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Keene Little : 3/11/2008 12:48:17 AM

Tuesday's pivot tables: Link and Link

The EW pattern for NDX happens to be one of the cleanest patterns in the decline from last October. The sideways triangle that played out since the January low was a picture-perfect 4th wave correction and the drop to a new low confirms we're into the 5th wave down. It's now time to figure out where the decline could end because it will then set up a multi-month rally to correct the Oct-Mar decline. Daily chart update: Link

There are two downside targets to consider--the first one is where the 5th wave will equal 62% of the 1st wave (1648.56) and then where it will equal the 1st wave (1549.60). The weekly chart shows the potential price level supports at 1630 and 1560 based on prior important highs and lows, each being relatively close to the Fib projections for the 5th wave: Link

Also shown on the weekly chart are the Fib retracement levels for the October 2002 - October 2007 rally. NDX closed below the 38% retracement (1687.63) today and the 50% retracement is located at 1517.24. I think the ideal downside target for NDX is 1550-1560. From there we should see a 3-wave rally up into late May/early June and potentially a retest of the broken uptrend line from October 2002.

I want to caution those who are short the market and want to hold on until we see that lower target get hit. While I like the downside projection possibility to the 1550 area, there is a possibility that the 1650 area could mark the end of the decline. The mid line of the down-channel from October, seen on the daily chart, is near this level and it's already looking like we'll have confirming bullish divergence if the decline is stopped soon.

The 60-min chart shows a possible descending wedge (this is a bit of a forced fit but still possible), also with some short term bullish divergences associated with it: Link . If we see a quick thrust lower and a recovery back above the wedge then that would be a bullish signal that a bottom was put in (pink count). If on the other hand price drops hard through 1650 (dark red count) then it will look like a strong 3rd wave (of 5) is playing out and I would not be looking for a bottom anytime soon.

Another caution flag for the bears was thrown out today--the ISEE put/call ratio hit 56 today and each of the previous 4 times within the last year that it has dropped this low it has marked a significant low within days of the reading (one that was good for at least a big bounce): Link . There are a lot of put buyers out there and they're crowding to one side of the boat. Watch for the possibility the boat will tip over (and cause a short squeeze).

OI Technical Staff : 3/10/2008 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 : 3/10/2008 5:36:12 PM

Major Global Equity Indices, DXY, USO and GLD (approximate spot price) table at this Link

Jeff Bailey : 3/10/2008 5:26:29 PM

Closing U.S. Market Watch found at this Link

April Crude Oil settled up $2.75, or +2.62% at $107.90.

April Unleaded settled up $0.0206, or +0.76% at $2.7149. Chatter today that crack spread shorts were covering. Makes sense to me as crack back near mid-January lows.

April Heating Oil settled up $0.0264, or +0.90% at $2.9734. Also a new 52-weeker.

Jeff Bailey : 3/10/2008 4:47:21 PM

Closing Internals found at this Link

Jeff Bailey : 3/10/2008 4:37:29 PM

Semiconductor HOLDRs (SMH) $28.69 +0.20% ... $28.05 extended.

Jeff Bailey : 3/10/2008 4:36:58 PM

Texas Instruments (TXN) $29.65 +1.19% ... darts to $28.35 extended on mid-quarter update.

Keene Little : 3/10/2008 4:17:15 PM

The price pattern is set up such that a gap down tomorrow would be a confirming signal that we're in a bearish wave pattern that calls for some pretty hard selling tomorrow. The choppy nature of the decline since last week makes the intraday wave counts a real challenge to count but stepping back a bit I see some real bearish possibilities here. Tomorrow morning should help answer some of the nagging questions in my mind.

Certainly with the down-channels across the board that are holding price down it's too early to be thinking of finding a bottom. The type of price pattern I'm seeing suggests a lot more caution about the long side. Until downtrend lines are broken and the succession of lower highs is broken, continue to stick with the trend--down. Just be aware of Uncle Ben and his flame thrower as he smokes out the shorts in an overnight raid.

Linda Piazza : 3/10/2008 3:55:34 PM

I keep looking for signs that a bounce will begin or else, when we have had these little bounces we had during the course of the day, that they'll be sustained. I'm not seeing much yet. The only thing I'm finding is that the USDJPY has not reached a new low this afternoon as equities did. We've been seeing those tentative price/RSI bullish divergences on the 15-minute chart all day, but all they serve to do is to remind bears not to get too complacent and to keep lowering their stops to protect most of their profit. So, bears still have had the easy job until now, but some of you, especially the conservative ones, might consider whether you want to take at least partial profits as the January lows are approached. You take risks doing so. You risk that markets will just cascade lower tomorrow, and you won't make as much profit as you would if you'd had the whole position and just followed it lower. You take risks if you don't do it, too. You risk a bounce that begins tomorrow, maybe gapping prices up tomorrow morning so that you don't have the chance to exit and keep as much profit as you'd like to keep.

Jeff Bailey : 3/10/2008 3:44:15 PM

SPY $127.73

DIA $117.60

QQQQ $41.24

Jeff Bailey : 3/10/2008 3:43:40 PM

iShares Russell 2000 (IWM) $64.19 -2.63% ... Trades January lows.

Keene Little : 3/10/2008 3:30:26 PM

The down-channel shown on the DOW 15-min chart looks like a very tight down-channel on the 60-min chart showing the larger down-channel from Feb 27th: Link . The bottom of the larger down-channel is currently near 11695 or about 60 points above the January low whereas the bottom of the shorter term channel is now near that 11634 January low. It's a down-channel within a down-channel so the trend is clear. But stay aware of potential support getting very close now.

Jane Fox : 3/10/2008 3:25:28 PM

Dateline WSJ - NEW YORK -- The New York Times reported Monday that Gov. Eliot Spitzer has told senior advisers that he had been involved in a prostitution ring -- a stunning turn of events for a politician who built his legacy on rooting out corruption.

The Democratic governor was scheduled to make an announcement Monday afternoon. Mr. Spitzer officials wouldn't immediately comment on the story. Spitzer, 48, is married and has three daughters.out corruption.

Details about the prostitution connection were not immediately clear. But last week, federal prosecutors in Manhattan filed conspiracy charges against four people, accusing them of running a prostitution ring that charged wealthy clients in Europe and the U.S. thousands of dollars for prostitutes. out corruption.

The Web site of the Emperors Club VIP displays photographs of the prostitutes' bodies, with their faces hidden, along with hourly rates depending on whether the prostitutes were rated with various numbers of diamonds, with seven diamonds being the highest. The highest-ranked prostitutes cost $5,500 an hour, prosecutors said. out corruption.

The case is being handled by prosecutors in the Public Corruption unit of U.S. Attorney Michael Garcia's office. Mr. Garcia spokeswoman Yusill Scribner said the office had no comment.

Jeff Bailey : 3/10/2008 3:15:49 PM

iShares S&P New York Muni Bond Fund (AMEX:NYF) $100.51 -1.58% ... reversing from moring high of $102.95.

Linda Piazza : 3/10/2008 3:13:49 PM

The advance/decline line (A/D line) is now at another level of potential Keltner and historical support. It's at -2021 as I type, just below that Keltner support now at about -1935 on 15-minute closes.

Jeff Bailey : 3/10/2008 3:13:07 PM

SPY $127.90 -1.39% ...

Jeff Bailey : 3/10/2008 3:12:32 PM

NYC Local TV- Spitzer Plans To Resign As New York Governor

Jane Fox : 3/10/2008 3:12:23 PM

My Crude chart is delayed 20 minutes but so far Crude has hit a high of 108.21. Wow Link

Linda Piazza : 3/10/2008 3:11:35 PM

Shorts are brave right now. We had the SPX dip down all the way to the 1/22 low if not quite to the 1/23 low (yet), and a bounce began, but shorts sure weren't rushing to cover, helping to push prices higher and sustain that bounce attempt.

Jeff Bailey : 3/10/2008 3:10:06 PM

03:00 Internals found at this Link

Jane Fox : 3/10/2008 3:01:08 PM

The Russell 2000 is trading below its January 22nd lows but notice the MACD is not. This is a bullish divergence. Of course the MACD has to cross back up before you can say it is a divergence but it is a divergence in the making. Link

Jane Fox : 3/10/2008 2:58:36 PM

NDX has already broken through its January 23rd lows and there is a very good chance it will close below it as well. Link

Linda Piazza : 3/10/2008 2:55:30 PM

SPX potential Keltner support is now at 1275.69 on 15-minute closes. For the OEX, it's layered down to 588.74.

Jane Fox : 3/10/2008 2:46:54 PM

This is the bulls last stand. If the S&P breaks and closes below 1270 there is a very good chance we have entered a cyclical bear market within the secular bear market we entered in March 2000. Link

Keene Little : 3/10/2008 2:43:48 PM

The parallel down-channel for the DOW from last Wednesday's high looks the same as the one I showed for SPX (15-min chart here): Link . It's bearish of course that it's in this down-channel, especially with MACD unable to get above the zero line on any of its bounces. But price has been holding in the top half of the down-channel and that is potentially bullish. All it needs is to break the succession of lower highs to turn this around, at least temporarily, for the bulls. In the meantime, stick with the trend.

Linda Piazza : 3/10/2008 2:43:48 PM

As anticipated, buyers are stepping in just ahead of the 1/23 low. This is the de rigueur action. As such, it doesn't mean much yet except that those bulls who expect a bounce from the January low are stepping in just ahead of that January low. That doesn't guarantee that they'll be able to absorb the stock being sold by those who are still trying to lighten their exposure. So, the first thing you want to see if you're hoping for a bigger bounce is that same thing we've been waiting to see all day: sustained 30-minute closes above the 30-minute 9-ema. That's now at 1282.46, with further strong resistance layered up to 1287.24. Sustained 30-minute closes above that 9-ema would be only a small change in tenor, but it would at least be a small one.

Linda Piazza : 3/10/2008 2:34:05 PM

SPX Keltner support at about 1276.20 on 15-minute closes holds on another 15-minute close. Prices continue to slide lower, of course, but we still have an ordered decline. We can still watch for bullish divergences, beginning to show up again, and those scalping a point here or there on descents can still watch that descending support for places from which prices might bounce.

Keene Little : 3/10/2008 2:32:39 PM

The decline since Friday afternoon's bounce has taken on a waterfall decline appearance. This gives me the impression that we're into the 3rd of a 3rd wave down for the leg down from Friday afternoon. That would mean more selling from here and then minor bounces as it stair steps lower for the rest of the day.

Staying short is the recommended play but always stay on your toes here. One rumor about anything and the shorts will cover faster than you can blink. Keep dragging your stop down--I'd much rather get whipped out of my trade and watch it drop without me than let it go big time against me.

Linda Piazza : 3/10/2008 2:30:20 PM

As the SPX tests the 1/22 low and approaches the 1/23 one, I was just looking at the SPX's daily chart, noting how very far the SPX has swung away from its daily 200-sma. It should soon be time for the SPX to swing the other way. That's not a suggestion that it will happen right now, but only a suggestion that more risk is beginning to build up on the side of those in bearish trades. That doesn't mean that any bounce would be the bounce signaling that the final bottom had been put in. What I'm saying is that the pendulum has swung very far in one direction and it should soon be time for a swing the other way.

Jeff Bailey : 3/10/2008 2:24:01 PM

VIX.X 29.40 +6.94% ... darts to session high

Linda Piazza : 3/10/2008 2:23:34 PM

You may wonder why the announcement in Jeff's 2:11:06 post has any relevance to our trading-related site. It does. Many have been looking to Governor Spitzer and others to help engineer a bailout that will salvage the bond insurers. I'm sure many of you are, like me, wondering how this announcement will impact an already tenuous situation.

Linda Piazza : 3/10/2008 2:17:04 PM

Keltner support has held again on this 15-minute close for the SPX. That support is now at 1276.68. Again, if you want to know why it's important that support is holding if that support is descending and allowing prices to descend even while it's holding, see my 12:03:28 post. Seeing that support hold does tell us something even if prices are sliding lower.

Jeff Bailey : 3/10/2008 2:14:20 PM

DJ- Crude Over $108 As Investors Rush Into Market

Jeff Bailey : 3/10/2008 2:13:35 PM

YM 11,785 ... trades 1/23/08 regular session low

Jane Fox : 3/10/2008 2:12:38 PM

Internals are certainly supporting the bears now. Ad line is a very bearish -1889. Link

Jeff Bailey : 3/10/2008 2:11:06 PM

Spitzer Set To Make Statement At 02:15 PM EDT

DJ- New York Gov. Eliot Spitzer has informed his most senior administration officials that he had been involved in a prostitution ring, an administration official said this morning, according to a report on The New York Times Web site.

Spitzer, who was huddled with his top aides early Monday afternoon, had hours earlier abruptly canceled his scheduled public events for the day. He is set to make an announcement about 2:15 p.m. EDT this afternoon at his Manhattan office, the report said.

Linda Piazza : 3/10/2008 2:10:13 PM

It's time to mention again the SPX January lows on 1/22 and 1/23, at 1274.29 and 1270.05, respectively. It's possible to see buyers step in at any moment, but the bottom of the SPX's descending price channel, in place since last September, is probably 5-7 points below that January 23 low, if I'm eyeballing it correctly. I said in last Thursday's Wrap that a daily close below the support being tested that day produced a vulnerability to that descending trendline. So, you know what you've known all day: if you're bearish, be aware of approaching support and keep your what-if plans in effect to protect your profits, but, if you're bullish, we don't have any all-ducks-in-a-row signals yet. If you're jumping in at or ahead of a retest of the January lows, be aware that prices could still have a bit of downside, even if those support levels are going to hold.

Jane Fox : 3/10/2008 2:05:34 PM

NEW YORK (MarketWatch) -- Retail gasoline prices haven't kept pace with the historic rally in the crude-oil futures market, but the cost of filling up the gas tank is still on the rise despite the fuel being in plentiful supply domestically.

The average retail price of a gallon of gasoline rose 9 cents in the past two weeks to stand at $3.19 a gallon for self-serve regular, according to the latest Lundberg Survey of 7,000 stations around the nation. Midgrade averaged $3.31 a gallon and premium was $3.42 a gallon, according to fortnightly survey data released over the weekend.

On a percentage basis, the increase amounts to a jump of barely 3% in the past 14 days, much less than the 9% jump in crude futures to Monday's record of $107.85 a barrel. Just about two weeks ago, oil was way down at $98.81 a barrel.

Gasoline hasn't kept up for a variety of reasons. U.S. inventories continue to build, and oil's rally has been tied more to the weakness in the dollar and international demands, rather than the frequency with which Americans drive up to the pump.

Linda Piazza : 3/10/2008 2:04:31 PM

SPX potential support is now at 1276.94 on 15-minute closes; for the OEX, it's layered down to 589.29.

I'm watching the 30-minute charts for resistance. That's at the 9-ema at 1283.91, layered up to 1288.47 for the SPX and 594.45 for the OEX.

Keene Little : 3/10/2008 2:04:09 PM

While the January low for the DOW is at 11634 there is still potential support at the 2000 high near 11750, about 50 points lower currently.

Jane Fox : 3/10/2008 2:03:47 PM

Crude has now hit a high of 107.85. Geesh!!

Keene Little : 3/10/2008 1:57:27 PM

So far the techs (NDX and COMP) have broken below their January lows and remain there. The small caps (RUT) broke it this morning although only marginally and currently sits pennies above it. OEX has also broken that low and remains below it while SPX is close to testing it. The DOW is the stronger index in this regard with price currently 240 points above its January low. The January lows are still being "tested" at this point and certainly support could hold but I'm not seeing anything to make me bullish here.

Linda Piazza : 3/10/2008 1:39:19 PM

SPX potential support on 15-minute closes is now at about 1277.40. For the OEX, it's at about 590.23 and 589.46. So far, both have resisted falling to new lows after bullish price/RSI divergence was seen on the 15-minute chart at today's low. We can see bullish divergences produced all the way down as a security continues declining, and all they mean is that it's ready to push up to test resistance again, so don't act on bullish divergences. It just means that, if you're a bear, you're being signaled to pay attention and keep open the possibility of a bounce. It doesn't guarantee one.

Jeff Bailey : 3/10/2008 1:24:52 PM

USO ... now take your conventional retracement from the recent 02/07/08 low (68.57) and "drag it up" to today's high of $85.39. "bingo!" ... 19.1% is $82.17. (see Pivot matrix)

As first sign of any weakness.

Jeff Bailey : 3/10/2008 1:22:11 PM

US Oil Fund (USO) $0.50 box to match futures Link ... where there would still be some room to bullish vertical count of $87.50.

Weekly/Monthly/Quarterly Pivot Matrix Link with some overlapping support $82.12-$82.25 and resistance $88.24-$88.48.

Linda Piazza : 3/10/2008 1:21:24 PM

If the SPX rolls down again after this test of 30-minute resistance, not yet a given, we can look to the 15-minute chart for potential support. That's now extending down to 1277.50 on 15-minute closes. For the OEX, it's at 590.53 and 589.49.

Jeff Bailey : 3/10/2008 1:09:03 PM

01:00 Internals found at this Link

Linda Piazza : 3/10/2008 1:07:20 PM

That SPX 30-minute close was at the significant Keltner levels, not above them. The outcome is still uncertain.

Linda Piazza : 3/10/2008 1:01:38 PM

The SPX approaches its 30-minute 9-ema and further potential resistance extending up to 1290.74. The SPX needs to sustain 30-minute closes above this resistance before it's changed its short-term tenor. For the OEX, that potential Keltner resistance extends up to about 595.40. Bears, keep those just-in-case profit-protecting plans updated.

Jeff Bailey : 3/10/2008 12:58:46 PM

US Dollar Index (DXY) 0.50 box chart Link ... Where DXY achieved and has far exceeded its bearish vertical count (83.00) more than a year ago. Difficult to assess downside risk, or get an idea where the dollar might find a bottom. With some of the work done Friday night, will likely be when the Fed begins a tightening cycle.

Keene Little : 3/10/2008 12:53:59 PM

The current bounce looks like a correction and should lead lower again.

Linda Piazza : 3/10/2008 12:53:26 PM

The SPX's potential support on 15-minute closes now extends down to 1378.35, but it appears to be strengthening a bit. However, nothing on a short-term chart is going to stop a real downdraft. Just be aware, if in bearish trades, that you need to keep your stops updated. The OEX's potential support on 15-minute closes is at 590.90 and then at 589.75.

Jeff Bailey : 3/10/2008 12:52:19 PM

US Oil Fund (USO) $85.23 +1.81% ... MONTHLY R1 here at $85.22.

Keene Little : 3/10/2008 12:50:02 PM

Stepping back and looking at the longer term view, the NDX weekly chart shows the break of the January low which is also a confirmation of the break of its long term up-channel from October 2002. The projection for the next leg down, assuming the decline will continue, is to 1550 where it will complete a 5-wave move down from last October and set up a larger bounce into June/July: Link

This follows a similar break and retest of its up-channel for the COMP in January and now a new low: Link . The downside projection for the next leg down (where the 5th wave will equal the 1st wave) is near 2041 which lines up with price level support from 2004 through 2006 highs and lows. The price pattern would then be set up for a big bounce into the summer.

Linda Piazza : 3/10/2008 12:38:18 PM

I don't know whether to put much trust in this bounce attempt, either. The USDJPY has now made a lower low today. The A/D line continues to steady but it's not making upward progress. These need to improve, I think. Watch for that possibility.

Linda Piazza : 3/10/2008 12:27:55 PM

Keltner support held again for the SPX. Once again, I caution, however, that the tenor has not changed until there are 30-minute closes above the 30-minute 9-ema, now at 1288.43. However, sincd there's further resistance converging up to 1291.54, I'd want to see sustained 30-minute closes above that before I believed too strongly in a change of tenor. As mentioned before, this would be only the first tentative change, too, if it happens. Resistance now gathering from about 1300.87-1302 looks strong.

Jane Fox : 3/10/2008 12:23:09 PM

WASHINGTON (MarketWatch) -- Sales at U.S. wholesalers rose at the fastest pace in nearly four years in January, helping them to work down their inventories, the Commerce Department reported Monday.

Sales rose 2.7% in January, the biggest rise since March 2004, while inventories rose 0.8%. The inventory-to-sales ratio fell back to a record low 1.07.

The sales and inventory figures are seasonally adjusted, but not adjusted for inflation, which rose 1% at the wholesale level in January. However, even in inflation-adjusted terms, real sales strengthened.

With inventories relatively lean, wholesalers are in good shape to adjust to any reduction in demand without huge cutbacks in orders to factories.

Jeff Bailey : 3/10/2008 12:22:49 PM


DJ- Blackstone Group swings to 4Q loss of $170 million from a year-earlier profit of $1.18 billion, on stock compensation costs, citing challenges tied to declining equity and fixed-income markets and the credit crunch. Revenue drops to $345 million from $1.28 billion a year earlier. Firm sees difficult market conditions in U.S. and Europe continuing this year.

BX $14.05 -3.63% ...

Jeff Bailey : 3/10/2008 12:21:26 PM


DJ- Energy issues will be on the agenda when Vice President Dick Cheney meets with leaders in the Middle East next week, with the administration expected to refresh its call for the region to pump more oil.

Jeff Bailey : 3/10/2008 12:19:53 PM

Oil shorts may not want to believe what they see (dollar/oil relationship), but it sure continues to look to be in play.

Jeff Bailey : 3/10/2008 12:18:43 PM

US Oil Fund (USO) $84.96 +1.46% ... session highs here. WKLY R1 just ahead at 85.98. WKLY Pivot 82.24 not tested. (see DXY)

Jeff Bailey : 3/10/2008 12:17:35 PM

US Dollar Index (DXY) 72.88 -0.19% (30-minute delayed) ... morning high was 73.09. Session lows here.

Jeff Bailey : 3/10/2008 12:16:30 PM


DJ- U.S. Treasury Secretary Henry Paulson says he supports the Federal Reserve's move to dramatically increase the amount of cash it will direct to banks and markets in an effort to alleviate strained credit markets.

Jeff Bailey : 3/10/2008 12:15:12 PM


DJ- Among revisions, the $760 million investment by a group of investors led by Thomas H. Lee Partners and Goldman Sachs Group now would convert into a 79% stake in the ailing money-transfer firm.

MGI $2.60 +0.77% ...

Jeff Bailey : 3/10/2008 12:12:44 PM

10-year Yield ($TNX.X) down 9.2 bp at 3.449%.

Linda Piazza : 3/10/2008 12:13:09 PM

The A/D line is showing some volatility within that -1400 to -1700 zone that I mentioned as potential support earlier, but it is mostly holding that support. Strange. That's not what I expected to see when I looked from the SPX chart to the A/D chart. The A/D line is at -1440 as I type, up from the -1764 low.

Jeff Bailey : 3/10/2008 12:12:07 PM

30-year Yield ($TYX.X) down 9.2 bp at 4.449% ... WKLY Pivot Levels are 43.16, 44.28, Piv= 45.19, 46.30, 47.21.

Jeff Bailey : 3/10/2008 12:10:38 PM

13-week Yield ($IRX.X) down 1bp at 1.390%. Found buyers at weekly pivot 1.45% in early morning action.

Keene Little : 3/10/2008 12:09:44 PM

The updated SPX 60-min chart shows the short term down-channel from last Wednesday inside the down-channel from Feb 27th. The bottoms of both of these channels are near the January low of 1270 so I would expect a bounce from there (pink). How much of a bounce is the question (may not bounce as much as depicted). Link

But if price continues to drop through 1270 then it would clearly be bearish as it would be not only a break below the January low but also out the bottom of the down-channels and that would indicate a strong downtrend in progress.

Jeff Bailey : 3/10/2008 12:09:39 PM


DJ- Goldman Sachs now thinks the Federal Reserve will cut benchmark interest rates to 2% by late April, beginning with a cut 50 basis points at its March 18 meeting, but says an intermeeting rate cut today couldn't be ruled out.

Jeff Bailey : 3/10/2008 12:08:59 PM


DJ- Lehman Brothers, which is expected to report $9 billion of writedowns related to mortgage and loan assets, says it is laying off about 5% of its workforce in all regions and businesses as the deepening crisis in financing takes its toll.

LEH $43.16 -6.90% ...

Jeff Bailey : 3/10/2008 12:06:08 PM


DJ- Luxury-home builder Toll Brothers warns that it may have to spend additional resources or suffer losses, which could be "significant," if joint ventures don't honor their obligations.

TOL $18.89 -3.17% ...

Jane Fox : 3/10/2008 12:06:07 PM

Have you noticed how the markets have now "smoothed" out and the trend is clear.

Jeff Bailey : 3/10/2008 12:04:14 PM


DJ- Fast-food chain posts 12% rise in February same-store global sales on strong performance in each of its business segments as well as an extra day due to leap year. U.S. same-store stores sales rise 8.3% on breakfast and coffee offerings.

MCD $53.65 +2.64% ...

Linda Piazza : 3/10/2008 12:03:28 PM

The SPX's potential Keltner support on 15-minute closes has now been pushed down to 1279.74; the OEX's, 590.37. The OEX is actually outperforming the SPX, finding support so far at a Keltner line now at 592.18.

If the Keltner potential support lines are weakened, sliding lower, as I mentioned they were doing earlier, and if the SPX and OEX just keep sliding lower, too, what good does it do us to watch how the SPX or OEX does with regard to those Keltner lines? It does a lot of good. It shows us the difference between an orderly decline and a breakdown situation. So far, it's been an orderly decline. If support is found each time at a test of that Keltner line, as it certainly has for the OEX since last Wednesday (short-term, small violation on the SPX Friday afternoon), then those scalping trades know to watch for potential support. Also, one of these times, that support could be support that prompts a bigger bounce, so each time that Keltner line is tested, you can watch for value/RSI divergences (bullish divergence was there this time, for example) or Keltner-style divergence (also there).

Jeff Bailey : 3/10/2008 12:03:17 PM


DJ- Wholesale inventories rise 0.8% in January at seasonally adjusted $414.82 billion, after rising unrevised 1.1% during December. Analysts expected inventories to increase 0.5%. Sales of U.S. wholesalers surge 2.7%.

Jane Fox : 3/10/2008 12:00:24 PM

By the way for all you Tradestation users out there you probably already know by now that the next upgrade has a trading simulator. YA!!!! I have been waiting for this simulator for years. They are rolling it out slowly and I do not have access to it yet but soon!!!

Jeff Bailey : 3/10/2008 11:59:01 AM

DJ Survey: US Jan Trade Gap To Rise To $59.75 Billion

DJ- The U.S. trade gap with the rest of the world is expected to have deteriorated a bit in January.

A survey of economists by Dow Jones Newswires found that analysts are expecting the trade balance to worsen slightly in January, moving to a deficit of $59.75 billion from a deficit of $58.8 billion at the end of 2007.

"A boost to imports in January from higher oil prices was likely offset by higher aircraft exports and improved terms of trade for nonoil items," UBS said. "In real terms, the trend in the deficit has been firmly downward, reflecting weak growth in domestic demand and still-strong growth in foreign demand," they said.

The Commerce Department is scheduled to release the data at 8:30 a.m. EDT (1230 GMT) on Tuesday.

Jeff Bailey : 3/10/2008 11:56:42 AM

U.S. Steel Disappointed By Indiana Court of Appeals Ruling (update)

DJ- United States Steel Corporation (X) announced today that the Indiana Court of Appeals reversed a previous decision of the Indiana Utilities Regulatory Commission (IURC) involving a rate escalation provision in U. S. Steel's electric power supply contract with Northern Indiana Public Service Company (NIPSCO). The decision, handed down by the Court on Friday, March 7, 2008, held that a rate provision in a 1999 agreement between the parties applied to certain electric demand charges since October 1, 2005 -- that will continue until July 2009 -- and remanded the case to the IURC for calculation of the charges. U. S. Steel is surprised and disappointed over the outcome of the case, which it had won on a summary judgment motion before the IURC. U. S. Steel intends to seek a review of this decision by the Indiana Supreme Court, but expects to establish a pre-tax reserve of approximately $45 million in its first quarter results related to prior year effects.

X $106.26 -2.75% ...

Jeff Bailey : 3/10/2008 11:52:38 AM

S&P Bulletin: Delinquencies Up; Auto-Loan Securities Still Sound

DJ- A new report from Standard & Poor's suggests that while losses form auto-backed securities have risen amid the current credit fallout, their overall rating performance is sound.

S&P said in the report issued last week that losses from prime and subprime auto loans made in 2006 were 19% higher in the 12th month of the loan than at the same point for loans made in 2005. Losses for nonprime loans climbed 23%, hitting the highest level since loans made in 2002.

The ratings agency added that 2006 loans over 60 days due were "trending higher" for all three segments and early indications show delinquency rates for auto loans made in the first quarter of 2007 "to be the highest to date in all sectors."

"The looser credit standards of the past few years, coupled with slowing economic growth, have caused delinquencies and losses to rise, and delinquencies for prime auto loans reached record highs," said S&P credit analyst Mark Risi. "Nonetheless, auto-loan ABS structures have been resilient enough to withstand the rising losses thus far." That is exhibited by their just being two auto loan ABS being downgraded the past two years, compared with 207 upgrades, noted S&P analyst Autumn Mascio.

On Friday, Fitch Ratings said the rate of auto loans at least two months delinquent eased in February from a month earlier, when the rate had jumped to a 10-year high.

Linda Piazza : 3/10/2008 11:50:11 AM

The SPX and OEX are approaching the Keltner support levels mentioned in 11:32:29 post. Those who want equities to steady want that support to hold on 15-minute closes. Bears want it to fail, want to see a breakdown situation created. I don't see any steadying in the A/D line yet although it is in that potential support zone, but we have to see what happens. Bears, your job is easy now, just requiring you to be vigilant, to set times when you want to take automatic partial profits, at least, to keep following the SPX lower with your stops. There is again potential for a bounce here, but so far, those bounces haven't done you much damage.

Keene Little : 3/10/2008 11:48:58 AM

The bottom of the down-channel for SPX is currently near 1275. The January low was 1270.

Linda Piazza : 3/10/2008 11:41:28 AM

The A/D line has continued to tumble. It's lost every support level that it's tested so far. Based on that, the tenor of this day has not changed. However, I still have to mention another level of potential support being tested, the -1400 to -1700 zone. That's been historical support over the last three days and often is at other times, too. So far, no change in tenor with the A/D line at -1534 but keep watching just in case.

Jane Fox : 3/10/2008 11:40:07 AM

SAN FRANCISCO (MarketWatch) -- Crude-oil futures reversed earlier losses on Monday, gaining more than $2 to top $107 a barrel as the dollar remained weak against other currencies, increasing crude's attraction as an investment haven.

Crude was trading lower earlier on economic concerns as recent U.S. jobs data indicated a recession in the world's largest oil consumer. The gloomy economic outlook, however, also raised expectation that the Federal Reserve will cut interest rates further, thus add more downward pressure on the dollar.

Crude oil for April delivery rallied $2.29, or 2.2%, to a record high of $107.44 a barrel in late morning trading on the New York Mercantile Exchange. It was last seen up $1.85 at $107 a barrel.

Jane Fox : 3/10/2008 11:39:23 AM

I saw Crude was taking a little breather earlier but it is back to new all time highs now. So far my 20n minute delay charts show a high today of 106.99 Link

Jane Fox : 3/10/2008 11:37:40 AM

Is here is a quick way to determine which markets are stronger and which are weaker, the overnight charts. Notice the Russell futures are trading below its overnight range and its previous day range. The NDX futures are only under its overnight range and the S&P and DOW futures are mostly still within their overnight ranges. Link

Jane Fox : 3/10/2008 11:34:43 AM

The VIX is still not committing to either the bulls or the bears. Opps it just shot up so I guess it has finally. Link

Keene Little : 3/10/2008 11:32:42 AM

SPX is now heading for at least a retest of Friday's low near 1282. I'm thinking it won't hold.

Linda Piazza : 3/10/2008 11:32:29 AM

No change in tenor yet for the SPX and OEX. For the SPX, potential support has weakened (lines slide downhill instead of converge and flatten) but potentially exists at 1283.75 on 15-minute closes. It extends down to 1280.35 on 15-minute closes. For the OEX, potential support can be found at 592.66 down to 590.62 on 15-minute closes.

Jeff Bailey : 3/10/2008 11:30:56 AM

Correction alert! ... target on the Dynamic Materials BOOM March $45 Call (QCB-CI) is $47.50 in the underlying.

BOOM $44.62 +2.85% ...

Linda Piazza : 3/10/2008 11:30:08 AM

I write for the educational markets, too. Once when writing a reading comprehension workbook for middle schoolers, I researched the effects of Daylight Savings Time. Traffic and home-related accidents increase the week after the change over to Daylight Savings Time. Productivity at work changes. I was thinking of that in terms of trading. Especially if you're not a morning person, be sure your brain is clear as you adjust this week before you put on new trades. If you're foggy from the change in schedule, it may be all you can do to manage your existing trades in this crazy market environment.

Jeff Bailey : 3/10/2008 11:22:53 AM

Dow Diamonds (DIA) $118.76 -0.14% ... exhibiting resistance early at its 1/22/08 close of $119.22 and QS2 of $119.21. First sign of technical strength would be above MS1 ($119.98).

Linda Piazza : 3/10/2008 11:18:20 AM

The TRAN just finished another 15-minute period at the 15-minute 9-ema. That moving average is flattening now, so it looks about as easy for the TRAN to drop toward 4475 as it is for it to climb toward 4516-4525.

This is a mixed-up day. We usually get choppy price movement until all these sort themselves out. Be careful about putting too much money in a trade because trade setups are just not stellar.

Jeff Bailey : 3/10/2008 11:11:33 AM

11:00 Internals found at this Link

Keene Little : 3/10/2008 11:10:02 AM

There's a whole lot of nothin' here. Watch SPX and its downtrend line from Wednesday, currently near 1295.40, for potential resistance. If it manages to break its downtrend line then watch to see if it acts as support on a pullback. Price action in both directions remains choppy.

Linda Piazza : 3/10/2008 10:57:49 AM

Here's what my charts are showing me. An SPX 30-minute close above the 30-minute 9-ema now at 1293.74 would be a first small change in tenor. The SPX would then soon face resistance near 1300-1301. I show trendline, historical and Keltner resistance (15-minute closes) converging in that area, so that would be a next hurdle for the SPX if it should manage that slight change in tenor. It's a hurdle that stopped it flat late Friday afternoon.

Jane Fox : 3/10/2008 10:56:49 AM

I have not seen the internals this hard to read for a long time. This is a very good indicator to stay out of the markets until you get a clear trend one way or the other. This kind of action will usually lead to some very nice moves but the challenge is not get chopped up in the meantime. Link

Jeff Bailey : 3/10/2008 10:43:46 AM

US Oil Fund (USO) $84.62 +1.06% ... reverses losses to trade another 52-weeker.

Linda Piazza : 3/10/2008 10:41:21 AM

Here we go with the SPX rising up to retest significant resistance on 30-minute closes at about 1293.20. Other than a brief blip above this moving average Friday afternoon, the SPX has not managed 30-minute closes above this since Thursday morning. As I typed, the SPX has pulled back to 1289.80 from its 9-ema test, but this 30-minute period has a long time to go yet. The SPX needs to sustain 30-minute closes above this average before the tenor even begins to change.

Linda Piazza : 3/10/2008 10:37:44 AM

I'm getting mixed signals this morning, as I think Jane mentioned, too. The TRAN's divergence is bullish. The USDJPY is down from the morning high, but has been, so far, forming higher highs and higher lows since about 5:30 am ET this morning. The advdec line has been declining all day, until a few moments ago when it began bouncing from Keltner support near -900 to -1000. Despite the decline to deeper and more significant support, it has all day been in the bullish upper half of the Keltner channels. The VIX has been moving lower off the day's high but the TRIN is still well above 1.00. Mixed evidence everywhere I look.

With such mixed evidence, it's foolish to think you know, with any degree of certainty, where markets are going next. I don't know. I see some underlying signs that markets might be trying to steady, but will those efforts work?

Linda Piazza : 3/10/2008 10:32:21 AM

It looks as if the TRAN will, once again, find support at its 15-minute 9-ema this 15-minute period, continuing the pattern that was begin Friday afternoon. It's still a few points positive this morning, showing bullish divergence in that way, too, with the SPX.

Keene Little : 3/10/2008 10:28:52 AM

SPX is rying to hold the mid line of its down-channel from last Wednesday and the price pattern in the drop from Friday's bounce looks choppy enough to suggest another rally leg is coming. So be careful if you're short the market. On the other hand we're clearly in a downtrend and therefore the long side is the riskier side. SPX 10-min chart update: Link

Linda Piazza : 3/10/2008 10:25:27 AM

The TRAN did pull back to support as I surmised that it might need to do in my 10:08:36 post. So far, this is just a pullback to test the 15-minute 9-ema's support on 15-minute closes, with that 9-ema now at about 4495.80. That moving average has held as support for the TRAN since about 2:45 pm ET Friday afternoon, showing a divergence from other indices, but we'll see if it does this time. Next potential support is near 4480. The TRAN is at 4493.02 as I type.

Jeff Bailey : 3/10/2008 10:25:27 AM

Brazil Posts $159M Weekly Foreign Trade Deficit

Jane Fox : 3/10/2008 10:23:10 AM

You see the MACD divergence on the DOW chart as well. Link

Linda Piazza : 3/10/2008 10:22:56 AM

The A/D line is approaching that potentially stronger support that's now extending down to about -1000 on 15-minute closes. The A/D line is now at -862. So far, no potential support has proven to be support at all, but equity bears should still be aware that it could be.

Jane Fox : 3/10/2008 10:21:57 AM

SPX has built a very nice MACD bullish divergence suggesting to me the lows from January 23 at 1270 will hold. Link

Jeff Bailey : 3/10/2008 10:19:42 AM

Altria Announces Effectiveness of PMI's Registration Statement on Form 10 (03/28/2008)

Press Release Link

MO $75.35 +1.11% ... MO-FO are $3.40 x $3.50

Jane Fox : 3/10/2008 10:15:54 AM

Crude is also pulling back but it looks like $100/bl will hold up as support at least for a while. Link

Linda Piazza : 3/10/2008 10:10:38 AM

Keltner outlook on the A/D line: the line has continued to drop, losing the potential Keltner support near -400. It's now testing the 15-minute 9-ema at about -675, with the A/D line at -650 as I type. If this support is lost on 15-minute clsoes, -900 to -1000 potential support might be tested.

Linda Piazza : 3/10/2008 10:08:36 AM

The TRAN has been climbing since I first noted the divergence a few minutes ago. It's at 4507.15 as I type, facing significant Keltner resistance for the TRAN on 15-minute closes, with that extending up to about 4524.67. Friday's late-afternoon swing high was at 4530.37, so the TRAN needs to clear 4524.67 on 15-minute closes and then swing back above that 4530.37 to confirm that it was breaking above resistance. It may need to pull back to support first, before we see where it's really heading, so there could still be some chopping around on the TRAN as well as on other indices.

Remember that I'm not trading the TRAN. Don't go looking for options on it, as there aren't any that I can find. I'm using it only as a sort of indicator anyway, for what I expect from the SPX and OEX. Divergences can be important to watch, when the TRAN is heading one way and those others the other way. They don't usually go too far in one direction if the TRAN isn't going that direction, too.

Jeff Bailey : 3/10/2008 10:07:21 AM

Tesoro Drops Poison Pill ... AP Story Link

TSO $34.01 +3.59% ...

Jane Fox : 3/10/2008 10:01:55 AM

Gold is actually breaking through its lower trendline and may be starting the needed retracement of which I have been talking about for days now. Link

Linda Piazza : 3/10/2008 10:01:48 AM

Potential Keltner support for the SPX is now at 1288.06 on 15-minute closes, then if that doesn't hold on 15-minute closes, potentially stronger at 1283. The OEX is outperforming as it never lost the support of its 15-minute 9-ema. For the OEX, those numbers are the currently being tested 15-minute 9-ema at 597.02, 594.52, with the potentially stronger support at 591.87.

Jane Fox : 3/10/2008 9:59:27 AM

As a matter of fact S&P futures' (ES) new low was made at the same time as a new VIX low so this is a very bullish divergence. WE may have hit the lows for now.

Jane Fox : 3/10/2008 9:57:33 AM

The VIX does not support the bearish AD volume and line so once again we are into for choppiness. Link

Linda Piazza : 3/10/2008 9:55:26 AM

Divergence? I'm just noticing that the TRAN is still showing a slight gain and is still above its open. This is a divergence, as the SPX, OEX and Dow are often led by the TRAN. The gains on the TRAN are small and may not hold up. This may be the day when the other indices drag the TRAN down but do be aware of the divergence.

Similarly, the SOX shows a tiny gain.

Jeff Bailey : 3/10/2008 9:55:19 AM

Keryx Biopharma (KERX) $0.69 -86.88% ... atop this morning's most active.

Jane Fox : 3/10/2008 9:54:48 AM

AD line is a bearish -680 and AD volume is heading straight down so it these two are telling me the bears have control. Next the VIX.

Jane Fox : 3/10/2008 9:52:07 AM

I apologize for my tardiness but I am bit under the weather this morning and day light saving got me as well. I usually get up at 5:30 but when we "spring" ahead although my clock says 5:30 my body says uh uh it is 4:30 so I just slept in a tad this morning.

Here are the overnight charts and as you can see there is really nothing to tell you who has control. Link

Keene Little : 3/10/2008 9:49:27 AM

Now techs are leading to the upside in the bounce off the overnight low. But they're alone in the bounce. Just a choppy market so far.

Linda Piazza : 3/10/2008 9:46:27 AM

The USDJPY sank last night, but it's been climbing off its lows since about 5:30 am ET this morning. Right now, it's at 102.26, and struggling with potentially strong resistance up to about 102.54 on 15-minute closes. The picture is mixed and not providing much clarity for equity traders.

Linda Piazza : 3/10/2008 9:42:40 AM

Keltner outlook on the advdec line: The advdec line is now at -412, testing that first potential Keltner support that I mentioned earlier. If this was just a clear-out-the-rest-of-the-weak-hands move this morning, the advdec line could steady near here. If there is more downside to come, then the next support is clustered from -800 to -950, and that should be a bit stronger. If the advdec line moves much below that, then anything can happen.

Equity bears should be aware, though, that the advdec line is testing potential support. If it bounces, then equities might, too. Just make sure you know where your stops are. The warnings maybe haven't been needed much lately, but some day they will be!

Keene Little : 3/10/2008 9:40:02 AM

With techs and small caps being weaker this morning NQ and ER are the first to test their overnight lows.

Linda Piazza : 3/10/2008 9:39:41 AM

OEX potential Keltner support is at 596.73 on 15-minute closes, and then at 594.77, and, potentially stronger, at about 592.

Linda Piazza : 3/10/2008 9:38:24 AM

We know where resistance is for the SPX. What about support? With the caveat that if a big downdraft gets started, no support seen on a short-term chart is going to mean anything, the support so far is at the 15-minute 9-ema now at about 1292.60 on 15-minute closes, and then at 1288.82, and, potentially stronger, at 1282.50. The SPX is obviously below the first of those, but the first 15-minute period hasn't concluded.

Linda Piazza : 3/10/2008 9:35:34 AM

Keltner outlook on the advdec line: The Keltner outlook is unfortunately a bit cloudy at the moment as values are suspended between support and resistance, and are far from each. That makes it as likely that the values will decline toward -425 as to climb toward +500 or even the next potential target at 1270. As I type, it looks as if the "decline toward support" option is being taken, but it's not moving far yet. I can say that, so far, the advdec line is in the upper, bullish half of the Keltner charts. The line is at -56 as I type.

Keene Little : 3/10/2008 9:33:32 AM

Techs are starting the morning slightly negative and that's another caution flag for traders wanting to try the long side.

Keene Little : 3/10/2008 9:32:28 AM

Equity futures rallied off their overnight lows which leaves open the possibility for a retest of the lows (so about 100 DOW futures (YM) below where it looks like it will open this morning). But at least the morning looks positive with a gap up start.

Jeff Bailey : 3/10/2008 9:31:49 AM

Weekly, Monthly, Quarterly Index Pivot Matrix at this Link

Linda Piazza : 3/10/2008 9:28:34 AM

For OEX traders, that significant potential resistance on 30-minute closes is now at about 598 on 30-minute closes.

Linda Piazza : 3/10/2008 9:22:06 AM

S&P 500 futures are currently not quite 2 points above fair values. If the cash markets trade in accordance with futures' action--and they did not early Friday, for example--the SPX would press just above 1295. The 30-minute chart shows significant potential resistance up to 1295.30 on 30-minute closes. The last hour of trading on Friday, the SPX pierced that Keltner level repeatedly (it was a bit higher heading into the last hour) but kept falling back beneath it, corroborating the strength of that resistance band.

That means that you should be careful of pop-and-drop potential this morning. I'm not predicting a pop-and-drop. I have to wait to see how things set up. I'm just noting the potential for that, potential that's balanced by the knowledge that we're overdue for a relief rally. If bullish, you want sustained 30-minute closes above that level before the tenor has changed even slightly.

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