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Keene Little : 8/16/2007 10:30:54 PM

Friday's pivot tables: Link and Link

After the very strong recovery off Thursday's lows the DOW and SPX remain within their down-channels but close to the top of them (the downtrend line from the high on August 8th). Those levels are near 12920 and 1420 so any break above those levels would be bullish. But until they break it's worth shorting against those levels because the wave pattern looks like it has some work to do on the downside (if it breaks the downtrend line it will make for a very strange wave pattern).
DOW 60-min: Link
SPX 60-min: Link

NDX didn't get quite the same attention in this afternoon's bounce and as can be seen on its 60-min chart it made it back up near the mid line of its down-channel, currently near 1851: Link It too looks like it needs more downside work in its wave pattern and until proven otherwise (with a rally out of its down-channel) that's what I continue to expect. Today's bounce had it closing right on its 200-dma and left more of a long-legged spinning doji (indecision).

The RUT's wave pattern, and its performance today, is the one that keeps me thinking something more bullish could develop out of this bounce so bears can not afford to get complacent here. Right now there's a cluster of Fibs in the 770-778 area, plus a broken uptrend line from March 2003 near 773. Two equal legs up in its bounce off Thursday's low is just under 771. The top of a parallel down-channel based on the trend line along the two lows since August 10th is near 770: Link

A break above 780 would have me feeling more bullish about the RUT but right now I see many reasons for price to fail below that level so watch for an opportunity, as with the others, to short the market early on Friday.

OI Technical Staff : 8/16/2007 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The Market Monitor has been archived.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 : 8/16/2007 6:12:53 PM

From Friday's Close ...

INDU -2.97%
OEX -2.56%
NDX -4.11%
SPX -2.91%
RUT -2.53%

Jeff Bailey : 8/16/2007 5:49:50 PM

See you tomorrow! I won't be up late tonight. Did that last night, executed plan today based on the technicals discussed and information at hand.

Jeff Bailey : 8/16/2007 5:42:10 PM

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

Trade Blotter of CLOSED Trades Link (Today's dates in blue)

Jeff Bailey : 8/16/2007 5:32:26 PM

Closing Internals found at this Link

Jeff Bailey : 8/16/2007 5:15:43 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 8/16/2007 5:15:38 PM

XLF 1-minute interval chart Link

Might make sense ... "I can't take it anymore, I need out!" says the client to the specialist.

"Man, this is a tough market, tell you what. Liquidity is very poor right now. How much you got?" asks the specialist.

"1.0 million shares," says the client.

"Good gravy! You can't expect me to take that at $32.50. Too much risk. Tell you what, let me shop around, see what I can do."

Specialist calls client back at 12:15. "Tell you what. Market's soft and it is headed lower. I've got a buyer for you, but they're not willing to take it for more than $31.75."

"A $#&*%," says the client, "you can have it all! When you're done, give me a bid on 13-week notes!"

Jeff Bailey : 8/16/2007 4:47:53 PM

Oooooeeee ... might be capitulation ... check out XLF's on 1-minute interval. See that 1.06 million shares at 01:09 PM EDT? That's probably the beginning of the 1.2 million blocked in extended. Ooooeee ... look where it came from!

The 6/14/06 low CLOSE and MONTHLY S1 overlap!

Jeff Bailey : 8/16/2007 4:41:18 PM

I agree Jim (04:08:42) ... have to ... see 03:55:04.

Jeff Bailey : 8/16/2007 4:33:47 PM

1.2 million XLF shares blocked at $31.90 in extended.

Tab Gilles : 8/16/2007 4:21:39 PM

Jim...agree with your OpEx opinion. CNBC is already calling this a capitulation day...I'm not sure, yes we're close...but not yet.

Interesting today listening to Rick Santelli in the pits talking with traders and then Larry Kudlow and Steve Liesman giving their economists views and theories.

Jeff Bailey : 8/16/2007 4:12:40 PM

Oh gosh! I type $1.50 instead of $1.40 as my TARGET for XLF-HF. They traded there, but I can only take credit for $1.40 in trade blotter.

Jim Brown : 8/16/2007 4:09:45 PM

HPQ post blowout quarter with revenue up +16%

Tab Gilles : 8/16/2007 4:09:37 PM

WOW! What a ride today.... HPQ reported 71 cents vs. 66 cents

Jeff Bailey : 8/16/2007 4:09:01 PM

PPT ... we'll never know. Maybe "smart money" assessed possibility of a Fed rate cut?

Jim Brown : 8/16/2007 4:08:42 PM

I believe the rebound was a combination of OpEx forcing shorts to close positions, positive comments on various financials and the Dow and S&P hitting their 10% correction level. Being down 6 straight days we were simply too oversold heading into OpEx.

Jeff Bailey : 8/16/2007 4:05:53 PM

Oh my what a day for MM traders.

Keene Little : 8/16/2007 4:04:42 PM

Unless that was a PPT save today, if the rally was based on rumors of an emergency rate cut and the rate cut doesn't happen, look out below. Regardless, it was certainly a "in your face" rally by the bulls to the bears.

Jeff Bailey : 8/16/2007 4:04:25 PM

Swing trade call filled alert ... on the two (2) Financial Select SPDRs XLF Aug $32 Calls (XLF-HF) at $1.40!

Jim Brown : 8/16/2007 4:01:35 PM

With the S&P options expiring on the opening print on Friday the market makers for S&P options have got to be pulling their hair out. It looked like they were going to peg 1390, then 1400, then the short covering took off. Now they are stuck at 1415. Tomorrow's open will be hugely volatile.

Jim Brown : 8/16/2007 3:57:33 PM

Unbelievably the Dow has recovered from a -343 point drop to positive territory before the close. Simply amazing.

Jeff Bailey : 8/16/2007 3:56:43 PM

Bear Stearns (BSC) alert! $118.03 +14.39% ... surging to the close.

Jeff Bailey : 8/16/2007 3:55:17 PM

YM alert 12,890

Jeff Bailey : 8/16/2007 3:55:04 PM

XLF Options Montage at this Link

VIX has been rising like a rocket, so more than likely, the $34 Call open interest is NAKED.

A potential rate cut by the Fed, may get a GAP ABOVE that OI, create a "burst of buying," and create a pretty good pay day for $33 calls.

Is it worth $90.00?

Jim Brown : 8/16/2007 3:52:35 PM

The swings on the Russell futures have been huge today and very tradable. 764 down to 738 for 26 points, 738 to 767 for 29 points, 767 to 745 for 22 points and the current rebound from 745 to 767, +22 points and growing. This has been a very profitable day for ER traders.

Tab Gilles : 8/16/2007 3:52:05 PM

$NDX Link

$SPX Link

$RUT Link

We could see lower levels tested at the close tomorrow going into the weekend selling.

Keene Little : 8/16/2007 3:51:49 PM

The parallel down-channels are still in effect for the DOW and SPX as shown here, and the only question in my mind is whether today's bounce is a smaller or larger degree 4th wave correction. It matters for the next low since it could be the end of the larger degree 1st wave down and set up a larger rally into next week. Or it could set up one more correction before putting in the final low early next week for that 1st wave completion. A break of the downtrend line near SPX 1420 and DOW 12930 would signify we're already into the larger upside correction. DOW 60-min: Link and SPX 60-min: Link

Jeff Bailey : 8/16/2007 3:45:28 PM

SOMEBODY's been buying the heck out of these today. BIG spec? Or somebody that knows something?

Jeff Bailey : 8/16/2007 3:44:25 PM

If the Fed does act overnight, or early tomorrow morning with a RATE CUT, look to SELL those CALLS within 30-minute of the announcement.

Jeff Bailey : 8/16/2007 3:42:53 PM

Swing trade speculative call alert ... for two (2) of the Select Financial SPDRs XLF Aug $32 Calls (XLF-HF) at the offer of $0.40.

XLF $33.00. Target is $1.50 for the options.

Jeff Bailey : 8/16/2007 3:36:53 PM

BIX.X 361.23 +4.35% ... sticks its head above WEEKLY Pivot. Not enough time for a BOLD move. However, one test for any type of conviction is for BIX.X to stay above at the CLOSE.

Keene Little : 8/16/2007 3:36:40 PM

If today's bounce develops into a larger 3-wave move back up towards the top of the down-channel from last week, SPX has upside targets at 1410.53 (two equal legs up) up to just shy of 1420 (the downtrend line). That's why reversing long if stopped out of your short play could work for a few points before reversing short again. Link

Tab Gilles : 8/16/2007 3:18:52 PM

SPX Link

NDX Link

$NAHGH 10-week ema Link

$NALOW Link Link

Jeff Bailey : 8/16/2007 3:16:51 PM

03:00 Internals found at this Link

Tab Gilles : 8/16/2007 3:13:25 PM

Here we go again! Like clock work...

Keene Little : 8/16/2007 3:09:33 PM

If you're short and want to tighten up your stop just a wee bit, use the high at 2:45 as your stop level (just above it). If we've got another low in front of us then that high should not be violated.

Jeff Bailey : 8/16/2007 3:06:42 PM

Roughly 1/3 of NYSE at new lows.

Jeff Bailey : 8/16/2007 3:04:20 PM

It may not have been enough ... IRX down 43 bp at 3.70%. While "off its lows," might not have been enough.

Jeff Bailey : 8/16/2007 3:03:18 PM

YM long stop alert 12,708

Jeff Bailey : 8/16/2007 3:02:40 PM

03:00 Market Watch found at this Link

Jeff Bailey : 8/16/2007 2:52:28 PM

YM Long alert here at 12,745. Stop goes very tight at 12,708. Target 12,890

Keene Little : 8/16/2007 2:46:08 PM

It's certainly volatile. RUT has given up 12 points since tagging its downtrend line.

Keene Little : 8/16/2007 2:43:27 PM

If stopped out of your short play with a new high for this bounce I'd consider reversing long for a trade into the close. You stand the chance of being whipsawed by that kind of move but a short covering rally into the close could be worth it. Stay short until then though.

Keene Little : 8/16/2007 2:32:58 PM

DOW and SPX just broke their uptrend lines and RUT has pulled back from its downtrend line. Short is the place to be against the bounce highs.

Keene Little : 8/16/2007 2:24:42 PM

As with all corrections, one of the best ways to short them, like yesterday, is to simply wait for a break of the uptrend line for the correction. So a break of the uptrend line along the lows of today's bounce would be a sell signal.

Keene Little : 8/16/2007 2:23:23 PM

We all know bear market rallies tend to be sharp but short lived. The challenge is figuring out which bounce is a correction to the decline and which one is the start of something bigger to the upside. Today's bounce is clearly of the strong and sharp variety but I'm sticking to my opinion (for now) that it's just a correction of today's decline. It should roll back over and therefore should be shorted. The hard part is finding the top.

Jeff Bailey : 8/16/2007 2:21:50 PM

BIX.X Alert! 359.51 ... Juuuuust under WEEKLY Pivot here. Did test WEEKLY S1 at the open, came close as we readied to close out IWM put. If the Fed is on track and market likes it, should see a BOLD move above the pivot.

Jim Brown : 8/16/2007 2:19:17 PM

Should be about time for some short covering for those with August puts. It would be very interesting to see the Dow go positive after a -330 drop. Russell futures are already positive by +6.80. That is a clear sign of buyers entering the market.

Jane Fox : 8/16/2007 2:18:52 PM

Buyers have come back to the market and ES is now tagging its daily highs. ER has punched through to make new daily highs. Link

Keene Little : 8/16/2007 2:18:12 PM

We've got a nice recovery going and the RUT has now made it up to its downtrend line from August 13th near 763. If it can rally above this then we've got a trend change, even if it will only be for some kind of larger upward correction.

Jeff Bailey : 8/16/2007 2:08:13 PM

Canada Finance Minister Moves To Reassure Markets, Says Econ, Financial System Strong

DJ (partial) - Canadian Finance Minister Jim Flaherty took the unusual step of reassuring investors Thursday as the benchmark stock index posted triple-digit losses. He acknowledged "distinct" pressures" in the asset-backed commercial paper market but stressed that the financial system was well-capitalized and the broad economy strong. "We must be clear that the fundamentals in our economy are very strong - that includes corporate balance sheets and household savings - and that our financial system remains very well capitalized," Flaherty said in a statement posted on the Finance Department's Web site. At 1:00 p.m. EDT, the S&P/TSX Composite Index had plunged 558.2 points or 4.3%. The Canadian market's woes began Monday in the wake of turmoil in the asset-backed commercial paper market, sparked by news Monday that Coventree Inc. (COF.T) was unable to sell the debt to investors and were unable to repay maturing issues. This was subsequently followed by news that 17 issuers have requested funding from their liquidity providers. "I know that there are distinct pressures in the market for the non-bank sponsored asset-based commercial paper vehicles," Finance Minister Jim Flaherty said. "It is in the best interest of all involved that sponsors, liquidity providers and investors engage constructively to pursue orderly market solutions to this liquidity situation." The stock sell-off intensified Thursday as investors looked to reduce risk and get out of equities. This came even as major participants in the Canadian asset-backed commercial paper market agreed in principle to stabilize the market by converting outstanding debt into longer-term floating-rate notes, a move that Flaherty lauded. "I welcome the announcement this morning by major investors and liquidity providers in the structured product portion of this market," he said. "One of the attractive features of this agreement is that it provides time for full information and analysis of these securities."

Jim Brown : 8/16/2007 2:06:49 PM

Path of Hurricane Dean: Link

Path by day: Link

Map of Gulf Oil Rigs with Katrina and Rita path: Link

Keene Little : 8/16/2007 2:01:42 PM

The equivalent mid line for SPX is near 1397.

Keene Little : 8/16/2007 2:00:51 PM

The DOW did bounce off the bottom of its parallel down-channel but should have some stair-stepping lower in order to finish the wave count. Keep looking to short the rallies, maybe at the mid line of the channel at 12750 if it can get that high (I have my doubts but the bounces are likely to be strong): Link

Jeff Bailey : 8/16/2007 1:59:43 PM

Disclosure: I currently hold bullish position in PBT.

Keep position relatively small. While this security represents oil/nat gas reserves, it is still more like a "stock."

Many "closed-end funds" responding to illiquid market forces.

Jeff Bailey : 8/16/2007 1:57:56 PM

Swing trade long alert for 1/3 position in the Permian Basin Trust (PBT) at the offer of $13.08 -3.46%.

Stop $12.70. Target $16.00.

Keene Little : 8/16/2007 1:56:49 PM

Banks (BIX) continue to bounce. Next resistance is at the 30-min 100/130 moving averages near 357: Link

Jeff Bailey : 8/16/2007 1:54:42 PM


DJ- Fed data show a sizable drop in total outstanding commercial paper in the week to Wednesday, a sign that the recent spike in short-term rates is forcing issuers to shift away from a market that has been at the heart of the recent credit crunch.

Jeff Bailey : 8/16/2007 1:54:02 PM


DJ- Morgan Stanley seeks emergency court order to force American Home Mortgage Investment to turn over $519 million worth of mortgage loans the bankrupt company has been servicing.

Jeff Bailey : 8/16/2007 1:53:31 PM


DJ- U.S. interest rate futures prices continue to tear higher, indicating even loftier expectations for the Fed to implement multiple rate cuts this year and next, after foreign stocks are battered amid fears of the worsening state of credit markets.

Keene Little : 8/16/2007 1:53:28 PM

RUT is nearing the flat line again. Feisty little index that one.

Jeff Bailey : 8/16/2007 1:52:59 PM


DJ- As investors try to unload illiquid investments such as CDOs, hedge funds that are unable to exit their positions could run into trouble, resulting in the "failure and disorderly liquidation of a hedge fund of sufficient size to disrupt markets."

Jeff Bailey : 8/16/2007 1:52:09 PM


DJ- Countrywide shares slide 23% after the mortgage lender says it drew down an entire $11.5 billion credit facility to boost its liquidity and accelerates plans to migrate its mortgage-production operations into its banking operations.

Keene Little : 8/16/2007 1:48:01 PM

I'm not sure about the larger pattern for bonds at the moment since the pullback in yields has gone deeper than I thought it would and the decline from the June high (in yields) has now formed an impulsive 5-wave move. The 5th wave looks just about complete (downside Fib projection for TNX is to 45.61) and suggests a strong bounce in the yields is very close (so selling in bonds). It's possible the selling in bonds could start a larger rally in stocks so I'm watching bonds carefully here (I think it's close but that could still be a couple of days away). Link

Jim Brown : 8/16/2007 1:45:17 PM

Closing Energy Shorts

I just sent this email to subscribers to the LEAPS Newsletter. I am reprinting it here for those who may not have gotten it yet.

Oil Getting Crushed, Exit Shorts

Oil prices fell more than $3 intraday to $70.10 despite a potentially dangerous hurricane headed directly for the Gulf oil fields. The reason for the sell off is the broader market selling by hedge funds. Yesterday, August 15th, was the last notice day for investors who want out of their hedge fund investments on Sept-30th. This gives the funds 45 days to complete an orderly disposition of assets to cover those withdrawals and is supposed to allow investors to exit without any material damage to other investors in the fund.

Unfortunately many of the assets currently held by hedge funds are not trading or are trading at such low values that funds can't afford to sell them. Most analysts believe most funds received massive redemption requests and many may not be able to raise enough cash to cover the withdrawals.

When you can't sell what you want to sell you are forced to sell what you can and that means equities and futures. In our case that means crude futures and energy stocks. Those investments have been the strongest sector in the market for the last year and most funds have lots of money invested in this sector.

Today they are dumping everything and the arrival of a hurricane headed for the gulf is not even enough to halt the dumping of positions.

This is a great buying opportunity for us but I believe there is additional selling ahead. Friday is option expiration and all those put options will need to be closed. Positions covered by those puts will have to be analyzed to decide if they want to continue holding the position and buy new puts or just close the positions and go to cash.

I expect some extreme volatility as we near the close today and again tomorrow. Monday could see an attempt to buy the dip but we need to wait for the all-clear signal before jumping back in. If hurricane Dean does build in strength and head for the oil patch it should not hit until Tue/Wed of next week. That gives traders time to exit August positions and still enter new oil positions next week before the hurricane hits.

National Oilwell Varco (NOV) one of the stocks on our watch list was knocked for a -$10 loss intraday and hit our entry point at $100. This is strong support and a decent entry point.

With the hurricane headed our way and crude down -$3 for the day to $70 I am going to recommend we exit our energy shorts in CVX, TSO and XLE.

The XLE profit target was $62 and it is trading as I type this at $63.24. We currently have a $5.70 profit on a $3 option or +187%. Exit now at $8.70.

TSO is trading at $43.25 and our profit target was $37.50. If the hurricane does blow through the Gulf and knockout refiners TSO could benefit strongly. Exit the position now at $8.10 for a +131% profit.

CVX is trading at $79.30 and decent support that does not seem to want to crack. It will also benefit from hurricane elated refinery outages even though it does have refineries at risk in the gulf. Exit now at $12.50 for a +166% profit.

Without the hurricane I would recommend holding those positions but the risk has shifted to the upside and we need to take our profits and move to cash until it passes. I will have some new watch list entries on Sunday to take advantage of this dip.

Jeff Bailey : 8/16/2007 1:43:34 PM

EIA: Nat Gas Storage Table Link ... build of 21 Bcf

Keene Little : 8/16/2007 1:40:10 PM

The banks are in the green today so that's potentially bullish for the market this afternoon. But the bounce pattern off this morning's low at the open looks like a 3-wave correction. Two equal legs up in its bounce would be at 354 and it's currently trading 353. So it may take a turn back down this afternoon and support further selling in the broader market.

Jeff Bailey : 8/16/2007 1:39:54 PM

DJ- $976 Million Michigan Building Authority Muni Bonds Delayed

Jeff Bailey : 8/16/2007 1:37:33 PM

Excellent note Jim ... As was "Dr J's" comments on CNBC.

Traders trying to "pick bottoms" in the index futures today could be taking on MUCH more RISK into August option expiration than they think.

Jeff Bailey : 8/16/2007 1:35:34 PM

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

Jim Brown : 8/16/2007 1:31:18 PM

VIX Spread Margins rising sharply

I just received this from Interactive Brokers. Evidently VIX option writers are getting hammered by the spike in the VIX to 4-year highs.

From: Interactive Brokers

Effective immediately, the minimum margin for all VIX calendar spreads (index options and futures) will increase from $150 to $250.

Customers holding positions in VIX derivatives are urged to URGENTLY evaluate their exposure. Based on current market pricing and volatility of VIX and related derivatives, we anticipate that the margin requirement to hold these contracts will increase to at least $500 for adjacent month spreads and $800 for spreads where the legs are more than 2 months apart. While we will attempt to provide some notification prior to raising VBIX margins, we must warn clients that margin rate increases may occur without prior notice.

Keene Little : 8/16/2007 1:24:46 PM

The FTSE closed down -4.1% today and for an equivalent drop for SPX that would be a closing price of about 1350. That would also be down to its uptrend line from April 2004. That's by no means a given but just the potential. The current bounce here could start something bigger but so far the wave count needs more downside price action so continue to look to short the bounces. The difficulty, especially being oversold, is that each bounce could spike quite high. Link

Jeff Bailey : 8/16/2007 1:19:33 PM

Swing trade put filled/closed alert ... when Countrywide (CFC) traded $15.00 target for the CFC Sep $22.50 Put (CFC-UX) at $8.60.

Jane Fox : 8/16/2007 1:24:58 PM

SPX is almost to its March lows. It took this market 77 days to go from those March lows to the July highs and exactly 26 days to lose it all. Link

Jeff Bailey : 8/16/2007 1:15:56 PM

01:00 Internals found at this Link

Jeff Bailey : 8/16/2007 1:10:56 PM

NYSE New Lows Alert! ... 943 exceeded recent benchmark lows of 705 and 703 from 7/26 and yesterday.

Jeff Bailey : 8/16/2007 1:04:39 PM

01:00 Market Watch found at this Link

Jeff Bailey : 8/16/2007 12:58:01 PM

VIX 36.61 +19.36% ... Sitting on WEEKLY R2

Jeff Bailey : 8/16/2007 12:54:36 PM

Cancel 12:45:16 Order Alert!

Jeff Bailey : 8/16/2007 12:54:13 PM

Swing trade put close out alert ... for the iShares Russell 2000 IWM Sep $78 Put (IQQ-UZ) at the bid of $6.00.

IWM $73.82 -1.82% ...

Jane Fox : 8/16/2007 12:48:48 PM

Here is a daily chart of Gold. Huge selloff today. Link

Jane Fox : 8/16/2007 12:46:40 PM

Dateline WSJ - In the current market storm, sometimes even traditional safe harbors don't seem to be very safe.

As liquidity dries up and global markets sink, investments such as gold and money-market funds are hurting, alongside riskier vehicles such as the subprime-mortgage sector.

The Dow Jones Industrial Average fell 241.68 points to 12619.79, with selling accelerating at noon after the release of weaker-than-expected factory data. The S&P 500 fell 28.25 to 1378.45, and the Nasdaq Composite Index lost 52.13 to 2406.70. All three indexes are down 10% from their July highs, one definition of a market "correction."

"It's more nervousness than anything else," said James Manfredonia, head of cash trading at Bear Stearns. He said the question now is "how much to this presses outside of Wall Street to the rest of America," which will determine how long and how severe the downturn is.

Jeff Bailey : 8/16/2007 12:46:27 PM

IWM $73.36 -2.44% ...

Jeff Bailey : 8/16/2007 12:45:16 PM

Swing trade put stick it out there alert! ... Place an order to sell the one (1) IQQ-UZ) for $6.30.

IWM $73.43 -2.35% ...

Jane Fox : 8/16/2007 12:44:44 PM

VIX to new daily highs as ES makes new daily lows. Does anyone know when the selling will stop?

Keene Little : 8/16/2007 12:44:44 PM

RUT is answering the question now by doing some catching up to the downside.

Keene Little : 8/16/2007 12:42:42 PM

It's been an orderly decline since the break of yesterday's consolidation and that says computers are just feeding sell orders to the market but there are very few buyers. Here's the down-channel on DOW to watch for now: Link The bottom of its larger down-channel is currently near 12540: Link

Jane Fox : 8/16/2007 12:38:50 PM

Here is a chart of the Wilshire 5000. 100% retracement from March lows. Link

Jeff Bailey : 8/16/2007 12:37:47 PM

Excellent, excellent option notes from "Dr. J"

Jeff Bailey : 8/16/2007 12:36:18 PM

Tsunami Alert Issued For Japan's Pacific Coast Areas

DJ- The Japan Meteorological Agency early Friday issued a tsunami alert for Pacific coast areas from Hokkaido in northern Japan to Okinawa Prefecture in southwestern Japan, Kyodo News Service reports.

The alert was issued after a powerful earthquake with a magnitude of 8.0 struck off Peru's Pacific coast on Wednesday, Kyodo said.

Jeff Bailey : 8/16/2007 12:35:01 PM

DJ- Argentina Bonds, Stock In Free Fall; Merval -7.47%

Jeff Bailey : 8/16/2007 12:31:27 PM

13-week Treasury Yield ($IRX.X) down 78 bp at 3.350%.

Current Fed Fund Target is 5.25%.

Keene Little : 8/16/2007 12:26:31 PM

SPX tagged 1376, two equal legs down from its July high. This is where the bears want to watch carefully (myself included). Certainly a rally back above SPX 1400 would have me out of all short positions while I reassess. In the meantime I continue to watch the form of the bounces and downtrend lines to stay on the right side here (which so far continues to be the short side). From the break of the uptrend line yesterday when I recommended getting short until now it's been a great ride so protect profits and don't be afraid to peel some money off the table to pay Momma.

Jeff Bailey : 8/16/2007 12:24:10 PM

Swing trade put lower stop alert ... on the iShares Russell 2000 IWM Sep $78 Put (IQQ-UZ) to $76.10.

IWM $74.34 -1.14% ...

Keene Little : 8/16/2007 12:21:57 PM

Make that -11.5% for silver and counting.

Jeff Bailey : 8/16/2007 12:19:54 PM

RUT.X 742.78 -1.16% ... sitting on its 61.8% retracement of 7/21/06 low close to recent 7/13/07 close.

Keene Little : 8/16/2007 12:17:59 PM

The metals continue to drop today. Gold is now down -3.5% and silver -9%. Silver has more of an industrial component to it and is a reason it will sell off harder during an economic slowdown (and the reason I preferred a short in silver over gold). Copper, another sign of economic strength, is down -8.5%.

Jeff Bailey : 8/16/2007 12:12:32 PM

SPX's DAILY/WEEKLY/MONTHLY S2's exhausted at this point. Will now have to turn to 6/13/06 low close to recent high close retracement to assess further levels of risk.

Jane Fox : 8/16/2007 12:11:36 PM

SPX enters a bear market with a 20% decline. SPX made highs of 1555 * 20% = 311. 1555-311=1244. SPX is now at 1377, 133 points from an official bear market.

RUT highs were 856 * 20% = 171. 856-156=685. The RUT made a low on August 6th of 744, only 59 points from a bear market.

Dow highs of 14015*20% = 2800. 14015 - 2800 = 11200. DOW is now at 12613, 1400 points from a bear market.

Jeff Bailey : 8/16/2007 12:10:15 PM

S&P 500 Index (SPX.X) Alert! 1,379 .29 -1.94%.

Jeff Bailey : 8/16/2007 12:09:13 PM

Dollar Drops To Fresh Multi-Month Low Below Y113.60

Jeff Bailey : 8/16/2007 12:04:24 PM

Keene! Did Marc give you a stop? A target?

See 11:18:47

Jeff Bailey : 8/16/2007 12:04:17 PM

Philadelphia Fed Aug Business Activity Index 0 Vs. July's 9.2

Jeff Bailey : 8/16/2007 12:01:39 PM

Sell Program Premium ... SPX 1,385

Jeff Bailey : 8/16/2007 12:00:00 PM

NHC: Hurricane Dean May Be 'Extremely Dangerous' Category 4 Storm

Jane Fox : 8/16/2007 11:54:17 AM

ES is now testing daily lows but the VIX is telling me those lows will hold.

Jeff Bailey : 8/16/2007 11:36:57 AM

S&P 500 Index (SPX.X) 1,387.46 -1.36% ... back to test MONTHLY S2.

Jeff Bailey : 8/16/2007 11:33:41 AM

At the 11:00 AM EDT benchmark ...

Since Friday's close ...

INDU -3.86%
SPX -4.16% ...
NDX -3.70% ...
RUT.X -4.52% ...

Keene Little : 8/16/2007 11:32:30 AM

The relative strength of the RUT today is amazing. I'm not sure what to make of it. It's either very bullish because it's telling us the market is about to bottom and shoot higher or else the small caps are about to get dumped big time and do some catching up. By its 60-min chart it's in no-man's land here and I'd wait for a rally above 765 before I felt bullish about this one. But it does raise a caution flag for those in short positions. Link

Jeff Bailey : 8/16/2007 11:21:19 AM

11:00 Internals found at this Link

Keene Little : 8/16/2007 11:18:47 AM

Marc just wrote me and said he sees a major swing buy signal here so I offer that as another opinion about the market right here.

Jane Fox : 8/16/2007 11:17:42 AM

The Russell is the only market trading above its PDLs. Once again we have a huge divergence between the small and large cap stocks but this time it is the small caps that are stronger and not weaker like last week. Link

Jane Fox : 8/16/2007 11:13:59 AM

ES is now heading for a test of its daily highs but keep your eye on the VIX and if it is not testing its daily lows at the same time then be careful on trading it long.

Jeff Bailey : 8/16/2007 11:07:51 AM

TRIN's DAILY Pivot 1.15

Jeff Bailey : 8/16/2007 11:07:26 AM

TRIN 1.02

Jeff Bailey : 8/16/2007 11:07:02 AM

YM 12,819

Jeff Bailey : 8/16/2007 11:06:49 AM

TRIN Alert! 0.98

Jeff Bailey : 8/16/2007 11:02:54 AM

11:00 Market Watch found at this Link

Jeff Bailey : 8/16/2007 10:49:59 AM

NHC: Hurrican Dean's Winds Strengthen To 90 MPH

Jeff Bailey : 8/16/2007 10:48:36 AM

Canada AB Commercial Paper Deal Would Remove Need For Liquidity

DJ- Major participants in the Canadian asset-backed commercial paper market have agreed in principle to an agreement that will stabilize the market through converting outstanding notes into longer-term floating rate notes. The new floating rate notes will mature no earlier than the scheduled termination date of the underlying assets, thus eliminating the need for existing liquidity facilities, those involved in the deal said in a joint news release. It will apply to issues from non-bank "Third Party" ABCP issuers. The deal was forged by a number of key players in distressed Canadian ABCP market, including Caisse de depot et placement du Quebec, believed to be a major holder of ABCP issues. The agreement to stabilize the Canadian asset-back commercial paper market effectively eliminates it, at least for the time being, said one bond market source. It's "disappeared" into the floating rate note or FRN market, the source said. It's not clear what the longer term future of ABCP from third party issuers as a separate market is. The deal doesn't cover ABCP issued by banks or other major financial institutions, as that component of the market has remained more viable during the recent turmoil. The agreement is a stop-gap measure in order to avoid pushing the commercial paper issuers into forced liquidation of the underlying assets at a time when the market is "irrational" and they likely wouldn't realize their full value, said another industry source. Holders of the asset-backed commercial paper "did what they had to do," the source said.

Over the short-term the stabilization agreement represents a lifeline to commercial paper issuers such as Coventree Inc. (COF.T), but questions remain over the long-term viability of that company. That will depend on if it can find investors in the event it tries to issue new floating rate notes, which under the current conditions is unlikely, industry sources reasoned. In Toronto, Coventree is down 22% to C$3.06 after the company late Wednesday said it couldn't place C$410 million worth of commercial paper. The turmoil in the ABCP market was also put pressure on the share prices of publicly traded companies that hold notes issued by Coventree, for instance Vancouver mineral-exploration company New Gold Inc. (NGD), which said a C$6.5 million "A" note held with a Coventree Inc. sponsored fund, which came due and payable to New Gold on Aug. 13, wasn't paid and remains outstanding. New Gold also said it holds about C$152 million of A notes issued by a number of Coventree-sponsored funds which have varying maturity dates. New Gold is down 24% to C$4.75 Thursday. Under the ABCP agreement, holders of Third Party ABCP who have signed the deal will continue to roll their Third Party ABCP during the 60 days following the agreement. Those signing the deal will encourage all other holders of Third Party ABCP to continue to roll their Third Party ABCP, the news release said. Existing liquidity facilities will be canceled and all outstanding liquidity calls will be revoked under the restructuring framework set out by the deal. Interest on the FRNs will be payable monthly or quarterly, as the case may be, to match the fixed payment dates under the underlying assets, the release said. Margin provisions will be revised to create renewed stability, thereby reducing the likelihood of near term margin calls.

Keene Little : 8/16/2007 10:46:44 AM

The metals are getting crushed again today as well. It's in keeping with all assetts will sell off this time around. I expect bonds to start selling off sometime soon as well. Probably once it becomes clearer that the Fed is going to stand firm on rates for now.

Keene Little : 8/16/2007 10:43:09 AM

I've shown the bearish side of things for SPX and the DOW. Now the level to watch on SPX will be 1376. That's where the decline from the July high will have two equal legs down so if this decline is nothing but a very sharp A-B-C correction to the longer term rally then the market could be very close to a bottom. There are several reasons I don't believe that more bullish possibility and one of them is because of what this correction would be.

For the bullish scenario (that this decline is just a correction and we'll then head to new highs again), this would be a 4th wave correction. It's very rare to get a sharp pullback like we've had for a 4th wave (much more common in a 2nd wave). That's one of the reasons I'm comfortable saying the top is in for the bull market and that we've now started Bear Leg II which will take us through 2008.

However it is possible the 3-wave move down will complete a larger degree a-wave and then we'll get a very large b-wave bounce. Without trying to complicate things it simply means we could easily get a bounce that retraces 62% of the decline from July. That would take SPX back up to 1490. So bears can't get complacent here. The DOW has already dropped below its level where it had two equal legs down (at 12808).

Jane Fox : 8/16/2007 10:41:52 AM

Even though you could get some nice long scalps today your highest odd trade is short. Link

Jeff Bailey : 8/16/2007 10:41:03 AM

NHC: Tropical Depression Erin Expected To Move Further Into Texas

Jeff Bailey : 8/16/2007 10:33:54 AM

Disclosure: I currently hold bearish position in BIDU.

Keene Little : 8/16/2007 10:32:24 AM

When I look at a similar parallel down-channel for SPX as I showed for the DOW I get the feeling it will break below the channel. This is typical when the wave pattern builds up a set of 3rd waves to the downside--the flush usually drops it out the bottom of a more "orderly" decline. So if SPX drops below 1379 then we'll have a sense that the decline could play out something similar to what's shown on this chart: Link

Jeff Bailey : 8/16/2007 10:32:10 AM

Swing trade put alert ... for one (1) of the Baidu.com BIDU Sep $150 Puts (BDQ-UJ) at the offer of $6.20 ($5.30 x $6.20)

BIDU $163.58.

Target $145.

Jeff Bailey : 8/16/2007 10:29:15 AM

ACH 34.21 -12.52% ... ACH-WF $2.10 x $2.80 !!!

Jeff Bailey : 8/16/2007 10:28:15 AM

CNOOC (CEO) $95.19 -7.10% ... Achieves its bearish vertical count of $98.

Tab Gilles : 8/16/2007 10:26:59 AM

Let's go back to the start of this bull run...about 4 years ago.

$SPX Link $NDX Link

Jeff Bailey : 8/16/2007 10:24:33 AM

Pacholder High Yield (PHF) alert! $7.85 -7.10% ...

Jane Fox : 8/16/2007 10:24:32 AM

VIX continues to make new daily highs and ES is following with new daily lows.

Jane Fox : 8/16/2007 10:24:08 AM

Wilshire 5000 has almost retraced 100% of the rally from March lows. Link

Jeff Bailey : 8/16/2007 10:19:23 AM

I'd LOVE it if my mortgage just went away!

Tab Gilles : 8/16/2007 10:17:47 AM

$NDX Hits 40-week ema@ 1850 level....is the March low at 1715 next? Link

How Much lower will the SPX go? Link

And the $RUT? Link

Jane Fox : 8/16/2007 10:17:39 AM

Overnight range is still in tact and it looks like ON lows were support intraday. Link

Jeff Bailey : 8/16/2007 10:16:44 AM

RISK ASSESSMENT! ... Yesterday's action had the S&P 500 Bullish % (BPSPX) falling to 44%.

This market (SPX) is as WEAK and RISKY as that found in September 2001 by my analysis.

Keene Little : 8/16/2007 10:16:43 AM

A parallel down-channel for the DOW shows where temporary support could be found later this morning down near 12500 if the selling really kicks into gear. The bearish wave pattern calls for stair-stepping lower from there over the next week before we could see any decent corrective bounce. Link

Jane Fox : 8/16/2007 10:12:47 AM

VIX to new daily highs so I expect ES to make new daily lows soon.

Jeff Bailey : 8/16/2007 10:11:55 AM


DJ- Fannie Mae and Freddie Mac should use the existing powers they have in the subprime sector to help settle market jitters instead of trying to grow beyond regulatory limits, Treasury Secretary Henry Paulson says.

Jeff Bailey : 8/16/2007 10:11:11 AM


DJ- Major Japanese banks say their exposure to subprime mortgages is small, but the stock market is far from convinced. Mitsubishi and Sumitomo Mitsui, two of Japan's largest banks, revealed the extent of their subprime-related losses.

Jeff Bailey : 8/16/2007 10:10:28 AM


DJ- U.S. interest rate futures traders continue to price in expectations for multiple rate cuts from the Federal Reserve, even as volatility in the effective federal-funds rate has led to illiquid conditions for some contracts and added to uncertainty.

Jeff Bailey : 8/16/2007 10:09:52 AM


DJ- Aegis Mortgage may not need bankruptcy financing, says a lawyer for the dissolving lender. Continuing loan servicing operations and possible sales of mortgages could provide enough cash to cushion the company's collapse in Chapter 11.

Jeff Bailey : 8/16/2007 10:09:17 AM


DJ- After four days of massively injecting funds in the European banking systems, the European Central Bank says it is easing off the pedal and allowing some liquidity to drain out as money markets stabilize.

Jane Fox : 8/16/2007 10:09:14 AM

WASHINGTON (MarketWatch) -- Fannie Mae's net income for 2006 dropped 35% as the mortgage-finance giant spent much of the year dealing with administrative costs related to its accounting scandal and a weakening housing market.

Net income for the year dropped to $4.1 billion compared to $6.3 billion in 2005, the company said Thursday.

Earnings per share were $3.65 versus $6.01 in 2005.

The Washington, DC-headquartered mortgage-finance giant (FNM) is still recovering from an accounting scandal, and costly administrative expenses and lower net interest income dragged earnings down.

Jeff Bailey : 8/16/2007 10:08:53 AM


DJ- Redcorp says the C$102.2 million in notes it holds came due on the maturity dates but weren't paid and remain outstanding. It says it is investigating the implications of these events and has been in talks with Coventree.

Jeff Bailey : 8/16/2007 10:08:23 AM


DJ- Australian non-bank mortgage says low liquidity in a segment of the U.S. commercial paper market is forcing it to extend two short-term debt programs that will drive up funding costs and materially crimp its earnings.

Jeff Bailey : 8/16/2007 10:07:52 AM


DJ- Ohio bank will pay $31 for each First Charter share, with the deal consisting of 70% of Fifth Third common stock and 30% of cash. The offer represents a 53% premium to First Charter's closing price of $20.25 yesterday.

Jane Fox : 8/16/2007 10:06:59 AM

Internals looking very bearish this morning. Link

Jeff Bailey : 8/16/2007 10:05:57 AM

Countrywide Financial (CFC) $18.00 -15.50% ...

Jeff Bailey : 8/16/2007 10:03:53 AM

10:00 Market Watch found at this Link

Jeff Bailey : 8/16/2007 9:59:16 AM

Fed's first repurchase was $5 billion.

Jeff Bailey : 8/16/2007 9:58:18 AM

Fed's 2nd Repurchase Table Link

Jeff Bailey : 8/16/2007 9:56:22 AM

Moody's Cuts Countrywide 3 Notches To Lowest High-Grade Rating

Jane Fox : 8/16/2007 9:54:25 AM

Dateline CNN - Three major earthquakes strike Peru -- a magnitude 7.7 and two magnitude 7.5, according to the U.S. Geological Survey. There is no word on casualties but Reuters reports buildings shaking in the capital, Lima.

Jane Fox : 8/16/2007 9:52:28 AM

US $ tags its downward trendline so I suspect it will retrace and the test will be if it retraces below the support at 81.00. Link

Jeff Bailey : 8/16/2007 9:50:08 AM

These were "no bid" at one time. Let's take them off the table.

Jeff Bailey : 8/16/2007 9:49:07 AM

VIX 31.08 +1.33%

Jeff Bailey : 8/16/2007 9:48:49 AM

Swing trade puts close out alert! ... for the two (2) Aluminum Corp. China ACH Nov $30 Puts (ACH-WF) at the bid of $1.65.

ACH $36.15 -7.56%.

Jeff Bailey : 8/16/2007 9:45:46 AM

RUT.X +0.15% ... first major to get green.

Jeff Bailey : 8/16/2007 9:44:48 AM

At some point, should start to flush some cash out of Money Market into other investment alternatives.

Jeff Bailey : 8/16/2007 9:43:31 AM

13-week Treasury Note Yield ($IRX.X) plunging 45.5 bp to 3.635%.

Jane Fox : 8/16/2007 9:38:00 AM

TRIN at 2.32

Jane Fox : 8/16/2007 9:37:34 AM

TRIN over 2.00 alert

Jane Fox : 8/16/2007 9:36:28 AM

TRIN is a very healthy 1.75.

Jane Fox : 8/16/2007 9:34:17 AM

AD line -1174, under the -1000 mark again.

Jane Fox : 8/16/2007 9:30:27 AM

The SPX's rally started on March 14th with a low of 1363 and rallied up to 1555, 192 points on July 19th. SPX has retraced 76.40% of that rally and is well below its 200EMA. Link

Jane Fox : 8/16/2007 9:23:51 AM

On the other end of the spectrum is the DOW. Its rally started on March 14th' ( low 11939) and culminated on July 19th (high 14015), a 2000 point rally in 4 months. The DOW has not yet retraced all the way back to its March lows but has retraced almost 61.80% of that rally. Link

Jane Fox : 8/16/2007 9:18:18 AM

The Russell 2000's low on March 5th was a springboard for an almost 100 point rally. That 100 point rally took approximately 3 months, from March 5th to the yearly highs at 856 on June 1st. The Russell is now lower than those March 5th lows and the decline took only 16 days. An excellent example of how much stronger fear is over greed. Link

Jane Fox : 8/16/2007 9:12:46 AM

NEW YORK (MarketWatch) -- Treasury prices rallied early Thursday, pushing yields lower, as bond investors played off data showing weakness in the nation's housing sector as well as modestly higher jobless claims.

Signs of economic weakness signal little sign of inflation and thus generally spark buying in Treasurys.

In addition, the continuing turmoil in the corporate credit markets is intensifying demand for Treasurys and other government-backed assets.

Jane Fox : 8/16/2007 9:11:36 AM

NEW YORK (MarketWatch) -- Troubled mortgage lender Countrywide Financial said Thursday it has drawn down all of an $11.5 billion credit facility to fund its operations as difficulty raising money in the credit markets threatened its business.

The firm also said it has significantly tightened lending standards to the point that 90% of its loans will now be prime credits.

Countrywide (CFC) shares have been battered lately as the demand for mortgages in the secondary market dried up amid fears the loans will default when rising rates strap homeowners.

Jane Fox : 8/16/2007 9:06:04 AM

WASHINGTON (MarketWatch) -- First-time applications for state unemployment benefits continued to climb in the latest week, marking the third straight weekly increase, the Labor Department reported Thursday.

Claims for the week ending Aug. 11 rose by 6,000 to 322,000, the highest level since June 16, government data showed.

The four-week average of new claims also rose, climbing by 4,750 to 312,500.

Continuing claims for benefits also increased, the data showed. For the week ending Aug. 4, continuing claims rose by 17,000 to 2.56 million, while the four-week average of those claims climbed by 1,000 to 2.54 million

Jane Fox : 8/16/2007 9:03:30 AM

MarketWatch Headline was, "US Stock Futures point to more heavy losses." HMMMM Gee these don't look like "heavy" losses to me. Geesh!

ER2 (Russell 2000 futures) is back into its PDR and its large cap brethren are right behind. Link

Jane Fox : 8/16/2007 9:00:43 AM

WASHINGTON (MarketWatch) -- U.S. home builders cut back again in July, starting construction on the fewest number of new homes in more than 10 years, the Commerce Department reported Thursday.

Housing starts fell 6.1% to a seasonally adjusted annual rate of 1.381 million, the lowest since January 1997. Last month's decline was larger than the expected drop to 1.40 million.

Meanwhile, authorized building permits dropped 2.8% in July to a seasonally adjusted annual rate of 1.373 million, the lowest since October 1996 and less than the 1.40 million pace expected by economists surveyed by MarketWatch.

Housing starts are down 21% in the past year, while permits have fallen 23%.

The government's latest data show builders are still struggling to bring supply and demand back into balance.

Keene Little : 8/16/2007 9:00:17 AM

Unless futures perform a rendition of the Phoenix this morning and get back into the green for the open, and then stay there, I think we have our answer as to which way this is headed today. The setup was for a big move one way or the other and the bearish wave count says it's going to be hard down today so look for opportunities to short the bounces.

Futures are up significantly off their premarket lows (ES is up 11 points but still down 11) but it may be more of an effort in the low volume environment here to get as close to even as possible before the cash market opens so funds can get better prices to unload some inventory.

Jeff Bailey : 8/16/2007 5:40:04 AM

Going to go catch a nap ... zzzzz

Jeff Bailey : 8/16/2007 5:38:46 AM

Hong Kong's Secy: Sees No Serious Problems For HK Dollar Value

Jeff Bailey : 8/16/2007 5:37:57 AM

Fitch: Affirms Russia At 'BBB+', Outlook Stable

Jeff Bailey : 8/16/2007 5:36:51 AM

While I'm thinking of it ... One "sign of strength" I'll be monitoring for in the YM would be a trade at a DAILY R2.

We haven't seen a DAILY R2 trade since 7/16/07 when YM traded 14,059 and correlative July MONTHLY R2

Jeff Bailey : 8/16/2007 5:31:55 AM

YM Overnight 5-minute interval Link

Jeff Bailey : 8/16/2007 5:31:18 AM

YM overnight lows ... 12,784

Jeff Bailey : 8/16/2007 5:27:51 AM

YM taps DAILY S1 ...

Jeff Bailey : 8/16/2007 5:21:12 AM

Best YM could do post-profile was 12,861

Jeff Bailey : 8/16/2007 5:20:23 AM

YM long stop alert! ... 12,833

Jeff Bailey : 8/16/2007 5:15:02 AM

Dollar Index Steady at MONTHLY R1 ...

Jeff Bailey : 8/16/2007 5:13:38 AM

GlaxoSmithKline Signs Pandemic Flu Vaccine Deal With UK Gov.

GSK $49.72 ...

Jeff Bailey : 8/16/2007 5:09:20 AM

NHC: Hurricane Dean (update)

DJ- Hurricane Dean formed in the open Atlantic early Thursday and headed toward the Lesser Antilles in the Caribbean, forecasters said.

Hurricane warnings were issued for the islands of Dominica and St. Lucia by their local governments. Hurricane watches were in effect for the islands of Martinique and Guadeloupe and its dependencies, Saba and St. Eustaties.

At 5 a.m. EDT, Dean was centered about 485 miles east of Barbados and about 590 miles east of Martinique, according to the National Hurricane Center. It was moving west near 24 mph, and was expected to continue the same path for the next 24 hours.

Maximum sustained winds were near 75 mph, above the 74-mph threshold for a hurricane. Dean is a Category 1 hurricane and is expected to strengthen during the next 24 hours, forecasters said.

Jeff Bailey : 8/16/2007 5:06:57 AM

China Yuan Down Late; Breaks Key Level, May Fall More

DJ- Continued concerns about the U.S. subprime-mortgage market led the Chinese yuan Thursday to fall against the U.S. dollar for a second consecutive day.

Traders said the dollar could rise against the Chinese currency again Friday after it broke back through key resistance of CNY7.6 during the session. A Shanghai-based trader at a European bank said the dollar could near CNY7.62 Friday.

On the over-the-counter market, the dollar was at CNY7.5995 around 0730 GMT, up from Wednesday's close of CNY7.5858. It traded between CNY7.5900 and CNY7.6005.

The dollar/yuan central parity rate was set at 7.5981, its highest level since July 9. The rate was up from Wednesday's level of 7.5921 and was the fifth straight day it had been set higher.

"In this environment of uncertainty, people are buying dollars for safety," said a Japanese trader in Shanghai, referring to concerns about the U.S. subprime-mortgage market.

Despite the yuan's recent fall against the dollar, traders expect the yuan to bounce back soon, as China needs to address its burgening trade surplus.

A government think tank, the State Information Center, said in a commentary published in the Shanghai Securities News on Thursday that the yuan's rise has been too slow to affect the trade surplus.

"Because the actual rate of yuan appreciation is so small, it's not enough to constrain the fast growth of China's exports, and so its ability to have a big impact on the trade surplus is extremely limited."

The Chinese yuan has risen roughly 3.0% against the U.S. dollar so far this year. Traders' expect it to rise 5% to 7.5% for the full year as Beijing works to reduce the trade surplus and rein in inflation.

Offshore, one-year dollar-yuan nondeliverable forwards were at 7.2190/7.2220 Thursday afternoon, up sharply from 7.1690/7.1740 late Monday afternoon.

Jeff Bailey : 8/16/2007 5:02:29 AM

Hurricane Dean (5-day Cone) Link

Jeff Bailey : 8/16/2007 4:57:36 AM

NHC: Tropical Storm Dean Upgraded To Hurricane Status

Jeff Bailey : 8/16/2007 4:49:26 AM

France's Sarkozy: Urges G7 To Look At Rating Agencies Role

Jeff Bailey : 8/16/2007 4:40:24 AM

UK Retail Sales (snapshot)

DJ- U.K. retail sales surged unexpectedly in July, as shoppers took advantage of heavy discounts for furniture and electrical goods in particular.

The Office for National Statistics said Thursday that retail sales rose 0.7% on the month and 4.4% on the year.

The monthly rise was significantly ahead of expectations, continuing a week of surprising U.K. economic data. Economists surveyed by Dow Jones Newswires last week expected retail sales to increase 0.2% on the month and 3.5% on the year in July.

ONS also revised the June retail sales data upward, so that they now rose 0.4% on the month and 3.7% in annual terms. Those figures were originally published as a 0.2% rise on the month and a 3.4% annual rise.

The largest month-on-month rise in July came in household goods stores, where sales rose 3.7%. They also rose 13.4% in the year, the highest annual rise since October 2001. ONS said this was a result of widespread discounts for furniture and electrical goods during the traditional summer sales season.

For retail sales as a whole the implied deflator came in at -1.1% in July, a sign that shops across the board had to reduce prices heavily to keep the shoppers coming in.

That's also consistent with the sharp fall in consumer price inflation in July published earlier this week, which dropped to an annual rate of 1.9% from 2.4% the month before. That in turn has lead some commentators to argue the Bank of England may have reached the peak in its interest rate-hiking cycle, with bank rate now set to stay on hold at 5.75% until November at least.

Jeff Bailey : 8/16/2007 4:37:48 AM

S&P Says Germans Res. Mtg. Backed Sec. Q2 2007 Sector Losses Remain Low

Jeff Bailey : 8/16/2007 4:32:29 AM

UK: July Retail Sales +0.7% On Month; +4.4% On Year

Forecast +0.2% On Month; +3.5% on Year.

Jeff Bailey : 8/16/2007 4:31:02 AM

China Bans Poultry Imports From Nebraska

DJ - China has banned poultry and poultry product imports from Nebraska following an outbreak of bird flu in the midwestern U.S. state.

A turkey flock in one county in Nebraska was tested positive for a mild strain of bird flu in late June.

However, the U.S. Department of Agriculture said no human bird flu cases have ever been traced to eating properly cooked poultry or eggs.

Poultry and poultry products that have been shipped from Nebraska since June 4 must be sent back or destroyed, according to a joint statement issued by the Ministry of Agriculture and General Administration of Quality Supervision, Inspection and Quarantine Thursday.

Products that were shipped before June 4 must be tested before they can enter China, the statement said.

Poultry and poultry products from the U.S. are not allowed to be mailed into China or brought into the country by travelers, it said.

Jeff Bailey : 8/16/2007 4:07:42 AM

YM long alert here at 12,850. Stop 12,833. Target 12,880.

Jeff Bailey : 8/16/2007 4:04:19 AM

Interbank Forex table at 03:50 AM EDT Link

Jeff Bailey : 8/16/2007 3:59:19 AM

Russian Central Bank ... Reserves Aug 10 $420.2B, Up $3.4B on Week

Jeff Bailey : 8/16/2007 3:57:37 AM

British Land 1Q NAV +2.8%; Investment Market Slowing

DJ (partial) - U.K. real estate investment trust British Land Co. PLC (BLND.LN) Thursday reported a 2.8% rise in quarter-on-quarter net asset value, amid a significant slowdown in the commercial property market.

Chief Executive Stephen Hester said in a statement, "we are in a period where investor concerns on the macro-environment are reflected in industry stock prices but not, to date, in actual business results. Our focus remains on generating added value and growth. At the same time, the resilience of our company is excellent with exceptional occupancy rates, lease lengths and balance sheet strength."

Net asset value for the first quarter rose to 1730 pence a share from 1682 pence at the fiscal year-end in March and from 1592 pence for the year-earlier period.

The rise was attributed to a 1.3% valuation uplift as well as gains on property disposals above valuation.

Lehman Brothers analyst Mike Prew said the results were "a pleasing set of figures," and welcomed the outlook on continuing rental growth. He retains an equal weight rating on the stock. At 0730 GMT British Land shares were down 21 pence or 1.7% at 1193 pence, in a lower London market.

British Land's figures follow research earlier this week from the Investment Property Databank showing total returns from commercial property at their lowest level for 12 years.

The IPD monthly index for July showed monthly total property returns of 0.2% and 4.2% for the year to date.

But British Land saw capital returns of 1.5% for the quarter, above the IPD benchmark figure of 1.2%, and rental value increased by 2.2% driven by strength in the central London office market. The value of its property portfolio totals GBP16.3 billion or GBP20.4 billion including properties under management. British Land sold GBP1.6 billion of property in the first quarter and for the last two years has been the biggest seller of property in the industry.

Hester said that while rental growth remains strong, "investment markets are more mixed as investors adjust relative pricing to rental growth and qualitative prospects, hitherto less focused on."

He said on a conference call that higher interest rates and the issues in the global credit market may have an impact on the wider property market but would not affect British Land directly. All of British Land's debt is fixed at an average cost of 5.3% and for an average length of 13 years. "More difficult credit conditions could lead to less new buildings being put up as some people find it more difficult to borrow money and are more nervous of finding tenants, so it could be positive for us," he said, but added that "British Land is not immune from markets."

He said the "current uncertainties in world markets have a positive, the flight to quality. There are few investments as sold as property. Its merits as a defensive investment will be important when comparing it to other investments with a credit element," but he said that investors confidence was nonetheless "clearly shaken across all markets."

Hester is confident that rental growth will continue and the company's 5 million square feet development pipeline remains on track. He said risk from the development program was minimized because "there is no year when we are delivering more than one building in one market."

Jeff Bailey : 8/16/2007 3:47:39 AM

YM 12,864 ... off 57 points. Overnight low finds support at DAILY S1 (12,799).

Jeff Bailey : 8/16/2007 3:46:09 AM

Rio Tinto / Alcan Debt Raising (update) ... Rio Tinto Ltd. (RIO.AU) said Thursday the US$40 billion debt raising for its US$38.1 billion takeover of Canada's Alcan Inc. (AL) is progressing well despite the global credit crunch.

Some investors have been concerned the crisis in global debt markets, sparked by subprime lending in the U.S., could make it hard for Rio to find lenders for its fully debt-funded deal, but Rio said the raising is going well.

"Rio Tinto's debt raising for the Alcan deal is well advanced and running well on plan," a company spokeswoman told Dow Jones Newswires.

Rio's loan is underwritten by Royal Bank of Scotland, Deutsche Bank AG, Credit Suisse and Societe Generale.

Jeff Bailey : 8/16/2007 3:43:10 AM

$NIKK has been a little stronger relative to $RUT Link as of 8/15/07 close (2,192.25)

Jeff Bailey : 8/16/2007 3:40:46 AM

iShares Russell 2000 (IWM) closed $75.20.

A 1.10% decline would be $-0.82, to $74.38.

Jeff Bailey : 8/16/2007 3:38:59 AM

Will note that $NIKK finished at 16,148. Session low was 15,860.

That would be equivalent to a 1.8% bounce.

Session high Thursday was 16,296. Wednesday's close was 16,475. Couldn't recover within 1.10 of Wednesday's close.

Jeff Bailey : 8/16/2007 3:27:03 AM

China: To "Deal With" Toy Companies Involved In US Recalls

Jeff Bailey : 8/16/2007 3:26:10 AM

Rio Tinto: Alcan Debt Raising "Well Advanced" And On Plan

Jeff Bailey : 8/16/2007 3:12:35 AM

Oil Futures: ICE Brent Futures Down $1; Storms, Econ Doubts

Jeff Bailey : 8/16/2007 3:11:45 AM

Germany's DAX -2% At 7,297 After The Open ... Link

Jeff Bailey : 8/16/2007 3:09:41 AM

Dow Jones Eurostoxx 50 -1.4% At 4,115 After The Open ... Link

Jeff Bailey : 8/16/2007 3:07:33 AM

FTSE down 2.1%, Falls Below 6,000 For First Time Since March 5 ... Link

Jeff Bailey : 8/16/2007 3:03:19 AM

Nikkei-225 ($NIKK) Link ... finished down 327 points, or -1.99% at 16,148.49.

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