Option Investor
Printer friendly version
Jeff Bailey : 7/24/2008 12:23:49 AM

Sector Bell Curve from 03/17/08 to 05/19/08 which would approximate most recent BPALL reversal back higher Link

Keene Little : 7/24/2008 12:13:22 AM

Thursday's pivot table: Link

The pattern of the rally from the July 15th low leaves a couple of different possibilities so for now I'm watching the uptrend line for the DOW that held Wednesday afternoon's consolidation. The market will need to rally immediately on Thursday in order to hold above the trend line (SPX has a little room to fall before hitting its uptrend line) and if it does manage a rally I see two upside possibilities.

The first is a minor new high above Wednesday's and then a reversal into a multi-day decline. The second is to the top of a potential rising wedge (which shows bearish divergence) near a Fib projection at 11835, and then a stronger decline from there.

But if the market starts to sell off on Thursday morning we could see a multi-day pullback that could have the DOW dropping down to at least the 11200 area. More bearishly we might get a retest of the July 15th low. 60-min chart: Link . How those two scenarios fit into the larger picutre is shown on the daily chart: Link

Jeff Bailey : 7/23/2008 11:39:32 PM

Sector Bell Curve from 07/08/08 to 07/23/08 at this Link

Jeff Bailey : 7/23/2008 11:29:10 PM

Global Bullish % from DWA at this Link

Jeff Bailey : 7/23/2008 11:23:01 PM

Dorsey/Wright Major Bullish % that I keep at this Link

Jeff Bailey : 7/23/2008 10:59:28 PM

StockCharts.com's Major Market Bullish %







Jeff Bailey : 7/23/2008 10:53:32 PM

Bull Confirmed! ... As noted in this evening's Market Wrap, Dorsey/Wright's Bullish % (BPALL) has reversed back up to "bull confirmed" status. Link

OI Technical Staff : 7/23/2008 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The Market Monitor has been archived.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 : 7/23/2008 6:49:21 PM

follow-up to 4:25pm post:

Natural Gas ($NATGAS) weekly-- Link PnF-- Link

Jeff Bailey : 7/23/2008 6:11:06 PM

Major Global Indexes, Currencies, Oil, Gold and $HUI.X at this Link

Percentage comparisons and time-frames match here.

Continued education as to why I teach that index composition and "long/short here, stop today's low/high" can be a fool's trade.(see Dow Indu to Russ 2000)

Jeff Bailey : 7/23/2008 5:51:13 PM

Closing U.S. Market Watch at this Link

Note(s): 5-dayNet% for various major indexes differe.

DIA since 7/18
INDU since 7/16
SPX since 7/15
SPY since 7/21
OEX since 7/15
NDX/QQQQ since 7/18
RUT.X since 7/15.

Jeff Bailey : 7/23/2008 5:33:13 PM

Closing Internals at this Link

Jeff Bailey : 7/23/2008 4:50:44 PM

Oh my ... check out AMZN extended.

Jeff Bailey : 7/23/2008 4:50:15 PM

F5 Networks (FFIV) $31.00 -4.35% ... $29.50 x $29.79 extended.

Jeff Bailey : 7/23/2008 4:49:00 PM

Bank of America (BAC) $33.44 +3.36% ... Approves $3.75 billion buyback plan.

Jeff Bailey : 7/23/2008 4:33:15 PM

DXY's 04:00 tick was 72.773

Tab Gilles : 7/23/2008 4:25:36 PM

Chesapeake Energy (CHK) $46.96 -$4.14 (8.10%)

Hitting attractive levels! Reports earnings July 31st.

Daily; Link Weekly; Link Pnf; Link

Jeff Bailey : 7/23/2008 4:14:41 PM

F5 Networks (FFIV) $31.00 -4.35% ... ticks $32.00 on headline numbers.

Earnings Press Release Link

Consensus was for EPS of $0.22 on Revenue of $161.36M

Jeff Bailey : 7/23/2008 4:12:30 PM

FFIV hitting the wires.

Jeff Bailey : 7/23/2008 4:12:13 PM

LSI surging ...

Jeff Bailey : 7/23/2008 4:05:42 PM

F5 Networks (FFIV) $31.00 -4.35% Link

Went out right, smack on previously broken downward trend.

Jeff Bailey : 7/23/2008 4:02:42 PM

Here they come ... earnings hitting the wires.

Linda Piazza : 7/23/2008 3:59:17 PM

The BIX's candle still looks like a potential reversal signal, and it would take a near miracle to change that by the close. Again, "potential" doesn't mean "guaranteed," but the BIX has, in the past, reversed from such candles. It did not, however, reverse after potential reversal signals produced on 7/18 and 7/21. This one looks more ominous, but it's still not a guarantee of either pullback or consolidation. Do consider how your SPX or OEX trades might be impacted if financials were to roll over, however, and assess risk.

Jeff Bailey : 7/23/2008 3:57:29 PM

At 07/21/08 close ... CME's Aug'08 San Diego was $174.80. Nov'08 was $163.80. Feb'09 was $151.00. May'09 was $146.80.

Linda Piazza : 7/23/2008 3:56:47 PM

It's possible that the OEX may get run up toward next potential resistance on 15-minute closes, now at 594.48. The 30-minute version is 595.96. Too much more than that 594.48 version, however, will change the shape of that candle on the daily chart, and it will no longer look like a potential reversal signal. Anything near or under 595, however, still looks a bit like indecision.

Jeff Bailey : 7/23/2008 3:55:20 PM

Also plans to go after WFC, WB and WM according to Reuters report.

Attorney Michael Aquirre says he wants San Diego to become a "mortgage sanctuary," and urges lenders to negotiate with borrowers facing foreclosure.

Jeff Bailey : 7/23/2008 3:51:48 PM

San Diego's City Attorney ... Files suit against Bank of America (BAC) $33.43 +3.33% to halt foreclosures in city.

Jeff Bailey : 7/23/2008 3:49:42 PM

Brazil's Lula: No Doha deal without flexible agruculture rules.

Jeff Bailey : 7/23/2008 3:48:08 PM

Wells Fargo (WFC) $30.51 +0.26% ... threatens to close above its 12/31/07 close for 2nd-straight session.

Linda Piazza : 7/23/2008 3:46:48 PM

Depending on what happens in the last 15 minutes of trading, when almost anything can happen, the OEX will indeed have produced a small-bodied candle, indicative of indecision. This is possibly the first of 2-5 candles that establish the OEX's consolidation zone before next direction is determined. That's not a given, of course, but it's what I warned might happen this morning, and so it doesn't surprise me to see it, if the OEX does close with a small-bodied candle. Bears must consider the possibility that, now that the OEX has broken above the 30-sma and looks as if it might close above it, that 30-sma might provide support on pullbacks. Bulls must consider the fact that in addition to being a sign of indecision, such candles as the one produced today can be potential reversal signals. I hate to even write those words, because "potential" reversal signals haven't fulfilled much of their potential lately, with the exception of the one that finally did on 7/15, but in a bear-market or relief rally, pay attention to your bullish risks if you see such a candle. We don't know how far this rally will go, but the presence of such a candle today risks sideways consolidation or a pullback, so you must assess how either action will impact your bullish trades and reduce risk if you're carrying too much overnight.

Keene Little : 7/23/2008 3:46:12 PM

It looks like a setup for at least another leg down, probably tomorrow. But so far I'm not seeing anything particularly bearish about the price action.

Jeff Bailey : 7/23/2008 3:44:07 PM

Nat. Gas inventories out tomorrow.

Jeff Bailey : 7/23/2008 3:43:37 PM

How many shares did he buy? ... CHK $47.09 -7.85% ...

Jeff Bailey : 7/23/2008 3:42:36 PM

UNG $45.61 -3.87% ... By "dolly" its below its 200-day SMA.

Jeff Bailey : 7/23/2008 3:41:48 PM

USO $100.34 -2.88% ...

Jeff Bailey : 7/23/2008 3:41:33 PM

ProShares UltraShort Oil & Gas (DUG) $36.53 +7.86% ... probes its 200-day SMA from underneath. Did this Thursday.

Jeff Bailey : 7/23/2008 3:35:53 PM

BIDU $289.01 -1.14% ...

SOHU $82.45 +5.38% ... Holding WKLY R1 $80.66 and never looked back from the open.

Linda Piazza : 7/23/2008 3:30:59 PM

Companies reporting tomorrow morning include MMM, ALK, ABC, ABI, AN, CS, DAI, LLY, a number of lesser-known financials, F, GR, LVLT, OXY, RTN, SCHL, LUV, STL, XRX, and probably a whole host of companies whose names I've missed.

Jeff Bailey : 7/23/2008 3:29:42 PM

Dynamic Materials (BOOM) $32.02 +6.73% ... breaks from consolidation low.

Jeff Bailey : 7/23/2008 3:27:15 PM

I won't be able to cover after the bell earnings this evening, other than F5 Networks (FFIV) $31.26 -3.54% ... FLK-TF are $1.80 x $1.90.

Jane Fox : 7/23/2008 3:26:30 PM

Tomorrow's economic reports include:

8:30a.m. Initial Jobless Claims For July 19 Week: Expected: 375K. Previous: 366K.

10:00a.m. June Existing Home Sales: Expected: -0.8% Previous: +2.0%.

Jeff Bailey : 7/23/2008 3:24:50 PM

PBR $55.66 -3.60% ...

Linda Piazza : 7/23/2008 3:24:44 PM

Earnings after the bell today include AFL, ARG, AMZN, ARBA, BIDU, CRA, CRUS, CTXS, FNF, LHO, PHM, QCOM, RHI, SWIR, TER, ALL, TBBK, TSCO, TQNT, TUP and probably a whole host of other attention-worthy companies whose reports I've missed.

Jeff Bailey : 7/23/2008 3:24:28 PM

JBLU $5.20 +15.55% ...

Jane Fox : 7/23/2008 3:24:14 PM

Crude switched to the Sept contract on Tuesday.

Jane Fox : 7/23/2008 3:23:54 PM

I have a realtime Crude Oil feed and the Sept contract is now at 124.17.

Tab Gilles : 7/23/2008 3:24:17 PM

United States Oil (USO) $100.05 -$3.27 (3.2%)

( In reference to my 7/22/08 6:01PM post)

Getting close to its 38.2% retracement level, the 61.8% levels coincides with the 200-ma. Link

PnF $84 P/O Link

Jeff Bailey : 7/23/2008 3:23:02 PM

USO $100.06 -3.15% ... oil prices easing too.

Jane Fox : 7/23/2008 3:22:50 PM

SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell nearly $4 Wednesday, as data showed U.S. inventories fell less than expected and as concerns faded that Hurricane Dolly would pose much of a threat to energy infrastructure in the Gulf of Mexico. Crude for September delivery, the new front-month contract, fell $3.98 cents, or 3.1%, to settle at $124.44 a barrel on the New York Mercantile Exchange. U.S. crude inventories fell 1.6 million in the week ended July 18, the U.S. Energy Information Administration reported. Analysts surveyed by Platts had expected a decline of 1.9 million barrels. The hurricane is not expected to have a major impact on oil and natural gas operations in the Gulf, weather analysts said.

Jeff Bailey : 7/23/2008 3:21:16 PM

RESTaurant Bullish % (BPREST) at last night's close Link

Needs 14.00% to see 3-box reversal back up to "bull alert!"

Keene Little : 7/23/2008 3:20:07 PM

Bulls and bears are still duking it out into the final hour and it's a flip of the coin as to whether we'll see a 5th wave high or another leg down to at least match the one from this morning's high to the mid-day low. Chop chop until we get an answer.

Linda Piazza : 7/23/2008 3:19:40 PM

What happens tonight in other markets? Japan's trade balance is released at 7:50 pm ET. Across Europe, some countries and the Eurozone itself will be receiving manufacturing PMI numbers, with this giving a read on manufacturers. In addition, Germany's important Ifo Business Climate Index will be released. These are all potentially market-moving and currency-moving reports, particularly those European numbers.

Tab Gilles : 7/23/2008 3:13:16 PM

Weekly EIA Report Link

Jeff Bailey : 7/23/2008 3:12:29 PM

Yo Quiero Taco Bell? ... with natural gas prices easing.

Jeff Bailey : 7/23/2008 3:11:31 PM

VXN.X $27.67 +2.14% ...

Jeff Bailey : 7/23/2008 3:11:11 PM

Swing trade call alert! ... for one (1) of the Yum Brands YUM Sep $35 Calls (YUM-IG) at the offer of $2.35.

YUM $35.80 +0.13% ...

Linda Piazza : 7/23/2008 3:09:28 PM

The TRAN diverged from the OEX, SPX and Dow this morning, looking weaker than they did and warning that they might pull back. Now it's diverging again, but in the other direction. For the last 45 minutes or so, it's been moving sideways while the others have been pulling back. I'm not sure what this means, but these indices don't usually go far if the TRAN isn't either leading or at least following.

Linda Piazza : 7/23/2008 3:06:15 PM

Potential support for the OEX on 30-minute closes is at 591.70 and then 590.44.

Jane Fox : 7/23/2008 3:06:06 PM

SPX tags its 38.20% retracement and makes a doji so I think the next move is down. Where that move ends will tell us a lot about where the SPX will be going for the next few months.

If it makes a higher low then we could have a bullish next few months but if it breaks to new yearly lows then all bullish bets are off. Link

Jeff Bailey : 7/23/2008 3:03:00 PM

NASDAQ a/d 1,272:1,624

Jeff Bailey : 7/23/2008 3:02:49 PM

NYSE a/d 1,170:1,969

Jeff Bailey : 7/23/2008 2:55:57 PM

US Dollar Index (DXY) 72.80 +0.49% (30-minute delayed) ... 1-point box Link

0.50 box Link

Jeff Bailey : 7/23/2008 2:53:26 PM

Quote of the Day: Who knows if credit crisis is over - Philadelphia Federal Reserve President Charles Plosser

Linda Piazza : 7/23/2008 2:43:22 PM

The OEX did close that last 15-minute period above the breakout benchmark on the 15-minute chart, but not much above that benchmark, and then the OEX immediately reversed lower. The "breakout" is of course questionable. Potential resistance is now 593.82 on 15-minute closes; 595.76 on 30-minute ones.

Jeff Bailey : 7/23/2008 2:39:55 PM

BIX.X 195.75 +2.84% ... did "prarie dog" its QRTRLY Pivot.

Jeff Bailey : 7/23/2008 2:39:25 PM

RUT.X 721.40 +0.63% ... holding above QRTRLY Pivot.

Jeff Bailey : 7/23/2008 2:38:09 PM

VIX.X 21.48 +1.41% ... couldn't quite get WKLY Pivot (22.10). Human intervention at, at, at 22.08.

Jeff Bailey : 7/23/2008 2:35:20 PM

Good gravy! DXY above WKLY R1.

Keene Little : 7/23/2008 2:35:11 PM

Instead of dropping down to a new low for the pullback we're getting another leg up in the bounce. The pullback either ended with that very short spike down into the 2:00 PM low or else we're going to just flop around this afternoon before getting another leg down. If it does head to a new high it will look like the 5th wave of the move up from yesterday and should be accompanied with bearish divergences (watch for a retest with divergences as well).

Jeff Bailey : 7/23/2008 2:34:48 PM

DXY 72.753 +0.42% (30-min delayed) ... On 6/02/08 this weighted basket of currencies against the dollar closed 72.929.

Jeff Bailey : 7/23/2008 2:32:07 PM

How bout the greenback?

Jeff Bailey : 7/23/2008 2:31:39 PM

Dec Mini Wheat (yw08z) 817 1/2 -0.27% ... On 06/02/08 it settled 820 1/4

Jane Fox : 7/23/2008 2:31:26 PM

CRude is now back to $124.38 after reaching a high of $128.70 today

Linda Piazza : 7/23/2008 2:31:22 PM

The A/D line is attempting to rise out of its sideways trading pattern from this afternoon and is currently at a new afternoon high. However, if it continues rising, still a big "if," I would watch for potential resistance on 15-minute closes at about 1020 and again at about 1200. The A/D line is now 956.

Jeff Bailey : 7/23/2008 2:30:35 PM

Sep Mini Corn (yc08u) 575 1/2 +0.34% ... did battle with its 200-day SMA this morning (546.39). On 06/02/08 it settled 629.

Jeff Bailey : 7/23/2008 2:28:51 PM

September Copper (hg08u) $3.66 -0.81% ... on 06/02/08 it settled $3.60.

Linda Piazza : 7/23/2008 2:28:23 PM

The OEX is still testing. Potential resistance on 15-minute closes is now at about 593.75; on 30-minute, at 595.65.

Jeff Bailey : 7/23/2008 2:27:52 PM

UNG $46.53 -1.93% ... On 06/02/08 it closed $56.70.

Jeff Bailey : 7/23/2008 2:27:14 PM

UGA $57.66 -1.53% ... On 06/02/08 it closed $62.92.

Jeff Bailey : 7/23/2008 2:25:44 PM

USO $100.93 -2.35% ... On 06/02/08 it closed $103.05.

Jeff Bailey : 7/23/2008 2:25:01 PM

iShares Commodity (GSG) $65.86 -1.70% Live! ... On 06/02/08 it closed $68.23.

Jane Fox : 7/23/2008 2:24:33 PM

I still think we will see new daily lows before we see new daily highs.

Jeff Bailey : 7/23/2008 2:23:47 PM

CBR Index 417.80 -0.79% ... on 06/02/08 it closed 425.77.

Jane Fox : 7/23/2008 2:23:45 PM

AD line at +776 and trying to make new daily highs and the VIX hovering at daily highs is a total contradiction and makes no sense. I put more weight on the VIX but add the TRIN (an internal I don't usually watch) to the mix and it makes the whole thing even more confusing.

Jeff Bailey : 7/23/2008 2:18:21 PM

02:00 Internals found at this Link

Jeff Bailey : 7/23/2008 2:14:12 PM

Fed Beige Book (On or before 07/25/07) Link

Jane Fox : 7/23/2008 2:14:10 PM

NEW YORK (MarketWatch) -- Treasurys remained down Wednesday, pushing 10-year note yields to the highest in a month, after the Federal Reserve's Beige Book said the U.S. economy slowed somewhat over the past six weeks while price pressure intensified. Ten-year note yields rose 6 basis points to 4.16%, the highest since June 23. The real estate market remained mired in its slump and banks were suffering as demand was lower, according to the report. Prices on several sectors rose while overall wages were soft. The Beige Book is a collection of anecdotes about the economy used by policy makers in deciding whether to change interest rates at their next meeting on Aug. 5.

Jeff Bailey : 7/23/2008 2:13:10 PM

Fed Beige Book (On or before 06/02/08) Link

Jeff Bailey : 7/23/2008 2:12:30 PM

Fed Beige Book (On or before 07/14/2007) Link

Jeff Bailey : 7/23/2008 2:11:05 PM

There's always a "bear market" somewhere.

Jeff Bailey : 7/23/2008 2:10:50 PM

ABX $44.60 -6.36% ...

Jeff Bailey : 7/23/2008 2:10:35 PM

NEM $47.46 -3.37% ...

Linda Piazza : 7/23/2008 2:10:24 PM

My TED spread quote is delayed, so there hasn't been time for it to react to the 2:00 pm ET release. Into that release, however, it had continued its zigzagging rise off its 1.16 low of the day, and was at 1.22 at the time of my delayed quote.

Jeff Bailey : 7/23/2008 2:10:15 PM

GG $40.57 -6.58% ...

Jeff Bailey : 7/23/2008 2:09:33 PM

GLD 90.68 -2.55% ... takes out morning low.

Linda Piazza : 7/23/2008 2:08:10 PM

The OEX has, so far, continued to find resistance on 15-minute closes at the breakout benchmark now at 593.51, but the 30-minute chart still shows vulnerability to a test of potential resistance at about 595.60, so it's not certain that the OEX is through testing that 15-minute version. If it gets through that, watch for potential resistance on 30-minute closes at the higher version.

Keene Little : 7/23/2008 2:01:10 PM

Tipping back over so now the downside projection for two equal legs down is at SPX 1271.66. If we're in just a corrective pullback we'll probably see that act as support for another bounce (to where I don't know yet).

Jeff Bailey : 7/23/2008 2:00:11 PM

FNM $14.22 +6.04% ... retraces 38.2% of recent advance.

Jane Fox : 7/23/2008 1:59:54 PM

Now I see AD volume falling, VIX climbing and TRIN climbing. This is all bearish.

Jeff Bailey : 7/23/2008 1:58:14 PM

Beige book released.

Jeff Bailey : 7/23/2008 1:57:48 PM

Volatility measures going opposite majors.

Any unusual option activity at a strike? Or stock heavyweight specific?

Jeff Bailey : 7/23/2008 1:55:36 PM

PBR $56.77 -1.66% ... LONG 2 PBR Aug $45 Put (PMJ-TI) $0.10 x $0.20. RIGHT to sell 200 shares of PBR at $45 - 0.25 = $44.75.

Keene Little : 7/23/2008 1:53:49 PM

We're consolidating sideways a little longer and now starting back up. The pattern has become unclear but my best guess is that this afternoon's bounce will fail short of a new daily high and then head lower. That's when I'll be watching for two equal legs down from this morning's high. Preliminary downside target will be around 1270-1272.

Jeff Bailey : 7/23/2008 1:53:21 PM

JBLU $5.09 +13.11% ... LONG JBLU Aug. $2.50 Call (JGQ-HZ) $2.55 x $2.70. RIGHT to buy JBLU $2.50 + $1.70 = $4.20.

Jeff Bailey : 7/23/2008 1:51:16 PM

USO NAKED Aug $93 Put (IYS-TO) $1.65 x $1.80.

OBLIGATED to buy $93. ($93 - $1.40) = $91.60.

Jeff Bailey : 7/23/2008 1:49:34 PM

USO ... 50-cent box to match futures Link

Jeff Bailey : 7/23/2008 1:46:18 PM

USO $101.96 -1.31% ... daily interval bar chart. Same "stacked" Bailey Wave with MONTHLY and QRTLRLY Pivot retracement Link

Linda Piazza : 7/23/2008 1:45:03 PM

Indices are bouncing. The TRAN is jammed against potential resistance on 30-minute closes that's now at about 5121, with the TRAN at 5113.30 as I type. Don't expect OEX, Dow and SPX gains, if any, to be sustained, if the TRAN can't sustain 30-minute closes above that resistance.

Jane Fox : 7/23/2008 1:38:42 PM

This is what has been bugging me today, the AD volume is not in sync with the VIX and the reason ES is not making new daily lows. Link

Linda Piazza : 7/23/2008 1:37:29 PM

Keep an eye on the RVX over the next hours. A sustained move above about 26.37 or maybe 26.50, might be significant, increasing the propensity for the RUT to pull back. RVX is 26.12 as I type, still struggling with that breakout mode benchmark resistance that I mentioned earlier.

Jane Fox : 7/23/2008 1:34:59 PM

Well it certainly looks like the market is NOT listening to me today. I have been saying the S&P futures are going to make new daily lows and although this market is hovering at daily lows it is not making new daily lows.

Linda Piazza : 7/23/2008 1:34:18 PM

My early overview for the day was that, even if the OEX was going to sustain its rally mode for a while, the OEX could be due to start its typical 2-5 days of consolidation after a strong day, a typical rally pattern for the OEX. Therefore, I wouldn't be surprised to see the OEX end the day somewhere near its current level or even lower. However, we don't know that the OEX is going to consolidate. It could just decline. It could rise, beginning a consolidation pattern by rising and defining where the OEX is likely to be capped during the consolidation pattern. Consolidation results when bears and bulls are evenly matched or equally uncertain about what happens next, so chart characteristics become less trustworthy.

I'm noticing that the OEX's pullback from the day's high is beginning to look a bit bull flag-like, something that Keene may already have noted with respect to the SPX. Therefore, it's still possible that the OEX will attempt to bounce and break out of that flag to the upside. If that should happen, watch for potential resistance, especially on 30-minute closes at 595.23. The 15-minute version is 593.12, but if we get a stop-running move during the lunchtime lull, that could easily be breached.

Jeff Bailey : 7/23/2008 1:31:05 PM

Good eye Jane ... QRTRLY Pivot/MNTHLY S1 right above.

Linda Piazza : 7/23/2008 1:27:16 PM

The TED spread is currently 1.21, up from the day's 1.16 low but down from the 1.32 high. Today's daily chart shows it zigzagging higher from that early low.

Linda Piazza : 7/23/2008 1:19:04 PM

After erasing its breakout status this morning and proving how often these breakout situations result in whipsaws, the OEX is again rising to retest the breakout benchmark. That's now at 593.26 on 15-minute closes; 595.23 on 30-minute ones. I would watch for potentially strong resistance on 15- and 30-minute closes at those levels, with the OEX just having closely approached the 15-minute version. The OEX has pulled back from that test but not far back. It's at 591.74 as I type. The OEX is growing more vulnerable to another test of the 590.36 region, although it hasn't quite set a target there yet. Bears would like to see the OEX drop beneath 590.36 and sustain levels there, while bulls want a bounce from that potential support.

Jane Fox : 7/23/2008 1:18:57 PM

By the way all those buyers I saw in the Crude market earlier disappeared as fast as they appeared.

Jane Fox : 7/23/2008 1:14:59 PM

If I were a betting kind of person I would be betting ES (S&P futures) would be making new daily lows real soon.

Jeff Bailey : 7/23/2008 1:10:19 PM

Wave traders will note USO hasn't been able to close below since gapping above on 05/05/08.

Jeff Bailey : 7/23/2008 1:08:37 PM

USO $102.75 -0.57% ... still holding our overlap of "stacked" Bailey Wave.

Jeff Bailey : 7/23/2008 1:07:48 PM

JetBlue Airways (JBLU) $4.94 +9.77% ... does battle with its 150-day SMA ($4.99)

Jeff Bailey : 7/23/2008 1:06:32 PM

Most Actives ... QQQQ $45.10 +0.71%, C $21.10 +1.10%, BAC $33.02 +2.07%, WFC $31.15 +2.33%, UYG $23.41 +3.58%, MSFT $26.31 +1.97%, XLF $22.35 -0.62%, F $5.98 +2.39%, SPY $128.19 +0.55%, UAUA $8.80 +4.63%

Jeff Bailey : 7/23/2008 1:00:10 PM

DJUSHB 299.33 +1.80% ... Looks about right.

Jeff Bailey : 7/23/2008 12:59:43 PM

My 12-week SMA for Purchases Index fell to 351.3 from 355.5.

4-week SMA up a fraction to 351.0 from 350.4.

Jeff Bailey : 7/23/2008 12:53:13 PM

USO $102.64 -0.65% ... slips back red.

Linda Piazza : 7/23/2008 12:53:16 PM

So far today, the BIX's daily candle is an ugly one, one that on the BIX is often followed by a pullback, as happened on 3/24 and 5/02, for example. Sometimes pullbacks aren't that dramatic, however, and this day is far from over. The candle might be anything by the end of the day. However, I had a reason for posting that earlier notation from Bloomberg that the financials had, as of this morning's high, risen 32% off their trough in six days and now comprised the second largest sector of the SPX. (Note: I took Bloomberg at their word and haven't computed this for myself.) Is that too much? Do you feel comfortable basing your SPX-related bullish strategies on an index that's relying so strongly on the financials, when they've already bounced so dramatically? Perhaps you do, but, if not, think about ways you'll temper your bullish risks.

Jeff Bailey : 7/23/2008 12:51:57 PM

Dow Components sorted by weight at this morning's open Link

IBM 9.12%, CVX 6.01%, XOM 5.81%, CAT 5.26%, MMM $4.93%, BA 4.86% ...

IBM to MCD 54.07% of weighting.

Jane Fox : 7/23/2008 12:47:21 PM

TRIN as fallen back to 0.97 and AD volume never did make a new daily low.

Keene Little : 7/23/2008 12:43:18 PM

Since making the low near 12:15 PM SPX is doing a little sideways shuffle (looking at a 2-min chart). If this sideways move is followed by another drop lower it will create a 5-wave move down from this morning's high. That would be an indication of a trend change. After a 5-wave move down we'd get a bounce to correct today's decline and that would be a good setup for a short play for at least another leg down.

That's what I'm watching for on the bearish side but so far the move down today remains a correction and the larger pattern for the rally from yesterday's low suggests we're due for another rally leg to a new high (SPX 1292-1295 upside target).

Jeff Bailey : 7/23/2008 12:43:06 PM

SPX Heavyweights Link

Linda Piazza : 7/23/2008 12:41:07 PM

RVX, the RUT's volatility index, has bounced up to test potentially strong resistance near 26.10-26.40. The RVX is 26.21 as I type. It would be natural and normal for the RVX to pull back or else consolidate near this level for a while before deciding on next direction. RUT bears want a strong RVX push up through 26.40 first and then continued gains. RUT bulls want to see the RVX knocked lower or at least consolidate for a while.

A note about these volatility indices. I've been posting all day that they are not always good market-timing tools but that the RVX's action, coupled with the RUT's near test of its 200-ema and 200-sma today, signal that RUT bulls need to be careful. That doesn't mean that you can ignore stops that are being hit for bearish trades. For example, this morning, my trading rules for credit spreads signaled that it was time for me to start stepping out of some of my RUT bear call spreads. I didn't ignore the signal just because I believe that the RUT's gains may soon be capped, over the next few days, and that the RUT might at least consolidate for a while. So, heed the warnings to protect profits if you're in bullish positions, but I mean it when I say that I'm not suggesting that bears ignore their stops if an entered trade is going wrong. Relief rallies can be sharp and can ignore all likely resistance areas on the way up. Volatility indices warn us but they don't always give precise warnings.

Jeff Bailey : 7/23/2008 12:37:24 PM

Oil Spill closes Mississippi River at New Orleans. (12:29 PM EDT)

Jeff Bailey : 7/23/2008 12:35:39 PM

Suncor Energy (SU) $54.77 +0.75% ... reports lifting of production cap at Firebag in-situ oil sands operations.

Jeff Bailey : 7/23/2008 12:33:58 PM

eTrade (ETFC) $3.50 -13.58% ... #9 most active.

Jeff Bailey : 7/23/2008 12:33:22 PM

XBD.X 156.99 -2.96% ...

Linda Piazza : 7/23/2008 12:31:03 PM

Jane mentioned buyers coming back into crude today. I'm back at my desk long enough to notice that the TRAN is just off a new low for the day, and that it's dropped below the 5100 level. It's at 5088.30 as I type, now being vulnerable to 5066 or perhaps even 5030.

Jane Fox : 7/23/2008 12:21:59 PM

TRIN still climbing to new daily highs.

Jeff Bailey : 7/23/2008 12:21:40 PM

VLO $34.03 -3.48% ...

Jeff Bailey : 7/23/2008 12:21:27 PM

TSO $16.55 -6.64% ...

Jeff Bailey : 7/23/2008 12:21:09 PM

UGA $57.73 -1.41% ...

Jeff Bailey : 7/23/2008 12:20:40 PM

USO $103.37 +0.03% ... inches green.

Jane Fox : 7/23/2008 12:20:08 PM

TRIN is a bearish 1.20 but I still do not see AD volume to new daily lows, the only piece needed to complete the bearish scenario.

Jeff Bailey : 7/23/2008 12:19:18 PM

INDU 11,582 -0.17% ... slips red.

IBM -1.19%, CVX -1.10%, XOM -0.31%, CAT -4.00%, MMM +0.34%, JNJ +0.08%, BA -3.85%, UTX +0.42%, PG +0.84%, MCD -1.09%

Jane Fox : 7/23/2008 12:18:12 PM

I am seeing lots of buyers coming back to Crude today.

Jeff Bailey : 7/23/2008 12:17:27 PM

SOHU $81.11 +3.66% ... session high has been $82.58.

Jeff Bailey : 7/23/2008 12:17:03 PM

FRE $10.61 +9.38% now.

Keene Little : 7/23/2008 12:16:53 PM

The pullback from this morning's high is only a 3-wave move so far and as such is just a correction. It's still possible we have not put in the 5th wave of the move up from yesterday morning but in order for that to happen it needs to turn around and start rallying from here. Link

Jeff Bailey : 7/23/2008 12:16:47 PM

BAC $32.31 -0.15% ... slips red.

Jane Fox : 7/23/2008 12:16:02 PM

ES heading down to at least test its daily lows as the VIX is spiking.

Jane Fox : 7/23/2008 12:14:39 PM

Here is the divergence I was talking about earlier. VIX is making new daily highs but the S&p futures are not making new daily lows. This tells me ES will make new daily lows soon . Link

Jeff Bailey : 7/23/2008 12:14:04 PM

12:00 Internals at this Link

Jeff Bailey : 7/23/2008 12:05:27 PM

SPX 1,282 +0.40% ...

Jeff Bailey : 7/23/2008 12:04:46 PM

VIX.X 21.57 +1.79% ... recaptures QRTRLY Pivot.

Jeff Bailey : 7/23/2008 12:03:11 PM

Now I think I know why Robert wanted to switch evening market wraps.

Jeff Bailey : 7/23/2008 12:02:36 PM

Wyeth (WYE) $45.88 +2.68% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 12:01:29 PM

Whirlpool (WHR) $72.29 +6.07% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 12:00:25 PM

Name you'll know ...

Jeff Bailey : 7/23/2008 11:59:57 AM

HMO.X 72.87 +5.60% ...

Jeff Bailey : 7/23/2008 11:59:40 AM

UnitedHealth (UNH) $27.52 +4.99% ...

Jeff Bailey : 7/23/2008 11:59:15 AM

Cigna (CI) $37.07 +2.88% ...

Jeff Bailey : 7/23/2008 11:58:56 AM

Aetna (AET) $39.07 +8.04% ...

Jeff Bailey : 7/23/2008 11:57:45 AM

WellPoint (WLP) $52.57 +7.83% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:56:38 AM

Lowes Co. (LOW) $20.94 +1.45% ...

Jeff Bailey : 7/23/2008 11:55:57 AM

Home Depot (HD) $24.90 +3.96% ...

Jeff Bailey : 7/23/2008 11:55:35 AM

Tractor Supply (TSCO) $32.98 +4.72% ... earnings after the bell.

Jeff Bailey : 7/23/2008 11:54:50 AM

The Travelers (TRV) $45.42 +1.70% ... Take a look above $45.00 resistance. Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:53:21 AM

NY Times (NYT) $13.00 +1.08% ... Earnings Press Release Link

Linda Piazza : 7/23/2008 11:51:10 AM

Earlier this morning, I posted a daily chart of the RVX (9:33:45 post). That chart noted a rising trendline that had been supporting the RVX ($RVX on some charts), but the RVX dipped beneath it this morning. Now I note that the RVX is bouncing from this morning's low, and I'm wondering if my best-fit trendline from earlier was the true one or the one that includes the June 23 lower shadow might be. At any rate, the RVX is currently above both, so RUT bulls must be aware that there's the potential that the RUT might be topping. These volatility indices are not always good market-timing tools, and, of course, it's possible that the RVX will eventually violate this trendline and head lower again. However, due to this morning's actions, be careful if in RUT bullish position. Here's the chart again: Link

Jeff Bailey : 7/23/2008 11:51:36 AM

Hershey (HSY) $36.18 +3.51% ... Has done battle with its 150-day SMA. Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:50:06 AM

Boeing (BA) $67.02 -3.23% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:48:34 AM

The Allstate Group (ALL) $45.98 +0.81% ... earnings after the bell.

Jeff Bailey : 7/23/2008 11:47:57 AM

Caterpillar (CAT) $73.04 -2.58% ...

Jeff Bailey : 7/23/2008 11:47:38 AM

Terex (TEX) $49.84 +0.76% ... earnings after the bell.

Jeff Bailey : 7/23/2008 11:47:15 AM

Teradyne (TER) $10.59 +5.90% ... earnings after the bell.

Jeff Bailey : 7/23/2008 11:46:16 AM

TCF Financial (TCB) $13.72 -3.78% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:44:14 AM

Sovereign Bancorp (SOV) $9.37 +7.45% ... Has done battle with 150-day SMA. Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:42:48 AM

Ryland Group (RYL) $25.35 +0.03% ... Battles 50-day SMA. 150 and 200 above. Earnings after the bell.

Jeff Bailey : 7/23/2008 11:41:51 AM

Amerco (UHAL) $47.18 +0.57% ...

Jeff Bailey : 7/23/2008 11:41:28 AM

Ryder Systems (R) $70.05 -6.68% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:40:04 AM

Range Resources (RRC) $55.94 -3.91% ... Slips below 200-day SMA. Earnings after the bell.

Jeff Bailey : 7/23/2008 11:38:01 AM

Qualcomm (QCOM) $43.71 -0.88% ... back to test correlative 150-day and 200-day SMA's. Earnings after the bell.

Jeff Bailey : 7/23/2008 11:37:16 AM

Pulte Homes (PHM) $12.87 +3.29% ... bold move above correlative 150-day and 200-day SMA. Earnings after the bell.

Jeff Bailey : 7/23/2008 11:36:17 AM

Philip Morris (PM) $51.85 -0.38% ... Earnings Press Release Link

Linda Piazza : 7/23/2008 11:35:15 AM

I'm signing back on for a moment to note that the OEX has not been able to create a breakout situation on its 30-minute Keltner chart. Instead, it's been finding resistance on 30-minute closes at that potential resistance, now at about 594.80. However, unless and until it maintains 15-minute closes beneath about 591.90, it remains in a breakout mode on that chart and the shortest-term upside momentum remains intact. This is a time to be cautious about protecting your bullish profits. Keep an eye especially on the RUT and TRAN, with the RUT having closely approached its 200-ema at 728.50 and 200-sma, at 730.48. While the RUT can of course pierce these, this seems a natural place for it to pause, at least. I'm particularly worried about the TRAN's behavior on its 30-minute chart as it's been chopping around somewhat wildly after breaking above 5100. I was taught long ago that when volatility increased after prices broke above resistance, to be somewhat distrustful of that break above resistance. Such action doesn't guarantee that the TRAN will pull back, of course, as it shot higher after it had begun chopping wildly back and forth, but it does signal that attention needs to be paid.

Jeff Bailey : 7/23/2008 11:35:06 AM

Pfizer (PFE) $18.93 +3.16% ... nice break-out. Earnings Press Release Link

Keene Little : 7/23/2008 11:33:38 AM

Speaking of the banks, BIX made it up to the top of its parallel down-channel this morning. The top is only a guide and is based off the trend line along the lows in March and July (1st and 3rd waves with the parallel attached to the 2nd wave). The BIX can certainly push higher but it's equally possible the short-covering flare-up is finished and now we'll start the 5th wave down. Daily chart: Link

Jeff Bailey : 7/23/2008 11:33:31 AM

Coca Cola (KO) $51.73 +0.74% ... other day looking at SPX heavyweights, KO and PEP were side-by-side.

Jeff Bailey : 7/23/2008 11:32:55 AM

Pepsico (PEP) $66.42 +0.34% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:31:40 AM

Peabody Energy (BTU) $64.50 -0.81% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:30:30 AM

P.F. Chang's (PFCB) $25.91 +0.73% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:29:10 AM

Anheuser Busch (BUD) $67.45 +0.29% ... Earnings Press Release Link

Keene Little : 7/23/2008 11:28:44 AM

The techs have clearly been lagging during the past week's rally and the price pattern in July continues to look like a bearish consolidation. At this point I think it would take a break above NDX 1910 (today's high is 1865) to turn more bullish. There could be a little more upside today but I think the techs could lead us to the downside once the short-covering excitement is over in the banks, airlines and other beaten-down sectors. Daily chart: Link

Jeff Bailey : 7/23/2008 11:28:14 AM

Molson Coors (TAP) $56.47 -0.17% ...

Jeff Bailey : 7/23/2008 11:27:46 AM

Anheuser Busch (BUD) $67.43 +0.26% ... earnings hitting the wire. Being acquired by InBev

Jeff Bailey : 7/23/2008 11:27:03 AM

Northwest Airlines (NWA) $9.83 +8.25% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:25:22 AM

McDonald's (MCD) $59.00 -1.86% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:24:12 AM

Lennox Intl. (LII) $35.40 +7.27% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:22:33 AM

TRAN 5,132.89 -0.38% ...

Jeff Bailey : 7/23/2008 11:22:05 AM

Somebody noted TRAN "weakness" this morning.

Jeff Bailey : 7/23/2008 11:21:43 AM

YRCW $20.73 -3.22% ...

Jeff Bailey : 7/23/2008 11:21:27 AM

Knight Transport (KNX) $20.58 -2.00% ... reports after the close.

Jeff Bailey : 7/23/2008 11:18:28 AM

CHK $50.80 -0.58% ... down 23.92% 20-dayNet%

Jeff Bailey : 7/23/2008 11:15:47 AM

UNG -24% on 20-day Net%, I'd cover some very, very profitable short positions too.

Jeff Bailey : 7/23/2008 11:14:56 AM

Same she was yesterday. Link

Jeff Bailey : 7/23/2008 11:13:28 AM

Where is Dolly?

Jeff Bailey : 7/23/2008 11:13:22 AM

Dolly strengthens to Category 2 hurricane

Jeff Bailey : 7/23/2008 11:12:45 AM

There ...

Jane Fox : 7/23/2008 11:12:43 AM

VIX and the S&P futures are in sync today so start looking for divergences to give you clues as to if the daily highs or lows will break. The AD line at +888 tells me there will not be a lot of power behind any move. Link

Jeff Bailey : 7/23/2008 11:11:37 AM

JBLU $4.95 +10.00%

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

USO $102.55 -0.76% ... off lows of, of, of 101.00.

Jeff Bailey : 7/23/2008 11:10:40 AM

US Nat. Gas Fund (UNG) $47.98 +1.11% ... reversing losses.

Jeff Bailey : 7/23/2008 11:08:53 AM

General Dynamics (GD) $85.40 +2.33% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:07:32 AM

FFIV reports after the close.

Jeff Bailey : 7/23/2008 11:07:00 AM

ConocoPhillip (COP) $83.86 -0.53% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:05:12 AM

AT&T (T) $32.76 +2.89% ... Earnings Press Release Link

Jeff Bailey : 7/23/2008 11:01:45 AM

VIX.X 21.00 -0.84% ...

Jeff Bailey : 7/23/2008 11:01:22 AM

Swing trade call exit alert! ... for the Freddie Mac FRE Oct. $10 Calls (FRE-JB) at the bid of $3.50.

FRE $10.77 +10.82% ...

Jeff Bailey : 7/23/2008 11:00:20 AM

F5 Networks (FFIV) alert! $30.97 -4.44% ... trades our bear entry on the FLK-TF

Keene Little : 7/23/2008 10:59:35 AM

Gold update: By dropping below 92 (the May 21st high), GLD has confirmed the bounce off the April low as a corrective 3-wave bounce. The only thing I don't like about the decline from its July 15th high is the fact that it started down in a very choppy fashion and makes it look like it's only a corrective pullback. It might mean we'll get another choppy leg up to a new high by the fall (perhaps coinciding with a new decline in the stock market) to finish gold's rally, shown in green on the daily chart: Link

But that's somewhat speculative and so far the daily price pattern looks bearish for a move now down to a target around 80. Between triangle apex support (from the end of last year) and the uptrend line from July 2005 I would expect some strong support in that area. The longer term pattern suggests even lower for gold but I'll have a better sense of that if and when it gets down to 80.

Jane Fox : 7/23/2008 10:59:22 AM

SAN FRANCISCO (MarketWatch) - U.S. crude inventories fell less than expected, down 1.6 million barrels to 295.3 million barrels in the week ending July 18, U.S. Energy Information Administration reported on Wednesday. Analysts surveyed by energy information provider Platts expected a drop of 1.9 million barrels. After the data, crude-oil futures for September delivery briefly pared losses, falling less than 1%. Crude was last down $2.52, or 2%, at $125.90 a barrel on the New York Mercantile Exchange. Gasoline supplies rose by 2.9 million barrels in the latest week, and distillate stocks gained by 2.4 million barrels, EIA reported.

Jane Fox : 7/23/2008 10:52:37 AM

Gold is taking a healthy retracement here and I am looking for another opportunity to go long. Link

Jeff Bailey : 7/23/2008 10:50:33 AM

SBUX $15.91 +5.15% ... remaining position in SQX-VC now above bear entry of $15.68.

Linda Piazza : 7/23/2008 10:48:58 AM

Now that Keene is back, I'm going to be signing off for a few hours and perhaps until the end of the day. I wanted to stay with you while he was away.

The OEX is in breakaway mode, as are several other indices. It's dangerous to try to fade such moves with bearish trades, perhaps, but if you're in bullish ones, you need to remain on your toes and rein in your enthusiasm enough to encourage you to maintain sound account and trade management.

Tab Gilles : 7/23/2008 10:44:25 AM

Refiners Link The EIA weekly report showed a build in gasoline to 2.84M bbl. Refiners aren't making money, this is why your seeing gasoline builds.

Linda Piazza : 7/23/2008 10:43:51 AM

The OEX is now in breakout mode on the 15-minute chart and will remain there unless and until it produces 15-minute closes below 591.12. OEX at 596.07 as I type. It's threatening to create a breakout mode on the 30-minute chart, too, if it finishes this 30-minute period above 594.71.

Jeff Bailey : 7/23/2008 10:43:01 AM

CAL $15.00 +13.12% ...

Jeff Bailey : 7/23/2008 10:42:46 AM

AMR $10.40 +12.43% ...

Jeff Bailey : 7/23/2008 10:42:24 AM

JBLU $5.15 +14.44% ...

Jeff Bailey : 7/23/2008 10:41:52 AM


Jeff Bailey : 7/23/2008 10:41:19 AM

UGA $57.72 -1.43% ...

Jeff Bailey : 7/23/2008 10:41:02 AM

USO $101.41 -1.84% ...

Jeff Bailey : 7/23/2008 10:40:08 AM

EIA: US Refineries ran at 87.1% vs. 89.5% prior week.

Keene Little : 7/23/2008 10:39:29 AM

DOW 11708 would be a 38% retracement of the May-July decline and makes for a good upside target.

Linda Piazza : 7/23/2008 10:39:29 AM

RUT traders should be aware that the RUT's 200-ema is at 728.53 and the 200-sma, at 730.49. These are potentially strong resistance levels on daily closes.

Jeff Bailey : 7/23/2008 10:39:24 AM

EIA: US Total Distillate stockpiles +2.419M barrels.

Jeff Bailey : 7/23/2008 10:38:53 AM

EIA: US Total Gasoline stockpiles +2.847M barrels.

Jeff Bailey : 7/23/2008 10:37:58 AM

EIA: US Crude Oil Stockpiles -1.558M barrels.

Linda Piazza : 7/23/2008 10:37:34 AM

Runaway action. Keep running with it if you're long, but think about taking partial profits along the way to lock them in as runaway action is emotion-driven action.

Jeff Bailey : 7/23/2008 10:37:32 AM

UGA $57.72 -1.43% ...

Jeff Bailey : 7/23/2008 10:37:18 AM

USO $102.04 -1.23% ...

Tab Gilles : 7/23/2008 10:36:02 AM

JP Morgan/Chase (JPM) $42.10 +$1.24 (3.03%)

Touching its 200-ma and the 61.8% Fibonacci Retracement from the May/July levels. Link Link

The suggested LEAP calls WJPAG $11.10; WJPAH $8.30; WJPAI $6, mostly have doubled. Taking 1/2 a position off the table would be prudent and letting the rest ride on the houses money. Link

Keene Little : 7/23/2008 10:34:47 AM

I'm back and I see we got some follow through to the upside this morning. The new high has some bearish divergences against yesterday's high so that's helping confirm that it's probably going to be finishing the leg up at least from yesterday morning if not the one from the July 15th low. Therefore a pullback correction should be expected soon. We might see a small consolidation and one more minor push higher before starting the larger pullback. SPX 1290 makes for a good target area.

Jeff Bailey : 7/23/2008 10:34:13 AM

How's are oil hedge working?

Jeff Bailey : 7/23/2008 10:33:25 AM

BAC $33.62 +3.98% ...

Jeff Bailey : 7/23/2008 10:33:06 AM

FNM $16.11 +20.43% ...

Jeff Bailey : 7/23/2008 10:31:32 AM

FRE $11.21 +15.56% ...

Jeff Bailey : 7/23/2008 10:30:53 AM

SPX 1,287.68 +0.83% ... clears WKLY R1. Moves "into the zone" at MONTHLY 38.2% (1,287.52) and QRTRLY 38.2% (1,291.03).

Linda Piazza : 7/23/2008 10:26:33 AM

The TRAN is acting a bit crazy, each 30-minute candle larger than the other and engulfing the previous one. This is a widening pattern, indicative of emotion-based trading, and so indicative of danger to both bulls and bears alike.

Jeff Bailey : 7/23/2008 10:26:11 AM

SOHU $81.12 +3.68% ... good decision so far.

Linda Piazza : 7/23/2008 10:25:20 AM

No reversal with that potential reversal signal on the OEX's 30-minute chart! Instead, the OEX has reached right up to test potential resistance on 30-minute closes at about 594. OEX at 593.79 as I type.

Jeff Bailey : 7/23/2008 10:25:16 AM

VIX.X alert! ... 20.84 -1.60% ... undercuts MNTHLY 61.8% retracement and looks to fall "out of the zone"

Tab Gilles : 7/23/2008 10:23:52 AM

Apple (AAPL) $167.00 +$5.00 (3.08%


Apple is now over Monday's close of $166.29...prior to their earnings release.

Jeff Bailey : 7/23/2008 10:20:16 AM

10:00 Internals at this Link

Note: It would currently take a closing session measure of >=12.00% for the NYSE 10-day NH/NL ratio to see a 3-box reversal back higher.

Linda Piazza : 7/23/2008 10:19:57 AM

Bloomberg TV was just posting information that the financials have risen 32% from trough to peak over the last six trading days. They've risen so much that they now represent the second largest sector group in the SPX, up from the fourth six days ago.

Jane Fox : 7/23/2008 10:11:41 AM

The AD volume and ratio are bullish (new daily highs) but the very important VIX is not making new daily lows to support the bullishness. This means any rally or selloff will be short-lived and there is no real direction yet. Link

Linda Piazza : 7/23/2008 10:09:14 AM

Potential OEX resistance on 15-minute closes is now at about 590.38. The OEX is above that currently, but with many minutes left in the 15-minute period. OEX at 590.48 as I type.

Linda Piazza : 7/23/2008 10:08:20 AM

OEX, SPX and Dow bulls would like to see the TRIN find resistance on 15-minute closes at about 0.74 or at least 0.87. It's at 0.66 as I type with RSI's sub-30 levels at levels that often suggest a TRIN bounce as a possibility. A TRIN bounce doesn't always produce deep equity pullbacks if the underlying atmosphere is bullish enough, but it can cap gains and result in sideways movement.

Tab Gilles : 7/23/2008 10:01:52 AM

Linda...nice observation on the $RVX.

A look at some of the major indicies and their respective Volatility indicies. Link

$RUT/ $SPX: Link

Jeff Bailey : 7/23/2008 10:00:07 AM

MBA's Weekly Application Survey Link

Jeff Bailey : 7/23/2008 9:58:59 AM

Correction alert! ... 09:49:55 Post should read ... Establish stop for the UZK-TN at $80.25 in the underlying shares of Sohu.com (SOHU).

Trade should be stopped as SOHU did trade $80.25.

Linda Piazza : 7/23/2008 9:58:20 AM

The OEX is printing, so far, a classic potential reversal signal on its 30-minute chart: a small-bodied candle with a long tail springing up from yesterday's closing level. This is "potential" only and not a confirmed signal, but bulls now do not want the next 30-minute period to reverse more than 50% of yesterday's last 30-minute candle's range, with that halfway mark at 586.46. So, bulls don't want to see the next (not current) 30-minute period close with the OEX at or below 586.46. OEX at 489.40 as I type.

Linda Piazza : 7/23/2008 9:55:35 AM

My delayed feed on the TED spread shows a value of 1.18, up just a touch from the 1.16 low of the day, but well below the 1.32 high.

Jeff Bailey : 7/23/2008 9:55:17 AM

Hang Seng ($HSI) 23,134 +2.69% ...

Jeff Bailey : 7/23/2008 9:54:42 AM

Shanghai Comp. ($SSEC) 2,837 -0.29% ...

Linda Piazza : 7/23/2008 9:54:25 AM

TRAN now 5110.46 testing its 30-minute 9-ema's support with further support now at 5091.80.

Jeff Bailey : 7/23/2008 9:53:51 AM

USO $102.49 -0.80% ...

Linda Piazza : 7/23/2008 9:53:30 AM

Careful, OEX, SPX and Dow bulls. The TRAN is not behaving as well as some other indices this morning. It's bounced a little from its early morning low, but not to the degree that other indices have, and it's nearly reversed its last 30-minute candle from yesterday. A 30-minute close below about 5092 would suggest that it's weakening. It's at 5115 as I type.

Jeff Bailey : 7/23/2008 9:53:28 AM

BIDU $295.64 +1.12% ...

Jeff Bailey : 7/23/2008 9:53:14 AM

GOOG $486.79 +2.02% ...

Jeff Bailey : 7/23/2008 9:52:34 AM

Swing trade put stop alert! for the Sohu.com SOHU Aug $70 Put (UZK-TN) at the bid of $2.00.

SOHU $80.25 +2.50% ...

Jeff Bailey : 7/23/2008 9:49:55 AM

Swing trade put establish stop alert! ... for the Sohu.com SOHU Aug $70 Put (UZK-TN) at the bid of $2.20.

SOHU $79.96 +2.19% ... at $80.25.

Linda Piazza : 7/23/2008 9:48:49 AM

So far, it's the TRIN that's tending to lose support while the A/D line is continuing its bounce. The A/D line has already risen to test the resistance zone from about 360-520 currently, with the A/D line at 458 as I type. The 15-minute 9-ema for the A/D line is now at 695.70.

Linda Piazza : 7/23/2008 9:46:22 AM

If the OEX continues dropping, where might it find support? The 587.05-587.70 zone is one place, suggested by an amalgamation of the 15-minute and 30-minute charts.

Potential resistance on 15-minute closes is now at 589.90, but that's resistance that's been softened and is turning up.

Jane Fox : 7/23/2008 9:45:23 AM

AS line opens at a very neutral +124

Jane Fox : 7/23/2008 9:46:05 AM

I thought Crude's trading range from $140 to $130 to be an area of support but that did not happen and for the last 4 days it has traded mostly under this range. Do I think Crude has more upside? Yes I do. Do I know when that will happen? No I don't. In any case I still will never ever short Crude unless I am daytrading. Link

Linda Piazza : 7/23/2008 9:44:13 AM

Keltner outlook on TRIN: Surprisingly, the TRIN opened in the same place the A/D line did, on the analogous potential support on 15-minute closes. It, too, is bouncing from this support or at least attempting to do so. Since the TRIN moves in opposition to equity prices generally, any TRIN bounce would be a negative for equity bulls. Either the A/D line or the TRIN is likely to lose support or at least fail after a bounce, as they don't tend to move in concert with each other, but with them doing so this morning, it's dangerous to guess next direction for equities. Just follow price action.

Linda Piazza : 7/23/2008 9:41:28 AM

Keltner outlook on the A/D line: With indices such as the OEX gapping higher this morning at the open (but now coming down, of course), the A/D line opened at a surprising place. It opened in the lower or bearish (for equities) half of the Keltner channels on the 15-minute chart. However, it's at potentially strong support, with that extending down to about -150 and the A/D line now at +31 and up from its -137 low. So, the potential is for the A/D line to either bounce from that support, where it will encounter next potential resistance from about +360 to +500, or to lose that support and perhaps tumble down toward -941. Right now, it's bouncing, but this 15-minute period still has a long way to go.

Tab Gilles : 7/23/2008 9:40:29 AM

SPY $127.71 +$0.21 Link

Linda Piazza : 7/23/2008 9:35:56 AM

The OEX gaps right up to that potential resistance on 15-minute closes, now just a hair under 590. Be careful here, as it's time for the OEX to either create a breakout mode or else pull back. Keltner channels were invented to identify securities in breakout mode, but the problem with trading such breakouts is that they frequently reverse and whipsaw traders out of their trades. When they're profitable, they're mightily profitable, but a trader trading them has to be able to endure many whipsaws. Therefore, any time a security moves into breakout mode, the momentum is strong and it's not a particularly good time necessarily to fade the move, but it's certainly a time to cinch up stops if you're in a trade going the direction of the momentum.

Linda Piazza : 7/23/2008 9:33:45 AM

Last night, when looking at a daily chart of the RVX, the RUT's volatility index, I noticed that it had ended the day right at potential support on the rising trendline from May's low: Link As this Stockcharts chart shows, the RVX has tended to bounce from this trendline since early May. Newbies should remember that although volatility indices aren't always good market-timing tools, the equity (the RUT, in this case) tends to move in opposition to the volatility index.

Jane Fox : 7/23/2008 9:33:13 AM

Needless to say the post I made earlier should have read If the SPX turns and makes a higher low not a higher high.

Linda Piazza : 7/23/2008 9:29:59 AM

The delayed quote on the TED spread shows it at 1.17 this morning, down 0.088 or 7 percent. I believe there could be support in the 0.92 region, so I would want to see the TED spread below that before I started celebrating the decline in default risk too much. Remember that it's traditional range before last August was 0.10-0.50.

Jane Fox : 7/23/2008 9:32:18 AM

SPX has rallied nicely over the last 5 days however; it has not even reached the 38.20% Fib retracement level yet. It would be quite bearish If it turns around here and makes new yearly low but if it turns and makes a higher low then expect this rally to last a while longer. Link

Tab Gilles : 7/23/2008 9:06:14 AM

Russell 2000 ($RUT)

Small-caps are now doing better than the overall market....a very bullish signal. These stocks typically get sold off during tough economic times as investors look to safer investments, but historically are the first to rise when the economy rebounds. In the year following the end of each of the past 10 recessions, small stocks rose an average of 28% compared to 19% for large stocks, according to T. Rowe Price. As for the Russell 2000 index ($RUT) of smaller companies has performed significantly better than larger-company indexes so far this year. Link

Daily--- Link PnF--- Link Weekly--- Link

Rydex Russell 2000 2X etf, returns double of $RUT Link

A few call options that look interesting Sept $75 IQQIW $1.40 & Jan '09 $75 IOWAW $3.20.

Jane Fox : 7/23/2008 9:01:34 AM

Here are your overnight charts. All markets have broken their previous day highs. Link

Linda Piazza : 7/23/2008 8:56:47 AM

Yesterday, the OEX rolled right up into and slightly through the 587-588 zone that looked as if it might be resistance. If you remember, my viewpoint for the last few days is that it's possible the OEX could be setting up a consolidation zone that's marked by daily closes mostly at or above the 10-sma now at 572.82 and the 30-sma, which the OEX rolled up to test at the end of the day yesterday. I thought it could be up to another week before we knew next near-term direction.

If we take the RUT as an example, it's possible that the next direction is up and that it won't take another week to find out that next ultimate direction. The TRAN presents that same possibility, and the TRAN often leads the SPX, OEX and Dow. Surprised shorts have surely fueled some of the gains, and relieved bulls have done the rest. As I've been noting for more than three weeks now, when I first began expecting the relief rally that didn't come when I thought it would, such relief rallies can be sharp. They can travel higher than anyone expects them to do. But they can fail, too, and I believe this one will eventually. So, enjoy the ride, but keep sound account and trade practices. Don't carry too much bullish risk home with you overnight and consider collecting partial profits on the way up, locking them in.

Let's also pull back on the reins of the bullish excitement a bit and realize that the big-cap OEX stocks and the small-cap RUT ones, at least, are different animals. The TRAN does tend to lead the OEX, SPX, and Dow, but it's prone to momentum-type moves, too, that overrun resistance and then suddenly reverse.

Even if the OEX is restarting that old rally pattern of gaining big, consolidating 2-5 days, dipping down to touch the rising 10-sma and then springing up again, it's possible that today could start the 2-5 day consolidation pattern. Even if the OEX is going to eventually charge up toward 607-610-ish resistance, it may well pause along the way. As you're considering your what-could-go-wrong plans for your bullish trades, spend some time thinking about what would happen to your trades if the OEX were to pick a 2-5 day period either beginning today or in a day or so and consolidate sideways.

What do short-term charts show? The OEX's 15-minute chart shows potential resistance on 15-minute closes at 589.78, but that will get shoved a bit higher if the OEX zooms up this morning, and that resistance already qualifies as light resistance. Nevertheless, I'd be careful of pullback potential in that zone if it's touched, as the OEX has been adhering fairly well to the 15-minute chart's S/R levels over the last few days. Not perfectly, but fairly well. The RUT has already created a breakout mode by moving outside those Keltner boundaries, so the possibility exists that the OEX could do so, too. Just be wary of the possibility that any early climb in the OEX could be knocked back a bit, ending up with a small-bodied candle for the day, in which the close isn't all that far from the open, no matter what happened during the day. That's not a given, especially in the atmosphere of a relief rally, but it's a distinct possibility.

Jane Fox : 7/23/2008 8:54:27 AM

WASHINGTON -- House and Senate leaders have largely hammered out a compromise deal on a mammoth housing package that would permit the government to bolster Fannie Mae and Freddie Mac in an emergency, overhaul supervision of the housing-finance giants and allow the government to insure up to $300 billion in refinanced mortgages.

The deal comes after tense negotiations and is likely to remain a source of contention when the House of Representatives votes Wednesday. The nonpartisan Congressional Budget Office said Tuesday that a temporary measure to prop up Fannie Mae and Freddie Mac could cost the government as much as $25 billion. And despite repeated White House veto threats, lawmakers plan to include a $4 billion program that would allow local governments to buy and rehabilitate foreclosed properties.

It remained unclear whether the White House would follow through on veto threats, particularly because administration officials have actively lobbied in support of major provisions.

"It's a lengthy bill and we're reviewing the language," White House spokesman Tony Fratto said. "It's clear that the Democrats chose to play politics with the legislation, and unfortunate that they're doing it with legislation that will prevent systemic risk to our financial system."

Keene Little : 7/23/2008 8:10:44 AM

It's looking like we'll get at least a minor new high this morning if equity futures hold up into the open. Be careful though since the wave count will look complete at that point and we should start a pullback.

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

Market Monitor Archives