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

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Keene Little : 11/9/2007 4:20:17 PM

Yesterday's big bullish hammer candlestick at support for the DOW (200-dma and uptrend line from July 2006) had everyone and their brother calling for a strong rally today, basing that on the repeating pattern of the July-Aug decline. You know what happens when too many expect something and this market spanked those who bought the market based on that signal.

Now with the close well below that 200-dma support, near yesterday's low, you can bet the bears will be screaming about what a shorting opportunity this is. They could be right but at this point I'm thinking they could have their turn with the paddle on Monday just as the bulls got it today. At least that's the potential.

One other possibility, based on the strength of the decline into the close, is that we'll get just a small bounce and then another new low that sets up a strong bounce. Perhaps suck in a few more shorts and then jam the market higher. There is also the possibility that we'll get another up-down sequence to finish a descending wedge into a late-day low that then sets up a rally into the end of the week. We'll see how it sets up on Monday. Have a good weekend.

Keene Little : 11/9/2007 4:03:36 PM

And just to keep the bears from getting too cocky, are you ready for the possibility that we'll start another rally in the next leg up of a large rising wedge pattern into the new year? I can't say I see how this could possibly happen but logic is not something this market uses very often. Don't get complacent here. DOW weekly chart: Link

Keene Little : 11/9/2007 3:59:32 PM

DOW 13K coming up next. Nice millenium support (I would think).

Keene Little : 11/9/2007 3:51:56 PM

SPX is now back down to its broken downtrend line from Tuesday, at 1459, getting hit as I type. It could hold here into the close and perhaps set up a rally on Monday. I still think we're in a sideways choppy consolidation that could take us into Tuesday before the next leg down that sets up a stronger bounce into the end of the week.

Keene Little : 11/9/2007 3:49:36 PM

It looks like a little fear of the dark as we head into the close. Not many wanted to be in long positions over the weekend and I can't blame them. This market is risky to hold anything overnight let alone over the weekend and we've entered a period where surprises are likely to be to the downside.

Linda Piazza : 11/9/2007 3:46:37 PM

Reader Question: Would you ask Linda P which live feed service she uses?

Answer: I've just received this email, although I see it was originally sent at 10:17 this morning. My charts are through QuoteTracker and my feed through DTNIQ. QuoteTracker has a free service and a registered one that's cheap--about $7.00 a month, I believe, but you either have to provide your own feed or get it through your broker. My broker, brokersxpress, does not provide backfill or does for only two days, I can't remember which. So, I paid for DTNIQ feed, and it's cheap, too, maybe about $20.00 if you sign up through QuoteTracker, although I don't have the bill in front of me, and so am not completely sure. I believe IB provides backfill for ten days, perhaps, although I'm not certain of that. The backfill problem doesn't come up if you're using only daily charts, but is needed for intraday ones. The service has been great. It's not as user friendly as QCharts, but the feed has been reliable. I can't program much in the way some of you can, but I can get my nested Keltner channels.

Jane Fox : 11/9/2007 3:44:31 PM

Neither MACD nor RSI are telling me the US$ is finding a bottom. Since the MACD was not giving me a bullish divergence I loaded the RSI to see if it was but nope its not. Link

Linda Piazza : 11/9/2007 3:40:35 PM

I have to leave a few minutes early today, as I'm going out to town. Have a great weekend everyone. Traders need to be aware of the upcoming market-on-close orders that should be visible to big money in a minute or so. Begin making end-of-day decisions.

Keene Little : 11/9/2007 3:39:52 PM

RIMM has a similar pattern. The big dogs of the NDX who were leading the parade to the upside have now given very clear sell signals.

Keene Little : 11/9/2007 3:38:18 PM

GOOG gapped down today and hasn't been able to close its gap. Today's bounce looks corrective and looks lower from here. Same for AAPL. It finished its rally from August in a very clean 5-wave pattern that finished its final 5th wave of its rally from July 2006. This is a longer term short trade with an initial downside target over the next few months of $110. Link

Keene Little : 11/9/2007 3:32:26 PM

Looking at some of the other markets, it looks to me like the US dollar is in a corrective bounce off Wednesday's low. I suspect we'll see new lows in the dollar next week. That will likely push oil and gold back up for at least a retest of their highs if not new highs.

Linda Piazza : 11/9/2007 3:25:31 PM

The USDJPY has now risen to 111.03, where it tests resistance that extends up to about 111.21 on 15-minute closes. Whatever happens this afternoon, check the USDJPY Monday morning for some guidance, at least on likely equity first direction.

Keene Little : 11/9/2007 3:21:38 PM

Out of my trade with latte money. Just not interested in anything more today. Too much chop.

Linda Piazza : 11/9/2007 3:20:06 PM

If you're in bullish SPX positions, start deciding soon if you want to hold over the weekend. The SPX's 200-sma's and -ema's are still overhead, still perhaps resistance, although we won't know for sure until and unless they're tested.

Linda Piazza : 11/9/2007 3:10:05 PM

No new high (above yesterday afternoon's) yet on the SPX. Bulls want to see 1464.88 maintained on 30-minute closes. For a closer-in look, they would prefer 1467 support maintained on 15-minute closes.

OEX traders would prefer the 682.50 area preserved on 15-minute closes.

Keene Little : 11/9/2007 3:09:10 PM

I'm now waiting for a bigger bounce to correct the start of this decline and it looks like we got it so pulling my stop down to YM 13201, 3 ticks above that 13198 high. It's now a free ride--it'll either work into the close or I'll get stopped out for latte money.

Keene Little : 11/9/2007 2:54:37 PM

Lowering stop on YM short to 13224, 3 ticks to a new high. This trade needs to work from here or I'm back to flat. Too choppy if it continues higher again.

Keene Little : 11/9/2007 2:48:51 PM

The DOW hit its upside target and YM missed it by 2 ticks so far. Looks good for a short play, stop 20-30 points above. It's a quick test to see if the market rolls back over.

Linda Piazza : 11/9/2007 2:48:08 PM

There's now been another 30-minute close (matching yesterday's) above the 9-ema and the breakdown level. The SPX is testing Keltner resistance that stopped it yesterday, but it has more day to go now than when it tested it yesterday. Next resistance at 1474 and 1477.87 on 30-minute closes. The 15-minute chart gives a higher target--1483.35 as long as the SPX is producing 15-minute closes above the 1467 level. As I've said many times lately, don't trust targets in this environment, when markets are so iffy.

Keene Little : 11/9/2007 2:28:20 PM

Two equal legs up in the bounce of this morning's low for the DOW is at 13203 which is a level I'd watch carefully for a short entry (YM 13223). If it gets past there then gap closure would be next.

Keene Little : 11/9/2007 2:23:50 PM

Updating the SPX 60-min chart, if we get a little more rally this afternoon it could set up just a longer sideways consolidation (maybe a sideways triangle). If it's a 4th wave in the move down from Oct 31st then it should take at least as long as the 2nd wave correction (Nov 2-6) so perhaps sideways into next Tuesday. A sideways consolidation here could still mean whipsaws of 20 S&P points so be careful if this plays out. Link

Keene Little : 11/9/2007 2:08:53 PM

SPX is now hitting its downtrend line so let's see if this little buying spurt will continue or is just a head fake move at the 2:00 turn.

Jane Fox : 11/9/2007 2:08:26 PM

Also remember even if the VIX makes new daily lows the bears still have field position because the AD line is well under -1000.

Linda Piazza : 11/9/2007 2:07:04 PM

There's really nothing to say other than what I've said before. Other than gunslingers who don't need my advice, I wouldn't advise going long. Bears need to be careful as there are some slight firming-up signs, in case there's another late-day rally that continues to bring indices off their morning lows.

Jane Fox : 11/9/2007 2:06:29 PM

DAX making new daily highs here but we need to see the VIX to new daily lows before I will say the the tide is turning.

Jane Fox : 11/9/2007 1:58:57 PM

The VIX is hovering midstream but the AD volume is hovering at daily lows. AD ratio is climbing. Dax is making new daily highs. USDJPY has tested daily highs.

I truly cannot read these. Some days the internals talk to me but lately - since the markets have taken a turn downwards - I have been having a very hard time reading them.

Hopefully they will straighten out next week. Link

Keene Little : 11/9/2007 1:41:05 PM

The downtrend line for SPX from Tuesday's high is now at the day's high. If it manages to bounce back up to there I'd look to short it. But this is just a choppy day and has been tough to trade. That might not change for the rest of the day. Traders just might be tired of the whipsaws this week and off on the sidelines, anxious for the weekend to start. Monday is a bank holiday and the bond market will be closed but the stock market exchanges will be open, as will commodities and metals markets. So it could be a quiet Monday as well.

Linda Piazza : 11/9/2007 1:38:15 PM

The OEX is testing its 30-minute 9-ema, with that average at about 679.50. It's still in breakdown mode for now, though, below the 681.94 level that designates it as in breakdown mode on this chart.

Linda Piazza : 11/9/2007 1:34:00 PM

The USDJPY is now 110.99, just below 111.20-11.30 resistance on 15-minute closes.

Keene Little : 11/9/2007 1:16:18 PM

After what appeared to be a breakout attempt on the last high the market rolled right back over. It's taking on a consolidation look to it now and at least another test of this morning's low looks like a good possibility from here (maybe a little bounce first and then I'd look to sell it).

Linda Piazza : 11/9/2007 1:12:38 PM

The SPX still can't close above that 30-minute 9-ema, but it's still trying to hold onto 15-minute support. The 9-ema is at 1459.62 on the 15-minute chart, so the SPX is a little below it, here two-thirds of the way through this 15-minute period. However, prices often criss-cross it during the lunchtime lull period, so that's not a significant sign yet. Conclusion? No significant change in tenor yet, but bulls are still trying.

Jane Fox : 11/9/2007 12:55:09 PM

Adding to Linda and Keene's comments. Here are some jtHMA charts of C. Can you say bearish? I would be waiting the for the daily charts to turn back green then take a short once the 120/60 minute turn back red. This is called selling a rally and the only trade I would take based on the fact that both the monthly and weekly charts are red. Link

Keene Little : 11/9/2007 12:45:57 PM

Adding to Linda's answer to the question on C (12:11), here's a monthly chart with a downside projection at 22.35 based on a A-B-C correction the bull market rally to its 2000 high: Link Monthly RSI is deeply oversold here.

Wave-C = wave-A at 22.35 and I'm showing the wave count that could get the stock there--the drop from November 2006 needs to be a 5-wave move and it calls for stair-stepping lower into next year. A bottom could be found much faster than what I'm showing on the monthly chart and this weekly chart shows perhaps a more realistic idea: Link . The weekly oscillators are also significantly oversold and are in some serious need of relief.

Jane Fox : 11/9/2007 12:44:17 PM

Remember when I was talking about the market will do whatever it can to hurt as many as it can. Well all the bearishness today got us all to thinking we were headed lower but opps fooled us AGAIN. Link

Linda Piazza : 11/9/2007 12:38:58 PM

The SPX found support again on its 15-minute 9-ema on a 15-minute close, although it certainly looked doubtful. Now it's peeking above its 30-minute version, but there is a whole lot of minutes left in this 30-minute period. So far, so good, though, for those in bullish plays. They need that 30-minute close above 1462.58, though, something that bears would rather not see happen.

Linda Piazza : 11/9/2007 12:19:13 PM

The SPX has now begun closing 15-minute periods above its 9-ema on that chart, at about 1458.50, but it's testing it again. What it has not done is close a 30-minute period above the 9-ema on that chart, now at 1461.14 or erase its breakdown status on that chart. It needs to do both if bulls are to gain much hope. I unfortunately just don't see a lot of definitive signs of strength yet, but the SPX is holding up relative well above the support zone, too, allowing Keltner support to strengthen just a little. An iffy day.

Linda Piazza : 11/9/2007 12:11:28 PM

Subscriber Question:: Can some comment on "C" (citigroup) stock and their prices targets? If you cannot comment on individual sector maybe you can comment on sub-prime issues and how it will affect the sector. And can they comment on financial sector if they cannot comment of individual stock.

Answer: I apologize for being so late answering this email, but I mistakenly thought it had already been answered.

Price targets. I typically start with a look at the point-and-figure charts, just to get a frame of reference. The current bearish price objective as per Stockcharts.com was $35.00, a price that has been met. C is below the bullish line, establishing a bearish one. So, that gives us a frame of reference.

Then, when looking for targets and potential support/resistance levels, I prefer my nested Keltner charts: Link What does it mean that C is in breakdown mode? Most importantly, it means that I don't have any new targets to give you. When looking at a long-term chart, I of course see a lot of congestion from about 31 to 26.50 and maybe even down to the September 2002 low of 24.42, so it's possible that C could slow its descent now as that congestion is approached or entered. Of course, any retest of the 24.40-27.00 zone, if it occurs, is likely to see some buying interest, but whether C drops that far or if the buying interest results in another big rally, I can't say as C is in that breakdown mode.

C's strong downward momentum is demonstrated by the breakdown. That breakdown of course also means that C is extremely oversold, but we need to keep in mind that Keltner channels were first created to identify upside breakouts or downside breakdowns so that they could be traded. Such trades have a high drawdown rate (you're stopped frequently, several times in a row) but they are believed to be lucrative over the long term as long as losses are kept small because the winners, when they occur, tend to win big. The strong momentum can carry prices much, much higher or much, much lower, all the while producing bullish or bearish divergences.

Conclusion? Unfortunately, a short play looks dangerous but a long one even more so, a possible exercise in trying to catch that proverbial falling knife. This sounds as if I'm just refusing to make a comment, but I don't play breakdowns outside the widest Keltner channel because they tend to be whipsawed too much. But we're seeing a visual demonstration of how strong the downward momentum is, too, so long is pretty dangerous.

I have no idea whether the subscriber is thinking long or short, but if C should continue to bounce, this Keltner channel suggests that $35.00-36.00 could be resistance on a weekly close. If it were to continue the current bounce, a Fib bracket also pinpoints potential resistance at just above $37.00, so I would extend that possible $35.00-36.00 resistance zone to $35.00-37.00 on weekly closes. (That means that they could be pierced during the week, but if the week closes below them, the resistance has held.) If C can manage a weekly close above that zone, the weekly Keltner chart then sets an upside target near $42.00-$43.00, where resistance might be found on weekly closes. Currently, the $41.50-43.00 zone is another zone where several types of potential resistance converge.

Keltner lines are dynamic, so over the weeks it might take for C to climb that far, if it did, those targets would have changed. Also, this is a larger overview and there would likely be a lot of back and forth and setting and resetting of targets before any ultimate target on a weekly chart was reached. Do remember that no such upside target has been set yet and C remains in breakdown mode. I don't see anything that would encourage me to test a long right here, but then I'm known to be cautious.

The subprime problem. I'm a technical trader, but I do of course try to educate myself as much as possible. Today, we're learning that Mizuho Securities, one of Japan's biggest, may have to delay a planned January merger with Shinko Securities due to a hit Mizuho is taking on the subprime exposure. For a long while, it was thought that Japanese firms were more conservative and probably didn't have big exposure. Now we're learning otherwise. How much else is there that we don't know?

Keene Little : 11/9/2007 11:53:19 AM

If this morning's high is exceeded then I see the possibility for at least a retest of yesterday afternoon's high (so obviously closure of this morning's gaps if that happens). Otherwise we could stay trapped in today's trading range with the possibility for one more minor new low (which should be accompanied with lots of bullish divergences and an opportunity to buy it).

Keene Little : 11/9/2007 11:29:43 AM

Now I'm wondering if the current bounce is going to lead to one more new low to complete a small descending wedge pattern from yesterday afternoon's high. Beware the chop until this morning's bounce high is exceeded--once that happens then it will be time to buy the pullbacks.

Jane Fox : 11/9/2007 11:27:48 AM

In my 10:55 post I mentioned that the AD volume ratio was not making new daily lows and that the AD volume may be making a bottom, well it has and the markets are into a corrective bounce.

Linda Piazza : 11/9/2007 11:24:45 AM

The SPX has not maintained that 9-ema on 15-minute closes nor even the lower support I'd mentioned earlier. It also came dangerously close to confirming that little H&S that I mentioned in my 11:02:57 post. It just hit the neckline but then bounced immediately. This one of those days we all hate, when one thing appears to be most likely, and two minutes later something different appears most likely. If the H&S should be confirmed and if prices don't immediately reverse, the downside target would be at about 1430.25 or so, depending on where you put the neckline. However, I would be wary of believing any short-term targets, bullish or bearish, today.

Keene Little : 11/9/2007 11:07:29 AM

No strength to this market but some bullish divergences suggest we could be seeing a bottoming process here.

Linda Piazza : 11/9/2007 11:02:57 AM

The SPX did manage a 15-minute close above the potential support I mentione din my 10:56:04 post. There's a little continuation-pattern H&S on the SPX's 15-minute chart, with the neckline off course near 1449.50-1450. That's even more reason that bulls would like to see that support hold on 15-minute closes. The support is now at 1455.29.

For you bears out there, you want to see the SPX maintain 30-minute closes beneath the 30-minute 9-ema, now at 1461.86.

Jane Fox : 11/9/2007 11:01:34 AM

McMillan's weekly commentary - The S&P 500 Index ($SPX) was the lone holdout against an increasingly negative array of technical indicators. And, for a while, it was doing a stellar job as the index bounced off the 1490 support five times between October 22nd and November 5th. All the while, the underpinnings were deteriorating as $VIX and put-call ratios issued sell signals. Finally, on November 7th, $SPX plunged below 1490, and a torrent of selling erupted after that, sending $SPX down to 1450 in just a few hours' trading.

The equity-only put-call ratios have been toying with sell signals for a couple of weeks. However, just last week, the weighted broke down to new lows, canceling out any previous sell signals. But, just as swiftly, that ratio began to rise and a sell signal was confirmed earlier this week. That accompanies the double sell signal from the standard ratio.

Market breadth has been quite poor. It is oversold now, but that doesn't mean much, except that short-lived rallies are possible.

Volatility indices ($VIX and $VXO) started to head higher on November 1st. It made new post-August highs and bearishly established an uptrend. As long as $VIX continues to climb, it is considered to be on a sell signal. What we're now watching for, as a potential reversal to this bearishness in $VIX is for a spike peak on its chart.

In summary, we've turned bearish. When $SPX was above 1490, we were inclined to give the bullish case the benefit of the doubt and that was the correct inclination, as evidenced by repeated rallies off of support or out of oversold conditions. But now that the trend of $SPX has rolled over, we have the opposite take on things: rallies towards 1490 are meant to be sold, and oversold conditions are to be viewed with caution.

Linda Piazza : 11/9/2007 10:56:04 AM

SPX bulls would like to see the SPX maintain 15-minute closes above 1455.45 as a first step in steadying. For OEX bulls, the OEX is weaker on a Keltner basis. It's already below that Keltner level at 679.63 that bulls would like to see hold on 15-minute closes.

Jane Fox : 11/9/2007 10:55:58 AM

AD volume continues to make new daily lows but the AD ratio is climbing. That tells me the AD volume may be finding a bottom. VIX is hovering mid range so not talking today.

Keene Little : 11/9/2007 10:45:41 AM

Not a whole lot happening here. Unless the bulls can get something started I'm going to start feeling more bearish about this consolidation. Still long against this morning's low but I may not let it go back down for another test. Flat is probably a good position.

Linda Piazza : 11/9/2007 10:31:43 AM

No confirmation of the potential reversal signal on the TRAN's 15-minute chart. It hasn't closed above the 9-ema yet. The rise so far, in fact, looks a bit choppy, so it's not inspiring great confidence as yet.

The USDJPY is above its 9-ema and may even close this 15-minute period above it, a hopeful if tentative sign for those with bullish hopes.

Remember that I'm not advocating bullish positions, although we're going to have a sharp relief rally come along sometime or another, but that doesn't mean that I won't point out signposts to watch for those who are in bullish positions. I think the risk of the markets keeling over at some unknown level outweighs the risk of not participating in a relief rally. For bears, your risk is that if a rally catches hold, it could be brutal, as relief rallies often are.

Linda Piazza : 11/9/2007 10:26:05 AM

I closed out another of my DEC bull call spreads this morning for $0.10. It was an SPX 1675/1685. I had to leg out of it, buying-to-close the 1675 first for $0.15, and then selling-to-close the 1685 for $0.05. Remember that you absolutely must BTC the sold strike first. I know this legging out particularly concerns some subscribers because I could have BTC the 1675 for $0.15 and then the SPX might have dived and I might have been stuck with the 1685, not able to get rid of it. The thing is, though, that there's no bid on the 1685, and I tried all day yesterday to close the whole spread at once for $0.15, an amount of my profit that I was willing to give up to close this spread so long before DEC's opex and remove that risk. I couldn't close it yesterday, and I'd been told before by someone at my brokerage communicating with the trading desk that it was better just to BTC the sold option when there's no bid on the bought option. So, since I was willing to give up $0.15 of my collected credit anyway, I BTC that 1675 for $0.15, and then put in an order to STC the other for $0.05.

I opened up a can of worms once before when I mentioned that readers might consider whether they wanted to remove some risk from some of their positions, but others wanted me to give them some idea what I was doing in December. So, that's all I'm doing. I'm certainly not setting myself up as an expert and have to again reiterate that I took a huge loss in the middle of this year with a hedging technique I was trying out in my quest to fulfill this year's trading goal to find an exit (profit or loss) that worked for me. You don't want an expert who is still experimenting herself! I'm not in competition with Mike Parnos, a laughable idea, but simply saying that I've learned in my quest that there are lots of ways of thinking about closing out credit spreads, either when they're profitable or when they're losing, and you should maybe go on your own quest and find out what works best for you. (Just take it from me: don't try hedging when the sold strike is crossed as your technique for a going-wrong spread because it can fail miserably. Smile.)

Keene Little : 11/9/2007 10:25:31 AM

WASHINGTON (MarketWatch) -- Consumer sentiment continued to slide in November, according to a monthly survey released Friday by Reuters and the University of Michigan. The November consumer sentiment index was 75.0 -- the lowest level since October 2005 -- compared with 80.9 in October. The consensus forecast of Wall Street economists had expected sentiment to hit 79.5

Linda Piazza : 11/9/2007 10:12:10 AM

Now the TRAN has a potential reversal signal on its 15-minute chart. I'd think that the TRAN would, at the least, need to close this 15-minute period above the 9-ema at 4644.52 to even begin to confirm it, but this does point out the caution that bears need to exercise today. The VIX is dropping but hasn't yet dropped below that 26.70-ish zone (that may turn out to be support). The USDJPY is climbing, but hasn't yet breached 111.00-ish resistance much less that at 111.25 or 112.25. So, there are incipient signs that a rally could be starting but no proof yet.

Keene Little : 11/9/2007 10:08:37 AM

If price continues to consolidate much longer at this morning's lows then we can expect lower prices but so far the retest looks lke it might hold.

Linda Piazza : 11/9/2007 10:00:28 AM

On the other hand, another sort of indicator I watch--the USDJPY--can't confirm its potential reversal signal on the 15-minute chart, and that's weighted toward the bearish side of things.

Linda Piazza : 11/9/2007 9:59:29 AM

The TRAN is still maintaining support on 15-minute closes above 4590.47 support. As long as it's doing that, there's still some question in my mind about whether bears are going to get their wish for much more SPX, OEX or Dow downside. I'd be worrying about bounce potential if the TRAN starts bouncing from this level, so if in bearish positions, I'd know where my stop should be and honor it. It's just really iffy out there.

Jane Fox : 11/9/2007 9:54:39 AM

AD line and volume are making new daily lows here and until they turn around the bears have control. The VIX is bearish but not making new daily highs - yet.

Linda Piazza : 11/9/2007 9:53:46 AM

The USDJPY is setting up a potential reversal signal on its 15-minute chart, but it hasn't gotten very far toward confirming that reversal signal yet. It's at 110.77 and I'd think that it probably needs to close this 15-minute period higher than that to confirm it. It's got potential resistance at 110.94 on 15-minute closes. Equity bulls want to see further bounces in this currency pair; bears do not.

Keene Little : 11/9/2007 9:53:04 AM

We've got a test of yesterday's lows for the DOW and SPX with bullish divergence so I'd consider buying any pullbacks here. Scalpers only but in this volatility a long scalp could still be good for a 200-point DOW bounce. Test it against this morning's low--any lower and there's no telling how far down we're going.

Linda Piazza : 11/9/2007 9:51:47 AM

The bounce from equal or near equal lows is a given. What happens next isn't. Be careful out there, whichever side you're taking.

Linda Piazza : 11/9/2007 9:49:02 AM

The Fed has announced a repo in the amount of $3.250 billion, leaving a net drain of $0.500 billion.

Keene Little : 11/9/2007 9:47:46 AM

The techs continue to take the brunt of the selling, especially the big guns who were the momentum drivers of the narrow-based rally. GOOG has now broken its uptrend again from September so now it will be interesting to see if it becomes resistance, currently near 690. Link

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

The TRAN is holding 15-minute Keltner support, at least so far.

Linda Piazza : 11/9/2007 9:40:56 AM

I wrote in my Wrap last night that, although I believe we're still in a sell-the-rallies mode and I wouldn't suggest that anyone other than gunslingers who can take the financial and emotional stress be long, bears should be particularly careful today. So far, that's not playing out, but here are some things bears don't want to see: the VIX drop back below about 26.70 and stay there as equities bounce from equal or slightly higher lows or the USDJPY start a strong bounce off its current sub-111 level.

Keene Little : 11/9/2007 9:39:27 AM

The DOW and SPX are right back down for a potential retest of yesterday's low. We'll find out quickly if they're going to hold. This is when we could experience some opex volatility.

Jane Fox : 11/9/2007 9:37:21 AM

AD line is a very bearish -1969.

Linda Piazza : 11/9/2007 9:36:26 AM

USDJPY at 110.71, dipping further.

Linda Piazza : 11/9/2007 9:35:25 AM

Potential 15-minute Keltner support for the OEX has already been breached, but there hasn't been a 15-minute close below it, of course. That support is at 679.50 and 680.94. Bulls would like to see a 15-minute close above the highest of those two. OEX at 678.70 as I type.

Linda Piazza : 11/9/2007 9:34:06 AM

The SPX gapped back below its 30-minute 9-ema after finally closing above it yesterday. That average is at 1467.28. Those in bullish positions would like to see a quick bounce and 30-minute close above that average. When I roll back to the 15-minute chart, I see potential support near 1458.60 on 15-minute closes. That will also be near the rising trendline off the 1:15 low yesterday afternoon, so those in bullish positions want that support to hold and the SPX to bounce from there. Bears, of course, do not want that support to hold.

Keene Little : 11/9/2007 9:25:23 AM

These overnight moves in the futures sure have been making it difficult to day trade this market. Guess right and be prepositioned for the move and you'll do well. Hold a position overnight without a stop and you could get creamed. We've got another very negative start to the day and there's a definite pattern of distribution following these late-day rallies. But be careful about a potential quick reversal back up this morning if we've got a 1 to 2-day consolidation ahead of us before the next leg down (which should then set up another bounce into opex).

Linda Piazza : 11/9/2007 9:30:00 AM

If you've checked charts or looked at the banner crawling across CNBC's screen, you know that the USDJPY dropped heavily overnight. If you've been reading my posts or Wraps since early in the year, you know that's typically not a good thing for the U.S. equities. It's a little suspect because the biggest drop occurred at or just after the closing of the Nikkei last night. Just to indicate how serious the drop was, however, the USDJPY is now below its August 17 low, at levels not seen since May of last year. This is serious because over the last few years, the USDJPY has sometimes led U.S. equities. You can bet that the Nikkei News Online (www.nni.nikkei.co.jp) is carrying headlines about the yen's rise against the U.S. dollar (along with headlines about Mizuho Securities' subprime loss that's to top 100 billion yen, causing problems with its planned merger with Shinko Securities). The USDJPY has begun a tepid bounce this morning, but it's more of a sideways/sideways-up move, and it needs to do better than that. It needs to bounce above 112.25 resistance, at the least. It's at 111.10 as I type.

Jane Fox : 11/9/2007 9:20:44 AM

It does look like Gold is making a top and that it could fall back to at least the 23.6% fib retracement at 800.00. If it does and I see support building there I will be adding to my long Gold position. I sure wish the ETF, GLD had options but alas it does not. Another way to take a long Gold position is with the ETF, GDX the Market Vectors Gold Miners index but it is based on stocks and therefore influenced a great deal by what the stock market does and I like the pure play, futures or an ETF that is based on the futures like GLD. Link

Jane Fox : 11/9/2007 9:14:14 AM

The $/YEN currency pair is supporting the bearish I am seeing in the American index futures.

Gold/Crude /US$ relationship is doing well. Gold down, Crude down and US$ (against a basket of currencies) up. Link

Linda Piazza : 11/9/2007 9:13:59 AM

A repo of $3.750 billion matures today. I'll check later to see if any new repos have been announced.

Jane Fox : 11/9/2007 9:10:29 AM

I expected today would be bullish based on the dojis formed yesterday and that the SPX would/could retest resistance at 1490 but the overnight session was has been anything but bullish. The NDX futures (NQ) have even broken their previous day lows. Link

Jane Fox : 11/9/2007 9:08:17 AM

WASHINGTON (MarketWatch) - A surge in exports in September helped push the U.S. trade deficit down to $56.5 billion, the lowest in more than two years, the Commerce Department reported Friday.

U.S. exports rose 1.1% to a record $140.1 billion on record shipments of capital goods, industrial materials and foods.

Boosted by record imports of capital goods and an increase in the value of petroleum shipments, imports into the United States increased 0.6% to $196.6 billion, the second highest ever.

The weaker U.S. dollar has been boosting exports, especially in the past three months. U.S. farmers and producers of other commodities are benefiting from higher prices and a weaker dollar.

At the same time, imports have slowed because of sagging growth in the United States and because imports are relatively more expensive.

Compared with a year ago, the trade deficit has fallen by about 14%, with exports up 14% and imports rising 4.9%. The figures are not adjusted for price changes.

Jane Fox : 11/9/2007 9:07:18 AM

WASHINGTON (MarketWatch) -- Prices that U.S. residents paid for imported goods rose 1.8% in October, the biggest increase since May 2006, the Labor Department reported Friday.

Imported petroleum prices rose 6.9%, but prices of other goods rose a more moderate 0.5%.

Excluding all fuels, import prices rose 0.3%. Export prices, meanwhile, jumped 0.9% in October, including a 3.9% rise in agricultural prices.

Excluding agriculture, export prices rose 0.5% in October.

In the past year, import prices are up 9.6%, including a 41.4% increase in petroleum prices.

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