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Jeff Bailey : 9/25/2008 11:10:32 PM

It sounds, looks to me, that if something isn't done pretty quick, there will be a lot more failures. The SEC isn't putting more and more stocks on the "no short" list for the fun of it. Any commercial paper deals that are getting done are showing widening spreads each day (tighter and tighter credit lending) and that's just putting off any type of corporate decisions to hire, upgrade, etc.

Tab Gilles : 9/25/2008 10:57:49 PM

True...there will be alot more bank failures to come, it ain't over yet!

My money is on Jamie Dimon...I'm sure he's already ahead of the curve on the monopoly angle.

Earlier today, I suggested a Jan. 2010 LEAP call on JPM.

Jeff Bailey : 9/25/2008 10:56:06 PM

When I began writing my 2008 economic outlook last winter, I thought this year's election could be pivotal for the U.S. economy and world economy.

Here we are, and there appears to be much at risk.

Jeff Bailey : 9/25/2008 10:56:00 PM

Tab! And if they're the only one! The can't reproduce!

Unless we go round the cycle once again and "break up" the giant that has too much control.

Funny! They break up Standard Oil, and now its pretty much back in place.

China lifting price caps, allowing shorting.

US "no short."

Incredible turn of event in just the past couple of months.

Jeff Bailey : 9/25/2008 10:45:12 PM

Rescue Plan Stalled at 10:00 PM EDT. Talks to resume Friday morning.

Tab Gilles : 9/25/2008 10:46:04 PM

Jeff...JPMorgan --- Best Of Breed! Link

Jeff Bailey : 9/25/2008 10:42:23 PM

YM off 145 at 10,873 ...

Jeff Bailey : 9/25/2008 10:41:19 PM

RIMM $97.53 +0.84% ... last tick extended was $78.60.

Jeff Bailey : 9/25/2008 10:40:34 PM

JPM $43.46 +7.30% ... last tick extended was $44.50.

WM $1.69 -25.22% ... last tick extended was $0.45.

Tab Gilles : 9/25/2008 10:36:55 PM

Judge: Microsoft doesn't owe Alcatel-Lucent $1.5B Link

Tab Gilles : 9/25/2008 10:35:00 PM

Property prices likely to slip in Asia financial centers Link

Jeff Bailey : 9/25/2008 10:34:50 PM

European Markets: Link

Jeff Bailey : 9/25/2008 10:34:23 PM

Asian Markets: Link

Jeff Bailey : 9/25/2008 10:33:14 PM

JPMorgan buys WaMu assets afer FDIC seizure (update) ... AP Story Link

Tab Gilles : 9/25/2008 10:33:01 PM

Katie Couric Interviews The Candidate About Watching Russia, Her New Passport, And Her Opinion Of Obama Link

Tab Gilles : 9/25/2008 10:31:58 PM

JPMorgan Buys WaMu's Deposits as Thrift Is Seized Link

Tab Gilles : 9/25/2008 10:30:07 PM

Bush prefers Paulson Wall St. rescue plan

WASHINGTON (Reuters) - U.S. President George W. Bush prefers the plan to rescue the financial system drawn up by Treasury Secretary, Henry Paulson, the White House said on Thursday as a new proposal emerged in Congress to address the situation.

"The president supports the core of Secretary Paulson's plan," said White House spokesman Tony Fratto. "There are lots of ideas people are proposing and Secretary Paulson can work with members to find a route to reach an agreement."

A group of conservative House Republicans on Thursday presented a mortgage insurance plan as an alternative to the Paulson plan, which has encountered criticism from some Republican and Democratic lawmakers.

That plan calls for the U.S. government to offer insurance coverage for the roughly half of all mortgage-backed securities that it does not already insure.

"We believe Secretary Paulson's plan is the best option for solving the problem," Fratto said, referring to the proposal for the government to take the illiquid assets off the books of lenders and hold them until they could be sold at a later date.

Jeff Bailey : 9/25/2008 10:24:17 PM

SPX recorded 1 NH and 10 NL on Thursday.

RUT recorded 5 NH and 31 NL.

Jeff Bailey : 9/25/2008 10:21:05 PM

China Approves Short-Selling, Margin Lending

DJ- China's State Council has approved the securities regulator's plan to allow margin lending and short selling, Bloomberg reported Friday, citing an unnamed source.

The China Securities Regulatory Commission submitted the plan to China's cabinet this month, and the government carefully timed the move to limit the impact on the market's stability, Bloomberg cited the source as saying.

Keene Little : 9/25/2008 10:10:22 PM

Friday's pivot table: Link

As mentioned at the end of the day Thursday, a drop below Wednesday's low would be bearish and it would suggest a quick break below the low on September 18th and that in turn would suggest a fast selloff to follow. A break of the uptrend line from September 18th, near SPX 1190, and the 78.6% retracement of Thursday's rally near 1188 would be a bearish heads up. 120-min chart: Link

Stay cautious if you're short--any "good" news about the bailout plan could flame the shorts again (although they'll probably wait until the weekend, their favorite bear-fry time to make announcements). NDX still looks potentially more bullish than the others in that it bounced off its broken downtrend line from September 2nd: Link

But again, a break below Wednesday's low would likely result in failure to hold the September 18th low and that would usher in strong selling (recognition that the rally following last week's bailout announcement is not holding the market up). Futures are down this evening and Thursday's lows are either being threatened or already broken. But we'll have to see how the cash market handles any further developments with the bailout news.

OI Technical Staff : 9/25/2008 9:59:59 PM

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Jeff Bailey : 9/25/2008 7:55:27 PM

Signing off for now. Go get some grub.

YM down 80 at 10,938

Doesn't sound like a deal is going to be struck tonight, but you just never know.

Jeff Bailey : 9/25/2008 7:54:08 PM

CNBC ... WaMu bank outlets open for business as usual tomorrow

Jeff Bailey : 9/25/2008 7:48:18 PM

Fisher's prepared remarks Link

Jeff Bailey : 9/25/2008 7:47:15 PM

dj- Japan Aug Core CPI +2.4% on year

Global econ calendar Link

Jeff Bailey : 9/25/2008 7:43:28 PM

PECO Announces $300 Million Bond Sale ... Press Release Link

Jeff Bailey : 9/25/2008 7:42:50 PM

Exelon spent $1.2M lobbying government in Q2 ... AP Story Link

Jeff Bailey : 9/25/2008 7:38:51 PM

dj- Paulson, Bernanke head back to Congress on Rescue Package

Jeff Bailey : 9/25/2008 7:37:56 PM

dj- Obama: Sees bailout deal eventually

Democratic White House hopeful Barack Obama Thursday said he expected there would eventually be an agreement on a massive Wall Street bailout plan. "I think that eventually we will get a deal. I think that there is still some work that needs to be done," he told CNN. But he also lashed out at Wall Street financial institutions for their "reckless behavior," accusing regulators of "being asleep at the switch."

Jeff Bailey : 9/25/2008 7:35:38 PM

Good gravy! ... on first JPM/WM report, WM bid to $2.25 ... $0.60 now.

Jeff Bailey : 9/25/2008 7:33:36 PM

dj- McCain: There "never was a deal" on Wall Street bailout

Jeff Bailey : 9/25/2008 7:30:01 PM

It is getting ugly!

Senate Banking Committee Chairman Christopher Dodd, D-Conn., Thursday dismissed a meeting of congressional leaders at the White House as a "photo op" for Republican presidential candidate John McCain, Fox Business reported. The statement came after President George W. Bush, lawmakers from both parties and presidential candidates McCain and Barack Obama met to discuss a Wall Street bailout plan. Dodd said House Republicans presented an alternate proposal, which Dodd called a rescue plan for McCain.

Related MortgageNewsDaily Story Link

Jeff Bailey : 9/25/2008 7:25:50 PM

General Growth Properties (GGP) ... Executives sell stock to pay margin loans. (See last night's MW) Link

Jeff Bailey : 9/25/2008 7:16:03 PM

MW- JP Morgan deal won't affect WaMu FDIC insurance fund

Jeff Bailey : 9/25/2008 7:15:31 PM

MW- JP Morgan to acquire deposits of WaMu

Jeff Bailey : 9/25/2008 7:14:26 PM

Ford Credit no longer financing Mazda sales in U.S. ... MarketWatch Link

Jeff Bailey : 9/25/2008 7:07:34 PM

DJ- JP Morgan announces conf. call

Jeff Bailey : 9/25/2008 7:03:56 PM

CNBC reporting JP Morgan buys Washington Mutual

Jeff Bailey : 9/25/2008 7:03:21 PM

US House of Representatives Passes "Travel Promotion Act of 2008" ... (portion) - The "Travel Promotion Act," H.R. 3232, introduced by Representatives William Delahunt (D-MA) and Roy Blunt (R-MO) and co-sponsored by 243 additional members of the House of Representatives, establishes a public-private partnership to promote the United States as a premier international travel destination and communicate U.S. security and entry policies. The bill specifies that travel promotion would be paid for -- at no cost to U.S. taxpayers -- by private sector contributions and a modest fee on foreign travelers who do not pay $131 for a visa to enter the United States. Nearly every developed nation in the world spends millions of dollars to attract visitors.

Jeff Bailey : 9/25/2008 6:20:08 PM

Closing Internals at this Link

Jeff Bailey : 9/25/2008 6:13:16 PM

More NYSE-listed short sale prohibitions Link

Tab Gilles : 9/25/2008 6:04:29 PM

WASHINGTON -- Investment bank borrowing from the U.S. Federal Reserve's expanded discount window soared to new highs in the latest week as lawmakers scrambled to put together a $700 billion plan aimed at healing severely strained credit markets.

Meanwhile, a loan to troubled insurer American International Group Inc. on Wednesday totaled $44.57 billion, more than half the insurer's $85 billion credit line with the central bank. AIG last Wednesday borrowed $28 billion from its Fed credit line, which had been announced just days earlier.

The Federal Reserve provided $72.67 billion in credit for its recently announced money-market mutual fund liquidity facility.

Total borrowing at the discount window, including both depository institutions and primary dealers, more than doubled to a record $262.34 billion Wednesday from a previous record $121.29 billion in the prior week, the Fed said in its weekly report Thursday. Total average daily borrowing also jumped to $187.75 billion from a record $47.97 billion in the prior week.

Lending through the primary dealer credit facility, created in March for investment banks in the wake of the near-collapse of Bear Stearns, reached a new record of $105.66 billion as of Wednesday after hitting $59.78 billion in the previous week to end a weeks-long stretch in which investment banks didn't touch the facility. The figure includes loans made to broker-dealers Goldman Sachs, Morgan Stanley and Merrill Lynch as well as their U.K. counterparts as part of an announcement the Fed made over the weekend.

The primary dealer credit facility marks the first time since the Great Depression that non-bank primary dealers have been allowed to borrow from the Fed's discount window, a privilege usually reserved for more closely regulated commercial banks. In recent weeks, the Fed said it would accept a broader range of collateral, including non-investment grade securities and equities, in exchange for loans from the facility.

Separately, lending through the primary credit facility, used by commercial banks, Wednesday rose to a record $39.32 billion, up from a previous record of $33.4 billion on the previous Wednesday. Average daily lending through the primary credit facility continued to soar, climbing to a new record of $39.36 billion from a prior record $21.6 billion in the previous week, the report said.

The Fed's holdings of Treasurys securities fell in the week ended Sept. 24, dropping $3.26 billion to $476.58 billion, according to Thursday's report. A year ago, the Fed's balance sheet showed it held nearly $800 billion in Treasury securities.

Average daily borrowing of seasonal credit fell $1 million in the week to $95 million, according to Thursday's report. Seasonal credit borrowing Wednesday was at $101 million.

Jeff Bailey : 9/25/2008 6:03:44 PM

Send your emails regarding "slack lending standards 1999-2001" to CNBC.

Jeff Bailey : 9/25/2008 5:18:20 PM

So... if Warrants are attached (not just equity/stock), then, when a bank does come to borrow, or dump off the "toxic waste" they're bringing something in addition to equity/stock. They're also going to have to give taxpayers some Warrants, perhaps at a nice discount to what the equity/stock is trading when they come to the window.

Jeff Bailey : 9/25/2008 5:13:42 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/25/2008 5:06:13 PM

That's "somewhat" similar to what I think is being molded in the current rescue plan.

Jeff Bailey : 9/25/2008 5:05:02 PM

Those warrants on MBI @ $12.15 Link

Jeff Bailey : 9/25/2008 4:59:21 PM

Remember my coverage of the MBI $13.43 +8.74% hedge fund "rescue plan" ....

Jeff Bailey : 9/25/2008 4:54:07 PM

Now, make sure the Warrants are priced accordingly, plenty of duration.

Jeff Bailey : 9/25/2008 4:53:25 PM

So ... those that see "bail out of Wall Street" might like the deal as Warrants might "punish Wall Street"

Jeff Bailey : 9/25/2008 4:52:11 PM

FNM $1.94 +11.49% ... at 01:35 PM EDT was $2.50

Jeff Bailey : 9/25/2008 4:51:21 PM

FRE $1.86 -1.58% ... at 01:35 PM EDT was $2.80.

Jeff Bailey : 9/25/2008 4:49:53 PM

Check out FNM and FRE intra-day charts ... that's about the time Senator Shumer reviewed Warrants

Tab Gilles : 9/25/2008 4:41:13 PM

JP Morgan (JPM) $43.46 +$2.96 (7.31%)

WJPAI January 2010 $45 Call $7.60 Bid/ $8.20 Ask

Jeff Bailey : 9/25/2008 4:29:23 PM

S&P Price/Earnings Ratio At 14.21, up from 13.93

dj- The price/earnings ratio of the Standard & Poor's 500 Index at the close of trading Thursday was 14.21. On Wednesday, the ratio ended at 13.93. 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 : 9/25/2008 4:27:54 PM

Smith & Wesson (SWHC) $4.28 +1.66% ... Curbs hunting long gun production

Jeff Bailey : 9/25/2008 4:16:06 PM

Research in Motion (RIMM) Earnings Press Release Link

Linda Piazza : 9/25/2008 4:14:46 PM

The TED spread was last at 3.03, well off its 3.37 high of the day but also well off its 2.88 low. The candle would be a doji at the top of the climb because the open was at 3.02, so there's the potential for a reversal. Please keep in mind, however, that these numbers are well above anything we've seen in most of our trading lives, including those who traded through the 1987 debacle. I didn't.

Jeff Bailey : 9/25/2008 4:13:51 PM

IWM 10-minute with "Bailey Wave" Link

That "bad tick" has QCHarts' WKLY Pivot levels for this week bonkers.

Keene Little : 9/25/2008 4:11:55 PM

The RUT (and IWM) has a very similar pattern as the others at the moment. Yesterday's low remains a key level now--break that and the bears win. Bound back tomorrow above today's high and the bulls win.

Jeff Bailey : 9/25/2008 4:08:53 PM

Research in Motion (RIMM) $97.65 +0.97% ... plunges to $90.00 on headline numbers.

Keene Little : 9/25/2008 4:08:48 PM

Jeff, trying to check the RUT now (for IWM). QCharts is dragging at the moment.

Linda Piazza : 9/25/2008 4:08:32 PM

Tomorrow we see. The SPX managed a bounce back above the daily 10-sma it had threatened to end the day below. The OEX bounced back above the important 558.30-ish area that was important near the close and that could have accelerated selling, if violated. However, there are a couple of important Fib levels (rally off the 2002 low into the 2007 high and decline off the 2000 high into the 2002 low) in the 560-562 level. The OEX ended the day at those and not clearly above them.

Jeff Bailey : 9/25/2008 4:02:38 PM

Wanted to see a close above DAILY R1 though too.

Jeff Bailey : 9/25/2008 4:01:06 PM

I think IWM bulls would want to see a Nh/Nl of 10:14 tonight.

Linda Piazza : 9/25/2008 3:54:10 PM

The OEX's daily 10-sma is now 556.59. It would still be a steep decline to fall below it by the end of the day, but that's something that bulls don't want to see happen. The SPX version is at about 1206.35, if I'm reading the partially covered up number correctly, and the SPX isn't so far away. (I like my much cheaper and so far very reliable charting program, but oh, how I miss some of QCharts' capabilities.)

Jeff Bailey : 9/25/2008 3:49:55 PM

Keene! Is this wave setup say anything about IWM $76?

Linda Piazza : 9/25/2008 3:49:53 PM

Keene, I wondered about the same thing, the buy-the-rumor, sell-the-fact possible effect. (See my 2:05 post.)

Linda Piazza : 9/25/2008 3:48:32 PM

OEX bulls don't want to see the OEX drop below the afternoon swing low of 560.00, particularly if it's confirmed by 10-minute closes below 560.68. For now, though, it's just all about positioning ahead of the overnight developments. I don't imagine that the GDP will have a big impact tomorrow morning, since it's a final, unless there's a big swing outside the prior numbers, but any number of other developments could change the market environment entirely. Another SEC rule? A surprise move by the FOMC? Some group of people in the Senate vowing not to approve the bill or determined to attach it to something that will complicate its approval? A huge bank failure in Europe? Evaluate the risk you're willing to take overnight.

Keene Little : 9/25/2008 3:48:25 PM

It's just possible that today was a buy the rumor, sell the news kind of day if the selling starts to take hold now (into tomorrow). The EW pattern is certainly set up for that possibility.

Jeff Bailey : 9/25/2008 3:48:44 PM

Fundamental Agreement on Rescue Plan (Update)

DJ- Top House and Senate lawmakers from both parties announced Thursday a "fundamental agreement" on a $700 billion bailout of the U.S. financial sector and predicted the measure would pass both chambers of Congress.

"I believe that we will pass this legislation before the markets open on Monday," Sen. Bob Corker, R-Tenn., said after a meeting that lasted more than two hours in the U.S. Capitol. However, one of the meeting's participants, Rep. Spencer Bachus, R-Ala., said "there is no deal yet."

News of the bill moving forward has helped ease uncertainty in the markets, lifting U.S. equity markets, the dollar and crude futures.

MARKET REACTION: U.S. stocks are higher - with the DJIA gaining more than 200 points - on signs of bailout plan progress.

The dollar is rangebound while awaiting details of the plan.

Treasurys and gold futures are down as they loose their safe-haven bid.

Crude oil futures settled more than $2 higher on bailout optimism.

KEY MEETING AT 4 P.M. EDT: The bipartisan congressional announcement was made before a 4 p.m. EDT meeting at the White House on the bailout plan with President George W. Bush, presidential candidates John McCain and Barack Obama and top congressional leaders.

OPTIMISM ON BILL SEEN ON BOTH SIDES: The group of lawmakers who announced the "fundamental agreement" would not go into details of the bill. House Speaker Nancy Pelosi, D-Calif., said: "We hope we will be able to bring a bill to the floor soon." Earlier, White House spokeswoman Dana Perino said, "We have made progress every day." However, she cautioned, "We certainly don't have a bill yet."

THE PLAN TAKES SHAPE: A Senate aide familiar with the agreement said the U.S. Treasury would not get $700 billion in one lump sum to buy toxic assets. Rather, that amount would be parceled out over time. The aide also said the plan allows the federal government to take warrants from firms benefitting from the plan and places limits on executive compensation.

Jeff Bailey : 9/25/2008 3:44:00 PM

Warrant mention was by good friend Charles Shumer Link

Jeff Bailey : 9/25/2008 3:39:59 PM

Warrant = Link

Jeff Bailey : 9/25/2008 3:39:03 PM

For those that may not know what a "warrant" is ... It is kind of like an option. Has a specified price associated with it.

For instance, could be Taxpayer gets a warrant to buy X-number of shares of FNM at $X.XX per share, exercisable in 2012.

Jane Fox : 9/25/2008 3:37:46 PM

Well it looks like lawmakers have agreed to the legislative principles that will approve Treasury's request for $700 Billion, at least part of it. Treasury will have access to $250 Billion immediately and another $100 billion to follow shortly thereafter but Congress has left the balance on the table with the provision it will block it if unhappy with some details.

Linda Piazza : 9/25/2008 3:37:01 PM

VIX still dropping. The VXO is, too, although it's not dropping much.

The RVX, however, is not at a new low right now: it's not below the 1:45 pm ET one. It's turning back from resistance, so perhaps it will hit a new low but for now, it's showing some divergence with the other volatility indices. This is minor, though. So far.

Jeff Bailey : 9/25/2008 3:35:21 PM

Let's call it the "Buffett rule" ...

Jeff Bailey : 9/25/2008 3:35:08 PM

I like that idea ... Need warrants for taxpayer from those that will participate.

Jeff Bailey : 9/25/2008 3:33:43 PM

OIH +1.19% and DDX +0.68%

Jeff Bailey : 9/25/2008 3:33:17 PM

HUI.X -2.09% ... eveything else now green.

Linda Piazza : 9/25/2008 3:31:00 PM

The OEX has just hit potential resistance on 10-minute closes at 565.66. It's successfully averted the appearance of a H&S on its 10-minute chart, but so far this just counts as a possible kiss-goodbye test. Be careful about your assumptions here. I would expect those who want markets to steady to try to drive it to an equal high or even higher-high level, but I don't know that such a test would be successful. It's just what I would expect. OEX at 564.85 as I type.

Jeff Bailey : 9/25/2008 3:26:33 PM

See where the HIGH debt/equities are?

Can't see why SEC feels IBM needs the protection.

Jeff Bailey : 9/25/2008 3:22:38 PM

Tesoro (TSO) $20.05 +6.44% ... takes a look at 2-month high.

Linda Piazza : 9/25/2008 3:22:03 PM

Potential H&S on the A/D line's chart. Doesn't mean it will be confirmed or that it will meet any downside targets if it is, but be aware that it's there. Potential resistance on 15-minute closes at 1590; potential support at 1262. A/D line at 1505.

Jeff Bailey : 9/25/2008 3:21:35 PM

Again ... I'd STRONGLY suggest a fundamental trader check actual EARNINGS REPORTS.

QCharts, or any service provider good for quick observations, but wouldn't rely heavily on them.

Jeff Bailey : 9/25/2008 3:20:22 PM

SPX Heavyweights P/E on left, but maybe more important is Debt/Equity on right. Can go back and look at past Heavyweight posts and monitor changes. Link

Keene Little : 9/25/2008 3:19:59 PM

SPX tagged the 62% retracement level (1214.72) of this afternoon's decline so it's a good place to be short. Makes for a relatively tight stop.

Linda Piazza : 9/25/2008 3:19:55 PM

I know what everyone is telling us about what will happen if that plan is approved. What are your charts telling you? What do your charts tell you about the risk of staying long overnight? Of testing a bearish trade and keeping it open overnight? You heard Jane mention that there were whispers about a Fed cut tomorrow morning, but what new objections in addition to Shelby's (Republican senator on CNBC) will be added to the not-a-rescue-not-a-bailout plan by tomorrow morning? What other measures will be tacked onto it, such as a new stimulus bill? What could complicate its adoption and how will market participants feel about what's been done? How many shorts have already covered, fearful of what else the SEC will add to any no-shorts rule, so how many are left to help fuel this supposed huge bounce?

Jeff Bailey : 9/25/2008 3:16:25 PM

DVN ... sells Cote d'Ivoire operations. Gross $205M, Net proceeds from sale $164M. Has now divested fully in all producing oi and gas properties in Africa.

Linda Piazza : 9/25/2008 3:16:37 PM

The OEX closed the last 10-minute period at or slightly below the rising 10-minute 9-ema, now at 563.38 and it's zooming right up to next potential resistance on 10-minute closes, now at 565.23.

Let's raise our hands. How many are tired of this zooming around?

The OEX hasn't completely undone further downside targets, but they're in question now. What we have is a potential kiss-goodbye test, and I would extend that potential kiss-goodbye resistance level up to the rising trendline under the OEX's former rising wedge. That's now at about 566.80 but rapidly rising toward an above 567 level. OEX at 564.23 as I type. Since this is a possible kiss-goodbye test, it's even more important to be watchful of rollover potential.

Jeff Bailey : 9/25/2008 3:14:40 PM

Devon Energy (DVN) $102.77 +1.16% ... breaking some news here on asset sale.

Linda Piazza : 9/25/2008 3:12:15 PM

What are some of the scheduled releases and events on foreign bourses tonight? (By the way, I'm not sure these have nearly as much relevance as what's happening on the markets.) First, Federal Reserve Bank of Dallas's President Richard Fisher speaks tonight in New York at 7:30 pm ET. He is expected to take questions. At 7:45 pm, Federal Reserve Bank of Philadelphia's President Charles Plosser, also a voting member, will speak in Chicago, his topic "Creidt Market Turmoil of 2007-08: Implications for Public Policy." I don't know if he's taking questions, but I bet people attending that conference will have plenty!

Japan's CPI and Tokyo CPI will be released at 7:30 pm. Germany's Import Prices will be released at 2:00 am ET tomorrow morning, and its Preliminary CPI will be released overnight, too, although I'm not sure of the time. One calendar lists "All Day" and the other shows midnight. That's all that I see until our numbers start coming in with tomorrow morning's final GDP at 8:30 am ET. Jane will probably cover the U.S. releases.

Jeff Bailey : 9/25/2008 3:11:05 PM

If you don't have a put, maybe now.

Jeff Bailey : 9/25/2008 3:10:49 PM

Let's jot that one down for a possible trade should all stocks jump on a rescue plan.

Jeff Bailey : 9/25/2008 3:09:54 PM

DRC-WG $2.80 x $3.00 with DRC $34.50 with VIX.X 32.82

Jeff Bailey : 9/25/2008 3:07:18 PM

NBR Link

DRC Link

Jeff Bailey : 9/25/2008 3:05:56 PM

Probably a valuation call on NBR, and vulnerability call on DRC

Jeff Bailey : 9/25/2008 3:05:18 PM

Dresser-Rand (DRC) $34.50 -1.42% ... Morgan Stanley cuts to "equalweight" from "overweight"

Jeff Bailey : 9/25/2008 3:03:19 PM

CNBC ... reporter just saying something about "gold coin" inventory depleted?

Jeff Bailey : 9/25/2008 3:02:14 PM

$50 to $25.

Linda Piazza : 9/25/2008 3:02:01 PM

The OEX almost dipped to the first target shown on the 10-minute chart, at about 559.82 currently. The potential for a further dip, to 557.90-557.91, exists, too. with this level showing up on both the 10- and 15-minute charts. Watch now, however, as the OEX rises again toward the 10-minute 9-ema. Sustained 10-minute closes back above that average would question any further downside targets and sustained closes above 564.69 would erase them. The 9-ema is currently at about 562.80 with the OEX at 562.55 as I type.

Jeff Bailey : 9/25/2008 3:01:50 PM

Good gravy ... NBR has been taken out to the wood pile of late hasn't it?

Jeff Bailey : 9/25/2008 2:55:10 PM

I thought we might want to get out of the SLV underlying (options a different story, but no options on SLV).

Jeff Bailey : 9/25/2008 2:54:07 PM

Good tension for some dollar / gold/silver traders.

Juuuust when you think

Keene Little : 9/25/2008 2:52:55 PM

The move down from this afternoon's high has now confirmed it's impulsive with this drop right here--it's now a 5-wave move. Expect a bounce at any time now to retrace some Fib portion of this afternoon's drop. Assuming we'll get the bounce it would be the shorting opportunity.

Jane Fox : 9/25/2008 2:52:46 PM

The scuttlebutt on the Street is that the Fed is ready to cut rates 50 basis points and many think it will happen before the markets open on Monday.

Jeff Bailey : 9/25/2008 2:52:36 PM

See ... Republican has a problem too.

Jeff Bailey : 9/25/2008 2:51:50 PM

YM 11,018 ... DAILY R2

Jeff Bailey : 9/25/2008 2:51:11 PM

NYSE a/d 2,210/867

Jeff Bailey : 9/25/2008 2:50:55 PM

TRIN alert! 1.05 ... session high.

Jeff Bailey : 9/25/2008 2:49:30 PM

I think Tab covered CHK's cut back plans yesterday. Link

Jeff Bailey : 9/25/2008 2:48:02 PM

NBR's company profile Link

Jeff Bailey : 9/25/2008 2:46:48 PM

Nabors Industries (NBR) $26.45 +0.53% ... raised to "overweight" at Morgan Stanley. Had "underweight"

Linda Piazza : 9/25/2008 2:45:15 PM

Based on the evidence on the 10-minute chart, the OEX now looks vulnerable to 559.75 and maybe even 557.91. If the OEX should drop toward that 559.75 level, however, I would watch for bounce potential beginning there. If the OEX starts closing 10-minute period above the 9-ema, now at 563.11, again, however, that downside target is questionable. If it closes them above 564.43, it's erased.

Jeff Bailey : 9/25/2008 2:44:24 PM

I'm thinking we need a communist, a socialist, a free market ... Maybe that's part of what Senator Frank is thinking ...

Jeff Bailey : 9/25/2008 2:42:58 PM

CNBC guest ... "Frank wants Unions on the board" ... take a note of that.

Jeff Bailey : 9/25/2008 2:40:43 PM

GE $25.67 +4.39% ... per earlier comment/observation. GE and SPY calibrated.

Jeff Bailey : 9/25/2008 2:40:08 PM

OK ... SPY $120.94 after dead-stop at WKLY Pivot.

Linda Piazza : 9/25/2008 2:39:18 PM

The OEX's 10-minute 9-ema is now 563.36, and that's potential resistance on 10-minute closes. Further resistance is now at 564.30 on 10-minute closes.

Jeff Bailey : 9/25/2008 2:39:10 PM

Bid-to-cover was 1.63

Jeff Bailey : 9/25/2008 2:38:29 PM

IRX.X up 33 bp at 0.77%

Jeff Bailey : 9/25/2008 2:38:11 PM

DJ- NY Fed TSLF: $61.2 Bln Bids Submitted vs. $37.5 Bln Accepted

Jeff Bailey : 9/25/2008 2:37:16 PM

dj- Senator Gregg: No rescue deal yet, but "significant progress"

Jeff Bailey : 9/25/2008 2:32:52 PM

02:00 Internals found at this Link

Keene Little : 9/25/2008 2:33:28 PM

Well I see SPX needed to make one more stab up since my last post in order to make another attempt at that 1220.10 Fib projection (it made a high of 1220.03--clearly close enough this time). The sharper pullback since that last high has me thinking we've at least seen the high for the day (never can tell with this market). The decline is looking impulsive so that's another sign that we might have seen the high so shorting the next bounce against today's high would be a recommended play (give it some wiggle room above today's high but not much).

Assuming we'll get a pullback this afternoon I hope to get a sense from it whether it will just consolidate or is the start of the next big decline.

Linda Piazza : 9/25/2008 2:31:14 PM

At 1207.03 just a few minutes ago, the SPX has come very close to that 1206.25 level that I mentioned might be support on 15-minute closes, at least for a short-term bounce, whether it was sustained or not. I don't know that this support will hold on 15-minute closes, but if you tried a bearish trade at some point, then you should watch for the possibility of a bounce back up toward 1212.40-1214.75. It's not a given but it's a possibility. Bears want another rollover there that takes the SPX down below about 1204.50 but bulls want a strong bounce back through that level and into a new high. SPX at 1209.58 as I type.

Jeff Bailey : 9/25/2008 2:30:06 PM

HUI.X -1.74%, OIH -0.22, DDX -0.16%

Jeff Bailey : 9/25/2008 2:29:43 PM

DDX.X -0.16% ... slips red.

Jeff Bailey : 9/25/2008 2:27:47 PM

What I can say about the VIX.X at what I would consider to be "elevated" levels, a put/call BUYER wants to stay CLOSE to the AT-THE-MONEY on an option entry. ESPECIALLY THE CALL SIDE.

Linda Piazza : 9/25/2008 2:25:31 PM

Earlier today, I pointed to a benchmark you could watch for the earliest--and perhaps false--sign of a change in tenor in the OEX. That would be when the OEX stopped finding support on the 10-minute 9-ema and stopped bouncing from it. The OEX has just closed two consecutive 10-minute periods beneath that 10-minute 9-ema and it's dropped fast enough to start turning it down. Therefore, I would now watch for the possibility that moving average could be resistance on 10-minute closes. That moving average is now at 563.26, with further potentially strong resistance on 10-minute closes at 563.98. The OEX is 560.88 as I type.

Jeff Bailey : 9/25/2008 2:26:02 PM

See ... this is going to another "problem" ... what ANY senator says, and the way they VOTE on the plan.

"I was the only one that said Iraq was a bad idea ..."

"I was the only one ... "

Or ... thought up to amend some past government programs. (wink)

Jeff Bailey : 9/25/2008 2:22:26 PM

HUI.X -2.12% and OIH -0.23% just slipping red.

Jeff Bailey : 9/25/2008 2:20:41 PM

Volatility measures warnings ... I think I'd better just say it again

REMEMBER that the SEC has a NO SHORT on many of the financials.

The ONLY WAY to hedge a long is to BUY A PUT on the financial stock.

The options MARKET MAKER has a problem too.

SO, VIX.X may remain ELEVATED, and if you deem VIX.X very important and tied to market direction and are trading SPX/SPY/ES off of VIX.X and the trade starts getting away from you, even though VIX.X ain't moving like you think it should to "confirm," understand the DYNAMICS and the CHANGES the last week.

If the RULES of the game change, then traders need to change, or make some compensating adjustments.

Linda Piazza : 9/25/2008 2:18:54 PM

I would not be surprised to see the SPX find support on 15-minute closes near 1206.25 if it should continue declining. That could be prompt a bounce, but whether it would be a sustained one or not remains questionable.

Linda Piazza : 9/25/2008 2:15:27 PM

OEX bulls want to see 10-minute closes above 563.50. For the SPX, that's about 1215. All day today, the OEX has been stronger than the SPX on a Keltner basis and that remains true now. OEX at 563.43 as I type and the SPX, 1213.20.

Linda Piazza : 9/25/2008 2:05:59 PM

"Will it work?" they're asking on CNBC, and those of you who have expected a big pop on the conclusion of the resolution plan should keep that question in mind. There's the possibility and has always been of a buy-the-rumor, sell-the-fact reaction. I don't have a clue if that will happen, but the setup is and has always been there today. We sometimes have the strongest upside breakouts out of such setups . . . but, oh, wait, that was when we had shorts to cover when they got surprised.

Jeff Bailey : 9/25/2008 2:02:01 PM

Not much reaction shows up in USO. Thought that might of been the little pop from $85.50. Could'a been the way some trade observations have been of late.

Jeff Bailey : 9/25/2008 2:00:21 PM

Time stamp was 01:35 PM EDT.

Jeff Bailey : 9/25/2008 1:59:54 PM

Alert! ... Venezuela, Russia To Creat Oil Consortium

dj- Venezuela's President Hugo Chavez and Prime Minister Vladimir Putin are aiming to create a giant oil consortium to invest in joint oil ventures. "They've offered us the chance to create an oil consortium...the largest in the world," Chavez said in televised remarks from Moscow. The consortium would include, Petroleos de Venezuela SA, PdVSA, Lukoil Holdings (LKOH.RS), TNK, OAO Rosneft (ROSN.RS) and OAO Gazprom (GAZP.RS), he added. The ambitious venture would seek to invest in several joint projects. Part of the plan would include the creation of a PdVSA Bank, Chavez said, which would help finance these projects.

Jeff Bailey : 9/25/2008 1:54:58 PM

GE says today that "we're not going there as much anymore" ...

Linda Piazza : 9/25/2008 1:54:30 PM

Think that standard technical analysis tools don't matter on market breadth indicators such as the A/D line? I like watching them with some of my standard tools I would use on any entity. Although it might be "crying wolf," this A/D chart still suggests that you exercise care if in bullish trades: Link I noted all day that if the A/D line should approach the 1700-1760 levels (it changed slightly during the day) that you should exercise care with your bullish trades, so this isn't a new warning. It might not be needed, but it never hurts to beef up your profit-protecting plan.

Jeff Bailey : 9/25/2008 1:54:07 PM

CAT goes to bond market, pays probably a higher rate due to "crunch" that policymarkers trying to agree on in order to ease.

Jeff Bailey : 9/25/2008 1:50:35 PM

See ... Buffett's got some cash sitting on the sidelines, he uses some of it for GS at "fire sale" price.

Jeff Bailey : 9/25/2008 1:49:47 PM

That's why I posted the "PMI will be watched" ...

Jeff Bailey : 9/25/2008 1:49:18 PM

There ... S&P: Warns of Capital-Goods Slowdown for US Companies

Jeff Bailey : 9/25/2008 1:44:11 PM

Interesting ... SHY -0.27%, IEI -0.66%, IEF -0.66%, TLH -0.88%, TLT -0.54%, MUB +0.63%, LQD -0.02%, HYG -1.98%

Jane Fox : 9/25/2008 1:43:28 PM

Dateline NPR.com - Sen. Chris Dodd, the chairman of the Senate Banking Committee, said Thursday that Democrats and Republicans had reached "fundamental agreement" on the proposed $700 billion rescue plan for Wall Street and that approval was likely in the next few days.

Emerging from a two-hour negotiating session, Sen. Chris Dodd, D-Conn., said, "We are very confident that we can act expeditiously."

"I now expect that we will indeed have a plan that can pass the House, pass the Senate (and) be signed by the president," said Sen. Bob Bennett, R-Utah.

President Bush plans to meet at about 4 p.m. with Democratic and Republican leaders from the House and Senate, as well as presidential candidates John McCain and Barack Obama.

Linda Piazza : 9/25/2008 1:42:36 PM

Another slight new high for the OEX. The potential upside target for the OEX, as well as potentially strong resistance on 30-minute closes is now near 569.56. Be careful with your bullish trades as this is more closely approached. Don't count on every penny of the upside target being achieved, if the market tenor should show signs of changing. Hasn't changed yet, though, has it?

The VIX finally did drop to a new low of the day to match the new highs being made.

Jeff Bailey : 9/25/2008 1:39:58 PM

VIX.X 32.67 -7.16% ... session low

Jeff Bailey : 9/25/2008 1:38:50 PM

Speaking of cash ... IRX.X 30-minute intervals with WKLY Pivots turned on (chart from last couple of Wednesday Wraps) Link

Jeff Bailey : 9/25/2008 1:35:47 PM


BB NH/NL 122:318

Jeff Bailey : 9/25/2008 1:35:07 PM

NYSE NH/NL 7:108


Jeff Bailey : 9/25/2008 1:30:57 PM

VIX.X 32.92 -6.45% ...

Jeff Bailey : 9/25/2008 1:30:37 PM

OK ... need some CASH to make'em move.

VIX moves based on call buyers/put sellers vs. call sellers/put buyer though.

Jeff Bailey : 9/25/2008 1:28:46 PM

DXY 30-minute interval chart with WKLY Pivots turned on Link

Keene Little : 9/25/2008 1:26:56 PM

I just walked back in the door but need about another hour to make some follow-up phone calls before I can sit down to study what's going on. But just a quick comment based on what I see today. The a-b-c bounce pattern off Tuesday's low might have finished at today's high of 1219.62 so far. The 2nd leg up would achieve 162% of the 1st leg up at SPX 1220.10 (close enough?). 30-min chart update: Link

If that's the correct wave count then we've got a strong decline as the next move (perhaps from bailout disappointment). Otherwise a continuation higher from here should get SPX above 1250 which is needed for the short-term bullish scenario (pink).

Jane Fox : 9/25/2008 1:26:53 PM

Jeff, Linda has updated the subscribers on the VIX/SPX which I think is the most important internal there is.

Linda Piazza : 9/25/2008 1:26:42 PM

The A/D line has finally hit its upside target on the 15-minute chart, one I've been mentioning but I really was sure would be seen. That target and potentially strong resistance is now about 1705. Of course, the A/D line can break out just as it did on Friday morning, but this is typically a sign to tighten up bullish stops on NYSE-traded stocks and indices composed heavily of those stocks. I wouldn't be surprised to see the A/D line go on testing that resistance for a bit. A/D line at 1557 as I type, having pulled back off its 1736 high.

Jane Fox : 9/25/2008 1:25:33 PM

Linda, thank you for updating the VIX. I don't seem to have reliable data today and would never make a trading decision based on data that is not reliable.

Jeff Bailey : 9/25/2008 1:24:53 PM

What do you need Jane?

Jane Fox : 9/25/2008 1:23:19 PM

Looks like the rescue plan is getting closer to completion and the markets like it. I can't show you charts today because I have huge gaps in my data today :(

Obama and McCain should just stay away from DC for now and let Congress deal with the financial situation and not have to contend with campaign posturing. I don?t see them adding anything as I don?t see Bush adding any value either.

Linda Piazza : 9/25/2008 1:21:15 PM

Once again, the OEX could not maintain its attempt to break out of that rising wedge, not even into a 15-minute close.

Linda Piazza : 9/25/2008 1:12:46 PM

The OEX's potential upside target on its 30-minute chart is now 569.61, nearly coinciding now with the 23.6% retracement of the rally from Thursday's low to Friday's high. The closer the OEX approaches that ptoential resistance, the more protective of my bullish profits I would be.

Jeff Bailey : 9/25/2008 1:12:29 PM

EEM $36.98 +4.93% ... Makes a move above WKLY Pivot.

Jeff Bailey : 9/25/2008 1:11:35 PM

UNG $35.89 +2.10% ... finding some buyers above WKLY Pivot.

Jeff Bailey : 9/25/2008 1:10:15 PM

dj- Senator Dodd: Both Sides Agree On Fundamentals of Rescue Plan

Linda Piazza : 9/25/2008 1:10:02 PM

The VIX is not yet at a new low as the SPX is hitting a new high of the day. Jane has taught us to watch these divergences.

I'm glad I kept warning bears that the setups we were seeing weren't invitations to pile into bearish positions, but I still keep offering the warnings to bulls to keep updating their profit-protecting plans because I keep seeing bearish potential that, fortunately for them, has not yet been realized. Just be aware they're there.

Jeff Bailey : 9/25/2008 1:08:01 PM

CBOE Most Active Calls/Puts found at this Link

Linda Piazza : 9/25/2008 1:06:56 PM

The OEX is peeking back above the top of that rising wedge again. As I've been saying, it needs to climb above that wedge and stay above it, as a rising wedge is not typically a strong way to climb. There are times in market history when you see these wedges consistently broken to the upside, but they're typically considered bearish.

What the 566.60 area for potential resistance. If the OEX pulls back from that, bulls would prefer that it stay above about 564.30 or at least maintain 10-minute closes above the rising 10-minute 9-ema, now at 563.36.

Jeff Bailey : 9/25/2008 1:04:03 PM

IF the RUT.X were to close here next Tuesday, then Q4 Pivot levels would be ... 590, 650, Piv= 707, 767, 824

Jeff Bailey : 9/25/2008 1:00:56 PM

@ 12:57 PM EDT ... RUT.X was 710.

Jeff Bailey : 9/25/2008 12:58:06 PM

TARGET on the DIW-JS is $76 in the underlying IWM

Jeff Bailey : 9/25/2008 12:56:52 PM

RVX.X 36.47 -6.15% ...

Jeff Bailey : 9/25/2008 12:56:37 PM

Swing trade long call alert! ... for one (1) of the iShares Russell 2000 IWM Oct. $71 calls (DIW-JS) at the offer of $2.49.

IWM $70.92 +1.40% ...

Linda Piazza : 9/25/2008 12:56:22 PM

The OEX pushed up to 564.17, the then-current top of that rising wedge on its 5-minute chart, but it couldn't pop above it, much less stay above it. The OEX is trying again, though, and has just popped above the 564.35-ish top now. It needs to stay above this or else we must conclude the breakout a false one. Oops, OEX back at 563.67 as I type, getting knocked back.

Jeff Bailey : 9/25/2008 12:52:15 PM

IRX.X up 29 bp at 0.73% ... WKLY Pivot 0.66% ... watch your VIX.X closely here.

Jeff Bailey : 9/25/2008 12:47:55 PM

Brazil Trade Surplus (May, June, July, Aug, and Sep forecast(s)) Link

Linda Piazza : 9/25/2008 12:47:33 PM

Here's a benchmark you can use if trading the OEX for a very early--and perhaps false--sign that something had changed in tenor. All day, the OEX has been finding support on 10-minute closes at its 10-minute 9-ema, now at 562.25, and bouncing from it. The SPX has been doing the same. The SPX's is now at 1211.76, with further potentially strong support on 10-minute closes at 1210.37.

Jeff Bailey : 9/25/2008 12:44:10 PM

RIO $21.91 +3.68% ...

Jeff Bailey : 9/25/2008 12:43:52 PM

PBR $48.20 +6.44% ...

Jeff Bailey : 9/25/2008 12:43:31 PM

dj- Survey: Brazil Sep Trade Surplus Fueled By Strong Exports

(partial) - Brazil will likely see an increase in its monthly foreign trade surplus in September due to strong exports of raw materials, eclipsing the continued rise in imports. The median forecast of eight analysts consulted by Dow Jones Newswires was a September trade surplus of $3.5 billion. The projected figure is above the actual August surplus of $2.27 billion and the surplus of $3.48 billion seen in September of 2007. "Exports came in strong in September and I have therefore revised my trade surplus forecast for the month to $3.2 billion from $2.9 billion," said Roberto Padovani, an economist at WestLB bank in Sao Paulo. Behind the vigorous exports is continued hefty demand for raw materials, despite the current global credit crisis. "We saw a strong increase in exports of iron ore and heavy oil and it impacted the surplus during the month," said Flavio Serrano, an economist at the BES Investimento fund in Sao Paulo. "Although a reduction of demand for raw materials is expected later in the year due to the current global environment, so far it has not occurred." Contributing to the expected September surplus versus a year ago is the fact that this year the month had a total of 22 working days versus only 19 working days in the year-ago period. "The difference in working days had an impact of 16% on trade transactions," said Alex Agostini, an economist at the Austin Asis consultant group.

Linda Piazza : 9/25/2008 12:43:19 PM

Potential upside target for the A/D line is now about 1730. The A/D line is 1559 as I type, testing the previous 1583 high of the day. So far so good, but bulls, keep updating those profit-protecting plans.

Jeff Bailey : 9/25/2008 12:39:43 PM

One of the more focal point econ reports near-term is going to be the pruchasing managers reports.

Linda Piazza : 9/25/2008 12:37:32 PM

The OEX's climb is beginning to take on the look of a narrowing rising wedge. The top of that wedge is currently about 564.10, and the OEX needs to push above that and sustain levels about that to erase that look of a rising wedge, usually not the strongest pattern in which to rise. In fact, it can help pinpoint weakness. Remember, would-be bears, that if the OEX breaks down out of that wedge, with the bottom now at about 562.10, it could be just widening the formation into a regular old rising channel, a stronger form at least. OEX at 562.97 as I type.

Jeff Bailey : 9/25/2008 12:36:20 PM

12:00 Internals found at this Link

Jeff Bailey : 9/25/2008 12:31:38 PM

52-week % winners? XNG.X +7.94% and TRAN -0.38%

Jeff Bailey : 9/25/2008 12:30:40 PM

OIX.X 781.14 +2.16% ... among a long list of "sector winners"

Jeff Bailey : 9/25/2008 12:30:10 PM

USO $86.73 +2.16% ... finds a bit of a bid.

Jeff Bailey : 9/25/2008 12:28:30 PM

FXE 156.68 +0.15% ...

FXY 93.60 -0.49%

FXB 184.31 -0.45%

Linda Piazza : 9/25/2008 12:23:31 PM

The OEX so far maintains its upside target on its 30-minute chart, now at 570.34, but I again warn of potential resistance beginning about 569.25 if the OEX should rise that far. In fact, I continue to be concerned about this chopping around either side of the 38.2% retracement of the climb from Thursday's low to Friday's high, with that at about 560.40.

Jeff Bailey : 9/25/2008 12:23:30 PM

Will note near-overlap of SPX's YRLY S2 and WKLY Pivot.

Jeff Bailey : 9/25/2008 12:22:44 PM

NYSE a/d 2,187/792

Jeff Bailey : 9/25/2008 12:22:24 PM

SPX 1,212.87 +2.27% ...

Jeff Bailey : 9/25/2008 12:22:02 PM

VIX.X 33.06 -6.05% ...

Jeff Bailey : 9/25/2008 12:21:42 PM

DXY 76.99 +0.28% (30-minute delayed) ... sticks its head back above WKLY S1.

Jeff Bailey : 9/25/2008 12:18:31 PM

If one "piece of the puzzle" that has the SEC implementing a "no short" rule on various stocks, it "has to be" the tight credit market (see recent commercial paper rates).

Today we see (09:58:34) making an adjustment. Stock whips back higher.

When I listened to recent Q&A, I "sensed" Paulson was in great agony. Doing things (no short rule / govt. intervention) that really went against his free-market beliefs.

But doing, what he felt, was necessary.

At times, I think he was chewing on his tounge, not wanting to "say in public" how afraid banks are to lend right now.

Jane Fox : 9/25/2008 12:15:14 PM

I'm not sure what is going on but I did not have a VIX earlier today and it has once again gone missing. Hard for me to work without the VIX.

Linda Piazza : 9/25/2008 12:13:34 PM

An OEX pullback here would be natural as the OEX had risen into potentially strong resistance. Bulls just don't want sustained 30-minute closes beneath 558.87 and particularly not beneath 557.90. Until that happens, though, I would watch for potential support in that zone if the OEX should pull back that far.

I agree with Jeff's assessment that bears should be very careful here, and all day I've been suggesting that the signs we're seeing are not invitations for bears to pile on but rather warnings for bulls to keep updating their profit-protecting plans. I would just add something to that caution: bulls need to be careful, too. Although our emotions and the news we're hearing tell us to expect a big pop if there should be any settlement, some of the setups are screaming warnings to be careful.

Jeff Bailey : 9/25/2008 12:12:33 PM


DJ- General Electric lowered its 3Q and full-year earnings guidance and announces a number of major moves, including suspending stock buyback and halting dividend increases, to strengthen its capital and liquidity. CEO Jeff Immelt says moves are merely prudent amid an unprecedented environment.

Jeff Bailey : 9/25/2008 12:11:11 PM

GE $25.42 +3.37% ... nice turn around. Session high marked by WKLY Pivot $25.92.

Jeff Bailey : 9/25/2008 12:09:51 PM

IRX.X up 16 bp at 0.60% ...

Jeff Bailey : 9/25/2008 12:08:58 PM

QRTRLY R2 at 30.18

Jeff Bailey : 9/25/2008 12:08:34 PM

MNTHLY R2 down at 26.27.

Linda Piazza : 9/25/2008 12:08:08 PM

The SPX and OEX are just hanging around near their highs. I'm noting that while they made a new high, the A/D line did not, but sometimes those divergences don't play out in any negative way for price action. It's just something to keep on the radar screen if you're long.

Another thing to keep on the radar screen is that the OEX is sinking back below the potentially strong S/R level on the 15-minute chart now at about 561.80. It's not a big thing yet, but you don't really want to see the OEX slip back below these after popping above them.

The third thing to keep on your radar screen is that the VIX is indeed bouncing after hitting its H&S target, as mentioned in my 11:47:57 post. It's not bouncing much, and I see it having potentially significant resistance on 15-minute closes up to about 33.75-34.00, so until it scrambled back above that, the bounce isn't anything but a bounce attempt. For OEX traders in particular, it should perhaps be noted that the VXO has not yet even violated its analogous S/R level, so it didn't turn it into potential resistance. It's testing it now, with that potentially strong support on 15-minute closes at 36.36 and with the VXO at 36.96. There's bounce potential here.

Jeff Bailey : 9/25/2008 12:07:49 PM

Bears need to be VERY careful in here.

VIX.X 33.22 -5.59% ... spending some time UNDER wkly pivot.

Jeff Bailey : 9/25/2008 12:06:39 PM

Excellent, excellent comment/analysis from Rick Santelli regarding "premiums" in es pit. Could be a "rocket ship"

Jeff Bailey : 9/25/2008 12:02:24 PM

UK's Brown: Intl. Financial System Must Be Rebuilt

Linda Piazza : 9/25/2008 11:47:57 AM

Careful, bulls, the VIX has hit the downside target of its H&S, confirmed this morning when the VIX dropped below the neckline. That H&S had been forming over Tuesday and Wednesday. Hitting the downside target doesn't guarantee that it will rise, but it's another potential sign to update your what-if profit-protecting plans.

Linda Piazza : 9/25/2008 11:35:56 AM

Potential upside target for the OEX is now 570.71, but if the OEX keeps rising, I would carefully watch the 569.25 zone for potentially strong next resistance on 30-minute closes to begin. I would be particularly watchful if the A/D line should reach close to 1750-1760 as that resistance was being tested.

Because of the extreme levels seen in the A/D line, backed up by extreme Keltner setups and RSI levels, bulls should keep updating their profit-protecting plans. As I've seen saying all day, none of this suggests that bears should be piling on, but there's reason, whether those reasons see fulfillment or not, to be cautious with your bullish trades.

Linda Piazza : 9/25/2008 11:31:13 AM

New high for the OEX.

Linda Piazza : 9/25/2008 11:30:42 AM

Although the OEX has popped above the potentially significant resistance on 30-minute close and is perching 30-minute candles above it, the SPX has not done the same. The analogous resistance level for the SPX is currently about 1210.30 on 30-minute closes, and that's so far been holding as resistance on each each close. It's being tested again as I type, with the SPX at 1210.46.

Jeff Bailey : 9/25/2008 11:22:40 AM

Most Actives ... FRE $2.64 +39.15%, SPY $120.50 +1.32%, AIG $3.89 +17.52%, QQQQ $41.47 +1.51%, FNM $2.22 +27.58%, GE $24.71 +0.48%, MSFT $26.49 +2.99%, WM $2.06 -8.84%, UYG $19.42 +3.51%, INTC $18.69 -0.05%

Jeff Bailey : 9/25/2008 11:15:24 AM

VIX.X 33.44 -4.97% ...

Jeff Bailey : 9/25/2008 11:15:07 AM

UNG $34.65 -1.42% ...

Jeff Bailey : 9/25/2008 11:14:53 AM

Swing trade NAKED put filled alert! UNE-VF $0.70 x $0.75

Tab Gilles : 9/25/2008 11:12:36 AM

For those who want to step into financials, you know I believe JP Morgan to be best of breed. So do you buy prior to the Congress passing a bill or wait?

I would say take a partial position here, one long term call option (LEAPS) that I prefer here is January $45 2010 Call, ticker symbol WJPAI. Currently $7.55 Bid/ $7.85 Ask.

Suggest taking a 1/2 position, set stop at $6.00

Jeff Bailey : 9/25/2008 11:11:21 AM

VIX.X 33.37 -5.17% ...

Jane Fox : 9/25/2008 11:11:54 AM

Obama says in Clinton Global Initiative speech via satellite that "failure to act" on bailout plan would have "grave consequences." Obama said it is "outrageous" that taxpayers must "bear burden" for Wall Street "greed and risk."

Well ya but I'm sorry we cannot lie this entirely at Wall Street's feet. There are many others culpable as well.

Jeff Bailey : 9/25/2008 11:10:28 AM

Disclosure: I currently hold bullish position in UNG.

Jeff Bailey : 9/25/2008 11:10:08 AM

Swing trade sell NAKED put alert! ... let's sell one (1) of the US Nat. Gas Fund UNG Oct. $32 Puts (UNE-VF) for a LIMIT price of $0.70.

UNE-VF $0.60 x $0.75

UNG $34.94 -0.59% ...

Roughly 1/3 position if filled, or ever exercised $32 - $0.70 = $31.30.

Linda Piazza : 9/25/2008 11:05:25 AM

The OEX closed that last 30-minute period at the Keltner S/R line now at about 558.80 and continues to test it. It's nominally holding as support, but I consider this a test and not a confirmation that the OEX isn't going to dip back into that congestion zone from the last two days. The OEX is 559.42 as I type.

The A/D line is 1282, having pulled back. Bulls don't want it to spend a lot of time beneath 900.

Tab Gilles : 9/25/2008 11:04:49 AM

JP Morgan/Chase (JPM) $43.14 +$2.64 (6.5%) Best of Breed!

Past Charts from June/July:

Link Link Link

PnF Bullish, PO $73, Link

Tab Gilles : 9/25/2008 10:55:12 AM

$WTIC:$NATGAS, natural gas is cheap relative to crude oil. Support $7...PnF Price Objective $16.5. Link

UNG $35.00 -$0.15 Link PnF $46 Link

CHK $40.10 =$0.38 Link PnF Pice Objective $58 Link

Linda Piazza : 9/25/2008 10:48:41 AM

As Tab noted, the TED spread has pulled back off the 3.37 high that I had posted earlier this morning, but for those who didn't see that early morning post, I want to repeat some information from it: the TED spread is above its last-Thursday level. What's more striking is, it's above the 1987 level. My delayed quote shows 3.27 as I type.

Linda Piazza : 9/25/2008 10:46:31 AM

The TRAN finally made it above yesterday high (yesterday's opening print of 4797.51), but it's slipped back below it again. It's at 4784.63 as I type. Bulls would just rather that the TRAN have led not lagged.

Jeff Bailey : 9/25/2008 10:46:13 AM

I thing "the plan" is for those that do want to be able to buy a home, CAN buy a home with a loan from a bank.

Jane Fox : 9/25/2008 10:44:45 AM

WASHINGTON (MarketWatch) -- As the world watches for progress on the massive rescue plan in Washington, the Bush administration plans to meet Thursday with presidential hopefuls John McCain and Barack Obama as well as with leaders of Congress.

Linda Piazza : 9/25/2008 10:44:23 AM

So far, the A/D line has been trending sideways over the last 30-40 minute. It looks as if it's trying to rise again, but bulls should be aware of the potential for a steep drop. Bears should be aware that it hasn't dropped yet. It's at 1490 as I type.

Jeff Bailey : 9/25/2008 10:43:30 AM

10:00 Internals found at this Link

Tab Gilles : 9/25/2008 10:41:32 AM

Legg Mason's Miller Urges Government to Scale Back AIG Takeover Link

Jeff Bailey : 9/25/2008 10:40:03 AM

VIX.X 33.36 -5.20% ...

Jeff Bailey : 9/25/2008 10:39:49 AM

UNE-AJ $3.50 x $4.10

Jeff Bailey : 9/25/2008 10:39:20 AM

US Nat. Gas. Fund (UNG) $34.84 -0.88% ...

Tab Gilles : 9/25/2008 10:39:14 AM

Natural Gas Inventories +51 BCF....well below estimates. $NATGAS $7.59

Jeff Bailey : 9/25/2008 10:38:57 AM

Should bring a bid to nat. gas.

Jeff Bailey : 9/25/2008 10:38:45 AM

EIA: Weekly Nat. Gas. Storage Table Link ... build of 51 Bcf.

Tab Gilles : 9/25/2008 10:37:52 AM

TED Spread

Value 3.22

Change 0.201

% Change 6.658

High 3.37

Low 2.88

Open 3.02

Linda Piazza : 9/25/2008 10:37:21 AM

The OEX did close that 30-minute period above what had been potentially strong resistance, but as I warned, we needed to see it well above that resistance, and it closed it with a candle that had an upper shadow and was already pulling back into a retest. Now we have to see how that retest goes. If you're bullish, you want that potential resistance to now serve as potential support. It's at about 558.70 as I type, but it's dynamic and moves a little with price movement. The OEX is 559.51 as I type. Bulls don't want to see the OEX spending a lot of time below 558.70 and particularly not below 557.70.

Tab Gilles : 9/25/2008 10:34:33 AM

$VIX 33.07 -2.12 (6.02%) Link

$VXD 31.53 -1.81 (5.43%) Link

$VXN 35.33 -1.07 (2.83%) Link

$RVX 37.12 -1.74 (4.48%) Link

Jane Fox : 9/25/2008 10:33:10 AM

Under normal conditions I would be saying the V bottom and the bullish MACD divergence is indicating a temporary bottom but these are not normal conditions. All it would take is for the bailout plan to not pass Congress and these markets are history. Link

Tab Gilles : 9/25/2008 10:29:27 AM

Durable Goods Orders Drop, Jobless Claims Soar

WASHINGTON (Reuters) - Orders for costly U.S. manufactured goods plunged in August and the number of workers filing new claims for jobless benefits shot up, according to government reports on Thursday that showed the economy rapidly weakening.

The Commerce Department said new orders for durable goods like new cars and refrigerators slumped by a sharper-than-expected 4.5 percent as demand for nearly every major category of manufactured item weakened from July.

The Labor Department said new claims for jobless benefits jumped 32,000 last week to a seasonally adjusted 493,000, though it was primarily because of the impact of hurricanes Ike and Gustav. Link

Jeff Bailey : 9/25/2008 10:27:43 AM

VIX.X 33.19 -5.68% ... WKLY Pivot here.

Linda Piazza : 9/25/2008 10:26:53 AM

No sign of a turnaround on the OEX yet as it tests potentially significant resistance on 30-minute closes. It's above that resistance now but there are of course several minutes left in this 30-minute period. That resistance has been shoved up to 558.44 with the OEX at 560.43 as I type. The OEX is still well above it, although it's pulled back a little off its high. So, let's consider the what-if's if the OEX maintains levels well above (not just "at") that resistance into the close of this 30-minute period. If that should happen, the 30-minute chart sets the next potential upside target at 571.90.

I have to tell you that I offer this only in the spirit of pointing out all possibilities. That is one possibility, but the RSI levels and the quickly approaching extreme levels (as measured by absolute number and Keltner setup) of the A/D line make me leery of trusting this supposed breakout.

Linda Piazza : 9/25/2008 10:21:27 AM

A/D line now 1571, getting very close to the upside target and potentially strong resistance now at about 1760. There's no promise of a turnaround, as I told bears earlier, so this is offered only as a warning to bulls to keep updating profit-protecting plans just in case and not as an any encouragement to bearish positions.

Linda Piazza : 9/25/2008 10:15:46 AM

A/D line bouncing again. The OEX is punching up to the top of its potential resistance zone, which I would stretch up to 560.78 on 30-minute closes, at least, and, in my personal view a little higher than that. I am personally allowing for some chopping around what had been the 38.2% retracement of the rally off Thursday's low into Friday's high, with that at about 560.40 (snapped, not calculated exactly) before I conclude there's been an upside breakout. Yesterday, we saw a punch down to the 61.8% retracement, and I basically think the OEX has been bouncing between that and the 38.2% retracement, figuring out where to go next.

A/D line at 1469 as I type, getting awfully close to that upside target on the 15-minute chart, now at about 1750, and looking very, very extreme on every chart interval below that. OEX at 559.76 as I type.

Linda Piazza : 9/25/2008 10:08:46 AM

The OEX is now testing potentially strong resistance on 30-minute closes at 558.67.

The A/D line is dropping from its 1448 high and is now 1138. Bulls don't want to see it drop deeper than about 850 now, and particularly not beneath 490.

Jane Fox : 9/25/2008 10:03:51 AM

Aug. new-home sales down 11.5% to 460,000 pace

Aug. new-home sales weaker than 505,000 pace expected

Aug. new-home sales weakest in 17 years

Supply of U.S. new homes 10.9 months in Aug. vs 10.3 July

Linda Piazza : 9/25/2008 10:01:21 AM

The TRAN is bouncing today, but it's underperforming other indices on a Keltner basis, at least. In fact, it's not above yesterday's high yet, so it's underperforming on that basis, too. If you're bullish, you'd like to see the TRAN leading the advance, not being tugged higher.

Jane Fox : 9/25/2008 9:58:36 AM

Both the DOW and S&P futures are breaking their respective overnight highs but the Russell 2000 and NDX are not.

Jeff Bailey : 9/25/2008 9:58:34 AM

General Electric (GE) $23.98 -2.48% ... Company saying this morning that it is cutting its GE Capital unit's commercial paper to 10% to 15% of the units total debt going forward, although demand for the commercial paper remains strong. GE said it has less than $90 billion outstanding in the commercial paper market. As of the the second quarter, GE had $97 billion in the commercial paper market, which was 18% of debt.

Linda Piazza : 9/25/2008 9:56:38 AM

Be careful here. The A/D line setup is similar to that seen many times when there's a quick turnaround. There are exceptions, and last Friday was certainly a spectacular one when prices did not turn around but rather chopped around near the day's high all day while the Keltner setup on the A/D line remained extreme. However, more often lately, there's been a rollover when the setup is like this. We have extenuating circumstances today--the belief that some sort of resolution is approaching--so this is not an advocation to jump into bearish trades. Rather it's a warning to bulls to protect profits since similar setups lately have resulted in turnarounds. There is not a single sign of one here as the A/D line keeps zooming up toward that 1700 potential target. It's at 1291 as I type. That doesn't mean that it's not wise to ask yourself some what-if questions.

Linda Piazza : 9/25/2008 9:50:56 AM

A/D line bouncing. Now, if you're bullish, you don't want to see it spending a lot of time below about 745 and especially not below 640. It's at 976 as I type, already moving into extreme levels on the 7- and 10-minute charts with RSI levels to go along with that. The 15-minute chart, however shows the potential for a climb to about 1700, which really would be extreme, wouldn't it? Don't count on this target being hit, as the A/D line has tended to turn around before hitting 15-minute targets, either upside or downside, lately.

Linda Piazza : 9/25/2008 9:41:11 AM

Keltner outlook on the A/D line: The A/D line made its first prints in the upper or bullish half of its Keltner channels, but between support and resistance. It's dropping to potential support (historical) at 400 and to potential Keltner support on 15-minute closes at about 230. Bears should be aware of the possibility of support in that zone being approached then, and of the possibility that the A/D line could stabilize or bounce. If, however, it drops beneath about 99 and stays there, then it's vulnerable to about -250. The A/D line is at 482 as I type.

Jane Fox : 9/25/2008 9:25:19 AM

Crude hit $110.00 on September 22nd and has not been able to break through since. In this environment of uncertainty I have less faith even in my charts because even though I believe the charts are a reflection of what everyone knows about a market I don?t believe anyone has a clue as to what is going to happen in the future. Link

Linda Piazza : 9/25/2008 9:21:15 AM

The TED spread is currently 3.37. This is above last Thursday's high and is above the high seen in 1987.

Jane Fox : 9/25/2008 9:18:13 AM

WASHINGTON (MarketWatch) -- New orders for U.S.-made capital goods decreased in August by the largest amount since the beginning of the year, signaling that businesses may be getting more cautious in their outlook.

New orders for durable goods fell 4.5% in August, pushed lower by weak demand across the board, the Commerce Department reported Thursday.

Economists surveyed by MarketWatch were looking for durable goods orders to fall 2% in August.

Linda Piazza : 9/25/2008 9:18:01 AM

Since Keene will be away this morning, I will come off vacation for a few hours, although I'll be dealing with some medical-related calls.

The first thing I wanted to say was that, this week as the solution is being hammered out, the global fears of default have not been decreasing. The TED spread has been rising steadily and is now above the level seen last Thursday. I can only hope it's the extreme seen before the turnaround, but this frankly scares me.

So do the widening spreads on some options as options makers struggle with a new paradign in hedging their risks. Be very, very careful.

Now for what might happen if the cash markets behave in accordance with futures action. Yesterday, I warned that the OEX might encounter resistance on 30-minute closes at a line that was then at 553.70 but was likely to be driven a bit higher by any early climb. The OEX high was 553.85. The point? Not to pat myself on the back but rather to say that the Keltner chart evidence has been working, as strange as these markets have been. Sometimes; nothing works all the time.

Extrapolating where the OEX might go by looking at the ES contract and SPX fair values, we might see a climb up to about 554.50, and considering where the ES contract was a little while ago, maybe even up a couple of points above that. The 30-minute Keltner chart shows a resistance band (on 30-minute closes) that currently begins at 554.95 and extends up to 557.59, and is likely to be pushed a little higher by any early climb. I would extend it up to 560.78, certainly, with that being the Tuesday afternoon swing high.

Unless the OEX just zooms straight through that zone and then stays above it through 30-minute closes, I would consider that potentially strong resistance.

There's of course a caveat. The common thought, which I'm not sure I wholeheartedly share, is that markets will see a steep (the part I don't quibble with) and prolonged (the part I do) rebound if any rescue package is approved. I'm reserving judgment until I see what the TED spread does. Therefore, you should be aware before participating in any kind of rollover trade that if an announcement is made of any kind of resolution, you could immediately suffer a huge spike against your position, even if that spike is eventually reversed.

Any trades that stay between about 545-561 are just moving the OEX within a congestion zone as far as I'm concerned. In fact, the daily chart would extend that down to 543.20.

Jane Fox : 9/25/2008 9:17:22 AM

WASHINGTON (MarketWatch) -- U.S. weekly jobless claims shot to their highest level in seven years in the latest week, the Labor Department said Thursday, as people in the hurricane-hit states of Louisiana and Texas filed for benefits.

First-time filings for unemployment benefits jumped by 32,000, to 493,000 for the week ended Sept. 20, the Labor Department reported. The higher number reflects claims following the damage wreaked by Hurricane Gustav in Louisiana and Hurricane Ike in Texas.

Jane Fox : 9/25/2008 9:07:58 AM

Here is your overnight action. Only the NDX futures have broken their previous day highs. Link

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