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Jeff Bailey : 6/25/2008 11:55:53 PM

Closing Internals found at this Link

Keene Little : 6/25/2008 11:26:03 PM

Thursday's pivot tables: Link and Link

Wednesday had the major indices finishing near the middle of the day's trading range and left us guessing where to next. SPX is still within its small parallel up-channel from Tuesday's low and looks like a bear flag (with corrective price action inside--3-wave moves and overlapping highs and lows). This makes it look like a bear flag but whether it breaks down from here (dark red) or after chopping a little higher first (pink) is the question. 60-min chart: Link

SPX needs to get back above 1353 in order to negate the bearish price pattern that it's in. The DOW has a very similar setup. If it drops immediately on Thursday and breaks below 11700 it becomes potentially very bearish. But if the bounce off Tuesday's low can achieve two equal legs up with a rally on Thursday then the upside target is at 11970. This is very close to both the downtrend line from May and the broken shallow uptrend line from January. It's of course also near round number resistance at 12K. That would tough resistance. 60-min chart: Link

Two things to note on the DOW 30-min chart, Link : one, it broke above a downtrend line from June 17th early Wednesday morning and then used that line for support for the rest of the day and then closed on it; two, if the DOW does achieve two equal legs up at 11970 it's the same location as the 30-min 100-period moving average (the 30-min 100 and 130-pma's often identify support and resistance). A bounce on Thursday to the 11970 could make for a very nice short play setup.

But one warning for the bulls--the ISEE call/put data showed a close of 161 today (meaning a LOT of call buying going on). Anything over 150 is a sign that too many are betting on the upside and it's a heads up that we could be setting up for a stronger selloff. I had originally posted this as just the opposite (in case you saw this post shortly after 10:00 PM) but then realized my error. A high number here is just the opposite of a high number when dealing with a put/call ratio that is typically reported. However, the previous high ISEE call/put readings in April and May resulted only in a day or two pullback before proceeding higher again.

OI Technical Staff : 6/25/2008 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The Market Monitor has been archived.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.

James Brown : 6/25/2008 4:11:36 PM

RIMM... down $12.60 in after hours following earnings

James Brown : 6/25/2008 4:09:09 PM

RIMM... revenues $2.273 billion...

RIMM... down $9.00 after hours

James Brown : 6/25/2008 4:08:40 PM

RIMM... earnings.. 84 cents versus estimates of 85 cents... stock plunging...

James Brown : 6/25/2008 4:05:00 PM

ORCL revenues... $7.2 billion, better than expected

James Brown : 6/25/2008 4:04:30 PM

Oracle earnings ... 47 cents non-GAAP, estimates were at 44 cents/share.

Keene Little : 6/25/2008 4:03:09 PM

With SPX holding its uptrend line into the close, there remains the possibility for a continuation higher in a bull flag as shown on the updated 60-min chart (in pink): Link

If the market continues to sell off tomorrow, especially if it breaks below yesterday afternoon's low (1312), the pattern becomes potentially much more bearish (dark red).

Linda Piazza : 6/25/2008 3:56:27 PM

The OEX now tests the rising trendline off Tuesday's high, another possible support level. It could end the day with a long upper shadow and a small body, another candle indicative of indecision, the third in a row. That indecision occurs after punching up to test the 10-sma and other resistance gathered overhead, so the picture is mixed. There's no change in long-term tenor from the point May 20 when it first closed below that 10-sma, so we can't conclude anything other than that the OEX has spent another day in its typical 2-5 day pattern of consolidation before determining a next direction. Sorry, wish it were different and there were more to say.

Linda Piazza : 6/25/2008 3:53:36 PM

What happens tonight and tomorrow that could impact your trade? Tonight's RIMM report is one, with Nike and Oracle also reporting after the close. Tomorrow morning's Final GDP and unemployment figures at 8:30 is another. Soon after the market open, we'll get existing home sales and that's a biggee, too. Homebuilder Lennar reports tomorrow morning, too.

Keene Little : 6/25/2008 3:43:32 PM

Because we do not have a clean ending pattern to the upside from yesterday's low it's hard to declare a top is in for the bounce. We might be in the middle of a larger upward correction. In light of that, if you're short keep in mind that it's not uncommon to see a reversal the following day of the post-FOMC afternoon move. So if this afternoon ends down it could be a bear trap. Protect profits if you have them and don't make any assumptions about tomorrow.

Jeff Bailey : 6/25/2008 3:43:14 PM

FTSE/Xinhua China 25 (FXI) $135.99 +1.97%

Jeff Bailey : 6/25/2008 3:41:04 PM

PetroChina (PTR) $134.99 +2.44% ...

Jeff Bailey : 6/25/2008 3:39:56 PM

HSBC Holdings (HBC) $79.60 +0.68% ... begins to backfill this morning's up gap.

Keene Little : 6/25/2008 3:39:24 PM

Sorry, SPX 1321 is its uptrend line from yesterday.

Jeff Bailey : 6/25/2008 3:38:34 PM

Washington Mutual (WM) $5.52 -4.82% ... edges to a new 52-weeker.

Keene Little : 6/25/2008 3:37:55 PM

SPX is now nearing its uptrend line from yesterday morning, currently near 1323.

Jeff Bailey : 6/25/2008 3:37:49 PM

BIX.X 185.33 -0.18% ... slips red.

Linda Piazza : 6/25/2008 3:36:55 PM

The BIX is still dropping, having dropped below yesterday's afternoon swing high. The pattern is no longer part of a recognizable bullish pattern, but there's now potential support at 184.71. If the BIX steadies near 184.10-184.71 and then rises, bulls must now be watchful of rollover potential near 188.50-191. It's not a given that the BIX will steady or that, if it then bounces, it would roll over, but these are levels that can be used to watch.

Linda Piazza : 6/25/2008 3:30:47 PM

The OEX is again testing its 30-minute 9-ema, now at about 603.67 with the OEX having pierced it this 30-minute period and now at 603.34. No answer yet, unfortunately. Just lots of jumping around between this support (on 30-minute closes) and the resistance now from 605.61-606.16 (on 30-minute closes.

Keene Little : 6/25/2008 3:29:51 PM

We're seeing stops hit on both sides as it does its usual whipsawwing around post FOMC. There looks to be more volume on the sell side so that's a bearish sign.

Jeff Bailey : 6/25/2008 3:27:40 PM

Citigroup (C) $19.00 +0.79% ... backfills this morning's gap higher.

Linda Piazza : 6/25/2008 3:21:28 PM

Hmm. The BIX is still dropping post announcement. It's dropping into that support zone I mentioned earlier, testing yesterday's swing high as well as the 38.2% retracement of the bounce off Tuesday's low. There's support of various forms from about 187.50-188.50, and the BIX is now 188.20, so OEX, SPX and Dow bulls would like to see it steady and bounce now.

Keene Little : 6/25/2008 3:18:18 PM

It looks like a spiky 3-wave pullback post-FOMC and now the leg up from this afternoon's low needs a minor new high to complete a small 5-wave move. Guard profits on a long play after that. Watch for the possibility for gap closure at the June 19th close--SPX 1342.46 (ES 1341.50) and then at least a pullback from there (assuming it gets there this afternoon).

Keene Little : 6/25/2008 3:18:08 PM

It looks like a spiky 3-wave pullback post-FOMC and now the leg up from this afternoon's low needs a minor new high to complete a small 5-wave move. Guard profits on a long play after that. Watch for the possibility for gap closure at the June 19th close--SPX 1342.46 (ES 1341.50) and then at least a pullback from there (assuming it gets there this afternoon).

Linda Piazza : 6/25/2008 3:04:42 PM

The SPX faces potential resistance up to 1334.29 on 30-minute closes with the 50% retracement of the slide off the 6/17 high at just under 1335.60. See my 3:03:30 post on the OEX for pointers on how to treat this and what you want to see if in bullish positions.

Linda Piazza : 6/25/2008 3:03:30 PM

The OEX still tests that resistance on 30-minute cloes up to 605.93 with the 50% retracement of the slide off the 6/17 high at 606.62. No resolution yet, but it's doing well so far. Bulls just need to maintain their profit-protecting plans and keep them updated. You need a push above that 50% level with sustained 30-minute closes above the Keltner level.

Keene Little : 6/25/2008 2:58:31 PM

Some of the big techs are making new daily highs so that's potentially bullish for the broader market. But watching the volume on the futures I'm not seeing expanding volume on the rally attempts and that would keep me cautious about buying the market this afternoon. Let this play out and pick a direction and then hop aboard.

Linda Piazza : 6/25/2008 2:52:45 PM

Another test this 15-minute period of the potential support now near 601.96-692.52. It wasn't pierced but just tested and the OEX has jumped up again. So far, though, it's also being knocked back soundly from the resistance showing up on the 30-minute chart, that at 605.88-606.59 on 30-minute closes, so there's not a resolution to the bulls vs. bears tug of war. If you're not a Keltner person, then the chop is mostly taking place between the 50% retracement of the slide off the 6/17 high and the 38.2% retracement.

Keene Little : 6/25/2008 2:51:19 PM

No clear winner yet. One side is waiting for the other to blink first.

James Brown : 6/25/2008 2:41:18 PM

Alpha Natural Resources (ANR) is bouncing back sharply from its intraday lows of $87.52. The stock is currently down 15 cents at $92.50.

James Brown : 6/25/2008 2:40:32 PM

AMGN continues to extend its gains. The stock is up another 1.7%. The July $45 calls were part of our strangle play. Keep an eye on them.

Linda Piazza : 6/25/2008 2:38:34 PM

Here's the OEX test of potential support near 603.20 now on 30-minute closes, near 602 on 15-minute ones. So, that leaves way for the OEX to drop down and test the 601-602 level, with bulls hoping that it finds support and bounces above 602-602.24 by the close of the 15-minute period and then rising from there to close the 30-minute period above 603.20-603.65. The punch down a few minutes ago may have been all that was needed to accomplish that test, but we're just not sure yet in this post-decision climate and as the OEX rises again to test resistance in the 605.85-606.60-ish zone. OEX at 605.02.

Tab Gilles : 6/25/2008 2:38:11 PM

Weekly EIA Report: Link

James Brown : 6/25/2008 2:37:55 PM

OI put play: Deere Co (DE) has broken down under the $75.00 level. More conservative traders may want to do some profit taking here under $74.00.

Keene Little : 6/25/2008 2:33:57 PM

With the quick drop here, another rally back to a daily high would have the potential to keep going as the shorts start to cover more aggressively. Therefore use a new daily high for your stop if short and possibly a long entry if you want to try the long side.

Linda Piazza : 6/25/2008 2:27:03 PM

The TRAN has not yet pushed back toward its day's high, a high that retested the former supporting trendline from the 6/13 low, a trendline that it gapped below yesterday morning. OEX, Dow and SPX bulls would like to see it climb again and scramble back inside that channel by producing sustained 15-minute closes above 5111.40, to avoid any hint of a kiss-goodbye reaction going on. If it instead retreats further, they'd like to see it at least find support near 5030, the site of a new rising trendline off yesterday morning's low. If that fails, it may retest the 4990 zone. As I type, it's 5064.89.

Keene Little : 6/25/2008 2:22:45 PM

So far SPX has achieved its target zone of 1331-1333 so a failure from here would be bearish. But again, the flip side of the pattern is very bullish so don't be looking for a top if it gets above 1333.

Linda Piazza : 6/25/2008 2:22:06 PM

The A/D line is bouncing again and testing the previous 1507 high of the day, with the A/D line now at 1488. It needs to stay near the high or press up toward the next target at 1867.48 to most please bulls, but if it pulls back instead, they want it to find support on 30-minute closes near 1150. Note: Just pressed to a new high of the day as I typed, and is now 1519.

Keene Little : 6/25/2008 2:20:17 PM

No surprises out of the Fed so a relief rally is quite possible from here. But so far it's still doing the FOMC cha-cha-cha. We're waiting to see if it will be the bulls or the bears who fall down.

Linda Piazza : 6/25/2008 2:20:10 PM

TRIN 0.70, with its number and its downturn both supporting bulls. For now. I'm suspect of anything happening immediately post-decision.

Jeff Bailey : 6/25/2008 2:19:18 PM

SHY $82.38 -0.14%, IEI $105.58 -0.17%, IEF $86.61 -0.48%, TLH $103.26 -0.44%, TLT $90.20 -0.43%

Jeff Bailey : 6/25/2008 2:18:14 PM

HYG $94.53 -0.27% ...

Jeff Bailey : 6/25/2008 2:18:02 PM

LQD $101.00 -0.61% ...

Jeff Bailey : 6/25/2008 2:17:49 PM

MUB $98.30 -0.20% ...

Jeff Bailey : 6/25/2008 2:17:32 PM

GSG $72.08 -1.20% ...

Jeff Bailey : 6/25/2008 2:17:02 PM

GLD $87.05 -0.48% ... ~870.50 spot

Linda Piazza : 6/25/2008 2:16:32 PM

Remember that we get all kinds of reactions to the FOMC decision. Occasionally the early reaction will be the right one, but more often there's a bunch of jumping around while market participants try to sort out the implications of the decision as well as the accompanying statement. Be careful with your decisions and the risk you're taking on.

Linda Piazza : 6/25/2008 2:15:28 PM

The OEX is charging straight up to that potential Keltner resistance configuration that it faced earlier today, with that now near 605.65-606 and with the 50% retracement of the slide off the 6/17 high at just over 606.60. Already, we're seeing the OEX pull back a little from that initial test, and bulls want this pullback to continue finding support on 30-minute closes at the 30-minute 9-ema now at 603.29 or at least near 601.80.

Jeff Bailey : 6/25/2008 2:15:18 PM

UNG $60.65 -2.00% ...

Jeff Bailey : 6/25/2008 2:15:05 PM

UGA $63.50 -1.96% ...

Jeff Bailey : 6/25/2008 2:14:43 PM

USO $109.14 -1.63% ...

James Brown : 6/25/2008 2:14:32 PM

Most of the homebuilders have a similar, sideways pattern but there are a few of them that look more like they have a double-bottom forming...

Jeff Bailey : 6/25/2008 2:14:16 PM

FXB $197.22 -0.18% ...

Jeff Bailey : 6/25/2008 2:14:03 PM

FXY $92.02 -0.56% ...

Jeff Bailey : 6/25/2008 2:13:50 PM

FXE $155.89 -0.08% ....

Jeff Bailey : 6/25/2008 2:13:28 PM

$TYX.X 4.682% ...

Jeff Bailey : 6/25/2008 2:13:10 PM

$FVX.X 3.644%

Jeff Bailey : 6/25/2008 2:12:52 PM

RUT.X 715.63 +1.08% ...

Jeff Bailey : 6/25/2008 2:12:37 PM

SPX 1,326.66 +0.94% ...

James Brown : 6/25/2008 2:14:01 PM

Fed decision on interest rates... UNCHANGED

left at 2.00%

vote was 9-1. The 1 wanted to raise rates.

Jeff Bailey : 6/25/2008 2:12:09 PM

02:00 Internals found at this Link

James Brown : 6/25/2008 2:09:06 PM

Homebuilders are one of the best performers today... the DJUSHB is up 2.6% and testing the top of its two week trading range...

Keene Little : 6/25/2008 2:08:01 PM

As for important levels to watch, a break below yesterday afternoon's low (SPX 1312) would be bearish and a rally above 1333 that holds (maybe a quick pullback test of 1330) would be bullish. Watch the chop in between (which is a pretty wide range).

Keene Little : 6/25/2008 2:01:08 PM

With the sideways/down correction since this morning's high it looks like a bull flag. This has the potential to be very bullish following FOMC. The move up from yesterday morning could be counted as a 1-2, 1-2 wave count to the upside which would mean get ready for a blast off in a 3rd of a 3rd wave kind of move. I'm trying to decipher the pattern with short term charts which is subject to lots of errors, especially with short term influences like the FOMC announcement coming up.

The bottom line as we near the announcement is that there is no clear setup as I had hoped there would be. So I can't recommend a play either way, certainly not a big play. I do see the possibility for some wild swings both ways before setting a direction (which often does not show itself until the following day). I think the potential is for a big move so perhaps a small straddle or strangle position and may the best side win big.

Linda Piazza : 6/25/2008 1:59:33 PM

The BIX's high yesterday was 188.25. After punching higher this morning, it's been dropping since the 10:45 15-minute candle and is at 189.98 as I type. It's still above yesterday's swing high, however, as well as still above the 38.2% retracement of the rally off Tuesday's low. That 38.2% retracement is at just under 188.50. There's potential Kelnter support on 15-minute closes at 188.61, too. The candles retreating from today's high are so far small-bodied ones. So far, then, this looks just like a regular retreat through a forming rising price channel that would likely be resolved with a bounce attempt, but that could change fairly quickly in a few minutes. I just wanted to point out what's showing up so far. My daily charts still show a lower potential downside target, now at first 176.45 and then at 168.97, but a daily close above about 190.50 would question that target's validity.

Linda Piazza : 6/25/2008 1:46:02 PM

The SPX has potential support on 15-minute closes that layers down to 1322.66, but the SPX is struggling with resistance from Keltner benchmarks that the OEX has already firmed up as support. Of course, these two can't diverge too far in their behavior although we often see one a little stronger or weaker than the other. If I look just as the SPX, a decline looks as likely as a climb.

Linda Piazza : 6/25/2008 1:43:44 PM

A lot of potential support on 15-minute closes converges beneath the OEX, from 601.52-602.76. Firm or not, it won't hold off a post-FOMC disappointment or even a get-me-out-before-the-decision retreat by bulls, of course, but for now, it looks relatively strong. If looks count, I'd say it's likely to hold on the current test. We've entered what's typically a stop-running time of day in the best of days, so it's iffy counting on any setups.

Linda Piazza : 6/25/2008 1:36:21 PM

TRIN is 0.78.

Linda Piazza : 6/25/2008 1:29:40 PM

As you've read, I'm worried about the rise in the TED spread, but wondering if it's somehow related to what's going on with the impending FOMC decision, not having previously watched it as we approach such a decision. In my research this morning, I found interesting comments in the response to an article written by Paul Krugman in the NYT. One reponse by "Nick" notes that "Interpreting interbank spreads (TED, BOR/OIS, etc.) over bank earnings season requires considerable finesse. It is comparable to interpreting the implications of high overnight equity option implied volatility the day before corporations put out earnings."

I hadn't thought about the implications of bank earnings season. Of course, we've had some financials report and others due to report in July. I think WFC reports July 7, for example. I don't know "Nick" and don't know whether he's an expert, but it's something to consider.

James Brown : 6/25/2008 1:24:55 PM

Trading Idea: SID ... nimble traders may want to check out Brazilian steel producer SID. The stock has been testing technical support at its 100-dma for the last three days and it's finally bouncing.

Linda Piazza : 6/25/2008 1:16:47 PM

Everything is on hold now, as Keene said earlier. It's possible that some will start making last-minute decisions pre-FOMC announcement, so we could see either bulls bailing because prices couldn't push higher enough or bears bailing because they didn't drop low enough, but that kind of thing isn't likely to show up yet on our charts. The A/D line is still moving sideways near the day's high, still supporting the upside case, but TRIN is staying relatively near its day's high, too.

James Brown : 6/25/2008 1:10:13 PM

Crude oil may be down sharply but the USO oil ETF has only fallen to the bottom of its current trading range. Here's a chart: Link

James Brown : 6/25/2008 1:04:45 PM

A few minutes ago CNBC was talking about the declines in the coal sector.

I've been talking about a possible top forming in this sector since June 19th.

The group is getting hammered hard again today...

ANR ... -4.3%, breaking under the $90.00 level but trying to bounce near its 20 or 21-dma.

BTU... -5.2%... hit its trendline of higher highs yesterday and is reversing sharply back to the $80 level (low was $80.01 today).

ACI... -5.7% and breaking round-number support at $70.00.

FDG...-5.9% and testing its 10-dma... been trading sideways for three days

JRCC...-8.7%.. reversed yesterday and is slipping under its 10-dma and the $55.00 level of very short-term support.

CNX...-4.7%... looks like a continuation of the June 19th reversal.

MEE ... -5.7%... sliding under the 10-dma..

PCX...-4.7%... now down 5 days in a row and under the $140 level.

ARLP...-4.9%... slipping under round-number support/resistance at $55.00 and its 10-dma

WLT...-2.7%... holding up better that most of the sector... still has a bearish divergence between price and the MACD.

Linda Piazza : 6/25/2008 1:05:45 PM

I've been looking at the OEX's daily chart. What would happen, for example, if the reaction to the FOMC decision drove it all the way down to test yesterday's low and the day ended there? That would leave a candle with a long upper shadow (about 7.5 points-worth of a shadow) and a smaller real body. That kind of candle, as long as the close wasn't much below yesterday's, can also be a consolidation or potential-reversal type candle. That real body, however, would close beneath 593-594 support, so that would be troublesome, so the result would have to weigh slightly on the bearish side, but still leaving room for a potential reversal.

What happens if there's a reversal down toward yesterday's low but a bounce back toward the opening value today, maybe closing around 592-594? That would definitely leave a potential reversal-type candle, although such candles of course aren't proof that reversal will happen. It may be instead that the OEX is just consolidating for 2-5 days before resuming the prior movement. Still, although the action would feel terrible when it was occurring, if that's all that occurs and if there's that bounce, nothing different would have been decided than has been the last few days.

I don't know what will happen. I'm just working through possibilities. You should be, too.

James Brown : 6/25/2008 12:58:29 PM

I mixed my comments on fertilizer stocks and coal stocks...

Linda Piazza : 6/25/2008 12:57:40 PM

As I mentioned in my 12:19:08 post, if the OEX didn't punch higher soon, it was over-extending its welcome at the higher levels and would likely need to pull back toward Keltner support that was then at 602.22-602.57 and is now at 602.30 on 15-minute closes. Bulls would prefer that any dip find support there, and would actually prefer that support be found at or above the 30-minute 9-ema. Here's the OEX's 30-minute chart, showing the resistance that it's been testing: Link

James Brown : 6/25/2008 12:59:35 PM

Fertilizer stocks..

The group is getting hammered hard again today...

MON... -4.7% but bouncing from its lows near $126 this morning.
MON reported earnings this morning that were 11 cents better than analysts' estimates. Revenues were a little light but management raised their earnings forecast for the rest of 2008.

IPI ... -6.9% on top of yesterday's huge decline and bearish reversal pattern
SQM... -7.1%.. this is the Chilean potash maker.... breaking down under 10-dma and $50.00 mark.
TRA... -4.99%, on top of yesterday's steep losses.
CF ... -3.2% and breaking down under previous resistance & short-term support at $160.
POT ... -2.2%
TNH... only down 2.1% and trading under its 100-dma but still holding near short-term support at $135.00.
MOS... only down 1.6% and testing the $140 level.

Jeff Bailey : 6/25/2008 12:43:28 PM

12:00 Internals found at this Link

Keene Little : 6/25/2008 12:40:55 PM

The market has gone on hold while waiting for FOMC. The leg up from yesterday afternoon does not look complete yet (for a 5-wave move) so it will be interesting to see if SPX can float on up to the 1331-1333 area before the announcement. Otherwise we're left with a potentially choppy pattern in front of us and that could mean just a lot of whipsaw price action around FOMC but no good guess as to where it will ultimately head.

Jeff Bailey : 6/25/2008 12:28:28 PM

Most Actives ... QQQQ $47.58 +1.64%, C $19.46 +3.23%, CFC $4.75 +1.93%, INTC $22.91 +2.23%, MSFT $28.39 +2.38%, AMEX:DCR $0.02 -50%, UYG $24.18 +5.31% (for 2nd session), SPY $132.48 +0.98%, CSCO $24.97 +2.00%, ORCL $22.46 +1.03%

Jeff Bailey : 6/25/2008 12:22:50 PM

Panera Bread (PNRA) $49.49 +6.29% ... retraces 50% of recent decline.

Linda Piazza : 6/25/2008 12:19:08 PM

The OEX is so far finding support on 15-minute closes at its 15-minute 9-ema, now at 603.61. A dip down to stronger potential support on 15-minute closes, now at 602.22-602.57, can't be precluded. However, so far, the OEX is following a strong-gain pattern, with that being a gain, sideways consolidation and then another gain. It probably needs to do the punch-higher thing soon, though, or it risks needing to pull back a bit further, to that next support. This sideways/sideways-down movement has gone on long enough.

Linda Piazza : 6/25/2008 12:15:47 PM

TRIN now 0.86, pulling back just a little. Not enough for bulls' satisfaction, though.

Linda Piazza : 6/25/2008 12:03:19 PM

TRIN 0.91. It's still not breaking above resistance but it's not breaking down, either. The value is neutral to slightly bearish for equities according to my Keltner charts because it's finding resistance at the bullish/bearish benchmark, but it's trend today has been different because it's trended up and then held near the highs.

Jeff Bailey : 6/25/2008 12:02:48 PM

Keroseene-Type Jet fuel stockpiles rose by 933,000 barrels to 40.5 million barrels.

Linda Piazza : 6/25/2008 11:48:22 AM

The SPX's 15-minute 9-ema is now 1324.86. Bulls would like to see this hold as support on 15-minute closes and would prefer that 1326 potential Keltner support hold on 15-minute closes. That higher level may not hold.

Linda Piazza : 6/25/2008 11:46:38 AM

The OEX's 15-minute 9-ema is now 603.34, and bulls would like to see that hold as support on 15-minute closes. The 30-minute version is 602.33, but the preference would be to have the 15-minute version hold.

Keene Little : 6/25/2008 11:40:19 AM

We should be getting very close to a resolution now on oil. The sideways consolidation should be completing with today's leg down. It's either going to spring up to a new high (likely it's last) or drop out of the sideways pattern and start breaking down. But for the moment it's flip a coin to guess which way it's going to go. Link

Linda Piazza : 6/25/2008 11:39:32 AM

The OEX's daily 10-sma is currently 607.31. Since the OEX closed below it on 5/20, all daily closes except one have been at or below it. On 6/05, the OEX managed a one-day wonder of a close above it but was quickly reversed the next day. In that time, the OEX has risen to test that 10-sma many days over three periods of testing. Obviously, it has been strong resistance on daily closes, so we should watch for rollover potential, perhaps with or without a punch through it sometime today.

Obviously, too, sustained daily closes above it might prompt a stronger bounce over the next week or two (with emphasis on "might"), perhaps up to the 621-615 zone. We just don't know which it's going to be yet, but either is a possibility.

Linda Piazza : 6/25/2008 11:23:11 AM

The OEX is dealing with the resistance on 30-minute closes shown in the chart linked to my 10:49:50 post. I'd be surprised if the OEX can maintain values above that ahead of the FOMC decision, but not terribly surprised if it should just punch over it and leave a candle shadow behind. A danger for bulls is the observation of the shape of that climb off yesterday's low. It's narrowing into a rising wedge shape, typically a bearish shape. The climb would actually look better with a pullback that widens the channel again. If there is a pullback, though, equity bulls would like to see the OEX find support on 30-minute closes at 601.12-601.82.

Keene Little : 6/25/2008 11:16:09 AM

The market is working its way higher as the pullbacks continue to look corrective. SPX 1331-1333 continues to look like a good upside target to try the short side for what could be a very hard selloff. The challenge will of course be price action around FOMC. I wouldn't be surprised to see the market slowly elevate towards the 2:15 PM announcement but it might also top out before that time, drop and then bounce back up for a lower high at the FOMC announcement before the bottom drops out into the close. Link

That's of course for the bearish setup. If we get a rally above 1333 that holds, or pops above the downtrend line from June 5th and then comes back for a successful retest and rallies from there I'd then run with the bulls.

Linda Piazza : 6/25/2008 11:06:53 AM

The A/D line is still climbing and I'm a firm believer in watching volume patterns. At 1472, it has a potential upside target of about 1870. However, on the 30-minute chart, RSI has now punched up to 79.53, and RSI doesn't tend to stay above 70 on the 30-minute chart too long, at least not lately. So, it's possible that the A/D line will soon stall its climb. If that happens, equity bulls want a sideways to sideways/down stall and not a steep decline.

Linda Piazza : 6/25/2008 11:04:02 AM

TRIN is now 0.91. It's not punching higher but it's not pulling back either as equity bulls would like to see it do.

Linda Piazza : 6/25/2008 11:01:59 AM

The TED spread has been alternating between 0.99 and 1.00 this morning.

Linda Piazza : 6/25/2008 10:54:24 AM

I showed the OEX's 30-minute chart in my 10:49:50 post, showing the resistance being faced. The OEX is outperforming the SPX, with the SPX still stuck at resistance there that the OEX passed earlier this morning. Here's the SPX's 15-minute chart, showing the obvious resistance being faced: Link If the SPX can get through this, the next resistance band kicks in at 1333.85-1336.60 on 30-minute closes, with the 50% retracement of the slide off the 6/17 high at just under 1335.60.

Jeff Bailey : 6/25/2008 10:53:33 AM

CAL $12.87 +8.69% ... gets the trade at WKLY S1.

Linda Piazza : 6/25/2008 10:49:50 AM

Here's where the OEX is on the 30-minute chart, approaching next obvious resistance: Link

Linda Piazza : 6/25/2008 10:47:52 AM

The TRAN currently tests that benchmark that I mentioned earlier. The surge this 15-minute period has pushed that benchmark up to 5098.50, a level that equity bulls would like to see maintained into this 15-minute close, as it appears it will be. But bulls need to see more gains or a maintaining of gains, because it won't close far above it.

Jeff Bailey : 6/25/2008 10:41:42 AM

PTR $133.90 +1.61% ...

Jeff Bailey : 6/25/2008 10:41:28 AM

AMR $6.04 +5.77%

Jeff Bailey : 6/25/2008 10:40:59 AM

USO $108.37 -2.32% ... has edged under Friday's July futures expiration benchmark ($109.14)

Linda Piazza : 6/25/2008 10:39:47 AM

The SPX now tests the potential resistance setup on 15-minute closes that OEX, composed only of the generals, pressed through earlier today. That's now at 1326.10-1328.16 on 15-minute closes, with the 38.2% retracement of the decline off the 6/17 high also at about 1328.15.

Jeff Bailey : 6/25/2008 10:39:38 AM

EIA: Distillate stockpiles +2.8M barrels.

Jeff Bailey : 6/25/2008 10:39:09 AM

EIA: Gasoline Stockpiles down 100,000 barrels.

Jeff Bailey : 6/25/2008 10:38:41 AM

EIA: Crude Oil stockpiles up 800,000 barrels.

Linda Piazza : 6/25/2008 10:38:21 AM

The OEX is now above the 38.2% retracement of the decline off the 6/17 high and also just touched a new high of the day. Bulls want to see it maintain that behavior. So far, it's behavior is typical for a bullish day, but that TRIN worries me a bit and the TED spread worries me a lot. There's always something, isn't there?

Linda Piazza : 6/25/2008 10:37:00 AM

TRAN attempts a bounce but hasn't topped its previous high of the day. It now has resistance that may be quite strong at 5099.60 on 30-minute closes. It's at 5071.80 as I type.

Linda Piazza : 6/25/2008 10:35:50 AM

TRIN is now 0.92. It closed the last 15-minute period at 0.94, just above the 0.92 benchmark that said that something worrisome was happening for equity bulls, but it had punched up to the confirmation level and been knocked back. Interpretation? This is a little worrisome and the TRIN needs to be knocked back now, soon, but it hasn't really broken into territory that's bearish for equities (0.92 and then 1.01 on my Keltner channels and 1.00 by standard technical analysis rules) yet. So, equity bulls need to be aware that it's rather neutral right now and its trend today has not been in their favor, so they need to see resistance kick in now.

Linda Piazza : 6/25/2008 10:28:30 AM

The TRAN zoomed up and has then dropped to test its 15-minute 9-ema now at 5046.50, ahead of the release of crude inventories in a few minutes. Do be aware that the TRAN can move big--either reversing or continuing an earlier trend--after those inventories. At this morning's peak, it slammed into the former supporting trendline from a price channel that had been building over the last week or two, so this has danger of being a kiss-goodbye sort of test. Since the TRAN sometimes leads the OEX, SPX and Dow, equity bulls in those indices would like to see it either climb along the underside of that former price channel or even break back into it. Breaking back into it would require sustained 15-minute closes above 5100.60. Watch for the possibility that it might instead drop down through the consolidation zone it began building yesterday, with such action likely putting pressure on the OEX, SPX and Dow.

Linda Piazza : 6/25/2008 10:24:39 AM

Jim mentioned the RUT's end-of-day behavior in his Wrap last night. Yesterday's end-of-day dip and this morning's open perhaps could constitute a close enough test of yesterday morning's low that we have a potential double-bottom on the RUT's chart. However, a confirmation of a double-bottom formation requires sustained values above the peak between the two troughs. That peak is yesterday's afternoon high of 718.42. The RUT is currently 712.77. I would require that punch above the peak, confirmed by sustained 15-minute closes above 716.21.

Linda Piazza : 6/25/2008 10:21:46 AM

The SPX has already begun its pullback to its 15-minute 9-ema, with that now at 1320.41 with further potential support at 1319.74. See my 10:20:11 post referencing the OEX for the significance.

Linda Piazza : 6/25/2008 10:20:11 AM

So far, the OEX consolidates sideways, which is what bulls would like to see happen. The 15-minute 9-ema is rising beneath the consolidation zone is now at 600.95. The normal way things work is that once it gets relatively close to the consolidation zone (it's almost there, I'd guess), the OEX dips down to test it and hopefully, if you're bullish, it will then spring right back up to test resistance again. The even more bullish case would be if it doesn't even need to dip down but just springs up again when the 9-ema rises close enough. The least-bullish scenario, of course, would be a strong pullback that crashes through that 9-ema.

Linda Piazza : 6/25/2008 10:04:41 AM

The TED spread, on a delayed quote, is now 1.00, rising in a possible indication of heightened default risks or a perception of heightened risks. I have not watched the TED spread through the lead-up to an FOMC meeting, so perhaps it's natural for it to change according to expectations about what the Fed will do. However, as the TED spread has risen from a 0.77 low over the last two to three weeks to the current 1.00, the markets have indeed weakened, so we can't completely discount the impact of the rise, can we? As I've been saying the last few days, I haven't liked this approach to 1.00 at all.

Linda Piazza : 6/25/2008 10:01:43 AM

TRIN now 0.90. It's not doing what equity bulls would most prefer, but at least is so far finding resistance on 15-minute closes beneath the bullish/bearish benchmark, which is what equity bulls want. However, the trend of the TRIN today is not bullish for equities. Equity bulls should keep a watch, being aware that 15-minute closes above 0.92 signal some concern and sustained 15-minute closes above 1.01 confirm that concern.

Linda Piazza : 6/25/2008 9:55:19 AM

The SPX has potential resistance on 15-minute closes at 1326.15-1327.53, with the 38.2% retracement of its decline off the 6/17 high at about 1328.15. If it can move through this, certainly not a given yet, the next strong resistance band showing up on my charts is from 1334.14-1337.27 on 30-minute closes, with the 50% retracement of the decline off the 6/17 high at just under 1335.60.

Linda Piazza : 6/25/2008 9:53:24 AM

A/D line currently 1240, so certainly maintaining its breakout on the 15-minute chart. Infortunately, my charting service has somehow started over with the outer Keltner boundaries on the 30-minute version, so I don't have those boundaries to watch. I will have to wait for about another hour until those start showing up again.

Linda Piazza : 6/25/2008 9:51:15 AM

The OEX is above the potential Keltner resistance now driven up to 602.60 on 15-minute closes, but isn't far above it and is also challenging the 38.2% retracement of the decline from the 6/17 high, with that at about 602.20. So, it's not clear yet that the OEX can maintain this level as it hasn't really pulled clear of resistance. Bulls would like to see it maintain 15-minute closes above 601.50 but it wouldn't be surprising to see it pull back to the 15-minute 9-ema instead, with that now at 600.35.

Linda Piazza : 6/25/2008 9:40:56 AM

Keltner outlook on TRIN: TRIN is 0.77, in bullish (for equities) territory, and also in the lower or bearish half of its Keltner channels, which is also bullish for equities. However, it's jumped up to test the bullish/bearish benchmark for today, 0.92-1.01 on 15-minute closes. It's so far been knocked back, but equity bulls would like to see it close this 15-minute period below about 0.70 at least to show that resistance is holding.

Linda Piazza : 6/25/2008 9:38:33 AM

Warning from the Keltner outlook on the A/D line: The A/D line opened at potentially strong Keltner resistance and is above it now. If it maintains values above about 400 into the first 15-minute close, it will be in breakout mode and we'll roll up to a 30-minute chart to get a likely target. However, as I did Monday, I must warn that this type of action is sometimes seen on pop-and-drop days. You do not want a repeat of Monday's action, with the A/D line pop being measured as extreme (complete with extreme RSI reading) reversing within the first 15 to 30 minutes. Link

Linda Piazza : 6/25/2008 9:32:42 AM

Futures are higher this morning. There's been an obvious move to pin the OEX near 597-598, so it's unclear how much progress prices can make ahead of the FOMC release this afternoon. If shorts get surprised by too-large a move or if it doesn't retreat and they get scared ahead of the decision and decide to cover, the move could gain momentum.

For now, though, the OEX has potentially strong resistance near 602-603.20 with the 602.20 level likely being first potential resistance on a 15-minute close, with the 38.2% retracement of the slide from the 6/17 high also in that zone. The 605.70-606.60 zone is also showing up as strong potential resistance on 30-minute closes, with the 50% retracement of the slide from the 6/17 high in that zone. So, those are the two obvious areas to watch for a stalling or rollover potential.

Every once in a while we get a nice trending move on an FOMC day that front-runs the eventual post-decision move and shuts out all who did not enter early. More often, however, we get setups in the morning that never quite play out as prices get pinned and then we get an expansion of volatility both directions afterwards that eventually settles into some kind of consolidation pattern such as a triangle. The breakout of the triangle is often the real direction, and that can occur late in the afternoon of the decision or, just as often, not until the next day. The day after an FOMC decision sometimes completely reverses the direction of the FOMC decision day. So, make your decisions about whether you'll trade today, how much you'll risk in any such trades if you elect to trade and whether you'll keep open the trades you currently have open with that in mind.

Keene Little : 6/25/2008 9:17:24 AM

Equity futures made a steady climb during the overnight session and have only given up some of their gains as we approach the cash open. As long as yesterday's close holds (we could get a gap close) I'm looking for another leg up to match yesterday's rally.

Jane Fox : 6/25/2008 8:59:06 AM

WASHINGTON (MarketWatch) - Demand for U.S.-made durable goods was unchanged in May, as higher orders for airplanes and defense goods offset weaker sales of machinery and metals, the Commerce Department reported Wednesday.

Excluding the 2.6% rise in transportation orders, orders for durable goods fell 0.9%, matching expectations in the market. Excluding the 10.9% rise in defense orders, total orders fell 0.6%.

The overall report was stronger than the 1% decline in total orders forecast by economists surveyed by MarketWatch.

Strong export growth has been keeping U.S. factories busier than they would normally be during a period of falling domestic demand.

Orders had fallen for two straight months and are essentially unchanged since January. In April, durable-goods orders fell a revised 1%. Orders for durable goods are down 0.1% through the first five months of 2008 compared with the same period last year. The figures are not adjusted for price changes.

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