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OI Technical Staff : 3/23/2007 9:59:59 PM

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Jeff Bailey : 3/23/2007 9:52:48 PM

Closing U.S. Market Watch found at this Link

Keene Little : 3/23/2007 6:57:16 PM

One last comment after looking at a bunch more charts. I'm feeling a little more antsy about expecting another push higher on Monday. It's just possible that the market snuck in a high during the past 2 days (depending on which index/sector you look at). The way this market caught everyone looking the wrong way on Feb 27 has me wondering if we're being set up the same way, as per my earlier comment on the NDX (4:34).

If we get any kind of gap down or strong sell off on Monday, take it seriously and get out of the way if you're long. If you want to get short (my hand is raised) we'll have to watch for the possibility for an early entry. We'll see how things look Sunday night. Have a great weekend.

Keene Little : 3/23/2007 5:02:54 PM

The key level for the bulls in GOOG remains 465--a rally above that level is needed to break some important resistance levels. Otherwise this one could go either way, and soon. Link

Keene Little : 3/23/2007 4:55:53 PM

No change to CME's picture. It could easily go either way here. Link

Keene Little : 3/23/2007 4:43:37 PM

With the NDX looking like it could rally immediately on Monday but SPX and DOW looking like they could pull back a little first, it leaves Monday's open a bit of a guess. The RUT is holding its uptrend line from March 14th so it too could immediately head up on Monday. Link

But the bottom of a parallel up-channel (based on the trend line between the 1st and 3rd waves and then a parallel attached to the 2nd wave) shows it could pull back a little before setting up the next rally leg. In either case this looks like it should resolve to the upside. A break below 800 would look more immediately bearish.

Keene Little : 3/23/2007 4:34:06 PM

NDX has pulled back to its uptrend line and looks like a good setup for a run higher on Monday for its 5th wave. The only thing making me nervous about an upside resolution here is that this is the way the pattern looked for the DOW and SPX before it fell out of bed on February 27th. A break below its 50-dma would therefore be potentially bearish. Link

Marc Eckelberry : 3/23/2007 4:24:04 PM

You better be a very good daytrader to short gold and oil. It's a full time job and frankly, not very rewarding.

Marc Eckelberry : 3/23/2007 4:23:17 PM

And since I think the crack spread is setting up oil at 70 once again, I really think shorting gold is high risk. But that's just me.

Marc Eckelberry : 3/23/2007 4:22:09 PM

The long term trend for gold is up. I have read chart analysis for two years that keeps telling gold will fall. (didn'tt we go through this in October at 575? I thought I was going to go nuts there were so many gold bears).The only chart you can rely on is the longer term trend, then use shorter term to identify long entries on pullbacks. Gold is fundamentally under priced relative to the DOW.
We are entering a period of stubborn inflation and I suspect gold will keep on chugging up to 850 then 1000. There is just no good risk reward on being short, only on brief swing trades. One week down, three weeks up...

Keene Little : 3/23/2007 4:01:53 PM

If the corrective bounce in gold has finished and we're into the first leg down, then this is how I see the wave count unfolding: Link

After a brief consolidation near the lows here GLD should move down to close its gap from March 19th at 64.78. That move down would complete a small 5-wave move down from yesterday's high and give us one larger degree first wave down. That would lead to another corrective bounce (into the 38%-62% retracement zone) which would set up a stronger decline from there as it heads probably to the low $50's as we head into May/June.

Jeff Bailey : 3/23/2007 3:59:46 PM

As a reminder, March metals futures settle next week.

Keene Little : 3/23/2007 3:45:13 PM

The DOW and SPX charts remain very similar and it's just a guess at this point but I'm hoping we'll get a little pullback to tag the uptrend lines from March 14th and then a final push higher to finish the rally leg on Monday. Then get shorty for what should be a great ride (if you're short). DOW: Link and SPX: Link

Jane Fox : 3/23/2007 3:44:57 PM

The drop in Gold today is not unexpected and probably healthy but it needs to hold this support, which is the 50EMA and the 50% retracement of the rally off the March 14th lows. Link

Jane Fox : 3/23/2007 3:32:38 PM

This has been another really tough day to trade. I was caught up in it however, if you took the long ES trade I suggested with a stop just below daily lows then you are still OK. At least trade wise you are OK but I'm not sure how you would be doing psychologically. Link

Marc Eckelberry : 3/23/2007 3:17:30 PM

As long as the DOW holds the 50 DMA today, I don;t feel like shorting.

Jeff Bailey : 3/23/2007 3:16:05 PM

03:00 Internals found at this Link

Marc Eckelberry : 3/23/2007 3:13:19 PM

I'm waiting for YM to get to its gap at 12684 and NQ half way in (ES also).

Keene Little : 3/23/2007 3:10:42 PM

As a reminder of where we could potentially be in the market here, this is the CMGI weekly chart that I had shown yesterday. Look at the price action after the 2000 high--it dropped sharp and then we got a sharp a-b-c bounce where wave-c came almost all the way back up to the January high. Granted, this is on a weekly chart but I just wanted to review the pattern. Link

Now look at the NDX daily chart: Link Does it look at all familiar? It's the reason I'm showing a strong decline to follow (think of it as a mini-crash). It of course doesn't have to happen this way, or at all for that matter. Any rally above 1830 (gap close) would have me getting much more bullish and forgetting about the bearish side. But unti that happens I think we're ripe for a big drop and the reason I'm (im)patiently waiting for the setup to get short.

Jeff Bailey : 3/23/2007 3:02:24 PM

03:00 Market Watch found at this Link

Jeff Bailey : 3/23/2007 2:38:04 PM

USD/JPY 117.97 ... hasn't budged last few sessions.

Jeff Bailey : 3/23/2007 2:36:42 PM

Excellent, excellent commentary from Rick Santelli ... dollar and Treasury yields.

A lot of capital has been flowing OUT of Treasuries, and so far its been staying here at home DXY 83.28.

Jeff Bailey : 3/23/2007 2:32:36 PM

Good gravy! IMCL $38.21 +12.78% ... it has been a gap-fest the past four sessions.

Jeff Bailey : 3/23/2007 2:29:52 PM

US SENATE PANEL VOTES TO RAISE MEDICAID DRUG REBATES

DJ- Senate Appropriations Committee votes to raise by almost a third the amount of money drug manufacturers must pay the government in rebates on brand-name drugs sold under Medicaid.

Marc Eckelberry : 3/23/2007 2:28:26 PM

Inflation is just too much of a threat now and I doubt gold will correct much more. April needs to hold 655/657. If it does, we merely had an overbought pullback. 10, 20 and 50 dma are support and still lined up below. Back in with a tight stop

Jeff Bailey : 3/23/2007 2:24:31 PM

That was close ... Simon Property Group (SPG) $114.90 +0.92% ... should add it to my watch list.

Jeff Bailey : 3/23/2007 2:22:17 PM

FREDDIE '06 NET RISES 4%, PLANS $1B BUYBACK

DJ- Mortgage-finance giant reports 2006 net income of $2.2 billion, but posts a net loss of $480 million for 4Q. Net interest income for year drops $1.2 billion, to $4.2 billion. Firm plans to buy back up to $1 billion in common stock.

FRE $62.54 +0.48% ...

Jeff Bailey : 3/23/2007 2:21:13 PM

GEITHNER DOESN'T SEE SUBPRIME WOES SPREADING

DJ- Problems don't appear to be spreading to broader credit markets, says Fed's Geithner, who sees recent innovations making markets "more resilient." Plosser expects flatter yield curve in future, and notes inflation data not encouraging.

Jeff Bailey : 3/23/2007 2:19:18 PM

GM HITS 3-WEEK HIGH AFTER BONUSES

DJ- Shares gain 4%, slightly down after trading at a three-week high one day after the company discloses granting restricted stock units to top-level executives for the first time in four years.

Jeff Bailey : 3/23/2007 2:18:20 PM

US SENATE BACKS TOBACCO TAX INCREASE IN TEST VOTE

DJ- Senators back 59-to-40 a proposed increase to federal tobacco taxes to partly offset the cost of increasing federal support for the State Children's Health Insurance Program. Harry Reid and two other Democrats vote against plan.

Jane Fox : 3/23/2007 1:56:13 PM

WASHINGTON (MarketWatch) -- A federal judge on Friday ordered Vonage Holdings Corp., the Internet-phone company, to stop using patented technology owned by Verizon Communications Inc.

Yet the order by U.S. judge, Claude Hilton does not go into effect immediately, pending an appeal by Vonage. The court will hear Vonage's request for a stay in two weeks. The company could appeal that decision as well.

Hilton had been expected to issue an injunction after a federal jury ruled last week that Vonage violated several Verizon patents. The jury ordered Vonage to pay $58 million in damages as well sizable royalty fees.

Vonage insists that an injunction will not interrupt the company's business and said that customers should see no change in their phone service. The company plans to use a technology "workaround" to avoid infringement of the Verizon patents.

Keene Little : 3/23/2007 1:55:24 PM

The 10-year (TNX) has made it above its downtrend line from Jan 31 so it could be the start of an important move by bonds. They're currently at the top of a potential new parallel up-channel so we might see a pullback from here. A retest of its broken downtrend line and continuation higher would obviously be bullish for yields (bearish for bonds). Link

While analysts argue about the FOMC policy statement I think the bond market is voting with its feet. And higher bond yields would strongly suggest the Fed will stand pat at best, raise rates at worst.

Keene Little : 3/23/2007 1:38:53 PM

Here's an update to the RUT 60-min chart (they all look the same) and the flat correction we're in. I show the possibility for an immediate breakdown but that's not my preferred wave count. The green count in the move up from March 14th shows the need for a 5th wave up to finish the rally. The 816 area holds some real promise for a high for the move. Link

Keene Little : 3/23/2007 1:31:33 PM

Could the symptoms the market is showing (no buying and no selling) be caused because no one seems to feel the need to sell because we are all hedging our accounts? Put selling and Put buying have increased so much recently. Could that be a factoid and if so, what dangers could there be? Got any guesses here? I don't remember so little movement in the RUT ever. Thanks, Marie

Ever watch a cat and dog stare each other down to see who makes the first move? Need I say more? I think we're still in a 4th wave correction. The reason they tend to be flat listless corrections is because of the previous strong 3rd wave (the big rally from Monday to Wednesday in this case). After the 3rd wave traders aren't sure we're going to continue up or pull back. Then when we don't get much of a pullback the bulls get brave and step back in to do some more buying.

But they do it with less enthusiasm, and with fewer participants, and that's why the 5th wave is almost always negatively divergent from the previous 3rd wave. That's the new high, with bearish divergence, I'm hoping to see in the next day or so.

As for the amount of put buying and selling, I haven't been able to use option sentiment for successful trading. Maybe it's just me but I haven't found it useful for timing in my trades. It's a great heads up tool, to warn me about getting too bearish or bullish, but for trading I don't use it. One thing's for sure--there are a lot more people using put options today than back in 2000. Talking to people about puts back then usually resulted in a blank stare.

Marc Eckelberry : 3/23/2007 1:30:27 PM

HGX negative, NQ is down.

Jeff Bailey : 3/23/2007 1:21:16 PM

01:00 Internals found at this Link

Jane Fox : 3/23/2007 1:16:49 PM

Shoulda stuck to my orginal thoughts that today was not a day for trading. If long I certainly hope you have your stops in, that sell program came out of nowhere.

Jeff Bailey : 3/23/2007 1:05:01 PM

01:00 Market Watch found at this Link

Jeff Bailey : 3/23/2007 12:57:11 PM

US House Approves Iraq War Funding Bill With Withdrawal Date

Jane Fox : 3/23/2007 12:53:11 PM

Here is McMillan's Weekly update - Volatility has certainly returned to this market. There have been two very large down days, and several volatile up days. Back-and-forth movements of this sort are exactly what inflates statistical volatility. It's not only prices that have been volatile; sentiment has been volatile as well. Huge moves are being made, based on minor bits of news (a minor tightening of Chinese market regulations set off the decline, and yesterday's vague Fed report -- analysts are still arguing about its meaning -- set off intense buying). One school of thought holds that increased volatility is bearish, but it really isn't. Volatility increased for most of 1995 through 1999 and the market rallied strongly for most of that time.

Yesterday's strong rally saw $SPX break out over resistance at 1410. In our opinion, this was a major development and confirms that the outlook has turned bullish once again. This was similar to the upside breakout last summer (August 2006), and we expect only a minor pullback before higher prices evolve. The next resistance level for $SPX is 1460 (the highs), while there should be support at 1410 -- although we don't expect that a pullback will be that deep.

The equity-only put-call ratios remain extremely oversold (see Figures 2 & 3, and refer to the feature article), but have not rolled over to buy signals yet. We expect they will do so soon.

Market breadth has expanded dramatically ever since the market bottomed a week ago. New bullish phases that are accompanied by expanding breadth have traditionally seen higher prices immediately regardless of the supposedly "overbought" condition.

Finally, the volatility indices have declined and produced buy signals. There is a dichotomy: $VIX has now dropped well below the statistical volatility of $SPX -- something that rarely happens. The market can continue to advance while $VIX remains low, of course.

In summary, we are bullish.

Jeff Bailey : 3/23/2007 12:44:42 PM

Swing trade NAKED Put close out/buy back alert ... Let's go ahead and buy back the two (2) Valero Energy VLO Apr $57.50 Puts (VLO-PY) at the offer of $0.25. ($0.20 x $0.25)

VLO $63.50.

VIX.X 12.91

Jeff Bailey : 3/23/2007 12:41:30 PM

Freeport McMoran (FCX) $61.94 +0.04% ... relatively unchanged, but rare to see a miner #2 most active at the big board.

Marc Eckelberry : 3/23/2007 12:34:22 PM

YM has not yet hit the Feb gap like everyone else, although NQ 1831 sure looks like a top for now. (100% projection last week and 1828.25 gap open Feb).

Marc Eckelberry : 3/23/2007 12:30:46 PM

In fact, lots of traders are shorting this market per pc ratio. I am not sure we have seen the highs.

Marc Eckelberry : 3/23/2007 12:29:28 PM

Lots of puts at 32.50 and the stock is back above 200 DMA. Some good news on patent with QCOM today. 32.45 must hold.

Marc Eckelberry : 3/23/2007 12:22:43 PM

I like BRCM here.

Keene Little : 3/23/2007 12:20:41 PM

GLD has clearly broken its uptrend line from March 14th and that means that leg up is done. Since I'm counting it as wave-c of the a-b-c off the March 5th low, that means the correction is complete and down we go. If you're short then your stop should be just above the 66.13 high. Link

Another minor new low today would complete a small 5-wave move down from yesterday morning's high and that will set up a bounce. Gap close at 64.78 from March 19th could make for a good short term support level. I doubt a bounce will make it back up to retest the broken uptrend line so watch for a 38%-62% retracement of the drop as an opportunity to get short. It should be a good ride down. And since equities and gold have been in synch lately, this is perhaps portending what's to come for equities.

Marc Eckelberry : 3/23/2007 12:15:16 PM

should have stayed in, the Swiss franc is waking up.

Jeff Bailey : 3/23/2007 12:10:37 PM

Target for PTR-FD is $128 in the underlying.

Jane Fox : 3/23/2007 12:09:22 PM

Dateline CNN - Britain's Ministry of Defense confirms to CNN that Iranian naval vessels have seized 15 British Navy personnel on patrol in the Persian Gulf.

Jeff Bailey : 3/23/2007 12:09:03 PM

Disclosure ... I currently hold a bullish position in PTR.

Jeff Bailey : 3/23/2007 12:08:29 PM

Bullish swing trade call alert ... for one (1) of the PetroChina PTR Jun $120 Calls (PTR-FD) $1.85 x $2.00 at the offer (or work it)

PTR $112.60 +0.87% ...

Jane Fox : 3/23/2007 12:08:19 PM

It may be safe to try a long ES but make sure you get a really good entry and put your stop just under daily lows. "They" may come for it if you put your stop too close so be careful. This is where the art of trading comes in.

Marc Eckelberry : 3/23/2007 12:04:11 PM

DOW is above 50 DMA., Remember what they say about dull days...

Jeff Bailey : 3/23/2007 12:03:04 PM

StreetTracks Gold (GLD $65.09 -1.01% ...

Jeff Bailey : 3/23/2007 12:01:56 PM

Recalled Cat Products Link

Jeff Bailey : 3/23/2007 12:01:23 PM

Recalled Dog Products Link

Jeff Bailey : 3/23/2007 12:00:11 PM

Rat Poison Found in Tainted Pet Food ... AP Story Link

Marc Eckelberry : 3/23/2007 11:53:40 AM

I'm flat on gold until the dust settles. Bad day for traders.

Jeff Bailey : 3/23/2007 11:52:12 AM

Sector Bullish % Status Changes ...

CHEMicals reversed back up from "bear alert" to "bull confirmed" at 72%.

OIL reversed back up from "bear confirmed" to "bull alert" at 42%.

TRANsports/Non Air reversed back up from "bull correction" to "bull confirmed" at 60%.

Keene Little : 3/23/2007 11:49:37 AM

I think we could still be in a 4th wave correction in the move up from March 14th. I had mentioned Wednesday that it would be typical for it to take up to 2 days which was why I was thinking we'd get a 5th wave rally Friday/Monday (a 4th wave correction typically takes as long, or longer, than the 2nd wave correction which took almost 2 days).

And the reason I say there could be a scalp short if the uptrend line from yesterday breaks is because I'm not sure it would drop very far. This SPX 30-min chart shows the parallel channel price is in and we could still get a drop, or sideways move, to the uptrend line before we see the next leg up. Link

Jeff Bailey : 3/23/2007 11:43:14 AM

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

Marc Eckelberry : 3/23/2007 11:34:39 AM

Forget the SOX, the new indicator is HGX...

Marc Eckelberry : 3/23/2007 11:34:25 AM

HGX now up some more and NQ is back at 1819.

Marc Eckelberry : 3/23/2007 11:34:22 AM

Another scare for gold bugs, but YG holds 10 dma and now back above 50 dma and 38.2%. As Jane said, not a good day to trade, but maybe a day to take a position.

Keene Little : 3/23/2007 11:29:33 AM

Looking at the DOW and SPX I guess from a short term perspective you could try a scalp short if today's uptrend line breaks, or even better if the uptrend line from yesterday breaks. The upside just doesn't look like there's enough oomph to entice me into that side of the pool. But right now I agree with Jane--don't force anything here just to trade. Knowing when not to trade is half (3/4?) the battle for traders.

Marc Eckelberry : 3/23/2007 11:28:06 AM

HGX ticks down, YG ticks up and NQ ticks down. And vice versa. The dollar strength is tied to HGX right now.

Marc Eckelberry : 3/23/2007 11:27:13 AM

Tip of the day: NQ and YG are trading tick by tick with HGX.

Jeff Bailey : 3/23/2007 11:19:49 AM

11:00 Internals found at this Link

Jane Fox : 3/23/2007 11:18:38 AM

IF you MUST trade stay on the long side and use ES as your trading vehicle.

Marc Eckelberry : 3/23/2007 11:03:59 AM

The one concern gold traders should have is the dollar, which seems to be finding a footing. Put your stops right above 10 DMA 9curent low), play it safe. But overall inflation fears and the Fed lack of hawkishness in that area should be supportive longer term.

Jane Fox : 3/23/2007 11:03:04 AM

This is horrible but there is nadda I can do about it. You need to be sitting on your hands and don't even think about trading. The spike we saw earlier was the 10:00 New home sales report release but there was absolutely no follow through. ANother day of just watching which in my books is better than another day of loses.

Jeff Bailey : 3/23/2007 11:02:52 AM

11:00 Market Watch found at this Link

Marc Eckelberry : 3/23/2007 10:51:16 AM

And of course, don't forget the Yen which is on a bid.

Marc Eckelberry : 3/23/2007 10:49:50 AM

Use IB for HGX,, it's delayed on Qcharts unless you bought the Philly package. If HGX starts reversing to negative again, then stocks could be in trouble.

Marc Eckelberry : 3/23/2007 10:48:21 AM

Markets are overbought, so we are due for a pullback. It's just very hard to get short when HGX is up.

Marc Eckelberry : 3/23/2007 10:46:51 AM

Gold is dependent on equities holding up which I think they will. NQ is in a tight range but 1815 is support and bears cannot crack it. Do not trade against HGX (housing), it is the leading indicator these days.

Jeff Bailey : 3/23/2007 10:46:21 AM

GSTI Softward Index (GSO.X) 189.02 +0.16% Link ... tentative as it takes a look at its 02/22/07 "doji" 52-week high.

Marc Eckelberry : 3/23/2007 10:46:13 AM

I'm back in gold at 50 DMA and 20 DMA confluence, I'm using the June contract now as it will see more volume next week. The profit taking is also due to IMF news on transparency from Central banks but also normal rotation out of April for non-delivery. This is a good opportunity to get back in if 661/661 holds on June contract. (657 April). I'm back in at 664.20 June (657 April). This is a good trade sp far as I exited April at 664.40 two days ago (June 670).


Keene Little : 3/23/2007 10:37:38 AM

The Trannies are on fire this morning, up +1.3% here, and that should keep bears cautious.

Jeff Bailey : 3/23/2007 10:32:20 AM

May Copper (hg07k) $3.12 +1.62% ... closed on its 200-day SMA yesterday, up 5 cents on the stronger than expected existing home figures.

Jeff Bailey : 3/23/2007 10:30:30 AM

Valero Energy (VLO) $63.65 +1.50% ... continues to impress. 80.9% retracement just ahead at $65.09.

Keene Little : 3/23/2007 10:28:37 AM

NDX has remained in more of a sideways pattern than the others and that makes this morning's post-10:00 AM pop higher questionable. Did it finish the rally in a very short 5th wave or is it just part of the consolidation from yesterday? When looking at the DOW, especially with it tagging its 62% retracement of the decline at 12509, I could say the rally just might be over. NDX says nope, we're just consolidating and haven't see the next rally leg yet. Stay cautious--no clear signals yet.

Jeff Bailey : 3/23/2007 10:26:35 AM

Caterpillar (CAT) $67.00 +0.67% ... backfills its 02/27/07 gap down.

Jane Fox : 3/23/2007 10:19:20 AM

WASHINGTON (MarketWatch) - Sales of existing homes unexpectedly rose 3.9% in February to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors reported Friday.

The sales pace is the highest since April. The 3.9% gain was the largest since March 2004, exceeding expectations of a decline to about 6.35 million. January's sales pace was revised down to 6.44 million from 6.46 million.

Sales have risen three months in a row for the first time in three years. Sales are down 3.9% compared with a year ago.

Jeff Bailey : 3/23/2007 10:16:49 AM

US Oil Fund (AMEX:USO) $50.75 +1.13% ...

Jeff Bailey : 3/23/2007 10:16:23 AM

UK Says 15 Sailors Held By Iran In Iraqi Waters

Keene Little : 3/23/2007 10:15:11 AM

From Dave, with two houses to sell:

Someone just sold 3200 April 1460 Calls at 7 SXZ DL. I am betting they did not buy them to hold. This has the smell of the reverse of what they did last month at the low. If they are buying the SPX this morning I would look for their sell orders to hit this PM and those 1460 @ 7 will be bought back for less than 3. A nice tidy profit for the weekend, eh? Must be nice to know what order flow is going to be.
Dave the Cynic

Isn't $4 times 3200 = $1,280,000? That would help me out of my housing dilema.

Jeff Bailey : 3/23/2007 10:14:23 AM

US February Existing Home Sales Up 3.9% to 6.69 Million Rate

DJ- Existing-home sales unexpectedly climbed in February, but subprime market woes could chill demand farther down the road.

Home resales rose to a 6.69 million annual rate, a 3.9% increase from January's revised 6.44 million annual pace, the National Association of Realtors said Tuesday. January's rate was originally estimated at 6.46 million.

The median home price was $212,800 in February, compared with a revised $210,900 in January and a revised $215,700 in February 2006.

NAR chief economist David Lereah said some of the rise might have been due to mild weather. "But fundamentals have improved in the housing market," he said.

The February resales level was above Wall Street expectations of a 6.33 million sales rate for previously owned homes.

Delinquency rates for subprime mortgage loans rose at the end of last year. Wall Street is worried tighter lending standards for borrowers with less-than-sterling credit could slow home sales in the future.

Lereah predicts subprime problems could cost 100,000 sales to 250,000 sales a year over the next couple years. Those are sales of new and existing homes.

"Will it affect the housing market? Yes," he said. "But it's not going to lead to an economic recession."

Inventories of homes rose 5.9% at the end of February to 3.75 million available for sale, which represented a 6.7-month supply at the current sales pace. There was a 6.6-month supply at the end of January.

Regionally, existing-home sales were mixed. Sales rose 3.9% in the Midwest, 14.2% in the Northeast, and 1.6% in the South. Demand in the West was flat.

Jane Fox : 3/23/2007 10:07:11 AM

Here is how the markets are trading in relation to their PDRs. Link

Jane Fox : 3/23/2007 10:05:45 AM

That didn't take long to fizzle.

Jeff Bailey : 3/23/2007 10:02:50 AM

10:00 Market Watch found at this Link

Jane Fox : 3/23/2007 10:02:23 AM

Oh and BTW VIX is making new daily lows.

Keene Little : 3/23/2007 10:02:03 AM

Looks like we're getting our rally out of this sooner rather than later.

Jane Fox : 3/23/2007 10:01:05 AM

OK it may be for real this time. AD line is now +700 and AD volume spiking.

Jane Fox : 3/23/2007 10:00:27 AM

TICKS +1000

Keene Little : 3/23/2007 9:59:13 AM

Here's another reason I like a gold short. Looking at the volume on the daily chart of GLD (to avoid the volume changes on expiring and new front-month contracts on the futures), the a-b-c correction to the initial decline has been met with declining volume. Link

When trading, follow the volume and dying volume means dying interest. I suspect when GLD tips back over that volume will increase again. Whether it tips over here or after another poke higher to tag its 62% retracement of the initital decline is the question in my mind. I think it's a good place to try the short side recognizing that it could still bounce up to 62% at 66.20.

SLV looks the same and as of this morning it has broken its uptrend line from March 14th. GLD has done the same in the last few minutes.

Jane Fox : 3/23/2007 9:49:14 AM

This is starting out just like yesterday and, like I said before, could be a long day.

Jane Fox : 3/23/2007 9:45:00 AM

On days like this the markets should find support at the overnight lows so take note of them.

Jane Fox : 3/23/2007 9:39:59 AM

Not enough gun powder (AD line and volume) to break PDHs though.

Jane Fox : 3/23/2007 9:38:24 AM

TICKS +800 HMMMM

Jane Fox : 3/23/2007 9:38:05 AM

ES opens at 1445.75 and since it yearly open is at 1446.25 we have a +10 above this range and +5 below.

Jane Fox : 3/23/2007 9:36:37 AM

AD line as "surged" to +128. :)

Jane Fox : 3/23/2007 9:35:32 AM

ER opens at 815.20 so we have a +10 above this number and +6 below. Could be another lonnngggg day.

Jane Fox : 3/23/2007 9:33:43 AM

Opps VIX above its PDH but TRIN is below.

Jane Fox : 3/23/2007 9:33:18 AM

AD line is +28 and AD volume at 0.

Jane Fox : 3/23/2007 9:31:51 AM

NEW YORK (MarketWatch) -- Gold futures rose Friday, tracking a rally in crude oil prices, sparked by a report that 15 British navy officers have been seized by Iranian forces at gunpoint while patrolling off the coast of Iraq.

Gold for April delivery gained 90 cents at $665.10 an ounce on the New York Mercantile Exchange, reversing early losses in electronic trading.

The British boarding party had completed a successful inspection of a merchant ship when they and their two boats were surrounded and escorted by Iranian vessels into Iranian territorial waters, the U.K. Ministry of Defense said. The Iranian ambassador has been summoned to the Foreign Office, the ministry said.

Keene Little : 3/23/2007 9:30:34 AM

Other than the effort to lift the futures in the early morning hours, peaking at 8:00 AM and now back to basically flat, not a whole lot happened overnight. Another pullback towards yesterday's lows is very possible but so is a rally directly from here. This should resolve to the upside but there's the risk we're going to get a sneaky top to this. If we see choppy price action that works its way north then instead of a rally out of it we could see a sudden failure from it.

The February 27th high caught a lot of traders, myself included, by surprise. I kept thinking the consolidation of price was going to lead to another rally leg out of it. Instead it gapped down and fell hard from there. That's why I keep warning about downside surprises. We never know what could trigger selling that then gets out of hand. So I'm looking for an upside resolution out of this but I recognize that it may not look like I've depicted on the indices in the charts posted below. Stay on your toes since we should be getting close to the end of this bounce.

Jane Fox : 3/23/2007 9:16:15 AM

Philadelphia Fed President Charles Plosser is due to speak on banking, and New York Fed President Timothy Geithner is speaking at a credit markets symposium.

Jane Fox : 3/23/2007 9:07:52 AM

I suspect Gold will retest its support at 650-660 and if I see evidence of a swing low I will add to my GLD position. Link

Jane Fox : 3/23/2007 9:08:16 AM

I really think crude will break its resistance this time. Link

Jane Fox : 3/23/2007 9:04:30 AM

The rally we are seeing in Crude is certainly helping my long gold position. The US$ is now breaking its overnight low. Link

Jane Fox : 3/23/2007 9:01:25 AM

Markets stayed within their respective PDRs overnight suggesting we will be getting more of the same kind of non direction we saw yesterday, a digestion of Wednesday's huge rally. If indeed we do consolidate again today then that just gives me all the more reason to think we will see higher highs next week. Link

Jane Fox : 3/23/2007 8:57:28 AM

The only report out today is the 10:00a.m. Feb Existing Home Sales. Expected -2.0%. Previous: +3.0%.

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