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OI Technical Staff : 4/19/2007 9:59:59 PM

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Keene Little : 4/19/2007 6:38:13 PM

Gold (GLD) has pulled back to its broken downtrend line from May 2006 so the test is on. If it holds here and bounces higher then you'll want to be long. Link

Based on the gold stocks (XAU) I'm comfortable being short the metals at the moment. Just need some downside follow through now. Link

Keene Little : 4/19/2007 6:28:50 PM

Roadmap updates for indices:

The market leaves open several possibilities which makes directional trading right now a risky game. Wait for better clarity. The DOW shows the possibility for a sideways triangle to form into next week and then an upside resolution. It could of course immeidately rally or immediately tank but there's no clear direction from here yet. Link

Same with the SPX--I've got several possibilities and Fibs and trend lines trying to figure out the next move. It's a guess and that means flat is good. SPX continues to struggle with its 1474 Fib level (as does the DOW with its 12814 level) so a failure to get above and stay above will be bearish. A continuation of the sideways consolidation though will be bullish (for at least one more leg higher to 1484-1489 next). Link

NDX is the same. Follow through with GOOG to the upside will be important for the techs in which case the 1850 level should be next. It still takes a break below 1815 for the bears to start claiming some victories. Link

The RUT looks the most bearish at the moment but its decline looks sloppy and corrective and therefore could also be setting up another rally leg. Watch support at its uptrend line and Thursday's low near 816. Link

Keene Little : 4/19/2007 6:17:41 PM

Here's an updated GOOG 60-min chart with a projection to the 484 area before failing and dropping back down (bearish count) vs. continuing up to at least the 494-496 area as part of the bullish count. Do you suppose the spike up after the earnings announcement to 495.93 was just a coincidence? Or how about the fact that it seems to be settling in after-hours trading in the 484-486 level? We'll know more tomorrow. Link

Keene Little : 4/19/2007 5:15:11 PM

Friday's pivot tables: Link and Link

Keene Little : 4/19/2007 5:00:36 PM

GOOG is holding its gains after hours and ES and NQ are working their way higher so we'll just have to see what carries over to tomorrow morning.

Keene Little : 4/19/2007 4:08:03 PM

And with that we got a huge jump in GOOG after hours here--up about 15 after spiking up more than +25. Now we'll see what happens when they offer some guidance.

Keene Little : 4/19/2007 3:59:43 PM

And that's my final answer.

Keene Little : 4/19/2007 3:59:31 PM

A little bounce into the close is the move that would set up a gap down opening and that's the way I'm currently leaning. GOOG to disappoint tonight? That's the way it looks from here.

Jane Fox : 4/19/2007 3:55:23 PM

6 minutes to go and SPX at 1469.80. Oh no!

Keene Little : 4/19/2007 3:48:45 PM

I think they are just trying to pin QQQQ at 45

And a fine job they're doing--QQQQ curently trading $45.00.

Keene Little : 4/19/2007 3:46:21 PM

But I reserve the right to change my opinion at the bell when I'll give my final answer (I hated that show).

Keene Little : 4/19/2007 3:45:36 PM

After updating the charts I'm getting the feeling we're set up for a downside surprise tomorrow. GOOG and CME, while not clear, point to at least a move down over the next few days. SPX dropped sharply today, bounced and failed at that 1474 Fib level, it then dropped impulsively which was followed by another corrective bounce and now down again. This is potentially setting up a gap down scenario tomorrow. I consider the long side the riskier side as we head into the close.

Jane Fox : 4/19/2007 3:39:28 PM

Just as wrote that TICKS hit -800. Man alive!!

Jane Fox : 4/19/2007 3:39:06 PM

I have a bet with a fellow trader that the SPX will close above 1470. None of this coffee stuff though we have bet a beer.

Keene Little : 4/19/2007 3:36:48 PM

I've updated the charts for CME to reflect the latest price action. I've relabeled the wave count on the daily chart, taking away the attempt to count it impulsively to the downside which puts it more in synch with the bearish counts I have on the broader market. Link

For the bearish count (dark red), the move down to the February low is wave-A and the whole sideways/up move since then is wave-B, and wave-C down is next. The bullish wave count (green) considers the whole sideways triangle since the January high as a 4th wave correction. Once complete (it needs another small leg down to complete it), it calls for a rally leg to a new high.

Note that the bullish count here, which actually looks very good, fully supports Marc's contention that we'll see a rally into May. This stock did a good job at predicting the market rally off the December pullback so take this one seriously if you're a bear.

The 60-min chart zooms in closer to the current price action and shows the key levels. But a break below 544 could mean only a minor drop to just below 540 so trade quickly with this one until a longer term direction is clearer. The short term bearish divergence at the last high and two out of three scenarios here pointing down, that's my best guess for the short term. Link

Jane Fox : 4/19/2007 3:17:22 PM

NEW YORK (MarketWatch) -- Superior Offshore is on deck to raise about $130 million in its initial public offering on Friday as the underwater oil and gas services firm draws backing from Wall Street. As solar, ethanol and other alternative energy deals have made their mark in the IPO market in recent months, they've been joined by a steady stream of deals from companies tied to the fossil fuel businesses.

Superior Offshore (DEEP) supplies deep sea diving services and ships equipped with helicopter pads and cranes for offshore drilling operations in the Gulf of Mexico.

The Lafayette, La. company plans to sell roughly 8.7 million shares within a range of $14-$16 in a bid to raise about $130 million in its initial public offering debuting Thursday.

Keene Little : 4/19/2007 3:04:22 PM

GOOG reports tonight and that could be a market mover if only because it's a good measure of bullish vs. bearish sentiment. Based on its pattern over the past 6 weeks one would have to say the market has been bullish but not convincingly. The bounce off the March low has been anything but impulsive. Unfortunately it's not providing a lot of clues as to how traders will react to tonight's earnings. Here's the daily chart: Link

GOOG is trying real hard to break its downtrend line from January although that line is based only on the two points near that high so it may not have much meaning. Today's high was just shy of its 62% retracement at 483.97 (today's high is a spike high at 481.95 so I'm not sure if that's real). The 60-min chart shows how messy the rally has been: Link

I've got Fib projections and retracements all over this so it's messy but it's important to note the confluence of Fibs around the 484 level. Hence that's a key level for the bulls to break through. Any post-earnings push above that level, and held, will be bullish for a move at least up near 500. On the other hand, a break below 470 would be a bearish heads up which would be confirmed with a break below 462. It's a coin toss here and I don't play coin tosses.

The one potentially bearish thing I see is that it tagged the 481.29 Fib level (where dark red wave-C reached 162% of wave-A in the move up from March 5th). So if you're gutsy, since this one has single stock futures (wide spread though and $4 premium), you could short a sharp move up towards 484 in hopes that it's a stop run. Then cover if it gets above 484. Either that or try a strangle and hope the next move is big enough to cover your expenses.

Keene Little : 4/19/2007 2:38:21 PM

NDX is showing a potential ending pattern with a broadening top--an expanding triangle (often the left half of a diamond top). Inside these patterns it's often difficult to identify the 5th wave since it just looks like part of the chop (and is one reason I often say a 5th wave is a no-show). It still takes a drop below 1815 to negate the bullish wave count but heads up here since it's possible to call a high to the A-B-C move up from March 29th. It takes a push back above 1840 to keep the bulls alive. Link

Keene Little : 4/19/2007 2:18:08 PM

THANKS [for RUT update]. For May closure where do u see the target might be based on 840-841 top? Know hard to say but best guess. GG

Sorry, forgot to answer that part. (As envelope is held to forehead) I'd say it will below 840. How's that for precise? (grin) As shown on the daily chart, if price drops directly from here then it could be down around 730 by May expiration. If we get the labored rally higher first, then the first move down will be a 1st wave in a brand new decline. As such it could chew up a lot more time than price so it's purely a guess with not much to base it on. Here's the current daily chart I've been showing: Link

So, playing with some Fib retracements and time projections, as shown on the chart here: Link , the decline should drop faster than the red-dotted control line. So if the initial decline retraces 62% of the rally from the March 14 low in 38% of the time then we get a drop to near 790 by May 18th (opex Friday). Needless to say there's quite a difference between the two scenarios for May expiration and I'll update this projection as we move forward. And of course they're both bearish. There's still Marc's bullish opinion to consider.

Keene Little : 4/19/2007 1:37:13 PM

BTW, you'll notice on the updated RUT chart that we should rally into the end of the month before we can call a top. It will be a very choppy move with lots of whipsaws, mostly chewing up time and traders' accounts.

Keene Little : 4/19/2007 1:29:38 PM

Keene if u are thinking near term (Next 1-3 days) bullish, then what do u think RUT targets are if SPX is 1484 or 1489. Can u shed some light on the move down then also? GG

RUT is looking a bit more bearish at the moment but looks can be deceiving. While it violated the top of wave-(i) (shown in green on the 60-min chart) by only 23 cents, one could argue from a purely EW standpoint that that move negates the potential for a 5th wave up (a 4th wave cannot violate the 1st wave high). Link

The one exception to this rule is when the move is in a triangle, and an ascending wedge is a triangle pattern. In that case each of the 5 waves is a 3-wave move and can overlap. I hope that makes some sense. And that's what I've been thinking is playing out in the techs and small caps. So it's a subtle change but here's the updated wave count: Link

At this point, in order to finish a 5-wave move up inside the wedge, from the March 14 low, we need to have another 3-wave move up to a new high. I like the Fibs around 840-841. Often waves 3 through 5 will be equal to wave-1 in these patterns and that's shown with the 841.41 projection. Wave-5 = 62% of wave-3, also the most common in these patterns, at 840.80. It takes a break below 803 to negate this wave count.

Jane Fox : 4/19/2007 1:20:42 PM

Even though this is OPEX week, the VIX has been very helpful today. Link

Keene Little : 4/19/2007 1:05:25 PM

I had mentioned in last night's Wrap that the bullish move in the banks looks like it could take the BIX to 405 for two equal legs up off the March low. BIX is rallying today with a high so far at 399.75 so still some upside potential there.

I also mentioned that the brokers could be topping though--yesterday they jumped up and tagged the broken uptrend line from June 2006. While there's a Fib target at 253 (yesterday's high was 250.24), it'll be worth watching to see if this one can press any higher. Once this bounce is finished, like the broader market, we should see the decline continue to below the March lows, and it will be a very fast move (c-waves are like 3rd waves). Link

Marc Eckelberry : 4/19/2007 12:58:18 PM

We are getting very extended, no doubt, but there are so many shorts out there, we just keep going up as the boyz shove their stops right at them. There are having a field day, but I also think many funds are playing catch up now.

Keene Little : 4/19/2007 12:55:49 PM

SMH has now broken up out of its triangle pattern so a good long play would be a pullback to the top of it. It's currently stalled at its 62% retracement of the 2006 decline and the risk for longs is that this is a throw-over and will collpase back inside the pattern. But if this is a bullish breakout then the first upside Fib target for the move is at 37.43 which is where the 2nd leg up (wave-c) would equal 62% of the 1st leg up (wave-a, which is the rally off the July 2006 low). Link

Marc Eckelberry : 4/19/2007 12:55:28 PM

Maybe not today, but tomorrow or Monday.

Marc Eckelberry : 4/19/2007 12:55:09 PM

YM is headed for 12900.

Keene Little : 4/19/2007 12:51:09 PM

So there's the move to a new high so now you should be flat or long. If long, use the last pullback low as your stop. If this is winding up for a 3rd of a 3rd (in the larger 5th wave shown on the 60-min chart), then that last pullback low should not be violated.

Marc Eckelberry : 4/19/2007 12:53:11 PM

Don't short a market with SOX and financials up. Too much work for little reward.

Keene Little : 4/19/2007 12:44:48 PM

The reason I say to use the last high as your stop (and you may want to reverse long if stopped out) is because the bullish interpretation of this bounce is that we're getting ready for a very strong 3rd of a 3rd wave higher. So if you flip around long then you'd use this current pullback low as your stop. Keeps things nice and tight while trying to figure out the next direction. If stopped out again that's when you head to the sidelines knowing we're just going to chop sideways.

Keene Little : 4/19/2007 12:39:20 PM

Now you can see why I tell my kids I have the greatest job there is--all I have to do is say my abc's and count to 5 all day long.

Keene Little : 4/19/2007 12:38:06 PM

I showed the short term wave pattern that calls this morning's move down as the completion of a 4th wave (indicating another rally leg coming). Here's how today's price action counts out if this morning's drop was wave-1 and the bounce is wave-2 (using DOW 5-min chart): Link

The bounce is being counted as a double zigzag (a-b-c-x-a-b-c) and the two a-b-c moves had equality at the 12814 level. If you shorted this bounce, that's now your stop level. A drop to a new daily low could pick up a lot of speed because it would be a 3rd wave down.

Marc Eckelberry : 4/19/2007 12:34:15 PM

Booked partial profits on SMH AUG 35 calls at 2.63, entry 1.77. Target is reached (36.20 or so), although I think we are going higher still, so I am leaving some on the table. Solid trade.

Jane Fox : 4/19/2007 12:28:02 PM

For a longer term trade in VLO I would wait for the monthly to turn back green but for those of you who want a shorter term trade this is perfect. The daily has gone red and the 60 is just starting to get back green, once that flows into the 120 minute you could take a long but for more conservative traders you could wait for the daily to turn back green. Link

Keene Little : 4/19/2007 12:24:49 PM

Notice that those two levels (DOW 12814 and SPX 1474) are the same Fib levels I was watching on the 60-min chart for the move up to see if they would act as resistance. Interesting that they're back in play here (potentially). I'll have to go check my Gann chart to see if those numbers have some significance.

Keene Little : 4/19/2007 12:23:15 PM

SPX will have two equal legs up at 1474, not quite hit yet.

Keene Little : 4/19/2007 12:22:15 PM

Looking at the bounce off this morning's low, two equal legs up for the DOW is at 12814 which was just tagged on that spike up. This is where you could try shorting this in case that's the end of the bounce. Just keep a tight leash on it.

Jane Fox : 4/19/2007 12:21:52 PM

This little puppy may be setting up for a nice long. I will look at it on my jtHMA SS and see if this is a dip to buy. Link

Jane Fox : 4/19/2007 12:19:35 PM

Markets liked the FED Philly report.

Jane Fox : 4/19/2007 12:19:15 PM

WASHINGTON (MarketWatch) -- The manufacturing sector in the Philadelphia region expanded very slowly in April for the third straight month, the Federal Reserve Bank of Philadelphia reported Thursday.

The Philly Fed diffusion index was unchanged at 0.2 in April after 0.2 in March, indicating that a bare majority of firms surveyed by the bank were expanding in April.

New orders, shipments and employment were relatively unchanged in April.

Manufacturing firms were a bit more optimistic about the future, however. The future index rose to 25.8, the highest reading in a year, from 17.4.

The new orders index, reflecting demand for durable goods, rose marginally to 2.8 from 1.9. The shipments index fell to 4.3 from 6.8. The employment index increased to 2.5 from 2.3.

The prices paid index rose to 24.3 from 21.8.

Keene Little : 4/19/2007 12:18:47 PM

The downside objective for XAU, for two equal legs down from the May 2006 high, is at 95.90 which would take it down to its long term uptrend line from November 2000 (the projection crosses the uptrend line this coming July).

Jane Fox : 4/19/2007 12:18:25 PM

NQ almost to its PDH!

Jane Fox : 4/19/2007 12:17:55 PM

Took my long just one move too soon.

Jane Fox : 4/19/2007 12:17:22 PM

VIX to new daily lows tells you not to be short.

Keene Little : 4/19/2007 12:13:46 PM

Here's another reason to like a short in the metals. XAU did a picture perfect throw-over of its sideways triangle consolidation and has now collapsed back inside. File this one away for a perfect example of how these patterns end. Buy a couple of puts on this baby and enjoy the ride (go out to at least September on them--the Sept 140, XAVUH, is currently 8.30 x 8.60). Your stop will be at a new high. Link (for some reason QCharts is having trouble with the data for some of the PHLX symbols so no oscillators on the chart).

Keene Little : 4/19/2007 12:04:47 PM

Having laid out the bullish scenario, the current bounce is only a corrective 3-wave move so far. If this is followed by a new daily low then all bullish bets should be off the table since we could get a swift decline to follow.

Jane Fox : 4/19/2007 12:02:12 PM

Silly me I tried a long because the TICKs were hitting +800 and I got shaved.

Marc Eckelberry : 4/19/2007 12:01:24 PM

The markets will keep going up overall (maybe a headfake correction)as long as the present wall of worry stays in place.

Keene Little : 4/19/2007 11:56:23 AM

Here's what I see setting up bullishly for the next day or two (and is a good example of a correction for those trying to learn EW). As a reminder, this 60-min chart shows a potential 5-wave count from the March 30th low, labeled as waves (i) through (v). This morning's low may have finished the 4th wave. There are a couple of upside Fib projections of interest, the first being just under 1484 and then 1489 above that. Link

The 1484 level is where SPX would have two equal legs up from the March 14th low. The 1489 level is where the 5th wave will equal 62% of the 1st wave. The reason I like that (if not the 1484) is because the 1st and 3rd waves were nearly equal and when that happens the 5th wave is normally shorter. Moving in, this 15-min chart shows the 4th wave and why this morning's low could have completed it: Link

This is a good example of an expanded flat correction, also called an irregular flat. Notice how wave-B made a new high above the end of wave-3. When that happens the c-wave will usually go to 162% of wave-A, and that Fib projection is at 1463.72. This morning's low was 1464.47. The previous 4th wave (of wave-3) is often a support level and that was at 1465. So the pieces fit to call for another push higher in wave-5 and if we get it, keep an eye on those upside Fib projections.

Jane Fox : 4/19/2007 11:44:18 AM

I really like things that talk to me so I don't have to use a lot of objectivity, which I find has a tendency to fly out the window during the trading day.

Jane Fox : 4/19/2007 11:42:05 AM

Here is the open number system on ES, YM and ER. if you were to go long which market would you use? Also if you did use ES or YM you would have gone long this morning and would still be long.

I do have to add a caveat here though because I use the internals more as a guide than I do the number system and since they are both so out of whack today it is another reason to just not trade. When this number system is in sync with the internals you are putting huge odds in your favor. Link

Keene Little : 4/19/2007 11:36:59 AM

We're definitely at the point in the market where we'll soon know whether we'll have a bullish or bearish May/June period. I'll let the breaks of key price levels tell me which EW count to follow. We all trade with a bias of course but the trick to survival is never let the market move against you while doggedly sticking to your opinion. That's why God invented stops and now all we have to do is use them religiously.

Jane Fox : 4/19/2007 11:35:03 AM

I had a question from a subscriber (who didn't use his/her name :() about my open number system so I thought a recap here would be a good idea. Here is how it works.

I apply a number to the open:
Yearly - 1
Monthly - 2
Weekly - 3
Daily - 4
And I will stay long when the cumulative number is above 7 and short when the number is below 3.

Using the ES chart for an example. You add the monthly open way down at 1431.75 (+2), the yearly open at 1446.25 (+1), the weekly open at 1467 (+3) and the daily open at 1473 (+4) which is +10 and you will stay long above 1473. However below 1473 you only have a +6 so you step aside and do not trade.

I will show ES, YM and ER in a minute. Link

Marc Eckelberry : 4/19/2007 11:32:01 AM

The second half could be very bearish, but I think we will see SPX 1500 before the spring is over.

Marc Eckelberry : 4/19/2007 11:31:22 AM

May could be very bullish, on short covering alone. The calendar will not repeat like last year.

Marc Eckelberry : 4/19/2007 11:29:33 AM

Back for a sec. NQ closes the gap at 1848. Keene, what I meant is that bears left a fortune on the table always waiting for a top to short. In fact, since hwere were several "tops" the past few weeks, I'm pretty sure they wiped out their accounts as well. So yes, there will be a top, there is ALWAYS a top, but that is not what the game is about, I think. It's great to look for resistance and there were many shorts, but all in all, it has been much easier to buy pullbacks because that's the trend. And frankly, if we were to have a macro discussion, I don;t think we will put in a top until June.

Marc Eckelberry : 4/19/2007 10:57:40 AM

I would not trade this until the closing hour or hour and a half, especially if you booked some nice gains on the run to NQ pivot at 1845 from 1832. The morning gap is not closed yet (1848, but we came close enough). They will probably hold QQQQ 45 and COMP 2500 with lots of chop. Support is 1832, 1836.50 and 1838.25. Gotta go, be safe and always remember the macro trend.

Keene Little : 4/19/2007 10:55:18 AM

I haven't checked for myself but I'm told the Bradley Model has a turn date tomorrow/Friday. Since we've rallied into this turn date is can be assumed (if it works) that it will mark a high in the market. It fits and it may soon be time for the bears to show that they do in fact "get it". The short term risk is a pullback today could lead to a final push higher into the end of the week (for the 5th wave up as I showed on the SPX chart).

Jane Fox : 4/19/2007 10:54:04 AM

The jtHMA spreadsheet shows the DOW is now playing a game of catchup and is becoming the stronger market. This is not surprising because it has lagged for weeks. Notice the MID Cap is the one that seems to be falling the fastest and if you remember the MACD I showed earlier was also the weakest. This is also not surprising because it has lead for weeks.

If Gold's daily turn red then back green it is a very good spot to get long.

Oil is still bearish because the monthly is still red.

Silver same story as Gold. Link

Keene Little : 4/19/2007 10:50:27 AM

The big houses have been regularly collecting income month after month with short puts so there's probably a concerted effort to hold the market up this week to ensure they get this month's income as well. The risk for the market is that a decline could be accompanied by hedging by shorting the stocks/indices. This is why selling could quickly accelerate. Right now we have nothing more than a pullback in progress but understand the downside risk here.

Jane Fox : 4/19/2007 10:45:11 AM

I do think the best trades today are gone and that you should step aside.

Jane Fox : 4/19/2007 10:44:45 AM

AD volume to new daily lows so NO longs but the VIX is hovering at daily lows so that tells me NO shorts either. You should take what Keene said about this been OPEX week into consideration though.

Marc Eckelberry : 4/19/2007 10:31:45 AM

SMH in the green once again. Target is still 36.20.

Jane Fox : 4/19/2007 10:31:34 AM

TRIN is 0.63 but AD line is -1150. Just goes to show the TRIN can be very deceptive.

Keene Little : 4/19/2007 10:29:47 AM

Nice recovery off the lows. NQ has closed this morning's gap but the others are lagging. The bounce, while strong, hasn't shown its cards yet to tell me whether it's just a corrective bounce or something more. So far it's just a 3-wave bounce so any turn back down that hits new daily lows will be a sell signal. Until then watch the chop.

Jane Fox : 4/19/2007 10:26:07 AM

TICKS now at +1000.

Marc Eckelberry : 4/19/2007 10:26:53 AM

The brave are rewarded for buying the NQ Monday gap close (Dan, you were with me). COMP above 2500, OEX held 670. This is not Feb 2007 or Ap 2006. Bears are not getting it.

Jane Fox : 4/19/2007 10:12:45 AM

I need to redo the TICKs, they only hit +800. I had to redraw my lines and I put the wrong alert on the +800.

Jane Fox : 4/19/2007 10:10:59 AM

That is very true Keene. Funny though the VIX was downright bullish right before the TICKS hit +1000. Who the heck knows today. :)

Keene Little : 4/19/2007 10:06:52 AM

Don't forget Jane that opexantics will tend to skew things like put/call ratios and VIX this week.

Jane Fox : 4/19/2007 10:04:55 AM

Look at that TICKS +1000, yes Virginia that is a "+".

Jane Fox : 4/19/2007 10:03:47 AM

Once again VIX to new daily lows and AD volume is to new daily lows. This is impossible.

Jane Fox : 4/19/2007 10:02:45 AM

WASHINGTON (MarketWatch) - Slower growth will persist this summer, the Conference Board said Thursday, saying its index of leading economic indicators rose by 0.1% in March after falling the two previous months.

"The data may be pointing to a softer economy this summer," said Ken Goldstein, labor economist for the private research group.

"The housing and manufacturing sectors are going through a correction, despite a modest pickup in March," he said. "Business investment is another area of concern."

"Only the consumer sector, buoyed by income growth and positive attitudes, remains a strong point in the economic picture," Goldstein said.

The leading indicators, designed to forecast turning points in the economy, has now fallen 0.1% over the past six months, with just three of the 10 components advancing.

Keene Little : 4/19/2007 10:04:42 AM

The US dollar left a nice hammer doji at this morning's low on the 60-min chart so we'll see if that leads to anything more than just a bounce. This euro daily chart continues to support the idea of a reversal in the currencies is coming. Link And this is the USD chart from last night's Wrap: Link

This expected (hoped for) reversal in the currencies is the reason I've hung onto my silver short for as long as I have. All the chop near the top has made me nervous that it's been a bullish consolidation pattern. If we get the reversal in the currencies though then I'll start to breathe a little easier and let it ride.

Marc Eckelberry : 4/19/2007 9:54:24 AM

COMP 2500 is resistance.

Jane Fox : 4/19/2007 9:53:53 AM

Oh Man!!! WE have the VIX falling as the AD volume is falling. These two are out of sync and you know what that means, Bull and Bear Battle.

Marc Eckelberry : 4/19/2007 9:52:29 AM

OEX held 670 and that is a key level for bulls. More upside in the coming days if that holds.

Jane Fox : 4/19/2007 9:54:22 AM

Gold and Oil lose their respective overnight lows but I still don't see much of a move upward in the $(albeit my chart is on a 20 minute delay).

Jane Fox : 4/19/2007 9:47:38 AM

ES and NQ are using their PDLs as resistance. Link

Jane Fox : 4/19/2007 9:44:38 AM

Interestingly though the TICKS have not even made it to -800. That has to concern the bears.

Jane Fox : 4/19/2007 9:43:49 AM

AD line now at -1896.

Keene Little : 4/19/2007 9:42:21 AM

Metals and equities are selling off together this morning, as they should. This is starting to look like something more than just a pullback. But that's a very early call and opex volatility is still in play here. The setup was good for this and now all bears need to see is some impulsive price action to the downside followed by corrective bounces.

This is still a bullish market though and if SPX works it way down to the bottom of a parallel up-channel from April 12th, possibly finding support at its previous Feb high near 1461, then it could form the 4th wave as the green depiction shows on this 60-min chart. The bulls are not in trouble on this index until 1448 is broken (wave-(i) high). Link

Jane Fox : 4/19/2007 9:35:34 AM

VIX opens well above its PDR and the bears have the ball this morning and are running for a touchdown.

Jane Fox : 4/19/2007 9:33:41 AM

AD line a very bearish -1050 and of course AD volume is well under 0.

Jane Fox : 4/19/2007 9:29:30 AM

Mid Cap Macd should be a bother to the bulls and may be telling us it is the market to use if trying to take advantage of the decline I suspect we will see in the next little while. Link

Keene Little : 4/19/2007 9:27:44 AM

This is why I'm still a little concerned that the metals are only pulling back in a corrective move. Gold has dropped in a 3-wave pattern and could find support at the bottom of its up-channel from the end of March, currently where price is right now at 687. That will need to break before I start to relax a little about my short. I like the EW count calling for a top so now I'm waiting for confirmation with an impulsive decline. Link

Jane Fox : 4/19/2007 9:27:29 AM

Ditto here. Link

Jane Fox : 4/19/2007 9:26:51 AM

This is a very bullish chart and MACD supports the bullishness. Link

Jane Fox : 4/19/2007 9:26:00 AM

Here is your daily chart of the $RUT.X. I suspect a return to support at around 810. Link

Marc Eckelberry : 4/19/2007 9:25:11 AM

JPY June support is 0.008535, which is pretty much USD/JPY 108. Watch those two if daytrading.

Keene Little : 4/19/2007 9:21:35 AM

It was a nice steady decline in equity futures overnight and then a recovery effort started at 4:00 AM. ES is up 4.50 off the bottom and it's still down 7.50. Pretty ugly start to the day. It would appear that late-day sell off provided some clues.

The dollar still hasn't started to rally yet (or the eruo to sell off) but the metals are starting to drop and that may be a heads up. I think selling the EUR/USD pair is a good trade. My silver short from 14.12 is looking pretty good this morning and hopefully it's in the early stages of a waterfall decline (instead of a corrective pullback). If you're short the metals you should now pull your stop down to a new high for them.

Marc Eckelberry : 4/19/2007 9:21:11 AM

Keep in mind that opex players will be showing up when there is a lull in the action.

Marc Eckelberry : 4/19/2007 9:20:35 AM

ES and YM have further down to go to get to their 10 DMA, which NQ tagged already.

Marc Eckelberry : 4/19/2007 9:12:09 AM

NQ gap close at 1832 held up overnight. Line in the sand will be further down at 1820, but it does not look like we will have a repeat of February or last year.

Jane Fox : 4/19/2007 9:11:03 AM

NEW YORK (MarketWatch) -- Gold futures fell Thursday, as news of faster-than-expected growth in China in the first quarter triggered worries that the government will have to take measures to slow down its economy, reducing demand for metals.

Gold for June delivery fell $5 to $688.30 an ounce on the New York Mercantile Exchange.

"Bullion prices started the day off on the downside once again, as currencies and oil presented a somewhat nebulous picture and oil retreated under $63 per barrel," said Jon Nadler, analyst at Kitco Bullion Dealers.

"Then, there is the problem (if one can call it that) of China's amazingly hot rate of growth," Nadler said. It has prompted "anxieties once again that the authorities will intervene in some manner to try to curb what could well become overheating."

Jane Fox : 4/19/2007 9:09:03 AM

Please remember the 10:00 March Conference Board Leading Indicators.

Jane Fox : 4/19/2007 9:06:54 AM

WASHINGTON (MarketWatch) - The number of people applying for state unemployment benefits fell by 4,000 to 339,000 in the week ending April 14, the Labor Department reported Thursday.

The four-week average of new claims - which smoothes out distortions caused by one-time events such as holidays and weather - rose by 5,250 to 328,750. It's the highest in five weeks.

Initial jobless claims have swung wildly this winter and spring, driven by seasonal layoffs, severe weather and the timing of holidays.

There were no special factors affecting the data this past week, a Labor Department spokesman said.

Jane Fox : 4/19/2007 9:06:24 AM

US $ was very weak overnight but so was Gold and Oil. The only market I watch outside of the equity markets that made any headway was Tbonds.

We will see the $/Gold/oil relationship correct itself sometime today and the most likely scenario would be Gold and Oil up but for some reason I believe it will be the $ up and we will see further weakness in Gold and Oil. Link

Jane Fox : 4/19/2007 9:01:02 AM

All equity markets broke their PDLs overnight in a much needed retracement; however, the large cap indexes have all regained their PDRs leaving the smaller caps behind. That was a very nice move overnight and you could have actually traded it, if you were so inclined.

I will be using open number system and of course the internals to tell me which side to be on today but I suspect it will be the short side. Link

Jane Fox : 4/19/2007 8:56:34 AM

NEW YORK (MarketWatch) -- MetroPCS Communications Inc. (PCS) priced its initial public offering at $23 a share, above its earlier range of $19-$21, as the profitable communications firm marks the first IPO of the year to top $1 billion in proceeds. With 50 million shares in the deal, MetroPCS raised $1.15 billion with underwriters Bear Stearns, Banc of America Securities, Merrill Lynch and Morgan Stanley. The IPO debuts Thursday on the New York Stock Exchange under the symbol PCS.

Jane Fox : 4/19/2007 8:53:52 AM

Dateline WSJ - Merrill Lynch & Co.'s first-quarter net income soared as a big year-earlier stock-compensation charge hurt earnings in that period. Investment banking remained a standout for the company.

The New York securities firm posted net income of $2.16 billion, or $2.26 a share, compared with $475 million, or 44 cents a share a year earlier. Earnings in that period excluding the charge would have been $1.65 a share.

Revenue jumped 24% to $9.85 billion.

The mean estimate of analysts surveyed by Thomson Financial was for first-quarter earnings of $1.97 a share on revenue of $9.07 billion.

Marc Eckelberry : 4/19/2007 4:38:52 AM

NQ closes the gaop at 1832. Needs to hold. Watch USD/JPY 118.

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