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Keene Little : 11/15/2007 11:42:29 PM

Friday's pivot tables: Link and Link

We didn't get the bounce today like I thought we might but tomorrow's another day. Not too much of a change to last night's charts but obvioulsy from a lower level. Still looking for another rally leg. If we get a minor new low below Monday's don't assume that that's bearish as it could be just a slight throw-under for a bear trap. Be looking for confirmation in the market internals and heavy sell volume. Otherwise a bullish divergence at any new lows would continue to support at least a bounce back up.
DOW: Link
SPX: Link
NDX: Link
RUT: Link

OI Technical Staff : 11/15/2007 10:00:00 PM

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Jane Fox : 11/15/2007 5:11:59 PM

Economic Reports for tomorrow:

9:00a.m. Sep Treasury International Capital Flows. Previous: -$85.5B.

9:15a.m. Oct Industrial Production. Expected: +0.1%. Previous: +0.1%.

9:15a.m. Oct Capacity Utilization. Expected: 82. Previous: 82.1%.

Jeff Bailey : 11/15/2007 4:48:18 PM

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

Jeff Bailey : 11/15/2007 4:37:54 PM

December Copper (hg07z) settled down $0.2155, or 6.53% at $3.0810.

Jeff Bailey : 11/15/2007 4:27:26 PM

US Dollar Index (DXY) ... 03:00 Close was 76.07.

Jeff Bailey : 11/15/2007 4:00:36 PM

Even at NYSE A/D 705:2576 and TRIN 1.07. ...

Jeff Bailey : 11/15/2007 3:59:58 PM

Came close at YM 13,111, but DAILY S2 looks to have held.

Jeff Bailey : 11/15/2007 3:54:26 PM

YM short cover alert! ... YM 13,129

Jeff Bailey : 11/15/2007 3:50:42 PM

YM short finger on the button alert! ... YM 13,149 ...

Keene Little : 11/15/2007 3:50:36 PM

Nice buying spurt. That final low, right smack in the middle of the SPX 1443-1444 target zone (love them fibs!), looks like it might have been it. For all who were brave enough to buy it, your stop should be tucked right under that last low now. We'll see if it survives a retest.

Jeff Bailey : 11/15/2007 3:48:46 PM

YM short alert! here at 13,167. Stop goes 13,179. Target 13,110.

Keene Little : 11/15/2007 3:42:37 PM

SPX now nearing its downside Fib target. Time for the bulls to step in. The selling for hedge funds (to meet the Nov 15th deadline for withdrawal requests) should be just about done.

Jane Fox : 11/15/2007 3:34:16 PM

OK little Hansel we need you to hold back the Dike. Link

Jane Fox : 11/15/2007 3:24:08 PM

I am going to the Trader's Expo in Las Vegas so I will not be in the Monitor tomorrow.

Keene Little : 11/15/2007 3:20:52 PM

A break back above SPX 1460 is now needed to tell us a bottom is in.

Keene Little : 11/15/2007 3:17:36 PM

SPX 1451 didn't hold so the next downside Fib projection for this move is 1443-1444. Good correlation there for today's move as well as the whole move from Wednesday's high (double zigzag correction for wave-(b) pullback): Link

Tab Gilles : 11/15/2007 3:12:21 PM

Lifeway Foods (LWAY) $10.11 -$3.61 (-26.3%)

Followup to 9:48am post. Link

Keene Little : 11/15/2007 3:09:11 PM

I guess the bulls are going to have to hope for a successful test of Monday's low at this rate.

Tab Gilles : 11/15/2007 3:06:08 PM

U.S. housing slump worst since Depression: Wells Fargo Reuters

Thursday, November 15, 2007

NEW YORK - - Wells Fargo & Co., which has sidestepped many of the credit and liquidity problems plaguing U.S. mortgage lenders, believes the nation's housing slump is the worst since the Great Depression and is far from over, chief executive officer John Stumpf said.

He nevertheless said the second-largest U.S. mortgage lender and fifth-largest U.S. bank is well-positioned to ride out the storm, despite expectations for "elevated" credit losses from home equity loans into 2008.

He also said the bank has only "minimal" exposure to collateralized debt obligations and asset-backed commercial paper conduits that have caused well over $40-billion (U.S.) of writedowns industry-wide, with more expected.

"We have not seen a nationwide decline in housing like this since the Great Depression," Mr. Stumpf said at a Merrill Lynch & Co. banking conference in New York.

"I don't think we're in the ninth inning of unwinding this," he continued, using a baseball reference. "If we are, it's an extra-inning game."

Mr. Stumpf's comments came hours after Barclays PLC announced a #1.3-billion ($2.7-billion) writedown for losses on securities linked to U.S. subprime mortgages.

Other banks to announce writedowns topping $1-billion this month include Bank of America Corp., Bear Stearns Cos., Citigroup Inc., HSBC Holdings PLC, Morgan Stanley and Wachovia Corp.

At San Francisco-based Wells Fargo, rising delinquencies and defaults led to a mere 4 per cent increase in third-quarter profit, the slowest pace in more than six years, though net income totalled a record $2.28-billion.

Wells Fargo said the credit losses related more to the severity of bad loans than the frequency.

Mr. Stumpf pointed out that Wells Fargo never offered some exotic mortgages, such as adjustable-rate loans that let borrowers pay less than the principal due, that have caused problems for rivals.

Countrywide Financial Corp., the largest U.S. mortgage lender, did, and is cutting up to 12,000 jobs after a $1.2-billion third-quarter loss. Its CEO, Angelo Mozilo, in July lamented "home price depreciation almost like never before, with the exception of the Great Depression."

Mr. Mozilo was born in 1938, around when the Depression was ending, while Mr. Stumpf was born in the mid-1950s.

Mr. Stumpf said the current downturn resulted in part from "froth, unscrupulous lenders, [and] borrowers who got too greedy," and called it the "steepest, fastest, most prolonged decline in residential real estate" in a long time.

"Once we reach the bottom, the [housing] inventory is going to come off pretty quickly," he said. "Once the secondary market gets comfortable with [credit] ratings again, and once you think you've hit bottom, I think we'll see some turnaround, and it could be faster than we've seen in the past."

Keene Little : 11/15/2007 2:54:11 PM

New lows but the bullish divergences are still present on the 10-min charts. Goes to show it's not a good timing tool but by the same token it says not to get aggressive (such as pyramiding your position) on the short side.

Keene Little : 11/15/2007 2:50:57 PM

Banks are getting punished today, down -4.5%. MER is making new lows so I'm watching that one to see if it starts a bounce or not.

Keene Little : 11/15/2007 2:49:20 PM

At this point we could be nearing a bottom so if you're short I'd pull stops a little tighter now.

Jane Fox : 11/15/2007 2:44:51 PM

New new lastest is supported by a VIX new daily high.

Keene Little : 11/15/2007 2:37:52 PM

Volume seems to be tailing off as the latest bounce progresses. That's not what the bulls want to see. But if they can manage a higher high instead of these lower highs then we'll know a bottom is in for now. Until that happens it's looking like the current bounce could still lead to another new low.

Jeff Bailey : 11/15/2007 2:30:27 PM


DJ- Temperatures in the Eastern U.S., including the world's largest heating oil market in the Northeast, will be above normal from December through February, according to the National Oceanic and Atmospheric Administration.

Jeff Bailey : 11/15/2007 2:29:41 PM

US Oil Fund (USO) $72.35 -0.34% ... has gotten a pop.

Jeff Bailey : 11/15/2007 2:29:13 PM


DJ- Iran has 3,000 centrifuges, all enriching uranium, the BBC reports on its Web site, citing a report by the International Atomic Energy Agency.

Jeff Bailey : 11/15/2007 2:27:43 PM


DJ- Ratings firm lowers its long-term credit rating to A from A+ and affirms its A-1 short-term rating. Downgrade is in response to Bear's announcement it would take a $1.2 billion write-down on subprime-tied exposures and post a 4Q loss.BSC $99.64 -3.51% ...

Tab Gilles : 11/15/2007 2:20:37 PM

Weekly EIA Report Link

Keene Little : 11/15/2007 2:14:01 PM

There's a pattern that I'm looking at that calls for a bottom for the DOW and SPX at 13148 and 1451.80, resp. So perhaps a little lower and then find support. As the market presses lower the bullish divergences continue and that's one of the things that's keeping me from turning bearish here. That and the larger wave pattern that calls for another leg up after this pullback is finished.

Keene Little : 11/15/2007 1:58:36 PM

So far this is turning into a typical opex Thursday--lots of chop and lack of direction although you could certainly say today's trend is down. It's looking like a new low is coming.

Jeff Bailey : 11/15/2007 1:46:53 PM

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

Keene Little : 11/15/2007 1:39:45 PM

Actually I see that the DOW did not break today's downtrend line so nothing bullish about this bounce yet. In fact it still looks bearish.

Keene Little : 11/15/2007 1:37:29 PM

Today's downtrend line has been broken so watch for a pullback to retest the line and if it holds it should be a good buy signal. The only thing I'm wondering if it will be good for just another bounce up to a lower high before chopping lower again. So far the bounce off the low is only a 3-wave bounce and a drop lower than the last dip would leave it that way.

Jeff Bailey : 11/15/2007 1:35:58 PM

McAfee (MFE) $36.41 -1.88% ... MFE-MH are $4.50 x $4.70.

Jeff Bailey : 11/15/2007 1:34:54 PM

Swing trade put lower stop alert! ... for the McAfee, Inc. MFE Jan $40 Put (MFE-MH) to $38.20 (from $41.20).

Jeff Bailey : 11/15/2007 1:18:37 PM

US Dollar Index (dxy) 75.98 (30-min delayed) ...

Jeff Bailey : 11/15/2007 1:17:53 PM

USD/JPY 110.79

Jeff Bailey : 11/15/2007 1:17:36 PM

GBP/USD 2.0443

Jeff Bailey : 11/15/2007 1:16:58 PM

EUR/USD 146.28

Keene Little : 11/15/2007 1:15:35 PM

In looking at the pullback against Tuesday's rally it would appear the DOW is holding up the best with only a 50% retracement (13174) while SPX has retraced 62% (1459.63), NDX in between the two and the lowly RUT has retraced a little more than 78.6% (771.65).

If we're in a b-wave pullback of an a-b-c rally off Monday's low (as I've been showing in dark red on the 60-min chart updates) then wave-b can actually drop to a new low and not negate the possibility for another rally leg up above Wednesday's early high. I haven't seen anything yet that negates that expectation so I'm not recommending any short plays here.

Jeff Bailey : 11/15/2007 1:14:57 PM

Swing trade put exit alert! for the Goldcorp GG Dec $35 Put (GG-XG) at the bid of $3.90

GG $31.80 -4.36% ...

Jeff Bailey : 11/15/2007 1:10:40 PM

Countrywide (CFC) $12.83 -4.03% ... CFC-XC are $2.65 X $2.75.

Target remains $10.00.

Jane Fox : 11/15/2007 1:06:48 PM

A close below the swing low at 1440 would be quite bearish because resistance at 1490 was tested, the test failed and a lower low confirms the lower high. Link

Jeff Bailey : 11/15/2007 1:06:21 PM

Philadelphia Fed ... Nov Business Index 8/2 Vs. 6.8. Consensus 5.9.
Prices paid 37.7 Vs. Oct. 40.3
Prices received 18.6 Vs. 12.4
Employment 4.8 Vs. 12.6
New orders 3.5 Vs. 2.7.

Jeff Bailey : 11/15/2007 12:44:30 PM

Morgan Stanley (MS) alert! $53.35 -4.06% ... (see yesterday's MM)

Keene Little : 11/15/2007 12:42:39 PM

In addition to the 62% retracement of this week's rally at SPX 1459.63, this is also where the bottom of its parallel down-channel from October is currently located. The bulls need to defend this level otherwise they risk losing the rest of that rally: Link . Note that MACD is threatening to break its uptrend line but I prefer to use RSI for this and it's still holding above its uptrend line. It needs to hold it or else.

Keene Little : 11/15/2007 12:37:57 PM

Bullish divergences still on the charts.

Jane Fox : 11/15/2007 12:35:03 PM

Un - believe - able!!!! Hit target.

Jane Fox : 11/15/2007 12:34:22 PM

I am out of that trade now.

Jane Fox : 11/15/2007 12:33:56 PM

Our target is 13215 and we hit a low of 13221. Every case is a little different on how to handle this but I would be putting my stop to b/e at least.

Keene Little : 11/15/2007 12:31:51 PM

SPX is giving up its morning low. Now watch to see if 1460 holds.

Jane Fox : 11/15/2007 12:30:31 PM

Somedays you are the ball and some days the LouisVille Slugger. We came to within 1 tick of getting stopped before the market turned around. I like being the LouisVille Slugger.

Jane Fox : 11/15/2007 12:21:18 PM

YM came up to 13272 and turned around. Wow that was close.

Keene Little : 11/15/2007 12:20:45 PM

In the beginning of October I had recommended a short play in Countrywide Financial (CFC) based on the pattern for its decline from January and the sideways triangle consolidation from August. Both pointed to a continuation lower and the downside projection just below $8 would be a nice trade from $20. The decline since then has been a little choppy and I'm wondering if it will form a descending wedge (would mean a little longer to play out). I know some of you are following this trade so I'll show updates as this progresses further. Link

Jane Fox : 11/15/2007 12:17:43 PM

YM has been jumping around here and certainly trying our patience but we have a stop at 13273 so our risk is only 26 ticks.

Jane Fox : 11/15/2007 12:02:45 PM

Lower stop to 13273.

Keene Little : 11/15/2007 12:01:52 PM

We've got a test of the cash lows and a big bullish divergence on the 5 and 10-min charts suggests it will hold.

Jane Fox : 11/15/2007 11:56:51 AM

Let's lower the stop once again to 13275. This market has been jittery these last two days and we are enough into profit that we can tighten now.

Jane Fox : 11/15/2007 11:55:42 AM

Stop is now at 13284 and we are able to breathe a little easier now.

Jeff Bailey : 11/15/2007 11:51:59 AM

Freeport McMoran (FCX) $99.97 -3.87% ...

Jeff Bailey : 11/15/2007 11:51:33 AM

Disclosure: I currently hold a bearish position in RIO.

Jeff Bailey : 11/15/2007 11:50:44 AM

Swing trade put alert! for one (1) of the Companhia Vale Do Rio Doce RIO Jan $35 Puts (RIO-MG) at the offer of $3.40. No stop for now, target $28.50 in the underlying.

RIO $34.31 -3.90% ...

Jane Fox : 11/15/2007 11:49:10 AM

Once YM reaches 13233 I will lower the stop to 13284. Still not much of a move because we need to let the trade breathe.

Jane Fox : 11/15/2007 11:35:43 AM

TArget on the YM short from 13247 is 13215.

Jane Fox : 11/15/2007 11:34:14 AM

Short from 13247 and I do see a swing high at 13287 so I will be moving my stop to just above it at 13291 - it's only a small move but every little bit helps.

Jeff Bailey : 11/15/2007 11:23:24 AM

Countrywide (CFC) $13.07 -2.24% ...

Jeff Bailey : 11/15/2007 11:23:03 AM

Novastar (NFI) $2.16 -52.94% ... gett'n whacked today.

Jane Fox : 11/15/2007 11:17:55 AM

My YM short is now at 13247 with the stop still above daily highs at 13297.

Jane Fox : 11/15/2007 11:16:24 AM

I also have a long YM at 13297 just above intraday highs.

Jane Fox : 11/15/2007 11:05:01 AM

I am looking to take a YM short at 13239 - this is a reversal and the stop is above daily highs so this trade may not fit your money management plan. You will be risking 58 points and on the DOW futures that is $290/contract.

Jane Fox : 11/15/2007 11:01:17 AM

The head and shoulders on the DOW charts is still valid with a projected target of 12616. The bears have control of the daily charts. Link

Jeff Bailey : 11/15/2007 10:57:54 AM

SPR also added 645,000 barrels.

Keene Little : 11/15/2007 10:57:25 AM

This morning's bounce looks corrective in that it's got overlapping highs and lows. We could see price continue to consolidate sideways which would point to lower prices.

Jeff Bailey : 11/15/2007 10:42:11 AM

US Oil Fund (USO) $71.70 -1.23% ...

Jeff Bailey : 11/15/2007 10:41:31 AM

NASDAQ A/D: 1074:1564 ... TRINQ 0.42

Jeff Bailey : 11/15/2007 10:41:07 AM

NYSE A/D: 1068:1944 ... TRIN 0.62

Jeff Bailey : 11/15/2007 10:37:53 AM

Disclosure: I currently hold a long position in DUG.

Jane Fox : 11/15/2007 10:36:50 AM

Once again we have the AD volume moving in the opposite direction to AD ratio. Ratio is up and the absolute is falling. This is quite interesting because it was the opposite yesterday.

Jeff Bailey : 11/15/2007 10:35:51 AM

Swing trade bearish long alert! ... for 1/4 position in the UltraShort Oil & Gas (DUG) at the offer of $43.84.

Stop goes $40.00. Target $49.50.

Jeff Bailey : 11/15/2007 10:33:05 AM

EIA: Weekly Crude Oil Inventory ... 2.8 million barrel build.

Jeff Bailey : 11/15/2007 10:24:34 AM

US Oil Fund (USO) $72.47 -0.17% ...

Jeff Bailey : 11/15/2007 10:23:43 AM

NASDAQ A/D : 1008:1576 ... TRINQ 0.43

Keene Little : 11/15/2007 10:23:27 AM

The DOW is working hard to hold onto its broken downtrend line from Oct 31st and its 60-min candle looks like it will form a bullish hammer at that support level: Link

Jeff Bailey : 11/15/2007 10:23:20 AM

NYSE A/D : 880/2082 ... TRIN 0.59

Jeff Bailey : 11/15/2007 10:07:28 AM

Barclays Capital Announces Writedowns

AP Story Link

BCS $43.05 -1.89% ...

Keene Little : 11/15/2007 9:50:00 AM

At this point it's looking like we could get the stair-stepping lower that I thought yesterday's late-day selloff needed in order to finish the pattern. I see potential support at SPX 1460 if we get a small consolidation and then drop lower to that level. Much below that and the bulls could be in trouble.

Jane Fox : 11/15/2007 9:49:45 AM

The break of yesterday's lows was disturbing to the bulls overnight but looking at the daily charts you see that the S&P cash market is not really all the bearish. I am still not long this market and will not be until it closes above 1490 and then retests it to confirm it has turned back to support. Link

Tab Gilles : 11/15/2007 9:48:28 AM

Lifeway Foods (LWAY) $11.50 -2.20 (-16.25%) Higher milk costs hurt earnings send this stock down this morning. Link

Keene Little : 11/15/2007 9:38:46 AM

Those quick rallies out of the gate are always a suspect move. Now we'll see if a test of the lows hold.

Jane Fox : 11/15/2007 9:36:59 AM

VIX has climbed to above its previous day high. The bears have control this morning.

Jane Fox : 11/15/2007 9:36:35 AM

AD line is a bearish -1228

Linda Piazza : 11/15/2007 9:30:37 AM

The same computer issues that made it difficult for me to contribute yesterday continue to do so today. I will hopefully return tomorrow.

Jane Fox : 11/15/2007 9:26:42 AM

Overnight all markets breached their previous day lows and have made a series of lower lows and highs Link

Jane Fox : 11/15/2007 9:20:05 AM

WASHINGTON (MarketWatch) -- First-time jobless claims jumped in the latest week, a possible sign of weakening in the U.S. labor market, according to government data reported Thursday.

The number of workers filing for state unemployment benefits rose by 20,000 to a seasonally adjusted 339,000 for the week ended Nov. 10, the Labor Department said.

This marked the highest level of claims in a month.

Economists had generally been expecting claims to increase, but the consensus was hovering at about 325,000.

Jane Fox : 11/15/2007 9:19:20 AM

NEW YORK (MarketWatch) -- Gold futures fell 2% on Thursday, a reversal from the prior session's strong gains, amid a rise in risk aversion and fresh credit-related troubles.

Gold for December delivery dropped $16, or 2%, at $798.70 an ounce, as metals traded broadly lower on the New York Mercantile Exchange.

"Prompted by declining equity markets and continuing credit worries, which are apparently spilling over into the consumer economy, gold prices softened considerably overnight," said Jon Nadler, an analyst at Kitco Bullion Dealers, in a research note.

Jane Fox : 11/15/2007 9:18:37 AM

WASHINGTON (MarketWatch) -- Led by energy prices, U.S. inflation increased 0.3% for the second month in a row in October.

Core prices -- which exclude volatile food and energy costs -- increased 0.2% in October, the Labor Department said Thursday. The increases matched expectations.

The core rate was boosted by a 0.5% gain in rent costs.

Energy prices increased 1.4% in October, marking the biggest increase since May. Food prices rose 0.3%, down from a 0.5% gain in the previous month.

Prices charged for medical care increased 0.6%.

In the past year, the CPI has risen 3.5% -- and at a 3.6% annual rate so far in 2007. The core CPI has risen 2.2%, above the 1%-to-2% comfort zone that Fed officials have talked about. The core CPI has risen at a 2.3% annualized pace so far in 2007.

Energy prices have advanced at a 12.3% rate in the first ten months of 2007, compared with a 2.9% gain in all of 2006.

Some Fed officials have expressed concern recently that inflation is more of a threat to the economic outlook than most economists believe.

Keene Little : 11/15/2007 9:18:37 AM

After sinking lower most of the overnight session equity futures got a bounce into the 8:30 economic reports but then sank to new lows after that. It looks like traders were not happy with the reports. At this point futures have retraced about 50% of Tuesday's big rally but clearly the bulls will need to step in early if they hope to salvage what's left of that rally.

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