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OI Technical Staff : 12/15/2005 9:59:59 PM

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Jeff Bailey : 12/15/2005 8:52:29 PM

Today's top headline ... Strong Turnout in Iraq elections ... Boston Globe Link

Jeff Bailey : 12/15/2005 8:29:57 PM

04:12 PM EST Temperature with January Nat. Gas and Heating Oil settlements at this Link

Tomorrow's forecast provided by "Guitar George" at this Link

Jeff Bailey : 12/15/2005 6:54:42 PM

Adobe Systems (ADBE) $34.93 +1.18% ... higher in extended at $36.25 on headline numbers.

Jeff Bailey : 12/15/2005 6:01:58 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... Played "the option expiration game" with the Johnson & Johnson JNJ Dec. $60 Calls (JNJ-LL) at the offer of $0.25. Looking for a double at minimum. If things get carried away like they did with BAC (09/15-09/16) then maybe $1.35.

JNJ closes with a "doji" just as BAC did on 09/15.

Jeff Bailey : 12/15/2005 5:19:56 PM

Closing Internals found at this Link

Jeff Bailey : 12/15/2005 4:51:26 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/15/2005 4:22:14 PM

Oracle (ORCL) $12.83 +0.15% ... lower at $12.38 in extended session on headline numbers.

Jeff Bailey : 12/15/2005 4:08:02 PM

Sell Program Premium ... DIA $108.84, SPY $127.48.

Jeff Bailey : 12/15/2005 4:07:22 PM

JNJ goes out at $60.16 +0.08% ... Daily Pivot Levels for tomorrow are ... $59.82, $59.99, Piv= $60.17, $60.34, $60.52.

A decent block of 370,800 billed out at the close of $60.16.

Linda Piazza : 12/15/2005 3:50:31 PM

End-of-day decisions: For the last two days, the OEX has attempted a breakout above the descending trendline off the 11/23 high, and has fallen back both days. Both days, however, it has remained above the 577-578.40-ish S/R zone and the converging 10-sma and 21-sma's at 577.56 and 577.30. Depending on what happens in the last few minutes of trading, and a lot can happen, the OEX may produce a doji at the top of the climb. The OEX often follows such signals with either another doji (which will mean both a climb and a decline, in some order) or else with an actual decline, but the TRAN's attempted breakout is somewhat clouding that picture.

Jonathan Levinson : 12/15/2005 3:48:54 PM

Back. QQQQ breaks back above 41.90 here, coming back for a pivot test at the 41.95 line. Above this level, 42.00 is channel and confluence resistance, but if bulls can clear it, there will be clearer air above. The wavelet upphase has been strong enough to stop the short cycle downphase- it's now time for the short cycle to carry the ball. Link

Linda Piazza : 12/15/2005 3:46:41 PM

At about 4147-4148, depending on how steady my hand is on the cursor, the TRAN will hit the descending trendline off its November high. The TRAN is at 4139.69.

Jeff Bailey : 12/15/2005 3:44:04 PM

OEX 580.87 -0.06% .... inches back above DAILY Pivot.

Linda Piazza : 12/15/2005 3:43:52 PM

The TRAN has just broken above the descending trendline off the day's high. The day's high was 4142.65, so watch that for next resistance.

Jeff Bailey : 12/15/2005 3:43:34 PM

JNJ $60.14 +0.03% ...

Jeff Bailey : 12/15/2005 3:43:18 PM

I hope Linda tells us they are "buy" don't you?

Linda Piazza : 12/15/2005 3:43:05 PM

Caution, bears. TRAN zooming.

Linda Piazza : 12/15/2005 3:42:53 PM

GE did meet the downside target for that H&S I'd mentioned on its one-minute chart, mentioned in my 2:29:06 post, even though GE was at the time bouncing right back above the neckline. What do you know? As Mark said earlier, its surprising to see a formation work, expecially a bearish one.

Linda Piazza : 12/15/2005 3:39:47 PM

Market-on-close orders coming up. I don't have a source for that, as it's supposedly expensive, but I do know to watch for market moves near this time.

Linda Piazza : 12/15/2005 3:38:58 PM

OEX Keltner picture: The OEX tests resistance at 580.57, a little above it as I type. Next resistance at 581.31. Support at 579.84-580.29. Historical support near 579.75. OEX at 580.68, within a possible right shoulder for a roughly formed H&S on its 15-minute chart.

Jeff Bailey : 12/15/2005 3:38:34 PM

JNJ/OEX 5-minute interval charts with QCharts' DAILY/WEEKLY Pivot levels turned on at this Link ... I set my cursor tracker at the 03:20 EST, 02:20 CST interval.

Jonathan Levinson : 12/15/2005 3:33:18 PM

Logging out for a reboot- Quotetracker's frozen up on me.

Linda Piazza : 12/15/2005 3:30:51 PM

And, in another demonstration of nothing means anything, the OEX has immediately broken back above the Keltner resistance at 580.27, the line that had supported it so long and that it finally broke through, and, if it ends this 15-minute period anywhere near its current 580.53 level, it will have created a morning-star reversal signal on its 15-minute chart. It will, however, have stopped at the next level of resistance. So what does it mean? I see some weakening, perhaps, but mostly just opex chop that's difficult to gauge and even more difficult to trade. There's a rough sort of H&S on the top of the OEX's climb this week, at the resistance of its descending regression channel off the 11/23 high, and that should not be a bullish sign, but who knows in this climate?

Jonathan Levinson : 12/15/2005 3:24:24 PM

QQQQ has held 41.80 so far, but the bounce is heavy, the wavelet upphase now half done. Bulls need a break of 41.90, bears 41.80: Link

Jeff Bailey : 12/15/2005 3:24:22 PM

JNJ/OEX Montage/OEX top components at this Link ... 01:20 PM CST.

Linda Piazza : 12/15/2005 3:23:28 PM

Watch out, the TRAN still hasn't given up. It's still coiling.

Linda Piazza : 12/15/2005 3:22:34 PM

The SOX's previous low of the day was at 496.50, but the SOX is currently bouncing from a test of the 50% retracement of the range from the 12/06 high into the 12/08 low, and from the 30-minute 100-ema, at 497.35 and 498.03, respectively. It's going to take a strong whoosh to knock the SOX (no pun intended) back below that low of the day. It could come, but that's what it's going to take.

Linda Piazza : 12/15/2005 3:16:38 PM

OEX 15-minute Keltner picture: The OEX is below resistance that's gathering from 580.26-580.48, but above support at 579.84 and historical support from today at 579.75. The OEX is at 579.89. It looks possible, but not yet almost-sure-thing-likely that the OEX might drop toward that 578.37-578.69. Please temper this information with the knowledge that nothing much works as the charts say they will this late on an opex Thursday.

Jeff Bailey : 12/15/2005 3:14:28 PM

03:00 Internals found at this Link

Linda Piazza : 12/15/2005 3:05:42 PM

The OEX closed the last 15-minute period below the Keltner line currently at 580.26, the first time it's done so since Monday afternoon. Now, for bears to benefit much, it needs to stay below that, and then drop below 579.75 and stay below there. Be careful here, as we're into the last hour of trading for December SPX and many other index options. This is not true for OEX options, as they trade tomorrow, too, but there will certainly be some opex-manipulation associated with many of the indices, and that's going to impact the OEX.

Jeff Bailey : 12/15/2005 3:02:32 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 12/15/2005 2:58:54 PM

QQQQ 41.80-.82 contunues to hold despite the rising support break and the new lows for YM. As usual, it's a bottomy wavelet opposed to the new rollover in the short cycle that's providing the ambiguity- but when in doubt, the longer cycle should set the tone as the wavelet trends most easily. 41.80-.82 is the level to watch. Link

Linda Piazza : 12/15/2005 2:55:27 PM

Advdec line dropping, but at possible support now, with the advdec line at -2353. Bears want to see it keep dropping.

Jeff Bailey : 12/15/2005 2:55:37 PM

JNJ / OEX Options Montage as OEX trades 580 strike. Link ... This would be 01:51 PM CST.

Linda Piazza : 12/15/2005 2:52:50 PM

The SOX has broken below the trendline off the day's high, so broken below the triangle it had been forming. The neckline of the H&S it may have been forming over the last few days is at today's low, so it would have to break to a new low to confirm that. Because the neckline is at today's low, that should be presumed to be support. So far, though, the OEX is finding support at the last five-minute swing low just above 498.

Jonathan Levinson : 12/15/2005 2:48:55 PM

QQQ breaks rising support: Link

Linda Piazza : 12/15/2005 2:47:51 PM

The OEX does appear to be dropping below the ascending trendline off the week's low now. It's dropped down to test that support from 580-580.28 on 15-minute closes. Bears need to see a close below this to feel that anything is changing about the week's uptrend. Next support on the 15-minute chart is at 578.34-578.65, so if this current support should break, bears need to know how they'll handle a test of that level.

Jonathan Levinson : 12/15/2005 2:46:05 PM

Crude oil finished -.8 at 60.00, natgas -.895 at 13.785, 4.5 cents off the low.

Linda Piazza : 12/15/2005 2:45:04 PM

SOX still bouncing from that ascending trendline off the day's low. The SOX is actually in a triangle shape today (within a bigger H&S), with the top trendline a little difficult to determine because it's a big jagged. However, the best-fit version that began forming yesterday about noon may be at about 500.22 currently, with the SOX currently at 498.85. A version of the top trendline that includes trading only since about noon is low, at about 499.75. Another, from this morning's early high, is even lower, at about 499.35. So, take your pick as to which is most valid.

Jane Fox : 12/15/2005 2:39:33 PM

TICKS range so far today has been +738 to -880.

Linda Piazza : 12/15/2005 2:37:43 PM

The OEX edges just beneath the rising trendline off the week's low, with that low produced Monday. The OEX is really just testing it, at 580.58 . . . yes, started bouncing a bit as I typed. As I've been saying, the OEX has to produce a 15-minute close below the Keltner lines at 580.16-580.28 to change anything about the week's trend.

Jonathan Levinson : 12/15/2005 2:34:49 PM

QQQQ edges back again from below the pivot, tracing another wavelet downphase to the rising intraday support line. If this is a bullish rising triangle, then that rising trendline needs to hold, while bears need a break of 41.82 to invalidate it: Link

Linda Piazza : 12/15/2005 2:34:01 PM

SOX so far holding above the descending trendline off the day's low.

Linda Piazza : 12/15/2005 2:33:14 PM

The OEX has now just confirmed a nicely formed H&S on its one-minute chart and it's dropping as it should do after confirming it. Downside target about 580.11. I wonder if any big bucks people are going to use this little dip as an opportunity to play that manipulation game referenced in the link Jeff posted earlier.

Linda Piazza : 12/15/2005 2:30:39 PM

On the converse (to GE), the SOX is dropping to test the ascending trendline off the day's low, with that trendline at about 498.40 and with the SOX at 498.73. This is of course a potential bounce point, but a big decline in the SOX could damage sentiment. So far, though, it just chops around within a possible right shoulder formation for a H&S.

Linda Piazza : 12/15/2005 2:29:05 PM

It's hard to see on anything other than a line drawing of a one-minute chart, but GE has just confirmed a H&S on that one-minute chart. The downside target is around 36.00, but also true to form lately for any bearish formation, GE immediately bounced back above the 36.09-ish neckline and is now at 36.10. It's possible that it's just reforming into a new H&S, but this is not the kind of action that bears want to see.

Jonathan Levinson : 12/15/2005 2:22:48 PM

Volume breadth -1.5:1 on the NYSE, -1.2:1 on the Nasdaq here.

Linda Piazza : 12/15/2005 2:22:22 PM

With less than 10 minutes to go during this 60-minute period, the VIX barely clings to the Keltner line at 10.77, the line that served as resistance for most of the week until the VIX broke above it this morning, only to be turned back by next resistance. The VIX is at 10.74, the current candle body spanning that line.

Linda Piazza : 12/15/2005 2:19:49 PM

There is danger to bears here in that they couldn't push the OEX lower after producing a possible bearish "b" distribution pattern this morning and they haven't been able to produce any more downside, either. Yet I wonder how cheered the bulls are to have the advdec line climbing since the 10:15 candle, but not have the OEX climb too much. The OEX has climbed, and the shape of its climb looks a lot like that of the advdec line, but sometimes the OEX climbs exuberantly while the advdec line just moves a little, and the OEX isn't doing that.

Jeff Bailey : 12/15/2005 2:18:14 PM

02:00 Internals found at this Link

Linda Piazza : 12/15/2005 2:17:22 PM

The OEX still strings 15-minute candles along the Keltner line currently at 580.91. It still hasn't violated the support at 580.23-580.27 or even so much as touched it since early this morning. First resistance at 581.62 and then 582.21.

Linda Piazza : 12/15/2005 2:07:08 PM

Advdec line still climbing, still looking somewhat bear flaggish, but as long as it's climbing, that's going to be supportive of the markets. It's now facing next important resistance at -1825 to -1730, with the advdec line now at -1876, QCharts value.

Jeff Bailey : 12/15/2005 2:05:26 PM

02:00 Market Watch found at this Link

Linda Piazza : 12/15/2005 2:02:29 PM

OEX 15-minute Keltner picture: The OEX is trying to rise once again from that Keltner support now at 580.96, but I wouldn't really consider that line either support or resistance right now. It's just the line across which the OEX has been stringing the 15-minute candles. Next resistance at 581.62 and then 582.19 on 15-minute closes. The most important support is now at 580.24-580.27 on 15-minute closes. OEX currently at 581.31.

Jonathan Levinson : 12/15/2005 2:01:35 PM

QQQQ held 41.82 support and the bounce back above 72 SMA support has the short cycle turning back up from above oversold territory. 41.96-42.00 remain key resistance immediately overhead, above which the session high will be back in view. Price continues to hold within its range of the past 2 weeks. Link

Jeff Bailey : 12/15/2005 2:01:21 PM

JNJ Option Montage / OEX top 25 at this Link ... Looked around ... liked the $60 stock price, relative to where the stock is trading. $60-$65 gives some upside room for the "manipulation game" and perhaps the options market maker doesn't want to see those $60 puts finish in the money.

Jeff Bailey : 12/15/2005 1:56:44 PM

Johnson & Johnson (JNJ) $60.09 -0.03% ...

Jeff Bailey : 12/15/2005 1:53:31 PM

Bullish call option alert ... let's take five (5) of the Johnson & Johnson JNJ Dec. $60 Calls (JNJ-LL) at the offer of $0.25.

Linda Piazza : 12/15/2005 1:52:44 PM

TRAN trying to bounce again. It's at 4133.43, day's high at 4142.65, the top of the descending regression channel somewhere around 4147, although you can draw these on different time frames and come away with slightly different channel lines.

Jonathan Levinson : 12/15/2005 1:48:33 PM

Ten year notes are recovering, TNX down to a 3.8 bp gain and back below 4.5% at 4.488%, flattening against IRX which is now up 4.3 bps at 3.845%.

Linda Piazza : 12/15/2005 1:42:47 PM

Remember that we're in one prime stop-running time of day.

Linda Piazza : 12/15/2005 1:41:39 PM

Wow, the OEX has become more volatile. I'm having to watch it on a two-minute Keltner chart. OEX movements now mostly contained within a channel with boundaries now at 580.37 on the downside and 581.21 on the upside, two minute closes. OEX at 581.15 as I type.

Linda Piazza : 12/15/2005 1:35:46 PM

Every little mini breakdown is so far still being met by enough buying to keep the breakdown from deepening. I don't know if this is just opex machinations or something more bullish, but bears don't want to see it continue, whatever the reason.

Linda Piazza : 12/15/2005 1:34:03 PM

The OEX still has not closed a 15-minute period below the Keltner support currently from 580.12-580.14. Needs to do that before bears feel even the slightest safety.

Jeff Bailey : 12/15/2005 1:35:50 PM

OEX Options Montage & Top 25 weighted at this Link ... For those looking to play "the expiring option exercise manipulation game" Link

Linda Piazza : 12/15/2005 1:30:25 PM

After an early decline, the TRAN climbed today, coming within a few points of touching the top of a descending regression channel in which it's been trading since the middle of November. The possibility remains that this could be a bull flag, so traders will want to watch to see if the TRAN should break out again to the upside or falls through the channel again. As QCharts drew the top of the descending regression channel, it's at about 4148 currently, with the TRAN high of the day at 4142.65, but with the TRAN currently at 4127.57. The TRAN's pattern since yesteday morning looks to me like a broadening one at the top of its climb off the week's low, but . . . well, you know all the "but's."

Jonathan Levinson : 12/15/2005 1:28:36 PM

Volume breadth down to -1.7:1 on the NYSE, -1.55:1 on the Nasdaq.

Linda Piazza : 12/15/2005 1:18:44 PM

SOX still chopping around within a right-shoulder level for a possible H&S on its 15-minute chart, building since late Friday and early Monday. It could chop around between the neckline at about the day's low and the 503.50-ish top of the shoulder level all through the rest of the day and that formation would remain valid. It's also now created the minimal right-shoulder chop to look as if the formation could confirm now and not look too lopsided with the wide left shoulder. Of course, there's another possibility, often seen lately: the formation could be invalidated. SOX at 499.07 as I type.

Jonathan Levinson : 12/15/2005 1:16:40 PM

The CBOE total put to call ratio is down at .51 here, where it's been for all of today: Link . These are extreme levels, definitely impacted by the proximity of December op-ex. However, as seen in the VTOreport charts yesterday and the daily chart of the put to call ratio Link , this is extreme low territory- a signal for caution for index bulls at the very least.

Linda Piazza : 12/15/2005 1:16:06 PM

Reading Keene's and Mark's talk about their new song, I realize how much I'm going to miss all of you, my fellow writers. The writers don't get to say it for themselves, but now that I've decided to take some time away as our family adjusts to various challenges, there are things I can say for the others. All these writers work hard, and they work hard because they care about doing a good job. They obsess about doing a good job. They don't have to work these hours or post this much. They do it because they care. They work long hours when trades and suggestions pan out well and even more when they don't. They research constantly. They try new platforms and technical analysis tools and they tell you what they learn. They all share these traits, but then there are those extras that each brings to the commentary. I won't miss you all, because I'll be reading your commentary along with other subscribers, but I'll miss being a part of it.

Jeff Bailey : 12/15/2005 1:13:16 PM

01:00 Internals found at this Link

Linda Piazza : 12/15/2005 1:09:26 PM

I knew those candles sitting on top of the OEX support didn't look too healthy, as I mentioned in my post a few minutes ago, but the OEX hasn't dropped past the most important support, at 580.11 on a 15-minute close. Until then, bears aren't breathing much easier. OEX at 580.40 as I type.

Jonathan Levinson : 12/15/2005 1:08:46 PM

QQQQ's wavelet has just rolled over from a lower high, and breaking 72 SMA support. This confirms a new short cycle downphase in progress, but price needs to lose that small h&s support line at 41.82-.83: Link

Linda Piazza : 12/15/2005 1:07:53 PM

Dow threatening to go red again.

Jeff Bailey : 12/15/2005 1:02:50 PM

01:00 Market Watch found at this Link

Linda Piazza : 12/15/2005 12:58:42 PM

OEX Keltner view: The OEX is balancing small-bodied and not especially healthy looking candles on the support at 580.89 on 15-minute closes. So, it's maintaining that support. Next resistance at 581.64 and then 582.14.

Jonathan Levinson : 12/15/2005 12:56:13 PM

New session low for natgas here at 13.915, reversing all of its post-inventory data gain. Link Crude oil is down 30 cents at 60.55. Link

Linda Piazza : 12/15/2005 12:45:42 PM

The OEX just hit the top of that one-minute Keltner channel, trading a few cents above it before moving back inside it. Channel from 580.61-581.17 now, with the OEX at 581.06.

Linda Piazza : 12/15/2005 12:44:50 PM

The SOX had been building a H&S on its one-minute chart. I didn't mention it because it's on a one-minute chart and because, well, these have so little validity any longer. As expected for this "typically bearish" formation, the SOX just attempted a breakout to the upside, so the bulls haven't been vanquished over the short term. This is all occurring well within the right shoulder for the larger H&S that the SOX is perhaps building on it 15-minute chart, since last Friday. It's just part of the chop.

Jonathan Levinson : 12/15/2005 12:39:14 PM

QQQQ's wavelet downphase completes here, and price stalls as the short cycle indicators hang on preliminary sell signals. Price is right on 72 SMA support at 41.88: Link

Linda Piazza : 12/15/2005 12:35:20 PM

You know it's bad when the OEX doesn't even trade from one side to another of a Keltner channel watched on the one-minute chart. That channel is from 580.52 to 581.14. Usually, such trading is preparatory to a breakout one direction or another, but not always on opex Thursdays. OEX at 580.76 as I type.

Linda Piazza : 12/15/2005 12:26:57 PM

I think we can say that the OEX's possible "b" distribution pattern is invalidated due to the time that the OEX has spent trading sideways. That failure to follow through on a bearish formation is troublesome for bears. However, when I look at the pattern on a three-minute chart, it appears that there was an upside breakout, but that the OEX can't make any forward progress since that breakout, and that's troublesome for bulls. The OEX is now trading in such a tight range that it's basically staying within a one-minute channel that currently spans from 580.51 on the downside up to 581.15 on the upside. The channel had been rising, but is now flattening. Typical opex Thursday stuff so far, but I'm watching for a breakout one direction or the other. OEX at 580.68 as I type, dropping fast (if you're looking at a one-minute chart).

Linda Piazza : 12/15/2005 12:20:51 PM

The SOX's pattern on intraday charts could be that of a H&S (I know, I'm even embarrassed to mention them any longer), with the SOX currently in a second right shoulder to go with the two left shoulders. The neckline would be at about 596.50, the day's low and the SOX probably shouldn't rise above 503.50 or so to keep the formation looking okay. Unfortunately for those watching the SOX, it looks as if the SOX could chop around the rest of the day inside the right-shoulder level and not invalidate the formation if you're looking at the symmetry with the length of time it took to build the left shoulder side. That doesn't mean that the SOX will do that, but it's certainly possible. SOX at 499.70 as I type.

Jeff Bailey : 12/15/2005 12:16:22 PM

12:00 Internals found at this Link

Jonathan Levinson : 12/15/2005 12:16:15 PM

The 60 min cycle is just starting to turn up now, the 30 min cycle stalling in its early downturn- still an unreadable mess on the longer intraday cycles. The short cycle is entering overbought as the wavelet remains pinned in an upside trending move. 42 QQQQ should serve as support on this push. Link

Linda Piazza : 12/15/2005 12:15:52 PM

At about 502, the SOX will hit the descending trendline off Tuesday's high. SOX at 500.69 as I type, having just turned down from 501.29.

Linda Piazza : 12/15/2005 12:14:52 PM

The advdec line is still climbing off its low. It still hasn't retraced even 38.2% of the day's range and its climb looks bear flaggish, but they often start out this way and then gain momentum. Next resistance at about -1750, but more important resistance currently at -1600 to -1540. Advdec line at -1843, QCharts value.

Jonathan Levinson : 12/15/2005 12:08:15 PM

Volume breadth up to -1.3:1 on the NYSE, 1:1 on the Nasdaq.

Linda Piazza : 12/15/2005 12:06:53 PM

The advdec line is above the resistance that was holding it back earlier, but with about 1/3 of the 10-minute period to go.

Linda Piazza : 12/15/2005 12:05:42 PM

VIX leaped again while I wasn't watching. VIX at 10.93 and it handily closed the last 60-minute period above that line that had served as resistance all week, with that line now at 10.79. There's resistance, though, at 11.18-11.23 on that chart, and the VIX shows the result of that resistance, falling back each time it approaches it.

Jeff Bailey : 12/15/2005 12:04:48 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 12/15/2005 12:04:08 PM

There's disagreement as to the consensus level, with Briefing reporting 15, but all sources agree that the headline number of 12.6 came in below estimates.

Linda Piazza : 12/15/2005 12:03:35 PM

Surging employment figures in the Philly Fed won't be good news for those watching for wage inflation, but a lower prices-paid component may sooth some.

Jonathan Levinson : 12/15/2005 12:03:20 PM



12:00pm U.S. DEC. PHILLY FED 12.6 VS.11.5 IN NOV.


Jonathan Levinson : 12/15/2005 12:01:31 PM

Philly Fed 12.6 vs. 15 exp.

Linda Piazza : 12/15/2005 11:59:36 AM

Unless there's a pullback in the next couple of moments, which could occur, the OEX looks as if it's going to close the current 15-minute period above the Keltner resistance at 580.76. The OEX verges on invalidating that potential "b" distribution pattern, but it's still staying mostly below the confirmation level for its double-top formation and back inside that descending regression channel off the 11/23 high. OEX at 580.97 as I type.

Jonathan Levinson : 12/15/2005 11:55:34 AM

Session low for ten year notes, TNX +5.3 bps at 4.503%, IRX +4 bps at 3.842%.

Jeff Bailey : 12/15/2005 11:55:26 AM

Matria Healthcare (MATR) $39.75 +9.29% ... Percentage gainer at the NASDAQ after the provider of health enhancement programs said it will buy disease management firm CorSolutions Medical for $445 million in cash.

Matria expects the transaction to add somewhat to 2006 earnings and make a more significant contribution to 2007 results. Analysts expect earnings per share of $1.40 in 2006, and $1.71 in 2007.

Privately held CorSolutions is expected to book more than $120 million in revenue in 2005.

Jonathan Levinson : 12/15/2005 11:53:04 AM

QQQQ breaks back above the pennant apex, reversing all losses since the premarket: Link

Linda Piazza : 12/15/2005 11:52:52 AM

GE still coiling at the top of its climb.

Linda Piazza : 12/15/2005 11:52:35 AM

Advdec line testing -2050 to -2025 resistance on 10-minute closes. (I accidentally typed in the wrong number in my last post about the advdec line.) Advdec line at -2060 as I type.

Linda Piazza : 12/15/2005 11:49:09 AM

The OEX's Keltner resistance held again, sort of, with the OEX closing the last 15-minute period about three cents above it, but basically hold to it. The OEX is inching back above that resistance at 580.76 on 15-minute closes as I type, though, with the OEX at 580.87. (Note: dropped back to 580.71 as I typed.) Positioning before the Philly Fed and can it be trusted, if it is?

Linda Piazza : 12/15/2005 11:45:30 AM

Remember the Philly Fed coming up at noon, and begin to make decisions as to whether you want to hold over that release.

Linda Piazza : 12/15/2005 11:43:13 AM

The OEX is again trying to break above Keltner resistance at 580.76 on 15-minute closes. It's at 580.73 as I type, with several minutes to go. Clearly, there's still some upward pressure as the OEX is spending more time testing the resistance at its potential "b" distribution pattern than it is testing support. It's springing up quite handily from tests of that support from 579.66-570.86 on 15-minute closes, and hasn't even approached it over the last two fifteen-minute periods. While bears are glad that the resistance is tentatively holding while the advdec line climbs, they'd prefer that there weren't this many signs that bulls were still trying so hard.

Linda Piazza : 12/15/2005 11:40:20 AM

No new low on the advdec line and it climbs again to test resistance near -1700. Advdec line at -2140 as I type.

Jonathan Levinson : 12/15/2005 11:39:04 AM

So far, QQQQ's bounce has held below the declining 72 SMA, testing it again here at 41.88. Above that level, the 30 min cycle will take an upward bias- but as we've been seeing, these longer intraday indicators have been hopelessly lagging the action this week. Link

Linda Piazza : 12/15/2005 11:34:44 AM

The advdec line's resistance held where bears would have hoped it would, at a ten-minute resistance now at -2022 to -1993. Bears need to see a new low to confirm that, though, or else this current slight pullback to -2231 is just a pullback through the flag that's climbing higher off the low of the day.

Linda Piazza : 12/15/2005 11:32:25 AM

The OEX's first resistance, at 580.76, held on the 15-minute close. With support at 579.78-579.85 also holding on closes, the OEX could continue to test that resistance. OEX at 580.57 and the formation does still look like a "b" distribution pattern, with technical analysis suggesting that the break will be to the downside, but with strange things going on in the market today, making all indicators a bit untrustworthy.

Jonathan Levinson : 12/15/2005 11:30:49 AM

From the Treasury website with reference to next Monday's auctions:

The Treasury will auction 13-week and 26-week Treasury bills totaling $34,000 million to refund an estimated $30,671 million of publicly held 13-week and 26-week Treasury bills maturing December 22, 2005, and to raise new cash of approximately $3,329 million. Also maturing is an estimated $24,000 million of publicly held 4-week Treasury bills, the disposition of which will be announced December 19, 2005.

Linda Piazza : 12/15/2005 11:26:17 AM

The VIX is still struggling to maintain support at the Keltner line that had stopped advances the rest of the week, at 10.71 on 60-minute closes. The VIX is at 10.68 as I type, a little below it, but with the candle body still spanning the line, as did the previous 60-minute's candle body.

Just noticed that there's a little potential H&S on the VIX's five-minute chart, neckline at about 10.65.

Linda Piazza : 12/15/2005 11:23:42 AM

The OEX is now retesting the confirmation level for its double-top formation this morning, with that at 580.99 and with the OEX at 580.95, but just having punched a few cents higher. However, in punching that much higher, it confirmed a double-bottom formation on the three-minute chart. Still competing bearish and bullish formations here, but watch for the possibility that this little push higher was a stop-running move. Bulls don't want to see a quick reveral back toward the day's lows.

Linda Piazza : 12/15/2005 11:21:02 AM

The OEX has now risen to test that resistance at 580.75 on 15-minute closes, with the OEX at 580.94. On the 15-minute chart, outside of Keltners, the pattern looks a bit like a "b" distribution pattern composed of a fast drop (the stem of the "b") and then roughly rectangular consolidation at the bottom (the bulb of the "b"). It will stop looking like that if the OEX moves too much above 580.85, though.

Jonathan Levinson : 12/15/2005 11:20:23 AM

Upside flag upper trendline violation on QQQQ here: Link

Jonathan Levinson : 12/15/2005 11:15:23 AM

QQQQ continues its sideways upphase, as the short cycle indicators turn up to join the wavelet: Link

Jeff Bailey : 12/15/2005 11:14:37 AM

11:00 Internals found at this Link

Linda Piazza : 12/15/2005 11:11:52 AM

The OEX remains above the ascending trendline off Monday's high, with that trendline at 579.25. It's still bouncing from Keltner resistance at 579.78 on 15-minute closes but remains below 580.82 on 15-minute closes.

Linda Piazza : 12/15/2005 11:07:09 AM

GE still coiling at the top of its climb.

Linda Piazza : 12/15/2005 11:06:44 AM

Advdec line perhaps turning lower again, but it hasn't reached a new low yet, but it certainly isn't strong.

Jeff Bailey : 12/15/2005 11:04:12 AM

11:00 Market Watch found at this Link

Linda Piazza : 12/15/2005 11:00:55 AM

Stepping away for a few minutes.

Jeff Bailey : 12/15/2005 10:57:44 AM

EIA Weekly Distillate and Nat. Gas Storage Table found at this Link

Linda Piazza : 12/15/2005 10:55:37 AM

The SOX rises to retest the Keltner resistance line that had previously served as support all week. That's at 499.39 on 15-minute closes, with further resistance at 499.82 and 500.65 on 15-minute closes. SOX at 498.75, just off this candle's 499.02 high.

Jeff Bailey : 12/15/2005 10:49:19 AM

EIA Nat Gas Storage by Region at this Link

Linda Piazza : 12/15/2005 10:48:56 AM

Not much of a bounce in the advdec line, is it? It's been enough to keep the OEX consolidating at the bottom of its range, though. Bears still want to see that 579.74 support violated on a 15-minute close and they don't want to see the 580.99 resistance violated on a 15-minute close. The OEX is between the two now, at 580.55.

Jonathan Levinson : 12/15/2005 10:47:58 AM

A flaggy bounce so far for the Qs below 41.82. So far, the short cycle indicators have yet to stall: Link

Linda Piazza : 12/15/2005 10:42:42 AM

Careful, bears. Big drop in the VIX. It's dropped all the way to below the Keltner line that pressured it the rest of the week after having pierced it. VIX at 10.68, and that line is at 10.71.

Jonathan Levinson : 12/15/2005 10:41:06 AM

Volume breadth -1.6:1 on the NYSE, -1.4:1 on the Nasdaq.

Linda Piazza : 12/15/2005 10:40:16 AM

GE is not cratering. It's coiling at the top of its range. BA, however, is now at the confirmation level for a double-top formation on its intraday charts, testing the level but not breaking below it yet.

Linda Piazza : 12/15/2005 10:39:06 AM

The OEX so far stays beneath next Keltner resistance at 581.09 on 15-minute closes, but also above support at 579.73 on 15-minute closes. Bears need that support to break. Stronger support will be waiting near 577.41-577.96, so if the support being tested is broken, you need to know how you're going to deal with a test of the 577-578 region's support, if the OEX should drop to that level. Will you exit automatically? Exit part of the position? Just lower stops?

Linda Piazza : 12/15/2005 10:35:19 AM

So far, the advdec line's bounce has been modest and corrective. Once a bounce has begun, I usually switch to a short-term chart such as the three-minute to determine where first resistance might be, but the decline was so deep and prolonged that not even the three-minute chart shows any converging trendlines, so that it's tough to figure out strongest resistance. I would guess that it's at about -1925 to -1850, however, with the advdec line now at -2338. Bears want that to hold.

Jonathan Levinson : 12/15/2005 10:32:47 AM

Natgas bounce to a .04 loss at 14.64 on the news of the drawdown in the weekly inventory figure.

Jeff Bailey : 12/15/2005 10:34:41 AM

SPY / SPX Options Montage at this Link

Yesterday I noted formidable selling of the SZP-XO for $8.12 on average.

That montage at this Link

Jonathan Levinson : 12/15/2005 10:32:10 AM

From the EIA website:

Working gas in storage was 2,964 Bcf as of Friday, December 9, 2005, according to EIA estimates. This represents a net decline of 202 Bcf from the previous week. Stocks were 195 Bcf less than last year at this time and 107 Bcf above the 5-year average of 2,857 Bcf. In the East Region, stocks were 43 Bcf above the 5-year average following net withdrawals of 118 Bcf. Stocks in the Producing Region were 26 Bcf above the 5-year average of 797 Bcf after a net withdrawal of 55 Bcf. Stocks in the West Region were 38 Bcf above the 5-year average after a net drawdown of 29 Bcf. At 2,964 Bcf, total working gas is within the 5-year historical range.

Jeff Bailey : 12/15/2005 10:31:38 AM

Sell Program Premium SPX 1,269.51 ... 1,267 important intra-day support in my mind. See yesterday's option chain comments.

Jonathan Levinson : 12/15/2005 10:31:11 AM

Session low for ten year notes at 108 5/8, TNX +4.6 bps at 4.496%, just below 4.5% resistance.

Jonathan Levinson : 12/15/2005 10:29:17 AM

The drop on QQQQ could be the first shot across the bow on the 10 minute chart, stalling its upphase early on the break below rising support. If so, a consolidation at these levels would see the channels decline and set us up for more downside to follow. 1st sign of trouble for bears would be a break back above 41.81-.82: Link

Linda Piazza : 12/15/2005 10:28:34 AM

OEX 15-minute Keltner picture: The OEX hit support from 579.70-579.81 on a 15-minute closing basis and is bouncing from that. Bears would like to see the OEX find resistance on any bounce at a line currently at 581.24, and then would like to see the OEX violate that support just tested.

Jane Fox : 12/15/2005 10:27:47 AM

These two are in sync today, both hit daily highs and lows at the exact same time. Link

Linda Piazza : 12/15/2005 10:25:44 AM

VIX still climbing. It served up a nice warning yesterday, but bears want to see it maintain its climb. Currently it's at 10.95, well above the Keltner level currently at 10.73, a level that had pressured the VIX lower on previous tests this week. Lots of potential resistance from 11.14-11.27, though.

Jane Fox : 12/15/2005 10:26:27 AM

A true "Stay short or stay out" scenario would be the AD volume heading down and never looking back so the little hook upwards you see there is the bulls showing their strength and shorting is not a slam dunk but it is close to a slam dunk. Link

Linda Piazza : 12/15/2005 10:23:37 AM

The early advdec line attempt to bounce didn't result in a bounce, but it's now reached strong potential support, at about -2470 on 15-minute closes. I'd expect some sort of bounce attempt here, and there appears to be one in the making. If in bearish positions, be aware that the OEX has been bouncing a lot on just a small advdec line bounce.

Jonathan Levinson : 12/15/2005 10:22:51 AM

Big volume compared to the previous sessions this week, 24.1M QQQQ shares at 10:22AM.

Jeff Bailey : 12/15/2005 10:20:33 AM

10:00 Internals found at this Link

Jonathan Levinson : 12/15/2005 10:17:50 AM

No other news I see yet.

Jonathan Levinson : 12/15/2005 10:17:40 AM





Jonathan Levinson : 12/15/2005 10:16:04 AM

New low for the week on QQQQ.

Jonathan Levinson : 12/15/2005 10:14:42 AM

This move is entirely beyond me. Volume breadth is down to -1.5:1 on the NYSE, -1.4:1 on the Nasdaq.

Linda Piazza : 12/15/2005 10:14:21 AM

SOX testing the supporting line that's been holding all week, at 498.61-499.45 on 15-minute closes. The SOX is at 497.81 as I type.

Jonathan Levinson : 12/15/2005 10:12:51 AM

QQQQ's wavelet downphase is reaching the bottom, and the short cycle indicators are only now rolling over. The market felt ready to erupt to the upside, more than in recent sessions to me- my own gut perhaps providing a bearish divergence there. Week-long trendline support being tested right now, with the short cycle on the cusp of a new downphase: Link

Linda Piazza : 12/15/2005 10:12:44 AM

Double top confirmed on the OEX.

Jeff Bailey : 12/15/2005 10:12:27 AM

Sell Program Premium ... SPX 1,269.87

Jane Fox : 12/15/2005 10:12:20 AM

TICKs -800.

Jeff Bailey : 12/15/2005 10:11:43 AM

Sell Program Premium ... DIA $109.13, SPX 1,270.76, QQQQ $41.84

Linda Piazza : 12/15/2005 10:11:40 AM

OEX succumbing now.

Jonathan Levinson : 12/15/2005 10:11:03 AM

I could use a smoke right now.

Jonathan Levinson : 12/15/2005 10:10:02 AM

QQQQ chart updated at this Link with longer term rising support from last Thursday at 41.81.

Linda Piazza : 12/15/2005 10:09:40 AM

And the advdec line still plunges. I have never seen such a deep plunge with the OEX holding up so well. It doesn't always retreat as much as some other indices, of course, if the big caps are outperforming others, but even those big caps usually get carried lower with the advdec line dropping to -2105 as it's done now.

Linda Piazza : 12/15/2005 10:06:24 AM

OEX knocked back fairly quickly from its test of yesterday's high, but it hasn't dropped below the confirmation level of its double-top formation, with that level at 581.31 and the OEX at 581.65.

Jeff Bailey : 12/15/2005 10:06:12 AM

Sell Program Premium ... DIA $109.28, SPX 1,272.14, QQQQ $41.93

Jeff Bailey : 12/15/2005 10:05:18 AM

10:00 Market Watch found at this Link

Linda Piazza : 12/15/2005 10:05:00 AM

The VIX is above the resistance that's blocked it all week, now at 10.69 on 60-minute closes, but it obviously has not had a 60-minute close above that line. VIX at 10.74 as I type, but off its 10.76 high.

Linda Piazza : 12/15/2005 10:02:45 AM

And here's the OEX back to test yesterday's high of 582.64, with the OEX a cent above it as I type.

Jeff Bailey : 12/15/2005 10:02:22 AM

Altria (MO) $77.01 +4.47% Link ... Illinois Supreme Court rules in favor of Altria in Tobacco Lawsuit.

Linda Piazza : 12/15/2005 10:00:58 AM

To play devil's advocate to my own 9:56:47 post: GE broke out above a descending trendline from its November high. Some other big caps that were big gainers yesterday are gaining again today. Jonathan mentioned the net add today, not always a sign that money will go into equities, but sometimes a sign that markets will be propped up. The advdec line is dropping so steeply that its move looks overdone all the way up through the 15-minute chart now, and it should have at least a countertrend bounce sometime soon, with the OEX meanwhile still positive for the day. And the VIX is not a good market-timing tool.

Jonathan Levinson : 12/15/2005 10:00:33 AM

QQQQ at session low, Nasdaq volume breadth down to +1.4:1.

Linda Piazza : 12/15/2005 9:56:47 AM

To review: Yesterday, the VIX hit levels last seen the day before an intermediate high in the OEX, back in November. The techs didn't participate in yesterday's rally. There's been a flight into the big caps, as Keene said, usually a defensive measure. These are not bullish signs. As someone who has watched the Nikkei climb and climb and climb despite troubling development after troubling development, I absolutely know this is not a definite sign that the OEX or any other index is going to crater immediately or even at all, but historically these have been signs that you sure better know what your exit plan is, if in longs.

Jonathan Levinson : 12/15/2005 9:56:18 AM

Short cycle channel support is at 41.98, and the short cycle indicators still rise on QQQQ. So far this is just a wavelet pullback, but a break below that first support could pull the short cycle indicators down as well. Link

Jeff Bailey : 12/15/2005 9:56:21 AM

Amgen (AMGN) $79.35 +3.33% Link ... I'm a bit surprised the stock bids this morning. Late yesterday, company said it would buy Abgenix (ABGX) $21.72 +48.19% Link in a deal valued at $2.2 billion in cash.

Linda Piazza : 12/15/2005 9:54:36 AM

If you are in bullish positions in the OEX--and I know this is like crying wolf many times too many times--absolutely have a plan for protecting those profits. This doesn't mean that the OEX won't continue climbing, but there are some very troubling divergences out there. The VIX is still climbing, at 10.75 as I type.

Jonathan Levinson : 12/15/2005 9:54:04 AM

A big 12.25B overnight repo from the Fed results in a net 8B add for the day.

Linda Piazza : 12/15/2005 9:52:51 AM

I agree with Keene's 9:49:26 assessment about this looking defensive, and I'm particularly wary because of the VIX action we saw yesterday, but if your vehicle of choice is a big cap index, as it is for those of us trading the OEX, that doesn't make a bearish trade necessarily a good risk! But something absolutely has to give. The advdec line is terrible, plunging to -1254, its low of the day as I typed. I do expect a bounce in the advdec line at some time or another, but if it's only a minor one, the trend is still bad in the advdec line.

Jeff Bailey : 12/15/2005 9:51:42 AM

Sector Bell Curve comparison from 12/07 to 12/14 closes at this Link

Linda Piazza : 12/15/2005 9:49:56 AM

The advdec line still continues lower. What is going on? Is all money going into the big caps only? Something has got to give one direction or the other. Either the advdec line has got to bounce and maybe bounce hard or else the big-cap heavy OEX is going to have to keel over. Talk about bifurcation in signals.

Jonathan Levinson : 12/15/2005 9:49:03 AM

Feels like a launchpad for QQQQ, except that the price isn't following higher.

Linda Piazza : 12/15/2005 9:47:51 AM

BA, GE, PFE--all big gainers yesterday--are still near this morning's highs, with GE and PFE at higher highs and BA at an equal one.

Linda Piazza : 12/15/2005 9:46:34 AM

VIX at 10.60, opening this morning above the 60-minute resistance that it tried all day to surmount yesterday. It also needs a 60-minute close above a Keltner line currently at 10.68 to change the downward trend from this week.

Jeff Bailey : 12/15/2005 9:45:43 AM

DJ US Home Construction Index (DJUSHB) 976.83 +1.58% Link ... reaks above 11/23/05 relative high.

Linda Piazza : 12/15/2005 9:45:09 AM

Strange. Some of yesterday's big cap winners are seeing gains this morning, but the advdec line could not even rise into the first resistance. It's at -479 as I type, but is now testing potential support at -630.

Linda Piazza : 12/15/2005 9:41:43 AM

OEX 15-minute Keltner picture: Resistance at 582.36-582.78 on 15-minute closes. Support at 581.47-581.55 on 15-minute closes. The support of yesterday's rising wedge coincides with that other support.

Jonathan Levinson : 12/15/2005 9:41:04 AM

Volume breadth +1.6:1 on the NYSE, +1.9:1 on the Nasdaq, strengthening.

Linda Piazza : 12/15/2005 9:40:09 AM

Advdec line now bouncing, with strongest resistance in the 200-300 range. It's currently at -336, QCharts value. This still doesn't look strong to me, but it did reach very overdone levels on the five-minute chart at its low.

Linda Piazza : 12/15/2005 9:38:40 AM

BA, another big cap leading to the upside yesterday, is higher, too, but in BA's case, it's not above yesterday's high yet. BA is heading toward the top of a rising regression channel in place since January 2003, a long, long time for it to hold up without breaking down. I think it's about time, don't you? BA investors have not thought so.

Linda Piazza : 12/15/2005 9:36:30 AM

Mixed evidence. GE attempting an upside breakout, advdec line still heading down and looking as if it could drop much further. Not a good climate for forecasting anything.

Jeff Bailey : 12/15/2005 9:39:14 AM

Lennar (LEN) $61.96 +2.27% Link ... Number 3 homebuilder in U.S. said net income rose 55% to $581.2 million, or $3.54 per share for its recently completed Q4. The company added that its record $6.9 billion order backlog positions it well to achieve its 2006 earnings goal of $9.25 a share.

Linda Piazza : 12/15/2005 9:35:40 AM

Careful, bears. GE has broken above the descending trendline off its 11/21 high, with this the top of the supposedly bearish right triangle on its daily chart.

Linda Piazza : 12/15/2005 9:32:59 AM

Advdec line heads down and so does the OEX, from the top of the redrawn descending regression channel off the 11/23 high. The OEX has broken beneath yesterday's rising wedge, so this is a good place to consider a bearish play, but I am absolutely not certain in this climate that it's a good idea to do so. Technical analysis says yes, but technical analysis has not been a great tool, historically on opex Thursdays and the OEX already attempts to bounce.

Jonathan Levinson : 12/15/2005 9:32:26 AM

Volume breadth +1.3:1 on the NYSE, +1.5:1 on the Nasdaq at the open.

Jonathan Levinson : 12/15/2005 9:32:07 AM

QQQQ back to the top of yesterday's range. 30/60 min channel resistance are at 42.07-.09, 72 SMA support at 41.92, 30/60 min channel support 41.75-.80. Link

Jeff Bailey : 12/15/2005 9:29:10 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $9.74 and set for selling at $7.44.

Jonathan Levinson : 12/15/2005 9:29:27 AM

The Fed has so far announced a 10B 14-day repo against the 9B expiring in that timeframe, leaving 4.25B to address at the short term 10AM announcement.

Jonathan Levinson : 12/15/2005 9:17:43 AM





Jonathan Levinson : 12/15/2005 9:07:33 AM

QQQQ's 30 min cycle rises against the corrective/choppy 60 min cycle downphase as QQQQ continues to hold the middle of yesterday's range. All of the intraday cycles are chopped up, with even the declining wavelet opposed to the rising short cycle. I don't expect this picture to become any clearer today, as narrow op-ex rangebound action continues to distort the intraday cycles. The daily cycle within which all this is occurring upticked at the beginning of the week, but was stalling yesterday. It will take a break above the Tuesday highs to confirm a new upphase there- otherwise, it's just more sideways chop skewing the indicators. I will update the intraday levels at the opening bell.

Jonathan Levinson : 12/15/2005 9:01:45 AM





Linda Piazza : 12/15/2005 8:51:11 AM

Big caps ruled yesterday, and the OEX obviously benefited. It climbed all the way to the top of a redrawn descending regression channel off the 11/23 high. It pierced the channel but closed back inside it: Link At the same time, the VIX was falling to levels not seen since 11/22, the day before the OEX hit that 11/23 high intraday and began falling through the channel to touch bottom support on 11/30. That argues for the possibility of the OEX falling back through that channel again.

Or it would, if the VIX were a good market-timing tool, which it's not, and if it weren't opex Thursday, which it is, and if all new money hadn't flown into the big caps, which they have.

Watch for a breakout above that channel's resistance or a rollover beneath it. I'll tell you what I see, but opex Thursdays are not known for being particularly amenable to technical analysis. If you're not a have-to-trade-every-day kind of trader, this might be a good day to test your newest theory or newest indicator.

Jonathan Levinson : 12/15/2005 8:37:02 AM

Ten year notes flip negative, TNX now up 1 bp at 4.46%, steepening against the 13-week bill rate, down 1 bp at 3.792%.

Jonathan Levinson : 12/15/2005 8:33:54 AM

Equities are higher on the news, QQQQ at 41.97, TNX -.5 bps at 4.445%. Gold holds a 4.2 loss at 505.30, while crude oil is down .275 at 60.575, off a high of 60.925.

Jonathan Levinson : 12/15/2005 8:32:46 AM







Jonathan Levinson : 12/15/2005 8:31:50 AM













Jonathan Levinson : 12/15/2005 8:24:49 AM

Ten year notes add to their gains as equities recover to mixed, with QQQQ now up .3 at 41.93. TNX is down 1.7 bps at 4.433%, IRX down 1 bp to 3.792%.

Jonathan Levinson : 12/15/2005 7:48:37 AM

Equities are down, ES trading 1280.25, NQ 1716.5, YM 10933 and QQQQ -.02 at 41.88. Gold is down 3.10 to 506.40, silver +.022 at 8.487, ten year notes +1/16 at 109 1/64, crude oil -.05 at 60.80 and natgas is down .46 to 14.22.

We await the 8:30 releases of Initial Claims, est. 320K, the Empire State Index, est. 18.5, CPI and Core CPI, est. -.4% and +.2% respectively, and at 9AM, Net Foreign Purchases, prior 101.9B. Then at 9:15, Industrial Production and Capacity Utilization, est. .5% and 79.8%, and at noon, the Philly Fed, est. 15.

Linda Piazza : 12/15/2005 7:04:02 AM

Good morning. The Nikkei added another 200 points to yesterday's steep decline. Most other Asian markets turned in positive numbers, but European markets trend down this morning. As of 6:55 EST, gold was down $2.70 to $506.80, and crude, down $0.11 to $60.74. More details about Asian and European markets follow in succeeding paragraphs.

Last night, the Nikkei gapped below Monday's gap higher, isolating the last three day's prices with the two gaps. It tried to rise into last night's gap, but failed to maintain the highs of the days and ended up closing lower by 210.14 points or 1.36%, at 15,254.44. This is an astounding 631 points below Wednesday's intraday high, and it leaves Monday through Wednesday's trading looking like a blow-off top, isolated by those two gaps. However, as I've noted before, we've seen the Nikkei produce reversal signal after reversal signal in its rally and never reverse.

A figure had shown net inflows into Japanese investments in the last week, but with those inflows smaller than the previous week's. The tension between the government and the central bank over the correct timing for the ending of the easy monetary policy does not appear to have lessened as a meeting begins between the Bank of Japan and a new LDP party monetary policy panel. The Bank of Japan concludes a two-day policy meeting on Friday, with the central bank expected to keep policy steady. A newspaper article said that an examination of the Tankan survey yesterday showed a recovery in real estate and security sectors, and that there's no longer a need to put the highest priority on ease of loan repayment, and the government's continuing concern about deflation is overdone.

The biggest impetus to the Nikkei's decline appeared to be the dollar's plunge against the yen, sending Japanese exporters lower. Car manufacturers declined. A suspension of digital camera sales in China hurt Sony in particular. Companies related to domestic demand, including some banks, tended to hold up better in early trading. During the morning, October's leading DI (diffusion index) and coincident DI were released, both improving.

Most other Asian markets climbed. The Taiwan Weighted gained 0.37%, and South Korea's Kospi rose 0.26%. Japan's NTT DoCoMo will acquire a 10% stake in South Korea's KTF Co. Ltd., expanding into what is considered one of Asia's most advanced markets for mobile devices. Singapore's Straits Times inched up 0.06%, and Hong Kong's Hang Seng gained 0.55%. China's Shanghai Composite declined 0.16%. Toyota Motor announced that it has begun production of the Prius hybrid in China with its joint venture partner, FAW Group.

European markets have been trading near the flat-line level ahead of our CPI, but trending down as this report began. Banks and chemicals tended to perform relatively well, while miners traded lower. The U.K.'s important November retail sales figure surprised to the upside, rising 0.7% month over month against a revised-higher October figure, and 2.1% year over year. However, on CNBC Europe, some were already commenting that merchants were slashing prices to push through sales, and that margins would be hurt later. In the Eurozone, the third-quarter's labor costs increased less than expected, rising by 2.2% year over year. This data sometimes proves volatile, but the trend still shows that the ECB's worry about wage growth impacting inflation may be overdone, according to some market watchers.

In stock-specific news, Philips Electronics has announced plans to separate out its semiconductor manufacturing unit, for the purposes of making reporting earnings more predictable and making acquisitions easier. Macquarie Bank has bid for the London Stock Exchange, as had been anticipated, with the bank not upping a bid that the LSE has already termed "derisory."

As of 6:53 EST, the FTSE 100 was down by 15.80 points or 0.29%, to 5,505.30. The CAC 40 was down by 11.22 points or 0.24%, to 4,663.63. The DAX was lower by 3.76 points or 0.07%, to 5,283.00.

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