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Keene Little : 1/14/2008 11:26:51 PM

Tuesday's pivot tables: Link and Link

Not a whole lot changed from the daily charts that I updated Sunday night. Monday was an inside day for all but the techs and the DOW daily chart shows we're still waiting for resolution to the question about whether we get a rally this week or not: Link

The DOW 60-min chart shows price stopped at the downtrend line from Dec 26th through last Thursday's high, currently near 12790. The form of the bounce off Friday's low requires a rally out of the gate on Tuesday in which case we should see the market proceed higher. Another pullback could see the market instead finish down for the week (flush out the long opex players) before setting up a rally into month end. Link

The NDX 60-min chart shows a potential sideways triangle in play which could mean another down-up sequence inside the pattern before dropping to a new low. This too requires a rally out of the gate on Tuesday and back above Thursday's high near 1968 to break the bearish triangle pattern. Link

OI Technical Staff : 1/14/2008 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The Market Monitor has been archived.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 : 1/14/2008 9:15:31 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 1/14/2008 4:32:32 PM

Closing Internals found at this Link

Jeff Bailey : 1/14/2008 4:08:24 PM

Genentech (DNA) $70.64 -1.20% ... slips to $68.72 extended on headline numbers.

Jane Fox : 1/14/2008 4:07:03 PM

Economic Reports for tomorrow include.

8:30a.m. Jan NY Fed Manufacturing Report. Expected: 8.25. Previous: 10.31.

8:30a.m. Dec Producer Price Index. Expected: +0.2%. Previous: +3.2%.

8:30a.m. Dec PPI, Ex-Food & Energy. Expected: +0.1%. Previous: +0.4%.

8:30a.m. Dec Retail & Food Sales. Expected: -0.1%. Previous: 1.2%.

8:30a.m. Dec Retail & Food Sales, Ex-Autos. Expected: -0.2%. Previous: +1.8%.

10:00a.m. Nov Business Inventories. Expected: +0.5%. Previous: +0.1%.

Keene Little : 1/14/2008 3:59:23 PM

The bears are too strong and the bulls have backed off. The DOW came up to its downtrend line off last Thursday's high, near 12794, and pulled back marginally. It might get parked there for the night and the results of tomorrow morning's reports will have it pulling back from resistance or jumping over it and moving higher. The first upside target would be 12970 for two equal legs up and then just above 13200 if it can keep rallying. Link

Linda Piazza : 1/14/2008 3:58:32 PM

There's still a lot of hesitancy on the part of bulls, isn't there? Normally, before an economic number that will definitely impact the rate decision the Fed makes--the PPI tomorrow--the shorts would have been in a mad rush to cover before the close when it became apparent that they weren't going to be able to push prices lower.

Jim posited the theory this weekend that the Fed could make an between-meeting announcement if the inflation numbers seemed tame. I've heard that idea batted about since last Thursday's speech by Fed Head Bernanke. You'd think that shorts would be in a rush to cover ahead of tomorrow's numbers, but . . .

If you haven't already exited and you plan to before the close, it's time to be getting those orders in.

Keene Little : 1/14/2008 3:46:11 PM

The bulls are going to make a run for it--see if they can get across the line without getting mauled by the bears as we head into the close.

Linda Piazza : 1/14/2008 3:46:02 PM

The SPX's upside target is now at 1420.01, with potential resistance a bit lower, too, at 1417.21. As the end of the trading day approaches, the SPX tentatively rises into that resistance. You've had lots of warning earlier by the Keltner setup, allowing you time to make decisions about how you'll treat a test of this resistance. Make your end-of-day decisions about whether you'll hold overnight soon, if you haven't already. If you're not holding overnight, it's time to start following the SPX up very closely with your stops so you'll be taken out near the top.

Jeff Bailey : 1/14/2008 3:36:30 PM

Survey: US Producer Prices Seen Up, Sales Seen Down

DJ- Economists expect the producer price index to show a modest increase of 0.1% rate for December after a hefty 3.2% rise in the prior month. Retail sales are seen down 0.1%, following a 0.6% gain in November.

Jeff Bailey : 1/14/2008 3:33:44 PM

Current OPEN MM Profiles that I've made at this Link

Jeff Bailey : 1/14/2008 3:28:43 PM

VIX.X 23.06 -2.61% ...

Jeff Bailey : 1/14/2008 3:28:30 PM

Swing trade call(s) lower target alert! ... for the two (2) Kohls KSS Feb $50 Call (KSS-BJ) to $0.60 in the options.

KSS $38.71 +0.99% ...

KSS-BJ $0.05 x $0.10.

Linda Piazza : 1/14/2008 3:24:28 PM

The OEX's short-term upside target and potential resistance on 15-minute closes is now at 665.14, but 15-minute closes below the 9-ema, now at about 662.00, would question that upside target a bit.

Jeff Bailey : 1/14/2008 3:23:30 PM


DJ- GM plans to be the first auto maker to offer regular production of a plug-in hybrid vehicle, saying the plug-in version of the Saturn Vue Green Line SUV could be manufactured as soon as 2010.

GM $23.52 +0.08% ...

Jeff Bailey : 1/14/2008 3:22:37 PM


DJ- General Electric's energy investment business, buoyed by rising demand for alternative power, says that it will increase its investment in renewable energy by 50%, to $6 billion, by 2010.

GE $35.38 +0.59% ...

Linda Piazza : 1/14/2008 3:19:25 PM

I've been mentioning an SPX Keltner line near 1420 as being a potential upside target but also potential resistance on 15-minute closes. The TRAN hit the analogous Keltner line, now at 4281.52 for the TRAN, and found resistance there on 15-minute closes (2, so far). It's started down toward the 15-minute 9-ema, which has held as support for the TRAN since about 1:30 this afternoon. That moving average is now at about 4264.80, and short-term bulls hoping that the TRAN will charge higher again, hauling the SPX, OEX and Dow up with it, want to see that support hold on 15-minute closes.

Keene Little : 1/14/2008 3:18:24 PM

NDX is about to test a downtrend line from the bounce high on Jan 8th. If price turns back down here it will start to look like it could be trapped in a sideways triangle. This would be a bearish continuation pattern so the bulls need to get it out of here now: Link

Keene Little : 1/14/2008 3:12:00 PM

The COMP has been the laggard when it comes to its downtrend line from Dec 26th through the Dec 31st high. It's testing that downtrend line now near 2482.

Jeff Bailey : 1/14/2008 3:09:19 PM

03:00 Internals found at this Link

Keene Little : 1/14/2008 3:02:29 PM

Finally getting some nice follow through to the upside. The next resistance level for SPX should be it previous high near 1425.

Linda Piazza : 1/14/2008 2:56:58 PM

Okay, here's where we are going into the last hour and a quarter this afternoon. The SPX has set a potential short-term upside target that's now near 1420. These Keltner targets can also be potential resistance. Although the SPX has been running over targets as if it's trying to mimic the old SOX or RUT performances, the target and potential resistance near 1420 is the outer boundary of a Keltner channel that used to contain most SPX movements. So, I think you need to keep that in mind if the SPX approaches it. If you're in a short-term bullish trade and you intended to close it out before the end of the day, before PPI and C's report tomorrow, then you might want to be thinking about how you'll treat that test of 1420 if it occurs. More presumed strong resistance lies between 1425-1430 and you definitely need to be thinking about how you'll treat that, if short-covering should catch on and drive the SPX up that high.

Your intentions when entering a play, the amount you've invested, how much your emotions are tied up in the trade: all of that should be factored into your decision. If you bought a single contract of an $1.00 QQQQ call as a lottery play, you might decide one thing. If you're in 20 contracts of an ITM $14.00 SPX call, you might think something else. Do remember that the PPI tomorrow morning could be significant enough to gap the markets either direction. You might or might not have a chance to exit at a level that would protect profits if you wait until tomorrow. The risk, if you close out today, is that the market will gap in your direction tomorrow, and you lose the extra profits you would have made because there won't be a chance to get back in. Factor it all in.

Jeff Bailey : 1/14/2008 2:53:33 PM


DJ- Supreme Court dismisses employment disability lawsuit against Wal-Mart under a rule normally cited when parties reach a settlement.

Court also refuses to hear challenge of FDA policies that restrict use of experimental drugs for terminally-ill patients.

Jeff Bailey : 1/14/2008 2:49:52 PM

Oracle (ORCL) $21.97 +4.12% ...

Jeff Bailey : 1/14/2008 2:49:24 PM


DJ- Shares rise 4% as SAP says that preliminary 2007 software and software-related service revenue is up 17% from 2006 on a constant currency basis, well above the company's previous guidance of a 12% to 14% rise.

SAP $49.98 +4.10% ...

Jeff Bailey : 1/14/2008 2:47:09 PM

IBM $103.68 +6.15% ... (see 01:01:25 component list)

Jeff Bailey : 1/14/2008 2:46:17 PM

DIA $127.68 +1.18% ... DAILY R1 ($127.31), R2 $128.51.

Linda Piazza : 1/14/2008 2:44:44 PM

The SPX potential upside target is now only 1420.08. As the SPX moved sideways, that target dropped. The SPX needs to maintain 15-minute closes at or above about 1411.70 to keep that target.

Jeff Bailey : 1/14/2008 2:44:42 PM

YM 12,815

Jane Fox : 1/14/2008 2:41:19 PM

Here is McMillan's weekly commentary that came after the market closed on Friday. - The nine trading days from December 27th through January 8th encompassed one of the swiftest, deepest corrections in history. 2008 is off to a worse start than any other year before. Technical indicators that were modestly bullish or neutral turned decidedly negative. The aftermath is that the market is wounded but oversold. We don't envision any lasting rallies until a serious amount of basebuilding is done, particularly in stocks. However, such a swift decline makes the market oversold, and thus sharp, but short-lived rallies can spring up at any time -- as was the case in the last day and a half.

Let's start with $SPX. It fell through all of its support levels 1450, 1430, and 1400 -- before finding an intraday bottom at the 1380 level yesterday. This sets up the potential of a triple bottom on $SPX, as both March and August declines stopped at roughly the same level, although it is by no means certain that the current decline is over. Meanwhile, there is now resistance on $SPX at the 1430 level.

Equity-only put-call ratios worsened dramatically during this decline and have started to rise again -- thereby canceling out their late- December buy signals and returning to sell signals (Figures 2 & 3). These won't give buy signals until they roll over and start to head downward again. Currently, that doesn't look likely.

Breadth has been negative, but is now oversold. The heavily oversold nature of all these breadth measures certainly augurs for at least a short-term rally.

Volatility indices ($VIX and $VXO) have been divergent as well. However, neither has really spiked up, thereby creating the type of exhaustion buy signal one would expect to see at the end of a sharp decline such as we've had in the past two weeks. Consequently, these are giving bearish readings as they are now in uptrends.

So, the $SPX chart, put-call ratios and volatility indices are negative, while breadth is leaning towards bullish.

Finally, in the course of preparing the Daily Volume Alerts newsletter daily, I look at a lot of stock charts. They are, in general, terrible. The damage done to most stocks will not be easily repaired. And the same can be said for the broad market indices as well.

So, even if these divergences are positive and we begin to eventually get some buy signals from the generally bearish indicators, this market will not just reverse and explode on the upside. It will take some base-building and retesting. We would turn bullish only after buy signals emerge and a base is built.

Jeff Bailey : 1/14/2008 2:40:49 PM

SOHU.Com (SOHU) $51.03 +5.89% Link ... Today's trade at $51.00 is 3-box reversal higher.

CLOSED out the UZK-NI on Thursday at $48.75 in underlying.

Keene Little : 1/14/2008 2:36:32 PM

I was going to say the market can't seem to make any headway and seems to be just on hold now until we get past Citigroup's earnings report and the PPI report tomorrow morning. But then we got a quick buying spike across the board so it was looking bullish. That too just stopped and now they're pulling back again. It's just not a great trading environment here and tomorrow will likely start off with a bang again, but in which direction is the question.

Jane Fox : 1/14/2008 2:35:50 PM

VIX to new daily lows but the AD line is still below +1000 at +951. At one point +951 would be considered quite bullish but the last few months the AD line has spent a great deal of time either below -1000 or above +1000 and I am now using those levels as my benchmarks.

Jane Fox : 1/14/2008 2:29:16 PM

Let's try a YM short at 12768. Stop will be 12791 and target 1:1 ratio to the risk.

Jane Fox : 1/14/2008 2:16:43 PM

The short YM I was talking about at 12729 is now off the table as I'm sure you all know.

Linda Piazza : 1/14/2008 2:08:29 PM

There is a now a potential upside target of 1420.75 for the SPX, but I consider that only the most tentative of tentative confirmations. We need to see sustained 15-minute closes above 1411 to keep the potential target in play, but of course we also need to see a break to a new high of the day and sustained values above that. Instead of accomplishing all of that, the SPX is doing a sideways thing. It's not confirming anything!

I wouldn't be jumping into new plays with both feet, in case you're tempted to do. C reports tomorrow, I believe, and the PPI is tomorrow morning, both reasons to cause people to do some portfolio positioning this afternoon. Perhaps portfolios are already positioned and that's why we've been getting this clamped-down narrow range today, or perhaps the positioning is still to come. Perhaps shorts are going to get scared that numbers are going to be better than expected and start covering in a rush or perhaps bulls are going to start getting scared that numbers will be worse than expected, and abandon their positions. I just don't know which will happen, and charts just haven't been giving us many clues today.

Linda Piazza : 1/14/2008 2:00:32 PM

I haven't been writing much because the SPX was just chopping around within a tightening Keltner channel. As I type, the SPX is attempting to break out of that channel to the upside. It made a similar attempt early this morning but was knocked back after piercing the channel. That channel line is now at about 1411.92, and those hoping for a breakout situation (rally with new upside target) would prefer seeing a 15-minute close above that level. That would be the first since last Thursday.

Jane Fox : 1/14/2008 1:38:09 PM

OK now it gets even cooler!!! There is an order called OSO, order sends order. Once I trigger into a trade this will send my predefined stop and predefined limit and I don't have to do anything.

I'm sure you all have placed an order incorrectly, a buy instead of a sell or vice versa and ended up with a mess. On these occasions I will just cancel all orders and start over but that is not always possible. If you are long say and you put in a sell stop above the market you will be stopped at market because a sell stop says get me out at this price or lower. I could go on and on and I'm sure each daytrader has her/his own horror stories.

Since I have started using the OSO, I have never made these kinds of errors.

Oh and by the way the orders the OSO sends are OCO orders. Cool HEH?

Jane Fox : 1/14/2008 1:29:54 PM

Ok now this gets even cooler. There is something called an OCO, order cancels order. Once I enter a trade I immediately put on my "maintenance" orders; my protective stop and my limit order (target). If I put them in as OCO orders them if my stop is triggered :( my limit order will immediately be cancelled. If my limit is triggered :) then my stop order is cancelled.

OCOs are a must for day traders because if you place multiple orders a day you can have orders outstanding all over the place and not know it, which is really really bad.

Jane Fox : 1/14/2008 1:24:15 PM

Then we have an order called a conditional order which is more advanced but pretty cool. It is an order that will be submitted if set criteria are met, which are defined by the trader entering the order. This allows for a greater customization of the order to meet the specific needs of the trader.

Each broker will handle conditional orders differently.

Keene Little : 1/14/2008 1:19:07 PM

After this morning's quick spike up at the opening we've had a relatively flat market. We could get another leg down as part of the pullback from this morning's high but so far I remain cautiously bullish for at least the early part of this week.

Jeff Bailey : 1/14/2008 1:17:54 PM

01:00 Internals found at this Link

Jane Fox : 1/14/2008 1:15:46 PM

A limit order is the reverse of the stop order. If you want to buy a market BELOW where it is trading (this is called a FADE) you use a BUY limit order. If you want to sell a market ABOVE where it is trading you use a SELL limit order.

Jeff Bailey : 1/14/2008 1:11:01 PM

13-week 3.050% ... 5-year 3.050%

Jane Fox : 1/14/2008 1:10:51 PM

Just for the record I only use stop/market orders for the futures. I get slippage on the YM buy rarely.

Jane Fox : 1/14/2008 1:10:14 PM

The stop/market will ensure you are filled but the stop/limit will ensure you are filled at a certain price range.

Jane Fox : 1/14/2008 1:08:33 PM

This is where the stop/limit comes into play. A stop/limit will "limit" your entry or your exit to the specified price or to the amount of slippage you specify. Let's say you want to sell the YM at 12729 and you will only take 12729 or maybe 12728 or even 12727 but nothing less. A stop/limit will trigger the trade at 12729 but if you are not filled it will try again at 12728, then at 12727 and then stop trying. If you had a stop/market order you could be filled at any price but the stop/limit ensures you will be filled between 12729 and 12727. Of course the problem here is if the market continues lower and you were not filled the market will continue lower without you.

Jeff Bailey : 1/14/2008 1:01:25 PM

Dow Indu Components (sorted by price) at this Link

Jeff Bailey : 1/14/2008 1:00:03 PM

DAW-AY $0.48 x $0.49.

CLOSED out Friday at $0.51 as DIA traded $126.66.

Jane Fox : 1/14/2008 12:58:47 PM

This price you get filled at may not be the price you set and, although it may be better, nine times out of ten it will be worse.

Jane Fox : 1/14/2008 12:55:13 PM

One disadvantage of the stop order is that the order is not guaranteed to be filled at the preferred price the investor states. Once the stop order has been triggered, it turns into a market order, which is filled at the best possible price.

Jane Fox : 1/14/2008 12:54:36 PM

With a stop order, your trade will be executed only when the market you want to buy or sell reaches a particular price (the stop price). Once the market has reached this price, a stop order essentially becomes a market order and is filled.

Jeff Bailey : 1/14/2008 12:51:57 PM

TRIN ... 0.90

Jeff Bailey : 1/14/2008 12:51:13 PM

DIA $127.04 +0.67% ... still holding above WEEKLY Pivot ($126.73). DAILY Pivot ($126.37)

Jane Fox : 1/14/2008 12:51:35 PM

Today I would like to review the different kind of orders you can use. One of the issues that I have found confound traders is the difference between a stop, a limit, a stop/limit, a stop/market.

Let's talk about a stop order first. The kind of stop order placed depends on what you plan on doing. If you want to ENTER a short BELOW where the market is now trading now then you put a SELL STOP below. If you want to buy a market ABOVE where it is trading now then you put a BUY STOP above.

However if you are already in a trade and you want a protective stop placed, a long trade will have the sell stop BELOW the market and the a short trade will have a buy stop ABOVE.

Simple rule is all buy stops are above where the market is trading no matter if it is an entry or an exit and all sell stops are below no matter if it is an entry or an exit.

Jane Fox : 1/14/2008 12:45:05 PM

Stop will be 12751 and target is the same 1:1 risk ratio.

Jeff Bailey : 1/14/2008 12:44:53 PM


DJ- M&T Bank's 4Q net income falls to $64.9 million, or 60c a share, as the bank writes off nearly all of its collateralized debt obligations backed by subprime residential securities. Analysts expected EPS of $1.63.

MTB $71.45 -3.11% ... That's a new 52-weeker.

Jane Fox : 1/14/2008 12:44:30 PM

Let's try another YM short at 12729.

Linda Piazza : 1/14/2008 12:43:47 PM

The SPX's nearest support is now at 1406.94 on 15-minute closes; resistance is layered up to 1413.05 on 15-minute closes. RSI squiggles back and forth near 50, a neutral zone, as Keltner channels, narrowest to widest, now flatten at equidistance from each other. These offer absolutely no predictions of next direction when they line up this way. It's like a Bollinger band that's squeezing down. You know energy is being stored for a breakout, but when it will occur or which direction it will occur is difficult to predict. If I were held at gunpoint and asked to guess, I'd guess that 1424 was likely to be tested before 1396, the next strong resistance and support beyond this narrow band, but that's nothing but a guess. If the advdec line started dropping heavily rather than zigzagging lower with small-bodied candles chopping back and forth, I'd withdraw my guess.

Jeff Bailey : 1/14/2008 12:35:02 PM


DJ- Sovereign Bancorp cities volatility in the financial markets and deterioration in the credit markets, warning that its 4Q results will be hurt by about $1.61 billion in pre-tax charges.

SOV $10.18 -4.68% ... holding above recent 52-week low from 01/09/08 ($9.44)

Jeff Bailey : 1/14/2008 12:31:52 PM


DJ- Analysts have revised upwards their forecasts for this year's average oil price to above $80 a barrel, with surging demand from developing economies set to offset a weakening U.S. economy, a new Dow Jones Newswires oil price poll shows.

Jeff Bailey : 1/14/2008 12:29:57 PM


DJ- Bright Horizons Family Solutions, a provider of employer-sponsored child-care and early-education services, reaches a definitive agreement to be acquired by an affiliate of Bain Capital for $48.25 a share, or $1.3 billion.

BFAM $44.00 +34.18% ...

Jeff Bailey : 1/14/2008 12:26:45 PM


DJ- Citigroup's plans to raise capital by selling a stake of about $2 billion to China Development Bank could be in jeopardy because of opposition from China's government, according to a person familiar with the situation.

Jeff Bailey : 1/14/2008 12:24:57 PM

S&P Retail Index (RLX.X) $367.36 +0.28% ...

Jeff Bailey : 1/14/2008 12:24:29 PM

NRF Sees Slower 2008 Retail Growth ... AP Story Link

Keene Little : 1/14/2008 12:21:13 PM

An update to the SPX 60-min chart shows the potential inverse H&S pattern with the upside projection to 1480. The Fib projections for the next leg up, assuming the bulls can get this turned back around, are near 1445 (two equal legs up from last Wednesday) and then 1476 (2nd leg up = 162% of the 1st leg up). A drop back below 1400 would suggest we're heading for new lows instead (dark red). Link

Linda Piazza : 1/14/2008 12:07:11 PM

The SPX's 9-ema support did not hold, so the SPX now moves across the flattening 9-ema as if often does during the lunchtime lull, but typically a little later than it's doing it now. Nearby support extends down to 1407.13 on 15-minute closes, but with the Keltner channels closing in and RSI at 52.25, near the neutral zone, it's anybody's guess as to whether that support holds or resistance does. My guess, based on what I'm seeing so far with the advdec line and other clues, would be that support will hold near there, but that's just a guess. Don't hang onto a losing position based on what I'm guessing.

Keene Little : 1/14/2008 11:50:43 AM

Price action continues to be choppy in both directions and that leaves me guessing as to what the short term direction will be. If the bulls can hold this up and rally above Thursday's high (SPX 1429) it will be a break of an inverse H&S neckline for the pattern that has built during this month (you can see it easily on the 60-min chart).

That would give us an upside projection to about 1480 and obviously would be a nice move. But for the moment we're still in the inverted right shoulder and a long ways from confirming that pattern.

Linda Piazza : 1/14/2008 11:44:26 AM

The SPX dropped back to test the 15-minute 9-ema. Short-term bulls would prefer that this serve as support on 15-minute closes, as it has this morning and tends to do on days when the SPX is rallying. It's now at about 1409.80. A second hope is that the SPX moves up enough to keep that 9-ema rising. Right now, the average is beginning to flatten. It tends to do that during the lunchtime lull period anyway, so a strong push to a new high of the day that would turn it up again would be welcome by short-term bulls.

Jeff Bailey : 1/14/2008 11:42:36 AM


DJ- As crude continues to hover near record highs, domestic oil shipper Kirby boosts its 4Q earnings guidance and says positive trends should remain.

KEX $40.68 +5.38% ...

Jeff Bailey : 1/14/2008 11:41:35 AM


DJ- Shares of McDonald's, until now a pillar of strength in an otherwise disintegrating sector, fell nearly 7% Friday. Friedman Billings Ramsey reinitiates coverage with a market perform rating, citing 'reservations' about fast-food giant's future results.

MCD $54.44 +0.23% ...

Jeff Bailey : 1/14/2008 11:38:03 AM

It's legal to place trades "ahead" of clients as long as it is disclosed to client(s). Question is .... "Did Merrill Lynch disclose?"

Jeff Bailey : 1/14/2008 11:37:10 AM


DJ- Securities and Exchange Commission is investigating whether several current, former employees at Merrill Lynch improperly placed trades for the brokerage house's own account ahead of client orders, people familiar with the matter say.

MER $55.24 +1.00% ...

Jeff Bailey : 1/14/2008 11:35:53 AM


DJ- Citigroup's writedowns could be as high as $24 billion, CNBC says on its Web site. In addition, an estimated 20,000 layoffs will be part of a comprehensive plan to slash costs and raise capital, it says.

C $28.77 +0.73% ...

Jeff Bailey : 1/14/2008 11:34:58 AM


DJ- Retailer predicts fiscal 4Q and year earnings below expectations due to a 3.5% drop in same-store holiday sales and lower profit margins, citing increased competition and unfavorable economic conditions.

SHLD $89.93 -6.48% ...

Keene Little : 1/14/2008 11:31:37 AM

The same analysis on the GLD ETF as I just posted on gold (February contract), shows the 5th wave would equal the 1st wave at 90.59 and the top of its parallel up-channel is near 91.50 (weekly R2). With oscillators into overbought I suspect the run higher in gold is close to ending and we'll get at least a larger pullback soon. I would not want to be chasing gold higher here. Link

Jeff Bailey : 1/14/2008 11:31:27 AM

Apex Silver Mines (AMEX:SIL) $16.08 +1.96% ... SIL-BC $1.60 x $1.80.

WKLY Pivot Levels $13.84, $14.79, Piv= $15.59, $16.54, $17.34.

Jeff Bailey : 1/14/2008 11:31:24 AM

Bullish resistance on SLV $163.79 +1.87% from Andrews Pitchfork (modified shiff) currently at $170.50. Midpoint at $156.25. WKLY Pivot Levels $145.84, $153.42, Piv= 157.54, $165.12, $169.24.

Jeff Bailey : 1/14/2008 11:30:38 AM

Bullish resistance on GLD from Andrews Pitchfork (modified shiff) currently at $92.00. Midpoint at $87.50

WKLY Pivot levels are .... $83.11, $85.83, Piv= $87.30, $90.02, $91.48.

Linda Piazza : 1/14/2008 11:18:45 AM

The SPX completed another 15-minute close above Keltner resistance now at 1411.29, the first time it's done so since Thursday. Now short-term bulls want to see 15-minute closes above a rising 9-ema, with that average now at 1409.84.

Jeff Bailey : 1/14/2008 11:32:15 AM

Gold and Silver Comments from 01/10/2008 evening MM Link

Jeff Bailey : 1/14/2008 11:17:38 AM


DJ- Spot gold hits a record high breaching the $900 a troy ounce level following ongoing bullish momentum from a weakening U.S. dollar and concerns over the gloomy outlook for the U.S. economy, traders say.

Jeff Bailey : 1/14/2008 11:15:27 AM


DJ- International Business Machines says preliminary 4Q earnings from continuing operations are $2.80 a share, up from $2.26 a share a year earlier, driven by growth in Asia and Europe operations. Revenue climbs 10% to $28.9 billion.

IBM $103.69 +6.16% ...

Keene Little : 1/14/2008 11:12:39 AM

For gold's rally from the October 2006 low, the 5th wave equalled the 1st wave at 909.50 which was tagged this morning. Could that be it? But just a little higher, near 925, is the top of a parallel up-channel based on the uptrend line from the August 2007 low (wave 2 to wave 4 and then the parallel line attached to the top of wave 3). It takes a drop below 890 to suggest we'll get a least a larger pullback now. Link

Jeff Bailey : 1/14/2008 11:12:29 AM

Wachovia Bank (WB) $36.13 -1.04% ... NYSE-listed stock.

BIX.X closed Friday ABOVE this week's WEEKLY Pivot. BIX.X has NOT come close to backtesting its WEEKLY Pivot.

Jeff Bailey : 1/14/2008 11:10:54 AM

If short/put some weaker NYSE-listed stocks, would take some profits off the table based on NYSE NH/NL indications.

Jeff Bailey : 1/14/2008 11:09:41 AM

11:00 Internals found at this Link

Note: NYSE's 5-day NH/NL ratio above its 10-day NH/NL ratio. Would take a closing session measure of 16.00 or higher to have 5-day NH/NL ratio see 3-box reversal higher in "X".

Jane Fox : 1/14/2008 11:07:47 AM

... or raise the stop to at least breakeven. We got to within 3 ticks of our profit and you should not leave anything on the table now.

Jane Fox : 1/14/2008 11:07:07 AM

So far the YM hit a high of 12795 and I would be seriously thinking about taking profits.

Keene Little : 1/14/2008 10:59:43 AM

The little pullback over the past 30 minutes looks corrective so another push higher can be expected. Watch for potential resistance at this morning's highs.

Linda Piazza : 1/14/2008 10:47:22 AM

The SPX hasn't been able to break out above that Keltner resistance extending up to 1413.20 now on 15-minute closes. It may need to pull back to retrench. If it does, short-term bulls want 15-mintue closes above about 1407.30.

Jeff Bailey : 1/14/2008 10:46:25 AM

Last 2 and Current WEEK'S Pivot Matrix Levels at this Link

Keene Little : 1/14/2008 10:46:07 AM

The market is trying its best to rally back up towards this morning's highs but I'm not sure it's going to hold.

Jane Fox : 1/14/2008 10:36:19 AM

I am now long at 12766 and have removed my short at 12709. Stop on this long is 12734 and target is 12766 - 12734 = 32, 12766 + 32 = 12798.

Jane Fox : 1/14/2008 10:34:15 AM

Ok I have a YM short sitting at 12709 and now I will put on a YM long at 12766. The stop on the short will be at 12751 and the stop on the long will be at 12734. The target on either trade will be a 1:1 ratio to the risk.

Linda Piazza : 1/14/2008 10:30:14 AM

The action in the USDJPY last night was not pretty. The yen gained against both the dollar and the euro, pushing both the USDJPY and EURJPY lower during overnight trading. Whatever is left of the yen carry trade suffers from this kind of action, so today's equity gains question how important the yen carry trade really is any longer. Both the USDJPY and EURJPY have bounced off their 7:15-7:30 lows, so both are moving up during the market day, but when taken in the context of a longer-term look, this type of action hasn't generally been corroborative of equity gains. Today, I'm taking its action with a grain of salt. In the past, such a pronounced drop over a several-day period would certainly have been negative for equities, but I've long been on the watch for a time when the yen carry trade might be mostly unwound and this currency pair no longer so predictive for us. We'll see. Those who are much more knowledgeable than I am in these matters differ in whether they think the yen carry trade has been unwound or not.

Linda Piazza : 1/14/2008 10:22:28 AM

For OEX traders: Important resistance exists up to 661.68 on 15-minute closes. The comments in my 10:21:20 post about the SPX apply equally to the OEX.

Linda Piazza : 1/14/2008 10:21:20 AM

Important Keltner resistance for the SPX exists at about 1411.25 and then again at 1412.62 on 15-minute closes. I've thought the SPX might have enough strength that this would be challenged, but I'm not at all sure what the outcome will be. The SPX tried several times to break out above this resistance level (Keltner, historic) on Friday, but could not sustain closes above it. I thought perhaps today might be the day it does, but we'll have to see. Whatever happens now, whether or not the SPX does sustain gains, remember that the market climate is such that the markets could fall apart at any time or shorts could start covering at any time, so do not hang onto a losing play believing or hoping that the markets are going to turn around. Exercise good account management practices in this environment.

Keene Little : 1/14/2008 10:10:50 AM

With gold's push higher this morning (starting last night), it's obviously too early to be thinking short this shiny metal. It has now made it above some upside targets I had for gold so I'm watching to see what develops now. One non-confirmation of the gold rally is the lack of an equal rally in silver which is essentially flat this morning (and didn't rally nearly as much last night).

Gold trades more emotionally than silver which is more of an industrial metal (with some jewelry applications as well of course). Without a rally in silver it makes the gold rally a little more suspect since the strong spike up since the December low is looking "too much too fast". This will be followed by a collapse in price but where the top will be is obviously the question.

Jeff Bailey : 1/14/2008 10:07:13 AM

Current OPEN MM Profiles that I've made at this Link

CLOSED out the WB-PH at the bid of $5.80 as WB traded $35.82.

Linda Piazza : 1/14/2008 10:03:51 AM

The SPX will now close a second 15-minute period at the 15-minute 45-ema, with that average now at 1406.87. Another test of the 1411.77 (current value) potential resistance on 15-minute closes could in the works, although these closes at the resistance question that. My gut instinct this morning was that bulls would try to maintain gains and might be successful in that attempt for at least a time this morning, but they haven't been as successful as I thought they might be. I didn't expect a pullback this big this morning. Even if bulls are successful in maintaining challenges of resistance, I'm far from saying that, if that gut instinct is right, that bulls will be successful in testing, much less testing that neckline up just under 1430. That's why you need to know how you're going to react if in short-term bullish plays and the SPX should start approaching that neckline. It's still far away now and you have time to think about it.

Keene Little : 1/14/2008 9:57:10 AM

The RUT doesn't look nearly as bullish as the others. Its bounce from Friday afternoon already has overlap and leaves the bounce looking like a correction of the decline. It could get a larger bounce but that one is a heads up for something more bearish here.

Keene Little : 1/14/2008 9:53:16 AM

This needs to be about the extent of the pullback in order for the bulls to keep control.

Jane Fox : 1/14/2008 9:52:38 AM

I see a YM short at 12709 with a stop at 12751. Target will be a 1:1 ratio to the risk.

Jane Fox : 1/14/2008 9:51:52 AM

Both DAX and USDJPY are making new daily lows so they are bearish.

Linda Piazza : 1/14/2008 9:51:57 AM

I apologize. I was looking at a 30-minute chart in my 9:48:07 post, not a 15-minute one. The SPX did finish the 15-minute period above the 45-ema, but not by much and it's still testing it. That's just under 1407, and the SPX is now at 1406.20. The resistance levels that I mentioned earlier were on the 30-minute chart, although the 15-minute chart also shows potentially significant resistance at 1428, near the neckline for that potential inverse H&S. Sustained 15-minute closes above about 1411.70-1411.75 are required to set a potential target up near that neckline.

Jane Fox : 1/14/2008 9:51:23 AM

AD line has now fallen down to +846.

Jeff Bailey : 1/14/2008 9:49:33 AM

Now holding the Wachovia Bank WB April $35 Put (WB-PG) purchased/profiled on Friday.

Linda Piazza : 1/14/2008 9:48:07 AM

Uh, oh. My gut instinct was not right and short-term bulls are not getting what they most wanted. It does not appear that the SPX will finish this first 15-minute period above the resistance at the 45-ema, with that resistance now sinking to just under 1409. There's been some continued selling into the rise. So, the SPX has been knocked back into the chop zone that held most of Friday, and we start over. By the way, I am not in any short-term plays, bullish or bearish.

Jeff Bailey : 1/14/2008 9:47:53 AM

Swing Trade Put Exit Alert! ... for the one (1) Wachovia Bank WB April $40 Put (WB-PH) at the bid of $5.80.

WB $35.82 -1.88%% ...

Jane Fox : 1/14/2008 9:41:27 AM

VIX is testing its daily highs so is not confirming the bullish AD line.

Jane Fox : 1/14/2008 9:38:14 AM

AD line is a bullish +1576.

Keene Little : 1/14/2008 9:37:36 AM

If the bulls are going to keep control this morning we should see only a minor pullback/consolidation that lasts about an hour (small 4th wave in the move up from Friday afternoon's low) and then another push higher before setting up a larger pullback.

Linda Piazza : 1/14/2008 9:36:38 AM

A big potential inverse H&S exists on the SPX's 15- and 30-minute charts, head at Wednesday's bottom. The neckline is now at just under 1430, so that Keltner resistance that's already important in its own right, now at 1423.50 and 1430.90, will gain more significance because the neckline of that potential inverse H&S runs between them. I suggest that if you're in a short-term bullish trade, you begin thinking right now how you'll react if that Keltner resistance and neckline are tested. We're long overdue for a relief rally, but please remember that weak markets sometimes just fall apart from the most oversold levels, so there are no guarantees.

Linda Piazza : 1/14/2008 9:33:26 AM

Here we go. The SPX is charging right up to and through its 15-minute 45-ema, the first potential Keltner resistance on 15-minute closes. That's at about 1409.15, so bulls would like to see the SPX close this first 15-minute period above that. Somehow, I think that might happen today, but it remains to be seen if my gut instinct is right. Next resistance at 1416.65 but the strongest resistance band begins at 1423.50. The SPX is at 1412.30 as I type.

Keene Little : 1/14/2008 9:32:15 AM

Interactive Brokers says the trades resulting from the spike down near 2:00 AM have been busted.

Jane Fox : 1/14/2008 9:32:03 AM

Just heard from a fellow trader that the Globex messed up overnight, "'order imbalance' tons of people got stopped out/margined out/ etc. GLOBEX is NOT correcting the mess."

Jane Fox : 1/14/2008 9:21:43 AM

Last but not least is our chart of crude and as you can see it is finding support at 23.60% fib level.

I know I am repeating myself but the fact that crude did not make a new high on January 3rd and that the US$ is not even testing its last year lows all suggest Gold should be falling so we have something else going on in the Gold market of late that I cannot explain. Link

Keene Little : 1/14/2008 9:21:25 AM

After a very sharp spike down near 2:00 AM, equity futures worked their way higher with a very large run up after 7:00 AM. That kind of move in overnight futures always has me a little suspicious of manipulation. Regardless, we've got a very bullish start to this morning's equity market (bonds are flat). The first upside target will be two equal legs up from Wednesday's lows. I'll provide some targets to watch for. Just be a little careful of a post-manipulation pullback after the open.

Jane Fox : 1/14/2008 9:17:03 AM

I'm not sure why we have the huge spike on all markets at 2:02. I drilled down to a 1 minute chart to check it out and found that it didn't last anymore than a minute so I suspect a data glitch and I am choosing to ignore it.

In any case the overnight charts are bullish and I think the AD line will open above +1000. Lately the AD line and VIX have been at odds with one another and I am looking forward to a day when the internals all get back on board and start talking to me again. Link

Jane Fox : 1/14/2008 9:08:36 AM

Here is the chart of the US$ and the reason Gold is in rally mode.

When I saw Gold surge $15/oz I expected to see a huge drop in the US$ but this is not even testing last years lows.

Last week I was showing the reverse head and shoulders and why I was bullish on the greenback but that pattern did not pan out and I now see a bearish head and shoulder. I need to get back into Gold. Link

Jane Fox : 1/14/2008 9:02:20 AM

Here is the chart of Gold. Gee whiz, I missed this whole last part of the rally. Well the good thing about the stock market (futures markets) is that I know I will get another chance, at some point. Link

Jane Fox : 1/14/2008 8:58:44 AM

LONDON (MarketWatch) -- Gold futures on Monday surged to a new record, climbing as high as $915.90 an ounce and recently up $15.40 to $913.10 an ounce. Concerns that the U.S. may be cutting interest rates while Europe is raising them, as well as a report that Citigroup may need to write off $24 billion, drove a wave of dollar selling against the euro, the yen and other major currencies.

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