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Jeff Bailey : 10/23/2007 1:11:09 AM

Trade Blotter of CLOSED and OPEN Profiles that I've made here in the MM at this Link

Rows 1,228 to 1,248 are CLOSED trades. I like to use EXIT and ENTRY (Columns Q and T) to benchmark where a security (stock, or ETF) was trading at an option's ENTRY (Column F) and EXIT (Column G). I can also look today and see where the BHI-AR (Row 1,228) are trading, and where BHI $90.69, is trading. Can look at a chart of BHI and see where it has traded too!

All OPEN MM Profiles (rows 1,252-1,257) were "buy to open" option positions. So, I'm quoting them at the current bid (column G) to see where I'm at. The underlying security's price for each option is (row Q) at each day's close. Each option trade was established when the security was trading (row T).

ALWAYS monitoring Row 1,249 and Row 1,258 as part of account management and to make sure I'm staying on the right side of the trade.

Jeff Bailey : 10/23/2007 12:21:38 AM

Major Equity Indexes and Currencies Table at this Link

Still seeing a "tie" between weak US$ vs. Yen as it relates to Japan's Nikkei-225 ($NIKK).

Tonight I'm throwing on the AMEX Gold Bugs (HUI.X) and the StreetTracks Gold (GLD) for a couple of reasons.

One reason is the recent losing trade in shares of Coeur D' Alene Mines (CDE). While more of a silver miner than gold digger, CDE trades (bull and bear) were "working" for us as it related to US$/Yen. Until 10/18/07 bull profile at $3.75, then stopped at $3.66. That "shouldn't have happened" considering US$/Yen -2.43%. Note instead a rather strong correlation with Euro/US$.

Second reason I want to show HUI.X and gold the commodity is question received about my Stocks tend to LEAD the commodity's move. Simply note HUI.X week-to-week change, then gold's week-to-week change.

Keene Little : 10/22/2007 11:56:11 PM

Tuesday's pivot tables: Link and Link

The DOW, SPX and RUT are in very similar patterns, with the RUT looking relatively stronger at the moment. Its key level for the bearish wave count is the low on Oct 17th at 815.38. While the highs on the 18th are the most important key levels for each index (the NDX is in a different pattern), a climb above the low on the 17th would be a heads up that something more bullish is happening. The RUT could be the first index to give us that heads up if we rally further on Tuesday.
DOW: Link
SPX: Link
RUT: Link

NDX has been on a different path and still holds the potential to make a new high, with or without the others. The bounces on Monday kept failing at the broken uptrend line from Oct 11th, currently just above Monday's closing price. There was a brief spike above the line at Monday's open but it couldn't hold. Watch for the possibility to see that again on Tuesday. It takes a rally above 2192 to negate the bearish wave count: Link

OI Technical Staff : 10/22/2007 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.

Keene Little : 10/22/2007 5:36:17 PM

For the AAPL daily chart that I posted earlier (3:28) I showed the upside Fib projection for its 5th wave at 187.32. That just got tagged here in after-hours. GOOG had done the same thing when it tagged its upside Fib target just above 661 last Friday morning in pre-market trading (but hasn't been able to do so during RTH). Will AAPL ring the bell in after hours but not be able to hit it again during RTH? We'll only know that tomorrow but it will be interesting if AAPL also put in its final high here and now following its earnings. Certainly its price pattern is set up for a top here.

Jeff Bailey : 10/22/2007 5:17:04 PM

Closing U.S. Market Watch found at this Link

"Rolling" to December for Crude Oil, Unleaded, Heating Oil and Natural Gas in my Market Watch.

November Crude Oil (cl07x) settled down $1.04, or -1.17% at $87.56.

December Crude Oil (cl07z) settled down $0.93, or -1.069% at $86.02.

Jeff Bailey : 10/22/2007 4:57:29 PM

Canadian Natl. Railway (CNI) $52.62 -0.47% ... marked lower at $52.09 on headline numbers.

Earnings Press Release Link

Jeff Bailey : 10/22/2007 4:40:32 PM

Texas Instruments (TXN) $34.27 +1.03% ... lower at $33.21 on headline numbers.

Earnings Press Release Link

Jeff Bailey : 10/22/2007 4:35:20 PM

Apple, Inc. (AAPL) $174.36 +2.31% .... surging to $181 extended on headline numbers.

Earnings Press Release Link

Jeff Bailey : 10/22/2007 4:17:17 PM

American Express (AXP) $56.87 -0.42% ... edges higher to $58.00 on headline numbers.

Earnings Press Release Link

Jeff Bailey : 10/22/2007 4:03:07 PM

Argentina Sept. Industrial Production +8.8% on Year, +0.1% On Month

Linda Piazza : 10/22/2007 4:00:46 PM

The tree is still leaning, Keene! And so am I, by this point, so I would say the tree won. Or rather this tremendous wind that swept in weather that changed our temperatures from yesterday's 90's to today's much lower temperatures won.

Keene Little : 10/22/2007 3:59:34 PM

I don't see a reason yet to feel bullish about today's bounce--loks more like a DCB (expired feline variety). The mid-line of the parallel down-channel for SPX coincides with where the bounce will have two equal legs up near 1513 tomorrow morning. If it's going to go more sideways for another day or so then the current leg up will probably finish about here and head back down. But the 60-min and 10-min charts shows what I'm thinking could play out: Link and Link

Linda Piazza : 10/22/2007 3:59:07 PM

Unless there's a sharp decline in the last few minutes of trading, I will have been wrong about the shape of the SPX's candle, but not about the choppiness of the trading intraday. It won't have been a doji-type or a small-bodied, long-legged candle day, but one with a stronger candle springing up from support. Be careful, though, as I show the SPX testing the daily 72-ema that I sometimes find important at today's high.

Keene Little : 10/22/2007 3:49:50 PM

Linda, who's winning, you or the tree?

Jeff Bailey : 10/22/2007 3:43:14 PM

Everyone's For Sale At Google's Home Page

DJ- Upon being cookied after visiting Google's home page, Jim Murphy says whatever businesses Google is involved in, they have nothing, nothing whatsoever, to do with the welfare of the people who use this almightiest of search engines.

Linda Piazza : 10/22/2007 3:42:20 PM

It just occurred to me that while I was outside busy wrestling a tree that the wind was threatening to topple this morning, I forgot to do the report on repos. A $3.250 billion repo matured today. The Fed announced a single repo this morning in the amount of $10.500 billion, for a net add of $7.250 billion.

Keene Little : 10/22/2007 3:41:45 PM

With AAPL trading at 173, I looked at the option chain for the 170, 175 and 180 strikes. The open interest in calls for these strikes is about 103K and for puts it's about 50K. If it had been skewed towards more puts I'd say the bulls have a good chance to see an upside reaction. But right now, with the price pattern the way it is, I'd be worried if you're holding a long position in AAPL.

Jeff Bailey : 10/22/2007 3:37:48 PM

KROSZNER SAYS FED WILL 'ACT AS NEEDED'

DJ- Fed Reserve Governor Randall Kroszner reaffirms Fed's commitment to "act as needed" to ensure smooth functioning of financial markets, and cautions it will take time for conditions to return to normal in some credit markets.

Jeff Bailey : 10/22/2007 3:34:54 PM

S&P Banks Index (BIX.X) 332.08 +0.25% ...

Jeff Bailey : 10/22/2007 3:34:26 PM

FDIC SAYS BANKS MAY NEED TO UP CAPITAL

DJ- FDIC Chairman Sheila Bair says regulators are concerned about damage credit crisis is having on banks' reputations and are discussing whether banks may need to boost capital to guard against depositor concern about off-balance-sheet and other risks.

Keene Little : 10/22/2007 3:32:23 PM

Does this monthly chart of AAPL remind you of other bubbles that have recently been popped? Link . It's 1999-2000 all over again.

Jeff Bailey : 10/22/2007 3:32:12 PM

Baker Hughes (BHI) $89.85 -1.03% ...

Linda Piazza : 10/22/2007 3:31:58 PM

SPX bears (OEX, too) should be aware that today's choppy action could be the initial stages of a bear flag that could form, rising off this morning's low. Bear flag sounds good to bears, but what if it takes the SPX up to a 38.2% or even 50% retracement of the drop from the 10/11 high? Those are common retracements even if something is going to roll down again.

Depending on where you entered a bearish play, how you entered it (what month options, ITM or not, etc.), and how long a play you intended it (day trade, swing, position, etc.), riding out such a retest might or might not be okay with you. The SPX 38.2% retracement is just above 1523 and 50%, 1533.

I have no idea if that's going to happen, but be thinking about the possibility and deciding whether you're willing to weather such a retest. Set your stops accordingly.

Bulls, there's a lesson for you in this, too. Even if the SPX is going to climb for a time--minutes, hours, days--(and we don't know that yet), we won't know for a while whether such a climb is just a normal and natural bear flag retracement. You should be extra careful about your stops because the market is jittery.

Jeff Bailey : 10/22/2007 3:31:37 PM

Schlumberger (SLB) $95.11 -4.23% ...

Jeff Bailey : 10/22/2007 3:31:13 PM

Oil Service HOLDRs (AMEX:OIH) $184.23 -1.36% ...

Jeff Bailey : 10/22/2007 3:30:43 PM

HALLIBURTON CEO SEES 2008 INCOME UP

DJ- Halliburton CEO Dave Lesar says producers in the U.S. are gradually winning the pricing war over oil-field services, but an increase in drilling activity next year should keep revenue and income growing in the firm's largest market.

HAL $38.96 +0.28% ...

Jeff Bailey : 10/22/2007 3:28:50 PM

DELL TO SELL PCS THROUGH STAPLES Dell plans to sell computers and other electronics gear at 1,400 Staples stores, the latest departure from the direct-to-customer business model pioneered by the No. 2 computer maker.

DELL $27.98 +0.21% ...

SPLS $22.10 +2.59% ...

Keene Little : 10/22/2007 3:28:14 PM

Apple (AAPL) reports after the bell and its wave pattern is at an interesting place considering the earnings announcement coming. The wave count for its rally from August counts satisfactority as complete with the 5th wave having reached the typical minimum Fib projection of 62% of the 1st wave (and showing negative divergence): Link

There's an upper Fib projection at 187.32 if AAPL can keep the earnings run alive after earnings. But considering it's had an earnings run into its announcement, that places it at risk for a sell-the-news event. Bulls be careful with this one.

If AAPL sells off post-earnings, and adds to the list of tech generals that look toppy, one could reasonably argue that the NDX has also topped out. Especially with NDX not able to break above its broken uptrend line from Oct 11th, shown earlier.

Linda Piazza : 10/22/2007 3:25:15 PM

The SPX approaches its downside target and potential support, now at 1495.62 on five-minute closes, with further support at 1496.37. This target is maintained as long a five-minute closes are beneath 1499.36.

Jeff Bailey : 10/22/2007 3:24:40 PM

ABBOTT STENT RETAINS EDGE IN DATA

DJ- New one-year data for Abbott Laboratories's Xience drug-coated stent shows positive results in a head-to-head match-up with the Taxus stent made by Boston Scientific, potentially helping Abbott as it seeks to enter the U.S.ABT $51.64 +0.46% ...

BSX $14.26 -1.10% ...

Jeff Bailey : 10/22/2007 3:22:43 PM

Hong Kong's Financial Secy: Hong Kong Inflation Now 'Moderate'

Keene Little : 10/22/2007 3:22:29 PM

That's great news Linda. Here's hoping for continued improvements for your little treasure.

Jane Fox : 10/22/2007 3:19:51 PM

The Russell 2000 is the weaker market but is making quite a nice recovery today. I find this chart very hard to read and I usually steer clear of markets that are unclear to me. I find the DOW and SPX charts very clear and would use either market to position myself long. However I have chosen to go long the NDX (using the Qs of course) because its chart is clear and bullish whereas the SPX and DOW charts are not as bullish. Link

Linda Piazza : 10/22/2007 3:17:52 PM

I will be away from the Monitor tomorrow and perhaps part of Wednesday. This time, it's for a happy reason. Tomorrow, my three-and-a-half-year-old granddaughter will hear for the first time out of her right ear after she went profoundly deaf in both ears sometime around a year of age, due to her as-yet-undiagnosed underlying illness. It's been a year and a half since her first cochlear implant was activated, and now this profoundly deaf child understands language, follows directions, and speaks in sentences, although other abnormalities and weaknesses make it difficult for anyone outside the family to understand what she's saying. Now, with hearing in two ears, she will for the first time in almost three years be able to tell the direction from which sound comes. She will perhaps be more stable and not fall quite so often.

Forgive the personal note, I hope, but it's a time of celebration for our family.

Linda Piazza : 10/22/2007 3:06:34 PM

OEX current downside target and potential support on the five-minute chart is 697.95 as long a five-minute closes are maintained below the 9-ema, currently at 700.57. For the SPX, that's a 1495.75 potential target and downside support as long as five-minute closes are beneath 1550.42 currently. Take these with a grain of salt today.

Keene Little : 10/22/2007 2:58:56 PM

SPX and DOW back to the flat line. Wonder if that's where the day will close.

Linda Piazza : 10/22/2007 2:55:59 PM

On a Keltner basis, the SPX has now set a downside target of 1495.43; the OEX, 697.87. I wouldn't put too much credence in those targets, any more than I've put credence in the supposedly bullish evidence I've seen today. I'm still expecting what I expected, a day when bulls and bears are duking it out and chart evidence doesn't always give us sound predictions.

Jeff Bailey : 10/22/2007 2:51:07 PM

ECB's Weber: ECB Will Do What's Needed To Maintain Price Stability ...

DJ- European Central Bank Governing Council member Axel Weber on Monday said the central bank would do what's needed to maintain price stability and said he was concerned about the strong rise in German inflation.

Striking a hawkish tone here at the sidelines of the annual meetings of the International Monetary Fund and World Bank, Weber said, "I am somewhat concerned that inflation in Germany has risen strongly. We must counteract this."

In September, German inflation reached a rate of 2.4% - the highest in two years - following August's 1.9%. The ECB aims to anchor inflation at just below 2% over the medium term in the euro zone, of which Germany is a member.

At its last interest rate setting meeting, the ECB left its key interest rate level unchanged at 4.0%.

"Inflation risks in Germany have increased recently. They will rise further until the end of the year," said Weber, who is also president of Germany's Bundesbank.

"There is reason to fear that we will see 3% as inflation rate for the harmonized consumer price index (HICP)," he said. "This is very high."

Asked whether this would justify a rate increase by the ECB, Weber said, "We assume that we will do what's necessary ... We have our own responsibility as a central bank which we have to fulfill."

He also called on all parties, such as employers and employees as well as politicians, to act responsibly on inflationary threats.

"It is important that all live up to their responsibility for price stability," Weber said. "That's how we can prevent a strong rise in inflation."

He said that the inflation risk is a result of record oil prices, the strong rise in food prices and also the increase in prices of goods.

"Prices are rising across the board," he said.

Linda Piazza : 10/22/2007 2:47:20 PM

The cup-and-handle theory for the SPX has been invalidated, but now bulls can hope that the latest pullback is just a bull flag pullback before another punch higher. The five-minute Keltner chart suggests otherwise as long as the SPX is forming five-minute closes beneath the 9-ema now at about 1503.20, but I expected this to be a choppy day and I'm not taking any evidence too seriously. I suggest that you don't, either, and just adhere to your stops in whatever kind of play you're in.

Jeff Bailey : 10/22/2007 2:41:05 PM

Terex Corp. (TEX) $79.72 -2.20% ... the TEX-WP are $4.20 x $4.50.

Jeff Bailey : 10/22/2007 2:40:17 PM

Murphy Oil (MUR) $74.92 -0.70% ... the MUR-MP are $7.40 x $7.70.

Jeff Bailey : 10/22/2007 2:39:24 PM

VIX.X 22.55 -1.78% ...

Keene Little : 10/22/2007 2:39:12 PM

Today's uptrend line for SPX is just under 1501 (hitting it now).

Jeff Bailey : 10/22/2007 2:39:11 PM

S&P Dep. Receipts (SPY) $149.98 +0.20% ... the SYH-KW are $1.87 x $1.88.

Jeff Bailey : 10/22/2007 2:38:21 PM

Altria (MO) $71.59 +1.54% ... the MO-LN are $3.05 x $3.15.

Jeff Bailey : 10/22/2007 2:37:37 PM

iShares Japan (EWJ) $13.95 +0.43% ... the EWJ-WO are $1.00 x $1.10.

Jeff Bailey : 10/22/2007 2:36:40 PM

PetroChina (PTR) $247.59 +6.27% ... the PTR-WL are $0.85 x $1.00.

Linda Piazza : 10/22/2007 2:35:58 PM

SPX coming down to test the 5-minute 45-ema now at 1502.59. Support now extendes down to 1501.11, but short-term bulls would like to see the 45-ema hold as support on 5-minute closes. For the OEX, the 5-minute 45-ema is at 701.20, with further support extending down to 700.81.

Jeff Bailey : 10/22/2007 2:35:19 PM

I should note that the "option quotes" shown in my MM Profiles are not always accurate. QCharts has what I consider to be terrible feeds for option bid/ask. I use a different service for accurate bid/ask quotes at time of any entry, or exit.

Jeff Bailey : 10/22/2007 2:32:20 PM

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

Reestablished "bearish" position in the TEX-WP at $4.10 when TEX was trading Benchmark of $80.50. I consider the purchase of the TEX Nov. $80 Put as being "bearish."

A recent survey run by Keene had some traders "confused" with my profiles, so I've been walking MM subscribers through some of my profiles of late.

Linda Piazza : 10/22/2007 2:33:05 PM

Don't assume that my 2:22:16 post is pushing for bullish entries if there should be a confirmation of a cup-and-handle formation on the five-minute chart. It's just noting what I see on the charts, but that's just a five-minute chart. My attitude today has been consistent: that the day could produce the volatile or choppy kind of day that we sometimes see after a big move. So far, all is going well for the bulls, and I congratulate those of you who are doing well, but just keep a handle on your stops.

Since we're making disclaimers, I'm in no short term plays. I've been clear for a while that I'm trading mostly condors, although I'm researching other income-producing trades and others that minimize risk (gamma/delta neutral ones, etc.) and although for November, I have only bear call credit spreads and no bull put ones. I personally feel that I have an easier time adjusting a going-wrong bear call spread than a going-wrong bull put one and I was worried about the potential for sudden downside. So, I haven't been making as much money as I'd like the last couple of months, but a profit is a profit. Today, I'm looking for opportunities to close out my bear call credit spreads, but I don't know that I want to give up $0.20 of my collected credit to close them. For the last two options cycles, I've been out of all credit spreads--bull put or bear call--at least a week ahead of opex, adhering to a former floor trader's advice to lower risk as soon as possible.

Keene Little : 10/22/2007 2:30:27 PM

If we're to get a 5th wave in the move up from the low around 11:00 AM, equality between the 1st and 5th waves would be at SPX 1511.38, just a little above the 1510-1511 Fib resistance area I cited earlier. I continue to like that area to set up a short play if it gets there and we're seeing some negative divergences. I want crisp setups on a day like today otherwise I'm content to watch it chop around without me.

Keene Little : 10/22/2007 2:23:18 PM

NDX is struggling with its broken uptrend line from Oct 11th, currently near 2157. It too looks like it could use at least a minor new high to finish today's bounce (if that's all it's going to be) before heading lower again. Link

Linda Piazza : 10/22/2007 2:22:16 PM

Hope for short-term SPX bulls? Is that a cup-and-handle formation on the five-minute chart, with the handle forming now? If so, you want to see confirmed five-minute closes above that 1508.32 (Keltner)-1510.50 (Fib) resistance zone to confirm it. You don't want to see a five-minute close below 1502.55 support, as that would tend to undo the handle. Remember how often the SPX used to set up bearish formations only to see them invalidated? The inverse can happen: bullish formation can set up in a bearish environment and then fizzle, so don't jump the gun with your assumptions.

Linda Piazza : 10/22/2007 2:14:10 PM

Immediately after my 1:52:17 post, warning bulls to be particularly attentive to follover potential, and while I was preparing my 1:54:42 one, the SPX and OEX did begin having a little difficulty with the resistance zones they were testing. These certainly don't constitute rollovers, but SPX bulls would certainly like to see 1502.30-ish (5-minute 45-ema and historical) support maintained on five-minute closes.

Keene Little : 10/22/2007 2:05:40 PM

The wave pattern for the move up from around 11:00 AM would look best with one more high to complete a 5-wave move. That would then be a potential completion of an a-b-c bounce off this morning's initial low and would be the time I'd consider a short play for at least another pullback.

Jeff Bailey : 10/22/2007 1:55:21 PM

The reason I (Jeff Bailey) make disclosures is so that you know I may have a "vested interest" in a particular profile.

I only have to disclose my holdings if the particular security/position in held PRIOR to one of my profiles.

At times, I will place a trade SIMILAR to my profile within seconds/minutes AFTER profile.

I do NOT trade against my profiled positions!!!! (take the other side of the trade)

Linda Piazza : 10/22/2007 1:54:42 PM

OEX 5-minute Keltner target and potential resistance at 704.07 has been approached, with further resistance of other types stretching up toward 704.70. Be careful for rollover potential in this zone, although I don't see anything showing up yet.

Linda Piazza : 10/22/2007 1:52:17 PM

SPX five-minute target and potential resistance has now lowered to 1508.76 on five-minute closes, with Keltner and other resistance stretching up toward 1510.50. Be particularly attentive to rollover potential at this level, although I don't see anything showing up yet.

Jeff Bailey : 10/22/2007 1:50:32 PM

Disclosure: I currently hold a BEARISH position in TEX.

Jeff Bailey : 10/22/2007 1:50:03 PM

VIX.X 21.98 -4.26% ...

Jeff Bailey : 10/22/2007 1:49:40 PM

Swing trade put option alert! ... let's buy one (1) of the the Terex Corp. TEX Nov. $80 Puts (TEX-WP) at the offer of $4.10.

No stop for now, but this time, let's target $77.00.

TEX $80.50 -1.25% ...

Jane Fox : 10/22/2007 1:42:20 PM

But surprisingly Gold is not having that bad a day. Link

Linda Piazza : 10/22/2007 1:41:51 PM

Remember if you're in a bullish play that a doji type day requires both a push lower and a push higher, both of which are reversed. I don't have a crystal ball and don't know what the day's candle will be when the day is finished, but we often see a doji-type day after a big-range day like Friday's. Bulls and bears are both in disarray after a day like that, and there's a lot they need to sort through. So, while I'm not promising that the day will end up with a doji or a small-bodied, long-legged candle, I'm cautioning that it's a possibility. Just protect your bullish profits if you decided on a bullish entry today.

If you were in a bearish play coming into the open today, that warning of 1490-1495 support allowed you to plan your exits and ratchet them down according to your trading style. If you've been in a long-term bearish plan since 10/11, your stops are probably very different from someone who entered at the open today and likely had long been stopped by now.

Jeff Bailey : 10/22/2007 1:37:43 PM

SPY Oct. OptionMontage (Closing OI) at this Link

Screen capture taken Friday afternoon after BIG spike higher in VIX.X at this Link

Keene Little : 10/22/2007 1:36:42 PM

A 38% retracement of Friday's drop in ES is at 1516.25 which is also near the top of a little parallel up-channel (bear flag?) for today's price action. That could be a good place to watch for a short entry. Next Fib resistance about that is 1522-1523 (50% retracement and another internal Fib projection for today's bounce).

Jane Fox : 10/22/2007 1:32:42 PM

US$ is having a really good day today so of course Gold is not. Link

Jane Fox : 10/22/2007 1:31:31 PM

LOS ANGELES (MarketWatch) -- Thousands of Southern California residents were being evacuated from their homes Monday, as wildfires burned across seven counties, stretching from the U.S.-Mexican border to Santa Barbara County. A state of emergency was declared Sunday night by California Gov. Arnold Schwarzenegger for the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura in the wake of more than 11 major blazes.

Firefighters were being hampered by "red-flag" conditions of high winds and low humidity, with more of the same expected for at least the next two days. Resources also are being strained with so many fires at once, reports said.

Linda Piazza : 10/22/2007 1:30:17 PM

USDJPY at 114.38. It finally broke out of its congestion band and is now challenging Friday's 114.50-ish support zone that was crashed through overnight. The five-minute Keltner chart suggests an upside target and probable resistance at 114.58, but the USDJPY is looking a little iffy here as it tries to maintain that target. It needs to maintain five-minute closes above the 9-ema at 114.34 to maintain the target.

Keene Little : 10/22/2007 1:25:55 PM

If SPX can get above this level I see next resistance for it around the 1510-1511 area (Fib projection for the 2nd leg up today equal to 162% of the first leg is at 1510.71 and 38% retracement of Friday's decline is 1510.56). I'll be considering a short play if that level is reached and the rally looks to be tiring (negative divergences are appearing).

Keene Little : 10/22/2007 1:23:02 PM

SPX is back up for a potential retest of its broken 100-dma at 1505.55.

Linda Piazza : 10/22/2007 1:22:40 PM

For OEX traders, the next target and potential resistance on the five-minute chart is 704.20 currently (120-ema). The five-minute 9-ema is at 701.55, and if you're in a bullish position, you'd like to see that hold as support on pullbacks, on 5-minute closes.

Linda Piazza : 10/22/2007 1:16:55 PM

While I was gone, the SPX broke back inside its channels, above the breakdown level I had listed earlier, and then confirmed that with a new high of the day. As I said earlier, I haven't recommended a bullish play, but if you're in one, you'd probably now like to see the earlier high of the day, at 1502.91, maintained on pullbacks. The 5-minute 9-ema has now risen to 1502.33, but the SPX hasn't really established a track record yet this morning of maintaining support on this moving average as yet, so it's not as much of a guidepost as it is at other times and might be later. So far, the SPX has been chopping back and forth.

Resistance if the SPX should rise? The 5-minute Keltners suggest that next resistance might lie near 1508-1509 and other evidence suggests that 1510.50 might be resistance, so I would watch as that zone was approached, if it is.

Jane Fox : 10/22/2007 1:15:21 PM

AD line is now above 0 but still only a paltry +163.

Keene Little : 10/22/2007 1:08:23 PM

The bounce now is clearly not a sideways triangle and is building some more strength. The sudden squirt higher makes it look like some short covering at least. There's lots of resistance above so take care if chasing this to the upside.

Jeff Bailey : 10/22/2007 1:04:16 PM

Altria (MO) $71.63 +1.60% ... overtakes PG $70.89 +0.12% as #7 most heavily weighted DIA/INDU/YM component.

MO-LN $3.10 x $3.25.

Jane Fox : 10/22/2007 1:01:03 PM

I bought the Diamonds last time for the ride up but this time I think I am going to pick the Qs. Link

Jeff Bailey : 10/22/2007 1:00:27 PM

I have now cancelled the order to buy one (1) of the YM at 13,510 as the YM moves BULLISHLY to a new intra-day high.

Jeff Bailey : 10/22/2007 12:58:42 PM

YM Long setup cancel order alert! ... with YM currently 13,591, please cancel order to buy at 13,510 (from 12:40:48).

Keene Little : 10/22/2007 12:58:25 PM

SPX is now hitting the bottom of its parallel down-channel so watch for resistance here. The DOW could push a little higher to its equivalent resistance level, closer to 13590.

Jane Fox : 10/22/2007 12:58:15 PM

Or how about Diamonds for Christmas Link

Jeff Bailey : 10/22/2007 12:56:20 PM

SPY $150.05 +0.25% (WKLY Pivot $151.90) ...

SYH-KW $1.99 x $2.01

VIX.X 22.55 -1.78% ... (WKLY Pivot 21.29).

Jane Fox : 10/22/2007 12:56:01 PM

The market may be giving you an early Christmas present. A SPX long here would be risky but you have a very clear place to put your stop. Link

Jane Fox : 10/22/2007 12:53:43 PM

USDJPY is also making new daily highs.

Jane Fox : 10/22/2007 12:53:25 PM

VIX is now making new daily lows but the AD line is still under 0 so it would be hard for me to suggest a long here UNLESS you watch it like a hawk and keep you stops tight.

Keene Little : 10/22/2007 12:51:05 PM

After tagging a downside Fib target at 77.21 (for equality between the 1st and 5th waves in the move down from August) the US dollar has bounced strongly today and is threatening to break its downtrend line from August. This could be the start of a much larger rally in the dollar. Link

Jeff Bailey : 10/22/2007 12:50:02 PM

YM 13,548 ... post setup low has been 13,518

Jeff Bailey : 10/22/2007 12:48:10 PM

Looking for a trade at 13,510 to trade BULLISH the YM. If filled, stop goes 13,487, target 13,670.

YM trades that I (Jeff Bailey) profile are DAY TRADES ONLY! One (1) contract ONLY, unless specified otherwise.

If filled at 13,510, trade setup is RISKING 23 points ($5 * 23= $115), to potentially make REWARD ($5 * 160 = $800).

Jeff Bailey : 10/22/2007 12:40:48 PM

YM Long setup alert! ... with YM currently 13,521.

Go long the YM on pullback to 13,510. Stop goes 13,487. Target 13,670.

Keene Little : 10/22/2007 12:34:51 PM

ES is forming a small sideways triangle so far today. This fits for a little 4th wave correction. It probably has another down-up sequence to finish it before heading lower again. A break above this morning's early high would negate the pattern and say something more bullish is going on. Link

Keene Little : 10/22/2007 12:26:41 PM

The short entry in oil (December contract) above $88 has worked well so far, down $3 from the entry price ($1500 per QM contract). QM can be a great vehicle to trade but with oil's recent volatility it can also bite you real bad if you're not careful. I'm watching the pattern in the pullback to try to get some clues as to whether it's just a corrective pullback or the start of a much bigger decline. It's starting to develop an impulsive look to it in which case I'll watch for a bounce (maybe later this week) as another opportunity to get short.

Looking down the road a bit, oil could drop another $3 before better support around its previous high near $82 and then its uptrend line from August (it might be near the same level if it takes a week to get down there). Here's an update to the daily chart of CL (light crude December contract). Link

If you shorted oil with me last Thursday, I've lowered my stop to $87, locking in $1.40. This is near its last bounce high and above the downtrend line from last week's high.

Linda Piazza : 10/22/2007 12:25:16 PM

Here's what I'm noticing on the SPX's five-minute chart: Although the SPX climbed higher this morning, for a while sustaining values above the 5-minute 9-ema, it has not been able to erase its breakdown status. That would be done by a 5-minute close above the channel line now at 1498.30, but it would be shoved a little higher if the SPX should climb and will drop a little lower if the SPX drops.

In addition, the SPX is still on breakdown status on the 10- and 15-minute charts, with the 15-minute resistance now at 1505.18 on 15-minute closes. So what does all this mean? Not a lot right now, except that bullishness has not been confirmed yet. The SPX is still chopping around, perhaps setting up a triangle formation as bulls and bears fight it out here. Bulls, you need to be careful about your bullish assumptions if the SPX should break to the upside out of this triangle. What it might be doing at that point is widening it in to a rising price channel, a possible bear flag. If that happens and you're long, just keep following just under the rising trendline with your stops, just in case, if you're in a scalping type trade or maybe just below the day's low or the last little swing low if you intended a longer-term play and entered near the bottom. I'm not advocating long positions, just mentioning possibilities for those who have opted to take them.

Linda Piazza : 10/22/2007 12:13:42 PM

I mentioned the doji for the day so far, but that was on the SPX. The RUT, of course, looks much stronger right now, although it, too, has an upper shadow. The RUT's formation on an intraday chart looks as if it could be attempting to form a triangle that, while not quite a bullish right triangle, looks more bullish than bearish. The RUT has to get back above the high of the day before it drops back below the last little swing low at 793.13, I would think, to continue that triangle's more-bullish-than-bearish aspect. RUT at 799.23 as I type. I am just looking at it as an indicator, not thinking of trading it.

Jeff Bailey : 10/22/2007 12:08:01 PM

ALIBABA.COM UPS HONG KONG IPO RANGE

DJ- Alibaba.com is seeking to raise up to $1.49 billion in an initial public offering ahead of a Hong Kong listing after raising the price range to HK$12 to HK$13.50 a share, people familiar with the situation say.

Linda Piazza : 10/22/2007 12:06:37 PM

With the USDJPY flattening in that 114.00-114.30-ish congestion zone, I don't see great upside momentum being displayed after the early morning oversold bounce, for whatever such confirmation is worth these days.

Linda Piazza : 10/22/2007 12:04:40 PM

I'm back. So far, we've got the expected doji-type day, but the day is far from over, of course. The action doesn't surprise me so far, but what happens next is up for grabs in my opinion. I happen to agree with Bob P. just now on CNBC: Why be a hero here? Why not just sit back and watch?

Jeff Bailey : 10/22/2007 11:55:33 AM

iShares Japan (EWJ) $13.96 +0.50% ... Low/High has been $13.88/$14.03.

Jeff Bailey : 10/22/2007 11:54:15 AM

Forex Currencies (Live!) Link

USD/JPY 114.00 at the bid.

Jeff Bailey : 10/22/2007 11:52:35 AM

US Dollar Index (DXY) 78.13 +0.93% ... sticks its head above WEEKLY R1 (78.05).

Jeff Bailey : 10/22/2007 11:46:08 AM

EU EXTENDS GOOGLE, DOUBLECLICK PROBE

DJ- European Commission extends its antitrust review of Google's proposed takeover of internet advertising broker DoubleClick to Nov. 13, to examine proposals suggested by Google to overcome competition issues.

GOOG $648.70 +0.61% ...

Jeff Bailey : 10/22/2007 11:43:05 AM

SURVEY SHOWS US HOUSING SLUMP DEEPENING

DJ- U.S. companies are increasingly worried about the economy amid signs that the housing recession is deepening, according to a survey released by the National Association for Business Economics.

Jeff Bailey : 10/22/2007 11:42:09 AM

GM LEADS TOYOTA IN 3Q SALES

DJ- Toyota Motor says it sold 2.34 million vehicles globally in the July-September quarter, fewer than General Motors' tally, as its U.S. rival regains the lead in the race to be the world's top automaker.

TM $105.78 -0.58% ...

GM $37.37 -0.58% ...

Jeff Bailey : 10/22/2007 11:39:24 AM

CHICAGO FED INDEX NEGATIVE AGAIN

DJ- U.S. economic growth is below average for the second month in a row in September, keeping inflationary pressures in check. Chicago Fed National Activity Index stands at -0.45 in September, better than August's -0.68 reading.

Jeff Bailey : 10/22/2007 11:37:20 AM

KIMBERLY-CLARK 3Q NET CLIMBS 24% ON FEWER CHARGES

DJ- Packaged goods company 3Q net income rises to $453.1 million, or $1.04 a share, while revenue rises 9.7% to $4.62 billion on growing sales volumes and higher prices. Company expects 4Q per-share earnings of $1.09 to $1.11.

KMB $70.21 +4.57% ...

Jeff Bailey : 10/22/2007 11:35:59 AM

HASBRO NET JUMPS 62%, SALES UP 18%

DJ- Toy giant posts 3Q net of $162 million, or 95c a share, boosted by a tax gain. Sales climb 18% to $1.22 billion helped by toys based on the 'Spider-Man 3' and 'Transformers' movies.

HAS $28.22 -0.66% ...

Jeff Bailey : 10/22/2007 11:34:51 AM

HELLMAN & FRIEDMAN PAYS $2.65B FOR GOODMAN GLOBAL

DJ- Maker of heating and air-conditioning products agrees to be acquired by private equity firm Hellman & Friedman for $25.60 a share in cash. Deal values Goodman at about $2.65 billion. Per-share price represents a 17% premium over Goodman's Friday closing price.

GGL $24.49 +12.08% ...

Keene Little : 10/22/2007 11:34:12 AM

In the bearish wave count I've been mentioning that we'll see a stair-stepping lower to "unwind" the count. After a series of 1st and 2nd waves to the downside and then the strong 3rd wave down on Friday, it appears so far that we are in the first 4th wave correction. On the SPX chart for example I've been showing the stair-stepping lower to finish the sets of 4th and 5th waves to complete the count. So far, based on what I'm seeing this morning, that's the way I'm leaning. The hard part for traders, if this is what we have facing us for the next few days, is that 4th waves make for some of the toughest times to trade. Link

Jeff Bailey : 10/22/2007 11:33:11 AM

Pharmaceutical Index (DRG.X) 339.60 -1.19% ...

Jeff Bailey : 10/22/2007 11:33:07 AM

SCHERING-PLOUGH OFF AS SALES GROWTH SLOWS

DJ- Schering-Plough shares drop 13% after company's earnings miss estimates and sales growth of cholesterol joint venture with Merck slows. Merck's profit soars 62% on higher sales of vaccines and a lower reserve for product-liability litigation.

SGP $28.25 -13.63% ...

MRK $53.40 +0.54% ...

Jeff Bailey : 10/22/2007 11:31:14 AM

MICROSOFT CONCEDES IN ANTITRUST CASE WITH EU

DJ- Microsoft throws in the towel on its 9-year antitrust fight with European Union regulators, saying it won't appeal a crushing court judgment handed down last month that could lead to more cases against other big global technology firms.

MSFT $30.50 +1.09% ...

Jane Fox : 10/22/2007 11:31:08 AM

I truly think I have little gremlins that come in and make changes to my posts.

Jane Fox : 10/22/2007 11:29:41 AM

This just in from Herb Greenberg of Marketwatch.com fame. "This is remarkable. They've just evacuated a major part of San Diego: Everywhere East of the I-5, North of the 56 and South of Lake Hodges. If you know San Diego, this is, well, half the area. My area, Carmel Valley, is included. This is JUST east of Del Mar. Total track home city, but also includes Rancho Santa Fe."

Jane Fox : 10/22/2007 11:30:41 AM

I sometimes wonder why it is so hard for me to put the word NOT into my posts.

Jane Fox : 10/22/2007 11:26:46 AM

Market tried to rally but was just not able to keep its feet under itself and has retraced almost 68.20%. The AD line has been telling you this was a possibility today.

Jeff Bailey : 10/22/2007 11:10:37 AM

US To Sell $20B 2-Yr Notes Wednesday, $13B 5-Yr Notes Thursday

DJ- The U.S. Treasury Department plans to raise a combined $13.97 billion in fresh cash this week with the sale of $20.00 billion of two-year notes and $13.00 billion of five-year notes.

The balance of the proceeds will be used to redeem $19.03 billion in maturing notes.

The two-year notes, to be sold Wednesday, Oct. 24, will be dated Oct. 31 and will mature Oct. 31, 2009. The five-year notes, to be sold Thursday, Oct. 25, will be dated Oct. 31 and will mature Oct. 31, 2012.

The auction amount for the two-year is up from $18.00 billion last month, while the five-year amount is the same as a month ago.

The Federal Reserve holds $7.53 billion of the maturing securities for its own account.

Noncompetitive tenders for the two-year notes, available in minimum denominations of $1,000, must be received by noon EDT (1600 GMT) Wednesday. Competitive tenders for the two-year notes, available in minimum denominations of $1,000, must be received by 1 p.m. EDT (1700 GMT) Wednesday.

Noncompetitive tenders for the five-year notes, available in minimum denominations of $1,000, must be received by noon EDT (1600 GMT) Thursday. Competitive tenders for the five-year notes, available in minimum denominations of $1,000, must be received by 1 p.m. EDT (1700 GMT) Thursday.

The CUSIP number for the two-year notes is 912828HF0.

The CUSIP number for the five-year notes is 912828HG8.

Jeff Bailey : 10/22/2007 11:07:00 AM

Amerco (UHAL) $60.76 +1.13% ... low/high has been $59.23/$61.25.

Jeff Bailey : 10/22/2007 11:05:43 AM

TEX ... Low/High has been $77.78/$80.68

TEX-WP's have been $5.60/$4.10.

Might take another put if we see $80.00 again this afternoon.

Jeff Bailey : 10/22/2007 11:03:37 AM

Terex (TEX) $77.89 -4.45% ... after opening kiss of its rising 200-day SMA ($76.68).

TEX-WP $5.20 x $5.40.

Jeff Bailey : 10/22/2007 11:02:23 AM

Caterpillar (CAT) $73.01 -0.76% ... right at its trending higher 200-day SMA.

Jane Fox : 10/22/2007 10:54:00 AM

Here is how the markets are trading in relation to their previous day ranges. Link

Jeff Bailey : 10/22/2007 10:49:09 AM

Selling long rest of partial NVR position in personal account here at $477.50 at top of downward regression ($478). (see Friday's MM 12:59:19)

Jeff Bailey : 10/22/2007 10:45:53 AM

NVR Corp. (AMEX:NVR) $479.21 +11.50% ... leads charge.

Jeff Bailey : 10/22/2007 10:44:52 AM

Dow Jones Home Construction (DJUSHB) 351.27 +3.65% ... sector winner early.

Keene Little : 10/22/2007 10:44:15 AM

NDX continues to look the most bullish (and the RUT) but so far it's just a 3-wave bounce for SPX and DOW and I'm getting the feeling we're going to see just a consolidation today. If that's what we get it will be bearish as it will point to the greater likelihood that we're in the bearish wave pattern. For the short term be careful about potential choppy price action.

Jeff Bailey : 10/22/2007 10:43:07 AM

US Oil Fund (USO) $66.34 -1.19% ...

Jeff Bailey : 10/22/2007 10:42:44 AM

Murphy Oil (MUR) $75.00 -0.59% ...

Jeff Bailey : 10/22/2007 10:42:21 AM

PetroChina (PTR) $244.00 +4.73% ...

Jeff Bailey : 10/22/2007 10:41:04 AM

Iraq President: Says Turkish Kurd Rebel Group To Call Ceasefire - TV

DJ- Iraqi President Jalal Talabani said that Kurdish rebel groups operating in the north of the country have agreed to call a unilateral ceasefire as of Monday evening, Turkey's NTV-MSNBC news reports Monday on its Web site.

"Talabani said that the PKK will announce a unilateral ceasefire as of this evening," NTV reported, citing remarks made by Talabani to Kurdish journalists.

Talabani traveled to northern Iraq over the weekend to meet with leaders of the Kurdish Workers Party, or PKK, officials.

Jeff Bailey : 10/22/2007 10:38:54 AM

US Treasury's Paulson:

DJ- U.S. Treasury Secretary Henry Paulson said Monday that international institutions must work together to develop policies to help avoid another global credit crunch.

In a speech to the plenary session of the annual International Monetary Fund and World Bank meetings, Paulson said the Financial Stability Forum, the Basel Committee on Banking Supervision and the International Organization of Securities Commissions should complement domestic regulatory agencies to "prevent a repeat of recent excesses."

"We need to continue to be vigilant, because all of our capital markets are not yet functioning normally," he said in the text of prepared remarks. He added, however, that the financial turbulence sparked by the recent meltdown in U.S. subprime markets comes amid "continued strong global economic conditions."

Meanwhile, Paulson welcomed the recent update of the IMF's currency surveillance policy, which was aimed at making it easier to identify countries that manipulate their currencies. However, he reiterated that the fund must implement it rigorously.

"Without meaningful exchange rate surveillance, governance and management reform will ring hollow," he said.

The currency surveillance program is seen as a potential tool to put added pressure on China to loosen its currency policy. On Friday, the Group of Seven leading industrial nations stepped up its call for China to do so, stressing that China should "allow an accelerated appreciation of its effective exchange rate."

Paulson also called for fundamental changes in the IMF's governing structure to give more power to emerging-market economies, while reiterating that the fund needs to cut costs.

He said the World Bank must continue to focus on fighting corruption and should play a greater role in dealing with energy access and climate change in the developing world.

Jeff Bailey : 10/22/2007 10:29:08 AM

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

EWJ-WO ... have established a stop at $14.05 (close trade if EWJ trades $14.05)

CLOSED the TEX-WP at bid of $5.20 after TEX exceeded target of $78.00 at the open.

Linda Piazza : 10/22/2007 10:25:41 AM

I am going to have to be away for a time this morning.

Linda Piazza : 10/22/2007 10:24:53 AM

Of course, the SPX's five-minute 9-ema no longer provided resistance on five-minute closes, so there's a change in the short-term downtrend, at least. A period of disorganization could result while bulls and bears stumble around a bit, deciding which is going to take the lead now. It's a time to be particularly careful with your trades because either could take over.

Keene Little : 10/22/2007 10:18:03 AM

I had pointed out on the SPX 60-min chart in the weekend Wrap that when price drops out the bottom of a parallel down-channel and then bounces back up it will often find resistance at the bottom of the channel (opposite for a rally above the top of a channel and then pullback). The bottom of the channel for SPX is currently just below 1506, about 3 points higher right now.

Jeff Bailey : 10/22/2007 10:14:52 AM

Swing trade put establish stop alert! for the three (3) iShares Japan EWJ Nov $15 Puts (EWJ-WO) at $14.05 in the underlying.

EWJ $14.00 +0.79% ...

EWJ-WO +0.95 x $1.05.

Jane Fox : 10/22/2007 10:11:26 AM

Did you see the MACD divergence building on the Gold chart? This is telling me this retracement will be deeper than 23.80%

Linda Piazza : 10/22/2007 10:08:29 AM

The SPX's five-minute 9-ema still holds as resistance on five-minute closes. This isn't some magic number or interval. It's just a moving average that often holds are resistance on five-minute closes when the SPX is trending sharply, so we can use it as a guage for short-term sentiment. The 10-minute or 15-minute one work better when the trend isn't so strong.

For now, however, there has not been a lower low, so be suspect of the early trend continuing until that happens. Remember that the most likely outcome (unless there's going to be a real rout) after a day like Friday is either a long-legged doji-type day (volatile) or a choppy day.

Jane Fox : 10/22/2007 10:08:02 AM

It looks like Gold is going to give us another opportunity to get long however a 23.80% retracement is not much and it may need to fall further. I am still quite bearish the US$ so I think Gold still has a ways to go. Link

Linda Piazza : 10/22/2007 10:02:30 AM

So far, although it was pierced during a five-minute period, the SPX's five-minute 9-ema has held as resistance on five-minute closes, but it's being pierced again now. It's jsut over 1498. The OEX's is 699.12.

Keene Little : 10/22/2007 9:57:48 AM

The 30-min candle on SPX is a very bullish looking hammer and will close its gap at 1500.94, about a point higher. Follow through will be the key here but a pullback from gap closure would be typical.

Keene Little : 10/22/2007 9:56:11 AM

ES just closed its gap and YM is about 25 points behind.

Jane Fox : 10/22/2007 9:54:40 AM

VIX is falling, AD volume is climbing and so is the ratio but beware AD line is still well under 0 and that means the bears have control and could turn this around at any time.

Linda Piazza : 10/22/2007 9:48:49 AM

I'm again watching the five-minute 9-ema for the SPX and OEX for potential resistance. It's at 1498.06 and 699.26, respectively.

Keene Little : 10/22/2007 9:46:53 AM

The dipsters are alive and well and already closed this morning's gap in NQ. Watch for resistance if YM and ES manage to close their gaps. If they too can rally above their gaps then we'll know we're getting some follow through.

Linda Piazza : 10/22/2007 9:45:40 AM

Sorry for my absence for a few minutes, but we're having a storm with gusts of wind so strong that it's causing some difficulties. I may be absent from time to time today. The SPX is currently testing the top of that 1490-1495 zone that I thought might provide some potential support, at least on first touch this morning and in fact has bounced more than a point while I typed these few words. If you're in a bearish position, just keep following lower at an account-appropriate stop, or, if you're particularly conservative, taking automatic profit when a profit stop is hit. I haven't had time since I got back inside to check all the internals, but I don't feel that this is a good climate for long plays other than for experienced scalpers.

Jeff Bailey : 10/22/2007 9:41:51 AM

Swing trade put target alert! ... for the one (1) Terex Corp. TEX Nov. $80 Put (TEX-WP) at the bid of $5.20.

When TEX traded target of $78.00 -4.31% ...

Jane Fox : 10/22/2007 9:39:53 AM

I have no VIX this morning. It feels like been on a sailboat in the San Juan Islands without a GPS.

Keene Little : 10/22/2007 9:39:08 AM

Here comes the first jam job. Let's see if it sticks (any follow through) or if the bears just jump back on it.

Jane Fox : 10/22/2007 9:34:58 AM

AD line is a bearish -1404 and falling so I would be not be considering the long side just yet.

Keene Little : 10/22/2007 9:27:38 AM

The US dollar had quite a rally last night, up almost 70 cents from low to high. It made it up to its downtrend line from August and has pulled back from there but I'm thinking this time it's going to do it and bust a move higher. This is of course helping my oil and gold short. It will soon be time to start lowering the stop on both of those but I first want to see how today progresses (for equities as well).

Jane Fox : 10/22/2007 9:21:10 AM

If you were just monitoring the NDX charts you would be wondering what all the hoopla was about - this chart remains quite bullish. Link

Linda Piazza : 10/22/2007 9:20:29 AM

U.S. equities futures have also moved off their overnight lows. I've been looking at the cash SPX chart, trying to figure out where support might lie. My intraday Keltner charts aren't going to provide any potential targets and/or support since the SPX is in breakdown mode across all the charts available to me on my particular charting service. Combining the daily Keltner chart with historical S/R from the late-July to mid-September period, it looks as if the 1490-1495 zone contains many potential S/R points. If futures are still lower at the time of the cash open, and if cash markets head down in the directions of futures, never a given, then bearish traders should be careful of bounce potential from anywhere in that zone. If you held bearish positions over the weekend, be sure to keep lowering your stops accordingly.

I haven't seen signs to convince me yet that bullish plays are appropriate for anyone other than those aggressive traders who like to trade short-term (or perhaps intermediate-term) countertrend plays. I don't think we know what's going to happen yet on the longer-term yet. With daily RSI now at 25.24 on my charts with my settings, with six days out of the last eight producing a lower close than the previous day, and after a strong red candle on Friday, we could see a strong countertrend bounce begin any time--the reason behind my urging bears to protect profits at certain points, of course, even if there's a strong downdraft first. However, we know that the day after such a big-range day more often results in either a long-legged doji produced amid volatile trading conditions or a smaller doji produced amid choppy trading conditions. Both can be tough on trading accounts, so choose carefully whether you want to trade today or sit by and watch.

Jane Fox : 10/22/2007 9:19:58 AM

The DOW has now retraced 50% of the rally from its August lows but has closed below the 50EMA, which is not bullish by any means but I still think the bulls have it in them. However, I have learned that the market does what it wants and that I need to put aside any preconceived notions and just follow the charts so I will follow the charts and take action as needed. Link

Jane Fox : 10/22/2007 9:15:04 AM

I have been talking about how I believe the markets needed to take a breather and retrace some of the rally from the August lows. I certainly was hoping though we wouldn't see that decline happen in just a week and was certainly hoping we would not see most of that decline in one day but the market rarely does what I "think" it should do.

I thought the 1500 area would hold up and a close below would be quite bearish, which did indeed happen on Friday. Lately it has been up to the bears to prove themselves but now it is up to the bulls to tell us they have what it takes to bring us back from the brink. Link

Linda Piazza : 10/22/2007 9:06:50 AM

As CNBC is noting now, the USDJPY has been bouncing since my last post, and is now at 114.04. That's still down considerably from last week's high, with about 114.05-114.30 comprising a congestion zone during the overnight period.

Jane Fox : 10/22/2007 9:05:53 AM

Crude is falling and the US$/Gold relationship rights itself, US$ going one way and Gold the other. Overnight it was the US$ up and Gold down. Although the falling price of Crude does take a part in gold's decline as well when Crude is falling or stable it takes less of a role letting the US$ dominate. Link

Jane Fox : 10/22/2007 8:54:57 AM

Marketwatch.com's headline this morning was "Earning angst dominates, A weaker start looms on fears for the economy." Not too bad but then the WSJ had an article as well that read, "Stock futures tumbled Monday amid continuing worries about the slowing economy and its effect on corporate profits."

Needless to say I was a tad worried when I opened my charts this morning. I am not saying these are bullish but they certainly aren't, "the world is coming to an end." Link

Jane Fox : 10/22/2007 8:49:42 AM

NEW YORK (MarketWatch) -- Bear Stearns Cos. and China's Citic on Monday unveiled a strategic alliance under which each will take a stake in the other, giving the New York firm a foothold in the lucrative Chinese investment banking market and providing the Chinese bank with access to Wall Street's financial expertise.

Jane Fox : 10/22/2007 8:48:51 AM

WASHINGTON (MarketWatch) -- The markets from some complex derivatives remain broken and may recover only gradually, said Randall Kroszner, a governor of Federal Reserve Board on Monday.

"I would suggest that....the recovery may be a relatively gradual process and these markets may not look the same when they re-emerge," Kroszner said in a speech to the Institute of International Bankers.

Trading in some derivatives, such as collateralized loan obligations (CLO) and collateralized debt obligations (CDO) has ground to a virtual halt since August.

Some of these structured credit products packaged pools of subprime mortgages loans. As problems in the subprime mortgage market became more apparent over the summer, investors shunned these products and also became unwilling to purchase products that could have any exposure to housing-related assets and other structured products more generally.

Linda Piazza : 10/22/2007 7:09:35 AM

As you've probably heard if you're reading this, it wasn't a good night for the globe's bourses. Perhaps just as significantly because of its many implications, it hasn't been a good night for the U.S. dollar, or, conversely, for those who depend on the yen's weakness against the U.S. dollar and euro. The yen strengthened against both those currencies last night.

As I type, the USDJPY is now at 113.64, having dropped all the way from last Monday's test of the 117.81-ish resistance that I had been mentioning for a while. Generally over the last few years, a trending lower USDJPY has not been good for equities as it brings up the specter of unwinding yen carry trades among other pressures. There's been some speculation that yen carry trades had mostly been unwound, and I guess we'll see, but commentators on CNBC Europe began mentioning it again with some frequency last week.

If those carry trades had already been unwound before the current weakness set it (Friday didn't support this idea), the weakness in the USDJPY and EURJPY (euro/yen) may not be as dire as they were back in February, for example, but I just don't know whether they have or not. For now, those hoping that, even if the weakness seen now in futures carries through into the cash open, there's soon a quick and hard bounce want to see a bounce in the USDJPY, too.

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