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Tab Gilles : 9/11/2007 12:42:03 AM

After Fridays bearish employment report, this survey contradicts that the jobs market is worsening. Link

Keene Little : 9/10/2007 10:53:39 PM

Tuesday's pivot tables: Link and Link

Keene Little : 9/10/2007 10:41:05 PM

The indices continue to sport the same patterns and so the market remains in synch. It's too bad the pattern leaves open a few possible scenarios but at least we have some levels to watch to see where this market is headed over the next few days.

The SPX 60-min chart shows the parallel down-channel for price action since the high on Sept 4th and Monday afternoon's bounce stopped right at the top of the channel. While it's possible we're going to see a strong rally up above 1500 (green wave count), I think that's the lower probability scenario. Either the bearish pink or dark red counts are the higher odds plays: Link

While it's possible we haven't seen the completion of a 5-wave move down from Sept 4th (shown on the RUT chart below), I'm assuming for now that the 5-wave decline finished at Monday's low. That means we're due a 2nd wave correction and the Monday afternoon bounce was either all of it (pink wave count) or just wave-a of an expected larger a-b-c bounce (dark red). This 15-min chart shows a closer view of these two possibilities: Link

If SPX drops beneath 1445 on Tuesday I'd consider that too deep for wave-b of a larger a-b-c bounce and would start to think more seriously that the 2nd wave correction is already finished as of Monday afternoon's high. But a push back up that breaks the downtrend line from Sept 4th could see a bounce up to 1468-1475 (50%-62% retracement) before it rolls back over. So play the break either way (although upside potential is not enough to interest me in that play).

The RUT 60-min chart shows the two bearish scenarios where we could see one more new low before setting up a 2nd wave correction (pink) or a bounce from here to 782-788 (50%-62% retracement of the decline from Sept 4th) before rolling back over.

Price action in the morning should provide some more clues as to which one is playing out. Keep trading short term moves and take profits often. If we get a more significant drop started you'll have plenty of time to climb aboard. Link

OI Technical Staff : 9/10/2007 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The Market Monitor has been archived.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 : 9/10/2007 6:56:09 PM

Closing Internals found at this Link

Jeff Bailey : 9/10/2007 4:53:30 PM

Closing U.S. Market Watch found at this Link

Keene Little : 9/10/2007 4:04:10 PM

SPX smacked its head on its downtrend line from last Tuesday's high, near 1462, and has pulled back sharply. The rally off this morning's low, for as sharp as it looks, can still be counted as a corrective wave structure. That means it might still have been a 4th wave correction which simply means we'll now head for another new low to finish a 5-wave move down from last Tuesday.

The bulls need to see the current pullback lead to another push above 1462. That would confirm that a bottom is in for now and it should be good for a decent trade on the long side. But then I'll be watching for the setup for a larger degree 3rd wave down (as per the bearish wave count, dark red, on the SPX 60-min chart I posted earlier), perhaps by Wednesday.

Linda Piazza : 9/10/2007 3:49:00 PM

USD/yen at 113.69, unable to break through, as yet, the resistance zone that's held since Friday. Perhaps just watch what happens overnight. A sustained climb would be short-term bullish for equities, of course, but the USD/yen is in a kind of dead zone between about 114.05 and 115.00. There's a big gap lower from that level, and gap resistance can be strong, particularly at the top, midpoint and bottom. I would say that a USD/yen climb into that zone would be equivalent to the SPX climbing in the bottom half, say, of its rising channel that's been established since the summer low. While it's short-term bullish to be climbing through a rising channel, is that channel a bear flag? And will the outcome long-term be bullish?

Jeff Bailey : 9/10/2007 3:47:14 PM

Moody's: Closer US Ties May Cause Trouble In Latin America Debt

Jeff Bailey : 9/10/2007 3:41:33 PM

US July Consumer Credit Increased $7.5B
June Consumer Credit Revised To Up $11.9B From Up $13.1B

Jeff Bailey : 9/10/2007 3:40:01 PM

Fed's Fisher: Encouraged By Data From Talking To Businesspeople

Linda Piazza : 9/10/2007 3:39:39 PM

What happens tonight that could impact your trades? At 7:50 EST tonight, Japan's July Machinery Orders will be released. At 4:00 tomorrow morning, Germany's August WPI (Wholesale Price Index?), and then, at 4:30 the UK's July trade balance will be released.

Articles on Nikkei Net begin to feature titles suggesting that the Bank of Japan may be prevented from raising rates in Japan by emerging signs of recession. The revised GDP data last night hit Japanese stocks hard. I'm not sure how hard any bad news from the July machinery orders might hit, so I'm not sure if it could further weaken the yen. The news could be considered baked in and most market watchers now conclude that the BOJ will not hike rates (and therefore, potentially, strengthen the yen) in September.

Jeff Bailey : 9/10/2007 3:32:56 PM

03:00 Internals found at this Link

Jane Fox : 9/10/2007 3:28:41 PM

NDX futures are now tagging their PDHs, next stop is daily highs?

Linda Piazza : 9/10/2007 3:26:01 PM

USD/yen at 113.82 as the SPX retests its 200-sma.

Jane Fox : 9/10/2007 3:24:25 PM

WASHINGTON (MarketWatch) -- An increase in credit-card debt again pushed up outstanding U.S. consumer debt in July, at a 3.7% annual rate, or by $7.5 billion, the Federal Reserve reported Monday.

Consumer credit outstanding rose to $2.46 trillion in July, up from a revised $2.45 trillion in June, the Fed said.

It's the smallest gain for consumer credit since April, according to the Fed's data.

In July, revolving debt such as credit-card debt rose at a 6.6% annual rate, or by $5 billion.

Credit-card debt rose by a revised 6.4% in June. Non-revolving debt such as auto, student, personal and others rose at an annual rate of 2% in July after climbing by 5.6% in June.

Jane Fox : 9/10/2007 3:23:02 PM

It is certainly looking a lot better for the bulls now. Link

Linda Piazza : 9/10/2007 3:19:02 PM

For the first time since Friday morning, the SPX is pushing above its 15-minute 45-ema. It is not yet to a new day's high, and we should presume that resistance will likely strengthen as that day's high is approached. Those who made plans for the possibility of a USD/yen bounce as suggested in my 10:40:14 post had time to consider what they would do to protect their bearish equity plays. By my 11:01:34 post, support was beginning to firm beneath the USD/yen. The USD/yen actually bounced from above its overnight low. The SPX had set a downside target, but the USD/yen's action was warning us, as I did you, too, that it wasn't confirming the idea of a full-out breakdown on the equities.

I keep watching for the time when these currency pairs will not be as helpful to us in either predicting action or in warning us of some divergence, but so far, it's still working relatively well. I want to maintain some skepticism about it and use it only as one would any other indicator, but I don't see anything yet that tells me that it's okay to start ignoring it. So, with that in mind, we should probably watch closely as the 113.80-114.05 levels are approached, as the USD/yen has had difficulty with that zone since Friday morning. The USD/yen is at 113.78 as I type.

Jane Fox : 9/10/2007 3:18:40 PM

This may be a very good spot to try a long position in the DOW. I would use DIA calls and out about 2-3 months. Link

Jeff Bailey : 9/10/2007 3:18:22 PM

Semiconductor HOLDRs (SMH) $38.12 +0.81% ... back for a 2nd look at WEEKLY Pivot ($38.10).

Jane Fox : 9/10/2007 3:15:33 PM

Needless to say the bears fumbled the ball but the bulls are taking their time retrieving it . Link

Jane Fox : 9/10/2007 3:14:33 PM

No market has broken its overnight highs and the Russsell futures have not even broken their overnight lows. Link

Keene Little : 9/10/2007 3:11:00 PM

SPX is still within its new parallel down-channel, the top of which is currently near 1462 so there's some rally potential there. And if we've seen a completed 5-wave move then price should break out of this channel as part of a 2nd wave correction to the decline from last Tuesday but probably after a pullback from the downtrend line first (not shown on this SPX 60-min chart): Link

There's an even more bullish possibiltiy (shown in pink) that we're in a much larger corrective pattern which will give us a strong rally to finish a larger A-B-C bounce from the August 16th low. I think the probability of that move is slim.

As shown with the dark red count, there's still the chance we haven't seen the completed 5-wave move yet and the current bounce is just part of a 4th wave correction. This says we'll get another new low before setting up a larger 2nd wave correction.

If we get the larger correction and then another new low then the bears will rule and it could get ugly. But until that happens we could literally see this go anywhere (corrective patterns are difficult to get a bead on until the end of it). So continue to trade this with shorter term hit and run trades until the larger pattern clears up.

Jeff Bailey : 9/10/2007 3:02:49 PM

03:00 Market Watch found at this Link

Linda Piazza : 9/10/2007 2:46:34 PM

The TRAN bounced (although not yet to a new day's high), the USD/yen bounced (although also not yet to a new day's high) and the SPX erased its tentative downside target. As I mentioned a couple of times earlier, the failure of the USD/yen to break to a new day's low argued against a full-out breakdown just yet. Keep watching the TRAN and the USD/yen for forecasts and/or confirmations.

Keene Little : 9/10/2007 2:30:50 PM

There's the break so you should be out of your short play now. It's possible we've already started the bigger bounce that will last a couple of days.

Jeff Bailey : 9/10/2007 2:28:51 PM

Swing trade sell covered put alert ... for one (1) of the iShares Russell 2000 IWM Sep $72 Puts (IQQ-UT) at the bid of $1.00.

IWM $76.67 -1.27% ... 9/11 patriotic rally may be building.

Keene Little : 9/10/2007 2:27:48 PM

If SPX breaks to a new afternoon high then it will be a confirmed break of its downtrend so don't hang around short if that happens. But wait for the break to a new high since this is what it did Thursday afternoon which set up the big gap down on Friday.

Jeff Bailey : 9/10/2007 2:23:31 PM

Monster Worldwide (MNST) $32.80 -2.08% ...

Manpower (MAN) $63.21 -1.12% ...

Jeff Bailey : 9/10/2007 2:22:39 PM

LOCKHART SAYS FED WATCHING SENTIMENT

DJ- Atlanta Fed's Lockhart says poor employment figures for August should be assessed alongside recent strong retail sales reports. Lockhart says data tracking health of U.S. consumer will be key to this month's decision on interest rates.

Jeff Bailey : 9/10/2007 2:20:04 PM

US Oil Fund (USO) $57.98 +0.38% Link ... $0.50-box chart to match futures.

Jeff Bailey : 9/10/2007 2:18:31 PM

OPEC MAY HIKE QUOTAS BY 500K BARRELS

DJ- Some major OPEC nations are weighing an increase in production quotas of up to 500,000 barrels a day, say people familiar with the matter, a largely symbolic move that would give a nod to market concerns yet wouldn't add meaningfully to global supplies.

Jeff Bailey : 9/10/2007 2:17:56 PM

WAMU SEES '07 LOSS PROVISION AS HIGH AS $2.2B

DJ- Washington Mutual CEO warns the thrift anticipates a continued rise in bad loans, which will take a toll on earnings. He says WaMu will set aside as much as $2.2 billion this year to cover potential loan losses.

WM $35.05 +0.08% ...

Jeff Bailey : 9/10/2007 2:16:38 PM

BLACKSTONE SEALS FIRST CHINA BUY IN $600M DEAL

DJ- U.S. private-equity firm pays $600 million for a 20% stake in China National BlueStar, a state-backed Chinese chemical producer. Deal is Blackstone's first in China since Beijing took $3 billion stake the firm.

BX $21.48 -0.27% ...

Jeff Bailey : 9/10/2007 2:15:25 PM

FANNIE, FREDDIE GET NEW SUBPRIME STANDARDS

DJ- Fannie Mae and Freddie Mac will only purchase securities backed by subprime loans if the mortgages comply with new federal standards aimed at preventing high-risk underwriting, the companies' regulator says.

FNM $62.47 -0.07% ...

FRE $58.81 -0.84% ...

Jeff Bailey : 9/10/2007 2:13:47 PM

WACHOVIA GRABBING NEW MORTGAGE BUSINESS

DJ- Wachovia is grabbing more mortgage business amid recent shakeout in the industry, CEO G. Kennedy Thompson says. In the first two months of 3Q, company's outstanding mortgage loans have shot up about $1.2 billion.

WB $47.32 -1.56% ...

Jeff Bailey : 9/10/2007 2:12:39 PM

APPLE MAY BE MULLING BID IN SPECTRUM AUCTION

DJ- Apple is considering participating in the upcoming spectrum auction according to a report in Business Week, in a move which could see it competing to offer wireless Internet and telephone service for the first time.

Jeff Bailey : 9/10/2007 2:11:53 PM

HOME DEPOT WRAPS BUYBACK, UPDATES OUTLOOK

DJ- Home-improvement retailer accepts for purchase about 289.3 million shares of its common stock at a price of $37 a share and revises its full-year earnings forecast to a decline of 7%-9% from an earlier forecast for a decline of 12%-15%.

HD $33.77 -1.28% ...

Jeff Bailey : 9/10/2007 2:10:42 PM

YELLEN SEES INCREASED RISK TO ECONOMY

DJ- San Francisco Fed President says downsides risks to the U.S. economic outlook have clearly risen in the wake of recent financial market turmoil, but the implications for monetary policy still remain uncertain.

Linda Piazza : 9/10/2007 2:10:08 PM

The TRAN may be important to watch. It's relatively closer to its intraday low than some of the other indices, with the TRAN's intraday low at 4649.75 and the TRAN currently at 4662.87. It may reach/exceed/bounce from above its intraday low sooner than the other indices.

Keene Little : 9/10/2007 2:07:58 PM

If you shorted this last bounce then a good place for your stop is just above the bounce high. That was probably the end of the correction and we'll now get another leg down (could be the last one before setting up a larger bounce tomorrow. The other possibility is that we'll consolidate between today's low and that last bounce high (before proceeding lower again).

Tab Gilles : 9/10/2007 2:07:39 PM

Link to commentry by Paul McCulley of PIMCO on banking industry. Link

Linda Piazza : 9/10/2007 2:07:15 PM

Obviously, the SPX did not close the 30-minute period above its 30-minute 9-ema. (See my 1:46:43 post.) The potential downside target is maintained, but other potential support is trying to firm near 1439.52. The USD/yen has not dropped beneath either the morning low (113.22) or the overnight low (113.03), so it's not yet predicting an all-out breakdown. It's at 113.35 as I type.

Linda Piazza : 9/10/2007 1:46:43 PM

The SPX has now erased its breakdown status on its 15-minute chart. It's threatening to break above the level on its 30-minute chart that will undo its downside target. It did close at or maybe just cents above its 30-minute 9-ema during the previous 30-minute period, but not convincingly above it, I dn't think. That 30-minute 9-ema is currently at 1448.58, with the SPX at 1449.93 as I type.

Be careful here. Don't hang on to a losing play if your stops are being reached, but don't jump into a new play based solely on what you see during a stop-running time of day.

Jane Fox : 9/10/2007 1:38:41 PM

SPX certainly did scare the bulls today but it looks like is is going to be OK - at least for now. It also looks like my "Story that I am sticking to" will not make a me a great big fat liar. Link

Keene Little : 9/10/2007 1:38:14 PM

SPX has also tagged its downtrend line from Friday so any higher would be more bullish, especially if it comes back down for a successful retest. Until that happens this is a good place to try a short play.

Jeff Bailey : 9/10/2007 1:37:17 PM

Dow Industrials (INDU) 13,121.02 +0.05% ... inches green.

Keene Little : 9/10/2007 1:37:12 PM

The bounce is getting a little bigger. Two equal legs up for SPX is at 1450.85 which just got tagged. Now we'll see if it can continue or not.

Jeff Bailey : 9/10/2007 1:36:27 PM

Global Equity Index and Currency Table at this Link

Jane Fox : 9/10/2007 1:36:19 PM

Looking pretty obvious that the Aug 28 and 29th lows are going to hold. Link

Jeff Bailey : 9/10/2007 1:18:34 PM

01:00 Internals found at this Link

Jeff Bailey : 9/10/2007 1:18:08 PM

01:00 Market Watch found at this Link

Keene Little : 9/10/2007 1:07:47 PM

So far I'm not seeing anything in this bounce that tells me I should be looking to trade the long side. Additional downside looks to be in order with perhaps the rest of the day consolidating first.

Keene Little : 9/10/2007 1:01:40 PM

The RUT's move down from last Tuesday counts well as a potentially completed 5-wave decline which stopped just shy of its long term uptrend line from August 2004, currently near 758. Link

But the lack of a clearer bullish divergence at today's low vs. Friday morning's low raises some doubt about the completion of a 5-wave move (wave-5 is typically weaker than wave-3 and should show negative divergence). Therefore, as the pink wave count shows, we might still need a 5th wave down before we can expect a larger bounce to correct the decline. I'm hoping for some more clues from today's bounce to help answer this question.

Jane Fox : 9/10/2007 12:58:39 PM

Dateline WSJ - Downsides risks to the U.S. economic outlook have clearly risen in the wake of recent financial market turmoil, but the implications for monetary policy still remain uncertain, a top Federal Reserve official said Monday.

Separately, Federal Reserve Bank of Atlanta President Dennis Lockhart said data tracking the health of the U.S. consumer will be key to this month's decision on interest rates.

"While I do think that the present financial situation has added appreciably to the downside risks to economic activity, we should remember that conditions can change quickly for better or for worse -- especially in financial markets -- so it's hard right now to speak with a great deal of confidence about future economic developments," Federal Reserve Bank of San Francisco President Janet Yellen said.

Determining what's needed for the path of monetary policy "requires not only careful and vigilant monitoring of financial market developments, but also the formation of judgments about how these developments will affect employment, output, and inflation," Ms. Yellen said. "I believe it is critical to take a forward-looking approach -- gauging the effects of recent developments on the outlook, and, importantly, the risks to that outlook," she said.

Linda Piazza : 9/10/2007 12:54:11 PM

So far, the SPX still maintains its breakdown status on the 15-minute nested Keltner chart. That will be maintained as long as the SPX stays below a line now at 1446.50, on 15-minute closes. The SPX is at 1443.29 as I type.

So far, the SPX's downside target is still maintained, too, with the SPX continuing to print 30-minute closes below the 30-minute 9-ema, currently at 1447.83. The potential downside target has now slipped to 1427.85, but please remember that it's a potential target only. The USD/yen has not dropped below its overnight low, so it's not confirming, yet, the idea of a complete breakdown.

Jane Fox : 9/10/2007 12:52:15 PM

... and that daily lows have not yet been made.

Jane Fox : 9/10/2007 12:51:56 PM

AD volume continues to make new daily lows and that is usually an indication to continue to sell the rallies.

Jane Fox : 9/10/2007 12:21:53 PM

AD volume is still making new daily lows so the bears still have the ball and it is still a sell the rallies.

Linda Piazza : 9/10/2007 12:01:02 PM

Well, the SPX might indeed be in a "breakdown mood," but I edited the previous post to read my intended "breakdown mode." Jane talks to us "fooks" and I talk about the "mood" of the SPX. Must be something in the air today, right?

Keene Little : 9/10/2007 12:00:17 PM

It's possible we're going to get one more small consolidation here, for maybe about an hour, and then a final low that will be worth watching for a trade on the long side. But I don't see a reason to be thinking long yet.

Linda Piazza : 9/10/2007 11:59:51 AM

The SPX is now in breakdown mode on the 15-minute Keltner charts. When that happens, I roll up to the 30-minute chart for a longer-term outlook and also for a potential downside target. The 30-minute chart suggests that as long as the SPX maintains 30-minute closes beneath a Keltner line now at 1449.62 (9-ema), it maintains a potential downside target of 1428.34. That doesn't mean that downside target will be reached. Watching that 30-minute 9-ema gives you a guideline. But, there is now vulnerability down toward 1428-1430, at least.

Jane Fox : 9/10/2007 11:32:47 AM

A 20% decline for the DOW is 11216. Yearly highs 14021*80%= 11216

Jane Fox : 9/10/2007 11:30:57 AM

If the DOW closes below support from the August 28 and 29th lows then all bullish bets are off and I will turn back to neutral. I will have to see a close below yearly lows and/or a 20% decline for me to turn to a bear. Link

Jeff Bailey : 9/10/2007 11:24:57 AM

IWM $75.83 -2.35% ... "skewed" after Friday's post-04:00 buy program.

Jeff Bailey : 9/10/2007 11:23:32 AM

Russell 2000 (RUT.X) 761.12 -1.89% ... first to trade WEEKLY S1 (763.95).

Jeff Bailey : 9/10/2007 11:22:08 AM

Session high for both NDX and QQQQ came at WEEKLY Pivot(s), so sellers looked eager.

Jeff Bailey : 9/10/2007 11:21:19 AM

11:00 Internals found at this Link

Note: It would take a closing measure of 50.00% or lower for the NASDAQ's 5-day NH/NL measure to reverse back lower.

Jane Fox : 9/10/2007 11:20:35 AM

All markets are now trading below their previous day ranges. Link

Jane Fox : 9/10/2007 11:16:36 AM

More bearish confirmation. Link

Jane Fox : 9/10/2007 11:15:32 AM

VIX and S&P futures are telling you all is well in bear country. Link

Keene Little : 9/10/2007 11:13:25 AM

The move down from mid day Friday looks like it will need to stair step lower before finding a bottom. SPX 1432 could be the target in which case DOW 13K will break.

Jane Fox : 9/10/2007 11:04:30 AM

Internals are telling you to sell the rallies.

Jeff Bailey : 9/10/2007 11:02:31 AM

11:00 Market Watch found at this Link

Linda Piazza : 9/10/2007 11:01:34 AM

USD/yen at 113.24 now, at one level of potential Keltner support on the 15-minute chart, with further support near the overnight low.

Jane Fox : 9/10/2007 10:55:12 AM

The jtHMA charts have me on sidelines waiting patiently for the weekly to turn back green before I get my 401(k) money back in the market. Link

Jane Fox : 9/10/2007 10:53:18 AM

Well my bullish "Story" is starting to fall apart. Now the bulls need the August 28th lows and the 50% retracement level to hold. I was hoping us bulls wouldn't be put through this but it looks like we will have to go through the pain. Link

Keene Little : 9/10/2007 10:58:44 AM

The possibility remains where we could be in a 1-2, 1-2 wave count to the downside, as I explained with the SPX chart last night (below) so a continuation lower from here could really pick up some speed. But if we see it work its way lower and start to see some bullish divergences then we might be seeing a 5th wave for the move down from last Tuesday. DOW 13K could be support in that case.

The DOW found resistance at its broken downtrend line from July 19th again and now appears to be heading lower. A break below 13035 would confirm a 3-wave bounce off the August low and leave it as a correction to the July-Aug decline. That would be bearish even if we get another leg up as part of a larger correction (pink wave count): Link

Linda Piazza : 9/10/2007 10:46:16 AM

The SPX is now breaking below that rising channel it had been forming since the August low, displayed in my 10:18:32 post. I watch daily closes for my perspective, if price action and my current portfolio allow such a perspective, so it will be today's close that tells me whether that channel has been violated or not, but this is bad news without a pop back into that channel by the close.

Linda Piazza : 9/10/2007 10:40:14 AM

USD/yen now at 113.31. The overnight low was 113.03 if my feed is correct. I also see Keltner support at 113.07 on 15-minute closes. Consider the possibility of a USD/yen bounce from that zone, and what it might do to your current equity plays, if such a bounce occurs. There's no guarantee that a bounce will occur or even that the USD/yen will get back to overnight lows, but this is your invitation to make plans.

Jane Fox : 9/10/2007 10:31:50 AM

All the internals are telling me lower lows are in store.

Jane Fox : 9/10/2007 10:23:35 AM

US$ to new yearly lows. Link

Linda Piazza : 9/10/2007 10:23:06 AM

Have you noticed how often the VIX rises as important support or resistance is tested, as an important announcement approaches? That was happening this morning as the SPX dipped toward bottom-channel support, for example. That makes your task as options traders a bit more difficult if you're buying options. That's because you're going to be buying expensive options with volatilities plumping up their prices. That means that you can be right about what will happen and when it will happen, but if it doesn't happen with enough speed, you could still lose money as the extra premium leaks away. I personally like contingent stops, stops contingent on where the underlying is at the time, but you do have to watch closely the price of your option, too. Unless you've bought an option with the intention of letting it run, no matter what, defining your total risk at the time you bought it, then you don't want to let the price get too low, either.

Jane Fox : 9/10/2007 10:19:22 AM

One point I would like to add to Linda's 10:12 comments is that I have just started to watch the USDJPY currency pair - based on Linda's comments - but use it as an internal and compare it to the other internals so I have a different perspective on this market.

Linda Piazza : 9/10/2007 10:18:32 AM

The SPX got knocked back from its attempt to rise above the 200-sma. However, here's where it is is now: Link

Keene Little : 9/10/2007 10:16:13 AM

Money continues to rush into the bonds.

Jane Fox : 9/10/2007 10:14:01 AM

I quit watching Gold for a while and look what has happened.

BAck in May of 2006 Gold hit a high of 732 and it looks like it is heading back to that level. Link

Linda Piazza : 9/10/2007 10:12:10 AM

We writers don't coordinate our methodology or viewpoints. I think that's a strength of the site, because you get a number of viewpoints. It's wonderful when it all coalesces but sometimes subscribers are confused when two of us appear to differ in our viewpoints or methodologies. For example, Jane and I both are commenting on the USDJPY (USD/yen) and we may be seeing different things. That's because I'm using the overnight trading pattern, too, different from some others who watch the dollar against other currencies or just dollar futures. The forex market can be quite active with volumes quite heavy during the overnight markets, so I choose to include the overnight action in my charts and comments. I learned when attempting forex trades that if you were going to trade the USD/yen, you'd better be awake when the Nikkei was open, and if you were going to trade anything that included the euro, you'd better be awake when the European markets opened, too, as what happened during those periods was every bit as important as what happened when the U.S. markets were open. That's a primary reason that I stopped trading the forex markets--I had to sleep some time, along with my conclusion that they weren't as purely technical a market as some had claimed--and it's the primary reason that I do include overnight prices in my charts. Sometimes, it's true, the USD/yen pair might have made a big movement overnight and be reacting to that movement (bouncing after a decline, declining after a big overnight bounce) during our trading day, and it seems to be that reaction that most informs us, but I still like to cast it against what's happening overnight. Jane isn't wrong: I'm not. It's just differing opinions about what to take into context.

So, now that I've blundered on way too long, the USD/yen is at 113.58 as I type, testing the ascending trendline off its overnight low.

Jane Fox : 9/10/2007 10:08:01 AM

Just got an email from a subscriber, "what are bearish fooks? LOL" Gee you guys don't know what a fook is. YOu must not be Canadian :)

Jeff Bailey : 9/10/2007 10:06:26 AM

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

Jeff Bailey : 9/10/2007 10:02:16 AM

10:00 Market Watch found at this Link

Jane Fox : 9/10/2007 10:00:57 AM

OK the internals are now telling you it is safe to go back in the water - they are all confirming the bears have control.

Jane Fox : 9/10/2007 9:59:22 AM

AD volume although still above 0 is making new daily lows.

Jane Fox : 9/10/2007 9:57:45 AM

ER (Russell 2000) overnight lows were 776.60 and this market is now below those lows.

Jane Fox : 9/10/2007 9:55:53 AM

The DAX on the other hand is not making new daily lows and neither is the AD volume.

Jane Fox : 9/10/2007 9:55:03 AM

USDJPY to new daily lows as the VIX is climbing to new daily highs. AD line has fallen to +314. The bears have the ball.

Linda Piazza : 9/10/2007 9:52:35 AM

The Fed has announced a repo in the amount of $2.750 billion, maturing tomorrow. A repo in the amount of $2.000 billion matured today, so that makes today's net a net add of $0.750 billion.

Jane Fox : 9/10/2007 9:52:16 AM

Internals are telling me this is not a time to be putting my money on the line.

Jane Fox : 9/10/2007 9:50:37 AM

The Russell 2000 futures have tested its overnight lows. Link

Linda Piazza : 9/10/2007 9:49:59 AM

USD/yen is at 113.72. So far, it's still maintaining a rising trendline off its overnight low, reached during the 2:45 am EST candle, with that trendline now at about 113.60 if I'm eyeballing it right. As I mentioned earlier, it's facing potentially massive resistance just overhead, too. I think that resistance will likely be tough, but if I see the USD/yen pair start to soar, I'll be considering the possibility that an equity bounce could get started, too.

Japan had some sobering economic news, too, with its GDP revised much lower than expected, and I believe it has another important report tonight. A slowdown in Japan would have the effect of lowering the yen against other currencies, which, depending on the strength of the dollar, might make the dollar rise against the yen. But, if the USD/yen is rising because the Japanese economy is dipping harder than is the U.S. economy, would that rise have as much bullish meaning as it did when the yen was being borrowed and put to work buying equities? Would equities be bought this time, if there were fears of recession across the globe? Oh, how complicated it all can get, right?

Keene Little : 9/10/2007 9:49:25 AM

Except for YM the post-8:30 ramp up has now been reversed. It's still unclear where this market is headed this morning and I'm in no rush to trade this until it clears up a bit. Hopefully the short term pattern will clear up and in the meantime flat is a position.

Linda Piazza : 9/10/2007 9:42:14 AM

The VIX is at 27.05 according to my chart feed. If it climbs any higher, it's in danger of invalidating that H&S formation. About a week ago, the VIX was reaching a key level, a level at which it would test the neckline of this formation. We would see whether the VIX confirmed that formation or else did what equities sometimes do--bounce from the neckline and invalidate the whole formation. The bounce occurred, and this should not be cheering to equity bulls.

Watch the 28.70-29.75 region for potential resistance, if the VIX should keep climbing.

Jane Fox : 9/10/2007 9:39:07 AM

VIX to new daily highs and USDJPY and DAX to new daily lows - this is bearish fooks.

Jeff Bailey : 9/10/2007 9:38:38 AM

Apple's iPhone Sales Hit 1M Mark Ahead Of Forecast ...

Jane Fox : 9/10/2007 9:37:39 AM

AD line has changed over the past few months because it spends most of its time above +1000 or below -1000. This is quite a change from earlier when this internal was considered at extremes when over or under the +/-1000. AD line is now at +1020

Jeff Bailey : 9/10/2007 9:35:40 AM

Intel Raises 3Q Sales Outlook ... AP Story Link

Jane Fox : 9/10/2007 9:35:34 AM

As you have probably noticed over the years, I really dislike clutter on my charts and this one is getting a little cluttered but I do need most of it for now.

The SPX tested the zone that needs to hold up as support if my "Story" of higher highs and lows is true. Friday the SPX tested its 200EMA and the 38.20 fib level of the rally from the August lows to September highs and now the sept 4th highs need to break to confirm this higher low. Link

Linda Piazza : 9/10/2007 9:27:16 AM

Overnight, the USD/yen reached a low slightly lower than Friday's this morning about 3:00, but then has been climbing into a retest of Friday's high. With a high so far at 113.97 and Friday's high at 114.05, it hasn't been able to climb above that and is currently at 113.75. The formation looks like a little cup-and-handle formation (bullish), but the USD/yen moves into a Friday's gap level if it gets above 114.00, and those gaps are particularly difficult resistance at times.

Jeff Bailey : 9/10/2007 9:24:19 AM

Joseph Lewis Reports Bear Stearns Stake ... AP Story Link

Jane Fox : 9/10/2007 9:23:27 AM

Here is a chart of the USDJPY overnight chart and as you can see it is making new overnight highs which supports the bullishness you are seeing in the American index futures markets. Link

Jane Fox : 9/10/2007 9:20:38 AM

Interestingly the DAX did not participate in the overnight rally and did not break its overnight high. This is your first clue the rally in the American futures does not have legs (follow through).

Crude fell overnight which puts downward pressure on Gold however, the US$ hovering at its previous day lows (PDL) is enough to keep Gold from selling off. Link

Linda Piazza : 9/10/2007 9:20:07 AM

The only repo I find that matures today is a $2.000 billion from Friday. We'll see in about 40 minutes whether the Fed is accepting any repos today.

Jane Fox : 9/10/2007 9:15:08 AM

I have been looking for any news that could have ignited the rocket boosters under the markets around 9:00 but so far have found nothing. You don't usually see this kind of sudden move overnight without some sort of outside catalyst behind it.

All overnight highs broke at the same time but we will have to see if this buying spurt has any follow through. I would imagine it will not until the official market open. Link

Jane Fox : 9/10/2007 9:06:03 AM

SAN FRANCISCO (MarketWatch) -- Investors are about to get a look at the first major reports on the damage from this summer's credit crunch.

In a little more than a week, Wall Street's biggest firms report quarterly results. These companies are lynchpins of the global financial system, so their performance will be scrutinized for clues on how banks, other companies, capital markets and the broader economy are coping with a crisis that has hit close to home for some top brokers.

"This quarter is the most anticipated earnings event for the brokers for years," said Brad Hintz, an analyst at Bernstein Research and former chief financial officer at Lehman. "There's huge amounts of uncertainty about brokerage firms' results. Questions are swirling."

Keene Little : 9/10/2007 8:50:15 AM

It was a choppy labored climb but equity futures have managed to recover their overnight losses. ES swung 10 points low to high and is now trying to hold the flat line. The first direction out of the gate remains a question but I think at most we'll get a consolidation this morning (could whipsaw a number of points) before continuing lower.

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