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Keene Little : 1/11/2007 10:51:06 PM

Here's a recommended short play on a stock--GM. Looks like a nice bear flag with a downside projection out of it to 23.11 (for two equal legs down from October). Place your stop above the 50-dma. GM is getting pinched between its 200-dma and 50-dma and the Bollinger Band has narrowed considerably. Contracting volatility should be followed by expanding volatility and I anticipate that will be with a move down. Link

Keene Little : 1/11/2007 10:20:48 PM

Friday's pivot tables: Link and Link

OI Technical Staff : 1/11/2007 10:00:01 PM

The Market Monitor has been archived.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

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Jeff Bailey : 1/11/2007 6:13:07 PM

GOOG $499.72 +2.09% ... $500.15 extended.

Jeff Bailey : 1/11/2007 6:12:42 PM

James Cramer calling GOOG at $515 by Wednesday!

Jeff Bailey : 1/11/2007 6:01:51 PM

Stock's explode as energy prices erode

Jeff Bailey : 1/11/2007 5:56:31 PM

Closing Internals found at this Link

Jeff Bailey : 1/11/2007 5:07:37 PM

February Crude Oil (cl07g) settled down $2.14, or -3.96% at $51.88.

Jeff Bailey : 1/11/2007 5:05:02 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 1/11/2007 4:27:13 PM

7 million shares blocked at $17.20 in ORCL

Jeff Bailey : 1/11/2007 4:07:35 PM

DRG.X 350.37 +0.84% ...

Jeff Bailey : 1/11/2007 4:06:48 PM

White House Confirms Veto Threat On Medicare Drug Bill

DJ- The White House confirmed Thursday that U.S. President George W. Bush would veto a House bill requiring the government to negotiate with drug companies for lower prices under Medicare.

"The Administration strongly opposes H.R. 4, which would not only repeal the prohibition against the Federal government interfering in negotiations between Part D plans, pharmacies, and drug companies for lower Part D drug prices, but would require that the Federal government negotiate directly with drug companies," the Office of Management and Budget said in a Statement of Administration Policy.

"If H.R. 4 were presented to the President, he would veto the bill."

The veto threat was first reported by the Associated Press, which cited Republican officials.

The House is expected to vote Friday on the bill, which is part of Speaker Nancy Pelosi's top agenda items for the Democrats' first 100 hours in power.

The OMB statement is Bush's second veto threat of the day. The administration said he would veto legislation expected to pass the House that would ease restrictions on human embryonic stem cell research.

Bush has only vetoed one bill in his six years in office, another stem cell measure.

The White House said the medicare drug bill is unnecessary because it would have little or no effect on government spending and provide no savings to the government or Medicare beneficiaries.

In opposing the House legislation, the White House argued that Part D, which offers prescription drug coverage under Medicare, "has been a strong success" and now serves 90% of Medicare beneficiaries at a lower cost than originally expected. As a result, the administration says the government doesn't need to get involved in price negotiation.

"Government interference impedes competition, limits access to life-saving drugs, reduces convenience for beneficiaries, and ultimately increases costs to taxpayers, beneficiaries, and all American citizens alike," OMB said. "Furthermore, competition is reducing prices to seniors, providing a wide range of choices, and leading to a more productive environment for the development of new drugs."

Jeff Bailey : 1/11/2007 3:59:48 PM

SAP also forecasting Q4 sales +7% to roughly $3.8 billion. Consensus $3.84

Jeff Bailey : 1/11/2007 3:55:12 PM

SAP said it expects to report 06 earnings of $1.93/share. Consensus $1.91.

Jeff Bailey : 1/11/2007 3:51:40 PM

ORCL $17.46 -1.74% ... on volume

Jeff Bailey : 1/11/2007 3:51:05 PM

SAP Ag (SAP) $49.30 -9.97% ... plunging

Keene Little : 1/11/2007 3:43:05 PM

Seeing the market pullback like this, if this now drops below this afternoon's low, that should mean we've seen the end of the first leg up and should pull back into tomorrow. The upside targets for the 5th wave of the move up from yesterday's lows were for equality with the 1st wave. Instead, so far they achieved 62% of the 1st wave which is the common relationship for a truncated 5th wave.

This DOW 10-min chart shows what I'm talking about. The upside projections for the 5th wave were 12532 (62% of the 1st wave) and then 12551 (I had said 12533 previously but was off by 2). It can still press higher obviously but if it drops back below 12500 from here then I think we'll be into the pullback (wave-B). Otherwise continue to watch for the upside target at 12551. Link

Jeff Bailey : 1/11/2007 3:32:34 PM

YM 12,575 ... mid-point of post e-cbot resumption.

Jeff Bailey : 1/11/2007 3:25:57 PM

Sell Program Premium ... YM 12,567 : SPY $142.12

Tab Gilles : 1/11/2007 3:21:14 PM

Heres a chart of the XLK & XLE with $BPENER & $BPCOMPQ Link

Jeff Bailey : 1/11/2007 3:12:44 PM

03:10 Market Watch found at this Link

Jane Fox : 1/11/2007 3:12:13 PM

House passes legislation to expand stem-cell research

Jeff Bailey : 1/11/2007 3:10:27 PM

GOOG $501.50 +2.43% ... intra-day high. Breaks free of $500 strike. WEEKLY R2 at $505

Keene Little : 1/11/2007 3:10:06 PM

The upside target for the DOW/YM, based on the 5th wave equaling the 1st wave in the move up from yesterday's low, is at 12553/12616.

Jeff Bailey : 1/11/2007 3:07:44 PM

YG resumed $612.50

Jeff Bailey : 1/11/2007 3:07:30 PM

YI resumed ... 12.412

Keene Little : 1/11/2007 3:07:19 PM

Looking at the same trend lines as I mentioned for ES (2:39), they cross at SPX 1427.50 at the end of today so again, I think that will be a good place for a short into tomorrow before setting up the final rally leg.

Jeff Bailey : 1/11/2007 3:05:14 PM

YM resumed ... 12,586

Jeff Bailey : 1/11/2007 3:03:18 PM

CBOT's e-cbto still not up.

Jane Fox : 1/11/2007 2:55:23 PM

WASHINGTON (MarketWatch)-- Cathy Minehan, who worked for the Federal Reserve for almost four decades and became the first woman to head the Boston Federal Reserve Bank, announced Thursday that she intends to step down from her post once a successor is in place.

Minehan, who will turn 60 next month, is considered a "dove" by economists, which essentially means that she is not thought to have an itchy trigger finger to hike rates to combat inflation

Marc Eckelberry : 1/11/2007 2:55:18 PM

Techs bounce back on the lower oil, but AD line down to +879 from 1350. Watch NQ 1854.

Jeff Bailey : 1/11/2007 2:55:02 PM

GLD $60.67 +0.13% ... an alternative to YG

Jeff Bailey : 1/11/2007 2:54:33 PM

SLV $123.00 -0.58% ... an alertnative to YI

Jeff Bailey : 1/11/2007 2:49:49 PM

And this rise in DIA gives hint YM very short to the close.

Jeff Bailey : 1/11/2007 2:49:14 PM

DIA $125.14 +0.57% ... e-bot halt explains that spike to $124.80

Jeff Bailey : 1/11/2007 2:45:10 PM

CBOT: e-cbot Trading System Halted ... to restart at 03:00 PM EST.

Keene Little : 1/11/2007 2:43:14 PM

We all did Jeff. I'm curious why ECBOT seems to have so many more reliablity problems as compared to GLOBEX. When we trade ECBOT products (such as YM, ZN, ZB, YG, YI, etc.) it's always smart to be ready to have something to hedge your play (whether it's other futures or options). Be ready.

Keene Little : 1/11/2007 2:39:37 PM

ES 1436.75 happens to be where the broken uptrend line from November 28th intersects the downtrend line from December 15th. It's possible we've already seen the high for the 1st leg up but as I said, another new high should set up a nice short play, probably tomorrow morning. Link

Jeff Bailey : 1/11/2007 2:38:54 PM

I lost my YM feed at 02:15 PM EST

Jeff Bailey : 1/11/2007 2:35:39 PM

NWX.X +0.18% ...

Jeff Bailey : 1/11/2007 2:35:27 PM

DDX.X +0.28% ..

Keene Little : 1/11/2007 2:33:59 PM

If we get another push higher then the 5th wave of the move up from yesterday's low will equal the 1st wave at ES 1436.75. That's the level I'd watch for a short play to set up and ride this back down tomorrow before setting up another long play.

Jeff Bailey : 1/11/2007 2:30:55 PM

XOM $71.11 +0.16% ...

Jeff Bailey : 1/11/2007 2:30:29 PM

S&P 100 (OEX.X) 661.38 +0.46% ... only major in my index Pivot Matrix to not trade its WEEKLY R1.

Jeff Bailey : 1/11/2007 2:28:47 PM

FTSE 100 (FTSE) finished up 69.40 points, or 1.13% at 6,230.10

Keene Little : 1/11/2007 2:27:57 PM

ES 1429.25 was where we had two equal legs down from today's high. If we haven't finished the 1st leg up and this is to be just a pullback before getting another high to finish the 1st leg, then that will likely hold as this afternoon's low.

Marc Eckelberry : 1/11/2007 2:26:59 PM

Capitulation day for crude? Watch 51.35/51.89 area of support.

Jeff Bailey : 1/11/2007 2:25:54 PM

UTH $125.68 -0.09% ... slips red.

Jeff Bailey : 1/11/2007 2:25:26 PM

DDX.X 161.03 -0.09% ... slips red.

Jeff Bailey : 1/11/2007 2:24:00 PM

iShares Silver (AMEX:SLV) $122.93 -0.64% ... set to test short-term upward trend from 01/05/07 relative low. Trend at $122.50. A break there would be a "bear wedge"

Keene Little : 1/11/2007 2:22:30 PM

ECBOT is currently down. Use ES if you need to hedge a trade in YM.

Jeff Bailey : 1/11/2007 2:13:32 PM

OIH -0.89% is sector loser.

Jeff Bailey : 1/11/2007 2:13:15 PM

Seeing some red in US Market Watch ... NWX.X, BIX.X, BKX.X, OIX.X, OIH, XNG.X and HUI.X

Marc Eckelberry : 1/11/2007 2:12:59 PM

At 10:24:28 AM I mentioned shorting small caps if rates rise some more. ER dropped 7 points.

Jeff Bailey : 1/11/2007 2:11:23 PM

SPY $142.04 +0.35% ...

Jeff Bailey : 1/11/2007 2:11:05 PM

DIA $125.00 +0.45% ...

Jane Fox : 1/11/2007 2:09:03 PM

SAN FRANCISCO (MarketWatch) -- The outlook for manufacturers' future business activity fell in December from the previous three months while longer-term indicators like capital spending rose, pointing to a short-lived industrial slowdown this year, according a quarterly report released Thursday by the Manufacturers Alliance/MAPI.,p> The report builds on a composite index of future business activity based on a survey of 69 senior financial executives at the trade group's members. That index fell to 54 from 64 in September, its lowest level since March 2002, breaking 16 consecutive quarters with readings of 60 or more.

A reading over 50 indicates executives expect business activity to grow. The decline suggests they see expansion at a slower space.

The trade group found that the orders index, which compared new orders in the fourth quarter with the year-ago quarter, showed about 66% of manufacturers surveyed are predicting an increase, down from 77% in September.

Marc Eckelberry : 1/11/2007 2:09:36 PM

Looks like shorting weekly R2 at 1856.50 was a good move. 1847 is now R. Interest rates are soaring. Ten year yield at 4.75%. Remember, I discussed this a while back, 4.7% is critical.

Jeff Bailey : 1/11/2007 2:07:44 PM

MSFT $30.29 +2.12% ...

Jeff Bailey : 1/11/2007 2:07:25 PM

INTC $21.93 +1.90% ...

Jeff Bailey : 1/11/2007 2:06:53 PM

CSCO $28.67 -0.03% ... darts lower.

Jeff Bailey : 1/11/2007 2:05:56 PM

QQQQ $45.00 +0.85% ...

Keene Little : 1/11/2007 2:06:14 PM

I want to get out ot a short call spread on the DIA. Any suggestion on where we might pull back to to close it out?

Sounds like what I was asking myself back in October on my short call spread (wry smile). If we're to get a 3-wave move up from yesterday's low, the first leg up should be close to finishing, if it hasn't already done so. A sell off this afternoon is a possibility. The pullback should achieve a 38-62% retracement of the leg up from yesterday so as an example, that gives us DOW 12428-12472 and SPX 1413-1419 as retracement zones to watch. It could obviously go more or less.

I've got several degrees of the EW pattern for the DOW pointing to 12630 for a high. If we're to get two equal legs up from yesterday's low, and if we've seen the high for the 1st leg up, then we should get a pullback to 12442 (cash) which happens to be yesterday's close. That's just speculation but something I'd love to see play out and it gives an idea of what kind of pullback we might get.

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

Might want to note GOOG call OI heaviest at $500 strike.

Didn't look at QQQQ yesterday before profiling those puts and I should have.

Jeff Bailey : 1/11/2007 1:45:36 PM

01:00 Internals found at this Link

Keene Little : 1/11/2007 1:45:35 PM

BTW, looking at the GOOG weekly and daily charts shows another interesting possibility. The move up from August 2006 could be forming a fractal of the move up from 2004 to August 2006. If true we'll see a smaller version of that big sideways triangle that played out from January to July 2006. That would suggest the current rally will be followed by a down-up-down sequence over the next month or two before getting the final rally leg up. So the $451 level becomes even more critical in this case.

Keene Little : 1/11/2007 1:33:21 PM

For those who are following GOOG and/or EW analysis I thought I'd share an exchange with a reader on what I've been posting the past 2 days on GOOG.

Like your EW count for GOOG. However, I get the feeling that your 3 wave high in NOV was THE high (really the 5th wave). If you look at the daily MACD, your labeled 3rd wave was met with a negative divergence suggesting that what we saw in NOV was THE high already. The reason I say this is on the 60-min chart of GOOG, I'm seeing/counting a 5 wave (the first impulse move to the downside) move from the NOV high. This tells me that this bounce is corrective and we should fail at a lower high near the current level. Clearly if we take out the previous low near 451 AND close the gap, I'm thinking short. BTW, you said that your 5th wave would top at 500. If this is the case, are you saying that GOOG finishes with a truncated 5th wave, Thoughts?

Again, excellent observations and questions. EW is NOT an exact science and is subject to just as much interpretation as any other "technical" indicator. The reason I like is because it is a way of "seeing" the future (as long as your wave count is correct).

As for that MACD divergence at the November high, I thought the same thing, especially since that high is negatively divergent against the high in January 2006. Here's the weekly chart showing a clear divergence: Link The only thing I don't like is the 3-wave pullback from the November high (I'm using the daily chart for this assessment). I'm thinking we'll get one more minor high that is negatively divergent against the November high and that would be good confirmation that the current rally is the 5th of the 5th wave when looking at the weekly chart.

The interesting thing here is that we have a clean 5-wave move up from December (it's possible though that it needs a pullback and then one final high). Does this mean we're going to end up with a truncated 5th wave here around $500? It's looking like a good possibility at the moment but as I said it might need a pullback and new high to finish it off. I agree with you on the $451 level--take that out and I'd say GOOG is done rallying for a long while.

Jeff Bailey : 1/11/2007 1:30:25 PM

SLV $123.46 -0.25% ...

Jeff Bailey : 1/11/2007 1:29:38 PM

GLD $60.81 +0.33% ... on volume.

Jeff Bailey : 1/11/2007 1:26:53 PM

PTEN $22.33 +1.17% ... NDX/QQQQ "oil-related" component. Reversing $23.10 intra-day high.

Jeff Bailey : 1/11/2007 1:24:50 PM

OIX and OIH slip red.

Jeff Bailey : 1/11/2007 1:20:25 PM

Swing trade short alert for 1/2 position in shares of Bema Gold (BGO) at the bid of $5.05, stop $5.16, target $4.85

Jane Fox : 1/11/2007 1:16:20 PM

Do not - I repeat - DO NOT try shorting this market. Link

Jeff Bailey : 1/11/2007 1:05:40 PM

01:00 Market Watch found at this Link

Marc Eckelberry : 1/11/2007 1:05:20 PM

Last year's January high for NDX (QQQQ) peaked on this same day, January 11th. The index is up almost 5% for the year and we haven't even started earnings for the big guys. Equity pc ratio is at .50, started the day at .39.

Jeff Bailey : 1/11/2007 1:00:44 PM

March Silver (yi07h) $12.532 +0.66% ... no volume, but jumped from 12.446 just minues ago.

Jeff Bailey : 1/11/2007 12:58:45 PM

iShares Silver (AMEX:SLV) $124.39 +0.53% ... whips back higher.

Jeff Bailey : 1/11/2007 12:56:12 PM

Nigeria's Govt. Plans Cash Tender For Oil Warrants In Q1

DJ- The Nigerian Ministry of Finance plans to launch a cash tender offer for oil warrants during the first quarter of 2007, the government said in a Thursday statement.

The oil warrants were issued by Nigeria's central bank in 1991 as part of the country's Brady-style debt restructuring, according to the statement. The government said it expects to carry out a modified Dutch auction.

The statement also said the offer period will last for no shorter than six weeks.

In a separate letter to the Emerging Markets Traders Association, Finance Minister Nenadi Usman noted that "secondary market trading of the Oil Warrants has been disorderly. Prolonged failure in settlements...are a continuing problem."

The government said it's fielded complaints that cash payments on the warrants haven't reached the registered holders of those securities.

The Nigerian authorities said they hope the advance notice of the tender offer will encourage investors to reconcile their trading positions, thus allowing the registered holders of the warrants to participate.

Jeff Bailey : 1/11/2007 12:53:59 PM

Boston Fed's Minehan To Retire

Keene Little : 1/11/2007 12:49:09 PM

NDX is facing potential resistance from a long term broken uptrend line from April 2005 through October 2005 (broken in May 2006). Price found resistance at this line in November and December and hit it today at this morning's high. Link

Just above this trend line is the one along the highs from January 2004 and January 2006, currently at 1865. Crossing this trend line early next week is the broken uptrend line from August. Is there something about January and this trend line? Will it again act as a major turning point for the market? Stay tuned.

Jeff Bailey : 1/11/2007 12:49:01 PM

US Oil Fund (USO) 45.16 -0.25% ... set to test morning lows. WEEKLY S1 found sellers at $46.06.

Jeff Bailey : 1/11/2007 12:47:42 PM

iShares Silver (AMEX:SLV) 123.50 -0.18% ... reversing gains.

Jeff Bailey : 1/11/2007 12:40:39 PM

Airlines +2.39%, Homebuilders +1.58%, Broker/Dealer +1.50% sector winners.

Keene Little : 1/11/2007 12:18:58 PM

I mentioned the brokers making a new high as well and as shown on this daily chart, price has been following parallel channels based off the uptrend line from April-October 2005. The top of the channel, that price briefly poked through in October and November is currently near 255.50. The leg up from December 22nd would look best with a small pullback and then a final high to finish off its wave count. Link

Jane Fox : 1/11/2007 12:12:41 PM

CHICAGO (MarketWatch) -- Mortgage rates edged up in Freddie Mac's weekly survey released on Thursday, the fourth increase in five weeks, lifted by a strong December employment report, the company's chief economist said.

Jeff Bailey : 1/11/2007 12:09:37 PM

RUT/INDU both at WEEKLY R1. If sellers are going to show up, this would have to be the last line in the sand.

Marc Eckelberry : 1/11/2007 12:04:13 PM

NQ 1854.25 is 50% projection yesterday, so bullsneed to close a 10 mn candle above that before they can even think of overcoming weekly R2 at 1856.50. But the internals are very bullish, so it can happen. At least you know where to put your stops if short. Monthly R2 is 1881, should we get a +47 day. That is a rare occurence, so I doubt it, usually requires +2000 ADVDEC on Nasdaq. The other possibility is COMP 2500. In fact, 2504 is 23.6% projection December.

Keene Little : 1/11/2007 12:01:29 PM

The mid-December highs for SPX and ES are 1431.81 and 1445, resp. The January highs for the DOW and YM are 12580.35 and 12652, resp. The early-December highs for the RUT and ER are 801.01 and 809.60, resp. So far NDX and COMP are the only ones to exceed their previous highs (as well as some individual sectors such as the brokers (XBD.X).

Jeff Bailey : 1/11/2007 11:47:12 AM

If no other NDX/QQQQ components have given a PnF sell signal today, that trade at $496 for GOOG would be enough to have Dorsey/Wright's NASDAQ-100 Bullish % (BPNDX) reversing back up to "bull confirmed" status at 70%.

Keene Little : 1/11/2007 11:43:42 AM

As can be seen on the SPX daily chart, the broken uptrend line from July through the November low is acting as resistance at the moment, currently at 1426.70. If we're into the final 5th wave up it will be a 3-wave move and that means we could see a deep retracement followed by another spike up to a new high. That's why I'm saying be careful about whipsaw price action. Link

You can see the bearish divergences since the October high and this helps confirm the EW count which calls the whole choppy move up since that high as the 5th wave. We should now be in the 5th of the 5th wave and it should be ending soon. There are some Fibs pointing to the possibility that SPX will top out near 1450 so that's the upside potential and the caution for those trying to short this market. But, the caution for bulls is that there's an equal chance in my opinion that we'll only see a test of the December high.

Jeff Bailey : 1/11/2007 11:42:41 AM

SPX NH/NL have ramped to 52:0

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

11:00 Internals found at this Link

Jane Fox : 1/11/2007 11:36:08 AM

SAN FRANCISCO (MarketWatch) - The Democrats have picked Denver for their 2008 presidential nominating convention, according to media reports Thursday. The announcement will be made later Thursday by party chairman Howard Dean, the New York Times reported on its Web site, citing Democratic officials. The party had also considered holding its convention in New York.

Jane Fox : 1/11/2007 11:29:01 AM

*NYSE advancers outnumber decliners 25 to 6
*Nasdaq advancers outnumber decliners 20 to 7

Jane Fox : 1/11/2007 11:54:15 AM

Today playing the odds is working in your favor. Link

Marc Eckelberry : 1/11/2007 11:18:32 AM

NQ 1856.50 is weekly R2 as it blasts past 1850.75. With the SOX only up .21%, this could do it for today.

Marc Eckelberry : 1/11/2007 11:12:18 AM

NQ double tops November (1850.75). The SOX is the weakest link today, although everyone is up, including oil. We might see some some bargain hunting in the energy sector and possibly some rotation back in. 45 oil is not going to happen, I am not in that bearish camp at all. With El Nino and global warming, we could have the roughest hurricane season on record.

Keene Little : 1/11/2007 11:08:51 AM

The bullish picture here is that it certainly looks like yesterday's low has finished the correction from December's high. As I've been showing for the past week, that A-B-C pullback shown on this chart should have been the end of wave-4 and we've now started wave-5 to a new high. It will likely be a choppy move with lots of whipsaws. Short term resistance on this chart is the broken uptrend line from November 28th at 1435 and then the downtrend line from December 15th at 1437. Link

Jeff Bailey : 1/11/2007 11:02:18 AM

11:00 Market Watch found at this Link

Keene Little : 1/11/2007 11:00:54 AM

YM is facing resistance in the 12565-12580 area by its broken uptrend line from December 1st and previous highs. As can be seen at its previous broken uptrend line, YM tends to push above briefly before reversing back down so watch for that possibility here. Link

Jeff Bailey : 1/11/2007 10:52:25 AM

US Dollar Index (CEC:DXY) 85.28 +0.31% ... WEEKLY R1.

Keene Little : 1/11/2007 10:51:10 AM

MER is now hitting its potential upside resistance level and ES is close to hitting its weekly R1/daily R2 so watch for a possible high for the day.

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

GSO.X 187.95 +0.29% ... kissed WEEKLY Pivot (185.13) Monday morning and Wednesday morning. WEEKLY R1 up at 189.14.

Jeff Bailey : 1/11/2007 10:47:39 AM

SMH $35.07 +0.92% ... after test of WEEKLY R2 and $35 strike.

Keene Little : 1/11/2007 10:32:38 AM

Marc makes a good point about the Thursday prior to opex. It is often the head fake day. A rally today could be setting up a down week next week.

Jeff Bailey : 1/11/2007 10:31:58 AM

EIA: Weekly Nat. Gas Storage Table Link ... draw of 49 Bcf

Jeff Bailey : 1/11/2007 10:25:48 AM

FTSE 100 Index (FTSE) +20, or 0.34% at 6,181.60 Link ...

Marc Eckelberry : 1/11/2007 10:24:28 AM

Internals are bullish, they will go for QQQQ 45, watch NQ 1847/1850, which would double top November. Cash index already did (NDX 1825), but with a bearish divergence on the weekly RSI. It is not uncommon the Thursday before opex to put in a top or a bottom. In any case, NQ is almost 30 points away from its 5 DMA at 1817, a bit steep with rising interest rates. Watch TNX 4.7%. If rates keep climbing, watch those small caps. It could be a nice short.

Tab Gilles : 1/11/2007 10:23:20 AM

Citrix Systems (CTXS) $29.65

Everyone has been talking about the new phone from Apple "iPhone" (not the Cisco phone) and the iTV and how other companies will benefit from Apple new products. Just look at CNBC's Thomas Ko recommendation of Mobility Electronics (MOBE) today. It makes products for iPod and other Apple products. Link Link

Just as companies can benefit from Apple there are those that can benefit from Microsoft's Vista, one such company is Citrix Systems. Just look at this weekly chart and the Bullish Divergence. Link

Early signs that point to the fact that Citrix is going to be a crucial player when it comes to driving Vista adoption. Link

Jane Fox : 1/11/2007 10:22:10 AM

Even though the bulls obviously ended up winning yesterday, the highest probability trade was not long. Yesterday was one of those days when playing the odds did not work out. It happens unfortunately but that is why we call them odds and not guarantees.

Today the highest probability trade is long and you are playing against the odds if you try shorting. This is a day you want to buy the dips. Always always keep the odds in your favor and over time you will win.

Jeff Bailey : 1/11/2007 10:20:52 AM

20/20 I missed a very good long on the YM back above WEEKLY Pivot. If you got it, I'd have a stop at 12,540

Keene Little : 1/11/2007 10:19:08 AM

ES daily R2 is at 1433 and weekly R1 is at 1432.75. That could make for a potential high today.

Jane Fox : 1/11/2007 10:17:42 AM

Yesterday the bears had the ball and were running with it but fumbled and the bulls were able to grab it and run for a touchdown. Today the bulls have the ball and it looks like they have no intention of letting the bears anywhere near it. This is a day to stay away from shorting. Link

Keene Little : 1/11/2007 10:15:17 AM

For all those bubble heads on CNBC who kept explaining the reason for the market's rally over the past many months was because the Fed was close to cutting interest rates I wonder what they're thinking now. Once again, it's not news that drives the market but instead the other way around. Once fear sets in and the market starts selling off then people will come up with the news to support the move.

Jeff Bailey : 1/11/2007 10:03:02 AM

10:00 Market Watch found at this Link

Keene Little : 1/11/2007 10:02:12 AM

MER is finally joining the bulls' party. I see an upside target for it near 95.30 if it can keep going (currently 94.91).

Keene Little : 1/11/2007 9:57:26 AM

Next gap to fill is YM's at 12551 and just about there.

Jeff Bailey : 1/11/2007 9:55:02 AM

Google (GOOG) $497.64 +1.67% Link ... gapped above WEEKLY R1 (496.12).

Keene Little : 1/11/2007 9:50:51 AM

MER still not joining the party.

Jeff Bailey : 1/11/2007 9:50:20 AM

QQQQ $44.85 +0.51% ... just traded new 52-week high!

Jane Fox : 1/11/2007 9:46:50 AM

TICKS +800 something we did not see yesterday.

Jane Fox : 1/11/2007 9:42:14 AM

You've got the VIX and the AD volume in sync and that is enough for me to say stay on the long side.

Keene Little : 1/11/2007 9:40:55 AM

MER is not joining the early rally out of the gate so we'll see if that's our barometer here.

Keene Little : 1/11/2007 9:38:39 AM

We've got a gap fill for ES at 1427.75 not far above and for YM it would have two equal legs up off Monday's low at 12544 so those are two levels I'd watch for a potential reversal if they get up there.

Jane Fox : 1/11/2007 9:36:31 AM

VIX opens below its PDL and the TRIN above.

Jane Fox : 1/11/2007 9:36:06 AM

AD line is a bullish +825 and AD volume pointing straight up. The bulls have the ball and are running with it.

Keene Little : 1/11/2007 9:12:14 AM

The overnight futures had a negative bias but we're seeing a lift as we get nearer to the open. Watch for an initial push to the upside that gets sold into. Bonds have sold off on the waning hope for a Fed that will lower interest rates soon. That could depress equities today as well.

Jane Fox : 1/11/2007 9:02:50 AM

Here is an update on how Hansel is doing holding back the dyke (50EMA). So far so good. Link

Jane Fox : 1/11/2007 9:01:04 AM

Take note of how Gold reacts when the US$ falls.

Crude broke its PDL overnight with an overnight low of 52.95. Wow. Link

Jane Fox : 1/11/2007 8:57:21 AM

Lower lows and highs are bearish so you have to give the overnight session to the bears. Although they didn't pull back enough to not think the markets are just ramping up another run at their respective PDHs. Link

Jane Fox : 1/11/2007 8:55:03 AM

NEW YORK (MarketWatch) -- The odds of a rate hike fell Thursday after a surprise interest rate hike by the Bank of England and a bigger-than-expected drop in initial jobless claims. April fed funds futures slipped 0.01 to 94.755, implying a 2% chance that the Federal Reserve will lower its target for overnight rates to 5% from 5.25% by the end of the first quarter. The odds of a rate cut by the end of the second-quarter fell to 30%. Late Wednesday, fed funds futures were pricing in a 6% chance of a rate cut by the end of March and a 44% chance of a cut by the end of June. The Bank of England lifted its key interest rate to 5.25% from 5%, as inflation remained above its comfort zone, and output and demand continued to rise. The consensus had been the BoE would at least wait until the February inflation report to make any move on rates.

Jane Fox : 1/11/2007 8:52:38 AM

BOSTON (MarketWatch) -- M/I Homes Inc. (MHO) Thursday said new contracts for the quarter ended Dec. 31 fell 61% from a year earlier to 353 homes. The Columbus, Ohio-based home builder said its cancellation rate rose to 63% in the fourth quarter from 27% in the year-ago period, and from 42% in the third quarter. "Conditions in most of our markets remained difficult throughout the fourth quarter," said Chief Executive Robert Schottenstein in a statement. "For the past six months, we have consistently stated that housing conditions are likely to remain challenging throughout 2007 and we see no reason to deviate from that belief."

Jane Fox : 1/11/2007 8:46:19 AM

* Odds of Fed rate cut by end of March down to 2%
* Odds of Fed rate cut by end of June down to 30%

Jane Fox : 1/11/2007 8:45:06 AM

A Home Depot Inc. (HD) shareholder group has requested a temporary restraining order to keep the company from paying Bob Nardelli, former chief executive, any more of his $210 million severance package, according to a Wednesday media report.

Jane Fox : 1/11/2007 8:43:54 AM

Cisco Systems Inc. (CSCO) said it has filed a lawsuit against Apple Inc. (AAPL), seeking to prevent Apple from using the iPhone trademark. Cisco said it obtained the iPhone trademark in 2000 after acquiring Infogear.

Jane Fox : 1/11/2007 8:43:03 AM

The Bank of England surprised markets by raising its key rate to 5.25% in a bid to curtail inflation. London stocks slumped and sterling rallied. The European Central Bank kept its key rate unchanged. Japan's Nikkei ended lower, with rates there also in view. China's currency rose to parity with the Hong Kong dollar in what strategists said was a key psychological move.

Jane Fox : 1/11/2007 8:42:47 AM

WASHINGTON (MarketWatch) - In a sign of a robust labor market, U.S. weekly jobless claims fell to their lowest level since late July, the Labor Department said Thursday.

First-time applications for state unemployment benefits fell by 26,000 to 299,000 in the week ending Jan. 6, the Labor Department said Thursday. This is the lowest level since the week ended July 22.

The four-week average of new claims dropped by 1,750 to 314,750, the lowest since the week ended Nov. 11.

The previous week's initial claims were revised to 325,000 from 329,000.

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