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Jeff Bailey : 11/20/2007 1:35:31 AM

YM currently up 88 at 13,081.

Keene Little : 11/20/2007 1:14:26 AM

We've got a bullish rally in equity futures overnight so if that carries over into the cash open then we could get an important break to the upside. If SPX can rally above 1444 it will break its downtrend line from last Wednesday and negate a more bearish wave count that I've got on the chart (dark red) and potentially have it in a more bullish price path at least through the holiday (pink): Link

If any morning bounce fails to take out 1444 and then drops to a new low then a key level to the downside is about 1426. That would be the next opportunity for a much bigger bounce (like the depiction in pink) but if it's followed by another corrective bounce then much lower lows will be next. The next day or two are going to be critical for the market.

The daily chart shows how a very bearish wave count could be developing (dark red) that suggests we could be setting up for a retest of the uptrend line from March 2003 (near the Fib projection and retracement at 1414) and then potentially a strong break below the August low: Link . That's obviously speculation at this point. Let's first see if the bulls can get it back above 1444 in the morning which could set the market up for a strong rally back up towards 1500-1515.

Jeff Bailey : 11/20/2007 12:52:16 AM

SPX's NH/NL measures were 8:87 today.

The 87 new lows still shy of the 118 observed on 10/24/07 (68:118).

Keene Little : 11/20/2007 12:45:53 AM

Tuesday's pivot tables: Link and Link

Jeff Bailey : 11/20/2007 12:45:54 AM

Nikkei-225 ($NIKK) Link ... Currently down 54 points at 14,989.

Session high/low has been 15,082 / 14,750.

Can't chart any further X's to 15,350 at this point, but see O's coming to 14,800.

The trade at 15,000 would be a "bearish triangle" pattern.

Jeff Bailey : 11/20/2007 12:22:46 AM

Japan's Ota: No Talk Yet Of Any Govt Plans To Support Stocks

DJ- Japanese economy minister Hiroko Ota said Tuesday she sees no impact yet of falling Japanese stocks on the nation's economy and that the government has no plans to act to support equity prices.

"At this point there's no talk of (the government taking) stock price measures," Ota told a news conference after a regular Cabinet meeting.

Japan's benchmark Nikkei 225 Stock Average Tuesday fell below the psychologically key 15000 mark, following Wall Street lower.

The Dow Jones Industrial Average fell 218.35 points overnight to 12958.44, the second time since Aug. 16 that the index ended below 13000. News that Goldman Sachs analyst William F. Tanona has cut Citigroup's stock rating to Sell from Neutral reinforced concerns over the U.S. economy, fueling investors' distaste for stocks and other risky investments.

OI Technical Staff : 11/19/2007 9:59:59 PM

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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 11/19/2007 5:51:38 PM

Countrywide (CFC) $10.57 -12.42% ... ticking $10.82 extended.

Jeff Bailey : 11/19/2007 5:51:08 PM

Moody's Affirms Countrywide "Baa3" Senior Debt Rating ... MarketWatch Story Link

Jeff Bailey : 11/19/2007 4:59:29 PM

Major Global Equity Indexes, Dollar Index, Oil (USO) and Gold (GLD) week-to-week changes at this Link

Jeff Bailey : 11/19/2007 4:47:58 PM

NYSE and NASDAQ Internals at this Link

Jeff Bailey : 11/19/2007 4:34:05 PM

Closing U.S. Market Watch found at this Link

Jane Fox : 11/19/2007 4:26:40 PM

Economic Reports for tomorrow include:

8:30a.m. Oct Housing Starts. Expected: +1.4%. Previous: -10.2%.

2:00p.m. FOMC Minutes.

Jane Fox : 11/19/2007 4:25:40 PM

Dateline WSJ - H-P's net income jumps 28% as revenue reaches $28.29 billion, helped by strong PC sales.

Keene Little : 11/19/2007 4:08:09 PM

As I showed earlier (3:03) if we see more selling this week then I see downside potential for SPX to the 1414-1515 area. As shown on the daily chart, that would also be near its uptrend line from August 2004. If we were to get that kind of decline it would very likely set up a multi-week rally into December (just not sure how high). At this point I'd like to see the market set this up. Link

Jane Fox : 11/19/2007 3:55:38 PM

Needless to say the bears are in the drivers seat are going to close the SPX under support at 1440. This is not good for us bulls but the charts don't lie and I know think we have a very good chance of revisiting August lows. Link

Linda Piazza : 11/19/2007 3:55:08 PM

I wanted to let everyone know that I will not be on the Market Monitor tomorrow.

Linda Piazza : 11/19/2007 3:52:53 PM

Another clue that the SPX, OEX and Dow at least hadn't yet established a firm uptrend could have been found in the TRAN's behavior after it retested its August low from the underside. It fell back again. However, so far, it has not yet reached a new day's low and actually looks slightly better from a Keltner outlook. This is just a short-term and tentative improvement, however. The TRAN would need to get firmly back above that August low to improve matters any. On the short-term, it would need to begin sustaining 15-minute closes above about 4485.75-4491.75. It's at 4457.73 as I type. So, there's no real prediction here yet. No sustained short-term uptrend is in place, but there are some tentative signs of improvement.

Keene Little : 11/19/2007 3:49:27 PM

The DOW is the weakest link here and not surprising when you see 9 of its 30 stocks down more than -3% (GM is down almost -9%). C is -5.8%, T is -4.6% and JPM is -4%. Kind of hard to compensate for those losses. MO is up +1% and MCD is almost +1%. If you can eat it, smoke it or drink it then buy it.

Jeff Bailey : 11/19/2007 3:49:10 PM

TRIN 1.82 ... "ditto"

Jeff Bailey : 11/19/2007 3:48:52 PM

NYSE A/D 547/2,763 ... just never could show any sign of bullishness from the open.

Jeff Bailey : 11/19/2007 3:45:34 PM

YM 12,973 ... would cover a YM short here on first kiss of WEEKLY S1 (12,975).

Jeff Bailey : 11/19/2007 3:40:04 PM

January Unleaded (rb08f) settled up $0.0085, or +0.36% at $2.3779.

Jim Brown : 11/19/2007 3:37:57 PM

That little ER dance between 752-758 has cost me a couple points over the last 90 min. Looks like I am going to remain flat until we see a breakout from this range. The bears/bulls are fighting a trench war here and nobody can get the upper hand.

Jeff Bailey : 11/19/2007 3:36:21 PM

January Crude (cl08f) settled up $0.80, or 0.85% at $94.64.

Keene Little : 11/19/2007 3:32:17 PM

I'm still playing with a couple of wave count ideas on the RUT but for now I'm noticing resistance at the bottom of its parallel down-channel from October, which it broke below this morning and is currently near 757. It needs to get above 760 to negate the bearish wave count I currently have on the chart. The top of the steeper down-channel from last Tuesday is also near 760 so that would be good confirmation for the bulls if they can get this back above that level. Otherwise down to 739 and potentially much lower. Link

Jim Brown : 11/19/2007 3:25:15 PM

Here we go again. Back long over ER 756 and based on the higher lows across all the indexes this one might stick. The 3:PM dump failed and that is a good sign for the beginning of the turkey trot.

Jeff Bailey : 11/19/2007 3:24:13 PM

Looking like a late Thursday 11/15/07 YM trade repeat.

Jeff Bailey : 11/19/2007 3:20:36 PM

Continuous Copper $0.04 box size Link

PINK dots are what would be considered bearish support, or base of channel (look for LONG column of X, then chart 45-degree down). Can still set an upside al_rt on December (hg07z) at $3.28.

Linda Piazza : 11/19/2007 3:19:16 PM

After closing four 15-minute periods above the 15-minute 9-ema, the SPX closed beneath it again on the candle completed at 3:15. What does this prove? Nothing definitive yet, except that no firm upward trend is yet being maintained. The SPX tends to bounce off this moving average when it's trending higher.

Keene Little : 11/19/2007 3:16:47 PM

With today's drop in the RUT I'm starting to get a very bearish feeling about that one. It has now differentiated itself enough from the others where it's hard for me to justify even a short term bullish pattern for this week. I'm trying to come up with a wave pattern that makes some sense but first stop, if it heads lower, could be around 739. And then there's some real bearish potential below that if the decline continues.

Never mind what I said about a Turkey run, at least based on what I see in this index. The bulls could save themselves if they make a run to another new high above this afternoon's (in which case run with the bulls) but if they drop to a new low from here then I've got a sense that it could be lights out for the bulls.

Jim Brown : 11/19/2007 3:13:06 PM

No post 3:PM crash? If we do get a rebound back over 756 on the Russell futures we could see some serious short covering since every spike has been sold all afternoon. Right now it does not look like the bulls are going to pull off a last minute rescue but it is still possible. My bias is still long over 756, short under 753.

Jeff Bailey : 11/19/2007 3:03:32 PM

Freeport McMoran (FCX) $92.58 -7.45% ...

Jeff Bailey : 11/19/2007 3:03:06 PM

Companhia Vale do Rio Doce (RIO) $33.41 -5.62% ...

Keene Little : 11/19/2007 3:03:05 PM

On this SPX 15-min chart, which is the same EW count I showed on the DOW 30-min chart earlier (2:21 PM), the move down from Friday's high might need one more new low for the 5th wave in that move. The downside projections are first to 1426.45 (5th wave = 1st wave) and if that doesn't hold then down to the 1415 area. But a rally above 1445 (1st wave low) would suggest the bottom is in and be looking to buy the dips from there, especially if it breaks its downtrend line, currently near 1447. Link

Jim Brown : 11/19/2007 3:01:33 PM

I am going to reverse to a Russell short under 753. The bears are crapping on my original plan.

Jeff Bailey : 11/19/2007 3:01:12 PM

December Copper (hg07z) alert! $3.00 -5.06% ... today's trade at $2.98 begins to far exceed the bearish vertical count of $3.12. Will have to turn to continuous copper, or that of spot prices. Here again is hg07z from 11/01/07 posting Link

Keene Little : 11/19/2007 2:57:20 PM

Yep, getting the same feeling Jim.

Jim Brown : 11/19/2007 2:55:12 PM

Sustaining an uptrend on the Russell Futures, even short-term, appears to be a challenge. Looking at the other indexes it appears we could be setting up for another end of day crash and burn. This midday bounce could just be wishful thinking and the bears are going to hit it hard in the last hour.

Keene Little : 11/19/2007 2:52:41 PM

Until SPX can rally back above 1445 there is still the risk that we have a 5th wave lower to finish the decline from Friday's high. Keep those stops tight for now.

Linda Piazza : 11/19/2007 2:49:42 PM

The TRAN is back to a test of the August low, but this time, it's doing it from the underside, having broken below it today. That low was 4486.60 and the TRAN is now at 4485.69, having touched 4489.19 a few minutes ago. The TRAN needs to get back above that August low to support any idea of a bounce, and it needs to turn daily RSI up quickly, too, supporting the idea that it might be building bullish divergence (lower price low with a higher RSI low).

Jim Brown : 11/19/2007 2:48:14 PM

With the breakout on the Russell Futures over 756 I am going to sit on this long on the hope the turkey trot will take us a couple hundred points higher on the Dow by Thursday. The small caps have been the weakest link over the last couple weeks and I am hoping a short squeeze will develop with any Dow move back over 13050.

Keene Little : 11/19/2007 2:44:55 PM

Any drop back down below that low just past 2:30 PM would have me a very nervous bull and probably have me off on the sidelines while waiting to see what's happening.

Jeff Bailey : 11/19/2007 2:43:19 PM

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

Have CLOSED out the MO-LN at $4.30 with MO at $73.70. Also the MFE-MH at $5.40 with MFE at $35.05.

Keene Little : 11/19/2007 2:43:18 PM

Pushing higher again after that quick pullback is a good sign for the bulls. It's looking like we might have seen the lows for the day if not for the week.

Jim Brown : 11/19/2007 2:35:40 PM

Russell futures 755 resistance held on the first test. Still some small cap sellers out there.

Keene Little : 11/19/2007 2:35:01 PM

It's possible that the current bounce is finishing up a 4th wave correction for the move down from Friday. That would mean we still need the 5th wave down and that's when the DOW 12900 support level would be in play.

Linda Piazza : 11/19/2007 2:31:51 PM

I, too, have been watching for signs of a bounce today and this week. Last week's weekly candles on the SPX and some other indices have suggested that as a possibility for the week. For that to happen, however, prices obviously need to start bouncing. That's simplistic, but one early change that needs to happen is that indices such as the SPX need to start sustaining values above some key benchmark. A short-term benchmark for me is the 15-minute 9-ema, and that's now at 1436.60 on the SPX. The probable low volume for this week might produce much volatility, however, and I still believe that only experienced traders should be trading the upside in such an environment.

Jim Brown : 11/19/2007 2:29:15 PM

I went long the Russell futures at 752.50 and if Keene is right about this being the setup for the annual Thanksgiving rally then I am going to try and stay long. The first test will be the current resistance at 755.

Jane Fox : 11/19/2007 2:27:06 PM

Us bulls are looking for the SPX to stay above 1440 for once it closes below this level I am no longer a bull and will have to start to grow claws. Link

Keene Little : 11/19/2007 2:21:36 PM

The EW pattern now has me thinking we could be setting up for the Turkey run after all. The move down from last Wednesday is looking like it could be wave-B of an A-B-C bounce off last Monday's low. Getting a new low below Monday's does not negate that pattern (it would be called an expanded flat correction). Two equal legs down for the DOW from last Tuesday's high would take it down to 12904 so support around the 12900 area would be a good opportunity to test the long side: Link

Whether it will get down there, or stop there, is the question at the moment. A break of the downtrend line from last Tuesday (a good rally from here--13100) would be the buy signal out of this pattern. Once a low is in then I'll get some upside Fib targets but based on support around 12900 we could see a rally back up to the 13500 area (which would then set up a large selloff into December).

Jim Brown : 11/19/2007 2:16:03 PM

The Russell futures have broken over 752 and are trying to rally. A move to 756 would be confirmation the rebound is not just a short-term event.

Jim Brown : 11/19/2007 2:14:30 PM

Buyers are testing resistance here with the Dow at 12995 and the Nasdaq just under 2600. Time for the bears to make a stand.

Jeff Bailey : 11/19/2007 2:15:04 PM

If you are a potential home buyer (especially a first time buyer, or first buy in 2007), check with you TAX advisor as to the timing of a home purchase at this point of the year. Ask about the deductiblility of mortgage lending fees, and tax-deductible interest into 12/31/07. It may be worth waiting until after the first of the year to close on a home purchase.

Jeff Bailey : 11/19/2007 2:11:04 PM

Refinance Mortgage Alert! ... If in an adjustable rate, I would STRONGLY suggest calls be made to your mortgage lender of choice.

Check with your investment advisor, but look to get FIXed and be as LONG a duration (30-years) this illiquid asset as possible.

Can always pay it off early.

Jim Brown : 11/19/2007 2:09:10 PM

Good retest of 748 on the Russell Futures. I am still looking for a breakout over 752 to go long.

Linda Piazza : 11/19/2007 2:08:43 PM

Neither the TRAN nor the USDJPY has yet been able to produce 15-minute closes above the 9-ema on their 15-minute charts.

Linda Piazza : 11/19/2007 2:07:12 PM

For the OEX, the index has been producing 15-minute closes above the Keltner support now at 667.25. For those who want a bounce, you want to see the OEX sustain 15-minute closes above the 9-ema at 669.73.

Linda Piazza : 11/19/2007 2:05:42 PM

So far, Keltner support now at 1430.62 is holding on 15-minute closes. If you're hoping for a sustained bounce, you want 15-minute closes above the 9-ema at 1435.01 and you want them to be sustained.

Jim Brown : 11/19/2007 2:05:17 PM

The yield on the Ten year note has fallen to 40.45% and the lowest level since Sept-2005. Bond buyers are saying the chances of a recession are very strong. Bond Yield Chart: Link

Jeff Bailey : 11/19/2007 2:05:15 PM

Swing trade call lower targer alert! ... for the Select Financial SPDRs XLF Dec $33 Call (XLF-LG) to $33.00 in the underlying.

XLF $29.50 -3.31% ...

XLF-LG currently $0.23 x $0.26.

Jim Brown : 11/19/2007 1:59:57 PM

After 30 min of trying to form a bounce the Russell futures were unable to break that initial resistance at 752. Looks like a retest of 748 is underway and a bull would want to see a higher low form here. The selling on the Dow slowed for a few minutes and a move back over 13000 would be a tentative buy signal. 12850 would be the next light support if 12950 breaks.

Jeff Bailey : 11/19/2007 1:56:25 PM

VIX.X 26.90 +5.53% ...

Jeff Bailey : 11/19/2007 1:56:13 PM

Simon Property Group (SPG) $91.52 -2.95% ...

Jeff Bailey : 11/19/2007 1:55:42 PM

Disclosure: I currently hold bearish position in SPG.

Jeff Bailey : 11/19/2007 1:55:26 PM

Swing trade put alert! ... for one (1) of the Simon Property Group SPG Jan $85 Puts (SPG-MQ) at the offer of $3.70. No stop for now, target $79.00 in the underlying.

Jeff Bailey : 11/19/2007 1:50:28 PM

Swing trade put close out alert! ... Let's close out the McAfee MFE Jan $40 Put (MFE-MH) at the bid of $5.40 with MFE $35.05 -4.59% ... and roll those gains to ....

Jim Brown : 11/19/2007 1:36:35 PM

This would be a good spot for a bounce. I would look to be long the Russell futures over 752 for an aggressive entry and over 756 for a more conservative entry. The Russell has been hit the hardest of the indexes over the last month and appears to be trying to form a bottom today at 750. Real support is really 740 and that would be the ideal entry on any continued selling.

Linda Piazza : 11/19/2007 1:32:24 PM

The USDJPY has also, like the TRAN, not been able to produce 15-minute closes above its 15-minute 9-ema, so there's still no change in tenor on that, either. Just a few minutes ago, the currency pair hit the 109.80-ish zone that marks the current level of descending support for the USDJPY. This descending support comes from a potential bullish falling wedge that I mentioned earlier. If the USDJPY starts falling quickly, it will break through that potentially bullish formation to the downside, an outcome that would not be bullish, of course. It's time soon for this currency pair to bounce if it's not going to violate that formation.

Keene Little : 11/19/2007 1:24:07 PM

If the DOW can get back above 13K it will also be a break of its downtrend line from Friday and indicate a bottom is likely in for at least the day. Until then the trend is clearly down.

Keene Little : 11/19/2007 1:18:15 PM

Unless this is going to sell off hard for the rest of the day, it should be probing for a bottom soon based on a potential 5-wave move down now from Friday. If anything I'd start watching for a buying opportunity now.

Linda Piazza : 11/19/2007 1:17:09 PM

Potential SPX support at 1530.53 on 15-minute closes. For the OEX, that's at 667.23. So far, our leading indicator index, the TRAN, is still not producing 15-minute closes above its 15-minute 9-ema, so there's no change in tenor yet.

Jane Fox : 11/19/2007 1:09:48 PM

The Ad line and volume are just too strong to override the divergences I am seeing on the VIX.

Jeff Bailey : 11/19/2007 1:08:58 PM

NAHB Index (update)

DJ- The gloom didn't lift this month over U.S. home builders, worried about problems in the mortgage market and bloated inventory of unsold houses.

The National Association of Home Builders' index for sales of new, single-family homes was unchanged at 19 in November, according to a news release Monday issued by the group.

However, the NAHB index for October was revised upward, to 19 from a previously reported 18.

The reading for November of 19 remains the lowest number since the inception of the index in 1985, the NAHB said.

"The message from today's report is that builders do not see any significant change in housing market conditions as compared to last month," said NAHB's chief economist, David Seiders. "While they continue to work down inventories of unsold homes and reposition themselves for the market's eventual recovery, they realize it will be some time before market conditions support an upswing in building activity - most likely by the second half of 2008."

Within the NAHB's housing market index, the component for present sales of single-family homes held at 18 in November.

Expectations for sales in the next six months fell to 25 from 26, the NAHB said.

"Consistent with what builders said in last month's survey, many are reporting that their special sales incentives are having limited success in terms of getting buyers in the door," said NAHB President Brian Catalde, a home builder from El Segundo, Calif.

He said media stories have soured buyers. "Builders are worried that the national media has tended to report negative housing stories as if there is one real estate market, when, in fact, there is no such thing - all housing markets are local," Catalde said. "As a result, some healthy markets are being unfairly impacted by this negative media coverage."

A sub-index in the report did turn up - the traffic of prospective buyers rose to 17 from 15.

The overall housing market index in October was based on a survey of 335 home builders, who answer questions about sales prospects now and in the near term. When the Housing Market Index exceeds 50, it means the number of builders who see "good" sales outnumber the number who see "poor" sales. The numbers used in compiling the index are adjusted for seasonal variations.

Jeff Bailey : 11/19/2007 1:05:20 PM

S&P 500 Index (SPX.X) 1,436.03 -1.55% Link ... critical level of support tested today.

Jeff Bailey : 11/19/2007 1:03:51 PM

NAHB Housing Index Unchanged at 19

Keene Little : 11/19/2007 12:57:41 PM

DOW is now testing last Monday's low. Bullish divergences still exist so it's hard to trust the downside here.

Jane Fox : 11/19/2007 12:51:56 PM

OK out at 13036.

Jane Fox : 11/19/2007 12:50:41 PM

Egads the trading Gods are smiling on us lately aren't they? Like I said even if we get stopped this has been a very good trade - to have stayed in it this long.

Jane Fox : 11/19/2007 12:48:30 PM

This is getting pretty funny. Made a low of 13037 and our stop is now at 13036.

Jeff Bailey : 11/19/2007 12:44:07 PM

UBS ADDS ADVISOR FROM MORGAN STANLEY

DJ- UBS hires Felix Erbring, a $2.2 million producer from Morgan Stanley. Erbring had assets under management of $200 million. He will be based in downtown Houston, which has two offices and 68 brokers.

Jeff Bailey : 11/19/2007 12:43:12 PM

CITI NAMES BERMUDEZ CHIEF RISK OFFICER

DJ- Citigroup names Jorge A. Bermudez chief risk officer to succeed Dave Bushnell, effective immediately. Bushnell, who is also chief administrative officer, is retiring effective Dec. 31.

C $32.33 -4.91% ...

Linda Piazza : 11/19/2007 12:43:01 PM

The USDJPY is still not maintaining 15-minute closes above its 15-minute 9-ema, with that now at 110.11 and the USDJPY now at 110.06. The formation in which the USDJPY has been declining today certainly begins to look a little like a bullish falling wedge, however. In 2003, we began to see a lot of bearish rising wedges actually break to the upside. That was telling us something. If we begin to see a lot of bullish falling wedges break to the downside, that might begin telling us something, but for now, for today, this is just a one-day formation on a 15-minute chart. So, watch it for a heads-up today, but keep in mind the patterns for comparison.

Jeff Bailey : 11/19/2007 12:42:00 PM

FANNIE FALLS MORE AFTER CLARIFYING ACCOUNTING

DJ- Shares fall 7%, adding to yesterday's 10% decline, after CFO says portions of the $670 million of credit loss provisions company charged off in 3Q would likely be recovered, but declines to give a percentage of loans that would eventually 'cure.'

FNM $37.79 -7.12% ...

Jeff Bailey : 11/19/2007 12:40:40 PM

CHINA SLAMS US COMMISSION REPORT

DJ- China lashes out against the U.S.-China Economic and Security Review Commission that accused it of currency manipulation and called for legislation imposing penalty tariffs on Chinese goods. China says the recommendations are 'libelous.'

Jane Fox : 11/19/2007 12:40:27 PM

If we get stopped on this trade I will say it was a very successful trade. We had plan and stuck to it and was able to reduce our risk.

Jeff Bailey : 11/19/2007 12:39:46 PM

DODGE SAYS ECONOMIC RISKS CLEARLY HIGHER

DJ- Bank of Canada Governor says central bankers are more worried about the impact of financial market turmoil on the world economy now than they were at meetings in Washington D.C. last month.

Keene Little : 11/19/2007 12:36:08 PM

Jeff, you had mentioned earlier (12:03) that NYSE program trading collars are in (with a drop of 190 points). I haven't checked to see if that's true but my understanding is that these trading collars are no longer being implemented, effective November 2nd. The circuit breakers are still in effect (for a 10% and 20% decline) but the trading collars are no longer in effect.

Jane Fox : 11/19/2007 12:24:34 PM

The VIX is telling me we are OK on our long positon and that we should reach full target. (The VIX whispers to me you know). If so that will be it for the day. 2 very long trades is enough to wear anyone out.

Jane Fox : 11/19/2007 12:20:49 PM

Raise stop to 13036. I will not let it get back to test daily lows again.

Jeff Bailey : 11/19/2007 12:20:32 PM

DUG $43.81 +0.25% ...

Jeff Bailey : 11/19/2007 12:20:13 PM

US Oil Fund (USO) $74.10 +0.27% ... comes to opening session high.

Jane Fox : 11/19/2007 12:18:09 PM

Just broke through 13061 and Oh my gosh it looks like we were saved by 1 tick AGAIN!

Jeff Bailey : 11/19/2007 12:18:04 PM

Treasuries have seen a notable reversal from price losses to gains. 5-year Yield ($FVX.X) now down 6.2 bp at 3.614%, 10-year ($TNX.X) down 3.5 bp at 4.115% and 30-year ($TYX.X) down 2.2 bp at 4.501%.

Jane Fox : 11/19/2007 12:16:34 PM

Taking another run at 13061. Will it make it this time?

Jeff Bailey : 11/19/2007 12:16:30 PM

Sector Losers ... Homebuilders -4.86%, Airlines -4.46%, Broker/Dealer -3.44%, Regional Banks -3.27%, Retail -2.43%

Jeff Bailey : 11/19/2007 12:14:29 PM

Sector Winners ... Utilities +0.07%, Nat Gas -0.05%, Software -0.39%, HMOs -0.41%, Oil -0.47% ...

Jane Fox : 11/19/2007 12:13:14 PM

I think I can I think I can. (I Hope I can) Yes Keene this is the slippery slope of hope.

Jane Fox : 11/19/2007 12:12:37 PM

Hitting 13061 again.

Jane Fox : 11/19/2007 12:10:05 PM

Almost back to breakeven now. How many took this trade and were able to hold on?

Keene Little : 11/19/2007 12:09:19 PM

Jane, that wouldn't be that slippery slope of hope would it? (wink)

Jeff Bailey : 11/19/2007 12:07:24 PM

Echostar (DISH) $48.40 +21.31% ... jumping on speculation that AT&T (T) $37.76 -4.42% may be about to buy the company.

Jane Fox : 11/19/2007 12:06:46 PM

I'm afraid I am into the Hoping and Praying mode now. (Smile)

Jane Fox : 11/19/2007 12:06:20 PM

Keene that is EXACTLY what I wanted to hear.

Keene Little : 11/19/2007 12:05:45 PM

Big bullish divergence on the short term charts with that last test of the low so if that holds then we should have at leat a larger bounce next. Techs continue to look more bullish.

Jeff Bailey : 11/19/2007 12:05:33 PM

Altria (MO) $74.00 +1.10% ... "X gets the square!"

Jane Fox : 11/19/2007 12:05:28 PM

Remember on Thursday when we missed been stopped out by 1 tick. Well the market remembers these things as well and must make it right. It must just tick us into a trade then stop us out and I fully expected that to happen on this trade.

Jeff Bailey : 11/19/2007 12:03:52 PM

Program trading collars in with NYSE Comp. ($NYA.X) down 190 points

Jane Fox : 11/19/2007 12:03:22 PM

We got ticked into a long at 13061 and now the market has come all the way down to 13024 with a stop at 13023.

Linda Piazza : 11/19/2007 11:56:31 AM

As Jane mentioned earlier, the USDJPY has served fairly well today as a predictor of equity price action. It, so far, has not been able to maintain a 15-minute close above its 15-minute 9-ema, something that those hoping for an equity bounce would like to see it do. That 9-ema is at 110.15 as I type, with the USDJPY at 110.11.

Keene Little : 11/19/2007 11:55:46 AM

The bounce in equities is looking corrective so far (overlapping highs and lows). But as long as it holds higher lows in its pullback then it could start to accelerate upwards. If long I'd cover as soon as a new lower low is made in this bounce attempt. In the meantime follow it up with your stop.

Jane Fox : 11/19/2007 11:45:56 AM

Ok Stop on the long from 13061 is 13023 and target is 13090. Let's hope it does not take as long as the last one.

Jane Fox : 11/19/2007 11:41:42 AM

I am now long from 13061.

Linda Piazza : 11/19/2007 11:40:28 AM

So far, the SPX is finding support on that Keltner support that I mentioned earlier. Why is this important? I mentioned earlier that there was the possibility that any breakdown below the rising trendline off the 11/12 low might be reversed once that Keltner support was reached, with that support catching or holding it. However, before that becomes a possibility, the SPX needs to first start closing 15-minute periods above the 9-ema, now at 1441.44, and then it needs to climb back above that rising trendline, now at just over 1445, and stay above it.

Jane Fox : 11/19/2007 11:40:28 AM

Long YM at 13061 with a stop just below daily lows.

Keene Little : 11/19/2007 11:38:06 AM

The strength is clearly in the big cap techs. NDX is holding above its uptrend line from last Monday through Friday's low.

Jane Fox : 11/19/2007 11:36:03 AM

ES made a new daily low BUT the VIX did not. This should be worrying the bears but so far the bulls have not been able to make anything of it.

Keene Little : 11/19/2007 11:21:25 AM

Got the predictable bounce off 13K so of course the big question is whether or not it will hold.

Jeff Bailey : 11/19/2007 11:19:36 AM

McAfee (MFE) $35.30 -3.91% ... has retraced just more than 61.8% ($35.36) of its 08/09/07 inflection low ($31.47) to recent 10/31/07 52-week high ($41.66). Juuuust undercutting its still trending higher 150-day SMA ($35.66) today.

MFE-MH currently $5.20 x $5.40.

Keene Little : 11/19/2007 11:15:50 AM

SPX didn't hold last Monday's low and now the DOW is next up--a test would be at 12983.

Keene Little : 11/19/2007 11:14:44 AM

Speaking of banks and home builders, mortgage companies aren't doing well either. An update on Countrywide Financial (CFC) shows it's working its way lower towards a downside target of 7.77. For the current drop I expect it to find support just below $10, bounce and then make a final low. If this pattern follows through it could actually be a buying opportunity although there are probably better places to put your money (other than stocks). Cash would be a good example (wink). Link

Linda Piazza : 11/19/2007 11:11:58 AM

At 1437.37 as I began typing this, the SPX is testing that Keltner support I mentioned earlier. If this breakdown below the rising trendline off the 11/12 low has been a false one, it would need to be shown by a 15-minute close back above that 1437.35-ish zone.

Linda Piazza : 11/19/2007 11:09:36 AM

The TRAN is still sinking. It's at 4467.78 as I type.

Keene Little : 11/19/2007 11:05:50 AM

Banks are under a lot of pressure again, down -4.1% here. Home builders are down -6.2%.

Jeff Bailey : 11/19/2007 11:02:08 AM

TRIN 1.59 ...

Jeff Bailey : 11/19/2007 11:01:56 AM

NYSE A/D 505:2,597

Jeff Bailey : 11/19/2007 11:01:30 AM

VXO.X 27.03 -0.25% ...

Jeff Bailey : 11/19/2007 11:01:10 AM

VIX.X 28.28 +3.09% ...

Jeff Bailey : 11/19/2007 10:59:44 AM

Swing trade call exit alert! ... with market internals and dynamics looking VERY bearish, I think it best to close out the Altria MO Dec $70 Call (MO-LN) at the bid of $4.30 with MO bumping against WEEKLY R1.

Look for a market-related decline that has MO pulling back below $72.50, then get bullish this 52-week high name, but roll to January expiration.

Closing out the MO-LN at the bid of $4.30. MO $73.70 +0.71%

Keene Little : 11/19/2007 10:55:03 AM

SPX retest of last Monday's low coming up. Makes for a good place to try a long play since you can place your stop relatively close. Bullish divergences suggest it could hold but understand you're trying to catch some falling knives here.

Jane Fox : 11/19/2007 10:53:26 AM

OK bears this is a HUGE warning. The VIX and S&P futures (ES) are out of sync and 9 times of 10 ES will end up following the VIX and that means the bulls are lurking. Link

Jeff Bailey : 11/19/2007 10:51:36 AM

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

Jane Fox : 11/19/2007 10:50:57 AM

I have been negligence in mentioning the AD line - it is a very bearish -2048.

Jane Fox : 11/19/2007 10:48:07 AM

TKS Linda sometimes these take a while.

Linda Piazza : 11/19/2007 10:46:31 AM

Congrats on the short play, Jane.

Linda Piazza : 11/19/2007 10:45:53 AM

I still believe that if you're trading the SPX, OEX or Dow today, you should also be watching the TRAN. Those of you in bearish positions do not want to see the TRAN bounce too hard. Those of you who might have elected at some point to test a bullish play want that strong bounce.

Jane Fox : 11/19/2007 10:45:36 AM

If you took profits at 13061 it was a 48 point trade. 48*5 = $240 per contract.

Jeff Bailey : 11/19/2007 10:44:07 AM

Swing trade put lower stop alert! ... for the Countrywide CFC Dec $15 Put (CFC-XC) to $12.70 in the underlying

CFC $10.80 -10.52% ...

CFC-XC currently $4.30 x $4.40.

Linda Piazza : 11/19/2007 10:43:35 AM

The TRAN is now below its 8/16 low. It's still within testing territory, but this is another bad sign, of course.

Keene Little : 11/19/2007 10:42:35 AM

The important test here will be SPX 1440.

Jane Fox : 11/19/2007 10:40:54 AM

OR take profits here.

Jane Fox : 11/19/2007 10:40:32 AM

Raising the stop to 13061.

Linda Piazza : 11/19/2007 10:39:37 AM

The SPX has now, of course, broken below the rising trendline off the 11/12 low. As I mentioned earlier, there's potential Keltner support just below this zone, so that a false breakdown that catches and holds on that support still remains possible. That support is at the current 1442.25 and then at 1438.45 on 15-minue closes. For now, though, this action is of course not what bulls want to see. Keep an eye on the TRAN, too.

Keene Little : 11/19/2007 10:37:39 AM

The way this is declining does not give me a bearish feeling here. It looks more like an ending pattern and so far is showing bullish divergences.

Linda Piazza : 11/19/2007 10:37:30 AM

The TRAN still tests that 8/16 low, but still manages to hold above it. Not far above it.

Linda Piazza : 11/19/2007 10:21:31 AM

So far, the TRAN still holds above its 8/16 low, but only barely. It's attempting another bounce as I type, being at 4503.99.

Jane Fox : 11/19/2007 10:21:26 AM

Lower stop to 13131 now.

Jane Fox : 11/19/2007 10:20:33 AM

NEW YORK (MarketWatch) -- Oil and oil services stocks turned negative along with the overall market early Monday as crude futures rose.

OPEC finished a summit in which differences between Saudi Arabia, Iran and Venezuela surfaced, particularly over the weakening dollar.

Linda Piazza : 11/19/2007 10:18:43 AM

Since about 7:00 this morning, the USDJPY has been forming a neutral triangle with top resistance now at about 110.38. There's further resistance at about 110.47, and the USDJPY would have to climb above that to confirm any upside breakout of that small triangle. It's support that's important, though, at this moment. The USDJPY is at 110.21, looking as if it's violating that rising support line. It needs to bounce quickly if it's going to avoid looking as if that's what it's doing.

Jane Fox : 11/19/2007 10:15:11 AM

Once we make new daily lows I will lower the stop sto 13143.

Linda Piazza : 11/19/2007 10:12:07 AM

What do I think of the TRAN's action today? (See my 9:56:14 post as a reference.) First, when an index that sometimes leads others (TRAN, RUT, SOX, etc.) retests a previous low, I think we have to consider the possibility that others might do so, too. It's a demonstrated possibility now, with the possibility that the TRAN was just leading the other indices where they, too, might go. So, the first thing I think we as investors and/or traders have to do is to consider how we want to position our portfolios, keeping that possibility in mind.

However, like all leading indicators--and here I'm thinking of the RSI and CCI--some signals can be false. Some of the "faster" indicators can react too quickly and too strongly. So what the TRAN tells us is that we need a plan, we need to be cognizant of possibilities, but we let price action in our preferred indices guide us as to whether that plan is put into effect.

Jeff Bailey : 11/19/2007 10:09:53 AM

CHINA INVESTMENT STARTS HIRING STAFF, ADVISERS

DJ- China's sovereign wealth fund embarks on a global hunt to hire staff and hire international consulting firms to help it decide its global asset allocation. China Investment has allocated a third of its $200 billion in funds to overseas investments.

Jeff Bailey : 11/19/2007 10:08:42 AM

BARCLAYS CAPITAL PLANS US, ASIA EXPANSION

DJ- Barclays Capital is forging ahead with plans to recruit more than 1,500 staff next year despite being forced to write off £1.3 billion as a result of the credit crunch.

BCS $40.89 -2.73% ...

Jeff Bailey : 11/19/2007 10:07:22 AM

US COMMERCIAL PROPERTY UNDER PRESSURE

DJ- The value of U.S. commercial real estate, which nearly doubled in the past seven years, is now starting to decline due to the credit crunch, according to a report set to be released today by Moody's Investors Service.

Jeff Bailey : 11/19/2007 10:06:20 AM

SWISS RE HIT BY SUBPRIME WOES

DJ- Reinsurer down 6.5% after it says that at the end of October it has accrued after-tax losses of CHF981 million on subprime exposure. Mark-to-market losses stand at CHF1.2 billion. Plans to continue a CHF6 billion share buyback.

Jeff Bailey : 11/19/2007 10:05:27 AM

CHINA FREEZES LENDING TO CURB INVESTING FRENZY

DJ- Chinese authorities slam brakes on bank lending, in latest attempt to curb the runaway investment threatening to overheat what is soon to be world's third-largest economy. Meanwhile, spokesman denies banks have been told to stop lending to curb investment boom.

Jeff Bailey : 11/19/2007 10:04:36 AM

LOWE'S NET FALLS 10%, CUTS OUTLOOK AGAIN

DJ- Home-improvement retailer earns $643 million or 43c a share, in 3Q hurt by a continuing housing correction, drought conditions in several markets and slower sales in the Gulf Coast. Lowe's lowers fiscal-year expectations due to woes in the housing market.

LOW $23.86 -4.59% ...

Jane Fox : 11/19/2007 10:03:57 AM

We are back to breakeven and can now put our stop just above the last swing high at 13153.

Jeff Bailey : 11/19/2007 10:03:22 AM

GOLDMAN SEES MORE CITI WRITE-DOWNS, DIVIDEND RISK

DJ- Citi shares fall 3.5% after Goldman Sachs recommends that investors sell their stock in the giant bank, saying it faces more write-downs of mortgage-related exposures and may have to cut its dividend to shore up its eroded capital ratios. Goldman estimates Citi will have to book $15 billion in collateralized debt obligation write-downs over the next two quarters.

C $32.77 -3.61% ...

Linda Piazza : 11/19/2007 10:02:22 AM

TRAN at 4491.92, sinking back toward its 4489.33 day's low.

Linda Piazza : 11/19/2007 10:01:10 AM

No repos have been announced this morning. That leaves a $5.250 billion net draw so far.

Linda Piazza : 11/19/2007 9:56:14 AM

The TRAN has not only dropped this morning: it's dropped into a 4489.00 low, a test of the 8/16 low of 4486.60. Equity bulls do not want to see the TRAN drop below that 8/16 low and stay beneath it. This is a dangerous point for both bulls and bears, though, as we have now, ongoing, a retest in one important sector of the August low. If the TRAN manages to hold up here, there could eventually be an automatic buying of this level, but whether a bounce attempt will be successful or not remains to be seen. I believe this is an important test.

Keene Little : 11/19/2007 9:56:12 AM

The bullish thing I see, although it could take another up-down sequence to play out, is on the RUT. It's possible it's going to form a descending wedge from Friday's high and continue to find support at the bottom of its parallel down-channel shown on its 60-min chart (posted last night, below). That would have it bottoming out near 756 later today. Expect a choppy day if that plays out before starting a stronger rally perhaps tomorrow.

Linda Piazza : 11/19/2007 9:50:55 AM

So far, the SPX bounced exactly from that rising trendline off the 11/12 low. The consolidation zone that's been building since Thursday afternoon just above the rising trendline has of course chopped up short-term charts, so I'm reduced to watching the channel's boundaries for clues. Each boundary (about 1445 on the downside and about 1464.50 or so on the upside) are surrounded by Keltner support and resistance (about 1439.80 on 15-minute closes on the downside and about 1469.48 on 15-minute closes on the upside), so these charts even suggest it's possible to see a false breakout one direction or the other, soon reversed when that Keltner support or resistance is hit.

Keene Little : 11/19/2007 9:49:28 AM

NDX found support at its broken downtrend line from last Wednesday's high through Friday's mid-day high, currently near 2035.70.

Jane Fox : 11/19/2007 9:45:40 AM

Lower stop to 13163

Linda Piazza : 11/19/2007 9:43:44 AM

The SPX draws nearer that rising trendline off the 11/12 low. That line crosses now near 1445. Keltner charts show potential (but weakening) support at 1442.86 and 1440.12 on 15-minute closes. This test of that rising trendline is happening now as I finished this post.

Keene Little : 11/19/2007 9:40:00 AM

If the DOW and SPX continue to consolidate between Friday's highs and lows then expect a lot of chop. If they break Friday's lows then we should see some follow through.

Jane Fox : 11/19/2007 9:39:16 AM

Short from 13109.

Jane Fox : 11/19/2007 9:35:51 AM

Target is 13035.

Jane Fox : 11/19/2007 9:35:36 AM

I will be taking YM short at 13109. STop will be 13184 so do not take the trade if this risk is too much.

Jane Fox : 11/19/2007 9:29:15 AM

The daily chart of Crude is telling me that Gold's support will hold and this may be a good spot to try a long Gold position. Link

Keene Little : 11/19/2007 9:22:34 AM

I'm a little surprised to see equity futures as negative as they are this morning. I was hoping for a small pullback (for cash to match what futures did at the end of the day on Friday) and then a rally leg up to finish a 5-wave move up from Friday afternoon's low. A deeper pullback, as suggested by this morning's futures messes up that pattern and leaves it less clear.

Best guess is that I think Friday's lows will hold and then we'll see another leg up in the sideways consolidation pattern we've been in since Thursday. That would look like a bearish continuation pattern.

Jane Fox : 11/19/2007 9:22:29 AM

Gold is giving us a very good idea of support although I think a retracement back to $740.00 would be a much healthier retracement. Link

Jane Fox : 11/19/2007 9:18:13 AM

The Russell 2000 index has resistance and support "zones" they are just not as clear as on the SPX charts. Link

Jane Fox : 11/19/2007 9:13:20 AM

If you see the SPX close above its resistance or below support then make sure the DOW does as well. Just like love and marriage "You can't have one without the other." Link

Jane Fox : 11/19/2007 9:09:14 AM

Daily chart of the SPX is telling me we have more downside. Resistance at 1490 was tested and the test was successful in that it did not break and that is bearish. It is looking more and more like the H&S pattern will have to play out before we make another bullish move however, I am still neutral and will remain neutral until I see which side of resistance (1490) or support (1440) SPX will close. Link

Linda Piazza : 11/19/2007 9:06:38 AM

Currently, SPX futures are a little more than $10.00 below fair value. Cash indices don't always follow through on pre-market action, but let's take a look at what would happen if they did. That would mean that the SPX would drop near 1448 near the open. That would keep the SPX inside a consolidation pattern's boundaries, with that consolidation pattern building since Thursday above a rising trendline off the 11/12 low. That consolidation pattern isn't strictly a flag, because the upper boundary is rising more quickly than the lower one, so that it has a slight broadening action. However, it's support, not resistance, that interests us right now. The supporting trendline that's been forming since 11/12 and was tested three times on Thursday and Friday is now at about 1444.50. So, unfortunately, a drop within that channel that doesn't plow through that support doesn't tell us too much yet. The weekly candle produced last week was one that suggested that this week could end up a positive week, but it of course did not promise that, nor that the "positive" action we see this week won't be produced by a candle with a long lower tail that dipped to deeper support before prices sprang higher.

The point of all of this? This morning's weakness in futures shouldn't encourage traders to draw too many conclusions yet. A bounce from the 11/12 rising trendline remains possible as does a resulting upside break through the upper boundary of the consolidation pattern that's been building since late Thursday. Just be cautious in your presumptions this morning, and if you're in bearish positions, be conscious of that support from about 1444.50, with Keltner support a bit lower, too, at 1441.08 on 15-minute closes.

Jane Fox : 11/19/2007 8:58:31 AM

Overnight the USD/YEN currency pair made a series of lower lows and highs keeping in step with the American equity markets so I believe this currency pair is still useful to us as an internal intraday.

The US$/Gold relationship became unlinked overnight with both moving in same direction. And then of course the crude/Gold relationship became unlinked as well as crude rose and Gold fell. Eventually these will right themselves but the trick is determining which market will be the one to play catchup. I think it will be Gold and that Gold will start to rally at some point today. Link

Jane Fox : 11/19/2007 8:50:58 AM

Good morning all. Overnight we had a series of lower lows and highs which means the bears are in control. The Russell 2000 futures (ER2) have tested their previous day lows and seem to have found support so far but on the other end of the scale is the NDX futures (NQ) which broke their PDHs overnight and have only retraced 38.20% of their previous day range (PDR). Link

Linda Piazza : 11/19/2007 8:01:43 AM

$5.250 billion in repos mature today. I'll let you know later what the Federal Reserve decides to do about repos today.

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