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Marc Eckelberry : 10/9/2006 2:34:03 AM

The dollar will tell you how much real panic there is. Usually, unless it is an attack on the US, there is a flight to safety by buying dollars, so the dollar should rise. Gold is going up along with oil, which in turn is going up on the OPEC news. Equities could be the hardest hit should Asian currencies get hurt. Watch NQ support at 1691/1692. Next level is 1684, which should hold, unless things get really bad in Asia. There is no real panic, but US futures are unable to get a bid at lows. I am short NQ from Friday. If you are as well, stops should be lowered to 1707.25 and target 1684 at first. If that doesn't hold, we should move pretty quickly to the bottom of the channel and weekly R1 at 1656. Bonds are closed tomorrow so equities will be flying on their own. If there is a rally attempt, it should stall at NQ 1704, channel resistance. But I doubt we will get past 1700, unless the whole event turns out to be a fluke. Equities are overbought and at resistance already so there is no need for anyone to chase this. Big week for earnings so traders could play it safe by booking profits at this point. Just note that it is very likely the cash strapped North Koreans shorted Asian currencies and markets ahead of this and they will have to cover at some point.

Keene Little : 10/9/2006 12:24:03 AM

As I looked at the ES and YM charts on Friday I had two different impressions about what could happen on Monday. Whether or not the N. Korea news will have an impact Monday morning is difficult to say. We'll have to wait for the cash market to open and potentially different news.

I showed a chart of SPX on Friday to point out that we could be set up for a kiss goodbye on Monday morning. Here's the same chart for ES with the same setup. After breaking back inside its ascending wedge on Friday ES bounced back up to the line at the close. An immediate drop from there will give this chart a bearish look. Link

The DOW has been relatively stronger and YM shows a more bullish possibility since it pulled back to the top of its ascending wedge and bounced off it on Friday afternoon. As long as Friday's low continues to hold then this chart looks bullish for another leg higher. Link

Even with the more bullish setup on YM I'm thinking we should be looking for only one more new high to finish the EW count for the rally and then start a much larger pullback at a minimum. The more immediately bearish ES chart says that last high was on Thursday and the gap down on Friday was just the start of something bigger to the downside. I'll let price show me the way at this point.

Marc Eckelberry : 10/8/2006 11:44:28 PM

Some panic building as N. Korea seems to have tested a nuke. Oil bid above 60 is not helping. Don't be a hero.

Keene Little : 10/8/2006 11:42:05 PM

With the news of N. Korea testing a nuclear weapon it dropped equity futures. YM is currently down 32 points and ES is down 4. Just as predictably gold is rallying, up about $7.

Keene Little : 10/8/2006 11:27:57 PM

Monday's pivot tables: Link and Link

OI Technical Staff : 10/8/2006 9:59:59 PM

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

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Jeff Bailey : 10/8/2006 4:41:15 PM

Closing Internals found at this Link

Jeff Bailey : 10/8/2006 4:35:44 PM

Closing U.S. Market Watch found at this Link

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