Option Investor
Printer friendly version
Keene Little : 12/12/2007 11:55:03 PM

Thursday's pivot tables: Link and Link

I like being short against Tuesday's highs. If we get another rally leg up on Thursday, similar to Wednesday morning's (all 5 minutes of it), then it would reduce the risk amount to a stop at Tuesday's high and that's my recommendation if we rally. But I'm not sure about the rally and if the market opens down in the morning then I'd want to be short against Wednesday afternoon's high (just before the close). I try to show both scenarios on the 60-min charts:
DOW: Link
SPX: Link
NDX: Link
RUT: Link

On the NDX chart I'm showing a potential rally to a marginal new high. Any push above 2125 would have me thinking at least short term bullish in that regard. But like the others I'd first test a bounce by shorting it against Tuesday's high.

Jeff Bailey : 12/12/2007 10:18:01 PM


DJ- Washington Mutual increases the number of shares it plans to present in a public offering as it looks to increase capital in the wake of the credit crunch.

Jeff Bailey : 12/12/2007 10:16:41 PM


DJ- Chairman Kovacevich says his bank avoided the riskiest sorts of subprime mortgages but that it strayed from sound lending principles in its home equity-loan business, and is paying the price.

Jeff Bailey : 12/12/2007 10:10:44 PM

SPX NH/NL came in at 13:21

RUT.X NH/NL 17:65

Jeff Bailey : 12/12/2007 10:04:29 PM

QCharts Hot List of NH and NL symbols from Wednesday at this Link

Again ... NYSE reported 58:138 and NASDAQ reported 58:138

OI Technical Staff : 12/12/2007 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The Market Monitor has been archived.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 : 12/12/2007 7:54:33 PM

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

Closed out the GG-MZ Link

Closed out the FHA-AH Link ... got the news, but not the buyers.

Closed out the ATI-AS Link after yesterday's trade at $91. DJUSST and sector strong, ATI may not cut it.

Jeff Bailey : 12/12/2007 7:29:49 PM

Quote of the day ... Give a man a fish; you have fed him for today. Teach a man to fish; and you will not have to listen to his incessant whining about how hungry he is." - Author unknown.

Jeff Bailey : 12/12/2007 7:22:04 PM

Potentially Biiiig interest rate statement at 03:30 AM EST from Swiss National Bank as it could impact the 3-month libor.

Jeff Bailey : 12/12/2007 7:17:46 PM


Let a guy build a house on a known flood plane, no insurance, and when the flood comes and wipes out his house, he expects you to bail him out.

Then bail him out. See where he builds his house next time.

Give him some incentive and he'll build two houses the next time.

Jeff Bailey : 12/12/2007 7:14:17 PM

At least I agree with Mr. Kudlow's guest. If banks aren't going to lend with what you've already done at the discount window and fed funds rate, you don't give them 50.

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

That's what you do to get somebody to do there job/business. You "kick them in the butt."

You don't cower to their moaning.

Jeff Bailey : 12/12/2007 7:10:58 PM

"Today's action kicked those banks in the butt"

Jeff Bailey : 12/12/2007 7:10:32 PM

Exactly, exactly! He gets it!

Jeff Bailey : 12/12/2007 6:59:24 PM

YM Futures Alert! ... going forward, any trade profiles I make (long, or short) will be for the Mar'08 (YM08H)

Note: On 11/30/07, the ym08h closed 13,517.

Jeff Bailey : 12/12/2007 6:59:00 PM

Email is full of questions regarding today's "Fab 5" central bank news.

Why "genius?"

I will address in Monday's Wrap.

Remember! NO BAIL OUT. DEAL WITH IT! If you listened to Jimmy C this evening, I dare say his "mortgage trader" buddies still haven't. Ex-Bear Stearns traders?

Would you provide FURTHER INCENTIVE to somebody to do something they aren't doing as part of their job/business to begin with?

Socialists might say "yes!"

Jeff Bailey : 12/12/2007 4:59:47 PM

NYSE and NASDAQ internals since 11/5/07 at this Link

Jeff Bailey : 12/12/2007 4:52:57 PM

OP-EX like volumes ... 4.2 million at the big board and 2.3 NASDAQ.

Jeff Bailey : 12/12/2007 4:49:01 PM

My NASDAQ A/D 5-day ratio at 50%, still above its recent 12/05/07 inflection low of 47%.

I feel, based on observation, great pressure building in these markets.

Jeff Bailey : 12/12/2007 4:47:34 PM

My NYSE A/D 5-day ratio at 53%. Matches its recent inflection low from 12/05/07.

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

A +/- 7-point gap in ES tomorrow could be HUGE in the direction of the gap.

Jeff Bailey : 12/12/2007 4:34:14 PM

YM 13,505 ... (see bottom of MM 12:45:18)

Nice 400-point swing today.

200 in last hour not a surprise.

Just builds the pressure even more.

Conventional 50-point box Link some noise with a 25 Link

Jeff Bailey : 12/12/2007 4:23:54 PM

Biotech HOLDRs (BBH) $172.80 +1.46% .... $170.70 extended.

Jeff Bailey : 12/12/2007 4:22:43 PM

Biogen Idec (BIIB) $75.88 +0.64% ... $58.00 extended.

Jeff Bailey : 12/12/2007 4:21:35 PM

Biogen Idec To Remain Independent ...

Jeff Bailey : 12/12/2007 4:18:21 PM

2.04 million traded at $149.37

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

500,000 blocked in SPY at $149.25

Linda Piazza : 12/12/2007 4:13:30 PM

Quite a bounce. That potential downside target that I mentioned in my 3:49:20 post wasn't quite erased, but it almost was. The day produced a big doji at the 120-ema, the bullish/bearish benchmark on the daily nested Keltner channels. If this doji had come after a sustained reversal, and not a one-day one, it would be considered a potential reversal signal, but as it is, I consider it just a visual imprint of how undecided and uncertain market participants are right now. Next direction? Who knows. I don't consider this action bullish, but that big doji might as well have been a big question mark.

Keene Little : 12/12/2007 4:05:49 PM

Pretty impressive rally off the low though--ES up 20 points in less than 30 minutes. Nah, this market's not being manipulated. When the Fed says they're going to inject at least $40B into the market before Friday you know that can add a lot of buying pressure and obviously it went into MOC orders.

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

YM 13,500

Keene Little : 12/12/2007 4:01:48 PM

The DOW was driven back up to its downtrend line from today's high and also back up to the broken downtrend line from the October high. It got parked right under resistance to leave us guessing which way tomorrow.

Jeff Bailey : 12/12/2007 4:01:38 PM

Stocks reverse losses at MONTHLY Pivots

Jane Fox : 12/12/2007 3:57:11 PM

This selloff is needed and as long as the markets close above November lows I will stay bullish.

Keene Little : 12/12/2007 3:53:08 PM

I trust this jam job about as much as I trusted this morning's.

Jeff Bailey : 12/12/2007 3:50:39 PM

SPX 1,483

Keene Little : 12/12/2007 3:50:33 PM

It looks like some big players are not finished jamming the shorts. Wonder where they're getting their money from.

Jeff Bailey : 12/12/2007 3:50:03 PM

Decent buy program underway ...

Linda Piazza : 12/12/2007 3:49:20 PM

My daily nested Keltner charts show the potential for the SPX to decline to about 1456. That doesn't prove that will happen, and a daily close back above about 1488 would erase that downside target. However, it exists currently. Those of you with bullish hopes, perhaps considering testing the waters with this test of the 200-ema and other potential support, should consider the possible risk down to 1456. Those with bearish hopes shouldn't consider it a done deal, however. Remember the important PPI tomorrow before the open.

Jeff Bailey : 12/12/2007 3:49:07 PM

January Crude (cl08f) settled up $4.37, or +4.86% at $94.39.

Jane Fox : 12/12/2007 3:45:34 PM

It also looks like the DOW is headed down to 13250 as well. Link

Linda Piazza : 12/12/2007 3:45:05 PM

The USDJPY has begun pulling back from the day's high and has now erased its breakout status to the upside. It's pulling back from this morning's near test of the 50% retracement of its decline off the October high. That 50% level is near 112.60 and the USDJPY hit a high of 112.45 this morning. It's at 111.84 as I type. Even the currency traders can't figure out where to go next, but currencies do show better correlation of support and/or resistance with Fib levels than equities do, at least sometimes. It pulled back from its test of the 38.2% retracement, for example, with that test occurring on 11/30 and the pullback being accompanied by a pullback in some equity indices, too.

Jane Fox : 12/12/2007 3:44:31 PM

Well my goodness it does look like the S&P is going to try and revisit that 1460. Link

Jeff Bailey : 12/12/2007 3:44:06 PM

Stocks Reverse Gains As Oil Settles Above $94.00

Jeff Bailey : 12/12/2007 3:33:31 PM

ATI may be more of a "market perform" than the leader.

Linda Piazza : 12/12/2007 3:33:14 PM

When the SPX fell, it pierced its 200-ema, with that average at about 1473. While some don't watch the -ema as much as they do the -sma, it can be important support or resistance. Keep cinching up your stops if you're in short-term bearish plays. We have the PPI tomorrow morning and earnings from LEH, I believe, tomorrow, too, so decide soon if you want to hold open options plays overnight.

Jim Brown : 12/12/2007 3:33:04 PM

Bottom in Core Labs - It appears the bottom has finally formed in Core Labs (CLB) at 115-120. It has posted gains over the last 3 days and even with the sell off in the broader market this afternoon it is still positive by +$4.31. I think this is an entry point for anybody looking to go long oil without actually being exposed to the volatility in oil. This is a current position in the LEAPS portfolio.

Jeff Bailey : 12/12/2007 3:32:32 PM

US Steel (X) $111.43 +5.12% ...

Jeff Bailey : 12/12/2007 3:31:13 PM

DJ Steel Index (DJUSST) 420.98 +3.56% ... ATI $92.21 +0.88% ... afternoon high was $93.50

Linda Piazza : 12/12/2007 3:28:22 PM

The TRAN led the way to a new low of the day, as it often does lead the way. Keep your eyes on the TRAN.

Jeff Bailey : 12/12/2007 3:26:27 PM


Jeff Bailey : 12/12/2007 3:26:16 PM

NYSE NH/NL 59:116

Jeff Bailey : 12/12/2007 3:25:09 PM

SPX 1,475 ... know where you are. Link

Keene Little : 12/12/2007 3:22:22 PM

AAPL has now dropped below its uptrend line from Nov 16th and yesterday's low and we'll see if it becomes resistance (near 188.40 currently). We've got some confirmation here that the high for AAPL is in. I'm now lowering the stop on my puts to today's high, so using 194.50 on the stock as my stop. That gets it close to a free ride if you entered a short play around 193.50.

In fact I think lowering the stop to breakeven makes sense--don't let this go to a loss now (use a downtrend line from yesterday's high through today's lower high). I'll continue to monitor this as it hopefully heads for the initial downside target near 150.

Jeff Bailey : 12/12/2007 3:19:51 PM

Buy program premium ... SPY $147.55

Jeff Bailey : 12/12/2007 3:19:29 PM

Wachovia (WB) $39.71 -5.29% ... gives up $40.

Jeff Bailey : 12/12/2007 3:18:37 PM

VIX.X 24.19 +2.54% ...

Jeff Bailey : 12/12/2007 3:18:23 PM

Swing trade call exit alert! ... for the one (1) Allegheny Tech ATI Jan $95 Call (ATI-AS) at the bid of $3.80.

ATI $91.24 -0.17% ...

Jeff Bailey : 12/12/2007 3:16:17 PM

TRIN 1.28 ... DAILY S2 1.37

Jeff Bailey : 12/12/2007 3:14:40 PM

YM 13,426 ... if short from 13,515 comment, would strongly suggest lowering stop to 13,481 at MINIMUM.

Jeff Bailey : 12/12/2007 3:09:00 PM

YM 13,454

Jeff Bailey : 12/12/2007 3:08:53 PM

TRIN 1.20

Jeff Bailey : 12/12/2007 3:07:23 PM

YM 13,460

Keene Little : 12/12/2007 3:06:26 PM

The bulls' rally has turned to dust. The banks told us all we needed to know this morning. Nice try Bernanke.

Jeff Bailey : 12/12/2007 3:04:52 PM

5-year ($FVX.X) jumped 11.9 bp to finish 3.456%

Jeff Bailey : 12/12/2007 3:04:14 PM

10-year ($TNX.X) finished up 8.8 bp at 4.078%

Jeff Bailey : 12/12/2007 3:02:58 PM

TRIN 1.05

Jeff Bailey : 12/12/2007 3:02:51 PM

YM 13,515 ... looks short

Jeff Bailey : 12/12/2007 3:02:30 PM

Could be a wild one into the close.

Jeff Bailey : 12/12/2007 3:00:50 PM

BOC's Dodge: Inappropriate For Govts. To Keep Running Big Surpluses

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

BOC's Dodge: Central Banks Anticipate Higher Volatility Year End

Jeff Bailey : 12/12/2007 2:58:05 PM

"Has to be" huge blocks of SPY

Jeff Bailey : 12/12/2007 2:56:48 PM

Could be roll related.

Jeff Bailey : 12/12/2007 2:56:27 PM

Using QCharts' Index:EPREM.X now ... INDEX:PREM.X still off at 11.55

Jeff Bailey : 12/12/2007 2:55:24 PM

Sell Program Premium ... SPY $149.23

Jeff Bailey : 12/12/2007 2:52:48 PM

Tough one here ... TRIN 1.03

Jeff Bailey : 12/12/2007 2:52:21 PM


Jeff Bailey : 12/12/2007 2:51:53 PM

YM 13,516

Linda Piazza : 12/12/2007 2:51:45 PM

The USDJPY still isn't retreating much from the day's high. It's giving signals opposite those of the TRAN. It's a mixed-up day.

Jeff Bailey : 12/12/2007 2:49:17 PM

There must be something wrong with PREM ... EPREM looks more valid 1.47

Linda Piazza : 12/12/2007 2:49:51 PM

The TRAN at 4730.35 is below yesterday's 4733.03 low. It's testing that low as well as intraday Keltner support in the 4726 zone on 15-minute closes. Need I say that the TRAN needs to hold this support? Keep the TRAN on your radar screen as it's been a good guide all day.

Jeff Bailey : 12/12/2007 2:48:15 PM

YM 13,505

Jeff Bailey : 12/12/2007 2:47:55 PM

YM could snap 70 in seconds.

Jeff Bailey : 12/12/2007 2:47:23 PM

SPY $149.22

Jeff Bailey : 12/12/2007 2:46:44 PM

What is going on! Be alert! PREM still stuck 11.99

Jeff Bailey : 12/12/2007 2:46:04 PM

YM long exit alert! ... 13,508

Jeff Bailey : 12/12/2007 2:40:44 PM

YM long stop adjustment alert ... slip it to 13,495

Jeff Bailey : 12/12/2007 2:39:29 PM

YM long stop/target ... stop goes 13,497, target is 13,550

Jeff Bailey : 12/12/2007 2:38:51 PM

YM Long alert! ... here at 13,510.

Jeff Bailey : 12/12/2007 2:38:29 PM

Seeing just over 1 million SPY traded within last 10 minutes.

Linda Piazza : 12/12/2007 2:38:27 PM

Now the SPX's 15-minute 9-ema is no longer providing support on 15-minute closes. The RSI has drifted lower. Before it was no help, zigzagging around the neutral level. All that we can say for sure today is that prices are generally trending lower but also generally holding up above this morning's gap, at least on 15-minute closes.

Jeff Bailey : 12/12/2007 2:35:00 PM

Oh my!... stuck at 12.82

Jeff Bailey : 12/12/2007 2:34:21 PM

My charts froze up on me just after .... looks like it comes at SPY $149.20

Jane Fox : 12/12/2007 2:32:49 PM

Crude is making a huge move today. Link

Jeff Bailey : 12/12/2007 2:32:35 PM

Buy program premium ...

Linda Piazza : 12/12/2007 2:31:30 PM

I have been remiss in reporting on the repos. Today, the Fed announced two repos totalling $27.750 billion. Two repos totalling $25.000 billion matured today, so that made a net add of $2.750 billion.

Jeff Bailey : 12/12/2007 2:26:28 PM

Primary reason for closing out GG is overnight implications of oil and EUR/USD.

Euro threatens a 3-box reversal higher, bullish vertical count still intact at support.

Jeff Bailey : 12/12/2007 2:23:38 PM

Should add ... GBP/USD 2.04765 x 2.04805 +0.67%

Keene Little : 12/12/2007 2:22:55 PM

That was quick--just broke the little bear flags that have been building since today's low.

Linda Piazza : 12/12/2007 2:22:26 PM

The SPX is now finding support on its 15-minute 9-ema on 15-minute closes, with that average at 1493.15 as I type, and with the SPX testing it again. RSI is a neutral 49.14 on the 15-minute chart, and it's been jiggling back and forth at that neutral level for about an hour, so it's not giving any clues.

Jeff Bailey : 12/12/2007 2:21:11 PM

USD/JPY 112.28 x 112.31 +1.48% ...

Jeff Bailey : 12/12/2007 2:21:06 PM

"why/how you ask?"

Keene Little : 12/12/2007 2:20:30 PM

Not sure what to make of the bounce off today's low. It's looking somewhat corrective, as though now we've got a small bear flag forming. I would be cautious if long the market--keep following the bounce up with a stop just below the uptrend line. But right now I wouldn't want to be short and am instead watching to see what develops next.

Jeff Bailey : 12/12/2007 2:20:08 PM

US Dollar Index (DXY) 76.17 -0.05% (30-min delayed) ...

Jeff Bailey : 12/12/2007 2:19:09 PM

StreetTracks Gold (GLD) $80.55 +2.16% ... (~$805.50 spot)

Jeff Bailey : 12/12/2007 2:18:30 PM

US Oil Fund (USO) $74.31 +5.76% ...

Jeff Bailey : 12/12/2007 2:18:05 PM

EUR/USD 1.4721 x 1.4723 +0.46% ...

Jeff Bailey : 12/12/2007 2:17:34 PM

Swing trade put close out alert! ... for the one (1) Goldcorp GG Jan $32.50 Put (GG-MZ) at the bid of $1.35.

GG $33.58 +2.47% ...

Tab Gilles : 12/12/2007 2:15:14 PM

Weekly EIA Report Link

Jeff Bailey : 12/12/2007 2:03:45 PM

US Govt. Posts $98.23 Billion Total Budget Deficit In November

Linda Piazza : 12/12/2007 1:33:18 PM

The SPX's 15-minute 9-ema is just at about 1492.10. The SPX is finding temporary support at this morning's gap level, but it needs to burst up through that 9-ema, at the least, and sustain 15-minute closes above it, before we can truly consider that support as having held. Potential Keltner support is at 1487.06 and then 1482.30 on 15-minute closes. The decline still looks choppy, but it could get stronger if that gap support is lost.

Jeff Bailey : 12/12/2007 1:27:49 PM

Starting to see some quarterly roll in the major equity futures benchmarks.

Keene Little : 12/12/2007 1:18:28 PM

Today's downtrend line for SPX is currently just under 1493 so watch for failure at or below that level. So far the SPX is inside a parallel down-channel so the trend is down for now.

Jeff Bailey : 12/12/2007 1:15:49 PM

SPY session low now ... $148.86 ... SPY trading $149.50.

Jeff Bailey : 12/12/2007 1:14:59 PM

Then $151 +/- $2.47 = $148.53 / $153.47 (see 11:34:06)

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

SPX 1,489.11 +0.77% ... OK, can now chart the 3-box reversal to 1,490.

Should be squared up.

Jeff Bailey : 12/12/2007 1:09:30 PM

Swing trade call adjust target alert! ... With seven (7) days until expiration, please place an order to sell long/close out the one (1) XLF Dec $33 Call (XLF-LG) for $0.25 in the option.

XLF $29.96 -0.95% ...

Jeff Bailey : 12/12/2007 1:03:04 PM

Shouldn't forget ... XLF $30.01 -0.79% ...

Jeff Bailey : 12/12/2007 1:02:14 PM

WB Link ... starting to look like WM when I turned bearish the name in early October. Which was starting to look like CFC Link when I turned bearish the name in August.

See SIMILARITY so trading it.

Keene Little : 12/12/2007 1:01:13 PM

NDX has broken below its bull flag pattern (which obviously is not so bullish anymore), the bottom of which is currently near 2108.60. The bottom of these broken channels often become resistance on a bounce so watch for that as a shorting opportunity. Link

Jeff Bailey : 12/12/2007 12:59:08 PM

WB $40.39 -3.71% ... QCharts' WEEKLY R2 $39.84.

Jeff Bailey : 12/12/2007 12:58:30 PM

BIX.X 280.31 -2.54% ... probes WEEKLY S2. MONTHLY 61.8% 282.69 at time of WB trigger.

Jane Fox : 12/12/2007 12:57:53 PM

It looks like the S&P is on its way to test 1460 or at least 1475 again. Link

Linda Piazza : 12/12/2007 12:49:44 PM

To state the obvious, the SPX has fallen back through 1490. The 200-sma and 10-sma are just below, just below 1486. The SPX is testing them as I type . . . no, falling through them as I type. The point, however, is that the SPX is again in a potential support zone, and those of you in bearish plays need to be cinching up your stops just in case.

Keene Little : 12/12/2007 12:48:08 PM

NDX has had the most bullish looking bull flag pattern today but it is now breaking below its flag pattern. We could be starting the break down.

Jeff Bailey : 12/12/2007 12:43:53 PM

VIX.X 22.21 -5.84% ...

Jeff Bailey : 12/12/2007 12:43:33 PM

Swing trade call exit alert! ... for the one (1) Forest Labs FRX Jan $40 Call (FHA-AH) at the bid of $0.75.

FRX $37.25 +2.22% ...

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

Allegheny Tech (ATI) update alert! $91.32 -0.08% ... negative action this morning, watched closed. After yesterday's reversing lower double bottom sell signal, morning trade up at $94.00 was 3-box reversal, but met with selling.

Jeff Bailey : 12/12/2007 12:38:00 PM

VIX.X 22.04 -6.57% ...

Jeff Bailey : 12/12/2007 12:37:36 PM

Swing trade put alert! ... for one (1) of the Wachovia WB Apr. $40 Put (WB-PH) at the offer of $3.70.

No stop for now, target $30 in the underlying.

WB $40.58 -3.26% ...

Keene Little : 12/12/2007 12:35:00 PM

Keep an eye on the bottom of today's flag patterns for the pullback. Bulls obviously want to see them hold.

Linda Piazza : 12/12/2007 12:17:19 PM

The SPX has been in a clear downtrend since the first 15 minutes of trading, but it's a choppy back-and-forth downtrend as seen on the 15-minute chart. I frankly don't know what to make of the pattern--bearish in the fact that it's retraced so much of the early-morning gain but bull-flag-like in shape. I don't think it's because I'm particularly terrible at technical analysis. At times I miss things and I don't have a problem admitting those times. This time, though, I think it's a clear indication that market participants, that "the market," if you will, is having trouble interpreting what's happened the last few days. In any case, the short-term trend remains down for now, but you've had two days of examples of how quickly any scratched-out gains can be wiped out. Guard any profits you might have.

Keene Little : 12/12/2007 12:09:09 PM

The more bearish interpretation of the pattern for the decline in the banks is a 1-2, 1-2 wave count to the downside and that would suggest a very sharp selloff coming. While it could set up for a bounce from here I would not be comfortable stepping in front of their decline to try a counter trend long play.

Jeff Bailey : 12/12/2007 12:06:51 PM

NASDAQ NH/NL 64:81 ... D ratio 44.1%, 5-day 43.5%, 10-day 37.9%

Jeff Bailey : 12/12/2007 12:06:10 PM

NYSE NH/NL 50:85 ... D ratio 37.0%, 5-day 51.0%, 10-day 40.8%

Keene Little : 12/12/2007 12:02:51 PM

If all the hoopla this morning was due to the perceived benefit to the banks by the Fed's actions in creating a bailout fund, er excuse me, a "term auction facility" to relieve the credit crunch, why did investors immediately sell into this morning's rally in the banks and drive them lower than yesterday's close? Somebody's blowing raspberries at Bernanke this morning.

I do see the possibility for the banks to get a better bounce though. The wave pattern for the decline in the BIX from Monday's high looks like it could be completing a 5th wave down, with bullish divergences. That suggests the banks could be getting ready for a bigger bounce that could last a couple of days. Because of the impulsive decline though the bounce will set up a good shorting opportunity.

Linda Piazza : 12/12/2007 12:02:49 PM

I watch the markets today and have an image of someone standing stark still, shoulders up defensively, arms half extended with fingers splayed, gaze darting everywhere, not sure which direction to move.

Jane Fox : 12/12/2007 11:54:06 AM

WE darn it I was stopped again. I was thinking of putting the stop just under daily lows but didn't want to take on that much risk.

Jeff Bailey : 12/12/2007 11:50:05 AM

Concerted effort to cap SPY

Jeff Bailey : 12/12/2007 11:49:40 AM

Sell Program Premium ... SPY $150.32

Linda Piazza : 12/12/2007 11:45:20 AM

So far, the SPX is still finding resistance on 15-minute closes at its 15-minute 120-ema, now at 1501.72, but it's not dropping away too deeply from those resistance tests, either. The market is still sorting out its reaction.

Jane Fox : 12/12/2007 11:44:32 AM

AD volume is climbing - bullish.
AD ratio is falling - bearish
VIX is doing nothing - neutral
DAX - neutral
US$/YEN - neutral. Link

Jane Fox : 12/12/2007 11:42:58 AM

I am now long YM at 13611.

Jane Fox : 12/12/2007 11:41:30 AM

If I am triggered long at 13611 I will put a stop at 13559 and a target at 13663.

Jane Fox : 12/12/2007 11:38:31 AM

I will be take YM long at 13611 just above the swing high at 13609. Need to get back what I lost yesterday.

Jeff Bailey : 12/12/2007 11:34:06 AM

SPY Options Chain (CBOE Volume Only) at this Link

Jeff Bailey : 12/12/2007 11:29:24 AM

I do observe further pressure ...

Keene Little : 12/12/2007 11:27:34 AM

Gold set up a nice short by reaching up and tagging the Fib area I've been eyeing for resistance and at the same time did a little throw-over above the top of a rising wedge for its bounce from Nov 30th. It has retraced 62% (820.27) of the leg down from Nov 23rd and achieved two equal legs up at 822.50. You can see by the price action in the bounce how much the highs and lows have overlapped. This is classic corrective price behavior and has been a warning to bulls that gold will turn back down: Link

I'm not sure at this point if gold will stay within the larger sideways triangle (best seen on the daily chart), the bottom of which is currently near 792 but right now gold looks vulnerable to a turn back down from here. If it manages to rally further then upside potential is to the top of its sideways triangle near 830 (shown in pink) before turning back down.

Jeff Bailey : 12/12/2007 11:25:28 AM

VIX.X 21.68 -8.09% ... more put selling/call buying than put buying/call selling at this point.

Jeff Bailey : 12/12/2007 11:24:46 AM

Good gravy! ... CBOE Most Active SPY options ... SPY Dec $151 Put 50,634:90,937 ; Dec $150 Call 8,345:89,472 ; Jun $167 Call 1,660:5,874

Jeff Bailey : 12/12/2007 11:19:47 AM

At $150.34 ... bull's risk to a "sell signal" is to $147, or $3.34 with potential upside to bullish vertical count of $175.

Bear's risk to a powerful triple top buy signal is to $153, or $2.66, with reward undetermined.

I feel, based on observation, great pressure building in this market.

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

SPY more accurate $1 box chart at this Link

A $1 box gets us closer to the 10-point SPX chart.

Linda Piazza : 12/12/2007 11:14:41 AM

The SPX's 15-minute 120-ema is at 1501.84. Bulls want to see values above that sustained on 15-minute closes: bears want closes below it. The OEX is already back above its 15-minute 120-ema, with that at 700.85, but with the 15-minute period not yet closed. For the OEX in particular, the 45-ema seems to be stronger resistance on 15-minute closes this morning. That's at 703.

Keene Little : 12/12/2007 11:13:39 AM

The same potential exists for the others as well. The jury is still out here but if short I'd have my stop just above the highs put in just before 10:30. You want out of the way if it rallies and I wouldn't be interested in trading potential chop if it pokes higher and then turns back down again.

Jeff Bailey : 12/12/2007 11:13:33 AM

Excellent, excellent comments from CNBC guest regarding ... it is not that the banks don't have the money to lend, it is their untrust and unwillingness to lend right now.

Keene Little : 12/12/2007 11:08:50 AM

So far the pullback in the techs looks like a bull flag. Any rally back above the high just before 10:30 (NDX 2126.42) would be potentially bullish. Either that or it will mean a larger sideways consolidation. The flip side of this pattern is more bearish as it could be getting ready to waterfall lower (a break through the bottom of the flag pattern would be a sell signal).

Linda Piazza : 12/12/2007 11:06:25 AM

The TRAN reversed more than 3/4 of the day's range. It's bouncing a little now, but is still below the now-descending 15-minute 9-ema, at 4794.72. The TRAN is at 4781.20 as I type.

Jeff Bailey : 12/12/2007 11:05:24 AM

Still no trade at WEEKLY Pivot.

Jeff Bailey : 12/12/2007 11:05:01 AM

Sell Program Premium ... SPY $150.11 +1.48% ...

Jeff Bailey : 12/12/2007 11:01:42 AM

Sell Program Premium ... SPY $149.92 +1.35% ...

Linda Piazza : 12/12/2007 10:58:06 AM

The SPX has followed the TRAN's example. (See my 10:21:45 post.) Like the TRAN, the SPX has begun forming 15-minute closes below the 15-minute 120-ema. This is a short-term bullish/bearish benchmark. Today, not much is trustworthy as market participants digest all the news, but this isn't the outcome short-term bulls wanted to see.

Jeff Bailey : 12/12/2007 10:57:22 AM

Sell program premium ... SPY $150.00

Jane Fox : 12/12/2007 10:53:17 AM

I have been talking about the US$ making a bottom for a while now and the more I watch this chart the more I think it has. This of course has some huge ramifications on my Gold position. Link

Keene Little : 12/12/2007 10:52:17 AM

BIX has now broken yesterday's low and the rest of the market continues to drop back. So far it's just been a BIG gap and crap kind of day. Shorting this morning's high was a scary thing to do but it was the right play (so far).

Jeff Bailey : 12/12/2007 10:50:22 AM

S&P 500 Index (SPX.X) 1,501.16 +1.59% Link ... Session high has been 1,511.96, session low here is 1,497.64.

Jeff Bailey : 12/12/2007 10:46:29 AM

S&P Dep Receipts (SPY) $150.61 +1.82% ...

Jeff Bailey : 12/12/2007 10:45:47 AM

CBOE Oil Index (OIX.X) Alert! 860.30 +3.47% ... that's a new all-time high.

Jeff Bailey : 12/12/2007 10:45:02 AM

MBA's Application Table that I track at this Link

Jeff Bailey : 12/12/2007 10:36:56 AM

MBA's Weekly Application Survey at this Link

Linda Piazza : 12/12/2007 10:36:37 AM

Yesterday the USDJPY fell into breakdown mode on its 15-minute Keltner chart, this occurring after the FOMC decision was announced. This morning, it's climbed into breakout mode. The currencies are typically rather well mannered with respect to Keltner channels, so this is wild action. So far, the USDJPY isn't retreating far off its 8:30 high of 112.45 this morning. It's at 112.34 as I type. The 50% retracement of the USDJPY's steep decline off the October high is at about 112.60, so this morning's high has been a close test of that 50% retracement. Normally, those 50% retracements are strong resistance on first test, this particularly since the USDJPY gapped down from that level in November. However, some equity indices zoomed right through the 50% levels, cutting through them like butter. So, keep the USDJPY on your radar screen. It could be about time soon, probably within the next day or so, for a pullback (with "could" the important word), but so far, it's not pulling back much this morning.

Jeff Bailey : 12/12/2007 10:35:40 AM

BOE: Central Bank's Move Aims To Forestall Sharp Credit Tightening ...

DJ- Wednesday's co-ordinated action by major central banks to pump liquidity into financial systems, was aimed at stemming a further tightening of credit conditions, a Bank of England spokesman said. "The actions demonstrate that central banks are working together to try to forestall any prospective tightening of credit conditions," the spokesman said. The actions are a "response to pressures in interbank markets, which have increased in recent weeks, reflecting sentiment about the global financial sector," the spokesman said. The troubles in interbank markets have sent key short-term borrowing rates higher. The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada and the Swiss National Bank said Wednesday they were taking coordinated action to inject liquidity into financial systems. The Fed said it had created reciprocal "swap" lines with the European Central Bank, for $20 billion, and the Swiss National Bank, for $4 billion. It is the first currency swap organized by the Fed and the ECB since the September 2001 terrorist attacks. Meanwhile, the BOE said it will increase the amount of three-month funds available to banks over the turn of the year. It also said it will accept a wider range of collateral at prescheduled money-market operations Dec. 18 and Jan. 15.

Jane Fox : 12/12/2007 10:34:25 AM

U.S. gasoline inventories up 1.6 mln barrels in latest week

U.S. distillate stocks down 800,000 barrels in latest week

U.S. crude inventories down 700,000 barrels in latest week

Jeff Bailey : 12/12/2007 10:34:23 AM

Jan Nat. Gas (ng08f) $7.29 +2.83% ...

Jeff Bailey : 12/12/2007 10:34:02 AM

Current National Temperatures Link

Jeff Bailey : 12/12/2007 10:32:57 AM

US Oil Fund (USO) $72.09 +2.60% ...

Jeff Bailey : 12/12/2007 10:32:39 AM

Permian Basin Trust (PBT) $15.31 +1.72% ...

Jane Fox : 12/12/2007 10:32:31 AM

LONDON (MarketWatch) -- U.S. home repossessions in November totalled 72,101, up 31.8% from the previous month, according to data from Foreclosures.com. For the first 11 months of the year, around 527,000 homes ended up back in the hands of lenders, up 41% from the same time last year. The report noted that there had been areas where the number of foreclosures and pre-foreclosure filings had actually fallen from a year ago.

Jeff Bailey : 12/12/2007 10:32:06 AM

EIA: Weekly Crude Oil Inventory down 700,000 bbls.

Jane Fox : 12/12/2007 10:30:24 AM

Crude is breaking out so this is good news for my Gold position. Link

Linda Piazza : 12/12/2007 10:21:45 AM

So far, the SPX is maintaining closes above, or rather at, its 15-minute 120-ema. This is a short-term bullish/bearish benchmark, and the 15-minute closes at the benchmark indicates that the market is as uncertain about where to go next as I am about where it's going. A slight, slight edge has to be given to the bulls since that support is being maintained on 15-minute closes. This is not true for the TRAN, however, with the TRAN having violated that 120-ema on a 15-minute close. Keep the TRAN on your radar screen.

Jeff Bailey : 12/12/2007 10:19:35 AM

North American Palladium (PAL) Announces Increase in Unit Offering ... Press Release Link

PAL $3.62 +6.47% ...

Jeff Bailey : 12/12/2007 10:16:07 AM

WM $17.22 -1.14% and MBIA $32.46 -1.54% ...

Jeff Bailey : 12/12/2007 10:15:25 AM

BAC $44.07 -1.32%, C $32.90 -0.99% and WB $41.08 -2.07% ...

Jeff Bailey : 12/12/2007 10:09:54 AM

What will they come up with next? Genius!

Jeff Bailey : 12/12/2007 10:08:30 AM

Fed Teams With Central Banks on Credit ... AP Story Link

Keene Little : 12/12/2007 10:05:09 AM

While the banks (BIX) jumped up out of the gate with the broader market averages they weren't nearly as excited about all this. They're now back down to just above yesterday's low. Follow the money.

Linda Piazza : 12/12/2007 10:03:55 AM

The TRAN is rolling down now some from its test of its former supporting trendline. Looking to the SPX, I see it testing its 15-minute 120-ema. There's support now at that 120-ema at about 1502 and then layered down at 1499.57 and 1497.69, so I don't think we really know too much yet.

Tab Gilles : 12/12/2007 10:01:47 AM

You gotta love Ben Bernanke's sense of timing and how he keeps the market guessing. The first time he cut rates he did it on OpEx in August at 8 AM, catching the shorts by surprise.

Then the 2nd rate cut was only a 1/4 point when everyone expected a 1/2 point.

Now yesterday's tepid rate cut that dissapointed was followed by another before the bell surprise for those short the market.

Shortly before the opening bell, the Federal Reserve said it will take joint action with three major central banks in order to ease liquidity conditions in the credit markets. The Fed will create a term auction facility and will lend at least $40 billion, and potentially much more, in four auctions this week. Rates would be far below those which are charged from the discount window, according to the Wall Street Journal. The Fed will also create swap lines with the European Central Bank and the Swiss National Bank, enabling them to make dollar loans to banks as the Fed hopes to put downward pressure on the LIBOR rate.

Bernanke is definitely NOT Greenspan!

I posted yesterday that I wouldn't be surprised to see the markets rally today. I viewed the Fed's "calmness and tepid" move with some doubt. I didn't believe they wouldn't let 7 weeks before the next FOMC meeting go by without some further action...sure enough they came through.

Jeff Bailey : 12/12/2007 10:01:24 AM

Texas Instruments (TXN) $33.54 +1.85% ...

Jeff Bailey : 12/12/2007 10:00:43 AM

Cisco Systems (CSCO) $29.00 +3.49% ... juuust above WEEKLY R2.

Linda Piazza : 12/12/2007 9:50:17 AM

The TRAN is pulling back to that former supporting trendline, the one that had begun forming on 12/04. Be careful here if in bullish trades, as this morning's climb could have constituted the beginning of a perfect kiss-goodbye test of that trendline. For those not familiar with the term (Keene, did you invent the name or just employ it, as I always previously just called it a retest?), once support or resistance is broken, prices often come back to test the broken trendline and then fall away from it or bounce from it, depending on whether it was support or resistance. Such a test can often present a good entry into either a bearish play, in the case of a kiss-goodbye test of former support, or a bullish play when former resistance is retested. Today, in this anything-can-happen-in-the-next-moment environment, it's a riskier play than the conservative trade it was once considered to be.

Jane Fox : 12/12/2007 9:46:20 AM

However, the VIX is making new daily highs supporting the S&P's new daily lows.

Jane Fox : 12/12/2007 9:45:10 AM

Egdas the AD line is +2043.

Linda Piazza : 12/12/2007 9:44:49 AM

I'm not going to pretend I have a clue what's going to happen next. I don't. I do know that bulls don't want to see a hard reversal of this morning's knee-jerk response to the Fed's action.

Keene Little : 12/12/2007 9:43:24 AM

SPX managed, in one 5-min bar, to jump more than 30 points and tag its broken uptrend line from Nov 26th. I certainly didn't expect to see that this morning (I expected a bounce but not like this). But it's still resistance and was a short there. The bulls really don't want to see a reversal of this morning's excitement. That would be very disheartening.

Linda Piazza : 12/12/2007 9:43:01 AM

The SPX's 15-minute 120-ema is at 1501.93 with further support just below it, at 1500.32. SPX bulls would like to see, and perhaps need to see, the SPX hold those levels on 15-minute closes. The SPX is at 1506.96 as I type.

Jane Fox : 12/12/2007 9:42:09 AM

US$ is falling but it has not broken support at it 38.20% fib retracement. Link

Linda Piazza : 12/12/2007 9:41:38 AM

This big move this morning has scrambled the indicators I use. They're pretty much useless this morning. However, we should note that the TRAN, along with the SPX itself, has zoomed right up to the bottom of the consolidation zone that had held from Friday straight through into the announcement yesterday. It would be natural, even if the day is going to continue to be one showing strong gains, which we don't know yet, for the TRAN and other indices, including the SPX, to pause now. The TRAN is at 4889.19 as I type. Short-term bulls would like to see it remain above about 4849 if it pulls back, and especially above 4820, as those mark a former supporting trendline and the 15-minute 120-ema.

Linda Piazza : 12/12/2007 9:36:38 AM

This market is so volatile that resistance and support levels seem to have little meaning. However, I wouldn't be surprised if the SPX were to set up some kind of consolidation zone, perhaps a triangle, while market participants weigh the impact of the scary conditions that have precipitated the Fed's actions against the amelioration offered by the Fed. If so, we won't see yesterday's high exceeded. In any case, we should watch for potential resistance beginning in the current 1509 level, up to yesterday's high. Above that, I see potential resistance in the 1532 zone, a zone I mentioned yesterday.

Jane Fox : 12/12/2007 9:35:55 AM

Well this time Crude is supporting the rally in Gold. Link

Jane Fox : 12/12/2007 9:35:05 AM

Gold is in rally mode. Once again I have not looked at the Crude or US$ charts yet so it will be interesting to see if Crude is rallying as well and if the US$ is falling. Link

Linda Piazza : 12/12/2007 9:33:37 AM

Hang onto your hats!

You know, I'm probably going to catch it for saying this but wasn't there a better way of managing these developments? I wasn't personally hurt yesterday and I won't be today because my trades weren't impacted, so this doesn't come from some personal bitterness. Still, I can't help but worry about subscribers whose bullish plays were wiped out yesterday and those whose bearish plays will be wiped out this morning. A simple statement added to the news release yesterday afternoon letting market participants know that the Fed was on top of things and ready to take further measures would have prevented a lot of lost money in short-term trades.

Jane Fox : 12/12/2007 9:31:42 AM

I have been speculating that the S&P would retrace. I also have been speculating that 1490 would not hold as support because it was becoming too obvious to traders. I also speculated SPX would retrace to about 1460. Well yesterday we did get our retracement and 1490 did not hold up as support but SPX didn't quite make it to 1460 (low yesterday was 1475). Link

Keene Little : 12/12/2007 9:31:53 AM

Needless to say this morning's HUGE spike up in the futures pre-market will make it a tad difficult to figure out what's next for the market. My first thought is to simply short the open with a stop above yesterday's high. While that may sound scary, and the stop is actually much further than I'm comfortable with, it's the right setup for it. Yesterday's high was an ideal setup for a short and we should see the downside continue. Gunslingers only at the open but look to short it.

Jane Fox : 12/12/2007 9:25:06 AM

The markets have reacted to some news and I'm not sure if it was the 8:30 economic Trade deficit report or the news that the Federal Reserve has joined other central banks across the world to address the credit freeze caused by the sub prime debacle.

I somehow don't think though it was the trade deficit news because that was not a good report although from a contrarian point of view it does mean the FED will probably lower rates again. Link

Keene Little : 12/12/2007 9:21:33 AM

WOW! I'd say those bears who had no fear at yesterday's close are showing a little fear this morning! Nice jam job in the futures this morning. ES spiked well above the 1507 level I thought it would bounce back up to so now we'll see what happens to the cash market. Whoever said the PPT is someone's imagination might want to rethink that after seeing this.

Jane Fox : 12/12/2007 9:17:25 AM

The Federal Reserve has joined with four other major central banks to announce a series of measures designed to inject added cash into global money markets in hopes of thawing a credit freeze that threatens their economies.

The Fed said today it would create a new "term auction facility" under which it would lend at least $40 billion and potentially far more, in four separate auctions starting this week. The loans would be at rates far below the rate charged on direct loans from the Fed to banks from its so-called "discount window." But the new loans can still be secured by the same, broad variety of collateral available that banks pledge for discount window loans.

The European Central Bank, Bank of England, Bank of Canada and Swiss National Bank simultaneously announced parallel measures.

The Fed also said it had created reciprocal "swap" lines with the European Central Bank, for $20 billion, and the Swiss National Bank, for $4 billion. These will enable the ECB and SNB to make dollar loans to banks in their jurisdiction, in hopes of putting downward pressure on interbank dollar rates in the offshore markets, principally the London Interbank Offered Rate, or Libor, market. The inability of foreign central banks to inject funds in anything other than their own currency has been a factor creating the squeeze on bank funding in those markets.

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

WASHINGTON (MarketWatch) -- The U.S. trade deficit widened in October, suggesting the trade sector will subtract from economic growth in the fourth quarter.

The fourth quarter could use all the help it can get. Before the report, many economists were expected fourth-quarter GDP growth to dive below a 1.0% annual rate from the strong 4.9% growth rate in the third quarter.

A narrowing trade deficit has boosted growth in three of the past four quarters.

The nation's trade deficit widened 1.2% in October to $57.8 billion from a revised $57.1 billion in September, the Commerce Department said.

This is the biggest trade gap since July. The lion's share of the deterioration in the trade gap was due to sharp increases in the quantity and price of petroleum imports.

Jane Fox : 12/12/2007 9:11:25 AM

WASHINGTON (MarketWatch) - Driven by a weaker dollar and much higher prices for petroleum and natural gas, import prices surged 2.7% in November, the largest monthly increase in 17 years, the Labor Department reported Wednesday.

Even excluding fuels, import prices rose 0.5%.

Import prices have now risen 11.4% in the past year, the largest gain in the 25-year history of the import price index. Import prices increased a downwardly revised 1.4% in October.

The report comes one day after the Federal Reserve cut its overnight interest rate target by a quarter percentage point, citing slower economic growth. However, the Fed also said some inflationary pressures remain, which could be an argument against cutting rates further.

The import price index report certainly highlighted the inflationary dangers facing the Fed and the economy. More bad inflationary news is likely over the next two days with the release of the producer price index on Thursday and the consumer price index on Friday.

Most analysts say higher import prices are not passed on quickly or completely to end users.

Intense competition has limited the ability of firms to pass along 100% of the higher prices they must pay. Profit margins are squeezed instead.

Prices received by U.S. producers also jumped in November, rising 0.9%, the biggest increase in 12 years. Export prices are up 6.1% in the past year, also the largest yearly gain in 12 years. Prices of agricultural exports rose 1.4%, the sixth straight month of 1%-plus gains.

Agricultural export prices are up 23% in the past year, reflecting the weaker dollar and the boom in commodity prices.

Market Monitor Archives