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Jim Brown : 3/14/2009 12:54:52 AM

test post 4 Link

Jim Brown : 3/14/2009 12:17:33 AM

test post 3 Link

Jim Brown : 3/14/2009 12:10:46 AM

test post 2 Link

Jim Brown : 3/14/2009 12:10:07 AM

Test post Link

Linda Piazza : 3/12/2009 3:38:33 PM

As I'll cover in tonight's Wrap, volume has been lacking during this week's rally. If it weren't for the cheap banks, especially Citigroup, the volume would be anemic. That's not encouraging for the bulls.

Jane Fox : 3/12/2009 3:14:05 PM

DOW is up +200 points

Jane Fox : 3/12/2009 3:04:32 PM

Crude is up $4.60 so far today. The Crude bulls are talking as well Link

Jane Fox : 3/12/2009 3:03:09 PM

Internals are telling clear sailing for the bulls - nary a bear in sight. Link

Linda Piazza : 3/12/2009 2:29:53 PM

In addition to the top of the parallel down-channel being near 748, two equal legs up from this morning's low is at 748.62. This has been a very strange rally leg and so far has been contained within a small parallel up-channel since the pullback near 11:30 AM. It's possible we're going to see this up-channel hold into the close as SPX works its way up to the 748-749 level. That would be a setup for an immediate reversal tomorrow (to keep traders bouncing off the walls).

Linda Piazza : 3/12/2009 2:21:04 PM

The top of the parallel down-channel for SPX from January is just under 748. Gap close from February 26th's closing price is at 752.92.

Linda Piazza : 3/12/2009 2:16:34 PM

The trouble with trying to short this at 741 is that it's too obvious and everyone and their brother is going to be trying the same thing. A couple of buy programs is all that's needed to keep kicking the shorts out. So be careful.

Linda Piazza : 3/12/2009 1:59:52 PM

SPX 741 coming up next. This will be the first test of resistance and the level to take some profits off the table if long and start nibbling on a short.

Jane Fox : 3/12/2009 12:58:50 PM

VIX is supporting each and every move upwards. This tells me the pressure is upwards and not down. Link

James Brown : 3/12/2009 12:50:25 PM

Madoff Guilty Plea Sends Stocks Higher
(Intraday Update)

There were two big stories on Wall Street today. Investors seemed to react positively to both the ongoing saga with con-man Bernie Madoff and the discussion over mark-to-market accounting rules. Thursday began with a mixed session in Asia. The Japanese NIKKEI lost 2.4% following yesterday's oversold bounce from 26-year lows. The Hong Kong Hang Seng gained 0.6% versus a 0.2% drop in the Chinese Shanghai Composite. Europe showed more strength with the oversold bounce notching its fourth day of gains. The French CAC 40 was up 0.5%. The British FTSE was up 0.5%. The German DAX was up 0.9%.

Meanwhile the U.S. markets reversed early gains and seemed to rejoice at news that Madoff was going to jail. The 70-year old Bernie Madoff confessed to the largest Ponzi scheme every uncovered. Late last week it became widely known that Madoff was planning to offer a plea of guilty and many expected that the man had made some sort of deal with investigators. This morning Madoff pleaded guilty to 11 criminal charges and the judge immediately revoked his bail. Madoff had been living in his luxury apartment on house arrest but will now spend the next couple of months in jail to await sentencing on June 16th. His crimes carry a potential maximum of 150 years in prison.

Leading the market rebound today was financials. The BKX banking index is up 4% and the BIX banking index is up 2.7%. Investors could be bidding up financial stocks on hope that lawmakers will find some sort of reprieve from the mark-to-market accounting rules. Members of congress and regulators from the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are all meeting today to discuss what can or should be done about mark-to-market accounting rules. Some claim that by lifting these rules it would immediately "save" the banks from their toxic-debt problems. Many disagree. Recently Federal Reserve Chairman Ben Bernanke said he was against revoking the mark-to-market rules but the Federal Reserve might be flexible on adjusting the rules.

In other news today the Commerce Department released their February retail sales report and the data showed a -0.1% drop, which was a lot better than the expected -0.4% drop. What's even more surprising is that the data for January's retail sales was revised upward from +1% to a +1.8% gain. One of the biggest challenges this market faces is the concern that consumers are slowing down since more than 2/3rds of our economy is the consumer. The report was encouraging news but it may just be an oversold bounce in the retail sales trend. That didn't stop the retail stocks from enjoying some gains. The RLX retail index is up 1.7%.

Overall the markets are seeing widespread gains. Even gold, oil and the U.S. dollar are trading in the green. Normally a rising dollar puts downward pressure on commodities like gold and oil. Aside from the financials some of the best performers are healthcare (+6.7%), homebuilders (+2.8%), gold miners (+2.4%), drugs (+3.6%) and biotech (+4.5%).

A quick look at the major indices:

Chart of the S&P 500:
Link

Chart of the NASDAQ Composite:
Link

Chart of the DJIA:
Link

Linda Piazza : 3/12/2009 12:46:35 PM

The choppy nature of the push higher since about 11:30 AM, along with the negative divergences on the intraday charts, gives me the impression that the rally is just about finished. A break of the uptrend line from the 11:30 AM low (confirmed with a break below SPX 732 now) would by your first clue that the high is probably in.

Jane Fox : 3/12/2009 12:25:48 PM

Oh my goodness gracious the AD line started the day at -1200 and now a bullish +1524. That has not happened in a very very long time.

Linda Piazza : 3/12/2009 12:02:42 PM

Obviously it's going to have to hurry to meet that time window around 12:10 PM. Otherwise I see the possibility for it to push slightly higher to about 749 by later this afternoon. A break back below 728 would be a bearish heads up that something else is happening (or will be part of a larger pullback before completing the final leg up later this afternoon).

Linda Piazza : 3/12/2009 11:59:38 AM

from Keene: If SPX can push higher from here it could complete a rising wedge for the 5th wave from yesterday afternoon's low. Drawing a trend line from the high just before yesterday's close across this morning's high it intersects the price projection at 742.33 (where the 5th wave would equal the 1st wave in the move up from last Friday) just past 12:00 PM. It would be a good setup for a reversal and it's what I'll be watching for.

Linda Piazza : 3/12/2009 11:11:53 AM

from Keene: updating last night's SPX 60-min chart shows the possibility (shown in pink) for a leg back down from this morning's rally as part of a larger correction since yesterday's high before proceeding higher again into next week. If SPX drops back below 727 we could see a run back down to 705 before it will be ready to rally again. Updated 60-min chart: Link

Linda Piazza : 3/12/2009 11:00:08 AM

from Keene: Jane, I live on Capitol Hill in Seattle, the home of the "alternative" life style folks in Seattle. Oftentimes it's a challeng trying to figure out the gender of some of the individuals walking around. So now I get to play cross dresser on the MM this morning. :-)

Linda Piazza : 3/12/2009 10:57:20 AM

from Keene: In the move up from Friday the 5th wave would equal the 1st wave at SPX 742.33. The top of the parallel down-channel (bold blue line on the 60-min chart) is near 748 and of course we have th November low at 741 so we've got a good resistance zone in that area.

If it's the 5th wave for the move up from last Friday it should show bearish divergence against yesterday's high so watch for that as confirmation we'll probably see the rally top out. From there we will start a larger pullback to correct the rally leg. This 5th wave up should take a couple more hours as it chugs higher, corrects and pushes a little higher again. But the EW form has now been satisfied with the new high above yesterday's so the risk is the rally could fail at any time.

Jane Fox : 3/12/2009 10:53:08 AM

Geesh Keene you are having an identity crisis.

Jane Fox : 3/12/2009 10:51:34 AM

Here are the internals - they are bullish. Link

Jane Fox : 3/12/2009 10:49:29 AM

AD Line is now +925. This is sooo impressive. May be time for longs soon.

Linda Piazza : 3/12/2009 10:46:58 AM

This is Keene, not Linda. I switched disguises and will post as Linda until the technical issues get resolved. I'm starting to get a complex since the MM is not letting me in but Jane and Linda can log in with no problem, sniff...

Jane Fox : 3/12/2009 10:39:15 AM

Previous day highs are now being challenged. Link

Jane Fox : 3/12/2009 10:33:20 AM

AD line is an impresive +514.

Jane Fox : 3/12/2009 10:29:51 AM

Goldbugs are also staging a bull rally but the March 6th swing high has to be breached before they can say they are winning. Link

Jane Fox : 3/12/2009 10:27:32 AM

This is certainly one of those days when the AD line follows the VIX and, as I stated previously, very different from bearish days when the VIX follows he AD line.

Markets are making another new daily high.

Jane Fox : 3/12/2009 10:26:34 AM

Jane will be posting a lot today LOL.

Jane Fox : 3/12/2009 10:27:07 AM

This is Keene. I've disguised myself as Jane this morning in order to get past the guards. For some reason I haven't been able to log in with my password and the browser version of MM is down this morning. Hopefully it will all be resolved quickly.

I couldn't get into the MM last night either for the nightly update but wanted to show two possible scenarios for today on the SPX 60-min chart. We will either get another leg up to complete a clean 5-wave move up from last Friday (dark red) or else pull back today and head higher into next week. If we do get a new high from here I expect to see SPX get up to resistance near 741 before turning back down (and then heading higher again into next week). SPX 60-min chart from last night: Link

Jane Fox : 3/12/2009 10:24:00 AM

Former investment manager Bernard Madoff has pleaded guilty to all 11 criminal charges for allegedly scamming thousands of investors in a Ponzi scheme that spanned at least two decades.

Jane Fox : 3/12/2009 10:23:36 AM

The bulls have made an impressive move, straight up from the daily low made at 9:47EDT but I still would not try any long positions. Your chances of a successful trade are much higher when the internals are in sync.

Jane Fox : 3/12/2009 10:16:33 AM

Market is now making a new daily high. Pretty impressive I must admit but remember the AD line is only -200 so don't expect a lot of follow through. I imagine we will be seeing chop for a while.

Jane Fox : 3/12/2009 10:05:46 AM

Bulls seem to be pulling the rabbit out of the hat and staging a comeback. If they can turn this around you are seeing something that has not happened for a long time and another piece of information that an intermediate bottom is in.

VIX is now making new daily lows. Let's see if the AD line follows the VIX or the other way around.

Jane Fox : 3/12/2009 10:00:18 AM

VIX is agreeing with the AD line. Link

Jane Fox : 3/12/2009 9:59:25 AM

If the VIX agrees with the AD line then it is Ok to go short, if it does not agree then you stand aside. That is how I would use the internals for day-trading.

Jane Fox : 3/12/2009 9:57:27 AM

AD line is now telling you the bears have ball, 1276. It doesn't matter what any of the other internals are doing, this tells you long positions should not be taken.

Jane Fox : 3/12/2009 9:34:32 AM

AD line opens at -289.

Jane Fox : 3/12/2009 9:29:14 AM

If Gold closes below the blue neckline the head and shoulders confirms and Gold becomes bearish however, if the March 6th swing high is breached then the bulls win and the H&S is negated. Link

Jane Fox : 3/12/2009 9:24:59 AM

I just got an email from Keene. He is having computer issues this morning and will be with us as soon as they are resolved. We can ALL relate to that.

Jane Fox : 3/12/2009 9:23:39 AM

WASHINGTON (MarketWatch) -- The Republican Study Committee, a group of conservative GOP lawmakers, believe that instead of pumping billions to bail out banks, lawmakers could save the economy by simply eliminating controversial mark-to-market accounting rules, which require daily revaluing of assets.

The panel's effort failed last year as Congress approved $700 billion for banks in October. However, seven months later, their efforts seem to be advancing on Capitol Hill.

Indeed, even fierce opponents to changing the methodology are now beginning to think about some mark-to-market alternatives. As the markets continue to slide, pressure is building in Washington to find a bipartisan consensus on the issue.

Jane Fox : 3/12/2009 9:21:45 AM

Crude is up $1.21 and looks to be making a higher high. I will now take off the trendline at $45.50 because it didn't turn into support and has lost a lot of its importance. Link

Jane Fox : 3/12/2009 9:14:44 AM

The overnight session was quite uneventful. Both ES (S&P futures) and YM (DOW futures) are tagging their respective ON highs whereas NQ (NDX futures) is not quite. It is hard to determine what TF (Russell 2000 futures) is doing because it is on a 20 minute delay. Link

Jane Fox : 3/12/2009 9:05:15 AM

WASHINGTON (MarketWatch) -- Signaling persistent weakness in the nation's labor market, the number of workers filing initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 654,000 last week, the Labor Department reported Thursday.

The smoothed average of new claims over the past four weeks also rose, up 6,750 to stand at 650,000 -- the highest level since October 1982. This average is considered a better gauge of labor-market conditions because it smoothes out one-time distortions caused by holidays, bad weather, strikes and other factors.

Jane Fox : 3/12/2009 9:04:31 AM

WASHINGTON (MarketWatch) -- U.S. retail sales began the year much stronger than expected after a disastrous holiday shopping season, according to Commerce Department figures released Thursday.

Retail sales dropped 0.1% on a seasonally adjusted basis in February, better than the 0.4% decline expected by economists surveyed by MarketWatch. January's sales gain was revised much higher, to a 1.8% gain from the 1% increase estimated a month ago.

Sales are down 8.6% in the past year and had declined for a record six straight months before January's surprising gain. Sales had plunged 3.1% in December.

Auto sales sank 4.3% in February, after automakers reported their worst sales month in a generation. Excluding autos, retail sales rose 0.7% in February after an upwardly revised 1.6% gain in January. Economists expected sales excluding autos to rise 0.2%

OI Technical Staff : 3/11/2009 9:59:59 PM

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