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Keene Little : 3/7/2007 12:03:27 AM

Wednesday's pivot tables: Link and Link

OI Technical Staff : 3/6/2007 9:59:59 PM

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Jeff Bailey : 3/6/2007 7:06:54 PM

Daily/Weekly/Monthly Index Pivot Matrix for tomorrow at this Link ... I could probably mark the VIX DailyS2/Monthly Pivot and DailyR2/WeeklyR2.

Jeff Bailey : 3/6/2007 6:41:31 PM

Closing Internals found at this Link

Jeff Bailey : 3/6/2007 6:29:59 PM

April Crude Oil (cl07j) settled up $0.62, or +1.03% at $60.69.

Jeff Bailey : 3/6/2007 6:28:03 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 3/6/2007 4:14:48 PM

Sell Program Premium ... YM 12,216 : SPY $139.76

Jane Fox : 3/6/2007 4:08:51 PM

Dateline WSJ WASHINGTON -- Liquidity in financial markets isn't "in short supply" despite last week's market turmoil, a Federal Reserve official said.

Fed governor Kevin Warsh yesterday told the Institute of International Bankers in Washington that while "risk premiums"-the additional return an investor demands to hold a risky asset-"rose some last week, markets are functioning well...and overall liquidity does not appear to be in short supply." But he cautioned it is too soon for a "comprehensive" assessment.

Stocks world-wide fell sharply last week and yields on risk debt, such as bonds backed by subprime mortgages, rose sharply. Futures markets priced in a higher probability that the Fed would cut interest rates this year because of the Fed's history of easing monetary policy in response to disorderly market conditions, and because weaker stock prices and higher risk premiums often foreshadow economic weakness.

However, Fed officials have in the last week struck a sanguine tone, even arguing that periods of such volatility are healthy safeguards against investor complacency. That suggests little inclination as yet to cut rates.

Fed governor Randall Kroszner told a community bankers' meeting in Washington that "the outlook for the U.S. economy has not materially changed." Federal Reserve Bank of St. Louis President William Poole said in Santiago, Chile, that it would be wise for the Fed not to respond to the trouble through its monetary policy "until you have a better idea of what's actually happening."

Jane Fox : 3/6/2007 4:07:19 PM

Remember the 2:00p.m. Fed Beige Book tomorrow.

Jeff Bailey : 3/6/2007 4:05:04 PM

US Official: US "Vigorously Opposed" To Iran Oil Deals

DJ- The Bush Administration was in talks with oil company chief executives and heads of states who were considering signing project deals with Iran in order to dissuade them from moving ahead, a State Department official said Tuesday.

Testifying before the U.S. House Foreign Affairs Committee, U.S. Undersecretary of State for Political Affairs Nicholas Burns Burns said the Administration had in recent weeks engaged relevant companies and countries in discussions about their potential investment in Iran's oil and natural gas sector.

Burns said he has told CEOs and prime ministers that the U.S. was "vigorously opposed" to the deals and that any agreements would "undermine international efforts to resolve the nuclear issue."

"Our discussions are intended to diminish the likelihood of seeing them finalized," Burns said in his submitted testimony. Several oil companies, including Royal Dutch Shell (RDSA), Repsol YPF S.A. (REP), Statoil ASA (STO), Norsk Hydro ASA (NHY), Australia LNG and China's National Offshore Oil Corp. are preparing to sign several major oil and gas deals.

Earlier in the hearing, committee Chairman Tom Lantos, D-Calif., said he was proposing legislation that would greatly strengthen the Iran Sanctions Act and would require the Administration to sanction any companies that signed deals worth more than $20 million with Iran.

Keene Little : 3/6/2007 3:59:23 PM

This is a little longer term view of SPX that matches up with the DOW chart I showed earlier (2:33). After a 2nd wave bounce we should get a strong decline into the end of the month and the Fibs line up nicely for a drop down to the botom of its parallel up-channel which will be near 1330 by the end of the month. Link

A little bounce and then a break down from the channel should lead to a low into April that gets us down to the July low (1225 area). Then a larger rally to retest the broken trend line (could easily go a little higher than that) to be followed by some very strong selling into the summer. That's the bearish wave count and again, it assumes we've started the next bear market leg down.

Jeff Bailey : 3/6/2007 3:47:05 PM

NEW $5.03 +10.30% ... probes morning's gap up low.

Jeff Bailey : 3/6/2007 3:41:53 PM

DIA's March "Max Pain Theory currently tabulated at $124.00 ($1 increments).

DIA on a 60-minute interval (Monthly/Weekly Pivot retracements) Link

Keene Little : 3/6/2007 3:37:24 PM

Using yesterday's afternoon low as the end of the 5-wave move down for NDX, I'm going to focus on one of the bounce scenarios for now--an a-b-c bounce into next Monday (one of the scenarios I showed earlier on a 60-min chart (10:52 AM Link ). I now show the end of the bounce at its daily 50-dma at 1790. It could get as high as a 62% retracement at 1798 where it would retest its broken uptrend line but that would be ambitious of the bulls. Lots of alfalfa needed for that kind of move. But we'll see. The other likely failure point would be 1770-1780, within the previous wave-4 area. Link

Jeff Bailey : 3/6/2007 3:25:22 PM

SPY "lags" the YM/DIA juuuust a little in its MONTHLY Pivot retracement.

Keene Little : 3/6/2007 3:22:56 PM

Volatility hath returned.

Jeff Bailey : 3/6/2007 3:20:14 PM

Program Trading Collars In with NYSE Composite +180.

Jane Fox : 3/6/2007 3:17:28 PM

Well finally the bulls were able to pull the old rabbit out of the hat. Boy am I glad I stayed on the long side today. My faith in the internals has been restored.

Jeff Bailey : 3/6/2007 3:15:29 PM

03:00 Internals found at this Link

Keene Little : 3/6/2007 3:11:40 PM

Only 36 more DOW points and the bulls will be able to jump for joy that a +200-point day proves that the correction is over and it's time to get in the water. But those sand sharks are really baby Great Whites that are getting hungry.

Jeff Bailey : 3/6/2007 3:11:26 PM

SPY 140.00 +1.92% ...

Jeff Bailey : 3/6/2007 3:10:37 PM

YM alert ... 12,220

Keene Little : 3/6/2007 3:08:35 PM

The DOW has finally reached 1200 and is waffling a bit. The red count on the 30-min chart is not what the bulls want here since a drop back inside that wedge pattern (so a drop back below 12160)could be interpreted as quite bearish. A continuation higher to complete wave-a and then a b-wave pullback followed by another leg up in wave-c to complete wave-2 would be the ideal setup for bears to really get short (an Allied Van's worth). Link

Jeff Bailey : 3/6/2007 3:02:31 PM

03:00 Market Watch found at this Link

Keene Little : 3/6/2007 2:53:47 PM

The flip side to the bearish wave count of course is the bullish one that says we'll head to new highs following this pullback. The fact that we're finding a low inside the 161.8% Fib window on March 9th says the bullish wave count is a possibility and must be respected. And that's why a rally back above 12600 would be a serious blow to the bears and would prove the bulls right again about the benefits of buying the dip. I don't think that's what will happen and therefore anxiously await my turn to get short again, but price is the final arbiter.

Jeff Bailey : 3/6/2007 2:53:08 PM

Wish like heck I'd have held onto that $17.50 put.

Jeff Bailey : 3/6/2007 2:52:27 PM

NEW $5.55 +21.92% ... "softening up" a bit ... mid-point of day's range.

Jeff Bailey : 3/6/2007 2:51:40 PM

SPY $139.66 +1.68% ...

Jeff Bailey : 3/6/2007 2:51:23 PM

VIX 16.20 -17.47% ... taps its WEEKLY Pivot. First time this week.

Jeff Bailey : 3/6/2007 2:49:48 PM

Haven't seen anything out of Treasury Sec. Paulson (In S. Korea today)

Jeff Bailey : 3/6/2007 2:48:08 PM

Thailand's GDP Slows to 4.2% in Final Quarter MarketWatch Story Link

Keene Little : 3/6/2007 2:47:23 PM

As a reminder, the reason I like March 9th as a turn window (+/- a few days) is because of the past pattern of turn dates showing up on dates that have a Fib relationship to the 2000-2002 decline in the DOW. This weekly chart shows the Fib time projections and notice how well turns came on or around those Fib times. The next one is at 161.8% of the time it took for the 2000-2002 decline and falls on March 9th, this Friday. Link

A 2nd wave bounce after the high on Feb 20th (which was also inside a Fib turn window based on the cycle between peaks and valleys within the rally) has a good chance of peaking on that Fib turn date. We're in the window now which runs into next week so we have to be ready for a top to the bounce at any time.

Jeff Bailey : 3/6/2007 2:33:52 PM

Couldn't do much with a long stop at this point, if we had gotten filled at 12,142. May raise it up under that 12,164 low.

Keene Little : 3/6/2007 2:33:29 PM

Using the DOW daily chart I'm going to show the kind of downside potential we're looking at. Based on the decline to yesterday's low, which I'm labeling as wave-1 down, we should get a correction that takes about 62% of the time as wave-1 took and about a 50% retracement in price (43% being the most common in the database). So let's say we get a bounce back up to about 12400 by next Monday. From there we'd be due a very sharp decline in a 3rd wave, as shown here. Link

All the Fib levels and time projections on the chart make it look a little confusing but what I'm showing is a time projection off wave-2 where wave-3 should take about 153% of the time it took for wave-1 (again out of the database for these moves). That happens to be a Fib 13 days for wave-3 and would take us to the end of March.

I also projected price down to 138% of wave-1's move, so assuming wave-2 will top out around 12400 that then gives us about 11320 for the end of wave-3. That move down would be followed by another small bounce and a final low in April before setting up a larger degree 2nd wave rally into May.

These price and time projections are obviously conjecture on my part but I'm using a database of the relationships between waves to generate this depiction (and assuming for now that we're into a bear market leg down). Now we need to wait for price to confirm or negate the count. The bearish wave count would be negated with a rally above 12600.

Jeff Bailey : 3/6/2007 2:32:48 PM

YM 12,191 ... just creep'n higher.

Jeff Bailey : 3/6/2007 2:28:10 PM

Mar $140 Puts (SFB-OJ) are #3 (4,435:92,657) with Up/DnTick bullish at 694:2,937. Last $1.90.

Jeff Bailey : 3/6/2007 2:25:12 PM

SPY most active options at the CBOE are the Mar $141 Calls (20,903 : 35,133) with Up/DnTick Vol 242:456.

April $145 Calls (17,248 : 51,149) with Up/DnTick Vol 11,007:215.

Jeff Bailey : 3/6/2007 2:20:58 PM

USD/JPY 116.60 x 116.64 +0.95% ... Link

Jeff Bailey : 3/6/2007 2:16:32 PM

Fannie Mae (FNM) $54.03 +1.71% ...

Freddie Mac (FRE) $61.93 +0.92% ...

Jeff Bailey : 3/6/2007 2:06:21 PM

Bernanke: Wants GSE Portfolios Tied To Affordable Housing

DJ- Federal Reserve Chairman Ben Bernanke continued the central bank's push Tuesday to rein in the mortgage portfolios held by government-sponsored enterprises Fannie Mae (FNM) and Freddie Mac (FRE), alleging that the companies' size and structure posed a systemic risk to financial markets.

"Legislation to strengthen the regulation and supervision of GSEs is highly desirable, both to ensure that these companies pose fewer risks to the financial system and to direct them toward activities that provide important social benefits," Bernanke said by satellite to the Independent Community Bankers Association convention in Hawaii, according to prepared remarks.

Bernanke also proposed a new affordable housing standard that would determine the sorts of assets that make up the GSEs' portfolios.

"Do the GSE portfolios support affordable housing?" Bernanke said. "At the present time, Fannie and Freddie appear to fail this test."

Fannie Mae and Freddie Mac, which are both recovering from accounting scandals, hold a combined $1.4 trillion in their portfolios. Their top regulator, Office of Federal Housing Enterprise Oversight Director James Lockhart, has estimated that less than 30% of these portfolios contribute to meeting the GSEs' affordable housing goals.

Bernanke said the portfolios should be tied "almost exclusively" to holdings of mortgages and mortgage-backed securities linked to affordable housing.

"Tying the portfolios to a purpose that provides measurable benefits to the public would help to ensure that society in general - not just GSE shareholders -receives a meaningful return in exchange for accepting the risks inherent in the portfolios," he said.

The Fed chairman said he was not trying to suggest that the companies increase their share of holdings linked to subprime mortgages.

"Orienting the GSEs' portfolios more toward affordable housing is an approach which can succeed under the current GSE credit standards," Bernanke said.

Bernanke focused a large part of his speech on the unique risks he said Fannie Mae and Freddie Mac pose to the broader economy.

"These ingredients - the large presence of the GSEs in financial markets, the lack of market discipline exercised by investors in GSE senior debt, and the incentives for continued portfolio growth - led the Federal Reserve Board to conclude that while the GSEs do not seem to pose an immediate risk of financial difficulty, their portfolios continue to represent a potentially significant source of systemic risk," he said.

He said the companies profit because of a market perception that the U.S. government will not let either company fail.

"The perception of government backing allows Fannie and Freddie to borrow in open capital markets at an interest rate only slightly above that paid by the U.S. Treasury and below that paid by other private participants in mortgage markets," he said. "By borrowing at this preferential rate and purchasing assets that pay returns considerably greater than the Treasury rate, the GSEs can enjoy profits of an effectively unlimited scale."

While Bernanke said any new GSE regulator should have strong powers to control the companies' capital requirements, he did not comment on a proposed affordable housing fund that congressional Democrats have insisted will be a crucial element to their GSE reform plans.

The fund is expected to funnel close to $500 million each year from the GSEs into affordable housing. Rather, Bernanke focused his affordable housing remarks on the companies' portfolios.

Bernanke's comments, which were more detailed but largely consistent with past Fed statements, come at a time when some of the GSEs' largest government critics have softened the rhetoric surrounding Fannie Mae and Freddie Mac's problems.

Next week, the House Financial Services Committee plans two hearings on GSE reform. The Fed has not been asked to testify at either event. The Fed was also not a party to the negotiations late last year between Treasury Secretary Henry Paulson and House Financial Services Committee Chairman Barney Frank, D-Mass.

Before those negotiations, Treasury had largely supported the argument that the portfolios held by Fannie Mae and Freddie Mac should be reduced by prohibiting the companies from holding certain assets in their portfolios.

The proposal did not, however, contain the provision that Bernanke mentioned, namely that the portfolios be tied almost exclusively to affordable housing.

The Treasury/Frank compromise would give a new regulator broad control and discretion over the portfolios held by both companies.

Bernanke's comments came in his first speech devoted solely to the GSE issue since becoming Fed chairman last year.

Jane Fox : 3/6/2007 1:58:01 PM

I know you have all seen the AD volume look like this before and should have kept you out of shorts today even though price didn't start off all that bullish. Link

Jane Fox : 3/6/2007 1:54:20 PM

It doesn't get much more bullish than that.

Jane Fox : 3/6/2007 1:54:03 PM

AD volume to new daily highs.

Jane Fox : 3/6/2007 1:53:52 PM

VIX to new daily lows.

Jane Fox : 3/6/2007 1:53:44 PM

TRIN 0.49.

Jane Fox : 3/6/2007 1:53:34 PM

AD lines +2150!

Jane Fox : 3/6/2007 1:53:16 PM

Markets ram up against their PDHs and come to a screeching haul.

Jeff Bailey : 3/6/2007 1:50:13 PM

US 4-Week Bills: 5.140%; 25.23% At High

DJ- The U.S. Treasury awarded $25.00 billion in four-week bills at Tuesday's auction at a high rate of 5.140%.

The Treasury received bids totaling $70.58 billion and accepted $25.00 billion, including $472.13 million of noncompetitive tenders. The dollar price was 99.600222 and the investment rate, or bond-equivalent return, was 5.247%.

There were no tenders from foreign and international monetary authority accounts.

The bid-to-cover ratio, an indication of demand, was 2.82, Treasury said.

Tenders submitted at the high yield were allotted 25.32%.

The Federal Reserve purchased $3.04 billion in bills for its own account. When the auction was announced, the Fed held $18.06 billion of maturing bills, and in Monday's auction the Fed purchased $15.01 billion in three- and six-month bills.

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

The median rate was 5.130%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Treasury received $5.03 billion worth of indirect bids, which include foreign and international monetary authorities placing bids through the New York Federal Reserve Bank.

Treasury accepted $2.94 billion worth of the indirect bids.

Of the competitive bids accepted, 5% were tendered at or below the rate of 5.110%.

The high rate was down from 5.160% at the previous four-week bill auction. It was the lowest rate since 5.135% at the auction on Feb. 12, 2007.

The issue is dated March 8 and matures on April 5.

The CUSIP number on the four-week bill is 912795ZA2.

Keene Little : 3/6/2007 1:47:22 PM

The bulls need about a +200 point day on the DOW. That will get them all excited again about the wonderful buying opportunity this "correction" has been (and kicking themselves for not buying lower). The number of bulls that are proclaiming this as a great buying opportunity is astounding. While the VIX is up there is still very little fear about this market and that's very typical.

Once this bounce is finished (I'm assuming for now we've started a 2nd wave bounce) every analyst out there will be declaring the correction is over and everyone should be long the market. Once the 3rd wave down gets underway, and breaks to new lows, that's when the uh-oh light goes on and the selling intesifies. That's why I want to get short at the end of this bounce and hopefully it will set up for a Friday/Monday high.

Jane Fox : 3/6/2007 1:46:07 PM

I'm long ES but should have picked ER.

Jane Fox : 3/6/2007 1:45:31 PM

Oh my goodness ES is now testing its PDHs. Been a while.

Jane Fox : 3/6/2007 1:44:02 PM

Keene I'm waiting. I know you will come back with another song that will get stuck in my head.

Jane Fox : 3/6/2007 1:43:01 PM

Ok how many of you are now singing that old Beatles song "Yesterday"?

Jane Fox : 3/6/2007 1:42:08 PM

Back in the old days (sniff) when the bulls had the reins, a day like today would be a slam dunk long and stay long. But that was "Yesterday" and now it seems so far away.

Keene Little : 3/6/2007 1:36:08 PM

Just in time. Now the bulls need to keep it going.

Jeff Bailey : 3/6/2007 1:35:04 PM

Buy Program Premium ... YM 12,173 : SPY $139.37

Keene Little : 3/6/2007 1:24:37 PM

The bulls need to get something going here and soon. The climb today is looking weak so far and has a bit of an ascending wedge look to it. Even the RUT, which is stronger today, looks as though the bounce could fail at any moment. Within the bounce off yesterday afternoon's low we're hitting some internal Fib projections for the bounce that suggests a turn back lower from here could see selling into the close again. Button up your stops if you're long and trying to play the bounce.

Jeff Bailey : 3/6/2007 1:21:10 PM


DJ- Despite the gloom and doom of defaults surrounding subprime loan, not all lenders are at death's door. In some instances, quite the opposite. Moody's has Countrywide Financial under review for a possible upgrade.

CFC $36.81 +4.57% Link ...

Jane Fox : 3/6/2007 1:20:01 PM

GREENWICH, Conn. (MarketWatch) - Wireless telecom pioneer Craig McCaw is at it again.

His latest venture, Clearwire Corp., has amassed the nation's second largest spectrum position in the attractive 2.5 gigahertz over the last three years and has begun to deploy an advanced next generation wireless network ("WiMAX") capable of providing broadband connectivity without being confined by a physical location.

Initially capitalized with $207 million in 2004, it raised an additional $1.1 billion in 2006 mostly from tech heavyweights Intel (INTC) and Motorola (MOR) .

Clearwire (CLWR) plans to continue to opportunistically acquire spectrum and roll out its networks both domestically and abroad in a bet that WiMAX will gain mass adoption among the growing number of broadband users.

Jane Fox : 3/6/2007 1:16:00 PM

If you want to try a long pick one of your stronger markets like ER. Link

Jane Fox : 3/6/2007 1:14:50 PM

WASHINGTON (MarketWatch) -- Demand for U.S.-made manufactured goods dropped 5.6% in January, the largest decline since July 2000, the Commerce Department reported Tuesday.

A 60% plunge orders for new civilian aircraft led the decline, but most industrial sectors saw falling demand in January.

Orders for core capital equipment -- the kinds of goods businesses invest in so they can produce other goods and services -- fell 6.3%, the biggest decline in three years. Core capital equipment orders exclude defense goods and civilian aircraft.

Jane Fox : 3/6/2007 1:13:57 PM

Dateline WSJ - Much like the growth in gross domestic product, worker productivity during the fourth quarter of last year looked great the first time around only to be slapped with a steep revision on the government's second read. The Labor Department said productivity increased 1.6% during the last three months of last year, much weaker than the original 3% estimate. "Surging productivity had been the ticket to huge increases in profits over the past three years," wrote economist Joel L. Naroff. "That appears to be history." At the same time, unit labor costs jumped 6.6%, up from the original reading of 1.7%. Policy makers believe that slowing economic growth will eventually hose down inflation, but the whiff of inflation in this report will make the Fed's job harder, economists said. "Even as signs of weakness in the economy accumulate, it is clear that the underlying rate of inflation is rising," wrote Global Insight's Nariman Behravesh. "Thus, the Fed's room to maneuver is becoming much more limited. Specifically, the probability of any cut in rates this year has diminished considerably."

Other economic news out today underlined the downward pressure on growth, and as has often been the case recently the worst numbers were coming out of the factory and homes sectors. The Commerce Department reported that factory orders dropped 5.6% during January, and last week's disappointing numbers on durable-goods demand were revised lower to show an 8.7% drop; the previous report showed a 7.8% decline. Separately, the National Association of Realtors said its index of pending sales of existing homes for January declined by 4.1%, but the trade group said the numbers suggested that the housing market is now on the comeback trail. "We are seeing temporary near-term weather disruptions in much of the country, but there is an underlying pattern of stabilization in the housing market," the Realtors' chief economist, David Lereah, said. But some economists scoffed at that spin. Richard Iley of BNP Paribas said that the report was "weak data which again underline the foolhardiness of attempting to claim that the housing market is close to bottoming out."

Jeff Bailey : 3/6/2007 1:12:08 PM

01:00 Internals found at this Link

Jeff Bailey : 3/6/2007 1:02:15 PM

01:00 Market Watch found at this Link

Jeff Bailey : 3/6/2007 12:54:12 PM

YM Long cancel order alert 12,159

edged back to 12,143.

Will look again after 01:00 update.

Keene Little : 3/6/2007 12:45:11 PM

CME's pattern has left a lot to be desired from an EW perspective and that's been true for a long time. Here's an update to yesterday's daily chart that shows the bullish and bearish wave counts and we'll have to let price tell us which one is playing out. First resistance level in its bounce is the downtrend line from the January high, currently near 574. Link

Two equal legs up from last week's low is at 575.73. The bearish red wave count calls the current bounce another 2nd wave correction. That would mean get ready for a strong 3rd of a 3rd wave down once this bounce completes. For that reason I'd look this one over carefully for a shorting opportunity if it tags the 574-575 level and looks ready to turn back down.

Otherwise a continuation above 580, confirmed with a rally above 587 would likely see CME head to new highs above 600. If it does pull back from the 574 area but does so in a choppy manner then it could be a warning to bears that another leg up is coming. That we won't know until the next decline starts.

Jeff Bailey : 3/6/2007 12:40:25 PM

VIX 16.89 -13.95% ... at MONTHLY 38.2%. Has slipped below its DAILY S1 (17.11)

Jane Fox : 3/6/2007 12:40:02 PM

This configuration should have the markets much more bullish than they are. If we don't see much more bullishness today then I think we will have another bearish day tomorrow. Link

Jeff Bailey : 3/6/2007 12:36:35 PM

YM Long setup alert ... let's look to go long the YM on a trade at 12,142 , stop 12,125 , target 12,220.

YM 12,156

Jeff Bailey : 3/6/2007 12:34:25 PM

Decent buy program hitting ...

Jeff Bailey : 3/6/2007 12:32:56 PM

Various Fed Fund futures March-December at this Link

December forecasting (100 - 95.26)= 4.75%.

FOMC's current target is 5.25%.

Keene Little : 3/6/2007 12:28:40 PM

SPX is up nearly 13 points today and that would normally be a large move. Now it's just noise and it's still trading inside yesterday's range. The good news for the bulls so far is that it has broken its short term downtrend line from March 1, came back for a retest and is attempting to rally higher. Also the bullish divergences at the new lows were telling us the selling pressure was waning. Link

Now watch the level where the bounce off yesterday's low will have two equal legs up at 1396.93. That makes for a good upside target before pulling back some and then continuing higher. If the bulls start to feel their alfalfa during the climb up then they could push it up to near 1407 where the 2nd leg up would be equal to 162% of the 1st leg and it's near a 38% retracement of the decline. It would also be tagging the 30-min 100/130-pma's at the same time.

If we were to get that kind of sharp move to 1407 in the next several hours then I'd seriously consider shorting it there since it would be possible that will be the conclusion of the bounce and down we go from there. So bears wait--price will tell us what's setting up next.

Jeff Bailey : 3/6/2007 12:27:07 PM

SPY's March "Max Pain" Theory ... currently tabulated at $141 ($1 increments).

SPY 30-minute interval chart (Monthly/Weekly Pivot Retracement) at this Link

Jane Fox : 3/6/2007 12:14:37 PM

Dateline WSJ - WASHINGTON -- A federal jury found Lewis "Scooter" Libby, Vice President Cheney's former chief of staff, guilty on charges of obstruction, perjury and lying to the FBI in an investigation into the leak of a CIA operative's identity, after 10 days of deliberations.

The verdict caps a month-long trial that enthralled the nation's capital as current and former administration officials and famous journalists testified about a key period in the summer of 2003 as criticism began mounting over the Iraq invasion and the search for weapons of mass destruction that were never found.

Mr. Libby faced up to five counts of perjury and obstruction of justice stemming from statements he made to Federal Bureau of Investigation agents and a grand jury looking into the public disclosure of the name of a former CIA operative, who is married to a critic of the Bush administration.

Jeff Bailey : 3/6/2007 12:13:43 PM

BIX.X 388.89 +0.90% ... pinned at MONTHLY S1. They "love" Bernanke.

Jeff Bailey : 3/6/2007 12:12:06 PM

EIA: OPEC-10 Q4 '07 Output May Be 1M B/D More Than Q1 '07

Jeff Bailey : 3/6/2007 12:11:05 PM

EIA: China's Q1 Oil Use +5.6% On Year

Jeff Bailey : 3/6/2007 12:09:24 PM

03/06/07 Forex Economic Calendar at this Link

Jeff Bailey : 3/6/2007 12:06:37 PM

Bank of Canada Leaves Rates Unchanged at 4.25% ... earlier this morning at 09:00 AM EST.

Jeff Bailey : 3/6/2007 12:02:24 PM

YM day trader's 5-minute interval chart at this Link

Jane Fox : 3/6/2007 11:58:31 AM

Overnight highs have hardly being breached. Link

Keene Little : 3/6/2007 11:57:28 AM

Zooming a little closer on the GOOG pattern I wanted to show what the bearish wave count is. Because of the overlapping highs and lows in its drop from the January high, it's either setting up a very bearish drop after the current bounce is finished, or it's a corrective pullback which means GOOG hasn't seen its highs yet (again, that would be confirmed with a rally above 485). Link

In the bearish count, it's getting ready to unwind the wave count to the downside and it would mean the selling will become relentless for a while. The downside pattern as I have it depicted is probably too conservative (it could get down to the 350 area, and then 300, much faster than I show). This stock will be a great one to keep an eye on since the outcome of this pattern will likely tell us bunches about what the broader market is up (or down) to.

Jane Fox : 3/6/2007 11:55:27 AM

Order of the day is get in and get out. Don't expect huge gains on either side. Or even better yet just stay out and don't get wooed into thinking we are having a really bullish day (like I have been).

Jeff Bailey : 3/6/2007 11:53:21 AM

YM Daily/Weekly/Monthly pivot levels at this Link ... YM 12,145 finding some sellers at yesterday's DAILY Pivot, Today's DAILY R1.

Jane Fox : 3/6/2007 11:48:38 AM

Oh wow I have just got myself back to breakeven! Jumping for joy here :(

Jeff Bailey : 3/6/2007 11:45:15 AM

YM 12,154 ... sticks its head back above DAILY R1 (12,153) ... no backtest of DAILY Pivot (12,092)

Jeff Bailey : 3/6/2007 11:44:06 AM

S&P 500 Index (SPX.X) 1,386.55 +0.90% Link ...

Jeff Bailey : 3/6/2007 11:43:10 AM


DJ- Former U.S. Fed chairman sees a 'one-third probability' that the U.S. will slip into recession this year, saying that the current economic expansion won't have the staying power of its decade-long predecessor, Bloomberg News reports.

Jeff Bailey : 3/6/2007 11:42:12 AM


DJ- Managed-care provider, one of the biggest firms caught up in the backdating scandal, says it will record an additional $1.55 billion in stock-based compensation expenses as a result of repricing stock options.

UNH $53.77 +1.52% Link ...

Jane Fox : 3/6/2007 11:39:19 AM

... or could that be a reverse H&S forming? See hope springs internal.

Jane Fox : 3/6/2007 11:37:15 AM

Looks like I just may have my head handed to me again.

Keene Little : 3/6/2007 11:33:26 AM

GOOG has bounced back up to the top of its old gap--what was support could turn into resistance near 452. If it manages to climb back above that level then next resistance as I see it is its downtrend line from Feb 1 and gap close from Feb 27 at 464.93. If it can climb above 470 then it could be the start of something more bullish, confirmed with a break above 485. Until that happens I'm leaning towards the bearish wave count here, confirmed with a drop below 437 as shown on this daily chart: Link

Jane Fox : 3/6/2007 11:30:14 AM

I have tried getting long a couple of times already today and have had my head handed to me on a platter. But hope springs internal and I have tried again. I just cannot ignore those bullish internals.

Jane Fox : 3/6/2007 11:22:13 AM

A series of lower lows and highs means the trend is down but AD volume making new daily highs and AD line at +1852 tells me not to try a short. Trading has been especially challenging of late.

Jeff Bailey : 3/6/2007 11:21:29 AM

11:00 Internals found at this Link

Keene Little : 3/6/2007 11:20:16 AM

The RUT is the one that has me leaning more towards yesterday's low being the end of a 5-wave move (as opposed to the end of the b-wave in an a-b-c correction from March 1). If this plays out like I think it will, then we should get some kind of a-b-c bounce into next Monday and I like the Fib retracement at 50% (795) which is also the level of the previous 4th wave. Link

Jeff Bailey : 3/6/2007 11:02:53 AM

11:00 Market Watch found at this Link

Jane Fox : 3/6/2007 10:59:32 AM

New lows across the board. Totally wierd!

Keene Little : 3/6/2007 10:52:59 AM

The same two potential bounce patterns exist for NDX as I showed for SPX. I'm using the previous 4th waves as bounce-to targets which gives us 1770-1780 as an area to watch should NDX get back up there. Link

I also added a 43% retracement level on this chart because it's the most probable retracement according to studies that have been done on thousands of stocks over many years. I put it on the chart and we'll watch what price action does around that level (1772) if and when it gets there. I also have the time projection for the correction to complete next Monday. Again, these are just projections and then the pattern of the bounce will give us more clues as we approach the end of the correction (assuming of course we'll get one).

Jane Fox : 3/6/2007 10:52:00 AM

This is impossible to trade.

Jeff Bailey : 3/6/2007 10:49:25 AM

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

Jane Fox : 3/6/2007 10:36:51 AM

The internals are telling me "stay long" but the price action is most certainly telling me "stay out."

Jane Fox : 3/6/2007 10:36:00 AM

I am in total amazment. Just two weeks ago the bulls were so strong we were calling them the energizer bunny and now they can't even make new daily highs with an AD line at +1973!

Jeff Bailey : 3/6/2007 10:35:08 AM

Philadelphia Stock Exchange U.S. Dollar-Settled PHLX World Currency Options Link

Keene Little : 3/6/2007 10:28:41 AM

There are still two potential patterns that I have to consider for the correction to the recent decline. Other than the more bearish potential that I showed on the DOW chart I'm hoping we'll see a higher bounce so that it sets up a better short play.

One bounce potential is that the decline over the past 3 days, even though it dropped to new lows, is part of an a-b-c bounce off the Mar 1 low. I've shown this potential before but removed it yesterday because it didn't look right. But since it's still possible I have it back on this chart (in dark red): Link

Unless we get a sharp and strong rally today the possibility for a leg up today finishing the correction becomes less probable. The other possibility (in light red) is that the new low yesterday was the end of the 5-wave move and now we're waiting for a corrective bounce. Doing a 62% time projection off yesterday's low now takes us into Monday for a "normal" amount of time for that correction. That's also in the March 9 turn window so it's my preferred count at the moment.

Both counts have the bounce topping near SPX 1417 which meets some Fib projections and retracements and also is near the previous 4th wave, a common retracement target. Now all we need is for the bulls to do something here (and get the DOW above 12200 and keep it above so that the more immediate bearish potential there is negated).

Jane Fox : 3/6/2007 10:25:06 AM

The bulls are trying to hang on with every thing they have and I'm afraid that they may just lose the battle. This should really worry those out there who are long the market longer term. I don't remember the last time I have seen the internals this strong and the price so "stuck."

Jeff Bailey : 3/6/2007 10:24:04 AM

US January Pending Home Sales Down 4.1% to 108.7

DJ- A forecasting tool for home sales fell in January, following a weather-related jump in December, but a broader trend suggests the housing market index may be recovering from a low in October of last year.

The National Association of Realtors' index for pending sales of existing homes fell at a seasonally adjusted annual rate of 4.1% to 108.7 from December's upwardly revised 113.3, the industry group said Tuesday.

Its index, based on signed contracts for used homes, was 8.9% below the level of January 2006, an improvement over previous year-over-year differences. "There has been a narrowing trend from year-ago levels since last July when the index was 14.7% lower than a year earlier," NAR said.

And January's 108.7 reading marked the third straight month the index remained above October's 106.8 level, a sign that the index has recovered from that October low, according to David Lereah, NAR's chief economist.

"We are seeing temporary near-term weather disruptions in much of the country, but there is an underlying pattern of stabilization in the housing market," Lereah said in a statement.

"As a result of these weather disruptions, it may take a couple months for the picture to fully clarify, but a modest recovery is likely," Lereah added.

By region, the index showed a 9.3% advance in the Northeast in January from December, but it was 1.3% lower than January 2006. It fell 2.4% in the Midwest - and was down 10.8% in the 12-month span. The South saw a 11.7% fall - and a 11.8% decline in the past year. The index for the West rose by 0.2% - and was 7.0% lower since January 2006.

The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction has not closed. Pending sales typically close within one or two months of signing.

Jane Fox : 3/6/2007 10:10:58 AM

Internals are very bullish and the bulls cannot get price off the ground. Markets making new daily lows. This is not good folks.

Jeff Bailey : 3/6/2007 10:02:40 AM

10:00 Market Watch found at this Link

Jane Fox : 3/6/2007 9:59:44 AM

These are telling you don;t even think short but price is anything but overly bullish. Link

Keene Little : 3/6/2007 9:44:15 AM

The DOW needs to get above 12200 and hold above in order to negate the bearish potential for the current bounce to turn south in a big way. This potentially very bearish triangle pattern that I show here, if it follows through to the downside after this bounce, suggests we'll see DOW 11500 before the week is over. But if the DOW can break above this potential pattern then there's a greater likelihood that we'll get a bounce at least up to 12300-12400. Link

Jane Fox : 3/6/2007 9:43:08 AM

VIX is bullish. Link

Jane Fox : 3/6/2007 9:42:01 AM

VIX is now printing below its PDL which is a good sign that ES will break its PDH.

Jane Fox : 3/6/2007 9:40:49 AM

Too funny TRIN is 0.30! Quite a difference from last week.

Jane Fox : 3/6/2007 9:38:51 AM

This could be a "Get long and stay long day."

Jane Fox : 3/6/2007 9:36:57 AM

Let's go from crazy bearish to crazy bullish. AD line is +1824

Jane Fox : 3/6/2007 9:21:31 AM

NEW YORK (MarketWatch) -- Gold futures rose early Tuesday, breaking a five-session losing streak, as a rebound in Asian and European stocks as well as expectations for a recovery on Wall Street boosted demand for the precious metal. Stocks across Asia ended higher, with the markets in Japan, China, South Korea, and Hong Kong all posting gains. European stocks also broke a five-session losing run, with the markets in France, Germany, and the U.K. rising. Boosted by the recovery in Asian and European markets, U.S. stock market futures were pointing to a higher opening.

A full $3.1 trillion of market capitalization was wiped off world markets in the last five trading days, according to the Dow Jones Wilshire Global Total Market Index. The U.S. market alone lost $1 trillion worth of market cap in the sell-off that was triggered by a one-day decline of nearly 9% on the Shanghai market last week, worries about the troubled U.S. subprime-mortgage market and concerns over a rapid unwinding of the yen carry trade.

Jane Fox : 3/6/2007 9:20:38 AM

WASHINGTON (MarketWatch) -- U.S. productivity decelerated in the fourth quarter while labor costs rose, the Labor Department said, in a report that shows more inflationary pressures from labor costs.

Productivity of the U.S. nonfarm business sector rose at a 1.6% annual rate in the fourth quarter, revised down from the 3.0% pace estimated a month ago.

Unit labor costs -- a gauge of wage push inflationary pressures -- rose at a 6.6% annual pace in the quarter, revised higher from a 1.7% increase. Unit labor costs are the costs paid to workers to produce one "unit" of output. This is the largest quarterly gain since the first three months of 2006.

Unit labor costs have increased 3.2% in the past year, the fastest pace since 2000.

Keene Little : 3/6/2007 9:19:22 AM

This is the first time since the "plunge" that we've had a bullish overnight session that held up all night and into our open. Maybe that's the signal that we've finally bottomed for now. It remains a volatile time and there are many traders still looking for any kind of bounce to get out of their positions. But this bounce looks like it could stick for at least a day or so.

Futures are up big and that makes it a lot more difficult to try to play the bounce. I think the better play will be the short setup from the bounce and I'll show some charts during the day with the potential setups that we'll watch for.

Jane Fox : 3/6/2007 9:14:37 AM

The US $ continues to be strong, which is not good for us Goldbugs. I bailed on my GLD long yesterday and will give it another try once I see it break resistance.

Oil retraced about 75% of its decline from yesterday and will help to keep Gold from falling too far Link

Jane Fox : 3/6/2007 9:10:03 AM

Overnight the equity markets all had bullish higher highs and lows, all that is except YM. Seems the bulls don't want the big caps and that is just a tad ominous. Link

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