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Jeff Bailey : 10/27/2007 1:02:10 AM

When the "Hindenburg" lands, might need a stun gun. Hmmmm... might need a Ruger or a S&W too?

Protect all that gold and oil.

Jeff Bailey : 10/27/2007 12:57:43 AM

Taser Intl. (TASR) $16.65 -0.77% Link ... good looking quarter just reported Link . Possible BULLISH triangle on reversal back up and trade at $18.50. Trade at $19.50 would be spread triple top buy signal. Powerful patterns with no overhead supply.

Jeff Bailey : 10/27/2007 12:48:20 AM

Smith & Wesson (SWHC) $20.75 -2.26% Link ... snug up a stop if long at $18.

Sturm Ruger (RGR) $10.58 -0.65% Link faced the firing squad on Thursday. Link

Jeff Bailey : 10/26/2007 11:26:46 PM

Countrywide (CFC) $17.30 +32.36% Link ... Today's trade at $16.50 negates the previous bearish vertical count to $8.00.

The "apex" of the recently triggered bearish triangle at $17.00 (MINIMUM of 5 columns of alternating O and X with lower higher and higher low, break to downside) is at $19.00, and a move much above there could begin to suggest some subprime woes are abating.

Purdue University study of PnF patterns found that in a "bear phase market," that pattern is profitable for a bear 87.5% of the time with an average gain of 33.3% in just 2.5 months. It is the most powerful/profitable patterns for the bearish trader.

Do you see another "bearish triangle" pattern in CFC?

Hint: Looooong column of O's from $41 to $24, then X to $29, then O to $25, then X to 28, then BEARISH TRIANGLE sell signal at $24 to $15.

See MM on 08/14 and 08/16, then 08/15 too.

Jeff Bailey : 10/26/2007 10:55:11 PM

StreetTracks Gold (GLD) $0.40-box to approximate futures Link

Jeff Bailey : 10/26/2007 10:53:30 PM

Weekly/Monthly Pivot Matrix and some correlations at this Link

Sunday evening we'll probably get a "first read" on things with the US Dollar Index (DXY) and I've been noting MONTHLY S1 the last couple of weeks. It's there with WEEKLY S1/MONTHLY S1 correlation. Gold bulls have been calling for another test of $800 and I'd have to think any further gravitation lower in the DXY gets the commodity to the $800 level. Today's trade at $780 for December Gold (gc07z) did see a reversing higher PnF buy signal ($4 box).

If Keene's "Hindenburg" scenario is to play out, the the DXY further below MONTHLY S1 could be the catalyst.

BIX's WEEKLY S1/MONTHLY S2 considered tentative support as BIX showed ability this week (low 320.62) to violate that. WEEKLY R1/MONTHLY S1 would be level of near-term resistance. Possible signal of near-term short squeeze above there (say 347).

SPX/SPY WEEKLY S1/MONTHLY Pivot also rather tentative, but watch it if tested. If BIX are bidding, then 1,500/$150 should hold support. No longer as certain we see SPX 1,600 by Wednesday, but WEEKLY R2/MONTHLY R1 potential.

SMH has been sucking wind. First sign of any recovery is MONTHLY S2, then likely strong resistance at MONTHLY S1/WEEKLY R2 correlation.

NDX/QQQQ close above MONTHLY R1. BIG cap tech has done its part, time for others to either join in, or pull NDX/QQQQ lower on profit taking.

OI Technical Staff : 10/26/2007 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 : 10/26/2007 9:55:28 PM

Last 2 and next week's WEEKLY Pivot Levels at this Link

Jeff Bailey : 10/26/2007 9:26:27 PM

Trade Blotter of CLOSED MM Profiles that I've made so far this month at this Link

Traded the YM (mini-Dow) 7 times this week. When I've got some free time here in the MM, I only trade the YM. Just 30 stocks and more "predictive."

7 trades. 6 wins (+118), 1 loss (-21). Risked 3, Rewarded 16.

Jeff Bailey : 10/26/2007 8:01:29 PM

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

Closed out the WM-XF at the bid of $3.20 as WM traded $28.10.

PTR-WL are $0.05 x $0.40.
MO-LN are $4.20 x $4.30
IHH-WJ are $0.90 x $1.00
MFE-MH are $2.80 x $2.95
XLF-KG are $1.28 x $1.40.

Jeff Bailey : 10/26/2007 7:39:18 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/26/2007 5:37:55 PM

Wow! ... 259 new highs at the big board? Is that right? Link

Jeff Bailey : 10/26/2007 5:04:58 PM

MACD Educational: ... from my good friends at StockCharts.com Link

Jeff Bailey : 10/26/2007 5:04:55 PM

MACD Setting: Educational Piece using Exponential Moving Averages (places more "weight" on current time intervals) Link

Jeff Bailey : 10/26/2007 5:04:49 PM

MACD Settings ... Use 12,26,9 if you utilze 21-pd, 50-pd and 200-pd SMA (Simple Moving Average).

I say this after YEARS and YEARS of messing with this indicator.

For my historgram, I use the color RED as WEAK, Pink as MODESTLY WEAK, BLUE as MODESTLY STRONG, GREEN as STRONG.

I only use MACD as a "last resort" when a trade looks 50/50. If MACD is looking WEAK, or MODESTLY WEAK, then I might lean to the sell side. If MACD is looking STRONG, or MODESTLY strong, then I might lean to the buy side.

Jeff Bailey : 10/26/2007 4:37:34 PM

XLF-KG ... This morning's first tick was $1.40, so $33.00 +1.40 = $34.40 may be a level to look for next week.

Keene Little : 10/26/2007 4:37:08 PM

Something to think about over the weekend as you plan your year-end strategy following October--in last weekend's Market Wrap I had discussed a technical market signal called the Hindenburg Omen. A confirmed signal is when two HO's occur within 36 days and within the last two weeks we've had 5 signals so it's definitely been confirmed. This signal is a warning for a coming steep market correction, possibly a crash. It doesn't always work but no crash has occurred since 1985 without first getting one of these signals.

And don't forget we're in year 7 of the decennial pattern in which a market crash (or panic selloff) has occurred, especially when year 6 experienced a rally in the 4th year of a bull market. Will we get through the month of October in good shape and then have most participants let their guard down? The market rarely does what most are expecting or waiting for and a lot of people were waiting for a market correction/crash this month. It could sneak up on us in November when most are expecting a year-end rally. Just a thought...

And with that I hope everyone has a great weekend. See you Monday.

Jeff Bailey : 10/26/2007 4:17:00 PM

BIDU.com (BIDU) finished $353.39 +5.71% ...

Trident Micro (TRID) finished $7.15 -41.44% ...

Countrywide (CFC) finished $17.30 +32.36 ...

Washington Mutual (WM) finished $28.58 +4.68% ...

Select Financial SPDRs (XLF) finished $33.70 +2.43% ...

YM ticking 13,847 ...

Wow! What a day.

Keene Little : 10/26/2007 4:15:25 PM

I would appreciate suggestions for setting the parameters for MACD. Thanks

Depending on your trading time frame I suggest playing with lots of different settings on your oscillators. If the settings are too low then you can end up with a lot of false signals (especially if you like to play reversals in the indicators and crossovers in MACD for example). If the settings are too long, smoothing out the changes, you'll miss a good portion of the initial move (similar to playing moving average crosses).

Personally I like (8,13,5) for MACD (notice those are Fib numbers) which is a lot faster than the default (12,26,9) because I tend to use this indicator primarily for divergence and not for overbought/oversold or crossovers. So I wanted a closer match with the price peaks and valleys. Same with stochastics--I like (5(3),3) vs. default (14(3),3) and for RSI I use 10 vs. the standard 14.

But definitely play around with the settings for the way YOU like to trade and then step a chart through to see if it would have provided the kinds of signals you could have used for setting up your trades.

Jeff Bailey : 10/26/2007 4:08:57 PM

YM Long exit/target alert! 13,850

Keene Little : 10/26/2007 4:07:40 PM

One thing to consider before you put on a trade is what is your reward vs. your risk is for the trade. Typically professional traders like to use at least 3:1 if not 4:1 so that they will grow their equity account over time even with a win ratio of only 60%. Something to consider as you look at upside potential when you want to put on a trade.

Linda Piazza : 10/26/2007 4:02:23 PM

I don't know about the rest of you, but it's been a frustrating few days for me, as I kept seeing setup after setup that was soon reversed as markets headed the other direction. Nothing was trustworthy, so I didn't trust the final bullish setups, either.

I'm going to enjoy having a couple of days away from the markets and hope fellow writers and subscribers do, too.

Jeff Bailey : 10/26/2007 4:01:36 PM

YM long raise stop alert! to break even.

YM 13,843.

Jeff Bailey : 10/26/2007 3:59:58 PM

YM Long alert! here at 13,835. VERY tight stop at 13,826. Target 13,850.

Keene Little : 10/26/2007 3:57:04 PM

Monday we'll see how the potential rising wedge idea shown on the DOW chart plays out (or not). A continuation of the rally on Monday will break the wedge in which case I'll start looking for a run up to the top of a parallel up-channel. A pullback will have me looking for support at the bottom of the wedge, currently near 13700: Link

Jane Fox : 10/26/2007 3:55:32 PM

Monday we have a few reports on the docket.

10:30a.m. Oct Dallas Fed Mfg Production Index. Previous: 4.5.

12:00a.m. Chicago Fed Midwest Mfg Index. Previous: -0.3%.

Jane Fox : 10/26/2007 3:54:41 PM

I think the bulls just told us who is back in control. Link

Linda Piazza : 10/26/2007 3:53:01 PM

No change in tenor as the market-on-close orders were seen about ten minutes ago. Time to make decisions about whether you want to hold over the weekend, with next week starting Fed watch ahead of the FOMC decision mid-week.

Jeff Bailey : 10/26/2007 3:43:17 PM

YM Long exit alert! 13,839

Jeff Bailey : 10/26/2007 3:41:25 PM

YM long raise stop alert! to break even.

YM 13,835 ...

Linda Piazza : 10/26/2007 3:38:32 PM

The TRAN is climbing again, moving back toward the day's high of 4873.19, with the TRAN at 4859.69 as I type. That previous HOD is potential resistance, of course. Keltner resistance, which the TRAN sometimes does heed and sometimes drives right through, is at 4868.94-4875.68.

Jeff Bailey : 10/26/2007 3:36:58 PM

YM Long alert! ... here at 13,820. Very tight stop at 13,807. Target 13,848.

Keene Little : 10/26/2007 3:30:26 PM

The bounce in CFC reached a 62% retracement of its most recent leg down (at 17.30) and I see upside risk for shorts to 18.65--the apex of the recent sideways triangle. I'm thinking today's bounce is a 2nd wave correction in the move down that should take it below $8: Link

Typically these 2nd wave corrections take more time than just one day like this so we could see a quick dip and then another bounce to finish the correction. Any rally back above 18.65 would be a strong indication CFC has already put in its bottom. Until then I think this bounce is a gift to the bears. Nothing has changed in the mortgage arena and in fact it's going to get worse before it gets better (and take longer than 6 months which is about as far out as the stock market likes to play it).

Linda Piazza : 10/26/2007 3:24:56 PM

SPX daily 10-sma is at 1525.50. Bulls don't want to see the SPX close the day at or below that moving average, leaving a long upper shadow on the day's candle, but instead want to see it close well above it, near the high of the day.

Linda Piazza : 10/26/2007 3:21:36 PM

The SPX, at 1530.29, is testing its 15-minute 9-ema.

Jeff Bailey : 10/26/2007 3:19:25 PM

Looks to me as though we might have as many "bottom callers" in the housing/mortgage area as we do "top callers" in gold, oil, commodities. (wink)

Jeff Bailey : 10/26/2007 3:18:13 PM

CFC $17.01 +30.06% ... closed $15.05 on 10/23/07.

Has anything "changed?"

Jeff Bailey : 10/26/2007 3:16:17 PM

Washington Mutual (WM) $28.52 +4.46% ... "know where we are." 10/23/07 entry point.

Keene Little : 10/26/2007 3:09:08 PM

This NDX daily chart is updated from the one I had in Wednesday's Wrap and shows a couple of possibilities to watch for from here (it makes the chart a little busy looking at the highs here): Link

The most immediately bearish is the dark red count which calls the high at Wednesday's open as THE high and the current bounce will be followed by a strong decline that breaks quickly below the key level of 2117. This one would obviously be negated with a new high above 2205.

Similar to what I've been showing on the DOW 60-min chart, we could see a choppy rally in a rising wedge (to put in a final top for NDX while the others correct their recent declines) into the beginning of November before finding a high, shown in green.

In the middle is the pink price depiction that also has THE high as Wednesday morning's high but it will chop sideways in a contracting triangle before it suddenly lets go to the downside. That price action would complete the diamond top pattern as depicted. Diamond tops are notoriously difficult to trade as they whipsaw both sides. Have you seen a little bit of that lately?

The current choppy price action makes it impossible to figure out which will play out from here and we just need price to lead the way and provide some answers. Only then will we be able to set up a trade for the higher-odds outcome. Keep your powder dry in the meantime.

Linda Piazza : 10/26/2007 3:08:47 PM

SPX 15-minute 9-ema now at 1530.51. The OEX's is 715.04, with further support just below that.

Linda Piazza : 10/26/2007 2:58:38 PM

The OEX's 15-minute 9-ema is at 714.91 with other support just below that.

Jeff Bailey : 10/26/2007 2:58:16 PM

Select Financial SPDRs (XLF) ... 60-minute interval chart Link

Linda Piazza : 10/26/2007 2:58:08 PM

The SPX's 15-minute 9-ema is at 1530.15. Bulls want to see the SPX continue closing 15-minute periods above this average. Bears want it back below that, and preferably below the 10-sma by the end of the day.

Linda Piazza : 10/26/2007 2:51:11 PM

The bond market is about to close in a few minutes. Sometimes the tenor of trading changes after the close of the bond market. Usually when the markets have held onto gains this late in the day, they continue to do so, but not always, and I just don't like the way this "breakout" is acting, at least not on the TRAN.

Jeff Bailey : 10/26/2007 2:47:08 PM

SPY/SPX and RUT/IWM traders will be looking back over their shoulders to see what the financial are doing. Can they also close the WEEKLY Pivot?

Jeff Bailey : 10/26/2007 2:45:19 PM

Financial Select SPDRs (XLF) alert! ... comes to WEEKLY Pivot $33.59 +2.06% ...

Jeff Bailey : 10/26/2007 2:44:41 PM

I tend to agree with Jimmy C's thoughts (CNBC) ... shorts will come in hard to cover financials into next week's Fed.

Keene Little : 10/26/2007 2:39:12 PM

I continue to watch the bond market (yields) to see what message we can glean from those traders. While yields have bounced off the Wednesday low it's a feeble bounce and hasn't amounted to much of anything. At this point I would say the bond market is Not in agreement with gold bugs about the inflation problem. I would think if bond holders were worried about inflation to the extent that gold bugs are trying to tell us then they'd be demanding a higher rate of return and bonds would be selling off as gold rallies.

Without this confirmation from the bond market, along with the negative divergences on gold as it makes new highs, I continue to believe we're getting more of a blow-off top in gold (it's more of an emotional market than the bond market). The risk of course, in shorting gold, is getting cut badly while trying to stop those rising knives. I'm trading light in my attempts to short this market and when it starts working I'll then add to my short position. The drop in gold should be quite fast.

Linda Piazza : 10/26/2007 2:32:05 PM

Not good. The TRAN has pulled all the way back to the 15-minute 120-ema and that triangle's top trendline. If it bounces strongly from here, that's okay and it was just retesting former resistance. If it falls any distance from the current 4846.28, this is a failed breakout attempt. I tell you: I just don't trust anything today.

Keene Little : 10/26/2007 2:24:57 PM

The top of the parallel up-channel for SPX that I showed this morning is now near 1540. Keep an eye on the uptrend line from yesterday afternoon and the top of this channel as a short play could set up at the top of the channel or on a break down below the uptrend line, currently near 1529. Bulls are in control here so I'd want to see bearish divergences (starting to appear on MACD) at the top of the channel before stepping in front of the rally. Link

Jeff Bailey : 10/26/2007 2:21:31 PM

Selling pressure intra-day looks to be drying up.

YM 13,831

CFC $17.10

WM $28.99

TRID $7.26

XLF $33.47 +1.73% ...

Jeff Bailey : 10/26/2007 2:19:25 PM

TRID $7.32 -40.04% ...

Keene Little : 10/26/2007 2:19:25 PM

Make that exceeding its 50% retracement now. If this can hold then the next upside target is 62% at 1543.44.

Keene Little : 10/26/2007 2:18:28 PM

SPX is working its way up to its 50% retracement at 1533.36.

Jane Fox : 10/26/2007 2:18:13 PM

Our star performer for the last few months, the NDX is lagging today. Link

Jeff Bailey : 10/26/2007 2:17:05 PM

CFC's WEEKLY R1 $17.83 and GREEN #5 overlap at $17.83.

Linda Piazza : 10/26/2007 2:16:51 PM

I don't think we can say that the SPX broke free of Keltner resistance on that last close, but the proof will be in the pudding: what happens this 15-minute period.

Linda Piazza : 10/26/2007 2:16:06 PM

Really iffy SPX result going into the close of this 15-minute period. It's likely going to close above 1530.37 Keltner resistance, but not much above.

Jeff Bailey : 10/26/2007 2:15:42 PM

CFC's GREEN #3 here at $17.06.

Jeff Bailey : 10/26/2007 2:15:00 PM

CFC $17.09 +30.75% ...

Jeff Bailey : 10/26/2007 2:14:37 PM

Washington Mutual (WM) $28.84 +5.64% ... traded 61.8% dynamic.

Linda Piazza : 10/26/2007 2:14:29 PM

Absolutely no pullback on the TRAN yet, but it's approaching its former high of the day at 4866.39, with the TRAN at 4858.49 as I type.

Jane Fox : 10/26/2007 2:12:10 PM

Here is the reverse H&S Linda and Mark were talking about mirrored on the VIX. Link

Jeff Bailey : 10/26/2007 2:09:14 PM

StreetTracks Gold (GLD) $77.60 +2.06% ... MONTHLY Pivot Levels are ... $64.29, $68.91, Piv= $71.35, $75.97, $78.41.

Jane Fox : 10/26/2007 2:08:56 PM

How many of you would have bailed on the trade?

Linda Piazza : 10/26/2007 2:08:46 PM

And with the TRAN breakout above its resistance, the SPX is attempting to break above Keltner resistance now at 1530.70 or so. The 15-minute period has not closed yet, and we don't yet know if the resistance will hold or not. Note that this is also near the neckline of that inverse H&S. Please be careful if thinking of jumping into a play either direction. I could be just really out of it these days, but the moves are defying interpretation or predictions the last couple of days.

Jane Fox : 10/26/2007 2:08:08 PM

Like I said you just have to be patient.

Jane Fox : 10/26/2007 2:07:55 PM

Hit my target at 13810.

Linda Piazza : 10/26/2007 2:06:41 PM

I warned earlier in the day that traders should watch the TRAN as it tested the trendline that forms the support on a triangle that might be setting up. That trendline was at the low of the day, 4777.75, and the TRAN bounced strongly from it, which would have provided a heads up for SPX, OEX, and Dow bounces or at least corroborated them. Now the TRAN is pushing above the descending trendline off the early morning high from Wednesday, with the descending trendline at about 4844.90 and with the TRAN currently at 4848.43. If the TRAN can maintain this breakout above the triangle's resistance, that would better corroborate SPX, OEX and Dow strength, but a quick move back below the trendline or a 15-minute close below the 120-ema also at 4844.90 would make this look like a false breakout.

Jeff Bailey : 10/26/2007 2:06:08 PM

Washington Mutual (WM) $28.67 +5.05% ... 50% dynamic ($28.63)

Keene Little : 10/26/2007 2:04:23 PM

Looking at the VIX, do you suppose the market gods will give us another touch of the uptrend line from last December? I see the short term uptrend from Oct 11th has been violated to the down side (even with a kiss goodbye for good measure). What do you think? Is this where we should look for the next great shorting opportunity? Or just wishfull thinking!

The VIX still looks bullish on its daily chart (bearish for equities) but if equity bulls can drive the market higher into the end of the month and FOMC then there's a good chance we could see VIX drop back down towards its 200-dma/uptrend line. Right now I see VIX mirroring price action so it's not telling us a whole lot at the moment. Link

Jeff Bailey : 10/26/2007 2:00:13 PM

US Dollar Index (DXY) 60-minute interval chart (update) at this Link

Remember! 2-day Fed Meeting 10/30-10/31.

We'll get new WEEKLY Pivot Levels at today's close.

Linda Piazza : 10/26/2007 1:53:40 PM

Mark (thanks, Mark) has written to point out a potential inverse H&S formation on the SPX's chart, forming since 10/23. It looks as if this morning's early push was an attempt to push above the rising neckline on this formation, but then the SPX fell back below it. I find it a rather sloppy formation, but I think the neckline would now be at about 1530.50 if I'm eyeballing it correctly. I show Keltner resistance on 15-minute closes at 1530.20, so those are closely aligned.

Be very careful when making any assumptions about upside or downside targets and don't confuse potential formations with confirmed ones, either. The TRAN is now bouncing off its low, as is the USDJPY, but neither has bounced far, and I've found the indicators rather mixed for the last two days.

Jane Fox : 10/26/2007 1:52:42 PM

Raise the stop on the YM long from 13781 to 13755

Keene Little : 10/26/2007 1:47:53 PM

YG 788 just tagged so now short, stop 792.

Linda Piazza : 10/26/2007 1:43:26 PM

Will it or won't it? That's the question with the SPX. Will it or won't it close the day above its 10-sma? I don't see anything that tells me on the intraday charts simply for the reason that the SPX isn't honoring support or resistance levels, and hasn't been for a couple of days. As the SPX tests the previous high of the day, supposed Keltner resistance gathers from 1528.59-1530.27.

Jeff Bailey : 10/26/2007 1:41:56 PM

Warning! DXY 77.02 ... has broken below its WEEKLY S1.

Keene Little : 10/26/2007 1:44:48 PM

Time to try the next short on gold. This could be a little early and it might be better to wait for confirmation with a break back below the top of its rising wedge (near 784) but it's looking like a potential throw-over move today and I'm shorting it at 788 with a stop at 792 for now. The continuing negative divergences at these new highs confirms the bearish rising wedge: Link

Jeff Bailey : 10/26/2007 1:36:02 PM

Altria (MO) $73.16 +1.23% ... X gets another square.

Jeff Bailey : 10/26/2007 1:34:30 PM

XLF-KG set target alert! ... Let's target $34.50 in the underlying.

Jeff Bailey : 10/26/2007 1:31:45 PM

VIX.X 20.20 -4.58% ...

Jeff Bailey : 10/26/2007 1:31:24 PM

Financial Select SPRDs (XLF) $33.14 +0.72% ...

Jeff Bailey : 10/26/2007 1:30:21 PM

Swing trade long alert! ... for two (2) of the Financial Select SPDRs XLF Nov $33 Calls (XLF-KG) at the offer of $1.09.

Keene Little : 10/26/2007 1:26:08 PM

But in case we're stuck in the middle of chop, keep an eye on two equal legs up off the last low (DOW 13782, SPX 1531.62) for an end to the bounce.

Jeff Bailey : 10/26/2007 1:26:00 PM

WM $28.49 +4.35% ...

Jane Fox : 10/26/2007 1:24:17 PM

Raise stop to 13750.

Keene Little : 10/26/2007 1:23:57 PM

Volume is starting to switch over to the buy side.

Jane Fox : 10/26/2007 1:24:05 PM

Sometimes you just have to be patient with trades.

Jeff Bailey : 10/26/2007 1:21:48 PM

CFC $15.83 +21.19% ... RED #1

Jeff Bailey : 10/26/2007 1:21:03 PM

Washington Mutual (WM) $28.10 +2.93% ... sticks its head above 19.1% dynamic.

Jeff Bailey : 10/26/2007 1:18:51 PM

Swing trade put close out alert! ... for the one (1) Washington Mutual WM Dec. $30 Put (WM-XF) at the bid of $3.20.

WM $28.06 +2.78% ...

Jeff Bailey : 10/26/2007 1:16:24 PM

Day trade short stopped alert! ... for the 1/2 position in shares of Countrywide (CFC) $15.51

Jeff Bailey : 10/26/2007 1:13:33 PM

CFC 15.41 ... not looking good for a day trade short.

Keene Little : 10/26/2007 1:12:02 PM

Short term (30 and 60-min charts) is looking overbought so a further pullback looks like it could be next (or it will chop its way higher as negative divergences continue to build). But we're getting a turn up on the daily oscillators so I can't discount the possibility that we're in the beginning stages of a larger rally (these oscillators can of course turn right back down so it's only a heads up): Link

The mid-line of the parallel up-channel for the DOW from 2006 is near 13800 and that's one reason why I think the DOW needs to get back above 13800 to tell us something more bullish is going on. So far the bounce off Monday's low looks like a choppy mess and therefore corrective looking (which says the dark red price path is currently the more likely outcome here). The 60-min chart shows how a choppy rise into FOMC might play out (and could take the DOW up to the 13900 area): Link

Linda Piazza : 10/26/2007 1:08:05 PM

I'm receiving more questions this morning about my decision to close out my November bear call spreads for $0.15 this week. I sure started something when I revealed what I was doing and encouraged subscribers to think about their own risks, trading styles, and opportunities.

Subscribers question my decision, saying that if I could exit credit spreads for that little, then they must have been relatively safe, and those subscribers are absolutely right. Perhaps there's no chance of those spreads being hit, although I'd argue that the SPX 1640 and RUT 900 sold strikes made me a little nervous.

I can only reiterate my statement that there's always a tradeoff and no right or wrong about these decisions. Mike Parnos, I think, would absolutely disagree with this strategy, or at least he did when I last asked him about it, and I certainly understand why he would disagree, for the same reason that some subscribers do. I made more money in the months when I didn't do this . . . except in the cases when one of my credit spreads was getting hit. I'd rather remove the risk and sit easy, counting my (admittedly smaller) profits for the next few weeks, while I might have been worried about the FOMC meeting's effect on my spreads.

The thing is that almost no risk is not the same thing as no risk, and having probability in your favor is not the same thing as being given a guarantee that your position will be safe. I've had supposedly safe credit spreads get hit during opex week, when it's too late to do anything but roll into the next month, and I bet some subscribers have, too. Exiting a credit spread when it's $0.10-0.20 (I prefer $0.10 or $0.15) or else adjusting when the delta of a sold option reaches .20-.22 on a bull put spread and something like 0.22-0.25 on a bear call one helps me avoid paying those big prices to exit a spread that's gone wrong during opex week.

But don't take my word alone in support of this action. Here are some quotes from a webinar by Dan Sheridan, presented at the CBOE, when he was talking about how he starts each trading day by asking himself questions. One of these went as follows: "Are any of my credit spreads under $0.20? Every day with a condor, you prepare for war in a time of peace. Why do you care [if credit spreads are under $0.20]? I want to take it off. I don't want all that risk for $0.20. Take it off. If it goes up, I'll sell it again." Then, during the Q&A session on that webinar, he said, "In 25 years in the pit, every pit trader I ever met, not one ever subscribed to the theory of just leaving them alone. If you've got one worth $0.20 . . . take off the risk. I don't believe in leaving stuff to take your lumps. This is a craft. Learn it."

So, after reading a lot, listening a lot and thinking about risk a lot, I've come to think of trading condors and credit spreads differently than I did before. Did I really want to leave the risk there? Could I start thinking differently about the original credit I received, not expecting to keep it all but instead knowing ahead of time that I'd take off the credit spread as soon as possible? That's what I decided was best for me. It won't be best for everyone.

And, again, I'm not setting myself or my ideas up as superior to Mike's. As I mentioned, he and I would both think that laughable, and, if we didn't, the losses I incurred in my failed hedging procedure would mean that my trading record for this year would serve to prove my methods aren't superior to his.

That loss likely wouldn't have happened if I hadn't been on a search this year for good exit strategies and tried out one that was disastrous rather than good. But I don't regret that loss, strange as that sounds, because it was part of my stated trading goal for the year and it ultimately prodded me further toward finding the right exit strategies for me, my needs and my personality. I'm in this to make real money and I want to manage risk so that I can preserve my trading account, and, although I don't regret that loss, I sure don't want to repeat it. I traded light this November but even then, I had $63,000 at risk in those 63 contracts with 10-point spreads. Most months, I have more. I decided, like all those pit traders, I want out of that risk as soon as possible.

Jeff Bailey : 10/26/2007 1:03:09 PM

Slap a "dynamic" on WM too! Right click your QCharts retracement, and set the alerts to the retracement levels. Then turn your chart back to CFC.

Jeff Bailey : 10/26/2007 12:59:23 PM

A move either side of there will likely find a bias taking hold.

Jeff Bailey : 10/26/2007 12:58:45 PM

CFC ... trader could "flip" to a 3-minute interval chart too. That's about as small as I'll go.

Can see MACD flattening out juuuust above 0.00.

Pretty much see CFC tight between $15.07 and $15.36.

Jeff Bailey : 10/26/2007 12:53:56 PM

CFC $15.26 +16.83% ... day trader's 5-minute interval chart Link

Jane Fox : 10/26/2007 12:42:48 PM

I was a little late on the YM long but if you are in the stop is 13740 and target is 13810.

Jane Fox : 10/26/2007 12:40:29 PM

I see a long YM at 13781.

Linda Piazza : 10/26/2007 12:31:09 PM

Bears aren't getting what they want. It appears that the SPX will close this 15-minute period above the 9-ema. I haven't found anything, any targets, trustworthy for the last two days.

Jeff Bailey : 10/26/2007 12:29:10 PM

CFC's DAILY R2 is $15.25. R1 $14.19.

Jeff Bailey : 10/26/2007 12:25:43 PM

Day trade short alert! ... for 1/2 position in shares of Countrywide (CFC) $15.17 here. Stop goes $15.51, target $14.35.

Jeff Bailey : 10/26/2007 12:24:12 PM

Turn on your QCharts' DAILY and WEEKLY Pivot levels too!

Jeff Bailey : 10/26/2007 12:23:04 PM

Slap a dynamic and a lower 5-MRT on CFC $15.22 +16.44%.

Jeff Bailey : 10/26/2007 12:16:04 PM

SPY $152.06 +0.14% ... sits on its WEEKLY Pivot.

At Tuesday's close (an important day for pivot traders), the SPY couldn't close the deal for bulls. I established a stop in the SPY Nov. $153 Calls (SYH-KW) at $149.90 after seeing that, and easily got stopped the next day.

Key level, perhaps "Pivotal" close today.

Keene Little : 10/26/2007 12:14:58 PM

Because of the after-hours jump in the futures they'll close their gaps before cash (ES hasn't quite closed its gap yet). The selling has a little more volume than the small choppy bounces so it doesn't look like a bottom for this pullback has been found yet. It's looking very similar to yesterday's decline from the high.

SPX would close its gap at 1514.58 which would also be a retest of its downtrend line from Oct 11th through yesterday morning's high.

Jeff Bailey : 10/26/2007 12:12:21 PM

This market just doesn't "feel" all that bullish.

Linda Piazza : 10/26/2007 12:11:32 PM

The USDJPY's 15-minute 9-ema is at 1523.08. Bears who hope to see the bottom-of-the-gap test want to see continued 15-minute closes beneath that.

Jane Fox : 10/26/2007 12:10:17 PM

ER's overnight low was 811.50 and sure enough intraday the Russell futures found support at 811.00.

Linda Piazza : 10/26/2007 12:09:48 PM

The TRAN is still testing that rising trendline from the 10/22 low. At 4780.05 as I type, the TRAN is just cents above it. It's produced no appreciable bounce yet, but neither has it cascaded lower out of this potential triangle.

Jeff Bailey : 10/26/2007 12:09:40 PM

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

Stopped out of the 1/2 position ($10,000 / $7.05 = 709 shares) day trade long in TRID at $6.93.

Linda Piazza : 10/26/2007 12:05:35 PM

The OEX has set up a short-term potential target of 707.18-707.81. As with the SPX, I'm not sure whether to believe that downside target, particularly with gap support just above it.

Jane Fox : 10/26/2007 12:05:08 PM

ER is now approaching its overnight low so expect support there.

Linda Piazza : 10/26/2007 12:04:48 PM

No bounce yet in the USDJPY.

The SPX has set up a potential downside target of 1515-1516. Not sure whether to believe it, though.

Linda Piazza : 10/26/2007 12:00:56 PM

So far, the SPX is having difficulty staying above its 10-sma on the daily chart, and is currently below it. As I mentioned earlier, if the SPX were to close here, that candle would be bearish, but we're far from the close as yet, so we shouldn't draw too many conclusions as yet. On various intervals of my Keltner charts, I see potential support next from about 1521.75-1522, a zone that's about to be tested and which of course includes the gap level from this morning.

Jeff Bailey : 10/26/2007 11:58:42 AM

NASDAQ a/d 1,575:1,220

Jane Fox : 10/26/2007 11:57:44 AM

The DOW is also on a jtHMA buy. Link

Jane Fox : 10/26/2007 11:57:08 AM

The jtHMA SPX charts are showing a buy the dip. That signal came yesterday. Link

Jeff Bailey : 10/26/2007 11:57:39 AM

TRID ... $7.14 ... I'd blow it out. RISK now is "break even," or $6.80. Potential REWARD still $7.50-$7.60 zone.

Jeff Bailey : 10/26/2007 11:56:13 AM

Once it has seen a 5-minute bar close ABOVE 19.1% of $7.15, it has NOT seen a 5-minute bar close back BELOW.

If it does, or looks like it might, with SMH $33.76 -0.26%, I'd blow it out.

Jane Fox : 10/26/2007 11:55:39 AM

Overall I am still bullish but shorter term I must admit the SPX chart is just not talking to me. I do think we have a very good chance of making new all time highs but that could take until next year and in the meantime we may just lollygag around here for weeks. Link

Linda Piazza : 10/26/2007 11:54:56 AM

At 4790.87 as I type, the TRAN now approaches the rising trendline off the Monday morning low and yesterday's low. This defines potential support for a triangle that may be forming. I'm wondering if it will break out either direction now or if it instead will zig zag inside this triangle until Wednesday. I think the triangle may narrow too much by then, though.

Jeff Bailey : 10/26/2007 11:54:28 AM

TRID $7.18 -41.19% ... just sitting on its 19.1% "dynamic"

Keene Little : 10/26/2007 11:53:38 AM

The volume is dropping off as price chops its way lower. It continues to look like we'll see an upside resolution. But any break lower with volume will likely mean a quick gap closure.

Linda Piazza : 10/26/2007 11:51:59 AM

The USDJPY is now at 114.05, deeper into that potential support zone. It's been trending down, though, ever since breaking out of the consolidation zone that had held through the wee hours of the morning into this morning's open. So far, it's not supporting gains in equities, if it still has that effect, but watch for this potential support.

Jane Fox : 10/26/2007 11:50:33 AM

I have been having computer issues this morning and I apologize for not been here earlier.

Internals are bearish and you should not be thinking long right now. Link

Jeff Bailey : 10/26/2007 11:46:08 AM

SMH $33.79 -0.17% ... slips red.

Jeff Bailey : 10/26/2007 11:45:36 AM

TRID ... $7.21 ... if still long, would snug a stop under $7.15. Maybe break even. Target probably lowered under the $7.50 level. Say ... $7.45.

Jeff Bailey : 10/26/2007 11:39:17 AM

NASDAQ a/d 1606:1169

Jeff Bailey : 10/26/2007 11:38:20 AM

TRID $7.18 ... day trader could still try a long, but stop still defined by the 0% dynamic, or session low. That's always the first level of risk assessment. The next level of downside risk assessment is RED #2.

Jeff Bailey : 10/26/2007 11:35:43 AM

Trident Micro (TRID) $6.98 -42.83% ... here is updated day trader's chart. I did add an "upper 5-MRT." I just clone/copy the lower 5-MRT, and put its 100%-80.9% around the first 5-minute bar. Link

Linda Piazza : 10/26/2007 11:28:07 AM

At 1524.49 as I type, the SPX is a few cents above the 15-minute 9-ema, testing it, tentatively holding its support. However, the Keltner line now at 1527.80, formerly support, did hold as resistance over the previous two 15-minute periods.

Jeff Bailey : 10/26/2007 11:21:36 AM

My initial thought on TRID was to be looking short a bounce back near $7.60. But with internals looking very strong this morning, thought ... "why not trade a 1/2 position long" back to $7.50, exit there, then look for a short with a target of "red #2", or the "dynamic low".

As TRID trades a new session low of $6.80, drag the "dynamic" down to that low.

Now you'd have a "zone" of resistance at RED #1 and "dynamic" 38.2% of $7.50.

Jeff Bailey : 10/26/2007 11:13:40 AM

Day trade long stopped alert! for Trident Micro (TRID) $6.93

Linda Piazza : 10/26/2007 11:12:51 AM

With the TRAN at 4810.41, this index has gone negative for the day. This is obviously not a good market-timing tool, but it signals that all is perhaps not well with the economy, so it's not backing up gains in some other indices.

Linda Piazza : 10/26/2007 11:11:02 AM

The USDJPY is now at 114.16, having tested the 114.00-114.10 support level. Final direction may not yet be decided, so continue to watch for bounce potential from this level as well as for a drop beneath this support zone.

Keene Little : 10/26/2007 11:07:58 AM

This morning's pullback is just a 3-wave move so far and supports the idea that we've got another push higher coming. If we get it, watch for negative divergence against this morning's first high and for SPX to stall around 1534. That should set up a deeper pullback at a minimum. Slow price action this morning makes me think the market just isn't in a hurry to go anywhere before FOMC now.

If this morning's low is now taken out then I would expect the gaps to get closed and that would set up the potential for more price whipsaws. We're not at a good place to recommend a trade at the moment so don't force a trade just to trade.

Jeff Bailey : 10/26/2007 11:04:54 AM

Trident Micro (TRID) $7.05 -42.26% ... here's a day trader's 5-minute interval chart Link

Linda Piazza : 10/26/2007 10:59:25 AM

As often happens in climates when big caps might be better trusted, the OEX is outperforming the SPX by several measures. On the 15-minute chart, it hasn't yet erased its upside target, still maintaining 15-minute closes above the Keltner line at 712.45. On the daily chart, it remains a couple of points above its 10-sma at 711.74. The OEX is at 713.29.

Overall, it's not a bad sign that big caps are outperforming others, but it is a sign that some are cautious about the market and want to stay in highly liquid stocks.

Linda Piazza : 10/26/2007 10:54:26 AM

It pays to be skeptical sometimes. The SPX has erased the upside target that it set with this morning's early rush. It's dipped down toward the 9-ema, with that average now at 1522.98 and still rising. The SPX hasn't touched it yet and is already rising toward former-resistance-turned-support-now-turned-potential-resistance at 1526.71-1529.01 on 15-minute closes. Remember, however, that if we're looking at the daily chart, what's happening is a steep pullback from the day's high (leaving a long upper shadow in comparison to the day's range) but that is essentially pulling back to test the 10-sma that it punched through earlier. If the SPX were to end the day here, the candle would be bearish. However, for right now, all we can say is that there's a natural pullback to retest the 10-sma and see if it holds as support. It's not doing a great job right now, but the day is far from over.

Some signs I was seeing made me skeptical of that early upside target ever being met.

Jeff Bailey : 10/26/2007 10:53:37 AM

Day trade long alert! for 1/2 position in Trident Micro (TRID) here at $7.05. Stop $6.93. Target $7.50.

Jeff Bailey : 10/26/2007 10:51:11 AM

Trident Micro (TRID) $7.03 -42.42% ... notably weak after earnings.

Slap a lower 5-MRT and a "dynamic" on this one.

Linda Piazza : 10/26/2007 10:45:48 AM

The USDJPY has dropped below the consolidation pattern that held all night, at 114.15 as I type. There may be support in the 114.00-114.10 zone.

Linda Piazza : 10/26/2007 10:43:29 AM

As many will have already noticed, the SPX today punched above its 10-sma, with that at 1525.37. Something else that bulls don't want to see is a close today back at or beneath that moving average after punching through it this morning. If you've been reading my posts, you know that I've been watching for the possibility that the SPX could be reinstituting its old pattern, only in an inverse manner, by falling steeply, consolidating a few days, rising up to test the 10-sma from the underside and then falling again. This is the inverse of its old pattern of climbing strongly, consolidating a few days, punching down to the 10-sma and then bouncing from it and repeating the process. A close at or beneath the 10-sma brings up the specter that we could be seeing the inverse pattern. I haven't been predicting that this would happen, but rather mentioning that it was something I was wondering about and would be watching. I'm definitely going to be watching today with the 10-sma being tested.

Jeff Bailey : 10/26/2007 10:45:38 AM

QQQQ $53.78 +1.37% Link ... even with MSFT's Link impressive (and I do mean impressive) 10.81% gain, QQQQ came within a penny of its recent multi-year high of $54.21 set on 10/23/07.

Jeff Bailey : 10/26/2007 10:37:26 AM

Google (GOOG) $671 Link P/E= 52.6 ; Sales/Share $47.52

Baidu.com (BIDU) $344 Link P/E= 206 ; Sales/Share $4.58

Yahoo! (YHOO) $32.40 Link P/E= 63.2 ; Sales/Share $4.85.

Linda Piazza : 10/26/2007 10:33:48 AM

The USDJPY is still consolidating in the tight range it held all night, from 114.22 on the downside to 114.55 on the upside, but mostly sticking at about 114.40 on the upside. It's at 114.26 as I type. No Keltner breakout to match the equity breakouts.

Keene Little : 10/26/2007 10:32:22 AM

From Mark:

Stupid quote of the day...

Michael Cuggino, President and portfolio manager of Permanent Portfolio Funds, being interviewed this morning on CNBC by Mark Haines.

Haines - What do you think of the market turning on a dime on reassurances by Countrywide Financial, of all people?
Cuggino - Well, if you back out financials and housing, earnings haven't been all that bad this quarter.
Haines - Come on! That's like saying if I had a third leg I could run the 100 a lot faster!

I'll add that it's like saying we're not experiencing any inflation because we don't count food and energy. I consider myself an optimistic person but one needs to be a realist as well and the reality is that the financials and housing market are not predicting good things ahead for our economy.

Linda Piazza : 10/26/2007 10:32:22 AM

SPX maintaining support on 15-minute closes, with nearest support now having risen to just above 1527 and stronger support at 1526.06. The 9-ema on this chart has now risen to 1522.95, but reaching down to test it now would mean erasing that upside target, so bulls don't want that to happen yet. They want more sideways until the 9-ema moves closer.

Keene Little : 10/26/2007 10:23:32 AM

A 50% retracement of the October decline for SPX is at 1533.56 and two equal legs up in its bounce off Wednesday's low is at 1534 which crosses the top of a parallel up-channel just before 11:00 AM. The short term price pattern suggests that another minor high (with negative divergence) could be the end of the run up from yesterday afternoon so watch for a shorting opportunity there. How much of a pullback (and how choppy) is the bigger question. Link

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

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

Down in Watch List I note GOOG and BIDU's P/E ratio and Sales/Share (probably not ubdated for recent reports). Some fundamental analysts will value differently. VERY differently.

Linda Piazza : 10/26/2007 10:11:03 AM

The TRAN is still near the flat-line level with regards to yesterday's close.

Linda Piazza : 10/26/2007 10:09:24 AM

The OEX didn't dip quite to its presumed support at 711.61 on 15-minute closes, at least not yet. As long as it maintains closes above this number, it maintains an upside target of 717.82, but I'm no more confident of upside targets on the OEX today than I was of downside ones yesterday, so don't believe wholeheartedly in this. It's more a need to keep that potential resistance in mind if the OEX does climb. The 9-ema is way down at 709.45, so bulls would prefer to see sideways consolidation until it catches up rather than a dip to that moving average right now.

Linda Piazza : 10/26/2007 10:07:10 AM

As anticipated (9:48:28 post), the SPX has dropped back to test presumed support, with that support now risen to 1524.90 on 15-minute closes. The SPX is at 1525.64. As long as the SPX is maintaining 15-minute closes above this support, it maintains a potential upside target and next resistance at 1539.05, but I am just leery of any targets in this atmosphere, so take these with as much of a grain of salt as you did yesterday's downside target. The 9-ema is still way below, so I wouldn't be surprised to see some sideways stuff here until it catches up, but bulls would really rather the SPX not drop all the way to the 9-ema right now, as it's at 1519.61.

Linda Piazza : 10/26/2007 10:04:05 AM

The Fed has announced a repo in the amount of $7.500 billion. A repo of $6.000 billion matured today. That makes a net add of $1.500 billion.

Jeff Bailey : 10/26/2007 9:57:01 AM

Baidu.com (BIDU) $349.00 +4.39% ... Earnings press release Link

Linda Piazza : 10/26/2007 9:56:31 AM

The TRAN has pulled way back off its early morning high of 4866.39 and is now at 4836.65, just a few points higher than yesterday's close. It's so far maintaining support on the 15-minute 9-ema, but isn't particularly confirming strength or breakouts, so keep this on your radar screen, too.

Linda Piazza : 10/26/2007 9:54:37 AM

The USDJPY is moving lower, not higher, so this is one indicator that is not supporting the idea of higher prices. It once was a reliable indicator, but now is less so, so just keep it on your radar screen and use it to help you make profit-protecting plans, not to guide automatic entries or exits. It's at 114.30 as I type.

Jeff Bailey : 10/26/2007 9:54:27 AM

Looking at BIDU's 5-minute chart with all sessions turned on. After last night's earnings, the stock did dip to $300.01 in extended session.

The BDU-WV would have needed something in the order of $290 trade this morning to have achieved an option price of $7.90.

Linda Piazza : 10/26/2007 9:48:28 AM

The SPX maintained a 15-minute close above the presumed resistance that has now been converted to presumed support. That's at 1523.01-1524.18 on 15-minute closes, where Keltner lines converge. When I roll down to the 5-minute chart, it looks likely that the presumed support will be retested or at least approached. Bulls of course want it to hold.

Keene Little : 10/26/2007 9:41:08 AM

The US dollar has dropped to a new low and that has helped oil and gold rally to new highs. I'm out of my gold short at break even for my two tries so far to find a top. It looks like gold could head up to its Fib target at 784.5 (overnight high is just shy of 783). The negative divergences persist at the new highs for gold and I suspect a break down will happen fast. That's the reason I've been probing for a top. A break below its uptrend line near 776 now would signify a top has been put in.

Jeff Bailey : 10/26/2007 9:40:05 AM

Swing trade put exit alert! for the one (1) Bidu.com BIDU Nov $260 Put (BDU-WV) at the bid of $0.50.

BIDU $352.72

Linda Piazza : 10/26/2007 9:37:22 AM

While equity futures popped higher after CFC's report--beats me why we take CFC's word for the more optimistic next quarters--the USDJPY did not break out to the same degree, as measured on Keltners as well as yesterday's and the overnight highs. The USDJPY is at 114.45 according to my charts with resistance in the 114.55-114.70-ish zone. It's not confirming the equity breakout for whatever that's worth.

Linda Piazza : 10/26/2007 9:35:06 AM

The OEX has also popped above presumed Keltner resistance at 711.05, with the OEX at 714.87 as I type. What bulls do not want to see is a close at or below that presumed resistance by the end of this first 15-minute period, as that would suggest a pop-and-drop type reaction. Again, no sign of that yet.

Keene Little : 10/26/2007 9:34:57 AM

With CFC saying they think the housing market will improve, it's just another bottom call. Citigroup will probably join them with another bottom call of their own. We're not at a bottom and there's very little to encourage a bottom call here but that won't stop people from calling for one. I've been expecting a sideways/up consolidation in the home builders index and expected these calls so it's not at all surprising to see this reaction. Just don't trust it as an opportunity to pick up stocks here. There will be a better (lower) time to do that.

Linda Piazza : 10/26/2007 9:33:54 AM

The SPX has broken above presumed Keltner resistance now at 1523.64, with the SPX at 1529.54 as I type. What bulls do not want to see is a pullback to or below that presumed resistance by the end of this 15-minute period as that would suggest a pop-and-drop reaction. No sign of that yet.

Keene Little : 10/26/2007 9:26:55 AM

It looks like Countrywide's (CFC) earnings report has launched a large rally in equity futures (even techs). Their report of a $1.2B loss for the quarter must be good news (could have been worse I guess). Their upbeat outlook for the future has obviously scared a few shorts. I simply don't trust upbeat outlooks since none of them (in the housing area) have panned out and frankly I don't trust upbeat outlooks from a company that could benefit directly from a statement like that.

So watch for the possibility of a brief blast higher this morning that gets sold into. And be prepared for the possibility for more choppy price action perhaps something like I showed on the DOW chart last night (rising wedge idea). This is a strange acting market right now that's ignoring a lot of sharks in the water, but not for long. It's also a market that thinks the Fed can save the day.

Jane Fox : 10/26/2007 9:02:14 AM

I'm also long Crude and will enjoy this ride as long as it lasts. The de niro I make in my portfolio will ease the pain I feel at the pumps and everywhere else I will be affected by this bullishness. Link

Jane Fox : 10/26/2007 9:00:33 AM

I have a bullish position in gold but was hoping to add to it when Gold took a "dip." Unfortunately I read the "dip" incorrectly and missed my opportunity. Link

Jane Fox : 10/26/2007 8:58:02 AM

LONDON (MarketWatch) -- European stocks were volatile Friday morning amid rising gold and oil prices, with gains from oil giant Royal Dutch Shell and miner BHP Billiton supporting the top indexes.

Crude rose to a record high of $92.22 a barrel in electronic trading, while gold futures reached a new multiyear high of $782.20 an ounce as worries about energy inventories and Middle Eastern tensions abounded.

Jane Fox : 10/26/2007 8:53:52 AM

Oh my gosh - Crude broke through $92.00/bl overnight. Funny thing happened on the way to $100/bl though, the stock market hasn't blinked.

Gold up (of course) and US$ down (of course). Link

Jane Fox : 10/26/2007 8:51:39 AM

Overnight both the S&P and DOW futures broke their respective previous day ranges and it looks like the bulls have the ball this morning. Link

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