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Jeff Bailey : 10/3/2007 2:15:46 AM

Q4 Trading-Collar and Circuit Breaker Levels Link

Keene Little : 10/2/2007 11:17:59 PM

Wednesday's pivot tables: Link and Link

The DOW's 60-min chart shows we could get just a small pullback on Wednesday which should lead to another new high: Link The next leg up should be the last one and has some Fib correlation just above 14200. It'll be worth a test on the short side and then we'll have to see if the pattern morphs into a larger ascending wedge, as it's done so many times at previous highs.

Depending on which trend line I look at I could see the NDX also pulling back just a small amount on Wednesday before heading higher but it also could form a larger sideways/down consolidation into Friday just before the jobs number: Link

Again, the SPX 60-min chart shows a small pullback on Wednesday and then another rally leg: Link If we see a push higher like this into Friday then I think the market will be set up for a selloff on the jobs number.

Looking a little closer at the rally from Sept 25th this 30-min chart shows my expectation for a 5th wave up and a 1557.42 Fib projection. Interestingly, that Fib projection meets the mid line of its up-channel just before the jobs number on Friday: Link As I had discussed on Tuesday, the longer term pattern points to 1563 as an upside target so that gives us a range of 1557-1563 to watch for a potential failure of the rally.

I was hoping we'd see more of a pullback in the RUT before it pressed higher (to give us a cleaner looking 5-wave move up from Sept 25th). But it has now pressed up to the top of a potential ascending wedge so any failure here (or after a small throw-over) would look bearish: Link

Jeff Bailey : 10/2/2007 10:10:47 PM

Index Pivot Matrix for Wednesday at this Link

Jeff Bailey : 10/2/2007 10:06:25 PM

December Gold (yg07z) $740.60 ... +$4.50, or +0.61% ...

Jeff Bailey : 10/2/2007 10:05:33 PM

Dollar Index (DXY) alert! 78.195 (30-minute delayed) ... probes Wednesday's DAILY S1.

OI Technical Staff : 10/2/2007 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The Market Monitor has been archived.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 : 10/2/2007 9:17:15 PM

OEX closed smack on its WEEKLY R2.

Jeff Bailey : 10/2/2007 8:20:59 PM

IWM Daily/ WEEKLY/MONTHLY pivot matrix for tomorrow at this Link

For those that do like the "short, stop prior day's high there is a setup where DAILY R1 and MONTHLY R1 overlap at $82.87/$82.89.

FIRST sign of any weakness is to get the bugger below WEEKLY R2! Then DAILY S1.

With the IWM Link there might be a FEW "old bulls" looking for an exit (overhead supply from $83-$85. There's a lot of bears below $80 that are doing the same. (Note: MONTHLY Pivot and WEEKLY S1)

Jeff Bailey : 10/2/2007 8:06:08 PM

NASDAQ NH/NL Ratio Chart at this Link

"f"ive day double bottomed at 18% on 8/01/07 and then again on 08/16/07. (bought a BIDU put on 8/16/07!)

On 08/23/07 the 5-day NH/NL ratio gave a "buy signal" at 28%. It rose to 56% on 9/06/07 (bought an IWM put on 9/07/07) before reversing back lower to 42% by 9/13/07 (sold an IWM covered put on 9/10/07).

The 5-day NH/NL ratio then reversed back up and gave its second buy signal at 58% on 9/21/07 and rose to 68% by 09/24/07.

The 5-day NH/NL ratio then reversed back lower to 60% by 9/28/07 and now reverses back up to 66%.

Today's NH/NL daily ratio was 75.4%.

For the NASDAQ 5-day NH/NL ratio to NOT give another buy signal, what BETTER happen tomorrow?

Jeff Bailey : 10/2/2007 7:02:24 PM

Interesting ... while FFIV is a NASDAQ-listed stock, look at 2005's "9", "A", "B", "C" and "1". Then look at 2006's "9", "A", "B", C" and "1."

Then go back and look at today's MM work on FFIV. Note 02:24:41 PM chart and the PRICE percentage change difference in 2005 and 2006.

Could it be that BULLISH/BEARISH NH/NL momentum have anything to do with anything?

Jeff Bailey : 10/2/2007 6:57:33 PM

Closing Internals found at this Link

NYSE NH/NL Ratio Chart (updated) Link

I chart the "f"ive day NH/NL ratio up to 70% and note a 3rd consecutive buy signal (66%). 10-day NH/NL (X's and O's) gets an "A" as the first entry for October at 64%.

Jeff Bailey : 10/2/2007 6:34:11 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/2/2007 6:12:53 PM

IWM October Option Montage at this Link

Note: Today's volumes for the options is CBOE ONLY.

Most active CBOE for IWM was the IOW-VD, or $82 puts, with average cost of $1.29. (82 - $1.29 = $80.71) to break even.

Jeff Bailey : 10/2/2007 5:55:16 PM

StockTrader's Almanac notes ... tomorrow historically BEARISH (SPX up just 38.1% of days), Friday tends to be BEARISH too (up 38.1% of days). Next Tuesday tends to be BEARISH (up 28.6% of Days) with Wednesday, 10/10/07 (up 38.1% of days). Then watch the bull heads. 10/11, 10/12, 10/18, 10/19 and regardless of what flavor of ice cream you like, KNOW where the OI is at.

Note today's VIX.X action. Once it got above WEEKLY Pivot it stayed there.

See IWM WEEKLY/MONTHLY Pivot Levels at 12:06:24.

Jeff Bailey : 10/2/2007 5:44:04 PM

StockCharts.com's NYSE Bullish % ($BPNYA) Link

StockCharts.com's S&P 500 Bullish % ($BPSPX) Link

Jeff Bailey : 10/2/2007 5:40:55 PM

A trade blotter of MM Profiled Trades from 7/24 to 8/22 Link

Jeff Bailey : 10/2/2007 5:39:49 PM

Quick SPX related note: The BPSPX reversed down to "bear alert" on 7/24/07 at 68% bullish (32% bearish). On 7/25/07 the BPSPX achieved "bear confirmed" status at 64% bullish (36% bearish).On 8/08/07 the BPSPX reversed back up to "bear correction" status at 54% bullish (46% bearish). On 8/10/07 the BPSPX reversed back lower to "bear confirmed" status at 48% bullish (52% bearish). On 8/21/07 the BPSPX reversed back up to "bear correction" status at 40% bullish (60% bearish). On 09/19/07 the BPSPX achieved "bull confirmed" status at 56% bullish (44% bearish). At last night close, the BPSPX was at 63.38% bullish (36.62% bearish).

Long-term SPX Put Buyer Hint: Buy longer-term SPX PUTS when the BPSPX and BPNYSE is in a COLUMN of "O"

Both BPSPX and BPNYSE from Dorsey/Wright were in a column of "O" on 6/27/07. The BPNYSE reversed UP into "X" on 8/22/07.

Keene Little : 10/2/2007 5:15:56 PM

Wednesday's pivot tables: Link and Link

Jeff Bailey : 10/2/2007 5:08:10 PM

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

Removed SLM,STU and NNI from Watch List. Adding FFIV.

Jeff Bailey : 10/2/2007 4:54:33 PM

Keene ... I just remember your last "ice cream flavor" SPX short.

I know the technique. Short, stop the day's high, or the prior day's high.

You're right though ... I do like to trade WITH momentum.

Keene Little : 10/2/2007 4:38:54 PM

I understand [your reluctance to offer specific longer term option trades]. In your opinion, where do you see the SPX by year-end. Do you see it much lower that 1400, or thereabouts?

I had been thinking we're due a strong wave-C down (in an A-B-C drop from the July high). Today has me rethinking that (and the reason I posted that weekly chart this afternoon) and now I'm leaning more towards the idea that we'll start the bear market decline following the coming high and not from the July high. That means it could start off slowly and even choppy (taking up a lot of time) since 1st waves aren't necessarily very strong.

That would suggest we might not drop that much into the end of the year, especially if we get a big bounce in December (which would set up a big decline in early 2008). That's a long-winded answer for "I don't know". But if I were to take a SWAG then I'd say maybe a drop to the 1400 area by November and then a rally back up towards 1500 in December.

Jane Fox : 10/2/2007 4:35:51 PM

Economic reports for tomorrow include :

7:00a.m. MBA Mortgage Application Survey. Previous: -2.8%.

7:30a.m. Sep Challenger Layoffs. Previous: +85.2%.

8:15a.m. ADP/Macroeconomic Advisors Employment Estimate Non-Farm Payrolls Forecast. Expected: +78K. Previous: -4K.

10:00a.m. Sep ISM Non-Manufacturing Business Index. Expected: 54.8. Previous: 55.8.

Keene Little : 10/2/2007 4:34:14 PM

Jeff, you say bull confirmed market which I assume means you think none of us should look for potential reversals. You like to trade momentum and I like to trade reversals. They're two entirely different trading techniques which require different analytical tools (some the same of course).

Jeff Bailey : 10/2/2007 4:28:35 PM

Keene ... could you explain what puts are "vanilla" and what puts are "chocolate" when it comes to selecting a put option in a bull confirmed market?

I LOVE chocolate ice cream.

Keene Little : 10/2/2007 4:20:19 PM

Jeff, while DOW 14400 is certainly a possibility (it would be a move back up to the top of its parallel up-channel from 2006), the first Fib level of interest (and the top of its ascending wedge pattern for the move up from August) is at 14217. Besides, a move to SPX 1563 would tack on about 16 more points so about 160 DOW points would give us, well what do you know, 14217. Gotta love numbers.

Jeff Bailey : 10/2/2007 4:20:15 PM

Swing trade put raise target alert! ... for the iShares Russell 2000 IWM Oct. $78 Put (IOW-VZ) to $79 in the underlying.

Jeff Bailey : 10/2/2007 4:14:55 PM

Mmm, mmm, mmm ... $NIKK 225 Link

Then also see my 03:51:43

Maybe we aren't going to see "armageddon."

Keene Little : 10/2/2007 4:08:30 PM

I was hoping we'd see more of a pullback in the RUT before it pressed higher (to give us a cleaner looking 5-wave move up from Sept 25th). But it has now pressed up to the top of a potential ascending wedge so any failure here (or after a small throw-over) would look bearish: Link

Jeff Bailey : 10/2/2007 4:10:49 PM

14,400 Keene! Link and Link

Keene Little : 10/2/2007 4:05:49 PM

The DOW looks closer to potential support near 14K by its uptrend line and then another push up towards 14200 could finish off its rally. Link

Keene Little : 10/2/2007 4:04:18 PM

The jury is still out on what today means for the larger pattern on NDX. It appears we could be at just the beginning of a larger consolidation at a minimum. But if it pushes higher from here then trend line resistance near 2130 should be the upside target. Link

Jane Fox : 10/2/2007 4:03:12 PM

Yes indeed Linda - I do like the DAX.

Linda Piazza : 10/2/2007 4:01:15 PM

Germany's market will be closed tomorrow for a holiday. Jane, you'll be without one of your favorite indicators!

Jeff Bailey : 10/2/2007 4:00:09 PM

Chesapeake Energy (CHK) $36.09 +0.25% ...

Jeff Bailey : 10/2/2007 3:59:40 PM

Apache (APA) $90.71 -1.35% ...

Jeff Bailey : 10/2/2007 3:59:17 PM

Baker Hughes (BHI) $92.46 +0.12% ... reverses losses! Nat. Gas play now?

Keene Little : 10/2/2007 3:58:24 PM

GOOG is going to leave one nasty looking shooting star on its daily chart. It got spanked this afternoon.

Linda Piazza : 10/2/2007 3:58:30 PM

Tomorrow morning at 8:15, we get a peek at September's ADP employment number. The ADP has missed bigtime a couple of times in its estimation of non-farm payroll numbers, but that doesn't mean that markets, nervous about the upcoming non-farm payrolls, might not react. Market don't want too tight a labor market, but they sure would like to be reassured that last month's non-farm payrolls disaster was an anomaly.

Jane Fox : 10/2/2007 3:56:29 PM

The SPX bears also need to make a little more of an effort here if this market is going to retest support at 1500. Link

Jeff Bailey : 10/2/2007 3:55:45 PM

Conversely, a $/yen trade at 116.06 could have bears really locking in gains.

Jane Fox : 10/2/2007 3:54:26 PM

The DOW has run into obvious resistance but it needs to retrace more than this if this bull rally is to stay healthy. Link

Jeff Bailey : 10/2/2007 3:54:00 PM

IF it is the dollar/yen chart that has given the bid to gold the last couple of week (which I think it is), then that's a toughy isn't it?

The dollar/yen is going to do what it is going to do overnight.

If the dollar weakens again at 114.61, then 113.74, gold could rebound strongly as if today never happened.

Jane Fox : 10/2/2007 3:52:56 PM

Here is a daily chart of the $RUT. It is obviously playing a serious game of catch up and does have a lot of catching up to do. Link

Jeff Bailey : 10/2/2007 3:51:43 PM

$/yen cross rate pnf chart Link

Keene Little : 10/2/2007 3:48:57 PM

I just read your MM on the SPX, if it hit that level [1563] and you wanted to buy some puts on the SPY, would you buy December 07 or March 08 and if so, what strike prices would you be looking at.

Do you like vanilla or chocolate ice cream? Only you can decide how far out you want to trade and which strike prices. I couldn't even make a recommendation on the Monitor because we have so many different kinds of traders with completely different time frames. The combinations of time and strikes makes for a huge number of possibilities.

Always remember though--buying more time than you think you'll need and getting more ITM will be the safer choice since time premium will not decay as much. Of course an ITM option will hurt more if the market moves against you (so your stop level will likely be closer which is also probably better). Both of those options are clearly more expensive and that's why many traders do just the opposite, and usually lose.

Linda Piazza : 10/2/2007 3:46:18 PM

If indices such as the SPX close with values somewhere near its current 1545.17, showing that today's proposed scenario was indeed fulfilled, what's next? If the SPX is indeed attempting to reinstitute that old pattern, we perhaps still have another couple of days of small-bodied candles and then a dip to the 10-sma and an attempt to spring up from that. Boring!

Hold on, because there are a couple of caveats to that scenario. First, it must be acknowledged that today's candle could be a potential reversal signal. The rising VIX certainly should make all of us watchful and cognizant of the potential for a reversal rather than consolidation, so we should keep this possibility on the radar screen.

The TRAN's action today has argued in favor of continued testing of resistance as has the USDJPY's, with neither of those breaking out on their daily charts, but not giving up the effort yet, either. They should be watched tomorrow morning. So, conversely to the potential-reversal scenario, it must be acknowledged that small-bodied doesn't necessarily mean small-range, and the SPX could send candle shadows up and down before day's end. Also, some similar consolidations have resulted in sideways/sideways-up consolidations that followed some trendline up with small-bodied candles.

So, there are some permutations to this potential scenario for tomorrow, but I think anyone holding short-term trades must give some consideration, going into the close, to the possibility that tomorrow could produce another day similar in many ways to today's trading and that, ultimately, a dip to the 10-sma may be in the works.

Can bullish your positions weather that, if it occurs? Can your bearish positions weather a sideways/sideways-up consolidation until the 10-sma rises closer underneath current prices?

Jeff Bailey : 10/2/2007 3:44:05 PM

Nope ... not yet Link

Jeff Bailey : 10/2/2007 3:42:33 PM

$/yen trade 116.06 today?

Jeff Bailey : 10/2/2007 3:41:59 PM

Oooooo eeee!

Jeff Bailey : 10/2/2007 3:41:03 PM

What's the $/yen doing?

Jeff Bailey : 10/2/2007 3:40:31 PM

GG $30.19 -3.23% ... DXY 78.28 +0.48% (30-minute delayed) ... session high for DXY has been 78.38. Give or take 0.01, WEEKLY R1 78.39.

What to do, what to do ...

Jeff Bailey : 10/2/2007 3:37:16 PM

Manpower (MAN) $68.00 +1.52% ... X gets another square.

Jeff Bailey : 10/2/2007 3:36:13 PM

SPY $154.27 -0.01% ... Yet to trade its WEEKLY R2 ($154.79) this week.

Keene Little : 10/2/2007 3:35:12 PM

On the SPX 30-min chart I showed a bear flag consolidation where it would tag the 1538 level tomorrow in a pullback to the bottom of a parallel up-channel (the parallel line is based on the line drawn from the 1st to the 3rd wave and then attached to the 2nd wave low). Two equal legs down for the pullback that started from yesterday's high would be at 1537.80. Not bad correlation there with the trend line: Link

I'm still showing a rally projection to 1557.42 but I do like that 1563 level even better. Notice the labels by the MACD--I'm testing the wave count here which shows a higher MACD level for the 3rd wave as compared to the 1st wave, as it should. It should also have a lower high at the 5th wave and that's how I'll test it for confidence in the count. We'll watch this one together to see how it unfolds.

Jeff Bailey : 10/2/2007 3:35:03 PM

It certainly does Jane! IWM filling its 7/23/07 to 7/24/07 gap.

Jeff Bailey : 10/2/2007 3:32:51 PM

03:02 Internals found at this Link

Jeff Bailey : 10/2/2007 3:22:56 PM

BIDU's WEEKLY R2 $312.27.

Jeff Bailey : 10/2/2007 3:22:25 PM

SOHU $40.60 +6.08% ... might get a pop to $42.76 by week's end.

Jane Fox : 10/2/2007 3:18:08 PM

Here are the charts of the four major markets we watch here in the MM. It certainly looks like the Russell 2000 is playing a game of catch up. Link

Keene Little : 10/2/2007 3:19:45 PM

I read a piece from Jeff Cooper on minyanville this morning and it prompted me to look again at the SPX. What I'm seeing is mind boggling if it plays out this way (for a minor new high near 1563 to end the bull market rally). This is the weekly chart that I've been showing each week in my Market Wraps, with a couple of extra notes added: Link

I'm showing an A-B-C count for the 2000-2002 decline and wave-C is the move down from January 2002 to the October 2002 bottom. It's a 5-wave move and it's hard to see but wave-5 bottomed only 7 points below the July 2002 low which was wave-3 (768 low vs. the prior low of 775).

Jeff Cooper has pointed out many times the symmetry that plays out in the market. "As above, so below" he often says. So we come to where we are in the rally pattern. This too I have labeled as an A-B-C rally with wave-C as the move up from October 2005. Wave-3 ended at the July 2007 high and now we're into October 2007 looking for an end to wave-5.

Do you see the symmetry here? The July 2002 low was undercut by seven points in October 2002. We've had a July 2007 high and a 7-point move higher in October 2007 would take it to 1563. As I've been showing on this chart, two equal legs up (wave-C = wave-A) is at 1563. You can't make this stuff up.

So forget the 1557.42 Fib projection. Give me 1563 and I think I'll be backing up two trucks. I'll be showing this again in tomorrow's Wrap. This is powerful stuff.

Jeff Bailey : 10/2/2007 3:06:54 PM

Good Gravy! ... BIDU $321 +12.70% ...

Jeff Bailey : 10/2/2007 3:06:20 PM

03:02 Market Watch found at this Link

Linda Piazza : 10/2/2007 3:05:44 PM

The 1542-ish zone's resistance didn't stop the SPX after all, and it ran up to next resistance just under 1547.50. Patterns aren't showing a lot of consistent predictions here, so the bets are off with respect to next short-term direction. The TRAN has bounced up again toward its daily high but has not yet exceeded it. So far, the SPX, OEX and Dow daily charts show about what I expected for today, but the day is far from ended. The last hour could change the complexion of the daily charts.

I mentioned earlier that one thing that my scenario would have done for me today if I'd been daytrading, which I wasn't, would have been to make me likely to take any bearish profits quickly. If my outlook for the day was that the charts would show small-bodied candles at the end of the day as gains were consolidated, then I would have been quick to take those profits if the tenor started changing, as the TRAN's action warned us might be happening. Since my overall view is that the indices might be consolidating sideways until the 10-sma catches up again or might even dip down to that 10-sma, I would have eschewed all bullish plays for the day.

Jeff Bailey : 10/2/2007 3:01:52 PM

FFIV's Daily/WEEKLY/MONTHLY Pivot Matrix at this Link

Note DAILY R1 and WEEKLY R1.

Keene Little : 10/2/2007 2:37:44 PM

Of the two counts that I've been showing on the SPX 60-min chart I think the pink count is the one. I've left them both on this updated chart and the choppy pullback today favors an upside resolution out of this: Link The Fib projection at 1557.42 (where the 1st and 5th waves of the move up from Sept 10th would be equal) looks like a good upside target for now. It would also have price failing at the mid line of the parallel up-channel from the August low.

Getting in a little closer to look at the leg up from Sept 25th, which should be a 5-wave move for the larger degree 5th wave, the mid line of its current small up-channel crosses 1557.42 at the end of the day tomorrow. Ideally we'll see a further pullback to the bottom of the channel near 1538 today before pushing higher again. If we get that pullback I like a long play from there before setting up the longer term short play. Link

Jeff Bailey : 10/2/2007 2:45:00 PM

FFIV Option Montage (jan08-apr08) at this Link

RISK / REWARD analysis ... Right now, the PnF chart of FFIV does have a BEARISH VERTICAL count of $17.00 associated with the chart. Should the stock trade $42.00, the BEARISH vertical count would be negated and a BULLISH vertical count would begin construction to ... $38 + ((5 * 3) * 1) = $53

From current level of trade $39.43, the RISK to BEARISH vertical count is $22.43. For 100 shares (1 option contract is 100 shares) that's $2,243.00 of STOCK risk.

Another level of RISK is to another SELL SIGNAL. FFIV would give another sell signal at $31.

From $39.43, RISK to sell signal is $8.43/share, or $843 on 100 shares.

Another level of RISK would be my "envisioned" bullish support trend (pink dots), where a trade at $32 would violate them. That $32 - $39.43 = $7.43, or $743.00 on 100 shares.

IS there an OPTION that mitigates the risk, where I can utilize POSITION size at this point to SEEK EXPOSURE to POTENTIAL seasonality?

If so, is the RISK worth the POTENTIAL reward?

Keene Little : 10/2/2007 2:21:55 PM

I think the current bounce here is just part of a larger sideways/down consolidation and we should get another leg down to complete it, probably by tomorrow. I'd be careful about chasing this move higher. We just about have two equal legs up in the bounce now.

Jeff Bailey : 10/2/2007 2:24:41 PM

F5 Networks (FFIV) $39.34 +3.01% ... PnF chart (up to current) Link Note: Today's high has been $39.90, so NOT $40.00 to get the 3-box reversal back higher where I have the "A" for a first chart entry for October.

OK, so what I've done, or am doing, is taking the subscriber's historical observation (I love it, HISTORY), and start to "envision" what could be.

The SECTOR (BPINET) is "bull confirmed" and here we have a stock that has outperformed the MARKET since 10/27/04 and is currently in a column of X (means it is still outperforming currently).

We noted the "9" reversals in the BPINET and I mark them on the FFIV chart.

October is "A"

In 2005 and 2006, after the "A" was placed on the chart, it seemed to come on an "up move" as DEMAND (X) was outstripping supply.

BEFORE November "B" FFIV's chart gave a reversing higher "buy signal."

See how "similar" the PnF chart is today, as it was last year?

We have a "young" bearish resistance trend as we did see FFIV juuuust violate its bullish support trend (red dots).

Option duration selection.

Here is where the PnF charting system is utilized most heavily by option traders.

See how FFIV tends to make its move into January (1)?

That would probably be the "best" expiration month to play the stock.

From the last two historical "buy signals, FFIV has advanced 15% and 29%.

A conservative target could be 15% IF FFIV were to trade the $42 level and give the reversing higher "buy signal" like it did in late October 2005 would be $48.30.

What would any of the January CALL options be worth should FFIV achieve a 15% gain?

Linda Piazza : 10/2/2007 2:09:03 PM

The SPX rose a bit higher than the resistance zone mentioned in my 1:32 post, but it pierced that resistance zone only and hasn't yet convincingly broken above it. The 30-minute 9-ema is at about 1542.90 currently, and the SPX would need a 30-minute close above that to have convincingly broken clear of that resistance zone. Currently, the SPX is at 1542.42. The resistance may yet hold and the SPX may yet be vulnerable to a retest of the day's low, if not a test of 1537-ish Keltner support. Outcome to be determined.

Keene Little : 10/2/2007 2:06:06 PM

Does the new high in the DOW and the NDX most likely negate any longer term bearish bias, especially a low volume test of the recent lows? Thanks.

Barry, the short answer is no. There are many factors involved in evaluating new highs and lows in a move and one of the glaring problems with the current rally is lack of market breadth. Just as we saw with the February and July highs we're now getting new market highs (with some clearly divergent indices such as the banks and transports to name just two) without the kind of broader participation that would typically accompany a move that will lead to a sustained rally.

I showed a couple of charts yesterday that point to the weakness in the current rally ( Link , Link and Link ) and I stand by my opinion that this rally will fail soon and the next leg down will be a swift decline.

Jane Fox : 10/2/2007 2:03:17 PM

The VIX is telling you this pullback is a rally to sell into. Link

Linda Piazza : 10/2/2007 1:32:11 PM

The SPX now tests support near 1540 that may prompt a bounce attempt, at least toward 1542-1542.50. If that does happen, I'd watch for potential resistance in that zone. A 30-minute close beneath about 1539.80 suggests that deeper support near 1546-1537 may need to be tested.

Jeff Bailey : 10/2/2007 1:24:46 PM

01:10 Internals found at this Link

Linda Piazza : 10/2/2007 1:14:57 PM

The USDJPY still isn't doing much of anything. It broadened its tight range into a megaphone shape and now that's narrowing again (diamond shape, perhaps?), but mostly it's moving just on this or that side of the flattening 15-minute 9-ema, now at about 115.80. The USDJPY is at 115.81. This isn't giving us much of a feeling for what might happen next.

Keene Little : 10/2/2007 1:13:56 PM

So far today's pullback fits more as a bull flag correction than anything else. A drop down to about SPX 1535 by the end of the day could be a bullish setup. If it were to break out of the channel from here then more of a sideways consolidation could play out. Link

Jeff Bailey : 10/2/2007 1:13:38 PM

01:10 Market Watch found at this Link ... Small caps hanging tough.

Jeff Bailey : 10/2/2007 1:08:40 PM

F5 Networks (FFIV) ... Dorsey/Wright classifies stock as "Internet" so that's the BPINET. Link

Hmmmm ... look at all those "9" (first entry for September) reversals. Certainly the internet group looks to have some bullish seasonality.

Hey, us GOOG bulls did OK recently. (wink)

Jeff Bailey : 10/2/2007 1:04:13 PM

Email Question: ... Jeff, I notice a possible seasonal pattern in FFIV. Now I know that the months of oct-dec are usually bullish for techs in a bull market But here is what I have researched so far on P& F charts.

Historical (oct-nov 2004) FFIV from email Link

Historical (oct-nov 2005) Link

Historical (october 2006) Link

Historical (november 2006) and current Link

Jeff's Reply: ... By gosh, you might be on to something. I've been looking for a 4-lettered stock! Let's check further.

Keene Little : 10/2/2007 12:58:30 PM

GOOG has continued to push higher today and I've dropped one of the wave counts on its daily chart that I been showing, last one from yesterday: Link I dropped the dark red count in favor of the pink count which shows a 5-wave move up from the August low, updated for today's price action: Link

The longer term price pattern from the March 2006 low suggests we could get a move with two equal legs up from the March 2007 low and that's the projection to 602.04 that's shown on the chart. This projection crosses the trend line along the highs from April 2006 today so if it manages to rally up to that level before the day is out it could make for a very nice short play.

I also show on the chart the Fib projections based on the 1st wave in the move up from the August low. The 5th wave (pink wave-5) would equal the 1st wave at 613.49 so that would be the upside risk if you try a short near 602. By the same token price has nearly tagged 594.63 (today's high so far is 594.38) which is where the 5th wave = 62% of the 1st wave and has therefore achieved the normal minimum for the 5th wave (and may not make it any higher).

Jeff Bailey : 10/2/2007 12:39:47 PM

F5 Networks (FFIV) $39.40 +3.14% ... nice move this morning above congested 21-day, 50-day, 150-day and 200-day SMAs.

Jeff Bailey : 10/2/2007 12:23:25 PM

Those darned Canadians ... buying up the U.S. with their stronger currency. (wink)

Jeff Bailey : 10/2/2007 12:21:51 PM

Toronto Dominion To Buy Commerce Bancorp For $8.5 Billion ... DJ (partial)- Toronto-Dominion Bank (TD) took another huge bite of the U.S. banking industry Tuesday, agreeing to buy New Jersey's Commerce Bancorp Inc. (CBH), for $8.5 billion in stock and cash, its biggest deal yet south of the border. The bank's stock is down sharply. In Toronto, Toronto-Dominion shares are down C$3.52, or 4.6%, to C$72.81 on 8.5 million shares. The stock has traded as low as C$72.35 Tuesday. While the deal will double Toronto-Dominion's retail banking presence in the U.S. and propel it to a top 10 position in North America, analysts said it is dilutive to earnings. And there is some concern about Toronto-Dominion moving so strongly into a market characterized by weak earnings growth and credit concerns. "This is a bit of a surprise," said John Kinsey, a portfolio manager at Caldwell Securities, who owns Toronto-Dominion stock. Given the poor results that other Canadian banks have had with their U.S. forays, he said the market is essentially saying "here we go again." And the size of the transaction makes it especially worrisome, he said. "This is the biggest by far of any of the acquisitions," Kinsey said. "So it just makes it that much more tenuous." Ross Healy, chief executive of Strategic Analysis Corp. and a long-time bear on Canadian banks, said buying U.S. assets at this time not only means there is the potential for dilution of earnings, there's potential to inherit U.S. credit problems and U.S.-dollar problems. "On all of those three counts, if it were me, I wouldn't do it," he said. Healy doesn't own Toronto-Dominion shares. However, John Aiken, analyst at Dundee Securities, sees the acquisition "quite positively" given the significant scale it adds to Toronto-Dominion's current U.S. franchise. And Ian de Verteuil at BMO Capital Markets said it is a "good deal. TD Bank has achieved critical mass in the lucrative U.S. Northeast banking market." BMO has an investment-banking relationship with Toronto-Dominion but Dundee does not. Neither analyst owns the stock. The transaction would give Toronto-Dominion more than 2,000 branches in North America and about $250 billion in deposits. The Toronto-based bank will become the seventh-largest bank in North America as measured by branch locations, the company said. The purchase price consists 75% of stock and 25% cash. Under the agreement, expected to close in March or April, Commerce shareholders will receive 0.4142 of a Toronto-Dominion share plus $10.50 in cash for each Commerce share held. The deal values Commerce at $42 a share.

Linda Piazza : 10/2/2007 12:22:49 PM

Here's what I'm noticing on the TRAN: the TRAN's 15-minute Keltner chart was set up to show that it looked vulnerable to a test of Keltner lines that are now at 4889.60-4895.68, but which were a bit lower earlier. There's never any promise that such vulnerability will result in a test of such an area, and, so far, it hasn't. The TRAN has instead moved sideways, resisting falling.

So, if I'm testing this against my scenario for today--possible sideways trading today that produces small-bodied candles being one possible outcome--how does this fit? Of course, it fits perfectly in the idea that the TRAN is moving sideways, so I should be satisfied, shouldn't I? But I'm not. Why? Because something isn't right. In a very small way, bulls are showing more strength than that short-term 15-minute Keltner chart was showing they might. So now, I'm watchful that something other than what I expect might be going on. The volatility indices sure don't promise a lot of upside right now, and the USDJPY just moves sideways, too, but be a little careful here.

This is one reason why I said earlier that, if I were daytrading, which I'm not, that my scenario would have had me being very careful about protecting bearish profits today. A small-bodied candle can be produced with choppy back and forth action and lots of tests of upside resistance as well as by other means.

Keene Little : 10/2/2007 12:15:27 PM

Linda made a very good point in her last comment, "you might think about jotting down possible scenarios in your trading journal before trade begins each day." Chart analysis tends to be a left brain function (the logic side of the brain) and as such it can lead to bad trading decisions. That's because the right brain is not involved (except women do better with left/right brain sharing and is one of the reasons they tend to make better traders).

When you write down your ideas/analysis you force your right brain to get involved and it will add clarity to your thoughts. Many times you'll see on paper the fallacy of what you were thinking before writing it down. Write it down as though you were offering trading advice to your buddies. Try it regularly and I can almost guarantee an improvement in your trading (you'll likely trade less).

Jeff Bailey : 10/2/2007 12:06:24 PM

IWM Daily/WEEKLY/MONTHLY Pivot Levels at this Link

Linda Piazza : 10/2/2007 12:01:27 PM

What was your idea of the scenario for today? Are you testing that scenario against what's happening? My idea, expressed yesterday afternoon on the MM, was that the SPX, at least, might again attempt to reinstitute that old pattern of gaining big, consolidating sideways a few days or actually pulling back, testing the 10-sma and springing up again. That meant we would be due for sideways consolidation via a small-bodied candle or a pullback today.

What good does it do to formulate this kind of scenario ahead of time? Well, for one thing, if I were daytrading right now, which I'm not, I'd be wary of expecting too much downside because that scenario suggests that a small-range day that didn't go much of anywhere was a possibility. I'd be watching breadth indicators closely and perhaps being quick to take bearish profits if something didn't look right. Formulating that scenario ahead of time likely would have kept me out of any long positions at all because my idea would have been that the SPX was eventually working its way toward another 10-sma test, although perhaps it would do so by consolidating sideways while the 10-sma rose beneath it. Maybe staying out of long day trades will be proven to be a good idea; maybe, a bad one.

Formulating that scenario ahead of time would have allowed me to test what I was seeing in breadth measurements and other indicators to see if it fit the scenario or if I was just way off base and didn't understand something about the market setup for that day.

I'm writing down my scenarios here on the MM's pages, but if you're not a contributing writer, you might think about jotting down possible scenarios in your trading journal before trade begins each day.

Jeff Bailey : 10/2/2007 11:56:16 AM

SLM Corp. (SLM) $51.95 +4.18% ... gets some action.

Jeff Bailey : 10/2/2007 11:51:59 AM

Dollar Index (DXY) Daily Interval chart with September's and October's MONTHLY Pivot retracement Link

I'll be willing to bet that there's at least one trader/investor out there wondering what, if any impact a rebound in the dollar would have on stocks.

The dollar's trade has several implications as it relates to how equities could trade.

I've talked about the fundamental side.

But what about the "psychological" side?

Could a rebound in the dollar actually improve sentiment, or have capital flowing back into U.S.-based assets?

For now, I see what should be some pretty hefty resistance at MONTHLY Pivot and September's MONTHLY S2.

Keene Little : 10/2/2007 11:42:28 AM

We didn't get much of a new low before bouncing back up and now the bounce is giving the pullback more of a corrective feel to it. That's pointing to more highs if it remains a choppy sideways/down consolidation (which could continue for another day or more). As long as the banks are holding up I wouldn't get too bearish here. The market needs to at least correct but corrections lately have been relatively flat.

Linda Piazza : 10/2/2007 11:36:26 AM

I keep forgetting to post the value when I post index-related notations today. The RUT is currently at 828.54, rising toward a retest of its previous high of the day at 829.76.

Linda Piazza : 10/2/2007 11:34:48 AM

The RUT certainly hasn't given up yet, has it? So, what do I see on the daily chart? I see the RUT has popped up to test an ascending trendline drawn off the 8/08 and 9/19 highs. I don't always completely trust a trendline drawn off only two touchpoints, but this one does run parallel to a lower trendline below the 8/06 and 9/19 lows and hitting the 8/16 open (ignoring the lower shadow below it), so the trendline now being tested gains a little more validity. So, there's important resistance being tested, with the outcome as yet unknown. Given what's happening with the VIX and VXN, there's some danger here that the RUT's gains might soon be capped. Price is the final determinant, but watch what's happening with the volatility indices and breadth indicators, and keep adjusting your stops appropriately if you're in bullish RUT plays.

Jeff Bailey : 10/2/2007 11:23:41 AM

StreetTracks Gold (GLD) $72.15 -2.36% ... WEEKLY S1 $72.28.

Jeff Bailey : 10/2/2007 11:23:36 AM

US Dollar Index (DXY) 78.36 (30-min delayed) ... WEEKLY R1 just ahead at 78.39.

Jeff Bailey : 10/2/2007 11:19:35 AM

11:00 Internals found at this Link

Note(s): It would take a closing measure of 64% for the NYSE 5-day NH/NL measure to reverse back up.

It would take a closing measure of 66% for the NASDAQ 5-day NH/NL measure to reverse back up.

Jane Fox : 10/2/2007 11:12:46 AM

Internals are all in agreement except the USDJPY. However, if I see the VIX and AD volume in alignment then that is enough for me. Link

Keene Little : 10/2/2007 11:11:04 AM

Another push lower now could finish a 3-wave pullback (so be careful about another bounce as part of a potential choppy consolidation. Watch for possible support around SPX 1540/DOW 14027.

Jeff Bailey : 10/2/2007 11:04:40 AM

11:00 Market Watch found at this Link

Linda Piazza : 10/2/2007 11:01:07 AM

The TRAN is trying to hold to 4900 psychological support, but real support appears to be a bit lower, at about 4884-4889 on 15-minute closes. It looks to me as if the TRAN might be vulnerable to that, although a test of 4907-4908 might be first. If the 4884-4889 zone is tested, bulls want it to hold on 15-minute closes. Otherwise, a deeper drop to 4859 might be in the works, and SPX, OEX and Dow bulls wold rather not see the TRAN drop too much.

Jeff Bailey : 10/2/2007 10:59:34 AM

GG's Daily/WEEKLY/MONTHLY Pivot Levels at this Link

Linda Piazza : 10/2/2007 10:51:59 AM

After moving into breakout mode yesterday, the SPX has now dropped back into the Keltner channels again, showing that the crazy upward momentum has waned, at least. With the VIX pushing up so much, it may be more than that, but the VIX is rising toward yesterday's 18.44 high, testing it now at 18.43, and we'll have to see if the VIX is turned back from that resistance level, too. Anyway, be prepared for the possibility that the SPX's 15-minute 9-ema, now at 1544.30, may now be resistance on 15-minute closes and that the SPX may eventually cycle down toward 1539.63 or perhaps even toward lower support. For now, though, we may first see a push back toward that 15-minute 9-ema.

Keene Little : 10/2/2007 10:45:38 AM

This NDX daily chart keeps the latest rally in perspective: Link With price hitting the top of its parallel up-channel from 2006 it is one of the better setups for a longer term pullback. We don't know whether it will consolidate and push to a minor new high yet but this chart says bulls need to be careful now.

Jeff Bailey : 10/2/2007 10:45:28 AM

XLF's Daily/WEEKLY/MONTHLY Pivot Levels at this Link

Keene Little : 10/2/2007 10:41:48 AM

Trend line support for NDX is near 2095-2097. It would appear at this point that we are going to get the pullback. It's way too early to tell what form it will take. As for the negative divergeces, shown on this 60-min chart as well, they could be worked off in time if not price: Link

Jeff Bailey : 10/2/2007 10:37:01 AM

XLF's WEEKLY Pivot Levels ... $33.25, $33.78, Piv= $34.22, $34.75, $35.19.

Linda Piazza : 10/2/2007 10:35:59 AM

The USDJPY's pullback from this morning's high no longer looks like a flag. The USDJPY became more volatile, broadening that shape into a megaphone shape, usually a far less bullish formation than a flag, although we of course have to think in terms of tentative outcomes and not promised ones. The USDJPY is at 115.75 as I type.

Jeff Bailey : 10/2/2007 10:35:03 AM

S&P Banks (BIX.X) 370.24 +0.93% ... gets the trade at WEEKLY R2.

Linda Piazza : 10/2/2007 10:31:54 AM

TRAN down to 4904.99 now, pulling back from that second-day-in-a-row 200-ema test. Bulls don't want to see it drop too far.

Jeff Bailey : 10/2/2007 10:29:47 AM

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

Keene Little : 10/2/2007 10:23:20 AM

In my discussion about gold and the credit market I am of course talking about longer term market projections and as traders we need to trade what the market gives us. Most times you have to tune out the outside voices (CNBC included), except us of course (wink), and just trade what you see on the charts. Right now we've got bullish charts if only because we're in an up trend. I like to play reversals and that's why I'm always looking for evidence of topping and bottoming.

Negative divergences between price highs/lows and the oscillator highs/lows (MACD and RSI are my two favorites for this) usually sets up the trades. We're seeing some negative divergences now against yesterday's highs. Trend lines are very good for determining a change in trend or for determining where a run might end. The DOW's 60-min chart shows the trend line along the highs since August 24th stopped yesterday's rally: Link

Since then it's been doing a small consolidation and looks like it will push higher again. But keep an eye on that trend line as it could offer another good chance for a short entry (currently near 14135). Or the consolidation could be the start of a larger sideways/down correction as per the pink wave count (which would be bullish for another rally leg out of it). Bottom line for today is be careful of the chop.

Jane Fox : 10/2/2007 10:21:44 AM

The VIX is still making new daily highs so that is a huge sign the bears are getting stronger and I would not be long here.

Jeff Bailey : 10/2/2007 10:21:16 AM

Select Financial SPDR (XLF) $35.25 +0.80% ... testing downward trend on bar chart here.

Linda Piazza : 10/2/2007 10:21:27 AM

The TRAN is trying to join the party. It's now above yesterday's high, but again challenging the 200-ema with the 72-ema and the 200-sma as well as some swing-high resistance ahead. That resistance zone stretches up to the 200-sma at 4971, and I wouldn't consider the TRAN to have broken out until and unless it produces a daily close above that. So far, it's going in the direction bulls want today, but keep a close watch because it can reverse quickly.

Jeff Bailey : 10/2/2007 10:20:20 AM

Citigroup (C) $47.80 +0.16% ...

Jeff Bailey : 10/2/2007 10:19:59 AM

UBS Ag (UBS) $56.80 +3.38% ...

Linda Piazza : 10/2/2007 10:18:28 AM

Mixed signals here. The USDJPY is now at 115.94, approaching the 116.00 resistance area. Resistance is actually strongest somewhere near 116.30-116.50.

Linda Piazza : 10/2/2007 10:15:34 AM

I see that Jane and I were thinking along the same lines at the same time, with her uploading her post while I was composing mine.

Linda Piazza : 10/2/2007 10:13:33 AM

Whoa! Jane has probably mentioned it already, but are you watching the VIX? Bulls don't want to see it keep gaining, continuing its move off the Monday low of 17.11.

Jane Fox : 10/2/2007 10:12:23 AM

VIX is spiking here and that is not bullish folks. I would be very careful if long.

Linda Piazza : 10/2/2007 10:12:00 AM

What happened with the USDJPY overnight and early this morning? The USDJPY gapped lower last night, but it climbed from its 2:15 low of 115.26 into a high this morning of 115.92. It's been retreating in a flag-like formation ever since. It's currently moving up through that flag and is at 115.82. Basically, it climbed laboriously through the night to get back about to where it ended the day yesterday. Black-channel resistance now at 115.86 has been holding on 15-minute closes for the last hour. Let's see if it does this time, too.

Jeff Bailey : 10/2/2007 10:09:56 AM

10:05 Market Watch found at this Link

Linda Piazza : 10/2/2007 10:08:24 AM

The Fed had repos in the amount of $7.250 billion maturing today. It has announced a repo this morning of $5.500 billion. That leaves a net drain of $1.750 billion. Lately, perhaps in the effort to reduce the amount of repos sloshing through the system, the Fed has allowed many days with net drains and it certainly hasn't appeared to hurt the stock market, has it? As I look at the amount sloshing through the system, I see it's been steadily decreasing over the last week.

Keene Little : 10/2/2007 10:07:11 AM

The market is trying to rally on the lousy home sales number (worst in six years). Must be good for another rate cut don't you think? To which I say "so what!" It's still not good for the economy and that's what matters. The Fed follows the economy and the stock market usually leads it.

Jane Fox : 10/2/2007 10:05:59 AM

Here is how the markets are trading in relation to their previous day ranges. As you can see the Russell has not traded into its PDR so far today. Link

Linda Piazza : 10/2/2007 10:05:03 AM

I had a cranky computer this morning. I've got it booted up and am going to go check for repos now and be back in a sec.

Jane Fox : 10/2/2007 10:03:38 AM

Naz futures are now tagging their overnight lows.

Jeff Bailey : 10/2/2007 10:02:05 AM

ICE Says September Volume Rises ... Reuters Story Link

ICE $158.08 +2.64% ...

Keene Little : 10/2/2007 10:00:58 AM

My bearish opinion on gold is probably disagreed with by about 91% of you. That's the daily sentiment on gold right now--91% bullish and an extreme not seen since the May 2006 high. It's just as bearish the US dollar. The weekly chart of gold is a reminder of what the larger pattern is and shows the next leg down into next year: Link

Two equal legs down from May 2006 is at 552.60 and a 162% projection is to 427.52. Either one is a significant drop from here. From a fundamental perspective we need to keep in mind that the credit contraction has only just begun. The stock market has decided it doesn't like to look at bad news and is ignoring the fact that the housing problem is a long way from finding a bottom (mortgage resets don't really kick into gear until next year) and the credit problem is equally weak in the commercial area.

A credit contraction is deflationary and gold bulls will soon come to realize this. And with a 91% bullish sentiment there's not much room for more bulls. Once the stock market gets a whiff of the real problem, that hasn't gone away, it too will resume its decline. A credit contraction always leads to a recession and the stock market always sells off when heading into a recession. Don't get caught like a deer in the headlights on this issue.

Jane Fox : 10/2/2007 9:57:29 AM

The Russell 2000 futures is the only market trading outside of its overnight range. Link

Jane Fox : 10/2/2007 9:54:32 AM

DAX to new daily lows and it looks like the USDJPY is following it down. VIX is now making new daily highs so taking the lead from the S&P futures (should be the other way around but this does happen sometimes).

Jane Fox : 10/2/2007 9:46:51 AM

S&P futures are testing their daily lows but the VIX is not testing its daily highs so I suspect that support will hold.

Jeff Bailey : 10/2/2007 9:44:47 AM

Swing trade call stopped alert ... for the BHI-AR after BHI traded $91.60.

Jane Fox : 10/2/2007 9:42:28 AM

Remember Pending home sales report at 10:00.

Jane Fox : 10/2/2007 9:41:41 AM

Just a quick look at the internals and I see that the bulls have control of the ball but the AD line at +429, although better than the open, tells me the bulls do not have field position.

Jane Fox : 10/2/2007 9:36:14 AM

AD line is a neutral +174

Keene Little : 10/2/2007 9:26:04 AM

Gold hit the top of its parallel up-channel for price action since the October 2006 low and I had mentioned in the past how it would be a great short play setup. After tagging the top of the channel yesterday it has now pulled back sharply: Link While upside risk remains to 771.40 for two equal legs up I like the setup here for shorting bounces in gold now. The leg up from the August low counts complete (5 waves) as wave-C of the A-B-C correction to the decline from the May 2006 high.

Gold is a longer term short from here as it should now head for $500 if not lower. And since equities and the metals have been in synch I'm expecting the same for equities. If we haven't put in the high then it should be soon.

Jane Fox : 10/2/2007 9:23:09 AM

Here is a chart of the DOW. I have been saying that I think the market needs to take a breather and retrace before it can resume this rally but what does a retracement look like and how can I use it to position myself long for the next leg up?

I see the 13700 area as a very good support zone but I think the retracement needs to be deeper and the 38.2% would be a much better spot. Why do I say the 38.20% level? Well from this chart do you see a "cup" that is confirmed by the MACD? A handle to this cup should retrace 38.20% before it resumes its rally. This is a very bullish chart folks. Link

Keene Little : 10/2/2007 9:15:30 AM

Equity futures pushed a little higher in overnight trading but in a choppy fashion and looks like it could be setting up for a further pullback from yesterday's highs. Hopefully we'll get a pullback today and the form of it will provide some clues as to what's next (which EW pattern we're in).

Jane Fox : 10/2/2007 9:13:39 AM

Will Crude break support at $79.00/bl or not? From a purely technical point of view I would say no but will I go out on a limb to say it will hold or put my money at stake - no. There are others who work with OptionInvestor.com that know a lot more about Crude than I do and he (Jim Brown) thinks Crude needs to retrace more than a measly 23.8%. Link

Jane Fox : 10/2/2007 9:09:37 AM

I think there is a very good chance that Gold can retrace 50% of the rally from $650 which is back to $700/oz.

If it does I will be a buyer for sure. Link

Jane Fox : 10/2/2007 9:07:25 AM

NEW YORK (MarketWatch) -- Gold futures tumbled more than 2% early Tuesday as traders rushed to lock in gains, with other metals prices also selling off sharply.

Gold for December delivery dropped $16.60, or 2.2%, at $737.50 an ounce on the New York Mercantile Exchange.

"Despite finishing close to multi-decade highs yesterday, most of the precious complex has been hard hit by profit-taking this morning amidst speculation the current rallies are overdone," said James Moore, metals analyst at TheBullionDesk.com, in a research note.

On Monday, gold futures rose $4.10 to finish at $754.10 an ounce. The contract had earlier hit an intraday high at $755, the highest level seen in nearly 28 year

Jane Fox : 10/2/2007 9:03:05 AM

As long as Crude was making new all time highs people were buying Gold to hedge against the inflationary pressure of higher crude prices and that pressure became the predominate force on Gold whereas it is usually the $. Now that crude is easing off the Gold/US$ relationship is once again becoming the predominate force on Gold. Link

Jane Fox : 10/2/2007 8:58:01 AM

The overnight session was a sideways consolidation of the very healthy rally we saw yesterday. The markets are getting overdone here and, like I said yesterday, expect a pullback, if you are bullish "hope" for a pullback. Retracements are necessary in order to bring more buyers and push the markets higher. Link

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