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Keene Little : 3/12/2007 12:14:47 AM

As a reminder, I will not here for the open on Monday but should be back at my desk by noon. See you then.

Keene Little : 3/12/2007 12:11:19 AM

If RUT hits the 790, what do you think about the April 750 puts, RUTPJ??

Anthony, If I'm right on how much the RUT will drop, and how quickly, then those puts should do well. But if I'm wrong on either time or price then that's a risky bet. I'd prefer something closer to ITM and more time (June). That of course makes it more expensive but it gives you more time to see if the trade is going to work (needs to work by the end of the month otherwise it's not going to be the kind of money making opportunity as I currently see it). If by the end of March the RUT hasn't moved down enough or fast enough, then you should still be OK with a June put. The April put, especially if it's OTM, may suffer a lot of premium decay if the RUT waffles around too long at the current level.

Keene Little : 3/11/2007 10:46:33 PM

Updated charts:
DOW daily: Link
DOW 60-min: Link
SPX daily: Link
SPX 60-min: Link
NDX daily: Link
NDX 60-min: Link
RUT daily: Link
RUT 60-min: Link

The common theme among the charts is that they're perched on the edge and could tip right over and head south in a big way this week. But that would have to start pretty much right away on Monday. Any continued chopping sideways, or especially with a push back above Friday's mid-day bounce, would say the more bearish 1-2, 1-2 wave count down from Friday's high is not the correct pattern.

If the more bearish wave count is not correct then we should be looking for a continued push higher early this week. I show a projection for price to give us close to two equal legs up which looks like the 62% retracements of the decline could be upside targets.

But as I show on the RUT 60-min chart, the rally could fail at lower levels based on another corrective pattern that I don't show (gets too crowded on the chart). Just stay aware that a bounce could fail at any time, and quickly. But we could get a larger pullback that is then followed by another push to a new high for the bounce (not likely in my mind but a possibility). We need to let price play out some more to get more clues about this.

I've also updated the GOOG and CME daily charts: Link and Link GOOG pulled back to the top of its gap again on Friday, after dipping into the gap earlier in the week. A rally above 465 (where it would close its Feb 27 gap) would have it breaking its downtrend line from the Feb 1 high. Otherwise GOOG has the potential to be building a very bearish nested 1st and 2nd waves down which would result in a swift decline occurring soon. A push back above 485 would negate that bearish count.

On Friday CME bumped its head on its downtrend line from January and a rollover here has the potential to pick up speed to the downside as per the bearish count. Or there is the possibility that a minor new high could complete a 5-wave move up from the late-February low which could then be counted as a truncated finish to its long term rally. It takes a push above 595 to say the bulls are in control but then resistance is not much higher than that--about 620-625.

Keene Little : 3/11/2007 10:45:13 PM

Monday's pivot tables: Link and Link

OI Technical Staff : 3/11/2007 9:59:59 PM

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