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Keene Little : 6/18/2008 10:15:57 PM

Thursday's pivot tables: Link and Link

Wednesday evening I showed the DOW 60-min and daily charts to show how we could be perched on the edge of the cliff now, especially with it breaking last week's low. It sets up a potentially very bearish wave pattern to the downside. If we get a little more bounce Thursday morning, which it looks like we're set up for, that's followed by a continuation lower then the selling is likely to accelerate.

SPX did not break last week's low (1331.29) but it's close so any continuation lower would confirm the DOW's move. The SPX 60-min chart shows the same setup as I showed on the DOW chart (dark red for the bearish pattern): Link

The key level to the upside is now Tuesday morning's high (1366.59, DOW 13323) as a break above that level would negate the very bearish wave pattern and set up the possibility for at least a run up to its downtrend line from May 19th (1376) or even higher as shown on the daily chart (for another leg up within its large rising wedge pattern from January). Stay short until proven otherwise. SPX daily chart: Link

OI Technical Staff : 6/18/2008 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The Market Monitor has been archived.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 : 6/18/2008 9:31:03 PM

Closing Internals found at this Link

Jeff Bailey : 6/18/2008 9:19:47 PM

SED Developments ... A long list of developments out of today's Strategic Economic Dialogue (SED) which is being lead by the Treasury's Paulson and China's Vice Premier Wang Qishan.

One of the financial-related measures discussed had China cutting the "lockup period" for principal investments under the Qualified Foreign Institutional Investor program to three (3) months from one (1) year.

China also said it plans to complete a study on opening up its financial sector to more foreign ownership by year-end. This has been a "top priority" for Engage China, which comprises nine major U.S. financial services trade groups.

Mr. Paulson said he welcomed the recent accelerated appreciation of the yuan and said he urged the Chinese to continue moving toward greater currency flexibility.

Chinese officials expressed their concern about the U.S. subprime mortgage market crisis and the weak dollar's impact on global inflation.

Chinese officials said the two countries agreed to "enhance consultation and coordination" on monetary, fiscal and macroeconomic policies in the future.

Keene Little : 6/18/2008 7:47:43 PM

I see that while I was away the bears did play today. The DOW did the nasty and dropped below last week's low and in so doing it opens up the possibility for a very nasty decline from here. First it looks like today's decline from Tuesday morning completed a 5-wave move down and the bounce at the end of the day should be half of the correction to that decline. A quick rally on Thursday morning (to perhaps 12115-12120) could be met with selling again and start to accelerate lower (dark red on the 60-min chart): Link

If we really are on the edge of the cliff here, and a break below 11950 would confirm it in my mind because it would be a break of the shallow up-channel from January, then a drop down to the 10,500 area before the end of July is entirely possible (and then a big bounce into August/September to correct the decline from May). Daily chart: Link

Jeff Bailey : 6/18/2008 7:27:11 PM

USANA Health (USNA) $25.99 +0.19% ... stock surges to $28.99 on updated quidance.

Now sees Q2 EPS between $0.60-$0.63 a share on revenue of $107M-$109M. Prior guidance $0.48-$0.51 a share.

Jeff Bailey : 6/18/2008 5:35:11 PM

Evergreen Solar (ESLR) $10.24 +0.19% ... Shares get a pop to $11.49 extended after company said it signed two long-term sales contracts worth $600 million. The contracts extend through 2012 and bring the company's total contractual backlong to $1.7 billion.

Jeff Bailey : 6/18/2008 5:15:37 PM

CBOE saying exchange seat sells for record $3.3 million.

Jeff Bailey : 6/18/2008 5:02:37 PM

Treasury's Paulson making comments ... Saying China hasn't backed away from much needed market reforms. Strong demand versus supply, not weak dollar is what is driving oil's price. US economic fundamentals to be reflected in dollar.

Jeff Bailey : 6/18/2008 4:53:52 PM

Ratings agency Standard & Poors saying it doesn't see downgrade of Morgan Stanley (MS) debt on Q2 report.

Jeff Bailey : 6/18/2008 4:43:03 PM

FXB finished $196.47 +0.19% ...

Jeff Bailey : 6/18/2008 4:42:32 PM

BOE's King making comments ... Sees UK Economic growth slowing quite sharply with Q2 growth particularly weak. Sees UK housing prices weakening with consumer spending.

Jeff Bailey : 6/18/2008 4:35:50 PM

DXY's 04:00 tick was 73.424

Jeff Bailey : 6/18/2008 4:27:32 PM

BIX.X 187.36 -2.35% ... DAILY Pivot levels for tomorrow ... 180.49, 183.92, Piv= 187.41, 190.84, 194.33.

Jeff Bailey : 6/18/2008 4:24:47 PM

BIX.X 187.36 -2.35% ... below WKLY S1, MONTHLY S2 and QRTRLY S1.

Jeff Bailey : 6/18/2008 4:22:32 PM

Pretty much "just the opposite" happening to OEX spreads now as last month. Put side feeling the heat.

Jeff Bailey : 6/18/2008 4:20:51 PM

Had the OEX managed to close above the 610 strike then DIA likely would have held a $121 close. It didn't and each intra-day test once broken, suggests to me that there's still some risk of liquidation in the BIG caps. Usually NOT bullish when the heavy PUT OI doesn't serve support. If NAKED put (or part of spread), then BULL side will usually lean on things with shorting until they get squared up.

Jeff Bailey : 6/18/2008 4:10:56 PM

OEX.X 607.40 -1.05% ...

Jeff Bailey : 6/18/2008 4:09:31 PM

Swing trade call exit alert ... with the DIA looking to close below $120.75, close out the one (1) DAW-HS at the bid of $2.50.

DIA $120.52 -1.15% ...

Jeff Bailey : 6/18/2008 4:03:18 PM

DIA, SPY, IWM and QQQQ Montage at this Link

Linda Piazza : 6/18/2008 4:01:11 PM

The BIX may be ready to give us some guidance tomorrow morning. After the initial drop this morning, it formed a triangle, and it can't move far without violating either the support or resistance of that triangle now. In fact, prices break out of most triangles about 2/3 of the way through them to the apex, and this one is further than that, so it may render any upside breakout or downside breakdown invalid. It would have to break one way or the other soon after the open and maintain the breakout direction to avoid rendering it invalid.

Linda Piazza : 6/18/2008 3:55:30 PM

The OEX is sliding down along that descending top trendline that had marked the top of its supposedly bullish falling wedge. It's not really violating the support as the support is sliding lower, but it's certainly not springing up from it yet, either, so is giving as mixed a picture as possible. Obviously, a close well below 608 would not offer the same spring up from the lows of the day and the daily candle would not be bullish, either, but we're still getting mixed pictures here, at least on the 15-minute chart. The OEX has improved from a Keltner standpoint, finding support on 15-minute closes on a descending channel line now at 606.89. It's improved in that it's no longer falling inside the wedge, but along the top of it. But is that enough to prompt a bounce tomorrow? I don't know. It's enough to warn bears to be sure they want to go home with the risk they have, whatever that might be, or if it needs to be adjusted.

Linda Piazza : 6/18/2008 3:49:33 PM

What happens tomorrow that could impact your trades? First, tomorrow is the last day for trading for SPX JUN options as well as others such as the RUT. The OEX's trade through Friday.

Tonight, Japan has its All Industries Activity Index at 7:50 pm ET. The Bank of Japan's new governor speaks tonight at 2:40 am ET. However, the biggees will be our weekly and initial continuing claims at 8:30 am ET and the Philly Fed at 10:00. We have both Treasury Secretary Paulson and FOMC Member Kohn on tap tomorrow, at 12:45 and 2:30 pm ET, respectively. Whatever is setting up this afternoon and first thing tomorrow morning might be changed by the Philly Fed, though, so plan accordingly.

James Brown : 6/18/2008 3:46:23 PM

Noting that Sears (SHLD) has broken down under short-term support at $80.00. The stock looks very oversold and volume today is more than double the norm.

Linda Piazza : 6/18/2008 3:44:37 PM

The TED spread is 0.88, down a little from its 0.90 high of the day.

Linda Piazza : 6/18/2008 3:39:34 PM

Anything can happen by the end of the day, but let's start thinking about our "if the OEX ends the day at" scenarios. If the OEX ends the day at or above its current level of 609.27 as I type, it will be producing a candle with a spring up from support. Depending on how high that spring is by the end of the day, the OEX will either be producing a potential reversal signal or else just a candle that signals that someone at least was willing to do some dip buying. If the OEX were to end the day at or near its opening value of 613.25, then the reversal signal will be a more classic one.

I've wondered if the OEX might not spend the first part of the summer at least chopping through a zone perhaps from about 608-635. Of course, it violated the lower part of that zone today, but if it closes above it, it hasn't done so on a daily closing basis. That's no proof that this possible scenario will play out, but finding support on daily closes near 608 certainly supports the scenario better than not finding support. We still must test the action against that scenario.

For now, the possibility still exists that the OEX could just keel over, at least to 602-604 and maybe lower, as well as that it could bounce up through that possible chop zone for the summer. It's teetering on a ledge and my longer-term view is that we'll have to retest the March bottom if not exceed it. So, I'm certainly not looking at this action through rose-colored bullish-all-the-way glasses. But I do recognize the possibility that there's going to be some choppy trading conditions preceding another break either direction.

So, evaluate how much bullish/bearish risk you're carrying into tomorrow, particularly if you're in front-month (JUN) options. Premium is going to start leaking out of those quickly beginning this afternoon and into tomorrow.

James Brown : 6/18/2008 3:31:13 PM

Trading Idea: Metal and mining stock Cleveland Cliffs (CLF) continues to show relative strength. The stock is bouncing from the $100 level following a bounce from its trendline of higher lows just a few days ago. Shares have now broken the June trendline of lower highs.

Linda Piazza : 6/18/2008 3:30:49 PM

So far, the OEX's breakout above its bullish falling wedge's resistance is holding, but now we have the test of the 11:45-ish high of 611.21. The OEX this 15-minute period hit a high of 610.39 but is currently 609.43. On any pullbacks, bulls now want the rising 15-minute 9-ema now at 608.13 to hold as support on 15-minute closes, or, if that doesn't hold, want the top of that rising wedge to now hold up as support. That's at about 607.80, if I'm eyeballing it right.

James Brown : 6/18/2008 3:26:41 PM

Hmm... Canadian Solar Inc. (CSIQ) is out performing with a 7.9% gain and a new high over $50.00.

James Brown : 6/18/2008 3:25:32 PM

Exit alert! I would seriously consider exiting any bullish positions in Peabody Energy (BTU) . The stock is up 5.6% to $83.40. Our secondary target has been the $84.00 level. At a minimum consider raising your stop loss significantly.

Jeff Bailey : 6/18/2008 3:24:35 PM

DAW-HS $2.69 x $2.73

Jeff Bailey : 6/18/2008 3:23:51 PM

VXO.X 23.51 +6.04% ...

Jeff Bailey : 6/18/2008 3:23:17 PM

Dow Diamonds (DIA) $120.97 -0.78% ...

James Brown : 6/18/2008 3:22:53 PM

Online travel site Priceline.com (PCLN) is up 4.7% and breaking out over its 50-dma and short-term resistance near $130.00.

Jeff Bailey : 6/18/2008 3:22:41 PM

OEX.X 610.15 -0.60% ... back for yet another look at heavy 610 put OI.

James Brown : 6/18/2008 3:22:09 PM

Short squeeze in progress at Pyramid Oil Co. (PDO) . The stock is up 27% to $32.14 following yesterday's huge gain. Volume is almost 800K shares. Normal volume is about 500K. The latest data put short interest at 14.9% of the 3.7 million shares outstanding.

James Brown : 6/18/2008 3:19:17 PM

Coal stock Consol Energy (CNX) is extending its gains now up 7.1% to $117.15.

Linda Piazza : 6/18/2008 3:14:26 PM

So, the OEX is up through the top of its falling wedge, the potentially bullish formation that I mentioned earlier. It needs to confirm by topping the 11:45-ish high of 611.21 and by holding above the wedge's prior resistance on any pullbacks. It's not confirmed yet but doing good so far. "So far" doesn't go far in this kind of market environment, however.

Jeff Bailey : 6/18/2008 3:11:49 PM

Most Actives ... SPY $134.35 -0.89%, QQQQ $48.08 -0.94%, XLF $22.67 -1.04%, FITB $10.16 -20.18%, GE $28.32 -1.87%, IWM $72.97 -1.01%, LEH $24.51 -2.54%, CSCO $25.35 -2.38%, C $20.69 +1.12%, SIRI $2.41 -3.60%

Jeff Bailey : 6/18/2008 3:03:55 PM

Bond market closes ...

13-week Yield finished down 7.5 bp at 1.880%, while the 5-year yield darted lower by 10.1 bp at 3.564%. The benchmark 10-year yield finished just above its WKLY Pivot, falling 7.1 bp at 4.154%, while the longer-dated 30-year yield slid 6.0 bp at 4.730%.

James Brown : 6/18/2008 3:01:08 PM

Rising crude oil certainly doesn't help but now oil refiner Tesoro (TSO) is down 7% following an analyst down grade today. Shares are hitting new multi-year lows albeit on very low volume. Volume today is about 2.6 million versus the average of 8.3 million.

Linda Piazza : 6/18/2008 3:01:32 PM

The OEX is shoving up through the descending top trendline of the potentially bullish falling wedge in which it's been moving down today. It not sustained a 15-minute close above the resistance now at 607.86 nor sustained values above that trendline, but it's testing it. As I typed, the OEX fell back to that trendline, now at about 608.45. Bears need to keep on their toes, their just-in-case profit protecting plans updated. Bulls need to be aware that any breakouts or breakdowns can be traps, so keep their stops ready if anyone is trying this from the bullish side.

James Brown : 6/18/2008 2:55:12 PM

Oil and natural gas stock Chesapeake Energy (CHK) is up 2.2% to a new high at $65.50 after having its price target raised to $85 today. CHK has been getting a lot of attention since top management has been constantly buying more and more stock. The Co-founder, Chairman and CEO now owns more than 32.4 million shares of CHK. There is 540 million shares outstanding and 484 million in the float.

Jeff Bailey : 6/18/2008 2:53:02 PM

Argentina saying GPD grew 8.4% for Q1 year-over-year. Up 0.6% on quarter.

Linda Piazza : 6/18/2008 2:46:36 PM

On the OEX's 15-minute chart, today's action has resulted in a potentially bullish falling wedge pattern. The resistance from that wedge is currrently about 608.54 and the support is currently about 605.20, but both are still falling. If there's a breakout or breakdown, remember the possibility that such a breakout or breakdown could be a trap and be vigilant about your stops. OEX at 607.68 as I type.

Understand that the psychology that unpins such formations might be bullish but that doesn't mean that the bulls will win the day. It just means that if you recognize the pattern (and the bullish divergences we're seeing on charts such as the 15-minute one) that you are being warned to keep updating your just-in-case plans to protect your bearish profits.

James Brown : 6/18/2008 2:45:05 PM

Yet again coal stocks are soaring. This time another analyst firm has raised targets on coal stocks based on rising coal prices.

-- Coal Stocks --
MEE.... +3.8% to a new high at $89.00
BTU.... +4.5%, testing highs near $82.50
ACI.... +3.9%, near $74.50
FDG.... +3.1% to a new high near $90.00
JRCC.... +7.5%, going parabolic, near $59.00.
CNX.... +5.1% to new high at $115.00
PCX.... +2.5% to new high above $157.00
ARLP.... +1.98% to new high near $55.00
ANR.... +0.8% to $97.00
WLT.... +0.8% to $103.50

Jeff Bailey : 6/18/2008 2:42:25 PM

Sector Losers ... Airlines -4.00%, Money Center Banks -2.39%, Retail -2.21%, Regional Banks -2.06%, N. Amer. Telecom -2.07%, Semiconductors -2.17%, Networking -2.08%

Linda Piazza : 6/18/2008 2:41:46 PM

The BIX has still not produced a new low and is still holding on 15-minute closes over potential support now gathered from 185-186.78. It hasn't however confirmed its higher low by producing a higher high that the swing high at about 11:45 am ET. That high was 190.89, with the BIX now at 187.95.

Jeff Bailey : 6/18/2008 2:40:02 PM

Sector Winners ... Home Construction +1.04%, Dow Transports +0.47%, Broker/Dealer +0.46%, Oil Service +0.39%, Gold Bugs +0.31% and Treasuries.

James Brown : 6/18/2008 2:37:57 PM

Juniper Networks (JNPR) has seen its stock fall off a cliff in the last several days when it broke down under technical support at its 50 and 100-dma. Now shares look very oversold and approaching possible support at its April 2008 lows near $22.25. Nimble traders may want to watch for a bounce. A 50% retracement of the sell-off would put JNPR near $24.50. FYI: The P&F chart is bearish with a $16 target.

Linda Piazza : 6/18/2008 2:33:00 PM

The OEX couldn't make it back above the line now at 608.40 and couldn't even close the 15-minute period above the 9-ema. A new low has resulted but bears should still keep in mind that we're still seeing some bullish divergences show up. As I said earlier, that doesn't prove anything but that you should keep updating your trading plan for protecting your bearish profits. The potential downside target is now 603.71, and the OEX may well reach it, but that's just not guaranteed, particularly with these bullish divergences. The day's pattern is beginning to take on a bit of a look of a bullish falling wedge.

James Brown : 6/18/2008 2:32:20 PM

CNBC affect... now Heely's, Inc. (HLYS) , the company who makes the shoes with the wheels in the base, is up 10% to $4.40 and breaking out over its 50-dma. Shockingly... they're saying that men over 30 are a growing customer for these products.

Jeff Bailey : 6/18/2008 2:28:34 PM

USO $110.98 +2.11% ... comes to Wednesday's close.

James Brown : 6/18/2008 2:24:09 PM

Dow-component Wal-Mart (WMT) is down 1.7% to $57.65 and breaking down from its two-week trading range under resistance at $60.00. The MACD on the daily chart has produced a new sell signal. The next level of support is the rising 50-dma near $57.25.

Jeff Bailey : 6/18/2008 2:19:59 PM

02:00 Internals found at this Link

James Brown : 6/18/2008 2:18:00 PM

Interesting comments on CNBC... the anchor asks about speculation that there is 3 times more oil under the artic than in Saudi Arabia. Is there any truth to this claim?

CNBC guest, Matt Simmons, said that in the last 40 years there has been 220 attempts in the artic and each one was a dry hole.

James Brown : 6/18/2008 2:14:58 PM

Follow up on Ironclad (ICPW).. the bounce is fading fast... only up +7% now instead of +32%.

James Brown : 6/18/2008 2:14:16 PM

USO oil ETF is a current OI call play. This bounce from today's lows looks like a new entry point. I'd probably raise the stop loss toward $107. Currently the USO has resistance at $112.75.

James Brown : 6/18/2008 2:09:30 PM

Wow!

CNBC just had their Mike on America segment about the Ironclad Performance company who specializes in gloves and clothing for construction workers.

In the last few minutes shares of Ironclad Performance (OTC BB: ICPW) are up 32% to $0.37 cents and pulling back after tagging its 200-dma near 40 cents. Normal volume is 57K shares a day. Today's volume is over 204K.

Linda Piazza : 6/18/2008 2:05:56 PM

OEX bulls now need to see more than a 15-minute close above the 9-ema; they need to see sustained 15-minute closes above the Keltner line now at 608.70. Be careful of the possibility that the OEX could punch up toward 609.50 and then fall back.

James Brown : 6/18/2008 2:03:00 PM

Weight Watchers Intl. (WTW) is crashing to new 52-week lows (-5.4%) and breaking support at the $40.00 level after an announcement last night that the Chief Operating Officer was leaving.

James Brown : 6/18/2008 2:00:28 PM

No problem, Linda. They haven't been trading very long.

Linda Piazza : 6/18/2008 1:59:53 PM

Thanks for that information on solar ETF's, James. I didn't know about those.

James Brown : 6/18/2008 1:59:35 PM

Correction: The lower chart is a MONTHLY chart of IP, not a weekly.

James Brown : 6/18/2008 1:58:53 PM

Intl. Paper (IP) is up today after an upgrade from Goldman Sachs. However, the stock is still in a bearish trend. The weekly chart suggests more weakness ahead but the daily chart is showing a possible bullish wedge forming. The stock is trading near $25 and the P&F chart is pointing to a $21 target. chart: Link

James Brown : 6/18/2008 1:51:47 PM

FYI: There are also a couple of solar-energy ETFs. symbols: KWT and TAN.

James Brown : 6/18/2008 1:50:12 PM

If you want to see components of the Global Wind Energy Index, click here: Link

Click on the orange components tab on the right.

About the ISE Global Wind Energy Index
The ISE Global Wind Energy Index is owned and was developed by the International Securities Exchange LLC, in consultation with Standard & Poor's, a division of The McGraw-Hill Companies, Inc. Index components are reviewed for eligibility and the index is rebalanced semi-annually according to the index methodology. The index is calculated and maintained by Standard & Poor's.

Linda Piazza : 6/18/2008 1:49:32 PM

The VIX and VXO just popped up to new highs of the day. There was potential value/RSI divergence on that pop higher, but it can be easily reversed by having RSI climb before VIX drops below the swing low about 11:45. So, we're seeing potential bullish divergence on the OEX and some other indices and potential bearish divergence on the VIX. All that means for now is to keep updating your profit-protecting plan if in bearish trades.

Linda Piazza : 6/18/2008 1:46:05 PM

The OEX's 15-minute 9-ema is now 607.89; the SPX's, 1338.71.

James Brown : 6/18/2008 1:45:18 PM

The first wind-energy ETF began trading today on the NYSE.

The symbol is (FAN) and is " designed to track the performance of the ISE Global Wind Energy Index. The Fund will normally invest at least 90% of its assets in common stocks that comprise the Index or in depository receipts representing securities in the Index." (source: Press release)

Jeff Bailey : 6/18/2008 1:42:03 PM

USO $110.27 +1.49% ... gets a bid above WKLY Pivot.

Jeff Bailey : 6/18/2008 1:31:33 PM

Fox News has reported that Boeing's (BA) $75.90 +2.04% protest to the government over a $30 billion millitary aircraft tanker contract has been sustained. Fox sourced congressional officials.

Linda Piazza : 6/18/2008 1:29:25 PM

The TRAN has also not produced a lower low for the day, at least not yet. That's also a slight divergence from the OEX, SPX and Dow action. At least, it's a divergence as long as the TRAN doesn't follow suit and drop lower.

Linda Piazza : 6/18/2008 1:27:59 PM

The BIX did not reach a lower low but instead has so far found support at the Keltner level I mentioned earlier, but with that level now moved to 186.12. So, the BIX has a higher low so far, and that's a bit of a worry for OEX, SPX and Dow bears, although not yet proof of anything. BIX at 186.94 as I type.

Jeff Bailey : 6/18/2008 1:26:40 PM

DIA $120.46 -1.22% ...

Jeff Bailey : 6/18/2008 1:26:22 PM

Boeing (BA) $75.59 +1.62% ... active on reports it may win "tanker contract challenge."

Linda Piazza : 6/18/2008 1:25:25 PM

A slightly lower low for the OEX, so the bulls don't get their wishes. There's potential bullish price/RSI divergence on this slightly lower low so bears might not get theirs, either. The OEX might not drop to its 603.66 potential downside target. There's again vulnerability to that level, but we've had downside targets set and erased and now reset, so try to be open minded and not too trustful of your own technical tools.

Jeff Bailey : 6/18/2008 1:16:04 PM

VXO.X 23.74 +7.08% ...

Jeff Bailey : 6/18/2008 1:15:31 PM

Dow Diamonds (DIA) $120.38 -1.27% ... gets the trade at MONTHLY S2.

James Brown : 6/18/2008 1:15:36 PM

Automobile stocks are getting hammered...

Ford (F) ..................... -5%
General Motors (GM) ... -5.5%
AutoNation (AN) ......... -4.6%

-- Parts --
GoodYear Tire (GT) .... -4.8%
BorgWarner (BWA)...... -1.8%
Amer.Axle (AXL)........-6.88%

-Foreign makers -
Honda Motors (HMC) ... -0.5%
Toyota Motor (TM) .... -1.2%
Diamler AG (DAI) ...... -0.5%


Jeff Bailey : 6/18/2008 1:10:31 PM

USO $108.83 +0.13% ... inches green.

James Brown : 6/18/2008 1:08:46 PM

Solar energy stock First Solar Inc. (FSLR) could be setting up for a correction.

I am not brave enough to short or buy puts on FSLR given the stock's recent relative strength. However, I am seeing some signs of weakness and bearish divergences in the charts. I would not be surprised to see FSLR dip back toward its trendline of higher lows near the $250 region. chart: Link

Jeff Bailey : 6/18/2008 1:06:57 PM

Discosure: I currently hold long position in the TWM.

Jeff Bailey : 6/18/2008 1:06:28 PM

Swing trade long alert! ... for 1/4 position in the ProShares UltraShort Russell 2000 (TWM) at the offer of $71.14.

Stop goes $67.00.

Linda Piazza : 6/18/2008 1:06:25 PM

Potential support for the OEX is now 606.94 on 15-minute closes. For the SPX, it's 1336.93. This is light support, so I'm not certain that it will hold, but if it does and the indices bounce to a new high, we can start drawing trendlines for a possible rising channel in which these indices are climbing. That will give us a few more guidelines.

Jeff Bailey : 6/18/2008 1:03:56 PM

VIX.X 22.19 +5.01% ...

Jeff Bailey : 6/18/2008 1:03:41 PM

Swing trade call exit alert! ... the TSN-JC at the bid of $0.90.

TSN $13.45 -9.73% ...

Jeff Bailey : 6/18/2008 1:02:48 PM

Dow Breadth negative at 3:27

PFE $18.13 +2.31%, MRK $35.09 +1.21% and UTX $68.44 +0.04%

GM $14.99 -5.24%, AIG $31.31 -3.00%, BAC $28.39 -2.97

Linda Piazza : 6/18/2008 12:56:11 PM

OEX, SPX and Dow bulls would like to see the BIX steady at or above 186.29 on 15-minute closes and climb from there. The BIX is currently 187.34.

James Brown : 6/18/2008 12:56:09 PM

Yet another analyst firm has raised their price target on Apple Inc. (AAPL) . This morning Morgan Stanley raised their price target on AAPL to $210. MS believes that the new $199 price tag on the 3G iPhone could double iPhone sales in 2009.

Shares of AAPL are down 1.1% to $179.40. It looks like the rebound is AAPL is struggling under its new two-week trendline of lower highs.

Linda Piazza : 6/18/2008 12:52:59 PM

Bears don't want to see the A/D line above about -1120 and particularly don't want to see it sustaining values above -1050. Right now, the A/D line has dropped back after testing the lower of those two and is at -1485, but shows the potential for a little inverse H&S if it doesn't drop much further and rises through those levels.

Jeff Bailey : 6/18/2008 12:52:40 PM

DJUSHB 293.98 -0.03% ... has been either side of its WKLY pivot (291.90)

Jeff Bailey : 6/18/2008 12:51:27 PM

MBA Weekly Application Survey (table) that I track at this Link

DJUSHB quote taken within last 5 minutes.

Linda Piazza : 6/18/2008 12:51:02 PM

Bears should remember the possibility that the OEX and other indices are just widening the channels in which they're climbing. If that's true, then we'll likely see a higher low. But in any case, I'd again know how I was going to protect those profits as the previous low of the day is approached and as potential support near 606.70 is, too.

Jeff Bailey : 6/18/2008 12:48:00 PM

CAL $13.38 -4.76% ...

Jeff Bailey : 6/18/2008 12:47:46 PM

AMR $5.44 -4.56% ...

Jeff Bailey : 6/18/2008 12:47:12 PM

USO $108.21 -0.43% ... comes to mid-point of day's range.

Linda Piazza : 6/18/2008 12:45:22 PM

If I look at the OEX's 15-minute chart, I see one thing: 15-minute closes now below the 15-minute 9-ema, suggesting a downturn toward 606.50. If I look at the 30-minute one, I see something else, continued 30-minute closes above potential support now at 609. Which is right?

No telling. This is characteristic of summertime trading and choppy trading, and we've currently got both. If the OEX does turn down further, however, watch that potential support near 606.50.

Jeff Bailey : 6/18/2008 12:36:20 PM

Correction alert!: Tom my 09:55:22 post. S/A Purchases index fell 4.3%.

Jeff Bailey : 6/18/2008 12:25:09 PM

Most Actives ... QQQQ $48.19 -0.70%, FITB $10.89 -14.45%, LEH $24.29 -3.34%, SPY $134.57 -0.73%, C $20.33 -0.63%, WM $6.17 -0.80%, SIRI $2.42 -3.20%, CSCO $25.47 -1.92%, MSFT $28.66 -0.48%, INTC $22.37 -0.93%

James Brown : 6/18/2008 12:23:57 PM

After yesterday's action in Research In Motion (RIMM) it looked like shares were poised to correct lower following a run from $127 to almost $146 in three days. That changed after Lehman Brothers came out this morning with some positive comments and raised their price target on RIMM to $165.

RIMM is currently up 1.3% to $144.15. Our first target in RIMM was the $144 level.

Linda Piazza : 6/18/2008 12:22:01 PM

The OEX ended the previous 15-minute period just a little below its 15-minute 9-ema, with that now at about 609.50. I would characterize the OEX as ending that period at that potential support, since it wasn't violated by much, but it's certainly leaving us in as much doubt as possible. If it maintains that support, it could perhaps rise back up to test the higher potential resistance on 15-minute closes at 610.57. So, we've had a slight change in short-term tenor, but it's just a short-term change and a first--and perhaps wrong--signal of some slight improvement.

James Brown : 6/18/2008 12:17:55 PM

OI call play Peabody Energy (BTU) is up 3.2% to $81.50. If you haven't done any profit taking yet I would certainly consider it. It's probably time to raise our stop loss too. Our initial target was the $80 region. Our secondary target is $84.00.

Jeff Bailey : 6/18/2008 12:16:51 PM

12:00 Internals found at this Link

Linda Piazza : 6/18/2008 12:01:16 PM

The VIX did bounce fairly hard. It's at 21.85 as I type, but now below potential resistance at 21.97. It needs to sustain 15-minute closes beneath that and hopefully beneath 21.71 before bulls feel much comforted, though.

Jeff Bailey : 6/18/2008 11:59:56 AM

VXO.X 23.10 +4.19% ...

Linda Piazza : 6/18/2008 11:59:55 AM

The SPX tests potential resistance on 15-minute closes now at about 1345.25. Bulls would like to see a 15-minute close above that, but, barring that, sustained 15-minute closes above the turning-higher 9-ema, now at 1342.33. Bears, of course, want a steep rollover.

Jeff Bailey : 6/18/2008 11:59:15 AM

OEX $610.61 -0.52% ... comes back to heavy 610 put strike.

Option Montage at last night's close. OI as of Monday's close Link

Linda Piazza : 6/18/2008 11:58:42 AM

No confirmation of the bearish-wish scenario for the OEX. Instead, it's charging right up to the resistance I mentioned earlier, but now at 610.90 on 15-minute closes. Now bulls want a close above this Keltner zone or at least above the rounding-up 9-ema, now at 609.69. If so, the potential downside target below 604 is no longer a target.

Linda Piazza : 6/18/2008 11:57:05 AM

VIX dropping hard. Without a strong bounce in the VIX, this signals short-term trouble, at least, for equity bears.

Linda Piazza : 6/18/2008 11:56:33 AM

TRIN dropping to first support. It's now at 1.08, with potential support from 1.02-1.12. TRIN's level is more neutral now but it's trend (down) is short-term bullish for equities. Let's see what happens with this support, though, as it could bounce it again.

Jeff Bailey : 6/18/2008 11:55:36 AM

Citigroup (C) $20.47 +0.01% ... inches green.

Jeff Bailey : 6/18/2008 11:53:31 AM

JetBlue Airways (JBLU) $3.94 -3.66% ... Discount airliner said this morning that booking for July-August remain strong even as transcontinental fares jump this summer to $599 from $279.

Linda Piazza : 6/18/2008 11:52:32 AM

The TRIN is still in bearish (for equities) territory, but it's trending down. It may have support at about 1.13, if it should drop that far, and then again at 1.02. It's at 1.29 as I type.

Jeff Bailey : 6/18/2008 11:51:14 AM

AMR Corp. (AMR) $5.58 -2.10% ... Parent of American Airlines said this morning that it expects to record aircraft impairment and other charges from its previously announced capacity reductions, and sees Q2 mainline unit revenue rising between 6% and 7%. Company added that it has hedged about 33% of its projected fuel consumption for 2008.

Linda Piazza : 6/18/2008 11:47:56 AM

So far, the OEX bears got the first part of their wish, and nothing has changed in the tenor that has consisted of the 15-minute 9-ema serving as resistance on 15-minute closes. However, bears haven't yet gotten confirmation as that would require a drop to a new low. Instead, prices are consolidating near the 9-ema.

Jeff Bailey : 6/18/2008 11:44:21 AM

YRC Worldwide (YRCW) $17.81 +6.20% ... off highs of $19.13 and another test of 200-day SMA. Trucker reaffirmed Q2 outlook of $0.30 to $0.40 a share. Consensus $0.29 a share. Wachovia keeps "underperform" saying one quarter no confirmation of turnaround.

Linda Piazza : 6/18/2008 11:43:35 AM

The scenario that bulls would favor would be for the OEX to close above its 9-ema during this 15-minute period, with that now at about 609.40, and then to punch up toward next resistance on that chart at 611.27 before it pulled back. Then, they'd like for pullbacks to find support on a rounding-up 9-ema. The scenario that bears would like would be for the OEX to close below and hopefully, well below, the 9-ema and then turn down sharply and fall through the previous low of the day. Either seems possible at this point, so plan accordingly.

Linda Piazza : 6/18/2008 11:37:23 AM

The OEX's 15-minute 9-ema is now 609.30; the SPX's, 1341.81. Remember that these are potential resistance levels on 15-minute closes.

Jeff Bailey : 6/18/2008 11:36:51 AM

Nike Inc. (NKE) $68.37 +0.54% ...

Jeff Bailey : 6/18/2008 11:36:28 AM

CNBC reporting Tiger Woods to miss rest of golf season.

Jeff Bailey : 6/18/2008 11:34:08 AM

USO $107.72 -0.89% ...

UGA $63.05 -0.80% ...

Jeff Bailey : 6/18/2008 11:33:03 AM

USO Option Montage at this Link

IYS-RC $107 puts is heaviest.

Linda Piazza : 6/18/2008 11:26:28 AM

The TRAN is just off its high of the day, but it's still chopping around inside a rising channel (bear flag?) that began forming last week, so it's not giving us a lot of information. What it is giving us is very short-term. As long as the TRAN keeps gaining today and isn't pushed back, it's suggesting that other indices such as the OEX, SPX and Dow could steady and climb, too. So, with the TRAN currently at 5132.78, those who want the steadying in indices don't want to see the TRAN fall back too far, particularly below about 5100.

Linda Piazza : 6/18/2008 11:23:26 AM

It's the potential resistance on 30-minute closes at 608.70 that's keeping the OEX from advancing toward a test of its 15-minute 9-ema. This may be somewhat confusing but here's the deal. The 15-minute chart maintains that lower target, now at about 603.78, until and unless it maintains 15-minute closes above the 15-minute 9-ema, with that now at 609.44. However, that doesn't mean that 15-minute 9-ema is the only resistance around.

Jeff Bailey : 6/18/2008 11:19:09 AM

Sector Losers ... Money Center Banks -3.17%, Regional Banks -2.76%, Airlines -2.46%, N. Amer Telecom -1.86%, Semiconductors -1.82%, CBOE Oil -1.78%, Networking -1.65%

Jeff Bailey : 6/18/2008 11:17:03 AM

Sector Winners ... Dow Transports +0.85%, Pharmaceuticals +0.67%, Gold Bugs +0.09%

Jeff Bailey : 6/18/2008 11:15:04 AM

AMR $5.56 -2.45% ...

Jeff Bailey : 6/18/2008 11:14:49 AM

USO $107.75 -0.85% ...

Jeff Bailey : 6/18/2008 11:10:50 AM

A/D lines still bearish ... 664/2,261 and 666/1,997

Jeff Bailey : 6/18/2008 11:09:07 AM

USO $108.32 -0.33% ... session low may have been some retail stop hunting ($0.20 under round number) to $107.81.

Linda Piazza : 6/18/2008 11:08:44 AM

The OEX's 15-minute 9-ema is now at 609.57; the SPX's, 1342.40. Sustained 15-minute closes above those would erase the downside targets now in place.

Jeff Bailey : 6/18/2008 11:08:09 AM

Dow Diamonds (DIA) $120.61 -1.08% ... came close to MONTHLY S2 ($120.38).

Linda Piazza : 6/18/2008 11:03:13 AM

With a low of -1758, the A/D line is getting down to extreme levels. It needs to scramble back above about -1100 before there's really any improvement, however. It's currently -1665.

Linda Piazza : 6/18/2008 11:01:40 AM

The BIX has steadied over the last hour, so keep an eye on that. SPX and OEX bears don't want to see a strong bounce in the financials. Although the BKX produced a slightly lower low this 15-minute period, it's essentially been steadying, too, with 15-minute closes at or above 62.

Jeff Bailey : 6/18/2008 10:59:59 AM

OEX.X 606.66 -1.17% ... has undercut heavy OEY-RB open interest (8,045).

Linda Piazza : 6/18/2008 10:55:11 AM

TED spread now 0.90.

Linda Piazza : 6/18/2008 10:54:33 AM

The OEX's current downside target and potential support on 15-minute closes is 603.89; the SPX's, 1328.33. Those are again levels at which to have your bearish profit-protecting plans in place, if they're reached. There are no guarantees, especially if the OEX were to maintain 15-minute closes above its descending 9-ema at 610.01 and the SPX, its 9-ema at 1343.26. That action would erase the downside targets.

Jeff Bailey : 6/18/2008 10:53:44 AM

FedEx (FDX) $81.60 -3.29% ... Weak after earnings ... AP Story Link

Jeff Bailey : 6/18/2008 10:52:45 AM

Morgan Stanley (MS) $38.45 -5.27% ... Weak after earnings report.

Reuters Story Link

Linda Piazza : 6/18/2008 10:51:46 AM

VIX finally breaking higher, too, but again following rather than leading.

Linda Piazza : 6/18/2008 10:51:19 AM

The RVX, the Russell 2000's volatility index, has also broken to a new high of the day. It's at 25.17, with about 25.70 marking a descending trendline that's been resistance on 15-minute closes since 6/9.

Jeff Bailey : 6/18/2008 10:51:07 AM

CAL $13.65 -2.84% ...

Jeff Bailey : 6/18/2008 10:50:53 AM

AMR $5.47 -4.03% ...

Jeff Bailey : 6/18/2008 10:49:49 AM

US Oil Fund (USO) $107.91 -0.70% ... slips to low of the week.

Linda Piazza : 6/18/2008 10:49:09 AM

The VXO has been a bit more prophetic lately. It has broken to a new high.

Linda Piazza : 6/18/2008 10:48:28 AM

The VIX puzzles me the last few days. While equities are diving, it has not hit a new high of the day and is barely maintaining breakout status above Keltner resistance at 21.87. Yesterday was similar, as it eventually hit a new high but only after equities had been dropping for a while.

Linda Piazza : 6/18/2008 10:46:31 AM

A/D line still headed down.

Jeff Bailey : 6/18/2008 10:45:49 AM

Standard & Poors: Q1 S&P Stock Buyback Activity -3.23%.

Jeff Bailey : 6/18/2008 10:42:36 AM

NASDAQ a/d 801/1,801

Jeff Bailey : 6/18/2008 10:42:23 AM

NYSE a/d 743/2,144

Jeff Bailey : 6/18/2008 10:41:42 AM

US Oil Fund (USO) $108.86 +0.16% ... has been $109.64-$108.08 since report.

Linda Piazza : 6/18/2008 10:41:30 AM

The SPX's potential support on 30-minute closes is now 1339.56, and it's so far holding on 30-minute closes. The SPX just violated it a few minutes ago, but has now bounced up to 1339.37, so is essentially sitting on it with lots of time for anything to happen before this 30-minute period ends.

Jeff Bailey : 6/18/2008 10:40:26 AM

CAL $13.72 -2.34% ...

Jeff Bailey : 6/18/2008 10:40:10 AM

AMR $5.42 -4.91% ..

Linda Piazza : 6/18/2008 10:40:04 AM

TED spread 0.89.

Jeff Bailey : 6/18/2008 10:39:42 AM

EIA: US Distillate stockpiles up 2.6 M Bbl

Jeff Bailey : 6/18/2008 10:39:17 AM

EIA: Gasoline stockpiles down 1.2 M Bbl

Jeff Bailey : 6/18/2008 10:38:50 AM

EIA: Crude oil stockpiles fall by 1.2 M Bbl.

Jeff Bailey : 6/18/2008 10:38:17 AM

US Nat. Gas Fund (UNG) $61.85 +1.36% ...

Linda Piazza : 6/18/2008 10:38:00 AM

New low on the A/D line confirms new low on indices such as the OEX. However, short-term charts such as the 5-minute ones are beginning to show some bullish value/RSI divergence on the A/D line, and I pay attention when I see that. It's an early sign and it's not always indicative of a bounce either in the A/D line or the equities, but it's certainly something that should be kept on the radar screen as it is sometimes followed by a bounce. The A/D line is currently -1365.

Jeff Bailey : 6/18/2008 10:37:53 AM

US Gasoline Fund (UGA) $63.57 +0.01% ...

Jeff Bailey : 6/18/2008 10:37:20 AM

FXY $92.35 -0.04% ...

Jeff Bailey : 6/18/2008 10:37:05 AM

FXE $155.30 -0.05% ...

Jeff Bailey : 6/18/2008 10:36:45 AM

US Oil Fund (USO) $108.96 +0.25% ...

Linda Piazza : 6/18/2008 10:35:39 AM

The OEX closed the last 30-minute period at the potential Keltner support on 30-minute closes at 608.88, but it's now dipping just below that. It's the close of this period that will matter on a Keltner basis, but not on your account basis, of course. The 15-minute chart has a downside target now in place of 603.94. Bulls should factor in vulnerability to that level in their trading plans, but bears should not count on it hitting it so strongly that they ignore their own profit-protecting plans. Don't let a profit turn into a loss if the OEX bounces and you hold on, believing that it has to drop to that target. It doesn't have to do anything.

Jeff Bailey : 6/18/2008 10:35:07 AM

Most Actives ... QQQQ $48.09 -0.92%, FITB $10.77 -15.39%, SPY $134.35 -0.89%, SIRI $2.45 -2.00%, MSFT $28.60 -0.72%, HBAN $5.19 -14.91%, INTC $22.35 -1.01%, CSCO $25.54 -1.65%, AAPL $180.59 -0.46%, XLF $22.39 -2.26%

Jeff Bailey : 6/18/2008 10:32:13 AM

VXO.X 23.47 +5.86% ... takes a look above its WKLY Pivot.

Jeff Bailey : 6/18/2008 10:31:22 AM

Dow Diamonds (DIA) $120.88 -0.86% ... Probes Wed/Thursday lows.

Linda Piazza : 6/18/2008 10:30:49 AM

Remember crude inventories come in a moment. That can change the behavior of the TRAN, certainly.

Linda Piazza : 6/18/2008 10:30:26 AM

Those who want the markets to steady want to see the A/D line above -1100 and to see it stay there. It's -1325 as I type.

Jeff Bailey : 6/18/2008 10:30:25 AM

September min-Corn (yc08u) went out at 756 1/2 yesterday.

Linda Piazza : 6/18/2008 10:29:06 AM

The TED spread, a measure of default risk, is up today. It's 0.88 as I type, up 0.045 or 5.414%. I've seen it over the last 10 days or so chop around between about 0.77 and 0.88, so, although it's in the high end of the range, it's not yet alarming. Well, unless you figure in that the old range for the TED spread, before all these issues with financials surfaced, was 0.10-0.50. I would be worried if the TED spread got too near 1.00, however, as it has recently tested support from a descending channel that began forming after last August's 2.5-ish peak and is now rising from that test. A move up through 1.00 would signal something more than chopping around here near the bottom of its range for the last ten months.

Jeff Bailey : 6/18/2008 10:28:50 AM

Tyson (TSN) $13.33 -10.53% ... weak after rating agency Fitch downgraded the company's unsecured debt to "BB+," the highest "junk" rating, from "BBB-," the lowest investment-grade rating. Fitch cited higher grain prices and length of time to pass on the costs for the downgrade.

Jeff Bailey : 6/18/2008 10:22:14 AM

10:00 Internals found at this Link

Linda Piazza : 6/18/2008 10:21:28 AM

Similar story on the SPX: the SPX is so far holding support at 1339.61 on 30-minute closes. A bounce attempt could get started and wouldn't surprise me if it did. However, the 15-minute chart suggests that until and unless it can maintain 15-minute closes above 1347.10-1348.10, it's got a potential downside target of 1328.50. So, I would watch for the bounce potential and then watch for rollover potential at 1347-1348.10. Factor in vulnerability to 1328.50 in your trading plans, but don't count on it being hit as any rollover might again find support at the 30-minute support level.

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

So far, that support on the 30-minute charts is holding up, but the 15-minute chart tells this story for the OEX: until and unless it can scramble back above the 15-minute 9-ema now at about 612.53, it's got a potential downside target at 604. So, bulls need to factor in vulnerability to that level while bears should not count on it being a probability that it will be hit, not as long as that support on 30-minute closes is still holding. I don't know what the outcome of this will be, but I suspect we'll see a bounce attempt soon, and I would be wary of rollover potential in the 611.70-612.50 zone.

Linda Piazza : 6/18/2008 10:11:49 AM

So far, the OEX potential support on 30-minute closes at 608.89 is holding up, but only tentatively so far. For the SPX, that's at 1339.63.

Jane Fox : 6/18/2008 10:09:08 AM

The DOW and S&P futures are the two markets that have not broken through their overnight lows. Link

Linda Piazza : 6/18/2008 10:06:25 AM

We have the TRAN trying to hold up and the BIX diving, so it's a battle as to what's going to happen next in the markets. The VIX is attempting a breakout above resistance but it sometimes overruns Keltner levels just a bit and its supposed breakout isn't significant yet. The TRIN is definitely in the bearish realm but having some difficulty with resistance near 1.4, too, and so perhaps subject to a pullback.

Jeff Bailey : 6/18/2008 10:04:15 AM

Tyson Foods (TSN) $13.51 -9.32% ... getting "plucked."

Linda Piazza : 6/18/2008 10:04:02 AM

The TRAN is still holding up fairly well, signaling that bears should still keep those profit-protecting plans updated. The TRAN is curently 5087.89, having sprung up from its 5059.33 low of the day.

Jeff Bailey : 6/18/2008 10:03:03 AM

Columbus-based Huntington Bancshares (BHAN) $5.45 -10.98%, KeyCorp. (KEY) $11.00 -3.50% and National City (NCC) $4.73 -1.04%, both Cleveland-based, have done the same in recent months.

Linda Piazza : 6/18/2008 10:02:55 AM

A/D line currently -1413.

Linda Piazza : 6/18/2008 10:02:41 AM

The A/D line is at a new low of the day, well below its breakout level on the 15-minute chart. Meanwhile, the OEX has been driven back to its target and potential support on the 30-minute chart, now at 608.83, with the OEX at 609.14 as I type. This support is holding on the first 30-minute close, but the OEX didn't hold too far above it. Bulls or just those hoping for a steadying need to see the A/D line improve.

Linda Piazza : 6/18/2008 9:58:16 AM

Last night, CNBC Europe was talking a lot about Fortis, termed "Belgium's biggest financial services company" in a Bloomberg article. It's going to sell its stake in ABN Amro Teda Fund Management Co. due to the drag the company has had on Fortis' finances and also because of a China deal it wants to do.

Jeff Bailey : 6/18/2008 9:59:40 AM

Fifth Third Bancorp (FITB) $10.77 -15.39% ... #2 most active. Ohio-based bank said it will raise $2 billion in capital and cut quarterly dividend to $0.15 from $0.44 a share.

Jeff Bailey : 6/18/2008 9:56:15 AM

Dow Jones Home Construction 293.70 -0.12% ...

Jeff Bailey : 6/18/2008 9:55:22 AM

MBA's Weekly Application Survey Link ... Refinances down, purchases up.

Jeff Bailey : 6/18/2008 9:53:24 AM

BIX.X really getting hit ... 185.26 -3.44%

Linda Piazza : 6/18/2008 9:53:07 AM

The TRAN hit its downside target on the 30-minute chart, or very nearly did, with that target now at 5052.50, and has bounced strongly. It's at 5110.36, about to hit its 30-minute 9-ema at 5124.70. Keep the TRAN on your radar screen because the OEX and SPX don't usually go too far one direction if the TRAN is going the opposite. That old relationship has diverged a bit as the SPX and OEX got hit with weakness in financials, but it's still a useful indicator as long as you view it as just that, one indicator among many.

Linda Piazza : 6/18/2008 9:48:19 AM

The A/D line has bounced and will likely hold the support now at about -1100 into the first 15-minute close. That's a good thing for those hoping to see markets steady, but remember that other than on drop-and-pop type days, it often first bounces and then comes down and retests (sometimes while equities make lower lows) before a real bounce gets going, if one does. So far, so good for those hoping for a steadying, and bears should keep their profit-protecting plans in front of them, but a sustained bounce is far from a given yet. It's a possibility only.

Jeff Bailey : 6/18/2008 9:46:35 AM

Panera boosts Q2 guidance, trims year view ... AP Story Link

Panere Bread (PNRA) $48.63 +6.73% Link ...

Linda Piazza : 6/18/2008 9:45:37 AM

The VIX hit potential resistance at 21.87 on 15-minute closes and has turned back from that. Equity bulls want a sharper pullback now. Here's a chart: Link

Linda Piazza : 6/18/2008 9:43:02 AM

A bounce begins as the A/D line bounces, but bulls will need to see the OEX maintain 30-minute closes above its 30-minute 9-ema now at 614.54 before there's any change in tenor from yesterday.

For the SPX, that's at 1352.95.

Linda Piazza : 6/18/2008 9:41:45 AM

Keltner outlook on the A/D line: the A/D line dropped straight to its downside target at about -1100, dropping a little through it. This is another reason for bears to be careful and protective of profits, just in case. This is a Keltner channel line that often proves supportive on anything other than breakdown days. Often, however, there needs to be a bounce and then a retest with bullish value/RSI divergence before a real bounce gets going, if it's going to do so. For now, equity bears want the A/D line to drop harder and then find resistance at about -1100 while bulls want it to bounce hard from that support or at least hold it. The A/D line is bouncing as I type and is at -1036, above that support line, but it's still early in the day.

Linda Piazza : 6/18/2008 9:36:46 AM

Similarly, the SPX is diving straight toward its target on the 30-minute chart, now driven to 1339.52. This is also potential support on 30-minute closes, so bears need to be protective of their profits until we see how things sort out.

Linda Piazza : 6/18/2008 9:35:42 AM

As expected, the OEX is crashing right through the potential support on 15-minute closes that it ended near yesterday evening. It's diving straight to the target on the 30-minute chart, now driven down to 608.90. Remember that's potential support on a 30-minute close, which means that if it's pierced during the first 30-minute period but then that period closes above it, the support has held. Bears need to be protective of profits now while we watch the setups.

Linda Piazza : 6/18/2008 9:34:05 AM

All I see on the roster today is the crude inventories at 10:35 am ET, but that of course could be a biggee with futures expiration this week and with the TRAN obviously under pressure today for other reasons, too.

Linda Piazza : 6/18/2008 9:18:43 AM

I see that Keene isn't going to be on the Market Monitor today. I wanted to note that the SPX has potential support on 15-minute closes at 1349.94, support that's likely to fail at the open. If that happens and there's not a quick bounce, the 30-minute chart suggests a potential target of 1340.22, a target that will be driven a bit lower if prices drive lower at the open. That Keltner level is often support on 30-minute closes, too, so bears should be watchful for potential support to kick in there, if it's tested.

If that level fails, Keltner charts suggest next targets at 1323.70-1329.

Linda Piazza : 6/18/2008 9:15:49 AM

So, futures are obviously way below fair values this morning. If we use the SPX's distance from fair values as a sort of guide, and are aware that the cash market doesn't always behave in accordance with action in the futures, we can extrapolate where the OEX might go. And where it might go is right down to potential support on 30-minute closes at 609.22.

That requires that it lose the support at 613.30 on 15-minute closes, but that might happen right away, of course. So, I would counsel bears to have profit-protecting plans in place for a test of the 608-609 zone, as that could be strong support. I counseled them yesterday to have those plans in place for 612-613, too, and that's because the weekly 200-sma is at 612.53, and I wouldn't be surprised for that to hold as support on weekly closes. That's not a given, of course, but certainly a possibility.

If that 608-609 support is lost on 30-minute closes, the Keltner channels suggest that 602-604 is the next support. We'll see what happens after the open.

Linda Piazza : 6/18/2008 9:09:28 AM

Although I had warned bulls Monday that the OEX was printing a potential reversal signal on its daily chart, yesterday I remained skeptical that it would hit the downside target predicted by the 15-minute Keltner channels. It of course did hit that target, or nearly so. By the close yesterday, that target had moved up to 613.30 and that was potential support on 15-minute closes.

I was skeptical for several reasons. First, I'm watching to see if we could possibly be setting up some kind of trading range for the summer, perhaps between about 608-635 or so. I don't know that's going to happen, but such a range prior to a breakout later in the summer or early this fall might be a possibility, so I'm watching to see if that plays out. My overall view is that the eventual breakout will likely be to the downside because I'm a still-needs-to-retester.

If there is a choppy zone set up this summer, our technical tools will be less trustworthy in a choppy, light-volume environment. Then, this is opex week, and you know by now not to put too much trust in the setups you're seeing in opex week.

Adding to those was the fact that the USDJPY held up relatively well. It's not making any more forward progress, but what it is doing is consolidating sideways along the 200-sma and just above the 200-ema. It's there this morning, right at the 200-sma at about 108.15 as I type. That relatively bullish behavior so far in the USDJPY is not usually supportive of strong retreats in U.S. indices. In addition, for a while as indices such as the SPX and OEX were printing lower lows, the VIX was not printing higher highs.

So, there was some reason for a little wariness about believing in downside targets. But that one was hit. I'll continue in the next post for readability reasons.

Jane Fox : 6/18/2008 9:00:50 AM

Who let the bears out?

There was no economic news to drive the overnight markets yet they have all broken their previous day lows. Link

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