My wife, four year old child and I were swimming in our pool in Topanga Canyon, Los Angeles, yesterday (Saturday July 26 2008) around 4:30-4:45pm when we noticed a large very shiny silver object hovering in one position in the sky to the east of us (from Topanga), possibly over Santa Monica.
It was really strange. We are very familiar with helicopters flying directly overhead in Topanga and planes from LAX, but this was neither. It definitely wasn't a conventional plane or helicopter or blimp (we've seen the Goodyear blimp plenty of times in various places).
I thought it might be a hot air balloon at first, but it appeared to be more of an X shape that rotated, as if a plane with four wings forming a cross were slowly rotating in one position in the sky. It was also larger than I first thought, because we looked at it through binoculars (8x25W; not very powerful), and whereas when we look at planes through those you can see detail, with this it was too far away.
It stayed in roughly the same spot for about 30 minutes, rotating in one place, and we took some video, but it was too far away to be really clear. It was so silver and shiny that I thought it might have lights, but the sun was also really bright, so it may just have been reflecting that. It definitely maneuvered in an unusual way and was able to stay in the same spot. And then, after about 30 minutes of this, it moved off traveling at about the speed of a plane (which again suggests it couldn't have been a hot air balloon) to the south/south-east.
The only possible explanation I could come up with was that it was some kind of promotional stunt, possibly for the X-Files movie, which opened this weekend. It might have been flying over Santa Monica Beach, but even then it seemed too large and too unusual (and too expensive) for a promotional stunt - and if it was a promotion, it didn't achieve any publicity to my knowledge. Also it would have had to be some kind of rotating X towed by a plane, and we could see no evidence of any other craft nearby towing it. Plus the fact that it stayed in one place for so long is almost impossible to achieve with anything other than a helicopter or hot air balloon, I believe, and neither can rotate the way this was rotating.
We called our local NBC TV news department and emailed them our video, but we haven't heard back from them and I can find no other reports of the sighting, which is strange when it was so large and was in broad daylight on a very sunny Saturday afternoon.