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Keene Little : 11/6/2007 11:44:39 PM

Wednesday's pivot tables: Link and Link

Well, other than wondering if we'll get a selloff on Wednesday from the Chinese scare (do you suppose the Boyz knew this was coming so they ramped it up at the end of the day on Tuesday in preparation for it?) I had been thinking at the end of the day that ideally we'll get a small pullback and then a minor new high that finishes around SPX 1522 that then sets up the next big decline. Link

But it's possible to count the move up as complete and therefore any selloff on Wednesday should be taken seriously. I don't know much about the "dark days" that was mentioned a couple of days ago but they fall on Nov 7th and 8th this year and then a strong reversal back up on Friday the 9th. Could it happen that way? Stranger things have happened in this market. And if we do get a big selloff then the SPX 1467 target area will likely get blown away as it heads down to the next downside target near 1425, maybe even 1415.

Keene Little : 11/6/2007 10:56:19 PM

Found a story about China announcing their plans to diversify their holdings and sell U.S. assets. I'm surprised bonds haven't sold off more (down only a few ticks). This could be a news item that finally causes the US dollar to find a bottom but obviously that remains to be seen. The dollar looks to be in a capitulation selloff and gold has gone truly parabolic. When the music stops on both of these I would expect to see a very sharp reversal.

Keene Little : 11/6/2007 10:52:07 PM

Whoa, just signing back on for the evening to do some updates and I noticed the US dollar took a plunge, dropping from just above 76 at the end of the day to a low of 75.50. That's a huge move and even though it has bounced back up some (75.75, 30 minutes delayed, as I type) something spooked the dollar and goosed gold in the process (it's up another $14 and now up nearly $30 in the past two days. Equities are down.

OI Technical Staff : 11/6/2007 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 11/6/2007 5:55:54 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 11/6/2007 5:45:31 PM

Alcatel-Lucent (ALU) $9.08 +1.33% ...

Jeff Bailey : 11/6/2007 5:44:58 PM

Hmmmm ....

Jeff Bailey : 11/6/2007 5:44:45 PM

Holy cow! ... NT $19.18 +17.81% ... didn't see that one today.

Jeff Bailey : 11/6/2007 5:40:14 PM

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

DUG outperforms USO today. That's the "refining" portion (see Watch List).

Jeff Bailey : 11/6/2007 5:27:42 PM

USO and DUG MM Profiles Alert!

Here's a DAILY/WEEKLY/MONTHLY Pivot Matrix of these two securities into tomorrow's EIA report Link

First thing you'll notice is the $1 increment Prior High for the USO (MONTHLY, WEEKLY, DAILY).

My thought process has been, and still is this ...

Energy-related equities should LEAD the commodity. The commodity should FOLLOW the equities.

For the current position to work, I'll be looking for this ....

1a) USO action ... I want to see USO strength at the opening bell, with buyers ABOVE the DAILY Pivot ($75.04) and have USO moving higher toward the correlative DAILY R2/WEEKLY R1 ($76.00) as we approach the 10:30 AM EST release of the EIA data. IF the USO is ABOVE that level, then I can further bring my bullish stop up from $73.50.

1b) DUG action ... So far this week we've now seen a WKLY R1 and today, a WKLY S1. This STRONGLY SUGGESTS uncertainty among market participants. IF USO is bidding, but we see DUG move ABOVE DAILY PIVOT ($39.29) that may begin to suggest that commodity traders are set to sell the commodity and a near-term "top" is near at the headline Oil futures hit $100/barrel!. A move much BELOW DAILY S1 ($38.01) in DUG likely takes out my current STOP of $37.90.

2b) DUG ... for a "key reversal day" in the oil commodity, I'd have to think DUG takes out and CLOSES ABOVE the WEEKLY Pivot/DAILY R1 correlation at tomorrow's close. We have observed that DUG can trade WEEKLY R1, so if oil inventories are going to begin to BUILD in the future, then that's a starting point. Things would really get rolling on a more BEARISH note for energy equities if MONTHLY R1/WEEKLY R2 were traded.

What we've seen in DUG just the past couple of days is that UNLEADED has started to RISE, most likely because OIL has RISEN to a level where REFINERS start to RAISE PRICES due to the cost of oil itself.

You've probably read the XOM, CVX (producer/refiner) earnings reports where "high oil prices" have squeezed margins at the refining end.

Jeff Bailey : 11/6/2007 4:47:05 PM

Oh boy ... interesting looking day for energy traders (oil and equities) tomorrow.

Jane Fox : 11/6/2007 4:16:25 PM

Economic Reports for tomorrow include:

7:00a.m. MBA Mortgage Application Survey. Previous: +9.2%.

8:30a.m. 3Q Prelim Productivity. Expected: +3%. Previous: +2.6%.

8:30a.m. 3Q Prelim Unit Labor Costs. Expected: +1.1%. Previous: +1.4%.

10:00a.m. Sep Wholesale Trade. Expected: +0.3%. Previous: +0.1%.

3:00p.m. Sep Consumer Credit. Expected: 7.9B. Previous: +12.2B.

Keene Little : 11/6/2007 4:14:08 PM

NYSE new highs to lows: 156 to 196
Nasdaq new highs to lows: 101 to 291 (and this after a +1% rally) The a-d line for the techs was also unable to best this morning's high so there's weak market breadth across the indices.

Keene Little : 11/6/2007 4:07:31 PM

And even though NYSE rallied to a new high this afternoon, its a-d line was not able to best this morning's high. More negative divergence. It's simply not a healthy rally so if you're long this bounce, pull up those stops. The Boyz are manipulating this higher probably for another opportunity to sell into it.

Keene Little : 11/6/2007 4:02:20 PM

Golf clap for the Boyz and their jam-it-higher into the close. It's too bad new 52-week lows are Still beating out new highs (as has been the case for days now). It's a phony rally but you can't argue with price right now.

Linda Piazza : 11/6/2007 4:00:18 PM

Lots of daily opens and closes, highs and lows in this zone the SPX approaches now. The 30-minute chart gives me a higher upside potential target, but make up your mind now if you want to lock in some of your short-term bullish profits or carry such positions overnight. Not all targets are realized, of course, especially in this environment.

Linda Piazza : 11/6/2007 3:55:04 PM

It looks as if bulls are finally going to manage that daily close above the 50-sma. My 30-minute and 15-minute Keltner charts suggest different upside targets, so let's look at the 30-minute one. That suggests a potential upside target now of 1526.12 as long as the SPX closes this 30-minute period above 1515.80. If not, upside targets are erased on both the 30- and 15-minute charts. The 10-sma is at 1522.57, and it's potential for resistance should be noted, too.

Jane Fox : 11/6/2007 3:44:48 PM

All the major markets have given us very clear levels of support. Link Well that is all but NDX. It never did retreat enough to give that very clear level a support. Link

Jeff Bailey : 11/6/2007 3:43:36 PM

They'll take CROX out behind the shed on a -30% day, but they LOVE tech.

Jeff Bailey : 11/6/2007 3:42:48 PM

Brutal ...

Jeff Bailey : 11/6/2007 3:42:28 PM

Day trade short stopped alert! ... for CTSH at $31.90.

Keene Little : 11/6/2007 3:37:20 PM

Based primarily on the multitude of 3-wave moves since Friday I'm guessing we could be in a larger A-B-C bounce where wave-C (the move from yesterday afternoon) will form a rising wedge, perhaps something like shown on ths SPX 30-mn chart: Link

Jane Fox : 11/6/2007 3:33:46 PM

Here is the DOW. Link

Jane Fox : 11/6/2007 3:33:19 PM

So far the support at 1490 has held and the bulls are getting stronger. I am feeling a lot more comfortable with the long I took in the DOW. Link

Linda Piazza : 11/6/2007 3:28:10 PM

Here's the SPX daily chart I posted earlier today, with the original annotations but updated prices: Link

Keene Little : 11/6/2007 3:24:10 PM

Another day, another final hour rally. Starting to see a pattern here--rally it, sell into it, rinse and repeat. It looks like a distribution pattern. We'll see if holds tomorrow. Right now we've got another high (looking at SPX here) with what appears could be another lower MACD high on the 10-min chart if price turns back down from here. But if SPX can hold this late-day rally then I'd be looking for a run up to the 1522 area (potentially in a choppy climb inside a rising wedge for wave-c of an a-b-c bounce off Friday morning's low).

Linda Piazza : 11/6/2007 3:23:05 PM

Here's the SPX's 50-sma, finally being tested again. Bulls need to hold onto gains and even add to them into the close. I show Keltner resistance near 1515.50 on 15-minute closes.

Jeff Bailey : 11/6/2007 3:18:54 PM

CTSH ... Day trader's 5-minute interval chart Link

Jeff Bailey : 11/6/2007 3:07:53 PM

Day trade short alert! ... for a full position in shares of Cognizant Tech (CTSH) $31.38 -20.77% here.

Stop goes $31.90, target $30.10.

Keene Little : 11/6/2007 2:54:02 PM

While it looks like we could get another push higher (that's not a given here), until SPX can rally above 1513 and hold above it, I still like the bigger consolidation idea before it lets go to the downside. This is an ugly market to trade right now and it could remain that way for another couple of days. I see MACD's climb out of oversold now as bearish since the oversold condition is being relieved while price goes sideways. Link

Linda Piazza : 11/6/2007 2:45:00 PM

I personally think SPX bulls need to do better than this today. I don't know how the day is going to end, but as I said from early this morning, I think bulls need to close the SPX above the 72-ema and preferably above the 50-sma. Otherwise, we've had three days in a row when candles challenge that resistance, when candles spring up from support, with nothing being accomplished by all the visible effort. It's like people throwing themselves at a door time after time with no result. Eventually, they're either going to give up or they're going to back up and gather momentum for another try. So, I think there could be a lot at stake in this last hour and 15 minutes of trading.

Jeff Bailey : 11/6/2007 2:41:48 PM

BOC's Jenkins (update)

DJ- Continued sharp gains in the Canadian dollar - which reached a new high against the U.S. dollar Tuesday - could pose "significant risks" to Canada's economy, Bank of Canada senior deputy governor Paul Jenkins said.

"Given the magnitude of its appreciation ... continued gains could present significant risks both to output and inflation," Jenkins told the Canadian Association of New York during a question and answer session after a speech Tuesday.

Jenkins said the Canadian dollar's gains - it's risen 25% against the greenback this year - are "outside the normal bounds" of currency fluctuations, even if the general weakness of the U.S. dollar is taken into account.

The senior deputy governor also said, in response to an audience member's question, that any verbal intervention designed to support the weak U.S. dollar by Canada or another major player would probably not work if it wasn't followed up by action.

"For exchange rate intervention to have lasting effect, it would have to be followed with policy," or the effects would only be temporary, he said.

Jenkins also said the world needs more exchange rate flexibility, and specifically named China for failing to allow its currency, the yuan, to fluctuate more.

The U.S. dollar notched a new low of C$0.9227 Tuesday - its lowest level since the Canadian dollar began trading in its modern form - amid soaring oil prices and lower U.S. interest rates.

Jeff Bailey : 11/6/2007 2:39:11 PM

BOC's Jenkins: More C$ Gains Could Pose "Significant" Risks

Keene Little : 11/6/2007 2:37:38 PM

It's a very choppy pullback so far and makes it look like this will head higher still. I'd pull my stop down closer if you shorted this.

Jeff Bailey : 11/6/2007 2:27:08 PM

Cisco Systems (CSCO) $33.84 +2.29% ... If long the shares, I'd suggest taking some gains off the table.

The dominant player for sure, but some of the other networking equipment makers have seen some negative price action on earnings.

Most have been at the expense of CSCO taking market share from them.

Could raise some cash, then monitor QCOM $40.98 for a trade AFTER their earnings. Not as "extended" as CSCO, and a gap higher on an upside surprise would have stock breaking above a downward trend.

Linda Piazza : 11/6/2007 2:26:04 PM

The SPX continues to find resistance on 15-minute closes at the Keltner line now just under 1512, with further resistance extending up to 1515.53 on 15-minute closes. It has not, however, given up its challenge of that resistance, nor closed beneath the 15-minute 9-ema at 1509.66, which would signal some slight weakening of bullish resolve, at least.

Jeff Bailey : 11/6/2007 2:18:23 PM

McAfee (MFE) $39.72 -1.12% ... how many of us were monitoring those recent bars?

Jane Fox : 11/6/2007 2:18:07 PM

NEW YORK (MarketWatch) -- Crude-oil futures joined a broad commodities rally and jumped nearly 3% to a new all-time high Tuesday, boosted by expectations for a sharp drop in crude inventories and dollar weakness.

Crude for December delivery was up $2.72 to $96.70 a barrel on the New York Mercantile Exchange. Earlier, crude hit a new record high of $97.

"What a rally," said Phil Flynn, an analyst at Alaron Trading. "What a difference a day makes. This volatility is enough to give you vertigo."

Jeff Bailey : 11/6/2007 2:17:11 PM

Symantec (SYMC) $17.51 -4.62% ... post-earnings low.

Linda Piazza : 11/6/2007 2:22:56 PM

I hesitate to bring up a topic that turned out to be touchy for some, but I wanted to point out that earlier today I was able to close out the bear-call portion of a DEC RUT condor for $0.15. That was a DEC 920/930 bear call spread. It was originally established on October 26, so less than two weeks ago. My point in discussing this originally is still my point today: if you're interested in removing some of the risk from your portfolio, check these routinely to see if you can close them out, locking in the majority of your profit and eliminating that portion of your risk. You'd be surprised how often it's possible. Before I set my goal this year of establishing an exit (both for profit and when something was going wrong) strategy that worked for me, I never routinely checked these until the last week or so before option expiration. As long as the underlying was far away from my sold strike, I was happy.

However, if I'm in that trade less than two weeks and I can lock in the majority of the profit, do I want to let $20,000 (I had 20 contracts on this particular spread) be at risk, just so I could collect that last $0.15 of profit? Each of us will have different approaches, and I understand all of those who wrote to me, correctly stating that the probability was that I could collect that last $0.15 and so I was giving it up for nothing. You might be right. However, I've been bitten by a spread I thought safe more than once, and I don't want to have it happen again. So, now I want to point out something different: if there's another vault higher in the markets, I still have time to reestablish a bear call spread position for December and do it all over again.

Keene Little : 11/6/2007 2:11:28 PM

Just a tad lower for SPX is its uptrend line from yesterday afternoon at 1508.70 (ES 1513). That will need to break in order for this short play to get going.

Linda Piazza : 11/6/2007 2:03:19 PM

So far, the SPX's Keltner resistance (now at 1511.91) is holding on 15-minute closes, but the SPX hasn't closed a 15-minute period below the 9-ema (now at 1509.19) and continues to challenge the resistance. There was one close that was a few cents above the then-level of the Keltner resistance, but just a few cents. No final outcome of that stop-running push that began right on schedule, at least not yet.

Keene Little : 11/6/2007 2:01:19 PM

First lower low here so the top should be in. Short against the high (see if you can get a bounce to do it).

Linda Piazza : 11/6/2007 1:44:44 PM

The OEX is again jammed under/at the 72-ema, a spot that's proved resistance three days in a row. If in bullish trades, be protective of your profits in case this or the 50-sma at 1514.33 prove to be resistance again. Want-to-be bears can watch for rollover potential, but I'd want more internals in my favor before I initiated any trade. The VIX is headed lower--in the bulls' favor--and the advdec line is headed higher, but it's not at a new high and instead is at a rather tepid level. So, be careful either way.

Keene Little : 11/6/2007 1:44:16 PM

The poor RUT--it hasn't been able to match the highs on the others. Keep an eye on its downtrend line from Friday, currently near 791.70 (about to be tested).

Jane Fox : 11/6/2007 1:43:26 PM

Internals are certainly looking a lot more bullish now. Link

Keene Little : 11/6/2007 1:42:02 PM

Still chugging higher but it's not looking impulsive which is what's giving me the feeling the rally will fail again. Negative divergences on the 10-min chart call into question this test of this morning's high. Short a rollover against the day's high (watch for a lower low in this bounce).

Jane Fox : 11/6/2007 1:41:57 PM

Linda that trade was an excellent example of planning your trade and then sticking to the darn plan and not bailing early.

Linda Piazza : 11/6/2007 1:40:05 PM

I add my congratulations, too, Jane. You worked hard for that trade, didn't you!

Linda Piazza : 11/6/2007 1:39:14 PM

Next potential SPX resistance at just under 1512 on 15-minute closes. Next resistance above that at 1516 on the 15-minute chart.

For the OEX, the potential resistance is just under 707 on 15-minute closes, with next resistance above that at 708.37.

Linda Piazza : 11/6/2007 1:34:16 PM

The typical stop-running time of day from 1:35-1:55 EST is approaching. While it's difficult to believe prices will move anywhere, watch for the possibility that big money people returning from lunch will test either support or resistance to see if it holds before the next direction is decided.

Jane Fox : 11/6/2007 1:19:02 PM

Tks Jeff - it was a long one. :)

Jane Fox : 11/6/2007 1:12:51 PM

YM reached the original target of 13610 but I feel totally OK with taking our profits at 13600.

Jeff Bailey : 11/6/2007 1:11:58 PM

Good trade Jane!

Jeff Bailey : 11/6/2007 1:11:51 PM

TRIN 0.68 ...

Jeff Bailey : 11/6/2007 1:11:38 PM

NYSE A/D 1,619:1,494

Jeff Bailey : 11/6/2007 1:09:33 PM

This morning's high on CROX $43.80 came right at the 11/02 low of $43.80. VERY human.

Jeff Bailey : 11/6/2007 1:08:24 PM

CROX $42.55 +2.65% ...

Jane Fox : 11/6/2007 1:07:15 PM

Finally!!!!!

Jane Fox : 11/6/2007 1:07:10 PM

Target hit.

Jeff Bailey : 11/6/2007 1:06:37 PM

TRINQ 0.81 ...

Jeff Bailey : 11/6/2007 1:06:24 PM

NASDAQ A/D 1,244:1,657

Jeff Bailey : 11/6/2007 1:06:07 PM

TRIN 0.68 ...

Keene Little : 11/6/2007 1:06:01 PM

At this point, with this bounce making higher lows, as soon as it makes a lower low that should be good for a short play. This risk will be to the high of this bounce. An alternative way to try the short side is to wait for a break of today's uptrend line, see if does a retest and short it there.

Jeff Bailey : 11/6/2007 1:05:57 PM

NYSE A/D 1,579:1,546

Jane Fox : 11/6/2007 1:03:52 PM

Lowering target to 13600.

Jane Fox : 11/6/2007 12:44:14 PM

Raise stop to 13565 so we have 9 ticks as risk. This has been a tricky trade because we got to within 11 ticks or our profit - close but not "close" enough to raise the stop to breakeven yet you want to lessen your risk. This is where the "art" of trading comes in and each trader will handle this differently.

Keene Little : 11/6/2007 12:39:29 PM

The move up is definitely corrective looking and suggests the bounce will fail. Watch for one more push back up, possibly retesting this morning's high (to complete a double zigzag a-b-c-x-a-b-c count from this morning's low) as an opportunity to get short for another ride back down to perhaps the 1490 area.

Jane Fox : 11/6/2007 12:37:56 PM

Crude has hit a high of 97.07. Oh my goodness when the sellers start piling on.

Jeff Bailey : 11/6/2007 12:36:41 PM

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

RAISED stop ahead of tomorrow's EIA data on the USO.

Jane Fox : 11/6/2007 12:29:05 PM

STop to 13560.

Jeff Bailey : 11/6/2007 12:28:19 PM

Swing trade long raise stop alert! ... for the US Oil Fund (USO) $75.06 +2.06% ... to $73.50.

Linda Piazza : 11/6/2007 12:25:06 PM

On a Keltner basis, the SPX has potential resistance at 1590.55, 1512.20 and 1516 on 15-minute closes. And then there are the daily 72-ema and 50-sma in that same range.

Linda Piazza : 11/6/2007 12:23:04 PM

I just took a look at volume patterns, and they're not going to give us a strong indication of next direction. They're mixed. On the NYSE, the ratio of advancers to decliners is 14/17, but up volume is ahead of down volume. On the Nasdaq, the ratio of advancers to decliners is 12/16, and here, down volume is stronger than up volume. On the whole, the patterns are more negative than positive, but someone must be buying a lot of a few issues on the NYSE.

Jane Fox : 11/6/2007 12:21:26 PM

Stop to 13549

Keene Little : 11/6/2007 12:15:54 PM

I would not short another push higher as it could gain some momentum to at least retest this morning's high.

Keene Little : 11/6/2007 12:13:37 PM

The bounce hasn't achieved two equal legs up but it's looking ready to drop back down. A drop below the pullback just past 11:30 AM should see some follow through to the downside (for at least two equal legs down from this morning's high) and would make a good scalp short.

Jeff Bailey : 11/6/2007 12:11:27 PM

Take that AMEX offer at $1.40.

Jane Fox : 11/6/2007 12:10:20 PM

This is a day for tape reading.

Jane Fox : 11/6/2007 12:10:09 PM

I see nothing in the internals that indicates any direction.

Jane Fox : 11/6/2007 12:09:37 PM

TRIn has been climbing all day but from 0.46 to 0.77 which is quite a bullish range.

Jeff Bailey : 11/6/2007 12:06:26 PM

Swing trade call option alert! ... for two (2) of the Apex Silver Mines SIL Dec $20 Calls (SIL-LD) at the offer of $1.50. LIMIT $1.50.

Stop will go $18.90 in the underlying. Target $25.00.

AMEX:SIL $20.20 +2.07% ...

Jane Fox : 11/6/2007 12:00:09 PM

Raise stop to 13539

Keene Little : 11/6/2007 11:55:59 AM

Just when you think it's going to drop down the market gets hit with a buy program across the board. But watch for two equal legs up from this morning's low as that could set up the next shorting opportunity (e.g., ES 1512.50).

Jane Fox : 11/6/2007 11:56:27 AM

WE took a little heat on the YM long but we are now back to breakeven.

Linda Piazza : 11/6/2007 11:51:42 AM

The USDJPY has been trending lower, pressured by the descending 15-minute 9-ema, closing 15-minute periods below it. That average is now at 114.41, with the USDJPY at 114.38, so it's obvious that we're seeing another test of that average. It's been flattening in the middle of the day, and sometimes that precedes a move across it, but we'll have to see. So far, it's been lower lows for the USDJPY all morning. That used to be a negative sign for U.S. equities, but the signs are mixed today, so who knows which evidence prevails.

Linda Piazza : 11/6/2007 11:42:19 AM

While I was gone, the SPX dipped to test that support near 1499 (10:35:07 post). Now it's risen back to test potential support/resistance near 1504. Basically, it's still just churning within that rectangular consolidation zone that it's been building. Watch for a breakout, but I wouldn't consider an upside one, if it comes, fully confirmed until and unless there's a daily close above the 50-sma, so be careful on upside breakout attempts.

Jeff Bailey : 11/6/2007 11:38:57 AM

Day trade long cancel order alert! ... Please cancel the order to go long CROX at $42.46.

CROX $41.95 +1.20% ...

Jeff Bailey : 11/6/2007 11:27:18 AM

Day trade long setup alert! ... for 1/2 position in shares of Crocs, Inc. (CROX) $42.24 +1.90%

Go long a trade at $42.46. Stop goes $41.74. Target $44.90.

Jane Fox : 11/6/2007 11:23:34 AM

Long YM at 13574 stop is 13529 and target 13610.

Keene Little : 11/6/2007 11:14:11 AM

The way price is acting I'm wondering if we're going to stay trapped between SPX 1490 and 1510 for another couple of days while we consolidate sideways in a larger b-wave before dropping lower. Expect lots of chop if this plays out a little longer: Link

I moved the key level for the bulls back up to 1522 which is a Fib projection for a higher a-b-c move. Any push above that level would suggest a move at least back up to the downtrend line from the October high, currently near 1545.

Jane Fox : 11/6/2007 11:14:10 AM

I have a YM long at 13574 with a stop just below daily lows and target 13610.

Jane Fox : 11/6/2007 11:10:51 AM

This has been one of those days when the VIX follows ES - it happens but not often. The only thing you are out is maybe a short trade. Link

Jeff Bailey : 11/6/2007 11:09:48 AM

Good gravy! ... CDE $4.29 +11.71% ... son of a miner!

Jeff Bailey : 11/6/2007 11:08:29 AM

DJ Survey: US 3Q Advance Productivity Seen +3.4%

DJ- The preliminary report on productivity growth in the third quarter is expected to show another solid gain, reflecting the above-trend rate of increase reported for gross domestic product.

The median estimate of 25 economists surveyed Monday by Dow Jones Newswires is for a 3.4% annual rate of non-farm productivity growth in the third quarter following the 2.6% growth rate of the second quarter, while unit labor costs - equal to the change in hourly compensation less productivity growth - are expected to be up at a 0.8% rate after a 1.4% rate in the prior quarter.

The Labor Department is due to release the third-quarter productivity report at 8:30 a.m. EST (1330 GMT) Wednesday.

"We look for a healthy gain in productivity, reflecting the solid increase in GDP and the small rise in hours worked," said Peter D'Antonio, an economist at Citigroup Capital Markets in New York. "The big increase in productivity ensures that unit labor costs were held in check in the third quarter." He and his colleagues look for a 3.7% annual rate of increase in productivity and a 0.7% rate of increase in unit labor costs.

Jeff Bailey : 11/6/2007 11:04:13 AM

Oil Futures: Crude Oil Rises To Record High On Supply, Dollar

DJ- Crude-oil futures touched a new all-time intraday record high Tuesday as supply concerns mounted and the dollar weakened.

Light, sweet crude for December delivery was recently up $2.09, or 2.2%, at $96.07 a barrel on the New York Mercantile Exchange after hitting a fresh record $96.44. Brent crude on the ICE futures exchange rose $2.08 to $92.57 a barrel after hitting its own record of $92.74.

Supply concerns helped drive the rally. Analysts surveyed by Dow Jones are predicting a 1.6-million-barrel draw in U.S. stocks to be reported by the Department of Energy weekly inventory report due out Wednesday.

Further heightening worries, a bomb blast damaged a pipeline in northern Yemen Monday, halting oil flow to the Hudeida export terminal on the Red Sea, according to Agence France-Presse. The pipeline has a capacity 155,000 barrels of crude oil a day. Yemen itself produces 380,000 barrels a day.

In the North Sea, ConocoPhillips (COP) is preparing to evacuate five installations located in its North Sea Ekofisk oil fields if current poor weather conditions deteriorate. The impact on oil output is not yet clear.

"Worries about declining crude oil inventories in tomorrow's DOE inventory report, further weakness in the U.S. dollar and a Yemeni pipeline attack helped push oil prices back," said Addison Armstrong, an analyst at at TFS Energy Futures in Stamford, Conn.

The dollar reached a record low against the euro on the back of heightened market volatility. The euro jumped up to $1.4562, beyond its previous synthetic high extrapolated from historical dollar-Deutsche mark levels.

A weaker dollar makes dollar-denominated oil futures cheaper for buyers in foreign currencies, further driving up crude demand.

A strong start in the U.S. stock market also supported prices in oil, said Phil Flynn, an analyst at Alaron Trading in Chicago. The Dow Jones Industrial Average was recently trading up 34.22 points to 13,577.62.

"Every time the stock market rebounds, the oil market tags along," Flynn said.

Front-month December reformulated gasoline blendstock, or RBOB, rose 5.12 cents, or 2.2%, to $2.4323 a gallon. December heating oil rose 4.51 cents, or 1.8%, to $2.5890 a gallon after reaching an intraday record of $2.5970.

Keene Little : 11/6/2007 11:02:07 AM

SPX has retraced 50% of yesterday afternoon's rally (1500.76). A 62% retracement is at 1498.21.

Keene Little : 11/6/2007 10:52:19 AM

NDX is once again challenging its uptrend line from August through the Oct 22nd low, currently near 2193. A break below there that holds would turn that index bearish and that could set the tone for the market.

Linda Piazza : 11/6/2007 10:35:07 AM

I've got to step away for about 30-40 minutes. The SPX is currently testing its support from 1504-1506, and with that important on 15-minute closes. Below that, next support is near 1499.

Linda Piazza : 11/6/2007 10:26:27 AM

The day is still long ahead of us, but here's what I see so far on the daily SPX chart: Link

Keene Little : 11/6/2007 10:25:36 AM

No rally and the techs are dropping hard. But the price pattern is now looking very choppy so off to the sidelines to see what sets up next.

Jane Fox : 11/6/2007 10:25:19 AM

Here is something you don't see everyday, the VIX and S&P futures out of sync. This tells me ES will not make new daily lows or if it does it will not have follow through. Do not be short here. Link

Jane Fox : 11/6/2007 10:17:12 AM

Jeff mentioned the Dollar was getting whacked so of course what is Gold doing - rally mode!!!! Link

Linda Piazza : 11/6/2007 10:17:01 AM

While the SPX is trending up this morning, the advdec line as measured on my feed is trending down. The USDJPY chops back and forth in a tight range, but a tight range near its swing low established after this morning's 8:30 releases. The VIX moves lower. The TRIN kind of moves higher but from low levels. Those are the kind of divergences I was concerned we might see this morning (9:30:49 post). What are you going to conclude from that kind of mixed-up mess?

Jane Fox : 11/6/2007 10:14:52 AM

My long YM is now at 13631 with a stop at 13599 and target 13662.

Keene Little : 11/6/2007 10:14:42 AM

Not exactly a lot of follow through to the upside here. Send in the pit bulls.

Keene Little : 11/6/2007 10:04:53 AM

Getting the higher high now (on ES) so if long I'd now use the last dip as your stop since this has to work right away otherwise a drop back down likely means we're in the middle of chop and off to the sidelines we go.

Jeff Bailey : 11/6/2007 10:02:02 AM

Dollar getting whacked further ... DXY 76.01

Jeff Bailey : 11/6/2007 9:57:35 AM

TRINQ 1.06

Jeff Bailey : 11/6/2007 9:57:26 AM

NASDAQ A/D 1,276:1,247

Jeff Bailey : 11/6/2007 9:57:10 AM

TRIN 0.59

Keene Little : 11/6/2007 9:57:02 AM

If this morning's pullback leads to another push higher I'd buy it since the price pattern would then turn more bullish. Just keep a tight leash on it.

Jeff Bailey : 11/6/2007 9:56:43 AM

NYSE A/D 1,533:1,301

Linda Piazza : 11/6/2007 9:55:44 AM

On an intraday Keltner basis, the SPX faces resistance on 15-minute closes at 1513.44 and then at 1516.75, if it should rise further than the 1509.84 resistance it faces now. On a 30-minute chart, that resistance is at 1510.46 on 30-minute closes.

For the OEX, it's 707.19 and 708.32 on 15-minute closes if it can get past the currently being tested level at 707.24 on 15-minute closes. On the 30-minute chart, it's at 705.75 on 30-minute closes.

Jeff Bailey : 11/6/2007 9:55:13 AM

Valero 3Q Profit Falls, Margin Erosion ... AP Story Link

VLO $71.07 +2.37% ...

Keene Little : 11/6/2007 9:50:16 AM

Yesterday afternoon's highs are holding and even the slightly higher high for NDX has bearish divergence. It's not looking bullish yet.

Jane Fox : 11/6/2007 9:49:18 AM

I have a long YM sitting at 13634 with a stop at 13591 and target at 13677.

Keene Little : 11/6/2007 9:48:11 AM

Jeff made a comment last night about YM's low price on October 22nd and I rechecked my charts and found a discrepancy on QCharts--its daily, weekly and monthly candles are not reflecting the actual low price of 13449 (they're way off) so I've corrected that for the monthly pivots: Link . Thanks Jeff for pointing that out.

Linda Piazza : 11/6/2007 9:46:55 AM

The Fed has announced a repo in the amount of $4.250 billion. A repo of $6.750 billion matures today, so that leaves a net drain of $6.750 billion. The amount sloshing through the system is now $39.250 billion.

Jane Fox : 11/6/2007 9:44:38 AM

Bernanke will be speaking at 13:40ET today.

Linda Piazza : 11/6/2007 9:42:48 AM

I don't know what's going to happen today. It's far too early to decide what the end of the day will bring. However, I do know that bulls need to close the SPX above the 50-sma or at least the 72-ema. If it doesn't, after three days of battering at those moving averages, I would think that the conclusion would be that there needs to be a retreat to stronger support to gather strength before another push.

Jane Fox : 11/6/2007 9:42:38 AM

VIX testing daily lows tells me bulls continue to have control.

Linda Piazza : 11/6/2007 9:39:43 AM

The TRAN approaches important potential resistance, both on intraday and daily charts. On intraday, it's the Keltner resistance at 4805.92 on 15-minute closes, with the TRAN at 4795.56 as I type. On the daily chart, it's the underside of the rising trendline that had formed off the 10/22 low, with that just above 4800, maybe as high as 4820.

Jane Fox : 11/6/2007 9:36:10 AM

AD line as quickly climbed to +1027, the bulls have the ball this morning.

Linda Piazza : 11/6/2007 9:34:41 AM

The chopping around that the SPX did yesterday broadened its triangle shape into a rectangular one. The top of the shape should be about 1512.71, but we've got the 72-ema and the 50-sma on the daily chart that might provide resistance either on an intraday basis or on a closing basis. The 50-sma is at 1514.31 this morning and the 72-ema, at about 1511.40.

Jane Fox : 11/6/2007 9:31:23 AM

AD line opens at an anemic +205.

Linda Piazza : 11/6/2007 9:31:29 AM

After the 8:30 releases, the USDJPY dropped back to Keltner support at 114.37. It had been trending sideways-up all during the overnight session, approaching but not quite testing upper Keltner resistance. If the inter-market relationship of the last few years is still intact--not sure that it is--this reaction hints that the 8:30 numbers were not equity friendly despite futures being higher than fair values. What does this mean? Not much yet. Maybe nothing. However, it might mean that if other intermarket and breadth measurements are mixed up when the cash market opens, as these two reactions are, we could see some choppy trading conditions at first. We won't know until we start getting those other measurements, but just know that the USDJPY reaction did not support equity strength.

Jane Fox : 11/6/2007 9:29:53 AM

I keep waiting for the US$ to start making a bottom but the only evidence I see so far is that the MACD could be making a bullish divergence, although it has not yet. So far price has not given me any kind indication it is ready to reverse. Link

Keene Little : 11/6/2007 9:28:20 AM

It was a steady climb in the overnight futures and if it follows through after the cash market opens then yesterday afternoon's high should be taken out. Until that happens watch for possible resistance there but NQ has already exceeded it so that one looks bullish.

Jane Fox : 11/6/2007 9:22:53 AM

NEW YORK (MarketWatch) -- Gold futures rallied Tuesday to trade near a fresh 28-year high, propelled by the dollar's tumble to yet another record low against the euro and by surging crude-oil prices.

Gold for December delivery rose $9.60 at $820.40 an ounce on the New York Mercantile Exchange. In electronic trading, the contract hit an intraday high of $824, while in regular trading it reached a high of $821.80.

The record high for Nymex gold was $875 set on Jan. 21, 1980, and the record settle was $825.50 set on the same date.

"The surging oil price is an important factor and investors are using gold as an inflation hedge," said Mark O'Byrne, director of Gold and Silver Investments Ltd., in a research note. "But of more importance is the dollar falling to new all time record lows against the euro and a basket of currencies again this morning."

Jane Fox : 11/6/2007 9:15:13 AM

Overnight crude broke to a new all time high, 96.44, giving a nice boost to Gold and helping the US$ fall to new yearly lows. Someday this will reverse and you will see the US$ start a rally and both Crude and Gold will fall but that day is not here yet.

USDJPY has just taken a spike down and that is not bullish for American Equity Indexes. Link

Jane Fox : 11/6/2007 9:11:10 AM

A series of higher highs and lows is the bullish and the exact opposite of Sunday's overnight session. Notice it was only the NDX futures that broke its Previous Day High (PDH) so tech is still leading the way. Link

Jane Fox : 11/6/2007 9:08:26 AM

HONG KONG (MarketWatch) -- Shares of Alibaba.com almost tripled in their Hong Kong debut on Tuesday, marking a successful start for the world's largest initial public offering by an e-commerce company since Google Inc.

Shares in Alibaba.com (HK) closed at HK$39.50 ($5.09), up 193% from an initial offering price of HK$13.50. Shares traded as high as HK$39.95 during the session.

The debut reflects strong investor appetite for mainland Internet companies and comes just a day after the benchmark Hang Seng Index fell 1,526 points, its worst one-day point drop in history. The Hong Kong benchmark ended on Tuesday up 1.7% at 29,438.13.

Jane Fox : 11/6/2007 9:06:55 AM

TEL AVIV (MarketWatch) -- Hovnanian Enterprises Inc., (HOV) the Red Bank, N.J., homebuilder, reported that for the fourth quarter ended Oct. 31, it delivered 3,969 homes, 19% fewer than in the year-earlier period. In the quarter, Hovnanian signed contracts on 2,781 homes, down 10% from a year earlier. Tighter mortgage-0underwriting standards led to an increase in the quarter's cancellation rate to 40% from 35%. Contract backlog at Oct. 31 was 5,938 homes, down 30% from a year earlier. The company said that it reduced the debt on its balance sheet by $390 million in the period.

Jane Fox : 11/6/2007 9:06:11 AM

LONDON (MarketWatch) -- Beazer Homes USA (BZH) said after the close on Monday that it's planning to take a $230 million fourth-quarter non-cash pre-tax charge to abandon land option contracts, to recognize inventory impairments and to record impairments and land option abandonments in joint ventures. It's cut 650 positions, or 25% of its workforce, and halted its 10-cents a share dividend. Preliminary figures showed home closings down 39% and new home orders down 53% on a 68% cancellation rate. The company is still working to complete restatements.

Jane Fox : 11/6/2007 9:05:34 AM

Dateline 24/7 Wall St.com - China raised prices on diesel last month. The hope was to cut back use of trucks and drive down demand. With the price of oil at $95, all those vehicles making deliveries were putting pressure on the country's supply. Raise prices, cut demand.

But, it could not last, even a few weeks. China needs all of the commerce built on moving goods around the nation and to ports to be sent out of the country. So, The Associated Press says that "China's two main oil companies have promised to step up diesel production."

China will need more oil to fulfill this promise and not all of it can come from domestic supply.

There is no requirement that China's two big state-owned oil companies, CNPC and Sinopec, have to make money. They can refine oil and sell the resulting products at a loss, if the central government thinks that will stimulate the economy.

All of this works its way into the global oil supply puzzle. China can leave market pricing aside and drive GDP in a way that few countries can. And, certainly no countries anywhere near its size can handle their energy needs this way.

Linda Piazza : 11/6/2007 7:51:21 AM

$6.750 billion in repos mature today. $35.000 billion are sloshing through the system, a little less than we've seen for about a week.

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