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Keene Little : 10/1/2007 11:39:14 PM

End of day re-posts:

Tuesday's pivot tables: Link and Link

I had mentioned early Monday that I'm considering a pattern for the rally from the August 16th low that is an ascending wedge. This would call for a move up from Sept 25th that would likely have two equal legs up because it might be the last (5th) wave of the wedge (and each of the 5 waves is a 3-wave move inside a triangle pattern). The DOW hit its upside target today for that move (at 14073). Actually it pushed a little higher and hit the top of the wedge and then reversed: Link

The wave count for this ascending wedge (ending diagonal) is shown in dark red. The other wave count in pink requires a 5-wave move up from Sept 25th so the next pullback will be important for providing clues--a sharp drop below 13920 would negate the pink count and be more immediately bearish. But a choppy sideways/down correction would support the pink count which is looking for a pullback and then another new high with a Fib projection to just above 14200. It's too early to tell until we get the pullback.

There are three Fib projections for SPX that interest me. The first one is where the move up from Sept 25th has two equal legs at 1546.44 which was tagged on Monday. This may have completed the same ascending wedge pattern as I discussed for the DOW (although it doesn't have clean fitting trend lines like the DOW). Link

Its daily chart shows instead an a-b-c bounce off the August low and for that bounce we'd have two equal legs up (wave-c = wave-a) at 1548.09. This too was tagged on Monday. But for that wave count it would look better (shown in pink on both charts) if we got a small pullback and then a minor new high to hit the Fib projection at 1557.42. Many times, on the shorter time frames, However, that last little high may not happen and the 1548.09 Fib target could be an important one. We'll know shortly. Link

OI Technical Staff : 10/1/2007 9:59:59 PM

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Jeff Bailey : 10/1/2007 8:57:54 PM

Email Question: ... Thanks for all the commentary this AM (Friday) relating to my questions.

One more ? for Jeff on APA. Could you please explain what you mean by "No overhead supply" Thanks

Jeff's Reply ... "No overhead supply" is when a security trades an all-time, if not a multi-year high.

It is thought by many supply/demand traders (like myself) that when a stock achieves an all-time high, if not a multi-year high that there are NO long/bull traders, or investors that are at a loss in the stock and should they not long-liquidate (sell), then any overhead supply is nonexistant.

Jeff Bailey : 10/1/2007 6:57:55 PM

UBS Ag (UBS) $1 box chart Link

Jeff Bailey : 10/1/2007 6:27:09 PM

Citigroup (C) $1 box chart Link

Keene Little : 10/1/2007 6:11:06 PM

Tuesday's pivot tables: Link and Link

Keene Little : 10/1/2007 6:10:33 PM

There are three Fib projections for SPX that interest me. The first one is where the move up from Sept 25th has two equal legs at 1546.44 which was tagged on Monday. This may have completed the same ascending wedge pattern as I discussed for the DOW (although it doesn't have clean fitting trend lines like the DOW). Link

Its daily chart shows instead an a-b-c bounce off the August low and for that bounce we'd have two equal legs up (wave-c = wave-a) at 1548.09. This too was tagged on Monday. But for that wave count it would look better (shown in pink on both charts) if we got a small pullback and then a minor new high to hit the Fib projection at 1557.42. However, as shown on the daily chart here, that last little high may not happen and the 1548.09 Fib target could be an important one. We'll know shortly. Link

Jeff Bailey : 10/1/2007 5:34:09 PM

Closing U.S. Market Watch found at this Link

INDU/DIA, OEX, COMPX, NDX/QQQQ close at new 52-week highs!

MSH.X, XCI.X, SWH, IIX.X, IXTCX, HUI.X and GLD close at new 52-week highs!

No new 52-week closing lows that I could find in U.S. Market Watch.

Jeff Bailey : 10/1/2007 4:42:43 PM

Closing Internals found at this Link

Jane Fox : 10/1/2007 4:06:50 PM

Tomorrow we have the 10:00a.m. August Pending Home Sales. Previous: -12.2%.

Keene Little : 10/1/2007 4:00:19 PM

I had mentioned earlier today that I'm considering a pattern for the rally from the August 16th low that is an ascending wedge. This would call for a move up from Sept 25th that would likely have two equal legs up because it might be the last (5th) wave of the wedge (and each of the 5 waves is a 3-wave move inside a triangle pattern). The DOW hit its upside target today for that move (at 14073). Actually it hit the top of the wedge and then reversed: Link

The wave count for this ascending wedge (ending diagonal) is shown in dark red. The other wave count in pink requires a 5-wave move up from Sept 25th so the next pullback will be important for providing clues--a sharp drop below 13920 would negate the pink count that is looking for another new high (Fib projection to just above 14200) but a choppy sideways/down correction would support the pink count. It's too early to tell but be aware of the more immediately bearish setup potential here.

Linda Piazza : 10/1/2007 3:46:42 PM

After coming within 3 points of its 200-ema, the TRAN has pulled back almost 30 points off its high of the day. No breakout today.

Linda Piazza : 10/1/2007 3:44:10 PM

Here's where I show the SPX on the daily chart as we approach the end of the day: Link So what do we have? Thursday evening I speculated that if the SPX didn't soon break higher, I thought it was going to have to pull back once again to the 10-sma and recharge before pushing higher. It did that on Friday and now it's done the big-gain thing. The follow up during the rally days was to either pull back or consolidate sideways for a few days while the 10-sma rose beneath it, and dip back to that MA again to recharge. Don't know if that pattern will repeat or not, but it's something to consider. If it repeats, can your positions weather a several-day consolidation and dip to the 10-sma or a pullback?

Keene Little : 10/1/2007 3:37:44 PM

Looks like the profit taking time is kicking in now.

Linda Piazza : 10/1/2007 3:37:15 PM

That didn't take long. The SPX has hit the bottom of that channel mentione din my 3:32:09 post. Bulls want to see it find support from here to 1543.74 on 10-minute closes to maintain the breakout on that 10-minute chart. SPX at 1544.87.

Jeff Bailey : 10/1/2007 3:34:48 PM

Baker Hughes' N. American Rig Counts (09/28/07) at this Link

Linda Piazza : 10/1/2007 3:32:09 PM

The SPX has been bouncing so hard today that it's been bouncing from its 10-minute 9-ema rather than the 15-minute one. It's not even coming all the way down to the 15-minute version. So, your first sign of any waning of momentum would be a 10-minute close beneath that 9-ema, but that's only a first heads-up and nothing major. Sooner or later the SPX is going to have to retrace all the way to the bottom of the Keltner channel that surrounds the 10-minute 9-ema. The bottom of that channel is at 1545.59 currently.

Linda Piazza : 10/1/2007 3:28:58 PM

What's happening tonight that might change the USDJPY? I see that at 7:50 EST tonight Japan's September Monetary Base will be released, but I don't really know how much figure will impact currency movements or whether it will at all. Is it as important as last night's Tankan? I just don't know. I see in the news that a party leader called for the end of temporary tax breaks on capital gains and dividends, but that might impact equities more than currencies, and it might not even impact equities that much since it was the opposition party leader calling for the ending of those breaks.

Jeff Bailey : 10/1/2007 3:20:51 PM

03:00 Internals found at this Link

Jeff Bailey : 10/1/2007 3:03:40 PM

03:00 Market Watch found at this Link

Jeff Bailey : 10/1/2007 2:59:42 PM

Swing trade call establish stop alert! ... for the one (1) Baker Hughes BHI Jan $90 Call (BHI-AR) at $91.60 in the underlying.

BHI $92.87 +2.76% ...

BHI-AR $8.30 x $8.50.

Keene Little : 10/1/2007 2:50:16 PM

Afternoon rallies are rarely reversed (except maybe for some last-minute profit taking) so I would be reluctant to try a short this afternoon. Usually it's the bears who throw in the towel towards the end of the day.

Jane Fox : 10/1/2007 2:43:36 PM

These charts area very bullish and are not hinting of weakness today at all. That does not mean we won't have a retracement but if/when it will be short lived. Link

Keene Little : 10/1/2007 2:39:39 PM

Another sign of weakness in this rally is the number of new 52-week highs for the NYSE. Today's number is running below the July high which was below the May high. It goes to show it's not a trading tool but it also points to the fact that we're not at the start of a new bull market leg up. We're putting the finishing touches on the old one. Link

Linda Piazza : 10/1/2007 2:36:50 PM

Although the USDJPY soared during the overnight period, it certainly hasn't done much since our markets opened. In my opinion, the overnight action is important, too, because those overnight actions sometimes take place on as much volume and for as important reasons as do the actions while our markets are open. So, it set us up for a good day today if this security's movements still strongly correlate with the movements in U.S. equities, but like the TRAN, the USDJPY hasn't confirmed recent bullish action when you look at a daily chart. It's mired in a congestion zone that looks a lot like the TRAN's. There used to be strong correlations on the daily chart, so either that inter-market relationship is breaking up, certainly a possibility, or else this failure to break out with U.S. equities is warning us of something. I don't know which it is. I just say that it's reason enough to maintain sound account management and risk management practices. Again, I'm not trying to scare anyone, at least not into anything other than employing sound account management.

Linda Piazza : 10/1/2007 2:27:53 PM

The TRAN came within three points of its 200-ema as it moves up now toward that resistance zone that has proven so tough through the late-summer period. That zone is comprised of the 200-ema, the 72-ema and the 200-sma, from about 4922.50-4969.70. The TRAN is now at 4913.03, having drawn back a bit from its day's high.

Keene Little : 10/1/2007 2:24:54 PM

Even GOOG, with its big rally today, looks like it could be putting in a high. It has rallied into the area of a 127%-138% projection of its previous decline (often this projection zone will be a reversal level). It has now rallied above the trend line across the highs since November 2005 so if it stays there it will be bullish (staying above 574). But if it drops right back below that level then today's move will have been a throw-over finish so that's what to watch for now. Link

Today's rally has the smell of a blow-off top. That's just speculation but considering where we are in so many patterns that I'm watching, not to mention the bearish non-confirmation with the Trannies and the banking index tagging a potentially important Fib level, I can't help but feel we just witnessed a lot of shorts getting blown out of the water. Follow-through to the upside will be key now for the bulls.

Jeff Bailey : 10/1/2007 2:11:29 PM

VIX.X 17.46 -3.00% ...

Jeff Bailey : 10/1/2007 2:08:18 PM

Swing trade call alert! ... for two (2) of the Select Financial SPDR XLF Nov $35 Calls (XLF-KI) at the offer of $1.17.

No stop for now, target $37.00.

XLF $35.00 +1.98% ...

Jeff Bailey : 10/1/2007 2:02:49 PM

US 6-Month Bills: 4.00%; 39.57% At High

DJ- The U.S. Treasury awarded $14.00 billion in six-month bills at Monday's auction at a high rate of 4.000%.

The Treasury received bids totaling $42.71 billion and accepted $14.00 billion, including $1.65 billion of noncompetitive tenders. The dollar price was 97.977778 and the investment rate, or bond-equivalent return, was 4.151%.

The Treasury also sold $200.00 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 3.05, Treasury said.

Tenders submitted at the high yield were allotted 39.57%.

The median rate was 3.985%; 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 3.950%.

The Federal Reserve purchased $11.73 billion in bills for its own account in Monday's three- and six-month bill auctions. When the auction was announced, the Fed held $15.59 billion of maturing bills.

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

Accepted indirect bids for the six-month bill were 25.3% of the total competitive amount, down from 34.1% in last week's six-month bill auction.

The high rate was the same as rate at the previous six-month bill auction.

The issue is dated Oct. 4 and matures on April 3, 2008.

The CUSIP number on the six-month bill is 912795D65.

Jeff Bailey : 10/1/2007 1:58:55 PM

US 3-Month Bills: 3.840%; 61.04% At High

DJ- The U.S. Treasury awarded $16.00 billion in three-month bills at Monday's auction at a high rate of 3.840%.

The Treasury received bids totaling $52.50 billion and accepted $16.00 billion, including $1.59 billion of noncompetitive tenders. The dollar price was 99.029333 and the investment rate, or bond-equivalent return, was 3.942%.

The Treasury also sold $250.00 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 3.28, Treasury said.

Tenders submitted at the high yield were allotted 61.04%.

The median rate was 3.820%; 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 3.790%.

The Federal Reserve purchased $11.73 billion in bills for its own account in Monday's three- and six-month bill auctions. When the auction was announced, the Fed held $15.59 billion of maturing bills.

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

Accepted indirect bids for the three-month bill were 24.5% of the total competitive amount, up from 22.9% in last week's three-month bill auction.

The high rate was up from 3.820% at the previous three-month bill auction.

The high rate was the highest since the rate of 4.050% at the three-month bill auction on Sept. 17.

The issue is dated Oct. 4 and matures on Jan. 3, 2008.

The CUSIP number on the three-month bill is 912795B91.

Keene Little : 10/1/2007 1:50:24 PM

The banks (BIX) got a big spike up today and looks like a classic c-wave in the A-B-C bounce from the low put in on Sept 25th where wave-C = 162% of wave-A at 366.88 which was just tagged. From an EW and Fibonacci perspective this could be it for the banks and the next big move will be down. Link

Jane Fox : 10/1/2007 1:47:18 PM

I suspect the RUT will not break this resistance by much this week and that we will see it (and the other markets as well) retrace or at best consolidate. At least I think that is the healthiest scenario if you want to see this bullishness continue. Link

Keene Little : 10/1/2007 1:44:55 PM

It will also be interesting to see if the 20-dma of the advancing-decling volume for the NYSE continues to show bearish divergence even as it pushes for at least a test of its July high: Link

Keene Little : 10/1/2007 1:41:24 PM

Linda has been keeping us apprised on the TRAN's rally and the reason it's important to keep an eye on this index is because it's not participating in the bull-fest. A rally without the Trannies is like, well, you know, not good: Link

We have the makings of a DOW Theory non-confirmation in progress here--a new high for the DOW clearly not matched by one for the Transports is bearish. Many will say it's different this time and all I can say is believe that one at your own risk.

Jeff Bailey : 10/1/2007 1:38:09 PM

Dow 30 Components (Price Weighted Index) at this Link

Linda Piazza : 10/1/2007 1:31:38 PM

No further repos have been made today, so that leaves a net draw of $4.500 billion. It's certainly not in the caliber of the +$15.000 billion we had one day about a week ago. Still, it seems that we've had a lot of net-drain days lately. I may be so off the mark that the idea is just silly, but I keep wondering if there's not some effort being made to prop up the dollar or at least not contribute to a further slide.

Jane Fox : 10/1/2007 1:30:59 PM

The VIX is not making new daily highs as the AD volume is climbing telling me the rally is getting weaker. Also the USDJPY currency pair is not bullish either. Link

Jeff Bailey : 10/1/2007 1:29:08 PM

Dow Diamonds (DIA) $140.53 +1.16% ... Daily interval bar chart with October's MONTHLY Pivot retracement at this Link

Also observing action after break above recent doji's.

Jeff Bailey : 10/1/2007 1:26:51 PM

Dow Diamonds (DIA) alert! $140.50 +1.14% ... new all-time high. Overhead supply should be limited.

Linda Piazza : 10/1/2007 1:23:50 PM

There goes the TRAN, pushing higher. So far, then, we know that 4861-4863 former resistance held on a first test. If the TRAN can maintain this push on 15-minute closes (be a little wary because this is a typical stop-running time of day) then it sets an upside target near 4969, but it's going to slam into some resistance on the daily chart first, so be careful about assumptions.

Keene Little : 10/1/2007 1:22:54 PM

There is one upside pattern I'm eyeing that calls for two equal legs up off the low on Sept 25th. That would have SPX rallying to 1546.44 which coincides with the mid line of its parallel up-channel from the August low. So keep an eye on that level for a potential high.

Keene Little : 10/1/2007 1:20:24 PM

We start the day off with huge warnings from C and USB. Here we are 4 hours into the trading day and the banking index (BIX) is up almost 7 points and Citigroup is having the largest single-day rally since the moon shot on Sept 18th. Isn't it painfully obvious to everyone what's going on here?

Yes John, it is. But "don't fight the Fed" has a whole new meaning now. They can't do it forever but clearly it's dangerous fighting the manipulation when there's a lot of money behind it. Go with the flow and try to determine when the move is waning. We'll try to trade this in short term moves and let the larger pattern sort itself out.

Jeff Bailey : 10/1/2007 1:13:15 PM

01:00 Internals found at this Link

Keene Little : 10/1/2007 1:12:46 PM

The move up from Friday afternoon has now morphed into a larger move needing another leg up to complete a 5th wave. Internal Fib projections for the move up now coincide at 1550-1551. That would be the area I'd watch for a short play to set up. In the meantime I'd look to buy the current consolidation for a scalp long up to that level (at least that's the upside potential for measuring your risk:reward).

Linda Piazza : 10/1/2007 1:12:00 PM

The TRAN hasn't yet convincingly broken out above black-channel resistance as shown in the chart linked to my 12:27 post, but it's continuing to test it. Meanwhile, the Dow continues to test the widest Keltner channel's resistance as shown in a chart linked to that same post. Dow bulls would hopefully like to see the TRAN break through, to perhaps give more impetus to the Dow's attempt to break through. As I've said in several posts, the TRAN's relative underperformance by this measure hasn't made a bit of difference yet, but I sure would be keeping this on the radar screen, at least.

Jeff Bailey : 10/1/2007 1:05:32 PM

NYSE NH Alert! ... 213 NH at the big board exceeding the 210 from 9/19/07 (210:61).

Jeff Bailey : 10/1/2007 1:03:04 PM

01:00 Market Watch found at this Link

Keene Little : 10/1/2007 12:41:36 PM

An observation from Marc:

QQQQ 51.94 is the May 2001 high and corresponds within 2 points of weekly R1 for NQ. This is a short. Marc

Jeff Bailey : 10/1/2007 12:28:40 PM

AMR TO PREPAY $545M IN AIRCRAFT DEBT IN 4Q

DJ- AMR's American Airlines unit plans to prepay $545 million in aircraft debt in 4Q to strengthen its balance sheet. The prepayment should eliminate about $25 million of annual net interest expense and release 16 aircraft used to secure the loan.

AMR $23.24 +4.26% ...

Linda Piazza : 10/1/2007 12:27:54 PM

Here's an updated version of the 30-minute TRAN Keltner chart that I posted earlier today, showing that the TRAN is rising into that Keltner resistance that turned it back earlier. Link

Here's a Dow chart on the same interval, showing what I mean when I say that the TRAN is underperforming her sister index. Link The Dow has not only broken out above black-channel resistance; it's hit and slightly exceeded its upside Keltner target and potential next resistance on 30-minute closes. It hasn't made a bit of difference yet, and at least the TRAN is generally going in the same direction as the SPX, OEX and Dow, but I don't like it when the TRAN is dragged along and isn't in its usual leadership role.

Jane Fox : 10/1/2007 12:25:42 PM

Well actually I need to backtrack on that last statement because the jtHMA charts did give us a great big fat intermediate term buy last week. Link

Jane Fox : 10/1/2007 12:24:27 PM

Bullishness is breaking out all over buuuuttttt please remember the pullback we had around September 25th was very shallow and we need a deeper pullback before these rallies will have follow-through. This is not a time to be short but a time to be thinking of buying the dips and the last dip did not give us a very good buying opportunity.

Jane Fox : 10/1/2007 12:22:04 PM

DOW to new all time new highs.

Jeff Bailey : 10/1/2007 12:19:03 PM

WALGREEN SHARES DROP ON 4Q MISS

DJ- Shares slide 13% as drugstore operator's 4Q net income falls to $396.5 million, or 40c a share, while revenue rises 10% to $13.42 billion and same-store sales grow 6.3%. Analysts expected EPS of 47c on revenue of $13.54 billion.

WAG $40.31 -14.66% ...

Jeff Bailey : 10/1/2007 12:17:54 PM

WAL-MART KICKS OFF HOLIDAY PRICE WARS

DJ- Wal-Mart Stores throws down the gauntlet 12 weeks before Christmas by cutting prices 10% to 50% on its "Top 12 Toys of Christmas," and signals that more reductions are coming.

WMT $44.25 +1.37% ...

Jeff Bailey : 10/1/2007 12:16:40 PM

HOME-BUILDER STOCKS RISE ON CITI UPGRADE

DJ- Home-builder stocks rise after a Citigroup analyst raises his ratings on several companies on signs the worst may be behind the industry. Centex, D.R. Horton, Lennar, Pulte Homes and Ryland Group are upgraded to buy from hold.

CTX $27.67 +4.06%
DHI $13.18 +2.88%
LEN $23.17 +2.29%
PHM $14.27 +4.77%
RYL $22.12 +3.21%

Jeff Bailey : 10/1/2007 12:13:56 PM

EBAY TO TAKE $1.4B IN CHARGES ON SKYPE

DJ- EBay will take $1.4 billion in Skype-related charges in 3Q. Skype CEO Niklas Zennstrom steps down and will be replaced by Michael van Swaaij, eBay's chief strategy officer.

EBAY $39.23 +0.53% ...

Jeff Bailey : 10/1/2007 12:12:50 PM

US ISM SHOWS FACTORY GROWTH CONTINUES

DJ- Institute for Supply Management's manufacturing index moves to 52.0 in September, from 52.9 in August and 53.8 in July. Numbers over 50 indicate growth, and September's reading had been expected to come in at 53.0.

Keene Little : 10/1/2007 12:12:04 PM

A similar price projection for the DOW for the leg up from Sept 10th (where the 1st and 5th waves would be equal) is at 14144. So there's clearly some more upside potential here. The only question after this move up is whether it will be the end of the bounce off the Sept 10th low (dark red count) or just the 3rd wave up for that move with the expectation of a larger 4th wave correction into the middle/latter part of October and then a 5th wave higher after that (pink count). Link

This year has been the year of the opposites where the market has either rallied or declined at the "wrong" time of year when compared to previous calendar patterns. Are we setting up for a market high in October when normally we see market lows? Does make one wonder.

Keene Little : 10/1/2007 11:56:46 AM

And now with the push higher, the SPX daily chart shows that it's very likely we'll see at least the first upside Fib target at 1548 get tagged (where the move up from the August low would have two equal legs up). Further upside potential is to 1557 where the 1st and 5th waves of the move up from Sept 10th would be equal. Link

Jeff Bailey : 10/1/2007 11:54:33 AM

Dow Industrials (INDU) alert! 14,025 +0.93% .... All-tim high. Overhead supply should be limited.

Keene Little : 10/1/2007 11:53:51 AM

The good news for bulls is that the RUT is participating today. As shown on its daily chart, the EW pattern points to the possibility for it to rally up to at least 825 if not 835: Link

Linda Piazza : 10/1/2007 11:47:59 AM

So far, that 4861-4863 zone that was resistance the end of the week last week for the TRAN has held as support, which is what Dow, OEX and SPX bulls want to see. However, I wouldn't be surprised to see it tested again. Unless the TRAN can soon maintain 15-minute closes above 4874 or so, I would even say that it's likely it will be retested. The TRAN is rising now and is at 4868.40, perhaps about to retest that 4874 level.

Jeff Bailey : 10/1/2007 11:47:52 AM

S&P 100 (OEX.X) alert! 721.08 +0.92% ... new 52-week and multi-year high. Overhead supply should be limited.

Jane Fox : 10/1/2007 11:40:37 AM

This is a perfect place for the DOW to take a breather and retrace but once it does you can be rest assured all the nay sayers are going to out in full force saying this is a double top and the end is near. Don't believe them folks, it will be a breather and the DOW will see new yearly highs yet this year. Link

Jane Fox : 10/1/2007 11:36:31 AM

Dow has hit a high of 14016 and all time highs are 14021.

Jane Fox : 10/1/2007 11:36:07 AM

All you need is the AD volume and VIX to be in sync and they are. Link

Keene Little : 10/1/2007 11:36:09 AM

Actually, with the glaring negative divergences at new price highs, or retests of previous highs, I can't recommend buying dips. Once this silly rally (for what?) ends it could be a swift decline and buying dips could be painful. It's clearly too early to short the market but as shown on the NDX 60-min chart update here, a rally up to about 2110 could finish this off. Link

Linda Piazza : 10/1/2007 11:20:00 AM

At 115.74, the USDJPY is rising up to test the 15-minute 9-ema again, with that at about 115.75. We'll see if it can break through to the upside this time.

Jeff Bailey : 10/1/2007 11:17:46 AM

11:00 Internals found at this Link

Keene Little : 10/1/2007 11:17:10 AM

Consolidating near the highs is bullish. Continue to buy these consolidations/pullbacks until we see a trend change.

Jeff Bailey : 10/1/2007 11:12:55 AM

Intercontinental Exchange (ICE) $154.22 +1.52% ...

Jeff Bailey : 10/1/2007 11:12:08 AM

CME Group (CME) $605.40 +3.09% ... challenges its all-time high close

Linda Piazza : 10/1/2007 11:07:21 AM

I linked a TRAN intraday Keltner chart to my 10:30:02 post. The annotations on that chart showed that the TRAN was testing upper Keltner resistance but that a breakout didn't look likely at that time. Since then, the TRAN has pulled back from that Keltner resistance. It's now dropping again toward last week's former resistance in the 4861-4863 zone, with the TRAN at 4865.10 as I type. Bulls in the SPX, OEX and Dow want that 4861-4863 zone to hold as support now, or, failing that, for the 9-ema near 4857 to hold on 30-minute closes.

Jeff Bailey : 10/1/2007 11:02:33 AM

11:00 Market Watch found at this Link

Linda Piazza : 10/1/2007 10:50:46 AM

An interesting look at the Dow today on an intraday Keltner basis, on a 15-minute chart, says that the Dow hasn't yet broken out. It's trying again, though: Link

Linda Piazza : 10/1/2007 10:48:20 AM

USDJPY so far can't maintain levels above its 9-ema. The USDJPY is at 115.76 as I type. It's still maintaining its rising channel off Friday's low, so it's not a big deal yet, but movements are becoming more volatile, not a particularly good sign after an entity has pushed past resistance.

Linda Piazza : 10/1/2007 10:36:39 AM

USDJPY now at 115.80, having dropped back to Keltner support now at 115.77 on the 15-minute chart. It's now facing the 9-ema and equity bulls want to see it push back above and maintain levels above that 9-ema just a little above the current 115.80 level.

Linda Piazza : 10/1/2007 10:30:02 AM

The TRAN on an intraday chart: Link

Jeff Bailey : 10/1/2007 10:24:42 AM

Altria (MO) $69.85 +0.47% ...

Jeff Bailey : 10/1/2007 10:24:17 AM

Tobacco Cos. Lose High Court Appeal Over Fla. Smoker Suit

Jeff Bailey : 10/1/2007 10:23:39 AM

Bank Of Canada Injects C$530M Into Financial System Monday

Linda Piazza : 10/1/2007 10:19:46 AM

The TRAN is rising toward massed moving average and historical resistance on its daily chart. If the TRAN keeps rising--and SPX, OEX and Dow bulls want it to do so--watch particularly from 4922.21 (200-ema) to 4937.51 (72-ema), with that zone marking averages that have been important to the TRAN, and then of course 4969.55, the 200-sma. Until there's a TRAN close above the 200-sma, there hasn't been an upside breakout on this index that is still far, far from achieving its early summer high of 5487.05. It's of some concern that this crude- and economy-sensitive sister index of the Dow is lagging the Dow's performance in this manner, and bulls would prefer it to play some quick catch up.

Keene Little : 10/1/2007 10:18:43 AM

So the agenda to get the DOW back to 14K has been achieved, and in short order and on bad news. What's next?

Jane Fox : 10/1/2007 10:12:54 AM

Dow is now at 14007 and yearly highs are sitting at 14021.

Linda Piazza : 10/1/2007 10:12:02 AM

RUT pushing right toward that potential upside Keltner target, with that at 818.28 as I type. The MID has already broken above its congruent Keltner target, perhaps suggesting strong upside momentum, but the 15-minute period hasn't even ended, so we don't know what will happen by the end of the period. The RUT is at 816.86.

Linda Piazza : 10/1/2007 10:09:37 AM

The USDJPY staged an impressive rise off Friday's lows during overnight trading. Japan had an important economic number last night and that probably prompted a big currency move. However, the USDJPY has moved down sharply from its just-reached 116.01 high, to 115.84 as I type, after the ISM. So far, it maintains its rally off Friday's lows as well as maintaining a potential 116.14 short-term upside target, but watch this carefully.

Keene Little : 10/1/2007 10:07:42 AM

We now have a small 5-wave up from Friday afternoon so we can expect a larger pullback. Attempting a scalp short play from here could work.

Linda Piazza : 10/1/2007 10:07:00 AM

Keltner channels suggest that the RUT may be running into potential resistance near 814.35 on 15-minute closes, but resistance near the current 813.96 level should be no surprise with or without Keltners. Friday's high was 815.45. If the RUT can maintain 15-minute closes above that Keltner resistance, next Keltner resistance and the potential target would be 818.12, but it's still just facing that resistance as of yet.

Jeff Bailey : 10/1/2007 10:03:34 AM

10:00 Market Watch found at this Link

Jeff Bailey : 10/1/2007 10:00:52 AM

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

Jane Fox : 10/1/2007 9:57:57 AM

Just got an email from a subscriber mentioning that the TRIN is now over 1. With the bullishness you are seeing this morning you would expect to see the TRIN under 1 but unfortunately this is a case of when I cannot read the TRIN and one of the reasons I quit watching it. If it makes new daily highs that is bearish but it seems to gyrating around 1 now.

Linda Piazza : 10/1/2007 9:54:42 AM

So far, the Fed has announced repos in the amount of $7.250 billion, leaving a net drain of $4.500 billion.

Linda Piazza : 10/1/2007 9:54:12 AM

Remember the ISM in a few minutes, at 10:00 EST.

Keene Little : 10/1/2007 9:52:33 AM

The move up from Friday afternoon could now use a little consolidation and then another push higher so don't be tempted to short this yet. Then it will set up a scalp short play but the larger pattern now supports a continuation higher so a larger pullback later could be a buying opportunity.

Jane Fox : 10/1/2007 9:51:17 AM

It will be interesting to see if Crude finds support at the double bottom it made at $79.00/bl. Link

Jeff Bailey : 10/1/2007 9:50:52 AM

Nokia To Buy Navteq For $8.1 Billion ... AP Story Link

Jeff Bailey : 10/1/2007 9:50:08 AM

Acxiom Buyout Deal Falls Through ... AP Story Link

Jane Fox : 10/1/2007 9:47:58 AM

Internals are supporting all this bullishness.

Keene Little : 10/1/2007 9:47:52 AM

Friday's pullback has clearly been left as a corrective 3-wave move and now we're back in rally mode. I'm not sure what there is to rally about but clearly don't argue with price or a market with an agenda.

Jane Fox : 10/1/2007 9:47:00 AM

The DOW has a very good chance of tagging its all time highs this week at 14021. Link

Jane Fox : 10/1/2007 9:45:48 AM

I expected SPX to pullback more than it has and I think a deeper pullback would have given it a better chance of follow-through when/if it does break resistance.

Jane Fox : 10/1/2007 9:43:50 AM

There is a very good chance the SPX will break its resistance at 1540 this week. Heck, it has a good chance of breaking this resistance today. Link

Keene Little : 10/1/2007 9:41:59 AM

I guess bank failures and rotten earnings must be bullish. Strange market. SPX is coming up to its broken uptrend line from Sept 10th which coincides with its new downtrend line from Sept 18th near 1532.80 so watch for a potential failed retest and kiss goodbye.

Jane Fox : 10/1/2007 9:37:52 AM

AD line is climbing and now +853

Jane Fox : 10/1/2007 9:36:21 AM

AD line is sort of bullish +462.

Keene Little : 10/1/2007 9:30:53 AM

With the negative earnings news from UBS and Citigroup, and the failure of Netbank as Linda mentioned, you would think the equity futures would be down at least some. Stock traders remain in lala land as they spin everything bullish. That will change but we of course don't know when. Last week's prop up in the market may get reversed so be careful of any initial bounce.

Jeff Bailey : 10/1/2007 9:27:10 AM

General Electric (GE) ... seeing 6.2 million shares crossed in pre-market. $41.40.

Jeff Bailey : 10/1/2007 9:24:40 AM

Citigroup Expects Substantial Decline in 3Q Net Income ... Press Release Link

Jane Fox : 10/1/2007 9:19:31 AM

LONDON (MarketWatch) -- UBS will take a third-quarter write-down totaling 4 billion Swiss francs ($3.4 billion) tied to its subprime mortgage exposure and plans sweeping management changes and job cuts in its investment-banking division, the Swiss banking giant said Monday.

The company (UBS) estimated that it would report a quarterly pretax loss -- its first in nine years -- of 600 million francs to 800 million francs, compared with a profit of 2.2 billion francs generated in the year-earlier period.

UBS, the world's largest wealth manager, is the first major bank to see its bottom-line move into the red following the subprime crisis, though others have reported significant write-downs.

Jane Fox : 10/1/2007 9:17:06 AM

NEW YORK (MarketWatch) -- Crude-oil futures dropped early Monday, extending their sharp losses from the previous session.

Crude oil for November delivery fell 23 cents to $81.43 a barrel in electronic trading on the New York Mercantile Exchange.

"Markets were quiet, following Friday's fierce fund activity on both sides of the market, as Friday marked the end of the quarter and the end of the year for many hedge funds," said analysts at Action Economics.

Jane Fox : 10/1/2007 9:11:57 AM

US$ is in a rally mode and Gold is sinking so these two seem to be back in sync. Of course Crude falling is also helping Gold's decline.

The DAX made a higher low overnight matching the S&P and NDX futures overnight markets and not the DOW's. The DAX usually trades in sync with the DOW. Link

Jane Fox : 10/1/2007 8:57:35 AM

About 3:00ET the markets all made new lower overnight lows but by 6:30 ET they were all making new overnight highs then the DOW and Russell 2000 futures both revisited their ON lows and made a double bottom. The Russell 2000 double bottom at it ON low just happened to be its previous day low as well. Link

Jane Fox : 10/1/2007 8:48:52 AM

NEW YORK (MarketWatch) -- Citigroup Inc said Monday it expects third-quarter profit to fall 60% from last year after huge write-downs for unsold debt it issued to finance corporate takeovers and big losses on the value of subprime mortgage-backed securities.

The New York financial-services giant (C) blamed "dislocations in the mortgage-backed-securities and credit markets, and deterioration in the consumer-credit environment."

Last year, Citi reported third-quarter net income of $5.51 billion, or $1.10 a share.

Citigroup said Monday it would report its third quarter results on Oct. 15.

The decline "was driven primarily by weak performance in fixed-income credit-market activities, write-downs in leveraged loan commitments, and increases in consumer-credit costs," Chairman and Chief Executive Charles Prince said in a statement.

Linda Piazza : 10/1/2007 8:47:28 AM

Here's an example of the difference in coverage we see in our financial press and our version of CNBC and the financial press in Europe and the U.K. and the CNBC Europe version: CNBC Europe and The London Times covered in some depth the shutting down of Netbank (NTBK) on Friday by U.S. regulators. According to both those sources, this is the largest collapse of an American bank in 14 years.

Have you heard much about it this morning? I didn't think so, unless you happen to be one of this innovative Internet bank's depositors. It was in the news in Europe because high levels of mortgage-related losses led to the action taken by the Office of Thrift Supervision. ING has agreed to assume $1.5 billion of the insured deposits, but about $109 million in 1,500 deposit accounts exceeded the FDIC insured limit of $100,000. Those customers will join other creditors duking it out for some return on their money.

Linda Piazza : 10/1/2007 8:15:27 AM

Today, $11.750 billion in repos mature. I'll let you know when and if the Federal Reserve Bank makes any repos today through its temporary open market operations at the Federal Reserve Bank of NY, with the typical time for an announcement being 9:40 EST.

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