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Jeff Bailey : 12/14/2007 12:49:58 AM

YM 13,600 ... see you in the morning!

Jeff Bailey : 12/14/2007 12:37:05 AM

NASDAQ-100 Query of Buy/Sell Signals since 12/04/07 at this Link

If StockCharts.com didn't adjust for dividends, XRAY Link has actually given 7 buy signals (only the 1st reversing higher PnF buy signal counts toward the bullish %). Reversing higher PnF buy signal was early August 2002 at $20. (Nasty candle today) Achieved its bullish vertical count of $31.50

NIHD Link gives reversing lower PnF sell signal (a triple bottom too!) at $47.00. This does take -1 from bullish %. No dividend, so StockCharts.com's chart is accurate depiction of supply (O) and demand (X). Short/put a bounce back near $48. Stop $57. Target Purdue University probability study on patterns in "bear" market (see bullish %), or bearish vertical count under construction of $31.00.

WYNN Link ... while historical chart not accurate as stock does pay a dividend, 2nd sell signal at $118. (see my MM 12/03/2007 post and comments for reversing lower PnF sell signal -1)

Note: SPG went out at $94.87 today. A little "commercial" in each perhaps.

That reminds me ... might take a look at some apartment REITs. Very high occupancy rates here in Aurora, CO as the "foreclosed" look for shelter.

As fellow trader Jimmy C would say ... "there's always a bull market somewhere!"

Jeff Bailey : 12/13/2007 11:38:22 PM

Bear Confirmed! ... Thursday's action did have Dorsey/Wright's NASDAQ-100 Bullish % (BPNDX) seeing a net loss of 3 stocks to reversing lower Pnf sell signals. That's enough for a 3-box reversal to 38% on chart (37.00% actual).

Here's StockCharts.com's $BPNDX Link

Keene Little : 12/13/2007 11:30:47 PM

Friday's pivot tables: Link and Link

The setup is not too different from the chart shown Wednesday night for SPX. Thursday's afternoon bounce made it a little higher than I thought it would for the more bearish wave count but it's actually a very nice setup for the bears with the potential wave count calling for a 3rd of a 3rd wave down for the decline that started from Tuesday's high. This count calls for an immediate selloff on Friday (although it could tolerate a very quick rally up as high as 1500 without negating the dark red wave count): Link

If it rallies any higher than 1500 then I'd look for at least a retest of Wednesday's early morning high at 1512, if not Tuesday's high just under 1524, before turning back down. And if it manages to rally above Tuesday's high then I'd say Santa has arrived just in time to give us our year-end rally. At this point I'll believe it when I see it since the wave pattern is setup up for a potentially bearish selloff from here.

There's still a lot of similarity in the short term charts between the indices. As the NDX 60-min chart shows, it's possible today's rally completed a smaller a-b-c bounce for wave-ii of wave-(iii). That simply means it's set up for a 3rd of a 3rd wave down (which often starts with a gap down) so we'll see if that's what's in store for the market tomorrow. If the bulls can keep this bounce alive and get it back above 2120 then there could definitely be more rally ahead and into next week. Link

The overnight futures were steadily rising higher and it was looking like a bullish open to the trading day (but lots of darkness before the morning). Then around 10:30 PM EST the equity futures stumbled and dropped into the red while bond futures rose. As Jeff just pointed out, excerpts from Greenspan's interview, to be released Friday morning, about the increased chances of a recession appear to have spooked overnight traders.

Jeff Bailey : 12/13/2007 11:21:04 PM

Greenspan: Odds Rising for a Recession ... AP Story Link

Jeff Bailey : 12/13/2007 11:11:49 PM

YM has shed about 70 points in the last 30-minutes.

13,569 here ...

Jeff Bailey : 12/13/2007 10:34:52 PM

Remember! December option expiration is next Friday (12/21/2007)

Jeff Bailey : 12/13/2007 10:33:24 PM

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

Day traded short 1/2 position (If $10K is full, then 1/2= $5K) in shares of Coeur D' Alene Mines (CDE). Did NOT get my target of $4.24. CLOSED 1/4 position (If $5K is 1/2, then 1/4= was resulting 569 shares) at $4.38.

HOLDING remaining 1/4 position overnight. Back the stop off a bit to try and avoid getting stopped at an opening tick.

SOLD covered one (1) of the RIO-XZ against the still long RIO-MG.

Note: On 11/27/07 we also sold covered a RIO-XT for $1.30, then bought it back on 12/4/07 for $0.25.

Perhaps you have some in-the-money puts that you might also want to look at writing some out-the-money Dec. puts against.

OI Technical Staff : 12/13/2007 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 : 12/13/2007 5:41:49 PM

If long ESLR Link , might take some off the table. Not until 2010.

Jeff Bailey : 12/13/2007 5:31:52 PM

Evergreen Solar (form 8-k) at this Link

Jeff Bailey : 12/13/2007 5:30:49 PM

Evergreen Solar (ESLR) $15.12 +4.92% ... surging to $17.99 on CNBC report of 10-year pact with Silicium de Provence.

Jeff Bailey : 12/13/2007 5:23:07 PM

5.4 million $45.76 (4:45:54)

Jeff Bailey : 12/13/2007 5:22:50 PM

2.06 million at $45.76

Jeff Bailey : 12/13/2007 5:22:46 PM

1.4 million $45.76

Jeff Bailey : 12/13/2007 5:22:40 PM

5.4 million at $45.76 (4:26:09)

Jeff Bailey : 12/13/2007 5:20:40 PM

Biiiiiiig blocks in JPM being billed out after the close.

Jeff Bailey : 12/13/2007 5:18:36 PM

That looks like a pretty good deal JPM got. Compared to C especially.

Jeff Bailey : 12/13/2007 5:17:50 PM

JP Morgan $3B 10-year Sold; Yield 6.024%; Tsys +1.85

Details Link

Jeff Bailey : 12/13/2007 5:06:02 PM

GlaxoSmithKline (GSK) $53.93 +0.93% ... quiet at $53.85 extended.

Jeff Bailey : 12/13/2007 5:04:19 PM

FDA Panel Rejects Mevacor For Over-The-Counter Use (MRK/GSK)

DJ- A Food and Drug Administration panel Thursday rejected a bid by Merck & Co. (MRK) to sell its cholesterol-lowering drug Mevacor without a prescription. The panel of outside medical experts said it was concerned that consumers couldn't adequately follow instructions for using the product in an over-the-counter setting. The panel voted 10 to 2 with one person abstaining in recommending that the FDA not approve Mevacor. Merck has asked the FDA to allow the company to switch a 20-milligram dose of Mevacor from prescription to over-the-counter status. It's the company's third attempt to make a switch since 1999. The FDA has twice rejected Merck's effort to make the switch mostly on similar concerns about consumer use. The FDA usually follows its panel's advice but is not required to. If approved, Mevacor would be marketed by GlaxoSmithKline PLC (GSK), although the negative panel vote makes FDA approval of the Mevacor switch unlikely. Mevacor was approved as a prescription drug in 1987 and is sold in a range of doses.

Jeff Bailey : 12/13/2007 5:02:28 PM

Merck (MRK) $59.70 +0.11% ... slips to $59.51 on CNBC report that US advisory panel said its Mevacor failed to show that consumers could make appropriate decisions if sold over-the-counter.

Keene Little : 12/13/2007 4:53:59 PM

The indices still look similar after today's price action and as the NDX 60-min chart shows, it's possible today's rally completed a smaller a-b-c bounce for wave-ii of wave-(iii). That simply means it's set up for a 3rd of a 3rd wave down (which often starts with a gap down) so we'll see if that's what's in store for the market tomorrow. If the bulls can keep this bounce alive and get it back above 2120 then there could definitely be more rally ahead and into next week. Link

Keene Little : 12/13/2007 4:28:57 PM

I'm thinking with SPX parked just under resistance at 1490-1492 today that you want to be thinking short against that resistance and then let the market tell you whether it thinks it's resistance or not (placing your stop just above). So Jane and I have this sucker surrounded now.

Keene Little : 12/13/2007 4:26:03 PM

The setup is not too different from the chart shown last night for SPX. Today's bounce made it a little higher than I thought it would for the more bearish wave count but it's actually a very nice setup for the bears with the potential wave count calling for a 3rd of a 3rd wave down for the decline that started from Tuesday's high. This count calls for an immediate selloff tomorrow (although it could tolerate a very quick rally up as high as 1500 without negating the dark red wave count): Link

If it rallies any higher than 1500 then I'd look for at least a retest of Wednesday's early morning high at 1512, if not Tuesday's high just under 1524, before turning back down. And if it manages to rally above Tuesday's high then there's a decent chance Mr. Ho Ho Ho Himself to sprinkle fairy dust on the market and elevate into the end of the year (SPX 1600?).

Keene Little : 12/13/2007 4:08:53 PM

OK, who let AAPL pull back from the cliff's edge? My stop is at 194.50 (closed today at 191.83 and topped out at 192.09) and we'll let the market tell us whether or not this stock has topped but I'd sure like to get resolution soon. This is a reason I don't buy front month options though--the market always seems to take longer than I think it should. It just won't listen to me (kind of like my grown kids).

Jane Fox : 12/13/2007 4:02:37 PM

Ah gee just noticed the cash market is closed.

Jane Fox : 12/13/2007 4:02:22 PM

Ok this is looking bullish and I think it is a great place to get long because you have a very clear place to put your stop - just under yesterday's lows. For those you who are willing to take on a little more risk put your stop just under 1460. Link

Keene Little : 12/13/2007 4:02:12 PM

They pushed it right up to (and just slightly past) the upside Fib projection for this leg up. It's a setup for a down day tomorrow. Now let's hope they don't drop the futures 100 points overnight and spoil the entry (if in fact it's going to be a down day).

Linda Piazza : 12/13/2007 3:56:12 PM

Decide now whether you want to risk holding overnight with the CPI tomorrow morning.

Jeff Bailey : 12/13/2007 3:53:02 PM

Day trade short cover alert! ... for 1/4 position (569 shares) in shares of Coeur D' Alene Mines (CDE) at the offer of $4.38

Will hold the remaining 1/4 position with adjusted stop to $4.52.

Linda Piazza : 12/13/2007 3:47:25 PM

The TRAN has been going sideways for the last hour, not making any more progress toward breaking through the lip of its saucer-like formation or charging toward its target and possible resistance, at 4774.88 currently. Will it get parked just underneath it into the close, ahead of tomorrow's important CPI?

After studying the TRAN's chart, I'm not surprised to turn to the SPX's, and see that it, too, has climbed just underneath important resistance, with its next short-term target and presumed resistance now at 1491.14 on 15-minute closes.

Keene Little : 12/13/2007 3:36:00 PM

The question of course now as we rally into the close is whether or not this is the misdirection--the headfake before heading into opex. Considering how flat we are on the day that's hard to assess. For now keep an eye on those levels I gave for the DOW and SPX and we'll see if that's where the rally stops.

Keene Little : 12/13/2007 3:31:39 PM

We could also get a final 30-min jam job like yesterday as the Fed's money gets put to work again in the MOC orders.

Keene Little : 12/13/2007 3:30:18 PM

There's slight overlap in the bounce off this morning's low but ignoring that last spike down it's possible we're getting a 5-wave move up to complete an A-B-C bounce off yesterday afternoon's low. Equality in that bounce would be at DOW 13516 and SPX 1487.53 (a retest of yesterday's late afternoon high). SPX 10-min chart: Link

Just playing with some ideas here while waiting for clarity but watch those levels if we get a final push up into the close as that could set up a down day tomorrow (which will probably start in the futures again if recent activity is any guide).

Jeff Bailey : 12/13/2007 3:21:33 PM

Jan Heating Oil (ho08f) settled down $0.0285, or -1.08% at $2.6147.

Jane Fox : 12/13/2007 3:20:26 PM

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

Jeff Bailey : 12/13/2007 3:18:42 PM


DJ- After knocking the Midwest cold, a major ice storm packs its icicles and heads east leaving about 414,000 homes and businesses without power and 33 people dead, mostly in traffic accidents. Some schools close as snow falls in NYC region.

Jeff Bailey : 12/13/2007 3:17:02 PM

JetBlue (JBLU) $7.15 +14.40% ... slated to be released for trade at 03:25 PM EST.

Linda Piazza : 12/13/2007 3:05:40 PM

The TRAN is still maintaining 15-minute closes above its now climbing 9-ema, now at 4740.57. The TRAN is at 4751.66 as I type. If it keeps climbing, the potential target now located at 4775.99 is often also strong resistance on 15-minute closes, so watch your SPX, OEX and Dow short-term longs if that should be hit. You don't want to see a strong pullback in the TRAN.

Jeff Bailey : 12/13/2007 2:56:33 PM

Lufthansa Seeks Stake in JetBlue ... AP Story Link

Jeff Bailey : 12/13/2007 2:55:07 PM

JetBlue (JBLU) $7.15 +14.40% ... halted for trade (since 02:36 PM EST).

Keene Little : 12/13/2007 2:50:54 PM

Follow your recommendations with great value, would appreciate your comments on FSLR (triple top breakout on P&F) and on ICE. Holding deep in the money January calls...

I'll let Jeff comment on the P&F buy signal on FSLR. My quick and dirty review on FSLR says the rally is nearing the end of its run but could make it a little higher (260-270). It's in a rising wedge with overlapping price action now and negative divergences. When it breaks down it should retrace to about 180 quickly: Link

For ICE I see two possibilities here: one, short against its November high (184.53) as it could have completed a 5-wave move at that high and now needs to correct the rally from August; two, the pullback to the November low could have ended the 4th wave correction and now the rally since then is the 5th wave. In that case it projects to 188.80 for a high. Any higher than that and I'd be worried about short positions (such as short calls). But the negative divergences on this one also warn to be careful if long the stock. Link

For both of these stocks I'd now have my stop pulled up tight if you're long either one of them.

Jeff Bailey : 12/13/2007 2:42:59 PM

DJ- Oil Futures: Nymex Crude Ends Down $2.05 At $92.34 On Dollar Gains

Linda Piazza : 12/13/2007 2:37:58 PM

Speaking of the TRAN, it has now closed a 15-minute period above its 45-ema on that 15-minute chart, setting a potential upside target of 4777. The lip of a bullish saucer shape is sometimes difficult to pinpoint, but this one looks to be at about 4757.31, if we're going to err on the conservative side, so the TRAN is right there as I type, at 4753, just off the new 4760.47 high of the day. Bulls want to see it surge up through this, or, if it pulls back, to pull back only into a handle shape, converting the bowl or saucer into a cup-and-handle formation.

And now that I've said all that, I'm going to say something else. Don't trust any of this today. Markets have been too volatile lately, too unpredictable, to hang your positions or too much of your money on a short-term development. Stay wary and require the very best setups before you enter any play. Better to pass up a play that turns out to be great than to enter and get caught in one of those tornadoes that have whirled through the markets so often this week.

Linda Piazza : 12/13/2007 2:30:07 PM

Here's a great question from a reader and one that points out something I need to clarify: "How do you play transport on short side, no option chain on $djt."

I don't trade the TRAN. I mention it often, but that's because I use it as a kind of indicator, as it often leads the SPX, OEX and Dow. I mention this use of the TRAN's chart from time to time, but because of this subscriber's excellent question, I realize I need to mention it more often. I use the TRAN's actions exactly as I would MACD, the advdec line or any other oscillator and/or indicator I use to help me measure the market action.

Also, perhaps my comments weren't as clear as I intended them today. Earlier, the TRAN wasn't giving a clear indication of where it would go next (11:17:29 and 12:27:43 posts, for example), but beginning a while ago, the TRAN begin producing signs that it was perhaps rounding up in a bowl or saucer shape (1:42:40 post), a possible bullish shape, if it confirms and the TRAN can keep sustaining that confirmation. As I type, the TRAN is at the 61.8% retracement of its drop off its early October high, so it's testing potential resistance, with further resistance up near 4825, so final direction is far from clear. A rollover through the 4719-4737 support zone and a rally up to the 4825 zone look about equally likely from here.

Keene Little : 12/13/2007 2:22:33 PM

The DOW and SPX both just tagged the levels for two equal legs up off this morning's low, and pushing higher as I type. We could see a rally at least test yesterday's late afternoon high.

Jeff Bailey : 12/13/2007 2:19:25 PM

Swing trade sell covered put alert! ... Let's sell one (1) of the Companhia Vale Do Rio Doce RIO Dec. $32.50 Puts (RIO-XZ) at the bid of $0.80.

Covered against the long RIO-MG.

RIO $33.24 -5.12% ... VIX.X 23.38 +4.04%

Linda Piazza : 12/13/2007 2:15:52 PM

Here's the TRAN at 4743.90, having just punched up to 4750.12, just above yesterday's late day last swing higher on the 15-minute chart. Short-term bulls want to see it produce a 15-minute close above 4746.50 and they don't want to see it fall back and begin producing 15-minute closes beneath the 9-ema on that chart, now at 4727.87.

Keene Little : 12/13/2007 2:05:43 PM

A break of the trend line along today's lows would be a sell signal. Until that happens there continues the possibility that we'll just chop our way a little higher. Today is bearish price action as it's consolidating near the lows so waiting for the break is a conservative entry method (just tougher to know where a good stop level should be--pivots, trend lines, moving averages, etc.).

Keene Little : 12/13/2007 1:52:07 PM

I am concerned that they're going to push this back up higher for a larger 3-wave bounce off this morning's low. Two equal legs up in that kind of move would take the DOW and SPX back up to 13448 and 1479.29, resp. I've lowered my stop to just above the last bounce high--I'd rather be stopped out and miss a trade than let it go against me, especially if we're just going to chop around for the rest of the day. There will be another entry opportunity.

Keene Little : 12/13/2007 1:47:55 PM

Neither side can get any traction here. Wake me when we get there (wherever there is). Hopefully DOW 13K by the close since I'm short (wink).

Keene Little : 12/13/2007 1:44:11 PM

I made a comment earlier that might have confused some of you. I had mentioned that the "pre-opex Thursday" is often a head fake day. The Thursday prior to opex week (today) is the day I'm referring to and we've seen countless times before a big move on this day (sometime into Friday and even Monday) get reversed into opex week.

It seems big players fade the big move and pick up some cheap front-month (December) options and make some big money on the reversal. I don't know if we'll see that set up again for this month but it's something to be aware of.

Linda Piazza : 12/13/2007 1:42:40 PM

Don't look now, but the TRAN is testing its last swing high from yesterday, with that last swing high at 4744.71 and with the TRAN having risen a few minutes ago to 4736.67. It's at 4721.34 as I type, falling back but still within "testing" region. A sustained move above yesterday's last swing high, if that includes a 15-minute close above the 45-ema, now at 4747.15, would set a tentative short-term upside target of 4779.04, rounding the TRAN up into a bowl or saucer shape, a bullish recovery pattern. It hasn't happened yet, and I'd be cautious about trusting any upside or downside targets today, but keep an eye on the TRAN if you're trading the SPX, OEX or Dow (or SPY or DIA, for that matter).

Linda Piazza : 12/13/2007 1:30:16 PM

This is not the typical Thursday before opex that we've come to know and love and/or hate, depending on one's trading style and ability. This Thursday has been known for its contrarian ways, often producing a move that was reversed into opex week, as Keene noted in his Wrap last night. (By the way, Keene offers lots of great information on money supply in his Wraps, if you haven't read them.) Maybe this Thursday before opex is being contrarian in a different way, offering no volatility, predicting a reversal to big volatility. That's just sarcasm, not a prediction.

I'm watching the SOX, violating the bear flag in which it's been climbing off the November low. It needs to bounce back to/above its 10-sma, now at 422, by the close to avert a daily close beneath that bear flag and a vulnerability to a retest of its November low. The SOX is at 417.98 as I type.

Jeff Bailey : 12/13/2007 1:27:55 PM

Callibration for YM looks to be +84 from ym07z to ym08h roll.

Keene Little : 12/13/2007 1:16:36 PM

The DOW has jumped back up to the top of its sideways triangle pattern (as long as it doesn't morph into a larger pattern) and therefore is setting up the short play out of the triangle. These are reliable patterns to trade and one of my favorites.

Jeff Bailey : 12/13/2007 12:52:46 PM

Dendreon (DNDN) $7.25 +28.01% ... gets some action.

Keene Little : 12/13/2007 12:51:23 PM

If the triangle pattern is the correct interpretation it should only need one more bounce to a lower high and then break lower. This is a continuation pattern. The only question is whether the top of the pattern is drawn correctly or if we'll instead get a higher high than this morning's (but stay below yesterday's) and then turn back down.

Linda Piazza : 12/13/2007 12:47:45 PM

Earlier today, I listed the SPX downside target set by the nested Keltner channels that I watch. I wanted to mention that the analogous downside target for the RUT is 751.21, with the RUT at 759.34 as I type. Remember that these Keltner targets are potential targets only, and that potential support on daily closes coexists at these levels. That means that, if the RUT should drop to and perhaps even through that level, it's still possible that it could bounce by the end of the day on which the target is hit, showing that support held even if it was pierced. Basically, this is a good tool to show would-be bulls about the vulnerability of the RUT to further declines and to show bears that they should have good profit-protecting plans in place if that level should be hit. It's not a guarantee of anything, especially in this market, but one of the things that I like most about Keltner channels is their ability to set targets.

Keene Little : 12/13/2007 12:45:10 PM

The DOW has now dropped to its uptrend line from yesterday afernoon, the bottom of a potential sideways triangle pattern at 13375. Link

Jane Fox : 12/13/2007 12:35:33 PM

I just had to check that my charts were not frozen because the YM has come to a virtual standstill.

Jane Fox : 12/13/2007 12:32:20 PM

Will the S&P revisit 1460 before it bounces? Will it bounce at all? Does this retracement end at yesterday's lows? Today's action is not giving me any clues to these answers unfortunately. Link

Linda Piazza : 12/13/2007 12:27:43 PM

The TRAN is now producing 15-minute closes at the former resistance, converting it to support, but it's not moving up any more than it moved down when it was producing those closes at or below the breakout level, now at about 4707. The TRAN just moves sideways in a tight range. It's still not offering anything in the way of a prediction of next direction for the SPX, OEX and Dow.

The USDJPY is also moving mostly sideways. There's a little roughly formed head-and-shoulders at the top of its 15-minute chart that I'm watching. The neckline is descending, currently at about 112.05 with the USDJPY current at 112.12. It needs to confirm that H&S relatively soon, within the next 30-45 minutes, or the formation will be invalidated.

Keene Little : 12/13/2007 12:20:18 PM

It seems unusually quiet for a pre-opex Thursday. Both sides seem to be a bit shell shocked at the moment and not sure what to expect next. But the bounce is so far looking corrective so I don't trust the upside. The flip side is that we could see a sudden burst of buying break out the top of the little bear flags that have been building. I could be tempted to buy that kind of breakout. But until then I'm more comfortable being on the short side here.

Jeff Bailey : 12/13/2007 12:09:17 PM

US Dollar Index (DXY) 76.65 +0.66% (30-minute delayed) ... was trading 76.05 at 03:00 AM EST.

Jeff Bailey : 12/13/2007 12:07:51 PM

Swiss National Bank Leaves Rates Unchanged (03:00 AM EST) ...

Jeff Bailey : 12/13/2007 12:03:19 PM

Internet browser company Opera on Thursday said it has filed a complaint with the European Commission, alleging that Microsoft (MSFT) $35.29 +2.37% has abused its market position by tying its Internet Explorer browser software to the Windows operating system and by hindering interoperability. Opera Software, of Oslo, has asked the commission to require Microsoft to unbundle its Web browser or pre-install alternative browsers.

Jeff Bailey : 12/13/2007 12:01:53 PM

General Cable (BGC) $74.57 -1.59% ...

Jeff Bailey : 12/13/2007 12:01:17 PM

Duke Energy Corp. (DUK) $20.58 +0.73% ... Agreed to purchase 100 of General Electric's (GE) $37.13 -0.32% wind turbines, which can generate up to 150 megawatts, to expand its renewable-energy fleet. Terms weren't disclosed.

Keene Little : 12/13/2007 11:59:21 AM

SPX is now testing its downtrend line as the DOW moves marginally above its line. No real buying enthusiasm here.

Jeff Bailey : 12/13/2007 11:59:17 AM

Dow Chemical Co.,(DOW) $44.85 +7.40% ... Chemicals giant, will join with Petrochemical Industries Co. of Kuwait in a 50-50 petrochemicals venture. In a statement on Thursday, the companies said the $11 billion U.S.-based venture will employ 5,000 people to produce polyethylene and other materials. Terms call for Dow to sell to the Kuwaiti firm a half-interest in five Dow businesses that will make up the venture. Dow will receive $9.5 billion pre-tax from PCI for the 50% stake.

Jeff Bailey : 12/13/2007 11:51:52 AM

Coeur D' Alene Mines (CDE) $4.29 -3.59% ...

Jeff Bailey : 12/13/2007 11:50:39 AM

iShares Silver (SLV) $139.67 -3.99% ... (~$13.96 spot)

Jeff Bailey : 12/13/2007 11:49:53 AM

AMEX:GLD $78.68 -2.24% ... (~$786.80 spot)

Keene Little : 12/13/2007 11:49:18 AM

The DOW has made a small 3-wave bounce off this morning's low with two equal legsup. It's back up to resistance at its downtrend line at 13412. Short this bounce with a relatively tight stop (20-30 points max) since it's a test of resistance and you want out of the way if resistance breaks.

Jeff Bailey : 12/13/2007 11:48:06 AM

QCharts users ... StreetTracks Gold intra-day symbol is AMEX:GLD . QCharts has been experiencing some problems with ETF symbols between NYSE and AMEX.

Jane Fox : 12/13/2007 11:40:59 AM

Gold is reacting to the rally in the US$. Link

Jane Fox : 12/13/2007 11:39:50 AM

I have been talking about the US$ making a bottom for a while now and it is certainly looking like it indeed has made a bottom. A close above resistance at 76.84 and I will get out of my long GLD position. Link

Keene Little : 12/13/2007 11:33:35 AM

Could someone give AAPL a little nudge so it falls down the stairs? It's holding onto its uptrend line from Nov 12th by its finger nails here. Just lift one little index finger...

Linda Piazza : 12/13/2007 11:17:29 AM

What prediction does the TRAN offer as to the outcome of the SPX's test of yesterday's low? None. Since creating a slightly lower low, the TRAN has moved absolutely sideways. It's got Keltner resistance at about 4710 on 15-minute closes, and it's closing 15-minute period after 15-minute period at or below that resistance, but not falling further. It's possible to say that consolidation near the low after a fall is bearish, as it used to be bullish when we would see consolidation near the high after a rally, but I'm not ready to conclude that yet. This market is far too unpredictable to make such predictions. All that can be said is that the TRAN isn't giving us much of a heads-up yet, but that it's slightly bearish that while RSI is rising off its low, the TRAN is just going sideways.

Keene Little : 12/13/2007 11:08:09 AM

So far we only have a 3-wave pullback from yesterday's afternoon's high near the close. A successfull retest of yesterday's lows for the DOW and SPX could produce a strong rally leg so stay aware of that possibility.

Linda Piazza : 12/13/2007 11:04:33 AM

I mentioned yesterday shortly before the close that the SPX's daily nested Keltner chart showed that a downside target had been set, with that target today at 1457.48. I mentioned where the close would have to be yesterday to erase that downside target, and the SPX very nearly hit it in the late-day bounce, but the target (and potential support on daily closes) was barely maintained. It's still in place today. Markets have been so unpredictable that very little can be trusted, including targets set on daily charts, so this post isn't meant to promise would-be bears that the SPX is about to drop to the 1457-1458 zone. What it's meant to do is to warn would-be bulls that there's vulnerability to a test of that zone, so that they're ready to assess whether they want to enter now, with that vulnerability remaining, or wait. This is also to warn long-term bears that they need to have profit-protecting plans in place in advance if that zone should be tested.

How am I using the information? I'm out of the bull put portions of my January condors. (I closed all December condors and/or spreads long ago, locking in a profit, albeit a smaller one.) I used the pre-FOMC madness to close out the JAN bull put portions. At the time, I was thinking that I would use any post-FOMC sharp decline to enter new bull put positions, if they were offered. This target, however, tells me that I probably don't want to consider those new positions yet, because I'm already scared of the downside in this environment. So, I'll wait and watch. Perhaps even if the 1457 zone is hit, enough time will have gone by that I won't find a bull put spread that's comfortable for me (my previous SPX JAN bull put spreads were at 1185/1175, so you can see how cautious I'm feeling about the downside), but that's life. I'm not really taking many chances to the downside right now, because I personally find it much easier to adjust a bear call spread in a going-wild-to-the-upside move than a bull put spread in a cascading-lower-and-the-SPX-desk-is-swamped downside move. That's just me.

Keene Little : 12/13/2007 11:01:38 AM

The downtrend lines from Tuesday's highs held back the morning's bounces in the DOW so those bounce highs make for a good place to lower your stop if you're short and chasing this lower.

Jeff Bailey : 12/13/2007 11:00:28 AM

Software HOLDRs (SWH) $43.90 +0.64% ...

Jeff Bailey : 12/13/2007 10:59:55 AM

ADC Telecommunications Inc. (ADCT) $18.61 +11.17% ... Swung to a fiscal fourth-quarter net loss of $6 million, or 5 cents a share, from a profit of $40.1 million, or 33 cents a share, a year earlier, due largely to a $29.4 million impairment on its investment portfolio. The communications company's net sales increased to $329.6 million in the period ended Oct. 31 from $307.3 million in the year-ago period. ADC forecast first-quarter 2008 sales to fall 3% to 7% from the fourth quarter, but expects second-quarter sales to be sequentially higher.

Keene Little : 12/13/2007 10:57:33 AM

The semiconductor stocks are underperforming today and they could lead the way for techs which could lead the way down for the broader market (along with the banks). SMH had bounced back up to its broken neckline of its H&S pattern and has since dropped back below its long term uptrend line from October 2002. If it follows through to the downside now it has a downside objective near 28 (and a Fib projection for wave-5 = wave-1 at 27.67). That would be about a 15% decline from its present 33. Put play anyone? Stop would be just above 34. Link

Linda Piazza : 12/13/2007 10:51:21 AM

The Fed has so far announced three repos today. They total $20.750 billion, measured against $15.750 billion that were maturing today. That's a new infusion of $5.000 billion for today.

That brings the total sloshing through the system up to $52.750 billion. I note that $188.660 billion were submitted to the Fed, with only $20.750 billion accepted. A look back through to early November shows the $188.660 billion submitted the largest since November 1, when $262.600 billion was submitted.

November 1 was the last little swing high before the steep decline into November's low, so that heightened my curiosity. What was being submitted near October 11, for example, with that producing the October high? Yep. $238.950 billion was submitted that day, $35.500 billion accepted. As I scanned down the list, I noted another big submission on 10/18, so I went to the chart again. October 18 wasn't a swing high, but rather a consolidation day, a day that was followed by a nearly 40-point drop in the SPX the next day. Hmm.

However, the 10/25 result blows the whole theory that big-submission days might be preceding big down days on the markets. On 10/25, $195.500 billion was submittted, $31.000 billion accepted. The next day began the rise into the November 1 swing high.

Jeff Bailey : 12/13/2007 10:51:08 AM

Day trade short alert! ... for 1/2 position in shares of Coeur D' Alene Mines (CDE) at the bid of $4.39. Stop goes $4.46, target $4.24.

Jeff Bailey : 12/13/2007 10:43:23 AM

Savient Pharmaceuticals Inc. (SVNT) $17.78 +22.95% ... Said that statistically significant positive results were generated in the Puricase Phase III program in gout patients whose treatments had failed. Puricase 8mg administered by a two-hour intravenous infusion every two weeks or every four weeks met the primary efficacy endpoint. Based on the results, the company plans to file a biologics license application with the U.S. Food and Drug Administration in 2008.

Jeff Bailey : 12/13/2007 10:42:03 AM

United Technologies Corp. (UTX) $77.56 +1.00% ... Sikorsky Aircraft Corp. unit and the U.S. government signed a $7.4 billion, five-year production deal for 263 aircraft, spares and kits, which has a potential total value of $11.6 billion..

Jeff Bailey : 12/13/2007 10:40:12 AM

Washington Mutual (WM) $14.90 -7.22% ... Was downgraded to sell from neutral and its price target cut to $13 from $24 at Banc of America Securities. "We see market confidence in earnings progression deteriorating as industry origination is falling and credit concerns mount. Industry valuation should continue trending towards cyclical lows. Recent company announcements, increased credit deterioration, and lower dividends have shaken our confidence in the stock," the broker said.

Jeff Bailey : 12/13/2007 10:38:25 AM

Merck & Co. (MRK) $59.04 -1.14% ... Recalling about one million doses of Hib vaccine because of sterilization problems in the plant where it is made, The Wall Street Journal reported in its online edition late Wednesday. Hib is a childhood vaccine meant to protect against meningitis, pneumonia and other serious illnesses. The Journal reported Centers for Disease Control and Prevention Director Julie Gerberding said the recall affects certain lots of Hib vaccine shipped after April 2007, but children who received the affected vaccine are not at risk.

Jeff Bailey : 12/13/2007 10:36:49 AM

Honeywell (HON) $59.79 +3.55% ... Expects 2008 sales of $36.1 billion to $36.7 billion and earnings of $3.65-$3.80 a share. Analysts surveyed by Thomson financial forecast earnings of $3.67 a share and revenue of $36.35 billion, on average. "While there is greater uncertainty in the outlook for the global economy in 2008, we're confident in our ability to deliver another great year," the company said. "Our businesses are well positioned globally and we expect that favorable macro trends will continue."

Jeff Bailey : 12/13/2007 10:34:27 AM

Chesapeak Energy (CHK) $38.82 +0.67% ...

Jeff Bailey : 12/13/2007 10:33:14 AM

Permian Basin Trust (PBT) $15.53 +0.25% ...

Jeff Bailey : 12/13/2007 10:32:48 AM

EIA Weekly Nat. Gas Storage Table at this Link ... Draw of 146 Bcf

Jeff Bailey : 12/13/2007 10:29:03 AM

US Dollar Index (DXY) 76.42 +0.37% (30-min delayed) ... testing its doji close of 12/05/07. Hasn't been able to close above this level so far this month.

Jeff Bailey : 12/13/2007 10:26:41 AM

Gold, Silver Futures Tumble After Strong Retail Sales, PPI

Jeff Bailey : 12/13/2007 10:25:08 AM

Lehman Mortgage Losses Spread In Q4 To CMBS And Europe

Jeff Bailey : 12/13/2007 10:24:31 AM

Lehman Gained $640M From Loan Sales And Liability Declines

Jeff Bailey : 12/13/2007 10:23:59 AM

Lehman Shaved $3.5B Mortgage Losses With $2B Hedge Gains

Linda Piazza : 12/13/2007 10:20:36 AM

The TRAN did drop to a new low, but is above that new low currently. However, the drop to a new low so far continues the downtrend.

The SPX continues to produce 15-minute closes below the 9-ema, with that now at 1480.56, and with the SPX at 1479.72, rising toward it. The SPX appears to be forming a triangle shape at the bottom of its decline, but I'm not sure how trustworthy it might be as a predictor of next action.

Jeff Bailey : 12/13/2007 10:19:50 AM

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

Keene Little : 12/13/2007 10:17:02 AM

The bulls can still save this. So far we've got just a pullback against yesterday afternoon's jam job, er I mean rally. I don't suggest being long until the downtrend lines can be broken. Let the market prove it's got some follow through to these quick jabs back to the upside. In the meantime the trend is down and that means short these bounces.

Jeff Bailey : 12/13/2007 10:07:58 AM

US October Business Inventories +0.1%; Expected +0.3% ... Table at this Link

Keene Little : 12/13/2007 10:07:34 AM

The banks (BIX) continue to drop--back below yesterday's low. All the Fed's and Paulson's efforts have been designed to help the banks and so far it's not helping. Continue to follow the money and keep your eye on the banks.

Linda Piazza : 12/13/2007 10:02:47 AM

The TRAN has performed relatively well as a leading index over the last few days, as well as anything else. So far, it's dropped to a 4769.35 low, nearly matching yesterday's 4769.20 low. It might be good to watch whether it drops lower, to a new low (short-term bearish) or climbs above its last late-day peak at 4744.71 (short-term bullish). It's at 4682.46 as I type.

Linda Piazza : 12/13/2007 9:58:17 AM

The SPX's 15-minute 9-ema is now at 1481.46. Although it's been pierced intra-15-minute periods, it's held so far this morning as resistance on 15-minute closes. It can be watched as an early benchmark of weakness/strength, but please remain aware how volatile this market is lately. Benchmarks more important that a 15-minute 9-ema have been crossed and recrossed willy-nilly recently.

Linda Piazza : 12/13/2007 9:56:00 AM

After approaching yesterday's high, the USDJPY is now pulling back some, to 112.16, but it's not pulling back significantly yet. Bears would like to see a deeper and steeper decline to corroborate U.S. equity weakness.

Jeff Bailey : 12/13/2007 9:53:35 AM

Fed Accepts $4.75 Billion In Overnight RPs

Keene Little : 12/13/2007 9:52:16 AM

We got the usual head fake move out of the gate and now the reversal. More often than not you can fade the initial move and get a nice trade out of it. The hard part of course is knowing where to step in and fade it.

Keene Little : 12/13/2007 9:47:36 AM

I just noticed the YM label on the 2nd pivot table still says YM07Z but instead should be YM08H.

Keene Little : 12/13/2007 9:44:57 AM

New pivot tables for the March 08 contracts: Link and Link

Keene Little : 12/13/2007 9:41:19 AM

Nice save by the bulls so far. The DOW has nearly made it back up to test its new downtrend line from Tuesday, currently at yesterday's high.

Jane Fox : 12/13/2007 9:36:52 AM

VIX is making new daily highs as the S$P futures make new daily highs so the VIX is not supporting the bearish AD line but don't expect a lot of follow through on this bullishness.

Linda Piazza : 12/13/2007 9:36:01 AM

The SPX is testing potential Keltner support at 1479.30 on 15-minute closes. This is the breakdown level. The SPX broke through the breakdown benchmark yesterday afternoon (then a little higher) and bounced back. Now this constitutes a retest to see if it holds as support. Short-term bears need to know where their stops should be to protect profit and then adhere to them, just in case. We could see whipsaws again today, but if a big bounce erases your bearish gains, you can't count on prices returning and giving you a second chance if you've ignored the first one to protect profits.

Jane Fox : 12/13/2007 9:35:27 AM

AD line is a bearish -1417

Linda Piazza : 12/13/2007 9:33:06 AM

U.S. equity bears should note that the USDJPY is climbing, not dropping, this morning. Although in these uncertain periods when intermarket relationships might be shifting, we can't count on those relationships remaining static, but a climb in the USDJPY is usually supportive of higher equity prices, not lower ones. Keep this on your radar screen. One reaction or the other (equity vs. USDJPY) might be wrong this morning, with no telling which will switch.

Jane Fox : 12/13/2007 9:29:10 AM

And so is the US$ and it is these two markets that are pulling the gold sideways. Link

Jane Fox : 12/13/2007 9:28:09 AM

Crude is strong. Link

Jane Fox : 12/13/2007 9:27:02 AM

Gold just does not know what to do. It is pulled up by the rally in Crude but down by the stronger US$. Link

Keene Little : 12/13/2007 9:22:41 AM

Even after the jump up in equity futures on the 8:30 reports we're going to have a big gap down today. I'm going to have to figure out how to get by on one hour of sleep and trade during the overnight hours as well. These big gap openings make it very difficult to get into new plays. One of these mornings we're going to see a flat opening and wonder what happened.

Yesterday's lows are important--take those out and the fat lady will be singing (ER has already done that but is currently back above). So any follow through to the downside could be very bearish (3rd of a 3rd wave down). But watch for potential support at the overnight lows and then yesterday's lows. To the upside of course we'll have gap closures as possible resistance.

Jane Fox : 12/13/2007 9:17:22 AM

One day every three months the overnight charts mean nothing because of the rollover but here they are anyway. Link

Jane Fox : 12/13/2007 9:11:30 AM

Today is rollover Thursday so December is now the back month and March (H) 08 the front month. I swtich first thing in the morning but I know many will wait for the front month volume to overtake the back month. With the Russell futures that usually takes no more than 30 minutes into the cash open but with the Dow futures it typically will take about an hour.

Jane Fox : 12/13/2007 9:07:03 AM

WASHINGTON (MarketWatch) -- Seasonally adjusted initial jobless claims fell 7,000 to 333,000 in the week ended Dec. 8, the government reported Thursday.

Wall Street analysts were looking for initial claims of 335,000. Economists watch claims closely because an increase is a leading indicator of a slowdown.

Some observers have been concerned about an upward trend in claims. Initial claims were at 312,000 during the same period in the prior year.

The four-week moving average for initial jobless claims fell 2,000 to 338,750, according to the Labor Department. Analysts say the four-week average is a better indicator of the labor market because it smoothes out one-time events such as holidays or strikes.

Jane Fox : 12/13/2007 9:06:14 AM

WASHINGTON (MarketWatch) -- U.S. retail sales rose sharply in November, pushed higher by rising gasoline prices, the Commerce Department reported Thursday.

The early Thanksgiving holiday, which allowed for more Christmas shopping, may have played a role in the strong showing.

Auto sales were the only area of weakness in November.

Retail sales rose 1.2% in November after rising 0.2% in October. This is the strongest sales pace since May. Retail sales are up 6.3% in the past 12 months.

Gasoline station sales rose 6.8% in November, the largest gain since September 2005. Excluding gasoline, retail sales rose 0.6%

Jane Fox : 12/13/2007 9:04:42 AM

WASHINGTON (MarketWatch) -- Wholesale prices rose 3.2% in November, the largest change since August 1973, as the change in energy goods prices hit a new record high, the Labor Department reported Thursday.

Wholesale energy prices rose 14.1% in November, beating the prior record change of 13.4% in January 1990. Gasoline price growth also hit a new record -- reaching 34.8% -- up from the prior record of 28.8% in April 1999.

Meanwhile, the core producer price index, which excludes food and energy costs, rose 0.4%.

Economists had expected November's producer price index to grow 1.8% and for the core to grow 0.2%.

In October, the PPI had grown 0.1%, while core prices had no growth.

Stephen Gallagher, U.S. economist for Societe Generale, has previously said that October's results were "very tame," and that there would be a "a major reversal" in November.

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