Option Investor
Printer friendly version
Keene Little : 10/8/2008 11:20:02 PM

Thursday's pivot table: Link

The SPX daily chart shows the doji finish on Wednesday at potential support near 974: Link . It's a good setup for a bounce, especially with the bullish divergences present on the 30 and 60-min charts. An up day on Thursday would potentially give us a morning star reversal pattern and while I think it will only be good for a bounce, shown in pink, it could at least relieve some of the short term oversold indicators in the makret.

The DOW's weekly chart shows that it too is in an area of potential support: Link . It has broken its longer-term uptrend line from the 1974, 1990 and 2002 lows but the other one from 1982 is only slightly lower, currently near 9100. It's getting a little crowded with trend and price level lines but also near 9100 is potential price level support where the March 2001 low and the August and December 2002 highs occurred.

The 9100 level is only 158 points from Wednesday's close, which it can cover in about 5 minutes and only be a burp on the charts. So if we get a down open on Thursday watch to see if support kicks in at that level. It's the Thursday before opex and we often see a head fake move Thursday morning followed by a reversal into opex. The Fed will be doing whatever it can to help the investment banks pull in some cash during this opex cycle.

Slightly lower at 9001 is the Fib projection for the 2nd leg down from October to be equal to 162% of the 1st leg down. So the 9000-9100 area should provide some support. If not, we could see the DOW drop another 1000 points in a hurry (dark red).

OI Technical Staff : 10/8/2008 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The Market Monitor has been archived.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 : 10/8/2008 6:48:38 PM

Here's IBM's Q2 earnings release Link

Jeff Bailey : 10/8/2008 6:46:38 PM

Keene ... I think it was because of their large leasing business, which is tied to the credit markets.

Keene Little : 10/8/2008 6:30:30 PM

IBM says net income up 20% and they're reaffirming their full-year outlook. Remind me again why they were added to the no-short list by SEC? Who was bribed to do that?

Jeff Bailey : 10/8/2008 6:07:12 PM

YM 9169

Jeff Bailey : 10/8/2008 6:06:25 PM

IBM ... ticking $93.00 on the headline

Jeff Bailey : 10/8/2008 6:05:47 PM

Intl. Business Machines (IBM) $90.55 -5.33% Link ... Earnings Press Release Link

Jeff Bailey : 10/8/2008 6:03:17 PM

dj- UK's Darling: Building up bank strength to take considerable time

Jeff Bailey : 10/8/2008 6:01:47 PM

Closing Internals found at this Link

Jeff Bailey : 10/8/2008 5:35:33 PM

dj- ECB's Trichet urges financial markets "collect" themselves.

Jane Fox : 10/8/2008 4:17:23 PM

Tomorrow we have unemployment claims at 8:30 and Wholesale Inventories at 10:00

Also FOMC member Stern speaks at 1:30.

Keene Little : 10/8/2008 4:12:57 PM

Great minds think alike Linda ;-)

Linda Piazza : 10/8/2008 4:10:05 PM

It sounds as if Keene and I were thinking along the same lines, with his 4:02 post and my 4:08 one. We didn't confer. I was busy typing while he was uploading his post.

Linda Piazza : 10/8/2008 4:08:18 PM

Oddly enough, although bulls will be disappointed by the steep selloff into the close, the OEX ended the day with a potential reversal signal, a small-bodied candle with a long upper shadow. Of course, traders must remember the "potential" in that "potential reversal signal" phrase, as this is potential only. However, because the body of today's candle gapped below yesterday's candle, there's the potential that this could be the type of reversal signal that sees a gap higher tomorrow morning. That's what bulls would most like to see, a gap higher and then a close halfway into yesterday's range or above.

But, in any steep descent, a gap always has the possibility of being a runaway gap, too, although I would have expected a bigger candle body in that case. The small body is indicative of indecision. It's still possible that the indecision could be settled to the downside, but bears now also need to be on the lookout for a gap higher tomorrow morning with gains that are sustained into the close.

Keene Little : 10/8/2008 4:02:53 PM

Today's daily SPX chart shows the doji I had mentioned earlier that could be the 2nd candle of a 3-candle reversal pattern--big down day, doji and then big up day. All we need now is the big up day. Otherwise the doji will be what it's normally considered--an indecision day before the trend continues. Link

Jeff Bailey : 10/8/2008 4:01:38 PM

ACORN office in Vegas raided in voter-fraud probe ... AP Story Link

FoxNews Story Link

Jeff Bailey : 10/8/2008 3:59:10 PM

S&P Insurance (IUX.X)

Keene Little : 10/8/2008 3:58:33 PM

This is the pullback to try a long play although it's already getting a little deeper than I'd like to see. The stop has to be at a low below this afternoon's so that's your downside risk if you try it. Conversely, if you like the short side here it can't go back above today's high now so another bounce would be a good shorting opportunity if you're leaning short.

Linda Piazza : 10/8/2008 3:53:45 PM

OEX bulls would have preferred seeing the OEX maintain 15-minute closes above the 9-ema, now at 478.42. I mentioned earlier that if the OEX couldn't soon punch above and then maintain values above a Keltner level now at 481.77, but then amended to 485, it was likely to drop back toward support that's now at 471.40 but was then at a slightly different level. That's all that's happening now, but, in doing this, the most potentially bullish short-term scenario is unraveled. That would have had the OEX punching up through the descending channel in which it has been dropping since Monday, confirmed by a successful move up through 490 and then a move up toward the next stair steps higher.

If the OEX can't maintain support on 15-minute closes near 471.40, bulls want to see it hold the important benchmark S/R on 30-minute closes, now at 467.70.

Jeff Bailey : 10/8/2008 3:53:29 PM

Swing trade existing order(s) alert! ... Cancel any and all existing orders that I (Jeff Bailey) have ordered. NCC and GLD-WD

Linda Piazza : 10/8/2008 3:48:59 PM

As I've warned many times lately, I'm not certain that any of the regularly scheduled events on foreign bourses are going to matter any more than our regularly scheduled events have mattered. However, what's happening tonight is Japan's Core Machinery Orders at 7:50 pm ET, Australia's MI Inflation Expectations and Employment numbers, at 8:00 and 8:30 pm respectively.

At 2:00 am ET, Germany's WPI and Trade Balance will be released, along with Japan's Preliminry Machine Tools Order. Perhaps a more important number and one that might impact markts is the ECB's Monthly Bulletin at 4:00 am. At the same time, the U.K.'s important Halifax HPI number will be released, followed thirty minutes later by the U.K.'s Trade Balance. The U.K. has cancelled a previously scheduled bank rate decision since this morning's coordinated central bank rate decision.

Keene Little : 10/8/2008 3:44:52 PM

As we head into the final 15 minutes of trading I'm leaning towards seeing more rally tomorrow. Look for SPX to potentially drop down to about 995 and then launch another rally leg from there. If it drops much below 990 I'd start to turn more immediately bearish again.

Linda Piazza : 10/8/2008 3:23:31 PM

I want to amend my 3:20:29 post a little. OEX bulls would like to see the OEX maintaining 15-minute closes above about 485. That's the current location of the top resistance of a descending price channel on intraday charts in which the OEX has been moving lower since Monday morning. OEX at 483.01 as I type.

Linda Piazza : 10/8/2008 3:20:29 PM

So far, the OEX has been finding support on 30-minute closes at the 9-ema, now at 477.64, and has also been finding support on 15-minute closes at the 15-minute 9-ema, now at 478.49. This is good as far as it goes, but the OEX needs to soon begin producing 15-minute closes above 482.07 or else it risks falling back toward next support near 469.80-470.08. OEX at 481.01.

Jeff Bailey : 10/8/2008 3:20:05 PM

dj- Italy's govt. approves Bank Stabilization fund

Jeff Bailey : 10/8/2008 3:08:19 PM

Key US Rates Link

Keene Little : 10/8/2008 3:08:13 PM

With the possibility that this afternoon's leg up completes an a-b-c correction off this morning's low, the 60-min chart shows, in dark red, the continuation of the stair-stepping lower that could continue for a couple more weeks. But if we get a pullback this afternoon that is followed by more rally (pink) we could see a larger bounce into next week, maybe even into opex Friday, before the selling kicks into gear again. The pink wave count would be very bearish into November because it would see a larger degree 3rd wave to the downside and would make the selling we've seen so far look small in comparison. So do you want your awful tasting medicine now or a really disgusting medicine later? Link

Jeff Bailey : 10/8/2008 3:04:07 PM

Bond market closed ...

Tab Gilles : 10/8/2008 3:01:35 PM

On Tuesday the Federal Reserve stepped in and began to buy such paper in short order. There is $1.3 trillion of this commercial paper available for the plan. The outstanding commercial paper stood at $1.6 trillion. Pay attention to the spread between 3 month U.S. Treasury Bills ( 0.70 yield) and the 3 month LIBOR (London Inter Bank Offered Rate) rate of 4.52. The spread is called the TED Spread currently 3.87%. The credit crisis will begin to abate when this drops down to much lower levels.

Linda Piazza : 10/8/2008 2:48:46 PM

Potential support for the OEX on 30-minute closes at 476.46.

Tab Gilles : 10/8/2008 2:48:26 PM

Sect. Paulson Pre-G7 Press Conference @ 3:00PM

Tab Gilles : 10/8/2008 2:28:18 PM

Weekly EIA Report: Link

Keene Little : 10/8/2008 2:25:28 PM

We've got some short term bearish divergences showing up so I don't suggest chasing this higher right here. I'm hoping we'll get a pullback so that I can see what form it takes and help figure out the next market move.

Tab Gilles : 10/8/2008 2:20:05 PM

JPMorgan/Chase (JPM) $42.60 +$3.29 (8.2%)

WJPAI Jan. 2010 $45 Call entered 1/2 position $7.65, currently trading at $8.40 Bid/ $8.80 Ask. *NOTE set stop at $7.00

Linda Piazza : 10/8/2008 2:11:55 PM

If the OEX can push above this 482-483 zone, it's got a descending trendline drawn from a parallel price channel from Monday through today that now crosses near 487-488. In addition, I see other potential resistance near 490. As each of these potential resistance levels is approached, consider readjusting your stops if in long trades.

Keene Little : 10/8/2008 2:10:59 PM

This should be ready for a pullback now, maybe back down to the SPX 995-1005 area. If the 5-wave rally from the mid-day low is wave-c of an a-b-c rally off this morning's low then we'll see a resumption of the decline from this leg up. Consider that possibility if you want to protect any long positions. But if we're into a larger bounce correction then we should only get a pullback before resuming the upward push. A drop much below the pullback low near 1:30 PM would have me concerned about another leg down.

Linda Piazza : 10/8/2008 2:04:52 PM

If the OEX pulls back, OEX bulls want to see it find support on 15-minute closes at 475.15, or at least at 473.11 if that higher level doesn't hold. They would prefer that the OEX not pull back much but just trade sideways before pushing higher again. The resistance being tested is fairly significant resistance, however.

Linda Piazza : 10/8/2008 2:02:43 PM

Sorry, I read that benchmark number wrong in my 2:00:40 post. It's 482.86 on 30-minute closes, not 483.86. OEX at 483.15 as I type.

Jeff Bailey : 10/8/2008 2:02:26 PM

Trading on both Russian stock markets halted ... AP Story Link

Linda Piazza : 10/8/2008 2:00:40 PM

Next benchmark coming up for the OEX: potential resistance on 30-minute closes at 483.86. OEX at 481.86 as I type.

Keene Little : 10/8/2008 2:00:39 PM

Nice trade Jeff. That was a quick 150 points!

Jeff Bailey : 10/8/2008 1:59:44 PM

StreetTracks Gold (GLD) $88.46 +1.36% ... moves into this morning's gap higher.

Jeff Bailey : 10/8/2008 1:57:03 PM

YM 9,560 alert!

Jeff Bailey : 10/8/2008 1:50:12 PM

YM long stopped alert! 9,489

Jeff Bailey : 10/8/2008 1:49:20 PM

YM long raise stop alert! ... to 9,489

YM 9,502

Linda Piazza : 10/8/2008 1:46:52 PM

OEX bulls would now prefer that 15-minute closes remain above 474.30. OEX at 478.22 as I type.

Jeff Bailey : 10/8/2008 1:45:37 PM

YM long raise stop alert! ... to 9,481.

YM 9,505

Keene Little : 10/8/2008 1:44:06 PM

With another push higher here we could have a completion of a 5-wave move up from the mid-day low. That should lead to another pullback to correct this leg up (shake out some longs and pull in some shorts) before continuing higher. If you want to try a long play on a pullback you have to use the mid-day low as your stop so consider your risk before entering a trade.

Jeff Bailey : 10/8/2008 1:42:43 PM

YM long raise stop alert! to 9,441

YM 9,474

Jeff Bailey : 10/8/2008 1:40:14 PM

YM long raise stop alert! ... to 9,431

YM 9,478

Linda Piazza : 10/8/2008 1:38:03 PM

OEX bulls would prefer to see 15-minute closes remain above 469.92 or at least 468.39, if the higher level doesn't hold. What bulls would really prefer is a push above 474.74 and sustained values above it, into the next 30-minute close. That doesn't mean that the OEX won't face significant challenges, as it will especially near 482.30-483.30 and then again near 489-492, but it will be a more significant change in tenor.

Keene Little : 10/8/2008 1:36:51 PM

We've got some nice bullish divergences on the 30 and 60-min charts between today's lows and Monday's lows. It's supporting the idea that we should be looking for a decent bounce back up. Maybe back up to at least DOW 10K over the next day or two.

Jeff Bailey : 10/8/2008 1:34:48 PM

YM Long stop/target ... 9,378/9,560

Jeff Bailey : 10/8/2008 1:34:10 PM

YM long alert! ... here at 9,411.

Jeff Bailey : 10/8/2008 1:31:48 PM

dj- Venezuela's Director: Never bought mtge-backed securities

Jane Fox : 10/8/2008 1:30:24 PM

Here is a monthly chart of SPX. If you take a fib retracement from the highs made in October 2007 to the lows of August 2008 the 161.80% reaches all the way down to 970, the lows made today. We may have found a bottom for now. Link

Tab Gilles : 10/8/2008 1:27:56 PM

In case you didn't catch it about an hour ago. Rick Santelli on CNBC made an interesting comment, he said - "why would anyone buy a 30 year treasury at 4.04% when they can now buy a 90-day government backed commercial paper at 4.3%?"

Keene Little : 10/8/2008 1:23:07 PM

The SPX downtrend line is currently near 996 and is breaking. A break above it and then a successful pullback to it (may not get the pullback) would set up a long play. Just keep in mind that the long side is clearly counter trend right now (meaning surprises will be to the downside).

Linda Piazza : 10/8/2008 1:21:10 PM

First small improvement in tenor as the OEX closes a 15-minute period well above the 15-minute 9-ema, now at 468.75. The OEX is now pulling back a little from its test of a particularly significant benchmark on 30-minute closes, now at 476.23. Those who want to see continued improvement in tenor want this pullback to be small and to find support near 472.40 or at least near 468.75 if the higher level doesn't hold.

Jeff Bailey : 10/8/2008 1:18:46 PM

dj- Bank of Mexico: To auction $2.5B; $400M/day from 10/09/08.

Keene Little : 10/8/2008 1:17:05 PM

SPX now challenging its downtrend line from yesterday morning.

Linda Piazza : 10/8/2008 1:14:41 PM

Strong push so far, but the OEX is fast approaching one of the most significant resistance levels over the last days, potential resistance on 15-minute closes at 475.70 and, more particularly, on 30-minute ones at 476.35. If you're in a bullish trade, update your just-in-case profit-protecting plan as this is approached. You want any pullbacks now to find support on 15-minute closes at 468.65.

Jeff Bailey : 10/8/2008 1:13:22 PM

10-year Yield Alert! up 31.3 bp at 3.819% ... has cleared WKLY R1.

Jeff Bailey : 10/8/2008 1:11:16 PM

Dow Components at this Link

Linda Piazza : 10/8/2008 1:09:37 PM

The reason I keep typing things such as "those who want to see an improvement in tenor" is because I'm acutely aware that some of our subscribers will be bearish positions. I'm trying to provide information and benchmarks for all without sounding as if I'm siding with one group or the other.

Linda Piazza : 10/8/2008 1:08:20 PM

The OEX is now pushing above potentially strong resistance on 15-minute closes, now up to 468.85. Those who want to see a first improvement in tenor want to see a 15-minute close above this level. Remember that it will be only a first and small improvement, if that close occurs. Until it does, this is still potential resistance.

What those who want an improvement in tenor would really like to see is a 30-minute close above 472.50, near the 30-minute version of the 9-ema and especially above 476.45. Those would be two steps further up the "improvement in tenor" ladder. OEX is 471.41 as I type.

Jeff Bailey : 10/8/2008 1:01:57 PM

Most Actives ... SPY $97.92 -2.14%, QQQQ $32.56 -0.24%, MSFT $22.98 -1.07%, CSCO $18.13 -3.76%, INTC $16.08 +0.49%, ORCL $16.57 -1.19%, FNM $1.11 -7.50%, C $14.10 -6.93%, NCC $2.29 +0.88%, QLD $36.07 -1.17%

Keene Little : 10/8/2008 1:01:54 PM

Actually the sideways scenario would be potentailly bullish as it could leave a morning star doji at support. That followed by an up day tomorrow would be a reversal signal (for how long would be the next question). And of course an up day today would also be bullish if it can close at least half way up into yesterday's red candle (about SPX 1027). That's only 30 points (300 DOW points) higher than here. Piece of cake.

Keene Little : 10/8/2008 12:55:05 PM

Today's pullback from the high looks more like an a-b-c correction to this morning's rally. The decline is taking on an ending daigonal appearance for the c-wave (descending wedge), particularly for the DOW and SPX. Based on that interpretation we should get another rally leg this afternoon to a new daily high. The other alternative is it's getting ready to break down hard. Have I covered everything? Oh yea, it could go sideways.

Jeff Bailey : 10/8/2008 12:52:30 PM

dj- Citigroup, Wells Fargo extend standstill through Friday morning

Jeff Bailey : 10/8/2008 12:50:30 PM

Treasury acution(s) results posted

Linda Piazza : 10/8/2008 12:44:22 PM

A new first benchmark of any change in tenor for the OEX is the 15-minute 9-ema and another Keltner line just above that. The OEX has not closed a 15-minute period above the 15-minute 9-ema since early yesterday morning. While I think the 30-minute version is more important, the 15-minute one will help us pinpoint any early change, even if it will be tenuous and not completely trustworthy. So, you who want to see any improvement in tenor want to see the OEX sustain 15-minute closes above 467.80 and then 469.59. The OEX is 465.12 as I type. Watch for potential resistance in that 467.80-469.59 zone. The OEX has pushed above this configuration during 15-minute periods, but not closed above it since yesterday morning.

Keene Little : 10/8/2008 12:42:35 PM

I believe the market has more work to do to the downside but the bigger question for me is how it gets there. The NDX 120-min chart shows two ideas: one is a more immediately bearish scenario (dark red) calling for only a small consolidation before proceeding lower and then getting a bigger bounce into the end of the month; the second shows a short-term bullish scenario (pink) which calls for a bigger bounce into next week before heading lower again. Link

The daily chart shows how it fits within the larger pattern, which calls for more 4th and 5th waves to go before the decline from May will finish, probably in November, and set up a bigger bounce into the new year before the last leg down from October is finished: Link

Jeff Bailey : 10/8/2008 12:33:32 PM

10-year ($TNX.X) remains pressed against its WKLY Pivot at 3.685%

Linda Piazza : 10/8/2008 12:30:59 PM

Potential support for the OEX on 30-minute closes is now about 460. On 15-minute closes, it's now 459.69. The OEX's slow drop lower is pushing these support levels lower, but so far, they're holding on 15- and 30-minute closes. Although the lower prices do nothing to encourage those who hope for a bounce, the holding of this light support at least provides for a little improvement in outlook on a Keltner basis, as tenuous as that support is. Don't count on that as supporting your position if you're bullish, but do use it as a slight warning to keep on your toes if you're bearish.

The one truth we know is that the OEX still has not changed in tenor and is still not able to scramble back above key levels on the 30-minute chart.

Jane Fox : 10/8/2008 12:24:20 PM

Internals are bearish - again. I know the only constant in the market is that it is never constant but this selling is getting really old. Link

Jeff Bailey : 10/8/2008 12:14:33 PM

12:00 Internals found at this Link

Linda Piazza : 10/8/2008 12:07:49 PM

Potential support for the OEX on 30-minute closes has now dipped to 461. On 15-minute closes, it's higher, at 462.26. As I stated earlier, this is light support only, so there's no guarantee it will hold if tested. OEX 465.40 as I type.

Keene Little : 10/8/2008 12:03:28 PM

The market continues to sink lower and has me wondering if we're going to see a repeat performance to the past week--spike up and then slowly sell off into the afternoon and then accelerate lower. Rinse and repeat. Once again, like yesterday, the decline doesn't look like it's going to continue much longer and I have a sense this morning's lows are going to hold.

I've got a small October call position to hedge my November puts but can't quite decide whether to bail on my hedge or add to it (I'm still net short). Sitting on my hands for now while watching this...

Tab Gilles : 10/8/2008 11:59:58 AM

$VIX 57.72 +4.04 (7.53%) Link

$VXD 51.20 +1.35 (2.71%) Link

$VXN 61.56 +3.05 (5.2%) Link

$RVX 60.36 +2.85 (4.96%) Link

$VXO 70.65 +7.50 (11.89%) Link Longterm VIX/VXO chart I posted Monday: Link

Linda Piazza : 10/8/2008 11:55:50 AM

The TED spread is now 3.79.

Linda Piazza : 10/8/2008 11:47:25 AM

It looks as if the OEX might be headed down toward a test of potential support on 15-minute closes at just below 462 and 30-minute ones, at about 462. Those who want the markets to steady of course want the OEX to find support there or above there, but that's light support and can't be guaranteed to hold.

Jeff Bailey : 10/8/2008 11:34:59 AM

ProShares Product Page ... Link

Jeff Bailey : 10/8/2008 11:34:17 AM

Swing trade long alert! ... for 1/8 position in the ProShares Ultra Dow 30 (DDM) at the offer of $40.25.

Stop goes $36.00. Target $52.00

Linda Piazza : 10/8/2008 11:29:43 AM

The OEX's three-minute chart had shown a little inverse H&S, with the confirmation setting a target near 473.50, which would bring the OEX up toward a test of 472.90-474.10 potential resistance on 15-minute closes. It's there now, at 473.85 as I type. Just be reminded that this is potential resistance being tested, that the OEX has essentially formed a triangle today, and that it's so far just chopping around inside that triangle. We need to see the OEX stairstep above significant levels on the 30-minute chart (479.30, 482.60 and 488.10 currently) on 30-minute closes before we believe anything has changed.

Linda Piazza : 10/8/2008 11:09:31 AM

The "nothing has changed until there are 30-minute closes above" benchmarks for the OEX are now at 478.16, 482.81 and 488.34. Yesterday, all were grouped closely together, forming a boundary that couldn't be crossed. Now, 30-minute closes above each in turn would form one small step in any improvement in tenor. So far, the OEX hasn't even been able to take that first step. It's test of the 30-minute 9-ema this morning knocked it promptly lower again.

Jeff Bailey : 10/8/2008 11:06:47 AM

EIA Inventories:
Crude Oil up 8.12M bbls to 302.59 M bbl
Total Gasoline up 7.17M bbls to 186.81 M bbl
Conventional Gasoline up 4.3M bbls to 89.11 M bbl
Total Distillates down 489K bbls to 122.6 M bbl
ULS Diesel (0-15 PPM Sulfur) down 1.23M bbls to 67.05 M bbl
Jet Fuel up 733K bbls to 36.78 M bbl
Heating Oil (>500 PPM Sulfur) up 414K bbls to 37.72 M bbl
SPR down 2M bbls to 702.4M bbl

Refinery Utilization
Gross Inputs up 1.525M bbls/day to 14.25M bbl/day
Crude Oil Inputs up 1.57M bbls/day to 14.02 M bbls/day
Refinery Op. Capacity unch. at 17.6M bbls/day
Pct. Utilization up to 80.93% from prior week's 72.27%
My # Days Supply of Crude rises to 23.6 from prior week's 23.2.

Jane Fox : 10/8/2008 10:49:29 AM

WASHINGTON (MarketWatch) -- Despite a credit crunch that has driven world central banks to slash interest rates, the National Association of Realtors reported Wednesday that an index of sales contracts on previously owned U.S. homes rose 7.4% in August from the prior month. The index, which is considered a leading indicator of existing home sales, was up 8.8% from the prior year. In August pending home sales rose in all four regions, with a gain of 18.4% in the West, 8.4% in the Northeast, 3.6% in the Midwest and 2.3% in the South. The July pending home sales index was revised to a decline of 2.7% from a prior estimate of a 3.2% fall. It's unclear to what extent contract activity will be impacted by the credit disruptions, said Lawrence Yun, NAR's chief economist.

Jane Fox : 10/8/2008 10:48:20 AM

SAN FRANCISCO (MarketWatch) -- Crude supplies rose for a second week, up 8.1 million barrels for the week ended Oct. 3, according to the Energy Department Wednesday. Motor gasoline supplies climbed 7.2 million barrels. Distillate stocks were down for a sixth week, by 500,000 barrels. Refinery utilization was at 80.9% compared with 72.3% of capacity a week earlier. Following the news, November crude was down 2.2% at $88.07 a barrel on Globex.

Jeff Bailey : 10/8/2008 10:40:52 AM

dj- French Finance Minister: ... Reiterates govt. won't allow banks to fail.
French banks don't need to be recapitalized by govt.

Jeff Bailey : 10/8/2008 10:39:17 AM

UGA $41.24 -0.16% ...

Jeff Bailey : 10/8/2008 10:38:52 AM

USO $70.81 -2.31% ... plunges on knee-jerk

Keene Little : 10/8/2008 10:38:40 AM

The updated SPX 60-min chart shows the bounce off the trend line along the lows from September 23rd. It's now a matter of trying to figure out if we're going to get just a small bounce before heading lower right away (dark red) or a bigger bounce that might correct the leg down from September 19th and could see SPX back up as high as 1100 (pink). The pink wave count would actually be quite bearish for the next leg down into October/November. Link

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

EIA: Inventory hitting the wires ...

Jeff Bailey : 10/8/2008 10:37:52 AM

dj- EU's Barroso: EU to form group on cross-border supervision

Jeff Bailey : 10/8/2008 10:37:03 AM

dj- US to sell $10 Bln in reopened 9-year 4-month notes Thursday

Jeff Bailey : 10/8/2008 10:36:28 AM

dj- US to sell $10 Bln in reopened 6-year 10-month notes Wednesday

Linda Piazza : 10/8/2008 10:36:01 AM

The OEX was not able to maintain potential support now at 475 on 15-minute closes into that last close. It's attempting to regain that level now, but the A/D line also was not able to maintain desired support on the last 15-minute close. It's back below the bullish/bearish benchmark, now at about -1220. There's the possibility of a rollover in both the OEX and the A/D line, but for now, we just have to reserve judgment a bit as the volatility makes it unwise to draw too strong of conclusions based on a minor violation. It's just not the desired outcome of that last 15-minute period if you're bullish and a downturn toward the day's low again must be considered as a possibility.

Jeff Bailey : 10/8/2008 10:35:54 AM

dj- US to sell $10 Bln in reopened 6-year 4-month notes Thursday

Jeff Bailey : 10/8/2008 10:33:34 AM

dj- US to sell $10Bln in reopened 6-year 7-month notes Wednesday

Linda Piazza : 10/8/2008 10:32:50 AM

Bloomberg's delayed feed of the TED spread shows it at 3.91, down from the day's high of 4.03 shortly after the open. I believe that yesterday's high was near 3.91, if I'm remembering correctly. Unfortunately, I'm hampered by the limited information I can get from the Bloomberg feed, and I neglected to record numbers yesterday.

Jeff Bailey : 10/8/2008 10:31:39 AM

EU's Barroso: UK Govt. plan in line with EU principles

Jeff Bailey : 10/8/2008 10:31:04 AM

French Finance Minister:
Financial crisis will have impact on real economy.
Lower inflation will boost growth
Lower oil prices, lower euro will boost growth

Keene Little : 10/8/2008 10:30:45 AM

The downtrend line from yesterday morning's high is currently near SPX 1016 so another push higher this morning, if it can break to a new daily high, will also break the downtrend line. That would confirm that we're at least into a larger correction (just another 4th wave of a few more to go as the market stair-steps lower and unwinds the EW count).

Jeff Bailey : 10/8/2008 10:16:30 AM

10:00 Internals at this Link

Keene Little : 10/8/2008 10:16:10 AM

Last night I had mentioned potential support for SPX at 973-974. There's a Fib projection for the move down from August at 974 (2nd leg down equal to 162% of the 1st leg down) and a Gann level at 973 (90 degrees around the Square of Nine chart from 1005). This morning's low is 972.98. Gotta love numbers.

As shown on the daily chart, it's looking like we could see the pink wave count that calls for a multi-day bounce that could get SPX back up around 1025-1050 depending on what kind of bounce/consolidation pattern develops. We haven't seen the lows yet but we could see at least some relief from the relentless selling of the past week. Link

Linda Piazza : 10/8/2008 10:13:23 AM

I'm back for a second and see that the OEX moved back from the test of its 30-minute 9-ema, now at 484.12, near the bottom of the potential resistance zone mentioned in my 9:57:57 post. The 9-ema was then at a higher level, at 484.85 when I made that post. The goal for those in bullish trades is that the OEX would now find support on 15-minute closes at or above 476.54. Be ready for anything today, however.

Linda Piazza : 10/8/2008 10:04:37 AM

I'll be in and out today but wanted to be here through the open. If the OEX should continue climbing today, potentially strong resistance levels are located near 489-492 and again near 506-508 and maybe up to 512. Be particularly careful if the A/D line has reached about +600 to +800 when one of those potential resistance levels is being tested.

Don't assume that the climb will continue, but those who want to see that happen want to see the A/D line continue climbing. For the next immediate few minutes, you want to see any pullbacks find support at about -800 to -900 and especially above -1200, staying above that bullish/bearish benchmark. The A/D line is currently -551.

Jane Fox : 10/8/2008 10:01:40 AM

TRIN is 0.39 so I am not watching it today.

Jane Fox : 10/8/2008 9:59:39 AM

WE do have a little rally on it way but overnight highs but overnight highs have not even been tested yet. Link

Linda Piazza : 10/8/2008 9:57:57 AM

If you're in bullish trades now, you need to keep on your toes, too, just as bears needed to do earlier. The OEX has cleared potentially strong resistance on 15-minute closes at about 477 but it hasn't even closed a single 15-minute period above that yet, and bulls need to see that happen as even a first minor and tentative confirmation of this early bounce. The OEX has not closely approached potentially strong resistance on 30-minute closes that now converges from 484.85-487.69 and then at about 491, and that's the benchmark I'll be watching for a slightly more trustworthy confirmation of the bounce's potential to hold. OEX at 479.23 as I type.

Jane Fox : 10/8/2008 9:55:53 AM

Well it looks like the bulls have decided to put up a fight today but it remains to be seen just how much fight they have in them. AD line as improved to -400 but still below 0. AD ratio had climbed above 0 and the VIX is falling. So far so good.

Jeff Bailey : 10/8/2008 9:54:49 AM

European Markets: Link

Jeff Bailey : 10/8/2008 9:54:15 AM

Asian Markets: Link

Jeff Bailey : 10/8/2008 9:49:03 AM

13-week yield ($IRX.X) ... down 25.5 bp at 0.53%

Keene Little : 10/8/2008 9:48:45 AM

With the immediate reversal back up off the gap down one has to wonder if the Fed helped jam the markets higher to try to get something started to the upside. If Bulls feel emboldened by this action and start some follow-through buying we could get a key reversal day. Otherwise if the bounce back up into the green is followed by a new daily low, look out below.

Linda Piazza : 10/8/2008 9:48:10 AM

The OEX is currently jammed up again potentially strong resistance on 15-minute closes at 477.50.

Jeff Bailey : 10/8/2008 9:47:10 AM

Today's Global Economic Calendar Link ...

Unscheduled rate cuts across the board.

Linda Piazza : 10/8/2008 9:46:57 AM

The A/D line has popped above that bullish/bearish benchmark on its 15-minute chart, mentioned earlier with the ultimate outcome as yet undecided. Those hoping for a steadying in the markets want to see it close this 15-minute period above about -1087 as a first step, but should realize that's only a first step. Because the A/D line is hovering near that bullish/bearish benchmark, I consider it rather neutral right now. I had been surprised earlier that it was so neutral by Keltner standards, although of course negative in its actual number. It's currently -951, attempting to maintain that first-step improvement in tenor. Just remember that this first step could be reversed if the A/D line rolls back down from this level.

Jeff Bailey : 10/8/2008 9:43:45 AM

MBA's Weekly Application Survey Link

Linda Piazza : 10/8/2008 9:42:06 AM

The first level of potential resistance for the OEX on 15-minute closes is 478.14-481.17. OEX at 473.47 as I type. Stay vigilant.

Jane Fox : 10/8/2008 9:41:12 AM

WE have pending home sales out at 10:00 this morning. Then of course it is Wednesday so the Crude Inventory report is due at 10:35ET.

Tab Gilles : 10/8/2008 9:40:46 AM

JPMorgan (JPM) $39.42

WJPAI: January 2010 $45 Call LEAP Bid $7.40/ Ask $7.65

Time to get back into this trade, suggest taking a 1/2 position.

Linda Piazza : 10/8/2008 9:37:28 AM

Keltner outlook on the A/D line: surprisingly, the A/D line is not all that negative. It opened just below the bearish/bullish benchmark, at -1140 to -1245 on the 15-minute chart. That's the good news. The bad news is that it's below that benchmark, in the bearish bottom half, and it has plenty of room to decline. It is declining as I type, at -1492. There's potentially strong support at about -1700, though, so we'll see whether that matters or not. This is not the typical setup I'd expect to see, though, this morning. What I would have expected is breakdown mode. Something is different here than expected, so be aware of that, especially if the A/D line should scramble back above about -1000 and maintain levels above that.

Jane Fox : 10/8/2008 9:35:36 AM

AD line opens at a bearish -1456.

Tab Gilles : 10/8/2008 9:34:15 AM

Crude Oil $87.72, Nat Gas $6.58; Gold $922; Euro 1.3611; Yen 99.82 (below 100), T-Bill 1mos 0.22% 3mos 0.49%; Lobor O/N 5.38% 1mos 4.29% 3mos 4.42%; TED Spread 4.03%

Linda Piazza : 10/8/2008 9:33:59 AM

Here's the OEX at 468, potential support that I mentioned yesterday and now, as I type, falling right through it. This is what I meant by support levels not mattering.

Linda Piazza : 10/8/2008 9:32:45 AM

I keep looking at the SEC's site this morning, seeing if they're going to announce an extension of the no-shorts rules that expire at midnight tonight. So far, I haven't seen anything.

Linda Piazza : 10/8/2008 9:30:33 AM

In Bloomberg's delayed feed, the TED spread is 4.03, its high of the day and, I think, its high for the week and maybe its all-time high. I don't have historical charts going back far enough to determine that.

Jane Fox : 10/8/2008 9:29:57 AM

Here is your overnight chart of Crude. It hit a low of 86.05 overnight. Link

Jane Fox : 10/8/2008 9:28:16 AM

LONDON (MarketWatch) -- The U.K. government said Wednesday that it will pump as much as 50 billion pounds ($87 billion) of capital into the country's main banks as part of a rescue package designed to shore up the struggling sector.

The unprecedented measures underline the depth of the global banking crisis and follow a $700 billion rescue package in the U.S. The government said it's also proposing a pan-European initiative to support bank funding.

The U.K. cash injection, which will be exchanged for a stake in the banks, is part of a package that also includes plans to boost liquidity and guarantee some new bank debt in an attempt to revive lending between firms

Linda Piazza : 10/8/2008 9:27:32 AM

Futures have been all over the place overnight and early this morning: strongly down and strongly up. If you're reading the news, you know that the overnight action was devastating on foreign bourses. The Nikkei 225 was down 952.58 points or 9.38%. In a single day. This is the worst decline for the Nikkei since 1987. Our futures were lower, too, and European bourses dropped heavily in their morning trade.

At one point when I looked at the television screen soon after the coordinated rate cut, SPX futures were up a little more than 32 points, but as I type, they're back down more than 35 points, about 30 below fair values. Which action are we going to trust?

Neither. We're going to watch chart action. All the way from the 15-minute Keltner charts up to the weekly ones, the OEX is in breakdown mode. That means that we don't have any firm downside targets from those charts as we usually do. The weekly chart presents the possibility that, if the OEX were to close this week above about 496.20, it will have an upside target of about 516 or maybe even 532. But there's an important "if" in that sentence.

What we do know is that for two days, the OEX been turning down from each test of potential resistance on 30-minute closes at Keltner lines now at 489.04 and 492.10, but likely to be driven higher or lower by any strong early movement. Until and unless the OEX can sustain 30-minute closes above those levels, nothing about its tenor has changed.

The Nikkei's action has warned us that we can see the type of panic selling that we really haven't seen yet but it doesn't promise that will occur here. I think you have to factor vulnerability to a capitulation-type day into your trading plans without panic and without counting on it happening. Just know how you will react if it occurs.

Futures action has been too volatility to make those predictions. If you're in bearish trades, keep your stops adjusted frequently because out of capitulation can come those kinds of strong out-of-nowhere bounces such as those we had 8/16/07 and 1/22/08 and 1/23/08. Bulls, don't step in front of this freight train with anything other than lottery money and, even then, only when you see confirmation that your trade makes sense. Don't step in front at some predetermined it-will-find-support here, because if we get a capitulation type day, support won't matter.

But as much as some can long for capitulation with a let's-just-get-it-out-of-the-way feeling, that's not guaranteed to happen today. A sharp decline followed by an immediate bounce that soon finds support above 492-494 might prompt a stronger bounce. We're just going to have to see what happens, aren't we?

Keene Little : 10/8/2008 9:21:13 AM

One possibility this morning is for a gap down that causes some capitulation that's then followed by a sharp reversal back up. That's just a guess but we could be close to seeing that kind of event. The other possibility of course is that we're really going to crash now. Needless to say it will be tough for any new entries this morning. Keep reminding yourself that flat is a position.

Jane Fox : 10/8/2008 9:16:29 AM

Please remember the Russell 2000 futures (TF) are on a 20 minute delay.

Jane Fox : 10/8/2008 9:15:35 AM

Here are the overnight charts. Nice little rally from the regime of rate cuts around the world but the whole rally has been wiped away with all the selling. Link

Keene Little : 10/8/2008 9:15:12 AM

After the sharp spike up in equity futures following the coordinated rate cut they've come crashing lower. DOW futures dropped 550 points from the high and are currently down -260 points (-2.6%) and still dropping. The last bullet has been fired and it doesn't look like it's going to be helpful in holding the market up. Techs are even more negative with NQ down -48 points (-3.6%).

Linda Piazza : 10/8/2008 9:08:36 AM

Our futures have turned lower again, and I've been watching the DAX, too, retreat from its near-test of the breakeven level after the announcement was made. The DAX is now down 249.50 points. It had zoomed up from a day's low of 4870.20 to a day's high of 5319.15, but is now at 5082.20.

Linda Piazza : 10/8/2008 7:27:53 AM

By now, if you've turned on your television, you have learned that there has been a globally coordinated rate 50 basis points rate cut. Our FOMC, the ECB, the Bank of England, The Swedish Riksbank, the Bank of Canada, and the Swiss National Bank all coordinated the move. Japan has applauded the move but did not participate. While participating in this action to lower the key lending rate to 1.5%, the FOMC also cut the discount rate by 50 basis points, to 1.75%. Futures were sharply negative before the announcement but turned sharply higher afterwards.

Market Monitor Archives