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Keene Little : 2/12/2008 1:27:20 AM

Tuesday's pivot tables: Link and Link

For a reminder, I posted at the end of the day Monday how I thought the market will play out Tuesday. An early morning dip will hopefully set up another rally and I like the alignment of the Fibs near SPX 1331 as shown on the 3-min chart: Link

On the 30-min chart that scenario is shown in dark red and calls for a continuation of Monday's rally to an upside target in the 1365 area by Wednesday: Link

If SPX drops below 1328 I'm going to be thinking it's going to stay stuck in the sideways triangle (pink) and a break below the bottom of the triangle (1322) would have me thinking more bearish (especially with a break below 1317). But until that happens I'll be looking for opportunities to test the long side on Tuesday.

OI Technical Staff : 2/11/2008 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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Jeff Bailey : 2/11/2008 7:36:39 PM

Major Global Equity Benchmarks; Currencies; USO and GLD Table that I keep at this Link

Jeff Bailey : 2/11/2008 6:29:18 PM

Closing U.S. Market Watch at this Link

20DyNet% represents % change from 1/22/08 Close. That was the inflection low day for DIA/SPY/RUT.X. QQQQ inflection low day came on 1/23/08.

Good snapshot here for those using some conventionals.

Jeff Bailey : 2/11/2008 5:46:25 PM

Vanguard Convertible (VCVSX) ... $13.42 (NAV) +0.37%.

Jeff Bailey : 2/11/2008 5:01:45 PM

AT&T: Says All Carriers Affected; Problem is RIMM Specific

Jeff Bailey : 2/11/2008 4:59:14 PM

S&P: PdVsa, Venezuela Ratings Unaffected By US Court Rule

Jeff Bailey : 2/11/2008 4:43:56 PM

QQQQ went out $44.07 ... $44.01 here.

Jeff Bailey : 2/11/2008 4:43:16 PM

Research In Motion (RIMM) $94.35 +5.17% ... darts lower $93.00. Alerts all US subscribers of severe outage.

Jeff Bailey : 2/11/2008 4:41:51 PM

ABS= Asset Backed Securities.

Jeff Bailey : 2/11/2008 4:39:29 PM

S&P Cuts 67 Ratings On 10 US CDOs Of ABS; $7.647B Affected

Jeff Bailey : 2/11/2008 4:38:43 PM

YHOO $29.90 +2.39% ... ticks $29.88 ...

Jeff Bailey : 2/11/2008 4:38:12 PM

MSFT $28.21 -1.22% ... ticks higher at $28.31.

Jeff Bailey : 2/11/2008 4:37:44 PM

Microsoft Says Yahoo Response Doesn't Change A Thing

Jeff Bailey : 2/11/2008 4:31:04 PM

Closing Internals found at this Link

Jeff Bailey : 2/11/2008 4:19:53 PM

GLD's weekly Pivot Levels (QCharts) ... $86.08, $88.52, Piv= $89.74, $92.18, $93.40.

Jeff Bailey : 2/11/2008 4:15:36 PM

Even though all ticks were $91.28-.30 prior to 04:00 mark.

Keene Little : 2/11/2008 4:14:51 PM

The pattern is set up for a pullback first thing tomorrow morning and then if it's to be just a correction to today's rally it should then be followed by a strong rally (more points than today's rally) as the larger degree 3rd wave (dark red wave iii on the SPX 30-min chart): Link

As the updated 3-min chart shows, the 5th wave today found resistance at the underside of a broken parallel up-channel and it was a small rising wedge, common for 5th waves: Link . This was the reason I was looking for only a retest of today's high before dropping back down.

Now as long as the final push back up late today wasn't part of a larger corrective pullback we should see SPX find support at or above 1331 (50% retracement) and then continue higher from there. That's what I'll be testing tomorrow morning. If 1331 doesn't hold then a drop back down to 1322-1323 would be the next likely move (as part of the larger sideways triangle shown on the 30-min chart).

Jeff Bailey : 2/11/2008 4:13:42 PM

Good gravy ... GLD $90.91 -0.09% at its close.

Jeff Bailey : 2/11/2008 4:12:30 PM

RUT.X looks to go out 699.75 +0.12% ...

Jeff Bailey : 2/11/2008 4:01:11 PM

StreetTracks Gold (GLD) $91.27 +0.29% ... same retracement for last several weeks. 1st "Bailey Wave" solid channel. 2nd "Bailey Wave" is dashed, with a $77.81 attach. Link

Keene Little : 2/11/2008 3:52:28 PM

CME looks like it should continue lower in order to complete a 5-wave move down from its high on Jan 28th. Two Fib targets of interest are near 475 (for a retest of its last low) and then around the 435 area where some Fibs line up with previous lows back in 2006. 60-min chart update: Link

As noted on the chart, if CME rallies instead and can get back above 581, it's wave-1 low, then there's further upside potential although there are plenty of resistance levels above.

Jeff Bailey : 2/11/2008 3:50:49 PM

GoldCorp. (GG) $37.21 +0.97% ...

Keene Little : 2/11/2008 3:48:04 PM

NDX has now broken its low at 2:38 so it's leading to the downside now. Expect a Fib retracement (38%-62%) of today's rally and then I'll be looking for another leg higher. It's possible today's high is it and down we go to new lows. But first I'll be testing the long side after a 3-wave pullback (tomorrow morning) to see if it works.

Linda Piazza : 2/11/2008 3:47:44 PM

Time to make end-of-day decisions. Barring a close above about 1444-1445 this afternoon, the SPX never did completely break free of resistance that was layered just above that triangle on the 15-minute chart, as the Keltner setup warned might happen. Some signs show improvement--the breaking above the triangle and the holding of the 9-ema as support on 15-minute closes, for example--but that next and still needed breakout has not yet happened as of this typing. The daily chart is likely to show another day of sideways consolidation, joining the previous three days of consolidation. A break up through 1444 and rise up to test the daily 10-sma at 1354 or even the midline of the big descending channel since last fall, now at about 1370, appears possible. Unfortunately, a drop toward 1290 looks just about as likely, with little indication as to which is the most likely.

Jeff Bailey : 2/11/2008 3:46:31 PM

DXY 76.58 -0.11% (30-min delayed) ... still under MONTHLY R1. Tight range today.

GLD threatends to close back above mid-point of original "Bailey Wave" and resulting 80.9% ($89.99) of "bull fit 38.2%.

Jeff Bailey : 2/11/2008 3:44:13 PM

Will utilize the GG April $37.50 Put (GG-PU) as possible downside protection.

Jeff Bailey : 2/11/2008 3:43:12 PM

Swing trade long alert! ... for 1/3 position in the StreetTracks Gold (GLD) at the offer of $91.29. Stop goes $88.50 to begin. Initial target $96.00.

Jeff Bailey : 2/11/2008 3:30:15 PM

March Nat. Gas (ng08h) $8.535 +2.81% ... gapped above its 200-day SMA today. 11/01/07 relative high was $8.830 with settle of $8.804.

Jeff Bailey : 2/11/2008 3:28:42 PM

DIG $86.50 +4.63% ...
DUG $43.83 -4.50% ...

Keene Little : 2/11/2008 3:28:31 PM

Back just in time to see it making an attempt at a new high. It's possible to count the 5th wave up here as an ending pattern with the overlapping highs and lows since the 2:38 low. That interpretation says it's making its final high right here so be cautious if you're long. Otherwise watch for potential topping between here and SPX 1345.

Jeff Bailey : 2/11/2008 3:27:08 PM

38.2% conventional here too.

Jeff Bailey : 2/11/2008 3:26:44 PM

CBOE Oil Index (OIX.X) $782.07 +1.58% ... comes UP to 200-day SMA.

Linda Piazza : 2/11/2008 3:22:39 PM

The good news is that the SPX has continued to hold 15-minute closes near or above the 15-minute 9-ema. That average is now at about 1337.50. The bad news is that the SPX is getting tangled up in all those resistance lines, too, and hasn't been gaining quicky enough to keep that 9-ema climbing. It's beginning to flatten. It looks now as if there might be an effort being made to challenge that overhead resistance again, but if so the SPX needs to punch to a new high for the day and then above the 1443-1444 next Keltner resitance. Otherwise, more tests of 1333-1334 support are likely.

Jane Fox : 2/11/2008 3:17:51 PM

SAN FRANCISCO (MarketWatch) -- Crude oil rose for a third session Monday, up nearly $2 to approach $94 a barrel, after Venezuelan President Hugo Chavez threatened to cut off oil supplies to the U.S. in retaliation of Exxon Mobil Corp.'s legal action to freeze Venezuela's assets.

Jane Fox : 2/11/2008 3:17:13 PM

VIX and S&P futures are in sync today and are suggesting higher highs are very likely. Link

Jeff Bailey : 2/11/2008 3:14:05 PM

03:00 Internals found at this Link

Linda Piazza : 2/11/2008 3:12:11 PM

I haven't mentioned the USDJPY previously today. That's because there was a market holiday in Japan last night. I'm not so sure that the pre-market drop in the USDJPY and subsequent choppy trading conditions have been completely trustworthy. As I type, the USDJPY is again attempting to break above 107, at 106.95 as I type. However, I'm still not certain how reliable the USDJPY's action is today due to the sharp drop while the Nikkei was closed. There was a lot of talk last night about the hawkish stance in Australia, and I think that impacted some currency actions when seen against the dollar, and perhaps the effect was exaggerated in the USDJPY due to Japan's holiday. We'll have to wait to see.

Linda Piazza : 2/11/2008 3:05:50 PM

The SPX is tangled in a skein of converging support and resistance lines on the 15-minute Keltner chart. Not only that, but RSI on the 15-minute chart is flattening just above 50, so it's not any help, either. In this market, I think down is easier than up, so unless the SPX can make some progress toward breaking through the resistance, it might need to keep retreating to support. Eventually, if it can't break through, the support may break. The SPX in fact turned down a little while I typed. Support now snakes down to about 1333 on 15-minute closes.

Keene Little : 2/11/2008 3:05:02 PM

Steeping away for about 30 minutes. Play the break of the low at 2:38 or watch for a reversal after a minor new high. Starting to drop as I type.

Jeff Bailey : 2/11/2008 3:03:21 PM

San Diego Gas & El 4.60% Pfd (BB:SDOGP) $16.50 ...

Jeff Bailey : 2/11/2008 3:00:40 PM

Southwest Gas Corp. (SWX) $28.40 -0.38% ...

Keene Little : 2/11/2008 2:56:52 PM

If SPX now drops below 1334, the last pullback at 2:38 PM, that would strongly suggest another drop back down to the bottom of its triangle pattern near 1322. Otherwise look for another push higher with an upside target near 1345 (for equality between the 1st and 5th waves in today's rally) but it could fail with a retest of today's high (5th wave = 62% of the 1st wave).

It would be an excellent time to take profits on a long and then play the short side for at least a pullback (potentially more since the bounce off last Wednesday's low could be considered complete at that point and not require a trip up to 1368).

Jeff Bailey : 2/11/2008 2:56:37 PM

DJ US Home Construction (DJUSHB) 361.32 +2.72% ...

Jane Fox : 2/11/2008 2:50:37 PM

NEW YORK (MarketWatch) -- Gold futures rose Monday, boosted by a surge in crude-oil prices, while platinum soared to a new record high on prospects for declining output in South Africa, the world's biggest platinum producer.

Gold for April delivery gained $4.40 to end at $926.70 an ounce on the New York Mercantile Exchange. On Friday, gold prices surged $12.30 to $922.30 an ounce.

"Dollar weakness was initially driving the strength, but then this amazing $3 plus spike came into crude oil and ran the gold markets higher," said Zachary Oxman, a senior trader at Wisdom Financial. "The dollar sold off and gold caught a commodity-wide bid to the upside." Crude strength is the main driver of gold prices, Oxman said.

Linda Piazza : 2/11/2008 2:50:25 PM

Keltner support that was below 1333 has now risen to about 1334.25. It's so far holding on 15-minute closes. Resistance is converging, layered thickly all the way up to about 1343.20 on 15-minute closes. The SPX needs to maintain 15-minute closes above that level before bulls breathe too easily. Actually, they should just take a few quick gulps of air because Thursday's 1347.16 high will be the next potential resistance.

Keene Little : 2/11/2008 2:49:26 PM

Could be a save in progress here if the bulls can keep this little bounce going.

Jeff Bailey : 2/11/2008 2:47:14 PM

Toll Bros. (TOL) $21.72 +2.88% ...

Jeff Bailey : 2/11/2008 2:45:56 PM

On Friday, CME's regional housing futures had San Diego May'08 at 205.20. Off recent benchmark low of 1/25/08 201.00.

Should not that Boston close of 165.00 was highest I've benchmarked.

Jeff Bailey : 2/11/2008 2:44:15 PM

Mexicali region ... Map Link

Keene Little : 2/11/2008 2:42:39 PM

This is about the time that I start saying the 5-wave count doesn't look so good. It no longer passes the "smell" test as the 4th wave correction is getting too large in time and price. Confirmation would be a drop below the top of wave "1 or A" on the 3-min chart which is the 1332.10 high at 11:20 AM (wave 4 can not overlap wave 1) as that would leave today's bounce confirmed as a 3-wave correction. Bummer for the bulls if that happens because it would mean another leg down once the triangle pattern completes.

Keene Little : 2/11/2008 2:39:32 PM

If this pullback is to be a 4th wave correction it needs to turn around right quick and start rallying again. Otherwise it will look like a trip back down to the bottom of the sideways triangle pattern. In the meantime I drew out what it could look like if we get the 5th wave up today which would complete a larger degree 1st wave of the rally leg up to a Fib projection near 1368, possibly by Wednesday (SPX 30-min): Link

Jeff Bailey : 2/11/2008 2:39:22 PM

5.1 Quake (update) ... DJ- A magnitude-5.1 earthquake struck the northern Baja California region of Mexico near the U.S. border Monday, just days after the region was hit with a magnitude-5.4 temblor, authorities said.

The quake was centered about 20 miles southeast of the border town of Mexicali at a depth of 4.3 miles, according to the U.S. Geological Survey. The epicenter was 23 miles south-southeast of the U.S. city of Calexico.

The latest temblor comes three days after the Mexicali area was rocked by a magnitude-5.4 quake that shut down factories and left 400,000 people without power.

Jeff Bailey : 2/11/2008 2:34:11 PM

DJ- 5.1 Quake Hits Near Calif-Mexico Border

Linda Piazza : 2/11/2008 2:33:15 PM

Those who want to see the SPX post more gains today want to see the advdec line brak above about +500 and maintain levels above that. It's at +198 as I type, and threatening to decline toward about -150 instead. As long as that -150 support is maintained, things won't look too terrible yet, but it's still not the way bulls would have preferred it unfold, since now you won't know until a lower level whether the SPX is going to bounce or just crater.

Keene Little : 2/11/2008 2:27:07 PM

We'll follow this move for a little bit to show how I use the wave counts and Fibs. The 4th wave pullback generally retraces about 38% of the 3rd wave. For SPX that's at 1335.65: Link . Any deeper than a 50% retracement, or if it starts to look too large compared to the 2nd wave correction (that's obviously the subjective part of EW analysis) then I start thinking the rally was just another A-B-C and to look for further consolidation in this case (30-min chart update: Link ).

Linda Piazza : 2/11/2008 2:24:29 PM

The SPX is now testing the 15-minute 9-ema, with that average at about 1337. It's not unusual at some point in the day, usually just a bit earlier than this, for the SPX to cross the entire channel, coming back to test the channel line that's now at 1332.80. If that happens, it will constitute a retest of the triangle's top trendline, to see if it holds as support. Those in bullish positions would rather the SPX have just zoomed up after breaking out of that triangle, but as I had been warning, the overhead Keltner resistance looked significant. It was going to take either a volume-backed push higher or else some chopping around to break through that resistance, if it could be broken. That resistance now stretches up to 1343.78 on 15-minute closes. If in bullish positions, you would rather that 15-minute 9-ema support hold, but you certainly want the lower potential support to hold, if not.

Jeff Bailey : 2/11/2008 2:21:57 PM

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

Keene Little : 2/11/2008 2:18:27 PM

One thing to keep in mind with wave counts on small timeframe charts (less than 60-min) is that they're often not accurate. It's great to keep track of counts for a guide but keep in mind that you will often not see complete counts (missing 5th waves for example). I use EW and a few other technical tools for confirmation rather than rely on just one tool.

Keene Little : 2/11/2008 2:15:02 PM

Often times I do not see the waves you say are happening. For instance, in your 1:36:10 post you spoke of a 3 wave completing. Did you define the wave as:
SPX.XO: Start at 12:34pm
Up to Point 1 at 13:03pm
Down to Point 2 at 13:27pm
And then back up again
Or are you looking much longer term?
Is it possible that you can include the points in your commentary?

Sorry for my cryptic post. In my effort to keep the "word count" down I will sometimes not say or show enough. I'm looking at the move up from this morning's low so refer to this SPX 3-min chart to see what I'm looking at: Link

The 1st wave up is to the high at 11:20 AM and it's either wave 1 or A. The pullback to the low at 11:56 AM is either wave 2 or B. Then there was a 5-wave rally (labeled as waves (i) through (v)) to the high at 1:30 PM and is either wave 3 or C.

If we're to get a 5-wave move up from this morning's low then we'll need to see a choppy pullback (wave 4) followed by another move higher (wave 5). That would then complete an impulsive leg up from this morning's low and a good place to take profits on a long play (for now I'm thinking 1347 will be resistance) because it will be due a larger pullback correction at a minimum.

If we're only going to get a 3-wave bounce off this morning's low (wave C being the end of it) then we'll start to see a steeper pullback. So far it's looking wave 4-ish here (choppy sideways/down pullback so far).

Jeff Bailey : 2/11/2008 2:10:20 PM

MBI-QU premiums have been "reeled in" $1.35 x $1.55 from prior observation of notably inflated premium. Confirms market makers "knew something" in regards to convertible and pricing.

Jeff Bailey : 2/11/2008 2:08:07 PM

MBIA Inc. (MBI) $13.65 -6.50% ... session low not close to Friday morning's $13.21.

Jeff Bailey : 2/11/2008 2:05:50 PM

MGIC Invt. Corp. (MTG) $14.38 -5.64% ... closed juuuuust under its conventional 19.1% on Friday ($15.44) and slips to new Feb lows.

Linda Piazza : 2/11/2008 2:01:36 PM

The SPX's 15-minute 9-ema is now at 1335.93.

Jane Fox : 2/11/2008 1:59:38 PM

Dow has a potential reverse head and shoulders. Link

Jane Fox : 2/11/2008 1:56:43 PM

Crude no longer has a potential bearish head and shoulders. Link

Jane Fox : 2/11/2008 1:53:40 PM

Internals are bullish. Link

Jeff Bailey : 2/11/2008 1:51:16 PM

Pacholder High Yield (PHF) $8.37 -0.35% ...

Jeff Bailey : 2/11/2008 1:50:20 PM

IWM presents some STRENGTH, which may be tied with action we observed in PHF last week.

Jeff Bailey : 2/11/2008 1:49:25 PM

SPY, DIA, IWM and QQQQ 30-minute interval montage Link

Just as your conventional has everthing "relative" within the range. QCharts' WEEKLY Pivot Levels has everything "relative" within last week's range.

Keene Little : 2/11/2008 1:36:58 PM

SPX 1344 may be the limit for the move if we're to see another deeper pullback.

Keene Little : 2/11/2008 1:36:10 PM

With the minor poke higher here, we're now completing a 3-wave move up from this morning's low. In light of the continuous 3-wave moves in this market, it's possible we'll soon see a reversal back down (especially if we're to stay stuck in a sideways consolidation for another day or two).

Now is a good time to take some profits off the table. If we see a choppy sideways/down pullback then we'll know there's a good chance for a 5th wave higher but better to take profits too soon than too late in this market.

Jeff Bailey : 2/11/2008 1:35:05 PM

RIMM ... #6 heavyweight.

Jeff Bailey : 2/11/2008 1:34:30 PM

NASDAQ-100 Heatmap Link

Jeff Bailey : 2/11/2008 1:32:44 PM

QQQQ $44.15 +0.55% ... comes to conventional 19.1%

Keene Little : 2/11/2008 1:30:43 PM

NDX continues to show stronger relative strength compared to the others, even against the small caps. I think there's a good possibility for a rally this week to take the index up to 1880 for two equal legs up in the bounce off the January low, with higher upside potential to 1970-1980 a little later this month. Link

Jeff Bailey : 2/11/2008 1:24:22 PM

SPX's DAILY Pivot Levels are ... 1311, 1321, Piv= 1,331, 1341, 1,351

Jeff Bailey : 2/11/2008 1:22:21 PM

01:00 Internals found at this Link

Linda Piazza : 2/11/2008 1:22:21 PM

The SPX's 15-minute 9-ema has now risen to about 1333.90. If you're in a bullish trade, you'd like to see that support maintained on 15-minute closes. The SPX did slam right into that Keltner resistance I'd mentioned. The pullback isn't scary yet, but instead is a natural and expected one, but "natural and expected" can turn into something much worse in a heartbeat in this market environment so know where your stops are and be prepared to react if your trade begins going wrong.

Jeff Bailey : 2/11/2008 1:09:44 PM

SPY $133.81 +0.55% ... not yet there.

Jeff Bailey : 2/11/2008 1:09:15 PM

VIX.X 27.64 -1.32% ... nearing WEEKLY Pivot.

Jeff Bailey : 2/11/2008 1:08:37 PM

Valero (VLO) $59.00 +0.39% ... session highs here. Session low was $57.38.

Linda Piazza : 2/11/2008 1:08:06 PM

The SPX's 15-minute 9-ema has now risen to 1333.53. That's a good distance below the SPX's current 1338-1339 level, so you'd like the SPX to consolidate near the current level while the 9-ema continued rising above it.

Jeff Bailey : 2/11/2008 1:07:50 PM

Valero restarts Delaware crude, coker units ... Reuters Story Link

Jeff Bailey : 2/11/2008 12:58:39 PM

RUT.X 699.97 +0.15% .... Heavies PUT OI 18,887 at 700.00. Heaviest CALL OI at 750 37,603. Then 740 18,177. Then 700 11,948.

Jeff Bailey : 2/11/2008 12:55:52 PM

IWM $69.70 +0.04% ... Heaviest PUT OI 215,498 at $69.00. Heaviest CALL 85,647 at $70.00

Linda Piazza : 2/11/2008 12:51:56 PM

You've had that minimal confirmation of an SPX breakout above the triangle formation. (See my 12:22:26 post.) Now you need to be prepared in case this is a false breakout. Potentially significant resistance for the SPX is at just under 1339.50 on the 15-minute chart and then at about 1344.60. Fifteen-minute closes have been at or above the rising 15-minute 9-ema since the 10:45 candle, so you want that to continue ass another minimum sign that the uptrend is being preserved. Be aware of rollover potential at that resistance instead. This is still an iffy market.

Jeff Bailey : 2/11/2008 12:51:17 PM

Seeing some "pain" at in-the-money puts.

Jeff Bailey : 2/11/2008 12:50:52 PM

RUT.X 700.00

Jeff Bailey : 2/11/2008 12:50:16 PM

QQQQ $45 Puts fell to 224,915

Keene Little : 2/11/2008 12:49:09 PM

Time to raise stops if you got long near this morning's lows. A good place for now is just below the pullback low near 12:00 PM. That should have you clearly above breakeven and a free trade now.

Jeff Bailey : 2/11/2008 12:49:05 PM

QQQQ $45 Calls OI fell to 213,128 as of Friday.

Jeff Bailey : 2/11/2008 12:46:25 PM

QQQQ Option Montage from 2/08/08 @ 11:41:48 Link

Jeff Bailey : 2/11/2008 12:41:34 PM

VXN.X 28.02 -6.84% ... undercutting WKLY S1 here.

Jeff Bailey : 2/11/2008 12:40:57 PM

QQQQ $43.98 +0.87% ... lurches to the $44 strike.

Jeff Bailey : 2/11/2008 12:39:16 PM

Conoco Plans March Crude-Unit Work At NJ Refinery - Source

DJ- ConocoPhillips (COP) will perform two weeks of planned turnaround maintenance in March at its Linden, N.J., Bayway refinery crude distillation unit and reformer, said a person familiar with plant operations on Monday.

The exact timing of the maintenance wasn't clear, but the work is not expected to affect gasoline-making and distillate production as the refinery's fluid catalytic cracking unit would remain in service utilizing feedstocks on hand, the person said.

The Bayway refinery is able to process up to 238,000 barrels of crude oil a day, and its fluid catalytic cracking unit - one of the largest in the country and the largest on the Atlantic Coast - is rated at 145,000 barrels a day. The aromatics-producing catalytic reformer's capacity is 32,000 barrels a day.

Jeff Bailey : 2/11/2008 12:35:33 PM

Petroleo Brasileiro (PBR) $113.52 +1.74% ... back above 80.9% conventional ($113.10)

Jeff Bailey : 2/11/2008 12:34:29 PM

US Oil Fund (USO) $74.02 +1.53% ... session high came at 61.8% conventional ($75.08)

Jeff Bailey : 2/11/2008 12:31:18 PM

Terminology: GO Bonds = General Obligation.

Jeff Bailey : 2/11/2008 12:30:51 PM

Just as the credit crunch has had negative impact (lack of liquidity for credit markets) will note some muni deals getting done.

Jeff Bailey : 2/11/2008 12:30:48 PM

Moody's Upgrades Abington Heights School District (PA) GO Bond Rtg To A1 From A3 ... Upgrade in conjunction with the sale of $11M GO Bonds, Series A and B of 2008.

Jeff Bailey : 2/11/2008 12:26:40 PM

US Investigating Reports Of Engine Fires In GM SUV's

GM $26.91 +4.30% ....

Jeff Bailey : 2/11/2008 12:25:42 PM

SPY $133.16 +0.06%

Jeff Bailey : 2/11/2008 12:25:14 PM

Mexico's Stocks Move Higher; IPC Index Up 1.3%

Keene Little : 2/11/2008 12:28:42 PM

I have a quick question--how do you use the Fib time line? Where would you start / end? Also with the Fib circle where to start and how big to expand the circle>?

Basically the Fib tools are based on previous moves. We know of Fib retracements of a previous move and I often show Fib price projections based on a previous move. The Fib time intervals are also based on previous moves. I haven't played with the Fib circle but again, the size of the circle will be based on which previous move you want to relate to.

As an example, I'll show the SPX daily chart with the Fib time interval. I've anchored the first point at the October high and the second anchor at the November low. The initial correction of that decline took 38% of the time for the leg down (to the December high): Link

You can use time projections out further to see where turns might occur or you can move the second anchor point to a new low, such as the January low, to see where new time projections point to possible turning points. Notice the pink price depiction to a 62% retracement of the Oct-Jan decline (1460.80) at the 200% time projection of the initial leg down (Feb 25) where they cross the downtrend line from October.

I try to match up time with price to help identify reversal points. You might recall the SPX and NDX charts I posted near the end of October and beginning of November when I was pointing to the strong possibility for a major high in the indexes (SPX: Link and NDX: Link ).

Whether it's a Fib retracement, projection or time interval, the idea is to show potential reversal levels (and/or time). Use these tools with your other technical tools as a method to help confirm what you're seeing.

Linda Piazza : 2/11/2008 12:22:26 PM

The SPX might soon approach the top of its triangle. The minimal confirmation that I would require if I were thinking about a breakout play is that the SPX close a five-minute period well away from the resistance now at 1335.25. That's just the barest minimum. I would be prepared for the possibility of a quick reversal back inside that triangle again, especially if 1340-ish resistance is too hard to break through. Do you trust yourself to honor your stops if that should happen? If not, I certainly wouldn't even consider any breakout trades. Note: This is not a trade recommendation, trading the breakout if it occurs. I'm not day trading these days, but I'm aware that others might be, and so I'm just pointing out considerations you might keep on the radar screen.

Jeff Bailey : 2/11/2008 12:21:58 PM

YHOO did see a post-buyout high to of $29.93.

Jeff Bailey : 2/11/2008 12:21:02 PM

Yahoo rejects Microsoft buyout offer ... MarketWatch Story Link ...

MSFT $28.01 -1.92% ...

YHOO $29.53 +1.13% ...

Jeff Bailey : 2/11/2008 12:12:48 PM

AAPL has reclaimed its 1/23 and 1/28 lows. "Used to be" 0%, which I suggest traders leave for now. Can use my "stacked lower" or -19.1% as shown.

Jeff Bailey : 2/11/2008 12:11:16 PM

AAPL $128.19 +2.15% ...
MSFT $28.00 -1.99% ...
QCOM $42.07 +0.35% ...
GOOG $517.67 +0.18% ...
CSCO $23.52 -0.08% ...

Jeff Bailey : 2/11/2008 12:09:48 PM

QQQQ $43.87 +0.27% ... either side of WEEKLY Pivot this morning. Only major to show a trade at WKLY Pivot so far today. Conventional 19.1% at $44.18.

Jane Fox : 2/11/2008 12:07:39 PM

Well that is not fun basically get ticked into a trade and it turns and stops me.

Jane Fox : 2/11/2008 11:58:57 AM

SHort now at 12124.

Jeff Bailey : 2/11/2008 11:54:35 AM

Prior to today's news, analysts were looking for AIG to reports quarterly EPS of $1.37 on Revenue of $29.83B.

Low/High EPS estimates were $1.18/$1.55.

Linda Piazza : 2/11/2008 11:51:40 AM

I've been talking triangle, triangle, triangle this morning, but that triangle is now narrowing so much that soon, almost any movement will constitute a breakout. So, if there should be an upside breakout by a move above about 1335-1337 or a downside one by a move below about 1320, I think subscribers should also be aware of potential resistance or support just outside those numbers: at 1339.80 and then 1345.50 on the upside and 1317 on the downside. Whatever decision you should make on participating in any breakout play, you'll need careful trade management because the possibility of a breakout that is soon reversed exists in either direction. The SPX is at 1328.48 as I type, just above the 15-minute 9-ema. Those who want the SPX to break to the upside want to see 1328.20 or so maintained on 15-minute closes.

Jeff Bailey : 2/11/2008 11:47:49 AM

Dynamic Materials (BOOM) $56.75 +2.30% ... trades 61.8% conventional.

Jane Fox : 2/11/2008 11:33:58 AM

... but soon.

Jane Fox : 2/11/2008 11:33:50 AM

YM has made a low of 12125 so we are not short yet.

Keene Little : 2/11/2008 11:32:39 AM

It remains a possibility that we'll see another leg down for the pullback from Thursday's high. SPX also maintains the possibility to remain in a sideways triangle consolidation as shown in this morning's updated 30-min chart: Link

It needs to break above Friday afternoon's high of 1336.37 to break its descending wedge pattern and 1347 to negate the sideways triangle pattern. In the meantime there is the potential for new lows or choppy consolidation that's full of whipsaws.

Jeff Bailey : 2/11/2008 11:31:57 AM

That's rather impresseive to see the DIA steady at a key level of near-term support considering AIG's price action.

Jane Fox : 2/11/2008 11:30:49 AM

I see a YM short at 12124 with a stop sitting at 12166. Target will be the 1:1 risk to reward ratio. alert

Jeff Bailey : 2/11/2008 11:29:27 AM

S&P Insurance ($IUX.X) 305.68 -4.78% ... AIG biiiiig weighting here.

Jeff Bailey : 2/11/2008 11:27:57 AM

AIG says auditors find internal control weakness ... Reuters Story Link

AIG $45.06 -11.10% ... at Friday's close, was #13 weight.

Linda Piazza : 2/11/2008 11:24:43 AM

The SPX is turning green as I type, but traders still need to remember that it's still tangled up inside that triangle. Even after any breakout, there's potential significant Keltner resistance on 15-minute closes at 1340.22 and then again at 1346.46, so I'd be watchful of possible rollover potential at those levels, if the SPX breaks higher.

Jeff Bailey : 2/11/2008 11:20:34 AM

11:00 Internals found at this Link

Note: It would currently take a closing measure of 26.00% for the NASDAQ's 5-day NH/NL measure to see a 3-box reversal back lower.

Keene Little : 2/11/2008 11:10:13 AM

Nice bounce off the lows now. It's still a little early to raise your stop on a long play but it should definitely be no lower than a couple of ticks to a new daily low.

Linda Piazza : 2/11/2008 11:04:59 AM

Small improvement in the SPX, at least in the eyes of those of you who might be in bullish positions: a 15-minute close above the 9-ema. However, the SPX is still within that triangle, so try not to form too many opinions about the eventual breakout. The triangle's top resistance is somewhere between 1336 and 1340, depending on whether all candle shadows are included or whether a best-fit trendline is drawn. The SPX is at 1327.27 as I type.

Jeff Bailey : 2/11/2008 11:04:11 AM

TRIN 1.03

Jeff Bailey : 2/11/2008 11:00:16 AM

Still, to get there, need weakness below this morning's low at a MINIMUM.

Jeff Bailey : 2/11/2008 10:59:19 AM

DIA 60-minute interval chart with same Bailey Wave but Q/M/W pivots Link

A break much below this morning's lows would have mid-point of (2,3 and 4) in play by Monday at approximately 12:00 PM EST.

Linda Piazza : 2/11/2008 10:54:03 AM

SPX potential support on 15-minute closes is now at 1320.07 and then at 1316.97. The lower boundary remains a potential target until and unless the SPX can maintain 15-minute closes above the 15-minute 9-ema now at 1325.44. Again, I'm trying not to form too many opinions about next direction while the SPX maintains its position inside that triangle. The SPX is at 1324.58 as I type.

Jane Fox : 2/11/2008 10:46:48 AM

Both the DOW and Russell 2000 futures have broken their respective previous day lows. The S&P futures have tested their previous day (and overnight) lows. The only market holding up is the NDX futures (NQ). Link

Jeff Bailey : 2/11/2008 10:42:36 AM

DIA's MONTHLY 38.2% right here.

Linda Piazza : 2/11/2008 10:40:15 AM

The SPX's triangle support is holding, so far, but so is the resistance of the 15-minute 9-ema. That's at 1325.70.

Jane Fox : 2/11/2008 10:38:26 AM

Internals are anything but bullish. I see a little bit of a pullback but I think we have more downside. Link

Keene Little : 2/11/2008 10:35:54 AM

If the DOW continues lower from here I'd say there's a good chance for a drop to 12K and I'd feel a lot more bearish about the decline. But with techs holding up you need to be very cautious if you're thinking short.

Jeff Bailey : 2/11/2008 10:34:44 AM

DIA ... 60-minute interval chart with your conventional and the two (2) large block observations. Previous "Bailey Wave" (1 and 2) and now a (2, 3 and 4 wave) Link

I'll look at DIA with its Q/M/W to see if mid-point of (2,3 and 4 wave) shows up.

Keene Little : 2/11/2008 10:32:00 AM

The DOW has dropped slightly below the bottom of the descending wedge that I showed on last night's charts and getting a bounce here. That could have been the throw-under to finish the pattern and is bullish if it holds. Long against this morning's low is the right play here. Keep your stop tight.

Jeff Bailey : 2/11/2008 10:19:42 AM

Traders should monitor for SIMILARITY or DIVERGENCE to 01/04/08 action in DIA. On 01/04/08 the DIA slipped below its 11/27/07 large block and never could reclaim that level. DIA "prairie dogged" it a couple of times, but sellers were firm on the test.

Jane Fox : 2/11/2008 10:19:19 AM

Vix is making new daily highs so it is supporting the bearish AD line.

Jane Fox : 2/11/2008 10:18:13 AM

AD line is a bearish -1039 although it started the day at +109.

Linda Piazza : 2/11/2008 10:17:21 AM

The advdec line is now at -1116, in that -1050 to -1200 zone that I mentioned earlier as the Keltner support zone (on 15-minute closes) that had held on Thursday and Friday. On Friday, the support was pierced during the 15-minute period, but the body of the candle closed back above the support line. Be aware that because the numbers for the advdec line are so large and change so quickly, the dynamic Keltner lines do, too. In fact, the lower support level has now dropped toward -1250.

Jeff Bailey : 2/11/2008 10:16:16 AM

Dow Diamonds (DIA) $120.85 -0.90% ... trades 19.1% conventional. Slips below that large block from 1/18/08 ($121.02).

Linda Piazza : 2/11/2008 10:14:24 AM

Keltner support for the SPX has now slipped to about 1321 on 15-minute closes, with the SPX now at that potential support, testing it. When I dial down to the five-minute chart, support there has now slipped to 1319.75 on five-minute closes. So, it's still not looking great and still leaning toward a bearish interpretation, but this is the support test and I'm still trying to let it go on without drawing too strong an impression of how it will resolve. The 15-minute chart shows next potential support in the 1317-1318 zone.

Jeff Bailey : 2/11/2008 10:13:06 AM

Dow Components ... at this Link

MO is/was #5 weighting and CVX would be #4 weighting. Will have to "energy" as #2 and #4 weightings.

HON is/was #11 weighting and BAC would be #18.

Linda Piazza : 2/11/2008 10:10:54 AM

So far, most of the signs lean toward the bearish side: rising VIX, rising TRIN, declining prices and advdec line. However, they're not wildly bearish yet, and support levels haven't been broken on either the SPX's triangle or the advdec line's potential Keltner support. So far, they're just suggesting what we know is happening already, triangle support is being tested. It's hard in this climate not to immediately become scared and lean hard toward the bearish side, and that could eventually be warranted, but right now the SPX is still chopping around within that triangle shape. I'm trying not to form too many opinions about where it will go next while it's doing so.

If you're in February (or even March) credit spreads, you might be looking at whether this downturn this morning allows you to exit some of your bear call credit spreads, locking in some profit and removing some risk, if you're so inclined. I know some of you are holding your breath, worried about bull put credit spreads instead. Keep assessing your risk and your comfort level with that risk. Call your broker, if you've got an astute one, and see how you might lower some of that risk if you're not comfortable with it. Although it's hard to repair a bull put spread going wrong, you can consider everything from stepping out of partial positions to other options that your broker might suggest. I've heard people advise everything from rolling down or out, buying a few extra puts a strike above the sold strike you've got, or my broker's suggestion to me: partially hedging by putting a few bear put debit spreads in front of my bull put credit ones. I'm not a broker, so I can't give you specific advice, except this: do make sure that your broker is experienced in these kind of trades.

Jeff Bailey : 2/11/2008 10:04:25 AM

MO $72.72 -0.50% ... I'm thinking MO likely being removed in advance of spinoffs. Removing HON a bit of a surprise as is adding BAC with several "financial" names already giving some representation.

Keene Little : 2/11/2008 10:00:47 AM

We have a continuation of the relative strength of techs vs the DOW. YM has pushed to new lows below the overnight lows while NQ holds in the green. Interestingly, small caps are very weak this morning, also opposite to the techs. All of this warns of potential chop.

Linda Piazza : 2/11/2008 9:58:13 AM

The SPX's 15-minute Keltner chart support has now been pushed down to 1322.25 on 15-minute closes with next potential support at 1317.64 on 15-minute closes. Be aware, if you're thinking of entering bearish trades on a downside break of the triangle if such a break should occur, of that potential support in the 1317-1318 range. No such break has occurred yet.

Jeff Bailey : 2/11/2008 9:57:41 AM

Chevron, Bank of America Added To Dow ... AP Story Link

CVX $79.42 +0.20% ...

BAC $42.05 -0.26% ...

MO $72.67 -0.56% ... being replaced.

HON $57.25 -1.00% ... being replaced.

Linda Piazza : 2/11/2008 9:48:20 AM

Keltner outlook for the advance/decline line: you don't need a Keltner chart to know that the advdec line has been falling all day. Next potential support, though, support that held Thursday and Friday, runs from about -1050 down to about -1200, with the advdec line now at -926 and dropping quickly to test that support. Those hoping for a steadying in the equities will of course want that advdec line support that held Thursday and Friday to hold again.

Keene Little : 2/11/2008 9:47:13 AM

While the US dollar could consolidate sideways we've got gold still holding onto the potential to push to a new high within a rising wedge. YG (April) continues to show upside potential to a Fib projection near 966. Much higher than that and it will be a run above 1000. A drop below 888 would negate the upside potential. Link

Linda Piazza : 2/11/2008 9:45:24 AM

So far, the SPX is still chopping around within that triangle shape it's been forming over the last few days of last week. No prediction can be determined yet, at least by the Keltner setup. On the 15-minute chart, the next potential support is near 1322.50 on 15-minute closes, but that's also about the location of the rising trendline off Thursday's low, so we knew that already. Next resistance is now at 1334.65, but would rise a bit higher to coincide with the top trendline of that triangle if the SPX were to rise.

Keene Little : 2/11/2008 9:42:21 AM

Last week the US dollar found resistance at its downtrend line from the December high (the top of a potential sideways triangle) and has pulled back a little. It's getting a little bounce off this morning's pre-market low but as long as resistance holds, currently near 77.00, there is the possibility for another pullback to the bottom of its triangle pattern (which calls for one more leg down to finish its longer term decline). Just the opposite could be expected for gold (but not necessarily). Link

It takes a break above 77.85 to negate the consolidation pattern and point to at least a test of its longer term downtrend line from November 2005.

Jeff Bailey : 2/11/2008 9:41:40 AM

DXY 76.63 -0.05% (30-min delayed) ...

Jeff Bailey : 2/11/2008 9:41:09 AM

Weekly/Monthly/Quarterly Index Pivot Matrix at this Link

The DXY did tap its WEEKLY Pivot early this morning at 04:30 AM EST.

Linda Piazza : 2/11/2008 9:36:45 AM

Correction to my 9:34:23 post: That chart is a five-minute chart and not a 15-minute one, as originally stated. However, a five-minute period is a little iffy to use for confirmation of any kind of trend, even a short-term one unless one is scalping. The whole first 15 or even 30 minutes is prone to false moves, so be careful about drawing too strong conclusions or basing your trades on possible upside or downside targets predicted by that chart. It's valid to use this chart for short-term decisions, but like any "fast" indicator, short-term charts can be prone to false indications.

Linda Piazza : 2/11/2008 9:34:23 AM

Across Wednesday and Thursday, I've been watching a triangle set up on the SPX's chart, and it's a triangle that's roughly bounded by black-channel Keltner support and resistance on this 5-minute chart: Link That means that if there's a 5-minute close above or below that triangle, we can look to the next channel lines as potential downside or upside targets. Those are at 1313.71 and 1351.78 as I type, but they'll change a little after the open. Until there's a break, though, confirmed by a 5-minute close, the action is just chopping around within this formation.

A caution: sometimes the first 15-minute candle can appear to set up a breakout situation, but then reverse back within the channels before the close of the first 15-minute period or soon after. This gains particular relevance since Keene and I are looking at our short-term intraday chart formations a little differently. He's drawing a potential descending lower channel line instead of my triangle channel line. If the SPX should decline, particularly in the first 15-minute period, be aware that Keene sees the possible action differently. If he's right, this downside Keltner target might not be met before his support line is reached. Instead the SPX might reverse higher, so remain cautious.

Jane Fox : 2/11/2008 9:27:12 AM

Bob Brinker is still bullish and said the market could retest yearly lows and consolidate here for awhile but that it will resolve upwards. I totally agree. Link

Jane Fox : 2/11/2008 9:25:22 AM

Crude's head and shoulders pattern has been all but obliterated. This is good news for goldbugs. Link

Jane Fox : 2/11/2008 9:24:14 AM

Gold has broken resistance but could still be setting up a head and shoulders, although us goldbugs are hoping it does not. Link

Keene Little : 2/11/2008 9:16:42 AM

Equity futures made a steady but choppy climb off their overnight lows and have pulled back some from the highs just before 8:30 AM. The day looks like it will start at the flat line but the attempt at a rally looks choppy and suspicious and I'm not sure it will hold up this morning. Continue to exercise caution in this choppy environment.

Jane Fox : 2/11/2008 9:09:47 AM

Overnight the NDX futures were able to break their previous day high but so far the only market to do so. Link

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