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Jeff Bailey : 9/7/2007 12:08:27 AM

Peru Central Bank Increases Reference Rate to 5% From 4.75%

DJ- The board of directors of the Central Reserve Bank of Peru on Thursday increased the central bank's key reference rate to 5% from 4.75%.

Most economists had expected the central bank to leave the rate unchanged after inflation eased in August.

The consumer price index for Lima, which the central bank uses to set monetary policy for the nation, rose by only 0.14% in August, and 2.2% in August on a 12-month basis.

In the three previous months the CPI had gained a monthly average of about 0.5%.

The central bank last increased its reference rate in July, with a 25 basis point hike that surprised observers. That was the first increase since May last year.

The central bank said in July that the interest rate increase was aimed at warding off any rise in inflationary expectations.

The central bank aims to keep annual consumer inflation within a one percentage point range - with 2.0% serving as the midpoint.

Peru's Finance Ministry forecasts inflation of 2.5% for this year and 2.0% for 2008.

Jeff Bailey : 9/7/2007 12:03:44 AM

Japan August FX Reserves $932.16B, Fresh Record High

DJ- Japan's foreign reserves rose $8.44 billion to $932.16 billion in August from July, setting a record high for the third straight month, the Ministry of Finance said Friday.

A drop in U.S. Treasury yields pushed up the overall value of the reserves for the third month running. The 10-year Treasury yield was at 4.533% at the end of August, down from 4.743% in July. Yields move inversely to prices.

Japan parks the bulk of its reserves in U.S. Treasurys.

Japan's reserves, which include convertible foreign currencies, gold and International Monetary Fund special drawings, remained the world's second largest after China, followed by Russia, Taiwan and Korea, according to the latest comparable data from the IMF.

Jeff Bailey : 9/7/2007 12:00:07 AM

Australia Signs Uranium Export Deal With Russia

Keene Little : 9/6/2007 10:53:22 PM

Friday's pivot tables: Link and Link

Keene Little : 9/6/2007 10:42:14 PM

The DOW and SPX continue to sport the same patterns as shown on their 30-min charts and suggests the correction to the sharp leg down from Tuesday's high might have ended today. The DOW has attempted to get back above its broken uptrend line from August 16th but failed again today: Link SPX has been walking up its uptrend line from August 16th but the choppy pattern of the bounce also suggests this trend line is going to break: Link

NDX struggled today with recapturing the mid line of its up-channel shown on its 60-min chart. Resistance here following the choppy bounce also points to another leg lower. Link

The RUT could still rally (along with the rest of the markets) and head up to the 823 area but it needs to giddy up and rally right away tomorrow. Otherwise a break below today's low would likely have it negating the short term bullish (pink) wave count. Link

Following up on Tuesday night's commentary on GOOG and CME, both continue to look like they're about to turn back down, especially after today's bearish engulfing candlesticks (opened higher, made a new high and then made a lower low and closed lower). GOOG's pattern over the past two days makes it look like it may have completed its 3-wave bounce from its August 16th low. Link

It was rejected at 530 today which is the 50% retracement of its gap in July. Any higher than that and it would become more bullish. It's also finding resistance at its 62% retracement of the July-Aug decline. Today looks like a potential key reversal day. Any follow through to the downside, especially below 517, would be a heads up that the next big decline has started.

CME has been pushing up underneath its broken uptrend line from May but today's big red candle is a warning, especially after tagging its 62% retracement of the August decline. That sharp decline followed by a choppy bounce continues to call for another leg down. Link

Jeff Bailey : 9/6/2007 10:42:34 PM

September TD Trade Blotter & Current OPEN MM Profiles that I've made with Targets, and any applicable Stops at this Link

Example: The OLN-AD closed with a bid of $2.50; security itself (OLN) closed $21.51.

Example: The currently naked CQR-UE closed with an offer of $0.35; security itself (CREE) closed $27.80. Should be 2 (not 1) contracts.

Capital at risk for $10,000 account currently $2,415 in LONG options + $4,870 NAKED.

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

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

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

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 9/6/2007 5:33:33 PM

Closing Internals found at this Link

08/24/07 Closing Internals Link

Jeff Bailey : 9/6/2007 5:09:45 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/6/2007 5:00:32 PM

Money Supply figures released ... Link

See some of today's MM comments.

Jeff Bailey : 9/6/2007 4:32:53 PM

Smith & Wesson (SWHC) ... Earnings Press Release Link

Consensus was for EPS of $0.09 on Revenue of $71.86M.

Jeff Bailey : 9/6/2007 4:29:01 PM

Smith & Wesson (SWHC) $20.04 -5.42% ... jumps to $22.00 on headline numbers.

Jeff Bailey : 9/6/2007 4:17:09 PM

National Semi (NSM) ... Earnings Press Release Link

Consensus was for EPS of $0.25 on Revenue of $467.41M

Jeff Bailey : 9/6/2007 4:08:48 PM

National Semi (NSM) $26.58 +0.30% ... Halted on headline numbers.

Keene Little : 9/6/2007 4:06:26 PM

Today was clearly a day of consolidation with a choppy upward correction. Consolidating on top of its August 16th uptrend line the way SPX has done looks bearish and a break below it will be a sell signal. The only question is whether today's high was it for the bounce or whether we're going to see it push up towards 1486 first. Stay tuned as we should get our answer early tomorrow. I'm leaning towards an early breakdown. Link

Jane Fox : 9/6/2007 3:56:25 PM

Economic reports for tomorrow include: 8:30a.m. August Unemployment Rate. Expected: 4.6%. Previous: 4.6%.

10:00a.m. July Wholesale Trade. Expected: +0.5%. Previous: +0.5%.

Linda Piazza : 9/6/2007 3:56:21 PM

What happens overnight tonight? Japan's July Leading Indicators and Concident Indicators will be released. Germany's July Trade Balance will also be released.

Jeff Bailey : 9/6/2007 3:47:43 PM

Shell Argentina Cites Force Majeure With Service Stations

Keene Little : 9/6/2007 3:43:06 PM

If this rolls over from here then support should break and I'll get short once again. Chop chop is the danger to traders today.

Jeff Bailey : 9/6/2007 3:41:41 PM

LEHMAN REVAMPS MORTGAGE OPS, CUTS 850 JOBS

DJ- Financial-services firm's restructuring of its residential mortgage operations will entail cutting 850 jobs and closing its Korean operations as it struggles to adjust to the credit-market turmoil. It also is cutting back its U.S. and U.K. operations.

Jeff Bailey : 9/6/2007 3:26:41 PM

Apple Plans To End Production of 4-Gig Phone that was priced more affordably.

Jeff Bailey : 9/6/2007 3:25:08 PM

Apple (AAPL) $135.20 -1.14% ...

Jeff Bailey : 9/6/2007 3:24:21 PM

Apple Lowers Cost of 8-gigabyte iPhone ... from $599 to $399.

Linda Piazza : 9/6/2007 3:24:20 PM

Just as I suspected would happen, that TRAN potential inverse H&S has gone nowhere, at least not yet.

Jeff Bailey : 9/6/2007 3:19:57 PM

03:00 Internals found at this Link

Jeff Bailey : 9/6/2007 3:19:09 PM

YM Long stop alert ... 13,380

Jeff Bailey : 9/6/2007 3:13:26 PM

YM Long raise stop alert .... to 13,380.

Linda Piazza : 9/6/2007 3:11:20 PM

As happens so often the day before an important announcement or in the hours before such announcement, candles move sideways. Even the Keltner channels that I like so much prove less useful than is typical because the channels all line up in a row, one inside another, while prices move along the lined-up central basis lines. RSI's flatten near 50. It's useless to guess a next direction in a climate like this. All day, the USD/yen has been telling me that a next direction hasn't been chosen since the USD/yen wasn't breaking out, but the SPX certainly keeps trying anyway.

So, it's with some considerable concern that I mention something I'm seeing because I don't want to encourage trades that might go nowhere at all. However, here goes: The TRAN has a sort of inverse H&S on its 15-minute chart, with a neckline near important Keltner resistance at 4845 on 15-minute closes. The TRAN is at 4838.67 as I type, rising toward a test of that neckline. Remember that such formations can be confirmed and then prices can just stop. These formations can be invalidated after brief tests of the neckline area and then a plunge beneath it. In other words, I feel duty bound to tell you what I'm seeing, but I'm not rushing into the market with any new plays myself and I'd advise just sitting pat if you're not too much of a Type A to do that, too. Anyway, you can watch this for guidance, either direction you're leaning.

Keene Little : 9/6/2007 3:10:36 PM

A more complex bounce pattern points to SPX 1486 as a level I might look at it again. For now we've got someone holding this up so it's not worth fighting it.

Keene Little : 9/6/2007 3:08:00 PM

This afternoon's dip had SPX testing its uptrend line from August 16th again and it continues to hold. It's not looking good for a bearish play here with the market pushing higher again. It's a choppy climb and therefore I don't like the long side but at this point I'm stepping aside and I'll wait for support to break.

Jeff Bailey : 9/6/2007 3:03:08 PM

03:00 Market Watch found at this Link

5 and 30 year Net/Net% incorrect.

Jeff Bailey : 9/6/2007 3:00:08 PM

YM Long alert! ... here at 13,374. Stop 13,359. Target 13,450.

Jeff Bailey : 9/6/2007 2:52:15 PM

Fed's Fisher:

What Fed says important as actual policy move.
Inflationary forces "increasingly well behaved."
Fed's job is to keep inflation contained.
"Listening very carefully" to business conditions.

Linda Piazza : 9/6/2007 2:43:03 PM

Sideways into the jobs number tomorrow? The action of the USD/yen certainly supports that as a possibility. No breakout yet.

Jeff Bailey : 9/6/2007 2:36:08 PM

US DATA SUPPORT VIEW OF 'LIMITED' HOUSING EFFECT

DJ- Economic reports ease worries about the state of U.S. labor markets and consumer as well as some longer-term concerns about economy's ability to grow without inflation. Data don't suggest a desperate need for a dramatic rate cut.

Jeff Bailey : 9/6/2007 2:33:38 PM

RBC To Buy Alabama Natl. For $80/Share

ALAB $77.02 +44.99% ...

RY $51.13 -0.67% ...

Keene Little : 9/6/2007 2:32:23 PM

Assuming we'll get a drop back below the low around 1:30 that's when you can lower your stop to just above this bounce high. After a new low if it were to turn around and push back to a new high it would leave a corrective 3-wave pullback from today's high and that would say bears need to get out of the way.

Keene Little : 9/6/2007 2:30:13 PM

The bounce here should fail to make a new high so it's another good place to try a short play with your stop at a new daily high.

Keene Little : 9/6/2007 2:29:03 PM

I'm back. After reading Fed's Lockhart's comments about his confidence that the global economy will remain strong I could be forgiven for asking about their confidence that the subprime problem wouldn't spread to any other investments. Pardon my cynicism but I don't exactly trust Lockhart's confidence in this area. Or that they will be able to stave off the liquidity crisis and resulting recession. History is not on their side on this.

Jeff Bailey : 9/6/2007 2:19:16 PM

Hedge Funds Expand In Primary Lending

DJ- Hedge funds and some private-equity firms are capitalizing on the wave of risk aversion by positioning themselves as direct lenders to companies that are having trouble borrowing money from banks or through the bond market.

Tab Gilles : 9/6/2007 2:14:05 PM

Weekly EIA Report Link

Jeff Bailey : 9/6/2007 2:13:23 PM

SLM $49.34 +0.48% ...

STU $196.10 +0.50% ...

NNI $18.05 -0.33% ...

Jeff Bailey : 9/6/2007 2:12:04 PM

Representative Miller: President Bush will sign student lending bill.

Jeff Bailey : 9/6/2007 2:10:13 PM

Fed's Poole:

Can't be slave to market expectations, but important
Don't think markets going to push Fed into any decision
Good thing if policy side effect helps market
Problem with rating agencies is securities issuers pay.

Jeff Bailey : 9/6/2007 2:05:26 PM

"Bad tick" in SLM to $45.55 ... SLM $49.50 +0.81% ...

Jeff Bailey : 9/6/2007 1:59:29 PM

Fed's Lockhart:

Will do what's necessary for liquidity
Housing downturn will last longer
Fed will do all possible to avoid recession
Impressed with resilince of US economy
Fed must focus on long-term mission
Encouraging signs that CP market stabilizing
Confident global economy will remain strong

Keene Little : 9/6/2007 1:39:18 PM

Stepping away for about an hour. Don't let them rally this and stop me out. I might have to then kick my cat and I don't have one.

Keene Little : 9/6/2007 1:33:26 PM

While there are several layers of support below, I'm anticipating a drop that gives us at least two equal legs down from Tuesday's high. Link

SPX still has support at its uptrend line from August 16th, currently near 1473. Then its broken downtrend line near 1457. Then two equal legs down just above 1451. Then the bottom of a parallel up-channel based off the trend line along the highs since August 17th, currently near 1449. Then 1433 where the 2nd leg down would equal 162% of the 1st leg down. Then 1432, the previous low on August 28th. If all of those break then the bears can claim they da man. But until that happens watch each and every support level carefully (assuming we get to them).

Linda Piazza : 9/6/2007 1:29:15 PM

Still no breakout on the USD/yen. It's at 115.25.

Jeff Bailey : 9/6/2007 1:19:31 PM

01:00 Internals found at this Link

Jeff Bailey : 9/6/2007 1:05:01 PM

01:00 Market Watch found at this Link

Linda Piazza : 9/6/2007 12:50:34 PM

The USD/yen is now at 115.35, still not having broken to the upside out of that rectangular trading range. The TRAN has not maintained prices above that 4818-4822 range. It's currently back in that range, retesting it.

Keene Little : 9/6/2007 12:49:45 PM

I was getting a little worried there but now with this drop you should have your stop just above today's high. This is a setup for a big decline so I'm not going to manage this one tightly. I'm looking for a decline that takes out yesterday's low and keeps going.

Jeff Bailey : 9/6/2007 12:47:34 PM

YM 13,378 ... would protect bullish gains.

Jeff Bailey : 9/6/2007 12:41:21 PM

YM day trader's 5-minute interval chart Link

Jeff Bailey : 9/6/2007 12:37:41 PM

Note this morning's 10:15 AM EDT YM kiss of WEEKLY pivot and bid back through DAILY Pivot. That was your kiss goodbye and excellent short-term entry point. DAILY R1 here. Stops can be snugged up under 13,380.

Keene Little : 9/6/2007 12:29:07 PM

50% of yesterday's gap closure for ES is at 1485. That's about the most I like to see to stay on the bearish side. Once it gets through the 50% level there is a higher likelihood that we'll see the gap get closed (at 1489.50). The high so far is 1484.50, two ticks below the 50% line. Short against the last high with a stop at 1486 is a good play here. It's got to tip over now otherwise step aside.

Keene Little : 9/6/2007 12:20:08 PM

Any higher than SPX 1483 will have me backing away and watching for a while since it will doing something more bullish than I'm expecting here. So this is the last short attempt for now.

Keene Little : 9/6/2007 12:18:48 PM

We got the little consolidation and now another high. This finally looks like it could be the 5th wave of the move up from this morning's pullback so you should have been stopped out by this new daily high but now watch for negative divergences against the high and try a short again. SPX 1480-1483 looks like a good Fib resistance area.

Linda Piazza : 9/6/2007 12:16:45 PM

Still no breakout on the USD/yen to match the attempted SPX breakout of its rectangular trading range. In fact, is that a rectangular range on the SPX or a widening or broadening pattern? USD/yen at 115.31, still within striking distance of a breakout, but if so, it's going to be following and not leading today.

The good news for SPX, OEX and Dow bulls is that the TRAN keeps charging up toward the previous HOD.

Jeff Bailey : 9/6/2007 12:01:57 PM

Disclosure: I currently hold bullish position(s) in GG

Jeff Bailey : 9/6/2007 12:00:06 PM

Swing trade bullish call alert! ... for two (2) of the Goldcorp GG Jan08 $25 Calls (GG-AE) at the offer of $3.00.

GG $25.61 +6.79% ...

No stop for now. Target $33.00.

Keene Little : 9/6/2007 11:55:59 AM

It's not a clean 5-wave move up as the DOW and SPX both tag their Fib projection targets but this is the first place to test the short side with a relatively tight stop.

Linda Piazza : 9/6/2007 11:49:22 AM

The USD/yen is at 115.38. It hasn't broken out of its rectangular band from yesterday morning through the overnight session and this morning, but rises toward a challenge of resistance, now extending up to 115.61 on 15-minute closes.

Jane Fox : 9/6/2007 11:47:11 AM

No market has broken its PDH yet but it looks like S&P and DOW are in a race to be the first. Link

Keene Little : 9/6/2007 11:36:09 AM

I'd like to see a small consolidation and then another new high so that we get a clean 5-wave move up from this morning's pullback. That would be a good finish to the bounce and an excellent opportunity to try a short again.

Linda Piazza : 9/6/2007 11:34:21 AM

The TRAN has just closed a 30-minute period above the support/resistance now at 4824.63 on 30-minute closes. It's moving right up into another resistance band, so it needs to maintain these values and keep climbing to keep supporting the idea that the SPX, OEX and Dow will continue to make gains.

USD/yen at 115.34 as I type. This has not broken out of its rectangular band yet, so it's not yet predicting equity breakouts, either.

Keene Little : 9/6/2007 11:34:00 AM

It's definitely looking like a corrective sideways/up consolidation since yesterday's low and that's why I'm not looking for a long play. Two equal legs up for the DOW is at 13378 so it's still at the same projection I had earlier and essentially at its 50% retracement of the decline. If it keeps going then up to 13450 could be next. But a another retest of its broken uptrend line from August 16th is near 13369 so there are a few reasons to like the 13370-13380 area for a short play.

Keene Little : 9/6/2007 11:28:32 AM

Looks the market has more bullish ideas for now. The next test for the bounce will be where it has two equal legs up from yesterday's low. For SPX that's at 1478.73.

Jeff Bailey : 9/6/2007 11:25:44 AM

11:00 Internals found at this Link

Jeff Bailey : 9/6/2007 11:07:55 AM

11:00 Market Watch found at this Link

Keene Little : 9/6/2007 11:06:51 AM

SPX was rejected at the new downtrend line from Tuesday's high through this morning's high, near 1474. That's a good place to be short with a stop just above the 1474.35 bounce high. Any higher and we'll probably see new daily highs.

Jeff Bailey : 9/6/2007 11:03:47 AM

Swing trade put alert! ... for one (1) of the SLM Corp. SLM Oct $45 Puts (SLM-VI) at the offer of $2.35.

SLM $48.91 -0.38%.

No stop for now. Target $39.00 in the underlying.

Jane Fox : 9/6/2007 10:47:41 AM

Dateline CNN - Luciano Pavarotti, one of the world's most beloved tenors, has died, according to The Associated Press.

Jane Fox : 9/6/2007 10:46:30 AM

Most hedge funds have anywhere from a 1- to 3-year lockup agreement with investors, and Trim Tabs estimates redemptions in August will be significantly higher.

Jane Fox : 9/6/2007 10:45:54 AM

Hedge fund redemptions topped $32 billion in July, according to the latest data from Trim Tabs. Hardest hit were funds of hedge funds. They lost $55 billion.

Linda Piazza : 9/6/2007 10:42:30 AM

USD/yen at 115.33, still churning around in the rectangular pattern it's been building since Wednesday morning. That pattern extends from about 155.54 on the topside down to 114.90-115.00 on the downside.

Jane Fox : 9/6/2007 10:41:13 AM

SAN FRANCISCO (MarketWatch) -- Gold futures rallied to trade just below $700 an ounce Thursday, boosted by dollar weakness, strength in oil prices, very strong physical demand and safe-haven buying.

Jane Fox : 9/6/2007 10:40:42 AM

LONDON (MarketWatch) -- The Bank of England on Thursday kept its key interest rate unchanged at 5.75% as it continues to gauge the impact of the recent credit market turmoil and a sharp drop in inflation.

The decision was widely expected following five rate hikes since August last year and came a day after the central bank moved to reduce overnight borrowing costs by increasing the level of reserves commercial banks can hold with it.

Jeff Bailey : 9/6/2007 10:40:19 AM

BOE Holds Rates at 5.75% ... Reuters Story Link

Linda Piazza : 9/6/2007 10:39:59 AM

The TRAN bounces after the inventory report came out. It could find resistance in the 4810 and then 4820-4823 levels, so those hoping for bullish performances in the SPX, OEX and Dow want to see the TRAN handily move above those levels and maintain them on 30-minute closes. Otherwise, the downtrend is maintained. The TRAN is at 4802.22 as I type.

Jane Fox : 9/6/2007 10:39:59 AM

CHICAGO (MarketWatch) -- Mortgage rates showed little change this week, according to Freddie Mac's weekly survey, with the 30-year fixed-rate mortgage averaging 6.46%, up from last week's 6.45%. The mortgage was at a similar level a year ago, when it averaged 6.47%.

"Over the past week, long-term mortgage rates were largely unchanged as the most recent economic news showed smaller increases than had been expected," said Frank Nothaft, Freddie Mac chief economist, in a news release

Keene Little : 9/6/2007 10:39:40 AM

Linda, thanks for digging out the data on the Fed's repos. The calculated M3 charts that I've been showing are only updated at the end of each Friday and it's helpful to see what the Fed is doing each day. It appears they continue to attempt to reflate the monetary system.

The bigger question is what's happening with that money. We know some of it makes it into the system through the primary dealers and into the markets. A lot of it is given to banks in hopes they'll lend it out and relieve the liquidity crisis in the commercial paper arena (which are short term loans backed with collateral such as mortgages).

Unfortunately the evidence suggests that the banks are hoarding the cash instead (they're fearful about lending it out and being stuck with more bad loans and would rather have the cash in case of a rainy day). This calls into question how successful the Fed (and other central banks) will be in their efforts to reflate. My opinion is that they won't be successful as fear has now taken over (which is more powerful than greed).

Jeff Bailey : 9/6/2007 10:39:01 AM

ECB Holds Rates at 4.0% ... Reuters Story Link

Jane Fox : 9/6/2007 10:37:52 AM

And of course if you see a rally in Gold the US$ will be down. These two trade opposite to one another almost 100%. Notice I said almost because the rally in Gold today is being helped by the rally in Oil. Oil and Gold also have a very close relationship but it is a direct relationship. Link

Jane Fox : 9/6/2007 10:34:31 AM

Oh my goodness gracious. Last month the Hedge funds were throwing the baby out with the bath water and dumping everything that was liquid to satisfy all the redemptions. However, it now looks like they are all getting back into the market and buying Oil and Gold. Link

Jane Fox : 9/6/2007 10:27:59 AM

AD line fell to under 0, made a daily low of -715 and is now currently at -563.

Jane Fox : 9/6/2007 10:26:11 AM

Crude is marching up to new daily highs and breaks the $77.00/bl level.

Jane Fox : 9/6/2007 10:18:53 AM

Both the SPX and DOW have not yet even tested their respective August 8th highs Link Link

Jane Fox : 9/6/2007 10:17:41 AM

The Russell 2000 has broken its August 8th highs but not closed above. Link

Jane Fox : 9/6/2007 10:17:05 AM

NDX daily chart has already closed above its August 8th highs. Link

Linda Piazza : 9/6/2007 10:12:59 AM

The TRAN is still dropping heavily, at 4784.55 as I type. What's the significance of this? If you're in an SPX, OEX or Dow trade, don't count on a bounce sticking until and unless the TRAN's pattern improves. The crude inventories report sometimes changes the TRAN's pattern.

Jane Fox : 9/6/2007 10:11:03 AM

Russell 2000 futures break its PDL and the NDX futures are testing its PDLs. Link

Linda Piazza : 9/6/2007 10:10:16 AM

I just checked back a few weeks on the repos. Although today's $31.250 billion in repos is a lot, it's not a record, not even a recent record. On August 10, the Fed made a total of three repos that totalled $38.00 billion. From the best I can tell (searching records through to the beginning of July), most of that was a net add, too, in the amount of $26.00 billion, unlike today, when most of the $31.250 billion went toward the $30.000 billion in maturing repos.

Keene Little : 9/6/2007 10:10:09 AM

Note the nice retest of the DOW's broken uptrend line from August 16th and the kiss goodbye. That was your short entry. Link

Keene Little : 9/6/2007 10:08:28 AM

The bounce for SPX off yesterday morning's low seems very shallow, especially for a 2nd wave correction (if that's what it is). A break of its uptrend line from August 16th, currently near 1470, would be a heads up that it's going to break down. A break of yesterday's 1466.34 low would be confirmation. But until it breaks down it's possible we're going to see a choppy day as it consolidates further. Link

Jane Fox : 9/6/2007 10:08:24 AM

Internals are telling you it is OK go back in the water as long as you stay short. Link

Linda Piazza : 9/6/2007 10:03:00 AM

The Fed has just announced another repo, this one in the amount of $8.250 billion. As per the calculations in my 9:28:29 and 9:48:08 posts this morning, this now results in a net gain of $1.250 billion. The Fed's repos for the day total $31.250 billion. Whew. That's a lot.

Keene Little : 9/6/2007 10:00:12 AM

ES will retest its broken uptrend line near 1476.50-1477.00 so watch for a short play to set up there if tagged.

Jane Fox : 9/6/2007 9:59:58 AM

Look at the Crude Oil rally. I suspect it will retreat before it takes another run at yearly highs at 78.77 but the support at $74.00 should hold. Link

Linda Piazza : 9/6/2007 9:59:28 AM

The TRAN is dropping heavily, having dropped out of that bearish right triangle that I was watching yesterday. It's at 4801.98 as I type. The crude inventory report was delayed by the holiday until today and that report sometimes either changes the TRAN's pattern for the day or accelerates it. I can't predict which it will do today, but I can warn that you be aware that it could have an impact on the TRAN.

Keene Little : 9/6/2007 9:56:40 AM

Futures were the first to break their uptrend lines and now SPX is breaking its trend line. The DOW should be next. Short the bounces from here and I'll be watching what form the decline takes to see if it's going to be just part of a larger consolidation or the start of a larger decline.

Jane Fox : 9/6/2007 9:50:45 AM

Here is your 1 minute chart of the VIX and S&P futures. Link

Keene Little : 9/6/2007 9:49:51 AM

I like to use the cash indices for most of my analysis including trend lines (due to their different opening and closing times). So the little uptrend lines from yesterday afternoon that I'm watching are now at DOW 13300 and SPX 1472.30. A break below these levels would signal we've probably seen the high.

Jane Fox : 9/6/2007 9:49:39 AM

VIX is climbing (bearish) but the AD volume is also climbing (bullish) and when these two are not in sync we have chop and it is not an environment to trade.

Linda Piazza : 9/6/2007 9:48:08 AM

The Fed has just announced another repo for today, this one in the amount of $16.000 billion. As per my 9:28:29 post this morning, however, that still leaves a $7.000 billion net draw for the day.

Jane Fox : 9/6/2007 9:46:57 AM

AD line opened at +902 but has fallen to +467 and is continuing to fall.

Linda Piazza : 9/6/2007 9:45:59 AM

USD/yen now at 115.32, near the top of the rectangular range it's been building since yesterday morning, treading water in that range during the overnight session.

I wanted to say something about those overnight sessions. When some look at U.S. futures, they think of the overnight sessions as lighter-volume sessions, sessions that perhaps are not as trustworthy as the cash-market sessions. However, the forex markets are somewhat different. For example, if you're looking at the USD/yen, any time that either the U.S. markets or Japanese markets are open, forex traders (including governments) can be quite active in that market and announcements can impact the trade. In another example, if you're trading anything related to the euro, such as the euro/yen, you'd better plan on getting up in the wee hours of the night and watching as European markets open. Therefore, when I'm looking at what the USD/yen does, I include all prices, not just those during our cash open.

Keene Little : 9/6/2007 9:42:42 AM

Keep an eye on the uptrend lines from yesterday afternoon since they shouldn't break until we've made the high for the bounce. If they do break then we will have seen the highs and it will be time to short the next bounce.

Jane Fox : 9/6/2007 9:38:53 AM

Dateline WSJ - Retailers saw generally strong back-to-school results, led by Wal-Mart Stores Inc. beating expectations, despite some fears that the credit crunch may have put a lock on consumers' wallets last month.

The rich also continue to show little concern for macroeconomic worries. Saks Inc. posted an 18% rise in August same-store sales, double analysts' expectations. Nearly everything sold well at the company's Saks Fifth Avenue stores, notably shoes, apparel and fine jewelry.

Wal-Mart posted a 3.1% increase in U.S. same-store sales, excluding fuel sales, much stronger than the 1% to 2% growth it projected last month. The company said back-to-school shopping drove sales, with notable strength in electronics, school supplies and children's apparel.

In addition to a seasonal boost, Wal-Mart added its recent push in cutting prices helped increase sales of domestics, including bedding, bath towels and plastic storage and organization items.

Jane Fox : 9/6/2007 9:29:29 AM

NEW YORK (MarketWatch) -- Crude-oil and other energy futures rose sharply early Thursday, supported by expectations that U.S. crude and motor gasoline inventories declined in the latest week.

Crude oil for October delivery rose $1.14, or 1.5%, at $76.88 a barrel on the New York Mercantile Exchange. On Wednesday, crude futures climbed 65 cents to close at $75.73 a barrel.

"Crude hit a five-week high on expectations for a further inventory draw-down in today's EIA [Energy Information Administration] report," said analysts at Action Economics.

Jane Fox : 9/6/2007 9:28:41 AM

WASHINGTON (MarketWatch) -- The number of U.S. workers applying for jobless benefits saw its biggest drop since April last week, according to Labor Department data released Thursday.

First-time claims for state unemployment benefits fell by 19,000 to 318,000 for the week ending Sept. 1. The drop in claims is down from a revised 337,000 in the prior week, the Labor Department said.

This was the first drop in jobless claims after five straight weeks of increases. Initial claims are at the lowest since the week ended Aug. 4. The four-week average of new claims, considered a more accurate indicator because it smoothes out events like holidays and strikes, rose by 500 to 325,750. This was the highest reading since April 28.

Linda Piazza : 9/6/2007 9:28:29 AM

The Fed has announced a repo today in the amount of $7.000 billion. Maturing today are repos in the amount of $8.500 billion from yesterday, $5.000 billion from Tuesday, $9.500 billion from August 27, and $7.000 billion from August 23. Unless I've made a mistake somewhere, that leaves a $23.000 billion draw. Whew! The Fed needs to do better than it's done so far, or that looks like a significant net draw for today. If it's going to add more, we should know a few minutes after the opening.

Jane Fox : 9/6/2007 9:27:18 AM

Crude Oil broke its previous day high (PDH) overnight and hit a high of 76.46. Needless to say the bulls have control in this market.

The DAX's overnight pattern was the same as the DOW's just a tad lower for it broke its PDL overnight and the DOW did not. Also the DOW is now testing its overnight highs and as you can see the DAX is not.

US$ is almost testing its overnight high and should put a dampening on the Gold rally. Link

Jane Fox : 9/6/2007 9:18:45 AM

NQ is now breaking to new overnight highs.

Jane Fox : 9/6/2007 9:18:26 AM

All the markets had quite an impressive bounce off the overnight lows at made at 8:00EDT. The NDX futures (NQ), the strongest market overnight, is testing its overnight highs but can't seem to break through. Link

Keene Little : 9/6/2007 9:15:35 AM

The same projection for ES is to 1482.50 which is also just a little higher than the overnight high. For the DOW and SPX those projections are at 13375 and 1478.90.

Keene Little : 9/6/2007 9:13:04 AM

The kind of bounce pattern off yesterday morning's low has been giving me the impression that we're going to see a push higher this morning that then gets reversed into some hard selling. The 2nd leg of the bounce for YM would achieve 162% of the 1st leg at 13396 which is right on top of the 50% retracement of the decline from Friday's high and is at the bottom of yesterday's gap down: Link

So that's the setup for a short play and I think it will be worth a try (it could be setting up for a gap n crap now). The risk is for YM to head up to close the gap at 13458 and that big a bounce would be a lot more bullish and I don't think I'd try shorting it (except maybe a quick scalp).

Jane Fox : 9/6/2007 9:12:14 AM

Dateline WSJ - WASHINGTON -- U.S. productivity advanced at a rapid pace last quarter as economic growth accelerated, while labor cost growth slowed, according to revised data released Thursday by the Labor Department.

Still, the productivity rebound is unlikely to ease worries about the economy's ability to expand without inflation. Many economists, including Federal Reserve staff, think the economy's so-called growth potential has fallen in recent months.

Nonfarm business productivity rose at a 2.6% annualized rate between April and June, the Labor Department said Thursday. It was previously estimated at 1.8%.

Productivity, or output per unit of labor, advanced just 0.7% in the first quarter, which was not revised.

Last quarter's productivity gain was above Wall Street expectations of a 2.4% increase. Economists expected an increase from the previous estimate after gross domestic product growth up in the second quarter was revised up to 4%.

Keene Little : 9/6/2007 8:33:28 AM

It looks like it was an active overnight session for equity futures. DOW futures swung 86 points high to low and now they're working their way back to the flat line. It leaves a fairly wide range for us to guess which direction after the cash market opens so we'll need to let the dust settle after the open to see who's in charge.

Linda Piazza : 9/6/2007 7:50:28 AM

Both the ECB and the BOE have left their rates unchanged. ECB President Trichet will have a press conference in about 35-40 minutes and that will be a focus of interest in Europe and perhaps in the U.S.

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