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Keene Little : 1/24/2007 12:04:44 AM

The techs have looked downright bearish since giving up their January highs. The RUT looks even more bearish with an impulsive wave count down and a corrective bounce so far. But sticking with the NDX for now, the pullback is a little more than 62% of the January rally and it looks to be building some bullish divergences on the 30 and 60-min charts. This is happening while the daily stochastics (fast setting) is now into oversold. Link

NDX is also nearing potential support at its uptrend line from July through the January low. I don't know how strong support will be there since it hasn't been tested but it bears watching (at 1767 on Wednesday). It looks like a good setup for a bounce. The question in my mind is whether the techs can muster up enough buyers to drive this back up. I keep wondering how the DOW, SPX and the NYSE will drive to new highs without the techs. It could happen by rotation out of the techs but would that be enough?

Looking at that daily chart shows an ascending wedge and I'm wondering if it will be able to work its way up to its upper Fib projection at 1866 (where the 5th wave would equal 162% of the 1st wave). It could happen and we all know how this market has refused to die every time it looked ready to do so. But I will admit that looks like a real stretch from here.

The bears want to see a bounce held down by its moving average cluster around 1790 and then break below the uptrend line at which time I'd say we want to be bearish the techs. As with the other indices, a break of the January low is what is needed to give the bears control of the ball. We're still waiting to see if the bulls recover their fumble.

Keene Little : 1/23/2007 11:46:04 PM

Continuing with the DOW, for which I showed 120-min and daily charts on Tuesday, and with the wave count that calls for another rally leg, I'll use this 60-min chart to chart its progress. Link

We got a continuation of the bounce that started Monday afternoon and as you can see, the decline from the January high left a clear 3-wave move down. Even if the pullback gets larger with another leg down it says we are not done with the rally yet. Assuming the pullback to Monday's low is it then we've started wave-c up and I'll be watching to see how it forms so that I'll get a better feel for where it might end.

As I've mentioned previously, there are two Fib projections that I'll be watching where the first one is in the 12625 (cash) area. The top of the ascending wedge for price action since November is near 12650 and then the upper Fib projection is at 12727. This wave-c could form its own ascending wedge and based on the way it has started that's what I'm thinking it will do. That means expect lots of chop and whipsaws for the next several days so be careful in your trading.

Keene Little : 1/23/2007 10:53:33 PM

Wednesday's pivot tables: Link and Link

OI Technical Staff : 1/23/2007 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.

Marc Eckelberry : 1/23/2007 7:19:10 PM

2000 all over again. Strongest earnings on record for many but lower guidances and markets ignore the warnings even as rates rise. Tops are not made with lower earnings, they are made with the best, but also with a lower view of the future. Careful out there.

Jeff Bailey : 1/23/2007 6:37:07 PM

Closing Internals found at this Link

Jeff Bailey : 1/23/2007 6:08:18 PM

March Crude Oil (cl07h) settled up $3.91, or +7.65% at $55.04.

Jeff Bailey : 1/23/2007 6:07:24 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 1/23/2007 6:02:14 PM

News Corp Enters Takeover Fray for Tribune

DJ- News Corp. (NWS) has entered the fray for Tribune Co. (TRB), looking to take a stake in its New York-based newspaper, Newsday, the Financial Times reported on its Web site Tuesday.

According to someone familiar with the situation, News Corp. head Rupert Murdoch is seeking to combine back office and operational functions at Newsday with those of his floundering New York Post.

Newsday is one of Tribune Co.'s largest newspapers, along with the Los Angeles Times and Chicago Tribune. Tribune Co. put itself up for sale in September, at the urging of the Chandler family, which owns 20% of the company. The Chandlers said in a recent filing with the Securities and Exchange Commission they were in discussions with strategic investors about joining the bid, FT reported.

Murdoch would likely take a minority stake in a consortium owning the Tribune's newspapers, rather than attempting to buy outright control of Newsday, the source said, according to the FT report, as News Corp. would be constrained in the New York market by U.S. media ownership rules.

News Corp declined to comment, FT reported.

Jeff Bailey : 1/23/2007 5:53:07 PM

QQQQ 1.1 million blocked at $43.71

Jeff Bailey : 1/23/2007 5:44:58 PM

Standard & Poor's Announces Change To U.S. Index

DJ- Encore Acquisition Co. (NYSE: EAC) will replace McDATA Corp. (NASD: MCDTA) in the S&P MidCap 400 index after the close of trading on a date to be announced. McDATA is being acquired by Brocade Communications Systems Inc. (NASD: BRCD) in a deal that is still pending final approvals.

Jeff Bailey : 1/23/2007 5:14:18 PM

Baidu.com (BIDU) ... $125.68 ...

Jeff Bailey : 1/23/2007 5:13:54 PM

Google (GOOG) $479.05 -0.37% ... $482.00 now.

Jeff Bailey : 1/23/2007 5:12:47 PM

Yahoo's Overseas Growth Outstrips US

DJ- Yahoo Inc. (YHOO) said Tuesday that sales to companies based outside the U.S. grew at a rate slightly more than three times the U.S.-based sales.

Yahoo's overseas sales between October and December rose 25%, compared with the 8% growth from U.S.-based sales.

The figures illustrate the growing importance of overseas markets to Yahoo and other Internet companies, and the slowing growth of the U.S. market.

Jeff Bailey : 1/23/2007 5:11:53 PM

Yahoo! (YHOO) $26.96 -1.67% ... whipped back higher now ... $28.10

Jeff Bailey : 1/23/2007 5:08:14 PM

EIA Preview ... Consensus is build of 1.1M for Crude Oil, Draw of 0.7M for Distillate, Build of 1.1M for Gasoline.

Jeff Bailey : 1/23/2007 5:06:35 PM

Reminder ... President Bush will deliver State of The Union Address at 09:00 PM EST. (02:00 GMT)

Jeff Bailey : 1/23/2007 5:02:23 PM

Apex Silver (SIL) $14.07 +4.45% ... tomorrow's DAILY R2 overlaps with WEEKLY R2 ($14.38)

Jeff Bailey : 1/23/2007 4:59:00 PM

Baidu.com (BIDU) $124.55 +1.75% ... $124.70 extended.

Jeff Bailey : 1/23/2007 4:58:33 PM

Google (GOOG) $479.05 -0.37% ... $480.06 extended.

Jeff Bailey : 1/23/2007 4:46:13 PM

Yahoo! (YHOO) ... Earnings Press Release Link

Consensus was for EPS of $0.13 on Revenue of $1.22B

Jeff Bailey : 1/23/2007 4:44:41 PM

Seagate Tech (STX) $26.18 -1.13% ... released for trade ... $26.30

Jeff Bailey : 1/23/2007 4:36:51 PM

QQQQ $43.58 -0.25% ... $43.58 extended ...

Jeff Bailey : 1/23/2007 4:34:53 PM

Yahoo! (YHOO) $26.96 -1.67% .... $26.75 extended on headline numbers.

Jeff Bailey : 1/23/2007 4:30:42 PM

Looks light by $0.14 on the bottom line.

Jeff Bailey : 1/23/2007 4:28:40 PM

Advanced Micro (AMD) ... Earnings Press Release Link

Consensus was for EPS of $0.10 on Revenue of $1.73B

Jeff Bailey : 1/23/2007 4:26:59 PM

Advanced Micro (AMD) $17.51 -0.11% ... halted on earnings.

Jeff Bailey : 1/23/2007 4:22:16 PM

Shanghai Bullish % "bull confirmed" at 91.74%

Jeff Bailey : 1/23/2007 4:19:01 PM

Correction: to my 04:15:41 post. 16th Drive-thru, not 6th. I knew I heard "six."

Jeff Bailey : 1/23/2007 4:17:49 PM

McDonald's partners with oil company to open Beijing drive-thru

USA Today Link

Jeff Bailey : 1/23/2007 4:15:41 PM

Heard on the news the other day that somewhere in China I think it was, they just opened up their 6th McDonalds Drive thru?

Almost 3rd-world relative to U.S.

Keene Little : 1/23/2007 4:14:15 PM

This whole emerging market bullishnes is a result of investors totally ignoring risk as they chase higher and higher returns. They've become an addict looking for another 1%, convinced there are no police around to catch them. They couldn't be more wrong (imho).

Jeff Bailey : 1/23/2007 4:13:16 PM

SUNW ... Consensus was EPS of $0.01/share on Revenue of $3.52 B

Keene Little : 1/23/2007 4:11:58 PM

Reading that post by DJ about emerging markets makes me want to holler from the tallest building "RUN AWAY!!". When we have so many expecting a bullish market, especially in the emerging market, with none expecting an economic slowdown, you can be sure they're wrong. There's practically unanimous opinion about the bullishness for the coming year and we know what happens when everyone lines up on the same side of the boat. I strongly recommend not getting sucked into this hype. A lot of people are going to get hurt.

Jeff Bailey : 1/23/2007 4:12:29 PM

Sun Microsystems (SUNW) $5.66 -1.56% ... surging on headline numbers to $5.96 in extended trade.

Earnings Press Release Link

Jeff Bailey : 1/23/2007 4:03:14 PM

Buy Program Premium ... YM 12,585 : SPY $142.81

Jeff Bailey : 1/23/2007 4:01:32 PM

Emerging Markets Still Offer Upside, Korea Top Pick at Merrill

DJ- The emerging markets bull run is nowhere near over, with still more upside in the coming years, but investors would do well in looking outside larger economies such as Brazil, Russia, India and China, or the BRIC countries, a Merrill Lynch global emerging market investment strategist said Tuesday.

"Non-BRICs are the way to go," said Michael Harnett, Merrill Lynch's chief GEM equity strategist, who was participating on a global economic forum in New York.

South Korean equities are Hartnett top pick, followed by Vietnam and Singapore. Korean shares are cheap, and "domestic demand in Korea will surprise on the upside," he added.

Vietnam is a scarcity play, he said. Singapore is winning the war with Hong Kong in terms of attracting human capital, Hartnett added.

Overall in emerging markets, "we remain pretty bullish, said Hartnett, who forecast 40% to 50% upside for the asset class in the next two to three years. Hartnett also called for upside between 10% and 20% for 2007.

On leading indicator MSCI Barra, emerging markets have posted negative returns this year, but ended 2006 ahead.

So far this year, emerging markets have lost 1%. BRIC countries have fared worse, having lost 1.5% up to Monday. Countries on the black include India (gains of 3.2%), Chile (2.7%) amd Turkey (7.7%).

In terms of sectors, those related to growing domestic demand are the ones in evidence, infrastructure and consumer-related sectors among them, Hartnett said.

Overall for emerging markets lower inflation and lower real rates have encouraged liquidity and risk appetite for the asset class. Commodities have also been a "powerful stimulant" for emerging markets, Hartnett added.

But internally things also changed, he said. Emerging markets were the "teenagers" for the financial world, but "they've basically grown up," running current account surpluses and conquering rampant inflation.

Now emerging markets enjoy "great room for capitalization to grow," he said. There are more mortgages in Manhattan than in all of Russia, he said by way of example.

In general, emerging markets are underleveraged, undercapitalized and under-owned as an asset class, he said.

Risks for emerging markets include a global slowdown, which Hartnett didn't believe it was imminent.

Other experts on the panel also didn't believe an accentuated global contraction was in the cards.

The probability of a recession is "very low," said Nariman Behravesh, chief economist and executive vice president of Global Insight Inc., a financial information company.

Jeff Bailey : 1/23/2007 3:50:33 PM

RUT.X at WEEKLY Pivot ... QQQQ at WEEKLY S1.

Jeff Bailey : 1/23/2007 3:48:06 PM

Irony Strikes: Union Employees Strike Against Union Employers

DJ- Today, the Center for Union Facts notes the irony of three major union organizations in the "Change to Win" coalition being embroiled in labor disputes -- with each other. The Teamsters-organized staff of Canada's United Food and Commercial Workers (UFCW) union went on strike to protest the UFCW's proposed use of a two-tiered system in which new employees receive significantly less in wages and benefits than veteran employees.

Ironically, the UFCW organized a strike against Stater Bros., a Southern California grocery chain, when the store implemented a similar seniority system. At that time, UFCW spokesman Mike Shimpock argued, "The two-tier system has resulted in massive turnover," he said. "The markets can't keep workers. They have to keep training them and they are running out of places to find them." Now, the UFCW argues that the two-tiered system is necessary in order to serve its own members.

This is the second time in a week that a local chapter of a major union faced labor problems as a result of competitive business practices. Teamsters employed at the Service Employees International Union in Ontario are also striking for better protection of seniority in addition to protections against persistent relocation.

"According to the 'Change to Win' coalition, the only organization that should be able to cut back on labor costs is a labor union," said Richard Berman, executive director of the Center for Union Facts. "If it's okay for them, why isn't it okay for businesses that serve even more people? You know what they say about people in glass houses."

Keene Little : 1/23/2007 3:47:07 PM

It looks like we're bull flagging as we near the close.

Jeff Bailey : 1/23/2007 3:46:26 PM

Comerica Boosts Quarterly Dividend To $0.64 from $0.59 ... CMA $59.04 -0.25% ...

Jeff Bailey : 1/23/2007 3:42:18 PM

5-year YIELD ($FVX.X) finished up 3.4 bp at 4.800% ... Right at its flat 200-day SMA.

Jeff Bailey : 1/23/2007 3:30:24 PM

Suuuure doesn't "make sense" that PHF is up here.

Jeff Bailey : 1/23/2007 3:28:39 PM

Russell 2000 (RUT.X) 785.69 +0.99% ... back at correlative 21-day and 50-day SMA.

Once hooked into a "sucker" and bugger emptied the spool of line from my reel.

Jeff Bailey : 1/23/2007 3:23:26 PM

03:00 Internals found at this Link

Jeff Bailey : 1/23/2007 3:09:30 PM

CRB Index ... back above its 10/03/06 relative low close.

Jane Fox : 1/23/2007 3:08:02 PM

NEW YORK (MarketWatch) -- Shares of ethanol producers rallied Tuesday ahead of President Bush's State of the Union speech, in which he's expected to urge for a big increase in the amount of ethanol that refiners mix with gasoline.

The White House said Tuesday that the president will propose a massive switch to renewable fuels such as ethanol and biodiesel in his address this evening.

Bush's plan would cut gasoline consumption by 20% in 10 years, in part by bolstering production of renewable fuels. He will also ask Congress for the authority to set the corporate fuel-economy standard for cars and trucks, aides added.

The ethanol industry received a boost after Bush advocated alternative fuels in his 2006 State of the Union address.

Jeff Bailey : 1/23/2007 3:06:12 PM

PTR $127.79 +3.67% ... tests 38.2% retracement .... 09/11/06 low close to recent 12/28/06 high close.

Jeff Bailey : 1/23/2007 3:02:43 PM

03:00 Market Watch found at this Link

Jane Fox : 1/23/2007 3:01:31 PM

I truly do not think Gold will break the 655 resistance without some king of retracement and that retracement will tell a lot about the underlying strenght of this market. Link

Jeff Bailey : 1/23/2007 2:57:03 PM

DJ- US Earnings: Q4 Results Up 13.4% Vs. 2005, Up 5% Vs. Views

DJ- The earnings of companies in the Standard & Poor's 500 index that have issued fourth-quarter reports are running 13.4% higher than year-earlier results, according to Thomson Financial.

Of the 500 companies, 99, or 20%, had reported earnings for the quarter as of Tuesday. So far, fourth-quarter earnings have come in 5% higher than analysts' expectations.

Compared with a year earlier, earnings of S&P 500 companies are expected to rise 9.2% in the fourth quarter. That figure reflects actual earnings for the companies that already have reported and average estimates for the rest.

For the first quarter, analysts, on average, expect earnings of the S&P 500 companies to rise 6.5% from the year-earlier period.

The following table shows how the 99 companies that have reported performed in the fourth quarter, compared with analysts' average expectations.

Table- Link

Keene Little : 1/23/2007 2:46:23 PM

With the uptrend line from the January low just above ES 1429 I won't become more bearish until that's broken. I had mentioned we could see a very choppy rise higher that's full of whipsaws. This might be one of them.

Jeff Bailey : 1/23/2007 2:45:48 PM

DJ- OIL FUTURES: Nymex Crude Ends At $55; SPR To Be Expanded

Jeff Bailey : 1/23/2007 2:38:22 PM

Russell 2000 (RUT.X) 784.72 +0.86% ... slips back below correlative 21-day SMA and 50-day SMA.

Keene Little : 1/23/2007 2:37:46 PM

NQ is back in negative territory. If NQ drops below yesterday's low watch for the possibility that we'll see bullish divergences against the new low. I'm not sure what's playing out in that one but in order for the DOW, SPX and NYSE to press higher we'll need to see the techs doing better than this. If they keep heading south then it's quite possible the others will follow. But I suspect we'll see rotation into the big caps for a bit yet before they all tip over.

Marc Eckelberry : 1/23/2007 2:35:57 PM

Sucker's rally. Right on cue, VIX 10.20 zone was as a sell signal. COMP 20 DMA and ES weekly pivot. This is starting to fell like a bear market.

Jeff Bailey : 1/23/2007 2:33:19 PM

Amgen (AMGN) $74.51 -1.76% ...

Jeff Bailey : 1/23/2007 2:32:57 PM

BTK.X 772.05 -1.13% ...

Jeff Bailey : 1/23/2007 2:32:14 PM

QQQQ $43.61 -0.18% ... be careful if you went long this morning!

Jeff Bailey : 1/23/2007 2:27:37 PM

OPEC Pres: $55 Oil Is 'Quite Reasonable'

Jeff Bailey : 1/23/2007 2:27:24 PM

OPEC Pres: OPEC Has No Plans To Meet Before Mar 15 Mtg

Jeff Bailey : 1/23/2007 2:27:11 PM

OPEC Pres: Happy With Members' Compliance With Cuts

Jeff Bailey : 1/23/2007 2:27:01 PM

OPEC Pres: Sees Firmer Oil Prices, No Collapse

Marc Eckelberry : 1/23/2007 2:24:33 PM

The winner this year is gold, hardly a break in its stride. If you were buyers back in October, pat yourself and hang on for the ride up to 850 this summer.

Marc Eckelberry : 1/23/2007 2:22:21 PM

Inventories tomorrow.

Jane Fox : 1/23/2007 2:21:22 PM

Jeff I think a long in USO is a very good play.

Jeff Bailey : 1/23/2007 2:21:20 PM

PetroChina (PTR) $127.20 +3.19% ...

Jeff Bailey : 1/23/2007 2:20:11 PM

Bullish swing trade long alert ... for 1/2 position in the US Oil Fund (AMEX:USO) at the offer and session high of $45.45. Stop goes $43.50, target a pop to $49.50.

Jane Fox : 1/23/2007 2:20:01 PM

Putting a fib retracement on the intraday range certainly helps to determine your weakest market today, NQ. Link

Marc Eckelberry : 1/23/2007 2:19:31 PM

The bid in oil above 54 actually had the reverse effect than earlier on ES, sending it down 2 points. With the dollar dropping, another indicator traders are worried about economic resiliency. That Goldman home guilder upgrade seems awfully premature, especially with rates climbing this high..

Marc Eckelberry : 1/23/2007 2:16:48 PM

VIX below 10.15/10.25 is sure proving itself to be a good topping indicator these days.

Keene Little : 1/23/2007 2:15:55 PM

YM has dropped back below its broken downtrend line at 12581, and ES is threatening to do the same. That would suggest we'll see the deeper pullback rather than a sideways/down consolidation this afternoon. But watch the YM 12570 area that was resistance (not much) that could turn to support now.

Jeff Bailey : 1/23/2007 2:15:45 PM

ORACLE, NOVELL FIND DIFFERENT RESPONSES TO LINUX PACTS

DJ- Companies send shock waves through the open source community three months ago with separate deals to improve support for the Linux. Impact of the two agreements appears to be the reverse of what was expected.

ORCL $17.07 +0.41%

NOVL $6.99 +2.64% ...

RHT $21.68 -0.50% ...

Keene Little : 1/23/2007 2:14:15 PM

ES has pulled back to its broken downtrend line from the January high, here at 1435.25.

Jeff Bailey : 1/23/2007 2:12:47 PM

Raytheon (RTN) $52.96 +1.94% ...

Jeff Bailey : 1/23/2007 2:11:56 PM

Lockheed Martin (LMT) $98.18 +1.45% ... That's a new all-time high.

Jeff Bailey : 1/23/2007 2:11:02 PM

US ARMY SEES MORE TROOPS COSTING $70B

DJ- U.S. Army estimates its new plan to expand by 65,000 soldiers will cost about $70 billion between 2009 and 2013, a senior Army officer says. The proposal comes from Defense Secretary Gates.

Jeff Bailey : 1/23/2007 2:09:01 PM

UAL'S 4Q NET LOSS NARROWS

DJ- Carrier posts net loss of $61 million, or 55c a share, as year-earlier period had $16.61 billion in reorganizational charges. Revenue rises lower-than-expected 5% to $4.59 billion. UAL cuts 2007 capacity forecast for United Airlines.

UAUA $45.14 -7.40% ...

Keene Little : 1/23/2007 2:07:38 PM

The pattern of the bounce from yesterday's low suggest we're ready for either a consolidation (sideways/down for the rest of the day) or a slightly deeper pullback before proceeding higher. Looking at the 30-min chart, ES could form a right shoulder of an inverted H&S pattern (so left shoulder) when looking at price action over the past 4 days. Either that or a cup and handle pattern with the handle needing to be formed now.

Jeff Bailey : 1/23/2007 2:04:13 PM

President Bush To Say SPR Should Be Doubled in Size, Filled By 2027

DJ- President George W. Bush will call Tuesday for the U.S. to double the capacity and fill the Strategic Petroleum Reserve by 2027, a senior administration official said.

The official, speaking on condition of anonymity, was briefing reporters ahead of Bush's State of the Union address Tuesday evening.

Doubling the SPR, the country's emergency stockpile of oil, would take its capacity to 1.5 billion barrels. Last year, Congress gave the administration the authority to boost capacity to 1 billion barrels. Bush will ask lawmakers for the authority to add another 500 million gallons of capacity.

Currently, 691 million barrels are in the SPR, an amount that represents 55 days of net oil imports, according to the White House. By contrast, the reserve held around 118 days of net oil imports in 1985.

"The SPR's purpose is to provide the United States with an emergency inventory of oil, an insurance policy in the event of a severe supply disruption, such as from a natural disaster or a terrorist attack in the energy supply chain," the White House said in an outline of the policy initiatives Bush will announce Tuesday. "Doubling the SPR alone will provide approximately 97 days of net oil import protection, enhancing America's ability to respond to potential oil disruptions."

The SPR initiative is one part of a Bush's strategy to reduce U.S. dependence on foreign oil. The president also will detail a proposal to cut gasoline use by 20% over 10 years, a proposal that relies on sharply increasing the availability of alternative fuels and reforming fuel efficiency standards for cars.

The administration official said Bush will touch on his plan to balance the federal budget by 2012, and renew his call for stronger earmark reform. The president, however, will go into more details on fiscal issues when he delivers a "state of the economy" address next week, the official said.

Keene Little : 1/23/2007 2:02:13 PM

It sounds to me like Goldman's analysis of the home builders is less bearish rather than more bullish as reported in the DJ report. Shows how poeple really want to believe everything will be better now. As Goldman said, it'll be the spring season where we find out how housing is really doing. I continue to believe strongly that it will be the uh-oh moment for sellers. That's when people will "get it" and recognize the housing market is in serious trouble. But that's jmho.

Jeff Bailey : 1/23/2007 1:53:53 PM

Home Builders Among Biggest Gainers After Goldman Upgrade

DJ- The nation's home-building sector was one of the top five gainers Tuesday among the 100 industries tracked by the Dow Jones indexes, as the market appeared to react to a Goldman Sachs report upgrading the group.

Goldman issued a report Tuesday upgrading the home-building sector to neutral from cautious.

"Recent housing data suggest the sector's downward trajectory is slowing, although (it is) continuing to decline," the firm said.

While Goldman believes the "worst may be past," it still describes the housing market as "very troubling," and cited the sector's high cancellation rates, home price declines, and land writedowns as reasons for concern.

Goldman is the latest bank to take a more bullish stance toward the home-building sector.

JP Morgan analyst Michael Rehaut was the first to change his sentiment, upgrading the group to positive from cautious in October. At the time, he had noticed inventories in a few markets - such as Washington, San Diego and Sacramento - starting to decline. He viewed this as a positive sign that offered light at the end of the tunnel.

In November, Banc of America analyst Daniel Oppenheim, one of the biggest bears on the Street, upgraded the group to neutral from negative. And in December, Citigroup analyst Stephen Kim raised his price targets on home-building stocks across the board on the belief the sector may have bottomed.

In another report issued by Citigroup Monday, Kim said "a growing body of evidence suggests housing demand bottomed in late 2006 - an encouraging development as we await the spring selling season."

The Goldman report Tuesday was more tepid. Although it upgraded the group, it still cautioned investors about the sector's "troubling" fundamentals. It said it will be watching the spring season carefully for more definitive signs on which way the housing sector is heading.

"With the next meaningful data to come from the spring selling season at least six to eight weeks away, we are upgrading the home-building sector to neutral until we gain further conviction on the magnitude and direction of the next leg of the current housing downturn," Goldman said.

Goldman upgraded D.R. Horton Inc. (DHI), M.D.C. Holdings Inc. (MDC), and Toll Brothers Inc. (TOL) to buy from neutral, and raised its rating on Ryland Group Inc. (RYL) to neutral from sell.

The firm downgraded Lennar Corp. (LEN) and M/I Homes Inc. (MHO) to sell from neutral, and cut Hovnanian Enterprises Inc. (HOV) and Meritage Homes Corp. (MTH) to neutral from buy.

Most, but not all, of the home builders were trading up Tuesday. D.R. Horton was recently up 7.5%, Hovnanian Enterprises was up 5.4%, Standard Pacific Corp. (SPF) up 7%, Orleans Homebuilders Inc. (OHB) up 6.3%, Toll Brothers up 6%, Ryland Group Inc. (RYL) up 4.5%, and M.D.C. up 4.6%.

Two builders, Lennar and M/I Homes, were down recently. Lennar's shares were down 0.2% while M/I Homes' shares were off 0.6%.

Jeff Bailey : 1/23/2007 1:50:51 PM

Evergreen Solar (ESLR) $8.04 +6.06% ...

Jeff Bailey : 1/23/2007 1:47:38 PM

President Bush To Call For US To Cut Gasoline Use By 20% By 2017

DJ- President George W. Bush will call Tuesday for the U.S. to reduce its usage of gasoline by 20% in the next 10 years, a senior White House official said.

Joel Kaplan, the White House's Deputy Chief of Staff for Policy, said the target can be reached through two initiatives: boosting the supply of renewable and alternative fuels and reforming fuel efficiency standards for cars.

Kaplan was describing an energy agenda that Bush will unveil in his State of the Union address Tuesday evening.

"There's no question it's an ambitious goal but we think it's an achievable goal," Kaplan told a small group of reporters.

Specifically, the White House will call for an increase in the size and scope of the current renewable fuel standard, or RFS, to require 35 billion gallons of renewable and alternative fuels in 2017. That's nearly five times the current target for 2012, and an amount the White House says will replace 15% of projected yearly gasoline use.

To achieve the president's goal of cutting gasoline usage by 20% over 10 years, which it calls its "20-in-10" initiative, Bush will ask for the authority to reform Corporate Average Fuel Economy, or CAFE, standards for cars and extend a current rule for light trucks and SUVs. Moving to a so-called attribute-based system is projected to reduce annual gasoline use by up to 8.5 billion gallons, or 5%.

Jeff Bailey : 1/23/2007 1:43:22 PM

S&P Report Says US Oil And Gas Outlook Shaky

DJ- Standard & Poor's Ratings Services deems that a softening in U.S. oil and gas prices, spurred by weakening rating fundamentals, could challenge the sector's credit trends in 2007, according to a report published today titled "Weak Rating Fundamentals Spark A Dimmer Outlook For U.S. Oil And Gas."

"Factors that we expect to influence crude oil and natural gas prices include weather patterns that affect demand--particularly with near-record levels of natural gas storage--good prospects for global economic growth, and resource nationalism and geopolitical developments that are generally the catalysts for heightened price volatility," said Standard & Poor's credit analyst Andrew Watt.

"Other concerns for ratings include M&A activity, rising capital spending in a weaker price environment, and reserve replacement," Mr. Watt continued.

The report says that if the current low prices persist, the exploration and production segment's profit margins will narrow and credit measures will deteriorate, especially among largely unhedged companies. Standard & Poor's adds that the recent commodity price volatility could slow the brisk growth in the oilfield services segment's product service pricing and additional cash flow.

However, the report says that the near-term outlook for the refining segment will remain favorable as long as the U.S. economy stays healthy, because demand for refined products generally depends more on economic activity than on weather.

Jeff Bailey : 1/23/2007 1:40:52 PM

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

Keene Little : 1/23/2007 1:37:52 PM

Good point Marc. I like the visual pivots on QT's charts (and they're free vs. having to upgrade QCharts to get that feature).

Marc Eckelberry : 1/23/2007 1:34:43 PM

You can also go to barcharts.com and look at projections for each symbol.

Marc Eckelberry : 1/23/2007 1:33:46 PM

Just use the daily candle on Qchart. You can also use IB with quote tracker and add pivots to the indicators. It is very accurate.

Keene Little : 1/23/2007 1:30:44 PM

I would like to know how to calculate the pivots for the miniQM. Do most traders use NY "open outcry" open and close or the electronic session and which formula is typically used by the lg institutions for pivots. I would love to get an excel spread sheet formula if someone could direct me where.

Richard, I'm not sure how the large institutions are calculating this but certainly the traders in the pits would likely be using the open outcry hours. Looking at the regular hours for QM electronic trading you can see it opens at 10:00 AM and closes at 2:30 PM. Those are the open and closing prices I'd use for the pivot calculations.

These are the formulas to calculate pivot points:
R2 = P + (H - L) = P + (R1 - S1)
R1 = (P x 2) - L)
P = (H + L + C) / 3)
S1 = (P x 2) - H)
S2 = P - (H - L) = P - (R1 - S1))
where H, L and C are the high, low and closing prices for the day.

I've got a nice spreadsheet set up for input of daily, weekly and monthly pivots for several contracts (which I use to post the pivot tables each day) which then prints out the pivot values in the format and price multiples we need for trading. Send me an email at keene@angels20.com and I'll be happy to send you a copy of the spreadsheet.

Jeff Bailey : 1/23/2007 1:25:06 PM

01:05 Internals found at this Link

Marc Eckelberry : 1/23/2007 1:18:21 PM

Ten year yield at 4.8%.

Marc Eckelberry : 1/23/2007 1:16:55 PM

Careful here with ES. QM is losing support.

Jeff Bailey : 1/23/2007 1:07:52 PM

01:05 Market Watch at this Link

Marc Eckelberry : 1/23/2007 1:06:08 PM

This low volatility rewards buy and hold. It is just the pits for intraday traders seeking high returns on two way moves.

Keene Little : 1/23/2007 1:05:19 PM

With ES and YM having broken their downtrend lines from their January highs that tells us the pullback is finished. Now look for those lines to act as support if they're retested (YM 12583 and ES 1435.50. YM has punched right through its wall of resistance around the 12570 area.

Jane Fox : 1/23/2007 1:02:44 PM

Don't 'cha just love the VIX. Link

Jeff Bailey : 1/23/2007 1:02:17 PM

Pacholder High Yield (PHF) $10.10 +1.10% ... on fire!

Jeff Bailey : 1/23/2007 1:01:45 PM

QQQQ $43.92 +0.52% ... 21-day and 50-day SMA right here at $43.95

Jeff Bailey : 1/23/2007 1:00:56 PM

Russell 2000 Index (RUT.X) 787.90 +1.27% ... bold move through correlative 21-day and 50-day SMA.

Jeff Bailey : 1/23/2007 12:57:39 PM

Dividend's on the Rise; Rio Latest Example

DJ- Companhia Vale do Rio Doce (RIO, $32.41, $1.79, 5.84%) said its senior management has approved a plan for a dividend payment of $1.65 billion to shareholders in 2007. The company is submitting the proposal to its board.

Jeff Bailey : 1/23/2007 12:54:17 PM

Bulls Sit Down For a Bite At Brinkers

DJ- Brinker International (EAT, $31.14, $0.59, 1.93%) reported fiscal second-quarter earnings of $44.2 million, or 35 cents a share, up from a year-ago profit of $42.9 million, or 33 cents a share. On a continuing operations basis and excluding a restructuring charge of $6.7 million, the Dallas-based restaurant operator earned $50.9 million, or 40 cents a share, in the latest quarter. Revenue rose to $1.07 billion in the latest three months to $1.01 billion in the same period a year earlier. The company, which operates Chili's and Macaroni Grill restaurants among others, attributed the sales increase in the latest quarter to growth in restaurant capacity, which offset a decrease of 2.1% in same-store sales. The average estimate of analysts polled by Thomson First Call was for a profit of 39 cents a share in the December period.

Jeff Bailey : 1/23/2007 12:52:03 PM

VIX plunges from MONTHLY 61.8% ... it will go WEEKLY S1.

Jane Fox : 1/23/2007 12:50:07 PM

TICKs +1000

Jeff Bailey : 1/23/2007 12:45:04 PM

Staples (SPLS) $26.54 +0.26% ...

Marc Eckelberry : 1/23/2007 12:44:59 PM

The 5 dma is the momentum moving average. Watch it carefully with ES today.

Jeff Bailey : 1/23/2007 12:44:42 PM

Office Max (OMX) $50.50 +0.27% ...

Jeff Bailey : 1/23/2007 12:44:19 PM

Office Depot (ODP) $38.84 (Unch) ...

Jeff Bailey : 1/23/2007 12:43:49 PM

3M (MMM) $78.76 +0.34% ...

Jeff Bailey : 1/23/2007 12:43:12 PM

Avery Dennison Surges To Multi-Year Highs as Profits Swell

Avery Dennison (AVY, $70.95, $2.48, 3.60%) swung to a fourth-quarter profit of $101.5 million, or $1.01 a share, from a year-earlier loss of $6.9 million, or 7 cents a share. Excluding items in both periods, the company said adjusted fourth-quarter earnings swelled to $1.06 a share from 92 cents a share a year earlier. The Pasadena, Calif., office-products company said sales rose 3.5% to $1.41 billion from $1.36 billion in the year-ago period. Analysts polled by Thomson Financial expected, on average, fourth-quarter earnings of $1 a share on sales of $1.4 billion. The company also expects 2007 earnings of $3.90 to $4.30 a share, including items.

Jane Fox : 1/23/2007 12:38:42 PM

Let me rephrase that last statement. Those two boxes are telling me the highest probablility trade is long.

Jane Fox : 1/23/2007 12:37:50 PM

Those two boxes are telling me higher highs are in our future. Link

Marc Eckelberry : 1/23/2007 12:37:15 PM

They might be gunning for ES 1437/1438, weekly pivot and daily R1. But first, they need to hold 1434.75, 5 DMA.

Jeff Bailey : 1/23/2007 12:36:44 PM

AK Steel Gains; Q4 Loss Widens

DJ- AK Steel (AKS, $18.28, $1.51, 9.00%) said its fourth-quarter loss widened to $49.3 million, or 45 cents a share, from $41.5 million, or 38 cents a share, a year earlier due in part to a post-retirement benefit charge and a decline in shipments. Excluding the $133.2 million post-retirement corridor charge and the impact of asset impairments and curtailment charges in 2005 and 2006, the Middletown, Ohio, steelmaker said it would have earned $51.3 million in the quarter, down from $83.5 million a year earlier. Quarterly net sales rose to $1.58 billion from $1.38 billion a year earlier. Analysts polled by Thomson Financial expected the company to have revenue of $1.47 billion. AK Steel said it shipped 1.52 million tons in the fourth quarter, down from 1.6 million tons in the year-ago period. In the first quarter, AK Steel said it expects shipments to remain flat from the fourth quarter. The company forecast operating profit of about $60-$65 per ton of steel shipped.

Jane Fox : 1/23/2007 12:36:08 PM

These charts really surprised me. Only ER has broken its PDH so far. Link

Marc Eckelberry : 1/23/2007 12:36:21 PM

Now the VIX makes a new low. The past few weeks, VIX below 10.50 has meant sell the market. Back to sub 10 reads? I doubt it.

Jane Fox : 1/23/2007 12:34:44 PM

This is get long and stay long kind of day and I don't think it will change. If, however, it does then I will let you know.

Marc Eckelberry : 1/23/2007 12:31:35 PM

Oil bids and ES gets a gets a new high.

Jeff Bailey : 1/23/2007 12:29:43 PM

YM 12,571 gets the trade at WEEKLY S1.

Jane Fox : 1/23/2007 12:29:26 PM

Markets are taking dip but internals are telling me it will not last and will be an opportunity to get long.

Marc Eckelberry : 1/23/2007 12:29:18 PM

Tough call here, it could explode to the upside, or fail. But the VIX refuses to drop to new lows even as ES is pressing against the highs. The TRIN is still bearish at 1. If we do make a new high, 1435.50 and 1437 are big walls.

Keene Little : 1/23/2007 12:24:18 PM

I thought I saw bear flags building at yesterday's lows also. However, it looks to me like there is a bull flag developing on the daily charts or at least the SPX and OEX. I did a projection on both and they both show potential targets that correspond to targets we have been expecting through other measurements. SPX 1450 and OEX 674 aprox. With the State of the Union Address I don't think the powers that be will let the bear flags prevail. JMHO. Interesting, if this plays out as such it almost seems too easy. As always your opinion would be appreciated.

Thanks for your observations Scott. I agree with you that the setup almost seems too easy (if we get the new high) and that always makes me nervous. I've lost count how many easy short-play setups have busted in the past few months. But the setup is there and now I'm just waiting to see if it completes. If it's a slow choppy grinding mess it could be the end of this week or the end of the month before we get the final high.

The final new high at the end of the month would fit the MER signal that I posted last week--the observation that in April MER topped out (right after earnings) about 2 weeks before the broader market. MER may be once again our canary here even if the broader market takes 2 weeks to notice it fell off its perch.

Jeff Bailey : 1/23/2007 12:18:13 PM

Euro Becomes A Going Concern

DJ- The technical concern over the euro now would have to be the assumed misgivings of the euro bears who are seeing new long-term uptrend highs against the yen as well as firmness against the dollar.

The euro has recorded a new high for its over-six-year uptrend against the yen, Y158.40 as of this writing. It's nearing the Y158.48-Y159.27 resistance band on the monthly chart. A move above resistance, which is likely given that long-term charts suggest Y165.00-area targets, would be going for Y160.05 initially. The nearest stop for trades based on the monthly chart is Y157.69.

Similarly, the euro has moved into the $1.3000-$1.3060 resistance band. A decisive breakout above $1.3060 would give it a shot at $1.3153, which may be an important intraday high.

Traders with a longer view of the market should be aware that a move above $1.3050 would establish an uptrend on the weekly chart. In that case the euro would be targeting $1.3281, perhaps after a pullback from $1.3153.

USD/JPY Finds Technical Range

The dollar's move up to initial target resistance at Y122.77 has been interrupted by a pullback into the 121.72-121.18 technical band. A renewed uptrend is likely. But decisive trading below Y121.18 would be the signal for a dip to Y120.06, a move that would compromise said uptrend.

Yield Bears Have A Care

The U.S. 10-year yield is technically strong above 4.723%-4.707% monthly support. I mention, as a caution to traders who are counting on lower yields, that the monthly chart holds out the serious prospect of an eventual move as high as 5.005%, or perhaps to 5.743%, no less.

Obviously, that tidbit is well ahead of the current game. For now it's enough to know that a long-term uptrend wouldn't have been established until 4.803%-4.834% resistance is taken out, although there's a potential top at 4.910%-4.968% resistance.

Keene Little : 1/23/2007 12:14:34 PM

Weekly S1 for YM is at 12568, the previous low on Friday at 12576 and the 30-min 100 and 130-pma's are 12569-12571. It could be a tough level for YM to break through.

Keene Little : 1/23/2007 12:04:58 PM

YM is pressing against the top of what could certainly still be considered a bear flag, here at 12565. Link

Keene Little : 1/23/2007 12:02:49 PM

Jane, are you getting your ER2 quotes now? I just checked and mine are OK.

Marc Eckelberry : 1/23/2007 11:51:14 AM

It always amazes me to see how many chances a market gives you to take on a good short. All these rallies are ultimately selling opportunities with rates knocking on 4.8% once again and tech guidance down. Now financials are feeling the heat. How many more red flags can we get?

Jane Fox : 1/23/2007 11:42:48 AM

Is anyone else not getting updated quotes from IB for ER2?

Keene Little : 1/23/2007 11:39:35 AM

ES could find resistance just shy of 1436 based on a Fib projection for the move up from yesterday's low (2nd leg up = 162% of the 1st) and that's also where the downtrend line from January's high is located. Good spot for taking some profits and scalping a short. I don't expect the pullback to be much but I'm also aware of the distinct possibility we're going to see some whippy price action in this leg up.

Jeff Bailey : 1/23/2007 11:38:52 AM

Economic Indicators Index Rises in December

AP Story Link

Keene Little : 1/23/2007 11:29:44 AM

This daily chart of the DOW shows the bigger picture to go along with the 120-min chart I posted below (11:47 PM). The ascending wedge that price is in since November is a very typical ending pattern for 5th waves and that's how I've got the rally from July labeled. One more push higher will finish this wave count and set us up for at least a much bigger correction, certainly something larger than anything we've seen since July. Link

More bearishly and potentially very significant, the way I've got the larger (weekly) wave pattern counted, the rally leg from July also finishes the 2002-2007 bull market rally. Once we make a new high (assuming we will) it will be the last time the market sees those highs in many years. While the spring time will likely set up a good buying opportunity it would be the tradeable kind that then sets up an outstanding shorting opportunity (wave-3 down) into the fall.

I'll soon be ready to give up berries and grubs and take a bite out of bull.

Marc Eckelberry : 1/23/2007 11:21:21 AM

Bulls are cautiously back. Watch ES 1434.75, 5 DMA. If that fails, this would have been a minor short covering rally. COMP now needs to hold 2437 on a 10 mn candle.

Jeff Bailey : 1/23/2007 11:21:01 AM

11:00 Internals found at this Link

Jane Fox : 1/23/2007 11:20:46 AM

Hopefully ya'll got long this morning.

Keene Little : 1/23/2007 11:19:56 AM

Steady buying here and ES has popped out the top of its bear flag. That's normally a very bullish sign as it traps the bears who were looking for another leg down.

Marc Eckelberry : 1/23/2007 11:03:34 AM

NO one is placing any big bets in techs until MSFT on Thursday, it seems.

Jeff Bailey : 1/23/2007 11:02:53 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 1/23/2007 11:01:33 AM

ES 60 mn sure looks like a series of bear flags, normally trap rallies. Negated above 1437.

Jeff Bailey : 1/23/2007 10:59:47 AM

ALCATEL-LUCENT FALLS ON 4Q WARNING

DJ- Shares drop 8% after telecommunications equipment maker warns full-year 2006 revenue will come in at a similar level to 2005, citing spending shifts among North American customers and heightened wireless competition.

Jeff Bailey : 1/23/2007 10:58:17 AM

Nortel (NT) $26.25 -2.52% ...

Jeff Bailey : 1/23/2007 10:57:57 AM

Alcatel-Lucent (ALU) $12.98 -8.52% ...

Jeff Bailey : 1/23/2007 10:57:28 AM

TELLABS NET DOWN ON ORDER DELAYS

DJ- Telecom-networking firm has 4Q net income of $29 million, or 7c a share, as several large customers postpone orders. Revenue falls 13% to $455 million and warns on 1Q sales.

TLAB $9.92 -0.99% ...

Jeff Bailey : 1/23/2007 10:55:22 AM

US RETAIL SALES CLIMB 1.6%

DJ- U.S. chain store sales increase 1.6% in the first three weeks of January compared with the previous month, in line with expectations, Redbook Research says. ICSC-UBS sales index edges up 0.1% in week ended Jan. 20.

Jeff Bailey : 1/23/2007 10:54:50 AM

BUILDING MATERIALS BOOSTS ELKCORP BID

DJ- Building Materials Corp. of America once again raises its bid for ElkCorp, now offering $43.50 a share. The bid, above previously revised bid of $42, exceeds revised $42-a-share offer ElkCorp has agreed to from Carlyle Group.

ELK $43.99 +0.87% ...

Jeff Bailey : 1/23/2007 10:53:34 AM

COACH 2Q NET CLIMBS 31% ON HOLIDAY SALES

DJ- Handbag maker earns $227.5 million, or 61c a share. Sales jump 29% to $836.4 million. Results beat Wall Street's EPS estimate of 58c on sales of $798 million. U.S. same-store sales rise 26%.

COH $43.05 -2.11% ...

Jeff Bailey : 1/23/2007 10:51:55 AM

EMC 4Q NET NEARLY TRIPLES

DJ- Data-storage firm posts net income of $389 million, or 18c a share. Excluding items, earnings of 17c top estimates by a penny. Revenue climbs 19% to $3.21 billion. Firm sees "robust" 2007 IT spending.

EMC $13.47 (unch) ...

Marc Eckelberry : 1/23/2007 10:51:15 AM

Watch QM 53.425, key support for oil.

Marc Eckelberry : 1/23/2007 10:48:29 AM

Are there enough shorts to make for a good squeeze? I wonder. In techs, yes, thanks to Cramer. But in ES? I think there are still many hopefuls.

Marc Eckelberry : 1/23/2007 10:49:01 AM

Today is the battle between ES 1429.75 (20 dma) and 1432.50 (10 dma). Tight range. Bulls are buying the 20 and bears are selling the 10. Because financials are down, my guess is ES will test 1422.75, especially if oil tops out here. Then of course we have the dull market syndrome, which normally favors rallies. If we drop from here, the sell stops will be pretty impressive. Note that the COMP could not get back above its 50 DMA at 2437. That is my line in the sand: short below, long above.

Jeff Bailey : 1/23/2007 10:46:41 AM

StreetTracks Gold (GLD) $64.05 +2.10% ... set to test early December highs.

Jeff Bailey : 1/23/2007 10:45:30 AM

Blair Corp. To Be Acquired For $42.50/Share

DJ- Blair Corp. (BL) said Tuesday it has agreed to be acquired by Appleseed's Topco Inc., a portfolio company of Golden Gate Capital, for $42.50 a share, a 15% premium to the company's closing share price on Monday of $36.95.

The deal, which is expected to close in the spring, is valued at $173.6 million.

Under the terms of the merger, Warren, Pa.-based Blair, a marketer of women's and men's apparel and home products, may solicit additional proposals for 30 days, and the company said its board plans to do so.

Shares of Blair Corp., which were halted prior to the announcement, were unchanged at $36.95.

Marc Eckelberry : 1/23/2007 10:44:23 AM

I wonder if that VIX bad tick was an ominous sign.In fact, it held on long enough up there to scare quiet a few traders.

Jane Fox : 1/23/2007 10:40:21 AM

I have deleted the +800 alert because it was driving me to drink.

Jane Fox : 1/23/2007 10:38:33 AM

And there go the TICKS again +1000

Jane Fox : 1/23/2007 10:35:34 AM

AD volume is making new daily highs supporting the idea we will see new daily highs in the markets.

Jane Fox : 1/23/2007 10:34:42 AM

I use the VIX and ES charts a great deal throughout the day and I am now trying to get a timeframe that will take out the bad ticks so I can get a "reading." So far I see the VIX as neutral.

Jeff Bailey : 1/23/2007 10:34:50 AM

Pulte Homes Jumps; Slashes Profit Outlook

Preliminary Earnings Press Release Link

PHM $34.53 +2.64%

Keene Little : 1/23/2007 10:31:46 AM

I've talked about my expectation for an A-B-C move up from the January low. The pullback from the January high should be wave-B and as such they're ugly trading environments. I often mention that 4th wave corrections are one of the ugliest times to trade the market because of the choppy whipsaw price action. The same is true for b-waves.

This could easily drop to a minor new low for the pullback and not mean anything more bearish about the move. That's why the January low is the important level for bulls to hold. Until that level is broken the current pullback should lead to another rally to a new high.

Jeff Bailey : 1/23/2007 10:30:47 AM

D.R Horton Surges as Earnings Slide

Earnings Press Release Link

DHI $28.73 +5.89%

Jane Fox : 1/23/2007 10:29:26 AM

Price is consolidating at daily highs and the internals remain bullish so my guess is new daily highs.

Jeff Bailey : 1/23/2007 10:26:34 AM

Dow 30 Components (Price Weighted Index) found at this Link ... JNJ, UTX and DD reported prior to opening bell.

Jeff Bailey : 1/23/2007 10:23:43 AM

DUPONT 4Q NET SOARS ON GAINS, STORM RECOVERY

DJ- Shares fall 2% as net income surges to $871 million, or 94c a share, on one-time gains and rebound from year-earlier hurricane disruptions. Sales increase 8% to $6.28 billion. Excluding items, EPS of 45c is in line with estimates.

DD $49.10 -1.99%

Jane Fox : 1/23/2007 10:20:29 AM

I agree Keene, even with all the TICK reading at +1000 it just doesn't "feel" like the bullish days of the last few months. Oh heck that is just the permabear coming out in me. And no sooner said than I get another +1000 TICKS

Keene Little : 1/23/2007 10:20:06 AM

If a gun was held to my head and I was told to trade or else, I'd be long based on my expectations for another run higher. My stop would be below yesterday's low and that's definitely wider than I like to play. But if my life depended on it, hey, it's only money (wink).

Keene Little : 1/23/2007 10:18:10 AM

It's a tough spot here. Price action does not look bullish, especially with what looks like a bear flag and evidence of distribution going on. But the internals look bullish and the buying spikes are enough to keep many sellers on the sidelines. I don't see a good setup here and flat is a good position.

Jeff Bailey : 1/23/2007 10:15:57 AM

UNITED TECHNOLOGIES 4Q NET JUMPS 38%

DJ- Firm posts net income of $865 million, or 87c a share, which includes a 2c gain. Wall Street expected earnings of 85c a share. Revenue rises 13% to $12.79 billion. Conglomerate reaffirms 2007 earnings outlook.

UTX $65.96 +2.90% Link ...

Jeff Bailey : 1/23/2007 10:11:10 AM

ACQUISITIONS DRIVE BANK OF AMERICA, WACHOVIA

DJ- Bank of America's 4Q net jumps 47%, to $5.26 billion, or $1.16 a share, while Wachovia posts a 35% earnings increase to $2.3 billion, or $1.20 a share, as the banks offset a tough interest-rate environment with revenue from acquisitions. Bank of America's revenue climbs 34% to $18.46 billion, while Wachovia's revenue rises 31%.

BAC $53.00 -1.21% Link

WB $56.34 +0.07% Link ...

Keene Little : 1/23/2007 10:06:50 AM

At this point it's looking like more distribution is going on--rally spikes are being sold into.

Jeff Bailey : 1/23/2007 10:03:51 AM

10:00 Market Watch at this Link

Jane Fox : 1/23/2007 10:02:42 AM

Another +1000 TICKS

Jane Fox : 1/23/2007 10:02:31 AM

Here is how the markets are trading in relation to their overnight ranges. Link

Jeff Bailey : 1/23/2007 10:00:23 AM

Miners strong out of the gate ... ABX +1.97%, NEM +2.02%, KGC +1.85%, CDE +2.79%, SIL +3.41%

Keene Little : 1/23/2007 9:59:58 AM

The other thing that keeps me cautious about the short side is the amount of money the Fed is creating right now (I posted the chart early Monday). It didn't do much for the market last week but this week could be different. If the market is unable to rally again this week and the chart shows another big jump in calculated M3 then we'll have some clues that something is changing. For now be aware that there's some big money out there. Getting a spike up as I type so we'll see if it gets some follow through.

Jeff Bailey : 1/23/2007 9:56:06 AM

Petrobras 2006 Brazil Oil Output Averaged 1.778 Million B/D

PBR $95.83 +1.53% Link ...

Jane Fox : 1/23/2007 9:55:45 AM

Those bad ticks on the VIX chart are going to render my VIX chart almost useless.

Jane Fox : 1/23/2007 9:53:31 AM

These are quite bullish this morning. I would not be short. Link

Jeff Bailey : 1/23/2007 9:53:22 AM

Google (GOOG) $484.32 +0.72% Link ...

Jane Fox : 1/23/2007 9:52:19 AM

Bulls are back in town.

Jane Fox : 1/23/2007 9:52:06 AM

TICKS +1000

Jeff Bailey : 1/23/2007 9:53:02 AM

MIVA, Inc. (MIVA) $4.17 +3.21% Link ... see 01/03/07 MM.

Jane Fox : 1/23/2007 9:50:55 AM

I am lost without the VIX this morning.

Jane Fox : 1/23/2007 9:50:31 AM

TICKS +800

Jeff Bailey : 1/23/2007 9:50:17 AM

Some "bad ticks" at the open for the VIX.X to 26.62 in U.S. Market Watch. 10.91 +1.29% looks more reasonable for flat SPY $142.24 trade.

Jeff Bailey : 1/23/2007 9:47:22 AM

Burlington Norther Santa Fe: Expect Flat Q1 EPS

DJ- Burlington Northern Santa Fe Corp. (BNI) expects to have flat earnings-per-share growth in the current quarter, Chief Executive Matthew K. Rose said Tuesday.

The Fort Worth, Texas, railroad operator earned $410 million, or $1.09 a share, in the first quarter of last year. Analysts polled by Thomson First Call expect, on average, for Burlington Northern Santa Fe to earn $1.20 a share in the current quarter.

Speaking during the company's conference call to discuss fourth-quarter results, Rose said fuel prices will be a "headwind" of about $60 million, or about 10 cents a share, during the current quarter.

Burlington Northern expects revenue freight growth of 5% to 6% in the current quarter, Rose said. Warmer weather the first few weeks of the years in parts of the country has affected demand for coal, but the company remains optimistic that coal demand will be solid for the quarter as a whole, he said.

For the full year, Rose said Burlington Northern Santa Fe expects freight revenue growth of 7% to 8% and earnings-per-share growth in the low teens.

BNI $76.42 -0.92% Link ...

Keene Little : 1/23/2007 9:42:13 AM

Price action since yesterday's lows sure looks like bear flags. This of course suggests we'll see price resolve to the downside and that's the way I'd play it if it breaks down. Just be careful of the head fake bear trap. I'm not convinced yet that those are bear flags.

Jeff Bailey : 1/23/2007 9:40:38 AM

Johnson & Johnson (JNJ) $66.77 -0.61% ... Earnings Press Release Link

Consensus was for EPS of $0.79 on Revenue of $13.68 B.

Jane Fox : 1/23/2007 9:36:22 AM

My VIX is not working again today.

Jane Fox : 1/23/2007 9:35:49 AM

AD line is bullish +428 and AD volume above 0 and climbing. The bulls have the ball but they do not have field advantage.

Jeff Bailey : 1/23/2007 9:30:06 AM

US Dollar Index (DXY) 84.56 slips below WEEKLY S1 (84.61). Did tap MONTHLY R1 (84.50)

Jane Fox : 1/23/2007 9:24:02 AM

Here is a daily chart of Gold and although it has been looking quite strong lately I'm not sure it will be able to break resistance at 655. It will probably retrace back to support at 615 and if that support holds then I may be a buyer but right now I am not. Link

Jane Fox : 1/23/2007 9:18:58 AM

NEW YORK (MarketWatch) -- Gold futures rose to their highest level since Jan. 3 in early trade Tuesday, boosted by weakness in the dollar and strong oil prices.

Gold for February delivery was last trading up $9.20 at $643.30 an ounce on the New York Mercantile Exchange, gaining as the dollar dropped against major currencies.

The British pound rallied to a new 14-year high against the dollar, with traders flocking to the U.K. currency amid expectations that this month's surprise rate hike may be followed by another upward move.

The dollar also touched a two-week low versus the euro, ahead of the release of the Conference Board's leading indicators for December.

A rise in crude oil and natural gas prices on Tuesday further strengthened gold. Persistent cold weather conditions across much of the United States sent crude-oil futures higher early Tuesday and lifted natural gas to its highest level in a month.

"Oil prices are still proving influential to gold, although the upside appears to be the course of least resistance, with gold still on target to test the $642-48 resistance area," said James Moore, an analyst at London-based TheBullionDesk.com, in a note.

Jane Fox : 1/23/2007 9:16:26 AM

IF ES closes below its 50EMA I would certainly like YM to do the same. Link

Jane Fox : 1/23/2007 9:15:26 AM

I don't think ES will close below its 50EMA (currently at 1419) today but I think I will eventually at which time I will be buying puts or one of the Profunds that trade inverse to the S&P. I better take a look at them today. Link

Keene Little : 1/23/2007 9:14:47 AM

Since Europe opened our equity futures did a slow bleed into the early morning hours and have since tried to recover. As Jane mentioned, it will be important to watch price action around yesterday's lows.

Jane Fox : 1/23/2007 9:12:01 AM

My goodness the $ took a drubbing overnight that translated into some pretty nice gains for gold. I will look at the gold chart later today. I do not have a position in gold based on the weekly charts of Oil, US $ and the Swiss franc. Link

Jane Fox : 1/23/2007 9:09:04 AM

Yesterday's late day "rally" was not able to retrace much past 38.20% and the lower lows overnight are setting them up for more downside intraday. There will be support at the PDLs but I think this support will eventually break. Link

Jane Fox : 1/23/2007 9:03:07 AM

Dateline WSJ - WASHINGTON -- President Bush tonight gets another shot at persuading Americans to support his Iraq war strategy and domestic agenda. His problem: Much of the public has stopped listening to him.

A new Wall Street Journal/NBC News poll on the eve of Mr. Bush's State of the Union address underscores the extent to which he has lost the nation's ear. Just 22% of Americans say they want the president to set policy for the country, 27% express confidence in his goals, and 28% approve his handling of the Iraq war.

Only one third of Americans rate Mr. Bush highly for being "honest and straightforward." That is down from half at the start of his second term two years ago. Two-thirds say his performance in office is unlikely to get better in his last two years as president.

"What he faces is an extremely skeptical audience," says Democratic pollster Peter Hart, who helps conduct the Journal/NBC poll. The findings, adds his Republican counterpart Bill McInturff, suggest "little capacity for movement on his major policy initiatives, especially Iraq."

Mr. Bush hopes to overcome that skepticism with a series of eye-catching ideas on domestic policy, particularly on health care and energy. His health-care plan -- outlined over the weekend -- focuses on overhauling the tax code to make health insurance more accessible to people not covered through employers. His energy plan likely will feature a big proposed increase in the use of alternative fuels like ethanol and a revamping of fuel-efficiency standards for passenger cars, as well as greater acknowledgment of the problem of global warming.

Jane Fox : 1/23/2007 8:59:23 AM

LOS ANGELES (MarketWatch) -- "Babel," "The Departed," "The Queen," "Letters from Iwo Jima" and "Little Miss Sunshine" were the five films nominated as best picture by the Academy of Motion Picture Arts and Sciences for the 79th annual Oscar awards, to be held Feb. 25. Four of the five films' directors also were nominated. Among the best director nominees was "United 93's" Paul Greengrass. Best actor nominees included Leonardo DiCaprio, Ryan Gosling, Peter O'Toole, Will Smith and Forest Whitaker. Best actress nominees were Penelope Cruz, Judi Dench, Helen Mirren, Meryl Streep and Kate Winslet.

Jane Fox : 1/23/2007 8:57:47 AM

NEW YORK (MarketWatch) -- Continued cold weather conditions across much of the U.S. and forecasts they will persist for at least another week sent crude-oil futures higher early Tuesday and lifted natural gas to its highest level in a month.

Crude for March delivery was up 80 cents at $53.38 a barrel in electronic trade on its first day as the front-month contract. The Feb. contract expired Monday in a volatile session that saw it trade above $53 a barrel before closing below $52.

Natural gas was up 25.6 cents at $7.575 per million British thermal units. That contract also traded in choppy fashion Monday, although it closed with a 6.3% gain at its highest level since Dec. 15 amid expectations for more winter weather.

Bitterly cold air and biting winds will make Friday the coldest day of this winter across the Northeast, according to forecaster Accuweather. Temperatures will be seasonably cold until a cold front sweeps in on Wednesday, bringing colder air that will blanket the Northeast on Thursday, it said

Jane Fox : 1/23/2007 8:55:05 AM

Dateline MarketWatch - Morgan Stanley lowered its equity weighting to neutral from positive, and recommended moving the money to further overweight position cash. The bond weighting remains underweight.

"Many of the factors that turned us more bullish on equities this summer are no longer in place," said Henry McVey, chief U.S. investment strategist at Morgan Stanley.

Jane Fox : 1/23/2007 8:52:21 AM

BOSTON (MarketWatch) -- D.R. Horton Inc., the nation's largest home builder, said Tuesday that net income fell about 65% as the company took land charges and write-offs on options it plans not to pursue.

The Ft. Worth, Tex.-based company (DHI) became the latest residential builder to announce a decline in quarterly profit decline as well as land-related charges as the housing and real-estate markets soften. Still, per-share earnings topped Wall Street's expectations.

D.R. Horton reported net income fell to $109.7 million, or 35 cents a share, for the first quarter ended Dec. 31, down from $310.1 million, or 98 cents, earned in the year-ago period.

Total revenue fell about $403 million, to $2.8 billion.

Analysts polled by Thomson First Call had forecast, on average, a profit of $112.3 million, or 33 cents a share.

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