeff Bailey : 8/8/2007 11:27:43 PM

Good gravy! ... High Yield Corporates -$2.7 Bil since 11/9/05.

PHF and an unconventional $0.10 box to introduce some "noise." Link ... good notes!

Jeff Bailey : 8/8/2007 10:55:37 PM

You don't think ... naw ...

Jeff Bailey : 8/8/2007 10:54:41 PM

Hey ... 08/01/07 would be an "8" on the Pnf Chart.

Global Equity Benchmarks / Currencies table from Monday's Market Wrap Link

7/30/2007 pretty close to 08/01/07.

Jeff Bailey : 8/8/2007 10:50:06 PM

AMG Data Services Fund Flows & Holdings Link

$1.8 Billion into equity funds for the week ended 08/01/07. $2.366 billion into Domestic, Non-domestic saw outflow of -$602 million. Link

Jeff Bailey : 8/8/2007 10:43:55 PM

Peter and Paul! ... Not certain, but Tab's post could also shed some light on end of session action?

To sell/buy a mutual fund, orders MUST be in prior to close.

The "retail" investor is sometimes discounted as not having much influence in the markets. Yet who owns bulk of mutual funds?

Keene Little : 8/8/2007 10:41:38 PM

I don't know if there is a PPT or if the banks work together, but someone surely has a lot of money to move the indices up and down like a yoyo in minutes. The retail customers do not all trade the same direction and reverse together.

We of course don't know how active the PPT is but we know it exists-The Working Group established under President Reagan. It is highly suspected that they've become more proactive in "helping" the market. The obscene profits made by the major banks' trading teams, and their admission that they've removed risk from the equation (they might have to rethink that a little after BSC blew up a couple of their funds) suggests they're getting a helping hand from someone.

Since the heads of the major banks are members of the PPT it's not hard to speculate what's going on. It is of course all speculation. But the sudden price reversal like we saw Wednesday afternoon does beg the question about how it's happening like that, especially when there's negative breadth associated with that buying.

Keene Little : 8/8/2007 10:37:33 PM

Thursday's pivot tables: Link and Link

The end-of-day pop into the close sets us up for an immediate decline right out of the gates. That assumes this week's bounce was a correction to the decline from the July high and that it finished at today's high. The afternoon decline would be the start of the next leg down in that case. That interpretation says the end-of-day rally was a correction to the afternoon decline and now we'll get some early and strong selling tomorrow.

But if we get an early rally instead then it's highly likely we'll see a move above today's high. That would raise the possibility that we'll see an early failure of the rally so watch it carefully for a shorting opportunity if it looks like the buyers can't hold it up. Short it against the high and try it once or twice to see if we put in an early high. This will be especially true if we see the DOW fail near its Fib projection at 13708 and at SPX 1506-1507. If that works out then we can worry about whether it will be just a pullback or the start of a more serious decline.
DOW: Link
SPX: Link
NDX: Link
RUT: Link

Tab Gilles : 8/8/2007 10:15:13 PM

Markets Rally Here's a Re-Cap of the Profunds trades from 8/7/07 11:05 aM post.

Sold: USPIX @ $11.28 - cost basis of $13.58 = (-16.9%) and UCPIX @ $13.97 - cost basis of $14.75 = (-1.96%)

Purchased: Four (4) Funds equal amounts $. Profunds Ultra S&P ULPIX for $74.37; Ultra OTC UOPIX $30.51; Ultra SmallCap UAPIX $29.58 and Ultra MidCap UMPIX at $52.89. They were up in one day as follows +2.92%, +2.65%, +5.58% and +2.63% repsectively.

Since last June 27, 2006, entering $5,000 each into the UOPIX & UAPIX you would of netted +24.03% and +18.85%....rolling over the principal and gains into the USPIX & UCPIX would have resulted in a loss of -16.9% & -1.96%. So the NDX funds netted $5152 and the Small Cap $5824 or about $11,000. I recommended yesterday to equally divide that ($2750) into the four new funds which were up 3.45% collectively today.

Jeff Bailey : 8/8/2007 10:17:11 PM

Dow Diamonds (DIA) Conventional $2 box chart Link

$INDU Link

When I selected the DIA Dec. $144 Call (DAZ-LN), VOLATILITY levels (premium levels) and current MARKET ENVIRONMENT was an issue.

However, I thought traders, LIKE MYSELF, would want BULLISH exposure to the index (one of, if not strongest, thus perhaps most in favor among buyers)

But what's the RISK (look at DIA chart), and then the options!

We've "known" for a few months now that the DIA achieved, then exceeded its bullish vertical count (if ANY index can do it, it is the INDU. Only 30 stocks)

The ONLY thing right now that even HINTS, or HINTED yesterday at my bull target of $144, was the INDU bullish vertical count.

Is it, or was it worth the $2.45/contract RISK? That's the QUESTION every options trader ask's themselves. Look at a chart, assess the risk, then price out an option.

OI Technical Staff : 8/8/2007 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 : 8/8/2007 9:41:20 PM

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

DIA Options Traders! ... VIX/VXO still rather "high" relative to MONTHLY Pivot Levels. I went OUT-THE-MONEY and bought a LOT of TIME.

Should VOLATILITY fall further, I'd begin to weigh the RISK of capital exposed, to "better pricing" on options closer to the money.

I will be out of the office from 8/25/07 to 8/03/07 and my MM profiles are based around my absence.

Jeff Bailey : 8/8/2007 9:05:34 PM

;0 ... Probably a bunch of bearish hedge funds trying to break the bank on 7/26 and 7/27!!!

Jeff Bailey : 8/8/2007 9:03:36 PM

Closing Internals found at this Link

At today's close, the NYSE 5-day NH/NL ratio does get the needed measure of 14.00% to reverse back up into column of X.

In recent weeks, traders may note that the 04:00 NYSE volume is blank. Not sure what is going on at the big board, but volume measures seem to "explode" in toward the close.

Plunge Protection Team? Not sure... didn't get a volume reading on 7/26, or 7/27.

Jeff Bailey : 8/8/2007 8:52:20 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 8/8/2007 8:47:49 PM

My answer to tonight's trivia!

Bear Perspecitive SPX: I don't want to see more than 39 NH, and I'd like to see at least 12 new lows.

Bull Perspective: Nice bounce from base of channel. For another 10, or 20 points, I need to see at LEAST 40 NH and no more than, oh ... 6 new lows to think some good short squeeze action still to come.

Institutions tend to dump a position at once if they can. They build them over time.

Shorts, well, they do what they HAVE to do when something does something it shouldn't have.

There's no way the SPX will trade 1,490 again today.

Hey, that wasn't a bad "bet" back below MONTHLY Pivot. However, the SPX did trade it, and CLOSED it.

Jeff Bailey : 8/8/2007 8:39:27 PM

BIX.X ... Daily interval bar chart with MONTHLY Pivot retracement during July, August, September, October and November 2005 Link

Jeff Bailey : 8/8/2007 8:38:59 PM

Daily/Weekly/Monthly Index Pivot Matrix at this Link

On Monday at 03:17:45 I noted "trin 55", and I see it tomorrow. Watch those BIX.X at opposing DAILY R1 (to TRIN S1) and BIX's overlapping WEEKLY R2.

If you're short the banks, you DON'T want to see them trade MONTHLY R1 like they did on October, 31 2005.

Jeff Bailey : 8/8/2007 7:59:28 PM

SPX and RUT NH/NL since 6/12/07 at this Link

What do you think TODAY's readings will be based on the PRICE action you witnessed.

Jeff Bailey : 8/8/2007 7:51:57 PM

Trivia : Yesterday there were 17 new highs on the SPX, which was the highest number since 16 on 7/24/07. Yesterday there were 21 new lows on the SPX, which was well off the 70 found Monday, and fewest since 12 on 8/02/07 and 34 on 7/27.

What do YOU think today's total will be?

Jeff Bailey : 8/8/2007 7:43:31 PM

Comment: Jeff and Keene:

I don't know if there is a PPT or if the banks work together, but someone surely has a lot of money to move the indices up and down like a yoyo in minutes. The retail customers do not all trade the same direction and reverse together.


Response: I don't know about the Plunge Protection Team either Peter. And with the $SPX Link "plunging" above what should be solid resistance at 1,490, I think it prudent to at least be alert there is somebody, or something sizeable doing some buying.

Right now, I'm glad we closed out the SFB-TP at $4.00. Kind'a wish we didn't get stopped on the SFB-UR.

Very glad we traded what we observed, and not what we may have believed?

Jeff Bailey : 8/8/2007 7:36:44 PM

Question: XLF comment of $2 more and nice short entry. Do you mean if XLF goes up $2 more from current level? Don't see how XLF could go up so much more when your looking to short SPX and DOW? Thanks


Reply: It "doesn't make sense" does it? At 02:14:51 PM the XLF was trading $35.10, and YES, $2 from there would be $37.10.

However, I don't know how, or where you might have gotten the impression I am looking to short the Dow Industrials. That would go against EVERYTHING I've tried to teach traders and investors over the years of my career (short the strongest index at the time?). I am looking to short/put the SPY/SPX again, and perhaps the XLF at $37-ish is a bit high. But if the XLF gets much above the $35 strike, then $37 may be the point.

Keep an eye on the RUT.X, it should "lead" any weakness, then we'll check the XLF and SPX/SPY. Keep an eye on those bullish % too. Don't want to get caught in a "bull confirmed" reversal!

Keene Little : 8/8/2007 7:32:00 PM

I believe that's why they're called conspiracies. What's your point?

Jeff Bailey : 8/8/2007 7:15:54 PM

The great thing about conspiracies ... they're difficult to prove, or better yet, disprove. - Jeff Bailey

Jeff Bailey : 8/8/2007 7:14:12 PM

Keene ... so you have proof the major banks have colluded?

Or is that the conspiracy?

Keene Little : 8/8/2007 6:59:49 PM

Jeff, you obvioulsy missed my point--it's illegal for the major banks to collude and trade together.

Jeff Bailey : 8/8/2007 6:56:22 PM

For those new subscribers that DO NOT believe there are "conspiracy traders" out there, I encourage you to look at the S&P Banks Index (BIX.X). Daily intervals will do.

Then, look at major inflection lows the past few years.

Then review the MM Archives.

A good starting point would be 10/18/05. Link

Then, and only then will the old trader saying "forget what you BELIEVE, and trade what you OBSERVE" will take hold.

If it doesn't, leave your wallet/purse at the door.

Jeff Bailey : 8/8/2007 6:50:59 PM

Keene! It is not illegal to buy stocks into a close. It is not illegal to sell them either.

Keene Little : 8/8/2007 4:31:33 PM

I read your commentary about the Fed not intervening to save the rich hedge funds. I agree they won't lower interest rates to bail anyone out unless we see a dislocation in the markets that becomes severe. However, they are definitely in the futures market. And it looks like this afternoons run up is the third time they have entered at the end of the day since last Wednesday. These end of the day moves smells just like them and if a few hedge funds recover losses this way no one would suspect it compared to the obvious rate cut. IMHO :-)

Scott, you must be one of them there conspiracy theorists or something (wink). I hear ya and have thought the exact same thing. Whether it's a little PPT help or the major banks getting together (isn't that illegal?) and hitting the buy buttons together in order to help their own hedge funds get out of trouble, who knows. But I agree--very suspicious looking.

Keene Little : 8/8/2007 4:00:19 PM

The DOW retraces 62% of this afternoon's drop at 13615. Just as it tagged 62% of the decline from the July high, so too does it appear to be heading for that retracement again (it just did). This is common for 2nd wave retracements. But any higher than 13650 and I'd definitely want my stop at breakeven.

Keene Little : 8/8/2007 3:58:02 PM

Assuming we've had a small 1st wave down from today's high, this bounce into the close would be the 2nd wave correction. If this wave count is correct we're going to start with strong selling out of the gate tomorrow morning in the 3rd wave down. Short against today's high is the right play and then if price drops back down for a new low below this afternoon's then that's when the stop is lowered some.

Jane Fox : 8/8/2007 3:56:23 PM

Ok I give up SPX has regained 1490 and it looks like it will close about 1 point above it. Like I said before Geesh!!!

Jane Fox : 8/8/2007 3:42:37 PM

SPX and DOW both test daily lows but so far have not yet broken thru. NDX did a little but didn't have much follow through. Link

Jane Fox : 8/8/2007 3:39:16 PM

VIX is telling me there is not a chance in (*&#&$( the SPX will regain 1490.

Jane Fox : 8/8/2007 3:37:32 PM

SPX as 20 minutes to regain 1490. I see the DOW has regained 13500.

Keene Little : 8/8/2007 3:32:42 PM

I like it when a plan comes together and the trade works out. At least if you shorted near the high you should now have your stop set to breakeven. No sense risking a loss at this point. I'm now watching the downside pattern for clues as to whether it will be just a pullback or is in fact the start of the next leg down.

Jane Fox : 8/8/2007 3:29:26 PM

Remember I said the there was little chance of the SPX closing below 1490. So how wrong was I? SPX is now at 1479. Geesh!!!

Jeff Bailey : 8/8/2007 3:28:43 PM

I have to leave for the rest of the day. I'll update things later this evening.

Jane Fox : 8/8/2007 3:27:46 PM

SPX daily lows are 1478.85.

Jane Fox : 8/8/2007 3:25:06 PM

VIX is now making new daily highs so if these two hold true to their relationship the SPX should follow with new daily lows.

Jeff Bailey : 8/8/2007 3:22:40 PM

YM 13,614 ... session high has been 13,739.

Jeff Bailey : 8/8/2007 3:20:23 PM

Anyone overly suprised what has taken place in the last, oh, say 85 minutes in the YM/INDU?

Shouldn't be.

Jeff Bailey : 8/8/2007 3:18:42 PM

The test in my opinion is the May'06 to June'06 time period.

Jeff Bailey : 8/8/2007 3:17:45 PM

I agree to a point Keene. The question is, will long-term bears like yourself (more than 3-years old) turn and cover?

Jeff Bailey : 8/8/2007 3:16:35 PM

03:00 Internals found at this Link

Keene Little : 8/8/2007 3:10:18 PM

Remember that this bounce, as a 2nd wave correction, will get a lot of people feeling bullish again. That's what 2nd wave corrections do. Then when severe selling hits again you get all those who bought the dip diving for their foxholes. The 3rd wave down is the "recognition" wave. Whether that's what's next or not we'll only know in hindsight. But the setup is here for it and that's why I'm strongly recommending a short position. This is MOAP II.

Jeff Bailey : 8/8/2007 3:09:09 PM

This 313 level on the CRB just amazes me.

Keene Little : 8/8/2007 3:07:54 PM

The pullback from the high is now telling me we've probably seen the high and right in the Fib zone for the DOW. It was a nice setup and hopefully some of you were able to short it. You should now be short the market against this afternoon's highs.

Jeff Bailey : 8/8/2007 3:02:48 PM

VIX.X alert! ... 20.80 ... back for a look-see at MONTHLY Pivot.

Jeff Bailey : 8/8/2007 3:02:19 PM

03:00 Market Watch found at this Link

Jane Fox : 8/8/2007 2:53:02 PM

Inquiring minds want to know if the DOW's PDH will hold up as support. Link

Jeff Bailey : 8/8/2007 2:50:52 PM

MMMM, mmm, mmm ... OK.

YM sees some decent selling after that jump to MONTHLY 38.2%. BUYERS should be serious on pullback at MONTLY Pivot.

Jeff Bailey : 8/8/2007 2:47:51 PM

Dow Industrials (INDU) Link ... Pretty good test for today's CLOSE. 19.1% of 3/05/07 low close to recent high close.

Jeff Bailey : 8/8/2007 2:43:03 PM

Jimmy C simply "lost it" with the Fed the other day.

Fed bashers tend to find bottoms in the markets the last several years.

Jane Fox : 8/8/2007 2:42:42 PM

WASHINGTON -- The National Association of Realtors again lowered its forecast for existing U.S. home sales in 2007, but said the market wasn't likely to suffer any further sharp downturns.

Meanwhile, U.S. wholesalers saw their inventories increase during June at a rate higher than expected, while sales rose even faster, the government reported Wednesday.

In its latest forecast for the real estate market, NAR on Wednesday projected that existing home sales will fall 6.8% this year to 6.04 million, compared with its previous forecast of a 5.6% decline.

The outlook for new home sales continues to worsen. The NAR said new home sales are likely to fall 19.0% to 852,000, compared with the prior forecast of a 17.7% drop.

Lawrence Yun, NAR's senior economist, said the market was likely to be relatively stable going forward, suggesting that the worst drops in activity are behind the housing sector.

"Existing-home sales should be relatively stable over the next few months, holding in a modest range, with some pent-up demand growing from buyers who've been on the sidelines," Mr. Yun said in a statement.

Jeff Bailey : 8/8/2007 2:33:38 PM

SPY not far behind at 151.7 million. #2 most active.

Jeff Bailey : 8/8/2007 2:32:50 PM

IWM roll'n up some volume today and atop the most active list of ALL securities.

Jane Fox : 8/8/2007 2:31:31 PM

Interesting article by Mark Hulbert. Link

Jeff Bailey : 8/8/2007 2:29:29 PM

Recent benchmark lows of 69/70 for the S&P 500 Components. At tonight's close, bulls want to see something north of 30 new highs.

Keene Little : 8/8/2007 2:25:55 PM

And the DOW is back up to the top of its parallel up-channel for this week's rally: Link

Keene Little : 8/8/2007 2:24:09 PM

Sticking with my first wave count for the DOW (projecting 2nd leg up to 13707), it's now approaching the Fib resistance window of 13686 (62% retracement) to 13707 and SPX is within 4 points of its Fib target. I've got to step away for about 30 minutes so watch those levels for the short play to set up (or not--hopefully you'll get some bearish divergences suggesting the rally is running out of steam).

Jeff Bailey : 8/8/2007 2:23:17 PM

Or the bull for that matter.

Jeff Bailey : 8/8/2007 2:23:13 PM

1,220 to 1,280 was a 4.9% rebound.


Now is when the bear starts to believe in the PnF methodology.

Jeff Bailey : 8/8/2007 2:23:05 PM

Let's see ... 1,430 to 1,500. That's a 4.89% rebound.

What was that rebound from the June'06 lows?

Jeff Bailey : 8/8/2007 2:14:51 PM

$2 more on the XLF and decent put/short entry level.

Jeff Bailey : 8/8/2007 2:14:17 PM

XLF Alert! $35.10

Jeff Bailey : 8/8/2007 2:14:01 PM

YM alert! 13,700

Jeff Bailey : 8/8/2007 2:13:46 PM

The thing I like about the pivot levels, is once they are there, they're there. Can't smudge them around to make it look like YOU want it to look.

Keene Little : 8/8/2007 2:03:17 PM

And if I change the wave count just slightly, calling the end of wave-A at Monday afternoon's high (followed by an irregular flat correction for wave-B), then two equal legs up is at 13657. If the DOW stalls there (maybe a little throw-over right here) then think about testing the short side here rather than waiting for higher. Link

Jane Fox : 8/8/2007 2:02:18 PM

SPX is nicely above its 1490 resistance and there is a very good chance it will close above that support as well. The bulls are back. Link

Jane Fox : 8/8/2007 2:00:48 PM

It certainly looks like the DOW's 13500 resistance has turned to support. Link

Keene Little : 8/8/2007 2:00:09 PM

The only thing worrying me a little bit about the upside right here is that it looks like we could be finishing an ascending wedge for wave-C to finish the upward correction. Looking at the DOW's 10-min chart here suggests a break below 13557, the low just past 12:00, would be the end of the bounce and a reason to be short. Link

Keene Little : 8/8/2007 1:54:51 PM

The market is slowly working its way higher so it's still looking good for a possible high around the Fib projections for the DOW at 13707 and SPX 1505. As long as the pullback low near 12:00 is not violated we should continue to see this push a little higher.

Jeff Bailey : 8/8/2007 1:50:55 PM

Close 13,691 ?????

Jeff Bailey : 8/8/2007 1:50:18 PM

YM Pivot Matrix at this Link ... SIMILAR to 08/02/07 DAILY at this point.

Jeff Bailey : 8/8/2007 1:36:13 PM

YM Long setup cancel order alert ... from 01:21:15 PM

Jeff Bailey : 8/8/2007 1:35:35 PM

YM Alert! .... 13,680

Jeff Bailey : 8/8/2007 1:21:36 PM

YM 13,656 ...

Jeff Bailey : 8/8/2007 1:21:15 PM

YM Long setup alert ... Look to go long the YM on a trade at 13,625. Stop 13,609. Target 13,680.

Jeff Bailey : 8/8/2007 1:18:23 PM

YM 13,654

Jeff Bailey : 8/8/2007 1:17:41 PM

YM Long setup cancel order alert (from 12:54:09).

Jeff Bailey : 8/8/2007 1:13:51 PM

01:00 Internals found at this Link

Jeff Bailey : 8/8/2007 1:02:53 PM

01:00 Market Watch found at this Link

Jeff Bailey : 8/8/2007 12:54:09 PM

YM long setup alert ... Look to go long the YM on a trade at 13,615. Stop 13,590. Target 13,680.

Jeff Bailey : 8/8/2007 12:52:34 PM

YM 13,649 ...

Jeff Bailey : 8/8/2007 12:52:21 PM

YM Long(s) Stopped Alert!

Jeff Bailey : 8/8/2007 12:50:57 PM

YM Long(s) Raise Stop Alert! to 13,649.

YM 13,660

Jeff Bailey : 8/8/2007 12:40:18 PM

YM 13,654

Jeff Bailey : 8/8/2007 12:40:04 PM

YM long trigger alert ...

Jeff Bailey : 8/8/2007 12:39:33 PM

YM long round it up alert ... buy another YM if it trades 13,651. If filled, raise stop on BOTH to 13,630.

Jeff Bailey : 8/8/2007 12:31:14 PM

YM long adjust/lower target alert ... to 13,680 (from 13,700)

YM 13,638.

Keene Little : 8/8/2007 12:29:48 PM

A 62% retracement for the DOW would be at 13686 if I use Monday's truncated low (didn't make a new low like SPX). This would keep the DOW on the same wave count as I last posted for SPX (9:44) where the corrective bounce might form a sharp A-B-C rally off Monday's low and be the end of it. This 30-min chart shows how it could look: Link

Two equal legs up would be just under 13708 which puts it just above the 62% retracement. Ideally we'll get a rally from here to there by the end of the day. If this matches up with SPX hitting 1505 then I recommend testing the short side there. If this will be the end of the correction to the decline then the next leg down will be a doozy. I don't know if we'll get that but I like the risk:reward setup.

Keene Little : 8/8/2007 12:08:55 PM

The consolidation in both equities and bonds looks like this morning's trends should continue this afternoon--up for equities and down for bonds.

Jeff Bailey : 8/8/2007 11:39:15 AM

A lot of cash coming out of Treasuries today ... Defensive cash willing to take some risk? Me thinks so. That is .... if the buying in Treasuries that last couple of weeks was defensive.

Jeff Bailey : 8/8/2007 11:36:19 AM

Fannie Mae Sells $4.5 Billion in Bills ... Reuters Story Link

Jane Fox : 8/8/2007 11:32:52 AM

Crude supply down 4.1 mln brls in latest week: Energy Dept.

Distillate supply up 1 mln brls in latest week: Energy Dept.

Gasoline supply down 1.7 mln brls in latest week: Energy D.

Jeff Bailey : 8/8/2007 11:26:38 AM

YM long alert here at 13,630. Stop 13,590. Target 13,700.

Jeff Bailey : 8/8/2007 11:24:40 AM

11:10 Internals found at this Link

Note: It would take a closing session measure of 14.00% for the NYSE 5-day NH/NL ratio to reverse back higher into column of X.

Jeff Bailey : 8/8/2007 11:13:09 AM

11:10 Market Watch found at this Link

Jeff Bailey : 8/8/2007 11:05:44 AM

DIA's CALL OI is heaviest at $135

Jeff Bailey : 8/8/2007 11:04:47 AM

VIX also plunging ... KNOW where the OI is!

Jeff Bailey : 8/8/2007 11:04:13 AM

Massive short covering in equities today. MASSIVE ...

Jeff Bailey : 8/8/2007 11:01:26 AM

EIA Weekly Gross Inputs, Crude Oil Inputs, Refinery Op. Capacity, Percent Utilization, # Days Crude Oil Supply Table at this Link

Jane Fox : 8/8/2007 11:00:11 AM

Dateline MarketWatch - Treasurys came under pressure after U.K.-based Telegraph reported that China may liquidate its vast Treasury holdings if Washington continues to impose trade sanctions to force a revaluation of the Chinese yuan.

"China has rattled some sabers, suggesting it might up the U.S.'s protectionist ante by selling U.S. Treasurys," said T.J. Marta, strategist at RBC Capital Markets. But Marta said the potential damage to the global economy - and China's economy in particular - makes the move "unlikely."

"The U.S. and China are engaging in mutually assured economic destruction," he said

Jeff Bailey : 8/8/2007 10:50:07 AM

EIA Weekly Crude Oil, Total Gasoline, Reformulated Gasoline, Total Distillate and ULS Diesel Stockpiles Table at this Link

Jane Fox : 8/8/2007 10:48:51 AM

According to these previous day range charts the DOW is the weakest market and the Russell 2000 is the strongest. SPX and NDX are about neck in neck. Link

Keene Little : 8/8/2007 10:43:25 AM

The RUT is very strong today, currently up about 2.6% as comparied to the DOW and SPX up less than 1%. It too could be in a very sharp A-B-C rally similar to what I showed for SPX. The 2nd leg up (wave-C) would achieve 162% of the 1st leg up at 805.51, right in between a 50% and 62% retracement. A retest of its broken uptrend line from August 2006 would take it up closer to 820. Link

So there's clearly some upside potential. But based on the 5-wave move down from the July high, which signals a trend change, the current bounce should be just a correction and not the start of a new leg up. Therefore this leg up should be finishing the correction and is therefore the time to be looking for an opportunity to short it. Ideally it will consolidate some and then rally a littel further before the setup and the 805 area will be of interest in that case.

Jane Fox : 8/8/2007 10:23:03 AM

I see nothing to tell me the bears even showed up today. Link

Jane Fox : 8/8/2007 10:19:40 AM

AD line is +1599 - very bullish.

Jane Fox : 8/8/2007 10:14:16 AM

WASHINGTON (MarketWatch) -- U.S. wholesalers' inventories rose by 0.5% for the second month in a row in June, once again pushed higher by rising stockpiles of petroleum.

At the same time, sales at the wholesale level outpaced the growth inventories, rising by 0.6% with modest gains across industries. Wholesale sales of petroleum declined in June, however, down by 1%.

The figures are seasonally adjusted but are not adjusted for price changes.

Overall, wholesale inventories are up 6.3% in the past year, while sales are up 8.1%.

Sales of petroleum at the wholesale level have climbed 9.4% in the past year, while inventories haven't come close to keeping pace, rising only 2.4% in the past 12 months.

The wholesale inventories report rarely affects financial markets since it's mostly of interest to economists as they tweak their estimates for gross domestic product. It comes a day after the Federal Open Market

Jeff Bailey : 8/8/2007 10:06:23 AM

Small Caps are rock'n

Jeff Bailey : 8/8/2007 10:05:54 AM

10:00 Market Watch found at this Link

Jane Fox : 8/8/2007 10:05:16 AM

Crude's daily jtHMA has now turned red and I am watching for the 120 and 60 minute charts to turn green before I take a long position. Link

Since I will be using USO I decided I should look at the USO jtHMA charts as well. The 60 minute has turned green so now we need the 120 to as well. Link

Jane Fox : 8/8/2007 10:00:22 AM

Wilshire 5000 also has not yet broken its resistance at 15000. Bulls will be watching these two levels of resistance today and want these markets to close above them if not today sometime this week. If not then all bullish bets will be off the table. Link

Jane Fox : 8/8/2007 9:58:09 AM

Interestingly though the SPX has not broken its resistance at 1490. Link

Jane Fox : 8/8/2007 9:56:13 AM

Needless to say the RUT has broken its resistance this morning. Link

Jane Fox : 8/8/2007 9:55:30 AM

The DOW finds support at 13500. Bulls do not want the DOW to close back into the 13100-13500 range. Link

Jane Fox : 8/8/2007 9:52:36 AM

$RUT.x blasts above its PDH but the other markets are not able to break their highs. Link

Keene Little : 8/8/2007 9:44:41 AM

For SPX I had shown the potential for a pullback to be followed by a rally into next week to create an A-B-C bounce off Monday's low (the dark red wave count on this chart: Link ). If we get a rally today then it's possible to count yesterday afternoon's post-FOMC spike down as the pullback. As quick as it was it can fit because of the 5-wave move up into the FOMC announcement. The quicker A-B-C bounce for the 2nd wave could look more like this: Link

Interestingly the upside projection for two equal legs up is at 1505 which again is on top of the 62% retracement of the decline. If this happens today/tomorrow I think it will be worth testing the short side there.

Jane Fox : 8/8/2007 9:40:18 AM

ER explodes above its PDH but its larger cap brethren have yet to break their respective PDHS.

Jane Fox : 8/8/2007 9:30:11 AM

BOSTON (MarketWatch) -- Toll Brothers Inc. early Wednesday said its fiscal third-quarter home-building revenue fell 21% from a year earlier to $1.21 billion as the industry continues to struggle against a housing market further weakened by turmoil in mortgage markets.

The Horsham, Pa.-based builder (TOL) of luxury homes said net signed contracts slipped 31% to $727.1 million. The company released preliminary quarterly results ahead of its full earnings release scheduled for Aug. 22.

"Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed," said Chief Executive Robert Toll in a statement.

Jane Fox : 8/8/2007 9:25:41 AM

US $ falling and Gold is climbing. It is amazing how these two stay in sync even overnight.

It is looking like Crude may be making a bottom here. Link

Jane Fox : 8/8/2007 9:15:18 AM

DAteline CNN - Giants slugger Barry Bonds hits 756th career home run, surpassing Hank Aaron's all-time record.

Jane Fox : 8/8/2007 9:13:40 AM

Only ER (Russell 2000 futures) was able to break its PDH. This volatile little begger has been given us some really really good day trading of late but is driving the spread traders to drink.

All markets are making higher highs and lows and I think PDHs will break intraday. Link

Jane Fox : 8/8/2007 9:10:35 AM

LONDON (MarketWatch) -- U.S. stock futures stepped higher on Wednesday as technology bellwether Cisco Systems lifted its revenue outlook and Australia's central bank joined the U.S. Federal Reserve in reassuring investors about growth prospects for the global economy amid credit-market jitters.

Keene Little : 8/8/2007 8:34:08 AM

We've got equities up premarket but I'm wondering if it's not going to hold up after the open. Yields have spiked up this morning as bonds sell off and higher yields at this point are not going to help the whole credit problem the market is facing. So post FOMC could see a selloff in the bond market and that may depress the prices of stocks. Here's the TNX 60-min chart showing how it has popped out of its descending wedge pattern from the past month: Link

Market Monitor Archives