Option Investor
Printer friendly version
OI Technical Staff : 12/7/2007 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The Market Monitor has been archived.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 : 12/7/2007 9:34:26 PM

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

Jeff Bailey : 12/7/2007 9:31:56 PM

Closing U.S. Market Watch found at this Link

Keene Little : 12/7/2007 5:15:45 PM

The Trannies rallied strong today (up +1.8%) and left an interesting setup for Monday. The 60-min chart shows two equal legs up for its bounce off the Nov 21st low was achieved today at 4898: Link . And on the daily chart that took it right up to its broken uptrend line from March 2003: Link The bulls really don't want to see a kiss goodbye here.

Jeff Bailey : 12/7/2007 5:02:16 PM

Don't forget! Fund manager's year-end was last Friday (11/30/07)

Those with bonus set to REALIZED gain, was 11/27/07 (TD +3)

Jeff Bailey : 12/7/2007 4:42:11 PM

M, m, m ... some of the better crack spread measures I've seen in months at today's settlement.

Keene Little : 12/7/2007 4:18:20 PM

BTW, I show down arrows on the SPX 60-min chart to show that I expect a top for the bounce soon and then a turn back down in the market. I don't expect price will turn back down that hard and fast as depicted so I should make that very clear. I strongly suspect this market will be held up through the end of the year as fund managers do all they can to keep their bonuses. The decline would likely chew up a lot of time into January before fund managers could be all too willing to let the market drop and then buy back in cheaper down the road.

The flip side of that of course is that fund managers could be strong sellers if they sense the market is getting away from them and they want to preserve the gains they've captured for the year. That could in fact cause some "panic" sellng as fear of lost profits becomes the primary emotion, especially if there's any disappointment following Tuesday's FOMC.

Jeff Bailey : 12/7/2007 4:10:04 PM

ICE $175.55 +0.41% ... looks "cheap"

Keene Little : 12/7/2007 4:09:45 PM

SPX 10-min chart showing the 5th wave up on Monday to potential Fib target at 1526: Link and the 60-min chart showing how that fits in the larger picture with an expectation for that move to complete the A-B-C bounce off the Nov 26th low: Link

Jane Fox : 12/7/2007 4:08:03 PM

Economic Reports for Monday include:

8:30a.m. 3Q Current Account Balance.

8:30a.m. Dec NY Fed Manufacturing Index. Previous: 27.37.

9:00a.m. Oct Treasury International Capital Flows. $5.8B%.

1:00p.m. Dec NAHB Housing Market Index. Previous: 19.

Jeff Bailey : 12/7/2007 4:07:30 PM

Take a stacked retracement on CME too.

Keene Little : 12/7/2007 4:06:43 PM

The market will need to rally out of the gate on Monday in order to preserve the upside potential here. I'm still leaning towards getting the 5th wave higher out of this (maybe SPX 1526) but no dilly dallying by the bulls on Monday. Charts coming.

Jeff Bailey : 12/7/2007 4:06:21 PM

That would be a real good all-time high to short Keene. Record volumes again this week in futures.

Jeff Bailey : 12/7/2007 4:01:54 PM

Sell Program premium ... SPY 150.62

Keene Little : 12/7/2007 3:59:37 PM

Another high flyer that I haven't shown in a while is CME. It has never had a "pretty" EW pattern but the new rally high has actually cleaned it up some. I like the looks of the current leg up as the final 5th wave for its rally from 2003 and the internal Fib projections for the 5th wave (the move up from Nov 27th) point to the 720-725 area for the end of the move.

The daily chart shows the 5th wave will equal 162% of the 1st wave (the first leg up from the August low to Sept 5th) at 722.52 and that's the target price for this move. Whether it gets there is another question (or stops there) but it would make a good setup for a long term short play on that stock. A drop now below 689 would suggest we've seen the high. Link

Jeff Bailey : 12/7/2007 3:52:59 PM

10-year Yield ($TNX.X) finished up 12.2 bp at 4.12%.

FIRST up week for the benchmark bond's yield in seven (7) weeks.

Jane Fox : 12/7/2007 3:51:51 PM

I am going to raise the stop on the long YM trade to 13629. It is getting late and the chances of making anything on this trade are getting pretty slim.

Jeff Bailey : 12/7/2007 3:50:56 PM

Has it been that long?

Keene Little : 12/7/2007 3:35:27 PM

A sharper pullback now means a likely test of today's lows which should theoretically hold otherwise we may have snuck in a high for the move up from Tuesday. I would not want to be long if today's lows break. Maybe a small short position over the weekend in that case but I really prefer to be flat over the weekends anymore. I relax much better that way.

Jeff Bailey : 12/7/2007 3:31:07 PM

The option symbol that is ... NOT the trade.

Jeff Bailey : 12/7/2007 3:30:22 PM

I had a case of it this morning with the ATI calls too!

Jeff Bailey : 12/7/2007 3:23:45 PM

QQQQ bulls now look for SIMILARITY (green circle)

Jeff Bailey : 12/7/2007 3:23:14 PM

Apple Computer (AAPL) $194.06 +2.18% ... here's my bar chart of the most heavily weighted QQQQ/NDX component that I put together last night. Technique of stacked retracement I've tought over the years here in the MM. Looking for SIMILARITY to the past, or DIVERGENCE. I'm seeing DIVERGENCE! (pink circle) Link

Keene Little : 12/7/2007 3:19:54 PM

Jeff, yes, thanks for that correction on the AAPL puts. My lesdyxia gets in the way sometimes (wink).

Keene Little : 12/7/2007 3:09:28 PM

When you say quickly on AAPL, how quickly in your opinion. Your chart shows within a month.

Sorry, I should be more specific. The rising wedge was built in 18 days (if it ends today). It should retrace that pattern in less time than that, often times much less. Playing January puts could work but I dislike options that close when I'm playing that far OTM.

Jeff Bailey : 12/7/2007 3:09:03 PM

Keene! Did you mean APV-PJ?

Keene Little : 12/7/2007 3:02:56 PM

If the rising wedge on AAPL is the right interpretation then it should get retraced relatively quickly. That would mean a trip back down to 150 and the April 150 puts (.AVPPJ), currently 5.30 x 5.40, makes for an interesting possibility here.

Keene Little : 12/7/2007 2:54:56 PM

The DOW almost did it but failed at the trend line along today's highs. SPX never made it up to today's high. The steep pullback says we're still in the sideways consolidation. The stop on a short play stays just below this afternoon's low but watch the botom of the up-channels I showed earlier--they should offer support (DOW 13625 and SPX 1504 right now).

Keene Little : 12/7/2007 2:46:12 PM

AAPL just rang my bell at 193.52. It's not stopping yet and I'm watching to see how it handles this area but nibbling on a couple of April puts here.

Jane Fox : 12/7/2007 2:40:56 PM

STop will have to be under this consolidation at 13618.

Keene Little : 12/7/2007 2:37:37 PM

We should find out shortly if we'll get the breakout to new highs or stay trapped in today's range into the close.

Jane Fox : 12/7/2007 2:36:13 PM

The markets are mostly moving sideways but I have a long at 13677 just in case the bulls decide to wake up.

Jeff Bailey : 12/7/2007 2:34:55 PM

Allegheny Tech (ATI) $96.06 +1.68% ... X gets the square.

Keene Little : 12/7/2007 2:30:21 PM

AAPL is working its way higher today and is now less than $2 away from its Fib target of 193.52 for a potential top to its rally. I continue to like this one for a longer term short play. You'll need to decide how much of a stop loss you want to tolerate but I'd suggest no higher than $200. If it gets much above 195 then the setup according the pattern I'm watching would be effectively negated. Link

Keene Little : 12/7/2007 2:23:23 PM

This is the pullback to buy, relatively tight stop just below this afternoon's low. Maybe partial position and then add to it if and when it breaks above today's high.

Jeff Bailey : 12/7/2007 2:17:55 PM

S&P Banks (BIX.X) 298.80 -2.00% ... MONTHLY Pivot (296.87)

Keene Little : 12/7/2007 2:13:53 PM

The banks are making new lows here and that would keep me a very cautious bull this afternoon.

Keene Little : 12/7/2007 2:10:46 PM

Based on today's conolidation pattern I'd look to buy the next pullback with a stop just below this afternoon's low.

Keene Little : 12/7/2007 1:49:40 PM

We could still chop sideways in today's trading range for the rest of the day (and rally on Monday) but a break to a new daily high would be bullish and I'd buy it (just watch out for the head fake break).

Keene Little : 12/7/2007 1:43:18 PM

If the DOW finds support here at the bottom of its parallel up-channel the rally potential is up to 13800: Link

Keene Little : 12/7/2007 1:34:14 PM

The other possibility, especially if SPX bounces back up from here, is that we're going to see that 4th wave correction just chop sideways over to its uptrend line by the end of the day and then get the rally on Monday.

Keene Little : 12/7/2007 1:32:19 PM

Getting a bit more of a selloff now. This SPX 10-min chart shows how price rallied this morning right to the top of a parallel up-channel from Tuesday afternoon's low and is now pulling back to what could prove to be afternoon support near 1500 to set up another run higher in a larger 5th wave for the price pattern: Link

The upside Fib projection would be near 1525 (for equality between the 1st and 5th waves) and would be one heck of an afternoon rally if it plays out this way (so far we've seen similar price action to yesterday which had the afternoon rally).

Jeff Bailey : 12/7/2007 1:30:34 PM

UltraShort Oil & Gas (DUG) $39.30 +1.18% ... still not back to yesterday's stop point of $40.00.

NEVER forget a trade. Never ... Can keep you from making the same mistake time and time again.

Jeff Bailey : 12/7/2007 1:29:05 PM

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

"Surprising" action in oil considering today's oil spill. Bloomberg Story Link

Jeff Bailey : 12/7/2007 1:21:14 PM

"Baby Berk" Link

Jeff Bailey : 12/7/2007 1:19:38 PM

Good gravy! ... Berkshire Class A (BRK.A) 150,140 +1.24% Link ... that's a new 52-weeker.

Keene Little : 12/7/2007 1:02:16 PM

With prices now pulling back before giving us the new high it's now looking like we're going to be stuck in a sideways consolidation for the rest of the day. I don't see much downside potential from here yet so look for a boring finish to what has been a boring day.

Jeff Bailey : 12/7/2007 1:01:22 PM

United Tech (UTX) $78.01 +0.02% ... daily close here would print a doji on daily bar chart.

In case you missed it, mentioned potential h/s top yesterday.

Morning low looks to have stuck at what I would consider to be left shoulder.

Move much above today's high has right shoulder growing into ear. Short squeeze potential there.

#5 weighting in INDU/DIA/YM.

Should tie with my 11:59:43 opinion.

Jane Fox : 12/7/2007 12:55:41 PM

The internals are not been a great deal of help today but they are more bullish than bearish. Link

Jane Fox : 12/7/2007 12:53:46 PM

AD line is still a neutral +223 but I see the VIX hugging daily lows telling me the probably of higher highs is greater than lower lows.

Jeff Bailey : 12/7/2007 12:29:50 PM

Last Week's Program Traded Stocks from my good friends at HL Camp & Company Link

May be useful in combination with SECTOR bullish %.

Jeff Bailey : 12/7/2007 12:21:48 PM

ES traders may want to check updated SPY and SPX open interest.

Keene Little : 12/7/2007 12:18:19 PM

Another minor high here for SPX would give us a little 5-wave move up from this morning's low. That could in turn complete the move up from Tuesday and have SPX topping out near its Fib target near 1512-1513.

Jeff Bailey : 12/7/2007 12:11:48 PM

Now showing QQQ-LZ having traded 9,118 on CBOE. 9,580 all exchanges.

Jeff Bailey : 12/7/2007 11:59:43 AM

YM 13,622 ... imperative that bears hold a close below 13,678 today.

Jeff Bailey : 12/7/2007 11:54:25 AM

10-year Yield ($TNX.X) up 11.4 bp at 4.112% ... looks WEEKLY R2-ish.

Jeff Bailey : 12/7/2007 11:52:53 AM

QQQQ just edging above the 11/29/07 "idiot" highs. (for those that may have missed that)

Jeff Bailey : 12/7/2007 11:50:58 AM

QQQQ Option Montage from 11:43:32 AM EST Link

Jeff Bailey : 12/7/2007 11:49:20 AM

VXN.X 23.54 -5.42% ...

Jeff Bailey : 12/7/2007 11:48:45 AM

NAKED Call Squeeze Alert! ... QQQQ $52.41

Keene Little : 12/7/2007 11:40:30 AM

This morning's bounce off the low looks very corrective and is the reason I don't trust the upside yet. I think we need another leg down before it's set up for a rally but if it makes a new daily high from here then obviously the market doesn't care what I think. Just be careful if chasing this to the upside.

Jeff Bailey : 12/7/2007 11:36:48 AM

Allegheny Tech (ATI) $95.10 +0.66% ... X's get the squares.

Jeff Bailey : 12/7/2007 11:35:59 AM

Option Symbol Correction alert! ... ATI Jan $95 Calls symbol is ATI-AS.

ATI-AR is $90 strike.

Keene Little : 12/7/2007 11:26:27 AM

NDX and RUT patterns this morning have me thinking we'll get another leg down to match the early drop this morning. Then it could be set up for a rally from there.

Jeff Bailey : 12/7/2007 11:19:26 AM

Steel sector WEEKLY Distribution Curve Link

Jeff Bailey : 12/7/2007 11:13:11 AM

Allegheny Tech (ATI) $94.48 +0.01% ... PnF chart Link

Jeff Bailey : 12/7/2007 11:01:50 AM

VIX.X 20.77 -0.90% ...

Jeff Bailey : 12/7/2007 11:01:31 AM

Swing trade call alert! ... for one (1) of the Allegheny Tech ATI Jan $95 Calls (ATI-AR) at the offer of $6.10 ($5.80 x $6.10).

Stop will go at $89 in the underlying. Target is $110.

ATI $94.50 +0.03% ...

Jeff Bailey : 12/7/2007 10:50:13 AM

OPTIonable reversed up from 32% (same as August low reading) to 38% yesterday.

Take every stock that trades with options, put their PnF charts ina basket, then place "buy signal" in one stack, "sell signal" in the other.

Jeff Bailey : 12/7/2007 10:43:28 AM

In case you missed my sector bell curve comparisons posted yesterday ...

8/22/07 to 10/11/07 Link

11/26/07 to 11/30/07 what market participants are favoring early in new bull phase Link

Jeff Bailey : 12/7/2007 10:38:05 AM

Yesterday's Sector Status Changes

BUILding reversed up to "bull confirmed"
DRUGs reversed up to "bull alert"
FOREst/paper reversed up to "bear correction"
OIL reversed up to "bull alert"
OPTIonable reversed up to "bear correction"
REALestate reversed up to "bull alert"
RETAiling reversed up to "bull alert"

Keene Little : 12/7/2007 10:26:56 AM

Not a whole lot happening here. I showed in last night's charts the thought that we could see a sideways/down consolidation this morning before a final rally this afternoon. That's still a possibility as I watch price (in)action this morning.

Jane Fox : 12/7/2007 10:03:41 AM

UMich Dec. consumer sentiment below 75.0 forecast

UMich Dec. consumer sentiment 74.5 vs 76.1 in Nov.

Linda Piazza : 12/7/2007 9:55:52 AM

One more thing: Watch the TRAN very carefully now. That advdec line worries me greatly on the behalf of those of you in bullish trades. The TRAN moves quickly, so it can sometimes give good heads-up signals. Something is wrong here--the evidence of these two is juxtaposed, and I have no way of judging which is right, the volume patterns or the leading indications the TRAN sometimes gives. What you bulls don't want to see is the TRAN reverse and drop quickly. It's at 4874.39 as I type.

Linda Piazza : 12/7/2007 9:52:13 AM

I also wanted to point out that although the TRAN is zooming higher, uncontrolled looking zooming, the advdec line, my version at least, is dropping lower. Something is wrong with this picture. I don't know which is right yet, but these two sort of indicators I watch are going opposite directions. And now, I'll disappear again . . .

Jane Fox : 12/7/2007 9:51:02 AM

WASHINGTON (MarketWatch) -- The Federal Reserve will cut rates by a quarter-percentage point when they meet in four days despite no clear signal of weakness from the November jobs report, analysts said Friday.

"Bottom line... they go a quarter [point]," said Joel Naroff, president of Naroff Economic Advisors.

"The Federal Reserve will still move a quarter-point," agreed Mickey Levy, chief economist at Bank of America in a television interview.

But Naroff said the Fed decision would be contentious, with the likelihood of perhaps two formal dissents in favor of holding rates steady.

"I would love to be a fly on the wall at this meeting. I think it is going to be a real battle," he said.

Jane Fox : 12/7/2007 9:49:41 AM

Remember Consumer Sentiment out at 10:00.

Keene Little : 12/7/2007 9:48:48 AM

SPX is now getting close to potential Fib resistance at its 62% retracement of the Oct-Nov decline at 1511.76--about another 1.50 points.

Linda Piazza : 12/7/2007 9:48:46 AM

I'm not officially working today, taking a day off because a number of appointments will take me away from my desk off and on all day. However, I had to sign on for a moment to point out that SPX, OEX and Dow traders should be watching the TRAN. It's zooming! Currently it's above the 76.4% retracement of the decline off the 10/05 high and it's not slowing down yet. It is approaching another resistance zone from its months-long congestion near this level, but it's hard to say what's going to stop it since nothing has the last few days. Anyway, while the TRAN is zooming up, don't bet too heavily on the SPX, OEX or Dow dropping down. Keep the TRAN on your radar screen whichever way you're betting. It's on the side of you bulls right now, but you don't want to see a sharp reversal now.

Jane Fox : 12/7/2007 9:44:59 AM

VIX to new daily lows.

Jane Fox : 12/7/2007 9:43:57 AM

AD line is +242 so no one has control of this market yet.

Keene Little : 12/7/2007 9:29:57 AM

Last night I had pointed out a Fib projection for SPX at 1513 (2nd leg up = 62% of the 1st leg up in the bounce off the Nov 26 low). A similar projection for the DOW is at 13697.

Keene Little : 12/7/2007 9:27:53 AM

It's been a nice steady rally in equity futures since the European markets opened, with ES rallying almost 15 points from low to high. The final pop after the jobs number was like a little relief pop higher probably more in relief the number wasn't bad (not great but not bad).

YM has now closed its Nov 6th gap by tagging 13636. The next gap is from the Oct 31 close--much higher at 13937. The equivalent gaps for ES are 1524.75 (from Nov 6) and 1553 (from Oct 31).

Jane Fox : 12/7/2007 9:23:47 AM

The bulls made it very clear yesterday who has control now. Link

Jane Fox : 12/7/2007 9:17:29 AM

Crude staged a huge rally yesterday but was not able to close above resistance at $90.00. When Crude rallies so does Gold and is the reason Gold is not falling in reaction to the US$ rally. Link

Jane Fox : 12/7/2007 9:11:53 AM

I am still long Gold and, although I will give the position breathing room, I will watch it very closely because if the US$ rallies like I think it will then Gold will fall. Link

Jane Fox : 12/7/2007 9:08:00 AM

I have been watching the US$ closely because I am a Goldbug. I suspected it would break resistance at 76.36 and now it seems to be testing that resistance as support. I would not be surprised to see this 76.36 break but I do not think it will retest yearly lows and make a higher low then take another stab at a rally. Link

Jane Fox : 12/7/2007 9:04:20 AM

The American equity future markets liked the payroll data out at 8:30 but it does not look like the cash markets will have a gap this morning. Most markets are now trading at their respective previous day highs. Link

Jane Fox : 12/7/2007 8:40:00 AM

WASHINGTON (MarketWatch) - The U.S. labor market was slightly stronger than expected in November, the government said Friday, a factor that's likely to weigh heavily on the Federal Reserve' decision next week on whether to cut interest rates.

The economy added 94,000 nonfarm payroll jobs last month, according to a survey of business establishments, down from the 170,000 added in October and close to the 85,000 expected by economists surveyed by MarketWatch.

Payroll growth in September and October was revised lower by a total of 48,000. However, a separate survey of households showed the strongest job growth in nearly six years, with 696,000 more people saying they had jobs in November. As a result of strong employment growth in household survey, the unemployment rate was steady at 4.7%.

Market Monitor Archives