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Jeff Bailey : 8/15/2008 2:29:42 AM

Hey pivot traders! Check this out. StreetTracks Gold (GLD) Link

GLD $1 box Link

$0.40 to match futures Link

Jeff Bailey : 8/15/2008 1:22:51 AM

Anglogold Ashante (AU) $27.47 ... Traders thinking of buying a PUT option as profiled on Thursday, do NOT purchase one today.

I think there are other names in better field position.

Dec mini yg08z $-18.90, or -2.31% at $796.00.

Jeff Bailey : 8/15/2008 1:15:03 AM

SPX unconventional 25-point box chart Link

SPX from 1990 to current Link

Jeff Bailey : 8/15/2008 1:14:56 AM

BPSPX late 1998 to current Link

I know two (2) overly complacent bears that got crushed from 2004 to 2008. To this day they're the best contrarian indicators. They're the "wall of worry." Once they stop shorting/putting the upward trend, and give up, that's usually the major inflection high (give or take 3 weeks). Exhausted and account depleted, in a downward trend, they feel like they missed the move, they didn't the "the top." Then the upward trend begins, they've saved up some cash, and they'll try selling it again.

I knew/know one (1) overly complacent bull that got crushed from 2001 to 2003. Became a pessimist and sees everything half empty.

Jeff Bailey : 8/15/2008 12:22:28 AM

BPALL Link

Jeff Bailey : 8/14/2008 10:40:38 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 8/14/2008 10:33:57 PM

Closing Internals at this Link

Keene Little : 8/14/2008 10:27:39 PM

Friday's pivot table: Link

As the market headed into the final hour of trading I thought it looked like a good setup for a continuation higher on Friday. But then the bounce in the final 30-mins had me thinking we'll see a deeper pullback from Thursday's highs. So I finished the day feeling somewhat neutral as to what to expect first thing Friday morning. Once we get a little more price action on Friday I should be able to get a better sense about where the market could be headed over the next couple of days.

SPX 1274 remains the key level to the downside which essentially means a break of Thursday's low would be bearish. Until that level is taken out, with a break below 1285 a bearish heads up, I think the chances remain good for a rally into Monday/Tuesday, shown in pink on the 120-min chart: Link

OI Technical Staff : 8/14/2008 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The Market Monitor has been archived.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 : 8/14/2008 9:24:30 PM

SPX Option Montage at Thursday expire Link ... Couldn't quiet get through the 1,300 at today's close.

Ah, but there's always tomorrow.

Jeff Bailey : 8/14/2008 8:55:01 PM

Petroleo Brasileiro (PBR) $50.68 -1.76% ... Soros fund disclosed it bought $811 million stake. Position makes up 22% of the $3.68 billion worth of stocks and ADRs held by the fund.

Jeff Bailey : 8/14/2008 4:33:36 PM

YM traded DAILY S1 to the tick this morning, then ramped above DAILY R2. Good level to look for pullback usually DAILY R1, with BEST the Pivot.

Jeff Bailey : 8/14/2008 4:28:32 PM

Pivot Calculator Link

If trading EQUITY futures with the pivot levels, I STRONGLY suggest using cash session (not extended). MATCH the futures high/low/close with DIA, SPY, QQQQ, IWM etc.

Futures are used by institutions to HEDGE cash.

Jeff Bailey : 8/14/2008 3:48:13 PM

VIX.X 20.43 -5.19% ...

Jeff Bailey : 8/14/2008 3:47:53 PM

Swing trade put establish stop alert! ... for the one (1) Anglogold Ashanti AU Oct. $30 Put (AU-VF) at $31.15 in the underlying.

AU $27.643 -4.46% ... AU-VF $3.50 x $3.70

Keene Little : 8/14/2008 3:46:16 PM

Unless the market suddenly drops hard into the close today I'm leaning bullish for tomorrow. This afternoon's pullback remains corrective enough to suggest a bullish resolution.

Jeff Bailey : 8/14/2008 3:37:06 PM

Unusual NYSE Stock Moves ... FLO, PMI, SIX, IVZ, EL, SJM, WPI, TRX, FOE, ANW, DNA, OMN, CRR, DBD, CVI

Jeff Bailey : 8/14/2008 3:34:05 PM

DJ- Fed's Stern: Community Banks Have Fared Well Amid Credit Woes

See Monday's MM and Banks NH list. Last night's Market Wrap.... Or this morning's as the case may be.

Jeff Bailey : 8/14/2008 3:28:38 PM

DJ- Fed's Stern: Don't Underestimate US Econ Resilience

Linda Piazza : 8/14/2008 3:20:51 PM

I unfortunately have to leave my desk the last few minutes of the trading day today. Consolidation at the rising wedge trendline was always a possibility for the day today, but bulls would have preferred a stronger performance than we're getting right now. The possibility remains that the OEX could fall out of its rising wedge and drop toward the 30-sma now at 582.53. Remember not to count on too much more if that wedge support is broken, at least not yet, because the OEX could just be widening the wedge into a regular old rising price channel. Bears must factor in the possibility that the support won't be broken and the OEX will rise up through that channel one more time.

Jeff Bailey : 8/14/2008 3:20:10 PM

YM 11,615

Jeff Bailey : 8/14/2008 3:18:36 PM

DJ (03:04)- Georgia: 130 Russian Armored Vehicles Move Deeper Into Georgia

Linda Piazza : 8/14/2008 3:18:14 PM

You should now presume that OEX 596.16 may be resistance on 15-minute closes and should begin to factor in vulnerability to 593.90 and perhaps even 590 if that support doesn't hold. You should also begin to factor in the possibility of pin-them-to-the-numbers action taking effect. OEX at 595.88 as I type.

Keene Little : 8/14/2008 3:15:50 PM

One of the bearish things I see in the market right now is what's happening with the NYSE. Since its July low it's clearly in a bearish sideways triangle continuation pattern and it has now gone negative on the day. A breakdown from the triangle pattern would be a sell signal so again, a new low below today's would be bearish: Link

Jeff Bailey : 8/14/2008 3:14:06 PM

Bloggesphere VERY bearish on economy.

Jeff Bailey : 8/14/2008 3:13:06 PM

Now that I think about it ... Stern's comments should have brought a bid.

Jeff Bailey : 8/14/2008 3:10:05 PM

NYSE a/d 1,867:1,202

NASDAQ a/d 1,667:1,183

Jeff Bailey : 8/14/2008 3:09:28 PM

NYSE Comp 8,369.64 -0.06% ... slips red.

NASDAQ Comp 2,447.38 +0.77% ...

A/D line actually STRONGER for the NYSE.

Jeff Bailey : 8/14/2008 3:03:06 PM

NY Fed TSLF: $39.25 Bln Bids Submitted On $75 Bln Offer

DJ- The New York Federal Reserve's latest auction of Treasurys to investment banks in exchange for their broadest range of triple-A-rated collateral drew bids for barely half the $75 billion on offer Thursday. The central bank accepted all $39.25 billion of bids at an interest rate of 0.25%, in line with the minimum set prior to the auction. The ratio of bids to the offered amount - known as the bid-to-cover ratio - was just 0.52. The last similar swap of Treasury for so-called Schedule 2 collateral - which includes private residential-mortgage-backed securities and collateralized debt obligations - generated a bid-to-cover of 0.56. Then, banks requested $28.1 billion of the $50 billion Treasurys available. The Term Securities Lending Facility is one of several programs the Fed initiated to help loosen constraints in short-term funding markets. It was launched in March to ensure investment banks were able to access sufficient top-quality securities to back their borrowing. Under TSLF, primary dealers can borrow Treasurys securities for one month in exchange for securities that aren't as easily swapped. Par Submitted: $39.25 billion Par Accepted: $39.25 billion Bid To Cover: 0.52 Stop Out Rate: 0.25%

Linda Piazza : 8/14/2008 2:57:56 PM

So far, the potential OEX support at 596.20 on 15-minute closes continues to hold, but traders must factor in the possibility--not yet a probability--that support could fail and that the OEX could make a quick trip down toward 593.90-594.80. Or lower. Traders must also factor in the possibility that the OEX could pop back up toward 598.97-599.50. The OEX is 596.82 as I type.

Keene Little : 8/14/2008 2:54:37 PM

Two equal legs down from today's high is at SPX 1290.58 which lines up with the 38% retracement of today's rally. SPX is testing that level now so if SPX finds support here and heads back for new highs it will be a strong indication that we'll see SPX 1325-1330 within the next day or two. It still takes a drop below this morning's low to indicate the market topped on Monday. However a drop below SPX 1285 would be a bearish heads up.

Jeff Bailey : 8/14/2008 2:54:12 PM

Waited since 11:30 for it too.

Jeff Bailey : 8/14/2008 2:51:57 PM

NYSE a/d 1,870/1,195

Jeff Bailey : 8/14/2008 2:51:05 PM

YM really shouldn't of come back under DAILY R1 though. 11,601.

Jeff Bailey : 8/14/2008 2:49:45 PM

Not 10-seconds after profile ...

Fed's Stern: Expects only a "modest" US economic expansion.

Jeff Bailey : 8/14/2008 2:48:52 PM

Darned that Stern !

Jeff Bailey : 8/14/2008 2:48:33 PM

YM long stop alert! ... 11,590

Jeff Bailey : 8/14/2008 2:46:09 PM

YM long ... stop/target is 11,590/11,690

Jeff Bailey : 8/14/2008 2:45:11 PM

YM Long alert! here at 11,623

Linda Piazza : 8/14/2008 2:42:57 PM

Although the support looks strong just looking at it on a Keltner chart, OEX traders now should be watchful for a potential drop through support now down to 596.20 on 15-minute closes. As I noted, the support looks strong now, but the shape of the chart suggests that it could fail, so there's conflicting evidence.

Keene Little : 8/14/2008 2:33:59 PM

If we get another sideways consolidation, similar to the one we saw this morning, followed by a new daily high it would be bullish.

Linda Piazza : 8/14/2008 2:22:08 PM

The RUT's potential resistance on 30-minute closes is now 756.48. RUT at 754.33 as I type.

Jeff Bailey : 8/14/2008 2:21:39 PM

02:00 Internals found at this Link

Linda Piazza : 8/14/2008 2:04:00 PM

The OEX didn't get as low as I thought it might before rebounding, dipping only to 597.10 and not closer to 596.60, but close enough. The bounce is getting a little higher than I anticipated, too, but not much yet. I would watch for rollover potential from the current 598.38 level up to potential resistance on 15-minute closes at 599.35.

Jane Fox : 8/14/2008 2:00:24 PM

Crude made a low of $112.59 today but has recovered and is now trading at $114.40.

Keene Little : 8/14/2008 1:58:02 PM

The move down from today's high now looks like a small impulsive move. If true we should get a bounce back up to a lower high and then another leg down. It's too early to determine whether the larger pullback will lead to something more bearish (with a break of this morning's low) or just a correction of today's rally. Assuming we get the larger pullback (which could mean we've seen the high for today), the next move from there will be the telling move. A break of today's high or low will then determine whether we'll see a rally to the 1325 area or much lower instead.

Linda Piazza : 8/14/2008 1:56:42 PM

Alert: I'm covering the play list this afternoon while other staff members are away from their offices. As I'm going through the list, I noticed that FMCN hit its stop of $26.01. The trade was entered on August 10 at $25.00, and is now closed.

Linda Piazza : 8/14/2008 1:51:56 PM

I wouldn't be surprised to see the OEX find support near 596.60 or so and bounce from there, but I would watch very carefully for rollover potential near 598.30 if it did so. OEX at 597.36. Others can read charts as well as I can, and this action has produced zooms both directions, so it could be that the OEX could just break down. I see no signs of that yet, but do be watchful if the OEX just zooms through about 596.30-596.60 instead of finding support near there.

Jeff Bailey : 8/14/2008 1:51:19 PM

$HUI.X 331.49 -3.12% .... @ 01:19:00 was trading 330.59

Linda Piazza : 8/14/2008 1:47:14 PM

The RUT has continued to find on 30-minute closes at the resistance level now at 756.41. The RUT is 752.92 as I type, not so far back, but bulls don't want it to pull back much after its test of the 8/11 high.

Linda Piazza : 8/14/2008 1:45:23 PM

As the charts suggested, the OEX has dropped back to retest its 15-minute 9-ema, with that now at 598.15. With only a couple of minutes left in this 15-minute period, bulls want that support to hold and for the OEX to bounce back to test resistance near 598.96-600.02 on 15-minute closes. The OEX is 598.40 as I type. A loss of support now may mean a retest of the 596-596.65 level.

Jeff Bailey : 8/14/2008 1:19:57 PM

GSG $59.28 -2.06% ...

Jeff Bailey : 8/14/2008 1:19:34 PM

FXE $148.22 -0.85% ...

Jeff Bailey : 8/14/2008 1:18:50 PM

Swing trade put alert! ... for one (1) of the Anglogold Ashanti AU Oct. $30 Puts (AU-VF) at the offer of $3.50.

AU $27.95 -3.35% ...

Linda Piazza : 8/14/2008 1:16:39 PM

The VIX is approaching and/or testing the 6/17 low of 20.02, the 6/25 low of 20.34, the 8/06 low of 19.75 and the 8/11 low of 19.66. It's also approaching the rising trendline off the 5/19 low. The formation over the last couple of weeks, as seen on intraday charts, looks like a bit of a broadening formation, so I would give the VIX just a little leeway to break that 8/11 low before I thought that it was all over for the bears and blue skies ahead for the bulls. Broadening formations broaden, and so there's the possibility that the VIX could punch below 20.00 and then punch right back up. Be careful here whether bullish or bearish.

Linda Piazza : 8/14/2008 1:13:51 PM

The OEX's last 15-minute candle was an ugly one. Although that candle perched just above what had been presumed to be resistance, now at 599.40, the OEX has fallen back below that line now and the breakout wasn't verified. This is tentative evidence only and the OEX is trying to stabilize as I type, but if it can't quickly bounce above that 599.40 level and maintain values above it, the OEX looks vulnerable to 597.91, the 15-minute 9-ema, or else may chop sideways until that moving average approaches closer beneath it.

Keene Little : 8/14/2008 1:01:01 PM

This daily chart of NDX shows the a-b-c bounce off the July 15th low and the 162% projection at 1967. I see the potential to push a little higher to around 2000 by tomorrow or Monday but the risk has shifted to the short side now. Link

Jane Fox : 8/14/2008 1:00:46 PM

Internals are bullish. Ad volume making new daily highs, VIX new daily lows and ratio well above 0. TRIN is the only hold out at a neutral 0.93. Link

Linda Piazza : 8/14/2008 12:58:13 PM

The RUT has pushed up to again test potential resistance on 30-minute closes that it's been testing all morning, with the RUT so far finding resistance on 30-minute closes at that line. That's now at about 756.10 with each climb in the RUT pushing it higher. So, as I've mentioned before on previous days, some might be asking what it matters if the RUT is finding resistance there if it's pushing the resistance line higher? It may not matter, but typically, when it can't break cleanly above it, it's showing us something about how strong it is today as it pushes up to test the week's high, when it's finding resistance under this climbing-higher resistance line, and when it was testing this level on Monday, when it had been bouncing for days from this same line. There's a difference. It's a type of bearish divergence. In the end, it may not mean anything and the RUT may burst higher above this and go parabolic, but just be aware that there's a different. Don't use it to stay in trades that you shouldn't stay in, but do use it to prod yourself to keep your profit-protecting plan updated. The RUT is 755.70 as I type.

Keene Little : 8/14/2008 12:57:17 PM

NDX is at an important level in its bounce off the July 15th low. It's 2nd leg up (the rally from August 4th) has now achieved 162% of the 1st leg up (at 1967) so a 3-wave correction to the May-July decline can be considered complete. The short-term pattern of the rally from yesterday's low would look better with a pullback/consolidation today and then a new high tomorrow but stay aware that its bounce has now met the requirements to be considered complete (so move to profit-protection mode if long).

Linda Piazza : 8/14/2008 12:52:08 PM

The OEX closed the last 15-minute period at the Keltner resistance now at 599.50, but it's now above it, at 600.22 as I type, pushing toward the next Fib level near 601.30. Bulls want to see the OEX remain above that 599.50 level into the close of this 15-minute period. Keep updating your just-in-case profit-protecting plans.

Jane Fox : 8/14/2008 12:47:16 PM

Today it is quite obvious Crude sellers are stronger than the buyers. Link

Keene Little : 8/14/2008 12:47:07 PM

We didn't get the 2nd leg down as part of a pullback but instead price is pushing higher. This is either very bullish (little to no pullback gets everyone chasing it higher again) or else a choppy rise with loss of momentum (bearish divergences at new highs) will tell us the rally is topping. A push above SPX 1300 would suggest the more bullish scenario.

Jeff Bailey : 8/14/2008 12:39:50 PM

RUT.X's NH/NL yesterday was 35/6

5-day ratio 70.5% ; 10-day 57.4%

Linda Piazza : 8/14/2008 12:36:13 PM

Potential upside target and potential resistance on 15-minute closes for the OEX is now 598.92-599.33, with a Fib level at 598.97 and with Tuesday's consolidation zone's support mostly at about 599. OEX at 598.05 as I type.

Jeff Bailey : 8/14/2008 12:35:45 PM

USO $91.64 -2.25% ... edges back under MONTHLY S1 and MNTHLY 19.1%. (see last night's Chart of the Week)

Jeff Bailey : 8/14/2008 12:34:28 PM

RUT.X's weekly interval MACD -1.419 with signal -6.624.

Katie bar the door if MACD gets above zero (0.OO)

Jeff Bailey : 8/14/2008 12:32:27 PM

RUT.X's WKLY R2 758.10.

Keene Little : 8/14/2008 12:31:21 PM

The pullback from today's looks corrective. That leads me to believe we're going higher. The pullback needs another leg down to finish a 3-wave correction and the Fibs are lining up in the 1288-1289 area to watch for support for an entry to play the long side if you missed this morning's low (or to exit short plays if you don't want to tolerate a move up to 1320-1330 next week).

Jeff Bailey : 8/14/2008 12:30:46 PM

12:00 Internals at this Link

Linda Piazza : 8/14/2008 12:24:43 PM

The RUT's next target on its 15-minute chart has risen to $756.56. However, the RUT continues to have difficulty with potential resistance on 30-minute closes at 755.52, and it's not yet showing the strength to break above that. It's just sort of dragging that resistance line higher along with it. Usually when this happens, eventually the weight pushes prices back again. The RUT needs to break cleanly through this resistance and maintain 30-minute closes above it, or it risks tiring. (As I do every once in a while, I again apologize to English majors for the anthropomorphisms, the descriptions of the market's actions as if these indices are living, breathing, thinking entities, but doing so constitutes the most vivid way to describe them and the shorthand that sometimes is needed to get the point across.) That tiring might not be immediate. This isn't an excuse for bears to ignore stops that are being hit. Instead, it's a warning for bulls to keep updating those profit-protecting plans and not get too complacent.

Linda Piazza : 8/14/2008 12:11:07 PM

Potential next upside target as well as potential resistance on 15-minute closes is 599.47, but, again, watch for potential resistance to kick in nearer 598.97 if the OEX does approach that zone. This is another of those places at which bulls need to adjust their just-in-case profit-protecting plans.

Jeff Bailey : 8/14/2008 12:07:16 PM

FXE $148.78 -0.48% ...

Jeff Bailey : 8/14/2008 12:06:57 PM

Chatter building for ECB to cut rates.

Jeff Bailey : 8/14/2008 11:59:56 AM

USO $92.37 -1.47% ... set to test yesterday's 10:35 AM EDT tick.

Linda Piazza : 8/14/2008 11:53:54 AM

The A/D line just can't make any headway yet past that potential resistance in the chart I posted earlier. A/D line now at 783, pulling back slightly from its ongoing test of that resistance.

Linda Piazza : 8/14/2008 11:52:54 AM

The OEX's pullback off its day's high looks like the type that might be a regular old pullback to the potentially strong support on 15-minute closes near 595.23-595.76. If that support holds, then OEX still has a potential next upside target now at 599.50, with resistance likely kicking in as it approaches 599. However, I warn again that in this market, we've seen prices suddenly collapse and prices suddenly spurt higher, so expect anything. And, if you missed my previous post, I don't trust this climb yet.

Jeff Bailey : 8/14/2008 11:43:51 AM

China earthquake rebuilding to cost $147 billion ... AP Story Link

Linda Piazza : 8/14/2008 11:41:24 AM

The RUT's 15-minute chart shows a potential upside target of 755.66, and the RUT just finished yet another 30-minute period beneath potential resistance there on 30-minute closes, now at 755.09. A push up to test that higher Keltner resistance and this week's high can't be precluded, but be careful about your assumptions here and keep those stops adjusted. RVX, the RUT's volatility index, is so far weak, but while the RUT has been challenging its upside resistance, the RVX has been stabilizing. It needs to produce 15-minute closes above 24.52 before it even begins to change its tenor and before 24.78 before it even begins to change it in any kind of way beyond a tentative one. It's 24.42 as I type but so far producing tentative bullish value/RSI divergence with today's low as compared to yesterday's.

Jane Fox : 8/14/2008 11:31:18 AM

It looks like Natural Gas is trying to hammer out a bottom here though I would not be a buyer until I got more confirmation. Link

Linda Piazza : 8/14/2008 11:30:43 AM

The TRAN is still climbing. That's on the side of OEX, SPX and Dow bulls. Keep it on your radar screen, whatever your trade. TRAN at 5165.83 as I type.

Linda Piazza : 8/14/2008 11:28:09 AM

What we have happening, on the OEX at least, is a choppy rise off yesterday's low, now approaching the 50% retracement drop and also approaching the 598.97-599 zone that was support through much of Tuesday afternoon. While it's easy to feel bullish about the bounce and it keeps breaking through resistance, I've got to tell you I'm not trusting it yet, so I'm advising all bulls to keep adjusting their stops. Potential resistance on 15-minute closes at 599.68.

Linda Piazza : 8/14/2008 11:25:00 AM

I'm getting numbers transposed today, for some reason.

Linda Piazza : 8/14/2008 11:24:12 AM

For reference, the RUT's high of the week was 757.10. The RUT is currently at 754.63, testing Keltner resistance on 30-minute closes just a few cents above. This resistance line was below the RUT, providing support all through Thursday afternoon until late Tuesday, so the RUT looks a bit weaker by comparison on this climb. That can be changed in an instant, but just keep that in mind.

Linda Piazza : 8/14/2008 11:21:58 AM

The OEX produced a minor new high above yesterday's, but it's still just testing in my opinion. Watch for next potential resistance in the 599-599.69 zone if the OEX can get past this one, which it's attempting to do as I type. OEX at 598.23.

Keene Little : 8/14/2008 11:18:26 AM

One other level to keep an eye on is SPX 1295.33 which is where the bounce off yesterday's low would have two equal legs up. If this 3-wave bounce is followed by a new low below this morning's I'd turn very bearish in a hurry.

Jane Fox : 8/14/2008 11:16:05 AM

It is quite obvious the Russell 2000 will be the first market to retrace all of its selloff from the June highs. Link

Keene Little : 8/14/2008 11:12:08 AM

If SPX can now make a run up to just shy of 1297 it will create a 5-wave move up from this morning's low with equality between the 1st and 5th waves. That kind of move would be followed by a pullback to correct this morning's rally but then another rally leg would follow the pullback. I'm now watching and waiting to see if we get the move higher to confirm this bullish scenario.

Linda Piazza : 8/14/2008 11:06:48 AM

Here's the Keltner chart of the A/D line with the resistance I was referencing: Link

Linda Piazza : 8/14/2008 11:05:33 AM

I mixed up some numbers in my 11:00:33 post. They've since been corrected, but of course, the OEX has moved since then, too. So far, this test of the potential resistance on 10-minute closes now from 595.71-596.93 is setting up just as it did late yesterday afternoon, with a test and a rather strong candle pulling back from that test, so bears and bulls will want to watch to see yesterday's pattern continues to be followed or is changed . . . and it changed while I typed, with the OEX bouncing above the lower edge of that potential resistance zone while I typed and before the end of that last 10-minute period. Still, the idea is that bulls don't want to see a strong pullback now that echoes the one that happened yesterday afternoon when this same Keltner setup was tested. Instead, they want to see consolidation near the high and above that 595.71 area or just a burst through the whole resistance zone. Bears want a push down through 594 and sustained levels below that. OEX at 595.78 as I type.

Please remain aware that anything can happen.

Jeff Bailey : 8/14/2008 11:04:32 AM

Wachovia (WB) $15.73 +6.21% ...

Jeff Bailey : 8/14/2008 11:01:06 AM

BKX.X 65.61 +2.04%

Jeff Bailey : 8/14/2008 10:59:21 AM

XBD.X 148.58 +1.45% ... Link

Linda Piazza : 8/14/2008 11:00:33 AM

The OEX also tests the 38.2% retracement of its decline off Monday's high, with that at about 596.91. The 50% level is near 598.97, a place that was support for the OEX's consolidation through the middle of Tuesday, when the Keltner lines it's testing now where then located at that level, so that's the next place to look for potential resistance if the OEX can break through this level. So far, it has not done so. It's being knocked back a little now but the 10-minute period from which the resistance line now at 596.91 is derived still has several minutes to go. OEX at 595.57 as I type.

Jeff Bailey : 8/14/2008 10:58:16 AM

XLF $21.03 +2.28% ... Link

Jeff Bailey : 8/14/2008 10:56:25 AM

DJ- NY Attorney General To Make Announcement In Auction-Rate Security Probe

(see yesterday's MM)

Jane Fox : 8/14/2008 10:55:27 AM

This chart is telling me the next stop will be 1320. Link

Linda Piazza : 8/14/2008 10:54:44 AM

The A/D line is at 840, testing the potential Keltner resistance that I mentioned earlier, now at about 800. The A/D line can overrun this by a bit because it moves so fast and numbers change so quickly, but be aware that it's being tested at the same time that the OEX is rising to test the resistance on 15-minute closes at 596.86 that held it back yesterday and propped it up much of Tuesday, and while the RUT is rising to test potentially significant resistance, too. Nothing I've written here precludes the possibilities of breakouts, but this is just another of those places where rollover potential exists, whether it's realized or not.

Keene Little : 8/14/2008 10:52:13 AM

Yesterday the DOW flirted with the broken uptrend line from August 4th but couldn't hold back above it. This morning it's trying again, currently near 11577. Obviously the bulls would like to see the buying continue to propel this higher and get back on the bullish path, as shown in pink on the 60-min chart: Link

Linda Piazza : 8/14/2008 10:46:52 AM

The RUT attempts to break out above potential resistance on 15-minute closes that's now at 750.72. The 15-minute period is almost completed, and the RUT is slightly above that now, so it may end the period above that resistance. If so, Keltner charts suggest the possibility of a climb toward 754.10-754.56, where next resistance might be found. For now, ifyou're in bullish RUT trades, you might consider readjusting your stops as it approaches that resistance. The RUT can and might break out, but on a Keltner basis, it doesn't look quite as strong as it did last time when it was charging up to this same level.

Linda Piazza : 8/14/2008 10:43:27 AM

I'm beginning to fear the dreaded triangle formation on the intraday charts, with the OEX chopping around in a narrowing pattern between yesterday's high and low. I have no particular evidence that this will occur except the current positioning of Keltner resistance that stopped the OEX yesterday, resistance that had been support for much of the previous day before its support was broken and the OEX cascaded into yesterday's low. That Keltner level (595.71-596.80 on 10-minute closes) must now be treated with respect, and it's now just a bit lower than yesterday's high. Supposedly strong support is from 589.43-588.32 on 10-minute closes, and so its upper edge is slightly higher than yesterday's low. So, we see. This is just a potential scenario, but keep it in mind.

Jeff Bailey : 8/14/2008 10:41:07 AM

NASDAQ a/d 1,442:1,081

Jeff Bailey : 8/14/2008 10:40:54 AM

NYSE a/d 1,690:1,156

Jeff Bailey : 8/14/2008 10:38:38 AM

EIA: Nat Gas Inventory Link ... Build of 50 Bcf

Keene Little : 8/14/2008 10:37:57 AM

So far it looks like a good save this morning. The bulls set a bear trap and now a little short covering is getting things going to the upside. The bulls now need a rally above yesterday's afternoon's highs and hold it.

Linda Piazza : 8/14/2008 10:36:40 AM

The A/D line is still climbing, still in breakout mode above former resistance now from -55 down to -103. The A/D line is now +402 with a potential upside target of +773. What does this mean for the OEX? It means that it might climb toward 595.70-596.72 or perhaps up toward yesterday afternoon's 597.55 high. Please note the "might" because that's a mighty "might" in these market conditions. Watch for next rollover potential in that area if it does climb.

Jeff Bailey : 8/14/2008 10:30:27 AM

Most Actives ... QQQQ $47.87 +0.35%, SPY $128.64 +0.05%, INTC $23.92 -0.82%, NVDA $12.79 +4.24%, XLF $20.89 +1.60%, GE $29.25 -0.20%, RIMM $129.95 +2.36%, IWM $74.73 +0.20%, MSFT $27.61 -1.07%, GLD $80.80 -0.93% ($~808.00 spot)

Linda Piazza : 8/14/2008 10:29:01 AM

The A/D line is attempting a breakout above potential resistance at -104, with the A/D line at +132 as I type. I'd expected it to chop around a bit longer before attempting a breakout, so I'm not sure this one will be successful. As expected, the OEX has so far been having trouble with potential resistance on 30-minute closes at 593.24, but the OEX is now rising strongly to test that potential resistance with further potential resistance on 30-minute closes stretching up to 593.56 or perhaps even to the Fib level at 593.67. So, the OEX still deals with potential resistance. If it can get past this resistance zone, which isn't a given yet, the next one gathers near 594.75-596.57, and I'd watch there for rollover potential, too. Whatever you do today, particularly if you have AUG options, guard your stops and protect your profits.

Jane Fox : 8/14/2008 10:27:36 AM

Well I have to qualify that last post. The hardest part is trading through the chop and not quitting.

Jeff Bailey : 8/14/2008 10:26:17 AM

10:00 Internals at this Link

Jane Fox : 8/14/2008 10:26:16 AM

Entering a Crude trade is the easiest part, where to put your stop and how to move that stop once you move into profit is without a doubt the hardest part. You cannot move it too close yet you don?t want a profit to turn into a loss. This is very hard to do and only comes with practice, a lot of practice.

Keene Little : 8/14/2008 10:22:17 AM

So far it's looking like a retest of yesterday's lows has been successful, with the bullish divergences supporting a higher move. But any break back down to lower lows would give us the bearish wave pattern that would have me moving back over to the bears' camp sooner rather than later.

Jane Fox : 8/14/2008 10:18:39 AM

This does not mean I trade by the seat of my pants. I have some tested indicators and methods and my trading throughout the day will be versions of these strategies but always with the same indicators.

Jane Fox : 8/14/2008 10:15:32 AM

I have determined that trying to come up with a mechanical set of rules for Crude is a not possible and a lot of trading it successfully comes from knowing the market. There are times I will fade and at times (like today) I revert to breakouts.

Jane Fox : 8/14/2008 10:21:49 AM

An indicator I use for trading Crude is the Plain Jane (only I can say that) MACD with a setting of 6,16,6. I watch for divergences which will usually tells me when a move is ending.

Linda Piazza : 8/14/2008 10:08:51 AM

The OEX's 15-minute 9-ema is now 592.96 and it may be resistance on 15-minute closes. The 30-minute chart, however, presents the possibility of a climb up toward next resistance there, on 30-minute closes at 593.23. So factor in that possibility but remember that it's not yet a probability. The A/D line is already as potentially strong resistance and may roll down again. Watch for breakouts, too, of course. A/D line at -143 as I type.

Jane Fox : 8/14/2008 10:03:32 AM

I have been daytrading Crude for a few months now and have found some little idiosyncrasies about this market that seem to recur over and over. For one, this market really respects the century marks, for example $116.00, $117.00 and 9 times out of 10 will retrace here. Another is you have live through chop and if you have the account size and stomach to get through it you will always be rewarded with a move that will get you back to profitability. If you daytrade you know how hard this can be.

Keene Little : 8/14/2008 10:02:24 AM

The updated SPX daily chart shows the bear flag pattern and the pullback over the past 3 days to the bottom of the flag. Another trip back up to the top of it? The bulls need to step up to the plate here. Link

Linda Piazza : 8/14/2008 10:00:21 AM

If the OEX should bounce now, I would watch for the possibility that resistance on 15-minute closes might kick in near 592.15 or perhaps 592.75, the location of the 15-minute 9-ema. Next resistance is just above 593, with potential Keltner resistance near 593.67, so there are all kinds of potential resistance levels from 592.15-593.67.

Jane Fox : 8/14/2008 9:57:05 AM

Crude is certainly not in any rush to test its resistance at $120.00. Link

Keene Little : 8/14/2008 9:57:00 AM

SPX is about to test the uptrend line from July 15th (through the July 28th low) which is where it found support yesterday. If that uptrend line is drawn through the August 4th low it's currently near 1270. I have 1274 (just below yesterday's low) as a key level since a break lower would give us a bearish wave pattern but a break of that lower uptrend line near 1270 would be the last line of defense for the bulls.

As long as these levels hold I will continue to respect the potential for another rally leg (probably into Monday) to as high as 1330. We've had a volatile market so that kind of move would not be an extraordinary rally from here.

Linda Piazza : 8/14/2008 9:54:43 AM

Here's the OEX's drop down to test yesterday's low, but I'm watching the A/D line's chart side-by-side and it's not dropping in the same way. It is negative and in the lower or bearish half of its channels. It is vulnerable to a drop to yesterday's low, where support might be found. But mostly it's holding in a chop zone that the chart setup suggested might hold for a number of hours before it breaks either direction, so bears need to be aware of the possibility that the final direction isn't yet known and that the OEX might bounce back and forth as the A/D line does, too.

Jeff Bailey : 8/14/2008 9:54:37 AM

Swing trade call place closing order alert! ... Place a GTC order to sell the one (1) Dynamic Materials BOOM Aug. $35 Call (QCB-HG) for $0.35.

BOOM $31.50 +0.06% ... QCB-HG $0.00 x $0.05.

This was the call side of the strangle from 07/31/08.

Linda Piazza : 8/14/2008 9:45:38 AM

Keltner outlook on the A/D line: As Jane mentioned, the A/D line is negative but is climbing off its low of the day. However, it faces potential resistance from about -490 down to -561 and then, stronger, at about -282 up to -191. Until it can get above that upper resistance zone and maintain 15-minute closes above and, particularly until it can get above the nearest one and maintain values above that, it's vulnerable to lower values. I would watch for either rollover or breakout potential at the higher of the two. The chart setup suggests currently that the A/D line could just chop around for a few hours, unfortunately, because that means price could, too. These chart setups of course do not always play out the way potential suggests they could.

As I typed, the A/D line began pushing through the first resistance zone and could close this 15-minute period above it but needs to maintain those levels if it does, and then push through the second. A/D line at -382.

Jane Fox : 8/14/2008 9:39:41 AM

VIX is falling so it is on the side of the bulls

Jane Fox : 8/14/2008 9:38:53 AM

AD line made a low of -857 this morning but has recovered to -596.

Linda Piazza : 8/14/2008 9:36:03 AM

The OEX tests potential Keltner support on 15-minute closes, with that support now pushed down to 590.70. The OEX is now at 590.42. Be prepared for the possibility that the OEX could either bounce from this or make a quick trip right down to yesterday's low or even 586.19. If you're in bearish trades, know how you'll react to quickly adjust your stops and protect your profit in either instance.

Linda Piazza : 8/14/2008 9:23:14 AM

Late yesterday, I noted that although the OEX was producing a small-bodied candle at support that had held since 7/15, I wouldn't advise subscribers to invest a lot in bullish trades on the hopes for a bounce up through that channel again. For background, here's where the OEX is on a daily chart: Link

I thought a rollover was possible at any time, too. I kept mentioning late yesterday that I didn't at all like the way that the climb had been accomplished and, especially, the volatility that occurred after the late-day breakout above the descending trendline off Monday's high. That kind of action sometimes indicates the break out is a false one.

Charts show the possibility that, barring a fast move down this morning, the OEX could find support near 590.74 on 15-minute closes, which would constitute a higher low if it then bounced above yesterday's late-day high. So, bears need to be watchful for possible support to kick in there, perhaps bouncing the OEX back above potential support on 30-minute closes now near 592.35 before the end of the first 30-minute period. If that 15-minute support at 590.74 is lost on the first 15-minute close, then charts suggest that the OEX could head into a test of yesterday's 588.97 low and perhaps even into a test of the next Keltner target at 586.31. Then we see. If the OEX drops there and doesn't soon scramble back above about 592.50-593, then we may have a test of 581-583, but we don't want to count too many chickens before they hatch.

Remember the possibility then that the OEX will catch support between 590.74-592.35. If it does, resistance might be found near 596-596.50 and then at yesterday afternoon's high of 597.55. If it doesn't find that support and dives, then watch for potential next support at 586.31. Cast all of this information into the context of a presumably bearish rising wedge on the daily chart but with action that's been anything but predictable. Oh, and add in a dash of "it's opex Thursday and sometimes there's a pin-them-to-the-number effect that kicks in about midday on opex Thursday."

You can do this. You can't control what the markets do, but you can control yourself, the risks you take and the way you manage those risks. If you don't like the way you've done it this month, then start researching and find a better way. Use this experience as a learning tool that will propel you into ever-better trading in the future.

Keene Little : 8/14/2008 9:11:18 AM

The 60-min chart of gold, YG, December contract, shows the bounce to be more of a bear flag which is one reason why I'm thinking the consolidation could continue for a bit before heading lower again. Link

Keene Little : 8/14/2008 9:07:53 AM

It's interesting to see the metals taking a hit after the CPI data. With higher inflation concerns one would think the metals would have rallied on the news. The bounce off Monday's lows continues to look like a correction to the decline from the July high. This fits with the expectation I had mentioned on Tuesday when I showed the likelihood for a 4th and 5th wave down on the silver chart, YI, September contract ( Link ). The updated daily chart shows an expectation for a little more consolidation before heading lower: Link

But the shorter-term 60-min chart (all hours) shows the possibility that the bounce is finished as it has broken down from a small rising wedge pattern. It could continues to consolidate sideways for another day or two but the risk from here is for an immediate move lower. Link

Jane Fox : 8/14/2008 9:00:43 AM

Here are the overnight charts. Markets didn't like the CPI data out at 8:30ET.

I suspect the AD line to open quite bearish this morning. Link

Jane Fox : 8/14/2008 8:56:03 AM

WASHINGTON (MarketWatch) - First-time applications for state unemployment benefits fell by 10,000 in the latest week to 450,000, but the smoothed trend in new claims moved to its highest level in more than six years, the Labor Department reported Thursday.

Initial claims have been boosted in recent weeks by publicity about a new federal program of extended benefits that has encouraged more unemployed workers to file for claims under regular state programs. A spokesman for the Labor Department could not quantify how many people have been encouraged to apply.

The new program has masked the number of new layoffs, a key gauge of labor market strength as the economy continues to shed jobs.

The four-week average of new claims rose by 19,500 to 440,500, the highest since April 2002.

Keene Little : 8/14/2008 8:49:18 AM

Equity futures had worked their way higher during the overnight session but then got slammed to the downside following the 8:30 AM reports. I haven't seen the reports yet but I'm assuming the CPI numbers did not please the market. DOW futures have lost over 100 points from the overnight high (ES is down more than 12 points from its high). It looks like we could get at least a test of yesterday's lows.

Jane Fox : 8/14/2008 8:48:42 AM

WASHINGTON (MarketWatch) - U.S. consumer prices jumped a greater-than-expected 0.8% in July, marked by big increases in energy, food, clothing and cigarettes, the Labor Department reported Thursday.

The core consumer price index - which excludes volatile food and energy prices - rose 0.3% for the second straight month.

The report was much worse than expected. Economists had predicted the seasonally adjusted CPI to rise 0.5% and the core CPI to increase 0.2%, according to a survey by MarketWatch.

Consumer prices are up 5.6% in the past year, the biggest year-over-year increase since January 1991. The CPI has surged at a 10.6% annualized rate in the past three months.

The core CPI has risen 2.5% in the past year, the biggest gain since January. The core rate is rising at a 3.5% annual rate in the past three months.

The CPI rose 1.1% in June, with the core rate up 0.3%.

Linda Piazza : 8/14/2008 8:34:35 AM

This week, the TED spread dipped below the 0.98-1.00 potential support level and, unless it pops right back up, might be trending down toward the next one, near 0.92-0.94. For reference, the TED spread is one measure of default risk, of particular interest to those seeking to a read on the risk remaining to our financial system. The typical range, before last August's explosion higher, was 0.10-0.50. In general, although I do not use it as a specific market timing tool but as one might a sentiment indicator, equity bulls don't want to see it climbing. Many times this last year, if it's broken through about 0.92, it tends to drop toward 0.72-0.75, at which point bulls might be particularly careful as it tends to rebound from there, but never, so far, has it returned to its pre-August-2007 range. So, overall, we have to consider that while it's good to have it trending down if one is bullish on equities or, alternately, just concerned about the likelihood of increasing defaults, that must be taken to be occurring in a continued state of heightened risk.

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