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Keene Little : 9/7/2007 11:00:51 PM

Monday's pivot tables: Link and Link

Keene Little : 9/7/2007 10:10:51 PM

As I showed on the NDX 60-min chart at the end of the day Friday ( Link ) it looks like it's in the middle of a 4th wave correction that might give us a little pop on Monday morning before heading lower to finish a 5-wave move down from Tuesday, Sept 4th (or it might just head lower right away and not give us a little pop first). After the 5-wave move down completes (assuming we'll get the new low) then we'll get a larger bounce to correct this past week's decline.

Looking over the SPX chart I could easily argue two different counts, both bearish until I see something change in the price pattern. The first one is the same as the one on NDX (dark red) but the pink one is more immediately bearish as it counts this week's move down as a 1-2, 1-2 wave count which means Friday afternoon was just the start of a stronger 3rd of a 3rd wave down: Link

I don't show a small bounce first on Monday but that remains a possibility. The dark red count calls for a low near SPX 1440 followed by a bigger bounce into mid week, perhaps up to the 1470 area, before tipping back over. The more bearish pink count calls for a hard decline on Monday that then stair-steps lower through next week. I then used Fib price and time relationships between the waves to make a projection for each wave count: Link Because of the small degree of the wave count, the difference between the two becomes somewhat neglible by the 3rd week of the month. What's interesting is how the counts landed on September 18th which is of course the next FOMC announcement. The pink count shows a positive reaction to the announcement while the dark red count shows a negative reaction (initially).

This is of course all speculation at this point but it will be interesting to see how Monday unfolds and then watch how the wave pattern develops as we get closer to the 18th.

OI Technical Staff : 9/7/2007 9:59:59 PM

The Market Monitor has been archived.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

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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.

Keene Little : 9/7/2007 4:56:30 PM

NDX looks like it might be in a 4th wave consolidation for its move down from Tuesday's high. A little bounce on Monday would be followed by new lows in that case. A downside target near 1920 could be then be followed by a larger bounce. Link

Jeff Bailey : 9/7/2007 4:55:32 PM

Thanks Linda! ... I used those in my current tabulation anyway (from your wrap) when I returned last weekend.

Linda Piazza : 9/7/2007 4:40:21 PM

Jeff, I'm sorry. I was doing some research and missed your 4:14:17 post. My information was from Yahoo. I do have to say that I experienced some days last month when I was sure that the data wasn't accurate, but that's the only time when that has occurred.

Tab Gilles : 9/7/2007 4:30:12 PM

Watch $ALUM, Aluminum is a necessary base mental and a driver of global growth. Lets see if it can start rallying here. This chart has the EUR/YEN, SPX and $ALUM. Link Link

Jeff Bailey : 9/7/2007 4:23:34 PM

There really are four different markets ... There's the "BIG board", then the NASDAQ, then the AMEX, and then the BB

Jeff Bailey : 9/7/2007 4:20:52 PM

I will say this though ... I like Yahoo's new intra-day format. Breaking out NYSE, AMEX, NASDAQ and BB Link

Jeff Bailey : 9/7/2007 4:18:34 PM

InvesterTech's NH/NL for NYSE yesterday was 36:31. I've had to start using Yahoo's again (last several weeks) as they at least give us the intra-day updates.

Yahoo's has historically reported "greater" number of new highs and new lows each day relative to InvesterTech's, but better to have intra-day than nothing.

Jeff Bailey : 9/7/2007 4:14:17 PM

Linda! In your 8/30/07 Wrap, did you get the NH and NL from InvesterTech? Or Yahoo!?

Jeff Bailey : 9/7/2007 4:11:29 PM

Bugger is going to hold 8/30/07 close.

Jeff Bailey : 9/7/2007 4:08:13 PM

Buy Program Premium ... SPY $145.98

Tab Gilles : 9/7/2007 3:58:39 PM

Heres a small cap technology company I've had on my watch list; Ansoft (ANST). Bucking the trend today...hmmmm? Link Link

Keene Little : 9/7/2007 3:57:56 PM

With this little short covering jump into the close that should have knocked you our of your short position. Now take home a couple of puts just in case there's more follow through on Monday and call it a day.

Jeff Bailey : 9/7/2007 3:56:42 PM

GoldCorp (GG) and a "similar" bar chart (ranges) to GLD that I've shown before Link

Linda Piazza : 9/7/2007 3:56:09 PM

I've been looking at weekly Keltner candles for some of the indices. Here's the SPX: Link and the RUT: Link

Jeff Bailey : 9/7/2007 3:50:08 PM

"Ping" from MONTHLY Pivot (1,449.52) ... SPX 1,453.81 -1.67%

Jeff Bailey : 9/7/2007 3:44:59 PM

Jane ... your reputation is great regardless.

Tab Gilles : 9/7/2007 3:44:37 PM

Sept/Oct is usually abearish time for equities, looking at these charts indicates that.

Note the double top @ 5.2 and now 4.4 support TNX:: Link

$SPX may retest March & August lows. Link Link

Rate cut expectations have rallied the gold sector. Link

Financials remain weak. Link

Jane Fox : 9/7/2007 3:43:00 PM

SPX hanging on my the hair on my chinny chin chin. Link

Jeff Bailey : 9/7/2007 3:40:54 PM

Throw the "BIDU" out with the bath water!

Jeff Bailey : 9/7/2007 3:39:27 PM

Manpower (MAN) $63.95 -3.22% ... O gets the square.

Keene Little : 9/7/2007 3:39:00 PM

As we head into the close now and in case we're into the 5th wave down for the decline from yesterday, I'd now use a downtrend line along the highs since the high near 1:00. Take as much profit as you can out of this without letting it bounce too much against you. Sometimes short covering rallies into the close (not that I'm expecting one) can do some real damage to your short position.

Jeff Bailey : 9/7/2007 3:38:15 PM

$HUI.X 357.37 +0.02% ... now the baby is holding onto the side of the tub. (see 02:01:24)

Jeff Bailey : 9/7/2007 3:36:07 PM

Was watching "The Longest Yard" the other night.

Jeff Bailey : 9/7/2007 3:35:37 PM

Still got 25-minutes Jane! ... ;)

Jeff Bailey : 9/7/2007 3:34:44 PM

StreetTracks Gold (GLD) $69.27 +0.59% ... Daily Interval chart Link

Jeff Bailey : 9/7/2007 3:27:49 PM

03:00 Internals found at this Link

Jane Fox : 9/7/2007 3:24:01 PM

Ok so can I maintain my reputation since only 2 of the 4 markets we watch made new daily lows?

Jeff Bailey : 9/7/2007 3:23:44 PM

Into the close ... gold bugs may want to use the same chart I showed back in June of last year.

GLD $69.28 +0.60% ... the $72.26 high to $55.05 low.

On 5/17/06, GLD traded the $70.00 level and closed at lows of the session. But the CLOSE below $68.97 was "key." As was the extent of the move from at $57.00 break to new highs.

Gold has been building a nice base February and started to beak out yesterday.

Jeff Bailey : 9/7/2007 3:07:48 PM

Its WEEKLY S1 $13.77. WEEKLY Pivot $13.94 gave way after Tuesday's trade.

Linda Piazza : 9/7/2007 3:06:21 PM

The SPX and OEX just hit that Keltner 15-minute support channel line that bounced it earlier this morning (see my 12:23:35 post), with the Dow breaking through its congruent channel line momentarily. All are attempting bounces from that Keltner support. That's at 1451.54 on 15-minute closes for the SPX.

Jeff Bailey : 9/7/2007 3:05:56 PM

EWJ $13.61 -0.87% ... its session low has been $13.58.

Jane Fox : 9/7/2007 3:04:11 PM

S&P and DOW futures make new daily lows but the Russell and NDX futures only test and do not break daily lows. Link

Jeff Bailey : 9/7/2007 3:04:07 PM

03:00 Market Watch found at this Link

Keene Little : 9/7/2007 3:03:04 PM

It looks like we're getting the 5th wave down and the downside target could be as low as 1432 which happens to be the August 28th low. If we're starting the 3rd of a 3rd wave down then that level will only be a speed bump. But for now watch for bullish divergences at a new low and prepare to take profits for the weekend. You may want to take a couple of puts home with you just in case we're into the more bearish wave pattern (which would suggest a strong down day on Monday).

Jane Fox : 9/7/2007 3:02:22 PM

... and the DAX only tested its lows.

Jane Fox : 9/7/2007 3:02:05 PM

Isn't it interesting though the USDJPY did not make an new daily low.

Jane Fox : 9/7/2007 3:01:32 PM

Oh my goodness VIX to new daily highs - the bulls are taking a great big "OH NO" Link

Jane Fox : 9/7/2007 2:59:44 PM

Well it looks like the AD Volume was able to overcome all the other internals and bring the market to new daily lows (well at least the DOW). Don't expect these lows have follow through though - that will teach me to go out on a limb and say "no new daily lows today." Sigh!! Link

Jeff Bailey : 9/7/2007 2:58:13 PM

YM 13,131 ... IWM $77.10 ...

Jeff Bailey : 9/7/2007 2:57:00 PM

Kinder Morgan: Pipeline Shut Down (update)

DJ- Kinder Morgan shut down a 926-mile oil pipeline late Thursday afternoon after a spill in Missouri, a company spokeswoman said Friday. The spill occurred in Montgomery County, Missouri, on the Platte pipeline, which carries crude from Canada and the U.S. Rockies to Wood River, Ill. Kinder Morgan (KMP) doesn't know how much oil was spilled or when the pipeline will return to service, said spokeswoman Emily Thompson. About 3,200 barrels of oil were spilled, according to local media reports. "At this point we're working to repair the line," Thompson said. She did not disclose the pipeline's throughput at the time of the spill. The pipeline's capacity is 164,000 barrels a day, according to the company's Web site.

Jeff Bailey : 9/7/2007 2:54:37 PM

If YM's WEEKLY S1 gives way, then next level of risk is 13,059 and WEEKLY 80.9%.

Jeff Bailey : 9/7/2007 2:53:56 PM

YM 13,145 ...

Jeff Bailey : 9/7/2007 2:52:44 PM

Kinder Morgan: Wyoming-Illinois Crude Pipeline Shut Down

Jeff Bailey : 9/7/2007 2:51:26 PM

BIDU PnF chart at this Link ... it would take a trade at $198.00 to get the stock back on a "sell signal."

Jeff Bailey : 9/7/2007 2:47:07 PM

Baidu.com (BIDU) ... updated bar chart Link

Pretty much conceed the thought that BIDU Sep $150 Puts (BDQ-UJ) ever end up "in the money" at expiration.

Now "hope" it can come back to $176.50, or the $172.73-$171.78 overlap. Get the spike in volatility and similar to the ACH puts, admit the mistake, and have loss smaller than it already is.

Jane Fox : 9/7/2007 2:45:10 PM

Here are the overnight charts and as you can see the markets have not even traded back into the ON range. Link

Linda Piazza : 9/7/2007 2:43:58 PM

The USD/yen is still being pressured by the 15-minute 9-ema, now just cents above the USD/yen's current 113.36 price. I'm really not sure whether we should expect the values to just collapse into new lows or to finally burst above that resistance. Usually when I see resistance test after resistance test this way, a continual hugging of a Keltner resistance line and refusal to dip away from it, I take it as a sign that bulls are gaining ground, but I just don't have any certainty that's what's happening today. It's also my assumption that equity bulls will strive to close the SPX above the 200-ema if not the 200-sma today into the close, but will they be successful?

Jeff Bailey : 9/7/2007 2:30:30 PM

GG-AE are $3.30 x $3.50 (not $3.40)

Jeff Bailey : 9/7/2007 2:29:38 PM

BDQ-UJ are $0.05 x $0.10

Jeff Bailey : 9/7/2007 2:28:56 PM

DAZ-LN are $1.05 x $1.25 ... (not $1.35)

Jeff Bailey : 9/7/2007 2:28:22 PM

JNJ-JL are $2.60 x $2.70 (not $2.80)

Jeff Bailey : 9/7/2007 2:25:39 PM

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

Jeff Bailey : 9/7/2007 2:17:21 PM

With GE saying it "wasn't talking" to CREE about a merger, figured to close out the CQR-UE's today.

Jeff Bailey : 9/7/2007 2:15:24 PM

$27.17 to $27.20 since 12:50 PM EDt.

Jeff Bailey : 9/7/2007 2:14:08 PM

Crazy trade in CREE ... look at it.

Jeff Bailey : 9/7/2007 2:06:45 PM

YM 13,166 ... after 13,151, I'd be lowering day trade stop to 13,176 at a minimum.

Linda Piazza : 9/7/2007 2:01:38 PM

The USD/yen is still being pressured by the descending 15-minute 9-ema, not able to rise above it. However, it's not being pressured lower. It's forming a sort of tiny bearish right triangle with support being maintained at about 113.29, above the day's low. I'm not entirely sure what to make of this yet, but just to say that a retest of the day's low isn't out of the question yet for this currency pair. When I look at the pair on a 30-minute chart, however, the pullback over the last couple of hours looks as if it's possible that the support might ultimately hold. So, no firm conclusions here. USD/yen at 113.39 as I type, again rising to test the 15-minute 9-ema just above.

Jeff Bailey : 9/7/2007 2:01:24 PM

If there's one sign today that market participants aren't in the "throw the baby out with the bath water," it is that the HUI.X holds green.

How many times over the years have we seen gold commodity rise during an equity selloff, to see gold equities also fall?

How many times have we seen a strong market rally, but see gold commodity get squashed, yet gold equities rise?

How many times have we also seen a strong market rally, a strong gold commodity rally, and gold equity rally?

Countless .... countless times.

Jeff Bailey : 9/7/2007 1:56:57 PM

Senate decision on student loans, and mergers at risk due to legislation.

Jeff Bailey : 9/7/2007 1:56:07 PM

Should be a VERY wild quarterly expiration ... So many questions (will this happen, will that happen, what will the Fed do, what about the yen, gold, oil, junk bonds, credit crunch, jobs)

Jeff Bailey : 9/7/2007 1:52:07 PM

IWM $77.28 -2.21% ... just turned on QCharts' WEEKLY Pivot Levels ... IWM WEEKLY S1 at $77.00.

If I didn't know better, I'd think computers have control of things today. (wink)

Jeff Bailey : 9/7/2007 1:46:52 PM

IWM $77.17 -2.36% ...

Jeff Bailey : 9/7/2007 1:45:30 PM

YM 13,177 ... if we see a 5-minute close below the 19.1% dynamic (13,179), then YM day traders can look short one-last time today back at 13,206.

Jane Fox : 9/7/2007 1:43:35 PM

Regan email me at jbfox@charter.net and let me know which charting platform you use. WE can go from there.

Jeff Bailey : 9/7/2007 1:42:23 PM

Really won't want to risk more than 10 from an entry

Jeff Bailey : 9/7/2007 1:41:55 PM

YM session low has been 2 points below WEEKLY S1 (13,139)

Jeff Bailey : 9/7/2007 1:40:02 PM

YM 13,184 ... afternoon high was 4 points above MONTHLY Pivot (13,221).

Jane Fox : 9/7/2007 1:36:41 PM

AD volume to new daily lows is telling me any rally will be short lived. VIX at new daily lows is telling me new daily lows in the markets is not likely either. This is your classic chop period and a time to be washing floors or something.

Keene Little : 9/7/2007 1:34:02 PM

We've got a choppy rise and that suggests the bounce is simply a correction to the decline. The higher it gets the more it's going to look like another 2nd wave correction instead of a 4th. That would be much more bearish for the next leg down (3rd of a 3rd).

This is about as high as it should go for a 4th wave correction (38% retracement). If SPX works its way above 1467 then the odds for a very strong selloff increases considerably. Whether that happens into the close or first thing Monday morning will become more obvious later this afternoon.

Jeff Bailey : 9/7/2007 1:32:24 PM

BIX.X ... pretty decent reversal ....

Jeff Bailey : 9/7/2007 1:29:07 PM

01:05 Internals found at this Link

Jeff Bailey : 9/7/2007 1:19:08 PM

YM is "in the zone" 13,207 ... MONTHLY Pivot and WEEKLY 61.8%.

Tab Gilles : 9/7/2007 1:18:49 PM

Will the March lows be retested again on the SPX? Look at this side-by-side charts of the SPX. Link

Linda Piazza : 9/7/2007 1:18:40 PM

If you formulated a profit-protecting plan for your bearish plays this morning, as the indices were dipping and as the USD/yen was testing support, you perhaps took some partial profit or else just followed prices lower with your stops. If you didn't formulate a plan as suggested, you should certainly be making sure that your bearish profits don't turn to losses. We're coming up on a period of time in the markets that is alway difficult to manage. People return from late lunches in New York and test the waters, seeing if a move up is sold or a move down is bought, deciding whether resistance or support will hold. Stops sometimes get run, particularly from about 1:35-1:55 EST, but that doesn't mean that you are excused from sound account management practices. It's your money. Take care of it.

Jeff Bailey : 9/7/2007 1:17:23 PM

Internals still suggest a trend day lower at this point.

Jeff Bailey : 9/7/2007 1:11:50 PM

YM 13,219 ... probes MONTHLY Pivot ... gets a little interesting here. REALLY interesting if it whips further higher above WEEKLY Pivot.

Jeff Bailey : 9/7/2007 1:09:39 PM

13,221 is next level of risk.

Jeff Bailey : 9/7/2007 1:09:13 PM

YM short stop alert! ... 13,210.

Jeff Bailey : 9/7/2007 1:08:06 PM

01:05 Market Watch found at this Link

Jeff Bailey : 9/7/2007 12:58:16 PM

YM Short lower stop alert ... to 13,210.

YM 13,188.

Jane Fox : 9/7/2007 12:53:21 PM

I truly think daily lows are in. That does not mean we are going to rally (the AD volume continues to make new daily lows) but I don't think we will see lower lows.

Jane Fox : 9/7/2007 12:50:55 PM

The DOW found support here back on August 1st so a good place to expect it to find support again today. Bulls do not want to see today's low break next week. Link

Linda Piazza : 9/7/2007 12:48:46 PM

I corrected my previous post, which had listed next potential resistance for the USD/yen at 115.52. It's 113.52, of course.

Jane Fox : 9/7/2007 12:48:29 PM

So far the SPX is playing according to Hoyle!! Link

Linda Piazza : 9/7/2007 12:48:06 PM

The USD/yen is at 113.37 as I type. It continues to find resistance at the 15-minute 9-ema, now at 113.52. As long as it continues to do so, it remains vulnerable to a retest of the day's low, but so far, it's managed to say above that 113.11 low.

Jeff Bailey : 9/7/2007 12:46:31 PM

YM nailed its WEEKLY S1.

Jeff Bailey : 9/7/2007 12:45:55 PM

I'd agree Keene ... 13,206 is WEEKLY 61.8% on the YM.

Jeff Bailey : 9/7/2007 12:44:14 PM

IWM ... PnF chart Link

Jeff Bailey : 9/7/2007 12:40:31 PM

YM short alert! ... here at 13,202. Stop 13,231. Target 13,150.

Keene Little : 9/7/2007 12:23:24 PM

Correction to my 12:08 post--the number should be 13200 for the bounce in the DOW, not 12200. But you knew that (wink).

Linda Piazza : 9/7/2007 12:23:35 PM

In my 10:00:40 post, I linked a nested Keltner chart of the TRAN, showing potential nested Keltner support that was about to be tested. The TRAN sometimes adheres to such support lines, although it, like the SOX and RUT, can sometimes overrun them when momentum is strong, even if it "meant" to find support at them. (Sorry for the anthropomorphism for those English majors out there.) However, the SPX, OEX and Dow all came down to test their congruent Keltner support levels and bounced neatly from them.

Now, here's the dilemma for us to consider. The TRAN sometimes leads those other indices. Was its earlier violation of that Keltner support a sign that the SPX, OEX and Dow could similarly violate that support or did the TRAN just overrun it in a fast market this morning? I don't know the answer to that, but I do know that we must now consider the possibility that those other indices could violate that support. That's currently at about 1450.80 for the SPX, 676.70 for the OEX, and 13,128 for the Dow, with this support important on 15-minute closes and sometimes violated during the 15-minute period. In other words, the TRAN has proven that this support that often holds has been proven not inviolable this morning. Here's a Dow chart to show you the Keltner channels to show you what I mean, with the lower purple or violet-colored channel the support that I'm referencing: Link

Keene Little : 9/7/2007 12:21:03 PM

The RUT broke beneath the uptrend line from August 16th which I was consdering as the bottom of an ascending wedge pattern (in pink on last night's chart: Link ) so that potential wave count has been negated. That leaves only the more bearish dark red count which is in agreement with the other indices. They're all in synch and it looks bearish. Updated chart: Link

A retest of its broken August 16th uptrend line would have it getting back up near 780 but it doesn't have to get that high. It might do more of a sideways consolidation (typical for a 4th wave correction). So again, if it consolidates here and then drops lower we'll have a 5-wave decline from Tuesday. That will be followed by a bigger bounce and then a sharp decline to much lower (either test or break the August 16th low).

Keene Little : 9/7/2007 12:08:54 PM

The DOW looks similar (as do the others). A bounce back up to test the downtrend line from July 19th, which the DOW has now broken back under (bearish), would be near 12200. A consolidation here followed by a new low would give us a 5-wave decline and set the trend for now. Another larger bounce would then be followed by at least another leg down. Link

Linda Piazza : 9/7/2007 12:07:10 PM

The USD/yen is at 113.33, turning back again toward its day's low of 113.11. Not good for bullish hopes so far.

Linda Piazza : 9/7/2007 12:06:07 PM

The TRAN rises again to test the Keltner resistance that turned it back on its first early bounce this morning. That resistance is currently at about 4755 on 15-minute closes, with the TRAN at 4744.86 as I type.

Jeff Bailey : 9/7/2007 12:02:57 PM

Dollar Index is down 6.52% 52-weeks. "Cash is king?"

Jeff Bailey : 9/7/2007 12:02:17 PM

After reading Tab's 11:57:53 ... maybe my IWM target is too conservative?

Have a partial ...

Keene Little : 9/7/2007 12:00:40 PM

I'm back (sooner than I thought I'd take). I see SPX found support just above its 1451.59 Fib projection and at the bottom of a parallel up-channel for its price action sinc the August 16th low. Now we watch to see if it consolidates in a choppy pattern (bearish) or starts something sharper back to the upside (potentially bullish).

NDX has turned more bearish by breaking below its parallel up-channel, the bottom of which was at 1966. It could bounce back up for a retest but if it instead does a sideways/up choppy consolidation then it's going to look like we'll get a 5-wave move down from Tuesday. That would set up a larger bounce but would again call for another leg down. Link

Jeff Bailey : 9/7/2007 11:59:51 AM

Sell Program Premium ... 1,459.77 -1.27%

Jane Fox : 9/7/2007 11:58:12 AM

Here is McMillan's weekly commentary. - The broad stock market is trapped in a volatile trading range, for the moment. We do not expect it to stay within that range for an extended period of time. Using $SPX as a reference, the upside is bounded by the resistance area at 1480-1490, or slightly above -- a level which has retarded every advance since early August. On the downside, the most recent support was at the 1430 level, although below that there is further support at 1410. At the farthest points, $SPX spiked up to 1505 and down to 1370. It might not be necessary for those extremes to be exceeded in order for a breakout to develop. Rather, a 2-day close above 1490 or below 1406 would establish new closing extremes and would probably suffice to establish the market's direction.

The equity-only put-call ratios continue to remain on buy signals. These are by far the most bullish of our indicators at the current time. However, it is always our policy that we require confirmation from the underlying chart before acting on a put-call ratio buy signal. In this case, that means we equire the upside breakout by $SPX to go along with these put-call ratio buy signals.

Market breadth has followed the market back and forth. The most recent signal occurred when the breadth got overbought after the rally from 1430 to 1490, and then issued sell signals yesterday when the market fell.

Finally, the volatility indices ($VIX and $VXO) have not retreated much. $VIX remains near 25, partly because the actual volatility of $SPX is near that level, but also partly because traders remain nervous about the upcoming market action. As long as $VIX remains at these fairly high levels -- above 20, say -- it is a modestly negative indicator as well. A collapse back into the teens would be a bullish signal from $VIX.

In summary, even though the broad market has improved since mid-August, it has been unable to confirm the upside breakout that is needed for an intermediate-term bullish signal. As a result, a bearish scenario could still develop. Hence, traders and investors should exercise caution, using expensive option premium sales to hedge the ownership of stocks.

Tab Gilles : 9/7/2007 11:57:53 AM

To expand on the Greenspan "87 & 98" similarites. If the SPX were to decline as it did in '98 it would so by 20%, that would put it at '06 low of 1250. As for the '87 decline...which was over 30%, that puts the SPX at the '04 lows of 1050...just something to think about.

Jeff Bailey : 9/7/2007 11:54:48 AM

Monster Worldwide (MNST) $33.82 -1.31% ... A "jobs" stock. Maybe a little different type of job pulse stock, but still worthy.

Trade blotter had us long calls on 6/11 at $45.30, then out on 6/18 at $43.90 benchmarks.

Jeff Bailey : 9/7/2007 11:54:44 AM

Manpower (MAN) $64.71 -2.07% ... A "jobs" stock that MM subscribers should know. Worthy of monitoring.

Trade blotter had us shorting 1/2 position on 6/29 at $95.20, but stopping on 7/06 at $95.20.

Trade blotter also had us selling NAKED call on 7/25/07 at $86.79 benchmark.

Jeff Bailey : 9/7/2007 11:44:23 AM

On a eyeball comparison to Friday 8/30/07, I like to separate NYSE and NASDAQ NH/NL as Linda does.

At this point of the session, NH's lagging a bit, but NYSE might make the 24 NH. NASDAQ, probably not at this point. Or at least a test.

New Lows at both NYSE and NASDAQ exceed, but not at an outlandish pace. Will monitor as session progresses.

Jeff Bailey : 9/7/2007 11:40:37 AM

SPX 1,456 -1.52% ... just about exact price level as Friday at 03:00 PM EDT.

Jeff Bailey : 9/7/2007 11:39:29 AM

Here were the NYSE and NASDAQ closing internals from 8/30/07 and Linda's Market Wrap Link

Jeff Bailey : 9/7/2007 11:35:21 AM

11:10 Internals at this Link

Linda Piazza : 9/7/2007 11:35:19 AM

Still no further repos for today, so we still have a $6.250 billion net draw for the day.

Tab Gilles : 9/7/2007 11:35:06 AM

SPX chart for previous post... Link

Linda Piazza : 9/7/2007 11:33:44 AM

The USD/yen is at 113.16 as I type, still sinking lower. Keep following prices lower with your stops if you're in bearish plays. If you've reached levels where puts you may have purchased have doubled in price, you might consider taking off half so that the rest are a free trade. You can then follow prices lower with your stops, letting too big a bounce take you out.

Tab Gilles : 9/7/2007 11:31:16 AM

Greenspan has finallymade a statement...I knew he'd say something sooner or later. He stated today that the current turmoil is "identical" in many ways to '87 & '98. Link

Weekly $SPXPresent Link 1998; Link 1987: Link

Jane Fox : 9/7/2007 11:16:10 AM

SPX is quickly approaching its 200EMA and 38.2 fib level. It needs to find support here or the "story" I have been telling may come unraveled ie the Aug 6th and 28th lows may not hold as support. Link

Jeff Bailey : 9/7/2007 11:13:21 AM

Sell Program Premium ... SPX 1,453.81

Jeff Bailey : 9/7/2007 11:12:44 AM

11:10 Market Watch found at this Link

Jeff Bailey : 9/7/2007 11:01:39 AM

SLM $48.00 -1.37% ...

STU $195.18 +0.09% ...

NNI $17.64 -2.64% ...

Jeff Bailey : 9/7/2007 11:00:39 AM

US Senate Passes Bill Cutting Subsidies For Student Lenders (update)

Jane Fox : 9/7/2007 10:58:21 AM

Internals are still very very bearish and there is no hint the bears are letting up. Link

Jeff Bailey : 9/7/2007 10:55:43 AM

Swing trade naked put buy back alert! ... Let's remove the risk and buy back the two (2) Cree Inc. CREE Sep $25 Puts (CQR-UE) at the offer of $0.60.

CQR-UE $0.45 x $0.60.

CREE $26.61 -4.28% ...

Jeff Bailey : 9/7/2007 10:52:34 AM

IWM $77.18 -2.32% ...

Jeff Bailey : 9/7/2007 10:52:14 AM

Swing trade put alert! for one (1) of the iShares Russell 2000 IWM Oct $78 Puts (IOW-VZ) at the offer of $3.90.

No stop for now. Target $73.00.

Linda Piazza : 9/7/2007 10:51:11 AM

No more repos yet, at least as far as I can find. Frankly, I'm a little surprised. We still have a total draw of $6.250 billion unless I've missed something.

Linda Piazza : 9/7/2007 10:46:12 AM

The USD/yen is at 113.62, beginning to drop through that 113.70-114.00 potential support zone. This is getting dangerous although some tentative bullish divergences (value/RSI) are beginning to show up. Don't count on much of an equity bounce as long as this is headed lower, though.

Keene Little : 9/7/2007 10:44:53 AM

SPX is clearly entering an area of potential support so don't complacent about being short. Taking some profits off the table is always a smart move. Starting to see some bullish divergence on the 5-min chart so it's a heads up here. Link

Jane Fox : 9/7/2007 10:41:48 AM

VIX to new daily highs. USDJPY and DAX to new daily lows and the AD volume has never let up and continues its downward tajectory. No hint the bulls have gained any control at all.

Keene Little : 9/7/2007 10:38:48 AM

We should be due a longer sideways/up consolidation followed by a new low and that's when I'll be looking to cover. I've got to run some mid-day errands so will be away from the market until after lunch. I suspect we'll get that longer consolidation while I'm away and hope to catch the final low for the day this afternoon. At this point I wouldn't want to see a retracement of today's drop exceed 50% otherwise something more bullish is happening so use that as your stop level.

Keene Little : 9/7/2007 10:36:06 AM

So far there hasn't been much of a consolidation before this is heading lower. That calls into question whether or not those first downside Fib targets that I provided (SPX 1451, DOW 13153) are going to hold. At this point I think not and staying short is likely the right thing to do.

Linda Piazza : 9/7/2007 10:26:13 AM

No further repos announced so far, so we're still left with a $6.250 net draw for the day if my calculations are correct.

Jane Fox : 9/7/2007 10:19:04 AM

AD line is now a very bearish -2005 and I would not be trying any long position.

Jane Fox : 9/7/2007 10:18:39 AM

The VIX made new daily lows around 10:06 EDT and the USDJPY and DAX were both making new daily highs so one would think the bulls were gaining control but the AD volume would have told you, "Hold on bucko" not so fast. Link

Linda Piazza : 9/7/2007 10:13:44 AM

The TRAN rose to 4780.29, just above yesterday's 4775.17 low, where it hit Keltner resistance now at 4779.44 on 15-minute closes. The TRAN has so far been knocked back a little from that Keltner resistance test. It's at 4766.74 as I type. Until and unless it begins maintaining 15-minute closes above that Keltner resistance, it's vulnerable to further support tests, with support Keltner support now sinking to 4745.33 on 15-minute closes.

Jeff Bailey : 9/7/2007 10:04:33 AM

10:00 Market Watch found at this Link

Linda Piazza : 9/7/2007 10:00:40 AM

Remember how I talked yesterday about the TRAN's potential inverse H&S, forming along Keltner resistance, and how such formations could be invalidated at the neckline? The TRAN certainly did that. However, I want to show you the Keltner chart because the TRAN tends to adhere fairly well sometimes to Keltner channels, and it hit potential support this morning and is bouncing from it. If the TRAN continues bouncing, far from certain as yet, it will soon face potentially strong resistance near yesterday's low, also the location of building Keltner resistance. Link

Linda Piazza : 9/7/2007 9:55:26 AM

The USD/yen is at 113.91, attempting to bounce from that 113.70-114.00 zone. Perhaps it would be better to say that it's attempting to steady there. We don't know the ultimate outcome yet.

Linda Piazza : 9/7/2007 9:47:47 AM

The Fed has so far announced a repo in the amount of $2.00 billion. A repo from yesterday of $8.250 billion matures today. So far, we have a net draw of $6.250 billion.

Jane Fox : 9/7/2007 9:48:13 AM

So far my SPX "story" is playing out. I first of all figured the SPX would find support around the August 6th lows and on August 28th this market made a higher low right at the that support. Then I waited for the August 24th highs to break to make a higher high which it did on September 4th. Now I wait for a higher low and for the 200EMA and 38.2 fib level to hold up as support. From here I expect the SPX to break the Sept 4th highs. Link

Keene Little : 9/7/2007 9:46:56 AM

Two equal legs down for the DOW is at 13153. If we get a small consolidation here that lasts about an hour or two that's then followed by a new low down to that Fib projection then I'll be taking profits on my short play. With a 5-wave move down from yesterday's high we'd be due a larger upward correction at a minimum but with a clear 3-wave move down from Tuesday I would want to protect profits in the event we get another rally leg started.

So I still like the short side and am watching for a consolidation and new low to then cover. I think a small long position might even be a worthwhile try. But if the market smokes lower from here without that 1-2 hour consolidation first then that Fib projection probably won't even be a speed bump so stay short.

Linda Piazza : 9/7/2007 9:46:28 AM

USD/yen has plunged all the way to 113.72. A drop much below this risks a real retest of the 8/16 and 8/17 lows, at 111.99 and 111.58. It goes without saying that would not be good for equities.

If you're in bearish positions, don't count on those lows being retested. Instead, begin to employ sound account-management and profit-protecting actions, perhaps taking partial profits and allowing part of your position to run in case there's further downside, if you're the aggressive type, or taking most or all of your profits and risking not participating in further gains if you're the conservative type. What you don't want to do is see this potential support level for currencies, understand that if they bounce, so could equities, and sit there without a plan, letting bearish profits turn to losses.

Keene Little : 9/7/2007 9:38:38 AM

The DOW is back down to its broken downtrend line from July 19th, near 13210, so it might get a bounce from here.

Linda Piazza : 9/7/2007 9:38:04 AM

I see no Fed repos announced yet this morning, but that announcement is typically made in a few minutes. Repos maturing today include only yesterday's $8.25 billion, if my search is correct.

Keene Little : 9/7/2007 9:37:04 AM

We've got a clear break of the August 16th uptrend line now for SPX, which confirms the DOW's break a couple of days ago. This suggests the bounce off the 8/16 low is now complete and down we go again. But one leg at a time here--first downside target is where SPX has two equal legs down from Tuesday's high which is at 1451.59. If we've truly started a new decline then that level won't hold but it's the first place to watch for potential support (and think about taking some money off the table).

Jane Fox : 9/7/2007 9:35:44 AM

I am glad I still have my IWM puts this morning. I bought those puts about 2 weeks ago in anticipation of the Russell dropping and have a stop when/if it closes above resistance at 800. Link

Jane Fox : 9/7/2007 9:32:20 AM

Anyone want to take a guess at the AD line this morning? To tell you the truth I was surprised it was only -685 however, it is falling.

Jane Fox : 9/7/2007 9:29:23 AM

SAN FRANCISCO (MarketWatch) - Apple Inc. Chief Executive Steve Jobs responded to customer dissatisfaction over the company cutting the price of its high-end iPhone by apologizing and offering iPhone buyers a $100 store credit toward any Apple product.

In a letter posted on Apple's (AAPL) Website, Jobs said that while he believes Apple made the right move in lowering the price of its 8-gigabyte iPhone to $399 from $599, "we need to do a better job taking care of our early iPhone customers."

Jobs said the company received "hundreds of e-mails" from iPhone customers upset over the move.

Linda Piazza : 9/7/2007 9:26:24 AM

Last night in my Wrap, I posed the question, "What could prompt a gap-down open in the RUT or other indices?" My answer was that action after the jobs report could do that, but so could currency issues. Today, it was the jobs report, with a steep drop-off in the USD/yen, currently at 114.02, confirming equity future weakness. Note, however, that this drops the currency pair into a support zone from the last couple of weeks. This is an important benchmark. This currency pair needs to hold support near 113.70-114.00, or it risks a retreat all the way to the August low or beyond.

If you read my Wrap last night, you know I have been in the "we need to retest summer lows" camp, but that doesn't mean that I won't be watching for potential support here in currencies, and, therefore, potentially in equities, too. If you're in bearish plays that will be strongly profitable at the open, plan your strategy now. Will you take partial profits at the open, keeping part of the position open in case markets cascade lower? Will you just follow price lower with your stops?

Jane Fox : 9/7/2007 9:24:39 AM

Here is the Harley News of which Greenberg spoke.:

NEW YORK (MarketWatch) -- The slowing economy will cut into Harley-Davidson Inc.'s profit and prompt a scaling back of shipments, the maker of high-end motorcycles warned Friday. The Milwaukee-based manufacturer (HOG:said it now expects 2007 earnings of $3.69 a share to $3.77 a share, well below the average forecast of $4.12 a share in a survey of analysts by Thomson Financial.

Harley-Davidson shares fell $3.59, or 7%, to $50.50 in pre-market trades

Jane Fox : 9/7/2007 9:22:58 AM

This from Herb Greenberg, a MarketWatch and CNBC commentator. ""Confounding economist expectations." So said the headline on MarketWatch after the news hit that the economy has fewer jobs than it a month ago. Well, hello! The only surprise is that anybody would consider this a surprise. In the wake of credit crunch, a reduction in jobs, as small as it is, was obvious. Look at the Harley news. Or listen to my friend whose friend from Colorado tells of a slump in the cost of membership at a ritzy country club in Colorado because the home equity spigot has been shut off. Further to the point: As housing has stalled, so have housing-related jobs, which are to today's economy what the auto industry once was. This goes on and on... and on. And one rate cut. Two rate cuts. Three...ain't necessarily going to help avoid the hangover from this party that seemed like it would never end. Along these lines, make sure you check out my story on page B3 of Saturday's Wall Street Journal that provides numerical evidence to recent pieces here that Americans have long been living beyond their means. "

Jane Fox : 9/7/2007 9:20:04 AM

WASHINGTON (MarketWatch) -- With payrolls falling in August, the Federal Reserve has the smoking gun it needs to cut interest rates. The Federal Open Market Committee meets on Sept. 18, with markets clamoring for at least a quarter-point reduction in the federal funds rate. Most analysts believe FOMC policymakers will cut rates.

There's no guarantee of what the Fed will do, of course, but the pressure to lower rates to stave off a recession has doubled with the first decline in hiring in four years. Ahead of the release of the August jobs numbers, bond strategist Tony Crescenzi suggested the Fed could cut rates as early as Friday if the payrolls number came in weak.

Jane Fox : 9/7/2007 9:17:50 AM

Markets did not like the payroll numbers one little bit. All previous day lows (PDL) broke overnight and then some. This is what you would call serious selling. Link

Keene Little : 9/7/2007 9:16:55 AM

That was a nasty payrolls report. But I'm surprised the bulls didn't turn it right around and suggest that means the Fed is clear to lower rates and therefore a reason to rally. I say that somewhat tongue-in-cheek but there's still a chance we'll see people coming out this morning and saying that and the market will make a big bounce on that expectation (why I have no clue).

But it was a nice setup to be short yesterday as I had mentioned the choppy correction to the decline from Tuesday was a good setup for another leg down. It'll start off in fine form this morning and then we'll watch how it develops to see where support might be found.

Jane Fox : 9/7/2007 9:12:52 AM

WASHINGTON (MarketWatch) -- U.S. firms cut back their hiring in August for the first time in four years, according to the government statistics released Friday.

Nonfarm payrolls fell by an estimated 4,000 in August, the Labor Department said. This is the first decline since August 2003.

The nation's unemployment rate held steady at 4.6%.

The decline in payrolls was much weaker than the 115,000 increase that had been expected by Wall Street economists surveyed by MarketWatch

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