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Keene Little : 2/16/2007 1:03:43 AM

It looks like MSFT may have spoiled the party after hours, dropping $0.60 from its close and taking futures down with it. Who knows if that will follow through into tomorrow's open. I had shown this DOW 5-min chart after the close on Thursday and suggested we could see a quick pop higher to end the pattern. But if the market opens down instead and drops out of the little ascending wedge then that will indicate the top was put in on Thursday. Link

If we do see the market head immediately lower on Friday then the pattern on SPX's 5-min chart will have called it better. The final high late in the day looks like a nice finish to the ending diagonal (even with the 5th wave = 62% of the 1st wave within the wedge) and this should finish the 5th wave in the move up from Monday. This one looks ready to drop. Link

Keene Little : 2/15/2007 11:22:44 PM

Friday's pivot tables: Link and Link

OI Technical Staff : 2/15/2007 9:59:59 PM

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Keene Little : 2/15/2007 5:56:09 PM

Here's an update on the DOW 5-min chart I had posted earlier (2:46). The choppy rise today looks like an ending diagonal and as such I'm just waiting for the end of it. It's possible price will explode out the top of this, and any move above a potential Fib target at 12804 would have me on the sidelines. Link

But the higher-odds pattern here is that it's an ending one. So, the best way for this to end is a quick move higher on Friday morning (I have upside Fib projections at 12782-12784 but a little throw-over could take it to 12790 no problem) followed by selling for the rest of the day. A break below 12755 would be a heads up that we might have already topped. A break below 12730 would confirm it.

Jeff Bailey : 2/15/2007 5:29:50 PM

Closing Internals found at this Link

Jeff Bailey : 2/15/2007 5:14:17 PM

March Crude Oil futures (cl07h) settled down $0.01, or -0.02% at $57.99.

March Nat. Gas (ng07h) settled up $0.051, or +0.70% at $7.292.

Jeff Bailey : 2/15/2007 5:12:28 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 2/15/2007 5:10:13 PM

MSFT $29.20 x $29.21 now.

Jeff Bailey : 2/15/2007 5:09:42 PM

The lower operating expense headline is probably what had the stock jumping to $29.80, and the Windows Vista part was the decline.

Jeff Bailey : 2/15/2007 5:08:17 PM

Mr. Ballmer's comments regarding ... analysts' forecasts for Windows Vista revenue in 2008 were "overly aggressive" ...

Well, that becomes a "how overly aggressive" and just what are the early sales results?

Jeff Bailey : 2/15/2007 5:05:28 PM

That news likely puts a blanket on any type of gravitation/elevation to the $30 Call open interest tomorrow.

Like a couple of stocks yesterday, it was looking good at the close.

Jeff Bailey : 2/15/2007 5:02:56 PM

2-day Long close out alert ... Sell long/close out the Microsoft (MSFT) at the extended session bid of $29.21.

Jeff Bailey : 2/15/2007 5:01:54 PM

Let's blow it out here in extended.

Jeff Bailey : 2/15/2007 4:55:42 PM

Microsoft's Balmer: ... Reuters Story Link

Jeff Bailey : 2/15/2007 4:54:30 PM

Microsoft (MSFT) alert! $29.46 +0.20% ... CNBC report Steve Balmer making cautious comments.

$29.24 extended. Jumped to $29.80, then reversed to $29.19.

Jeff Bailey : 2/15/2007 4:42:28 PM

Buffalo Wild Wings (BWLD) $49.98 +2.48% Link ... surging to $53.40 on headline numbers.

Earnings Press Release Link

Consensus was for EPS of $0.53 on Revenue of $80.77M

Keene Little : 2/15/2007 4:40:13 PM

Since I've been making reference to OEX several times lately I thought I'd show more reasons why I think we're topping out here around this 670 level. We'll start with a weekly chart and move in closer.

I'm starting with the premise that the move up from the 2002 low is a correction to the 2000-2002 decline. I can say that with a fair amount of certainty because of the corrective wave structure and because of the total lack of impulsiveness in the techs (and a whole slew of sentiment indicators for this rally). A new high for the DOW doesn't change that since an A-B-C correction can have wave-B (the rally off the 2002 low) make it higher than the previous high--it's called an expanded flat correction in that case). First the weekly chart: Link

First we have a 62% retracement of the 2000-2002 decline at 670. For the "bounce" from 2002 we have a complex correction in that it's basically a double zigzag up (two A-B-C's separated by an x-wave). There are several ways to label it and not be wrong and this chart shows one of them. After the pullback into August 2004 we've had the 2nd A-B-C move up and equality within that move is at 673. Nice correlation with the 62% retracement.

Zooming in to look at the leg up from July 2006 (wave-C) this shows the wave count for that move. Since the pullback into the low at the end of November we've been in an ending diagonal 5th wave: Link

Projecting where wave-5 will equal wave-1 in the run up from July we get 670. Again, nice correlation. Each of the waves inside the ending diagonal is a corrective move (so a 3-wave move or something more complex). The move up from January 26th looks like it will be an a-b-c move. So zooming in on that move this 30-min chart shows how it's developing: Link

Equality in the move up from January 26th is at 672. So you can see how every step of the way as we zoom in closer and closer to the move all the way back from 2002 has the Fibs pointing to this 670-673 area as a potentially very important Fib level. I don't think the OEX will make it through it.

I show the wave count for the c-wave, the move up from February 12th, as complete at Wednesday's high. It failed short of the top of its parallel channel and the 672.83 equality level. I don't have any heartburn whatsoever about that considering the longer term pattern is running the show here. But if the current pullback since Wednesday should lead to another push higher then watch that 672-673 area for a shorting opportunity. This happens to be one of those once in a lifetime (maybe twice) shorting opportunities and it's why I'm working so hard in identifying the top.

Jane Fox : 2/15/2007 4:06:21 PM

Economic Reports for tomorrow include:

8:30a.m. Jan Producer Price Index. Expected: -0.6%. Previous: +0.9%.

8:30a.m. Jan Producer Price Index, Ex-Food & Energy. Expected: +0.2%. Previous: +0.2%.

8:30a.m. Jan Housing Starts. Expected: -2.6%. Previous: +4.5%.

10:00a.m. Mid-Feb U Of Mich Consumer Sentiment Index. Expected: 96.0. Previous: 96.9.

Marc Eckelberry : 2/15/2007 4:05:15 PM

After giving you that little rant, I'm off, keep the stop at 12811, I will update later. Some of you doubled down on that last jump, good for you. If you are in multiple contracts, layer your stops down.

Marc Eckelberry : 2/15/2007 3:58:25 PM

Criminals, I say. But that's ok, because if you can keep your nerve, you get higher short entries (or lower longs).

Marc Eckelberry : 2/15/2007 3:57:50 PM

You see the way they back off after hitting all the stops? Those aren't buy and hold players, those are hedge funds scraping the barrel.

Marc Eckelberry : 2/15/2007 3:52:12 PM

There is danger at 12806, daily R1, so the stop stays at 12811.

Marc Eckelberry : 2/15/2007 3:55:56 PM

We survived that push. ES did a minor new highs and retreated, same with NQ. They sure tried to whack shorts as hard as the could (they are after all criminals), but we should be ok now.
I say criminals, because they use the press to get everyone as bearish as possible and then they get together, decide who will take the plunge first and go out and start hitting those stops. It;s all rigged, folks and the game is to steal your money. But they do have to book the profits especially when the rise becomes artificial.

Jeff Bailey : 2/15/2007 3:50:46 PM

I'm showing 42,294 contracts having traded on the CBOE in the QQQQ $45 Puts (QQQ-NS) ... up/dntick volume 1,114/5,715

Jeff Bailey : 2/15/2007 3:47:58 PM

VXN.X alert! 15.29 -0.52% ... breaks back under WEEKLY S2.

Keene Little : 2/15/2007 3:39:16 PM

OEX is still stuck at 670. Smart money keeps feeding the sheeple their inventory at these highs.

Keene Little : 2/15/2007 3:20:14 PM

Even on a dull choppy day you can see how traders are using the trend lines, or at least trend lines show you the "order" in what appears to be an unorderly market. Notice how each uptrend line acted as resistance once it was broken. A push higher into the close or tomorrow morning could find resistance near 12780-12790 at the last broken uptrend line (and should be the last push higher if I've got the count right). But if the DOW breaks below 12740 from here that's probably it for the upside. Link

Jane Fox : 2/15/2007 3:18:48 PM

NEW YORK (MarketWatch) - General Motors Corp's delayed fourth-quarter results could take a substantial hit from souring sub-prime mortgages at Residential Capital that could cost the auto maker up to $950 million in the first half of this year, analysts said.

Residential Capital is a unit of GM's financing wing, General Motors Acceptance Corp. In November GM sold a 51% stake in GMAC to Cerberus Capital Management for $14 billion.

Charges for sour loans at ResCap could force GM (GM) to strengthen loan loss provisions at ResCap by $750 million in the first half of 2007, according to Brian Johnson, an auto analyst at Lehman Brothers.

In addition, GM may have to pay another $100 million to $200 million in the first half for adjustments on interest on securities at ResCap, according to Johnson's calculations.

Jeff Bailey : 2/15/2007 3:18:18 PM

2-day long entry alert ... go long shares of Microsoft (MSFT) $29.42 (+0.06%) here, stop $29.25, target $29.85.

Marc Eckelberry : 2/15/2007 3:12:44 PM

If you didn;t have that trade programed, it still a decent entry right below 12793.

Jeff Bailey : 2/15/2007 3:12:14 PM

03:00 Internals found at this Link

Marc Eckelberry : 2/15/2007 3:09:01 PM

Conservative traders can lower stops to 12795, but I would not recommend that quite yet.

Marc Eckelberry : 2/15/2007 3:08:25 PM

Don't jinx it Keene...;)

Keene Little : 2/15/2007 3:05:47 PM

Let's see if the DOW can get below 12755 to break today's uptrend line. Otherwise we still have the possibility it will chop higher for perhaps a final high tomorrow morning.

Jeff Bailey : 2/15/2007 3:02:48 PM

03:00 Market Watch found at this Link

Marc Eckelberry : 2/15/2007 3:02:46 PM

Give me five, cross your fingers and lets try and bag some points.

Marc Eckelberry : 2/15/2007 3:01:47 PM

That failed bump might have confirmed the trade was the top.

Jeff Bailey : 2/15/2007 3:00:08 PM

Sell Program Premium ... SPX 1,457.19

Jeff Bailey : 2/15/2007 2:57:28 PM

US Oil Fund (USO) $48.39 -0.12% ... reversing losses. Gets back above WEEKLY S1 $48.29

Jeff Bailey : 2/15/2007 2:54:35 PM

Coca-Cola (KO) Boosts Quarterly Dividend 10% to 34c from 31c

KO $47.78 -0.20% ...

Keene Little : 2/15/2007 2:46:18 PM

When I say we could see a little higher in an ending diagonal 5th wave this is how it could look--chop a little more to the upside before it's finished. Like the big ascending wedge on the daily chart it's tough to figure out where these will end (and that last high could have been the end of it). It takes a break below 12730 to confirm the top is in. Link

Jane Fox : 2/15/2007 2:44:46 PM

Dow indus. reach record high of 12,779.03 in intraday trade

Marc Eckelberry : 2/15/2007 2:43:03 PM

If the stop survives, target on the trade is 12734, followed by 12710, depending on your outlook.

Marc Eckelberry : 2/15/2007 2:37:05 PM

Chop days usually favor bulls during opex. That is why it its best to wait for extreme targets if going short. Yesterday we tried monthly R1, did not work, now we have weekly R2, which is a very extreme weekly reading. The only sky above is monthly R2 at 12869, but that will not be for this week.

Keene Little : 2/15/2007 2:36:59 PM

The DOW continues to press the top of its parallel up-channel for the A-B-C move up from january 26th. I show a failure from here (or near here since it could chop slightly higher still in a small ending diagonal 5th wave for wave-C) but the bearish setup would be negated with a rally above 12804. Link

Marc Eckelberry : 2/15/2007 2:33:46 PM

Bears will need ES to close belwo 1460.50 and YM below 12793. Not a done deal, but the trade was correct from a reversal stand point.

Jane Fox : 2/15/2007 2:28:44 PM

Needless to say this has not been an easy day to trade.

Marc Eckelberry : 2/15/2007 2:24:42 PM

Watch 12793 now. ES was a short as well at 1460.75. Tomorrow should be a down day.

Marc Eckelberry : 2/15/2007 2:21:51 PM

OEX is back below 670. ES did a lower high.

Marc Eckelberry : 2/15/2007 2:20:33 PM

Triggered on YM short 12801, stop 12811. (yesterday's post).

Keene Little : 2/15/2007 2:20:15 PM

Actually I'll expand on my last statement--never trade a dull market. Low volume opens up the risk for greater volatility spikes during opex since a buy or sell program related to options squaring could have a larger influence on the market.

Jeff Bailey : 2/15/2007 2:18:35 PM

Updated: ForexFactory Econ. Calendar at this Link

Jane Fox : 2/15/2007 2:17:18 PM

Look for resistance at PDHs.

Keene Little : 2/15/2007 2:16:24 PM

I'm out of half my YM short position with the stop hit at 12795. Never short a dull market comes to mind about now.

Jane Fox : 2/15/2007 2:16:19 PM

TICKS +1000 good timing TICKS TY

Jane Fox : 2/15/2007 2:14:23 PM

If you want to trade ES I would exit stage left on a close under 1459 or around 1458.00

Jane Fox : 2/15/2007 2:13:40 PM

AD line is now +598 and AD volume making new daily highs. The VIX is not making new daily lows to confirm the bullishness but you could venture a long here and I would use ER because it seems to be the most bullish today. NQ is the least.

Jeff Bailey : 2/15/2007 2:13:07 PM

NAHB Housing Market Index: alert! jumps to 40. ForexFactory consensus was 35.

Data was released at 01:00 PM EST.

Jeff Bailey : 2/15/2007 2:09:54 PM

Coeur D' Alene Mines (CDE) $4.62 +3.34% ... gets further action.

Jeff Bailey : 2/15/2007 2:08:38 PM


January PPI, Housing Seen Lower Economists see January PPI falling 0.6%, with core PPI increasing 0.2%. Housing starts are expected to have fallen 2.6%. University of Michigan's consumer-sentiment survey for February seen slipping to 96.0.

Jeff Bailey : 2/15/2007 2:05:41 PM


DJ- Salary software company opens above its IPO price on first day of trading as a public company. Salary.com, which raised nearly $60 million, opens at $13.50 a share on Nasdaq, up from its IPO price of $10.50.

SLRY $12.78 +21.71% ...

Jeff Bailey : 2/15/2007 1:55:04 PM


DJ- Heavy-equipment maker is in discussions with Mitsubishi Heavy Industries Ltd. about taking a majority stake in a Japanese joint venture the pair have, a move that would expand Caterpillar's presence in the growing Asia Pacific market.

see also 11:47:32

Jeff Bailey : 2/15/2007 1:53:30 PM


DJ- China has appointed a vice minister of finance to head preparations for a new agency that will invest a portion of the country's foreign-exchange reserves, according to a person familiar with the situation.

Jeff Bailey : 2/15/2007 1:52:11 PM


DJ- Online travel firm reports net income of $67.1 million, or 20c a share. Excluding items, EPS of 28c top estimates. Revenue increases 7.4% to $531.3 million, driven by strong international operations.

EXPE $22.12 -0.67% Link ...

Keene Little : 2/15/2007 1:50:33 PM

From a risk management standpoint, and to keep myself exposed to the short side a little longer in case it's just a stop run, I'm going to stop out of half my short position in YM if 12795 is tagged and place a stop on the other half at 12815. That keeps it above weekly R1.

Jeff Bailey : 2/15/2007 1:49:58 PM


DJ- Finance Committee Chairman Baucus reminds top trade negotiator Schwab that only Congress can extend Bush's fast-track trade authority, which expires this summer. Grassley is optimistic an extension can be passed by Democrats.

Jeff Bailey : 2/15/2007 1:46:53 PM


DJ- Shares gain 5% as brewer's net income more than quadruples to $99.2 million, or $1.14 a share, as year-earlier results hurt by charges. Income from continuing operations of $1.29 a share is well above analysts' estimate of 94c.

TAP $86.38 +4.74% Link ... Holy cra...

Jeff Bailey : 2/15/2007 1:42:50 PM


DJ- U.S. beer giant's shares rise 3% after Brazil daily Valor Economico says brewer is in talks with Belgium's InBev. Article says InBev's recent market gains allow it to act from a position of strength in a play for Busch.

BUD $51.75 +3.02% Link ... OEX components (see last night's MM)

Jane Fox : 2/15/2007 1:41:33 PM

Dateline WSJ - Efforts by major banks and Wall Street firms to unload bad U.S. housing loans are speeding up a shakeout in the subprime mortgage industry.

As more Americans fall behind on mortgage payments, Merrill Lynch & Co., J.P. Morgan Chase & Co., HSBC Holdings PLC and others are trying to force mortgage originators to buy back the same high-risk, high-return loans that the big banks eagerly bought in 2005 and 2006.

Merrill demanded in December that ResMae Mortgage Corp. -- which in 2006 sold it $3.5 billion in subprime mortgage loans, or loans to borrowers with poor credit records -- buy back $308 million of loans whose borrowers had defaulted. In a filing this week for bankruptcy law protection, ResMae said those demands "crippled" its operations. The Brea, Calif., company said that repurchase requests were "severe and unexpected."

As more subprime lenders face losses or bankruptcy, big banks also face another problem: Many lent money to small firms like ResMae so that those firms could make more mortgage loans to borrowers. It isn't clear how much of these loans will be paid back to the banks. Wall Street firms also are increasing their own internal generation of subprime loans by acquiring smaller mortgage loan originators or processing companies.

Jane Fox : 2/15/2007 1:40:14 PM

Dateline WSJ - The slump in housing deepened in the final three months of last year with median home prices declining in nearly half of the metropolitan areas surveyed and sales falling in 40 states, a real estate trade group reported Thursday.

The median price of a new home, the midpoint where half the homes sold for more and half for less, was $219,300 in the fourth quarter of last year, a drop of 2.7% from the same period a year ago.

Median home prices fell in 49% of the 149 metropolitan areas surveyed in the fourth quarter, compared to the same period a year ago. That was the largest percentage of metro areas reporting price declines since the Realtors began tracking price data in 1979.

The National Association of Realtors report showed that the biggest declines were in former boom areas. The biggest percentage decline in sales occurred in Nevada, a drop of 36% in the sales pace in the final three months of 2006 compared to the same period in 2005. In other former boom areas, Florida saw sales drop by 30.8%, in Arizona sales were down 27% and they fell 21% in California.

Keene Little : 2/15/2007 1:37:11 PM

The way CME has been chopping sideways since its last high on January 24th it gives me the impression it's going to press higher. That alone suggests the broader market may not be finished making new highs too. With the next turn window in mid March this just might be our bullish canary. Link

Because of the way it's chopping up and down I can't tell if it's going to move lower first (538.82 Fib target) or continue sideways before its 5th wave up (upside targets at 617 and then 634). In between 588 to the upside and 557 to the downside it could be a choppy mess and I couldn't recommend a trade inside this range.

Jeff Bailey : 2/15/2007 1:33:07 PM

Yahoo! (YHOO) $31.24 +1.89% Link ...

Jeff Bailey : 2/15/2007 1:32:24 PM

Google (GOOG) $463.00 -0.62% Link ...

Jeff Bailey : 2/15/2007 1:31:22 PM

Baidu.com (BIDU) $102.10 -11.21% Link ... Earnings Press Release Link

Downgrade ... Citigroup cuts to "sell"

Keene Little : 2/15/2007 1:19:19 PM

SPX continues to struggle with its long term Fib projection at 1455, which is also at the top of its ascending wedge from November/December. There is additional upside potential to the top of its parallel up-channel for its a-b-c move up from January 26th (about 1461) and to where there would be equality in the move up (at 1467.47) but again I don't like the upside enough to recommend a long play. It looks vulnerable to a sell off at any time. Link

Jeff Bailey : 2/15/2007 1:12:50 PM

01:00 Internals found at this Link

Keene Little : 2/15/2007 1:10:32 PM

It looks to me like the DOW is probing for a top. It could explode higher out of this congestion but I'm getting the feeling the high for the move is going to be "hidden" inside a choppy move. If the leg up from Monday is completing an a-b-c move up from January 26th, and it's to achieve equality in the move then the upside potential is to 12803. The top of a parallel up-channel for this a-b-c move is currently near 12772, or a retest of this morning's high. Link

Considering this opex Thursday, typically a quiet day, we could see the market simply held up into expiration of many of the index options. That would help explain the choppy consolidation/rise which could be a final little ending diagonal to the upside. Bottom line is that it's telling me to stay cautious about the short side and stay away from the long side.

Jeff Bailey : 2/15/2007 1:02:23 PM

01:00 Market Watch found at this Link

Jeff Bailey : 2/15/2007 12:59:28 PM

March Nat. Gas (ng07h) $7.21 -0.49% (30-min delayed) ... session low so far has been $7.07.

WEEKLY S2 ($7.25) has served resistance so far today.

Jeff Bailey : 2/15/2007 12:55:04 PM

BIIIIG volume in BHI $65.42 -9.06% ... has turned 14.617 million so far.

Keene Little : 2/15/2007 12:54:58 PM

After giving up most of its gains yesterday the RUT has managed to rally back up to the 816 level again. This has been a Fib resistance level for a week now. From a short term perspective I see an equal chance to roll over from here and head for new lows or head a little higher first to 821. Link

That's the level where the 5th wave in the move up from January 19th would equal the 1st wave. It would make the 5th wave look a little funky so I don't particularly like that setup to suggest trying a long. But that's the upside risk if you're in a short play.

Jeff Bailey : 2/15/2007 12:50:07 PM

Dow Jones Home Construction (DJUSHB) 744.85 +1.17% ... In Q4 2006 DJUSHB +13.26%

Jeff Bailey : 2/15/2007 12:46:38 PM

Housing Sales Fall in 40 States in 4th Quarter

AP Story Link

Keene Little : 2/15/2007 12:42:42 PM

NDX has potentially given us a clean finish today by jumping up to its Fib projection at 1822.31--it got a little higher and tagged the top of the bear flag that I have drawn on this 120-min chart. The move up from Monday's low looks good for a complete 5-wave move for wave-C so I like the downside on the techs. Link

Then we'll have to see if the pullback will set up another run higher or will be the start of a much bigger leg to the downside. My preferred count on the techs remains the bearish one but a close above 1823 would have me leaning more bullish.

Jeff Bailey : 2/15/2007 12:39:26 PM

Looks like Davenport taking partial profits off the table. Still targeting $61 longer-term.

Jeff Bailey : 2/15/2007 12:38:39 PM

On 12/20/06 when Alcan (AL) was trading $48-ish, Davenport's comments/rating/target Link

Jane Fox : 2/15/2007 12:34:03 PM

WASHINGTON (MarketWatch) - Two forward-looking indicators of factory activity moved in different directions in early February.

The New York Fed's Empire State index jumped to a healthy 22.4 in February after two soft months, but the Philly Fed index fell to 0.6, pointing to a barely growing manufacturing sector in the Philadelphia region.

In both indexes, readings over zero indicate growth.

The two gauges are of interest primarily because they are seen as clues to the national Institute for Supply Management survey for February due out in two weeks. In January, the ISM index fell unexpectedly below 50% for the second time in three months. In the ISM, readings under 50% indicate the factory sector is contracting.

Another report from the Federal Reserve on Thursday confirmed that dismal ISM reading. Industrial production fell 0.5% in January, despite a hefty contribution from rising utility output. Manufacturing output fell 0.7%, including a severe drop in motor vehicle output.

Jeff Bailey : 2/15/2007 12:33:47 PM

Downgrade: ... Devenport Equity downgrading Alcan (AL) $55.17 +3.17% Link to "buy"

Jeff Bailey : 2/15/2007 12:30:38 PM

iShares Silver (AMEX:SLV) $138.81 -1.00% ...

Jeff Bailey : 2/15/2007 12:30:14 PM

StreetTracks Gold (GLD) $66.00 -0.55% ...

Jeff Bailey : 2/15/2007 12:29:36 PM

US Dollar Index (CEC:DXY) 84.09 -0.13% (30-min. delayed).

Keene Little : 2/15/2007 12:29:23 PM

Those are horrible numbers out of the Philly Fed Index. I guess that's why the market popped higher on the news. It's that bad news will be good news thing again--a slowing economy will get the Fed back on a rate-decrease path. The ever-hopeful market. It just doesn't get it. A slowing economy will be bad for earnings. The high P/E ratios will never be tolerated with slower earnings growth. Any Fed rate cuts will take a long time to kick in. The "all-knowing" market is just not very bright these days. But you gotta give bulls their due--they are a hopeful lot.

Jeff Bailey : 2/15/2007 12:29:06 PM

Bernanke: Unlikely To Be Major Dollar Asset Sales

Jane Fox : 2/15/2007 12:25:53 PM

This large cap consolidation at daily highs is quite bullish, however, notice ER almost tagged its PDLs earlier. Link

Jane Fox : 2/15/2007 12:22:51 PM

The Philadelphia Fed said its headline index of manufacturing activity registered a 0.6% reading, far below the 5.3 gain expected by analysts polled by MarketWatch. The new orders sub-index came in at negative -.0.5, down from 1.3 in January, indicating further weakness ahead.

Keene Little : 2/15/2007 12:21:57 PM

Max pain for the diamonds (DIA) is 125. I and my little YM short would gladly take that. I have noticed that for a long time these max pain levels are next to useless as far as figuring out where an index might settle for opex. But if you have individual stocks you'd like to monitor for any options you might be in, try iqauto.com and then click on their max pain opts button on the left side of the screen.

Jane Fox : 2/15/2007 12:19:41 PM

Feb. Philly Fed new orders -0.5 vs. 1.3

Jeff Bailey : 2/15/2007 12:18:57 PM

Forecast was 3.5 accordinig to ForexFactory.

Jeff Bailey : 2/15/2007 12:17:58 PM

Philadelphia Fed:

February Business Index 0.6 Vs. January's 8.3

Keene Little : 2/15/2007 12:17:33 PM

With SPX options effectively expiring at the end of today (but using tomorrow morning's settle price) it'll be interesting to see if SPX closes near 1450 today. The way today has been trading that seems like a long way down. Max pain is at 1425. Now THAT would be a nice short from here.

Jeff Bailey : 2/15/2007 12:16:32 PM

HMO Index (HMO.X) 1,939.13 +2.23% ... surging

Jeff Bailey : 2/15/2007 12:15:20 PM

Hmmm... it has been a rarity for VIX.X to see much above 13.00 in last few quarters.

Jane Fox : 2/15/2007 12:15:19 PM

Feb. Philly Fed index 0.6 vs. 5.3 expected

Jeff Bailey : 2/15/2007 12:13:20 PM

Cautious Investors Need To Embrace Risk, New Study Argues

DJ (partial) - Overly cautious investors are losing out by trying to avoid risk rather than capitalizing on the opportunities it offers, according to a new report from Dutch investment bank ABN Amro Holding NV (ABN) and the London Business School.

The authors of the Global Investment Returns Yearbook, which is commissioned annually by ABN Amro, argue that investors who try to protect their portfolios against volatility through derivatives or other instruments are likely to dilute their returns to a greater extent than they reduce risk.

With stock markets close to all-time highs, but memories of the collapse of the early 2000s still fresh, Professor Elroy Dimson of London Business School believes it is right that fund managers consider protecting their portfolios against another market collapse.

But while various forms of portfolio insurance offer effective protection against a market reversal, reducing risk and returns, this approach produces a lower equity risk premium than more straight-up investment strategies, the study reveals.

Jeff Bailey : 2/15/2007 12:09:03 PM

Walgreen (WAG) alert! $46.12 +2.62% ... bold move above WEEKLY R1.

Jeff Bailey : 2/15/2007 12:06:00 PM

iShares Lehman 20-year (TLT) $88.52 +0.51% ...

TLT-CJ are bid/ask $1.05 x $1.25

Jeff Bailey : 2/15/2007 12:04:26 PM

30-year Yield ($TYX.X) down 3.4 bp at 4.792% ...

Jeff Bailey : 2/15/2007 12:03:49 PM

That "explains" the 30-year yield ($TYX.X) rise from 4.525% to 4.181% in December.

Jeff Bailey : 2/15/2007 12:02:45 PM

Treasury: December Foreign Acquisition Of Long-Term US Securities Down

DJ (partial)- Net foreign acquisition of long-maturity U.S. securities plunged to $2.5 billion in December, down 95% from $52.2 billion in November and the lowest monthly amount since July 2000, according to a Treasury Department report released Thursday.

The decline reflected both foreign private investors' sharp scaleback in their buying of a range of U.S. securities and U.S. investors making record net purchases of foreign stocks and bonds.

"We got hit by a perfect storm in December," said Jay Bryson, global economist for Wachovia Corp. While following months are likely to show more favorable capital inflows, the latest report could reflect longer-term difficulty financing the current account deficit, Bryson said.

"With interest-rate differentials narrowing, foreigners probably aren't going to be purchasing as many U.S. securities going forward," he said, referring to potentially more atractive interest rates outside the U.S. "With a very large current account deficit, I think it means further downward pressure on the dollar as we go forward."

Keene Little : 2/15/2007 12:00:25 PM

The generals (OEX) are still struggling with the 670 level here. A breakout could explode higher otherwise resistance is still holding.

Jane Fox : 2/15/2007 12:00:11 PM

Beazer Homes USA Inc. (BZH) said its general counsel, Kenneth J. Gary, was terminated "for a pattern of personal conduct which includes violations of company policies." The disclosure came in a regulatory filing, which did not detail the alleged violations.

Jeff Bailey : 2/15/2007 11:59:41 AM

Iraq February Oil Exports Up 31% on Month

Jane Fox : 2/15/2007 11:59:25 AM

BEA Systems Inc. (BEAS) said it has uncovered instances where stock options granted to its executives and employees were not properly accounted for, and it will have to restate financial results from 1998 through fiscal 2007, and record expenses of $340 million to $390 million.

Jeff Bailey : 2/15/2007 11:57:40 AM

ETF Dynamic Heatmap ... at this Link

Jane Fox : 2/15/2007 11:57:29 AM

NEW YORK (MarketWatch) -- The electronic age has literally changed the commodities markets from a whirlwind of hand waving and paper throwing to a flashing screen of green and red around the world. The addition of electronic trading is a big plus for commodities investors.

The Intercontinental Exchange, ICE, and the New York Board of Trade, NYBOT, joined forces this year in the latest commodities merger mania. Recently they launched a side-by-side trading platform that after a few delays is now going gang busters. The volume in the cocoa and frozen concentrated orange juice markets has increased significantly during the first few weeks of trading and the electronic contracts are slated to extend their hours very shortly so volumes may climb even more.

Jeff Bailey : 2/15/2007 11:56:54 AM

iShares Brazil (NYSE:EWZ) $48.98 +0.84% Link ...

Jeff Bailey : 2/15/2007 11:52:42 AM

Brazil's Govt. Forecasts 4.5% GDP Growth In 2007

Jeff Bailey : 2/15/2007 11:50:08 AM

Caterpillar (CAT) $67.60 +2.17% ... now #8 most heavily weighted Dow component.

Jeff Bailey : 2/15/2007 11:47:32 AM

Caterpillar sets $7.5 billion stock buyback

Reuters Story Link

Jane Fox : 2/15/2007 11:46:23 AM

WASHINGTON (MarketWatch) -- The senior Democrat on the House Financial Services panel wasted little time challenging Federal Reserve Chairman Ben Bernanke on Thursday, challenging him why he was sending a message "stop me before I tighten again."

House Financial Services Chairman Barney Frank, D-Mass., asked Bernanke why a rate cut "wasn't at least as likely" as a rate hike in coming months.

Frank said the economy is running below potential and inflation was falling.

"Why is there not at least an equal chance of a reduction in the time ahead," Frank said. Since August, the Fed has maintained a formal stance that inflation is the biggest risk facing the economy - a so-called inflation bias. Bernanke repeated this position in his Wednesday's Senate appearance, saying that inflation was the "predominant" risk and the Fed stood ready to hike rates if inflation developments warrant

Jane Fox : 2/15/2007 11:45:09 AM

Hopefully you all have put your trading mouse away for now. Things may change later but I seriously doubt it.

Jeff Bailey : 2/15/2007 11:44:33 AM

Chevron (CVX) $71.57 -0.85% Link ...

Jeff Bailey : 2/15/2007 11:43:25 AM

US FERC: Approves Two Mississippi LNG Projects

DJ- The U.S. Federal Energy Regulatory Commission has approved two projects to build liquified natural gas import terminals in Jackson County, Miss., at the Port of Pascagoula.

FERC said the authorization of the two projects will bring an additional 3.1 billion cubic feet per day of natural gas to the Southeast market and increase the number of U.S. LNG projects to 18.

The Casotte Landing LNG Project FERC approved Thursday is being developed by Chevron Corp. (CVX) and would sit adjacent to its Pascagoula oil refinery.

Keene Little : 2/15/2007 11:40:35 AM

Yesterday, Marc mentioned shorting 12801, stop 12811. Is that still on if we move higher? I've got the trade loaded so if the levels have changed, please let me know. I sold the 12775's and bought them back for 12665, so if we do get to 12811(my stop), I'll be even for the day minus commissions. Thanks, Dan

I'm not sure if Marc is still around so I'll jump in on this one. The level that Marc referred to is based on weekly R2 at 12803 (daily R1 is at 12806 today) so that makes for a good level to watch for resistance. Based on a pivot trade I'd say those numbers are still good ones (stop at 12811).

Jeff Bailey : 2/15/2007 11:37:46 AM

Walgreen's to buy part of Familymeds for $60 million ... Reuters Story Link

Jeff Bailey : 2/15/2007 11:34:36 AM

Propane Supplies Tight In New England Areas On Strike, Storm

DJ (partial) - Propane suppliers are delivering less than full loads to some northern New England customers because of a railroad strike in Canada and the storm-delayed arrival of a tanker in New Hampshire, an industry official said Thursday.

The tanker Alrar's arrival Thursday morning in Portsmouth, N.H., will help the situation but propane supplies will remain tight for the next week, Jamie Py of the Maine Oil Dealers Association said.

Jeff Bailey : 2/15/2007 11:25:13 AM

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

Entire BHI positions should be closed/stopped.

Entire NEW positions should be closed (see Acct/Risk management).

Keene Little : 2/15/2007 11:24:00 AM

Not a whole lot going on here. My initial thought as I see this chopping sideways/down is that it's setting up another run higher. The more bearish interpretation of this price action is that it's getting ready to let go to the downside. So I'll stay short but honor my stop if it's hit. Nothing much more to do but wait. If the DOW/SPX give up 12720/1453 then I think the bears will have a better day. As long as those levels hold then the bulls rule.

Jeff Bailey : 2/15/2007 11:14:25 AM

11:00 Internals found at this Link

Jane Fox : 2/15/2007 11:02:21 AM

NEW YORK (MarketWatch) -- Networking-technology maker Opnext raised $253 million to become the richest IPO of the week, and online compensation manager Salary.com priced above its anticipated range Thursday.

Quadra Realty Trust raised $250 million, and specialty finance firm Triangle raised $63 million as the other players in the quartet of deals making their trading debut on a strong day for IPOs.

A former unit of Hitachi, Opnext (OPXT) offered 16.9 million shares at the top of its $13-to-$15 range. The deal's underwriter was Goldman Sachs .

Opnext makes optical subassemblies and integrated transceivers for use in servers and switches in wireless data and telephone networks.

Jeff Bailey : 2/15/2007 11:02:12 AM

11:00 Market Watch found at this Link

Jane Fox : 2/15/2007 11:00:44 AM

Bernanke says economy may be stronger than Fed thinks

Jane Fox : 2/15/2007 11:00:17 AM

Odds of rate cut through 1st-half '07 up to 16%

Jane Fox : 2/15/2007 10:57:54 AM

These are telling you the bears have the ball but an AD line at -34 is telling you they do not have field position. So I remain on the sidelines. Link

Marc Eckelberry : 2/15/2007 10:53:54 AM

YM 12764 is monthly R1 and support.

Marc Eckelberry : 2/15/2007 10:53:35 AM

VIX did not confirm this low. Expect chop.

Marc Eckelberry : 2/15/2007 10:46:50 AM

Just as U type that, NQ loses 1824.75 and ES 1457.75...Ok. I guess YM 12785 is holding up as R, at least for now.

Keene Little : 2/15/2007 10:43:56 AM

Time for an update on the GOOG daily chart although we don't have anything yet that's giving us a better sense for the longer term pattern. With a drop to 455 it got down close to the top of its gap at 452. Understandably it got a bounce but so far the bounce is looking less than bullish. The bounce could continue a little higher but so far I don't see anything that makes me want to buy it. Link

But the lack of impulsiveness in the current bounce may not mean much. The reason is because even the larger bullish pattern could be filled with a lot of choppy price action as it heads higher. So there's not much here to recommend a trade. A break below 450, that holds below, should be a good short. The current risk for shorts is a push back up to recent highs.

Marc Eckelberry : 2/15/2007 10:43:25 AM

As long as NQ holds 1824.75/1826, I would be careful with shorts. I am targeting YM 12797/12804.

Jeff Bailey : 2/15/2007 10:41:38 AM

If Nat. Gas futures settle below $7.00, that will put additional negative weight on the drillers.

Jeff Bailey : 2/15/2007 10:40:16 AM

EIA Weekly Nat. Gas Storage Table at this Link ... Draw of 259 Bcf

Jeff Bailey : 2/15/2007 10:38:31 AM

Transocean (RIG) $75.96 -1.45% ...

Jeff Bailey : 2/15/2007 10:37:42 AM

A BHI bull may have "taken the risk" to hold over earnings, and it did NOT pay to do so.

I do NOT know if there is another shoe to drop in NEW, a PROFIT is at hand, I remove that RISK/Uncertainty.

Jeff Bailey : 2/15/2007 10:33:42 AM

I will continue to follow (watch list) New Century Financial (NEW) as it has become a "key" measure of the subprime scenario (in my opinion), but ACCOUNT MANAGEMENT/RISK MANAGEMENT is top priority at this point.

Jeff Bailey : 2/15/2007 10:32:07 AM

Swing trade close out all positions alert ... Today's loss in the BHI position has me looking to remove RISK, manage ACCOUNT and take profits off table in New Century Finance (NEW) positions.

In this order ...

1) Buy Back the NEW-CD at the offer of $1.90

2) Sell the underlying shares of NEW at the bid ($19.90)

3) Sell the put NEW-OW at the bid ($0.90)

Keene Little : 2/15/2007 10:29:41 AM

The pullback in YM is now too deep for just a small pullback and one more minor new high to finish off the leg up this morning. What that means is that the stop at 12795 is in the right place for now and if stopped out it would now likely mean it'll head potentially much higher. So if stopped out I'll stay on the sidelines to see what develops.

Jeff Bailey : 2/15/2007 10:26:54 AM

Current OPEN MM Profiles (alert) that I've made at this Link

Account/RISK management trade to be made regarding New Century Finance (NEW)

Keene Little : 2/15/2007 10:26:35 AM

The Philly Fed has a report at noon today, according to Yahoo Finance. Is that a market mover, in your experience?

Good question Mike. Yes is the short answer. With the stock market priced to perfection any disappointing numbers out of the Philly Fed Index could spook some investors. But I think right now the market is just hoping to get through Bernanke's testimony without a case of foot-in-mouth disease breaking out.

Jane Fox : 2/15/2007 10:23:13 AM

There just ain't nuttin' out there that would get me into a trade right now.

Keene Little : 2/15/2007 10:23:05 AM

With Bernanke starting his testimony at 10:00 and seeing the market goosed at the same time, you don't suppose it was engineered that way do you? Nah, that would be manipulation just to make their main man look good and we know that kind of thing doesn't happen in this market (cough).

Jeff Bailey : 2/15/2007 10:13:09 AM

US Oil Fund (AMEX:USO) $47.45 -2.04% ... PnF chart Link ...

Jeff Bailey : 2/15/2007 10:11:28 AM

US Oil Fund (alert)! $47.45 -2.00% ... this is double bottom sell signal on $0.50 (to match futures) chart.

Jane Fox : 2/15/2007 10:10:21 AM

WASHINGTON (MarketWatch) - Federal Reserve Chairman Ben Bernanke wraps up his two-day congressional testimony on Thursday with a visit to the Democratic-controlled House Financial Services Committee.

After delivering identical testimony to Wednesday's Senate appearance, Bernanke is expected face tough questioning about rising economic inequality in the United States, and about the Fed's dual mandate of maximizing employment and keeping prices stable.

The hearing begins at 10 a.m.

Jeff Bailey : 2/15/2007 10:10:11 AM

Oil Service HOLDRs (OIH) $136.29 -1.69% ... had the OIH been able to clear its 200-day SMA in recent sessions, instead of finding sellers, I would have been tempted to have BHI bulls adjust profiled stop. They didn't ...

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

Can't get much closer than that to my stop at YM 12795. We might get a small pullback here followed by another minor push higher so we're not out of the woods yet. But if that minor new high is accompanied with bearish divergences I'll hit it again.

Jane Fox : 2/15/2007 10:06:51 AM

AD line at +250 so I wouldn't be getting too excited about trading right now.

Jeff Bailey : 2/15/2007 10:06:07 AM

Baker Hughes (BHI) $66.50 -7.55% ... per (10:00:58) chart, its MONTHLY S1 is $64.83.

Keene Little : 2/15/2007 10:02:40 AM

Looks like a push back up to at least hit some stops. I would not be comfortable buying this. If the DOW pushes a little higher watch 12770 area as I've got some potential trend line resistance there.

Jeff Bailey : 2/15/2007 10:02:34 AM

Caterpillar (CAT) $67.60 +2.17% ... gapped above its 200-day SMA ($66.81). Volume looks rather light.

Jeff Bailey : 2/15/2007 10:01:46 AM

3M (MMM) $77.18 +0.44% ... 200-day SMA alert.

Jane Fox : 2/15/2007 10:01:21 AM

WASHINGTON (MarketWatch) - U.S. monthly capital flows reversed in December to an outflow for the first time since June 2005, the Treasury Department reported Thursday.

The U.S. recorded an outflow of $11 billion in December, compared with an inflow of $70.5 billion in November, the Treasury said.

The figure includes both long-term and short-term securities. The outflow resulted from total sales of $42.5 billion in both long-term and short-term securities by private investors. These sales were partially offset by $31.5 billion in purchases by official institutions.

Jeff Bailey : 2/15/2007 10:00:58 AM

Baker Hughes (BHI) $66.76 -7.23% ... Daily interval bar chart with MONTHLY Pivot retracement at this Link

Jane Fox : 2/15/2007 10:00:35 AM

TICKS +800 so any thoughts of the bears ruling today are probably gone.

Jeff Bailey : 2/15/2007 9:51:51 AM

While I feel the reaction to BHI's forward guidance is way overdone to the downside, the stock "shouldn't have" moved this far below near-term upward trend.

Jeff Bailey : 2/15/2007 9:50:18 AM

Baker Hughes (BHI) $66.16 -8.03% ... Bar chart with conventional retracement and trends at this Link

Jeff Bailey : 2/15/2007 9:43:41 AM

Swing trade covered call buy back alert ... Buy back the Baker Hughes BHI Mar $75 Call (BHI-CO) at the offer of $0.15

BHI $65.40 -9.09% ...

Keene Little : 2/15/2007 9:43:39 AM

CAT is singlehandedly holding the DOW up this morning. CAT gapped up again, currently up +2.7%.

Jeff Bailey : 2/15/2007 9:40:52 AM

Baker Hughes (BHI) $65.34 -9.17% ... Earnings Press Release Link ...

Jane Fox : 2/15/2007 9:38:24 AM

The disconnect between ES and the VIX was why I was saying yesterday to not buy the new highs. This may translate into a bearish day today. Link

Jane Fox : 2/15/2007 9:37:28 AM

NEW YORK (MarketWatch) - Gold futures edged higher early Thursday, buoyed by a slight rise in energy prices and a weak dollar after a mixed batch of economic data.

Gold for April delivery was last up $1.60 at $673.60 an ounce on the New York Mercantile Exchange. On Wednesday, gold closed up $3.50 at $672 an ounce.

Other metals prices were mixed. March silver was up less than a cent at $13.970 an ounce. April platinum climbed $1.60 at $1218.70 an ounce, while March palladium dropped $1.90 at $343.95 an ounce. March copper was up 10 cents at $2.6770 a pound. Demand for gold in 2006 was a record $65.3 billion, despite a fall in tonnage and reduced supply, according to figures released by the World Gold Council on Wednesday.

Jeff Bailey : 2/15/2007 9:35:22 AM

Baker Hughes (BHI) alert! $66.40 -7.70% ... sharply lower after earnings. Traders should be stopped at $66.90.

Jane Fox : 2/15/2007 9:34:12 AM

AD line is a netural +90 and AD volume is basically 0. No one has the ball this morning.

Keene Little : 2/15/2007 9:27:53 AM

If Japan raises their interest rate that could have a negative impact on investments around the world, including our stock market. That's because of the yen carry trade where investors have borrowed money in yen at ridiculously low interest rates and invested it elsewhere. It's part of the problem with excess liquidity sloshing around the world. If investors cash in their investments in order to pay back their yen loans then that could cause some selling pressure in other assets.

Jane Fox : 2/15/2007 9:25:43 AM

Yesterday the US $ fell but Gold did not make the kind of gains you would have expected which just goes to show these two are connected but certainly not tick for tick. Link

Jane Fox : 2/15/2007 9:19:42 AM

Dateline WSJ - TOKYO -- The robust growth in Japan's economy in the October-December quarter reinforced expectations among some economists that the Bank of Japan may raise interest rates next week.

Gross domestic product, the widest measure of economic activity, grew 1.2% from the previous quarter in real, or price-adjusted, terms, according to preliminary data announced by the government Thursday. In annualized terms, that is 4.8% growth - the fastest rate of expansion since the January-March quarter of 2004.

The increase was due primarily to a sharp rebound in private consumption from an unusually low level in the previous quarter, which was caused by cool summer weather. Private consumption grew 1.1% in the most recent quarter, after shrinking 1.1% in the July-September period.

Jane Fox : 2/15/2007 9:11:52 AM

Markets hovered around their PDRs overnight which is about most as bullishness one could expect after yesterday's gain. Anyone who expected more gains overnight was just been plain unrealistic.

Notice the difference in the large cap markets compared to the small cap, Russell. Yesterday ER retraced almost all of its rally, something you don't see too often, large caps retaining their gains and the small caps losing theirs. Link

Keene Little : 2/15/2007 9:09:51 AM

We've got a mixed signal from the premarket futures with only the DOW futures showing some bullish enthusiasm. Watch for a potentially volatile opening in the market. I'm still short YM with a stop at 12795. If stopped out on a spike up I may try a quick reentry if it looks like the spike is going to fail. It will be read and react in that case. If the techs join in on the upside then I'll stand aside and wait to see what they do.

Jane Fox : 2/15/2007 9:05:51 AM

WASHINGTON (MarketWatch) -- After years of disputing the case for global warming, the United States is now eager to join with other nations to reduce greenhouse-gas emissions and limit climate change, Democratic and Republican politicians told legislators from around the world at a Capitol Hill conference Wednesday.

Jane Fox : 2/15/2007 8:54:39 AM

Bernanke is again due to talk, this time in front of the Senate, though he's likely to have made most of his more important points during Wednesday's testimony.

Jane Fox : 2/15/2007 8:53:51 AM

WASHINGTON (MarketWatch) - Manufacturing activity in the New York area in February rebounded after two straight soft months, the New York Federal Reserve Bank said Thursday.

The bank's Empire State general business conditions index rose to 24.4 in February from 9.1 in January. The index has slipped in December and January after peaking at 25 in November.

The increase was unexpected. Economists were forecasting the index to slip to 8.7, according to a survey conducted by MarketWatch

Jane Fox : 2/15/2007 8:53:10 AM

WASHINGTON (MarketWatch) - Prices paid for goods imported into the United States fell 1.2% in January on large declines in petroleum and natural gas prices, the Labor Department reported Thursday.

Imported petroleum prices fell 7.3%. Imported natural gas prices plunged 12% after rising 11% in December and 43% in November.

Excluding fuels such as crude oil and natural gas, however, prices rose 0.3%, the third straight increase. Excluding only petroleum, import prices were unchanged.

Over the past year, import prices are up just 0.1%, as the price of petroleum has fallen 7.3%. Import prices excluding fuels are up 2.8% in the past 12 months.

Jane Fox : 2/15/2007 8:52:26 AM

WASHINGTON (MarketWatch) - The unemployment lines grew longer last week, in part because of bad weather in the Midwest and Northeast, the government reported Thursday. The number of people collecting unemployment benefits rose to the highest level in a year.

Seasonally adjusted initial jobless claims increased by 44,000 to 357,000 in the week ending Feb. 10, the Labor Department said. It's the highest level since late November. And it's the largest weekly increase since September 2005, just after Hurricane Katrina devastated New Orleans.

A "small portion," less than a quarter, of the increase was due to inclement weather in the Midwest and Northeast, a Labor Department spokesman said.

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