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Keene Little : 4/8/2008 11:43:10 PM

Wednesday's pivot tables: Link and Link

I've been showing the SPX and DOW charts lately with their uptrend lines from March 17th and how the sideways consolidation we've been in the past week could lead to another leg up in its rally (to target SPX 1416-120 and DOW 13K). NDX has a similar setup and Tuesday's price action had NDX tagging its uptrend line and closing on it: Link

If we do get another rally leg I'll be looking for a potential throw-over finish above the top of it and in the Fib projection range of 1927-1943 (1945 by a Fib projection for an A-B-C correction off the January low shown on the daily chart: Link

These Fibs and trend lines, including the downtrend line from October, all cross next week which of course is opex week. It makes for an interesting possibility for an end to the correction to be followed by a renewed decline. But a continuation lower on Wednesday could set up a steeper decline so we should get an early answer in the morning.

OI Technical Staff : 4/8/2008 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 4/8/2008 5:33:54 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 4/8/2008 5:11:30 PM

Closing Internals found at this Link

Jeff Bailey : 4/8/2008 4:58:00 PM

Polaris (PII) $43.69 +0.85% ... ticks lower at $42.75

Jeff Bailey : 4/8/2008 4:56:24 PM

Arctic Cat (ACAT) $7.37 +0.68% ... plunges to $6.34 on revised Q4 Outlook. Company Press Release Link

Jeff Bailey : 4/8/2008 4:50:54 PM

Procter & Gamble Declares a 14% Dividend Increase

DJ- The Procter & Gamble Company (PG) announced that its Board of Directors declared an increase in the quarterly dividend from thirty-five cents ($0.35) to forty cents ($0.40) per share on its Common Stock and on the Series A and Series B ESOP Convertible Class A Preferred Stock of the company, payable on or after May 15, 2008 to shareholders of record at the close of business on April 18, 2008. This represents a 14% increase compared to the prior quarterly dividend.

The company has been paying dividends without interruption since incorporation in 1890. This is the 52nd consecutive fiscal year that P&G has increased dividends.

PG $70.65 +0.19% ...

Jeff Bailey : 4/8/2008 4:28:51 PM

QQQQ goes out at Q Pivot.

Jeff Bailey : 4/8/2008 4:20:37 PM

HAL $41.91 +0.64% ...

Jeff Bailey : 4/8/2008 4:20:21 PM

SLB $89.62 -1.05% ...

Jeff Bailey : 4/8/2008 4:19:40 PM

Mitcham Industries (MIND) $19.39 +1.35% ... gets a pop on headline numbers. $20.05 extended.

Jeff Bailey : 4/8/2008 4:17:20 PM

Sealy Corp. (ZZ) $7.10 -2.60% ... released for trade. $7.45 extended.

Jeff Bailey : 4/8/2008 4:16:36 PM

California Pizza Kitchen Raises Q1 EPS 7c-EPS 8c

CPKI $14.28 -4.35% ... jumps to $15.10 extended

Keene Little : 4/8/2008 4:12:16 PM

The upside projection for the DOW, for the 2nd leg up in today's bounce to become 162% of the 1st leg up, to 12663 is where I'd like to test the short side. From there two equal legs down from Monday's high would be at 12457 and that would put it very close to the bottom of its up-channel from the March low. If it plays out that way it will have successfully whipped traders to a pulp. Link

Jeff Bailey : 4/8/2008 4:04:38 PM

Sealy (ZZ) Suspends Quarterly Dividend ... ZZ $7.10 -2.60% ...

Linda Piazza : 4/8/2008 4:00:28 PM

Jeff, I'm glad you added that codicil to your 3:57:29 post because I was having trouble figuring that headline out!

Jeff Bailey : 4/8/2008 3:59:18 PM

I say Washington DC should throw in another $1 billon into the "housing bill" for some bug repellant.

Jeff Bailey : 4/8/2008 3:57:29 PM

US Mortgage Crisis Extends Into Spring Causing Concerns For Increased Mosquito Populations and West Nile Virus

Jane Fox : 4/8/2008 3:55:28 PM

Tomorrow we have the

7:00a.m. MBA Mortgage Refinancing Index. Previous: -38.1%.

10:00a.m. Feb Wholesale Trade. Expected: +0.5%. Previous: +0.8%.

Linda Piazza : 4/8/2008 3:54:18 PM

What to say? How about a chart instead? Link

Jane Fox : 4/8/2008 3:54:08 PM

Wow can you say flat? Not sure if you can look at this as bullish or bearish but I do not that you can say everyone is waiting for someone else to blink. The fact that the SPX (and all the other major equity markets as well) are in a very narrow trading range then you have a day like this is telling you there is no one out there willing to make the first move. Link

Linda Piazza : 4/8/2008 3:41:17 PM

The OEX's daily 120-ema is now at 633.92, and it would be quite a leap for it to scramble back above that by the end of the day. It could happen, of course, and, if it did, that would, in my opinion, lessen but not undo the chances that it would need to retreat to the 10-sma as part of this particular consolidation pattern. The 10-sma is now 626.11. The OEX is at 631.01 as I type.

Linda Piazza : 4/8/2008 3:35:59 PM

No change in overall tenor yet, but if the SPX can scramble back above the potentially strong resistance gathering up to 1368.94 and maintain values above that, an improvement in short-term tenor will have been shown, particularly if it then maintains those values into the close and so closes the day above 1366.35. Don't count on that meaning too much other than that the chances of a dip to the 10-sma aren't quite as strong, however, as the SPX will still be inside this long consolidation zone it's been building for a week. Still, it's something that equity bulls want to see. Unfortunately, as I typed this post, I watched the SPX spike right up to that resistance level, touching the 15-minute 120-ema and getting knocked down again, so we'll have to see what happens next.

Linda Piazza : 4/8/2008 3:21:50 PM

Time to start thinking about end-of-day decisions. Although this isn't exactly a do-or-die benchmark, I'm using the daily 72-ema as one benchmark. That's at about 1366.35 this afternoon, and I think a daily close below it increases the chances that the SPX will eventually dip to the rising 10-sma. That's now at 1351.82. This doesn't guarantee such a dip but just increases the chances in my opinion, in a resumption of a former pattern for the SPX. That former pattern was a strong rise, sideways movement for about 2-5 days, a dip to the 10-sma and then a bounce from there. I'm not so sure about the bounce, and, if the SPX closes back above that daily 72-ema, I'm not too sure about the need to drop to the 10-sma, either, as it could eschew that dip altogether, doing the consolidation work by just moving sideways.

Jeff Bailey : 4/8/2008 3:15:42 PM

03:00 Internals found at this Link

Linda Piazza : 4/8/2008 3:15:31 PM

While the OEX continues to look a little worse on a Keltner basis, the SPX continues to hold up above the Keltner support on 30-minute closes, potentially strong, that now gathers from 1359.19-1361.07. However, it is not sustaining 15-minute closes above the 15-minute 9-ema, now at about 1364.50, unless it bounces quickly in the next few seconds, which it may in fact be doing as I type.

Keene Little : 4/8/2008 3:12:31 PM

I'm showing on the SPX 60-min chart the possibility for the start of another rally leg (with or without a whipsaw move tomorrow, shown in light green) that will take it up to the 1420 area by next week (opex). A break below 1355 would set off some sell signals. Link

Jane Fox : 4/8/2008 3:11:24 PM

The Russell 2000 cash index is in the same kind of noncommittal pattern as is the SPX and DOW cash indexes. Here as well, the MACD is suggesting that resistance will break before support or, as I stated in my post on the SPX, the follow through will be to the upside if/when that happens. Link

Keene Little : 4/8/2008 3:06:56 PM

The type of corrective pattern since this morning's low that I believe we're in is called an a-b-c expanded flat correction (in EW terminology). After wave-a up this morning the pullback (wave-b) can make a marginal new low, as NDX and SPX did, before the wave-c rally. Wave-c typically projects to 162% of wave-a in this pattern and that gives us an upside projection at SPX 1372.61, DOW 12663, as shown on this SPX 10-min chart: Link

For SPX that places it near the 38% retracement of the decline from Monday's high and for the DOW it's closer to a 50% retracement. Being an upward correction it should lead to another leg down tomorrow as depicted. I'm not quite sure about the larger pattern yet, especailly with the uptrend line from March 17th so close. I'll just have to see how the pattern develops but for now the upside potential is to 1372-1373. It would be more immediately bearish if price breaks lower from here but only if it breaks its uptrend line now near 1358.

Jane Fox : 4/8/2008 3:02:41 PM

WASHINGTON (MarketWatch) -- When Federal Reserve officials gathered behind closed doors last month to set monetary policy, they confronted new projections of much slower growth, leading them to brush aside worries about rising prices and cut rates aggressively, according to a summary of the meeting released Tuesday.

The officials learned that the Fed staff had slashed its growth forecast for 2008 in its projection prepared for the meeting.

Although spending and production data early in the year wasn't much weaker than the staff had expected, "many other indicators of real activity were more negative," the minutes said.

The super-secret Fed staff forecast carries a lot of weigh with policymakers. For the first time, the Fed staff forecast showed an actual "contraction" in the first six months of the year, with only "a slow rise" in the second half.

While growth was expected to pickup in 2009, "resource utilization was anticipated to follow a lower trajectory than in the previous forecast."

Given the deteriorating economic outlook, the majority of FOMC members believed that the substantial easing in March was justified.

Jeff Bailey : 4/8/2008 3:01:39 PM

10-year edges green ... up 0.4 bp to 3.56.

Keene Little : 4/8/2008 2:53:04 PM

The little down-channel from this morning's high has now been broken. It looks like we might get that rally leg after all.

Linda Piazza : 4/8/2008 2:53:47 PM

I've been noting all day that the OEX looked a little weaker on a Keltner basis than did the SPX. For example, the morning's first dive took it all the way to potential support on the 30-minute chart at the 120-ema while the SPX held well above that support. As you can imagine, this latest decline took the OEX well into that potential support zone rather than almost touching it as the SPX did. OEX bulls (and SPX ones) need to see a strong bounce among the generals that compose the OEX. For a first step, the OEX is currently challenging the 15-minute 9-ema again, with that at about 629.85, and equity bulls need to see it maintaining 15-minute closes above that, and, preferably, above Keltner resistance at about 630.40. That's just a first step and just keeps the OEX inside the chop zone from today. It would need 15-minute closes above 633.30 to look as if it were really improving in tenor.

Linda Piazza : 4/8/2008 2:48:10 PM

So far, the SPX stopped its descent at the potential support zone (30-minute closes) now from 1359.35-1360.20, and it's attempting to bounce from that support zone. I warned earlier that bears needed to update their profit-protecting plans in case this zone was tested, but that doesn't mean that it will necessarily continue to hold. It is a possibility, but the SPX remains, so far, trapped between this support on this 30-minute chart and the equally potentially strong resistance on the 15-minute chart, with that now weakened a little, but near 1366.65-1367.10.

Jeff Bailey : 4/8/2008 2:41:18 PM

30-year has whipped around .... up 1.4 bp

Jeff Bailey : 4/8/2008 2:40:41 PM

Still rather quiet ... the $ softened against the yen to 102.20, but that's about it.

Keene Little : 4/8/2008 2:30:07 PM

This could waterfall lower this afternoon if it doesn't turn back up soon. But SPX is now into a potential support zone at 1355-1361.

Linda Piazza : 4/8/2008 2:28:49 PM

The SPX approaches potentially strong support on its 30-minute chart, with that support now from about 1359.25-1360 on 30-minute closes. Bears should be aware that could be potentially strong and adjust their profit-protecting plans accordingly. My own scenario allows for a further drop, closer to the daily 10-sma, but doesn't promise it.

Keene Little : 4/8/2008 2:18:32 PM

The pullback from this morning's high continues to look more like a bull flag correction but it can't drop much lower without looking more bearish. So far the new low for SPX is being met with bullish divergences on the 5 and 10-min charts. If we do get another rally leg it's likely to be very sharp and above this morning's high so trail a stop lower if you're short.

Jeff Bailey : 4/8/2008 2:03:46 PM

SPY 136.33 -0.45%

SPX 1,364.32 -0.59% ...

Jeff Bailey : 4/8/2008 2:03:11 PM

FOMC Minutes (3/18/08 Link

Jeff Bailey : 4/8/2008 1:59:17 PM

USO $87.53 +0.67% ...

Jeff Bailey : 4/8/2008 1:58:50 PM

Gadhafi Foundation: Libya Frees 90 Militants

DJ- Libya has freed 90 members of the Libyan Islamic Fighting Group, an Islamist group that al-Qaida hailed as a new affiliate last November, the Gadhafi Foundation headed by the son of Libyan leader Moammar Gadhafi said on Tuesday. "The dialogue opened with leaders of the Libyan Islamic Fighting Group... has resulted in the release of 90 members, which represents one third of the membership of this group," said the foundation headed by Seif al-Islam Kadhafi. Al-Qaida had announced in an audiotape posted on an Islamist Web site last November that the Libyan group had joined the jihadist network. "The esteemed leaders of the Libyan Islamic Fighting Group have announced their allegiance to the al-Qaida network," al-Qaida number two Ayman al-Zawahiri said in the recording. The Libyan group was the second Islamist organization in North Africa whose allegiance was claimed by al-Qaida after Algeria's Salafist Group for Preaching and Combat joined in January last year.

Keene Little : 4/8/2008 1:49:06 PM

GOOG is almost down to its uptrend line from the last low on March 31st, currently near 462, so it could be due a bounce soon.

Linda Piazza : 4/8/2008 1:48:12 PM

Time to look again at potential support on 30-minute closes. The lower end of the support zone is at 1359.26 on the SPX and 628.17 on the OEX.

Keene Little : 4/8/2008 1:48:02 PM

GOOG is down $12 (-2.6%) today after tagging the top of its bear flag pattern yesterday: Link . It looks like a pretty puny drop on the daily chart. The bottom of the flag pattern is near 450 and the current max pain value for opex is 450-460.

It's not clear yet whether yesterday's high could have been it for the bounce or if there will be one more push higher (pink) to perhaps the $500 area before the 4th wave correction finishes. I had recommended a short against yesterday's high and that still stands and if we do get one more push higher then the new high will set up another shorting opportunity.

Jeff Bailey : 4/8/2008 1:39:02 PM

INTC's is currently $22.50 ... $1.50 inc.

Jeff Bailey : 4/8/2008 1:31:36 PM

VLO's is currently tabulated at $52.50 ... $2.50 inc.

Jeff Bailey : 4/8/2008 1:26:30 PM

Other notables ...

TSO $30.00 ... $5 inc.
TOL $22.50 ... $2.50 inc.
PM/MO $70.00 $5 inc.
PBR $105.00 ... $5 inc.
WHR $90.00 $5 inc.
SWC $15.00 ... $2.50 inc.
YRCW $17.50 ... $2.50 inc.
CME $500 ... $10 inc.
BOOM $45.00 ... $5 inc.

Jeff Bailey : 4/8/2008 1:20:43 PM

VIX.X down 12% over last 20DyNet% so more call buying/put selling than there's been call selling/put buying.

For those that will actually look at some option montages and study where the OI is at.

Linda Piazza : 4/8/2008 1:19:43 PM

Looking for a new career during recessionary or slow economic times? Our local news is presenting a segment on "The Repo Man." It appears that business is booming, with most working overtime. They're seeing a pickup in business in upscale neighborhoods and marinas, with luxury cars and boats being repossessed.

Jeff Bailey : 4/8/2008 1:17:55 PM

Some April "Max Pain Theory" Values

DIA $124 ... $1 increments.
SPY $135.00 ... $1 inc.
QQQQ $45.00 ... $1 inc.
IWM $70.00 ... $1 inc.
SMH $29.00 ... $1 inc.
RKH $130.00 ... $5 inc.
XLF $25.00 ... $1 inc.
USO $84.00 ... $1 inc.
IEF $91.00 ... $1 inc.

Jeff Bailey : 4/8/2008 1:09:28 PM

01:00 Internals found at this Link

Jeff Bailey : 4/8/2008 1:05:57 PM

Not even 1 billion at the NASDAQ yet.

Linda Piazza : 4/8/2008 1:05:00 PM

I hadn't read Jane's "nothing much to say" comments before I added my own. Jane and I look at different charts using different tools, so that just points to how difficult this market environment is.

Linda Piazza : 4/8/2008 1:03:49 PM

Nothing has changed and there's nothing much to say any differently. The SPX and OEX are being pressured sideways/down, but SPX bulls aren't giving up much ground. The decline looks as unconvincing as the bounce was earlier this morning.

Jeff Bailey : 4/8/2008 12:59:27 PM

Somebody's working some stock in the CME here at $512.50

Jane Fox : 4/8/2008 12:50:57 PM

I don't think I need to say much more than, "Just look at these four charts." Not what you would call a good trading day. Link

Keene Little : 4/8/2008 12:41:30 PM

With the little deeper pullback from this morning's high, a projection for two equal legs up in the bounce off this morning's low (assuming for the moment we'll get another leg up) gets SPX to gap closure at 1372.58 (ES 1375 which is above its gap since it dropped down a little after yesterday's 4:00 close). In the meantime, chop chop.

Jeff Bailey : 4/8/2008 12:41:26 PM

NVLS $22.22 -6.67% ...

Jeff Bailey : 4/8/2008 12:41:02 PM

KLAC $41.45 -3.17% ... gives back some of yesterday "upgrade" gains. Today's low has been $40.96.

Jeff Bailey : 4/8/2008 12:37:45 PM

Devon Energy (DVN) Agrees to Sell Assets In Equatorial Guinea for $2.2 Billion

DVN $110.88 +2.25% ...

Jeff Bailey : 4/8/2008 12:36:07 PM

Venezuela Hopes For 19.5% Inflation For 2008

Linda Piazza : 4/8/2008 12:31:44 PM

I know you're all frustrated with all these comments about the choppy nature of the trading, but isn't it good to know when trading conditions might not be optimal? After a discussion with a trading friend last night after my "bored to tears" comment yesterday, I went back and looked at my Market Monitor comments beginning the morning of April 2. Before the market opened that morning, I noted that "the first question to ask yourself is whether you think there could be a smaller-range day today, particularly a doji-type day." That evening, after the doji-type day was produced, I warned that the two possibilities existed for the next day: a reversal that completed an evening-star pattern or the beginning of a consolidation period. I really didn't have a good feel for which it might be since the outcome was likely going to be influenced by some economic numbers. The next afternoon, I noted that the "second day of sideways consolidation improves the chance that this is just sideways consolidation, perhaps coupled with an eventual test of the rising 10-sma before a bounce."

Others noted the same chart characteristics. What I'm saying is that although such times are frustrating to the extreme (except for credit spread traders watching their sold strikes lose premium), it's helpful to know when they might occur. It's just as helpful knowing when the trade setups just aren't there as it is to know when they are.

Jeff Bailey : 4/8/2008 12:30:36 PM

SMH $29.59 -2.31% ... did kiss our blue 19.1% at around 12:00 PM.

Jeff Bailey : 4/8/2008 12:26:34 PM

GLD $90.22 -1.04% ... should it backfill its morning gap withouth the eur/$ trading 1.573, I consider that type of move in gold just some filling of a void.

Linda Piazza : 4/8/2008 12:20:37 PM

The downturn over the last hour has been as choppy as the rise was off the early morning low. I said earlier that it would take sustained closes above the resistance zone on the 15-minute chart to show that bulls were winning the day and sustained 30-minute closes beneath the support zone there to show that bears were, and neither has happened yet. Resistance now layers up to 1367.93 on 15-minute closes. Support and a potential target is now 1358.36-1359.92. The SPX is 1365.83 as I type.

Keene Little : 4/8/2008 12:18:06 PM

The pullback looks like it could be part of a larger upward correction in which case this morning's low should hold. But that's just a guess--not much to go with here.

Linda Piazza : 4/8/2008 12:17:21 PM

Rising costs of equipment coupled with difficulty obtaining financing are trickling through to many segments of the economy. As a book writer, I maintain a subscription to Publisher's Weekly. This morning, there's an announcement that the independent printer, Stinehour Press, will shut its doors within a few months. This printer has been in business since 1952 and has received more than 50 awards in the last couple of years, but those rising costs and difficulty with financing have converged, prompting the decision to shut the company's doors. The CEO says that he "hasn't given up hope for a last-minute reprieve."

Jeff Bailey : 4/8/2008 11:56:39 AM

The pound has fallen below its WKLY, MONTHLY and QTRLY pivot. Has seen trade at WKLY S1 (1.976) and correlative DAILY S2 1.977.

Linda Piazza : 4/8/2008 11:55:29 AM

No sooner did I list my concerns about the SPX's inability to sustain values above the 15-minute 9-ema but also say that there was some slight improvement on the Keltner chart than the SPX pierced that 10-sma again but then immediately fell back. The SPX is still finding resistance on 15-minute closes and, as a result of that failed resistance test, it's now testing that support just above 1366 that it really should hold if it's going to avoid turning lower again. The SPX is 1365.75 as I type.

Jeff Bailey : 4/8/2008 11:53:30 AM

GBP/$ 1.9684 -0.99% ...

Jeff Bailey : 4/8/2008 11:52:04 AM

$/JPY 102.56 +0.16% ...

Jeff Bailey : 4/8/2008 11:50:33 AM

EUR/$ 1.5707 -0.03%

Keene Little : 4/8/2008 11:45:24 AM

I thought they were going to rally this a little higher and now NDX just broke below its last pullback low. This is just a choppy mess.

Jeff Bailey : 4/8/2008 11:44:44 AM

Cemex (CX) $27.13 -0.84% Link ...

Jeff Bailey : 4/8/2008 11:43:31 AM

Venezuela Nationalization Seen As Mild Negative For Cemex (update)

DJ (partial) - Venezuela's plans to nationalize the cement industry are mildly negative for Mexican cement giant Cemex SAB (CX), which is the leading cement producer in the South American country, according to a number of analysts. "In the event the nationalization takes place, the impact on Cemex's results would be very moderate," Ixe brokerage said in a note. "Nor is it considered a country with a lot of growth potential." Cemex estimates that Venezuela currently accounts for about 2% of its global sales. Ixe affirmed its buy rating and year-end price target of 36.30 pesos ($3.44) for Cemex's local CPO shares, while BBVA Bancomer reiterated Tuesday morning its buy recommendation and price target of MXN41.50. Last Thursday, Venezuelan President Hugo Chavez announced plans to nationalize the country's cement industry, which is largely controlled by Cemex, France's Lafarge SA (LFRGY) and Swiss-based Holcim Ltd. (HOLN.VX). Oil Minister Rafael Ramirez said earlier this week cement companies will have the option of becoming partners with the government, which plans to take at least 60% stakes in their Venezuelan operations. Monterrey-based Cemex operates three cement plants with a capacity of 4.6 million metric tons a year and 29 concrete plants in Venezuela. The Mexican firm owns 75% of Cemex Venezuela, with the other 25% listed on the local stock exchange.

Jeff Bailey : 4/8/2008 11:39:56 AM

At 11:00 AM EDT, DXY was 72.31.

CRY was 401.16

Jeff Bailey : 4/8/2008 11:37:22 AM

PM $50.69 +0.03% ... up a fraction.

PBR $113.31 +1.98%

Jeff Bailey : 4/8/2008 11:36:33 AM

Money Flows @ 11:30 AM EDT Link

Keene Little : 4/8/2008 11:36:18 AM

Pressing higher again. Two equal legs up for today's bounce would take SPX and DOW up to about the 50% retracement of the decline from yesterday's high (near SPX 1374 and DOW 12630). That also is near the bounce high late yesterday afternoon and would be the next level I'd consider a short play. If the rally makes it much higher than that I'll start to think a little more bullishly about this market.

Linda Piazza : 4/8/2008 11:31:41 AM

So far, the A/D line consolidates sideways at/just below its 15-minute 9-ema. I thought consolidation or a pullback was most likely and this sideways consolidation is the most bullish of the two scenarios. There's some slightly improvement on the SPX's 15-minute chart, too. Not enough to be definitive and the SPX still isn't sustaining values above its 15-minute 9-ema, but it is sustaining values above another potential support level at 1366.58. While I wouldn't call the action particularly bullish, it's at least slanting slightly more than direction. While it's consolidating sideways, equity bulls want to see it maintain support on 15-minute closes at 1366.58.

Keene Little : 4/8/2008 11:30:03 AM

Is it just me or does price action seem slower these days? SPX failed at the retest of the broken uptrend line from last Wednesday's and Thursday's lows but it's not clear whether we'll get just a pullback before pressing higher again (starting back up as I type) or if that's it for the bounce. If SPX drops lower the next possible support level will be the 30-min 100/130 moving averages so 1355-1360. And then there's the uptrend line from March 17th also near 1355. Link

Jeff Bailey : 4/8/2008 11:15:29 AM

11:00 Internals found at this Link

Linda Piazza : 4/8/2008 11:15:25 AM

The A/D line has climbed to a new high of the day, showing a much stronger climb so far than the equities. It's erased its breakdown status, but now it, too, tests its 15-minute 9-ema, with that at about -400 and with the A/D line currently at -440. Equity bulls want a strong push toward the next resistance level, now at -122, but either sideways consolidation or a pullback is more usual after such a strong climb.

Linda Piazza : 4/8/2008 11:13:20 AM

The SPX and OEX still test resistance, but until they maintain values above that resistance, the vulnerability to another downturn remains higher. That resistance is at 1368.92 on 15-minute closes for the SPX and 632.62 for the OEX. Equity bulls want to see these indices sustain 15-minute closes above those levels. Equity bears want to see the indices roll down to new lows, but as I warned this morning, those lows were moving into potentially significant support zones.

Jeff Bailey : 4/8/2008 10:54:20 AM

CHRYSLER MARCH SALES OUTSIDE NORTH AMERICA UP 7%

DJ- Chrysler reports March sales of 24,032 vehicles outside North America, up 7% from a year earlier and the highest monthly sales total on record for the company in international markets.

Keene Little : 4/8/2008 10:54:18 AM

SPX has bounced back up to the broken uptrend line from last Thursday's low so it would be a natural place for the bounce to fail.

Linda Piazza : 4/8/2008 10:52:49 AM

The OEX also challenges important potential resistance on 15-minute closes, with that resistance now stretching up to 632.65. The OEX bulls need to drive the OEX above that and sustain levels above it, particularly due to the shape of the climb. Otherwise, rollover potential remains strong, with vulnerability to a drop back into the 627.81-629.40 potential support zone (on 30-minute closes).

Linda Piazza : 4/8/2008 10:51:00 AM

The SPX now challenges the 15-minute 9-ema, with that average now at about 1369.72. The bulls have already made some progress in pushing the SPX back above the 1367-1368-ish resistance zone, but they need to drive the SPX back above that 9-ema, too, and sustain values there. This is especially true since the climb off the day's low is far from bullish looking. Another rollover and drop down to the 1357.85-1359.59 support level can't yet be ruled out.

Jeff Bailey : 4/8/2008 10:47:35 AM

Petroleo Brasileiro (PBR) $113.31 +1.98% Link

Linda Piazza : 4/8/2008 10:47:22 AM

As expected, Japan's government has named a nominee for the Bank of Japan's governorship. There's been a push to find a new governor before the G-7 meeting the end of this week and the two-day Bank of Japan meeting that began last night. Masaaki Shirakawa, the acting governor after Fukui's departure, has been named as a nominee. He was grilled last night by the lower house of the Diet, with the main opposition Democratic Party of Japan deciding to accept his nomination. Chances increase that he will be the next Bank of Japan governor.

Today he said that the economy is steady, but I couldn't find anyone giving an opinion of whether he'd be likely to call for more coordination and/or intervention among G-7 participants to strengthen the dollar against other currencies. Marco Bardelli of UBI Banca believes the reaction to his naming of governor, if that happens, will be positive. He supposedly has a good track record with the BoJ and will act independently of the government, a legitimate concern, he believes. Bardelli believes that the possible appointment of former Ministry of Finance member Hiroshi Watanabe as a deputy governor would further Japan's coordination with other G-7 countries, but there's controversy over his appointment. It's far less certain as there's fear that he won't be independent enough due to his government position.

The Bank of Japan isn't expected to change rates at this meeting, but just be aware that there's the potential for currency moves this week, with any currency moves, should they occur, potentially impacting equity performance.

Keene Little : 4/8/2008 10:45:38 AM

Getting closer to gap closure now. The price pattern still looks more corrective than impulsive in the bounce so watch for a potential short play to set up.

Jeff Bailey : 4/8/2008 10:45:31 AM

EIA HIKES VIEW ON WEST TEXAS CRUDE

DJ- Agency revises higher its forecast, saying U.S. benchmark West Texas Intermediate crude oil prices will continue to surge, with 2Q prices expected to average near $104 a barrel, up 60% from a year ago, and seeing full-year prices averaging $100.61, a 39% jump from 2007.

$WTIC ... $0.50 box to match futures Link

Jeff Bailey : 4/8/2008 10:43:45 AM

US Oil Fund (USO) $87.29 +0.41% Link ... sitting atop M R1 ($86.59)

Jeff Bailey : 4/8/2008 10:39:38 AM

OPEC SEES NO NEED FOR MORE CRUDE

DJ- OPEC President Chakib Khelil says the producer group has no plans to increase oil supply to tame prices that are flirting again with record highs, pinning high prices on a weaker U.S. dollar and financial speculators, not a supply shortage.

Jane Fox : 4/8/2008 10:38:39 AM

SPX has been trading in this small range for 5 days now and at some point it will break out. Of this I know for sure but as to direction I can only speculate. I think the MACD is telling us the breakout will be to the upside, which doesn't mean it can't spike down then back up again but I think the follow through will be to the upside. Link

Jeff Bailey : 4/8/2008 10:37:53 AM

Garmin Ltd. (GRMN) $48.04 -8.84% Link

Jeff Bailey : 4/8/2008 10:36:51 AM

TOMTOM WARNS AFTER LOWERING PRICES

DJ- Dutch navigation solutions provider issues an unexpected profit warning, seeing a low single-digit operating margin after being forced to lower prices earlier than expected. It says problems won't jeopardize its Tele Atlas bid.

Jane Fox : 4/8/2008 10:34:09 AM

WASHINGTON (MarketWatch) -- In a sign that the housing market may weaken further, an index of sales contracts on previously-owned U.S. homes fell 1.9% in February from the prior month, the National Association of Realtors reported Tuesday.

The index, which is considered a leading indicator of existing home sales, was down 21.4% from the February 2007 level.

"The slip in pending home sales implies we're not out of the woods yet, though an era of successive deep sales declines appears to be over," said Lawrence Yun, NAR's chief economist, in a statement.

By region, February's pending home sales index fell 9.8% in the West, while the South had a 5.5% drop and the Midwest experienced a 3.7% decline. In the Northeast, the index rose 3.2%. January's level was revised slightly higher. NAR expects the aggregate existing-home price to "ease" this year by 1.4% to a median of $215,800.

Jeff Bailey : 4/8/2008 10:33:09 AM

Toyota Motor (TM) $96.60 -0.89% Link ... challenges its 1/22/08 low close.

Jeff Bailey : 4/8/2008 10:30:37 AM

FANNIE, FREDDIE UPGRADED BY LEHMAN

DJ- Lehman upgrades the mortgage giants to overweight, saying their ability to deploy capital and high-return investment options have improved. Goldman Sachs, however, maintains a sell on the stocks, seeing high credit costs stretching 'to 2010 and perhaps beyond.'

FNM $30.61 +2.68% Link $27.21 +2.29% Link

Keene Little : 4/8/2008 10:29:45 AM

So far the bounce off this morning's low is not giving me a bullish impression as it looks a bit corrective. If we get gap closure I might be tempted to short it but so far there remains the potential for this morning's low to hold. Price action remains choppy and challenging to trade.

Jeff Bailey : 4/8/2008 10:28:10 AM

MORGAN STANLEY SEES CREDIT WOES CONTINUING

DJ- CEO John Mack sees hard times in the credit markets continuing for another two to three quarters but says the subprime and leveraged loan problems in the U.S. are coming to an end. He sees many investors ready to pounce on distressed assets.

MS $47.59 -1.03% Link

Keene Little : 4/8/2008 10:23:02 AM

Interesting post on Greenspan and his reaction to people starting to blame him for what has happened in the financial industry. As most of you know I've been a severe critic of Greenspan for years. I've mentioned in the past that one sign of a market top will be wider acceptance of Greenspan's mismanagement and seeing him knocked off his pedestal. That certainly appears to be happening now. It's part of the social mood swing and a big reason I believe we've entered Bear Market Phase II.

Linda Piazza : 4/8/2008 10:16:48 AM

The SPX has potentially strong resistance up to 1368.10 on 15-minute closes and then again at 1370.55, but potentially strong support at 1357.89-1359.43 (on 30-minute closes). As of this moment, a sustained drop (on 30-minute closes) below 1357.89 means that bears have won the ongoing battle; sustained moves (on 15-minute closes) above 1370.54 and maybe just above 1368.10 means that bulls have. Between those zones, the battle still rages with no clear winner.

Linda Piazza : 4/8/2008 10:14:38 AM

The OEX has potentially strong resistance up to about 633.15 but it has potentially strong support at 629.35 (on 30-minute closes) and then at 627.85. Right now, it's trapped between the two as bulls and bears battle it out. Here's how it sorts out on Keltner charts, anyway: a loss of 627.85 potential support on 30-minute closes means that the bears have won the battle over the short term, at least, and sustained moves above 633.15 (on 15-minute closes) means that the bulls have.

Jeff Bailey : 4/8/2008 10:12:08 AM

VIX.X 22.95 +2.36% ...

Jane Fox : 4/8/2008 10:12:08 AM

DAteline WSJ - WASHINGTON -- Alan Greenspan's reputation is under siege, and he's incredulous.

Hailed three years ago as "the greatest central banker who ever lived," the retired chairman of the Federal Reserve now is being criticized for his management of the U.S. economy before he retired in 2006. The Fed's low rates and laissez-faire regulatory oversight during his final years are widely blamed for sowing the seeds of today's financial crisis -- one that began in the U.S. housing market and is now battering banks, stock markets, borrowers and consumers around the world.

For much of his 18 years atop the world's most-influential economic institution, Mr. Greenspan was lionized for the economy's performance. Now, he notes, he's being second-guessed for it.

"I was praised for things I didn't do," Mr. Greenspan said during one of three interviews at his sun-drenched office in downtown Washington, D.C. "I am now being blamed for things that I didn't do."

Now 82 years old, Mr. Greenspan wants to set the record straight before the ink dries on the first draft of the financial crisis' history. The former Fed chief doesn't deny that he cares about his reputation. But the larger issue at stake, he says, is getting the lessons of the crisis right.

"The [wrong] evaluation of this period -- and how to avoid the problems associated with it -- will give you the wrong answers and the wrong policies," he says.

The scrutiny of Mr. Greenspan's record has taken on urgency now that the Bush administration and congressional Democrats are skirmishing over how to overhaul U.S. financial regulation. If Mr. Greenspan's critics prevail, then financial companies will likely face tighter oversight and less freedom in the products they offer. If Mr. Greenspan's views carry the day, the trend toward self-policing will continue. A repudiation of Mr. Greenspan's monetary policies could tempt the Fed to raise interest rates relatively quickly after the current crisis passes, and even attempt to deflate future bubbles with higher interest rates.

Jeff Bailey : 4/8/2008 10:11:46 AM

Toll Bros. (TOL) $23.51 -3.01% ... TEP-FE $2.00 x $2.05

TEP-ET $0.55 x $0.65

Jeff Bailey : 4/8/2008 10:09:10 AM

Boeing (BA) $74.14 -1.12% ... testing its 1/23/08 low. 0% conventional.

Jane Fox : 4/8/2008 10:07:12 AM

U.S. Feb. pending home sales index falls 1.9%: NAR

Jeff Bailey : 4/8/2008 10:06:24 AM

US Pending Home Sales Index -1.9% In Feb
US Feb Pending Homes Sales -21.4% From Feb 2007

A forecasting gauge of previously owned homes fell in February after rising in January.

The National Association of Realtors' index for pending sales of previously owned homes fell 1.9% to 84.6 in February from January, the industry group said Tuesday.

Private analysts projected pending sales would drop by 1.1%.

NAR's chief economist, Lawrence Yun, said existing home sales could start to show a sustained increase within a few months. "We're looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets," Yun said. "The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met."

In its monthly forecast on the industry, the NAR projected existing-home sales at 5.39 million this year and 5.74 million in 2009. That compares with 5.65 million in 2007.

The NAR pending sales index, based on signed contracts for previously owned homes, was 21.4% below the level of 107.6 in February 2007.

The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.

By region, the Northeast increased 3.2% in February from January; it fell 25.4% since February 2007. The Midwest dropped 3.7% in February from January; it fell 17.4% since February 2007. The South decreased 5.5% in February from January; it slid 30.3% since February 2007. The West decreased 9.8% in February from January; it fell 17.1% since February 2007.

Jeff Bailey : 4/8/2008 10:00:46 AM

WaMu To Raise $7B, Cut Dividend; Big 1Q Loss Seen

DJ- Washington Mutual Inc. (WM) said it will give private-equity firm TPG Inc. two seats on its board as the company raises $7 billion from the sale of equity securities to TPG and other investors as the nation's largest thrift also said it will slash its dividend to 1 cent a share.

Shares fell 6.2% to $12.33 in early trading as the struggling thrift also announced preliminary first-quarter results that include $3.5 billion in loan-loss provisions and net charge-offs of $1.4 billion.

Reports in recent days pegged the TPG-led investment at $5 billion. TPG will buy $2 billion in newly issued securities, with investors including "many of WaMu's top institutional shareholders" also participating. The sale and dividend reduction from 15 cents a share is part of an effort to help inflate capital ratios at the nation's largest thrift.

Chairman and Chief Executive Kerry Killinger said the steps "will position us for a return to profitability as these elevated credit costs subside. With the support of these investors, we have every confidence in our ability to deal with today's market conditions and restore shareholder value."

Joining WaMu's board is TPG chief David Bonderman, a former WaMu board member, and Continental Airlines Inc. (CAL) Chairman and Chief Executive Larry Kellner.

The dividend cut is expected to preserve $490 million of capital annually.

WaMu reported a fourth-quarter net loss of $1.87 billion that was fueled by a sharp increase in the reserve for loan-related losses. The company Tuesday projected a first-quarter net loss of $1.1 billion, or $1.40 a share. The mean estimate of analysts surveyed by Thomson Financial was for a 50-cent loss.

WaMu has made a series of strategic mistakes that put the company on increasingly shaky footing. Killinger's biggest bet was on the subprime market, as the savings and loan embraced products such as adjustable-rate mortgages and low-documentation loans for borrowers with relatively poor credit.

WM $12.75 -3.04% ...

Linda Piazza : 4/8/2008 10:00:28 AM

The OEX is below the potential resistance on 15-minute closes now from 631.74-632.73. Bulls want to see it climb above this resistance zone and sustain values above it, and then eventually above the 15-minute 9-ema, now at 633.54. Bears want to see the resistance hold.

Linda Piazza : 4/8/2008 9:58:46 AM

As the A/D line tests its breakdown benchmark, the SPX has risen just under potentially strong resistance on its 15-minute chart, with that resistance now from about 1367.46-1368. Equity bulls want to see the SPX sustain values back above that potential resistance zone and then eventually above the 15-minute 9-ema, now at 1371.71. Equity bears want to see this first resistance zone hold as resistance, and certainly want the 15-minute 9-ema to do so. The SPX is 1366.35 as I type.

Linda Piazza : 4/8/2008 9:55:53 AM

The A/D line is moving straight up to test the breakdown benchmark. that's now at -1020 with the A/D line at -1110 as I type. The benchmark is potential resistance on 15-minute closes, but if the A/D line gets past that and sustains values above it, it points out the possibility that this has been a drop-and-pop morning, one of the two scenarios pointed out in my 9:32:07 post. The problem is that both those scenarios--that the SPX might dip to the 10-sma and that it might already have done enough consolidating that it doesn't need that dip--look about equally weighted on the charts. A close yesterday below 1366.40 would have given the dip to the 10-sma scenario more weight, but that didn't happen.

Keene Little : 4/8/2008 9:52:32 AM

For the bullish potential that I just showed on the DOW I'd say this morning's low needs to hold now (since it did a little throw-under below the lower trend line of the consolidation pattern). A continuation lower would suggest to me that we'll see the DOW head for the 12450 area (a Fib projection at 12469 makes for a good target).

Jane Fox : 4/8/2008 9:49:28 AM

WE have the FED minutes out at 2:00 today and the market may be in a wait and see mode until then.

Jane Fox : 4/8/2008 9:48:53 AM

AD line is falling and is now -1279 but the VIX is not committing to either side and is printing mid range.

Keene Little : 4/8/2008 9:47:57 AM

There is the potential for this morning's leg down to be the completion of a sideways consolidation which will be followed by a strong rally out of it. This DOW 30-min chart shows by the green wave count that the choppy move since last Wednesday's high could be a b-wave correction and that calls for wave-c to new highs (13K target). Link

It takes a break above yesterday's 12733 high to confirm that bullish count. A deeper pullback to the bottom of its parallel up-channel from the March lows would have the DOW testing 12450. A break below 12400 would be more bearish.

Linda Piazza : 4/8/2008 9:45:41 AM

The SPX's 15-minute 9-ema is now 1372.71 with lower potential resistance on 15-minute closes now at 1367.60-1368; the OEX's is 634.28 with lower potential resistance on 15-minute closes now at 631.79-632.50.

Linda Piazza : 4/8/2008 9:42:52 AM

Keltner outlook on the A/D line: This morning, the A/D line fell to and through lowest potential Keltner support on the 15-minute chart. The first 15-minute period has not completed, of course, but if the A/D line finishes this period anywhere near its current -1456 or below, it will have created a breakdown situation. At that point, all it would have to do is to remain below the breakdown level, not even necessarily dropping further, to be bearish. It would then need to sustain values back above that level, currently near -995, to overcome that bearishness. The caution, of course, is that a breakdown situation means either that the downside momentum is strong . . . or that it's been overdone a bit. You don't know which, so if you're bearish, you need to have your profit-protecting plans in place.

Linda Piazza : 4/8/2008 9:35:40 AM

SPX bears should be aware of the bounce potential from the potential target/support zone now at 1357.81-1359.25. It has been pushed lower due to the action this morning. Do note that the OEX has already hit its analogous potential bounce zone, and, if the big caps start a bounce attempt, the SPX might never hit its analogous zone.

Linda Piazza : 4/8/2008 9:34:10 AM

For OEX traders, there's potential support on 15-minute closes at 631.88-632.57, support that's being breached at the moment. The 30-minute chart shows a "potential" of a drop to 627.88-629.42, with the OEX of course already hitting that zone. This is potentially strong support, so OEX bears should be aware of the bounce potential.

Jane Fox : 4/8/2008 9:33:56 AM

AD line opens at -1050.

Linda Piazza : 4/8/2008 9:32:07 AM

SPX futures were 8.74 below fair value. If the cash market moved down in accordance, it would drop to 1363.80. Cash markets don't always move in accordance with futures action, of course. I'm looking at the 15-minute Keltner chart, noting potential support on 15-minute closes at 1368.30. The 30-minute chart shows that if 1371.57 support is lost on 30-minute closes, there's the potential for a move down to about 1358.50-1360. Since my own view is that the SPX could well drop toward its rising daily 10-sma, a move down toward 1360 wouldn't surprise me since the 10-sma is lower than that, but we have to see if that's set up. The other possibility is that the SPX has almost done enough consolidating and, after a dip lower this morning, could attempt a bounce.

Keene Little : 4/8/2008 9:24:40 AM

We've got a down open in front of us so we could get an early answer to the question as to whether we'll see a pullback or continuation higher. A break below Friday afternoon's low would break the pattern of higher lows in the choppy rise from last Thursday's low. ES and YM have already done that (and NDX and RUT did it yesterday afternoon). Assuming we'll see a deeper pullback today we could see SPX pull back to its uptrend line near 1354 for the first test for the bulls.

Jane Fox : 4/8/2008 9:10:39 AM

NEW YORK (MarketWatch) -- Gold futures dropped sharply Tuesday after the International Monetary Fund said it would sell more than 14.2 million ounces of gold, currently valued at more than $13 billion.

Gold for June delivery fell $11.40 to $915.40 an ounce on the New York Mercantile Exchange.

The IMF said it will sell 403.3 metric tons of gold from its holdings, and cut substantial costs as part of an efficiency drive

Jane Fox : 4/8/2008 9:09:54 AM

SPX tagged its resistance yesterday but it was like the bulls just needed to make sure this area was resistance and once they confirmed it was they decided that's all I needed to do and let the bears take over.

It was obviously a struggle to get to this resistance and once there they had no steam left to do much else. Link

Jane Fox : 4/8/2008 9:05:05 AM

Gold also has found resistance and is posed to make its next move down. Link

Jane Fox : 4/8/2008 9:03:39 AM

Crude has found resistance and could retrace back to $105 before it starts its next leg up. Link

Jane Fox : 4/8/2008 9:01:41 AM

This overnight session was quite different from the one before when we had a series of higher highs and lows. This one is a series of lower highs and lows and all previous day lows have been breached. I suspect the AD line will open below 0 once the intraday session starts at 9:30EDT. Link

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