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Keene Little : 3/9/2007 1:06:15 AM

Updated charts:
DOW 30-min: Link
SPX 30-min: Link
NDX 30-min: Link
RUT 30-min: Link
GOOG 120-min: Link
GOOG daily: Link
CME daily: Link

Keene Little : 3/9/2007 12:32:33 AM

Friday's pivot tables: Link and Link

OI Technical Staff : 3/8/2007 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 3/8/2007 5:32:33 PM

NYSE NH/NL Ratio Chart at this Link

"f"ive day

X,O is 10-day.

Utilizing the 3-box reversal.

Jeff Bailey : 3/8/2007 5:22:31 PM

Closing Internals found at this Link

Jeff Bailey : 3/8/2007 5:07:17 PM

Closing U.S. Market Watch found at this Link

Keene Little : 3/8/2007 4:58:03 PM

After gapping up today and running up to close its gap from Feb 26 at 464.93, GOOG did not have a great day after that. It closed down marginally while the rest of the market had a good day. If GOOG rolls over from here and drops back below 450 it could be trouble for this stock, confirmed with a break below 437. Otherwise the pullback from the January high could be viewed as a bull flag and get ready for new highs. A break above 485 would confirm that likelihood. Link

Keene Little : 3/8/2007 4:43:32 PM

For those who are watching CME, it ran into resistance at today's high which was at the downtrend line from the January/February highs. It left a nice shooting star candlestick so it appears ready to turn back down tomorrow. If it does pull back I'm not sure whether it will set up for another run higher or start a steeper dive back down. We'll have wait to see how the pullback (assuming we get one) develops which should provide more clues. The key levels for the bulls and bears is 587 to the upside and 510 to the downside. Link

Jeff Bailey : 3/8/2007 4:38:43 PM

April Crude Oil (cl07j) settled down $0.18, or -0.29% at $61.64.

Jeff Bailey : 3/8/2007 4:24:20 PM

SPY $140.74 +0.84% ...

Jeff Bailey : 3/8/2007 4:22:07 PM

Oil Service HOLDRs (AMEX:OIH) $139.55 +0.75% ... back above its 200-day SMA. WEEKLY Pivot $136.62 and WEEKLY R1 right here at $140.20.

Jeff Bailey : 3/8/2007 4:20:40 PM

CBOE Oil Index (OIX.X) 622.86 +0.22% ... WEEKLY Pivot 621.75.

Jeff Bailey : 3/8/2007 4:19:42 PM

AMEX Pharmaceutical Index (DRG.X) 343.72 +0.80% ... WEEKLY Pivot 342.76.

Jeff Bailey : 3/8/2007 4:18:47 PM

S&P Insurance ($IUX.X) 388.24 +0.55% ... WEEKLY Pivot 388.02.

Jeff Bailey : 3/8/2007 4:14:18 PM

YM Trade Profiles alert! ... Going forward, all YM trades that I profile will be for the June contract ... YM07M

Note: On 02/28/08 the YM07M closed 12,382.

On Friday the YM07M closed 12,210.

Keene Little : 3/8/2007 4:03:57 PM

SPX held its uptrend line so the setup is there for a rally out of the gates tomorrow (for which the nonfarm payrolls number will be credited). Otherwise a break below the uptrend line, especially if a retest of it fails, could start the next leg down. Tough call and better to be flat and wait for the next move. Link

Jeff Bailey : 3/8/2007 3:55:28 PM

Bullish swing trade call option alert ... for one (1) of the Dow Chemical DOW Sep $45 Calls (DOW-II at the offer of $2.15.

DOW $42.65 +1.33% ...

Jane Fox : 3/8/2007 3:50:07 PM

Dateline WSJ - WASHINGTON -- A group of prominent experts on Federal Reserve policy said in a study that the central bank puts too much weight on inflation expectations, which they argue could lead to complacency in the face of an inflation threat.

The conclusions of the study, prepared for a conference in Washington Friday to be attended by several Fed policy makers, suggest that the Fed is risking higher inflation over the next few years, which could require more drastic increases in interest rates later on.

But Fed officials are unlikely to agree or to change their current interest-rate stance as a result.

The theoretical role of inflation expectations has persuaded some Fed officials to "focus intensively" on them as the main driver of inflation itself, according to the study. "Our results suggest that this practice may be misguided."

Jane Fox : 3/8/2007 3:48:28 PM

Economic Reports for tomorrow include

8:30a.m. Jan Trade Gap. Expected: $59.0B. Previous: $61.18B.

8:30a.m. Feb Nonfarm Payrolls. Expected: +90K. Previous: +111K.

8:30a.m. Feb Unemployment.Expected: Unch. Previous: 4.5%.

10:00a.m. Jan Wholesale Inventories. Previous: -0.5%.

Jane Fox : 3/8/2007 3:47:23 PM

NEW YORK (MarketWatch) -- Clearwire Corp. dipped below its offering price after boosting the size of its initial public offering Thursday as Wall Street answered the call from its billionaire founder Craig McCaw.

Clearwire Corp. (CLWR) sopped up some of the aftermarket demand for its IPO via 4 million additional shares tacked on just ahead of its debut.

Still, the broadband wireless firm managed to price 24 million shares at the high end of its $23-$25 a share range, raising $600 million.

The stock opened at $27.25 and fell to $24.83 in afternoon action.

Keene Little : 3/8/2007 3:45:21 PM

With tomorrow's nonfarm payrolls and hourly earnings reports before the market opens, it certainly appears traders aren't certain what to do here. I'd say if we close at or above the uptrend lines from Monday (about SPX 1400) then we'll see an upside resolution and the leg up to a new high could be the last one for the upward correction. If the uptrend lines break then we could see a flush tomorrow morning instead.

There isn't a clean correlation between various Fib projections and retracements so we're currently looking at a range of SPX 1412-1418 for a potential high. The top of this week's parallel up-channel will be near 1417 tomorrow morning. A break below this afternoon's low near 1398 would be bearish. Link

Jeff Bailey : 3/8/2007 3:41:06 PM

Jury Finds Vonage Infringed Upon 3 Verizon Patents

DJ- A federal jury Thursday found that Vonage Holdings Corp. (VG) infringed upon three patents controlled by Verizon Communications Inc. (VZ), and told the Internet phone company to pay $58 million in damages.

After deliberating for less than a day, the jury also said that Vonage must pay a 5.5% royalty rate to Verizon going forward for the right to continue to use the company's patented technology.

Verizon had asked for $197 million in damages from Vonage for infringing patents related to its Voice-over-Internet Protocol (VoIP) technology, which permits consumers to use make calls over the Internet.

The case was seen by many as an indication of the potential liability that the Web-phone industry could face down the line.

Verizon shares recently were trading up 93 cents, or 2.6%, to $36.61, while Vonage's shares were down 20 cents, or 4%, to $4.85.

Keene Little : 3/8/2007 3:28:23 PM

Today we're back in the environment where if it's not a program trade-induced move this market is not going anywhere. It seems both sides are just staring at the chessboard wondering what the next move should be. Then every once in a while a bully comes along and flips our chessboard over.

Keene Little : 3/8/2007 3:22:40 PM

Doesn't this look like a simple bear flag we're creating? Looking at the 60 min. and the 30 min. chart I can't see much else.

That's exactly what I'm thinking Scott. Which is why I say when the wave count gets confusing, go with the trend lines. Right now we have a flag pattern off Monday's low--a break down from that would be a sell signal and then we just use our stops in case it's only the 1st leg up in a larger upward correction.

Keene Little : 3/8/2007 3:13:12 PM

When the wave pattern becomes confusing (meaning there are too many likely possibilities) that's when I go simple--follow the trend lines since they're very effective in identifying when a count as finished. Right now the DOW and SPX are about to break their uptrend lines if they drop back down.

Jeff Bailey : 3/8/2007 3:12:27 PM

03:00 Internals found at this Link

Keene Little : 3/8/2007 3:06:35 PM

I follow you're EW interpretations and forecasts daily. Keep up the good work. After your last post am I to believe you are giving up on a Fri/Mon rise? (the one I've been waiting for)

Great question Paul. If we can get another leg up in this rally then there's the chance we'll see the high early Friday rather than late Friday/early Monday. Or the correction will morph into something even more complex and chew up more time to get up to its Fibs a little later than Friday morning. I was hoping for a cleaner bounce to set it up a little better (with more confidence). I should have known better.

And it's possible the high is already in, as I had warned about this morning. That's why a break below SPX 1390 would be bearish (not necessarily conclusive since it could be part of a larger upward correction). Something smells fishy here and I don't like the long side.

Jeff Bailey : 3/8/2007 3:02:24 PM

03:00 Market Watch found at this Link

Keene Little : 3/8/2007 2:58:41 PM

After dropping through support at 1404 SPX now needs to get back above that level to turn this back around and get it bullish. Otherwise this bounce will make a good time to test the short side.

Jeff Bailey : 3/8/2007 2:57:43 PM

YM 12,264

Jeff Bailey : 3/8/2007 2:57:32 PM

Missed a good long in the YM there at 12,227

Jeff Bailey : 3/8/2007 2:49:27 PM

SPY $140.48 +0.65% ... NAKED Call sellers didn't flinch ... not yet anyway.....

Jeff Bailey : 3/8/2007 2:48:32 PM

EUR/JPY 153.89

Jeff Bailey : 3/8/2007 2:47:52 PM

USD/JPY 117.10

Keene Little : 3/8/2007 2:44:54 PM

One thing I added to the SPX 15-min chart is a price projection off the first a-b-c (wave-W) since very often the two a-b-c moves will be equal. Right now the projections are pointing to the 1415 area as a likely target if we get another leg up in this rally. A break below 1390 would say we might have put in a high. Link

Jane Fox : 3/8/2007 2:41:15 PM

WEll that certainly shook all of us longs out of the trees.

Keene Little : 3/8/2007 2:40:19 PM

Corrective wave counts can become quite confusing so if you're just starting out trying to learn EW you need to understand that these patterns will drive you crazy. While there's only 1 impulsive pattern (1-2-3-4-5), there are about 13 corrective patterns. Trying to figure them out real time is where all the practice is needed in trying to figure them out.

So, what I have on this SPX 15-min chart is my best guess as to what we've got so far--what's called a double zigzag which is two a-b-c patterns with an x-wave in between them: Link

Each a-b-c move gets another label--W for the first one, Y for the second one and Z for the third one if it so desires to extend that far. That's how I've got this labeled. But now it's time for SPX to bounce otherwise it will break its uptrend line from Monday.

Jeff Bailey : 3/8/2007 2:36:51 PM

HSBC Holdings (HBC) $88.10 +0.74% ...

Jeff Bailey : 3/8/2007 2:35:53 PM

CNBC reporting that there is speculation that NEW will file Chapter 11.

Jane Fox : 3/8/2007 2:35:11 PM

TICKS -1000 big sell program.

Jane Fox : 3/8/2007 2:32:08 PM

Once again the bears were able to over power the bulls.

Keene Little : 3/8/2007 2:31:14 PM

Nope, definitely something a little more bearish going on. But not necessarily meaning a top has been put in yet. Keep an eye on the uptrend lines from Monday afternoon--they should hold any pullback if we've got another leg up coming (working on a chart to show that).

Jane Fox : 3/8/2007 2:31:00 PM

SAN FRANCISCO (MarketWatch) -- When many investors were rushing to sell during last week's slump, people with the possibly the best insight into the health of the stock market weren't panicking, according to data compiled by TrimTabs Investment Research.

TrimTabs tracks stock sales and purchases by company insiders such as chief executives because they have the best insight into how their companies are doing. Big insider sales are bearish for the stock market, while low levels of selling and net insider buying is positive, TrimTabs reckons.

Insiders sold a net $2.26 billion worth of shares last week, when the Dow Jones Industrial Average lost 4.3%. That was lower than each of the previous four weeks, according to TrimTabs.

Insider selling was much higher earlier in February, before the market slumped. During the week beginning Feb. 12, insiders sold a net $4.85 billion. The week before that, they unloaded a net $4.74 billion. On Feb. 7 alone, insiders sold a net $2.48 billion of stock - more than the whole of last week combined, TrimTabs data show.

Jeff Bailey : 3/8/2007 2:31:24 PM

Day trade short setup cancel alert ... Please cancel the 1/3 position short setup in NFI. (02:15:35)

Jeff Bailey : 3/8/2007 2:30:05 PM

That trade might be over for the day ...

Jeff Bailey : 3/8/2007 2:29:31 PM

NEW and NFI are "matched" in their dynamics.

Jeff Bailey : 3/8/2007 2:22:28 PM

NFI $5.16 ...

Jeff Bailey : 3/8/2007 2:22:16 PM

NFI updated day trader's chart with "dynamic" low at $4.80 Link

Jane Fox : 3/8/2007 2:20:47 PM

Gold is testing its resistance zone and I suspect it will retrace from here but if it breaks the swing low made on March 6th then all bullish bets are off. However I think it will make a higher low and take another run at resistance. Link

Keene Little : 3/8/2007 2:19:41 PM

The DOW is now testing the bottom of its consolidation range.

Keene Little : 3/8/2007 2:18:29 PM

Unless SPX bounces immediately, and stays above 1404 (breaking as I type), this pullback will be too large to be considered part of the ascending triangle consolidation. Something more bearish would be happening, even if it's just a deeper pullback to correct today's rally.

Jeff Bailey : 3/8/2007 2:16:03 PM

Drag that dynamic down to current session low of $4.80.

Jeff Bailey : 3/8/2007 2:15:35 PM

Day trade short setup alert .... for 1/3 position in Novastar (NFI) $5.01 -1.57% ... look to short back up at $5.41, stop $5.61, target $4.75.

Jeff Bailey : 3/8/2007 2:12:46 PM

NFI $5.02 ... watch the size up at $5.20.

Jeff Bailey : 3/8/2007 2:12:08 PM

NFI 5.01 after low of 4.80

Jeff Bailey : 3/8/2007 2:10:52 PM

NFI 4.90 ... they can't hold it up ...

Jeff Bailey : 3/8/2007 2:10:07 PM

NFI $5.02 ...

Jeff Bailey : 3/8/2007 2:09:23 PM

NFI ... sets up for test of DAILY Pivot .... watch the size at $5.02.

Jeff Bailey : 3/8/2007 2:08:47 PM

NFI 5.20 ...

Keene Little : 3/8/2007 2:03:39 PM

Now that we're getting a pullback, assuming it stays within the consolidation range, another run to a new high is the one you want to buy. Or buy the pullback with a stop just below the morning's first pullback (the one near 11:20 AM).

Jeff Bailey : 3/8/2007 2:00:10 PM

NFI $5.32.

Jeff Bailey : 3/8/2007 1:59:55 PM

NEW getting crushed -15.50%

Jeff Bailey : 3/8/2007 1:59:38 PM

Day trade short cover alert for NFI at target of $5.35.

Keene Little : 3/8/2007 1:55:50 PM

The consolidation pattern for the DOW is more of a box than a triangle. They're both bullish continuation patterns but would look best with another pullback before launching out of them. Link

Keene Little : 3/8/2007 1:52:41 PM

That sideways triangle that I showed for SPX just turned into an ascending triangle (flat top, rising bottoms). That's if price stalls at a test of this morning's high here. So far the test is being met with bearish divergences so it's hard to trust a bullish move here. I'd be careful if you're thinking of buying a break to new highs.

Jane Fox : 3/8/2007 1:52:24 PM

Today has been easy in that you know which side you need to be on but difficult in staying on that side. I have been stopped out once and now long again but leaving my stop wide. My last stop was violated by 2 ticks. Never know though do you.

Jeff Bailey : 3/8/2007 1:44:07 PM

Day trade short finger on the button alert ... NFI $5.42.

Keene Little : 3/8/2007 1:39:57 PM

The little sideways triangle that appears to be forming is a bullish continuation pattern. Typically these are found before the last move in the trend (up in this case). One more small pullback to around 1405 should finish the consolidation if this is to resolve to the upside. A break below 1404 would negate it. That makes for a tight stop if you'd like to try to buy the next pullback. Link

Jeff Bailey : 3/8/2007 1:39:05 PM

NFI $5.50 +8.05% ...

Jeff Bailey : 3/8/2007 1:38:44 PM

NFI 5-minute interval chart with "dynamic" and today's DAILY Pivot retracement Link

Jeff Bailey : 3/8/2007 1:32:40 PM

NFI $5.60 +10.01% ... day trader's chart comming.

Jeff Bailey : 3/8/2007 1:32:18 PM

NEW $5.06 -1.93% ....

Jeff Bailey : 3/8/2007 1:28:30 PM

Day trade short alert ... for 1/2 position in shares of Novastar Financial (NFI) at the bid of $5.62. Stop goes $5.76, target $5.35.

Jeff Bailey : 3/8/2007 1:18:12 PM

01:05 Internals found at this Link

Keene Little : 3/8/2007 1:16:00 PM

Today's rally is looking very familiar--gap up, go sideways, to be followed by another rally.

Keene Little : 3/8/2007 1:09:46 PM

Here's the updated chart for my previous post (I had posted an older one): Link

Jeff Bailey : 3/8/2007 1:07:04 PM

01:05 Market Watch found at this Link

Keene Little : 3/8/2007 1:03:30 PM

As I had mentioned earlier, the minimum upside targets for the bounce have been met, both in retracement of the decline as well as for wave-c of the a-b-c bounce from Monday. That says bulls need to be aware that we could roll over at any time. If SPX breaks its uptrend line from Monday, currently near 1398, then that would increase the likelihood that we may have seen the high. Link

Until SPX breaks its uptrend line it's equally likely that this morning's rally is just part of the 2nd wave correction from Monday's low. The more bullish short term pattern says we'll get a pullback today (or sideways consolidation) which will be followed by another rally leg up. A rally up into the Fib resistance zone around 1418, either tomorrow or Monday, would then be the time we'll look to get short.

Jeff Bailey : 3/8/2007 1:00:15 PM

US Household Net Worth Up 2.5% To $55.63 Trillion In Q4

DJ- U.S. households' total net worth rose 2.5% to a record $55.63 trillion in the fourth quarter of 2006, mainly reflecting gains in their corporate equities holdings, the Federal Reserve said Thursday.

The Fed's quarterly "flow of funds" data also showed U.S. nonfinancial debt grew at a 7.9% annual rate in the fourth quarter. This was faster than the revised 6.5% rate in the third quarter, initially reported as a 6.7% growth rate.

"Slower debt growth in the household sector was more than offset by faster growth for nonfinancial businesses and state and local governments," the Fed said.

In the October-December period household net worth grew for the 17th consecutive quarter. The record $55.63 trillion posted in the most recent quarter was up from the third quarter's $54.25 trillion, the previous record high. And the 2.5% growth in the fourth quarter was faster than the third quarter's 1.6%.

Household net worth in the fourth quarter rose to about 5.75 times disposable personal income, from a third-quarter level of about 5.67 times income. Household net worth is a measure of total assets, such as houses and pensions, minus total liabilities, such as mortgages and credit card debt.

U.S. household debt grew at a 6.6% annual rate in the fourth quarter, slowing from 7.5% in the third quarter. For 2006 as a whole, household debt growth slowed to 8.6% from 11.7% in 2005.

Growth of home mortgage debt slowed to a 6.4% annual rate in the fourth quarter from a 7.8% pace in the third quarter. For 2006 as a whole, home mortgage debt growth slowed to 8.9% from 13.8% in 2005.

Consumer credit grew at a 4.5% annual pace in the fourth quarter, down from a 5.5% growth rate in the third quarter but up from the 2.3% pace in the fourth quarter of 2005.

The federal government's debt grew at a 3.3% rate in the fourth quarter, steady with the third quarter's pace but down sharply from the 8.0% growth rate in the fourth quarter of 2005.

Nonfinancial business borrowing grew at a 10.9% rate in the fourth quarter, much faster than the 6.5% pace of the third quarter and the 6.9% pace of the year-earlier quarter.

"Large increases in the net issuance of open-market paper and corporate bonds contributed to the pickup in debt growth last quarter," the Fed said. "At the same time, nonfinancial corporations, on net, retired a large volume of equity shares."

The financing gap - the amount of money companies must raise externally to finance their capital expenditures - grew to $70.5 billion in the fourth quarter from $48.3 billion in the third quarter. For 2006 as a whole, corporations returned to a financing gap after logging a big surplus in 2005.

State and local government debt grew at a 13.5% pace in the fourth quarter, the fastest rate in four years. It was up from 8.2% in the previous three months and from 9.7% in the year-earlier quarter.

Outstanding borrowing of total non-financial debt stood at $28.70 trillion in the fourth quarter of 2006, up from $28.15 trillion in the third quarter.

Jeff Bailey : 3/8/2007 12:54:44 PM

US Nonfinancial Debt Grew At 7.9% Annual Rate In Q4

Jane Fox : 3/8/2007 12:48:52 PM

WASHINGTON (MarketWatch) -- U.S. household net worth increased at a 10.1% annual pace in the fourth quarter, boosted by returns on stocks and real estate, the Federal Reserve reported Thursday.

Net worth rose by $1.4 trillion to $55.6 trillion in the fourth quarter. It was the biggest gain in net worth since the first quarter of last year. Assets increased $1.6 trillion to $68.9 trillion while liabilities rose $264 billion to $13.3 trillion.

Net worth, calculated by subtracting liabilities from assets, increased 7.4% in 2006, after gains of 13% in 2003, 9.7% in 2004 and 8.5% in 2005.

Capital gains totaled $1.3 trillion in the fourth quarter, the government said. The value of corporate equities rose by $276 billion, the value of mutual funds rose $243 billion and the value of real estate increased $143.3

Jeff Bailey : 3/8/2007 12:33:46 PM

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

Keene Little : 3/8/2007 12:25:39 PM

Any suggestions for short positions to take best advantage of a drop???

Let me count the ways... As you know there are as many ways to play both directions in this market, not to mention the myriad symbols, and it's next to impossible to say which is the best. So much of it depends on one's own risk profile, account size, trading vehicle preference, etc. A good play for me could be horrible for you.

So having said all that, and knowing most readers are trading options, I'd say your two best methods to take advantage of a declining market are selling calls and buying puts. Selling calls could be bear call spreads to reduce margin (and risk) and buying puts could be part of a bear put spread (to reduce cost). Spreads obviously reduce profit potential but they're a great way to trade and reduce risk.

If we're to get the kind of drop I'm thinking we'll get then the best bang for the buck are straight long puts. The highest risk ones would be Arpil OTM (out of the money) since they're relatively cheap and will explode in value if we get a big drop. They're risky because the market could take a lot longer to drop and not drop far enough. Either one of those will kill the value of the puts and you could lose the entire amount you paid. For that reason if you decide to trade this way, only spend what you're willing to lose and then roll the dice, no stops.

In case you haven't heard, the odds of making money on a long option position is 1 in 3. Your odds of making money on selling an option are 2 out of 3. Keep those in mind when you're buying options and ask yourself if you're comfortable with the risk involved. A little more conservatively, but still a directional play with long puts, is to buy a lot more time (at least June) and closer to ITM (in the money).

A nice combination strategy would be to sell a bear call spread and then use the money you received to buy a few puts. This is all assuming of course we're going to continue the decline. By all means use proper risk management in your trades since a rally instead could be an explosive one.

Jeff Bailey : 3/8/2007 12:11:42 PM

WAG $45.01 +2.17% ...

Jeff Bailey : 3/8/2007 12:08:35 PM

Swing trade bullish call exit alert Let's sell 1/2, or one (1) of the Walgreen WAG April $45 Calls (WAG-DI) at the bid of $1.50.

WAG $45.02.

Keene Little : 3/8/2007 12:03:25 PM

Hmmmm..... 150,000 April 35 puts bot this am on XLF. FWIW. Good write up last night.

Thanks Joe. The XLF is the S&P Financial SPDR Fund so someone is betting big that this rebound in the banks is not going to hold up. This is the daily chart for the fund--price bounced off the 50% retracement of the June-February rally and is now close to a 50% retracement of the decline (at 36.26). Link

Jeff Bailey : 3/8/2007 11:48:53 AM

Important NH/NL Notes: ... On 02/22/07 at 06:48:33 PM EST Link I made comment about the 197 NASDAQ NH as being a little "weak," and that BULLS wanted to see something north of 250 in the next few days. We know what happened just days after that.

Here are some NL benchmarks now highlighted in yellow.

Recent NH/NL table Link

Keene Little : 3/8/2007 11:43:42 AM

My bad--I forgot to post the pivot tables. Thanks Max for the reminder. Link and Link

Keene Little : 3/8/2007 11:40:53 AM

I received a question about the moving averages I'm referring to on my 30-min charts. Somgya, I think it was either Jim or Linda who had pointed out these moving averages some time ago. They are the 100 period and 130 period moving averages (hence my note on the charts--100/130-pmas) and for whatever reason they do an amazing job at identifying intraday support and resistance. These rougly equate to 8 and 11 for the daily moving averages so that may be the reason--many traders use the 10-dma.

Keene Little : 3/8/2007 11:33:10 AM

Without much of a pullback from yesterday's high I'm left guessing as to what kind of corrective bounce is playing out. Other than a sharp a-b-c zigzag bounce that I've shown on this morning's charts, this RUT chart shows a potential ascending wedge with it ending tomorrow in the 790-791 area. If true, it needs a choppy pullback that stays above 780 and then a final push into tomorrow. Link

Jeff Bailey : 3/8/2007 11:20:08 AM

11:00 Internals found at this Link

Note: NYSE 5-day NH/NL ratio would reverse up 3 boxes on closing measure of 64.00%.

NASDAQ 5-day NH/NL ratio would reverse up 3 boxes on closing measure of 32.00%.

Keene Little : 3/8/2007 11:16:53 AM

It looks to me that if we can get the Dow to rally to your projection around 12400 the VIX should run into hard [support] around 12.5, we could really have something here for nice reversal back down.

This is a good observation Ray, thanks. The highs of the VIX over the past few months was right around 12.50 so I agree with your analysis--it should find that resistance level to now be support. VIX is currently back down to 13.66 after reaching a high of 20.41 on Monday morning.

Jane Fox : 3/8/2007 11:07:27 AM

This dip is a good spot to go long. VIX hovering around daily lows and AD volume to new daily lows. AD line still a very bullish +1976. TICKS are bullish as well. TRIN at 0.60. That is about it!

Jeff Bailey : 3/8/2007 11:03:16 AM

11:00 Market Watch found at this Link

Jeff Bailey : 3/8/2007 10:57:07 AM

Yesterday's DAILY S1 for SPY was $138.72.

SPY was pretty squared up with YM. Yesterday's DAILY S1 for YM was 12,132.

Jeff Bailey : 3/8/2007 10:52:29 AM

SFB-PK ... My time & sales show 6,000 contracts traded @ 10:32:37.

$141 - $2.26 = $138.74 may become a line in the sand for support.

Keene Little : 3/8/2007 10:47:30 AM

SPX has reached its 38% retracement level of the decline at 1407.43 so it may be ready for a pullback now. If this morning's rally is the c-wave in the a-b-c move up from Monday's low, it will achieve 62% of wave-a at 1408.22 and that's usually the minimum for a c-wave. We're obviously close to that level and what it means is that the rally could fail at any time now.

While I have higher projections for this rally (near 1418 now), stay aware that the rally has achieved the minimums at this point and the risk is on the bulls' side. But confirmation that something more bearish is going on takes a break below yesterday's close.

Jeff Bailey : 3/8/2007 10:39:02 AM

$141 - 2.26 = $138.74

Jeff Bailey : 3/8/2007 10:38:00 AM

SPY Option Chain ... Screen capture I took as SPY traded WEEKLY Pivot. I had sorted it by volume and here's what I saw just moments later Link

Keene Little : 3/8/2007 10:35:38 AM

A similar pattern on the NDX as shown for the DOW and SPX would have two equal legs up in its bounce just under 1770 which is close to the 43% retracement of the decline. The 1790 level crosses through the top of a parallel up-channel for this week's price action later today. Link

Keeping with the thought that the Thursday prior to opex is the head fake day, this rally could be setting us up for a down week next week. This morning's gap up surprised me but so far the pieces are still coming together for a good shorting opportunity soon.

Jeff Bailey : 3/8/2007 10:34:21 AM

sudden jump in volume for the SPY $141 Puts on a downtick.

Jeff Bailey : 3/8/2007 10:33:04 AM

EIA: Weekly Nat. Gas Storage ... draw of 102 BCF Link

Jeff Bailey : 3/8/2007 10:27:51 AM

10-year ($TNX.X) up 3.2 bp at 4.528% ...

Jeff Bailey : 3/8/2007 10:27:23 AM

VIX.X 13.63 -10.56% ...

Jeff Bailey : 3/8/2007 10:27:08 AM

SPY $141.00 +1.03% ... gets the trade at WEEKLY Pivot. March's "Max Pain"

Jeff Bailey : 3/8/2007 10:22:15 AM

Treasury's Paulson: China should open banking to foreigners

MarketWatch Link

Jane Fox : 3/8/2007 10:21:43 AM

NQ's June volume has now overtaken March's.

Jane Fox : 3/8/2007 10:20:34 AM

Today the odds of a selloff are a lot less than they were yesterday and I think this is a "Get long and stay long" day.

Jane Fox : 3/8/2007 10:19:49 AM

Another comment about yesterday's selloff. Even though the AD volume and VIX were quite bullish the AD line was hovering under +500, which does put a little dampening on the bullishness. Not a lot but some.

See how these all work together and how you can draw a picture when you have all the pieces.

Jane Fox : 3/8/2007 10:17:32 AM

AD line is +2012

Jane Fox : 3/8/2007 10:17:20 AM

Follow the VIX today. It is making new daily lows so ES is making new daily highs.

Keene Little : 3/8/2007 10:09:49 AM

SPX looks similar to the DOW as this 30-min chart shows. If SPX can rally up to the 1418 area by tomorrow that would be the setup for a short play. Because we're in a correction it can unfortunately chop all over the place and not give us a lot of clues. Therefore it takes a drop below 1380 before we could say there's something more bearish already started. The top of the channel is currently near 1408 (also near its 130-pma) which is where it might get to before pulling back some. Link

Jeff Bailey : 3/8/2007 10:08:48 AM

BOE Keeps Rates Unchanged at 5.25%

Jane Fox : 3/8/2007 10:05:24 AM

VIX hovering around daily lows and AD volume making new daily highs. This is not a time to be short. Yesterday we saw this same setup and we had a selloff but that was out of the ordinary or you could say the odds were against you that the market was going to fall - according to the internals that is. But since I hang my hat on the internals a short yesterday was going against the odds. Same story today a short is going against the odds I play.

But as you saw yesterday they are only odds and not guarantees and why you have stops in place. I was sure glad I had my stops in place yesterday.

Jeff Bailey : 3/8/2007 10:02:24 AM

10:00 Market Watch found at this Link

Keene Little : 3/8/2007 9:57:01 AM

This DOW 30-min chart shows a potential small parallel up-channel for price action since Monday's low. If yesterday afternoon's pullback is it for wave-b then two equal legs up off Monday's low is at 12396. Interestingly that level crosses through the intersection of the top of the small parallel up-channel and the downtrend line from the February highs on Friday. Link

Keene Little : 3/8/2007 9:53:55 AM

A bit choppy this morning as the bulls and bears duke it out here. Both the DOW and SPX are running up into their 30-min 100-pmas and typically this moving average acts as support/resistance so there's a fair chance we're going to see a pullback soon.

Jane Fox : 3/8/2007 9:51:48 AM

ER2's June contracts' volume has now overtaken March's so switching to June for ER2.

Jane Fox : 3/8/2007 9:44:35 AM

June volume is quickly catching up with March's now. Usually between 10:00EST and 10:30EST the front month (June) will take over.

Jane Fox : 3/8/2007 9:42:28 AM

There they go.

Jane Fox : 3/8/2007 9:42:20 AM

Interestingly the TICKs have not made a +800 - yet.

Jane Fox : 3/8/2007 9:41:17 AM

VIX opens below its PDL and is making new daily lows. TRIN is 0.66 so all is well in bull country.

Jane Fox : 3/8/2007 9:40:30 AM

I said I would be using the June contract but the March still has the most volume so for now I will use the March.

Jane Fox : 3/8/2007 9:37:29 AM

AD line is a very bullish +1802 and of course AD volume is above 0 and climbing.

Jane Fox : 3/8/2007 9:23:45 AM

I reverted back to the March contract charts to get a picture of how the futures looked overnight and they were down right bullish.

Jane Fox : 3/8/2007 9:22:46 AM

The VIX and AD volume, two very reliable indicators, were telling me we were going to see higher highs yesterday but the markets sold off late in the day so I did not expect to see the futures up this morning. Link

Jane Fox : 3/8/2007 9:15:36 AM

Here is the daily chart of Gold. I bailed on my long GLD position and will once again open it if I see Gold break this resistance. Link

Keene Little : 3/8/2007 9:14:42 AM

So much for more pullback. With this morning's large gap up (the rally started around 9:00 PM last night and made a very steady climb thanks to overseas markets) it would appear that yesterday afternoon's pullback is it. If so it was much shorter in both time and price than usual and has bullish implications for today.

It's possible it will change the kind of bounce we get (for example, a sharper a-b-c bounce or something a little more complex) and that could change the upside projedtion for where it will end. We'll need to see how price action develops this morning. Shorts from yesterday's high have obviously been stopped out. If by chance the market drops back down to close this morning's gaps then we could still be in a b-wave correction before getting wave-c up into Friday?Monday. Tough call right here.

Jane Fox : 3/8/2007 9:13:43 AM

The US $ is strong, which should put downward pressure on Gold. But Crude is up putting upward pressure on Gold so the net result is Gold moves sideways. Link

Jane Fox : 3/8/2007 9:09:52 AM

I just brought up my IB workstation and here are the volumes for the March and June contracts:

ES March 138K June 27K
YM March 7.3K June 895
ER2 March 12.37K June 9.16K
NQ March 31.31K June 10.07K

By 10:00EST the volume figures should reverse and June's volume will take over.

Jane Fox : 3/8/2007 9:03:32 AM

NEW YORK (MarketWatch) -- Gold futures edged higher on Thursday, supported by a solid performance on international stock markets, but a rise in the dollar and flat crude oil prices capped gains.

Gold for April delivery was last up $1.20 at $654.10 an ounce on the New York Mercantile Exchange.

"Sentiment has improved dramatically across the metals spectrum in the past 24 hours through a combination of fundamentals and external factors such as the dollar and oil," said James Moore, an analyst at TheBullionDesk.com.

It still remains to be seen whether the recovery is sustainable; however, if prices manage to stabilize above $656, the market might rise sharply, boosted by funds building fresh long positions, Moore said.

Jane Fox : 3/8/2007 9:01:34 AM

WE had a bullish overnight session and from what I can see PDHs have been broken.

Jane Fox : 3/8/2007 8:57:47 AM

Rollovers really make a mess of the continuous contract charts so I will not be showing the overnight charts this morning since they will not make much sense.

Jane Fox : 3/8/2007 8:56:31 AM

Today is rollover Thursday and I will be trading the June (M) contract.

Jane Fox : 3/8/2007 8:53:54 AM

WASHINGTON (MarketWatch) -- The number of workers filing for unemployment benefits fell by a seasonally adjusted 10,000 last week to 328,000, but the four-week average of new claims moved up to a 17-month high of 339,000, the Labor Department said Thursday.

A Labor Department spokesman said there were no special factors in the latest week.

The four-week average is considered a better gauge of underlying trends than the weekly number because it smoothes out one-time events, such as weather or holidays. The four-week average of new claims hasn't been higher since the aftermath of Hurricane Katrina in the fall of 2005.

The four-week average of new claims is up about 10% compared with a month ago.

Jane Fox : 3/8/2007 8:53:02 AM

LONDON (MarketWatch) -- European Central Bank President Jean-Claude Trichet gave a relatively hawkish opening statement after hiking interest rates by a quarter point, saying current policy is still "accommodative" and that it will have to "very closely" monitor price developments. Medium-term outlook for economic activity remains favorable, he said.

Jane Fox : 3/8/2007 8:51:53 AM

NEW YORK (MarketWatch) -- Wal-Mart Stores Inc. said Thursday that February same-store sales rose moderately, missing Wall Street's expectations, hurt by weakness in clothing, home merchandise and hardlines.

For March, the world's largest retailer expects sales at stores open at least one year to rise 1% to 2%, and it expects the softness in clothing and home goods to remain through spring.

Bentonville, Ark.-based Wal-Mart (WMT), the world's largest retailer, said February total U.S. same-store sales rose 0.9%. Total company sales for the four weeks ended March 2 rose 8.1% to $26.79 billion.

At Thomson Financial, analysts were looking for same-store sales to rise 1.5% compared with last year's 3.7% increase.

Jane Fox : 3/8/2007 8:50:52 AM

Target Corp. (TGT) expects March same-store sales to increase 11% to 13%, helped by the timing of the Easter holiday, according to a prerecorded conference call Thursday. For the combined March/April period, the Minneapolis-based retail giant expects same-store sales to increase 4% to 6%. In the March year-ago period, same-store sales, or sales at stores open at least a year, rose 2.2%. Earlier Thursday, Target said February same-store sales rose 5.7%.

Jeff Bailey : 3/8/2007 3:38:17 AM

3 Chart Montage (update) after YM short stopped at 12,250 ... Link ... YM 12,247 here.

Off to bed. See you in the morning.

Jeff Bailey : 3/8/2007 3:32:18 AM

USD/JPY 116.73

EUR/JPY 153.65

Jeff Bailey : 3/8/2007 3:31:45 AM

YM short stop alert at 12,250.

Jeff Bailey : 3/8/2007 3:29:34 AM

The other day I showed the cross rate point and figure chart of the USD/JPY and noted that it had achieved its bearish vertical count.

The point and figure cross rate chart of the EUR/JPY bearish vertical count is much lower to 141.90.

Jeff Bailey : 3/8/2007 3:27:42 AM

YM 12,241 ...

Jeff Bailey : 3/8/2007 3:27:30 AM

EUR/JPY 153.73 ... tried, but a little "weaker"

Jeff Bailey : 3/8/2007 3:26:45 AM

USD/JPY 116.74 ... came back to evening high.

Jeff Bailey : 3/8/2007 3:26:19 AM

YM short lower stop alert ... to 12,250

YM 12,242

Jeff Bailey : 3/8/2007 3:22:58 AM

YM 12,238

Jeff Bailey : 3/8/2007 3:22:22 AM

YM 12,241 ... post-profile low.

Jeff Bailey : 3/8/2007 3:21:44 AM

YM short lower stop alert to 12,255.

YM 12,245

Jeff Bailey : 3/8/2007 3:16:29 AM

EUR/JPY 153.56

USD/JPY 116.66

YM 12,247

Jeff Bailey : 3/8/2007 3:11:53 AM

YM just testing DAILY R1 now 12,247

Jeff Bailey : 3/8/2007 3:11:24 AM

3 Chart Montage 5-minute intervals of EUR/JPY ; USD/JPY and YM Link

No help from a/d, or anything else.

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