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OI Technical Staff : 8/17/2007 9:59:59 PM

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Jeff Bailey : 8/17/2007 4:14:55 PM

XLF-HF $2.35 bid. Not bad, not bad at all.

Jeff Bailey : 8/17/2007 4:09:39 PM

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

Jim Brown : 8/17/2007 4:06:19 PM

The cash close ended with a tie on the Russell with buyers and sellers equally matched at the 788 support level. Selling volume increased from 3:15 into the close as OpEx Friday forced all options positions to be either closed or rolled forward on equities. Interesting closing dynamic and that makes Monday a pivotal day for the trend.

The S&P never got over that 100/130 period average (30-min) set at 1445 and resistance held. Same held true at those same averages on the Dow and Nasdaq.

The economic calendar is very bleak next week so all eyes will be on the global markets and any Fedspeak that hits the wires.

I would like to think the bottom is behind us but there is still a lot of uncertanity ahead.

Jeff Bailey : 8/17/2007 4:06:06 PM

I've got some paperwork that needs attention before close of business. I'll update things over the weekend.

Jeff Bailey : 8/17/2007 4:03:45 PM

YM longs from WEEKLY S1, exit here 13,110

Jim Brown : 8/17/2007 3:58:07 PM

Market depth on the Russell futures at 791 and above is huge in favor of the sellers. In this snapshot there are 502 contracts for sale and only 204 bid up to 791. It is even worse in the 792 range but I can't get a snapshot there unless we print there. Link

Keene Little : 8/17/2007 3:55:58 PM

We have a mixed picture just between the DOW and SPX as we end the week. Yesterday's v-bottom recovery had the DOW essentially holding at its 200-dma and uptrend line from July 2006 after a very bullish looking hammer candlestick at that support level. So the DOW looks bullish.

SPX broke its 200-dma and closed below it on Wednesday and today's rally now has it tucked right up underneath it. Unless it gaps over it on Monday it's going to look like a kiss goodbye on Monday with a pullback. So the SPX looks bearish.

We'll need more clues to this puzzle on Monday. I hope everyone has a great weekend.

Jeff Bailey : 8/17/2007 3:56:32 PM

Bond desks that I talked to this morning also said not much of a bid for their agency. While yesterday's news of credit facility buys time, I'd have to think the CFC paper still "riskiest" out there.

For now, MARKET will AVOID buying things it deems RISKIEST relative to REWARD.

Jim Brown : 8/17/2007 3:46:37 PM

Buyers apeared at 788 once again but now we have a lower high on that last bounce so I am not buying the dip just yet. I am looking at the possibility of shorting this bounce instead. Still watching for a trend to develop in the very short term charts.

Jeff Bailey : 8/17/2007 3:46:00 PM

Excellent, excellent observation from CNBC guest regarding Countrwide paper.

Jim Brown : 8/17/2007 3:43:57 PM

That was a quick +3 points before the ER rolled over again. My end of day bias is starting to turn bearish. We could see some funds start dumping again on expectations of an end of day OpEx rally. The internals are turning negative once again.

Jeff Bailey : 8/17/2007 3:42:59 PM

Argentina Bonds, Stocks Continue Rally; Merval +5.09%

Jim Brown : 8/17/2007 3:37:26 PM

I bought the Russell dip again. Definitely not as profitable as yesterday but still a very tradable range. Link

Keene Little : 8/17/2007 3:31:15 PM

I thought sure they'd drive the market to a new high on that push. Still no new highs for the 4 major indices and that continues to leave this afternoon's bounce as potentially corrective which in turn leaves the bounce off yesterday's low as just a 3-wave correction which in turn leaves the very bearish wave pattern still in play. You'll definitely want to be short for Monday in this case. Bulls need to rally it back up here and now.

Jim Brown : 8/17/2007 3:27:43 PM

The Russell futures could not break that final hurdle at 795 and sellers returned in volume. Look for 788 and then 785 to be the bottom of the range an a potential rebound point.

Keene Little : 8/17/2007 3:24:32 PM

At this point draw an uptrend line along the lows since the 1st pullback just before 11:00 AM. Once price breaks below that line then you'll want to be short against the previous high.

Jeff Bailey : 8/17/2007 3:24:48 PM

US Rep Frank: (upate)

DJ- House Financial Services Committee Chairman Barney Frank, D-Mass., urged the Senate on Friday to pass legislation that would allow Fannie Mae (FNM) and Freddie Mac (FRE) to purchase even more expensive mortgages than a bill Frank steered through the House earlier this year permitted.

"It now is clear we underestimated in the House bill how far we should raise the conforming loan limit, and the current crises in the mortgage market demonstrate we should raise it to a higher level." Frank said in a press statement. "I urge the Senate to make this a priority as part of GSE reform, because we now have the opportunity to help homeowners get access to needed credit by allowing Fannie Mae and Freddie Mac to play a larger role."

Fannie Mae and Freddie Mac are only allowed to purchase mortgages on the secondary market known as "conforming loans," and these loans cannot be higher than the conforming loan limit, which is presently at $417,000. The House-passed bill would allow government-sponsored enterprises to purchase more expensive mortgages in states where the cost of housing is higher, but Frank and Rep. Gary Miller, R-Calif., said Friday that the companies should be able to buy even more expensive loans.

Many of the current problems in the housing and credit markets are with subprime mortgages and "jumbo" loans that the GSEs aren't permitted to buy.

If the Senate passed a bill raising the conforming loan limit, House and Senate negotiators could agree on compromise language before the bill is sent to the White House.

Jeff Bailey : 8/17/2007 3:22:40 PM

Sounds like Paulson's comments over last several months getting through?

Keene Little : 8/17/2007 3:22:26 PM

For a 5-wave move up where the 5th wave = the 1st wave, that gives us upside targets of SPX 1454.50 and DOW 13173 (pretty much a double top so watch for bearish divergences there to short for a Monday pullback).

Jeff Bailey : 8/17/2007 3:22:07 PM

US Rep Frank Urges Senate To Raise GSE Conforming Loan Limit

Jeff Bailey : 8/17/2007 3:20:59 PM

S&P Banks Index (BIX.X) 378.07 +4.23% ... Yes! I consider today's trade a BOLD move.

Jeff Bailey : 8/17/2007 3:18:20 PM

RUT.X 791.90 +3%

Jeff Bailey : 8/17/2007 3:17:38 PM

Dow Industrials (INDU) alert! 13,097.50 +1.98% ... retraces 38.2% of its 7/17/07 high to recent low.

Keene Little : 8/17/2007 3:17:09 PM

I'm still without power and running on battery backup which for some reason on my laptop doesn't enable me to upload charts to the MM. Strange problem with my Cingular wireless card on this computer that I haven't been able to figure out. We're getting another pop higher as we enter the last hour and that should give us the impulsive 5-wave move up from yesterday's low. The move up from yesterday will then be corrected on Monday with a pullback but it will be an opportunity to get long for another leg up.

Jim Brown : 8/17/2007 3:13:06 PM

The S&P-500 is knocking on the 100/130 moving averages (30min) that work so well as resistance and support. A breakout here could run hard into the close. Link

Jim Brown : 8/17/2007 3:09:49 PM

792 broke to the upside just after I made that last post. Note the strength of the single candle beakout. That was the compressed volatility releasing. Link

Jim Brown : 8/17/2007 3:10:00 PM

Russell futures
After all the shorts got blown out at the open the afternoon has been positively boring. I keep thinking we will see an end of day move higher as any remaining expiring option positions are closed. Unfortunately we are not seeing any movement in either direction. Every attempted bounce in the Russell futures is met with a strong imbalance in the market depth with lots of contracts available for sale just under 792. The very narrow range on the ER is squeezing volatility out of the futures but that is likely to result in a major move later today once that pressure releases. I am still favoring the upside but need to be convinced with a move over 792 and then 795 before I will double up on my longs.

Jeff Bailey : 8/17/2007 3:02:19 PM

03:00 Market Watch found at this Link

Jeff Bailey : 8/17/2007 2:41:48 PM

At 10:00 AM EDT, Michigan Consumer Sentiment came in at 83.5. Forecast was 88.5. Previous was 90.5.

Jeff Bailey : 8/17/2007 2:38:36 PM

Have a great weekend Jane!

Jeff Bailey : 8/17/2007 2:38:00 PM

For instance ... those that have been subscribers to OI, or the MM know there is a camp that has been calling for a market plunge for years!

While they have been proved wrong, they are still out there. Even though "new information" was given to them.

Now a credit crunch. New information the last couple of weeks, days and minutes ... mostly "bad news."

As time progresses, market participants obsorb the news, and make ADJUSTMENTS.

Jane Fox : 8/17/2007 2:32:56 PM

Well I am off to Vancouver for a few days so I will see you all on Monday. Have a good weekend everyone.

Jeff Bailey : 8/17/2007 2:32:37 PM

As I scramble to get some new "retracement of the range," I should add that traders/investors DO NOT want to get rid of "old retracements" that they were trading against. THOSE ARE STILL IN PLAY!

Jeff Bailey : 8/17/2007 2:30:40 PM

Just seeing Linda's 09:41:11 ... that's probably why EWJ so weak this morning. Another might be that they were draining liquidity? Again, BOJ doesn't have the wiggle room that others do. They're at 0.50%.

Jane Fox : 8/17/2007 2:21:18 PM

All the other internals are bullish however. Link

Jane Fox : 8/17/2007 2:20:20 PM

VIX is just not going to capitulate today and support the bullish AD line and volume. Link

Jeff Bailey : 8/17/2007 2:18:56 PM

If short ES from 1,447, cover here.

Jeff Bailey : 8/17/2007 2:15:20 PM

At 01:06 PM EDT, RUT.X was trading 786.25.

RUT.X 785.43 here.

Jeff Bailey : 8/17/2007 2:13:24 PM

IRX.X 36.10 ... spent about 10-minutes under 35.92. Dipped under at 01:06 PM EDT.

Keene Little : 8/17/2007 2:10:56 PM

I gave the bullish take on this if this rally can turn into a 5-wave advance off yesterday's low. Here's the bearish take if the bounce from yesterday's low is left as a 3-wave correction--it would be possible to call this bounce another 2nd wave correction within the developing 3rd wave down. Without trying to complicate things it simply means we'll be due a crash leg down and it would happen in the next couple of days.

An interesting statistic from markettells.com warns of that bearish possibility as well. Their database shows 18 instances since 1990 where SPX was lower by at least 1.5% during the day and then finished up less than 1% (so a v-bottom recovery during the day). Out of those 18 occurrences, 16 led to a lower SPX within the next two sessions. Those are high odds. If you're long the market and we don't get another rally leg higher this afternoon, be afraid. Be very afraid.

Jeff Bailey : 8/17/2007 2:08:52 PM

NYSE NH/NL currently 44:130

NASDAQ 63:124

Jeff Bailey : 8/17/2007 2:08:09 PM

Last Friday's Internals Link

Jeff Bailey : 8/17/2007 2:07:17 PM

Anyone know how today's NH/NL match up with last Friday's Fed activity?

Jeff Bailey : 8/17/2007 2:01:40 PM

Anyone making the "tie" with the dynamic day trader's technique? Same thing, just on daily.

Jeff Bailey : 8/17/2007 2:00:24 PM

Getting some "bigger picture" looks withing a range ...

Jeff Bailey : 8/17/2007 1:59:36 PM

Anyone slap a retracement on the OEX?

Jeff Bailey : 8/17/2007 1:58:18 PM

S&P 500 (SPX.X) ... Daily interval bar chart Link

Jeff Bailey : 8/17/2007 1:57:24 PM

SPX chart coming.

Jeff Bailey : 8/17/2007 1:56:22 PM

Anyone short the ES, with tight stop?

Keene Little : 8/17/2007 1:56:02 PM

SPX failed at the projection for two equal legs up from this morning's low (1443.51) so if you shorted that high, keep your stop now just above it.

Jeff Bailey : 8/17/2007 1:55:31 PM

IRX.X 36.10 ... did you get the alert?

Tab Gilles : 8/17/2007 1:44:14 PM

On August 6th the Nasdaq had 532 New Lows! WOW!

And this week it had 10 New Highs....extremes yes. Link Link

Those that follow my charts know that I look at the weekly $NAHGH & $NALOW using a 10-week ema to smooth it out. Link Link Link

Key dates in the past 10 years, where the 10 weeks emas were at extremes and presented buying opportunities. [Date/NewHigh/NewLow/ VXN/$BPNDX/NDX] Jan '08 100/140/35/50/950; Oct '98/25/350/75/20/1250; Oct '01 40/240/70/20/1100; Oct '02 30/190/65/0/800; Sept '04 40/140/25/25/1300; May '05 50/1230/20/35/1400; July '06 50/120/26/25/1450; August 16th, 2007 New High 71, New Lows 215, VXN 35, BPNDX 50, NDX 1850.

$NDX bouncing off of 200-ma: Link

Jeff Bailey : 8/17/2007 1:43:37 PM

Anyone slap a retracement on the SPX?

Jeff Bailey : 8/17/2007 1:41:16 PM

Russell 2000 Index ($RUT.X) ... Daily internval chart with an IRX.X-like retracement to mark the range. Link ... See the "2 level rule" in play today? Similar "rule" as used with my 5-MRT technique.

Remember that last Day Trade short (of four) in CFC that ended up in a loss on 8/15/07? That last trade was after CFC did close 2 levels above.

I would have to think that the RUT.X NEVER closes above 796.24 if the credit crunch can't be overcome. RUT.X has been hardest hit it.

Keene Little : 8/17/2007 1:20:22 PM

If this afternoon's bounce is just a correction then two equal legs up for it should be where it fails. Watch SPX 1443.51 and DOW 13081 to see if the bounce fails at or below there.

Jeff Bailey : 8/17/2007 1:17:08 PM

RUT.X chart coming ...

Jeff Bailey : 8/17/2007 1:16:58 PM

Looking at the RUT.X ... going out the day right around here might be appropriate.

INDU 13,050

SPX 1,442

RUT 790

Keene Little : 8/17/2007 1:13:19 PM

If the market rallies to a new high today, instead of dropping back down, it will leave an impulsive 5-wave climb off yesterday's low. That would be at least short term bullish since it would call for at least another leg up after pulling back to correct the rally from yesterday.

So price action from here will be very telling as to what's next. The only thing we can do now is wait to see what unfolds this afternoon. I like the short side just based on the bear flag appearance but a rally out the top of the flag could get more bears to cover so it's by no means a given that the market will sell off this afternoon.

Jeff Bailey : 8/17/2007 1:07:49 PM

Just because I closed out several puts for some handsome profits yesterday, that doesn't make me a "purma bull." ;)

Jeff Bailey : 8/17/2007 1:05:23 PM

Keene ... you stopped day trading long ago! (wink)

Got your email last night. Thanks!

Jeff Bailey : 8/17/2007 1:03:51 PM

Now things REALLY start to make sense. RUT.X is the WEAKEST.

Keene Little : 8/17/2007 1:03:34 PM

I'm back. Ugh, what a day, full of distractions. Good thing it's just a calm summer Friday with dull trading (wink). OK, after pulling back from this morning's high it's looking like a bear flag pattern and that suggests another leg down this afternoon. I wouldn't be surprised to see the market end the day at the flat line. That would of course be a big disappointment for the bulls. Permabulls will soon learn that not even the mighty Fed can stop the collapse of the credit bubble.

Jeff Bailey : 8/17/2007 1:03:22 PM

Anyone slapped a retracement on their RUT.X chart like the $IRX? 2 Level rule like the 5-mrt?

Jeff Bailey : 8/17/2007 12:59:43 PM

Don't forget! Today's is August option expiration. Might be difficult for the VIX to get in sync with anything today.

As "Dr. J" pointed out, Dr. Bernanke is clever.

Jane Fox : 8/17/2007 12:55:58 PM

I showed this chart a few times yesterday but I think it is worthwhile revisiting. McMillan said in his weekly commentary that he did not think the retest of the SPX's March lows were THE retest. He thinks we need to make another retest and that will be the W bottom we are looking for. He may be right but for now I am looking at this as not a W bottom but a double bottom. It is real strange that the Wilshire 5000 and the S&P 500 both stopped at those March lows. There is a reason for that and all I can do is read the chart and say that it must be were the buyers are waiting. The thing that bothers me so much is the violent rally late day rally yesterday. There had to be a leak of the FED's move. There can be no other explanation. Link

Jeff Bailey : 8/17/2007 12:48:20 PM

Excellent, excellent comments from "Dr. J" ... Understand Dr. Bernanke's strategy.

Understand why "perma bears" dislike the Fed so much.

Understand some of last Friday's commentary regarding the Fed.

Jane Fox : 8/17/2007 12:46:38 PM

Well I was thinking that the AD volume and VIX would get back in sync at some point today but so far they have not and what we have is a serious case of chop.

Jeff Bailey : 8/17/2007 12:40:12 PM

Very different picture isn't it.

Jeff Bailey : 8/17/2007 12:39:27 PM

Now look at the 30-year Yield ($TYX.X) ... as "far off" from the 13-week as you can get.

Jeff Bailey : 8/17/2007 12:36:56 PM

At today's CLOSE, I'll add the HIGH CLOSE, to LOW CLOSE retracement.

Let the MARKET establish the benchmark as it responds/adjusts to today's news.

Jeff Bailey : 8/17/2007 12:35:14 PM

13-Week Treasury Yield ($IRX.X) at this Link

It amazes me how a market knows where it is going, long before it gets there.

Similar to how a Doctor begins to analyze and treat a patient, U.S. markets have been blessed with two very good Doctors, Dr. Greenspan, and Dr. Bernanke.

Like a Doctor, the Fed has many tools at its disposal.

Keene Little : 8/17/2007 12:07:11 PM

I've lost power so will have to go get my backup started. Be back shortly.

Jeff Bailey : 8/17/2007 11:59:59 AM

I'm going to place two different retracement on the IRX.X now. One from peak inflection high lows, another from peak inflection high and low CLOSES.

Jeff Bailey : 8/17/2007 11:58:26 AM

13-week Yield ($IRX.X) down 5 bp now at 3.650% ... "should hang out" here, but certainly get the feel that the short end of the Treasury market had as good a read on the Fed last week, as I yesterday afternoon.

Jeff Bailey : 8/17/2007 11:47:36 AM

This morning's "spike" in PHF looks like just a few retail shorts that panicked at the open. Not a true "bull buy," but a small retail short that didn't know what to make of things.

If a long paying $9.73 this soon, then a silly long.

Jeff Bailey : 8/17/2007 11:43:52 AM

Other bond desks I've talked to this morning ... mostly finds short-term profit taking. You think yesterday's stock decline was weak, multiply it by about 3 for corporates. BIG short-term gains from yesterday finds plenty of offers. Leveraged accounts that have been in trouble, eager sellers too.

Gut feel is that equities bounce around for at least a week, see how bonds do, especially higher-grade corporates that haven't had much of a bid.

Jeff Bailey : 8/17/2007 11:39:10 AM

See how this morning's pullback in the INDU comes right to 200-day SMA? Pivot traders also know where the pullback came to.

Traders should have an idea that the SMALL caps were the focus of professional traders on the short side. Today's Fed decision will bring greater degree of buying, at least from the bear side.

INDU starts showing some closes back above 13,025, that's when the retail shorts should start stepping up their coverning, and new longs start building back positions.

Jane Fox : 8/17/2007 11:24:25 AM

Here are the SPX jtHMA charts. Once the weekly charts turn back green I will be putting my 401(k) money back to work. Link

Keene Little : 8/17/2007 11:16:11 AM

At this morning's pullback low for the DOW it did a retest of its broken downtrend line from the 8th so that's looking bullish so far. But the drop down looks impulsive on the 5-min chart (which is not always reliable) and that suggests lower prices after the current small bounce is finished. If it drops below 12785, the bounce high yesterday afternoon, it will signal that the 3-wave bounce off yesterday's low could remain just a correction to the decline.

Keene Little : 8/17/2007 11:11:59 AM

First thing I see on SPX is that it spiked up to its broken 200-dma and was soundly rejected there. Its broken downtrend line from August 8th now sits near 1416 so if it pulls back to there and finds support then it could be worth testing the long side. But I'll watch the form of this morning's pullback for clues as to how deep it could go.

Jane Fox : 8/17/2007 11:11:20 AM

Here is McMillan's weekly report - it is long but worth the read.

Week after week, this market becomes more volatile. Today's strong turnaround in the broad market was just a case in point. We are going to try to take a slightly longer-term view, even though there are so many gyrations in one week's trading in this current market. Our overall viewpoint is pretty much the same as it has been for some time: we remain intermediate-term bearish, while recognizing that the deeply oversold condition can produce sharp, but short-lived rallies (one of which likely began today).

The S&P 500 Index ($SPX) has been extremely volatile, especially after violating major support at 1430-1440 on Tuesday of this week. That quickly led to a test, and violation of the next support area at 1410 (the area from which the Spring rally was launched), which in turn led to a full-blown retest of the March lows circa 1380 on $SPX. This waterfall decline finally enabled $SPX to correct 10% for the first time in 4-1/2 years, ending the longest hiatus in history between 10% corrections. These facts barely begin to describe what has happened, but let's concentrate on what might happen in the future.

First of all, I do not consider today's retest to be the bottom. It is coincidence that it occurred at about the same level as March, but typically markets don't bottom in a "V" fashion, but rather in a "W" fashion. So, we expect this rally to be strong enough to alleviate the oversold condition, and then for the market to return to the vicinity of the lows for a retest. If the technical indicators are more favorable at that time (i.e. breadth oscillators are higher, $VIX is lower, and so forth), then a true intermediate-term bottom will be at hand. These patterns are often repeated near market bottoms, and these days things happen very fast.

In fact, after the current short-term rally runs its course, and the retest occurs, the point to keep your eye on will be the top of that short-term rally. If the market moves back above there, then a much stronger buy signal will be in place. All of the significant points are marked on the $SPX chart, Figure 1, in February.

As for the other technical indicators, the equity-only put-call ratios have remained steadfastly on sell signals for some time now. They are rapidly moving up their charts, and thus are getting more oversold, but they will not issue buy signals until they roll over and begin to trend downward. Since these are 21-day moving averages, they won't roll over quickly. But, in the course of a retesting of the lows and then a move above the center point of the "W," that might be enough time for them to turn bullish -- much as they did in February.

Market breadth has been abysmal during this decline. In fact, it hasn't been good for a long time. However, breadth was so bad that is was oversold, and helped spur Thursday's rally.

Volatility indices ($VIX and $VXO) shocked traders by exploding to levels not seen in nearly five years. This in itself is an oversold condition of sorts, since $VIX rushed up so far, so fast. A spike peak in $VIX is considered to be a buy signal, and none has been forthcoming -- until today. Today, $VIX rose to 37.50, and closed at 30.83. That, in my opinion, is a spike peak buy signal in volatility, but I suppose for completeness' sake, we'd like to see $VIX close lower tomorrow.

How far could a short-term rally carry? That is very difficult to say. The one last week was good for nearly 70 $SPX points. This one began at 1370 and has already carried 45 points. It is possible that $SPX could challenge the 1430-1440 area or slightly higher on this short-term move.

Keene Little : 8/17/2007 11:08:15 AM

Well, well, well. I see Bernanke capitulated somewhat and paid hommage to the Jim Cramers of the world by laying a reduction in the Fed's discount rate at their feet in hopes of garnering their love and affection. But in the end it's just a salve for their wounded pride, and accounts, as the unwinding process has begun. They'll try like mad to take care of their Wall Street buddies and flood them with liquidity and cheaper money. I think that's what got us here in the first place. Their actions will only make more of an inflationary problem as they try to help out the bankers and hedge fund managers bail out of their mistakes. Shame on the Fed is all I can say.

I'll study the charts and see what this morning's spike up has done to the wave count. Right now, even though it's a big spike up, the bounce off yesterday's low is only a 3-wave move and that leaves it corrective. So it'll be interesting to see what happens from here. If the market ends up interpreting the Fed's action as a panic move (since most other countries are raising rates, not lowering them) then this morning's gain will evaporate in a heartbeat.

Jeff Bailey : 8/17/2007 10:57:19 AM

First bond desk I've talked to so far has prices firming from recent weeks, but not overly stocked with buyers.

Jeff Bailey : 8/17/2007 10:56:10 AM

Swing trade long alert ... for 1/4 position in the Ultra Dow30 ProShares (AMEX:DDM) $86.88 +1.05%. Stop $80. Target $95.

Jeff Bailey : 8/17/2007 10:52:53 AM

Program Trading Collars lifted index-arbitrage buy orders enabled.

Tab Gilles : 8/17/2007 10:42:54 AM

The unwinding of the "yen carry trade" as shown in these 2 charts has for the last 2 years look similar to the SPX chart. Link Link Link

Jeff Bailey : 8/17/2007 10:41:10 AM

I'll be out of the MM here for about 90 minutes. Have some bond accounts that need some attention.


Jane Fox : 8/17/2007 10:35:43 AM

Ya gotta wonder if someone somewhere didn't get wind of the FED cut yesterday. Yesterday was so out of the ordinary and something triggered the buying. NAH!!! Link

Jeff Bailey : 8/17/2007 10:33:48 AM

10-year pulling into DAILY R1.

Jeff Bailey : 8/17/2007 10:33:17 AM

Good area to be long YM

Jeff Bailey : 8/17/2007 10:30:26 AM

NYSE Trading Collars In from the open. It would take a NYSE Comp (NYA.X) of 9,177.10 for collars to be lifted.

Jane Fox : 8/17/2007 10:27:33 AM

I really like the VIX but I see it capitulate a lot easier than the AD volume.

Jane Fox : 8/17/2007 10:27:04 AM

But the AD line and volume disagree. This is the your ultimate bull/bear fight so be careful you do not become collateral damage. One or the other will win and my bets are on the bulls. Link

Jeff Bailey : 8/17/2007 10:26:02 AM

iShares Japan (EWJ) $13.51 -1.38% ... #6 most active.

Jane Fox : 8/17/2007 10:25:42 AM

So far the VIX is telling you the bears are in control. Link

Jeff Bailey : 8/17/2007 10:25:18 AM

Biotechnology Index (BTK.X) 751.12 -0.11% ... slips red.

Jeff Bailey : 8/17/2007 10:24:46 AM

Airline Index (XAL.X) 42.37 -1.32% ... slips red.

Jane Fox : 8/17/2007 10:23:44 AM

ER is the only market to break its overnight high. NQ is back into its PDR now. Link

Jeff Bailey : 8/17/2007 10:23:43 AM

iShares Russell 2000 (IWM) $78.47 +2.24% ... closed out puts yesterday. Came close to target ($0.24).

Jeff Bailey : 8/17/2007 10:21:53 AM

Countrywide Financial (CFC) $20.75 +9.44% ... closed out puts yesterday.

Jane Fox : 8/17/2007 10:21:15 AM

US $ tags is downward trendline and is now finding support at April lows at 81.27. Link

Jeff Bailey : 8/17/2007 10:19:57 AM

Pacholder High Yield (PHF) $9.73 +25.87

Linda Piazza : 8/17/2007 10:19:55 AM

My brokerage's page is telling me that heavy volume on all exchanges is resulting in a fast market. If you're new to trading and didn't trade through the 2001/2002 period, you might not have experienced a fast market. As my broker's window explains, this sometimes results in wide quotes. You can get hit hard in a couple of ways. First, you may not be able to get your limit order filled in a fast market because the prices are moving too quickly and they move away from your limit too fast. You might be forced to put in a market order just to get filled, and you absolutely are not likely to get a good fill that way. When markets are moving fast, market makers are as worried about losing money as you are, and you're not going to get an advantageous price as they want to protect their trading capital, just as you do. So, before you enter that option trade today, thinking that you can exit the moment you spot a likely turn in the market, consider these new concerns. Be careful. Emulate the market maker whose primary task is to protect trading capital. Understand this risk before you invest your money.

Jeff Bailey : 8/17/2007 10:19:34 AM

Oh my!

Jeff Bailey : 8/17/2007 10:16:08 AM

13-week Yield ($IRX.X) up 25 bp to 3.950% ... Excellent decision by the Fed. Responding to market forces.

Jane Fox : 8/17/2007 10:14:27 AM

Here is the daily chart of Crude and its very clear level of support at $70.00. Link

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

NQ tags its PDLs. Link

Jeff Bailey : 8/17/2007 10:07:28 AM

10:05 Market Watch found at this Link

Jeff Bailey : 8/17/2007 10:03:21 AM

Fed's Poole Concerned by rising protectionist push.
Free and open trade a clear benefit for U.S.
Protectionist laws don't work as intended.
All-out trade war seems unlikely.
No comment on monetary policy
Most recent currency changes product of market forces.

Jane Fox : 8/17/2007 10:02:39 AM

AD line is a +2637

Jane Fox : 8/17/2007 10:00:20 AM

BE wary bulls the VIX is making new daily highs. Of course the AD Volume is as well and these two will get in sync at some point but in the mean time we will have chop until they do. This is just probably digesting the enormous gains we have seen already today.

Linda Piazza : 8/17/2007 9:58:30 AM

I wrote last night that we were due for a sharp short-covering rally, one that might have begun yesterday afternoon. I added that bullish traders should remain skittish and make plans to protect profits at key levels. The SPX test of its 200-sma and -ema's is obviously one of those key levels, so bullish traders from yesterday afternoon or even earlier this morning should have profit-protecting plans in place now. The rally could continue, of course, especially if any pop over those moving averages is sustained, but the USD/yen pair is also pulling back now from a key resistance level, so the continuation is uncertain as yet. If anything is certain, it's that this market is volatile and can cover what used to be a day's worth of movement in a matter of moments. It's a time for trading with a plan and for protecting trading capital above all else.

Jeff Bailey : 8/17/2007 9:55:40 AM

XLF-HF $2.30 x $2.65.

Tab Gilles : 8/17/2007 9:53:29 AM

FOMC Statement Link

Federal Reserve Board Discount Rate Action Link

Jane Fox : 8/17/2007 9:41:57 AM

TRIN is totally messed up today. It has spiked to over 9.00 and is now at 0.12.

Linda Piazza : 8/17/2007 9:41:11 AM

I want to offer the smallest of cautions this morning. As those of you who read my Wraps know, I often watch the action of the USD/yen and euro/yen pair, as their movements tend to predict or corroborate equity movements. Although I'm not certain of the ultimate effect on the dollar, this cutting of rates at the discount window today might undercut the strength of the dollar against the yen, particularly since Japan still utters warnings that the global liquidity crunch alone will not stop it from raising rates at its meeting next week, if it decides that's best. These two actions, taken together, would further exacerbate the weakness of the USD/yen pairing, which would worsen worries about the yen carry trade. Ultimately, that might not be good for equities. Central banks still have a lot of tricks up their sleeves, the "spooky action at a distance" of which I've spoken lately, words borrowed from Einstein's worries about quantum theory's implications. If the yen carry trade has truly already been mostly unwound, as some theorize, weakness in the USD/yen or euro/yen pairings might not have the same negative implications it's had recently, but do be careful about your bullish hopes. I'm not an expert in these matters, but just want to offer food for thought.

Jane Fox : 8/17/2007 9:40:07 AM

Needless to say the AD line is bullish but +2144 WOW.

Jane Fox : 8/17/2007 9:13:34 AM

Dateline WSJ - The Federal Reserve has taken an intermediate step, cutting its discount rate to 5.75% from 6.25%, in order to "to promote the restoration of orderly conditions in financial markets." Basically, it's the closest possible thing to an actual cut in the federal-funds target rate without actually cutting that rate, and as such, some see it as more symbolic than anything else - after all, the discount rate is still a penalty rate, higher than the federal-funds rate.

"The Fed's action is analogous to holding the hand of a sick person but not giving him any medicine," write analysts at RT-ICAP.

In a separate statement, meanwhile, the Fed has moved much closer to an easing stance, saying "although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably."

In commentary today, Lehman Brothers chief economist Ethan Harris says he now expects two rate cuts from the Federal Reserve, rather than remaining on hold. "Our new baseline forecast is a replay of 1998 where the Fed cuts to unfreeze the markets- we would expect cuts at both the September and October meetings," he writes.

The discount rate is the Fed's rate on loans to banks, whereas the federal-funds rate is the rate on overnight loans from one bank to another. In addition to cutting the rate, the Fed has increased the length of time it will make loans, to 30 days from overnight, the reason being, according to the Fed, "to provide depositories with greater assurance about the cost and availability of funding."

Jane Fox : 8/17/2007 9:08:27 AM

US $ dropped on the news that the FED lower the Fed Funds Rate, which in turn caused a nice rally in Gold.

The DAX rallied along with the American markets.

I will show you a daily chart of Crude in a minute and its retest of the $70.00 support. Link

Jane Fox : 8/17/2007 9:03:57 AM

Well I certainly don't have to explain this rally do I? Link

Jane Fox : 8/17/2007 9:01:14 AM

Dateline WSJ - WASHINGTON --The Federal Reserve, declaring that increased economic uncertainty poses risks for U.S. business growth, announced Friday that it has approved a half-percentage point cut in its discount rate on loans to banks. The more closely watched fed-funds rate remained unchanged.

The action was the most dramatic effort yet by the central bank to restore calm to global financial markets which have been roiled in the past week by a widening credit crisis.

The decision means that the discount rate, the interest rate that the Fed charges to make direct loans to banks will be lowered to 5.75%, down from 6.25%.

The Fed didn't change its target for the more important federal funds rate, which has remained at 5.25% for more than a year.

However, it has been infusing billions of dollars in money into the banking system over the past week to keep that rate from rising above the target level.

Keene Little : 8/17/2007 7:25:57 AM

The Nikkei ended Friday -5.4% making it the largest single-day loss in seven years. Needless to say that depressed overnight futures which have since rallied off the bottom some. The DOW futures were down almost 200 but are currently down 120 as I type.

Whether we get any follow through to yesterday afternoon's buying is obviously questionable but clearly the volatility makes day trading hazardous (profitable if you can catch the swings right). I still like the short side so look for the bounces to try shorting the market.

I will be away from the market until about 10:30 AM so see you then.

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