Option Investor
Printer friendly version
Jeff Bailey : 9/13/2007 2:55:19 AM

Here would be one way to "view" the Relative Strength of GG against the Gold Bugs Index ($HUI.X) for FREE! Link

Jeff Bailey : 9/13/2007 2:52:04 AM

Here would be one way to "view" the Relative Strength of GG against the SPY Link for FREE!

Jeff Bailey : 9/13/2007 2:42:35 AM

PRECious Metals Bullish % reverses up to "bull alert."

Here is a Distribution Curve of "precious metal stocks" that I grabbed at the close of trade on 9/5/07 (last Wednesday) Link

Here is a Distribution Curve at tonight's close Link

Jeff Bailey : 9/13/2007 1:55:14 AM

Educational Contest:You can only buy/call one of these stocks. You can only short/put one of these stocks.

Stock A Link

Stock B Link

Tomorrow, I'll price out 4 options. 1 in-the-money Oct. call for Stock A and 1 in-the-money Oct. put for Stock A. Then I'll price out 1 in-the-money Oct. call for Stock B and 1 in-the-money Oct. put for Stock B.

We'll hold your selections, no stop, no target, until October's expiration.

At October's expiration, we'll look at each stock's chart once again. Make the selection for November. We can continue for December, January, February.

Each month, you are free to "switch" from call/put Stock A, to call/put Stock B, based on your technical analysis skills.

Primary Objective: To grow your account over the next 6 months.

Second Objective: To make money each of the next 6 months (if you achieve this goal, then primary goal is simple).

What you'll learn: You won't have a "favorite" stock.

Jeff Bailey : 9/13/2007 1:00:16 AM

Based on observation, the RUT.X looks NOTHING like the INDU, SPX, or NDX. Even the U.S. Market Watch Net% confirm the observation.

If so bearish you have to be short something, then be short WEAKNESS. If so bullish you have to be long something, then be long STRENGTH. Even RELATIVE STRENGTH.

Current market conditions are EXCELLENT for options. LIMITs risk of capital as long as you do not overleverage.

Keene Little : 9/12/2007 10:11:14 PM

Thursday's pivot tables: Link and Link

The four indices look the same--the tip over from Wednesday's highs should be the start of some strong selling to follow over the next couple of days. The Thursday/Friday prior to opex typically marks a low and then followed by a rally into opex. With FOMC on Tuesday that pattern could get changed a little but a decline into Friday and then bounce into Tuesday would be a setup for some major selling to then follow (shown on the SPX chart below). But, one leg at a time--short against Wednesday's highs and then hopefully we'll be able to pull the stops down early Thursday. 60-min chart updates:
DOW: Link
SPX: Link
NDX: Link
RUT: Link

OI Technical Staff : 9/12/2007 10:00:00 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 : 9/12/2007 5:58:50 PM

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

Got "up to date" on some of the EIA figures. It had been too long.

Dumped the GOOG for a decent gain. Don't like dollar weakness. Shorts did their part to help us out, that was all we needed. Can't blame shorts when looking at BIDU each day.

Now coming back to PTR and CEO dynamic. Have done VERY WELL with PTR and CEO (call and put) and similar PTR setup as we benefited from in the past. Fidelity sold due to shareholder pressure, Buffett held long, now selling at a MUCH higher price than Fidelity did.

Still, without shareholders, an investment management firm is nothing. One reason why some companies don't go public.

BIG and NARROW DIA still looks stronger than SMALL and BROAD IWM.

Jeff Bailey : 9/12/2007 5:42:56 PM

AMGN ruling a positive for Johnson & Johnson (JNJ) Link

Jeff Bailey : 9/12/2007 5:38:46 PM

GS's PnF chart Link

MARKET and SECTOR are "bear" phase, so we DO NOT use Professor Davis' study (triple top buy signal) at this point in time.

Jeff Bailey : 9/12/2007 5:29:22 PM

Yesterday, Goldman Sachs (GS) $182.53 -0.52% ... jumped at the open, but got slapped lower at its bearish resistance trend (dorsey/wright's PnF chart).

Jeff Bailey : 9/12/2007 5:28:12 PM

Bear Stearns (BSC) $110.05 +2.23% ... Mark your calendar for 9/20/07 (next Thursday). Earnings before the bell.

Jeff Bailey : 9/12/2007 5:24:47 PM

Get a "doji" on the SPX.

TRIN and TRINQ work together at 0.90 match. 1.00 would have been the only other pressure cooker, but sense computers are squared up. It is up to humans now.

Dollar Index looks like it is going into the tank, gold looks infinity, so does oil. How oil bids with weak global economy I haven't a clue.

How many times have some "seen" or "thought" this since 1930's?

Jeff Bailey : 9/12/2007 5:15:25 PM

Closing Internals found at this Link

Jeff Bailey : 9/12/2007 5:15:20 PM

I feel, observe great pressure building at today's close.

Jeff Bailey : 9/12/2007 5:06:01 PM

Crazy ... VIX.X goes out 24.96. WEEKLY Pivot 24.97.

Should be a WILD quarterly expiration.

Jeff Bailey : 9/12/2007 4:58:03 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/12/2007 4:45:36 PM

Jeff: Do you have a photographic memory? How can you remember when the YM traded a daily resistance one day and what it did the next? YM traded just like you said it might this morning.

Reply: The pivot levels can be powerful. I say things from time to time, that I really do test. I don't think I have a photo memory, but you look at the charts, trade them, and see how the market trades the levels, and sometime, well... history repeats!

Jeff Bailey : 9/12/2007 4:08:18 PM

CNOOC (CEO) $132.08 +3.67% Link

Jeff Bailey : 9/12/2007 4:03:35 PM

PetroChina (PTR) $145.00 -0.03% ... are you ready to rumble? Are you done yet Mr. Buffett? Link

Jeff Bailey : 9/12/2007 4:00:51 PM

PetroChina (PTR) ... The Street.com's Fidelity coverage back in May Link

Jane Fox : 9/12/2007 3:59:05 PM

Gee is it Thursday already tomorrow? Anyway economic reports for Thursday are:

8:30a.m. Initial Jobless Claims. Expected: +4K. Previous: -19K.

2:00p.m. Federal Budget Statement. Expected: -75B. Previous: -$36.32B.

Jane Fox : 9/12/2007 3:57:31 PM

EGADs look at crude!! Link

Jane Fox : 9/12/2007 3:57:04 PM

Here is a snapshot of the cash index with a MACD. This has been a difficult day to trade, not impossible, but difficult. Link

Keene Little : 9/12/2007 3:53:49 PM

After retesting its broken uptrend line from August 16th, NDX has now dropped to a new low in this afternoon's pullback. This one looks good for a top (but it's still only a 3-wave decline so it could be just a larger corrective pullback). It took a little effort to grab the short but hopefully you're in. It's not much but the stop can be brought down to just above this afternoon's bounce. If this is a true MOAP play (Mother of All Puts) and you're short then the coming ride should be a lot of fun. Link

Similar to what I did for SPX, using a typical time and price Fib projection for the next leg down (assuming we're in the middle of a large A-B-C drop from the July high) I get a move down to the 1650 area by mid-October. Link

Jeff Bailey : 9/12/2007 3:33:52 PM

"The chawts don't lie" ... New Yorker buddy of mine likes to say that.

Jeff Bailey : 9/12/2007 3:33:14 PM

Check out the chart of PTR ... and read the news. Makes sense doesn't it?

Jeff Bailey : 9/12/2007 3:32:01 PM

OK ... that's Fidelity (see March/April MM postings!), now Buffett gives in.

Jeff Bailey : 9/12/2007 3:31:10 PM

Buffett Further Reduces Stake In PetroChina ... Reuters Story Link

Jeff Bailey : 9/12/2007 3:30:33 PM

And now ... the rest of the news ...

Jeff Bailey : 9/12/2007 3:30:11 PM

PTR $145.05 (unch) ... what's up, or NOT up with that?

Jane Fox : 9/12/2007 3:29:57 PM

Dateline WSJ - Economic forecasters are boosting the odds that the U.S. will slide into recession in the next 12 months as the housing slump deepens and the credit crisis continues.

The latest WSJ.com survey of economists, conducted in the days following the gloomy Sept. 7 employment report, pegged the recession risk at 36%, up from a 28% probability a month earlier. Three-fourths of the 52 economists responding to the recession question put the odds at or above 30% and 11 put the odds at 50% or better. The range was wide -- from 5% to 90%.

The economy has been juiced by this rapid credit expansion, and I think that's over," said Steve East, chief economist at Friedman, Billings, Ramsey, who put recession odds at 60%. "That's the message of the credit market turmoil: The economy is not going to have as much high-octane fuel to run on."

Jeff Bailey : 9/12/2007 3:29:53 PM

CEO $132.86 +4.28% ...

Keene Little : 9/12/2007 3:28:55 PM

The update to the SPX 60-min chart hasn't changed much from yesterday's. I simply put off the coming decline by a day. It could still chop its way a little higher but each new high at this point will be worth testing with a short play. When one finally works it should be a good winner. Link

Jeff Bailey : 9/12/2007 3:27:27 PM

NDX's MONTHLY R1 is 2,053.44.

Yes, there's NO WAY it can get there

Famous last words ...

Jane Fox : 9/12/2007 3:26:59 PM

As long as the AD line and volume were as bearish as they have been all day the SPX had little chance of breaking the 50/100EMA confluence resistance let alone closing above it. It is now very important as to what happens here - if this swing high becomes a lower high and the swing low at 1440 is broken the bullish story becomes a little harder to believe. That does not mean the chart has turned bearish just a little less bullish. Link

Jeff Bailey : 9/12/2007 3:26:07 PM

QQQQ Options Montage at this Link

Use in COMBINATION with 02:38:36 posting.

Jeff Bailey : 9/12/2007 3:17:30 PM

03:00 Internals found at this Link

Linda Piazza : 9/12/2007 3:16:50 PM

A reader asks about my commentary on the TRAN and how it can be used to determine future trends in the Dow and SPX. We of course all know about Dow theory, but I'm not employing traditional Dow theory when I comment on the TRAN. I use it as a sort of indicator index, using it as I might RSI or CCI. Those two indicators tend to lead more than other indicators, but they also offer insights when they're showing divergence from price patterns. Similarly, the TRAN often leads the SPX, Dow and OEX, and if there's a divergence, I'm forewarned. If the SPX, OEX and Dow are trending one direction but the TRAN isn't, there's a chance the move isn't sustainable.

So, how could the observations of the TRAN be used? In the way I'm using it, I use it just as an indicator, not in the traditional manner.

Keene Little : 9/12/2007 3:12:52 PM

NDX has now broken its uptrend line from Monday, finally. Short positions look good against today's high. I'll hold my stop there for a bit until I see more downside pattern develop.

Jeff Bailey : 9/12/2007 3:09:50 PM

03:00 Market Watch found at this Link

Jeff Bailey : 9/12/2007 3:01:03 PM

That's a new 52-weeker too.

Jeff Bailey : 9/12/2007 3:00:39 PM

Sure "wish" somebody would sell their BIDU stake before next Friday.

BIDU $230.65 +1.59% ...

Jeff Bailey : 9/12/2007 2:58:36 PM

Keeping track of these China-based companies isn't all that easy. They call them by several different names. I think PTR and CEO have several names, or "own" large portions of other energy-related companies.

Keene Little : 9/12/2007 2:58:03 PM

The flip side to Barry's question--do I ever trade the fundamentals? The answer is a resounding no! Funnymentals follow the technicals which is one reason why the Fed is always late to the party.

Jeff Bailey : 9/12/2007 2:57:21 PM

Alcoa Sell Stake in Chalco ... AP Story Link

... Alcoa had been an investor in Aluminum Corporation of China Ltd., also known as Chalco, since the Chinese company's initial public offering in 2001.

Keene Little : 9/12/2007 2:53:01 PM

Keene, your current projections are quite bearish and I was wondering given the Fed and many other potentially market moving events coming next Tuesday, that the markets may be very range bound until then? Do you ever take these issues into account or just base your projections/trading purely on the technicals? Thanks , Barry

Me bearish? Nah. I'm not bearish but the price pattern is bearish (wink). I just follow the yellow brick road (you know, the gold bricks). If only it was that easy. The short answer to your question is yes, I definitely give consideration to potentially important market moving events. But how the market reacts to these events is the bigger question.

For example we've seen vastly different reactions to the same kind of economic or earnings news at different times. These reactions often prompt the question "what's wrong with this market?" since it seems to often disagree with how we thought it would react. And that's why I try to get a bead on market direction from the EW pattern and the other technicals. I then attempt to identify a potential pattern that could play out once the market reacts to the event.

So I trade the charts and what the technicals (including EW) are telling me. I've learned long ago to stop trying to predict how the market will react to a piece of news. Is a Fed rate cut already priced in? And if so will it then be a sell-the-news event? I have no clue. Give me the charts instead any day of the week.

Jeff Bailey : 9/12/2007 2:46:04 PM

Linda ... I can't cover wrap. I'd love to, but I have meetings I can't get out of Thursday, Friday and then 2-days this weekend.

Jeff Bailey : 9/12/2007 2:44:23 PM

Linda! Checking email now.

Jeff Bailey : 9/12/2007 2:43:35 PM

VXN.X 27.80 .... as recently as 09/04/07, the VXN was trading 24.00.

Yesterday it did reach 31.75.

So, we have a clue that CALL SELLING/PUT BUYING has been greater than CALL BUYING and PUT SELLING.

Jeff Bailey : 9/12/2007 2:39:53 PM

Monday morning NDX traded 1,950 ...

Jeff Bailey : 9/12/2007 2:38:36 PM

NDX Option Montage at this Link

Jeff Bailey : 9/12/2007 2:31:27 PM

M, M , MMMMM ... NDX option montage on its way.

Jeff Bailey : 9/12/2007 2:27:52 PM

If shorting the indexes via futures ... KNOW where the heck that open interest is. Remember this is a QUARTERLY EXPIRATION, and you don't want to get stuck in a squeeze.

Keene Little : 9/12/2007 2:23:44 PM

SPX is pushing to a new high but without the help of the banks. NDX is now not following to a new high. I certainly don't like the smell of this rally attempt and my stop at SPX 1480 sure looks vulnerable. If you're short NDX I'd continue to use a new daily high for your stop. If stopped out of an ES/SPX trade then you might want to think about trying it again on a rollover. Or wait for a drop back below SPX 1470 to confirm the high is in. This all looks very much like an ending pattern to the rally but there's clearly an attempt to frustrate the shorts and keep the bears away.

Jeff Bailey : 9/12/2007 2:20:24 PM

Patterson UTI (PTEN) $22.90 +0.13% ... I think this is still the only "energy" name in the NDX/QQQQ.

Jeff Bailey : 9/12/2007 2:16:29 PM

VIX 24.65 ... darts to session low.

Jeff Bailey : 9/12/2007 2:15:12 PM

S&P Select Energy (AMEX:XLE) alert! $72.25

Tab Gilles : 9/12/2007 2:14:36 PM

Weekly EIA Report: Link

Jeff Bailey : 9/12/2007 2:14:16 PM

YM Alert! 13,373 ... gets the trade at DAILY R1.

Jeff Bailey : 9/12/2007 2:13:21 PM

Oh my ... Link

SPX makes a new session high.

Jeff Bailey : 9/12/2007 2:08:20 PM

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

Keene Little : 9/12/2007 2:05:06 PM

Be back in about 10 minutes. Don't let the bulls bounce me out.

Jane Fox : 9/12/2007 2:03:40 PM

This has been a very challenging day to trade - to say the least. Link

Keene Little : 9/12/2007 2:03:03 PM

After trying a couple of times to get back above its broken uptrend line from August 16th, the NDX looks like it might try it again, as shown on this 60-min chart update: Link . But the shorter term chart hints that it might not make it quite that high (which would be near a retest of this morning's high).

Keene Little : 9/12/2007 1:56:58 PM

The NDX pattern still looks good for a short here against this morning's high. Makes for a tight stop.

Jeff Bailey : 9/12/2007 1:56:12 PM

RUT.X 780.78 -0.19% ...

Jeff Bailey : 9/12/2007 1:55:32 PM

Depends "what flavor" of ice cream you like if looking to short the indexes.

Keene Little : 9/12/2007 1:55:02 PM

I'm getting the feeling that ES traders are bound and determined to get that gap close at 1479.75, missed by 3 ticks this morning.

Jeff Bailey : 9/12/2007 1:55:08 PM

Exxon/Mobil (XOM) $87.91 +1.11% ... #4 weighting in Dow Industrials.

Jeff Bailey : 9/12/2007 1:51:12 PM

MBA's Weekly Application Survey at this Link

Jeff Bailey : 9/12/2007 1:47:15 PM

StreeTracks Gold (GLD) ... $1 box Link

And $0.40 box to match futures that most institutional traders are trading Link

Keene Little : 9/12/2007 1:45:51 PM

ES has made a 3-wave bounce with the 2nd leg = 162% of the 1st leg at 1476 so that's the level to try a short.

Keene Little : 9/12/2007 1:44:39 PM

This is the bounce to short against a new daily high. Right here makes for a relatively tight stop.

Jeff Bailey : 9/12/2007 1:43:43 PM

USD/JPY PnF chart from Dorsey/Wright at this Link

Jeff Bailey : 9/12/2007 1:42:13 PM

Ooooeeee! ... CNBC mentioning AMEX:DBA as a commodity tracker. Alert set at $27.75

Linda Piazza : 9/12/2007 1:26:04 PM

Nothing major is happening, but the SPX is threatening its first 30-minute close beneath the 30-minute 9-ema since Monday afternoon. Such a close, if it should happen, might mean a trip down toward nearest channel support, as I mentioned in an earlier post, with that support just above 1467. At 1471.80 as I type, the SPX is just cents below that 30-minute 9-ema, so if it closed right here, your judgments would be made more difficult. Is the tenor changing or is that essentially a close at support? Tough decision.

Jeff Bailey : 9/12/2007 1:25:08 PM

Any "wave count" on the $/yen Keene?

Jeff Bailey : 9/12/2007 1:24:09 PM

01:00 Internals found at this Link

Jeff Bailey : 9/12/2007 1:21:34 PM

Goldcorp (GG) $27.13 +0.70% ... battles trend(s). Biggest is the Pnf chart's bearish resistance. Bar chart from 12/05/06 to recent 7/24/07 relative high also in play.

Keene Little : 9/12/2007 1:17:23 PM

I just noticed that on the weekly chart of gold I have the old wave count on it that I subsequently changed to reflect what I think is a more accurate count (for a cleaner A-B-C wave count). This is the weekly count that I prefer: Link

Keene Little : 9/12/2007 1:13:24 PM

NDX should give us a little bounce off its uptrend line and then break it (at least I hope so for the sake of my short). Link

Keene Little : 9/12/2007 1:10:25 PM

We've now got what looks like a 5-wave move down on the 5-min chart so a bounce to correct it is the next shorting opportunity. If it insteads accelerates lower now then we're into a small 3rd of a 3rd in which case we might have to wait a little bit for a better bounce (or just get short on the sharp drop and live through some stair-stepping lower and then possibly a bigger bounce back up against you).

Jeff Bailey : 9/12/2007 1:03:59 PM

01:00 Market Watch found at this Link

Jeff Bailey : 9/12/2007 1:01:06 PM


DJ- Treasury Secretary Paulson says financial markets are showing 'signs of improvement,' but cautions that turmoil in the subprime mortgage market will take longer to resolve than problems in other areas.

Keene Little : 9/12/2007 12:59:24 PM

I had mentioned yesterday that I thought gold was nearing the top of what could be the completion of a large A-B-C corrective bounce from its Ocotber 2006 low, using this weekly chart to show that: Link . This points to the 725 area as potential resistance. The high for gold so far is 723.80 from yesterday.

Gold pulled back today and it could be part of a slightly larger correction so the 725 upside target could still be in play. But the break of its uptrend line from August 30th, and now retesting it, could set up a renewed decline and therefore a shorting opportunity. Notice the bearish divergence at its last high on this 60-min chart: Link

Jeff Bailey : 9/12/2007 12:58:37 PM

Haven't found "news" of what is driving HMO's

Jeff Bailey : 9/12/2007 12:58:00 PM


DJ- Russian President Vladimir Putin sacks Prime Minister Mikhail Fradkov and his cabinet, in a kick off of a crucial phase of political maneuvering ahead of next year's presidential election. Putin nominates Viktor Zubkov as new PM.

Jeff Bailey : 9/12/2007 12:57:01 PM


DJ- A series of powerful aftershocks, the strongest a magnitude of 6.6, triggers a second tsunami alert in Indonesia, following the first 8.2 quake - killing at least 7 and injuring 100, the meteorological agency and authorities report.

Jeff Bailey : 9/12/2007 12:56:32 PM


DJ- A tropical depression with winds near 35 mph forms east of the Lesser Antilles and may become a tropical storm late Wednesday, National Hurricane Center says. Meanwhile tropical storm warning is issued for parts of Texas and Louisiana.

Jeff Bailey : 9/12/2007 12:56:15 PM

$/yen ... ????

Jeff Bailey : 9/12/2007 12:54:44 PM


DJ- Japanese Prime Minister Shinzo Abe announces he will resign, ending a year-old government that has suffered a string of damaging scandals and a humiliating electoral defeat. Markets react, with stocks down, bonds rallying.

Jeff Bailey : 9/12/2007 12:53:55 PM

Aluminum Corp. China (ACH) $59.34 -10.33% ...

Jeff Bailey : 9/12/2007 12:53:27 PM

Alcoa Sells Its $2B Stake In China's Chalco

Jeff Bailey : 9/12/2007 12:50:00 PM

United States Oil Fund (USO) $59.77 +1.37% ... on Friday, it closed $57.76.

Jeff Bailey : 9/12/2007 12:49:02 PM

EIA: Weekly Gross Inputs, Crude Oil Inputs, Refinery Operable Capacity, Pct. Utilization of Refinery Op. Capacity (%), USO $ and # Days of Supply Table that I keep at this Link

Jane Fox : 9/12/2007 12:44:25 PM

Have you not felt the heavyness in the market today? If not you could have "seen" it in the AD line and volume.

Jane Fox : 9/12/2007 12:39:30 PM

This has been a wonderful day to clean house.

Jeff Bailey : 9/12/2007 12:38:56 PM

Demand-side coming ...

Jane Fox : 9/12/2007 12:38:11 PM

Crude has to be having a affect on the market today. Link

Jeff Bailey : 9/12/2007 12:38:07 PM

A "wild week" while I was gone indeed!

Jeff Bailey : 9/12/2007 12:35:59 PM

EIA: Weekly Crude Oil, Total Gasoline, Reform. Gasoline, Total Distillate, ULS Diesel, Kerosene-Type Jet Fuel Stockpiles Table that I keep at this Link

Keene Little : 9/12/2007 12:35:46 PM

SPX is breaking its uptrend line from Monday but so far it's only in the "head fake" region of a break. Nothing solid yet and the pullback from this morning's high around 11:20 AM is so far only a 3-wave pullback. Ideally we'll see a clean 5-wave move down and then a bounce to correct it. That's when I'll add to my short position.

Jane Fox : 9/12/2007 12:35:43 PM

Oh my gosh crude is now over $79.00/bl

Jeff Bailey : 9/12/2007 12:27:00 PM

Good gravy! ... a 7 million barrel draw in Crude stockpiles.

Jeff Bailey : 9/12/2007 12:25:19 PM

Be "gaurded" with Sep calls/puts that are at, or very close out out-money.

Jeff Bailey : 9/12/2007 12:24:02 PM

VIX.X 25.04 ... sticks its head back above WEEKLY Pivot.

Keene Little : 9/12/2007 12:23:30 PM

I'm waiting for a break of the bottom of the larger ascending wedge on SPX, currently near 1472.60, to break and then hopefully retested before I add to my short position.

Jane Fox : 9/12/2007 12:23:23 PM

The little 'ol ducks are just lining up today.

Jane Fox : 9/12/2007 12:23:05 PM

This is certainly not a go ahead for a short position because the VIX is hardly off its daily lows - and that is bullish.

Jane Fox : 9/12/2007 12:22:14 PM

USDJPY is now making a new daily low (based on a 9:30 open).

Jane Fox : 9/12/2007 12:21:32 PM

You would think the internals are giving you the go ahead to get long but the AD line is still under 0 and that is keeping me on the sidelines. Maybe I need too many ducks in a row to trade but I do like to error on the side of caution. Link

Jeff Bailey : 9/12/2007 12:21:21 PM

Sell Program Premium ...

Keene Little : 9/12/2007 12:21:19 PM

There's a lower low so that could be it. Short against today's high.

Keene Little : 9/12/2007 12:18:42 PM

Someone forgot to send an invite to small caps to join today's party (a subdued one at that) as it fights to get into the green. It also has a small ascending wedge building since yesterday's late-day pullback, with bearish divergences. This may give us one more push to a new high as well but watch for the break down. Link

Jeff Bailey : 9/12/2007 12:15:24 PM

RUT.X 782.18 -0.01% ...

Jeff Bailey : 9/12/2007 12:14:39 PM

VIX.X 24.87

Jeff Bailey : 9/12/2007 12:14:24 PM

While 30-min delayed ... DXY 79.43

Keene Little : 9/12/2007 12:14:23 PM

Labeling the climb in SPX similarly to what I just showed for NDX gives me an upside Fib projection near 1476.50 (cash) which has already been tagged. We could still see a quick pop up to close Friday's gap. Price action is getting squeezed into the point of an ascending wedge within an ascending wedge, with the accompanying bearish divergences. The break down from this pattern should be swift. Link

Jeff Bailey : 9/12/2007 12:13:27 PM

QQQQ $49.29 +0.73% ...

Jeff Bailey : 9/12/2007 12:13:09 PM

Swing trade call exit alert! ... the Google GOOG Sep $530 Call (GOP-IW) at the bid of $5.10

GOOG $525.50

Linda Piazza : 9/12/2007 12:10:41 PM

The TRAN still isn't corroborating SPX, OEX and Dow breakouts. Obviously, those three indices have climbed anyway, but they don't usually move too far if the TRAN isn't moving in the same direction. Is that observation 100% accurate? Of course not. It just means that you should be aware of this and keep evaluating your stops for your bullish positions in case the TRAN's signal (of something wrong underneath) is valid.

Linda Piazza : 9/12/2007 12:07:34 PM

I'm back to check in. While the USDJPY hovers near the day's high and a potential double-top zone, the SPX keeps climbing, so far, deeper into that resistance zone. Here's one measure that short-term bulls might use for guidance: since Monday at about 2:00, the SPX has closed all 30-minute periods above the 30-minute 9-ema. That's currently at 1472.37. A 30-minute close beneath that would signal a short-term change in tenor and might imply that it was about time for the SPX to retreat back to the bottom of its smallest Keltner channel and recharge. Nothing terribly bearish is signaled with a retreat to the bottom of a channel if support is found there and prices climb again, but with bottom channel support now at 1467.32 but climbing, that would be a painful dip for short-term bulls, particularly if they entered at today's open. Some might not want to weather that kind of a dip to find out whether the support was going to hold, so monitoring the support of the 30-minute 9-ema might give a heads up.

Jeff Bailey : 9/12/2007 12:03:37 PM

Swing trade call raise stop alert! ... just under Green #3 and $524.50 for the GOP-IW

GOOG $526.10 +0.91% ... GOP-IW now $5.30 x $5.50

Keene Little : 9/12/2007 11:59:06 AM

The overlapping highs and lows within the rally for NDX from Monday's low makes for a more complex corrective wave structure. I've now got it labeled as a double zigzag (a-b-c-x-a-b-c) with the internal Fib projections at 2007.28-2010.62. With the bearish divergences at new highs now, this looks close to finishing its rally so watch for failure at the top of its up-channel as a place to try a short again: Link

Jeff Bailey : 9/12/2007 11:53:03 AM

Swing trade call raise stop alert! ... for the Google GOOG Sep $530 Call (GOP-IW) to $522.

GOOG $524.21 +0.55% ...

Keene Little : 9/12/2007 11:48:38 AM

The top of the little ascending wedge that I showed on the SPX 5-min chart (11:23) is now near 1479. I might get stopped out of my short if it tags 1480 but if it jumps up and stops me out but then drops back inside the wedge pattern I will immediately get short again with a stop at a new daily high.

Jane Fox : 9/12/2007 11:44:56 AM

Sorry little red SPX but it doesn't look like you have the buying power today. Link

Jane Fox : 9/12/2007 11:44:07 AM

I think I can, I think I can. Link

Jane Fox : 9/12/2007 11:43:29 AM

Well it certainly looks like the NDX is breaking its resistance now we just need the SPX and DOW to follow suit. Link

Jeff Bailey : 9/12/2007 11:39:13 AM

RUT.X 782.21 (unch) ... yet to trade WEEKLY Pivot (784.81).

Jeff Bailey : 9/12/2007 11:25:09 AM

YM's regular session-derived DAILY R1 is 13,372.

Jeff Bailey : 9/12/2007 11:24:09 AM

YM 13,356 now ...

Jeff Bailey : 9/12/2007 11:23:44 AM

While I was out the week of 8/27-8/31 ... NH/NL indications "acted the same" as they have last couple of days. Very much like 8/28

Keene Little : 9/12/2007 11:23:04 AM

The SPX 5-min chart shows what looks like a little ascending wedge (ending diagonal) for the final 5th wave up in its climb. It now might need one more little pullback and new high to finish it. A little throw-over and collapse back inside, or drop out the bottom, would signal the end. A break out the top and keep heading higher could really pick up some speed and I'll definitely not want to be short in that case (I'll probably reverse with a small long position if that happens). Link

Jeff Bailey : 9/12/2007 11:20:40 AM

Index, or individual stock ... have some 52-week high and low alerts established. Take notes of indexes/stocks that trade them, then follow them. Get a pulse on continued convictions.

Keene Little : 9/12/2007 11:18:43 AM

The way SPX is chopping its way higher (overlapping highs and lows) is either mega-bullish with a big rally about to explode higher or else it's an ending pattern. It's why I'm testing the short side but only with a partial position until I see it break down.

Jeff Bailey : 9/12/2007 11:18:37 AM

Procter & Gamble (PG) $66.86 -0.17% ... traded a 52-weeker yesterday. Not a lot of follow through today.

Keene Little : 9/12/2007 11:17:22 AM

Doesn't look like the bulls are done yet. NDX and NQ have closed Friday's gaps but still heading higher. Looks like SPX may want to close its gap near 1478.

Jeff Bailey : 9/12/2007 11:16:46 AM

Research in Motion (RIMM) $85.89 +3.42% ... that's a new 52-weeker.

Jeff Bailey : 9/12/2007 11:15:50 AM

11:00 Internals found at this Link

Jeff Bailey : 9/12/2007 11:04:50 AM

Gosh Jane! ... That would be the "reflashion" trade!

Jeff Bailey : 9/12/2007 11:03:52 AM

11:00 Market Watch found at this Link

Jane Fox : 9/12/2007 10:58:24 AM

Gold is down -4.00 today so I expected to see the US$ rallying. Then Crude in breaking to all time new highs which should be a helping Gold rally as well. This will all work but may take a day or two. Link

Jane Fox : 9/12/2007 10:54:40 AM

So far the bulls have not been able to even trade above the 50/100EMA confluence let alone get up enough steam to CLOSE above this resistance. Link

Jeff Bailey : 9/12/2007 10:53:53 AM

With GOOG $522.21 +0.16% .... low/high has been $519.00/$523.55. I'm showing 2,101 of the GOP-IW having traded from low/high $3.00/$4.40.

Linda Piazza : 9/12/2007 10:50:10 AM

Late yesterday, the TRAN confirmed its inverse H&S, but it followed other indices such as the SPX in that confirmation, rather than leading them. Today, the TRAN has slipped back beneath the neckline and it's just now come back up to challenge that neckline at about 4773. The TRAN has slipped back a little and is at 4760.32 as I type. I don't know: I don't like it (for the sake of those in bullish positions) that the TRAN isn't leading or really even tagging along for the ride, not yet. Traders are never going to have all the ducks in a row, but do keep a watch on the Dow Jones Transportation Index.

Just a note: Different charting sources use different symbology. If you plug in ^TRAN on Yahoo's finance page, for example, you're going to get figures in the 2700-2800's. This isn't the Dow Jones Transportation Index. Use ^DJT if you're looking on Yahoo's pages.

Keene Little : 9/12/2007 10:48:23 AM

I'm only doing a partial position for the short trade here with a stop at SPX 1480 (above its gap). Then I'll leg into a larger position if it starts working for me.

Keene Little : 9/12/2007 10:47:33 AM

SPX has now tagged the Fib level (near 1474.50) that looks like an important one and the top of a short term parallel up-channel. This is where I'm trying a short again and will add to it on a break down. Link

Jeff Bailey : 9/12/2007 10:47:20 AM

Here they are now .... Link

Jeff Bailey : 9/12/2007 10:46:25 AM

Currency screen capture from earlier this morning as DXY traded WEEKLY S1. Link

Jane Fox : 9/12/2007 10:44:57 AM

Here is a chart of the VIX and S&P futures and as you can see they are in sync. Link

Jeff Bailey : 9/12/2007 10:44:33 AM

Big volume yesterday in the ym07z ... let'm roll.

Linda Piazza : 9/12/2007 10:45:26 AM

I returned to see that the SPX is climbing into that 1472-1478 resistance zone. So far, the action of the USDJPY supports that climb, although I'm not sure how reliable a barometer that is this morning due to the reasons the yen is weak and the USDJPY is also in that gap zone at a potential double-top area with yesterday's high.

I suggested yesterday that bullish traders should know what they'll do as the SPX moves into this particular zone and the next one, up near the 50-sma, so it's time to make sure that you're protecting your profit by whatever method you chose--following higher with stops, stepping out of partial positions, etc.

Jane Fox : 9/12/2007 10:43:34 AM

AD volume is now above 0 and climbing but the AD line is still below 0.

Jeff Bailey : 9/12/2007 10:43:32 AM

YM 13,342 ...

Jeff Bailey : 9/12/2007 10:43:11 AM

VIX.X alert! 24.97 ... slips to WEEKLY Pivot.

Jane Fox : 9/12/2007 10:42:13 AM

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

Jeff Bailey : 9/12/2007 10:35:12 AM

Swing trade call raise stop alert! ... for the Google GOOG Sep $530 Call (GOP-IW) to $519 in the underlying.

GOOG $522.70 +0.25% ...

Keene Little : 9/12/2007 10:32:38 AM

Upside risk are Friday's gaps.

Jeff Bailey : 9/12/2007 10:32:05 AM

YM's DAILY R1 is a level to be cognizant of today. Yesterday, we got R2. On 8/22/07 YM traded a DAILY R2. Next day, R1 was it then a reversal back lower.

Keene Little : 9/12/2007 10:32:00 AM

This leg up now might be the last one so testing this new high could work. We've seen higher lows since yesterday's late-day pullback so as soon as we get a lower low that will be the signal that the high is in.

Jane Fox : 9/12/2007 10:28:40 AM


Jeff Bailey : 9/12/2007 10:28:38 AM

150-day SMA Alert! .... Johnson & Johnson (JNJ) $62.63 +0.91% ...

Jane Fox : 9/12/2007 10:28:02 AM

Ah Gee, VIX, DAX and USDJPY are giving me a go ahead for a long trade but the AD line and volume are still below 0. So the bears have fumbled the ball but the bulls have not yet recovered it.

Jeff Bailey : 9/12/2007 10:27:21 AM

Maybe those NH/NL indications are important?

Jeff Bailey : 9/12/2007 10:26:50 AM

QQQQ $49.11 +0.36% ... best levels here.

Jeff Bailey : 9/12/2007 10:24:13 AM

You'd think HMO's tied more to employment figures ... wouldn't you?

Jeff Bailey : 9/12/2007 10:23:21 AM

Noted health insurer's premiums holding strong yesterday.

Jeff Bailey : 9/12/2007 10:22:25 AM

HMO Index (HMO) 1,986.43 +1.67% ... that's a new 52-weeker!

Jeff Bailey : 9/12/2007 10:21:50 AM

Hold the horses ....

Jeff Bailey : 9/12/2007 10:17:08 AM

Google (GOOG) $521.39 +0.01% ...

Jeff Bailey : 9/12/2007 10:14:33 AM

NYSE's NH/NL 30:40.

Jeff Bailey : 9/12/2007 10:14:12 AM

NH/NL's 48:34 at the NASDAQ.

Jeff Bailey : 9/12/2007 10:12:17 AM

Did this last night, or very early this morning and gold was up $1.20. Not now ... $-5.70.

Jeff Bailey : 9/12/2007 10:11:14 AM

Dollar Index slips back to WEEKLY S1 again this morning.

Jeff Bailey : 9/12/2007 10:10:10 AM

10:05 Market Watch found at this Link

Jane Fox : 9/12/2007 10:08:41 AM

Both the AD line and volume are under 0 telling you the bears have control no matter what the other internals are telling you.

Jane Fox : 9/12/2007 10:07:28 AM

The bulls have not been able to wrestle the ball from the bears yet but they have been able keep the bears from running with it. The result is a very choppy market.

Keene Little : 9/12/2007 10:05:42 AM

We could see a choppy rise for the last leg up so I'm still watching for evidence of topping or a breakdown before posting another short signal.

Jane Fox : 9/12/2007 9:57:18 AM

That was nice little spurt of buying but the AD line was not able to get above 0 and that is never bullish. The bulls need to do a lot better than this if they are going to close the SPX above its 50/100 EMA today. Link

Jane Fox : 9/12/2007 9:53:41 AM

Internals are getting more bullish now: VIX to new daily lows and DAX to new daily highs. However, the USDJPY is not making new daily highs and the AD line is still below 0.

Keene Little : 9/12/2007 9:53:25 AM

SPX missed tagging the important 1474.50 (cash) area yesterday so maybe it needs to ring that bell before turning lower. Friday's gap fill would take it up to 1478.27.

Keene Little : 9/12/2007 9:51:18 AM

NDX pushing to new highs. Now we watch for the next resistance level near 1998 (62% retracement). Also NQ gap closure from last Friday is at 2003.50.

Linda Piazza : 9/12/2007 9:50:40 AM

The political uncertainty in Japan (see my early post this morning) has led to a belief that the Bank of Japan will not hike rates at its September meeting. That has weakened the yen, and so the USD/yen (USDJPY) has climbed again this morning. It's at 114.19 as I type. I'm not certain, however, that this will benefit equities because we have to look at why it's happening. With an election now to replace the prime minister, there will be some further uncertainty about the new prime minister's policies. How will that impact Japan's growth? Will those interested in yen carry trades want to borrow yen, even if they're relatively cheap right now, in the face of that uncertainty, and then use the borrowed funds to invest in equities? I'm not so certain they will.

Jane Fox : 9/12/2007 9:49:32 AM

From a purely technical point of view, crude is hitting resistance and I suspect it will retrace before it breaks this level. I also think the $74.00 support will be a very good spot from which it could springboard to break resistance. However, this is not the time of year for Oil to breaking out and like I said this is a purely technical stance. Link

Linda Piazza : 9/12/2007 9:47:20 AM

I will be in and out today, but will check in as frequently as possible.

Jane Fox : 9/12/2007 9:46:18 AM

HONG KONG (MarketWatch) -- Shinzo Abe announced Wednesday his resignation as Japan's prime minister, a move precipitated by his failing to win popular support in the aftermath of the ruling Liberal Democratic Party's resounding defeat in recent Upper House elections.

Abe, 52, assumed power about a year ago, succeeding Junichiro Koizumi.

"It is extremely important that the fight against terrorism be maintained. That was my pledge, and was an international promise," Abe was quoted as saying by news services at a press conference. "In order to fulfill those pledges, I felt that I should step down to move into a new direction."

Linda Piazza : 9/12/2007 9:46:02 AM

The Fed has announced a repo in the amount of $13.500 today. That's a total add unless I missed something. This matures tomorrow as do a whole lot of other repos. I hope the Fed is going to cough up a bunch of money tomorrow.

Jane Fox : 9/12/2007 9:44:12 AM

LONDON (MarketWatch) -- The dollar sank to a record low against the euro Wednesday amid growing expectations that the Federal Reserve will cut U.S. interest rates.

The euro added 0.2% against the greenback, at $1.3867 in late morning London trading, having touched $1.3877 earlier in the day -- its highest level since the European currency was launched in 1999.

The dollar has been in decline for the last several sessions as expectations grow for a rate cut, with the debate now centering on whether the Fed will chop a quarter-point or a half-point of its 5.25% federal funds rate. Link

Keene Little : 9/12/2007 9:41:47 AM

The techs are holding up reasonably well so far this morning so if NDX pushes to a new high then I'll be watching for 1998. Ideally (if you're short) NDX will not rally any further.

Jane Fox : 9/12/2007 9:41:41 AM

The bulls need to pull up their socks and close above the 50/100 EMA confluence. I was thinking today would be nice but it looks like that may asking too much so I will give them until Friday. Much longer and I'm going to get into that worry mode again - like I ever leave it. LOL Link

Jane Fox : 9/12/2007 9:35:32 AM

THe bears have the ball this morning. AD line -1009

Jane Fox : 9/12/2007 9:34:58 AM

Here are your overnight ranges - albeit at little late. It looks like the bearishness we saw overnight is being reversed. Link

Keene Little : 9/12/2007 9:17:44 AM

We've got what looks like a slightly bearish start to the day and that supports the bearish setup at the end of the day yesterday. Short against yesterday's high is the right trade for now and we'll see if it survives the open.

Linda Piazza : 9/12/2007 8:32:23 AM

I will be away from my desk for a while. Hopefully, I'll be back in time for the open.

Linda Piazza : 9/12/2007 8:31:38 AM

Last night, Japan's Prime Minister Shinzo Abe resigned in a surprise move. He attributed his decision to the difficulty he had effecting policies due to a lack of public trust. A presidential election has been called for September 19, the same day as the next BOJ meeting, but some political uncertain exists at this moment as to who his successor might be. Along with other uncertainties exists uncertainties about what will happen to rates in Japan. The Bank of Japan decides those rates, of course, and not the prime minister, but now the Bank of Japan must factor in the political uncertainties along with the economic ones as they make decisions.

What does that mean for us who watch the USDJPY for some guidance as to what might happen with equities? Uncertainty. What happened immediately was a dip in the yen relative to the dollar, so that the USDJPY rose but then it sank again and is currently back at that range that has been either resistance or support lately, being at 113.86 as I type.

Linda Piazza : 9/12/2007 8:10:25 AM

Unless I've missed something, no repos mature today. That means that anything added through the Fed's temporary open market operations today will be a net add.

Market Monitor Archives