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Jeff Bailey : 7/6/2007 11:56:59 PM

BPNDX fell 1% to 74%. GENZ at $61. Link

Jeff Bailey : 7/6/2007 11:53:16 PM

BPOTC up 0.30% to 53.25%.

Jeff Bailey : 7/6/2007 11:41:08 PM

BPNYSE up 0.53% to 69.46%.

Jeff Bailey : 7/6/2007 11:40:07 PM

Hmmm ... BPSPX unchanged at 73.59%.

Jeff Bailey : 7/6/2007 11:39:12 PM

Sector Status Change ... BUSIiness Products reverses back up to "bull confirmed" from "bear correction" status.

Manpower (MAN) $94.26 +0.40% ... is grouped by Dorsey/Wright as business product.

You might be thinking, "this is SPG all over again."

If it is, then I won't hesitate. Should have put SPG on break at $110. I didn't ...

Jeff Bailey : 7/6/2007 11:29:07 PM

DIA Aug Option Montage (CBOE Volume Only) at this Link

Jeff Bailey : 7/6/2007 11:28:52 PM

DIA July Option Montage (CBOE Volume Only) at this Link ... A little more "pack for your punch" the deeper in-the-money you go on the calls side.

The DAW-SC is the naked put from 6/22/07, stopped at $1.75 when DIA traded my stop of $133.40. Right idea/analysis, wrong execution.

Jeff Bailey : 7/6/2007 11:02:58 PM

I did look at the CME options this morning when news first hit regarding they were upping their bid for the BOT.

Paying $15.00 at the time for the then out-the-money Aug $570 sure seemed "too much" $570 + $15.00 = $585.

Long the stock instead.

Jeff Bailey : 7/6/2007 10:47:55 PM

Current OPEN MM Profiles that I've made and Watch List at this Link ... Would be up $0.51/share on the DIA from 7/05/07 initial benchmark, but up just $0.10 at the bid of $3.40 and $0.20 if offer of $3.50.

VXO.X 14.31 -2.85% at today's close. VXO was 14.88 on 7/5/07 at 02:52:01 PM.

OI Technical Staff : 7/6/2007 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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 : 7/6/2007 5:47:41 PM

Closing Internals found at this Link

Jeff Bailey : 7/6/2007 5:29:21 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/6/2007 4:11:53 PM

Net $3.5 Billion Treasurys Stripped In June (update/educational)

DJ- There was a net stripping of $3.56 billion of U.S. Treasurys in June, the Treasury Department said Friday.

That followed a net reconstitution of $2.16 billion in May and a net stripping of $3.12 billion in April.

By stripping the interest payment from the principal payment on outstanding Treasury securities, zero-coupon Treasurys are created. To reassemble, or reconstitute, a security, a financial institution or securities broker must obtain the appropriate principal component and all related unmatured interest components for the security being reconstituted.

Jeff Bailey : 7/6/2007 3:53:03 PM

Let's see ... 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11.

$536 + ((11 * 3) * 4) = $668.

Jeff Bailey : 7/6/2007 3:50:37 PM

From time of bullish profile, started out with a bullish vertical count of $620. That's been growing the past couple of hours.

Jeff Bailey : 7/6/2007 3:49:46 PM

Chicago Merc (CME) $574 ... retraces 80.9% of its 1/24/07 high close to recent 5/10/07 low close.

Jeff Bailey : 7/6/2007 3:44:59 PM

US Says Net $3.56 Billion Treasurys Stripped In June

Marc Eckelberry : 7/6/2007 3:19:21 PM

Back for a sec. No closing reversal as VIX drops below s2. But yields are hanging on as is oil. A little more and we should finally get some real rotation. They could be shooting for NDX 2000, or QQQQ 49. I any case, I am cost averaging into a pretty solid short position. I have time and patience since I am using futures, not options. We have gone 5 days away from the 5 dma on NQ and I've rarely lost that bet, long or short. Have a nice weekend and let the trade breathe. It will come to you.

Jeff Bailey : 7/6/2007 3:16:43 PM

Chicago Merc (CME) $568.00 ... 1, 2, 3, 4 ... 4 X's today. (4-point box chart)

Jeff Bailey : 7/6/2007 3:14:47 PM

Have a great weekend Keene!

Jeff Bailey : 7/6/2007 3:02:52 PM

03:00 Market Watch found at this Link

Keene Little : 7/6/2007 2:56:43 PM

I've got to run so I'll miss today's exciting close. I hope everyone has a great weekend.

Keene Little : 7/6/2007 2:53:09 PM

SPX actually looks good for a continuation of its rally on Monday--a push up to a Fib projection (5th wave = 62% of the 1st wave in an ascending wedge) near 1538 just might do it for this rally. It would be a good setup to test the short side again. Link

Jeff Bailey : 7/6/2007 2:40:07 PM

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

Jeff Bailey : 7/6/2007 2:20:04 PM

TLT gave "sell signals" here in the MM on 6/07/07 and Monday too!

About ready for a buy signal.

Keene Little : 7/6/2007 2:15:22 PM

Looks like the techs are still getting the lovin'. New highs. Unfortunately for the bulls the choppy push higher is taking on an ending pattern look to it. It may be only good for a pullback but it's looking like that pullback could set up first thing next week. Don't trust this low-volume push higher.

Jane Fox : 7/6/2007 1:59:57 PM

Using the jtHMA strategy, TLT, the iShares 20+ Treasury ETF, gave a sell signal July 3rd at 84.71 or just below it. TLT is now trading at 83.37. Link

Keene Little : 7/6/2007 1:50:55 PM

If we get a little more pullback, two equal legs down for the DOW would take it back down to this morning's low. I'm just not sure we'll see that today. But if we do then it actually might set up a buying opportunity into next week, using yesterday's low as your stop.

Keene Little : 7/6/2007 1:47:52 PM

The pattern I'm seeing in price action since this morning's high is corrective, both up and down. This tells me we'll probably just chop sideways into the close. It also says we're probably not done seeing the highs (next week) even if we're going to get a little more pullback first.

Jeff Bailey : 7/6/2007 1:38:49 PM

Disclosure(s): Per 11:32:56 and 01:35:20 I currently hold bullish positions in DIA and CME.

Jeff Bailey : 7/6/2007 1:35:29 PM

Swing trade long alert ... for 1/2 position in shares of Chicago Merc (CME) here at $557. Stop goes $536, target $620.

Jane Fox : 7/6/2007 1:21:27 PM

BOSTON (MarketWatch) -- Meritage Homes Corp. said its preliminary home orders fell 28% and its cancellations bumped up in another sign that builders continue to struggle with a slumping housing market with scant relief seen in the near future.

The Scottsdale, Ariz.-based company Friday said its preliminary second-quarter home orders fell 28% from a year earlier to $502 million, while its cancellations rose to 37% of gross orders, up from 32% in the year-ago quarter and from 27% in the first quarter of 2007.

"Weak demand and high inventory levels have increased competition among home builders, pressuring margins despite reductions in new home starts, lot supplies and operating costs," said Chief Executive Steven Hilton in a statement.

Meritage said it expects to book additional pre-tax charges between $75 million and $80 million for the quarter as a result of inventory impairments and land-option write-offs. Also, it anticipates taking about $28 million in charges related to goodwill and other intangible assets in its challenged Florida-based operations

Jeff Bailey : 7/6/2007 1:15:58 PM

01:00 Internals found at this Link

Jeff Bailey : 7/6/2007 1:02:52 PM

01:00 Market Watch found at this Link

Marc Eckelberry : 7/6/2007 1:00:56 PM

I have to go, but watch TNX 52 and NQ 2003.75. Oil will also be a factor next week when real money comes back from the beach. Another way to attack this market is to accumulate some Yen.

Jeff Bailey : 7/6/2007 12:56:28 PM

CHEESE MARKET VULNERABLE TO MANIPULATION

DJ- Thin trading on the spot cheese market makes it ripe for manipulation, and that could affect the price of milk and other dairy products, the investigative arm of U.S. Congress says.

Jeff Bailey : 7/6/2007 12:55:25 PM

ECRI INFLATION GAUGE KEEPS ON FALLING

DJ- Economic Cycle Research Institute says that its Future Inflation Gauge fell to 117.8 in June from an upwardly revised 118.5 in May. May had initially been reported as 118.2.

Jeff Bailey : 7/6/2007 12:54:35 PM

GENZYME FALLS AS DIARRHEA DRUG MISSES GOAL

DJ- Genzyme shares fall 5% as the company says a Phase III test assessing the safety and efficacy of tolevamer liquid didn't meet its primary endpoint.

GENZ $61.45 -5.25% ...

Jeff Bailey : 7/6/2007 12:53:20 PM

ADVANCED MEDICAL OFFERS $4.3B FOR BAUSCH

DJ- Advanced Medical Optics offers to pay $75 a share for Bausch & Lomb, according to people familiar with matter. The deal is valued at $45 in cash and $30 in stock. Warburg Pincus has agreed to pay $3.67 billion, or $65 a share, for Bausch.

BOL $71.87 -0.18% ...

EYE $35.03 -2.39% ...

Jane Fox : 7/6/2007 12:52:28 PM

If the jtHMA weekly turns red and the monthly remains green I will take a longer term trade when the weekly turns back green. I use this strategy for my 401(k) type investments and when it triggered a buy in early April, I bot some index mutual funds.

Jeff Bailey : 7/6/2007 12:50:08 PM

MICROSOFT PLANS $1B CHARGE FOR XBOX GLITCH

DJ- Microsoft will take a more than $1 billion charge to expand the warranty program for its Xbox 360 after discovering hardware problems with the videogame system, an embarrassing misstep for a company still struggling to profit from the games business.

MSFT $29.73 -0.86% ...

Jane Fox : 7/6/2007 12:46:29 PM

I see ER retraced back to 857.60 so the stop at 857.20 was a good move.

Jane Fox : 7/6/2007 12:45:28 PM

The next buy signal came on June 27th with a high on the 120 minute bar at 831.26. Place a buy just above this high, which did trigger and you would still be long. RUT is now trading at 856.00 Link

Jane Fox : 7/6/2007 12:42:18 PM

The next buy signal triggered on June 13th's 13:30 bar. The high was 828.73 so put a buy order just above 828.73 and this one did trigger. That little move reached a high of 851.15. Link

Jane Fox : 7/6/2007 12:39:12 PM

I would like to take a few minutes and review how my jtHMA "system" is doing. Here are the charts of the Russell 2000 daily, 120 minute and the 60 minute. This strategy takes long trades only when the weekly is green (which it is) and uses the daily/120/60 charts to buy the dips. Here the daily is red and the 120 and 60 have just turned green - a buy signal. The high on the first 120 bar that was green on June 11th was 837.23 so put a buy order just above that high. It did not trigger, which was good. Link

Jane Fox : 7/6/2007 12:38:58 PM

Remains to be seen if that was good decision or not.

Marc Eckelberry : 7/6/2007 12:38:42 PM

If you went short today, or re-entered after being stopped at 2005, note that reistance is yesterday's high at 2003.75. All other markets will trade watching NQ now, since it was the leader. This day can go any way, so adjust your risk tolerance.

Jane Fox : 7/6/2007 12:37:49 PM

And they got us.

Jane Fox : 7/6/2007 12:37:38 PM

and locking in at least 2 ticks to pay the commish.

Jane Fox : 7/6/2007 12:37:13 PM

Lowering the stop to 857.20

Marc Eckelberry : 7/6/2007 12:33:55 PM

I think today's high was the easiest short of the year to hit, but that's me. I don't have any emotions when I put on trades like that. If I'm wrong, it's by a few points and I just add on.

Keene Little : 7/6/2007 12:32:16 PM

Could it be that the boys used all the new money (pensions etc) to boost the market up and now...

Very good possibility, and once the new-month money is gone, it could be tough sledding. But at this point ideally we'll get a shallow choppy pullback into early next week and then a final rally leg to finish off the whole thing by the end of the week.

Marc Eckelberry : 7/6/2007 12:31:54 PM

Put your fibs up. 2001.50 is 61.8% for NQ. 50% is 1999.50 and weekly R2.

Marc Eckelberry : 7/6/2007 12:30:43 PM

The key is for the VIX to hold a bid above 14.75.

Marc Eckelberry : 7/6/2007 12:30:16 PM

If NQ can't regain 2003.75, it's over. With a little more push, we could get my closing reversal. I have been adding contracts short al the way up to 2006 on NQ. Payday will be around 47.50 QQQQ or NQ 1955 or so, July open low.

Jane Fox : 7/6/2007 12:29:50 PM

Now you have to make a decision do you take profits now or wait for the extra 2 ticks? We are only trying for 13 ticks which is not a lot so I usually wait.

Jane Fox : 7/6/2007 12:27:34 PM

Stop to b/e we got to within 2 ticks of target.

Jane Fox : 7/6/2007 12:27:20 PM

Stop now at 857.60 2 ticks at risk

Jeff Bailey : 7/6/2007 12:25:38 PM

Asian Markets: at this Link

Jane Fox : 7/6/2007 12:24:14 PM

If this short moves to 856.50 lower the stop to 857.60.

Jane Fox : 7/6/2007 12:22:26 PM

I will lower the stop to 857.60 but we need to move down a little bit more before I do.

Jane Fox : 7/6/2007 12:19:44 PM

I am not putting alerts on these posts because I am assuming you will be watching if you are in this trade. lower stop to 858.20

Jane Fox : 7/6/2007 12:18:45 PM

Once we move to 857.00 I will lower the stop to 858.20.

Jane Fox : 7/6/2007 12:16:01 PM

Triggered short at 857.40 stop is 858.80 and target is 856.10.

Jane Fox : 7/6/2007 12:15:36 PM

ER makes a low of 857.60. Are your orders ready?

Jane Fox : 7/6/2007 12:14:53 PM

I looks like ER is making a swing high at 858.70 so if we get triggered short at 857.40 I think the stop should be 1 tick above this high so the stop will be 858.80 up from 858.60. Of course we will lower this stop once we move into profit but it needs to be wide to begin with.

Marc Eckelberry : 7/6/2007 12:14:18 PM

ZN has cracked my tipping point at 104'20. We should see 5.2% soon.

Marc Eckelberry : 7/6/2007 12:13:45 PM

TNX 51.97

Jeff Bailey : 7/6/2007 12:13:19 PM

NYSE Composite (NYA.X) 10,065.51 +0.39% ... challenging its 06/04/07 all-time high close.

Jane Fox : 7/6/2007 12:04:43 PM

ER made a low of 857.80 and we have an order sitting at 857.40 to go short.

Keene Little : 7/6/2007 11:58:07 AM

The DOW did in fact find resistance in the 13616-13625 area and has now pulled back a little sharper than the previous mid-morning correction. That makes for a good high to short against--small trade just to see if the morning high holds. Link

Marc Eckelberry : 7/6/2007 11:56:39 AM

ZN at 104'20.

Marc Eckelberry : 7/6/2007 11:54:15 AM

Exact VIX low of day so far is 14.75, daily S2. It's also the highs in NQ/ES.

Marc Eckelberry : 7/6/2007 11:51:43 AM

NQ needs to hold 2003.75. Lunch chop now.

Jeff Bailey : 7/6/2007 11:50:55 AM

Parametric (PMTC) $16.92 -21.55% ... getting whacked.

Marc Eckelberry : 7/6/2007 11:49:47 AM

VIX S2.

Jane Fox : 7/6/2007 11:49:30 AM

If triggered stop will be 858.60 and of course target is 857.40 - 1.30 = 856.10

Jane Fox : 7/6/2007 11:48:31 AM

WE are overbot and we could get a nice reversal. ER usually moves quickly on these reversals so you need to be quick with your orders. Short at 857.40. alert

Marc Eckelberry : 7/6/2007 11:48:10 AM

TNX 51.91.

Jeff Bailey : 7/6/2007 11:46:30 AM

eBay Launches U.S. Site for Classifieds ... AP Story Link

EBAY $33.76 +4.61% ... #11 Weighting in NDX/QQQQ

Marc Eckelberry : 7/6/2007 11:46:20 AM

Of course, they could buy bonds and we get a yield drop, but it should be only temporary. I think it is only a matter of time before we get back above 5.2% on the ten year. Earnings are not even out yet, so you know someone is just playing with the market. 20 million will move it on this volume, that's how silly this is.

Jeff Bailey : 7/6/2007 11:42:54 AM

Bears not as aggressive with their shorting this morning.

Marc Eckelberry : 7/6/2007 11:40:40 AM

If you think they will wait for 80 oil to sell this market, think again.

Marc Eckelberry : 7/6/2007 11:39:37 AM

Oil is still climbing, now 72.70. Gasoline is up as well. TNX 51.87, yields could tap 5.2% again. If this continues, we will have a closing sell-off.

Keene Little : 7/6/2007 11:39:33 AM

I completely agree with Marc's 11:23 comment--I use options a lot more than futures in times like this. I trade light (until I know a more solid move is in play) and I lay off the futures to avoid the whipsaw price action in an easily manipulated market (light volume).

Marc Eckelberry : 7/6/2007 11:38:16 AM

NQ r1 is 2007.50.

Jeff Bailey : 7/6/2007 11:37:52 AM

Swing trade call(s) establish stop alert for the DAW-HE at $134.30. (Just under MONTHLY Pivot) and rising 50-day SMA.

Jane Fox : 7/6/2007 11:37:19 AM

The Russell 2000 breaks 850 and is headed for yearly highs at 856. Link

Keene Little : 7/6/2007 11:35:39 AM

NDX is now pressed right up against the trend line along the highs since May. I still like a short play setup here but you need to understand we're fighting a bullish bias for the week, exaggerated in a light volume environment. You might want to wait for a close below the line to help the short side. Link

Jeff Bailey : 7/6/2007 11:35:15 AM

VXO.X 14.27 -3.12% ... still stay around the $134/$135 strikes for DIA.

Jane Fox : 7/6/2007 11:35:06 AM

Reverse H&S building here with the neckline the 50EMA. Link

Jeff Bailey : 7/6/2007 11:34:12 AM

NASDAQ-100 Index (NDX.X) alert! 1,986 +0.25% ... that's a new 52-weeker.

Jeff Bailey : 7/6/2007 11:32:56 AM

Swing trade bullish call alert ... let's take another DIA Aug $135 Call (DAW-HE) at the offer of $3.50.

DIA $136.15 +0.43% ...

Jeff Bailey : 7/6/2007 11:30:26 AM

11:00 Internals found at this Link

Jeff Bailey : 7/6/2007 11:26:03 AM

Morgan Stanley Cyclical (CYC.X) 1,100.09 +0.49% ... That's a new 52-weeker.

Marc Eckelberry : 7/6/2007 11:23:37 AM

This is when long put options get easier than short futures. It feels less painful and you will get the premium jump on the higher VIX. Remember, this is summer trading.

Marc Eckelberry : 7/6/2007 11:20:53 AM

Last week, 72 oil and 5.18% would have been met with a 150 point drop in the DOW within minutes. With 60% less volume this week, it's easy to squeeze shorts but it means nothing other than a good time to make adjustments.

Jane Fox : 7/6/2007 11:20:32 AM

VIX is supporting the bullishness. Link

Keene Little : 7/6/2007 11:18:14 AM

After finding resistance at its broken uptrend line from June 27th on Monday and Tuesday, and slightly above the top of a parallel up-channel for the bounce from the June 27 low, the DOW is pressing above the top of the channel again this morning but the higher price high is so far being met with negative divergence on MACD: Link Watch for possible trend line resistance in the 13616-13625 area.

Jane Fox : 7/6/2007 11:19:56 AM

The SEC has approved amendments rule 10a-1 to remove the "short sale tick test" requirement effective Friday July6th.

So as of today traders will be able to short all securities without the required up tick.

Marc Eckelberry : 7/6/2007 11:14:53 AM

Oil is at 72.50 and yields are knocking at the 5.2% door. This is the opposite of last July when selling became excessive and illogical. It's a great time to lighten up on stocks that have run up. We will correct hard any day, if not today, so scalp your longs but establish shorts for swing trades. QQQQ could go all the way to 49, but it won't stop it from testing 47.50 again in the coming days/weeks. A blow-off top in NQ would be at 2020.
ZN 104'20 is the tiping point for equities.

Jane Fox : 7/6/2007 11:13:50 AM

NQ is taking a little bit of a rest today and is the only market to not break its PDHs. Link

Jeff Bailey : 7/6/2007 11:10:48 AM

Monster.com (MNST) $43.05 +3.21% ...

Jeff Bailey : 7/6/2007 11:10:00 AM

Swing trade short stop alert! ... for Manpower (MAN) $95.20 +1.40% ...

Keene Little : 7/6/2007 11:09:45 AM

It's not looking like the sellers are going to be allowed to play today. Light volume environment makes it very easy to prop this market up. If SPX ends up in the green today it will be 7 days running and that's usually a very good setup for at least a multi-day correction so bears might have to wait until next week to get a few morsels. I wouldn't be surprised if we see a choppy rise higher today--just enough to hold it up but also giving us an ending pattern to sell into.

Jeff Bailey : 7/6/2007 11:03:42 AM

11:00 Market Watch found at this Link

Jeff Bailey : 7/6/2007 10:52:26 AM

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

Jeff Bailey : 7/6/2007 10:35:44 AM

EIA Weekly Nat. Gas Storage Table at this Link ... Build of 78 Bcf

Jeff Bailey : 7/6/2007 10:25:10 AM

Today's Global Economic Reports Link

Jane Fox : 7/6/2007 10:19:45 AM

Love emails like this

"Your post @ 9:52 about TRIN and beware of the spike: thanks a lot. Was waiting to go long and did. Trade hit my target, muchas gratias (smile)"

Jane Fox : 7/6/2007 10:16:44 AM

My guess is we head higher from here.

Keene Little : 7/6/2007 10:12:39 AM

Getting a bounce to correct the initial sell off. The important low is yesterday's--any break of that low would likely usher in some stronger selling. As long as that holds then the trend is still up. I suggested a short play on the techs against yesterday's high and that's still in play. So we have yesterday's high and low which should be the guide for now--whichever one breaks will probably see the market head that way.

Jane Fox : 7/6/2007 10:06:06 AM

VIX to new daily lows and AD volume to new daily highs.

Jane Fox : 7/6/2007 10:05:24 AM

I would be very careful if short here.

Jane Fox : 7/6/2007 10:05:12 AM

Ad line as jumped from -996 to -472 and the buyers are coming back.

Jeff Bailey : 7/6/2007 10:02:56 AM

10:00 Market Watch found at this Link

Jane Fox : 7/6/2007 9:52:47 AM

TRIN is now 0.69. Beware bears this could spike at any time.

Jane Fox : 7/6/2007 9:49:56 AM

The VIX and AD volume are telling you the bears have the ball but keep an eye on the TRIN - it is bullish and that means there is more volume going into the advancing issues than the declining and the markets can spike easily. Link

Jane Fox : 7/6/2007 9:47:22 AM

Internals are bearish but like I have seen them in the past. AD line is now -885 so getting bearishier and bearishier. Link

Jane Fox : 7/6/2007 9:42:04 AM

Egads that last test of support at $67.00 was a really nice setup. Link

Jane Fox : 7/6/2007 9:38:59 AM

ER breaks its ON lows.

Jane Fox : 7/6/2007 9:32:39 AM

Gold is down and the US$ is up but Gold is not down as much the $ chart would have you think. This is due to crude - it is up and helps to keep a bid under Gold.

The interesting chart this morning is the DAX. The DAX tagged its PDL overnight, the only major market (that I watch) to do this and is much weaker than the American markets. This of course could be due to the fact that it has been so strong and is just taking a rest. Link

Jane Fox : 7/6/2007 9:20:33 AM

Needless to say the markets rallied when the payroll data was released at 8:30. ER and NQ both tagged their PDHs and although ES and YM did not tag PDHs they certainly broke to new overnight highs. The interesting part is the rally was immediately sold and the markets spiked back down again. ES and YM both made new overnight lows on the sell-off. You have to drill down to at least a 1 minute chart to see the movement it was so fast. Link

Keene Little : 7/6/2007 9:14:03 AM

Futures are being pushed back up to where they were prior to the 8:30 sell off. It's easy for big money to do with pre-market futures so that the cash market is positioned in positive territory for the open. Just be careful for another bout of selling once the cash market opens.

Jane Fox : 7/6/2007 9:08:51 AM

Dateline WSJ - WASHINGTON -- U.S. employment posted a solid rise last month on strong hiring in health care and government and previous months' gains were revised sharply higher, suggesting labor market conditions remain very supportive of economic activity at midyear.

The figures suggest a continuation of the Federal Reserve's lengthy interest-rate pause is likely for the next several months at least amid signs of well contained wage pressures. They could even put the prospect of rate increases on the table for next year if confirmed by future data.

Nonfarm payrolls increased 132,000 in June, after swelling 190,000 in May and 122,000 in April, the Labor Department said Friday. Previous reports showed job growth of just 157,000 in May and 80,000 in April. Monthly job growth has averaged a robust 145,000 so far this year. The unemployment rate was unchanged last month at 4.5%.

Average hourly earnings increased $0.06, or 0.3%, to $17.38. That was up 3.9% from a year earlier, suggesting tight labor markets still aren't putting much pressure on labor costs.

Keene Little : 7/6/2007 8:50:03 AM

With the stronger than expected jobs numbers, and the revisions higher for past months, the market reacted like it usually does--what's good for the economy is somehow bad for stocks so futures sold off. Too much job growth means a Fed that is not only less likely to cut rates but more likely to raise them if inflation keeps ticking higher (CPI will eventually seep into core CPI). The market worries about the Fed choking off growth.

So equity and bond futures have sold off with equities now near the flat line (techs and small caps holding up a little better again). Bonds dropped and so the yield rally continues. Metals also dropped hard on the news. So good economic news has provoked selling all around.

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