Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Keene Little : 6/16/2008 10:20:39 PM

Tuesday's pivot tables: Link and Link

SPX banged its head against resistance at its October downtrend line, and 100-dma, on Monday and just couldn't get enough buying going to do any better. The daily chart shows that trend line and then the shorter-term downtrend line from May 17th up near the 50-dma at 1383. We'll have to let price tell us which direction next. Link

The 10-min chart shows how I think it could play out if the rising wedge pattern is correct. It would look better with a little more work to the upside to a Fib projection at 1372 (two equal legs up from Thursday to complete an A-B-C bounce). It could collapse immediately from here so the earnings report from Goldman Sachs could be pivotal. As shown in green, if a pleasant surprise greets the market in the morning and SPX quickly rallies above 1372 then long will be the place to be. Link

The update to the NDX 60-min chart shows it stalled at the 50% retracement of the decline from June 5th. Slightly higher is the projection at 1994 for two equal legs up from Thursday and then higher potential to 2026. A decline below the top of wave-a near 1965 would spell trouble for the bulls. Link

Bulls got a tiny warning at Monday's close when NDX bounced back up to, but failed at, its broken uptrend line from Thursday. It's a very minor break so far and may mean nothing. We'll know for sure after Tuesday's open. NDX 10-min chart: Link

OI Technical Staff : 6/16/2008 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The Market Monitor has been archived.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 : 6/16/2008 5:36:03 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 6/16/2008 4:47:18 PM

Adobe Systems (ADBE) ... Earnings press release Link

Consensus was for EPS of $0.46 on Revenue of $880.01M

Jeff Bailey : 6/16/2008 4:45:06 PM

Adobe Systems (ADBE) $42.85 +0.32% ... slips to $42.10 on headline numbers.

Jeff Bailey : 6/16/2008 4:43:52 PM

Closing Internals found at this Link

Jeff Bailey : 6/16/2008 4:34:01 PM

DXY's 04:00 tick was 73.625

Linda Piazza : 6/16/2008 3:46:54 PM

The OEX is falling through the supporting trendline rising from the 6/12 low. This trendline is the lower trendline of a possible rising wedge formation, a wedge that formed as the right shoulder of the possible inverse H&S just lengthened so far that it rendered the formation invalid. A rising wedge is of course potentially bearish, but if the OEX finds support on 15-minute closes at 617 and then bounces back, there's a possibility that this has been a trap. We've got lots of question about the formations going into tomorrow, but what's clear so far is that the OEX is still so far chopping between Keltner support that's now at 617 on 15-minute closes and resistance that's now at 620.92 on 15-minute closes and that's where it's been a whole lot of the day.

Jeff Bailey : 6/16/2008 3:44:05 PM

LM Ericsson (ERIC) $12.08 +2.11% ... announcing that it will show the world's first 10Gbps Gigabit Passive Optical Network (GPON) system for IPTV, with four times the bandwidth of existing GPON systems, at the NXTcomm08 in Las Vegas (June 17-19) at Booth# SU 7416.

Linda Piazza : 6/16/2008 3:32:56 PM

Today's OEX daily candle is likely to be a potential reversal signal (doji with a relatively long lower shadow) produced beneath the 10-sma on the daily chart. The formation over the last week's time looks a lot like that seen from 5/23 to 5/30, with 5/30 producing a doji at the 10-sma rather than below it. So, the possibility of a downturn exists tomorrow if the same pattern produces the same result. That downturn started immediately the next day.

I'm not sure it will produce the same result. Much may depend on what happens with Japan's Tertiary Index, Germany's ZEW, GS earnings and our reports tomorrow morning. A break up to 623 or maybe even 627 doesn't seem impossible, if not yet a given. However, with this same pattern playing out so far, you should evaluate whether you want to carry too much bullish risk overnight just in case you get the same result this time as last time such a doji near the 10-sma was produced.

With these patterns playing out, a gap above 621-622 would tend to be bullish tomorrow morning, suggesting that big money had elected to gap prices higher and force shorts and got-to-get-on-the-train bulls to help them drive prices higher, a favored tactic of big money. An immediate downturn, especially if it held below 617 on 15-minute closes, would be worrisome and more suggestive that the former pattern was indeed repeating.

Keene Little : 6/16/2008 3:32:11 PM

With the BIX pressed up against its downtrend line from October, and SPX doing the same thing, it could be interesting to see what happens tomorrow after GS reports. SPX daily chart update: Link

Linda Piazza : 6/16/2008 3:23:19 PM

Depending on what happens in the last 45 minutes of trading, the OEX could end the day jammed under resistance that's held all day, primed either to gap above that resistance tomorrow morning or maybe turn down below it. So, what happens overnight and tomorrow morning?

At 7:50 tonight, Japan has the Tertiary Industry Activity Index, a number that often does impact currency moves. With the USDJPY jammed between its 200-ema and 200-sma, testing that -sma, such movements are important now. Continued gains or consolidation near the highs would tend to be supportive of U.S. equities while a sharp downturn would tend to suggest a pullback.

Tomorrow morning at 5:00 am ET, Germany's important ZEW Economic Sentiment number will be released, and that can and does change trading patterns in Europe. The Bank of England's Inflation Letter may be released tomorrow morning, too.

Here in the U.S., we have the important Housing Starts and PPI at 8:30 am ET. In addition, Goldman Sachs is scheduled to release earnings before the market opens. Best Buy is, too.

Keene Little : 6/16/2008 3:14:53 PM

The banks (BIX) got a good bounce today (+2.6%) but that's not surprising when you think about how many shorts are probably in this sector. The BIX has bounced back up inside a potential descending wedge, after a throw-under last week, so that's potentially bullish here. So far the bounce has stopped at its downtrend line from October (the dotted trend line on the daily chart) at this morning's high, which it tested with bearish divergence this afternoon. Daily chart: Link

There remains the potential for it to drop a little lower to a Fib projection near 180 for the 3-wave move down from March before setting up a larger bounce (similar to what's depicted in dark red). I do not believe the banks are putting in a longer-term bottom and I think it's premature to be buying the banks. For a bounce maybe but not for your longer-term portfolio.

Jeff Bailey : 6/16/2008 3:11:01 PM

Sector Losers ... Healthcare Providers -0.95%, HMOs -0.70%, Insurance -0.28%

Jeff Bailey : 6/16/2008 3:10:03 PM

Sector Winners ... Airlines +2.65%, Regional Banks +2.65%, Broker/Dealers +2.47%, Money Center Banks +2.19%, Home Construction +1.99%, Disk Drives +1.99%, Gold Bugs +1.96%

Linda Piazza : 6/16/2008 3:07:43 PM

The OEX is still trying to chop through that resistance up to 623. Specifically, the 30-minute chart has resistance up to 621.80 on 30-minute closes, but there's also historical resistance near 623 from the Tuesday high and rising short-term trendline resistance that's now just under 622. So, 30-minute closes over 621.80 would signal that the resistance had been broken, but if that occurred I'd remain cautious about what happened up to 623, and then again near 627.

Of course, the other option is that the OEX pulls back from here. If so, the support near 616.60-617.65 is now firming up a bit.

Jeff Bailey : 6/16/2008 3:01:36 PM

Broadcom (BRCM) $26.98 +4.61% ... Co-founder Henry T. Nicholas III pleads "not guilty" to federal drug and securities fraud charges. Mr. Nicholas' plea involves 21 counts contained in two (2) indictments unsealed on June 5. One (1) of the indictments details what authorities claim was one of the largest stock-option backdating cases in U.S. history. Other charges accuse Mr. Nicholas of drugging his business cohorts, hiring prostitutes and maintaining a drug warehouse.

Keene Little : 6/16/2008 2:37:17 PM

Updating the NDX 60-min chart that I had posted last night, it has so far failed just shy of its first Fib target near 1994 (for two equal legs up from last Thursday's low) and left a bearish shooting star at its last 60-min candle (which just closed): Link

It is still above its uptrend line from Thursday, currently just below 1980 so there remains the potential to continue higher, and certainly the potential to continue on up to at least the next Fib projection/retracement near 2026.

Keene Little : 6/16/2008 2:27:40 PM

So far the little pullback from this afternoon's high looks like a correction which means higher still. If ou tried a short play I'd have the stop at a new daily high. There's not a whole lot of bullish energy to this market but nor does it appear to want to sell off. There could be just enough buying to keep the bears at bay.

Jeff Bailey : 6/16/2008 2:17:43 PM

02:00 Internals found at this Link

Linda Piazza : 6/16/2008 2:16:25 PM

The OEX's 15-minute 9-ema is now 618.52; the 30-minute version, 618.08. So, equity bulls would prefer that the 618-618.50 zone hold as support on 15- and 30-minute closes, to sustain the hope that they'll keep battering away at that resistance.

Linda Piazza : 6/16/2008 1:59:13 PM

I just remembered: the OEX's weekly 200-ema is at 621.09, so add that to the types of resistance grouped in the 619-623 region. There was a potential reversal signal on the OEX's weekly chart last week, and bulls would like a close well above that weekly 200-ema this week.

Linda Piazza : 6/16/2008 1:51:36 PM

The OEX's 15-minute 9-ema is now at 618.28. Those who want the OEX to keep battering away at resistance want to see if hold above there on 15-minute closes.

Jeff Bailey : 6/16/2008 1:47:17 PM

ProShares UltraShort Russell 2000 (TWM) Alert! $69.21 -1.52% ... exited the TWM-GP on 06/09/08 at $69.29 in TWM.

Keene Little : 6/16/2008 1:46:49 PM

SPX is also facing resistance now at its October downtrend line just under 1364, so right here. It's also at its 30-min 130 moving average (which has an uncanny ability to mark support and resistance). It's short term overbought so it's a good time to nibble on a short if it looks like it's going to stall out here. But continue to keep in mind that there may be "odd" forces at play during this opex week, especially if the big institutions have some short puts to protect and want to capitalize on any cheap calls they picked up last Thursday.

Linda Piazza : 6/16/2008 1:42:32 PM

Right on target we have the OEX move up coming at the beginning of the typical stop-running period from 1:35-1:55 pm ET range. Potential resistance on 15- and 30-minute charts is converging, so I'll just list the 30-minute versions. They're at 620.05-621.62. With the A/D line just hitting a new high for the day, TRIN at 0.84, the USDJPY at 108.19 and challenging its 200-sma and the VXO just hitting a new low of the day, there's at least a modicum of corroboration behind a test of resistance, if not yet proof that the resistance will be broken.

Jeff Bailey : 6/16/2008 1:41:20 PM

Disclosure: I currently hold bullish position in AMR (prior to profile)

Jeff Bailey : 6/16/2008 1:40:32 PM

VIX.X 21.15 -0.32% ...

Jeff Bailey : 6/16/2008 1:40:12 PM

Swing trade call alert! ... for two (2) of the AMR Corp. AMR July $5.00 Calls (AMR-GA) at the offer of $1.55.

AMR $5.74 +5.12% ...

Jeff Bailey : 6/16/2008 1:36:17 PM

US Oil Fund (USO) $109.08 -0.11% ... slips red.

Jeff Bailey : 6/16/2008 1:35:32 PM

DIA's "Big 10" Link ...
IBM $126.47 +0.25% Link
CVX $99.61 +0.21% Link
XOM $88.40 +0.04% Link
CAT $80.94 -0.68% Link
MMM $75.46 -0.86% Link
BA $75.03 -0.11% Link
UTX $68.96 +0.58% Link
PG $66.19 -0.39% Link
JNJ $65.96 -0.46% Link
MCD $60.07 +0.23% Link

Keene Little : 6/16/2008 1:33:34 PM

After breaking its uptrend line from last Thursday, SPX is now bouncing back up for a potential retest right here at 1362.40 as it makes a minor new high. Bulls will want to see this buying continue now otherwise we'll have a kiss goodbye against short term resistance.

Linda Piazza : 6/16/2008 1:31:10 PM

If you've got some JUN credit spreads still in your portfolio, you might take a look and see if you can close any out for a nickel or dime. In fact, you might see if you can BTC your sold strike for a nickel, and then turn around and STC your bought strike for the same thing, making sure first that the other trade has filled and you won't be left short an option. Closing both for a nickel or BTC one for a dime and STC the other for a nickel doesn't always work, but it does sometimes.

I don't like to go into opex week with any front-month options in credit spreads, and I don't have any right now, but I'd be looking to close them out if I did. I'm super conservative about this, though, and you'll need to make the decisions that are best for you.

Jeff Bailey : 6/16/2008 1:27:09 PM

DIA Losers ... VZ $36.47 -2.30%, KO $54.20 -2.18%, MRK $34.78 -2.11%, GM $16.15 -1.82%, T $36.12 -1.52%

Jeff Bailey : 6/16/2008 1:25:32 PM

DIA Gainers ... C $20.99 +2.49%, BAC $30.42 +2.14%, JPM $40.04 +1.16%, AA $39.85 +0.98%

Jeff Bailey : 6/16/2008 1:24:07 PM

Dow Diamonds (DIA) $122.86 -0.19% ... breadth still negative at +9:-21

Jeff Bailey : 6/16/2008 1:23:15 PM

Home Depot (HD) $27.45 -0.29% ... #26 weighted Dow Component.

Jeff Bailey : 6/16/2008 1:21:53 PM

Dow Jones U.S. Home Construction (DJUSHB) 294.79 +1.42% ...

Jeff Bailey : 6/16/2008 1:21:14 PM

NAHB U.S. June Housing Index 18 Vs. May's 19

Jeff Bailey : 6/16/2008 1:10:15 PM

Ben Bernanke's Speech Challenges for Health-Care Reform today at this Link

Linda Piazza : 6/16/2008 1:00:34 PM

I think it's possible that OEX prices could break higher, perhaps at least toward 621 and maybe 623 or even 627-628, but I don't consider it a probability yet. Just a possibility.

Linda Piazza : 6/16/2008 12:59:19 PM

It's possible that enough time has passed--especially with the stop-running time of day approaching in less than an hour--that the OEX will run up to that resistance and then attempt a punch through it. If it does, be watchful, considering such a punch higher a test. It will be important to see how that test unfolds rather than concluding that just because there's a test that it's all gung-ho for bullish trades. Decide how you want to handle that test, if it should occur, and best protect your profits.

Linda Piazza : 6/16/2008 12:56:57 PM

OEX potential resistance on 15-minute closes is now 619.09-620.12. Potential resistance on 30-minute closes is 620.11-621.55, so that whole 619-621.55 zone is rife with potential resistance. There's also potential short-term trendline resistance at about 621.20.

Jeff Bailey : 6/16/2008 12:54:31 PM

13-week Treasury Yield ($IRX.X) up 2.0 bp at 1.950%

Jeff Bailey : 6/16/2008 12:54:07 PM

6-month and 3-month auction results being released.

Keene Little : 6/16/2008 12:50:10 PM

USO has now tested its June 6th high two times--on the 11th and now this morning. Each has left a glaring bearish divergence against the June 6 high. It doesn't mean it can't continue to chop a little higher, and in fact the pattern now would look better with another push to a minor new high following this morning's pullback. But this clearly looks like an ending pattern to me now. It's just a matter of time, and not much more price gain, before we'll likely see a sudden and hard drop in oil.

Jeff Bailey : 6/16/2008 12:28:36 PM

Flooding in the Midwest is causing several problems, and not just damage to corn and bean crops. Several reports surface that railroads and and barges are delaying, or having to divert shipments.

Linda Piazza : 6/16/2008 12:23:31 PM

I'm here sitting at the monitor. I don't see anything changing yet from the time when I began posting that the OEX might have to chop around a while to soften possible resistance before it could make a true attempt at breaking through. The problem with that is that the chopping back and forth could also soften support. So far, that's not happening, with potential support down to 615.58 on 15-minute closes still looking okay. However, that softening of support remains a possibility, too, especially since it hasn't done a whole lot yet to soften resistance. Resistance is currently from about 619-621.56, showing up on the 15- and 30-minute charts right where we'd expect it to show up.

Jeff Bailey : 6/16/2008 12:16:40 PM

12:00 Internals found at this Link

Keene Little : 6/16/2008 12:09:18 PM

SPX is dropping a little further and in so doing it has now broken its uptrend line from Thursday after bouncing off it late Friday and all morning. Two equal legs down from this morning's high is at 1354 so the bulls don't want to see anything worse than that.

Keene Little : 6/16/2008 11:53:30 AM

SPX is still holding its uptrend line (barely) from last Thursday but presently that's about the most bullish thing I can say about it. It looks like it's running out of steam to the upside already. Slightly higher, if it can make another push up, is its downtrend line from October near 1363 which is the first potential setup for a short play. If it breaks down earlier I'll watch it since I'm not convinced yet that we're going to see anything more than chop in that case.

Jeff Bailey : 6/16/2008 11:33:37 AM

Shares of Sirius Satellite Radio (SIRI) $2.68 +5.51% and XM Satellie Radio (XMSR) $11.57 +6.43% sport gains after the staff of the FCC proposes that the agency approve the merger. If the companies meet several conditions, a final vote could come in as little as three (3) weeks.

Linda Piazza : 6/16/2008 11:31:14 AM

So, will we get the chop-back-and-forth action while the OEX's resistance is softened? It's possible. If so, it could take up to a couple of hours. And, by the way, that could also soften the support.

Linda Piazza : 6/16/2008 11:26:28 AM

The OEX resistance now at 619.49-619.95 did hold on 15-minute closes and the OEX has dropped back to test support at 616.50 on 15-minute closes.

Jeff Bailey : 6/16/2008 11:25:08 AM

USO $111.48 +2.08% ...

Jeff Bailey : 6/16/2008 11:24:53 AM

VIX.X 21.89 +3.15% ...

Jeff Bailey : 6/16/2008 11:24:37 AM

Swing trade call exit alert! ... for the Continental Airlines CAL July $12.50 Call (CAL-GV) at the bid of $2.50.

CAL $13.68 +1.33% ...

Jeff Bailey : 6/16/2008 11:18:39 AM

Most Actives ... QQQQ $48.63 +0.53%, SIRI $2.68 +5.51%, SPY $136.29 +0.10%, MSFT $28.92 -0.51%, XLF $23.53 +0.64%, YHOO $23.44 -0.12%, INTC $22.98 -1.41%, AAPL $171.48 -0.51%, CSCO $26.30 -0.26%, BAC $30.47 +2.31%

Keene Little : 6/16/2008 11:18:24 AM

If the market can put together a decent rally this week and get the DOW back up to the 12500 area it will meet resistance, again, at its uptrend lines from 2002/2003 and the downtrend line from October. They all cross in the 12500 this week. Daily chart: Link

But first it has to get through its downtrend line from May 19th (12330) and the 50% retracement of the leg down from June 5th (12343). As the chart shows, we're in a down trend since the May high so if you're playing the long side realize you're playing counter-trend.

Jeff Bailey : 6/16/2008 11:14:42 AM

Oil prices jumped earlier this morning to high from general, with July Crude surging to as high as $139.89 after the UK raised its assessment of a terrorist attack in the United Arab Emirates where roughly 120,000 British expats reside.

Jeff Bailey : 6/16/2008 11:04:57 AM

Washington Post reporting this morning that sources close to Fed Chairman Ben Bernanke saying he has no plans to push for a hike in interest rates, and is more concerned with economic growth than inflation..

Linda Piazza : 6/16/2008 11:00:56 AM

Caution bears: The A/D line has burst up through what looked like strong resistance up to about 330. It's currently 509. This suggest the possibility that the OEX and other indices could burst up through their first levels of resistance, at least, although it doesn't promise it. For the OEX, it's still got stall potential immediately overhead from about 619.30 up through 621.71, but perhaps this suggests that the OEX can push up through the first levels of that zone, at least, as long as the A/D line doesn't immediately pull back.

Jeff Bailey : 6/16/2008 10:58:27 AM

Treasury reported this morning that net foreign acquisition of long-maturity U.S. securities rose to $102.8 billion in April, nearly double the $53.3 billion in March.

Linda Piazza : 6/16/2008 10:53:33 AM

The OEX's 15-minute 9-ema continues to hold as support on 15-minute closes. That's now at 616.38. The potential target and resistance on 15-minute closes now at 619.18 looks as if it's firming up as resistance. So, the outlook hasn't changed, with that outlook being a possible rise up to test that resistance. Howevre, barring a strong burst up through 623, look for a possible stalling or pullback near 619-623, at least long enough to soften resistance.

Jeff Bailey : 6/16/2008 10:54:06 AM

Lehman Bros. (LEH) $27.35 +5.92% ... shares edge off their recent lows after Q2 earnings match the company's horrific forecast of a loss of $2.77 billion, or $5.14 a share. Revenues were negative, reflecting write-downs and investment losses.

Earnings Press Release Link

Keene Little : 6/16/2008 10:48:16 AM

This morning the DOW briefly broke its short term uptrend line from last Thursday through Friday's mid-day low and is now threatening again to break down unless it bounces back up right now. If it does break back down it could mean a much steeper pullback that could drop back down near Thursday's low (for a retest?).

If it can continue rallying, the next resistance levels will be the downtrend line from May 19th, currently near 12330, and then the June 10th 12368 high.

Jeff Bailey : 6/16/2008 10:39:38 AM

Weekly, Monthly, Quarterly Index Pivot Matrix found at this Link

Linda Piazza : 6/16/2008 10:34:56 AM

Putting together the information from my 10:27:00 and 10:32:14 posts, I would think then that we might see the OEX rise up to test resistance in the 619-623 zone, but, barring a strong burst higher in the A/D line, it will take some time to get through that resistance or else another pullback to support before the OEX could maintain 15-minute closes above it.

Linda Piazza : 6/16/2008 10:32:14 AM

The A/D line has just approached what looks like strong resistance in the 110 to 330 zone. It's pulled back a little from this first test and is currently -74. This looks like strong resistance, so I would think that it's either going to take a strong burst up through it, which we'll all notice because equity prices will rise as it happens, or else it's going to take time--up to several hours--before that firm resistance can be softened. That means that, barring a strong burst of buying, we're probably going to see some more chopping around or else a rollback to stronger support before another try can be made. The burst higher we can't predict, unfortunately, because none of us knows the plans of big money that can make that happen.

Linda Piazza : 6/16/2008 10:27:00 AM

There's now been a first 15-minute close for the OEX above the S/R level now at 616.51 as well as above the 15-minute 9-ema a few cents below that. If the OEX can maintain those closes, the Keltner setup shows a potential upside target of 619-619.06. However, that's also potential resistance now on 15-minute closes, with trendline resistance (neckline for a possible inverse H&S) at just above 620, too. So, if the OEX does rise to test that 619-620 zone, I'd begin watching for potential for it to stall or even roll down again. Necklines are sometimes places where the bulls and bears do battle. Actually, it's possible that the entire 619-623 zone could be a battlefield. Bears should be watchful, too, for a break up through that neckline and an accelerated climb up to or through 623.

Jeff Bailey : 6/16/2008 10:22:55 AM

Sector Losers ... Airlines -2.43%, Healthcare Service Providers -1.49%, Drugs -0.80%, N. American Telecom -0.79%

Keene Little : 6/16/2008 10:21:46 AM

Transports and banks are doing well this morning so that's helping the bulls' cause.

Jeff Bailey : 6/16/2008 10:21:37 AM

Sector Winners ... Gold Bugs +2.87%, Broker/Dealer +2.00%, Regional Banks +1.86%, Money Center Banks +1.62%, Disk Drive +1.45%, CBOE Oil +1.26%, Oil Service +1.10%, Semiconductor +1.07%

Keene Little : 6/16/2008 10:21:07 AM

So far this morning's pullback has been relatively mild and hasn't even threatened the mid-day low on Friday. In fact SPX is holding its uptrend line from Thursday afternoon so it all continues to look bullish, especially if it can now rally back above Friday's close.

Jeff Bailey : 6/16/2008 10:19:25 AM

10:00 Internals at this Link

Linda Piazza : 6/16/2008 10:05:56 AM

There was another OEX 15-minute close at or slightly above the 15-minute 9-ema, with that average now a bit lower at 615.69. The OEX is 615.28 as I type, with potential support on 15-minute closes at 614.65. Bulls need to see it break back above 616.48 and hold above there on 15-minute closes. Right now, nothing has been settled, either way, in my opinion.

Linda Piazza : 6/16/2008 9:54:35 AM

The VIX punched above potential resistance on 15-minute closes at 22.50 but is now coming back down to retest that resistance. We don't know how this 15-minute period will close, but equity bulls would like the pullback to continue. The VIX is 22.50 as I type.

Linda Piazza : 6/16/2008 9:52:30 AM

The OEX finished the last 15-minute period above potential Keltner support that was then at about 615.62 and is now 615.71, but it couldn't close above the higher edge of that potential support level, at 616.49. It's now back to test support. Lower potential support on 15-minute closes is 614.30. The OEX is at 614.99 as I type.

Keene Little : 6/16/2008 9:50:38 AM

We didn't get an immediate reversal of the down open and that sets a more bearish tone to the market this morning. Last Thursday's lows are the critical levels and as long as they hold we could see the market works its way higher after this morning's pullback. If we're in a correction of the decline from June 5th it could be a whippy and choppy one, especially during opex.

Linda Piazza : 6/16/2008 9:44:25 AM

The USDJPY is currently 108.04. During the post-Empire-State period, it dropped below support at 108.09 on 15-minute closes and it needs to scramble back above that. When seen on a daily chart, though, it's just chopping between the 200-sma's resistance on daily closes at 108.21 and the 200-ema's possible support on daily closes at 107.84. That support hasn't been established fully yet, although it did hold Friday. In other words, the USDJPY is just doing what you'd expect it to do when it retested the 200-sma for the first time in ten months, after a steep decline during that time: it's pausing. In fact, if pausing is all it continues to do, then that's far from a negative thing. We can't count on these inter-market relationships to always stay the change, but for now, U.S. equity bulls would rather this remain strong.

Linda Piazza : 6/16/2008 9:37:32 AM

Keltner outlook on the A/D line: the A/D line opened in the bottom or bearish half of the 15-minute Keltner channels, but there's no nearby support or resistance. In cases like that, the A/D line is as likely to rise toward resistance, now at 162 to 330, as it is to drop to support, now at about -1700. Sometimes it resolves that "where shall it go" dilemma by printing a certain range in the first 15-30 minutes and then chopping around mostly within that range for another hour or two, so we'll see if that happens now. As I type, the A/D line is -536.

Linda Piazza : 6/16/2008 9:35:08 AM

Remember that although the OEX is currently violating the potential support on 15-minute closes that now extends from 615.62-616.49, it could still bounce back above that by the 15-minute close, showing that support essentially holding. Next potential support on 15-minute closes is 614.53.

Keene Little : 6/16/2008 9:14:54 AM

The steep drop in equity futures since the highs near 6:00 AM certainly doesn't look very good for the bulls. But just as I always get suspicious about a spike up from an early-morning low (that immediately gets sold into once the cash market opens up and the new buyers provide the liquidity to sell into), I'm wondering if we're seeing the opposite this morning. Be careful about this move as it might be "designed" to get some selling going after the open so that the Boyz can do some buying.

Linda Piazza : 6/16/2008 9:12:48 AM

Futures have continued dropping since my 8:56:44 post. I would still look for the possibility of support on 15-minute closes at 616.30-616.59 on the OEX, although it looks now as if that might be pierced. Lower support is converging near 613.67-614.69 and bulls certainly want that to hold on 15-minute closes.

Linda Piazza : 6/16/2008 8:56:44 AM

Good morning. I hope everyone had a restful weekend ahead of this week's option-expiration action.

As I type, SPX futures are about 5.50 points below fair value. As you know, I always caution that we can't count on futures' action to predict where the cash markets are going, but they do give us at least a little guidance. So, if we extrapolate where the OEX might be from the SPX's distance from fair value, we might see the OEX about 2.75 points below Friday's close. That would drop it back int the 616-ish zone or a little above. When looking at the OEX's 15-minute chart, I see that the OEX ended the day Friday testing resistance and that a pullback would have been natural anyway. The OEX has potential support at 617.89 on 15-minute closes, but that's light support and would require that the OEX act fairly bullishly for that to hold. Stronger support converges at 616.30-616.59 on 15-minute closes, and that's what bulls want to see hold on 15-minute closes, prompting a bounce.

By now, some of you will have noced a potential inverse H&S on the OEX's chart, with that inverse H&S having an ascending neckline. The neckline currently crosses at about 620 or maybe a little over it, but will be climbing throughout the day. Bulls should be watchful for rollover potential if it's tested. Another possibility is that this formation we're seeing is actually just the head portion of a larger inverse H&S what would have a horizontal neckline at about 623, so that's another level that could pause the OEX and send it back to form a new right shoulder. The 30-minute chart gives some corroboration for some resistance in the 620-623 zone, showing Keltner-style resistance that looks strong currently at 620.70-621.64 on 30-minute closes. As the OEX climbs, if it does, that will get nudged higher, and the ascending neckline will rise as time passes, so it's possible that those will converge at 623 by the time they're tested, rather than at 620-621 as they are now.

Jane Fox : 6/16/2008 8:56:20 AM

All time high was $139.12 but so far today it has reached a high of $139.89, a new all time high.

Jane Fox : 6/16/2008 8:55:04 AM

Crude is taking off and is now up over $6;00 at 139.89.

Jane Fox : 6/16/2008 8:48:06 AM

It's not looking like we will have a bullish open, all major equity indexes are making new overnight lows, all expect the NDX futures that is. Link

Jane Fox : 6/16/2008 8:43:02 AM

Federal prosecutors, capping a yearlong investigation, are preparing to file criminal charges against managers of two Bear Stearns Cos. hedge funds whose collapse helped mark the start of the credit crisis.

The U.S. Attorney's office in Brooklyn is slated to complete interviews of witnesses and other key people in the case this week, and has indicated to lawyers with interest in the case that indictments could be imminent, according to people familiar with the matter.

The former Bear Stearns managers, Ralph Cioffi and Matthew Tannin, managed two high-profile bond portfolios for the securities firm's asset-management unit.

Market Monitor Archives