4:04pm
GOOG disappointed. Down 10% after hours.
3:50pm
I would be nervous holding MER into earnings, up 9% today.
3:23pm
ES is coasting along sideways to up, finding support at its 50 moving average. This rally has been surprisingly orderly, without the volatility I expected during options expiration. None the less, I have learned over and over again that this is not the time to take risk. I think traders that are patient and wait for a pullback or further confirmation that this rally has legs will be rewarded. I thought about playing GOOG long into earnings but I’m passing. An options play might work where the downside risk is fixed.
2:56pm
Earnings to be aware of: After the close, we see AMD, GOOG, IBM, MER and MSFT. Tomorrow before the open C, HON, MAN and SLB report.
2:28pm
Oil selling off into the close of pit trading, under 130. This is supporting the ES and XLF, though volume remains light.
1:32pm
I want to be cautious here. The volume on this rally is just OK. This is options ex week. We have risen a lot very quickly. And there is still a lot of time left in the trading day. Possible double top patterns setting up on the ES, XLF. Be ready to take profit if a pullback materializes.
1:26pm
Oil has broken the 132 level on a 10-minute chart. Let’s see if it holds on a 60-minute.
1:15pm
Oil threatening to break below the 132 support line and the volume is strong. If the 10-minute candle closes above 132, the level is saved.
12:55pm
Oil falling towards the 132 support level (or 107 on the USO).
11:40am
Oil prices are very volatile, now in negative territory to 133.75, after getting as high as 136.75.
11:17am
XLF trying to find support at its 20 moving average at 19.62.
11:13am
The ES bounced exactly off the declining trendline, which is now support.
10:30am
Bearish topping candle on XLF 60-minute.
10:08am
Oil continues to move higher and the market is selling off. The XLF bounced off the resistance level we identified in yesterday’s video.
10:03am
Now what the ES is above its declining trendline, it will now serve as support. Look for the market to test that support level today. The line currently sits around 1241.
9:47am
Crude oil trading higher by $1 near 136. XLF at resistance of declining trendline.
9:22am
I want to make sure the SPY breaks out of its channel on a 60-minute chart. If we break out, I may add to my SSO (L), but if we give reclaim the declining channel, I don’t want to play here. The XLF was up 12% yesterday and is up another 4% this morning. Keep in mind that tomorrow is options ex and the market is likely to be volatile.
9:03am
Jobless claims came in somewhat better than expected. JPM and BLK both beat earnings estimates. Oil is about flat this morning. The ES has rallied up to 1250, above the declining trendline.
12:30am
Just wanted to throw up a chart of the SPY 60-minute. I noticed a beautiful declining channel that the SPY is bouncing in. A break above the declining resistance line will yield more buyers. But remember, a break of a declining trendline only means that the rate of decline has decreased, and not that the decline is necessarily over. (click the image to enlarge)
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July 17th, 2008 at 9:27 am
All the bad news can come the same day; None the less, all the good news can come in the same day too. Just can not imagine.
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July 17th, 2008 at 9:29 am
3 out of the last 4 days we have had record SP500 trading volumes, including the overwhelming peak day on the 15th. These volumes have been led by financials, as you have been calling for, although overall it was a broad rally across all sectors except basic materials/oil. Perhaps since they led the decline it’s what was ncessary to put the floor in, if we’ve indeed done that. There is still a lot of wait and see with financials, but we should recover most of the July losses in a tradable short term bounce. On the SP500 -Let’s see if we can move to the declining 20 dma.
*** - an observation from yesterday - I have some balanced mutual funds, they didn’t particpate to the extent that they normally do to the upside, given the size of yesterday’s moves. They notably underperformed. It tells me that investors were still Net Redeeming as the bounce occured. As we discussed net redemptions from equity funds are normally correlated with near short term bottoms.
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July 17th, 2008 at 9:35 am
here is the 19 stocks on the anti -naked short sale list
http://www.sec.gov/news/press/2008/2008-143.htm
BNP Paribas Securities Corp. BNPQF or BNPQY
Bank of America Corporation BAC
Barclays PLC BCS
Citigroup Inc. C
Credit Suisse Group CS
Daiwa Securities Group Inc. DSECY
Deutsche Bank Group AG DB
Allianz SE AZ
Goldman, Sachs Group Inc GS
Royal Bank ADS RBS
HSBC Holdings PLC ADS HBC and HSI
J. P. Morgan Chase & Co. JPM
Lehman Brothers Holdings Inc. LEH
Merrill Lynch & Co., Inc. MER
Mizuho Financial Group, Inc. MFG
Morgan Stanley MS
UBS AG UBS
Freddie Mac FRE
Fannie Mae FNM
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July 17th, 2008 at 9:52 am
Here’s an article showing the record number of shorts on the NYSE, halfway down the page.
http://www.marketwatch.com/news/story/can-wall-street-survive-summer/story.aspx?guid=E55F5FF7-FD71-4699-863E-B3034F6CD41D&dist=SecMostRead
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July 17th, 2008 at 10:57 am
Craig,
This looks a lot like consolidation on financials, I believe they will rally even higher as we hit the 20 SMA (I’m looking at the 15 minute candle, but i’m sure it’s the same on the 10 minute)
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July 17th, 2008 at 11:13 am
Has the SPX tested the declining trendline…
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July 17th, 2008 at 11:16 am
FNM, FRE and LEH have sold off a lot from today’s highs…but good to see GS holding a good 3% gain
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July 17th, 2008 at 11:22 am
It didn’t quite hit it, but it was very close 2 minutes ago
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July 17th, 2008 at 11:52 am
Craig,
What are your positions currently? Did you add anything today?
It looks like a lot of things are consolidating. Take a look at the QQQQ’s forming that inverse head and shoulders (WV) pattern, are you liking the QLD right here?
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July 17th, 2008 at 12:14 pm
Craig,
Tomorrow is option-X. Do you know the put to call ratio. Is there a possibility of more put to call seeing how bearish the market has been. Just trying to gauge which way the market MAY be heading tomorrow. I know it will be very unpredictable but trying to see the odds.
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July 17th, 2008 at 12:19 pm
I think we will consolidate till 1:30-2 and then push higher, at least that is what i tlooks like right now
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July 17th, 2008 at 12:19 pm
Idan, I covered my longs this morning and now I am on the sidelines. I don’t like playing the market during options ex, and I am skeptical of this rally. The volume in QQQQ is light and we have not broken out on a 60-minute chart. I would like to wait until next week to see how things setup.
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July 17th, 2008 at 12:30 pm
Del, here is a link to put/call data. I have never been good at predicting options ex movement based on this data. Maybe you can make some sense of it.
http://www.market-harmonics.com/free-charts/sentiment/putcall.htm
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July 17th, 2008 at 12:41 pm
If you use some of your logic you can sorta make sense of what people are doing.
The put to call ratio is at it’s peak right now. And volatility, is really high. When volatility is high, people try to sell the options in order to benefit from the high premium due to volatility. So this month, if you look at the XLF, there is a lot of put selling. So people are betting that stocks will not fall much further. The thing is, if stocks do fall much further all these sellers will be forced to buy the underlying assets, so therefore these sellers will try to move the price of the stocks out of the strike price, (out of the money) so that the puts expire worthless, and the sellers make the premium. (and you definetly saw that happening in the last 2 days).
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July 17th, 2008 at 12:46 pm
btw where is the 20 SMA on the 10 minute candle for the XLF and QQQQ?
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July 17th, 2008 at 12:52 pm
Idan, don’t you have a charting program? The 20-SMA on the XLF is 20.04 and 45.26 on the QQQQ.
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July 17th, 2008 at 12:54 pm
my charting program only has 1,3,5,15,30,50 minute it lacks the crucial 10 hahaha
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July 17th, 2008 at 12:54 pm
my charting program only has 1,3,5,15,30,60 minute it lacks the crucial 10 hahaha
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July 17th, 2008 at 1:41 pm
Hey… I also would like to point out, that on a weekly chart, since we just broke the S&P 1257 resistnace bear sterns low, we are no longer in break down mode, since the move higher this week negated and did not confirm the break of last week. So keep in mind this, as we could see a continuation of rallies next week.
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July 17th, 2008 at 1:47 pm
Craig, are you having any troubles with the prophet intraday charts today? Their server was down earlier today and now all charts are skewed for me.
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July 17th, 2008 at 2:00 pm
Eugene, Prophet seems to be working ok for me. It was not updating properly earlier but its ok for me now. Try restarting TOS maybe.
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July 17th, 2008 at 2:19 pm
Craig, if we end the day at the highs of the day, do you think we’ll gap lower as a “bearish sign”? despite the fact that the bulls will fight their hardest to keep this market above 1257 by the end of the week?
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July 17th, 2008 at 2:21 pm
Idan,
From your explanation on put call ratio. Am I right to assume that there are more put than call, therefore to make the put worthless, the sellers may push the market higher. I know it’s not a sure thing but I have been studying option ex for a pattern. This month may give me clue. I know that it’s impossible to nail it but option ex days intrigue me.
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July 17th, 2008 at 2:33 pm
what is the ETF for the short of oil? or double short?
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July 17th, 2008 at 2:47 pm
Info on oil ETFs: http://seekingalpha.com/article/84257-the-new-face-of-oil-etfs
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July 17th, 2008 at 2:50 pm
Craig, thanks for the headsup of double top at 1:32. I kept my eye on the chart and took my profits. I’ve been a faithful reader, watcher since I discovered you a couple of weeks ago.
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