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Jeff Bailey : 1/13/2006 12:06:36 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+6.61 and set for program selling at $+4.64.

According to HL Camp & Company, OEX 584.25 -0.69% Link stocks that were sold the most during sell programs executed on Thursday: DD Link , GM Link , DELL Link , TXN Link , AVP Link , DOW Link , BAC Link , BUD Link , JPM Link , CL Link , S Link , ORCL Link , ABT Link , INTC Link , BDK Link , UTX Link , UPS Link , FDX Link , TYC Link , BMY Link , MDT Link , AA Link , MMM Link

For a list of NDX stocks, please feel free to click this Link

OI Technical Staff : 1/12/2006 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The Market Monitor has been archived.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 : 1/12/2006 8:28:21 PM

Boston Scientific (BSX) offer of $73 for Guidant (GDT) worth $36.50/share cash, $36.50/share stock.

Stock portion subject to a collar. Proposal's collar: if the average closing price of Boston Scientific's stock during a specified period is less than $23.62 a share, Guidant shareholders will receive 1.5453 Boston Scientific shares for each share of Guidant common stock.

If the average closing price of Boston Scientific's stock during the period is more than $28.86 a share, Guidant shareholders will receive 1.2647 Boston Scientific shares for each share of Guidant common stock.

If Guidant's board declares Boston Scientific's amended offer superior by 4:00 p.m. EST Friday, Boston Scientific's offer will remain open until close of business on Jan. 24.

Offer expires tomorrow at 04:00 PM EST unless Guidant's board declares offer superior to Johnson & Johnson offer.

Jeff Bailey : 1/12/2006 7:50:09 PM

BSX $24.88 x $25.32 on INET

GDT $69.77 x $70.65

Jeff Bailey : 1/12/2006 7:46:52 PM

Boston Scientific (BSX) $25.05 -1.41% ... Raises its bid to takeover Guidant (GDT) $70.40 -0.05% to $73 per share.

Jeff Bailey : 1/12/2006 5:55:51 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 1/12/2006 5:49:10 PM

Closing Internals found at this Link

Jeff Bailey : 1/12/2006 5:48:49 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... Swing trade put Alcan AL Mar $40 Put (AL-OH) at the tnen quoted offer of $1.30 (filled in personal account at $1.25). No stop and would look to close on any type of quarterly warning (see AA). Will monitor AA.

Raised bullish stop on shares of Chicago Board of Trade (BOT) to $88.00.

Jeff Bailey : 1/12/2006 4:40:13 PM

DIA went out at $109.77 -0.59% ... $109.69 here.

Jeff Bailey : 1/12/2006 4:39:23 PM

ym06h 11,007

Jeff Bailey : 1/12/2006 4:38:38 PM

IBM (IBM) $83.57 -0.71% ... marked lower at $82.67 after saying it has received formal notice from SEC of investigation over Q1 earnings, expensing of equity compensation.

Jeff Bailey : 1/12/2006 4:31:34 PM

03:12 PM EST Temperatures with February Nat. Gas and Heating Oil settlement at this Link

February Unleaded settled down $0.0146, or -0.84% at $1.7185.

February Crude Oil settled unchanged at $63.94.

National Weather Service Temperature forecast to Wednesday at this Link

Jeff Bailey : 1/12/2006 4:02:19 PM

ym06h 11,010

Jeff Bailey : 1/12/2006 4:01:43 PM

Buy Program Premium ... DIA $109.66, SPY $128.74

Jeff Bailey : 1/12/2006 3:56:08 PM

S&P Banks (BIX.X) 368.51 -0.86% ... probes WEEKLY Pivot.

Jeff Bailey : 1/12/2006 3:48:15 PM

Natural Gas Index (XNG.X) 414.73 -0.39% ... still well off its WEEKLY Pivot of 409.11

Jeff Bailey : 1/12/2006 3:46:57 PM

Apache Corp. (APA) $69.94 -1.49% ... was holding up "better" than CHK with its "oil kicker," but slips back to test WEEKLY Pivot.

Jonathan Levinson : 1/12/2006 3:46:40 PM

QQQQ's daily candle chart at this Link is somewhat distorted by today's bad tick to 42.50, but still shows the first signs of toppiness in the daily cycle. As noted earlier, this is the first session in which we've seen a lower low and lower high for the day, and also the first negative close of the rally.

Jeff Bailey : 1/12/2006 3:37:33 PM

Would have to think specialist sitting some bids in here.

Jeff Bailey : 1/12/2006 3:36:14 PM

Intercontinental Exchange (ICE) $43.91 -6.39% ... Breaks below DAILY S2 ($43.97)

Sets up for test of WEEKLY R2 ($43.30).

Jonathan Levinson : 1/12/2006 3:34:51 PM

Headlines:

3:32pm TYC TYCO INT'L BOARD VOTES TO BREAK COMPANY INTO 3 -- BLOOMBERG

3:33pm TYC TYCO HEALTHCARE, ELECTRONICS UNITS TO BE SPUN OFF -BLOOMBERG

3:34pm TYC TYCO CEO BREEN TO RUN REMAINING BUSINESSES -- BLOOMBERG

TYC -.09 at 30.25 here.

Jeff Bailey : 1/12/2006 3:24:30 PM

Chesapeake Energy (CHK) $32.25 -0.09% ... slips red.

Giving up WEEKLY Pivot $32.34 now.

Jonathan Levinson : 1/12/2006 3:22:37 PM

Volume breadth -2.1:1 on the NYSE, -1.4:1 on the Nasdaq.

Jeff Bailey : 1/12/2006 3:11:40 PM

03:00 Internals found at this Link

Jonathan Levinson : 1/12/2006 3:07:55 PM

QQQQ's short cycle indicators have been ticking up with so far little traction, the price putting in a possible reverse h&s bottom below 43. The longer intraday cycles continue to point south from their bearish divergent downphases, making the reverse h&s suspect. 43.10 QQQQ remains the number for bulls to beat. Link

Jeff Bailey : 1/12/2006 3:03:14 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 1/12/2006 2:58:55 PM

Session high for ten year notes here at 109 21/64, TNX down 4.6 bps to 4.412% approaching the cash close.

Jonathan Levinson : 1/12/2006 2:44:01 PM

Bullish wavelet divergence here for QQQQ from oversold territory, but volume is falling on this latest bounce. Below 43.10, the bounce remains suspect: Link

Jonathan Levinson : 1/12/2006 2:34:17 PM

Volume breadth -2.2:1 on the NYSE, -1.6:1 on the Nasdaq.

Jonathan Levinson : 1/12/2006 2:33:19 PM

The wavelet upturn has whipsawed lower, yesterday's low just broken, the first such violation since the rally started. We have a nominally lower high and now a lower low as well for the day. Link

Jeff Bailey : 1/12/2006 2:32:59 PM

Sell Program Premium ... DIA $109.58, SPX 1,285.82, QQQQ $42.86

Jonathan Levinson : 1/12/2006 2:27:00 PM

Crude oil is flat at 63.95, 4 minutes left in the day session. Natgas -.31 at 8.93.

Jonathan Levinson : 1/12/2006 2:19:56 PM

QQQQ trades below the 30 and 60 min channel bottoms, the first time in many sessions we have seen this strong a move to the downside. The short cycles are calling for a bounce, but because the 30/60 min channels have been trending and diverging for so long, it's dangerous to call a bottom on this break. Link

Jeff Bailey : 1/12/2006 2:15:38 PM

02:00 Internals found at this Link

Jonathan Levinson : 1/12/2006 2:10:08 PM

QQQQ loses 43.00 support, the short cycle indicators trending in oversold. Next key support is at yesterday's session low. Note that volume breadth isn't particularly weak at a mere -1.3:1 for the Nasdaq, nothing like the huge readings we saw on the way up. Link

Jeff Bailey : 1/12/2006 2:08:55 PM

Sell Program Premium ... DIA $109.70, SPX 1,287.42, QQQQ $42.97

Jeff Bailey : 1/12/2006 2:03:19 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 1/12/2006 2:03:07 PM

Headlines:

2:00pm U.S. YEAR-TO-DATE DEFICIT $119.3 BILLION

2:00pm U.S. DEC. FEDERAL OUTLAYS RISE TO RECORD $231 BILLION

2:00pm U.S. DEC. FEDERAL RECEIPTS $241.9 BLN

2:00pm U.S. DEC. BUDGET SURPLUS $11 BLN VS. $12 BLN EXPECTED

Jonathan Levinson : 1/12/2006 2:00:24 PM

43.00-43.10 QQQQ holds so far, a huge surge of volume coming in here: Link

Jonathan Levinson : 1/12/2006 1:56:33 PM

Volume breadth -1.68:1 on the NYSE, -1.02:1 on the Nasdaq.

Jonathan Levinson : 1/12/2006 1:55:35 PM

Back to find QQQQ losing the pivot and testing 30 min channel support. Link There's volume on the move, but the short cycle and wavelet downphases look bottomy. A break of 43.00 would set up an oversold trending move.

Jeff Bailey : 1/12/2006 1:47:58 PM

Chesapeake Energy (CHK) $32.50 +0.68% ...

Jeff Bailey : 1/12/2006 1:42:34 PM

February Nat. Gas (ng06g) alert $9.00 -2.57% ...

Jeff Bailey : 1/12/2006 1:41:54 PM

Midday News Update

The major averages show a mixed trade at the mid-point of today's session with Iran's defiance to step down and halt it nuclear program dampening buyers enthusiasm and placing a bid under crude oil with the February contract (cl06g) holding a $0.54 per barrel gain at $64.48. The February contract spiked as high as $65.05 intra-day.

U.S. Secretary of State Condoleezza Rice said Thursday that Iran has chosen a path of confrontation rather than cooperation with regard to its nuclear program.

Ms. Rice declined to say whether the U.N. Security Council would choose to try to punish Iran. "It is very clear that everyone believes a very important threshold has been cleared," she said.

Ms. Rice didn't spell out other possible moves against Iran. But she said she was "gravely concerned" about Iran's secret operations and "its dangerous defiance of the entire international community."

Economic data showed the U.S. trade deficit narrowed 5.8% to $64.21 billion in November from a record $68.13 billion in October as price of crude oil eased and exports grew. Economists expected a deficit of $66.50 billion. Separately, import prices fell 0.2% in December after dropping 1.8% in November, and the number of U.S. workers filing new claims for unemployment benefits climbs 17,000 last week, compared with economists' projection for rise of 24,000.

Dow component Johnson & Johnson (JNJ) $62.12 -0.60% slips lower by $0.38 a share after Guidant's (GDT) $70.44 (unch) accepted a sweetened $23.2 billion takeover bid from the company. Boston Scientific's (BSX) $25.14 -1.06% weakness again today suggests the battle isn't likely over.

Sirius Satellite Radio (SIRI) $6.31 +3.10% has reversed earlier loss with session low found at $5.91 after the company's CEO Mel Karmazin was reported to have bought 1 million shares of his company's common stock for $6.21, now owning 5.5 million shares directly and 2,973 in his 401(k) plan. The stock is currently today's most actively trade at 97 million.

Jonathan Levinson : 1/12/2006 1:37:12 PM

Stepping away for 10 mins.

Jeff Bailey : 1/12/2006 1:20:02 PM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 1/12/2006 1:18:48 PM

Volume breadth -1.25:1 on the NYSE, +1.47:1 on the Nasdaq.

Jeff Bailey : 1/12/2006 1:14:48 PM

01:00 Internals found at this Link

Jonathan Levinson : 1/12/2006 1:14:43 PM

QQQQ continues its light volume, rangeless drift despite what looks to me like very bullish news from the Treasury auction: Link

Jonathan Levinson : 1/12/2006 1:12:03 PM

Headline:

1:09pm TIPS AUCTION HAS ABOUT 60% INDIRECT BID

Jonathan Levinson : 1/12/2006 1:07:57 PM

Despite the very strong 59% participation by indirect bidders in the note auction, equities and treasuries hold flat from their pre-1PM levels.

Jonathan Levinson : 1/12/2006 1:04:08 PM

Foreign central banks took 5.34B of the 9B total of 10 year TIPS notes auctioned today. The high yield was 2.025%, the interest rate 2%, and the bid to cover ratio 1.85.

Jeff Bailey : 1/12/2006 1:02:08 PM

01:00 Market Watch found at this Link

Jeff Bailey : 1/12/2006 12:48:37 PM

Bullish swing trade raise stop alert ... for the Chicago Board of Trade (BOT) $89.00 -0.94% to $88.00.

Jeff Bailey : 1/12/2006 12:26:51 PM

Sell Program Premium ... DIA $109.98, SPX 1,291.59, QQQQ $43.21

Jeff Bailey : 1/12/2006 12:26:19 PM

Iran headlines ... German Foreign Minister saying talks with Iran have reached a "dead end."

Talks should be referred to UN.

EU's Solana doesn't rule out further Iran negotiations.

"From our point of view, the time has come for the U.N. Security Council to become involved," German Foreign Minister Frank-Walter Steinmeier said after meeting with his French and U.K. counterparts and the European Union's foreign policy chief.

Jonathan Levinson : 1/12/2006 12:18:05 PM

A word of caution here, in that there's a ten year TIPS auction to be completed at 1PM. This raises new cash, but we've been seeing foreign central banks buying most aggressively in longer-dated debt. It was in one of the recent ten year note auctions that foreign central banks set a record 56% participation level that set off a strong meltup in equities following the 1PM announcement. This sets up the possibility for a repeat today, or, on the other hand, also the possibility of a meltdown if foreign central banks fail to impress. Or, of course, a continuation of today's sideways drift. Just something to look out for in the next 45 minutes.

Jeff Bailey : 1/12/2006 12:14:25 PM

12:00 Internals found at this Link

Jeff Bailey : 1/12/2006 12:03:09 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 1/12/2006 11:58:48 AM

The current pause at the highs is the wavelet cycle topping out, again within the still-rising short cycle. This advance off the morning low has a corrective fee to it, but a break above the 43.30 line could light a fire under the short cycle. Direction today is still up for grabs. Link

Jonathan Levinson : 1/12/2006 11:48:16 AM

Volume breadth firms to -1.35:1 on the NYSE, +1.15:1 on the Nasdaq with price holding within today's narrow range.

Jonathan Levinson : 1/12/2006 11:43:44 AM

The Fed announces a 1.249B bill purchase, which is a permanent market operation adding liquidity to its dealers' reserves.

Jeff Bailey : 1/12/2006 11:40:29 AM

In my opinion, today's Nat. Gas report somewhat "neutral." As in.. not that bullish, but not a major sign of bearishness for the complex considering recent declines.

I'm not seeing what I'd consider signs of short covering in the complex, something I certainly would have expected in the past week.

Still, with the XNG.X 420.79 +1.06% set to test its 12/14/05 relative highs, the equity side of me can't be overly bearish at this point.

I'm thinking about going long a matching 100 shares against the CHK April $32.50 Puts at this point, or simply closing them out.

Tab Gilles : 1/12/2006 11:34:42 AM

DJ US Energy & Gas Index nearing resistance. Link Link

Jonathan Levinson : 1/12/2006 11:29:10 AM

Stepping away for a few minutes.

Jonathan Levinson : 1/12/2006 11:20:06 AM

Volume breadth holds its mixed readings, -1.45:1 on the NYSE, +1.15:1 on the Nasdaq.

Jeff Bailey : 1/12/2006 11:19:03 AM

Natural Gas Index (XNG.X) $420.09 +0.89% ... Highs of the month and moves above "conventional" WEEKLY R1 419.42.

CHK $32.83 +1.70% ...

Jeff Bailey : 1/12/2006 11:14:19 AM

11:00 Internals found at this Link

Jonathan Levinson : 1/12/2006 11:08:28 AM

This break has taken the wind out of the short cycle's sails, rolling over early here. 43.00-43.10 is key support, below which yesterday's low comes into view. So far during this rally, we have yet to see a violation of a previous-day-low. Link

Jeff Bailey : 1/12/2006 11:04:05 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 1/12/2006 10:56:20 AM

The CBOE put to call ratio (realtime) is .56 here, and its opening high was a meager .58- these are extreme low readings. With the QQV up 3.28% here, my interpretation/guess is that we're seeing call writers paying a premium to buy back short QQQQ 43 calls. However, volume-wise, the QQQQ Jan 43 puts are far outpacing the calls this morning, 35.4K to 2.4K according to IB.

Jeff Bailey : 1/12/2006 10:56:13 AM

Disk Drive Index (DDX.X) 161.32 +1.14% ... jolts from "conventional" DAILY Pivot (159.19) and WEEKLY R2 correlation (158.72) through DAILY R2.

Jonathan Levinson : 1/12/2006 10:51:45 AM

QQQQ breaks the previous high as the short cycle upphase begins to gain traction. 43.27-.30 is next confluence resistance below the 30/60 min channel and R2 line at 42.38-.39. Link

Jeff Bailey : 1/12/2006 10:43:09 AM

EIA Weekly Crude Oil, Gasoline, Distillate and Nat. Gas Table found at this Link

Jeff Bailey : 1/12/2006 10:35:51 AM

Sell Program Premium ... DIA $110.05, SPX 1,290.83, QQQQ $43.10

Jonathan Levinson : 1/12/2006 10:34:27 AM

Feb. natgas is up .045 here at 9.29. 30-tick chart at this Link

Jeff Bailey : 1/12/2006 10:35:20 AM

Chesapeake Energy (CHK) $32.55 +0.83% ... DAILY Pivot $32.71 found sellers early on with session high of $32.72.

Weekly Pivot $32.34 untested today with session low of $32.36.

Jeff Bailey : 1/12/2006 10:31:16 AM

EIA Weekly Regional Natural Gas Storage Report at this Link

Jonathan Levinson : 1/12/2006 10:30:16 AM

From the EIA website:

Working gas in storage was 2,621 Bcf as of Friday, January 6, 2006, according to EIA estimates. This represents a net decline of 20 Bcf from the previous week. Stocks were 2 Bcf less than last year at this time and 276 Bcf above the 5-year average of 2,345 Bcf. In the East Region, stocks were 122 Bcf above the 5-year average following net withdrawals of 29 Bcf. Stocks in the Producing Region were 95 Bcf above the 5-year average of 665 Bcf after a net injection of 11 Bcf. Stocks in the West Region were 60 Bcf above the 5-year average after a net drawdown of 2 Bcf. At 2,621 Bcf, total working gas is within the 5-year historical range.

Jonathan Levinson : 1/12/2006 10:28:53 AM

The shape of the short cycle indicators suggests that 43.20 QQQQ resistance will get challenged here. A failure would be quite bearish, but it's been a long time since a short cycle upturn failed to break upside resistance. Link

Jonathan Levinson : 1/12/2006 10:24:31 AM

Volume breadth is up to -1.45:1 on the NYSE, +1.05:1 on the Nasdaq.

Jonathan Levinson : 1/12/2006 10:21:12 AM

Yes. Here are the levels for today: Link

Jeff Bailey : 1/12/2006 10:19:41 AM

QQQQ $43.13 -0.18% ... Jonathan. Are you still using those "Woody's Pivots?"

Jonathan Levinson : 1/12/2006 10:19:03 AM

Session high for ten year notes, TNX -3 bps at 4.428%. IRX holds a 1.5 bp gain at 4.207%, the yield curve flatter still.

Marc Eckelberry : 1/12/2006 10:17:44 AM

INTC up 1.1%. Bullish again above 26.35. Next R is 26.66.

Jeff Bailey : 1/12/2006 10:17:33 AM

10:00 Internals found at this Link

Yesterday's Internals found at this Link

Jonathan Levinson : 1/12/2006 10:14:16 AM

QQQQ is working on the pivot from below, at confluence from yesterday at 43.20. A failure here will have a rough head and shoulders feel to it, and should see the 30 min channel roll over on a break of the 43.10 support level. Link

Tab Gilles : 1/12/2006 10:07:10 AM

Eaton Vance Limited Duration Fund (EVV) Yesterday I posted a price objective on EVV of between $17.50-$17.75. Looking at today's chart and candle formation...I would take some profits here and set a trailing stop at the 10-ema. Link

Jeff Bailey : 1/12/2006 10:03:26 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 1/12/2006 10:02:32 AM

Headlines:

10:00am CEOS 'CONFIDENTLY OPTIMISTIC,' CONFERENCE BOARD SAYS

10:00am U.S. Q4 CEO CONFIDENCE INDEX RISES TO 56 VS. 50 Q3

Jonathan Levinson : 1/12/2006 9:57:48 AM

Deleting a "bad print" to 42.75 QQQQ. Ctrl-shift-L for Quotetracker users. Link

Jonathan Levinson : 1/12/2006 9:56:58 AM

A 7B overnight repo announced by the Fed results in a 3B net add for the day.

Linda Piazza : 1/12/2006 9:51:56 AM

I'm just stopping in for a few minutes and wanted to make a couple of observations to keep in mind. The TRAN is dropping heavily this morning. It has been coiling in a big triangle on top of its climb, with that triangle still looking a bit neutral, and with bottom support at about 4126-4128, where its support converges with another support line. The TRAN is currently at 60-minute Keltner support, so it may find support ahead of the test of that triangle's bottom line, but if not, watch the TRAN's behavior carefully as it approaches that 4126-4128 support. The TRAN sometimes overruns targets, so a minimal breakdown wouldn't give strong confidence that the TRAN was breaking to the downside, but a straight-down plunge through it would make the day look more bearish. Then watch 4070 or so for next support.

The SOX currently tests Keltner support (532.43 on 30-minute closes) that has held it up since January 4, with next support at 527.90 below that. Until the SOX breaks through those on 30-minute closes and possibly rises to retest those Keltner lines and fails at them, the trend has not changed. Unfortunately. I've got some bear call spreads that are going to be in trouble.

I'm off again. Have a great trading day, everyone.

Jonathan Levinson : 1/12/2006 9:51:05 AM

The Fed has 14B in 14-day repos expiring today and has so far announced a 10B 14-day repo, leaving 4B to address with the upcoming short term announcement.

Jeff Bailey : 1/12/2006 9:50:24 AM

Swing trade put alert ... for two (2) of the Alcan AL March $40 Puts (ALOH) at the offer of $1.30.

AL $41.88 -0.94%

Jonathan Levinson : 1/12/2006 9:44:13 AM

Volume breadth is now negative for both exchanges, -1.45:1 on the NYSE, -1.2:1 on the Nasdaq.

Tab Gilles : 1/12/2006 9:38:41 AM

Murphy Oil (MUR) Link Link Link

Jonathan Levinson : 1/12/2006 9:38:05 AM

QQQQ's short cycle downphase looks like it could have another half hour left to run before maxxing out, but the wavelet is already bottomy. 43.00-43.10 remains critical support here. Link

Jonathan Levinson : 1/12/2006 9:33:48 AM

Volume breadth is -1.26:1 on the NYSE, +1.25:1 on the Nasdaq at the open.

Jane Fox : 1/12/2006 9:32:48 AM

All markets open within their respective previous day ranges.

Jonathan Levinson : 1/12/2006 9:32:19 AM

QQQQ's 72 SMA is at 43.20 , 30/60 channel support is at 43.00-.10 , 30/60 channel resistance is at 43.40 .

Jane Fox : 1/12/2006 9:14:10 AM

DAteline WSJ Guidant Corp. accepted a sweetened $23.2 billion takeover offer from Johnson & Johnson but left the door open for rival Boston Scientific Corp., setting the stage for a possible bidding war.

The new deal pumps $1.7 billion of cash into a deal that just two months ago J&J nearly abandoned.

The agreement has a value of $68.06 for each Guidant share, up from J&J's last offer, which was valued at around $64. The boards of both companies unanimously approved the agreement, and Guidant recommended that its shareholders ratify it at a Jan. 31 shareholder meeting.

Jane Fox : 1/12/2006 9:13:14 AM

Dateline WSJ The U.S. trade deficit narrowed more than expected in November as the price of crude oil eased, exports grew and the deficit with China declined for the first time in seven months.

The Commerce Department said Thursday that the U.S. deficit in international trade of goods and services fell 5.8% to $64.21 billion from a revised record high of $68.13 billion in October. October's shortfall was previously estimated at $68.89 billion. Economists polled by Dow Jones Newswires and CNBC had forecast, on average, a November deficit of $66.50 billion.

Jonathan Levinson : 1/12/2006 9:03:25 AM

QQQQ's 30 and 60 min cycles are in downphases from overbought extremes and on pretty steep bearish divergences. These indicators look vastly more bearish than this market feels. Opposed to them is the strongest daily cycle upphase I have seen in a long time, and it has let to reach overbought territory. While the intraday cycles suggest an ugly decline ahead, the daily cycle suggests that bears will want to see a blowoff top first. Hopefully the channel and SMA levels will offer some insight when the evening prints get erased from my chart at the opening bell.

Jonathan Levinson : 1/12/2006 8:33:13 AM

Little change from either equities or treasuries following the data, QQQQ still -.07 at 43.14, TNX -1.8 bps at 4.44%.

Jonathan Levinson : 1/12/2006 8:31:56 AM

Headlines:

U.S. WEEKLY INITIAL JOBLESS CLAIMS RISE 17,000 TO 309,000

U.S. 4-WK AVG. INITIAL JOBLESS CLAIMS FALL 5,500 TO 311,500

U.S. CONTINUING JOBLESS CLAIMS RISE 12,000 TO 2.7M

U.S. DEC. IMPORT PRICE INDEX DOWN 0.2% VS 0.1% RISE EXPECTED

U.S. DEC. EXPORT PRICE INDEX RISES 0.1%

U.S. DEC. IMPORT PRICES EX-PETROLEUM UNCHANGED

U.S. NOV. TRADE GAP NARROWS 5.8% TO $64.2 BLN

U.S. DEC. IMPORTED NATURAL GAS PRICES FALL 4.7%

U.S. NOV. TRADE GAP BELOW CONSENSUS OF $66.2 BLN

U.S. DEC. NONFUEL IMPORTED INDUSTRIAL SUPPLY PRICES UP 0.8%

U.S. NOV. TRADE GAP WITH CHINA $18.5 BLN VS $16.7 YR EARLIER

Jonathan Levinson : 1/12/2006 8:24:05 AM

Bonds open in the green, but the yield curve is flatter again, TNX -2 bps to 4.438% and IRX +.3 bps to 4.195% as we await the 8:30 data.

Jonathan Levinson : 1/12/2006 8:10:11 AM

FRANKFURT, Germany (AP) -- The European Central Bank held its key interest rate steady on Thursday in a move widely expected by analysts.

The bank had raised rates from 2 percent to 2.25 percent in December, the first upward swing in five years, and the ECB's Governing Council had hinted that it wants to see the effect of that move before deciding on another.

Link

Jonathan Levinson : 1/12/2006 8:07:29 AM

Equities are down, ES trading 1297.5, NQ 1767, YM 11058 and QQQQ -.04 at 43.17. Gold is down .40 to 549.60, silver +.007 at 9.071, ten year notes +7/64 at 109 7/46, crude is up .80 at a session high of 64.75 and natgas is +.03 at 9.27.

We await the 8:30 releases of Import Prices ex-oil and Export Prices ex-ag, prior -.2% and -.9% respectively, Initial Claims, est. 320K, the Trade Balance -66B. At 2PM, we get the Treasury Budget, est. +4.2B.

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