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Keene Little : 6/9/2008 10:46:06 PM

Tuesday's pivot tables: Link and Link

After Friday's steep decline I'm waiting for a bounce to correct the decline and I'm looking for something that retraces some Fib portion of the decline in both time and price. While it's possible Monday afternoon's bounce is all we'll get, it's small in time and price retracement so ideally we'll see it work its way a little higher first.

But we're getting to the point where it will be important to see what happens next. For example, if we see a bounce followed by a turn back down to a new low (below Monday's low or wherever the current decline ends) it will be a bearish sign that the decline has lots to go (dark red on the charts below).

If we instead get a sharper rally, especially one that gets over SPX 1393, DOW 12500 and NDX 2033, then the probabilities shift over to the bulls' side for a rally above the May 19th high. In the meantime this market currently belongs to the bears so I'll be looking for shorting opportunities before I start looking for dips to buy. 60-min charts:
SPX: Link
DOW: Link
NDX: Link

I'll continue to keep an eye on the VIX since a close below the upper band of the Bollinger Band (at 22.14 on Monday) will be a buy signal for stocks. The VIX dipped below the top band on Monday but then closed back above it, creating its own doji candle. The BB is starting to widen after the recent volatility and the upper band is now starting to climb rapidly so it could "push up" VIX and keep it bearish for stocks. Link

Jeff Bailey : 6/9/2008 10:19:19 PM

Fed Chairman Bernanke's Speech at this evening's Federal Reserve Bank of Boston's 52nd Annual Economic Conference Link

OI Technical Staff : 6/9/2008 9:59:59 PM

The Market Monitor has been archived.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

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

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

Jeff Bailey : 6/9/2008 5:51:15 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 6/9/2008 5:02:05 PM

Texas Instruments' (TXN) $31.33 +0.28% ... shares were little changed in this evening's extended session after the chip maker narrowed the range of its Q2 earnings guidance to $0.43-$0.47 a share. Topline guidance for the quarter ending June 30 is seen between $3.33 and $3.46 billion.

In April, the company guided earnings per share in the range of $0.42 to $0.48 per share on revenue of between $3.24 billion and $3.5 billion.

Jeff Bailey : 6/9/2008 4:54:08 PM

Closing Internals found at this Link

Jeff Bailey : 6/9/2008 4:42:03 PM

DXY's 04:00 tick was 72.933

Keene Little : 6/9/2008 4:17:42 PM

As mentioned before, if we get a bounce to correct the decline from last Thursday followed by another decline to a new low, it will set off lots of sell signals, shown in dark red on this SPX 60-min chart: Link

I show the more bullish setup if SPX gets above the 78.6% retracement at 1392.61. Any rally back above that level, which would also be a break of the downtrend line from May 19th, would likely have SPX challenging that May 19th high. In the meantime I'll be looking for the 3-wave bounce (dark red), either from here or from a little lower first, to set up the next shorting opportunity.

Jeff Bailey : 6/9/2008 4:04:37 PM

Yen CurrencyShares (FXY) $93.86 -1.24% ... Closes just below QCharts' WKLY S1 $94.06. WKLY Pivot= $94.95.

Jeff Bailey : 6/9/2008 4:03:29 PM

Euro CurrencyShares (FXE) $156.46 -0.89% ... closes just below QCharts' WKLY Pivot of $156.64.

Linda Piazza : 6/9/2008 4:03:21 PM

Here's the daily chart of the TED spread, from Bloomberg's site: Link That doesn't look like increasing risk of defaults, does it? Still, I think there's likely strong support in the 0.70 level from a declining trendline on the daily chart, so we'll have to watch closely as 0.70-0.72 is approached, if it is.

Keene Little : 6/9/2008 4:03:19 PM

SPX's bounce off this afternoon's low has achieved two equal legs up (at 1361.65) and is therefore set up for another leg down tomorrow morning if the decline from last Thursday is not finished yet. If it continues higher right away tomorrow it will indicate that the leg down is finished and at a minimum we should bounce back up into the 38%-62% retracement zone.

Jeff Bailey : 6/9/2008 4:02:00 PM

Swing trade call option alert! ... for one (1) of the Tyson Foods TSN Oct. $15 Calls (TSN-JC) at a LIMIT price of $2.00.

TSN $15.67 -3.15% ...

Jeff Bailey : 6/9/2008 4:00:41 PM

US Dollar Index (DXY) alert! 72.90 +0.70% (30-minute delayed) ... would have been "prarie dog'n" its correlative WKLY/MONTHLY Pivot.

Linda Piazza : 6/9/2008 4:00:39 PM

The TED spread never widened today and in fact, was lower most of the day at 0.81, down 0.055 or 6.425% from Friday. If Lehman prompted a lot of worry about defaults, it wasn't showing up here yet. I'm not going to stop watching, though, because this spread is staying stubbornly above its traditional 0.10-0.50 range.

Linda Piazza : 6/9/2008 3:58:52 PM

I agree, Keene, that the "quite bearish" possibility still exists, too. That's why I've been clearing my accounts of any bull put spreads for July (June's are long gone) as soon as I can, just in case.

Keene Little : 6/9/2008 3:58:51 PM

I should have updated the possible wave counts on the last BIX chart. Banks are bouncing a little into the close and a continuation higher tomorrow could be a bullish signal. Link

Keene Little : 6/9/2008 3:54:16 PM

Yes Linda, I was speculating last night about the possibility for another rally leg before a decline through the summer. Certainly June and July would look like a continuation of the choppy rise off the March low. But the other possibility I'm considering is quite bearish through the rest of this month. Until we get a larger bounce to correct the decline from last Thursday I don't have enough clues yet.

A bounce and then back to new lows (below wherever this decline is going to end) would be the bearish signal. A continuation of the bounce above SPX 1390 would signal the potential for a rally above May's high heading into July.

Linda Piazza : 6/9/2008 3:45:09 PM

Depending on what happens into the end of the day, it looks possible that the OEX will end the day now with a small-bodied candle right above potential support on the daily Keltner chart (and weekly traditional chart, at the 200-sma), at the bottom of a decline. If so, this is a potential reversal signal, with the emphasis on "potential." Bears, make your decisions. Prices could just crater from here, depending on what happens with Bernanke tonight and Fisher tomorrow and the Trade Balance and all sorts of things, but be aware of this potential reversal signal.

James Brown : 6/9/2008 3:43:30 PM

Research in Motion (RIMM) is bouncing from its test of technical support at its 50-dma (today's lows around $127.80). The stock is positive 0.9% at $132.50. I'm really not sure I would trust the bounce without seeing more confirmation since shares have been flirting with a breakdown from their five-month bullish channel.

Linda Piazza : 6/9/2008 3:42:37 PM

Great minds think alike, Keene. (Your 3:36:23 post.) I was wondering the same thing today, and, apparently, so was James. (Our 12:14 and 12:25 posts.) Of course, that means a lot of us are seeing the same thing, and then maybe some weak hands were jumping into long trades and jumping right back out and . . . . Well, the questions are endless, aren't they? However, I, too, was wondering about that possibility of a throw-under pattern today. I'm just not sure how far the BIX will rise back through that wedge.

I've been kicking around for several weeks now the idea that indices would set up some big churning formation for the summer that gradually narrows enough to torture all of us trying to figure out next direction before a big break this fall. I think you might have speculated about something similar, too, or am I having a senior moment?

James Brown : 6/9/2008 3:40:53 PM

The DJUSCA gambling index is down 2.78% and hitting new 52-week lows. Wynn Resorts (WYNN) is leading the way with a 4.4% drop and a new low near $90.00. LVS - 3.3%, MGM -3.0%.

If the DJUSCA were to hit the bottom of its descending channel that would suggest another 11% drop in the sector ... toward the 500 level.

Keene Little : 6/9/2008 3:36:23 PM

In last night's charts I had shown the possibility for another rally leg into July (pink on the charts) before tipping back over. A rally from here (or slightly lower such as SPX 1337) above the May highs would certainly be a strong rally and catch a few bears napping. An interesting thought occurred to me as I look at the price pattern for the banks (BIX). Updated daily chart: Link

With the drop below the bottom of its potential descending wedge pattern I'm wondering if it could be a throw-under finish to the pattern. It's just a thought since there's no evidence the banks are finding a low here but if it were to turn around tomorrow and jump back up inside the pattern (getting back above 201) it could be a buy signal for a rally out of the pattern to the topside (pink). I can't say I like that interpretation since I'm not sure what could prompt that kind of buying in the banks but it's certainly something to watch for.

It would obviously be bearish if price continues to drop lower since the descending wedge pattern would Not be the correct interpretation but instead we'd have something more bearish than that (more impulsive to the downside which would project much lower). This continues to be an index that says follow the money for signals about the broader market.

Jeff Bailey : 6/9/2008 3:34:38 PM

Most Actives ... QQQQ $48.35 -1.38%, LEH $28.50 -11.73%, WM $6.18 -17.925, WB $18.63 -7.45%, AAPL $179.40 -3.36%, MSFT $27.62 +0.47%, INTC $22.73 -0.74%, SPY $135.95 -0.24%, CSCO $26.25 -1.09%, TWTI $11.13 +6.00%

Linda Piazza : 6/9/2008 3:32:11 PM

I've corrected my previous 3:15 post, now the 3:21:01 post since the time stamp changes when we edit a post, to read OEX 608-610 both times the potential level is referenced. Earlier I had said 608-610 in one place and 508-510 in another. Thanks, D.C.

Linda Piazza : 6/9/2008 3:29:58 PM

The USDJPY is rising again to test resistance from 106.20-106.51. The USDJPY is now 106.21.

Jeff Bailey : 6/9/2008 3:29:34 PM

Nymex July Crude Oil (cl08n) settled down $4.19, or -3.02% at $134.35.

Nymex July Unleaded (rb08n) settled down $0.154, or -4.34% at $3.394.

Linda Piazza : 6/9/2008 3:29:03 PM

Jane might sign on later and update traders with the information about what happens tonight and tomorrow, but I thought I'd give a little information just in case. Tonight Japan's Core Machinery Orders will be released at 7:50 pm ET, with that number perhaps capable of moving the markets, although it doesn't tend to be a big mover.

Fed Chairman Ben Bernanke speaks at 8:15 at the Federal Reserve Bank of Boston's Economic Conference, and the title of his speech indicates it could be a biggee. That's "Outstanding Issues in the Analysis of Inflation." I would definitely keep this in mind when making end-of-day decision.

Then, at 2:00 am, there's another number of some importance in Japan. Tomorrow morning, the possible market influences come quickly, with the Bank of England's Governor speaking at 7:00 am ET, Dallas Fed Governor Fisher at 8:00 am, and our Trade Balance at 8:30.

Linda Piazza : 6/9/2008 3:21:49 PM

Oh, I thought I'd also mention that the OEX's weekly 200-sma is now at 612.13, further potential support on weekly closes.

Linda Piazza : 6/9/2008 3:31:01 PM

Bears have had the easier job here today, just deciding when to lower their stops, where to take profits and that sort of thing. Now you've got to start thinking about your end-of-day decisions. The OEX is moving fast enough that we can't even with good conscience do the "if the OEX were to end the day near here" thing because the OEX could be anywhere by the end of the day. However, I can say that the VIX has approached what could be resistance on daily closes while the OEX has approached what should be and often is support on daily closes, at a Keltner line now at 612.57.

So, if you've got big gains on the bearish side and maybe have a bit too much of your portfolio allocated to the bearish side, you might think about whether you want to lighten that risk going into the close. It's always possible that the OEX can break through that support and tumble down toward 608-610 or maybe all the way down to test March lows. That's possible, especially the test of 608-610. However, I've been wondering if we might not get one of those awful summers when the OEX just sets up some kind of broad trading range that eventually narrows before a breakout in the fall. If so, there's the possibility that the bottom of that range could be being established and the OEX could bounce just when everyone else is sure it's going to crater toward March lows.

There are no givens in this, but just be aware of the approaching support and the approaching resistance on the VIX. I have told you for about a week that I thought the OEX was vulnerable to the 613-616 zone, but this is also potential support.

Linda Piazza : 6/9/2008 3:09:16 PM

OEX support slipping to 615.98 on 30-minute closes.

Keene Little : 6/9/2008 3:08:46 PM

My sense is that the market is trying to put in a bottom (but might need another minor new low to do it). If today turns into a doji day, at least for the DOW and SPX as it appears to be right now, it will be either an indecision day or the first candle of a morning star reversal pattern. Of course we saw how well it worked off the signal from last Wednesday and Thursday (as in it didn't). For SPX the 1337 Fib projection continues to be the siren call for now.

Linda Piazza : 6/9/2008 3:04:02 PM

Potential support down to 616.02 on 30-minute closes on the OEX. That support is flattening a bit, actually looking as if it's attempting (well, "it" isn't attempting anything, but you know what I mean) to firm up somewhat. That's not enough to guarantee that the OEX won't slide down further toward 612.40-613 next support, but it's enough that bears should keep updating those profit-protecting plans.

Jeff Bailey : 6/9/2008 2:58:39 PM

Apple's (AAPL) July "Max Pain" Theory tabulation at Friday's close was $160 ... $5 inc.

Jeff Bailey : 6/9/2008 2:57:24 PM

Apple's (AAPL) June "Max Pain" Theory tabulatioin as Friday's close was $170 ... $5 inc.

Linda Piazza : 6/9/2008 2:54:54 PM

The VIX's breakout benchmark on the 15-minute chart is now at 23.10. It was after the OEX closely approached this benchmark on the 12:45 fifteen-minute candle that it took off to the upside again, so if it should be approached again today, both bulls and bears need to be careful. Bears don't want to see the VIX drop below it and sustain values below it; bulls do. The VIX is 23.94 as I type.

Linda Piazza : 6/9/2008 2:53:01 PM

Potential resistance for the OEX on 30-minute closes is now 619.52-620.11. The OEX has not closed 30-minute periods above this resistance since Thursday afternoon, so bulls need to see that done before there's any change in tenor.

Jeff Bailey : 6/9/2008 2:50:32 PM

Apple saying 3G iPhone rollout to start July 11 in 22 countries.

Linda Piazza : 6/9/2008 2:49:45 PM

Potential support for the OEX on 30-minute closes has held for three 30-minute closes now. That's now at 616.17. It still slants lower so is still somewhat weak, perhaps allowing for a slide lower toward 613, but it's holding so far.

Jeff Bailey : 6/9/2008 2:48:30 PM

Apple saying 3G iPhone to cost $199. Available in 70 countries. Rollout over next several months.

James Brown : 6/9/2008 2:47:20 PM

Fertilizer stocks are very mixed. Some look like they are forming tops.

However, Denver-based Intrepid Potash (IPI) is up 5.8% to $56.80 and that's off its highs of $58.49.

Plus, the Santiago-based Chemical & Mining Co. of Chile (SQM) is up almost 8% to a new high around $46.00.

A few of the fertilizer stocks that look like they might be hitting resistance or tops are AGU, MOS, MON, and AG. I'll try and work up some charts on those.

Jeff Bailey : 6/9/2008 2:47:32 PM

Apple saying 3G iPhone GPS feature can track users in real time.

Jeff Bailey : 6/9/2008 2:46:50 PM

Apple saying 3G iPhone offers GPS (Global Positioning System)

Jeff Bailey : 6/9/2008 2:46:20 PM

Apple saying 3G iPhone approaches Wi-Fi speeds.

Jeff Bailey : 6/9/2008 2:45:53 PM

Apple saying 3G iPhone downloads 2.8-times faster than original.

Jeff Bailey : 6/9/2008 2:45:20 PM

Apple saying 3G iPhone offers faster data downloads.

Jeff Bailey : 6/9/2008 2:44:55 PM

Apple intrucing its 3G iPhone ...

Jeff Bailey : 6/9/2008 2:44:09 PM

Apple Computer (AAPL) $183.50 -1.15% ... comes to afternoon high. #4 most active.

James Brown : 6/9/2008 2:41:57 PM

As expected Steve Jobs did unveil its 3G iPhone. AAPL is bouncing from its lows (-6.00 to -3.30 around $182.00)

Linda Piazza : 6/9/2008 2:41:17 PM

Here's a daily Keltner chart of the VIX, showing it hitting that target I mentioned earlier: Link

Linda Piazza : 6/9/2008 2:36:07 PM

That TED spread still is not moving. It's 0.81 as I type.

James Brown : 6/9/2008 2:34:18 PM

A lot of the solar energy names are getting crushed today.

Linda Piazza : 6/9/2008 2:32:33 PM

The A/D line has hit potential support near -1190 to -1250 and it's bouncing. It hasn't gotten far yet, and is only at -1012, but keep an eye on it. There's lots of potential resistance ahead, particularly near -570.

James Brown : 6/9/2008 2:26:04 PM

Ouch! I just glanced at a chart of L-3 Communications (LLL) , which is a defense stock. Shares have been killed this month with a drop from $107 to $96. Yet I haven't found anything specific in the news to account for it. Volume was accelerating into the sell-off and hit 3 times the normal volume on Friday. There is no oversold bounce today. This is a new nine-month low. The $95 region, if you look back to May-June 2007, might offer some support. If you like to play oversold bounces this might be a stock worth keeping on your watch list.

Linda Piazza : 6/9/2008 2:25:18 PM

I fit a Fib bracket on the OEX, anchoring it at Thursday's high and then, on the downside, at the projected 612.30-ish downside target on the daily chart. It fits quite nicely, which might or might not mean anything. One thing it means is that we have to consider vulnerability to that level, which we already knew from the daily Keltner chart and from my warnings for the last week. We also have to consider that such a test, if it should occur, might tend to support the OEX. So, if you're in bearish trades and if you've already accumulated big gains, be thinking now how you want to deal with such a test. Do you want to lock in partial profits soon, for example? Do you want to cinch up your stops so you'd be taken out near the low if there's a big pop? Do you want to widen them because you believe there's more downside and you don't want to get taken out on a pop? Me, I'd be thinking about partial profits soon and then setting stops where I felt comfortable on the rest.

Jeff Bailey : 6/9/2008 2:22:29 PM

VIX.X 24.46 +3.82% ... lurches to its 38.2% QRTRLY pivot retracement.

Jeff Bailey : 6/9/2008 2:21:03 PM

02:00 Internals at this Link

Jeff Bailey : 6/9/2008 2:15:34 PM

Yield curve flattens notably ....

James Brown : 6/9/2008 2:15:04 PM

Trading Idea: Home Depot (HD) - The stock is forming a bear flag pattern and shares are nearing support. A breakdown might be an entry point for new bearish plays. Link

Linda Piazza : 6/9/2008 2:13:20 PM

The OEX has now tested the top of that 613-616 support zone, hitting the top of the target zone that's been set for a while now. So far, it's only accelerating its decline and not stopping it yet. However, I do want to warn that although I've been cautioning bulls that the OEX was vulnerable to this level and now has a daily Keltner target just below 613, support could kick in at any time, so keep updating your profit-protecting plans. It's not inconceivable although not yet probable that we could end the day with the OEX leaving a lower shadow, too, bouncing from some support level.

Keene Little : 6/9/2008 2:12:40 PM

With SPX continuing lower today it raises the possibility we'll see it head down to at least 1337 where the move down from May 19th would have two equal legs down. If that happens it will be decision time for the market. It will either end the pullback and start another rally leg (pink) or continue to head lower as part of the more immediately bearish price pattern (dark red): Link

It's not a given that we'll see SPX make it down to even the 1337 area, especially with the DOW holding up but if the DOW also continues lower (happening now as I type) into the red then the likelihood of a continuation lower increases.

James Brown : 6/9/2008 2:09:15 PM

AAPL currently down 3% to $179.87.

James Brown : 6/9/2008 2:08:16 PM

Steve Jobs will be speaking at the Apple (AAPL) developer's conference VERY soon.

Remember, a LOT of people are expecting a big pop in shares of AAPL on the 3G iPhone announcement but a large number of investors are planning to SELL that pop.

Jeff Bailey : 6/9/2008 2:04:35 PM

The dollar holds gains. Earlier today, U.S. Treasury Secretary Henry Paulson said that government intervention in the market to bolster the dollar's value remains a possibility. "I would never take intervention off the table or any policy tool off the table. I just can't speculate about what we will or won't do," Paulson said in an appearance on CNBC.

Mr. Paulson did comment on oil prices and thought current levels were "a problem" and continue to create a headwind for the U.S. economy, but he said the cause was rising global demand and ever-tightening supplies.

Mr. Paulson thought Saudi Arabia's idea to convene representatives of oil-producing and oil-consuming nations was a good idea, but thought talks should be targeted at finding longer-term solutions to the supply crunch.

Linda Piazza : 6/9/2008 2:04:26 PM

Here's the OEX's 15-minute Keltner chart again, with the last 15-minute close just barely beneath support on this chart but still above 616.30 support on 30-minute closes: Link

James Brown : 6/9/2008 2:04:06 PM

The trend in the Natural Gas index (XNG) is still very positive. Yet if the XNG completes what looks like a failed rally near the 750 level today it will look like a possible bearish double top pattern. The XNG has support near 700, which should also line up with the bottom of its bullish channel. chart: Link

James Brown : 6/9/2008 2:00:45 PM

Strength in the OIX oil index is fading a bit in the last 30 minutes or so...

Linda Piazza : 6/9/2008 1:58:17 PM

The OEX's potential target on the daily chart has now slipped to 612.68, but it's not testing light potential support on daily closes at about 616.50. Bears need to start keeping their stops updated frequently, just in case.

Linda Piazza : 6/9/2008 1:56:09 PM

The USDJPY is now 106.09, still not falling out of this morning's consolidation band just beneath 106.20-106.50 resistance yet.

James Brown : 6/9/2008 1:55:40 PM

The weakness in LEH is weighing on the rest of the broker-dealers.

Merrill Lynch (MER) is nearing its four-year low from March 2008 at $37.25. MER is currently down 3.6% to $37.60.

Linda Piazza : 6/9/2008 1:54:54 PM

The VIX has now punched above Friday's high, erasing that potential bullish divergence that had existed. It has a potential upside target and also potential resistance at 24.35. The VIX sometimes overruns both resistance and support on the daily chart, though, so use that as a guideline of another zone at which to look for a turnaround rather than at the exact number.

Linda Piazza : 6/9/2008 1:52:58 PM

Potential support now on 15-minute closes at 617.20 for the OEX. I'm not seeing any bullish price/RSI divergences yet on the 15-mintue chart, though.

Jeff Bailey : 6/9/2008 1:51:01 PM

30-year Yield ($TYX.X) ... edges back. Down 1.1 bp at 4.639%. Has slipped back under its WKLY Pivot of 4.659% (46.59).

Keene Little : 6/9/2008 1:46:13 PM

NDX has now made it down to its 200-dma (1962.60). It can certainly undercut it again, as it did the two previous times in May, but this is a potential support area until proven otherwise.

Linda Piazza : 6/9/2008 1:33:40 PM

I wanted to show you the OEX's 15-minute Keltner chart, to show you why I was warning that support might kick in any moment. It's still not a given that it will hold or that the OEX just won't slide down along it, of course: Link

Linda Piazza : 6/9/2008 1:32:14 PM

VIX 23.63.

Linda Piazza : 6/9/2008 1:31:51 PM

The USDJPY isn't really pulling back far, still. It's mostly chopping around right under the 106.20-106.50 level, occasionally piercing it. It's 106.15 as I type. This isn't really supporting the idea of further steep pullbacks in the equities yet, but we'll have to see if it follows them lower. I've been saying all day there's the potential for a pullback to 105.50-105.60 although one support level has now risen to 105.72, and for the USDJPY to then spend up to a day chopping around there until we know what happens next with it. However, it's not pulling back that far yet. My outlook on the OEX was that it might pull back into the 613-616 zone and chop around above that for a day or two before we knew next direction, too, so I'm watching these two closely. If the USDJPY doesn't fall back further than 105.50 and especially if it never falls back that far, that may be somewhat supportive of equities. Maybe not enough to keep them from declining but maybe enough to keep them from falling too far. So keep the USDJPY on your radar screen, too.

Jeff Bailey : 6/9/2008 1:31:31 PM

General Motors (GM) $16.65 +2.65% ...

Jeff Bailey : 6/9/2008 1:31:09 PM

General Electric (GE) $30.07 +0.16% ...

Jeff Bailey : 6/9/2008 1:30:48 PM

Bank of America (BAC) $30.00 -1.63% ...

Jeff Bailey : 6/9/2008 1:30:27 PM

American Intl. Group (AIG) $33.49 -1.29% ...

Jeff Bailey : 6/9/2008 1:30:06 PM

JP Morgan (JPM) $38.87 -3.04% ...

Jeff Bailey : 6/9/2008 1:29:43 PM

American Express (AXP) $44.00 -1.46% ...

Jeff Bailey : 6/9/2008 1:29:05 PM

Citigroup (C) $19.70 -1.79% ...

Jeff Bailey : 6/9/2008 1:28:37 PM

Lehman Bros. (LEH) $28.20 -12.66% ... undercuts its WKLY S1 ($28.46)

Jeff Bailey : 6/9/2008 1:27:27 PM

NASDAQ-100 Index (NDX.X) 1,961.78 -1.43% ...

Linda Piazza : 6/9/2008 1:26:16 PM

Bears now do not want a steep drop in the VIX as it's testing Friday's high now, with that high at 23.72 and the VIX at 23.70 as I type. Bulls do not want a sustained breakout and charge up to 24.34, potential resistance on a daily close.

Jeff Bailey : 6/9/2008 1:25:33 PM

QQQQ $48.26 -1.57% ... gets the trade at WKLY S1.

Linda Piazza : 6/9/2008 1:25:06 PM

The VIX has not yet climbed higher than Friday's high, so there's a slight potential for bullish divergence here with the VIX not hitting a higher high while prices hit lower lows. That's slight, though, because the VIX is still climbing as I type and the next resistance on a daily close is about 24.34.

Keene Little : 6/9/2008 1:25:02 PM

The DOW is now the lonely index in the green. The pattern for the downside now calls out for a little more stair-stepping lower so picking a bottom could be dangerous. But if we see only minor new lows we could get a sharp reversal higher as part of a larger 3-wave correction off Friday's low (a minor new low today could be part of that instead of something more bearish). It's a tough call here but watch for bullish divergences at new lows for at least a warning if you're short and hoping for a lot more downside.

Jeff Bailey : 6/9/2008 1:23:49 PM

Semiconductor HOLDRs (SMH) $31.51 -1.86% ... gets the trade at WKLY S1.

Jeff Bailey : 6/9/2008 1:21:39 PM

BIX.X 200.30 -3.13% ... gets the trade at WKLY S1.

Linda Piazza : 6/9/2008 1:20:28 PM

Watch for bounce potential to kick in any time now as the OEX is hitting potential support on 15-minute closes, with that extending down to 618.50 now. That support is not a given, but do not assume that this slightly lower low (than Friday's) guarantees that everything is just going to cascade lower. It could happen, but in fact, support is being tested and further potential support exists from 616.74-617.71 on 30-minute closes, too. While I've been saying for about a week now that the OEX could head down into the 613-616 level and I in fact believed it would eventually do so, the possibility of support kicking in any time now exists, too.

Jeff Bailey : 6/9/2008 1:19:25 PM

Yen CurrencyShares (FXY) $93.83 -1.27% ...

Jeff Bailey : 6/9/2008 1:18:25 PM

iShares Japan (EWJ) $13.34 (unch) ... probes Friday's late-session low.

Jeff Bailey : 6/9/2008 1:17:17 PM

Washington Mutual (WM) $6.72 -10.75% were sharply lower at the mid-point of today's trade. Earlier this morning UBS forecasted the bank will take total losses through 2011 of $27 billion, with $21.7 billion of the toal coming from mortgage losses. UBS said it was basing its forecast on what it calls an extensive credit analysis of the bank's balance sheet. UBS noted that Washington Mutual's capital is sufficient and will not need to raise more capital as long as the economic downturn doesn't broaden.

Keene Little : 6/9/2008 1:15:47 PM

The little sideways consolidations for the DOW and SPX have not held and that raises the question as to whether or not the daily lows will hold.

Jeff Bailey : 6/9/2008 1:13:00 PM

Krispy Kreme Doughnuts (KKD) $3.91 +14.32% are atop the list of percentage gainers at the big board after the company reported Q1 net income of $4 million, or $0.06 a share on revenue of $103.6 million. The company said sales continued to weaken in the latest quarter.

Jeff Bailey : 6/9/2008 1:08:57 PM

Dow component Honeywell Intl. (HON) $54.89 +1.62% said today that it has agreed to sell its consumables solutions business to B/E Aerospace (BEAV) $29.65 +9.89% for $1.05 billion.

Linda Piazza : 6/9/2008 1:08:25 PM

Potential support on 15-minute closes for the SPX extends down to about 1363.80. Next potential support is 1357.01.

Linda Piazza : 6/9/2008 1:07:25 PM

Potential support for the OEX on 15-minute closes extends down to about 620.20. Next support, 617.61.

Jeff Bailey : 6/9/2008 1:02:37 PM

VIX.X 22.91 -2.75% ...

Jeff Bailey : 6/9/2008 1:02:14 PM

Swing trade put exit alert! ... for the one (1) ProShares Ultra Short Russell 2000 TWM July $121 Call (QSO-GQ) at the bid of $4.80.

TWM $69.28 +0.15% ...

Jeff Bailey : 6/9/2008 12:53:59 PM

Apache Corp. (APA) $141.87 +5.95% ... recoups Friday's losses and then some after the company said it will take at least two (2) weeks to restore partial natural gas supplies after a fire and explosion at its gas processing plant off the coast of Western Australia.

Keene Little : 6/9/2008 12:53:09 PM

The sideways consolidation in the DOW and SPX, following the brief bounce up this morning, looks bullish for another leg up. But it could use another small pullback (holding above the lows near 10:50 AM) before pressing higher again. They'll also need the techs to at least make a half-hearted attempt at a bounce.

Keene Little : 6/9/2008 12:48:25 PM

BIDU is getting spanked today, currently down -3.9%. I continue to like a downside target for BIDU at 290 where some common Fib retracements line up. If that doesn't hold (assuming of course it gets there) then much lower levels are probably in store for the stock. But if it does hold then there is a why to interpret the price pattern bullishly that calls for another strong rally leg after that. Link

Jeff Bailey : 6/9/2008 12:44:42 PM

IWM and QQQQ daily interval bar chart Link

Linda Piazza : 6/9/2008 12:41:20 PM

The A/D line is back to test support again, with that support strongest down to about -300 but extending down to -500. The A/D line is now -195. There's just no "it's going to do this or that" scenario to be found from looking at these types of measurements today. Anything remains possible including consolidation in a doji-type candle.

Jeff Bailey : 6/9/2008 12:39:20 PM

SPX.X 1,366.28 +0.40% Link

Jeff Bailey : 6/9/2008 12:36:28 PM

Financial Select SPDRs (XLF) $23.26 -0.30% ...

Jeff Bailey : 6/9/2008 12:35:57 PM

Citigroup (C) alert! $20.00 -0.29% ... see last Monday's Market Wrap.

Keene Little : 6/9/2008 12:34:50 PM

The top of that up-channel for USO and the EW count showing the completion of the 5th wave at a Fib projection looked like a nice short play setup on Friday. Only time will tell if it works.

** Correction to the stop level though that I mentioned in my previous post (12:16 PM). The stop should be just above 112.70 not 110.70 as I had mis-typed.

Linda Piazza : 6/9/2008 12:30:41 PM

Once again, I was particularly interested in what the TED spread was doing today, given the news in the financials. As you may remember from last week's commentary in the Market Monitor as well as my Trader's Corner article on Saturday, this measures risk of default. My quote is delayed, but it's not expanding today so far, given that delayed quote. It's currently 0.82, down 5.240 percent, although it's had a high of 0.86.

James Brown : 6/9/2008 12:30:19 PM

I think Keene may have a winner with his bearish USO play. Here's a chart of the USO with some trend lines. It has failed right at the upper trendline. chart: Link

Jeff Bailey : 6/9/2008 12:30:12 PM

Shares of the nation's largest home builder DR Horton (DHI) $11.59 -0.42% ... hover near their lows of the session after Moody's Investor Service cut its rating on the company's debt one notch further into junk territory amid concern about quarterly losses that could continue into next year.

Last month the builder reported a fiscal Q2 net loss of $1.31 billion, which included $834.1 million in pretax charges from inventory impairments and land options the builder walked away from.

In December, Moody's cut the company's debt rating to "junk" status saying that "even though Horton will continue to outperform many of its peers that have already been downgraded, our expectations about its fiscal 2008 and 2009 performance do not conform to that of an investment grade company."

Jane Fox : 6/9/2008 12:26:46 PM

The SPX made a lower low so the trend has changed to down although we need a lower high to confirm it. Link

James Brown : 6/9/2008 12:25:28 PM

Linda, I think you may be right on in your BIX post at 12:14 today!

James Brown : 6/9/2008 12:19:39 PM

For comparison, here's a daily chart of PFE: Link

Jeff Bailey : 6/9/2008 12:19:36 PM

Sector Losers ... Regional Banks -1.97%, Healthcare Services -1.38%, HMOs -1.32%, Disk Drives -1.38%, Semiconductors -1.27%, Biotechnology -1.20%, Airlines -1.19% and Treasuries

Linda Piazza : 6/9/2008 12:19:34 PM

The VIX is still maintaining 15-minute close above its breakout benchmark, now at 22.74, with the VIX now at 23.01. The VXO, however, is not doing such a good job. For the VXO, that benchmark is currently about 24.00. The VXO is now 24.04, but it has an upper shadow and the last three 15-minute closes were below that benchmark. To review for newbies: anything that signals increasing weakness in the VIX is conversely likely to be supportive of equity prices. That's not a given and not always a good market-timing tool, but you generally want the VIX going down when you're in bullish trades. That's unless they're bullish calendars or something when expanding volatility helps your trade, but that's another story.

Jeff Bailey : 6/9/2008 12:17:45 PM

Sector Winners ... Oil Service +3.23%, AMEX Nat. Gas +2.98%, CBOE Oil +2.95%, Utilities +1.06%, Dow Transports +1.03%

James Brown : 6/9/2008 12:17:06 PM

I keep thinking that Pfizer (PFE) might bounce and last week's high-volume sell-off might suggest a short-term bottom (soon). Yet if you look at a long-term chart on PFE it seems like the stock may have farther to fall. chart: Link

Keene Little : 6/9/2008 12:16:29 PM

Friday afternoon I had recommended a short play on USO as it was approaching 112.50 (the high was 112.70). It's not down much today (110.35 currently) but it's a drop. If the high is in, as I think it is, it can't tolerate another push higher. Therefore stops should now be just above 110.70.

Jeff Bailey : 6/9/2008 12:15:30 PM

12:00 Internals found at this Link

Linda Piazza : 6/9/2008 12:14:38 PM

If one draws a descending trendline below the BIX's 1/22 and 3/17 lows, the BIX is currently dropping slightly below that trendline, crossing now at about 204 with the BIX at 202.61 as I type. Although that trendline has only two prior touchpoints, each was validated by an RSI dip below 30. RSI is again dipping below 30 as the trendline is slightly violated, so it's signaling an overdone move, although that's not a guarantee that it will reverse. Some of the strongest trending moves occur while RSI is overdone either to the downside or upside. We're at a make-it-or-break-it point for this index. Bears should keep in mind that the formation in which the BIX has been descending since the first of this year is beginning to take on a bit of a bullish descending wedge look, with both trendlines either descending or ascending in a wedge, unlike in a triangle. Therefore, it's possible that what we're seeing is just a trap, a minor violation that will soon be reversed. If the BIX drops too steeply or maintains values below 204 or so through several daily closes, then it's not as likely to be a trap.

Keene Little : 6/9/2008 12:10:35 PM

The oil stocks index (OIX) is nearing an important level as it bounces up to an intersection of trend lines. The broken uptrend line from March crosses the broken uptrend line from August 2007 near 990 (currently trading 983) and is so far only a 3-wave bounce off its June 4th low. This is also the level of a 62% retracement of the decline from the May 21st high. It looks like a good setup to try the short side if it gets up to 990 and stalls. Link

James Brown : 6/9/2008 12:09:52 PM

The bullish breakout in the Biotech index (BTK) a couple of weeks ago is failing. The sector has produced what appears to be a bearish double-top pattern. chart: Link

Linda Piazza : 6/9/2008 12:00:22 PM

The USDJPY is now 106.05 and it is indeed pulling back from 106.20-106.45 resistance. It hasn't pulled back far yet, but there's potential for it to drop back toward 105.50-105.60 or maybe 105.70. So far, it's just potential and not probability.

Linda Piazza : 6/9/2008 12:00:38 PM

The breakout benchmark for the VIX is now 22.71. Bulls want to see the VIX below that and maintaining 15-minute closes below it. The VIX is 22.93 as I type.

Linda Piazza : 6/9/2008 11:57:48 AM

The OEX hasn't yet been able to maintain 30-minute closes above its 30-minute 9-ema and neither has the SPX. Currently, they don't look as if they will this 30-minute period, either, unless they jump in these last few minutes of the period, a possibility but not a probability. The 30-minute 9-ema's for the OEX and SPX are 622.41 and 1368.31, respectively.

James Brown : 6/9/2008 11:54:56 AM

Dow-component McDonald's (MCD) is contributing a lot to the DJIA's rally. The stock is up almost 4% to $59.21 after reporting May same-store sales growth of 7.7%, which is much higher than expected.

James Brown : 6/9/2008 11:51:00 AM

OI call play and coal producer Peabody Energy (BTU) is soaring. The stock is up 5.4% and breaking out past resistance to a new high at $82.00. Our first target was the $79.75 level and our second target is the $84.00 level.

James Brown : 6/9/2008 11:49:14 AM

Apple Inc (AAPL) is trading lower ahead of its developers conference. It is widely expected that Steve Jobs will announce the 3G iPhone today. Jobs speaks around 1:00 p.m. Eastern time.

AAPL is bouncing from its intraday lows of $180.00.

Keene Little : 6/9/2008 11:45:28 AM

SPX 1370 remains resistance as it tries to push higher again. We'll either get a little bit of short covering above it or the bears will press it to new lows from here.

Linda Piazza : 6/9/2008 11:41:16 AM

Reminder: New York Fed President Timothy Geithner will be speaking at 12:15 pm ET. See my 9:51:49 post for more information. He is a voting FOMC member. This could be market moving, so be aware that we could get bullet points as soon as his speech is released.

Jeff Bailey : 6/9/2008 11:34:59 AM

At 10:00 AM EST April pending home sales were released and showed a stronger-than-forecasted reading. Economists were looking for a month-over-month decline of 1.0%, but the National Assoc. of Realtors (NAR) reported that the actual number of contracts signed in April increased 6.3% to 88.2 from an unrevised 83.0 in March. Still, April's 88.2 reading was 13.1% lower than a year ago.

The NAR's chief economists Lawrence Yun said, "Bargain hunters have entered the market en masse, especially in areas that have seen double-digit price declines."

FTN Financial's chief economist said "We are seeing an acceleration in foreclosures. As foreclosures have taken off, they put pressure on prices. Banks have become more aggressive with sales on homes they have foreclosed." Mr. Low added that he thinks sales will stabilize in the next few months and that will set the stage for an inventory turn sometime next year. "For now, prices will continue to fall. There is still an inventory overhang that will take 18 month to work through. The end game of the housing bust is near."

Keene Little : 6/9/2008 11:23:47 AM

Banks (BIX) are also a drag on today's makret, down about -1.3%. This index is now approaching the bottom of a potential descending wedge pattern that's near 200. Whether it provides support for at least a bounce remains to be seen. Daily chart: Link

Linda Piazza : 6/9/2008 11:23:03 AM

OEX bulls want to see the OEX break above the 30-minute 9-ema now at 622.54 and maintain 30-minute closes above that. SPX bulls want the SPX to maintain 30-minute closes above its 9-ema now at 1368.53. Gains are going to remain tentative even then, but you at least have a little evidence of a tenor change if those levels are maintained on 30-minute closes. Until then, you just don't.

Linda Piazza : 6/9/2008 11:21:06 AM

So far, the VIX is finding support on 15-minute closes at the flattening 15-minute 9-ema. That's not what bulls prefer to see. They want the VIX to drop and then maintain 15-minute closes beneath the breakout benchmark, now at 22.66. The VIX is 23.05 as I type.

Keene Little : 6/9/2008 11:18:17 AM

Bonds (10 and 30-year) have essentially reversed Friday's big rally by dropping back down this morning. Selling in the bonds could free up some money that will later rotate into stocks (if not today then maybe tomorrow).

Jeff Bailey : 6/9/2008 11:17:25 AM

TRINQ 1.60

Jeff Bailey : 6/9/2008 11:17:10 AM

NASDAQ a/d 1,008/1,637

Jeff Bailey : 6/9/2008 11:16:41 AM

NASDAQ Composite (COMPX) 2,457.47 -0.69% ...

Jeff Bailey : 6/9/2008 11:16:11 AM

NYSE Composite (NYA.X) 9,189.58 +0.40% ...

Jeff Bailey : 6/9/2008 11:15:24 AM

I watch the a/d line in combination with TRIN and its DAILY, WEEKLY and MONTHLY Pivots. TRIN gives the added observation of how great the buying, or selling pressure is. The pivot levels then give the added observation of how great the buying/selling pressure is relative to last month, week, or prior day.

Jeff Bailey : 6/9/2008 11:12:33 AM

NYSE a/d 1,447:1467

TRIN 1.02

Keene Little : 6/9/2008 11:12:28 AM

NDX is now close to its 200-dma at 1962.60 (low for the day so far is 1966.91). With slight under-throws this MA supported the two previous pullbacks in early and later May. The difficulty for the bulls here is the double top between the May and June highs with negative divergence. A break below the May 23rd low near 1944 would be a confirmed break of the 200-dma and confirmation of the double-top reversal.

Jane Fox : 6/9/2008 11:09:16 AM

Both Linda and I watch the AD line. I watch the absoluete number and Linda watches it in relation to the Keltner Channels. Like Linda said both are valid.

Keene Little : 6/9/2008 11:08:42 AM

The negative influence of the techs, and to a lesser degree the small caps, is going to be a drag on the blue chips today.

Jeff Bailey : 6/9/2008 11:10:51 AM

TWM's WEEKLY Pivot Levels ... $62.80, $65.99, Piv= $68.58, $71.77, $74.36.

MONTHLY ... $62.25, $64.93, Piv= $70.21, $72.89, $78.17.

Keene Little : 6/9/2008 11:05:51 AM

If the leg down from Thursday is finished, even for the more bearish case, we should see a typical retracement of 38%-62% of the decline. For SPX that gives us an upside target zone of 1377-1387. The 50% retracement at 1382 would be the most typical.

But if there are strong bearish influences on the market right now then the lower Fib number may be all we'll get. And if the leg down from Thursday is not finished yet we'll see a move lower from here before getting a larger bounce. The SPX 60-min chart shows the trend lines and Fibs I'm watching for now: Link

Jeff Bailey : 6/9/2008 11:01:49 AM

Let's set an alert just above today's high for our TWM.

Linda Piazza : 6/9/2008 11:02:17 AM

I hadn't read Jane's posts about the A/D line before I posted because I was studying the A/D line at the same time! It looks as if we're stepping on each others' toes here, but Jane and I are just both convinced of the importance of watching it.

Jeff Bailey : 6/9/2008 11:01:13 AM

BIX.X 204.06 -1.31% ... gets the trade at QRTRLY S1.

Linda Piazza : 6/9/2008 11:00:11 AM

The A/D line is just chopping around within the first 30-minute range. It's back to test potential support now at -50 on 15-minute closes and then at -275 to -350 on 15-minute closes. It's at -40 as I type.

Jeff Bailey : 6/9/2008 10:56:30 AM

Weekly, Monthly, Quarterly Index Pivot Matrix at this Link

Jane Fox : 6/9/2008 10:53:13 AM

Sorry reading the wrong number AD line high of 528.

Jane Fox : 6/9/2008 10:52:48 AM

AD line has fallen to 0 from a high of 1798. Wow.

Keene Little : 6/9/2008 10:51:35 AM

After the bounce off Friday's low any turn back down to a new low will mean the leg down from Thursday's high is not finished yet (this morning's bounce so far is too small to correct that leg down). If the current pullback from this morning's high leads to another push higher then it will begin to look more like a correction of the leg down on Friday.

Assuming we'll get a larger 3-wave bounce off Friday's low it would be the first opportunity to test the short side for a continuation of the decline. While there certainly remains the possibility we'll see a complete reversal of Friday's decline, we're in short-the-rallies mode until proven otherwise.

Jane Fox : 6/9/2008 10:51:19 AM

Ok I am done trading so I wanted to post this chart of Crude. Notice how the MACD did not make a new high on Friday. Now this is not uncommon when you get large range days like we had last Thursday and Friday but it is certainly something you want to keep your eye on. I am NOT advocating trying to short this market but the MACD may be telling us a short term top is in.

Although trading this market intraday the most power is most definitely to the upside. Link

Linda Piazza : 6/9/2008 10:44:18 AM

Bulls need to see that VIX maintaining 15-minute closes below 22.59 before they even halfway begin to have some comfort. It's at 22.96 as I type.

Keene Little : 6/9/2008 10:38:41 AM

I'm back. I see SPX has bounced up to its downtrend line from October and is pulling back a little (but so far looks like a small correction and will head higher). Resistance by this downtrend line happens to be at the same 1370 level as the June 3rd low so that defines an important level for now.

Linda Piazza : 6/9/2008 10:35:58 AM

So far, so good for bulls, but we're not "far" yet. The 30-minute 9-ema, now at 623.14, has held as resistance, but when the OEX was knocked back, support on 30-minute closes that's now at 621.77 held. So did the 15-minute 9-ema hold as support on 15-minute closes, although tentatively. That's now at about 622.11. It's natural to see the OEX knocked back from resistance that held all day Friday, but it's good, as far as it goes, that the pullback has not been strong yet. I keep emphasizing that this is tentative only so far and that all traders, bullish or bearish, should maintain sound account- and trade-management practices.

Jeff Bailey : 6/9/2008 10:25:32 AM

Most Actives ... LEH $29.90 -7.40%, QQQQ $48.83 -0.40%, AAPL $183.90 -0.90%, SPY $137.33 +0.78%, CSCO $26.37 -0.64%, TWTI $11.13 +6.00%, DELL $23.75 +0.04%, XLF $23.56 +0.98%, ETFC $3.89 -2.26%, AMAT $19.01 +0.63%

Jeff Bailey : 6/9/2008 10:22:21 AM

10:00 Internals found at this Link

Linda Piazza : 6/9/2008 10:20:17 AM

The OEX's 30-minute 9-ema is up ahead now at 623.50, potential resistance on 30-minute closes. For the SPX, that's at 1370.62. Bulls want sideways consolidation or an actual punch above these levels; bears want a steep rollover.

Linda Piazza : 6/9/2008 10:18:27 AM

Slight new high of the day on the A/D line. Possibility of a reach toward next resistance on 15-minute closes at 1210 although that's not a given.

Linda Piazza : 6/9/2008 10:16:46 AM

Let's do an assessment: VIX is trending lower, but showing a discouraging (to bulls) propensity to bounce strongly from support. The TRIN is 1.07, a little to the bearish side, but finding resistance on 15-minute closes at 1.12-1.29, so that knocks it back into the neutral realm in my eyes. The USDJPY is 106.20, challenging what may be strong resistance. So, since we don't know the outcome of this test and since it's more than possible that the USDJPY will pull back toward 105.50-105.60 sometime over the next day or so, although not a given, this is short-term bullish, but beyond the very short term, not-so-sure-ish. The A/D line is in the bullish half of its 15-minute Keltner channel and finding support there at -300 on 15-minute closes, but is so far not hitting a new high of the day after testing that support, so that's neutral to slightly bullish.

Basically, we have what we'd expect. Some tentative signs of improvement, but signs that are "tentative" at best, far from confirmed, as market participants still show some hesitancy. The possibility of further steadying and even gains remains but so does the possibility of further pullbacks to support. Right now, I'd weigh it all to the neutral to slightly bullish category.

Linda Piazza : 6/9/2008 10:11:50 AM

The VIX dropped to 22.59 and promptly bounced from that level, not even yet hitting the breakout benchmark now at 22.44. Bulls need to see the VIX maintaining 15-minute closes beneath that benchmark before they feel cozy today.

Linda Piazza : 6/9/2008 9:59:30 AM

I think the VIX has to get below 22.40 and maintain 15-minute closes below it before bulls can believe in even short-term strength. It's at 23.19 as I type, with the 15-minute 9-ema at 22.89. That 9-ema provided support on 15-minute closes all day Friday, so 15-minute closes beneath it would be a first sign that the tenor could be changing, but it takes closes beneath that 22.40 level to really begin to change the tenor. Until then, anticipate a possible small VIX bounce from that level, if it should be hit.

Linda Piazza : 6/9/2008 9:56:30 AM

Not much of a drop in the USDJPY yet, but I wouldn't be surprised if we didn't see it drop back to the 105.50-105.60 zone sometime over the next day or two and spend another day or so there until we know next direction. If it instead broke above 106.25 and then confirmed the breakout by maintaining 15-minute closes above 106.42, that would be short-term bullish for equities and maybe, depending on what happened next, supportive for more than the short-term period.

Linda Piazza : 6/9/2008 9:53:36 AM

And, if that wasn't enough, ECB President Jean-Claude Trichet will speak in Paris at 12:30 pm ET this afternoon. What he has to say can certainly impact currency markets and, therefore, our market behavior. President Trichet is credited with creating some of last week's upheaval when his press conference after last week's ECB session was much more hawkish than some had hoped.

Linda Piazza : 6/9/2008 9:51:49 AM

Also, be aware that New York Fed President Timothy Geithner, a voting FOMC member, will speak at 12:15 pm ET at the Economic Club of New York. There will probably be a Q&A session, so there are opportunities for market-moving developments from his speech, too.

Linda Piazza : 6/9/2008 9:50:24 AM

Traders, please remember that we have pending home sales at 10:00 am ET. That number might have some impact on trading.

Linda Piazza : 6/9/2008 9:49:09 AM

The A/D line has rolled over into that support zone I mentioned earlier. That support now extends down to about -340 on 15-minute closes with the A/D line currently at -297. Bears should remain watchful for the possibility that the A/D line might attempt to steady soon. It's not a given but is a definite possibility.

Linda Piazza : 6/9/2008 9:47:45 AM

TRIN is currently 1.10, rising into resistance at 1.13-1.30. Bears of course want it to break through that resistance; bulls, to roll over soon.

Linda Piazza : 6/9/2008 9:47:06 AM

The USDJPY is now 106.10. It's zooming higher, but zooming into potential resistance from 106.25-106.50. So far, though, it's showing strength this morning, and that's usually supportive of equities. That inter-market relationship may change in the future, but for the last few years, it's been good to watch. I'm kind of anticipating the possibility that it could pull back from that resistance zone, though, at least a little.

Linda Piazza : 6/9/2008 9:44:21 AM

The SPX has potential support on 15-minute closes at 1358.81. It has potential resistance on 15-minute closes at 1367.70 and then again, stronger, at 1372.96. All these Keltner levels are still descending, so values may still be moving lower. That also, means, of course, that support may still be somewhat weak.

Linda Piazza : 6/9/2008 9:41:41 AM

Potential support for the OEX on 15-minute closes at 618.68. Potential first resistance, although it's not as reliable as that on the 30-minute chart, is at 622.23 on 15-minute closes.

Linda Piazza : 6/9/2008 9:40:35 AM

Keltner outlook on the A/D line: The A/D line opens in the middle of the upper or bullish half of its Keltner channels on the 15-minute chart, but it's not close to either support or resistance. In such circumstances, we can as easily see it fall toward support, now at -27 to -320, as climb toward resistance, now near +1100. If the A/D line should fall toward support on 15-minute closes, begin watching for bounce potential there and on the indices, too. If it should climb toward resistance, begin looking for rollover potential there and on the indices, too. It's at +589 as I type, hanging in near its opening value, not giving us much direction yet.

Linda Piazza : 6/9/2008 9:29:52 AM

Futures are higher this morning, and they're so far backed up by a rebounding USDJPY, too. Here's where the USDJPY is, though, so we can't count on it continuing to rebound. Link Keep an eye on this.

The OEX finished the week last week juuust below its weekly 200-ema, at 621.19 and above its weekly 200-sma, at 611.65. It also ended the week juust below a descending trendline that has bounced the OEX since early May.

Could it have just overrun that support? It's possible. I also found it interesting that the OEX's performance was almost exactly that on February 5, with the range nearly the same and the daily lows within a few cents of each other. After that February 5 day, the OEX finally steadied for three days at about 610 before climbing and spending a couple of weeks chopping around before finally declining into its March low. The point, though, is that it didn't drop much further immediately after February 5 and then, after three or four days testing support a little lower, spent weeks chopping around at higher levels before declining again.

So, it's possible that the OEX could steady here or perhaps below in the 613-616 region. On the 15-minute chart, it ended Friday right on potential support on 15-minute closes at 618.77. On the 30-minute chart, it still had a potential downside target of 617.26, so a slide lower is not yet precluded. Those who want to avoid that slide want to see the OEX close 30-minute periods above resistance now at about 621.71 and then above the 30-minute 9-ema, now at 623.17, but still turning lower and converging with the lower resistance. So, if the OEX should climb in accordance with futures action, look for first resistance (15- and 30-minute closes) near 621.70-622. Be aware of the possibility of that slide lower toward 617, at least, and maybe 613-616.

Keene Little : 6/9/2008 9:18:15 AM

Equity futures are at their highs of the overnight session after pulling back in the early morning hours while commodities and currencies look like they're doing a little bit of a reversal of Friday's price action as well. We'll just have to wait and see if the reversal this morning of Friday's move turns out to be just a correction or something more. I will be away from my desk for the first hour so I'll be back about 7:30 AM.

Jane Fox : 6/9/2008 9:00:26 AM

NEW YORK (MarketWatch) -- Crude-oil futures traded down more than 1% early Monday, pulling back after the benchmark contract's unprecedented surge of nearly $11 a barrel in the previous session.

Crude for July delivery dropped $1.88 to stand at $136.66 a barrel in electronic trading.

Oil "could retrace further over the course of the day, but until we see an intraday reversal that could be a sign of the buying exhausting itself, declines should be treated skeptically, as last week's experience showed," said Edward Meir, analyst at MF Global, in a research note.

On Friday, oil prices scored their biggest one-day gain in dollar terms, as worries about a potential Israeli air attack on nuclear installations in Iran combined with a slide in the U.S. dollar to send the contract to an intraday record at $139.12 a barrel.

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