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Keene Little : 11/9/2006 10:23:34 PM

Friday's pivot tables: Link and Link

OI Technical Staff : 11/9/2006 9:59:59 PM

The Market Monitor has been archived.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

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Tab Gilles : 11/9/2006 8:46:35 PM

Open Positions Portfolio & Stock Watch List Link

$NAHGH/$NALOW/$NDX < Link

$NDXA50, $NDXA150 & $NDXA200 Link Link Link

$BPNDX Link $NASI Link

Profunds UltraShort OTC & UltraShort SmallCap Funds Link Link

XLE Link

Jeff Bailey : 11/9/2006 4:47:59 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 11/9/2006 4:45:05 PM

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

Jeff Bailey : 11/9/2006 4:40:26 PM

Closing Internals found at this Link

Today's closing reading for the NASDAQ 5-day NH/NL ratio good enough to reverse back up to X (needed 70.00). (see this morning's 11:29:07 AM post/chart)

Jeff Bailey : 11/9/2006 3:51:56 PM

I will be out of the office tomorrow and won't return until Monday morning.

Keene Little : 11/9/2006 3:51:24 PM

If today's leg down is part of the correction to the Monday/Tuesday rally, two equal legs down in for ES since the high on Tuesday is at 1381. Today's low is so far 1381.25. If you shorted this move today, congrats, but don't be afraid to take some money off the table.

Jeff Bailey : 11/9/2006 3:50:10 PM

Day trade short stop alert for Red Hat (RHAT) $17.20

Jeff Bailey : 11/9/2006 3:49:25 PM

Day trade short lower stop alert for Red Hat (RHAT) $17.17 -0.17% ... to $17.20

Jeff Bailey : 11/9/2006 3:30:28 PM

Day trade short lower stop alert ... on Red Hat (RHAT) $17.19 -0.05% ... to $17.26

Jeff Bailey : 11/9/2006 3:22:06 PM

Day trade short lower stop alert ... on Red Hat (RHAT) $17.21 +0.05% ... to break even.

Jane Fox : 11/9/2006 3:17:43 PM

Egads TICKs -800 yes that is a minus

Keene Little : 11/9/2006 3:15:01 PM

I'm out of my ES long. It could be worthwhile chasing this lower but I prefer to wait for a bounce. The bulls are not going to be done yet trying to buy the dips.

Jeff Bailey : 11/9/2006 3:13:25 PM

03:00 Internals found at this Link

Keene Little : 11/9/2006 3:12:13 PM

The fat lady hasn't sung yet but I think I hear her doing her warm-ups. This daily DOW chart is bearish so whether we get another high out of this or not, we're getting some pretty good warning signals. I'm trying to scalp a long play but this chart tells me I should be thinking of some longer term short plays. Link

The fact that the DOW rallied to a new high this week (again without the Trannies so more bearish non-confirmation) and left a bearish divergence on the oscillators (if they keep rolling over) I just don't see how you can look at this bullishly. Notice RSI came up and tested its broken uptrend line and rolled back over, leaving a huge bearish divergence against the October 26th high.

It could be time for those bear call spreads and January or March put options. Just leg into them carefully and not whole hog.

Jane Fox : 11/9/2006 3:04:13 PM

I think it is pretty obvious as to who has the ball now. TRIN has returned to neutral so no longer a threat to the bears. Link

Jeff Bailey : 11/9/2006 3:03:12 PM

03:00 Market Watch found at this Link

Keene Little : 11/9/2006 2:59:05 PM

If we now get a pullback to a higher low I'll raise my stop to two ticks to a new daily low and let this ride for a bit before raising it further (preferably to breakeven asap).

Keene Little : 11/9/2006 2:57:47 PM

ES's 30-min 130-pma is at 1382.50 which is why I don't want my stop much lower than that. It needs to get a bounce going now otherwise I'll just step aside. Once we get a confirmed break down below yesterday's lows then I'll look to short the bounces.

Keene Little : 11/9/2006 2:44:24 PM

This is how much ES dipped below its uptrend line from Sept 11th yesterday when it tagged its 30-min 100-pma which it's currently doing at 1383.50. I'm going to try a long again here, stop at 1381.50. Quick test to see if support holds.

Jeff Bailey : 11/9/2006 2:42:55 PM

Day trade short alert ... for Red Hat (RHAT) $17.36 +0.93% here, stop $17.53, target $17.05

Jeff Bailey : 11/9/2006 2:35:29 PM

GOODYEAR SOARS AS SALES INCREASE

DJ- Shares rise 15% after firm reports sales rose 5% to $5.28 billion. It posts loss of $48 million, or 27c a share, from year-ago profit of $142 million. Results include charges of 71c a share.

GT $17.50 +15.35% Link ...

Keene Little : 11/9/2006 2:24:31 PM

YM would have two equal legs down at 12131 in its pullback from yesterday's high. If this is just part of a corrective sideways consolidation, that should be support.

Jeff Bailey : 11/9/2006 2:23:39 PM

SAM'S CLUB TO ACCEPT MASTERCARD

DJ- Warehouse club division of Wal-Mart, Sam's Club, says it will begin accepting the credit card at all U.S., Puerto Rico and Canada locations.

MA $88.59 +0.16% (recent IPO)

WMT $46.76 -0.57% Link ...

Jeff Bailey : 11/9/2006 2:19:05 PM

JUNK BONDS BREAK ISSUANCE RECORD

DJ- Global junk-bond issuance hits record $211.7 billion for 2006 to date, surpassing the previous yearly record of $210.8 billion set in 2004. October sets single-month record with $30.5 billion in new issuance.

Jeff Bailey : 11/9/2006 2:17:34 PM

QQQQ $42.96 -0.16% .... giv'n it up. (see 01:00 Internals)

Keene Little : 11/9/2006 2:16:44 PM

ES's uptrend line from Sept 11th, where it found support on its pullback yesterday, is now at 1385.25 so watch to see if it continues to act as support. The way this has been chopping lower still gives me the impression it's a corrective pullback.

Jeff Bailey : 11/9/2006 2:10:05 PM

Mr. Reid's views/policies for Northern Nevada (Mining, Economic Development, Sportsmen, Taxpayers, Health Care, Education, Transportation) Link

Western Nevada Link

Southern Nevada Link

Clark County Link

Jeff Bailey : 11/9/2006 2:00:06 PM

Hmmmm... might be "pro gun" Link

Jeff Bailey : 11/9/2006 1:58:46 PM

Harry Reid's official website Link

Jeff Bailey : 11/9/2006 1:56:39 PM

How are them gaming stocks holding up today?

Jeff Bailey : 11/9/2006 1:55:52 PM

AMEX Gold Bugs ($HUI.X) 339.35 +3.61% ... miners are today's sector winner.

Jeff Bailey : 11/9/2006 1:54:42 PM

REID IS STRATEGIST SET TO LEAD US SENATE

DJ- Nevada's Harry Reid is a thin-set son of a hard-rock miner; he is also likely to become the most powerful man in the U.S. Senate when Congress reconvenes in January.

Keene Little : 11/9/2006 1:49:36 PM

Linda made mention in her Wrap last night that she wouldn't be at all surprised to see the market consolidate the rest of this week before it heads higher again, as has been the pattern in its stair-stepping higher. I'm getting the same feeling. Looking at YM as an example, we could see trading stuck in a range through tomorrow before it's ready to rally out of here during opex week. Another opex push? So far it looks like it. Link

Jeff Bailey : 11/9/2006 1:49:31 PM

GREENSPAN DOESN'T SEE POLICY CHANGE

DJ- Former head of Fed says he would be surprised if Democratic congressional victories led to major changes in economic policy. Adds that 'you'd be hard pressed to find out what the Democratic agenda is.'

Jeff Bailey : 11/9/2006 1:47:39 PM

VIACOM 3Q NET FALLS 16%, BACKS VIEW

DJ- Earnings drop to $356.8 million, or 50c a share, as revenue rises 7% to $2.66 billion. Items cut profit by 1c a share. Analysts expected EPS of 48c. CFO Michael Dolan will be replaced by CAO Thomas Dooley.

VIA $38.51 -2.92% Link

Jeff Bailey : 11/9/2006 1:43:56 PM

JC PENNEY 3Q NET SOARS 23%

DJ- Earnings reach $287 million, or $1.26 a share, beating expectations of $1.23 a share. Sales rise 6.7% to $4.78 billion, as same-store sales increase 5.2%. Firm sees 4Q and full-year earnings beating Wall Street estimates.

JCP $80.01 +2.31% Link ...

Jeff Bailey : 11/9/2006 1:35:33 PM

mini-Silver (YI06Z) $13.08 +4.23% ... gets the trade at WEEKLY R2 ($13.07)

Jeff Bailey : 11/9/2006 1:17:10 PM

01:00 Internals found at this Link

Note: This morning's 11:00 AM TRIN, TRINQ and VIX now correct.

Keene Little : 11/9/2006 1:13:21 PM

There are a couple of things I don't like about the long side here--lack of participation of the SOX even on a relatively good day for techs, and the banks, brokers and trannies are down--but the pattern of the indices looks like it could rally out of this. But if ES drops below 1385 then something more bearish is probably happening.

Keene Little : 11/9/2006 1:06:24 PM

This is looking more and more like a bullish consolidation since yesterday. I'm going to buy this dip and see if it works--a smaller position and slightly wider stop.

Jane Fox : 11/9/2006 1:04:51 PM

These are talking to you loud and clear. This is not a day to trying trading. Link

Keene Little : 11/9/2006 1:04:06 PM

The Boyz are back from lunch. Now we'll see if they're spiking it down to then buy into it.

Jeff Bailey : 11/9/2006 1:02:34 PM

01:00 Market Watch found at this Link

Keene Little : 11/9/2006 12:47:08 PM

Gold may have also topped at today's high. Here's an updated chart that I've been using in my Wraps. Today's high was another test of the broken uptrend line from August 2005. Link

Keene Little : 11/9/2006 12:35:16 PM

Gold has rallied nicely today. But be careful about a potential bearish divergence that might show up on this leg higher. I show some Fib projections lining up just above 643 (today's high so far is 636.50) which crosses the top of a potential ascending wedge tomorrow morning. This could be a good short play setup tomorrow if it rallies a little further and looks to be rolling over with a negative divergence. Link

Jane Fox : 11/9/2006 12:33:13 PM

CBS "60 Minutes" correspondent Ed Bradley has died from leukemia at the age of 65

Jeff Bailey : 11/9/2006 12:28:19 PM

Barrick Gold (ABX) $30.04 +2.10% ... sticks its head above WEEKLY S1 ($30.03)

Keene Little : 11/9/2006 12:23:44 PM

As far as today's pattern goes, it's just ugly. I can't figure out if it should pull back further or is ready to rally. I see no good setups for the indices and am therefore remaining flat.

Jeff Bailey : 11/9/2006 12:23:16 PM

I'm showing 1,204 contracts have traded so far today in the ABX-LF. OI as of last night's close was 1,597.

November $30 call/put OI just about even at 8,022/8,804.

Keene Little : 11/9/2006 12:21:45 PM

The rally in the DOW has been following a very consistent pattern of stair-steps higher since August and has been averaging about 130 points per step as shown in this chart: Link

Last week saw a slight deviation with a little larger pullback than previous ones but typically once a higher step has been reached it has tended to use it as support. The latest step is around 12120 (cash). If this continues to hold as support, the next higher step is near SOW 12250. When the DOW breaks its uptrend (currently near 12050) and starts breaking down through these steps then we'll know we have a trend change. Obviously not yet.

Jeff Bailey : 11/9/2006 12:13:28 PM

Swing trade bullish call alert ... Let's take three (3) of the Barrick Gold Link ABX Dec. $30 Calls (ABX-LF) for $1.25.

ABX $29.95 +1.80%

Target $33 in the underlying.

Jeff Bailey : 11/9/2006 12:01:52 PM

StreetTracks Gold (GLD) $62.92 +2.96% ... $0.40 box chart (to look like futures) at this Link

Jeff Bailey : 11/9/2006 11:59:26 AM

December Gold (GC06Z) ... PnF chart from Dorsey/Wright at this Link

Jeff Bailey : 11/9/2006 11:52:39 AM

mini-gold (YG06Z) with my reverse h/s retracement at this Link

Keene Little : 11/9/2006 11:48:30 AM

ES's uptrend line from last Friday is now at 1388.25. I can't quite figure out if the consolidation since yesterday afternoon is a bullish or bearish pattern. So I remain flat until a setup becomes more obvious. The little negative reaction to the Michigan Sentiment is not amounting to much of a move. Still trading in today's tight range.

Jeff Bailey : 11/9/2006 11:43:42 AM

The reverse h/s pattern objective on YG (head 566.90 and neckline 611.10) is 655.30.

Jeff Bailey : 11/9/2006 11:40:38 AM

MICHIGAN SENTIMENT INDEX FALLS TO 92.3

DJ- University of Michigan's mid-November report on consumer sentiment falls modestly. November's preliminary consumer sentiment index slips to 92.3 from 93.6 in October. Economists projected the index would remain at 93.6.

Jeff Bailey : 11/9/2006 11:33:14 AM

Coeur d'Alene Mines (CDE) $5.19 +3.38% ... I'm suggesting traders do NOTHING with the covered call trade as profiled.

Long CDE from $4.84, wrote Nov. $5 Calls for $0.15. OBLIGATED to sell at $5.00 + $0.15 = $5.15 if exercised.

Jeff Bailey : 11/9/2006 11:31:00 AM

Gold is surging ... YG06Z $632.80 +2.31%

Jeff Bailey : 11/9/2006 11:29:07 AM

NASDAQ NH/NL Ratio Chart at this Link (per 11:21:47)

f= five day ratio, X/O=10-day ratio

Jeff Bailey : 11/9/2006 11:21:47 AM

11:00 Internals found at this Link

Note: Should NASDAQ NH/NL 5-day ratio finish with 73.4% reading, that would be good enough for a reversal back higher (70.00%). Recent inflection low 64.00 came at area of support (66.00% buy signal)

Keene Little : 11/9/2006 11:12:50 AM

So far the day is relatively quiet as far as typical Thursday's before opex. Maybe traders are taking a breather after the recent volatility and election worries. NQ remains the most bullish as techs lead the way this morning. It's close to testing this morning's opening high so we'll see if the bulls can push it higher or if instead we consolidate in a tight range.

Jeff Bailey : 11/9/2006 11:02:40 AM

11:00 Market Watch found at this Link

Jeff Bailey : 11/9/2006 10:54:55 AM

Goodyear Tire (GT) $16.75 +10.41% Link ... "burning rubber"

Jeff Bailey : 11/9/2006 10:51:03 AM

IWM $76.33 -0.33% ... November Option Montage at this Link

"Max Pain" looks somewhere around $76 to me. Maybe just under at $75.75.

My one source has been stuck at $70.00 for months and I believe it incorrect when looking at OI.

Jane Fox : 11/9/2006 10:45:27 AM

The TRIN was telling you the buyers were lurking in the cervasses.

Keene Little : 11/9/2006 10:43:31 AM

MSFT has had a good run since June and is now approaching the top of what looks like a bear flag pattern on its monthly chart (the top is near 29.50 and MSFT is currently trading 29.22). Needless to say if this is a bear flag pattern that marks the end of its correction to the 2000-2002 decline this is quite bearish. The next big leg down is about to start. Link

Jeff Bailey : 11/9/2006 10:35:17 AM

Weekly Nat. Gas Storage Table at this Link ... draw of 7 bcf

Jeff Bailey : 11/9/2006 10:33:52 AM

NOAA: El Nino To Last Til Spring; Warmer Than Average Winter

DJ- El Nino weather conditions are likely to continue into spring 2007 in the Northern Hemisphere, producing "warmer-than-average" temperatures in the northern U.S., the world's largest heating oil market, the National Oceanic and Atmospheric Administration said in a report Thursday.

"The El Nino is currently weak. It will likely intensify to moderate during our winter," Vernon Kousky, NOAA's chief El Nino forecaster, told Dow Jones Newswires. "It is highly unlikely that it will become strong."

El Nino is the name given to the unusual warming of water temperatures in the equatorial Pacific Ocean which can have broad consequences across the globe.

"Typical El Nino effects are likely to develop over North America during the upcoming winter season, including warmer-than-average temperatures over western and central Canada, and over the western and northern United States," NOAA said.

"Wetter-than-average conditions over portions of the U.S. Gulf Coast and Florida, and drier-than-average conditions in the Ohio Valley and the Pacific Northwest," also are expected, the report said.

"Global effects that can be expected during November-March include drier-than-average conditions over much of Malaysia, Indonesia, some the U.S.-affiliated islands in the tropical North Pacific, northern South America and southeastern South America (Uruguay, northeastern Argentina, and southern Brazil) and along the coasts of Ecuador and northern Peru," NOAA said.

A strong El Nino sapped oil demand and combined with the Asian economic crisis and an ill-timed OPEC decision to boost oil output quotas by 10% in late 1997. Oil prices were slashed by half, trading below $11 a barrel by late 1998 and didn't recover to previous levels for nearly two years.

The U.S. Energy Information Administration, in its Short-Term Energy Outlook released Tuesday, painted a strong picture for demand for distillate fuel, the umbrella group for diesel fuel and heating oil, this winter.

For much of the winter, EIA's expectations put distillate demand, or near, generational record levels. Demand in January 2007, for example, is expected to top 4.5 million barrels a day, the most for the month since 1979.

Tancred Lidderdale, the EIA analyst who crafts the report, said most of the expected January strength is due to expected colder weather.

In the New England states, the heating oil capital of the world, the NOAA expects January to be 23.6% colder than a year-earlier, as measured by heating degree days, Lidderdale said. Heating degree days is a calculation of the average of each day's high and low temperatures for a region relative to 65 degrees. "A rule of thumb is that a 1% increase in heating degree-days increases heating fuel consumption by about 1%," he said.

Jeff Bailey : 11/9/2006 10:28:47 AM

Microsoft: Antitrust Laws Didn't Alter Key Vista Features

DJ- Microsoft Corp. (MSFT) Chairman Bill Gates on Thursday said antitrust regulation hasn't fundamentally altered the key features of the company's upcoming Vista operating system.

Gates said Microsoft has discussed Vista, the next generation of its ubiquitous Windows software, with antitrust regulators "every step of the way." He accused the company's rivals of trying to get antitrust authorities to "castrate" Vista, but insisted the product's main innovations, including heftier security features and improved performance, are still included in the software.

Gates spoke to journalists on the sidelines of an event designed to showcase some of the products Microsoft is developing. His remarks come on the same day the company finished tinkering with Vista and started producing copies that will be shipped to business users at the end of the month.

MSFT $29.22 +0.82% Link

Jane Fox : 11/9/2006 10:22:26 AM

The tajectory of these is bearish but still you have to consider the TRIN at 0.73. Link

Jeff Bailey : 11/9/2006 10:22:25 AM

Max Pain Theory Levels for November

DIA= $120 ($1 increments)

OEX= 640 (5-pt inc)

SPX= 1,360 (5-pt inc)

SPY= $137 ($1 inc)

NDX= 1,700 (5-pt inc)

QQQQ= $42 ($1 inc)

Jane Fox : 11/9/2006 10:21:04 AM

VIX has certainly turned the corner and is confirming each and every new ES low.

Keene Little : 11/9/2006 10:13:31 AM

It's possible the leg down this morning is finishing the pullback that started from yesterday's high and that we'll head for new highs again. The move down now to a new daily low could be finishing it up so watch for a reversal back up if you shorted this. A drop below yesterday's low would tell me something different is happening.

Jeff Bailey : 11/9/2006 10:08:52 AM

10:06 Market Watch found at this Link

Keene Little : 11/9/2006 10:05:27 AM

YM is testing its uptrend line from Friday here at 12180. ES's is lower at 1387. YM is now breaking its uptrend line.

Keene Little : 11/9/2006 10:03:36 AM

I'm out of my long now and waiting to see if we develop a trend down now. It's obviously a little difficult to tell right now with this volatility.

Jeff Bailey : 11/9/2006 10:03:34 AM

NASDAQ Composite ($COMPQ) 2,397.27 +0.51% Link ... did tick 2,401 20-minutes into trade. WEEKLY R2 2,399.91

Keene Little : 11/9/2006 9:58:19 AM

Another reason to be cautious about the long side here is the VIX. It has now pulled back to its broken downtrend line and the internal pattern of its pullback looks complete at this morning's low. It doesn't mean it can't go lower (especially since I've been thinking for so long that it could go sub-10 before we see a market high) but the pattern is set up for a reversal higher which could mean exactly the opposite for the stock market.

Jeff Bailey : 11/9/2006 9:58:04 AM

StockCharts.com's NASDAQ-100 Bullish% ($BPNDX) saw a net gain of 1 stock to a reversing higher PnF buy signal yesterday. Still "bull confirmed" at 63.00% Link

Keene Little : 11/9/2006 9:53:19 AM

It's a little volatile this morning. I've now raised the stop on my ES long to 1390 and I also raised my sell limit to 1396. At any moment a high could be considered the last one and I'm not willing to give much back on my long play.

Jeff Bailey : 11/9/2006 9:51:45 AM

NASDAQ-100 Tracker (QQQQ) $43.32 +0.69% Link ... edges above its January highs. That's a new 52-weeker!

Keene Little : 11/9/2006 9:47:21 AM

This pullback in YM gives me a cleaner upside target now at 12246. That would be close to ES's upside target of 1396. It needs to get going pretty quick here though.

Jane Fox : 11/9/2006 9:47:16 AM

AD volume making new daily highs here.

Keene Little : 11/9/2006 9:43:48 AM

YM has pulled back to the bottom of what looks like a little bull flag from yesterday afternoon's high.

Jane Fox : 11/9/2006 9:42:36 AM

I want to short this market so badly but with a TRIN at 0.51 and falling I don't think so.

Jane Fox : 11/9/2006 9:41:36 AM

EGads ES tests 1393 again and again it fails.

Jane Fox : 11/9/2006 9:39:46 AM

If you are short I would be watching the TRIN very carefully. It is a very bullish 0.57!

Jane Fox : 11/9/2006 9:38:47 AM

VIX opens below its PDL and is falling telling me the bulls once again have the ball.

Jane Fox : 11/9/2006 9:37:21 AM

AD line is a neutral to bearish -209 but AD volume is above 0 and climbing.

Keene Little : 11/9/2006 9:31:43 AM

This has been a pattern of late--drive it down at the open and then catch the shorts by hammering them with a buy program so be cautious of this quick move down.

Keene Little : 11/9/2006 9:28:20 AM

I should mention that I have Fibs pointing at ES 1394-1396 as an upside target for the rally that started from yesterday's low. If we get a quick tag of that area we could see a reversal and pull back for the rest of the day from there. I'm going to be watching YM 12227-12235 as a potential high.

Keene Little : 11/9/2006 9:11:20 AM

Overnight futures were relatively quiet as compared to what we've seen lately. As of yesterday just before the close I was looking for a minor new high, with an upside target near ES 1394. I'm still looking for that and then a reversal for at least a correction of yesterday's rally. As Linda had commented in her Wrap last night, the Thursday before opex has typically been volatile so we'll watch for that possibility today.

Jane Fox : 11/9/2006 9:09:39 AM

Notice how ES was not able to break its PDH yesterday and then once again tested this level (1393) overnight and was still not able to break it. YM also was not able to break its PDH yesterday or overnight.

With the Democrates taking over control of Congress we are left with a great big "?" as to what will happen from this point on. Since the market does not like uncertainty I don't think we have much upside from here. That does not mean I think the markets will fall significantly, there is too much bullishness out there for me to think the bears will have a chance, but I do believe we will see, at best, a sideways move until the country can figure out what our government will look like for the next 2 years. Link

Jane Fox : 11/9/2006 8:52:40 AM

WASHINGTON (MarketWatch) - Initial filings for state unemployment benefits dropped back to their recent range, falling by 20,000 to 308,000, the Labor Department reported Thursday.

The four-week average of new claims -- which smoothes out one-time distortions such as weather or holidays -- slipped by 250 to 311,250.

Meanwhile, the number of people collecting unemployment benefits in the week ending Oct. 28 rose by 43,000 to 2.45 million, a seven-week high. The four-week average of continuing claims rose to 2.44 million.

The insured unemployment rate - the percentage of all those who are covered by unemployment insurance who are collecting benefits - rose to 1.9% from 1.8% previously

Jane Fox : 11/9/2006 8:51:56 AM

WASHINGTON (MarketWatch) -- Led by falling oil prices, prices of imported goods dropped 2% for the second straight month in October, matching the largest decline in three years, the Labor Department reported Thursday.

With the recent declines in oil prices, import prices are down 0.1% over the past 12 months, the first year-over-year decline since September 2002.

The decline in prices was twice the 1% expected by economists surveyed by MarketWatch.

The report shows little inflationary pressure from abroad.

Jane Fox : 11/9/2006 8:51:08 AM

WASHINGTON (MarketWatch) -- Fewer and less costly oil imports helped reduce the trade deficit in September, the Commerce Department said Thursday.

After hitting record highs in July and August, the trade deficit narrowed 6.8% in September to $64.3 billion, and was below the consensus forecast of Wall Street economists of $66.3 billion.

This is the lowest monthly trade deficit since April. It was the largest monthly drop in the deficit since December 2004.

The U.S. remains on track to post a new record annual trade deficit in 2006. For the first nine months of the year, the deficit totaled $586.2 billion, up 12.3% from the same period last year, when the U.S. set a record annual deficit of $716.7 billion.

Because much of the decline was anticipated by the department, the decline in the deficit was not expected to have much impact on the government's revised estimate for third-quarter gross domestic product growth to be released at the end of the month.

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