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OI Technical Staff : 6/16/2006 9:59:59 PM

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Tab Gilles : 6/16/2006 9:41:22 PM

Pickens predicting $80 oil Link

Jeff Bailey : 6/16/2006 6:46:21 PM

Have a wonderful weekend!

Happy Father's Day on Sunday.

Jeff Bailey : 6/16/2006 6:43:15 PM

Current OPEN MM Profiles found at this Link

Today's Activity

I did not profile any trades today.

The NAKED Frontier Oil FTO Jun $65 Calls (FTO-FM) expired worthless today, so we keep the $180.00.

Month-to-Date Stock/Option Trade Blotter of CLOSED Trades found at this Link

Jeff Bailey : 6/16/2006 6:17:34 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 6/16/2006 5:59:09 PM

Closing Internals found at this Link

Tab Gilles : 6/16/2006 4:25:33 PM

Oil guru T. Boone Pickens was on Bloomberg radio earlier today. Link In an interview he called for oil to hit $80 by years end. He believes that the world has maxed out at 85 million barrel per day, that it can pump out of its wells. He believes that older wells are going dry and that demand will continue to rise. He also stated that bioidiesel and ethanol will help somewhat. Like Suncor, Canadian tar sand stock. Link

Jane Fox : 6/16/2006 4:15:17 PM

There are not major economic reports due for Monday. Have a great weekend.

Jeff Bailey : 6/16/2006 4:10:36 PM

Sell Program Premium ... SPY $124.90

Jeff Bailey : 6/16/2006 4:04:47 PM

Japan's Parliament Session Ends; PM Koizumi Successor Looms

DJ- Japan's parliament effectively wrapped up its current session Friday, leaving the nation to ponder who will win Junichiro Koizumi's endorsement to succeed him as prime minister.

The Diet officially closes for the summer on Sunday, but no more parliamentary sessions are planned before then. The next session is expected to begin in September - the month that Koizumi plans to step down.

Koizumi's Liberal Democratic Party has a powerful majority in the lower house, and whoever the party elects as its president is virtually assured of being named its candidate for prime minister.

Four senior lawmakers - Chief Cabinet Secretary Shinzo Abe, Foreign Minister Taro Aso, Finance Minister Sadakazu Tanigaki and former top government spokesman Yasuo Fukuda - are expected to compete for the party leadership.

"It will be a severe power struggle," Koizumi told a meeting of LDP lawmakers at lower house Friday. "I hope all candidates will fight openly and squarely and choose a good (party) president and prime minister."

Koizumi, who hand-picked most ministers in his Cabinet, hasn't announced whom he plans to endorse as his successor, saying only that he would prefer someone who can continue his reform platform.

Polls indicate that Abe is the favorite among his party peers as well as with the public. Fukuda is considered a strong runner-up, while Aso and Tanigaki lag behind.

Citing interviews with 403 LDP lawmakers this month, Kyodo News agency said Abe was backed by 130 lawmakers, with 40 supporting Fukuda. Nearly half were undecided, it said.

Signaling his intention to run, Aso said the prime ministership was his "five-year-old dream" since running unsuccessfully against Koizumi in 2001, Kyodo said.

During the 169-day session that began Jan. 20, the Diet enacted 82 laws including one approved Friday that would impose sanctions on North Korea if it fails to cooperate in clearing up details of its past abductions of Japanese citizens. But debate on other key bills, including revisions of an education law to boost patriotism and another to allow a female monarch, will be carried over to the next session after the summer recess.

The recess also comes amid speculation that Koizumi may announce as early as next week the withdrawal of Japanese troops from Iraq following reports that U.S. allies have agreed to hand over security responsibilities to Iraqi authorities.

Japanese media reported that Tokyo may start pulling out its 600 troops on a humanitarian mission in the southern Iraqi city of Samawah later this month.

Opposition Democratic Party Secretary General Yukio Hatoyama criticized Koizumi for not extending the parliamentary session to discuss the issue.

"I suspect he is going to take the liberty" to take crucial actions during the recess, Kyodo quoted him as saying.

Jeff Bailey : 6/16/2006 3:38:33 PM

Treasuries also saw pre-close action. Notable selling with yields jerking higher. Shorter-dated 5-year jumped to 5.098%

Jeff Bailey : 6/16/2006 3:33:19 PM

Argentina May Industrial Output +7.3% On Yr, +0.9% On Month

DJ- Argentina posted industrial production growth in May that was slightly below expectations but which was nonetheless consistent with a trend of healthy growth seen throughout the year.

Industrial production grew 7.3% in May from a year earlier, the national statistics agency, INDEC, said in a report released Friday. On a monthly basis, output was up 0.9% from April. Both figures are adjusted for seasonal factors.

For the five months to May, industrial production was up 7.1% from the first five months of 2005 on an accumulated basis.

The year-on-year result came in just below the 7.4% median forecast produced in the Argentine Central Bank's monthly survey of economists. It also marked a deceleration from the 7.7% annualized growth rate seen in April.

INDEC also said its measure of installed capacity was slightly below that of April, suggesting that investment is keeping up with output growth. The rate of plant utilization was at 70.4% in May, down from 71.1% in April.

Jeff Bailey : 6/16/2006 3:21:46 PM

Gold got a late-afternoon bid. GLD jumped from $56.43 ($564.30)

Jeff Bailey : 6/16/2006 3:16:30 PM

03:00 Internals found at this Link

Special thanks to David for keeping track of intra-day internals while I was away today.

Jeff Bailey : 6/16/2006 3:02:53 PM

03:00 Market Watch found at this Link

Jeff Bailey : 6/16/2006 2:57:22 PM

Looks like we had one buy program premium just after the open, but arbitrage has been rather quiet today.

Jeff Bailey : 6/16/2006 2:39:37 PM

CME June Option Montage found at this Link ... either side of the $450 strike.

Jeff Bailey : 6/16/2006 2:33:05 PM

It looks like a relatively quiet session so far today. Some fine tuning around expiration.

QQQQ $38.45 pretty close to $38.56 settle from last night's 06:58:04 post Link

Jeff Bailey : 6/16/2006 2:19:14 PM

Current OPEN MM Profiles found at this Link

Jane Fox : 6/16/2006 1:02:05 PM

McMillan's weekly commentary:

"A sharp, but short-lived rally is occurring, but the intermediate term is bearish."

Ironically, the above comment is the same one we used three weeks ago. The market was more oversold this time than it was then, so perhaps the current rally will last longer than the 3-day one we saw a few weeks ago. The overriding picture is still bearish, though, as markets that have been this deeply wounded do not just turn around and go straight up.

From a bullish perspective, the best that can be hoped for is that this rally is strong enough to build upon when the inevitable retest of this week's lows occurs. That retest might not take place for several weeks, depending on the strength of this bounce, but it surely will take place. If that retest holds, then the intermediate-term "W" bottom will have formed, and one might then adopt a more positive, longer-term outlook.

At this point, we've already seen a stronger rally than three weeks ago. It has carried $SPX to its 20-day moving average, in the 1260 area. The last rally failed when that average was encountered, and this one may too -- despite the euphoria created by the panic buying today.

The equity-only put-call ratios have not yet responded to the current rally attempt, as they continue to make higher highs on their charts. This leaves them (historically) oversold, but not on buy signals. However, Thursday's strong rally will certainly halt their rise, and a couple more days of bullishness might be enough to roll them over to buy signals.

Market breadth follows the broad market with extreme readings almost every day. This is typical of an institutionally-dominated market: all the order flow goes one way or the other for nearly an entire trading day. Thursday's rally was strong enough to register a buy signal from breadth.

Finally, volatility indices ($VIX and $VXO) have been jumping back and forth with abandon. A 2-point move has become commonplace. The monstrous 5-point drop in $VIX on Thursday means that it's closed more than 3 points from its recent high. That is typically a buy signal for the market, indicating that $VIX has formed a (spike) peak.

So, many indicators are in place for a short-term rally. Of course, they were in a similar state three weeks ago (both breadth and $VIX gave buy signals then), but the bears turned that rally back with a vengeance. We don't expect this one to do much better, and don't think it will get much past 1260 on the $SPX Index.

Marc Eckelberry : 6/16/2006 12:35:53 PM

As the year progresses and we get closer to the Vista release, be aware that it will require very powerful video vards and more ram. Those 2 are fundamental underlying plays to get in on. STocks would be MU and more importantly NDVA.

Jane Fox : 6/16/2006 11:33:09 AM

Dateline WSJ WASHINGTON -- The U.S. current account deficit narrowed sharply in the first quarter as overseas sales of industrial supplies and capital goods increased.

Separately, consumer sentiment improved this month, with the University of Michigan's mid-June reading up at 82.4 from May's 79.1. The biggest improvement was in consumers' assessment of current conditions, which jumped to 103.1 from 96.1. But, consumers are still a bit gunshy on the big picture, with a gauge of future expectations ticking up only one point to 69.2.

The current account deficit dropped to $208.7 billion in the first quarter from a downwardly revised $223.1 billion in the fourth quarter, the Commerce Department reported Friday. The fourth-quarter deficit was originally reported as $224.9 billion. (Full report)

Jane Fox : 6/16/2006 9:59:30 AM

Ok we had some bullishness come with the UOM sentiment numbers but the AD line and volume remain below 0 and that is not bullish.

Jane Fox : 6/16/2006 9:58:21 AM

NEW YORK (MarketWatch) -- Treasurys were little changed after better-than-expected consumer sentiment data, as traders continued to buy bonds after two days of heavy declines. The 10-year note was up 4/32 at 100-10/32, yielding 5.084% vs. 5.099% late Thursday

Jane Fox : 6/16/2006 9:58:01 AM

WASHINGTON (MarketWatch) -- U.S. consumer sentiment improved in early June, according to proprietary research from the University of Michigan released Friday. The UMich consumer sentiment index rose to 82.4 in June from 79.1 in May. It's the first increase since March. Economists were expecting sentiment to be unchanged. The current conditions index rose to 103.1 vs. 96.1, while the expectations index rose to 69.2 from 68.2

Jane Fox : 6/16/2006 9:27:31 AM

Of course from the low on 07/24/2002 we had about a year before the market was able to get itself together enough to take off. Then you have take into consideration that back in 07/24/2002 we were in a bear market and today we are in a bull market and then you have to consider the amount of money been pumped into the market today ... yadda yadda yadda but still it was pretty interesting.

Jane Fox : 6/16/2006 9:24:03 AM

And the last time it hit such a high number was 07/24/2002, which pretty well marked the beginning of our current bull run. HMMMM Link

Jane Fox : 6/16/2006 9:22:09 AM

Yesterday the AD volume hit 1,759,144 a very high number so I placed a green trendline on it and went back to find the last time it hit such a high number. Link

Jane Fox : 6/16/2006 9:18:55 AM

I am betting that consumer confidence fell because of the high price of gas.

Jane Fox : 6/16/2006 9:15:42 AM

Remember the 9:45 Mid June Univ. of Michigan Consumer Sentiment. This can be a market mover.

Jane Fox : 6/16/2006 9:14:52 AM

Jeff is out this morning until about 2:00 EDT.

Jane Fox : 6/16/2006 8:45:59 AM

WASHINGTON (MarketWatch) - The U.S. balance of payments deficit narrowed slightly in the first quarter to $208.7 billion from $223.1 billion in the fourth quarter, the Commerce Department reported Friday. The current account deficit totaled 6.4% of gross domestic product, down from 7% in the fourth quarter. The decrease was largely due to a decrease in transfer payments and net imports of goods. Economists had expected the current account to shrink to about $221 billion, according to a survey conducted by MarketWatch. Capital inflows totaled $157.6 billion after $242.7 billion in the fourth quarter.

Jane Fox : 6/16/2006 8:45:15 AM

Markets didn't like the 8:30 Account Deficit News which I cannot find because my news source is down again. I will as soon as I find it. Link

Jane Fox : 6/16/2006 8:40:37 AM

Dateline WSJ SEOUL, South Korea -- The Federal Reserve may have to keep raising interest rates if inflation persists in the U.S. economy, said William Poole, president of the Federal Reserve Bank of St. Louis.

"It's, I believe, certainly my view that if the inflation rate continues to be persistent like this the Federal Reserve will simply have to pursue persistently policies that will keep that inflation from increasing further," Mr. Poole told reporters Friday on the sidelines of a conference on monetary policy sponsored by the Bank of Korea, suggesting that rates may need to be raised further.

Mr. Poole, a non-voting member of the rate-setting Federal Open Market Committee, also described the U.S. economy as "fundamentally very robust" and said that the current inflation "situation is absolutely not dangerous." He said there is still some time to go before the Fed's next policy meeting on June 28-29.

"I have a very open mind about what the conclusion of that meeting, or what my position will be going into that meeting," he said.

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