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Jeff Bailey : 12/6/2007 11:42:08 PM

Closing U.S. Market Watch found at this Link

Keene Little : 12/6/2007 11:35:11 PM

Friday's pivot tables: Link and Link

I've been expecting the bounce off the November low to be a 3-wave correction of the Oct-Nov decline (or some variation of that) and right now we've got the 2nd leg up in progress. For SPX the 2nd leg up will achieve 62% of the 1st leg (normally a good first Fib target) at 1513.41 (it's 1511.86 if the projection is taken from Tuesday morning's low instead of the afternoon low as shown on this 60-min chart): Link

The lower Fib projection at 1511.86 is interesting because it's right on top of the 62% retracement of the Oct-Nov decline and very near the downtrend line from the October high. If it manages to push above this level then the next projection is up at 1543, near the 78.6% retracement at 1540, shown on the daily chart: Link

NDX could be forming a rising wedge since the Nov 12th low which would mean only a little higher before its bounce tops out at a Fib projection and 62% retracement lined up at 2141-2142 (60-min chart): Link . If the market keeps rallying then the next upside Fib target is around 2180 which would be near the top of a parallel up-channel as shown on the daily chart: Link

I had posted the following at the end of Thursday in case you missed it--I'm watching GOOG and AAPL for indications for whether NDX could finish at the lower or higher target. I think they're both pointing at the lower:

Watching two high flyers in the NDX, GOOG and AAPL, for some signs of what might be happening in that index supports the idea that the current rally is not long for the world. For GOOG the bounce off its November low has overlapping highs and lows within the bounce. That gives the bounce a corrective look to it and it's got the makings of a rising wedge. Ideally this could use a quick pullback and new high around 725 to finish the pattern and I'm counting the move up from its November low as a 2nd wave correction to the November decline: Link

AAPL is in a similar pattern but it looks like it's going to challenge/break its November high. There are a couple of ways to count the two of these (such as wave-A down to the November low, wave-B bounce from there and then wave-C down will be the next move) but for now I like the count on this AAPL daily chart which shows the current rally as the final 5th wave of its bull market run from early 2003: Link

The rising wedge and negative divergence, very typical for a final 5th wave, support this count. The internal Fib projections for the move up, including inside the last leg up from Dec 4th, point to 193-194 as a resistance level for the end of the rally so watch for that on Friday. This 60-min chart shows the wave count inside the rising wedge. For EW'ers, note the corrective counts for each of the waves--each of the 5-waves needs to be a corrective count inside any triangle pattern and the overlapping highs and lows within each move makes this count look clean: Link

OI Technical Staff : 12/6/2007 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 : 12/6/2007 5:44:34 PM

GRMN +30% Link , AMZN +21% Link , PCAR +17% Link , AAPL +15.6% Link , GOOG +13.5% Link last 20 sessions.

DELL -7% Link , CMCSA -7% Link , CELG -7% Link , SHLD -5.75% Link , CSCO -5% Link last 20 sessions.

Jeff Bailey : 12/6/2007 5:21:41 PM

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

Stopped on the DUG at $40.00.

Revised LOWER target for FHA-AH to $41.50 in underlying.

Keene Little : 12/6/2007 5:05:18 PM

Watching two high flyers in the NDX, GOOG and AAPL, for some signs of what might be happening in that index supports the idea that the current rally is not long for the world. For GOOG the bounce off its November low has overlapping highs and lows within the bounce. That gives the bounce a corrective look to it and it's got the makings of a rising wedge. Ideally this could use a quick pullback and new high around 725 to finish the pattern and I'm counting it as a 2nd wave correction to the November decline: Link

AAPL is in a similar pattern but it looks like it's going to challenge/break its November high. There are a couple of ways to count the two of these (such as wave-A down to the November low, wave-B bounce from there and then wave-C down will be the next move) but for now I like the count on this AAPL daily chart which shows the current rally as the final 5th wave of its long bull market: Link

The rising wedge and negative divergence, very typical for a final 5th wave, support this count. The internal Fib projections for the move up, including inside the last leg up from Dec 4th, point to 193-194 as a resistance level for the end of the rally so watch for that on Friday. This 60-min chart shows the wave count inside the rising wedge. For EW'ers, note the corrective counts for each of the waves--each of the 5-waves needs to be a corrective count inside any triangle pattern and the overlapping highs and lows within each move makes this count look clean: Link

Jeff Bailey : 12/6/2007 4:55:45 PM

Swing trade call lower target alert! ... for the Forest Labs FRX Jan $40 Call (FHA-AH) to $41.50 (from $43.50)

FRX $37.24 -1.11% ... FHA-AH are $0.75 x $0.85.

Jane Fox : 12/6/2007 4:34:28 PM

Economic Reports for Tomorrow include:

8:30a.m. Nov Nonfarm Payrolls. Expected: +78K. Previous: +166K.

8:30a.m. Nov Unemployment Rate. Expected: 4.8%. Previous: 4.7%.

10:00a.m. Mid-Dec Reuters/U Of Mich Sentiment Index. Expected: 75.0. Previous: 76.1.

3:00p.m. Oct Consumer Credit. Expected: +$5.0B Previous: +$3.7B.

Keene Little : 12/6/2007 4:33:01 PM

Following my updated SPX daily chart, here's the 60-min chart showing closer detail of what we could see tomorrow morning--a brief pullback in the morning (a little disappointment from the job report?) and then a final rally leg into the afternoon to hit the resistance just under 1512 (with the potential to head higher as per the pink wave count): Link

Jeff Bailey : 12/6/2007 4:24:12 PM

Jan'08 Fed Funds (ff08f) 95.84 ... (100 - 95.84) = 4.16%

Jeff Bailey : 12/6/2007 4:22:34 PM

December Fed Funds (ff07z) 95.75 ... (100 - 95.75) = 4.25%

Jeff Bailey : 12/6/2007 4:20:21 PM

NDX Option Chain sorted by CBOE most active Link ... A different look to OI here. A little more evenly matched.

I posted some volume in BLUE as to all exchange trade volume today.

Jeff Bailey : 12/6/2007 4:13:56 PM

Anyone listening to the "bear" on CNBC ... His facts all wrong.

Hates ARM freeze as it allows some to "cap their arm at 2%."

"Bull" guest set him straight.

Jeff Bailey : 12/6/2007 4:00:14 PM

CNBC ... "stock market is not crazy"

Jeff Bailey : 12/6/2007 3:58:05 PM

QQQQ Option Chain sorted by most active Link

Option Market makers might be in a position to make some coin this month.

Jeff Bailey : 12/6/2007 3:53:42 PM

Zion's Bank (ZION) $56.00 +2.70% ... X gets the square.

Linda Piazza : 12/6/2007 3:53:08 PM

I will be away from my desk tomorrow, returning to the MM Monday.

Jeff Bailey : 12/6/2007 3:44:35 PM

At last night's close, QQQQ Dec. OI heaviest at Dec $50 Put, Dec $49 Put, Dec $48 Put, Dec $47 Put, Dec $55 Call.

Jeff Bailey : 12/6/2007 3:41:42 PM

QQQQ $52.25 +1.31% ...

Keene Little : 12/6/2007 3:41:18 PM

Looking at the SPX daily chart from last night's Wrap, updated for today, you can see it's now close to potential resistance at its downtrend line from October and 62% retracement, both in the 1511-1512 area. Harder to see is that the 62% retracement at 1511.76 is also the same level where the 2nd leg up in the bounce off the November low is equal to 62% of the 1st leg up (at 1511.86): Link

The 3-wave bounce off the November low could satisfactorily complete the correction of the Oct-Nov decline at that point. So a strong decline from there is possible (maybe a brief post-jobs report rally and then failure tomorrow morning?). If that were to happen then it would be a matter of figuring out whether it will just pullback and then rally into the end of the month (as shown in pink) or just keep truckin' in the southbound lane.

Jeff Bailey : 12/6/2007 3:40:46 PM

VXN.X 25.23 -6.24% ... looks like more call buyers/put sellers than call sellers/put buyers.

Jeff Bailey : 12/6/2007 3:39:58 PM

QQQQ most active options ... Dec $52 Put, Dec $50 Put, Dec $51 Put, Dec $51 Call, Dec $52 Call.

Jeff Bailey : 12/6/2007 3:29:52 PM

Re-post of Treasury Secretary Paulson's Statement Link

This is a private sector effort, involving no government money; so some may ask "Why are these government officials here today?" We are here because we all know that it is in everyone's interest - homeowner, servicer, investor - to develop a market-based approach to avoid foreclosures that are preventable.....

Jeff Bailey : 12/6/2007 3:26:50 PM

CNBC ... "Government intervention on housing market."

Linda Piazza : 12/6/2007 3:22:04 PM

Perhaps I don't need to remind anyone that the most important economic release of the week occurs tomorrow morning before the open--the employment number. Predictions for the number as well as the ADP's assessment of where it might be have been all over the place, but the ADP certainly hiked hopes that the number wouldn't be too bad, as in too low. Whereas the market might have been prepared for a small add of 60,000-70,000 before the ADP, I don't know that it's prepared now. Before the close, assess how much of your bullish gains you're willing to risk on a number with predictions all over the place. If you're in December calls, for example, what if you get caught in a downdraft tomorrow that would be nothing more than a pullback to retest some of the levels that the markets just zoomed through today. What if that happens and then prices stall Monday ahead of Tuesday's FOMC meeting? What's going to happen to your premium? Are you okay with what might happen?

Of course, I have no idea what that number will be tomorrow morning. Economists can't even agree? And the market's reaction? If it's low, will markets be glad that the Fed can go ahead and ease next week or will a shocking number shock markets, too? If it's too high, will markets worry that our Fed will do what the ECB did and hold steady, although that's going to be hard for the FOMC to do after signaling pretty clearly that it was going to cut? Anyway, just assess your risk and make decisions appropriate for you.

If you plan on stepping out of partial or full position, locking in some or all of your gains, be snugging your stops up under the rising prices so if a sudden downdraft should occur, you're taken out near the high.

Jeff Bailey : 12/6/2007 3:13:40 PM

US Dollar Index (DXY) 76.41 (unch) ... did see trade at its 50-day SMA (76.80) this morning. WEEKLY R1 (76.65) violated for all of 15-minutes.

Jeff Bailey : 12/6/2007 3:07:12 PM

50-day SMA alert! ... DJUSHB 341.03 +10.73% ...

Jeff Bailey : 12/6/2007 3:05:27 PM

Symantec (SYMC) $17.97 +0.39% ...

Jeff Bailey : 12/6/2007 3:05:01 PM

McAfee (MFE) $39.72 +2.98% ... decent put trade from 10/25/07 entry of $38, close at $35.05 on 11/19/07.

Jeff Bailey : 12/6/2007 3:02:43 PM

NYSE 10 WK Bullish % ... at last night's close, Dorsey/Wright's was "bull alert" at 33.97%. That is, of the stocks traded on the NYSE, just 33.97% were above their 50-day SMA.

Keene Little : 12/6/2007 3:02:37 PM

While SPX could find resistance around 1502, the DOW might find it around 13585 where it will have two equal legs up from Tuesday. It has broken above its downtrend line from October though and that's bullish.

Linda Piazza : 12/6/2007 3:01:54 PM

One after another, led by the usual leaders--the TRAN, then RUT and, finally, the SOX--indices have moved up to meet and even exceed their Keltner targets on their 15-minute charts. Now the SPX has done so, too, with that target at about 1500.50 and with the SPX now at 1500.34. To confirm strength, the TRAN has reached a new high of the day, although as several of us have mentioned, its testing resistance on the daily chart. As long as 15-minute closes are above the 9-ema on the SPX's chart, now at 1495.83, the SPX's short-term uptrend, established yesterday afternoon at about 2:00, remains in place.

Jeff Bailey : 12/6/2007 3:00:37 PM

OTC 10 WK Bullish % ... at last night's close, Dorsey/Wright's was "bull alert" at 29.00%. That is, of the stocks traded on the NASDAQ, just 29% were above their 50-day SMA.

Jeff Bailey : 12/6/2007 2:54:34 PM

RUT.X 783.36 +2.31% ... only major to not see trade at its 50-day SMA (797)

Jane Fox : 12/6/2007 2:49:11 PM

Hopefully some of you jumped on the USO trade I talked about this morning. I will trade this market with options for the leverage.

Keene Little : 12/6/2007 2:47:47 PM

Definitely looks like some short covering here. Either that or someone knows something. Nah, that kind of information never gets leaked to anyone before the scheduled release of the data. I just know everyone plays by the rules.

Jane Fox : 12/6/2007 2:46:56 PM

I think we will get our close above 1490 today.

Jane Fox : 12/6/2007 2:46:43 PM

Bulls are busting out all over.

Jeff Bailey : 12/6/2007 2:45:56 PM

On 08/24/07, QQQQ closed juuuuuust above a similar 50-day SMA. "Slipped" next two sessions, then "ripped" higher.

Keene Little : 12/6/2007 2:44:40 PM

Maybe SPX will get parked on its 50-dma (just under 1502) today so as to keep both sides guessing. Each side will have their trades placed and stops set and a stop run could create a big move in the morning.

Jeff Bailey : 12/6/2007 2:44:18 PM

50-day SMA alert! ... QQQQ $52.11 +1.04% ...

Jeff Bailey : 12/6/2007 2:40:11 PM

US Oil Fund (USO) $71.00 +3.36% ... mounts a charge.

Jeff Bailey : 12/6/2007 2:38:43 PM

Bernanke: Process For Modifying Mortgages "Welcome Step"

DJ- U.S. Federal Reserve Chairman Ben Bernanke called the process for modifying subprime mortgages announced Thursday by the Bush administration "a welcome step." "The streamlined process for refinancing and modifying subprime adjustable rate mortgages announced today is a welcome step in helping Americans protect their homes and communities from the consequences of unnecessary foreclosures," Bernanke said in a statement released by the Fed.

Keene Little : 12/6/2007 2:36:35 PM

For SPX, two equal legs up from Tuesday is at 1498.75 so that should be resistance if this is to be just part of a larger corrective pullback.

Jeff Bailey : 12/6/2007 2:35:48 PM

That's part of it ... reporter asking what good the "5-year" plan does longer term?

Paulson states on part is it gives time for BORROWER to improve their credit rating, so in time, become a more attractive candidate.

5-years may also be time for housing cycle to turn.

Jeff Bailey : 12/6/2007 2:32:27 PM

What I like about the 5-year "freeze" is that it looks as if it might impact LENDERS from pushing the product. Part of this mess sounds as if LENDERS didn't verbally tell some BORROWERS of the RISK (even though it was all there in the legal document).

Jane Fox : 12/6/2007 2:28:59 PM

Internals are telling you the bulls have the ball today. Link

Linda Piazza : 12/6/2007 2:27:48 PM

I'll be away from my desk for about thirty minutes.

Linda Piazza : 12/6/2007 2:27:34 PM

SPX 15-minute 9-ema is now at 1492.75. Now that the lunchtime lull is past, short-term bulls would like to see that hold as support on 15-minute closes. For the OEX, that same potential support is at about 695.

Jeff Bailey : 12/6/2007 2:29:08 PM

One of my best friend's brother is caught up in the ARM mess. Mortgages the house to the hilt with a easer 1%, and it is now at 10%. House has fallen in value, can't refinance.

Pays what he can, but wishes bank would repo so he can get on with life.

Crazy think is that his father is one of the brightest financial minds I know.

I thought my parents were "idiots" until I was about 24 years old. Then some things they said actually started making sense in the real world.

Keene Little : 12/6/2007 2:25:43 PM

The little bit of selling was quickly thwarted with a buy program across the board. There are probably not many who want to be short in front of tomorrow's jobs number so any buying this afternoon spikes them out quickly.

Jeff Bailey : 12/6/2007 2:23:52 PM

Bush Unveils Plan to Stop Foreclosures ... AP Story Link

Keene Little : 12/6/2007 2:17:58 PM

The setup for SPX is the same as I showed for the DOW (as far as either getting a rally directly from here or after another pullback): Link

Linda Piazza : 12/6/2007 2:15:13 PM

New high on the RUT as it breaks above the Keltner resistance that is now at 778.02 on 15-minute closes. The SOX is also attempting a breakout above Keltner resistance at 425.98 on 15-minute closes.

Jeff Bailey : 12/6/2007 2:15:07 PM

Interesting ... CNBC saying they're polls show American NOT IN FAVOR of government role in a bail out.

Of course, it is an INVESTMENT news audiance undoubtedly.

Here in the market monitor I've seen unsourced polls stating just the opposite. Perhaps socialist news network?

Linda Piazza : 12/6/2007 2:10:21 PM

Are you in December credit spreads or condors? Are you worried about what will happen next week when the FOMC meeting occurs? If so, you might look at your spreads and see if they've narrowed enough so that you can exit by paying only a little of your collected profits. Perhaps you don't want to do that with all your spreads--although I did and have--but would you sleep easier this weekend if you stepped out of some? There's no right or wrong approach here, just different approaches. I'm out of all my December condors and/or credit spreads, and that feels good. Of course, I still have to deal with the January positions that I've already entered, but I've at least reduced my exposure. Consider whether you want to, too.

Jeff Bailey : 12/6/2007 2:10:26 PM

Treasury Secretary Paulson's Statement (subprime) ... U.S. Treasury Link

NO government money.

Linda Piazza : 12/6/2007 2:01:40 PM

As is expected during the lunchtime lull, as I mentioned earlier, the SPX is dropping down to test the bottom of the smallest rising Keltner channel. That's just below the SPX's current level and is now at about 1489.60. While it's not unusual for this to happen during the lunchtime lull, even on the strongest days, keep the massive resistance levels being tested today in mind. Rollover potential exists, so keep your stops snugged up if in bullish positions. I don't see signs of rollovers yet, and those hoping for rollovers should remember that markets are also poised at potential breakout levels. Rollover or breakout: which will it be? Perhaps neither. The indices are getting to these levels a few days ahead of when I expected them to do so, so I'm uncertain of what to expect next, but when I thought they'd get here Monday, I thought we'd see consolidation at these levels.

Jane Fox : 12/6/2007 1:58:46 PM

Hopefully you took profits or at least raised your stop.

Keene Little : 12/6/2007 1:56:35 PM

While waiting to see how the day ends, here are the two scenarios on the DOW that I see for the next few days/weeks. The bounce off Tuesday's low is either the start of the next rally leg (dark red), with an upside target of 13800-13900 or else it's part of a larger a-b-c correction from the Nov 30 high (shown in pink and it's called an expanded flat correction since wave-b goes higher than the start of wave-a, the 11/30 high): Link

The expanded flat correction calls for a drop down to just below 13200 before setting up the next rally leg instead of directly from here. Depending in which scenario plays out could help us determine how the market will react following the FOMC news. I'm currently leaning more towards the pink wave count calling for another leg down before rallying.

Jeff Bailey : 12/6/2007 1:41:24 PM

What I "liked" from what I heard was NOT DESIGNED TO bail out SPECULATORS and LENDERS.

Jeff Bailey : 12/6/2007 1:37:08 PM

President Bush ends speech ... SPY $149.49.

Jeff Bailey : 12/6/2007 1:31:51 PM

What? (grin) ... cutting rates to cool inflation.

Things are a little different aren't they?

Jeff Bailey : 12/6/2007 1:31:14 PM

BOC's Dodge: Rate Cut To Cool C$, Which Would Have Sparked Inflation

Jeff Bailey : 12/6/2007 1:30:08 PM

BOC's Dodge: Recent C$ Levels "Makes Sense"

Jane Fox : 12/6/2007 1:30:04 PM

Here are the charts of the overnight session and as you can see the Russell is much stronger market and the NDX the weaker. Link

Jeff Bailey : 12/6/2007 1:28:23 PM

Like what I'm hearing so far ...

Keene Little : 12/6/2007 1:27:45 PM

One thing the bulls should be cautious about this afternoon--if the market can't be driven higher and clear SPX 1492 better than this then the bears are going to feel emboldened to try to take it back down. If the typical 2:00 turn sees an effort to break the market higher and it fails then profit taking and short selling could be next.

Conversely if any selling effort is met with buying support then I would expect the market to rally higher this afternoon and put the SPX 1490-1492 resistance behind it. In that case I'd be looking for 1500-1510 as the next level for the rally.

But if selling hits and SPX 1490 is soundly rejected again today then the larger corrective pattern calls for a steep decline to perhaps SPX 1450-1460 before setting up the next rally leg into Christmas.

Jeff Bailey : 12/6/2007 1:26:40 PM

President Bush Outlines Subprime plan ... SPY $149.65

Jeff Bailey : 12/6/2007 1:26:04 PM

Steel/Iron Sector Distribution at this Link

Linda Piazza : 12/6/2007 1:20:46 PM

Current potential Keltner SPX support on 15-minute closes at about 1492. SPX bulls want to see that maintained, although a dip to the bottom of the smallest Keltner channel during the lunchtime lull sometimes occurs, even on strong days. The bottom of that channel is now at 1489.76.

Jane Fox : 12/6/2007 1:18:23 PM

NDX is also not even tagging its resistance however, higher low and the fact that SPX and DOW are breaking resistance suggests this will follow. Link

Jane Fox : 12/6/2007 1:16:39 PM

The Russell 2000 is now bumping up against its resistance. Link

Jane Fox : 12/6/2007 1:15:44 PM

The DOW needs to close above its resistance as well. Link

Jane Fox : 12/6/2007 1:14:41 PM

Now the bulls need to have the SPX CLOSE above 1490 and if it does I am back on the side of the bulls. Link

Linda Piazza : 12/6/2007 1:13:48 PM

The TRAN is still drifting down off its early morning high. That drifting down still isn't making a difference at all in other indices such as the SPX, however. It hasn't stalled the SPX yet. Do watch, however, if the TRAN begins closing 15-minute periods below about 4727 and then especially if it drops down to test 4685 or so. That's the location of a rising trendline off Tuesday's early morning low. The TRAN hit that trendline Tuesday afternoon and then again yesterday afternoon and bounced both times. You bulls want it to bounce again if it should drop down to test it.

Jane Fox : 12/6/2007 1:10:35 PM

In any case you should move your stop to breakeven and probably have it moved to lock in some profit.

Jane Fox : 12/6/2007 1:05:58 PM

YM has got to within 6 ticks of profit so now is the time to make a decision - do you want to take profits here or wait for rest.

Keene Little : 12/6/2007 1:05:51 PM

A little higher for the DOW and it would run into its downtrend line from the October high, currently near 13560.

Keene Little : 12/6/2007 1:00:47 PM

I do still prefer the short side here because of the rising wedge appearance to today's rally and the bearish divergences. Or maybe it's better to say I don't like the long side. But if no sellers appear then I'm not sure it will amount to much of an opportunity for the bears.

Linda Piazza : 12/6/2007 12:58:53 PM

The SOX tests potential Keltner resistance on 15-minute closes, now at about 426.20. The SOX is at 425.96 as I type. There's no guarantee that the SOX will immediately crater, but as I suggested with RUT bulls a few minutes ago, it's time to snug up your stops and know how much of your profits you're willing to put at risk now. A momentum-backed run higher could occur at any moment--many indices are at points where either a rollover or such a run is possible--but if so, you're not going to be hurt by deciding to follow the SOX higher with your stops, making sure that you don't let profits turn into losses.

As I typed, the SOX continued pushing higher, but hasn't closed a 15-minute period above that resistance yet.

For bears thinking about a potential rollover, hitting this upper barrier is no guarantee of such a thing. Watch for other ducks-in-a-row sign that would signal you that prices were rolling over. Keltner channels were originally designed to pinpoint breakout plays, because such breakouts show that momentum still lies in the direction of the breakout.

Keene Little : 12/6/2007 12:58:44 PM

Never short a dull market comes to mind here. The market seems to be drifting higher due more to a lack of sellers than anything else. There's just no excitement.

Jane Fox : 12/6/2007 12:57:55 PM

This day trade is becoming a swing trade but hang in there.

Jeff Bailey : 12/6/2007 12:56:36 PM

Sector Bell Curve from 11/26/07 to 11/30/07 at this Link

Sector Bell Curve from 08/22/07 to 10/11/07 Link

Jane Fox : 12/6/2007 12:56:25 PM

WASHINGTON (MarketWatch) -- With home prices falling and mortgage debts climbing, U.S. households lost a record $128 billion in real estate equity in the third quarter, the Federal Reserve reported Thursday.

By contrast, homeowners' equity had risen by $1.2 trillion in 2005 -- the height of the housing boom -- and by $237 billion last year.

Homeowners' equity as a percentage of real estate values fell to a record low 50.4% from 51.1% in the second quarter. Before the housing boom began earlier in the decade, homeowners' equity was about 56% of the value of their real estate.

The figures were released Thursday in the Fed's flow of funds report, the most comprehensive look at the flows of assets and liabilities in the economy

Jane Fox : 12/6/2007 12:49:59 PM

I have moved my stop on the YM long from 13511 up to 13489.

Jeff Bailey : 12/6/2007 12:45:29 PM

CNBC guest just discussing why he feels there should be no bail out.

Basic premise as I listen was it sets a bar for NO RISK management going forward.

Remember my little quiz a couple of weeks ago about building a house on a known flood plain with no insurance?

Probably wouldn't do it. Unless of course, you expected somebody would come along and bail you out.

Linda Piazza : 12/6/2007 12:36:10 PM

For you RUT traders, here's a view of where the RUT is with respect to Keltner resistance: Link The RUT doesn't always follow Keltner resistance or support exactly, but it certainly does trade at times in accordance with the upper or lower channel lines as well as the central basis line. What does this mean? Nothing right now except that RUT bulls need to tighten up the stops in case the resistance holds. Just know where how much of your accumulated profits you'll risk now.

Jeff Bailey : 12/6/2007 12:35:59 PM

Intel (INTC) $27.72 +1.82% ... notable 52-week at the NASDAQ.

Keene Little : 12/6/2007 12:25:39 PM

SPX seems to have dribbled higher to the 1492 area but there's absolutely no excitement by the bulls to get it higher and hit some buy stops. I'm feeling more bearish than bullish here if the recent high now holds.

Jeff Bailey : 12/6/2007 12:16:06 PM

S&P Retail Index ($RLX.X) 435.24 -1.15% ...

Jeff Bailey : 12/6/2007 12:14:34 PM

Macy's (M) $29.91 -4.16% ...

Jeff Bailey : 12/6/2007 12:14:00 PM

Target (TGT) $55.54 -7.63% ...

Jeff Bailey : 12/6/2007 12:13:32 PM

Wal-Mart (WMT) $48.92 +0.06% ...

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


DJ- Retailers generally report lower-than-expected sales for November after two months of weak results despite the emergence of more seasonal temperatures and an extra week of post-Black Friday sales versus a year ago. Wal-Mart posts a 1.5% increase in U.S. same-store sales. Target says December sales trends need to improve for it to meet its guidance. Macy's credits weather with its strong results.

Linda Piazza : 12/6/2007 12:10:38 PM

The SPX is so far still maintaining 15-minute closes above the support that's now at 1489.40-1489.50. As I've been mentioning, it won't have changed the short-term uptrend that began about 2:00 yesterday afternoon until and unless it begins closing 15-minute periods below that support. My best guess was that gains would be capped somewhere in the 1488-1492 zone, but the SPX is above that now. There's the possibility that, unless prices are reversed fairly soon, short covering could get something bigger started to the upside. I'm finding my potential scenario unraveling, however, as I didn't really expect a big rally above the neckline of the possible inverse H&S to get started before the FOMC meeting. I thought there might be some hesitance until then. So, I'm a little uncertain of what to expect since my scenario is playing out but the timing is off. However, I do know to watch that 15-minute 9-ema, and that, as long as the SPX is bouncing from it, it hasn't changed its short-term uptrend.

Jeff Bailey : 12/6/2007 12:10:11 PM

MARK TO MARKET ... Kiss 50 BPs Goodbye - If ADP/MEA Is On Target Irrespective of the nonfarm jobs number, Jim Murphy never thought Bernanke would cut by more than 25 basis points at the December FOMC meeting. There's another meeting in January, and then would be the time to chop some more.

Jeff Bailey : 12/6/2007 12:08:38 PM


DJ- Dell will sell a variety of XPS and Inspiron notebooks and desktop computers through Best Buy in the next few weeks. With this agreement, Dell products will be available in nearly 10,000 stores around the world.

BBY $52.33 +0.98% ...

DELL $24.71 +1.64% ...

Jeff Bailey : 12/6/2007 12:06:59 PM

Hey! Don't want to sound like CNBC. Should report some type of "good news" or reaction in this market.

Jeff Bailey : 12/6/2007 12:06:19 PM


DJ- Luxury home builder posts a net loss of $81.8 million, or 52c a share, versus year-ago income of $173.8 million, which includes write-downs of $1.22 a share. Analysts expected a loss of 77c a share.

TOL $22.14 +6.80% ...

Linda Piazza : 12/6/2007 12:05:42 PM

I also notice that the USDJPY has been dropping rather heavily since about 9:45-10:00. Keep an eye on that, too, as you generally want to see this moving in the same direction as equities.

Jeff Bailey : 12/6/2007 12:04:32 PM

I'll say this ... refiners sure aren't busting their humps to crank out heating oil.

Jane Fox : 12/6/2007 12:04:00 PM

3Q household borrowing up 6.9%, least in 8 years

3Q business borrowing up 11.9%, most in 8 years

3Q household net worth up 4.4% rate to $58.6 trillion

Jeff Bailey : 12/6/2007 12:03:44 PM


DJ- National weather service expects the phenomenon known as La Nina to continue into the spring of 2008. Forecasters say La Nina conditions are behind expectations of a warmer-than-normal December-February in much of the U.S.

Linda Piazza : 12/6/2007 12:03:42 PM

So far at least, the TRAN is not moving to a new high along with the SPX. The corroboration and/or divergence of the TRAN with other indices is not always a good market timing tool, but keep an eye on this.

Jane Fox : 12/6/2007 12:02:22 PM

BOSTON (MarketWatch) -- Closely watched residential builder Toll Brothers Inc. on Thursday said it swung to its first quarterly loss as a public company, as the chief executive said this year was the most challenging in its history.

The Horsham, Pa.-based company reported a fiscal fourth-quarter ending Oct. 31 loss of $81.8 million, or 52 cents a share, including $314.9 million of pretax inventory-related impairments and related write-downs.

Revenue for the quarter ended Oct. 31 fell to $1.17 billion from $1.81 billion in the year-ago period.

"By many measures, fiscal 2007 was the most challenging of the forty years that Toll Brothers has been in business," said Chief Executive Robert Toll in the earnings release.

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

CM gapped up at $87.89 then got whacked.

Jeff Bailey : 12/6/2007 12:01:13 PM


DJ- Canadian Imperial Bank of Commerce stock falls 6% after company trims profit-growth targets as it posted a 7.9% rise in fiscal 4Q net income, with a one-time gain balancing losses related to the ongoing credit crunch.CM $80.11 -6.66% ...

Jeff Bailey : 12/6/2007 11:58:56 AM


DJ- Energy industry equipment maker WSP makes modest trading gains during its debut after slashing its initial public offering price. Stock opened at $8.51 a share on the NYSE, essentially flat with its IPO price, recently rising 2%.

Jeff Bailey : 12/6/2007 11:57:29 AM

Smelled the coffee finaly.

Jeff Bailey : 12/6/2007 11:56:49 AM


DJ- Bank of England's Monetary Policy Committee cuts key interest rate for the first time in two years as evidence mounts that the economy is slowing as credit conditions tighten. In a statement explaining the decision to reduce rate to 5.5% from 5.75%, BOE says there are signs that growth is slowing. Also, bids for special five-week repo agreement at Bank rate have greatly exceeded initial offering.

Jeff Bailey : 12/6/2007 11:56:16 AM


DJ- Mortgage lender again backtracks on when it might be profitable and says it is exploring capital-raising alternatives, including cutting its dividend, becoming the latest mortgage-related firm to take such a step.

IMB $8.00 -8.91% ...

Keene Little : 12/6/2007 11:55:51 AM

ES and YM have been working their way higher this morning and have come close to tagging the overnight highs but not quite yet. Could be a good short there based on an apparent loss of momentum I'm seeing on the charts. But keep your stops tight since a blast higher could follow a break above that potential resistance.

Linda Piazza : 12/6/2007 11:55:29 AM

The SPX is testing the 50% retracement of the decline off the October high. If I calculated that correctly, it's at 1491.10. This is significant resistance . . . unless the SPX is going to go ahead and confirm that inverse H&S today. My best guess is that gains will be capped today somewhere in this region, but all it takes is a pop above this that gets shorts covering to undo that thesis.

Jeff Bailey : 12/6/2007 11:55:10 AM


DJ- U.S. fixed-rate mortgages decline in the latest week to their lowest levels since fall 2005, with the 30-year, fixed-rate loan at 5.96%, down from 6.11% a year ago. The 15-year fixed-rate loan is 5.65%, and the five-year hybrid ARM is 5.75%.

Jeff Bailey : 12/6/2007 11:54:34 AM


DJ- Bond insurer's shares rise 4% after it says that it has been that it has been pursuing capital contingency plans and emphasizes that its triple-A credit rating has not changed.

Jeff Bailey : 12/6/2007 11:53:40 AM


DJ- A mortgage relief package hammered out by the U.S. administration and major lenders could help more than one million homeowners avert foreclosure in the next two years, a White House official says. President is expected to unveil plan today.

Jeff Bailey : 12/6/2007 11:53:16 AM


DJ- Rate of mortgage loans at least 30 days past due reaches its highest point since 1986 during the 3Q, hitting 5.59%, as foreclosure starts increased across all loan types. Rate of loans actually entering the foreclosure process is 0.78%.

Jeff Bailey : 12/6/2007 11:52:51 AM

DJ Home Construction (DJUSHB) 327.88 +6.46% ...

Keene Little : 12/6/2007 11:50:16 AM

The techs are suspiciously silent in the renewed push higher here. What do they know that the rest don't see?

Jane Fox : 12/6/2007 11:34:29 AM

Stop is 13469 and target is 13553.

Jane Fox : 12/6/2007 11:32:38 AM

I am now long YM from 13511.

Keene Little : 12/6/2007 11:31:51 AM

SPX is trying again and is about to run into the red line I have on the 60-min chart just above 1492 (based on previous highs and lows at this level). I'd feel a little more bullish right here if the negative divergence weren't staring me in the face. But it could disappear if the bulls manage to rally this above 1492 and keep it there. Otherwise consider a short play if resistance continues to hold. Link

Jeff Bailey : 12/6/2007 11:30:21 AM

SPY $149.46 +0.43% ...

Jeff Bailey : 12/6/2007 11:29:22 AM

Oil Service HOLDRs (OIH) $180.53 +2.19% ...

Jeff Bailey : 12/6/2007 11:28:59 AM

CBOE Oil Index (OIX.X) 832.87 +0.98% ...

Jeff Bailey : 12/6/2007 11:28:23 AM

Jan Nat. Gas (ng08f) $7.40 +2.99% ...

Jeff Bailey : 12/6/2007 11:27:47 AM

US Oil Fund (USO) $69.45 +1.10% ...

Jeff Bailey : 12/6/2007 11:26:41 AM

Swing trade stopped alert! ... for the 1/4 position in the UltraShort Oil & Gas (DUG) $40.00

Jeff Bailey : 12/6/2007 11:21:54 AM

Oil Service HOLDRs (OIH) $179.83 +1.80% ... testing its stiiiiill trending higher 150-day SMA from underneath.

Needs a seller NOW, TODAY in my opinion.

DUG $40.20 -1.85% ... stop for MM Profiles is $40.00.

Linda Piazza : 12/6/2007 11:18:57 AM

The SPX's 9-ema and channel support converge near 1487.68, and have been providing support on 15-minute closes. As long as that continues, the short-term uptrend that began yesterday afternoon about 2:00 has not changed. However, remain aware of the massed resistance that the SPX faces from historical, Fib and moving average resistance in the 1487-1492 zone. Without a strong push, gains could get capped here.

Jane Fox : 12/6/2007 11:17:40 AM

I will take YM long at 13511 with a stop at 13469.

Jeff Bailey : 12/6/2007 11:11:32 AM

30-year ($TYX.X) up 7.6 bp at 4.467%

Jeff Bailey : 12/6/2007 11:11:06 AM

10-year ($TNX.X) up 6.6 bp at 3.977%.

Jeff Bailey : 12/6/2007 11:10:31 AM

5-year ($FVX.X) up 6.8 bp at 3.344% ...

Jeff Bailey : 12/6/2007 11:09:43 AM

13-week Yield ($IRX.X) down 10 bp at 2.880%.

Jeff Bailey : 12/6/2007 11:09:09 AM

US T-Bill Auction To Sell $41 Billion T-Bills Monday (unchanged)

Auction to raise $7.0 billion in new cash.

Linda Piazza : 12/6/2007 11:07:31 AM

The TRAN is still pulling back, but, so far, still doing it in a bull-flag sort of way. Those of you who might have tested the bearish side when the SPX and other indices hit presumed strong resistance this morning need to know that the pullback is corroborating your play, but the shape of the pullback is not, so far, and that you need to be careful.

Jeff Bailey : 12/6/2007 11:04:55 AM

UTX's PnF chart looks accurate from May (blue 5) at this point.

Dorsey's has that March (3) and April (4) showing a double bottom, then "buy signal" at $68.

Jeff Bailey : 12/6/2007 10:59:58 AM

United Tech (UTX) $76.97 +0.14% ... had an alert set here. Possible h/s top if a right shoulder develops here.

Gallery view of charts Link may not be entirely accurate as the stock is a dividend payer. Can see the formation with the candle chart. More importantly the PnF chart. "High pole warning", but excellent risk/reward for a bull.

Jeff Bailey : 12/6/2007 10:55:55 AM

MBIA (MBI) $29.65 +8.13% ... got "whacked" yesterday on Moody's report.

Jane Fox : 12/6/2007 10:54:09 AM

I am taking a long position in the ETF USO, which is based on the Crude futures with a stop just below today's low. Link

Jeff Bailey : 12/6/2007 10:54:21 AM

Financial Select SPRDs (XLF) $31.03 +1.30% ... atop this morning's most active.

UpTickVol 384 to DnTick Vol 247.

Heavies Dec OI at Dec $27 Put, Dec $30 Put, Dec 31 Call, Dec $29 Put, Dec $33 Put.

Keene Little : 12/6/2007 10:51:34 AM

The wall at 1490 (to about 1492) is still holding SPX back. If it manages to punch above it then the short covering could finally get it clear of that line of resistance. Then there's really nothing in the way of the bulls until the 50-dma at 1501.70 and the downtrend line from October near 1510. Short below and long above is an easy way to play it here.

Jeff Bailey : 12/6/2007 10:49:29 AM

UltraShort QQQ (QID) $37.75 -0.44% ... #7 most active at just over 6.7 million shares.

UpTickVol 172 to DnTickVol 196

Linda Piazza : 12/6/2007 10:44:24 AM

So far, the SPX maintains 15-minute closes above the 9-ema, now at 1483.32. The SPX is at 1487.23. The SPX would have to begin closing 15-minute periods below that 9-ema and to maintain levels below it to change the short-term trend that was instituted about 2:00 yesterday afternoon.

Linda Piazza : 12/6/2007 10:42:58 AM

The TRAN continues to pull back in a choppy manner, producing a number of small-bodied 15-minute candles that are dropping in a flag-like formation from the day's high. So far, this suggests that the TRAN could still attempt another push at the Keltner and other resistance that stalled it earlier today. That resistance is now at 4744.03 with the TRAN at 4730.78 as I type. Why do we care? The TRAN moves fast and sometimes moves ahead of the SPX, OEX and Dow. It's not a failproof indicator of where those other indices might go, but it's certainly worth watching for corroboration or divergence.

Jeff Bailey : 12/6/2007 10:41:57 AM

Dorsey classifies FTO and VLO as BPOIL for their sector bullish %.

Keene Little : 12/6/2007 10:40:21 AM

Keep an eye on the uptrend line from Tuesday afternoon--NDX looks to be the first to test it here.

Jeff Bailey : 12/6/2007 10:39:43 AM

Frontier Oil (FTO) $41.21 -2.85% ... slips below its rising 150-day SMA.

Jane Fox : 12/6/2007 10:36:21 AM

My husband and I just bought a house and, although we looked at many I would have loved to buy, we stayed within our budget. Why reward those who did not.

Jeff Bailey : 12/6/2007 10:32:34 AM

EIA Weekly Nat Gas Storage Link ... Draw of 88 Bcf

Jeff Bailey : 12/6/2007 10:28:48 AM

CNBC's David Faber ... "I don't think they should, nor do I think they will" when talking about the Fed bailing out subprime.

I and many others couldn't agree more.

Linda Piazza : 12/6/2007 10:22:38 AM

Interesting that the NYSE advdec line, at least my version, is not nearly as strong as it was yesterday.

Jane Fox : 12/6/2007 10:22:09 AM

CHICAGO (MarketWatch) -- The rate of loans entering the foreclosure process during the third quarter, as well as the percent of loans in the foreclosure process during that time, were at the highest levels in the history of the Mortgage Bankers Association's quarterly delinquency survey, the group reported on Thursday.

The rate of loans entering foreclosure was a seasonally adjusted 0.78% of all loans on one- to four-unit residential properties, up from 0.65% in the second quarter. The rate is up from 0.46% a year ago, according to MBA statistics

Linda Piazza : 12/6/2007 10:21:39 AM

Here's where the TRAN is with respect to intraday Keltner resistance, hitting that resistance and turning back: Link The TRAN has not turned back far, and remains above 4707-4710 potential support on 15-minute closes. Until and unless that support is breached, it's still within striking distance of a momentum-driven breakout above the Keltner channels. However, my main point here is to point out that bulls need to have their just-in-case profit-protecting plans in place. The TRAN has given a warning that it's at a place at which it could start running out of steam, so gains could be harder to make from this point on in the TRAN. It may be harder for the SPX, OEX and Dow to make further gains, too, when they're up against difficult resistance, if the TRAN's gains are tapped out. I'm not seeing reversal signs yet, and a consolidation day at the resistance is a possibility.

Keene Little : 12/6/2007 10:18:21 AM

Market internals are supportive of a further rally this morning. It's looking a little overbought short term and starting to show some negative divergences on the 3-min chart but I'd look at a pullback as a buying opportunity. A little higher will have the DOW and SPX futures testing their overnight highs and that could be followed by a deeper pullback this morning (if not from right here).

Jeff Bailey : 12/6/2007 10:15:56 AM

RBS Sees $2.6 Billion Writedowns ... AP Story Link Link

RBS $9.98 +3.41% ...

Jane Fox : 12/6/2007 10:08:43 AM

AD line has made a high of +1205.

Linda Piazza : 12/6/2007 9:56:55 AM

The 72-ema can be powerful support or resistance for the SPX. As mentioned earlier, that's at 1487.74 this morning. The SPX did briefly push past it and is now just below, still testing. With the 11/14 high at 1492.14, the 11/30 high at 1488.94 and the 50% retracement of the steep decline off the October high between those two historical intraday highs, this will be a tough area requiring a big punch to get through and maintain values above. Is the new mortgage rescue plan going to provide a big enough punch to do it? Maybe, but this is certainly a zone when you should be particularly careful whether in or contemplating either bullish or bearish trades.

Keene Little : 12/6/2007 9:56:20 AM

The DOW is the first of the major averages to test the Nov 30 high (13465) and has broken it slightly. Good sign for the bulls. It doesn't preclude another drop lower as part of a larger correction but it does say we should see higher before any significant decline.

Keene Little : 12/6/2007 9:50:05 AM

As Linda pointed out, the Trannies are getting a nice boost this morning but they could find resistance here at the downtrend line from July and its 50-dma: Link

Jane Fox : 12/6/2007 9:48:05 AM

My goodness look at the Russell 2000, it is now testing its overnight highs. Link

Jane Fox : 12/6/2007 9:46:51 AM

Looks to be another slow day for daytraders and this is never good.

Keene Little : 12/6/2007 9:44:28 AM

Nice little bounce this morning. The test will be the overnight highs in futures so about another 7 points for ES (which would be a good rally in and of itself).

Linda Piazza : 12/6/2007 9:43:44 AM

Early Monday, before the market open, I proposed a potential scenario in which the SPX might pull back and form the right shoulder of a inverse or reverse head-and-shoulder formation, getting parked near the neckline on FOMC day, after which it would be determined if the formation was confirmed or invalidated. I got the formation right, but maybe got the timing wrong, so now I'm a little uncertain about what to expect next. The SPX has risen almost to the neckline. If my original scenario comes through, then perhaps gains will be capped and the SPX will consolidate the next few days, but when timing is wrong, all else might be, too.

Jane Fox : 12/6/2007 9:40:12 AM

OK my VIX charts just quit working.

Linda Piazza : 12/6/2007 9:39:58 AM

Don't look now, but the TRAN is gaining strongly this morning, pushing above yesterday's high. The TRAN tends to get carried away a bit, so early moves can sometimes be reversed, but I use its actions as a sort of indicator and right now it's indicating support for bullish hopes. Keep it on the radar screen, though, as resistance is coming up near 4737 and then 4750, and the TRAN is at 4718.76 as I type. The SPX, OEX and Dow don't tend to fall too far if the TRAN is gaining strongly.

Jane Fox : 12/6/2007 9:39:15 AM

VIX is climbing higher as the S&P futures climb higher telling me this high will not have follow through.

Jane Fox : 12/6/2007 9:38:16 AM

AD line is a neutral +202.

Linda Piazza : 12/6/2007 9:37:11 AM

The SPX is currently testing its 15-minute 9-ema, with that average at 1482.15 and the SPX at 1482.92 as I type. Of course, the 200-sma just ahead and the 72-ema at 1487.74 probably have more impact on early trading, as both can be deemed probable strong resistance. The SPX is going to need a good push to maintain levels above those, something it hasn't done since November 7.

Jane Fox : 12/6/2007 9:28:00 AM

NEW YORK (MarketWatch) -- Gold futures extended their decline on Thursday, coming under pressure amid falling crude-oil prices and firmness in the U.S. dollar.

Gold for February delivery dropped $9.70 at $794 an ounce on the New York Mercantile Exchange. Other metals prices also traded lower.

On Wednesday, gold futures dropped $3.90 to finish at $803.70.

"With both oil and the dollar beginning to reverse their trends as year-end profit taking emerges, it looks as if gold will continue to see pockets of pressure," said James Moore, an analyst at TheBullionDesk.com, in research note.

"However, we don't expect gold to drop significantly lower as scaled down buying emerges from the physical sector, while the sensitivity in the credit/sub-prime issues continues to draw investment demand," he said.

Keene Little : 12/6/2007 9:25:11 AM

Something spooked equities after 7:00 AM and futures gave up all their overnight gains. With the negative divergences on the 60-min charts that I showed, the bulls don't want to see a pullback today as it could mean we'll see a drop below yesterday's as part of at least a larger pullback or worse. But until yesterday's low gets taken out it may be worth looking at a dip this morning as a buying opportunity.

Jane Fox : 12/6/2007 9:21:04 AM

There is a very good chance that 1490 will break today or at least this week. Link

Jane Fox : 12/6/2007 9:19:52 AM

I also have been speculating that Crude would fall to $85.00/bl and it seems to be heading that way. This is another nail in the coffin for my long Gold position for Crude and Gold trade in sync. Link

Jane Fox : 12/6/2007 9:17:55 AM

I am going to give my Gold position a little room to breath and have a stop just under the November 20th low at 773. Link

Jane Fox : 12/6/2007 9:16:12 AM

Since I am long Gold I have been watching the US$ closely and have been speculating it would break through resistance. Sure enough it has. I will be seriously considering taking my Gold position off the table now. Link

Jane Fox : 12/6/2007 9:12:47 AM

The American futures equity markets were consolidating at their respective previous day highs then about 7:00ET the bears came out of hibernation, rubbed their eyes and decided to come to work. Ever since the markets have been falling to new overnight lows and back into their previous day ranges. Link

Linda Piazza : 12/6/2007 8:52:54 AM

I may be away for a few minutes at the open, but should be back shortly afterward, if so.

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