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Keene Little : 5/25/2007 1:22:00 AM

End of day re-posts:

Friday's pivot tables: Link and Link

It's looking like we should get a bounce started on Friday so look to buy any dips that hold above Thursday's lows. I'm expecting to see a bounce into next week and then a setup to get short.
DOW: Link
SPX: Link
NDX: Link
RUT: Link

Gold fell out of its bear flag pattern from the past week and looks like it should drop at least a little lower. The bullish divergences make me a little concerned about my short positions in gold and silver but I'll let price prove it's more bullish by breaking its downtrend line since I believe the metals have much further to fall. As long as the lower highs continue then I'm staying bearish the metals. Link

It's been a while since I showed CME and there's still not a lot to go on yet. Price continues to flop around somewhat aimlessly. Today's decline took it down to a 62% retracement of its gap up on May 11th. It's anybody's guess which way it goes from here--no recommended trades on this one although I'd be leaning bearish rather than bullish based on MACD staying below zero after a failure (again) at its 50-dma. Link

GOOG also is flopping around. But like CME I'd be leaning bearish on this one unless it can break its downtrend line where price failed yesterday so it makes for a tight stop if you want to short it here. In fact it has the potential here to sell off very quickly in a 3rd of a 3rd wave down so the risk:reward is actually quite favorable for a short play. OK, I talked myself into it. Link

Looking a little closer at GOOG makes me think a short on it is a good play with a tight stop at yesterday's high near 483. Buy a couple of September puts slightly OTM and see what develops. I think tomorrow it could bounce up to about 477 (two equal legs up in its bounce) and then drop from there. You'd be risking about 6 points to make perhaps 60. I'll take a 10:1 every day of the week. Link

OI Technical Staff : 5/24/2007 9:59:59 PM

The Market Monitor has been archived.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

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

Jeff Bailey : 5/24/2007 6:36:32 PM

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

Jeff Bailey : 5/24/2007 6:28:34 PM

Updated MM OPEN Positions with STOPS and TARGETS at this Link

I will be out of the office tomorrow, but will return Tuesday morning.

"Stop Out" is up to date at tonight's close. All but the OLN-FD are quoted at the bid. OLN-FD are quoted at offer as this is a covered call. I would NOT want to be NAKED OLN-FD.

Keene Little : 5/24/2007 6:18:50 PM

Friday's pivot tables: Link and Link

Jeff Bailey : 5/24/2007 5:52:31 PM

Prediction! ... In the future, a major U.S. refiner's CEO will be charged for "price gouging."

Grand Jury defense will be ... "Listen you clowns. You haven't let us/anyone build a refinery in 20+ years. EPA standards are tightening, and you think we can turn switch over and perform maintenance of a facility in 3 months?"

Jeff Bailey : 5/24/2007 5:44:16 PM

Oil Futures: Nymex Crude Slumps As Refinery Problems Grow (updated to 10:43:49 AM)

DJ- New York crude oil futures slumped to a one-week low Thursday as more refinery problems indicated there will be less demand for crude from a key U.S. delivery point. Gasoline futures rallied on the problems.

Valero Energy Corp. (VLO) shut a gasoline production unit at its McKee refinery in Sunray, Texas, meaning gasoline production will fall by 30,000 barrels a day for two weeks. Crude oil throughput will fall 20,000 barrels a day, Valero said.

Crude oil stockpiles in Cushing, Oklahoma, the delivery point for Nymex crude futures, rose by 900,000 barrels to 27.4 million barrels last week, the U.S. Energy Department said Wednesday. That's the third highest level ever and not far from the record 28 million barrels logged in the week ended April 13.

The front-month July light, sweet crude contract on the New York Mercantile Exchange ended down $1.53, or 2.3%, at $64.24 a barrel. Brent crude on the ICE futures exchange rose 19 cents to $70.79 a barrel, a fresh nine-month high, on concerns about supply from Iran and Nigeria. Final settlement prices weren't in yet.

"All these refinery problems just keep occurring," said Tony Rosado of IAG Energy Brokers in Fort Lauderdale, Fla. "Crude is really going to take it on the chin" with stockpiles high and refiners able to process less.

Prices slid through the session as pre-set sell orders were hit, he said.

Valero's McKee is close to the Cushing delivery point, exacerbating the local effect on Nymex crude, Rosado said.

Front-month June reformulated gasoline blendstock, or RBOB, was up 4.55 cents, or 2%, at $2.3559 a gallon, after trading as high as $2.368. June heating oil fell 25 points, or 0.1%, to $1.9298 a gallon.

Gasoline prices have surged more than 70% from their 2007 low hit in mid-January, as a series of refinery glitches, including a February fire at Valero's McKee, helped depress stockpiles going into the summer driving season, which is seen as starting this weekend.

The difference between Nymex and Brent crude widened to more than $6 a barrel, with Brent buoyed by global supply concerns. The disconnect is causing some to question the Nymex contract's relevance as a global benchmark. Supply worries in Nigeria were underscored Thursday when powerful oil-worker unions began a strike at Nigeria's state-owned oil company in hopes of reversing the sale of government refineries. The strike comes with Nigeria's oil exports of 3 million barrels a day already cut by a quarter by attacks by armed militants in the southern oil region.

The head of the U.N. nuclear watchdog, the International Atomic Energy Agency, said Thursday Iran is between three and eight years from the ability to make nuclear arms and urged the U.S. and other Security Council members to abandon "rhetoric." Traders are worried Iran, the second biggest oil exporter in the Persian Gulf, could block shipments out of the region if tensions escalate.

Jeff Bailey : 5/24/2007 5:33:52 PM

Closing Internals found at this Link

Jeff Bailey : 5/24/2007 5:23:58 PM

44 NL on the big board. That 3 more than 5/01/07 and 1 more than 5/17/07.

Jeff Bailey : 5/24/2007 5:19:52 PM

Weakest a/d lines at NYSE and NASDAQ since 3/13/07.

Jeff Bailey : 5/24/2007 5:10:22 PM

Whatever NTAP said, 4-lettered stock symbols didn't like it today. Will have to read up on things later this evening.

TRINQ 2.02

TRIN 1.02

Keene Little : 5/24/2007 5:09:00 PM

Looking a little closer at GOOG makes me think a short on it is a good play with a tight stop at yesterday's high near 483. Buy a couple of September puts slightly OTM and see what develops. I think tomorrow it could bounce up to about 477 (two equal legs up in its bounce) and then drop from there. You'd be risking about 6 points to make perhaps 60. I'll take a 10:1 every day of the week. Link

Jeff Bailey : 5/24/2007 5:05:43 PM

Jane (02:08:37) ... I just use the PREMIUM. Gives pretty much the same information, but with just two eyes, I can set my al_rts on $PREM.X or $EPREM.X on days I feel some pressure building.

Not sure if changing from "bar chart" to "line chart" is what subscriber might be looking for on NYSE Ticks?

Keene Little : 5/24/2007 4:49:21 PM

GOOG also is flopping around. But like CME I'd be leaning bearish on this one unless it can break its downtrend line where price failed yesterday so it makes for a tight stop if you want to short it here. In fact it has the potential here to sell off very quickly in a 3rd of a 3rd wave down so the risk:reward is actually quite favorable for a short play. OK, I talked myself into it. Link

Jeff Bailey : 5/24/2007 4:45:49 PM

MercadoLibre Tie To eBay Could Turn To Rivalry

DJ- eBay owned a 19.5% stake in online trading company, MercadoLibre as of March 31, but the San Jose-based Internet auction service will need to decide whether it wants to compete in Latin America with MercadoLibre, which is planning an IPO.

Jeff Bailey : 5/24/2007 4:42:58 PM

DELL TO SELL DESKTOP PCS AT WAL-MART

DJ- Breaking a purely direct-sales model it has used for more than a decade, Dell will begin to sell desktops in Wal-Mart stores next month. Move comes as PC maker tries to overcome recent stumbles.

Keene Little : 5/24/2007 4:39:31 PM

It's been a while since I showed CME and there's still not a lot to go on yet. Price continues to flop around somewhat aimlessly. Today's decline took it down to a 62% retracement of its gap up on May 11th. It's anybody's guess which way it goes from here--no recommended trades on this one although I'd be leaning bearish rather than bullish based on MACD staying below zero after a failure (again) at its 50-dma. Link

Jeff Bailey : 5/24/2007 4:37:36 PM

July Crude Oil (cl07n) settled down $1.59, or -2.42% at $64.18.

July Unleaded (rb07n) settled up $0.0395, or +1.77% at $2.2669.

Jeff Bailey : 5/24/2007 4:29:39 PM

Closing U.S. Market Watch at this Link

Keene Little : 5/24/2007 4:29:29 PM

Gold fell out of its bear flag pattern from the past week and looks like it should drop at least a little lower. The bullish divergences make me a little concerned about my short positions in gold and silver but I'll let price prove it's more bullish by breaking its downtrend line since I believe the metals have much further to fall. As long as the lower highs continue then I'm staying bearish the metals. Link

Keene Little : 5/24/2007 4:20:02 PM

The RUT looks the same as the NDX--I think the 1st wave down is complete and now we'll get a larger bounce to correct it. Remember, 2nd wave corrections are called sucker waves because it suckers traders into buying them thinking the pullback correction (the 1st wave down) has finished. The 2nd wave bounces are usually very bullish looking and once a bunch of new buyers are on board the bottom falls out. That's what creates strong 3rd wave declines as the longs scream for cover. Whether the RUT bounces all the way back up to 836.52 (62% retracement) I don't know but it would be typical. Getting long tomorrow for the ride is the recommendation here and then get ready for a great short setup next week. Link

Jeff Bailey : 5/24/2007 4:11:51 PM

YM short exit alert here 13,469

Keene Little : 5/24/2007 4:10:42 PM

Without trying to count all the little squiggles in NDX's decline, it looks good for the end of the 1st wave down at today's low. It even left a bullish dragonfly doji on its 60-min chart: Link If the dipsters return we could get a big bounce into next week (end of month run) that will then set up a strong decline to follow. But if you're short this is the risk you face.

Jane Fox : 5/24/2007 4:10:15 PM

Economic Reports for tomorrow:

10:00a.m. April Existing Home Sales. Expected: Unch. Previous: -8.4%.

3:00p.m. Bond markets close early ahead of Memorial Day holiday.

Keene Little : 5/24/2007 4:00:18 PM

The DOW's pattern is not as clear in its decline so I'm not sure we'll get much of a bounce before heading lower again. But another low tomorrow could set up a larger bounce into next week. Link

Jane Fox : 5/24/2007 4:00:15 PM

Looks like the markets "Dancing with the stars" yesterday really bombed today.

Jane Fox : 5/24/2007 3:57:49 PM

And the TRIN only hit 1.02 today! Link

Keene Little : 5/24/2007 3:47:55 PM

I'm not sure what would prompt it but I'm thinking we're going to get a rally out of the gates tomorrow morning. We're due a correction of this decline which will hopefully be something more than this morning's quick spike up which didn't allow new entries at the top of the correction (unless you were especially fast and nabbed it). The only question for me is whether we're still due a relatively flat 4th wave correction as depicted here (or a slightly stronger 2nd wave correction): Link

The fractal pattern that I showed earlier, calling for the possibility that this leg down could be the completion of a larger correction from Monday's high, has been negated. I do believe we have a bonafide start to the next bear market decline. Therefore the bounce that corrects this decline will be an outstanding shorting opportunity for what should be a very strong decline to follow.

Jeff Bailey : 5/24/2007 3:37:45 PM

Short 13,460. Stop 13,475. Target 13,425

Jeff Bailey : 5/24/2007 3:37:01 PM

YM short alert here at 13,460. Stop 78, target $13.425

Jeff Bailey : 5/24/2007 3:34:37 PM

I didn't thing shorts would be this complacent today.

Jeff Bailey : 5/24/2007 3:33:49 PM

I agree Jane ...

Keene Little : 5/24/2007 3:30:11 PM

The bullish divergences at these minor new lows continues. I get the feeling it's going to come blasting out of here and rally into the close but so far nothing. It's OK--just keep lowering your stop to just above today's downtrend line and reverse long if hit.

Jane Fox : 5/24/2007 3:29:36 PM

I couldn't get this posted quick enough but consolidating at daily lows and AD volume to new daily lows and VIx to new daily highs is almost a guarantee new daily lows in the markets. Link

Jeff Bailey : 5/24/2007 3:28:26 PM

YM Long stopped alert 13,465

Jeff Bailey : 5/24/2007 3:26:49 PM

YM long lower target alert ... to 13,500

YM 13,475 and getting a little late in the battle.

Jeff Bailey : 5/24/2007 3:20:23 PM

03:00 Internals found at this Link

Keene Little : 5/24/2007 3:12:43 PM

SPX doesn't have quite the same look but this 15-min chart of the DOW is what gives me the impression we've got a rally coming out of this descending wedge. A break above 13480 would be bullish. A break down through the bottom would be bearish. Starting to head lower again as I type. The sellers are not letting up. Link

Jeff Bailey : 5/24/2007 3:11:55 PM

Better get snapped up here 13,474

Jeff Bailey : 5/24/2007 3:09:09 PM

Ym Long entry alert 13,479 ... stop 13,465. same target as before.

Jeff Bailey : 5/24/2007 3:08:01 PM

Sell Program Premium ... YM 13,470

Jeff Bailey : 5/24/2007 3:03:56 PM

03:00 Market Watch found at this Link

Jeff Bailey : 5/24/2007 3:01:55 PM

TRIN 1.00 ... just made high of day. It's been "strong" and thought it would reverse.

YM low has been 13,467

Keene Little : 5/24/2007 3:00:04 PM

The bearish interpretation here says each bounce high cannot be violated so use them to pull your stops down now (and think about reversing long if hit). We could be in for a wicked sell off in the last hour if the bearish pattern is true. Otherwise this spike down right here could be the last one.

Jeff Bailey : 5/24/2007 3:00:00 PM

That bullish divergence was the kiss of death!

Jeff Bailey : 5/24/2007 2:59:17 PM

YM long stop alert 13,468

Jeff Bailey : 5/24/2007 2:57:53 PM

Sell Program Premium ... YM 13,476 ...

Jane Fox : 5/24/2007 2:56:08 PM

I imagine though at some point the sellng just gets so overdone the internals cannot keep up and start lying. All I know is if the AD volume is making new daily lows and the VIX hovers around new daily highs the odds are the bears still have control.

Jane Fox : 5/24/2007 2:52:43 PM

I think the bears have just about had it for today but these are telling me it is not over yet. Link

Keene Little : 5/24/2007 2:51:13 PM

Starting to see some bullish divergences on the short term charts. If short don't be bashful about taking some profits off the table. The price pattern in the past 2 hours is either setting up for a spill lower or we've got little descending wedges indicating an end to this run down and get ready for a bounce. Pull your stops down closer at least.

Jeff Bailey : 5/24/2007 2:49:34 PM

YM long alert here at 13,493. Stop goes 13,468. Target 13,549.

Jane Fox : 5/24/2007 2:46:38 PM

Wilshire 5000. Link

Jeff Bailey : 5/24/2007 2:45:53 PM

IWM $81.85 -1.38% ... matched its 12:40 PM Lows ...

Jane Fox : 5/24/2007 2:45:41 PM

However, the DAX is not. Link

Keene Little : 5/24/2007 2:44:49 PM

SPX is nearing potential support at 1507 which is a 62% retracement of its rally from May 11th and its 20-dma. The DOW is now approaching its 10-dma at 13445. You know the dipsters are not done with this market.

Jane Fox : 5/24/2007 2:44:33 PM

The NAZ is getting hit badly today. Link

Jeff Bailey : 5/24/2007 2:44:53 PM

Sell Program Premium ... YM 13,482 ... DAILY S2 about to be tested 13,473.

Jane Fox : 5/24/2007 2:43:41 PM

DOW Link

Jane Fox : 5/24/2007 2:42:33 PM

SPX Link

Jane Fox : 5/24/2007 2:42:00 PM

Let's look at some daily charts. Here is the Russell Cash Link

Jane Fox : 5/24/2007 2:40:33 PM

WE all knew the piper had to be paid at some point. Link

Jeff Bailey : 5/24/2007 2:39:26 PM

DDX.X makes new session low.

Jane Fox : 5/24/2007 2:38:46 PM

And another TICK -1207

Keene Little : 5/24/2007 2:38:34 PM

It's time for a big caution for the bears. I like to find fractal patterns in the market because they often show what the next move is going to be. So, this 60-min SPX chart shows one of those fractals: Link

The brief consolidation during May 4-8 was followed by a minor high and then a sharp decline. The market then rallied from there (it was what's called an expanded flat a-b-c correction with the spike down being the c-wave to complete it. Now look at the price pattern since Monday, May 21. See some similarities? And SPX is at support by the trend line along the lows since May 1st (starting to break as I type). If this is a true fractal pattern then get ready for another rally to a new high. A break of that trend line and a drop below 1500 is needed to negate this possibility.

Jeff Bailey : 5/24/2007 2:38:10 PM

Sell Program Premium ... ym 13,489

Jeff Bailey : 5/24/2007 2:28:48 PM

Sell Program Premium YM 13,503

Jeff Bailey : 5/24/2007 2:28:26 PM

China Finance Official: Dialogue Resolves Trade Disputes

Jeff Bailey : 5/24/2007 2:27:47 PM

DJ- Brazil Stocks Accelerate Losses As Profit-Taking Deepens

Keene Little : 5/24/2007 2:26:46 PM

By the way, for those who have moved money into international funds, say in your 401(k) accounts, as a method of diversifying, you're not. Equity accounts, no matter which country you're in, will get hit equally hard. Actually that's not quite true--the emerging markets will get hit harder as those markets have been the beneficiaries of especially strong speculative fund flows.

Keene Little : 5/24/2007 2:21:24 PM

Compare the weekly chart of SPX, Link to the China weekly chart I showed a little earlier ( Link ) and you can see the same 5-wave move up from October 2005. I had shown this chart last week and pointed out the Fib projections at 1522.56 and 1542.53 as good upside targets for the rally. Since the market couldn't decide which one to use it split the difference right down the middle and topped out at 1532.43.

I've been mentioning that the credit-created equity bubble around the world will result in a sell off in all asset classes and in all world stock markets. It will be the first time the world will be so much in synch. The benefits of a global economy will work both ways.

Jeff Bailey : 5/24/2007 2:19:26 PM

A/D terrible ... 659:2588

753:2254

Jeff Bailey : 5/24/2007 2:18:33 PM

Thanks Jane! (02:01:57) ...

Jeff Bailey : 5/24/2007 2:17:08 PM

Did witness another sell program Premium a couple of minutes ago. QCharts went down for a second then.

Keene Little : 5/24/2007 2:13:07 PM

Jane, yes, you can select Tick for the interval on the charts. However you can't select the number of ticks per price print. Here's the SPX tick chart (notice there are no studies under the chart). Link

Keene Little : 5/24/2007 2:09:51 PM

Neither YM nor ES made it up to their Fib targets and are pulling back again. I'm getting that sideways feeling here. If it continues to chop up and down in a sideways consolidation then it'll set up a good short play a little later.

Jane Fox : 5/24/2007 2:08:37 PM

Jeff and Keene, I have a user asking if you can get tick charts with Qcharts. I do not mean the NYSE TICKs but the charts that count the ticks for each bar on a price chart.

Jeff Bailey : 5/24/2007 2:04:39 PM

Sell Program Premium ... YM 13,519 ...

Jane Fox : 5/24/2007 2:03:54 PM

Vix is no longer making new daily highs when the AD volume makes new daily lows so we are in for a consolidation. Link

Jane Fox : 5/24/2007 2:02:35 PM

TICKS all over the map today. Link

Jane Fox : 5/24/2007 2:01:57 PM

Jeff, at 13:55 the TICKS made a low of -1084 but they have done that multiple times today.

Jeff Bailey : 5/24/2007 2:00:08 PM

"Privates" ... RUT.X 827.55 -1.07% ...

Jeff Bailey : 5/24/2007 1:59:39 PM

YM 13,534

Keene Little : 5/24/2007 1:59:32 PM

If this bounce can get a little higher now then watch YM 13550-13553 and ES 1519.50-1520.00 for a top to the bounce (Fibs and top of their bear flags) to try shorting it again. Use standard 20/2-point stops ($100 per contract).

Jane Fox : 5/24/2007 1:58:31 PM

I have been getting questions about the jtHMA so rather than answering them individually I will do it here. The jtHMA is an indicator I found on the Tradestation web site about 3 years ago. I really like the indicator because it is very visual but like any one indicator you have to know when to use it and when not. I happened to put it on an SPX monthly chart and was totally shocked at what I found Link

Just following this one indicator would have gotten you into the SPX in February 1995, out in October 2000 and back in May 2003. The only problem is that you would have to hold on to a position until the monthly turned red and back in 2000 that would have been not until the close of October and you would have been feeling a lot of pain in the meantime. So I though how about if I get out when the weekly turns red and then back in again when it turns green as along as the monthly stayed green, which got me back into the SPX the week of April 6th. Link .

But that is still a long term strategy and not one that is conducive to the MM so I expanded it to include the monthly/weekly/daily/120minute/60minute charts. If the monthly is green I will use the daily/120/60 to time a "buy the dip." When the d/120/60 turn red I will buy once the 60 turns back green, just as simple as that. Of course the opposite for shorts like I talked about on the EMJ charts.

Jeff Bailey : 5/24/2007 1:58:15 PM

Did they go -1000?

Jeff Bailey : 5/24/2007 1:56:11 PM

I count about 12 sell program premiums so far today.

SPX -0.59% ... ????

Jane Fox : 5/24/2007 1:54:27 PM

Jeff, yes they did. Link

Jeff Bailey : 5/24/2007 1:53:20 PM

Jane! Did tick go -800?

Jeff Bailey : 5/24/2007 1:52:19 PM

Sell Program Premium ... ym 13,516

Keene Little : 5/24/2007 1:46:37 PM

If the DOW, being the stronger index today, gets down to 13445 which is its 10-dma, watch for potential support there. It's bouncing back up here so it's looking like we're going to see a slightly larger choppy bounce off the low. It continues to look corrective so I think it's too early to be thinking even a scalp long but be careful of some whipsaws.

Jane Fox : 5/24/2007 1:40:09 PM

I see another dip coming. Link

Jeff Bailey : 5/24/2007 1:36:11 PM

Dow 30 components at this Link

Keene Little : 5/24/2007 1:34:49 PM

The bounce stopped at those levels I just gave for YM and ES so now we'll either turn down to a new low or go sideways for a longer period of time. If you shorted this bounce then pull your stop down to just above the bounce and keep your risk small. If we do get a new low I'll be watching for bullish divergences to set up a long play into tomorrow.

Jeff Bailey : 5/24/2007 1:31:34 PM

01:10 Internals found at this Link

Jeff Bailey : 5/24/2007 1:26:30 PM

I've got four (4) equity sectors in the green.

Keene Little : 5/24/2007 1:24:28 PM

The bounce here should be nearing completion by two equal legs up (YM 13536 and ES 1518).

Jeff Bailey : 5/24/2007 1:22:58 PM

It has been "ugly" early though....

Jeff Bailey : 5/24/2007 1:21:59 PM

Modest signs that bulls are getting some tractions on the shores of Normandy.

YM 13,526

Keene Little : 5/24/2007 1:18:56 PM

And from the October 2005 low for HCX.X (same as our markets), you can see a very nice 5-wave move up from there. So you can see how this week's high has completed 5 waves on all degrees and why this top is so important. I'm calling it--the bull market finished this week, 4 years and 2 months from March 2003. Link

Keene Little : 5/24/2007 1:13:23 PM

Here's the 30-min chart of that China index, HXC.X: Link And its daily chart shows another picture-perfect 5-wave move up from March: Link

This rally is toast and the global markets are in synch. Get ready to rock and roll to the downside.

Jeff Bailey : 5/24/2007 1:12:32 PM

01:10 Market Watch found at this Link

Jeff Bailey : 5/24/2007 1:07:20 PM

US Oil Fund (USO) $49.22 -1.85% ... 50-cent box chart to match futures at this Link

Bearish vertical count at $46.50 ... REMEMBER THAT in days, weeks ahead.

PTR $126.60 -2.26% ... will be "weak" with broader-China is my current though process. We've done our work on support/resistance with PnF and bar chart.

Will want to tie USO and PTR to find "safest" bull entry.

Keene Little : 5/24/2007 1:04:16 PM

I haven't checked it out yet but a China index that reader Marie watches on QCharts is HXC.X. For information on this index go to this link: Link

Thanks Marie.

Keene Little : 5/24/2007 12:55:23 PM

The important trend line for the RUT now is the one from March (the one that SPX broke today), currently near 820. Until the RUT convincingly breaks that support line it could chop its way higher as per the green bullish wave count on the daily chart that points to the 850 area in June. I don't think that's what will happen but we need to let price lead the way here. That uptrend line should certainly be good support for at least a multi-day bounce. Link

Jeff Bailey : 5/24/2007 12:56:29 PM

I'm at my "max" and 10 open positions right now.

Jeff Bailey : 5/24/2007 12:56:25 PM

iShares Home Page Link

Should be in a trader's "favorites"

Jeff Bailey : 5/24/2007 12:49:37 PM

Thanks Jane! You and Keene find a short in China? I thought I'd try Japan so we don't overlap.

Jeff Bailey : 5/24/2007 12:45:03 PM

Aluminum Corp. China (ACH) Pnf chart via Dorsey/Wright at this Link

BIG dividend payer here, so Stockcharts.com's chart not entirely accurate. Link

I've "doctored" it up a bid with "resistance broken, support."

Keene Little : 5/24/2007 12:38:29 PM

A 62% retracement of the rally from May 16th for the RUT is at 824.11, being tagged now.

Keene Little : 5/24/2007 12:37:20 PM

The RUT has an uptrend line that is only based on the two lows close to each other on May 16 and 17 so it may not be important but it's currently at 823.30. Watch for potential support there for another bounce.

Jane Fox : 5/24/2007 12:36:44 PM

Jeff, here is EWJ on my jtHMA system. Monthly/weekly charts are red so looking for sells. I like to time a "sell the rally" when the daily/120/60 charts turn green then the 60 turns back to red. Here I see the daily is still red so it probably never did turn green but the 60 has just turned back red so great time for an entry. Link

Jeff Bailey : 5/24/2007 12:31:17 PM

Disclosure: I currently hold a bearish position in the EWJ.

Jeff Bailey : 5/24/2007 12:30:37 PM

Swing trade short alert ... for just more than 1/2 position (400 shares) in the ishares Japan (EWJ) at the bid of $14.34 -0.48%. Stop goes $14.80. Target $13.50.

Jane Fox : 5/24/2007 12:29:03 PM

ER makes a new daily high but large cap indexes make a higher low. Well it looks like a higher low for that will not be confirmed until the last swing high is breached.

Jane Fox : 5/24/2007 12:26:49 PM

If you use the jtHMA to trade you have to know when to use it and when not to. If the internals are telling you we have clear direction you can use it to time your entries and exits but if the internals are all over the map then you cannot use the jtHMA.

Jane Fox : 5/24/2007 12:22:51 PM

jtHMA would have gotten you in at 829.70 on this last "sell the rally." Link

Jane Fox : 5/24/2007 12:21:34 PM

ER is heading her down to test daily lows.

Jeff Bailey : 5/24/2007 12:20:43 PM

Homebuilders and retailers only equity-based indexes I show green.

Keene Little : 5/24/2007 12:16:42 PM

The 10-year yield (TNX) looks ready for a pullback which would mean buying in the treasuries (which could mean money will rotate out of stocks). The bounce off the May low, at today's 49.02, came very close to the Fib projection at 49.10 which is two equal legs up from the March low. The internal pattern looks good (maybe one more minor new high) for a reversal and correction of the leg up from the May low. It should only be a correction as I think rates have higher to go but it appears to be setting up a trading opportunity in bonds on the long side. Link

Jane Fox : 5/24/2007 12:16:30 PM

Here is the Smith Open system charts. Link

Jeff Bailey : 5/24/2007 12:15:29 PM

I've got to think "long's liquidated" or took some profits at 844.07. Now what are bears going to do?

Jeff Bailey : 5/24/2007 12:14:23 PM

RUT.X 828.03 -1.00% ... now at 50% retracement of my bullish vertical count retracement.

Jane Fox : 5/24/2007 12:11:00 PM

Does the TRIN worry you bears? It should. Link

Jeff Bailey : 5/24/2007 12:09:34 PM

China Petroleum (SNP) $101.49 -1.09% ...

Jeff Bailey : 5/24/2007 12:08:11 PM

HSI's % Winners from last Friday's screen capture on "China Revelation" Link Losers from Friday Link

And most actives Link

Keene Little : 5/24/2007 12:03:55 PM

It's possible that the 3rd wave down has already completed and we're into the 4th wave consolidation now. If true then a new low this afternoon could lead to a bounce tomorrow and maybe Tuesday but that would set up more selling into month end. The RUT'S pattern is more supportive of this view. If we chop sideways a little longer then I'd say we're into the 4th wave and that would mean a new low will set up a decent scalp long play.

Keene Little : 5/24/2007 12:00:55 PM

If the current bounce turns back down then that could complete the 3rd wave down from yesterday's high. That would set up a consolidation near the lows before turning lower again perhaps into Friday which would then set up a bounce early next week (end of month run?). This is how I'm hoping to see it play out on SPX: Link

Jeff Bailey : 5/24/2007 12:02:11 PM

HSBC Holdings (HBC) 92.90 +0.19% ... (see $HSI components) Link

Jeff Bailey : 5/24/2007 11:59:40 AM

US Oil Fund (USO) $49.55 -1.23% ...

Jeff Bailey : 5/24/2007 11:58:50 AM

PetroChina (PTR) $127.33 -1.73% ...

Jeff Bailey : 5/24/2007 11:57:56 AM

21-day SMA right here too at $31.78.

Jeff Bailey : 5/24/2007 11:56:22 AM

ACH's 19.1% retracement of 10/03/06 low close to recent all-time high close right here at $31.37.

Jane Fox : 5/24/2007 11:55:59 AM

Thank you Mike. Know do you know how to trade this index? Are there futures, options, ETFs? Link

Jeff Bailey : 5/24/2007 11:55:03 AM

Aluminum Corp. China (ACH) $31.64 -6.82% ... sharp drop. "O" gets the square at $32.00 just seconds ago.

Jane Fox : 5/24/2007 11:53:10 AM

Paul, I just sent the jtHMA formulas to you let me know if you get them

Jane Fox : 5/24/2007 11:46:55 AM

The greenback is not going down without a fight. Link

Jane Fox : 5/24/2007 11:45:58 AM

The $ was telling me Gold's resistance would hold. Now the $64,000 question is will support hold? Link

Jane Fox : 5/24/2007 11:43:30 AM

Paul, I did send you the jtHMA formula but will do it again. TKS for letting me know you didn't get it.

Jeff Bailey : 5/24/2007 11:42:57 AM

Getting several "downside al_rts" I've had set on some various STEEl stocks.

Jane Fox : 5/24/2007 11:42:43 AM

Gold is not looking good here. Link

Jeff Bailey : 5/24/2007 11:42:23 AM

Swing trade long raise stop alert ... for the 1/3 bullish position in shares of Dynamic Materials (BOOM) $34.50 -1.96% ... to $33.80.

Jane Fox : 5/24/2007 11:40:53 AM

EWH has options.

Jane Fox : 5/24/2007 11:39:54 AM

And the Hong Kong iSHare, EWH Link

Jane Fox : 5/24/2007 11:38:52 AM

Here is the Singapore iShare, EWS. Link

Jeff Bailey : 5/24/2007 11:37:48 AM

Swing trade put establish stop alert ... for the Aluminum Corp. China ACH Nov $30 Puts (ACH-WF) at $36.00.

ACH $32.50 -4.28% ...

Jane Fox : 5/24/2007 11:36:57 AM

Here is the AMEX China Index. Link

Jane Fox : 5/24/2007 11:34:58 AM

MUMBAI (MarketWatch) -- Chinese shares posted losses Thursday, after government officials warned once again about the risks of investing in the country's booming stock market.

Adding to the mix, on Wednesday former Federal Reserve Chairman Alan Greenspan warned that there's going to be a "dramatic contraction" in Chinese equities and that the current surge on the Chinese stock market is unsustainable.

The Shanghai Composite Index, which tracks all listed shares (A shares and B shares) on the Shanghai Stock Exchange, opened higher but closed down 0.5% at 4,151.13 points. The index has gained 55% on the year.

The Shanghai A-share Index ended down 0.5% at 4,354.44 points. It's up 55% on the year. China's A-share market is open mostly to Chinese nationals.

The Shanghai B-share Index, which tracks foreign-currency denominated stocks, tumbled 8% to 297.56 points on Thursday. The index is up a whopping 129% on the year.

Jane Fox : 5/24/2007 11:31:07 AM

jtHMA makes life easy.

Jane Fox : 5/24/2007 11:30:34 AM

Here is the jtHMA on a 233 tick chart Link

Jeff Bailey : 5/24/2007 11:29:32 AM

BARCLAYS 1Q PRETAX PROFIT UP 15% AS BARCAP SURGES

DJ- Barclays says that profit before tax is up 15% led by the best quarter ever for its investment banking business. Investment banking growth benefited from contributions across asset classes and regions.

BCS $56.58 -0.71% ...

Jane Fox : 5/24/2007 11:29:28 AM

Y'all selling the rallies. Here is where I use the jtHMA on a 233 tick chart and sell when it turns red and bail when it turns green.

Jeff Bailey : 5/24/2007 11:26:44 AM

Goldman Sachs (GS) $228.21 -0.14% ...

Jeff Bailey : 5/24/2007 11:26:24 AM

GOLDMAN CUTS EPS VIEW ON BEAR STEARNS

DJ- Goldman Sachs lowers earnings estimate for Bear Stearns' fiscal 2Q by about 22% to $3.20 per share to reflect 'a very challenging mortgage trading and origination environment.'

BSC $150.35 -1.34% ...

Jeff Bailey : 5/24/2007 11:25:14 AM

BUSINESS BAROMETER DOWN 0.2% MAY 12 WEEK

DJ- Dow Jones-Bank of Tokyo-Mitsubishi-UFJ business barometer slips 0.2% in week ended May 12 after a 0.2% increase in prior week. Truck production grows 1.2%, the largest increase, as box office receipts fall 18.4%, the biggest decline.

Jeff Bailey : 5/24/2007 11:24:05 AM

GM DELPHI COST IS $7B, MAY REPORT $1B CHARGE

DJ- Auto maker narrows expected financial exposure related to Delphi's bankruptcy to $7 billion and says it could take a resulting $1 billion charge in 2Q. It also gets another SEC inquiry tied to past accounting.

GM $31.18 -0.79% ...

Jeff Bailey : 5/24/2007 11:22:34 AM

DJ- Bush: Watching China Yuan Reform 'Very Carefully'

Jeff Bailey : 5/24/2007 11:20:51 AM

EIA Weekly Nat Gas Storage Table at this Link ... build of 104 Bcf

Jeff Bailey : 5/24/2007 11:19:53 AM

11:00 Internals found at this Link

Keene Little : 5/24/2007 11:19:07 AM

SPX dropped below its uptrend line from March (ruh roh), bounced back up to it and now dropping back down. We've got our sell signal. That trend line, currently just above 1521, must remain as resistance for the bears to stay in control now.

Jane Fox : 5/24/2007 11:18:34 AM

AD volume making new daily lows and you know what that means "Don't even think long."

Jeff Bailey : 5/24/2007 11:02:31 AM

11:00 Market Watch found at this Link

Keene Little : 5/24/2007 10:59:50 AM

New lows is bearish, pure and simple. That spike up was all of the 2nd wave bounce which was much faster than normal and could be an even more bearish indication.

Jeff Bailey : 5/24/2007 10:59:46 AM

Dollar Gains Modestly On US New-Home Sales

DJ- The dollar climbed across the board Thursday after data showed new-home sales in the U.S. soared in April, bringing hope to the long-depressed housing sector.

Sales of single-family homes increased for the first time in four months, rising 16.2% after a 1.4% decline in March, the Commerce Department said.

In response, the euro fell to an intra-day low of $1.3417, just off its six-week low of $1.3416 that it reached Wednesday. The data also helped the dollar shed its overnight losses against the yen, with the greenback now little changed from day-earlier numbers against Japan's currency.

The positive housing reading is the latest of several upbeat U.S. economic reports in recent weeks that have pared back market expectations of Federal Reserve rate cuts this year. That has helped the dollar recover against the euro, which hit a new all-time high of $1.3682 in late April.

Recently, the euro was trading at $1.3426 from $1.3458 late Wednesday, while the dollar was at Y121.66 from Y121.70, according to EBS. The euro was at Y163.29 compared with Y163.76 late Wednesday. The dollar was at CHF1.2312 compared with CHF1.2275, while the U.K. pound traded at $1.9850 from $1.9860 late Wednesday.

Jane Fox : 5/24/2007 10:58:40 AM

This are talking to you, loud and clear. Link

Jane Fox : 5/24/2007 10:57:48 AM

YM is the only market to not break its PDL.

Jeff Bailey : 5/24/2007 10:57:35 AM

Table of Data On New Home Sales (Feb, Mar, Apr) at this Link

Keene Little : 5/24/2007 10:56:51 AM

Well, I mentioned in last night's Wrap that we would probably have some volatility today and so far we certainly are getting it. And it may not be over. The price pattern has become strange with all this jumping around but sticking with the RUT which has offered a clean pattern lately, it has come back down to its broken downtrend line so another leg back up to give us a 3-wave bounce could be a nice setup to get short. But again, a drop to a new low now would be more immediately bearish. It's dropping lower as I type so we'll see if the low holds. Link

Jane Fox : 5/24/2007 10:56:50 AM

The IWM puts I bot yesterday are looking good now. Link

Jeff Bailey : 5/24/2007 10:51:47 AM

Network Appliance Shares Fall On Weak Outlook ... Reuters Story Link

Jeff Bailey : 5/24/2007 10:50:07 AM

Indices that include NTAP Link ... NTAP is a component of DDX.X

Jane Fox : 5/24/2007 10:46:26 AM

This is no time to be long. Link

Jeff Bailey : 5/24/2007 10:44:55 AM

Network Appliance (NTAP) $33.08 -13.08% ... I think they are a component of DDX.X.

Jeff Bailey : 5/24/2007 10:44:19 AM

Disk Drive Index (DDX.X) 139.15 -3.15% ... notably weak.

Jeff Bailey : 5/24/2007 10:43:49 AM

DJ- Nymex Gasoline Gains On More Refinery Outages

Jeff Bailey : 5/24/2007 10:41:55 AM

Dow Industrials (INDU) 13,571 +0.33% ... after hitting another all-time high. WEEKLY R1 just ahead at 13,643.30.

Keene Little : 5/24/2007 10:41:11 AM

Here's the bearish thing I see, especially if I ignore the highly manipulated and inflated DOW. The DOW's sister, the SPX, bounced up for a retest of its broken uptrend line from May 16th. It looks like a kiss goodbye. That doesn't mean it can't continue higher still (and even hug that trend line higher) but right now it looks bearish. Link

Jeff Bailey : 5/24/2007 10:37:13 AM

Key Bancroft Family Member Opposes Murdoch Bid ... Reuters Story Link

Keene Little : 5/24/2007 10:35:08 AM

If you're short from yesterday (you shouldn't be if you shorted the DOW), then you could lower your risk a little by using today's high for your stop.

Jeff Bailey : 5/24/2007 10:32:26 AM

Aluminum Corp. China (ACH) $33.29 -2.05% ... somewhat weak this morning.

Jeff Bailey : 5/24/2007 10:31:42 AM

ValueClick (VCLK) $32.81 +0.52% ... already a component of IWM and AQNT's chief rival.

Jeff Bailey : 5/24/2007 10:30:54 AM

aQuantive (AQNT) $64.05 +0.17% ... biggest weight in IWM. However, got taken out and will be removed from Russell 2000. Lots of cash to be reconstituted this June.

Can't figure out who might replace them.

Jeff Bailey : 5/24/2007 10:29:32 AM

Varian Semiconductor (VSEA) $62.70 +2.66% ... IWM "heavyweight" ...

Jeff Bailey : 5/24/2007 10:28:57 AM

Brocade (BRCD) $9.09 -4.21% ... IWM "heavyweight" ... actually, so many stocks in IWM, it really gets washed out.

Jeff Bailey : 5/24/2007 10:26:00 AM

IWM $83.39 +0.46% ... finds sellers again at MONTHLY 19.1% retracement. Did this yesterday afternoon and failed. Need those shorts to call it quits again.

Keene Little : 5/24/2007 10:25:43 AM

With the bounce off the lows (either yesterday's or this morning's) it now makes those lows very important. A drop below those lows would be a sell signal as it would be an indication that the top is in. Whether it was the start of the decline or the end of the 4th wave correction doesn't matter--they need to hold for the bulls. So mark those levels on your charts as the key downside levels now.

Jeff Bailey : 5/24/2007 10:22:28 AM

Kraft Foods (KFT) $33.47 +0.45% ... little "cup and handle," but 150-day SMA ($33.80) and 200-day ($33.92) monitored closely.

Jeff Bailey : 5/24/2007 10:20:53 AM

Looking for a hat? Lots of them on EBAY $33.46 +1.73% at its 50-day SMA. Link

Jane Fox : 5/24/2007 10:18:23 AM

TKS Keene. If anyone has the symbol for the China/Shanghai index please email me at jbfox@charter.net

Keene Little : 5/24/2007 10:17:51 AM

Yields took a big jump as well so the risk now is another hit to equities at any time as money rotates into Treasuries which are becoming more attractive with each passing day. SPX held 1520 so continue to keep an eye on that uptrend line since a break of it will signal that we've seen the top to this rally. The DOW is the only one to make a new high this morning (thanks to Boeing, the anointed one today) and if the others don't follow then we'll have bearish non-confirmation. But it's too early to make that call right here.

Jeff Bailey : 5/24/2007 10:10:49 AM

Sears Holdings (SHLD) $182.12 +1.55% ... busts a move.

Jeff Bailey : 5/24/2007 10:12:59 AM

New Home Sales Surge in April

DJ- New-home sales soared in April, an unexpected surge marking the biggest climb in 14 years, according to a report that showed declining inventories and signaled hope for the long-suffering housing sector.

Sales of single-family homes increased for the first time in four months, rising by 16.2% to a seasonally adjusted annual rate of 981,000, the Commerce Department said Thursday. March new-home sales decreased 1.4% to an annual rate to 844,000, a figure revised down from an earlier estimated 858,000. Sales fell 3.8% in February and 12.7% in January.

Year over year, new-home sales were 10.6% lower than the level in April 2006.

The surge in April sales was a surprise. The median estimate of 25 economists surveyed by Dow Jones Newswires was a 0.2% increase in April sales to a 860,000 annual rate. It was the biggest increase since 16.4% in April 1993.

Going forward, the subprime mortgage market mess is expected to restrain sales. The Federal Reserve's latest quarterly survey of banks' senior loan officers, conducted in April and released last week, showed lenders tightened standards on subprime and non-traditional mortgages. Analysts expect tighter standards will lower the number of mortgages approved and keep sales depressed.

Regionally last month, new-home sales rose 3.8% in the Northeast, 8.5% in the West, and 27.8% in the South. Sales fell 4.0% in the Midwest.

The average price of a home last month decreased to $299,100, down from $324,700 in March and $310,300 in April 2006. The median price was $229,100, lower than $257,600 in March and $257,000 in April 2006.

There were an estimated 538,000 homes for sale at the end of April, representing a 6.5 months' supply at the current sales rate. In March, an estimated 546,000 were for sale, an 8.1 months' inventory. An estimated 92,000 homes were actually sold in April, up from 81,000 in March, based on figures not seasonally adjusted.

Jeff Bailey : 5/24/2007 10:08:11 AM

Jane ... Haven't discovered one. I've been using Stockcharts' and Dorsey/Wright's the past couple of years.

Keene Little : 5/24/2007 10:06:59 AM

The strong rally in the DOW now leaves open the possibility that the decline yesterday was in fact the completion of a larger 4th wave correction rather than the start of the decline. This raises the possibility that we'll see the DOW rally up to the 13700 area. The hard part right now is that the techs and small caps don't support that interpretation and it might mean we're going to see a new high in some (DOW and SPX) but not in others (NDX and RUT). It will of course make identifying a top that much more difficult.

Jeff Bailey : 5/24/2007 10:06:39 AM

Dow Jones Home Construction (DJUSHB) 675.46 +2.53% ... probes its 150-day SMA for second-straight session.

Jeff Bailey : 5/24/2007 10:05:08 AM

BIIIIG number out of New Home Sales ...

Jeff Bailey : 5/24/2007 10:04:52 AM

10:00 Market Watch found at this Link

Jeff Bailey : 5/24/2007 9:58:30 AM

Current OPEN MM Profiles that I've made and Watch List at this Link ... Established stops for both the TOL-IF and QGY-SD trades.

Jeff Bailey : 5/24/2007 9:44:24 AM

NVR, Inc. (NVR) $823.03 -0.23% ...

Jeff Bailey : 5/24/2007 9:43:45 AM

Bullish swing trade call establish stop alert ... for the Toll Brothers TOL Sep $30 Calls (TOL-IF) at $28.90 in the underlying.

TOL $29.61 -0.53% ...

Keene Little : 5/24/2007 9:40:01 AM

They're dumping techs and small caps at a pretty good clip this morning. They will obviously need to bottom before thinking long. The bottom of the small parallel down-channel for the RUT from yesterday is at 833 so watch for support there.

Keene Little : 5/24/2007 9:31:05 AM

Jane, I can't find a QCharts symbol for the Chinese market. They have one for Mexico's though if you want that one :-)

Jeff Bailey : 5/24/2007 9:27:23 AM

Toll Brothers (TOL) ... EPS was 2-cents shy of consensus, but revenue (net signed contracts) of $1.17 billion, slightly above consensus of $1.12 billion.

Slight sign of repair as cancellation rate came in at 18.9% vs. previous quarter's 36.9%.

Jane Fox : 5/24/2007 9:25:36 AM

Keene or Jeff what symbol do you use for the China market?

Jeff Bailey : 5/24/2007 9:17:03 AM

Toll Brothers (TOL) ... Earnings Press Release Link

Jane Fox : 5/24/2007 9:16:59 AM

Keene mentioned yesterday that the markets ended yesterday with shooting stars, a fairly bearish candlestick. So I am calling this market "Dancing with the Stars."

Keene Little : 5/24/2007 9:16:17 AM

Equity futures have had a nice little recovery off the overnight lows so now we'll see if they drop back down to test those lows after the open. If that happens then it could offer up a scalp long play for the bounce that corrects yesterday's decline. Watch SPX 1520 for support (or not) at its uptrend line from March. Assuming the bounce gets going I'll then be watching later today for where it could top out for another shorting opportunity.

Jane Fox : 5/24/2007 9:15:20 AM

The US$ is one of the main reasons I don't see Gold breaking its resistance anytime soon. WE need the $ to break its bear flag before Gold will be able to advance. Link

Jane Fox : 5/24/2007 9:09:24 AM

The daily chart of Gold has not changed much from yesterday but I see the resistance from the confluence of the magenta 20EMA and gold 50EMA has been enough to hold it back. MACD is certainly not telling me it will break anytime soon, the swing low from May 17th was met with a lower MACD swing low. Link

Jane Fox : 5/24/2007 9:05:56 AM

I love this chart of Crude Oil because you have such a clear picture of support and resistance. Notice though how this market has made a triple top but MACD has not. Link

Jane Fox : 5/24/2007 9:03:38 AM

The dollar gained a little due to the Commerce Department's New Orders for Durable Goods but those gains seem to have "evaporated" and the $ is once again testing its overnight lows. Unfortunately though it has not fallen far enough to have any significant affect on gold. Link

Jane Fox : 5/24/2007 8:53:58 AM

Lucky Keene is not in yet because I'm sure he would not like a post that started with "Poor Greenspan." :)

Jane Fox : 5/24/2007 8:55:43 AM

Poor Greenspan damned if I do and damned if I don't. Here is a sampling from MarketWatch; "As wire services reported the (Greenspan's) comments, what had been a nice gain for the Dow Jones Industrial Average, above 13,600, suddenly evaporated and turned into a 30-point loss."

Yes yesterday's "evaporation" was partly due to Greenspan's comments but does that mean he shouldn't have said it? Could maybe the tumble be partly due to the fact that the markets are so overbought that any little ripple could have sent traders for the exits? Me thinks so. So don't go dumping this all on Greenspan.

Jane Fox : 5/24/2007 8:47:09 AM

SAN FRANCISCO (MarketWatch) -- Anyone else grown tired yet of Alan Greenspan's Cassandra act?

The former Federal Reserve Board chief, for 16 years the epitome of economic discretion, offering only mumbled (and sometimes jumbled) assurances to weighty questions about market bubbles and global financial risk, is suddenly shouting from the rooftops.

It seems that a week can't go by without Greenspan issuing some dire warning about the markets or global economy, typically sending stocks into a brief tailspin until investors remember that he's not the Fed chief anymore. Unlike the mythical Cassandra, doomed to have nobody believe her predictions, people actually believe Greenspan.

Wednesday he was at it again, telling a conference in Madrid via teleconference that the China market is due for a "dramatic contraction."

As wire services reported the comments, what had been a nice gain for the Dow Jones Industrial Average, above 13,600, suddenly evaporated and turned into a 30-point loss. The Dow ($INDU) managed to recoup some of the losses by the end of the day, closing down 14.30 points at 13,525.65.

Jane Fox : 5/24/2007 8:45:25 AM

WASHINGTON (MarketWatch) -- First-time applications for state unemployment benefits rose by 15,000 to a seasonally adjusted 311,000 in the week ending May 19, the first increase in the last six weeks, the Labor Department reported Thursday.

The four-week average of initial claims, considered a better gauge of underlying labor market strength because it smoothes out often-volatile data, dropped by 3,500 to 302,750, the lowest since late February 2006.

There were no special factors, such as severe weather events, holidays or strikes, that impacted the claims numbers, a Labor Department spokesman said.

Jane Fox : 5/24/2007 8:42:46 AM

WASHINGTON (MarketWatch) - New orders for U.S.-made durable goods increased 0.6% in April, boosted by strong demand for metals, the Commerce Department reported Thursday.

Orders in March rose a revised 5%, a six-month high, compared with a 4.3% estimate previously.

Demand in April was held back by a 10.7% drop in orders for civilian airplanes, where new orders had doubled in the previous two months.

Excluding the extremely volatile transportation category, orders were up 1.5% in April, identical to the increase in March.

Orders for core capital equipment goods - the best monthly gauge of business investment - rose 1.2% after a 4.4% gain in March.

Economists surveyed by MarketWatch were looking for no change in durable goods orders in April.

The report lends credibility to other indicators of factory activity, which show a rebound in the spring following months of tepid demand.

Jane Fox : 5/24/2007 8:32:17 AM

Since Monday , the S&P has encountered resistance when it tried to close above its seven-year-old record at 1527.57 but so far the best close has been Monday's close at 1525.10. The index traded in record territory for several hours each on Monday and Tuesday, but near the end of the trading session fell back below it again. Wednesday, the S&P 500 was enjoying another surge that put it well over the record, but around 2 p.m. EDT it, along with the other indexes, made a noticeable move downward. They tried to recover, but never again got near the highs of earlier in the day.

Stocks have been rallying since M arch 14th without a correction and they are well overdue for one and the longer we wait the harder that correction will be and the more pain it will inflict on the masses. What is driving this euphoria? Some have said deals and stock buybacks have helped share prices as more shares are removed from the marketplace. Some said better-than-expected corporate profits coupled with signs of softening inflation have helped bring the major indexes to records and multiyear highs. I think all the above.

However, Memorial Day right around the corner, and it looks as though rising gas and oil prices on the verge of summer may become a factor and there may be little to propel shares higher in the near term. On the other hand, some market watchers think there is still a lot of money on the sidelines, which could jump into the rally and prolong the bull market. Link

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