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Jeff Bailey : 7/17/2008 1:53:58 AM

EIA US Refinery Table I track/tabulate with various benchmarks Link

Jeff Bailey : 7/17/2008 12:13:46 AM

I'd have to go with "busy bee" ... % Utilization 89.49%.

Jeff Bailey : 7/17/2008 12:09:46 AM

Wow! Either refiners have been busy bees, or there's really been some demand destruction. They've got Total Distillate inventories +2.83% vs. year-ago and Heating Oil down just 5.15% from year-ago.

Jeff Bailey : 7/16/2008 11:46:40 PM

Not sure if Jane was able to keep up with all of today's economic reports on Tuesday and Wednesday.

Busy for sure Link

Jeff Bailey : 7/16/2008 11:39:17 PM

On FFIV's bar chart Link , I've left in place the trend from the 07/27/07 high to that 10/08/07 high. We blew out of the rest of the FLK-AH's on 10/19/07, just below that trend. I could place another downward trend from 07/27/07 high to that "trap" inflection high from 10/23/07, but extension of that trend currently up at $37.36.

Upward trend from 04/08/08 low to 07/01/07 pullback low, very correlative with the trending higher 50-day SMA ($29.48) at this point.

Jeff Bailey : 7/16/2008 11:36:46 PM

Have a put on FFIV Link and its one of the 24.58% above its 50-day SMA. Monitoring closely. Very closely as it is also starting to sit on top of bar chart downward trend that was broken to upside on 07/10/08.

Jeff Bailey : 7/16/2008 11:18:27 PM

I see Dorsey/Wright's OTC 10-week bullish % (percentage of stocks trading above their 50-day SMA) reversed up to "bull alert" status today at 24.58% (24% chart). In May it reached 60%, reversed lower in late-May at 54% and has plunged to 18%. In January it fell to 18% too!

Jeff Bailey : 7/16/2008 11:04:11 PM

SPX's NH/NL was 2:24. 500 group "narrow" compared to what we look at with NYSE Comp (+3000 stocks) and NASDAQ Comp (+3000 stocks).

Can always go to 0.00 and daily ratios have come close at 1.2%. Wednesday's daily ratio 7.7%, 5-day 2.8% and 10-day 3.9%.

Jeff Bailey : 7/16/2008 10:55:48 PM

Closing Internals at this Link

Jeff Bailey : 7/16/2008 10:48:56 PM

RUT.X's NH/NL Wednesday was 20:73. Daily ratio 21.5%, 5-day 8.7% and 10-day 7.1%.

Jeff Bailey : 7/16/2008 10:43:00 PM

Closing U.S. Market Watch at this Link

Keene Little : 7/16/2008 10:46:13 PM

Thursday's pivot tables: Link and Link

The rally we've seen since Tuesday's low is strong but so far it's only a 3-wave bounce and as such is just a correction of the larger decline. If it turns impulsive with a 5-wave move up then I'll get more bullish about the bounce. In the meantime know that bear market rallies tend to be strong and then they stop and the selling begins again.

Until proven otherwise I think we should expect lower lows this month but what I'm not sure about is whether we can expect a little more rally (even if it's choppy) or if instead the market is ready to head lower now. At the end of the day Wednesday I showed an idea for a sideways triangle to play out over the next week before we get the 5th wave down for the decline from May, shown in dark red on the daily chart: Link

Zooming in a little closer with a 120-min chart I also show the possibility, in pink, for a pullback on Thursday and then another leg up to complete a larger a-b-c bounce up to perhaps 1257 by the end of the day Friday and then the 5th wave down next week. Depending how it plays out (and assuming we're going to get either of the two corrections), the downside projection for a tradable bottom will be 1190 (pink) or 1165 (dark red) by the end of the month or early August. Link

If SPX manages to get above 1278 then we could be into the multi-week rally to correct the decline from May but as I currently see it that's not the higher probability scenario. If you're itching to get long the market keep your powder dry--I think you'll have a much better opportunity after the next new low (for a rally back up to about 1300 in September).

Jeff Bailey : 7/16/2008 10:41:56 PM

All be darned ... PTR $128.51 +4.96% ... has come very close a couple of times to trading that $120 strike hasn't it?

Just looking over trade blotter. PTR-SD $0.10 x $0.35. (see 06/19/08 then 06/26/08)

OI Technical Staff : 7/16/2008 9:59:59 PM

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

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

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

Jeff Bailey : 7/16/2008 9:35:41 PM

Most Actives ... SPY $124.01 +2.49%, XLF $19.30 +12.40%, WFC $27.23 +32.76%, BAC $22.67 +22.40%, QQQQ $45.34 +2.48%, C $16.47 +13.11%, FRE $6.83 +29.84%, WM $4.53 +25.48%, WB $10.54 +16.07%, FNM $9.25 +30.83%

Financials strong today!

Jeff Bailey : 7/16/2008 9:24:45 PM

10-year Yield ($TNX.X) finished up 9.0 bp at 3.934%. Actually closed ABOVE its QRTLY Pivot!

Jeff Bailey : 7/16/2008 9:02:43 PM


I'm going to anticipate some questions, and perhaps some confusion regarding "short sales."

Let's first explain, or understand two (2) terms.

Short Sale: The act of borrowing a security, then selling that security.

Naked Short Sale: The act of selling a security that is neither owned, or borrowed.

Yesterday's SEC Emergency Order (see 06:36:29 PM Post) is in regards to naked short sales.

What the SEC is trying to do is not allow a broker/dealer, or market maker in most cases, the ability to sell "naked." That is ... to allow market participants the ability to sell securities of primary dealers, without first being able to borrow those securities.

Tonight's news out of the SEC (see 06:35:50 PM Post) now has the SEC most likely looking at providing some type of "exemption" for market makers.

To understand the need for this "exemption," all you have to do is think like a market maker, and understand what a market maker's OBLIGATION is, should a market particpant PURCHASE a PUT option (the purchase of a put option give the buyer the RIGHT to SELL a security at a given strike price) from an option market maker.

Most often, when a PUT option is PURCHASED from an options market maker, the market maker of that option will SHORT SALE, or "NAKED" SHORT SALE the underlying security in an attempt to hedge the market maker's RISK, should the underlying security's PRICE fall more than the STRIKE + option premium received.

What the SEC probably dealt with today was options market makers saying "I can't find stock to borrow" in order to offset all the PUTS that have been purchased, thus I can't hedge my RISK!"

Certainly WFC's earnings and raising of dividend provided "shock" value today for a very strong round of buying.

Remember OSTK's complaints several quarters ago that there was a trader that was "naked" selling short the company's shares. Where the number of shares short were GREATER than the actual number of shares outstanding?

That is indeed illegal, and a form of "stock manipulation."

However, I do think the SEC will have to revise yesterday's Emergency Order.

I could also envision some of today's SHARP rise in financials attributed to FORCED NAKED SHORT SALES beeing called.

Tab Gilles : 7/16/2008 8:03:36 PM

In reference to my 4:38PM post on the JPM Call Leaps; 3 month charts on the WJPAG, WJPAH & WJPAI. Link

Jeff Bailey : 7/16/2008 6:36:29 PM

SEC's Emergency Order from yesterday at this Link

Jeff Bailey : 7/16/2008 6:35:31 PM

Note to SEC ... re-visit the up-tick rule. Do it now.

Jeff Bailey : 7/16/2008 6:35:50 PM

SEC: Mulling naked short-sale exemptions for market makers.

Jeff Bailey : 7/16/2008 5:25:57 PM

Clicking down US Market Watch to see if any other equity-based index at/near 21-day SMA.

Jeff Bailey : 7/16/2008 5:24:55 PM

Dow Transports (TRAN) 4,915 +5.53% ... Closes above 200-day SMA (4,823), 150-day SMA (4,846) aaaaaaand right at its 21-day SMA (4,909.556) to be exact.

Jeff Bailey : 7/16/2008 5:20:16 PM

RUT.X did close above yesterday's high. Last Wednesday's, Thursday's, Friday's and this Monday's too.

Jeff Bailey : 7/16/2008 5:18:47 PM

NDX/QQQQ did close above yesterday's high.

Jeff Bailey : 7/16/2008 5:18:31 PM

OEX did close above yesterday's high.

Jeff Bailey : 7/16/2008 5:18:13 PM

SPX did close above yesterday's high.

Jeff Bailey : 7/16/2008 5:17:57 PM

INDU did close above yesterday's high.

Tab Gilles : 7/16/2008 5:13:27 PM

Weekly EIA Report Link

Jeff Bailey : 7/16/2008 5:14:50 PM

CME's Nov'09, May'10, Nov'10 and May'11 regional housing futures table Link

Jeff Bailey : 7/16/2008 5:14:44 PM

JPM $35.94 +15.86% ...

Per some of today's mentionings ...

WJP-AG $6.70 x $7.05
WJP-AH $4.55 x $4.90
WJP-AI $3.00 x $3.20

As of 07/15/07 close, JPM's Jan'10 "Max Pain" theory tabulation was $35 ($2.50 and $5 increments)

Tab Gilles : 7/16/2008 4:38:47 PM

JP Morgan/Chase (JPM) $35.94 +$4.92 (15.86%)

Will JPM rally to $50+ in continuing the inverse asymmetrical triangle pattern I highlighted will over 2 weeks ago?

Tab Gilles : 6/30/2008 9:50:04 AM JP Morgan/Chase (JPM) $34.86 Many investors wonder if the banks have bottomed? Looking at JPM, $32 looks like nearterm support. Link JPM rallied in March on the Bear Stearns news, but has since given all that back. Link

Fibaonnaci Retracments from May high/ July low. Link

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.

Those call LEAPS should perform nicely if the earnings report tomorrow is bullish.

Jeff Bailey : 7/16/2008 4:33:27 PM

DXY's 04:00 tick was 72.069. Let's call it 72.07.

Jeff Bailey : 7/16/2008 4:32:17 PM

NVIDIA (NVDA) $11.32 +0.53% ... horrible, just horrible.

Jeff Bailey : 7/16/2008 4:28:33 PM

Too often I see traders trying to sell short the best of breed, when the muts outperform to the downside.

If market participants don't like what JPM has to say, then I would think BAC gets driven further into the ground.

Jeff Bailey : 7/16/2008 4:26:47 PM

So far Tab! ... As subscribers have learned, "buy the best of breed," and sell the muts.

Jeff Bailey : 7/16/2008 4:24:22 PM

Ebay Inc. (EBAY) $28.10 +4.49% ... falls to $26.33 on headline numbers.

Jeff Bailey : 7/16/2008 4:23:37 PM

Yum Brands (YUM) $36.47 +2.84% ... jumps to $37.36 on headline numbers.

Tab Gilles : 7/16/2008 4:21:08 PM

JPM....Best of Breed!

Jeff Bailey : 7/16/2008 4:18:12 PM

CNB is component of S&P 400 Midcap

Tab Gilles : 7/16/2008 4:18:10 PM

EBAY Earnings 43 cents on estimates of 41 cents

Jeff Bailey : 7/16/2008 4:15:27 PM

Thank you Tab! Thank you, thank you, thank you!

Tab Gilles : 7/16/2008 4:14:32 PM

Followup to 10:37AM post on the strong performance on the banks today.

Those that reported today: Link

JP Morgan (JPM) reports tomorrow, lets see if the rally ignited by Wells Fargo (WFC) has more to go on their earnings report prior to the open.

Banks reporting tomorrow: Link

Jeff Bailey : 7/16/2008 4:04:28 PM

Good gravy! ... DJUSHB 264.83 +10.25% ...

Jeff Bailey : 7/16/2008 4:02:15 PM

JBLU's 06/20 benchmark close was $3.95

Jeff Bailey : 7/16/2008 4:01:13 PM

USO $108.87 -3.13% ...

Jeff Bailey : 7/16/2008 3:59:53 PM

Dumping some JBLU $3.92 +23.27% here to the close.

Linda Piazza : 7/16/2008 3:58:45 PM

Um, Jeff, I'm not quite sure how to answer that question!

Actually, the TED spread is currently 1.42. It's been in this neighborhood since my last post about it, at 1:45:24.

Jeff Bailey : 7/16/2008 3:53:37 PM

Not me here ... did my buying yesterday and this morning.

Jeff Bailey : 7/16/2008 3:52:50 PM

PHF $7.75 (unch) ... here they come.

Jeff Bailey : 7/16/2008 3:52:17 PM

Linda ... gett'n some TED today?

Jeff Bailey : 7/16/2008 3:51:43 PM

by-golly ... Tyson Foods (TSN) $16.13 +4.80% ...

Jeff Bailey : 7/16/2008 3:49:12 PM

QQQQ, IWM, SPY and DIA (clockwise "strongest" to "weakest") at this Link

Scrambled the other night to mention the trends in QQQQ and IWM.

Linda Piazza : 7/16/2008 3:44:45 PM

For reference, Friday's OEX swing high was 575.10. The OEX still has a ways to go to top that.

If bears aren't successful soon in stalling this action, there could be some short-covering into the close. If bulls are too skittish, though, they'll help the bears and start bailing out of their positions into the close. What should you do? First, you shouldn't think that just because the OEX is testing the 10-sma that this is a guarantee that it will be successful in staying above it now or into the rest of this week. We saw the same sort of tests with the same sort of tall green candles a couple of times along the way down. It's possible that this will be the time that the OEX finally bounces above that average and climbs strongly, perhaps for several days, but it's not a given.

Jeff Bailey : 7/16/2008 3:44:14 PM

QQQQ $45.36 +2.50% ... bugger neve did give up its.

Jeff Bailey : 7/16/2008 3:43:49 PM

IWM $68.38 +3.79% ... tries to reclaim its conventional 19.1%.

Keene Little : 7/16/2008 3:42:29 PM

As you can see on the SPX chart just posted, a push higher could run up to 1245 before hitting the top of the larger up-channel (and may be the extent of today's rally unless we get some good short covering into the close).

Jeff Bailey : 7/16/2008 3:41:36 PM

How-bout them small caps! RUT.X +3.37%

Jeff Bailey : 7/16/2008 3:41:09 PM

Hey looky there ... INDU 11,98.74 +2.15% ... above its WKLY Pivot.

Keene Little : 7/16/2008 3:40:53 PM

Today's climb has been orderly and is currently pressing the top of a parallel up-channel for today's rally: Link

Linda Piazza : 7/16/2008 3:40:20 PM

VXO now 26.68. OEX bulls want it to stay below 27.

Jeff Bailey : 7/16/2008 3:37:19 PM

Big earnings report tonight indeed.

Jeff Bailey : 7/16/2008 3:36:33 PM

JPM vs. C relative strength chart Link

Jeff Bailey : 7/16/2008 3:35:14 PM

JPM vs BAC relative strength chart Link

Jeff Bailey : 7/16/2008 3:31:27 PM

JPM by far the stronger bank among the SPX heavyweights. Anyway you slice it ... 5, 20 or Yr.

Jeff Bailey : 7/16/2008 3:29:13 PM

Look at INTC's 5, 20 and Yr relative to SPX

Tab Gilles : 7/16/2008 3:28:06 PM

JP Morgan Chase (JPM) $34.64 +$3.61 (11.64%) Reports earnings before the bell tomorrow.

Jeff Bailey : 7/16/2008 3:27:32 PM

SPX Heavyweights into the close Link

Tab Gilles : 7/16/2008 3:26:54 PM

Proshares Ultra Financial (UYG) Levered 2:1: $17.56 +$2.81 (19%)

Tab Gilles : 7/16/2008 3:24:38 PM

NYSE New Lows/SPX/ VIX Link Nasdaq New Lows/ NDX/ VXN Link

Linda Piazza : 7/16/2008 3:24:45 PM

The OEX's daily 20-sma is at 570.52. I actually prefer to watch the 9-ema, and that's currently at 569.64. Whichever is your preference, the OEX is rising up into a test of these moving averages again, something it's done almost every 5-6 days as it's slid all the way down from the May high. There was even one daily close above the 10-sma, on 6/05, but that's the only close above that average since 5/19. Every other test of this moving average has resulted in the OEX being slapped back again.

Obviously, this pattern will change at some time. The decline has stretched out long and many believe that a relief rally is long overdue. I thought it would come three weeks ago. However, what's not so obvious is whether this is the time that the OEX will push above that moving average sometime this week and go on to rally. All we know is that this 10-sma has been a dangerous spot for bulls for two months. So, as these moving averages are closely approached, assess your risk and make decisions about how much you want to carry home with you tonight ahead of important earnings from financials tomorrow as well as economic releases such as housing starts and building permits (8:30 am ET), unemployment claims (8:30), and the Philly Fed at 10:00. In addition, Federal Reserve Governor Randall Kroszner will be speaking in Chicago tomorrow at 9:10 am ET.

Linda Piazza : 7/16/2008 3:15:54 PM

As the OEX approaches potentially strong resistance, now having touched the 568 level that I began mentioning this morning, OEX bulls need to have a plan if they haven't developed one already. Will you stay in overnight? If not, then you need to consider whether you'll cinch up your stops now so that you get taken out near the high of the day if the OEX should start dropping. Or, if you're convinced that the OEX is going higher and intend to stay in overnight but fear some volatility near here, you might elect to widen stops. There's no right or wrong way to do this, except for one: I absolutely, 100% in this market would not let a profitable trade turn into a losing one.

Linda Piazza : 7/16/2008 3:07:43 PM

The VXO is 27.00, just above yesterday's 26.99 low. It has violated Keltner support, but the shape of its decline looks a little suspect and it certainly has been reluctant, if I can be allowed a little anthropomorphism, to fall below yesterday's low.

Jeff Bailey : 7/16/2008 2:58:11 PM

Not much premium difference showing up there.

Jeff Bailey : 7/16/2008 2:54:18 PM

FXY 95.13 -0.09% ...

FXY-HO call 2.65 x 2.90 (sold yesterday with FXY @ $95.24)

Keene Little : 7/16/2008 2:59:30 PM

Notice also that RSI on the daily chart is starting to poke its head over the downtrend line from the June high. That's normally a good indication that that leg down is finished (the 3rd wave of the decline from May). That's one of the reasons I'm thinking we may have started wave (iv) and have wave (v) to go after that (which should then show bullish divergence against yesterday's low).

Keene Little : 7/16/2008 2:49:39 PM

The size of today's bounce has me thinking we may have started the larger 4th wave correction in the decline from May. As depicted on the daily chart it could run sideways over to the top of its down-channel next week before making a final low in early August. The consolidation/bounce pattern is just a guess at this point but it would be a fitting type of correction for the 4th wave before the 5th wave down. Link

Jeff Bailey : 7/16/2008 2:49:11 PM

More focused yesterday Linda, just checking today my comments yesterday regarding "key reversal"

Good to see the VIX.X back below WKLY Pivot today for SPX-related naked put sellers.

Linda Piazza : 7/16/2008 2:47:16 PM

Jeff and I were looking at various volatility indices at the same time, it appears. Everyone is looking at them, I imagine.

Linda Piazza : 7/16/2008 2:45:55 PM

VXO is 27.20. OEX bulls would like to see it drop below and stay below 26.99, yesterday's low.

Jeff Bailey : 7/16/2008 2:42:15 PM

VIX.X 25.77 -9.70%

RVX.X 30.44 -7.81% ...

Jeff Bailey : 7/16/2008 2:41:35 PM

UWM-HS $3.50 x $4.00.

Linda Piazza : 7/16/2008 2:39:23 PM

Jane, thanks for posting that chart in your 2:33:05 post. I was just remembering that chart a couple of days ago and had meant to ask you what it was showing.

Jeff Bailey : 7/16/2008 2:39:20 PM

RUT.X now probes Monday morning's opening tick high.

Jeff Bailey : 7/16/2008 2:39:03 PM

SPX +1.61% ...

RUT.X +2.63% ...

Jeff Bailey : 7/16/2008 2:36:53 PM

Institutional traders LOVE to sell premium.

Jeff Bailey : 7/16/2008 2:35:15 PM

Keep highlighting the WKLY/MONTHLY/QRTRLY pivot matrix levels. Make the notes.

Jane Fox : 7/16/2008 2:33:05 PM

It has been a while since we visited the jtHMA charts but I thought I would give you an update on the monthly SPX chart. Link

Jeff Bailey : 7/16/2008 2:32:24 PM

SPX 1,233.58 +1.54% ... Above DAILY R1, but BELOW WKLY Pivot.

Linda Piazza : 7/16/2008 2:32:06 PM

OEX bulls should know ahead of time how they'll treat a test of 568-569.40. There's potentially strong resistance there.

Jeff Bailey : 7/16/2008 2:31:46 PM

VIX.X 25.99 -8.93% ... under WKLY Pivot and DAILY S1.

Jane Fox : 7/16/2008 2:31:11 PM

Here is how the markets are trading in relation to their overnight ranges. Link

Jeff Bailey : 7/16/2008 2:29:24 PM

NYSE daily NH/NL ratio 5.4%

NASDAQ's 17.5% at your 02:00 benchmark.

Jane Fox : 7/16/2008 2:27:35 PM

Here are the charts of the VIX and the S&P futures (ES). As you can see they are in alignment today. Link

Jeff Bailey : 7/16/2008 2:25:08 PM

02:00 Internals at this Link

Linda Piazza : 7/16/2008 2:17:20 PM

The VXO is not diving beneath Keltner support now at about 27.50 on 30-minute closes. It's clinging to it, so the danger of a VXO bounce and consequent decline in equities remains. There's nothing predictive here. We expect to see the volatility indices testing support while equity indices test resistance. This just shows continued vulnerability to a rollover, but anyone who has traded through these last weeks knows that vulnerability exists already. VXO at 27.59 as I type. OEX bulls would like to see it drop below 27 and stay there.

Jeff Bailey : 7/16/2008 2:16:17 PM

Yesterday's 52-week High and Low Sector Tabulations from my good friends at Dorsey/Wright Link

Linda Piazza : 7/16/2008 1:57:30 PM

The OEX's potential support on 30-minute closes is at about 463.45. OEX bulls would like to see this hold on 30-minute closes. As I've been mentioning all day, sustaining levels above this Keltner level may be tough because the moment the OEX scrambled above this level, it was immediately faced with further potential resistance layered thickly all the way up through many points. Currently, the strongest is potential resistance on 15-minute closes near 565 and then at 567.86. OEX at 564.01 as I type.

Linda Piazza : 7/16/2008 1:45:24 PM

TED spread 1.43, between its 1.40 low and 1.47 high of the day.

Linda Piazza : 7/16/2008 1:36:16 PM

The A/D line is now above the potential upside target projected by its confirmed inverse H&S, with that upside target in the +1100 range. The A/D line is also more closely approaching the potential historical and Keltner resistance on 15-minute clsoes from about 1500-1650. Bulls don't want to see the A/D line give way suddenly. Here's a chart showing the Keltner resistance being approached: Link

Linda Piazza : 7/16/2008 1:29:44 PM

The VXO is testing that potentially significant support on 30-minute closes, with that support extending down to about 27.71 and with the VXO a bit below that, at 27.54 as I type. The early morning low from yesterday was 26.99, so support may extend a bit lower. Now that this support is being tested, OEX bulls don't want to see a strong spring back above it. They want the 27-28.09 level to serve as resistance now on 30-minute closes.

Keene Little : 7/16/2008 1:27:57 PM

I'm not entirely sure what's playing out today but it's sure looking like SPX is going to be able to exceed yesterday high at 1234. The move up from this morning's low does not look impulsive and therefore keep an eye on SPX 1237.75 (two equal legs up today) if it gets there. This could be ending a larger bounce off yesterday's low. There's a downtrend line from the July 9th high sitting near 1236.50 so that also could be resistance.

Linda Piazza : 7/16/2008 1:27:46 PM

The OEX is attempting to break through the next level of resistance on 15-minute closes, now at about 565. The OEX is 565.25 as I type. If it stalls at this level, OEX bulls would like to see pullbacks find support near 563-563.40.

Jeff Bailey : 7/16/2008 1:13:51 PM

PHF's most recent holding update (06/30/08) at this Link (pdf format)

Jeff Bailey : 7/16/2008 1:06:24 PM

DJUSHB 251.08 +4.52% ...

Jeff Bailey : 7/16/2008 1:06:05 PM

NAHB: US Home Builders' Confidence Index hits new low. July come in at 16 Vs. 18 in June.

Jeff Bailey : 7/16/2008 1:04:52 PM

Moody's saying credit quality trends still "fairly negative" in Q2. Airlines, nonlife insurance, real estate/construction, and media/entertainment companies experiencing the largest percentage of downgrades.

The upgrade-downgrade ratio increased slightly in Q2 to 0.33 from Q1, but 4.2% of all issuers were on watch for downgrade, compared with 1.9% on review for upgrade. At the same time, 13.9% of rated issuers were given negative outlooks, compared with 5.6% with positive ones. Airline and building materials industries have substantially more issuers with negative outlooks than positives according to Moody's.

Geographically, the US and Canada have the largest percentage of issuers with negative outlooks, while Europe, Asia-Pacific and Middle East and Africa have the largest percentage of positive outlooks.

Linda Piazza : 7/16/2008 1:03:47 PM

The OEX just completed its first 30-minute close above its 30-minute 45-ema since Wednesday, 7/9. Remember that we need to see that moving average sustained as support as the OEX tests further resistance that is layered in regular intervals up to 568 and beyond.

Linda Piazza : 7/16/2008 1:01:50 PM

I've said this many times lately, but I'm getting older now so I don't mind repeating myself: if you've got some JUL bull put credit spreads and you can close them out for a pittance, think about doing that. You've seen examples of what can happen in this market. A cratering in those indices with options that stop trading tomorrow could cause you great grief. If you weren't around last August, some of us will be glad to testify to that fact. I can't of course testify that markets are going to crater tomorrow. I don't know what they're going to do tomorrow.

I would go further. Did you have some bull put spreads that you barely escaped having to close out for a massive loss yesterday? If so, you might consider removing at least some of the risk today, even if you have to pay a little more than the credit you took in. It doesn't have to be all or nothing. For example, if you had 15 contracts of something with a sold strike that very nearly got hit yesterday, consider whether you might want to close a few of those contracts today to reduce risk. Knowledgeable brokers will have other advice for handling exposure to too much risk, so if you have one of those brokers, you might contact your broker for ideas for your particular exposure.

Linda Piazza : 7/16/2008 12:53:39 PM

I think T. Boone Pickens was probably in agreement with you, Keene, and not sticking to the penny of that $150.00 target! The questioning was on the lines of how much higher was it going to go and looking at predictions others had made of much higher crude prices by the end of the year. If I'm remembering correctly--and I'm not sure I am--he thought that demand destruction might result in a pullback that would keep the $150-ish level as a cap for the year. I'm just not remembering whether he thought crude would climb back to that level by the end of the year.

Jeff Bailey : 7/16/2008 12:50:29 PM

SPX and RUT's NH/NL measures with my ratios from 03/03/08 to 04/30/08 at this Link

Keene Little : 7/16/2008 12:46:28 PM

Linda, I don't ever like to have a different opinion than very smart people like T. Boone Pickens. So in this case I'll say that $147.90 was close enough to his $150 and he was right (smile). Down we go now.

Linda Piazza : 7/16/2008 12:42:18 PM

TED spread is 1.40, a new low for the day, down from the 1.47 high. The 1.40 is still a high number, of course. Before the TED spread exploded higher last August, its traditional range had been 0.10-0.50.

Linda Piazza : 7/16/2008 12:40:41 PM

Keene, last week, I noted that when interviewed on CNBC and asked to give a target high for the year, T. Boone Pickens said he was still sticking with his $150 prediction. Crude was near $150 at the time.

Linda Piazza : 7/16/2008 12:39:07 PM

I posted earlier that the OEX's resistance looked so significant that it was either going to take a strong surge to break it or some time spent battering away at it, if the OEX was even going to be able to break it, which wasn't a given. We've had some time, but I'm not sure it's enough yet. The OEX is attempting to break through the first level of resistance as I type, with that now near 563.30 on 30-minute closes, but it will then slam right into potentially strong resistance on 15-minute closes now at about 565 and then 568. That makes it possible that the OEX might get through the first level, or at least keep piercing it but keep getting knocked back. We unfortunately don't yet know the outcome of all this.

Keene Little : 7/16/2008 12:39:05 PM

Oil is headed back below $100, maybe back to $90 and it could get there before the end of the year. And no, I'm not going to share with you what I'm smoking--it's mine (wink). The rise in oil formed a rising wedge for this year's rally and price broke the bottom of it today (following some very clear bearish divergences).

If it's a true break and not just a head-fake break then oil has topped. If this daily chart were of any other symbol I'd be saying it will retrace back to the start of the wedge (either $100 or $90) relatively quickly (faster than it took to build the wedge): Link . USO puts anyone?

Jeff Bailey : 7/16/2008 12:30:45 PM

NYSE and NASDAQ's various INTERNAL measures with my ratios from 03/03/08 to 04/29/08 (out of office in late April) at this Link

Jeff Bailey : 7/16/2008 12:24:15 PM

That reminds me ...

Jeff Bailey : 7/16/2008 12:21:03 PM

Most Actives ... QQQQ $44.72 +1.08%, FRE $6.09 +15.77%, INTC $20.93 +1.06%, IWM $67.24 +2.06%, XLF $18.29 +6.52%, SPY $122.63 +1.35%, CSCO $21.16 +0.52%, MSFT $26.48 +1.26%, WFC $25.35 +23.54%, MER $25.84 +4.65%

Jeff Bailey : 7/16/2008 12:18:23 PM

12:00 Internals found at this Link

Jane Fox : 7/16/2008 12:14:14 PM

The TRIN started the day at 0.59 so that should have told us the bulls were lurking today.

Jeff Bailey : 7/16/2008 11:59:40 AM

Live ...

FXE 158.78 -0.32%
FXY $95.35 +0.13%
FXB $200.18 -0.27% ...

Jeff Bailey : 7/16/2008 11:58:22 AM

DXY 71.99 +0.16% (30-minute delayed) ...

Jeff Bailey : 7/16/2008 11:57:31 AM

USO $109.00

Jeff Bailey : 7/16/2008 11:55:13 AM

USO $109.23 -2.81% ...

Linda Piazza : 7/16/2008 11:55:01 AM

Repeating myself, the OEX has to produce 30-minute closes above a Keltner line that's now at 563.34 before it even begins to change its tenor, and then it has to sustain those closes, which might be the harder task. OEX at 561.16 as I type.

Keene Little : 7/16/2008 11:49:16 AM

First order of business for the banks is to get above the bottom of its down-channel for the price decline from the beginning of May, currently near 146, which is where this morning's rally stopped (240-min chart):

This is a common resistance level--the bottom of a broken down-channel (or support at the top of a broken up-channel). The bounce off yesterday's low is so far only a 3-wave bounce (therefore just a correction) so they'll need to keep this rally alive otherwise new lows may be coming sooner rather than later. Link

Jane Fox : 7/16/2008 11:47:15 AM

Here are the internals and they have turned nicely bullish. Link

Jeff Bailey : 7/16/2008 11:46:58 AM

So different, yet so similar.

Jeff Bailey : 7/16/2008 11:46:27 AM

RUT.X ... -20.82% 52-weeks.

INDU -20.90%

Linda Piazza : 7/16/2008 11:45:26 AM

The A/D line is current 834. If it pulls back rather than continuing its sideways move, equity bulls would like to see it maintain 30-minute closes above about 400-450.

Linda Piazza : 7/16/2008 11:44:19 AM

The VXO is stalling its descent as it more closely approaches potential support on 30-minute closes that now ranges from 27.78-28.36. The VXO is currently 28.77.

Jeff Bailey : 7/16/2008 11:43:58 AM

At last night's close, "Top 10" sort would have been ... XOM (4.10%), GE (2.51%), MSFT (1.98%), PG (1.85%), JNJ (1.80%), T (1.79%), CVX (1.74%), IBM (1.6), AAPL (1.41%), WMT (1.23)

Keene Little : 7/16/2008 11:42:38 AM

The banks are clearly benefitting from a strong bout or short covering. Who knows, maybe the SEC rule limiting how you can short the bank stocks might even be having an influence. Usually these kinds of interferences in the market have unintended consequences (and usually negative) but that obviously remains to be seen.

In the meantime I think we could get the bigger bounce in the banks (BIX) that I've been looking for--perhaps a rally back up to around 175-180 by the middle of August (to get up and over to the top of its down-channel for price action since the March low). Following that should be another drop lower into October before putting in a longer-lasting bottom. Daily chart: Link

Jeff Bailey : 7/16/2008 11:39:08 AM

SPX Heavyweights Link

Jeff Bailey : 7/16/2008 11:35:33 AM

So far this month .... Once the IWM was able to hold a 60-minute interval close above its WKLY Pivot ... the IWM has NOT been able to hold a close above a WKLY Pivot for more than seven (7) intervals (test 2).

Jeff Bailey : 7/16/2008 11:33:19 AM

IWM $67.11 +1.86% ... 60-minute interval complete. QCharts' WKLY Pivot $66.83.

Jeff Bailey : 7/16/2008 11:32:08 AM

XLF $18.23 +6.17% ...

Jeff Bailey : 7/16/2008 11:30:43 AM

VIX.X 27.00 -5.39% ... on the button.

Jeff Bailey : 7/16/2008 11:29:58 AM

USO $108.68 -3.30% ... still off the button.

Jeff Bailey : 7/16/2008 11:28:56 AM

BAC $20.00 +8.10% ... on the button.

Jeff Bailey : 7/16/2008 11:28:39 AM

GLD $95.00 -1.21% ... on the button.

Jeff Bailey : 7/16/2008 11:27:05 AM

OEX 560.54 +0.81% ... almost forgot.

Jeff Bailey : 7/16/2008 11:25:48 AM

SMH $29.08 +2.61% ... almost to WKLY R1

Jeff Bailey : 7/16/2008 11:25:19 AM

BIX 145.03 +13.22% ...

Jeff Bailey : 7/16/2008 11:24:51 AM

INDU 11,070 +0.98% ...

Jeff Bailey : 7/16/2008 11:24:33 AM

SPX 1,224.09 +0.75% ...

Jeff Bailey : 7/16/2008 11:24:10 AM

RUT.X 673.18 +1.63% ... once again, looking back over its shoulder.

Jeff Bailey : 7/16/2008 11:23:38 AM

QQQQ $44.70 +1.03% ... after a test of its WKLY Pivot.

Linda Piazza : 7/16/2008 11:19:37 AM

The OEX pauses beneath expected resistance. If it pulls back, those hoping for more gains would like to see it find support on 15-minute closes at about 561. OEX at 562.39 as I type.

Jeff Bailey : 7/16/2008 11:14:42 AM

Sector Losers ... Gold Bugs -3.16%, CBOE Oil -3.15%, AMEX Nat Gas -3.06%, Oil Service -2.65% and "junk bond" PHF -3.48%

Linda Piazza : 7/16/2008 11:14:02 AM

The VXO drops closer to that potentially strong support on 30-minute closes that I mentioned earlier. That support ranges down to 27.71 currently, with the VXO now at 28.56. OEX bears want a bounce from this support while bulls want to see the VXO cave beneath it. If this were an equity, I would say that the VXO is likely to at least stall its decline there, but the VXO isn't like equities. It moves suddenly, piercing levels and then as suddenly reversing. We just have to wait it out and see what happens, but bulls and bears should both be aware of the test going on.

Jeff Bailey : 7/16/2008 11:10:59 AM

Dow Transports (TRAN) 4,837 +3.86% ... back above 200-day SMA. 150-day SMA just ahead at 4,845

Linda Piazza : 7/16/2008 11:10:24 AM

The TED spread is now 1.41, its low of the day. We need to see it way lower.

Jeff Bailey : 7/16/2008 11:08:36 AM

AMR Corp. (AMR) $5.51 +24.94% ...

Linda Piazza : 7/16/2008 11:06:55 AM

The A/D line just closed a 30-minute period above the resistance now near +450. Those who want to see further equity gains want to see the A/D line hold that support on 30-minute closes and then keep climbing toward +1600, its next potential Keltner target. Reaching a potential target is not a given, of course. Bulls should be aware that the projected upside target from the A/D line's inverse H&S is only about +1100. With the A/D line at +933 as I type, equity bulls should be aware that it might soon be moving into tough resistance. Adjust your stops appropriately.

Jeff Bailey : 7/16/2008 11:02:40 AM

Swing trade sell NAKED Put alert! ... for one (1) of the US Oil Fund USO Aug. $93 Puts (IYS-TO) at the bid of $1.40.

USO $108.26 -3.66% ...

Keene Little : 7/16/2008 11:01:58 AM

The bounce off this morning's low is so far only a 3-wave bounce and therefore just a correction. Yesterday's high remains the key level for the bears to remain short against.

Jeff Bailey : 7/16/2008 10:59:30 AM

USO $108.12 -3.79% ... $1 box Link and $0.50 box to match futures with volume turned on Link

Linda Piazza : 7/16/2008 10:56:22 AM

That early 38-ish high on the VIX has distorted all my intraday charts, so I'm watching the VXO, which is probably more useful for OEX traders anyway. Just as the OEX has potentially strong resistance not far overhead, the VXO has potentially strong support not far below. That support is on 30-minute closes and is now at 27.69-28.06 with the VXO at 28.87 as I type. The volatility indices sometimes move quicker than the equities, although they're not always a reliable market-timing tool, but you might keep the VXO on your radar screen.

Jeff Bailey : 7/16/2008 10:54:15 AM

USO $108.00 .... At last night's close, USO's August "Max Pain" theory value was $114.

Jeff Bailey : 7/16/2008 10:51:58 AM

Fixed income traders might want to start nipping away at some longs in PHF $7.48 -3.48% again.

Jeff Bailey : 7/16/2008 10:51:04 AM

IWM $66.85 +1.47% ...

Jeff Bailey : 7/16/2008 10:50:50 AM

RUT.X 670.61 +1.24% ...

Jeff Bailey : 7/16/2008 10:50:08 AM

USO $108.15 -3.77% ...

FXE $158.85 -0.27% ...

Linda Piazza : 7/16/2008 10:49:29 AM

OEX bulls want a 30-minute close above a Keltner line now at 563.54 as a first sign of improvement, as mentioned earlier. Remember, though, that the OEX is going to be ensnared in potential resistance in close layers up to about 568, so it's going to take either a strong surge or else some time battering away at this resistance before it can be breached, if it is. Just as the possibility of that surge through resistance exists, the possibility of a downturn below it remains and must be considered.

Jeff Bailey : 7/16/2008 10:48:47 AM

IWM $66.92 +1.57% ... edges above WKLY Pivot. Has NOT been able to hold a 60-minute interval above the WKLY Pivot all week (test).

Jeff Bailey : 7/16/2008 10:45:45 AM

Swing trade bearish long exit alert! ... for the 1/8 position in the ProShares Ultra-Short Russ 2000 (TWM) $82.74 -2.83% ...

Jeff Bailey : 7/16/2008 10:42:58 AM

Gasoline and Distillate estimates were for -200,000 and +1.5M.

Jeff Bailey : 7/16/2008 10:41:55 AM

EIA: US Distillate stockpile +3.2M barrels.

Jeff Bailey : 7/16/2008 10:41:25 AM

EIA: US Gasoline stockpile +2.4M barrels.

Linda Piazza : 7/16/2008 10:41:15 AM

A/D line now 552, approaching its 577 high of the day. Remember that it's now testing historical resistance near 600 as well as potential resistance on 30-minute closes now at about 425. Bulls need to see it break strongly higher and maintain closes above 425 into this 30-minute period's close.

Jane Fox : 7/16/2008 10:40:11 AM

Crude falls $5.00 due to surprise increase in inventories.

Jeff Bailey : 7/16/2008 10:40:05 AM

USO also below its July futures 6/20/08 futures settlement benchmark.

Jane Fox : 7/16/2008 10:39:24 AM

Crude now at $133.58

Jeff Bailey : 7/16/2008 10:39:20 AM

USO $108.50 -3.61% alert! ... slips below July "Max Pain" Theory of $109.00

Jane Fox : 7/16/2008 10:39:06 AM

Distillate stocks up 3.2 mln brls last week

Gasoline supply up 2.4 mln brls last week: .

Jane Fox : 7/16/2008 10:38:19 AM

Crude inventories up 3 mln brls latest week

Jane Fox : 7/16/2008 10:37:51 AM

Crude is reacting to the report and selling off.

Jeff Bailey : 7/16/2008 10:37:45 AM

EIA: US Crude Oil stockpiles +3.0M barrels.

Linda Piazza : 7/16/2008 10:37:44 AM

The A/D line has bounced from black-channel support, as seen in the A/D chart linked to my 10:05:40 post. That black-channel support is now about -320 with the 15-minute 9-ema now rising just beneath it, at about -380. Those hoping for a steadying in the markets want to see that continue to hold as support on 15-minute closes, but we have to recognize now the battle between this support and the resistance showing up on the 30-minute chart, currently at about +380 on 30-minute closes. It hasn't been settled yet, and the 30-minute chart presents the possibility that the A/D line could sink all the way back toward this morning's -784 low and perhaps a little below it, testing that support level. For now, all we know is that the A/D line is in the upper or bullish half of both channels and that it's chopping around between support and resistance. This is good as far as it goes, but we really don't have any prediction of eventual outcome yet.

Jeff Bailey : 7/16/2008 10:36:49 AM

USO $111.28 -0.98% ...

Jeff Bailey : 7/16/2008 10:35:43 AM

AMR Corp. (AMR) $4.79 +8.61% ... Earnings Press Release Link

Tab Gilles : 7/16/2008 10:37:08 AM

The Financials are on fire today, as Wells Fargo (WFC) beat estimates, $24.40 +19%.

Banks having reported or going to report today: Colonial Bank (CNB) $4 +8.1%; First Midwest (FMBI) $16.49 +17.8%; Nat'l Penn Bancshares (NPBC) $12.94 +11.1%; SY Bancorp (SYBT) $21.97 +6.75%; Valley National (VLY) $16.28 +12.74%...todays lemon Mercantile Bank (MBWM) $5.16 -4.31%

Banks reporting tomorrow:

Bank NY/Mellon (BK) $34.85 +2.2%; First Financial (FFIN) $44.74 +2.45%; Great Southern (GSBC) $8.12 +1%; Home Bancshares (HOMB) $21.56 -0.65%; Huntington (HBAN) $4.77 +2.8%; People's Untined (PBCT) $15.20 +4.25%; Provident (PBKS) $5.16 +8%; and my favorite JP Morgan Chase (JPM)$32.68 +5.93%....the lemon thus far is Flagstar (FBC) $3.28 -5.5%

Jeff Bailey : 7/16/2008 10:33:53 AM

Anglo American (AAUK) $27.08 -2.93% Link ... Goldman Sachs raises price target to 4495p from 4270p.

Will have to get out my currency translator, but AAUK going the wrong way.

Jane Fox : 7/16/2008 10:31:51 AM

I exit all my Crude positions 15 minutes before the report.

Jane Fox : 7/16/2008 10:31:03 AM

If you trade Crude remember the inventory report out at 10:35

Jeff Bailey : 7/16/2008 10:24:52 AM

10:00 Internals found at this Link

Keene Little : 7/16/2008 10:24:48 AM

I'm back and I see not a whole lot has happened in the first hour of trading. The techs were a little stronger yesterday and in last night's trading but they look just a bit weaker this morning. They tried to bounce the market but it doesn't look like it's going to hold. The only caution is to continue to be careful about choppy whipsaw price action this week.

Linda Piazza : 7/16/2008 10:24:22 AM

The A/D line's 30-minute chart presents the possibility that, unless today is going to see some real improvement, the A/D line's advances could be capped near today's high. There's a difference in the outlook on the 15-minute and 30-minute charts, then, so what we could see is some chop roughly between the parameters set in the first 45 minutes of trading: from +577 down to -784. It might be that it's only after such a period of chop that we know its ultimate direction since the two charts conflict. Those who want equity markets to improve would like to see the A/D line find support soon, at least at the rising 15-minute 9-ema on 15-minute closes, with that moving average at about -530. The A/D line is -344 as I type.

Linda Piazza : 7/16/2008 10:17:23 AM

The A/D line is pulling back from its test of historical resistance near +600. It's got potential support on 15-minute closes now near -400 and the 15-minute 9-ema has risen to about -600, so those who hope for a steadying in the market would like to see one of those hold. Actually, they'd rather the A/D line not even pull back that far. The A/D line is currently +10.

Linda Piazza : 7/16/2008 10:15:03 AM

I have a delayed quote but the TED spread is 1.44, with a high today of 1.47 and a low of 1.41. This one-week chart from Bloomberg shows what we've been up against this week, not including today, since Bloomberg's chart doesn't include it except on the one-day chart: Link For new subscribers, the TED spread is a measure of default risk, and rising default risk troubles equity markets.

Linda Piazza : 7/16/2008 10:11:40 AM

The OEX needs sustained 30-minute closes above a Keltner level now at 563.63 before it even begins to improve in tenor in any meaningful way. I have to warn that sustaining those closes might be difficult, too, because the moment the OEX is across that level, it will be hitting further potential resistance in the 565.50-567.80 zone. What's happening now is a relief from the dire mood but perhaps only a temporary one. Please keep your mind open to all possibilities. Don't think you know what will happen but continue to manage your trades and your account risk.

Linda Piazza : 7/16/2008 10:05:40 AM

Here's what I was watching on the A/D line this morning: Link Looking at that chart, you can see potential resistance looming, at about 1500. What's not as visible, since it's only a three-day chart, is potential historical resistance near 600 and then again near 800-1000. Markets are volatile and the A/D line can roll over at any moment, so keep it on your radar screen.

Jeff Bailey : 7/16/2008 10:04:42 AM

BAC $20.45 +10.42% ...

Jane Fox : 7/16/2008 10:03:20 AM

The SPX hit a low of 1200 yesterday which is ~ the 127.20% fib level of the March 17th to May 19th rally. This should be a support. Of course the market can do what it wants but there is one thing that is a guarantee and that is no market will continue down or continue up indefinitely. They all must take a rest and bounce in the opposite direction. When that happens is all guesswork on our part but it will happen. Link

Jeff Bailey : 7/16/2008 10:02:59 AM

BIX.X 143.02 +11.65% ... stong rebound early. Takes out yesterday's high with some "umph."

Jeff Bailey : 7/16/2008 9:57:08 AM

My 4-week moving average for Purchases Index edges lower to 350.4 from last week's 350.6. My 12-week moving average for Purchases Index was also lower to 355.5.

Jeff Bailey : 7/16/2008 9:53:42 AM

MBA's Weekly Application Survey at this Link

Linda Piazza : 7/16/2008 9:52:41 AM

The OEX has potential support on 30-minute closes right underneath its current 555.29 level. However, the 15-minute chart shows the potential for a further decline, to a potential short-term target near 552.46 and then at 551.48 if that fails as support. Obviously, I don't know which chart will be most predictive, but I'm closely watching the A/D line to see if it stabilizes at one of the support levels I've been mentioning. It's now at -729, close to the neckline for its confirmed inverse H&S.

Linda Piazza : 7/16/2008 9:49:24 AM

Traders should note that the A/D line has now dropped to potential support on 15-minute closes. The possibility exists that it could now stabilize, although that's not a given. The potential Keltner support on 15-minute closes is at about -550, with further potential Keltner support at -950 down to -1100. The A/D line is -623 as I type, but there's potential support for another source, too, near -800. Again, it's not a given that the A/D line will stabilize here, but there's an inverse H&S that's been confirmed on the A/D line by this morning's jump and a neckline test at about -800 is approaching.

Jane Fox : 7/16/2008 9:48:24 AM

LONDON (MarketWatch) -- The Securities and Exchange Commission has subpoenaed firms including Goldman Sachs , Deutsche Bank and Merrill Lynch as part of a growing effort to crack down on possible manipulation of Lehman Brothers and Bear Stearns stock, according to a Bloomberg report. The regulator is seeking trading records and emails the report said, citing people familiar with the situation. On Tuesday the regulator moved to curb short selling in the shares of primary dealers as well as Fannie Mae and Freddie Mac amid widespread concern that negative bets from short sellers have added to the sector's problems.

Jeff Bailey : 7/16/2008 9:48:19 AM

CME Aug'08-May'09 Regional Housing Futures Table at this Link

Jane Fox : 7/16/2008 9:45:38 AM

AD line is bearish at -458 but not overly so.

Linda Piazza : 7/16/2008 9:41:49 AM

Keltner outlook on the A/D line: The A/D line's opening prints are in the upper or bullish half of the Keltner channels, but those prints are being made far away from either support or resistance. When that's happened lately, the A/D line has tended to fall toward support or else zigzag around and establish a range in about the first 30-45 minutes and then chop around within that range before eventually breaking out. The A/D line is now 57, already pulling back a little from its opening print. First support on 15-minute closes is at about -550 while first resistance is at about +1400. So, factor in the possibility that the A/D line might need to drop toward support or--if it's going to be a strong morning--zoom toward resistance.

Jane Fox : 7/16/2008 9:38:06 AM

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission said Tuesday that it will try to limit so-called "naked" short selling of shares in Fannie Mae, Freddie Mac and big brokerage firms.

The SEC will issue an emergency order stating that all short sales of shares in these companies will be subject to a "pre-borrow" requirement, said Christopher Cox, chairman of the SEC. This will last for 30 days, he said. The SEC is also planning more rule-making focused on short selling in the broader market, Cox said.

In a typical short sale, traders sell borrowed shares, hoping to buy them back at a lower price and return them to the lender. The difference is kept as profit. In naked shorting, a trader shorts a stock without first making necessary arrangements to borrow shares. That sometimes means the seller fails to deliver the stock to the buyer and the trade can't be settled, running afoul of securities laws.

Imposing a "pre-borrow" requirement on short sales of some shares will force traders to make sure they have located securities before putting on negative bets. That may limit the pressure on the stocks included in the emergency order.

Linda Piazza : 7/16/2008 9:36:47 AM

I mentioned the OEX major short-term resistance and suppoet levels in my 9:30 post, but the first one to be encountered if the OEX keeps rising--still not known--will be the 15- and 30-minute 9-ema's, now both near 559.20. Those could be resistance on 15- and 30-minute closes. OEX at 557.48.

Jeff Bailey : 7/16/2008 9:36:17 AM

The 38.84 for VIX.X was at the open, and not a true measure.

VIX.X 28.15 -1.36%

Jane Fox : 7/16/2008 9:33:53 AM

Fannie Mae shares rise 13% in early trading

Freddie Mac shares rise 13% in early trading

Linda Piazza : 7/16/2008 9:30:45 AM

Whatever trading decisions you're making this morning, remember that in addition to ongoing testimony, we have the FOMC minutes this afternoon. I personally think those minutes will be old news due to FOMC Chairman Bernanke's testimony yesterday that has already altered the FOMC's stance since the last meeting, but perhaps not everyone will consider them old news.

Futures are higher this morning, but near fair values--a little above or a little below, depending on the index. They're not giving much guidance. On the OEX's daily chart, it still has a potential downside target near 546-547, so we still have to factor in vulnerability to that level. That's also potential support on daily closes and it lines up with other trendline potential support.

As the day ended yesterday, the OEX's 15-minute and 30-minute charts showed a potential downside target of about 551.70-552.80 if the OEX didn't pull itself up immediately and start charging higher and then manage 15-minute and 30-minute closes above first 563.55 and then 565.40-567.60. If the OEX goes higher, it's going to run into significant resistance layered closely from about 563.50 all the way up to 570.

If the OEX goes down instead, watch for support in that 551.70-552.80 level. If that doesn't hold, a test of 546-548 could be next.

Jane Fox : 7/16/2008 9:29:11 AM

WASHINGTON (MarketWatch) - The output of the U.S. factory sector rebound in June after two weak months as a strike at one of General Motors' key suppliers ended.

Output of the nation's factories, mines and utilities increased 0.5% in June, the Federal Reserve reported Wednesday. This followed a 0.7% drop in April and a 0.2% decline in May.

For the third quarter as a whole, industrial production was down at a 3.1% annual rate.

Economists surveyed by MarketWatch had expected June's output to be up 0.3%.

Jane Fox : 7/16/2008 9:13:26 AM

NEW YORK (MarketWatch) -- The Brazilian Oil Workers Federation, or FUP, have threatened to launch a nationwide strike against state-run energy giant Petroleo Brasileiro , or Petrobras, Dow Jones Newswires reported on Tuesday. FUP leaders also approved a 48-hour work slowdown across Brazil, which will start Thursday and is in support of striking platform workers in the Campos Basin, the report said. Platform workers, who are represented by the Sindipetro-NF union, began a five-day strike on Monday in the Campos Basin, Brazil's largest oil-producing region which accounts for more than 80% of the country's domestic production.

Petrobras said Tuesday that all platforms in the Campos Basin had returned to normal operating capacity, according to Dow Jones Newswires.

Jane Fox : 7/16/2008 8:53:47 AM

The markets did not like the CPI data out at 8:30 but they did not revisit overnight lows and are now trading mid range. Link

Jane Fox : 7/16/2008 8:48:14 AM

Economic Reports Due out today include:

9:00a.m. May Treasury International Capital Flows: Previous: $60.6B.

9:15a.m. Jun Industrial Production: Expected: +0.1%. Previous: -0.2%.

9:15a.m. Jun Capacity Utilization: Expected: 79.4%. Previous: 79.4%.

1:00p.m. Jul NAHB Housing Market Index: Previous: 18.

Jane Fox : 7/16/2008 8:43:18 AM

WASHINGTON (MarketWatch) - Double-digit increases in gasoline prices helped push up the consumer price index 1.1% in June, the fastest rate in 26 years, the Labor Department reported Wednesday. The unexpectedly large rise in the CPI was led by a 6.6% increase in energy prices and a 0.8% increase in food prices. Excluding food and energy prices, the core CPI rose 0.3%, the biggest increase since January. Excluding energy prices alone, the CPI rose 0.4% in June. With prices rising so fast, real (inflation-adjusted) weekly earnings fell 0.9% in June, the biggest decline in 22 years.

Keene Little : 7/16/2008 8:09:03 AM

Equities had an up and down overnight session and are currently being rallied back to up to a little better than the flat line (techs doing better). Whether they'll be able to rally today is the question. As long as SPX stays below yesterday's high of 1234 I expect to see lower prices today/tomorrow.

I'll be away from the market for about the first hour. See you about 10:30 AM.

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