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Jeff Bailey : 1/11/2007 12:28:16 AM

Feb Gold (yg07g) is down $3.30, or -0.53% at $610.40

Jeff Bailey : 1/11/2007 12:26:37 AM

March Silver (yi07h) is flat at $12.440

Jeff Bailey : 1/11/2007 12:24:15 AM

US Dollar Index (CEC:DXY) is 85.00. It's 3:00 PM EST tick was 85.08, so pretty quiet here.

Jeff Bailey : 1/11/2007 12:12:38 AM

One of the "reasons" I thought we should close out the last of the PetroChina (PTR) puts today, so close to my trade target, was that I wasn't willing to take the risk of a jump in oil prices in response to President Bush's address tonight.

Jeff Bailey : 1/11/2007 12:08:18 AM

US House Approves $2.10 Increase To Federal Minimum Wage

DJ- In the first major partisan fight of the year, the U.S. House on Wednesday passed, 315 to 116, what could be the first federal minimum wage increase in nearly a decade.

Republicans and business groups opposed the measure, arguing that it would hurt smaller businesses and their employees. The White House agreed, announcing shortly before the vote that it is opposed to a minimum wage increase without accompanying tax breaks.

"The last thing Congress should do is pass legislation that imposes an unfunded mandate on small businesses," House Minority Whip Roy Blunt, R-Mo., said.

"This is a matter of human decency," countered Rep. John Lewis, D-Ga.

Jeff Bailey : 1/11/2007 12:08:12 AM

Feb. Crude Oil (cl07g) $53.13, down 89-cents from Wednesday's settlement of $54.02.

Jeff Bailey : 1/10/2007 11:57:49 PM

YM +6 at 12,514.

Jeff Bailey : 1/10/2007 11:55:14 PM

President Bush Details Plan To Tackle 'Unacceptable' Iraq Situation

DJ- President George W. Bush, trying to convince a skeptical nation that the stakes are too high to abandon Iraq, acknowledged the failure of past war strategies, but said more U.S. troops are needed to help tame sectarian violence.

"It is clear we need to change our strategy in Iraq," Bush said in a prime-time address. "The situation in Iraq is unacceptable to the American people - and it is unacceptable to me."

Against the wishes of Democrats and some Republicans, around 21,500 additional U.S. troops will be sent to help Iraqi security forces gain control over Baghdad and the turbulent Anbar Province. More than a $1 billion in new U.S. funds will be provided for reconstruction and economic assistance. Elements of the strategy surfaced throughout the day as White House officials briefed reporters and as lawmakers emerged from last-minute meetings with the president.

"America will change our strategy to help the Iraqis carry out their campaign to put down sectarian violence - and bring security to the people of Baghdad," Bush said, speaking from the White House library. "This will require increasing American force levels."

Their mission will be helping Iraqis clear and secure neighborhoods and making sure the Iraqi forces left behind are in a position to provide security. The new plan, Bush said, is different from past attempts to quell sectarian violence in the Iraqi capital, which he acknowledged hadn't gone as planned.

"Our past efforts to secure Baghdad failed for two principal reasons: There were not enough Iraqi and American troops to secure neighborhoods that had been cleared of terrorists and insurgents," Bush said. "And there were too many restrictions on the troops we did have."

The additional forces to Iraq will be concentrated in Baghdad. The strategy calls for around 17,500 U.S. troops to be sent to the Iraqi capital, starting next week. The first of five extra U.S. combat brigades will arrive in Baghdad on Jan. 15. Additional brigades will be deployed in 30-day increments. Another 4,000 marines will be sent to Anbar province, where the administration says tribal leaders are requesting help against al-Qaida.

The Iraqi government, which the White House says is taking the lead in the new strategy, will commit to providing three new brigades in Baghdad. One will arrive on Feb. 1 and two others on Feb. 15.

White House sought to make clear that the new plan was designed by Iraqis and will be led by the country's government. "Only the Iraqis can end the sectarian violence and secure their people," Bush said. "And their government has put forward an aggressive plan to do it."

Under the plan, U.S. soldiers will provide support to the Iraqi security forces' beefed-up presence in Baghdad, embedding with units throughout the capital's nine districts. The Maliki government's goal is to establish full security over all of Iraq's provinces by November.

On the economic front, the strategy includes a call for the Maliki government to finalize a hydrocarbon law to ensure oil revenue is distributed fairly among Iraq's ethnic groups, jobs creation programs in Baghdad and Anbar and the launch this year of the international compact on Iraq, an initiative designed to open the door for increased foreign investment and assistance in Iraq. The Iraqi government will spend $10 billion of its own funds on a jobs program.

Politically, the strategy pressures the Maliki government to follow through on reconciliation initiatives, including de-Baathification law and provincial elections.

Bush said U.S. forces won't remain in Iraq indefinitely, but neither did he impose any ultimatums on the Maliki government.

"I have made it clear to the Prime Minister and Iraq's other leaders that America's commitment is not open-ended," he said. "If the Iraqi government does not follow through on its promises, it will lose the support of the American people - and it will lose the support of the Iraqi people. Now is the time to act."

Two months after public discontent with the war helped Democrats regain control of the House and Senate, the troop buildup sets up a confrontation between Bush and Congress. Leading Democrats plan votes on the new policy. Others, including Sen. Edward Kennedy, D-Mass., support legislation requiring Bush to get congressional approval before sending more troops to Iraq or spending additional money on the conflict.

"This is the third time we are going down this path. Two times this has not worked," House Speaker Nancy Pelosi, D-Calif., said after meeting Bush earlier Wednesday.

Bush said he understands congressional concern, but warned that now isn't the time to withdraw forces or scale back the effort in Baghdad.

"To step back now would force a collapse of the Iraqi government, tear that country apart, and result in mass killings on an unimaginable scale," Bush said.

Bush's effort to sell the strategy will continue Thursday, when he visits military personnel in Fort Benning, Ga.

Republicans are largely backing the president, despite the unpopularity of the war and the political sensitivity of sending more troops. Senate Minority Leader Mitch McConnell, R-Ky., called the new strategy "courageous and correct."

Other Republicans were less enthusiastic. "If Iraq is going to fulfill its role as a sovereign and democratic state, it must start acting like one. It is for this reason that I oppose the proposal for a troop surge," said Sen. Norm Coleman, R-Minn.

The troop increase alone will cost $5.6 billion in the current fiscal year, an administration official said - funds that will be included in the emergency supplemental budget request to be sent to lawmakers on Feb. 5. More than $1 billion more will be included for economic initiatives, specifically $414 million for the State Department to expand Provincial Reconstruction Teams, or PRTs, $400 million for State Department "quick response" funds, and $350 million in funds for the Commanders Emergency Response Program, or CERP. The total supplemental budget request, which will provide funds for the wars in Iraq and Afghanistan for the current fiscal year, is expected to eclipse $100 billion.

Jeff Bailey : 1/10/2007 11:32:16 PM

CME's May/Aug/Nov Housing Futures Table ... Various date benchmarks with Composite, Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York Metro, San Diego, San Francisco, Washington D.C. at this Link .

Denver, where Jim and I live still struggles (May contract), but holds 133.80 support. Things might be looking better later this summer (August) after a 130.60 relative low and recent 133-ish.

Miami has been a "rocket" from 07/06/06 benchmark, and trades a "new high!" (May). August contract shows nice gain since 10/27/06 benchmark, but not "breaking out" of 07/06/06 benchmark high.

Chicago, San Francisco and New York Metro are the three major "financial centers" here in the U.S.

Hey! The XBD.X closed at an all-time high today.

Jeff Bailey : 1/10/2007 11:00:10 PM

Mortgage Bankers' Weekly Application Survey at this Link

Again ... As I had noted the "sharp declines" in 12/20 and 12/27 releases, the "sharp increases" this report (post holiday) should be rationalized.

Here's a table I keep Link

Keene Little : 1/10/2007 10:31:33 PM

With futures up this evening it certainly looks like we could get ES to close its January 5th gap at 1427.75 and that might set up a good short play in the morning, especially if it happens to be the overnight high as well.

Keene Little : 1/10/2007 10:26:06 PM

In addition to the potentially bearish SPX chart that I showed at the end of the day Wednesday (4:41 PM), this NYSE daily chart is potentially bearish as well: Link

While it's difficult to see, the NYSE dropped below its uptrend line from July (through the September 25th low) on Tuesday morning and then rallied back up to it to close at the trend line. Wednesday saw a spike down at the open and makes it look like a slap after a kiss goodbye. By Wednesday's close it was unable to rally back up to the broken trend line. It did bounce off its 50-dma at 8966 but as of the close it looks ready to roll back over again.

NYSE's downside pattern from its high on January 3rd looks like it only needs another new low to finish the wave count for that move down. It would then be set up for a larger bounce. This 'drop to a new low followed by a rally' could coincide with a move lower by SPX to finish its pullback before setting up another rally leg to a new high.

But the NYSE pattern has me thinking we've already seen its high, meaning new market highs may be full of bearish non-confirmations between indices. That's just speculation at this point since we will first have to wait to see if we head lower again on Thursday.

Jeff Bailey : 1/10/2007 10:17:37 PM

It appears to me that China "gets it." One of these days, Mr. Chavez and Venezuela will too.

Chavez blames 'alarmism' for Venezuela stock plung Link

Keene Little : 1/10/2007 10:08:28 PM

Thursday's pivot tables: Link and Link

OI Technical Staff : 1/10/2007 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 : 1/10/2007 9:59:16 PM

Add that 09:51:49 PM EST post to my 01:01:31 PM EST post. Then of course the U.S. Dollar Index, gold, silver.

Ugh! Looks like things are starting to change in China!

Jeff Bailey : 1/10/2007 9:51:49 PM

China Yuan Official Central Parity Rates for Thursday at this Link

DJ- The dollar-yuan central parity rate breached a key psychological level Thursday, for the first time set below the Hong Kong dollar's official peg rate against the U.S. unit.

The central parity rate, set ahead of the opening of the market each day, dropped to CNY7.7977. The rate is the weighted average of prices, excluding highest and lowest offers, given by market makers. In each daily trading session, the central bank allows the dollar-yuan rate to move no more than 0.3% above or below the central parity rate.

Jeff Bailey : 1/10/2007 9:36:59 PM

YM ... currently +19 at 12,527.

If it were 09:30 AM EST, would the DIA open "up", "down", or "flat?"

Jeff Bailey : 1/10/2007 9:29:49 PM

Educational (see "Settle" vs. "Close")

Here's the YM's "Settle" and "Close" disparity for Wednesday's session Link

Note that the "Net Change" is based off of Settle not "Close."

One frequently asked question I get is "why doesn't the futures contract net change match against the prior day's close?"

Another question I get is "why doesn't this person's stated close, match that of the CBOT's? (The answer is simply, but importantly, in terminology, and what close vs. settle is.)

Another question I get is "why were stock futures (YM,ES,NQ,ES) up/down, but when the cash market opened (DIA, SPY, QQQQ, IWM) at 09:30 AM EST, they opened down/up? (Futures Net Change is based off settle, not close)

Another question I get is "why do you prefer to use the close in calculation of your pivot levels?

My answer is that futures contracts were created as a derivative to HEDGE risk. Since the Dow Diamonds (DIA) are a CASH product and trades regular session from 09:30 AM EST to 04:15 PM EST, I want to try (as do many institutional computers that utilize the pivot levels) and have the YM levels match the DIA product as close as possible.

The DIA does NOT have a daily settle, but a closing price.

Jeff Bailey : 1/10/2007 8:44:12 PM

Educational

Settlement or Settling Price: The price established by the exchange settlement committee at the close of each trading session as the official price to be used by the clearinghouse in determining net gains or losses, margin requirements, and the next day's price limits. The term "settlement price" is often used as an approximate equivalent to the term "closing price." The close in futures trading refers to a brief period at the end of the day, during which transactions frequently take place quickly and at a range of prices immediately before the bell. Therefore, there frequently is no single closing price, but a range of prices. In months with significant activity, the settlement price is derived by calculating the weighted averages of the prices at which trades were conducted during that period.

Jeff Bailey : 1/10/2007 8:27:11 PM

For those of you new to the futures markets, here is a handy Glossary Of Terms link. Courtesy of the NYMEX Link

Jeff Bailey : 1/10/2007 8:19:08 PM

Again ... NYMEX Feb. Crude (cl07g) settled $54.02.

Source: New York Mercantile Exchange Link

Jeff Bailey : 1/10/2007 8:03:50 PM

Closing Internals found at this Link

Marc Eckelberry : 1/10/2007 7:44:02 PM

February crude settled at 53.50: Link

Jeff Bailey : 1/10/2007 7:41:48 PM

Feb. Crude Oil (cl07g) settled down $1.62, or -2.91% at $54.02.

Jeff Bailey : 1/10/2007 7:02:18 PM

Closing U.S. Market Watch found at this Link

Keene Little : 1/10/2007 5:03:12 PM

GOOG update--after posting the daily chart on Monday (1/8/07, 3:37 PM), the last leg up from December is the 5th wave in the count on that chart. This is the updated chart with today's candle: Link

As I had mentioned on Monday, it's a rough count and doesn't "look" very nice but this one has been a rough pattern for quite some time. Assuming that the current leg up is the 5th wave we should see bearish divergences if and when it reaches its high. Zooming in on the 5th wave, the move up from December, this is how I've got it counted so far: Link

The way this would look best is with a small push higher tomorrow followed by another pullback and then a final rally to a new high. I can see $500 as being the top for GOOG, maybe a retest of the $513 high.

Keene Little : 1/10/2007 4:41:42 PM

While today's low might have marked the bottom for the pullback (as a truncated low), which would say we've started the next rally leg, I can't help but feel bearish when I look at this SPX 120-min chart. Link

Each of those uptrend lines is from July through various pullback lows along the way. Each time one is broken it has been retested and failed. For the past 3 days it looks like SPX has been hammering underneath the latest broken uptrend line but has been unable to recapture it (other than short spurts above it). Today's high was a tag of that lower uptrend line near today's close.

Obviously the bulls need to get up and go tomorrow otherwise I see the likelihood that SPX will drop again and head for 1395-1400. A down Thursday could set up a bullish opex week if the past pattern repeats again this month.

Keene Little : 1/10/2007 4:10:34 PM

MER sold off in the last 1/2 hour. Whether that means expect a move down tomorrow I don't know but with the DOW and SPX at potential resistance we could see a continuation of the pullback tomorrow.

Jeff Bailey : 1/10/2007 4:08:35 PM

Hmmm... better find a QQQQ-related long just in case PRICE history doesn't repeat.

Jeff Bailey : 1/10/2007 4:03:52 PM

Look at the length of that 1st trading day of the new year in 2006 and this year's.

Jeff Bailey : 1/10/2007 4:02:22 PM

Good gravy ... If I didn't have a calendar in front of me, I'd think it was January 06 for the QQQQ all over again (at this point, 6-days into the new year).

Keene Little : 1/10/2007 4:06:11 PM

(1) In your last post on CME, are you showing an ED [ending diagonal, or ascending wedge] for CME which means that the final 5th wave inside the ED should only be a 3 wave move? (2) If wave A ends here near 554, how deep of a retracement do you see for wave B before forging ahead in wave C?

(3) Given the negative divergence (daily) is it possible that the 5th wave could truncate and NOT take out its previous high near 557? (4) In your EW experience, how common are truncations in ED? Separately, if CME fails right here, it looks like a head and shoulder with a neckline near 502.

(5) Could you give an update count for GOOG?

How did I know I'd get a question from you after posting that CME chart? (smile) You always ask perceptive questions and your EW knowledge is impressive. So here we go:
(1) Yes, I'm showing an ending diagonal (ED), or ascending wedge, for wave-(5) and that means each of the 5 waves making up wave-(5) will be a 3-wave move. Hence my desire to see an a-b-c move up from the December low.
(2) Wave-b of the a-b-c move up will typically retrace 38-62% of wave-a so that would be a retracement zone of 534 down to 522. Just playing with some Fibs, if we're to get two equal legs up from December (wave-c = wave-a) and it's to top out around 575 then it will pull back closer to the 62% retracement near 522.
(3) & (4) Yes, wave-(5) could truncate and while not common it's not at all uncommon since 5th waves are typically much weaker. In fact, it's even possible today's high is it. If you look at the move up from December's low it could be considered a sharp 3-wave move (wave-a to the 1/3 high, a very short pullback for wave-b and then wave-c to today's high). In that move, wave-c = 162% of wave-a at 554.16. Today's high was 553.95. Close enough? Could be.

(5) GOOG update--working on it (got slow charts for some reason right now).

Jeff Bailey : 1/10/2007 3:56:21 PM

It might only be fitting to see the QQQQ close $44.66 on Friday. A penny above its 11/24/06 close. I say "fitting" only after 12/22/06 close of $42.93.

Marc Eckelberry : 1/10/2007 3:51:28 PM

And those NASDAQ new year highs and new year lows, Jane. It is very weird and as I said it smells like everyone buying 5 stocks at once.

Jane Fox : 1/10/2007 3:50:02 PM

It does pay to keep your eye on the VIX. Link

Marc Eckelberry : 1/10/2007 3:49:15 PM

Jane, it's not out until June anyway. Let's get a nice correction this quarter, then buy tech stocks and then buy that phone...After all, the only big tech earning we have had (MOT) has been a disaster.

Jane Fox : 1/10/2007 3:47:53 PM

This is has been the most out of whack day I have seen for ages. The AD line has hit a low of -1629 and is now printing at 0.

AD volume was making new daily lows and well below 0. It is now above and making new daily highs.

TRIn has been in a straight line, I mean you could use it as a straight edge.

VIx has been the only internal that has made any sense and is making new daily lows as ES makes new daily highs.

Now the kicker is all this craziness and the TICKS daily high has been +514!!!!

Jeff Bailey : 1/10/2007 3:46:01 PM

Today's YM Pivot range from DAILY S1-R1 was 96 and S2-R2 was 192.

Again... almost "identical" ranges last 4 DAILY Pivot ranges.

Keene Little : 1/10/2007 3:45:06 PM

ES is testing recent highs and is short term overbought. Is there enough energy to propel it higher into the close? Could be if the Boyz want to suck in some bulls here.

Keene Little : 1/10/2007 3:44:09 PM

Yea but Jane, you're a girl. Apple's new gadget is a guy toy (wink).

Jeff Bailey : 1/10/2007 3:43:38 PM

YM 12,511 ... back to its WEEKLY Pivot.

Jane Fox : 1/10/2007 3:41:37 PM

Marc I need a new phone as well but the cost of the iPhone has me hesitating.

Marc Eckelberry : 1/10/2007 3:40:21 PM

NVDA must be making a component in the iphone, it's up 5%. My daughter wants an iphone, but at $500 with a 2 year contract with a carrier that doesn't even work in the canyons of LA...

Jane Fox : 1/10/2007 3:40:44 PM

The Chicago Board of Trade today announced plans to launch a new stock index futures contract based on the Dow JonesSM U.S. Real Estate Index. The electronically-traded Dow Jones U.S. Real Estate (DJUSRE) Index futures contract, to be launched during the first quarter of 2007, will allow market participants to capitalize on changes in the real estate sector of the stock market, and better manage commercial real estate exposure.

Marc Eckelberry : 1/10/2007 3:38:28 PM

Let's all buy AAPL together. Even Cramer says back off, but every fund in the world sold energy and bought one stock, or so it seems.... Strange day indeed.

Keene Little : 1/10/2007 3:36:46 PM

What's the thinking behind someone trading 40 contracts of the $RUT at $128.60 -RUYCJ Mar 650 call?

Good question. Someone either wanted to buy a deep ITM call so that any rally from here will be nearly 1:1 ratio between index price and option price (currently it's a .96 delta) or else someone is selling the deep ITM naked call in expectation that the RUT is about to take a tumble. I'd guess the latter (even if the tumble is a week or so away).

With the RUT being European style the seller would not have to worry about assignment and any drop from here would again be nearly 1:1 return on his leveraged trade.

Marc Eckelberry : 1/10/2007 3:36:59 PM

The NH/NL Nasdaq charts I posted earlier are even more worrisome today, and we haven't even had tech earnings yet: Link Link
First one is new year highs, the second new year lows.

Marc Eckelberry : 1/10/2007 3:29:36 PM

Inventory crunch on ten NDX stocks as funds chase the same names. ADDEC lines still negative and we are making new year highs for NDX with more new highs for Nasdaq and more new lows. Weird.

Jeff Bailey : 1/10/2007 3:22:11 PM

NYSE Group (NYX.X) $108.83 +4.06% ... challenges its all-time high close.

Jeff Bailey : 1/10/2007 3:19:17 PM

03:00 Internals found at this Link

Keene Little : 1/10/2007 3:09:50 PM

As I watch the market inch its way higher I keep thinking a short is setting up and then it runs a little higher. Probably from the shorts trying to do what I'm thinking. But for now, with MER running higher, watch for the broader market to follow.

Jeff Bailey : 1/10/2007 3:03:25 PM

03:00 Market Watch found at this Link

Jeff Bailey : 1/10/2007 3:00:14 PM

Where's SMH $34.83 +1.45% OI at this month? $35? $34?

Jeff Bailey : 1/10/2007 2:58:56 PM

Some very good comments today regarding a/d breadth being negative ("short and stay short"), but also the "big tech bull trade" as it relates things into next week's option expiration.

I'm not certain shorting and staying short in what may be an overly NAKED call scenario in the NQ/QQQQ is the way to be, but one way to get squared up if on the wrong side of a NAKED call trade is to BUY big liquid stocks that have greater importance to the index a trader might be on the "wrong side" of a NAKED call trade.

Jeff Bailey : 1/10/2007 2:52:27 PM

CDE -17.47% last 20-days.

SIL -16.43% last 20-days.

Pretty "squared up" now.

Jeff Bailey : 1/10/2007 2:51:32 PM

I tell you what ... one of the best shorts I passed on in recent days was Apex Silver Mined (SIL) $13.32 -3.33%.

I thought the disparity in 20DyNet% would have CDE rising to meet the SIL 20DyNet% when SIL was trading $15.00.

Keene Little : 1/10/2007 2:50:21 PM

It's been sort of a relentless slow push higher all day and the internals are supporting the rally. I can't help but feel this is setting up a down day tomorrow but I don't have much to back that up at the moment. The other possibility is that we did in fact put in a bottom this morning and we've started the next rally leg. For some reason I'm having trouble trusting that but don't aruge with price here--it's wanting to head higher.

Jeff Bailey : 1/10/2007 2:45:26 PM

Baker Hughes (BHI) $67.06 -1.85% Link ... one of the other "reasons" I was bullish on SLB Link a couple of weeks ago. Sold long the BHI-AN on 12/24/06, but rotated the gains to SLB February.

Jeff Bailey : 1/10/2007 2:37:02 PM

Trader's Reminder ... Markets will be closed on Monday in observance of Martin Luther King Jr..

January's option expiration is Friday, 01/19/07.

Jeff Bailey : 1/10/2007 2:25:07 PM

One of the "reasons" I was bullish SLB a couple of weeks ago was an observation that Crude Oil had been trying to stabilize into recent month's futures contract expirations. Jane might agree with me that some of the things here and I warned oil bulls about back in October, might be worthy with FEBRUARY's expiration.

Jeff Bailey : 1/10/2007 2:20:11 PM

US Oil Fund (USO) $45.75 -3.27% .... WEEKLY S1 $46.06.

Jeff Bailey : 1/10/2007 2:18:58 PM

PTR $124.65 -2.38% ... undercut its 50% retracement of $123.36. "Comfortable" at its 50-day SMA here.

Jeff Bailey : 1/10/2007 2:17:41 PM

CEO $85.36 -0.61% ... back at its 61.8% retracement.

Marc Eckelberry : 1/10/2007 2:14:20 PM

Oil traders should take note of the MARCH contract which is finding support at 55. Since Feb expires on Jan 19th, some traders are taking the longer term perspective. A break below 53.80 on the Feb contract ends that story.

Jeff Bailey : 1/10/2007 2:12:14 PM

Fascinating bar chart on BRCM

Tab Gilles : 1/10/2007 2:08:56 PM

EIA weekly report Link

Marc Eckelberry : 1/10/2007 2:08:16 PM

If rates could drop and small caps join the party, bulls could extend gains. Otherwise, we could be set for reversal Thursday. ES traders are still eying that gap above and if NQ breaks out above 1828, it's a given that ES goes in there and possibly even closes it. An oil rally would help, but that one looks headed for 51.35, weekly S2 if 53.80 breaks. It's a scalp long above 53.80, though.

Jeff Bailey : 1/10/2007 2:05:54 PM

Broadcom (BRCM) $33.03 -3.30% Link

Jane Fox : 1/10/2007 2:05:16 PM

Well so much for my get short and stay short. ES and YM to new daily highs. But you still need to take into account that the TICKs have made a daily high of +500, the AD line is -669 and the AD volume is still under 0. So if you are long (which I would not be) don't expect too much today.

Marc Eckelberry : 1/10/2007 2:05:02 PM

NQ tags weekly R1 at 1826.75 and confluence 76.4% Nov/Jan as well as monthly R1 a little higher at 1828. That should be all she wrote today given the mixed internals. Good show, but it lacks the meat, at least today. Nasdaq new lows exceed new highs.

Jeff Bailey : 1/10/2007 2:05:08 PM

CNBC mentioning that a research note was released today that BRCM $33.02 -3.33% might be a "winner" related to iPhone.

Jeff Bailey : 1/10/2007 1:50:48 PM

Check out the AAPL option's montage and OI/Volume in its options!

Jeff Bailey : 1/10/2007 1:47:55 PM

QQQQ January Options Montage found at this Link ... According to my U.S. Market Watch, VXN.X has risen 9% last 5 days. For those that believe (as I Jeff Bailey do) a rising VXN.X is created by call selling/put buying, the Jan$44 Call OI is notable.

Keene Little : 1/10/2007 1:46:01 PM

CME update--it has been strong since its December low--up nearly $50 or +10%. Its wave pattern is a bit sloppy since the summer but here's an update on my wave count: Link

While there's a Fib projection up to 608.89 based on equality between the 1st and 5th waves in its rally up from its inception in 2002, the trend line along recent highs and its mid-channel line intersecting near 575 makes for a possible high later this month at that lower level. It would look best with a pullback and then a final high to give us a 3-wave move up in its ascending wedge for wave-(5). In the meantime there's nothing bearish about this one.

Keene Little : 1/10/2007 1:43:44 PM

Two equal legs up for ES and YM from this morning's lows are at 1422.50 and 12485. YM just tagged its level but ES has a little higher to go before tagging its projection. Watch for stalling at or near these levels.

Jeff Bailey : 1/10/2007 1:30:48 PM

QQQQ $44.43 ... would remind NQ bears or overleveraged QQQQ shorts that the QQQQ trades at/or above its November and December Op-Ex settlements.

Jeff Bailey : 1/10/2007 1:23:27 PM

01:05 Internals found at this Link

Keene Little : 1/10/2007 1:20:21 PM

NQ has one of the ugliest bounces I've seen in a while. It keeps looking like it's about ready to roll over and then gets a small lift higher. It's been doing this since its pullback on Friday. It's either building up for one heck of a run to the north or else it too is due a pullback before setting up the next rally leg. It adds to the short term confusion here and another reason to be flat and watching for a better setup.

Jeff Bailey : 1/10/2007 1:07:03 PM

01:05 Market Watch found at this Link

Keene Little : 1/10/2007 1:03:20 PM

The fact that NYSE has broken below its uptrend line from July, as have several of the major indices now, is what causes me to seriously doubt my expectations for a continuation higher once this pullback is finished. I'm in longer term short positions so I'd love nothing better than to see this market head lower from here.

But I think the month-long pullback is corrective enough to suggest we haven't yet seen the final run back up to new highs, or it could be retests of the highs or even a failure to make a new high (a truncated 5th wave up). The descending wedge idea says we should look lower short term but if we get a rally above yesterday's high then we might have seen the bottom.

This SPX chart shows what I showed earlier for ES and the longer this takes to finish the more likely it could get down to a Fib projection at 1395 (about ES 1404) before bottoming out: Link

If this happens tomorrow and Friday it would also fit the pattern we've seen for many months now--hammer the market down just before opex week to suck in the bears and flush the weaker bulls. The Boyz buy up a bunch of front month call options and then jam it higher into opex week, getting the shorts to cover and new bulls to buy. It could be their final fling to get new buyers to buy the top.

Jeff Bailey : 1/10/2007 1:03:03 PM

APPLE UNVEILS IPHONE, OTHER PRODUCTS

DJ- Steve Jobs unveils long-expected cellphone which will use touchscreen technology and work with iTunes. Apple will begin shipping product in June starting at $499.

Jeff Bailey : 1/10/2007 1:02:14 PM

That China news may be having some recent impact on Treasury yields here in U.S.

Jeff Bailey : 1/10/2007 1:01:31 PM

CHINA TO ALLOW YUAN BOND SALES IN HONG KONG

DJ- China says it intends to permit its companies to sell yuan-denominated debt securities in Hong Kong for first time, a policy change that would give foreigners access to investments and reinforce city's importance as a marketplace for fund raising.

Jeff Bailey : 1/10/2007 12:59:08 PM

AAPL $97.04 +4.80% ... "ditto!" #2 most active

Jeff Bailey : 1/10/2007 12:58:58 PM

SUNW $6.12 +6.80% ... good gravy! #1 most active

Jeff Bailey : 1/10/2007 12:38:06 PM

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

Marc Eckelberry : 1/10/2007 12:37:21 PM

NYSE out of the channel established in July and below its 50 DMA. Internals are weak everywhere and the only stocks holding up the markets are some big cap techs. Smaller cap are gettiing hurt, which is why the overall Nasdaq is weak. This market is showing all the signs of having topped out, but we will see how the day ends. If big techs holds up, it could bring in some buyers in smaller caps, but it will have to depend on interest rates and so far they are not cooperating.

Jeff Bailey : 1/10/2007 12:13:06 PM

11:00 Internals found at this Link

Keene Little : 1/10/2007 11:58:19 AM

When I look at the euro I do not get the same impression that we could be ready for a reversal in the US dollar. The euro has been declining in value since its peak in December and it looks like it could continue lower, which mean the dollar could be headed higher still.

Keene Little : 1/10/2007 11:52:10 AM

If you're trading the commodities or currencies, or watching them to judge moves in other symbols, the US dollar has reached a level where we could see a reversal. As shown in this daily chart, it has now bounced up to the point where it has two equal legs up from its December low (at 85.13 and today's high so far) and is close to testing its broken uptrend line from December 2004 (at 85.20). Link

I'm not sure what's playing out in the dollar but it looks like it could be set up for a reversal lower. That could coincide with a bounce in commodities including oil and gold.

Jane Fox : 1/10/2007 11:45:27 AM

The other thing the bears need to worry about is the TRIN but as long as it is neutral it is pretty well a non-entity. But as you all know I like to see my ducks in a row.

Jeff Bailey : 1/10/2007 11:42:09 AM

USO $46.08 -2.57% ...

Jane Fox : 1/10/2007 11:42:08 AM

Mind you though if the VIX were making new daily highs I would be much more comfortable short.

Jeff Bailey : 1/10/2007 11:41:49 AM

SLB $57.25 -1.61% ...

Jane Fox : 1/10/2007 11:41:26 AM

This is your "Get short and stay short" kinda day. Link

Jeff Bailey : 1/10/2007 11:40:37 AM

Swing trade put close out alert ... closing out the last of the PetroChina PTR Feb $130 puts (PTR-NF) at the bid of $8.80

PTR $122.59 ... close enough.

Keene Little : 1/10/2007 11:31:22 AM

It looks like we could be tipping over again but the internals are very neutral. Until we get a breakout to the upside, a signal the pullback finished this morning, I'm still looking for a continuation lower. The move down from yesterday afternoon's high should be a 5-wave move and that's what I'm going to use to try to zero in on where the low should form. If this drops lower continue to watch ES 1406-1407 for potential support. In the meantime we're in no-man's land here.

Jeff Bailey : 1/10/2007 11:29:44 AM

PetroChina (PTR) $122.86 -3.78% ... sets up for test of WEEKLY S2 ($122.18) and my profiled bear target of $122.00 (from 01/03/07 entry)

Jeff Bailey : 1/10/2007 11:27:46 AM

My QQQQ trade is based on past commentary from mid-September to current. NYSE and NASDAQ, internals, "light of day" etc. etc.

Jeff Bailey : 1/10/2007 11:25:50 AM

Swing trade put alert for three (3) of the NASDAQ-100 Trust QQQQ Feb. $43 Puts (QQQ-NQ) at the offer of $0.50.

QQQQ $44.26

Jeff Bailey : 1/10/2007 11:01:48 AM

11:00 Market Watch found at this Link

Jeff Bailey : 1/10/2007 10:53:50 AM

EIA: Weekly Heating Oil Stockpiles up 2.13 million barrels.

Jeff Bailey : 1/10/2007 10:52:50 AM

EIA: Weekly Kerosene-Type Jet Fuel Stockpiles up 2.39 million barrels.

Jane Fox : 1/10/2007 10:51:49 AM

WASHINGTON (MarketWatch) -- President Bush, seeking to stem growing dissatisfaction with the Iraq war, will present a case Wednesday night for boosting the number of U.S. troops in Baghdad while putting the onus on Iraqis to quell growing sectarian violence, a top administration official said.

"The president will chart a new course in Iraq tonight; one that will expect very different results, particularly from the Iraqis," White House adviser Dan Bartlett told CNN.

Bush will make "very clear" that America's commitment to Iraq is "not open-ended," said Bartlett, who made the rounds of the morning talk shows Wednesday.

Bush, however, will face resistance from congressional Democrats and some Republicans, who have questioned whether the expected surge of around 20,000 troops will turn the tide.

Jeff Bailey : 1/10/2007 10:51:45 AM

EIA: Weekly Diesel Stockpiles up 2.35 million barrels.

Jeff Bailey : 1/10/2007 10:45:38 AM

EIA: Weekly Distillate Stockpiles up 5.4 million barrels.

Jeff Bailey : 1/10/2007 10:44:18 AM

EIA: Weekly Gasoline Stockpiles up 3.76 million barrels.

Keene Little : 1/10/2007 10:44:02 AM

So far this is just a choppy mess, the same as it's been for the past 3 days. Ugly trading environment and not worth trading until something clears up here. Patience is required during times like this.

Jeff Bailey : 1/10/2007 10:42:53 AM

EIA: Weekly Crude Oil Stockpiles down 4.99 million barrels.

Jane Fox : 1/10/2007 10:39:23 AM

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute reported a drop of 7.7 million barrels in crude supplies for the week ended Jan. 5. The Energy Department had reported a decline of 5 million. Motor gasoline supplies were up 8.6 million barrels, the API said, vs. the government's reported rise of 3.8 million. Distillate supplies rose 4 million barrels, the API said, compared with the 5.4 million-barrel climb reported by the government.

Jane Fox : 1/10/2007 10:39:11 AM

* Crude supply down 5 mln brls last week: Energy Dept.
* Distillate supply up 5.4 mln brls: Energy Dept.
* Gasoline supply up 3.8 mln brls: Energy Dept.
* Feb. crude down $1.04 at $54.60/brl

Jane Fox : 1/10/2007 10:26:46 AM

VIX making new daily lows now confirming ES's new daily highs. AD line is still a very bearish -1024 and AD volume well below 0 although not making new daily lows. I think we are seeing an oversold rally and you should think about using it to position yourself short.

Jeff Bailey : 1/10/2007 10:22:34 AM

iShares Silver (AMEX:SLV) Daily interval bar chart I've been posting, following and trading SLV with here in the MM at this Link

Jane Fox : 1/10/2007 10:20:28 AM

Another indicator is the TICKs which have been under 0 all day so far. I have not seen this happen ever before.

Keene Little : 1/10/2007 10:20:04 AM

If ES manages to push a little higher, two equal legs up off this morning's low is at 1420.50 which would also be a gap close and the next resistance level.

Jane Fox : 1/10/2007 10:10:40 AM

WASHINGTON (MarketWatch) - Inventories at U.S. wholesalers rose 1.3% in November while sales increased 1.0%, the Commerce Department said Wednesday.

As a result, the inventory-to-sales ratio rose to 1.20 in November from a revised 1.19 in October. This is the highest ratio since June 2005. It hasn't been higher since Nov. 2003.

The increase in inventories was much higher than the 0.5% predicted by economists surveyed by MarketWatch.

Inventories had increased a revised 0.4% in October, down from 0.8% originally estimated. Inventories are up 10.6% in the past year. Sales are up 7.9% in the past year.

Jane Fox : 1/10/2007 10:09:39 AM

AD volume making new daily lows - don't be a hero and try to time a bottom. It is just not worth it.

Keene Little : 1/10/2007 10:02:28 AM

Watch for resistance at ES 1418, yesterday afternoon's low and close to 50% of this morning's gap.

Jane Fox : 1/10/2007 10:00:50 AM

See trading isn't so hard. (Smile)

Jeff Bailey : 1/10/2007 10:00:35 AM

Swing trade short 1/2 position alert in the iShares Silver Trust (AMEX:SLV) $121.90 -1.89% here. Stop goes $126.00, target $106.50.

Jane Fox : 1/10/2007 10:00:28 AM

Then add the VIX making new daily highs and you want to be short. If the TRIN is not cooperating don't expect too much and keep your profit targets small. If the TRIN is cooperating then get short and stay short until the internals turn.

Jane Fox : 1/10/2007 9:57:38 AM

A good rule of thumb is to never go long as long as the AD volume is making new daily lows. You could get a bottom but your highest probability trade is not long.

Keene Little : 1/10/2007 9:48:51 AM

If NQ drops back further as well, it could find support near a Fib projection at 1788. It's EW pattern is strongly supportive of a rally to a new high.

Jane Fox : 1/10/2007 9:47:49 AM

VIX pokes above its PDH but the TRIN is printing below its PDL. Dang it I wish these two would get together.

Jeff Bailey : 1/10/2007 9:47:27 AM

Bearish swing trade put establish stop alert for the PetroChina PTR Feb $130 Puts (PTR-NF) at $128.00 in the underlying.

PTR $124.82 -2.24% ...

Keene Little : 1/10/2007 9:46:46 AM

The first downside target at ES 1412.75 has been achieved and with a test of the previous lows it's naturaly that we'll get a bounce. It takes a rally all the way back above 1422 to say the downside is finished so I'm not ready to get bullish yet. Preferably we'll see it get down to 1406-1407 and find support which is where I'd start nibbling on a long (and get out of short positions including January puts).

Jane Fox : 1/10/2007 9:46:29 AM

The dyke is breaking. Link

Jane Fox : 1/10/2007 9:44:12 AM

NEW YORK (MarketWatch) -- Gold futures fell Wednesday, tracking weakness in the oil market where traders were bracing for weekly supply data expected to show the first increase in U.S. crude inventories in seven weeks.

Erasing much of the previous session's gains, gold for February delivery was down $4.50 at $610.50 an ounce on the New York Mercantile Exchange. The contract closed up $6 an ounce on Tuesday as investors moved in following last week's 5% price drop.

The metal came under renewed pressure early Wednesday as oil resumed its downward move ahead of the weekly data on inventories. Oil has lost about 9% of its value since the beginning of the year, pressuring the broader commodity markets.

Jeff Bailey : 1/10/2007 9:41:07 AM

RS PnF of PTR vs. CEO Link

Jeff Bailey : 1/10/2007 9:40:19 AM

I've profiled trades (bullish and bearish) on CEO and PTR over the years here in the MM. CEO tends to trade "weaker" or lag PTR. PTR tends to lead for strength, and lag CEO weakness.

Jeff Bailey : 1/10/2007 9:38:37 AM

PetroChina (PTR) $125.88 -1.41% Link ... close right on its 38.2% 09/11/06 to 12/28/06 relative low/high close retracement last night. 50% at $123.36 and 61.8% at $118.83.

Jeff Bailey : 1/10/2007 9:36:18 AM

CNOOC Ltd (CEO) $85.19 -0.81% Link ... retraces 61.8% of its recent September relative low close to 12/29/06 high close.

Keene Little : 1/10/2007 9:30:59 AM

The descending wedge I've been showing the past few days looks like it's still in play with the move down in the futures this morning. Two equal legs down from yesterday morning's highs would have YM and ES testing the lows of the past 3 days. As shown on this ES chart, the first downside projection is to ES 1412.75 and then to 1406. Link

As noted on the chart, weekly pivot is at 1407 and that's potential support as well, should this get down there. That would also be a slight under-throw of the descending wedge which is a typical finish. This would have SPX finding support near 1400. The significance of this wedge is that it sets up the rally into next week (or end of month), which of course is opex week, and that will finish off the whole rally from July.

Jane Fox : 1/10/2007 9:24:36 AM

Poor little Hansel gave up the dyke in this market. Link

Jane Fox : 1/10/2007 9:23:28 AM

That chart of ES shows the importance of the 50EMA.

Jane Fox : 1/10/2007 9:22:13 AM

Oh little Hansel hold back the dyke
Oh little Hansel hold back the dyke
You gotta save your mama
You gotta save your papa
You gotta save the whole market. Link

Jane Fox : 1/10/2007 9:16:40 AM

Crude was able to at least hold on to its PDL overnight. Link

Jane Fox : 1/10/2007 9:13:44 AM

I know what you mean Marc. Just rattling your chain.

Marc Eckelberry : 1/10/2007 9:13:52 AM

My advice today is to keep an eye on interest rates and the ten year note. The yield is currently above 4.7% and that is hurting small caps.

Jane Fox : 1/10/2007 9:13:13 AM

Well I guess there are a few who think Seattle and Vancouver are major cities. (smile)

Marc Eckelberry : 1/10/2007 9:12:05 AM

I guess I meant major cities like NY, LA, London, Paris etc... You are right, there are pockets, but populated ares have been warmer.

Jane Fox : 1/10/2007 9:11:08 AM

ES and YM broke their respective PDLs overnight in a relatively bearish overnight session. Link

Jane Fox : 1/10/2007 9:08:42 AM

Marc it has not been warm everywhere. Talk to the people in Seattle and Vancouver and they will be telling you a whole different story.

Marc Eckelberry : 1/10/2007 9:07:38 AM

It has been warm everywhere, Jane. But a cold front is coming which is why NG is up. Regardless of the cold coming, there might now be sufficient inventory to hold prices down. Watch 53.80 weekly S1 should we lose the lows. Resistance is 57.40. Bargain hunters will come in at some point. Global warming also means hurricanes this summer and big ones, but that is a few months away.

Jane Fox : 1/10/2007 8:59:50 AM

... and if so then why has Natural Gas not fallen as well.

Jane Fox : 1/10/2007 8:57:09 AM

Above average temperatures on the East Coast are to blame for the slide in Crude? Get Real! The entire world's crude supply is been affected by the temp in one part of the world. HMMM I don't think so.

Jane Fox : 1/10/2007 8:55:29 AM

NEW YORK (MarketWatch) -- Crude-oil futures fell early Wednesday as traders braced for weekly supply data later this morning, expected to show the first increase in inventories in seven weeks.

Crude for February delivery was last down 61 cents at $55.03 a barrel in electronic trade after earlier touching a low of $54.57. On Tuesday, the contract zigzagged its way through the session, falling sharply early in the day, then bouncing back midsession and closing above the day's low, the worst level seen since June, 2005.

Forecasts for colder weather in the U.S. in the coming days helped push natural-gas prices higher and provided some support for oil. Above-average temperatures have been blamed for triggering the sharp selloff in oil since the beginning of the year. The front-month contract has lost more than 9% of its value in the past week.

The ample state of supplies has been another key factor pressuring prices, heightening interest in today's 10.30 a.m. Eastern release from the Energy Department.

Jane Fox : 1/10/2007 8:52:47 AM

WASHINGTON (MarketWatch) -- The nation's trade deficit narrowed again in November, adding support to the argument of some economists that the massive imbalance has finally peaked.

The trade gap narrowed by 1.0% to $58.2 billion, the Commerce Department said Wednesday. November thus marked the third straight month with a lower deficit, bringing the U.S. trade gap to its lowest level since July 2005.

In November, exports rose to a new record level while imports into the U.S. increased at a smaller pace.

The narrowing surprised Wall Street economists, who had expected the November trade deficit to widen to about $59.8 billion, according to a survey conducted by MarketWatch.

Meanwhile, the government slightly revised the October deficit, to $58.8 billion from $58.9 billion. The improvement in the deficit will boost fourth-quarter gross domestic product, economists agree. The only debate is over the size of the impact on GDP.

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