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Keene Little : 5/8/2008 11:34:16 PM

Friday's pivot tables: Link and Link

The DOW is attempting a bounce off its broken downtrend line from October and if I were trading only off this chart it would have me bullish against yesterday's and today's lows. One last line of defense is the uptrend line from March near 12740. Link

The 60-min chart shows Thursday's bounce ran into trouble at its broken uptrend line along the lows since April 22nd and just above that line on Friday is the top of the shallow up-channel from January (bold blue line), currently near 12950: Link . So the bulls have some work to do, especially since Thursday's bounce looked very corrective and gives me the impression that it's going to head lower, either directly or after another higher bounce up to resistance.

It's a wide spread but basically between 12740 and 12950 we could see some chop and whipsaw. We've entered the period when opex is going to have a greater say on price movements, some of which could come out of the blue. So a little caution here is advised until we see whether the bulls or the bears will be stronger.

OI Technical Staff : 5/8/2008 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The Market Monitor has been archived.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 : 5/8/2008 8:14:08 PM

I did see, but didn't note (type) here in the MM that SWC's hedges will have the last remaining 6,000 ounces of platinum (avg. overall price of $1,054 per ounce) maturing at the end of June 2008.

With spot at just over $2,000.00, I don't want to sound "defeatest" and there could still be the opportunity in the months ahead for the miner to capture these prices.

SWC also discusses S. Africa power outage and forward looking statements regarding this issue.

Jeff Bailey : 5/8/2008 7:58:09 PM

Those that are looking for the periodic Standard & Poors updated earnings results for this quarter, I haven't been able to catch it (if they posted it via Dow Jones) the last few days. I've looked at the S&P webpage and haven't been able to find it either.

Jeff Bailey : 5/8/2008 7:56:18 PM

Ameritrade Option Note: ... Going through today's email. If you trade options with Ameritrade, beginning on June 21, 2008, the Options Clearing Corp will reduce the automatic exercise threshold for equity options from $0.05 to $0.01. This means that if you own an expiring option that is in the money by any amount at the close of trading, it will automatically be exercised by Ameritrade.

If you do NOT want an in-the-money option to be exercised, you must notify Ameritrade prior to the options market close on the last day of the option.

Jeff Bailey : 5/8/2008 7:50:44 PM

extended session was $19.94-$22.15

Jeff Bailey : 5/8/2008 7:49:58 PM

NVIDIA (NVDA) ... did battle back to $21.52 extended.

Jeff Bailey : 5/8/2008 7:47:04 PM

Venezuela's Caracas April Year-on-year inflation at 29.3%

Jeff Bailey : 5/8/2008 7:34:09 PM

Closing Internals at this Link

Jeff Bailey : 5/8/2008 7:03:25 PM

Priceline.com (PCLN) $123.76 +1.41% ... last tick $141.30 on earnings.

Jeff Bailey : 5/8/2008 5:23:24 PM

Hedging for a producer of any commodity is "great" if done at a higher price as the commodities price falls, as it adds a cushion.

But when it rises, or surges as palladium did, and everything's already hedged or contracted at a lower amount, there's little benefit.

I also see SWC did a convertible on 03/12/08. I wasn't aware they did that at conversion of $23.51.

Somebody did, probably on say ... 03/06/08?

Jeff Bailey : 5/8/2008 5:14:33 PM

I'd think any type of SWC euphoria bakc toward $17.00 is going to find selling. $13.00 level support may be tentative.

Jeff Bailey : 5/8/2008 5:12:06 PM

I should add that I did call SWC last week with some questions, but they were in their quiet period.

Jeff Bailey : 5/8/2008 5:12:02 PM

Looks like SWC has everything hedged and not going to benefit all that much on the recent surge in in palladium and platinum.

Let's hope those two commodities do trend higher and there's a trader or two out there that doesn't care about earnings, or what company executives see going forward (positive/negative). Then sell into the strength.

Jeff Bailey : 5/8/2008 5:01:38 PM

AIG Earnings Press Release Link

Jeff Bailey : 5/8/2008 5:01:10 PM

AIG Secondary of $7.5 Billion Link

Jeff Bailey : 5/8/2008 5:00:00 PM

AIG Cash Dividend Press Release Link

Jeff Bailey : 5/8/2008 4:58:57 PM

YM 12,805

Jeff Bailey : 5/8/2008 4:54:22 PM

American Intl. Group (AIG) $44.10 -2.17% ... darts lower to $42.03 on headline numbers. Dow component here.

Jeff Bailey : 5/8/2008 4:49:37 PM

DXY's 04:00 tick was 73.474

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

NVIDIA Earnings Press Release Link

Other headlines Link

Jeff Bailey : 5/8/2008 4:32:09 PM

NVIDIA (NVDA) $21.95 -0.27% ... plunges to $20.25 on headline numbers.

Jeff Bailey : 5/8/2008 4:30:46 PM

Headline that Al-Qaida In Iraq Leader Abu Ayyub al-Masri has been arrested.

Jeff Bailey : 5/8/2008 4:29:51 PM

Based on yesterday's action, and today's observations ... as the SPY gravitates back towards its May Max Pain theory, I get the feeling, based on observation, a lot of covered call on the underlying

Jeff Bailey : 5/8/2008 4:27:24 PM

SPY Options Chain ... sorted by volume at the close Link

Keene Little : 5/8/2008 4:22:57 PM

You're too kind Jeff (wink). I'll pass on that long list of earnings .

Jane Fox : 5/8/2008 4:22:26 PM

Economic report for tomorrow is 8:30a.m. Mar Trade Balance. Expected: $61.9B. Previous: $62.3B.

Jeff Bailey : 5/8/2008 4:19:58 PM

Stillwater Mining (SWC) ... Earnings Press Release Link

Jeff Bailey : 5/8/2008 4:16:54 PM

Here come the earnings ... I'll let Jane and Keene take their turn this evening. Link

Jeff Bailey : 5/8/2008 4:11:07 PM

YM 12,850 ... juuuust about right for what we thought would happen. Rather tight 12,800 to 12,900.

Jeff Bailey : 5/8/2008 4:04:11 PM

NASDAQ crossing SWC at $14.00 extended. NYSE bid $14.21

Jane Fox : 5/8/2008 4:00:52 PM

Dateline WSJ - The surge in food and energy prices is being driven by fundamental market conditions, rather than an investment bubble, according to the majority of economists in the latest Wall Street Journal forecasting survey.

Fifty-one percent of the respondents said demand from China and India was the prime factor in soaring energy prices, and 41% said demand was the chief contributor to rising food costs. Constrained supply was cited second most-often; 20% blamed supply problems for higher food prices and 15% for increasing energy prices.

"It's a combination of demand and supply issues," said Joseph Carson of AllianceBernstein.

But while most of the analysts attributed the food and energy costs to fundamental trends, 11% of the economists see a potential bubble driven by speculation. "Commodity markets have become a strange safe haven, with prices well out of line with underlying market fundamentals," said Diane Swonk of Mesirow Financial. "I am dumbfounded that a report like Friday's employment report triggered a rally in oil prices... Just plain ridiculous."

Jeff Bailey : 5/8/2008 4:00:48 PM

What will tomorrow morning's open bring?

Jeff Bailey : 5/8/2008 4:00:02 PM

4,500, ... now 1,800

Jeff Bailey : 5/8/2008 3:59:34 PM

NYSE comes with an offer at 0.27

Jeff Bailey : 5/8/2008 3:59:09 PM

.26 x .27

Jeff Bailey : 5/8/2008 3:58:36 PM

CINN still showing 1,500 at .28

Jeff Bailey : 5/8/2008 3:58:23 PM

SWC $14.23 x .24

Jeff Bailey : 5/8/2008 3:57:58 PM

That seller is formidable at the pivot isn't he/she?

Linda Piazza : 5/8/2008 3:55:25 PM

The VIX, at 19.15 as I type, is dropping hard through that potential bull flag, but it hasn't violated it. Equity bears don't really want it to drop much further, though, into the close and really don't want it violating the flag's potential support near 18.72 on 15-minute closes.

Jane Fox : 5/8/2008 3:53:56 PM

Crude up to 124.60.

Keene Little : 5/8/2008 3:53:46 PM

Resistance did not hold and now price is back into the middle of today's trading range. This leaves a big question mark for tomorrow. I do not see a good setup going into tomorrow.

Jeff Bailey : 5/8/2008 3:53:03 PM

Then you can switch your SWC chart to a 30-minute interval, or even 60-minute. Can it see a close above the key level on that interval?

Jeff Bailey : 5/8/2008 3:51:05 PM

SWC $14.23

Jeff Bailey : 5/8/2008 3:50:23 PM

PACX comes with a bid

Jeff Bailey : 5/8/2008 3:46:06 PM

MWSE not showing on the offer anymore. He/she is down at $13.50 with 3,000 though. CINN is the player.

Keene Little : 5/8/2008 3:43:38 PM

SPX has now bounced back up to its broken uptrend line from this morning's low so it's a shorting opportunity to see if it holds as resistance.

Jeff Bailey : 5/8/2008 3:43:17 PM

Before I recently close out the SWC protective put (as it turned out), and was willing to RISK staying long the SWC stock itself (from $18.00 entry), I needed the stock to calm down.

Then place the stop under SWC and look for the rebound.

Jeff Bailey : 5/8/2008 3:41:41 PM

What I'm thinking will take place into Palladium's expiration is that the "shock" from the S. Africa news that had buyers rushing in to buy palladium, also had to have some palladium futures traders "shorting" to that buying. At the "low end" of the range, I'm looking for Palladium futures to RISE into the expiration.

Linda Piazza : 5/8/2008 3:40:44 PM

The VIX hasn't yet broken above that possible bull flag on its intraday charts. Well, let me put that differently: it attempted to break above it but couldn't sustain values above it. It's at the top trendline as I type, however, with that at about 19.42 and the VIX 19.39.

Jeff Bailey : 5/8/2008 3:39:08 PM

Now, you think SWC is thinly traded, look at palladium futures.

Jeff Bailey : 5/8/2008 3:36:30 PM

Same SWC chart, but now 10-minute intervals, with DAILY and WKLY Pivot levels turned on. Curbox set on the volume spike, right at overlapping DAILY R2 and WKLY Pivot Link

Over to the left is my Level II

Linda Piazza : 5/8/2008 3:34:17 PM

As long as the SPX is again finding resistance on 15-minute closes at the 9-ema now at 1395.46, it's got a new downside target of 1392.53 or perhaps 1390.84. For the OEX, the 9-ema is now 643.03 and potential downside targets are 641.64-640.86.

Jeff Bailey : 5/8/2008 3:29:50 PM

SWC daily interval bar chart Link

Keene Little : 5/8/2008 3:22:50 PM

SPX is not holding onto its uptrend line so now we'll see if a retest of this morning's low holds. If it doesn't then I think the next support level will be down around 1380-1384.

Jeff Bailey : 5/8/2008 3:16:42 PM

See where it's at?

Jeff Bailey : 5/8/2008 3:16:28 PM

Gosh ... just now seeing that volume spike in SWC.

Linda Piazza : 5/8/2008 3:14:16 PM

It's not too soon to be thinking about your end-of-day plans. So far, the SPX has a near doji that's forming right above the rising trendline off the March low. The doji is forming below the 10-sma, however, at least so far. The two observations, taken together, complicate the what-happens-next scenarios. Usually a doji at the bottom of a decline would suggest either further consolidation or an actual bounce attempt, and that may well be what happens tomorrow. However, due to some warning signs I'm seeing, I think that market participants also have to have a plan in place if we wake up tomorrow morning and equities roll over, perhaps through that rising trendline and down toward the 30-sma over the next few trading days. I'm not promising that will happen--certainly not encouraging bears to put too much at risk or not take profits if appropriate--but I am saying that it's within the realm of possibility. That's particularly true if the VIX ends the day near or above about 19.30.

James Brown : 5/8/2008 3:13:58 PM

Southwest Airlines (LUV) is bucking the trend in the airline sector today. The XAL index is down about 0.5% but LUV is up 2.4% and bouncing from support at the $13.00 level. It's hard for me to imagine bullish trades in the airlines stocks given my long-term outlook on oil but if LUV could rally through its 200-dma near $13.55 then this might be worth a look as a bullish candidate.

Jeff Bailey : 5/8/2008 3:12:33 PM

Then you'd monitor any changes in open interest.

If it is a "sell to close" the put, then OI would fall. That's one thing.

However, if it is a "sell to open" then that's an ENTIRELY different observation. Think of what a "sell to open" put trade means as it relates to RISK of such trade.

Sell to close is just a removal of capital at risk. Sell to open is an initiation of capital at risk. A potentially "unlimited" amount of risk.

Keene Little : 5/8/2008 3:12:28 PM

SPX is trying to hold onto its uptrend line from this morning and the risk to shorts is another leg up to a new daily high so manage your trade appropriately if you shorted the high near 1402. If we get a smaller bounce (no new high) followed by a drop back below this pullback near 1394 then a new daily low is a likelihood. Right now the risk is we'll stay stuck in a choppy consolidation.

Jeff Bailey : 5/8/2008 3:07:36 PM

And try to figure out who in their right mind is selling a June $140.00 Put. Better yet ... why are they selling it?

Jeff Bailey : 5/8/2008 3:06:31 PM

And a less conventional $0.50 Link

Jeff Bailey : 5/8/2008 3:05:27 PM

Then you can take a SPY conventional Link

Jeff Bailey : 5/8/2008 3:02:12 PM

SPY Option Chain at 02:53:27 PM. Re-sort volume from earlier. Did add a High/AvgHLC/Low Link

Jeff Bailey : 5/8/2008 3:00:52 PM

Two (2) of them are next month (June). The other one (1) is the May $139 put

Jeff Bailey : 5/8/2008 2:58:13 PM

See those three "suspicious" trades?

Linda Piazza : 5/8/2008 2:53:24 PM

Here's the VIX with relationship to the potential bull flag that I mentioned earlier today: Link This formation has not yet been confirmed as a bull flag, but it shows that bulls and bears both should keep the VIX on their radar screens with this formation in mind.

Jeff Bailey : 5/8/2008 2:52:52 PM

SPY $139.50

Jeff Bailey : 5/8/2008 2:52:30 PM

were pretty even now at 2.4 to 2.5

Jeff Bailey : 5/8/2008 2:52:11 PM

Also check out how the DnTick and UpTick vols changed for the SPY itself.

James Brown : 5/8/2008 2:48:48 PM

Trading Idea: This is starting to look like a bullish entry point in Express Scripts (ESRX). The stock is starting to rally after a two-week consolidation. Investors could buy calls here and place a stop under $68.00 or maybe today's low. There is short-term resistance at $74.25 but given the bullish channel I'd probably aim for $77.00-80.00. chart: Link

Jane Fox : 5/8/2008 2:48:17 PM

So far Crude high of the day is 123.92 whereas yesterday it was 123.93.

Jeff Bailey : 5/8/2008 2:46:41 PM

VIX.X 19.41

Jeff Bailey : 5/8/2008 2:46:17 PM

I've got May $141 Put, May $140 Put and May $140 call as 1,2,3 and 41,727, 31,575 and 21,450.

Not multiply by 100 each.

Jeff Bailey : 5/8/2008 2:45:18 PM

Wow ... now sort your SPY option chain by volume again.

Keene Little : 5/8/2008 2:44:45 PM

James has been mentioning the energy sector stocks hitting new highs today. USO is pressing a little higher as well but is still pressed up tight against its two trend lines along the highs from February 2007 and the other one from this past March. Right now it's looking like today's candle will be a hanging man doji. Up against resistance this could be an important setup for a reversal. Daily chart: Link

The daily chart shows the bearish divergence against its last high towards the end of April and the 60-min chart shows the bearish divergence against the highs this past week. The buying momentum is clearly waning and it fits the wave count calling for an end to the rally. 60-min chart: Link

Linda Piazza : 5/8/2008 2:39:37 PM

That stop-running move didn't last long, but we still have conflicting information on short-term SPX charts. If you look at formations, you see the SPX climbing a rising trendline off this morning's low, with that trendline now crossing at about 1395.30, if I'm eyeballing it correctly. I believe Keene just mentioned it, too. The SPX is back below the 15-minute 9-ema, but that 9-ema is flattening out now in a way that typically means that it's losing its status as a benchmark for us. The Keltner setup suggests that the SPX is more likely to drop toward 1392.66 than it is to rise toward 1400.70-1401.55, but that's not completely trustworthy information from this particular setup. Chop.

Linda Piazza : 5/8/2008 2:36:55 PM

VIX is 19.31, near the daily 9-ema.

Keene Little : 5/8/2008 2:35:59 PM

The uptrend line from this morning's low is now nearing SPX 1395 so watch for a bounce back up.

Jeff Bailey : 5/8/2008 2:31:55 PM

Did some work late last night with USO and Eur/$ as well as DXY. Hope to cover later.

Linda Piazza : 5/8/2008 2:30:56 PM

Jeff, when talking about lightning striking near his house, points out something that all traders should remember about setting those stops. It's not just a lightning strike that could cause problems with an open trade, but a call from someone at a key moment or something similar. I remember once in the heyday of the mo-mo days in the early 2000 period, before March 2000, when I went down the hall to brush my teeth after lunch and came back to find out my position was worth $9,000 less than it had been when I left the room. Fortunately, that was $9,000 less profit, not $9,000 in the hole, but it could as easily have been that, too. No one watches the markets more closely than those who are writing about it moment-by-moment, but even we can turn our heads at the wrong moment. There are times when I don't use them (because I don't want to be taken out of a credit spread at market, for example, if I can be there to get between the bid and the ask and have time to do so in regular market conditions) but I can tell you that having them set (both profit and stop loss) can take away the emotions of a trade. Each of us has our little trading problems, and mine is one that's actually quite common: a tendency to take profits too soon. I tend to manage losses fairly well with a few exceptions (notably, last summer) but I start getting nervous when I've got unrealized profits in this market environment. I don't know how many times I've had to tell myself even about a little one-contract put or call position that I've got the stops set and to just leave it alone!

Jeff Bailey : 5/8/2008 2:30:55 PM

Eur/$ 1.541

James Brown : 5/8/2008 2:30:49 PM

Yet another commodity ETF is the Goldman Sachs GSCI (symbol: GSG), which is hitting new highs.

Jeff Bailey : 5/8/2008 2:30:25 PM

US Oil Fund (USO) alert! $100 +0.20% ...

James Brown : 5/8/2008 2:28:54 PM

The PowerShares DB Commodity Index ETF (DBC) is breaking out to new all-time highs over resistance in the $39.30-39.50 zone. DBC currently +0.8% to $39.70.

Jeff Bailey : 5/8/2008 2:28:20 PM

Interesting trade for the DXY the past couple of days.

This currency index stays around 73.50. As you monitor what's actually inside and moving day-to-day, it isn't necessarily what some are assuming.

James Brown : 5/8/2008 2:26:51 PM

Seeing a lot of new highs in the oil, energy and natural gas stocks today.

Jeff Bailey : 5/8/2008 2:24:43 PM

Terminology: ... "Hard Stop" is a stop a trader placed with their broker.

Stop Market= When stop price is traded, order goes at market price (careful with these).

Stop Limit= When stop price is traded, sell order initiated, but only to a SPECIFIED limit (don't assume you've been filled and out of the trade).

James Brown : 5/8/2008 2:19:32 PM

Steel stocks continue to rally... A lot of these are at new highs

X +2.8%
STLD +2.0%
AKS +3.1%
MT +4.7%
NUE +3.9%
PKX +4.5%

Jeff Bailey : 5/8/2008 2:17:11 PM

QCharts users will note today's Daily R2 ($14.18) and overlapping WKLY Pivot ($14.18). "Sloppy" here, but if they get on a bulls side above the day's high, there's some room to your conventionals.

James Brown : 5/8/2008 2:14:56 PM

Another way to play the bounce in the agriculture-related stocks is the Agribusiness ETF or the MOO.

The MOO is bouncing from its intraday low where it tagged old resistance and what should be support in the $60 region.

Jeff Bailey : 5/8/2008 2:14:39 PM

Even when hit, still sticks there. Suggests to me that its an options market maker, probably NAKED the $15 put and still wants to get hedged

Keene Little : 5/8/2008 2:13:14 PM

The first thing I want to see for a continuation lower is a break below the new uptrend line off this morning's low, currently near SPX 1394 (ES 1394 as well).

James Brown : 5/8/2008 2:12:51 PM

In the last two days volume has spiked higher in the XHB homebuilder ETF. The XHB is breaking down under technical support at its 50-dma and 200-dma today.

Jeff Bailey : 5/8/2008 2:12:30 PM

See market maker MWSE on SWC's Level II. Still there from Tuesday.

Linda Piazza : 5/8/2008 2:09:50 PM

The VIX is 19.18 as I type, having some difficulty now but still just testing the support of a possible bull flag. Market participants should keep it on their radar screens.

James Brown : 5/8/2008 2:09:38 PM

There might be a short-term bullish trade in China Petroleum & Chemical (SNP).

Shares have fallen from the $114 level where it failed at its 100-dma and the stock is now beginning to bounce from round-number support at $100.00.

Aggressive or more nimble traders might consider buying calls here with a tight stop under today's low. chart: Link

Linda Piazza : 5/8/2008 2:08:27 PM

The A/D line is so far maintaining support on 15-minute closes, but it's getting kind of volatile, so I'm not sure it will continue to do so. Bulls want to see it maintain support on 15-minute closes above about 490. It's 615 as I type.

Keene Little : 5/8/2008 2:07:38 PM

The short at SPX 1402 should work right away or get out of the way. So lower your stop now to a couple of ticks to a new high.

Jeff Bailey : 5/8/2008 2:05:44 PM

I've raised a HARD stop 12,845. would do it anyway at a MINIMUM right now, but lightning also striking at my house. Loose my connection and would want a tracking stop.

Jeff Bailey : 5/8/2008 2:03:43 PM

DIA $129.03 ... that's 100 for a YM bull.

James Brown : 5/8/2008 2:03:20 PM

Looks like investors are reacting positively to the new leadership in Russia.

the RSX Russia ETF is up 4.7% at $54.45 and came close to hitting a new high near $56 this morning.

Jeff Bailey : 5/8/2008 2:02:00 PM

Gasoline a "bargain" as to what they get a 7-eleven for a bottle of water.

James Brown : 5/8/2008 2:01:33 PM

If you can handle the volatility in this group the fertilizer stocks are bouncing again. This looks like a potential entry point although I'd probably play with a tight stop under today's low.

A few to look at... AGU, TRA, TNH, CF, MOS, MON, and POT.

TRA is up 6.4% and breaking out over its 100-dma.
MON is about to rally past short-term resistance near $121.00.

James Brown : 5/8/2008 2:01:11 PM

Fun with numbers... CNBC talking about what we pay for price of gallon of gas and now listing what the price of other liquid consumables are per gallon.

Diet Snapple - $10.32/gallon
Lipton Ice Tea - $9.52/gallon
Gatorade - $10.17/gallon
Vick's Nyquil - $178.13/gallon
Pepto Bismol - $123.20/gallon

Jeff Bailey : 5/8/2008 2:01:01 PM

$/yen 103.95 -0.75%

Jeff Bailey : 5/8/2008 2:00:22 PM

a/d lines vastly improved.

Jeff Bailey : 5/8/2008 1:59:48 PM

SPY $140.18

Jeff Bailey : 5/8/2008 1:59:37 PM

VIX.X 19.06

Jeff Bailey : 5/8/2008 1:59:24 PM

Linda's probably taking offers like you can't believe.

Keene Little : 5/8/2008 1:55:15 PM

SPX 1402 coming up so watch to see if price stalls, make a quick attempt at a short if it rolls back over and keep your stop tight. ES 1402.75 is the equivalent level.

James Brown : 5/8/2008 1:55:01 PM

Coal stocks continue to dance with new highs. I just looked at ACI, FDG, JRCC, CNX, MEE, BTU and PCX.

The KOL (etf) is rebounding. There was no follow through on yesterday's bearish engulfing candlestick.

Jeff Bailey : 5/8/2008 1:53:49 PM

June palladium doesn't expire until 06/26/08

Jeff Bailey : 5/8/2008 1:53:20 PM

SWC $14.26 +6.97% ... $12.50 and $15.00 strikes would require more risk to a stop.

Jeff Bailey : 5/8/2008 1:52:42 PM

PAL $5.40 +4.24% ... probably better positioned strike-wise to control long in the money call trade.

Jeff Bailey : 5/8/2008 1:50:29 PM


Jeff Bailey : 5/8/2008 1:50:27 PM

things getting interesting here for SWC and PAL.

June Palladium (pa08m) +9 at 434.75.

Jeff Bailey : 5/8/2008 1:47:20 PM

What can happen should a broader index like the SPX/SPY see some pre Op-Ex action is that institutional traders, or computers will start going after the HEAVYWEIGHT stocks to get exposure if the trade starts moving away from them.

Jeff Bailey : 5/8/2008 1:44:36 PM

You already know WKLY S1 right here. 103.84

Jeff Bailey : 5/8/2008 1:43:40 PM

Daily s2 104.00.

Jeff Bailey : 5/8/2008 1:43:11 PM

$/yen's daily pivot as might need to know is 104.97.

Linda Piazza : 5/8/2008 1:42:22 PM

The VIX is bouncing, so far, from the potential Keltner support on 15-minute closes near 19.14. The VIX is currently 19.28.

Linda Piazza : 5/8/2008 1:41:37 PM

For the first time today, the A/D line closed a 15-minute period above Keltner resistance that's now from 495-620 on 15-minute closes. This occurred as the typical stop-running time of day hit, so reserve a bit of skepticism, especially since the A/D line has not bested the previous high of the day (788) or Tuesday's late-day swing high (853). However, if the A/D line should continue to gain or to maintain 15-minute closes well above that 495 zone, that's one positive for short-term equity bulls. If it should lose that support, however, we'd have to conclude that the A/D line just overran resistance during a typical stop-running time of day. The A/D line is currently 671, pulling back a bit from the push higher a few minutes ago, but not yet pulling back strongly and certainly not yet violating support.

Jeff Bailey : 5/8/2008 1:40:40 PM

$/yen 103.81 -0.88% ...

Jeff Bailey : 5/8/2008 1:40:06 PM

VIX.X 19.25

Keene Little : 5/8/2008 1:39:00 PM

OK, getting the 2nd leg up now. The upside target remains the same--just under 1402 to see if the bounce fails. One thing to keep in mind, and a reminder of the bullish possibility that could be setting up here--the sharp decline from Tuesday could have finished the pullback correction from Tuesday. That EW interpretation says we will see another push higher, probably into opex week next week. So while I will be testing the short side at certain points, if I get a sense that the bounce is becoming impulsive (something more than just a 3-wave bounce), I'll be switching sides and looking to play a long into next week.

Linda Piazza : 5/8/2008 1:37:26 PM

Oh, everyone is looking at the VIX. Since we're all looking at different measures, we may be reporting differing viewpoints or differing things to watch. We're not intentionally stepping on each others' toes, and it just goes to prove that everyone is watching.

Linda Piazza : 5/8/2008 1:36:13 PM

If the VIX were an equity, I would say that its pullback from yesterday's late-day high looked like a potential bull flag pullback. (For newbies: Anything bullish for the VIX is likely to be bearish for the equities, so if the VIX should break higher out of a bull flag, that would be presumed to be bearish for equities.) We should know soon. If the VIX dives too much below 19.00, that's not a bull flag, I don't think. The VIX is 19.21 as I type. Equity bulls need to be watchful here as they don't want to see a strong VIX bounce begin.

Jane Fox : 5/8/2008 1:36:02 PM

VIX is making new daily lows so the bulls are gaining control. I see the AD volume climbing and the AD line is now +712, not overly bullish but giving a little credence to the bullish VIX.

James Brown : 5/8/2008 1:37:37 PM

I did find another solar stock showing strength today. Canadian Solar Inc. (CSIQ), which coincidentally is actually a Chinese company, is up about 11.5% to $31.54.

James Brown : 5/8/2008 1:34:38 PM

Interesting... CNBC saying that the rising price of commodities has pushed the value of a 5-cent nickel to 7.7 cents and the value of a penny to 1.26 cents.

Jeff Bailey : 5/8/2008 1:34:37 PM

Qcharts has Dec09 110 Puts at #2 with 3,290 of the FYNXF.

Jeff Bailey : 5/8/2008 1:33:52 PM

My AMTD Level II at 41,016

Linda Piazza : 5/8/2008 1:33:44 PM

Watch now for potential support on the VIX at 19.14 on 15-minute closes. The VIX is currently 19.17.

Jeff Bailey : 5/8/2008 1:33:05 PM

Good gravy! ... showing 31,066 volume on the May $140 puts here.

Jeff Bailey : 5/8/2008 1:31:42 PM

SPY $140.01 +0.35% ...

Jeff Bailey : 5/8/2008 1:31:26 PM

VIX.X alert! 19.20

Jeff Bailey : 5/8/2008 1:31:10 PM

Shares of Colfax (CFX) $21.25, and industrial pump and valve maker IPO'd with an open at $22.50, a 25% premium from $18 pricing and indicated for $15-$17.

James Brown : 5/8/2008 1:30:46 PM

Luxury retailer Coach (COH) is rolling over under its 200-dma. The MACD is turning negative again. Is this an entry point for puts?

This current pull back looks bearish but the P&F chart still looks very bullish with a triple-top breakout and a $46 target. Link

I thought that there might be a bearish trade setting up here somewhere but I don't think I'd pull the trigger on this one. Not here anyway. Chart: Link

Jeff Bailey : 5/8/2008 1:28:04 PM

DJ correction ... 30-year was 4.599%, Not 4.60%. (see 01:16:13)

Linda Piazza : 5/8/2008 1:25:07 PM

Okay, we've had about the requisite period of time of the SPX chopping around in that zone I mentioned earlier, so a move to break it out could occur at any time. We're also approaching a typical stop-running time of day from about 1:35-1:55 pm ET. The SPX's 30-minute 9-ema is now about 1396.70, and that's one benchmark to watch on 30-minute closes. If the SPX can maintain values above that, watch the previous high of the day and then the 1401.73-1403.86 levels for potential resistance.

Jeff Bailey : 5/8/2008 1:24:56 PM

Eur/$ 1.5415 +0.15%

Jeff Bailey : 5/8/2008 1:24:04 PM

Oil prices look to have eased after OPEC said there is no oil supply shortage and it has no intention of opening its oil spigot to ease prices.

Best USO could do on the downside was $98.31. High has been $99.99

Keene Little : 5/8/2008 1:20:22 PM

The market is obviously not ready to rally yet. We might see a test of SPX 1390 before pressing higher again. Basically though we're just chopping around and there's not much to do but wait to see what sets up next.

Jeff Bailey : 5/8/2008 1:19:35 PM

Fannie and Freddie weak today on news that there's some uncertainty brewing over congressional efforts to reform the two mortgage-finance giants. White House is threatening to veto housing measures that include rules on the mortgage companies.

Jeff Bailey : 5/8/2008 1:16:42 PM

30-year yield down 5.3 bp at 4.569%

Jeff Bailey : 5/8/2008 1:16:13 PM

bid-to-cover was 2.69 with a 4.38% coupon. Was 4.6%; 21.13% at the high.

Jeff Bailey : 5/8/2008 1:15:02 PM

30-year auction ends

James Brown : 5/8/2008 1:14:24 PM

Russian telecom company, Mobile Telesystems OJSC (MBT), is breaking out past its 50-dma and flirting with a breakout over its 200-dma near $79.00. Shares also have some resistance near $80.00. After three weeks of trading sideways the stock could be nearing a real change in direction. Investors might want to consider calls on a move over $80.00 but keep an eye on potential resistance at the 100-dma still overhead. The P&F chart is bullish with a $92 target but MBT is already testing P&F chart resistance.

Jane Fox : 5/8/2008 1:11:48 PM

NEW YORK (MarketWatch) -- Gold futures accelerated their gains Thursday, underpinned by crude-oil prices near a record high as well as weakness in the U.S. dollar.

Gold for June delivery rallied $14.50 at $885.70 an ounce on the New York Mercantile Exchange.

"I am seeing the dollar catch a new wave of selling, which continues to push gold higher," said Zachary Oxman, a senior trader at Wisdom Financial.

"I also think we can't discount the strong moves in crude and their staying power so far," Oxman said.

On Wednesday, gold closed $6.50 lower at $871.20 an ounce, after climbing nearly $27 over the previous three trading sessions.

"The dollar seems set to provide much of the day's trading direction, while the start of Akshaya Tritiya celebration in India should see physical buying and provide background support," said James Moore, analyst at TheBullionDesk.com.

James Brown : 5/8/2008 1:07:49 PM

Shorts are getting killed in ENER today. The stock is up more than 37% to $47.90.

The company reported earnings this morning. Wall Street expected a loss of 6 cents and ENER delivered a profit of 17 cents. Revenues doubled from the same period a year ago. Gross margins rose from 19.2% in Q2 to 30.7% in Q3.

The most recent data listed short interest at almost 26% of the 38.8 million-share float.

WOW! What is really surprising is that the rest of the solar stocks are not seeing any reaction to ENER's news.

Keene Little : 5/8/2008 1:05:51 PM

If we get a 2nd leg up for the bounce off this morning's low, two equal legs up would be at SPX 1401.83 and the 38% retracement of the decline from Tuesday is at 1401.68. Whether that will be it for the bounce or if we'll get a larger upward correction can't be known but that's the first place I'd watch for the bounce to fail as an opportunity to test the short side.

Jane Fox : 5/8/2008 12:56:23 PM

A look at the overnight ranges shows the markets are not all that bullish and if you want to be long NQ is the market to pick. Link

Linda Piazza : 5/8/2008 12:55:18 PM

The SPX is chopping around so far, a not expected event after pulling back to 1392-1394. The lower potential target (for this particular chop zone), previously near 1390.70, has risen to 1391.57, so there's some support below this 1392-1394 zone now, if only light support. Resistance on 15-minute closes is strongest near 1396.15, near 1398.80 and then again at 1401.62. I wouldn't be surprised to see some chopping around through the next hour to 45 minutes.

Linda Piazza : 5/8/2008 12:34:08 PM

Remember that this drop back to 1392-1394 was predicted (at least I thought it might happen). Before it happened, I had warned that I had to extend the "might drop back to" level down to about 1390.70. The thing is that this doesn't yet tell us that there's more weakness. It's just part of the process that gets us to where we know something about what might happen the rest of the day, but I wouldn't really be surprised if the SPX just chopped around between 1390.50-1394 for an hour or two.

Beyond that, I want to say that I'm seeing some signs now that trouble me on the behalf of equity bulls, signs that I've been pointing out over the last few days. They don't promise a sharp downturn, and a day or two of gains could intervene even if a downturn occurs, but they certainly warn that bulls need to have those profit-protecting plans in place, just in case. They're not good market-timing tools, but as a condor trader myself, here's what worries me: if you go into option expiration week and then, at that point, have a condor that goes terribly wrong with prices crashing through the sold strikes, you have zero wiggle room. I doubt many of you have bull put spreads right below the current SPX or other index levels, but, if you have positions that are too close for comfort and if you can currently exit them for a nickel or a dime (I even go up to $0.20 when I'm exiting credit spreads) and lock in the rest of your profit, think about it, just in case. We've had some bad, bad opex weeks with condors. The same is true of bear put spreads. If some of yours were getting too close for comfort and this pullback affords you an opportunity to close them out and reduce your risk, think about it. I am never, ever in credit speads on opex week if I can help it. Oh, except for the ATM XEO condors I sometimes put on the last week of opex. I'm not going to be doing one of those this opex period, though.

Keene Little : 5/8/2008 12:31:23 PM

The current pullback from this morning's high should lead to another leg up in the bounce. Long against this morning's low is the right play for now. After another leg up (assuming we'll get it) is when I'd be a little more careful about the upside. Hopefully we'll get a nice setup within the Fib retracement zone (38%-62%) to try a short play but I don't think it will set up until later this afternoon.

Jeff Bailey : 5/8/2008 12:27:03 PM

12:00 Internals found at this Link

Linda Piazza : 5/8/2008 12:13:52 PM

The A/D line rises again to test that potential resistance now at 518-576 on 15-minute closes. The A/D line is currently 422 and hasn't been able to best that resistance on a 15-minute close all day. Watch to see if there's a change or a continuation of that pattern.

Jeff Bailey : 5/8/2008 12:13:08 PM

think about your DIA "max pain" value.

Now keep an eye on that VXO.X

Jeff Bailey : 5/8/2008 12:12:32 PM

Check out the intra-day "coil" in the INDU/DIA/YM between DAILY Pivot and WKLY S1 last 1/2 hour.

Linda Piazza : 5/8/2008 12:07:59 PM

I said earlier that I wouldn't be surprised by an SPX drop toward 1392-1394 before we saw what happened next. That drop has not occurred, of course, but now I'd have to lower that "not surprised" level to about 1390.70. I'm not predicting the SPX will go there, but instead am saying that it wouldn't really change the overall action if it did: that we still wouldn't have our "what's going to happen today" answer if it did. Currently, the SPX continues testing the 30-minute 9-ema now at about 1397.40, with that potential resistance on 30-minute closes.

Jeff Bailey : 5/8/2008 12:06:49 PM

USO $98.74 -1.06% ... remember what happened when oil futures first traded $100.00?

Jeff Bailey : 5/8/2008 12:05:59 PM

CNBC noting oil's reversal.

Jeff Bailey : 5/8/2008 12:02:57 PM

I'm actually showing that the JXB-QH has traded 1,959 contracts so far this morning. NOT the 500 just shown.

Jeff Bailey : 5/8/2008 12:00:24 PM

The "Max Pain" theory values I've posted the last couple of weeks for DIA, SPY, IWM, SMH, etc., are from a computerized source. Where the "Max Pain" value is derived from that days OPEN INTEREST of ALL strikes (put/call).

EXTRA WORK is required for DIA, SPY, QQQQ and IWM as you SHOULD look at the tied DJX, SPX, NDX and RUT.X option montages. See where THEIR OI is heaviest at, then "eyeball" the influencial strikes.

Jeff Bailey : 5/8/2008 11:56:52 AM

SPX Option Montage with OI notes. Please note that VOLUMES are CBOE only. QCharts not the best with actual volume from all the exchanges. Link

James Brown : 5/8/2008 11:50:51 AM

Nike (NKE) is bouncing from a test of short-term support at $65.00 and its 50-dma. This is the third test in the last six weeks or so.

James Brown : 5/8/2008 11:46:59 AM

Healthcare stocks look like they're close to forming a real bottom here. Chart: Link

Jeff Bailey : 5/8/2008 11:45:47 AM

I should also note, that into an expiration, if you carry a VERY HEAVY bias, and you don't do your homework, you're account can go "poof" in the matter of an hour. Especially if you're trading index futures and don't honor a stop.

Linda Piazza : 5/8/2008 11:41:48 AM

Keltner outlook on the A/D line: The A/D line has now risen to test the same Keltner channel level that it tested early this morning, although that dynamic channel line is at a slightly different level. That's at 529 on 15-minute closes, with the A/D line currently 390. Equity bulls should be aware that this could be strong resistance for the A/D line and prepare accordingly, in case the A/D line is rebuffed and sent back toward -40 to +70, a possibility if not yet a probability. Equity bulls want to see the A/D line jump higher instead, but I'm not sure that's going to happen.

Keene Little : 5/8/2008 11:41:19 AM

Gold and silver don't always trade in lock step but the daily chart of silver is another reason I'd be a little cautious about the upside on either right now. Silver (SI, July) is now very close to its downtrend line from March: Link

Jeff Bailey : 5/8/2008 11:41:08 AM

Since you have an idea (based on my observations) of where a "Max Pain" theory value is, and you're looking at a chart with your pivot levels turned on, and you keeping an eye on the VIX.X, you should have an advantage over others.

Throw in a currency and treasury bias and you can be deadly.

Keene Little : 5/8/2008 11:37:05 AM

If you're interested in shorting gold, two other levels to keep an eye on are the weekly and monthly pivots. I've got the weekly R1 at 888.60 and monthly pivot at 895.10. Today's high so far is 886.90. Based on the leg up from yesterday's low I think it's too early to be shorting gold as it looks like it at least needs to consolidate near this morning's high and then press higher again.

Jeff Bailey : 5/8/2008 11:35:28 AM

SPY Option Chain ... see, I had sorted by volume and was arranging headings. At first sort, the Jun $140 puts were where they were. The at 11:29:49 I made note. Link

Jeff Bailey : 5/8/2008 11:30:58 AM

Selling a put is consider by most to be "bullish bias"

Linda Piazza : 5/8/2008 11:30:32 AM

Remember that former Fed chief Alan Greenspan speaks at 12:30 pm ET today in New York. I'm not sure to whom or the topic, as I haven't been able to find out that information, but be prepared for jolts from nowhere if he should say something that worries or cheers market participants.

Jeff Bailey : 5/8/2008 11:30:32 AM

Looks like a down tick on the June $140's

Jane Fox : 5/8/2008 11:30:11 AM

Internals were bullish earlier today when the VIX was making new daily lows and both the AD volume and AD volume ratio were making new daily highs (red boxes). Then the internals turned bearish when the VIX was making new daily highs and the AD volume and ratio were making new daily lows (blue boxes). Now the internals are back bullish (black boxes) Link

Jeff Bailey : 5/8/2008 11:29:49 AM

Now seeing the SPY June $140 put get some action. SPY chain on its way.

Linda Piazza : 5/8/2008 11:28:43 AM

I wouldn't be surprised to see another pullback toward the 1392-1394 zone for the SPX and a period spent chopping around there before we know what's really going to happen. If the SPX instead breaks higher, then I'd watch 1402.30-1405 potential resistance on 15-minute and 30-minute closes.

Keene Little : 5/8/2008 11:27:27 AM

Looking at the chart of the gold contract (GC, June), a bounce off the May 2nd low that achieves two equal legs up is up at 902.50. This also matches the downtrend line from the March high so that's the upside potential for a long play on gold. Link

But a long on gold is a counter-trend play since the new trend is down until the downtrend line is broken. If gold rallies to 902.50 I would look to short it. I have been short gold for the past month and therefore my bias is clearly bearish. I will be looking to add to my short position if it gets back up to the downtrend line and obviously my stop is just above it.

Jeff Bailey : 5/8/2008 11:24:05 AM

Question then should be ... what's the Up and Dnticks doing. VIX.X should give the clue.

VIX rises from more put buyers/call sellers than put sellers and call buyers.

Jeff Bailey : 5/8/2008 11:21:51 AM

SPY most actives are May $139 and $138 puts. Respective volumes 1,962 and 1,943

Jeff Bailey : 5/8/2008 11:17:08 AM

VXO.X 20.03 -0.68% ... DAILY Pivot here is 19.70.

WKLY Pivot 18.93, R1 20.77.

VXO.X best for OEX and DJX/DIA

Jeff Bailey : 5/8/2008 11:14:07 AM

WSJ headline only thing I see.

Jeff Bailey : 5/8/2008 11:13:33 AM

WM's Yahoo! Finance news headlines ... Link

Jeff Bailey : 5/8/2008 11:12:21 AM

Washington Mutual (WM) $10.68 -1.56% ... #3 most active.

Linda Piazza : 5/8/2008 11:10:39 AM

the OEX's 15-minute 9-ema is now 642.73, potential resistance on 15-minute closes. If that resistance doesn't hold on the 15-minute close, next potential resistance on 15-minute closes is 644.74-645.22.

Linda Piazza : 5/8/2008 11:09:50 AM

The SPX's 15-minute 9-ema is now 1394.81, potential resistance on 15-minute closes. If that resistance doesn't hold on the 15-minute close, watch 1399.20-1399.80 for next potential resistance.

Jeff Bailey : 5/8/2008 11:08:13 AM

Currencies into yesterday's 05:00 EDT close Link

Keene Little : 5/8/2008 11:06:37 AM

Techs are stronger again this morning and look like they'll lead the way in an expected bounce. But the lack of participation of the small caps, and blue chips, so far is a warning that we could see a lot of chop.

Jeff Bailey : 5/8/2008 11:06:20 AM

Forex Currencies Link

Jeff Bailey : 5/8/2008 11:03:51 AM

BIX.X 240.85 -2.40% ... notably weak.

Jeff Bailey : 5/8/2008 11:02:35 AM

Might want to check SPY and SPX most actives ... VIX.X 19.68.

Jane Fox : 5/8/2008 11:01:33 AM

Gold is making a very nice move here. I am long Gold and will add to my position once it closes above 900 again. Link

Jeff Bailey : 5/8/2008 11:00:52 AM

Benchmark SPY $139.35 ... did trade 138.98.

Jeff Bailey : 5/8/2008 11:00:18 AM

See Monday's wrap.

Jeff Bailey : 5/8/2008 11:00:01 AM

Getting an "upside alert" on the iShares Lehman 3-7 year (IEI) $107.78 +0.38% ...

Jeff Bailey : 5/8/2008 10:59:14 AM

Quick tabulation of "crack spread" is 25.31.

Jeff Bailey : 5/8/2008 10:55:45 AM

At April 18 expiration, VIX.X 20.13.

At current 19.80, we've seen more call buying/put selling than we have call selling/put buying.

Linda Piazza : 5/8/2008 10:52:11 AM

Everything on my charts shows that the SPX "should" hit 1388-1388.40, but it's not doing so yet. That offers a warning that prices are holding up better than might be expected. The TRAN and OEX have already met their analogous downside targets, so watch them to see if they bounce or just break down further.

Jeff Bailey : 5/8/2008 10:52:56 AM

Yesterday I updated SPY's "Max Pain" theory value. Really MUST look at SPX's option montage. It could be DIFFERENT than SPY's. Some will remember the carnage months ago when a trader only looked at QQQQ and didn't look at NDX.

Jeff Bailey : 5/8/2008 10:51:00 AM

VIX.X and SPX.X both found action at their daily pivot levels too Linda!

Jeff Bailey : 5/8/2008 10:47:55 AM

TSO $23.30 -5.59% ... another 52-weeker.

Jeff Bailey : 5/8/2008 10:47:30 AM

Valero Energy (VLO) $46.70 -1.91% ... trades its "low crack" 03/17/08 close.

Linda Piazza : 5/8/2008 10:46:37 AM

With the SPX looking as if it will complete yet another 15-minute close beneath the descending 15-minute 9-ema, now at 1395.68, the trend in place since yesterday afternoon has not changed. However the SPX has been consolidating in a choppy somewhat rectangular pattern since about 3:00 yesterday afternoon. This could be either an attempt to steady or else could be the type of formation that typically forms about halfway through a trending movement. A push down toward that 30-minute target, now at 1371.22, can't be ruled out, then. However, I do caution that bears should have their profit-protecting plans in place for a test of the 1388 level, if it's hit.

Jeff Bailey : 5/8/2008 10:43:48 AM

At 10:00 AM March wholesale inventories showed a 0.1% decline. That was better than economists' forecast for a 0.5% build. February's inventory figures were revised down from +1.1% to 0.9%.

Linda Piazza : 5/8/2008 10:43:27 AM

New low of the day on the USDJPY. It's 103.60 as I type.

Linda Piazza : 5/8/2008 10:41:11 AM

The VIX is so far finding support at its daily 9-ema.

Jeff Bailey : 5/8/2008 10:40:46 AM

US Nat. Gas Fund (UNG) $54.61 +0.66% ...

Jeff Bailey : 5/8/2008 10:40:06 AM

EIA released weekly Nat. Gas Inventory ... was a build of 65 Bcf to 1,436 Bcf

Keene Little : 5/8/2008 10:32:06 AM

A push to a new daily high now would indicate we've seen the end of the leg down from Tuesday.

Linda Piazza : 5/8/2008 10:30:44 AM

New low on the TRAN.

Jeff Bailey : 5/8/2008 10:30:35 AM

10:00 Internals found at this Link

Linda Piazza : 5/8/2008 10:19:46 AM

Another 15-minute SPX close beneath the 9-ema on that chart, with that moving average now 1396.29. That keeps viable the potential downside target of 1388.62-1389.53. I'd expect an attempt to steady there, so prepare for that possibility if you're in bearish trades. The 30-minute chart has a much lower potential target, near 1372-1374, but I'm not sure that would be reached today if it's reached at all.

Jeff Bailey : 5/8/2008 10:17:52 AM

30-year yield slipping back below its 200-day SMA. Down 3.2 bp at 4.590%.

Keene Little : 5/8/2008 10:06:06 AM

Early morning price action is not clear enough yet as far as determining whether or not we're going to get one more new low or not. Regardless, I don't think the short side is the correct side this morning as I don't see enough downside potential (famous last words). I'd rather be looking for an opportunity to buy for a bounce that at least corrects yesterday's decline.

A new low (starting to drop as I type) with bullish divergences would set it up. But the long would be for a day trade only for a retracement of the decline before looking for a shorting opportunity.

Linda Piazza : 5/8/2008 10:05:23 AM

The SPX's 15-minute 9-ema held as resistance on that 15-minute close, keeping a potential 1388.55-1390.03 downside target. That doesn't mean it will drop there, but it does mean you need to factor in that possibility.

Linda Piazza : 5/8/2008 10:04:13 AM

Careful here: the VIX has dropped to test its daily 9-ema, with that at about 19.40 and the VIX currently 19.36. This is a potential support zone for the VIX, although the 30-minute chart shows stronger support on 30-minute closes a bit lower, near 19.25. The point is that, if the short-term trend is in fact beginning to change, the VIX could begin to stabilize somewhere through the 19.20-19.40 level. Equity bulls need to keep that possibility in mind. As of 3:47:22 yesterday, I was noting the possibility of an up day today, so I wouldn't be surprised to see one, but I don't see a lot of promise that such an up day would give us any answers unless it breaks the SPX above the recent highs. Even then, that's just going to slam it up closer to the 200-sma. Based on what I'm seeing on the VIX's daily chart, I'm a bit concerned and still advise equity bulls to have their what-if plans in mind just in case there's a stronger downturn over the next week.

Jane Fox : 5/8/2008 9:57:24 AM

Here are your overnight charts. As you can see the NDX futures (NQ) is the only market to even test its ON highs. Link

Linda Piazza : 5/8/2008 9:57:05 AM

The SPX is rising up to test its 15-minute 9-ema a first test of whether the shortest-term tenor has changed. It's also pressing up through the first layer of potential resistance on its 30-minute chart, with that now up to 1397.12 and the SPX at 1398.87 as I type. The next layer of resistance is near 1401.27-1402.72 on 30-minute closes.

Linda Piazza : 5/8/2008 9:55:20 AM

Outstanding commercial paper dropped again, with asset-backed paper again responsible for the bulk of the drop. If this figure is supposed to show how easy or difficult it is for corporations to find cheaper credit, it's not showing any easing of the situation. If my memory serves me correctly, we've had only one week of gains out of the last eight weeks.

Jane Fox : 5/8/2008 9:54:09 AM

Notice the bullish move in the internals. Link

Jane Fox : 5/8/2008 9:52:43 AM

VIX making new daily lows supporting the bulls.

Jane Fox : 5/8/2008 9:51:55 AM

AD line is currently at +472 which is an improvement from the earlier +270 so at least it is going in the right direction for the bulls.

Jeff Bailey : 5/8/2008 9:49:07 AM

Energy Conversion Devices (ENER) $43.84 +25.99% ... "hot" out of the gate.

Jeff Bailey : 5/8/2008 9:47:05 AM

Petroleo Brasileiro (PBR) $64.42 +1.64% ... trading 2:1 split.

Linda Piazza : 5/8/2008 9:46:15 AM

The SPX's 15-minute 9-ema is now 1397.82 and is potential resistance on 15-minute closes. As long as it's below that moving average on 15-minute closes, it maintains a potential downside target of 1388.64. The OEX's is 644.04, with next support at 641.16 on 15-minute closes.

Linda Piazza : 5/8/2008 9:38:48 AM

Keltner outlook on the A/D line: The A/D line jumped up to test potential Keltner resistance on 15-minute closes at +470, also testing Tuesday's high of +853. The A/D line is currently +452, falling back quickly from its +788 high shortly after the open. Equity bulls want to see it maintain 15-minute closes at or above that potential resistance, perhaps converting it to support, but bears may be getting their wish of a quick drop instead. It's still too early in the 15-minute period to be sure.

Linda Piazza : 5/8/2008 9:33:07 AM

Former Fed Chairman Alan Greenspan speaks at 12:30 today, I believe, in New York. I don't know his topic, but you might be aware as he can say some market-moving things.

Linda Piazza : 5/8/2008 9:31:43 AM

SPX futures are higher this morning. If the SPX should rise in accordance with that futures' action, not always a given, where would it find resistance? The 30-minute chart suggests that first potential resistance on 30-minute closes is near 1396-1397.50, with the next resistance band at 1400-1401.50.

If the SPX heads lower again first thing this morning, the 15-minute chart suggests potential support near 1388.80 on 15-minute closes. Then we see. Until and unless the SPX can sustain 15-minute closes above its descending 15-minute 9-ema now at 1397.29, it's continuing its downtrend from yesterday with no change.

What do I expect? While I wouldn't be surprised to see the SPX eventually work its way down toward 1372 or so, I'm not sure it will happen today. While not necessarily predicting an up day, I wouldn't be surprised to see a day in which the SPX rises to test resistance, especially if the SPX drops first closer to its rising trendline off the March low, near 1385-1388 if I'm eyeballing it correctly, and then bulls decide it's safe to buy. I'm not sure it will be safe to buy as I see some troubling signs, but it would be a place I'd expect some to try.

Keene Little : 5/8/2008 9:28:42 AM

Equity futures have rallied a little overnight but it's hardly impressive. When I look at the all-hours chart of ES it looks more like a 4th wave correction to yesterday's decline. This interpretation means we'll get another leg down to complete a 5-wave move down from the 8:00 PM high on Tuesday. Then the market would be set up for a stronger bounce. So watch for the possibility of a drop to a new low (it might look like a retest of yesterday afternoon's low) and then reversal. ES 60-min all-hours chart: Link

Linda Piazza : 5/8/2008 9:21:30 AM

It's looking as if the USDJPY has either fallen below or is testing the rising trendline off March's low. At 103.89 as I type, it's certainly below its daily 10-sma at 104.45. Those hoping for an equity bounce today want to see the USDJPY bounce from its current level.

Jane Fox : 5/8/2008 9:21:52 AM

For the longest time Crude, Gold and the US$ were all connected. GOLD/Crude would trade in one direction and US$ the other (the classic flight to the safety of Gold). Then something happened and Crude entered a world all by itself. I still think the old intermarket relationship will right itself someday but I don't know when. Until then I will trade the charts of Crude and Gold and not worry about it. Link

Linda Piazza : 5/8/2008 9:17:18 AM

I've been hearing analysis that says that ECB President Jean-Claude Trichet has been softening his hawkish stance lately. In the introductory statement in his press conference this morning after the ECB held rates steady, I certainly didn't detect any softening, but then I wasn't comparing it word-by-word to previous statements. If you'd like to read it for yourself, you can find it at the following link: Link . Trichet again emphasized the ECB's main goal of providing stability, dwelling on rising inflation concerns.

Jane Fox : 5/8/2008 9:09:27 AM

Of course the story of the day yesterday was Crude. Once again it made new yearly highs at $123.92, Link

Jane Fox : 5/8/2008 9:07:16 AM

I was not surprised at the SPX falling yesterday for the MACD is telling us this was inevitable. The thing that did surprise me was amount it dropped. The high was 1419 and low 1391 ? 28 points. Link

Jane Fox : 5/8/2008 8:58:22 AM

NEW YORK (MarketWatch) -- The death toll from the cyclone in Myanmar could hit 100,000, top U.S. diplomat Shari Villarosa told The Wall Street Journal on Wednesday. Villarosa, who called the situation "increasingly horrendous," said that the region was running low on food and water and that disease outbreaks were possible, the article reported. Over the weekend, Cyclone Nargis struck the Irrawaddy River delta in Myanmar, claiming at least 22,000 lives, according to early media reports.

Jane Fox : 5/8/2008 8:58:02 AM

The overnight markets trading sideways with a small hint of bullishness so not much to say here. Link

Jane Fox : 5/8/2008 8:51:37 AM

LONDON (MarketWatch) -- The Bank of England left its key interest rate unchanged at 5% Thursday as inflation fears persuaded it to take a wait-and-see approach after making three rate cuts since December.

The pause was expected by the majority of economists after the central bank argued earlier in May that the correction in credit markets has now gone too far and risk appetite is likely to gradually return to the financial system.

Still, the decision is largely seen as just a matter of timing, with economists predicting more rate cuts to come this year, including a likely cut at its next meeting in June, as the economy has continued to slow.

The FTSE 100 index ticked slightly lower after that decision as there had been a small hope for an immediate cut. The index stood down 0.1% at 6,253.30.

Jane Fox : 5/8/2008 8:50:48 AM

WASHINGTON (MarketWatch) -- U.S. unemployment lines got shorter last week, as the number of people filing for the first time for unemployment benefits fell by 18,000 to 365,000 on a seasonally adjusted basis in the week ended May 3, the Labor Department reported Thursday.

Initial claims have been extremely volatile over the past six weeks, seesawing between 345,000 and 406,000. The four-week average of initial claims, which smoothes out one-time factors such as bad weather or holidays, moved up by 2,500 to 367,500.

There were no special factors in the most recent week, a Labor Department spokesman said. Layoffs have been fairly muted in comparison with past recessions, when first-time claims typically rise to at least 400,000 and remain there. In this downturn, rather than fire workers, employers have been cutting hours and forcing them to work part-time.

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