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Keene Little : 5/20/2008 1:23:53 AM

After the Trannies made a new intraday high on Monday there are many who are invoking the DOW Theory and stating it must mean we're in a new bull market. Unfortunately for those who claim this, they're missing a vital piece--the DOW must join the Transports in making a new high in order to confirm the new buy signal. That means the DOW must exceed it's October 2007 high (14164) in order to confirm a new bull market signal by DOW Theory requirements.

The TRAN dropped below its August low last November and was then followed by the DOW in January and that's when we had a confirmed bear market sell signal by DOW Theory. We're still on that sell signal until the DOW can make a new all-time high to confirm the new high for the TRAN. So be careful with what you're hearing about the Trannies and what it means for a new bull market. Right now we have Major non-confirmation between the transportation stocks and the industrial average and that continues to be bearish.

Keene Little : 5/20/2008 12:42:24 AM

Tuesday's pivot tables: Link and Link

On Monday SPX came oh so close to closing its Jan 4th gap (needs to tag 1447.16) and it's broken uptrend line from 2002 (same level) but got shot down and closed below its 200-dma again, leaving a bearish shooting star (or more bearish gravestone doji) at resistance. The bulls could still make another assault but the bears are on the hill with tactical advantage here and each failure to hold the 200-dma is going to embolden them to start charging down the hill. Link

Something we saw as the market made a new high in October vs. the one in July of last year was divergence between the new price highs and market breadth. The bearish divergence was warning us that the new price highs would not hold. This is the same comparative chart as I was showing back then and warning of a coming decline, updated through Monday's prices: Link

I'm warning about it again as you can see the clear lack of market breadth, as measured in the lower highs in the advance-decline line as compared to the new price highs. This is not a timing signal but is a warning. The bounce from March continues to fit well as merely a correction to the decline from October and not the start of a new bull market. I do not think it wise to get bullish this stock market.

This daily chart of NYSE shows the decline from October and the bounce back up to the 62% retracement of the October-January decline, which is where price closed Friday and Monday. This follows today's tag of its broken uptrend line from March 2003. If this isn't a setup to get short the market I don't know what is. Who knows if it'll work but it's a great setup. Link

OI Technical Staff : 5/19/2008 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.

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Jeff Bailey : 5/19/2008 6:19:15 PM

Leading Indicators (#1 weight to #10 weight) at this Link

Note: Interest rate spread and Stock price (500) for 05/19/08 are 21-day SMA.

Jeff Bailey : 5/19/2008 5:55:26 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 5/19/2008 4:47:52 PM

Closing Internals found at this Link

Jeff Bailey : 5/19/2008 4:33:17 PM

DXY's 04:00 tick was 73.060

Jeff Bailey : 5/19/2008 4:23:18 PM

The Conference Board's weighting of LEADING, coincident and lagging indicators at this Link

Jeff Bailey : 5/19/2008 4:07:30 PM

Survey that was sponsored by the International Council of Shopping Centers says 51% of consumers receiving a tax rebate intend to use it to pay off debt. In a similar survey taken between 01/31/08 thru 02/03/08, 46.2% said they would use the tax rebate to pay some of what they owe.

James Brown : 5/19/2008 4:00:39 PM

Remember...we are suggesting a speculative put play in the USO with an entry point at today's closing bell. Oil futures expire after the close and we're expecting some profit taking.

James Brown : 5/19/2008 3:59:39 PM

MOS, another fertilizer play, has produced what appears to be a bearish engulfing candlestick today. Shares hit our recently adjusted stop loss but I'd keep an eye on it to see if the stock bounces near $120 and its 50-dma.

Dips near the 100-dma in MOS have been great entry points in the past but that would require MOS to slip toward $110-108.

Keene Little : 5/19/2008 3:57:39 PM

Looks like an effort to keep the DOW and SPX in the green for today's close.

James Brown : 5/19/2008 3:57:17 PM

JOYG is producing a short-term reversal today. I continue to suggest readers take profits in this play.

James Brown : 5/19/2008 3:56:26 PM

Trading in CF Industries (CF) doesn't look healthy. The stock is down 5.2%. Shares have broken their short-term trend of higher lows. Bulls may want to exit here even though CF might bounce near $130 and its 50-dma.

Keene Little : 5/19/2008 3:54:55 PM

SPX (and the others) have broken their uptrend lines from Friday, May 9th. The updated SPX 30-min chart shows a breakdown from its parallel up-channel after tagging the top of it today. That uptrend line is currently near 1425.75 so watch to see if acts as resistance on a retest (and another opportunity to short it). Link

Linda Piazza : 5/19/2008 3:53:50 PM

Time to make end-of-day decisions, if you haven't already done so. The OEX, like so many other indices, has formed a particularly bearish form of doji for the day's candle. In the OEX's case, that candle pierced the 200-ema (not sma) and ran up to a new recent high and then it pulled back a long way back to form that doji at resistance. This is of course a potential reversal signal, but we have of course seen many such potential reversal signals be followed with a strong gain, so you have to be aware of that possibility once again. In normal times, we would expect such a day to be followed by either consolidation or an actual pullback, perhaps to the 10-sma again, now at 646.90, or perhaps even lower. Lately, though, bulls have trumped any such plans.

Shorter term, barring a drop below 650 at the open tomorrow, which could happen, of course, the OEX is so far ending the day near strong potential support there, strong enough to perhaps bounce the OEX back toward 653.50-654.10. Then, we see whether the OEX can zoom back toward 656.34-657.52. I'm not so sure it can, but we'll have to find that out tomorrow.

A gap lower tomorrow morning, below 650, would turn that potentially strong support into potentially strong resistance and would set up a potential target near 658.40. So far, however, the support on this short-term chart holds.

I just calculated a few minutes ago that the SOX has gained nearly 27 percent off its low this year. Time for a pause soon, don't you think, when we see some indices gaining that much, that fast? I think so, but the big money people haven't consulted me yet.

Keene Little : 5/19/2008 3:52:16 PM

Linda, you're right. It does show the value of watching several sectors and indices to watch for confirmation or non-confirmation of broader market moves. The other sectors will often show when the market is tipping its hand, but you have to look for it.

Linda Piazza : 5/19/2008 3:43:50 PM

Keene, to that hindsight model, add the fact that the TRAN ran up to a new high but then didn't climb to another new high of the day at about 1:15 when other indices were doing so.

Linda Piazza : 5/19/2008 3:42:24 PM

The OEX is approaching that next potential support level mentioned earlier. That's now from 650.09-651.40. These are composed of potential Keltner support on 15-minute and 30-minute closes as well as a rising trendline off the 5/09 afternoon swing low. Bears should be watchful now for bounce potential, protecting their profits.

Keene Little : 5/19/2008 3:40:29 PM

I'm still working on trying to make hindsight trading a working model but I have a few kinks to work out yet. But in hindsight you can see how the techs were warning us this morning, by not following the DOW and SPX to new highs (at least not as readily), that the rally probably would not hold.

Now we've got a complete reversal of today's gains (not quite in the DOW yet) and that gives us some bearish reversal patterns heading into tomorrow. The question remains for me as to whether we're going to get just a corrective pullback or the start of something more significant. We'll have to wait for answers to that question but in the meantime I prefer the short side.

Jeff Bailey : 5/19/2008 3:38:14 PM

SPY $142.66 (unch) ...

Jeff Bailey : 5/19/2008 3:37:53 PM

Mexico releases it March industrial output. Down 4.9%; much weaker than economists' forecast of +1.0%.

Jeff Bailey : 5/19/2008 3:32:42 PM

Nigeria announced today that it has signed a $2B deal with Exxon/Mobil (XOM) $94.21 +1.66% to help cover a funding gap which has delayed some joint ventures. The funding is to be used for upstream development projects.

Linda Piazza : 5/19/2008 3:26:22 PM

Next potential resistance for the OEX is 655.21-655.81 on the 30-minute chart.

Jeff Bailey : 5/19/2008 3:26:16 PM

Bond market closed at 03:00 PM EDT. The 13-week yield ($IRX.X) finished up 0.5 bp at 1.805%, while the 5-year yield ($FVX.X) finished down 2.6 bp at 3.090%. The benchmark 10-year yield ($TNX.X) slipped lower by 1.1 bp to 3.939%. The longer-dated 30-year yield edged down 0.4 bp to 4.575%.

Jeff Bailey : 5/19/2008 3:21:11 PM

SPY $143.06 +0.28% ...

Jeff Bailey : 5/19/2008 3:20:49 PM

VIX.X 16.89 +2.55%

Jeff Bailey : 5/19/2008 3:20:23 PM

May have been a "bad tick" to VIX.X 17.89.

Keene Little : 5/19/2008 3:08:59 PM

In addition to Linda's VIX charts with the K-Bands, here's an update to my daily chart showing the support line near 16 from last October: Link . I still find it rather incredulous that there's so much bullish complacency already when the bounce off this year's lows have only retraced 50%-62% of the decline from October.

But that's what happens in these kinds of corrections and why the next leg down tends to be so strong. Just look at the decline during 2000-2002 and you can see the retracement of each leg down that was then followed by an even stronger and sharper decline.

Keene Little : 5/19/2008 2:59:46 PM

Looks a corrective 3-wave bounce so far and I believe it will head lower still (even if it chops a little higher first).

Linda Piazza : 5/19/2008 2:51:21 PM

Here's the VIX chart from my 1:06:11 post when I warned that support for the VIX appeared to be firming or at least attempting to firm: Link Here's the updated chart, showing the subsequent hard bounce: Link Now the VIX faces potential resistance on 30-minute closes just under 17. Next resistance above that is now near 17.80-17.90.

Jeff Bailey : 5/19/2008 2:47:57 PM

Today's 01:58:36 ... should be sell two (2) of the SPY June $148 Calls (SFB-FR) at the bid of $0.78.

Jeff Bailey : 5/19/2008 2:43:41 PM

NAKED PUTS will be anything close to $135.

Linda Piazza : 5/19/2008 2:43:03 PM

Potential resistance for the OEX at 655.93-657.93 on 15-minute closes and a bit lower than that on 30-minute ones. If the OEX should sustain levels beneath about 653.50, its next support is near 651.34.

Jeff Bailey : 5/19/2008 2:42:41 PM

Correction alert! ... 01:58:36 is NAKED Call

Jeff Bailey : 5/19/2008 2:34:51 PM

At the 02:00 tick, DXY was 73.05. Also WKLY Pivot.

Jeff Bailey : 5/19/2008 2:33:51 PM

10-year Yield ($TNX.X) ... down 0.4 bp at 3.846%. WKLY Pivot here.

Jeff Bailey : 5/19/2008 2:31:30 PM

VIX.X 17.03 +3.40% ... session high so far today has been 17.34. You should KNOW where the WKLY Pivot is at.

Keene Little : 5/19/2008 2:30:55 PM

Similar to what Linda mentioned about SPX potentially leaving a long spike above the body of today's candle, SMH stands to do the same thing today. So far the candle is a bearish shooting star following a gap up and smacking resistance at the 50% retracement of its July-January decline at 33.98. There's still 1-1/2 hours to the day so anything can happen but right now this one looks bearish. Updated daily chart: Link

Jeff Bailey : 5/19/2008 2:30:09 PM

RVX.X 22.62 +1.16% ... back to WKLY Pivot. Was NOT able to see a 60-minute interval close ABOVE this morning.

Jeff Bailey : 5/19/2008 2:28:52 PM

SPY $143.07 +0.28% ...

Jeff Bailey : 5/19/2008 2:28:37 PM

BIX.X 241.58 -0.04% ... slips back red. Slips back under WKLY Pivot. Session high 246.01 just a smidge under WKLY R1.

Jeff Bailey : 5/19/2008 2:26:20 PM

02:00 Internals found at this Link

Jeff Bailey : 5/19/2008 2:23:02 PM

OPEC: President Chakib Khelil saying OPEC will take no decision on output levels ahead of September meeting, and stressed that "current prices are not based on traditional supply and demand."

Linda Piazza : 5/19/2008 2:31:39 PM

I think Keene mentioned this earlier, but something that SPX bulls don't want to happen is for the SPX to end back below the daily 200-sma, leaving a long spike above it.

Keene Little : 5/19/2008 2:17:39 PM

I had mentioned the brick wall for the RUT was 745-748. It nearly made it through the wall today--the high is at 747.99.

Linda Piazza : 5/19/2008 2:12:54 PM

I've been checking the MID, too, because it tends to be, in some market environments, an index that front runs gains in other indices. The MID, like many other indices, is pulling back as I type, but it so far remains above a short-term rising trendline in place since 5/14. That trendline now crosses near 882.80, and the MID is currently 885.29. I would watch how the MID behaves if it should drop and test that trendline again for short-term guidance as whether the strongest momentum is waning or not.

James Brown : 5/19/2008 2:11:38 PM

For the last four days in a row the DDX disk drive index has been struggling to breakout over resistance near 130 and its exponential 200-dma. The DDX appears to be pulling back today....

James Brown : 5/19/2008 2:10:39 PM

yeah, what was I thinking there... some reason I was looking at semiconductors versus SNDK and not disk drives. Brain fade...

Jeff Bailey : 5/19/2008 2:09:21 PM

Disk Drive Index (DDX.X) 127.99 -1.20% ... Haven't checked of late, but SNDK usually a "heavyweight" in DDX.X

James Brown : 5/19/2008 2:04:24 PM

Trading Idea - SanDisk (SNDK) is under performing the market and the semiconductor index (SOX) with a 4% decline. Keep an eye on its trendline of support and the $30.00 level. Bulls can buy a bounce and bears can short a breakdown! chart: Link

Linda Piazza : 5/19/2008 2:01:54 PM

Seems silly to warn of sudden pullbacks that don't appear . . . until they do. However, so far, this is just that, a pullback. I've been warning since Friday to have what-if plans in place, so you should know now what you'll do if this pullback gets too deep and should have an idea of what "too deep" means for your trade. If the OEX begins sustaining values below about 654.80, then it's breaking back inside that rising wedge shape that was in effect since the middle of last week, and there's then some doubt about how sustainable the rally mode will be, although it won't yet be proven that it won't be sustained, if you can stomach those double negatives.

Jeff Bailey : 5/19/2008 2:00:32 PM

SPY's June "Max Pain" Theory tabulation at Friday's close $134.00 ... $1 inc.

Keene Little : 5/19/2008 2:00:23 PM

Well, not much question about the techs. Not only did the low near 1:00 PM give way but price took a dumper. Nice little sell program there.

Jeff Bailey : 5/19/2008 1:59:30 PM

VIX.X 16.09 -2.30% ...

Jeff Bailey : 5/19/2008 1:58:36 PM

Swing trade sell naked puts alert! ... Let's sell two (2) of the S&P Depository Receipts SPY June $148 Puts (SFB-FR) NAKED and at the bid of $0.78.

SPY $143.79 +0.79% ...

Tab Gilles : 5/19/2008 1:58:18 PM

I'd mentioned this solar stock last week.

EMCORE (EMKR) $9.20 +$1.00 (+12.2%) Link

Here's a 20% mover... Cheniere (LNG) today looks nice, however this natural gas stock was $40 back in November! Link

Linda Piazza : 5/19/2008 1:56:55 PM

The SPX is now testing its 15-minute 9-ema at 1437.40 on 15-minute closes; the OEX and Dow approach theirs but haven't tipped quite over to touch them. Nope, the OEX did as I typed. It's at 657.35 and the OEX is right there. Next potential support is 656.62 if this doesn't hold.

Keene Little : 5/19/2008 1:42:24 PM

With that little push higher, the lows near 1:00 PM are now the important levels for the bulls to hold. A drop below them should be the indication that the day's highs are probably in. Lots of bearish divergences at those last highs as well.

Linda Piazza : 5/19/2008 1:40:30 PM

The OEX's 15-minute 9-ema is now 657.30. For the SPX, it's 1437.37.

Linda Piazza : 5/19/2008 1:38:45 PM

No new high for the TRAN yet, so that's another small divergence. The TRAN could be doing nothing more bearish than just setting up a bull flag pullback, though, so I'm not reading dire things into this, just watching for signs that its strength could be flagging, signaling that the same could happen with other indices such as the Dow, SPX and OEX.

And, on a larger level, I'm watching those volatility indicators as I've been doing all day and as all kinds of traders, advisers and commentators are doing, too.

Jane Fox : 5/19/2008 1:33:45 PM

The internals are very bullish although the AD line is under +1000. What's with that? Link

Linda Piazza : 5/19/2008 1:31:08 PM

We've had a new high of the day for the OEX. However, the VXO, the old VIX calculated using OEX options, is not at a new low of the day. It's 16.22 with the previous low of the day 16.04. With perhaps some post-opex maneuvering going on, I'm not sure whether that divergence is as relevant as it might be at other times . . . and, as I typed, the VXO headed down a bit, and is now at 16.15, still not a new low but certainly within testing levels.

Keene Little : 5/19/2008 1:28:15 PM

The little sideways consolidation makes it look like we'll get another push higher. If we get a new high and then it drops back below the lows of this consolidation near the highs, that will be the signal that the high is probably in for the day. Until then this remains a bullish price pattern.

James Brown : 5/19/2008 1:22:16 PM

Exit alert! Oil Services HOLDRs (OIH) just hit our target at $219.00.

Jeff Bailey : 5/19/2008 1:14:58 PM

3-month bid-to-cover was 3.01

Keene Little : 5/19/2008 1:11:18 PM

The DOW missed tagging the 13130-13132 zone at its last high so let's see if it can do it now. If it just keeps heading higher then the next upside target is 13219 which is its 62% retracement of the October-January decline.

Jeff Bailey : 5/19/2008 1:10:28 PM

01:00 tick on the 13-week yield ($IRX.X) was 18.30, or 1.830%.

James Brown : 5/19/2008 1:09:30 PM

Trading Idea: Sterlite Industries (SLT) , a large copper producer in India, is up 4.3% and breaking out over resistance near $22.00. This almost looks like an inverse head-and-shoulders pattern with the neckline near $22.00. The H&S pattern would forecast a $27 target. This might be worth adding to your watch list.

Jeff Bailey : 5/19/2008 1:09:29 PM

3-month (13-week) results (.pdf) Link

Linda Piazza : 5/19/2008 1:08:46 PM

The TRAN is bouncing, but needs a new high to confirm that bounce from the 15-minute 9-ema. It's 5514.25 as I type, with the previous HOD at 5536.52.

Jeff Bailey : 5/19/2008 1:07:13 PM

3-month and 6-month Treasury auction results posted.

Linda Piazza : 5/19/2008 1:06:11 PM

If the OEX doesn't drop all the way to its 15-minute 9-ema, now at 656.82, before bouncing to a new sustained high again, then it's sustaining its pattern of strength instead. Be careful here as the VIX is attempting to firm up Keltner support: Link Whether that attempt will be successful or not is not yet proven.

James Brown : 5/19/2008 1:03:34 PM

It looks like the Brazilian market is closed today but shares of Brazilian stock Aracruz Celulose (ARA) is up 2.8% and hitting new all-time highs over $90.00.

GGB, another Brazilian company and a steel stock, is up 3.3% to a new all-time high over $50.00.

PBR, is up 2.8% to a new all-time high at $72.65.

Linda Piazza : 5/19/2008 12:59:10 PM

The TRAN is not bouncing from its 15-minute 9-ema, at least not yet. That's at about 5500 with the TRAN currently just below it, at 5497.16. If the traders can't send transports higher, it's possible that the TRAN could drop to next potential Keltner support at 5468.70.

James Brown : 5/19/2008 12:59:04 PM

Solar-energy stock LDK Solar (LDK) is soaring 11.2% and breaking out over resistance near $40.00 and its 200-dma. I'm not seeing any specific news on the company.

Solar-energy stocks as a group are mixed but there are several joining the rally today. TSL +6.1%, JASO +6.9%, STP +4.9%, AKNS +4.6%, CSIQ +7.4%, CSUN +8.1%, YGE +6.1% and finally..

SOLF +16% to $26.56, which is on top of Friday's 20% gain. The stock is up about 90% in just 7 trading days.

Personally, I would not chase these stocks. Several of them look EXTREMELY overbought here. If I had to pick one YGE might be tempting on today's bounce.

Linda Piazza : 5/19/2008 12:56:46 PM

The OEX hasn't quite dropped all the way back to its 15-minute 9-ema yet (see 12:37 post). That moving average, potential support on 15-minute closes is now 656.64. Instead, the OEX is steading near its 7-minute version, now at 656.30. It's possible that the OEX will still drop toward that 15-minute version, however, and bulls want to see a bounce from it if it's hit, but several volatility indices are bouncing from 30-minute support levels, so be careful here.

Jeff Bailey : 5/19/2008 12:54:50 PM

RVX.X 21.58 -3.48% ... It's WKLY Pivot levels are ... 19.83, 21.09, Piv= 22.62, 23.88, 25.41.

Jeff Bailey : 5/19/2008 12:49:51 PM

Sector Losers Home Construction -0.43% and Disk Drive -0.01%

Jeff Bailey : 5/19/2008 12:48:14 PM

SPY's WKLY R2/MONTHLY R2 and its 61.8% conventional highly correlative.

James Brown : 5/19/2008 12:46:41 PM

Harley Davidson (HOG) is up 2.7% and breaking out over resistance near $38.00 and the top of its $34-38 trading range. HOG looks like it might have additional resistance in the $41.50-42.00 zone. My concern about HOG is how will this company (and its stock) hold up with consumers still facing a crunch. Yet if you look at the chart HOG certainly looks like it may have built a bottom over the last five months.

Jeff Bailey : 5/19/2008 12:46:11 PM

SPY, DIA, IWM and QQQQ ... daily interval montage Link

SAME fib retracement I've been using since late January.

Jane Fox : 5/19/2008 12:42:10 PM

The Russell's "VIX", RVX, and the VIX are both in sync with their respective futures markets. This is good news for the bulls because it is telling you there is not a lot to worry about. Link

Jeff Bailey : 5/19/2008 12:41:02 PM

SPY $144.09 +1.00% ... does get trade at QRTR R1. SPX's session high has been 1,439.29.

Will want to draw attention to some of the WKLY and conventional retracement levels.

James Brown : 5/19/2008 12:39:16 PM

Amazon.com (AMZN) is up 9.8% after being added to Goldman Sach's (GS) buy list today. Shares of AMZN are breaking out over the $80 mark and its 200-dma. The most recent data listed short interest at 13% of the 312 million-share float.

Today's move marks a brand new quadruple-top breakout buy signal on the P&F chart: Link

Linda Piazza : 5/19/2008 12:38:16 PM

If the OEX should instead rise without pulling back, then I'd be particularly watchful of pullback potential near 659.

Linda Piazza : 5/19/2008 12:37:00 PM

It's beginning to look about time now for the OEX to pull back to test its 15-minute 9-ema, now at 656.54. I can't promise that's going to happen, of course, but signs certainly point to the possibility. Don't trade on this information: do update your trading plans incorporating this what-if possibility.

Linda Piazza : 5/19/2008 12:35:43 PM

Dow, SPX and OEX traders should be watching the TRAN closely now. While those three indices have been making new intraday highs in the last few minutes, the TRAN has been pulling back and you want the TRAN corroborating at the very least and preferably leading any new movement.

Linda Piazza : 5/19/2008 12:27:52 PM

The TRAN has dropped down to test its 15-minute 9-ema for the first time today. that's near 5500.20 on 15-minute closes. The TRAN is 5501.03 as I type.

Keene Little : 5/19/2008 12:28:16 PM

I have some Fib projections for the move up from May 9th lined up at DOW 13130-13132. That level makes for a good area to watch for a top and a reversal into a short play. Whether it will lead to a pullback or something more is unknown at this point but I like the odds for at least a pullback from there. 30-min chart: Link

James Brown : 5/19/2008 12:23:25 PM

Dow-component McDonald's (MCD) is not participating in this rally. Shares are up 4 cents to $60.57.

Jane Fox : 5/19/2008 12:22:53 PM

Crude is having a very slow day today and it has been a struggle staying awake. My new system is performing very nicely keeping me out of losing trades (mostly) but grabbing the trends (although they are far and few between today). Link

James Brown : 5/19/2008 12:21:22 PM

Another OI play nearing our target is the Oil Service HOLDRs (OIH). The OIH is up 1.6% to $218.55. Our target is the $219.00-220.00 zone.

Jeff Bailey : 5/19/2008 12:20:50 PM

12:00 Internals found at this Link

Jane Fox : 5/19/2008 12:19:38 PM

SPX is making a bold move and I think it is a pretty safe bet we will see 1460 before it takes a breather. I expected a move up but expected it to be choppy but this has been a pretty smooth move. Link

James Brown : 5/19/2008 12:19:06 PM

Potential Exit -- Nucor (NUE) is up another 1.4% and breaking out over short-term resistance near $83.00, currently at $83.25. Our second target is $84.00. More aggressive traders may just want to let this run and keep moving their stops up.

James Brown : 5/19/2008 12:14:08 PM

I find it very interesting that the agriculture-fertilizer names are NOT rallying with the markets today. Shares of TNH are probably the exception.

James Brown : 5/19/2008 12:12:15 PM

Potential Exit Alert - OI call play CNOOC (CEO) is up another 3% and trading near $198.00. Our target has been the $199-200 zone.

James Brown : 5/19/2008 12:10:13 PM

Entry point - OI call play in defense stock Alliant Tech (ATK) has hit one of entry points to buy calls. The stock is breaking out from its two-week consolidation pattern.

Linda Piazza : 5/19/2008 12:03:14 PM

The VIX is getting scary low (scary for bulls). Currently 16.04 but with a day's low of 15.99, it's testing potential Keltner support on 30-minute closes at 16.09. It's also testing levels last seen last October and has actually punched just a little below them.

Be aware that we once had a pattern when 16 would be toward the high end of the range and 10, the low, so it's always possible that such a pattern could be reinstituted again. In fact, one Keltner chart with support that first popped the VIX back up after it was tested on 5/02 is now showing the VIX coming back and breaking through that support in a small way. It's possible, according to that chart, that the VIX could indeed drop back toward 10, but I certainly wouldn't count on that right now, and I'd be scared enough to keep updating my plans to protect my bullish profits.

Keene Little : 5/19/2008 11:50:21 AM

With the RUT pushing up against its brick wall and making minor new highs since the high last Wednesday, the bearish divergences can't be encouraging to bulls. 60-min chart: Link

Jeff Bailey : 5/19/2008 11:46:58 AM

Morgan Stanley High Tech (MSH.X) 621.85 +1.14% ... retraces 61.8% of 10/11/07 high to 01/23/08 low.

Linda Piazza : 5/19/2008 11:45:00 AM

The VIX approaches what could be (emphasis on "could") strong potential support on 30-minute closes at 16.10. The VIX is 16.18 as I type, just off its 16.15 low of the day.

Keene Little : 5/19/2008 11:43:44 AM

Getting the push higher now. Techs still not following and RUT is now back into the 745-748 resistance zone (more like a brick wall). Be careful if long now--pull your stops up tighter. If we start a pullback I'll then be looking for clues as to whether it's just a corrective pullback before pressing higher again (SPX 1448 upside target in that case) or the start of a more serious decline.

Linda Piazza : 5/19/2008 11:43:28 AM

The RUT's early morning high on Friday was 745.75. The RUT is currently 745.45 with a potential upside target on the 15-minute chart at 746.77. That's potential resistance on 15-minute closes, too, although I'm not so sure resistance matters so much today!

Seriously, continue to monitor these indicator indices such as the RUT, SOX and TRAN, as well as internals. Everything is going great guns right now, but that doesn't mean that trade management and account management should be relaxed.

Keene Little : 5/19/2008 11:40:09 AM

The price pattern would look best with another minor push higher and then start at least a pullback. I think SPX 1440 will be about it if we see another push up.

Linda Piazza : 5/19/2008 11:36:21 AM

For SPX traders, the SPX did have a successful retest of its 15-minute 9-ema this morning, dropping down to test it and then bouncing from it, so you can use that as a benchmark for whether something has changed from about midday on Friday. That's now at 1431.94 and still rising. Bulls would like to see that or the support below, ranging down to 1428.27, hold on 15-minute closes.

Keene Little : 5/19/2008 11:35:46 AM

SPX rallied above the top of the potential rising wedge that I showed on the 30-min chart this morning so that's not the right pattern. It has now reached the top of a parallel up-channel from May 9th and an uptrend line from March 24th (I consider this an "internal" uptrend line since there are price highs above it since then), both localed here near 1436 (60-min chart): Link

Bullishly I see the possibility for a pullback followed by another push higher to the 1448 area. It takes a break below this morning's low now to tell us something more bearish is starting.

Linda Piazza : 5/19/2008 11:31:53 AM

For now, OEX bulls can use the 7-minute 9-ema as a benchmark for testing whether the tenor remains the same. That's now at 655.54 on 7-minute closes. The OEX tested that about 30-minute ago, so we've got a successful test behind us today. We haven't yet had a successful retest of the 15-minute version because the one test today had the OEX closing beneath that benchmark but then bouncing up.

Linda Piazza : 5/19/2008 11:30:16 AM

There's no pulling back yet. Gains accelerate. The OEX now is in breakout mode on both the 7- and 15-minute charts, as long as it ends this 15-minute period above 655.77, so I'm rolling up to a 30-minute chart for a next potential upside target. That's at 658.93, and that's also of course potential resistance on 30-minute closes.

Keene Little : 5/19/2008 11:27:31 AM

SPX and DOW continue pushing to new highs but NDX is lagging so it (not a new morning high yet) so it tells us to be cautious about the upside.

Jeff Bailey : 5/19/2008 11:16:46 AM

Sector Winners ... Transports +2.62%, Semiconductors +1.59%, Utilities +1.20%, Gold Bugs +1.19%

Sector Losers ... Home Construction -1.15%, Disk Drives -0.47%

Robert Ogilvie : 5/19/2008 11:15:25 AM

I know Linda comments on the OEX but I thought I would insert a comment on peak Open Interest (OI) levels. Peak OI levels on calls can represent resistance while levels on puts reflect support.

June Calls Peak OI = 3,178 at 660 Strike June Puts Peak OI = 4,077 at 640 Strike

Linda Piazza : 5/19/2008 11:14:06 AM

The VIX is still headed down, still supporting the bullish case.

Linda Piazza : 5/19/2008 10:58:21 AM

I'm still not sure the OEX is through testing resistance. In fact, it started higher as I began typing. Although I wanted to show you the 7-minute chart earlier, I'm switching back to the 15-minute version for comments since more follow that time frame. Potential resistance there is now 655.49 on 15-minute closes.

Robert Ogilvie : 5/19/2008 10:56:03 AM

The Nasdaq's A/D is nearly flat at 1348/1320 and the 100 $NDX has dipped below the 2040 resistance.

Linda Piazza : 5/19/2008 10:56:00 AM

And here's how the A/D line is looking after having zoomed from the middle to the bottom of its black Keltner channel and then all the way to the top: Link The A/D line has been doing a strange number this morning, not trending but instead jumping from one boundary to the other of the black channel. Although I did warn of potential support being tested early this morning, it really hasn't been possible to make any further predictions based on the A/D line's actions.

Linda Piazza : 5/19/2008 10:52:24 AM

Here's how the OEX is looking now on its 30-minute Keltner chart: Link And here's how it's looking on its 7-minute one: Link

Linda Piazza : 5/19/2008 10:49:36 AM

The RUT's volatility index, the RVX, finally dropped to a new low from which it's now climbing. Simultaneously, the RUT broke to a new high of the day from which it's dropping, but I'm watching the RUT form 7-mnute closes at or above the 7-minute 9-ema since about 20 minutes after the open, so that's a very short-term benchmark that can be watched. That's now at 741.86 with further potential support at 741.50. The RUT is 742.65 as I type.

Keene Little : 5/19/2008 10:46:33 AM

The spike higher in the DOW and SPX to the new highs just past 10:30 AM was not matched by the techs (or semis) so that's the first heads up that this morning's rally may not hold, or at least indicate the start of a larger consolidation.

Linda Piazza : 5/19/2008 10:47:05 AM

The OEX has tested and even closed a 7-minute period above the 7-minute target and potential resistance. It's back below it now, though, with that potential resistance now driven up to 655.14. The OEX of course jumps above this resistance at times, breaking out as it did last Wednesday, but it doesn't tend to stay above it too many 7-minute bars in normal times. I don't see any signs of an imminent reversal on this chart, but I always start watching for them when I see this resistance tested or breached.

Jeff Bailey : 5/19/2008 10:45:48 AM

Most Actives ... QQQQ $50.19 +0.35%, YHOO $27.94 +1.01%, MSFT $29.68 -1.03%, INTC $25.19 +0.76%, SPY $143.46 +0.56%, SOLF $26.08 +14.18%, PFE $20.03 (unch), CPSL $7.57 +26.80%, DELL $21.30 -0.05%, NVDA $25.08 +2.74%

Jeff Bailey : 5/19/2008 10:42:37 AM

Leading indicators for April were released at 10:00 AM EDT and were slightly above economists' expectations of unchanged with a reading of +0.1%.

Six (6) of the ten (10) leading indicators rose, including stock prices, interest rate spreads and housing permits. Those increases helped offset a sharp decline in average weekly hours worked and consumer spending.

Jane Fox : 5/19/2008 10:41:18 AM

Just can't stay away. The internals are all in sync and bullish. Link

Linda Piazza : 5/19/2008 10:32:35 AM

The RUT's volatility index isn't the only entity doing some zooming around today. The A/D line dropped heavily and then climbed just as quickly. The current 15-minute candle doesn't look quite as strong, however, and is in fact a potential reversal signal that's forming right at Friday's early morning A/D line high. In other words, the A/D line is testing the gap left Friday morning and is having some difficulty so far pulling above it. It's got a potential upside target of about 690, but if that reversal signal sees follow through to the downside, that upside target won't be met, of course. The A/D line is +305 as I type, hoving above support that extends down to +86.

Linda Piazza : 5/19/2008 10:28:51 AM

The RVX, the RUT's volatility index, is still dropping off its high of the day as the RUT attempts to follow other indices higher. The RUT is still slightly underwater as I type, though, and the RUT's failure to play the leader this morning is a warning sign to pay attention because something is not quite right with the quality of the rally.

I'm watching the RUT for just that reason, not because I've been trading it this morning. The small caps that make up the RUT don't appear on first glance to have much to do with the big caps that make up the OEX, but it still pays to pay attention to the underpinnings of the market.

For now, the OEX hovers near resistance from several sources. I'm not sure it's through testing that resistance, part of which includes the potential resistance on 7-minute closes now at 654.94, so I wouldn't be surprised to see that tested. The OEX doesn't tend to overrun that for too many 7-minute periods, although it of course does sometimes. So, I'm still saying that there are no signs yet of an imminent turnover, but there are certainly some better-pay-attention signs, and I'd be very protective of my bullish gains here.

Robert Ogilvie : 5/19/2008 10:23:58 AM

June Gold peaked at 914.1, just below its 50 day SMA. The 50 day EMA is at 904.8. The contract is chopping around the 904 - 908 area right now.

Linda Piazza : 5/19/2008 10:22:44 AM

I know that not a lot of you watch 7-minute charts, so I thought I'd just show you one so you can see what I'm seeing on that (potential resistance): Link

Robert Ogilvie : 5/19/2008 10:20:45 AM

It may not that significant yet, but the CBOE $VIX is up 0.41 at 16.88 on a day that the $SPX is also up. If you didn't know, these two indexes tend to trade inversely.

Jeff Bailey : 5/19/2008 10:20:11 AM

10:00 Internals found at this Link

Linda Piazza : 5/19/2008 10:18:52 AM

We're seeing some post-opex repositioning in the VIX this morning. The VIX zoomed up earlier today, reaching a high of 17.34, but then it fell back sharply and is now chopping around the midpoint of today's range. That midpoint is at about 16.90, with a 38.2% retracement at 17.09 and a 61.8% retracement at 16.80. While the VIX just chops around, we don't have much of a help from it in predicting next equity moves. It's 16.86 as I type.

Robert Ogilvie : 5/19/2008 10:18:35 AM

The $NDX is filling in the January 3rd gap (in yellow). Sometimes these gaps need to be filled and can signal an exhausted move to complete the fill of demand at that price. See the chart. Link

Linda Piazza : 5/19/2008 10:15:40 AM

The RUT finally made it into positive territory.

Keene Little : 5/19/2008 10:13:46 AM

The DOW and SPX are both pushing above their 200-dma's so the bulls obviously want to see this morning's rally hold. A brief rally above followed by a close below would do some psychological damage.

Jeff Bailey : 5/19/2008 10:16:50 AM

Dow Transports (TRAN) 5,490 +2.25% ... new all-time high! H/S bottom price objective ~5,600 to ~5,700.

Conservative "head" at 4,145, descending neckline 4,900. Conservative objective 5,600.

Linda Piazza : 5/19/2008 10:13:13 AM

The OEX is testing potential resistance on 15-minute closes at 653.40, currently pushing above it but with time to go in this 15-minute period. On 30-minute closes, it's nearly the same level. Be aware that as the OEX pushes higher, it's now pushing against a rising trendline off Wednesday's and Friday's highs.

I can typically give bulls a benchmark to watch for when the tenor might be remaining the same and when it might be changing, but that's difficult to do this morning. For example, the OEX violated the 15-minute 9-ema on the first 15-minute close, but that violation meant little. The 30-minute 9-ema might be a better one, although that's been serving as a support level that bounces the OEX only since about midday on Friday and it's pretty far beneath the current action now. It's 651.97. Would bulls want to wait until there's a 30-minute close almost three points lower than the current level before they decide that the tenor has changed? That would depend on the type of trade in which they're engaging. Scalpers certainly wouldn't want that.

Linda Piazza : 5/19/2008 10:03:36 AM

The RUT's volatility index, the RVX, shot higher this morning. It's pulling back as I type, having pierced resistance extending from 23.01-23.13 but not able to close that 30-minute period above that resistance. It held, but now we need to see what happens next. The RVX is 22.85 as I type, still not too far below that resistance.

Keene Little : 5/19/2008 10:01:47 AM

SPX is pushing up towards the top of its rising wedge pattern (if that's what's playing out) near 1430 so be careful about another reversal.

Linda Piazza : 5/19/2008 10:01:24 AM

The RUT is behaving strangely today, and it's one of the indices I use as a sort of indicator index. It fell steeply during its first 15-minute period. It's climbing now, but definitely playing a follow-the-leader role rather than a leadership one. It's not even positive yet and is down a point as I type. While Keene is noting the SOX's heads-up for further gains, and I've previously noted the TRAN's strong behavior, the RUT isn't giving a warm fuzzy feeling.

Keene Little : 5/19/2008 9:58:18 AM

After the head-fake break to the downside we've now got a sharp spike to the upside. Whether it will hold or is just part of the post-opex activities is hard to tell. The semis were a good heads up this morning so keep your eye on them.

Jeff Bailey : 5/19/2008 9:57:23 AM

NVIDIA (NVDA) $25.20 +3.23% ... WKLY R1 just ahead at $25.48. WKLY Pivot $23.38.

Linda Piazza : 5/19/2008 9:57:21 AM

The TRAN is currently above resistance that's analogous to the SPX's 1427.86 level, mentioned in my previous post. That's at 5435.60 for the TRAN, and I see the SPX now pushing higher, too. This shows upside momentum remaining strong, but also suggests that the move could be overdone. Remember that the SPX, at least, is just being driven up into its 200-sma, tested for the first time this year, since falling beneath it late last year. If you're in bullish trades and have profits under your belt, it's time to be cinching up stops and/or locking in partial profits, just in case.

For OEX traders, the OEX is nowhere near either its daily 200-sma or the resistance analogous to the SPX's 1427.86-ish level. That would be at 664.07 and 655.07, respectively, for the OEX. It is, however, testing its 200-ema and resistance now near 653.40 on 15-minute closes.

Jeff Bailey : 5/19/2008 9:56:18 AM

Semiconductor HOLDRs (SMH) $33.89 +1.83% ... gets the trade at WKLY R1.

Linda Piazza : 5/19/2008 9:51:37 AM

The OEX closed that first 15-minute period beneath its 15-minute 9-ema, setting up a potential downside target of 649.92-650.20. However, it didn't close far beneath that 15-minute 9-ema, and it's pushing back above it now, so it might have just overrun it a bit. This is perhaps a valid interpretation since the SPX did not violate its congruent 15-minute 9-ema, now at 1423.65 on that last 15-minute period. Also, the A/D line has bounced strongly from that support I mentioned in my 9:44:44 post.

However, both rise into potential resistance that still looks strong, so I'd reserve judgment just yet. The OEX's potential resistance is at 652.83-653.20 on 15-minute closes, and the SPX's is up to 1427.86 on 15-minute closes. Basically, we're still seeing some post-opex-week sorting out going on.

Keene Little : 5/19/2008 9:50:29 AM

Semiconductors (SMH) are up this morning and as long as the semis are bullish I would be careful about being bearish the market. If the semis turn techs around and back into the green the broader market may follow. Upside potential for SMH is the 34.50 area. Link

Linda Piazza : 5/19/2008 9:45:31 AM

The OEX tests potential 15-minute support at 651.25.

Linda Piazza : 5/19/2008 9:44:44 AM

A/D line diving sharply now. It's below support that's been driven down to -400, with the A/D line now at -418. Watch for potential support here, though.

Jeff Bailey : 5/19/2008 9:43:21 AM

Weekly, Monthly, Quarterly Index Pivot Matrix Link

Keene Little : 5/19/2008 9:43:20 AM

This SPX 30-min chart shows the short-term trend lines that I think are important for now. The rising wedge shows upside potential to the 1430 area if the uptrend line from May 9th, currently near 1420, holds a pullback today. Link

Linda Piazza : 5/19/2008 9:39:09 AM

A/D line currently +37, having popped back above that 15-minute 9-ema. There's still lots of time left in this 15-minute period.

Linda Piazza : 5/19/2008 9:37:57 AM

We'll certainly miss Jane's input on the beneath-the-markets action while she's out this week, but I bet everyone will be glad to hear her results with her new crude strategy.

In the meantime, here's what's showing up with the A/D line on the Keltner charts: The A/D line started the day right beneath potentially strong Keltner resistance on 15-minute closes, at about 215, and it's been heading down ever since. There's the possibility that it will find support on 15-minute closes near the 15-minute 9-ema, with that now at about -10, but it's below that right now. Next support is not found until about -225 or even -370. The A/D line is currently -70. So, currently, this is leaning toward the bearish side, but not scarily bearish, either, and still easily neutralized by just a bounce back above the 15-minute 9-ema by the end of this 15-minute period.

Jane Fox : 5/19/2008 9:34:52 AM

I also wanted to show you Gold. Since I am a goldbug and long Gold this move is a nice way to start the week. Link

Jane Fox : 5/19/2008 9:33:08 AM

Crude is pretty flat this morning and I don't have a lot of trades setting up so I just popped in to how the futures traded overnight. They are flat as well. Link

Linda Piazza : 5/19/2008 9:32:36 AM

For SPX traders, the SPX's 15-minute chart shows potential resistance at 1425.50 and then again at 1427.48, near the daily 200-sma.

Linda Piazza : 5/19/2008 9:31:54 AM

The DAX is higher this morning but modestly so. The USDJPY has climbed off its overnight low of 103.61 and is now at 104.05, but is still zigzagging inside the consolidation zone that it formed after dropping steeply early Friday. Ten-year bond yields dropped, perhaps indicating a little flight-to-safety reaction, but they didn't drop far.

We're not getting much help from these indicators in the face of futures chopping around flat-line levels. For now, the OEX ended Friday looking as if it was heading up into 652.60-653.12 potential resistance on 30-minute closes. If it heads up that direction, watch for potential resistance to kick in there. Support is 651.12.

Keene Little : 5/19/2008 9:20:28 AM

Equity futures were basically flat during the overnight session and look to open flat. Monday mornings following opex can sometimes be a little strange as post-opex activities happen so the initial market move may not hold. As mentioned last night, I'm leaning bearish for this week but I don't discount the possibility we'll first see a push higher.

Jane Fox : 5/19/2008 8:54:42 AM

Since I plan on going live with my new Crude day trading strategy this week, I will be taking the week off to focus all my energies on making it successful.

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