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Keene Little : 10/19/2007 12:29:45 AM

What I said for the oil trade goes for gold as well. I liked the setup for another short play at 773.50 with a stop at 777.50. Again we're in blue sky territory here so the stop is based purely on how much I want to risk on the play and knowing there's upside potential to 784.50 if it doesn't hold here (it spiked up to 776 and is currently trading around 772-775 tonight): Link

Just be very clear you understand the risks in trying to find tops and bottoms, which is my preferred trading method and what I typically set up, even if it's a pullback within an uptrend or bounce within a downtrend. It may take a time or two or three but with small stops you can then make it all back, and then some, with the big win when the market does turn (sometimes it doesn't so you need to know when to quit trying--mine is 3 strikes and I'm out).

I look for at least 3:1 reward to risk, 4:1 is even better, which is why 3 strikes and I'm out. If you let the market go too much against your position then it takes a much bigger move in your direction just to break even. Don't do that to yourself--take the stop and prepare for another entry. So with gold we'll see how that's looking in the morning as well.

Jeff Bailey : 10/19/2007 12:08:52 AM

What Went Wrong at Amaranth ... Link

Keene Little : 10/19/2007 12:05:35 AM

During the day on Thursday I showed the daily and 60-min charts of oil (December contract) and what I felt was a good setup for a short play. The EW pattern, Fibs and trend lines make it look good for a top in the 88.15-88.42 area. For QM07Z (December e-mini) there was one contract that traded at 88.475 and 8 contracts at 88.45 tonight (obviously light volume) and the rest of them were below 88.42. It's been trading right around 88.00 for the past six hours. I have no idea if we've seen the top but as I said the setup is a good one and we'll know tomorrow.

This is clearly an effort to catch the top of its rally so you need to first of all understand the risk in trying to catch rising knives (or falling knives if trying to pick a bottom). When first picking a top you have to decide how much you're willing to risk since it may not be easy to identify a good resistance level to place your stop above (certainly for oil that's true since we're in blue sky territory).

When I do these kinds of trades I look for a rollover (obviously) and then lower my stop to a few ticks to a new high as soon as I can. I take these kinds of trades with the assumption it has to turn right around and start heading lower and I pull my stop down tight as soon as I can. I don't recommend entering trades overnight because it's too illiquid. So I'll be checking on oil in the morning to see what kind of setup we have.

Jeff Bailey : 10/19/2007 12:05:25 AM

Dec. Crude Oil (cl07z) ... PnF chart Link

See that action down below and the distribution lower $75.50 to $70.00, then a little rebound 70.50 to 72.50, then a distribution lower , then a little rebound, then a distribution lower, then a BOOM! (see yesterday's MM comentary and bearish signal reversed).

The recent "shake out" was the trade at $78, then the BOOM to where it's at.

Guess what day that "shake out" was? Yep ... 10/08/07 (see my MM Profiles).

Now ... if you've been trying to "pick a top" in crude and its cost you more than $410.00 (eyeballing MM has easily exceed that), then STOP trying. Buy a put option and be done with it.

Keene Little : 10/18/2007 11:49:06 PM

Friday's pivot tables: Link and Link

There hasn't been much of a change on the DOW and SPX 60-min charts from what I posted last night. We got an early pullback as I had expected and then another push higher in the afternoon. Other than the techs the 2nd leg up didn't exhibit that much strength and leaves me guessing whether we'll see additional upside or not. The first Fib projections for the 2nd leg up have been met and I show a little higher potential for both but if the market instead rolls right back over and takes out Wednesday's low then it has the potential to get ugly:
DOW: Link
SPX: Link

The continued strength in the techs makes me think the market is not in trouble yet. It's possible the techs will pull back again before proceeding higher but I don't see that in the price pattern. It looks to me like we should see a rally from here (futures are down this eveningh so we'll just have to see how the market opens):
NDX: Link

Unless the rest of the market, small caps included, can get going to the upside I see a distinct possibility for techs to make a new high (above last week's) without the others. That would of course be bearish non-confirmation and something to watch for. It would be another signal from the market that says we're in a topping process (process being the operative word).

Jeff Bailey : 10/18/2007 11:44:06 PM

December Crude Oil's (cl07z) bullish vertical count still under construction after a "shake out" at $78.00. Top of 10-week trading band currently at $84.50 (correlative with MONTHLY S1).

Jeff Bailey : 10/18/2007 11:28:34 PM

MONTHLY Pivot Levels for Dec. Crude (cl07z) ... $67.99, $74.22, Piv= $78.34, $84.57, $88.69.

Jeff Bailey : 10/18/2007 11:14:53 PM

December Crude (cl07z) $87.98 -0.06% ... traded as high as $88.49

Jeff Bailey : 10/18/2007 11:04:58 PM

Oil Futures Surpass $90/Barrel ... AP Story Link ... Mentions dollar tie.

Jeff Bailey : 10/18/2007 10:45:26 PM

Per yesterday's 02:52:18 .... Always buy as much time as you can afford, and you can NEVER buy too much time. This is a BASICS 101 of option trading.

Jeff Bailey : 10/18/2007 10:24:11 PM

Closing U.S. Market Watch found at this Link ... noting some "round number" low and highs for DXY then cl07x, slv, gld.

Jeff Bailey : 10/18/2007 10:11:46 PM

Google (GOOG) $639.62 +0.96% ... I'm showing last tick extended at $643.50.

Jeff Bailey : 10/18/2007 10:08:47 PM

Dollar Index (DXY) 77.58 (30-minute delayed) ... 60-minute interval chart (all sessions turned on) Link

see 10/18/07 09:50:41 comment.

OI Technical Staff : 10/18/2007 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 : 10/18/2007 9:50:41 PM

So far this evening, DXY's WKLY S2 not traded. If that level doesn't hold, there's some "air under there" to MONTHLY 19.1% at 76.695.

Jeff Bailey : 10/18/2007 9:46:40 PM

Nikkei-225 ($NIKK) Link ... currently down 283 points, or -1.66% at 16,823.

Session high/low has been 16,965/16,791

Jeff Bailey : 10/18/2007 9:25:36 PM

November Crude (cl07x) ... hits $90.02 overnight.

Reminder: November Crude expires on Monday.

Shorts in a heap-a-trouble if they don't have some in storage to deliver.

Jeff Bailey : 10/18/2007 9:19:54 PM

SanDisk (SNDK) $50.31 +2.52% ... slipped to $48.58 extended.

Earnings Press Release Link

May not be able to meet 100% of the demand?

GAAP gross margin fell to 24.3%, compared to 32.4% last year, but up from 16.2% in Q2.

Non-GAAP gross margin for Q3 was 26.4% compared to 32.7% last year, but up 19% in Q2.

Jeff Bailey : 10/18/2007 9:12:02 PM

ICE $161.88 +2.45% ... looks like it wants to get "hot" again.

Jeff Bailey : 10/18/2007 9:05:18 PM

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

Pretty good pattern on FFIV today eh?

PTR and CEO "sqaured up" on YrNet% basis.

Keene Little : 10/18/2007 4:47:33 PM

I've got a pattern for oil that calls for a potential top here (today's high is 88.275 so far which is right in between the 88.15-88.42 potential upside target I have for it) and now a potential upside completion for gold. I like the fact that they're in synch in looking like a top. I'll either be wrong on both and they'll both keep rallying or else this is a good shorting opportunity on both.

That should mean the US dollar is finding a bottom (or sometimes oil and gold will lead the dollar). We'll have to see about that one since I see the possibility for the US dollar to sink to about 77 and today's low is 77.478.

Keene Little : 10/18/2007 4:39:23 PM

on cnbc just now..impotence drugs causing hearing losses..well..since when did men listen anyway? :-)

That was mean Denise. I resemble that remark.

Keene Little : 10/18/2007 4:33:57 PM

Looking at a 60-min all-hours chart of YG (gold e-mini), I'm seeing the next setup for a short play. The first Fib projection based off the first wave is at 773.77 (5th wave = 62% of the 1st wave). The reason I'm interested here is because of the small rising wedge for price action off Wednesday's low which looks like an ending diagonal 5th wave (a common ending pattern). Link

So shorting YG at 773.50 with a stop at 777.50 (about $135 per contract with commissions) is the recommended play. The stop is somewhat of an arbitrary number but any rally much above that would likely have it heading for the upper Fib projection at 784.50 and I'd rather stop out and watch to see if it gets there.

Keene Little : 10/18/2007 4:05:46 PM

Looks like they announced and first reaction was selling. Who knows how it will progress from here but so far it's a sell-the-news again.

Keene Little : 10/18/2007 4:04:37 PM

I think it was Jim who mentioned in his weekend Wrap that GOOG has sold off about 80% of the time following its earnings report. That has obviously set up a great buying opportunity each time and you can bet traders will do the same if it sells off again. Pavlovian response.

Keene Little : 10/18/2007 4:00:10 PM

As I've pointed out recently on GOOG's daily chart, I see upside potential to the top of its parallel up-channel from 2006, currently near 650. A Fib projection for the final 5th wave (the way I've got it counted) is 642.50 at the lower projection (62% of wave-1) to 661.36 (equality with wave-1). Right in between is the top of its up-channel. So there's clearly a little more upside potential following its earnings report after the bell today. But I see either a last hurrah here or we've seen it before the bell. Link

Linda Piazza : 10/18/2007 3:57:14 PM

Like the SPX, the OEX continues challenging resistance that is usually strong once the OEX has begun moving through the bottom or bearish half of the Keltner channels. That resistance now extends from the current 718.80 up to 720.53 on 10-mintue closes. The SPX has traded in a tight range all day, however, and I don't know that we can say anything definitive about it other than that.

Keene Little : 10/18/2007 3:50:30 PM

Watching price consolidation in GOOG since last week's high has had me thinking it needs one more leg down within a sideways triangle (following their earnings release tonight?) to then set up a final rally leg to new all-time highs. But now that GOOG has been chopping its way higher, and breaking above the top of its consolidation pattern today, I'm beginning to lean a little more bearishly about what's going to happen next. Link

If the pullback to the low on Tuesday was the end of the 4th wave correction then the choppy rally since, which has formed a rising wedge, could be the final 5th wave of the rally from August. If true then it's setting up for a sell-the-news event following its earings release. It sure looks like investors have priced in a stellar report. I'd be afraid of this stock if long (but clearly risky shorting it).

Some of the other tech generals have not fared well after earnings (IBM, YHOO, EBAY to name a few) and if GOOG also sells off then I think we could be getting an important message from the market and the broader market could be in trouble sooner rather than later. I'm obviously speculating here but feeling nervous about what I'm seeing as a lack of strength creeping into more sectors and topping action in the stronger sectors).

Linda Piazza : 10/18/2007 3:44:59 PM

It's been a tough day for those holding expiring Oct options, hasn't it? The SPX still hasn't given up its resistance test, gradually working itself through layer after layer of resistance to get there again. Resistance lies at the SPX's current 1540.76 level on 10-minute closes and extends up to 1544.10. I'll repeat what I said earlier: these levels of resistance are usually strong. The mark the differnece between a bearish trading tenor and a bullish one, and they've held all week. It looks as if prices are being parked here, preparatory to a breakout toward higher levels again, but I honestly don't try to predict price action this close to the close on an opex Thursday. Anything can happen; maybe nothing will.

Jane Fox : 10/18/2007 3:24:50 PM

Here are the charts of how the markets are trading in relation to their PDRs. Before you look guess which market is above its PDH. Link

Keene Little : 10/18/2007 3:23:41 PM

The reader question that Linda answered (2:52 PM), the only thing I'll add is "what she said". Buying deep ITM options works great when the trade goes in your direction but costs you big when it moves against you (similar to buying and selling the stock itself). But trading options is clearly a leveraged play.

As Jeff pointed out earlier, 10 option contracts is the equivalent of 1000 shares of the underlying. So a move against 50 contracts is the equivalent of a move against 50,000 shares of the stock. Poor risk management can bite you big on that kind of trade size. Even 1 contract (100 shares) can hurt a small account. Always be thinking risk management in your trading. The rest will take care of itself (assuming your wins outshine your losses over time).

Linda Piazza : 10/18/2007 3:03:42 PM

The SPX's resistance held on 10-minute closes. That resistance is now at 1543.36, with other resistance layered down to 1540.57 and then a new band of S/R just below that. What does this mean? That everything is as jumbled as it was earlier and that it's just as difficult to predict next direction. As the charts are set up, a 10-minute close much below 1536.30 would suggest a decline down toward a support line now at 1528.76, but the SPX has refused to fall toward that now-rising target all day. Despite thickening resistance, it keeps trying to rise into the resistance band instead. Trading sometimes changes tenor after the close of the bond market, but so far, nothing turns up.

Jane Fox : 10/18/2007 2:52:21 PM

Internals are bullish now and this little dip may be a good one to buy. Link

Linda Piazza : 10/18/2007 2:52:18 PM

Reader Question: I think in the past I have read some comments that most on the monitor would prefer to buy time on options. For the past two months while I have observed the monitor I have been day trading in the money current month options quite heavily in the week of opex. There is very little premium in them and quite a bit of leverage. For example, yesterday I played the dip and the bounce in the QQQQ, IWM, JPM and INTC and same today. I have been buying 50 -100 lots and taking quick profits of 20%-30% in a few hours. Doesn't seem like gambling to me as I am in the money and paying virtually no premium for a great deal of leverage with no risk of margin issues like futures. Am I missing something here? Thanks would appreciate your comments.

Response: Keene is likely to answer our question, too, but I thought I would weigh in. This question just arrived although it was sent early this morning, but the way our mail is handled creates delays. Since your email was sent but before I recieved it, I commented in the MM that when I was still daytrading, I had instituted a rule that I would not personally trade front-month (expiring) options during option expiration week. The reason? Although option expiration weeks used to be quite volatile, providing opportunities to make (or lose) lots of money, the volatility seemed to be shoved back onto the week before opex as big money seemed to be rolling out of contracts and into new ones earlier and earlier. Too often, trading flattened by mid-morning on Thursday. Technical setups that seemed perfect went nowhere. I was mainly trading the OEX and, all too often, the move that had seemed to set up on Friday wouldn't actually occur until Monday, too late to do me any good.

If you're trading deep ITM options with deltas at something like 0.94 or so, you're not going to lose much if prices just sit there, although losing even a little per contract, even that "virtually no premium" can nip a little when you have 50-100 of them. Plus, it costs a hunk of money to buy options that deep ITM and buy them in size. I tended to buy options with deltas near 0.70 as a balance, getting enough delta to benefit from a movement, but at least having affordable options. Even an expiring option with a delta near 0.70 is going to suffer if prices sit for several hours instead of move as the setup suggested it would. An option that loses $0.20 over the course of an opex Thursday or Friday as prices sit and premium leaks out will cost you $10,000 for 50 contracts, and that's not even counting bid/ask spreads and commissions.

It doesn't matter what delta you have if a sudden adverse move happens as you have no time to recover with an expiring option. Been there, done that, and with 40-50 contracts, too. Ouch, that hurts when it happens, believe me. A former trading partner of mine (former, because he no longer trades for reasons that will soon be obvious) took an even bigger hit than I did and blew through his trading account one option-expiration Friday.

So, it comes down to personal choice and risk management. Just make sure that you have an options-lost-value stop as well as one contingent on the price of the underlying.

It sounds as if you're doing great, and I congratulate you. I said I had that rule, but of course I broke it now and then. I didn't do it with many contracts or much money, though. Strictly lunch-money or lottery-money type plays only.

Keene Little : 10/18/2007 2:35:06 PM

If oil now breaks below 86.50 (December) that would signify we've seen the high.

Keene Little : 10/18/2007 2:34:04 PM

I just got an alarm at QM (December contract) 88.15 so the first Fib target for oil has been tagged (I'm looking for 88.15-88.42 for a potential high). I'm thinking a small pullback and another high before the pattern is complete but heads up if you're interested in the short side on oil as I think we could be close to a top.

Keene Little : 10/18/2007 2:19:16 PM

The same triangle consolidation pattern for the DOW today changes its upside projection for its a-b-c bounce off yesterday's low to 13919 (wave-c = 62% of wave-a) and 13965 (equality). The higher Fib projection matches the 30-min 100/130 pma's so that would make for a good level to watch for a short play setup. If it can get above its downtrend line then the next trend line to deal with is the broken uptrend line from August, currently near 13935. Link

Keene Little : 10/18/2007 2:13:06 PM

The DOW just smacked its head on its downtrend line from last week, now at 13910.

Keene Little : 10/18/2007 2:11:01 PM

On that 30-min chart I left off the downtrend line from last week's high but SPX has now broken it so the bulls will want to see it hold on any pullback to retest it. Currently the line is near 1537.

Keene Little : 10/18/2007 2:08:21 PM

Notice also on the SPX 30-min chart just posted that the neckline for the potential H&S top matches the Fib projection for the 2nd leg of the bounce to be equal to 62% of the first, just under 1543. It's possible the bounce could fail right here.

Keene Little : 10/18/2007 2:05:39 PM

After the pop up off yesterday's low, SPX went into a sideways triangle type of consolidation today. Out of this consolidation a second and equal leg up gives us an upside target of 1548.45: Link

Because today's consolidation was a sideways triangle and because these triangle patterns are typically only found in b-wave and 4th wave positions, it likely means we're looking at an a-b-c bounce off yesterday's low. That's not impulsive and already has me thinking we're not at the start of something more bullish to the upside.

That's a long-winded way of me saying I'll be looking to short the top of this rally and SPX 1548 is the area I'll be watching for a setup.

Linda Piazza : 10/18/2007 2:01:29 PM

Analogous OEX levels as those mentione din my 2:00:55 post for the SPX are 748.80 and 720.18.

Linda Piazza : 10/18/2007 2:00:55 PM

The SPX is rising to test Keltner resistance that is usually significant on 10-minute closes, with that at 1540.70 and then at 1543.07. This move comes just as a typical stop-running time of day ends. A ten-minute close above 1543.07 that is sustained or significant changes the tenor of the last few days, but just be wary on this opex Thursday.

Jane Fox : 10/18/2007 1:33:35 PM

WASHINGTON (MarketWatch) -- Factory activity in the Philadelphia region is increasing at a slightly slower pace, the Federal Reserve Bank of Philadelphia reported Thursday in its October survey.

The Philly Fed index dipped to 6.8 in October from 10.9 in September, the bank said. Readings over zero indicate that most firms in the survey said business was growing.

Economists said the report was worse than it looked on the surface.

The new orders index fell sharply to 2.7 from 15.1. The current shipments index fell to negative 4.1, dropping below zero for the first time in year, indicating that shipments declined in early October

Jane Fox : 10/18/2007 1:31:58 PM

WASHINGTON (MarketWatch) -- The House failed on Thursday to override President Bush's veto of a proposal to expand funding for the State Children's Health Insurance Program by $35 billion. The vote, 273-to-156, means the next step for Democrats and Republicans could be compromising on a new funding level. Bush has said he's willing to sign a bill that includes a higher expansion than his own $5 billion proposal. A current funding extension for SCHIP expires in mid-November.

Keene Little : 10/18/2007 1:20:48 PM

The reason I wanted you to see PTR [Petrchina] was because you were interested in shorting oil and PTR sure looked like the best place to do it. I got short yesterday at 265.45 thinking it looked like a blowoff top. Considering Pertochina passed GE in market cap on Tuesday, that daily chart looks absolutely insane. Oil has been rallying but only by about 10%. PTR has rallied from 180 to almost 270 (50%) in the last two weeks. How can a company of that size sustain that kind of rally? I don't think it can, but then trading bubbles is always dangerous.

Thanks Mark. Your last sentence says it all. But I'm thinking you might have a good entry for your short (keeping in mind your last sentence--smile). The wave count of the move up from the August low now has 5 waves and the 5th wave also looks like it could have completed its 5 waves (it's a gappy stock so that makes the smaller time frame counts more difficult): Link . The last high made yesterday showed negative divergence against its previous lower high on the 15th when you look at the 60-min chart.

So it looks good for a high. Just be careful! Those gaps can be painful if it goes against you.

Linda Piazza : 10/18/2007 12:58:54 PM

For OEX traders, your settlement values are determined by the closing value of each OEX component stock on Friday. I don't remember huge differences in Friday closing prices and settlement values from my days trading the OEX, but a year or two before I stopped daytrading, I set a rule not to trade front-month OEX options (because of this kind of action we're seeing today) and so it's been years since I've watched those differences that closely. It seems that over the last year, the number of weird settlement values has increased, and I think it's exacerbated in those options that settle Friday morning. At least with the OEX, you can get an idea where things are headed into the close. You're at the mercy of anything China or Japan or Europe or some reporting company does after-hours and then during the overnight and premarket sessions with the SPX settlement.

Linda Piazza : 10/18/2007 12:55:01 PM

And this is opex Thursday, so no movement toward the presumed downside targets has occurred. I would caution against believing too strongly in any short-term setup, bullish or bearish, on this opex Thursday as the action will be more about pinning-them-to-the-number opex action.

I've been out of my October positions for a long while now, locking in partial profit some time ago, but those trading the October SPX options, either in regular long plays or in some kind of spread, should keep in mind the three or four times over the last year when we've had absolutely wild settlement values for the SPX. For those new to trading, the SPX options' settlement value is determined Friday morning. It's not the opening value for the SPX, as some presume, but rather is calculated from the opening value of each of the SPX component stocks. It can be a value that is never seen opex Friday. It can be far above or below Thursday's closing price. I can't remember the extreme we had a couple of months ago, but I do remember settlement values that are 15 points off the Thursday close. It can be a bigger difference and was, at least once this year.

Jeff Bailey : 10/18/2007 12:44:50 PM

Stepping away for the rest of the day As mentioned earlier, I need to get going to a funeral. I'll update things later this evening when I return.

Jeff Bailey : 10/18/2007 12:44:45 PM

Did you know that bullish and bearish vertical counts are based on the science of ballistics?

Think of the column of X, or O that gets established by the reversing buy, or sell signal, that becomes the barrel of a gun.

What's more accurate, or best for shooting at a target 300-yards away? A snub-nosed revolver, or a rifle with a 40" barrel?

Jane Fox : 10/18/2007 12:38:45 PM

These charts of the S&P futures and VIX are telling you very clearly that you should not be trading right now. Link

Jeff Bailey : 10/18/2007 12:38:03 PM

Let's set an alert on VNDA at $16.00.

Today's trade at $17.50 does show a 3-box reversal.

So, the bullish vertical count column from $14.00 to $19.00 has been constructed.

We calculate the bullish vertical count as follows ...

Take the base X ($14), and add up those X's to $19. I count 11 X's.

Now, multiply 11 by 3 (always 3 for the BULLISH count).

I come up with $33.

Now look at the Box Size, which is $0.50 increments. Multiply $33 by 0.50. I come up with $16.50.

Now, add that $16.50 to the base column of X ($14.00) to derive a potentially longer-term target of $30.50.

Jeff Bailey : 10/18/2007 12:31:23 PM

Might just have to "watch list" VNDA. First test of bearish resistance is often-times painful for a bull. That is, expect selling at trend.

Ahhhh... but has something change? Has the systematic bearish signals been reversed for a reason? News out? Or news coming?

Where would have been a good price to buy VNDA?

Sometimes, the MARKET gives us a 2nd chance.

Jeff Bailey : 10/18/2007 12:27:46 PM

Vanda Pharma (VNDA) Link ... Here's an example of a bearish signal reversed

Now, "pretend" that each column of O and X is a daily bar. See the "predictable" bearish pattern that got reversed with the trade at $16.00?

Jeff Bailey : 10/18/2007 12:22:26 PM

Bearish Signal Reversed ... is a point and figure chart pattern that usually takes a couple of MONTHLY, or several WEEKS to develop on a PnF chart.

The supply (o) and demand (x) characteristic has the stock showing several columns of alternating O and X, where a lower high and lower lower is found.

It is as if the market is distributing the stock lower to a point, then it rallies a bit, but to a lower high. Then the stock is distribution further to a lower low. Then the stock rallies a bit, but to a lower high.

As time passes, it become "predictable."

Then suddenly, the pattern is REVERSED.

Linda Piazza : 10/18/2007 12:21:20 PM

The OEX is also producing closes beneath its 10-minute 9-ema, with that now at 716.25. As long as that's true, it's set up a potential downside target (and potential support) at 713.26, but I don't know how viable a target that is on the OEX, either, as per my 12:20:09 comments.

Linda Piazza : 10/18/2007 12:20:09 PM

I see a slight weakening in the support for the SPX as seen on the 10-minute Keltner chart, but nothing particularly significant yet since the Philly Fed. If this weren't opex Thursday, however, I would suggest that as long as the SPX is producing 10-minute closes beneath 1535.07 (9-ema), it's maintaining a downside target of 1527.81. I just don't know how viable that is, giving today's climate and the timing with regard to opex.

Jeff Bailey : 10/18/2007 12:16:07 PM

FFIV bar chart Link ... email I sent subscriber (that wondered about FFIV as bullish trade)

You still hanging in there with FFIV?
Check out its daily interval bar chart.
Are you familliar with the Point and Figure pattern "bearish signal reversed?"
Daily interval bar chart of FFIV would look similar, series of lower highs and lower lows quickly reversed.
It sure looks like somebody is "shorting down the scale" since that relative high of $43.75 on 10/08/07.
Watch it, perhaps trade it long tomorrow on a break above the 10/16/07 high (quick reverse).

Jeff Bailey : 10/18/2007 12:10:11 PM

F5 Networks (FFIV) alert! $41.52 +0.99% ... watch this move on Daily interval bar chart. What PnF pattern does it look similar to?

Jeff Bailey : 10/18/2007 12:04:58 PM

SMH $36.36 -1.19% ...

Jeff Bailey : 10/18/2007 12:04:39 PM

TRAN 4,896.66 +0.34% ...

Jeff Bailey : 10/18/2007 12:04:19 PM

BIX.X 339.62 -2.07% ...

Jeff Bailey : 10/18/2007 12:04:01 PM

SPY $153.42 -0.53% ...

Jeff Bailey : 10/18/2007 12:03:37 PM

Philadelphia Fed October Business Index: 6.8 Vs. Sep 10.9.

Jeff Bailey : 10/18/2007 12:00:32 PM

Forex Global Currencies (live) Link

Screen caputure last last night Link

At the bid (115.592), the USD/JPY weaker by 0.928, or -0.796%.

Keene Little : 10/18/2007 11:58:17 AM

I'm waiting to see if we get a further pullback today before another leg up (assuming we're going to get another leg up) to provide an upside projection. But for now let's assume the pullback is finished for today and we're in the next leg up. Two equal legs up in that case from yesterday's low gives us an upside target for the DOW at 13941. That crosses its broken uptrend line from August at the end of the day today: Link

From there the bulls will want to see either a continuation higher (back above the line right away) or a pullback that finds support at the broken downtrend line from last week. This is all speculation at the moment but something to watch for. If price sinks lower instead then I'll be watching for potential support at the lower trend line, maybe even a retest of yesterday's low. That low shouldn't break otherwise we'll have something a lot more bearish in progress.

Linda Piazza : 10/18/2007 11:57:22 AM

The Philly Fed could move the markets because of the preview it gives us of the ISM number, or, markets could just trundle along no matter what it says. Make your decision soon as to whether you want to hold over that number's release or not.

Keene Little : 10/18/2007 11:47:45 AM

Are you getting that "pinned" feeling today?

Linda Piazza : 10/18/2007 11:43:18 AM

Denise asked for projected figures on the Philly Fed to be released at noon EST. My sources list an expectation for a decline to 7.0 in the headline, down from the prior 10.9.

Linda Piazza : 10/18/2007 11:40:29 AM

TRIN is gradually rising; VIX is not. The ADVDEC line is turning up toward the day's high; the USDJPY is turning down toward the day's low. No wonder future price action is difficult to determine.

Just as I suspected in my earlier post, without strong downward action occurring, the SPX's Keltner support has begun flattening and the lines no longer slope downward. They still look slightly weaker than resistance lines, but only slightly, and a continuation of this trendless action for too long is going to allow them to strengthen more.

Jeff Bailey : 10/18/2007 11:38:42 AM

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

Quick Explanation for understanding today's CDE trade profile.

1/2 position is $5,000.00 (Cost column). I do the math and quickly divide $5,000 by quoted price of $3.75 (Basis) to then derive #Shares.

I then establish the RISK (Stop) and REWARD (Comment). The position was establish today (Pos Date).

UHAL ... Note the "-" in front of #Shares. That is a SHORT SALE position.

EWJ and EWJ-WO. The Benchmark would be equivalent to SHORT SALE of 300 shares (roughly less than 1/2 position). The actual trade is the EWJ-WO puts. Long 3 put contracts is equivalent to being short -300 shares.

Keene Little : 10/18/2007 11:31:36 AM

Good input on WM Jeff, thanks. I knew those pointy finger charts were good for something! (wink)

Keene Little : 10/18/2007 11:30:07 AM

Clarification from Denise on my previous post on CFC (for those looking for a mortgage):

Should preface that quote on Country Wide that I was seeking an investment loan..and they are competitive on primary residences..also easy on primary if one has a mid credit score of 740 or better.

Thanks Denise. Always good to get reports in from the field. These are going to be trying times for people looking for mortgages.

Jeff Bailey : 10/18/2007 11:28:25 AM

Buy WM with a stop just under the day's low?

No thank you.

Jeff Bailey : 10/18/2007 11:27:49 AM

If I could chime in on Washington Mutual (WM) $30.48 -7.83% ... real quick.

Dorsey/Wright classifies the stock as belonging to the SAVIngs & Loans sector. (see my 10:32:05)

Yesterday's trade at $33 gave a reversing lower PnF "sell signal". Today's further decline to $30 has bearish vertical count column building to $20.

Keene Little : 10/18/2007 11:20:10 AM

I talked to a loan officer at Country wide about doing a re-fi with them..since my loan on the ppty is with them. They were not competitive. He did say to me..you know it is not our money..it is from B of A!

Speaking of CFC, I showed the daily chart last Friday and suggested the sideways triangle since the August low was a continuation pattern and that we'd see a breakdown from it. Looks like it's started: Link

Jeff Bailey : 10/18/2007 11:18:30 AM

Dow Jones Home Construction (DJUSHB) Alert! 336.74 -2.86% ... probes its 09/27/07 low.

Keene Little : 10/18/2007 11:10:51 AM

While watching to see what gold is going to do next, I'm also watching oil (and the dollar). Here's what I'm watching for on oil (December contract): Link . The daily chart that I've been showing (including in last night's Wrap) shows a Fib projection at 88.15 which is where the 5th wave = the 1st wave in the leg up from May.

Moving in closer to that 5th wave (the leg up from Oct 8th) I want to see a 5-wave move for it and the wave count on this leg up shows we should be into the final 5th wave (impulsive moves consist of 5 waves so waves 1, 3 and 5 of a 5-wave move each consist of a 5-wave move themselves). For the leg up from Oct 8th, the 5th wave would equal the 1st wave at 88.42: Link

So we've got some correlation at 88.15-88.42 for a high in oil (December). I'm now waiting to see how this final 5th of the 5th wave proceeds (it should also be made up of 5 waves) to try to nail down the top of the move.

Jeff Bailey : 10/18/2007 11:04:36 AM

Educational: RISK MANAGED OPTIONS! ... Now, let's say I was looking at OPTIONS for the 1/2 position in CDE and didn't want to tie up $5,000.00 in the underlying stock.

Say the $2.50 call strike.

I would use the 1,333 share calculation (see 10:54:21 AM) and do this.

1 contract is equivalent to 100 shares.

1,333 divided by 100 = 13.33 contracts.

Round down and you get a 13 contract equivalent.

This is RISK MANAGEMENT.

If you buy 1,000 contracts, in essence your "saying" you'd buy 100,000 shares. That would be OVERLEVERAGED and would not be very prudent.

OPTIONS can go "poof" overnight.

Jeff Bailey : 10/18/2007 10:54:21 AM

I'm running the MM Profiles as if a "full position" is equivalent to $10,000.00.

So, 1/2 position is $5,000.00.

Take $5,000.00 and divide by $3.75 to get # of shares = 1,333.33. The round DOWN to 1,333.

If CDE trades TARGET of $3.95, does the trade "make sens" including any commission for the account?

$0.20 x 1,333 = $333.00 potential gain.

If CDE were to trade STOP, would it damage your account significantly?

If CDE were to go bankrupt tomorrow, can your account survive, or would it BLOW UP?

Linda Piazza : 10/18/2007 10:52:12 AM

Here's generally what I see on the SPX's 10- and 30-minute charts, and it's similar on the OEX's: prices are lining up in the middle of the lower half of the Keltner channels. Resistance lines are flattened while support lines (other than the 9-ema's along which prices are ranged now) are still slanting lower. That lends an impression of weaker support than resistance, but if prices just keep lining up along the flattening 9-ema's, then the lower support lines are going to flatten and converge, too. In other words, support looks temporarily weaker than resistance, but bears better do something about it quickly, or that's going to change.

Keene Little : 10/18/2007 10:51:09 AM

Wondering if anyone could comment on buying WM here. Div at 7.5% unless they cut the div.

Personally I wouldn't be interested in buying any banks at the moment. I think they've got more downside ahead of them. They'll probably be one of the first indices to find a bottom but certainly not yet, imho. The pattern of its decline from 2006 makes it look like it will continue to stair-step lower into 2008. From what I've read, WM is one of the better banks but that won't help in a general market decline.

The monthly chart shows a 62% retracement of its 2000-2006 rally would take it back down near the 2001 and 2002 lows near $26-27: Link . Maybe I'd be interested down there but only after I see what kind of wave pattern I see by that time. As I said, it's probably at least 6 months away. A $5 drop from its $31 price today would be a -16% loss which obviously more than wipes out the +7.5% dividend.

One idea to consider would be to sell some January or April 25 puts on WM. Or even the 30 if you don't mind owning the stock for $30 minus the value of the put. If the stock doesn't get there by the time the put expires then it's free money (minus the potential value of the margin set aside that could have been used elsewhere).

Selling puts can be an effective way of buying stocks at a discount. Just keep in mind that selling puts is a bullish play so you need to be comfortable doing that depending on your overall market bias.

Jeff Bailey : 10/18/2007 10:49:38 AM

Swing trade long alert! ... for 1/2 position in shares of Coeur D' Alene Mines (CDE) at the offer of $3.75. Stop goes $3.66. Target $3.95.

Linda Piazza : 10/18/2007 10:48:03 AM

I don't have a good feel for the markets today, and the way Keltner charts are setting up tells me that I'm right to be a little hesitant to jump in with predictions. Early on, before the BAC report, I didn't think futures matched other indicators (diving U.S. dollar overnight) but then just after the cash open, neither did the dip seem to match some indicator actions (USDJPY which was by then bouncing off its overnight low, VIX, TRIN) while matching others (weakness in futures after the BAC report, advdec line for a while). It feels as if there hasn't been a conclusion yet by big money where it's going to take markets. I'm wondering if markets aren't wandering around until the Philly Fed, with that action exacerbated by the typical opex type action that sometimes clamps down on prices by midday on Thursday of opex week.

Jeff Bailey : 10/18/2007 10:45:44 AM

iShares Silver (SLV) $136.70 +1.09% ...

Jeff Bailey : 10/18/2007 10:45:18 AM

StreetTracks Gold (GLD) $75.53 +1.38% ...

Jeff Bailey : 10/18/2007 10:44:52 AM

US Oil Fund (USO) $67.66 +1.54% ...

Jeff Bailey : 10/18/2007 10:43:57 AM

Index Pivot Matrix for today at this Link ... I've highlighted in YELLOW today's action in the DAILY Pivots.

Ooops... Should have highlighted WEEKLY S1 for the DXY.

Jeff Bailey : 10/18/2007 10:35:59 AM

EIA: Weekly Nat Gas Table at this Link ... Build of 39 Bcf.

Linda Piazza : 10/18/2007 10:34:09 AM

SPX ten-minute resistance is now at 1542.76 and then at 1546.93. Unless it's going to be a particularly strong day, these are usually strong resistance on 10-minute closes. We of course can all see little potential inverse H&S's setting up with necklines near that resistance, so we can see bullish intentions firming up. Will they have the strength to send prices through that resistance? As I type, the USDJPY is testing its neckline of its version, with the USDJPY at 115.72. Watching that might give us some guidelines, but remember to watch for potentially strong resistance at about 116.25 on the USDJPY, if it should rise that far.

Jeff Bailey : 10/18/2007 10:32:05 AM

Sector Status Changes ... Yesterday's action had Dorsey/Wright's REAL Estate sector bullish % reversersing back lower to "bull correction" status from "bull confirmed."

SAVIngs & Loans reversed back lower to "bear confirmed" from "bull alert."

Keene Little : 10/18/2007 10:31:22 AM

Traders liked that dip and indexes are right back up near yesterday afternoon's highs. I'm not sure the dip is over yet and we could see some choppy consolidation yet. Opex pinning could be alive and well today. But if it drives higher from here (starting as I type) then I'll post some potential upside targets for where we'd have two equal legs up off yesterday's lows.

Linda Piazza : 10/18/2007 10:30:32 AM

Indicators just weren't negative enough to believe those lower levels were going to be tested, were they? (My 10:10:59 post.)

Jane Fox : 10/18/2007 10:25:38 AM

I have a feeling that this is all the DOW is going to give us for a dip. Link

Jeff Bailey : 10/18/2007 10:24:16 AM

GM's Global 3Q Sales Rise 4% To 2.38 Million Vehicles

DJ- Strength in markets outside North America helped General Motors Corp. (GM) record a 4% gain in third-quarter global sales to 2.38 million vehicles as it is locked in a battle with Toyota Motor Corp. (TM) for the top spot in the auto industry.

Toyota hasn't released third-quarter global sales figures yet. It outsold GM globally through the first half of the year, but GM outpaced the Japanese auto maker on a quarterly basis in the second period.

Emerging markets were strong for GM, as third-quarter sales in the Asia-Pacific region were up 15.6% to 327,522 and the Latin America, Africa and Middle East regions rose 21.8% to 329,398.

European sales were up 14.6% to 523,590 in the third quarter.

Overall, sales outside the U.S. accounted for 56% of GM's global sales, growing at nearly 14% and outpacing what GM said was the industry average growth rate of 10%.

Despite softness in the U.S., GM sales analyst Paul Ballew said during the company's conference call a strong global economy is providing a good base for global sales growth and he expects that trend to continue into next year.

"We're very pleased with the momentum we've been able to establish around the globe," he said.

The U.S. remains troublesome for GM and the auto industry in general, as GM's North American sales were down 6.1% to 1.2 million in the third quarter. U.S. industry sales have suffered due to a housing slump, high fuel prices and auto makers such as GM pulling back on fleet sales to car rental companies.

Ballew expects growth to be "subdued" in the U.S. through the fourth quarter and into 2008.

However, he said GM is stabilizing its U.S. market share at about 24% to 25% and that October sales are looking similar to September. GM's light-vehicle sales edged up 0.3% in September, while several other of its top competitors posted declines.

Ballew said he expects 2008 U.S. industry sales to be roughly flat with 2007.

Through the first nine months of the year, GM sold 7.06 million vehicles globally, up 2.4% from 2006.

GM $38.70 +0.05% ...

Jeff Bailey : 10/18/2007 10:18:08 AM

S&P Banks (BIX.X) Alert! 338.23 -2.47% ... that's a new 52-weeker.

Jeff Bailey : 10/18/2007 10:15:13 AM

US Officials Begin High-Level Trade Meetings With Japan

DJ- Top U.S. trade officials on Thursday presented their Japanese counterparts with a number of recommendations aimed at improving trade between the two countries.

The Office of the U.S. Trade Representative said it provided a broad list of recommendations to Japanese trade officials, including policies aimed at promoting competition in the wireless and pharmaceutical industries.

The list of policy suggestions mark the start of a series of high-level trade meetings between the two countries on a wide range of issues, including intellectual property rights.

"These tangible reform steps will help boost growth and opportunity by lowering costs, raising efficiency, and spurring new innovative products and services that will benefit all Japanese citizens," U.S. Trade Representative Susan C. Schwab said in a statement.

Among the requests made by the U.S. is for Japan to fully liberalize the sale of insurance products made through banks, and to ensure open competition between private companies and the recently privatized Japan Post.

Linda Piazza : 10/18/2007 10:10:59 AM

The SPX has dipped to Keltner support at 1531.75 on 10-minute closes. As long as 10-minute closes continue below the 9-ema at 1535.17, currently, it's vulnerable to 1530.30 support. If that support is violated on 10-minute closes, a new downside target at 1523.87. I don't know, though. Jane may have a better take on this, but some indicators (VIX, TRIN, etc.) are not as bearish as one might expect today, while others (advdec line, the USDJPY if it continues the current downturn) are. Are market participants waiting for the Philly Fed?

Jane Fox : 10/18/2007 10:09:54 AM

WASHINGTON (MarketWatch) -- Slow growth could continue into the early months of 2008, the Conference Board said Thursday, reporting that a gauge of future economic growth rose 0.3% in September.

Seven of the 10 leading economic indicators increased in September, with the largest positive contribution from slow vendor performance. Declining building permits were the largest negative contributor.

"So while the financial markets gyrated and the slump in housing intensified, the economy continued to perform at a slow but steady pace," said Ken Goldstein, labor economist at the Conference Board.

The index of leading economic indicators, designed to forecast economic turning points, has been up and down all year, and September's result matches the level six months ago.

Jeff Bailey : 10/18/2007 10:09:37 AM

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

Linda Piazza : 10/18/2007 10:07:32 AM

The Fed has announced two more repos, one for $19.000 billion and one for $3.250 billion. That brings the total repos announced today to $28.250 billion against maturing repos of $30.250 billion. That leaves a net drain of $2.00 billion.

Jane Fox : 10/18/2007 10:06:27 AM

All internals are bearish except the AD ratio and that is enough for me to be trading.

Keene Little : 10/18/2007 10:06:47 AM

The DOW briefly broke below the bottom of a potential descending wedge and then bounced back up inside the pattern yesterday. That trend line is now near 13815 so watch for potential support there.

Jane Fox : 10/18/2007 10:05:15 AM

VIX to new daily highs confirming the S&P's new daily lows.

Jane Fox : 10/18/2007 10:03:58 AM

Yesterday Crude made a very nice doji that I though could be the beginning of a pullback but today's action is just about to negate that bearish candle formation. Link

Keene Little : 10/18/2007 10:02:18 AM

Nothing more than a pullback so far this morning. I had mentioned at the end of the day yesterday that the small 5-wave move up from yesterday's low needed to be corrected but that we should then get another leg up. I haven't see anything yet to change my opinion about that. Opex pinning is also a real possibility.

Jane Fox : 10/18/2007 9:59:00 AM

I am long Gold based on the jtHMA charts but I was hoping for a little bit more of a pullback so I could take a larger position. Link

Jane Fox : 10/18/2007 9:55:56 AM

As Keene mentioned the US$ is making new yearly lows which is only good for us Goldbugs. Link

Linda Piazza : 10/18/2007 9:52:30 AM

The USDJPY has been rising since about 8:10 this morning, but it's rising now toward a retest of its former supporting trendline drawn below the 9/10 and subsequent swing lows. That trendline now crosses at about 116.25, so I'd be watchful for another potential rollover if it should reach that high. It's far away now, at 115.64. The rising trendline off the 8/17 low is below still, at about 114.60.

Jane Fox : 10/18/2007 9:53:22 AM

AD volume's trajectory is straight down and AD line is -1001 so I would not be testing the long side here. The internals are not going to play with my mind again today are they?

Linda Piazza : 10/18/2007 9:47:08 AM

The OEX's earlier support figures were also for the 30-minute chart, not the 10-minute one. On the 10-minute chart, the 9-ema is now at about 717.58, and that held on the first 10-minute close and is currently being tested again. Further support is at 714.67-715.42 and then at 711.30. Remember that these can be pierced during the 10-minute period and still considered holding if the close is above them.

Keene Little : 10/18/2007 9:45:57 AM

The banking index (BIX) has marginally broken below the August low this morning but could find support here for a minor bounce back up to its broken uptrend line from October 2002, near 346 (currently just below 340). The banking chart is the big canary in the sky and it has fallen to the ground. Link

Linda Piazza : 10/18/2007 9:45:15 AM

The SPX maintains its 10-minute 9-ema on the first 10-minute close and is testing it again now. However, the support figures I gave earlier were actually for the 30-minute chart. I had somehow switched the charts. For the SPX the 9-ema is now at 1536.20, with lower support at 1530.47-1531.50 on 10-minute closes. Bottom-channel support is now 1524.35.

Keene Little : 10/18/2007 9:39:39 AM

With the US dollar making new lows that means it's risky considering another gold short. Gold spiked back up to 771.50, so only 10 cents above the 771.40 Fib target I've been showing, and then dropped back down to 768 currently. So that Fib resistance continues to hold gold down but I'm going to watch for a bit to see what the dollar and gold do today before trying a short again. Gold will need to get through resistance before I'd trust the upside.

Jane Fox : 10/18/2007 9:38:20 AM

VIX making new daily highs so the bears have the ball this morning.

Jane Fox : 10/18/2007 9:37:48 AM

AD line is a bearish -977.

Jane Fox : 10/18/2007 9:37:17 AM

Yesterday was a strange day. The AD line went from a high of +1842 to a low of -896 a huge range. The VIX and AD volume were bullish for about the first hour while the other 3 internals I watch were bearish. I put a lot more emphasis on the VIX and AD volume so I kept thinking we had hit a bottom and the bulls were just lurking in the shadows. Well they were lurking but it took them to 2:00ET to reveal themselves.

Last week the VIX served us very well and identified not only a bottom but the very next day a top so I guess it needed to bring us back to reality yesterday.

Linda Piazza : 10/18/2007 9:33:20 AM

SPX is now testing its 10-minute 9-ema, attempting to hold that support, now at about 1536.59 on 10-minute closes. Of course, holding this support would be the best outcome for bulls as it would suggest a potential retest of the 45-ema, now at 1543.83. Bears, of course, want this support to fail on 10-minute closes.

Linda Piazza : 10/18/2007 9:30:30 AM

Analogous OEX levels (comparing to my 9:29:27 post) are the 10-minute 9-ema at 717.48 (but due to be pushed lower) and then support sliding lower at 714.45 and a bit stronger perhaps at 711.75-713.18.

Linda Piazza : 10/18/2007 9:29:27 AM

I'm looking at the ES contract and trying to estimate where the SPX might drop the first few minutes of trading, if cash prices follow through on futures weakness, and then looking at the 10-minute Keltner chart with that potential drop in mind. Futures closed about 6 points below fair value, so I'm looking at a possible 6-point early drop. That, in fact, would bring the SPX right back down or a point or so below the 10-minute 9-ema, at 1536.62 as of the close yesterday. It will get pushed lower by early action. Below that, support is still sliding lower, so not particularly strong on a Keltner outlook at least, but it's at 1531.43 and then stronger at 1525.54-1527.20.

Keene Little : 10/18/2007 9:29:01 AM

Equities sold off hard from the overnight high. ES gave up more than 12 points but has bounced back a little and is currently down 9. It's down harder than the DOW (YM is -58 as I type) and will probably be more negatively affected by banks. The BAC earnings news and the concerns that the credit problems are not going to go away so quickly will further depress the banking index.

Now the question is whether this morning's dip will be bought. Yesterday we had a gap n crap so maybe this morning we'll have a drop n pop. Take nothing for granted in this market and don't assume pre-market direction will hold.

Jane Fox : 10/18/2007 9:18:06 AM

Notice how crude was relatively stable overnight and the Gold and US$ relationship was alive and well.

The DAX took a hit overnight just like the American markets. Link

Jane Fox : 10/18/2007 9:16:44 AM

BOSTON (MarketWatch) -- Pfizer Inc. reported dramatically lower third-quarter earnings Thursday, largely reflecting charges associated with its decision to stop selling Exubera, a once-promising inhaled-insulin therapy.

The world's largest drugmaker (PFE) posted a profit of $761 million, or 11 cents a share, compared with $3.36 billion, or 46 cents, earned in the same quarter last year. The latest quarter included a $2.8 billion charge, amounting to 31 cents a share, for the discontinuation of Exubera due to poor sales.

Jane Fox : 10/18/2007 9:12:08 AM

MarketWatch headlines are; "Bulls Brace for major losses." Well the markets did not like the news from BoA but this is hardly what you would call major losses. Link

Jane Fox : 10/18/2007 9:07:34 AM

NEW YORK ( MarketWatch) -- Bank of America Corp.'s third-quarter net income fell 32% from a year ago as trading losses, write-downs on a wide variety of loans and soaring reserves for likely future loan losses undermined profit, financial results showed Thursday.

The last of the nation's top three banks to report results this week, the Charlotte, N.C.-based company (BAC) chalked up big charges due to credit-related turmoil, suggesting that the problems in the credit market may yet be closer to the beginning than to the end.

Bank of America's shares fell 3%, to $48.50 in pre-market trade.

Jane Fox : 10/18/2007 9:06:37 AM

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission has opened an informal investigation into stock sales made by the chief executive of mortgage lender Countrywide Financial Corp., according to a report published Wednesday.

A story in the online edition of The Wall Street Journal, citing people familiar with the matter, reported the SEC is probing stock sales made by Countrywide (CFC) CEO Angelo Mozilo, who sold at least $130.6 million in Countrywide stock in the first half of this year, according to an executive sales plan.

Jane Fox : 10/18/2007 9:05:36 AM

WASHINGTON (MarketWatch) -- The number of U.S. residents filing for unemployment benefits increased last week to 337,000, the highest for first-time claims in seven weeks, the Labor Department reported Thursday.

The 28,000 increase in claims was the largest since February. A Labor Department official said some of the increase could be due to seasonal volatility around the beginning of the fourth quarter

Linda Piazza : 10/18/2007 8:46:42 AM

The USDJPY continued its drop from its early Friday morning high of 117.90, and that drop steepened after the BAC results. As I type, it's at 115.44.

Linda Piazza : 10/18/2007 8:45:03 AM

$30.250 billion in repos mature today. The Fed has already announced, a bit earlier than is typical, a $6.000 billion repo, leaving a net drain of $24.250 billion so far.

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