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Jeff Bailey : 12/5/2007 12:34:45 AM

Index Pivot Matrix for Wednesday at this Link

Jeff Bailey : 12/4/2007 11:48:15 PM

Forex Global Econ Calendar Link

Jeff Bailey : 12/4/2007 11:47:19 PM

That might explain the VIX's jump this morning.

Jeff Bailey : 12/4/2007 11:44:49 PM

Just seeing this morning's 09:00 AM news that Canada lowered rates 25 bp to 4.25% from 4.50%. Economists were looking for no change.

Keene Little : 12/4/2007 11:41:25 PM

I had the wrong numbers (and date) on the pivot tables so I deleted those. Here are the pivot tables for Wednesday: Link and Link

Jeff Bailey : 12/4/2007 11:36:32 PM

YM CLOSED 13,271 on Tuesday.

Jeff Bailey : 12/4/2007 11:35:58 PM

YM 13,304 ... up 42 from Tuesday's settlement.

Jeff Bailey : 12/4/2007 11:32:56 PM

Corporate Leaders Upbeat on Economy

AP Story Link

Jeff Bailey : 12/4/2007 11:19:38 PM

Jane's 02:07:19 post just reminded me ... My MONTHLY Pivot levels for the $INDU, $SPX, $OEX and $RUT may not be entirely accurate as I had to try and calibrate their November highs. All highs were just after the open on November 1.

DIA, SPY and IWM were used to try and figure where respective indexes had traded.

In Jane's post you'll see how even today it looks like the $SPX and $INDU fell straight from yesterday's close, but with delayed opens on many listed stocks a more accurate "gap down" is shown in the electronic $NDX chart she posted.

Keene Little : 12/4/2007 11:41:19 PM

The multitude of 3-wave corrective moves in the pullback from last Friday's high for SPX leaves me with the distinct impression that it is in fact a corrective pullback which will eventually lead to another rally leg. There are a few ways to label the pullback so far and I'm therefore watching the downtrend lines for clues as to when the pullback has ended. For now I'm thinking SPX will drop to at least 1457 (38% retracement) if not 1447 (50%). It could bounce a little first on Wednesday morning but it should lead to another leg down before it sets up for a rally. Link

I had posted a daily chart of AAPL on Tuesday ( Link ) and after suggesting a short play on it on Friday, Nov 30th, I continue to like this one for a short play. The stop should now be just above its bounce high at 188.30. This one could be at the beginning of a 3rd wave down which should see some strong selling kick in soon if true.

The move down for NDX could be counted the same as SPX (corrective) which also suggests another rally leg so stay aware of that possibility. But I it has a little bit more of an impulsive look to it (especially if it drops to a new low Wednesday morning) and therefore supports the bearish wave count (dark red) which shows the potential for a 5-wave move down from last Friday's high. That kind of move would tell me the trend has reversed back to down: Link

In order for that bearish count to be valid we'd have to see a bounce follow the new low which then breaks out of its down-channel to give us a correction of the decline from Friday (labeled wave-2 in dark red on the chart). That would then set up the next wave down. But if price continues to stair step lower then it actually remains potentially bullish (has to do with a corrective count for the pullback) and as shown in green it could pull all the way back to its uptrend line from August just below 2000 before setting up the next rally leg to above last Friday's high. Wednesday will hopefully provide some answers.

Jeff Bailey : 12/4/2007 10:50:19 PM

Fannie Mae (FNM) $35.18 -2.95% ... last tick extended was $34.37.

Jeff Bailey : 12/4/2007 10:49:10 PM

Fannie Mae Plans To Cut Dividend, Issue Preferred Stock

DJ- U.S. housing finance giant Fannie Mae (FNM) said Tuesday that it planned to issue $7 billion in non-convertible preferred stock and cut its quarterly common stock dividend by 30% in an effort to boost capital and "conservatively manage increased risk in the housing and credit markets." The company said that its preferred stock offering would come in one or more offerings this month. The company also said that the board of directors, at a meeting next month, planned to cut its stock dividend in the first quarter of 2008 by 30% from $0.50 per share to $0.35 per share. "Fannie Mae has a responsibility to serve the mortgage market in good times and in times like these," Fannie Mae Chief Executive Daniel Mudd said. "The steps we are taking today are designed to enable us to meet that responsibility with a comprehensive, conservative plan to serve the market and manage our capital. The market needs us to be there - and we believe this plan will help us do that." In after-market trading, Fannie Mae shares dropped 3.8% immediately after the company's announcement.

OI Technical Staff : 12/4/2007 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 : 12/4/2007 7:40:08 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 12/4/2007 7:29:33 PM

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

I guess I revealed my "rip" point with the SFB-XL stop establishment today.

Jeff Bailey : 12/4/2007 7:16:35 PM

I'm probably 40/60. 40% that they have. 60% that they haven't.

I think to "call the bottom" we'd see the group gap up 7% some day on some type of news that shocks participants into buying.

Kind'a like RIMM did on 6/29/07. Oh it "ended badly." (wink)

Jeff Bailey : 12/4/2007 7:13:02 PM

What do you think?

100% certain banks haven't made a bottom?

50/50 ?

100% certain banks have more downside to go? (see today's MM commentary)

Jeff Bailey : 12/4/2007 7:10:12 PM

AXP $57.11 ... its 11/08/07 close was $56.10.

AIG $55.65 ... below its 11/08/07 close of $56.00.

JPM $44.15 ... above its 11/08/07 close of 42.61.

C $32.39 ... just below its 11/08/07 close of $32.90.

Jeff Bailey : 12/4/2007 7:06:22 PM

Hmmm ... not one of the "financial" AXP, AIG, JPM, or C below their Tuesday close.

Any of them above their 11/08/07 Morgan Stanley close?

Jeff Bailey : 12/4/2007 7:03:39 PM

MSFT $32.77 -0.45% ... Below Tuesday's close.

Jeff Bailey : 12/4/2007 7:03:09 PM

AA $35.25 -0.67% ... either side today. Closed juuust above.

Jeff Bailey : 12/4/2007 7:02:18 PM

GE $36.29 -1.73% ... below Tuesday's close.

Jeff Bailey : 12/4/2007 7:00:49 PM

MRK $58.39 -0.64% ... below Tuesday's close.

Jeff Bailey : 12/4/2007 7:00:18 PM

KO $62.75 +0.88% ... just below Tuesday's close.

Jeff Bailey : 12/4/2007 6:58:46 PM

MMM $82.09 -0.14% ... pretty much right at Tuesday's close.

Jeff Bailey : 12/4/2007 6:58:05 PM

BA $89.99 -1.96% ... below Tuesday's close. Must not be a "favorite"

Jeff Bailey : 12/4/2007 6:57:01 PM

Anyone click through their Dow components on 5-minute intervals with volume turned on? Look at Tuesday's 11:00 AM EST?

Look today and see where each of the 30 components are trading relative to last Tuesday's trade?

Jeff Bailey : 12/4/2007 6:47:56 PM

Good way for a person to really grasp what options are about is to make them buy 100 shares of the WILDEST, most VOLATILE, most CRAZY stock.

Then tell them they can only utilize options to hedge the risk.

Once they get that "mastered," then make them SHORT it where the RISK becomes unlimited.

Jeff Bailey : 12/4/2007 6:35:19 PM

XLF 1-minute interval chart with my time/sales of the DEC $29 Put, which did come at bid. Link

Don't really see XLF trade influencing an option trade in the XLF-XC, or a trade in the XLF-XC influencing XLF itself. (do option trades invfluence the underlying, or does price action in the underlying result in an option trade?)

Often times it seems traders think that VIX action predicts the outcome of a security, when it could well be that the price action of the security (up, or down) then mandates some sort of RISK be hedged with an option.

Remember! Institutions are usually SELLER of option premium, and tend to only utilize to HEDGE risk.

Jeff Bailey : 12/4/2007 6:12:48 PM

XLF Option Chain sorted by CBOE volume Link

I'm showing XLF-MB traded 54,810 all exchanges.
XLF-MZ 44,472
XLF-MC 35,397
XLF-MG 35,031
XLF-XC 32,750 (only Dec. in top 9)

Jeff Bailey : 12/4/2007 5:51:07 PM

They weren't kidding ... look at all that volume in the XLF puts today.

Jeff Bailey : 12/4/2007 5:38:14 PM

Chiquita Brands (CQB) $20.28 +8.16% ... CNBC noting 52-weeker.

Jeff Bailey : 12/4/2007 5:36:39 PM

They've gone "bananas!"

Jeff Bailey : 12/4/2007 5:32:58 PM


Jeff Bailey : 12/4/2007 5:25:13 PM

Yeah, we know of one stock that likely hit a NH.

X got the square at $78.00. That's our boy on a pullback.

MO $77.41 -0.20% ... good short? Stop just above the high? Ride the wave?

Getting close to its bullish vertical count of $81.00.

Jeff Bailey : 12/4/2007 5:20:54 PM

S&P 500 NH/NL has been running 19 NH past 4 days. NL have been 3,4,3 and 7 yesterday. Really to narrow a number with just 26 stocks to utilize a ratio. 5-day ratio has gone from 8.7% on 11/27/07 to 67.3% yesterday.

I'm going to guess 15 NH and 10 NL today.

Jeff Bailey : 12/4/2007 5:16:02 PM

NASDAQ's NH/NL finished 62:266 ... 10-day NH/NL inched up to 23.5%, but still not the needed 24.00% to get a 3-box reversal. 5-day NH/NL ratio 32.1%, so 32.00% on chart.

Jeff Bailey : 12/4/2007 5:01:17 PM

Index Pivot Matrix Recap ... I highlighted in YELLOW today's action at the various pivot levels (DAILY, WEEKLY and MONTHLY).

Note: VIX jumped HIGHER at the open, then trended lower to about 01:00 PM EST.

TRIN never did get below the "waterline" of 1.00 and hasn't seen trade below WEEKLY Pivot since moving above Monday morning. Link

Jeff Bailey : 12/4/2007 4:43:25 PM

GOOG $684.16 +0.38% Link

Jeff Bailey : 12/4/2007 4:43:20 PM

AAPL $179.83 +0.54% Link ...

Jeff Bailey : 12/4/2007 4:43:15 PM

RIMM $101.50 -3.10% Link

Jeff Bailey : 12/4/2007 4:43:10 PM

Well, you did get one heck of a wave if you shorted oil this fall. I'll give you that. Link

Keene Little : 12/4/2007 4:35:51 PM

Perhaps the better way to put it would be to say EW analysis does a good job at identifying potential tops and bottoms and makes for good trade setups since the stop can be kept close by (just above the high or below the low). That's the way I like to trade--catch the turns and ride the waves.

Jeff Bailey : 12/4/2007 4:36:20 PM

Keene ... the question (04:02:31) as I understood it was ... "maybe at a bottom? Could this be? "

As anyone that has ever followed my analysis ... I (Jeff Bailey) don't call bottoms or tops. I've gotten my share of both, but don't really try. Only an "idiot" would try to pick/call a bottom(s)/top(s) as their primary method of trading/investing. Like the October 2005. (wink)

Keene Little : 12/4/2007 4:33:51 PM

EW analysis gives one the ability to more reliably call tops and bottoms so count me as one of the idiots out there (wink).

Keene Little : 12/4/2007 4:25:23 PM

Earlier (3:14) I showed a daily chart of AAPL and suggested its bounce could be over which would have it at the beginning of the 3rd wave down. Interestingly the start of the move down for NDX has the look of an impulsive move (especially if it drops to a new low tomorrow). The bearish wave count (dark red) shows the potential for a 5-wave move down from last Friday's high. That kind of move would tell me the trend has reversed back to down: Link

In order for that bearish count to be valid we'd have to see a bounce follow the new low that breaks its down-channel and gives us a correction of the recent decline (labled wave-2 on the chart). That would then set up the next wave down. But if price continues to stair step lower then it actually remains potentially bullish (has to do with a corrective count for the pullback) and as shown in green it could pull all the way back to its uptrend line from August just below 2000 before setting up the next rally leg. Tomorrow will hopefully provide some answers.

Jeff Bailey : 12/4/2007 4:21:15 PM

VIX.X 23.79 +0.76% ...

SPX 1,462.79 -0.65% ...

Jane Fox : 12/4/2007 4:20:26 PM

Economic reports on the docket tomorrow include:

7:30a.m. Nov Challenger Layoffs. Previous: -12.0%.

8:30a.m. 3Q Revised Productivity. Expected: +6.2%. Previous: +4.9%.

8:30a.m. 3Q Revised Unit Labor Costs. Expected: -1.5%. Previous: -0.2%.

10:00a.m. Oct Factory Orders. Expected: 0%. Previous: +0.2%.

10:00a.m. Oct Pending Home Sales. Previous: +0.2%.

10:00a.m. Nov ISM Non-Manufacturing Business Index. Expected: 55.0. Previous: 55.8.

Keene Little : 12/4/2007 4:15:55 PM

Jeff, if you don't mind I'd like to offer my opinion (and that's all it is) on the last part of the reader's question on banks--no, we're not near a bottom yet. The EW pattern has some stair-stepping lower to do before I'd be comfortable calling a bottom. I do think we're closer to a bottom than we were this summer (wink).

Jeff Bailey : 12/4/2007 4:02:31 PM

Email PnF question

My question is about p n f charts. It seems to me that when there is a target suggested for a stock the price never gets there up or down. Take a look at zion please. Double top breakout on nov 29 with a target price of 68.00. What is the chance of this stock making it there?

Last question in your market wrap you mentioned about the banks maybe at a bottom? Could this be?

Jeff's Reply ... Here's the PnF chart of ZION at this Link

In early May (blue 5), ZION generated a reversing lower PnF sell signal (a triple bottom sell signal too) and the resulting column of O (10 of them) had the BEARISH vertical count suggesting downside RISK to $65. That target, and THEN SOME was achieved.

Now for the BULLISH vertical count, which is still under construction until we see a 3-box reversal.

I have learned to "discount" bullish vertical counts that come BELOW trend, but they are USEFUL for RISK/REWARD assessment.

I also tend to "discount" a bullish vertical count when the SECTOR is "bear confirmed."

The BULLISH vertical count suggests a higher target of $68.

IF I buy the stock here at $53.00, what is the DOWNSIDE RISK to a "sell signal?" Answer: $7. IF I buy the stock here and ZION does trade $68.00, what's my UPSIDE REWARD? Answer: $15.

Is ZION's current RISK/REWARD favorable (for bull or bear?) Answer: Bull= RISKING $7 to make $15. Bear= RISKING $15 to make ?????.

As for any comments, or PROFILED TRADES I have made that have me looking for a bottom in the banks.

Yes! This could be. However, if it is to be, ZION probably shouldn't trade $48. XLF should also get back above 10/31/07 benchmark bull entry point of $33.41.

Here's Dorsey's BPBANK Link

Jane Fox : 12/4/2007 3:45:47 PM

SPX bulls would like to see the swing low at 1440 act as support on any further declines. If it does then you have the reverse H&S I was talking about earlier. Link

Keene Little : 12/4/2007 3:44:23 PM

Both the DOW and SPX are dropping towards their 30-min 100/130-pma's near today's low so that might be all the bears will be able to do today. I see additional downside perhaps tomorrow morning so I'm not interested in any long plays yet. Stay short for now.

Jeff Bailey : 12/4/2007 3:37:40 PM

Discussion on CNBC regarding activity in puts on XLF. Excellent comments ... "not all are being purchased....."

Keene Little : 12/4/2007 3:27:18 PM

This is one ugly rally attempt in the past hour but the bears sure haven't been able to do anything. Seems like just enough buying keeps coming in to keep the bears at bay.

Jeff Bailey : 12/4/2007 3:20:48 PM

VIX.X 23.38 ... nears its session low (23.35)

Jeff Bailey : 12/4/2007 3:20:17 PM

YM 13,305

SPY 147.04

Jeff Bailey : 12/4/2007 3:19:56 PM

TRIN 1.08 ... near's session low (1.07)

NYSE A/D 1,305/1,936

Keene Little : 12/4/2007 3:14:15 PM

AAPL and GOOG look very similar here and they're not bullish. After a 3-wave bounce from its November low, AAPL found resistance very near the level where the a-b-c bounce had two equal legs up at 186.27. If that completed a larger degree 2nd wave correction to wave-1 down in November, then wave-3 down is next and it could see some very heavy selling soon. Link

Keene Little : 12/4/2007 3:04:19 PM

The move down from last Friday's high leaves open several possibilities as to what's playing out. Based on today's pattern I think it will head lower still but this choppiness is making it very difficult (for both sides). For now I'm watching trend lines to give me a heads up for a change in trend which right now is still down. Link

Jeff Bailey : 12/4/2007 3:02:13 PM

At last night's close, that SPQ-XT showed OI of 145,031. So, that was probably a "sell to open" trade.

What does VIX do with PUT SELLING?

Jeff Bailey : 12/4/2007 2:58:15 PM

Here's that SPX option chain from 11/21/07 with crazy 1,000 put trade Link

Keene Little : 12/4/2007 2:49:02 PM

This very choppy attempt to hold at the low should be followed by another leg down.

Jeff Bailey : 12/4/2007 2:45:30 PM

I wouldn't use VIX.X as an internal anymore than I would use MACD as an internal. Main reason is that it isn't an internal.

Jeff Bailey : 12/4/2007 2:44:23 PM

William! Implied Volatility coming in. Note VIX just about equal to our 11/29/07 capture.

Keene Little : 12/4/2007 2:38:20 PM

If SPX tests today's broken uptrend line, currently near 1466.50 (cash) and fails, that will be a good place to get short.

Jeff Bailey : 12/4/2007 2:39:41 PM

SPY Dec. Option Montage with OI as of yesterday's close (Volume is CBOE Only) Link

SPY Montage from 11/29/07 at this Link

Jane Fox : 12/4/2007 2:29:38 PM

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

Jane Fox : 12/4/2007 2:21:41 PM

And I might add a leading internal.

Jane Fox : 12/4/2007 2:21:17 PM

Indeed the VIX is not an internal but why not use it as an internal?

Jeff Bailey : 12/4/2007 2:20:25 PM

VIX isn't an internal. It is a measure of put buyers/call sellers vs. call buyers/put sellers.

Can make the VIX.X dart lower by selling SPY $100 puts.

Keene Little : 12/4/2007 2:17:57 PM

After gapping down this morning both the banks and the brokers look like they've been consolidating in continuation patterns which points to lower prices for those two as well.

Jane Fox : 12/4/2007 2:17:43 PM

The VIX is not 100% and if you are looking for 100% here then you are playing in the wrong sandbox. However, I have been trading for many many years (too many to tell you the truth) and have never found anything quite as reliable.

Jeff Bailey : 12/4/2007 2:16:38 PM

YM 13,289

Jane Fox : 12/4/2007 2:16:13 PM

Trade against the VIX at your own peril.

Jeff Bailey : 12/4/2007 2:16:13 PM

TRIN 1.24 ...

NYSE A/D 1,191/2,031

NH/NL 38:181

Jane Fox : 12/4/2007 2:15:55 PM

Jeff yes the VIX can give some poor reads at times but of all indicators I have found the VIX, without exception, to be the most reliable internal there is.

Jeff Bailey : 12/4/2007 2:13:46 PM

Market makers are a tricky bunch and VIX.X can give some very poor reads for day traders.

Keene Little : 12/4/2007 2:13:34 PM

Now that the DOW and SPX have broken below today's bear flag patterns we should see new daily lows. SPX 1457 could be the next stop (38% retracement and Aug-Nov 12th uptrend line).

Jeff Bailey : 12/4/2007 2:13:14 PM

One might also say ... "the VIX.X not confirming the a/d"

Jeff Bailey : 12/4/2007 2:11:43 PM

Good adjustment Jane! Saw it yesterday at YM 13,400.

Jane Fox : 12/4/2007 2:07:19 PM

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

Jane Fox : 12/4/2007 2:02:34 PM

Here is a very good example of why you need to watch no only the AD volume (like I used to do) but also the ratio. Notice how the AD volume is making new daily lows and is NOT confirming the VIX. Now take a look at the AD ratio and you will see that it is confirming the VIX. Bullish days will see both the AD volume and ratio moving in the same direction and opposite to the VIX but choppy days with a bullishness underlying will look like this. Link

Jeff Bailey : 12/4/2007 1:57:58 PM

Jimmy C might be hard at work ...

Keene Little : 12/4/2007 1:49:24 PM

Trannies getting another bounce here and they've just moved up into the green.

Jeff Bailey : 12/4/2007 1:47:36 PM

Can introduce some "noise" and change your box size from conventional 10-point to a 5-point box Link

Jeff Bailey : 12/4/2007 1:46:38 PM

S&P 500 Index (SPX.X) 1,466.65 -0.39% Link ... Session high/low so far has been 1,471.34 / 1,460.66.

Jeff Bailey : 12/4/2007 1:44:21 PM

Hang Seng ($HSI) Link ... finished up 221 points, or +0.77% at 28,879.

Session high/low was 29,020 / 28,545.

No change on chart.

Jeff Bailey : 12/4/2007 1:36:30 PM

UltraShort Oil & Gas (DUG) $42.50 +1.67% ... sure has been quiet last four (4) sessions hasn't it?

Jeff Bailey : 12/4/2007 1:33:22 PM

Haven't budged since 11/28 have we?

Jeff Bailey : 12/4/2007 1:31:43 PM

YM 13,304 ...

Keene Little : 12/4/2007 1:29:06 PM

NDX has now broken today's uptrend line which makes it possible that the bounce is finished. But with the overlapping price action all day, and not a clear finish to the upside, it leaves me guessing as to what's next. And when I'm guessing I'm flat. If forced to trade I'd be short here with a stop above today's high, or for NDX a stop just above its broken uptrend line.

Jeff Bailey : 12/4/2007 1:23:59 PM

TRIN 1.28 ...

NYSE A/D 1,281/1,924

NH/NL 35:175

Keene Little : 12/4/2007 1:15:32 PM

This is a choppy mess. Now it's pulling back more than I would have expected if it was to make the upside targets for two equal legs up. Draw a parallel up-channel for today's price action and that's the bear flag we're in--short the break down from it or buy a break out the top of it (watch for a head fake move though).

Jeff Bailey : 12/4/2007 1:11:58 PM

VIX.X 23.56 -0.21% ... session high has been 24.59. Right at that correlative WEEKLY Pivot and MONTHLY Pivot.

Jeff Bailey : 12/4/2007 1:09:19 PM

Mentioning 10-year Treasury Yield ($TNX.X) on CNBC. This will also be key to my "dip" and "rip."

Has seen trade at WEEKLY S1.

Outside of dollar strength (foreign inflows of capital to US), need some cash out of treasuries.

Keene Little : 12/4/2007 1:03:16 PM

Another reason SPX could find resistance around the 1470-1471 area is that's the level of the lows the previous two days.

Jeff Bailey : 12/4/2007 1:01:13 PM

Delta Cuts 4Q Margin Guidance, Cites Fuel Costs

DAL $18.79 -4.03% ...

Jeff Bailey : 12/4/2007 12:56:39 PM

Florida Muni Investment Pool: Some Limits On Withdrawals

DJ- A Florida-run investment pool for local governments will reopen this week to give the investors critical access to their cash. However, the head of the agency that manages the fund resigned Tuesday amid questions about the pool's troubles. The State Board of Administration voted unanimously to unfreeze the account as early as Thursday, with certain restrictions, freeing some of the money that governments have in the fund. It was shut down last week after governments withdrew nearly $10 billion, or about 40% of the fund's assets. The run was caused by a panic over the safety of certain mortgage-backed securities the fund had invested in. The freeze was problematic for many governments, which needed money in the fund to make payroll or make payments on bills coming due. While voting to unfreeze the account, the board agreed with outside consultants that there will be limits on how much local governments - ranging from utilities to school boards - can withdraw. The fund will also be split in two, isolating troublesome mortgage-backed securities held in the fund in a small stand-alone pool. That will keep the higher-rated securities untainted. A few minutes after the state board voted to reopen the fund, SBA Executive Director Coleman Stipanovich said he was stepping down. Stipanovich has been under scrutiny as local governments have asked why the local investment pool was holding some investments that had dramatically lost market value based on downgrades of their credit quality.

Keene Little : 12/4/2007 12:53:44 PM

Rallying a little higher now changes the pattern a little bit since the decline from yesterday's high looks more like a 3-wave move. We might be in a larger sideways/down correction and if so watch for where today's bounce will have two equal legs up for another reversal back down. That would be at DOW 13331 and SPX 1470.48. Gap closure for those two could also be an upside target. It takes a rally above yesterday's high to say the next rally leg may have already started.

Jane Fox : 12/4/2007 12:46:16 PM

VIx is making new daily lows and I suspect S&P futures will follow with new daily highs. Link

Jeff Bailey : 12/4/2007 12:36:26 PM

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

CLOSED out the RIO-XT at $0.25 (bought it back).

Lowered TARGET on CHA-LT to $96.00 in the underlying shares.

Established STOP on the SFB-XL at $148.40 in the underlying security.

Jeff Bailey : 12/4/2007 12:26:44 PM

Swing trade call lower target alert! ... for the one (1) China Telecom CHA Dec $100 Call (CHA-LT) to $96.00 in the underlying (from $110).

CHA-LT $0.25 x $0.60.

CHA $81.60 +3.21% ...

Jeff Bailey : 12/4/2007 12:22:10 PM

Swing trade put establish stop alert! ... for the one (1) S&P Dep. Receipt SPY Dec. $142 Put (SFB-XL) to $148.40 in the underlying.

SPY $146.97 -0.48% ...

SFB-XL is $1.40 x $1.41.

VIX.X 23.67 +0.25% ...

Keene Little : 12/4/2007 12:21:46 PM

Please tell me the market's not going to be like this until the 11th.

Jane Fox : 12/4/2007 12:12:48 PM

Here is a chart of the SPX and as you can see a 50% retracement of the decline from yearly highs is right at 1490. Link

Jeff Bailey : 12/4/2007 12:11:50 PM

Microchip Tech Prices $1.03 Billion 2.125% Convertible ... Company Press Release Link

MCHP $29.16 -1.81% ... #2 most active at the NASDAQ.

Jeff Bailey : 12/4/2007 11:49:13 AM

Forest Labs (FRX) $37.78 +0.93% ... comes to its WEEKLY Pivot ($37.78).

Jeff Bailey : 12/4/2007 11:41:49 AM

SPY $146.71 -0.65% ...

Jeff Bailey : 12/4/2007 11:41:34 AM

Simon Property Group (SPG) $94.79 -2.51% ... at its WEEKLY Pivot ($94.76).

Keene Little : 12/4/2007 11:37:05 AM

There's not much happening here but this morning's bounce continues to look weak. I like the short side here but want to see if we get a long play to set up with a new low.

Jeff Bailey : 12/4/2007 11:13:26 AM

Baidu.com to Join NASDAQ-100 Tuesday ... MarketWatch Story Link

BIDU $392.93 +1.99% Link ...

Jeff Bailey : 12/4/2007 11:05:37 AM

That deserves a "good gravy!"

Jeff Bailey : 12/4/2007 11:03:39 AM

Good Energies to raise stake in China's Solarfun Power ... Reuters Story Link

SOLF $26.16 +27.47% Link ...

Jeff Bailey : 12/4/2007 10:56:42 AM

Boeing (BA) $90.97 -0.89% ...

Jeff Bailey : 12/4/2007 10:56:11 AM

Southwest Air Cuts 2008 Capacity-Growth Outlook

DJ- Southwest Airlines Co. (LUV) reduced its projected 2008 capacity growth a day after rival Continental Airlines Inc. (CAL) did the same, saying it forecasts a slower 2008 for the airline business. The Dallas company projects a capacity increase of 4% to 5% and predicts increasing its fleet by five to 10 aircraft. The company - facing a growing profit squeeze - said in June it would curtail its rapid growth and add fewer planes to its fleet, part of a push to retool a company model that has become less effective in a more-competitive environment. At the time, that included cutting projected capacity growth both this year and next to 6% from 8%. The June forecast would have meant increasing Southwest's fleet in 2008 by 19 planes. Chief Executive Gary C. Kelly said Tuesday that Southwest is "concerned about growing evidence of slowing economic growth that would inevitably affect passenger demand, coupled with a surge in energy prices." He added, "This more conservative growth rate will aid us in our efforts to drive improved profits next year. Further, it allows us time to realize benefits from our various 2007 and 2008 revenue initiatives in our ongoing efforts to overcome rising operating costs." Southwest also noted Tuesday that capacity in November increased 6.4% while load factor, or percentage of seats filled, fell to 69.3% from 71.8% a year earlier. Continental cut its 2008 capacity-growth forecast at its mainline operations to 2% to 3% from 3% to 4%, with domestic capacity being "down slightly." Continental cited "the recent significant rise in the cost of jet fuel" for its outlook reduction.

LUV $13.77 +0.21% ...

CAL $27.56 +1.06% ...

Keene Little : 12/4/2007 10:40:15 AM

This morning's bounce is looking less than bullish to me. I'm thinking we can expect a new daily low at which time I'll be watching it carefully for the long play setup.

Jeff Bailey : 12/4/2007 10:37:32 AM

dip buyers were aggressive at QQQQ $50.38 weren't they? Last Tuesday's regular session high was $51.05.

Testing WEEKLY Pivot from underneath here.

Jeff Bailey : 12/4/2007 10:27:51 AM

VIX.X 24.17 +2.37% ...

Jeff Bailey : 12/4/2007 10:27:17 AM

Swing trade covered put close out alert! ... let's buy back the one (1) Companhia Vale do Rio Doce RIO Dec. $28.75 Put (RIO-XT) at the offer of $0.25.

RIO $34.27 -1.80% ...

Keene Little : 12/4/2007 10:24:57 AM

Two equal legs down for the DOW from last Friday's high is at 13226 so if we get a minor new low today that's the level I'd watch closely for a setup to get long. The 5-wave move up from Nov 26th should be followed by another rally leg and so far the pullback has been looking corrective. Therefore a 3-wave correction of last week's rally is a good setup for the long side. The only question at that point (assuming it will rally) is whether it immediately rallies to a new high (above last Friday's) or only bounces as part of a larger sideways/down correction.

Jane Fox : 12/4/2007 10:09:14 AM

AD line is a bearish -1188.

Keene Little : 12/4/2007 10:08:22 AM

From short term perspective the pattern of the drop from yesterday would look best with another new low. If that new low (assuming we get it) is accompanied by bullish divergences then I'd look to buy it. SPX 1457 continues to look like a good possibility if that happens.

Jane Fox : 12/4/2007 10:05:54 AM

The US$ found resistance right on cue but I think it will make a higher low thus a reverse H&S (this resistance will be your neckline) and head higher. Link

Jane Fox : 12/4/2007 9:45:27 AM

Of course it is the same story for the DOW. Link

Keene Little : 12/4/2007 9:44:23 AM

NQ has dropped into its Nov 28th gap and is currently bouncing up to the top of the gap at 2062. If this holds as resistance this morning then there's a good chance it will drop down to close its gap at 2032.75.

Jane Fox : 12/4/2007 9:44:16 AM

I expected SPX to hit resistance at 1490 and retrace some of the rally from last week. Then yesterday I mentioned that SPX was in your basic sideways pattern and that was bullish - a sideways consolidation at highs is bullish. Today however we are seeing that sideways consolidation breakdown and my original scenario is starting to play out.

I will be neutral until I see the bulls close above 1490 or the bears close below the November 26th lows Link

Jane Fox : 12/4/2007 9:37:41 AM

Crude is finding resistance at $90.00. Link

Jane Fox : 12/4/2007 9:33:19 AM

Gold is getting a nice bounce thanks to the US$ falling. Link

Linda Piazza : 12/4/2007 9:32:54 AM

I'll be away from my desk today but should be back tomorrow. If the cash markets decline in accordance with the futures' action, remember that potential inverse H&S on the SPX. If that potential scenario I outlined yesterday morning plays out, then support might be found in the right-shoulder area, an area yet to be built. So support first in the 1470-1472 zone, support that's being broken even as I type, and then in the 1440-1445 zone, a zone that would build a right shoulder symmetrical with the left. Remember that even if we see this potential, inverse formations are sometimes invalidated when right-shoulder support gives way. We can't count on it unfolding this way, but do be aware of the choppy nature of the right-shoulder area on a potential inverse H&S.

Keene Little : 12/4/2007 9:31:17 AM

The first downside target for SPX, for two equal legs down from last Friday's high is at 1463. That should get tagged right after the open. Then 1457 below that.

Keene Little : 12/4/2007 9:25:17 AM

On last night's NDX chart I pointed out 2045 as a level that I thought could be support if tagged. That's 23 points below yesterday's close. NQ is currently down 21 points which makes me wonder if we'll get a gap down followed by a rally. If NDX 2045 doesn't hold then the next downside Fib targets would be 2040 (62% retracement) and then keep an eye on gap closure at Nov 27th's closing price of 2032.

Jane Fox : 12/4/2007 9:11:05 AM

Crude bounced off $90.00/bl overnight and looks like it is heading for another try.

US$ stumbled and can't get up giving a shot in the arm to the Gold market. Link

Jane Fox : 12/4/2007 9:03:22 AM

A series of lower lows and highs tells you the trend is down and that the bears have control.

All markets broke their previous day lows overnight and are now struggling to climb back into that range. Link

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