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Keene Little : 11/4/2008 1:27:38 AM

Tuesday's pivot table: Link

There hasn't been much of a change to the SPX daily chart to suggest whether or not we'll see a little more rally up to the 1000 area before pulling back again or if we'll start back down from here. The oscillators are providing some clues at the moment. It's not shown on this daily chart but stochastics has made it back up into overbought while MACD heads for the zero line. RSI hasn't been able to get above the 50 line. If all three turn back down (from overbought, the zero line and the 50 line, resp.) we'll have a sell signal. Link

Jeff Bailey : 11/3/2008 10:27:23 PM

Closing US Market Watch Link

OI Technical Staff : 11/3/2008 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The Market Monitor has been archived.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.



Tab Gilles : 11/3/2008 6:55:59 PM

Open Positions:

Apple (AAPL) $106.96

Bullish Call Spread opened 10/30 --- December $115 Call QAA-LC Bid $6.55 --- December $120 Call QAA-LD Ask $4.90 --- $1.65 minus net cost basis $2.20 = -$0.55 (25%)

S&P500 SPDR (SPY) $97.11

Bullish Call Spread opened 1/3 position today --- Bought December $95 Call SWG-LQ $7.25/$7.35 --- Sold December $100 Call SWG-LV $4.55/ $4.65 [net cost basis $2.80]

Closed today; SPY $97.11 SWG-LQ $7.15 / SWG-LV $4.65 net $2.50 / $2.50-$2.80= -$0.30 (10.7%)

Jeff Bailey : 11/3/2008 5:12:11 PM

Closing Internals found at this Link

Jeff Bailey : 11/3/2008 4:40:58 PM

NYSE and NASDAQ volume very light today at 4.48B and 1.77B. Lowest daily volume of Q4.

Jeff Bailey : 11/3/2008 4:35:34 PM

Global Bullish % (10/31/08 Close) at this Link

Jeff Bailey : 11/3/2008 4:14:27 PM

Avon Products (AVP) $25.23 +1.61% ... finishes juuuuust about middle ($25.21) of its 10/29 to 10/30 gap lower.

Jim Brown : 11/3/2008 4:10:38 PM

I am actually amazed that the markets held their ground today. I really expected some profit taking from last week's window dressing.

Jim Brown : 11/3/2008 4:09:18 PM

Market Monitor Problems
Several people have reported problems with the browser version of the market monitor and with broken links in the content. The link issue has been fixed and should no longer be a problem.

If you are having problems with the browser version make sure the link you use to access the monitor page is this one. Link

The old link pointed to a server on the west coast and the new one correctly points to the new server on the east coast. This version automatically refreshes the browser page every two minutes where the desktop monitor displays updates in real time.

Keene Little : 11/3/2008 4:01:08 PM

So far SPX did a nice retest of its broken uptrend line (slight poke above it). The late-day high makes a good place to park your stop for a short play into tomorrow (could get tagged during overnight hours so assess your risk and willingness to hold overnight). I still recommend options plays in this market for now.

Jeff Bailey : 11/3/2008 3:52:44 PM

YM 9,329

Jeff Bailey : 11/3/2008 3:49:47 PM

Pretty much daily pivots all around.

Jeff Bailey : 11/3/2008 3:48:42 PM

TRIN 1.16 and TRINQ 1.13

Jeff Bailey : 11/3/2008 3:48:20 PM

Major averages rather calm today in my opinion (based on recent week's trading). Advancers continue to hold over decliners at both exchanges.

NYSE 1,697/1,316

NASDAQ 1,563/1,305

Keene Little : 11/3/2008 3:47:17 PM

NDX jumped back above its uptrend line and therefore negates the potential importance of it. So far it might mean only that we're stuck in a larger sideways consolidation. SPX is back up for a potential retest of its broken uptrend line, near 970 right now.

Jane Fox : 11/3/2008 3:44:05 PM

Here are the internals and they do support neither the bulls nor the bears. The VIX has stayed stubbornly bullish all day but the AD line and ratio were anything but bullish and the TRIN was downright bearish.

This lack of consensus is why the markets were whippy today. Link

Jeff Bailey : 11/3/2008 3:40:02 PM

Most Actives ... QQQQ $32.72 -0.51%, XLF $15.60 +0.45%, C 14.03 +2.78%, HIG $16.00 +55.03%, SPY $96.61 -0.22%, MSFT $22.71 +1.70%, CSCO $17.13 -3.60%, EEM $25.29 -0.55%, INTC $15.66 -2.30%, UYG $10.04 +1.00%

Jeff Bailey : 11/3/2008 3:19:28 PM

dj- FED'S LACKER SEES US OUT OF RECESSION IN 2009

Richmond Fed President Lacker is cautiously upbeat about the economy in 2009, saying it is likely to regain momentum from 'this recession' due to stimulative monetary policy and an end to housing and other drags on activity.

Keene Little : 11/3/2008 3:18:31 PM

NDX broke its uptrend line from last Wednesday this afternoon and a retest would occur with a bounce back up near 1332. Watch for a kiss goodbye short play setup if it happens. NDX 10-min chart: Link

Jeff Bailey : 11/3/2008 3:14:13 PM

dj- VOTERS TO DECIDE STATE TAX REFERENDA

Among raft of ballot measures: Massachusetts voters will decide whether to scrap state's income tax, while Colorado voters consider whether to roll back spending limits that were put in place in 1992 as part of Taxpayer Bill of Rights.

Keene Little : 11/3/2008 3:12:25 PM

For the next leg down this afternoon we should see SPX drop to about 950 and then consolidate for a little more before dropping lower again, with the 944 area being a good target (maybe tomorrow morning). First thing the bears need to do is break Friday afternoon's lows (SPX 957.35, NDX 1319.65). NDX is closer to doing that at the moment (and has had the biggest turnaround today).

Jeff Bailey : 11/3/2008 3:10:47 PM

YM 9,245

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

dj (earlier)- ALLEGHENY ENERGY TO CUT CAPITAL SPENDING

Greensburg, Pa., power company will reduce capital spending to $1.1 billion from $1.35 billion this year, and to $1 billion from $1.18 billion for 2009. Pushes Potomac-Appalachian Transmission Highline project to 2013.

Jeff Bailey : 11/3/2008 3:08:56 PM

dj- US PENSION INSURER RAISES ANNUITY PAYMENTS

U.S. Pension Benefit Guaranty Corp. announces a $2,250 increase to annuity payments that workers would receive in 2009. Those who retire at age 65 in underfunded pension plans terminating next year would receive $54,000 each year.

Jeff Bailey : 11/3/2008 3:08:04 PM

dj- US AUTO SALES SLUMP IN OCTOBER; GM DROPS 45%

General Motors reports its first sub-200,000 sales month since at least the 1970s, as slumping consumer confidence and the worsening credit crunch kept buyers away from showrooms. Toyota sales fall 23% and Ford posts a 30% decline. GM's North America sales chief, says that adjusted for population growth, industrywide sales were probably the worst since World War II. Ford executive sees true test of a bottom is the first quarter.

Tab Gilles : 11/3/2008 4:01:38 PM

S&P 500 ($SPX)

The SPX is cheap based on trailing earnings, now on forward earnings it depends whose numbers you use? Standard and Poor's has estimates for '08 at $87.38 and '09 at $74.11, Merril Lynch ests. '09 $60 and the "street" by Reuters '09 est of $91.41.

Earnings have had a huge decline Y-O-Y, the largest since 1938. Take a look at this 50 year chart: Link

Will we see a P/E of 8 like that of 1982? I don't believe so, once we see confidence comeback we should see a snapback and a I don't see a deep recession. Link

Technicals point to nearterm bounce to 1100, or about a 38.2% Fibonacci Retracement. I got bullish last week with a cross over the 21-dma. I'm targeting the 50-ma as an upside PO. The Vix has declined after hitting an unbelievable 89, currently 54.57, I believe it will get down to the low 40's nearterm. Link

As for liquidity, or M2, the Fed, Treasury and Congress along with global central banks have been pouring money into the system. For the week ending October 20, seasonally adjusted M2 increased to $7.9252 trillion which was an increase of $54.3 billion. Since the week ending September 15, the Federal Reserve has increased seasonally adjusted M2 by $256.3 billion which is approximately an annualized 35% rate of increase. Link

The election tomorrow could present the catalyst for a nearterm rally on the SPX. I'm suggesting taking a 1/3 position today, another 1/3 tomorrow and the remaining 1/3 position Wednesday on the SPX. Let's use the SPY here: I'm looking at a bullish call spread into December.

Buy the December 95 Call Option, SWG-LQ (currently 7.25/7.35) and Sell the $100 Call SWG-LV(4.55/4.65), Net cost $2.80.

Use the 10-ma on the $SPX as a Stop ($92.55). Link

Jim Brown : 11/3/2008 3:03:13 PM

I am actually amazed that the markets are holding up as well as they are after the +11% gain last week and terrible ISM numbers this morning. I still expect a sell into the close but I would love to be proved wrong.

Jeff Bailey : 11/3/2008 2:15:52 PM

02:00 Internals found at this Link

Jeff Bailey : 11/3/2008 2:03:48 PM

CI, HUM, AET, UNH montage Link

Jeff Bailey : 11/3/2008 1:57:38 PM

HUM $33.30 +12.53% and AET $25.97 +4.42% ... look "squared up" in your conventional. 19.1% here.

Jeff Bailey : 11/3/2008 1:54:02 PM

dj- GM Oct. Total Vehicle Sales -45% to 170,585

Jeff Bailey : 11/3/2008 1:53:05 PM

At this morning's OPEN, IBM was 7.94%, CVX 6.37%, XOM 6.33%, PG 5.51%, MMMM 5.49% .... AA 0.98%, GM 0.49%

Keene Little : 11/3/2008 1:52:52 PM

If the market drops this afternoon I think a good initial downside target would be SPX 944 where we'd have two equal legs down from Friday's high. A break of its uptrend line, now near 965 and being tested as I type, should indicate the leg down has started. But first it has to break (and then watch for the possibility of a retest and kiss goodbye. SPX 10-min chart: Link

Jeff Bailey : 11/3/2008 1:51:26 PM

Dow 30 PRICE-WEIGHTED Index Components at today's OPEN Link

Jeff Bailey : 11/3/2008 1:36:43 PM

dj- US 3-Month Auction: 0.530%; 68.32% at the high; Bid-to-cover was 2.86

Jeff Bailey : 11/3/2008 1:25:07 PM

YM 5-minute day trader's chart Link

Bound by MNTHLY Pivot and DAILY Pivot

Keene Little : 11/3/2008 1:19:39 PM

Still coiling and could go either direction. If it drops I'd look for a move down at least equal to the drop from Friday's high to its afternoon low (about 27 S&P points and almost 40 NDX points).

Jeff Bailey : 11/3/2008 1:19:28 PM

YM Daily, Weekly, Monthly Pivot Levels Link

Derivation: REGULAR SESSION high/low and settle to match DIA cash sessions.

Jane Fox : 11/3/2008 1:18:52 PM

THe DOW is up 33 points. No that is not 333 points just a measley 33.

Jane Fox : 11/3/2008 1:18:12 PM

Here are the overnight charts and as you can see we are still in the overnight range. Feels strange heh? Link

Jeff Bailey : 11/3/2008 1:07:53 PM

Current OPEN/active MM Trade Profiles that I (Jeff Bailey) have made at this Link

Priced within last 15-minutes.

Jeff Bailey : 11/3/2008 1:00:38 PM

October'08 Trade Blotter of CLOSED trades that I (Jeff Bailey) made at this Link

Traders would sweep the gain to their checking/savings accounts. Account goes back to $10,000.00. New month begins.

Keene Little : 11/3/2008 12:45:55 PM

Maybe the market will get a little more active after lunch. After the wild ride we've been on lately, this consolidation feels the market has fallen asleep.

Jeff Bailey : 11/3/2008 12:43:03 PM

My CI to UNH observation would suggest more of a "buying of weakness" and some marginal "selling of strength" taking place among market participants.

Jeff Bailey : 11/3/2008 12:33:00 PM

CI $17.62 +8.09%
HUM $32.36 +9.36%
AET $25.97 +4.42%
UNH $23.67 -0.25% ...

Jeff Bailey : 11/3/2008 12:17:18 PM

NCC $2.51 -7.03% ... overly "high" print late Friday at $2.70

Jeff Bailey : 11/3/2008 12:16:40 PM

PNC $67.92 +1.87% ... Post-NCC acquisition offer high.

Jeff Bailey : 11/3/2008 12:16:05 PM

dj - US Bancorp to raise $6.6B from Treasury Dept.

USB $30.59 +2.61% ...

Jeff Bailey : 11/3/2008 12:12:17 PM

12:00 Internals at this Link

Keene Little : 11/3/2008 11:24:30 AM

Price action is contracting so we've got a bigger move coming (about 20-30 S&P points) but it's hard to say which direction. If it moves sharply to the upside then the upper target near 1000 remains a good one.

Keene Little : 11/3/2008 11:19:58 AM

Looking a little closer at the SPX 120-min chart I posted last night, the 60-min chart shows a little parallel up-channel for price action since last Wednesday, the top of which crosses the Fib projection at 999.32 around 12:30 PM today: Link . So that makes for a good upside target for now (doesn't mean it will get there or stop there). In the meantime the bottom of the channel, the uptrend line from Wednesday afternoon, is now near 960.

Jeff Bailey : 11/3/2008 11:19:09 AM

CME Nov'08 to Aug'09 Regional Housing Futures (table) at this Link

Jane Fox : 11/3/2008 10:53:29 AM

ES made a new daily low but it did not hold and has rallied so the VIX was telling us to keep the faith.

Jeff Bailey : 11/3/2008 10:52:52 AM

YM's Settlements on Friday

Dec'08 9,298
Mar'09 9,278

Jeff Bailey : 11/3/2008 10:49:29 AM

Today's Global Economic Calendar Link

Jeff Bailey : 11/3/2008 10:49:03 AM

Sunday's Global Economic Calendar Link

Jane Fox : 11/3/2008 10:47:58 AM

I am reading that Citibank lost $1.4 Trillion (yes folks that is a "T") in the third quarter from credit card securitizations and that it expects these losses to continue and reach record levels in 2009.

Here is how the FDIC website defines securitization of credit card receivables. It is the process by which these financial assets are transformed into securities. Benefits of securitization, when used properly, provides financial institutions with a useful funding, capital, and risk management tool. Risks however, requires appropriate risk management processes. The key to a bank's success with using securitizations lies in the quality of the underlying receivables, which is directly related to the underwriting and credit risk management techniques employed.

Jane Fox : 11/3/2008 10:35:16 AM

Well there it goes ES to new daily lows. So much for the VIX today. THis is one of the most reliable internals i have and does not fail me much but it does on occasion.

The AD line is still above 0 as well, albeit not a lot but not below 0. This is not making sense to me.

Keene Little : 11/3/2008 10:30:27 AM

The uptrend lines from last Wednesday for SPX and NDX are currently near 957 and 1322, resp. Those are the short term key levels for the downside at the moment. A break of Friday afternoon's lows would confirm the break and suggest you'll want to look for shorting opportunities from there. In the meantime the short term trend is up.

Jane Fox : 11/3/2008 10:30:17 AM

The VIX and S&P futures are still not in sync. ES had made a triple bottom and the VIX continues to fall. Link

Jane Fox : 11/3/2008 10:27:30 AM

WASHINGTON (MarketWatch) - The nation's manufacturers continued to cut back production sharply in October for the second straight month, the Institute for Supply Management reported Monday. The ISM index fell to 38.9% in October from 43.5% in September. This is the lowest level since September 1982. The size of the decline was unexpected. The consensus forecast of estimates collected by Marketwatch was for the index to fall to 41.5% as all regional manufacturing surveys were weak in October. Both new orders and production fell to their lowest level since the early 1980s. Readings below 50 indicate contraction. The ISM index had plunged in September to recession territory of 43.5% from 49.9% in August.

Keene Little : 11/3/2008 10:24:42 AM

Price action got a little whippy around the U.S. factory orders number (lowest in 26 years) but oddly it seems someone tried to do some buying on that dismal news. Either they think it has to get better from here (and they're buying the bottom) or else we're getting a little help from our government friends.

Jeff Bailey : 11/3/2008 10:18:33 AM

10:00 Internals at this Link

Jane Fox : 11/3/2008 10:17:21 AM

The AD line reached a high of 952 but has now fallen back to +386.

The TRIN started out at 0.67 but climbed to 1.30 at the same time the AD line was climbing which does not make sense however it could have been telling us the AD line climb was doomed. It will take me a long time before I put a lot of faith in the TRIN because on some of the most bearish days of late the TRIN was well below 1.00.

Jane Fox : 11/3/2008 10:09:01 AM

The S&P futures are testing daily lows but the VIX is not testing daily highs so these two are out of sync telling me the S&P lows will hold.

Keene Little : 11/3/2008 9:56:14 AM

The whole climb up from Wednesday afternoon's low looks more like an ending pattern (choppy with overlapping highs and lows and negative divergences) but we need to see a break of the uptrend lines from Wednesday to confirm it's finished. I went probing for a short play at the end of the day Friday because I liked the setup there. If it rallies higher than Friday's high then we could see an attempt to push this up to the SPX 1000 area so consider that possibility in your decision making process if holding short.

Jane Fox : 11/3/2008 9:55:57 AM

NEW YORK (MarketWatch) -- Struggling electronics retailer Circuit City Stores Inc. said Monday that it's shutting 155 U.S. underperforming stores, reducing future store openings and aggressively renegotiating certain leases to help preserve cash after its liquidity deteriorated and its vendors tightened the company's payment terms.

Jeff Bailey : 11/3/2008 9:55:36 AM

Weekly, Monthly, Quarterly Index Pivot Matrix at this Link

Jane Fox : 11/3/2008 9:50:06 AM

Not much going on in the Crude market today but it does look like there may be a bottom forming. If so then a rally to around $80.00 is not out of the picture. Link

Jane Fox : 11/3/2008 9:41:59 AM

VIX is making new daily lows telling me the bulls are getting the upper hand.

Jane Fox : 11/3/2008 9:39:48 AM

LONDON (MarketWatch) -- Short-term borrowing costs continued to ease Monday, following last week's decision by the U.S. Federal Reserve to cut its key lending rate from 1.5% to 1%. The three-month London interbank offered rate, or Libor, for dollar loans fell to around 2.86% from around 3.03% on Friday. Economists look to easing Libor rates as a sign that tensions are easing in interbank lending markets. Before the credit crunch, three-month Libor typically traded within half a percentage point or less of the official Fed target. Three-month sterling Libor slipped to around 5.78% from 5.84% Friday, while three-month euro Libor edged down to just below 4.74% from around 4.77% Friday.

Jane Fox : 11/3/2008 9:38:51 AM

TEL AVIV (MarketWatch) -- The U.S. government's "disparate" responses to the problems at financial firms may have confused market participants as to which companies would get help and in what form, thus adding to the market turmoil, said Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, according to The Wall Street Journal. "Shifts in expectations regarding official intervention may have added volatility to financial-asset markets that were already roiled by an increasingly uncertain growth outlook," Lacker said at Hebrew University of Jerusalem, according to prepared remarks. Investors and Wall Street executives have criticized the government for sending mixed signals about which companies it would use taxpayer funds to support, the Journal reported.

Jane Fox : 11/3/2008 9:37:32 AM

AD line opens at a very neutral -131. This could be a very boring day. We have gotten to a lot of volatility and anything less than a 100 point move in the DOW will be viewed as quite boring.

Keene Little : 11/3/2008 9:24:28 AM

Equity futures had climbed back up for a retest of Friday's highs but since 9:00 PM last night they've ben sinking back down and are near their lows for the after-hours session. Futures are only slightly negative and there is the possibility we'll see a rally this morning to test the overnight highs (and then some). I'll be watching for breaks of the uptrend lines from Wednesday afternoon's lows to signal the start of another leg down.

Jane Fox : 11/3/2008 9:14:01 AM

Here are the overnight charts. The lower lows and highs are telling me the trend is down but the only market to break overnight lows is the Russell 2000 (TF). Link

Jane Fox : 11/3/2008 9:09:05 AM

Good morning all. Today we have the 10:00ET ISM Manufacturing PMI and Contruction Spending economic reports released. I would say you should take note of these reports because they are market movers, well the PMI is for sure.

Jim Brown : 11/3/2008 3:03:24 AM

New Option Investor Website
Over the weekend the OptionInvestor.com website was moved to a new hosting center. We took the opportunity to upgrade the website to include all the content produced over the last 11 years. You can find your favorite Trader's Corner or Options 101 with just a few clicks. You can review market commentary from thousands of days of market action. You can also find quick links to all the various Option Investor publications.

Unfortunately with any major change there is always the opportunity to break something. Passwords may not work for some people, access permissions may not work correctly. This is due to the various methods and subscription types used over the last 11 years. Merging them all into one database and standardizing them may have given some people access to publications they no longer subscribe to and accidentally prevented access to some valid subscriptions.

If you are having trouble accessing any current subscription on the new website you can rest assured we will restore service the instant we learn of the problem. To contact customer service please send am email to support[at]optioninvestor.com and we will get back to you as soon as possible.

We hope you enjoy the new Option Investor website and would appreciate your comments as well as your complaints.

Jim Brown : 11/3/2008 1:55:19 AM

Tech support will be working on the link problem first thing Monday morning.

Keene Little : 11/2/2008 10:45:50 PM

I'm experimenting with the Market Monitor now that we're over onto a different server. I've noticed that the chart links do not work from the standalone version of the MM but do work from the browser version. Try the browser version if you are also having trouble with the standalone.

Keene Little : 11/2/2008 10:31:48 PM

Monday's pivot table: Link

The SPX 120-min chart shows the possibility for a continuation of the rally on Monday and then finding resistance near 1000 and then turning back down to either the bottom of a sideways triangle that will play out into mid November (pink) or just keep heading down to new lows for the year (dark red): Link

Price may not make it up to 1000 (or stop there) but keep an eye on price action if it does rally to there on Monday. The daily chart keeps the potential moves in perspective: Link . SPX has upside potential to 1050 if it can rally much above 1005 and the NDX daily chart shows upside potential to near 1440 to the top of its parallel down-channel before again heading lower: Link

OI Technical Staff : 11/2/2008 10:00:00 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.

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