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Jeff Bailey : 9/13/2008 12:27:38 AM

Just a parting thought ... As I look at my 10:13:16 post ...

and I think about this "mess" with the banks and all, I can't help but think some of what we're seeing these last several months isn't in part a result of 09/11/2001.

Think about it, but put yourself in the Fed's shoes that very day (09/11/2001).

Markets have been halted.

Picture the World Trade Center towers falling.

What would YOU (we know what the Fed did, they began aggressively cutting rates to make sure there was liquidity in the financial system, so that banks would lend money, or be able to lend money if need be, until order was restored) have done as the head of the Fed?

As I continue to process all the information we're getting, there is some frustration, but a reality as to what the Fed and Treasury is doing today.

I will argue that the Fed and the Treasury (and you and I as tax payers) are CLEANING UP A MESS, that a LACK OF OVERSIGHT has created.

LACK OF OVERSIGHT in that FRE and FNM were mostly doing their job. They were buying mortgage loans from other banks, so that those other banks could free up capital to generate more loans.

But it became "too easy" and that's when those "other banks" started lending money to those that really couldn't pay back, on houses that were going to increase in value by 20%/year, and in some cases, were loaning 120% LTV.

You see, it sure seems that the printing presses were rolling at all ends. FRE and FNM were buying stuff they may not fully of known what they were buying (they guy/gal with a stated income qualification on a house that was valued at $xxx,xxx.00). Then all these other "cool" products began to roll out (a derivative of a derivative of an asset in some cases) and things really got rolling.

Then the inevitable cycle in the housing market takes place. Remember, the UP cycle lasted MUCH longer and was MUCH stronger than anyone could have predicted.

The "problem" with FRE and FNM is that they are actually holding mortgages.

They can't just "close the doors" on FRE and FNM and let all those mortgages go ... what ... unserviced?

I mean, the mortgage paper does represent an asset right?

I mean, a retail shop. You just close the doors, have a liquidation sale. The retailer sells what inventory he/she has for what they can get for the inventory, and they're done.

For FRE and FNM you/we/Fed/Treasury can't just do that.

If theirs $200K still due on the mortgage, and their's an asset still sitting on the ground somewhere (even if its market comparible next door is worth $100K) FRE and FNM can't just close their doors. They really can't if the $200K note is in default.

Now this is crazy, but it wouldn't surprise me.

You know how Senator Obama has devoted so much of his life to the homeless?

I think a one of his many "new programs" the government (taxpayers fund government programs) might need to add is this ... How about we take all those FRE and FNM defaulted mortgages, those condos/townhouses/single-family homes, and do this Mr. Obama. Sometimes, I think Mr. McCain might be able to get talked into this. Palin seems way to conservative though.

Let's take every homeless person on the street, and RENT IT OUT to them for $100.00/month! Maybe pair up a few. "Panhandlers Pavillion," "Eight Kids Isn't Too Many Meadows." I know there are those that do receive wellfare, that may be on the street due to mental/physical illnesses and they do need our (taxpayer) help, but there are a lot that sit back and cash the $350/mo check (not sure what a child gets) and see it as a subsidy for other lines of work. Distribution of illegal pharmaceuticals. Midnight auto. Etc.

Heck, with their wellfare check, they can afford that can't they? If they can't, let's TAX big oil just enough, so we can increase the wellfare for a more comfortable lifestyle.

Gosh, I'm glad they didn't TAX the homebuilders back in their hayday. They've needed all that cash to keep some workers employed the last couple of years.

Now I'm getting off track, but do you see where some of this can go?

May go?

Hey, if it works out, and the homeless pay the rents (taxpayers will own the homes anyway), the housing cycle will once again turn UP (it may be doing it as I type) and when that old $200,000.00 house/mortgage becomes a $300,000.00 house, we (the taxpayer) can SELL IT and we might actually have a NATIONAL SURPLUS!

Is that why the dollar's been rallying? All these mortgages taxpayers are backing will someday be a windfall profit?

Good gravy! Not a windfall profit. That'll want to be TAXED!

Have a great and SAFE weekend.

PS ... Don't write me in for this year's President. That's a job I would NOT want in a million years. Advisory roll perhaps, but NOT President.

Jeff Bailey : 9/12/2008 10:49:52 PM

Answers to 09/12/08 08:58:45 PM ... "Go ahead! Look at today's PRICE action...."

But before you click on the following link and look at the 09/12/08 COLUMNS AP, AQ, AR, AS and then the COLUMNS AV, AW, AX, AY, make your EDUCATED GUESS, or PRACTICE. Then click this Link

I'm also about to run out of verical space, but in the above "link" I'm showing the 07/14 and 07/15 (07/15 was most recent 52-week low for SPX) (RUT.X's was back on 03/10/08, but came close on 07/15/08) so could be important information.

Jeff Bailey : 9/12/2008 10:13:16 PM

Subscrimer email Hi Jeff, I saw the post in the MM from 9/11/2001. It's amazing to remember how that day started. It was tough reading that last line as I was almost welling up in both sadness and anger. Thank you for bringing us back to life outside trading. By the way, my first time emailing but you do an excellent job in the MM. I appreciate all your insights.

Response ... Hey, you and I share a very similar feeling about our country, and sacrifices made then and now as a result of 09/11.

My eyes swelled with tears as I posted that update in the Market Monitor Thursday morning.

I got so "fired up," I couldn't sleep, so I got back up out of bed, and started working on some refinery capacity data, getting as prepared as I could for hurricane Ike. (some posted today)

I will NEVER forget that morning of 09/11, typing the update, seeing the CNBC flash to the World Trade Center. Checking futures, and seeing the "blip."

Then typing some more ... and when the second plane hit ... the world changed. Later ... the Pentagon. Ugh...

Rushing, rushing to get out that update to subscribers.

A reassurance that we were there together and that we'd get through it (trading/investment wise too).

Remember how "firm" the markets eventually opened four days later. You could feel the "we will not go down without a fight." Market psychology is important and it shows itself in many forms.

Sell a gap lower on 09/11/08? Not a U.S. cash open.

I also remember Oklahoma City bombing and President Reagan being shot within minutes of each news report.

Last night, there was a great documentary on the History channel. Gosh ... I think I watched it, only to relive all that was going on.

What really gets me is that I know some of the firemen (police, and others) I saw in the documentary, eventually went into the towers to help those that needed help.

Many even delivered lives, then went back inside, perhaps knowing that each time they did, the odds were growing that they themselves would not return to their loved ones.

For me too, a break from what I hold such passion for. These markets, and this country.

You got my point. What takes place in trading is really so small compared to 09/11. Sometimes I need perspective. Perhaps we all do. If only once a year.

OI Technical Staff : 9/12/2008 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 : 9/12/2008 9:43:26 PM

Charles! I tried to reply to you "volume" question. I've sent a reply back.

Jeff Bailey : 9/12/2008 8:58:45 PM

Various Internals (Table) that I keep Link

NYSE NH/NL (columns Q and R) are used to get (columns AH, AI, AJ). NASDAQ NH/NL (columns Y and Z) are used to get (columns AL, AM, AN)

Hey ... What do YOU think TODAY's NH/NL are for the SPX (column AP and AQ) so I can get AR, AS, AT? And for the RUT (column AV and AW) so I can get AX, AY and AZ?

Go ahead! Look at today's PRICE action, make an EDUCATED guess based on history (see table). Then after you guess, see if you're SURPRISED (bullish/bearish), or if you're RIGHT IN THERE and have a good feel.

REMEMBER what sectors have been getting "hit" the hardest of late and building new lows, the STOCKS in those SECTORS, and which MARKET (NASDAQ, or NYSE) those STOCKS then reside.

SPX and RUT.X also broad. Yes, only a "fraction" of total 500/2000 actually making NH and NL, but you should have a feel.

Jeff Bailey : 9/12/2008 8:37:52 PM

Closing Internals found at this Link

Missed the 02:00 internals. So much stuff to cover, keep abreast of today, simply lost track of time.

I should note that I am assuming the NYSE and NASDAQ's 5-day NH/NL ratio's are in a column of O. I do not know that for certain as I did not get the NYSE and NASDAQ NH and NL measures from 09/04/08 trade.

IF the NYSE 5-day NH/NL ratio hit 6.00% (it could have with some 5.9, 7.4 and 5.9 daily measures after 09/04), then NYSE 5-day NH/NL ratio would be back in column of X.

IF NASDAQ 5-day NH/NL ratio had fallen to 14.00% (it could have with some 5.9, 7.4 and 5.4 around 09/04), then NASDAQ 5-day NH/NL ratio back in column of X.

Yes, the PRICE action of NYSE and NASDAQ would make us "think," based on PRICE action alone that there's no way any type of bullish leadership has formed short-term. But that's why traders follow these types of internals so closely. You can't hide things from the internals.

Like going to the doctor. Might look healthy/sick, but its what is going on in the inside of you that is important in the diagnosis.

Late last night, when most were sleeping, I was preparing next quarter's Pivot levels (punching in current quarter's high/low so far) and noted DXY high. Check out $HUI.X today! Any "lack of new lows" in the gold/miner stocks the last couple of days?

Again ... I tend to view things more "bearish/conservative," so I assume NYSE and NASDAQ 5-day NH/NL ratio still in "O"

Jeff Bailey : 9/12/2008 7:59:42 PM

Filled up the land yacht ... Diesel at the pump up $0.03 @ $4.059 from what I could'a got last night. Activity was "brisk." Some big rigs with ATVs headed for the hills as muzzle loader opens this weekend. Others just looked to be topping off after a week at work.

Albertson's wanted $4.39 ... "seemed expensive on valuation." Often-times, they're one of the "less expensive."

Jeff Bailey : 9/12/2008 7:57:22 PM

Closing U.S. Market Watch found at this Link ... Just another 179-point chop for the DJIA today Link as it "contends with trend." On the surface, looks like nothing happened today. 21-points of choppy S&P500. Link

Jeff Bailey : 9/12/2008 7:47:24 PM

I think the more, or equally important upward bar chart trend is from the 07/15 low to 09/05 low. Per Wednesday's wrap ... "I would view a CLOE below 1,221 as further bearish."

Keene Little : 9/12/2008 4:24:37 PM

My apologies for being away all day. The hospital visit took much longer than anticipated (which is 2-1/2 hours away) and I just stepped back in the door.

First reaction when I looked at what happened today is that not much happened. The pattern of the bounce off Thursday's spike down opening looks corrective but SPX is holding its uptrend line from Thursday. Traders think it's an important trend line so if it breaks it will be telling us something. I continue to like 1261.69 as an upside target for Monday. I'll review more charts in a bit and see what else I see. SPX 10-min chart: Link

Jeff Bailey : 9/12/2008 4:10:49 PM

just in case .... nice exit on the rb08v! That'll more than fill the tanks

Jeff Bailey : 9/12/2008 4:08:40 PM

My tank is empty ... Land yacht and myself. Exhausted, simply exhausted. Need to go get some diesel.

Jeff Bailey : 9/12/2008 4:07:43 PM

I'm signing off for now ... Echo Linda's 03:58:09 ... Buckle down and stay safe!

Jeff Bailey : 9/12/2008 4:05:44 PM

WB $14.27 -0.07% ... closes atop its WKLY S2.

Jeff Bailey : 9/12/2008 4:05:13 PM

SSO $58.50 +0.63% ...

Jeff Bailey : 9/12/2008 4:04:37 PM

SPY $125.90 +0.30% ... 13-minutes, 13-minutes to close.

Jeff Bailey : 9/12/2008 4:03:47 PM

Linda! ... Our reporter on the spot.

Will you be so bold to take a webcam outside? (grin)

Jeff Bailey : 9/12/2008 4:02:38 PM

Most recent Gustav/Ike stats/updates Link

Jeff Bailey : 9/12/2008 4:01:28 PM

Boomark to "favorites" you energy traders ... keep it handy.

Jeff Bailey : 9/12/2008 4:00:54 PM

You might need this over the weekend ...

MMS site Link

Linda Piazza : 9/12/2008 3:58:09 PM

Before I sign off, I wanted to say that our thoughts and hearts are with those of you who are in Ike's path or who have relatives or friends who are. Believe me, it comes from my heart, with evacuees here in my house and with Gustav's just having left ten days ago. We're watching and hearing reports of water flooding areas of Galveston, Surfside Beach and other cities, including Cameron, LA, and hoping that it doesn't get worse than it is and that weather commentators have overestimated the storm surge that hasn't yet hit in its entirety. Be safe.

Jeff Bailey : 9/12/2008 3:57:48 PM

Conoco: ... Sweeny to Pasadena, Seaway pipelines are closed.

Jeff Bailey : 9/12/2008 3:56:33 PM

HYG $91.95 -0.05% ... iShare "junk" ... See Wednesday's wrap

Linda Piazza : 9/12/2008 3:55:21 PM

We filled our tanks, Jeff, and it's a good thing. No gas at most stations. The state had a plan to truck supplies along the evacuation routes, but the trouble was that Ike's projected landfall changed about 300 miles in less than 48 hours. The plan had to be continuously altered and it obviously was not as effective as it should have been and would have been, so we're all having trouble finding gas. No one can safely assume they can travel now, even here in central Texas, where we're no longer projected to receive the wind strength we were a couple of days ago.

Jeff Bailey : 9/12/2008 3:54:43 PM

S&P: Firms Downgraded to "junk" continue to rise this year ... DJ- The number of fallen angels, or investment-grade companies that have been downgraded to junk status, has risen to 26 this year, 13% more than a year ago, according to Standard & Poor's. The 26 fallen angels had a total of $76.29 billion in rated debt, compared with $64.1 billion from 23 companies a year earlier. The latest ones are mortgage insurer Radian Group Inc. (RDN), meat-processing giant Tyson Foods Inc. (TSN) and Singapore-based chip foundry Chartered Semiconductor Manufacturing Ltd. (CHRT). The number of fallen angels peaked in 2002, with 130. As of Monday, 45 companies with rated debt worth $72.69 billion have been identified as potential fallen angels - firms rated one notch above junk status with a negative ratings outlook or having ratings on watch for likely downgrade. That is two more than a month earlier. New potential fallen angels include mortgage insurer PMI Group Inc. (PMI), Swiss specialty chemicals producer Ciba Holding AG (CIBN.VX) and Australian natural gas distributer Envestra Ltd. (ENV.AU). The number of potential fallen angels has been rising since a five-and-a-half-year low in July 2007. The most potentials reside in the utilities sector, with eight; followed by forest products and building materials, with five; and transportation and consumer-products, with four each. Railroad CSX Corp. (CSX) is the largest potential fallen angel based on rated-debt volume, with $9.14 billion in rated debt.

Tab Gilles : 9/12/2008 3:53:54 PM

Linda...hope you and your family remain safe throughout the hurricane this weekend.

Jeff Bailey : 9/12/2008 3:53:51 PM

Conoco: ... Skelly-Belview pipeline shutting in Friday evening.

Jeff Bailey : 9/12/2008 3:52:08 PM

I (Jeff Bailey) have not been able to catch complete news of platform/refinery/terminal updates ... so don't assume just a couple.

Linda Piazza : 9/12/2008 3:51:07 PM

We all know what happens with the financials will impact what happens next week. Whether Ike's damage is less than or greater than anticipated might, too, although sadly it might be the damage done to energy-related and other businesses that counts most with the markets. Scheduled developments on foreign bourses Sunday night and Monday morning include ECB President Trichet's address in Frankfurt at 5:00 am ET Monday morning, but little else that might be market moving. Japan will be closed for a Respect-for-the-Aged Day on Sunday night, so currency action might be a little more aimless than usual during that time period.

We need a little respect for the aged in our country!

Jeff Bailey : 9/12/2008 3:49:58 PM

Linda ... you fill your tanks?

Jeff Bailey : 9/12/2008 3:47:32 PM

Conoco Alert! ... Pasadena TX, refined products terminal closing friday.

Jeff Bailey : 9/12/2008 3:45:23 PM

Shell: ... Expects rates to "ramp back up" after Hurrican Ike.

Jeff Bailey : 9/12/2008 3:44:49 PM

Shell: ... Throughput rates on Calpine "have slowed somewhat"

Jeff Bailey : 9/12/2008 3:43:52 PM

Shell Alert! ... Offshore production platforms, pipelines shut in.

Jeff Bailey : 9/12/2008 3:43:09 PM

Shell Alert! ... Houma-to-Houston crude systems suspends service.

Linda Piazza : 9/12/2008 3:45:23 PM

I'm never sure today how often I can post on this day I had taken as a vacation day with no intention to work, so I wanted to talk a little about the weekly and daily charts for the OEX and SPX in case I can't do it later. On a traditional chart, what we see is long-legged, small-bodied candles on the weekly chart. Normally, when coming at the bottom of a decline, these would be potential reversal signals, with "potential" a key word. However, there's a caveat in this case, and it's an important one. This weekly candle is being produced within the very wide and very choppy consolidation zone in which these indices have thrashed back and forth since late June. What those candles mostly signify, then, are indecision and emotion-based trading back and forth. However, that potential for a reversal higher must be considered and watched.

I'm just not sure how high a probability that should be assigned. We did see something similar produced the week of March 10, and there was a reversal that began the next week, but it began only after a swoop into a lower low that week before the strong gain, so even if the indices were to follow that pattern again, that would not preclude a sub-1200 test for the SPX and a 549-552 test for the OEX sometime next week.

The TED spread is frankly scaring me. I saw it ramping up in advance of the 7/15 low on these indices, too, ramping up from about the same level and toward the same levels that it's doing now. So, even if the SPX and OEX are to reverse, are they going to repeat that pattern after the week of 7/10, when indices dropped into the summer's low before reversing? Even if I believed strongly in the possibility of a reversal, I would certainly give that some consideration.

As for the daily chart, early this week, I proposed the possibility that the OEX could be forming a triangle after breaking out of the last triangle. Although the spike lower this week negated that possibility unless the candle shadows are included and only the candle bodies are included in a triangle's lower trendline, the possibility perhaps ought to still be considered. The OEX and SPX have today pushed up toward their 10-sma's, with those averages roughly (but not exactly) marking the top of the triangle on daily closes. The OEX's 10-sma is now at about 580. The SPX's is about 1255. Barring a huge bounce into the end of the day, I frankly don't see anything decisive about today's action other than the possibility that these averages might again roughly hold as upper boundaries and that the indices would then either break above them next week or turn down from them. Even if they break above them, the indices could just be reforming the triangle shape into rectangles, which would occur if the SPX sped up to 1272 or so and the OEX to 587-588 or so. I just see chop with no definitive answer.

Many of you know that I went to cash last October in everything but a small mixed stock-and-bond fund and in my trading accounts. As of this typing, I'm flat even in my trading accounts. I'm scared enough now about a capitulation event that I'm waiting until we see something like that or else enough proof that it's not going to happen before I risk bull put spreads and I've used the downturn to lock in my profits on the bear call ones.

Jeff Bailey : 9/12/2008 3:41:34 PM

ConocoPhillips (Terminals) map Link

Tab Gilles : 9/12/2008 3:39:15 PM

Linda, I follow T. Boone's comments also. The man didn't become a billionaire not knowing the oil industry. Plus I give him credit for his conviction on natural gas [my favorite energy pick] along with wind. Using quite a substaintial amount of his money to invest and promote his ventures.

Jeff Bailey : 9/12/2008 3:38:40 PM

I think that's actually out in the Gulf ...

Jeff Bailey : 9/12/2008 3:33:30 PM

Conoco Alert!: ... Clifton Marine terminal closing Friday.

Jeff Bailey : 9/12/2008 3:31:24 PM

SSO $58.07 -0.10% ... SUC-IJ $0.40 x $0.60

Low/High today $0.35/$0.55

Jeff Bailey : 9/12/2008 3:29:35 PM

WB $14.38 +0.70% ... "no way" $15.00 by next Friday's close ... but what if it does says the caretaker, the ...

Jeff Bailey : 9/12/2008 3:28:26 PM

The tension, the preparedness, the pressure ...

Jeff Bailey : 9/12/2008 3:28:01 PM

DXY 78.98 -1.44% ...

Jeff Bailey : 9/12/2008 3:27:49 PM

HUI.X 290 +10.43% ... "no way 300.00" by Friday says the caretaker ... the nursing home caretaker ... but what if it does?

Jeff Bailey : 9/12/2008 3:25:31 PM

SPX 1,250 "in the zone" ...

Jeff Bailey : 9/12/2008 3:25:10 PM

VIX.X 10-minute interval chart ... My QRTRLY/MONTHLY and QCharts' DAILY/WKLY turned on.

Will get new WKLY at today's close (you've got your pivot calculators I've posted for you here in the MM) Link

Jane Fox : 9/12/2008 3:24:53 PM

Well my big selloff didn?t come today and I am now left with trying to figure out what happened with the VIX and ES.

Like I said earlier, it is weird out there today.

Jeff Bailey : 9/12/2008 3:22:27 PM

NASDAQ a/d 1,350:1,452

Jeff Bailey : 9/12/2008 3:22:14 PM

NYSE a/d 1,681:1,373

Jeff Bailey : 9/12/2008 3:22:00 PM

45-minutes to the close ... still chatter about Fed/Treasury/Lehman over the weekend.

Jeff Bailey : 9/12/2008 3:20:15 PM

And you can throw multiple OUT the window ...

Jeff Bailey : 9/12/2008 3:19:36 PM

Cause when the institutional side comes unwound (see DXY lately), that's when things can really get moving.

Jeff Bailey : 9/12/2008 3:19:00 PM

Once you understand the institutional side, then the retail side (pur short short es), or (pure long es) risk management becomes very obvious.

Linda Piazza : 9/12/2008 3:17:20 PM

Potential resistance for the OEX on 30-minute closes is now 579.06. For the SPX, 1251.64. The SPX has punched back above that as I type but has further potential resistance on 30-minute closes up to 1260.08. The redrawn supporting trendline off yesterday's low is now crossing at about 1247.60 for the SPX and about 574.60 for the OEX.

Jeff Bailey : 9/12/2008 3:17:27 PM

Understand where/how pressure can come from/develops, see it, then feel it.

Jeff Bailey : 9/12/2008 3:16:31 PM

the NAKED 1,220 put now "ok" ... what about the ES short?

Jeff Bailey : 9/12/2008 3:15:55 PM

ES short that hedged a NAKED PUT at yesterday morning's open, now thinking ...

Jeff Bailey : 9/12/2008 3:14:55 PM

SPX 1,253 ... back for another look-see at WKLY Pivot.

Jeff Bailey : 9/12/2008 3:11:24 PM

I've been on it ... you're on it.

Jeff Bailey : 9/12/2008 3:11:02 PM

There ... CNBC's Rick Santelling ... mentioning Treasuries ... hedges ... he's on it.

Jeff Bailey : 9/12/2008 3:09:58 PM

M, m, mmmm ... intra-day VIX pivot chart coming ...

Jeff Bailey : 9/12/2008 3:09:21 PM

DAILY S2 23.19, S1 23.80, P=25.02 (see internals from 10:00 and 12:00), R1 25.63, R2 $26.85 (tie with QRTRLY retracement) 26.84

Linda Piazza : 9/12/2008 3:08:17 PM

I favor T. Boone Pickens for information about crude. He was on CNBC on July 8, when crude prices had already peeked above $145 and were just three days away from their $147.20 high, when everyone was talking $200 a barrel. When asked about his $150 price target being approached and asked what his target was for the end of the year, he said the same $150, which crude was to approach within $3.00 within three days. He thought crude was topping for a time, and he was right, and he said it as prices were hitting their highs. I was impressed that he very nearly called "the" top for that period. Whether he's right into the end of the year still remains to be seen. But maybe I just don't like The Donald's bluster.

Jeff Bailey : 9/12/2008 3:07:28 PM

Can disect the QRTLY ...

Jeff Bailey : 9/12/2008 3:07:07 PM

VIX.X 25.76 +5.61% ... where's my MONTHLY's, WKLY's.

Jeff Bailey : 9/12/2008 3:06:29 PM

Has the dollar done enough near-term. Paulson/Bernanke comments last few months ...

Jeff Bailey : 9/12/2008 3:06:01 PM

Is this a "don't need defense" type of move? Is there better REWARD/Risk in other areas?

Jeff Bailey : 9/12/2008 3:05:15 PM

5-year now up 7.3 bp ... cash freeing up.

Jeff Bailey : 9/12/2008 3:04:36 PM

Making sure you're IV is full of fluid, comfortable, as much information as I can get you. Monitoring all vitals.

Jeff Bailey : 9/12/2008 3:03:29 PM

I walk you through it the last couple of days ... with AA and CPB

Jeff Bailey : 9/12/2008 3:03:06 PM

We've got some VERY smart subscribers ... lots of questions last in my e-mail when I got back.

Jeff Bailey : 9/12/2008 3:02:14 PM

The MATH was wrong?

Jeff Bailey : 9/12/2008 3:01:52 PM

SPY $125.93 +0.34% ... could that blow up, go the other way if assumptions were wrong?

Jeff Bailey : 9/12/2008 3:01:00 PM

Could be a massive amount of P/E traders buying puts those two days. Thus the action around the pivot.

Jeff Bailey : 9/12/2008 3:00:02 PM

See how much "heavier" the $121-$124 puts are regarding OI than the call side?

Question is ... is it LONG put, or is it NAKED?

How long has it been like this? Has it been building?

It may have been building ... VIX.X has been trending higher (see Wednesday's wrap, notes regarding Thursday/Friday action I reviewed).

Jeff Bailey : 9/12/2008 2:57:20 PM

CBOE's SPY Option Montage Link

Jeff Bailey : 9/12/2008 2:53:17 PM

Gosh there's a lot of puts from $120 to $124.

Jeff Bailey : 9/12/2008 2:52:44 PM

SPY looks a bit collared .... $120-$130

Jeff Bailey : 9/12/2008 2:52:22 PM

M, m, mmmmm

Jeff Bailey : 9/12/2008 2:50:26 PM

Where's it at relative to my strike ... what's my premium doings (VIX.X a part of that), and then risk/reward decisiion.

Jeff Bailey : 9/12/2008 2:49:30 PM

Gott'a think ... Sep right now is somewhat of a "race against time" ...

Jeff Bailey : 9/12/2008 2:49:00 PM

32,105 action at the SPY $120 put, that's heavy OI too.

Just about 5-days till expire. Directional, or calling it quits?

Like WB put today?

Tab Gilles : 9/12/2008 2:49:50 PM

Oil Services (OIH) $162.87 +$3.56 (2.25%) Link

Going into the weekend with Ike barrelling down on Texas... the suggested call option - OIHAK Jan $155- has had a nice pop from the $13.30 level. Currently trading Bid $19.40/Ask $19.65. Consider taking 1/2 off the table for a nice $6 gain 45% and re-evaluate come Monday.

Tab Gilles : 9/11/2008 7:17:04 PM

Follow-up to my 9/10/2008 10:28:04 PM post OIL SERVICE HOLDRS (OIH) $159.31 +$3.31 (2.12%) Link

The suggested call option--January 2009 call $155.00 Ticker symbol OIHAK Bid 14.75/ Ask 15.05 --- opened down this morning got as low as $13.30/$13.60. Closed today at Bid $16.50/ Ask $16.80.

Last night it was reported that OPEC would go ahead with production cuts, however, today Saudia Arbia said it won't not follow through. Link

Jeff Bailey : 9/12/2008 2:47:44 PM

Look at that SPY CBOE volume and OI ... on call and put side .... I'm gett'n there .. hold on.

Jeff Bailey : 9/12/2008 2:45:58 PM

Knew that before 08/28 didn't we? Yep ..

Jeff Bailey : 9/12/2008 2:45:22 PM

DJ- flashing headline that unleaded stockpile down 5% from year ago.

We knew that from your EIA inventory table I keep.

Jeff Bailey : 9/12/2008 2:43:46 PM

SPY $125.32

Jeff Bailey : 9/12/2008 2:41:04 PM

I pet the dog, who needs to go outside and do HIS business ... back in a second.

Jeff Bailey : 9/12/2008 2:40:34 PM

And I observe equilibrium ... pressure ... and I get back to duties

Jeff Bailey : 9/12/2008 2:39:57 PM

TRIN 0.71

TRINQ 1.03

Jeff Bailey : 9/12/2008 2:39:33 PM

NASDAQ a/d 1,206:1,582

Jeff Bailey : 9/12/2008 2:39:22 PM

NYSE a/d 1,528:1,509

Jeff Bailey : 9/12/2008 2:39:04 PM

Missed the 02:00 internals ...

Jeff Bailey : 9/12/2008 2:38:54 PM

I'm so focused, or busy, I don't even know what time it is ...

Jeff Bailey : 9/12/2008 2:37:48 PM

Your looking for a possible "unravel" point.

If the storm hits, what's the plan?

Jeff Bailey : 9/12/2008 2:37:09 PM

Then your identifying where the larger open-interst is at .... then looking at your pivot levels.

Jeff Bailey : 9/12/2008 2:36:39 PM

Your're marking the "where PRICE" is at right now, that's your waterline ...

Jeff Bailey : 9/12/2008 2:35:56 PM

And while I'm working on the SPY, I know you the subscriber might be working on the SPX.

Jeff Bailey : 9/12/2008 2:34:36 PM

I'm thinking , KNOWING what VIX.X really tells me ... Up= more call sellers/put buyers than Down= call buyers/put sellers.

Jeff Bailey : 9/12/2008 2:33:43 PM

I'm thinking about what the institutional traders might have to do should they need to hedge ...

Jeff Bailey : 9/12/2008 2:32:38 PM

While I'm getting the screen capture, I'm thinking SPY $125.00 and VIX.X Q R1.

Jeff Bailey : 9/12/2008 2:30:42 PM

When I can't get an option montage up on QCharts, I go over to cboe site ...

Jeff Bailey : 9/12/2008 2:28:57 PM

Trump almost did call the top. Maybe worth listening too regarding oil prices.

Jeff Bailey : 9/12/2008 2:27:57 PM

Remember D. Trumps "fade?" Makes you wonder doesn't it?

Jeff Bailey : 9/12/2008 2:27:31 PM

Boone might be hunting around $100.00 ... defending his call

Jeff Bailey : 9/12/2008 2:26:12 PM

VIX.X 26.11 +7.05% ...

Jeff Bailey : 9/12/2008 2:25:57 PM

USO $81.01 -0.58% ... UNA-VT $1.10 x $1.25

Jeff Bailey : 9/12/2008 2:24:29 PM

Remembering those people in the nursing home ...

Jeff Bailey : 9/12/2008 2:23:40 PM

If using Nymex contract to hedge ... stop, or entry set for $99.99, you might be filled.

Jeff Bailey : 9/12/2008 2:23:03 PM


Jeff Bailey : 9/12/2008 2:22:40 PM

TradeStation looks incorrect ... NYMEx showing $99.99 ... check account alert!

Jeff Bailey : 9/12/2008 2:20:24 PM

May not be QCharts server slow ... my computer comes to a crawl.

Got way too many applications going.

Busy, very busy.

Jane Fox : 9/12/2008 2:19:32 PM

I just checked the December contract and Tradestation has its low at 100.08. Just goes to show you the differences in Charting platforms. In any case I always put my money on TS, has the most reliable data stream in the industry.

Jeff Bailey : 9/12/2008 2:18:01 PM

MMS: 97.5% oil, 94.4% gas output still off line in Gulf.

Jeff Bailey : 9/12/2008 2:17:18 PM

Here ...

Jeff Bailey : 9/12/2008 2:17:07 PM

MMS: 1,267,187 b/d oil, 6,985 MMCF/D gas off line.

Jeff Bailey : 9/12/2008 2:16:24 PM

MMS giving updates on Gulf shut in ...

Jane Fox : 9/12/2008 2:16:09 PM

SAN FRANCISCO (MarketWatch) -- October crude touched a low of $99.99 on Globex Friday afternoon, marking the first decline below $100 since early April. October crude was last down 20 cents at $100.67 per barrel. But October natural gas was up 1.3% at $7.34 per million British thermal units. Analysts said Hurricane Ike may damage refineries in the Gulf region, reducing demand for crude oil.

Not according to my Tradestation. Daily low here is 100.03

Linda Piazza : 9/12/2008 2:15:49 PM

The OEX and SPX are back to challenge their rising trendlines off yesterday's low. Both violated them by a little about an hour and a half ago, so it's difficult now to assess when they might have violated that support. However, sustained 15-minute closes beneath 1239.85 for the SPX and and below the 1:00 low of 572.21 for the OEX would appear to confirm violations of those trendlines. For now, remember that both indices are still chopping out a sort of right shoulder for a potential inverse H&S, one that has been neither confirmed nor invalidated, and such right-shoulder formation periods are anything-goes sort of periods.

Jeff Bailey : 9/12/2008 2:15:31 PM

cc03 busy too

Jeff Bailey : 9/12/2008 2:14:55 PM

QCharts users ... to switch servers, can press CNTR ALT N to try and find a less accessed server.

Tab Gilles : 9/12/2008 2:16:27 PM

Chesapeake Energy (CHK)$41.58 +$1.41 (3.5%) Link


PAST POST: 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 as 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 in 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


Well...CHK appears to forming another two-month bullish divengence pattern. The stock has been severly oversold and a longterm bargain. I've been noting over the last several weeks that NatGas relative to oil is cheap. Chesapeake Energy (CHK) is a "Best of Breed" natural gas company. With 3.3 BCF of natural gas shut-in as we approach the winter season, I'm expecting $NATGAS to rise. Historically the oil/natgas ratio has traded at 9.2, it just recently tested the 16xs level. Link

Back on 8/19/08 I'd suggested several January calls CHK-AJ $5.10 then $2.75 now; CHK-AK ($.3.30/$1.75); CHK-AL $2.10/$1.10); CHK-AM $1.55/$0.75)...they are trading about 50% lower now.

Jeff Bailey : 9/12/2008 2:13:56 PM

Some ... well, they haven't a clue. Don't want to do the work. Don't know how.

Jeff Bailey : 9/12/2008 2:13:27 PM

Probably a lot of traders working hard ... accessing their montages.

Jeff Bailey : 9/12/2008 2:13:04 PM

VERY slow right now for pulling up a montage.

Jeff Bailey : 9/12/2008 2:12:42 PM

QCharts TERRIBLE for intra-day volume on options, but VERY good for where OI at.

Jeff Bailey : 9/12/2008 2:12:04 PM

Pulling up an option montage ... just saw it.

Jeff Bailey : 9/12/2008 2:11:50 PM

son of a bugger ... SPY $125.00 -0.40% ... as I type.

Jeff Bailey : 9/12/2008 2:10:30 PM

Again ... these would be SUMMATION of all call/put open interest for Sep.

Jeff Bailey : 9/12/2008 2:10:00 PM

DIA's $118 ($1 inc.)

Jeff Bailey : 9/12/2008 2:09:34 PM

SPY's was $125.00 ($1 inc.)

Jeff Bailey : 9/12/2008 2:09:06 PM

AIG's Sep. Max Pain theory tabulation at last night's close was $21.00 ($1 inc.)

Jeff Bailey : 9/12/2008 2:07:04 PM

My QCharts' Market Cap tabulation for AIG at last night's close was 34,686.00

Jeff Bailey : 9/12/2008 2:04:30 PM

Can throw the P/E out the window ... trade the technicals.

Jeff Bailey : 9/12/2008 2:03:31 PM

Very good ... Yahoo! Finance give LIVE intra-day market caps Link ... 34.95B as I type.

Jeff Bailey : 9/12/2008 2:02:17 PM

Outstanding Shares x price gives market cap.

Jeff Bailey : 9/12/2008 2:01:42 PM

AIG slipped to #48 at last night's close.

Jeff Bailey : 9/12/2008 2:00:31 PM

Oooooeee! AIG was ... 1,2,3... #37 to start the week.

Jeff Bailey : 9/12/2008 1:57:40 PM

The eye of the storm ... SPX Heavyweights Link

Jane Fox : 9/12/2008 1:56:20 PM

Once the pit opens at 9:00ET the average volume on a 1 minute chart is around 350-370. Avg volume now just hit 370 again so volume is matching the Pit open.

Jane Fox : 9/12/2008 1:54:45 PM

Volume increasing in the Crude pit now.

Jane Fox : 9/12/2008 1:53:39 PM

Well now Tab don't go exaggerating Crude only hit 100.03. :)

Jeff Bailey : 9/12/2008 1:52:24 PM

The compression

Tab Gilles : 9/12/2008 1:52:23 PM

$WTIC-crude oil HITS $100

Jane Fox : 9/12/2008 1:52:21 PM

100.03 :)

Jeff Bailey : 9/12/2008 1:52:15 PM

Feel the pressure ... VIX.X 26.44 +8.40% ...

Jeff Bailey : 9/12/2008 1:51:05 PM

Dorsey's SPSPX at this Link

$SPX.X conventional 10-point Link and add some noise with a 5-point Link

Jane Fox : 9/12/2008 1:50:54 PM

100.10 seems to be holding.

Jane Fox : 9/12/2008 1:50:13 PM

It is just wierd out there today.

Jane Fox : 9/12/2008 1:49:15 PM

Obviously Crude sellers are not evacuating because of Ike.

Tab Gilles : 9/12/2008 1:48:36 PM

Jamie Dimon of JP Morgan Chase (*Best of Breed*) in talks to possibly buying Washington Mutual. [per CNBC]

Jane Fox : 9/12/2008 1:48:28 PM

... and heading lower

Jane Fox : 9/12/2008 1:48:17 PM

Crude has now surpassed its previous day low at 100.18 and traded down to 100.14.

Jeff Bailey : 9/12/2008 1:44:55 PM

SPX daily invtervals Link

Jane Fox : 9/12/2008 1:44:11 PM

I have been comparing the VIX and S&P futures for a long time now and it has become one of the most reliable relationships I watch. No - it is the MOST reliable relationship I watch; when the VIX rallies ES falls or when the VIX falls ES rallies. This relationship may get out of sync every once in a while but it does not happen often and if it does it will not last very long.

Today the VIX and ES have been out of sync for most of the day and has to be the longest I have ever seen this happen. I believe ES is heading for a major selloff at some point today. Link

Jeff Bailey : 9/12/2008 1:39:09 PM

Yesterday's low was MONTHLY S2 ... so caretakers that thought short, on the alert.

Jeff Bailey : 9/12/2008 1:38:00 PM

SPX chart to tie with VIX on its way ... MONTHLY/QUARTERLY to make the tie.

Jeff Bailey : 9/12/2008 1:37:04 PM

US Gasoline Fund (UGA) $53.25 +0.85% ... high was $55.12

Jeff Bailey : 9/12/2008 1:35:39 PM

WNR $11.15 +7.00% ...

Jeff Bailey : 9/12/2008 1:35:09 PM

VLO $35.78 +8.32% ...

Jeff Bailey : 9/12/2008 1:34:52 PM

TSO $18.93 +5.28% ...

Jeff Bailey : 9/12/2008 1:33:24 PM

CNBC ... reporting State of Arkansas declaring state of emergency regarding gasoline supplies.

Linda Piazza : 9/12/2008 1:32:53 PM

The TED spread is 1.35, and it's clearly breaking out above the chop since the end of July. At about 1.65-1.7, it will face resistance from the descending highs since last summer's 2.4 high, and equities are sometimes--but not always--beginning to recover or stabilize when the TED spread hits its final interim high. However, between now and that possible resistance and or another ultimate peak high that is above that resistance, there could be some equity fallout in response to the rising default risk. So, what would I conclude? I would conclude that there's risk of an equity meltdown of some magnitude, perhaps even of capitulation type, but if that occurs as the TED spread is approaching about 1.65-1.70, then I would carefully guard my bearish profits in case we begin another steadying. I would not pile into loads of bullish positions, however, because we don't know whether the TED spread can break through that resistance of not. No one knows, I don't believe. I'll show Bloomberg's five-year chart, and you can see that the TED spread has been far above historical norms for the last year+: Link I'm certainly hampered in drawing too strong conclusions because what we're seeing now is clearly an aberration.

Jeff Bailey : 9/12/2008 1:28:30 PM

VIX ... from Wednesday's wrap (see wrap) Link

Jeff Bailey : 9/12/2008 1:27:39 PM

VIX Link

Jeff Bailey : 9/12/2008 1:24:16 PM

Excellent observation and alert on VIX.X ... nearing QRTRLY R1.

Linda Piazza : 9/12/2008 1:23:08 PM

I'm grateful for attentive and experienced subscribers today to keep me focused. A.W. points out that the VIX is reaching yet another high in its climb off the 8/22 low. Keltner charts tell me that it has a potential upside target of 27.75, although that's a target on the daily chart and not necessarily a short-term one. The VIX could do some back-and-forth pullbacks to the daily 9-ema, now at 23.95, and, as long as it bounced from it, still maintain that upside target. The VIX is 26.66 as I type, now in breakout mode on the 15-minute chart, but bears now need to be watchful for pullbacks that sometimes come shortly after the VIX breaks out. This is not a sign that it's time a bullish entry, but only just another reminder to spiff up your profit-protecting plans.

Jeff Bailey : 9/12/2008 1:22:48 PM

CME's Aug'08-May'09 from 08/28/08 benchmark Link

I was out of operation from 08/29 so had to get a day earlier.

Jeff Bailey : 9/12/2008 1:19:50 PM

DJUSHB 338.21 -0.20% ...

Jeff Bailey : 9/12/2008 1:18:50 PM

Amerco (UHAL) $43.40 -1.07% ... one of the most incredible turnarounds ever witness here in the MM. Was nearly bankrupt and "too the moon" p/e ratio in Oct'02

Jeff Bailey : 9/12/2008 1:15:39 PM

Again ... very thin traded, more "held" for hedges.

Jeff Bailey : 9/12/2008 1:15:02 PM

I'll be updating all contracts/regions Monday

Jeff Bailey : 9/12/2008 1:14:10 PM

Here was screen capture of CME's Nov'08 Regional Housing futures on 09/08/08 (fre/fnm benchmark) Link

Jeff Bailey : 9/12/2008 1:11:44 PM

Foreclosure filings increase, but at slower rate ... AP Story Link

Linda Piazza : 9/12/2008 1:11:01 PM

I said I wouldn't be surprised to see the OEX and SPX fall back to test their rising trendlines off yesterday's low, as such a pullback would be in keeping with a right-shoulder building exercise, and that's happened. The SPX may even have fallen just a bit below its rising trendline, but the OEX bounced right from its version. Those bounces aren't big yet, however, and we don't know if this is going to hold. My 15-minute charts say that if the SPX can't maintain 15-minute closes above 1249.30, then it's vulnerable to 1226.47 which would pretty much invalidate that inverse H&S. The OEX's version says that if the OEX can't maintain 15-minute closes back above about 573.60 and maybe even 575.06, then it's vulnerable to about 567.15. If they bounce, we would look at the 30-minute chart for that same resistance level that we've been watching all day.

Jeff Bailey : 9/12/2008 1:10:18 PM

NYSE COmp 8031 +0.24% ...

NASDAQ COmp 2,243.74 -0.64% ...

Jeff Bailey : 9/12/2008 1:09:06 PM

"Ditto" Dorsey's PnF of AIG

Jeff Bailey : 9/12/2008 1:07:36 PM

AIG's StockCharts.com's PnF bearish vert. count to $0.00 Link

Jeff Bailey : 9/12/2008 1:04:50 PM

I don't think I've EVER seen AIG #29

Jeff Bailey : 9/12/2008 1:04:28 PM

At last night's close AIG #29 weighted INDU/DIA/YM component ... 1.25% of total.

Jeff Bailey : 9/12/2008 1:03:17 PM

Shares of big insurer AIG continue free fall ... AP Story Link

Jeff Bailey : 9/12/2008 1:02:19 PM

Most Actives .... LEH $3.71 -12.08%, XLF $20.92 -2.51% (getting hit), QQQQ $43.14 -1.05%, IWM $71.58 -0.47%, AIG $12.72 -27%,

Jeff Bailey : 9/12/2008 12:59:29 PM

New D-Governor here in CO has a tax hike proposal in the works for us. First name is Bill. We call him "tax-Bill"

Jeff Bailey : 9/12/2008 12:56:36 PM

Election Day ... November 4th.

Jeff Bailey : 9/12/2008 12:55:03 PM

Check out that retail gasoline price heatmap ... see how there are distinct STATE color variations? Major topic with client in Michigan.

Jeff Bailey : 9/12/2008 12:54:08 PM

Chile Central Bank Sees Gasoline Tax Cut Reducing Inflation ... DJ- A gasoline tax cut approved by the Chilean congress this week will reduce the 2008 inflation rate between 0.2 and 0.3 percentage point, the central bank's head of research, Pablo Garcia, said Friday. Thursday, the Chilean central bank's four-month Monetary Policy Report estimated the 2008 inflation rate would be 8.5%. The annual inflation rate hit 9.3% in August. "This (tax cut) has already been incorporated into the outlook we released yesterday," Garcia told reporters. Late Thursday, the Chilean congress ratified a bill containing a package of government measures aimed at fighting inflation. In addition to the temporary tax cuts on gasoline, it also includes the elimination of taxes on electronic bank transfers and provides tax cuts for small and medium-sized firms. Finance Minister Andres Velasco, meanwhile, said the tax cut will likely go into effect Monday, shortly before the four-day Independence Day holiday weekend that starts next Thursday. "These measures boost production, and when there's more output, things cost less and inflation is contained," Velasco told reporters. Garcia said it was still too early to determine the impact of the other measures on inflation. The gasoline tax cut will be in effect until April 2010.

Jeff Bailey : 9/12/2008 12:53:32 PM

Interesting here ...

Jeff Bailey : 9/12/2008 12:52:53 PM

ECB Nowotny:

No room for complacency on inflation
Must remain in state of permanet alertness
Inflation rate won't fall below 2% in 2009
Sees downside risk to economic growth.

Jeff Bailey : 9/12/2008 12:51:05 PM

ECB's Nowotny making comments.

Jeff Bailey : 9/12/2008 12:50:12 PM

ff09f 98.07 ... 100- 98.07 = 1.93

Jeff Bailey : 9/12/2008 12:49:35 PM

Looked at Fed fund futures last night, with 13-week falling yesterday. Didn't really see "sign" of a cut.

Jeff Bailey : 9/12/2008 12:46:30 PM

Business Inventories ... US Census Bureau Link

Jeff Bailey : 9/12/2008 12:45:11 PM

Today's Global Econ Calendar Link

Jeff Bailey : 9/12/2008 12:39:22 PM

European ... Link

Jeff Bailey : 9/12/2008 12:38:53 PM

Asian markets finished ...

$NIKK 12.214.76 +0.93%

$HSI 19,352 -0.18%, $SSEC 2,079 +0.03% ... others Link

Jeff Bailey : 9/12/2008 12:36:59 PM

Currently ... FXE $141.93 +1.57%

FXY 92.64 -0.41%

FXB 179.22 +2.04%

Jeff Bailey : 9/12/2008 12:36:19 PM

Major Global Indices, Currencies, USO, GLD, HUI.X, OIX.X and XLF ... had to cut Wednesday's wrap short, but here's what I had Link

Jeff Bailey : 9/12/2008 12:33:13 PM

Nursing homes have many caretakers ...

Jeff Bailey : 9/12/2008 12:32:43 PM

What did asian markets do? European do?

Jane Fox : 9/12/2008 12:33:25 PM

VIX is now making new daily highs and screaming at us ES will start to sell off soon. Link

Jeff Bailey : 9/12/2008 12:32:19 PM

Fascinating major currency action ... Yen down, euro/pound up. Just the "opposite" of last few weeks.

Jeff Bailey : 9/12/2008 12:29:55 PM

DIA $114.28 -0.50% ... back to test yesterday's high before noon, holding above WKLY Pivot.

Jeff Bailey : 9/12/2008 12:28:45 PM

5-year yield ... bumped to 3.0, intra-day pullback finds sellers of bond at WKLY yield pivot 2.946%.

Jeff Bailey : 9/12/2008 12:26:21 PM

There ... CNBC mentioning pipelines to NE ... Was talking to client about that just last night. Many terminals along gulf too. Gets the product (if they're able) to St. Louis, Chicago, then on from there.

Jeff Bailey : 9/12/2008 12:19:36 PM

Linda (12:04:52) ... Just like trading ... no exit strategy, pay the consequences. Despite warnings, don't manage risk, pay the consequences if it does come to fruition.

I remember the people in nursing homes, counting on others to take care of them. Caretaker wasn't prepared, and those that needed their help, some paid with their lives. Terrible, terrible.

Jeff Bailey : 9/12/2008 12:16:04 PM

12:00 Internals found at this Link

Linda Piazza : 9/12/2008 12:09:15 PM

Neither the SPX nor the OEX have been able to maintain breakouts above potential resistance on 30-minute closes now at 1252 for the SPX and 579.40 for the OEX. We could see another test of potential support with a drawback down to the rising trendlines off yesterday's lows not surprising if it should happen. It's just chop right now.

Jeff Bailey : 9/12/2008 12:08:54 PM

GM, Ford climb on federal loan optimism ... AP Story Link

Jeff Bailey : 9/12/2008 12:05:57 PM

5-year yield has turned back higher ... +6.2 bp at 2.947%

Linda Piazza : 9/12/2008 12:04:52 PM

The problem with evacuations, Jeff, is two-fold. Those of us along the coast have literally watched newscasters exaggerating the effects of storms, so young people in particular but some older ones, too, have blown off warnings. The other problem is much more dangerous, however. Rita complicated the evacuation process. So many people died while being evacuated, including 28 people being evacuated from a nursing home and including the husband of one of my high school friends who was evacuated from a health care facility. Evacuees traveled 24 hours straight to drive from Port Arthur to the Dallas/Fort Worth area, where we then lived, including my mother-in-law and brother- and sister-in-law. Some got a few hours out but only a couple of miles away from their homes and turned back and that was for a storm hitting nearer Port Arthur, not Houston. Houston CAN'T be fully evacuated. It's the fourth largest city in the U.S. with congested streets in the best of times, and those evacuating from Galveston and such coastal cities are usually evacuating through Houston, too. Officials made calculated decisions about whom to evacuate and asked others to stay put. As of yesterday, there were competing reports, with Houston area newscasts telling residents it was too late and roads were too congested and they couldn't get out while Governor Rick Perry was appearing, grim faced, on television, saying that there would be terrible damage and there would be loss of life to those on the coast who chose to stay in single-level residential homes. My husband got my grandchildren out yesterday when he drove through Houston, but my daughter couldn't come at the time and even she, healthy and young, questioned yesterday evening whether she should attempt the trip here. She full well knows about those 24-hour drives with people stealing gasoline out of the car parked next to them at a roadside park so the drivers could rest for a few minutes. Would she be safer staying, when they're expected to get "only" up to 110 mile an hour winds in her zip code or risk getting on the road and maybe being stuck on the highway as Ike began coming in well in advance of the eye crossing land. Texas is a big state, but Ike will cover most of it, and you don't want to be in a car snaking along congested highways, even if you'd made it out to our area, which was two days ago projected to get anywhere up to Category 2 storm conditions but now is projected to get far less.

Jeff Bailey : 9/12/2008 12:01:14 PM

PetsMart (PETM) $27.09 -0.58% ... Drake the dog's favorite place to shop.

Jeff Bailey : 9/12/2008 12:00:18 PM

PetMed Express (PETS) $15.77 +0.12% ... strong last several months ... not sure though Link

Jeff Bailey : 9/12/2008 11:58:30 AM

Havana Cuba Link

Jeff Bailey : 9/12/2008 11:55:49 AM

OK Linda! You got the pantry stocked?

Jeff Bailey : 9/12/2008 11:57:37 AM

Home Depot (HD) $28.90 -2.03% ... photo #8? Link ... gott'a think some playing this. And this Link

Jeff Bailey : 9/12/2008 11:53:05 AM

Raise premiums on everyone else ...

Jeff Bailey : 9/12/2008 11:52:38 AM

Ah ... let the insurance take care of it ... if its paid up.

Jeff Bailey : 9/12/2008 11:51:54 AM

Must not be a MM subscriber .. didn't know a storm was coming.

Or waited to last minute, wasn't prepared. (wink)

Jeff Bailey : 9/12/2008 11:50:43 AM

Looks like water rising in Galveston ... Reuters Link

Jeff Bailey : 9/12/2008 11:48:27 AM

Kind'a like the AMEX and NYSE ... Brazil FULL of energy/mining ... sensitive.

Jeff Bailey : 9/12/2008 11:47:38 AM

DJ- Brazil stocks erase losses, rise on oil optimism

Jeff Bailey : 9/12/2008 11:43:27 AM

Q3 op-ex is next Friday.

Jeff Bailey : 9/12/2008 11:42:20 AM

VIX.X 25.22 +3.40% ..

Jeff Bailey : 9/12/2008 11:42:04 AM

Swing trade put exit alert! ... for the one (1) Wachovia Corp. WB Sep $15 Put (WB-UC) at the bid of $1.55.

WB $14.50 +1.54% ...

Jeff Bailey : 9/12/2008 11:39:51 AM

Wells Fargo (WFC) $34.32 +1.35% ... probes its January relative high and horizontal resistance.

Linda Piazza : 9/12/2008 11:38:16 AM

No, Jeff, I'm between Houston and Austin.

Jeff Bailey : 9/12/2008 11:37:59 AM

Linda! You're up in Dallas right?

Jeff Bailey : 9/12/2008 11:36:49 AM

Retail Gasoline Price Heatmap (@ 10:00 AM EDT) Link

One note here is that prices are reported by consumer purchases.

Linda Piazza : 9/12/2008 11:36:15 AM

The OEX and SPX are testing/breaking through potential resistance on 30-minute closes mentioned in an earlier post. The bounce has pushed the potential resistance higher, but it's now at about 1252.17 for the SPX and about 579.64 for the OEX. The SPX is already above the descending trendline off the 9/2 high. The OEX isn't quite there, however, with that line now at about 580.90. Bulls obviously are trying for a double-bottom confirmation, but neither the SPX nor the OEX has even yet confirmed a breakout above this important resistance much less above the confirming level at Monday's highs, with both the SPX and OEX hesitating as I type. If you're in bullish positions, enjoy the ride, and keep updating your profit-protecting plans. The markets certainly have a wall of worry to fight against this morning, don't they? I'm worried that the wall might topple over at any time, however.

Jeff Bailey : 9/12/2008 11:32:35 AM

IUX.X 247.25 -3.08% ... now you've got it.

Jeff Bailey : 9/12/2008 11:32:12 AM

That's a good one too ... they've got insurance ... as long as it's paid up. (wink)

Jeff Bailey : 9/12/2008 11:31:02 AM

I think Tab's got you long VLO. Not sure ..

Tab Gilles : 9/12/2008 11:30:55 AM

$VIX Link

$VXD Link

$VXN Link

$RVX Link

Jeff Bailey : 9/12/2008 11:30:12 AM

No gulf refiner facility exposure ... decline in supply and rising gasoline price vs. oil on near-term basis.

Jeff Bailey : 9/12/2008 11:29:19 AM

Yes, I agree ... TSO $19.02 +5.78% a good bull play in here.

Jeff Bailey : 9/12/2008 11:25:14 AM

Refiners "learned" too didn't they. Prepared. By shutting down some before, they won't blow out generators/equipment and all. Save their shareholders some pain.

Jeff Bailey : 9/12/2008 11:23:46 AM

Excellent, excellent quick review from CNBC regarding refiners ... I got you started about 3-weeks ago, but good info. "Makes sense" as to your EIA inventory and refiner capacity doesn't it?

See ... with Katrina and Rita, I didn't have that type of history. Now we/you do.

Tab Gilles : 9/12/2008 11:21:46 AM

The US Dollar is getting hit today, but is to be expected after a several week run-up.

Taking a look at the Dollar, NatGas, Crude Oil after the past year. Link

$WTIC $101.69; $NATGAS %7.64; natrual gas is cheap relative crude oil @ 13.3xs. Historically the ratio has average 9.2.

Jeff Bailey : 9/12/2008 11:20:14 AM

SPY $125.63 +0.09% ...

Jeff Bailey : 9/12/2008 11:19:56 AM

DIA $114.48 -0.33% ...

Jeff Bailey : 9/12/2008 11:19:30 AM

Yen CurrencyShares (FXY) $92.65 -0.40% ... probing conventional 19.1% from above.

Jeff Bailey : 9/12/2008 11:18:35 AM

Gulf; Refiner Capacity (near-coast/partial) Link

Jeff Bailey : 9/12/2008 11:17:00 AM

CNBC ... reporting Ike could be as "devestating" as Katrina ... so history looks to be in play. Did you do your homework? Good job!

Tab Gilles : 9/12/2008 11:13:17 AM

Oil Service Holders (OIH) $163.83 +$4.50 (2.84%) Link

The suggested January 2009 $155 call option (OIH-AK) is currently trading at $19.45 Bid - $19.75 Ask [suggested 9/10 around $14]. Targeting the 21-ma $175 price level.

Jeff Bailey : 9/12/2008 11:13:14 AM

Exxon/Mobil (XOM) $77.03 +1.94% ... producer/refiner ... about 949,100/bd capacity Houston and Port Aurthur

Jeff Bailey : 9/12/2008 11:10:29 AM

Valero (VLO) $35.30 +6.97% ... hurricane trade methodology here is stop under today's low.

375,000 bbl/day total capacity Tx City and Houston

Linda Piazza : 9/12/2008 11:10:03 AM

Jeff just posted that Ike was 195 miles offshore. Here's what a Houston Chronicle article said this morning about Surfside Beach, a coastal community: "More than half of this island community was already submerged as of 8:00 a.m. Waters were nearing the tops of mailboxes and stop signs as darkening skies threatened rain. Water was streaming through the windows of ground-level homes." Police and firefighters were using a large dump truck to make a sweep through neighborhoods, determining if any who had decided to ride out the storm were changing their minds, but they said that would be their last sweep until after the storm. The fire station itself was flooded.

Jane Fox : 9/12/2008 11:06:30 AM

NEW YORK (MarketWatch) -- Interest-rate futures are showing a dramatic increase in bets that the Federal Reserve will lower its benchmark rate in coming months amid renewed concern about the mortgage market, banks' viability and consumer sentiment. As recently as Sept. 4, futures traders saw no likelihood of a rate cut this year. The U.S. central bank next meets to decide whether to change its 2% interest rate on Sept. 16. Futures show a 17% chance borrowing costs will be cut by a quarter percentage point at that meeting. Assuming that doesn't happen, the November futures contract shows a 28% chance of a cut of the same size at the Oct. 31 meeting.

Jeff Bailey : 9/12/2008 11:06:21 AM

I'm tabulating current offline ....

Jeff Bailey : 9/12/2008 11:05:53 AM

Within Sweeny-Port Aurther (roughly Galveston) refiners have approx. 3.3 million b/d capacity.

Linda Piazza : 9/12/2008 11:01:25 AM

I'm still trying to find some pattern I can point out, something other than the chop that's usually associated with a right-shoulder formation. I can't find anything. I still see the potential resistance on 30-minute closes at 1251.50-1252 on the SPX and 579.40 on the OEX. I still see the potential for support on 30-minute closes near 1238 on the SPX and 573 for the OEX. Below that, there's potential support on the rising trendlines off yesterday's low. Just because there's the potential for an inverse H&S formation shouldn't be taken as a sign that there will definitely be a confirmation and a bullish outcome.

For now, then, I haven't been surprised to see the choppy nature of the price pattern. It fits with the right shoulder period. Unfortunately, the left shoulder took more than a single trading day to form, too, so it could be that we won't see resolution, either in the form of confirmation or in the form of an invalidation, until next week.

Jeff Bailey : 9/12/2008 10:59:56 AM

NHC: Ike now 195 miles from Galveston, TX

Jeff Bailey : 9/12/2008 10:59:18 AM

NHC: Ike winds remain at 105 MPH

Jeff Bailey : 9/12/2008 10:58:03 AM

S&P Retail Index (RLX.X) 405.10 -1.92% ... was 351.59 on 07/31; was 396.05 on 08/29

Jeff Bailey : 9/12/2008 10:55:57 AM

Retail HOLDRs (AMEX:RTH) $98.27 -1.93% ... was $88.56 on 07/31; was $95.81 on 08/29.

Jeff Bailey : 9/12/2008 10:54:27 AM

UGA $54.55 +3.31% .... was $56.73 on 07/31; was $54.82 on 08/29.

Jeff Bailey : 9/12/2008 10:53:02 AM

GSG $54.42 +1.60% ... was $64.93 on 07/31; was $60.07 on 08/29. (see Wednesday's Wrap) MM commentary

Jeff Bailey : 9/12/2008 10:51:16 AM

Retail sales slide, producer prices drop in August ... AP Story Link

Jeff Bailey : 9/12/2008 10:49:36 AM

Manpower (MAN) $46.51 +0.28% ...

Jeff Bailey : 9/12/2008 10:49:10 AM

PGN Deployment - (partial) ... Progress Energy (PGN) is sending more than 800 company and contract workers from the Carolinas and Florida to Texas to assist utilities there with expected damage and power outages from Hurricane Ike. The company's deployment of 385 employees and 437 contract personnel is larger than deployments made in support of utilities in Louisiana and Texas after Hurricanes Katrina and Rita in 2005. Workers are expected to be in Texas supporting utilities there for at least two weeks, based on anticipated damage, as well as lingering effects in the region from Hurricane Gustav. Progress Energy is sending a total of 380 people from Florida and 442 from the Carolinas. The teams include company line & service crews, transmission line technicians and support personnel, as well as contract line and tree crews, along with vehicles and equipment. Some contract crews have already begun the trip, which is 800 to 1,200 miles, depending on the crew's departure location. Company crews will be leaving from numerous locations Sunday morning and will report to various locations next week, based on the storm's impact.

Jeff Bailey : 9/12/2008 10:46:39 AM

Progress Energy (PGN) $44.00 -0.18% ...

Jeff Bailey : 9/12/2008 10:46:05 AM

PRN- Progress Energy: Sending crews, contractors to assist in Ike restoration.

Jeff Bailey : 9/12/2008 10:45:08 AM

Semiconductor HOLDRs (SMH) $25.52 -1.31% ... Amer Tech cutting to "underperform"

Jeff Bailey : 9/12/2008 10:41:15 AM

Looks like roughly $2/barrel positive hurricane impact built in on crude oil

NYMEX vs. Brent

Linda Piazza : 9/12/2008 10:41:03 AM

Much of the West Beach area of Galveston is already flooded and the storm is still way out in the Gulf. This is the problem with Galveston, an island, with the exit being shut off well in advance of the storm. This led to the massive (8,000-10,000 estimated) deaths in 1900, when people couldn't evacuate once it became clear how dangerous the storm was going to be. Officials estimate that only about half of the population evacuated this time.

Jane Fox : 9/12/2008 10:36:02 AM

The VIX and ES (S&P futures) are still out of sync and the AD line is still under 0 at -600. This is not bullish folks. Link

Jeff Bailey : 9/12/2008 10:35:28 AM

Sector winners HUI.X +4.75%, XNG.X +2.93%, OIH +2.70%, OIX.X +2.47%, BKX.X +0.07%

Jeff Bailey : 9/12/2008 10:33:45 AM

NYSE Comp edges green 8020.35 +0.11%

NASDAQ Comp 2,240.64 -0.77% ...

Jeff Bailey : 9/12/2008 10:28:43 AM

10:00 Internals found at this Link

Jeff Bailey : 9/12/2008 10:19:58 AM

Would strong suggest traders long rb08v take some profits here at WKLY R2

Jane Fox : 9/12/2008 10:14:43 AM

WASHINGTON (MarketWatch) -- U.S. consumer sentiment rose to its highest level this year in September as gasoline prices fell, according to media reports on the University of Michigan/Reuters consumer sentiment index released Friday. The index rose to 73.1 in September from 63.0 in August. Economists were predicting a slight gain to 64.

Linda Piazza : 9/12/2008 10:10:28 AM

The SPX closed its first 30-minute period above its 30-minute 9-ema, now at about 1236, but the OEX didn't. The OEX dropped slightly below it. At this point, when a right-shoulder formation is perhaps being chopped out, price action typically becomes particularly choppy and difficult to guage. At this point, I wouldn't be surprised to see deeper pullbacks, perhaps to the rising trendlines off yesterday's lows, but neither would I be surprised to see the indices just chop around. The OEX would need sustained values above about 582 to really break out to the upside. The SPX might need to sustain values above 1250.

Jane Fox : 9/12/2008 10:08:29 AM

VIX is climbing as ES is climbing. This is not the way these two work.

Jane Fox : 9/12/2008 10:04:16 AM

U.S. Sept. UMich consumer sentiment index 73.1 vs. 63.0 Aug.

Jane Fox : 9/12/2008 10:00:42 AM

The S&P futures were making new daily lows that were supported by the VIX?s new daily highs. These were supported by the AD line and volume making new daily lows, all bearish. However, the only fly in the proverbial ointment is the TRIN is falling as well and that is bullish.

Jane Fox : 9/12/2008 9:49:57 AM

BOSTON (MarketWatch) -- Ladenburg Thalmann analyst Richard Bove in a research note Friday wrote that Bank of America Corp. will win the auction for Lehman Brothers , arguing there is a "natural fit" between the two firms. "Lehman needs Bank of America to lower its borrowing costs. It also needs the bank to portfolio its commercial real estate loans," the analyst wrote. Bove said a Lehman deal would be a "major plus" for Bank of America that would boost its presence in fixed-income, investment banking and management, research and other areas. He has buy ratings on both Bank of America and Lehman.

Linda Piazza : 9/12/2008 9:46:40 AM

Bears should consider the possibility that the OEX and SPX could pull back to some right-shoulder level and then stabilize for several hours, with possibilities for right-shoulder levels being listed in my 9:19:27 post. Bulls should consider the possibility that they won't stabilize.

Linda Piazza : 9/12/2008 9:39:06 AM

Keltner outlook on the A/D line: The A/D line is negative, of course, but the setup is not as negative as I expected. The A/D line has moved either side of the bullish/bearish benchmark, with that now at about -700. There's still plenty of time for the A/D line to bounce back above that by the end of the first 15-minute period or to drop down and violate its own rising trendline off yesterday's low, with that at about -1280. The A/D line is now at -1005.

Jane Fox : 9/12/2008 9:36:18 AM

Remember at 9:55ET we have the mid September Consumer Confidence number out.

Jane Fox : 9/12/2008 9:33:52 AM

Crude made a low yesterday of 100.18 and so far that low has held and I suspect it will for a while but I still do not have the MACD cross so I will not be going long Crude until I do. Even then I will not be holding the position very long. Link

Jane Fox : 9/12/2008 9:31:13 AM

I am adjusting my overnight charts because we have new ON lows.

Linda Piazza : 9/12/2008 9:19:27 AM

I had previously announced that I would take the day off as our house begins to fill with evacuees and we make our own common sense preparations. However, I see that Keene has been called away. I'll do my best to post when I can. I'm running behind because I hadn't anticipated posting at all.

We are facing a hurricane here in Texas, and our financial system is facing a hurricane of its own, with futures turning down sharply again. The TED spread has been rising sharply this week and is at 1.25 as I type. For newbies, the TED spread measures default risk.

As the day ended yesterday, the OEX was jammed up against potential resistance on 30-minute closes near 579.50; the SPX, just under next potential resistance on 30-minute closes at 1251.98. Both had further potentially strong resistance if they were to break through, but this morning's futures actions don't show a promise of a quick breakthrough anyway. The OEX also ended the day jammed against the daily 9-ema and the SPX, just below its version. Both preserved lower targets on the daily chart, at about 552.50 on the OEX and about 1199 on the SPX. I've been urging that OEX traders factor that vulnerability into their trading plans while keeping in mind that the charts are as disorganized as I've seen them in a long while and that anything can and does happen. Including a surprise gain today.

That doesn't look like the high odds occurrence this morning, though. If the OEX and SPX pull back first thing this morning, where might those pullbacks take them? The OEX has historical and Fib potential support near 571.40-571.50, and then potential Kelnter support on 30-minute closes from 572.25-573.61, so those would be the first places to look for potential support on 30-minute closes on the OEX. For the SPX, there's potential Fib and historical support near 1246.60 and then potential Keltner support on 30-minute closes near 1238, so those are the first places to watch for potential support on the SPX.

I'm not at all sure that this will hold as support, as we have to see how things set up this morning. Both charts sport potential inverse H&S formations, and so it's possible that the OEX and SPX will pull back and then spend a few hours chopping around before we know next direction. Or it's possible that they will head straight down, perhaps below rising trendlines off yesterday's low now at about 1231 on the SPX and about 568.80 on the OEX.

Jane Fox : 9/12/2008 8:51:30 AM

The Producer Price Index for Finished Goods declined 0.9 percent in August, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed advances of 1.2 percent in July and 1.8 percent in June. At the earlier stages of processing, prices received by manufacturers of intermediate goods fell 1.0 percent in August after rising 2.7 percent in the prior month, and the crude goods index dropped 11.9 percent following a 4.2-percent increase in July.

Leading the downturn in prices for finished goods, the index for energy goods fell 4.6 percent in August after climbing 3.1 percent in July. Prices for goods other than foods and energy advanced 0.2 percent following a 0.7-percent rise in the previous month. The index for consumer foods increased 0.3 percent in August, the same rate as in July.

Jane Fox : 9/12/2008 8:49:30 AM

WASHINGTON (MarketWatch) - U.S. retail sales unexpected fell in August, pushed lower by plunging gasoline prices, according to Commerce Department data released Friday.

Seasonally adjusted retail sales fell 0.3% in August, much worse than the 0.4% gain expected by economists surveyed by MarketWatch.

Sales in June and July were also revised lower by a total of 0.6 percentage points, making consumer spending significantly weaker this summer than earlier believed despite the infusion of about $100 billion into consumers' pocketbooks from Washington.

Sales are up 1.6% in the past year. The figures are not adjusted for price changes.

Sales in August were boosted by a rebound in auto sales, which rose 1.9%, the biggest increase in a year. Excluding autos, retail sales fell 0.7%, the worst performance this year.

Keene Little : 9/12/2008 7:44:33 AM

I will be away from the market at least for the morning. My parents have asked for my help dealing with my father's sister's death last night. Good luck today and trade carefully--let the key price levels guide you.

Jeff Bailey : 9/12/2008 4:24:37 AM

YM 11,465 waking up a bit here as crude oil livens up above $102

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