Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Jeff Bailey : 12/15/2007 12:18:05 AM

Last 2 and upcoming WEEKLY Pivot Matrix at this Link

Jeff Bailey : 12/14/2007 10:42:12 PM

Slaries of World Leaders Link

Jeff Bailey : 12/14/2007 10:35:08 PM

Closing U.S. Market Watch at this Link

OI Technical Staff : 12/14/2007 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The Market Monitor has been archived.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 : 12/14/2007 5:21:39 PM

Excellent, excellent analysis on CNBC. Technicals lead the fundamentals. As if the MARKET is all knowing.

Jeff Bailey : 12/14/2007 5:03:25 PM

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

Jeff Bailey : 12/14/2007 4:44:38 PM

Anemic volume at the NASDAQ ...

Jeff Bailey : 12/14/2007 4:36:10 PM

Swing trade call cancel order alert! ... Please cancel the current open order to buy one (1) of the QQQQ Jan $50 Calls (QQQ-AX) for $2.10.

Will gather internals data, derive next week's pivot levels and look at updated OI options.

Jeff Bailey : 12/14/2007 4:28:00 PM

Still waters are starting to run deep! SWC $9.10 -9.54% ...

Jeff Bailey : 12/14/2007 4:21:49 PM

RIO $32.90 -2.05% ... will get two (2) calendar days of premium erosion.

Jeff Bailey : 12/14/2007 4:19:25 PM

PBT $16.05 ...

Jeff Bailey : 12/14/2007 4:18:35 PM

Dang ... that last 10-minutes in CDE a hair puller. Offers looked to vanish above $4.27 and I thought morning low was firm buyer. Could'a used $4.22.

Jeff Bailey : 12/14/2007 4:08:33 PM

SEC Disclosure: While I use the FIFO (First In/ First Out) method of accounting for my Market Monitor Profiles, for simplicity sake and lack of confusion to subscribers, I'm going to account for today's CDE day trade short by itself (LIFO = Last In/ First Out).

Jeff Bailey : 12/14/2007 4:04:24 PM

Penalty bid on CDE $4.19

Linda Piazza : 12/14/2007 4:03:44 PM

The SPX has dipped fairly close to its downside target, now at 1466.94.

Have a great weekend, everyone. It's been tough for many market participants. Perhaps you joined others in losing money, never a fun thing to have happen, but a necessary thing if we're going to be traders. If you lost more than you could afford to use, stop chastising yourself and instead step back and learn from the experience. It's a good thing to feel guilty enough that you're prodded into making changes, but not a good thing to feel guilty enough that you label yourself and your trading. You're not a bad person if you lost money. You may or may not be a bad trader. What you were was a person who got caught in a whirlwind this week, and perhaps you'll decide you want to avoid trading in the future around FOMC meetings, and your future trading will benefit.

Okay, I'm not a trading coach, so I'll stop.

Jeff Bailey : 12/14/2007 4:03:03 PM

QQQ-AX have traded a low/high so far today of $2.24/$2.68

Keene Little : 12/14/2007 4:02:52 PM

I've got to run off to a meeting. I'll post a couple more updated charts this afternoon if I can (certainly Sunday night). Hope everyone has a great weekend.

Keene Little : 12/14/2007 3:58:13 PM

For the weekend it's decision time on your short (or long) position. The pattern still supports the possibility that we're going to see a rally leg up to about SPX 1500 (or higher). Or we could see the bulls crash and burn on Monday. Either scenario is possible from here so make your decision before you run out of time (hint: if you're short it's always best to take some profits off the table, always, since more often than not you'll be glad you did--better to miss a trade than to lose on one). Link

Jeff Bailey : 12/14/2007 3:56:45 PM

HUI.X 387

Jeff Bailey : 12/14/2007 3:55:45 PM

CDE $4.23 .... $4.25 close?

Jeff Bailey : 12/14/2007 3:55:17 PM

RIO $32.86 ... holding the $32.50 strike.

Jeff Bailey : 12/14/2007 3:54:43 PM

CDE $4.22 x $4.23

Jeff Bailey : 12/14/2007 3:54:02 PM

CDE Alert! $4.22

Jeff Bailey : 12/14/2007 3:53:41 PM

CDE at the bid of $4.25

Jeff Bailey : 12/14/2007 3:53:26 PM

CBOE drops to $4.20

Jeff Bailey : 12/14/2007 3:53:16 PM

CDE $4.25 x $4.26

Jeff Bailey : 12/14/2007 3:53:01 PM

CBOE's at $4.21 and MWSE $4.25 now. 9 minutes 8 minutes until close.

Jeff Bailey : 12/14/2007 3:52:09 PM

Day trade short cover alert! for the 1/2 position in Coeur D' Alene Mines (CDE) at the offer of $4.27

Linda Piazza : 12/14/2007 3:51:46 PM

Time to talk again about another Keltner target: the one on the SPX's daily chart. I mentioned it yesterday morning. It's now at 1456.54, with neither yesterday's close nor probably today's erasing that target. I cautioned yesterday that this was not a target for short-term bears to aim for. Rather, it's a warning for would-be bulls that they need to factor in a vulnerability to that level when they're making their trading plans and a warning to long-term bears already in trades that they need to have profit-protecting plans in place if that target should be hit. Keltner targets also serve as potential support and/or resistance lines, so we must consider this potential support if hit, too.

If you erase Keltner lines from the chart, what we're seeing is consolidation over the last few days, consolidation I expected to see after the blows that both bulls and bears suffered this week. Both needed time to recover, to assess their wounds, and figure out what to do next. That Keltner downside target has been set and maintained since Tuesday, but it doesn't mean it will be hit. A daily close above 1487.80 will erase it, and that's a possibility if prices should break to the upside out of this consolidaton zone. So, if you look at the chart without Keltner's, you get consolidation and not much prediction of next direction: with Keltner's, the greatest likelihood looks to be down. I'd have to see a break below Wednesday's low that's sustained before I put too much faith in the Keltner target right now.

Keene Little : 12/14/2007 3:47:34 PM

Looks like the bears were ready for MOC orders and said thank you very much for the jump up in prices and proceeded to spike the ball back to the bulls. Could be an interesting battle in the last 15 minutes.

Linda Piazza : 12/14/2007 3:43:22 PM

The SPX still maintains its potential short-term downside target, now at 1467. Whether or not it will reach it is not yet clear.

Keene Little : 12/14/2007 3:40:04 PM

Now we watch to see if today's downtrend lines hold the buying back or not.

Keene Little : 12/14/2007 3:37:55 PM

Here comes the buying, right on cue.

Keene Little : 12/14/2007 3:27:11 PM

I'm back. Just use a downtrend line now from yesterday afternoon or this morning to trail your stop lower. It's not that I don't trust those with money, but I don't. MOC orders are coming up.

Linda Piazza : 12/14/2007 3:24:14 PM

SPX short-term target and potential support is now at 1466.81 and then 1463.80. Keep on your toes. The TRAN has hit the first target, which suggests that the SPX could, too, but the USDJPY still isn't dropping, so it isn't supporting the idea of more downside. Something has been wacky all day with this typical inter-market relationship, perhaps a sign that it's shifting, at least temporarily. Follow price action, but just keep this non-corroboration in the back of your mind.

Jeff Bailey : 12/14/2007 3:21:08 PM

RIO Alert! $32.50

Keene Little : 12/14/2007 3:11:14 PM

Stepping away for about 15 minutes. Stops are set and I'll let the market decide whether I stay short or not.

Keene Little : 12/14/2007 3:06:31 PM

In case we get the pink wave-c up that I showed on my SPX 60-min chart, and you don't want to tolerate that kind of move against your short position, I'd lower my stop to at least the high near 1:30 PM if not the high just past 2:30 PM. The market has no business being back up there if the more bearish pattern is playing out now.

Linda Piazza : 12/14/2007 3:06:21 PM

Down, down, down goes the RUT, to a new low of the week.

Linda Piazza : 12/14/2007 3:05:24 PM

In my 3:03:04 post, I mentioned a potential short-term target for the SPX. The analogous target for the TRAN is at 4682.42. The TRAN is at 4687.92 as I type, just edging off its day's low. What this is saying is that the TRAN is reaching down toward the Keltner target, presenting the possibility that the SPX will do so, too, since the TRAN tends to lead the SPX, OEX and Dow. It's no guarantee, especially with the USDJPY hanging around near its day's high.

Linda Piazza : 12/14/2007 3:03:04 PM

The SPX just set a short-term (not on the daily chart, which has a lower target) potential target of 1467 and perhaps even 1464.36, with these also potentially offering support on 15-minute closes. Keep wary of these targets, though.

Keene Little : 12/14/2007 3:01:54 PM

The waterfall look to today's decline is starting to take shape. It portends some strong selling in the final hour.

Linda Piazza : 12/14/2007 3:01:49 PM

The SPX is following the TRAN's cue, with support softening and the SPX tipping slowly over. The USDJPY isn't drifting down much, though, so I'm not sure how much credence to give this tipping-over process. I do know that if it tips too far, momentum could gather ahead of the weekend. The bond market closes in a few seconds, and that could change the character of the trading, one way or another.

Keene Little : 12/14/2007 3:00:07 PM

The decline from this morning's high is either very bearish and will lead to some strong selling, possibly into the close, or else it's corrective and will lead to another rally leg to match the 1st leg up from Wednesday (shown in pink): Link

Each of the past two days have seen strong end-of-day buying, possibly from all the money Uncle Ben is dropping from his helicopters. Stay aware of that possibility again today. Again, take nothing for granted here and don't get complacent.

One bearish thing to note is that MACD was never able to get back above zero (same on the 30-min chart). Coming back up to zero to "reset" itself is bearish.

Jeff Bailey : 12/14/2007 3:00:04 PM

DXY 77.46 +1.17% ... looks like it will go out well above its DAILY R2 and WEEKLY R2.

Thinking a "bid pull" on CDE to its DAILY S2 (4.20) toward the close.

Keene Little : 12/14/2007 2:54:52 PM

It's threatening to break down again so we'll probably see a quick buy program again in an attempt to drive the bears back.

Jeff Bailey : 12/14/2007 2:54:06 PM

Disclosure: I currently hold bearish position in CDE.

Jeff Bailey : 12/14/2007 2:53:41 PM

Day trade short alert! for 1/2 position in shares of Coeur D' Alene Mines (CDE) at the bid of $4.32. Stop goes $4.37, target $4.22.

Linda Piazza : 12/14/2007 2:42:29 PM

The USDJPY still consolidates at the top of its climb. It's consolidation there gives the opposite evidence of the TRAN's slow drifting lower. One tends to predict equity strength; the other, weakness. It's been a strange day and the strangeness is typified by what's seen here. These two are usually going the same direction. I keep waiting for all the ducks to line up a single row, and they're not doing it yet.

Linda Piazza : 12/14/2007 2:39:35 PM

The TRAN has just produced a new low of the day. It's downward trajectory today is lazy, consisting of small-bodied candles that kind of drift lower, so that the decline doesn't look pronounced. The TRAN is, however, more than 60 points below yesterday's close. On a Keltner basis, it's barely clinging to support near 4707 on 15-minute closes. If it loses that support, next Keltner support is near 4682, about 25 points below its current 4707 level. The TRAN appears to be swaying on the edge of a small cliff, but not falling over it yet.

To remind readers, I watch the TRAN only as a sort of leading indicator of the next direction of the SPX, OEX and Dow, not as a trading vehicle.

Keene Little : 12/14/2007 2:36:12 PM

If you like trading the currencies, the EUR/USD pair makes for a nice short play, although I'd wait for a bounce that corrects the leg down from Wednesday, especially since it's hitting the bottom of a new down-channel from its high: Link

I would expect a bounce from here, perhaps back up to around the 1.46 area, to be followed by some strong selling in the euro, buying in the US dollar. BTW, gold should follow the path of the euro.

The risk is that the pullback from the November high is only a 3-wave move so far and a rally back above Wednesday's high would leave it that way (hence the key level there for the bulls as it would negate the bearish wave count).

Jeff Bailey : 12/14/2007 2:34:25 PM

QQQQ $51.31 -0.46% ... We'll get new WEEKLY Pivot levels at today's close. Biiig earnings report next week. Link

With BPNDX reversing back lower to "bear confirmed" more bearish below MONTHLY Pivot.

Jeff Bailey : 12/14/2007 2:18:50 PM

Notable volume spikes in SOLF from 01:40-01:50 PM

Keene Little : 12/14/2007 2:17:13 PM

This has the potential to waterfall lower into the close today if the bulls lose this battle. But so far the market is weak but not in trouble.

Keene Little : 12/14/2007 2:14:16 PM

Each time the market threatens to break down along comes a quick buy program to jam it back up. They're really trying hard to keep the bears away and frustrate them into not trying anymore.

Linda Piazza : 12/14/2007 2:12:04 PM

No, SPX 1476-ish support did not hold, at least not for a few moments, but so far, Keltner support near 1475.75 on 15-minute closes may be holding. This is a danger point, as the SPX could tip over too far below that 1476 level and then drop harder than it has so far today. However, it hasn't quite done so yet, and this is one of those days when signals set up and then nothing ever comes of the signal.

Jeff Bailey : 12/14/2007 2:11:47 PM

Either it's technically "cheap," or CDE is "expensive"

Jeff Bailey : 12/14/2007 2:11:05 PM

Apex Silver Mines (SIL) $15.31 -2.67% ... still holding its 08/06/07 relative low.

Linda Piazza : 12/14/2007 2:03:40 PM

Will 1476-ish support hold up again on this test?

Linda Piazza : 12/14/2007 1:58:19 PM

The SOX is breaking down out of that bear flag in which it climbed off the 11/21 low. It's now below yesterday's low, confirming the breakdown out of the flag. Now that I've said that, it will probably turn right around and climb back through the flag again. It's been that kind of day and that kind of week on the markets. The SOX is at 415.45 as I type, and I've been speculating for a couple of weeks in my Wrap that it might need another retest of the November low. A retest could result in a higher low and equal low or a lower low.

Jeff Bailey : 12/14/2007 1:54:47 PM

"bad tick" in AAPL to $200.00

Jeff Bailey : 12/14/2007 1:51:43 PM

$GASO/$WTIC on a 0.40 box Link ... which is probably the best box size I can find to define "the level"

Jeff Bailey : 12/14/2007 1:49:46 PM

Valero Energy (VLO) $66.70 +0.98% ... its 21-day sma at $65.42.

Jeff Bailey : 12/14/2007 1:48:36 PM

See something else? How about the "crack spread" between oil and unleaded.

Jeff Bailey : 12/14/2007 1:47:16 PM

See ... the 20-day% might "makes sense" as it relates to a trader's scenario regarding oil up/down and dollar down/up.

But has something "change" with the 5-day.

Jeff Bailey : 12/14/2007 1:46:01 PM

US Market Watch (01:40 PM) ... noting DXY 5-day% and 20-day% then cl07f 5-day% and 20-day%. Link

Linda Piazza : 12/14/2007 1:45:10 PM

TRAN headed slightly down; USDJPY headed slightly up. No clues here.

Jeff Bailey : 12/14/2007 1:38:30 PM

Evergreen Solar (ESLR) $16.96 +12.24% ... see last night's MM. Today's regular session high when all market participants will vote ... $17.74.

Jeff Bailey : 12/14/2007 1:35:08 PM

One question I've struggled with is if the dollar's weakness was lending to oil's strength, or was/is it oil's strength lending to dollar weakness.

Or ... is EACH independent of the other.

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

Looking at just the move down from this morning's bounce high to the low near 12:30, a 62% retracement of that decline would be DOW 13465. Two equal legs up in the bounce off that 12:30 low would also be at 13465. Therefore if that level gets tagged I'd look to short it. A break to a new low below the 12:30 low now would be a sell signal. If you're already short, stay short against the mid-morning bounce high.

Jeff Bailey : 12/14/2007 1:34:00 PM

CNBC guest ... he think OIL prices are leading the dollar's action.

Linda Piazza : 12/14/2007 1:18:50 PM

I don't see anything definitive that tells me what will happen next. This is the nature of consolidation. By the time the real move gets going, all who have been trying to trade has been chopped out of their positions and are leery of participating. Keltner channels on SPX charts are flattening. RSI on everything from the 15-minute to the daily chart is settling down around the neutral 50-ish level.

I'm looking at the TRAN because it's been a fairly good leading indicator over the course of this week. If I had to label the action on the 15-minute chart and the lineup of support versus resistance, I'd probably have to say that resistance looks a little stronger than support. Therefore, it might look a little easier for the TRAN to decline than to rise, but that's such a subjective judgment on such a small time frame that I wouldn't give it much weight in your trading decisions. The TRAN's slight weakness goes counter to the USDJPY's strength anyway, so you might as well consider them as negating each other as indicators.

Jeff Bailey : 12/14/2007 1:14:49 PM

Slap a MONTHLY retracement on RIO ... MONTHLY R2 $42.69 and MONTHLY S2 $25.85. See that resulting lower 61.8% at $32.28?

Let's see ... $32.50 - the premium sold of $0.80. Get's me $31.70.

Keene Little : 12/14/2007 12:59:45 PM

Trying to scare the bears back into their caves. SPX had made it down to its uptrend line and bounced so there's no clear evidence yet of any kind of breakdown. But the decline off this morning's high looks impulsive and that means we should get another leg down. Therefore look at this bounce as a shorting opportunity. The stop though needs to be above the mid-morning high.

Jeff Bailey : 12/14/2007 12:59:27 PM

Let's see ... RIO's regular session high/low so far this week has been ... $36.77/32.43. If we were to close here at $32.74, next weeks pivot levels would be ...

$29.64, $31.19, Piv= $33.98, $35.53, $38.32

Jeff Bailey : 12/14/2007 12:55:23 PM

Let's see ... unusual action at the RIO $30 puts ... RIO-XF has been $0.15/$0.26.

$30 - $0.15/$0.26 would be $30.15/$30.26.

5.5 days until expiration.

Jeff Bailey : 12/14/2007 12:53:00 PM

M, m, m ... RIO's MONTHLY S1 ... $30.21.

Jeff Bailey : 12/14/2007 12:52:27 PM

RIO's WKLY S2 $32.92 ...

Jeff Bailey : 12/14/2007 12:50:45 PM

Jane! Does your Tradestation have option chains that show UpTick and DnTick volume?

Jeff Bailey : 12/14/2007 12:49:28 PM

CBOE's RIO chain Link

Linda Piazza : 12/14/2007 12:42:24 PM

Strange day. The SPX is now testing/falling beneath 15-minute Keltner support at 1477.32, but, more importantly, it's testing historical support near 1476. There's a rounding-over pattern on the 15-minute chart.

What's going on with the USDJPY? It's down to test its breakout level as well as it's 15-minute 9-ema, but it hasn't yet violated those on a 15-minute close, and it's still well above the 112.60 former resistance zone. It's at 113.31 as I type. Those with bearish equity trades would prefer to see it at least set up a confirmed downtrend after setting up bearish price/RSI divergences. While this may be the beginning of a short-term downtrend for the USDJPY, it's certainly not a confirmed downtrend yet.

Jeff Bailey : 12/14/2007 12:40:01 PM

DJ- India Ready To Jump-Start Long-Range Nuclear Missile Plan - AFP

DJ- Nuclear-armed India said Friday it is ready to jump-start production of long-range nuclear missiles that can hit targets deep in China or Pakistan. V. K. Sarswat, the chief of India's missile development project, said the assembly lines are in place to speed up the production of the precision rockets. Military insiders told AFP the announcement was a response to reports of growing cross-border military intrusions into India by China, which has an unresolved border dispute with its smaller Asian neighbor. The statement came amid reports Friday that India had moved a brigade-sized (6,000-man) army unit to the Bhutan-China border on India's uneasy eastern flank. "India is now capable of delivering missiles much earlier than the earlier period of three to seven years as basic building blocks for production and deployment of long-range missile are now in place," scientist Saraswat said. The comments also coincided with the second test in so many days of the locally made 1,540-pound surface-to-air Akash missile Friday. Saraswat, speaking to reporters in southern Hyderabad city, one of India's largest hubs for strategic research, said nuclear-capable missiles would be built much faster with private sector participation. "We will develop the next levels of missiles in a much shorter time. "The private industry has emerged as a co-developer of the sub-systems of the missiles, which is helping us in cutting down development time," Saraswat added. India's defense industry opened up to the private sector three years ago after state-owned ordnance units failed to deliver. Saraswat's comments came after India's chief military scientist M. Natarajan Wednesday said New Delhi will test a ballistic missile with a top range of 3,800 miles in 2008. "The defense industry, having gone through a reality check, is now kicking up with results, and I'll describe it as a positive sign," a senior defense ministry official, who did not want to be named, told AFP. India has built a range of ballistic and cruise missiles as part of a 1983 project.

Jeff Bailey : 12/14/2007 12:38:34 PM

Columbia's Central Bank Keeps Rates Unchanged at 9.5%

Jeff Bailey : 12/14/2007 12:37:44 PM

RIO Option Montage and my Level II for RIO-XF at this Link

Keene Little : 12/14/2007 12:32:11 PM

After consolidating briefly on top of its uptrend line the DOW just broke it but only marginally so far. Keep an eye on it to see if it acts as resistance on any later retest. It's still in headfake territory here.

Jeff Bailey : 12/14/2007 12:27:31 PM

Jerry! Our partials should be done.

Jeff Bailey : 12/14/2007 12:27:09 PM

Permian Basin Trust (PBT) Alert! $15.82 ... exhausted at the offer of $15.80.

Jeff Bailey : 12/14/2007 12:26:21 PM

My QCharts option montage showing NOTHING traded CBOE, so impossible for me to tell if its buying (uptickvol) or selling (dntickvol) on the RIO-XF.

Jeff Bailey : 12/14/2007 12:23:42 PM

As of last night's close, the RIO Dec $30 Puts (RIO-XF) were #1 OI for December expire (59,641)

Keene Little : 12/14/2007 12:20:37 PM

I must say I've been a little surprised by how slow the trading action has been the past two days. Usually there's a lot more volatility than this as we head into opex week. Maybe the volatility will pick up if the market starts breaking down through support. Of course I may be getting spoiled--if the DOW doesn't move more than 100 points in less than an hour it now seems like a slow market.

Jeff Bailey : 12/14/2007 12:20:00 PM

Unusual Option Activity ... DJ Table Link

Jeff Bailey : 12/14/2007 12:16:01 PM

Better check RIO's option chain/montage at Dec $30 strike.

Jeff Bailey : 12/14/2007 12:13:11 PM

UBS Cuts '07 Earnings Estimates For Brazil, South Africa Stocks (update/story)

DJ- UBS Investment Research has downgraded its estimates for 2007 earnings growth in Brazilian and South African equities, it said Friday on a report to clients.

Brazil's earnings growth estimates for the year have decreased 26%, and South Africa's to 19%. There have been earnings growth upgrades for Malaysia (at 46%), India (39%), among others.

Earnings growth estimates for 2008 have been revised up across most countries and sectors, and now stand at 19% for global emerging market aggregate, UBS said.

"However...we believe that the coming months are likely to see downward adjustments to 2008 earnings estimates," it added. Current 2008 estimates assume increasing margins, "an ambitious assumption in our view," it said.

Jeff Bailey : 12/14/2007 12:02:38 PM

Shares in Brazil's Banco Do Brasil Soar After Share Offer

Jeff Bailey : 12/14/2007 12:01:57 PM

Companhia Vale Do Rio Doce (RIO) $32.99 -1.78% ...

Jeff Bailey : 12/14/2007 12:01:28 PM

UBS Cuts '07 Earnings Estimates For Brazil, South Africa Stocks

Keene Little : 12/14/2007 11:53:25 AM

DOW is back down to its uptrend line, now at 13425.

Keene Little : 12/14/2007 11:50:30 AM

This morning's bounce has been left as another 3-wave bounce (and potentially another smaller degree 2nd wave correction in the coming 3rd of a 3rd wave down). The choppy price action could mean we'll stay stuck in the rising wedge patterns for another day or so but the end result is the same--we'll either head strongly down from here or after another bounce into Monday. Stay bearish this market as there's nothing bullish in the price pattern as I see it.

Linda Piazza : 12/14/2007 11:39:21 AM

Some bearish price/RSI divergences are beginning to show up on the USDJPY's 15-minute chart. What does that mean? It signals only that plans need to be put in place in case the USDJPY declines. For equities, that would mean that the support underneath them, providing by a climbing USDJPY, would be removed. So, think about it, but don't act on bearish divergences alone, particularly when they're occurring in an entity we use as a corroborating or leading one, and not in the security we're trading. This is like one further step removed, as an indication in an indicator, if that makes sense.

Keene Little : 12/14/2007 11:29:34 AM

The top of a similar rising wedge pattern for SPX is at 1490, the "wall".

Keene Little : 12/14/2007 11:27:47 AM

The downtrend lines from Tuesday have held back the DOW and SPX so far. It's going to be a battle of the trend lines--another push higher above 13500 could have the DOW running up to the top of a potential rising wedge pattern, currently near 13540. A break of its uptrend line, now near 13420, would be bearish. So far this bounce pattern looks corrective and doesn't have me interested in thinking about the long side. DOW 10-min chart: Link

Linda Piazza : 12/14/2007 11:20:30 AM

On a short-term basis, strongest nearby resistance for the SPX is at about 1489.80 on 15-minute closes. The 9- and 45-ema's converge between 1482.10-1482.84, and they could be presumed to be the strongest nearby support on 15-minute closes.

Keene Little : 12/14/2007 11:12:28 AM

CME looks like it could tag its Fib projection at 722.52 if it can keep the current rally alive. If it were to rally much higher than 723 I'd feel more bullish about this one but it should be close to finishing the final 5th wave of its rally. A break below 673 is needed now to signal a top is probably in. Link

Jeff Bailey : 12/14/2007 11:11:47 AM

Excellent, excellent analysis, or review of C's action today and Wednesday's central bank news given by CNBC's staff economist.

Jeff Bailey : 12/14/2007 11:08:22 AM

THE WALL STREET JOURNAL ... How Goldman Won Big On Subprime - The subprime-mortgage crisis has been a financial catastrophe for much of Wall Street. At Goldman Sachs, thanks to a tiny group of traders, it has generated one of the biggest windfalls the securities industry has seen in years.

Jeff Bailey : 12/14/2007 11:06:54 AM

2007 MAY BECOME 8TH-WARMEST YEAR IN US

DJ- Preliminary data from U.S. government scientists predict the annual average temperature for 2007 across the contiguous U.S. at near 54.3 degrees Fahrenheit -- making year the eighth-warmest since records were first kept.

Jeff Bailey : 12/14/2007 11:06:08 AM

US RATE FUTURES EXTEND PRICE LOSSES

DJ- Higher-than-expected November inflation readings send U.S. interest rate futures prices lower, as the market reduced expectations for further reductions in the key short-term lending rate.

Jeff Bailey : 12/14/2007 11:05:15 AM

CME Group (CME) $709.60 +1.22% ...

Jeff Bailey : 12/14/2007 11:04:43 AM

ICE FUTURES US OKS FULLY ELECTRONIC TRADE

DJ- Intercontinentalexchange says the board of its ICE Futures U.S. subsidiary has voted to fully transition to electronic trading of futures contracts by March 3.

ICE $190.75 +5.49% ... That's a new 52-weeker.

Jeff Bailey : 12/14/2007 11:03:27 AM

OPEC KEEPS GLOBAL OIL DEMAND GROWTH UNCHANGED

DJ- The Organization of Petroleum Exporting Countries says the global economic outlook for 2008 has significantly 'worsened' but keeps its forecast for oil demand growth next year virtually unchanged.

Jeff Bailey : 12/14/2007 11:03:00 AM

US SENATE PASSES ENERGY BILL; BUSH TO SIGN INTO LAW

DJ- Senators vote to increase automobile gas-mileage standards for the first time since the mid-1970s, amid expectations that the centerpiece of the Democratic energy agenda will become law, even as the party fails to enact broader energy-policy changes.

Jeff Bailey : 12/14/2007 11:02:22 AM

CITI BAILS OUT SIVS, TAKES $49B ONTO BALANCE SHEET

DJ- New York bank announces plans to bail out seven affiliated investment entities, bringing $49 billion in assets onto its balance sheet and further denting its depleted capital base. Yesterday, Moody's downgraded the bank, a move that reflects pressure on capital from write-downs and provisions as earnings are weakening, and COO Robert Druskin said he will leave the firm.

C $31.80 +2.51% ...

Linda Piazza : 12/14/2007 10:56:45 AM

On Wednesday morning, I speculated that I wouldn't be surprised if the SPX were to spend a number of days consolidating, perhaps setting up a triangle formation(9:36:38 am post on 12/12). I said in that post that market participants needed some time to weigh the impact of the FOMC decision and then the rescue plan offered by the Fed the next morning. "If so, we won't see yesterday's high exceeded," I speculated while the prices were still climbing that morning. However, ultimately the prices were to fall below the previous day's low on that day, and I wasn't so sure that the triangle theory was a viable one after all. I'm still not sure about the ultimate shape of the consolidation, but consolidation it has been, even if it's been a choppy and volatile consolidation.

The nature of consolidations is that they flatten moving averages and channels and tend to move oscillators such as the RSI into neutral territory, a little above and a little below 50. For example, as I type, RSI on the SPX's daily chart is now 51.63. Consolidation tends to line daily closes up with important resistance or support. You end up without a whole lot of clues as to ultimate direction. That's what's happening on the daily charts.

Scrolling down to the 15-minute chart, we see the SPX attempting a short-term rally. I've been warning all day that the USDJPY action was not lining up on the side of the bears, and it's still not. It's still climbing and is at 113.31 as I type. Something still feels wacky, but I can't pinpoint anything specific other than that the USDJPY is climbing higher. Either currency traders are wrong, the usual inter-market relationship has changed, or U.S. equity traders are wrong.

Jeff Bailey : 12/14/2007 10:55:24 AM

Remember! Fed "only cut" 25 basis points. Using other tools at its disposal to try and alleviate the credit crunch.

Jeff Bailey : 12/14/2007 10:55:20 AM

We shall see ... the collapse of the dollar that bears were counting on ... we'll get their reaction in the days, weeks, months ahead.

Keene Little : 12/14/2007 10:52:49 AM

I'm guessing that the rally off this morning's gap down must mean the market is happy with the high inflation numbers and a Fed that could be forced to the sidelines (wink). Stagflation anyone?

Keene Little : 12/14/2007 10:50:32 AM

For SPX the numbers line up near 1484.

Keene Little : 12/14/2007 10:50:02 AM

Two equal legs up in this morning's bounce is at DOW 13483 which would be a little more than a 62% retracement at 13478.

Jeff Bailey : 12/14/2007 10:49:46 AM

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

CLOSED out the PBT at target of $15.80.

Adjusted stop/target on the remaining 1/4 position short in CDE ($4.48 / $4.01)

Keene Little : 12/14/2007 10:46:27 AM

NQ has filled its gap and ER is right behind. ES and YM have a little more work to fill theirs.

Linda Piazza : 12/14/2007 10:41:34 AM

All 15-minute closes on the SPX have been below the 9-ema, but you can't say, as you often can when this occurs, that there's a confirmed downtrend. Instead, you can draw a rising trendline until the lows produced today. With the USDJPY still climbing higher, I'm not surprised that equities aren't dropping much since the first push lower. Something is wacky.

Jane Fox : 12/14/2007 10:41:30 AM

Trading so far today has been nothing short of painful and this has been the best time frame for trading so I imagine the rest of the day will be torture and a good day to housecleaning.

Keene Little : 12/14/2007 10:31:49 AM

Another general about to be shot? I just noticed IBM took a spill this morning. After a choppy rise from the November low to a retest of its broken uptrend line from July 2006, and now a clean break back below its 200-dma, this one is a short for much lower (back to its March 1, 2007 low at 88.77 within the next month is my guess). Link

The short term bullish possibility is that it will bounce one more time back up for another test of its broken uptrend line. That would likely require a rally in the broader averages as well.

Keene Little : 12/14/2007 10:20:16 AM

DOW made it up to a 38% retracement of this morning's drop so far. The banks have a little micro bounce going on this morning as well and I continue to watch them. Watching and waiting...

Linda Piazza : 12/14/2007 10:10:00 AM

The USDJPY not confirm its H&S on its 15-minute chart. Instead, it's climbing again. As I've been saying, it's not currently supporting bearish equity trades, at least as the inter-market relationship once existed.

Jane Fox : 12/14/2007 10:04:31 AM

WE have a bullish VIX and a bearish AD line and volume and that equates to choppy markets - again.

Jane Fox : 12/14/2007 10:03:44 AM

S&P futures made a brief new daily high that was supported by the VIX making a new daily low. The VIX retreated but is now headed back down again.

Keene Little : 12/14/2007 9:59:51 AM

It's strangely quiet after a big gap down this morning. Both sides appear to be staring at each other to see who blinks first. Take nothing for granted here.

Linda Piazza : 12/14/2007 9:58:50 AM

I'm still watching the USDJPY. There's the potential for a little head-and-shoulders formation, visible on its 15-minute chart, with a neckline now at about 112.67, so you'd want to see 15-minute closes below that level to confirm the thing. Bears would prefer to see this happen, and then to see the USDJPY fall swiftly. Its overnight action and its current level above 112.60 do not support bearish trades, if the old inter-market relationships still exists, so you'd at least like to see a confirmation of this short-term bearish formation and then a confirmed short-term downtrend.

Of course that old relationship may be shifting, as I've wondered if it might. It might be that a strengthening dollar will become more important than the yen carry trade, or even that the yen carry trade drifts away if those borrowing yen don't think they can get a good return by investing in U.S. equities.

Jeff Bailey : 12/14/2007 9:57:27 AM

US Dollar Index (dxy) 77.18 +0.80% (30-min delayed) ...

Jeff Bailey : 12/14/2007 9:56:38 AM

Swing trade short lower stop alert! ... for the 1/4 position in Coeur D' Alene Mines (CDE) ... to $4.48.

Jane Fox : 12/14/2007 9:50:12 AM

The SPX found resistance at the ubiquitous 1490 yesterday. I guess there are still enough traders out there who are afraid of it and would not let this market break it. (Yesterday's highs was 1489). Link

Keene Little : 12/14/2007 9:50:00 AM

The DOW bounced off its uptrend line from Wednesday's low (which held each pullback yesterday) so that's the line to use right now--short a break of it but watch it for now to see if we at least retrace some portion of this morning's drop.

Linda Piazza : 12/14/2007 9:44:44 AM

Next short-term support for the SPX on the 15-minute chart, if it doesn't bounce back above 1481.05 by the end of this 15-minute period, is at 1473.56 on 15-minute closes. It doesn't look particularly strong, but the volatility this week has completely scrambled these charts. I also note slight historical support just above 1476, being tested now. If the SPX continues lower, further Keltner support is sliding lower, too, and also not particularly strong. I'm just not completely trusting what I'm seeing right now, though, as something is wacky with the relationship of the USDJPY's movement to the U.S. equities' movements.

Keene Little : 12/14/2007 9:42:57 AM

It's obviously speculation on my part to predict how price could play out over the rest of this month but if the bearish wave pattern is correct it's pointing to a lot of downside dead ahead. If you're short the market for a longer term play I would have my stop now at yesterday afternoon's high. Playing with some Fib projections and time sequences I come up with a potential move back down to the August low for SPX (1370) before Christmas: Link

If the market is able to recover this morning's losses then we're back to either the pink or more bullish (green) possibilities.

Jane Fox : 12/14/2007 9:40:07 AM

AD line is a bearish -1905.

Jeff Bailey : 12/14/2007 9:39:46 AM

Swing trade lower bearish target alert! ... for the 1/4 position in Coeur D' Alene Mines (CDE) $4.29 -2.50% ... to $4.01.

Linda Piazza : 12/14/2007 9:39:28 AM

This morning, the action of the equities and that of the USDJPY are contrary, and I'm not sure what to make of the differences. The USDJPY has popped finally above a 50% retracement of the decline off the October high. Either of two scenarios exists: either the inter-market relationship we've seen in the past isn't working today, with the yen carry trade not as important as other factors to our equity performance, or their failure to corroborate each other this morning suggests that one is going to eventually tug the other in the opposite direction it's going. So what should you do? If you're in bearish plays, just be aware that the USDJPY's direction is not currently corroborating your play. The USDJPY is just one of the many indicators I use to watch action, so don't use this as an end-all, be-all barometer, but do recognize that it's signaling some upward pressure right now and that, unless it turns around, not all the ducks are in a row for your trade.

Jeff Bailey : 12/14/2007 9:37:25 AM

Swing trade target/exit alert! for the 1/2 position in the Permian Basin Trust (PBT) $15.80 +1.15% ...

Keene Little : 12/14/2007 9:17:37 AM

I had mentioned at the end of the day yesterday that the wave pattern showed a nice setup for the bears that called for a gap down today that could start a very strong selloff. The bears got their gap down so now we'll see if there will be follow through to the downside. These gap moves continue to make it difficult to enter new trades (or hold onto a trade overnight).

Yesterday's gap down was eventually reversed so nothing is a given in this market, especially with so much promised Fed money coming into the market. But for now the wave pattern continues to favor the downside so I'll keep looking for those trade setups until the pattern changes.

Jane Fox : 12/14/2007 9:12:41 AM

Crude is falling putting further pressure on Gold. Link

Jane Fox : 12/14/2007 9:11:29 AM

I told you the US$ was making a bottom and sure enough it has broken resistance and on it way to at least 79.00. Time for me to bail on my long GLD position (GLD is the Exchange Traded fund I use to trade Gold, it is based on the commodity and not stocks so almost a pure play) Link

Jane Fox : 12/14/2007 9:09:06 AM

Here is the daily chart of the Gold futures and as you can see it is just about to test the lower trendline of the sideways triangle. Of course this market trades almost in a mirror image of the US$ so it is very important to keep your eye on what the $ is doing as well. That chart is up next. Link

Jane Fox : 12/14/2007 9:05:50 AM

The markets did not like the CPI numbers out at 8:30 but so far previous day lows have held. Notice both the Russell (ER2) and NDX (NQ) futures have tagged their respective previous day lows but did not break them. Link

Jane Fox : 12/14/2007 9:00:00 AM

WASHINGTON (MarketWatch) - Consumer prices rose 0.8% in November, led by higher prices for gasoline, the Labor Department reported Friday. This is the fastest pace of consumer inflation in more than two years.

But energy wasn't the entire story. Prices of apparel, drugs, and airline fares also spiked. As a result, core inflation, which excludes food and energy prices, rose 0.3%, the biggest gain since January.

The figures raise concern that inflationary pressures are increasing, and could limit the room for the Federal Reserve to cut interest rates to counter the expected economic slowing over the next few quarters.

The numbers were worse than expected. Economists were forecasting the CPI to rise 0.7% and the core rate to rise 0.2%, according to a survey conducted by MarketWatch.

Market Monitor Archives