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Jeff Bailey : 1/13/2009 9:09:20 PM

Feb Crude Oil (cl09g) settled up $0.19, or +0.51% at $37.78. Five (5) day losing streak ends.

Jeff Bailey : 1/13/2009 6:01:47 PM

INTC $13.67 -0.87%
AA $9.55 -5.06%
JPM $26.35 +5.78%

Jeff Bailey : 1/13/2009 5:48:13 PM

RUT.X has overlap tomorrow at DAILY S1/WKLY S1. Likely an important level.

Jeff Bailey : 1/13/2009 5:47:26 PM

IWM's WKLY S1 ... $46.64.

Jeff Bailey : 1/13/2009 5:46:47 PM

Decent 3,000,000 shares billed out at $46.78 in IWM this evening.

Jeff Bailey : 1/13/2009 5:28:18 PM

YM settled 8,408 . Regular session high/low was 8,476/8,327

Jeff Bailey : 1/13/2009 5:26:29 PM

Closing Internals at this Link

Jeff Bailey : 1/13/2009 4:56:16 PM

Closing U.S. Market Watch Link

Jeff Bailey : 1/13/2009 4:24:39 PM

Current OPEN MM Profiles that I've made at this Link

See 03:48:27 and 03:51:50

Also day traded the YM long at 8,425, but was stopped for loss at 8,404. YM traded regular session range of 8,476-8,327.

Keene Little : 1/13/2009 3:59:13 PM

Price action is a little whippy this afternoon but the overall impression I have is that we're seeing a correction that will lead to lower prices tomorrow. It still takes a rally above SPX 883 to get the bulls at least back in the game. Right now they're playing pure defense and I think 2nd string is on the field.

Jeff Bailey : 1/13/2009 3:58:25 PM

XLF $11.05

YM 8,401

Jeff Bailey : 1/13/2009 3:56:57 PM

YM 8,406 ... repeated tests of WKLY S1 held so far. Regular session derived.

Keene Little : 1/13/2009 3:56:47 PM

I've been working on tonight's newsletter (filling in for Jim) so I just went back and checked my last post (which corrected the previous post) and noticed I also misstated ("didn't misstated") that one as well. Shows you what happens when you're not concentrating. Sorry about that--I right reel good sumtimes, wink.

Jeff Bailey : 1/13/2009 3:54:53 PM

If OPTION more you liking, then for $10K account, either 1 (100 share leverage) or 2 (200 share leverage).

Jeff Bailey : 1/13/2009 3:54:03 PM

For a $10,000 account, take $10,000 multiply by 0.25 to get $2,500.

Take $2,500 / $18.25 to get #137 shares.

Jeff Bailey : 1/13/2009 3:51:49 PM

UWM stop/target will be $17.25/$20.50

Jane Fox : 1/13/2009 3:51:09 PM

Only 15 minutes to go and both the S&P and NDX futures will trade the whole intraday session within the confines of their respective overnight ranges. Dow did almost except for a brief sojourn below the ON lows.

Jeff Bailey : 1/13/2009 3:49:06 PM

RUT.X 473.64 +1.03% ...

Jeff Bailey : 1/13/2009 3:48:32 PM

Swing trade long alert! for 1/4 position in the ProShares Ultra Russell 2000 (NYSE:UWM) at the offer of $18.25.

Keene Little : 1/13/2009 3:13:36 PM

Sorry, just realized I didn't misstated my last post. I meant to say this afternoon's bounce (not low) could complete the a-b-c bounce off yesterday's low.

Jeff Bailey : 1/13/2009 3:11:43 PM

NASDAQ a/d 1,343/1,384

Jeff Bailey : 1/13/2009 3:11:29 PM

NYSE a/d 1,456/1,533

Keene Little : 1/13/2009 3:04:31 PM

One other possibility for the wave pattern is for this afternoon's low to complete an a-b-c pattern off yesterday afternoon's low. For that kind of pattern (expanded flat correction) we could see a quick pop up to SPX 882 and then a stronger reversal back down again. For this reason I think SPX needs to get above 883 before considering it to be more bullish.

Jeff Bailey : 1/13/2009 2:52:41 PM

XLF $11.11 +1.46% ...

Jeff Bailey : 1/13/2009 2:52:12 PM

Dow Industrials ($INDU) 50-point box chart Link

Has traded 8,400 with a session low of 8,376.88. So, "O gets the square" at 8,400 and important supply/demand support.

Keene Little : 1/13/2009 2:50:04 PM

It is possible to now consider the leg down from Friday's high as complete. That completes a 3-wave move down from Tuesday, January 6th. So it's either the completion of an a-b-c pullback (dark red on the 60-min chart) that will lead to a new rally leg, or it's a 1-2-3 decline (pink) which calls for a 4th wave consolidation before heading lower again. First thing to watch is the downtrend line from last week, currently near 877. SPX 60-min chart: Link

Jeff Bailey : 1/13/2009 2:46:53 PM

RUT.X 471.78 +0.63% ... regular session high/low so far has been 476.23/466.05.

Since in a column of "O" we ask if it has traded 464.

Answer: No.

Since "No"

We ask ... Has it traded a 3-box reversal back higher to ... 472, 476, 480?

At this point of the session ...

Answer: No

Jeff Bailey : 1/13/2009 2:44:19 PM

Russell 2000 ($RUT.X) 4-point box Link

Jeff Bailey : 1/13/2009 2:25:31 PM

02:00 Internals found at this Link

Jeff Bailey : 1/13/2009 2:14:43 PM

It has taken me about three-time the amount of time and effort to track my "mentionings" trades, and it is MUCH easier and EDUCATIONAL to run a "hypothetical" portfolio each day and review it. Check our/my thought process and analysis.

I NEED to show VALUE of trade size, and while I'm all for "disclosure," I don't really want to be disclosing the amount of funds that I manage.

Jeff Bailey : 1/13/2009 2:10:00 PM

Alert! ... I'm going to once again fire up the Hypothetical MM Profiles Account

And profile LIVE trades and MANAGE them just as I do my OWN account.

I'm going to use a BENCHMARK of $10,000.00 as the account value. THIS IS IMPORTANT.

Why?

So, IF you have a $5,000 account, or a $20,000 account, or a $10 million account, my trade SIGNALS and POSITION SIZE stated (1/8 position, 1/4 position, 1/2 position, 3/4 position, or FULL position) can easily and quickly be comprehended by YOU and YOUR account.

Jane Fox : 1/13/2009 2:09:50 PM

The SPX has broken the upward trend (blue line) and closed below the 20EMA (magenta) so the last bastion of support is the December 22nd swing low (black line). Link

Keene Little : 1/13/2009 2:05:47 PM

The correction pattern that I thought would last a little longer appears to be finished already as SPX heads for new lows. At this point I think the December 29th low near 857 will hold and that means we could either start a stronger rally soon or simply enter a larger consolidation pattern (ugh).

Jeff Bailey : 1/13/2009 2:01:15 PM

Time stamp ... 01:58 PM ET

Jeff Bailey : 1/13/2009 1:58:31 PM

Sandler O'Neill & Partners analyst Jeff Harte cut his Q4 numbers on BAC. Now expects a loss of $0.02/share compare with prior estimate for gain of $0.61.

Also cut 2009 full year to $1.65 from $2.74.

Jeff Bailey : 1/13/2009 1:55:01 PM

BAC $10.55 -7.69% ... new session low.

Jeff Bailey : 1/13/2009 1:53:50 PM

YM 8,361

INDU 8,408

Jeff Bailey : 1/13/2009 1:53:28 PM

XLF $10.85 -0.91% ...

Jeff Bailey : 1/13/2009 1:51:49 PM

"should'a" just turned on the exit long with a short ... huh?

Jane Fox : 1/13/2009 1:51:27 PM

Even thought the S&P futures are just about to test their daily lows the VIX is not anywhere near its daily highs. This should really really worry the bears.

Jeff Bailey : 1/13/2009 1:51:11 PM

YM tapping DAILY S1 now ... 8,359

Jane Fox : 1/13/2009 1:48:31 PM

Both the DOW and the NDX futures are now testing their ON lows.

Jeff Bailey : 1/13/2009 1:48:13 PM

"Softy's WKLY Pivot $19.98 pretty much marks the session highs at this point.

Jane Fox : 1/13/2009 1:46:48 PM

My prediction this morning was that the markets would trade within their overnight ranges and the big caps have mostly done just that. The Russell 2000 futures (TF), however, broke above its ON high and remains there. Link

Jeff Bailey : 1/13/2009 1:46:32 PM

Microsoft (MSFT) $19.69 +1.18% ... also on the QQQQ-side of things.

Jeff Bailey : 1/13/2009 1:45:58 PM

Intel (INTC) $13.52 -1.95% ... on the QQQQ-side of things.

Jeff Bailey : 1/13/2009 1:45:08 PM

Now ... in my mind, it becomes a 50/50 probability that today is a "key reversal" day for the XLF.

60-minute intervals and new observation at least.

BULLS want a 60-minute interval CLOSE above $11.18.

Jeff Bailey : 1/13/2009 1:43:36 PM

XLF $10.95 (unch) ... now a 60-minute inteval. I slap on a WKLY Pivot retracement and see something I didn't see earlier. Link

Jeff Bailey : 1/13/2009 1:29:21 PM

RUT.X 472.02 +0.68% ... only major currently in the green.

Jeff Bailey : 1/13/2009 1:28:18 PM

YM 8,385

Jeff Bailey : 1/13/2009 1:28:03 PM

XLF 10.97 +0.18% ...

Jeff Bailey : 1/13/2009 1:27:39 PM

XLF action with YM long entry and stop loss (-21 x $5 = $-105.00) Link

Keene Little : 1/13/2009 1:24:30 PM

The downtrend line from last week continues to hold SPX down and if it drops back down for retest of yesterday's low it could then cycle up and down a couple more times while it hammers out a sideways triangle consolidation pattern, all the while being held down by its downtrend line. It would be a good setup for a short play but so far I don't see a setup so I sit and I wait for it (the hardest thing for a trader to do). As shown on the 15-min chart, the parallel down-channel rules: Link

Jane Fox : 1/13/2009 1:24:18 PM

WASHINGTON (MarketWatch) -- There will be no "lasting" recovery without more government action and additional money to strengthen the financial system, Federal Reserve Chairman Ben Bernanke said Tuesday.

The timing and strength of economic recovery "are highly uncertain," Bernanke told an audience in London.

In what's likely to be a sobering message to Congress, Bernanke did not say the end was near. He said that the stimulus package championed by President-elect Barack Obama would likely help the economy but wouldn't be enough on its own.

"In my view ... fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system," Bernanke said.

Jeff Bailey : 1/13/2009 1:20:40 PM

With XLF at $11.05 +0.91% ... now slap a "dynamic" on today's range. Now see the $11.12 yet again?

That one (1) reason at this point to be STOPPED a YM LONG.

Jeff Bailey : 1/13/2009 1:11:25 PM

Also ... See the DIFFERENCE between the DJI (that the Dow Industrials I tye as INDU) and the YM (that's the March'09 futures contract).

The DIFFERENCE is made up from Fair Value calculation each day.

Jeff Bailey : 1/13/2009 1:09:25 PM

INDU, YM and DIA components screen capture Link

For those new to index trading, the Dow Industrials is a PRICE weighted index (not a Market Cap weighted index like most). Here, the HIGHER PRICED stocks carry GREATER weight than LOWER PRICED stocks.

Jeff Bailey : 1/13/2009 1:05:21 PM

IBM -0.15%
XOM +1.81%
CVX +1.42%
PG -0.50%
MCD -1.29%

Jeff Bailey : 1/13/2009 1:03:37 PM

I'd have bet a YM long at 8,425 that that would have worked out differently.

Jeff Bailey : 1/13/2009 1:02:53 PM

OIX 581.05 +1.15% ...
OIH $76.47 +2.00%

Jeff Bailey : 1/13/2009 1:02:26 PM

XLF 11.09

Jeff Bailey : 1/13/2009 1:02:15 PM

YM long stopped alert! 8,404

Jeff Bailey : 1/13/2009 12:54:13 PM

5-minute Stochs at 20.00 ... give it a tad more room

Jeff Bailey : 1/13/2009 12:53:17 PM

YM long stop adjustment alert! ... edge it down to 8,404 for a minute.

Jeff Bailey : 1/13/2009 12:52:25 PM

INDU 8,460

Jeff Bailey : 1/13/2009 12:52:13 PM

XLF 11.09

YM 8,410

Jeff Bailey : 1/13/2009 12:50:47 PM

YM 5-minute interval chart Link

Looking for the modest strength in financials to have YM firm at 8,411. EVENTUALLY NEED the move ABOVE the DAILY Pivot.

Jeff Bailey : 1/13/2009 12:45:20 PM

There it is ...

Jeff Bailey : 1/13/2009 12:44:41 PM

Now if I could get a 5-minute chart of the YM, I'd be thrilled ...

Jeff Bailey : 1/13/2009 12:43:15 PM

As you see some "live" trading in so many securities and ETFs, you HOPEFULLY begin to understand why most professional traders use REGULAR session pivot levels.

A LOT of stuff never trades past 04:00 and very FEW traders even around.

Jeff Bailey : 1/13/2009 12:41:22 PM

I've got my MONTHLY and QUARTERLY too, but right now they're on the INDU (regular session derived of course)

Jeff Bailey : 1/13/2009 12:40:28 PM

YM 60-minute chart ... see the TRENDS so when I "zoom" in, you know where they're coming from. Link

See the 01/07/09 "gap" .. that may be associated in YOUR account with the SDD.

Jeff Bailey : 1/13/2009 12:37:27 PM

JPM $26.14 +4.93% ...

Jeff Bailey : 1/13/2009 12:37:07 PM

XLF $11.13 +1.64% ...

Jeff Bailey : 1/13/2009 12:36:46 PM

YM long stop goes 8,406. Target is 8,530.

Jeff Bailey : 1/13/2009 12:36:02 PM

YM Long alert! ... here at 8,425.

Jeff Bailey : 1/13/2009 12:27:13 PM

12:00 Internals at this Link

Jeff Bailey : 1/13/2009 12:22:44 PM

YM regular session derived DAILY Pivot is 8,454.

Jeff Bailey : 1/13/2009 12:21:31 PM

Have a DAILY pivot retracement from R2 8,632 and S2 8,276. (regular session derived)

Jeff Bailey : 1/13/2009 12:20:58 PM

We may use that here a little later.

Jeff Bailey : 1/13/2009 12:20:34 PM

YM 8,416

XLF $11.11

Jeff Bailey : 1/13/2009 12:05:22 PM

XLF 5-minute interval ... took SOME buying to get XLF above three (3) levels of resistance. WKLY S1, QUARTERLY 38.2% and DAILY Pivot. Link

Keene Little : 1/13/2009 12:00:51 PM

As we head into the lunch hour I'm definitely getting that sideways feeling. There's not much to trade in this kind of correction so don't force anything. Sit tight until we get the setup for a short play. Keep an eye on the short-term uptrend line from yesterday's low as a break of it could indicate that we've started down already (although be careful since a larger sideways consolidation will break that uptrend line but not make a new low yet).

Jeff Bailey : 1/13/2009 11:58:55 AM

This isn't meant to be a "watch Jeff trade his account." I'm HOPING some of the analysis and strategy ideas are useful with YOUR OWN trading.

Jeff Bailey : 1/13/2009 11:57:59 AM

Now, while I suggested closing out the SDD today, there were OTHER trade strategies AVAILABLE.

BUT THEY NEED TO BE WEIGHTED PROPERLY.

What about a LONG in a financial 200-x?

Nothing says a trader couldn't "stay long the SDD, but WEIGHT a UYG properly.

Or another SECTOR that is performing STRONGER than "financials" that is still a "heavy weight" sector of the small caps.

Jeff Bailey : 1/13/2009 11:54:39 AM

For some reason, my QCharts tracks some on CALENDAR days. Others on SESSION days.

Jeff Bailey : 1/13/2009 11:53:58 AM

11:44 Market Watch Link

5-dayNet%, 20-dayNet% may not be correct across ALL tracked.

I know DJI/DIA 5-day and 20-day are not comparing same periods of time.

Jeff Bailey : 1/13/2009 11:45:00 AM

I should add that I did "click through" some of the 52-week low banks. For the most part, they look a little "overextended" to the downside, with some upside room to overhead supply, where we could see a decent BOUNCE at least back to some of their recent PnF "sell signals".

Jeff Bailey : 1/13/2009 11:43:18 AM

RUT.X 475.61 +1.45% ...

Jeff Bailey : 1/13/2009 11:42:56 AM

XLF $11.22 +2.46% ..

Selling LONG the SDD at the bid of $68.54 in personal account(s).

Jeff Bailey : 1/13/2009 11:40:12 AM

XLF and RUT.X 60-minute chart at this Link

See where the RUT.X "gets its support" from? Not just the WKLY S1, but the XLF at overlap support?

RUT.X "bear" or "bear-like" ETF can cut and run with profits, look to get back on board SHOULD XLF "fail" the MONTHLY S1. Or ... give it room to the RUT.X 21-pd SMA, KNOWING in advance where the XLF's is, RELATIVE to the MONTHLY $11.46.

Jeff Bailey : 1/13/2009 11:28:05 AM

OK ... RUT.X traders ... this is what I'm starting to do in my head.

You're probably realizing why I was/am more "bearish" the RUT.X and its weighted financials.

Now, today we see a "track % gain" for the most part. i.e. XLF +0.82% and RUT.X +0.96% (even though there isn't an XLF component in the RUT.X)

I'm now going to actually PLACE A BEAR STOP on the REMAINING SDD $69.24 -1.75% , but place in part by the XLF.

Jeff Bailey : 1/13/2009 11:20:49 AM

11:14 AM Market Watch and XLF (60-minute) at this Link

In my opinion, broader market BULL and ESPECIALLY a "financial bull" does NOT want to see a "pump" and DUMP back below the overlap from here.

Jeff Bailey : 1/13/2009 11:16:59 AM

Dang'it ... I chopped off the U.S. Market Watch portion.

Jeff Bailey : 1/13/2009 11:15:02 AM

XLF $11.14 +1.73% alert! ... 60-minute interval. Test of overlapping support gets bought. Link

Jeff Bailey : 1/13/2009 11:06:27 AM

Add the Quarterly 38.2% too.

Jeff Bailey : 1/13/2009 11:05:11 AM

XLF $11.09 +1.27% ... comes to some intra-day resistance and DAILY Pivot/WKLY S1 overlap.

Keene Little : 1/13/2009 11:04:44 AM

If the market makes another stab higher, two equal legs up for SPX from yesterday's low is at 881. Its downtrend line from last week is near 884. So that's the potential resistance zone for now. If price instead goes sideways from here then we'll know there's a good chance we'll see price just consolidate for most of today (what I thought it would do yesterday).

Jane Fox : 1/13/2009 11:00:59 AM

THe Russell 2000 cash index (RUT) is making new daily highs already.

Jeff Bailey : 1/13/2009 11:00:01 AM

"Bank" 52-week lows Link

Jane Fox : 1/13/2009 10:58:47 AM

Internals are getting more and more bullish. Link

Jane Fox : 1/13/2009 10:57:41 AM

The VIX is telling me the S&P futures are going to take another stab at overnight highs and should break through this time. Link

Jeff Bailey : 1/13/2009 10:56:16 AM

Dorsey/Wright breakdown of 52-week highs and Lows from Monday Link ... Banks NL= 17.

Jeff Bailey : 1/13/2009 10:51:59 AM

SPX 871.33 +0.11%

RUT.X 472.43 +0.77%

INDU 8471 -0.13%

OEX 414.23 +0.18%

Jeff Bailey : 1/13/2009 10:50:55 AM

XLF $10.95 (unch) ...

Jane Fox : 1/13/2009 10:44:49 AM

Data from the NASDAQ and NYSE show, for the period ending Dec 31, short selling has been on the rise. Here are a few of the stocks that have seen an increase in short selling.

GE (GE) up 46%
Pfizer (PFE) up 29%
Halliburton (HAL) up 33%
AT&T (T) up 20%
IBM (IBM) up 17%
Exxon Mobil (XOM) up 14%
GM (GM) rose 18%
Ford (F) was up 13%
Intel (INTC), Microsoft (MSFT), and Cisco (CSCO) also all rose

Short selling increased in most of the big banks. Shares short in Citigroup (C) rose 5% , Wells Fargo (WFC) up 9% and Bank of America (BAC) up 8%

Jeff Bailey : 1/13/2009 10:42:43 AM

SPY exceeded its evening extended session high ($87.54) by $0.34 to $87.88 this morning. Challenged Monday's regular session low this morning.

Jane Fox : 1/13/2009 10:37:49 AM

Keene noted in his 10:28 post that ES tagged its overnight high. Here is how the other markets are handling their ON ranges. Link

Jeff Bailey : 1/13/2009 10:38:46 AM

Citigroup (C) $5.35 -4.64% confirmed it was in talks with Morgan Stanley (MS) $18.31 -2.60% about combining their brokerage operations.

Initial plan would have MS paying about $2 to $3 billion in cash for a 51% stake in the joint venture with Citi's brokerage Smith Barney and Morgan's wealth management business combining.

Jane Fox : 1/13/2009 10:34:21 AM

NEW YORK (MarketWatch) -- Citigroup Inc. (C) said Tuesday that it is in talks with Morgan Stanley (MS) about "a possible combination of [its] retail brokerage business operated under the Smith Barney name and the wealth management business operated by Morgan Stanley." Citi added that no agreement had been reached, and that it had no further comment at this time.

Jeff Bailey : 1/13/2009 10:31:40 AM

Some negative action early in the financials ...

C $5.37 -4.10% ... off lows of $5.06.
BAC $10.81 -5.41% ... near session low $10.70.

Keene Little : 1/13/2009 10:28:44 AM

ES tested its overnight high to the tick and then dropped back. We know where resistance is for now.

Jeff Bailey : 1/13/2009 10:26:49 AM

Oct/Nov. U.S. Import/Export (Table) at this Link ... Pretty much lower across the board. Slight up-tick in Export Royalties, License fees.

Jeff Bailey : 1/13/2009 10:18:07 AM

10:00 Internals found at this Link

Note: It would currently take a closing session measure of <= 16.00% for the NYSE 5-day NH/NL ratio to see a 3-box reversal back lower.

Jane Fox : 1/13/2009 10:00:54 AM

Both Keene and I have commented on Gold but I would like to add one more very important aspect of Gold that makes it a hard market to decipher technically. Gold is very influenced by the US dollar, when Gold goes up it is usually because the dollar is falling and when Gold falls it is because the dollar is rallying. Then to add to that, you all know the US dollar has a huge number of outside influences making it hard to decipher as well. Outside influences like global politics, economics, even weather.

Keene Little : 1/13/2009 10:00:19 AM

The first line of resistance for SPX in this morning's bounce is its broken uptrend line from December 1st, near 879. But watch ES for a test of its overnight high at 873.75, about 2 points higher (about SPX 877).

Keene Little : 1/13/2009 9:51:59 AM

Gold is at an important spot. Its climb off the October low is corrective (overlapping highs and lows) and that tells me it's going to break down and make a new low below October's (681). But will it do it from here? It has pulled back to the bottom of its parallel up-channel and the 38% retracement of the decline from March 2008, near 816. MACD has dropped down to the zero line and RSI continues to hold above its uptrend line from September. It's a setup for a rally, as shown in pink on the daily chart: Link

But if gold breaks down from here it will break a couple of support levels, the most significant in my opinion being the uptrend line from October. That would signify the leg up from October has finished and the next move will be to a new low. If RSI breaks its uptrend line in the process that would be bearish confirmation. At the moment we don't know which way it will go but if you're long, or want to try a long, you at least know you can keep your stop close by.

Jane Fox : 1/13/2009 9:49:29 AM

As you can see the internals are looking bullish but you have to consider the AD volume, although climbing, is still below 0. Likewise for the AD ratio. Link

Jane Fox : 1/13/2009 9:47:29 AM

VIX closed yesterday at 45.80 and opened 46.86. AD line is a bearish -810 so the bears have control so far. However, I do see the VIX making new daily lows matching the S&Ps (ES) new daily highs.

Keene Little : 1/13/2009 9:39:23 AM

If SPX drops lower this morning and is unable to hold the 865 level it could head for the December 29th low at 857. That's also where the bottom of its parallel down-channel from last week is currently located. If it does a sideways/up consolidation this morning and then breaks down it will probably break below 857.

Jane Fox : 1/13/2009 9:28:07 AM

I see we have FOMC member Kohn speaking at 2:00ET today the same time the Federal Budget Balance is released.

Jane Fox : 1/13/2009 9:24:48 AM

Gold used to be an exciting market to watch and fairly predictable but those days are gone and we are now back to reading tea leaves. I still find the MACD helpful on the Gold chart but since it is following price (not making divergences) it tells me I need to rely on the price action only.

So with that in mind, I will look for swing highs and lows and if I see higher highs and higher lows then the trend is up. If I see lower lows and lower highs the trend is down. But once again this is not helping me too much right now either because the swing low it looks like Gold is currently trying to build is a lower low and will need a lower high to confirm it.

In other words Gold is not a market you should be trading right now. Link

Keene Little : 1/13/2009 9:22:39 AM

Volatility is picking up a little. ES had an overnight range of nearly 20 points and is near the middle of the range as we head for the open. It could move nearly 10 points in either direction just to test the high and low. In all-hours trading it has a series of lower highs since last Friday that hasn't been broken yet.

Jane Fox : 1/13/2009 9:17:33 AM

Crude hit a low of 36.10 overnight, not a new yearly low but almost. The MACD is telling me this market will make a higher low and we may still get a very lopsided reverse head and shoulders but as both Jeff and I stated yesterday, the reliable H&S pattern has gone kaput. Link

Jane Fox : 1/13/2009 9:13:44 AM

Overnight three of the four markets we watch here in the monitor broke through their previous day lows, the NDX (NQ) was the only one to not break its PDL. I believe we will have a weak intraday session again today and the markets will not break their overnight ranges easily. The markets used up a lot of their juice overnight and from what I have seen lately when that happens there is not a lot left over for the intraday session. Link

Jane Fox : 1/13/2009 9:03:50 AM

WASHINGTON (MarketWatch) -- The timing and strength of the global economic recovery "are highly uncertain," Federal Reserve Chairman Ben Bernanke said Tuesday. Coordinated government policy responses will be critical to turning the economy around, he said. Bernanke stressed the Fed still have power to fight the financial crisis and economic downturn even though its federal funds target rate canned be reduced "meaningfully further." Bernanke said that he expects inflation to moderate further. He stressed that the Fed would make sure that its "exit strategy" from its unconventional easing would be accomplished in a smooth manner.

Jane Fox : 1/13/2009 9:02:31 AM

WASHINGTON (MarketWatch) - The U.S. trade balance with the rest of the world plunged by 29% to $40.4 billion in November on a record decline in oil prices and much weaker demand for imports, the Commerce Department reported Tuesday.

Imports fell a record 12% to $183.2 billion, the lowest level in two and a half years, as the average price of imported petroleum dropped by $25.30 a barrel to $66.72.

Exports fell 5.8% to $142.8 billion, led by weakening foreign demand for industrial supplies and capital goods.

The figures are not adjusted for price changes, but are adjusted for seasonal variations.

Jeff Bailey : 1/13/2009 2:02:49 AM

See you in the morning!

Jeff Bailey : 1/13/2009 2:02:32 AM

YM up 12 at 8,456.

Jeff Bailey : 1/13/2009 2:01:32 AM

INDU closed 8,473.97. Session high/low was 8,769.07/8,421.24

Jeff Bailey : 1/13/2009 1:59:53 AM

According to CBOT, mini-dow (YM) settled at 8,444 Monday. Link

Regular session high/low was 8,548/8,370

Jeff Bailey : 1/13/2009 1:32:08 AM

Alcoa (AA) daily interval bar chart Link

Most trading software packages allow traders to set UPSIDE and DOWNSIDE al_rts.

I've also circled the reversing LOWER "sell signal" and reversing HIGHER "buy signal" bars (see 01:15:49 AM).

Keene Little : 1/13/2009 1:26:07 AM

Tuesday's pivot table: Link

Today's decline took SPX down to the projection at 864.89 where the decline from last Tuesday achieved two equal legs down (labeled on the 60-min chart in dark red as an a-b-c decline). This sets up the potential for another rally leg back up into the end of the week or next week. I have my doubts about that kind of move for several reasons but we need to stay aware of the possibility (from an EW perspective). SPX 60-min chart: Link

A rally back above 880 would be a heads up that something more bullish might have started and back above 900 would confirm it. In the meantime I expect to see some kind of bounce (maybe) before continuing lower. A break below 857 would strongly suggest we'll get a larger decline into the end of the month (not in a straight line as the pink price depiction shows).

Jeff Bailey : 1/13/2009 1:19:53 AM

As earnings season kicks off, we at least want to MONITOR some stocks AFTER the "horrific" earnings.

If some "horrific" earnings find their STOCK PRICES moving higher, that can likely be a SIGN from the MARKET that the "bad news is largely factored in."

Setting an al_rt on AA at $9.00 and $12.50 with Note: "see 01/13/09 Market Monitor."

Jeff Bailey : 1/13/2009 1:15:49 AM

Alcoa (AA) ... PnF chart Link

On 06/12/08, shares of AA gave a reversing lower PnF sell signal at $38.00. (moved from "buy stack" to "sell stack"). Then gave a string of additional "sell signals."

Now, on 12/31/08, shares of AA give a reversing higher Pnf "buy signal" (move from "sell stack" to "buy stack").

It would currently take a trade at $8.50 for AA to give a reversing lower "sell signal."

I'm issuing caution on AA still. If looking LONG, then STOP goes $8.50, $8.00 MAX. STRENGTH and possible "that was the bottom at $7.00" on trade at $12.50, a "spread triple top" buy signal.

Jeff Bailey : 1/13/2009 12:51:10 AM

JP Morgan (JPM) ... PnF chart Link

On 01/07/09, JPM's PnF chart gave a reversing lower "sell signal" at $28.00. (Move from "buy signal" stack to "sell signal" stack) (see how bullish % is measured).

On 01/05/09, JPM's Relative Strength reversed into a "column of O" and began UNDERPERFORMING the MARKET on a near-term basis.

1-box from RS Sell is an al_rt that JPM is close to UNDERPERFORMING the MARKET on a LONGER-TERM basis too.

Usually, when a company MOVES their EARNINGS DATE UP, it can be a sign that the COMPANY is watching its STOCK PRICE, and WANTS to tell the MARKET something "important."

JPM is currently in their "quiet period" (company's usually don't say much 30-days or less prior to an earnings report in fear of "tipping insider information").

At tomorrow's OPENING bell, JPM is the #19 most heavily weighted Dow Industrials component at 2.34% (84.83% of total). JPM is the #13 most heavily weighted S&P 500 component at 1.23% (26.12% of total).

Jeff Bailey : 1/13/2009 12:20:19 AM

Dorsey/Wright's Bullish % All (BPALL) remains in a column of X to 52.00%. Currently 48.57% Link

Jeff Bailey : 1/13/2009 12:05:46 AM

SPX's NH/NL tally today was 0:3. This data set of just "3" really tough to get too much of a read on things other than NEW LOWS outnumbering NEW HIGHS and some WEAKNESS at the "tail."

We haven't seen MORE than 1 new high among the SPX components since 10/03/08 and 2:116.

We haven't seen MORE than 3 new lows amongh the SPX components since 12/29/08 at 0:5. Then 12/12/08 at 0:9.

Jeff Bailey : 1/13/2009 12:01:42 AM

For the NYSE Composite NH/NL Ratio, I do the same as the NASDAQ Comp.

I'm still pretty sure that we're getting some "new" 200-x and 300-x ETF's trading New Lows that have not been around for 52-weeks. Some "regular" ETF's as well.

One data provider that doesn't report ETF had NYSE reporting 4 new highs and 19 new lows.

Daily ratio of 4:19 would be ... (add up BOTH the NH and NL to get 23. Then take the NH=4 and divide by the TOTAL=23 to get a DAILY BULL RATIO of 17.39%.

That's really not that much different than from today's Closing Internals where I can get the NYSE NH/NL live during the day, instead of at the CLOSE of each day. Still, that count was 10:61 for a DAILY RATIO of 14.08%.

Jeff Bailey : 1/12/2009 11:39:12 PM

NASDAQ Comp. NH/NL Ratio(s) Table that I track each day (the number of NH and NL, I then calculate) a DAILY Ratio (Column AF), and then I begin averaging that DAILY Ratio over 5-days (Column AG) and 10-days (Column AH).

See the 11/05/08 8.9%? That was an "inflection high," which we would have charted UP to 8.00% box. A 3-box reversal LOWER would have been to 2.00%, where on 11/13/08 the 5-day ratio was 1.80%. Eventually, on 11/21/08 the 5-day ratio fell to 0.5%. It could have gone to 0.00%. It wasn't until 12/19/08 that we saw a 3-box reversal back UP to 8.00% and from there we've seen the 5-day rise UP to 36.4% (36.00 on the chart) and now the 3-box reversal back LOWER to 30.00%.

The 10-day NH/NL ratio "much slower" but continues to carry some BULLISHNESS.

Can the 10-day NH/NL ratio see a 3-box reversal LOWER?

Watch the 5-day NH/NL ratio and find out!

Jeff Bailey : 1/12/2009 11:18:11 PM

NASDAQ Comp. NH/NL Ratio Chart 2% box chart Link

"f" is the "f"ive day NH/NL ratio displayed in the intraday internals. At the conclusion of today's trade, this SHORTER-TERM indicator of BULLISH leadership reverses back lower with a 3-box reversal.

The 10-day NH/NL ratio, more INTERMEDIATE-TERM remains in a column of X (demand).

The Point and Figure methodology of tracking supply (O) and demand (X) measures TIME differently than a bar chart. The months of Jan-September are 1-9. Since we can only place once character/number in a "box" we use the letters A-C for October-December.

PnF-ers will place the 1-9, or A-C in the FIRST box they can for the BEGINNING of the month.

Example: In "early" January ="1" the 10-day NH/NL ratio was 12%.

Jeff Bailey : 1/12/2009 10:49:12 PM

RUT.X's NH/NL tally for today was 2:18.

OI Technical Staff : 1/12/2009 9:59:59 PM

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