Option Investor
Printer friendly version
Jeff Bailey : 8/19/2008 10:56:29 PM

SPX NH/NL on Tuesday was 0:5

RUT.X's NH/NL was 5:18 with 5-day NH/NL ratio now in "O" at 66.8% and 10-day NH/NL ratio in "X," but having neared more "overbought" 70.00 at 66.2%.

Jeff Bailey : 8/19/2008 10:46:53 PM

Closing Internals at this Link

Note(s): Both NYSE and NASDAQ's 5-day NH/NL ratios reversed back lower.

NYSE's 5-day NH/NL ratio reversed up on 07/21/08. NASDAQ's 5-day NH/NL ratio reversed up on 7/17/08.

Keene Little : 8/19/2008 10:21:24 PM

Wednesday's pivot table: Link

SPX dropped down to potential support near 1263 where the move down from August 11th has two equal legs down and is at the bottom of a parallel down-channel created since the Aug 11 high. 60-min chart: Link

If the market is going to stay trapped in a trading range for a while this is the level that should hold. It takes a rally back above 1292 to put the bulls back in control. In the meantime I see the possibility for either a small decline Wednesday morning followed by a bigger bounce to another lower high or else a move down to the 1240 area before consolidating again.

NDX was a good setup for a short entry when it rallied up to the Fib projection at 1967 (2nd leg of its bounce achieved 162% of the 1st leg up) and stalled there last Thursday and Friday. The sharp pullback is a good indication that the top is in but right now it's trying to find support at its 100 and 200-dma's, near each other at 1906 and 1912, resp. NDX closed in the middle near 1909. Daily chart: Link

OI Technical Staff : 8/19/2008 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The Market Monitor has been archived.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 : 8/19/2008 6:47:16 PM

Still, when reading HPQ's earnings can utilize 07/30/07 to 07/31/08 to see longer-term year-over-year comparisons. Then more recent to envision futures earnings reports.

Jeff Bailey : 8/19/2008 6:45:13 PM

Major Global Indexes, Currencies, Oil, Gold with 07/30/07 closes, and today's closing benchmarks Link

I don't track yuan and HK$

Jeff Bailey : 8/19/2008 6:25:08 PM

Per HPQ's earnings ...

On 07/30/07 the $NIKK finished 17,289 ; $HSI finished 22,739 and $SSEC finished 4,440.

$FTSE finished 6,206; $DAX 7,456; $CAC 5,646.

Jeff Bailey : 8/19/2008 6:01:27 PM

Hewlett Packard's (HPQ) ... Earnings Press Release Link

Jeff Bailey : 8/19/2008 6:01:24 PM

Goldman Sachs cuts view on 5 major US investment banks ... Reuters Story Link

Jeff Bailey : 8/19/2008 6:01:19 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 8/19/2008 6:01:12 PM

With all that's going on in Russia, note the 5-day and 20-dayNet%. This is a very "sour" crude oil.

Jeff Bailey : 8/19/2008 4:54:00 PM

Today's Various Energy Futures Link

FXE $148.15 +0.59%, FXY $90.85 +0.23% and FXB $187.18.

DXY's 04:00 tick 76.41

Jeff Bailey : 8/19/2008 4:48:35 PM

June 20, 2008 Energy Futures posted in MM Link

Notes from MM that day also had FXE $156.59 +0.81%, FXY $93.05 +0.69%, FXB $198.25 +0.25%.

Closing Internals that day (Triple Witch) Link

Market Watch that day Link

Jeff Bailey : 8/19/2008 4:33:10 PM

The ONLY way(s) to bring down oil prices ....

1) Drill and find GREATER SUPPLY than DEMAND.

2) FIND/develop ALTERNATIVE energy to oil to help ABATE its DEMAND.

HIGHER OIL prices have already helped change some CONSUMER habits (elasticity of demand).

Jeff Bailey : 8/19/2008 4:25:04 PM

Continuous WTI ($WTIC) $1 and $2 box (above $100) for time referance. Link

Continuous Unleaded ($GASO) $0.05 box Link

Even here we can see the REFINERS passed along some of oil's rise.

But not ALL of it $GASO:$WTIC Link

This fall, make sure and VOTE! And understand just how your elected officials plan on "solving" the energy delemna.

Jeff Bailey : 8/19/2008 4:11:03 PM

Hewlett Packard (HPQ) $43.69 -2.04% ... gets a "pop" to $44.20 on headline numbers.

Jeff Bailey : 8/19/2008 4:10:14 PM

Merrill Lynch (MER) $23.82 -3.71% ...

Jeff Bailey : 8/19/2008 4:07:35 PM

Home Depot (HD) $25.96 -3.70% ... closes back below correlative 150-day and 200-day SMA's ($26.92).

Earnings Press Release (this morning) Link

Jane Fox : 8/19/2008 4:07:00 PM

September 19th is Last Day to Trade Russell 2000 Contracts on the CME.

On September 19, 2008, CME Group's contractual listing rights to the Russell 2000 index contracts end, and these products no longer will be available at CME Group.

Jeff Bailey : 8/19/2008 4:01:13 PM

I should note now, as I'll be posting the 2 month "China Price Hike" anniversary comparison, that September Brent Crude terminated Thursday.

September Russian Export Blend terminated last Tuesday.

Jeff Bailey : 8/19/2008 3:55:57 PM

The DEMAND for oil on a global basis, has been GREATER than the demand/supply relationship for refined products here in the U.S. (as it relates to U.S. refiners).

Certainly the dollar's weakness a contributor to oil's rise too.

Jeff Bailey : 8/19/2008 3:53:23 PM

Barry! Per your question yesterday ... Look at the YrNet% of cl and rb, as well as ho.

The PRIMARY reason refiners haven't been able to pass along ALL of the gain in oil is simple.

Supply and demand.

Jeff Bailey : 8/19/2008 3:49:28 PM

My "crack spread" table with VLO closing session benchmarks at this Link

With September Crude Oil terminating tomorrow, we would FOCUS on October crack.

In my opinion, VLO may be $1.41 "undervalued" relative to its more recent "crack spread" measure of 24.224.

It may be for a good reason (crack ready to head lower still).

Truly a "coin toss" here. RISKING $1.31 to profiled stop. IF undervalued to $34.72, the near-term reward ASSUMING NO CHANGE IN CRACK SPREAD about $1.41.

FROM VLO $33.31

Keene Little : 8/19/2008 3:46:18 PM

The small bounces that we're getting in the final hour continue to look corrective and that says we haven't put in a finish for the leg down from last Friday yet. The stair-stepping lower looks like it will continue but I don't think there's much more downside (famous last words) before we get a larger correction of the decline from Friday.

Linda Piazza : 8/19/2008 3:44:06 PM

No progress at all toward bouncing after the OEX settled again near the morning's low. The OEX remains vulnerable to a target and potential support that has now dropped down toward 579.75, and may eventually drop lower, toward 575. For now, however, the next action, either for this afternoon, or for tomorrow morning, for that matter, is somewhat harder than usual to predict. A climb up to 592-593.25 over the next day or so appears about as likely as a drop to 575-579. The OEX is perching right on the 30-sma, and I've been noting for the last week that this average could stall any declines, so I'm not surprised to see the OEX stalled near it on a daily close, if that's what happens, but the charts just don't give a clear setup for what happens next. Makes your decisions about holding overnight with that in mind.

Jeff Bailey : 8/19/2008 3:40:21 PM

At today's settlement, my October Unleaded/Crude crack spread finished 24.226.

rb08v $2.7749 and cl08v $114.54

Jeff Bailey : 8/19/2008 3:32:47 PM

My QCharts' rb08v /cl08v "relative strength," or crack spread chart Link

The ONLY thing I see as bullish here is 21-day SMA juuuuust trying to cross above 50-day SMA. It has been quite some time since we've seen that.

EIA oil and gasoline inventory tomorrow.

Jeff Bailey : 8/19/2008 3:21:57 PM

Valero Energy (VLO) update $33.46 +2.54% ... refiner bounces back today after three (3) days of October "crack spread" deterioration.

Session low came close to my 1/3 position BULLISH stop of $33.00 this morning.

Will follow with daily interval bar chart of rb08v /cl08v.

Linda Piazza : 8/19/2008 3:14:31 PM

What's scheduled tonight that could impact foreign bourses, currencies and futures? At 7:50 tonight, Japan's All Industries Activity Index will be released. At 2:00 am ET, the Bank of Japan's Monthly report will be. A number of releases will occur in the U.K. near 4:30 this morning, with one of them being the MPC (Bank of England's Money Policy Committee) Minutes at that time. At 6:00 am ET, The U.K.'s CBI Industrial Trends Orders, giving insight into manufacturing, will be released. Those trading currencies, particularly anything against the JPY or GPB, might note these release times.

Jeff Bailey : 8/19/2008 3:09:40 PM

Most Actives ... SPY $126.87 -1.18%, QQQQ $46.99 -1.28%, XLF $19.92 -0.62%, FRE $4.11 -6.37%, FNM $5.86 -4.71%, IWM $72.56 -2.11% (now playing catch down), INTC $23.62 -1.62%, C $17.15 -2.72%, AIG $20.57 -4.76%, UYG $19.02 -6.07%

Keene Little : 8/19/2008 3:06:58 PM

The bounce up off SPX 1264 was the time to try a long play but now with it turning back down again I'd be out of the play.

Tab Gilles : 8/19/2008 3:04:24 PM

Cheasapeake Energy (CHK) $46.54 +$1.62 (3.61%); intraday high $47.29; 200-ma $47.39

Daily Chart *Bullish Divergence Link

Selling in the energy sector I believe has been overdone and aas I posted earlier today...watching $110 on the $WTIC. I also see OPEC drawing the line at $100 and will defend that price with possible production cuts (*they meet towards the end of Sept.).

I'd posted this last week....

Tab Gilles : 8/12/2008 5:42:56 PM

At the moment...as I mentioned earlier today, I believe that oil may see a reversal here. I'm leaning more towards natural gas and I really like Cheaspeake Energy (CHK). Whoever gets elected will be pro-enviromental and natural gas in my opinion is the place to be in the energy sector, longterm.

Several January out-of-the-money call options look attractive to me here....

Jan '09 $50 CHK-AJ; $55 CHK-AK; $60 CHK-AL; $65 CHK-AM

Linda Piazza : 8/19/2008 3:01:41 PM

The OEX's potential support on 15-minute closes is now 582.88, and it's holding so far, so the OEX could be just widening its action into another bear flag like that we saw from the 8/13 low into the 8/15 high. Of course, something more bullish could get started, too, but for now, I think that all should be wary of rollover potential. Specifically, there's still vulnerability down to near 580 until and unless the OEX can produce 30-minute closes above about 587.40. Consistent 30-minute closes above it.

Where might the OEX go then if it does rise into a bear flag? When a climb is suspected to be a bear flag one, that's more difficult to predict, but 592-593 is one possibility for particularly strong resistance.

By the way, it should be noted that, although the week is very young yet, the OEX is so far producing a classic evening star pattern on the weekly chart. The OEX opened the week where it needed to open (below the body of last week's candle) and it's headed down since, having so far retraced more than half the range of the week before last. So, the bulls have some work to do in order to keep that reversal signal from being confirmed. Keep this in mind as you think about your trades. Keep in mind the violent thrashing up and down as you consider whether you want to trade at all and how much you want to put at risk. This is one of those times when the people who trade with less finesse and just hold on, hoping and hoping for a reversal, sometimes benefit more than those who set sound stops and therefore get whipped out of one position after another, and those are scary times when that starts happening.

Jeff Bailey : 8/19/2008 2:59:56 PM

On page 76 of this year's StockTrader's Almanac, interesting statistics on Triple Witching week and week after.

Jeff Bailey : 8/19/2008 2:56:32 PM

SPY $126.79 -1.60% ... here too we could "benchmark" the last three (3) OPTION expirations with 6/20 Triple Witch certainly in play on 08/11. I've marked recent "Max Pain" theory tabulation. Link

Keene Little : 8/19/2008 2:49:54 PM

SPX 10-min chart showing bullish divergence at this morning's low and now more at this afternoon's low (if it holds). Still looks good for another rally leg up into tomorrow.

Jeff Bailey : 8/19/2008 2:37:48 PM

Note: On your cl08u the 04/22/08 settlement of $115.85. Then note today's high so far.

Jeff Bailey : 8/19/2008 2:36:20 PM

CL08U's 21-day SMA at $119.91. 21-days EXACTLY since August contract terminated for trade until Sep terminates for trade.

Linda Piazza : 8/19/2008 2:34:30 PM

OEX potential support on 15-minute closes has fallen to 582.99. Remember the possibility that the OEX might be just forming up into a broader bear-flag formation and so might find support at any time, but if 582.99 is broken on 15-minute closes and values sustained below that, then factor in vulnerability to 580.

Jeff Bailey : 8/19/2008 2:31:43 PM

Nymex Sep Crude had about 65M barrels OI Link ... note volume today though (approximate).

Keene Little : 8/19/2008 2:30:58 PM

We've got a test of this morning's low in progress. Two equal legs down in this afternoon's pullback is at SPX 1264.15. That's a deep pullback correction and I certainly wouldn't want it going deeper than that if you're trying a long play. Remember, with the breakdown it's now the start of a downtrend so I consider long plays countertrend now.

Linda Piazza : 8/19/2008 2:24:57 PM

As suggested in my 1:55 post, there was a chance of the OEX rolling over at any time. If the OEX is just broadening the formation in which it's climbing, however, and will eventually climb toward 586.50-588, even in a bear flag, then it's possible that we'll see support catch hold soon again, too. The closest support shown by the 15-minute chart is 583.02-583.38, but if the OEX reaches that level, I'd definitely watch for the possibility that support might kick in again.

If it doesn't, and if 583.02 is lost on 15-minute closes and values sustained below it, we have to start considering vulnerability to 580.

Jeff Bailey : 8/19/2008 2:20:12 PM

DUG $37.50 -4.70% ... WKLY Pivot at $37.97

Jeff Bailey : 8/19/2008 2:18:34 PM

Euro still the MOST HEAVILY weighted currency in the DXY

Jeff Bailey : 8/19/2008 2:17:44 PM

FXE $147.87 +0.40% ... WKLY Pivot at $148.06.

Jeff Bailey : 8/19/2008 2:16:07 PM

Still baffles me why more "oil swing traders" don't trade USO options. Can LIMIT risk and still get levelerage.

Jeff Bailey : 8/19/2008 2:11:09 PM

ESPECIALLY in this geopolitical environment.

RISK management.

Jane Fox : 8/19/2008 2:10:15 PM

Tks Jeff.

Jeff Bailey : 8/19/2008 2:10:15 PM

I don't trade expiring month closer than 5-days to termination.

Jeff Bailey : 8/19/2008 2:08:55 PM

Whew! Great explanation Jane on why you got the message.

Jeff Bailey : 8/19/2008 2:07:06 PM

DXY 76.86 -0.26% (30-minute delayed) ... pullback low has been, been ... 76.724. Call it WKLY Pivot.

If trading Nymex Crude Oil futures ... make some notes.

Jeff Bailey : 8/19/2008 2:00:57 PM

USO $92.23 +1.06% .... back at WKLY Pivot.

Jane Fox : 8/19/2008 2:00:32 PM

3 Business days before Aug 20th is August 15th, Friday.

Jane Fox : 8/19/2008 1:59:14 PM

Oh I should not get into this but but here I go... If you please look at @CL which is the Crude Oil continuous contract you will see it is now Oct and today is AUG 19th so like I said before the NYMEX web site does not tell the whole story. And if you were daytrading this contract Monday was the day you needed to switch to Oct or you would get the message I showed earlier and your positions would be closed without you knowing it. Been there done that.

Here is the message you would have gotten on Monday

Roll or Offset at least ( 3 ) Trade Day prior to (LTD) (9/20/2008) to avoid liquidation.

Jeff Bailey : 8/19/2008 1:57:35 PM

BIX.X 172.15 -3.03% ... MNTHLY Pivot (171.73) holding for now.

Jeff Bailey : 8/19/2008 1:56:08 PM

XLF did juuuust undercut the 07/29/08 pullback low ($19.75) by 2 cents.

Linda Piazza : 8/19/2008 1:55:52 PM

The OEX has been moving into the bottom of a potential resistance zone with a lower edge at about 586.20 and an upper boundary at about 588.20 or perhaps as high as 588.81. Those who did try scalping this bounce long (something I hadn't advised) now need to have their profit-protecting plans in place as the OEX could roll over any time. Those who had bearish trades just need to heed the what-if profit-protecting plans they put in place earlier today when they had plenty of time to think. That was when you were doing your most sane thinking, not now when prices are moving against you. If you get stopped and collect a profit but you find out by the end of the day today that the profit could have been bigger, just congratulate yourself on your sound account- and trade-management practices.

Jeff Bailey : 8/19/2008 1:54:55 PM

XLF $20.06 -2.33% ... after probe of WKLY S1

Jeff Bailey : 8/19/2008 1:53:40 PM

Swing trade put exit alert! ... for the one (1) Wachovia Bank WB Sep $20 Put (WB-UD) at the bid of $5.60.

WB $14.58 -2.54% ...

Jeff Bailey : 8/19/2008 1:52:10 PM

VIX.X alert! 21.35

Jeff Bailey : 8/19/2008 1:50:03 PM

NYMEX Crude Oil Futures Termination Schedule: Link

Jeff Bailey : 8/19/2008 1:48:44 PM

MM content entry back up.

Jane Fox : 8/19/2008 1:13:58 PM

Unfortunately though the internals are not siding with the bulls just yet. Link

Jane Fox : 8/19/2008 1:12:44 PM

Macd is telling us the bottom is in. Every market has a bullish divergence. Now we just need the internals to agree. Link

Linda Piazza : 8/19/2008 1:15:59 PM

While we're talking about expiration-related issues, those who trade the VIX options (I don't) need to understand that their expiration is different than that of the other options to which you're used to trading. I've heard some stories about people getting surprised when trading VIX options. These options expire the "Wednesday that is 30 days prior to the third Friday of the calendar month immediately following the expiring month." For example, while your OEX SEP options expire in 31 days, my broker's page tells me that the VIX SEP options expire in 28. Here's the CBOE page that explains it all: Link

Jane Fox : 8/19/2008 1:04:00 PM

What you don't want to do is daytrade an incorrect contract so make sure you know when the expiration takes. BTW the instructions on the NYMEX website do not tell the full story.

Jane Fox : 8/19/2008 1:02:12 PM

Jeff - I don't want to get into Crude Oil futures expiration issues, there are just too many of them. What I was saying is that if you do not understand how they work and you have a position closed before it has a chance to play out you can, and mostly likely will, be hurt.

Jeff Bailey : 8/19/2008 1:00:00 PM

You think getting a notice from your futures account about a deliverable position is bad?

Wait until you get one asking when your coming by with the tanker truck to pick it up!

Linda Piazza : 8/19/2008 12:56:52 PM

The OEX may be pushing up toward 587-588.30, the next potentially strong resistance on 15- and 30-minute charts, but remember that there's also potential resistance near 585.90-586.15. I've been warning that it might be time soon for the OEX to rise up and test that higher resistance, but thought there was too much risk of it falling toward 580.50 to think it was a good risk/reward bet to trade it long except for adept scalpers who don't need my advice anyway. If you're in bearish OEX positions, you've had lots of time and lots of warnings to prepare your what-if plans, so you just have to heed those plans. The OEX could go up and hit your lowered stop and take you out for a profit that looks nice until it turns around again and goes to a new low that would have looked nicer . . . or it could just catch fire and zoom higher. In this environment, we just don't know which could happen.

Jeff Bailey : 8/19/2008 12:56:06 PM

Reminder(s) ... Nymex Sep Nat Gas futures terminate 08/27

Nymex Sep Heating Oil and Unleaded terminate 08/29.

Jeff Bailey : 8/19/2008 12:51:52 PM

Just another valuable service of the MM.

Jeff Bailey : 8/19/2008 12:50:57 PM

Jane! (12:35:23) ... Yes. But then 12:36:51 is my reminder to subscribers, or those that forget about expiration dates! (wink).

Jeff Bailey : 8/19/2008 12:48:46 PM

12:00 Internals found at this Link

Jane Fox : 8/19/2008 12:44:43 PM

... and when you get that message all your open positions are closed. Not nice!!!

Jane Fox : 8/19/2008 12:36:51 PM

I got this message on Friday.

Your TradeStation Futures account is possibly showing a deliverable position in following contract:


Jeff Bailey : 8/19/2008 12:35:33 PM

I should also note that today is the 2-month anniversary of China raising various refined energy prices at INDUSTRIAL level.

Jane Fox : 8/19/2008 12:35:23 PM

Actually Jeff if you trade Crude you switched to October on Monday although the Oct volume only exceeded Sept's today.

Keene Little : 8/19/2008 12:35:19 PM

The choppy decline since about 10:30 AM have me thinking it may have put in a bottom for the day. I'll have to see how the bounce develops (if it develops) but right now I like the small ending pattern, the downside target it achieved and the sharp little spike up off the bottom. Long against this morning's low should be a good play if you can get it on a pullback. I'm hoping we'll see a bounce back up to about 1280-ish to set up another shorting opportunity.

Jeff Bailey : 8/19/2008 12:32:38 PM

Current # NL at the big board equal to 08/01/04 and 08/04/08.

Jeff Bailey : 8/19/2008 12:28:53 PM

My plan with WB is to do EXACTLY, or near EXACT as we did with other banks.

Keep putting until we get one crammed down (or up as the case was with BAC-TS) our throats.

Will LEG OUT of the deeper in-the-money today though.

Jeff Bailey : 8/19/2008 12:22:36 PM

Please remember that Nymex September Crude Oil futures are final settle tomorrow.

Jeff Bailey : 8/19/2008 12:21:15 PM

Now we'll see if USO can close $94.61.

Linda Piazza : 8/19/2008 12:21:02 PM

No bounce yet, either, on the OEX. The potential downside target on the 30-minute chart is now 580.35, but I still advise bears to keep updating their just-in-case profit-protecting plans. The 15-minute 9-ema is now 584.32; the 30-minute version, 585.92 with further potentially strong resistance now from 587.63-588.40 on 30-minute closes. I wouldn't be surprised to see a pop up toward 587.63-588.40 but I would certainly watch for rollover potential if that was hit, and I don't think that now would be a good time to go long calls hoping to catch that ride up to 587.63-588.40. There's just still too much potential that the OEX will drop toward 580.35 instead.

Jeff Bailey : 8/19/2008 12:20:06 PM

USO $93.46 +2.41% ... QS1 held buyers.

Jeff Bailey : 8/19/2008 12:19:13 PM

VIX.X 22.04 +5.05% ...

Jeff Bailey : 8/19/2008 12:18:54 PM

Swing trade BEARISH call exit alert! ... for the one (1) ProShares UltraShort Oil & Gas DUG Sep $42 Call (DUG-IP) at the bid of $1.20.

DUG $37.10 -5.71% ...

Jeff Bailey : 8/19/2008 12:16:27 PM

VIX.X 22.10 +5.33% ...

Jeff Bailey : 8/19/2008 12:16:04 PM

Swing trade put alert! ... for one (1) of the Wachovia Bank WB Sep $15.00 Puts (WB-UC) at the offer of $2.20.

WB $14.10 -5.74% ...

Jeff Bailey : 8/19/2008 12:14:56 PM

Still can ...

Jeff Bailey : 8/19/2008 12:14:28 PM

Yep should have.

Jeff Bailey : 8/19/2008 12:13:13 PM

Merrill Lynch (MER) $23.63 -4.48% ... a close here would be a new 52-week closing low.

Jeff Bailey : 8/19/2008 12:09:25 PM

Asian Markets Link ... were mostly lower with the $NIKK -2.28% and $HSI -2.13%. $SSEC +1.06% may have been short covering. -4.17% from Wednesday's close.

Have seen NO bullish response to stronger dollar.

Jeff Bailey : 8/19/2008 11:53:51 AM

BIX.X 170.23 -4.11% ... BELOW its WKLY S1, so thinking WB could have further to go.

Jeff Bailey : 8/19/2008 11:53:17 AM

WB's WKLY Pivot levels are ... $12.20, $13.89, Piv= $16.43, $18.12, $20.66.

Jeff Bailey : 8/19/2008 11:46:28 AM

VIX.X 21.96 +4.67% ...

Jeff Bailey : 8/19/2008 11:46:14 AM

SSO $59.88 -2.33% ... SUC-IJ $1.75 x $1.95

Jeff Bailey : 8/19/2008 11:45:16 AM

Swing trade COVERED Put buy back alert! ... Let's buy back the Wachovia Bank WB Sep $12.50 Put (WB-UR) at the offer of $0.95.

WB $14.50 -3.07% ...

Linda Piazza : 8/19/2008 11:43:44 AM

I thought I'd show you the potential support that I'm watching on the OEX's 15-minute chart, at the lower channel line: Link

Keene Little : 8/19/2008 11:42:11 AM

On Friday GLD bounced off its uptrend line from July 2005 and it looks like it might have found a bottom that will hold for a few weeks. It's even possible the correction from the March high has finished (big 3-wave pullback). It's way too early to tell which scenario will play out for gold (bullish or bearish), as depicted on the daily chart, but for now it looks like a good setup for a bounce at least back up to the $86 area: Link

Jeff Bailey : 8/19/2008 11:38:56 AM

The potential key dates on my calendar would be long put for next week, with a cover at 08/29/08 close of the DNC.

Then long for the RNC into 09/05/08 close.

Jeff Bailey : 8/19/2008 11:35:55 AM

Dorsey/Wright Major Market Bull % (Table) ... The only major market bullish % currently in a column of O is the OEX. BPALL, BPOTC and BPNDX rose to highs on Friday. BPNYSE and BPSPX yesterday.

Linda Piazza : 8/19/2008 11:30:02 AM

The OEX's 15-minute 9-ema is now at 585.67; the 30-minute version, 587.49 with potentially strong resistance on 30-minute closes up to 587.49-588.62. Both versions of the 9-ema are potential resistance, with the 587.49-588.62 level currently looking quite strong. The 15-minute version has been enough to turn prices back so far as the OEX began its steep decline yesterday, but at some time or another, higher resistance is going to need to be tested.

Keene Little : 8/19/2008 11:21:38 AM

SPX looks like it could consolidate a bit before one more new low to finish the leg down from Friday. The 1262 target still looks good for potential support if it does drop lower again. That could set up a rally back up to the 1280-1285 area by Wednesday/Thursday.

Jeff Bailey : 8/19/2008 11:14:34 AM

I'm seeing more of a "follow me lower" than a "come together" trade between the SPX and the RUT.X.

I am/was really looking for the SPX.X to "dig in" or inch higher on RUT.X profit taking.

Linda Piazza : 8/19/2008 11:12:09 AM

For the OEX, potential support on 15-minute closes is now 583.92; potential resistance, 586.05 and then 589.33. The 30-minute chart suggests that the OEX could drop to about 580.50. Normally, we'd expect to see a bounce somewhere along now and it may still happen. However, since yesterday morning, the OEX hasn't been truly bouncing before the next drop, so it's not offering bulls an exit nor bears any new entries. Instead, it's been consolidating sideways before falling again, and that could happen this time, too, dropping the OEX toward that 580.50 target on its 30-minute chart. However, the OEX is beginning to look overdue for a bounce to relieve the short-term oversold status on 15-minute charts, and it's at a place that we've long known could be at least temporary support on the daily chart, so just be careful to keep adjusting your stops if in bearish positions.

Jeff Bailey : 8/19/2008 11:08:49 AM

Sohu.com (SOHU) $76.00 +1.17% ... did too.

Jeff Bailey : 8/19/2008 11:08:45 AM

Taser Intl. (TASR) $6.43 +8.23% ... did trigger an "upside" alert I had set for today. A little "crowd control" at the DNC?

Jeff Bailey : 8/19/2008 11:06:33 AM

Bottom line is that while the "no naked short rule" expired Friday, the downside alerts for that list of stocks at a minimum gives observation of weakness among the financials.

Jeff Bailey : 8/19/2008 11:04:27 AM

FRE $4.13 -5.92% ... getting close.

Jeff Bailey : 8/19/2008 11:03:54 AM

FNM $5.94 -3.41% ... only one at this point to have violated its 100%. Did so yesterday.

Jeff Bailey : 8/19/2008 11:02:49 AM

Was "swamped" with downside alerts for the various no naked short sale rule stocks.

Jeff Bailey : 8/19/2008 10:57:31 AM

10:00 Internals found at this Link

Note: It would take a closing session measure of <=26.00% for the NYSE 5-day NH/NL ratio to reverse back lower.

Tab Gilles : 8/19/2008 10:52:54 AM

$WTIC/ USO/ $USD/ EURO Last week I posted the following: Tab Gilles : 8/12/2008 10:58:31 AM

USO/Euro/Dollar A few weeks ago I posted this chart of the dollar and the USO. Link

The Dollar ($USD) is currently testing the upper end of the channel around 76. Link

Here's another chart of the Euro and the USO. I'm expecting a rebound in oil nearterm...$110 on the $WTIC or on the USO 88/90. Link

Where do we stand now?

Euro 1.4698 / $WTIC $112.85 / USO $91 / USD 77.09

$USD;USO Link $XEU; $WTIC Link

Linda Piazza : 8/19/2008 10:39:17 AM

The OEX's 15-minute 9-ema is now 586.83 and that's now potential resistance on 15-minute closes. Strongest resistance above that appears to begin at 588.78-590.02. OEX at 584.87 as I type. So far, bears haven't needed to worry about where resistance might lie, but keep updating your profit-protecting plans anyway. I've said for at least a week that if the rising wedge's support was broken, to be watchful of a potential steadying near the daily 30-sma and that's now at 583.83, with the low of the day so far at 584.18. Close enough that you should be careful. I'm not promising that the 30-sma's potential support can't be broken, but only that this would be a natural point from which a bounce attempt might be mounted.

Linda Piazza : 8/19/2008 10:13:50 AM

No bounce yet in the OEX, or at least no bounce that's been able to stick. Potential downside target and support on 15-minute closes is now 584.54.

Keene Little : 8/19/2008 10:11:33 AM

With the break of the uptrend line at SPX 1278 and now the break below the key level at 1274 we have confirmation that the bounce off the July 15th low finished last week. I've removed the pink wave count from the 60-min chart and show only the bearish wave count calling for the resumption of the decline (the one that will ultimately lead to Much lower levels into October): Link

It remains possible that we'll see a larger sideways consolidation develop since the July 15th low where price remains in a trading range between the July 15th low and August 11th high but at this time that would be purely a guess and would only become a higher probability if we see price drop in a very choppy corrective fashion. So far there is no evidence of that happening.

The RUT has also broken below its key level of 737 this morning so we've got the small caps also giving us a bearish signal. As shown on the SPX 60-min chart above, we might get a bounce back up to the broken uptrend line but it's no guarantee. Surprises will be to the downside and I would not want to be long Any stocks right now. Stay in cash and/or play the short side.

Jane Fox : 8/19/2008 10:00:09 AM

I see ES is now making new daily lows following the VIX's lead,

Linda Piazza : 8/19/2008 9:59:23 AM

Funny, Jane. Translating slogans into another language can be tricky, can't it? The classic is the difficulty marketing the Nova car in Mexico, since "no va" means "it doesn't go."

Jane Fox : 8/19/2008 9:58:29 AM

Sometimes things are lost in the translation. LOL

Jane Fox : 8/19/2008 9:56:48 AM

I read an article in the paper last night about some of the signs found in China during the Olympics.

Deformed Man Toilet for Disabled access restroom

The slippery are very crafty for Slippery when wet

If you are stolen call the police.

Linda Piazza : 8/19/2008 9:55:49 AM

A bounce could begin at any time in the OEX, although both the 15-minute and 30-minute charts show the possibility of a bit more downside. If one does, the nearest resistance is now showing up in the 588.60 (15-minute closes) to 589.06 (30-minute closes levels. OEX at 585.21.

Linda Piazza : 8/19/2008 9:51:42 AM

OEX potential downside target on the 15-minute chart is now 584.75. That's potential support on 15-minute closes, too, so bears need to spiff up their just-in-case profit-protecting plans.

Linda Piazza : 8/19/2008 9:47:51 AM

For reference, the 8/08 low for the OEX was 584.64.

Linda Piazza : 8/19/2008 9:46:40 AM

The TRIN sometimes does crazy things in the morning, but it's dropping hard off its early level and is 0.92 as I type. Bulls would like to see it stay below potential new resistance on 15-minute closes at 1.07, while bears should like to see a bounce that takes the TRIN back above that level.

Linda Piazza : 8/19/2008 9:43:54 AM

Keltner outlook on the A/D line: The A/D line has made its first prints in the lower or bearish half of its Keltner channels on the 15-minute chart, but dropped straight to potentially strong support on 15-minute closes now at about -1090. If that support holds and the A/D line bounces, I would watch for potential resistance first near -650 and then near -310 to -400. If the A/D line continues dropping, places to watch for bounce potential are at about -1350 and -1700. As I type, the A/D line is -1238.

Jane Fox : 8/19/2008 9:43:52 AM

AD line as quickly fallen to under -1000. It is too early to get a handle on the VIX but it is not supporting the higher highs that the S&P futures have been making since the markets opened. This is not a time to be long for sure.

Linda Piazza : 8/19/2008 9:37:05 AM

The OEX now has a potential downside target of 584.90 on its 15-minute chart, but, if in bearish positions, I'd start spiffing up my profit-protecting plan in case a bounce gets started at any moment. I would watch for first potential resistance near 589.20-589.40 if the OEX does bounce.

Jane Fox : 8/19/2008 9:33:26 AM

AD line opens bearish but not as bearish as I thought it would. -576

Keene Little : 8/19/2008 9:28:25 AM

With the small sideways consolidation near the low late yesterday it looked like we'd get another leg down and this morning's drop in equity futures is certainly pointing us in that direction. Yesterday's late-day bounce had SPX testing its broken uptrend line from July 15th and I had referred to a potential kiss goodbye this morning if the market did not rally immediately so that bearish setup will see follow through this morning.

We could be getting close to finishing the leg down from last Friday but it might stair-step a little lower before finishing. SPX 1262 should be the most we'll see to the downside before setting up a larger bounce, perhaps back up to the same broken uptrend line. But it might not get that low so manage your trade carefully if short.

Jane Fox : 8/19/2008 9:19:03 AM

Crude's support at $110 is holding on for dear life and the longer it does the higher the probability it will break upwards. MACD is not supporting the upward break scenario though.

Any subsequent rally will then run into strong resistance at $120. Link

Jane Fox : 8/19/2008 9:10:44 AM

LONDON (MarketWatch) -- Kenneth Rogoff, the former chief economist of the International Monetary Fund, reportedly said Tuesday that a large U.S. bank will collapse in the next few months. "We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," Rogoff told a conference in Singapore, according to a Reuters report.

Jane Fox : 8/19/2008 9:05:03 AM

Both the S&P and DOW futures broke their respective previous day lows overnight whereas the Russell 2000 and NDX futures have not so far. I suspect the AD line to open quite bearish this morning. Link

Jane Fox : 8/19/2008 8:58:14 AM

WASHINGTON (MarketWatch) - U.S. home builders sharply reduced the number of new homes started in July and dropped the number of new single-family permits to the lowest level in 26 years, the Commerce Department estimated Tuesday.

Housing starts fell 11% to a seasonally adjusted annual rate of 965,000 in July, close to the 960,000 expected by economists surveyed by MarketWatch. See Economic Calendar. It's the lowest level in 17 years. June's starts were revised higher to a 1.084 million annual pace.

Housing starts are down 29.6% in the past year.

Builders are frantically cutting back their production of new homes, trying to work off a mammoth glut of unsold inventory. Rising foreclosures on existing homes are complicating the builders' efforts to bring supply back down to meet sluggish demand.

The big decline in July was largely pay back from a surge of permits and starts in June that were sparked by a new building code in New York City that provided a big incentive to rush big condo and apartment building permits through before July 1.

Jane Fox : 8/19/2008 8:57:08 AM

WASHINGTON (MarketWatch) -- U.S. producer prices rose by a bigger-than-expected 1.2% in July, the Labor Department reported Tuesday, driven higher by prices for energy, food and other products. Economists surveyed by MarketWatch were looking for an increase of 0.3% in July. Excluding food and energy, producer prices rose 0.7% in the month, which was also higher than expected. In July, energy prices rose 3.1% and food prices climbed by 0.3%.

Linda Piazza : 8/19/2008 8:36:19 AM

Yesterday, the OEX broke below the support from its rising wedge, support that has held since 7/15. As I've been warning for some time, bears need to temper their excitement for now. While it's always possible that this is "the" breakdown for which bears have waited, we sometimes see rising wedges broaden into regular old rising price channels. For that reason, I would be particularly careful to protect bearish profits if the OEX were to drop either to the 581.75-583.75 zone, near and just below the 30-sma, or near 575.32, back near the 23.6% retracement of the slide off the May high into the July low.

Here's how intraday charts are set up currently: the 15-minute chart suggests that the OEX could decline immediately toward 585, and the 30-minute one suggests an eventual target at and maybe below that daily 30-sma, but this chart adds a caveat. Support on 30-minute closes now at 589.40 has been strong and would need to be broken decisively. The current level of futures below fair values says that could be accomplished right off the bat this morning. Bears should keep in mind the possibility, however dim it seems at this moment, that the OEX could punch lower but bounce right back above that support, likely to be driven a bit lower if the OEX sinks immediately.

In the as-of-now unlikely possibility that the OEX could bounce right away, watch for potential resistance to kick in near 591.20-591.50, or, if the OEX should get past that, at 594.80 on 30-minute closes.

Market Monitor Archives