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Jeff Bailey : 8/20/2007 11:57:56 PM

Baidu.com (BIDU) $187.55 +6.25% Link ... strong again in today's ADR trade.

Jeff Bailey : 8/20/2007 11:55:50 PM

Hang Seng ($HSI) Link is up 666 points, or +3.09% at 22,262.

Jeff Bailey : 8/20/2007 11:53:20 PM

Shanghai ($SSEC) Link ... up 13 points, or +0.27% at 4,918.

Jeff Bailey : 8/20/2007 11:51:32 PM

Nikkie-225 ($NIKK) Link ... up 235 points, or +1.50% at 15,967.

Session High / Low has been 15,994 / 15,755.

Xs get the square to 15,950 at this point.

Jeff Bailey : 8/20/2007 11:47:06 PM

Global Equity Benchmarks and Currencies at 08/20/07 Close Link

Notable STRENGTH in the yen against both the US$ and euro. Notable WEAKNESS in Japan's Nikkei-225.

With so much attention on "rates," I can only think that Japan's 0.50% rate relative to other global interest rate benchmarks, has market participants viewing Japan's rates LOW relative to HIGHER rates elsewhere.

With BOJ at 0.5%, one would have to think other rates MOVING LOWER, or BOJ needing to RAISE rates.

BOJ may not want to do that (raise rates) for fear its currency STRENGTHENS further, thus appreciating the yen.

That would probably NOT be viewed as a positive (strong yen vs. euro and US$) as Japan VERY dependent on exports.

China's Shanghai and Hong Kong's Hang Seng seemingly untouched by sellers!

Jeff Bailey : 8/20/2007 11:03:57 PM

Bernanke, Paulson, Sen. Dodd to Meet on Markets ... Reuters Story (06:22 PM EDT) Link

Keene Little : 8/20/2007 10:10:39 PM

Tuesday's pivot tables: Link and Link

There's not much of a change to the charts I showed last night and today. I'm looking for a correction of the rally off last Thursday's low, to be followed by a pullback and then very likely another rally leg after the pullback finishes (pink wave count). SPX, DOW and NDX continue to look very similar in their wave count possibilities as shown by this SPX 60-min chart: Link

It's possible we're getting a small consolidation that will be followed by another relatively small rally leg that then sets up the pullback correction. That's shown on the RUT's 60-min chart (pink wave count): Link

With a final push higher in the RUT, if that's what we get, it could mark the end of the A-B-C correction from the August 6th low and even though the other indices don't look the same it's possible they're in the same kind of correction since August 6th, albeit distorted to the downside compared to the RUT. Therefore I'm considering the possibility that a new high for the RUT (805-810 target for now) will lead to a significant decline after that, and that the others will do the same. So continue to stay cautious about the long side.

OI Technical Staff : 8/20/2007 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.

Tab Gilles : 8/20/2007 8:50:05 PM

$IRX/$TNX Link

Jeff Bailey : 8/20/2007 6:15:41 PM

Closing Internals found at this Link

Have added 13-week Treasury Yield ($IRX.X)

Jeff Bailey : 8/20/2007 5:06:40 PM

Short-Term Treasurys Gain As Investors Hold Onto Cash

DJ- Other strategists pegged the rush into cash Monday to big money managers getting ready for the inevitable pull-out of funds by investors.

"Institutional investors may be building liquidity for possible redemptions," said Peter Crane, president of Crane Data LLC in Westboro, Mass., which tracks money markets, referring to the wave of buying in short-term paper.

Meanwhile Monday, the Fed injected a bit more liquidity, continuing its actions from the last two weeks. The Fed added $3.5 billion in the form of an overnight repo.

Despite the Fed's actions though, longer-dated securities repurchase markets - where investors go to refund their trading positions - remained illiquid. Even in the term repo market, very little was being bid, according to Mary Beth Fisher, rates strategist at UBS. The term repo market is where investors make loans of less than 270 days that are collateralized, or secured, by Treasury notes and bonds.

Fisher also said that other non-Treasury corners of the repo market were still sticky. Those markets include securities ranging from mortgage bonds to corporate debt.

Judging by the market's reaction, the Fed's action Friday "does not appear to be working," Fisher added.

The Federal Reserve Bank of New York said Monday that it will redeem $5 billion in T-bill holdings Thursday, meaning that money that would have been reinvested into new T-bill issuance will instead flow back to Fed accounts. The New York Fed said in a statement that the action is designed to give the Federal Reserve Open Market Trading Desk "greater flexibility" in the day-to-day management of reserve levels to offset factors that could add reserves to the system, "such as additional discount window borrowings."

Despite Monday's hefty move in T-bills, other markets were looking somewhat calmer, with stocks higher - after Asian stocks surged overnight - and mortgage bonds backed by the Congressionally chartered housing giants Fannie Mae and Freddie Mac only slightly wider versus Treasurys.

"MBS are holding their own given the rally in Treasurys," said Walt Schmidt, manager of structured product strategies for FTN Financial.

Though spreads have widened, mortgage bonds were performing much better Monday than during Thursday's tumultuous trading, when mortgage bond prices fell even as Treasurys rallied, said Schmidt. Risk premiums for 30-year fixed-rate agency mortgage-backed securities were wider versus Treasurys by one to two basis points Monday.

Swap spreads, a gauge of risk appetite, were mixed late Monday, with the two-year spread sharply wider by six basis points from Friday's late levels, at 75 basis points, though the 10-year swap spread was only half a basis point tighter, at 75.50 basis points. The two-year swap rate was at 4.846% and the 10-year swap rate was at 5.399%.

Analysts at Ried Thunberg in New York said that investors "remain unsure of what to think."

And while there are numerous gauges for assessing how credit markets will far, Ried Thunberg analysts said global equities may well be the "most transparent indication of investor comfort." Economic data should also "draw revived interest," they said, after the Fed's statement last week acknowledged stronger downside risks to economic growth.

Jeff Bailey : 8/20/2007 4:37:11 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 8/20/2007 3:58:50 PM

Email Question: For those of us not sitting in front of a TV. Could you give this guests comments?

Reply: ... I will cover in tonight's Market Wrap!

Jane Fox : 8/20/2007 3:38:49 PM

Internals are improving but the TRIN is still bearish so don't expect a lot follow through. This has not been an easy day to trade but we back to more "normal" markets, if there is such a thing. Link

Jeff Bailey : 8/20/2007 3:27:12 PM

Impressive turn of events sice the bond market's close. INDU 13,167 +0.67% ...

Jeff Bailey : 8/20/2007 3:22:08 PM

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

Jeff Bailey : 8/20/2007 3:12:56 PM

03:00 Internals found at this Link

Linda Piazza : 8/20/2007 3:03:06 PM

The USD/JPY time spent below 114.45 didn't damage sentiment too much after all. The currency pair was able to maintain support above 113.75-114.00. (See my 12:00:14 post.) We're still not seeing special strength on this currency pair until and unless numbers break above the 115.47 overnight high, but the pair so far has managed to avoid dropping below that support zone. I show a 114.89 value as I type.

Jeff Bailey : 8/20/2007 3:02:52 PM

03:00 Market Watch found at this Link

Jeff Bailey : 8/20/2007 2:59:06 PM

Dow Indu, NASDAQ-100 inch green.

Jeff Bailey : 8/20/2007 2:55:45 PM

MMS: 41,967 B/D Oil, 100 MMCF/D Nat. Gas Down In US Gulf

DJ- Shut-in oil and gas production in the U.S. Gulf of Mexico has doubled since Sunday, according to the Minerals Management Service. But the producer responsible for most of the decline has said it will begin restoring output now that Hurricane Dean is no longer a threat to U.S. waters.

The 41,967 barrels of oil a day and 100 million cubic feet a day of natural gas pale in comparison to shut-ins totaling 2.65 million barrels a day and 2.634 billion cubic feet a day in Mexican waters. Dean is expected to pass through the Bay of Campeche, home to most of Mexico's oil production, as a Category 1 or 2 storm starting Tuesday night.

Dean is on course to come ashore again in Mexico after crossing the bay. Last week, forecasters said Dean had the potential to turn north, where the storm could have gathered strength in open water before plowing through the energy infrastructure of the western Gulf of Mexico.

Royal Dutch Shell PLC (RDSB.LN) took the lead in shutting in production on the U.S. side, cutting off 39,000 barrels of oil and 97.5 million cubic feet of gas a day, or nearly all of the outages reported by MMS. Shell said Monday morning it "will begin to bring production that was shut in ... on line."

With Dean missing the gas-rich U.S. Gulf, natural gas futures have plummeted on the New York Mercantile Exchange. September natural gas is off 13.8% at $6.04 a million British thermal units. Crude futures on Nymex trade at $71.13, off 85 cents. Front-month futures were down about $1.70 for much of the day, but rebounded shortly after Mexico's state-owned oil company confirmed that it would shut down most of its production.

The National Hurricane Center expects Dean, currently a Category 4 storm, to make landfall on Mexico's Yucatan Peninsula early Tuesday morning, government forecasters said in their afternoon report. The storm has winds of 150 miles an hour, but is likely to reach Category 5 strength, above 155 miles an hour, before it reaches land, the NHC said.

Jeff Bailey : 8/20/2007 2:46:12 PM

Treasury market closes in 15-minutes.

Jeff Bailey : 8/20/2007 2:45:36 PM

Five-Year Treasury Yield ($FVX.X) ... Daily Interval chart at this Link

As the very short-term 13-week Treasury Yield ($IRX.X) plunges to new lows (strong buying in very short-term notes), Fed focus will be the 5-year Note's Yield.

Friday's Fed action hasn't been able to stabilize very short-term credit, but some stability as we "step out" the duration. $fvx.x YIELD closes below 42.61, 41.86 would be further "defensive" signal from this market.

Jeff Bailey : 8/20/2007 2:30:49 PM

Friday's 50 bp cut for Discount Rate a near-term "fix" before House/Senate allows FRE and FNM to once again be able to purchase more expensive mortgages.

Jeff Bailey : 8/20/2007 2:27:44 PM

Yes! CNBC's guest comments. That's what I think the Fed's plan is.

Keene Little : 8/20/2007 2:25:57 PM

If we get a b-wave pullback as I depicted on the SPX 120-min earlier, and updated here: Link , this could take a couple of days and be very choppy (as b-waves typically are) as it works its way down hopefully to the 1406 target. So take care and don't expect much follow through (or at least expect more whipsaws).

I've got to leave for a few hours and will update charts for tomorrow when I return.

Jeff Bailey : 8/20/2007 2:12:24 PM

Swing trade long exit alert! ... Exit the Ultra Dow30 Proshares (AMEX:DDM) at the bid of $87.31.

Jane Fox : 8/20/2007 2:03:04 PM

US$ has found support right where you would expect it to. This chart is starting to look quite bullish and if that retest of support holds then the $ will probably break the swing high made August 16th. Link

Jane Fox : 8/20/2007 1:59:13 PM

Natural Gas looks to be heading back down to retest its yearly lows. Link

Jeff Bailey : 8/20/2007 1:57:36 PM

European Markets: at this Link

Jeff Bailey : 8/20/2007 1:50:51 PM

Today's 13-week auction results and strong demand probably has the "pPhone" (this is the mysterious Plunge Protection Team's) hotline ringing.

Linda Piazza : 8/20/2007 1:45:02 PM

On CNBC, commentators have just finished a discussion about funds that might be experiencing some problems. During the course of that discussion, the unexpected weakness in metals has been discussed. I just wanted to note that this weakness is not unexpected for anyone who has been reading Keene's warnings for some time now that metals would decline as other asset classes did. A few weeks ago, a fund manager assured me that his fund was hedged against any decline in equities: he had metal stocks. I didn't find that particularly comforting, given Keene's warnings, and didn't move any money into that fund. Now we see that Keene is right, as this "unexpected" fallout in commodities accompanied the decline in equities.

Jeff Bailey : 8/20/2007 1:38:22 PM

US Treasury Awards $17B 6-Mo Bills

DJ- The U.S. Treasury Department awarded $17.00 billion in six-month bills at Monday's auction at a high rate of 3.950%.

The Treasury received bids totaling $28.64 billion and accepted $17.00 billion, including $2.23 billion of noncompetitive tenders. The dollar price was 98.003056 and the investment rate, or bond-equivalent return, was 4.098%.

The Treasury also sold $225.00 million of six-month bills to foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 1.68, Treasury said. Tenders submitted at the high yield were allotted 50.70%.

The median rate was 3.680%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 2.990%.

The Federal Reserve purchased $12.37 billion in bills for its own account in Monday's three- and six-month bill auctions. When the auction was announced, the Fed held $17.37 billion of maturing bills.

The bills awarded to the Fed are in addition to the public offering amount.

Accepted indirect bids for the six-month bill were 13.9% of the total competitive amount, down from 27.8% in last week's six-month bill auction.

The high rate was down from 4.710% at the previous six-month bill auction.

The high rate was the lowest since the rate of 3.870% at the six-month bill auction on Oct. 3, 2005.

The issue is dated Aug. 23 and matures on Feb. 21, 2008.

The CUSIP number on the six-month bill is 912795C82.

Keene Little : 8/20/2007 1:35:17 PM

Would you please tell us what it means that the $IRX has plunged? Is that bearish? Thanks!

The 13-week Treasury Bill has made a huge move in the past week and as this monthly chart of IRX compared to the SPX shows, the last time that happened in 2001 the stock market followed. So is the past week's drop in IRX bearish? I think the charts speak for themselves. Link

Jeff Bailey : 8/20/2007 1:32:50 PM

13-week Yield ($IRX.X) down "just" 54.5 bp after auction at 3.075%.

Jeff Bailey : 8/20/2007 1:28:31 PM

US Treasury Awards $21B 3-Mo Bills

DJ- The U.S. Treasury Department awarded $21.00 billion in three-month bills at Monday's auction at a high rate of 2.850%.

The Treasury received bids totaling $30.81 billion and accepted $21.00 billion, including $2.10 billion of noncompetitive tenders. The dollar price was 99.271667 and the investment rate, or bond-equivalent return, was 2.919%.

The Treasury also sold $100.00 million of bills to foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 1.47, Treasury said.

Tenders submitted at the high yield were allotted 98.92%.

The median rate was 2.500%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 1.500%.

The Federal Reserve purchased $12.37 billion in bills for its own account in Monday's three- and six-month bill auctions. When the auction was announced, the Fed held $17.37 billion of maturing bills.

The bills awarded to the Fed are in addition to the public offering amount.

Accepted indirect bids for the three-month bill were 11.5% of the total competitive amount, down from 20.2% in last week's three-month bill auction.

The high rate was down from 4.630% at the previous three-month bill auction.

The high rate was the lowest since the rate of 2.800% at the three-month bill auction on May 16, 2005.

The issue is dated Aug. 23 and matures on Nov. 23.

The CUSIP number on the three-month bill is 912795B34.

Jeff Bailey : 8/20/2007 1:18:16 PM

01:00 Internals found at this Link

Jeff Bailey : 8/20/2007 1:04:13 PM

01:00 Market Watch found at this Link

Jane Fox : 8/20/2007 1:01:23 PM

What we have today is a very typical day of summer trading.

Keene Little : 8/20/2007 1:01:05 PM

Stair-stepping lower now. We should get a little larger bounce now but not much and it will be a good time to get short again. If SPX bounces back up to the 1440 area watch for a short play to set up.

Jane Fox : 8/20/2007 1:00:39 PM

ES breaks to new daily lows but the VIX is not anywhere near its daily highs so don't expect any follow through.

Jeff Bailey : 8/20/2007 12:58:41 PM

Today's Treasury bond market trade looks VERY defensive to me. VERY defensive.

Jane Fox : 8/20/2007 12:52:46 PM

I certainly do not see anything overly bearish today but on the other hand nothing overly bullish either. Just a very good day for golf.

Jeff Bailey : 8/20/2007 12:33:47 PM

13-week Yield ($IRX.X) alert! plunging 122 bp to 2.40%. WEEKLY S2 here at 2.446%.

Jane Fox : 8/20/2007 12:28:36 PM

Please take note that I suspect $70.00 Oil support will NOT hold. (hate it when I forget a very important word like NOT)

Jeff Bailey : 8/20/2007 12:28:20 PM

China Southern Airlines Says To Buy 55 Boeing B737 Aircraft

Jeff Bailey : 8/20/2007 12:27:27 PM

DJ- Dollar Pares Earlier Gains Vs. Yen As US Stocks Decline

Jane Fox : 8/20/2007 12:24:02 PM

Do you remember all those days when the AD line and volume were very bearish yet the TRIN stubbornly stayed under 1.00. Well today the AD line and volume are not overly bearish (AD line -256) but the TRIN is well above 1.00. Link

Jeff Bailey : 8/20/2007 12:22:49 PM

NASDAQ 100 (NDX.X) Alert! 1,880.45 -0.44% ... WEEKLY Pivot here.

Jane Fox : 8/20/2007 12:20:03 PM

Oil is testing $70.00/bl again and a 3rd test usually fails. It may stop here for a while but I suspect the $70.00 support will hold. Link

Jane Fox : 8/20/2007 12:15:00 PM

Only market to not break its overnight lows is NQ, the NAZ futures.

Keene Little : 8/20/2007 12:10:28 PM

After dribbling out the side of its little parallel up-channel from Friday, SPX has clearly broken below it now and has been followd by the DOW. At this point I would short the rallies today.

Jeff Bailey : 8/20/2007 12:04:53 PM

VXN.X 26.21 -3.10% ...

Jeff Bailey : 8/20/2007 12:04:23 PM

VIX.X 27.76 -7.43% ...

Jane Fox : 8/20/2007 12:03:22 PM

The Russell and S&P futures are now breaking overnight lows. Link

Jeff Bailey : 8/20/2007 12:01:42 PM

Disclosure: I currently hold bearish position in BIDU

Jeff Bailey : 8/20/2007 12:01:13 PM

Swing trade put alert ... for an additional one (1) Baidu.com BIDU Sep $150 Put (BDQ-UJ) at the offer of $1.85.

No stop for now, target $160.

BIDU $182.81 +3.56% ...

Linda Piazza : 8/20/2007 12:00:14 PM

If you're long today, you really would prefer for the USD/yen not to drop below about 114.45 on 15-minute closes. A quick piercing of that level would perhaps not damage sentiment too much, as long as the currency pair bounced quickly, but any prolonged period below that level would perhaps weaken bullish sentiment. So far, the day's pullback off the overnight high could still be seen as a potential bull flag, but too much of a drop would begin to question any potential bullishness of the formation, especially if the USD/yen should drop below 113.75-114.00. If you don't have a quote for this, check the crawler on the top of the CNBC screen. I show it at 114.50 as I type.

Jane Fox : 8/20/2007 11:52:56 AM

I will have to see the S&P break the swing high at 1503 before I will become a bull again. I am not a bear because I have not seen enough evidence to turn me bearish but yet I need the bulls to prove to me they have what it takes. Link

Jeff Bailey : 8/20/2007 11:47:31 AM

Bear Correction! ... Friday's action saw the narrower S&P 100 Bullish % (BPOEX) from Dorsey/Wright reverse back up to "bear correction" status with a net gain of 7 stocks to reversing higher PnF buy signals to 46.00%. It would currently take a 68% measure to achieve "bull confirmed" status. A measure of 40.00% would have this market reversing back lower to "bear confirmed."

Jeff Bailey : 8/20/2007 11:40:29 AM

Asian Markets: at this Link

Jane Fox : 8/20/2007 11:35:10 AM

You can almost use price as a straight edge today. After the volatility we have seen this is painful. Link

Jeff Bailey : 8/20/2007 11:33:53 AM

DJ- Dean Likely Category 5 Prior To Yukatan Landfall ... Remains Catagory 4 Storm.

Jane Fox : 8/20/2007 11:31:48 AM

If you are long these charts should worry you. Link

Jane Fox : 8/20/2007 11:30:56 AM

If you are short these charts should worry you. Link

Jeff Bailey : 8/20/2007 11:29:14 AM

11:00 Internals found at this Link

Jane Fox : 8/20/2007 11:29:11 AM

TRIN making new daily highs here at 1.41 but the VIX is making new daily lows. This means we have the proverbial bull/bear fight and you should probably not trade or you will become collateral damage.

Keene Little : 8/20/2007 11:20:49 AM

Based on the SPX 120-min chart I showed earlier ( Link ) and following the bearish wave count scenario (my preferred wave count), this is how it could play out over the next few months: Link

After the bounce up to the 1485 area shown on the 120-min chart (which could coincide with the 50-dma by the time it gets up there), the dark red count shows two equal legs down to 1300, another sharp bounce into October (up to where the 200-dma will probably be) and then a bigger decline into the end of the year.

The pink wave count shows a sharper decline into October where the 2nd leg down (wave-C) would achieve 162% of the 1st leg down (which is the decline from July to last week's low) at 1185. That would then be followed by a sharp bounce back up to the broken uptrend line from August 2004 (just above 1350 by that time) and then a sharp decline into the end of the year.

This is of course all speculation but it would fit not only a typical wave pattern but would also be similar to what I showed on the weekly chart this morning ( Link ).

Jeff Bailey : 8/20/2007 11:18:00 AM

11:00 Market Watch at this Link

Jane Fox : 8/20/2007 11:08:07 AM

The DOW and S&P have not broken out of their respective overnight ranges. Link

Jane Fox : 8/20/2007 11:03:33 AM

According to the daily/120/60 jtHMA charts the DOW is a on buy signal but the weekly is still red so no cigar. The weekly has to turn green before you can take long positions. Link

Jane Fox : 8/20/2007 10:48:17 AM

This chart of the DOW is not telling me much. I do not see a MACD divergence to tell me the "V" bottom is indeed a bottom. I also am not seeing any evidence of bullishness today. It is a time to be very careful out there. Link

Keene Little : 8/20/2007 10:46:43 AM

Here's the same little parallel up-channel for the DOW as I showed for SPX. With an upside Fib target at 13173 it could rally up to there before lunch and tag the top of its channel at the same time. It would be a good setup to try shorting it. Link

Keene Little : 8/20/2007 10:34:34 AM

The DOW has not broken below its uptrend line yet (at 13048) so we don't have confirmation yet of the break so keep your stop tight if trying a short here.

Keene Little : 8/20/2007 10:32:52 AM

SPX has now broken below its uptrend line from Friday morning's low. The high should now be in and a short against this morning's high is the right play.

Jeff Bailey : 8/20/2007 10:29:50 AM


DJ- National Bank of Canada agrees to buy nearly C$2 billion ($1.88 billion) in asset-backed commercial paper held by the firm's mutual funds and individual and corporate investors to eliminate its customers' exposure to that market.

Jeff Bailey : 8/20/2007 10:29:19 AM


DJ- Hurricane Dean is picking up speed while moving westerly at 21 miles per hour. National Hurricane Center says that on this track, the center of the hurricane is expected to be very near the east coast of Yucatan Peninsula by tonight.

Jeff Bailey : 8/20/2007 10:27:49 AM


DJ- Chicago Fed National Activity Index swings to a -0.10 reading in July, from +0.06 in June, on weakness in employment, and consumption and housing indicators. Index's three-month moving average is -0.12, unchanged from June.

Jeff Bailey : 8/20/2007 10:26:49 AM


DJ- KKR Financial, an affiliate of buyout firm Kohlberg Kravis Roberts, says it plans to raise $500.4 million by selling stock to seven institutional investors as well as rights to its common shareholders.

KFN $15.50 +7.63% ...

Jeff Bailey : 8/20/2007 10:23:47 AM


DJ- Thornburg Mortgage sells $20.5 billion in top-rated mortgage-backed securities to boost its liquidity, as firm had to stop funding loans last week due to credit crunch. Thornburg has significantly reduced its borrowings portfolio.

TMA $13.53 -10.03% ...

Jeff Bailey : 8/20/2007 10:21:38 AM


DJ- Shares rise 6% after home improvement retailer reports 2Q earning of $1.02 billion, or 67c a share, as revenue rises to $14.17 billion. Analysts expected EPS of 61c on revenue of $14.13 billion. Lowe's forecasts 3Q EPS of 43c-45c, with sales up 7%-8% from a year earlier. For the fiscal year ending Feb. 1, the company lowers EPS expectations to $1.97-$2.01 from its prior view of $1.99-$2.03 as housing market downturn hurts sales.

LOW $28.57 +6.32% ...

Jane Fox : 8/20/2007 10:13:26 AM

WASHINGTON (MarketWatch) - U.S. leading economic indicators increased by 0.4% in July, pointing to slow growth for the rest of the year, the Conference Board reported Monday.

The index, designed to forecast economic trends six to nine months ahead, has risen in three months so far this year. It's up 0.1% in the past six months, with half of the 10 indicators growing over that time.

The leading index "continues to suggest that the economy is likely to grow in the near term, albeit at a slow pace," the private research group said in a statement.

Six of the 10 leading indicators advanced in July, led by consumer expectations, vendor performance and jobless claims. The other gainers were the money supply, stock prices and consumer-goods orders. Three indicators fell: building permits, capital-equipment orders and interest-rate spread. Factory hours were unchanged.

The coincident index rose 0.2% and the lagging index rose 0.2% in July.

Keene Little : 8/20/2007 10:13:00 AM

With what appears to be an impulsive move up from last Thursday, it calls for another leg up after a pullback to correct that rally. It's then a question as to what the larger pattern is and that's what I'll be trying to figure out as we move forward. Using the SPX 120-min chart, here are the two top possibilities in my mind: Link

The bearish wave count calls for a larger A-B-C rally to correct the decline from the July high. Playing with some Fib retracements and projections (in time and price) I'm thinking a pullback to around 1406 and then rally up to about 1485 (for a nice trade on the long side!) would set the market up for a more severe decline.

The bullish wave count calls the 3-wave pullback from the July high as just another (albeit sharp) correction to the longer term rally and now we've started the next leg up which will take us to new market highs.

From here there's really no way of knowing which wave count we're in and for shorter term traders it doesn't matter--both will look the same for the next week or two. We'll play one leg at a time until the larger pattern becomes clearer again at which time we can set up some longer term trades.

Jane Fox : 8/20/2007 10:06:26 AM

I have a VIX now and it seems to be making new daily lows however, I will not trust it for a while yet. TRIN is still 1.24 so the bulls need to be diligent.

Linda Piazza : 8/20/2007 10:03:57 AM

I've searched the Federal Reserve Bank of NY's website this morning and see a one-day repo in the amount of $3.5 billion. However, since the Fed on Friday injected $6.0 billion that was to mature today, this is not an add to liquidity. The Fed usually acts through the Federal Reserve Bank of NY, to my understanding.

Jeff Bailey : 8/20/2007 10:02:54 AM

10:00 Market Watch found at this Link

Jane Fox : 8/20/2007 9:59:33 AM

One thing I would like to make note of the USDJPY chart is the MACD - notice how it is not showing any divergence at all telling me this market has not made a bottom yet.

Linda Piazza : 8/20/2007 9:59:20 AM

Thanks, Jane, for posting the chart when I was obviously having difficulty uploading it for a moment!

Jane Fox : 8/20/2007 9:56:08 AM

Here is a chart of the US$/yen currency pair of which Linda spoke. For those of you who are new to currency trading you always look at a currency in relation to another. The US$ I usually show is the $ against a basket of currencies. Link

Linda Piazza : 8/20/2007 9:53:27 AM

Here's the USD/yen chart: Link

Jane Fox : 8/20/2007 9:51:12 AM

Here is how the markets are trading in relation to their previous day ranges (PDR). Nothing to spectacular here I'm afraid but heh after last week I can take unspectacular for a while. Link

Linda Piazza : 8/20/2007 9:51:46 AM

Many of you know that I've been urging that traders watch how the U.S. dollar and euro perform against the yen as either a predictor or corroboration of any U.S. equity moves. Some of you may also know that, until recent developments, it was widely believed that the Bank of Japan might raise rates at its next meeting, scheduled for August 23. Why is this important? Such action, if it still occurs, could result in the yen rising in value against other currencies, which would mean a drop in the USD/yen and, probably, euro/yen pairs. That hasn't been good for equities lately, but it's possible the effect could be muted if the yen carry trade has been mostly unwound. Anyway, I thought it might be important to point out some suggestions for what you might watch. The USD/yen pair faces possibly strong resistance at about 116.32 and then especially near 117.60-118.00, the 38.2 and 50 percent retracements of the steep decline from the late-June high. My conclusion? My conclusion is that matters are still rather iffy. We have a bounce, but it's far from certain yet whether this is a relief bounce or something more substantial. Some have speculated that since the Bank of Japan has been pouring yen into the markets, injecting liquidity, that it's abandoned its determination to raise rates. Others point out that central banks may have two purposes in injecting funds: to inject liquidity and to impact currency moves. Some believe that Japan's injections over the last week have been for the latter purpose and won't impact its decision this week. Of course, if our Fed is right and economic conditions have deteriorated here, the BOJ might decide to abandon its plan. My advice is that you continue to watch these currency pairs, remain aware of what's happening in Japan, and protect bullish profits, particularly Wednesday, as the Bank of Japan's decision will occur Wednesday night for us, unless they decide to jump the gun and act ahead of the schedule.

Jane Fox : 8/20/2007 9:44:59 AM

TRIN at 1.33 should be worrisome to the bulls.

Jeff Bailey : 8/20/2007 9:43:41 AM

Fed Accepts $3.5 Billion in Overnight RPs

Keene Little : 8/20/2007 9:42:48 AM

Me neither Jane (no VIX on QCharts).

Keene Little : 8/20/2007 9:42:08 AM

The upside target for the DOW (for equality between its 1st and 5th waves in the move up from Thursday's low) is at 13173. Continue to monitor the trend lines along the lows since Friday morning's pullback since a break below those lines would indicate that the 5th wave is already finished and we've started the pullback to correct the 2-day rally.

Jane Fox : 8/20/2007 9:40:54 AM

I am once again not getting a VIX this morning.

Jane Fox : 8/20/2007 9:36:20 AM

AD line is a healthy +1206

Jane Fox : 8/20/2007 9:30:03 AM

The overnight session was totally unremarkable but still noteworthy in the fact the bulls were able to hold on to the gains they made Friday. Link

Jeff Bailey : 8/20/2007 9:27:05 AM

Last 3 Weekly Pivot Matrix found at this Link

Jeff Bailey : 8/20/2007 9:17:57 AM

Weekly/Monthly Index Pivot Matrix found at this Link

Keene Little : 8/20/2007 9:08:13 AM

It looks like we'll get the push higher this morning which will give us an impulsive 5-wave advance off last Thursday's low. The 5th wave is the one that should complete this morning so be careful chasing this higher (it might even do a gap n crap). It's possible we've got a very bullish pattern in play which calls for a strong rally today but I think that's a lower odds scenario.

SPX 1454.50 was an upside target on Friday (equality between the 1st and 5th waves in the move up from Thursday) and that remains a good target to watch for failure of the rally and try a short play. That's about 9 points above Friday's close so a little higher than the premarket high in ES so far. That would also take price up to the top of a little parallel up-channel for Friday's price action after the pullback (the 5th wave). Link

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