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Jeff Bailey : 12/29/2005 1:11:17 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $+8.02 and set for program selling at $+5.98.

Jeff Bailey : 12/29/2005 12:48:31 AM

Valero Energy (VLO) ... rather wide 60-minute interval chart. Same as shown at 12:29:32 AM, now add the WEEKLY Pivot Levels at this Link

Jeff Bailey : 12/29/2005 12:29:32 AM

Valero Energy (VLO) $51.87 +1.90% ... bar chart at this Link

Jeff Bailey : 12/28/2005 11:49:28 PM

EIA Gross Inputs, Refinery Operable Capacity, Percent Utilization Table assuming no net change from last week Link ... It is rare to see any change in Refinery Operable Capacity unless a refiner has added-on to an existing facility.

If there is any truth to "supply concern," then that concern may be coming from the last two week's report and Change in % Utilization of Operable Capacity, which has fallen off. This is most likely due to any shutdowns for maintenance, or temporary shutdown for winter driving season. Still, this will be monitored closely tomorrow.

Something else I've done is quickly take some PRICE benchmarks for Gasoline and Crude Oil from their continuous charts near the beginning of each month. Just to get an idea of the relationship between gasoline and oil. Relative strength is easily measured by taking unleaded, then dividing by oil. Multiply by 1,000 to get value that is chartable.

At today's close (placed for 12/23/05) I can calculate a RS of 28.0034, which was reflected in earlier RS chart.

Is % Change in Operable Capacity important to the MARKETS? It may be. On 12/14/05 10:44:05 I made quick mention of the decline as we got the 12/09/05 data.

Probably a coincidence, but the SPX's recent high was found that day.

At 10:44:31 AM, refiner Valero Energy (VLO) was trading $108.50. (has since split 2:1)

At 11:04:21 AM, I noted a sell program premium. Typed "Equities may have gotten wind of that 1% decline in operable capacity."

Jeff Bailey : 12/28/2005 10:25:30 PM

Continued from 12/28/05 09:57:49 PM) What does this relative strength chart of UNLEADED vs. OIL tell us?

Since early November (B), it would appear that there is an equilibrium found between unleaded and crude oil. Remember the hurricane activity and SUPPLY PROBLEMS brought on in September (9).

For a refiner of gasoline it also tells us that margins for refining gasoline have been steady since early November (B). MARGINS for a refiner of unleaded will EXPAND should relative strength of unleaded INCREASE/RISE vs. Crude Oil.

OI Technical Staff : 12/28/2005 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 12/28/2005 9:57:49 PM

Continuous Crude Oil ($WTIC) $0.50 box Link

Continuous Unleaded ($GASO) $0.01 box Link

Now, let's round off that "19.5 gallons of unleaded gasoline for every barrel of oil, to 20 gallons.

Here's a PnF relative strength chart of Unleaded vs. Crude Oil with a box size of 0.20 Link

Jeff Bailey : 12/28/2005 9:47:59 PM

Gasoline fact ... I've mentioned this before, but CNBC reminded me tonight.

It takes 1 barrel of oil to produce 19.5 gallons of gasoline

Jeff Bailey : 12/28/2005 9:42:36 PM

EIA Crude Oil, Gasoline, Distillate, Nat Gas Table assuming no net change in inventories from last week at this Link

This is what Distillate, Nat Gas, Diesel, Jet Fuel inventories looked like after last week's EIA report (Thursday was Nat. Gas). Remember we had "frigid temperatures" into the Nat. Gas report (see MM 12/22/05 10:47:28 AM) Link and Nat. Gas got smacked sharply lower.

Here is what the Crude Oil, Gasoline and Distillate data looked like after last Wednesday's release Link . I bold gasoline, as today's "headline" was supply concern for Gasoline, brought on by... well... warmer than usual weather! Go figure!

I'm not overly sure I'd swallow what some energy traders were dishing out today.

BUT! I noted some of today's trade in refiner VLO $51.87 +1.90%, which would be a play more sensitive to gasoline and distillate (which diesel, heating oil) is derived.

Watch those 3-month and Year Ago inventory levels after we get tomorrow's data.

"Winter" season usually ends around late March. That's 3-month out. Does the U.S. have enough stockpile of heating oil, nat. gas to make it to the spring? Yes... industry uses nat. gas and a "warmer than normal" summer could also spur demand.

Jeff Bailey : 12/28/2005 9:03:30 PM

Berkshire Hathaway Class A (BRK.A) $88,500.00 -0.11% Link ... Microsoft Chairman Bill Gates reports spending $2.66 million to buy 30 more Class A shares.

Mr. Gates, who has served as a Berkshire director since last December, bought 20 shares at $88,700 each and 10 shares at $88,600 apiece last Friday, according to a document filed with the Securities and Exchange Commission Wednesday.

This is the second purchase of Berkshire stock that Mr. Gates has disclosed in two days. Tuesday, Mr. Gates reported buying 50 Berkshire Class A shares to add to his holdings in the firm.

After his latest stock purchase, Mr. Gates owns 3,720 Berkshire Hathaway Class A shares, with a total value of more than $329 million, based on Wednesday's closing price.

Jeff Bailey : 12/28/2005 9:03:24 PM

I tell you what. This game show "Deal or No Deal" is fantastic (watching CNBC replay). It reminds me so much of the energy futures trade. Rags to riches, or back to digging ditches.

Each EIA report, is each case opened. Each day's weather, is another case opened.

NBC broadcasted the show. NBC is owned by General Electric (GE) $35.11 +0.14%.

Jeff Bailey : 12/28/2005 8:10:35 PM

Pattern focus on Feb. Nat Gas and Feb Crude Oil at this Link ... Both of these energy contracts have ACHIEVED both correlative PnF bearish vertical counts, and their head/shoulder top patterns.

I'm not sure if the futures monitor folks have pointed out the other head/shoulder top formation that could be forming in Crude Oil. Just know that it is there.

Feb. Crude Oil WEEKLY Pivot Levels from QCharts ... $56.61, $57.53, Piv= $58.41, $59.33, $60.21 (correlative with bar chart retracement).

Jeff Bailey : 12/28/2005 6:41:26 PM

Closing Internals found at this Link ... Note: At today's close, the NYSE 5-day NH/NL ratio has reversed back up into a column of X after reversing lower at the close of trade on 12/13/05. The NYSE 10-day NH/NL ratio continues to fall at 50.00% having reversed lower at the close of trade on 12/16/05 at 61.10% (62% on PnF chart).

Updated NYSE NH/NL Ratio Chart at this Link

Jeff Bailey : 12/28/2005 5:28:15 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/28/2005 5:24:12 PM

Delta Air Lines ... Interim pact with pilots cuts wages 14%. Pilot agreement effective as of 12/15/05. Pilots plan to negotiate comprehensive pact by 03/01/06. If no pact can be reached by 03/22/06, panel of "experts" to decide.

Jeff Bailey : 12/28/2005 4:51:08 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Closed out the Pfizer PFE Jan $25 Calls (PFE-AE) at the bid of $0.10 ($-0.20, or -66.67%).

Jeff Bailey : 12/28/2005 4:25:18 PM

02:12 PM EST Temperature with February Nat. Gas and Heating Oil futures settlement at this Link

Jonathan Levinson : 12/28/2005 4:00:36 PM

Big surge in volume on this drop, the largest of the day: Link

Jonathan Levinson : 12/28/2005 3:58:53 PM

QQQQ loses 41.05 support here, now testing the 72 SMA on the 3 min chart. 15-min 10 day chart at this Link

Jeff Bailey : 12/28/2005 3:53:05 PM

Matrix (MTRX) $9.64 +8.8% ... buyers gobble up to the close.

Jane Fox : 12/28/2005 3:46:25 PM

Datelien WSJ Enron's ex-chief accountant, Richard Causey, pleaded guilty to securities fraud and, as part of a plea deal, faces a seven-year prison term and $1.25 million in fines. He agreed to help pursue convictions against Enron founder Kenneth Lay and former President Jeffrey Skilling.

Jeff Bailey : 12/28/2005 3:46:21 PM

AMR Corp. (AMR) $22.58 -0.57% ... it got "whacked" to $21.80 this morning.

Probably due to some "basket selling" from XJT/CAL news.

Jane Fox : 12/28/2005 3:45:30 PM

The large caps have hardly broken overnight highs. Link

Jeff Bailey : 12/28/2005 3:45:15 PM

ExpressJet (XJT) $8.31 -21.82% ... missed this headline at 11:00 AM EST, from $10.50.

Continental (CAL) $21.26 -1.39% said it would withdraw 25% of its regional aircraft that ExpressJet has been operating. The two sides weren't able to agree on a new contract. Continental falls 2%.

Jane Fox : 12/28/2005 3:43:31 PM

WE've had two readings of TICK +1000 and it was not able to push the large caps to new daily highs.

Jeff Bailey : 12/28/2005 3:42:19 PM

ShopperTrak ... survey showed a 25.5% climb in holiday sales from a year earlier, turning around what had been a sluggish month. The research firm's co-founder still expects a 4%-4.5% rise this month in retail sales at U.S. malls and shopping centers.

Jonathan Levinson : 12/28/2005 3:38:23 PM

Against the longer intraday cycles, QQQQ's short cycle has printed a sell signal here on the failure to break the previous high. The opposition of the short cycle and the longer intraday cycles is a good recipe for further chop. 41.05-41.20 remains the range to watch. Link

Jeff Bailey : 12/28/2005 3:36:37 PM

"Junk Bond" measure, currently PHF $8.70 +1.04% snaps back a bit today.

Starting January 1, I'm going to replace EVV and PHF, which are managed closed-end funds. EVV shows manager "style drifting" and has not been a good fund for what I had hoped it would show (shorter-dated maturities gaining, or holding firm during Fed tightening). The EVV fund manager's willingness to go outside the stated discipline (as warned this summer) is often frowned upon.

PHF a "good measure," but I'm going to replace with more of a benchmark.

Keene Little : 12/28/2005 3:33:14 PM

Thanks Jonathan. Whoever did that comedy routine made it much easier for us men to get a "feel" for what childbirth would feel like. My wife thought it was highly accurate.

Jeff Bailey : 12/28/2005 3:32:33 PM

Intra-day recap 10-year YIELD/dollar ... stocks seemed to find selling yesterday as the 2-year and 10-year yields converged.

Today, the majors struggled early, and I'd say any bullishness is still tentative.

I'm making note that morning LOW yield on the 10-year came at WEEKLY S1, but yield rose (selling in the bond, perhaps widening the 2 to 10 spread) with 10-year YIELD up 3.7 bp to close right at today's DAILY R1.

QQQQ perhaps the best tie to WEEKLY S1 action, but buyers have not shown the will to follow with a DAILY R1, but DAILY Pivot ($41.23) marks session high at this point.

Early thoughts here are that equities do tend to firm, if not slightly bullish, as if comforted by any thought that curve won't invert.

CRB Index posts a nice gain today, as do energy prices. Perhaps they too a bit concerned about yield curve action. If inversion were to signal slowing economy.

Jonathan Levinson : 12/28/2005 3:29:30 PM

Volume breadth +1.9:1 on the NYSE, +1.35:1 on the Nasdaq here.

Jane Fox : 12/28/2005 3:27:35 PM

Bullishness is breaking out all over.

Jonathan Levinson : 12/28/2005 3:24:30 PM

Keene, I think that was Carol Burnett, trying to convey to experience of childbirth to a male audience.

Jonathan Levinson : 12/28/2005 3:23:41 PM

QQQQ's 60 min cycle is in an upphase that kicked off from the session low, but the 30 min cycle is still stalled at its midpoint. So far, there's little indication that this is going to be an impulsive bounce, but there are still potentially many hours left for the bulls to get it going. The 72 SMA is down at 41.02, above which the intraday bias will remain bullish. However, 41.20 has yet to be tested and remains key overhead resistance. Link

Jane Fox : 12/28/2005 3:22:25 PM

TICKS +1000 again.

Jane Fox : 12/28/2005 3:22:12 PM

TICKS +800

Jeff Bailey : 12/28/2005 3:19:41 PM

Top Energy Headlines ... Nymex Crude Tops $60 on Iran Output Cut Call

Nymex Gasoline jump 8cents on Supply Concerns

Jeff Bailey : 12/28/2005 3:14:04 PM

03:00 Internals found at this Link

Jeff Bailey : 12/28/2005 3:04:20 PM

That's what I've got to think Steve. Dollar strength.... foreign banks/investors buying longer-dated Treasuries.... low inflation.... has curve flattening.

Jeff Bailey : 12/28/2005 3:03:21 PM

03:00 Market Watch found at this Link

Jane Fox : 12/28/2005 3:01:46 PM

TICKS range so far has been a bullish +1023 to -409.

Jeff Bailey : 12/28/2005 3:00:57 PM

U.S. Dollar Index (dx00y) 91.28 +0.20% (30-minute delayed) ... still at DAILY R1. Overnight, the dx00y did kiss WEEKLY Pivot 90.52.

Jeff Bailey : 12/28/2005 2:59:25 PM

10-year YIELD ($TNX.X) up 3.9 bp at 4.380% ... gets the trade at DAILY R1.

DIA $108.00

SPX 1,260.08, QQQQ $41.11

Jonathan Levinson : 12/28/2005 2:58:44 PM

Session low for ten year notes at 109 9/16, TNX now up 3.9 bps at 4.38% approaching the cash close.

Jeff Bailey : 12/28/2005 2:47:51 PM

QQQQ $41.09 +0.12% ... only equity-based index in my pivot matrix that hasn't traded WEEKLY S1 ($40.86). Came close at $40.87 this morning.

Jonathan Levinson : 12/28/2005 2:39:03 PM

Volume breadth is up to +1.8:1 on the NYSE, +1.45:1 on the Nasdaq.

Jonathan Levinson : 12/28/2005 2:38:22 PM

All but the earliest sellers this morning are underwater as QQQQ retraces all of the day's losses, back to +.10 at 41.14. The short cycle is overbought and should be maxxed out by 41.20 if tested. The current spike is printing red paintbars to denote the 30 min keltner channel breach, but that cycle has plenty of room to run higher before even approaching overbought. Link 41.05 support is key for the bulls, 41.20 resistance for the bears.

Jeff Bailey : 12/28/2005 2:38:08 PM

Nice little bursh of 400,000 shares from $107.99-$108.10 helped lift the DIA from WEEKLY S1. It was about that much that had the DIA falling below WEEKLY Pivot yesterday.

Jeff Bailey : 12/28/2005 2:35:00 PM

In today's 4-week bill auction, I would note that there were no foreign and international monetary authority tenders.

Jonathan Levinson : 12/28/2005 2:34:16 PM

Crude oil finished +1.65 at 59.80, off a high of 60.40. Natgas lost .015 to close at 11.005, off a high of 11.83.

Jeff Bailey : 12/28/2005 2:33:30 PM

U.S. Dollar Index (dx00y) 91.28 +0.20% (30-min. delayed) ... gets the trade at DAILY R1/MONTHLY Pivot correlation.

Jeff Bailey : 12/28/2005 2:32:17 PM

IBM $83.28 +0.34% .... eases back into WEEKLY Pivot here after morning high of $83.57.

Yesterday's gains stopped at WEEKLY R1 ($84.44), so did the DIA's.

DIA $108.10 +0.32% ...

Jonathan Levinson : 12/28/2005 2:23:09 PM

QQQQ tests 41.10 resistance here, the short cycle running higher but not yet overbought, the 30 min channel ticking up. Volume is picking up but remains well below average. 41.10-41.20 remains the key hurdle to turn the Qs around from this week's weakness. Link

Jonathan Levinson : 12/28/2005 2:16:17 PM

Session low for 10 year nots here at 109 19/32, TNX up 3.3 bps to 4.374%.

Jeff Bailey : 12/28/2005 2:14:27 PM

02:00 Internals found at this Link

Jane Fox : 12/28/2005 2:14:02 PM

VIX is making a bullish new daily low so I would be careful if short. Heck today I would be careful if long as well, this range is ridiculous.

Jeff Bailey : 12/28/2005 2:05:42 PM

02:00 Market Watch found at this Link

Jeff Bailey : 12/28/2005 2:03:01 PM

Matrix Service (MTRX) alert $9.36 +5.64% ... see 100 contracts trade the offer of $4.80 at 01:33 PM EST in the May $5.00 Calls (QXW-EA). 100 with no OI.

$5.00 + 4.80 = $9.80.

Seeing some sign of put selling too. Feb $7.50 (50:78) $0.30.

Jonathan Levinson : 12/28/2005 1:56:22 PM

Volume breadth climbs to +1.6:1 on the NYSE, -1.1:1 on the Nasdaq.

Jane Fox : 12/28/2005 1:54:21 PM

Well there has been no new daily highs yet but at least I think they have put away the chain saw (reference to the fact that I was sitting on a limb by saying I thought daily highs would break).

Jonathan Levinson : 12/28/2005 1:49:53 PM

QQQQ ticks above the 72 SMA here on a small burst of volume, the first break above the declining average since this morning's failed bounce. The short cycle is ticking up from its flatline, and because the 60 min cycle is so deeply oversold, there's room to run if the bulls can put something together from here- a break of 41.10 is the first sign of trouble for bears, and above 41.20, the bullish break would be confirmed. Link

Jeff Bailey : 12/28/2005 1:47:20 PM

Valero (VLO) $52.19 +2.53% ... Urrrrrgh! Stock caught a real nice bid (or seller vanished from the looks of volume) when unleaded ticked $1.60 didn't it?

I missed the profile.

Jane Fox : 12/28/2005 1:43:28 PM

That TICK reading of +1000 brought the AD volume to new daily highs but not the AD line.

Jeff Bailey : 12/28/2005 1:42:14 PM

I see some news at the 11:45 AM time stamp that the Bank of Canada bought back C$215M of 5.75%, Sept. 2006 Bonds.

Italy bought back EUR3 billion of Treasury Bonds.

Jane Fox : 12/28/2005 1:40:29 PM

Oh my gosh TICKS +1000 what the heck.

Jeff Bailey : 12/28/2005 1:40:22 PM

U.S. Dollar Index (dx00y) 91.14 +0.05% ... really jumped from the 90.75 level at about 11:45 AM EST.

Jane Fox : 12/28/2005 1:40:17 PM

Then out of the blue we get a TICK +800

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

Ten year note yields hold a 2.5 bp gain at 4.364%, retracing most of yesterday's decline but not yet close to the 4.4% high. The 10-day stochastic has grown oversold, but it will take a break of 4.4% to generate the first sign of trouble for the downphase. Link

Jeff Bailey : 12/28/2005 1:32:48 PM

EIA saying the national average retail price of regular gasoline fell 1.4 cents to $2.197 a gallon in the week ended Monday.

The decline, following two weeks of gains, left gasoline prices at 40.6c above a year ago.

The EIA said prices in the Central Atlantic region of the East Coast gained 1.1c in the week, to $2.269 a gallon, the highest level since November 14, while prices were lower in all other regions.

EIA's gasoline price survey is collected through a telephone sampling of approximately 900 retail gasoline outlets.

Jonathan Levinson : 12/28/2005 1:26:57 PM

Volume breadth has declined to +1.3:1 on the NYSE, -1.85:1 on the Nasdaq.

Jonathan Levinson : 12/28/2005 1:20:17 PM

Foreign central banks purchased 1.63B of today's 10B 4-week bill auction. Half of the total was auctioned at the 3.47% high rate, the yield 3.528%. 2.69 bids were received for each awarded.

Jeff Bailey : 12/28/2005 1:19:15 PM

Matrix Service (MTRX) alert $9.37 +5.75% ... see 584 contracts traded today in the MTRX May $10 Call (QXW-EB) at AvgOHLC $1.63.

These were not there an hour ago.

Jeff Bailey : 12/28/2005 1:15:14 PM

01:00 Internals found at this Link

Jonathan Levinson : 12/28/2005 1:08:19 PM

QQQQ's intraday trendline support held for the 3rd time, and price returns to 41.00. The 72 SMA is down to 41.02, and the wavelet has turned up. 30 min channel resistance is above at 41.10, which lines up with price confluence as well. Above that level, we'll have an upturn in the 30 min cycle chhannel for the first time since last week. Link

Jeff Bailey : 12/28/2005 1:04:18 PM

01:00 Market Watch found at this Link

Jeff Bailey : 12/28/2005 1:01:46 PM

Valero (VLO) $51.68 +1.53% ... getting more of a bounce from DAILY Pivot ($51.25) and WEEKLY S1 ($51.32) now.

Thinking the bid for unleaded (refined product) provides the catalyst.

Jeff Bailey : 12/28/2005 12:59:23 PM

National Weather Service forecast into Friday at this Link

Jeff Bailey : 12/28/2005 12:58:37 PM

Feb. Nat. Gas (ng06f) $11.26 +0.57% (30-min. delayed) ... I should note that this contract has exceeded its PnF bearish vertical count of $11.40.

The bar chart's head/should top (head $15.78), (neckline $13.46) objective of $11.138 achieved yesterday.

If anything... short of this commodity should be locking in some gains.

I want to follow with a PnF chart, benchmark my APA trades. Get a feel for things into EIA data again.

Jeff Bailey : 12/28/2005 12:50:34 PM

Feb. Heating Oil (ho06g) $1.70 +1.79% ... PnF chart at this Link ... deemed "the toughest energy trade around" by many traders. So many dynamics to measure (refining, weather, crude supply/demand).

Jonathan Levinson : 12/28/2005 12:47:45 PM

Volume breadth is down to +1.25:1 on the NYSE, holding at -1.5:1 on the Nasdaq.

Jonathan Levinson : 12/28/2005 12:46:26 PM

QQQQ testing rising intraday support connecting the lows: Link The short cycle upphase has died after a dismal run.

Jeff Bailey : 12/28/2005 12:42:16 PM

Feb. Crude Oil (cl06g) $59.25 +1.87% (30-min delayed) ... session high has been $59.30. PnF chart at this Link

Feb. Unleaded (hu06g) $1.61 +3.87% now.(see 12:05:44)

Jonathan Levinson : 12/28/2005 12:20:07 PM

Session high for crude oil here, +1.3 at 59.45. Link

Jeff Bailey : 12/28/2005 12:17:28 PM

12:00 Internals found at this Link

Jeff Bailey : 12/28/2005 12:10:07 PM

12:00 Market Watch found at this Link

Jeff Bailey : 12/28/2005 12:05:44 PM

Feb. Unleaded (hu06g) $1.60 +3.22% ... PnF chart at this Link ... I had placed "GREEN ?" up to $1.59 just prior to trade at $1.60.

Jeff Bailey : 12/28/2005 12:03:28 PM

Valero Energy (VLO) $51.35 +0.88% Link

Jeff Bailey : 12/28/2005 12:01:39 PM

February Unleaded (hu06g) $1.60 +3.22% (30-min delayed) .... gets a double top buy signal here. Was working on a PnF chart of this contract based on trader's commentary that warmer weather may have increased demand. (more driving)

Jonathan Levinson : 12/28/2005 12:02:01 PM

Yes. The "72 on 3". On a futures chart, I use it with a 100-tick chart and it tends to perform almost identically.

Jonathan Levinson : 12/28/2005 11:52:25 AM

Just like yesterday, the short cycle upphase off QQQQ's intraday low is far from setting the market on fire, trading sideways/up for the past hour and failing to climb back above the 72 SMA at 41.07. This is my benchmark for the intraday cycles, bullish above and bearish below. The 30 min cycle whipsawed from the morning's bounce, just as it did yesterday, while the 60 min cycle has declined to the point of being oversold but not yet showing any sign of turning up. If the low holds on the next short cycle dip, that will be the first indication of strengh in the longer intraday cycles. Link

Jonathan Levinson : 12/28/2005 11:43:18 AM

Volume breadth recovers to +1.75:1 on the NYSE, -1.5:1 on the Nasdaq.

Jonathan Levinson : 12/28/2005 11:42:46 AM

Headlines:

GERMANY'S DAX LITTLE CHANGED AT 5,447 AS TRADE ENDS

FRANCE'S CAC 40 SLIPS 0.3% TO 4,756

U.K.'S FTSE 100 ADVANCES 0.5% TO 5,622

Jeff Bailey : 12/28/2005 11:36:52 AM

Westar Energy (WR) $22.00 -0.99% Link ... session lows. Kansas regulators OK $3M rate increase.

Westar engages in the generation, transmission, and distribution of electricity in Kansas. The company provides electricity to residential, commercial, and industrial customers in the cities of Topeka, Lawrence, Manhattan, Salina.....

Jeff Bailey : 12/28/2005 11:32:11 AM

Current OPEN MM Profiles found at this Link ... The PFE Jan 25 Call (PFE-AE) were closed out at the bid of $0.10.

Jonathan Levinson : 12/28/2005 11:23:27 AM

Crude oil trades .1 off the intraday high, +.95 at 59.10. 100 tick chart at this Link . Note the red paintbars cluttering the chart on the persistent upside keltner35 breach. Those paintbars are calibrated to my QQQQ settings- on QQQQ, that breach would be a high-likelihood fade for a quick correction. However, QM trades different cycles, and I'd be inclined to ignore those red splashes. Thursday's high is being tested here at the highs.

Jeff Bailey : 12/28/2005 11:21:21 AM

AMR Corp. (AMR) $21.77 -4.13% ... getting "whacked" for a change.

Delta Air Lines' (DALRQ) $0.79 +3.94% pilots are voting on whether to approve a cost-cutting deal hammered out between union officials and Delta management earlier this month. Delta Air Lines is currently in bankruptcy.

Jeff Bailey : 12/28/2005 11:14:51 AM

11:00 Internals found at this Link

Jeff Bailey : 12/28/2005 11:05:57 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 12/28/2005 11:03:16 AM

Volume breadth is currently +1.35:1 on the NYSE, -2:1 on the Nasdaq.

Jeff Bailey : 12/28/2005 11:01:32 AM

Note: Today, starting with the 10:00 AM EST U.S. Market Watch, I did add the shorter-term 13-week note YIELD ($IRX.X). Without a 2-year YIELD, we can still probably "eyeball" at any given second what the curve looks like.

Jeff Bailey : 12/28/2005 10:57:23 AM

Per 10:50:31 ... The 10-year yield (TNX.X) did edge above its DAILY Pivot earlier this morning, and without seeing a 2-year YIELD, I'm thinking we saw some "buy side" for equities from those traders that may have a bearish scenario based on yield curve inversion.

Now, TNX.X up 0.9 bp at 4.348% (43.48 in matrix) and back below DAILY Pivot.

Observation ... None of the equity-based indices have touched their DAILY Pivot.

OK ... a little feel for how the 2 to 10-year curve may be in play and impacting things.

Jonathan Levinson : 12/28/2005 10:55:14 AM

I'd consider a break below last week's low to be decisive- that is, I'd expect it stay below 41 on a bounce after such a break, given that the weekly is due for a decline as well.

Jeff Bailey : 12/28/2005 10:52:53 AM

Pivot Matrix for today at this Link ... I'll make some comments regarding the 10-year YIELD (TNX.X) and yesterday's 2-year / 10-year converging.

I've NEVER been able to find a 2-year yield, only the futures. Still, we understand the buying in the longer-dated maturities, keeping yield low, relative to the steady pace of rate hikes from the Fed, that has the shorter dated yields rising.

Jonathan Levinson : 12/28/2005 10:51:18 AM

The open interest put to call ratio at QQQQ 41 still favors support at 41 by a margin of 339:133. There still remain weeks until January opex, however, and the risk to bulls is that those 41 put writers will decide to take risk off the table, either by buying to cover or by shorting QQQQ or NQ. A break of last week's low could be enough to do it- pricewise, at least, it would be a very unbullish development if that low were violated. In the meantime, 41 remains a key support level, and has not been decisvely broken yet. Here's a 15 min 10 day chart of QQQQ: Link

Jeff Bailey : 12/28/2005 10:46:33 AM

Bullish swing trade call stopped alert on the Pfizer PFE Jan. $25 Calls (PFE-AE) at the bid of $0.10.

PFE $23.63 (unch) ... Never really got much of a further "pop" after the pullback to $24.00, and I haven't seen much option activity to suggest much above $25 by expiration.

Jonathan Levinson : 12/28/2005 10:44:52 AM

QQQQ takes out yesterday's low here, with 30/60 min channel support down to 40.90: Link

Jeff Bailey : 12/28/2005 10:43:48 AM

Iranian Oil Minister Kazem Vaziri Hamaneh said OPEC should consider cutting production by 1 million barrels a day when it meets January 31.

Jeff Bailey : 12/28/2005 10:40:20 AM

Dow Diamonds (DIA) $107.79 +0.03% ... a bit defensive, even thought positive from the open.

Three correlations at the $107.18 area today. DAILY S1, WEEKLY S2 and MONTHLY Pivot.

All these sell program premiums this morning have me feeling defensive to that level.

Jonathan Levinson : 12/28/2005 10:37:48 AM

From Marketwatch:

BOSTON (MarketWatch) - The National Association of Securities Dealers issued an Investor Alert Wednesday warning investors to be wary of stock scams that purport to capitalize on the fight against Bird Flu or Avian Influenza. One example includes a fax stating a company "has the solution for tracking and containing the Bird Flu virus." The fax claimed the stock was "positioned to gain 250% or more Short-Term." The alert warns investors not to rely solely on the information in unsolicited faxes, emails or text messages because they often come from corporate insiders paid to promote the stock. "This is an age-old pump-and-dump scheme with a brand new disguise," NASD Vice President of Investor Education John Gannon said in a statement.

Jeff Bailey : 12/28/2005 10:37:11 AM

Dow breadth positive at 21:9. HD, MMM, WMT and XOM all up 0.60%. UTX and VZ -0.70%

Jeff Bailey : 12/28/2005 10:35:47 AM

There seems to be an effort among sellers to keep the DIA/INDU at/below WEEKLY S1 to this point.

Jeff Bailey : 12/28/2005 10:35:02 AM

Sell Program Premium ... DIA $107.83, SPX 1,258.43, QQQQ $41.07.

Jonathan Levinson : 12/28/2005 10:34:43 AM

Feb. gold hit a high of 520.30 and is down to 518.20, definitely too shallow a pullback to be considered a reversal. But the move was extended on the 50 tick chart, and a close below 508 would be a key reversal on a gravestone doji. In the meantime, the 72 SMA on the intraday chart is at 509 currently. Link

Jonathan Levinson : 12/28/2005 10:29:04 AM

QQQQ retesting the prior low here, volume breadth down to +1.25:1 for the Nasdaq. Link

Jonathan Levinson : 12/28/2005 10:23:06 AM

It's looking a lot iffier for the short cycle upphase here, with price flatlining below 41.18-.20 with a bearish divergence on the wavelet oscillator (middle oscillator pane): Link

Jeff Bailey : 12/28/2005 10:15:12 AM

10:00 Internals found at this Link

Jeff Bailey : 12/28/2005 10:06:04 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 12/28/2005 10:03:56 AM

Crude oil reopens lower, currently up .225 at 58.375.

Jonathan Levinson : 12/28/2005 10:02:57 AM

QQQQ's pattern since yesterday resembles the pattern of the past month in gold on the 60 min chart posted earlier. If so, then an equivalent move would be a gap above that 41.18-.20 resistance level. I assert no correlation other than the resemblance between the two charts. To invalidate the base, QQQQ bears will need a break below yesterday's low. Link

Jeff Bailey : 12/28/2005 10:02:40 AM

Dec. Expectations Index 91.6 vs. November's 88.4

Jeff Bailey : 12/28/2005 10:01:59 AM

Dec. Present Situation Index 121.5 vs. November's 113.2

Jeff Bailey : 12/28/2005 10:01:28 AM

Dec. Consumer Confidence 103.6 vs. November's 98.3.

Jonathan Levinson : 12/28/2005 10:00:53 AM

Headlines:

U.S. DEC. CONSUMER CONFIDENCE INDEX 103.6 VS.103.1 EXPECTED

U.S. DEC. CONSUMER EXPECTATIONS 91.6 VS. 88.4 NOV.

U.S. DEC. PRESENT SITUTATION INDEX 121.5 VS. 113.2 NOV.

U.S. CONSUMER CONFIDENCE HIGHEST SINCE AUGUST

Jonathan Levinson : 12/28/2005 9:59:51 AM

The Fed has 15B in expiring repos today, and has just announced a 9.25B overnight repo for a net 5.75B drain.

Jonathan Levinson : 12/28/2005 9:51:37 AM

Correction: The Petrol Report will be released tomorrow, and not today as would usually be scheduled.

Jonathan Levinson : 12/28/2005 9:50:32 AM

Awaiting Consumer Confidence at 10AM, followed by the EIA Petrol Report at 10:30.

Jonathan Levinson : 12/28/2005 9:49:56 AM

Volume breadth eases to +2.1:1 on the NYSE, +1.5:1 on the Nasdaq.

Jonathan Levinson : 12/28/2005 9:47:05 AM

QQQQ loses 72 SMA support here, but the short cycle still rises, only the wavelet topping for now: Link

Jeff Bailey : 12/28/2005 9:43:05 AM

Sell Program Premium ... DIA $107.94, SPX 1,259.56, QQQQ $41.11

Jeff Bailey : 12/28/2005 9:41:41 AM

Sell Program Premium ... DIA $108.00, SPX 1,259.95, QQQQ $41.14

Jeff Bailey : 12/28/2005 9:40:37 AM

Sell Program Premium ... DIA $108.02, SPX 1,260.01, QQQQ $41.15

Jonathan Levinson : 12/28/2005 9:38:09 AM

Stepping away for a few minutes.

Jonathan Levinson : 12/28/2005 9:38:00 AM

Crude oil finished the morning session +.25 at 58.40, natgas -.015 at 11.005.

Jeff Bailey : 12/28/2005 9:35:17 AM

Matrix Service (MTRX) alert $9.28 +4.74% Link ... Company said this morning that it was awarded about $10.3 million in an arbitration ruling on a contract dispute and will recover $10 million under the settlement of another contract dispute.

The company said it will receive the $10 million payment under the settlement agreement by February 20.

Jonathan Levinson : 12/28/2005 9:33:34 AM

Volume breadth +2.5:1 on the NYSE, +3.2:1 on the Nasdaq.

Jonathan Levinson : 12/28/2005 9:31:49 AM

QQQQ's 72 SMA is at 41.10, 30/60 min channel resistance 41.24-41.30, 30/60 min channel suppoirt 40.92-.95.

Jeff Bailey : 12/28/2005 9:28:30 AM

Whole Foods Market (WFMI) $75.44 Link ... Trades higher at $78.84 after Standard and Poors said it will be added to its benchmark S&P 500 Index.

Jeff Bailey : 12/28/2005 9:26:19 AM

Celgene (CELG) $57.48 Link ... marked higher at $61.40 pre-market after the company said it received FDA approval for its Revlimid drug to treat transfusion-dependent anemia, prompting the company to lower its full-year earnings forecast on possible higher pre-launch expenses.

The company also said Chief Executive John Jackson will retire in May and be exceeded by Sol J. Barer. CFO Robert Hugin will replace Barer as president and COO.

Celgene added that it will split its stock 2-for-1.

Jonathan Levinson : 12/28/2005 9:24:42 AM

IB reports that Nymex quotes are running intermittently due to issues at the exchange.

Jonathan Levinson : 12/28/2005 9:15:11 AM

Feb. gold is up 6.70 to 516.70, gapping above horizontal resistance of the past 2 weeks. On a 60 min chart, we see what is either a reverse h&s break (distorted because Prophet charts ignores the fact that Monday was a holiday), or a rising triangle break. Either way, it's a bullish break, and on a reverse h&s, the implied target would be as high as the 531 area if it plays out fully. Against this, however, is the potential bearish divergence if the daily cycle rolls over from here. A reversal today would be ugly for the bulls, but above 512-513, they get the benefit of the doubt. 60 min chart at this Link

Jonathan Levinson : 12/28/2005 8:52:22 AM

QQQQ's 30 min cycle is turning up again, just as it did yesterday. The difference this morning is that it's now doing so from oversold territory. The 60 min cycle still points south, but it's hesitating on the premarket strength. This remains a choppy view, within what's been a very choppy month. Yesterday, horizontal resistance from 41.18-.20 stopped all bounces all afternoon. That remains key upside resistance here. I will update the intraday SMA and keltner levels when they refresh at the opening bell.

Jonathan Levinson : 12/28/2005 8:31:31 AM

Ten year notes are at a session low of 109 19/32, retracing most of yesterday's gains and steepening the TNX against the 13-week rate- TNX is up 3.3 bps to 4.374%, IRX down .2 bps to 3.875%.

Jonathan Levinson : 12/28/2005 8:30:27 AM

From the MBA's website:

WASHINGTON, D.C. (December 28, 2005) The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 23. The Market Composite Index - a measure of mortgage loan application volume was 554.1 -- a decrease of 6.8 percent on a seasonally adjusted basis from 594.6 one week earlier. A holiday adjustment was included in the seasonally adjusted numbers to help account for the reduced application activity prior to the holiday weekend. On an unadjusted basis, the Index decreased 17.0 percent compared with the previous week and was up 3.1 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index decreased by 4.5 percent to 432.9 from 453.1 the previous week whereas the Refinance Index decreased by 11.2 percent to 1259.1 from 1418.1 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 7.1 percent to 824.9 from 888.2 the previous week, and the Government Index, which decreased 2.7 percent to 102.2 from 105.0 the previous week.

The four week moving average for the seasonally-adjusted Market Index is down 2.8 percent to 606.2 from 623.7. The four week moving average is down 2.3 percent to 464.8 from 475.6 for the Purchase Index while this average is down 3.8 percent to 1428.9 from 1485.2 for the Refinance Index.

The refinance share of mortgage activity decreased to 40.2 percent of total applications from 41.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 32.5 percent of total applications from 32.6 percent the previous week.

Jonathan Levinson : 12/28/2005 7:49:18 AM

Equities are up, ES trading 1267, NQ 1687, YM 10857, and QQQQ +.11 at 41.15. Gold is up 3.40 to 513.40, silver is up .053 to 8.859, ten year notes are down 3/32 to 109 47/64, crude oil is up .15 to 58.30 and natgas is down .015 to 11.005.

We await the 10AM release of Consumer Confidence, est. 102.5.

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