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Keene Little : 9/6/2006 10:19:59 PM

Thursday's pivot tables: Link and Link

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

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Keene Little : 9/6/2006 4:21:44 PM

At the close we have ES a little below its uptrend line from July and YM holding onto its line. Do or die for the bulls tomorrow. I like my ES short and YM long with a stop on my YM long at 11380.

Jane Fox : 9/6/2006 4:07:36 PM

Economic Reports for tomorrow include:

8:30a.m. Initial Jobless Claims. For Aug 26 Wk. Previous: -2K.

10:00a.m. July Wholesale Inventories. Previous: +0.8%.

Marc Eckelberry : 9/6/2006 4:02:46 PM

Is this a pullback to 10 dma (current support) or will this run deeper to must hold 20 dma? I suspect oil will have a lot to do with that answer short term. My bias is lower to 20 dma, since SMH lost the 10 dma.

Marc Eckelberry : 9/6/2006 3:57:40 PM

QM has risk to 67, if 67.425 breaks.

Marc Eckelberry : 9/6/2006 3:55:30 PM

I suggested watching any bounce and failure of SMH to 33.45 and it sure worked. NQ 61.8% recent rally was support, we did not hit weekly S1 at 1565, my target if 1575 broke. Now support is 50% 1577.50. We could very well hit 1565 one a lower low hit overnight or tomorrow.

Jane Fox : 9/6/2006 3:36:26 PM

NEW YORK (MarketWatch) -- The odds of the U.S. economy slipping into recession have climbed to 50% and investors should stay defensive, Liz Ann Sonders, Charles Schwab & Co.'s chief investment strategist, said Wednesday.

In a MarketWatch interview, Sonders recommended paring back small-cap and international stocks by 5% each in a portfolio geared toward moderate risk, while emphasizing healthcare and consumer staples holdings.

Investors should overweight their cash positions as well by as much as 10 percentage points, she suggested. Other allocations: 35% bonds and 35% large-cap equities.

Recent housing data showing a slowdown in home sales as well as continued high oil prices have contributing to slower economic growth, she said. Beyond that, there's also the inverted Treasury yield curve.

"If the duration lasts for three months, in every case we've had a recession," said Sonders, pointing to the spread between the 3- month Treasury bill and the 10-month Treasury note.

A 50-50 chance for recession would be more bearish than other recession models. One model for recession predictability put the odds of recession at greater than 25%, while a model the Federal Reserve uses put the likelihood of recession at closer to 40%, Sonders wrote in a research note to Schwab (SCHW)clients last month.

Jane Fox : 9/6/2006 3:09:37 PM

ES is approaching 1300 and that will not break easily. Please keep in mind the daily charts are still quite bullish and this is a overbot retracement.

Keene Little : 9/6/2006 3:06:25 PM

Last chance bulls--YM 11400 needs to hold.

Jane Fox : 9/6/2006 3:00:08 PM

Here is QM on a 240 minute Chart and notice the bullish MACD. If you take QM long make sure you realize this is a short term trade. Oil is still bearish but due for a bounce. Link

Jane Fox : 9/6/2006 2:53:05 PM

From a purely technical standpoint I think Oil is buy here. Link

Keene Little : 9/6/2006 2:45:55 PM

ES needs to hold the line at 1303.50 which is the uptrend line from July. Otherwise the bulls could be in trouble here. It's an edge-of-the-cliff long play here. Keep your stop at 1301-1302 and give it a try.

Jane Fox : 9/6/2006 2:38:10 PM

WASHINGTON (Reuters) - The U.S. economy grew overall from mid-July to late August, the Federal Reserve said on Wednesday, but five of the 12 Fed districts reported slowing growth as residential construction slackened and energy costs rose.

The Fed, in its Beige Book summary of economic conditions, said the Boston, New York, Philadelphia, Kansas City and Dallas districts reported declines in the rate of growth, but the remaining seven districts reported little change in their pace of activity since the last report, released on July 26.

The Fed said there were widespread price increases for energy, metals and other commodities, but these did not appear to be triggering more general consumer inflation.

"Widespread increases in the prices of energy and certain other commodities persisted since the last report, though most of these increases do not appear to have passed through to finished consumer goods," the Fed said.

Keene Little : 9/6/2006 2:26:39 PM

I lost my connection and finally got it back in time to see that the 3-wave bounce was all we got and it was followed by another new low. In the process it tagged ES 1304 and YM made it down to its uptrend line. I'm hanging onto my ES short but I'm hedging with a YM long.

Keene Little : 9/6/2006 1:53:06 PM

Now it's looking like another minor new high could give us a small 5-wave off today's low. That would mean we'll then be due a pullback but it will be followed by another leg higher. If you're short from higher up and don't want to give much back, cover on the next pullback. Scalpers should look to get long on the pullback.

Keene Little : 9/6/2006 1:37:27 PM

Two equal legs up for YM's bounce is at 11453.

Keene Little : 9/6/2006 1:36:31 PM

Let's see if this turns into more than just a 3-wave bounce off today's low. Two equal legs up is at ES 1307.25 so watch for a turn back down if that's it for the bounce.

Marc Eckelberry : 9/6/2006 1:12:36 PM

Mark your 20 dma on all your favorite symbols.

Marc Eckelberry : 9/6/2006 1:12:16 PM

Speaking of 20 dma, suprise, surpise, for ES it sits right at trendline support, 1296.75. NQ is 1558.75, not far from monthly pivot. That should be your short exit target if you got in at highs.

Marc Eckelberry : 9/6/2006 1:09:50 PM

Keene, we will definitely see more volatility and I think a rally the last 2 weeks of the month. However, that said, I am looking at the SMH weakness that has been prevalent since Thursday and as long as it stays stuck below 33.45 today, one can be pretty safe shorting this one. But I think a lot of sidelined money is looking at getting back in at the 20 dma accross the board. In fact, they might, as you said, be suckering in shorts just to get the prices. 1998 or 1987, you choose.

Keene Little : 9/6/2006 12:48:13 PM

I completely agree with Marc's 12:24 comment. If the short setup looks obvious you can bet thousands of other traders think so too. It's a recipe for a short-covering rally. More and more I like this setup for YM--new highs to stop run the shorts and suck in the bulls before turning south. Link

Marc Eckelberry : 9/6/2006 12:45:42 PM

Watch SMH 33.45/33.50 on a bounce.

Marc Eckelberry : 9/6/2006 12:42:47 PM

I think 1582 support will not hold. Primary support below that will be 1575, but I have little doubt we will hit 1565, weekly S1 soon.

Marc Eckelberry : 9/6/2006 12:41:27 PM

It's been a while, but NASDAQ new year lows beats new highs.

Jane Fox : 9/6/2006 12:35:58 PM

* NYSE VOLUME 676.5M
* NYSE HAS 666 ADVANCERS
* NYSE HAS 2,524 DECLINERS
* NYSE HAS 124 ISSUES UNCHANGED
* NYSE HAS 38 ISSUES SETTING 52-WEEK HIGHS
* NYSE HAS 11 ISSUES SETTING 52-WEEK LOWS
* NASDAQ VOLUME 904.4M
* NASDAQ HAS 646 GAINERS
* NASDAQ HAS 2,212 LOSERS
* NASDAQ HAS 154 ISSUES UNCHANGED
* NASDAQ HAS 18 ISSUES SETTING 52-WEEK HIGHS
* NASDAQ HAS 20 ISSUES SETTTING 52-WEEK LOWS

Jane Fox : 9/6/2006 12:33:15 PM

These pretty much tell you what kind of day we are having. I mentioned yesterday that I thought YM would have to retrace because the RSI was getting too overbot and, of course, that comment was meant for all markets. Link

Marc Eckelberry : 9/6/2006 12:24:36 PM

Lots of puts out there, once again. The low VIX made me think short starting Friday, but now all of a sudden, it's back at decent levels. In other words, watch yourself if short. It's not going to be that easy.

Marc Eckelberry : 9/6/2006 12:22:56 PM

Although 1565 has key support this week, below 1582.

Marc Eckelberry : 9/6/2006 12:22:36 PM

NQ 1582 is not only 38.2% but bearish wedge support, which I should break. I am patiently waiting for NQ 1552, monthly pivot. Feel like staying short until then.

Marc Eckelberry : 9/6/2006 12:16:27 PM

Absolutely astounding how we have been trading in exact opposition to last year's calendar, on a weekly and monthly basis. If we are to keep this pattern, then we should sell into the 15th of this month and then resume the rally. I think the TXN update on 9/11 could be the catalyst to get things going again if we come into it oversold. Mark that on your calendars.

Marc Eckelberry : 9/6/2006 12:12:05 PM

NQ finds support once again at 38.2% 2006 1582.

Marc Eckelberry : 9/6/2006 12:17:18 PM

Yesterday, I noted the exact hit and failure of NDX at 50% 2006 (1604.15) and that was all she wrote for now. SMH broke down below 33.50, a key level. We should keep the bearish pattern probably for another week, but I must add that QQQQ 39 max pain will hold some weight. I think October might surprise many and not be the hell everyone expects. In fact, 1998 looks like a repeat in many ways. What bulls need to watch is NDX 20 monthly MA (1588). If we close back above that level in September, then I would not be so sure shorting October is the smart move. But for now, I am bearsih very short term and bullish medium term.

Keene Little : 9/6/2006 12:07:07 PM

YM is going more sideways while ES inches lower. I'd like to see YM getting closer to 11400 for support to try a long on that one there. ES 1304 still looks like it could be good support to scalp a long play (or who knows, it might even rally back to a new high).

Tab Gilles : 9/6/2006 11:57:59 AM

Follow up to annotated chart posted 8/29 3:34 PM... Link

Currently...daily... Link

weekly Link

PnF Bullish PO $26.50. Link

Tab Gilles : 9/6/2006 11:44:52 AM

$NDX back in August 2004 when it bottomed and rallied into the fall that year... Link

Now forward 2 years to this July/August...

daily... Link

and weekly.... Link

Currently, NDX trading above 10,20, & 50 ma's... Link

PnF chart has bullish PO of 1620 Link

Weekly $NASI still bullish Link

$NDXA200/$NALOW/$BPNDX/$NASI weekly Link

$NALOW/UOPIX Link

Profund UltraOTC (UOPIX) entry level 6/27 @ $20.27...yesterday's close $21.96 up +8.33%. Link

Keene Little : 9/6/2006 11:28:46 AM

As the market works off its overbought conditions, at least on a short term basis, it looks like ES 1304 and YM 11400 should provide a bottom for a bounce. Then we'll get to see what kind of bounce develops. I'm still short ES 1316 and will probably cover at 1304 if given the chance today. I'll try a small long position from there and see if it amounts to anything. I'm debating whether to hold onto my short and hedge it with a YM long, especially since the DOW is relatively stronger today.

Jane Fox : 9/6/2006 11:04:32 AM

WASHINGTON (MarketWatch) -- Securities regulators are now investigating more than 100 companies in connection with possible fraudulent reporting of stock option grants, Securities and Exchange Commission Chairman Christopher Cox said Wednesday.

Cox told the Senate Banking Committee in prepared testimony that some enforcement actions "will be forthcoming in the future."

He said companies involved span several industries and include large and small firms.

Cox is one of several officials testifying at two congressional hearings Wednesday about stock options grants. Timing of those grants to executives has grabbed regulators' and investors' attention, and the SEC has charged former Brocade Communications Systems Inc. and Comverse Technology Inc. executives in connection with "backdating" options grants.

In a separate hearing before the Senate Finance Committee, IRS Commissioner Mark Everson told senators his agency is forging a new effort to examine executives' pay, including stock options.

Jane Fox : 9/6/2006 10:49:35 AM

SAN FRANCISCO (MarketWatch) -- Energy stocks opened lower Wednesday, hit by a continued slide in crude oil prices and a Citigroup downgrade of refiners Sunoco Inc. and Valero Energy Corp.

In early action the Amex Oil Index ($XOI) was off 1.7% at 1,136 points, with Sunoco (SUN) leading percentage decliners, down 3.7% at $68.60 a share after Citigroup lowered its rating on the refiner to hold from buy, citing deteriorating refining margins. They lowered the company's 52-week price target to $81 from $90.

Citigroup also lowered Valero (VLO )to hold and cut its price target to $65 from $79. Valero shares were off 1.9% to $54.68.

Chevron (CVX ), which on Tuesday released promising test results from its Jack field deepwater test well in the Gulf of Mexico, was also off 15 cents at $66.18 a share while Exxon Mobil Corp. (XOM)was down 32 cents, or 0.5%, at $68.18.

The Philadelphia Oil Service Index ($OSX) was off 1% at 200.6 points, bouncing back slightly from an even weaker open, while the Amex Natural Gas Index ($XNG )was down 0.5% at 439.9 points.

The October crude oil contract on the New York Mercantile Exchange extended its slide Wednesday, slipping another 7 cents from the previous close to $68.55 a barrel, recovering from an overnight low of $67.77.

Rising oil inventories and a lack of severe hurricane activity so far this year continue to mute the bulls, who had placed big bets ahead of the summer on the likelihood of another spike in fuel prices.

Jane Fox : 9/6/2006 10:36:36 AM

I just looked on Briefing.com and I see that Crude inventories are coming out tomorrow instead of today.

Jane Fox : 9/6/2006 10:35:13 AM

Waiting for the crude inventories but so far nadda.

Keene Little : 9/6/2006 10:32:28 AM

A sharp drop this morning is being followed by a sideways consolidation. Expect lower prices.

Jane Fox : 9/6/2006 10:23:35 AM

Here is how the markets are trading in relation to their PDRs. Link

Keene Little : 9/6/2006 10:17:51 AM

ES is currently hanging onto the underside of the uptrend line from Aug 11th (about 1308.50). Next support is probably around 1304 which is a level where it found prior support and resistance and is getting close to uptrend support from the lows since Aug 23rd and the longer term uptrend line from July. But keep an eye on YM since it could find support a little earlier than that. Link

Jane Fox : 9/6/2006 10:16:47 AM

SAN FRANCISCO (MarketWatch) -- Intel Corp. shares fell as much as 2% in early trading Wednesday as investors were unimpressed with the company's plans to cut about 10% of its work force.

Intel said late Tuesday it will cut 10,500 jobs by the middle of 2007 as it looks to slash costs and boost profits amid stiffer competition from smaller rival Advanced Micro Devices Inc. The layoffs were widely expected, and some Wall Street analysts said they had anticipated Intel would cut even more jobs.

The world's No. 1 maker of computer chips said in a statement that the cuts, combined with other cost savings, will save about $2 billion in expenses next year and another $3 billion in 2008. Those savings will be slightly offset by about $200 million in severance costs.

In addition, Intel expects to reduce its 2008 capital expenditures by $1 billion.

Intel's stock, a component of the Dow Jones Industrials Average, traded as low as $19.58 shortly after the open of U.S. trading. While it had closed the previous session at a 4-month high, the stock was still down 20% since the end of 2005.

Jane Fox : 9/6/2006 10:13:33 AM

I certainly wouldn't be trying any long positions today. Link

Jane Fox : 9/6/2006 10:10:03 AM

Dateline MarketWatch - Investors are also looking to the Bank of Japan's two-day policy board meeting starting Thursday. Most economists expect the bank to leave its interest rates unchanged at 0.25%.

However, speculation has risen that BoJ governor Toshihiko Fukui will sound hawkish by signaling that a rate hike is likely later this year.

Some analysts say Fukui is likely to emphasize the elements of continuity in the bank's outlook for the economy and prices and stick to the established mantra about further policy action being gradual.

Jane Fox : 9/6/2006 10:08:46 AM

The Federal Reserve will release its Beige Book report on business conditions through the end of August at 2 p.m. Eastern time, today.

Jane Fox : 9/6/2006 10:07:32 AM

* SEC INVESTIGATING OVER 100 FIRMS REGARDING OPTION GRANTS-COX
* SEC EXPECTS MORE ENFORCEMENT ACTIONS ON OPTIONS ISSUE - COX

Jane Fox : 9/6/2006 10:05:07 AM

* AUG. ISM SERVICES NEW ORDERS 52.1% VS 55.6 JULY
* AUG. ISM SERVICES PRICE PAID 72.4% VS 74.8% IN JULY

Jane Fox : 9/6/2006 10:04:36 AM

AUG. ISM SERVICES EMPLOYMENT 51.4% VS 54.5% IN JULY

Jane Fox : 9/6/2006 9:56:16 AM

Remember 10:00a.m. Aug Non-Manufacturing ISM Business Index. Previous: 54.8.

Jane Fox : 9/6/2006 9:46:06 AM

This is just a normal retracement to burn off the overbot RSI. The bulls have nothing to worry about here. Link

Jane Fox : 9/6/2006 9:35:57 AM

VIX open above its PDH and not sure where the TRIN is - all over the map.

Keene Little : 9/6/2006 9:35:50 AM

To keep bears from getting too excited about a drop this morning, this closer view of the YM chart I posted below (10:24 PM) shows a possibility for how its ascending wedge could play out, with another new high yet to come. Support should be found at the uptrend line from the July low (currently near 11400) and then we'll have to see if the Boyz drive it back up (convincing many in the process that it's a good time to buy). Link

Jane Fox : 9/6/2006 9:35:05 AM

AD line is -1418 and of course AD volume is below 0

Jane Fox : 9/6/2006 9:19:09 AM

I am moving my charts to a different computer and need to move all the desktops and workspaces so I may be a while before I can show the commodities charts.

Jane Fox : 9/6/2006 9:16:34 AM

NEW YORK (MarketWatch) - Gold futures fell early Wednesday as dollar strength and renewed weakness in the oil market gave traders an excuse to lock in some of the metal's prior-day gains.

Gold for December delivery was last down $2.40 at $644.50 an ounce on the New York Mercantile Exchange.

The contract closed at an almost four-week high Tuesday, buoyed by physical demand as the Asian jewelry season approaches. That trend should continue in the coming weeks, according to James Moore, analyst at TheBullionDesk.com.

"While the combination of firmer dollar /softer oil have the potential to trigger profit taking, the recent pick-up in physical, investor and fund interest, coupled with more fundamental issues such as low mining output, should see gold test back towards $650-55 and our year-end target of $700/oz," he said.

Keene Little : 9/6/2006 9:06:06 AM

With the worry about higher inflation due to labor costs (and other measures) but a slowing economy, expect to hear much more about worries of stagflation over the next several months. It'll be another similarity to the 1970's. And again, if we follow that pattern (big sideways market for more than 10 years) then we can expect to see the next big move over the next couple of years (may happen a lot faster) as a drop below the October 2002 lows.

Keene Little : 9/6/2006 9:02:20 AM

Futures are getting hammered this morning and could make it tough for a recovery to a new high like I thought we were going to get. A drop below ES 1310 is a break below both ascending wedges and is obviously bearish. Watch for a retest of either uptrend line--back up to 1312 or maybe even 1315--for a failure to short.

Jane Fox : 9/6/2006 8:55:51 AM

Dateline WSJ - WASHINGTON -- U.S. productivity growth was revised higher in the second quarter, but labor costs soared at their fastest annual rate since 1990, suggesting that the U.S. economy isn't out of the woods yet on inflation.

Nonfarm business sector productivity increased 1.6% in the second quarter, matching expectations, after rising 4.3% in the first quarter, the Labor Department said Wednesday. Previous estimates had showed a 1.1% rise in second quarter productivity.

Unit labor costs -- a key gauge of inflationary pressures -- rose by 4.9%, up from the previous estimate of a 4.2% increase and above the 4.1% rate economists had expected. Labor costs in the first quarter soared 9%, up from a previous estimate of a 2.5% rise and the fastest increase since the third quarter of 2000. Compared to a year ago, labor costs increased 5%, the fastest pace since the fourth quarter of 1990.

Productivity is defined as output per hours worked. Some upward revision to second quarter productivity was expected on the heels of revised estimates of second quarter gross domestic product released late last month. The Commerce Department said GDP advanced at a 2.9% pace last quarter, up from its previous estimate of a 2.5% rise.

The median estimate of economists surveyed by Dow Jones Newswires and CNBC was for productivity to rise at a 1.6% rate in the second quarter.

Labor is considered the most important input cost to production. Higher labor costs must be either passed through by a company in the form of higher prices to its customers or absorbed in the firm's profit margins.

Jane Fox : 9/6/2006 8:53:50 AM

Good morning. My overnight charts for ER and NQ are missing data from yesterday so I will only show ES and YM. Both ES and YM have broken their respective PDLs. Link

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