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Keene Little : 2/9/2007 12:45:19 AM

The bounce in the DOW off Thursday's low took it right up to the 62% retracement of the decline from Wednesday's high. It then closed just under the support trend line that ran along the lows of the past week (support turned resistance?). As I've labeled it on this 30-min chart, this looks like a setup for another decline out of the gates on Friday. The setup is there so now we'll see if it works for shorts. Link

We have another interesting potential on SPX as shown on the 30-min chart here. This is speculation at the moment but it's not at all unusual to see a lot of whipsaw price action at tops as the bulls and bears duke it out (as rallies are sold into and then dips are bought). A rounding top is a bearish pattern because of this and the diamond-top pattern I've drawn on this chart shows what could happen. But any rally back above 1453 would negate this idea. Link

Keene Little : 2/8/2007 11:18:02 PM

Friday's pivot tables: Link and Link

OI Technical Staff : 2/8/2007 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The Market Monitor has been archived.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 : 2/8/2007 7:14:59 PM

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

Shoot! For months we've been reading about the pending debacle in the housing/mortgage market. Today we "got it!" VIX.X and DIA?

Jeff Bailey : 2/8/2007 6:55:48 PM

CME's November Real Estate futures Composite b/a 216.40 x 217.20 ... last 216.80

Jeff Bailey : 2/8/2007 6:53:07 PM

CME's August Real Estate futures Composite b/a 217.20 x 218.80 ... last 218.00

Jeff Bailey : 2/8/2007 6:52:02 PM

CME's May Real Estate futures Composite b/a 218.00 x 220.80 ... last 219.00.

Keene Little : 2/8/2007 6:44:06 PM

Since topping action following a very strong advance is typically a labored affair (lots of battles between bulls and bears, distribution, etc.), it's very common to see rolling tops that have a lot of whipsaw price action. A thought occurred to me about a potential diamond-top in the making as I look at the SPX. Here's an idea that I'll continue tracking on the 30-min chart. This gets negated with a rally above 1453. Link

Jeff Bailey : 2/8/2007 6:41:29 PM

Closing Internals found at this Link

Keene Little : 2/8/2007 6:32:22 PM

As per the article Jeff just referred to on housing, it now looks like the housing recovery is getting pushed out into the summer instead of the spring. Reminds me of the tech bust after the high in 2000. We constantly heard that the recovery in chip spending was 6 months out. The bulls were "6-monthed" to death and I fear the same will happen to those who are holding out for better real estate prices. It's that slippery slope of hope.

Jeff Bailey : 2/8/2007 6:31:05 PM

Large disparity between March RBOB (rb07h) which settled up $0.0518, or +3.36% at $1.5933 and April RBOB (rb07j) which settled up 3.24% at $1.7195.

May RBOB (rb07k) settled $1.7530.

Keene Little : 2/8/2007 6:31:57 PM

CME looks ready to continue lower but the bigger pattern remains in question. The bearish count shows the possibility for a small push higher, perhaps to its Fib projection at 589, before rolling over and heading down to its uptrend line from April 2005. It needs to break below that line (near a Fib projection for two equal legs down at 538) in order to kick the bearish count to the forefront. Link

The larger pattern for CME has me questioning the bearish count (but we'll let price dictate that) and there are two potential bullish counts that I currently see. While it can certainly rally directly from here I'm seeing evidence that that's not the likely scenario. It looks like we should be expecting another leg down that will either be part of a large sideways triangle (shown with dark green) or will be followed by a rally to new highs into March (light green). Link

Jeff Bailey : 2/8/2007 6:21:33 PM

March Crude Oil (cl07h) settled up $2.00, or 3.47% at $59.71.

Jeff Bailey : 2/8/2007 6:13:43 PM

Housing Market Bottoming Out? MarketWatch Link

Jeff Bailey : 2/8/2007 6:02:33 PM

Closing U.S. Market Watch at this Link

Keene Little : 2/8/2007 5:58:10 PM

The techs held on pretty well today and that turned out to be a good heads up that the broader market was not ready to sell off yet. But, somewhat similar to SPX, the bearish potential is not dead yet. While a rally above yesterday's high near 1817 would have me out of bearish plays, I have the "negation" symbol at 1830 which is when I'd be thinking more about the bullish potential:

Bearish: Link
Bullish: Link

Keene Little : 2/8/2007 5:42:41 PM

The SPX broke 1443 only briefly today so that's certainly the level the bears want to see broken and it will have to happen tomorrow if the bearish side is to win from here. Link

But today's bounce from the low has taken a lot of wind out of the bearish sails and therefore the bullish count is a distinct possibility here. Today's pullback started in a corrective fashion (initial move down is a 3-wave move) so that opens up several possibilities. We could see it chop its way lower over the next couple of weeks and then set up another rally leg or it could continue higher before pulling back. A rally above yesterday's high (1453) may not run far before pulling back again but that's the big question right now. Link

Keene Little : 2/8/2007 5:32:40 PM

Here's the update on the RUT chart. The Fib level at 816 is still holding it down and this still has the potential to roll over from here. This is the "bearish" chart even though I show the potential for the RUT to rally up to 824 before it finally tops out so be aware of that if you're in a bearish trade. Link

Because of the choppy price pattern in the RUT even a pullback from here will not necessarily be bearish, as this "bullish" chart shows. If a pullback gets underway we'll then monitor it to see if it's a choppy pullback (which would be bullish) or something more impulsive to the downside (potentially more bearish). Link

Jeff Bailey : 2/8/2007 5:27:48 PM

Per my Elk Hills number crunching ... We're not going to lose 840K bbls of oil this week, but here is how I got the numbers ...

My EIA Crude Oil Inventory (subtracting 840K) at this Link

and then my EIA Gross Inputs Link

where both are needed to derive my (Jeff's) Days of Supply and USO price benchmarks.

Jeff Bailey : 2/8/2007 5:04:18 PM

Long-term memory fading ....

Jeff Bailey : 2/8/2007 5:03:56 PM

Correction: To my earlier post that Elk Hills field was close to Santa Fe Springs. It is not!

Elk Hills field is SW of Bakersfield.

Santa Fe Springs field in SE Los Angeles.

Jeff Bailey : 2/8/2007 4:54:11 PM

US Oil Fund (USO) and same bar chart I've been showing at this Link

Then see LEVEL of RISK from 04:40:45 post.

Jeff Bailey : 2/8/2007 4:52:13 PM

"Holy Cra..." As Ray Romano's father (Everyone Loves Raymond) would have said.

Jeff Bailey : 2/8/2007 4:48:29 PM

Please note: the quick number crunching done on Elk Hills is "oil equivalent" and my figures assume "worse case" as if it were all crude oil. It is NOT all crude oil, but working with information at hand.

Jeff Bailey : 2/8/2007 4:40:45 PM

USO closed those Friday's at respective $53.58 and $54.30. These two levels would be an initial LEVEL of RISK that traders can monitor against.

Jeff Bailey : 2/8/2007 4:39:32 PM

OK ... on 12/08 and then 12/15 days of supply were respective 21.75 and 21.31.

Jeff Bailey : 2/8/2007 4:38:12 PM

Now my (Jeff's) days of supply falls to 21.31.

Jeff Bailey : 2/8/2007 4:37:29 PM

OK .. now taking the 840k/week from Elk Hills and subtracting it from last week's Oil Inventory and get an estimated weekly EIA of 323,639,000

Jeff Bailey : 2/8/2007 4:35:19 PM

21.25 to 21.29 day's supply of Crude Oil ... again, ASSUMES NO NET CHANGE in Crude Oil Stockpiles.

Jeff Bailey : 2/8/2007 4:32:35 PM

21.37, up a tad from my (Jeff's) 21.33 tabulated yesterday.

But, I would think INVERSE as this Elk Hills Supply was NOT a planned event.

So ... maybe a days decline to ...

Jeff Bailey : 2/8/2007 4:28:52 PM

If I substract the 840K/week from 15,195,000 and keep the Crude Oil Stockpiles unchanged week-to-week ... I get a days of supply equal to ...

Jeff Bailey : 2/8/2007 4:26:04 PM

106,365,000 barrels per week.

Jeff Bailey : 2/8/2007 4:25:04 PM

Wednesday's EIA report had Weekly Gross Inputs at 15,195,000/day , or ...

Jeff Bailey : 2/8/2007 4:22:54 PM

That's some "bad news" for Californian's near-term. Big field that is punched full a holes like Swiss Cheese. ~120,000 bbls/day x 7 = 840,000/week.

Jeff Bailey : 2/8/2007 4:18:22 PM

Panorama of Elk Hills field Link ... spent some hot days in these field offices.

Keene Little : 2/8/2007 4:18:24 PM

Because of the ascending wedge patterns in the DOW and SPX since last November, these are difficult to pin a wave count inside and that's why I've been trying to lay out these road maps to help identify critical levels to help guide us as to which way to swing with the market. I've got the DOW charts updated now.

The daily chart shows the two possible scenarios as I currently see them. If we topped out yesterday then we follow the red path. That bearish count gets negated with a move above yesterday's high and would confirm we're still chopping higher and looking for a top inside the wedge. A break below 12431 would confirm we've topped and we'll be on the bearish path. Link

Assuming for the moment that yesterday's high will hold (having my doubts about that at the moment) then this 120-min bearish chart will be our guide. A break below 12540 would be confirmation (with a break below today's low as a heads up that we're breaking down). I put the "negation" dot at the Fib level of 12708--any higher than that and we'd very likely be heading to 12800-12900 next. Link

If the DOW does rally above yesterday's high, confirmed with a move above 12708, then this bullish chart takes over. There are several Fib targets above us but the overlap of Fib projections at 12844 has my attention. There appears to be some very good Fib relationships between waves within the move up from November. Two equal legs up from the end of November is at 12844 and two equal legs up from January 26th is at the same 12844. So if the DOW makes it to a new high from here that's where I'd be looking for it to head towards. Link

Jeff Bailey : 2/8/2007 4:09:55 PM

Occidental declares force majeur at California field ... Hot off the press ... Link

Jeff Bailey : 2/8/2007 4:08:27 PM

Oil up on OXY shutting in 95% of its production at Elk Hills field (this is in California, just outside of Santa Fe Springs I think.)

Jane Fox : 2/8/2007 4:03:48 PM

There are no major economic reports scheduled for tomorrow.

Jeff Bailey : 2/8/2007 3:53:42 PM

Amerco (UHAL) Earnings Press Release Link

Jeff Bailey : 2/8/2007 3:41:23 PM

Oh my! ... Amerco (UHAL) $70.76 -13.70% Link ...

Jeff Bailey : 2/8/2007 3:39:21 PM

Winnebago (WGO) $34.93 +2.22% Link ...

Jeff Bailey : 2/8/2007 3:32:45 PM

Profunds Ultra Short Small Cap (UCPIX) closed 12.54 NAV at the conclusion of yesterday's trade.

Jeff Bailey : 2/8/2007 3:30:18 PM

DIA $126.43 -0.26% ... right back at its "red tomato" close.

Jane Fox : 2/8/2007 3:26:41 PM

SAN FRANCISCO (MarketWatch) -- Gold futures closed above $660 on Thursday, underpinned by a rise in energy prices and a fall of the U.S. dollar against the euro.

Gold for April delivery closed up $5.50 at $662.80 an ounce on the New York Mercantile Exchange.

Gold made a late break higher after the euro recovered at $1.30 and oil prices pushed into positive territory, said James Moore, an analyst at TheBullionDesk.com.

In the previous session, gold closed $1.40 lower at $657.30 an ounce, as a retreat in oil prices reduced the metal's safe-haven appeal. Energy prices have provided most of the impetus for gold futures in recent weeks and the surge on the energy futures market on Thursday boosted gold.

Jeff Bailey : 2/8/2007 3:23:54 PM

03:00 Internals found at this Link

Keene Little : 2/8/2007 3:14:11 PM

BTW, I really like that potential setup on the RUT. If we get a push up to near 824 by tomorrow afternoon that could be a very nice setup to get short.

Keene Little : 2/8/2007 3:11:40 PM

With the RUT climbing to a new high this afternoon that now opens up the possibility for a move up to the Fib target just under 824. This looks like a good upside target since I've got two projections now pointing at the same level. The first is based on the leg up from January 19th where wave-5 = wave-1. Within the 5th wave there would be equality in the a-b-c move at the same Fib level (it's an a-b-c move because we're in an ascending wedge). It now takes a break below 812 to negate this short term bullish wave count, hence the "negation" symbol at 812. Link

Jeff Bailey : 2/8/2007 3:06:03 PM

03:00 Market Watch found at this Link

Jane Fox : 2/8/2007 3:05:21 PM

WASHINGTON (MarketWatch) -- The Atlanta Fed bank announced Thursday that it has chosen as its new president Dennis Lockhart, a 17-year veteran of Citigroup and now a professor of international business at Georgetown University.

Lockhart worked in Atlanta for Citigroup for eight years during the early 1980s. After leaving Citigroup, Lockhart was president of Heller International Group Inc and was managing partner of a private equity firm Zephyr Management in New York.

Jane Fox : 2/8/2007 3:00:04 PM

WE are certainly in a bull market but I would wait for a pullback before putting on new positions. Link

Jeff Bailey : 2/8/2007 2:57:27 PM

New Century (NEW) $20.25 -32.85% ...

Jeff Bailey : 2/8/2007 2:56:17 PM

Bear gulp! ... RUT.X 816.90 +0.08% ...

Jane Fox : 2/8/2007 2:56:04 PM

TICKS +1000

Jeff Bailey : 2/8/2007 2:55:26 PM

QQQQ $44.54 +0.17% ...

Jane Fox : 2/8/2007 2:55:20 PM

Gold and Crude have done well today. Link

Keene Little : 2/8/2007 2:55:03 PM

The market's gone snoozeville on us. At this point I could have a strong argument for either side which means if you're not already in a position I don't see a good trade here. We're right in the middle of the day's action and either side could take the ball and run with it. And just as I was typing we got a big spike up.

Jeff Bailey : 2/8/2007 2:54:52 PM

YM alert 12,666 ... afternoon highs!

Jeff Bailey : 2/8/2007 2:54:35 PM

Lear Corp. (LEA) $40.06 -0.24% ... still halted with news pending.

Jeff Bailey : 2/8/2007 2:53:19 PM

Toyota Finds It Has To Offer Incentives To Move Prius CNN Money Story Link

Tab Gilles : 2/8/2007 2:38:13 PM

Altria (MO) Link

Jeff Bailey : 2/8/2007 2:34:18 PM

Keep an eye on the IRX.X 50.15, or 5.15% ... it has been inching up of late.

Jeff Bailey : 2/8/2007 2:31:37 PM

BHI reports 02/15/07. Consensus currently for EPS of $1.19 on Revenue of $2.46B.

Jeff Bailey : 2/8/2007 2:30:27 PM

SLB traded well after earnings.

Jeff Bailey : 2/8/2007 2:29:37 PM

Noted Dorsey's BPOILS also reversed back up to "bull confirmed" this week.

Jeff Bailey : 2/8/2007 2:28:12 PM

Within the past few sessions I posted a "blurb" from some oil service company of a DJ news headline. Think it was Noble? First thought was "rig"

Jeff Bailey : 2/8/2007 2:26:06 PM

PTR $123.89 +0.10% ... a little bit "different" animal. Bugger hasn't been able to see much above $125.00.

I nipped away at a long a couple of days ago, but like BHI better in here.

Jeff Bailey : 2/8/2007 2:24:25 PM

BHI $70.21 +0.58% ... Nat Gas still holding $7.00.

Jeff Bailey : 2/8/2007 2:23:59 PM

US Oil Fund (USO) $49.88 +3.39% ... here we gooooo?

Jeff Bailey : 2/8/2007 2:21:58 PM

Traders that may be "tapped out" in an account per my MM profiled, due to margin requirement from the NAKED XBA-OF, then buy those back for a gain, free up the cash requirement.

Jeff Bailey : 2/8/2007 2:19:53 PM

Had a "gorilla" bull trade in BHI from 11/29/06 entry and 12/24/06 exit here in the MM.

Jeff Bailey : 2/8/2007 2:09:32 PM

QQQQ $44.46 (unch)

Jeff Bailey : 2/8/2007 2:07:54 PM

I looked at the BHI options and my jaw dropped.

Jeff Bailey : 2/8/2007 2:06:07 PM

New Century (NEW) $21.01 -30.33% ... new session lows.

Jeff Bailey : 2/8/2007 2:05:32 PM

BHI ... stop goes $66.90, target a "baker's dozen" to $82.

Jeff Bailey : 2/8/2007 2:04:37 PM

Swing trade long alert for roughly 3/4 position, or 100 shares in Baker Hughes (BHI) at the offer of $70.05 +0.38% ...

Jeff Bailey : 2/8/2007 2:00:11 PM

Lear Corp. (LEA) $40.06 -0.24% ... still halted with news pending.

Jeff Bailey : 2/8/2007 1:59:32 PM

Oh my! ... check out Eddie Bauer (EBHI) $8.75 -4.57% ... seeing it was halted for trade, just released in last 10-minutes.

Jeff Bailey : 2/8/2007 1:57:12 PM

Moody's Upgrades The Rtgs For El Paso Electric Co (EE)

EE $24.68 +0.38% Link ...

Jeff Bailey : 2/8/2007 1:51:46 PM

TLT $88.17 +0.12% ...

Jeff Bailey : 2/8/2007 1:51:29 PM

30-year ($TYX.X) down 1.1 bp at 4.841%

Jeff Bailey : 2/8/2007 1:51:02 PM

Federal Reserve (Lockhart) Press Release Link

Jane Fox : 2/8/2007 1:49:38 PM

WASHINGTON (MarketWatch) -- U.S. securities regulators charged seven individuals on Thursday with carrying out an insider-trading scheme that netted more than $3.7 million over four years.

In a federal court filing, the Securities and Exchange Commission alleged that former Taro Pharmaceuticals Industries (TAROF) executive Zvi Rosenthal tipped his son Amir to nonpublic information about 13 different company announcements including earnings results and pending generic drug approvals.

Amir Rosenthal then tipped his two brothers and others including his father in law and his best friend, the SEC said. According to the agency, Amir created a hedge fund and an unregistered investment adviser called Aragon to hide the family's identity and execute the trades in Taro securities.

Mark Schonfeld, director of the SEC's Northeast regional office, said the defendants should have known better.

Jeff Bailey : 2/8/2007 1:48:38 PM

Federal Reserve Bank of Atlanta: Names New President ... Lockhart Becomes Atlanta Fed President On March 1

Jeff Bailey : 2/8/2007 1:42:26 PM

China Sees Risk In Quest For African Energy, Minerals

DJ (partial) - Chinese President Hu Jintao is in Africa bearing the usual gifts of money for soccer stadiums and interest-free loans. But he also has brought a new recognition of the downside of China's aggressive quest for the continent's resources. These include tensions over mounting trade imbalances, the practices of some Chinese investors and the risks of doing business with rogue states. Unmentioned, as Beijing adds luster to Africa's renewed status as a strategic ally, is the possibility of a dispute with the U.S. as the two vie for resources and influence on the continent. Another source of possible conflict is China's arms sales to countries accused of human rights violations. Hu's eight-nation, 12-day tour has taken him to Cameroon, Liberia, Sudan, Zambia, Namibia and South Africa. On Thursday, he arrived in Mozambique and wraps up his tour Friday and Saturday in the Seychelles.

Jeff Bailey : 2/8/2007 1:37:02 PM

US Earnings: Q4 Results +8% Vs. 2005, +5.3% Vs Views

DJ- The earnings of companies in the Standard & Poor's 500 index that have issued fourth-quarter reports are running 8% higher than year-earlier results, according to Thomson Financial.

Of the 500 companies, 360, or 72%, had reported earnings for the quarter as of Thursday. So far, fourth-quarter earnings have come in 5.3% higher than analysts' expectations.

Compared with a year earlier, earnings of S&P 500 companies are expected to rise 10.8% in the fourth quarter. That figure reflects actual earnings for the companies that already have reported and average estimates for the rest.

For the first quarter, analysts, on average, expect earnings of the S&P 500 companies to rise 4.7% from the year-earlier period.

The following table shows how the 360 companies that have reported performed in the fourth quarter, compared with analysts' average expectations.

By number By percentage

Positive surprises 137 38%

Positive reports 101 28%

On target 56 16%

Negative reports 39 11%

Negative surprises 27 8%

(Positive and negative surprises include companies that deviated from expectations by at least 5%, with adjustments when the numbers are near 0 and the percentage difference becomes meaningless. Positive and negative reports are from companies that deviated by less than 5%.)

The following table shows how the companies are doing against year-earlier results, with two companies not reporting those figures.

By number By percentage

Above year-ago 279 78%

Matched year-ago 8 2%

Below year-ago 71 20%

Thomson Financial said 58, or 67%, of the 86 companies in the S&P 500 that provided previews for the first quarter as of Thursday will miss analysts' mean expectations; 14, or 16%, expect to meet analysts' expectations; and 14, or 16%, anticipate they will beat the projections.

At a comparable time last year, 60, or about 62%, of the 97 companies in the S&P 500 that provided first-quarter previews warned of shortfalls; 14, or about 14%, anticipated on-target results; and 23, or about 24%, projected higher-than-expected earnings.

Jeff Bailey : 2/8/2007 1:30:40 PM

HBC $89.90 -2.51% ...

Jeff Bailey : 2/8/2007 1:30:06 PM

NEW $21.46 -28.84% ... is this "the news" that some have been fearing for more than 2-years?

Jeff Bailey : 2/8/2007 1:28:31 PM

Ohhhh.... you can sense the confusion.... what to do, what do to ... YM at WEEKLY Pivot is "neutral"

Jeff Bailey : 2/8/2007 1:26:55 PM

check out the "squirrely" action in the TLT $88.25 +0.21% .... TYX.X down 1.8 bp at 4.834%

Keene Little : 2/8/2007 1:26:26 PM

Keeping with the same symbology I'm using on the charts, here's that same DOW 15-min chart with the "target" symbol--that's the key level for the bears now. A break of that level would go a long way towards confirming the bearish wave count here. A move above 12670 would negate the bearish count. Now all we have to do is let price tell us which one is going to play out. Link

Jeff Bailey : 2/8/2007 1:25:24 PM

OK ... See YM's afternoon high at 01:05? Don't be short YM on move much above there. Traders will play the 10-year and 30-year auction pattern.

Jeff Bailey : 2/8/2007 1:24:03 PM

That 30-year auction note, now has Paulson's comments "making sense."

Jeff Bailey : 2/8/2007 1:22:10 PM

Yesterday's 10-year and today's 30-year auction results were released at 01:00 PM EST.

Keene Little : 2/8/2007 1:20:40 PM

What the bears will want to see happen now is a continuation of the decline after this bounce (duh!). This bounce could be another 2nd wave correction, especially considering the fact that the DOW has now retraced 62% of today's decline (typical for a 2nd wave correction). If it is another 2nd wave correction then the next leg down would be a 3rd of a 3rd wave down and those are the screamers. It would be sweet if you're short and we get that. This is what it would look like on the DOW: Link

Jeff Bailey : 2/8/2007 1:21:34 PM

US 30-year Bond Auction: 4.812%; 42.36% At High

DJ- The U.S. Treasury awarded $9.00 billion in 30-year bonds at Thursday's auction at a high rate of 4.812%.

The Treasury received bids totaling $22.14 billion and accepted $9.00 billion, including $9.18 million of noncompetitive tenders.

The Treasury received no bids for the bonds from foreign and international monetary authority accounts on a noncompetitive bidding basis.

The bid-to-cover ratio, an indication of demand, was 2.46, Treasury said.

Tenders submitted at the high yield were allotted 42.36%.

The dollar price was 99.020970 and the coupon rate was set at 4.750%, or 4 3/4%.

The median rate was 4.790%; 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 4.770%.

Accepted indirect bids for the bonds were 42.1% of the total, up from 32.8% during the previous bond auction in August.

The high rate was down from 5.080% in August. The high rate was the lowest since 4.530% at the 30-year bond auction on Feb. 9, 2006.

The issue is dated Feb. 15, 2007, and matures on Feb. 15, 2037.

The CUSIP number on the 30-year bonds is 912810PT9.

Jeff Bailey : 2/8/2007 1:16:21 PM

01:05 Internals found at this Link

Jane Fox : 2/8/2007 1:16:00 PM

Both the AD line and volume are still under 0 so I will not be buying this market but remain on the sidelines. I like all my ducks in a row and right now they are not. I may miss a trade but so be it, the odds are not in my favor right now.

Keene Little : 2/8/2007 1:09:05 PM

Those pesky bulls are at it again--buying this dip. Shorts are OK until they get today back to even in which case I'd want to cover and watch what develops.

Jeff Bailey : 2/8/2007 1:07:38 PM

01:05 Market Watch found at this Link

Jane Fox : 2/8/2007 1:07:24 PM

TICKS +1000

Jeff Bailey : 2/8/2007 1:03:11 PM

Overly NAKED call at least.

Jeff Bailey : 2/8/2007 1:02:46 PM

Gosh this equity market looks short .... way too short.

Jeff Bailey : 2/8/2007 1:01:02 PM

CME Nov07 futures Chain at this Link

Jeff Bailey : 2/8/2007 12:57:03 PM

CME Aug07 Futures Chain at this Link ... I want a "snapshot" of bid/asks ... these don't trade volumes like YM/NQ/ES/ER

Jeff Bailey : 2/8/2007 12:51:20 PM

What do YOU think is happening? Don't look!

Jeff Bailey : 2/8/2007 12:50:42 PM

OK ... a little action in the August07 contracts ...

Jeff Bailey : 2/8/2007 12:49:54 PM

Trying to get a MARKET feel for today's "news."

Jeff Bailey : 2/8/2007 12:49:23 PM

CME's May Composite futures bid/ask 218.20 x 220.80. Last 219.00

The last was what I showed yesterday.

Only action I see in May is Miami with 3 contract at 279.80. Yesterday's intra-day benchmark (see MM from yesterday) was 279.20.

These housing futures were created as a RISK management derivative for mortgage lenders and banks.

Jane Fox : 2/8/2007 12:48:38 PM

Internals are telling me it is not worth while to be trading right now. I think all the "easy" money has already been made.

Jeff Bailey : 2/8/2007 12:43:20 PM

NDX/QQQQ Heatmap at this Link

Keene Little : 2/8/2007 12:42:56 PM

The thing to stay aware of here is that the move down from yesterday afternoon is so far only a 3-wave move. I have it labeled as waves (i)-(ii)-(iii) on the DOW 15-min chart just posted but it could be an a-b-c instead. That's why the key level at DOW 12670--any bounce back above that level from here would leave the move down as a confirmed 3-wave move and would tell us new highs are coming. That level is therefore a good stop level for now.

Jeff Bailey : 2/8/2007 12:40:11 PM

QQQQ alert! $44.52 +0.13% ...

Keene Little : 2/8/2007 12:39:01 PM

The DOW is showing a pretty clean pattern to the down side and this 15-min chart is showing how I think it's unfolding. This morning's low looks like the 3rd wave down for the decline from yesterday afternoon. The little bounce we're currently in should be a 4th wave correction (either just finished or will give us a bigger sideways move). Link

This bounce retraced 38% of the 3rd wave (typical for a 4th wave correction) and if that's the end of the correction we now get a downside projection for the 5th wave (to equal the 1st wave) at 12545. That will change if the bounce gets higher. If it plays out the way I depict it on this chart then that new low is where I'd hedge or take some money off the table. Following a 5-wave move down will be a larger upward correction at a minimum, potentially back up to the 12620-12640 area. And then it would be time to get shorty again.

Jeff Bailey : 2/8/2007 12:36:27 PM

Lear Corp. (LEA) $40.06 -0.24% ... still halted with news pending. Still haven't seen any news.

Jeff Bailey : 2/8/2007 12:35:15 PM

BioCryst Pharma (BCRX) $10.95 +1.57% Link ...

Jeff Bailey : 2/8/2007 12:34:30 PM

Turkey Reports Bird Flu In Poultry

DJ- Turkey's Agriculture Ministry said Thursday that 170 birds died of bird flu in southeastern Turkey last week and tests were under way to determine whether it was the H5N1 strain. Authorities said they have quarantined three villages in southeastern Batman province, culling around 1,650 birds since Feb. 5. Turkey was hard hit by bird flu in January 2006, when 12 people were infected and four died of the H5N1 strain. "Right now, a threat of an epidemic is out of question," Nihat Pakdil, deputy undersecretary of the Agriculture Ministry, told private NTV television. The latest outbreak was first reported in the village of Bogazkoy near the town of Gercus on Feb. 5. The Agriculture Ministry confirmed Thursday that samples tested positive for bird flu but stressed that further tests were needed to determine whether it was the deadly H5N1 strain. Authorities were also culling fowl in the nearby villages of Aydinli and Ruzgarli as a precaution, Pakdil said, and warned people to avoid contact with birds. There were no reports of any human infection in the area. The H5N1 strain has claimed at least 165 human lives worldwide since it began ravaging Asian poultry farms in late 2003, according to the World Health Organization. Experts worry the virus, which remains hard for people to catch, will evolve into a form that passes easily among humans, potentially sparking a pandemic. So far, most cases have been traced to contact with infected birds.

Keene Little : 2/8/2007 12:26:31 PM

One more small jab to the upside (might not get it) would be a good spot to short it and then use a relatively tight stop.

Keene Little : 2/8/2007 12:22:53 PM

There's a good chance this little spike up is finishing the corrective bounce. If true it should turn back over and head for new lows soon.

Jeff Bailey : 2/8/2007 12:07:31 PM

HSBC (HBC) $89.80 -2.62% ...

Jeff Bailey : 2/8/2007 12:07:02 PM

Moody's Affirms Hsbc Holdings' Ratings (senior At Aa2, Positive Outlook) And Selected Subsidiaries On Announcement Of Higher Credit Provisions

Jeff Bailey : 2/8/2007 12:04:00 PM

Altria (MO) $62.34 -1.22% Link ... #3 Weight in INDU/DIA/YM

Jeff Bailey : 2/8/2007 12:02:34 PM

REYNOLDS AMERICAN 4Q NET TUMBLES 39%

DJ- Cigarette maker posts net income of $180 million, or 61c a share, as sales rise slightly to $2.07 billion. Excluding items, earnings are 81c a share. Analysts expected earnings of 85c a share on revenue of $2.12 billion.

RAI $62.38 -2.13% Link

Jeff Bailey : 2/8/2007 11:58:48 AM

TRIBUNE 4Q NET SKYROCKETS 78%

DJ- Newspaper publisher posts net income of $239.1 million, or 99c a share. Operating revenue grows 5.4% to $1.47 billion. CEO says strategic review is continuing, with a decision expected during the first quarter.

TRB $30.93 -0.06% Link ...

Jeff Bailey : 2/8/2007 11:50:42 AM

TOLL BROS HOME-BUILDING REVENUE DROPS 19%

DJ- Shares fall 4% as fiscal 1Q home-building revenue falls to $1.09 billion and its backlog at Jan. 31 is off 30% from a year earlier. Signed contracts slide 33%, and Toll estimates write-downs will range from $60 million to $160 million.

TOL $33.15 -3.71% Link ...

Jeff Bailey : 2/8/2007 11:48:49 AM

BORGWARNER 4Q NET DOWN 37%

DJ- Auto supplier's 4Q net income falls to $40.9 million, or 70c a share, as it continues to adjust North American operations. Excluding charges, earnings are 99c a share. Revenue rises 15% to $1.2 billion. Analysts expected EPS of 95c.

BWA $74.78 +6.81% Link ...

Jeff Bailey : 2/8/2007 11:47:03 AM

QWEST SWINGS TO PROFIT BUT 4Q DISAPPOINTS

DJ- Telecommunications company posts earnings of $194 million, or 10c a share, versus a loss of $528 million a year earlier. Excluding gain, it earns 6c a share. Analysts expected earnings of 8c a share.

Q $8.16 -1.09% Link ...

Keene Little : 2/8/2007 11:46:15 AM

GOOG continues to hug the 470 level but the way it's consolidating at this level it looks like the next move will be a continuation lower. Whether that move lower sets up the next rally leg or instead is the early part of a larger decline can't be known yet. This daily chart shows the two potential paths I see for GOOG: Link

Potential support, if this continues lower, will be at the top of its gap near 450, which is also a Fib projection for the 2nd leg down from the high on January 16th where it will equal 162% of the 1st leg down. Next support would be the uptrend line from August 2004, currently near 435 and identified on this chart as the key level for the bearish wave count. Link

Jeff Bailey : 2/8/2007 11:44:50 AM

Lear Corp. (LEA) $40.06 -0.24% Link ... halted news pending.

Jeff Bailey : 2/8/2007 11:43:38 AM

GLAXOSMITHKLINE 4Q PRETAX PROFIT RISES 6%

DJ- Pharmaceutical giant posts pretax profit of $3.36 billion, as a 16% rise to $20.4 billion in U.S. sales help drive total pharmaceutical turnover growth of 9% in 2006. Firm expects full-year 2007 earnings to grow between 8% and 10%.

GSK $55.92 +1.02% Link ...

Jeff Bailey : 2/8/2007 11:41:39 AM

EMC Corp. (EMC) $14.49 +6.54% Link ... Upgrade at Goldman Sachs.

Spinning off 10% of a computing virtualization unit ... Story Link

Jeff Bailey : 2/8/2007 11:38:23 AM

ECB LEAVES KEY INTEREST RATES UNCHANGED

DJ- The European Central Bank keeps interest rates on hold, leaving the key policy rate untouched at 3.50%, as expected. The decision comes after the Bank of England left its bank rate unchanged at 5.25% earlier in the day.

Jeff Bailey : 2/8/2007 11:37:23 AM

AETNA 4Q NET UP 4% ON HIGHER PREMIUMS

DJ- Health insurer posts net income of $434.1 million, or 80c a share. Revenue rises 8% to $6.36 billion, helped by increase in premiums. Operating earnings are 76c a share, matching expectations.

AET $43.12 -2.00% Link ...

Jeff Bailey : 2/8/2007 11:35:23 AM

Treasury's Paulson: Foreign Holdings Of Treasury Debt Not Of Concern

Jeff Bailey : 2/8/2007 11:33:56 AM

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

Keene Little : 2/8/2007 11:31:40 AM

The current bounce looks corrective and suggests more lows coming. But the bullish divergences on the short term charts say we could find support near current levels. It's a bit of a coin toss right here. Looking at the move down from yestereday's high gives me the impression that it will either find a bottom near here (and potentially head higher again) or we'll get a fast and strong flush to the downside. That more bearish possibility requires the bounce highs to hold so based on that you can place your stop just above each bounce high as this decline progresses.

Jeff Bailey : 2/8/2007 11:24:48 AM

WFC's Option Montage at this Link

Keene Little : 2/8/2007 11:24:06 AM

The SPX 1443 level that I identified on the charts is still an important level. It's also where an older trend line along the highs on December 15th and January 25th is currently located. If you're short you want to see that 1443 level get taken out and stay out. Link

Jeff Bailey : 2/8/2007 11:19:55 AM

Blanchard - Gold Prices Will See Major Short-Term Rise

DJ- Gold prices will see continued strength from market fundamentals rather than speculation and will charge to its 2006 high over the next few weeks, said analysts at Blanchard and Company Inc. "A weak U.S. dollar, increasing oil prices, and ever-present geopolitical tensions will continue to affect precious metals prices," but the analysts said, in a report released Thursday, that any market correction will present investors with a buying opportunity as they expect prices to surge due to continuous improvement in market fundamentals. "Gold is up nearly $60 in the past month," said Donald Doyle, Blanchard chairman and chief executive in a statement "and today's market is being driven by gold fundamentals rather than by speculation, which caused gold to reach $730 last spring." Doyle added that each day the market continues to get more information on slumping mine supply across the globe, additional de-hedging, slowing central bank sales and new central bank purchases and that these are major factors that will push gold to last year's highs (around $730) within the next few weeks. Neal Ryan, director of economic research for Blanchard, said that a "parabolic price increase" similar to the one last spring will have additional support underneath it because of stronger market conditions. "Last Friday's correction was in stark contrast to bullish factors that should have pushed gold higher," said Ryan. "Now that gold is steadying above $650, investors should not be surprised to see possible jumps of $20 or more after Thursday's rate decision by the European Central Bank, which should drive the currency markets while oil prices also challenge $60 per barrel again." The analysts said they see silver leading the precious metals market price increases on a percentage basis based on flat mine production, supply constraints, and significant inflow of investment dollars. "We continue to expect to see silver in the $16 to $18 (an ounce) range in the first quarter of 2007 with an overall possible peak of $20 to $22 per ounce this year," Doyle says, "and we wouldn't be surprised to see additional platinum price spikes from current levels, similar to November of 2006."

Jeff Bailey : 2/8/2007 11:17:52 AM

eBay's deal for StubHub get US antitrust approval ... Reuters Story Link

EBAY $33.50 +0.38% ...

Jeff Bailey : 2/8/2007 11:14:28 AM

11:00 Internals found at this Link

Keene Little : 2/8/2007 11:08:18 AM

For those of us who are short and liking the red on the screen today, here's a word of caution--this is Thursday before opex week. I've discussed several times recently how this is the day that is often the "head fake day". It didn't occur last month but typically what we saw happening was a quick move on Thursday (usually a spike down to suck in the bears) followed by a jam job to the upside during opex week.

I've speculated that the Boyz (the mega banks' trading teams) buy cheap front-month call options on these dips and then make a killing during opex week as they jam the market higher. There are several reasons for me to believe that that won't happen this month but the pattern is there and it requires your attention to the possibility. Stay disciplined in your trading, use appropriate risk management and by all means don't be bashful about taking money off the table when you have it. We all know how many times traders give their winnings back only because they didn't cash in their chips.

Jeff Bailey : 2/8/2007 11:02:59 AM

11:00 Market Watch found at this Link

Jeff Bailey : 2/8/2007 11:00:08 AM

HSBC's Option Montage at this Link

Keene Little : 2/8/2007 10:56:31 AM

CME rallied up near its Fib projection (at 589) for two equal legs up in its bounce off the low on January 30th. It's a messy pattern so I'm not sure if its bounce is finished or not. If you're short CME I'd use a stop just above that 589 level. If a decline gets started then the downside projection is near 534 which would be two equal legs down from the high on January 24th. Link

We've got a bunch of a-b-c moves on this one and that makes longer term projections difficult at the moment. Bears will obviously want to see the uptrend line from August 2006, currently near 532, get broken, followed by a break of the longer uptrend line from April 2005 near 515. But the shorter term pattern, with the 3-wave moves, suggests we may not have seen the highs for this stock yet. So this daily chart shows the different paths that CME could take from here: Link

Jeff Bailey : 2/8/2007 10:56:06 AM

NEW's Option Montage at this Link

Note: My QCharts only shows CBOE activity, not all market makers.

Jeff Bailey : 2/8/2007 10:48:42 AM

EIA Weekly Crude Oil, Gasoline, Distillate and Nat. Gas Storage Table at this Link

Jane Fox : 2/8/2007 10:48:16 AM

This is a sell the rallies day. Very clear until the internals tell us otherwise.

Jeff Bailey : 2/8/2007 10:38:49 AM

"Bad tick" in USO to $49.50 .... $48.54 here.

Jeff Bailey : 2/8/2007 10:35:13 AM

US Oil Fund (USO) $48.54 +0.60% Link ...

Jeff Bailey : 2/8/2007 10:33:18 AM

EIA Weekly Natural Gas Storage Table Link ... Draw of 224 Bcf

Jeff Bailey : 2/8/2007 10:31:10 AM

Wells Fargo (WFC) $35.45 -1.19% Link ...

Keene Little : 2/8/2007 10:24:06 AM

The RUT was held down at the Fib projection at 816 at yesterday's close. If short the RUT I'd also use yesterday's high as a stop level. It's got some work to do to the downside to prove it has topped out but so far I like the wave pattern that suggests the bull run is finished on this one as well. A break below 804 is needed to help confirm the bearish count is underway: Link

Jeff Bailey : 2/8/2007 10:23:45 AM

HSBC Holdings (HBC) $89.79 -2.65% Link ... (see 10:10:18 AM)

Keene Little : 2/8/2007 10:15:30 AM

SPX update on its bearish road map (obviously very early and need to see some downside confirmation): Link

Jeff Bailey : 2/8/2007 10:11:55 AM

New Century Financial (NEW) $21.70 -28.05% Link ... exceeding its bearish vertical count.

Keene Little : 2/8/2007 10:11:53 AM

I may have to change the down-channel on this NDX chart if it bounces above yesterday's high but for the time being this is the bearish road map: Link

Jeff Bailey : 2/8/2007 10:10:18 AM

HSBC, New Centry warn of US subprime lending woes Reuters Story Link

Jane Fox : 2/8/2007 10:06:53 AM

NEW YORK (MarketWatch) -- Circuit City Stores Inc., suffering from price wars on flat-panel TVs, said Thursday it will close stores and shake up its merchandising team in a move to improve its financial performance.

? Circuit City (CC) , the nation's second largest consumer electronics retailer after Best Buy Co. (BBY) , will shutter seven U.S. superstores this month and another 62 stores internationally. The company will also close a distribution center in Louisville, Ky.

"Because of the intensified gross margin pressures that we saw in the third quarter within the flat panel television category, we launched efforts to accelerate the timing of planned initiatives to improve sales and gross margin, as well as improve the efficiency of our expense structure," said Philip Schoonover, chief executive, in a news release.

Jane Fox : 2/8/2007 10:05:53 AM

WASHINGTON (MarketWatch) - Inventories at U.S. wholesalers dropped unexpectedly in December, the Commerce Department said Thursday.

Inventories fell 0.5%, the biggest decline since May 2003.

Sales at wholesalers increased 1.8% in the month, the largest increase since May. As a result, the inventory-to-sales ratio slipped to 1.17 in December, down from 1.19 in November. This is the lowest inventory-to-sales ratio since last August.

The decline in inventories was unexpected. Economists surveyed by MarketWatch expected wholesale inventories to increase 0.6%. Inventories increased a revised 1.1% in November, down from 1.3% previously.

Jane Fox : 2/8/2007 10:04:54 AM

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

Jeff Bailey : 2/8/2007 10:02:53 AM

10:00 Market Watch found at this Link

Jane Fox : 2/8/2007 10:01:09 AM

Would you be comfortable been long here? Link

Keene Little : 2/8/2007 10:00:06 AM

With the DOW and SPX breaking below yesterday afternoon's low, you can more aggressively manage your stop level on your short play--move it to just above the bounce into the close since that should not be violated if we've started a bearish wave count to the downside now. Drawing a downtrend line from yesterday's high through the high at the close will also give you a line to chase your stop lower.

It's a good idea to take some money off the table whenever we get a big bounce--can't go broke taking a profit. It also enables you to reenter at a higher level. For those who want to have more of a position trade and not actively manage it through the spikes and dips, keep your stop above yesterday's high for now.

Jane Fox : 2/8/2007 9:57:14 AM

Internals are telling me the highest odds trade is short. As you have seen lately though you cannot marry these trades and you have to be nimble because things change quickly - this is were the art of trading comes in. Some do this well and some not so well.

Keene Little : 2/8/2007 9:46:30 AM

I've been talking recently about the generals and how we need to listen to them. These are the smart ones and know when to cut and run. The fact that OEX has not been able to penetrate 670, the 62% retracement of the 200-2002 decline, tells me smart money knows where the line is and when to take profits. In the meantime the foot soldiers have been charging ahead, oblivious of the dangers. They're ignoring the "Thin Ice" warning signs.

MSFT dropped below its 50-dma this week and is another general who has deserted his troops. In the DOW, which has been making all these new all-time highs, several of its major generals have been conspicuously absent. Thanks to Austin for pointing out the following:

While the DOW is making record highs liftng the S&P up 2.5%, the top 5 stocks ("the generals") are down for the year.
Exxon -1.2%
GE -2.2%
Mircosoft -.8%
Citigroup -1.7%
BAC -1.0%

Jane Fox : 2/8/2007 9:39:35 AM

VIX opens above its PDH but once again the TRIN is out of sync and opens below its PDL.

Jane Fox : 2/8/2007 9:38:07 AM

AD line is a bearish -763 and AD volume is below 0 and falling. THe bears have the ball this morning. Now lets see if the VIX and the TRIN agree.

Jane Fox : 2/8/2007 9:22:43 AM

GREENWICH, Conn. (MarketWatch) - With roots tracing back to AMC's National Cinema Network, this new entity was formed in 2005 through the combination of the in-cinema advertising businesses of leading domestic cinema operators AMC, Regal and Cinemark to establish a highly scalable digital advertising network with a national reach.

Historically a low-quality medium featuring slideshows delivered on 35mm film, cinema advertising has begun to attract more interest due to its highly targeted approach and the incorporation of satellite technology, which allows providers to digitally stream content to theatres.

With a commanding 63% penetration in the nation's top 50 markets, National CineMedia operates the nation's most extensive in-cinema advertising network, which positions it well to gain share in an industry that is poised to increase at a 12% compounded annual growth rate to $910 million by 2010.

The IPO prices at the top of its range and raised $798 million as the richest of 2007 so far. (NCMI)

Keene Little : 2/8/2007 9:20:42 AM

If you shorted ES at 1455 at yesterday's close, as it bounced up to test its broken uptrend line line from January 26th, you're looking pretty this morning. Putting your stop just above that now will reduce your risk. Until Tuesday's low is broken though we still run the risk of seeing yesterday's highs retested.

This updated SPX 30-min chart shows where we are in the wave count. It looks like a good finish for the rally from January 26th (and the entire bull market rally for that matter) and the bounce back up late yesterday was a perfect short play setup. Now all it has to do is work! Link

Jane Fox : 2/8/2007 9:19:22 AM

CHICAGO (MarketWatch) - The late arrival of winter helped jump start January sales of heavy coats, snow-removal equipment and home-entertainment merchandise - much of which was purchased with gift cards.

With 33 of the nation's top 55 chain-store retailers reporting to Thomson Financial, most are turning in better-than-expected same-stores sales results, the industry's benchmark of growth.

But the results are cluttered with caveats of margin pressures and management changes and restructurings, leaving January's results of sales at stores open longer than a year a jumbled bunch.

Jane Fox : 2/8/2007 9:17:05 AM

BOSTON (MarketWatch) -- Toll Brothers Inc. reported Thursday an "uptick" in sluggish housing demand in several markets as the luxury home builder's cancellation rate came down but said it may post quarterly writedowns as high as $160 million or more, which would handily top its previous estimate for all of 2007.

The Horsham, Pa., home builder (TOL) posted first-quarter home-building revenue of $1.09 billion, down 19% from $1.34 billion in the year-earlier period. Preliminary data for the company's first quarter ended Jan. 31 were reported ahead of its full financial results. "We saw an uptick in demand in a number of markets in January and the first week in February compared to December, but, seasonally, this is supposed to happen," said Chief Executive Robert Toll in a statement.

Jane Fox : 2/8/2007 9:15:00 AM

Overnight the US $ climbed and Gold fell but a funny thing happened because Gold turned around and began climbing and the $ then started to fall after Gold started its climb. The gold/$ relationship, to my understanding, is driven by the $ not Gold.

Crude took a drubbing yesterday and hovered around its PDL for most of the overnight session telling me it has further downside to go which should put pressure on Gold. Link

Jane Fox : 2/8/2007 9:09:23 AM

It was a bearish overnight session with lower lows and highs and I will be looking for support at PDLs.

Yesterday was quite a volatile session, early in the day climbing to new daily highs then turning around and falling to new daily lows only to turn around once again and almost close at breakeven. Link

Jane Fox : 2/8/2007 8:55:56 AM

LONDON (MarketWatch) -- The Bank of England on Thursday left its key interest rate unchanged, allowing time for three hikes since the start of August to take effect as inflation remains well above its target rate.

The decision to hold the rate at 5.25% was in line with the consensus forecast of economists and follows January's rate increase, which stunned the market.

However, a slew of recent data showing continued strong economic growth had left a minority of economists forecasting that the bank would boost rates for the second straight month -- the first time that would have happened since June 2004.

Jane Fox : 2/8/2007 8:55:00 AM

NEW YORK (MarketWatch) - Gold futures fell early Thursday, pressured by weakness in energy prices and a rise in the U.S. dollar.

Gold for April delivery was last down $2.0 at $655.30 an ounce on the New York Mercantile Exchange.

In the previous session, gold closed $1.40 lower at $657.30 an ounce, as a retreat in oil prices reduced the metal's safe-haven appeal. Energy prices have provided most of the impetus for gold futures in recent weeks.

Jane Fox : 2/8/2007 8:54:00 AM

WASHINGTON (MarketWatch) -- First-time claims for state unemployment benefits rose by a modest 3,000 to 311,000 in the week ending Feb. 3, the Labor Department reported Thursday.

The four-week average of new claims, meanwhile, rose by 3,250 to 308,250.

Both the initial claims and four-week average of new claims were the highest since Jan. 20, the Labor Department said. Economists consider the four-week average of new claims a better indicator of the job market because it smoothes out one-time events like strikes or holidays.

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