Option Investor
Printer friendly version
Jeff Bailey : 10/23/2008 9:43:45 PM

Closing Internals at this Link

Jeff Bailey : 10/23/2008 9:26:20 PM

Closing Market Watch at this Link

Jeff Bailey : 10/23/2008 4:54:52 PM

ES 5-minute recap Link

Jeff Bailey : 10/23/2008 4:32:43 PM

YM 5-minute recap Link

Jeff Bailey : 10/23/2008 4:21:27 PM

YM 8,783

Jeff Bailey : 10/23/2008 4:19:35 PM

Microsoft (MSFT) Earnings Press Release Link

Jeff Bailey : 10/23/2008 4:16:09 PM

Microsoft (MSFT) $22.39 +3.99% ... $23.50 on headline numbers.

Jeff Bailey : 10/23/2008 4:15:37 PM

YM 8,752

Jeff Bailey : 10/23/2008 4:14:06 PM

YM 8,726

Jeff Bailey : 10/23/2008 4:03:11 PM

120 x $5 = $600

Jeff Bailey : 10/23/2008 4:02:37 PM

120 in last 5-minutes.

Jeff Bailey : 10/23/2008 4:01:51 PM

YM 8,670 ... see last night's trade!

Jeff Bailey : 10/23/2008 3:58:08 PM

QQQQ $30.14 -1.53% ...

Jeff Bailey : 10/23/2008 3:57:02 PM

Just a "whacky day" ...

Like a box full of chocolates.

Jeff Bailey : 10/23/2008 3:56:11 PM

DUG $49.18 -8.89% ...

Jeff Bailey : 10/23/2008 3:55:56 PM

DIG +8.25% ...

Jeff Bailey : 10/23/2008 3:55:44 PM

OIX +5.83% ...

Jeff Bailey : 10/23/2008 3:55:09 PM

Really need to thank Danny for his "scalp day trade request" last night. (wink)

What a day!

Jeff Bailey : 10/23/2008 3:53:55 PM

CNBC's Maria Bartiromo ... "This market is completely whacked!"

Jeff Bailey : 10/23/2008 3:52:56 PM

Biiiiig volume spike in Lennar (LEN) $7.14 -15.40% .... last 5-minutes.

Keene Little : 10/23/2008 3:52:48 PM

Yesterday's late-day rally got SPX back above its broken uptrend line from October 10th. It broke again today and now it looks like once again the late-day buying is going to get SPX back to or above that trend line. We've now got a strange looking pattern to the downside from Tuesday which supports the view that it's corrective and will lead to another rally leg within the larger sideways triangle. I keep saying we should expect whipsaw and sharp reversals but I must admit I'm getting tired of figuring this one out. That's what 4th waves do to you.

Jeff Bailey : 10/23/2008 3:51:33 PM

YM trend from 10/10 low to 10/16 traded here.

Jeff Bailey : 10/23/2008 3:50:48 PM

YM 8,611 ... busts a move

Keene Little : 10/23/2008 3:47:45 PM

We've got what looks like a corrective pullback so it looks like we're going to head higher into the close.

Jeff Bailey : 10/23/2008 3:39:20 PM


Commercial paper volumes shrink by $61.4 billion, with $45.5 billion of the declines stemming from the financial sector. Markets hold out hope that the Fed's backstop facility, to be launched Monday, will be a catalyst for improvement.

Jeff Bailey : 10/23/2008 3:36:01 PM

dj- Mexico September trade deficit $2.68B; Conensus was deficit of $1.48B

Jeff Bailey : 10/23/2008 3:32:53 PM

dj- Dollar drops under Y96 as risk aversion spikes

Jeff Bailey : 10/23/2008 3:26:54 PM

YM volume correction alert! ... switched back over to QCharts6.0 and intra-day YM volume "normal" ... must have been something with 5.1 prior to this afternoon.

Keene Little : 10/23/2008 3:24:39 PM

With the pullback now from the top of the 3-wave bounce, lower your stop to just above the high of it. It could turn into a larger correction so this is a quick test of it to see if we now head for new lows, otherwise get out of the way.

Jeff Bailey : 10/23/2008 3:21:28 PM

GG-KW target will be $23.00 in the underlying.

Jeff Bailey : 10/23/2008 3:18:07 PM

OIX.X +2.95%

OIH +2.29%

DRG.X +1.68%

XNG.X +0.71%

Jeff Bailey : 10/23/2008 3:17:07 PM

Disclosure needed: I currently hold bullish position in GG.

Jeff Bailey : 10/23/2008 3:16:46 PM

VIX.X 74.63 +7.15% ...

Jeff Bailey : 10/23/2008 3:16:30 PM

GG $15.84 -5.25% ...

Jeff Bailey : 10/23/2008 3:16:11 PM

Swing trade call alert! ... for one (1) of the GoldCorp. GG Oct. $17.50 calls (GG-KW) at the offer of $1.80.

Keene Little : 10/23/2008 3:15:57 PM

We've got a 3-wave bounce off this afternoon's low so it's a setup for a short play to see if it turns right back down.

Jeff Bailey : 10/23/2008 3:09:13 PM

NYSE a/d 623/2,398

NASDAQ a/d 527/2,318

Jeff Bailey : 10/23/2008 3:07:44 PM

DJUSHB 186.61 -16.94% ... ???? is this correct?

Jeff Bailey : 10/23/2008 3:06:42 PM

OIX.X +0.13% ... sector winner.

Jeff Bailey : 10/23/2008 3:05:32 PM

YM ... so far has refused to find a 5-minute close below that 8,244

Jeff Bailey : 10/23/2008 3:03:19 PM

YM short stop alert! 8,265

Jeff Bailey : 10/23/2008 3:02:38 PM

YM short lower stop alert! ... to even ... YM 8,244

Jeff Bailey : 10/23/2008 3:00:47 PM

YM short ... correction alert! ... stop is 8,327

Jeff Bailey : 10/23/2008 2:58:54 PM

YM short ... stop goes 8,237. target 8,110

Jeff Bailey : 10/23/2008 2:57:41 PM

YM short alert! 8,265

Jeff Bailey : 10/23/2008 2:54:57 PM

EWJ $8.43 -1.28% ...

Jeff Bailey : 10/23/2008 2:53:05 PM

FXY $103.56 +1.39% ... new 52-weeker.

Jeff Bailey : 10/23/2008 2:48:28 PM

How europe finished Link

Keene Little : 10/23/2008 2:45:07 PM

We've got a nice rebound started. Once again I'm going to be watching for a 3-wave bounce to correct today's decline as an opportunity to test the short side. It's entirely possible that we're going to remain trapped inside the large sideways triangle through most of next week (so more whipsaw reversals and big moves in both directions) but right now I want to try the short side on a bounce in case we're ready for another big one down (it's coming, whether from here or after the completion of the larger triangle).

Jeff Bailey : 10/23/2008 2:44:39 PM

NEVER ... never have I seen this before.

Jeff Bailey : 10/23/2008 2:44:21 PM

Now some volume bars on the YM ... 8,377

Jeff Bailey : 10/23/2008 2:35:25 PM

RVX.X 81.68 +12.13% ...

Jeff Bailey : 10/23/2008 2:31:24 PM

100 x $5/point = $500.00

Jeff Bailey : 10/23/2008 2:30:55 PM

I'm thinking 100-point entry point stops now. 40-seems too tight.

Jeff Bailey : 10/23/2008 2:30:15 PM

YM 8,304

Jeff Bailey : 10/23/2008 2:28:28 PM

YM short stop cover alert! ... 8,248

Jeff Bailey : 10/23/2008 2:24:09 PM

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

YM 8,223

Jeff Bailey : 10/23/2008 2:21:53 PM

YM short ... stop goes TIGHT again at 8,311. Target 8,100

Jim Brown : 10/23/2008 2:23:12 PM

Market Retest Play Alert - The equity markets appear to be headed for a retest of the recent lows and I believe this will result in an eventual rebound. When the rebound comes even if it is still weeks away I think it could be strong given how severely we are oversold.

I think now would be a good time to try some bottom fishing on a market index. The one I am using is the Russell 2000. I am going to recommend the ProShares Ultra ETF, Ticker UWM. This is the double performance ETF that will respond with twice the speed of the underlying index.

This ETF does not have LEAPS so I am going to recommend the April $25 Call option symbol ULX-DY currently $4.00. The UWM was at $25 at Wednesday's open and collapsed to $20 with today's market drop. If the Russell returns to the 700 level by April and that is where it was just four weeks ago, then the UWM would climb to $50 and the option be worth $25. I think the risk/reward ratio of trying to pick a bottom here justifies the trade. We don't have to pick an excat bottom just somewhere near the lows like we are today. It is a long term play and the options are cheap given the potential reward.

BUY UWM $25 April Call Option ULX-DY currently $4.00

Disclaimer: I currently hold call options on the UWM

Jeff Bailey : 10/23/2008 2:20:59 PM

YM Short alert! 8,261 here.

Jeff Bailey : 10/23/2008 2:18:39 PM

NASDAQ NL Alert! ... 453 ... per last Wednesday's wrap.

Jeff Bailey : 10/23/2008 2:14:13 PM

NYSE NL Alert! ... 694 ... per last Wednesday's wrap.

Jeff Bailey : 10/23/2008 2:11:35 PM


Keene Little : 10/23/2008 2:09:55 PM

SPX is now testing the October 16th low at 865.83. Any bounce off it followed by a drop below it would support the more immediately bearish view. The next test would be the October 10th low at 839.80.

Jeff Bailey : 10/23/2008 2:07:50 PM

HUM $34.05 -0.64% ... HUM-MF $2.35 x $2.70

Jeff Bailey : 10/23/2008 2:06:50 PM

YM 8,285 alert!

Keene Little : 10/23/2008 1:59:46 PM

Unless this really lets loose to the downside from here it's looking like a small descending wedge is forming at the lows now. That's typically an ending pattern and suggesting a bigger bounce is coming. Ideally one more up-down sequence to finish the pattern. Much below SPX 870 now would negate the pattern and become more immediately bearish.

Keene Little : 10/23/2008 1:54:30 PM

We've got bullish divergences building on the short-term charts at these lows so it sure seems like we're going to get a bounce. But we've seen these before and then when sell programs come out of the blue all the bullish divergences get negated. It's tricky spot right here.

Jeff Bailey : 10/23/2008 1:49:43 PM

YM 8,435 ... adjust "dynamic" to that recent intra-day low of 8,356.

Jeff Bailey : 10/23/2008 1:44:47 PM

RUT.X ... only equity-based index tracked in pivot matrix to see trade at WKLY S1 so far this week.

Jeff Bailey : 10/23/2008 1:43:12 PM

RUT.X 478.12 -4.75% ... juuust under its WKLY S1.

Keene Little : 10/23/2008 1:43:07 PM

The last low right here makes for a cleaner 5-wave move down from this morning's high. That should set up a bounce now to correct the decline. Now all it has to do is bounce.

Jeff Bailey : 10/23/2008 1:39:02 PM

FXY $103.06 +0.90% ... has not been good for Japan, or US equities.

Some mention yesterday of euro/yen cross rate also negative.

Euro weak; yen strong

Jeff Bailey : 10/23/2008 1:34:57 PM

To me, 1/2 backfills show little conviction.

Jeff Bailey : 10/23/2008 1:33:42 PM

HUM backfilled about 1/2 of yesterday's gap lower today.

Jeff Bailey : 10/23/2008 1:33:20 PM

HUM $34.75 +1.40% ... saw +5% earlier this morning. Has traded $36.49. Backfilled 1/2 of this morning's gap so far.

Jeff Bailey : 10/23/2008 1:28:31 PM

Again ... with volume turned on, note "no volume" today.

Jeff Bailey : 10/23/2008 1:27:31 PM

YM traders ... "click out" to a 15-minute interval chart. Take that trend from the 10/10 cash session low to the 10/16 low.

Jeff Bailey : 10/23/2008 1:14:33 PM

DUG "backfilled" yesterday's gap by 1/2. Not a full backfill.

Jeff Bailey : 10/23/2008 1:13:34 PM

"scalp" or "hair cut?"

Jeff Bailey : 10/23/2008 1:13:19 PM

DIG +0.40% ...

DUG $53.58 -0.55% ...

Jeff Bailey : 10/23/2008 1:12:52 PM

OIX +1.24% ...

OIH -1.07% ...

Jeff Bailey : 10/23/2008 1:10:28 PM

YM 8,397 ... after stop, YM went up to 8,526, then dart to here.

Keene Little : 10/23/2008 1:03:13 PM

Continuing to drop here and the decline from this morning's high now looks impulsive. That means we should soon get a bounce to correct the leg down and it will be an opportunity to get short for a bigger leg down to follow. This market is weak, very weak.

Jeff Bailey : 10/23/2008 12:59:47 PM

FXE $128.44 +0.13% ...

GLD $70.75 -1.33% ...

SLV $9.46 +0.10% ...

Keene Little : 10/23/2008 12:59:10 PM

If SPX were to bounce back up this afternoon (big if so far), two equal legs up from yesterday's low would be at 931.32 which is right on top of the 38% retracement of the decline from Tuesday. That would be a sweet setup for a short play. In the meantime I'm trying to get a feel for whether or not this morning's leg down is more meaningful than just a sharp pullback (before adding to my short position trade).

Jeff Bailey : 10/23/2008 12:58:49 PM

GG $15.94 -4.83% ... at its cash low open. NO sign of overly eager short covering.

Jeff Bailey : 10/23/2008 12:57:40 PM

The VOLUME in YM suggests either "sold out" today, or there's NO INTEREST/DISAGREEMENT among participants. If all that volume was BULLISH overnight, and YM breaks, or broke the low, then the further spill lower.

Jeff Bailey : 10/23/2008 12:55:56 PM

I saw the Stochastics low at time of YM short, but MACD pushed me toward the short below 8,446 overlap. Stochastics likely turn up, watch YM gravitate back higher to DAILY Pivot.

Jeff Bailey : 10/23/2008 12:53:51 PM

VERY unusal to see MORE volume during Europe opening in YM, then to see almost NO volume so far today.

Jeff Bailey : 10/23/2008 12:52:57 PM

YM 5-minute intervals Link

Jeff Bailey : 10/23/2008 12:48:58 PM

Noooow it might want to come back to Pivot.

Jeff Bailey : 10/23/2008 12:48:20 PM

YM short stop alert! 8,460 ...

Jeff Bailey : 10/23/2008 12:45:20 PM

YM short ... stop goes 8,460. Target Daily S1

Jeff Bailey : 10/23/2008 12:43:55 PM

YM short alert! 8,431

Keene Little : 10/23/2008 12:39:54 PM

SPX needs to get back above 900 relatively quickly in order to maintain the bullish possibility for another leg up this afternoon.

Jeff Bailey : 10/23/2008 12:33:58 PM

A wild one developing

Keene Little : 10/23/2008 12:31:22 PM

Turning a little more bearish here. SPX has now retraced 62% of this morning's bounce (893.77) so there's still hope for a bounce if it holds here. It is undercutting its uptrend line from October 10th again (as it did yesterday before the strong bounce back up) so a break down from here could be quite bearish. I'm feeling a little leery about a whipsaw reversal coming. NDX is more bearish as it nears a test of this morning's low.

Jeff Bailey : 10/23/2008 12:21:01 PM

INCREDIBLE volume observations from YM ... check out overnight from 03:00 AM to 09:30 AM, then after cash open.

Jeff Bailey : 10/23/2008 12:16:01 PM

12:00 Internals at this Link

Keene Little : 10/23/2008 12:06:57 PM

If this morning's pullback continues into the early afternoon looking more like a choppy pullback in a bull flag pattern I think it will be safe to assume we'll see another rally leg into the close. But as stated earlier, SPX 895 is a key level to the downside--break that and we'll probably see some strong selling.

Keene Little : 10/23/2008 11:58:24 AM

I'm not listening but I understand Greenspan is testifying before Congress (always a circus show anyway) and saying he is in a state of "shocked disbelief" at the credit crisis unfolding. It's proof to me that people like Greenspan are book smart and common-sense dumb. The "financial engineering" he was so proud of in the early 2000s was so dangerous, and not just in retrospect. There were many, including Buffett, pointing to the huge systemic risk.

All it needed was a Minsky moment and the whole house of cards is collapsing. Greenspan will go down in history as one of the worst central bankers we've had. Unfortunately the guidance of the banking system on his watch is what will now cause huge pain for ordinary Americans (and others world wide as they too were playing with the same foolish highly-leveraged investment vehicles). Iceland's government investments became one big highly leveraged hedge fund and is now in dire straits.

Jeff Bailey : 10/23/2008 11:53:15 AM

HUI.X +1.91% ...

Jeff Bailey : 10/23/2008 11:52:44 AM

GG $16.75 ...

Jeff Bailey : 10/23/2008 11:52:28 AM

SLV $9.58 +1.37% ...

Jeff Bailey : 10/23/2008 11:52:16 AM

GLD $71.10 -0.85% ...

Jeff Bailey : 10/23/2008 11:51:50 AM

Day trade stop alert! ... for the 1/2 position in GoldCorp. (GG) $16.70

Keene Little : 10/23/2008 11:46:34 AM

I'm watching the shape of the pullback to get some clues as to whether we could be at the beginning of a larger pullback or whether it will be just a pullback before heading higher again this afternoon. Not enough to go by yet. Two equal legs down would be at SPX 904/NDX 1231.73 so watch those levels for support if reached.

Jeff Bailey : 10/23/2008 11:31:42 AM

GG day trader's chart Link

Jeff Bailey : 10/23/2008 11:30:44 AM

GG $16.90 +0.89% ... GREEN #1 and 50% dynamic

Jeff Bailey : 10/23/2008 11:17:00 AM

GG Long .... stop goes $16.70 to begin. Target $19.80

Jim Brown : 10/23/2008 11:16:29 AM

Website Changes - Over the weekend we will be moving the Option Investor website to another hosting company. As part of the change we are happy to announce the return of the old website format with educational content dating back over 10 years.

Unfortunately when moving domain names from one location to another there is always the issue of propagation across the Internet. Sometimes it takes 24-48 hours for all the domain name servers to flush the old server address and replace it with the new one.

Since the move will occur over the weekend we are not expecting any material downtime but I am sure Monday will be full of surprises.

One of those surprises could be the Market Monitor. We are trying to take all the appropriate measures to guard against any down time but due to the various versions of the desktop monitor in existence as well as the real time nature of the product there may be some unexpected problems on Monday. Should we experience problems we have a team ready to act immediately once those problems appear.

Please bear with us as we attempt to improve our products.

Jeff Bailey : 10/23/2008 11:15:39 AM

Day trade long alert! ... for 1/2 position in shares of GoldCorp. (GG) $17.20 here.

Jeff Bailey : 10/23/2008 11:10:27 AM

QQQQ $30.89 +0.91% ... has traded GREEN #3. Has traded Red#4

Keene Little : 10/23/2008 11:07:50 AM

The quick 3-wave bounce off yesterday's low may be all we're going to see for the correction of the decline from Tuesday. But ideally we'll get a longer-lasting bounce (and obviously a little higher). The typical time for a correction, for where we are in the bearish EW pattern, is 62% of the previous decline. That would mean a correction that takes all day and not just the first 90 minutes of today.

Therefore it's possible we're only getting the completion of the wave-a of a larger a-b-c bounce that will play out today. This idea requires another pullback to correct this morning's bounce and then another leg up this afternoon so be prepared for some possible whipsawing today. It now takes a break below SPX 895 to say the bounce is probably over and we're heading for new lows (in a strong selloff).

Jeff Bailey : 10/23/2008 11:05:43 AM

10:00 Internals at this Link

Keene Little : 10/23/2008 11:03:46 AM

The leg up from this morning could be over soon--the push up here may be completing the 5th wave so watch for possible failure around 925-ish.

Jeff Bailey : 10/23/2008 11:03:17 AM

WKLY S2 41.17, or 4.117% ...

Jeff Bailey : 10/23/2008 11:02:52 AM

30-year $TYX.X 4.081% ... reversing back up from worrisome gap lower

Jeff Bailey : 10/23/2008 10:58:44 AM

QQQQ long setup cancel order alert! ... with QQQQ $30.77 +0.52% ... cancel prior order.

Jeff Bailey : 10/23/2008 10:54:12 AM

QQQQ $30.71 +0.22 ... Post setup low has been $30.24 ...

Jeff Bailey : 10/23/2008 10:53:17 AM

Sense a slight "bull equity" even though commodities a bit weak.

Jeff Bailey : 10/23/2008 10:52:47 AM

XNG.X +4.70% ...

Jeff Bailey : 10/23/2008 10:52:03 AM

Furnace has kicked on today ...

Jeff Bailey : 10/23/2008 10:51:45 AM

Cold here in the Mile High city ... 31-degrees as I type.

Jeff Bailey : 10/23/2008 10:51:14 AM

US Temperatures Link

Keene Little : 10/23/2008 10:50:47 AM

SPX just tagged the level for two equal legs up from yesterday's low--917.79. The risk for longs is that we could reverse back down at any time. I think it will head higher but understand the risk here--rallies are being sold and risk clearly remains on the long side.

Jeff Bailey : 10/23/2008 10:50:46 AM

UNG's WKLY S2 $28.43 ... really need that to hold, whip back higher for winter.

Jeff Bailey : 10/23/2008 10:49:31 AM

EIA Nat. Gas Storage Link ... Build of 70 Bcf.

Jeff Bailey : 10/23/2008 10:48:36 AM

UNG $28.89 -2.66% ...

Jeff Bailey : 10/23/2008 10:48:03 AM

Today's global econ calendar Link

Jeff Bailey : 10/23/2008 10:47:22 AM

Even when you're trying to get the intra-day internals posted ... (wink)

Jeff Bailey : 10/23/2008 10:46:20 AM

So many opportunities ... even if you feel you "missed the move" somewhere else.

Jeff Bailey : 10/23/2008 10:45:55 AM

Oh baby ... you KNOW how these two can move.

Jeff Bailey : 10/23/2008 10:45:38 AM

DIG $29.60 +9.62% .... "scalp" trader here?

Jeff Bailey : 10/23/2008 10:45:08 AM

OIH $88.54 +4.29% ... yes ....

Jeff Bailey : 10/23/2008 10:44:50 AM

OIX.X +4.85% ... yes.

Jeff Bailey : 10/23/2008 10:44:36 AM

Gives me an observation perhaps of some strength in oil/oil serv stocks.

Jeff Bailey : 10/23/2008 10:44:13 AM

Getting stopped in personal account on DUG $49.21

Jeff Bailey : 10/23/2008 10:42:49 AM

GLD 71.10 ... traders with their MONTHLY Pivot retracement and QTRLY know EXACTLY where it is.

Jeff Bailey : 10/23/2008 10:40:55 AM

GG "nailed" green #2 in early trade. Green#1 and WKLY S1 overlap

Jeff Bailey : 10/23/2008 10:38:03 AM

No ... already have some exposure to the banks/financial

Jeff Bailey : 10/23/2008 10:37:44 AM

NCC $2.83 +0.71% ... if LONG a call, do I need to try and "scalp" an XLF?

Jeff Bailey : 10/23/2008 10:36:40 AM

MSFT Daily Piv $21.87.

Jeff Bailey : 10/23/2008 10:36:26 AM

MSFT $21.77 +1.11% ... I think this still most heavy in QQQQ. WKLY S1 here.

Keene Little : 10/23/2008 10:35:36 AM

The current pullback should lead to another stronger leg up this morning (if we're to get the larger bounce to at least correct the decline from Tuesday). Then another consolidation followed by another leg up (to give us a 5-wave move up from this morning's low) into the target zone I mentioned earlier--ideally in the SPX 930-940 area. That's the kind of move I'm hoping to see today in order to set up the short play.

Jeff Bailey : 10/23/2008 10:35:14 AM

Red#4 has been traded in XLF

Jeff Bailey : 10/23/2008 10:34:20 AM

XLF $14.39 -1.70% ... at WKLY S1 right here.

Jeff Bailey : 10/23/2008 10:31:35 AM

QQQQ Heatmap ... Not real time, but like your INDU and SPX heavyweight, will do Link

Jeff Bailey : 10/23/2008 10:20:22 AM

GLD 70.98 -1.01% ...

GG 17.24 +2.86% ...

Jeff Bailey : 10/23/2008 10:18:23 AM

Could try and "scalp" a GG too.

Jeff Bailey : 10/23/2008 10:17:06 AM

Not kidding ... GG $17.58 +4.83% ... #3 most active.

Jeff Bailey : 10/23/2008 10:16:04 AM

QQQQ $0.25-box Link

Jeff Bailey : 10/23/2008 10:15:29 AM

QQQQ $1 box Link

Keene Little : 10/23/2008 10:15:10 AM

We got the bounce off the retest of the pre-market lows. Two equal legs up from yesterday afternoon would be at SPX 917.79. The 2nd leg up would be 162% of the 1st at 938.80. The previous 4th wave of the decline from Tuesday (common retracement level) is at 931.38. Those are some upside target levels and I'll be watching the form of the bounce to help get an idea where this could be headed.

The more bullish possibility is for a rally back up to the 1000 area but I'll be testing it along the way for a short play. Just keep in mind that we're still in a whippy environment so trade lightly and honor your stops. The moves are large and can hurt you bad if you're playing with futures.

Jeff Bailey : 10/23/2008 10:14:51 AM

NYSE a/d 1,315/1,393

Jeff Bailey : 10/23/2008 10:14:39 AM

NASDAQ a/d 1,034/1,329

Jeff Bailey : 10/23/2008 10:14:22 AM

Day trade long setup alert! ... with the QQQQ $30.38 -0.75% ... Let's look LONG 1/2 position (take $5K / price) should the QQQQ traded $30.05.

Stop goes $29.50, MAX target $32.52.

Jeff Bailey : 10/23/2008 10:08:47 AM

Placing a 5-mrt on the QQQQ ... from $30.48 to $30.69.

Jeff Bailey : 10/23/2008 10:03:28 AM

Placing a 5-mrt on the DIA ... from $86.28 to $85.61. Take 0% at $86.28 and "fit" the 19.1% at $85.61.

Jeff Bailey : 10/23/2008 9:59:18 AM

Pretty much tracking US's cash open.

Jeff Bailey : 10/23/2008 9:59:03 AM

European Markets Link

Keene Little : 10/23/2008 9:51:46 AM

Looks like we're headed for at least a retest of the pre-market lows in the futures. Obviously bulls would like to see those lows hold and cash levels hold above yesterday's lows.

Keene Little : 10/23/2008 9:42:50 AM

Not a bad start to the day. At this point we could get a pullback to correct yesterday afternoon's big spike up but so far it continues to look favorable for the bigger bounce today.

Keene Little : 10/23/2008 9:20:10 AM

Equity futures had a nice rally going last night but gave it all back and then some. DOW futures are down 40 points and down 200 from last night's high. We could get a retest of yesterday's low or slightly lower but anything more than that could lead to strong selling. I'm hoping that we'll instead get a bounce today/tomorrow for a better short play setup. I hate shorting into the hole.

Jane Fox : 10/23/2008 8:54:20 AM

Morning everyone. I will be taking a few days vacation to visit my sister in the beautiful city of Vancouver. See you all on Monday.

Jeff Bailey : 10/23/2008 1:22:29 AM

Hey ... $NIKK has trimmed losses ... -260, or -3.00% at 8,414.

Jeff Bailey : 10/23/2008 1:20:29 AM

OK ... real exciting World Series Game I. Won't spoil the ending for those in Japan and Asia that taped the game. I only caught the 9th. Excellent strategy used by the Rays manager in the top of the 9th. Think about the strategy as it relates to trading.

Jeff Bailey : 10/23/2008 1:18:21 AM

YM 5-minute and tonight's extended. Still showing CASH-session derived DAILY Pivot retracement (brown) Link

Jeff Bailey : 10/23/2008 1:03:00 AM

YM 5-minute interval chart where I can place (cash session) daily pivot retracement and be ready for tomorrow. Will get a 5-minute interval in the first 5-minutes of Thursday's cash session. Link

Have colored three (yellow) zones

Jeff Bailey : 10/23/2008 12:46:40 AM

DAILY Pivot Levels for YM Thursday (based on cash session) ... 8,047, 8,302, Piv= 8,564 , 8,819, 9,081

Jeff Bailey : 10/23/2008 12:37:09 AM

Here was what extended session high/low from Tuesday would have gotten a trader Link for the YM.

From my 12:23:14 with CASH SESSION DAILY's, note the S2 (cash= 8,814) and extended= 8,776.

Note how the YM actually traded at S2 Wednesday (yesterday).

Not picking on anyone, but just years of pivot level observations and trading.

Why the CASH session high/low? Because you can't trade the INDU/DIA in the evening. And FUTURES are used PRIMARILY to hedge the CASH (INDU/DIA).

Jeff Bailey : 10/23/2008 12:27:01 AM

YM cash high/low was 8,826/8,309 ... settle was 8,593 - 36 = 8,557

Jeff Bailey : 10/23/2008 12:25:23 AM

Again ... USE the CASH session High/Low and settle for your DAILY Pivots levels. NOT the overnights. MORE TIMES THAN NOT the "overnight" will throw off your trading. Again, been saying and showing this for years.

Can lead a horse, but can't make it drink.

Jeff Bailey : 10/23/2008 12:23:14 AM

YM 5-minute chart Link ... Far left would be last Thursday.

Jeff Bailey : 10/23/2008 12:18:56 AM

On Thursday of last week ... YM opened marginally up, traded DAILY Pivot early, then fell to DAILY S1 by 11:10 AM EDT. Reversed back up from there to finish DAILY R1.

Jeff Bailey : 10/23/2008 12:14:36 AM

Similar to last Wednesday evening.

Keene Little : 10/22/2008 11:37:04 PM

Thursday's pivot table: Link

The end-of-day bounce saved the SPX from a break of its uptrend line from October 10th, barely. And at the same time the leg down from Tuesday completed a 5-wave move so it should be ready for a bounce Thursday morning. The type of bounce should provide some clues as to what's next and at a minimum it will offer an opportunity or two to test the short side before climbing high enough to convince me it will probably head to at least the top of a large sideways triangle pattern I've been showing all week.

A typical retracement of the leg down from Tuesday would be about 50% and that gives us an upside target of 930. A 62% retracement is at 943 and then above that is a downtrend line from October 14th near 957 (the top of a potentially smaller sideways triangle 4th wave). I'll be looking for a 3-wave bounce for a short play setup and the above levels are potential upside targets to watch for. If it gets above 957 I'd say there's a good chance we'll see a rally up to the 1000 area over the next two days and then a continuation of the larger sideways triangle pattern, shown in pink on the 60-min chart: Link

At this point I'm leaning towards the more immediately bearish setup (dark red) which calls for the bounce to be followed by hard selling. The wave count for the move down from October 14th, after getting a bounce as depicted, will be set up for a 3rd of a 3rd wave down for the middle of the larger degree 5th wave (the move I'm projecting down to 650 by early November). That would be a nice ride from wherever the bounce stops. And then if it does get down to the 650 area as depicted it will be a great setup for a longer-term long play. But one leg at a time until we see where this market is headed next.

Jeff Bailey : 10/22/2008 11:25:25 PM

Asian Markets Link ... Nikkei-225 off 479, or -5.52% @ 8,196

Jeff Bailey : 10/22/2008 11:24:28 PM

YM +30 at 8,587

Jeff Bailey : 10/22/2008 11:23:13 PM

Tomorrow's (Thursday's) Global Economic Calendar Link

Can INFLUENCE day trader/scalp trader's setup.

Jeff Bailey : 10/22/2008 11:19:41 PM

dj- Japan September Trade
Trade surplus Y95.1B; Expected Y546.1B
Sep exports +1.5% on year
Sep imports +28.8% on year
US trade surplus Y562.7B; -28.1% on year.
Sep China trade deficit Y247.1B; +221.6% Y/Y
Sep Asia trade surplus Y672.4B; -35.1% Y/Y
Sep Europe trade surplus Y371.3B; -25.6% Y/Y

Jeff Bailey : 10/22/2008 11:10:02 PM

Trade Blotter of CLOSED and currently OPEN/active trade profiles that I've made at this Link

Just noting impact of VIX.X lately per HUM entry points and what HUM-MF option has done, or not done at this point. Alway have a plan and was pricing out some OUT-THE-MONEY covered put possibility if the PRICE/PREMIUMS are right. Hesitant to do ANYTHING with HUM until Nov. 5th.

Also continue to monitor possible COVERED CALL on the UNE-AJ, and while UNG sideways last couple weeks while oil falls, UNG not likely to "make the move" until oil can firm. UNG should "lead" any near-term advance. On 08/27/08 VIX.X finished 19.76, so UNE-AJ can still benefit greatly from PRICE rise. EVERYONE should know by now that winter is coming and US-based producers have shut in some production due to decline in price, slowing economy. What a Nat. Gas BULL needs is UNDER-estimation of winter (I have no clue), and OVER-estimation of economic slowing.

Jeff Bailey : 10/22/2008 10:50:27 PM

I will admit, and have in the past, that I am VERY busy during the day.

For this/that reason, the YM/DIA is a "simpler" index to day trade, thus my "specialty," as I can get up to speed quickly in a day.


PRICE weighted index.

I can pretty much "memorize" what a MAJOR component is doing based on oil (XOM/CVX). IBM is HEAVIEST and gives up recent 52-week LOWS.

Internals here can be snapshoted Link

I know that 28 of 30 are NYSE-listed. I can follow NYSE a/d line too.

Jeff Bailey : 10/22/2008 10:24:38 PM

Trade Rule Basics ...

1) Trade LEVELS!
2) RISK and REWARD! Must be able to "see" at least $2/$3 REWARD for every $1 RISK.
3) LEVELS at a MININIMUM start with WEEKLY and DAILY Pivot Levels and THEIR retracement. KNOW where MAJOR MONTHLY Pivot, R1/S1 and R2/S2 are at.
4) Look for OVERLAPS! Power in numbers!
5) Use my "5-mrt" technique. Measure that first 5-minute bar. Look for OVERLAPS!
6) Establish the "dynamic" intra-day range. Look for OVERLAPS.

Jeff Bailey : 10/22/2008 10:09:15 PM

Scalp Trader Email/Question ... Jeff: Can you send the set up for your daytrading chart? I noticed it once on the monitor, but did not see how to set it up. Also, do you have an instructional booklet comparable to your point and figure booklet for day trading. In this market environment I would like to scalp a trade or two, but would like to refresh my memory on what a good set up is.

Jeff's Reply:

What do you like to trade? YM? DIA? QQQQ?

I've shown the YM and QQQQ as an example, but let me know. Will set one up in the MM.

Hey, I also use a $10,000.00 account as my basic guide, so my POSITION SIZE is based on $10K MAXIMUM for a day trade.

I "made" $10K the benchmark so that traders with a $5K, or $100K account could take POSITION SIZE and easily divide to fit THEIR account.

That is ... IF $10K account, then # of shares of DIA, SPY, QQQQ would be

DIA $85.50 ... $10,000 / $85.50 = ~116 shares. So, need a trade setup with at least $1.00, or $100.00 as a scalp? Figure $20 commission round-trip?

SPY $90.50 ... $10,000 / $90.40 = ~110 shares. So, need a trade setup with at least $1.00, or $100 as a scalp? Figure $20 commission round-trip?

QQQQ $30.61 ... $10,000 / $30.61 = ~326 shares. So, need a trade setup with ... $0.33, or $100 as a scalp? Figure $20 commission round-trip?

YM is $5/point, so a "scalp" under current market conditions, is giving at LEAST 40-points of room to start. RISK on entry is -$200.00. And YM moves 40 in a blink of an eye these days.

Scalping a trade on DIA/SPY different than QQQQ because of their components on any given day.

DIA/SPY think "oil and financials" with an eye on IBM.

QQQQ is more "tech" and AAPL.

OI Technical Staff : 10/22/2008 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.

Market Monitor Archives