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Jeff Bailey : 7/11/2007 12:24:21 AM

Inflation Expectations and Inflation Forecasting (07/10/07) ... Remarks by Chairman Ben Bernanke Link

Jeff Bailey : 7/10/2007 11:26:30 PM

NASDAQ 100 Bullish % (BPNDX) ... no change at 75% bullish.

Jeff Bailey : 7/10/2007 11:24:53 PM

S&P 100 Bullish % (BPOEX) saw a net loss of 2 stocks to reversing lower PnF sell signals. Still "bull confirmed" (from 03/26/07 74%) at 84% bullish.

Hopefully no subscribers added to their short positions in April. Link Doh!

;)

Today's OEX net losses were LEH @ $71, and HIG $97 (see 06/06/07 and 6/7/07 MM).

Jeff Bailey : 7/10/2007 11:11:36 PM

S&P 500 Bullish % (BPSPX) saw a net loss of 2.02%, or 10 stocks to reversing lower PnF sell signal. Still "bull correction" at 71.98%. Measure of 68% would be "bear alert" and 64% "bear confirmed."

SPY $150.92 -1.35% ... sits right on its weekly "doji" close from 5/11/07 $150.86. Again ... 1/2 bullish positions only per 07/02/07 Wrap Link

Jeff Bailey : 7/10/2007 10:56:41 PM

Financial Select SPRDs (XLF) $35.76 -2.10% ... $0.50 box scale at this Link with Top 10 Weighted components noted.

C, AIG, JPM and AXP are Dow Industrial Components.

StockCharts' XLF Link ... Again, the XLF does have an SEC Yield of 2.29% based on $0.20/share quarterly dividend. Thus StockChart.com's chart off a bit.

XLF Composition Link

Keene Little : 7/10/2007 10:41:27 PM

Wednesday's pivot tables: Link and Link

We got the pullback and a little more on some of the indexes on Tuesday. The setup on Monday night was a good one for the short side so now that we got the pullback what's next?

Starting with the SPX 60-min chart, I had posted Tuesday afternoon (before I left about an hour early) to watch for support around 1511 (two equal legs down and the uptrend line from June 27th. If SPX breaks below 1510 then something more bearish is happening. Closing at 1510.12 I'd say the bulls better get something going right away on Tuesday: Link

The bearish price path says we could chop up and down this week and then set up for a strong decline during opex. That would certainly be a switch from the normally bullish opex week. The daily chart keeps this all in perspective: Link

SPX is the only one that is immediately threatening to break its uptrend line from June 27th. The DOW needs to drop to about 13420, or close to its 62% retracement of the rally from June 27th, to test its trend line support: Link And NDX's uptrend line is just above 1960: Link

The NDX daily chart shows the bullish expectation for the current pullback (which could chop up and down for the rest of the week) to lead to another rally leg higher so watch for that possibility if you're trying to get short: Link

I'm sticking with the daily chart of the RUT until its pattern clears up. I added the fan lines--uptrend lines from March through each low following the mid-May low. You can see how the trend lines have been used by traders. Price stopped on the middle line so we could see a bounce off this on Wednesday. Link

Jeff Bailey : 7/10/2007 10:44:17 PM

Tuesday's Money Flows (02:00 PM EDT) at this Link

Financial Select SPRDs (XLF) and both banking ETFs saw notable outflows.

XLF is our currently "over weight" bearish in my MM profiles (300 shares equivalent ~$10,867 in underlying).

Jeff Bailey : 7/10/2007 10:25:08 PM

Email Question ... Jeff: The euro was quite strong again today and looks like it broke above some major resistance. My question is what scale should we be using for the euro, and what is the vertical count, which I would think is bullish?

Reply ... Here's Dorsey/Wright's Euro Spot chart. Most institutional traders/investors will be viewing the $0.01 box size. Link

The bullish vertical count to $1.50 is still in play since that double top buy signal at $1.24 back in mid-April 2006.

OI Technical Staff : 7/10/2007 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 : 7/10/2007 5:02:37 PM

Current OPEN MM Profiles with stops/targets at this Link

Jeff Bailey : 7/10/2007 4:25:13 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/10/2007 4:17:30 PM

Closing Out an MR short from 851.

Jane Fox : 7/10/2007 3:43:33 PM

And there goes ES to new daily lows. Ya gotta love that VIX.

Jane Fox : 7/10/2007 3:29:37 PM

VIX to new daily highs suggests ES will follow with new daily lows. Link

Jane Fox : 7/10/2007 3:21:50 PM

Wilshire 5000 stops right at the 38.20% level. Link

Jane Fox : 7/10/2007 3:20:32 PM

The DAX has taken a healthy 50% dip. Link

Jane Fox : 7/10/2007 3:18:59 PM

The NAZ, our stronger market of late, has not quite made it to the 38.20% level as yet. So if we were to try to get long on this dip the NAZ is the market to use. Link

Jane Fox : 7/10/2007 3:16:38 PM

ES has also retraced 38.20% of its rally from the June 27th lows. Link

Jane Fox : 7/10/2007 3:12:10 PM

DOW has retraced 38.20%. Link

Jane Fox : 7/10/2007 3:10:38 PM

Here's a look at some daily charts. Russell 2000 has retraced 50% of the rally off the June 27th lows. Link

Jane Fox : 7/10/2007 3:04:21 PM

Well well look at this, the bears have the ball and are running with it. Link

Keene Little : 7/10/2007 2:22:51 PM

A break below 1510 would say something more bearish is happening and I'd switch to the short side again if you try a long off that uptrend line and get stopped out. Or if it breaks and then comes up for a retest you can try shorting that. But we're still in an uptrend until it breaks so it's worth testing the dips to see if the buyers step back in.

I've got to leave early today so I'll check back in well after the close and update the charts. Good luck.

Keene Little : 7/10/2007 2:20:02 PM

In addition to the projection for two equal legs down today at SPX 1511.77 that's also right near the uptrend line from June 27th. I'd try a scalp long play there. Link

Keene Little : 7/10/2007 1:53:38 PM

Getting the next leg down, finally. SPX has met its minimum downside target by hitting 1517.40 (2nd leg down = 62% of this morning's 1st leg down). Equality is at 1511.77 which is between a 38% and 50% retracement of the rally from June 27th so watch for potential support there. Be sure to trade this and not expect any big moves yet. Link

Keene Little : 7/10/2007 1:36:18 PM

By now I've got that one-and-done kind of feeling. If you miss the initial move in this market you sit there the rest of the day watching chop. There's no guarantee of course but I'm still expecting another leg down to the pullback but we may have to endure more sideways stuff for a bit longer. The trouble is that we could even see a push back up to close this morning's gaps before proceeding lower again. Just not a good setup either way right here.

Keene Little : 7/10/2007 12:48:07 PM

In the lunch hour and the market is just chopping around. If anything I'd prefer to be short for the day but realize we could see a choppy bounce higher before it tips back over.

Jane Fox : 7/10/2007 12:17:32 PM

Russell 2000 jtHMA 120 and 60 charts are now red. WE need the daily to turn red then the 120 and 60 back green again and we have a buy signal. Link

Keene Little : 7/10/2007 12:11:45 PM

The market got a bounce after this morning's spike down but a-d volume continues to drop to new lows (a-d issues has bounced with price). As long as it continues to look like consolidation after the spike down, confirmed with negative breadth, then look for another leg down to follow.

Jeff Bailey : 7/10/2007 12:10:27 PM

Current OPEN MM Profiles that I've made with stops and targets Link

Current prices in column G. Targets/Stops are based on UNDERLYING stock position for the matching option.

I'm done for the day.

Jane Fox : 7/10/2007 12:06:41 PM

NEW YORK (MarketWatch) -- The euro hit a new high against the dollar on Tuesday, topping $1.37 in mid-morning trading amid concerns that problems in the subprime mortgage loan sector would spread to other parts of the U.S. economy.

Investor perception that official interest rates in other major industrialized nations, already on the rise in some places, would go even higher added to dollar weakness. Nervousness ahead of a speech by Federal Reserve Chairman Ben Bernanke, in which he is expected to discuss inflation, also contributed, traders said.

As a result of these and other factors, the euro has set records against some of its major counterparts this week, reaching a new high Monday against the yen at 168.51 yen. The strength of the euro zone economy compared with the U.S. and increased speculative flows have helped boost demand for the euro in recent weeks

Jeff Bailey : 7/10/2007 11:52:16 AM

Clarification : I use Dorsey/Wright's Bullish % as they no NOT adjust a stock's historical price when a company pays a dividend. For the NASDAQ-100 Bullish % (BPNDX) there are only a handful of stocks that pay much of a dividend.

Here is the BPNDX chart Link

The SIX (6) market phases marked.

Per last night's Market Wrap, the BPNDX is currently "bear correction."

Was it wise to short the QQQQ in early September (9) when this market turned "Bull Confirmed?"

Keene Little : 7/10/2007 11:41:18 AM

So far we've got a nice 3-wave bounce (more sideways for RUT) and if the market drops back down to today's lows then we'll likely see another leg down.

Jane Fox : 7/10/2007 11:34:27 AM

And this is why Gold is strong. Link

Jane Fox : 7/10/2007 11:33:51 AM

Gold is strong again today but I am still on the sidelines until I see the weekly jtHMA turn green and so far it has not. Link

Jane Fox : 7/10/2007 11:27:54 AM

ES tags its PDL but is not able to break it. Link

Jeff Bailey : 7/10/2007 11:27:34 AM

Currency Cross Rates at this Link

Jeff Bailey : 7/10/2007 11:15:26 AM

11:00 Internals found at this Link

Keene Little : 7/10/2007 11:11:36 AM

Gold stocks (XAU) are at a point where you might want to try a couple of puts on the index. It's at resistance at the top of a sideways triangle that's been playing out since June 2006. I'd try some puts here, currently trading 146.60, with a stop at 155 (above the Sept 2006 high which would negate the bearish interpretation of this pattern): Link XAU is not showing the oscillators but a similar chart of the gold bug index (HUI) shows RSI back into overbought which has marked the top of the previous 4 highs over this period.

Jeff Bailey : 7/10/2007 11:01:48 AM

11:00 Market Watch found at this Link

Jeff Bailey : 7/10/2007 10:59:31 AM

I'll get the cross rates in a minute.

Jeff Bailey : 7/10/2007 10:59:19 AM

Global Currencies at this Link

Jeff Bailey : 7/10/2007 10:53:47 AM

EUR/USD 1.374 +0.79% ...

Jeff Bailey : 7/10/2007 10:52:28 AM

Euro Hits New High Against U.S. Dollar ... AP Story Link

Jeff Bailey : 7/10/2007 10:51:20 AM

FTSE -1.07%, DAX -1.54%, CAC-40 -1.41% ...

Jeff Bailey : 7/10/2007 10:48:38 AM

Asian Markets: Link

Jeff Bailey : 7/10/2007 10:40:42 AM

Apple Computer (AAPL) $133.45 +2.39% ... Plans to launch cheaper, Nano-based iPhone in Q4. Reuters Story Link

Jeff Bailey : 7/10/2007 10:37:25 AM

Home Depot (HD) $40.62 +0.96% ... Warns on earnings ... AP Story Link

Jeff Bailey : 7/10/2007 10:36:15 AM

Wal-Mart (WMT) $47.74 -1.56% ...

Jane Fox : 7/10/2007 10:35:53 AM

And Target has been hit. If you did not get filled you need to make a decision if you take profits now or not.

Jeff Bailey : 7/10/2007 10:35:52 AM

Sears Holdings (SHLD) $159.92 -6.72% ... Lowers Earnings Guidance ... AP Story Link

Jane Fox : 7/10/2007 10:34:58 AM

Low so far is 849.70 within 2 ticks of our target.

Jane Fox : 7/10/2007 10:34:29 AM

Stop is now 851.20 so 4 ticks at risk.

Jane Fox : 7/10/2007 10:33:45 AM

Once we break 850.00 I will put the stop to 851.20

Jane Fox : 7/10/2007 10:32:48 AM

Lower stop to 851.60 alert

Jane Fox : 7/10/2007 10:31:47 AM

Target is 850.80 - 1.30 = 849.50

Jane Fox : 7/10/2007 10:31:03 AM

Short at 850.80 and our stop is 852.20.

Jane Fox : 7/10/2007 10:30:08 AM

If triggered short the stop will be 852.20. alert

Jeff Bailey : 7/10/2007 10:29:49 AM

There was something in the British Trade Balance data that brought selling to the European bourses overnight.

Jane Fox : 7/10/2007 10:29:13 AM

ER is now overbot so trying a short reversal. With the AD line at -1458 I like the short side much better than the long.

Marc Eckelberry : 7/10/2007 10:28:51 AM

NQ closes the gap and they sell it. Support is 2002, 2001.25 and 1999.

Jane Fox : 7/10/2007 10:28:21 AM

ER short at 850.80. alert

Jeff Bailey : 7/10/2007 10:27:14 AM

Caterpillar (CAT) $80.77 +1.13% ... only one in Dow's "Big 10" showing a gain.

IBM -0.27%, BA -0.17%, MMM -0.41%, XOM -0.13%, CAT +1.13$, UTX -0.63%, MO -0.46%, AIG -0.82%, JNJ -0.15%, PG -0.09%.

Jane Fox : 7/10/2007 10:26:30 AM

WASHINGTON (MarketWatch) -- Inventories at U.S. wholesalers rose by a modest 0.5% in May despite a drop in petroleum inventories, the Commerce Department reported Tuesday.

Wholesale petroleum inventories fell by 3.4% in May after posting a revised gain of 12% in April, according to the data.

Wholesale sales outpaced inventories in May, the Commerce Department said. Sales rose by 1.3% in May, with petroleum sales leading the way with a 5.3% increase.

Wholesale petroleum sales are 16% above year-ago levels. By contrast, wholesale petroleum inventories are up 0.1% in the past year.

The figures are seasonally adjusted but are not adjusted for price changes.

Keene Little : 7/10/2007 10:23:20 AM

AAPL and GOOG are helping NDX this morning. GOOG continues to chop its way higher towards potential resistance near 550 (currently near 545). I still like the setup for a short on GOOG there. Link

Marc Eckelberry : 7/10/2007 10:22:46 AM

Watch NQ 2008, gap close and pivot. AAPL and GOOG are single handedly holding up the markets for now.

Jeff Bailey : 7/10/2007 10:19:07 AM

Today's Global Economic Calendar at this Link

Bank of Canada raised rates (expected) 25 bp to 4.5%.

Jane Fox : 7/10/2007 10:13:29 AM

Target has been hit so we got some of our loss back.

Jane Fox : 7/10/2007 10:12:43 AM

I will not take a loss on this one.

Jane Fox : 7/10/2007 10:12:54 AM

Long from 851.30 hit a high of 852.40 1 tick shy of our target so stop to b/e.

Jane Fox : 7/10/2007 10:12:06 AM

That last trade that just got us triggered long then just triggered the stop before moving higher is all part of this "game." It happens and you have to be able to shake it off and take the next one that comes along.

Jane Fox : 7/10/2007 10:11:01 AM

Stop is 849.80.

Jane Fox : 7/10/2007 10:10:28 AM

Long from 851.30 target is 851.30 + 1.30 = 852.60 but I think I will bring it down to 851.50. alert

Jeff Bailey : 7/10/2007 10:09:47 AM

Apple Computer (AAPL) alert! $133.53 +2.46% ... new all-time high.

Keene Little : 7/10/2007 10:07:41 AM

The banking index (BIX) has dropped below the June 29 low at 384.58 and that puts it on the bearish price path on the chart I showed in last Thursday's Market Wrap (updated here: Link ). The bearish wave count for this one, looking for a 3rd of a 3rd wave down, calls for a sharp sell off from here. If that happens then the broader market could certainly be dragged a lot lower with it (and could be a heads up that the bearish wave counts on those charts are the correct ones as well). Could get interesting from here.

Jane Fox : 7/10/2007 10:03:24 AM

I will take another long at 851.30 with a stop at 849.30.

Jane Fox : 7/10/2007 10:02:32 AM

Just triggered long at 851.20 and that was obviously not a good move because it is now moving against us and hit our stop at 849.40. Looks like I was just triggered long then just triggered on the stop.

Jeff Bailey : 7/10/2007 10:02:22 AM

10:00 Market Watch found at this Link

Jane Fox : 7/10/2007 10:00:35 AM

I certainly hope we do not get stuck in this trading range for the whole summer. Last summer was an excellent trading season and I was hoping for a similar one this year. Link

Jane Fox : 7/10/2007 9:58:27 AM

We made a high of 851.00 so not long yet but be aware of the 10:00 news. I will be trading through the news but that is up to you.

Jane Fox : 7/10/2007 9:55:25 AM

Stop will be 849.40. alert

Keene Little : 7/10/2007 9:55:13 AM

There's layered support beneath the DOW with first support near 13550. This is the location of the 30-min 100/130 moving averages (and 10-dma) and the top of the parallel channel from July 2006, which price has been cycling around for the past two months. If support is found there then there is the possibility that we'll see another leg up (target 13793) to finish the rally from March which would finish the rally from July 2006. Link

It takes a drop below 13250 for the bears to gain control, with a drop below the 13316 June 29 low as a heads up that the rally probably topped already. Until then I would look at the current pullback as only a correction to the rally. Make your trades on the short side quick ones (take profits early) until we have more proof that the bears are winning the battle.

Jane Fox : 7/10/2007 9:54:47 AM

ER long at 851.20 alert

Jane Fox : 7/10/2007 9:54:26 AM

ER is very overbot so I will be trying a reversal here. AD line is a very bearish at -1698 but ER does make some very nice counter trend moves.

Jane Fox : 7/10/2007 9:26:58 AM

I am looking for Oil to retrace back to about its 23.60% fib level or the magenta 20EMA which I hope will turn the jtHMA daily chart red. Then once the 120 and 60 minute jtHMA charts turn back green I will be taking a USO long. Link

Jane Fox : 7/10/2007 9:24:50 AM

US$ breaks to a new yearly low. Link

Marc Eckelberry : 7/10/2007 9:23:55 AM

Whenever I read "bull confirmed", I add more shorts.

Jane Fox : 7/10/2007 9:23:54 AM

Gold formed and confirmed a reverse H&S and is now testing the neckline of that H&S. Since this market is so influenced by the $ and Oil a H&S pattern holds less importance than on other markets. Link

Jane Fox : 7/10/2007 9:19:49 AM

US $ falling below its PDL should be helping Gold but Crude has also broken its PDL so that is keeping a lid on Gold for now. I am waiting for a pullback in Oil to get long USO, Crude's ETF.

The DAX is falling just like the American index markets. Link

Jane Fox : 7/10/2007 9:15:25 AM

All markets have broken their PDLs and so far look like they have no intention of returning to their respective PDRs any time soon. Link

At 1 p.mEDT attention will turn to a conference from the National Bureau of Economic Research, where Bernanke is scheduled to deliver a talk on inflation. There's the possibility that Bernanke will address the issue of inflation targeting. "While he is unlikely to provide great detail on the status of the FOMC's deliberations, and will be speaking for himself and not the full committee, it is possible that Chairman Bernanke may provide some indication on the direction in which those discussions are evolving," said economists from Barclays Capital.

There's also May wholesale inventories figures due for release. China meanwhile reported a record trade surplus in June.

Marc Eckelberry : 7/10/2007 9:11:14 AM

The cheerleaders are going to get whacked. Look for weeekly pivots.

Keene Little : 7/10/2007 8:37:15 AM

I had mentioned in last night's comments for NDX (see below) that it would take a drop below 1901 to put the bears in the driver's seat but if a decline from here picks up any kind of speed keep an eye on the uptrend line from June 26th, currently near 1955. If that breaks, and especially if it drops below the June 29 high of 1947, then that would be our heads up that something more bearish is happening. Until that happens though, the trend is still up and the coming pullback could be just a small correction of it.

Keene Little : 7/10/2007 8:21:24 AM

It's looking like we'll have a fairly negative start to the day with equity futures currently testing or breaking yesterday's lows. Particularly with NDX right up against resistance and leaving that doji it was a good setup for the short side today. Now we'll see if it amounts to much of a pullback. The bullish wave count calls for a choppy sideways/down move this week (so it may not drop much) and then another rally leg next week (for what could be the final one). So be careful about expecting a big move--it may be a little early for it.

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