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Keene Little : 10/30/2007 12:30:45 AM

I meant to post a short play setup on gold before the end of the day on Monday and completely forgot and I apologize for not calling out the setup. If you've been following my chart on gold and watched for the same thing I'm hoping some of you saw it. Last night I showed the all-hours 60-min chart with the steepening uptrend lines as the rally from last week went parabolic. Once it starts breaking uptrend lines you want to watch for a retest and short it there: Link

As you can see, gold has now broken the 3rd uptrend line. After breaking each of the 1st two trend lines it bounced back up for a retest. Monday's retest happened to be a "huggy" where it slides up underneath before letting go. Also notice the breakdown in RSI just before price broke its steepest uptrend line. This was the heads up that the momentum was failing.

If you'd like to try for a short entry with a tight stop, gold could bounce back up to its most recent broken uptrend line where it intersects its new downtrend line at 793.80. Your stop would go just above the last high at 795.40. I'd recommend an order to enter a short at 793.50 with a stop at 796.00. Remember in after hours to use conditional orders (establish a price level to have the order submitted as a limit order).

I don't know if gold will bounce back up to the uptrend line and it's always riskier playing after hours but this is how I'd play this one and then we'll pick it back up in the morning.

Keene Little : 10/29/2007 11:41:52 PM

Tuesday's pivot tables: Link and Link

The DOW and SPX continue to look very similar (and to a large extent the RUT as well). This SPX 30-min chart shows the two possibilities as I currently see them--either a quick pullback on Tuesday that leads to another move higher into Wednesday or else a deeper selloff and then a corrective bounce into Wednesday: Link

NDX is getting very interesting here. The weekly chart shows how price is pressed up into the top of its two parallel up-channels, one from the 2002 low and the other from July 2006, with the tops of both intersecting near the Fib projection for two equal legs up from October 2002 at 2211: Link

The daily chart shows a closer view of the tops of those two channels and how price is getting pinched into a corner between those and the uptrend line from August: Link . The bearish divergences at the October highs do not bode well for the bulls here as price presses into resistance.

It's been a very choppy pattern since the October 11 high so the wave pattern is subject to some interpretation but my best guess is that it needs a down-up sequence to finish it (depicted in green): Link . The short term trend line along the highs coincides with a top near the 2211 Fib target on Wednesday. Assuming it plays out this way it could set up a beautiful shorting opportunity and it may coincide with the FOMC announcement (sell the news).

OI Technical Staff : 10/29/2007 9:59:59 PM

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Jeff Bailey : 10/29/2007 6:25:48 PM

NYSE and NASDAQ Comp. Internals Table found at this Link

Jeff Bailey : 10/29/2007 5:58:03 PM

Global Equity Indexes and Currencies Table at this Link

Jeff Bailey : 10/29/2007 5:08:38 PM

Closing U.S. Market Watch found at this Link

Keene Little : 10/29/2007 4:59:26 PM

The ISEE call/put ratio was high all day today--above 200. When we've seen this before (excessive call buying) it has lead to sharp declines within days of the reading. Could too many be lining up on the bullish side of the boat again as we head into FOMC? My recommendation is to not be one of them.

Jane Fox : 10/29/2007 4:17:22 PM

Economc reports tomorrow include:

10:00a.m. Oct Conference Board Consumer Confidence. Expected: 99.4. Previous: 99.8.

Keene Little : 10/29/2007 4:03:39 PM

I've added to the SPX 30-min chart what it might look like for a quick pullback tomorrow and then a continuation of the rally into FOMC (in green). Or a pullback and then bounce into FOMC (dark red). The idea that I'm coming away with here is that the market is setting itself up for a sell-the-news event come Wednesday. Link

Jane Fox : 10/29/2007 4:02:55 PM

WASHINGTON (MarketWatch) -- The U.S. government expects to borrow a lower-than-expected total of $201 billion in net marketable debt over the first and second fiscal quarters, the Treasury Department said Monday, predicting "moderate" growth in the economy tempered by the housing downturn and credit-market disruptions

Linda Piazza : 10/29/2007 3:59:56 PM

The SPX may settle with a small-bodied candle for the day, a candle with a small upper shadow. Such candles can be potential reversal signals, but they can also just indicate indecision, which would be natural ahead of the FOMC decision Wenesday and the beginning of the two-day meeting tomorrow. Unfortunately, we just can't tell much but will need to see tomorrow's trading pattern to confirm. Whatever decision you make about holding overnight, know that there aren't any strong presentiments, so make the one that's best for you and your trading pattern and trading account.

Keene Little : 10/29/2007 3:53:30 PM

DOW 13844 (SPX ) is a key short term level for now--break below that and it could be all over. The more critical level is a lot lower at 13696. But so far I'm beginning to think the market could play out like this over the next two days (down and then bounce up into FOMC): Link

The market is still in an uptrend so respect that if trying any short plays (keep stops relatively tight just above previous highs). It might be a tad early to try a short but I think it's a good time to pull stops up tight on long plays.

Keene Little : 10/29/2007 3:44:35 PM

I'm getting a pretty bearish feeling about this wave pattern. That's a technical term by the way. It's just possible we could be peaking here and now ahead of the FOMC. Maybe a pullback tomorrow and then brief run back up into FOMC for a lower high and then tank. Just a guess but it's starting to shape up that way. That's not tradeable yet but protect longs is my best advice right now.

Jane Fox : 10/29/2007 3:43:39 PM

If you ignore the two blips on the VIX chart you will see how the VIX has been "hovering." Unfortunately I have been stating the VIX has been hovering at daily highs and thinking bearish but this chart shows me it is not hovering at daily highs or lows. Link

Jeff Bailey : 10/29/2007 3:40:36 PM

Wilshire 5000 (DWC) 15,594 +0.49% ... threatens to close back above its 19.1% retracement (15,525) (from 08/17/07 inflection low to recent 10/11/07 inflection high).

Jane Fox : 10/29/2007 3:45:21 PM

Crude has hit a high of 93.78 today. Amazing!!!! Link

Jeff Bailey : 10/29/2007 3:38:04 PM

Dow Transports (TRAN) 4,849 -0.37% ...

Linda Piazza : 10/29/2007 3:37:51 PM

I'm watching the advdec line (the subtraction version that my charting program provides, which is not my favorite). It shows the advdec line in a tight range most of the afternoon, a range that's now bounded by Keltner lines from 175 at the bottom and about 610 at the top. Despite the SPX push higher again, the advdec line hasn't broken out of that tight range on my chart. I'm seeing a lot of "nonconfirmations" of the SPX's push, if that's a word, but, once again, it doesn't matter so far. That's what makes days like today and last Thursday and Friday so difficult.

Linda Piazza : 10/29/2007 3:34:29 PM

The TRAN isn't participating in this move, either, but it's not making any difference, is it?

Keene Little : 10/29/2007 3:29:45 PM

The DOW is working its way up into the potential resistance area of 13900. I don't like the risk right now of holding a play overnight but I'd be tempted to short this DOW rally because of the possibility that it's finishing its bounce off Friday's low which could mean it's finishing its bounce off last Monday's low (10/22).

Jeff Bailey : 10/29/2007 3:14:00 PM

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

Keene Little : 10/29/2007 3:14:02 PM

Looking at the DOW's choppy rise today is now giving me the impression it could be an ending pattern for the leg up from Friday's low. Now a drop below its 13844 low near 2:30 PM would be bearish. In the meantime I'm watching to see where this gets pushed. The DOW is not being followed here by SPX or NDX (yet).

Jeff Bailey : 10/29/2007 3:03:13 PM

10-year Treasury Yield ($TNX.X) off 0.6 bp at 4.383%. Juuuuuust above WEEKLY Pivot.

Jeff Bailey : 10/29/2007 3:01:59 PM

Coca-Cola Prices $1.75B 10-year; Yld 5.369%; Tsys +1.00 ... Terms at this Link

Jane Fox : 10/29/2007 2:58:09 PM

Overshadowing everything is the VIX bearishly hovering at daily highs. Then we have the USDJPY and DAX moving in opposite directions basically negating one another. So this leaves us with the AD volume. As you can see the absolute AD volume is bullish but the ratio is not and all we have is a very unclear picture and the best trade right now is no trade. Link

Linda Piazza : 10/29/2007 2:53:36 PM

Miserable to trade, isn't it? One difference I note when comparing today's action and Friday's is this: The TRAN was participating in Friday afternoon's push higher, beginning to climb at about 12:00-12:15 and then accelerating its push at about 2:00. That's not happening today. The TRAN began trying to bounce, but for the last hour, it's been dropping instead. On that measure, at least, today looks different than Friday.

Linda Piazza : 10/29/2007 2:49:58 PM

Here's a comment from a subscriber that relates to last week's discussion on whether to let credit spreads that had narrowed to $0.10-0.15 run or whether to close them out and give up part of your profit, locking in the rest: Although this strategy (closing early for small debit) is certainly not for everyone, I think that everyone should ask themselves this question. How many months of gaining the extra .10 - .20 per contract get wiped out with only 1 time of getting spanked bigtime late in the cycle? Anyone that has not considered this, obviously has not suffered a sizable loss from a spread going against them. I am in the camp of limiting risk and living to trade another day/month/year. Thanks for the input, P.B.

Jeff Bailey : 10/29/2007 2:43:28 PM

YG07Z $793.50 +0.73% ...

Jeff Bailey : 10/29/2007 2:41:35 PM

GLD $78.14 +0.57% ...

GG $34.27 +2.57% ...

Keene Little : 10/29/2007 2:35:04 PM

If today's price action is going to give us an a-b-c pullback (with the c-wave down perhaps starting from the last high) then two equal legs down from this morning's high is at SPX 1535. Watch for support if it gets there.

Jeff Bailey : 10/29/2007 2:34:01 PM

UBS AG (UBS) $53.40 -0.79% ... Affirmed it expects a third-quarter loss of 600 million Swiss francs ($515 million) to 800 million francs, but warned it could take further charges in the fourth quarter from its exposure to U.S. housing and mortgage markets. The Swiss banking group, which will report third-quarter earnings on Tuesday, said the fourth quarter has started with good results from all units, but further deterioration in U.S. housing markets or rating downgrades for mortgage-related securities could lead to further write-downs.

Jeff Bailey : 10/29/2007 2:31:30 PM

Goldcorp (GG) $34.27 +2.57% ... probes morning high ($34.31)

Jeff Bailey : 10/29/2007 2:28:53 PM

Altria (MO) $73.01 +0.05% ... see my 01:25:30 for MO's P/E Ratio and Sales/Share.

Jeff Bailey : 10/29/2007 2:26:51 PM

According to QCharts, LTR had $34.289 Sales/Share. P/E Ratio 11.6.

Linda Piazza : 10/29/2007 2:25:40 PM

I see something else hasn't changed from Friday: the impossibility of trusting potential upside or downside targets. The SPX's Keltner chart is now set up so that resistance is beginning to look stronger than support, but the SPX still maintains support at its 15-minute 9-ema on closes, with that at about 1540.40, and first support below that, should that support fail, is at 1538.07.

Jeff Bailey : 10/29/2007 2:25:39 PM

Loews Corp.'s (LTR) $49.07 -1.93% ... Said Q3 net income fell to 77 cents a share from 94 cents a share in the year-earlier period. Revenue rose 5.2% to $4.7 billion.

Jeff Bailey : 10/29/2007 2:23:47 PM

Kellogg Co.'s (K) $52.52 -3.52% ... Said Q3 profit rose 9% from a year ago, with sales of crackers, toaster pastries and cookies helping to offset flat growth in the company's cereal business and higher advertising costs, financial results showed Monday.

Jeff Bailey : 10/29/2007 2:22:07 PM

Brookfield Homes Corp. (BHS) $16.22 -0.73% ... Reported a third-quarter profit of $1.6 million, or 6 cents a share, down from $27.6 million, or $1.03 a share, in the year-earlier period. The residential builder said revenue in the quarter totaled $120.8 million, compared with $175.5 million a year ago. Brookfield expects home-buyer confidence to remain weak until "a balance in supply and demand is achieved."

Jeff Bailey : 10/29/2007 2:19:49 PM

Verizon (VZ) $45.82 +0.48% ... said Q3 net income fell 34% to $1.27 billion, or 44 cents a share, hurt by international taxes and costs of a spin-off of access lines. Adjusted earnings were 63 cents a share. A survey of analysts by Thomson Financial produced an average estimate of 62 cents a share.

Jeff Bailey : 10/29/2007 2:18:57 PM

Simon Property Group (SPG) $99.10 +0.62% ... said that its third-quarter profit rose from a year earlier and that it expects its full-year results to come in at the high end of its outlook or above.

Keene Little : 10/29/2007 2:18:22 PM

Anyone concerned or care to discuss the huge 11.5% drop last week in the Markit's AA Trance? Read about it over the weekend but not sure how meaningful this is for the market. What I read was very scary.

Barry, as I've been saying ad nauseam, the credit crunch has only just begun. It has a long way to go to unwind the record high credit creation of the past few years. It's been a credit bubble (for which we can thank things like the housing bubble and other asset bubbles and why most asset classes will sell off together) and past history is not kind to the market when a credit bubble pops.

The Fed and Treasury will do everything they can (such as Paulson's Super SIV fund shenanigans) but unfortunately it will just need to work its way out of the system and it will very likely cause some pain for bulls. Right now the stock market continues to ignore the storm clouds on the horizon--"one more round of golf since lightning is so far away." Got the crash cart ready?

When Japan went through the same thing after their credit bubble and real estate bubble in the late 1980's many U.S. bankers and the Fed recommended Japan's bankers take the write-downs on their bad loans so as to clear out the dead wood and use their money more productively. Japan did not do this and consequently suffered a depression and still hasn't recovered to where they once were. Even their ZIRP (zero interest rate policy) has had very little effect, except to help the credit bubble elsewhere, such as with the yen carry trade.

Apparently it's easier to offer advice than take it since we're now faced with the same dilemma but banks are refusing to acknowledge the fact that their mortgage-backed investments are no longer rated AAA and AA and therefore not valued at what's on their books. Once a few funds are forced to liquidate more of their stinky holdings (suddenly marking the value to market) bank regulators are going to force banks to do the same. The lightning bolts are getting closer.

Jeff Bailey : 10/29/2007 2:16:42 PM

Citigroup (C) $42.70 +0.16% ... Receives clearance from Japanese regulators to list its shares on the Tokyo Stock Exchange, starting Nov. 5.

Linda Piazza : 10/29/2007 2:13:20 PM

So far, the SPX's nearest Keltner resistance on the 15-minute chart appears to be holding, although the 15-minute period is not concluded. I reiterate what I said earlier, that although today's intraday pattern looks much like Friday's and so a climb into the close is possible, I wouldn't be surprised if we ended up with a doji or a small-bodied candle for the day.

Jeff Bailey : 10/29/2007 2:12:17 PM

Select Financial SPDRs (XLF) $33.61 -0.26% ... After session low of $33.39, and test of DAILY Pivot ($33.39).

Jeff Bailey : 10/29/2007 2:10:06 PM

Bear Stearns (BSC) $115.28 -0.80% ... off session low. Comes to WEEKLY Pivot ($115.04).

Jeff Bailey : 10/29/2007 2:09:13 PM

DJ Source- Bear Stearns Lays Off 300 Employees Firmwide

Linda Piazza : 10/29/2007 2:03:33 PM

Another SPX try at upper Keltner resistance with that resistance at the current 1542.66 zone and then higher at 1545.30. Other than a couple of closes just below the 15-minute 9-ema, the SPX has maintained 15-minute closes at or above that average. Those closes just below that average came during the typical lunchtime lull when the average flattened out and closes below it didn't mean as much as they would earlier, as I had warned.

Jeff Bailey : 10/29/2007 1:53:39 PM

US Earnings: 3Q Results Down 3.7% Vs. 2006, Up 0.1% Vs. Views

DJ- The earnings of companies in the Standard & Poor's 500 index that have issued third-quarter reports are running 3.7% lower than year-earlier results, according to Thomson Financial.

Of the 500 companies, 292, or 58%, had reported earnings for the quarter as of Monday. So far, third-quarter earnings have come in 0.1% higher than analysts' expectations.

Compared with a year earlier, earnings of S&P 500 companies are expected to fall 0.9% in the third quarter. That figure reflects actual earnings for the companies that already have reported and average estimates for the rest.

For the fourth quarter, analysts, on average, expect earnings of the S&P 500 companies to rise 9.4% from the year-earlier period.

Table Link

Thomson Financial said 65, or 53%, of the 122 companies in the S&P 500 that provided previews for the fourth quarter as of Monday will miss analysts' mean expectations; 25, or 20%, expect to meet analysts' expectations; and 32, or 26%, anticipate they will beat the projections.

At a comparable time last year, 104, or about 56%, of the 185 companies in the S&P 500 that provided fourth-quarter previews warned of shortfalls; 24, or about 13%, anticipated on-target results; and 57, or about 31%, projected higher-than-expected earnings.

Jeff Bailey : 10/29/2007 1:44:29 PM

Mexico's Finance Ministers Says 3Q GDP Likely Grew Close To 4%

Keene Little : 10/29/2007 1:33:37 PM

Is this really what we have to deal with through Wednesday? Time to read another book (on technical anaysis of course).

Jeff Bailey : 10/29/2007 1:25:30 PM

S&P 100 (OEX.X) ... 40-largest (sorted by Market Cap) Link

Remember! OEX and SPX are Cap-weighted Indexes

Jane Fox : 10/29/2007 1:06:44 PM

This has been one horrid day to trade and it doesn't look like it is going to change anytime soon. Link

Linda Piazza : 10/29/2007 12:45:45 PM

The SPX still just chops around during the lunchtime lull. A drop below 1536.43 confirms a lower high, but I see potential support at 1536.21 on 15-minute closes, so be careful of assumptions if there's a lower high confirmation.

Jeff Bailey : 10/29/2007 12:44:25 PM

Russell 2000 (RUT.X) 818.19 -0.38% ... reverses gains.

Jeff Bailey : 10/29/2007 12:42:48 PM

Iran, IAEA Begin Final Round Of Talks on P-1, P-2 Centrifuges

DJ (partial) - Iranian and the U.N. nuclear watchdog officials began a third, final round of talks in Tehran Monday aimed at resolving remaining questions on Iran's P-1 and P-2 centrifuges, a technology used to enrich uranium. The Tehran talks are critical because they will be the basis for a progress report on Iran by the U.N. agency's chief, Mohamed ElBaradei, planned for mid November. "In this new round of talks, we hope we'll be able to conclude our negotiations," Iranian state television quoted Mohammad Saeedi, deputy head of the country's Atomic Energy Organization, as saying. The discussions are the latest attempt by the Vienna, Austria-based International Atomic Energy Agency to address outstanding questions on the Iranian program which some Western countries believe masks nuclear weapons production but which Iran insists is focused on power generation. IAEA's deputy chief Olli Heinonen heads the U.N. delegation, while Iran's is headed by Javad Vaeedi from the Supreme National Security Council, a security decision-making body that handles Iran's nuclear talks with the outside world. Saeedi said the two previous rounds of talks with the IAEA were "comprehensive" and also "frank and explicit," and Tehran was now prepared to answer remaining questions to "close the file" on its centrifuge technology. Heinonen said Iran has had "good cooperation" with the U.N. agency in clearing up ambiguities over Tehran's centrifuge technology. Neither official provided details.

Keene Little : 10/29/2007 12:44:33 PM

SPX and DOW just broke their uptrend lines from Thursday and could break to a new daily low but now I don't like the pattern for a bearish play. It's looking more like a sideways consolidation pattern now since the move up from this morning's low is only a 3-wave move (and therefore not likely the end of the move up). I would not short a new daily low as I think it could reverse right back up quickly. On the sidelines watching still...

Jeff Bailey : 10/29/2007 12:41:27 PM

Bank of Canada Injects C$650M Into Financial System

Jeff Bailey : 10/29/2007 12:40:01 PM

Germany's Oct. Flash CPI +0.2% M/M, +2.4% Y/Y, HICP +2.7% Y/Y

DJ- Germany's index of consumer prices in October rose 0.2% on the month and 2.4% on the year driven by a steep increase in food prices, data from the federal statistics office Destatis showed Monday.

Markets expected a 0.1% monthly rise and 2.4% annual rise according to a Dow Jones Newswires' poll of economists.

In September, the Consumer Price Index rose 0.1% on the month and 2.4% on the year.

The European harmonized index for consumer prices rose 0.2% in October on the month and 2.7% over the year, after it rose 2.7% in September.

While lower fuel prices helped offset other price drivers, in some states milk, egg and vegetable prices rose across the board.

Rising food prices "represent upside news for the euro zone" as their dynamics "tend to be highly correlated," Dominic Bryant, analyst with BNP Paribas in London said Monday. For the European Central Bank, that's "hawkish news," he said.

More expensive food is likely to dull consumers propensity to buy, as price changes are most visible here, Goldman Sachs senior economist Dirk Schumacher said.

However, overall price pressures are contained, Schumacher said.

"Core inflation excluding food and energy declined. There is still only modest price pressure from wages," Commerzbank analyst Matthias Rubisch in Frankfurt said. According to his calculations, core inflation stood at 1.7% in October.

Since early 2007, the ECB has repeatedly said inflation is likely to accelerate toward the end of the year, before tapering off again in 2008.

ECB officials have, however, recently warned that inflation pressures are increasing and reiterated that the bank will do all that's necessary to anchor inflation expectations, indicating that a rate increase may be on the horizon sooner than the market anticipates.

Many economists expect the ECB to keep interest rates on hold through the first half of 2008.

Jeff Bailey : 10/29/2007 12:35:06 PM

Petroleos Mexicanos: Ports Need To Open To Restart 600,000 B/D Production

DJ- Petroleos Mexicanos will have to wait for three ports in the Gulf of Mexico to reopen before it can restart 600,000 barrels a day in offshore output because it has run out of storage capacity, a company spokeswoman said Monday.

She said the three main oil export ports in the Gulf of Mexico, Pajaritos, Dos Bocas and Cayo Arcas, remain shut Monday due to bad weather. The transportation ministry has not yet published a bulletin on port operations for Monday in the Gulf of Mexico.

Pemex also had to shut the three ports for a few days last week due to bad weather.

Earlier Monday, Pemex spokesman Carlos Ramirez said the company will be able to re-establish "original conditions" by Tuesday.

Stormy weather caused the deaths of at least 18 workers last week when a Pemex offshore drilling rig hit an oil platform, spilling gas and oil into the Gulf of Mexico. The incident occurred about 20 miles offshore from the port of Dos Bocas in the Gulf coast state of Tabasco.

Mexico currently exports about 1.7 million barrels a day of mostly heavy crude oil, out of total production of just over 3.1 million barrels a day.

Jeff Bailey : 10/29/2007 12:32:00 PM

Dell Computer (DELL) $29.71 +2.51% ... notable 52-weeker at the NASDAQ.

Jeff Bailey : 10/29/2007 12:29:51 PM

Sector Losers ... Regional Banks (BIX.X) -0.92%, Homebuilders (DJUSHB) -0.89%, Healthcare Providers (RXH.X) -0.58%

Jeff Bailey : 10/29/2007 12:28:44 PM

Sector Winners ... Networking (NWX.X) +2.14%, Gold Bugs (HUI.X) +1.42%, Oil (OIX.X) +1.23%, Internet (IIX.X) +1.11%

Linda Piazza : 10/29/2007 12:23:08 PM

Next SPX resistance has dropped to 1542.58 on 15-minute closes, with further resistance at 1544.51.

Jeff Bailey : 10/29/2007 12:22:24 PM

S&P Banks Index (BIX.X) 335.77 -1.06% ... best level of the session came right after the opening bell (340.38). That's also the prior low close from 08/03/07.

This week's WEEKLY Pivot (333.36) would mark that "doji" found on daily interval bar chart from 10/23/07.

Rate banks "hold," but "sell" on any close below 333.

Keene Little : 10/29/2007 12:16:35 PM

The same double zigzag wave count for the DOW, which I showed for SPX (10:34), has a Fib projection a little lower than the SPX 1550 equivalent at 13924: Link . Its 62% retracement is at 13897. Therefore the 13900 area for the DOW could be tough resistance and an area I'll be watching for a short play to set up. But again, a break from here to a new daily low would be more immediately bearish.

Jeff Bailey : 10/29/2007 12:16:03 PM

Terex Cop. (TEX) $75.76 +1.14% ...

Jeff Bailey : 10/29/2007 12:15:43 PM

Caterpillar (CAT) $74.00 -1.38% ...

Jeff Bailey : 10/29/2007 12:15:25 PM

Ford (F) $8.72 +0.57% ...

Jeff Bailey : 10/29/2007 12:15:10 PM

General Motors (GM) $37.91 +0.37% ...

Jeff Bailey : 10/29/2007 12:14:47 PM

Chicago Fed Midwest Mfg Index Dips 0.1% To 105.2 In Sept.

Lowers August Midwest Index To 105.4, From 105.6

Sept. Output Up ).5% From Year-Ago Level

Auto Output Weakest Of 4 Sectors In Sept.

Machinery Mfg. Strongest Of 4 Sectors.

Linda Piazza : 10/29/2007 12:00:40 PM

Today's SPX candle on the daily chart looks just about the way Friday's did this time Friday. There had been an early push higher, a pullback (below the 10-sma on Friday and the 20-sma today) during the middle of the day and then a push higher again that began about 12:15 EST. Am I saying that it's going to happen exactly that way again today? Of course not. I'm just saying that it has in the past and we shouldn't draw too many conclusions too soon about where prices will end up at the end of the day. So far, the SPX is still maintaining the support of the 15-minute 9-ema on 15-minute closes, something it's been doing since that 12:15 candle on Friday.

With all that said, though, it's about time to have another of the consolidation-type days, a day when we have a doji or a small-bodied candle on the daily chart.

Jeff Bailey : 10/29/2007 11:47:51 AM

Cisco Systems (CSCO) $32.21 +0.97% ...

Jeff Bailey : 10/29/2007 11:47:22 AM

Berkshire Hathaway Class-A (BRK.A) $128,200 +0.54% ...

Jeff Bailey : 10/29/2007 11:46:38 AM

Chevron (CVX) $92.48 +0.90% ...

Keene Little : 10/29/2007 11:46:29 AM

A break to a new daily low from here would be bearish and would be a good time to try the short side but I'd prefer to see it drop and then do q quick bounce back up to test this morning's low to set up the short play. A break below this morning's low would be an opening range breakdown (ORB) and can be a profitable play.

Jeff Bailey : 10/29/2007 11:46:12 AM

Citigroup (C) $42.61 -0.04% ... heaviest weighted in XLF $33.48 -0.65%.

Jeff Bailey : 10/29/2007 11:45:19 AM

Google (GOOG) $676.22 +0.23% ...

Jeff Bailey : 10/29/2007 11:44:57 AM

Bank of America (BAC) $48.00 -0.06% ...

Jeff Bailey : 10/29/2007 11:44:33 AM

Procter & Gamble (PG) $71.83 +0.11% ...

Jeff Bailey : 10/29/2007 11:44:06 AM

AT&T (T) $41.78 +0.77% ...

Jeff Bailey : 10/29/2007 11:43:08 AM

Microsoft (MSFT) $34.83 -0.54% ... looking to sell NAKED puts on any pullback near $33.00.

Jeff Bailey : 10/29/2007 11:42:24 AM

General Electric (GE) $40.56 +0.44% ...

Jeff Bailey : 10/29/2007 11:41:56 AM

Exxon/Mobil (XOM) $93.76 +1.68% ...

Jeff Bailey : 10/29/2007 11:40:48 AM

S&P 100 (OEX.X) 720.00 +0.39% ...

Jeff Bailey : 10/29/2007 11:40:17 AM

Table Of 20 Largest U.S. Cos. By Market Capitalization Link

Keene Little : 10/29/2007 11:36:20 AM

SPX is holding its uptrend line from Thursday afternoon through Friday afternoon's low. I'll be watching for a new high from here or a breakdown below the uptrend line for a shorting opportunity. I'm tempted to just sit on the sidelines until we get through Wednesday but let's see if we can get a setup and avoid the noise. I'm looking for at least a 3:1 (4:1 is better) reward to risk trade or else I'm not interested.

Linda Piazza : 10/29/2007 11:34:50 AM

SPX Keltner potential resistance is just above and below 1544, on 15-minute closes, so watch that level for possible resistance if the OEX should climb that high. The lunchtime lull may cause some choppiness that might make it difficult to interpret bullish and bearish signals.

Jeff Bailey : 10/29/2007 11:33:52 AM

London PM Gold Fixing $788.50 (Prev. PM $779.15)

Jeff Bailey : 10/29/2007 11:32:47 AM

German EU-Harmonized Oct CPI +0.2% on Month, +2.7% on Year

Forecast was +0.1% on Month, +2.4% on Year.

Jeff Bailey : 10/29/2007 11:22:23 AM

Forex Currency (Live) Link

Jeff Bailey : 10/29/2007 11:21:45 AM

USD/CAD 0.95617 at the bid.

Jeff Bailey : 10/29/2007 11:20:06 AM

DJ- Canada Dlr At Highest Level Since Unpegged From USD In 1970

Jane Fox : 10/29/2007 11:18:12 AM

STopped at 13893.

Jane Fox : 10/29/2007 11:17:31 AM

Too funny that last surge got us 13892 and I have my stop at 13893 but I don't think for long.

Linda Piazza : 10/29/2007 11:16:23 AM

The SPX is still maintaining 15-minute closes above its 15-minute 9-ema, but that average is now flattening. If there's no dip and the SPX springs up instead, the next resistance is near 1543.60 currently. If there isn't a bounce, the flattening of the 9-ema often predicts that during the mid-day lull, the SPX could begin trading back and forth across that average as it dips down to lower support, now at 1534.45 and 1536.03, respectively, without that dip looking as negative from a Keltner basis as it might have earlier in the day, when the average was still climbing strongly.

Jeff Bailey : 10/29/2007 11:16:18 AM

US Energy Sell Ticaboo Townsite To Uranium One ... Press Release Link

USEG $5.88 +2.97% ...

Jeff Bailey : 10/29/2007 11:12:52 AM

Powerwave Tech (PWAV) $6.11 +2.00% ... started at "buy" by Brean Murray Carret.

Jane Fox : 10/29/2007 11:11:07 AM

The VIX and AD volume are moving in the same direction and that is not how they should be moving, they should move opposite to one another. This used to drive me to drink but since I have added the AD ratio I am much more comfortable with the idea that the bears have control. Notice the DAX and the USDJPY confirm that thought. Link

Jane Fox : 10/29/2007 11:07:01 AM

AD line is an anemic +282 and falling but the most telling of which side has control is the VIX. "Follow the VIX and the money will follow you."

Keene Little : 10/29/2007 11:02:34 AM

Unless this suddenly lets go to the downside the choppy pullback is giving me the feeling that this is getting ready to push higher again. A quick break below SPX 1535 would change that but if it pushes higher then watch for negative divergences against this morning's new high since it could set up the next pullback and a shorting opportunity. Stepping away for about 30 minutes.

Jane Fox : 10/29/2007 11:01:22 AM

We have a lot of chop out there today but from what I can see the bears have control.

Jane Fox : 10/29/2007 10:59:39 AM

I see a swing high at 13892 so I am going to raise my stop to 13893.

Jane Fox : 10/29/2007 10:57:25 AM

In any case the stop and target stay the same. Stop on the short from 13864 is 13891 and target is 13840.

Jane Fox : 10/29/2007 10:55:17 AM

I was just filled on my short from 13864 but got a fill at 13860. I guess that serves me right for using a Stop/Market instead of a Stop/Limit.

Linda Piazza : 10/29/2007 10:55:03 AM

TRAN at a new low of the day.

Jeff Bailey : 10/29/2007 10:53:32 AM

December mini-Gold (yg07z) $790.70 +0.38% ... off Sunday's all-time high of $798.00.

Jeff Bailey : 10/29/2007 10:51:31 AM

US Dollar Index (DXY) 77.06 +0.04% (30-minute delayed) ... off Sunday's session low of 76.777 (76.78)

Jeff Bailey : 10/29/2007 10:50:03 AM

StreetTracks Gold (GLD) $77.83 +0.18% ... ($778.30) ... Off session and all-time high of $78.32 ($783.20)

Linda Piazza : 10/29/2007 10:49:37 AM

The SPX maintains 15-minute closes above its 9-ema so far, with that 9-ema now at 1537.93, and with next resistance now at 1542.24 and then 1543.20 on 15-minute closes. The TRAN's failure to hold the 15-minute 9-ema on 15-minute closes warns us to watch out for similar action on the SPX, OEX and Dow, but so far, they're still maintaining that support.

Jeff Bailey : 10/29/2007 10:48:30 AM

EUR/JPY 165.132 at the bid.

Jeff Bailey : 10/29/2007 10:48:05 AM

EUR/USD 1.44021 at the bid.

Jeff Bailey : 10/29/2007 10:47:40 AM

USD/JPY 114.661 at the bid.

Jeff Bailey : 10/29/2007 10:46:33 AM

Swing trade put alert! for one (1) of the Goldcorp GG Dec. $35 Puts (GG-XG) at the offer of $2.80.

No stop for now, target $30 in the underlying.

GG $33.93 +1.55% ...

Jeff Bailey : 10/29/2007 10:42:38 AM

Select Financial SPRDs (XLF) $33.50 -0.59% ...

Jeff Bailey : 10/29/2007 10:41:56 AM

Washington Mutual (WM) $27.80 -0.78% ... probes Friday's intra-day low.

Jeff Bailey : 10/29/2007 10:41:09 AM

Goldcorp. (GG) $33.90 +1.46% ...

Jane Fox : 10/29/2007 10:41:07 AM

If triggered on the short at 13864 the stop will be 13891 and target 13840.

Linda Piazza : 10/29/2007 10:41:05 AM

The USDJPY is at 114.59, well below its 15-minute 9-ema, but it's got potential support in the 114.55 level.

Jeff Bailey : 10/29/2007 10:40:45 AM

Newmont Mining (NEM) $47.38 -0.39% ...

Jeff Bailey : 10/29/2007 10:40:22 AM

Barrick Gold (ABX) $43.63 +1.34% ...

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

The TRAN is hitting a new low of the day.

Jeff Bailey : 10/29/2007 10:39:52 AM

S&P Sees US Metals And Mining Cos Adding Debt Soon

Jane Fox : 10/29/2007 10:39:26 AM

I am going to short YM at 13864.

Jane Fox : 10/29/2007 10:39:09 AM

I am seeing the AD volume ratio making new daily lows so that means the AD volume absolute will start to fall. I also see the USDJPY making new daily lows. Then or course the granddaddy of all internals is the VIX and it is hovering at daily lows

Jeff Bailey : 10/29/2007 10:37:18 AM

DJ (sources)- Bank of America To Close Base, Precious Metals Trading Desk

Jeff Bailey : 10/29/2007 10:36:12 AM

SPX 1,538.83 +0.23% ...

Jeff Bailey : 10/29/2007 10:35:35 AM

Dallas Fed Oct. Business Activity comes in at -6.6 Vs. Sep -4.6

Jeff Bailey : 10/29/2007 10:34:35 AM

Dallas Fed Oct. Mfg Index comes in at 10.6 Vs. Sep. 4.5

Jeff Bailey : 10/29/2007 10:33:24 AM

Alcoa (AA) $40.01 +1.67% ... post-earnings highs.

Keene Little : 10/29/2007 10:34:41 AM

SPX stalled at its 62% retracement at 1543.44 and it's debatable here as to whether it's consolidating for another run higher or if that quick morning spike was it for now. If it can stay above 1535, the Friday afternoon high, in this pullback and then push higher there is wave count that calls for two equal legs up from Thursday afternoon's low (2nd a-b-c in a double zigzag bounce from Oct 22nd). That wave count gives us an upside projection to 1550.79: Link

Linda Piazza : 10/29/2007 10:18:34 AM

The SOX, unlike some other indices, is so far maintaining most of its day's gain. If you're using the SOX as a kind of indicator of tech strength and the TRAN as one of SPX, OEX and Dow strength, they're giving opposite messages today, so far, at least.

Linda Piazza : 10/29/2007 10:16:08 AM

Here's how the TRAN looks on intraday charts: after falling to the day's low of 4834.74, it's bounced strongly, but is still below the 15-minute 9-ema. FWIW, there's a potential H&S on its chart, so bears will be watching for continued resistance on 15-minute closes at that 9-ema, now at 4855.76. If that resistance should hold or mostly hold on 15-minute closes, it could be chopping out a right shoulder. I don't trust these formations any longer, but they are good to watch to see whether the bears are winning out on a short-term basis or the bulls are, by sending prices high enough to invalidate the formation. A trade much above 4873.20 and even one that high, if not quickly reversed, would likely invalidate the formation.

Linda Piazza : 10/29/2007 10:12:20 AM

The Fed has announced a repo in the amount of $8.750 billion, so that there's been a net add of $1.250 billion. The amount sloshing through the system has climbed to $39.750 billion.

Linda Piazza : 10/29/2007 10:09:15 AM

I'm speaking to the bears here: If any entered bearish SPX plays today on the morning's spike, you certainly do want the SPX to quickly follow the TRAN in closing below the 15-minute 9-ema. That's now at 1536.68 for the SPX. For OEX traders, it's at 717.94, and the OEX is so far maintaining its breakout status, so stronger on a Keltner basis than the SPX. Indicators haven't yet given a go-ahead to bearish plays, although some did give a heads-up to those in bullish plays to be careful to maintain their profit-protecting plans. They're not the same thing, so you new bears would like quick confirmation.

Linda Piazza : 10/29/2007 10:05:32 AM

Here's the USDJPY's Keltner chart, showing the potential resistance on 15-minute closes, resistance which has so far held: Link

Linda Piazza : 10/29/2007 10:03:49 AM

TRAN dropping harder now, and it's well below the 15-minute 9-ema, perhaps suggesting that the SPX could do so, too. It pays to keep the TRAN on the radar screen as a sort of indicator for the SPX, OEX and Dow, but it should offer a heads up and not proof. Watch price action on your trading vehicle. The TRAN is at 4841.78 as I type.

Keene Little : 10/29/2007 10:03:30 AM

The DOW and SPX have now jumped above the tops of the potential rising wedge patterns I've been showing on their charts. If we've got something more bullish going on then a pullback should find support at the trend lines along the highs since last Tuesday. Those are currently near DOW 13828 and SPX 1537.

Linda Piazza : 10/29/2007 10:01:38 AM

Here's my 15-minute SPX Keltner chart to show you the potential resistance I was seeing on 15-minute closes: Link Now bulls want to see 15-minute closes maintained above the 9-ema, now just under 1537.

Jane Fox : 10/29/2007 10:00:58 AM

LONDON (MarketWatch) -- Crude-oil futures moved past $93 a barrel for the first time on Monday, getting a lift as bad weather forced a halt to Mexican production.

Crude futures for December delivery rose as high as $93.20 a barrel in electronic trading, after state-owned Pemex halted production of 600,000 barrels a day of oil due to inclement weather. Pemex said it hopes to resume production in days.

As of 7:45 a.m. Eastern time, crude had backed off a bit, trading up $1.04 at $92.90 a barrel.

Linda Piazza : 10/29/2007 9:56:17 AM

The TRAN has now dropped to 4873.24. So far, it's staying above the 15-minute 9-ema at 4860.83 on 15-minute closes, so this isn't a serious drop yet, but continue to keep it on the radar screen.

Keene Little : 10/29/2007 9:53:57 AM

In another sign of over-the-top confidence in a bullish market, one of the last stock market crash protections put in place, program trading curbs, has now been repealed. This program was institued following the 1987 stock market crash but the NYSE announced Friday that it no longer sees the need to impose trading curbs because of the electronic trading that's available elsewhere. They could have a very good argument about this but it's a little worrisome when we see each market protection that was put in place following previous crashes get removed one by one. Here's the link to the Bloomberg article: Link

Linda Piazza : 10/29/2007 9:51:12 AM

At 114.85, the USDJPY is now hitting Keltner resistance on 15-minute closes. On the daily chart, it's also approaching its 10-sma just under 115 and the rising trendline off the summer's low, which is just above that. U.S. equity bulls want to see it keep charging higher or at least hold near the day's high as corroboration of bullishness in equities.

Linda Piazza : 10/29/2007 9:49:11 AM

The TRAN is pulling back from its day's high, but the pullback isn't serious yet. With a day's high of 4888.28, the TRAN is now at 4879.56. Keep it on your radar screen just in case.

Linda Piazza : 10/29/2007 9:46:38 AM

Here's the SPX's chart and one of the annotations from last Thursday's Wrap: Link

Jane Fox : 10/29/2007 9:45:55 AM

Internals are all bullish this morning so don't even be thinking short. That may change but for now stay long.

Jane Fox : 10/29/2007 9:44:49 AM

I usually drill down to the 1 minute chart first thing in the morning and then switch to the 5 minute.

Jane Fox : 10/29/2007 9:44:02 AM

I showed you a head and shoulders pattern on the S&P futures that was mirrored on the VIX chart. Here is how that all played out Friday. Link

Linda Piazza : 10/29/2007 9:43:33 AM

I don't see any hint of bearishness yet in the indicators that I've been able to check so far, but SPX bulls should know that, if there's going to be any kind of rollover, many of my charts say the SPX is approaching the area from which a rollover might occur. There's absolutely no evidence of it so far, but do have a profit-protecting plan in mind.

Jane Fox : 10/29/2007 9:42:36 AM

AD line opened at about +611 and is now +1159.

Linda Piazza : 10/29/2007 9:41:01 AM

The analogous resistance on the USDJPY is at 114.85 on 15-minute closes, with the USDJPY at 114.80 as I type, having a intraday high a cent above that. What bulls also don't want to see is a sharp pullback in the USDJPY from this presumed strong resistance (on the daily chart, too).

Linda Piazza : 10/29/2007 9:38:41 AM

The SPX is moving straight up into Keltner resistance now at 1541.89 on 15-minute closes, already having tested that zone. This is outer channel resistance. It can be shoved higher as prices move higher, but unless the SPX is going to go into breakout mode, it usually holds on 15-minute closes. So, it may be the zone from which there's the typical pullback after the first few minutes of trading. If so, bulls then want support at 1533.72 to hold on 15-minute closes, although they'd certain prefer that higher support, now at 1538.26, but still moving higher, would hold on those 15-minute closes.

Linda Piazza : 10/29/2007 9:34:55 AM

Forgot to mention that the daily 20-sma is just cents below the SPX's current 1539.72.

Linda Piazza : 10/29/2007 9:32:17 AM

I'm looking at the SPX's 15-minute chart, thinking of the futures at about $4.20 above fair value. If the strength in the futures should carry through into the open--it doesn't always--that would bring the SPX above 1539. The 9/19 intraday high was 1538.74, and the former rising channel's support that I have on my charts (some lower candle shadows cut off) is at about 1544. The 15-minute Keltner chart shows potential resistance at the current 1537.70 on 15-minute closes and then at 1541.68, where it's stronger.

Keene Little : 10/29/2007 9:31:11 AM

After dropping down slightly below a Fib projection at 76.82 the US dollar has rallied off its 76.777 low which also was at the bottom of a parallel down-channel for price action since its October 2006 high. If it leaves a bullish hammer today (which it looks like so far) then we might have finally seen a bottom for the dollar. Bullish divergences continue at the new lows.

The bounce in the dollar from last night's low caused a reversal in gold as well. It peaked at 798 last night and and then dropped back down to test its overnight low at 788.70 this morning. By doing so it has broken its last (steepest) uptrend line that I showed on the 60-min chart last night and is threatening to break the next uptrend line now (dipped quickly below it but bouncing back up). This could be close to giving us a breakdown sell signal.

Linda Piazza : 10/29/2007 9:28:41 AM

A $7.500 billion repo matures today. We should know in a little less than 15 minutes whether the Fed will make any repo announcements today.

Jane Fox : 10/29/2007 9:22:44 AM

Crude tagged $93.00/bl overnight and Gold tagged $798.00. Notice how the Gold and the US$ traded in sync overnight. Link

Jane Fox : 10/29/2007 9:16:52 AM

All markets broke their respective previous day ranges overnight and are posed to make higher highs intraday. I suspect the AD line will open above +500 and quickly rise to over +1000 so the bulls will have control at the open but one never knows what will happen later. Link

Jane Fox : 10/29/2007 9:13:10 AM

Dateline WSJ - NEW YORK -- Whenever Goldman Sachs Group Inc. would report quarterly profits in recent years, the pain would be felt nearby, at the downtown headquarters of Merrill Lynch & Co.

There, Merrill Chief Executive Stan O'Neal would grill his executives about why, for instance, Goldman was showing faster growth in bond-trading profits. Subordinates would scurry to analyze the Goldman earnings to get answers to Mr. O'Neal. "It got to the point where you didn't want to be in the office" on Goldman earnings days, one former Merrill executive recalls.

Soon it will be Mr. O'Neal's turn to avoid the office. The 56-year-old CEO was negotiating the terms of his forced departure yesterday afternoon in the wake of a multibillion-dollar write-off he announced last week, according to a person briefed on the negotiations. Merrill's board is expected to consider external candidates and current Merrill executives in its search for a successor. Mr. O'Neal's resignation is expected to be announced as early as today.

Linda Piazza : 10/29/2007 8:01:54 AM

Although the USDJPY could not make much headway while the Nikkei was open, it's been on a roll since the Nikkei's close. Such moves are somewhat suspect, however, as neither of the currency pair's primary markets have been trading during the period when it broke out of congestion and charged higher. It's charged up toward Keltner resistance at 114.82 on 15-minute closes and also, more importantly, toward daily resistance near 115.00. This resistance consists of the 10-sma, which it, unlike the SPX, has not yet tested since falling beneath it. It's also climbing toward a violated trendline off its summer low, with that trendline now just a little above the 10-sma and 115.00. Watch this may give us a heads-up on what might happen with the SPX if it should test its analogous trendline or at least corroborate the SPX's action, whatever it might turn out to be. The USDJPY hasn't been quite as good a timing tool as it had been previously, but U.S. equity traders still want it moving in the direction of their trades. It's at 114.69 as I type.

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