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Jeff Bailey : 8/3/2006 12:55:20 AM

SPX NH/NL finished 24:7, its best daily ratio since 07/03/06 15:4

Jeff Bailey : 8/3/2006 12:41:13 AM

07/26/06 to 08/02/06 Sector Bell Curve found at this Link

Keene Little : 8/2/2006 11:50:57 PM

Thursday's pivot tables: Link and Link

Jeff Bailey : 8/2/2006 11:53:09 PM

S&P 500 (SPX.X) Daily Interval bar chart at this Link ...

One test I had for the SPX today was to see if it could hold a close above 1,280 (conviction from buyers) and the SPX wasn't quite up to task today. In fact, the SPX closes juuuust below its 07/03/06 relative high close.

But there's "always tomorrow."

There's definately two separate markets right now. There's the NYSE and there's the NASDAQ, where each are tugging in different directions (NYSE HIGHER) and (NASDAQ LOWER)

For me, a 1,280 close becomes an ALERT to bears that they'd better have an action plan in place should the SPX get the trade at 1,290. For an SPX move above 1,290, it'll have to be a change for the NASDAQ. Intead of 2 steps back and 1 forward, a shift is needed and 2 steps forward, and 1 step back.

In recent sessions, since about SPX 1,262 (SPY $126) this index, as well as the Dow/YM has traded as if they are "overly short" and shorts, or new longs, have been getting a little more eager to buy intra-day weakness.

Jeff Bailey : 8/2/2006 10:24:32 PM

Nymex To Offer Physically Delivered Energy Contracts on CME

DJ- Targeting increased interest in energy futures, the New York Mercantile Exchange (NYM.XX) plans to offer physically-settled energy contracts on the Chicago Mercantile Exchange's (CME) electronic Globex platform from Sept. 4.

Nymex also said it had reached "agreement in principle" with its Comex division on a deal that could enhance competitiveness with a key rival in the booming market for trading metals.

In a statement late Wednesday, the country's largest energy and metals marketplace said the physical contracts will trade "side by side in conjunction with Nymex trading floor hours and they will be fungible with the floor-traded Nymex energy contracts."

The move, which was approved at a Nymex board meeting Wednesday, marks an effort by the exchange to tackle growing crude oil market share attained by its main rival, the Intercontinental Exchange Inc. (ICE).

ICE last year successfully abandoned crude oil floor trading of its benchmark Brent crude contract in favor of electronic contracts, but only offers them on a cash-settled basis.

On June 12, Nymex started trading cash-settled electronic contracts on Globex to compete with ICE but executives have conceded the volume hasn't been as high as they hoped. They have said a lack of a physical contracts - where trades are settled via underlying commodities - is an obstacle that needs to be overcome to get higher volumes.

The products to be offered from Sept. 4 for trade date Sept. 5 include the marquee futures contracts for crude oil, natural gas, heating oil and gasoline.

The contracts on Globex will be listed for the full curve, or all months corresponding with the underlying full-sized futures contract and will be available for trading from 6:00 p.m. EDT Sundays through 5.15 p.m. EDT Fridays, with a 45-minute break each day between 5:15 p.m. and 6:00 p.m.

"Details regarding the competitive fee structure will be provided prior to the September 4 launch," Nymex said.

Some Nymex floor traders, who lease seats to work at the exchange and shout buy and sell orders during the open outcry session, have been critical of the looming electronic trade, fearing it will cut their business.

Nymex has already decided to list physically-settled energy contracts on Globex in August to trade outside floor trading hours.

Seeking Deal With Comex

In a separate board decision, Nymex said its directors reached an agreement in principle with the Comex Governors Committee over the latter's electronic trading rights, the terms of which will include the issuance of Nymex common stock to Comex members. The transaction is subject to a number of conditions, including final Comex member and Nymex shareholder approval.

If it sticks, a deal could open up the use of the Access electronic trading platforms to outsiders and ultimately free up Comex electronic trading rights in order to allow more aggressive compeition with the Chicago Board of Trade (BOT).

When Comex was acquired by Nymex in 1994, its seatholders didn't retain equity in the exchange, but did hold on to the electronic trading rights to their contracts. This matter seemed insignificant at the time but is now a major issue with the CBOT having snatched away over a third of the market share in some key contracts like gold and silver futures.

Comex trades for five hours a day through pit dealing and its Access electronic trading system is open only to its 772 members, while the CBOT trades metals for over 20 hours a day.

Nymex has been close to agreement several times with Comex in the past and said Wednesday that there was "no assurance that this transaction will be completed."

The Nymex equity offering to Comex members would allow them upside in the event of an initial public offering of Nymex stock.

OI Technical Staff : 8/2/2006 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.

Keene Little : 8/2/2006 7:26:57 PM

I got back to see the market rallied nicely today which I didn't expect but am not surprised about. There seems to be an effort to lift the market by the Boyz who I believe are offloading their inventory as they go (to the poor unsuspecting retail crowd). The reason I say that is because of the negative divergences that continue even as the market pushes higher, as seen in this ES 60-min chart. Link

And what a pretty setup for a short play we had late this morning and then on the retest at 2:00 with lots of negative divergences showing the way at the 2:00 retest. ES jumped up to close its gap at 1288.25 to the tick and it was right where it was doing a retest of its broken uptrend line from July 21st. I'll take those setups every day of the week.

What we don't know of course is whether or not that high will stick but it was clearly worth a shot. However, the pattern would look best with at least a minor new high and I have a Fib projection at 1289.50 that I'd look at very carefully for an even better short play. This "rally" is loaded with choppy price action and is indicative of distribution in my opinion. Chasing this higher is riskier than looking for a short entry.

Jeff Bailey : 8/2/2006 6:42:43 PM

Merck (MRK) $41.03 +0.51% ... California Vioxx Trial: Merck Not Negligent, Jury Says

MRK called higher at $41.32 in extended trade.

Jeff Bailey : 8/2/2006 5:55:09 PM

U.S. National Grid Posts New Electricity Demand Record

Jeff Bailey : 8/2/2006 5:54:17 PM

Brazil's Central Bank Buys Dollar at BRL2.178

Jeff Bailey : 8/2/2006 5:53:01 PM

Barrick Gold (ABX) $32.20 +2.38% Link ... jumps to $32.80 extended.

Earnings Link

Reduces hedge

Jeff Bailey : 8/2/2006 5:44:48 PM

Current OPEN MM Profiles that I've made at this Link

Trade Blotter of CLOSED and OPEN trades with current stops/targets at this Link

Jeff Bailey : 8/2/2006 5:17:56 PM

Closing Internals found at this Link

Jeff Bailey : 8/2/2006 4:48:13 PM

Closing U.S. Market Watch found at this Link

Tab Gilles : 8/2/2006 4:06:12 PM

Murphy Oil (MUR) Continues to decline. As indicated on 7/28 4:51 PM post... looking for a re-entry point. Link Link Link

EIA Report Link

Jane Fox : 8/2/2006 4:03:37 PM

Economic Reports slated for tomorrow include:

8:30a.m. Initial Jobless Claims For July 29 Wk. Consensus: +10K. Previous: -7K.

10a.m. June Factory Orders. Consensus: +1.8%. Previous: +0.7%.

10a.m. July Non-MFG ISM Business Index. Consensus:58. Previous: 57.

Jeff Bailey : 8/2/2006 4:02:01 PM

Buy Program Premium ... SPY $128.00

Jane Fox : 8/2/2006 3:45:20 PM

All the markets have retraced at least 61.80% of their respective daily ranges. ER has retraced a 100%. Link

Jeff Bailey : 8/2/2006 3:31:27 PM

Goldman Sachs (GS) $149.58 -1.11% Link ... couldn't quite get the trade at $154. With FOMC next week and some cautionary comments out of Merrill, take'm when we got'm.

Jane Fox : 8/2/2006 3:31:16 PM

NEW YORK (MarketWatch) -- Crude-oil prices ended at their highest level in over two weeks as the positive impact of a smaller-than-expected decline in gasoline inventories was dwarfed by concern a potential hurricane in the Caribbean may pose a threat to oil installations in the Gulf of Mexico.

The market is "building in a fear premium" with regards to Tropical Storm Chris, with what "looks like a push toward $80 a barrel," said Michael Cavanaugh, analyst at Myfuturesonline.com. "If the hurricane does not go through, we'll fall off ten bucks." Tropical Storm Chris could become a hurricane later Wednesday or early Thursday, according to the latest National Hurricane Center forecast. It's expected to pass north of the northernmost Leeward Islands of the Caribbean later this morning. The Virgin Islands and Puerto Rico are likely to see heavy rain later tonight and early Thursday morning.

Jeff Bailey : 8/2/2006 3:28:57 PM

Swing trade buy back call alert and then let's buy back the Goldman Sachs GS Aug $155 Call (GPY-HK) at the offer of $1.40 ($1.35 x $1.40) with GS $149.67.

Jeff Bailey : 8/2/2006 3:24:00 PM

Bullish swing trade call exit alert ... Let's sell the Goldman Sachs GS Oct $140 Call (GS-JH) at the bid of $14.50 ($14.50 x $14.80) with GS $149.64 -1.07% ...

Jeff Bailey : 8/2/2006 3:22:19 PM

That's a "reason" to book a profit in my opinion.

Jeff Bailey : 8/2/2006 3:21:12 PM

Goldman Sachs 3Q Seen Weaker (alert)

DJ- AP Story Link

Jeff Bailey : 8/2/2006 3:19:18 PM


DJ- Eight Wall Street brokers have been indicted for allegedly defrauding hundreds of customers out of at least $13 million, the Manhattan District Attorney's Office says. No details immediately given on people charged or alleged scheme.

Jeff Bailey : 8/2/2006 3:16:13 PM

03:00 Internals found at this Link

Jane Fox : 8/2/2006 3:13:35 PM

OK now you can start to worry. ER just made a new daily low.

Jeff Bailey : 8/2/2006 3:02:44 PM

03:00 Market Watch found at this Link

Jeff Bailey : 8/2/2006 2:53:31 PM


DJ- Shares jump 11% as insurer posts net income of $273 million, or $2.33 a share, on flat revenue of $4.1 billion. EPS excluding items of $2.31 trumps analysts' mean estimate of $1.94. CEO calls manage-care pricing environment competitive.

CI $102.62 +10.74% Link

Jeff Bailey : 8/2/2006 2:48:59 PM


DJ- Credit-card firm has net loss of $310 million, or $2.30 a share, on IPO- and legal-related charges. Excluding items, EPS of 74c is 12c higher than expected. Revenue rises 9.7% to $846 million.

MA $49.18 +9.28% Link ...

Jeff Bailey : 8/2/2006 2:46:28 PM


DJ- President Talabani says Iraqi forces will assume control throughout the country by 2007 from U.S. forces. He doesn't make clear whether the U.S. will retain an advisory type of role in security.

Jeff Bailey : 8/2/2006 2:40:09 PM


DJ- Treasury plans to issue 30-year bonds on a quarterly basis starting in February to assist Treasury-derivative products. February's offering will reopen in May, and a 29.75-year bond set for August will reopen in November.

Jeff Bailey : 8/2/2006 2:33:44 PM

Yes Jane (02:25:45)

Jeff Bailey : 8/2/2006 2:33:17 PM

VIX 14.34 ... juuust back above DAILY S2

SPY $128.09 ... coming back to DAILY R2.

Jane Fox : 8/2/2006 2:29:57 PM

I wouldn't be to worried about this selling - these two are still quite bullish. Link

Jeff Bailey : 8/2/2006 2:28:53 PM


DJ- Federal appeals court upholds one patent for the cholesterol drug but reverses a lower-court ruling that upheld a second patent. Split decision could shorten Pfizer's U.S. market exclusivity period for Lipitor by 15 months.

PFE $25.63 -1.38% Link

Jeff Bailey : 8/2/2006 2:26:41 PM


DJ- Media giant announces major strategy shift for AOL and reports net income of $1.01 billion, or 24c a share, as last year's results hurt by litigation charge. EPS excluding items of 20c tops analysts' estimates by a penny. Revenue increases lower-than-expected 1.2% to $10.71 billion. AOL, which confirms it will give away email accounts and software now available only to its paying customers, sees U.S. membership drop 976,000 to 17.7 million.

TWX $16.76 +3.13% Link

Jane Fox : 8/2/2006 2:25:45 PM

Did cha all notice ES did not make a new daily high. Are you all convinced the VIX is really important to watch if trading ES? :)

Jane Fox : 8/2/2006 2:10:40 PM

VIX is not testing daily lows so I don't think ES will make a new daily high. At least not right away.

Jeff Bailey : 8/2/2006 2:05:48 PM

Micron Tech (MU) $15.68 +1.95% Link ...

Jeff Bailey : 8/2/2006 2:02:39 PM

FTC Ruling Puts Rambus Royalties at Risk ... AP Story Link

Jeff Bailey : 8/2/2006 1:55:48 PM

Rambus (RMBS) $13.06 -23.08% Link ...

Jeff Bailey : 8/2/2006 1:49:58 PM

Thanks Jane ...

Jane Fox : 8/2/2006 1:42:36 PM

Jeff TS confirms December Gold's high today as 668.20.

Jeff Bailey : 8/2/2006 1:38:10 PM

Current OPEN MM Profiles that I've made at this Link

"Bad tick" on December gold. I've got session high of $668.20.

Jeff Bailey : 8/2/2006 1:20:19 PM

NYSE's 105 New Highs are the most since 05/11/06 when that day's NH/NL tally was 182/123.

On 5/12/06 the NYSE NH/NL measure was 28/188.

Jane Fox : 8/2/2006 1:19:52 PM

DES MOINES, Iowa (MarketWatch) -- A record-setting heat wave baked much of the U.S. again Wednesday, testing power-utility capacities and sending throngs of people to shopping malls, theaters and other air-conditioned oases. Power suppliers were expecting to face their biggest demand day, but predicted they could meet electrical needs with few interruptions, said Stan Johnson, a spokesman for the North American Electric Reliability Council, a Princeton, N.J., industry group.

Even so, calls for conserving energy were widespread and some big employers augmented their needs with on-premises power sources, and juggled work schedules, to accommodate the heat.

New York City's two biggest banks - Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) - are cutting their power use at the handful of buildings they own and operate. Both companies are shifting to backup generators, trying to reduce elevator use and turning up the thermostat anywhere from 2 to 10 degrees, spokespeople said.

Also, at three Citigroup buildings - on Wall Street, in Manhattan's Tribeca neighborhood and in Long Island City in Queens - hot water heaters were turned off.

"People are washing their hands with cold water," a spokeswoman said.

Verizon Communications Inc. (VZ) said some of its telephone switching centers have been running on generators. One office in Long Island has been relying on fuel cells to stay open, a spokesperson said.

Jeff Bailey : 8/2/2006 1:16:43 PM

01:00 Internals found at this Link

Jane Fox : 8/2/2006 1:16:13 PM

... if so then gravity will take over and the markets will start to fall.

Jane Fox : 8/2/2006 1:15:43 PM

TICKS just hit +800 again and the marekts didn't budge. Are the bulls tried?

Jane Fox : 8/2/2006 1:08:27 PM

Jeff - thank you for your P&F analysis of Natural Gas. This is a market that certainly has my interest lately.

Jane Fox : 8/2/2006 1:06:33 PM

Yesterday I suggested "buying a dip" to the 50EMA but the bears were able to bring YM down to the 200EMA but no further. I wish I had taken my advice and bot that dip. YM still has resistance at 11340 but between that resistance and where YM is currently trading at, 11240, is a 100 points. Link

Jeff Bailey : 8/2/2006 1:04:44 PM

01:00 Market Watch found at this Link

Jeff Bailey : 8/2/2006 1:02:21 PM

ICE $59.47 +0.59% Link ... 1/2 position only (below trend), but looking for renewed near-term strength in Nat. Gas futures to get the stock above trend, trigger spread-triple top buy signal at $62.00 and achieve my target of $64.00.

Jeff Bailey : 8/2/2006 12:57:53 PM

Continuous Nat. Gas ($NATGAS) from StockCharts.com at this Link ... Traders and investors can change the "box size" (scale), but most institutions view at $0.20. Changing to $0.50 like this Link removes "noise," but challenges the contract.

Challenge how you might ask? Sell at $11.00, and today's trade at $8.50 (I think the continuous chart will show $8.50 based on September futures) would have demand (X) now coming back into control on a near-term basis.

Jeff Bailey : 8/2/2006 12:52:34 PM

Sept. Nat. Gas (ng06u) 20-cent box chart at this Link ... at the top-end of 10-week trading band. Unless the contract were to trade $7.40, I've shown "green ?" for today's trade.

Jane Fox : 8/2/2006 12:29:37 PM

NEW YORK (MarketWatch) - Lazard Ltd., amid a record year for mergers and acquisitions, proved Wednesday it's capturing its share of advisory assignments, reporting a 96% surge in second-quarter profit.

Lazard (LAZ) ($40.12, +2.32, +6.1%) said pro forma net income rose to $62.9 million, or 60 cents a share, up from $32 million, or 32 cents a share, during the same period last year. Revenue rose 25% to $386 million, up from $310 million. Lazard had its initial public offering in May 2005.

The company was expected to earn 50 cents a share, according to analysts polled by Thomson First Call.

LAZ has made a nice bullish move above its major MAs but will find resistance at $42.00. Link

Marc Eckelberry : 8/2/2006 12:26:42 PM

NQ ADVDEC line coiling over the past few days, the range is tightening as we approach the Feds: Link

Marc Eckelberry : 8/2/2006 12:22:41 PM

Year highs are taking over at NYSE (129 to 23), but NASDAQ stil struggling, although at 61/68, we are seeing an improvemet. Volume is still as suspect as yesterday, so traders have to realize there will be swings, but I much prefer the long side overall at this point.

Marc Eckelberry : 8/2/2006 12:18:25 PM

I am still worried about oil, but if Chris proves to be no danger, we will see QM pullback. Keep an eye on the pattern, here is the link: Link

Marc Eckelberry : 8/2/2006 12:19:15 PM

Back for a sec. Oil stutters a little and this rally should hold the weekly pivot and we should hit 1542 by Friday, if not 1550, 50 dma. They shook out the weak hands yesterday, and off we go. Even RLX is back in the green. Yesterday might have been your last chance to see lower QQQQ 36 this month. This reminds me of the late October early November action, when bears kept living in the past 2 months of selling.

Jane Fox : 8/2/2006 12:06:16 PM

TICKS +1000 CCI +291. Me thinks the market will stall here but will probably not retrace so no fades.

Jeff Bailey : 8/2/2006 12:00:27 PM

SPY $128.37 +0.90%

Jeff Bailey : 8/2/2006 11:59:59 AM

VIX alert 14.00

Jeff Bailey : 8/2/2006 11:58:10 AM

Swing trade put stop alert with the SPY $128.25 ... stopped on the SPY Aug $126 Puts (SPY-TV) at the bid of $0.55

Jeff Bailey : 8/2/2006 11:57:35 AM

Bullish swing trade long alert for 1/2 position in shares of Intercontinental Exchange (ICE) $59.50 +0.62% here, stop $56.00, target $64.00

Jane Fox : 8/2/2006 11:55:18 AM

Watch the VIX and make sure it confirms any new highs in ES.

Jane Fox : 8/2/2006 11:52:26 AM

NEW YORK (MarketWatch) -- Security Capital Assurance Ltd. on Wednesday took its place as the richest U.S .initial public offering from the insurance sector in more than two years as shares of the financial firm rose in their stock market debut.

Security Capital Assurance (SCA ) shares opened at $20.90 a share, above their $20.50 IPO price. The stock changed hands at $20.80 a share in recent trades.

The Bermuda-based financial guaranty reinsurance firm raised $460 million by offering 22.44 million shares, just below its estimated IPO range of $21-$23 a share. Goldman Sachs (GS), J.P. Morgan (JPM) were underwriters of the IPO for Security Capital Assurance, which was founded in 1999 as a unit of XL Capital (XL)

The IPO eclipsed the $299 million IPO from Allied World Assurance (AWH) as the richest U.S. insurance IPO since Genworth (GNW ) in 2004.

Competitors to SCA include Ambac (ABK) , MBIA (MBI) and FSA (FSF) .

Jeff Bailey : 8/2/2006 11:42:18 AM

Sunoco (SUN) $71.67 +3.05% Link ... gets the trade at WEEKLY R1.

Jeff Bailey : 8/2/2006 11:39:24 AM

SPY $128.01 +0.62% ... probes last week's highs.

Jeff Bailey : 8/2/2006 11:38:42 AM

Ryland Group (RYL) $41.22 +1.70% ... probes last week's highs.

Jane Fox : 8/2/2006 11:38:16 AM

Small caps remain bearish and are building a bearish triangle. The bulls really need to hold it here or the MACD will cross below the 0 line and that is quite bearish as well. This market and NQ are why I cannot get on the bulls bandwagon just yet. I am still in "sitting on the sidelines" mode. Link

Marc Eckelberry : 8/2/2006 11:29:45 AM

If QM holds the bid, I do expect a closing pullback. Have to go, be safe.

Marc Eckelberry : 8/2/2006 11:27:54 AM

Weekly R1 is 1542 and if 1500 holds, that is where we are headed by week's end. Lots of puts at 36 and 37 QQQQ, and this time, I think opex players wil have enough gas to make them expire worthless.

Jeff Bailey : 8/2/2006 11:26:58 AM

SPX NH/NL 16:6

Yesterday's tally 15:10

Marc Eckelberry : 8/2/2006 11:26:39 AM

No pullback, even with QM at 76.30. Quite a shift in mood, which adds credence to the flaky nature of yesterday's sell-off.

Jane Fox : 8/2/2006 11:25:47 AM

... of course with Natural Gas there is more at play than chart technicals. The weather has a profound affect on this market and especially when we enter the hurricane season.

Jane Fox : 8/2/2006 11:24:11 AM

The more I look at Natural Gas the more I like how it trades. I think it will have to retreat or move sideways for a while to burn off the overbot condition and right at the April 19th highs is great place for that to happen. Link

Jeff Bailey : 8/2/2006 11:22:50 AM

11:00 Internals found at this Link

Jane Fox : 8/2/2006 11:18:01 AM

These along with the VIX are why I would not take a fade today. Link

Jane Fox : 8/2/2006 11:16:40 AM

VIX is now falling confirming ES's new daily highs.

Jane Fox : 8/2/2006 11:15:18 AM

HMMM the 3 min CCI hit +257.

Jane Fox : 8/2/2006 11:13:07 AM

ES breaks to a new daily high.

Jane Fox : 8/2/2006 11:12:52 AM

TICKS hit +1000 but I will not be fading the TICKS today. Internals are too strong.

Jane Fox : 8/2/2006 11:12:11 AM

VIX breaks to a new daily lows but has not followed through on the break. THis suggests ES will remain bullish but new daily highs??? Just not sure. However, playing the probabilities new daily highs are more probable than new daily lows.

Jeff Bailey : 8/2/2006 11:05:44 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 8/2/2006 10:57:39 AM

Small caps are rocking as well.

Jane Fox : 8/2/2006 10:57:05 AM

Internals are quite strong but the bears are able to keep the bulls from making new daily highs.

Marc Eckelberry : 8/2/2006 10:56:15 AM

If QM was not on that bid, NQ would be at least 10 points higher. C'est la vie.

Marc Eckelberry : 8/2/2006 10:54:50 AM

NQ holds weekly pivot. Amazing.

Marc Eckelberry : 8/2/2006 10:50:57 AM

QM 76. Going to be tough to sustain this rally at this point. NQ should get down in that gap or close.

Marc Eckelberry : 8/2/2006 10:50:09 AM

Weekly pivot.

Jane Fox : 8/2/2006 10:48:20 AM

Here is how the markets are trading in relation to their previous day ranges. Link

Marc Eckelberry : 8/2/2006 10:48:12 AM

The semis are stronger than NQ/QQQQ overall, trading above 20 dma. That is the beginning of good news for techs, a pattern we have seen emerge since last week. I am a little worried about RLX, not participating because of higher oil. The back to school cycle is not going to be very rosy with higher gas prices, so let's hope Chris' effect will remain subdued on the Gulf region.

Jeff Bailey : 8/2/2006 10:45:35 AM

Cisco Systems (CSCO) $17.38 -0.62% ... edges to new multi-month lows.

Marc Eckelberry : 8/2/2006 10:44:48 AM

Oil is proving to be too much for NQ 1505. We should pull back here, pivot is at 1498 and gap is 1494.50/1497.50, areas I would step in long, if QM does not go bananas.

Jane Fox : 8/2/2006 10:44:21 AM

Market is totally under-whelmed by the news " L-3 UNIT WINS 2-YR CONTRACT FROM NAVY WORTH UP TO $48M." Link

Marc Eckelberry : 8/2/2006 10:42:25 AM

NQ at 20 dma.

Marc Eckelberry : 8/2/2006 10:42:18 AM

OIl is getting a bid, but has eased since the inventories. Chris is not likely to affect refiniries, but of course fear is rampant, or at least those that speculate on fear are rampant.

Jane Fox : 8/2/2006 10:39:56 AM


Marc Eckelberry : 8/2/2006 10:39:46 AM

As I pointed out yesterady, techs is the place to be, or at least start getting into gradually. Yesterday's very strange alomst psychotic sell-off should be negated shortly if NQ gets close above 1504.50. I exited the trade last night, hoping to get a swing low overnight, but that did not happen. In any case, buy the dips IF oil does not go crazy, thanks to Chris.

Jane Fox : 8/2/2006 10:38:53 AM


Jane Fox : 8/2/2006 10:36:56 AM

As long as the AD line is +1150, AD volume is climbing and the VIX is hugging daily lows, I surely will not try shorting.

Jane Fox : 8/2/2006 10:33:52 AM

I have a funny feeling $3.02/gal gas is history.

Jane Fox : 8/2/2006 10:33:27 AM

and Oil spikes to a high of 76.25.

Jeff Bailey : 8/2/2006 10:33:40 AM

EIA Weekly Crude Oil Inventories -1.8M barrels

EIA Weekly Gasoline Inventories -100,000 barrels

EIA Weekly Distillate Inventories +700,000 barrels

Jane Fox : 8/2/2006 10:33:01 AM


Jane Fox : 8/2/2006 10:29:49 AM

... for now!

Jane Fox : 8/2/2006 10:29:42 AM

And indeed ES's lows did hold.

Jane Fox : 8/2/2006 10:26:07 AM


Jane Fox : 8/2/2006 10:21:57 AM

ES is not testing daily lows but the VIX is not anywhere near its daily highs so I think those lows will hold.

Jeff Bailey : 8/2/2006 10:19:24 AM

Current OPEN MM Profiles that I've made at this Link

Jane Fox : 8/2/2006 10:18:40 AM


Jane Fox : 8/2/2006 10:17:20 AM

If you have position in Oil remember inventories are out at 10:30 today.

Jeff Bailey : 8/2/2006 10:13:26 AM

10:10 Market Watch found at this Link

Jane Fox : 8/2/2006 10:12:32 AM

Even though the AD line is retreating the AD volume is telling you to not short this market. Link

Jane Fox : 8/2/2006 10:10:54 AM

Both Gold and Oil have broken their overnight highs.

Jane Fox : 8/2/2006 10:06:00 AM

VIX is hugging daily lows suggesting ES will continue to hug its daily highs.

Jane Fox : 8/2/2006 10:05:09 AM

Watts Water Technologies Inc. (WTS) (34.85 +6.16 +21.47%) said it has acquired Calflex Manufacturing Inc. Financial terms of the asset purchase transaction weren't disclosed.

There was no indication on the charts of this acquistion. Link

Jane Fox : 8/2/2006 10:00:49 AM

NEW YORK (MarketWatch) -- Procter & Gamble Co., the world's largest consumer products company, said Wednesday that fiscal fourth-quarter net income rose 36%, as new products drove better-than-expected sales growth and Gillette products helped fatten profit margins. P&G (PG) ( 58.51, +2.58, +4.6%) , a component of the Dow Jones Industrial Average, saw its stock add as much as 3.8% to $58.06 soon after the markets opened.

The Cincinnati company, whose brands include Pampers diapers, Folgers coffee and Crest toothpaste, said profit rose to $1.9 billion, or 55 cents a share, from $1.39 billion, or 52 cents, in the year-earlier period. P&G's 2005 acquisition of Gillette diluted earnings by 6 cents to 8 cents a share.

Sales for the three months ended June 30 increased 25% to $17.84 billion from $14.26 billion, while unit volume expanded 23%.

I like this chart but the CCI is saying PG may be a little overdone already. Link

Jane Fox : 8/2/2006 9:54:06 AM

Now let's add some trendlines to that ES chart. First of all notice the green line that originated from the April 18, 2005 lows and then join that line to the October 13, 2005 lows and you see that ES has pretty well respected that line. Support is very clear and the bears will need to close this market below 1229 before they can say they are winning.

Now notice the magenta trendline that originated on January 3, 2006 and then join that with the low made on February 7, 2006 and you see resistance the bulls have ahead of them. Link

Jane Fox : 8/2/2006 9:44:00 AM

If you take everything off the S&P futures chart you get a very good picture of where the market has gone since early June. No where. It has traded in a 60 point range for 2 months. This, however, is excellent for credit spreads! Link

Jane Fox : 8/2/2006 9:37:58 AM

AD line now +1350 and I would not be trying any short positions this morning.

Jane Fox : 8/2/2006 9:36:23 AM

All equity markets are now trading above their respective PDHs except NQ, the weakest market so far this morning.

Jane Fox : 8/2/2006 9:32:51 AM

VIX opens below its PDL and the TRIN within its PDR.

Jane Fox : 8/2/2006 9:32:18 AM

AD line is a bullish +705 and AD volume above the 0 line. The bulls have the reins.

Jane Fox : 8/2/2006 9:31:48 AM

Using the December contract, which has the most volume now, I see Gold's resistance at 677.50, the July 17th swing high and not a lot standing in the way until then . Support is in the low 620's to high teens, which is the 100EMA, the trendline from November 2005 and the July 24th swing low.

Macd is on board as well and is tracking price just like it should.

This is a very nice bullish chart. Link

Jane Fox : 8/2/2006 9:21:12 AM

NEW YORK (MarketWatch) -- Gold futures rose early Wednesday, carried along by renewed gains in oil prices as Israel vowed to press its attack on Lebanon and a tropical storm in the Caribbean threatened to turn into a hurricane. Gold for October delivery was last up $2.10 at $654.40 an ounce on the New York Mercantile Exchange, after touching a high of $656.60, its best level since July 18.

The contract added $12 on Tuesday against a backdrop of increasing tensions in the Middle East, with Iran rejecting a U.N. resolution banning it from enriching uranium and Israel sending more troops into Lebanon.

"The amount of buying interest generated by recent price dips into the low $630's and high $620's continue to gather strength, and suggest that market demand for the yellow metal should continue to be strong, on a mix of geopolitical and economic worries," said analysts at Standard Bank in London.

However, from a technical perspective, the contract is likely to experience strong resistance around the $650 level, they said. If it succeeds in convincingly breaking through that level, it could test $660, but if it declines, support will be found at $636 and stronger demand in the $620-to-$630 range, they said.

I will add my own thoughts to this analysis in a minute

Jane Fox : 8/2/2006 9:13:01 AM

Dateline WSJ - A clutch of new economic reports offer a reminder that however much the Federal Reserve tries to balance concerns about inflation and economic growth, they are not a zero-sum game. The persistent rise in prices is posing a threat to spending, and that may leave the Fed little choice but to keep raising interest rates when it meets next week, even as Fed critics say higher borrowing costs will choke the economy.

Jane Fox : 8/2/2006 9:03:51 AM

Oil broke its PDH overnight with a high of 75.70. I take my bike to the gym and as I pass each service station on the way I take note of gas prices. In April they were about $2.40/gal but yesterday they topped out at $3.02/gal. I sure feel sorry for those who have to drive a lot because these kinds of prices will certainly take a bite out of the budget.

On the other hand price of Natural Gas is still relatively low but seems to be on an upward swing as well. I did take a Natural Gas long yesterday at the close of business and did pretty well overnight but this is one volatile market and you have to very careful you know that your stops will work overnight. Nat Gas made a high of 8.495 overnight.

Gold is doing its thing as well and taking off again but has not yet made a higher high to confirm its higher low (on the daily which I will show later today). I really like how Gold trades on the daily chart and think I will start to swing trade this commodity more. Gold's December contract made a high of 664.10

TBonds broke their PDH overnight but are now retreated and have almost tested overnight lows. Link

Jane Fox : 8/2/2006 8:48:06 AM

Higher highs mean the trend is bullish and that is how you have to describe the overnight session. No market broke its PDH but this bullishness suggests that they may do just that. Link

Keene Little : 8/2/2006 8:20:22 AM

After breaking below its uptrend line from July 18th SPX could get a bounce back up to retest the broken trend line, currently up near where it would close yesterday's gap (1276.77). Yesterday's close was 1270.92 so that would be a 6-pt bounce this morning. Link

Futures are currently up so that's a possibility. But if we get an early continuation lower then the next level of support would likely be the closure of the gap from July 28th at 1263.26 (cash) so 7 points to the downside. If the market decides to rally back up to new highs then we have a choppy mess on our hands and it's going to be full of whipsaws.

I've got to make a road trip today and will be unable to post during the day. I'll review the charts and make some commentary once I return later after the market closes.

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