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OI Technical Staff : 2/2/2007 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 2/2/2007 9:50:12 PM

Closing Internals found at this Link

Jeff Bailey : 2/2/2007 9:30:32 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 2/2/2007 9:30:25 PM

You know what Jimmy C? I've got a feeling I'm going to have to "pay up" on CAT. Should have done it with DE when the market proved me wrong last fall.

The only thing that might "run like a Deere, is a CAT!

Remember how TERRIBLE DE's guidance was back in August?

Jeff Bailey : 2/2/2007 9:30:20 PM

KB Home (KBH) $55.64 +1.99% ... goes ex-dividend 02/06/07. Paying $0.25, SEC Yield 1.8%

Jeff Bailey : 2/2/2007 9:30:10 PM

DHF is up 1.14% on the week, while PHF up just 0.39% for same period. In essence, unless both closed-end "junk bond" funds hold he same securities, the MARKET seems to be buying YIELD equivalent.

RUT.X +2.70% on the week and major market winner!

Jeff Bailey : 2/2/2007 5:47:58 PM

Pacholder High Yield (PHF) went out at $10.18 +0.39%. Dividend of $0.075/month has its SEC Yield at 8.884%.

Jeff Bailey : 2/2/2007 5:46:22 PM

Dreyfus High Yield (DHF) $4.41 +0.45% ... goes ex-dividend on 02/06/07. $0.0285 has SEC Yield at 7.755%

Jeff Bailey : 2/2/2007 5:41:12 PM

3-pages of dividend announcements today. Ugh!

Quick glance has dividends being raised.

Jeff Bailey : 2/2/2007 5:37:52 PM

US Minimum Wage Boost Faces Hurdles As Dems Debate Tax Breaks

DJ- Low-wage workers will have to wait to see an increase in the minimum wage, a Democratic priority now caught in a party dispute over business tax breaks.

Democrats were trying to avoid an impasse over the legislation, but differences between House and Senate bills to raise the wage floor by $2.10 an hour posed the first test for a party newly in control of Congress.

At issue are tax breaks, worth $8.3 billion over 10 years, that the Senate included in its bill to help small businesses offset the cost of paying higher wages. The Senate bill passed Thursday by an overwhelming 94-3 vote. A House bill that breezed through last month contained no tax cuts.

How the conflict is resolved remains unclear, though party leaders in the House and Senate said they were certain the minimum wage would ultimately become law.

Senate Democrats say they need the tax cuts to win Republican support to overcome procedural blocks against the legislation. It takes 60 votes in the 100-member Senate to cut off debate on legislation. There are 49 Republicans in the Senate.

House Democrats continued Friday to hold out for a "clean" bill without tax breaks and urged Senate Democrats to challenge Republicans to vote against a wage-only bill.

"We believe that this bill ought to move on its own merits and be sent to the president," House Majority Leader Steny Hoyer said. "We're hopeful that that will happen."

Hoyer said he was not "drawing a line in the sand" but said the minimum wage and the tax breaks "don't necessarily need to be attached."

For House Democrats, eliminating the tax breaks has important practical and political consequences.

Under rules adopted by the new Democratic Congress, all spending increases and tax cuts must be paid for by increasing revenue or cutting spending elsewhere. The $8.3 billion in small business tax cuts are paid for by closing tax loopholes on offshore tax shelters, taxing corporate executives for big compensation packages, and removing corporate tax deductions for punitive damage awards in lawsuits and for fines paid to government agencies.

Such revenue is a precious commodity under the new so-called pay-go rules.

Sen. Richard Durbin, D-Ill., the assistant Senate Democratic leader, said Democrats would "rather spend $8 billion on other things. They think there are higher priorities and there are more serious challenges than to come up with additional breaks for businesses."

What's more, Democrats and their organized labor allies reject the argument that small businesses need tax breaks to offset the minimum wage.

"We don't want to validate the claim that small businesses that have been paying below-poverty-level wages need relief before they can start paying decent wages," said Bill Samuel, the legislative director for the AFL-CIO.

House Democrats do support some of the tax breaks in the Senate package, but they insist they should be considered separately. Still, the final outcome could be a compromise that retains some, but not all, the breaks that the Senate approved.

Republicans warned Democrats not to tamper with the Senate version, arguing that the tax breaks and the wage hike offered the right economic and political balance.

Sen. Charles Grassley, R-Iowa, said the overwhelming vote in favor of the Senate bill was a clear signal that the minimum wage and tax breaks must be linked. He scolded House Democrats for insisting that the tax provisions be removed.

"No one should be mistaken," Grassley said. "It is House Democrats, not Senate Republicans, who are delaying passage of the minimum wage."

Both sides were girding for a fight, already blaming each other for any obstacles to reconciling the House and Senate bills.

"Republicans are demanding billions in corporate tax breaks in exchange for a $2 bump in the minimum wage," said Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees. "As they play their political games, low-income workers continue to wait for their first raise in a decade."

Complicating the House-Senate negotiations are constitutional precedents that require tax legislation to originate in the House. The House could draft a small business tax bill and send it to the Senate where it would dovetail with the Senate minimum wage bill. House and Senate negotiators could also meet in a joint conference committee to reconcile the two bills.

Grassley said he was wary of a conference committee because he feared House and Senate Democrats would conspire to strip out the tax breaks.

The legislation would raise the minimum wage in three steps. It would go to $5.85 an hour upon taking effect 60 days after the president signs it into law, then to $6.55 an hour a year later, and to $7.25 an hour a year after that.

Jeff Bailey : 2/2/2007 5:34:21 PM

Every so often, a late Friday afternoon news announcement provides a treat to those that stick around.

Jeff Bailey : 2/2/2007 5:33:12 PM

Bank of Kansas doesn't look to be publicly traded.

Jeff Bailey : 2/2/2007 5:31:47 PM

Southwest Bancorp Agrees To Buy Bank Of Kansas

OKSB $27.47 +0.99%

Jeff Bailey : 2/2/2007 5:27:33 PM

Defense Contracts Announced Friday

DJ- Boeing Co. (BA), Ridley Park, Pa., received on Jan. 31, a delivery order amount of $80.9 million as part of an $80.9 million firm-fixed-price contract for spare parts for the CH-47 Chinook Helicopter. Work is expected to be completed by Dec. 31, 2013.

General Dynamics Corp.'s (GD) Ordnance and Tactical Systems Inc., St. Petersburg, Fla., received on Jan. 30 a delivery order amount of $77.7 million as part of a $77.7 million firm-fixed-price contract for production of 5.56mm, 7.62mm, and caliber .50 small arms ammunition. Work is expected to be completed by Aug. 23, 2010.

Raytheon Co. (RTN), Andover, Mass., received on Jan. 31 a $19.4 million firm-fixed-price contract for Patriot "Pure-Fleet" Tactical Assets Test Equipment. Work is expected to be completed by Jan. 31, 2008.

Raytheon Co. (RTN), Andover, Mass., received on Jan. 31 a $10.5 million modification to a cost-plus-fixed-fee contract for Patriot Missile Support Center. Work is expected to be completed by Jan. 31, 2008.

Lockheed Martin Corp.'s (LMT) Missile & Fire Control, Grand Prairie, Texas, received on Jan. 31 a $5.8 million cost-plus-fixed-fee contract for PATRIOT PAC-3 Missile support services, Field Surveillance Program. Workis expected to be completed by Jan. 31, 2010.

L-3 Communications Holdings Inc.'s (LLL) Titan Corp., Norfolk, Va., and Perot Systems Corp.'s (PER) Government Services, Inc., Fairfax, Va., are each being awarded an indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee pricing provision contract to provide submarine mechanical/electronics system engineering, analytical, logistics and technical support to the Mid-Atlantic Regional Maintenance Center. L-3 Communications' base amount is $15.6 million and the contracts estimated value if all options are exercised is $82.2 million. Perot Systems Government Services' base amount is $15.4 million and the contracts estimated value if all options are exercised is $81.4 million. Work is expected to be complete January 2008.

Raytheon Co.'s (RTN) Missile Systems, Tucson, Ariz., received a $13.4 million modification to a previously awarded firm-fixed price contract for the upgrade of 494 AIM-9M Guidance Control Sections for the Government of Egypt under the Foreign Military Sales Program. Work is expected to be completed in September 2009.

Raytheon Co. (RTN), Tucson, Ariz., received a $20.1 million firm-fixed-price with time and materials contract modification. This action provides for sustaining engineering services will be procured as firm fixed price for recurring and non-recurring tasks that can be definitively priced. Time and Material tasks will be used as necessary in accordance with FAR subpart 16.601. At this time, $7.56 million have been obligated. This work will be complete in December.

Keene Little : 2/2/2007 4:47:31 PM

In fact I'm going to go a step further and go on record and say that we're going to see the DOW top out at noon on Monday--at the mid line of its current up-channel at the Fib target of 12708. Maybe we'll even get a bearish engulfing candle reversal signal out of the day. Now you can all yell and throw tomatoes at me if it doesn't happen. Have a great weekend. Link

Keene Little : 2/2/2007 4:35:09 PM

A point that was just brought to my attention that is definitely worth considering for Monday--we could see an immediate move higher before topping out (especially in light of my discussion about a running 4th wave correction for SPX). I mentioned a Fib target of 12708 for the DOW which is based on two equal legs up from the January low (equality in the A-B-C move up).

The 2nd leg, wave-C, is to be a 5-wave move and that's what I've been showing (and we're waiting for confirmation of that 5th wave). The DOW may have finished its 4th wave pullback this afternoon and will give us a 5th wave up on Monday. If wave-5 goes to 62% of wave-1 (a very common relationship between 1st and 5th waves), then that projects to 12707. Can't get much closer to 12708 for the projection for wave-C. This one stands a very good chance of happening so if short, be aware. Link

Jeff Bailey : 2/2/2007 4:30:33 PM

Peru's Jan 30 Foreign Reserves $17.78B Vs. $17.73B

DJ- Peru's net international reserves reached a record high $17.78 billion as of Jan. 30, compared with $17.73 billion as of Jan. 23, the Central Reserve Bank of Peru said Friday.

The latest reserve number is $533 million higher than at the end of 2006.

The central bank said the increase was due mainly to intervention by the central bank to buy dollars in the foreign exchange market, for a total of $610 million so far in the month.

Peru's foreign-exchange position was $11.62 billion as of Jan. 30.

The foreign-exchange position doesn't include public sector deposits with the central bank or commercial bank reserves.

Jeff Bailey : 2/2/2007 4:27:47 PM

Moody's Placed Freedom 1991-1 Cdo, Ltd. Notes (formerly Cigna 1999-1 Ltd.) On Watch for Possible Upgrade.

DJ- Moody's Investors Service announced today that it has placed on watch for possible upgrade the rating on the following notes issued in 1999 by Freedom 1999-1 CDO, Ltd (formerly Cigna CDO 1999-1 Ltd.), a high yield structured finance collateralized bond obligation (CBO) issuer:

The U.S. $240,000,000 Class I Senior Secured Floating Rate Notes Due 2011

Prior Rating: Baa3

Current Rating: Baa3, on watch for possible upgrade

The rating action reflects the ongoing delevering of the transaction, according to Moody's.

Jeff Bailey : 2/2/2007 4:22:24 PM

US Bank Business Loans Down $4.9 Billion In Latest Week

DJ- Large U.S. banks' commercial and industrial loans fell $4.9 billion to about $1.193 trillion in the week ended Jan. 24, the latest week for which data are available, the Federal Reserve said Friday.

That followed a $7.2 billion increase in these loans to businesses during the previous week.

Jumbo certificates of deposit grew $4.9 billion to about $1.736 trillion in the latest weekly data, after growing $13.8 billion the previous week. Revolving home equity loans rose $1.3 billion to $473.9 billion after falling $100 million the previous week.

Federal Reserve Statistical Release Link

Keene Little : 2/2/2007 4:10:50 PM

The RUT reached a Fib level that could mark a top for it as well so this is also set up for a decline on Monday. The intermediate term pattern is a little less clear now that it made a new high this week since it suggests we could see the small caps pull back for a week or two and then head higher again into the end of February. I'll present some additional ideas on that one next week but for now it too is vulnerable to at least a pullback from here. Link

Keene Little : 2/2/2007 3:57:13 PM

One point to note on the GOOG chart I just posted, and something to watch for to help confirm EW counts. There is often what's call "alternation" between 2nd and 4th waves. If wave-2 is a sharp bounce then wave-4 will often be flatter, and vice versa. You can see that in the wave count for the move down from Thursday. This merely adds to the confidence level in the count (but as always doesn't make it a guarantee).

Keene Little : 2/2/2007 3:54:10 PM

End of day comment on GOOG: it looks like it's consolidating on top of its uptrend line from September. In the move down from Thursday's gap open high, today's bounce looks like a 4th wave correction. This suggests a break of the uptrend on Monday and a 5-wave move down. GOOG would be ready for a bounce after that and that's the bounce (and subsequent decline or not) that wil tell us whether or not GOOG has topped for good.

This 30-min chart zooms in on the 120-min chart I posted this morning (9:59) and shows the bearish wave count I have for GOOG. I will show an alternate count later, and the levels we'll need to watch in order to determine whether or not something more bullish could transpire. For the time being GOOG is a short, and that could be a drag on the NDX come Monday. Link

Jeff Bailey : 2/2/2007 3:51:58 PM

Merck (MRK) $44.78 -0.77% ... off session low of $43.91.

#18 weight in INDU/DIA/YM

Jeff Bailey : 2/2/2007 3:49:15 PM

Texas Gov: Must Vaccinate Girls Against Cancer-Linked Virus

DJ- Gov. Rick Perry ordered Friday that schoolgirls in Texas must be vaccinated against the sexually transmitted virus that causes cervical cancer, making Texas the first state to require the shots.

The girls will have to get Merck & Co.'s (MRK) new vaccine against strains of the human papillomavirus, or HPV, that are responsible for most cases of cervical cancer.

Merck (MRK) is bankrolling efforts to pass laws in state legislatures across the country mandating the Gardasil vaccine for girls as young as 11 or 12. It doubled its lobbying budget in Texas and has funneled money through Women in Government, an advocacy group made up of female state legislators around the country.

Details of the order were not immediately available, but the governor's office confirmed to The Associated Press that he was signing the order and would comment Friday afternoon.

Perry has several ties to Merck and Women in Government. One of the drug company's three lobbyists in Texas is Mike Toomey, his former chief of staff. His current chief of staff's mother-in-law, Texas Republican state Rep. Dianne White Delisi, is a state director for Women in Government.

Toomey was expected to be able to woo conservative legislators concerned about the requirement stepping on parent's rights and signaling tacit approval of sexual activity to young girls. Delisi, as head of the House public health committee, which likely would have considered legislation filed by a Democratic member, also would have helped ease conservative opposition.

Perry also received $6,000 from Merck's political action committee during his re-election campaign.

It wasn't immediately clear how long the order would last and whether legislation is still necessary. However it could have been difficult to muster support from lawmakers who champion abstinence education and parents' rights.

Perry, a conservative Christian who opposes abortion rights and stem-cell research using embryonic cells, counts on the religious right for his political base.

But he has said the cervical cancer vaccine is no different than the one that protects children against polio.

"If there are diseases in our society that are going to cost us large amounts of money, it just makes good economic sense, not to mention the health and well being of these individuals to have those vaccines available," he said.

Texas allows parents to opt out of inoculations by filing an affidavit stating that he or she objected to the vaccine for religious or philosophical reasons.

Even with such provisions, however, conservative groups say mandates take away parents' rights to be the primary medical decision-maker for their children.

The federal government approved Gardasil in June, and a government advisory panel has recommended that all girls get the shots at 11 and 12, before they are likely to be sexually active.

The New Jersey-based drug company could generate billions in sales if Gardasil - at $360 for the three-shot regimen - were made mandatory across the country. Most insurance companies now cover the vaccine, which has been shown to have no serious side effects.

Merck spokeswoman Janet Skidmore would not say how much the company is spending on lobbyists or how much it has donated to Women in Government. Susan Crosby, the group's president, also declined to specify how much the drug company gave.

A top official from Merck's vaccine division sits on Women in Government's business council, and many of the bills around the country have been introduced by members of Women in Government.

Jeff Bailey : 2/2/2007 3:38:58 PM

eBay's Former Director Jeffrey Skoll Cuts Company Stake To Below 5%

EBAY $32.47 +0.99% ...

Keene Little : 2/2/2007 3:35:50 PM

The DOW looks like it could be slightly ahead of the SPX in its wave count. If I assume today's pullback is the 4th wave correction then we're due a final push higher probably on Monday. Link

But the discrepancy here is actually what makes me think it's possible we've already seen the high. The DOW would likely pull back further with SPX on Monday but if it did that then it threatens to break down from it up-channel. Like I said, tricky spot here. If we do get another push higher on Monday then the Fib target at DOW 12708 will be the level to watch.

Marc Eckelberry : 2/2/2007 3:26:52 PM

Here is the Co2 graph over the past 400K years, before I get the odd e-mail suggesting this is a "normal" global warming phase. The rise in CO2 is 50% higher than the highest read 125,000 years ago. And the chart keeps climbing exponentially every decade. This suggest that the destruction to our habitat could unimaginable: Link

Jeff Bailey : 2/2/2007 3:22:33 PM

03:00 Internals found at this Link

Keene Little : 2/2/2007 3:22:28 PM

It's possible we have what's called a "running correction" for a 4th wave in the wave count for the move up from last Frday. What that would mean is that the correction works its way higher rather than pullback and a new high can be "hidden" inside the choppy climb higher. It's not that common but in a overly bullish market it's not uncommon either. What that means is that a high today could be THE high and I continue to harp on the vulnerability of this market here and now.

But, if today's high is the end of wave-(iii) in the count then we're still due a 4th wave pullback before getting the final high and it could look something like this: Link Until we get a sharp decline, with a drop below 1436 (and confirmed with a drop below 1426) we have to remain cautious. This is a tough spot right here. I like the short side but understand the upside risk is about another 7 SPX points higher (1455).

Marc Eckelberry : 2/2/2007 3:11:17 PM

Most of the "scientists" who claimed otherwise (they are all classified as whackos now) received funding from Exxon, including the dude at Fox. Here is the list: Link
May they all rot in hell.

Jeff Bailey : 2/2/2007 3:05:14 PM

03:00 Market Watch found at this Link

Marc Eckelberry : 2/2/2007 3:03:17 PM

I drive a Prius, Jane. Love it. And Arnold let's me drive in the car pool lane, alone. Worth more than a Bentley just for that.

Keene Little : 2/2/2007 3:02:10 PM

I'm back. I see the market is still threatening to roll over but just isn't doing it. The DOW remains weaker but OEX/SPX is still hanging inside its ascending wedge. That pattern could actually see a final high inside it to finish it off. That would mean a new high into the close but a setup for a down Monday. But I'm not so sure about that new high and certainly nothing I'd like to try to trade. The risk from here is clearly to the downside.

Jane Fox : 2/2/2007 2:58:35 PM

Finally Marc maybe we will be able to rally the forces and all do something to help the environment. It is unfortunate but we do need the government to lead the way.

Jeff Bailey : 2/2/2007 2:54:34 PM

Cisco shares lifted by Goldman Sachs upgrad ... MarketWatch Story Link

Marc Eckelberry : 2/2/2007 2:55:41 PM

Feb. 2 (Bloomberg) -- The human role in climate change is no longer debatable, U.S. Energy Secretary Samuel Bodman said today, while he defended the president's policy of addressing the issue without mandatory greenhouse gas limits. Bodman and other Bush administration officials were responding to a report from a United Nations panel that concluded it is more than 90 percent certain the Earth is warming because of carbon dioxide that is released by burning fossil fuels. The report, released today in Paris, predicted rising sea levels, increased storms and more droughts and floods. "Human activity is contributing to changes in the Earth's climate," Bodman said at a press conference in Washington. "That issue is no longer up for debate."

Some still believe the earth is flat, but at least we are getting somewhere on this debate. Low lying properties in the Gulf should be sold over the next few years.
By the way, we could have the mother of all hurricane seasons this year or next. I was hoping for a deeper pullback in oil to get in long, but it looks like many of us missed the boat. All this nonsense about 40 oil is just that, nonsense.

Jeff Bailey : 2/2/2007 2:52:30 PM

Most Actives ... QQQQ $44.08 +0.13%, CSCO $27.07 +1.80%, MSFT $30.17 -1.27%, INTC $21.10 -0.04%, EOP $55.13 -0.03%, SPY $144.76 +0.10%, SUNW $6.59 +0.61%, DELL $23.47 -1.38%, ORCL $17.36 +1.81%, PFE $26.84 +0.86%

Jane Fox : 2/2/2007 2:51:51 PM

There has been nothing out there today that has enticed me to put my money on the table.

Jane Fox : 2/2/2007 2:50:03 PM

Within one 5 minute bar the tICKS hit +800 and -800.

Marc Eckelberry : 2/2/2007 2:37:21 PM

Trade recap, YM +0
Short 12698, stop 12718 hold over if not stopped.

Marc Eckelberry : 2/2/2007 2:35:08 PM

Checking in, the trade is +20, but it looks like we will hold over the weekend. I doubt they will get back above 12700 at the close.

Jeff Bailey : 2/2/2007 2:29:53 PM

Comex Copper Review: Hits 10-Month Low Amid Technical Failure

DJ- Comex copper futures at the New York Mercantile Exchange sank rapidly to a more than 10-month low Friday after technical chart points were broken and long liquidation ensued.

One analyst contends that news surrounding metals trading hedge fund Red Kite could have also added to copper's demise.

At settlement, most-active March copper was down 10.75 cents at $2.4230 per pound. During the session the contract plunged to its weakest level since late March at $2.3850.

Traders and analysts said the red metal was due to work lower amid a backdrop of weak fundamentals and an unsteady technical picture.

Dan Vaught, a futures analyst at AG Edwards, said the market suffered amid follow-through selling from Thursday's break lower.

"There are also ideas that the increase in metal inventories (is pressuring the market) even though we saw a modest decline in London Metal Exchange inventories today," said Vaught.

But what is driving the decline, Vaught said, is the technical aspects.

"The market had shown strong support at $2.47 and consolidated at that level but the break below that price caught the attention of (technical traders) and that move has led to a momentum driven downturn to substantially lower levels," said Vaught.

March copper violated support levels seen at $2.47 and $2.40. The next levels of support are said to be at $2.37 and $2.33, trade sources said.

Bill O'Neill, a managing partner at LOGIC Advisors, said the sell-off could be tied to news that Red Kite Management, a high-flying, $1 billion metals-trading hedge fund firm, is looking to extend the notice period for investor redemptions after recent losses, according to documents obtained by MarketWatch.

Red Kite, like many other investors, has made millions of dollars betting on the price of metals such as copper, but after hitting highs in December, copper prices have slumped more than 20%.

Red Kite's Compass fund lost more than 2% in December, according to a performance update obtained by MarketWatch. It's not clear how the fund performed in January.

O'Neill said investors and other traders could have sold copper in reaction to the story.

"There could have been some redemptions - forced selling - or pile-on selling because of it," said O'Neill. "The bottom line is that there was an unusual sell flow into the market today that had nothing to do with the dollar or gold or copper stocks."

Jeff Bailey : 2/2/2007 2:24:42 PM

Venezuela Oil Basket Up $2 To $47.96 For Week Ended February 2

DJ- The average price for Venezuela's basket of crude oil and refined products rose $2.00 to $47.96 a barrel for the week ended Feb. 2, up from $45.96 the previous week, the oil ministry reported Friday.

Many analysts say the government needs an oil price of more than $50 a barrel to maintain current levels of state spending.

The average price for the year to date is $46.96, down from an average price of $56.44 a barrel in 2006.

The government of President Hugo Chavez has been spending windfall oil revenue on social programs and off-budget infrastructure projects over the past two years.

Jeff Bailey : 2/2/2007 2:19:00 PM

US Oil Fund (AMEX:USO) alert $48.98 +2.38% ...

Jeff Bailey : 2/2/2007 2:13:55 PM

I'm seeing a "very different reality" regarding the home construction industry than what the popular media is currently reporting.

Jeff Bailey : 2/2/2007 2:13:16 PM

Mohawk Ind. (MHK) $86.80 +1.17% ...

Jeff Bailey : 2/2/2007 2:10:50 PM

Standard Pacific Swings to Q4 Loss AP Story Link

SPF $29.71 +6.98% ...

Jeff Bailey : 2/2/2007 2:03:03 PM

SULZBERGERS MOVES ASSETS FROM MORGAN STANLEY

DJ- Ochs-Sulzberger family, which controls the New York Times, is moving most of its personal assets from Morgan Stanley after a prolonged campaign by a Morgan Stanley money manager for changes to publishers' corporate governance.

MS $83.81 -0.04% ...

NYT $24.05 +2.29% (see also 01:49:04)

Jeff Bailey : 2/2/2007 1:56:29 PM

EXCO TO BUY ANADARK PROPERTIES IN $860M DEAL

DJ- Anadarko is selling about 155 fields in Oklahoma and Texas that produced about 103 million cubic feet equivalent of natural gas per day from more than 1,300 wells as of 2006.

XCO $16.40 -2.08% ...

APC $43.82 -0.22% ...

Jeff Bailey : 2/2/2007 1:52:31 PM

NYSE GROUP SWINGS TO 4Q PROFIT

DJ- Big Board operator earns $45.5 million, or 29c a share, compared with a year-ago loss of $20.3 million. Results helped by Archipelago acquisition. Excluding items, it earns 45c a share, a penny shy of expectations.

NYX $101.25 -0.41% ...

Jeff Bailey : 2/2/2007 1:50:32 PM

CA UP AFTER REPORTING 3Q RESULTS

DJ- Shares rise 7% a day after maker of business software posts net income of $50 million, or 9c a share, as revenue grows 4% to $1 billion. CA says adjusted EPS comes to 24c. Analysts expected EPS of 21c on revenue of $985 million.

CA $26.75 +7.00% ...

Jeff Bailey : 2/2/2007 1:49:04 PM

GANNETT 4Q NET UP 3% ON AD SALES

DJ- Media company earns $353.5 million, or $1.51 a share, beating views by 2c. Revenue climbs 7.5% to $2.21 billion. Newspaper-ad revenue gains 3.7%, with broadcasting up 30%, helped by stronger local and political ads.

GCI $59.29 +2.38% ...

Jane Fox : 2/2/2007 1:48:11 PM

SAN FRANCISCO (MarketWatch) -- An investor lawsuit seeking class-action status accuses Dell Inc. of improper accounting in its relationship with chip giant Intel Corp., according to a media report published Thursday evening.

The suit, filed late Wednesday in U.S. District Court in Austin, Texas, alleges that Dell failed to properly account for and disclose quarterly rebates from Intel (INTC) that inflated profits by hundreds of millions of dollars, according to a story in The Wall Street Journal's online edition.

The suit alleges that Dell received at times as much as $1 billion a year in "secret and likely illegal" kickbacks in the form of "e-Cap" or "exception to corporate average pricing" payments" from Intel to ensure that Dell used no other chip supplier, according to The Journal. Specifically, the complaint alleges that Dell received payments from Intel for not doing business with American Micro Devices Inc. (AMD) , The Journal reported

Jeff Bailey : 2/2/2007 1:46:47 PM

AMERICAN AXLE UP ON 4Q RESULTS, GUIDANCE

DJ- Shares jum 5% after firm posts a net loss of $188.6 million, or $3.74 a share, compared with year-ago earnings of $4.5 million. Loss blamed on restructuring charges and softer auto sales. It also offers an optimistic outlook for the year.

AXL $22.08 +5.39% ...

Jeff Bailey : 2/2/2007 1:42:49 PM

BODMAN WARNS CARBON CAPS WOULD 'DAMAGE' US ECONOMY

Energy Secretary Samuel Bodman agrees with U.N. climate study that human activity is leading to climate change, but says capping emissions of carbon dioxide isn't the answer because it would hurt the U.S. economy.

Jeff Bailey : 2/2/2007 1:40:51 PM

WORLDWIDE CHIP SALES INCREASE 9%

DJ- Semiconductor Industry Association reports 2006 global sales of semiconductors rose to $247.7 billion, driven by sales of cellphones, digital music players and HDTV sets. It notes U.S. sales of HDTV units likely doubled in 2006.

Jeff Bailey : 2/2/2007 1:40:10 PM

NISSAN CUTS FULL YEAR OUTLOOK

DJ- Shares plunge 8% after Japanese car maker posts a 23% drop in fiscal 3Q profit, hit by weak vehicle sales in Japan and Europe, and cuts full year earnings outlook. CEO Ghosn calls 2006 performance 'a failure.'

NSANY $23.46 -8.21% ...

Jeff Bailey : 2/2/2007 1:38:51 PM

CHEVRON NET SLIPS 9% ON LOWER GAS PRICE

DJ- Oil and gas producer earns $3.77 billion, or $1.74 a share, as a sharp decline in natural gas prices offsets improved operating performance from its oil and gas fields and refineries. Revenue and other income falls 11% to $47.75 billion.

CVX $74.09 -0.51% ...

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

01:00 Internals found at this Link

Marc Eckelberry : 2/2/2007 1:26:47 PM

The only futures trades I hold over a weekend are shorts, by the way. Never hold a future's long over the weekend.

Marc Eckelberry : 2/2/2007 1:25:26 PM

If we close below 12698 and are still in the trade, hold over the weekend as I would then expect 12585 next week. Stepping away, this is a sell and hold.

Marc Eckelberry : 2/2/2007 1:24:12 PM

YM old trendline R is moved up at 12698, so the short is a good odds given the weakness.

Marc Eckelberry : 2/2/2007 1:17:56 PM

I normally don;t use the VIX too much with YM, but if ES falters, YM will as well, since it is weaker today.

Marc Eckelberry : 2/2/2007 1:17:07 PM

The VIX is oversold on the 5 mn.

Marc Eckelberry : 2/2/2007 1:13:37 PM

That covers 76.4% 12717 off yesterday.

Marc Eckelberry : 2/2/2007 1:13:00 PM

Short 12698, raise stop to 12718.


Marc Eckelberry : 2/2/2007 1:12:16 PM

In fact, the stop should be 61.8% 12715 to be above 61.8%. I might adjust.

Marc Eckelberry : 2/2/2007 1:11:04 PM

Short YM 12698, stop 12708.

Jeff Bailey : 2/2/2007 1:03:59 PM

01:00 Market Watch found at this Link

Jane Fox : 2/2/2007 1:01:59 PM

These shares are not looking anymore "frothy" than the American indexes.

Jane Fox : 2/2/2007 1:00:43 PM

The iShares MSCI Hong Kong Index Fund (EWH) , which tracks the performance of the Hong Kong market, was up 0.2% at $16.73. The iShares FTSE/Xinhua China 25 Index Fund (FXI) , an ETF that tracks the performance of the Chinese stock market, was off 0.4% at $103.95. The PowerShares Golden Dragon Halter USX China Portfolio (PGJ) , which comprises U.S. companies that derive a majority of their revenue from China, fell 0.1% to $20.95.

Jeff Bailey : 2/2/2007 12:59:14 PM

Exxon/Mobil (XOM) $75.13 +0.06% ...

Jeff Bailey : 2/2/2007 12:58:41 PM

PetroChina (PTR) $123.30 -0.08% ...

Jane Fox : 2/2/2007 12:58:28 PM

NEW YORK (MarketWatch) -- U.S.-listed shares of Chinese companies traded mostly lower Friday, tracking steep losses in their home markets on renewed concerns that the authorities may take steps to curb speculation in the market.

The move followed declines earlier in the week sparked by comments by Cheng Siwei, vice-chairman of the standing committee of the National People's Congress, that the mainland stock market could be overheating and that "there is a bubble growing."

The Bank of New York China ADR index was last down 0.6% at 342.91.

Jeff Bailey : 2/2/2007 12:58:14 PM

Hang Seng Index ($HSI) Link closed up 133.52, or +0.65% at 20,563.68.

The HSI had been seeing some weakness in recent sessions and more than likely, today's "news" somewhat factored into things.

Will continue to monitor.

Jane Fox : 2/2/2007 12:54:22 PM

These two look totally unreadable but what they are telling you is that it is not worthwhile putting your hard earned $ on the table today. Link

Jeff Bailey : 2/2/2007 12:52:00 PM

US Begins WTO Complaint Against Chinese Export Subsidies

DJ- The U.S. has begun the process of filing a complaint against China at the World Trade Organization, alleging the emerging economic power is subsidizing a range of exports.

U.S. Trade Representative Susan Schwab on Friday said the U.S. has requested dispute settlement consultations with China over export subsidies. This triggers a 60-day period of talks, after which the U.S. can ask the WTO to form a dispute settlement panel.

"The U.S. believes that China uses its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods," U.S. Trade Representative Susan Schwab said in a statement. "The subsidies are offered across the spectrum of industry sectors in China - whether in steel, wood products, information technology or others."

Schwab said the decision to bring the case came after dialogue with the Chinese failed to resolve the problem.

The Bush administration, under pressure from Democratic and Republican legislators alike, is taking a tougher stance toward enforcement of the commitments China made when it entered the WTO five years ago. In a report to Congress released in December, USTR said it was worried the Chinese government is "backsliding" with respect to trade liberalization and using subsidies and regulation to protect its companies from foreign competition.

In November, the U.S. Commerce Department said it is reconsidering its policy of exempting non-market economies from anti-subsidy duties when it agreed to investigate a complaint over imports of sheet paper from China. Under U.S. trade laws, U.S. companies can ask the U.S. government to impose tariffs on imported goods if an investigation finds that foreign producers are subsidized by their governments. These penalties are known as countervailing duties.

Commerce has a long-standing position that it is impossible to accurately calculate subsidies for goods produced in a non-market economy.

Schwab said Chinese companies benefiting from a range of subsidies, like tax rebates, accounted for 60% of China's manufacturing exports to the U.S. in 2005. The U.S. trade deficit with China topped $200 billion during that year, fueling complaints from U.S. manufacturers that the Chinese market is closed to their products.

Last year, the U.S. and European Union filed a WTO case against Chinese tariffs on imported auto parts. The U.S. previously filed a case against Chinese tax rebates for domestic producers of semiconductors, and the two sides were able to resolve the dispute during the consultation period.

Jane Fox : 2/2/2007 12:37:48 PM

WASHINGTON (MarketWatch) -- The Bush administration is filing a case with the World Trade Organization against what are illegal Chinese export subsidies, U.S. Trade Representative Susan Schwab announced Friday.

"We are committed to challenging China's WTO-inconsistent practices that harm American workers and businesses," said U.S. Trade Representative Susan Schwab in a prepared statement.

"China's use of market-distorting subsidies creates an uneven playing field and subverts China's own efforts to foster consumption-led growth," Schwab said.

The U.S. is seeking WTO-sponsored talks with China to end the subsidies, including basic tax laws and other tools, which the U.S. says are illegal and provide incentives for foreign investors in China and their Chinese partners to export to the United States.

Jeff Bailey : 2/2/2007 12:35:17 PM

New Data Series from EIA ... For those of you that may not have read a recent EIA Weekly Petroleum Update, they have created what I feel is a very useful data series estimate Days of Supply, which is tabulated each week. Link

Again, it is an ESTIMATE and the value (Days of Supply) is calculated as follows.

Weekly stockpile of the commodity (oil, gasoline, etc.) is then divided by the 4-week average of the INPUT.

Keene Little : 2/2/2007 12:24:36 PM

I've got to run off for a check up with the Dr. to check the hearing in my left ear (after getting bobbed in the head last week). I should be back in about an hour (two at the most).

Keene Little : 2/2/2007 12:22:26 PM

There is another reason to expect resistance around the 670 area for the OEX, other than the 62% retracement of the 2000-2002 decline (at 670.13. Two equal legs up from the January low, for an expected A-B-C move to finish off the rally, is at 670.83. It's just one more example of long term and short term Fibs pointing to the same area for what should be a significant top to this market. It doesn't mean the market will stop here but it does mean we're at a potentially vulnerable point for the market.

Keene Little : 2/2/2007 12:16:09 PM

OEX looks tired. It almost broke the short term uptrend line from yesterday but is still holding on. The negative divergence against today's high continues to urge caution. A break to a new daily low would now be a sell signal, at least for the short term. I'll be watching a pullback for impulsiveness or correctiveness. In the meantime we could still see new highs and if they're accompanied by continuing negative divergences then I'd look to short it again. Link

Jeff Bailey : 2/2/2007 12:17:56 PM

Here's my EIA Weekly Inventory data of various categories, which I use as a fundamental SUPPLY indication Link

Note: The Year Ago Ultra Low Sulfer Diesel numbers are skewed as ULS Diesel mandate by EPA wasn't until this past summer.

Jane Fox : 2/2/2007 12:09:42 PM

Dateline CNN - At least 14 people were killed in the storms that smashed through central Florida this morning, emergency officials tell The Associated Press.

Jeff Bailey : 2/2/2007 11:57:10 AM

Note: (per 11:52:19 Table) there is a "break" from 03/31/06 to 10/06/06 due to horizontal limitations.

Jeff Bailey : 2/2/2007 11:52:19 AM

Here's my EIA Weekly Gross Inputs, Weekly Refinery Op. Capacity and Pct. Utilization Table data Link , which I use as a fundamental (not technical) DEMAND indication for oil.

Jeff Bailey : 2/2/2007 11:45:39 AM

EIA: US Nov Oil Use 20.544M B/D, Down 2.1% Vs Estimate

DJ- U.S. oil demand in November was 2.1% lower than previously estimated, due to steep revisions in demand for gasoline and distillate fuel, data published Friday by the Energy Information Administration show.

November demand averaged 20.544 million barrels a day, and was down 0.4% from a year ago. Earlier estimates put November demand at 20.987 million barrels a day, which would have been a gain of 1.8% from a year ago.

Demand for gasoline, the most widely used petroleum product, averaged 9.263 million barrels a day, down 1.1% from the earlier estimate. November gasoline demand was up 0.5% from a year ago, not 1.6%, as estimated earlier.

Demand for distillate fuel, the umbrella group for diesel and heating oil, averaged 4.183 million barrels a day, a steep 3.5% downward revision from earlier estimates. Still, distillate use posted a 3% rise from a year ago, though it was less than half of the previously estimated gain of 6.7%.

Jeff Bailey : 2/2/2007 11:42:53 AM

AirTran Airways Reports Jan Traffic Rose 15.3%

DJ- AirTran Airways, a subsidiary of AirTran Holdings Inc. (AAI), said Friday that traffic in January rose 15.3% to 1.06 billion revenue passenger miles.

Load factor, or the percentage of the plane filled with passengers, fell 1.6 percentage points to 62.2%. Capacity increased 18.2% to 1.71 billion available seat miles, the Orlando, Fla.-based carrier said.

AAI $11.13 +0.08% ...

Marc Eckelberry : 2/2/2007 11:42:08 AM

That puts the day at even. I have to leave, but I wanted you to make your money back. Short the bounces.

Marc Eckelberry : 2/2/2007 11:41:20 AM

Exit YM short at 12674, +34.

Marc Eckelberry : 2/2/2007 11:40:42 AM

S1 is 12669

Marc Eckelberry : 2/2/2007 11:36:19 AM

5 mn YM chart for scalpers: Link

Marc Eckelberry : 2/2/2007 11:33:44 AM

The trade is now +25, so if you got hit overnight, take some off, although it looks like we will get a trip to 12669.

Marc Eckelberry : 2/2/2007 11:31:05 AM

And like 2000, it does not look like the Feds are going to lower rates any time soon.

Marc Eckelberry : 2/2/2007 11:30:26 AM

Remember that in 2000 Q1 we had stellar earnings and lowered guidance after a 3 year bull run. We are now in the same situation, but after a 4 year run.

Marc Eckelberry : 2/2/2007 11:27:05 AM

It is starting to look like many decided SX 1449 was good enough for a Q1 high. Earnings have been less than stellar (insofar as GUIDANCE is concerned) and it's time to get the usual post Fed sell-off.

Marc Eckelberry : 2/2/2007 11:19:30 AM

TNX is starting to bear flag and that is supportive for equities. If it doesn't result in a closing bounce, then we could have seen the top, since it means concern has now shifted to economic weakness in the face of the Feds holding steady.

Jane Fox : 2/2/2007 11:18:57 AM

Like I said earlier the internals are talking today and they are saying this is not a good day for trading.

Jeff Bailey : 2/2/2007 11:18:19 AM

11:00 Internals found at this Link

Marc Eckelberry : 2/2/2007 11:17:39 AM

After YM, ER is the weakest, but it had quite a run yesterday. That one is trading in a very odd way. Rising yields yesterday (off lows) should have held it back and dropping yields today should give it a boost.

Marc Eckelberry : 2/2/2007 11:14:45 AM

IBM and CAT are the only big guys holding up YM at this point.

Marc Eckelberry : 2/2/2007 11:10:03 AM

I'm inclined to sit it out. The 5 DMA is all the way down at 12630.

Marc Eckelberry : 2/2/2007 11:09:25 AM

The coil broke our way, now we should be able to ride out the lunch period as long as NQ struggles with 1805.75. If you want to scalp the pivot noise, take +13 here, that would lower the day to -21 from -34. The overnight was not kind and to be taken out by 2 ticks always hurts, especially now that we are back at yesterday's entry.

Jeff Bailey : 2/2/2007 11:04:03 AM

11:00 Market Watch found at this Link

Keene Little : 2/2/2007 11:02:14 AM

I had mentioned yesterday the comparison between the OEX and SPX. While SPX has pushed to new highs above its January 25th high the OEX is struggling at that high. This OEX high happens to be at the 62% Fib retracement of the 2000-2002 decline and is a very important Fib (670.13). My comment was that the generals (bigger caps in the OEX) were letting their soldiers go out front and take enemy fire and that's usually a bearish sign.

As one reader told me (thanks Austin), the smarter generals know when to keep their heads down. They're the smart ones who stay cool under fire (take profits at important Fib levels) whereas the young and emotional soldiers charge ahead oblivious of the dangers and feeling invincible (those would be the retail traders). I'd listen to those smart generals at this time. Keep an eye on the OEX.

Marc Eckelberry : 2/2/2007 11:01:28 AM

NQ back below weekly pivot.

Marc Eckelberry : 2/2/2007 11:01:12 AM

Pivot is 12697.

Marc Eckelberry : 2/2/2007 11:00:17 AM

Short 12708, lower stop to even.

Jeff Bailey : 2/2/2007 10:45:00 AM

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

Marc Eckelberry : 2/2/2007 10:42:01 AM

Short 12708, lower stop to 12714.

Marc Eckelberry : 2/2/2007 10:37:44 AM

Short YM 12708, stop 12715

Marc Eckelberry : 2/2/2007 10:36:09 AM

Watch NQ 1810.

Keene Little : 2/2/2007 10:34:31 AM

GOOG is still trying to hold onto its uptrend line at 480. If it consolidates here much longer, rather than bounce, that increases the chances it will break down. If that happens I don't see NDX rallying.

But here is another NDX 120-min chart, similar to the one I just posted (10:20) but with alternative counts. I'm going to try to do this a little more with the major indices--show a road map of where price could head based on the wave counts and whether or not certain levels are achieved/broken (which then confirms or changes the wave count). Hopefully it won't be too confusing but give me some feedback if you'd like to see more (or less) of this in the future. Link

Marc Eckelberry : 2/2/2007 10:34:12 AM

Exit +0

Jane Fox : 2/2/2007 10:30:46 AM

WASHINGTON (MarketWatch) -- Orders for U.S.-made factory goods rose by 2.4% in December, as orders for metals and machinery offset a big drop in demand for defense capital goods, the Commerce Department reported Friday.

Excluding defense goods, factory orders rose by 3.1% in December, according to the report. Taking out transportation, orders climbed by 2.2%.

The overall gain in factory orders was propelled by a 5.4% gain in orders for primary metals and a 5.2% climb in orders for machinery.

Orders for durable goods rose 2.9% in December, slightly lower than the 3.1% estimated by the government a week ago.

Marc Eckelberry : 2/2/2007 10:29:24 AM

Short 12706, lower stop to 12711.

Marc Eckelberry : 2/2/2007 10:22:30 AM

Short 12706, lower stop to 12714.

Marc Eckelberry : 2/2/2007 10:22:09 AM

50% is lost again.

Marc Eckelberry : 2/2/2007 10:21:58 AM

Short 12706, stop 12715.

Marc Eckelberry : 2/2/2007 10:21:16 AM

Exit +9

Jeff Bailey : 2/2/2007 10:20:58 AM

Filled at $87.21 on the TLT.

Keene Little : 2/2/2007 10:20:28 AM

I'm still waiting to see if we get some downside follow through on NDX to support this very bearish wave count (3rd of a 3rd wave down is due). Currently the upside potential is for the current leg up from last Friday's low to get a little higher (1820-1825), which would change the wave count slightly, but so far I don't see anything here that tells me to be long the techs. Link

Marc Eckelberry : 2/2/2007 10:20:06 AM

Short 12712, lower stop to even.

Marc Eckelberry : 2/2/2007 10:16:48 AM

NQ stalls at 1810.

Marc Eckelberry : 2/2/2007 10:16:30 AM

SHhrt YM 12712, stop 12715.

Marc Eckelberry : 2/2/2007 10:16:10 AM

61.8%

Marc Eckelberry : 2/2/2007 10:15:18 AM

NQ 1810 is a loaded zone.

Jeff Bailey : 2/2/2007 10:14:59 AM

TYX.X down 1.2 bp at 4.921%

Marc Eckelberry : 2/2/2007 10:14:25 AM

With NQ above weekly pivot, bulls are back in charge.

Jeff Bailey : 2/2/2007 10:13:55 AM

Bullish swing trade long alert for a full position in the ishares Lehman 20-year (AMEX:TLT) at the offer of $87.21. Stop $86.40, target $90.00.

Marc Eckelberry : 2/2/2007 10:13:51 AM

They have my number today.

Marc Eckelberry : 2/2/2007 10:13:29 AM

-10

Jane Fox : 2/2/2007 10:11:34 AM

AD line is a mostly neutral +290 and AD volume under 0 now but so close to 0 that have to call it neutral as well. In my opinion the highest probability trade right now is on the sidelines.

Jeff Bailey : 2/2/2007 10:10:12 AM

DJUSHB up just 2.63%

Marc Eckelberry : 2/2/2007 10:08:45 AM

Short YM 12698, stop 12708.

Jane Fox : 2/2/2007 10:08:29 AM

They're bbbaacckkk TICKS +1000

Keene Little : 2/2/2007 10:06:04 AM

AA and GM pulling the DOW down this morning, both down a little more than 1.6%. That's part of the difference between the DOW in the red while SPX is marginally green.

Jeff Bailey : 2/2/2007 10:03:03 AM

10:00 Market Watch found at this Link

Marc Eckelberry : 2/2/2007 10:02:13 AM

SOX is green, bounce coming.

Marc Eckelberry : 2/2/2007 10:00:21 AM

The line in the sand for YM is 12660/12669.

Marc Eckelberry : 2/2/2007 9:59:34 AM

NO one is interested in chasing this at this point.

Jane Fox : 2/2/2007 9:59:32 AM

All markets are now following YM's lead and are making new daily lows.

Keene Little : 2/2/2007 9:59:18 AM

Here's the bearish wave count and projection for GOOG for those who are following the stock. I'll show an alternate, short term bullish, if price holds up here. Link

Marc Eckelberry : 2/2/2007 9:57:45 AM

10 ema 60 mn support, bulls need it to hold.

Keene Little : 2/2/2007 9:56:51 AM

GOOG is testing its uptrend line from September at 480. If this trend line breaks for this high flier then that's a heads up that fund managers are beginning to remove risk from this market. NDX will suffer and that's usually one of our leading indicators. Keep an eye on that one. If GOOG is to bounce, here's where it will happen.

Marc Eckelberry : 2/2/2007 9:56:02 AM

Waiting for a bounce, but it's not coming.

Marc Eckelberry : 2/2/2007 9:55:26 AM

12686 is 61.8%

Jane Fox : 2/2/2007 9:55:09 AM

YM is also the only market to break to new daily lows, however, I wonder if the others are not far behind.

Jane Fox : 2/2/2007 9:53:36 AM

Ym is the first market to break its overnight lows and looks to be the weaker market so far today.

Marc Eckelberry : 2/2/2007 9:47:48 AM

Scratching back some.

Marc Eckelberry : 2/2/2007 9:47:29 AM

Exit +7

Marc Eckelberry : 2/2/2007 9:44:59 AM

Long YM 12697, stop 12694.

Keene Little : 2/2/2007 9:49:06 AM

Futures premium over cash:

YM -- +34
ES -- +5.75
NQ -- +11
ER -- +2.80

Marc Eckelberry : 2/2/2007 9:42:44 AM

NQ is back below weekly pivot.

Marc Eckelberry : 2/2/2007 9:42:10 AM

50% is 12696.

Marc Eckelberry : 2/2/2007 9:39:38 AM

YM is the weakest today.

Marc Eckelberry : 2/2/2007 9:38:51 AM

At ex-trendline.

Marc Eckelberry : 2/2/2007 9:37:40 AM

This is a little maddening to have been taken out by 2 ticks.

Jane Fox : 2/2/2007 9:37:23 AM

WE are seeing the sellers coming in today but the TICKS so far have not gotten below 0 - how strange is that?

Marc Eckelberry : 2/2/2007 9:34:05 AM

TNX is right at 10 DMA, but bonds have a bid. I would wait.

Jane Fox : 2/2/2007 9:33:10 AM

AD line is +301 and AD volume is above 0 and climbing. Bulls have the ball but do not have field position and do not seem too strong this morning.

Marc Eckelberry : 2/2/2007 9:33:06 AM

Of course, we're now seeing weakness. Re-entry if we stay under yesterday's highs (12726).

Marc Eckelberry : 2/2/2007 9:31:18 AM

For those who stayed in at the wide stop, the YM trade was stopped out overnight (-40).

Keene Little : 2/2/2007 9:30:44 AM

I've mentioned many times in the past how there are several Fib projections, based off the moves up since October 2002 and August 2004 that point to the SPX 1450 area as a potential high for the bull market. As we move in closer to that level I like to watch the developing pattern to see if the short term pattern supports that. This SPX 120-min chart shows some interesting Fib correlation and the strong Fib relationships between the moves since the November low. Link

It's a little messy but I show 3 different projections and they all line up essentially between 1447 and 1448. That's tight. Wave-(v) on the chart (the move up from the January low) = wave-(i) at that level. Wave-(v) = 62% of waves (i) through (iii), a very common relationship in an ending diagonal (ascending wedge), and in wave-(v) we have equality between wave-a and wave-c at the same level. The question this morning is whether we're going to see this little throw-over above the wedge result in a drop back down inside which could be our next sell signal.

Keene Little : 2/2/2007 9:19:16 AM

This is the SPX 15-min chart I showed at the end of the day yesterday and with the negative divergence at the afternoon high, and potential ascending wedge, it would be natural to see a small pop above it and then a pullback (hence the gap n crap). I show a pullback and then final push higher into the end of the day today, or more than likely into Monday of next week. Link

But if we see price at any time start to impulse down, and especially with a break below 1436 then that will be a heads up that we may have already topped. A break below 1426 would confirm it (with a drop below the high of wave-1). In my opinion we're too close to a potentially important top and the end of this wave count to screw around with the upside now.

Keene Little : 2/2/2007 9:13:17 AM

The closer SPX gets to 1450 the more we're in the "zone". There is such a strong zone of Fibonacci resistance in this area (1447-1455) that I'd be tempted to lay on a bunch of shorts based on that alone. It's a time for much greater caution if you're playing the long side.

Keene Little : 2/2/2007 9:10:33 AM

After the 8:30 reports ES shot up to its daily R1 at 1454.75 and stopped. Now the question is whether or not we'll get follow through. Linda mentioned in her Wrap last night that she saw the possibility for a gap n crap in the SPX. I'm seeing the same possibility so be careful about the opening this morning.

Jane Fox : 2/2/2007 9:03:44 AM

$ just broke its ovnernight lows and so does Gold. These two usually move in opposite directions so something is going on that we just may not be aware of yet.

Jane Fox : 2/2/2007 9:01:21 AM

I'm not sure what spooked the Gold market. It wasn't the 8:30 payroll report because its big drop started at around 8:45EST well after the 8:30 economic report and gold isn't affected by these reports too much anyway. The $'s reaction to the report was a great big yawn another reason to believe the report did not affect Gold. Something else is afoot here.

Crude had a bullish overnight session with higher highs and lows and I suspect it will break its overnight highs. soon.http://www.optioninvestor.com/premium/mm/chartlink.aspx?mm=&Path=/oin/mm/chartlink/600_02022007055501

Jane Fox : 2/2/2007 8:53:32 AM

Market really like what the Labor Department had to say at 8:30. All markets broke their respective PDHs except poor ol' NQ. Link

Jane Fox : 2/2/2007 8:45:49 AM

WASHINGTON (MarketWatch) -- U.S. nonfarm payrolls increased by 111,000 in January, the Labor Department reported Friday.

The jobless rate ticked up to 4.6% in January, marking the highest rate since September.

The increase in payrolls was below the 170,000 that had been anticipated by economists surveyed by MarketWatch. The unemployment rate had been expected to hold steady at 4.5%.

Meanwhile, payrolls growth for the fourth quarter was stronger than expected. The government raised its estimate of job growth in the October-through-December quarter by a net 104,000 jobs. The report includes annual benchmark revisions.

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