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Keene Little : 8/9/2007 10:49:12 PM

Friday's pivot tables: Link and Link

It's looking a little ugly out there this evening. After dropping 387 points today the DOW futures are down another 84 points as I type and that's after rising nearly 20 points off the low. SPX was down harder--more than 44 points and now down another 11 this evening. Who knows what it will be like in the morning but it will obviously be bearish if this continues lower tomorrow.

This DOW chart is the one I showed at the end of the day and suggested the picture turns more immediately bearish if the decline continues on Friday: Link The wave count for a larger A-B-C bounce into next week, in pink, needs the rally to start right away on Friday. It can tolerate a quick spike down to finish the leg down from Wednesday's high, but it needs to turn back up right away. Then there will be a chance for a large rally into next week.

As I had mentioned after the close, if the decline continues, especially if it stair-steps lower towards Monday's low, then it will look like an impulsive decline from Wednesday. The significance of that is it would likely mean we'll only get a small corrective rally into next week which would then set up a 3rd of a 3rd wave down. It would be the GMOAP (GrandMother of All Puts). We should know very early Friday which scenario is playing out.

SPX has the same setup--it's near support in the 1452-1456 area and it could tolerate a brief throw-under of this support but it needs to reverse and rally right away to keep the pink wave count alive. I show a green bullish wave count but frankly give it next to nothing as far as probability. I think the best the bulls can hope for is a big bounce next week to help them get out of positions. But like the rallies before this, where there were virtually no dips to let bulls in and bears out, we could see a complete reversal of that. Link

A continuation lower would likely see a move down to or slightly below Monday's low, a bounce into next week and then a rip snortin' decline to follow that. It's the same pattern for NDX: Link and even for the RUT which has held up better in the decline from Wednesday's high: Link

The fact that the RUT has been holding up better could be a signal that we're going to get the bigger rally into next week (pink count). Otherwise if the selling continues then I suspect the RUT will do some serious catching up to the downside.

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

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Jeff Bailey : 8/9/2007 9:25:07 PM

YM Pivot Matrix for Friday at this Link

Jeff Bailey : 8/9/2007 9:13:43 PM

Covering ES short here. Time for dinner!

Not fun when the Comcast triple play goes out.

Jeff Bailey : 8/9/2007 8:33:39 PM

Sturm Ruger (RGR) $14.55 -2.17% ... May be cause of OLN's recent weakness.

Jeff Bailey : 8/9/2007 6:08:43 PM

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

Note: C > is CLOSE ABOVE, or CLOSE GREATER THAN.

Jeff Bailey : 8/9/2007 6:02:23 PM

Today's Top Stories

BNP Paribas Freezes Security Funds Link

AIG Says Mortgage Delinquencies, Defaults Spreading Link

Home Depot May Have To Lower Price Of HD Supply Unit Link

Jeff Bailey : 8/9/2007 5:47:55 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 8/9/2007 5:39:34 PM

Closing Internals found at this Link

Jeff Bailey : 8/9/2007 4:52:55 PM

Swing trade put establish stop alert ... on the one (1) iShares Russell 2000 IWM Sep $78 Put (IQQ-UZ) should IWM CLOSE above $80.13

Jeff Bailey : 8/9/2007 4:48:28 PM

IWM $77.70 -2.32% ... with a "RED bear" retracement. 0% now placed at 08/03/07 Low close Link

Per 02:28:12 and 02:31:30.

Jeff Bailey : 8/9/2007 4:44:27 PM

Back from Comcast blackout.

Keene Little : 8/9/2007 4:39:38 PM

The DOW dropped right into the close and got a tad lower than its 13305 projection for two equal legs down from yesterday's high. If the bulls can turn it around tomorrow morning then the pink wave count looks good for a strong rally into next week. Link

Two equal legs up from Monday's low would be at 13826, right on top of the 78.6% retracement of the July decline. This is how I'm currently leaning but if it continues to stair-step lower for a retest of Monday's low then it will be possible to call it an impulsive move lower and set up only a smaller bounce next week before really letting go to the downside in a 3rd of a 3rd wave down.

Keene Little : 8/9/2007 3:59:25 PM

Either the pink or the green wave count is how I'm leaning--so looking for a rally to start perhaps after a minor new low (but not needed). Link The risk for the shorts here is that we'll start the day with a gap up.

Keene Little : 8/9/2007 3:55:42 PM

They're trying hard to rally it and break the downtrend line but just can't do it. The setup looks like an early morning low followed by a reversal higher. The bearish picture says it's going to get ugly tomorrow but I'm leaning towards the rally scenario.

Jane Fox : 8/9/2007 3:37:50 PM

Economic Reports out tomorrow include:

8:30a.m. July Import Prices. Expected: +1.0%. Previous: +1.0%.

2:00p.m. Federal Budget Statement. Expected: -$34.5B. Previous: +$27.48B.

Jane Fox : 8/9/2007 3:34:24 PM

Here's a 60 minute look at the DOW. It has retraced 61.80% of the range from August 1st lows to yesterday's highs. The bulls need to show up now or those August 1st lows could be revisited again and if they do I don't think they will hold. Link

Jane Fox : 8/9/2007 3:29:39 PM

Vix making new daily highs and AD volume making new daily low is enough for to keep me on the short side then add a TRIN at 1.31 and your AD line at -1800 and you know who has control of this market.s Link

Keene Little : 8/9/2007 3:21:24 PM

We've got a lot of people still believing this dip is a great buying opportunity. One look at the RUT holding up is enough proof of that. And then assuming we'll get a big rally into next week the bulls will be convinced we're heading to new highs and won't even think about getting of long positions. That's what will set the bull trap.

Keene Little : 8/9/2007 3:17:02 PM

It doesn't mean we haven't found a bottom yet but I don't see enough evidence with bullish divergences to suggest a bottom is in. But SPX back above 1470 could change that.

Keene Little : 8/9/2007 3:13:38 PM

BTW, did you notice the strong sell off in the metals today? Silver is down 4%. All assets will be sold this time. A credit crunch will negatively affect all assets. Last night's chart for gold showed a very bearish setup with multiple 1-2 wave counts to the downside. This calls for some very strong selling from here so if it drops below 665, look out below. Link

Keene Little : 8/9/2007 3:09:43 PM

Now is when you should start paying attention to a possible bottom forming soon. We're coming into the Fib target zone that I think has the greatest chance of finding support. We should get the late-day rally that pops the shorts out again. But if not, then it'll get very ugly into the close. Keep your stops as tight as you dare.

Keene Little : 8/9/2007 2:51:44 PM

I changed the parallel down-channel for SPX slightly to accommodate the highs of the bounces. The wave count for the move down today is getting a little funky looking (not a nice clean impulse) which raises the possibility for a couple of different projections to the downside. Link

If it drops to a new low from here (vs. breaking out of its down-channel) the first downside Fib target is at 1455.56 (and Tuesday's low, and 1456.61 is a 62% retracement of this week's rally). After that is 1452.58 (two equal legs down) and then I get 1443 and then just below 1432. So those are levels worth watching for potential support. But the easiest way might be to simply wait for a break of the downtrend line, retest and then new high for the move. Then get long. Otherwise you might need to test it a couple of times on bounces to see which one sticks.

Keene Little : 8/9/2007 2:45:41 PM

The minimum downside Fib projection has been met at SPX 1464-1465 so any rally back above 1476 would be an indication we've probably bottomed for the day.

Jeff Bailey : 8/9/2007 2:31:30 PM

Here's the RUT.X montage from 10:58:22, but for right now, get that chart on the left in your head. Link

Got it?

Ok, now the technique I've taught many over the years. We ARE going to move that "blue" close to the RECENT IWM close.

IWM's 03/05/07 close was $75.17. We're moving it to 08/03/07 close of $75.35.

What do many Fib traders consider a "normal" retracement?

Jeff Bailey : 8/9/2007 2:28:12 PM

OK IWM Bears ... are you ready?

Jane Fox : 8/9/2007 2:18:32 PM

NEW YORK (MarketWatch) -- Shares of U.S. financial stocks tumbled on Thursday on a report of liquidations at least one Goldman Sachs hedge fund, and, French bank BNP Paribas said that it will stop valuing three of its funds and is suspending investor withdrawals because of U.S. subprime-mortgage woes.

Jeff Bailey : 8/9/2007 2:07:54 PM

DIA $134.66 -1.38%

IWM $78.35 -1.50% ...

Keene Little : 8/9/2007 2:04:34 PM

Good summation Jeff (your 2:01). That's the challenge when trying to decide which to use. I might move my pivot tables over to cash instead of the futures but I know we have a lot of futures traders who really like the futures pivot tables.

Keene Little : 8/9/2007 2:02:49 PM

SPX has poked its head above the downtrend line from yesterday so it could set up a bigger bounce from here if it doesn't immediately drop lower. A drop back down to 1471 for a retest and then rally would be bullish at least for this afternoon. A drop back below 1470 would suggest it was just a head fake break.

Jeff Bailey : 8/9/2007 2:01:37 PM

Educational: QCharts / Pivot Calculations ... YM DAILY Pivots from ALL SESSIONS when overnight session exceeds actual regular session Link

YM DAILY Pivots with ALL SESSIONS turned off (reflecting cash session) Link

QCharts traders can either "turn on" or "turn off" extended sessions.

However, DAILY and WEEKLY Pivot Levels may be much different when one day, or week finds an extreme EXTENDED session trade. A trade that MAY never be reflected in the cash market. Not how light, perhaps meaningless extended session volume is.

Jane Fox : 8/9/2007 1:41:28 PM

Here is an update on the Q long I have using the jtHMA charts. Notice how the 60 minute charts have turned back red but the 120 has not yet so I am still long (from 48.15). Link

Keene Little : 8/9/2007 1:26:16 PM

Two equal legs down for the DOW from yesterday's high is at 13305. It doesn't mean we'll get there but if we do then be looking for an opportunity to exit your shorts and try the long side. We could get an outstanding opportunity to play the long side into next week--a move back up to the 13800 level would give us a nice 500-point move.

Jeff Bailey : 8/9/2007 1:20:28 PM

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

Jeff Bailey : 8/9/2007 1:14:29 PM

01:00 Internals found at this Link

Keene Little : 8/9/2007 1:12:09 PM

Here's an update to the RUT 60-min chart where I show two possibilities, both bearish. One is that the bounce is over and we'll now head for new lows (with some very strong selling behind it), which is the dark red wave count. The pink wave count shows a pullback, a rally into next week and then the start of the next big leg down. At the curent moment I'm favoring the pink count. Link

Two equal legs down from yesterday's high is at 772 and would have it finding support at the uptrend line from March 2003 through the July 2006 low. Then maybe a big bounce up next week to the broken uptrend line from August 2006 near 820-825 before topping out and heading south for the winter, literally.

Jane Fox : 8/9/2007 1:09:55 PM

SPX has succumbed to the resistance zone at 1490-1505. Link

Jane Fox : 8/9/2007 1:08:26 PM

The DOW is losing its 13500 support. Link

Jane Fox : 8/9/2007 1:06:28 PM

I have found if the VIX and AD volume are not in sync (VIX making new daily lows and the AD volume making new daily lows as well), like they were this morning, the VIX will be able to hold up price and even allow rallies to a point then the AD volume will take over and the VIX will eventually follow the AD volume. This of course is with an AD line very bearish as well.

Jeff Bailey : 8/9/2007 1:03:07 PM

01:00 Market Watch found at this Link

Keene Little : 8/9/2007 1:01:06 PM

I've received a couple of questions about the RUT and why it seems to be holding up better than the others (as are the techs). Two things: One, I believe we're in a 2nd wave correction (a correction of the decline from the July high). As such its personality is to get the bulls all excited about the buying opportunity at hand. That supports the idea that they would therefore buy the techs and small caps.

Two, the RUT was more deeply oversold than the others and it makes sense to me that they'd see a little more buying pressure from shorts covering. So the combination would hold them up better and that's exactly what we're seeing. They should lead to the downside again but that may not happen until after opex week.

Jeff Bailey : 8/9/2007 12:59:45 PM

As ES near's a downside target (DAILY S2), I'm thinking "need RUT/ER" weakness to get it below.

Jeff Bailey : 8/9/2007 12:56:40 PM

Educational Keene ... I look at them EVERY day. Now look at the Pivot levels you gave traders for the YM on 7/31/07 (using overnight low of 13,253 vs. 07/30/07 regular session low) Link

Now look at your AUGUST Monthly Pivot, using that very extended session low of 13,253.

Now understand why it appears futures are pushed around, or ... manipulated relative to the CASH market.

Jeff Bailey : 8/9/2007 12:42:40 PM

RUT.X 789.87 -0.72% ... Back under DAILY Pivot.

Pivot Power Ranking -3 +2 -1= -2.

Jeff Bailey : 8/9/2007 12:41:27 PM

I can only think the weakness in OLN is somehow related to the $100-$150 million credit facility. Where under current bond market conditions, the "floating rate" is viewed as a negative.

Jeff Bailey : 8/9/2007 12:36:55 PM

CRB Index (CRY) 311.47 -0.50% ...

Jeff Bailey : 8/9/2007 12:35:48 PM

OLN released its 10-Q yesterday Link

Keene Little : 8/9/2007 12:35:14 PM

SPX ran sideways/up into its downtrend line again from yesterday's high and just dropped down. If we've got lower to go then it should drop from here.

Jeff Bailey : 8/9/2007 12:33:53 PM

Olin Corp. (OLN) alert! $17.60 -9.13% ...

Keene Little : 8/9/2007 12:32:15 PM

Jeff, take a look at the daily charts of the futures--the highs and lows reflect all-hours.

Jeff Bailey : 8/9/2007 12:31:52 PM

Now I'm moving my ES short stop to break-even. 1,486.75

Jeff Bailey : 8/9/2007 12:27:07 PM

Keene (12:20:54) ... You misunderstood my question. As I've emailed you in the past, the futures exchanges give us the official CLOSE (charting services are not very reliable). My question is the HIGHs and LOWs of REGULAR session.

Also ... QCharts does NOT use the extended session HIGH/LOW close, unless you click "all sessions" at the top of the screen!

Try it on a day when the "day before" the ES or any futures contract traded higher/lower than regular session.

You'll see DIFFERENT DAILY/WEEKLY pivot levels then.

Jeff Bailey : 8/9/2007 12:21:31 PM

INDU Pivot Power Score at 13,531.45 ... MONTHLY +3, WEEKLY +2 , Daily -1. +3 + 2 -1 = +4.

Keene Little : 8/9/2007 12:20:54 PM

Jeff, good point on your 12:02 question about when to take the closing prices for futures. I've gone back and forth on that one and for a while was using the 4:00 close so that the futures pivots would more closely match the cash pivots. This seemed to be especially true when we'd get a big after-hours move in the futures (or premarket for that matter). For YM it became even more confusing as to whether to use the high or low price before 9:30 open or from the 8:20 open.

But the daily pivots on QCharts uses the daily high, low and closing prices and those prices are based on all-hours and so that's what I decided to go with and have been using them for some time now. It's not necessarily the best way but it's at least consistent.

Jeff Bailey : 8/9/2007 12:19:42 PM

SPX Pivot Power score at 1,478.82 ... MONTHLY -3, WEEKLY +2, Daily -1. -3 + 2 - 1 = -2.

Jeff Bailey : 8/9/2007 12:16:19 PM

One item I've been asked about regarding the pivots is "what do they say about bullish/bearish?"

I think of it like this.

MONTHLY is more powerful (longer-term prices, trends, levels more powerful than shorter-term).

WEEKLY is next power level, or ranking.

Daily is next.

Then I look at a chart.

RUT is below MONTHLY Pivot, so maybe it gets a power score of -3.

RUT is above WEEKLY Pivot, so power score +2.

RUT 794.25 is currently above DAILY Pivot (792.54), so power score +1.

-3 + 2 + 1 = 0.

Jeff Bailey : 8/9/2007 12:09:54 PM

Have to use rather tight stops today on futures trades. A lot of room to various risk levels within the pivots. Even the daily. ER/RUT about 7 to 11 from current trade.

Jeff Bailey : 8/9/2007 12:06:53 PM

And DAILY Pivot (792.54) ... rather bullish bias holding.

Jeff Bailey : 8/9/2007 12:05:46 PM

RUT.X 794.24 -0.17% ... back above WEEKLY 19.1% ...

Keene Little : 8/9/2007 12:02:25 PM

SPX 1453 is a good downside target and my stop is now just above SPX 1486, the last bounce high. That would be confirmation of a break of the downtrend from yesterday's high. I'll head for the sidelines if stopped out.

Jeff Bailey : 8/9/2007 12:02:17 PM

Keene (11:54:01) ... One question I and many futures traders have had is why you use post-floor trade highs and lows for your pivot levels?

That is, if the cash is the focus, and it trades 09:30 AM to either 04:00, or 04:15 PM EDT, then doesn't it make sense to utilize ES futures regular session high/lows?

Jeff Bailey : 8/9/2007 11:59:06 AM

RUT.X ... here too a 10-minute interval chart. WEEKLY/MONTHLY Pivot retracement Link

Jeff Bailey : 8/9/2007 11:56:45 AM

Keene! Thanks for the explanation. Target is 1,453? Stop ... 1,490?

Keene Little : 8/9/2007 11:54:01 AM

Jeff, as to your 11:26 comment, my pattern work is done primarily on the cash indices because I've found them to be a little more accurate than the futures, particularly for the short term patterns. Futures are too easily manipulated (not that cash isn't but it seems the manipulation starts with the futures). This is what I'm looking at for SPX this morning: Link

Because of the overlapping moves on the NDX I'm shifting my thoughts to the idea that we're in a larger corrective pattern (instead of a 1-2, 1-2 wave count down as SPX would support but not NDX). So another leg down from here for wave-C (to finish a larger degree b-wave as shown on last night's 60-min chart, in pink: Link ) could set up a rally into next week. Two equal legs down from yesterday's high is at 1452.58, just below the key level of 1455 and the uptrend line from July 2006. I'd definitely consider a long play from there.

Jeff Bailey : 8/9/2007 11:44:19 AM

Say ... 0.81.

Jeff Bailey : 8/9/2007 11:43:54 AM

"PPT" alert would be somewhere below 1.00.

Jeff Bailey : 8/9/2007 11:43:07 AM

TRIN's session low has been ... 1.00. (not 1.11)

Jeff Bailey : 8/9/2007 11:42:20 AM

Could become a trend day lower ...

Jeff Bailey : 8/9/2007 11:41:43 AM

TRINQ alert! 1.05

Jeff Bailey : 8/9/2007 11:27:18 AM

I wasn't overly enthralled with that buy program at these levels though.

Jeff Bailey : 8/9/2007 11:26:05 AM

Not sure about Keene, but my ES target(s) are DAILY S2, or juust above WEEKLY R1 (regular session derived pivot levels of course).

Jeff Bailey : 8/9/2007 11:23:12 AM

SPX 1,481.85 -1.00% ....

Jeff Bailey : 8/9/2007 11:21:03 AM

11:00 Internals found at this Link

Note: It would currently take a CLOSING session measure of 24.00% for the NASDAQ's 5-day NH/NL ratio to reverse back up into column of X.

Yesterday's Internals Link

Keene Little : 8/9/2007 11:18:17 AM

A downtrend line from yesterday's two afternoon highs is where SPX just stopped so I'd say it's a good place to be short with your stop just above.

Keene Little : 8/9/2007 11:15:51 AM

It's still chopping its way higher. Because of the choppy climb I think it's a correction and we'll see the market head lower again but they're obviously not going to make it easy to get and stay short. But I'd rather be short than long here.

Jeff Bailey : 8/9/2007 11:05:44 AM

Permian Basin Trust (PBT) $13.78 -0.36% ...

Jeff Bailey : 8/9/2007 11:05:08 AM

Had been running +70 last few weeks.

Jeff Bailey : 8/9/2007 11:04:52 AM

Weekly Nat Gas Storage Table Link ... build of 42 BCF.

Jeff Bailey : 8/9/2007 11:04:01 AM

Getting an upside alert I had set on December Nat. Gas at $8.39.

Jeff Bailey : 8/9/2007 11:03:28 AM

11:00 Market Watch found at this Link

Keene Little : 8/9/2007 11:01:36 AM

Because NDX rallied up above yesterday afternoon's high, that index is the one giving me the feeling we're in some kind of larger corrective wave structure. It could still pull back sharply to finish the pullback from yesterday's high but then it could be setting up a large c-wave rally into next week. In other words the pre-opex Thursday dive might very well be setting us up for the rally into opex week. Ideally we'll see another leg down (below this morning's lows) to set up an opportunity to trade the long side.

Jeff Bailey : 8/9/2007 11:00:11 AM

BIX.X is 3-points below its MONTHLY Pivot.

Jeff Bailey : 8/9/2007 10:59:41 AM

SPX ... 8-points below its MONTHLY Pivot.

Jeff Bailey : 8/9/2007 10:59:22 AM

OEX ... juuuust below its MONTHLY Pivot.

Jeff Bailey : 8/9/2007 10:59:05 AM

INDU current ABOVE MONTHLY Pivot.

Jeff Bailey : 8/9/2007 10:58:22 AM

RUT.X 791.21 -0.55% ... two chart montage conventional retracement (left) and MONTHLY Pivot Retracement (right) Link

Keene Little : 8/9/2007 10:50:10 AM

We've got the break of the bear flag pattern so you want to be short against the bounce high. That's a lot of points to a stop level but unfortunately with these wild swings it's the only way to avoid getting whipsawed.

Jane Fox : 8/9/2007 10:45:38 AM

However, as long as the AD volume is making new daily lows, which it is doing as I type, the VIX will never have enough influence to let the bulls have their way and make rallies stick.

Keene Little : 8/9/2007 10:42:53 AM

If the bounce off this morning's low is another, smaller degree, 2nd wave correction, then the next leg down is going to be a screamer. If on the other hand we're just in the middle of a choppy price pattern that will eventually head higher (into opex week) then we're just going to see a lot of whipsaw price action. But the possibility for the screamer means it's worth trying a short on a break of this bounce.

Jane Fox : 8/9/2007 10:39:27 AM

AD volume is making new daily lows but so is the VIX and the markets rally. This just goes to show you how important it is to watch the VIX.

Jeff Bailey : 8/9/2007 10:39:12 AM

PPT or SPT (Surge Protection Team)

Jeff Bailey : 8/9/2007 10:38:25 AM

Looking "squared up" ... QQQQ -0.08% ... RUT -0.17% ...

Jeff Bailey : 8/9/2007 10:36:48 AM

Johnson & Johnson (JNJ) $62.38 -0.17% ... just off post-profile high of $62.60.

Jeff Bailey : 8/9/2007 10:36:04 AM

HD -5.00%, C -3.00% and XOM -1.86% are Dow weakness.

AIG +0.63%, IBM +0.63% and MCD +0.71% are strength.

Keene Little : 8/9/2007 10:35:11 AM

The other high flyer that we've been following, GOOG, could be finishing up its bounce. The last chart I showed on Friday, August 3rd showed an expectation for a little more bounce before its correction could be called complete: Link

Today's chart shows the 2nd leg up in its bounce and two equal legs up is at 524.53 so that level has been tagged. It's looking like it could press a little higher to the 50% retracement at 528.73. And a 50% move into its gap is near 530. But the internal pattern of the rally shows that the bounce could be completing at any time and this one looks like a good setup for a short play: Link

Jeff Bailey : 8/9/2007 10:33:06 AM

QQQQ $48.85 +0.02% ... gets green.

Jeff Bailey : 8/9/2007 10:31:49 AM

Stock Trader's Almanac ... (next week) ... One "bear head" for Monday, then "bull heads" on Tuesday, Wednesday and Thursday. Friday is August expiration.

Jane Fox : 8/9/2007 10:31:55 AM

As long as the VIX is hugging its daily lows the bears will not be running for a touchdown and we will have very choppy markets. Try not to be collateral damage. Link

Jeff Bailey : 8/9/2007 10:29:22 AM

American Intl. Group (AIG) $66.59 +0.22% ... #3 weighting (or it was when Watch List constructed) in XLF $34.17 -1.66% ...

Jeff Bailey : 8/9/2007 10:25:23 AM

RUT.X 789.41 -0.78% ... at 10:12-10:13 AM EDT, RUT.X was trading 787.59.

Keene Little : 8/9/2007 10:25:11 AM

The bounce off this morning's low is looking like a bear flag. Use an uptrend line along the lows to see when it breaks as an opportunity to short it and use the bounce high as your stop level (which means wider than normal).

Keene Little : 8/9/2007 10:21:18 AM

Here's a stock that's still bullish--CME rallied above its key level of 576 this week which put it in the bullish wave count (this chart was posted last Friday: Link ). CME is now nearing its broken uptrend line from August 2005 at 607 and the pattern calls for a pullback and then a final high, perhaps up to 620 by the end of the month before its rally can be called complete: Link

Jeff Bailey : 8/9/2007 10:20:57 AM

10:17 Market Watch found at this Link

Jeff Bailey : 8/9/2007 10:18:40 AM

Nice buy program ...

Jeff Bailey : 8/9/2007 10:14:05 AM

Pacholder High Yield (PHF) $8.95 -3.24% ... has traded as low as $8.40.

Jeff Bailey : 8/9/2007 10:13:14 AM

No stop for now on the IQQ-UZ. Target $73.00 (depending on Market Conditions) ...

Jeff Bailey : 8/9/2007 10:12:03 AM

Swing trade put alert! ... for one (1) of the iShares Russell 2000 IWM Sep $78 Puts (IQQ-UZ) at the offer of $3.25.

IWM $78.37 -1.49% ...

Jane Fox : 8/9/2007 10:11:31 AM

A short trades have much better odds of winning today than longs. Link

Jane Fox : 8/9/2007 10:05:21 AM

AD volume is very bearish but the VIX is not supporting it so we should be getting some really good chop now. Notice the TRIN is making new daily lows as well. Link

Keene Little : 8/9/2007 10:00:41 AM

As I showed on my SPX 60-min chart, 1455 is a key level. It's the previous low in the bounce off Monday's low and close to the uptrend line from July 2006. A drop back below that level would spell trouble for the bulls. It's also a level where it will surely bounce so if this breaks down further then that would be the next downside target (not necessarily today but one never knows).

Jane Fox : 8/9/2007 10:00:13 AM

I bot some Q calls yesterday when the QQQQ was at 48.15 based on these charts and I will sell those calls once the 120 minute jtHMA charts turns back red. So far I am OK. Link

Keene Little : 8/9/2007 9:50:33 AM

As sharp and ugly as this morning's drop is, you may want to take some profits off the table if you're short from yesterday's high. Two equal legs down is at SPX 1470.57 which has been tagged. If we're going to be stuck in a larger upward correction then we could see a big rally from here, big decline, bigger rally, bigger decline, etc. Take profits when they're offered and don't get buyer's or seller's remorse. You can't go broke taking a profit.

Jane Fox : 8/9/2007 9:49:22 AM

SPX has lost 1490. Link

Jane Fox : 8/9/2007 9:48:42 AM

The DOW is testing support at 13500 again. Link

Jeff Bailey : 8/9/2007 9:48:35 AM

AIG Earnings Press Release Link

Jeff Bailey : 8/9/2007 9:46:56 AM

American Intl. Group (AIG) $64.12 -3.54% ... #9 weighting in Dow Industrials.

Jeff Bailey : 8/9/2007 9:45:45 AM

Top Story: AIG Says Mortgage Delinquencies Spreading ... Reuters Story Link

Jane Fox : 8/9/2007 9:44:52 AM

DOW is down 165 points as I type.

Jane Fox : 8/9/2007 9:44:00 AM

TRIN is supporting the AD line this morning at 1.49 and VIX to new daily highs. The bears have the ball.

Jane Fox : 8/9/2007 9:42:59 AM

Oh my goodness AD Line is now -2033.

Jane Fox : 8/9/2007 9:33:06 AM

AD line is -849 and AD volume is below 0.

Jane Fox : 8/9/2007 9:27:07 AM

It looks like Crude is heading back to its support at $67.00/bl Link

Jane Fox : 8/9/2007 9:13:41 AM

The DAX has left its PDL in the dust and the is not bullish for its American counterparts.

Gold and US$ are in sync assisted by the weak Oil. Oil and Gold move in tandem mostly. Link

Keene Little : 8/9/2007 9:09:57 AM

Tab, the only problem with expecting the market to do OK with strong earnings is that it tends not to be a good predictor. Take a look at what the stock market did in the early 1970's while earnings continued to improve: Link

Jane Fox : 8/9/2007 9:08:35 AM

WASHINGTON (MarketWatch) -- First-time filings for state unemployment benefits inched up for the second consecutive week, rising to their highest level since the end of June, the Labor Department reported Thursday.

In the week ending Aug. 4, initial claims rose by 7,000 to 316,000, the highest since June 30.

The four-week average of initial claims also rose in the latest week, by 1,750, to 307,750.

The average is sometimes considered a better indicator because it smoothes out one-time events like strikes or weather.

At the same time, the number of people continuing to collect unemployment benefits continued to rise, increasing by 39,000 to 2.55 million in the week ending July 28. It's the highest since July 7.

Tab Gilles : 8/9/2007 9:03:13 AM

We will see the credit story unwind for several weeks and more stories like Paribas...just look at yesterday afternoon on the Goldman rumour. But while the focus is on the credit markets the oter story has been the strong earnings and global economy. John Chambers of Cisco calling this the "strongest" he's ever seen. My take is that the Fed is going to let the credit market problems work itself out. If it it does get out of control...they'll step in and do what they have to do.

But for now we will get these huge up and down days as volatility rises.

Jane Fox : 8/9/2007 9:02:04 AM

Large cap markets have all breached their PDLs and it certainly looks like the bears will the ball going into the Thursday intraday session. Link

Keene Little : 8/9/2007 8:49:26 AM

Apparently the news about BNP Paribas SA, the largest bank in France, halting withdrawals from 3 of their investment funds, has the markets selling off. The bank says they need time to "fairly" value their holdings due to the subprime mortgage problem. As I had mentioned in last night's Wrap, the credit crunch has only just begun as the downgrades are just kicking into gear for most of these funds full of credit derivatives and derivatives of those derivatives.

The bulls on TV want you to think it's all contained and won't spread. As I had mentioned last night, this problem didn't suddenly go away this week. The bounce in the market is very likely just a correction of the decline. It could develop into a larger correction which is why we'll play this one leg at a time, but be careful when listening to the bulls.

Tab Gilles : 8/9/2007 8:46:31 AM

I think I need some Dramamine?

The announcement by BNP Paribas sent European stock markets lower and stirred concerns that problems among subprime borrowers, those with weak credit, would further roil Wall Street. While stocks had managed to rally this week, investors have seen wide swings in stocks as investors have worried about not only subprime markets but also about the tightening of credit.

Keene Little : 8/9/2007 8:25:08 AM

It looks like the setup for an immediate and strong decline out of gates this morning is happening. Equity futures are down hard (up off their lows though) and short is the place to be. If you shorted yesterday's high you'll now want to lower your stop to just above the high of the bounce into the close. This should be a good short but we'll take it one leg at a time until the larger pattern clears up a little.

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