Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Keene Little : 1/29/2008 1:46:24 AM

Tuesday's pivot tables: Link and Link

With SPX having stopped at its downtrend line from Dec 26th at the end of the day on Monday, it should be telling whatever happens Tuesday morning. If Monday's rally sees follow through, especially with a move back above 1370 (last Friday's high was near 1368 and the August 2007 low is near 1370), then we should see a continuation of the rally into Wednesday up to a Fib target near 1405. Interestingly that would have the leg up potentially topping as we head into FOMC. Link

But if price pulls back again Tuesday morning and drops below about 1330 I believe that will be our signal that we're going to see a drop down to the 1306-1308 area before setting up another bounce.

Gold is pressing up towards the top of its parallel up-channel from the August low and as the daily GLD chart shows, just a little higher could have it finishing its move near 92.65 tomorrow, with bearish divergence so far: Link

The 60-min chart shows a potential rising wedge pattern for the move up from Jan 22nd, the top of which is near the same 92.65 level, and it's showing bearish divergence on this time frame as well: Link

For the February gold contract (which we've been following) I see a Fib resistance zone in the 931-935 area. For the April contract that Fib zone is 937-941 and I'm hoping to see a short play set up during RTH (regular trading hours). Jeff keeps sending me nasty emails about my attempts to short gold so I know I must be getting close now (he's my contrarian indicator).

OI Technical Staff : 1/28/2008 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The Market Monitor has been archived.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 : 1/28/2008 6:12:15 PM

NASDAQ's NH/NL Ratio Chart at this Link

Jeff Bailey : 1/28/2008 6:00:07 PM

NYSE's NH/NL Ratio Chart that I chart at this Link (see 05:02:33 PM)

Jeff Bailey : 1/28/2008 5:48:47 PM

Bull Alert! ... just noting that Dorsey/Wright's NYSE Bullish % (BPNYA) did reverse up to "bull alert" status on Friday at needed 22.00% (22.20% actual).

Here's StockCharts.com's version and the $BPNYA Link

Jeff Bailey : 1/28/2008 5:02:33 PM

Closing Internals found at this Link

Note(s): At today's close, the NYSE's 5-day NH/NL ratio does reverse up 3-boxes (needed 12.00%). It would take a 34% to generate a "buy signal." 10-day NH/NL ratio would show 3-box reversal up with 18.00% measure.

NASDAQ's 5-day NH/NL ratio does reverse up 3-boxes (needed 16.00%). It would take a 42.00% measure to generate a "buy signal." 10-day NH/NL ratio would show 3-box reversal up with 18.00% measure.

Jeff Bailey : 1/28/2008 4:48:12 PM

Yes, I did it - but I only wanted a bonus, rogue trader tells prosecutors ... TimesOnline Story Link

Jeff Bailey : 1/28/2008 4:44:25 PM

France's rougue trader escapes fraud charges ... AFP Story Link

Jeff Bailey : 1/28/2008 4:27:08 PM

SPY ... goes out $135.24. That's ABOVE WKLY 61.8%, WKLY Pivot, Conventional 19.1%, then QRTRLY S2.

Jeff Bailey : 1/28/2008 4:24:18 PM

Verizon (VZ) $38.11 +0.92% ... Earnings Press Release (this morning) Link

Consensus was for EPS of $0.62 on Revenue of $23.96B

Keene Little : 1/28/2008 4:21:49 PM

If today's rally doesn't hold and we start back down tomorrow (to which Bush will ask, "Is it something I said?"), then two equal legs down for SPX would be at 1308 which is right on top of the 62% retracement of last week's rally. Something to consider if you're long. Link

Jeff Bailey : 1/28/2008 4:20:05 PM

American Express (AXP) ... Earnings Press Release Link

Consensus was for EPS of $0.71 on Revenue of $7.85B

Jeff Bailey : 1/28/2008 4:15:58 PM

SPY $135.25 +1.66% ...

Jeff Bailey : 1/28/2008 4:15:47 PM

DIA $123.69 +1.22% ...

Jeff Bailey : 1/28/2008 4:15:20 PM

American Express (AXP) $47.40 +4.31% ... marked lower at $46.46 on headline numbers.

Keene Little : 1/28/2008 4:08:18 PM

If the bulls can keep the rally alive tomorrow and drive the DOW above 12400 and SPX above 1355 then the wave pattern turns much more bullish (1-2, 1-2 to the upside from this morning's low) and would have me looking to SPX 1400 from there. A drop back below this afternoon's late-day pullback (SPX 1339, ES 1339.75) would negate that bullish wave count and put it back in a corrective wave structure for the bounce. So that's your key level for the downside if you're long the market.

Keene Little : 1/28/2008 4:03:54 PM

Was that a PPT move to give the stock market a strong finish with the market-on-close orders? Could it have been designed to make for a positive finish for the day so that the president doesn't have to contend with a negative day on the stock market? Pure speculation on my part of course.

Linda Piazza : 1/28/2008 4:03:44 PM

The SPX is closing just a little above Thursday's close, reversing Friday's losses. The body of today's candle is entirely inside Friday's, though, and today's close above the daily 10-sma is only slightly above that moving average. This is good as far as it goes, but it just doesn't go too far yet. I noted last Wednesday morning that I thought I had seen some signs of accumulation on Tuesday, but was it accumulation for a short ride higher only, into the FOMC meeting, with positions to be abandoned before then? The possibility exists, so don't marry more risk than you're willing to live with.

Jeff Bailey : 1/28/2008 4:04:12 PM

StreetTracks Gold (GLD) $81.77 +1.62% ... Remember! Friday's news came when Asian markets were closed and market participants eating a late dinner, or off to bed!

Jeff Bailey : 1/28/2008 4:02:10 PM

Anyhow ... sometimes I'll catch the DowJones' "unusual option" activity, get a screen capture for you, then allows for a possible "trade idea" generator. Sometimes, a security in our MM profiles shows up. Sometimes, a stock in YOUR account might show up.

1) Look at a chart

2)Look at an option montage.

3)CHECK THE NEWS to rationalize. If "no news," then be very, very, very alert.

Jeff Bailey : 1/28/2008 3:57:23 PM

Terminology: "Sold Long" means a trader that was long, "sells long" when the position is closed.

"Sold NAKED" means a trader has no position in the YRCW is actually "selling-to-open" a position in the options.

Jeff Bailey : 1/28/2008 3:54:58 PM

Based on todays YRCW "news," and PnF chart, I'd have to think YUX-BD are being "sold long, or NAKED" If they are being "sold NAKED" then tomorrow, OI should RISE. If "sold long," then OI should fall.

YUX-NC have been net-sold (Up:12 vs. Dn:25 on CBOE), so some bias to "buy $15.00 less premium received)

Linda Piazza : 1/28/2008 3:54:05 PM

The SPX reached past 1343 and punched just above the daily 10-sma. Bulls would like to see the SPX hold above 1351 into the day's close, closing above that moving average. Keltner channels still suggest potential resistance near 1356 on 15-minute closes.

Jeff Bailey : 1/28/2008 3:50:06 PM

YRC Worldwide Posts 4Q Loss on Charges ... AP Story Link

Consensus was for EPS of $0.54 on Revenue of $2.29B

Jeff Bailey : 1/28/2008 3:48:26 PM

StreetTracks Gold (GLD) $91.73 +1.58% ... (see Friday's news)

Keene Little : 1/28/2008 3:48:03 PM

Don't get sucked in on the long side here. While it could certainly continue right into the close, there's something manufactured about this rally leg and I'm thinking it's going to collapse back down. But watch DOW 12400 since a rally that can hold above there could stick. SPX will hit its downtrend line from Dec 26th near 1355.

Jeff Bailey : 1/28/2008 3:47:49 PM

YRCW Link ... and today's OptionMontage Link

Highlight the "unusual" and I've quickly noted ALL exchange volume from my Level II (source: Ameritrade)

And of course ... check today's "news" and rationalize.

Keene Little : 1/28/2008 3:43:25 PM

Someone is obviously jerking the bears around--these quick spikes up with program buying is playing havoc on the shorts.

Linda Piazza : 1/28/2008 3:41:52 PM

The RUT did fall back all the way toward the 694-695 zone as the Keltner setup suggested was possible. Now the RUT needs to sustain values above 697-698 again as a first step in improvement. It's charging up toward a retest of the 701.50 resistance as I type.

On a drop much below 693, it risks setting up a downside target near 690.

Keene Little : 1/28/2008 3:39:03 PM

Any push back up to a new daily high now would suggest we're into a larger upward correction before turning back down below today's low. Short agains this afternoon's high is the right place to be but obviously that's a very wide stop. With the current price volatility it's extremely difficult to keep relatively tight stops without having them get hit left and right.

Assuming for now that the high for the bounce is in, two equal legs down for SPX from Friday's high is at 1304.72. Like the COMP, a parallel down-channel from Friday's high points to tomorrow afternoon for that level to be reached. A faster decline would indicate something potentially more bearish than just a pullback within a larger consolidation.

Jeff Bailey : 1/28/2008 3:34:55 PM

How about YRCW $16.17 -14% ... see "unusual put $15 and $20 call" has me thinking "strangle, or spread"

Jeff Bailey : 1/28/2008 3:29:56 PM

We know what the "news" is on MCD today, so let's look at another one.

Jeff Bailey : 1/28/2008 3:29:08 PM

Let's look at the list real quick. Let's look to see if there's a mover. Then look at a chart. Then look at the option montage.

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

Email Question: ... Jeff, what's the source is of the unusual option activity table you posted in the market monitor?

Also, ask how can a person can tell from the table whether the calls and puts are being bought or sold?

Jeff's Reply: ... The source was my DowJones Newswire feed. From the table, we can NOT tell if they are being bought or sold.

However, I have tried to teach traders how to look at their QCharts option montage with UPTickVol and DNTickVol indicators turned on. While QCharts' feed is only for CBOE daily volume/activity, it is a starting point.

Keene Little : 1/28/2008 3:26:56 PM

The COMP has broken below the mid-day low which leaves the rally off this morning's low as a corrective 3-wave move. The correction could get larger but it means an eventual break below this morning's low and then it will be time to calculate some downside objectives. For now, two equal legs down from Friday's high gives us 2247 which could get hit tomorrow afternoon if it stays inside a little down-channel before it's ready for another bounce back up: Link

Linda Piazza : 1/28/2008 3:23:42 PM

This SPX decline was now enough to line the mid-sized Keltner channel up equally on either side of the central basis line, too. I mentioned Friday that it looked as if the channels might be trying to align themselves into a pre-FOMC consolidation setup and that's where it's getting to be. As of right now, the black channel is flattening with support just under 1325 and resistance just under 1365, and anything between those numbers now looking more like chop. You need to do what you have to do as far as following stops, etc., but I'm counseling that you not jump to too bearish of conclusions with a drop toward that support and therefore jump into more bearish risk than is wise for your account or jump to too bullish of conclusions if the SPX climbs toward 1356 and therefore take on too much bullish risk. The setup on the Keltner charts is fairly neutral for now, although support just underneath the SPX's current level may be enough to bounce it again, perhaps up toward 1343. That's not a given, though.

Jeff Bailey : 1/28/2008 3:12:52 PM

03:00 Internals found at this Link

Linda Piazza : 1/28/2008 3:11:50 PM

The advdec line did not violate support on that pullback, but the outcome isn't yet known. The supposed breakout and setting of a new upside target is tentative at best. Here's a chart: Link

Keene Little : 1/28/2008 3:09:20 PM

A break below this afternoon's low at SPX 1341.48 would be heads up that we're likely on the dark red price path that I showed on the 60-min chart.

Linda Piazza : 1/28/2008 3:05:07 PM

Next Keltner support for the SPX is from 1337.88-1340. Currently, it looks stronger than resistance, suggesting that unless there's a strong whoosh down, the SPX is more likely to keep on testing resistance than to drop far beneath that 1337.90-ish level. That's not a lot of evidence and it's a bit subjective, but that's what it suggests so far.

Linda Piazza : 1/28/2008 3:03:24 PM

As Keltner charts predicted, the RUT is falling back from its 701-ish resistance test. If the RUT can't bounce, next support is now 693.60-695.00.

Keene Little : 1/28/2008 2:59:37 PM

The sharp little selloff is indicative of more distribution today and not the sign of a coming rally leg.

Keene Little : 1/28/2008 2:46:14 PM

If SPX can rally above its downtrend line from Dec 26, currently near 1356, then I think there's a good chance the rally could develop some legs. The RUT could lead the way here. The wave pattern supports the idea that we could then see another leg up to the top of its parallel down-channel for price action since the October high. Two equal legs up from last week gives us an upside target just above 1400 (shown in pink): Link

But if the current bounce fails and drops back below today's low near 1322 then we should see a continuation lower to possible support around 1300 (dark red). Much below 1290 would mean we're likely heading to new lows (grey). Currently the price action seems choppy and weak to the upside and is giving me the impression it's an ending pattern and that we'll see the bounce fail.

Bottom line is that price action in both directions is choppy enough to leave open several possibilities. This is when the trend lines and channels can be very helpful in identifying the trend. At the moment I'd say we're trendless (from a shorter term perspective).

Linda Piazza : 1/28/2008 2:41:59 PM

The advdec line is still pushing higher.

Jeff Bailey : 1/28/2008 2:41:40 PM

If it were my observation that when 11/27/07 large block benchmark of $129 being broken had that level becoming resistance. Then it would be my observation that the break above 1/18/08 large block benchmark of $121 is IMPORTANT near-term support.

Jeff Bailey : 1/28/2008 2:39:56 PM

DIA $123.22 +0.84% ... Daily interval bar chart with those two (2) LARGE BLOCK intra-day observations benchmarked. Quarterly Pivot retracement and conventional. Link

Linda Piazza : 1/28/2008 2:39:32 PM

The RUT is current testing the descending trendline off the Thursday and Friday highs. You need to see the RUT sustain values above the current 701.80-ish level to believe that it's broken through that resistance, and of course then need to see it above Thursday's 704.06 high. The RUT sometimes does overrun Keltner levels, but it's testing Keltner resistance, too, while testing that trendline. The next potential resistance above this, if the RUT clears this, is just under 710 on the 15-minute chart, but it's not truly cleared yet. The chart setup looks as if it's possible the RUT could get pushed back toward 697-698 or even 693.50-694.50.

Linda Piazza : 1/28/2008 2:36:07 PM

The presence of the SPX daily 10-sma between the SPX's current price and that 15-minute Keltner target mentioned in my 2:33:37 post should be noted. The 10-sma is currently between 1350-1351, as noted in my 1:26:15 post.

Linda Piazza : 1/28/2008 2:33:37 PM

The SPX currently has a potential upside target of about 1356.60, with that target perhaps remaining viable as long as the SPX maintains 15-minute closes above 1344.08 and maybe even above 1339.50. You should anticipate possible resistance at that level. This is not a promise of a reach toward that target and is not a trade entry suggestion.

Jeff Bailey : 1/28/2008 2:32:39 PM

DIA's MACD on Daily intervals trying to hook upward.

Jeff Bailey : 1/28/2008 2:31:40 PM

Hey! DIA's QRTLY 19.1% pivot retracement at $124.82. Conventional 38.2% retracement at $125.85.

Jeff Bailey : 1/28/2008 2:30:26 PM

Hey ... today's DIA low was $121.00 on the button. That's right at that 01/18/08 large block trade. ... Hmm ... $129 on 11/27/08 and $121 on 01/18/08. Mid-point would be $125 if my math is correct.

Keene Little : 1/28/2008 2:30:21 PM

The rising wedge pattern for gold, with an expectation for a little higher push, fits nicely with the daily chart I showed earlier ( Link ) as this 60-min chart shows trendline resistance grouping around 92.70 tomorrow so that's what I'm hoping to see set up for the shorting opportunity: Link

If the uptrend line from last week breaks (currently near today's pullback at 91.40) then that will be the signal that the top is in and the rising wedge should get retraced quickly (so back down to 87 before much of a bounce).

Linda Piazza : 1/28/2008 2:24:24 PM

The advdec line has shoved the resistance it's testing higher but it hasn't really broken through that resistance. These Keltner lines are dynamic and will move a little in the direction of price (or value, in this case) movement. Because the numbers associated with the advdec line are so big and the line changes so rapidly, the location of the Keltner lines can change rapidly, too. So, for now, the resistance is being tested but not yet broken. A pullback toward 1250 or so can't be ruled out, but equity bulls would then hope to see the advdec line bounce again, if that decline did happen. The advdec line is now at 1505.

Jeff Bailey : 1/28/2008 2:23:04 PM

Yahoo! Inc. (YHOO) $20.89 -4.78% ... earnings tomorrow.

Jeff Bailey : 1/28/2008 2:22:07 PM

NASDAQ-100 Heatmap Link ... Breadth positive at 74:26

Jeff Bailey : 1/28/2008 2:20:06 PM

DIA $123.09 +0.75% ... breadth positive at 26:4

Jeff Bailey : 1/28/2008 2:18:44 PM

Dow Jones' READERS RESPOND

Stimulus Plan Not Enough - In response to our question about the U.S. stimulus plan, Thomas La Porte, senior vice president at the La Porte Wealth Strategies Group of Raymond James, says tax credits to buy American-made cars and trucks would have made more sense.

Jeff Bailey : 1/28/2008 2:17:43 PM

With Eye On US Economy, OPEC To Hold Output Steady ... WSJ- Despite calls by the Bush administration and European governments for OPEC to pump more oil, the cartel may actually look to cut output this spring if signs continue to point to increasing oil supplies and diminishing demand.

Jeff Bailey : 1/28/2008 2:15:50 PM

TREASURY MORTGAGE PLAN SEEN AIDING FEW

DJ- The Center for Responsible Lending says the U.S. Treasury Department's plan to help homeowners modify their mortgages will only help 3% of subprime borrowers with adjustable-rate mortgages.

Jeff Bailey : 1/28/2008 2:14:51 PM

BUSH WILL SAY TO IGNORE FUTURE EARMARKS

In State of the Union address, president will order federal agencies to ignore any future earmarks included in committee report language, but not in spending legislation. The executive order won't apply to a fiscal 2008 omnibus spending measure.

Jeff Bailey : 1/28/2008 2:14:01 PM

MCDONALD'S 4Q NET UP AMID SOFT US SPENDING

DJ- Fast food chain earns $1.27 billion, or $1.06 a share, amid strong international same-store sales despite 'softer' domestic consumer spending that helped result in flat December U.S. same-store sales.

MCD $50.63 -6.41% ... #11 most heavily weighted INDU/DIA/YM component.

Linda Piazza : 1/28/2008 2:13:53 PM

The RUT is surging up toward the descending trendline off Thursday's and Friday's highs. (Did I say Wednesday and Thursday earlier?) I would want a RUT 15-minute close above 701.70 and then sustained values above that before I believed the breakout attempt. There's a chance of strong resistance there that pushes the RUT back toward 696 or even 693. I'm watching the RUT because it tends to be a leading index, especially when we're considering the impact of rate changes on equities. The RUT is at 699.84 as I type.

Keene Little : 1/28/2008 2:13:31 PM

With the type of pattern that gold has been in since the Jan 22nd low (looks like it could be a rising wedge with accompanying bearish divergences at the new highs), we could be in the last leg of it with an upside projection at 931.30 for YG today's high so far is 929.80 but looks like it will get at least one more push to a new high). The top of its parallel up-channel for the rally from August is close to 936 so that's a resistance band to watch for a top to form. I'm watching both the euro and the dollar to see if the Jan 15th highs and lows hold for each of them to help confirm a top for gold.

Jeff Bailey : 1/28/2008 2:12:25 PM

HALLIBURTON 4Q NET TOPS VIEWS, REVENUE UP 19%

DJ- Halliburton 4Q earnings rise 4.9% to $690 million, or 75c a share, better than analysts' projections of 69c. Revenue climbs 19% to $4.18 billion, compared with analysts' views of $4.06 billion.

HAL $33.71 +1.87% ...

Jeff Bailey : 1/28/2008 2:10:11 PM

US 2-year Notes: 2.237%; 61.43% At High

DJ- The U.S. Treasury awarded $24.00 billion in two-year notes at Monday's auction at a high rate of 2.237%.

The Treasury received bids totaling $55.92 billion and accepted $24.00 billion, including $597.06 million of non-competitive tenders, up from $525.06 million in non-competitive tenders accepted at the previous two-year note auction Dec. 26.

The Treasury received no bids from foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 2.33, Treasury said.

Tenders submitted at the high yield were allotted 61.43%.

The dollar price was 99.782126 and the coupon rate was set at 2.125%, or 2 1/8%.

The median rate was 2.200%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 2.150%.

Accepted indirect bids for the two-year note were 19.3% of the total, down from 26.0% in December.

The high rate was down from 3.285% at the previous two-year note auction. The high rate was the lowest since 1.520% at the two-year note auction March 24, 2004.

The issue is dated Jan. 31, 2008, and matures Jan. 31, 2010.

The CUSIP number on the two-year notes is 912828HP8.

Linda Piazza : 1/28/2008 2:10:04 PM

TRIN is 0.71, so currently on the side of the bulls. It looks possible that the TRIN could either find support near 0.65, which it jsut tested, or perhaps drop all the way to about 0.47-0.50, where it might then find support. It looks headed down to the lower support level--weighing in on the bullish side--until and unless it begins closing 15-minute periods above 0.79-0.80.

Linda Piazza : 1/28/2008 2:05:43 PM

The advdec line tests Keltner resistance near 1455 on 15-minute closes. This is a lower level of resistance than that which topped out the advdec bounces on Wednesday afternoon and Friday mornings. Why is this important? The advdec line probably needs to break out and head toward the next level of resistance if prices are going to break out again to the upside, although that's not always necessary.

Right now, the advdec line appears to need either sideways consolidation or else a dip toward 1180 or so to regroup. A surge higher can come out of nowhere, of course, especially this time of day, so watch, but for now, sideways or a small dip looks the most likely from the setup. A variation from that scenario might give you a heads-up to something important happening. The advdec line is at 1318 as I type.

Linda Piazza : 1/28/2008 1:40:48 PM

Nearest SPX support is now at 1341.47 on 15-minute closes. This is the 9-ema on that chart, and it is rising slightly. We're entering a typical stop-running time of day when big money returns from lunch and tests either support or resistane to see if they'll hold before the afternoon direction is determined. Nearest resistance is 1346.45 on 15-minute closes. The SPX is now at 1343.54 as I type. I don't see a strong breakout shown yet, but bulls are at least cheered by today's climb. The 15-minute candles are beginning to show small upper shadows, though, as sometimes happens before a downturn to test support or a sideways trade into rising support. There's no strong prediction on the chart that shows a more neutral stance than anything else.

Linda Piazza : 1/28/2008 1:31:26 PM

The SPX's daily 10-sma is now at 1350.36. The SPX pierced this average on 1/25/08 but did not close above it that day. It hasn't closed above it since 12/31/07. So, we should suppose that could be potential resistance. If you're in bullish positions, you should have an idea how you'll treat that area as it's tested, if it is.

Linda Piazza : 1/28/2008 1:26:15 PM

Just a heads up: at about 701.50, the RUT will be testing a descending trendline off Thursday's and Friday's highs. The RUT is at 697.14 as I type.

Jeff Bailey : 1/28/2008 1:23:11 PM

SENATE DEMOCRATS TO ADD REBATES TO STIMULUS

DJ- Senate Democrats will move to add to a $150 billion economic stimulus package rebates for senior citizens living off Social Security and an extension of unemployment benefits.

Keene Little : 1/28/2008 1:18:10 PM

Assuming the current bounce can continue I'm watching for where resistance might be. The bounce off this morning's low would achieve two equal legs up (the end of the first leg would be the one at 11:10 because of the kind of sideways expanded flat correction that it appears to be). That gives us SPX 1354 as an upside target.

But a little lower is the 62% projection for the 2nd leg (1347) which is between a 50% and 62% retracement of the decline from Friday, for a potential resistance zone of 1346-1351. The 30-min 100/130 moving averages at 1344.50/1352.13 offer up potential resistance. And then on top of those is the downtrend line from Dec 26th, currently near 1358. So there's clearly some room to run but the bulls need to get through several layers of resistance. Unfortunately the wave pattern is not clear enough yet to help.

Jeff Bailey : 1/28/2008 1:17:19 PM

01:00 Internals found at this Link

11:00 5-day NH/NL ratios were 13.00% and 18.6%.

And Friday's 01:00 as the "come together" observation was made. Link

Jeff Bailey : 1/28/2008 1:08:36 PM

BIX.X 272.79 +1.95% ... stronger than I would have expected. Last few months had sellers quick to take advantage of such handsome gains.

Jeff Bailey : 1/28/2008 1:07:47 PM

QLD $73.23

Jeff Bailey : 1/28/2008 1:07:31 PM

QQQQ $44.27

Jeff Bailey : 1/28/2008 1:07:18 PM

SPY Alert! $134.47 ...

Linda Piazza : 1/28/2008 12:57:49 PM

The SPX is just chopping around, which may be relief enough in itself for some traders. Nearest Keltner resistance is at 1345.18 on 15-minute closes. Support is layered all the way down to 1325.51, but with strongest support currently at 1336.73 or perhaps 1334.13 on 15-minute closes. Barring a strong push down during the lunchtime lull below the nearest Keltner support, it looks as if the SPX may be due for a time of testing resistance without much evidence that it will break out. The 9-ema is flattening now along the central basis line of the Keltner channels I watch, as is the 45-ema.

Jeff Bailey : 1/28/2008 12:56:32 PM

StreetTracks Gold (GLD) $91.63 +1.47% ... bulls could take some profits off the table, monitor DXY. GLD's WEEKLY Pivot levels are ... $83.78, $87.06, Piv= 89.06, $92.33, $94.32.

Jeff Bailey : 1/28/2008 12:54:43 PM

US Dollar Index (DXY) 75.52 -0.58% (30-min. delayed) ... hovers at MONTHLY S1.

Keene Little : 1/28/2008 12:49:11 PM

Price action in equities makes short term direction unclear. I could argue equally strongly for a continuation of the bounce directly from here or another leg down in the pullback. When I start arguing with myself is when I put the mouse down and wait for clarity.

Jeff Bailey : 1/28/2008 12:30:23 PM

Unusual Option Activity Link

Keene Little : 1/28/2008 12:24:57 PM

At the same time GLD has pressed up against the trend line along highs since November with a little more upside potential to the top of a parallel up-channel from the August low, currently near 92.60. Link

Keene Little : 1/28/2008 12:21:45 PM

I continue to watch the US dollar for some clues for what could happen with gold and other commodities. The dollar has pulled back since last week's high and that has given gold a boost. The uptrend line from November is currently near 75.40 and the dollar is now close to that level. A break below the 75.20 low on Jan 15th would be bearish the dollar and bullish gold. But first I'm watching to see if support at the uptrend line holds. Link

Jeff Bailey : 1/28/2008 12:12:52 PM

Chicago Fed Midwest Mfg. Index edges up 0.1% in December Vs. November.
November Mfg. Index Revised Down To 104.6 Vs. 105.0
Regional Auto Output Strongest Among 4 Sectors
Steel Production Only Sector To Drop In December.

Jeff Bailey : 1/28/2008 12:10:04 PM

12:05 Market Watch at this Link

Jeff Bailey : 1/28/2008 12:05:59 PM

Note: Conventional retracement on QLD from 10/31/07 high to recent low would have its 19.1% at $75.65.

Jeff Bailey : 1/28/2008 12:04:43 PM

QQQQ $44.18 ... QLD $72.92

Linda Piazza : 1/28/2008 12:04:27 PM

Of course, all can spot a potential H&S on the SPX's 15-minute chart, forming since Wednesday, although chartists might differ as to whether the right shoulder is still being formed or whether the SPX is bouncing up in an invalidation of the formation. Friday afternoon, I began questioning another possible scenario. Here's a chart: Link Just keep this possible scenario in mind before you invest too heavily one theory or another of where the SPX might go next. It's a little too early for the SPX to be settling into the pre-FOMC kind of holding pattern, but not impossible. You need to see a stronger push up or down to break that pattern.

Jeff Bailey : 1/28/2008 12:02:40 PM

US 3-Month Bills: 2.335%; 82.99% At High

DJ- The U.S. Treasury awarded $23.00 billion in three-month bills at Monday's auction at a high rate of 2.335%.

The Treasury received bids totaling $54.70 billion and accepted $23.00 billion, including $1.59 billion of non-competitive tenders. The dollar price was 99.409764 and the investment rate, or bond-equivalent return, was 2.388%.

The Treasury also sold $100.00 million of bills to foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 2.38, Treasury said.

Tenders submitted at the high yield were allotted 82.99%.

The median rate was 2.290%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 2.260%.

The Federal Reserve purchased $7.69 billion in bills for its own account in Monday's three- and six-month bill auctions. When the auction was announced, the Fed held $12.69 billion of maturing bills.

The bills awarded to the Federal Reserve are in addition to the public offering amount.

Accepted indirect bids for the three-month bill were 23.7% of the total competitive amount, up from 18.0% in last week's three-month bill auction.

The high rate was down from 2.370% at the previous three-month bill auction.

The high rate was the lowest since the rate of 2.320% at the three-month bill auction on Jan. 24, 2005.

The issue is dated Jan. 31 and matures on May 1.

The CUSIP number on the three-month bill is 912795E23.

Jeff Bailey : 1/28/2008 11:49:36 AM

QLD Fact Sheet (12/31/07) Link ... Remember this is a 200% leveraged security. So, 1/4 position QLD = 1/2 position QQQQ.

Jeff Bailey : 1/28/2008 11:43:45 AM

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

IF $10k=Full Position, then 1/4=$2,500. So ... $2,500 / $73 = 34 shares QLD.

Linda Piazza : 1/28/2008 11:34:10 AM

The TRAN also isn't building convincingly on its bounce off its low of the day, as cheering to bulls as it might have seemed to have the TRAN bounce from its low. As I type, it's moving up to a new high of the day, but it needs to move above about 4535 or so before the gains represent anything other than chopping around within Friday afternoon's chop zone. The TRAN is at 4489.04 as I type.

Linda Piazza : 1/28/2008 11:27:59 AM

I mentioned earlier that the SPX hadn't convincingly broken free of resistance on the 15-minute chart. Now we have the ongoing test of the slightly rising 9-ema on that chart. That average now is at about 1336.40. Bulls want to see a strong bounce from this moving average, strong enough to keep the average rising.

Keene Little : 1/28/2008 11:24:19 AM

After breaking its downtrend line from Friday morning's high, SPX could pull back for a retest of it (currently near 1330) before ideally getting another bounce to a new high today in order to complete a larger a-b-c bounce to correct the decline. So watch for potential support with that kind of trend line test for an opportunity to try the long side.

Jeff Bailey : 1/28/2008 11:16:41 AM

11:00 Internals found at this Link

Linda Piazza : 1/28/2008 11:13:10 AM

My broker is al_rting me, saying, "The industry quote consolidator (SIAC) is experiencing technical difficulties with quotes. NBBO is not in effect, please check your orders and use market orders with care."

Linda Piazza : 1/28/2008 11:04:57 AM

The SPX closed just above next 15-minute resistance at about 1337.50, but the close wasn't enough higher to be conclusive. So far, though, there's some slight improvement in tenor, but now the SPX needs to climb far or fast enough to turn its 15-minute 9-ema higher again and keep it turning higher while it bounces from it on pullbacks. That's now at about 1335. The SPX is at 1340.07 as I type, facing next resistance at 1341.98 on 15-minute closes.

Jeff Bailey : 1/28/2008 10:57:52 AM

Swing trade long alert! ... for 1/4 position in the Ultra QQQ Proshares (AMEX:QLD) at the offer of $73.00. Stop goes $68.00. Target $80.00

Linda Piazza : 1/28/2008 10:57:43 AM

The TRAN isn't exactly zooming higher, so bulls weren't able to capitalize on that quick bounce off the low of the day. Neither have bears been able to drive the TRAN back toward that low. Standoff.

The advdec line has broken resoundingly above the broadening formation at the bottom of its decline off Friday's high. That's good news over the short term, at least.

Jane Fox : 1/28/2008 10:54:45 AM

OK looks like we made it to full profit. That is a good way to end the day. C U all 2morrow.

Keene Little : 1/28/2008 10:53:11 AM

First potential resistance level for SPX is at a 38% retracement which coincides with Friday afternoon's bounce high just above 1340 (ES 1341 is 38%).

Keene Little : 1/28/2008 10:48:34 AM

The quick spike up from a buy program and some short covering stopped as quickly as it began. Obviously the bulls would like a little follow through here (could get a pullback first). If the rally progresses a little further then I'll be looking for a Fib retracement of Friday's declone for a setup to get short. I'm just not sure enough about the upside to recommend a long play (or the short side for that matter). I'm waiting for something to set up rather than caught up in potential chop and whipsaw.

Linda Piazza : 1/28/2008 10:44:24 AM

The SPX has successfully erased that potential downside target on its 7-minute chart, at least for the time being, by producing closes above the 9-ema. It was down near 1328 but has now risen to 1330.95.

Rolling back up to the 15-minute chart, I see that the SPX needs to sustain values above about 1337.50 to begin breaking free of the resistance band that it's been fighting since mid-afternoon on Friday. Until then, this is just chop between support and resistance.

Jane Fox : 1/28/2008 10:39:59 AM

Well it looks like the movers will be able to make it today so I am going to sign off here. You can raise that stop to 12198. alert

Jeff Bailey : 1/28/2008 10:31:45 AM

DIA 122.14 -0.04% ... ditto.

Jane Fox : 1/28/2008 10:31:43 AM

Raise stop to 12178. alert

Jeff Bailey : 1/28/2008 10:31:23 AM

SPY $133.35 +0.24% ... if it were a prairie dog, kind'a out sunning itself. Checking things out.

Jeff Bailey : 1/28/2008 10:29:38 AM

Semiconductor HOLDRs (SMH) $28.00 -0.07% ... "prairie dogged" its WEEKLY Pivot just after the open. Then went back into a hole. See if they come out and make a run for it.

Jane Fox : 1/28/2008 10:28:52 AM

Taking heat on this trade but today I'm afraid that is the name of the game.

Jane Fox : 1/28/2008 10:28:20 AM

The Matrix is very similar to Ninja Trader's SuperDom - it just does not have all the functionality.

Jeff Bailey : 1/28/2008 10:28:14 AM

QQQQ $41.95 -2.46% ... still below its conventional 19.1% retracement. Session low has been $43.58, so undercut its WEEKLY Pivot.

Jane Fox : 1/28/2008 10:27:33 AM

You put an order in as OSO (order sends order) and once triggered it places the stop and target at a preset number (as an OCO) then you just have to go in and change the stop and limit. But you know you have a stop in place if something should happen as soon as you get triggered.

Jeff Bailey : 1/28/2008 10:26:28 AM

Not much on the PREM.X side though.

Jane Fox : 1/28/2008 10:26:00 AM

Now long YM at 12211 with a stop at 12159 and target at 12263. If any of you use Tradestation they have the really cool item called the Matrix that almost does the trading for you.

Jeff Bailey : 1/28/2008 10:25:52 AM

Buy program? WEEKLY Pivot?

Keene Little : 1/28/2008 10:24:58 AM

Nice little buy program across the board. Not sure what caused it.

Jane Fox : 1/28/2008 10:24:50 AM

Target is the 1:1 risk to reward ratio.

Jane Fox : 1/28/2008 10:24:28 AM

There is not a real clear spot for the stop however so I will put it at 12159.

Jane Fox : 1/28/2008 10:23:43 AM

I see a long YM at 12211. alert

Jeff Bailey : 1/28/2008 10:21:49 AM

To trade long the SPY, my mind's eye would have me thinking we want to see financials firm, then have either tech, or energy bid.

Jeff Bailey : 1/28/2008 10:17:10 AM

SPY 60-min. intervals ... With conventional retracement ($126.0, 132.02, 141.76) and added WEEKLY Pivot retracement Link

Linda Piazza : 1/28/2008 10:13:25 AM

The advdec line (advance/decline line) has a well-defined broadening formation on its 15-minute chart, one that's been forming since about 1:45 Friday afternoon. I'm trying to remember if I've seen one like this on the advdec line at the bottom of a decline, and I can't remember a similar instance. When seen on equities, such broadening formations are indicative of emotion-based trading, and I'd guess they're indicative of emotion-based trading decisions, too, on the advdec line. Broadening formations make it difficult for us to discern when support or resistance have been breached. Perhaps you don't believe in support or resistance on something such as the advdec line, but I do. Anyway, it currently looks as if the advdec line would have to climb above about +150 or drove below about -1200 to break that formation.

Jeff Bailey : 1/28/2008 10:07:27 AM

If SPY can hold WKLY Pivot support, then we'd look for STRENGTH above $134.47.

Linda Piazza : 1/28/2008 10:07:26 AM

Rolling down to the 7-minute chart on the SPX, I see a potential downside target at 1317.15. That's potential short-term support, too. The SPX is still trying to steady at Keltner support on the 15-minute chart, and there's still lots of time left in the current 15-minute period, but I thought I ought to mention that potential downside target now in place. The SPX needs to sustain values above about 1328.50 to erase that target, so on this current punch higher, bulls want to see the SPX get above that level and stay above it.

Jeff Bailey : 1/28/2008 10:06:38 AM

For you MACD traders, check out SPY on 60-minute interval.

Jeff Bailey : 1/28/2008 10:05:47 AM

SPY $132.40 -0.48% ... sets up for test of WEEKLY Pivot and overlapping 19.1% retracement.

Jane Fox : 1/28/2008 10:04:51 AM

2007 median new-home sales price up 0.2%

Dec. median new-home sales price down record 10.9%

Dec. new-home inventory 9.6-months, 26-year high

2007 new-home sales fall to 774,000, 11-year low

Dec. new-home sales below 645,000 pace expected

Dec. new-home sales fall 4.7% to 604,000 pace

2007 new-home sales fall record 26.4%

Jeff Bailey : 1/28/2008 10:04:16 AM

Anglo Gold Ashanti (AU) $41.84 -2.72% ... (see Friday's MM)

Jeff Bailey : 1/28/2008 10:03:18 AM

Apex Silver (SIL) $15.16 -0.32% ... just sitting there.

Jeff Bailey : 1/28/2008 10:02:31 AM

iShares Silver (SLV) $165.50 +0.92% ... that's a new 52-weeker.

Jane Fox : 1/28/2008 10:02:11 AM

New home sales out and it is not good I will get the details as soon as I can. 12 year low

Jeff Bailey : 1/28/2008 10:01:33 AM

StreetTracks Gold (GLD) $91.14 +0.93% ... that's a new 52-weeker.

Keene Little : 1/28/2008 9:59:04 AM

The price pattern on the techs and small caps supports the idea that we could get a bounce that corrects the decline from Friday. But the impulsive decline means a bounce will be followed by another leg down. It's just not clear yet whether we'll get the bounce or another drop from here. Those overnight lows are like a magnet.

Linda Piazza : 1/28/2008 9:57:10 AM

The TRAN did its trickster thing (see my 9:39:29 post) and has immediately popped back above the neckline of its H&S formation. That's good, as far as it goes. Now the TRAN needs to continue climbing, well above the right shoulder level, to invalidate its H&S and give SPX, OEX and Dow bulls some support. The TRAN is now at 4474.25, with the right shoulder area extending all the way to about 4535 or so.

Jeff Bailey : 1/28/2008 9:56:26 AM

WEEKLY, MONTHLY, QRTRLY Index Pivot Matrix found at this Link

Jane Fox : 1/28/2008 9:52:28 AM

Internals are improving and you can just feel the buying starting.

Jane Fox : 1/28/2008 9:51:07 AM

Both AD line and AD volume are improving but still below 0.

Linda Piazza : 1/28/2008 9:50:32 AM

SPX Keltner support held on the first 15-minute close, but as I noted in an earlier post, resistance looks stronger than support. It will require either a strong surge (backed by volume) or else a period of chopping around to soften resistance and allow the SPX to climb, if it's going to do so. Until either that surge arrives or else resistance softens, we should expect more support tests. Support now extends down to 1324.98 on 15-minute closes, but bulls would rather the 1327.50-ish support hold on 15-minute closes because that would improve the Keltner outlook. Well, they'd rather have the surge higher, but you know what I mean.

Keene Little : 1/28/2008 9:42:41 AM

Yes Jane, since you and I are both feeling bearish about gold here, it means it's going to rally to $1000 (wink).

Jane Fox : 1/28/2008 9:40:23 AM

VIX making new daily highs supporting the bears.

Jane Fox : 1/28/2008 9:39:48 AM

AD line is -500 so the bears have the ball but do not have field position.

Linda Piazza : 1/28/2008 9:39:29 AM

The TRAN is pushing down through the neckline of a H&S on its 15-minute chart. The TRAN can sometimes seemingly confirm these formations only to rise swiftly and immediately invalidate them. The TRAN is at 4445.42 as I type, with the neckline at about 4460, depending on how it's drawn. Watching what happens with the TRAN might give us some further indication of how much carry through the bears can produce this morning.

Linda Piazza : 1/28/2008 9:36:26 AM

SPX Keltner-style resistance is layered from about 1335.25 up to 1341.45, so it looks as if it will take either a strong surge upward or else a period of time in which the SPX chops around to push through that resistance. I believe that the SPX has to begin producing sustained 15-minute closes above 1339 before any real improvement occurs. Currently, resistance looks a bit stronger than support, so we might expect at least continued support tests if not a failure of support. It still looks possible, as it did Friday, that the SPX is setting up in a neutral mode on the Keltner charts.

Jane Fox : 1/28/2008 9:36:03 AM

This is a "red letter day,"Keene and I agree Gold. Smile

Keene Little : 1/28/2008 9:34:20 AM

Gold has pushed a little higher and is currently testing the Friday morning high. It's showing a negative divergence, so far, against that high but it looks like it could push a little higher. If it were to suddenly break down and drop below 913 that would indicated it has made its high.

Linda Piazza : 1/28/2008 9:32:20 AM

SPX futures closed a little below fair value, but the overnight action showed more vulnerability than the closing values did. As of the close Friday, the SPX had next potential Keltner-style support extending down to 1326.81 on 15-minute closes. Let's see if that holds.

Jane Fox : 1/28/2008 9:31:53 AM

Oil has given us a very good idea where support is and as long as we are above this support I am bullish on crude. Link

Jane Fox : 1/28/2008 9:25:30 AM

Gold's rally off 855/oz. is not supported by the MACD so I think I still have a chance of winning my bet. I have a bet with a fellow from my gym that Gold would hit 850 before it hit 1000. The low of 855 was not close enough for me to collect on the bet so I will need another chance at it. Link

Keene Little : 1/28/2008 9:22:36 AM

Equity futures got a big recovery off their overnight lows. Unfortunately it leaves the potential for a retest of those lows during regular trading hours so remain cautious about the long side today. Either potential for what I posted last night exists at this point (SPX pullback to either 1320 or 1300 before a bounce).

Jane Fox : 1/28/2008 9:21:05 AM

I was born and raised in Calgary, Alberta so I have seen some humdinger snow storms but since I have moved to Washington (state that is) I have not seen nearly as many, which is a very good thing from my perspective. Well yesterday we had a storm here that dropped about a foot of snow on top of 1/2" of ice from the night before. Needless to say it is treacherous out there. I tell you this only because I was supposed to be moving today and was going to take the day off. I have a funny feeling our movers will not be here today so have decided to work instead. OK enough about me.

All markets broke their respective previous day lows overnight but have been able to almost rally back to overnight highs. The higher lows and highs tell me the bulls are in control but I will need to see overnight highs break before we will know for sure. Link

Market Monitor Archives