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Jeff Bailey : 3/29/2008 1:20:01 AM

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

March Trade Blotter of CLOSED trades and Q1 To Date Link

I've made some strategy "adjustments" this month and they look to be working, or improvements from Jan and Feb gains. But really, the volatility and the "range" have made for a more active trade and a "take it when you get it."

The better part has been some account management, rationalizing problems, then trying to make some adjustments.

For TSO and the TSO-HI, I deem it a potential "Long-term problem" that isn't going to be corrected by the overall equity market, but the dynamic between oil and the dollar's weakness.

With that said, I'm NOT going to be giving VLO, or the VLO-IJ much room, or "time to play out," as I really haven't much of a feel just how long the dollar's weakness persists, largely against the euro.

TOL and the TEP-FE and TEP-ET. Perhaps a "June expiration problem" where I look to work off some of the TEP-FE with a covered TEP-ET.

GG and GG-PU a April "Problem." This one still has some potential downside for another leg and I want to hang in there a bit longer.

PBR and PMD-DE not working as planned as the "hedge" for higher oil prices. We scrambled on 3/20 to salvage $1.40 on the PMJ-OS which ended up no bid. As things stand now, it isn't going to surprise me if we're doing the same thing come 4/18. I don't track the $/Real, or other cross-rates of the real, but PBR sure seems to trade a "this-and-that" and not always moving in unison with oil's price. At is as if "real too strong, so sell some PBR," ... then "real softening up a bit, buy some PBR" as Brazilian exported oil in other currencies not competitive, or more competitive on price/barrel.

Today, CEO +4.48% and PTR +5.17%, which are China-based oil producers.

WHR and WHR-PP ... technicals ideal for bear, would be a "durable good," but this bugger is holding tough. Also an April "problem."

SWC and the SWC-PD ... an April "goody" that I don't want to slip away due to some type of upside volatility. So, like we've done before, I've "rolled out" with an additional SWC-QW, but look to prolong bearish exposure. This one trades rather thin and when it moves, it moves.

The IWM is 1/2 position. And for a "smaller" account these are the tough ones, especially with some April "problems" on the horizon.

I do NOT enjoy being short the major averages when the bullish % indicators are all in columns of X. Now, a 2.25% gain isn't bad, but I've got to be cognizant of commissions and what does $111.47 do for a "smaller" account? It is better than a poke in the eye with a sharp stick, but I think we hold based on some of the April "problems" get resolved.

MTD the SPX is down -1.2%. QTD SPX is down -10.4%.

Jeff Bailey : 3/29/2008 1:19:58 AM

The 20DyNet% change in the U.S. Market Watch gives indication that the HMO's and Brokers, the major drag for the SPY/SPX as it is the major that would show a slightly more notable close below its 21-day SMA.

I'm starting to hear more and more discussion regarding the past decision regarding the elimination of the up-tick rule as being a mistake. I tend to agree a bit. Yes, even this trader that likes to short, and other money managers (not just buy side).

I always felt the up-tick rule for shorting made for a much more efficient market place. I haven't seen any type of study at this point, but it sure seems like volatility has picked up since the up-tick rule for shorting was eliminated. I don't know. With the up-tick rule we'd see the buy side come in and paint things higher into a quarter. I guess it fair that in a longer-term downward trend short should be able to paint it lower by hitting bids. But if liquidity is a problem (mostly in credit markets, but gets compounded in equity too), then the elimination of the up-tick rule isn't helping what the Fed and Treasury are tyring to correct.

Art Cashin commented on some observations from the trading floor today that hedge funds appeared to be coming in hard on bids in an attempt to get some end-of-quarter short exposure into the quarter, which they will show their investors in a couple of weeks. What I took from Mr. Cashin's comments is that there are quite a few hedge funds that haven't been short, or short enought, and they are trying to get short into the end of the quarter, in order to save some client accounts. With no up-tick rule, that's a lot easier done these days.

All is fair in love and war.

Jeff Bailey : 3/28/2008 11:54:56 PM

DIA, SPY, IWM, QQQQ daily intervals montage Link

Jeff Bailey : 3/28/2008 11:31:11 PM

Closing Internals found at this Link

Jeff Bailey : 3/28/2008 11:28:17 PM

Closing U.S. Market Watch found at this Link

OI Technical Staff : 3/28/2008 9:59:59 PM

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

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Jane Fox : 3/28/2008 4:21:03 PM

Economic Reports for Monday include:

9:45a.m. Mar Chicago PMI. Previous: 44.5.

10:30a.m. Mar Dallas Fed Mfg Production Index. Previous: 7.1.

Keene Little : 3/28/2008 4:18:10 PM

The leg up would fit as the final move up for the c-wave of the a-b-c-d-e sideways consolidation pattern on the daily chart (dark red): Link

Keene Little : 3/28/2008 4:13:20 PM

If we do get a rally leg on Monday, I've got a few Fib projections pointing to the same area as the shallow downtrend line from the Feb 1st high--SPX 1377-1380. Based on the corrective price action in the pullback from Monday's high I still think it's very possible we'll get another leg up early next week. March 31st is end of month/quarter so who knows what they'll try to do. Link

Jeff Bailey : 3/28/2008 4:11:23 PM

SPY and QQQQ look to close below their 19.1% conventional.

IWM right on its. I say we go ahead and hold the 1/2 position short over the weekend.

If Fed does something again (banks back at their lows), so be it.

Keene Little : 3/28/2008 4:01:34 PM

FWIW, I would Not take a short home with me this weekend, except for perhaps a couple of put options just in case we gap down on Monday. It's been a very steady decline today but no panic whatsoever. I wouldn't be the least bit surprised to see futures manipulated higher Sunday night in order to get shorts and longs scrambling Monday morning to buy the cash open.

Linda Piazza : 3/28/2008 3:58:52 PM

Time for end-of-day decisions, if they haven't already been made. If the SPX climbs a few points into the close, it will close the day at or near the 10-sma on the daily chart. Could this just have been sideways consolidation and then a quick dip to test the 10-sma? It certainly could have been, although we didn't get the requisite quick bounce from it, did we? As the day's end approaches, anything is possible, with the SPX stuck in the middle of that possible bearish right triangle on its daily chart, about as far from likely strong resistance as it is from likely strong support. Make your decisions accordingly. The action looks more bearish than bullish, short-term, but the SPX could wind right back up and head up again next week.

Keene Little : 3/28/2008 3:57:47 PM

The DOW's bullish flag pattern is still holding so we do not have confirmation on the downside break. 30-min chart update: Link

Jeff Bailey : 3/28/2008 3:55:10 PM

That's what I'm a bit worried about Art. That this action is being "manipulated" lower.

Keene Little : 3/28/2008 3:52:49 PM

We've now got a 4th steeper downtrend line as shown on this SPX 10-min chart, so the move is going parabolic: Link . I often mention to watch the 4th trend line since a break of it often signfifies the end of the move (at least the strong move since it could consolidate and continue lower at a later time). Until it breaks though, and price makes a higher high within this decline, the potential for a strong waterfall decline is real.

Jeff Bailey : 3/28/2008 3:45:53 PM

What do you hink about the rest of those March options?

Jeff Bailey : 3/28/2008 3:44:41 PM

If we got out here at $68.20, next week's pivot levels would be ... $66.39 (close to current target), $67.29, Piv= $68.86 $69.76, $71.33.

Keene Little : 3/28/2008 3:43:14 PM

The RUT has now dropped back down to its broken downtrend line from December, near 684, so it too could find support here. Obviously a break below it would look bearish. 60-min chart: Link

Jeff Bailey : 3/28/2008 3:41:53 PM

It would take an IWM close of $68.50 today for next WEEK's WEEKLY S1 to come out at $67.49 and tie in with Monday morning's gap higher.

Linda Piazza : 3/28/2008 3:39:11 PM

The OEX has been its target, now risen to 610.95, also potential support on 15-minute closes. Bears should have profit-protecting plans in place in case this holds.

Linda Piazza : 3/28/2008 3:36:25 PM

The SPX has finally hit that Keltner target that was at 1308 yesterday and has now risen to 1316.15. Bears should have profit-protecting plans in case this holds.

Jeff Bailey : 3/28/2008 3:22:37 PM

IWM $68.14 -1.37% ... probes its 19.1% conventional. And day trader's "5-Mrt" red #6.

Jeff Bailey : 3/28/2008 3:17:48 PM

03:00 Internals found at this Link

Linda Piazza : 3/28/2008 3:12:23 PM

The USDJPY is now 99.30, edging just below that potential Keltner support on 15-minute closes that I mentioned earlier, then at 99.45 but now near 99.35. It's been trending down all day, corroborating equity weakness. Watch now as it tests that Keltner support and approaches the yesterday afternoon low of 99.28.

Keene Little : 3/28/2008 3:02:46 PM

Use a downtrend line along today's bounce highs--until that line is broken the bulls are in trouble.

Jeff Bailey : 3/28/2008 3:01:08 PM

PHF getting some ticks to $8.20

Jane Fox : 3/28/2008 2:59:48 PM

All markets are below their respective previous day and overnight lows. Link

Keene Little : 3/28/2008 2:59:39 PM

This week has to be one of the most tortured declines I've seen in a long time. The price pattern has been one that suggest the next low could be it for the decline and yet each bounce is merely another corrective one. The bulls need a rally NOW otherwise look out below.

Jeff Bailey : 3/28/2008 2:51:15 PM

Remember ... asian markets had a strong session.

Jeff Bailey : 3/28/2008 2:47:22 PM

Or up your nose.

Jeff Bailey : 3/28/2008 2:47:00 PM

I mention the IWM day action for any Russell futures traders out there. End of quarter and you don't want a nice day trader gain shoved back down your throat.

Keene Little : 3/28/2008 2:45:41 PM

A rally back above the highs near 2:15 PM would now be bullish. For now it remains bearish.

Keene Little : 3/28/2008 2:44:30 PM

SPX is now dropping marginally below the bottom of its flag pattern (near 1320). This is where it's critical--if it drops below and recovers back inside the pattern then it will look like a throw-under finish and could be bullish. If it drops lower it will be a failed bullish pattern and failed patterns tend to move quickly--down in this case.

Jeff Bailey : 3/28/2008 2:44:17 PM

Bond market set to close in 17 minutes.

Jeff Bailey : 3/28/2008 2:43:39 PM

Check out your lower "5-MRT" on the IWM and red #6 with its conventional 19.1%.

Lower "5-MRT" is a day trader's technique I've taught. Simply attach your 0% (or 100%) then "fit" the 19.1% (or 80.9%) at the first 5-minute interval bar.

Jeff Bailey : 3/28/2008 2:37:26 PM

Much more of a tie with YM and the $/yen

Jeff Bailey : 3/28/2008 2:36:53 PM

Much more of a tie for oil with EUR/USD

Jeff Bailey : 3/28/2008 2:33:38 PM

USD/JPY 99.39 ... slips to another session low.

YM 12,260 ... "ditto"

Jeff Bailey : 3/28/2008 2:25:20 PM

Small Cap Most Actives at 02:00 Link

Keene Little : 3/28/2008 2:23:39 PM

Looking at the NDX daily chart, I show the same potential that I showed for SMH for a leg lower into April (dark red) with a downside target near 1573 (5th wave = 1st wave for the decline from October). This decline would then set up a nice rally into May/June: Link . If we first get another rally leg higher (pink) into April from here then it could set up just the opposite--hard selling into the summer.

Jeff Bailey : 3/28/2008 2:22:05 PM

Fed Revises 05-07 Industrial Production, Weaker Than Thought Before

DJ- The nation's industries produced at a weaker rate during the last three years than earlier estimated, Federal Reserve data show. The Fed released annual revisions to industrial production data on Friday. Industrial production for 2007 grew 1.7%, Friday's revised data showed. Previously, growth was seen at 2.1%. In 2006, industrial production increased 2.2%, down sharply from an earlier estimated 3.9%. Production during 2005 rose 3.3%; originally, output was seen climbing 3.2%. Capacity utilization in 2007 was revised to 81.0%, compared with an earlier estimated 81.6%. Capital use in 2006 was revised to 80.9% from 81.7%.

Jeff Bailey : 3/28/2008 2:20:56 PM

DJ- Newspapers' Ad Spending Down 10% Vs. Q4 2006

Stocks of interest ... NWS, QPO, NYT, GCI

Jeff Bailey : 3/28/2008 2:12:46 PM

Kinda' funny end of quarter closes for the DXY though. Sep was 77.72 Dec was 76.62.

Jeff Bailey : 3/28/2008 2:09:10 PM

See, take a retracement on PAL from that recent inflection low of $4.89 to the recent high. Got to be thinking the $5.00 strike held buyers.

Jeff Bailey : 3/28/2008 2:05:38 PM

Maybe if PAL moves aggressive below $5.50, then SWC starts to gravitate lower.

Jane Fox : 3/28/2008 2:04:57 PM

I have been following the MDY on the jtHMA charts and yesterday said I would be short this market if it broke the lows made on March 27th and indeed it did just that today so I am short the MDY now. Link

Jeff Bailey : 3/28/2008 2:04:39 PM

PAL $5.52 -4.66% ...

Jeff Bailey : 3/28/2008 2:04:08 PM

SWC $15.97 -0.68% ... "you're supposed to gravitating towards $15.00 today!"

Linda Piazza : 3/28/2008 2:03:07 PM

The OEX approaches potential Keltner targets and support on 15-minute closes at 611.80-612.94 currently. Bears should have profit-protecting plans in place as this potentially strong support on 15-minute closes is approached.

Jane Fox : 3/28/2008 2:02:46 PM

This is a very normal pullback and certainly nothing to worry about although the series of lower highs and lows needs to break before you can say the tide has turned. Link

Linda Piazza : 3/28/2008 2:02:12 PM

So much for the Keltner setup showing the possibility of a bounce up toward next resistance. It still shows that possibility, but both the SPX and OEX still drop lower within a descending price channel. That simplistic view from my 12:14:26 post is still true: As long as the SPX and OEX are contained in those descending price channels, we can expect them to keep descending within those channels.

The SPX tests potentially strong support at 1322 on 15-minute close with stronger support now at 1317.50. If the SPX doesn't dip any further before attempting to bounce than it's done so far, it's again creating potential Keltner-style bullish divergence. If it drops toward 1317.50, it hasn't.

Bears should have their profit-protecting plans in place as the 1317.50 level is approached.

Jeff Bailey : 3/28/2008 2:02:09 PM

I've thought long and hard about selling a covered call against the TSO-HI, but you know what will happen. I'll sell a $35 and the next day ...

You know ... try making a currently "bad situation" (long $45 strike) better, by selling a $35 strike could just make things worse.

Now, if crack spread will improve (likely scenario would be dollar strength/oil weakness) and TSO bounces to $35/$40, then we can do something.

Jeff Bailey : 3/28/2008 1:58:34 PM

For those that may decide to short partial positions in the refiners against a near, in, or at-the money long call.

The only note I'd make as it relates to selection is the note I made the other day here in the MM, that TSO lifted its poison pill.

I think it was Icahn that was interested in TSO. They adopted a shareholder rights plan. But recently cancelled it.

Not saying TSO will get bought out, but if you can avoid a possible collision, maybe do it elsehwere.

Keene Little : 3/28/2008 1:55:18 PM

The one sector that continues to give me pause when thinking about additional upside for the market is the semiconductor sector. I've been showing the SMH daily chart and its sideways triangle pattern since January and it calls for a decline from here. If the semis drop so too will the techs (more than likely) and they could lead the charge for the broader market to the downside. On Monday I called for a short play on SMH against that day's 30.28 high and I continue to see that as the best trade on this one. Link

Jeff Bailey : 3/28/2008 1:49:01 PM

IWM $68.54 -0.79% ... still some room to its at $68.15.

Jeff Bailey : 3/28/2008 1:48:25 PM

RUT.X 688.15 -0.61% ... slips juuuuuust under its 19.1% conventional.

Jeff Bailey : 3/28/2008 1:46:58 PM

No options on the SHV ... just thought about selling naked calls. Another strategy could have been to buy SHV on weakness should 13-week rise near FF target, then look for 13-week to dart lower on some type of "scare," have SHV's price rise, then sell a covered call. Enhance a bond portfolio's yield.

Keene Little : 3/28/2008 1:45:50 PM

For SPX a 62% retracement of the rally off last Thursday's low is at 1320, right near the bottom of its flag pattern so that continues to look like a potential support level.

Jeff Bailey : 3/28/2008 1:43:42 PM

Just a note ... the other day when the 13-week Yield was at 0.20%, I looked at the ishare Lehman Short Treasury (SHV) as a possible short candidate, but have never traded as such, so I thought I'd monitor it instead.

Not much price movement even from a tippy-top high of $110.57 to 3/25/08 low of $110.30.

13-week at 1.350% as I type. SHV $110.04 is unch.

Jeff Bailey : 3/28/2008 1:36:55 PM

IWM $68.71 -0.55% ... session lows.

Jeff Bailey : 3/28/2008 1:35:29 PM

NASDAQ volumes were very anemic at 01:00 ... if day trading futures ... don't fall asleep.

Jeff Bailey : 3/28/2008 1:33:34 PM

Hmmm ... don't see this that often ...

QQQQ #13 most active. QID #14 most active.

$43.89 and $49.49.

Jeff Bailey : 3/28/2008 1:32:12 PM

Apollo Group (APOL) $39.63 -29.67% ... getting whacked today. #15 most active.

Jeff Bailey : 3/28/2008 1:28:35 PM

01:00 Internals found at this Link

Linda Piazza : 3/28/2008 1:23:22 PM

According to the Keltner setup, the SPX is actually beginning to show some improvement in tenor. It has to do with the way it's treating the bottom of one of the channels, first piercing it before each bounce attempt, then piercing it less severely, then just barely testing it and now skimming above it. If this holds, a test of 1331.65-1335.06 might occur, but what happens after that, if a bounce attempt even occurs, is not predicted.

Jeff Bailey : 3/28/2008 1:21:34 PM

Gots to be thinking 2.50% on the 5-year.

Jeff Bailey : 3/28/2008 1:18:32 PM

Was also thinking USD/JPY 100.00 on Monday.

Jeff Bailey : 3/28/2008 1:16:51 PM

SWC $16.00 -0.49% ...

June Palladium $447

Jeff Bailey : 3/28/2008 1:15:42 PM

Anyone thinking DXY 72.50 and GLD 90.00 on Monday?

Jeff Bailey : 3/28/2008 1:13:09 PM

Need a US Gasoline fund and things would be simpler.

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

USO $84.23 -1.74% ... also at its 19.1% conventional ($84.06).

Jeff Bailey : 3/28/2008 1:02:58 PM

August Crude / August Unleaded with last two (2) oil futures settlements. Benchmarks for VLO and TSO prices at those benchmarks. Link

Jeff Bailey : 3/28/2008 12:50:03 PM

On 2/20/08 ... TSO closed $40.22. On 3/19/08 TSO closed $30.30.

Jeff Bailey : 3/28/2008 12:49:37 PM

On 2/20/08 ... VLO closed $61.44. On 3/19/08 VLO closed $49.03.

Keene Little : 3/28/2008 12:47:50 PM

The bottom of the potential bull flag for SPX (yes, it's still potentially bullish) is currently near 1320 so that could be a good place to test the long side to see if this is ready to put in a bottom.

Jeff Bailey : 3/28/2008 12:44:31 PM

While we're doing this, I want you to be thinking what you would be doing as the president/CEO of a refining company.

You need oil to make your products. Stockpiles of unleaded look steady, but distillates are at historic lows. What's you're strategy?

Linda Piazza : 3/28/2008 12:44:29 PM

Other than the 15-minute 9-ema that isn't working too well as a benchmark today for the OEX, nearest relatively strong resistance on 15-minute closes is 618.68-619.73. Nearest support is 613.51 and then 611.53.

Linda Piazza : 3/28/2008 12:43:15 PM

Still chopping within a descending price channel. Other than the 15-minute 9-ema that isn't working too well as a benchmark this morning, nearest relatively strong resistance for the SPX on 15-minute closes is from 1333.29-1335.51, and relatively strong support on 15-minute closes is 1323.41 and then 1316.65.

Jeff Bailey : 3/28/2008 12:42:26 PM

Also "benchmark" the 2/20/08 settlements on both. This will show you the current problem with refiner's margins, or the crack spreads.

2/20 and 3/19 were the last two (2) oil futures contract settlements.

Jeff Bailey : 3/28/2008 12:39:14 PM

Also "benchmark" the 03/19/08 settlements on both.

Jeff Bailey : 3/28/2008 12:38:35 PM

Slap a conventional on both the cl08q and rb08q. From January inflection lows to mid-march highs. Charts to follow for those that don't have access at work.

Linda Piazza : 3/28/2008 12:14:26 PM

Just churning. As I said earlier today, as long as the SPX and OEX are contained in their descending price channels, what we can expect is churning within those price channels. That sounds so simplistic and almost idiotic, but it's the truth. We can't expect to point to this benchmark or that one and say, the SPX is going here or the OEX is going there.

With that said, remember that these are descending price channels that are moving down toward potentially strong support, now between 1316.40-1379 on the SPX and near 611-612 on the OEX. Both have other potential support between current prices and those levels, too, with that at 623.80 for the SPX and 613.60 for the OEX.

Jeff Bailey : 3/28/2008 12:12:50 PM

Valero Energy (VLO) conventional $1 box chart Link where I need to note the still intact bearish vertical count. Should oil prices continue to rise, and unleaded just track oil's rise at slower pace, or actually decline, VLO at $27.00 should still be a downside risk assessment.

And an unconventional 0.50 box chart I was using back on 02/26/08 for exiting both the VLO-FK and VLO-CZ. You can see how "nicely" market participants have traded VLO with the $GASO : $WTIC chart (11:49:09 Post)

Tesoro (TSO) conventional $1 box Link

TSO $0.50 box Link (to be contd)

Jeff Bailey : 3/28/2008 12:02:53 PM

Benchmarking TSO $29.77 +3.11%

VLO $49.84 +2.84%

Both tracking each other today in percentage terms.

Was thinking both would find some selling at $30/$50 and so far that's been the case.

Would be surprised if that isn't the case for the next several days.

(to be contd.)

Jeff Bailey : 3/28/2008 11:57:50 AM

11:00 AM EDT Energy Futures price capture at this Link

April unleaded (rb08j) expires on Monday as does heating oil (ho08j).

(to be contd.)

Jeff Bailey : 3/28/2008 11:49:09 AM

$GASO vs. $WTIC ... 0.50 Box Chart Link

0.25 Box Chart Link

The 0.50 box chart is more "bearish" for the crack spread observation, and since I'm more bullish the refiners, it is the one I want to use.

In a second I'll post this morning's 11:00 energy futures screen capture. Note that the above chart is at yesterday's close.

Linda Piazza : 3/28/2008 11:41:44 AM

The SPX is again attempting to move above the 15-minute 9-ema. If it's successful, the next potentially strong resistance is from 1335.25-1336 on 15-minute closes and then near 1340. For the OEX, these values are 619.20-619.90 and then 622. Remember, however, that these indices have not yet been successful in breaking free of the 9-ema's potential resistance. Don't count on higher values being tested, although do factor in the possibility.

Keene Little : 3/28/2008 11:34:29 AM

Not much to comment on here. In fact it's downright boring to watch. The pullback from Monday's high continues to look like some kind of bullish flag pattern but that hasn't meant a whole lot yet. SPX has dropped down to a 50% retracement of the leg up from last Thursday's low (62% for the DOW) but as shown on the 30-min chart, price is currently in the middle of the flag. No trade recommendations here: Link

Jane Fox : 3/28/2008 11:33:14 AM

Here is why I think the next move is up . Link

Jane Fox : 3/28/2008 11:31:54 AM

Markets are consolidating sideways but the VIX is tellling me the next move is up.

Linda Piazza : 3/28/2008 11:22:23 AM

Still no 15-minute closes above the 15-minute 9-ema for the SPX and OEX. Those are 1329.64 and 616.81, respectively.

As these indices get pressured lower toward next strong potential support, bears need to keep their profit-protecting plans in place. It's been a long while since we got a pop up toward the top of these indices' declining price channels, so that could happen at any time. So could further slides lower, and that actually looks the most likely, but these setups just do not give prove reliable lately. I can't emphasize that enough.

Jeff Bailey : 3/28/2008 11:20:11 AM

DIA, SPY, IWM and QQQQ daily interval montage. Stochastics (decent tool for range-bound analysis) turning lower. Some observation regarding SPY "weaker" relative to its 21-day SMA and 50-day SMA. QQQQ has been a bit stronger. IWM and DIA, while worlds apart regarding market capitalization, rather similar. Link

Jeff Bailey : 3/28/2008 11:11:58 AM

11:00 Internals found at this Link

Linda Piazza : 3/28/2008 11:10:07 AM

The USDJPY is still dropping. It's now at 99.45, testing potential Ketner support on 15-minute closes that it needs to hold if it's going to provide any kind of short-term corroboration of bullish hopes for equity traders.

Linda Piazza : 3/28/2008 10:58:18 AM

The SPX is now looking a bit stronger than the OEX, but, like the OEX, unless something changes, it looks as if the SPX could get pressured lower, perhaps at least to that 1325-1325.25 test and maybe toward 1322. Like the OEX, a signal that something had changed would be 15-minute closes above the 9-ema, now at 1330.55.

Jeff Bailey : 3/28/2008 10:57:33 AM

Legg Mason Seeks Liquidity Solutions for Auction Rate Preferred Securities ... Company Press Release Link

LM $54.34 -2.78% ...

Linda Piazza : 3/28/2008 10:56:53 AM

Unless something changes, it's looking more and more likely that the OEX could get pressured down to 687 and maybe even 684.50-685. What would be a signal that things had changed? A first signal might be sustained 15-minute closes above the 9-ema, now at 693.77.

Jane Fox : 3/28/2008 10:55:06 AM

WASHINGTON (MarketWatch) -- Growing concerns about the economy, unemployment and inflation have pushed consumer sentiment to its lowest since 1992, according to a Friday report from University of Michigan/Reuters.

The U.S. consumer sentiment index fell to 69.5 in March from 70.8 February. Economists surveyed by MarketWatch were looking for a March result of 69.6.

"A recession has occurred whenever the sentiment index has declined as much as it has fallen during the past year, including the recessions occurring from the mid-1950's to the early 2000's," said Richard Curtin, the director of the survey.

The expectations index declined to 60.1 from 62.4, reaching its lowest since 1991. The current conditions index rose to 84.2 from 83.8 in February.

Among respondents, 86% said the economy has already slipped into recession, according to the survey. Consumers have adopted "much more cautious spending plans, shifting more toward repaying debts and rebuilding their savings," according to the survey.

"Consumers are now more in favor of repaying credit cards and rebuilding their reserve funds so that they have the needed financial flexibility to handle any future twists and turns in the economy," Curtin said.

Jane Fox : 3/28/2008 10:37:19 AM

VIX continues to hover at daily lows so the bulls are lurking in the crevices and the bears need to beware.

Keene Little : 3/28/2008 10:32:21 AM

So much for a bullish bounce as the buying spurt once again had no follow through. MER continues sink lower as well. The choppy decline continues to suggest this week's pullback is only a correction of the rally to Tuesday's high. The conservative way to buy it is to wait for a break above the flag pattern. In the meantime the short term trend is obviously down.

Linda Piazza : 3/28/2008 10:32:12 AM

Strong drop in the USDJPY over the last 15-minute period, but that drop is still within a chop zone, so not particularly helpful as a forecast for equities. Equity bulls don't want to see it sustain values below about 99.45, though that would just drop the USDJPY toward further potential support at Wednesday's low of 98.73. The USDJPY is 99.78 as I type.

Jeff Bailey : 3/28/2008 10:31:31 AM

Delinquencies Edge Up On Commercial Real-Estate Loans

DJ- Fitch Ratings said delinquencies on U.S. commercial mortgage-backed securities edged higher in February on an increase at multifamily properties, such as apartments.

The rate in delinquencies on CMBS rose to 0.3% from the historic low of 0.27% reached in January. Managing director Susan Merrick said Friday that $130 million in newly delinquent multifamily loans "were the major contributor" to the increase.

She added, "Multifamily delinquencies continue to be overrepresented," making up 60% of all delinquent loans - four times its share of all Fitch-rated commercial loans.

Delinquent multifamily loans were up 14.5% to $1 billion at the end of February compared with a month earlier. Hotel delinquencies increased 15% on the addition of three newly delinquent hotels totaling $11.3 million.

Commercial real estate has begun to weaken, and some banks and brokerage firms have been scrambling in recent months to hedge commercial real-estate loans.

Fitch's index measures loans that are at least 60 days delinquent in the $562 billion Fitch-rated portfolio, totaling approximately 42,000 loans.

Jeff Bailey : 3/28/2008 10:29:46 AM

ECB: To Offer Supplementary 6-Mo, 3-Mo Funds To Ease Strain

Linda Piazza : 3/28/2008 10:28:46 AM

The OEX's 15-minute 9-ema is now about 617.50.

Linda Piazza : 3/28/2008 10:28:23 AM

So far, the SPX still can't maintain 15-minute closes above the 15-minute 9-ema, now at about 1331.60. It's still testing it, though, and a bump up towrd 1336.60-1340.80 wouldn't surprise me. Neither would a downturn toward 1325-1326. And therein lies the problem for traders trying to make decisions: each looks equally possible.

Jeff Bailey : 3/28/2008 10:17:15 AM

JC Penney Cuts 1Q View; Easter Sales Slump

JCP $36.63 -9.57% ...

Linda Piazza : 3/28/2008 10:07:57 AM

I'm watching the RUT for clues. The RUT has risen to test potentially strong Keltner resistance on 15-minute closes now grouped just below 696. The RUT is 694.94, and it, like the SPX, is churning inside a descending price channel that began forming earlier in the week. The RUT's example began forming Tuesday.

Linda Piazza : 3/28/2008 10:05:27 AM

So far, the SPX's 15-minute 9-ema still is resistance on 15-minute closes. That's now 1331.85. So? We have no resolution yet. The SPX is just chopping around within that descending price channel. Resistance appears to be firming near the top of that channel, with the top now at about 1341. Traders should then look for the possibility that, if the SPX should rise up through that channel, it could get turned lower again anywhere from about 1336.70 to 1341. Traders should also consider the possibility that the SPX will continue to churn within that price channel, and that if it breaks through about 1325-1326 on the next downturn through the channel, if there is one, it might eventually drop toward 1315-1316.

Linda Piazza : 3/28/2008 9:55:31 AM

The A/D line is now right back up to challenge that potential Keltner resistance again. Have I said yet today that these are crazy markets? When something is knocked back that quickly and thoroughly from resistance, it doesn't usually jump right back up to it again. Potential Keltner resistance extends back up to about 500 now on 15-minute closes, with the A/D line now at 411. Best-fit descending trendline resistance (potential) is near 680.

Jane Fox : 3/28/2008 9:55:25 AM

AD line is a very neutral +393 but VIX is making new daily lows so the bulls have the ball but do not have field position.

Keene Little : 3/28/2008 9:55:00 AM

ES tagged its overnight low and bounced. Now let's see if it can run up and tag its overnight high (1340.50).

Keene Little : 3/28/2008 9:51:37 AM

MER keeps working its way lower so that's not a helpful sign for bulls. It just closed its gap from March 18th at 41.06 but so far no bounce (trading 40.80 currently).

Linda Piazza : 3/28/2008 9:48:15 AM

Keltner outlook on the A/D line: This morning, the A/D line rose, piercing potentially strong resistance on 15-minute closes up to about 432. It then fell back from that resistance, closing the 15-minute period below both that resistance and the resistance converging with it, down near 285. This does not present a short-term bullish picture and instead presents the possibility that the A/D line could drop toward -120, which it's rapidly doing as I attempt to type faster and faster . . . whew. A/D line at 4.00.

Linda Piazza : 3/28/2008 9:42:28 AM

As you're making your trading decisions this morning, remember that March's revised Michigan Sentiment is released as 10:00 am ET. That could potentially be a market moving number.

Linda Piazza : 3/28/2008 9:38:55 AM

Remember that both the SPX and the OEX are just climbing within those short-term (since Monday afternoon) descending regression channels they've been forming. While they can break to the upside, of course, out of those channels, try not to form too many opinions about where these indices are going to go or how they're going to behave while they're in these channels. You saw some examples of how difficult predictions are over the last few days.

Linda Piazza : 3/28/2008 9:36:00 AM

First potential resistance for the OEX on 15-minute closes, the 15-minute 9-ema is currently being tested, with that average now at about 617.85 on 15-minute closes. Next resistance, potentially stronger, is grouped from 620.36-620.91.

Linda Piazza : 3/28/2008 9:34:40 AM

The SPX's first potential resistance on 15-minute closes, the 15-minute 9-ema, is now 1332.62. Potentially stronger resistance groups from 1336.85-1339.95.

Keene Little : 3/28/2008 9:25:54 AM

It looks like we'll start in the green this morning as equity futures are up. They're currently at the middle of their overnight range (which for ES was about 11 ES points) and that leaves us vulnerable to potential whipsaw if the high and low are tested early.

Jane Fox : 3/28/2008 9:16:07 AM

Gold's zone at 940-960 did not hold up as support but has become resistance. Link

Jane Fox : 3/28/2008 9:13:22 AM

The overnight session was contained within the respective previous day ranges so no previous day high or low was breached. Interestingly though both the S&P (ES) and DWO (YM) futures are now testing their overnight lows whereas the NDX (NQ) futures are not. Yesterday NQ was the weaker market. Link

Jane Fox : 3/28/2008 8:54:22 AM

Dateline WSJ - WASHINGTON -- U.S. personal spending slowed to a crawl in February even as income accelerated and inflation showed signs of relaxing, indicating consumer caution in the face of a soft economy.

Personal consumption increased by 0.1% compared to the month before, the Commerce Department said Friday. January spending rose an unrevised 0.4%. The performance in February was the weakest since a 0.1% dip in September 2006.

The report showed personal income increased at a seasonally adjusted rate of 0.5% compared to the month before. Income rose an unrevised 0.3% during January.

Economists had forecast a 0.3% increase in personal income during February and a 0.1% drop in consumer spending.

Consumer spending makes up about 70% of U.S. gross domestic product and, therefore, is a driver of the economy. Adjusted for inflation, consumer spending in February was flat, according to the report Friday on income and spending. The data revealed a price index for personal consumption expenditures rose 0.1% in February compared to the prior month. It rose 0.3% in January. The PCE price index excluding food and energy, or core PCE, also rose 0.1% in February.

Compared with a year earlier, the PCE price index climbed 3.4% in February. The year-over-year climb in January was 3.5%.

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