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Keene Little : 5/9/2007 1:00:23 AM

Wednesday's pivot tables: Link and Link

Marc Eckelberry : 5/8/2007 10:41:43 PM

Even though CSCO sold off, I find it interesting that NQ is getting a bid at 1900, weekly pivot after hours. I would not jump to conclusions and think we will have an automatic overnight sell-off. Careful. A lot will depend on how YM handles 13340 resistance.

OI Technical Staff : 5/8/2007 9:59:59 PM

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Jeff Bailey : 5/8/2007 7:54:42 PM

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

Jeff Bailey : 5/8/2007 7:46:02 PM

Closing Internals found at this Link

Jeff Bailey : 5/8/2007 7:29:31 PM

Closing U.S. Market Watch found at this Link

Keene Little : 5/8/2007 5:02:58 PM

CSCO must have said something disappointing since it's continuing to drop lower, at 26.65 it's closing its gap up that was left on May 2nd and now approaching $2 off today's close. Its 50-dma is at 26.33. This will probably cause some problems for the rally tomorrow.

Jeff Bailey : 5/8/2007 4:25:40 PM

Walt Disney (DIS) $36.55 +1.35% ... $36.03 extended on headline numbers.

Earnings Press Release Link

Consensus was for EPS of $0.38 on Revenue of $8.13B.

Jeff Bailey : 5/8/2007 4:23:54 PM

CSCO Earnings Press Release at this Link

Jeff Bailey : 5/8/2007 4:23:06 PM

ERTS Earnings Press Release at this Link

Consensus was for EPS of $0.02 on Revenue of $586.97M.

Jeff Bailey : 5/8/2007 4:20:27 PM

Electronic Arts (ERTS) $52.94 +3.05% ... gets active $52.13 extended on headline numbers.

Keene Little : 5/8/2007 4:19:13 PM

So the initial reaction to CSCO's earnings wasn't exactly positive--spiked down below 27 after closing at 28.34. Currently trading 27.50.

Jeff Bailey : 5/8/2007 4:10:00 PM

Cisco Systems (CSCO) $28.36 +1.97% ... darts to $27.29 on headline numbers.

Jeff Bailey : 5/8/2007 4:09:08 PM

email reply ... Yes! Here's QCharts' symbols for Fed Fund futures (May-December) at this Link ... May-August forecast little change in Fed policy at 5.25%. Slight bias toward 25 bp cut to end of year.

Take 100.00 - Fed Fund Futures contract to get targeted rate.

Keene Little : 5/8/2007 4:06:00 PM

Front month Call OI on CSCO pretty high. Many are betting for good report from CSCO. From a contrarian perspective, may be a bearish portend.

Thanks Austin, we'll soon find out.

Keene Little : 5/8/2007 4:02:14 PM

Did they really let the DOW settle in the red by 3 points? Tch, tch, I'm so disappointed in the Boyz. Their midas touch is on the fritz.

Jane Fox : 5/8/2007 4:00:26 PM

ER and Ym now making new daily highs. Unbelievable.

Keene Little : 5/8/2007 3:59:36 PM

The two anointees for the DOW today are HPQ and AA. HPQ gapped up and will close near its high. I was looking at this stock for a fellow trader and I've got a couple of different Fib projections for its wave count pointing to the $47 area (which is also near the trend line along the two highs from Feb 2006 and Jan 2007). There's a lower one at 46.24 depending on which wave count I use but either one says HPQ is heading higher. But the daily candlestick today sure looks bearish (hanging man doji) and makes me wonder if today's gap up might have been an exhaustion gap. If it gets closed that could be it for this stock. Link

Jeff Bailey : 5/8/2007 3:57:33 PM

YRCW Options Montage at this Link ... with VIX and VXN.X benchmarks.

Jane Fox : 5/8/2007 3:51:44 PM

TICKS have been quite strong today with a high of +1190. Link

Keene Little : 5/8/2007 3:51:16 PM

Less than 10 minutes now. Are they going to push the DOW into the green to keep the winning streak alive? Sure seems easy enough from here. Go for it Boyz.

Jeff Bailey : 5/8/2007 3:47:55 PM

My thinking, based on what I'm observing is we capture the gain in CAL shares, close the covered call just in case big build in unleaded/jet fuel. Then wait for VLO reaction tomorrow on EIA inventory.

If I stay long CAL and things really go against the trade, then I'd really want to hit myself with an iron skillet.

YRCW in the wings as a post EIA play.

Jeff Bailey : 5/8/2007 3:41:11 PM

Watch-listing shares of YRC Worldwide (YRCW) $39.44 -0.67% Link ... after today's trade at $39.00.

Jeff Bailey : 5/8/2007 3:39:26 PM

Swing trade covered call buy back alert ... for the one (1) Continental Airlines CAL May $40 Call (CAL-EH) at the offer of $0.70.

VIX.X 13.23 +0.60% ...

Jeff Bailey : 5/8/2007 3:37:39 PM

Bullish swing trade long exit alert for the 1/3 (100 shares) of Continental Airlines (CAL) $38.65 +0.12% ... at the bid.

Jeff Bailey : 5/8/2007 3:36:10 PM

"Clang!" ... Iron skillet hitting my head?

Jeff Bailey : 5/8/2007 3:35:10 PM

Valero Energy (VLO) $73.65 +1.61% ...

Jeff Bailey : 5/8/2007 3:31:21 PM

Cisco Systems (CSCO) $28.30 +1.76% ... best levels of session here. Set to test WEEKLY R1 ($29.41)

Earnings after the bell ... Consensus is for EPS of $0.33 on Revenue of $8.76B.

Jeff Bailey : 5/8/2007 3:17:14 PM

03:00 Internals found at this Link

Keene Little : 5/8/2007 3:08:28 PM

The brokers, and MER, still look more bearish than bullish as of this morning's drop and corrective looking bounce. Since the brokers are typically a good leading indicator for the stock market I'll be keeping a very close eye on its pattern. While the major averages might be manipulated higher it will pay to see what smart money is doing with the brokers and financials.

And speaking of financials, Jeff mentioned the BIX hit weekly R1 and they've also made it up to the level where the bounce off the March low has two equal legs up (405.42). Could be a double whammy of resistance for them to make any further progress. Link

Jeff Bailey : 5/8/2007 3:02:27 PM

03:00 Market Watch found at this Link

Jeff Bailey : 5/8/2007 2:29:37 PM

RUT.X 829.49 -0.28% ... after undercutting WEEKLY Pivot.

Jeff Bailey : 5/8/2007 2:28:39 PM

BOOM $35.05 +0.54% ...

Jeff Bailey : 5/8/2007 2:28:16 PM

CAL $38.89 +0.75% ...

Jeff Bailey : 5/8/2007 2:28:01 PM

TOL $29.28 +1.17% ... earnings before tomorrow's opening bell.

Jeff Bailey : 5/8/2007 2:27:23 PM

S&P Banks Index (BIX.X) alert! 405.76 +0.35% ... gets the trade at WEEKLY R1.

Keene Little : 5/8/2007 2:21:55 PM

The bounce off this morning's low has now turned into an impulsive move. That means we should soon see another pullback but that should lead to more new highs. This bull market is pressing onward and upward regardless of any weakening in the internals and bearish divergences. And new highs just might spark a new round of short covering--not today but possibly out of a pullback into FOMC.

Jane Fox : 5/8/2007 2:19:02 PM

It is the VIX that is helping to move this market upwards but it is the AD Volume and AD line that will not allow followthrough. Link

Jeff Bailey : 5/8/2007 2:14:22 PM

SPY at session high ... $150.78 -0.11% ...

Jeff Bailey : 5/8/2007 2:13:33 PM

Morgan Stanley Cyclical Index (CYC.X) alert! 1,047.12 +0.11% ... sticks its head to new 52-weeker.

Yesterday was a 52-weeker. Friday's close was 1,040.59.

Jeff Bailey : 5/8/2007 2:09:12 PM

Valero Energy (VLO) ... 60-minute interval chart with QCharts' WEEKLY Pivot Levels and my MONTHLY Pivot Retracement at this Link

I might also suggest a conventional retracement from that recent 4/18 low (just below WEEKLY S2 of $64.77) and recent high. 61.8% retracement overlaps current WEEKLY S2. If traded, computers should be turned on to rebuild inventory and they'll buy it back to at least MONTHLY Pivot.

Keene Little : 5/8/2007 1:58:12 PM

Thanks to Linda for pointing out the potential cup & handle pattern on the TRAN index (which is having a good day today), as shown on this daily chart: Link

The handle has formed, or is forming, since the April high. Many times the handle will form a bull flag and form a larger handle so that's worth watching for. At any time if the Trannies rally out of this there could be a big upside move.

The bearish thing I see is shown in the oscillators as the TRAN moves back up for a retest of the 5250 area with bearish divergences. That could be alleviated with further consolidation (to form a larger handle). The other thing is that a minor new high could finish the 5th wave of the move up from March and that new high would likely be met with bearish divergences. A drop back below 5000 is needed by the bears.

Jeff Bailey : 5/8/2007 1:48:56 PM

EIA revisions turned thing around ....

Jeff Bailey : 5/8/2007 1:47:41 PM

Valero Energy (VLO) $73.25 +1.06% ... in my opinion, May expiration bears need to see a long liquidator show up here, get price back below WEEKLY Pivot ($72.67) to have a shot at $68.00.

Jane Fox : 5/8/2007 1:41:05 PM

If you are a bear don't read this. Link

Jane Fox : 5/8/2007 1:40:37 PM

NQ is the only market to break its overnight highs - so far. Link

Jeff Bailey : 5/8/2007 1:35:41 PM

Reminder: HET currently in talks to be taken private by Apollo Mgmt & Texas Pacific Group.

HET has met/exceeded its bullish vertical count of $83.00.

Jeff Bailey : 5/8/2007 1:33:09 PM


DJ- Casino operator's earnings edge up 2%, as higher Las Vegas and Atlantic City revenue offset increased operating costs. Firm earns $185.3 million, or 98c a share, as revenue climbs 13% to $2.66 billion. Analysts expected EPS of 99c on revenue of $2.51 billion.

HET $85.30 +0.10% ...

Jeff Bailey : 5/8/2007 1:31:37 PM


DJ- McDonald's same-store sales rise 4.8% for April, helped by strong results in the Asian-Pacific region, France and Russia. In U.S., restaurant chain reports 3.5% increase in April sales, with its new snack wraps helping to boost sales.

MCD $49.66 +0.32% ...

Jeff Bailey : 5/8/2007 1:24:52 PM


DJ- Martin Marietta Materials' 1Q earnings rise to $33 million, or 73c a share, from $31 million a year earlier, while revenue falls to $462.2 million from $482.9 million. Analysts expected EPS of 72c.

MLM $148.24 -1.24% ...

Jeff Bailey : 5/8/2007 1:23:24 PM


DJ- Shares fall 5.8% as Houston energy company posts net income of $14 million, or 3c a share, as revenue falls 4.5% to $573 million. Wall Street expected EPS of 4c. Dynegy cuts 2007 cash-flow view on legal settlement.

DYN $9.75 -5.79% ...

Keene Little : 5/8/2007 1:19:45 PM

NQ 1909 is two equal legs up and it was just tagged so we'll see if the bulls really are going to drive this back up to new highs.

Jeff Bailey : 5/8/2007 1:14:17 PM

01:00 Internals found at this Link

Keene Little : 5/8/2007 1:13:43 PM

One thing I didn't add on that NDX chart is the price projection for two equal legs up off this morning's low--1898.61 so keep an eye on that level if tagged.

Keene Little : 5/8/2007 1:10:22 PM

NDX has run into a new downtrend line from Friday's high, currently near 1895.60. It has just a 3-wave bounce so far so the bulls don't want to see it left that way. A drop back below this morning's first high at 1892.87 would be overlap and then a drop back below the pullback low at 188.75 would leave the bounce confirmed as a 3-wave correction. Let's see what the bulls can do for follow through to this bounce. The short term pattern looks like at least a minor new high could be put in here so watch for a potential over-throw of the downtrend line and then a drop back below (or support at) the trend line. Link

Jeff Bailey : 5/8/2007 1:04:14 PM

01:00 Market Watch found at this Link

Keene Little : 5/8/2007 1:00:38 PM

The bulls need to keep this going now. The DOW and SPX have both reached the level where the 2nd leg of their bounce off this morning's low has achieved 162% of the 1st leg. So far it's just a 3-wave correction to this morning's drop so if they don't keep this going (which could be by doing a small consolidation near the high for this bounce and then another new high), then it could turn into more selling and new lows.

Keene Little : 5/8/2007 12:57:05 PM

The little bear flag for NYSE has been blown out of the water. The dipsters rule.

Jane Fox : 5/8/2007 12:52:37 PM

Everything that I "thought" would happen today has not. Mr. Market has told me it will do what it wants and not what I expect it to do.

Jane Fox : 5/8/2007 12:51:47 PM

Ok the bulls once again have proved they can turn this market around, even before a FED day.

Jane Fox : 5/8/2007 12:50:01 PM

YM tagging its PDLs now Link

Jane Fox : 5/8/2007 12:46:37 PM

That little rally was supported by the VIX making a new daily low but the rally did not have much followthrough because the AD volume and AD line are so bearish. Tough environment to trade. Link

Keene Little : 5/8/2007 12:43:42 PM

While the NYSE is bear flagging NDX has been bull flagging. After the sharp bounce off this morning's low it has been pulling back in a corrective pattern and is starting to break it to the upside. So we've got some mixed signals here which could indicate we're going to be stuck in a choppy pattern today. Link

Jane Fox : 5/8/2007 12:42:18 PM

Here is the SMith Open Number system. Only YM is into a "number" where you could consider long positions. Link

Jane Fox : 5/8/2007 12:37:31 PM

Gold is making a comeback and following Oil but it has not yet been able to break its PDL. Oil is doing nicely isn't it? Link

Keene Little : 5/8/2007 12:31:47 PM

NYSE is bear flagging after the drop this morning. It's either forming an ascending triangle or it could bounce higher to form a parallel channel (if it can push higher right here), the top of which could have price making it to about 9765. In either case it looks like a bearish continuation pattern. Link

Jeff Bailey : 5/8/2007 12:24:44 PM

Continuous WTIC $0.50-box at this Link

Jeff Bailey : 5/8/2007 12:23:25 PM

EIA: Sees 3Q WTI Crude At $67.33/Bbl, Up $1.50 Vs. April Report

Jeff Bailey : 5/8/2007 12:22:27 PM

EIA: OPEC Will Need To Consider Accommodating Oil Demand

Jeff Bailey : 5/8/2007 12:21:53 PM

EIA: Ongoing Nigeria Unrest Will Hinder Return Of Oil Output

Jeff Bailey : 5/8/2007 12:21:15 PM

EIA: Sees Jul-Sep Avg Gasoline Retail +18C To $2.96/Gal

Jeff Bailey : 5/8/2007 12:20:22 PM

EIA: Revised OPEC-10 March Oil Output Down 25,000 B/D to 26.55M B/D

Jane Fox : 5/8/2007 12:19:50 PM

AD volume is very bearish but the VIX is mid range telling me we will not have follow through on any trade. Link

Jeff Bailey : 5/8/2007 12:19:28 PM

EIA: US 2Q Oil Demand Seen at 20.7M B/D +0.9% On Yr

Jeff Bailey : 5/8/2007 12:18:40 PM

EIA: Revises '07 Avg. Gasoline Retail Price +10C To $2.72/Gallon

Jeff Bailey : 5/8/2007 12:17:56 PM

EIA: OPEC-10 April Oil Output 26.55 Million B/D, Flat Vs. March

Jeff Bailey : 5/8/2007 12:17:13 PM

EIA: Revises Summer Gasoline Retail Avg. +14C To $2.95/gallon

Jeff Bailey : 5/8/2007 12:15:00 PM

Countrywide Fincl. (CFC) $40.70 +5.68% ... busts a move.

Jeff Bailey : 5/8/2007 12:09:47 PM


DJ- National Association of Realtors projects existing home sales to fall 2.9% this year to 6.29 million, versus prior call of a 2.2% decline. New home sales are likely to fall 17.8% to 864,000, versus prior forecast of a 14.2% drop.

Jeff Bailey : 5/8/2007 12:06:44 PM


DJ- Top editor Paul E. Steiger knew of the offer at least a week before the news broke elsewhere and decided not to report it, the New York Times reports. Options trading ahead of news raises concerns as SEC and New York begin inquiries.

Jeff Bailey : 5/8/2007 12:05:54 PM


DJ- Activist investor Carl Icahn fails in his bid for a seat on the board of Motorola, according to preliminary results released by the telecom equipment maker last evening.

MOT $17.69 -2.15% ...

Jeff Bailey : 5/8/2007 12:04:32 PM


DJ- A source close to Mittal Steel says it is unlikely that the company is bidding on AK Steel Holding. The source agreed that such a deal would have serious antitrust concerns related to steel produced for the auto industry and possibly other markets.

MT $55.90 -2.74% ...

AKS $35.10 +9.48% ... spiked as high as $37.70 on talk of bid.

Jeff Bailey : 5/8/2007 12:01:59 PM

Senate Commerce, Science and Transportation Committee Approves Fuel Economy Increase to 35 MPG by 2020 ... AP Story Link

Jeff Bailey : 5/8/2007 11:56:41 AM


DJ- Increase in March, following downwardly revised 0.4% increase in February, is short of the 0.4% rise expected by analysts. Sales of U.S. wholesalers jumps 1.8% in March, the largest increase in 18 months.

Jeff Bailey : 5/8/2007 11:46:42 AM

SEC Accuses Hong Kong Couple of Insider Trading of Dow Jones Stock ... AP Story Link

Jeff Bailey : 5/8/2007 11:45:35 AM

Tyco Earnings Press Release at this Link

Consensus was for EPS of $0.47 on Revenue of $10.77B

TYC $32.28 -1.34% ... probes WEEKLY S2.

Keene Little : 5/8/2007 11:37:50 AM

So far the bounce is looking corrective so the expectation is for new lows whether it's from here or after a little more consolidation.

Jeff Bailey : 5/8/2007 11:21:46 AM

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

Keene Little : 5/8/2007 11:18:21 AM

Support is either holding or not yet tested, depending on which index you're looking at. The current bounce could continue but any break to a new daily low could usher in some accelerated selling.

Jeff Bailey : 5/8/2007 11:16:26 AM

11:00 Internals found at this Link

Jeff Bailey : 5/8/2007 11:02:30 AM

11:00 Market Watch found at this Link

Keene Little : 5/8/2007 10:42:02 AM

NDX had dropped down near its 10-dma at 1881.89 and bounced. It's also near its uptrend line, currently at 1882 so there's some good support here. Obviously if both those support levels give way then it will be more bearish.

Jeff Bailey : 5/8/2007 10:40:56 AM

Hewlett Packard Lifts Guidance for Q2 Earnings, Revenue

Company Press Release Link

HPQ $44.55 +1.71% ... new 52-weeker.

Keene Little : 5/8/2007 10:35:00 AM

The DOW has bounced off its uptrend line from April 12th. Next support is 13200 if it breaks back down. Link

Keene Little : 5/8/2007 10:14:05 AM

I showed two charts yesterday for the NYSE and suggested we could be very close to the end of its rally. This daily chart was to show that the wave count from the March low looks like a clean 5-wave move up and could finish at any time: Link The 15-min chart showed the 5th wave (the move up from May 1st) and how it looked like it was completing: Link This morning's update leaves little question that it completed: Link

Now backing out and looking at the rally from March, it's clear that a break below the bottom of its parallel up-channel, just below 9700, would be bearish, confirmed with a break below its last low just under 9600. Link

Jeff Bailey : 5/8/2007 10:04:13 AM

10:00 Market Watch found at this Link

Keene Little : 5/8/2007 9:57:57 AM

The pattern of the rally in the brokers from the March low formed a clear ascending wedge pattern with the bearish divergences to go with it. After doing a throw-over above the top of it price has now dropped back down into the wedge. That's sell signal #1. Sell signal #2 would be a break of its uptrend line near 251.50. And sell signal #3 would be a break below the 4th wave low at 246.87 on May 1st. The thing to remember about these ascending wedges is that they typically get retraced very quickly. Link

Keene Little : 5/8/2007 9:45:25 AM

The brokerage index (XBD) is pulling back to potential support at its uptrend line from June 2006. After breaking below the line in February it finally made it back above it in May. Support by this trend line is currently just under 254. Link

From an EW and Fib perspective the rally in the brokers could be called complete. You can see the 5-wave count on the chart for the move up from March and the Fib projection for the 5th wave where it equaled 62% of the 1st wave at 250.10 (Monday's high was 250.12). If support near 254 gives way then we may have seen the top on this index (which would be a bearish heads up for the broader market).

Keene Little : 5/8/2007 9:24:29 AM

Jane, not only has the volume been falling the last 5 days but you can see that the volume has been falling since the March low. New highs on lower volume is not the stuff of a new bull market leg up. This does fit though with the EW count calling this the final 5th wave up. The trouble for us traders is that we don't know if there will be just enough buying to keep price heading higher. And if the Fed were to say something positive for the market we could see an explosion higher as the shorts run for cover (and give us the capitulation high).

Keene Little : 5/8/2007 9:18:55 AM

Until we see a break of Friday's low (which would be the first lower low in a bazillion years) this morning's pullback will be just another small correction. But keep an eye on the techs and small caps since NQ and ER overnight lows are lower than Friday's low. The real test will be a test of NQ's uptrend line from April 12th, currently near 1891 (NDX 1883 is noted on its 60-min chart in last night's post (see below).

Jane Fox : 5/8/2007 9:12:13 AM

Look at the falling volume on the last five day rally on the SPX. Link

Jane Fox : 5/8/2007 9:02:24 AM

There's not much on Tuesday's economic docket, with March wholesale inventories figures due out shortly after the open. In any case, the Federal Reserve makes its interest rate decision, and more importantly, its policy statement, on Wednesday.

While the Fed is widely expected to hold its target for overnight rates steady at 5.25%, but there is some question as to whether the statement will be changed.

Jane Fox : 5/8/2007 8:54:01 AM

US$ in rally mode usually means Goldbugs are not happy. Link

Jane Fox : 5/8/2007 8:46:30 AM

Equity Markets have all broken their respective PRLs and it does make you wonder how much of a correction we will get. However, I don't think we will get an answer today for we are into a wait for the FED mode and may have used up any tradable moves overnight. Link

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