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Jeff Bailey : 7/15/2008 2:39:01 AM

Correction to Monday evening's Wrap. After having established a bearish position in one (1) of the Lehman Bros. July $15 Puts (LYH-SC) on 7/10/08 @ $0.95, I did profile a bullish day trade long for 100 shares of Lehman Bros. (LEH) at $18.12, but was stopped for a loss at $17.75.

On 7/11/08 the LYH-SC was closed out at $2.62 as LEH traded $14.69.

Jeff Bailey : 7/15/2008 2:22:09 AM

RUT.X's NH:NL for Monday was 17:162

Daily NH/NL ratio 9.5%, 5-day NH/NL ratio 6.5%, 10-day NH/NL ratio 5.9%.

Jeff Bailey : 7/15/2008 1:20:09 AM

August min-gold (yg08q) off $0.20, or -0.02% at $973.30.

Jeff Bailey : 7/15/2008 1:16:49 AM

Asian Markets at this Link

Jeff Bailey : 7/15/2008 1:14:47 AM

Shanghai Composite ($SSEC) 50-point box Link ... Currently down 72 points, or -2.51% at 2,806.

Session high/low has been 2,896/2,804.

Since already in a column of X, don't see trade at 3,000.

3-box reversal to 2,800? Not at this point, so no meaningful observation at this point.

Jeff Bailey : 7/15/2008 1:10:06 AM

Hang Seng ($HSI) 100-point box Link ... Currently down 718, or -3.26% at 21,297.

Session high/low has been 21,644/21,226.

Since in a column of "X" don't see trade at 22,400.00.

3-box reversal to 22,000? Yes. Chart new column of "O" from 22,000 to 22,000, then additional to 21,300 at this point.

Jeff Bailey : 7/15/2008 1:04:56 AM

Nikkei-225 ($NIKK) Link ... Currently down 263 points, or -2.02% at 12,747.

Session low/high has been 12,726/12,902.

Since already in a column of "O," chart O's in same column to 12,750 at this point.

Jeff Bailey : 7/15/2008 1:01:51 AM

China says energy efficiency improving ... AP Story Link

Jeff Bailey : 7/15/2008 12:55:55 AM

USD/JPY 105.88 -0.23% ...

Jeff Bailey : 7/15/2008 12:51:28 AM

BOJ Leaves Overnight Call Rate Unchanged at 0.50% (12:37 AM EDT)

Keene Little : 7/14/2008 10:27:59 PM

Tuesday's pivot tables: Link and Link

Since last Wednesday's high and then Friday's low, I've been discussing the 3-wave moves the market has been making. This is indicative of either corrective price behavior or an ending pattern. We could see a bounce back up on Tuesday as part of a larger sideways/up correction (shown in pink on the SPX 60-min chart) or we could chop our way lower: Link

The reason I put a descending wedge pattern on the chart after Friday's decline and late afternoon bounce was because it looked to me like the choppy 3-wave price action was going to lead to an ending pattern to the downside (which is what a descending wedge in a decline typically is). It's usually in the 5th wave position and in this case it fits but I think it's the 5th wave of a larger degree 3rd wave.

What all that gobbledegook means is that we could find a low in a few days (perhaps just below 1200) but it should only lead to another choppy correction, maybe back up to 1230 by the end of next week, before heading lower into the end of the month. Think we're oversold now? Wait until the end of the month. This is how it might look into the beginning of August with a final low around 1160-1170 (240-min chart): Link

Elliott Wave analysis provides a road map for where price could head. I use wave structure and Fibs (for price and time) to map out what I consider the higher probabilities and then use key levels to tell me whether I need to consider a different wave pattern or if the one I'm using is being confirmed. I change and update my charts based on what price is telling me (with the help of other technical indicators).

Once this leg down from May is finished (assuming beginning of August for now) we'll be due a bigger bounce, as shown in dark red on the daily chart below. A choppy bounce up to around 1290 by opex week in September would be a setup for a wicked selloff into the end of the year. But there's lots of time between now and then to get a better gauge on what will happen. For now I'm just trying to figure out where the current decline might end and so far it looks lower so stay on the short side or the sidelines. Daily chart: Link

OI Technical Staff : 7/14/2008 9:59:59 PM

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

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Jeff Bailey : 7/14/2008 9:35:39 PM

Today's Global Economic Calendar Link

Jeff Bailey : 7/14/2008 9:35:11 PM

UK's RICS comes in at -88.0% versus forecast of -93.8%.

Jeff Bailey : 7/14/2008 6:25:00 PM

USO (Short Interest as of 06/30/08) ... rises to record 20.02 million share. Days to cover rises to 1.489 with average daily volume of 13.44 million. Link

On 06/30/08 the USO closed $113.77.

Jeff Bailey : 7/14/2008 5:48:39 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/14/2008 5:19:11 PM

Novellus Systems (NVLS) $19.51 +1.82% ...

Jeff Bailey : 7/14/2008 5:18:46 PM

KLA-Tencor (KLAC) $37.33 -1.21% ...

Jeff Bailey : 7/14/2008 5:18:11 PM

Applied Materials (AMAT) $17.77 -0.78% ...

Jeff Bailey : 7/14/2008 5:17:42 PM

Semiconductor Equipment & Materials International (SEMI) revising January's forecast for industry. Now saying sales of semiconductor equipment likely to fall 20% this year from prior estimate of -1.4%.

Jeff Bailey : 7/14/2008 4:56:59 PM

Closing Internals found at this Link

Jeff Bailey : 7/14/2008 4:38:43 PM

Major Global Equity Markets, Currencies, Oil and Gold at this Link

Jeff Bailey : 7/14/2008 4:33:40 PM

DXY's 04:00 tick was 71.925

Jeff Bailey : 7/14/2008 4:26:41 PM

FXE $159.34 -0.06% ...

Jeff Bailey : 7/14/2008 4:25:48 PM

US Oil Fund (USO) finished up $0.09, or +0.07% at $117.48.

Jeff Bailey : 7/14/2008 4:24:57 PM

Iran President: Sees crude oil prices going higher.

Keene Little : 7/14/2008 4:14:16 PM

The setup is for a down day tomorrow, pretty much out of the starting gate. I continue to believe we'll see SPX work its way down to about 1200, maybe a little lower before setting up a multi-day choppy bounce.

Linda Piazza : 7/14/2008 4:06:32 PM

TED spread 1.34. Yikes.

Linda Piazza : 7/14/2008 4:04:01 PM

See what I meant in my 3:54:45 post about it being dangerous to give any end-of-day prognosis just yet? In those few moments, the OEX dropped further. It's so far just dropping closer to that descending supporting trendline off the January lows, however, and so far did not drop to a new low of the day.

Linda Piazza : 7/14/2008 3:54:45 PM

I haven't dared to do the "end of day decisions" post any sooner than this because doing it even this soon before the end of the day is dangerous. Prices can move so much in a few minutes that the whole shape of the day's candle can be changed. As I type, we've got yet another small-bodied candle at the bottom of a decline on the daily chart. At it's current 563.91 level, the body of the candle is probably not small enough for that candle to serve as a classic reversal-type signal, but if the OEX were to zoom up closer to its opening level of 567.90, it would be, for whatever that's worth these days. The day was another test of the descending trendline support that's been in place since January's decline. The drive down has been severe and prolonged and it's time for a relief bounce, but I've been thinking that for three weeks without a relief bounce in sight. The daily Keltner chart says that until the OEX is sustaining daily closes above 574.43, it's got vulnerability to 546.15. Bears should be aware, however, how quickly that stretched-too-thin elastic can snap back if something starts a relief rally.

Jeff Bailey : 7/14/2008 3:45:50 PM

BIX.X 137.74 -8.27% ... threatens close below correlative WKLY S1/QRTRLY S1.

Jeff Bailey : 7/14/2008 3:41:33 PM

NASDAQ-100 Heatmap Link

Linda Piazza : 7/14/2008 3:39:24 PM

If markets bounce big these last few minutes of the day and if you still have some JUL bull put spreads, I'll suggest the same thing I did this morning: evaluate whether you can exit them for a pittance, locking in most of your profit and removing risk.

Jeff Bailey : 7/14/2008 3:39:18 PM

SBUX $14.05 -0.07% ...

Jane Fox : 7/14/2008 3:39:17 PM

Tomorrow's economic report docket is quite full:

8:30a.m. Jun Producer Price Index: Expected: +1.5%. Previous: +1.0%.

8:30a.m. Jun PPI, Ex-Food & Energy: Expected: +0.3%. Previous: +0.2%.

8:30a.m. Jul NY Fed Manufacturing Index: Expected: -8. Previous: -8.68.

8:30a.m. Jun Retail Sales: Expected: +0.6%. Previous: +1.0%.

8:30a.m. Jun Retail Sales, Ex-Autos: Expected: +0.9%. Previous: +1.2%.

10:00a.m. May Business Inventories: Expected: +0.6%. Previous: +0.5%.

Jeff Bailey : 7/14/2008 3:38:50 PM

NDX.X 1,812 +0.09% ... inches green.

Linda Piazza : 7/14/2008 3:36:50 PM

Just in case the OEX keeps climbing into the close--novel thought--bulls should be particularly watchful for potential resistance near 569.55 on 15-minute closes and then again from about 572.33-572.91, where other potential resistance gathers. Tomorrow morning sees potentially market moving action, including the PPI, and so both bulls and bears should evaluate how much risk they want to carry overnight.

Jeff Bailey : 7/14/2008 3:34:43 PM

DIA $111.10 +0.09% .... inches green.

Jeff Bailey : 7/14/2008 3:31:14 PM

SPX 1,233.28 -0.50% ... MONTHLY S1 here. QRTRLY 19.1% still holds buyers.

Jeff Bailey : 7/14/2008 3:29:52 PM

SPX's top 33% weighting breadth gets modestly positive at 13:10

Keene Little : 7/14/2008 3:29:22 PM

There's no change to my expectation for a choppy decline this week in a descending wedge. Friday's high remains the key level for the bulls (for an indication that we at least have a larger bounce that could play out into the end of the month). In the meantime the short side is the better side of the market to be on. Link

Linda Piazza : 7/14/2008 3:27:25 PM

I don't want to make any assumptions too soon, but sustained OEX values above this afternoon's 564.42 swing high would be a slight improvement in tenor. They would need to be confirmed by sustained 15-minute closes above about 565.20. So far, that hasn't happened, with this latest punch higher being temporarily, at least, knocked back like the others. The OEX is at 562.95 as I type. Bears do need to always remain on their toes, however, watchful for that mythical thing called a relief rally or bear market rally.

Linda Piazza : 7/14/2008 3:24:39 PM

I checked the Nikkei Net, and it also does not provide a time for Japan's rate decision or press conference. I wanted to give futures' and currency traders some idea, but there doesn't appear to be a set time.

Linda Piazza : 7/14/2008 3:22:16 PM

What happens overnight tonight? The Bank of Japan will potentially make a decision about its overnight call rate, expected to remain flat. Its press conference a few hours later should be more important, but sources haven't been clear when this will occur this evening. In addition, at 5:00 am ET, Germany's important ZEW Economic Sentiment number will be released. This is all before our important economic numbers begin to be released at 8:30 tomorrow morning. These developments can swing futures one direction or the other before we even get to our numbers and Fed Chairman Ben Bernanke's testimony beginning tomorrow morning at 10:00 am ET.

Linda Piazza : 7/14/2008 3:17:28 PM

The A/D line just hit a new low of the day.

Linda Piazza : 7/14/2008 3:14:19 PM

Sigh. The OEX has potential support on 7-minute closes at 560.21 and light support on 15-minute closes at 560.08. Support continues to weaken on the 30-minute chart, though, sliding down to 559.10 and 557.75. Putting all the charts together, it looks as if the current support gives way, the OEX could slide fairly easily down toward 557.46-557.75, where there's some slight hope of a steadying. First, though, let's see how the current potential support holds up.

Jeff Bailey : 7/14/2008 3:09:57 PM

NASDAQ NH/NL ... 41:346 ... 10.6%, 10.3% and 9.0%.

Jeff Bailey : 7/14/2008 3:09:16 PM

NYSE NH/NL ... 29:589 ... (1, 5 and 10-day ratios) 4.7%, 5.4% and 6.7%

Linda Piazza : 7/14/2008 3:07:52 PM

No change so far with the closing of the bond market. Sometimes the market tenor might change a bit or be accelerated a bit with the closing of the bond market. Be watchful.

Linda Piazza : 7/14/2008 3:03:54 PM

We keep seeing signs of potential improvement, but they just can't maintain any traction. Not yet, at least. I'm watching the VIX as it retests potential resistance now from about 28.50-28.65 on 15-minute closes to see if it holds on 15-minute closes or if the VIX breaks through higher again. The VIX is 28.60 as I type, so far balancing right along that potential S/R band, not dropping far beneath it but not climbing back above it, either. It's leaving us in limbo.

Jeff Bailey : 7/14/2008 3:02:59 PM

NYSE a/d ... 797:2,371

NASDAQ a/d ... 822:2,054

Jeff Bailey : 7/14/2008 2:53:20 PM

VIX.X 28.62 +4.11% ... after back-test of MONTHLY R2. Slipped below late Friday. Quarterly R2 and WKLY R1 correlative.

Linda Piazza : 7/14/2008 2:51:29 PM

Here we go again. The OEX's potential support on 7-minute closes, holding so far on all 7-minute closes all day today, is now 560.70. There's lighter potential support at about 561.80. On the 30-mintue chart, support has been weakened by today's action. That support has now sunk to 559.80 and 558.22.

Linda Piazza : 7/14/2008 2:45:58 PM

I just noticed that the VIX 29.10-29.25 zone is the 61.8% of the retracement from the 1/22/08 high into the 5/19 low, as well as from the 8/16/07 high into the 10/11/07 low. The VIX hit a high of 29.30 today, just below Friday's 29.44 high, so both days it was testing that potential resistance zone.

Jeff Bailey : 7/14/2008 2:42:15 PM

Sector Losers ... Regional Banks -7.07%, Money Center Banks -6.71%, Broker/Dealers -3.03%, Airlines -2.21%, Health Serv. Providers -1.43%, Insurance -1.22%, Interactive Internet -1.19%, Dow Transports -1.14%

Linda Piazza : 7/14/2008 2:41:00 PM

If the BIX manages a 15-minute close above the 9-ema at about 139.11, that will be the first 15-minute period since the first one today that the BIX was able to close a 15-minute period above that average. It won't be strong evidence of much except for at least a short-term change in tenor. It looks as if the BIX might have strong resistance on 15-minute closes at about 141.53 if it keeps rising. BIX at 139.59 as I type.

Jeff Bailey : 7/14/2008 2:39:39 PM

Sector Winners ... Gold Bugs +2.71%, Oil Service +2.25%, HMOs +0.48%, AMEX Nat. Gas +0.48%, Software +0.43% and Treasuries.

Linda Piazza : 7/14/2008 2:36:50 PM

The A/D line is still not improving as much as those who want the markets to steady would like to see. It's -1339 as I type, not so far off its -1647 low of the day. Bulls would like to see it higher, preferably at least maintaining 15-minute closes above its 9-ema, now just above at about -1360. So far, it's just been moving back and forth across that average.

Keene Little : 7/14/2008 2:22:44 PM

The retest of Friday's low for SPX is showing bullish divergence and the bounce is looking like it could lead to more upside. I think it will only be good for perhaps a rally back to the flat line but at this point it's looking like we might have seen the low for the day. Maybe.

Jeff Bailey : 7/14/2008 2:10:44 PM

02:00 Internals found at this Link

Linda Piazza : 7/14/2008 2:07:45 PM

The A/D line is bouncing, but it's bounce isn't convincing just yet and it's maintained vulnerability to about -2400. The A/D line would have to get back above about -1100 and, preferably, above -794 and maintain values above that before I'd believe too strongly in any bounce. Then, I'd be very careful as it approached the -250 zone. A/D line at -1447 as I type.

Linda Piazza : 7/14/2008 2:05:39 PM

For the first time since about 10:00 this morning, the VIX has produced a 15-minute close below its 9-ema, but it has further potential support just beneath, at about 28.52 on 15-minute closes. The VIX is 28.75, as I type, with the 9-ema's potential resistance on 15-minute close at about 28.95.

Jeff Bailey : 7/14/2008 2:00:10 PM

UN-African Union: Orders evacuation of non-essential staff from Sudan.

Linda Piazza : 7/14/2008 1:58:33 PM

The OEX's 7-minute 9-ema is now about 652.55. The OEX is 562.68 as I type. Although I don't mention the 7-minute chart too often because I know not everyone watches it, I find it particularly useful for the OEX, on my Keltner charts, at least.

Jeff Bailey : 7/14/2008 1:50:14 PM

VIX.X 28.79 +4.72% ...

Jeff Bailey : 7/14/2008 1:49:59 PM

VXN.X 33.34 +5.27% ...

Jeff Bailey : 7/14/2008 1:49:30 PM

Swing trade put exit partial alert! ... Let's exit 2/3 of the Starbucks Corp. SBUX Oct. $15 Puts (SQX-VC) at the bid of $1.92. ($1.92 x $1.96)

SBUX $14.00 -0.42% ...

Linda Piazza : 7/14/2008 1:49:26 PM

Remember that confirmation of the OEX's potential double-bottom formation requires sustained values above the peak between the two troughs. That peak was Friday's 575.10 high. Until then, we don't have a double-bottom formation: we have a potential one. OEX at 564.21 as I type.

Linda Piazza : 7/14/2008 1:45:33 PM

For the first time since about 10:52 am ET this morning, the OEX has closed a 7-minute period above the 7-minute 9-ema. That's now at 562.27. The OEX is also now testing the 15-minute version, now risen to about 563.17. So, those who hope for a steadying want to see the OEX maintain values above at least 562.27 and keep challenging that 15-minute version. OEX at 562.80 as I type. Success at maintaining these values is only a small change in tenor, and those watching need to be aware that this little push is coming in a testing (or stop-running) time of day when big money is doing the testing. If the attempts to rise are hit with renewed selling, big money will have the evidence they need and so will we.

Linda Piazza : 7/14/2008 1:42:23 PM

TED spread now 1.29. That's not good, of course, but it's now rising into what has been a sort of S/R zone beginning about 1.29 and up into the low 1.30's. The last time the TED spread was this high was early May when it was coming down from the 1.70 April peak.

Jeff Bailey : 7/14/2008 1:40:41 PM

Petroleo Brasileiro (PBR) $62.38 +1.06% ... continues to hold above its rising 150-day SMA ($59.82) tested on Thursday.

Update to strike by workers today has PBR saying the stike will likely cut production by 136,000 barrrels/day.

Earlier this morning, PBR had estimated strike would cut production by 300,000 barrels/day, or 16% of its total output.

Brazil produces roughly 1.8 million bpd of oil and gas equivalent.

Jeff Bailey : 7/14/2008 1:36:24 PM

US Oil Fund (USO) $117.13 -0.22% ...

Jeff Bailey : 7/14/2008 1:35:52 PM

President Bush: Congress's failure to act on drilling "unacceptable."

Linda Piazza : 7/14/2008 1:34:52 PM

Potential support for the OEX (7-minute and 30-minute) is now 559.17-560.73, about where it's been the last few hours. If the OEX can't make it above the 15-minute 9-ema now at 562.86 soon and stay above it, the vulnerability to 557.61 increases. Bears shouldn't rule out the pop higher as support has been holding, but neither should bulls rule out a trip down to 557.61.

Jeff Bailey : 7/14/2008 1:32:37 PM

President Bush: Lifting executive ban on offshore oil drilling. Congressional prohibition remains in place at this time.

Jeff Bailey : 7/14/2008 1:30:46 PM

White House: Saying President Bush concerned by Darfur unrest.

Jane Fox : 7/14/2008 1:27:37 PM

BOSTON (MarketWatch) -- Shares of an exchange-traded fund tracking regional-banking stocks on Monday were set to post their biggest daily decline since the ETF was launched in June of 2006. SPDR KBW Regional Banking ETF was down over 8% in afternoon trading Monday, its largest one-day pullback since November 2007, according to data from FactSet. Similarly, a broader bank ETF, SPDR KBW Bank ETF , was also on track for the largest daily loss in its history. The ETF, which was listed in November of 2005, lost nearly 8% in recent action amid a sell-off in banking stocks.

Jeff Bailey : 7/14/2008 1:27:11 PM

13-week Yield ($IRX.X) ... down 12 bp at 1.450%.

Treasury awarded $24 billion in 3-month bills at high auction rate of 1.610%.

Received bids totaling $66.51 billion, bid-to-cover ratio was 2.77.

Dollar price was 99.593028 and the bond-equivalent return was 1.639%.

CUSIP is 912795H20

Jane Fox : 7/14/2008 1:24:36 PM

SAN FRANCISCO (MarketWatch) -- President Bush is expected to announce Monday afternoon an executive order lifting a ban on drilling in offshore U.S. waters, a move seen as largely symbolic, since any lasting action would need Congressional approval.

"The president plans to rescind the executive order withdrawing offshore acreage from energy production," analysts led by Kevin Book at Friedman Billings Ramsey wrote Monday.

"While this will put pressure on national lawmakers and local governments, it is not by itself sufficient to conquer a complex web of competing incentives," they said.

The White House plans to make a statement on "outer continental shelf exploration" at 1:30 p.m. Eastern time. A spokesperson could not be immediately reached for comment.

On Monday, crude oil futures traded modestly lower at $144.86 a barrel after rising to an intraday high of $146.37. Early gains in the dollar, helped by the U.S. government's support of Fannie Mae and Freddie Mac, weighed on crude and other dollar-denominated commodities.

Let's just drill our way out of this mess!!

Tab Gilles : 7/14/2008 1:22:59 PM

In reference to earlier JPM post ;7/14/2008 12:20:58 PM- JPM is scheduled to report Q2 EPS on July 17.

Jeff Bailey : 7/14/2008 1:22:59 PM

3-month auction results posted.

Jane Fox : 7/14/2008 1:21:05 PM

National City Shares were breifly halted amid a panic drivern selloff. The company is now trying to stop the bleeding that they are calling market rumors.

Jane Fox : 7/14/2008 1:19:49 PM

Regional banks selling off today due to the failure of IndyMac Bancorp Inc.

National City NCC -24.10%

Washington Mutual WM -29.76%

Sovereign Bancor SOV -17.50%

Keycorp KEY -10.70%

Linda Piazza : 7/14/2008 1:14:12 PM

VIX is nearing a test of Friday's 29.44 high. It's 29.20 as I type.

Jeff Bailey : 7/14/2008 1:11:17 PM

Canadian Solar (CSIQ) $37.68 +16.29% Link ... boosting Q2 sales outlook.

Linda Piazza : 7/14/2008 1:10:01 PM

The A/D line just continues dropping. It's at -1595 as I type.

Jeff Bailey : 7/14/2008 1:09:29 PM

White House: Hopeful that housing bill can get done within week.

Keene Little : 7/14/2008 1:08:31 PM

The sideways consolidation over the past hour looks like a bearish continuation pattern. No evidence yet of a bottom yet.

Linda Piazza : 7/14/2008 1:05:30 PM

The OEX now has potentially strong support (7-minute to 30-minute closes) from about 559.60-560.70. The OEX is 561.27 as I type. Whether or not this will hold, I don't know. If it doesn't, factor in vulnerability to 557.80 or maybe even 555.

Jeff Bailey : 7/14/2008 1:04:46 PM

Most Actives ... FNM $9.61 -6.24%, QQQQ $44.26 -0.67%, LEH $13.84 -4.08%, NCC $3.34 -24.66%, WB $10.11 -12.39%, IWM $66.19 -1.60%, BAC $20.53 -5.30%, FRE $6.55 -15.48%, SPY $122.77 -0.86%, JPM $31.91 -3.76%

Linda Piazza : 7/14/2008 1:03:59 PM

Slight comfort: The TED spread has eased to 1.21.

Jane Fox : 7/14/2008 12:50:41 PM

Here is how the markets look in relation to their respective overnight lows (magenta lines). The cyan lines are the previous day highs and lows. Link

Jeff Bailey : 7/14/2008 12:50:37 PM

VIX.X 28.96 +5.34% ...

Jeff Bailey : 7/14/2008 12:50:19 PM

Bank of America (BAC) $20.68 -4.56% ... notable 52-weeker at the big board.

BAC-TD $2.00 x $2.04.

Jane Fox : 7/14/2008 12:49:25 PM

VIX continues to tell you the bears have control today and as long as it presses new daily highs, the bears will continue to have control. Link

Linda Piazza : 7/14/2008 12:40:11 PM

The OEX's support near 559.96-560.78 may be strengthening. We may see soon if that's true. Bulls shouldn't count on that support holding, but bears should be aware that it might be strengthening. I know these warnings have not been needed for weeks and it's hard to believe that any bounce will ever be sustained, but some day support will hold and a bounce will indeed hold. Keep updating those profit-protecting plans.

Linda Piazza : 7/14/2008 12:32:33 PM

VIX still climbing, not dropping below that desired level mentioned in my 12:25 post. The next potential resistance is sliding higher, so it may not be strong resistance. It's now at 29.10 on 15-minute closes with Friday's high at 29.44.

Jeff Bailey : 7/14/2008 12:31:12 PM

StreetTracks Gold (GLD) $96.00 +0.90% ... gets the trade at that $96.00 strike and Friday's suspicious DnTickVol for the GLD-SR. Link

Linda Piazza : 7/14/2008 12:25:37 PM

The first task that bulls would like to see accomplished is for the VIX to be pushed back below 28.25 and for it to maintain levels below that. It's currently 28.71 and may find support on pullbacks from that 28.25 level up to 28.44. Potential resistance at 29.09 and then, of course, at Friday's 29.44 high.

Tab Gilles : 7/14/2008 12:20:58 PM

JP Morgan Chase (JPM) $32.11 -$1.06 (3.06%)

Looking at a daily chart.... Link

Weekly chart...hitting 3 year lows around $32 Link

A few out of the money LEAP calls look interesting, January 2010 $35 WJPAG, $40 WJPAH & $45 WJPAI.

Linda Piazza : 7/14/2008 12:16:11 PM

The TED spread is 1.22, now 0.010 or 0.848% above Friday's closing value.

Jeff Bailey : 7/14/2008 12:14:36 PM

12:00 Internals found at this Link

Linda Piazza : 7/14/2008 12:09:22 PM

The OEX held the 560-560.25 potential support on 30-minute closes, but it may be headed down to test it again. For reference, Friday's OEX low was 561.16 and today's has been 561.12, so there's clearly an equal-low test going on here. On a Keltner basis, though, even if the OEX were to punch down to or below 560.25 but bounce back above it by the end of the 30-minute period and then bounce from that, it would be showing Keltner-style bullish divergence. FWIW.

Jeff Bailey : 7/14/2008 12:05:59 PM

Pound CurrencyShares (FXB) $199.65 +0.30% ...

Jeff Bailey : 7/14/2008 12:05:33 PM

Yen CurrencyShares (FXY) $93.94 +0.22% ...

Jeff Bailey : 7/14/2008 12:05:07 PM

Euro CurrencyShares (FXE) $159.44 (unch) ...

Keene Little : 7/14/2008 12:04:09 PM

Gold is not ready to drop as it makes new highs while the stock market makes new lows. On the sidelines with gold for now. I'll let it show me a top now rather than try to pick one. But in case I miss it, a drop now below this morning's low would be the sign of a top (at least for now). Following the new low a bounce should be a good shorting opportunity. But I'll let it show me that first.

Linda Piazza : 7/14/2008 12:01:32 PM

The VIX is now hitting and even exceeding by a bit that potential resistance on 15-minute closes that I mentioned in my 11:46:35 post. That resistance is at 28.39 on 15-minute closes, with the VIX at 28.57 as I type, and with next potential resistance up at 28.94 . . . VIX popped up to 28.82 as I typed, so that next resistance level will be tested.

Jeff Bailey : 7/14/2008 11:59:56 AM

Swing trade long alert! ... for 1/2 position in the StreetTracks Gold (GLD) at the offer of $95.56.

Stop goes $94.00. Target $99.00.

Linda Piazza : 7/14/2008 11:57:16 AM

Potential support for the OEX is now at 563.65 on 15-minute closes. That's somewhat light support, however, so I'm not certain how likely it is to hold. Next potential support is found on the 30-minute chart, at 560.37-560.86, but the 15-minute chart shows greater vulnerability, to 558.56, and I think you're going to have to factor in that vulnerability.

Jeff Bailey : 7/14/2008 11:53:17 AM

Yen CurrencyShares (FXY) $93.84 +0.10%

Jeff Bailey : 7/14/2008 11:51:54 AM

Asian Markets Link ... finished mixed to mostly lower on Monday.

Nikkei-225 ($NIKK) Link was off 29 points, or -0.23% at 13,010.

Monday's high/low was 13,185/12,970.

Wouldn't be able to chart an X to 13,200. Will chart 3-box reversal with "O" to 13,000.

Keene Little : 7/14/2008 11:51:53 AM

In the "help I've fallen and can't get up" category, the banks (BIX) continue to make new lows. After a small bounce off the 157 level last week (which is the 127% projection of the 2000-2007 rally) the next Fib projection support is the 138% projection at 134.79 (monthly chart): Link

Linda Piazza : 7/14/2008 11:47:38 AM

The A/D line is still going lower, now testing the bottom of its support zone. To see any improvement at all, it needs to sustain 15-minute closes back above -679. It's -920 as I type.

Keene Little : 7/14/2008 11:47:19 AM

The RUT, which has looked the strongest is now looking like it could be hammering out a sideways triangle consolidation pattern since its July 7th low (60-min chart): Link . This fits well as a 4th wave in its decline from June 5th, showing an expectation for a 5th wave down once the consolidation completes (daily chart): Link

Linda Piazza : 7/14/2008 11:46:35 AM

The VIX has approached potential resistance on 15-minute closes near 28.36. The VIX is 28.09 currently, down just a touch from its 28.20 high of the day.

Tab Gilles : 7/14/2008 11:45:10 AM

Vista Gold (VGZ) $4.67 +$0.22 4.95% Testing its 200-ma. Link

Linda Piazza : 7/14/2008 11:44:43 AM

The formation in which the OEX is drifting down is beginning to narrow and, in normal market conditions, that would put us on the lookout for a potential break to the upside. However, these are not normal times, as I've menitioned so many times. Lately, a normal pullback tends to suddenly give way as bulls are disappointed once again and bail. These are possibilities I've mentioned previously, and I'm sure others have, too. So, note the narrowing of the formation and the potential that perhaps this about-to-be-tested support now near 563.85 is going to hold, but don't count on it or use it as a reason not to honor a stop you've set.

Jeff Bailey : 7/14/2008 11:41:30 AM

Sector Losers ... Regional Banks -5.30%, Money Center Banks -4.92%, Broker/Dealers -2.42%, Airlines -1.64%, Interactive Internet -1.27%

Jeff Bailey : 7/14/2008 11:39:53 AM

Sector Winners ... Home Construction +2.42%, Oil Service +1.70%, Gold Bugs +1.27%

Tab Gilles : 7/14/2008 11:39:40 AM

China Information Security Technology (CPBY) $4.48 Recently signed contracts in the second quarter of 2008 is valued at $25.34 million, an increase of over 50% compared to the first quarter of 2008 and has been added to the Russell 3000, Russell Microcap and Russell Global Indexes.

In the past the $4 level has provided a buying opportunity. Concensus earnings estimates for 2008 $0.56 & $0.70 for 2009. Link

Jeff Bailey : 7/14/2008 11:37:07 AM

Fed approves final rule on mortgage lending.

Jane Fox : 7/14/2008 11:32:05 AM

Notice how the VIX and S&P futures are in sync today. Link

Linda Piazza : 7/14/2008 11:31:04 AM

The OEX is still vulnerable to lower values, with light potential support on 15-minute closes now at 563.69. I had mentioned in my 10:45 post this morning that the OEX was vulnerable to lower levels, and it still is.

Keene Little : 7/14/2008 11:25:02 AM

In last night's SPX 60-min chart I had drawn in a descending wedge pattern that I thought could play out this week (based on the 3-wave price action since last week's high). I've highlighted that pattern in this updated chart: Link . This calls for a choppy move lower this week to a final low perhaps just below 1200. It's just a guess but so far it's playing out this way. It takes a rally above Friday's high near 1257 to negate the pattern.

Jeff Bailey : 7/14/2008 11:21:01 AM

National City Corp. (NCC) $3.74 -14.38% ... jumps to #2 most active.

Linda Piazza : 7/14/2008 11:16:45 AM

The TED spread is 1.20.

Linda Piazza : 7/14/2008 11:14:20 AM

The A/D line has been moving sideways for the last hour. It's been chopping around but mostly balancing along potential support on 15-minute closes now beginning at about -668 and extending down to -900 with further slighter support now at about -1150. The A/D line is currently -813, near its -818 low of the day.

Jeff Bailey : 7/14/2008 11:06:56 AM

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

Keene Little : 7/14/2008 11:05:17 AM

Gold just broke below 968 so short against today's high of 972.6 (GLD 95.80) is the recommended play. I could be a bit early but it's worth another try. If you has purchased put options on GLD last week and stuck with the 97 stop then you're still in good shape.

Linda Piazza : 7/14/2008 11:03:24 AM

Potential OEX resistance is now 570.46 on 30-minute closes, 571.81-572.41 on 15-minute closes.

Linda Piazza : 7/14/2008 10:57:03 AM

Yahoo Finance is reporting that Freddie Mac's $3 billion sale in short-term bonds was disappointing. Many had hoped that the Paulson's announcements over the weeks would increase interest and result in solid results. I haven't seen exact figures anywhere.

Keene Little : 7/14/2008 10:51:10 AM

Looking at the rally in gold this morning I'm watching for signs of topping. Right now the pattern looks like it might have completed its bounce and could be ready to head back down. If it drops below 968 (GLD 95.35) it should be the signal that the top is in. Shorting that break, with a stop at a new daily high, is the recommended play. Again, this is an attempt to find the top for the rally from the June 12th low so I'm trying to keep stops tight.

Linda Piazza : 7/14/2008 10:45:24 AM

The OEX is now looking a bit more vulnerable to a pullback to 563.27, where slight potential support on 15-minute closes might be found. It's not a given, but it's looking more likely. If that doesn't hold, next support is near 561.50.

Jeff Bailey : 7/14/2008 10:40:54 AM

Most Actives ... FNM $10.77 +5.07%, FRE $8.06 +4.00%, SPY $124.14 +0.24%, WB $10.55 -7.88%, QQQQ $44.57 +0.02%, MSFT $25.66 +1.62%, INTC $20.69 +0.29%, XLF $18.38 -1.65%, $21.59 -1.09%, AAPL $176.60 +2.32%

Linda Piazza : 7/14/2008 10:37:30 AM

The A/D line continued to drop, and is now all the way to test gap support (gap up this morning and gap down Friday morning) as well as potential Keltner support now from -925 to -670. The A/D line is now -511, trying to steady at that support.

Jeff Bailey : 7/14/2008 10:35:59 AM

StreetTracks Gold (GLD) $95.62 +0.48% ... 61.8% of its recent 03/17/08 to 05/01/08 decline at $93.99.

Linda Piazza : 7/14/2008 10:35:38 AM

The OEX closed that last 30-minute period just below potential support on 30-minute closes at 567.21. It wasn't far enough below it to say definitively that it had been violated, especially as the OEX was bouncing into the close of that period. However, it needs to maintain support along that line and bounce back above 570 and then 572, probably within the next hour or two, or this is going to look like more than a somewhat anticipated (by the chart setup I mentioned) pullback to this support. Lately, these "normal and natural" pullbacks have suddenly given way to lower prices, and that remains a danger this morning, too.

Jeff Bailey : 7/14/2008 10:34:52 AM

iShares Silver (SLV) $188.55 +1.15% ... retraces 61.8% of its 03/14/08 to 5/01/08 decline.

Jeff Bailey : 7/14/2008 10:27:27 AM

10:00 Internals found at this Link

Note: It would currently take a closing measure of <=14.00% for the NASDAQ's 5-day NH/NL measure to see a 3-box reversal back higher.

Jane Fox : 7/14/2008 10:27:12 AM

Internals are all over the map this morning. but the climbing VIX and falling AD line tell me the bears have the upper hand. Link

Linda Piazza : 7/14/2008 10:27:03 AM

The VIX is so far finding resistance on 30-minute closes at its 30-minute 9-ema, now at 27.65. VIX is 27.53, so it's still testing.

Linda Piazza : 7/14/2008 10:25:37 AM

The A/D line continues dropping, not holding onto what was potential support now near 108. Next potential support is near -670 up to -530. A/D line is -363. I'm frankly surprised that the OEX has been holding onto support as well as it has been with the A/D line dropping like this.

Linda Piazza : 7/14/2008 10:20:20 AM

OEX bulls need that 15-minute close above resistance now at 572.05 as a first sign of improvement, although the 30-minute chart says that there will be some improvement, at least, with a 30-minute close above 570.74. OEX at 569.43.

Linda Piazza : 7/14/2008 10:14:08 AM

So far, OEX support is holding, but it needs to stay above 567.78-568.25 on 15-minute closes or 567.50 on 30-minute ones, to maintain that support. OEX at 569.12 as I type.

Linda Piazza : 7/14/2008 10:08:48 AM

As of 10:02 am ET, the TED spread had risen back to 1.20, still down 0.010 or 0.836%, but not the direction we want to see it go.

Keene Little : 7/14/2008 10:07:37 AM

Equities have not been able to hold onto their opening gains and gold has reversed its earlier pullback and made a new high above Friday's. That should have hit your stop on any gold short. The new highs continue to be met with bearish divergences and that's why I don't think it will be a lasting high but I'm watching to see how it behaves now.

Linda Piazza : 7/14/2008 10:06:10 AM

Now OEX bulls want to see the OEX hold this support that's being tested, now down to about 567.80 on 15-minute closes and bounce hard from here, up through 572 again. The 30-minute chart shows potential support on 30-minute closes near 567.20, so it's possible that the dip could test that potential support, too, but OEX bulls want the support to catch on somewhere through that level. OEX at 567.83 as I type.

Linda Piazza : 7/14/2008 10:00:40 AM

Potential support for the OEX on 15-minute closes is now from 567.84-568.22. OEX at 569.06.

Jeff Bailey : 7/14/2008 10:00:35 AM

StreetTracks Gold (GLD) $95.52 +0.37% ... ~955.52 spot.

Edges above Friday's high.

Jane Fox : 7/14/2008 10:00:34 AM

AD line opened bullish at +1344 but has now fallen to almost 0, currently at +87.

Linda Piazza : 7/14/2008 9:59:55 AM

With no nearby Keltner support beneath it, as mentioned earlier, the A/D line did drop toward potential Keltner support on 15-minute closes has risen to 94. Whether it will hold or not is not yet known, but bears should be aware that potential support is being approached. The A/D line is 133 as I type.

Linda Piazza : 7/14/2008 9:56:15 AM

The OEX did not, of course, maintain a 15-minute close above the Keltner S/R previously at 572.20 and now at 572.14. There's the potential then to decline toward 568, where next support might be found. I mentioned this as a possibility in my 9:40:29 post, although only as a possibility and not as a probability at the time.

Jeff Bailey : 7/14/2008 9:53:38 AM

BKX.X 54.30 -0.67% ...

BIX.X 149.81 -0.23%

XBD.X 135.18 +0.45%

IUX.X 249.16 +0.66%

XLF 18.72 +0.21% ...

Jeff Bailey : 7/14/2008 9:50:56 AM

S&P 500 Heavyweights ... Sorted weighting as of today's open Link

Linda Piazza : 7/14/2008 9:45:26 AM

The A/D line is 1356 as I type, having charged up toward potential resistance on 15-minute closes at 1665.47. At this level, the A/D line doesn't have to keep charging higher to prompt further gains on equity indices, but it does need to trend sideways rather than pulling back strongly. There is no nearby Keltner potential just below it, although there's some slight historical support near 900-1100. Next historical support is nearer 400 and then Keltner support is now near 70 on 15-minute closes.

Linda Piazza : 7/14/2008 9:40:29 AM

The chart setup on the OEX looks as if it's possible that the pullback on the OEX could be deeper than bulls would like to see, perhaps to the 567-568 level and maybe even a bit deeper. If shorts get too surprised for too long, that pullback won't occur, but keep it in the back of your mind as a possibility. It's not a probability yet, though, especially if 15-minute closes are maintained above 572.20.

Linda Piazza : 7/14/2008 9:38:09 AM

If you have some JUL bull put spreads left, you might consider taking a look at them this morning, while markets are bouncing, and seeing if you can close them out for a pittance, keeping most of your original credit. You've seen what these markets are capable of doing, so ask yourself if the last ten cents or so of that credit is worth the risk you're carrying into opex.

Linda Piazza : 7/14/2008 9:35:20 AM

The OEX has shoved through the first level of potential resistance near 571-572, but of course has not yet closed a 15-minute period above it. It approaches potential resistance on 15-minute closes at 576.40 as well as Friday's last spike high of 575.10. If the OEX is knocked back, bulls want to see 15-minute closes above about 572.20.

Keene Little : 7/14/2008 9:22:38 AM

As I had expected we got some "good" news (unless you're a tax payer) over the weekend about the bailout of Fannie Mae and Freddie Mac and that's given the market a boost. They're trying to word it so it doesn't sound like a bailout but if it looks like a duck, walks like a duck and quacks like a duck, it's a duck (which is what existing shareholders forgot to do).

So now we'll obviously need to see the opening gap up hold and not see everyone jump in and sell it. A failure to hold in the green today would not be encouraging for the bulls. As mentioned last night I don't see a price pattern yet that I'm comfortable with as far as calling a bottom. Shorting the rallies has been and should still be the better trade. The challenge today will be determining how much of a rally we get.

Linda Piazza : 7/14/2008 9:21:41 AM

As I've been noting the last few days, we're currently having a geothermal HVAC system installed. If I should disappear suddenly, it won't be voluntary but will be due to something going on with that. I've been told that the electricity won't have to be cut or my Internet access disturbed, but you know how such things go.

Linda Piazza : 7/14/2008 9:19:05 AM

As of 9:07 am ET, the TED spread, an indicator of default risk, had dropped to 1.16, down 0.051 or 4.205% from Friday's close. All day Friday, the TED spread had risen, I thought as a response to the Freddie Mac and Fannie Mae problems as well as impending earnings reports from financials this week. Of course, we now have to factor in what was happening to IndyMac, too. I'm glad to see it declining this morning, but the results of the auction of Freddie Mac notes could push it higher again or drop it further, depending on the outcome.

As Keene and I both noted Friday afternoon, the SPX had, during the day, touched and bounced from long-term descending trendline support. I said that the support had been in place since January, but that same trendline can actually be extended back to March 2007. Bulls might feel consoled, but bears will point out the head-and-shoulders shape taking form above that descending trendline. They might point to the potential bearishness of the formation. There's evidence enough to console and frighten both sides of the camp. What you have to keep in mind is that you can't control what happens with the markets, but you can control how much risk you take and how you handle movements against your position.

The analogous supporting trendline was much lower for the OEX and has not been touched, although the OEX did closely approach the descending trendline off January's low, now just a hair below 560. Both indices sprang off their lows, although the bodies of their daily candles were far too big to constitute any kind of classical reversal signal. A spring off the lows coupled with volume much bigger than recent volume sometimes indicates that big money was accumulating, but always remember that big money can afford to and sometimes needs to begin stepping into positions in increments, on the way down.

On a Keltner basis, the OEX ended the day with potential support on daily closes at 559.88 but with a potential downside target of 545.99 still in place. The OEX would need to sustain daily closes above about 577 (with emphasis on the word "sustain") to question that potential downside target and would need to sustain daily closes above about 588 to erase it. In the meantime, those 577 and 588 levels should be watched for potentially strong resistance on daily closes.

As I type, SPX futures are about 15 points above fair value, the level we'll use to extrapolate where the OEX might go if the cash markets behave in accordance with futures value. However, it must be noted that the Freddie Mac auction of notes is ongoing as I type, with the results of that not yet known and likely to either reinforce the gains in futures or else undermine those gains.

If the OEX should gain in accordance with the SPX futures' distance from fair values, when we could expect the potential resistance on 15-minute closes now at 571.72-572 or perhaps at 575.87 to be shoved higher and perhaps tested. Various charts from 15-minute to daily show potential resistance in the 575.50-577 zone, so that should be considered potentially strong resistance if touched. If the OEX does zoom up there and is knocked back, but then maintains levels mostly about 571, then bulls have a better chance of making further gains. I would watch again for potential resistance at 583 and 588-590, although all those higher levels would change by the time the OEX could test them.

What if the OEX surprises people and declines immediately or after an abortive attempt to rise? Currently, there's potential support at 560-562.20 and then against at 554-556.

Jane Fox : 7/14/2008 9:12:08 AM

Gold had a nice run and is now taking a breather. I was able to grab part of that rally and I am now looking for another chance to get long. Link

Jane Fox : 7/14/2008 9:00:27 AM

Crude is staying above its $140.00 support and is currently trading at $144.63. Link

Jane Fox : 7/14/2008 8:59:04 AM

NEW YORK (MarketWatch) -- Oil workers at Brazilian state-run oil giant Petroleo Brasileiro , or Petrobras, started a five-day strike on Monday, halting production of about 400,000 barrels of oil a day at 13 platforms in Brazil's Campos Basin, Dow Jones Newswires reported Monday citing a statement by the Sindipetro-NF union. Thirty-three of Petrobras' 42 platforms in the region were expected to participate in the strike, the report said. Platforms in the Campos Basin account for more than 80% of Brazil's domestic oil output, according to the report.

Jane Fox : 7/14/2008 8:52:27 AM

Here are the overnight charts. After testing overnight lows, the Freddie Mac and Fannie Mae news was probably the catalyst that propelled the markets to new overnight highs but it was not enough to maintain those highs. Link

Jane Fox : 7/14/2008 8:45:17 AM

NEW YORK (MarketWatch) -- Gold futures edged lower early Monday, as the dollar strengthened in the wake of the U.S. government's rescue plan for mortgage giants Fannie Mae amd Freddie Mac . Gold for August delivery fell $2.80 to $957.80 an ounce on the New York Mercantile Exchange. On Friday, gold rallied $18.60 to end at $960.60 an ounce and it posted a weekly gain of $27.

Jane Fox : 7/14/2008 8:43:45 AM

(MarketWatch) -- The implicit government guarantee of Fannie Mae and Freddie Mac is now explicit.

In a dramatic statement released Sunday, the White House and Federal Reserve moved to give the mortgage giants the capital they need to survive the depression in the housing market and turmoil in financial markets that had left them dangling over a cliff.

Of most immediate importance, the Fed's board of governors voted to open up its emergency discount window to Fannie and Freddie.

In addition, Treasury Secretary Henry Paulson announced that he will seek congressional authorization to buy stock in the two companies and increase the government's credit line.

At the moment, each company may borrow only $2.25 billion.

In return for the capital, Paulson said that the Bush administration would ask Congress to grant the Fed a "consultative" role in the capital standards of the companies.

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