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Keene Little : 2/5/2007 11:59:10 PM

Tuesday's pivot table: Link and Link

OI Technical Staff : 2/5/2007 9:59:59 PM

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Marc Eckelberry : 2/5/2007 6:16:01 PM

They smoothed out ISEE and it closes at 146, still optimistic, but not quite a toppy as a +200 close. YM and ES make lower highs and lower lows. I might exit the trade before CSCO tomorrow if there is no cushion.

Jeff Bailey : 2/5/2007 5:33:44 PM

Closing Internals found at this Link

Jeff Bailey : 2/5/2007 4:37:52 PM

Closing U.S. Market Watch found at this Link

Keene Little : 2/5/2007 4:16:26 PM

With the continuation of what looks like a 4th wave correction, as labeled on this SPX 30-min chart, we could see another small pullback tomorrow morning to finish it and then finally give us the 5th wave up. I was hoping we'd get that 5th wave today but I should have known better--this market is taking forever to do anything. Link

The one warning for anyone hoping to catch the next small leg higher--we might not get it. It's possible the choppy rise higher from this morning's low is some kind of ending diagonal for the 5th wave which will truncate near 1450-1451 and then start heading lower. A break below this morning's low, that stays below, would be a warning that a top has been made.

Jane Fox : 2/5/2007 4:11:11 PM

I don't see any big economic reports out tomorrow.

Jeff Bailey : 2/5/2007 4:28:52 PM

5-year Yield ($FVX.X) finished down 2.2 bp at 4.796%.

Jeff Bailey : 2/5/2007 4:28:48 PM

Citigroup Prices $1.25B 10-year Debt at 5.55%; Coupon 5.50%; 74 bp over Treasurys

Keene Little : 2/5/2007 3:59:01 PM

Here are a couple of GOOG charts, again following the format I showed for the NDX and RUT today. The daily chart shows two potential wave counts, each showing more downside potential before either setting up the next rally or else dropping through support towards its 200-dma at 427. As long as price stays above 450 then I'd say the chances of a bounce from there are very good. Where that bounce gets to will be the next question. Link

The current pullback could be finishing up an A-B-C pullback as I mentioned earlier today and if so then we should look for another rally leg to get through 506 to confirm the bullish count. Alternatively, in light green on this 120-min chart, we could see price drop a little further before finding better support near 450. Link

And then the Bearish wave count as shown on this chart suggests either a sraight drop from here, in a strong 3rd wave down, or else a bounce first to tag its broken uptrend line from September 2006 (could get back up near 490 in the process) before rolling over hard: Link As GOOG works its way lower in the bearish wave count, a rally up through previous bounce highs is when the bearish wave count gets violated (hence the make or break symbol located at those highs).

Marc Eckelberry : 2/5/2007 3:29:02 PM

Back for a sec. Short YM 12698, leave the stop at 12728 for the overnight session. VIX was not confirming that new high and we are back in the wedge. NQ still having trouble with its 50 dma. NDX 1800 seems to be the cut-off. That IBM rally is getting a little silly, 12 up days without a pullback. With ISEE now at 200 (intraday range 197/225), we are getting very near a market top and a significant one. These little dinky upside moves are adding negative RSI divergences.

Keene Little : 2/5/2007 3:27:04 PM

Definitely a day of stagnation with the indices hovering around the flat line all day. Still looking like it could be a 4th wave correction with the potential to either pull back a little further or take off in wave-5 at any time. I don't see a clear enough setup on either side to warrant the risk of a trade.

Jeff Bailey : 2/5/2007 3:21:34 PM

BIG 6 all green with IBM +1.14%; then UTX -0.32%, JNJ -0.37%, PG -0.27%, CAT -1.10%.

Jeff Bailey : 2/5/2007 3:19:59 PM

Sure didn't think YM would slip back under DAILY Pivot.

YM 12,697 ... afternoon low still 12,694

Jeff Bailey : 2/5/2007 3:18:06 PM

The IBM Feb $100 Calls (IBM-BT) showing 1,422 traded on CBOE with dn/up 38:104. All market makers show 3,122 contracts traded.

Jeff Bailey : 2/5/2007 3:16:09 PM

IBM $100.26 +1.09% ...

Jeff Bailey : 2/5/2007 3:15:20 PM

YM long stopped alert 12,694 ... session high still 12,710.

Jeff Bailey : 2/5/2007 3:12:18 PM

03:00 Internals found at this Link

Jeff Bailey : 2/5/2007 3:02:09 PM

03:00 Market Watch found at this Link

Jeff Bailey : 2/5/2007 2:49:52 PM

US Oil Fund (USO) $48.98 -0.72% ...

Jeff Bailey : 2/5/2007 2:49:27 PM

DOE's Bodman: US DOE Mulling Creating Ethanol Reserve

Jeff Bailey : 2/5/2007 2:41:58 PM

IBM $100.28 +1.11% ... could get some naked $100 call squeeze action going.

Jeff Bailey : 2/5/2007 2:40:30 PM

YM long raise stop alert .... to 12,694

YM 12,709

Jeff Bailey : 2/5/2007 2:36:28 PM

BIX.X 406.01 -0.05%

BKX.X 118.64 +0.07%

Jeff Bailey : 2/5/2007 2:35:41 PM

Fed Survey: Banks Say US Demand For Most Loan Types Weaker

DJ- Banks operating in the U.S. say demand for most types of loans has weakened in recent months, and credit quality is likely to suffer somewhat this year for both businesses and consumers, according to a Fed study released Monday.

On balance, banks said changes in their lending standards have been mixed in recent months, while loan demand has been "somewhat weaker," according to the Fed's latest quarterly survey of senior loan officers.

In a special set of questions, the Fed asked about the outlook for credit quality for the full year. "Considerable net percentages of both foreign and domestic institutions reportedly expect credit quality on loans to businesses and households to deteriorate somewhat in 2007," the Fed said.

The net fraction of banks expecting credit quality deterioration was greater than a year ago when the same question was posed about the outlook for 2006, it said.

The latest Fed study was based on a survey of 57 U.S. banks and 22 foreign banks operating in the U.S.

Jane Fox : 2/5/2007 2:32:40 PM

The AD line at -306 and an AD volume that lacks direction are the best indicators that I have telling me today is not a good day for trading. These two need to be either bullish or bearish before I put my money on the line and today they have been neither.

Keene Little : 2/5/2007 2:28:55 PM

After holding its 50-dma on the two most recent tests--in December and January--MSFT has dropped sharply through that support level today, now down -2.5%. Another general taken out and shot for deserting his troops. If we see more of these large cap tech stocks getting punished while the troops still run higher with abandon, I'd say you better abandon your long positions.

GOOG is also down -2.4% today and has broken its uptrend line from September. I'm working on its charts but very quickly it's possible GOOG is finishing an A-B-C downward correction from the January high (two equal legs down is near 470 and that's where GOOG is trying to hold on here). So be careful if you're trading this one.

Jeff Bailey : 2/5/2007 2:27:43 PM

IBM alert $100.15 +0.98% ...

Jeff Bailey : 2/5/2007 2:25:06 PM

BIIIIG volume build on IBM last 20-minutes. Bulk of Call OI is $100 and $105

Jeff Bailey : 2/5/2007 2:22:03 PM

IBM $100.02 +0.85% .... WEEKLY R1 just above at $100.15.

Jeff Bailey : 2/5/2007 2:19:43 PM

YM long adjust stop alert .... to 12,687 ... from 12,690.

YM 12,698.

Marc Eckelberry : 2/5/2007 2:19:19 PM

Conservative traders might want to lower the stop, but we could have a short squeeze that reverse rather quickly, so up to you and your risk profile. I have to step away.

Marc Eckelberry : 2/5/2007 2:18:07 PM

Old wedge resistance at 12702 is holding, so we stay short.

Marc Eckelberry : 2/5/2007 2:16:32 PM

Probably one lower high from Friday at YM 12725 or so in the cards if bulls make a run.

Jeff Bailey : 2/5/2007 2:16:23 PM

YM 12,704 ... Day Trader's 5-minute interval chart at this Link

Marc Eckelberry : 2/5/2007 2:15:24 PM

The one thing that does worry me is the selling we had Friday at the close, at exactly this spot and I am not sure the market will make it that easy and repeat the same pattern. Fell free to exit, it's a toss up. I think we are headed for 12585/12600 soon and I will stick to that swing trade. I am trying to steer clear of daytrading this for the monitor, but there are plenty of scalps either way.

Marc Eckelberry : 2/5/2007 2:12:33 PM

VIX at 52% daily range is not confirming ES at 86%. So I still favor the short side. The VIX should be at 15%.

Marc Eckelberry : 2/5/2007 2:08:43 PM

Still rough for NQ that 50 DMA.

Jane Fox : 2/5/2007 2:05:51 PM

TICKS +1000

Marc Eckelberry : 2/5/2007 2:05:28 PM

NQ holds the pivot and they are going for the 50 dma again (1808.50). The fact that the COMP held 2469 this morning has attracted some buyers. But we still have 20 DMA at 1811.50. Interesting to see what happens.

Jeff Bailey : 2/5/2007 2:04:48 PM

YM Long alert ... go long here at 12,704 , stop 12,690 , target 12,750

Keene Little : 2/5/2007 2:03:02 PM

Here are some RUT charts along the same lines as the NDX charts I posted earlier today. The daily chart shows the two potential EW counts as I currently see them. Link

There could be a slightly deeper pullback before seeing the index press higher again (and it could rally a little higher before pulling back so the small caps index is risky at the moment for either side). As soon as the RUT rallied to a new high last week it opened up the probability for a continuation higher into the middle of February if not into March. That's shown in this 120-min chart: Link

I don't expect to see a decline from here that drops below 775 but if that were to happen then the bullish wave count would be invalidated and I'd have to reassess. So that's the current make or break level. Until that happens I see this index as a buy-the-dips opportunity.

Jeff Bailey : 2/5/2007 2:03:01 PM

US Oil Fund (AMEX:USO) $48.98 -0.72% ... after session high of $49.95 (see last week's commentary/analysis).

Jeff Bailey : 2/5/2007 2:00:47 PM

Nymex Crude Dips Below $59; Failed Rally, OPEC

DJ- Crude oil futures dipped below $59 a barrel Monday, dropping after prices failed to rally above $60 and after a report Nigeria's oil minister said OPEC will probably keep output unchanged at its next meeting if prices hold up.

"At the March meeting, if things stay the way they are now with some slight improvement (in the price), we just might maintain the cut...I do not think we will be reducing again so soon," Reuters quoted Nigerian oil minister Edmund Daukoru as saying.

Prices had risen as high as $59.95 a barrel in early floor trading as icy temperatures in the U.S. Northeast continued to push up heating oil demand.

The front-month March light, sweet crude contract on the New York Mercantile Exchange was up 5 cents at $59.07 a barrel after earlier hitting its highest level since Jan. 3. Prices briefly fell below $59 a barrel. Brent crude on the ICE futures exchange rose 4 cents to $58.45 a barrel.

"We're seeing technical selling after we tried to break $60, but couldn't," said Aaron Kildow, a broker at Prudential Financial in New York. Kildow said Daukoru's comments were weighing on prices, but "between the weather and OPEC (cuts starting this month), I think people are looking to buy the dips."

The National Oceanic and Atmospheric Administration is forecasting below-normal temperatures in the U.S. Northeast, which is responsible for 80% of U.S. heating oil use, until at least Feb. 18. Heating fuel demand is expected to be 18% above normal in New England and 27% above normal in the Middle Atlantic. The two areas make up the world's biggest heating oil market.

Front-month March heating oil was up 50 points, or 0.3%, at $1.689 a gallon. March reformulated gasoline blendstock for oxygen blending, or RBOB, fell 1.03 cents, or 0.7%, to $1.5626 a gallon.

Traders also eyed developments in Nigeria, where two main oil-worker unions called off a strike pending a meeting Monday with President Olusegun Obasanjo.

Jane Fox : 2/5/2007 1:50:19 PM

NEW YORK (MarketWatch) - The U.S. dollar has been the leading international reserve currency since the end of World War II.

But its share of official reserves "has been volatile," according to a quarterly report released by the Bank for International Settlements last September.

For instance, in the 1970s, more than 70% of foreign currency reserves were held in U.S. dollar-denominated assets. The dollar's share dropped to less than 50% by the end of the 80s, before regaining ground and peaking at about 70% in 2001, according to BIS data.

The euro is the second-largest reserve currency in the world, with the share of euro holdings in reserves standing at about 25% in 2006.

The yen's share of reserves has steadily declined since the 1990s from a high of over 10% to less than 5% by 2006, and as a result, the pound has recently replaced the yen as the third largest currency in reserves.

The Swiss franc, the last of the major five, has fallen out of favor since the 1970s, with its share falling to less than 1% last year.

Jeff Bailey : 2/5/2007 1:53:18 PM

US 6-MONTH BILLS: 4.955%; 98.63% At High

DJ- The U.S. Treasury awarded $15.00 billion in six-month bills at Monday's auction at a high rate of 4.955%.

The Treasury received bids totaling $45.17 billion and accepted $15.00 billion, including $1.96 billion of noncompetitive tenders. The dollar price was 97.494972 and the investment rate, or bond-equivalent return, was 5.153%.

The Treasury also sold $225.0 million of bills to foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 3.01, Treasury said.

Tenders submitted at the high yield were allotted 98.63%.

The median rate was 4.950%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 4.940%.

Treasury received $5.30 billion worth of indirect bids, which include foreign and international monetary authorities placing bids through the New York Federal Reserve Bank.

Treasury accepted $4.24 billion worth of the indirect bids.

The Federal Reserve purchased $6.30 billion in bills for its own account in Monday's three- and six-month bill auctions. When the auction was announced, the Fed held $17.68 billion of maturing bills.

The bills awarded to the Federal Reserve are in addition to the public offering amount.

The high rate was down from 4.980% at the previous six-month bill auction.

The high rate was the lowest since the rate of 4.950% at the six-month bill auction on Jan. 16, 2007.

The issue is dated Feb. 8, 2007, and matures on Aug. 9, 2007.

The CUSIP number on the six-month bill is 912795ZU8.

Keene Little : 2/5/2007 1:34:24 PM

It's looking like the 4th wave correction that started on Friday may be continuing. These are not fun patterns to trade and best left alone. If it is a 4th wave then we'll have to wait until another day or so (and potentially a little deeper pullback) before getting the final 5th wave up. Still nothing that tells me I should be thinking aggressively short. There could be a scalp short in here but that's a little dicey at the moment.

Marc Eckelberry : 2/5/2007 1:32:13 PM

Now we chop above pivot. But bulls have lost an important battle twice today with NQ. A close above 1812 negates the bearishness.

Marc Eckelberry : 2/5/2007 1:31:25 PM

And there we go. Traders need to learn how to read Market depth if you want to see likely direction during a coil.

Jeff Bailey : 2/5/2007 1:31:07 PM

IBM $99.99 +0.83% ... Closed $99.45 on 01/18/07, just prior to earnings.

Jeff Bailey : 2/5/2007 1:28:53 PM

YM 12,694 ... slips back under DAILY Pivot and correlative WEEKLY 38.2% after session high of 12,708.

Marc Eckelberry : 2/5/2007 1:25:15 PM

And another failure at NQ 50 dma and 20 dma. The coil should break to the downside, especially seeing the oversold VXN conditions.

Jeff Bailey : 2/5/2007 1:20:26 PM

01:00 Internals found at this Link

Jeff Bailey : 2/5/2007 1:03:10 PM

01:00 Market Watch found at this Link

Keene Little : 2/5/2007 1:02:08 PM

Lunch time is over and apparently it's time to buy.

Jeff Bailey : 2/5/2007 12:59:54 PM

Intl. Business Machines (IBM) $99.86 +0.69% ... February "Max Pain" Theory currently $100.00 ($5 increments)

Jeff Bailey : 2/5/2007 12:49:33 PM

iShares Lehman 20-year (AMEX:TLT) 87.36 +0.18% ... February "Max Pain" Theory currently $87.00 ($1 increments)

Jeff Bailey : 2/5/2007 12:45:54 PM

Schlumberger (SLB) $64.94 -0.27% ... February "Max Pain" Theory currently $60.00 ($2.50 increments)

Jeff Bailey : 2/5/2007 12:32:19 PM

February "Max Pain" Theory Levels

DIA= $125.00 ($1 increments)

SPX= 1,425 (5-point increments)

SPY= $143 ($1 increments)

OEX= 665 (5-point increments)

NDX= 1,800 (25-point increments)

QQQQ= $44.00 ($1 increments)

Keene Little : 2/5/2007 12:29:27 PM

The lunch time snooze is upon us and the small gyrations of the morning have now flatlined. The patient looks barely alive here.

Jeff Bailey : 2/5/2007 12:26:45 PM

APPLE, BEATLES SETTLE TRADEMARK BATTLE

DJ- Apple says it has reached a new trademark and licensing agreement with The Beatles' Apple Corps., that replaces an agreement between the parties from 1991, and it calls for Apple to own all of the trademarks related to 'Apple.'

AAPL $84.99 +0.28% ...

Jeff Bailey : 2/5/2007 12:22:00 PM

CHRYSLER MAY CUT 10,000 JOBS

DJ- DaimlerChrysler executives are working on transforming Chrysler Group into a smaller, more efficient auto maker with closer ties to its parent company and its Mercedes-Benz luxury division, Detroit News reports. Plan includes slashing more than 10,000 jobs.

DCX $62.51 -0.74% ...

Jeff Bailey : 2/5/2007 12:18:22 PM

Dow's BIG 10 ... IBM $99.79 +0.62%, BA $90.71 +0.74%, MO $86.60 +0.05%, XOM $75.24 -0.39%, MMM $74.15 +0.37%, AIG $69.28 +0.30%, UTX $67.77 -0.35%, JNJ $66.27 -0.46%, PG $65.20 -0.22%, CAT $64.51 -1.13%

Jeff Bailey : 2/5/2007 12:15:47 PM

Dow Industrials (INDU) 12,659 +0.04% ... DAILY Pivot here. DAILY S1 provided morning support.

Jeff Bailey : 2/5/2007 12:12:46 PM

ROYAL CARIBBEAN SWINGS TO 4Q PROFIT

DJ- Cruise operator posts net income of $46.6 million, or 22c a share, helped by stronger cruise prices and flattening fuel costs. Firm sees 1Q earnings well below analysts' estimates, sending shares down 4%.

RCL $43.64 -4.79% ...

Jeff Bailey : 2/5/2007 12:10:48 PM

SEARS SEES CHARGE ON TEXAS JURY BOND DECISION

DJ- Sears will appeal decision that finds a unit was in breach of contract when it redeemed certain bonds following the sale of its credit-card business. Sears expects to take a 29c-a-share charge for ruling that requires it to pay bondholders about $73.5 million.

SHLD $178.08 +0.53% ...

Jeff Bailey : 2/5/2007 12:09:18 PM

WAL-MART JANUARY SAME-STORE SALES GAIN 2.2%

DJ- Wal-Mart Stores 2.2% January same-store sales growth beats its own conservatively low projection of a 1%-2% gain. Retailer's January result is the latest in a string of paltry monthly results, including a 1.6% gain in December, a 0.1% decline in November.

WMT $48.77 +1.43% ... #15 weighting for INDU/DIA/YM

Jeff Bailey : 2/5/2007 12:07:07 PM

HUMANA NET SOARS ON MEDICARE GROWTH

DJ- Health benefits group's earnings more than double to $155 million, or 92c a share, as revenue jumps 53% to $5.66 billion, helped by strong growth in Medicare membership.

HUM $57.71 +0.68% ...

Jeff Bailey : 2/5/2007 12:01:33 PM

SIMON AIMS TO LURE MILLS FROM BROOKFIELD

DJ- Simon Property and hedge fund Farallon Capital offer $1.56 billion for Mills Corp., a move designed to derail a $1.35 billion agreement with Brookfield Asset Management. Mills jumps 13%, tops new $24 a share bid.

SPG $115.57 +0.53% ...

MLS $25.42 +14.76% ...

BAM $49.05 +0.36% ... (see also 11:56:45)

Jeff Bailey : 2/5/2007 11:56:45 AM

BROOKFIELD ASSET TO BUY LONGVIEW FIBRE

DJ- Brookfield Asset Management agrees to buy Longview Fibre in deal worth $2.15 billion, including assumed debt. Bid values Longview shares at $24.75 each, compared with Friday's close of $21.01.

BAM $49.02 +0.30% ...

LFB $24.46 +16.42% ...

Jeff Bailey : 2/5/2007 11:54:56 AM

VORNADO OFFERS EQUITY OFFICE QUICKER PAYOFF

DJ- In its latest bid to win the nation's largest publicly held portfolio of office buildings, Vornado says it will accelerate payment of the cash portion of its $23.24 billion offer for Equity Office Properties Trust.

VNO $125.22 -0.10% ...

EOP $55.50 +0.19% ...

Jeff Bailey : 2/5/2007 11:52:27 AM

LEAR GETS $36 A SHARE OFFER FROM ICAHN GROUP

DJ- Investor Carl Icahn is offering to acquire auto parts maker Lear for $36 a share, or about $2.75 billion, through his affiliate group, American Real Estate Partners. Lear shares jump 12%, topping offer price.

LEA $38.89 +12.17% ...

ACP $105.00 -0.92% ...

Marc Eckelberry : 2/5/2007 11:47:54 AM

BA holding the DOW up well, thanks to the new massive defense budget. Link

Jeff Bailey : 2/5/2007 11:46:57 AM

STATE STREET TO BUY INVESTORS FINANCIAL

DJ- State Street agrees to acquire Investors Financial Services for nearly $4.5 billion in stock in a deal that combines two firms providing a variety of services to institutional investors. Deal values the company at a 38% premium.

STT $67.75 -5.57% ...

IFIN $60.45 +28.75% ...

Jeff Bailey : 2/5/2007 11:40:39 AM

US ISM SERVICES INDEX RISES TO 59

DJ- Institute for Supply Management's non-manufacturing index increases to 59.0 in January from a revised 56.7 in December. Wall Street had expected a reading of 57.0. ISM says report suggests 'continued economic growth.'

Jeff Bailey : 2/5/2007 11:39:59 AM

TRIAD HOSPITALS AGREES TO BE TAKEN PRIVATE FOR $4.7B

DJ- Triad Hospitals agrees to be acquired by affiliates of CCMP Capital Advisors and GS Capital Partners at a price of $50.25 a share in cash, a premium of 16% over Friday's closing price. Deal carries total value of $6.4 billion, including $1.7 billion in debt.

TRI $49.80 +15.00% ...

Keene Little : 2/5/2007 11:30:18 AM

One thing to keep in mind is that the pullback/consolidation that started on Friday could continue for another day or so before we get the 5th wave up later this week to complete the rally from January 26th. I don't see anything yet that tells me I should be getting aggressively short. It would take a break below SPX 1440 before I started to feel more bearish but it needs to get below 1427 before the EW count would suggest we've seen a high. It continues to be a time for caution. Link

Jeff Bailey : 2/5/2007 11:28:24 AM

11:15 Internals found at this Link

Marc Eckelberry : 2/5/2007 11:29:08 AM

If the VIX starts holding above 10.64, the swing short should gain steam and the 12585 YM target could be attainable by tomorrow. Above 10.64, VIX could be headed to 11.68. Of course, bulls could reverse and close higher, but there is not really any fundamental news to drive that through. ISM news is either inflationary or the new orders puts doubt in the headline. Either way, it's looks like a lose lose.

Jeff Bailey : 2/5/2007 11:17:18 AM

11:15 Market Watch found at this Link

Marc Eckelberry : 2/5/2007 11:08:10 AM

The 97 read was the only thing making me doubt being short, but that changed dramatically this morning. A 225 read is higher than the highest read last year in May. The market is an automatic short on +200 reads, but they have to stick at the close. Keep an eye on that.

Marc Eckelberry : 2/5/2007 11:05:54 AM

ISEE not confirming Friday's low read and now at 52 week high, a very bearish indicator: Link Link

Jane Fox : 2/5/2007 10:54:22 AM

It is hard to believe that I have been doing this job since 1999. Wow! Who would have ever thunk it.

Jane Fox : 2/5/2007 10:51:58 AM

I remember chat rooms, which I guess we call blogs now, where the members would sign on and the first thing they would ask is "What is IPOing today."

Jane Fox : 2/5/2007 10:50:43 AM

With all these IPOs you'd think it was 1999 all over again. Remember the fun we had with IPOs back then?

Jane Fox : 2/5/2007 10:49:31 AM

NEW YORK (MarketWatch) - Fortress Investment Group and National CineMedia mark the richest in a fusillade of up to 12 initial public offerings on the calendar this week as the first big batch of 2007 IPOs attempt to tap into the bull market on Wall Street.

With the Dow Jones Industrial Average trading at record levels and the Nasdaq near six-year highs, IPO bankers are hoping to debut more deals this week than the 10 IPOs from the entire month of January.

The $600 million IPO from Fortress Investment Group will make history as the first hedge fund firm to go public in the U.S. in a high profile debut that will grab attention for the 2007 IPO market.

Last year, Chipotle Mexican Grill (CMG) brought sizzle to the IPO market by becoming the first U.S.-based IPO in more than four years to double in its first day of trading.

For this week, National CineMedia, a firm that sells advertising and conferencing services in movie theaters, weighs in as the richest deal with expected IPO proceeds of $722 million.

Cellcom Israel plans to raise $323 million and JA Solar Holdings of China plans to raise $202 million as IPOs from the telecommunications and alternative energy sectors respectively.

Radio surgery equipment maker Accuray plays to raise $200 million as an IPO from the medical device arena.

Networking technology firm Switch & Data plans to fill an IPO purse with $175 million. The biotech sector is represented by a $100 million IPO from 3SBio, a $90 million IPO from Synta Pharmaceuticals and a $68 million deal from Optimer Pharmaceuticals.

Other IPOs include U.S. Auto Parts Network, VeriChip, and Mellanox Technologies.

Keene Little : 2/5/2007 10:49:24 AM

Futures premium over cash:

YM -- +30
ES -- +3.50
NQ -- +9
ER -- +2.80

Marc Eckelberry : 2/5/2007 10:50:45 AM

Be careful chasing INTC here. Another failure at 21.37 would get us down to neckline around 20 and confirm that pretty obvious H&S on the daily. If it closes above 21.37, fine, but for now, caution, especially with MSFT and AAPL in the red.

Keene Little : 2/5/2007 10:46:06 AM

The DOW didn't pull back quite as much as SPX and notice that it stopped exactly at the bottom of its parallel channel (using the wave count for the channel). It's upside Fib targets didn't change much--now 12700 and then 12743. As with SPX this could finish up today if the rally can get some legs from here. Link

Marc Eckelberry : 2/5/2007 10:46:03 AM

Watch VXN 10 dma R at 17.28. Bulls are still okay below that.

Marc Eckelberry : 2/5/2007 10:44:52 AM

NQ did a critical failure this morning at downward trendline resistance of the past few days as well as 50 and 20 DMA. MSFT and GOOG are just too weak. At least for now. In any case, 1815 looks tough and that should spill over into the rest of the market if 61.8% at 1808.25 can't get a 5 mn closing candle.

Marc Eckelberry : 2/5/2007 10:40:48 AM

Bonds are bidding on the ISM new order weakness. Competition is building for stocks, although some safe parking is occurring on the DOW. But those yields have become attractive.

Keene Little : 2/5/2007 10:40:11 AM

It looks like the pullback could be finished. If we're now starting the 5th wave up (for the rally from January 26th), the two upside Fib projections now change to SPX 1450.82 and 1453.83 (for the 5th wave to be 62% and equal to the 1st wave). That would be either a test of Friday's highs or up into the 1452-1455 zone. Any drop back below this morning's low would immediately look more bearish. Here's an updated SPX 15-min chart: Link

Marc Eckelberry : 2/5/2007 10:39:32 AM

Some of you get out for +4 if worried. But R1 is at 12727 and Friday had some heat at 12726, so 12728 is a reasonable stop.

Marc Eckelberry : 2/5/2007 10:37:55 AM

YM has not tested its weekly pivot yet, whereas NQ did.

Marc Eckelberry : 2/5/2007 10:37:33 AM

Alert: Raise stop YM short 12698 back to 12728.
I don't want to be taken out by the noise.

Jane Fox : 2/5/2007 10:34:32 AM

YM is the first market to make new daily highs.

Jane Fox : 2/5/2007 10:31:12 AM

TICKS +1000

Jane Fox : 2/5/2007 10:30:58 AM

TICKS +800 See the bulls were lurking.

Jane Fox : 2/5/2007 10:23:27 AM

SAN FRANCISCO (MarketWatch) - Apple Inc. and the Beatles' Apple Corps Ltd. on Monday finally found a way to work things out in the long-running trademark dispute over their shared iconic name.

Apple (AAPL) , which triggered the latest battle in the war with its entry into the digital music business, said it and Apple Corps reached a settlement that gives the maker of iPods and personal computers ownership of the name and the apple logo.

Apple will also license certain trademarks back to Apple Corps, which the Beatles founded in the late 1960s to oversee many of their business and legal matters.

Financial terms of the deal weren't disclosed, and no information was given regarding whether Beatles songs will soon be available for sale on Apple's iTunes Music Store. The one-time Fab Four is among a handful of famous acts that have not yet allowed their music to be sold in digital form.

Keene Little : 2/5/2007 10:16:17 AM

The Trannies could be giving us a good heads up for the market as well. From an EW perspective it's looking particularly vulnerable. This weekly chart shows the wave count from March 2003: Link

I show divergences on MACD (and RSI) between the 3rd and 5th waves in the count and this is what you want to see to help build confidence in the count. Often times you can label a wave pattern just by putting the labels on the MACD peaks and not even bother with the price chart. Another thing I look for are fractals since the wave pattern often repeats in different time frames.

If you look at the wave count for wave-(5), the move up from June 2005, you can see a small wave-2 and a larger wave-4. Now look at this daily chart which shows the wave count for wave-5 of (5), the move up from August 2006: Link

The pattern for this 5th of the 5th wave is the same--small 2nd wave and larger 4th wave with similar shapes. We don't have as good a MACD divergence signal on the daily chart but it's probably due to the extension of the 5th wave. But now look at this 120-min chart for the 5th of the 5th of the 5th wave, the move up from December 2006--same fractal pattern between the 2nd and 4th waves (also showing a 5th wave extension and no MACD divergence): Link Between the wave count, the MACD divergences on the weekly chart, these fractals and a test of the May 2006 high this looks like a very good short setting up. Short term, like the broader market, it looks like we could get one more small push higher to finish the whole thing off.

Jeff Bailey : 2/5/2007 10:12:37 AM

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

Jane Fox : 2/5/2007 10:10:58 AM

These certainly support a short position but expect to take some heat if short because I think the bulls are lurking. Link

Jane Fox : 2/5/2007 10:08:43 AM

AD line is now -673 and making new daily lows along with the AD volume. I would not want to be long here.

Jane Fox : 2/5/2007 10:07:46 AM

Dateline WSJ - WASHINGTON -- President Bush sent Congress a $2.9 trillion fiscal 2008 budget that assumes a significant increase in tax revenues to help offset new spending and still leave a modest surplus of $61 billion by 2012.

Domestic appropriations are largely frozen at current levels, and Mr. Bush is proposing $95.9 billion in savings over five years from major benefit programs including Medicare, the federal health-care program for the elderly and disabled. Border security, National Science Foundation research, and foreign aid remain priorities. But most striking are soaring defense expenditures, reflecting both the high costs of the war in Iraq and increased funds for weapons.

In fiscal 2008, beginning Oct. 1, the administration is requesting $481.4 billion for the Pentagon, an increase of $49 billion or 11.3%, that doesn't count two additional requests for Iraq and the larger global war against terrorism. When these are included, the president is asking for a total of $716.5 billion to carry the military through Sept. 30, 2008.

Jane Fox : 2/5/2007 10:05:42 AM

WASHINGTON (MarketWatch) -- The services sectors of the economy grew for the 46th consecutive month in January at a slightly faster pace than in December, the Institute for Supply Management reported Monday. The ISM nonmanufacturing index rose to 59.0% from 56.7% in December. Economists were expecting an increase to 57.0%. Readings over 50% in the diffusion index indicate growth in the sector. The new orders index was essentially flat at 55.4% vs. 55.6% in December. The employment index fell to 51.7% from 53.2%. The prices paid index fell to 55.2% from 59.&% in December

Jane Fox : 2/5/2007 10:05:21 AM

VIX is now making new daily highs as AD volume making new daily lows. Seems the ball is getting passed from the bulls to the bears and then back again. Or neither team has the ball.

Jeff Bailey : 2/5/2007 10:02:19 AM

10:00 Market Watch found at this Link

Jeff Bailey : 2/5/2007 9:59:08 AM

Last 3 Weekly Pivot Matrix found at this Link

Marc Eckelberry : 2/5/2007 9:58:45 AM

Alert: Short YM 12698, lower stop to 12708.

Jeff Bailey : 2/5/2007 9:50:49 AM

Weekly/Monthly Index Matrix found at this Link

Jane Fox : 2/5/2007 9:48:28 AM

AD line is now +45, not a number that would be installing confidence in the bulls.

Jane Fox : 2/5/2007 9:47:04 AM

Though the VIX opened above its PDH its is now bullish because it is making new daily lows supporting AD volume's new daily highs.

Jane Fox : 2/5/2007 9:41:48 AM

YM has tested its PDL and found support.

Jane Fox : 2/5/2007 9:40:46 AM

VIX opens well above its PDH but TRIN well below its PDL. Gee I wish these two could get together.

Jane Fox : 2/5/2007 9:38:44 AM

AD line neutral to bearish -481 and AD volume is below 0 but moving sideways. No direction yet.

Keene Little : 2/5/2007 9:38:31 AM

ES is testing its overnight low at 1449.75.

Keene Little : 2/5/2007 9:37:22 AM

In last Wednesday's Wrap I had discussed the housing vacancy rate problem and what's even more amazing than what that WSJ story mentioned is that the long term vacancy rate (for 1965-2005) averaged just 1.4%. At today's 2.7% it's nearly double. You can bet there will be some motivated sellers this spring. I continue to believe the spring season will be the "uh-oh" moment for housing. Unfortunately we're probably a long way (time and/or price) before that market is healthy again.

Jane Fox : 2/5/2007 9:31:03 AM

Dateline WSJ - Amid brightening hopes that the U.S. housing market is stabilizing, some economists are zeroing in on a piece of data that could augur badly for the consensus view: the homeowner vacancy rate.

That figure, an often-overlooked measure of how many homes for sale in the country are empty, has climbed to its highest level since the Census Bureau began tracking it four decades ago. Last week, the bureau said that in the final three months of 2006 there were about 2.1 million vacant homes for sale.

That brought the national homeowner vacancy rate to 2.7%, up from 2.0% a year earlier. Before 2006, the number had never risen above 2.0%. Like the housing economy more broadly, the measure varies by region: The South had a homeowner vacancy rate of 3.0%, the Midwest had a rate of 2.9%, the West had a 2.4% rate and the Northeast had a rate of 2.0%.

The report, which usually gets little attention, sparked fresh concerns about the housing market. Goldman Sachs economist Jan Hatzius concluded in a report last Monday that rising vacancies signal that excess housing supply continues to grow -- and that new construction has to decline further this year, even after a 13% decline in new home starts in 2006.

Meantime, J.P. Morgan economist Haseeb Ahmed said the overhang of vacant housing stock could erode existing home values as sellers slash prices to move their vacant properties. Economists fear that many vacant homes are owned by speculators who are stuck with investment properties that they can't sell and may be under increasing pressure to drop their prices. "We are concerned that there could be downward pressure on prices for awhile," Mr. Ahmed says. Link

Jane Fox : 2/5/2007 9:28:44 AM

Economic reports due out today:

10:00a.m. Jan ISM Non-Manufacturing Business Index. Expected: 57.0. Previous: 56.7

Jane Fox : 2/5/2007 9:19:39 AM

$ was strong overnight which should put downward pressure on Gold but so far it has not so maybe Crude's upward move is keeping Gold from falling. Link

Keene Little : 2/5/2007 9:16:29 AM

It was a relatively quiet overnight session with equity futures just cycling up and down in a narrow range. We could see an early dip this morning get bought (aqain) so watch for that potential.

Jane Fox : 2/5/2007 9:16:24 AM

Mostly a sideways overnight session. Link

Jane Fox : 2/5/2007 9:15:19 AM

NEW YORK (MarketWatch) -- U.S. Treasury bonds rose early on Monday, sending yields lower, ahead of the release of January data on the service sector of the economy.

The benchmark 10-year Treasury bond was up 2/32 at 98 16/32 while its yield, which moves inversely to price, fell to 4.818%.

Last week, bonds had a respite from their recent declining trend following a weaker-than-expected January employment report and after the Institute for Supply Management's January report showed the manufacturing sector contracted last month.

At 10 a.m., the ISM will report its non-manufacturing survey, which is expected to show that the services sector is expanding at an increasing rate.

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