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Jeff Bailey : 12/8/2006 12:42:11 AM

Biovail (BVF) closed at $22.32. Sure looked $20.00 just before yesterday's close Link

This morning's 5-minute chart Link

and to tonight's close Link

Jeff Bailey : 12/8/2006 12:15:25 AM

Altera (ALTR) $19.74 -2.32% Link ... $19.63 was last tick in extended.

Jeff Bailey : 12/8/2006 12:13:02 AM

Xilinx (XLNX) $26.44 -2.00% Link ... slid to $25.49 in extended session after lowering its quarterly sales forecast Link

Jeff Bailey : 12/8/2006 12:01:18 AM

11/22/06 to 12/07/06 Sector Bell Curve where I've added the major market bullish % (broad to narrow ... BPOTC, BPNYSE, BPSPX, BPOEX, BPNDX, BPDJIA) Link

Jeff Bailey : 12/7/2006 11:15:24 PM

Why are the banks so strong?

Yes! I would have to agree.

MBA's weekly mortgage data Link where purchases and refinancing have been stabilizing and strengthening. A 30-year fixed is just about the same as an ADJUSTABLE RATE MORTGAGE!!!!!

Wednesday's MBA report Link

Jeff Bailey : 12/7/2006 11:02:17 PM

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

Note: BIX.X and VIX.X get trade at MONTHLY R1.

RUT.X and SPX.X largest weightings are "financials."

Keene Little : 12/7/2006 10:06:13 PM

Friday's pivot tables (still using December contracts and will update to March contracts over the weekend): Link and Link

OI Technical Staff : 12/7/2006 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The Market Monitor has been archived.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.

Jeff Bailey : 12/7/2006 6:19:50 PM

Closing Internals found at this Link

Jeff Bailey : 12/7/2006 6:04:08 PM

Closing U.S. Market Watch found at this Link

Note: Dollar Index (CEC:DXY) was up just 0.04 point from yesterday's 03:00 PM EST close.

Jeff Bailey : 12/7/2006 5:38:43 PM

Crud ... didn't get ES dn/uptick.

SPY Up/DnTick Vol was DN:4.672 to UP:8.186

Jeff Bailey : 12/7/2006 5:36:18 PM

Keene! Check out the SPY Option chain with Dn/Up tick Vol (throw on the SPY itself)

Jeff Bailey : 12/7/2006 5:31:32 PM

Might want to set an alert at $32?

Jeff Bailey : 12/7/2006 5:31:07 PM

GoldCorp (GG) $29.96 +0.87% Link ... Merrill revises target higher to $38 from $34.

Jeff Bailey : 12/7/2006 5:07:59 PM

Sellers look to have had the QQQQ and SMH line up this morning at WEEKLY R1s.

GSO.X not even close to its WEEKLY Pivot 185.61 and finishes below its WEEKLY S1 182.35.

BTK.X finishes smack between WR1 (774.01) and W Piv (765.44)

Jeff Bailey : 12/7/2006 4:33:16 PM

NSM $23.92 -3.54% ... released for trade alert. $23.43 extended.

Jane Fox : 12/7/2006 4:16:51 PM

Economic reports for tomorrow include:

8:30a.m. Nov Nonfarm Payrolls. Expected: +110K. Previous: +92K.

8:30a.m. Nov Unemployment Rate. Expected: 4.5%. Previous: 4.4%.

10:00a.m. Prelim U Of Mich Consumer Sentiment Index. Expected: 92.0. Previous: 92.1.

Jeff Bailey : 12/7/2006 4:14:13 PM

YM06Z 12,290 / YM07H 12,376

Keene Little : 12/7/2006 4:14:01 PM

Seeing the VIX jump as it did today has me wondering what that might mean for tomorrow. While a rising VIX is normally bearish I wonder if from a contrarian sense that's going to be bullish for tomorrow. Worry ahead of tomorrow's numbers may have too many leaning bearishly.

Jeff Bailey : 12/7/2006 4:13:17 PM

YM06Z up/dntick Vol 5,889/6,444

YM07H up/dntick Vol 11,614/12,072

Jeff Bailey : 12/7/2006 4:08:02 PM

DIA $122.86

Jeff Bailey : 12/7/2006 4:07:23 PM

SPY $141.22

Jeff Bailey : 12/7/2006 4:07:10 PM

YM07H ... 12,382

Jeff Bailey : 12/7/2006 4:06:38 PM

VIX alert ... 12.64 ... WEEKLY R1.

Jane Fox : 12/7/2006 4:06:18 PM

Again at 13:55 so you had lots of warning.

Jeff Bailey : 12/7/2006 4:05:54 PM

National Semiconductor (NSM) $23.92 -3.54% ... halted on earnings.

Jane Fox : 12/7/2006 4:05:26 PM

Then again at 12:35 the VIX made new daily highs but ES was ignoring it.

Jane Fox : 12/7/2006 4:05:48 PM

It was about 11:50 EST when the VIX was making those highs.

Jane Fox : 12/7/2006 4:03:41 PM

Earlier today the VIX was making new daily highs while ES was trading midrange. That was the canary dying telling you to get out of the mine because it was ready to explode. Link

Keene Little : 12/7/2006 3:56:16 PM

As the DOW and SPX approach the levels for two equal legs down today (12258 and 1406) the 30 and 60-min charts are into oversold. This just might be setting up for a bounce/rally tomorrow. That's the risk I see for bears as we head into the close now. But I don't like the risk to try a long play before tomorrow morning.

Jeff Bailey : 12/7/2006 3:52:15 PM

Not looking like Friday here

Keene Little : 12/7/2006 3:48:17 PM

One other reason I wonder if the RUT is forming a bull flag is because of the move down today. It's not much and could actually fit in the noise category but if we stick with the pattern the past several months where we see a down day on Thursday prior to opex and then a jam higher into opex then today fits that pattern.

I have no idea how the market will react to tomorrow's jobs numbers (price pattern is not clear enough here and I could argue for a move either way, especially as we get a small bounce into the close) but at this point it wouldn't surprise me in the least to see an initial move down at the open, suck in some bears, and then start the jam job to the upside. I prefer laying low (that would be in the flat position) heading into tomorrow morning.

Jeff Bailey : 12/7/2006 3:45:51 PM

A Friday reenactment? Where's Mr. Cramer?

Jeff Bailey : 12/7/2006 3:42:20 PM

SPY $141.25 -0.37%

DIA $122.83 -0.25%

Jeff Bailey : 12/7/2006 3:41:47 PM

VIX alert ... 12.36 and MONTHLY R1.

Jeff Bailey : 12/7/2006 3:37:14 PM

Current OPEN MM Profiles that I've made and Watch List at this Link ... Stopped on NYX Calls and BVF short. Sold CC on KGC.

Check out today's low on ABX

Jeff Bailey : 12/7/2006 3:25:53 PM

03:00 Internals found at this Link

Keene Little : 12/7/2006 3:25:05 PM

While the small caps have been lagging lately this RUT 30-min chart should strike fear into the heart of bears. The pullback over the past 3 days sure looks like a bull flag to me. If it were to break down from this flag it will likely drop fast but betting that way could be risky. Support by this channel is currently near 790. Link

Keene Little : 12/7/2006 3:15:13 PM

NDX is about to hit its uptrend line from August at 1777. The last time it hit it on December 1st it got a huge bounce. This test could be telling.

Keene Little : 12/7/2006 3:09:22 PM

A measured move down from this morning's high would be at DOW 12257.6 and SPX 1405.9 so keep an eye on those levels for a potential downside target for the current move. The DOW is about to hit its 30-min 100-pma at 12268 (the 130-pma is slightly lower at 12258) and these averages have been working pretty well in identifying some support and resistance.

Jeff Bailey : 12/7/2006 3:05:32 PM

Swing trade call stop alert ... with NYX $97.00, NYX-LT bid $1.60

Jeff Bailey : 12/7/2006 3:03:09 PM

03:00 Market Watch found at this Link

Jeff Bailey : 12/7/2006 2:59:51 PM

SPY's Max Pain Theory tabulated at $135.00 ($1 increments)

Jeff Bailey : 12/7/2006 2:58:17 PM

DIA's Max Pain Theory tabulated at $120.00 ($1 increments)

Jeff Bailey : 12/7/2006 2:57:20 PM

OEX's Max Pain Theory tabulated at 645 (5-pt increments)

Jane Fox : 12/7/2006 2:56:43 PM

The VIX is my favorite internal and I never trade against it.

Jeff Bailey : 12/7/2006 2:55:02 PM

OEX 651.82 -0.13% ... Most active options (CBOE Only) are 600 contracts in both the Dec 580 Puts (OEB-XP) $0.05 and Jan 640 Put (OEY-MY) $4.50.

Jeff Bailey : 12/7/2006 2:51:00 PM

That was a very good al_rt with the VIX.X Jane.

Jeff Bailey : 12/7/2006 2:50:29 PM

Yep ... some Op-Ex action for sure.

Jeff Bailey : 12/7/2006 2:50:25 PM

Sheeeooot ... that jives with the YM07H move just above 12,420.

Jeff Bailey : 12/7/2006 2:46:04 PM

VXO 11.73 +9.11% ... high of day with WEEKLY R1 still well above at 12.39.

"head fake" below WEEKLY Pivot 11.18 at 01:30-01:35 PM EST.

Jeff Bailey : 12/7/2006 2:39:39 PM

Quarterly "Triple Witch" in play from what I can tell.

What was "up" earlier this morning, now down for the most part.

What was "down" this morning, now up for the most part.

Jeff Bailey : 12/7/2006 2:36:57 PM

Well ... the "drop and pop" I thought was taking place late this morning sure didn't take place.

Even the BIX.X 400.42 +0.16% still edging back after openin session high of 402.81.

Jane Fox : 12/7/2006 2:26:10 PM

As Jeff would say Good Gravy TICKS -800.

Jeff Bailey : 12/7/2006 2:24:35 PM

NYSE Group (NYX) ... 60-minute interval chart with its WEEKLY/MONTHLY Pivot retracement at this Link

Keene Little : 12/7/2006 2:15:02 PM

This morning's lows are being tested (not quite by NDX yet) and we're getting a bounce. The move down from this afternoon's bounce also looks impulsive so a bounce here followed by a continuation lower would be a good short.

Jane Fox : 12/7/2006 2:14:10 PM

ES and YM are just about testing their daily lows but as you can see both ER and NQ are still a ways from their daily lows. Link

Jeff Bailey : 12/7/2006 2:13:18 PM

BIIIIIIG volume spike of 2.8 million in NYX last couple of minutes ... NYX $97.96 +0.08% ...

Marc Eckelberry : 12/7/2006 2:06:22 PM

Russell 2000, monthly chart. January can be a stinker as in 2005 and December rallies are coming earlier every year, so tops can be formed way before year end. Just because December ends up does not mean you catch a top on 12/30. This would be a good year to cost average into some puts. The bearish divergence on the monthly is pretty scary. You are a very brave person if you are buying long term calls in this one. Link

Jane Fox : 12/7/2006 2:05:44 PM

Well you know Jeff I'm not sure it is surge "protection" but more like surge "assurance."

Jeff Bailey : 12/7/2006 2:05:38 PM

Where were THEY, the "SPT" when I needed them with BVF $22.19 +7.09% ... was "certain" we'd see yesterday's gap partially filled today.

Jeff Bailey : 12/7/2006 2:03:13 PM

Rescue Team ... would that be the "Surge Protection Team"

Jeff Bailey : 12/7/2006 2:01:02 PM

YM 12,406 ... great observation Jane! Thank you!

Jeff Bailey : 12/7/2006 2:00:26 PM

YM07H long exit alert 12,410

Jane Fox : 12/7/2006 2:00:03 PM

... of course we have the rescue team sitting in the wings just waiting.

Keene Little : 12/7/2006 1:59:42 PM

As soon as I posted that chart I see SPX breaking the uptrend line. It's slow price action today so always beware the head fake to pull in the wrong side but so far the break down is holding.

Jane Fox : 12/7/2006 1:59:32 PM

TRIN to new daily highs as well. Start singing taps bulls.

Keene Little : 12/7/2006 1:57:06 PM

If price breaks down from here it could mean we'll just continue to stay trapped in a tight trading range today or it could be the start of the next leg down. If this pushes a little higher again then a possible pattern for the bounce off this morning's low is an ascending wedge as shown here. Link

A push up, according to this pattern, should fail at or below at 62% retracement of this morning's decline, so below SPX 1415. If this turns into an ascending wedge then the break down from it should be quick to a new daily low. Just an idea at this point while we wait for something to happen.

Jane Fox : 12/7/2006 1:55:39 PM

Opps VIX to new daily highs. Beware bulls!

Marc Eckelberry : 12/7/2006 1:54:50 PM

How about the almanac entry for Sep and Oct? Almanac is in the trash this year, except November, as usual. So bringing that up is rather odd. Nevertheless, I am too exposed on the short side, or I would go for it.

Marc Eckelberry : 12/7/2006 1:51:47 PM

25% haircut, is how I feel.

Jeff Bailey : 12/7/2006 1:51:21 PM

Stock Trader's Almanac: Today's entry is Small Cap Strength Starts in Mid-December

Jeff Bailey : 12/7/2006 1:48:32 PM

I do know the YM07H close for November was 12,336.

Settle was 12,332 Link

Keene Little : 12/7/2006 1:47:24 PM

Marc, don't beat around the bush. How do you really feel about small caps here? ;-)

Marc Eckelberry : 12/7/2006 1:43:54 PM

If this was not calendar small cap days, I would whack ER short with everything I've got. Interest rates are not going down and it will hurt that index. Right now, the froth is actually at COMP late 1999 levels. I will rather be caught dead than owning any small caps now.

Jeff Bailey : 12/7/2006 1:42:32 PM

Until I get, or am assured of accurate YM07H pivot levels, which may need to be calibrated from YM06z, continue to have al_rts set at the YM0GZ monthly levels.

YM06Z sesion low has been 12,301, and its 38.2% MONTHLY Pivot retracement of 12,301 (regular session h/l/c from November)

Jane Fox : 12/7/2006 1:41:19 PM

These two internals have been all over the map and have gone from bullish to bearish and back to who the heck knows. Link

Jeff Bailey : 12/7/2006 1:37:28 PM

YM07H ... 12,416 ... pushed back under.

Keene Little : 12/7/2006 1:36:50 PM

The 50% retracements for ES and YM just knocked price back but there's still the possibility this bounce will achieve at least a 62% retracement. However, a drop back below the last low at 1:00 PM could be a good short.

Marc Eckelberry : 12/7/2006 1:36:14 PM

ES 50% today is the hang up.I have an order for more shorts at 61.8%, 1428.50, but I'm not sure it will get hit. The double top DOW all time highs earlier is cooling some jets.

Marc Eckelberry : 12/7/2006 1:34:21 PM

Quck check. They are pushing the Russelly 2000 to all time highs with a whopping 38 pc ratio (maybe more now,). That is truly the bubble story of the year.

Jeff Bailey : 12/7/2006 1:31:52 PM

C'mon NYX ... get your "reversal" going.

NYX $98.28 +0.40% ...

Jeff Bailey : 12/7/2006 1:30:35 PM

YM07H 12,423 ... works back above DAILY Pivot and overlapping WEEKLY Pivot retracement of 12,420.

Jeff Bailey : 12/7/2006 1:28:22 PM

YM07H ... 12,420

Jeff Bailey : 12/7/2006 1:26:52 PM

KGC $12.56 +1.37% ... KGC-LV $0.30 x $0.35

Jeff Bailey : 12/7/2006 1:15:59 PM

01:00 Internals found at this Link

Keene Little : 12/7/2006 1:14:16 PM

It's looking like we could stay trapped inside the tight trading range of the past 3 days while the market waits for something. Payroll report tomorrow maybe? I wouldn't have thought it would be that obsessed with it. I think a more likely reason is simpler--buyers are exhausted (or at leat they have no more money to put into the market) but sellers are afraid. With so many expecting an up month there's little incentive to take profits.

So we sit here in this starefest. Just realize that selling could accelerate if and when the bulls start to become afraid of losing their profits. Fund managers have a very strong incentive now to keep their gains vs. make more.

Jeff Bailey : 12/7/2006 1:11:36 PM

Swing trade covered call filled alert on the four (4) Kinross Gold KGC Dec $12.50 Calls (KGC-LV) at $0.30

KGC $12.53

Keene Little : 12/7/2006 1:08:32 PM

If we do get another leg up in this bounce watch the 62% retracement of this morning's decline. That would be the next spot I'd watch for a short play to set up, or not.

Keene Little : 12/7/2006 1:06:17 PM

Price action has really slowed down so it's hard to read anything into it but the current pullback over the last hour looks corrective and suggests another push higher is coming. But if it rolls over instead it could drop quickly in which case I could be tempted to sell into a break to a new daily low.

Jeff Bailey : 12/7/2006 1:02:23 PM

01:00 Market Watch found at this Link

Jeff Bailey : 12/7/2006 12:34:28 PM

YM's "bounce/reversal" having some problems at that overlap of 12,420

Jeff Bailey : 12/7/2006 12:33:21 PM

YM07H long raise stop alert ... to 12,406.

YM 12,414

Jane Fox : 12/7/2006 12:32:23 PM

This bounce off the daily lows has been accomplished without a TICK +800.

Marc Eckelberry : 12/7/2006 12:24:55 PM

Watch ES 1429.25, open resistance and top of old gap. But for now, ex gap close at 1426.75 is resistance. I have to leave, but we will waffle around until tomorrow's data. This is also contract rotation noise. But keep in mind this time around it is off multi year highs, so not the usual story. I have to leave, be careful, the mood is changing.

Jane Fox : 12/7/2006 11:57:57 AM

Gold is now testing support and I think it will hold. Link

Keene Little : 12/7/2006 11:56:35 AM

If we've got more bearish things afoot here, watch the 50% retracement of this morning's drop. I've got a Fib projection for this bounce lining up at that retracement so it could be a place to try a short play.

Keene Little : 12/7/2006 11:53:52 AM

We're either putting in a bottom for the day or we're consolidating for another drop lower. Sorry I can't be more help than that but I see too many confusing signals right here. If we're just consolidating for another run lower we should see this bounce fail shortly and head lower again. A new low could be a good time to try the short side.

Jeff Bailey : 12/7/2006 11:50:04 AM

YM07H long alert ... here at 12,406, with a stop at 12,390, target 12,450.

Jeff Bailey : 12/7/2006 11:47:47 AM

Biovail (BVF) $21.81 +5.26% ... do NOT be short here.

Marc Eckelberry : 12/7/2006 11:40:32 AM

Don;t get me wrong, I will be a big buyer of techs next year after we get a Q1 drop. I think Vista will really kick in by next spring. But for now, we have headwinds.

Jane Fox : 12/7/2006 11:37:24 AM

VIX is probing daily highs and AD volume is making new daily lows. Not a time to try a pick a bottom.

Marc Eckelberry : 12/7/2006 11:35:33 AM

I think we will see PX 1350 in Q1. Timing these things will drive you nuts, so I am cost averaging on the short side with every rally. But bulls will be hard pressed to make any bullish case today after that drop at a key fib projection for SPX and diverging new highs. Many, many funds had SPX 1420 as a max target, we missed it by not much. Tobias Lefkovitch (Citibank), did a press conference last week (Monday's sell-off) where he categorically stated SPX would close 2006 no higher than 1400 and the end of 2007 will at best see 1500.

Jeff Bailey : 12/7/2006 11:21:50 AM

Bearish swing trade short stop alert ... for Biovail (BVF) $21.66 +4.56%

Keene Little : 12/7/2006 11:20:33 AM

Here's one of the reasons I'm reluctant to jump on the bear wagon, as much as I'm yearning to get short for a good ride back down. Using the SPX 30-min chart here, notice how MACD slowly settled back towards the zero line as price consolidated. This is normally a bullish setup. But that trend line across the highs, with a little throw-over this morning, says we might be done. There are several other confusing signals this morning so I'm not quite ready to commit to a direction yet. Link

Marc Eckelberry : 12/7/2006 11:17:18 AM

The selling is mostly related to the fact that the Feds will most likely not cut rates in Q1. I would consider shorting bonds.

Marc Eckelberry : 12/7/2006 11:07:47 AM

I can't find news on AAPL, but when a major market leader falls 2% , you have to take notice. DELL is down 1.2%, so this could be related to some consumer news. RLX down.

Jeff Bailey : 12/7/2006 11:06:37 AM

11:00 Market Watch found at this Link

Jane Fox : 12/7/2006 11:04:50 AM

Man alive the bears certainly intercepted the ball and ran with it today. Strange that there was little opposition from the bulls! Link

Marc Eckelberry : 12/7/2006 11:01:53 AM

Contract rotation is putting a floor, but with AAPL down almost 2%, you can tell they are thinking long and hard at protecting those profits now.

Jeff Bailey : 12/7/2006 10:57:57 AM

YM07H ... WEEKLY Pivot Levels are as follows (using regular session h/l and close not overnight h/l and settlements) ... 12,078, 12,192, Piv= 12,289, 12,403, 12,500.

Jeff Bailey : 12/7/2006 10:54:36 AM

Mini-Dow alert ... any further YM trades I profile going forward will be for the March07 contract (YM07H)

Marc Eckelberry : 12/7/2006 10:53:18 AM

I am not about to let them scare me. Holding March Es contract short at highs is a no-brainer, but that's me. Some of you might want to trade daytrade it, but I am going for a swing. Add premium decay and it could be good for some time.

Marc Eckelberry : 12/7/2006 10:50:56 AM

ES makes a lower low for the first time in days. It was an easy call to make yesterday, although they had to do one minor push, but that's ES for you. But it never fails when SPX makes new highs without NDX. It might take some time, but it never fails. ES is right back at earlier resistance. weekly R1 1413.

Jeff Bailey : 12/7/2006 10:49:57 AM

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

Jeff Bailey : 12/7/2006 10:46:10 AM

Pretty good reversal getting ready to take place.

Keene Little : 12/7/2006 10:45:56 AM

To keep the bears on their toes here, and not assume bad things are coming, yet, a pattern we've seen often in these consolidations is a sideways move followed by a minor new high and then a spike down. It makes for a strange looking A-B-C correction with the spike down is wave-C. It sucks the bears in and then the market gets jammed higher using all that bear fuel to reach orbit. I don't discount that possibility here.

Jane Fox : 12/7/2006 10:45:11 AM

Oh my goodness gracious the bears are winning and we have had no buy programs.

Marc Eckelberry : 12/7/2006 10:46:20 AM

They never ring a bell at the top, but anyone who studies the correlation between NDX and SPX saw this coming. I was off by 2.25 point yesterday, but I actually had very wide stops and added to my short at thighs today. My call still stands.

Jeff Bailey : 12/7/2006 10:44:19 AM

EIA: Nat. Gas Storage Table Link ... draw of 11 BCF

Marc Eckelberry : 12/7/2006 10:41:22 AM

Watch ES 1417, open and resistance on any bounce attempt.

Keene Little : 12/7/2006 10:39:24 AM

Considering the fact that the DOW is the one that gave me the willies when thinking about a long play, it's actually holding up better this morning.

Jeff Bailey : 12/7/2006 10:39:22 AM

Swing trade sell covered call alert ... Let's look to sell four (4) of the Kinross Gold KGC Dec $12.50 Calls (KGC-LV) for $0.30.

KGC $12.27 -0.96% with KGC-LV currently $0.15 x $0.25.

Marc Eckelberry : 12/7/2006 10:38:40 AM

Give or take a few ES points, we could have hit the highs. NQ certainly got whacked harder. In fact, the November highs are far away. In any case, the internals do not suggest new highs. It's pretty much over for now, just a question of nailing the few dip buyers.

Keene Little : 12/7/2006 10:36:48 AM

After tagging its Fib target at 765 yesterday the housing index is pulling back sharply, down 2.5% this morning. It's still early to tell whether the bounce is finished but that's the way I'm calling it. I continue to like the housing sector as a short.

Jeff Bailey : 12/7/2006 10:36:02 AM

Looks like I "should have" sold the KGC covered calls at this point.

KGC $12.25 -1.12% ... (tie with CRB Index).

GLD $62.13 -0.89% ($621.30) probes its WEEKLY S2 ($62.09)

Keene Little : 12/7/2006 10:34:00 AM

The DOW's daily chart said watch for the possibility of a gap n crap and it's beginning to look more and more like it. NQ was our canary when it pulled back sharply right after the opening spike up. We still are subject to an increase in price volatility as futures are rolled out and other opex related activities.

Keene Little : 12/7/2006 10:31:51 AM

ES breaking below its gap fill is not a good sign. Last line of defense for the bulls is the bottom of the recent congestion so back to 1412. I'd be out of any longs at this point. It could be a head fake break to the downside but why take chances at this point.

Jane Fox : 12/7/2006 10:31:21 AM

Internals have turned and the AD volume is making new daily lows. No buy programs to the rescue yet.

Jeff Bailey : 12/7/2006 10:32:47 AM

CRB Index (CEC:CRY) 312.50 -0.18% (30-min delayed) ... testing its 21-day SMA. Implications for inflation, or lack of it. Recent test of 38.2% retracement Link

Note where 61.8% retracement is. A "bear fit 38.2%" (just invert 61.8%) marked with PINK, but for further sign of strength, would need some type of close above 321.95.

Jane Fox : 12/7/2006 10:24:32 AM

WE should be getting a buy program any minute now.

Jane Fox : 12/7/2006 10:23:48 AM

WE have been getting a lot of reversals lately telling me the bulls are losing strength, which gives more credence to the MACD divergences we are seeing on the daily charts. Link

Keene Little : 12/7/2006 10:22:49 AM

The pullback has impulsive qualities. That suggests we'll get a bounce and then a continuation lower. That's on the 1-min chart which is subject to lots of errors so I don't go completely with that but if we get a bounce followed by a new low I'd say we want to switch to looking for short plays today. I just hope we're not going to continue in a choppy consolidation.

Keene Little : 12/7/2006 10:18:44 AM

ES just closed its gap at 1414.75 so here's the test.

Jane Fox : 12/7/2006 10:13:35 AM

Here is a daily chart of YM and I see a potential H&S forming as well. MACD says it is indeed a H&S. Link

Jeff Bailey : 12/7/2006 10:10:17 AM

BVF $21.40 +3.28% ... after a re-test of DAILY R1 ($21.46) ... need the sellers now to distribute back below DAILY Pivot ($20.98)

Jane Fox : 12/7/2006 10:09:59 AM

MACD divergence are not 100% but if you play the odds you have to think OK the first divergence didn't pan out so the chances of the second one are even higher than the first.

Marc Eckelberry : 12/7/2006 10:08:32 AM

Techs are falling apart, not confirming SPX rally. NQ has key support at 1795, 20 DMA. Since we still have more data tomorrow, this could all hold, but it's not looking very pretty out there. Lots of profit taking, especially in the tech sector. AAPL way down at 88.

Jane Fox : 12/7/2006 10:08:38 AM

I don't like a lot of "stuff" on my charts and I find when I pare them down to the basics I can get a much better feel for what is going on. Just looking at this daily chart of the S&P futures (which is quite representative of the other markets) would you go long here? Link

Jane Fox : 12/7/2006 10:04:49 AM

If nothing else to do this is an interesting article about the US exchanges. Link

Jeff Bailey : 12/7/2006 10:03:01 AM

10:00 Market Watch found at this Link

Keene Little : 12/7/2006 10:01:45 AM

As I had noted on the ES 30-min chart below, a new high in ES satisfies the EW count. In other words even just a minor new high is sufficient to call the rally complete. We got that new high and thereore any pullback at this point that goes deeper than gap closure would be an alarm bell for me and it could be the signal that the rally is over.

Marc Eckelberry : 12/7/2006 9:58:39 AM

SPX hit 23.6% projection November, the same fib it pulled back sharply off October projection in November. Still in the wedge as well. They want those stops, but with an equity pc ratio yesterday at .53, I'm not sure there are many shorts left.

Jeff Bailey : 12/7/2006 9:57:37 AM

Biovail (BVF) 5-minute interval chart at this Link

Jane Fox : 12/7/2006 9:56:09 AM

Here is the charts of the internals I should have shown in my 9:55 post. Link

Marc Eckelberry : 12/7/2006 9:56:16 AM

If bulls want to crack it much higher, they need NQ to catch a real bid and get above 1815. Right now, ES is almost 15 points away from its 10 DMA. A little stretched, since NQ is still at that level. Very strange rally.

Jane Fox : 12/7/2006 9:55:05 AM

If you have any doubt as to who has the ball this morning just look at the internals and they will tell you loud and clear. Link

Marc Eckelberry : 12/7/2006 9:54:04 AM

Once again, NQ is lagging far behind, still in yesterday's gap, although it closed it today. ES is of course the boyz favorite tool to get stops, but the high at 1420 is close enough to monthly R1 to catch pretty strong resistance. BIX is leading the way. ES is still within the confines of the wedge. Everytime I trade ES I tell myself it is the last time I do so, it is loaded with whipsaws. NQ is such a cleaner intraday chart.

Keene Little : 12/7/2006 9:49:30 AM

NQ is pulling back sharply. I've still got that DOW daily chart stuck in my head as far as watching for a failure of the rally here. DOW 12370 is resistance by its broken uptrend line.

Jane Fox : 12/7/2006 9:49:14 AM

SAN FRANCISCO (MarketWatch) -- February gold fell $1.10 to $634.80 an ounce Thursday morning, after reaching a two-week, intraday low of $634.30. "There appears to be no compelling reason to jump headlong into major positions, yet every sizeable trade appears to have a bit of an exaggerated price effect as thin conditions persist in the pits," said Jon Nadler, an analyst at Kitco.com. March silver fell 1.5 cents to $13.78 an ounce and March copper lost 6.2 cents to $3.098 a pound. Metalss hares were little changed, with the CBOE Gold Index ($GOX) down 0.2%.

Jane Fox : 12/7/2006 9:47:42 AM

Needless to say these two support the bulls. Link

Keene Little : 12/7/2006 9:47:36 AM

After this early move higher, now is when I'd watch for a pullback to hold ES 1417.50. I'll be using December contracts for most of the day and then switch over either later or after the close (to change all my charts). I may refer to cash more often so that we're all on the same page. So SPX would need to hold near 1415.55 on a pullback.

Jane Fox : 12/7/2006 9:46:25 AM

VIX making new daily lows supporting ES's new daily highs. All is well in bull country.

Jeff Bailey : 12/7/2006 9:44:35 AM

Re-establish swing trade bearish stop alert ... with Biovail BVF $21.43 +3.42% .... place stop just above currenty session high of $21.60 at $21.66

Jane Fox : 12/7/2006 9:41:41 AM

Ad line +754 and AD volume well above 0 and climbing. No doubt which team has the ball this morning.

Keene Little : 12/7/2006 9:41:00 AM

If ES can break out of its 2-day range and hold above 1417.50 and then comes back for a retest of that level that's the place I'd watch for another long entry. If you buy it there I would use a stop no lower than 1415.50. Unfortunately that's still above gap closure but we shouldn't close the gap today if we're truly breaking out.

Jeff Bailey : 12/7/2006 9:32:38 AM

Biovail (BVF) $21.16 +2.12% ...

Jeff Bailey : 12/7/2006 9:30:27 AM

Swing trade cancel stop alert ... for Biovail (BVF) ... for the first few minutes.

Keene Little : 12/7/2006 9:19:41 AM

ES has broken above the 2-day consolidation and it's certainly looking like we'll rally out of the gates. If you went long yesterday near the close then it's now time to raise your stop to just below yesterday's low, which should reduce your risk on the play. Ideally we won't see a pullback below gap closure and that's another place to raise your stop. As a reminder here's the reason I thought a rally was the next move: Link and where it could be headed: Link

But before the bulls get too excited here, the DOW's daily chart warns me that any rally could be short lived: Link The fact that it has been rising just under its broken downtrend line, with continued bearish divergence, I'm not so sure we're going to see much more upside. This chart tells me we could see a gap n crap today. It's always something. Continue to exercise caution today, especially since the Thursday prior to opex week has tended to be volatile.

Jane Fox : 12/7/2006 9:11:20 AM

WASHINGTON (MarketWatch) -- The number of new filings for state unemployment benefits declined sharply in the latest week, reversing a large increase in the previous week, the Labor Department said Thursday

The number of workers filing for state unemployment benefits for the first time fell 34,000 to 324,000 in the week ended Dec. 2.

The drop was in line with forecasts.

Claims in the previous week were revised higher to a gain of 35,000 to 358,000, compared with the initial estimate of a gain of 34,000 to 357,000. This was the highest level of claims in over a year. The volatility in claims is typical around holidays, with large expected swings in seasonal employment, said a Labor Department official. The government attempts to adjust the data for those factors

Jane Fox : 12/7/2006 9:11:36 AM

Something is spiking the markets. ES and YM have broken their overnight highs and their PDHs.

Jane Fox : 12/7/2006 9:04:41 AM

Good morning. For those of you futures traders who use continuous futures you may notice your charts looking a bit funny today. That is due to the rollover to the March contract.

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