Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Jeff Bailey : 8/11/2008 11:45:37 PM

OIL new high was Williams Coal Seam Gas Royalty Trust (WTU) $10.65 +1.23% ... as it traded $11.25 today (penny above 07/07/08 high).

Jeff Bailey : 8/11/2008 11:42:33 PM

BANK NH= CHCO, FFIN, FFKT, HBHC, HOMB, IBKC, IBOC, MSFG, NBD, NBTB, PGC, RBCAA, SCB, THFF, UMBF, WIBC.

A couple of weeks ago I noted composition of "small cap" RUT.X with financial being most heavily weighted. Not too many "banks" above I recognize as "top of mind."

Jeff Bailey : 8/11/2008 11:39:20 PM

NH/NL by Market(s) and Sector(s) Link

Jeff Bailey : 8/11/2008 11:34:29 PM

Good gravy!

Jeff Bailey : 8/11/2008 11:30:54 PM

Closing Internals at this Link

Today's 82 NH at the NYSE are most since 6/30/08's 80:477, and it would be a safe bet there aren't alot of "energy" names helping the NYSE.

NASDAQs 122 NH most since 12/26/07 134:129.

Jeff Bailey : 8/11/2008 11:17:29 PM

Dorsey/Wright Major Market Bullish % (Table) that I keep at this Link

StockCharts.com's "equivalents" (may vary due to adjustment for dividends of component stocks)

$BPNYA Link
$BPCOMPQ Link
$BPSPX Link
$BPOEX Link
$BPNDX Link
$BPINDU Link

Jeff Bailey : 8/11/2008 11:00:23 PM

BPALL ... up 2.27% and buy signals starting to build. Broadening out of demand outstripping supply! Link

Tab Gilles : 8/11/2008 10:53:15 PM

Apple (AAPL) $173.56 +$4.01 (2.37%)

Singapore Telecommunications, Southeast Asia's largest telecoms firm, will launch Apple Inc's third-generation iPhone in Singapore on Aug 22, the company said on Tuesday. SingTel also said it was in the "early stages" of looking at possible investments in the Middle East and in Central Asia.

Apple App Store- Link Link Link

I agree with Jim's comments on Apple in this past weekends Market Wrap---

"Personally I think Apple is a screaming buy....I would be a strong buyer of Apple on any pullback."

Keene Little : 8/11/2008 10:49:30 PM

Tuesday's pivot table: Link

The daily SPX chart shows a bear flag type of pattern and Monday's high tagged the top of the flag. A break below 1262, last Friday's low, would confirm a break of its uptrend line from July 15th, currently near 1270. In the meantime I see the potential for just a pullback Tuesday/Wednesday before rallying higher to the 1325 area. Link

Tab Gilles : 8/11/2008 10:27:18 PM

LDK Solar (LDK) $33.58/ AHT $39.76

LDK's second-quarter revenue was $441.7 million, well above the company's May forecast of $278 million to $288 million. Analysts were expecting $288 million, on average, according to Reuters Estimates. Quarterly earnings that blew past Wall Street estimates as a manufacturing capacity expansion allowed the company to sell more solar wafers, sending its shares up 18 percent in extended trade. Link

OI Technical Staff : 8/11/2008 9:59:59 PM

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

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

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

Jeff Bailey : 8/11/2008 7:36:41 PM

Morgan Stanley to buy back auction-rate securities ... MarketWatch Story Link

Jeff Bailey : 8/11/2008 7:35:52 PM

Wachovia records $500M more in legal reserves ... AP Story Link

Jeff Bailey : 8/11/2008 7:29:33 PM

UK Same Store Sales released ...

Jeff Bailey : 8/11/2008 6:28:57 PM

Brit Pound CurrencyShares (FXB) $191.34 -0.47% ...

Jeff Bailey : 8/11/2008 6:27:58 PM

Today's Global Econ. Calendar Link

UK's July PPI Inputs fell 0.6% M/M Link

Jeff Bailey : 8/11/2008 6:23:05 PM

I've got DXY up 14 out of last 19 sessions

StockCharts: $USD Link

Jeff Bailey : 8/11/2008 6:14:46 PM

Gasoline prices down 25 days in a row ... CNNMoney.com Story Link

Tab Gilles : 8/11/2008 5:52:57 PM

NY AG expands auction-rate securities probe

Monday August 11, 5:41 pm ET

By Stephen Bernard, AP Business Writer

NY AG investigating JPMorgan, Morgan Stanley and Wachovia sales of auction-rate securities

NEW YORK (AP) -- New York Attorney General Andrew Cuomo said Monday he is expanding his investigation into the collapse of the auction-rate securities market to include JPMorgan Chase & Co., Morgan Stanley and Wachovia Corp. Last week, Cuomo's office and the Securities and Exchange Commission reached settlements that forced Swiss bank UBS to repurchase $18.6 billion in the securities, while Citigroup agreed to buy back $7 billion of the securities. UBS will also pay a fine of $150 million, while Citigroup will pay a $100 million fine.

"This is an industrywide problem," Cuomo said in an interview. "This is not about one or two institutions. We are now working with the other players in the industry."

Cuomo sent letters to JPMorgan, Morgan Stanley and Wachovia telling them that his office is reviewing the banks' behavior in the sale of auction-rate securities. The attorney general will determine if the banks knowingly misrepresented the safety of the securities when selling them to investors.

Morgan Stanley spokesman Mark Lake said the New York-based investment bank has "been and continues to cooperate fully with the regulators and (has) been working with clients since February to provide liquidity on a case-by-case basis."

A Wachovia spokeswoman said the Charlotte, N.C.-based bank is meeting with regulators. In the bank's quarterly filing with the SEC, Wachovia said it was actively engaged in settlement discussions with various state regulators and the SEC, including the likelihood of liquidity solutions.

JPMorgan declined to comment. But the bank said Monday in its quarterly regulatory filing with the SEC it is cooperating with the investigations, and that it is also the subject of two class action lawsuits and a number of individual arbitrations and lawsuits relating to its sales of the securities.

In the filing, the bank said it "believes it has meritorious defenses to the allegations regarding its sales of auction rate securities." It estimated that as of Monday, its customers hold about $5 billion in face value of auction rate securities bought before February of this year. Retail customers, as opposed to large funds, hold $3 billion of those $5 billion in the securities, JPMorgan said.

Cuomo said meetings with banks have been ongoing for "weeks, if not months."

"We've had conversations with these banks," Cuomo said. "We think the banks are eager to resolve the matter."

The $330 billion auction-rate securities market involved investors buying and selling instruments that resembled corporate debt, except the interest rates were reset at regular auctions, some as frequently as once a week. A number of companies and retail clients invested in the securities because they could treat their holdings almost like cash.

The bond-like investments were widely held by many institutional and individual investors and were seen as highly liquid, money market-like investments. However the market for them collapsed in February amid the downturn in the broader credit markets.

Regulators have been investigating the collapse in the market to determine who was responsible for its demise. UBS and Citigroup agreed to repurchase the securities at par value as part of the settlement. Any customers who sold the securities at a loss after the market failed will also be reimbursed.

Shares of JPMorgan rose 82 cents, or 2 percent, to close at $41.89. Morgan Stanley shares rose 35 cents to $45.39. Wachovia shares rose 28 cents to $18.21.

Jeff Bailey : 8/11/2008 5:49:47 PM

Most Actives ... IWM $74.87 +2.39%, QQQQ $47.75 +0.90%, SIRI $1.46 +10.60%, C $19.82 +2.21%, SPY $130.71 +1.03%, MSFT $27.89 -0.85%, BAC $33.38 +3.50%, WM $4.74 +3.49%, Q $4.01 +5.24%, FNM $8.40 -7.18%

Jeff Bailey : 8/11/2008 5:37:15 PM

KO vs. PEP Link

or

PEP vs. KO Link

Jeff Bailey : 8/11/2008 5:18:31 PM

DXY's 04:00 tick was 76.243

Jeff Bailey : 8/11/2008 4:19:56 PM

Page 1 of 3 : Dorsey/Wright High RS Newsletter and some observations per my comments last week. Link

Keene Little : 8/11/2008 4:11:07 PM

The pattern of this afternoon's pullback, while still very early in its form, looks like a correction which adds to the probability that we'll see a choppy pullback over the next day or two in preparation for another rally up to the SPX 1325 area. I'm thinking we'll see the SPX 1285 level hold but as stated earlier, a drop below 1280 would be a heads up that we may have already peaked. Ideally we'll get a better short play setup at the end of the week.

Jeff Bailey : 8/11/2008 4:07:50 PM

EIA: US Retail Gasoline -30.5C, or -7.14%, Since Record July 7

Linda Piazza : 8/11/2008 4:06:48 PM

The OEX also looks as if it ends the day jammed against potential resistance on 30-minute closes that's now at about 604.25. This is the same resistance that kept holding all day Friday and into this morning's first three candles, too, so as far as the Keltner levels being tested (not the values), the OEX is ending the day testing the same resistance that it tested all afternoon Friday and early this morning, too.

It should be clear from today's actions that the OEX can pop right back above that resistance. Let's look at the other evidence. The OEX ended slightly below the rising wedge's resistance line, the higher version that encompassed all candle shadows. It ended the day slightly above the 50% retracement of the day's range, so it wasn't a classic reversal signal, but that's still an awfully long upper shadow it left behind after piercing that trendline and dropping back slightly below it. So, although nothing is a given in this environment, bulls need to factor in the possibility of either further consolidation or else a pullback within that rising channel.

Jeff Bailey : 8/11/2008 4:02:24 PM

IWM and QQQQ ... no longer "squared up"

Linda Piazza : 8/11/2008 4:00:23 PM

Where's that music for JAWS when you need it? Will the OEX end the day beneath one or both versions of the rising trendline that marks the upper boundary of its rising wedge? Will it leave an upper shadow that's longer than 50% of the day's range? That 50% mark would be at 603.785. OEX bulls appear to be doing their best to make sure that neither the close beneath that 50% mark or beneath one or both of the rising wedge trendlines occurs. The top version appears to cross at about 605.60 currently, and I'm not so sure the OEX is going to make it above that, but it could. It's slightly above the 50% mark as I type. Nope, at it as I type. See what I mean?

Tab Gilles : 8/11/2008 3:52:03 PM

Cheniere Energy (LNG) $4.18 +$1.28 (44.14%)

WOW! Huge move after it recent dissapointing earnings report. Link Link

Shares Short (as of 10-Jul-08): 15.46M Short Ratio (as of 10-Jul-08): 10.8 Short % of Float (as of 10-Jul-08): 34.60% Shares Short (prior month): 12.37M

Linda Piazza : 8/11/2008 3:50:29 PM

The OEX's 15-minute 9-ema is now at 603.73.

Linda Piazza : 8/11/2008 3:50:04 PM

Here's where the OEX is currently, with the thick red trendline being the lower and best-fit version of its rising wedge upper trendline and the thinner black one being the upper trendline that encompassed all intraday highs, too: Link Anything can and might happen by the end of the day, but as of now, bulls need to know that the OEX threatens to close beneath one or both and that the current form of today's daily candle is a particularly bearish one. Again, anything can and may happen, whether or not that bearish candle is produced, but you just need to know what your odds are when you make decisions.

Jeff Bailey : 8/11/2008 3:45:15 PM

WB $18.00

SSO $63.00

Linda Piazza : 8/11/2008 3:39:57 PM

The TED spread is 1.00, up only slightly from its 0.98 low.

Linda Piazza : 8/11/2008 3:38:11 PM

The OEX is currently testing and even slightly below potential support on 15-minute closes that's now at 601.45. The OEX is at 601.2 as I type. On the 30-minute chart, it's setting a potential downside target of 598.11 barring a quick bounce back above 602 and a gain from there. Do be aware, however, of the 38.2% retracement of the OEX's climb off Friday's low into today's high, with that at about 599.61. That could be potentially strong support, too.

Bulls do not want the OEX to end the day at or below about 601.45-601.50. Doing so will suggest the possibility of a stronger pullback through the bearish rising wedge or at least the possibility of more consolidation before a next direction is decided. Of course, in this environment, which I believe to be a bear-market rally, rally conditions can be brutal and anything goes.

Jeff Bailey : 8/11/2008 3:37:35 PM

VIX.X 20.57 -0.43% ...

Jeff Bailey : 8/11/2008 3:37:17 PM

SSO $62.86 +0.72% ... SUC-IJ $3.60 x $4.00

Jeff Bailey : 8/11/2008 3:36:37 PM

Wachovia (WB) $17.88 -0.27% ... edges red.

WB-UD $3.20 x $3.40

Linda Piazza : 8/11/2008 3:33:42 PM

What do you know? As of a few minutes ago, I'm out of all of the bull put portions of my September condors. Now, if we get any kind of rollover, I still have time to reenter them. With this in mind and also eyeing that potentially bearish rising wedge, I've been willing to close these out for a $0.20 debit and keep 60-67% of my original credit, with the thought that I can reenter them if we get a downturn. You might not be willing to do that, but if I get a chance to exit credit spreads 38 days before opex and keep 60-67% of the credit I took in, I'm going to take it. These were 25 contracts of SEP SPX 1080/1070's.

Tab Gilles : 8/11/2008 3:33:02 PM

Western Refining (WNR) $8.10 +$0.75 (8.02%)

Last Thursday, independent refiner Western Refining Inc. reported second-quarter profit slid nearly 95%; as it was hammered by increasing crude oil and other feedstock costs.

Bullish Diveregence targeting $10. Link

Jane Fox : 8/11/2008 3:28:04 PM

AD line did get over +1000 but didn't stay there for long. It is now +651 and falling. All in all it has been a bullish day.

Linda Piazza : 8/11/2008 3:26:40 PM

The OEX's potential target is now 601.46. That's potential support on 15-minute closes, too, and it's been rising, getting closer to the OEX's afternoon support level just above 602, so it may be that the OEX never reaches its current level but will test it at some slightly higher level. OEX bulls don't want that support lost and particularly don't want a daily close beneath that level as that would confirm that the OEX had pierced both versions of the rising wedge resistance and closed back below both.

Linda Piazza : 8/11/2008 3:24:18 PM

I wanted to show you the RUT on a daily Keltner chart, which is probably a different look than you'll have on other charts. When you look at it, you'll find that the RUT today pierced the upper black-channel line but that it's currently pulled back to that line. As should be apparent from a glance at other times when the RUT has tested either the upper or lower black channel's resistance on a daily close, it's often bounced back inside it, whether for a few days or for much longer. However, as should also be obvious from the time when it broke below it in late June and early July, not all moves are contained within the black channel. Just be aware that, although it's not a given, this can often be strong resistance that mostly caps prices for at least a few days, and make your end-of-day plans accordingly. Here's the chart: Link This is not to say that if your stops on any bearish trades are being hit today that you should just ignore those stops. I stopped myself out of a RUT-related trade today, for example, even though I "knew" the RUT was getting toppy. Better than I knew that, I knew that the market doesn't care what I "knew" or what Keltner charts or Fib brackets "suggest." You have to bite the bullet sometimes and preserve trading capital for another day.

Linda Piazza : 8/11/2008 3:11:50 PM

The OEX's 15-minute 9-ema and other potential resistance on 15-minute closes now converge near 604.70-604.90. If the OEX can't close 15-minute period above that, it maintains that potential downside target now at 601.43. The OEX is 604.70 as I type.

Keene Little : 8/11/2008 3:08:20 PM

Updating the SPX 60-min chart with today's high, I'm showing the two possibilities for this week. I think we'll see a pullback into Wednesday that may not retrace much in price and then another push higher into Friday (1325 upside target). But if it breaks much below 1280 in the next day or two then the bearish dark red wave count will look like the more likely scenario. Link

Jeff Bailey : 8/11/2008 3:02:35 PM

US Steel (X) $128.27 -6.64% ...

Jeff Bailey : 8/11/2008 3:02:10 PM

Brazil: ... June crude steel output rises 7.4% on year.

Linda Piazza : 8/11/2008 3:01:50 PM

The RUT's 15-minute 9-ema is now just under 751.25. Now that the RUT has produced a 15-minute close beneath it for the fist time today, and the first time other than a single close slightly below it Friday, that may now be resistance on 15-minute closes. We'll soon see. The RUT is 750.85 as I type.

Keene Little : 8/11/2008 2:58:51 PM

No bounce once the high was made and now the blue chips are back near the flat line. Today's candle could end up being a bearish shooting star at this rate.

Linda Piazza : 8/11/2008 2:56:44 PM

The OEX now looks even more vulnerable to next potential Keltner support on 15-minute closes, now at 601.27. Watch for the possibility, however, that it could bounce rather quickly back up to retest 603.65-604.31 and erase the target it just created. If bulls are still strong, that would be the likely action, but I think bulls need to factor in possibility vulnerability to that target.

Jeff Bailey : 8/11/2008 2:56:09 PM

For those following today's news out of region, you will note conflicting reports of what Russian officials are "saying" and what some are reporting on the ground.

Jeff Bailey : 8/11/2008 2:55:18 PM

Russia: ... Saying ... "Forces leave Georgia's Senaki."

Linda Piazza : 8/11/2008 2:53:59 PM

The RVX is now 24.30, its climb no longer looking like a flag that will break to the downside. The RVX has, however, zoomed right up to the exact Keltner configuration that turned it back last Thursday afternoon and early Friday morning, so RUT bulls hope that will happen again. Bears want the RVX to break above that resistance this time. The resistance is from 24.47-24.70.

Linda Piazza : 8/11/2008 2:51:10 PM

OEX bulls do not want to see the OEX close the day today below about 601.25-601.30. This morning, I mentioned the possibility that the OEX could sometime during the day pierce the rising wedge resistance line but then pull back to or below it by the close of the day, and that line appears to be about there in its lowest and best-fit version. The OEX is already back at and slightly below the other version that encompasses the upper candle shadows from 6/27, 7/02 and 7/23. A pullback beneath that lower and best-fit version of rising wedge's upper trendline would show that it's once again held as resistance and would set up the possibility that the OEX cold turn down within that wedge again. OEX at 603.77 as I type.

Jeff Bailey : 8/11/2008 2:51:08 PM

Russia ... No plan to attack Tbilisi at this time.

Linda Piazza : 8/11/2008 2:46:35 PM

Potential resistance for the OEX is now from 604.52-605.62 on 15-minute closes. If the OEX should break through that 603 zone and sustain levels below it, it may be setting a potential downside target of about 601.20 on the 15-minute chart, but Keltner and Fib potential support converge near 603 so it might be difficult to break. OEX at 603.20 as I type.

Linda Piazza : 8/11/2008 2:39:59 PM

A 23.6% retracement of the OEX's climb off Friday's low is at about 603.16. Potential Keltner support on 30-minute closes is first at the 30-minute 9-ema, now at 604.62, with the OEX below it now but with many minutes left in this 30-minute period, and then at 603.55. OEX bulls want to see that lower level, being tested as I type, hold on 30-minute closes. OEX at 603.24 as I type.

Jeff Bailey : 8/11/2008 2:39:22 PM

IBM $125.82 -2.33% ... gets defensive.

Jeff Bailey : 8/11/2008 2:38:58 PM

FXE $149.41 -0.60% ...

Jeff Bailey : 8/11/2008 2:36:57 PM

US Oil Fund (USO) $92.68 (unch) ...

Linda Piazza : 8/11/2008 2:27:02 PM

RVX, the RUT's volatility index, is bouncing again from its second test of the potential support on 30-minute closes that I first showed this morning. The RVX is currently 23.53 as I type.

Keene Little : 8/11/2008 2:24:08 PM

NDX tagged the upper side of its Fib target zone by tagging 1958.49 (high today is 1962.54 so far) and now this afternoon's pullback in the indices looks like a small impulsive move down. If so then we've seen the high for the day. If you'd like to try a short play wait for a small bounce to correct this afternoon's pullback and then use a new daily high for your stop.

Linda Piazza : 8/11/2008 2:24:10 PM

The RUT's current 60-minute candle isn't looking too healthy, but that can of course be changed by the end of this 60-minute period.

Jeff Bailey : 8/11/2008 2:20:04 PM

02:00 Internals found at this Link

Linda Piazza : 8/11/2008 2:19:02 PM

The OEX sort of held onto the potential support of its 15-minute 9-ema, but that wasn't a convincing hold into that 15-minute close and the OEX is now headed down toward the next potential support level, now at 605.35. OEX bulls want to see this hold as support or there's been the first, but very tentative, change in tenor. OEX at 605.83.

Jeff Bailey : 8/11/2008 2:15:37 PM

Starting to see some sign of short covering in NASDAQ.

Linda Piazza : 8/11/2008 2:05:20 PM

OEX bulls don't want to see the OEX close this just-begun 15-minute period beneath 605.18. Of the OEX remains particularly strong, it may find support at 606.38 and bounce from that.

Linda Piazza : 8/11/2008 2:03:58 PM

I've been too busy to even check the TED spread this morning, but it's currently 0.99, the lowest it's been since July 9. There is potential support near 0.92-0.94. So far, this is good news for those who want to think our financial markets are recovering, but this is still well above the traditional 0.10-0.50 range that was broken just about a year ago, near last August's opex.

Jeff Bailey : 8/11/2008 2:02:03 PM

Oh my ... bulls sitting down for some "lobster" ... Darden Restaurants (DRI) $37.71 +5.77% ...

Linda Piazza : 8/11/2008 1:58:19 PM

Is this our stop-running test? Could be, so it's important now to watch how the markets react to this test. Are prices knocked back or met with renewed selling. Just remember that you could be watching a test and not a result.

Linda Piazza : 8/11/2008 1:54:47 PM

A/D line still climbing, at least so far. It's bouncing from its 15-minute 9-ema, with that average now at 869.63, so equity bulls want to see that continue. A/D line now at 977.

Linda Piazza : 8/11/2008 1:51:49 PM

We're at a prime stop-running time of day, between about 1:35-1:55 pm ET, but I don't see much action that's much different from what we've seen today. Just be aware of the possibility that big money may soon do some testing, to see if further gains are met with selling and/or if a dip is met with buying. So far, it just appears to be action as usual for the day.

Jeff Bailey : 8/11/2008 1:50:04 PM

Best Buy (BBY) alert! $45.79 +7.03% ...

Linda Piazza : 8/11/2008 1:46:06 PM

The OEX has potentially strong support now at its breakout level on the 30-minute chart, at 606.54 on 30-minute closes. Bulls want to see that level maintained on 30-minute closes. A failure of that support would be a first and tentative change in tenor, but a real change would require first closes beneath the 30-minute 9-ema now at 604.83 and then, more significantly, closes beneath Keltner support now at 603.17. The OEX is now at 607.64, so watch that first potential support level at 606.54.

Jeff Bailey : 8/11/2008 1:44:30 PM

SPX 1,311.76 +1.19% ... probing upper-end of "Bailey Wave." This is your "modest recession" trend.

Linda Piazza : 8/11/2008 1:43:50 PM

RVX did roll over and is now back at the same potentially strong support on 30-minute closes, now at 22.86. RVX at 22.89 as I type. Remember that the earlier bounce in the RVX stalled the RUT (or occurred as the RUT stalled) but did no further damage. It could happen that way again or a stronger bounce could predict a stronger pullback in the RUT, with the emphasis on "could."

Jeff Bailey : 8/11/2008 1:41:13 PM

Dorsey/Wright's (BPSPX) ... more accurate read on supply and demand was 44.89% at Friday's close.

Quite bullish, but no more than 3/4 positions at this point.

Jeff Bailey : 8/11/2008 1:37:52 PM

StockCharts.com's ($BPSPX) Link ... still "bull alert" status at 47.00 as of Friday's close.

Keene Little : 8/11/2008 1:36:34 PM

Total volume on the NYSE is running behind the lower volume we had on Friday and the market breadth numbers are not indicating strong buying. But obviously the sellers are taking a long weekend and not interested in playing today.

Jeff Bailey : 8/11/2008 1:36:14 PM

SSO $64.21 +2.88% Link ... Set to test bearish resistance trend.

SUC-IJ now $4.40 x $4.70

Jeff Bailey : 8/11/2008 1:34:29 PM

SPX 1,311.36 +1.16% Link ...

Linda Piazza : 8/11/2008 1:33:22 PM

The TRAN is pulling back a bit more strongly than OEX, SPX and Dow bulls would like, although warning offered by the TRAN's actions this morning didn't turn out to be needed. So far, the TRAN is still maintaining support on 15-minute closes near 5256, but bulls would prefer that not be lost as support. Resistance on 15-minute closes might now be found at 5276.30. The TRAN is 5263.97 as I type.

Jeff Bailey : 8/11/2008 1:32:51 PM

S&P Retail Index (RLX.X) 411.09 +7.63% ... trades its 12/31/07 close.

Linda Piazza : 8/11/2008 1:29:26 PM

I sure thought the RUT was likely to top out around 751.40. Was I ever wrong!

Linda Piazza : 8/11/2008 1:26:23 PM

RVX is still testing the next level of resistance but so is the RUT. Perhaps someone knows something I don't, that the RVX is going to be knocked back from the resistance it's testing? These volatility indices aren't always good timing tools, anyway, but just be aware that the RVX is still testing resistance and could still break through it. At this point, the RVX would have to produce 15-minute closes beneath 23.27 and perhaps even beneath 23.12 before we could say it had been knocked back from its resistance test. It's at 23.28 as I type, dropping back to test that very level I mentioned, so perhaps someone did know something I didn't know! Smile.

Jeff Bailey : 8/11/2008 1:19:56 PM

Lowes Companies (LOW) $24.59 +7.94% ... "ditto"

Jeff Bailey : 8/11/2008 1:18:55 PM

Home Depot (HD) $28.51 +8.7% ... CNBC noting stock surging above both 150-day and 200-day SMA.

Linda Piazza : 8/11/2008 1:18:28 PM

Oh, I forgot to issue my usual recommendation when we have a strong move either direction that you take a look at your credit spreads and determine if the move allows you to close out some of your credit spreads for a pittance. I know that with this strong gain, you might not think it worthwhile to even bother with bull put spreads that are far out of the money, but some people, me included, prefer not to leave any risk on the table into opex if it's possible to remove it for a pittance.

Jeff Bailey : 8/11/2008 1:12:07 PM

Don't see the GLD options among CBOE most active all that often. GLD Aug $81 Call and Aug $81 put both among most active.

Linda Piazza : 8/11/2008 1:07:58 PM

Doji for the RUT's just-completed 30-minute candle. Bulls now don't want to see a strong decline this 30-minute period, particularly one that closes anywhere near 746-748. However, a doji can't be taken as a sign that the RUT will necessarily reverse, but only as a warning to pay attention. It signals indecision and that's all we can be certain about for right now. However, I started warning an hour and a half ago that the RVX was approaching potentially significant support, and so I've been on the lookout for a stall, at least in the RUT, if not a pullback. I think the chances for a pullback increase if the RVX zooms above about 23.56 and can maintain levels above that, an important requirement. If the RVX is knocked back soundly, however, this is probably just consolidation. The RVX is currently 23.44.

Jeff Bailey : 8/11/2008 1:07:44 PM

U.S. 3-month and 6-month Treasury auction results released.

Linda Piazza : 8/11/2008 12:59:22 PM

RVX now at 23.35. RUT bulls would prefer not to see a 15-minute close above the potential Keltner resistance now at this level and especially not a 30-minute close above 23.56. They would prefer the RVX be knocked back. However, this climb is looking like the strongest one seen since Friday afternoon. That one did nothing more than stall the RUT at its then-current levels, and so far, we've had an even less significant stall in the RUT climb. However, this morning, the RVX tested more significant support, so just keep watching and keep updating your profit-protecting plans. So far, that's been wasted effort, but some time or another, it won't be.

Keene Little : 8/11/2008 12:57:30 PM

After oil broke down from its rising wedge in July I had said we'd probably see a relatively fast move back to the beginning of the wedge. For oil that gives us a downside target of $86-98. Before that is its 200-dma at 107.58 (and climbing) which is right on top of its uptrend line from last August and January lows. For USO we get a downside target zone of about $70-80 and its uptrend line/200-dma is at 87.58, or about $4 below its current price. Daily USO chart: Link

Linda Piazza : 8/11/2008 12:54:10 PM

Although it's not a given at all, I think there's the possibility that many indices could pause near here and pull back. How much of a pullback is the question. Will it be a minor few-point one or something else? Perhaps you might draw some Fib brackets on your charts, anchoring them at Fritday's early morning low and today's high and then look at potential retracement levels, determining how much of a retracement you're willing to weather, if one should occur: a 23.6%, a 38.2% one? A 50% one. Set stops accordingly.

Linda Piazza : 8/11/2008 12:45:37 PM

Careful, RUT bulls. The RVX hit that support I noted earlier and showed on a Keltner chart in my 11:28 post and is now gaining strongly. The bounce may not hold, but RUT bulls don't want to see the RVX above 23.21 on 15-minute closes and certainly not above 23.56 on 30-minute ones. Those are places to watch for potential resisance. RVX at 23.28 as I type, well off its 22.73 low. So far, the bounce still looks bear flaggish, but RUT bulls should still be vigilant.

Jane Fox : 8/11/2008 12:45:48 PM

Question from a MM subscriber.

A trader freind is going long Oil at $112, what are your thoughts.

I never go long just because something has sold off too much because I never know what "too much" is. I think Crude is ready for a retracement but I need the charts to tell me when it has made a bottom.

I had another MM subscriber ask if it was time to go long Natural Gas last week and I told him the same thing. Hopefully he didn't go long Nat Gas or he would be hurting now.

Jeff Bailey : 8/11/2008 12:43:13 PM

Dow Industrials (INDU) ... PnF chart with 2.25% box size at this Link

Linda Piazza : 8/11/2008 12:42:12 PM

As long as the OEX is maintaining 15-minute closes above 604.35, it remains in breakout mode on its 15-minute chart. In case of a strong pullback, the 605.40 zone and then that 604.35 would be the first places to watch for potential support. Bulls want that support to hold on 15-minute closes as there's been a slight change in tenor if it doesn't. As I type, the OEX is well above that support, at 606.61.

Jane Fox : 8/11/2008 12:40:12 PM

My goodness gracious, the small caps have almost regained their June highs. Another WOW! Link

Linda Piazza : 8/11/2008 12:39:29 PM

The TRAN has now joined other indices in breakout mode on the 15-minute chart, but not on the 30-minute one. It has a potential upside target there of 5306.60, with the TRAN currently at 5288.15. Because of the way the TRAN has been behaving--following rather than leading--I'm not sure about the changes that it will actually touch its upside target. It's currently above the top of its broadening formation on its 15-minute chart, but broadening formations broaden, and so it's hard to pinpoint exact breakout points.

Jane Fox : 8/11/2008 12:39:00 PM

Tech stocks are all fired up today. Wow! Link

Linda Piazza : 8/11/2008 12:35:09 PM

VIX and VXO are still dropping, which is in bulls' favor, but the VIX is near potential support on 30-minute closes now at 19.77 (VIX at 19.87) and the VXO is so far still holding onto a rising trendline off the 8/6 low, a trendline tested many times Friday. OEX bulls would prefer that trendline be broken. It's at about 21.60 is I'm guessing correctly from my hand-drawn trendline. The VXO is currently 22.02, up from its 21.69 low reached the last 30-minute period.

Jeff Bailey : 8/11/2008 12:30:57 PM

Important observation this afternoon's market monitor.

Percentage.

What is 300 Dow points in percentage terms at recent INDU levels of trade?

What was 300 Dow points in percentage terms at Dow 8,000?

Linda Piazza : 8/11/2008 12:30:32 PM

The RVX, the RUT's volatility index, has stopped dropping to new lows as the RUT climbs to new highs, at least on the 15-minute chart. As mentioned earlier, however, the RVX would have to sustain 15-minute closes above at least the line now at 23.26 and maybe the one now at 23.44 to change its breakdown status. RVX at 23.00 as I type.

Linda Piazza : 8/11/2008 12:27:50 PM

The OEX has now finally hit its potential target on its 30-minute chart, with that target now at about 605.78 and with the OEX currently at 606.27. This resistance ultimately did not hold back the RUT and may not hold back the OEX, either, but the OEX is a different creature. The 30-minute chart shows that the OEX would have to sustain 30-minute closes beneath about 602.30 to change the tenor established since Friday morning.

Keene Little : 8/11/2008 12:24:31 PM

In percentage terms silver is down even more--now -4.6% vs. gold's -3.4%. Oil is down a tame -2% to $113.29.

Keene Little : 8/11/2008 12:22:54 PM

Gold is getting crushed again today, down $28 to $837 here. Looks like it will be heading to the $800 area faster than I thought it would.

Jane Fox : 8/11/2008 12:17:49 PM

I suspected a rather lackluster day today because the scenario for the last few weeks is the bulls will give up most or all of the gains they make. That pattern has changed today. Link

Jeff Bailey : 8/11/2008 12:17:47 PM

12:00 Internals found at this Link

Linda Piazza : 8/11/2008 12:16:23 PM

Playing catchup, the TRAN is moving to new highs along with other indices now. As I type, it's touching a rising trendline off the 10:15-ish high from Friday and the 2:45-ish high from that afternoon. This trendline has only two touchpoints so far, before this one, so may not be valid, but it's closely following the potential resistance on 15-minute closes now at 5266.30, so it may be valid. I may be describing the top trendline of a broadening formation on that chart. The TRAN is at 5280.37 as I type, just a hair above that trendline, at about 5270 is I'm estimating its location correctly.

Jane Fox : 8/11/2008 12:14:54 PM

I think SPX's next point of resistance will be around 1320. Link

Jane Fox : 8/11/2008 12:13:35 PM

Crude has now hit a low of $112.83.

Linda Piazza : 8/11/2008 12:11:24 PM

The RVX, the RUT's volatility index, is beginning to bounce, having found support now on the Keltner line shown on the chart I linked earlier today. However, the 15-minute chart suggests that we really have to see the RVX producing 15-minute closes above 23.30 and possibly 23.48 before there's really a change in tenor. RVX at 23.12 as I type.

Jeff Bailey : 8/11/2008 12:05:46 PM

INDU +52 points.

Jeff Bailey : 8/11/2008 12:05:34 PM

SPY $130.74 +1.05% ...

Jeff Bailey : 8/11/2008 12:05:18 PM

Treasuries come under pressure, yields higher. Cash freeing up here.

Keene Little : 8/11/2008 12:03:18 PM

There's no stopping the bulls yet and now the leg up from Friday morning looks like it could be completing an impulsive move. That increases the likelihood that the bounce off the July 28th low is not yet complete. It should be finishing with another minor new high, perhaps up to DOW 11800, and then pull back. But the odds have improved for a rally into Friday up to SPX 1320 as depicted in pink on the updated 60-min chart: Link

Linda Piazza : 8/11/2008 12:00:46 PM

The OEX may well tag its potential upside target on its 30-minute chart, now at 605.53, but bulls just need to keep moving up their stops in account-appropriate levels. If you've got calls that have doubled or tripled in value, some traders consider closing out half of those, thereby making it impossible to lose on the trade. It's easier to manage the other portion without as much should-I-shouldn't-I emotion attached to the trade. That's important in those cases in which there's a rare--although not so rare these days--sudden move against your position. You're not as likely to have that deer-in-the-headlights reaction that all of us are prone to when our emotions get caught up in our trades.

Jeff Bailey : 8/11/2008 11:59:41 AM

VIX.X 19.97 -3.33% ...

Jeff Bailey : 8/11/2008 11:59:22 AM

SSO $63.51 +1.76% ... SUC-IJ now $3.90 x $4.30

Jeff Bailey : 8/11/2008 11:57:58 AM

SPY $130.67 +1.00% ... gets the trade at WKLY R1.

Jeff Bailey : 8/11/2008 11:55:29 AM

S&P Retail Index (RLX.X) 398.34 +4.29% ... probes its 200-day SMA. First time sinc falling below on 07/24/07.

Linda Piazza : 8/11/2008 11:48:24 AM

The next potential (emphasis on "potential") upside target for the OEX is given on its 30-minute chart. That's currently at 605.50, and that will be maintained as a potential target as long as the OEX is producing 30-minute closes above 602.17. A close beneath that and especially beneath the 30-minute 9-ema currently at 601.24 would now be benchmarks for a first change in tenor. OEX at 604.38 as I type.

Jeff Bailey : 8/11/2008 11:47:46 AM

Should note that the now closed out NAKED IYS-TO from 08/01/08 @ $0.75 for +46.43% gain, would now be $2.30 x $2.45.

Jeff Bailey : 8/11/2008 11:46:12 AM

Petroleo Brasileiro (PBR) $50.11 -1.86% ...

Jeff Bailey : 8/11/2008 11:45:31 AM

USO $91.85 -0.91% ... undercutting its 150-day SMA.

Jeff Bailey : 8/11/2008 11:44:39 AM

DXY 75.91 +0.08% (30-minute delayed) ...

Jeff Bailey : 8/11/2008 11:43:58 AM

StreetTracks Gold (GLD) $83.62 -0.95% ... probes 05/01/08 relative low. 12/31/07 close just below.

Linda Piazza : 8/11/2008 11:41:10 AM

The OEX is now punching through its upside target on its 15-minute chart, also potential resistance on 15-minute closes, with that at 603.70 and the OEX at 604.14.

Linda Piazza : 8/11/2008 11:37:36 AM

I know I sound like the little boy crying wolf, but from my earliest post this morning, I noted the possibility that indices could punch higher at some point this morning and then pull back by the close, creating a consolidation-type day. Absolutely anything is possible in this market environment, as I said then, including a strong gain today. However, that pullback from the high would, in normal market times, be the most likely action, and some market actions (the TRAN's following rather than leading to the upside, etc.) have convinced me, at least, to remain vigilant about the possibility of a pullback into a consolidation-type day. So, I keep offering advice that so far hasn't been needed. Updating your profit-protecting plans is never a bad thing, however, so I'll keep updating.

Linda Piazza : 8/11/2008 11:34:34 AM

The RUT did close that 30-minute period above what had been potential resistance on 30-minute closes, now at 739.52. Now we'll use that and the 30-minute 9-ema as benchmarks for when there's been at least a tentative change in tenor. The 30-minute 9-ema is at 737.71. The RUT is at 743.53 as I type.

Jeff Bailey : 8/11/2008 11:31:43 AM

SSO $63.10 +1.10% ...

AAPL $174.16 +2.71% ... #9 SPX heavyweight to start the week. 1.32% of total.

Jeff Bailey : 8/11/2008 11:29:50 AM

FFIV $35.07 +5.12% ... after kiss of WKLY R1. Thought the iPhone news already factored in.

Jeff Bailey : 8/11/2008 11:28:39 AM

IPHONE SOFTWARE SALES TAKE OFF

DJ- In the month since Apple opened an online software clearinghouse, users downloaded more than 60 million iPhone programs, says CEO Steve Jobs and while most applications were free, Apple sold an average of $1 million a day for a total of about $30 million in sales over the month.

Linda Piazza : 8/11/2008 11:28:21 AM

I mentioned earlier that the RVX, the RUT's volatility index, was approaching potentially significant support. Here it is: Link This support is significant on 30-minute closes. It can of course be broken, just as the RUT can break through the topside resistance, too, but this is a reason to update profit-protecting plans for your bullish RUT trades.

Jeff Bailey : 8/11/2008 11:27:55 AM

GAS FIRMS SEEK OUTLET FOR GROWING SUPPLIES

DJ- As major oil companies search for more oil to meet growing global demand, U.S. natural-gas companies face the opposite problem, what to do with all the gas they soon will be producing.

Keene Little : 8/11/2008 11:27:30 AM

SPX is doing battle with its 50-dma this morning, currently at 1298.63. The closing price today will be important as to whether any push above it today is able to hold.

Jeff Bailey : 8/11/2008 11:27:18 AM

FORD SMALL CARS TO EXCEED INDUSTRY AVERAGE IN QUALITY

DJ- Auto maker, firing the first shot in the new small car war, promises that its compact and sub-compact vehicles - due out in 2010 - will beat the industry average when it comes to quality.

Jeff Bailey : 8/11/2008 11:26:37 AM

FED TO OFFER $25B IN 84-DAY LOAN

DJ- The Federal Reserve will offer banks $25 billion in 84-day loans in auction as part of its effort to boost ailing credit markets. The minimum bid rate for Monday's auction will be 2.04% and the minimum bid amount per bid is $5 million.

Jeff Bailey : 8/11/2008 11:25:51 AM

UN TO KEEP GEORGIA CEASEFIRE; US, RUSSIA TRADE BARBS

DJ- U.N. Security Council is set for more talks on a ceasefire call in Georgia after the United States and Russia trade barbs in a contentious exchange reminiscent of the Cold War.

Linda Piazza : 8/11/2008 11:23:33 AM

The RUT's potential resistance on 30-minute closes is now 739.40, with the RUT obviously above that as I type. Remember that this depends on the 30-minute close, however. If the RUT closes out the 30-minute period above that, it's in breakout mode on that chart, but we hardly need that to tell us that the RUT is in breakout mode, do we? What we do need to know is that, if the RUT closes this 30-minute period back below that level after piercing it, then that's going to constitute a potentially significant development that should be watched and those in bullish trades should be watching. The RUT now needs to close 15-minute periods below 734.50 to even begin to change the tenor, even on a tentative basis, and a 30-minute close below 733.50 to change it on a slightly more trustworthy basis, and none of that has happened as yet. However, the first sign that increased watchfulness needed to occur would be that 30-minute close beneath 739.40. The RUT is 741.89 as I type.

Keene Little : 8/11/2008 11:16:40 AM

While the blue chips struggle near the flat line (with the DOW the weaker one) the techs are looking a little stronger (and small caps). At a high so far of 1941 NDX is pushing up towards its target zone of 1943 to 1958.

Linda Piazza : 8/11/2008 11:16:14 AM

The OEX is currently testing potential resistance on 30-minute closes that held it back all day Friday and this morning so far, too. It's slightly above that potential resistance now at 601.83, with the 15-minute chart showing potential resistance up to 603.23. So, keep in mind that the OEX might be punching up toward the 15-minute target but still capable of pulling back below the potential resistance on the 30-minute close by that close. OEX at 602.33.

Jeff Bailey : 8/11/2008 11:12:53 AM

SUC-IJ $3.70 x $4.00

Jeff Bailey : 8/11/2008 11:12:16 AM

SSO $63.08 +1.08% ...

Jeff Bailey : 8/11/2008 11:11:52 AM

Early pivot matrix action strongly suggests SPX 1,330 this week.

Jeff Bailey : 8/11/2008 11:11:21 AM

SPX alert! 1,300.40 +0.31% .... X gets the square.

Linda Piazza : 8/11/2008 11:05:48 AM

RVX, the RUT's volatility index, is still dropping, supporting the RUT's climb. However, it's approaching potentially significant support, so bulls should be on the watch for a steadying and/or bounce in the RVX, using it again as a sign that they need to spiff up their profit-protecting plans but not as proof that the RUT was going to roll over. RVX at 23.40 as I type.

Linda Piazza : 8/11/2008 11:01:19 AM

The TRAN did avoid dropping to a new low as well as breaking through potential support on 15-minute closes now at about 5165. The story isn't over, though, as it's rising to test the potential resistance on 15-minute closes at its 15-minute 9-ema, with that average now at 5194.30. TRAN at 5189.38. OEX, SPX and Dow bulls need to factor in the possibility that the TRAN's resistance could hold and the TRAN could still be pushed back again.

Linda Piazza : 8/11/2008 10:58:30 AM

Current potential resistance for the RUT on 30-minute closes is 739.28. It held the last 30-minute period and could this 30-minute close, too. The more often it holds, the more likely the RUT will need to pull back to test next support, now near 734.30-736.20, but that's no guarantee that there will be a pullback that far, much less deeper. RUT at 738.59 as I type.

Jeff Bailey : 8/11/2008 10:56:27 AM

INDU 11,710 -0.20% ... down 24 points.

Jeff Bailey : 8/11/2008 10:55:59 AM

DIA $117.20 +0.21% ...

Jeff Bailey : 8/11/2008 10:55:24 AM

Good way to start the week!

Jeff Bailey : 8/11/2008 10:54:44 AM

VXN.X 23.86 -1.56% ...

Jeff Bailey : 8/11/2008 10:54:28 AM

VIX.X 20.48 -0.87% ...

Jeff Bailey : 8/11/2008 10:54:06 AM

Swing trade call exit alert! ... for the one (1) F5 Networks FFIV Oct. $30 Call (FLK-JF) at the bid of $5.90.

FFIV $34.49 +3.38% ...

Linda Piazza : 8/11/2008 10:50:54 AM

So far, the A/D line has been finding resistance on 15-minute closes at a Keltner line now at about 240. This is the Keltner line that is the benchmark between bullish/bearish values. The A/D line is still challenging it and may climb above it. However, both in its current value and in its current position beneath that benchmark and beneath the 15-minute 9-ema, now at 490, it's not looking particularly bullish at the moment and not supporting all this hoopla on equity prices. Equity bulls want to see the A/D line handily above that benchmark, being tested as I type and then above about 500-560. A/D line at 210.00 as I type.

Tab Gilles : 8/11/2008 10:52:14 AM

Westlake Chemical (WLK) $19.86 -$0.17 (.85%)

WLK reported August 5th, earnings in its 2Q rose more than 24% on strong revenue that was driven primarily by higher selling prices and volumes for most major products. Great earnings in the face of high oil costs.

Westlake is a manufacturer and supplier of petrochemicals, polymers and fabricated products with headquarters in Houston. The company's range of products includes ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC and PVC pipe, windows and fence.

If WLK can deliver 24% earnings on high oil prices, I believe that with crude now declining should be even more lucrative for them.

Look at this 3 year chart where it put in a double top as oil was set to climb back in early 2007 and then put in a double bottom at oil topped in the last several weeks. Link Link

Linda Piazza : 8/11/2008 10:43:48 AM

Potential support on 15-minute closes for the OEX is now 599.82. I wouldn't be terribly surprised to see that break, but I'm not promising it.

Linda Piazza : 8/11/2008 10:40:36 AM

If the TRAN drops below about 5160 on 15-minute closes, it's setting a further potential downside target of about 5127. So far, it's maintaining that support on 15-minute closes and has not yet set a new low of the day, so another test of potential rsistance now at near 5196 on 15-minute closes can't be precluded. TRAN as 5176.81 as I type.

Keene Little : 8/11/2008 10:39:13 AM

I haven't seen anything yet to change my opinion that we're going to get a pullback this morning. Just waiting for it to happen.

Linda Piazza : 8/11/2008 10:33:56 AM

The RUT's potential resistance on 30-minute closes is at 739.20 and that's held into the last 30-minute close at least. RUT currently at 738.17, so not far away.

Linda Piazza : 8/11/2008 10:32:19 AM

The TRAN did find resistance on 15-minute closes at the resistance level now at 5208 but then a little lower. The TRAN is now dropping but not yet to a new low of the day. It's at 5185.67 as I type, and I again caution OEX, SPX and Dow bears that this action is typically not predictive of strong further gains in those indices. The TRAN isn't always predictive, but I don't like to bet against it too strongly, so further declines in the TRAN should be cause to keep being careful about expectations of further bullish gains, at least.

Jeff Bailey : 8/11/2008 10:27:36 AM

10:00 Internals found at this Link

Linda Piazza : 8/11/2008 10:27:02 AM

RUT reaching its potential resistance on 30-minute closes. Nothing has held it back so far, so this isn't an excuse for bears to hold onto losing positions but rather a warning for bulls to make sure they've updated their profit-protecting plans.

Linda Piazza : 8/11/2008 10:26:00 AM

Potential upside target for the OEX is now 602.68, where there is likely potential resistance on 15-minute closes. OEX at 602.69.

Linda Piazza : 8/11/2008 10:21:44 AM

The RUT's climb is beginning to look extended on 15-minute and 30-minute charts, but that's not stopping it. The first sign that the RUT is changing its tenor in any way, a tentative sign, would be 15-minute closes beneath 732. A slightly less tentative sign would require a 30-minute close beneath that. Until then, it's just continuing the same pattern it has had since Friday morning, bouncing from the same Keltner support levels. RUT at 737.04 as I type, just cents off its high of the day. The 30-minute chart shows a potential upside target near 739-740, but I would be very carefully protecting my bullish profits from this point on because of the extended nature.

Linda Piazza : 8/11/2008 10:15:39 AM

RLX zooming.

Linda Piazza : 8/11/2008 10:10:59 AM

TRAN did bounce big--it can really move when it moves--but is now testing potentially strong resistance on 15-minute closes now at about 5205. The TRAN is 5200.83. OEX bulls need to see how it behaves with this resistance, whether it's now pushed back again toward the day's low or can zoom above it.

Linda Piazza : 8/11/2008 10:09:02 AM

To add to the mixed-up view from various indicators and indices, the VXO, the old VIX determined using OEX options, zoomed up today to test potentially strong resistance on 15-minute closes at 22.68. The VXO has pulled back a bit and is now at 22.50, but now has potential support on 15-minute closes just beneath the current level, at about 22.42. It's possible that support will bounce it into another resistance test. The VXO shouldn't be zooming up while the TRIN is zooming down. The VIX also jumped but not to the same Keltner levels. It's come back to test potential support at about 20.55 on 15-minute closes, and it's now 20.63, attempting to bounce from that support. Not sure which way it will eventually go, of course.

Jeff Bailey : 8/11/2008 10:06:23 AM

Weekly, Monthly, Quarterly Index Pivot Matrix at this Link

Linda Piazza : 8/11/2008 10:02:59 AM

The A/D line is bouncing up, perhaps to test next resistance, now at about +240. The A/D line is now at +65.

Linda Piazza : 8/11/2008 10:02:24 AM

The OEX looks as if it will finish this 15-minute period above the 15-minute 9-ema, now at 600.16, and so it may be setting a new potential upside target of 602.37. Please keep your assumptions in check, however, with the TRAN not performing well.

Linda Piazza : 8/11/2008 10:01:05 AM

TRIN is dropping over the last 15 minutes, and that and its current sub-1.00 level are in support of the bulls, at least. It's 0.88 as I type, but keep a close watch. I'm seeing some mixed-up under-the-market results.

Jane Fox : 8/11/2008 10:00:28 AM

I have added the TRIN to my the charts I use for market internals. Here is a recap of all the charts.

Top Chart - is AD line ratio, a ratio of equities advancing to equities declining. This differs from the ABSOLETE AD line that is the difference between advancing and declining equities

Second chart - is the AD volume, the ABSOLETE volume of equities advancing to equities declining (not a ratio).

Third Chart is the trusty old VIX

Bottom chart is the TRIN. Link

Linda Piazza : 8/11/2008 9:58:06 AM

I honestly don't see how the SPX, OEX, or Dow would make huge gains today or maybe even be able to hold onto current levels if the TRAN keeps acting as it is now. Obviously there are times when these indices all diverge, but in many market conditions, the SPX, OEX and Dow don't move too far in one direction if the TRAN is moving in another. The TRAN is currently 5175.57, but it would need to bounce back above and maintain values back above the 30-minute 9-ema, currently at 5196.80 (but changing rapidly) before there would be much of an improvement in tenor for it. Bears should be aware that the TRAN can move quickly and it is likely to attempt a rebound at some point, which could carry those other indices up as it attempts that rebound.

Keene Little : 8/11/2008 9:54:49 AM

The cash market is so far reflecting the overnight price action--not much happening yet.

Linda Piazza : 8/11/2008 9:52:27 AM

The RUT punched to a new high that was slightly above Friday's. Keep a watch on the RUT, as it and TRAN, two indices that sometimes seem to predict next market direction because of what they have to say about investor sentiment and economic patterns, are headed opposite directions themselves. The TRAN has fallen steeply and, at 5170.10 as I type, isn't so far off its 5168.51 low of the day.

Linda Piazza : 8/11/2008 9:50:18 AM

The OEX ended the first 15-minute period above potentially strong support on 15-minute closes that's now at 599.13, but it also ended that 15-minute period below the 15-minute 9-ema, now at 600.05. As I type, the OEX is attempting to push above that resistance but not being particularly successful at staying above it so far. Although I don't know what's going to happen next and although the support below still looks relatively firm, keep in mind the possibility that the OEX will now begin finding resistance at its 15-minute 9-ema, an average that bounced it all day Friday. The OEX is 599.94 as I type.

Linda Piazza : 8/11/2008 9:46:18 AM

The RLX is holding up well this morning.

Linda Piazza : 8/11/2008 9:45:43 AM

The RUT is headed up toward Friday's 735.09 high, with the RUT at 734.67 as I type. Two indices that tend the lead--the RUT and the TRAN--are headed opposite directions this morning. Be careful with your assumptions here.

Linda Piazza : 8/11/2008 9:44:38 AM

The TRAN is currently below its 30-minute 9-ema, with that at 5198.30 but with many minutes left in this 30-minute period, of course. OEX, SPX and Dow bulls would prefer to see the TRAN back above that 30-minute 9-ema by the close of this 30-minute period. The TRAN is 5185.18 as I type.

Linda Piazza : 8/11/2008 9:39:53 AM

Keltner outlook on the A/D Line: The A/D line's first prints are in the lower or bearish (for equities) half of the Keltner channels. It made its first prints below the potential resistance now at about -110 but it bouncing back toward it as I type. Watch for resistance there. If resistance holds into 15-minute closes and continues to hold, the A/D line risks a further decline to about -1000. A/D line currently -391. If the A/D line manages to zoom above that resistance instead, it has a next upside target of about +250, but for now, the possibility that the lower potential target will be the one that's set much be factored into your trading plans.

Jane Fox : 8/11/2008 9:39:40 AM

AD line opens at -387 so a tad bearish but mostly neutral. I consider anything between +500 and -500 as mostly neutral.

Linda Piazza : 8/11/2008 9:36:55 AM

The RUT isn't pulling back much. Until and unless it produces 15-minute closes beneath 732.15 and possibly 731.40, it hasn't really changed its tenor. It's at 732.81 as I type.

Jane Fox : 8/11/2008 9:35:07 AM

SPX made a very bold and bullish move on Friday so don't expect too much from it today. The bulls should be happy if it only consolidates today and doesn't give back everything it gained on Friday. Link

Linda Piazza : 8/11/2008 9:34:56 AM

The OEX's 30-minute 9-ema is now being pushed back and is at about 598.60. Bulls want to see that hold as support on 30-minute closes. It's joined by potentially strong support on the 15-minute close that's a bit higher, just underneath 599, so the preference would be a bounce from that support. If that happens, bulls should now begin watching for potential resistance on 15-minute closes at about 599.90.

Linda Piazza : 8/11/2008 9:31:33 AM

Here's where the OEX is with the upper rising wedge trendline now shown across all candle shadows rather than the best-fit version that cut off those shadows, shown last week: Link As can be determined, the OEX ended the week last week at potentially strong resistance on the daily chart. With the OEX at that resistance and with a strong gain on Friday, the possibility of a consolidation day must be considered. That includes the possibility that resistance could be pierced sometime during the day but that the OEX could retreat back to that trendline by the end of the day.

Given these market conditions, any possibility must be considered, of course, and if you don't believe in any kind of possibility, just look at some of the actions that have preceeded other stark gains. They've included complete reversals as well as further gains and, of course, consolidation. The formation in which the OEX has been rising off the July low is a rising wedge and those are typically considered bearish, but as I've noted several times, we saw these repeatedly broken to the upside in the middle of 2003 when they were showing up on charts, too, so that possibility can't be ruled out yet.

Futures are below fair value as I type, but not far below. The OEX had jammed underneath potentially strong resistance on 15-minute closes that was at 602.15 at Friday's close but will be a little different in value this morning. It had jammed underneath potentially strong resistance on 30-minute closes that was at about 601.50. So, if the OEX should attempt to rise despite futures being fair value, those are the levels at which resistance might kick in on 15- and 30-minute closes.

As of the close, the OEX was looking vulnerable to a pullback to the 30-minute 9-ema, with that at 599 as of the close on Friday. The 15-minute chart also shows potentially strong support on 15-minute closes just below that, at 598.94. So, bulls who want more of the same want to see those levels hold as support into the first 15-minute and 30-minute closes and for the OEX to bounce from them. If it does, I would remain cognizant of the possibility of the consolidation day (or even reversal, in this market condition) and be watchful as resistance was tested.

Keene Little : 8/11/2008 9:28:57 AM

It was a relatively quiet overnight session and it looks like we'll open near the flat line. We're set up for at least a pullback this morning and if that happens I'll be watching for the form of it to help determine whether it will be just a pullback or the start of something more bearish.

Jane Fox : 8/11/2008 9:22:57 AM

Volume in the Crude pit this morning is pathetic.

Jane Fox : 8/11/2008 9:02:09 AM

Crude made a low of $114.62 on Friday and is currently at $115.40 and looking weak.

Jane Fox : 8/11/2008 8:58:04 AM

Crude didn't make much of a move over the weekend and looks like it has further to fall. Link

Jane Fox : 8/11/2008 8:54:02 AM

Here are you overnight chart. Consolidating at pervious day highs is a very bullish sign and suggests a bullish open. Link

Market Monitor Archives