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More downside ahead

HAVING TROUBLE PRINTING?
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After last night's earning's warning from Electronic Data Systems (NYSE:EDS) $36.46, which sent shockwaves through the tech sector, the ripple effect which was seen in International Business Machines (NYSE:IBM) $69.55 and slipping -5% in overnight trading to $66.07 and this morning's earning news from broker Morgan Stanley (NYSE:MWD) $38.10 with an earnings report that missed the Street's estimates by 12-cents a share, bulls are thinking things couldn't get any worse. Right?

Maybe not. This morning's economic data showed weekly jobless claims fell 9,000 to 424,000, which is a four month high, while continuing claims rose to 3.56 million. Economists were looking for jobless claims to come in at 411,000 and the recent weekly numbers above the 400,000 level has spooked the markets as the thought becomes the economy just isn't growing at a rate to provide new jobs.

All this data has once again put a strong bid under Treasuries and has YIELDS in the 5, 10 and 30-year YIELDS all at new lows.

Stock futures are lower with S&P futures (sp02z) currently trading down 10.4 points at 853.40, NASDAQ futures (nd02z) are off 10 points at 875 and Dow futures (dj02z) are down 110 points at 7,985.

Fair value for the S&P 500 today is $1.35. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.20 and set for program selling at $-1.10. Fair value for the NASDAQ-100 today is $4.80.

Traders that would like to watch these program trading premium execution levels can do so with some of these symbols. Good data feeds PREM symbols are (sp-prem, @prem, $prem) and on poor data feeds (prem.x, $sps, $spinx).

Jeff Bailey
Senior Market Technician
Option Investor


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