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OI Technical Staff : 3/2/2007 9:59:59 PM

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Jeff Bailey : 3/2/2007 6:59:36 PM

Weekly/Monthly Index Pivot Matrix found at this Link ... No idea what a "corrective 3-way bounce" is, but there's two very correlative levels of important support next week. RUT.X is one of them.(see Keene's 04:10:49)

Jeff Bailey : 3/2/2007 6:16:20 PM

Closing U.S. Market Watch found at this Link

April Crude Oil's (cl07j) 7-day winning streak comes to an end.

Jeff Bailey : 3/2/2007 6:05:36 PM

Looks like the end of a "4 wave" bull move doesn't it?

NYSE NH/NL Ratio Chart at this Link

Jeff Bailey : 3/2/2007 5:56:23 PM

Closing Internals found at this Link

Jeff Bailey : 3/2/2007 5:44:16 PM

NYSE's 10-day NH/NL ratio gives a "sell signal" at today's closing measure of 82.9% (84.00 on your PnF chart). Recent low was 1/11/07 at 88.9% (90.00 on your PnF Chart).

Jeff Bailey : 3/2/2007 5:02:43 PM

Just 2 days into March, but NYSE volume up 29% from February. NASDAQ volume up 21%.

Jeff Bailey : 3/2/2007 5:01:55 PM

Monthly volume patterns looking similar to December'05 and January'06.

Jeff Bailey : 3/2/2007 4:54:30 PM

BIX.X 392.57 -0.87% ... Next WEEK's Pivot Levels ... 376.35, 384.46, Piv= 397.37, 405.48, 418.39.

Jeff Bailey : 3/2/2007 4:40:19 PM

VIX.X 18.61 ... Next WEEK's Pivot Levels ... 7.30, 12.95 (know that level all too well), Piv= 16.18, 21.83, 25.06.

Jeff Bailey : 3/2/2007 4:28:47 PM

SPY official close looks $138.67 -1.30% ... Next WEEK's Pivot Levels would be ... $133.18, $135.92, Piv= $140.94, $143.68, $148.70

Jeff Bailey : 3/2/2007 4:17:44 PM

US Bank Business Loans Up $3.5 Billion In Latest Week

U.S. banks' commercial and industrial loans rose $3.5 billion to about $1.2 trillion in the week ended Feb. 21, the latest week for which data are available, the Federal Reserve said Friday.

That followed a $500 million increase in these loans to businesses the previous week.

Jumbo certificates of deposit grew $800 million to about $1.749 trillion in the latest weekly data, after growing $9.6 billion the previous week.

Revolving home equity loans rose $600 million to $470.7 million after falling $200 million the previous week.

Jeff Bailey : 3/2/2007 4:14:52 PM

Next level of downside is 12,063.

Jeff Bailey : 3/2/2007 4:14:29 PM

YM 12,107

Jeff Bailey : 3/2/2007 4:14:04 PM

YM "in the zone" from 12,109-12,114

Jeff Bailey : 3/2/2007 4:13:27 PM

YM 12,109

Jeff Bailey : 3/2/2007 4:13:12 PM

YM 12,113 ... low has been 110

Jeff Bailey : 3/2/2007 4:12:38 PM

SPY $138.75 -1.25% ... edges under DAILY S1.

Jeff Bailey : 3/2/2007 4:11:57 PM

VIX ... ticks to new session high.

Jeff Bailey : 3/2/2007 4:10:56 PM

SPY $138.82 -1.20% ... yet to trade DAILY S1 ($138.76)

Keene Little : 3/2/2007 4:10:49 PM

So, best guess for Monday is a quick sell off in the morning to a minor new low below yesterday's and then start the a-b-c bounce to correct this decline. This updated RUT 60-min chart shows what I would expect to see. That leg up next week will not be a straight line though--it will be some kind of corrective 3-wave bounce or more complex (think chop and whipsaws). Link

Jeff Bailey : 3/2/2007 4:10:16 PM

5 minutes, 5 minutes until cash session close.

Jeff Bailey : 3/2/2007 4:08:38 PM

YM 12,114 ... gets the trade at DAILY S1.

Jeff Bailey : 3/2/2007 4:06:44 PM

Sell program Premium YM 12,117 : SPY $138.89

Jeff Bailey : 3/2/2007 4:06:15 PM

That's DHF's 12/15/06 relative low close. Had a 0% retracement there.

Jeff Bailey : 3/2/2007 4:04:55 PM

DHF alert! 28,200 blocked at $4.17.

Jeff Bailey : 3/2/2007 4:03:22 PM

YM 12,119

Keene Little : 3/2/2007 4:01:12 PM

Dropping to new lows now is actually going to be bullish I think for next week. The low now gives today's decline off the high an impulsive feel to it. That could mean it's the final 5th wave in the stair-stepping lower after Tuesday's drop. It would set up a relief rally on Monday and probably rally into a Friday high (with more than a few major whipsaws along the way).

Jeff Bailey : 3/2/2007 4:01:00 PM

YM's low 12,117

YM 12,119

Jeff Bailey : 3/2/2007 3:59:02 PM

VXO.X 19.27

Jeff Bailey : 3/2/2007 3:58:30 PM

YM 12,118

Jeff Bailey : 3/2/2007 3:58:10 PM

YM short close out alert 12,120

Jeff Bailey : 3/2/2007 3:53:34 PM

Finger on the button alert ... YM 12,141

Jeff Bailey : 3/2/2007 3:53:09 PM

YM short entry alert 12,144

Jeff Bailey : 3/2/2007 3:50:03 PM

YM short setup alert ... go short a trade at 12,144, stop 12,154 , target 12,120

YM 12,155.

Jeff Bailey : 3/2/2007 3:43:03 PM


DJ- Federal bank, thrift and credit union regulators propose guidance that would instruct lenders to use more caution when underwriting "teaser" rate adjustable-rate mortgages to decrease the number of borrowers qualifying for certain subprime loans.

Keene Little : 3/2/2007 3:38:58 PM

I guess I should add that another thing the bulls can hope for is that we chop a little lower and put in another minor new low with bullish divergences. That could then count out well as a completion of wave-1 down from last week's high. That would set us up for the corrective a-b-c bounce next week. At this point it's looking like we're going to go home for the weekend with diametrically opposed ideas as to what could happen on Monday, especially since it could move a few hundred DOW points either way, and quickly. I hate it when that happens.

Keene Little : 3/2/2007 3:30:30 PM

The "Black Monday" idea was prompted by the potential consolidation pattern I'm seeing on the charts. First of all, if the DOW holds above this afternoon's low it could start its c-wave up to complete an a-b-c bounce off yesterday's low to give us the completion of a 2nd wave correction by Tuesday. Equality in its bounce would be at 12343 and if the 2nd leg up goes to 162% then that gives us 12485. That's showin in the darker red price depiction here. Link

The reason I have the other count on there (kind of a pink color) inside a sideways triangle is because we might have completed wave-A down on Tuesday instead of wave-1 yesterday and we're in the process of finishing up the triangle B-wave. This calls for a little higher (although it doesn't have to get back up to the top of the triangle) and then we'd get another leg down that is at least equal to this week's decline in both time and price. Link

That would not necessarily be a Black Monday but it would mean continued selling next week with a move down to DOW 11530 area (if the final bounce here gets to about 12220). The best thing the bulls can hope for, at least for the short term, is that the DOW gets above 12300 in order to negate this more bearish sideways triangle pattern.

Jeff Bailey : 3/2/2007 3:25:46 PM

Oracle (ORCL) $16.81 +0.23% ... has inched green. Other than TLT $90.12 +0.42% stuff is still red.

Keene Little : 3/2/2007 3:20:36 PM

SPX is still struggling with its downtrend line from Monday through yesterday afternoon's high, testing it again near 1394.

Jeff Bailey : 3/2/2007 3:14:28 PM

TRIN has seen trade above DAILY Pivot.

Session lows will be important for the Dow/S&P

Jeff Bailey : 3/2/2007 3:12:34 PM

03:00 Internals found at this Link

Jeff Bailey : 3/2/2007 3:02:55 PM

03:00 Market Watch at this Link

Jeff Bailey : 3/2/2007 3:00:06 PM

Bears have been a little "eager" above DAILY S1. Perhaps selling some premium? Not allowing VXO.X to get the trade at DAILY R1?

Jeff Bailey : 3/2/2007 2:59:11 PM

If buyers are going to step up to the close, this has got to be the point.

Jeff Bailey : 3/2/2007 2:58:31 PM

YM 12,147 ... 19.1% dynamic.

Jeff Bailey : 3/2/2007 2:56:04 PM

DHF $4.28 -1.38% ... don't know what its NAV is, or has been.

All we do "know" is what its SEC yield is at any given point in time.

Jeff Bailey : 3/2/2007 2:54:14 PM

"No Wonder" it has had trouble falliing below $10.00. Can't imagine being short something at a "discount" and having to pay that type of yield too.

Jeff Bailey : 3/2/2007 2:52:15 PM

Good gravy! ... PHF's net asset value as of 02/22/07 has surged to $10.42. Link

Jeff Bailey : 3/2/2007 2:46:30 PM

YM's 50% dynamic 12,187. "Dynamic" is simply a retracement from the regular session high, to regular session low.

Jeff Bailey : 3/2/2007 2:43:58 PM

VXO.X 18.78 ... never has traded DAILY R1. "gap lower" on 5-minute interval.

Jeff Bailey : 3/2/2007 2:42:57 PM

Oh my goo... YM 12,179

Jeff Bailey : 3/2/2007 2:41:17 PM

Somebody did some selling at the open. DF traded as high as $50.50.

Keene Little : 3/2/2007 2:46:49 PM

It could be interesting if as we head into the end of the day some fear enters the market and we get a final flush in the selling. A 38% retracement of the July-February rally is at SPX 1371. If selling were to start to acclerate this afternoon I could see fear of a Black Monday gripping traders. That's just speculation but not out of the realm of possibilities. I don't think we're set up for a Black Monday but then again I didn't think we'd see a sell off quite as strong as Tuesday's was.

Jeff Bailey : 3/2/2007 2:40:35 PM


Shares climb 3.5% as Dean Foods plans to pay a special dividend of $15 a share, returning an estimated $2 billion to stockholders. Dividend will be funded by recapitalization of balance sheet. Firm's bonds slammed by news.

DF $46.98 +3.50% ... probably a good day to buy DF's corporate paper, short the stock?

Jeff Bailey : 3/2/2007 2:38:03 PM

Speaking of dividends ...

Jeff Bailey : 3/2/2007 2:35:10 PM

Note: ... For those that my not know, StockCharts.com will "adjust" historical prices of a security for any dividend payment. In the case of BA, StockCharts doesn't show the stock having traded $92.05 on 11/21/06 (even though it did). When they deduct dividend distribution(s) after that date, StockCharts' chart doesn't reflect pure supply/demand. Somebody paid $92.00 on 11/21/06.

Jeff Bailey : 3/2/2007 2:32:00 PM

Boeing (BA) $87.64 -0.23% ... Dorsey/Wright's PnF chart Link

Jeff Bailey : 3/2/2007 2:26:11 PM

AEROspace Airline sector bullish % "bear alert" at 60%.

Jeff Bailey : 3/2/2007 2:24:44 PM

Nope ... Dorsey's solid resistance below $93.00. (November, then twice in February).

Jeff Bailey : 3/2/2007 2:23:04 PM


DJ- Aircraft maker stops buying parts for new C-17s as part of a production shutdown after Pentagon doesn't include more planes in its budget request. Boeing sees "significant" job cuts starting in early 2008 with a complete shutdown in mid-2009.

BA $87.54 -0.35% Link ... Looks like a "bull trap" on StockCharts' PnF chart.

Jeff Bailey : 3/2/2007 2:18:39 PM

VXO.X 19.48 ... session high. DAILY R1 19.93.

Jeff Bailey : 3/2/2007 2:18:07 PM

YM 12,120 ... new session low. Jury's out on DAILY S1.

Jeff Bailey : 3/2/2007 2:15:28 PM

The SPY Apr $144 (SFB-PN) are $5.60 x $5.80.

$144 - $5.60 = $138.40

SPY $139.22 -0.91% ...

Jeff Bailey : 3/2/2007 2:12:50 PM

Price/premium check ... SPY Mar $134 SFB-OD currently bid/ask $0.70 x $0.80.

May sell a covered put in coming sessions.

Jeff Bailey : 3/2/2007 2:11:00 PM

Tension builds for the SPY $139 strike ... ya think?

Jeff Bailey : 3/2/2007 2:10:28 PM

VIX.X 18.29 ... did kiss DAILY R1 of 18.36. That's the current session high.

Jeff Bailey : 3/2/2007 2:06:53 PM

Good Gravy! ... bullish catipult for the yen on 02/27/07 for March contract. 02/28/07 for June.

Jeff Bailey : 3/2/2007 2:05:07 PM

Dorsey's NYSE Bullish % (BPNYSE) reversed lower to "bear alert" status yesterday.

Jeff Bailey : 3/2/2007 2:01:11 PM

How's that gold/yen observation doing?

Forex Currency Link

Jeff Bailey : 3/2/2007 1:43:58 PM

BRK.B $3,572.00 +0.50% ... has been bumping WEEKLY Pivot/DAILY R1 overlap.

Jeff Bailey : 3/2/2007 1:42:36 PM

BRK.A $107,490 +0.83% ...

Jeff Bailey : 3/2/2007 1:41:24 PM

AIG $69.75 +3.47% ...

Jeff Bailey : 3/2/2007 1:41:08 PM

IUX.X 388.40 +0.60% ... only equity-based index in the green.

Jeff Bailey : 3/2/2007 1:40:33 PM

YM 12,151 again ...

Jeff Bailey : 3/2/2007 1:38:41 PM

VXO 19.01 ... it's DAILY R1 at 19.94.

Jeff Bailey : 3/2/2007 1:37:29 PM

VIX 18.18 ... DAILY R1 not yet traded at 18.36.

Jeff Bailey : 3/2/2007 1:36:21 PM

Dynamic 50% at 12,189, 61.8% at 12,205.

Jeff Bailey : 3/2/2007 1:35:19 PM

YM short stop alert 12,158

Jeff Bailey : 3/2/2007 1:33:54 PM

YM short lower stop alert ... let's lower it to 12,158.

Session low has been 12,124.

Jeff Bailey : 3/2/2007 1:32:06 PM

SPY $139.16

Keene Little : 3/2/2007 1:32:05 PM

If we're to finish stair-stepping lower with one final low to finish the wave count it would mean yesterday's low was only the end of the 3rd wave and the bounce was another 4th wave. The fractal pattern between Wednesday and today suggests that's a decent possibility. So, using the RUT for this possbility this is how it might look as we head into next week. Link

Assuming we only poke to another minor new low I'm showing a Fib retracement of 62% of the wave-1 decline in 62% of the amount of time it took for that decline. This places the bounce back up to the broken uptrend line from August up near 806. Needless to say that kind of rally would have the bulls jumping for joy that the correction is over and it's time for new highs. It will be just the opposite--you'll want to sell your first born and use the money to get short.

Jeff Bailey : 3/2/2007 1:31:52 PM

Sell Program Premium ... YM 12,141

Jeff Bailey : 3/2/2007 1:26:14 PM

YM gets the trade at 12,151

Jeff Bailey : 3/2/2007 1:22:12 PM

YM 12,170 .... trades short-term upward trend now. From yesterday's low to that 12:40-45 afternoon low.

Jeff Bailey : 3/2/2007 1:21:09 PM

RUT.X 780.23 -1.36% ... percentage loser, but just about squared within pivots with other majors. DAILY S1 777.67 and MONTHLY S1 775.14.

Jeff Bailey : 3/2/2007 1:17:53 PM

NFI $7.66 -1.66% ... isn't "falling apart" at new 52-week low, but may weigh on market psychology.

Jeff Bailey : 3/2/2007 1:17:09 PM

NEW 15.06 -4.98% ... probing that $15 strike.

Jeff Bailey : 3/2/2007 1:14:47 PM

YM 12,179 ... DAILY Pivot (12,207) held as resistance ... so far.

Jeff Bailey : 3/2/2007 1:11:24 PM

01:00 Internals found at this Link

Keene Little : 3/2/2007 1:03:56 PM

Didn't the action yesterday morning LOOK VERY MUCH LIKE THE GLITCH on Tuesday. Very interesting! Could that 200 point drop and rapid climb be forced or manipulated to catch bears? If so, how could it be done. I think we should start hypothesizing stories on what is happening. Also, what affect have Cramer and Fast Money had on this market? I think it has increased the problems with the momentum players (daytraders).

Marie, you think the market could be manipulated. I'm shocked! (cough) The program trading by most houses (more often in unison than not) can make big swings in the market and much of it looks like manipulation but I think instead it's just herd action--they have their programs set for the same levels and program trades are triggered together.

As for Cramer I dislike him as much as I dislike Maria. All hype and fanfare and designed to get the public excited about buying stocks. Momentum is what drove the market higher in the face of too many bearish signs to mention briefly here. Momentum typically ends badly and Tuesday's decline was proof.

It probably won't be long before the doomsayers (and momentum short players) are saying it's the end of the world. That's when we'll be looking to buy. Ignore the talking heads and watch price action and you'll do a lot better. News is noise--the charts tell you what's setting up and then a news item simply becomes the trigger.

Jeff Bailey : 3/2/2007 1:02:09 PM

01:00 Market Watch found at this Link

Jeff Bailey : 3/2/2007 12:58:21 PM

YM 12,204 ... comes to pivot

Jeff Bailey : 3/2/2007 12:51:18 PM

IF the YM trades its DAILY S1, then snug the stop down to 12,158

Jeff Bailey : 3/2/2007 12:48:51 PM

VIX 17.40

Jeff Bailey : 3/2/2007 12:46:14 PM

YM 12,183

Jeff Bailey : 3/2/2007 12:45:37 PM

Yesterday's YM high came within 1 point of last month's MONTHLY S2.

Jeff Bailey : 3/2/2007 12:45:03 PM

YM 12,164

Jeff Bailey : 3/2/2007 12:44:51 PM

YM Day trader's 5-minute interval chart with DAILY (green) pivot retracement Link

Keene Little : 3/2/2007 12:44:29 PM

Doing something similar for NDX shows two equal legs down in the pullback from yesterday afternoon at 1724.77. Then wave-c up into MondayTuesday would project to 1775.41 for two equal legs up. Link

But another great setup would be a bounce back up to the broken uptrend line from November 3rd, which would place the bounce between a 50% and 62% retracement of this week's decline. A retest of that trend line would be a very sweet short play setup since you could place your stop just above it.

Keene Little : 3/2/2007 12:30:31 PM

In the a-b-c bounce that I show on the SPX chart (assuming for now that's what's playing out), we are in wave-b from yesterday's high. Since it's a correction to wave-a (the leg up from yesterday's low) it too will be a 3-wave move (or something more complex).

Therefore, looking for two equal legs down in the pullback from yesterday afternoon would be the place to look for a long play to catch the c-wave up into Monday/Tuesday's high. Two equal legs down from yesterday afternoon gives us a downside target of SPX 1389.99 (ES 1390.50) so if you'd like to try a long play watch that level for support.

Jeff Bailey : 3/2/2007 12:29:46 PM

YM short entry alert 12,180

Jeff Bailey : 3/2/2007 12:29:15 PM

YM 12,183

Jeff Bailey : 3/2/2007 12:29:06 PM

YM short setup alert go short a trade at 12,180, stop 12,216 , target 12,010

Jeff Bailey : 3/2/2007 12:23:06 PM

VIX 16.80 ... comes to DAILY Pivot/MONTHLY 38.2% overlap

Jeff Bailey : 3/2/2007 12:21:02 PM

NEW $15.13

Jeff Bailey : 3/2/2007 12:20:17 PM

NFI alert! $7.67 is new 52-week low.

Jeff Bailey : 3/2/2007 12:19:39 PM

YM slipping below its DAILY Pivot after gap fill.

Keene Little : 3/2/2007 12:09:24 PM

I'm working on a spreadsheet that gives the average moves for waves and the relationships between waves. Then we'll be able to see on a spreadsheet what we can expect for market moves. This comes from a huge database built from year's worth of market data. I'll have the average moves for wave patterns on the spreadsheet which I'll offer to those who are interested (once I have it finished I'll let you know).

As an example, if this week's decline was wave-1 and we're waiting for the wave-2 correction to complete, then using this database it tells me to expect close to a 50% retracement in price that should take about 62% of wave-1 in time. That's shown on this SPX chart that I posted earlier (using the Fib time cycle tool which projects time from yesterday's low based on the time it took for the decline from Feb 22 to yesterday): Link

Jeff Bailey : 3/2/2007 12:00:06 PM

BIX.X 396.61 +0.15% ...

RKH $159.47 -0.02%

BKX.X 115.15 -0.18%

Jeff Bailey : 3/2/2007 11:58:53 AM

HBC $86.48 -0.48% ...

Jeff Bailey : 3/2/2007 11:58:28 AM

NFI $7.76 -0.38% ...

Jeff Bailey : 3/2/2007 11:57:47 AM

SPY $140.06 -0.32% ... "subprime" still looks to be a bit of a drag.

Jeff Bailey : 3/2/2007 11:57:03 AM

Screen capture on NEW was just prior to trade at $15.24 ... session low now $15.23

Jeff Bailey : 3/2/2007 11:56:32 AM

Bullish swing trade stopped alert ... on NEW $15.24. 30-minute interval chart with just DAILY pivot retracement Link

Jeff Bailey : 3/2/2007 11:53:55 AM

NEW needs the buyers here ... $15.26 x $15.28

Jeff Bailey : 3/2/2007 11:48:48 AM

NEW ... 30-minute interval (50-pd is only near-term support) with WEEKLY/MONTHLY Pivot retracement at this Link

Jane Fox : 3/2/2007 11:46:53 AM

See you all on Monday and remember "Follow the VIX."

Jane Fox : 3/2/2007 11:47:08 AM

I think this will be a very good day to stay on the sidelines and it will be a good for me to take off early and go to Seattle for a little Sushi. The pass is horrid but for this Canadian a little snow is no big deal.

Jeff Bailey : 3/2/2007 11:32:19 AM

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

Keene Little : 3/2/2007 11:25:41 AM

If I could put in an order for how I want the market to go, here's what it would be--pull back a little further today and find support around SPX 1392.45 and then rally Monday/Tuesday to give us two equal legs up at 1421 which is also the location of the 50% retracement of this week's decline (ES 1422.75). Link

That would be a logical move for a 2nd wave correction and a great place to get short for the next leg down (assuming we've seen a market top). Wave-3 down is one bears want to participate in.

Jeff Bailey : 3/2/2007 11:23:11 AM

11:10 Internals found at this Link

Jeff Bailey : 3/2/2007 11:11:37 AM

11:10 Market Watch at this Link

Jeff Bailey : 3/2/2007 11:04:11 AM

NEW's DAILY R2 is $17.58, DAILY S2 $14.02

WEEKLY R2 $20.67, WEEKLY S2 $12.93

MONTHLY R2 $37.05, MONTHLY S2 $3.11.

Jeff Bailey : 3/2/2007 11:02:07 AM

Bullish swing trade raise stop alert ... on the 100 shares of New Century Financial (NEW) $15.45 -2.52% .... to $15.24.

Jeff Bailey : 3/2/2007 10:54:25 AM

SPY $140.41

Jeff Bailey : 3/2/2007 10:54:11 AM

VIX 16.04 now.

Jeff Bailey : 3/2/2007 10:53:54 AM

$137 ... didn't that level grab our attention in the SPY option montage?

Jeff Bailey : 3/2/2007 10:53:13 AM

Two very different tools, but give some very similar targets. Near-term RISK for a bear at a minimum is being measured to $142-ish. That's near-term REWARD for a bull.

Near-term RISK for a BULL is $138-ish.

We'll get new WEEKLY Pivot levels at the end of today's trade.

Keene Little : 3/2/2007 10:52:45 AM

The downtrend line from Monday through yesterday afternoon's high for SPX is currently near 1403.50 (ES 1404.75) so watch that level for resistance in case there's not enough bullish oomph today to push it any further.

Jeff Bailey : 3/2/2007 10:49:24 AM

SPY ... now a daily interval chart, but this time, what would be considered a conventional use of retracement. Simply measure two different expansions, then contractions Link

Not certain that $134 (MONTHLY S2) and current 50% conventional is a target for March, but some commonality. See 19.1%? Darned closed to MONTHLY Pivot.

Keene Little : 3/2/2007 10:22:34 AM

The market is only chopping higher and that tells me we should expect new lows this morning or that we'll just chop up and down sideways. Nothing here I'd want to trade.

Jeff Bailey : 3/2/2007 10:20:55 AM

SPY 60-minute interval with Dec, Jan, Feb and March's MONTHLY Pivot retracement (weekly is blue) at this Link

Jeff Bailey : 3/2/2007 10:18:09 AM

Now you might be saying "so what?" I'm not trading the VIX .... I don't use pivot levels ...

Jeff Bailey : 3/2/2007 10:14:47 AM

VIX 16.23 ... here's a 60-minute interval chart with Dec, Jan, Feb and now March's MONTHLY Pivot retracement (with observations) at this Link

Jane Fox : 3/2/2007 10:12:04 AM

AD line has "improved" to -946.

Jane Fox : 3/2/2007 10:07:37 AM

Man, I am glad I didn't go short. Man I am glad I didn't go long.

Jeff Bailey : 3/2/2007 10:02:31 AM

10:00 Market Watch found at this Link

Keene Little : 3/2/2007 9:59:56 AM

Not much happening yet. It being a Friday, after a tumultuous week, could be a quiet consolidation day. Don't force trades where there's not a crisp setup. Either that or dart in and out and scalp a couple of points at a time. I'd like to see the markets test their overnight lows and see if that support holds. That's the downside risk if you try to buy this morning's dip.

Jeff Bailey : 3/2/2007 9:59:46 AM

VIX 16.32 ... MONTHLY Pivot 14.71, MONTHLY 38.2% just above at 16.91.

I had the lower end of my MONTHLY Pivot retracement anchored at an incorrect level yesterday and this morning. Chart on its way.

Jane Fox : 3/2/2007 9:57:01 AM

McMillan's weekly commentary - The landscape has changed dramatically in the last week: volatility has increased substantially and weeks, if not months, of gains in most stocks have been wiped out. The question now becomes when and where will this decline end? Since our technical indicators were instrumental in warning us of this decline, we are of course going to rely on them to aid us in answering that question.

We were looking for a selloff -- in fact, a "sharp, but short-lived correction," to quote our comments last week. But we didn't know it would be this sharp, of course. $SPX has broken most of the major support levels it had established in its inexorable, stair-step rise over the past several months. Specifically, $SPX wiped out 3 months worth of gains in one day -- trading at the same price it had on December 1st, 2006. For $SPX, the 1430 level is now resistance, much as it was during December and January (see Figure 1). Until that level is overcome, the $SPX chart should be interpreted with a bearish bias. On a more positive note, Thursday's retest of the lows seems to have held, and that is a constructive sign.

The equity-only put-call ratios were prescient in warning of a decline by rolling over to sell signals in late January. Yes, they were a bit premature, but they resolutely remained on those sell signals ever since -- and they show no sign of turning bullish yet. Figures 2 and 3 show that are continuing to rise rather strongly as (too late) lots of traders rush to buy puts now. Eventually, those put buyers will overdo things, and the ratios will roll over and turn downward. Only then will they turn bullish, but that does not appear to be something that will happen soon.

Market breadth (advances minus declines) had been running at very overbought levels for quite some time. That is no longer the case. Now, breadths has generated sell signals. We are looking for breadth to get oversold -- something it hasn't done for months -- before generating buy signals. That, too, is something that isn't going to happen overnight.

Finally, there is the indicator that was perhaps most instrumental in our expectation of a correction: the volatility index, $VIX. It had traded below 10, and history showed that a sharp correction normally takes place after that. Now, $VIX has spiked upward. A buy signal occurs when $VIX makes a spike peak on its chart (see Figure 4). We would turn short-term bullish if $VIX generates a buy signal.

In summary, the decline was sharper than nearly anyone had expected. It was exacerbated, of course, by the fact that the bulls (or pigs, if you prefer) just kept pumping money into the market for so long, without giving it a chance to correct. Eventually, a little trigger like the Chinese stock market caused all the lemmings to try to get out the exit at once, and, in doing so, they nearly brought the house down. There has been major damage done to many accounts and buying is no longer on many of their minds (I cringed at the money manager being interviewed on CNBC, who was remaining bullish, but when asked what he was buying, answered "Nothing. I was -- and am -- 100% invested"). That may be the case for many of these managers: they are more likely to be sellers on rallies than to be buyers.

Jeff Bailey : 3/2/2007 9:52:34 AM

VIX 16.16 ... should the VIX close here today, next week Pivot levels would be 6.48, 11.32, Piv= 15.36, 20.20, 24.24.

Jane Fox : 3/2/2007 9:52:10 AM

I will not go short as long as the VIX is hovering around daily lows but every fiber in my body is screaming at me to get short.

Jeff Bailey : 3/2/2007 9:45:28 AM

VIX 16.17

SPY $140.19

Jane Fox : 3/2/2007 9:45:27 AM

IF SPX.x breaks its PDH then I think it is headed back to test its 50EMA (gold) and then we will reassess if it continues higher or not. Link

Jane Fox : 3/2/2007 9:43:24 AM

This is one of those times when the VIX is making new daily lows but we have a very bearish AD line and volume so I am hesitant to take a position on any side. However, if you have noticed the VIX has been the leader and if I had followed it I would have been OK. It is just very very hard to go long when the AD line and volume are so bearish.

Jane Fox : 3/2/2007 9:37:22 AM

VIX opens within its PDR and TRIN is 1.44.

Jane Fox : 3/2/2007 9:35:46 AM

AD line is a very bearish -1290 and AD volume well below 0 and falling. Not a time to be long.

Jane Fox : 3/2/2007 9:30:16 AM

Gold tested its PDL overnight and Oil tested its PDH. I think Gold's PDL will hold and that the US $'s PDL will break. Of course you have to realize that I am bullish on Gold longerterm so take that into consideration. I like to think I am not biased when I look at the charts but I am only human. Link

Keene Little : 3/2/2007 9:20:48 AM

Futures are all over the map with big overnight moves that are still within the consolidation range following Tuesday's huge drop. While there's a lot of money to be made with the swings if you catch them right, the challenge of course is not getting whipsawed. Futures were down big premarket but have already climbed quite a bit off the lows.

We'll still have a gap down this morning and the past two days on the 30-min chart will look like a fractal of each other. That might mean another push down to a minor new low like it did yesterday followed by another v-bottom. I had shown a chart on Tuesday that called for an "unwinding" of the wave count that called for two more lows as the decline stair stepped lower so that's still a possibility.

But yesterday's low left a large bullish divergence and it's just as likely that was the end of the 1st wave down. That would suggest you'll want to buy this morning's dip. The challenge of course is figuring out where the dip will end. A test of the overnight lows would be a good place to watch for a setup.

Jane Fox : 3/2/2007 9:12:04 AM

Dateline WSJ - Mitchel Guttenberg was $25,000 in debt to Erik Franklin when the two friends got together in 2001 to settle the obligation. The scheme they allegedly concocted that day in New York's cavernous Oyster Bar restaurant grew into one of Wall Street's biggest insider-trading cases in years.

Mr. Guttenberg, now 41 years old, agreed to relay advance word of potentially market-moving stock analysis by the Wall Street arm of Swiss bank UBS AG, where he was a research executive, to Mr. Franklin, now 39, a hedge-fund manager in those days at Bear Stearns Cos., authorities said.

Federal prosecutors and the Securities and Exchange Commission yesterday unveiled insider-trading charges against the duo and eleven others, including three other former brokers at Bear Stearns.

The participants in what the SEC called a "brazen" scheme allegedly earned about $15 million based on two strands of alleged inside information. The main one, from the UBS research, accounted for most of those gains. A second stemmed from leaks of takeover deals in the works at the blue-chip Wall Street firm Morgan Stanley.

Jane Fox : 3/2/2007 9:10:22 AM

Lower lows and highs mean the trend is down and that the bears were in control during the overnight session however, PDLs remained in tact. Link

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