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Keene Little : 11/28/2006 11:03:05 PM

Wednesday's pivot tables: Link and Link

OI Technical Staff : 11/28/2006 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The Market Monitor has been archived.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 : 11/28/2006 9:58:10 PM

Well ... I'm going to go grab a some dinner.

Jeff Bailey : 11/28/2006 9:35:18 PM

Doh! ... Software Bullish % (BPSOFT) gets an X to 54% and still "bull alert" ... needs 60% to achieve "bull confirmed."

Jeff Bailey : 11/28/2006 9:23:02 PM

Gulp! ... that's what I'm thinking too!

Keene Little : 11/28/2006 9:21:52 PM

If RHAT takes out today's low, dropping it back below its 20-dma, short that puppy. MACD has remained below zero on its bounce and it looks like it's in an established down trend. Volume has been dying during its bounce from its October low. Mmm, mmm, mmm, a yummy short.

Jeff Bailey : 11/28/2006 9:17:54 PM

Not even Red Hat(RHAT) ?

Keene Little : 11/28/2006 9:15:32 PM

For stocks? No. ;-)

Jeff Bailey : 11/28/2006 9:15:46 PM

Certainly some dollar implication with the EWJ ... should the dollar rocket off 83.00 and go back to 87.00, it could be "sianara" and up-up-away with the EWJ.

Jeff Bailey : 11/28/2006 9:12:52 PM

EWJ and just about any etf is going to look choppy here in the U.S. A gap-fest for sure.

Jeff Bailey : 11/28/2006 9:10:31 PM

Keene ... you like anything long? ;)

Jeff Bailey : 11/28/2006 9:07:32 PM

YG backing off of $640.20 high at $639.10.

Keene Little : 11/28/2006 9:07:06 PM

I see what you mean. But the choppy price action in EWJ since June doesn't help me get a feel for where this one is going. A downtrend line from May through its October 26th high is currently near the 200-dma at 13.77 (closed at 13.42 today). I can't say I like it either way for a trade but if I had a to pick one I'd say I would want to short it at that 13.77 level. But this one has been cycling up and down across all its daily moving averages and that makes me say "next".

Jeff Bailey : 11/28/2006 9:06:58 PM

YM is up 10 at 12,163

Jeff Bailey : 11/28/2006 9:05:42 PM

Dollar is "holding tough" with dx00y 83.14. Low so far 83.05.

Jeff Bailey : 11/28/2006 9:01:29 PM

Check out those various bullish % I showed Keene. Quick snapshots of internals (bullish %, then 50-day and 150-day)

Jeff Bailey : 11/28/2006 8:57:46 PM

Check out a EWJ with downward trend from the May highs, to that 09/05/06 relative high. Extend the trend and it marks that recent 11/20/06 and 11/21/06 relative lows.

Keene Little : 11/28/2006 8:54:02 PM

Jeff, I haven't looked at any numbers behind the chart so I have no clue about any of its internals. If I go with just the chart I'd say I'd want to short a retest of its 200-dma and broken uptrend line since at least one can keep their stop close above.

Jeff Bailey : 11/28/2006 8:49:45 PM

What do you think of Japan's internals Keene?

Jeff Bailey : 11/28/2006 8:39:30 PM

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

Keene Little : 11/28/2006 8:36:58 PM

It will be interesting to see if the P&F buy signal on the NIKK 225 works or if instead its broken uptrend line from June/July (sound familiar?) and broken 200-dma at 16026 act as resistance now. Link

Jeff Bailey : 11/28/2006 8:29:55 PM

iShares Japan (EWJ) $13.42 +1.66% ... unconventional $0.20 box Link

Jeff Bailey : 11/28/2006 8:29:51 PM

Hmmmm...

Jeff Bailey : 11/28/2006 8:29:45 PM

Had a decent little bull trade in the EWJ back in mid June (MM 06/13/06) from the $12.37 level.

Jeff Bailey : 11/28/2006 8:24:16 PM

Japan 30-Week Bull % (30TO) at this Link

Jeff Bailey : 11/28/2006 8:19:32 PM

Japan 10-Week Bull % (TWTO) at this Link

Jeff Bailey : 11/28/2006 8:13:23 PM

Tokyo Bullish % (BPTO) at this Link

Jeff Bailey : 11/28/2006 8:08:35 PM

Nikkei rises above 16,000 on industrial output data Reuters Story Link

Jeff Bailey : 11/28/2006 8:07:38 PM

Nikkei 225 ($NIKK) up 146, or +0.92% at 16,001.41 Link ... that's a triple top buy signal.

Jeff Bailey : 11/28/2006 8:04:43 PM

Live Forex Link

Jeff Bailey : 11/28/2006 8:03:36 PM

YG $640.00

Jeff Bailey : 11/28/2006 7:34:38 PM

Live ZG and YG Book via CBOT Link

Jeff Bailey : 11/28/2006 7:27:47 PM

dx00y 5-minute interval chart (all sessions) Link

Jeff Bailey : 11/28/2006 7:23:36 PM

Here come's that test! dx00y 83.08 (30-min delayed) ...

Jeff Bailey : 11/28/2006 7:12:31 PM

Daily/Weekly/Monthly Index Pivot Matrix found at this Link

Let's set an alert at that dx00y DAILY S2/WEEKLY S1 correlation.

See today's VIX.X action and jump to MONTHLY R1. This suggests to me that there might be some "jitters" still in play.

We can perhaps envision how a dx00y break of DAILY S2/Weekly S1 with no help from MONTHLY levels a quick move lower still.

Now, in last night's Market Wrap I also showed this chart of the dx00y with blue and PINK retracement. See that 82.987. Make the tie with the Pivot Levels and let's not go to sleep. Link

Jeff Bailey : 11/28/2006 5:47:13 PM

Freddie Mac Study Refutes Fed on GSE Benefit To Mortgages

DJ- A study commissioned by Freddie Mac (FRE) found that it and rival Fannie Mae (FNM)provided a huge benefit to homeowners last year because of the role the government-sponsored enterprises play in the housing market.

The 48-page study, authored by James Miller, a former budget director during the Reagan Administration, and James Pearce, vice president of Welch Consulting, directly contradicted other studies, specifically ones published by Federal Reserve economists who have alleged the GSEs have a negligible impact on the price of mortgages.

"In 2005, borrowers saved between $16.2 billion and $20.7 billion in mortgage interest costs because of the GSEs," Miller said in an interview posted on Freddie Mac's Web site.

Subtracting the funding advantage Fannie Mae and Freddie Mac enjoy, Miller said the "net benefit" of the GSEs was between "$3.1 billion and $16.0 billion per year."

The new report updates another study Miller did on behalf of Freddie Mac in 2001, but the assertions have been debated ever since.

In May, five Fed economists alleged Fannie Mae and Freddie Mac's presence in the housing market offered close to zero benefit to home buyers.

For example, their study argued that the GSEs' presence only lowered interest rates by two basis points from April 1997 through September 2005.

"Current estimates of the mortgage rate reduction are not statistically different than zero," the Fed economists said at the time.

Freddie Mac didn't try to hide the fact that Miller and Pearce's findings directly challenged these assertions.

On Freddie Mac's Web site, Miller was asked, "Economists at the Federal Reserve have published a study that concludes the GSEs have virtually no impact on mortgage rates. Your study obviously contradicts their conclusion. Who's right?"

"The study by the Fed economists produces estimates that are what researchers call 'outliers' - they are substantially below the range of estimates produced not only by our work but also from quite a few other independent researchers," Miller said.

Fannie Mae and Freddie Mac are recovering from separate accounting scandals, and lawmakers have disagreed over how to set up new oversight for the companies. Both GSEs buy mortgages on the secondary market and then repackage them into mortgage-backed securities, among other things. Combined, Fannie Mae and Freddie Mac hold $1.4 trillion in their mortgage portfolios, a level that critics allege is too high.

In their study, Miller and Pearce echo statements made by both Fannie Mae and Freddie Mac, saying that the best way to capture the risks posed by the portfolios is by oversight, not by reducing their size.

"Placing statutory limits on the GSEs' portfolios would reduce the liquidity in the mortgage market and constrain growth in homeownership, while reducing risk only marginally at best," the study said. "Accordingly, we conclude that the current path of more focused, effective regulation is the best way to maximize the net contributions of the GSEs."

In May, the Fed officials disagreed, saying that the "only" purpose of the large portfolios was to boost "GSE shareholders' profitability, with no obvious public benefit."

Freddie Mac didn't disclose how much it paid for the study.

Jeff Bailey : 11/28/2006 5:27:22 PM

Closing Internals found at this Link

Jeff Bailey : 11/28/2006 4:53:21 PM

Closing U.S. Market Watch found at this Link

Keene Little : 11/28/2006 4:37:42 PM

A thought occurred to me as to what might be playing out here. NQ looks like it's forming a small ascending wedge for its bounce and when I looked at ES and YM I see the same pattern. The top of the wedge for ES is the broken uptrend line from July and the bottom of the wedge is the uptrend line from this morning's low. This is a slight modification to the sideways triangle idea but basically the same thing--it should be followed by another move down. Link

The move down from last week's high is not an easy count but if I have the correct wave count then a new low should be accompanied by bullish divergences and would be a good buying opportunity for a larger upward correction. There's even the possibility that we'll see the market head for new highs but that's an alternative wave count that I'll be watching after the bounce gets going.

There's also the possibility that the current bounce will lead to another strong decline, as opposed to a minor new low that I depict on the chart. If a new decline builds up some speed and is not accompanied by bullish divergences then I will not be buying it. I mention it only as a possibility to watch for.

Jeff Bailey : 11/28/2006 4:23:00 PM

Most actives today were ... QQQQ $43.77 +0.25%, CSCO $27.03 +4.76%, SPY $139.02 +0.43%, IWM $77.06 +0.3%, INTC $20.98 -0.19%, LVLT $5.13 +2.60%, MSFT $29.39 -0.30%, SUNW $.35 -0.18%, LU $2.56 +1.18% and SIRI $4.17 +1.21%

Jeff Bailey : 11/28/2006 4:19:47 PM

Wow! ... CSCO $27.03 +4.76% had a rather bullish day.

Keene Little : 11/28/2006 4:15:05 PM

While it's still possible we'll continue a sideways consolidation tomorrow, it appears we're going to get more of a standard 3-wave bounce and two equal legs up off this morning's low is at ES 1393. It appears it will struggle to get across its broken uptrend line from July, currently approaching 1391, and therefore I'd say 1391-1393 is the area to watch for a short play.

We should be due another leg down in the decline and it'll either make a minor new low before setting up a bigger bounce or we'll get another big decline to match Monday's so it's worth a try on the short side. If we have some bearish things developing here then another big leg down is not out of the question.

Jeff Bailey : 11/28/2006 4:06:57 PM

Dress Barn (DBRN) $20.50 -3.84% Link ... jumps to $22.00 on earnings.

Jeff Bailey : 11/28/2006 3:57:30 PM

TRIN 1.07

Jeff Bailey : 11/28/2006 3:57:16 PM

12,173 looks like that might have been it intra-day.

YM 12,161 ....

BIX 390.24 just can't muster the strength to get WEEKLY S2.

Jane Fox : 11/28/2006 3:57:05 PM

Economic Reports for tomorrow include.

8:30a.m. 3Q Preliminary GDP. Expected: +1.8%. Previous: +1.6%.

8:30a.m. 3Q Preliminary Corp Profits. Previous: +2.1%.

10:00a.m. Oct New Home Sales. Expected: -2.8%. Previous: +5.3%.

2:00p.m. Fed's Beige Book.

Keene Little : 11/28/2006 3:38:12 PM

Two equal legs up today for NQ is at 1791.25 which is just above a 38% retracement of its decline at 1790.50.

Jeff Bailey : 11/28/2006 3:36:04 PM

Red Hat (RHAT) $17.21 +1.35% ... DAILY Pivot $17.15, WEEKLY Pivot $17.31

Jeff Bailey : 11/28/2006 3:35:07 PM

Sirius (SIRI) $4.17 +1.21% ... reclaimed its DAILY Pivot ... WEEKLY Pivot at $4.19.

Keene Little : 11/28/2006 3:34:33 PM

Upside risk for a short play on ES is at least to 1393 which is where today's bounce off this morning's low would have two equal legs up.

Jeff Bailey : 11/28/2006 3:33:43 PM

Barrick Gold (ABX) $30.01 +1.24% ...

Jeff Bailey : 11/28/2006 3:29:57 PM

YM long stopped alert 12,159

Keene Little : 11/28/2006 3:29:00 PM

ES's broken uptrend line from July is now at 1390.50 and that's where it just bumped its head. That trend line could be a tough nut to crack. Two equal legs up off the last low of 1383.25 near 1:30 PM gives us 1391 for an upside target, close to its broken trend line. I'd try a short there.

Jeff Bailey : 11/28/2006 3:20:43 PM

TRIN 1.00

Jeff Bailey : 11/28/2006 3:20:34 PM

YM long raise stop alert to 12,159

YM 12,170

Jeff Bailey : 11/28/2006 3:20:04 PM

My thought process at least....

Jeff Bailey : 11/28/2006 3:19:45 PM

TRIN 1.04 ... need below 1.00 to get intra-day high on YM

Jeff Bailey : 11/28/2006 3:19:19 PM

YM 12,160

Jeff Bailey : 11/28/2006 3:19:02 PM

VIX alert 11.67

Keene Little : 11/28/2006 3:18:30 PM

Testing this morning's highs here.

Jeff Bailey : 11/28/2006 3:18:02 PM

TRIN 1.05

Jeff Bailey : 11/28/2006 3:17:33 PM

YM long raise stop alert to 12,145

YM 12,162 and a moment of truth.

Jeff Bailey : 11/28/2006 3:15:48 PM

TRIN 1.15

VIX 11.77

VXO 11.06

Jeff Bailey : 11/28/2006 3:14:20 PM

YM long raise stop alert to 12,135

YM 12,153.

Jeff Bailey : 11/28/2006 3:13:47 PM

03:00 Internals found at this Link

Keene Little : 11/28/2006 3:05:03 PM

Not surprisingly we have the different time frames up through 60-min charts telling us different things. It's a result of the choppy mess today. It's either short term bullish for another leg up to match this morning's or it's bearish for another leg down to a minor new low to finish the decline. I'm leaning towards a downside resolution but basically it's a flip of a coin here.

Jeff Bailey : 11/28/2006 3:02:40 PM

03:00 Market Watch found at this Link

Jeff Bailey : 11/28/2006 2:59:09 PM

Some traders won't touch a long with 21-pd and 50-pd under the 200-pd.

Jeff Bailey : 11/28/2006 2:58:11 PM

Probably a critical juncture for YM on 3-minute interval chart. YM 12,137

Keene Little : 11/28/2006 2:56:36 PM

If this little pullback will be followed by another little bounce to finish the sideways triangles, watch for support at YM 12123 and ES 1385. And then a small bounce from there, if we get it, should set up the short play for a drop to a new low. Price action is taking a looong time here so the setup might not even occur until tomorrow at this rate. And a continuation higher from here, above ES 1390, would negate the sideways triangle consolidation pattern.

Jeff Bailey : 11/28/2006 2:43:28 PM

TRIN 1.21 ... it isn't budging. This is the "gas pedal" that either fuels buying, or selling. Need less than 1.00 to get some bullish gas.

Jeff Bailey : 11/28/2006 2:42:35 PM

YM 12,135 ...

Jeff Bailey : 11/28/2006 2:42:08 PM

So .... perhaps a little more call buying/put selling in largest caps (VXO.X) and a hair less in the broader S&P 500.

Keene Little : 11/28/2006 2:41:20 PM

If ES drops back down towards 1385 now it will look like we're building a sideways triangle today and that would fit as a 4th wave correction in the decline from last week's high. It would mean another small decline (in the 5th wave of the move down) to perhaps a minor new low and from there we'd start a bigger upward correction. If it's a triangle forming then it needs a down-up sequence to finish it before the decline begins, so it might mean just more consolidation into the close.

Jeff Bailey : 11/28/2006 2:41:15 PM

VXO.X 11.11 -4.05% ... this volatility measure of OEX stocks did see an intra-day low of 11.00. DAILY Pivot 11.37 and DAILY S1 10.76

Jeff Bailey : 11/28/2006 2:38:40 PM

Can't really do anything with my YM stop of 12,119 at this point.

Jeff Bailey : 11/28/2006 2:38:05 PM

YM 12,140 ... post profile high just came at 12,150

Jeff Bailey : 11/28/2006 2:37:40 PM

C'mon you silly VIX.X 11.78 ... give bears a trigger to cover their shorts!

Jeff Bailey : 11/28/2006 2:23:36 PM

YM 12,140

Jeff Bailey : 11/28/2006 2:23:25 PM

YM 60-minute interval chart at this Link ... traded the YM long yesterday at WEEKLY S2. No buying from computers at that level. Giving 12,131 a shot today, just looking for YM to try and reclaim that trend and QCharts' DAILY Pivot of 12,190

Jeff Bailey : 11/28/2006 2:20:25 PM

StreetTracks Gold (GLD) $63.42 -0.43% ...

Jeff Bailey : 11/28/2006 2:19:58 PM

iShares Silver (SLV) $136.43 +1.09% ... breaks to new relative highs.

Keene Little : 11/28/2006 2:19:13 PM

Of course a "strong" leg up is all relative. If we get two equal legs up off this morning's low that doesn't give us a whole lot of upside potential. Good for a scalp but not much more. Even that's risky here since we could continue to chop to a new low before the leg down from last week is complete.

Keene Little : 11/28/2006 2:15:27 PM

The pullback since this morning's high continues to look like a bull flag. If the move up from this morning's low was wave-A and the pullback since then is wave-B (they're usually ugly and choppy like this) then we're due a strong bounce higher in wave-C.

Jeff Bailey : 11/28/2006 2:13:51 PM

YM traders ... with REGULAR SESSION only, I'd suggest you get a 60-minute interval chart and get the upward trend from 08/10/06 low, attach it to that 09/07/06 low, and extend that trend. It was BROKEN to the downside yesterday. Extension of that trend is current at 12,185. Get that 200-pd SMA on there too.

Jeff Bailey : 11/28/2006 2:09:49 PM

I'm pretty sure I've got my stop in the right place. Post YM profile low has been 12,122 and 61.8% dynamic at 12,121.50.

Need some strength now above 12,140.

Jane Fox : 11/28/2006 2:06:56 PM

* NYSE volume 989M
* NYSE has 1,697 advancers
* NYSE has 1,514 decliners
* NYSE has 144 issues iunchanged
* NYSE has 85 issues setting 52-week highs
* NYSE has 17 issues setting 52-week lows
* Nasdaq volume 1.3B
* Nasdaq has 1,281 advancers
* Nasdaq has 1,685 decliners
* Nasdaq has 161 issues inchanged <
* Nasdaq has 34 issues setting 52-week highs
* Nasdaq has 36 issues setting 52-week lows

Jeff Bailey : 11/28/2006 2:01:55 PM

Let's see if just a tad steepening in the curve gets equities a lift.

Jeff Bailey : 11/28/2006 2:01:21 PM

YM 12,129

Jeff Bailey : 11/28/2006 2:01:12 PM

This is a very subtle observation, but I'll make it anyway ... $FVX.X 4.513% and $TNX.X 4.523% ... BIX 390.04 -0.09% ...

Jeff Bailey : 11/28/2006 1:51:13 PM

50% of intra-day range (dynamic) is 12,130. 12,131 is a MONTHLY Pivot retracement level.

Jeff Bailey : 11/28/2006 1:49:49 PM

really want/need buyers to snap the YM back above 12,130 here.

Jeff Bailey : 11/28/2006 1:43:34 PM

YM long entry alert 12,135

Jeff Bailey : 11/28/2006 1:39:21 PM

YM long setup alert ... lets nip away at a long on a trade at 12,135, tight stop at 12,119, target 12,180.

YM 12,124 ...

Marc Eckelberry : 11/28/2006 1:30:47 PM

SPX has broken out of its channel and is trading below its 20 DMA. That's a trend change until we close back above. Forget the old rally for now. You have to switch gears. Again, buy support, sell resistance. I don't expect a decent low to be put in until NQ tests its channel around 1755/1760. QQQQ 43 will most likely be tested soon. I for one think this is the best environment for traders, a good time to bring back your technical and work it. The buy any dip crowd is going to lose money.

Jeff Bailey : 11/28/2006 1:29:10 PM

Gosh I feel/observe some pressure building.

Jeff Bailey : 11/28/2006 1:28:56 PM

TRIN 1.40 ... DAILY Pivot has been resistance all session. 1.00 has been support.

Jane Fox : 11/28/2006 1:26:57 PM

The internals have turned a number of times today and with the way they look right now I think the best trade is no trade. Link

Jeff Bailey : 11/28/2006 1:26:29 PM

VIX 12.02 -2.27% ... back to afternoon high. Jerky either side of DAILY Pivot. Looked like it might fall to DAILY S1/WEEKLY R2 correlation

Keene Little : 11/28/2006 1:21:24 PM

They're still selling into the rallies. But the choppy decline from this morning's high signifies either an ending pattern (for the last leg down in the decline from last week's high) or part of the upward correction. In either case I think chasing this to the downside could be risky. At this point I'd look for potential support levels and look to get long. Obviously this chop will make holding a trade tricky.

Jeff Bailey : 11/28/2006 1:15:58 PM

01:00 Internals found at this Link

Jane Fox : 11/28/2006 1:14:26 PM

NEW YORK (MarketWatch) -- With total dollar proceeds of nearly $7.5 billion, November is shaping up to be the richest month since March, 2002 in the market for initial public offerings, according to Thomson Financial. The biggest dollar volume month was April, 2000, when 32 IPOs raised $14.6 billion, followed by June 2001, when 14 deals raised $9.9 billion. In March 2002, eight IPOs raised $8.5 billion.

Jane Fox : 11/28/2006 1:11:29 PM

As Jeff said watch your VIX. It is testing daily lows suggesting ES will at least test its daily highs and probably break through.

Keene Little : 11/28/2006 1:08:58 PM

ES's broken uptrend line from July is now near 1390.50 so watch that level for continued resistance.

Keene Little : 11/28/2006 1:07:15 PM

If this spike up can keep going then two equal legs up off this morning's low gives us upside targets at ES 1393.75 and YM 12193.

Marc Eckelberry : 11/28/2006 1:08:11 PM

This is a trader's environment, probably all the way into mid-December, so don't fall prey to all the talk of bottoms and tops and commit at this point. Buy support, sell resistance and just day trade. Your best bet is to trade only the open and the close and ignore the middle. If you want directional, stick to commodities.
QQQQ 43.31 and COMP 2388 are what bulls need to protect. Semis are weak, so expect chop. If you must commit, wait for an extreme. Stocks are expensive for a slowing economy. SPX P/E is way too high, should be more in the 15 area or less. Do not compare to 2004 and 2005, high growth years. Expect SPX sub 1400 by year end.

Jeff Bailey : 11/28/2006 1:05:49 PM

Buy Program Premium watch your VIX.X here!

Jeff Bailey : 11/28/2006 1:02:51 PM

Sell Program Premium ... SPY $138.77 : YM 12,137

Jeff Bailey : 11/28/2006 1:02:27 PM

01:00 Market Watch found at this Link

Jeff Bailey : 11/28/2006 12:51:45 PM

Mr. Bernanke begins speech ... GLD $63.13

BIX 389.90, FVX.X 4.526%, TNX.X 4.526%, YM 12,131 , SPY 138.64, QQQQ $43.58

Jeff Bailey : 11/28/2006 12:42:56 PM

And then you have the "Generals" of the NASDAQ and the Large Caps. Here's the NASDAQ-100 Bullish % ($BPNDX) Link .

Think of the NASDAQ Composite as an army of troops. The NASDAQ-100 as the "Generals" or leaders of the troops.

Place them all on the battle field, bulls on one side, bears on the other.

A continuous battle where that battle ALWAYS swings from one end of the battle field to the other.

Jane Fox : 11/28/2006 12:41:38 PM

* Bernanke: Still optimistic about productivity growth
* Slowdown in home construction to be drag in '07
* Economy has been evolving as Fed expected
* Bernanke: 'Troublesome' if core inflation does not slow
* Bernanke sees balanced growth risks, upside inflation risks
* Bernanke says rate of home purchases may be stabilizing
* Bernanke detects some turnaround in U.S. auto sector
* Bernanke: Economy ex-auto, ex-housing expands at solid pace
* Bernanke says inflation has been 'better behaved of late'
* Bernanke sees moderate growth ahead, inflation easing slowly

Jeff Bailey : 11/28/2006 12:38:10 PM

And the "mother" of all internals analysis (NH/NL is faster moving and addresses bullish/bearish leadership), $NASI addresses a/d breadth, you can't analyze a market without the NASDAQ Comp. Bullish % ($BPCOMPQ) Link , which should be the slowest moving, yet most "powerful" description/observation of supply/demand.

Currently, my analysis is that bullish leadership is resting (NH/NL ratio), and that has advance/decline ($NASI) also resting, while the $BPCOMPQ creeps higher.

Jane Fox : 11/28/2006 12:37:31 PM

DAteline WSJ - Fed chief Bernanke says economic slowdown proceeding as expected, but that risks from inflation and housing slump remain. Full story to follow shortly.

Jane Fox : 11/28/2006 12:37:17 PM

AS you can see this have turned around again. Link

Keene Little : 11/28/2006 12:36:48 PM

If this sideways/down consolidation since this morning's high is going to lead to another leg higher then any rally above ES 1390 should be a good buy signal. The upside projection would be near 1395. So I like the short side from here but I'd be a buyer of an upside break. I'm talking scalp moves only here since we should be close to putting in a bottom, if not already, and the bounce should be just a correction of the decline.

Jeff Bailey : 11/28/2006 12:26:12 PM

I could go "tighter," or add addition "noise" with a 5-point box chart Link , but the default chart Link adds too much noise and gave a "sell signal" back in early October. Might as well use a line chart if going this small.

Keene Little : 11/28/2006 12:22:08 PM

This ES 60-min chart shows why I'm leaning to the short side. We could consolidate in today's price range before heading lower again or we could make a minor new low from here in order to finish the leg down from the high on November 22nd. If this wave count for the move down is correct then a minor new low would be followed by a stronger bounce to correct the decline. Link

Jeff Bailey : 11/28/2006 12:19:07 PM

Let's build on the NASDAQ NH/NL ratio chart and take a look at the NASDAQ Summation Index, which is a ratio of the advance/decline. Of course you want to use the PnF methodology as it gives a clearer observation of supply and demand.

Here's a screen capture, which gives you and I a frozen point in time view Link

And here is the actual Link of my user defined 10-point box scale.

The REASON I'm using a 10-point box here is that I wanted to get a scale, that NEVER gave a "sell signal" after giving a "buy signal."

Jane Fox : 11/28/2006 12:05:58 PM

SAN FRANCISCO (MarketWatch) -- Natural-gas futures touched their highest levels in over a week ahead of the expiration of the December contracts, while growing expectations that key oil producers will agree to further cut output at a meeting next month helped lift crude prices closer to $61 a barrel.

Natural-gas for December delivery rose 12.2 cents to $8.22 per million British thermal units on the New York Mercantile Exchange after a high of $8.14, its strongest intraday level since Nov. 17.

January natural gas, which will become the lead-month contract at the session's end, was at $8.57, up 21.3 cents.

January crude was last up 53 cents at $60.85 a barrel in New York, after earlier climbing as much as 1% to $60.90.

"Some forecasters are making the daring prediction that it might actually get cold in December," said Phil Flynn, a senior analyst at Alaron Trading, in e-mailed commentary.

"Though the eastern third of the country is enjoying an atypical warm spell for this time of year ... change is on the way in the form of an Arctic air mass currently chilling the Northwest and Rocky Mountains," said John Kilduff, an analyst at Fimat USA.

Jeff Bailey : 11/28/2006 11:58:57 AM

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

Keene Little : 11/28/2006 11:55:59 AM

If this continues to go sideways through lunch then it's going to look bullish for upside follow through. But countering that is the fact that the 30 and 60-min charts are into/nearing overbought and that makes it look like we can expect another pullback this afternoon. I'm leaning to the short side here in expectation that we'll see a price consolidation near the lows and therefore another pullback towards this morning's low.

Jeff Bailey : 11/28/2006 11:49:15 AM

You can begin to see a "triangle" pattern in the NASDAQ 5-day NH/NL developing can't you?

Jeff Bailey : 11/28/2006 11:47:56 AM

NASDAQ NH/NL Ratio Chart with five-day and 10-day NH/NL measures at this Link ... the "?" are this morning's 11:00 AM EST measure. At the close of today's session, I will check that measure, see if it has reversed the 3-boxes to 74.00%, or even more. Then I chart that action.

Keene Little : 11/28/2006 11:38:20 AM

It's hard to figure out if the current consolidation is in preparation for going higher or if instead it's just part of what will be a little larger pullback from this morning's bounce. For now the broken uptrend line from July continues to hold ES back.

Jane Fox : 11/28/2006 11:37:43 AM

I am taking a long position in the Qs and will put a stop at 42.95. Risking only ~$0.70 is a good trade as far as I am concerned.

Jeff Bailey : 11/28/2006 11:37:39 AM

I think the reason Jane is reading everywhere that gold took a rather big drop this morning is that a lot of traders understand the near-term implications, and when they saw the sudden and quick drop at these resistance levels, it still has some bearishness to it as sellers are willing to stand firm.

Jeff Bailey : 11/28/2006 11:35:44 AM

Barrick Gold (ABX) $29.80 +0.16% ... did see brief trade at $30.00, and yesterday's high was $29.99.

Get the feeling that ABX and YG/GLD are at some closely monitored resistance levels?

Yes! Me too!

Jeff Bailey : 11/28/2006 11:25:32 AM

11:00 Internals found at this Link

Note: Current NASDAQ 5-day NH/NL ratio would be enough for a 3-box reversal back lower of 74.00%

Jane Fox : 11/28/2006 11:06:16 AM

I am reading everywhere about the big drop in gold but looking at the daily charts you realize that this is just a normal ebb and tide of markets. There is however some things that goldbugs need to be aware of. Things like the bearish MACD and RSI divergences but, like I said yesterday, as long as this market holds support at 615-616 I will remain bullish. Link

Jeff Bailey : 11/28/2006 11:03:04 AM

11:00 Market Watch found at this Link

Jeff Bailey : 11/28/2006 10:47:09 AM

YG06Z 635.10 -0.82% ... now here's a 60-minute interval chart, "zooming in" with QCharts' WEEKLY Pivot Levels Link

Keene Little : 11/28/2006 10:46:20 AM

ES is struggling with its broken uptrend line from July, currently at 1390. It bumped its head on that trend line and if it pulls back from there it will look like a retest and kiss goodbye. If the line can't be recaptured we might see a consolidation between 1380-1390.

Jane Fox : 11/28/2006 10:41:02 AM

Do you see that the bulls have the ball now and they have field advantage. Not a time to be short. Link

Jane Fox : 11/28/2006 10:39:45 AM

Do you see the difference in the internals now. This morning they were bearish and now they are quite different. Link

Jeff Bailey : 11/28/2006 10:37:19 AM

YG06Z 633.70 -1.04% ... here's my daily interval chart with retracement brackets Link ... QCharts' WEEKLY Pivot levels are ... $613.30, $625.90, Piv= $633.00, $645.60, $652.70

Would have some overlapping support around the $633.00 level.

Keene Little : 11/28/2006 10:36:26 AM

While QCharts data reliability has been much better these past many months I'm struggling to find a good server this morning and it keeps switching on me. If you're experiencing the same then you're not alone.

Jeff Bailey : 11/28/2006 10:29:25 AM

Gold really getting "whacked" lower last 8 minutes.

GLD $62.87 -1.30%

YG 633.20 -1.12% (it closed right on retracement yesterday)

Jeff Bailey : 11/28/2006 10:27:20 AM

Quite a few programs around this 61.8% MONTHLY YM Pivot retracement of 12,131 isn't there?

Jeff Bailey : 11/28/2006 10:26:11 AM

Buy Program Premium ... SPY $138.74 : YM 12,138

Jeff Bailey : 11/28/2006 10:23:41 AM

Buy Program Premium ... SPY $138.60 : YM 12,130

Jeff Bailey : 11/28/2006 10:17:31 AM

These buy, or sell program premiums are generated by brief seconds of arbitrage between the S&P 500 futures (es06z) and cash (SPX, or SPY) where a basket of stocks is being bought, or sold.

QCharts' ticker is $PREM.X

Traders like you and I will set al_rts at the given $PREM.X level on their trade stations.

HL Camp & Company has their computers set for program buying at $+3.32 and set for program selling at $+1.11. Fair Value for the S&P 500 today is $2.16.

Jane Fox : 11/28/2006 10:15:40 AM

I do believe the bullish is waning and the bears are taking control again.

Jane Fox : 11/28/2006 10:13:47 AM

WASHINGTON (MarketWatch) - Uncertainty about the strength of the economy caused the second straight monthly decline in U.S. consumer confidence in November, the Conference Board said Tuesday.

The consumer confidence index fell to 102.9 in November from a revised 105.1 in October, the private economic research group said. The index peaked at 105.9 in September.

This is the first back-to-back decline in the index since last September and October, when hurricanes ravaged the Gulf Coast region.

The decline in confidence surprised economists, who were expecting the index to increase to 106.4 from the initial October reading of 105.4, according to a survey conducted by MarketWatch.

Economists thought lower energy prices and an end to negative campaigning from the midterm election would boost confidence.

But concern about the job market and a more-guarded short-term outlook led to the drop in confidence, the Conference Board said.

Jeff Bailey : 11/28/2006 10:13:46 AM

Sell Program Premium ... SPY $138.23 : YM 12,098

Jane Fox : 11/28/2006 10:13:05 AM

WASHINGTON (MarketWatch) - Sales of existing U.S. homes rose 0.5% to a seasonally adjusted annual rate of 6.24 million in October, the first increase since February, the National Association of Realtors reported Tuesday.

Economists were expecting sales to fall to 6.15 million annualized, according to a survey conducted by MarketWatch.

September's sales were revised higher to 6.21 million from 6.18 million initially reported. Sales are down 11.5% in the past year.

"As expected, existing-home sales appear to be stabilizing, fingers and toes crossed," said David Lereah, chief economist for the realtors' industry group.

Median sales prices fell a record 3.5% year-over-year, the third decline in a row. Prices had never fallen three months in a row since 1968, when the realtors began collecting data.

Falling prices are "a good thing," Lereah said.

Keene Little : 11/28/2006 10:09:17 AM

Definitely a battle going on between the dip buyers and those using rallies to sell into.

Jeff Bailey : 11/28/2006 10:06:54 AM

Alternating buy, then sell program premiums last couple of minutes.

Jeff Bailey : 11/28/2006 10:04:46 AM

10:00 Market Watch found at this Link

Keene Little : 11/28/2006 10:00:50 AM

The banks (BIX) have pulled back to their uptrend line from October 2005 and I would expect to see this act as support (at 389).

Jane Fox : 11/28/2006 9:48:41 AM

Don't even think about been long. Link

Jane Fox : 11/28/2006 9:47:52 AM

AD line will give you field advantage and at -614 and falling it belongs to the bears and getting stronger.

Jane Fox : 11/28/2006 9:46:20 AM

If you have any doubt as to who has the ball just look at the AD volume and it will tell you.

Keene Little : 11/28/2006 9:45:41 AM

ES had been weaker pre-market but is now holding up slightly better on this post-opening dip. YM and NQ dropped below their pre-market lows but ES held above. So far YM is holding above its November 10th low at 12099.

Jane Fox : 11/28/2006 9:43:28 AM

NQ breaks overnight lows.

Jane Fox : 11/28/2006 9:41:09 AM

ER breaks overnight lows.

Jane Fox : 11/28/2006 9:40:58 AM

I would be taking note of the overnight lows and highs and determine bullish or bearish from those levels.

Jane Fox : 11/28/2006 9:34:40 AM

Markets have not broken their overnight lows.

Jane Fox : 11/28/2006 9:33:56 AM

VIX opens above its PDH confirming ES's open below its PDL.

Jane Fox : 11/28/2006 9:32:30 AM

AD line is -436 and AD volume below 0. Bears have the ball but they don't have great field advantage.

Jane Fox : 11/28/2006 9:25:56 AM

The AD volume and VIX kept you short all day yesterday so I would be watching these two very closely today. I think we will have another down day before the bulls are able to pick themselves up and start fighting again.

Keene Little : 11/28/2006 9:23:34 AM

YM has price level support at its November 14th low at 12117 and then November 10th low at 12099. Its pre-market low is 12108, right in between.

Jane Fox : 11/28/2006 9:18:07 AM

The last time ES was below its 50EMA was August 10th so I think the MA will be support today. A close below the 50 would certainly have the attention of the bulls.

Keene Little : 11/28/2006 9:15:41 AM

The bad news with the Durable Goods number was actually treated as bad news this morning. Will wonders never cease? The day is still young though--we could see the market rally and they'll say it's because the market believes the Fed will have to reduce interest rates to fight the slowing economy. This morning's reaction in the bond market suggests that will happen.

The November 10th low at ES 1379.25 could act as support this morning (the pre-market low went slightly below that to 1378.50). With the descending wedge forming yesterday afternoon, and bullish divergences accompanying the choppy move lower, it appeard as though we were bottoming and getting ready for at least a correction to the decline. That suggests that this morning's down opening might get reverssed quickly so be aware of that possibility.

Jane Fox : 11/28/2006 9:03:16 AM

Here is a daily chart of ES. Take note of 2 significant differences in the last 2 days. First of all notice the MACD and RSI divergences then the RSI level. ES has not been oversold (under 30) since July 17th and today's move has dropped it to below 30.

The markets have a different tenor now. Link

Jane Fox : 11/28/2006 8:56:07 AM

Gold remains bullish but is losing its momentum. I will show a daily chart of Gold later today.

TBonds were bought on the Durable Goods report, a flight to safety. Bonds are bullish but like Gold were starting to lose their momentum but they just got a boost this morning.

I have not shown a daily chart of Natural Gas for a while so I will for sure later today.

Crude broke its PDH overnight but remains in its downward channel on the daily chart. Link

Jane Fox : 11/28/2006 8:50:00 AM

Equity markets did not like the Durable Goods report out at 8:30. All have broken their PDLs. There is certainly a different tenor in the markets now. Link

Jane Fox : 11/28/2006 8:48:11 AM

NEW YORK (MarketWatch) -- Treasurys rallied, sending yields lower, after the release of much weaker-than-expected durable goods orders for October. The Commerce Department said durable goods fell 8.3% in the month, erasing September's 8.7% gain, led by falling orders for new aircraft. It was the biggest drop in orders for durable goods since July 2000 and far wider than the 4.8% decline forecast by economists polled by MarketWatch. The 10-year note rose 8/32 to 101, to yield ($TNX) 4.50%, compared with 4.536% before the data were released. The 30-year bond was up 20/32 at 98 26/32, yielding 4.575%.

Jane Fox : 11/28/2006 8:46:07 AM

NEW YORK (MarketWatch) - The dollar dropped against the euro and trimmed gains versus the yen early Tuesday, after a report showed demand for U.S.-made durable goods declined much more than forecast in October. Led by falling order for new airplanes, demand for U.S.-made durable goods fell 8.3% in October, erasing September's 8.7% gain, the Commerce Department said. Excluding transportation goods, orders fell 1.7%. Economists expected a 4.8% drop. The report "was very weak on both a headline and ex-transportation level," said Kathy Lien of FXCM. "This definitely adds salt to the wound, but will not be the straw that breaks the camel's back. What could be is consumer confidence and comments from" Fed Chairman Ben Bernanke, due out later in the session, she said. The euro was last up 0.3% at $1.3163, while the dollar was up 0.1% at 116.10 yen.

Jane Fox : 11/28/2006 8:45:49 AM

WASHINGTON (MarketWatch) - Led by falling order for new airplanes, demand for U.S.-made durable goods fell 8.3% in October, erasing September's 8.7% gain, the Commerce Department said Tuesday.

It was the biggest drop in orders for durable goods since July 2000.

New orders for civilian aircraft plunged 44.5% last month, contributing to the 21.7% decline in orders for transportation goods.

While the drop in orders to Boeing was a big part of the story in October, the report also showed weak demand for electronics, defense goods and fabricated metals. Excluding transportation goods, orders fell 1.7%.

Orders for core capital goods - the kinds of equipment businesses invest in to help them produce more goods - fell 5.1% in October, the first decline in six months

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