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Keene Little : 7/21/2008 10:37:01 PM

Tuesday's pivot tables: Link and Link

The sideways consolidation that the market has been in since last Thursday looked bullish until after hours on Monday. With the big move down in equity futures it looks like we could have a nasty opening on Tuesday. But we've seen big moves in after hours get completely reversed by the following morning so who knows what will happen.

But assuming we get a drop on Tuesday morning, the DOW's broken downtrend line from May 19th is currently near 11350 which is about 120 points below Monday's close. Futures are down about 100 so it's quite possible we'll get a quick test of the broken downtrend line and if it holds it will be a bullish setup for another bounce. One possibility for the short term bullish scenario is shown in pink on this 120-min chart: Link

I'm showing the possibility for a whipsaw kind of move into the end of the month before rallying higher into August. That's just speculation at this point based on a typical corrective pattern. The dark red scenario calls for a break back below the downtrend line and continue down for a retest of last week's low or possibly even lower to a Fib projection near 10469. A break below 11350 would be a bearish heads up but it takes a break below 11100 to confirm we'll probably get a retest or new low.

SPX has some missing data (QCharts had a problem with its feed on Monday) but its 120-min chart shows a similar setup. It could drop back down to about 1248 without much harm to the bullish pattern and that's the low in ES so far in overnight trading. Much below that and it would begin to look more bearish for a run back down to a retest of last week's low (1200) or possibly as low as 1160 before the end of the month. Link

The good news even about the bearish case is that the next low should be the end of the leg down from May and it would set up a big corrective rally into August/September. If the bulls can hold SPX up, ideally above 1248, and drive it back above 1268 then the short-term bullish possibility (pink) would look good. Althoug as depicted it could be a wild ride into August where the up-down-up sequence could finish around 1320 by mid August. The two scenarios are shown on the daily chart: Link

OI Technical Staff : 7/21/2008 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The Market Monitor has been archived.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.

Tab Gilles : 7/21/2008 7:09:45 PM

Refiners put ina nice performance today. Link

Tab Gilles : 7/21/2008 6:57:50 PM

Sandisk (SNDK) AHT $15.50 -$2.43 (13.55%)

SanDisk reported revenue in the third quarter of 2007 of $1.04 billion.

The forecast is far below the range of $964 million to $1.24 billion expected by analysts, according to Reuters Estimates.

Quarterly results swung sharply to a loss amid an unexpected decline in sales and warned worse was in store as it further slashes the prices of its memory chips in the current quarter, sending its shares down 13.55% after-hours.

Tab Gilles : 7/21/2008 5:56:30 PM

In reference to my earlier post: Tab Gilles : 7/21/2008 1:07:33 PM

Apple (AAPL) $162.41 -$2.74 (1.66%) Apple will seek to avoid the fate that befell Microsoft and Google last week when it reports earnings after the close tonight. The consensus estimate for Apple's fiscal third-quarter is for earnings per share of $1.08 and revenue of $7.37 billion, a healthy 36% jump over year-ago levels. Reports of strong Mac sales in the quarter suggest Apple should be able to handily beat those estimates, given the rich margins on Mac sales (and Apple's traditionally conservative guidance).

Management in their conference call said that margins for this fiscal year of 34% would be lower in the next fiscal year...somewhere around 30%. Mostly due to lower iPhone prices as the company moves more into phones than their traditional PC sales.

Also there is speculation to why Steve Jobs was not present at the earnings conference call....mind you his health has been of a concern of late. Again just specualtion....but it is a factor perhaps in the afterhours tech wreck!

Again as I posted earlier 5:39PM the technicians are targeting $145 on the Fibonacci Retracement levels.

Tab Gilles : 7/21/2008 5:40:32 PM

Apple (AAPL) After-hours trading $151 -$15.49 (9.3%)

The Company posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share. These results compare to revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share, in the year-ago quarter.

Looking ahead to the fourth quarter of fiscal 2008, management expects revenue of about $7.8 billion and earnings per diluted share of about $1.00.

Fibonacci Retracement levels: Link

Jeff Bailey : 7/21/2008 5:27:44 PM

Closing Internals at this Link

Jeff Bailey : 7/21/2008 5:27:40 PM

Volume about "average" at the big board, with 50-day average at 4.62 billion shares.

Jeff Bailey : 7/21/2008 5:24:15 PM

Anemic volume at the NASDAQ today with just about 1.86 billion. 50-day average has been running 2.18 billion.

Jeff Bailey : 7/21/2008 5:06:15 PM

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

Keene Little : 7/21/2008 4:57:18 PM

Looks like we got a bad apple in the bunch. Their stock is down on earnings and it has pulled equity futures lower. That doesn't necessarily mean anything bad for tomorrow but it sure isn't helping the bulls after hours.

Jeff Bailey : 7/21/2008 4:56:29 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 7/21/2008 4:46:35 PM

DXY's 04:00 tick was 71.966.

Jeff Bailey : 7/21/2008 4:40:51 PM

Merck (MRK) $35.33 -6.23% ... slips to $34.50 extended on headline numbers.

Jeff Bailey : 7/21/2008 4:38:49 PM

QQQQ $44.78 +0.42% ... $44.26 extended.

Jeff Bailey : 7/21/2008 4:35:46 PM

Apple Earnings Press Release (AAPL) Link

Jeff Bailey : 7/21/2008 4:34:41 PM

Apple Computer (AAPL) $166.48 +0.80% ... darts lower to $160 extended on headline numbers/guidance.

Jeff Bailey : 7/21/2008 4:33:15 PM

ProShares UltraShort Financials (SKF) $137.35 -0.47% ... $141.00 extended.

Jeff Bailey : 7/21/2008 4:32:26 PM

Financial Select SPRDs (XLF) $20.75 +0.38% ... $20.40 extended.

Jeff Bailey : 7/21/2008 4:31:51 PM

S&P Depository Receipts (SPY) $126.05 +0.05% ... $125.79 extended.

Jeff Bailey : 7/21/2008 4:31:20 PM

Dow Diamonds (DIA) $114.65 -0.26% ... $114.30 extended.

Jane Fox : 7/21/2008 4:29:20 PM

Economic Reports for tomorrow:

10:00a.m. Jul Richmond Fed Manufacturing Index: Previous: -12.

Jeff Bailey : 7/21/2008 4:28:10 PM

American Express (AXP) ... Earnings Press Release Link

Consensus was for EPS of $0.83 on Revenue of $7.60B

Jeff Bailey : 7/21/2008 4:26:46 PM

American Express (AXP) $40.90 -3.05% ... $36.97 extended.

Jeff Bailey : 7/21/2008 4:26:13 PM

Eagle Materials (EXP) $23.54 +0.21% ... Halted; News Pending.

Jeff Bailey : 7/21/2008 4:25:37 PM

Stancorp Financial (SFG) $48.50 -0.28% ... Halted; News Pending.

Jeff Bailey : 7/21/2008 4:25:04 PM

Bluegreen (BXG) $6.44 +2.71% ... Halted; News Pending

Jeff Bailey : 7/21/2008 4:24:05 PM

SMH $29.43 -0.97% ... $29.20 extended.

Jeff Bailey : 7/21/2008 4:23:39 PM

Texas Instruments (TXN) $28.52 -1.04% ... Halted; News pending.

Jeff Bailey : 7/21/2008 4:21:57 PM

American Express (AXP) $40.90 -3.05% ... earnings hitting the wires.

Jeff Bailey : 7/21/2008 4:18:40 PM

Mohawk Earnings Press Release Link

Jeff Bailey : 7/21/2008 4:17:58 PM

DJHUHB 273.18 -0.45% ...

Jeff Bailey : 7/21/2008 4:16:29 PM

Mohawk Inds. (MHK) $64.06 -1.21% ... slips to $61.79 extended on Q2 earnings, Q3 outlook.

Jeff Bailey : 7/21/2008 4:13:46 PM

Bank of America (BAC) $28.56 +3.89% ... Aug $30 calls and Aug $30 and $27.50 puts among today's most active CBOE options.

Jeff Bailey : 7/21/2008 4:11:12 PM

Schering Plough (SGP) $18.95 -11.61% ... $18.90 extended on headline numbers.

Jeff Bailey : 7/21/2008 4:02:43 PM

Rogers Communications (RCI $38.79 -2.06% ... Wins bidding for 20 MHz spectrum in all 59 areas of Canada. Pays C$999,367,000.

Keene Little : 7/21/2008 4:00:00 PM

Into the close and the day finishes basically flat to slightly negative. There's been no harm done to the bullish pattern and a consolidation following a strong rally is typically bullish. It doesn't guarantee a continuation higher tomorrow but currently that remains the setup.

Jeff Bailey : 7/21/2008 3:56:13 PM

Buckey Group Holdings (BGH) $19.36 +6.43% ... UBS raising to "buy" from "neutral"

Jeff Bailey : 7/21/2008 3:51:08 PM

Forest Oil (FST) $64.19 +5.33% ... J. Rice ups to "overweight" from "equalweight"

Jeff Bailey : 7/21/2008 3:49:58 PM

Garmin Ltd. (GRMN) $46.62 +3.50% ... reversing losses. Amsterdam-based TomTom confirms outlook.

Jane Fox : 7/21/2008 3:49:34 PM

Vix making new daily lows as the S&P futures are making new daily lows. These two are way out of sync and I have found the VIX usually wins. I will be going out on the proverbial limb and say the bottom is in. Link

Jeff Bailey : 7/21/2008 3:45:49 PM

SPY $125.98 (unch) ...

Jeff Bailey : 7/21/2008 3:45:31 PM

SPX 1,260.08 -0.04% ...

Jeff Bailey : 7/21/2008 3:45:08 PM

VIX.X 23.41 -2.66% ... may be session low. Slips below QRTRLY 61.8%.

Linda Piazza : 7/21/2008 3:41:49 PM

I'm going to have to step away the rest of the day. So far, the day's action doesn't surprise me, and, in normal times, I'd say there's a great likelihood that the OEX will spend the next week chopping out some kind of consolidation zone that's roughly in line (in terms of the range of the choppy zone) with the one in which it chopped around from 6/27 until 7/09 or 7/10. These aren't normal times, of course, as I've said so many times lately. Do factor in the possibility that we could see chop, however, in your trading plans, as that can murder your option premium if you're long, while helping those who have sold or written options. Right now, I'd think the zone was likely to be between the 10-sma (on daily closes) and the 30-sma (on daily closes), with the 30-sma have drifted down to 589.80.

Jane Fox : 7/21/2008 3:31:48 PM

TRIN is now at 1.47 but the VIX is making new daily lows. Oh my goodness this is going to really interesting to watch and see which one wins.

Jeff Bailey : 7/21/2008 3:29:01 PM

Citigroup (C) $20.00 +3.35% ...

Jeff Bailey : 7/21/2008 3:28:10 PM

Citigroup's (C) Board of Directors declaring dividends.

Common stock of $0.32/share.

6.5% Non-cumulative Convertible Preferred Stock, Series T ... $0.8125/receipt.
8.125% Non-cumulative Preferred Stock, Series AA $0.5078125/receipt.
8.50% Non-cumulative Preferred Stock, Series F $0.53125/receipt.

Jeff Bailey : 7/21/2008 3:21:09 PM

Peabody Energy (BTU) $68.22 +6.47% ... Company saying it has completed Wambo complex expansion to serve high-growth Seaborne coal markets.

Keene Little : 7/21/2008 3:19:36 PM

Market is settling lower this afternoon and that's about as bearish as I can get about today's price action. It doesn't mean it can't suddenly let go (Monday and Tuesday this week are historically negative) but right now I'm not getting enough clues from the charts that that's what we should expect.

Jeff Bailey : 7/21/2008 3:19:21 PM

Yields on Colombian debt falls as government cuts bond sales.

Jeff Bailey : 7/21/2008 3:12:58 PM

Bank of America (BAC) $28.56 +3.85% ... retraces 19.1% of recent advance.

Linda Piazza : 7/21/2008 3:12:45 PM

Maybe "rolling" was the operative word after all. The OEX is rolling over toward that potential support on 30-minute closes, now at 576.26. This is rather light Keltner support, however, when compared to that seen on the 15-minute chart, now from 574.94-575.68, so I think at least some vulnerability to that lower test must be factored in today. Remember that if the OEX should head much lower, the goal of equity bulls is that it still close at or above the 10-sma, now at just above 572.05. For now, the day's action doesn't prove anything either direction, in my opinion, other than that it's still possible that it will settle into a chop zone for a few days to a week or two before we know next ultimate direction. Still possible, but not a given.

Linda Piazza : 7/21/2008 3:06:24 PM

Some people have one song playing through their heads at times like this; some another. I'm telling my age, but I hear "Rolling, rolling, rolling, Rawhide," except with the word "coiling" substituted for "rolling."

Jane Fox : 7/21/2008 3:04:04 PM

Trin at 1.37 is certainly not supporting the bulls today. THe internals have turned and the AD volume is pressing its daily lows however the VIX is not pressing its daily highs.

Linda Piazza : 7/21/2008 2:54:46 PM

The next potential support for the OEX on 30-minute closes is near 576.21, but it may have some vulnerability to levels a bit lower, at 574.90-575.70. Or maybe not. The RSI has already dipped close to 30 on the 15-minute chart, and it bounced this morning from that level.

Jeff Bailey : 7/21/2008 2:52:52 PM

USO $106.77 +2.23%
UGA $60.17 +2.06%
UNG $49.54 -1.31% ...

Jeff Bailey : 7/21/2008 2:50:31 PM

Nymex Crude Oil futures end 4-day losing streak, traders say "hello to TS Dolly."

TS Dolly 5-day Cone Link

Linda Piazza : 7/21/2008 2:25:52 PM

I still can't find many clues as to next OEX short-term direction. At times, the OEX looks slightly as if down toward 574.80-575.50 might look a little easier than up toward the day's high, but other times, the setup just looks neutral.

Linda Piazza : 7/21/2008 2:15:07 PM

The TED spread has risen to 1.36 from its day's low of 1.28.

Jeff Bailey : 7/21/2008 2:12:47 PM

02:00 Internals found at this Link

Jeff Bailey : 7/21/2008 2:02:28 PM

TLT $90.50 +0.05% ...

Jeff Bailey : 7/21/2008 2:02:10 PM

30-year ($TYX.X) down 0.2 bp at 4.660%

Jeff Bailey : 7/21/2008 2:01:21 PM

IEI $106.22 -0.06% ...

Jeff Bailey : 7/21/2008 2:00:57 PM

5-year ($FVX.X) up 4.2 bp at 3.439% ...

Linda Piazza : 7/21/2008 2:05:56 PM

Have you been hearing a lot about swaps lately, but don't understand what they are and how they helped us get into trouble? John Hussman has a fairly lucid description, even for the economy-illiterate among us at Link . If you don't know much about these instruments, as I don't, either, reading through it may require some concentration. Hussman directs two funds. My purpose is not to introduce you to his funds but rather to his writing, which is worth reading, in my opinion. One of our subscribers introduced me to his writing several months or perhaps as long as a year ago, and I've been grateful since. I wanted to mention that the early part of the discussion centers on Hussman's beliefs about the Iraq war. Whether you agree or not with his political views, the discussion about swaps is worth sticking with the article.

Jeff Bailey : 7/21/2008 2:00:22 PM

TLH $103.66 -0.06% ...

Jeff Bailey : 7/21/2008 1:59:17 PM

10-year Yield ($TNX.X) ... up 1.6 bp at 4.097%. Getting feed.

Jeff Bailey : 7/21/2008 1:54:02 PM

S&P Banks Index (BIX.X) 175.69 +1.13% ... getting a feed.

Jeff Bailey : 7/21/2008 1:53:14 PM

VIX.X 23.58 -1.95% ... getting a feed.

Jeff Bailey : 7/21/2008 1:52:52 PM

Russell 2000 (RUT.X) 696.44 +0.48% ... getting a feed.

Jeff Bailey : 7/21/2008 1:52:03 PM

S&P 500 (SPX.X) 1,269.92 +0.01% ... getting a feed.

Jeff Bailey : 7/21/2008 1:51:23 PM

CBOE Oil Index (OIX.X) 834.38 +1.48% ... getting a feed.

Jane Fox : 7/21/2008 1:44:50 PM

Internals are talking now and they are telling you the bulls have the ball. VIX is making new daily low and AD volume is making new daily highs. The bulls would like to see the ratio making new daily highs as well. Link

Jane Fox : 7/21/2008 1:41:52 PM

Crude is trying to break back above the $130.00 resistance but it doesn?t seem to have a lot of power under the move. Crude volume is greater than the Russell and DOW?s volume but still does not come close to the S&P futures volume. Link

Jeff Bailey : 7/21/2008 1:35:47 PM

Ford Motor (F) $5.51 +1.28% ... #10 most active now. Company expanding buyout offer to 14 plants in Ohio and Michigan.

Linda Piazza : 7/21/2008 1:35:11 PM

The A/D line is rising but its rise isn't impressive looking in shape. It is, however, rising to test the same resistance line that stopped it early this morning. That resistance is now at about 1050 on 15-minute closes, with the A/D line now at 901. Sustained 15-minute closes above that resistance, combined with a move above the previous 1232 high of the day, would set a potential upside target of about 2170 for the A/D line, but it hasn't set that target yet and resistance may hold.

Jeff Bailey : 7/21/2008 1:32:47 PM

SEAS: ... Combo cut LDL cholesterol by 61%. 688 patients had one or more primary endpoint events. Subsidiary outcomes included echocardiographic evidence of aortic stenosis progression.

Keene Little : 7/21/2008 1:31:03 PM

It's just been a slow lethargic kind of day. Traders must be having the Monday blues. I see nothing yet that gets me excited about either direction so I continue to watch and wait...

Jeff Bailey : 7/21/2008 1:29:55 PM

SEAS: ... Apparent differences not related to any particular type of cancer, or length of treatment.

Jeff Bailey : 7/21/2008 1:29:21 PM

SEAS: ... Most serious adverse events observed among pateints assigned combo than assigned placebo

Jeff Bailey : 7/21/2008 1:28:33 PM

SEAS: ... Simvastatin, Ezetimibe produced statistically significant reduction atherosclerotic events.

Jeff Bailey : 7/21/2008 1:27:39 PM

SEAS: ... 158 patients were recorded with a serious adverse event attributed to cancer.

Jeff Bailey : 7/21/2008 1:26:39 PM

SGP $20.73 -3.31% ...

Jeff Bailey : 7/21/2008 1:26:23 PM

MRK $37.42 -0.66% ...

Jeff Bailey : 7/21/2008 1:26:02 PM

MRK and SGP rebound on SEAS results ...

Jeff Bailey : 7/21/2008 1:25:12 PM

USO $105.50 +1.01% ...

Jeff Bailey : 7/21/2008 1:24:56 PM

White House: Iran likely to reject nuclear offer.

Jeff Bailey : 7/21/2008 1:21:45 PM

S&P 500 Heavyweights sorted by weighting as of today's open Link

Last Monday's weighting Link

Tab Gilles : 7/21/2008 1:07:33 PM

Apple (AAPL) $162.41 -$2.74 (1.66%) Apple will seek to avoid the fate that befell Microsoft and Google last week when it reports earnings after the close tonight. The consensus estimate for Apple's fiscal third-quarter is for earnings per share of $1.08 and revenue of $7.37 billion, a healthy 36% jump over year-ago levels. Reports of strong Mac sales in the quarter suggest Apple should be able to handily beat those estimates, given the rich margins on Mac sales (and Apple's traditionally conservative guidance).

Jeff Bailey : 7/21/2008 1:04:12 PM

Google (GOOG) 471.00 -2.14% ... last week's declines has GOOG falling to #18 heavyweight in S&P 500

Linda Piazza : 7/21/2008 1:04:36 PM

Not an impressive OEX bounce off the 15-minute 9-ema and the test of the rising trendline off Thursday's early low, is it? The OEX is beginning to look a bit more vulnerable to a test of the 574.30-575.80 zone, although that's not a given yet. Bulls should factor in that possible vulnerability, however.

Jane Fox : 7/21/2008 1:02:52 PM

Interesting charts. These are the overnight charts and as you can see the NDX and DOW futures have broken its overnight lows whereas the Russell 2000 and S&P have not. Link

Jeff Bailey : 7/21/2008 1:02:19 PM

JP Morgan (JPM) $39.21 -2.02% ... last week's gains has JPM lurching to #10 heavyweight in S&P 500 at this morning's cash open.

Jeff Bailey : 7/21/2008 12:55:18 PM

Wilshire 5000 (DWC) 12,873 +0.23% ... roughly same PRICE level as 03/17/08 close, and 07/02/08 close.

Jeff Bailey : 7/21/2008 12:46:23 PM

Garmin Ltd. (GRMN) $44.26 -1.79% Link ... with TomTom releasing Q2 earnings in Europe.

Tab Gilles : 7/21/2008 12:38:05 PM

Olympic Steel (ZEUS) $57.22 +$3.73 (6.97%) Set to report earnings on July 31st.

Jeff Bailey : 7/21/2008 12:35:46 PM

Most Actives ... BAC $29.25 +6.40%, QQQQ $44.66 +0.15%, CSCO $21.91 +1.15%, WFC $27.45 -1.39%, XLF $20.99 +1.54%, INTC $22.05 -0.18%, MSFT $25.67 -0.73%, GE $27.88 -0.42%, RF $10.79 +6.72%, SPY $126.13 +0.11%

Tab Gilles : 7/21/2008 12:35:25 PM

Clean Energy Fuels (CLNE) $13.30 +$0.89 (7.17%) T. Boone Pickens company seeing some "green" today!

Tab Gilles : 7/21/2008 12:30:11 PM

Refiners are up modestly today: VLO $34.86 +$1.75 +5.29%; TSO $17.36 +$0.70 +4.19%; WNR $9.05 +$0.29 +3.31%; HOC $29.36 +$0.77 +2.69%

Linda Piazza : 7/21/2008 12:25:19 PM

The TED spread is flat-lining at 1.28 this morning. That's well below the 1.46 that we were seeing last week.

Jeff Bailey : 7/21/2008 12:21:35 PM

BTK.X 815.05 +2.46% ...

Biotech HOLDRs (BBH) $190.51 +6.63% ... DNA $92.48 +13.02% ... must have more significant weighting in BBH than BTK.X

Jeff Bailey : 7/21/2008 12:19:49 PM

12:00 Internals found at this Link

Linda Piazza : 7/21/2008 12:13:55 PM

If the OEX were to fall steeply by this afternoon, a primary goal of equity bulls is that it maintain daily closes at or above the 10-sma, currently at 572.20. When I mentioned a possible trading range that could persist for a week or so in my 9:20:17 post, I had in mind that 10-sma support on daily closes could mark the bottom of that range. If those daily closes don't hold above that, then the OEX might be doing away with the whole mark-time-for-a-week possibility.

Jeff Bailey : 7/21/2008 12:12:47 PM

Regional Bank HOLDRs (RKH) $96.87 -0.31% ... QCharts' WKLY Pivot Levels ... $63.12, $80.17, Piv= $89.59, $106.64, $116.06.

Linda Piazza : 7/21/2008 12:09:37 PM

The A/D line has been sinking all day but has finally dropped into the potential support zone that now extends down to about +220. The A/D line is currently +474. Equity bulls want that support zone--Keltner, gap and historical--to hold on 15-minute closes. If it doesn't, the next support zone appears to be at about -300.

Jeff Bailey : 7/21/2008 12:09:25 PM

IWM $69.06 +0.26% ...

Jeff Bailey : 7/21/2008 12:09:09 PM

SPY $125.75 -0.18% ...

Jeff Bailey : 7/21/2008 12:08:49 PM

Still no feeds for SPX, OEX, RUT, BIX and Treasury yields.

Jeff Bailey : 7/21/2008 12:08:21 PM

SHY 82.64 -0.06% ... 1-3 year
IEI $106.24 -0.04% ... 3-7 year
IEF $87.20 -0.02% ... 7-10 year
TLH $103.57 -0.15% ... 10-20 year
TLT $90.54 +0.09% ... 20-year+

Keene Little : 7/21/2008 11:57:58 AM

The pullback this morning is now deeper than I thought it would get if the bullish scenario was to play out. But the pullback looks corrective with a lot of overlapping highs and lows and that keeps me from feeling bearish about it. Time for caution and I'm just going to have to see how this plays out. The bearish thing is that it's setting up for a fast decline that will quickly drop below Friday's lows.

Linda Piazza : 7/21/2008 11:53:00 AM

The OEX's 15-minute 45-ema is now at 578.65, near the bottom of a rising channel in which the OEX has been climbing since Thursday morning. Bulls want that to hold, and bears should be watchful for bounce potential from this level. If that 45-ema doesn't hold, the next potential support on 15-minute closes on that chart is currently near 573.90-574.60. If the OEX bounces, next resistance is currently from 584.08-585.36.

Linda Piazza : 7/21/2008 11:23:09 AM

My delayed quote for the TED spread still gives a reading of 1.28, currently down 3.927%.

Linda Piazza : 7/21/2008 11:21:28 AM

At the current time, the OEX looks as likely to decline toward the 15-minute 9-ema, now at 578.52, as it does climb toward that Keltner resistance band that it tested earlier, and vice versa. That resistance band still looks firm, but has changed values a little. It now stretches from 584.12-585.04. RSI on the 15-minute chart is about 55, nearly as neutral as one can get it, so it's giving no help in predicting direction, either. If the support at the 45-ema is lost on 15-minute closes, next support appears to be near 573.60-574.50.

Keene Little : 7/21/2008 11:10:27 AM

I've been doing some reading this morning about different business and government leaders trying to tell us that things aren't as bad as they seem and that we're nearing a bottom in (you name it). Whether it's Sec'y Paulson, Bernanke, or heads of banks, these are the same people who got us into this mess and didn't even see it coming. How can they therefore have any credibility in calling a bottom?? Makes one wonder.

Keene Little : 7/21/2008 11:06:43 AM

The bulls need to get something going here otherwise we could see the selling start to accelerate.

Jeff Bailey : 7/21/2008 10:59:17 AM

DJUSHB 278.25 +1.38% ...

Jeff Bailey : 7/21/2008 10:58:22 AM

Bank of America's CEO saying "housing depreciation mostly over" in 2008.

Jeff Bailey : 7/21/2008 10:57:27 AM

CBOE Q2 total trading volume up 25% to 275.2M contracts.

Jane Fox : 7/21/2008 10:50:37 AM

WASHINGTON (MarketWatch) -- The economy may weaken further this year, an economist with the Conference Board said Monday on a report that a key gauge of the economy dipped slightly in June.

The index of leading economic indicators, which attempts to forecast turning points in the economy, declined 0.1% in June. The result for May was revised to a decline of 0.2%, compared with a prior estimate of a 0.1% gain.

"The domestic economy is showing no sign of strength," said Ken Goldstein, labor economist at the Conference Board. "The deep financial crisis, a prolonged, intense slump in housing, high gasoline and food prices, weak consumer confidence and a weak dollar are all combining to produce unrelenting downward pressure on economic activity."

Four of the 10 leading indicators that make up the leading index rose in June, with the largest positive contribution from building permits. The largest negative contribution came from the real money supply.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, noted that June's results were "saved from a much larger drop" due to a change in building permit rules for multifamily units in New York City that pushed up total starts.

Jeff Bailey : 7/21/2008 10:49:52 AM

Fitch Ratings saying increasing woes in the retail and office sectors pushed delinquencies on U.S. commercial mortgage-backed securities up slightly in June. Delinquencies rose 0.02 percentage points to 0.41%. Delinquencies on retail loands jumped 26% from May and 32% in the office space.

Jeff Bailey : 7/21/2008 10:46:34 AM

Petroleo Brasileiro (PBR) $59.34 +2.20% ...

Companie Vale do Rio Doce (RIO) $29.64 +1.75% ...

Linda Piazza : 7/21/2008 10:46:13 AM

Nearby support for the OEX, at its 15-minute 9-ema is now at 581.63 and may be holding on this 15-minute close, at least. Potential resistance on 15-minute closes, still looking somewhat firm, currently extends from 583.91-584.73 but will move a little higher if the OEX bounces toward it soon.

Jeff Bailey : 7/21/2008 10:45:36 AM

Brazil Posts Record 6-Month Tax Revenue of BRL327.67 billion.

Jeff Bailey : 7/21/2008 10:41:32 AM

Time Warner (TWX) $14.48 -1.49% Link ... Weak despite record box office results for opening of The Dark Knight.

Keene Little : 7/21/2008 10:38:12 AM

This morning's pullback is close to achieving two equal legs down so the bulls will want to see support come in soon and start this back up. If the DOW drops much below 11480, or SPX below 1260, it will start to look more bearish and I'd be very careful if long the market (since a correction could mean a couple hundred DOW points to the downside).

Jeff Bailey : 7/21/2008 10:37:02 AM

Oil prices higher after Iran nuclear talks stall ... AFP Story Link

Jeff Bailey : 7/21/2008 10:35:21 AM

Most Actives ... BAC $30.48 +10.87%, MSFT $25.98 +0.46%, CSCO $22.10 +2.03%, JPM $40.28 +0.64%, XLF $21.31 +3.19%, SPY $126.27 +0.18%, AAPL $164.14 -0.61%, DNA $92.95 +13.60%, NCC $4.69 +3.30%, FRE $9.93 +8.16%

Linda Piazza : 7/21/2008 10:34:02 AM

At 844 as I type, the A/D line has pulled back from that resistance zone I'd mentioned a couple of times today, with that resistance currently at about +1180 on 15-minute closes. As mentioned earlier, a failure to break through that suggested that the A/D line could pull back to test its rising 15-minute 9-ema or even the lower band of support, although equity bulls would prefer that the 9-ema hold as support on 15-minute closes. That's now at about +600.

Jane Fox : 7/21/2008 10:32:42 AM

AD line is climbing (middle chart) and this is bullish but the VIX just made a higher low and that is bearish. Link

Jeff Bailey : 7/21/2008 10:32:13 AM

Genentech (DNA) $93.00 +13.66% Link ... new 52-week high after Roche offers $89/share for roughly 44% of stake it doesn't already own.

Linda Piazza : 7/21/2008 10:28:38 AM

The OEX's 15-minute 9-ema is currently 581.54, and OEX bulls would like to see that hold as support on 15-minute closes if the OEX continues pulling back.

Jeff Bailey : 7/21/2008 10:27:49 AM

Financial Select SPDRs (XLF) ... currently up $0.68, or +3.28% at $21.35.

Jeff Bailey : 7/21/2008 10:27:07 AM

Regional Bank HOLDRs (RKH) ... currently up 2.30, or +2.36% at $99.48.

Jeff Bailey : 7/21/2008 10:25:39 AM

iShares Russ. 2000 (IWM) ... currently up $0.51, or +0.74% at $69.39.

Jeff Bailey : 7/21/2008 10:24:27 AM

S&P Dep. Receipts (SPY) ... currently up $0.51, or +0.40% at $126.49.

Jeff Bailey : 7/21/2008 10:23:29 AM

10:00 Internals at this Link

Note(s): Data feeds down for VIX.X, SPX, OEX, RUT, 13-week to 30-year.

Jane Fox : 7/21/2008 10:21:58 AM

I see the AD line is a bullish +1100 so the bulls have the ball this morning.

Keene Little : 7/21/2008 10:17:00 AM

We're getting a little bit of a pullback but so far it should be just a small correction before continuing higher. If we get a stronger and impulsive pullback I'll warn of a potential reversal. The only warning is that the move up today should be the 5th wave for the move up from last Tuesday. As such it will be weaker than last week's rally and could fail early (for a much bigger pullback to correct the rally from last week). So don't get complacent if you're long.

Linda Piazza : 7/21/2008 10:06:11 AM

The OEX's early rise has pushed the potential Keltner resistance on 15-minute closes up to about 584.40. Despite being shoved higher, it's still holding so far, and the OEX is not yet in breakout status on that chart. If it can't break out soon by piercing this resistance and sustaining 15-minute closes above it, moving higher in runaway fashion, then it's likely to pull back in a normal (bulls hope) fashion to test support. Bulls would most like to see potential support now at about 583.25 hold on 15-minute closes. Barring that, they'd like to see the rising 15-minute 9-ema, now at 581, hold as support on 15-minute closes. The OEX is at 582.61 as I type.

Jeff Bailey : 7/21/2008 10:00:13 AM

Companhia Vale do Rio Doce (RIO) $29.48 +1.20% ... CEO saying he still sees strong demand for products. Expects continuing strong demand thanks to solid growth in emerging countries, which he hopes will help it weather the slowdown in U.S.

Jeff Bailey : 7/21/2008 9:57:59 AM

US May Steel Shipments -4.2% on month, -0.8% on year according to the American Iron and Steel Institute.

Linda Piazza : 7/21/2008 9:55:17 AM

The TED spread is now 1.28.

Linda Piazza : 7/21/2008 9:51:53 AM

The OEX tests the Keltner and historical resistance that we knew was there. This is a time for bulls to keep both profit-stops and their hopes for further gains in check. The A/D line is testing potential resistance at about +1150. If it can produce sustained 15-minute closes above that, it sets a potential upside target near +1950, but this resistance could still hold and send the A/D line back toward the 15-minute 9-ema, now starting to curl upward but still way down at about +425. The A/D line is +1092 as I type.

Jeff Bailey : 7/21/2008 9:51:41 AM

Shering Plough (SGP) $19.62 -8.34% ... delay Q2 earnings to afternoon.

Jeff Bailey : 7/21/2008 9:51:05 AM

Merck (MRK) $36.35 -3.52% ... delay Q2 earnings to afternoon.

Jeff Bailey : 7/21/2008 9:47:22 AM

Bank of America (BAC) $29.91 +8.76% ... Earnings Press Release Link

Consensus was for EPS of $0.53 on Revenue of $18.37B

Linda Piazza : 7/21/2008 9:37:02 AM

The OEX's potential resistance on 15-minute closes is now from 582.06-583.99. OEX at 582.39 as I type. If it pulls back, OEX bulls would like to see the potential support at 579.81 hold on 15-minute closes.

Linda Piazza : 7/21/2008 9:35:36 AM

Keltner outlook on the A/D line: the A/D line made its first print in the upper or bullish half of the 15-minute Keltner charts, but it's in the middle of nowhere, between support that's back down at about -560 to +200 and resistance that's at about +1150. It could as easily drop back to test support as rise to test resistance, or vice versa. It's at +684 as I type.

Tab Gilles : 7/21/2008 9:32:41 AM

Fredie Mac & Fannie Mae (FRE) (FNM) Financials should open strong FRE $9.18 (PM $10.10); FNM $14.40 (PM $14.98)

Jane Fox : 7/21/2008 9:34:47 AM

Here are your overnight charts. S&P and DOW are the only markets to break their previous day lows. Link

Tab Gilles : 7/21/2008 9:20:51 AM

Treasury chief Paulson hit the Sunday talk shows letting the public know to brace for months of tough times ahead, but also saying that the US banking system is sound. Link

Linda Piazza : 7/21/2008 9:20:17 AM

Futures are above fair value as I type. If we extrapolate where the OEX might go from the ES contract's current distance from fair values, Then we might well see the OEX rise into the potential target and potentially strong resistance on 15-minute closes from 582.91-583.88.

Traders may remember that the OEX's March 17 low was 583.64, so a rise into that zone is a rise to retest the March low from the underside. In addition, in late June and early July, the OEX produced a number of highs, opens or closes in the 583-586 zone. We can presume, then, that this area might be strong resistance. Barring a strong short-covering fueled rise, it's possible, but not a given, that the OEX might need to chop around for a while at or below this zone before it can make further advances, if it does. Traders must factor into their trading plans the possibility that the OEX could rise and get knocked back from that potential resistance or the next higher band and then form some sort of trading range that persists for a week or so. The caveat to that is that a strong surge higher would surprise those expecting that resistance to hold and might prompt another round of short covering.

Some charts show the possibility of an eventual test of the 591-595 zone, with the 30-sma and the 30% retracement of the OEX's slide down both in that zone. The 30-sma is still sharply descending, however, and could even move down into the 587-588 zone before the OEX can thoroughly test it if the OEX consolidates rather than zooms up.

Remember that most of us, me included, believe we're seeing a relief rally or bear-market rally, and not the final low being put in. Such rallies can be sharper and last far longer than some are willing to believe, however. As Jim has been pointing out, such rallies can result in 5-10% gains, and occasionally, even much higher ones. My posture, then, would be to enjoy the bounce while it lasts but not to position your portfolio too strongly toward the bullish side. Don't trade the bullish side at all unless you're competent that the vehicles you're employing are highly liquid and will allow you a quick exit and unless you're also confident of your own ability to swing out of positions and protect profits. Know yourself. If you tend to freeze into the deer-in-the-headlights posture when you get surprised by market action, then it's better to stand back and watch this unfold or else use this time to practice that new trade you always wanted to trade via one of the many trade simulators now availble. If your broker doesn't have one, the CBOE does, and the registration is free.

Tab Gilles : 7/21/2008 9:14:21 AM

With 4 of the big 5 banks already reporting [WFC,JPM, C, BAC] Wachovia reports tomorrow. Link

Jane Fox : 7/21/2008 9:13:41 AM

Only Economic Report today is 10:00a.m. Jun Conference Board Leading Indicators: Previous: +0.1%.

Jane Fox : 7/21/2008 9:11:28 AM

NEW YORK (MarketWatch) -- Yahoo Inc. on Monday said it reached an agreement with dissident shareholder Carl Icahn, sidestepping an all-out battle for the Internet company and ending a proxy fight.

Under the terms of the deal, eight members of Yahoo's current board will stand for re-election at the 2008 annual meeting: Roy Bostock, Ronald Burkle, Eric Hippeau, Vyomesh Joshi, Arthur Kern, Mary Agnes Wilderotter, Gary Wilson and Jerry Yang.

"This agreement will not only allow Yahoo ( to put the distraction of the proxy contest behind us, it will allow the company to continue pursuing its strategy of being the starting point for Internet users and a must buy for advertisers," Yahoo Chief Executive Jerry Yang said in a statement.

Following the annual meeting, Yahoo's board will be expanded from 10 members to 11 members, Icahn will be appointed to the board and the remaining two seats will be filled with recommendation of the board's nominating and governance committee from a list of nine candidates recommended by Icahn. The list includes the eight remaining members of the Icahn slate of nominees and Jonathan Miller, currently a partner in Velocity Interactive Group and former Chairman and CEO of AOL.

Keene Little : 7/21/2008 9:11:25 AM

Equity futures ramped up between 4:00 AM and 7:00 AM and it looks good for a positive open and the expected rally this morning. The important lows for the bulls to hold (in case we get a stronger pullback after the open) are the ones near 3:00 PM on Friday.

Tab Gilles : 7/21/2008 9:09:14 AM

Apple (AAPL) $165.15 (Pre-Market $166.65/ $166.66) & SanDisk (SNDK) $17.57 (PM $18.08/$18.24) both report after the close today. With Microsoft and Google giving bearish reports last week, these 2 tech companies could be pivotal either way.

Tab Gilles : 7/21/2008 8:57:43 AM

Celgene (CELG) $70.85 (Pre-Market $71.51 Bid/ $72.00 Ask)

News of Roche offers $43.7B for all remaining shares of anti-cancer biotech partner Genentech, is boosting the biotech sector.

Celgene reports on the 24th of July. Link

Tab Gilles : 7/21/2008 8:53:50 AM

Bank of America (BAC) $27.49 (Pre-Market $30.60 Bid/ $30.65 Ask)

bank reported net income of $3.41 billion, or 72 cents per share, on $20.32 billion in revenue, in the April-June period. That compared with net income of $5.76 billion, or $1.28 per share, on $19.63 billion in revenue a year earlier.

Analysts on average expected a profit of 53 cents per share on $18.37 billion in revenue.

The bank also said its July 1 acquisition of Countrywide Financial Corp, once the nation's largest mortgage lender, will add to profit faster and result in deeper cost cuts than previously estimated.

Tab Gilles : 7/21/2008 8:49:13 AM

Yahoo (YHOO) Closed Friday $22.45/ Pre-Market $22.05 Bid; $22.10 Ask (FT.com)Carl Icahn is to join the board of Yahoo as part of a settlement of the activist investor's proxy battle with the internet search group.

Under the deal, announced on Monday, the entire board of Yahoo will stand for re-election at the company's annual meeting on August 1, with the exception of Robert Kotick, who is stepping down.

The board will also be expanded from nine to 11 members, with two new directors to come from a list of nine candidates proposed by Mr Icahn, which includes Jonathan Miller, former chief executive of AOL.

Linda Piazza : 7/21/2008 8:05:41 AM

The TED spread, a measure of default risk, is 1.32 on my delayed quote, down 0.012 or 0.869%. It's had a high of 1.41 today.

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