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Jeff Bailey : 9/18/2008 1:09:38 AM

Off to bed.

Jeff Bailey : 9/18/2008 1:09:28 AM

Asian markets Link ... $NIKK -3.27% at 11,365, $HSI -7.38% at 16,336 and $SSEC -5.84% at 1,816.

Jeff Bailey : 9/18/2008 1:07:22 AM

YM 10,686 ... up 22 points from Wednesday's settle.

Jeff Bailey : 9/18/2008 1:06:06 AM

Let's at least grab Cooper down to HCA tonight Link

Jeff Bailey : 9/18/2008 12:57:12 AM

Here's PHF's monthly uncertified holdings as of 08/31/08 (.pdf file) Link

I don't see any American Intl. Group (AIG) debt, or Citigroup (C) debt,

I see some Ford (F) and Gen Motors (GM), some GMAC, some Sirius Satellite (SIRI) some Six Flags (SIX), some Thornburg Mtg

Can grab a screen capture, then check shares/value next month to get an observation of various debt values.

Jeff Bailey : 9/18/2008 12:42:31 AM

You may have a "junk bond" fund that you follow, with pretty good disclosures. PHF is one I've followed, invested/traded in for more than a decade. Just one part of the market (junk bond).

The way I look at "bonds" is like many. WHAT IS THE YIELD, and what's the RISK?

PHF could cut the MONTHLY dividend from $0.075/share (has been $0.075/share since Sep'03).

Did cut from $0.14 to $0.11/share not long after (shall we never forget) as Treasury bond YIELDS plunged and for most part, have stayed historicaly low.

Should PHF cut its monthly dividend, to say ... $0.05/share/month, SEC yield would be $0.05 x 12months = $0.60/year.
Then $0.60/$5.55 = 10.8%

If it doesn't, the $0.90/$5.55 = 16.21%/year.

Anyway ... how I would teach traders/investors to look at bonds.

Jeff Bailey : 9/18/2008 12:18:20 AM

Pacholder High Yield (PHF) in U.S. Market Watch. Here's the most recent "Fact Sheet" as of 08/31/08 (.pdf file) Link

Here's a Q&A regarding Auction Rate Cumulative Preferred Shares from 08/27/08. (.pdf file) Link

Today's sharp decline may be an example of "liqudity" issue regarding "junk bonds" themselves.

Note that 08/31/08 largest long-term holding exposure was Polyone Corp. @ 1.5% of total.

Note that short-term holding exposure not disclosed. Could have some LEH, AIG.

Any way, I can't see anything that "sticks out" as unusual for a junk bond fund.

Jeff Bailey : 9/17/2008 11:53:22 PM

Hey Samsung! IBM! HPQ! INTC! Check out NVDA $10.00 +4.27% ...

With two (2) of the UVA-IX about to expire, I'd accept an offer of $30. Got to offer it before the close on Friday though.

Jeff Bailey : 9/17/2008 11:47:51 PM

Hey! What did you think of Samsung's offer to buy SanDisk? SanDisk calling it "opportunistic attempt to take advantage of SanDisk's current stock price."

I say SNDK should then "dutch auction for $26.00" if they think stock is so cheap.

Samsung ... hey, "buy low, then sell high"

Jeff Bailey : 9/17/2008 11:43:50 PM

Cullen Frost Bankers (CFR) $56.81 -3.10% ... A name some long-time subscribers may know. I mentioned this stock YEARS ago.

When I was brokering, I had a client that had just retired from Wells Fargo (WFC) merger/acquisition group. He was a number-cruncher and ran numbers on banks that WFC might consider acquiring.

Of course, he may have been biased, but CFR was a stock he spoke highly of. "Excellent risk manager" and fundamental company.

WFC darned near a 52-week high. CFR blipped one today.

That's "something" in this market environment.

Jeff Bailey : 9/17/2008 11:38:40 PM

Email comment/observation (09/16/08) ... I am surprised that no one is mentioning that with all this mess in financials that the XLF is making a significant higher low.

Jeff's Reply ... XLF $0.50 and $1.00 box Link ... On Tuesday, it was difficult to assume a "higher low." However, today's 3-box reversal back up to $19.50 (XLF finishes $18.55), does show a "higher low."

I'm following (housing data too, housing and financials is where the "mess" is at).

Will note here that XLF pretty much "stopped dead" at $19.50 where it gave its recent "sell signal" at $19.50.

Good eye though. Also monitoring individual names ... JPM, WFC, BAC, WB, C, etc. etc.

I did profile a 1/4 position short in the Regional Bank HOLDRs (RKH) $101.56 -7.88% Link today (Wednesday at 11:40:53) at $101.16. Stop is $111.00.

I say target should be $87.

From $101.16 and assuming no gap against the bear, that's RISK of $9.84 (to stop) and REWARD of $14 to trend (bearish vertical count ... O's from $110 to $99 is to $84).

Can see some support at $95.00 .

As noted today, I looked at some RKH puts and they were "jacked premiums." RKH Oct. $110 Puts (RKH-VB) $6.90 x $11.20 and thin at 37 contracts today. With premiums "jacked," best to stay AT, or IN the money. If I went offer at $11.20, then that's $1,120. I think 1/4 short in RKH better strategy at this point.

As mentioned at profile, 1/4 position for $10K account is 24 shares of RKH.

Keene Little : 9/17/2008 11:27:56 PM

Let's try again on the pivot table (the link on the first post didn't work): Link

Jeff Bailey : 9/17/2008 11:05:12 PM

BPALL from Dorsey/Wright saw a net loss of 1.59% of stocks to reversing lower PnF sell signals on Wednesday. Still "bull correction" status at 26.47% (28.00%). A measure of 24.00% would be "bear confirmed" status.

It would currently take a reversing higher measure of 34.00% for this VERY broad (roughly 5,000 issues) to achieve "bull confirmed" status. BPALL Link

Jeff Bailey : 9/17/2008 10:53:17 PM

World Bullish % Bell Curve at this Link

Jeff Bailey : 9/17/2008 10:44:06 PM

Major Global Equity Indexes, Currencies, USO, GLD, HUI.X, OIX.X and XLF at this Link

Keene Little : 9/17/2008 11:28:21 PM

Wednesday's finish was not bullish and in fact quite bearish. I keep saying the bulls need to rally first thing in the morning and keep it going and it's no different for Thursday. Rallies keep getting sold into and that's the way to go until it doesn't work any more. The waterfall decline is set to get started on SPX as I've been showing on its 120-min chart: Link

The wave count on the chart is uber bearish with several degrees of 3rd waves to kick off to the downside. When I usually see this many sets of 1st and 2nd waves to the downside I usually don't believe it and start looking at it as an ending pattern instead and to start looking for a bottom. This time it's different and this one looks real. This is a setup for some very strong selling (equivalent to the DOW losing 2000 points before the month is out). Whether it will play out as depicted I can only speculate but be forewarned about the potential here.

But the techs show me a slightly different and not nearly so bearish pattern, or at least not yet. The NDX 120-min chart shows price making an orderly decline inside a parallel down-channel from mid August: Link . The bottom of the channel is near 1615 tomorrow morning and if it holds look for a bounce at least back up to the mid line of the channel (or consolidate sideways over to it) before proceeding lower again.

However, as noted on the chart, if the market is to sell off hard then NDX will likely break below the bottom of the down-channel. That would be very bearish and would confirm the worst. It would say that it too is starting to waterfall lower (breaking below down-channels is one of the ways you know selling is starting to accelerate). Keep an eye on this one on Thursday if it makes it down there.

OI Technical Staff : 9/17/2008 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 : 9/17/2008 7:22:42 PM

Janus Twenty Fund (Mutual: JAVLX) 58.92 -4.39% (per Wednesday's 03:16:54 PM EDT).

Jeff Bailey : 9/17/2008 6:19:40 PM

Remember! one (1) contract = 100 underlying security.

Jeff Bailey : 9/17/2008 6:18:49 PM

CBOE reports 9.73M contracts changed hands on Wednesday ... DJ- The Chicago Board Options Exchange, or CBOE, said Wednesday that 9.73 million contracts changed hands, the busiest trading day in its 35-year history The Chicago options marketplace and creator of listed options said the previous record was 9.24 million contracts set on Aug. 16, 2007, according to a press release attached to a Securities and Exchange Commission filing. CBOE said though no individual contracts surpassed previous daily volume records, the Standard & Poor's 500 Index options contract added a reported 1.9 million contracts Wednesday, just less than the 2 million-contract volume record set on Aug. 16, 2007. CBOE is regulated by the SEC.

Jeff Bailey : 9/17/2008 6:16:17 PM

That'll have to be it for now ... get started on Wrap ... chop chop!

Jeff Bailey : 9/17/2008 6:15:52 PM

Screen capture CME's Feb'09 Regional Housinf futures Link

Jeff Bailey : 9/17/2008 6:10:34 PM

Screen capture CME's Nov'08 Regional Housing futures Link

Jeff Bailey : 9/17/2008 6:06:29 PM

Closing Internals at this Link

Jeff Bailey : 9/17/2008 6:01:28 PM

Getting as much info as possible ...

Jeff Bailey : 9/17/2008 6:00:33 PM

Closing Money Flows for Wednesday with Tuesday's Link

Jeff Bailey : 9/17/2008 5:53:44 PM


dj reports 330 NL

Jeff Bailey : 9/17/2008 5:54:21 PM

NYSE 52-week highs: BOH, BKE, CB, CFR, EBS, EBS, GUT (Utility trust), GIS, THG, K (Kellog), NJR, ONB

PowerShare ADZ, BOM, BOS, SZO and PTD

Per yesterday's NYSE NH observation.

DJ reports 1,238 NL

Jeff Bailey : 9/17/2008 5:48:30 PM

DJ- Nigeria: Suspends operations of independent TV stations

Jeff Bailey : 9/17/2008 5:46:47 PM

DJ- US Treasury offers 20-day $30 Bln CMB

Jeff Bailey : 9/17/2008 5:46:13 PM

DJ- US Treasury offers 76-day $30 Bln CMB

Jeff Bailey : 9/17/2008 5:45:02 PM

DJ- US Treasury Cash Management Bill auction to be held Thursday

Jeff Bailey : 9/17/2008 5:30:10 PM

Closing U.S. Market Watch at this Link

"rational" = precious metals and $HUI.X (commodity/equity)

Some "irrational" = energy and $OIX.X and $XNG.X (commodity/equity).

Aversion to RISK ... $IRX.X and PHF (difficult to know for certain market-to-market of all bonds).

Jeff Bailey : 9/17/2008 4:59:50 PM

DXY's 04:00 tick was 78.09 ... -1.39% from yesterday's 04:00 tick.

Jeff Bailey : 9/17/2008 4:58:15 PM

SPX finished 1,156.39 -4.71% ...

SPY finished $116.61 -4.49% ...

10-year Yield ($TNX.X) finished 3.410% ...

Jeff Bailey : 9/17/2008 4:56:20 PM

S&P P/E ratio at 13.59, down from 14.26 ... DJ- The price/earnings ratio of the Standard & Poor's 500 Index at the close of trading Wednesday was 13.59.

On Tuesday, the ratio ended at 14.26.

The price/earnings ratio for the S&P 500 measures the index's closing level divided by the index's total earnings, as reported under generally accepted accounting principles, or GAAP, for the most recent year.

In 2007, the most recently reported year, S&P 500 companies reported earnings of $85.12 a share.

Jeff Bailey : 9/17/2008 4:54:20 PM

DJ- Merrill: US Stocks, dollars preferred over emerging markets

Jeff Bailey : 9/17/2008 4:53:26 PM

DJ- NYSE suspends trading of Lehman shares, moves to delist

Jeff Bailey : 9/17/2008 4:52:42 PM

DJ- Brazil stocks dive to end -6.7% lower as investors seek haven

Jeff Bailey : 9/17/2008 4:51:18 PM

dj- Citizens Financial to record $2.2M-$2.5M charge from Freddie investments

Jeff Bailey : 9/17/2008 4:50:13 PM

CKE Restaurants (CKR) $11.73 -11.40% ... $12.02 on headline numbers.

Jeff Bailey : 9/17/2008 4:49:27 PM

DJ- Washington Mutual Puts itself up for Auction

Jeff Bailey : 9/17/2008 4:48:39 PM

BBC- Lloyds TSB to merge with HBOS ... Lloyds buys HBOS for 232p a share.

Jeff Bailey : 9/17/2008 4:47:13 PM

NYT- Morgan Stanley may be mulling merger with Wachovia

Keene Little : 9/17/2008 3:59:38 PM

If no bounce into the close then we could see a real quick one tomorrow morning (so no gap down) that immediately gets sold into, and hard. A bounce to about SPX 1175 perhaps and then roll over. It's going to get very nasty from here.

Keene Little : 9/17/2008 3:55:42 PM

We should get a little bounce into the close, maybe, in the final minutes and then immediately lower tomorrow morning.

Tab Gilles : 9/17/2008 3:54:45 PM

Weekly EIA Report: Link

Keene Little : 9/17/2008 3:54:01 PM

One thing to understand about the price pattern as we head into the close--it's now set up for a gap down opening and a very strong decline (no gap fill). That's not a guarantee but that's the setup.

Jeff Bailey : 9/17/2008 3:42:42 PM

Nice little trade ... keep up the hard work. See you after the close!

Jeff Bailey : 9/17/2008 3:42:16 PM

YM 10,699

Jeff Bailey : 9/17/2008 3:42:07 PM

YM short target alert! 10,705

Jeff Bailey : 9/17/2008 3:41:00 PM

YM short lower stop alert! ... to 10,730

YM 10,714

Jeff Bailey : 9/17/2008 3:40:13 PM

YM short finger on the button alert! ... with YM 10,725

Keene Little : 9/17/2008 3:40:11 PM

If SPX now drops below 1173 (62% retracement of this afternoon's rally) it's a heads up that today's low will break. Below 1168 and it will be almost a guarantee it will break. Well, there are no guarantees in trading.

Jeff Bailey : 9/17/2008 3:39:46 PM

19.1% is your target.

Jeff Bailey : 9/17/2008 3:39:35 PM

Just above you 38.2% "dynamic"

Jeff Bailey : 9/17/2008 3:39:09 PM

YM short lower stop alert! ... to 10,770

YM 10,753

Jeff Bailey : 9/17/2008 3:36:22 PM

Just above your 50% "dynamic"

Jeff Bailey : 9/17/2008 3:36:06 PM

YM short lower stop alert! ... to 10,810

YM 10,789

Jeff Bailey : 9/17/2008 3:34:52 PM

NYSE a/d 155 / 2,735

Jeff Bailey : 9/17/2008 3:34:26 PM

YM short lower stop alert! ... to even.

YM 10,758

Jeff Bailey : 9/17/2008 3:33:41 PM

YM short stop and target alert! 10,842. 10,705

Jeff Bailey : 9/17/2008 3:32:45 PM

YM short alert! here at 10,810.

Jeff Bailey : 9/17/2008 3:30:51 PM

NASDAQ a/d 527/2,423

Jeff Bailey : 9/17/2008 3:30:35 PM

NYSE a/d 198/2,690

Jeff Bailey : 9/17/2008 3:29:44 PM

DJ- Key Interest Rates at 03:00:01 PM EDT Link

From 1-month to 30-year. See bottom

Jeff Bailey : 9/17/2008 3:27:50 PM

Oh my! ... Seeing end-of day dj- "Fed funds currently quoted 2.50% bid, 3.00% asked and last traded 2.75%

Jeff Bailey : 9/17/2008 3:26:04 PM

Names I post with exposure or "I know the name" type of stocks.

Jeff Bailey : 9/17/2008 3:24:10 PM

Deleting earlier post regarding 5-6 pages. As I open each page, see a lot of "repeat" Lehman exposure

Jeff Bailey : 9/17/2008 3:21:29 PM

Wells Fargo (WFC) $34.93 (unch) ... dj- Lehman exposure: $199 million, including $109 million in notes and $90 million in preferred stock; $50 million in unsecured counterparty exposure; no direct lending exposure Date of disclosure: Sept. 15 Notes: Wells Fargo will record a non-cash charge to third-quarter earnings.

Jeff Bailey : 9/17/2008 3:20:06 PM

Exelon (EXC) $63.36 -3.42% ... dj- Lehman exposure: less than $30 million pretax direct exposure to Lehman Brothers Commodity Services Inc.; $7.6 billion in credit facilities with lenders including Lehman Brothers Bank (Lehman's commitment was $238 million at Sept. 12) Date of disclosure: Sept. 15 Notes: Exelon said it won't see an adverse material effect from Lehman's bankruptcy filing.

Jeff Bailey : 9/17/2008 3:19:20 PM

Washington Mutual (WM) $2.34 +0.86% ... dj- Company: Washington Mutual Inc. (WM) Lehman exposure: de minimus trading exposure Date of disclosure: Sept. 16

Jeff Bailey : 9/17/2008 3:17:58 PM

UBS Ag (UBS) dj- Lehman exposure: direct and counterparty exposures, net of hedges, "substantially closed out" Date of disclosure: Sept. 16 Notes: UBS doesn't expect the costs associated with closing its Lehman exposure to exceed $300 million.

Jeff Bailey : 9/17/2008 3:16:54 PM

JAVLX I think ... not sure. Going top of mind.

Jeff Bailey : 9/17/2008 3:15:50 PM

Janus Capital Group (JNS) $22.61 -3.00% ... Lehman exposure: 1.5% of Janus Twenty Fund's assets at end of 2Q Date of disclosure: Sept. 16

Jeff Bailey : 9/17/2008 3:15:07 PM

Hertz (HTZ) $8.48 -7.98% ... "immaterial"

Jeff Bailey : 9/17/2008 3:14:13 PM

Ford Motor (F) $4.84 -4.53% ... dj- Lehman exposure: a Lehman affiliate committed $890 million under an $11.5 billion revolving credit facility; another unit provides $238 million under $16.3 million facilities supporting the retail securitization program of Ford Motor Credit Co. LLC. Date of disclosure: Sept. 16

Jeff Bailey : 9/17/2008 3:13:26 PM

Then you 've got ...

Citigroup (C) ... "modest exposure" as of 09/16/08

Keene Little : 9/17/2008 3:12:41 PM

Another trend line that SPX is dealing with is the one along the lows since August 13th, shown on the 120-min chart: Link . These trend lines will often act as resistance once broken. So that one and the broken up trend line from yesterday is where SPX is struggling to get through (slightly above them at 1190 as I type).

Above yesterday's high near 1213 would be a heads up that something more bullish is happening and above last Friday's high near 1255 would definitely be bullish. Let's see if the bulls can at least get it up to 1200.

With this last push higher the move up from this afternoon's low is now a completed 5-wave move and either finishes the a-b-c bounce off the mid-day low (in which case down we go again) or else we'll only get a pullback to correct this afternoon's rally before proceeding higher again.

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

Good gravy ... no wonder NOBODY can really get their arms around all of this.

Jeff Bailey : 9/17/2008 3:11:19 PM

Petroleum Dev. (PETD) $41.07 -1.25% ... only energy-related NDX/QQQQ component ... $21.6 million in LEH senior notes as of 09/17/08. Since 08/31, external managers sold $3 million of LEH senior debt and realized $1.3 million in proceeds on the sale.

Jeff Bailey : 9/17/2008 3:09:21 PM

Dynegy (DYN) $3.36 -14.72% ... $70 million LEH commercial paper exposure. $850 million LOC facility.

Jeff Bailey : 9/17/2008 3:07:56 PM

Not a "consolidated list" ... ARM with about 8 lines of text following.

Bank of China with 12 lines of following.

Jane Fox : 9/17/2008 3:06:27 PM

My goodness gracious look at the Gold. Geesh that MACD divergence I was talking about yesterday really did pay off. Link

Jeff Bailey : 9/17/2008 3:05:12 PM

IRX 0.02%
5-year 2.494% down 17.7 bp
10-year 3.410% down 8.1
30-year 4.081% down 1.4 bp

Jane Fox : 9/17/2008 3:04:59 PM

The more I hear and read about the AIG deal the more I think it was the right move. The government is lending this company $85billion so they will not go out of business before they can sell off their assets in an orderly manner. This is a 2 year loan at 8% libor which equates to around 11%.

The government is allowed almost free rein in replacing senior management and in deciding which assets are to be sold. I think it is the right thing to do because initially the tax payers will foot the bill but in the end we have a much better chance of making money than losing it.

Jeff Bailey : 9/17/2008 3:04:07 PM

Treasury's closed.

Jeff Bailey : 9/17/2008 3:03:36 PM

DJ- Fed TSLF auctions draw heavy demand

Partial- With U.S. financial markets under severe strain, investment banks flocked to the New York Federal Reserve's auctions of Treasury securities Wednesday. The Fed held two Schedule 2 Term Security Lending Facility auctions Wednesday as it transitions to a new schedule for this facility, which was expanded over the weekend. Demand at both was especially strong. The Fed's second Schedule 2 TSLF auction Wednesday - for 28 days - drew a hefty $71.25 billion in bids versus the $35 billion that was on offer. The Fed accepted $34.998 billion of the bids from the primary dealers - the group of firms that deal directly with the Fed - in return for a broad range of collateral, known as Schedule 2. The auction's stop-out rate - the lowest accepted fee rate for which bids were accepted at the auction - was 3.00%, well above the 0.25% minimum fee that was set in advance by the Fed. The bid to cover, an indication of demand, was 2.04. Both the stop-out rate and the bid to cover at the 28-day auction were the highest that have been seen since the Fed first launched the TSLF. In Wednesday's first Schedule 2 auction - for 14 days - $64.35 billion in bids were submitted versus the $35 billion on offer. The Fed accepted $35 billion in bids. The auction's stop-out rate - the lowest accepted fee rate for which bids were accepted at the auction - was 2.50%, also well above the 0.25% minimum fee that was set in advance by the Fed. The bid to cover was 1.84. The Schedule 2 auctions, which before accepted only Treasurys, agency securities, and AAA-rated mortgage-backed and asset-backed securities, were expanded over the weekend to help further calm unsettled financial markets. Schedule 2 auctions now include all investment-grade debt. The total amount on offer under the TSLF was increased to $200 billion from $175 billion. Over the weekend, the Fed also announced Schedule 2 TSLF auctions will now be held every week; before they were conducted once every two weeks. Schedule 1 auctions, which accept agency and agency mortgage debt, will continue to be held every other week.

Jeff Bailey : 9/17/2008 3:02:01 PM

DJ at 02:30 ... S&P: Affected AIG-related issues get partial support from GICs

Jeff Bailey : 9/17/2008 3:01:11 PM

DJ- UK's Darling: In very close touch with HBOS-Lloyds London Talks ... not sure this has been noted in today's MM.

Jane Fox : 9/17/2008 3:00:23 PM

Unfortunately though my true and trusted MACD is not giving me a buy signal, I need a MACD divergence for that, like we have in the Gold market.

Jeff Bailey : 9/17/2008 3:00:01 PM

DJ- Morgan Stanley CEO: Company is fundamentally strong @ 02:42 PM EDT

Jeff Bailey : 9/17/2008 2:59:10 PM

DJ- SNB confirms it is not in talks with UBS on financial aid

Jane Fox : 9/17/2008 2:58:54 PM

Crude made a low of 91.36 and a high of 97.45. Now that's the kind of market I like to trade. Link

Jeff Bailey : 9/17/2008 2:58:42 PM

DJ- Shell: Expects to have US Gulf production back in 3-4 Days

Jane Fox : 9/17/2008 2:57:09 PM

TRIn back down to 0.66 but I would still not be putting a lot of weight on this internal.

Keene Little : 9/17/2008 2:54:03 PM

SPX has bounced up to its broken uptrend line from yesterday, near 1188. Bulls don't want a bearish kiss goodbye here. 30-min chart: Link

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

WFC $34.66 -0.77% ....

Jeff Bailey : 9/17/2008 2:52:54 PM

30-year now unch at 4.095% ...

Jeff Bailey : 9/17/2008 2:52:18 PM

13-week 0.06%

Jeff Bailey : 9/17/2008 2:48:59 PM

NASDAQ a/d 479/2,449

Jeff Bailey : 9/17/2008 2:48:49 PM

NYSE a/d 167/2,703

Jeff Bailey : 9/17/2008 2:47:41 PM

USO $78.14 +4.21% ...

FXE $143.95 +1.64% ... benchmark

Jeff Bailey : 9/17/2008 2:42:59 PM

This is from your futures expiration benchmarking chart.

Jeff Bailey : 9/17/2008 2:42:21 PM

USO ... will also note conventional 80.9% right here. 02/06/08 relative low close to recent 07/14/08 high close.

Jeff Bailey : 9/17/2008 2:41:04 PM

NASDAQ a/d 464/2,464

Jeff Bailey : 9/17/2008 2:40:53 PM

NYSE a/d 135/2,738

Jeff Bailey : 9/17/2008 2:39:42 PM

USO $78.22 +4.30% .... "tentative" here at WKLY S1 ($78.64)

Keene Little : 9/17/2008 2:39:26 PM

Nice recovery so far. Ideally we'll see a small consolidation and then another push higher before the leg up from today's low is finished. That would then set up either a pullback to correct this afternoon's rally or start the next strong decline.

Jeff Bailey : 9/17/2008 2:38:30 PM

Some "rational" is my analysis. "Irrational" would be everything RED regardless.

Long-time subs know what I'm talking about here.

Jeff Bailey : 9/17/2008 2:37:42 PM

Equity sector action in the green is largely COMMODITY-like .

Jeff Bailey : 9/17/2008 2:36:19 PM

getting some green in US Market watch ... bears might be stepping up their profit taking.

Jeff Bailey : 9/17/2008 2:34:54 PM

Oh my!

Jeff Bailey : 9/17/2008 2:33:50 PM

XOM alert! trade here at $78.00 gets stock's PnF chart back on a "buy signal" RISK to trend at $83

Jeff Bailey : 9/17/2008 2:32:16 PM

NYSE a/d 80/2,796

Jeff Bailey : 9/17/2008 2:31:19 PM

CNBC mentioning 13-week Treasury Yield

Jeff Bailey : 9/17/2008 2:30:04 PM

SPX 1,173.13 -3.33%

Jeff Bailey : 9/17/2008 2:29:44 PM

HUI.X 320.58 +13.93%, DDX.X +0.63%, OIX.X 735.88 +0.43% ...

Jeff Bailey : 9/17/2008 2:29:00 PM

OIX.X 736.84 +0.56% ... inches green

Jeff Bailey : 9/17/2008 2:23:53 PM

02:00 Internals found at this Link

Keene Little : 9/17/2008 2:17:35 PM

Looking at SPX, if the bounce off today's mid-day low turns into a larger a-b-c bounce we could see it make it up to about 1185 before turning back down. Something to watch for if we see it push a little higher here. If it instead drops to a new daily low now it could trigger a strong selloff into the close.

Jeff Bailey : 9/17/2008 2:16:53 PM

IRX.X 0.05% ... no reward now, but no risk for 13-weeks.

Jeff Bailey : 9/17/2008 2:16:20 PM

Alway's be thinking ... MARKET best for assessing RISK.


EVEN IF BEST BUY is -2.50% vs. a -10% alternative.

Capital goes to least amount of RISK.

Jeff Bailey : 9/17/2008 2:14:18 PM

LQD $86.11 -7.39% .... this is your corporate bond basket observation.

Jeff Bailey : 9/17/2008 2:13:52 PM

HYG $79.50 -8.17% ...

Jeff Bailey : 9/17/2008 2:13:34 PM

TLT $98.18 +0.18% ...

Jeff Bailey : 9/17/2008 2:13:13 PM

PHF $5.76 -17.83% ...

Jeff Bailey : 9/17/2008 2:12:56 PM

TYX.X off just 2.2 bp now at 4.073% ... some selling in the long end.

Jeff Bailey : 9/17/2008 2:11:21 PM

Watch that 30-year ...

Jeff Bailey : 9/17/2008 2:06:45 PM

XLF $18.39 -10.38% ... WKLY S2 $18.30 holding ... still holding.

Jeff Bailey : 9/17/2008 2:04:07 PM

PHF $5.50 -21.54% ... not sure

Jane Fox : 9/17/2008 2:03:59 PM

MACD is telling me the bottom is in for today. Link

Jeff Bailey : 9/17/2008 2:03:48 PM

Dollar rally hasn't helped stocks ... maybe some weakness near-term will.

Jeff Bailey : 9/17/2008 2:03:21 PM

NYSE a/d 20:2,850

Jeff Bailey : 9/17/2008 2:03:09 PM

DXY alert! ... 30-minute dealayed ... WKLY S1 here though.

Jeff Bailey : 9/17/2008 2:01:47 PM

XOM trade suggests not like crash of the 80's.

I was working for Mobil oil at the time. Stock got cut in 1/2 in matter of days. Not seeing it at the time of this typing.

Jeff Bailey : 9/17/2008 2:00:42 PM

JNJ $70.25 +0.65%, XOM $76.65 +0.28%, DIS $32.60 +0.27% ...

Jeff Bailey : 9/17/2008 1:59:54 PM

DIA $117.28 -3.92% ... low has been $116.69

Jeff Bailey : 9/17/2008 1:59:20 PM

Did get a bit of a volume spike in DIA on undercut of morning low.

Jeff Bailey : 9/17/2008 1:56:36 PM

Pressure cooker in the kitchen is whistling loud here.

Jeff Bailey : 9/17/2008 1:55:44 PM

RKH $101.19 -8.21% ...

Jeff Bailey : 9/17/2008 1:55:30 PM


Jeff Bailey : 9/17/2008 1:55:08 PM

NYSE a/d 9/2,859

Jeff Bailey : 9/17/2008 1:52:59 PM

TRIN 0.03 ... holy crrrrrrrrrrrrr

Jane Fox : 9/17/2008 1:52:37 PM

Here are your overnight charts with the new Russell 2000 futures that are on a delay. I have a subscription to the Nymex but have not updated it to get current Russell data since I do not trade this market anymore. Link

Jeff Bailey : 9/17/2008 1:52:33 PM

VIX.X 35.54 +17.29% ....

Jeff Bailey : 9/17/2008 1:52:11 PM

NYA.X 7,455.07 -4.33% ...

Jeff Bailey : 9/17/2008 1:51:54 PM

NYSE a/d 1/2,862

Keene Little : 9/17/2008 1:51:29 PM

Next potential support for NDX if the decline continues from here is the bottom of its parallel down-channel from its August high, currently just below 1619. 60-min chart: Link

Jeff Bailey : 9/17/2008 1:49:28 PM

Quick way to get a lot of commodity, spread capital exposure among many

Jeff Bailey : 9/17/2008 1:48:47 PM

GSG $51.53 +1.55% ... in your "Beetle's Balanced"

Jeff Bailey : 9/17/2008 1:46:51 PM

Shiner's gold ... GLD $84.69 +10.28% ... ~846.90 spot

Jeff Bailey : 9/17/2008 1:46:03 PM

"Black gold"

Jeff Bailey : 9/17/2008 1:45:39 PM

USO $76.33 +1.78% ... WKLY S2 and DAILY R1 overlap here.

Jeff Bailey : 9/17/2008 1:44:42 PM

SNDK's WKLY R2 $17.49

Jeff Bailey : 9/17/2008 1:44:18 PM

SNDK ... at last night's close, Sep "Max Pain" theory tabulation was $16.00.

Jeff Bailey : 9/17/2008 1:43:08 PM

SanDisk shares jump on Samsung offer MarketWatch Story Link

Jeff Bailey : 9/17/2008 1:42:29 PM

Good gravy! SNDK $20.75 +37.96% ...

Jeff Bailey : 9/17/2008 1:41:17 PM

NASDAQ-100 Heatmap Link

Jeff Bailey : 9/17/2008 1:39:45 PM

JNJ +0.84% ... DIS +0.15% ... at least two (2)

Jeff Bailey : 9/17/2008 1:39:17 PM

NYSE a/d 3/2,847

Jeff Bailey : 9/17/2008 1:34:44 PM

So ... now you know "part of the reason" for the strong bid in financials at the cash open, then some fade lower.

Jeff Bailey : 9/17/2008 1:33:38 PM

Good update from Tab ... (10:26:29) this morning.

Jeff Bailey : 9/17/2008 1:32:46 PM

Don't let the "name" necessarily fool you.

Jeff Bailey : 9/17/2008 1:32:25 PM

USB $33.28 -5.64%
JPM $37.38 -8.29%
WFC $37.34 -8.27%
BAC $27.65 -6.42%

Jeff Bailey : 9/17/2008 1:29:31 PM

Email question ... HOLDRs components?

Jeff's Reply Link

Jane Fox : 9/17/2008 1:28:50 PM

Here are the charts of the VIX and the S&P futures (ES) and they are in sync today. In other words the VIX is supporting the bearishness. Link

Jeff Bailey : 9/17/2008 1:27:22 PM

James! You there?

Jeff Bailey : 9/17/2008 1:26:56 PM

I think last night's OptionInvest play list mentiioned something about AIG options.

Jeff Bailey : 9/17/2008 1:25:36 PM

AIG can go to $0.00 ... if SHORT $2,500.00 of RKH, and use very, very, very small position in AIG almost like an option.

Jeff Bailey : 9/17/2008 1:24:32 PM

AIG $2.32 -38.40% ...

Jeff Bailey : 9/17/2008 1:24:07 PM

Yes I do ... be "open" to AIG if we need it. AIG not a component but understand how it has traded, and what it could do for RKH short should need be called upon.

Jeff Bailey : 9/17/2008 1:23:08 PM

RKH $101.65 -7.81% .... do you have a "plan?"

Jeff Bailey : 9/17/2008 1:21:28 PM

MSFT -2.88% and INTC -2.46% ... only NASDAQ

Jeff Bailey : 9/17/2008 1:20:59 PM

Note: All 4 are NYSE-listed.

Jeff Bailey : 9/17/2008 1:20:36 PM

XOM +0.35%, JNJ +1.04%, DIS +0.27%, PFE +0.67% ... some sign of intra-day recover from breadth.

Jeff Bailey : 9/17/2008 1:19:57 PM

DIA/INDU/YM breadth ... +4 and -26

Jeff Bailey : 9/17/2008 1:19:20 PM

NASDAQ a/d 430/2,416

Keene Little : 9/17/2008 1:19:16 PM

The bounce off today's low for NDX looks corrective. We could still see another leg up for the bounce but so far I see no evidence of a bottom being put in. We'll either break down from here or after another leg up for the bounce.

Jeff Bailey : 9/17/2008 1:19:06 PM

NYSE a/d 18/2,826

Jeff Bailey : 9/17/2008 1:17:42 PM

Linda! Any updated TED readings today?

Jeff Bailey : 9/17/2008 1:16:44 PM

Can go to 0.01%, but as much cash as one can just about cram in here.

Jeff Bailey : 9/17/2008 1:16:03 PM

IRX.X 0.05%

Jeff Bailey : 9/17/2008 1:13:52 PM

HYG $81.15 -6.27% ...

Jeff Bailey : 9/17/2008 1:13:30 PM

PHF $6.09 -13.12% ... must monitor "junk"

Jeff Bailey : 9/17/2008 1:12:52 PM

VIX.X 33.73 +11.32% ... did tap DAILY R2 almost to the decimal (34.86)

Jeff Bailey : 9/17/2008 1:05:02 PM

DAILY S2 (regular session derived) still in play

Jeff Bailey : 9/17/2008 1:04:07 PM

See YM08z volume after it undercut Monday's extended session low? No big spike. Suggests very few LONG stops. Not "climactic"

Tab Gilles : 9/17/2008 1:03:23 PM

Earlier Linda posted this on TED...

Linda Piazza : 9/17/2008 9:25:28 AM

Trouble. The TED spread is 2.83 this morning, above the high reached last year and, I think, above the high during the 1987 debacle. There are two ways of looking at this, of course. One is that it's signaling danger, danger. The other is the contrarian view, the way we look at the VIX when it gets to extreme levels, when we think fear is extreme and markets are likely to reverse. How would I deal with it? I wouldn't be jumping in front of a rolling-down-the-tracks freight train today with bullish trades, for sure. I'd be off to the side, waiting for sure signs that train had stopped and was reversing directions.

I couldn't agree more with her observation.

Here's a chart looking at the TED Spread/ VIX & Gold (GLD) over the last few years. Link

The spike in FEAR is obvious, but could it may rise even more so. I'd posted 2 long-term charts yesterday on the VIX....repost Link Link

Jeff Bailey : 9/17/2008 1:01:06 PM

MM Time calibration ... 12:58:00

Jeff Bailey : 9/17/2008 12:59:18 PM

UNG-JT are $0.30 x $0.45 VIX.X 34.22 +12.93% ... The currently profiled long UNE-AJ from 8/27/08 entry are $4.00 x $4.50

Jeff Bailey : 9/17/2008 12:57:54 PM

US Nat Gas Fund (UNG) $35.35 +5.45% ... WKLR R2 still finds sellers $36.48 this week. Priced out some Oct. $46 Call for COVERED with jacked volatility, but not enough at this point.

Jeff Bailey : 9/17/2008 12:55:10 PM

WFC $33.45 -4.20% .... WKLY Pivot $32.99 holds to the penny today. Buyers snapped it up at yesterday's open and WKLY S1 $31.48. This would be the HEAD of strength inchworm. If it starts pulling lower, then observation of "sell the winner" and further downside.

Jeff Bailey : 9/17/2008 12:52:03 PM

RKH's WKLY S1 right here at $103.66. WKLY Pivot $110.04 has been resistance this week.

Jeff Bailey : 9/17/2008 12:51:08 PM

RKH $102.74 -6.81% ... low has been $99.66 ... high has been $108.21.

Jeff Bailey : 9/17/2008 12:50:33 PM

Here is RKH screen capture from earlier today ... main reason for capture to note strikes/oi (Qcharts TERRIBLE, TERRIBLE option tools otherwise) Link

Jeff Bailey : 9/17/2008 12:48:21 PM

NVDA $9.85 +2.71% ... "Pulse stock" .... simply monitor $10 strike.

Jeff Bailey : 9/17/2008 12:43:51 PM

Dow 30 live at 12:38 PM EDT Link

Jeff Bailey : 9/17/2008 12:39:17 PM

$vxo.x 37.69 +14.10% ... ... WKLY R2 34.85

Jeff Bailey : 9/17/2008 12:38:36 PM

VIX.X 34.47 +13.76% ...

Jeff Bailey : 9/17/2008 12:37:40 PM

JNJ +1.14% ...

Jeff Bailey : 9/17/2008 12:37:29 PM

Pfizer (PFE) $17.84 +0.16% ... inches green

Keene Little : 9/17/2008 12:32:15 PM

I don't know if the decline for today is finished but I can see the possibility for that. If the low holds here we could see a bounce back up to correct today's decline (before proceeding lower again). A 50%-62% retracement would be at SPX 1189-1195 so just some numbers to consider if you're holding short and hoping for lower.

Keene Little : 9/17/2008 12:29:11 PM

SPX is back down to the bottom of a parallel down-channel (1168) for price action since the beginning of September. This is where the bulls need to make a stand because it's price-level support (1170), Fib level support (1172) and channel support. If it breaks we will likely start the waterfall decline. 60-min chart update: Link

Jane Fox : 9/17/2008 12:28:46 PM

I think the internals speak for themselves: AD volume trajectory straight down, the VIX climbing and the AD ratio flatlined at a very bearish 0.53. I think the TRIN is only at 1.08 because of the money infusion again today, if not for the infusion it would be a lot higher. Link

Jeff Bailey : 9/17/2008 12:26:34 PM

JNJ $70.33 +0.75% ... remaining 29 red.

Jeff Bailey : 9/17/2008 12:25:52 PM

YM 10,707 ... has seen trade at Monday evening's extended session low of 10,725. (see yesterday's MM comment)

Jeff Bailey : 9/17/2008 12:24:04 PM

12:00 Internals found at this Link

Jeff Bailey : 9/17/2008 12:02:44 PM

NYSE a/d 70/2,729

Jeff Bailey : 9/17/2008 11:42:41 AM

Based on $10k account, 1/4 = $2,500.

$2,500 / $101.16 = 24.7 shares. ROUND DOWN to 24.00.

Jeff Bailey : 9/17/2008 11:40:53 AM

Swing trade short alert! for 1/4 position in the Regional Bank HOLDRs (RKH) at the offer of $101.16.

Will play the retail stop at $111.00.

Jeff Bailey : 9/17/2008 11:39:14 AM

Good gravy those RKH puts are expensive ..

Jeff Bailey : 9/17/2008 11:35:31 AM

MS and GS only two (2) Wall Street firms now.

Jeff Bailey : 9/17/2008 11:34:44 AM

That's probably the "driver"

Jeff Bailey : 9/17/2008 11:34:32 AM

Stocks decline could force Morgan to pursue merger (report) ... MarketWatch Story Link

Jeff Bailey : 9/17/2008 11:31:58 AM

Most Actives (cont'd) INTC $18.96 -2.66%, XLF $18.45 -10.08%, QQQQ $40.95 -3.44%, LEH $0.12 -56.66%, MS $18.37 -36.16% PLUNGING!!!!

Keene Little : 9/17/2008 11:31:11 AM

From a reader (thanks Barry) who forwarded an updated from Walter Deemer:

SentimenTrader.com?s Jason Goepfert reports that his Panic Button Indicator, which measures stress in the credit markets and which we described this morning, has soared to a new record high of 8.1. (It was 1.0 just last week.) It?s previous (closing) highs were 7.9 on August 20, 1982, during the Latin American debt default crisis, and 7.6 on October 19, 1987, Black Monday in the stock market.

So if you think you?ve never seen anything like this before, you?re right. Meanwhile, please bear in mind that climactic reversals are virtually always tested one or more times.

In other words, if we get a v-bottom along the way here, it's almost always tested within a few weeks to a couple of months. No need to be a hero and look for a bottom. The 2nd mouse gets the cheese.

Jeff Bailey : 9/17/2008 11:30:25 AM

Most Actives .... AIG $2.04 -45.33%, MER $19.83 -10.59%, SPY $117.91 -3.43% (We know where the OI is at here, and its below all that SPY/SPX put) May well be seeing mass hedge of any NAKED, even though VIX.X has been risiing.

Jeff Bailey : 9/17/2008 11:25:51 AM

EIA (refinery side): Gross inputs fell by 151,000 b/d to 13.63 million b/d
Crude oil inputs fell by 246,000 b/d to 13.24 million barrels/day.
This has my # Days Crude oil supply inching up to 20.4 days from prior week's 20.3
Percent utilization of operable capacity fell to 77.41% from prior week's 78.27%.

Keene Little : 9/17/2008 11:25:46 AM

NDX has tagged its March 10th low near 1672. Slightly lower is the March 17th low near 1668.

Keene Little : 9/17/2008 11:23:16 AM

The huge rally in gold today looks to me like a c-wave of an a-b-c bounce off the August low. Even though the September low made a new low I believe it's part of what's called an expanded flat correction in EW terminology (where the b-wave pullback in this case drops to a new low and then the c-wave typically becomes 162% of the a-wave). The Fib projection for wave c is near 853 and a 38% retracement of the July-August decline is near 863. That provides an upside target for gold, shown on the daily YG (emini, December) chart, before it turns around and heads south again: Link

Jeff Bailey : 9/17/2008 11:17:41 AM

06/30/08 Beetles Balanced ... Can really see the AVERSION to RISK in the bond portion today Link

SHY 1-3 year "safest" regardless of yield, while HYG junk the "riskiest"

Jeff Bailey : 9/17/2008 11:11:02 AM

FXB 180.16 +0.72% ... this is your brit pound.

Jeff Bailey : 9/17/2008 11:10:33 AM

NASDAQ a/d 491/2,194

Tab Gilles : 9/17/2008 11:10:26 AM

Look at the Bullish Divergence on the UNG chart. Link

Same goes for the GLD Link

SLV Link XLB Link

Jeff Bailey : 9/17/2008 11:10:16 AM

NYSE a/d 119/2,629

Jeff Bailey : 9/17/2008 11:09:41 AM

Not sure where $HUI.X open interest is at ... 300.00 ???? would be top of mind. Could me massive NAKED call squeeze. Even in the commodity itself.

Jeff Bailey : 9/17/2008 11:08:55 AM

Sector Winners $HUI.X 308.39 +9.60%, Disk Drive (DDX.X) 96.69 +1.92% ...

Keene Little : 9/17/2008 11:08:35 AM

NDX making new lows below yesterday's so the techs continue to lead the way. Follow them.

Jeff Bailey : 9/17/2008 11:07:26 AM

Royal Bank of Scotland Group (RBS) $3.10 -12.42% ... takes out yesterday's low.

Jeff Bailey : 9/17/2008 11:06:45 AM

FXY $95.35 +1.40% ...

Jeff Bailey : 9/17/2008 11:06:25 AM

FXE $142.47 +0.60% ... "doesn't make sense" with gld.

Jeff Bailey : 9/17/2008 11:05:58 AM

GLD $81.94 +6.70% ...

Jeff Bailey : 9/17/2008 11:05:24 AM

Yet Treasury bonds bid ... STRONG

Jeff Bailey : 9/17/2008 11:04:38 AM

Just seeing at 10:59 AM EDT

Jeff Bailey : 9/17/2008 11:04:26 AM

Treasury special financing ... Reuters Link

Jeff Bailey : 9/17/2008 11:03:35 AM

Global Econ. Calendar Link

Jeff Bailey : 9/17/2008 11:02:51 AM

Quick glance "nothing unusual" there.

Jeff Bailey : 9/17/2008 11:02:37 AM

European Markets Link

Jeff Bailey : 9/17/2008 11:02:09 AM

Asian Markets Link

Tab Gilles : 9/17/2008 11:00:56 AM

GOLD Comex (Dec) $831.50 +$50

Gold Rallies as oil spikes.

$WTIC $94.03 +2.88 Link Link

Jeff Bailey : 9/17/2008 10:59:57 AM

Market participants showing "heightened concern" over something.

Jane Fox : 9/17/2008 10:59:57 AM

Both Japan and Australia combined have added $31.9 billion into their money markets. Bank of Japan - $28.4 billion and Bank of Australia $3.45 billion.

Jeff Bailey : 9/17/2008 10:59:30 AM

Folks ... Fed can only take its target rate to 0.00%.

Keene Little : 9/17/2008 10:59:25 AM

SPX is testing the uptrend line from yesterday's low, currently near 1183: Link

Jeff Bailey : 9/17/2008 10:59:08 AM

13-week Treasury yield ($IRX.X) ... down 73 bp at 0.13% ...

Jeff Bailey : 9/17/2008 10:58:29 AM

GLD $81.63 +6.36% ... ~816.30 spot.

Jeff Bailey : 9/17/2008 10:57:34 AM

CNBC ... mentioning gold surging ...

Jane Fox : 9/17/2008 10:57:12 AM

WASHINGTON (MarketWatch) -- Home building tumbled again in August, with the number of new building permits for single-family homes dropping to a 26-year low, the Commerce Department estimated Wednesday.

Starts of new homes fell 6.2% to a seasonally adjusted annual rate of 895,000, the lowest in 17 years, and much weaker than the 955,000 rate expected by economists surveyed by MarketWatch

Jane Fox : 9/17/2008 10:55:04 AM

SAN'A, Yemen -- Suspected militants armed with automatic weapons, rocket-propelled grenades and at least one suicide car bomb assaulted the U.S. Embassy in the Yemeni capital on Wednesday. The coordinated attack killed 16 people, including six assailants, officials said.

The U.S. said no Americans were hurt.

Jeff Bailey : 9/17/2008 10:55:59 AM

EIA: Crude oil stockpiles down 6.3 million barrels.
Total Gasoline down 3.3 million barrels.
Conventional Gasoline down 2.7 million barrels.
Reformulated Gasoline up 86,000 barrels.
Total Distillates down 835,000 barrels.
Heating Oil (>500 PPM Sulfur) down 236,000 barrels
ULS Diesel (<15 PPM Sulfur) down 76,000 barrels
Kerosene-Type Jet Fuel down 731,000 barrels.

Jeff Bailey : 9/17/2008 10:51:04 AM

USO $74.86 -0.17% ... after EIA data.

Jeff Bailey : 9/17/2008 10:50:33 AM

TRINQ 1.01 +48.52% ... S1= 0.10, Piv= 1.279, 1.95, 3.13.

Jeff Bailey : 9/17/2008 10:49:20 AM

TRIN 0.62 -1.58% ... DAILY Pivot S2 and S1 below zero (0.00) so no real help today. Pivot= 1.07, 1.70, 2.79.

Jeff Bailey : 9/17/2008 10:47:46 AM

VIX.X ... DAILY Pivot Levels ... 27.96, 29.13, Piv= 31.41, 32.57, 34.86.

VIX.X 32.89 +8.54% ... still "elevated" and not what we observed mid-July.

Jeff Bailey : 9/17/2008 10:45:13 AM

Alert! ... In today's internals update, the DAILY PIVOT postings are INCORRECT! They're not today's.

Jeff Bailey : 9/17/2008 10:37:52 AM

USO $75.99 +1.33% ..

Jeff Bailey : 9/17/2008 10:34:27 AM

My 4-week SMA of purchases index rose to 354.2 from prior week's 337.6. My 12-week SMA edged up to 336.6 from prior week's 335.1.

Tab Gilles : 9/17/2008 10:33:58 AM

Volatility Indexes:

$VIX Link

$VXD Link

$VXN Link

$RVX Link

Jeff Bailey : 9/17/2008 10:30:00 AM

For now ...

Jeff Bailey : 9/17/2008 10:29:49 AM

Refinances +88.1% to 2,300 ... major clog "unclogged"

Jeff Bailey : 9/17/2008 10:27:40 AM

MBA: "The drop in mortgage rates reflected the Treasury?s announcement that Fannie Mae and Freddie Mac were placed under conservatorship of the Federal Housing Finance Agency,? said Orawin Velz, MBA?s Associate Vice President of Economic Forecasting. ?Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term despite some widening in mortgage spreads. We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.?

Tab Gilles : 9/17/2008 10:26:29 AM

SEC issues new rules on abusive short selling

Sept. 17 (Bloomberg) -- The U.S. Securities and Exchange Commission stiffened rules against manipulative short-selling after a market rout pushed American International Group Inc. to the brink of collapse and triggered Lehman Brothers Holdings Inc.'s bankruptcy.

The SEC adopted two regulations today forcing traders and brokers to close out short sales, amid concern investors are driving down share prices by flooding markets with sell orders. A third rule makes it a securities fraud when short sellers deceive brokers about delivering borrowed shares to buyers.

"These several actions today make it crystal clear that the SEC has zero tolerance for abusive" short-selling, SEC Chairman Christopher Cox said in a statement.

Lawmakers and regulators are questioning whether short sellers have contributed to a crisis by spreading false information and using abusive tactics to attack companies. Hedge funds and other investors argue that poor business strategies are to blame, not short sellers.

In traditional short sales, traders borrow shares that they then sell. If the price drops, they profit by buying back the stock, repaying the loan and pocketing the difference.

The SEC rules approved today target so-called naked short- selling, in which traders never borrow shares from their brokers. The agency is concerned that such a strategy can free investors to manipulate prices by placing unlimited sell orders.

One SEC regulation eliminates an exemption for options market-makers to deliver shares of companies placed on so-called threshold lists. Companies are listed when they have a high number of borrowed shares that haven't been delivered.


The rule will make it harder for options market-makers to hedge trades when they sell put contracts, said Stephen J. Nelson, a securities lawyer in White Plains, New York.

"If you want to short the stock you're going to have to deliver it, and the only way to really do that is to pre- borrow," Nelson said. `Professional traders are not in the business of taking that kind of risk. They would be very reluctant to face the five-day window because buy-in can be very expensive."

The SEC also approved a rule drafted in March that would make it a fraud for investors to lie to their broker about locating shares to sell short. Currently, brokers are able to rely on their customers' assurance that they had located shares that could be used to cover a short sale.

The SEC rules don't reinstitute an "emergency" order that expired last month, which placed restrictions on short-selling in Lehman, Fannie Mae, Freddie Mac and 16 securities firms. The order required investors betting on a decline in stock prices to arrange to borrow the shares before completing a sale.

The SEC also declined to bring back the so-called uptick rule, which allowed short sales only if a preceding trade boosted a company's stock price. Lawmakers such as U.S. Senator Charles Schumer, a New York Democrat, have questioned the agency's June 2007 decision to remove the rule.

Keene Little : 9/17/2008 10:23:10 AM

Yesterday's high is a key level now since a push back above it would open up some bullish possibilities. So use that for your stop if short the market and you want to protect as much as possible. It's possible we're going to see a consolidation between yesterday's high and low before proceeding lower in which case we can expect a lot of choppy price action that might be tough to trade. But a break of yesterday's low, whether right away or after a sideways consolidation, will likely see a kickoff to the downside.

Jeff Bailey : 9/17/2008 10:21:45 AM

10:00 Internals found at this Link

Jeff Bailey : 9/17/2008 10:14:06 AM

PHF $6.60 -5.84% ... closed-end "junk" bond lower again today.

"Panic-like" move and very defensive action early in credit markets.

Probably the same in equity.

Jeff Bailey : 9/17/2008 10:11:50 AM

13-week Yield ($IRX.X) down 39 bp at 0.47% ... has been as low as 0.10%!

Keene Little : 9/17/2008 10:10:59 AM

If prices drop below yesterday afternoon's lows it will leave a 3-wave bounce off yesterday morning's low and confirm it was a correction to the decline (another one). I can't stress enough how bearish the wave pattern is at this point, especially if the afternoon lows give way.

Keene Little : 9/17/2008 10:03:16 AM

Sure enough, like the past two days we're getting an immediate bounce off the opening gap down. The PPT sure has been swimming against the current this week. I know their efforts continue to be an attempt to slow the decline, not stop it. They know we need to see a massive correction to the exuberance of the past 10 years but want to see it deflate slowly. It's a tall order.

Jeff Bailey : 9/17/2008 10:01:10 AM

MBA's Weekly Application Survey at this Link

Jane Fox : 9/17/2008 9:49:34 AM

After the market closed on Tuesday, a money market fund called the Reserve Primary Fund "broke the buck" that is, its net asset value fell below the $1-a-share level that funds like this must maintain. Breaking the buck is an extremely rare occurrence. The fund was pinched by investments in bonds issued by now collapsing Lehman Brothers.

Jane Fox : 9/17/2008 9:40:09 AM

AD line is a bearish -1677 but geesh who knows if you can even rely on this internal lately. I know you can't rely on the TRIN.

Jane Fox : 9/17/2008 9:27:14 AM

I have not been watching the equity futures close enough of late and just realized the Russell 2000 futures moved from the CME to the ICE on September 16th and the new symbol is TF. So the December contract is TFZ08 and continuous (which would not be too much data yet) is @TF.

Linda Piazza : 9/17/2008 9:25:28 AM

Trouble. The TED spread is 2.83 this morning, above the high reached last year and, I think, above the high during the 1987 debacle. There are two ways of looking at this, of course. One is that it's signaling danger, danger. The other is the contrarian view, the way we look at the VIX when it gets to extreme levels, when we think fear is extreme and markets are likely to reverse. How would I deal with it? I wouldn't be jumping in front of a rolling-down-the-tracks freight train today with bullish trades, for sure. I'd be off to the side, waiting for sure signs that train had stopped and was reversing directions.

Jane Fox : 9/17/2008 9:24:15 AM

NEW YORK (MarketWatch) -- Goldman Sachs added to the mounting sense of gloom on Wall Street Tuesday when it reported that third-quarter profit plunged 70% from a year ago as business slowed across the board and the firm posted more than $800 million in losses from sour residential and commercial real estate assets.

The company also shot down speculation it might serve help bailout competitors, with Chief Financial Officer David Viniar saying it has no plans to merge or buy a bank or securities firm to expand its funding sources.

"This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations," Lloyd Blankfein, Goldman CEO, said in a press release

Keene Little : 9/17/2008 9:22:18 AM

The selloff in equity futures as we near the bell is a sign of "oh wait, bailing out AIG must mean our financial/insurance industry is in the pooper". We've got DOW futures down -180 and S&P futures down even more at -26. Expect an attempt to save the market again, just as we saw the past two days. One of these days even our government will just have to stop printing money. I'm really beginning to feel the pain of my children and the debt we're saddling them with.

Linda Piazza : 9/17/2008 9:21:06 AM

I'm taking a day off today, but I wanted to update as much as possible before the markets open. As noted at the close yesterday, the OEX had ended the day near the top of a bear-flag-like formation in which it had been climbing off yesterday's high. It looked like it could be time for a pullback through that flag, either immediately or perhaps after a closer test of the top trendline, now at about 562.10 but climbing, of course. So, if the OEX should climb immediately, which doesn't look likely, I would watch for potential resistance on 30-minute closes at about 562.10. If it drops, first potential support on 30-minute closes is 554.66, but I would consider the possibility of a drop toward 552.80 or even toward the bottom of that bear flag, now at about 545. Watch for bounce potential at each of these potential support levels. What bulls don't want today, or, rather, what most don't want today, is a daily close beneath about 550, which would suggest another test of the 537 zone could be possible, with a drop to 530-533 not out of the realm of possibility.

If the OEX bounces strongly from one of those support levels, watch for strong rollover potential at 569.80-570.70, if not sooner.

Jane Fox : 9/17/2008 9:12:46 AM

You know that song, "A little ray of sunshine"? Well that is what I see here. Gold has made a MACD bullish divergence and is about the only bullishness I can find anywhere. Of course before you invest in Gold you have to look at the US$ because these two trade almost one for one in opposite directions. Link

Jane Fox : 9/17/2008 9:09:33 AM

Looks like the selling in crude has stopped for now but I see nothing that would tell me to go long this market.

Since I am a chartist and do not take market fundamentals into account when making investment decisions, I depend entirely on what the chart is telling me. The way I see it, everything anyone knows about a market is already built into the chart and there is no way I have the resources to find that little nugget others have not found. And I see nothing in this chart that tells me the selling is over other than it is way overdone but I have never been able to say this is so overdone it is ready to change direction until it actually does. Link

Jane Fox : 9/17/2008 9:00:47 AM

It was certainly a wild ride overnight and although the markets initially fell after the AIG announcement they were able to rally and make new overnight highs. But alas that euphoria was short lived and all markets except the NDX futures (NQ) are testing overnight lows as I type. Link

Jane Fox : 9/17/2008 8:55:13 AM

By now you probably already know the federal government agreed to make an emergency loan of $85 billion to American International Group in exchange for a nearly 80 percent equity stake in the company. Under the deal, the Federal Reserve will provide a two-year $85 billion emergency loan to AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management, which indeed it did. AIG's chief executive, Robert Willumstad, is expected to be replaced by Edward Liddy, the former head of insurer Allstate Corp.

Keene Little : 9/17/2008 8:08:53 AM

The initial excitement following the AIG bailout has faded. Perhaps the thoughts of nationalizing the insurance business, following the nationalization of the mortgage business, means we're in serious trouble. Regardless, equity futures lost their after-market pop and dropped back down into negative territory in the early morning hours. They've bounced since the low just before 4:00 AM but are currently slightly negative.

We'll just have to wait and see how the cash market treats the AIG bailout news. The market has been in a sell-the-rallies mode so we'll need to see the tenor of that mood change (not to mention the breaking of some down trends) before getting bullish on this market.

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