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Jeff Bailey : 11/6/2007 2:34:25 AM

Dorsey/Wright's World Bell Curve at this Link

Jeff Bailey : 11/6/2007 2:21:25 AM

Some snapshot "fundamentals" of China plays and comparison names at this Link

Jeff Bailey : 11/6/2007 1:50:05 AM

40.58 yuan = $5.53

scratch, scratch (need to work on my USD/Yuan conversion? ...

PetroChina Shanghai Shares Fall 7.7% ... AP Story Link

Jeff Bailey : 11/6/2007 12:40:11 AM

Keene! The YM traded a regular session low of 13,449 on October 22, 2007!

Keene Little : 11/6/2007 12:06:35 AM

Tuesday's pivot tables: Link and Link

There's a lot of similarity in the indices' charts right now so I'll just stick with the SPX to make a couple of points for what I'll be watching on Tuesday. As I had shown late in the day on Monday, the setup is for a decline that takes SPX well below 1490. It's a 20-point spread but basically it looks to me like the bears win if SPX is driven below 1490 and the bulls win if it's driven back above 1511. So tomorrow those are the key levels. Link

Whether the bulls will be able to do much with another push above 1511 is subject to debate but I would not want to be short until I see what kind of rally develops (and play a long with a tight leash). But what the bulls have going for them here is a nice bullish divergence at Monday's low. Just as the bearish divergence worked for the bears at the Oct 31st high, so too might the bullish divergence work for the bulls now.

The other bullish thing I see is a potential bounce coming for the banks. The 5-wave move down from September looks complete (it might need one more minor new low) and I'm anticipating a bounce now: Link . If the banks rally it will likely be based on calls for the worst (of the credit issues and write-offs) being over and it's a buying opportunity. It's not but it should be good enough to get some bottom feeders back in. And if the banks rally then that could spark a more bullish rally in the broader averages so keep your eye on the banks and what the media is reporting.

Jeff Bailey : 11/5/2007 11:10:39 PM

Bear Confirmed ... At tonight close, Dorsey/Wright & Associates' Over-The-Counter Bullish % (BPOTC) reversed back lower to "bear confirmed" status at 42.00% (41.39% actual).

This would be the equivalent of StockCharts.com's NASDAQ Comp. Bullish % (BPCOMPQ) Link which also reversed back lower today.

Jeff Bailey : 11/5/2007 10:59:53 PM

Per some of this evening's Market Wrap ...

S&P 500 Index ($SPX) Link ... a trade at 1,480 needed to generate a reversing lower PnF sell signal.

StockCharts.com's S&P 500 Bullish % ($BPSPX) Link ... where chart would be identical to Dorsey/Wright and Associates'.

Still "bull correction," but would now need a reversing higher measure of 60% to get back to "bull confirmed" status. It would currently take a measure of 32% for this broad market indicator to achieve "bear confirmed" status.

OI Technical Staff : 11/5/2007 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 : 11/5/2007 5:46:37 PM

NYSE Comp. & NASDAQ Comp Internals at this Link

Jeff Bailey : 11/5/2007 5:46:32 PM

Closing U.S. Market Watch found at this Link

December Crude Oil (cl07z) settled down $1.95, or -2.03% at $93.98.
December Unleaded (rb07z) settled down $0.0584, or -2.39% at $2.3811.
December Heating Oil (ho07z) settled down $0.0298, or -1.16% at $2.5439.
December Nat. Gas (ng07z) settled down $0.4190, or -4.98% at $7.9990.

Jeff Bailey : 11/5/2007 5:11:10 PM

PTR option price calculator changing calculation date to tomorrow 11/6/2007 and target price of $196 (based of PnF chart channel) at this Link

Jeff Bailey : 11/5/2007 4:55:23 PM

PTR option price calculator at today's close $222.10 -12.92% at this Link

Jeff Bailey : 11/5/2007 4:40:02 PM

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

CLOSED out the HBC-WT at the bid of $7.20 as HBC traded $92.97.

STOPPED/CLOSED the remaining 1/4 position in shares of CDE at $3.83.

LOWERED bearish target on the once "no bid" PTR-WL to $196 in the underlying (trying to salvage what we can).

Jane Fox : 11/5/2007 4:35:55 PM

There does not seem to be any reports out tomorrow of any importance.

Keene Little : 11/5/2007 3:54:49 PM

Short against this afternoon's high and in fact I'd consider a stop and reverse long above SPX 1510 since it could run quite a bit higher.

Keene Little : 11/5/2007 3:53:33 PM

Updating the SPX 60-min chart (from the 120-min chart I showed at 12:3), it's now possible the b-wave is complete (the bounce from Friday's low) and now we'll get the next leg down, wave-c, with a downside target now at 1451.16 for equality in the move down from Oct 31st. That puts it nearly on top of the 62% retracement of the Aug-Oct rally: Link

For the move down from Oct 31st the 2nd leg down (wave-c) would equal 62% of the 1st leg down just under 1474 which is on top of the 50% retracement and near the bottom of the parallel down-channel so that would make for a good initial target (assuming of course that we're going to head lower from here). Short against this afternoon's high for now.

Linda Piazza : 11/5/2007 3:48:21 PM

This is why I was worried about the 72-ema and 50-sma resistance zone (3:23:15 and 10:49:27 posts) and warned bulls to have their profit-protecting plans in place before it was tested, just as I warned bears to have theirs in place for a test of the 1490 area, if that happened. I have no idea what the outcome of all this zigging and zagging is going to be, but it's a dangerous environment for bulls and bears alike. We have consolidation after a big down day from last Thursday and that means that bulls and bears are still battling, and we don't want to stand in the middle of the battle zone any more than we have to do so.

Jeff Bailey : 11/5/2007 3:43:37 PM

Sector Losers ... Broker/Dealers -2.13%, Retail -1.82%, Airlines -1.56%, Biotech -1.25%

Jeff Bailey : 11/5/2007 3:42:25 PM

Sector Winners ... Utilities +1.60%, NASDAQ Telecom +0.76%, Internet +0.49% ...

Keene Little : 11/5/2007 3:40:50 PM

As shown on the SPX 10-min chart I just posted, there's another upside Fib projection at 1521.71 so if it can get through 1510 and hold then that's where it could be headed. Otherwise it should at least pull back before proceeding higher. However, this late in the day I do not underestimated the ability of some big players to keep the indices in the green for the day so that they can talk about what a bullish day it was (again) to have completely reversed the day's losses.

Jeff Bailey : 11/5/2007 3:40:42 PM

Swing trade put lower target alert! ... for the PetroChina PTR Nov. $160 Put (PTR-WL) to $196.00 in the underlying.

PTR $225.68 -11.51% ...

PTR-WL currently $0.25 x $0.55.

Imp.Vol. from QCharts 90.63.

Linda Piazza : 11/5/2007 3:39:07 PM

The SPX is jammed under what could be strong resistance. The 50-sma is often support or resistance for the SPX on daily closes, as is the 72-ema. The 50-sma is at 1513.60. Bulls, whatever you decided you were going to do to protect profits as this zone was tested, it's time to keep that in mind, just in case, since the 72-ema has already been closely approached.

Keene Little : 11/5/2007 3:32:55 PM

This is the potential A-B-C bounce off Friday's low and SPX achieved equality at 1509.58 (pennies shy of that target) and if it's the right count then the next move is down and a break of 1490. Link

Jeff Bailey : 11/5/2007 3:31:41 PM

VIX.X 23.91 +3.91% ...

Keene Little : 11/5/2007 3:29:47 PM

I just thought of something about the pattern over the past two days and this leg up could be wave-c of an a-b-c bounce pattern from Friday morning. That says get ready for a big decline from here. I'd cover a long position and think about the short side and see if it gives us more than just a pullback.

Jeff Bailey : 11/5/2007 3:28:28 PM

KBW Bank Index (BKX.X) 96.21 -0.34% ...

Jeff Bailey : 11/5/2007 3:27:37 PM

Swing trade put exit alert! ... for the HSBC Holdings HBC Nov. $100 Put (HBC-WT) at the bid of $7.20.

HBC $92.97 -1.96%

Keene Little : 11/5/2007 3:26:54 PM

They're jamming it higher. Somebody wants to see green today. So far we've got two hammers on the daily chart. You don't often see that and frankly I'm wondering if it has the same bullish connotation or if it's instead shorts getting jammed so that the Boyz can sell into these rallies. Tough call.

Linda Piazza : 11/5/2007 3:26:27 PM

Backing off from a daily view of the SPX, I see the SPX testing the descending trendline off Friday's afternoon highs. It's at about 1508.15 if I've eyeballed it correctly.

Jane Fox : 11/5/2007 3:23:39 PM

And the DOW is pulling ahead and the second market to break through its overnight highs and sort of leaving the other markets in the dust. Remember the DAX chart I showed. Link

Keene Little : 11/5/2007 3:23:33 PM

And there's the 5-wave move up from the low. Don't be bashful--take some profits off the table if you bought the low. This is still a wacky market that loves to take profits back.

Linda Piazza : 11/5/2007 3:23:15 PM

I warned bears to know how they'd treat a test of 1490 before that was approached and now I'm warning bulls again to know how they'll treat a test of the 1511-1513.53 zone (daily 72-ema and 50-sma) if that's tested. I imagine it's been a good day for those scalping, if a dangerous one.

Jane Fox : 11/5/2007 3:17:36 PM

VIX and ES are in sync today. Link

Jane Fox : 11/5/2007 3:16:52 PM

My goodness gracious look at the DAX take off. Link

Keene Little : 11/5/2007 3:16:31 PM

Looking for a 5-wave move up now (on 1-min chart) at which point I'd peel a little money off the table on your long play. Let it pullback and then add back to your position. So one more minor new high for this move should set up a larger pullback (relatively speaking).

Linda Piazza : 11/5/2007 3:11:22 PM

Keep your stops moving up, bulls.

Linda Piazza : 11/5/2007 3:11:04 PM

Keltner resistance on five-minute closes just beneath 1503 and then at 1505.54 may be holding on this five-minute close.

Jeff Bailey : 11/5/2007 3:10:43 PM

GOOGLE SETS OPEN PLATFORM FOR MOBILE DEVICES

DJ- Google says alliance with 34 handset makers, wireless carriers and other technology companies will create low-cost mobile phones based on "open" technology standards. Google shares continue to climb, up 1.60%.

GOOG $722.33 +1.55% ...

Linda Piazza : 11/5/2007 3:09:39 PM

The little inverse H&S confirms on the SPX, but now the SPX has shot all the way up to the upside target of that little formation.

Jeff Bailey : 11/5/2007 3:08:03 PM

Nice buy program coming in ...

Linda Piazza : 11/5/2007 3:05:13 PM

The right shoulder of that little inverse H&S has been forming (2:54:54 post), as I suspected it would. Now we see if it confirms or is invalidated. A confirmation would require a five-minute close above the 5-minute 45-ema at 1498.35, at the least. An invalidation would probably require a five-minute close beneath 1493.93 at the least, but a new low of the day to be safe. This is a particularly dangerous place for bulls and bears alike.

Jeff Bailey : 11/5/2007 3:00:55 PM

TRIN 0.98 ...

Jeff Bailey : 11/5/2007 3:00:45 PM

YM 13,514 ... "in the zone"

Keene Little : 11/5/2007 2:57:37 PM

Get your stop to break even on a short if you can. Expect a pullback to test the low again but it should hold for now. If not then get shorty.

Linda Piazza : 11/5/2007 2:54:54 PM

The SPX tests that former supporting trendline off Friday's low. There's the possibility that it will form a little inverse H&S with a neckline at the trendline. If so, there could be be a small pullback into a right shoulder formation, perhaps after a test of about 1498.60 or so . . . being hit as I type. If there's a pullback, then bulls want it to stop at about 1492.50. Bears want it invalidated by a new low of the day.

Jeff Bailey : 11/5/2007 2:54:34 PM

YM 13,530 ... mid-point of today's session. 50% "dynamic"

Jeff Bailey : 11/5/2007 2:48:31 PM

YM 13,515 ...

Jeff Bailey : 11/5/2007 2:47:40 PM

TRIN 1.06 ... holding above 1.00 at this point.

Keene Little : 11/5/2007 2:46:50 PM

If you tried a long at that last low, I'd pull my stop up tight now (to a new daily low). The 5-wave move down from the high ust before 12:00 should lead to at least a larger bounce so any continuation lower now would suggest a larger move down and I'd want to be out of the way (if not short).

Jeff Bailey : 11/5/2007 2:45:59 PM

YM 13,491 ... session low has been, been, been ... 13,467.

Jeff Bailey : 11/5/2007 2:44:39 PM

USD/JPY 114.346 x 114.373

Jeff Bailey : 11/5/2007 2:44:19 PM

EUR/USD 1.44695 x 1.44715

Jeff Bailey : 11/5/2007 2:43:24 PM

iShares Silver (SLV) $145.63 +0.22% ...

Linda Piazza : 11/5/2007 2:43:12 PM

Here's the automatic bounce attempt we expected at 1490. Bulls who might have bought that test want to see the SPX sustain values above 1497, the site of the former supporting trendline off Friday's low. Bears want to see a rollover there, if it's reached. I've rolled down to a five-minute chart now, and that shows Keltner resistance at about 1494.60 on five-minute closes.

Jeff Bailey : 11/5/2007 2:39:14 PM

HSBC Holdings (HBC) $91.92 -2.96% ... undercuts opening low and WEEKLY S1 ($92.18). Weekly S2 $89.65.

HBC-WT currently $8.20 x $8.40.

Jeff Bailey : 11/5/2007 2:36:25 PM

PTR-WL are currently $0.25 x $0.60. Low/high has been $0.10 / $0.25.

Linda Piazza : 11/5/2007 2:35:51 PM

The RUT has broken through its October low and former support. A sign of what's to come on other indices? I'm watching for a RUT bounce, but I'm not seeing anything.

Jeff Bailey : 11/5/2007 2:35:42 PM

I say we "hang out" on the PTR-WL's for now. Might get a gap down tomorrow.

Keene Little : 11/5/2007 2:35:09 PM

This could be the last small leg down to finish today's decline. It's a tight stop to try a long here but be aware of the potential for a head fake break of SPX 1490.

Jeff Bailey : 11/5/2007 2:34:26 PM

PetroChina (PTR) alert! $216

Jane Fox : 11/5/2007 2:34:02 PM

The two granddaddies, the VIX and AD volume are telling you the bears have total control today. Oh and by the way the AD line is -2119. Anyone want to try a long :) Link

Jeff Bailey : 11/5/2007 2:32:26 PM

Goldcorp (GG) $35.36 -1.00% ...

GG-XG currently $2.00 x $2.10.

Jeff Bailey : 11/5/2007 2:31:20 PM

Swing trade long stopped alert! ... on the 1/4 position in shares of Coeur D' Alene Mines (CDE) at the bid of $3.83.

Linda Piazza : 11/5/2007 2:29:35 PM

The SPX is now testing Keltner support on 15-minute closes near 1491.50. It's been sliding down that support over the last 45 minutes or so.

Jane Fox : 11/5/2007 2:29:25 PM

Good morning everyone. I get Nasdaq and NYSE advancers and decliners but cannot find a ratio of the a/d. Is the A/D ratio something you have to program in? I use Prophet.net. Thanks

Barry, I use Tradestation and the AD ratio is an indicator that comes with the package. The absolute AD line is the one I created.

Jeff Bailey : 11/5/2007 2:29:13 PM

Swing trade long raise stop alert! ... on the 1/4 position in shares of Coeur D' Alene Mines (CDE) $3.85 -2.03% ... to $3.83.

Jeff Bailey : 11/5/2007 2:25:50 PM

US Fed Survey on Bank Loans (update)

DJ- U.S. banks have tightened standards for most types of loans, including nontraditional and even prime mortgages as well as commercial loans, the Federal Reserve said Monday, an indication that the subprime-mortgage crisis is having ripple effects through the broader economy.

Demand for consumer and business loans has also weakened, the Fed said in its quarterly survey of senior loan officers.

"In the October survey, significant numbers of domestic respondents reported that they had tightened their lending standards on prime, nontraditional, and subprime residential mortgages over the past three months," the Fed said.

Loan officers were surveyed in early October.

Of the nine banks surveyed that originate subprime loans, five said they had tightened lending standards, which was little changed from the last survey in July.

However, 40% of respondents said they raised standards on prime mortgages, almost triple the 15% that reported having done so in July. Sixty percent of nontraditional loan originators, which include adjustable-rate and interest-only mortgages, said they have tightened standards, up from only around 40% in July.

Meanwhile, "significant fractions" of banks that originate prime jumbo loans said they raised their lending terms by increasing fees and requiring "more stringent income and asset documentation as well as higher minimum down payments," the Fed said.

That trend toward higher lending standards extended well beyond housing. About one-quarter of survey respondents said they tightened standards for consumer loans excluding credit cards, up from only about 10% in July.

Many banks also raised lending standards for commercial and industrial (C&I) loans. "Almost all domestic banks and U.S. branches and agencies of foreign banks that reported having tightened their lending standards and terms on C&I loans pointed to a less favorable or more uncertain economic outlook as a reason for having done so," the Fed said.

The share of banks tightening standards for commercial real estate loans "increased notably" over the past three months, the Fed also said.

At the same time, demand slowed for most loan types. About one-fourth of respondents said consumer loan demand had fallen since July, and the share of respondents reporting weaker demand for nontraditional and prime mortgages "increased notably."

Demand for C&I and commercial real estate loans also softened in October compared with July.

In a separate question, half of U.S. bank respondents and three-fourths of foreign banks said they have tightened standards for providing backup lines for asset-backed commercial paper programs.

Jane Fox : 11/5/2007 2:23:34 PM

Everyone is watching 1490 like a hawk and I still believe the market will do whatever it can to put the on most hurting on the most traders. One scenario is to close below 1490 so all the bulls will bail and the bears will back up the truck. Then what do you think it will do? Of course shoot up to retest resistance at 1550. This is why if the SPX closes below 1490 I will step aside and just watch the games. Link

Jeff Bailey : 11/5/2007 2:23:07 PM

US Fed Survey: Banks See Weaker Demand For Most US Loan Types ...

Linda Piazza : 11/5/2007 2:22:41 PM

The SPX is having difficulty getting back above the rising trendline off Friday's low. A new low for today suggests more downside, possibly to test the 1490 area and maybe even toward 1485 or so. As I noted earlier today, those currently in bearish positions need to know ahead of time how they'll treat a test of 1490, if it should occur. Unless prices were to just crash through it, I would imagine a bounce attempt might occur from that level. Be careful there, both current bears and would-be bulls.

Keene Little : 11/5/2007 2:21:13 PM

I keep watching GOOG in wonderment and amazement that the buyers of that stock have no fear, and so far they've been absolutely right. That's a momentum play if there ever was one. Hopefully the bulls are eyeing their chair for when the music stops. But for now I don't see any bearish divergences to speak of (not that they're needed at a top but it helps) and the uptrend line for RSI is still intact. I'd at least wait for a break of RSI before even thinking short this stock now. Let it flame out first. Link

Jeff Bailey : 11/5/2007 2:12:15 PM

YM short stop alert! ... 13,510.

Keene Little : 11/5/2007 2:06:48 PM

The move down from this morning's high would look best now with a little consolidation near the low here followed by one more new low with bullish divergences to set up a scalp long play.

Linda Piazza : 11/5/2007 2:06:07 PM

There's been a slightly lower low (when compared to Friday's) on the SPX, but by only a few cents. There's a bounce attempt beginning as I type, but now bears would like to see 15-minute closes beneath the 9-ema, with that average now at 1498.79 and still descending. Bulls of course want to see values sustained above that 9-ema.

Linda Piazza : 11/5/2007 2:03:02 PM

Obviously, bears want to see a low below Friday's, and they don't want to see it quickly reversed. The RUT has just slipped into another new low, so it's still producing lower highs and lower lows. However, the shape at the bottom of its decline since Friday is beginning to take on a bullish falling wedge shape. Bears need those lower lows and they need to see them hold or else we might see prices run higher again as bulls grow emboldened.

Jeff Bailey : 11/5/2007 2:02:35 PM

Sector Winner Utilities +0.41%, NASDAQ Telecom -0.17%

Keene Little : 11/5/2007 2:01:05 PM

Two equal legs down for the DOW (from Friday's close) is at just under 13443 which would be a retest of Friday's low. Watch for any signs of bottoming there (such as bullish divergences) to see if it's going to hold and set up a long play (just scalping moves for now).

Jeff Bailey : 11/5/2007 1:59:40 PM

YM short lower stop alert! ... to 13,510.

YM 13,481

Keene Little : 11/5/2007 1:57:39 PM

Correction to my last post--two equal legs down for SPX is 1490.87 so it makes the 1490 level that much more important for the bulls to hold.

Jane Fox : 11/5/2007 1:56:36 PM

My YM short hit target at 13498.

Keene Little : 11/5/2007 1:54:20 PM

SPX is breaking below the bottom of the potential triangle pattern but watch 1492.70 which is where it would have two equal legs down from Friday's close. And of course there's 1490 just below that. The bears have their work cut out for them here but obviously a break below 1490 that sticks would put a hurtin' on the bulls.

Jeff Bailey : 11/5/2007 1:52:46 PM

TRIN Alert! ... 1.03 -7.20% ... best/highest level of afternoon.

Jeff Bailey : 11/5/2007 1:51:16 PM

YM 13,495 ... Next level of support would be DAILY 19.1% at 13,466.

Linda Piazza : 11/5/2007 1:48:48 PM

It's that typical stop-running time of day when big money traders come back from their lunches and test to see whether either support or resistance is going to hold. Right now, support from the rising trendline off Friday's low is being tested. If equities are quickly bought, sending indices such as the SPX higher again, then big money knows what it wants to know and a bounce might ensue. If it isn't bought, they know something different.

Jeff Bailey : 11/5/2007 1:46:15 PM

YM short lower stop alert! ... to 13,529.

Jeff Bailey : 11/5/2007 1:45:17 PM

YM probes MONTHLY S1 ... 13,508.

Keene Little : 11/5/2007 1:39:06 PM

If the sideways triangle for SPX is going to hold then it should find support just above 1496 for another bounce back up to the top of the pattern, perhaps 1506.

Jeff Bailey : 11/5/2007 1:38:35 PM

YM 13,514 ... "in the zone" (DAILY S1/MONTHLY S1)

Jane Fox : 11/5/2007 1:29:09 PM

I am short YM from 13529 with a stop at 13571 adn target at 13498

Jeff Bailey : 11/5/2007 1:26:24 PM

YM short lower stop alert! ... to 13,540

YM 13,527

Linda Piazza : 11/5/2007 1:21:25 PM

First Keltner support for the OEX is at 700.14 on a 15-minute close. Support below that looks a bit weaker, but exists on a Keltner basis at 698.35 and then 695.33.

Linda Piazza : 11/5/2007 1:20:11 PM

First potential Keltner support for the OEX on 15-minute closes is at 1498.41, near the new rising trendline off Friday's low, the one that incorporates this morning's low. Below that, support looks weaker, but exists on a Keltner basis at 1493.26 and 1488.41.

Jeff Bailey : 11/5/2007 1:19:37 PM

YM short lower stop alert! ... to 13,554.

YM 13,533.

Jeff Bailey : 11/5/2007 1:10:21 PM

YM short alert! here at 13,554. Very tight stop at 13,580. Target 13,430.

Keene Little : 11/5/2007 1:03:33 PM

The price pattern from Friday is pretty much the same across the different indices and we'll just need to let this play out into the afternoon. Stepping away for about 30.

Linda Piazza : 11/5/2007 12:59:39 PM

I was just looking at internals such as the up volume versus the down volume in addition to the advancers versus decliners. All such volume patterns, including also the new highs versus the new lows, are bearish, although the up vs. down volume ratio is not as bearish (41/59) on the Nasdaq as it is on the NYSE (30/91).

Jane Fox : 11/5/2007 12:47:49 PM

Actually the trade that Jeff took this time was a breakout and not a fade. I read the numbers a little wrong.

Jeff Bailey : 11/5/2007 12:45:04 PM

YM short setup cancel order alert! ... Please cancel the order to sell short the YM at 13,535.

YM 13,567 ...

Linda Piazza : 11/5/2007 12:41:37 PM

Just churning.

Jeff Bailey : 11/5/2007 12:34:59 PM

YM short setup alert! ... Trade short the YM should it trade 13,535. Stop goes 13,570. Target 13,470.

YM 13,547.

Keene Little : 11/5/2007 12:30:03 PM

The inability for this market to make any headway in either direction (by that I mean there are no impulsive 5-wave moves to give me a sense of where this market is headed) I'm being forced to constantly update potential corrective wave patterns. Because of the current consolidation in what appears to be a sideways triangle pattern (cycling around the 38% retracement of the Aug-Oct rally), I'm thinking we're going to get another leg down once it's done. Preliminary projections point to SPX 1446 as the downside target (120-min chart): Link

That would place it near the 62% retracement of the Aug-Oct rally. I also show some downside projections in the 1467-1470 area which would be at the bottom of a parallel down-channel from the October high and just below the 50% retracement. Assuming we get that kind of move down it will be anyone's guess as to where it goes next but at a minimum it should set up another rally leg.

I see the possibility of staying trapped in the sideways triangle consolidation pattern today and I'm watching and waiting to see if we get the down-up sequence to set up the short play. In the meantime, patience or quick scalps is the recommendation.

Jane Fox : 11/5/2007 12:27:35 PM

Here is how the markets are trading in relation to their previous day ranges. Link

Jeff Bailey : 11/5/2007 12:19:59 PM

PetroChina (PTR) $228.40 -10.45% ...

Jeff Bailey : 11/5/2007 12:18:19 PM

DUG $40.38 -0.32% ... slips red.

Jeff Bailey : 11/5/2007 12:17:22 PM

US Oil Fund (USO) $74.39 +0.05% ... inches green.

Jeff Bailey : 11/5/2007 12:16:14 PM

US Dollar Index (DXY) 76.44 +0.13% (30-min delayed) ...

Jeff Bailey : 11/5/2007 12:14:25 PM

Weekly/Monthly Index Pivot Matrix at this Link

Linda Piazza : 11/5/2007 11:59:02 AM

The TRAN isn't making much headway today, either. Although it outperformed (by Keltner standards) the SPX, OEX and Dow this morning, it's just churned within the 4750-4822 zone that it's been setting up as a chop zone since Friday morning. It's at 4772.68 as I type.

Jane Fox : 11/5/2007 11:56:12 AM

HONG KONG (MarketWatch) -- PetroChina Co. shares more than doubled in their Shanghai debut Monday, giving the oil giant a $1 trillion market capitalization and easily surpassing Exxon Mobil as the world's largest company.

The shares ended at 43.96 yuan, up from their initial-public-offering price of 16.70 yuan.

The runup gave the oil giant a market capitalization of $1.005 trillion, more than twice that of Exxon Mobil at $480.45 billion. The rally in PetroChina's yuan-denominated, or Class A, shares, came despite a decline in the broader Shanghai Composite Index, which fell 2.5% to 5,634.45.

Linda Piazza : 11/5/2007 11:50:29 AM

So far, the RUT isn't making much progress toward topping its afternoon swing high of 801.02. I erroneously said earlier that it had been Friday's high of the day, but that was 801.92. The RUT is at 791.35 as I type.

Linda Piazza : 11/5/2007 11:34:03 AM

Two difficult-to-trade days. So far, we're seeing consolidation at the bottom of a steep decline. When we see consolidation at the top of a steep rise, we consider that bullish. Should we consider this bearish? Maybe, although I believe that dip-buying has been so profitable for so long that it's much less certain that this is bearish than that the opposite pattern is bullish.

Jeff Bailey : 11/5/2007 11:33:29 AM

YM Daily/Weekly/Monthly Pivot Levels at this Link

Jeff Bailey : 11/5/2007 11:29:11 AM

Alert! ... YM October Regular Session High/Low/Close was 14,267 / 13,449 / 13,947.

Keene Little : 11/5/2007 11:10:51 AM

It's just an idea at this point but the choppy 3-wave price action is giving me that sideways feeling about this. That's why I want to see if SPX 1510 holds and we get another trip back down near the lows, then another bounce and then break down: Link

Linda Piazza : 11/5/2007 10:54:43 AM

All traders should perhaps be keeping the RUT on their radar screens. Unlike some other indices, the RUT did produce a lower low (than Friday's) this morning. It was only a minimally lower low, however, and was accompanied by bullish price/RSI divergence on the 15-minute chart. In my opinion, a move above Friday's intraday high at 801.02 would be needed to confirm that the tenor (lower highs and lows since Friday morning) had changed. The RUT is at 792.14.

Jane Fox : 11/5/2007 10:53:17 AM

NQ has broken through its overnight highs. ES and YM are neck in neck racing to see who will come in 2nd in this Kentucky Derby of stock market indexes. ER seems to be the only horse not showing that it has what it takes to be in this race. Link

Keene Little : 11/5/2007 10:50:54 AM

Two equal legs up from this morning's low for SPX is at 1509.46 which would be at the downtrend line from Friday's high (top of a sideways triangle?). Watch for resistance there.

Linda Piazza : 11/5/2007 10:49:27 AM

Nearest SPX Keltner resistance on 15-minute closes at 1509.39 and then 1512.19. That corroborates potential 72-ema and 50-sma resistance seen on the daily chart. If in bullish positions, know how you'll treat this area, if tested. The resistance at the top of the rising channel off Friday's low is now at about 1515.

Keene Little : 11/5/2007 10:47:03 AM

Watch for SPX 1510 to hold if we're going to get a sideways triangle to play out.

Jane Fox : 11/5/2007 10:46:37 AM

Internals are just not talking today and seem to be all over the place however, I do see the VIX heading for new daily lows and the AD ratio is making new daily highs as I type. USDJPY is bullish so it is looking a little better than before. The only fly in the ointment though is the AD line at -1559. Link

Jeff Bailey : 11/5/2007 10:46:21 AM

Sector Winners ... NASDAQ Telecom +1.03%, Insurance +0.98%, Internet +0.77% ...

Keene Little : 11/5/2007 10:45:28 AM

Pressing higher again. Maybe we'll get gap closure. The price action looks somewhat corrective which has me wondering if we'll just chop up and down and head sideways for another day or so.

Jeff Bailey : 11/5/2007 10:45:13 AM

Sector Losers ... Biotech -2.16%, Broker/Dealer -1.30%, Retail -1.19%, Oil Service -1.01%

Jeff Bailey : 11/5/2007 10:43:31 AM

ENCANA TO PAY $2.55B FOR NATURAL-GAS ASSETS

DJ- Oil producer EnCana agrees to pay $2.55 billion for the Deep Bossier natural gas and land interests of Leor Energy, a privately held Texas company. Field produces more than 215 million gross cubic feet of natural gas a day.

ECA $71.32 -1.60% ...

Jeff Bailey : 11/5/2007 10:40:43 AM

INFO SOUGHT ON FAILED OFFSHORE BEAR STEARNS HEDGE FUND

DJ- Bear Stearns and investors in High-Grade Structured Credit Strategies Enhanced Leverage fund, which went belly up in summer, are battling over access to fund documents and other material that could provide fodder for litigation.

BSC $101.35 -0.79% ...

Jeff Bailey : 11/5/2007 10:39:30 AM

WELLCARE NET UP 67%; COOPERATES WITH PROBE

DJ- WellCare Health Plans says 3Q earnings rise to $72.4 million, or $1.71 a share, and reiterates that it is cooperating with authorities in connection with a state and federal investigation.

WCG $38.42 +40.37% ...

Jeff Bailey : 11/5/2007 10:37:03 AM

FINK TOLD HE CAN TAKE MERRILL CEO ROLE

DJ- Merrill Lynch directors tell BlackRock Chairman Larry Fink that he can take over as chief executive if he so chooses, CNBC reports. Citing sources close to the matter, CNBC says Fink has said he will take the next two weeks to decide.

MER $56.58 -1.22% ...

Jeff Bailey : 11/5/2007 10:36:07 AM

RUBIN, BISCHOFF SUCCEED CITI'S PRINCE AFTER BIG WRITEDOWNS

DJ- Charles Prince's four-year tenure at the head of Citigroup ends with the world's biggest bank saying it will write off $8 billion-$11 billion due to turmoil in credit markets and cut its reported 3Q earnings. Board names Win Bischoff as interim CEO and senior adviser Rubin as chairman. CNBC reports Citi's biggest shareholder, Saudi Arabian Prince Alwaleed bin Talal, is lobbying for ex-CEO Sandy Weill to return.

C $35.99 -4.61% ...

Jeff Bailey : 11/5/2007 10:30:50 AM

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

Linda Piazza : 11/5/2007 10:27:52 AM

The Feds today announced a repo of $6.750 billion. A repo of $6.250 billion matured today, sot hat makes a net add of $0.500 billion. Currently, there's $41.750 billion sloshing through the system. That amount has been rising again lately.

Keene Little : 11/5/2007 10:27:38 AM

The banks are in a position now where we could see a larger rally to correct the decline from September. I'd be careful if you're short any of the banks right now. Link

Linda Piazza : 11/5/2007 10:20:58 AM

Keltner and (new) rising trendline support look strongest for the SPX near 1494, but there's potential support on 15-minute closes at 1496.22. For the OEX, the strongest support looks to be near 698, but other, rather obvious support is being tested near 700-701.

Jeff Bailey : 11/5/2007 10:19:57 AM

Swing trade put lower stop alert! ... for the HSBC Holdings HBC Nov $100 Put (HBC-WT) to $95.10 in the underlying.

HBC $92.50 -2.35% ...

HBC-WT are currently $7.60 x $7.80.

Keene Little : 11/5/2007 10:17:21 AM

So far it's just a 3-wave bounce against this morning's spike down. Based on that, a short against this morning's high would be a recommended play.

Jane Fox : 11/5/2007 10:16:50 AM

WASHINGTON (MarketWatch) -- Nonmanufacturing sectors of the U.S. economy grew in October, above Wall Street analysts' expectations, the Institute for Supply Management reported Monday. The ISM nonmanufacturing index rose to 55.8% in October from 54.8% in September. Wall Street analysts had expected an October reading of 54%. The headline index is not a weighted average of the survey's other key components. The closely-watched employment index fell to 51.8% from 52.7% in September. New orders rose to 55.7% from 53.4% in the prior month. The price index declined to 63.5% from 66.1%.

Linda Piazza : 11/5/2007 10:10:57 AM

If the SPX continues bouncing and should rise toward the daily 72-ema at 1511.46 or the 50-sma at 1513.50, I would watch for rollover potential, so my message now is to those of you who are currently in bullish positions. Just as I would advise bears to know what they're going to do when and if potentially strong support is tested, I would advise bulls to know what they're going to when and if that potentially strong resistance is tested.

Will it be tested? I just don't see any evidence that tells me whether or not that's likely to happen. The evidence that a bounce is being attempted is there and the attempt, at least, is backed up by some internals now, but it's just an attempt so far. Friday's choppy trading conditions chopped back and forth across several potential Keltner S/R lines, rendering them less useful than is typical. I can't point to one or the other yet and say, "if this happens, then this is likely." However, if the action this morning was just a broadening of the rising channel, then a redrawn wider channel would currently have its topline resistance at about 1515. Potentially strong Keltner resistance lies below that at about 1510 on 15-minute closes. I'm just not sure yet that will ever be tested. The SPX looks as if it could as easily roll over again as climb.

Keene Little : 11/5/2007 10:06:28 AM

At this point the price pattern is very choppy and leaves me guessing as to which way it's going to go next. Prepare to get whipsawed if you're trading this.

Jane Fox : 11/5/2007 10:06:23 AM

Oct. ISM services prices 63.5% vs 66.1% in Sept.

Oct. ISM services new orders 55.7% vs 53.4% in Sept.

Oct. ISM services employment 51.8% vs 52.7% in Sept.

. Oct. ISM services above 54.8% in Sept.

Oct. ISM services 55.8% vs 54% expected

Jane Fox : 11/5/2007 10:01:34 AM

WASHINGTON (MarketWatch) -- The Federal Reserve's two interest-rate cuts were designed to reduce economic risk and not to lessen the risk that investors will lose money from bad decisions they've made, Fed Gov. Frederic Mishkin said Monday.

In a detailed and clear explanation of his votes to cut rates in September and October, Mishkin insisted that the Fed is powerless to protect investors, susceptible to tens of billions of dollars in losses from bad investments in securities linked to risky mortgages.

Mishkin made the comments in a speech to a risk-management conference in New York. A copy of his prepared remarks was made available in Washington.

Jeff Bailey : 11/5/2007 9:59:00 AM

Shanghai ($SSEC) Link ... Closed down 143.36, or -2.48% at 5,635.

Linda Piazza : 11/5/2007 9:58:11 AM

No confirming bounce in the advdec line to the attempt to bounce in the SPX, but the advdec line is right on potential Keltner support. The USDJPY is trying to bounce, but hasn't made it above a descending trendline forming since about 6:00. So far, I don't see definitive evidence of what will happen next.

Jeff Bailey : 11/5/2007 9:55:31 AM

Hang Seng ($HSI) Link ... Closed down 1,527, or -5.01% at 28,942.32.

Jeff Bailey : 11/5/2007 9:52:21 AM

PetroChina (PTR) $228.50 -10.41% ...

China Telecom (CHA) $74.00 -8.64% ...

Jeff Bailey : 11/5/2007 9:51:16 AM

Hong Kong Shares Skid As Doubt Dogs China Investment Scheme

Reuters Story Link

Linda Piazza : 11/5/2007 9:49:48 AM

Keltner and rising trendline resistance held on the first 15-minute close, but that same resistance is being tested now. I see a tiny green candle sitting on potential support on the advdec line, but no convincing bounce there at all. Not yet.

Jane Fox : 11/5/2007 9:47:53 AM

If you are long the SPX or the DOW then you are singing, "Hansel hold back the Dike." Link

Linda Piazza : 11/5/2007 9:44:23 AM

The SPX has bounced all the way back to the rising trendline off Friday's low. Is this is just a retest of that former support to see if it holds as resistance now? I don't see my version of the advdec line bouncing, so that makes me a bit suspect about the SPX bounce, but tune in to Jane's commentary, because hers perhaps shows something different. The VIX has certainly dropped back from its first high. The SPX has Keltner resistance, too, just under 1500, so you could also use this as a test, whether the SPX is able to close above that resistance on this first 15-minute close.

Keene Little : 11/5/2007 9:42:07 AM

Nothing like a little short-jamming move here. Now let's see if it holds.

Jane Fox : 11/5/2007 9:41:28 AM

Linda, I think there are a lot of traders out there watching the SPX 1490 and that bothers me. If anything is too obvious then the market will do whatever it can to administer the most hurt to the most people.

Linda Piazza : 11/5/2007 9:38:12 AM

The SPX is testing 15-minute Keltner support at about 1495.40, important on 15-minute closes. The SPX has of course broken below the rising trendline off Friday morning's early-morning low, but if the SPX can close this 15-minute period above that support and bounce from there, some will consider this a higher low being produced.

Linda Piazza : 11/5/2007 9:35:27 AM

It looks as if my 9:29:49 post was refuting Jane's earlier one about potential long setups. I hadn't read her earlier post. I respect Jane's commentary, just as I do that of all the other writers. We both think the 1490 area is important, as is obvious, and are just looking at it from different perspectives. I'm thinking that it's a dangerous place for bears, but what's obvious from the dual commentary is that it's an important level to watch.

Jane Fox : 11/5/2007 9:35:19 AM

AD line (-1796) is telling me the bears have firm control of the ball.

Linda Piazza : 11/5/2007 9:29:49 AM

If the opening minutes are as negative as the futures suggest they will be, the SPX will break down out of the rising channel that had formed Friday. We could get another test of the 1490 zone, but futures weakness doesn't always play out exactly once the cash market opens. If you're already in a bearish play, think about how you want to treat a retest of the 1490 support, if it's tested. Sorry, bulls, but I've been saying for a while in my Wraps that I think this is an environment for selling rallies and that only adept scalpers who don't need my help anyway should be going long.

Jane Fox : 11/5/2007 9:27:43 AM

Same story for the DOW with support at 13400. I used the DIA for my long position on Friday and I will exit that position if the DOW closes below this support. Link

Keene Little : 11/5/2007 9:24:07 AM

We've got a very negative start to the day and ES has broken below Friday afternoon's low. At this point the bullish wave count that I showed on the DOW chart (below) will be negated if cash does the same thing this morning. For now I'm going to assume SPX will drop at least a little lower than Friday's low and test 1490 again. I'm thinking it will hold (could break it but then bounce back) and give us a larger bounce back up so be careful chasing the market lower this morning.

Jane Fox : 11/5/2007 9:23:53 AM

The other thing I would like to mention is that the MACD is supporting my analysis of the SPX chart.

Jane Fox : 11/5/2007 9:22:55 AM

On Friday I suggested taking a long position in the SPX based on the retest of support at 1490 and how nicely it bounced from this support. This pattern made it very clear the bulls were going to defend 1490 and if they win new yearly highs were possible. On the other hand if they do not win and the bears were able to reassert themselves the stop on that long is also very clear and your risk is relatively small. Link

Jane Fox : 11/5/2007 9:14:11 AM

The USDJPY also made a series of lower lows and highs but this market has breached its previous day low and this is not bullish for the American markets.

Crude is taking a little break and is also making lower lows and highs but it is not threatening its PDL, at least not yet. Link

Jane Fox : 11/5/2007 9:09:33 AM

A series of lower lows and highs tells me the bears have been in control during the overnight session but so far the previous day lows have held. If those lows do not hold and at the end of the day we CLOSE below then the tone of the market changes from bullish to neutral. I'm not ready to say bearish but will move to the sidelines until I see which side wins. Link

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