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Jeff Bailey : 12/20/2007 12:15:16 AM

Mitsubishi UFJ Financial: Refuses To Pay Into U.S.-Led Subprime Rescue Fund

Jeff Bailey : 12/19/2007 10:40:19 PM

February Heating Oil (ho08g) settled up $0.0875, or +3.49% at $2.5954.

Jeff Bailey : 12/19/2007 10:39:04 PM

February Unleaded (rb08g) settled up $0.0266, or +1.14% at $2.3609.

Jeff Bailey : 12/19/2007 10:37:55 PM

February Crude Oil (cl08g) settled up $1.16, or +1.29% at $91.24.

Jeff Bailey : 12/19/2007 10:35:13 PM

Closing U.S. Market Watch found at this Link

Note: With Crude Oil having rolled to February, I'm "rolling" other energy futures in Market Watch to February contracts.

Keene Little : 12/19/2007 10:03:01 PM

Thursday's pivot tables: Link and Link

As I mentioned in tonight's Market Wrap, today's price action leaves open a few possibilities IF price jumps higher tomorrow. The December 12th lows (December 13th for the RUT) are the key levels to the upside. If prices rally above those levels then we'll have something at least short term bullish playing out and I'll get some idea of what once the rally pattern becomes clearer. But for now, if prices trade inside today's range then there's a good chance we'll see a downside resolution.
DOW: Link
SPX: Link
COMP: Link
RUT: Link

OI Technical Staff : 12/19/2007 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The Market Monitor has been archived.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.

Jane Fox : 12/19/2007 4:22:18 PM

Economic reports for tomorrow include:

8:30a.m. Initial Jobless Claims. Expected: +2K. Previous: -7K.

8:30a.m. 3Q Final GDP. Expected: +5.0%. Previous: +4.9%.

10:00a.m. Nov Conference Board Leading Indicators. Expected: -0.3%. Previous: -0.5%.

10:00p.m. Dec Philadelphia Fed Business Index. Expected: 7.5. Previous: 8.2.

Jeff Bailey : 12/19/2007 4:18:50 PM

I have a client meeting I need to get to. I'll update things further later this evening.

Jeff Bailey : 12/19/2007 4:16:01 PM

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

Keene Little : 12/19/2007 4:11:30 PM

For those who are signing up for another year on your subscription you're probably aware of the special reports that Jim is including. One is from me that's titled "The Elliott Wave Roadmap to Profitability" and is hopefully a good introduction to EW and how I use it to trade. In the report I use AAPL as a stock that was traded this year using the EW pattern and I think it's very instructive. The report stops as of Friday Dec 14th with our short play open. For those of you who get the report it'll be fun to follow this through.

Jeff Bailey : 12/19/2007 4:07:16 PM

Microsoft (MSFT) $34.76 +0.05% ... $34.92 extended.

Jeff Bailey : 12/19/2007 4:06:37 PM

Oracle (ORCL)

Keene Little : 12/19/2007 4:05:23 PM

AAPL looks very similar to the DOW in that it's looking more and more like we're going to see a sideways consolidation before it heads lower. Tomorrow should be another inside day if true. Any rally above 185.77 would negate the bearish wave count and makes a good place to stop out of short plays if you'd like. I'm leaving the stop at 190 for now but may lower it some tomorrow. Link

Jeff Bailey : 12/19/2007 4:04:31 PM

Swing trade call lower target alert! ... for the China Telecom CHA Dec $100 Call (CHA-LT) to $0.25 in the option.

Linda Piazza : 12/19/2007 3:56:18 PM

What do you know. As of now, I'm out of all Jan condors, closing 20 contracts of JAN SPX 1620/1630 bear call spreads and 15 contracts of 1630/1640 bear call spreads (in different accounts) for $0.15 today. Yesterday, I was able to close out my 15 RUT bear call spreads. The bear call spreads were all that were left of the condors, as I had used the pre-FOMC push to close out the bull put spreads. I hadn't filled out all my condors, having more bear call spreads than bull put ones because I've been scared of the downside. Anyway, I'm just letting you know so that you can check your accounts, if you're so inclined, to see if you have the opportunity to close out credit spreads for $0.10-0.15. It's not pressure. There's no right or wrong. There's just more risk averse and less risk averse. You know what side I'm on.

Jeff Bailey : 12/19/2007 3:55:43 PM

Yahoo! (YHOO) $23.31 +1.25% ...

Jeff Bailey : 12/19/2007 3:55:17 PM

Google (GOOG) $677.53 +0.59% ...

Jeff Bailey : 12/19/2007 3:54:55 PM

Microsoft (MSFT) $34.79 +0.14% ...

Jeff Bailey : 12/19/2007 3:54:30 PM

Dept. of Justice Fines Microsoft, Google, Yahoo For Illegal-Gambling Ads

DJ- The U.S. Department of Justice said Google Inc. (GOOG), Microsoft Corp. (MSFT) and Yahoo Inc. (YHOO) had agreed to pay $31.5 million in fines to resolve claims they had promoted illegal gambling. In a statement, the DOJ said it had agreed to the fines with three high-tech giants for "corporate conduct the Government found in violation of the Federal Wire Wager Act, federal wagering excise tax laws, and various states' statutes and municipal laws prohibiting gambling." Microsoft is to pay the largest penalty, with its settlement totaling $21 million. Of this, $4.5 million will be paid to the U.S. Treasury, $7.5 million as a contribution to the International Center for Missing and Exploited Children and $9 million to provide an online, public-service campaign to inform the public that online gambling enterprises are illegal. The company is accused of receiving payments, between 1997 and June 2007, from on-line gambling businesses for advertising online gambling. Google is to pay $3 million for the same allegations. Yahoo will pay $7.5 million for also allegedly receiving payments over a 10-year period from online-gambling companies for advertising their Web sites. It will forfeit $3 million directly to the government, and spend an additional $4.5 million in an online campaign similar to Microsoft's. As part of the settlements, none of the three companies admit or contest their culpability. The settlements were announced by Catharine L. Hanaway, U.S. attorney for the Eastern District of Missouri. "These fines add to the over $40 million in forfeitures and back taxes this office has already recovered in recent years from operators of these remote control illegal gambling enterprises," said Hanaway in the statement. Spokespeople for the companies weren't immediately available to comment.

Linda Piazza : 12/19/2007 3:46:45 PM

When I look at a daily chart of the USDJPY, I see four candles in a row that pierced the 72-ema, at about 113.24, but then closed (not quite yet, today) back below that moving average. The growing-smaller candle bodies are lined up in a row beneath that moving average. It seems to me that the USDJPY is being parked beneath this resistance into the BOJ's decision at the conclusion of its two-day meeting. (I believe that's tonight, at midnight, but verify for yourselves.) I'm reminded of the way our equities were parked at resistance ahead of the FOMC decision, ready to break out when market participants got the good news. Good news that didn't come.

I'm wondering if currency traders will be disappointed tonight, too, and something will be said or done that will strengthen the yen against the dollar. That would send the USDJPY lower instead of higher, through that resistance, and could wreak havoc with the yen carry trade, if the drop were sudden and deep enough, and if that carry trade remains important. (I'm wondering.)

The typical correspondence of USDJPY and U.S. equity direction has fallen apart since our own FOMC meeting on 12/11. They usually head the same direction, but while the USDJPY continued higher, U.S. equities have zig-zagged lower after that FOMC meeting. There's been some disarray. I can't predict whether the former relationship will be reinstated after this BOJ meeting or not, but I am concerned about some rocky behavior overnight if the expectations among currency traders should happen not to be met.

Anyway, think about how much portfolio risk you have, whether you feel comfortable carrying it overnight, and how you might reduce it, if not.

Jeff Bailey : 12/19/2007 3:38:58 PM

Du Pont (DD) $42.69 -1.15% ...

Jeff Bailey : 12/19/2007 3:38:40 PM

Dow Chemical (DOW) $41.17 -1.00% ...

Jeff Bailey : 12/19/2007 3:38:18 PM

Explosion, Fire Erupts At Jacksonville, Fla Chemical Plant

DJ- An explosion and fire Wednesday at a chemical plant sent flames and billowing clouds of black smoke into the air. The fire was across the street from a JEA power plant, a spokeswoman with the utility said. Jacksonville fire and sheriff's officials did not return repeated phone calls and e-mails seeking comment. Dispatchers did not release any information.

Keene Little : 12/19/2007 3:35:11 PM

If the bulls could keep this afternoon's buying going, following the current pullback, there's a good chance they could drive the DOW above 13325 and negate the bearish price pattern. Today's pullback found support on the broken downtrend line from Oct 11th so that's the one bullish thing I see on the 60-min chart (and the break of the downtrend line on RSI). But until price gets above 13325 the bears still rule the roost. There is the potential we'll see price continue consolidating tomorrow before another leg down (Friday). Link

Jeff Bailey : 12/19/2007 3:32:43 PM

Cheesecake Factory (CAKE) $24.67 +11.27% ...

Jeff Bailey : 12/19/2007 3:31:48 PM

Options Report: Traders Take Forkfuls Of Cheesecake Factory

Linda Piazza : 12/19/2007 3:10:23 PM

The Bank of Japan is holding its two-day meeting. Most market watchers expect the bank to keep rates steady. Some believe that the Bank of Japan's Fukui would like to raise rates, but the government's own lowered economic forecast (caused by a collapse in the domestic housing industry and worries about consumption) and prospects of slowing U.S. growth keep him from doing that. Their housing downturn was prompted by a change in some kind of construction-related rules, and some hope that another change in rules will undo the damage, but that remains to be seen.

According to Jonathan Allum from KBC Financial Products, speaking on CBNC Europe last night, some hope for a soft landing in Japan. The trouble is that many have noted that Japan doesn't tend to have soft landings, but much bumpier ones.

Allum said that yen weakness may be ending, which would of course impact the yen carry trade. This upcoming meeting and the resulting statement do have the possibility of impacting currency markets, and therefore, U.S. equities. In fact, I'm wondering if the unraveling this last week or two in the typical inter-market relationship of the USDJPY and U.S. equities might have been due to the various pushes and pulls of opinions related to what the FOMC did last week and the BOJ will do this week. I believe Japan's decision will be rendered at midnight tonight, but check your own news source to confirm. I don't know Allum and can't judge the trustworthiness of his information, but I do know that the decision could definitely impact currency markets.

Jeff Bailey : 12/19/2007 3:08:51 PM

TIME NAMES PUTIN PERSON OF THE YEAR

DJ- Richard Stengel, Time's managing editor, says the 2007 honor went to the Russian leader "for an extraordinary feat of leadership in taking a country that was in chaos and bringing it stability." Al Gore and J.K. Rowling also in the running.

Jeff Bailey : 12/19/2007 3:07:41 PM

FED TO OFFER $20B IN 35-DAY CREDIT VIA TERM AUCTION

DJ- Federal Reserve will offer $20 billion in 35-day credit through a term auction facility Thursday, in its second effort of the week to inject liquidity into troubled credit markets. Minimum bid rate will be 4.15%.

Jeff Bailey : 12/19/2007 3:06:30 PM

FED AWARDS $20B 28-DAY CREDIT IN AUCTION

DJ- In the first of several auctions announced last week in a bid to alleviate a squeeze in credit markets, Fed awards $20 billion in 28-day credit through Monday's term auction facility offering amid strong demand.

Jane Fox : 12/19/2007 3:02:38 PM

The daily chart of the SPX is showing a higher low but the swing high at 1523 has to break before that swing low is confirmed and 1523 is a long ways off. Link

Jeff Bailey : 12/19/2007 2:56:13 PM

QQQQ $50.15 ... VXN.X 25.03

Jeff Bailey : 12/19/2007 2:55:44 PM

QQQ-LY $0.15 x $0.16 ... 58,582 traded all exchanges.

Linda Piazza : 12/19/2007 2:55:01 PM

I can't get the entire article because one must have an expensive subscription to do so, but I'm reading a headline and introductory paragraph on the Nikkei Net Interactive that says that today Japanese banks have turned down requests to participate in a rescue fund created by U.S. banks to handle the credit crunch. Those banks include Mitsubishi UFJ Financial, Sumitomo Mitsui Banking Corp. and Mizuho Corporate Bank.

Jeff Bailey : 12/19/2007 2:49:40 PM

DJUSHB 319.95 -1.03% ...

Jeff Bailey : 12/19/2007 2:49:05 PM

DR Horton (DHI) $13.18 -1.71% ...

Jeff Bailey : 12/19/2007 2:48:42 PM

Moody's Gives DR Horton "Junk" Bond Rating

Linda Piazza : 12/19/2007 2:41:26 PM

So far, since the afternoon of 12/11, we still have a series of lower highs and lower lows on the SPX. So, there's a confirmed downtrend still in place. That's a point on the bears' side.

However, yesterday afternoon, bulls pushed SPX prices up through a descending trendline off the Wednesday morning high. This morning's drop has been a retest of that trendline to see if it holds as support. It did, and bulls tried sending prices higher. Link That's a point on the bulls' side.

I'd have to see the SPX above this morning's 1464.42 high before I even considered that support confirmed, however, and I'd still be very leery of what might happen when the 1490 zone, the last time the trendline was tested, was approached.

Jeff Bailey : 12/19/2007 2:30:26 PM

NASDAQ NH/NL 51:209 ... 3 more NH than yesterday!

Jeff Bailey : 12/19/2007 2:30:03 PM

NYSE NH/NL 25:247 ... on more NH than yesterday!

Jeff Bailey : 12/19/2007 2:25:02 PM

Need some cash .... 10-year ($TNX.X) 40.58, or 4.058% ... still juuuuust under WEEKLY S1.

Jeff Bailey : 12/19/2007 2:22:39 PM

They're helping us ... RIO $32.24 +1.47% ... RIO-XZ $0.70 x $0.75 ... VIX.X 21.80 -3.71% ...

Keene Little : 12/19/2007 2:20:08 PM

After threatening to break down we got a strong buy program across the board. Welcome to opex chop and whipsaws. Hard to trust any move here since follow through seems to be lacking. This also continues to fit the larger 4th wave consolidation idea.

Jeff Bailey : 12/19/2007 2:19:56 PM

QQQQ $49.95 +0.12% ... QQQ-LY $0.13 x $0.14.

Jeff Bailey : 12/19/2007 2:19:30 PM

They're killing us ... VXN 25.44 -5.03% ... session low.

Jeff Bailey : 12/19/2007 2:16:01 PM

TRINQ's DAILY Pivot 0.90. S1 at 0.31

Jeff Bailey : 12/19/2007 2:15:29 PM

TRINQ ... 0.77

Jeff Bailey : 12/19/2007 2:15:08 PM

TRINQ ... 1.03

QQQQ $49.98

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

RIO-XZ so far today $0.60 to $0.85.

Jeff Bailey : 12/19/2007 2:12:52 PM

RIO $32.14 +1.16% ... DAILY Pivot $31.59.

Jeff Bailey : 12/19/2007 2:11:45 PM

NYSE Comp. 9,578.07 -0.25% ... DAILY Pivot 9,571

Linda Piazza : 12/19/2007 2:10:31 PM

The SPX's 15-minute 9-ema is now at 1450.70, with that potential resistance on 15-minute closes. Light support exists at about 1445.70, but stronger support is lower, at the previous potential target near 1438-1439. However, the SPX is breaking up through the 9-ema, although it hasn't yet closed a 15-minute period above it.

There's just not much rhyme or reason today to what's happening. I'm seeing conflicting information in some of the other charts I watch, and that's being reflected in this choppy action.

Jeff Bailey : 12/19/2007 2:09:54 PM

TRIN 0.98 ... comes back to DAILY Pivot.

Jeff Bailey : 12/19/2007 2:05:27 PM

VIX.X 22.12 -2.29% ... that was "close"

Jeff Bailey : 12/19/2007 1:57:07 PM

SPY $145.29 -0.40% ... after undercut of WEEKLY S1. Traded $145.00 strike.

Jeff Bailey : 12/19/2007 1:54:53 PM

VIX.X Alert! 22.45 -0.83% ... sticks its head back above WEEKLY Pivot.

Jeff Bailey : 12/19/2007 1:43:12 PM

Telling us something we already knew. Or the MARKET knew.

Jeff Bailey : 12/19/2007 1:42:32 PM

Fed's Lacker: More Subprime Writedowns a Given.

Jane Fox : 12/19/2007 1:40:28 PM

THe DOW is consolidating at daily lows suggesting it will break out lower.

Jeff Bailey : 12/19/2007 1:40:16 PM

10-year Yield ($TNX.X) alert! down 7.1 bp at 4.049%. Undercutting WEEKLY S1.

Jeff Bailey : 12/19/2007 1:37:45 PM

Fed's Lacker:
"I am confortable" with inflation picture
Fed must keep down overall inflation, not just core
Sees "very weak" growth for several more months
Housing to stay drag on growth "well into" '08
Econ growth likely to improve into 2008
US growth likely to average 2%-2.25% from Q4 '07 - Q4 '08.
Turmoil could recur on new information

Keene Little : 12/19/2007 1:35:16 PM

At this point it's certainly looking like the lottery play in any Dec call options that you might have purchased yesterday are not going to work. That's why I called it a lottery play--it's an all or nothing play. It either works (and still could) or it doesn't. Others might have called out a similar play but didn't indicate the high risk involved. I make the high risk clear when I call it a lottery play.

After dropping back down from this morning's high we've been going sideways. That makes it look like we're going to get another leg down. Yesterday's low needs to hold if the sideways triangle idea is going to play out. Otherwise a new low would indicate the 4th wave correction has finished at today's high and we're now in the 5th wave down (of wave 3). What that means is that we could stair step lower into the end of the week. But the choppy price action leaves me guessing at the moment as to which scenario is playing out here.

Linda Piazza : 12/19/2007 1:23:58 PM

The SPX still maintains 15-minute closes beneath the turning-lower 9-ema. That's at 1452 as I type. That preserves a tentative downside target now at 1438.58, but don't put too much faith in that yet with the SPX still not producing a new low of the day.

Linda Piazza : 12/19/2007 1:21:53 PM

I've been mentioning the TRAN's relative (to the SPX, based on Keltner channels) weakness. The USDJPY is the opposite: it's stronger. It threatened a breakout through a Keltner channel now at 113.43, with the USDJPY at 113.40 as I type. While the inter-market relationship could have shifted due to what's going on in Japan (a revised-lower estimate for the economy last night) or here, based on what we've seen in the past two years, the TRAN and USDJPY are pulling the SPX different directions here. How does one interpret this? With caution toward drawing any conclusions at all.

Jeff Bailey : 12/19/2007 1:12:39 PM

Wachovia (WB) $38.92 -1.94% ... trading at upward trend from 11/20/07 multi-year low. Benchmark of MS from 11/08/07. Link

Jane Fox : 12/19/2007 1:02:11 PM

Still waiting for the YM (DOW futures) to trigger a long.

Jane Fox : 12/19/2007 12:58:55 PM

Not sure what that is telling me other than the bears are getting stronger.

Jane Fox : 12/19/2007 12:58:34 PM

I just got an email from a subscriber who says, "Haven't heard you mention the "trend of the TRIN" for a long time. slowly but surely moving higher this morning."

You are so true Mark so here goes. The Trin started the day our below 0, which is bullish but has now climbed to a high of 1.10.

Linda Piazza : 12/19/2007 12:55:44 PM

The SPX's flattened 15-minute 9-ema and 45-ema's are now at 1452.81 and 1454.40, providing next potential resistance on 15-minute closes. The SPX is staying below those on 15-minute closes, and the 9-ema has begun curving over, so the SPX has presumably set a short-term potential downside target near 1438.50. However, I'm not trusting targets too much today, as this prolonged sideways action is going to eventually encourage bulls to step in if it continues.

When I look at the TRAN, I note that it still has not produced a new low of the day. It tested that previous low and held juuust above it, but it certainly hasn't been able to move much off it, either. In a successful double-bottom test, you would expect prices to spring off that double-bottom test. The TRAN is now at 4582.33, not far off the 4567.48 low of the day nor the 4569.49 retest low. I get the opposite impression here as I do when looking at the SPX: if the TRAN can't manage to bounce a little harder, bears are going to be encouraged and drive the component stocks lower.

Jeff Bailey : 12/19/2007 12:51:59 PM

NYSE and NASDAQ Internals at this Link

Jeff Bailey : 12/19/2007 12:43:03 PM

That "dashed pink" line on my chart marks the 5-minute close of yesterday's noted volume spike.

It is "underwater" at $49.80.

At this point, I've got to think it was purely op-ex related at $50.00 strike.

Jane Fox : 12/19/2007 12:41:07 PM

I see a YM long at 13301 with a stop at 13264. Put your target at a 1:1 ratio to the risk.

Jeff Bailey : 12/19/2007 12:37:40 PM

QQQQ my 5-minute interval chart with WEEKLY/MONTHLY Pivot retracement and QCharts' daily Pivot levels. Link

Keene Little : 12/19/2007 12:25:44 PM

If it is going to be a sideways triangle that plays out then scalpers should look to buy and sell support and resistance but stay aware that these patterns (4th wave corrections) tend to be choppy and full of whipsaws and generally poor patterns to trade (it's when traders tend to give back profits after a nice 3rd wave run).

Keene Little : 12/19/2007 12:23:44 PM

The DOW chart that I posted last night showed the possibility for a sideways triangle consolidation this week before heading lower (dark red). At this point I'd have to say that's my preferred wave count: Link

Jeff Bailey : 12/19/2007 12:23:20 PM

Morgan Stanley (MS) $50.18 +4.41% ... earnings call ends.

Jeff Bailey : 12/19/2007 12:22:36 PM

Morgan Stanley ... We aren't going to pull out, but the origination side is going to see a slowdown.

Jeff Bailey : 12/19/2007 12:21:57 PM

Wachovia ... Should we be thinking of trading opportunity to the upside? Or are you going to pull out of mortgage business?

Jeff Bailey : 12/19/2007 12:21:13 PM

Wachovia asking a question ...

Jeff Bailey : 12/19/2007 12:18:47 PM

Goldman Sachs can ask those type of questions ...

Jeff Bailey : 12/19/2007 12:16:52 PM

Goldman Sachs ... surprised your trading bar this stable considering loss.

Jane Fox : 12/19/2007 12:16:44 PM

Internals are a mixed bag again today. Both the DAX and the USDJPY are going in opposite directions so one is bullish and the other bearish. AD line and ratio are both making new daily lows so they are in sync and bearish. VIX is climbing but not to new daily lows so it is neutral. Link

Jeff Bailey : 12/19/2007 12:16:17 PM

MS ... risk management group didn't see "this big of a stress"

Jeff Bailey : 12/19/2007 12:15:21 PM

Goldman Sachs asking MS ... how could you take this large of a loss?

Jeff Bailey : 12/19/2007 12:12:46 PM

$51.33 would be juuuust below WEEKLY Pivot.

Jeff Bailey : 12/19/2007 12:11:21 PM

Upside objective on QQQQ "should it play out" would be $51.33

Jeff Bailey : 12/19/2007 12:09:45 PM

Tiny reverse h/s pattern on 5-minute charts have "right shoulders" holding so far. QQQQ and SPY. (see 12:02:32)

Jeff Bailey : 12/19/2007 12:08:19 PM

MS ... Certainly a US slowdown would hurt investment banking activity.

Jeff Bailey : 12/19/2007 12:07:40 PM

MS ... greatest uncertainty is credit markets. Seeing very little trade, so very difficult to assess.

Investment banking pipeline very healthy.

Keene Little : 12/19/2007 12:03:19 PM

The DOW has pulled back to its broken downtrend line from Dec 11th so bulls want to see it hold here (not a bad place to nibble on a long if you're feeling a little bullish for the rest of the week).

Jeff Bailey : 12/19/2007 12:02:56 PM

QQQQ $49.70 -0.38% ...

Jeff Bailey : 12/19/2007 12:02:32 PM

NQ day trade bulls probably ready to pull the plug here.

Linda Piazza : 12/19/2007 11:59:30 AM

SPX traders are attempting to stabilize prices near 1450, but not being entirely successful. The Keltner setup shows potential for a decline to 1438.73 next Keltner support, but I'm watching the TRAN for some corroboration before I get to set on any target. The TRAN is at 4574.95 as I type, approaching but not yet exceeding its previous low of the day. It could bounce from that low or punch through it. We'll see.

Jeff Bailey : 12/19/2007 11:56:44 AM

MS ... hedge is broad based, not concentrated in any one area/security.

Jeff Bailey : 12/19/2007 11:47:31 AM

Morgan Stanley (MS) $49.75 +3.49% ... Q&A session begins.

Keene Little : 12/19/2007 11:47:25 AM

I just noticed the euro dropped hard at the same time the equity markets gave up their gains. Not sure what's got the currencies making the big move but I suspect the equity move might be tied to it.

Keene Little : 12/19/2007 11:44:14 AM

Mother MER is tanking after bouncing this morning, currently down -3.5%.

Linda Piazza : 12/19/2007 11:37:31 AM

SPX Keltner resistance held; Keltner support isn't. That support was layered down to 1452.60 on 15-minute closes.

I've been watching the TRAN all morning, with the TRAN heading an opposite direction of the SPX, OEX, and Dow. That's not usually a situation that continues for long, as I've been noting, without being certain whether those other indices were going to pull the TRAN higher or if the TRAN's weight was going to pull the others lower. As I type, the TRAN is sinking back again, but it still hasn't reached a new low for the day nor broken down out of the Keltner channel lines that it tested earlier today. A move below the previous 4567.48 low of the day, compounded by a 15-minute close below about 4568.75, would signal more weakness. The TRAN is at 4589.41 as I type.

Right now, it still seems to me as if market participants are trying to sort things out. This is a tricky time to trade, with support suddenly giving way or prices suddenly pushing up through resistance at any given moment.

Jeff Bailey : 12/19/2007 11:31:30 AM

Wachovia (WB) $39.12 -1.43% ... probes yesterday's lows. A firm that in my opinion has "done little."

Keene Little : 12/19/2007 11:28:29 AM

Got a little sell program there. So far the expectation for chop has been about right. This morning's gains in the averages are all gone and the banks are back down close to flat.

Jeff Bailey : 12/19/2007 11:24:03 AM

Quote of the Day: ... "The writedown Morgan Stanley took this quarter is deeply disappointing - to me, to our colleagues, to our Board and to our shareholders. Ultimately, accountability for our results rests with me, and I believe in pay for performance, so I've told our compensation committee that I will not accept a bonus for 2007." - John J. Mack, Chairman and CEO Morgan Stanley.

Jeff Bailey : 12/19/2007 11:18:47 AM

Morgan Stanley Earnings ... Company Press Release Link

Jeff Bailey : 12/19/2007 11:16:56 AM

MS call taking place ... Link

Keene Little : 12/19/2007 11:14:38 AM

The techs have backed off more and look like the weaker sector today. The strength in the banks and brokers (XBD) is helping the DOW and SPX while the Trannies offset the strength in the banks. As Linda pointed out, we've got some very mixed signals in the market today. Got some reading/research you've been meaning to do? Now's as good a time as any.

Jeff Bailey : 12/19/2007 11:14:34 AM

The "major news" since has likely been the 5-year Freeze plan on ARMs.

Jeff Bailey : 12/19/2007 11:13:10 AM

Morgan Stanley (MS) $50.04 +4.09% ... same chart we looked at not long after MS update in early November. Link

Notes are my thoughts on MS's hedge.

Jeff Bailey : 12/19/2007 11:05:24 AM

Morgan Stanley (MS) $49.95 +3.91% ...

Linda Piazza : 12/19/2007 11:02:52 AM

So far, the SPX's nearby resistance, now layered up to 1465.85 on 15-minute closes, has held on 15-minute closes. Now, on this pullback to recharge, short-term bulls would like to see the 9-ema, now at 1459.18, hold on 15-minute closes. Further potential support is now at 1454-1456.

Jeff Bailey : 12/19/2007 11:02:42 AM

A Bottom?: US Foreclosure Filings Up 68% in November ... AP Story Link

Keene Little : 12/19/2007 10:52:53 AM

The market is holding onto its morning gains and now price action has slowed way down. The techs appear to be consolidating and that continues to look more bullish than bearish for now.

Jeff Bailey : 12/19/2007 10:39:46 AM

DOE: US Refineries Ran At 87.8% Capacity

Jeff Bailey : 12/19/2007 10:39:17 AM

DOE: US Distillate Stockpiles -2.1M Bbls in Week

Jeff Bailey : 12/19/2007 10:38:45 AM

DOE: US Gasoline Stockpiles +3M Bbls In Week

Linda Piazza : 12/19/2007 10:38:52 AM

These days, market uncertainty is illustrated by so many mixed signals. Today, those are coming from the SPX headed higher, testing mid-channel resistance, and the TRAN headed lower, testing lower channel support: they just don't typically move opposite each other for very long or very far. The TRAN hasn't reached a new low of the day, and it sometimes changes its character on Wednesday after the crude supply numbers come out, so we'll see if it stabilizes now and begins climbing again. It needs to hold above the previous low of the day at 4567.48 and above 4571 on 15-minute closes to at least begin to corroborate bullish hopes. It's at 4606.65 as I type, with Keltner support looking as if it might be firming just a bit. Still iffy, though.

Jeff Bailey : 12/19/2007 10:37:34 AM

US Oil Fund (USO) $71.84 +1.02% Link ... $0.50 box chart to match futures.

Jeff Bailey : 12/19/2007 10:36:20 AM

DOE: US Crude Oil Stockpiles -7.6 Million Barrels At 296.9 Million Barrels

Jeff Bailey : 12/19/2007 10:33:03 AM

KOSPI Index finished up 21 points, or +1.18% at 1,861.47.

Jeff Bailey : 12/19/2007 10:29:19 AM

Conservative Lee Claims Victory In S. Korea Presidential Vote

Jeff Bailey : 12/19/2007 10:28:45 AM

Denmark To Pull Air Force Contingent Out of S. Iraq This Week

Jeff Bailey : 12/19/2007 10:21:21 AM

MBA's Weekly Application Survey at this Link

Jeff Bailey : 12/19/2007 10:19:59 AM

RIO $32.07 +0.94% ... session high has been $32.49

Keene Little : 12/19/2007 10:19:48 AM

With Morgan Stanley writing off another $5.7B and seeing the banks (BIX) up almost 2% today I'd have to think there's some more bottom fishing going on in the banks. Surely it can't get any worse, right? Right? Ahem.

Linda Piazza : 12/19/2007 10:15:43 AM

The SPX's resistance on 15-minute closes are at 1463.60 and then again at 1466.16.

Jeff Bailey : 12/19/2007 10:18:25 AM

IMF Lauds BOC Rate Cut, Pleased C$ Down From Record Highs
Balance Of Risks To Canada Forecasts Tilted To Downside
Canada To See Greater Drag From Weak US Economy, C$ Gains
Disorderly Unwinding Of ABCP Major Risk To Investor Confidence
Canada Should Reduce Barriers To Takeovers Of Big Banks
Canada Should Use Fiscal Room To Cut Taxes

Jeff Bailey : 12/19/2007 10:08:22 AM

RIO-XZ are $0.60 x $0.70

Jeff Bailey : 12/19/2007 10:08:04 AM

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

Jane Fox : 12/19/2007 10:07:24 AM

WASHINGTON (MarketWatch) -- U.S. banks have borrowed $20 billion from the Federal Reserve for 28 days at 4.65%, the Fed announced Wednesday. It was the first of several planned auctions of short-term credits to alleviate a liquidity crunch in credit markets. A total of 93 banks bid in the auction on Monday, asking for $61.6 billion. The bid-to-cover ratio was 3.08. At 4.65%, the stop-out interest rate for the auction offered a 10 basis point discount from the Fed's discount window rate of 4.75% and 28 basis points below the prevailing interbank lending rate of 4.93%. The loans are fully collateralized and will be repaid on Jan. 17.

Keene Little : 12/19/2007 10:03:24 AM

If there are bullish things afoot here, with the very shallow correction yesterday afternoon, then a pullback can't drop below yesterday afternoon's lows. That would make a good stop level for any long positions for now since a drop back below there would likely see a much deeper retracement at a minimum.

Jane Fox : 12/19/2007 9:58:08 AM

VIX confirming S&P futures new daily highs. Link

Jeff Bailey : 12/19/2007 9:57:53 AM

VXN.X 26.37 -1.56% ...

Jeff Bailey : 12/19/2007 9:57:34 AM

Swing trade lower target alert! ... for four (4) of the five (5) QQQQ Dec. $51 Calls (QQQ-LY) to $0.25.

Will hold the other for ORCL and RIMM.

QQQQ $50.13 +0.48% ... QQQ-LY $0.18 x $0.20.

Jane Fox : 12/19/2007 9:54:48 AM

AD line improving to +242

Jeff Bailey : 12/19/2007 9:53:58 AM

No gap higher in the QQQQ this morning and I thought Dec. $51 Call buyers from yesterday needed a gap above today's daily R1 to get a target of $0.80 in the QQQ-LY.

QQQQ $50.10 +0.42% ...

Jane Fox : 12/19/2007 9:53:29 AM

Even though SPX's support/resistance 1490 has became almost unusable of late it may pose a threat to the bulls once SPX revisits that level again. Link

Linda Piazza : 12/19/2007 9:48:53 AM

Wow, the TRAN isn't suggesting anything bullish. It dropped heavily this morning, although it's attempting to bounce as I type. It dropped all the way to Keltner support at 4575.08 on 15-minute closes. A 15-minute close beneath that creates a short-term breakdown scenario for the TRAN. As most of you know, I watch the TRAN as a sort of indicator index because the SPX, OEX and Dow don't tend to move too far one direction without the TRAN going that direction, too. Sometimes the TRAN even leads them, so SPX, OEX and Dow bulls certainly want this bounce that's beginning to continue and for prices to surge higher.

Keene Little : 12/19/2007 9:47:37 AM

The opening pop higher was immediately sold into but there's been no follow through to the downside either. Now they're pushing it back up. It's a good time to sit back and wait for some clarity. Remember, flat is a position and many times during opex week it's a good position.

Jeff Bailey : 12/19/2007 9:47:42 AM

Houston Ship Channel Closed at 07:25 AM EST - Coast Guard

DJ- The Houston Ship Channel closed to tanker traffic at 7:25 a.m. EST Wednesday due to fog, according to the U.S. Coast Guard. Fifteen ships are waiting to enter the channel, and 12 are queued to leave, though traffic is proceeding normally at Texas City and Galveston. The Houston Ship Channel serves five refineries and many chemical plants and oil terminals in the Houston area. Fog shut down the channel for an extended period between Dec. 8 and Dec. 12. The National Weather Service has a dense fog advisory in place for sections of the Texas coast through 12 p.m. EST.

Linda Piazza : 12/19/2007 9:45:58 AM

If anything, the first 15-minute close above the Keltner support then at 1453.50 supported the bullish thesis, but so far, all that would suggest is that a retest of the resistance I've been noting might be more likely to occur than a test of the 1449 area. Even that's not strongly predicted, but just sort of suggested.

Linda Piazza : 12/19/2007 9:41:14 AM

The Keltner picture on the USDJPY is even cloudier. Overnight, the USDJPY twice dipped into what is becoming a support zone between 112.60-112.80, but it's back at 113.00 as I type, with candles going sideways and with Keltner support and resistance lines ranged thickly around it on either side. Right now, it looks as if it will take a sustained breakdown below 112.60 or a sustained breakout above 113.32 to signal any kind of meaningful move at all.

Linda Piazza : 12/19/2007 9:38:34 AM

The Keltner setup for the SPX doesn't lend itself to predicting next short-term direction. The short-term Keltner resistance that I was mentioning yesterday, now at 1463.11 and again at 1466.33, still looks as strong as it did yesterday. Keltner support near 1453.50 (on 15-minute closes) is strengthening a bit, but it looks as if a dip to 1449 could be possible. What happens next depends somewhat on what happens at that 1449 test, if it occurs. It's just not clear right now.

Jane Fox : 12/19/2007 9:33:32 AM

Ad line is -74.

Keene Little : 12/19/2007 9:25:22 AM

Equity futures had a wide swing last night, with ES moving 15 points top to bottom and getting as low as 10 points in the red, but they're back to flat for the open. It could be the way today trades so be careful of the chop.

Jane Fox : 12/19/2007 9:15:12 AM

This is the chart that has me bearish on Gold, the US$. This is your classic bottoming pattern. Link

Jane Fox : 12/19/2007 9:13:52 AM

Surprise, surprise Crude is building a triangle as well. Link

Jane Fox : 12/19/2007 9:11:34 AM

Gold is building a nice little triangle however, its shape unfortunately gives us few clues as to which direction it will break. My thoughts are that it will break out down because the US$ is building a bottom and its rally is not yet over and Crude looks weak. Link

Jane Fox : 12/19/2007 9:05:15 AM

Here are you overnight charts. No market was able to break through its respective previous day highs although the Russell futures (ER2) was able to test its PDH. Link

Jane Fox : 12/19/2007 8:53:50 AM

BOSTON (MarketWatch) --Morgan Stanley is writing down an additional $5.7 billion of mortgage-related assets, taking the total fourth-quarter loss to nearly $10 billion in the latest sign that the credit crunch is worsening, financial results showed Wednesday.

On another front, the Wall Street giant said it's entered into an agreement with China Investment Corp. to issue new capital of about $5 billion through equity units with mandatory conversion into common stock.

Morgan Stanley booked the additional $5.7 billion in November. Including a $3.7 billion write-down taken as of Oct. 31 and announced on Nov. 7, the total fourth-quarter mark-down on mortgage exposure works out to about $9.4 billion.

The company reported a loss from continuing operations of $3.59 billion, or $3.61 a share, for the fourth quarter ended Nov. 30.

Jane Fox : 12/19/2007 8:51:46 AM

CHICAGO (MarketWatch) -- Applications filed for mortgages decreased a seasonally adjusted 19.5% last week, reflecting a sharp drop in refinancing activity, the Mortgage Bankers Association said Wednesday.

Mortgage interest rates rose across the board during the week ended Dec. 14 compared to the prior week, according to the Washington-based MBA's latest survey.

Applications were up an unadjusted 1.7% compared with the same week in 2006.

Refinance applications decreased 27.3%, according to the survey. Applications for loans to purchase a home fell 10.6% on a seasonally adjusted basis.

The four-week moving average for all loans was down a seasonally adjusted 1.0%.

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