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Jeff Bailey : 11/30/2007 12:13:48 AM

11/27/07 ... 2 million shares of DIA at $129 at 11:00 AM EST. Some unusual DJX option action at $130 strikes the very same day.

A bear "idiot" or a bull "idiot?"

Jeff Bailey : 11/30/2007 12:04:04 AM

Well, I'd like to know what "idiots" have driven RIO, SPG and SFB-XL's against me the past couple of day.

Need more "idiots" for CHA.

Another $2 and I'll throw an "idiot extravaganza" for MO bulls.

Jeff Bailey : 11/29/2007 11:58:22 PM

Forex Global Economic Calendar Link

Jeff Bailey : 11/29/2007 11:57:36 PM

YM ticking 13,395 as I type.

Jeff Bailey : 11/29/2007 11:57:28 PM

Hmmmm ... YM jumped from 09:25 PM EST (YM 13,341) just as Japan released it Manufacturing PMI 50.8%, which was above the forecast of 49.5.

Then at 07:30 PM EST Core CPI y/y +0.1% vs. 0.0% consensus. Tokyo Core was +0.1% vs. consensus of +0.1%. Overall Household Spending y/y +0.6% vs. consensus of +0.5%.

Bernanke wasn't scheduled to start speaking until 08:00 PM EST. YM was 13,414. Could be Japan's economic data, or printed release of Dr. Bernanke's speech.

Jeff Bailey : 11/29/2007 11:43:40 PM

I think one "difference" has been that the rate cuts this time are for VERY different reasons than in the past.

From the Fed minutes and statements, the cuts we're currenlty seeing are to try an pump liquidity into the subprime and even the prime credit markets in an attempt to cushion economic slowing.

One might say we're seeing a more "preemptive" than "reactive" Fed.

January 3, 2001 Fed minutes Link 30/31 2001 minutes Link

March 20, 2001 Link

April 11 and 18th, 2001 Link

May 15, 2001 Link

June 26/27, 2001 Link

Jeff Bailey : 11/29/2007 11:05:09 PM

CME's Feb'08 and May'08 Housing Futures Table that I keep at this Link

Regional New Home Sales from Thursday's MM at this Link

Keene Little : 11/29/2007 11:01:15 PM

Friday's pivot tables: Link and Link

After the Dell earnings and watching its stock get pummeled after hours (all the way back down to below last Friday's low) I thought we would see a negative open on Friday. Then apparently this evening Bernanke added to the rate cut speculation with a "maybe, might, could happen, you never know" statement after citing continued pressure from the housing market and credit contraction and that was immediately interpreted to mean another rate cut is coming. Must be a good reason to rally--DOW futures shot up over 100 points on the news.

You can't argue with idiots because they don't listen to reason but the market really doesn't get it. If we rally on a rate cut it will be a great short play setup. But don't get in the way of these traders who think otherwise. As a reminder, here's how well the market did in 2001 following the 1st three rate cuts (thanks to Austin for his annotated chart): Link

It's a little hard to see but the 3rd cut in March 2000 was followed by a 100-point drop in the SPX (1000 points for the DOW). There was a 22% drop in the market following the 2nd rate cut. Following the 5th rate cut there was a 28% decline. Please show me how rate cuts are bullish for the stock market. It's been no different so far after this year's cuts and I strongly suspect we'll see similar declines.

So how the market will open Friday morning is anyone's guess. I'll just go with what the charts are currently showing me. As I was showing for SPX most of Thursday it looks to me like we should get another push higher on Friday out of a sideways triangle (maybe a little pullback first thing in the morning to set up the rally leg). The upside projection (for equality between the 1st and 5th waves) is around 1485, as shown on this 30-min chart: Link

The 60-min chart shows that move to then be followed by a larger pullback (I show a compressed time frame but the actual time frame for the pullback would likely mean a decline through the first week of December): Link

The NDX leaves me guessing as to whether or not we'll see a brief move higher, similar to the one for SPX, or if it's finished or will soon finish its rally leg from Monday. Notice price has been struggling at the Fib projection for two equal legs up at 2098 and the top of its flag pattern for the bounce from Nov 12th: Link

If NDX can press a little higher, the daily chart shows potential resistance at its 50-dma at 2116 at which point it could be set up for a strong decline (dark red) or at least a larger pullback (green): Link

I looked at a couple of tech leaders to see if they'd provide some clues, including DELL since they reported and dropped hard after hours: Link . After retracing 50% of its decline it looks ready to open up below last Friday's low and that could set off the next leg down in its pattern. GOOG also looks like it might have completed its bounce although a small rally higher to maybe 710 would be a better short play setup: Link

And AAPL also looks very close to a good short play setup based on an A-B-C bounce off its Nov 12th low--it's just shy of equality at 186.27: Link . This one makes for a good short play because the stop needs to be at a new high and that's nice and close at this point.

OI Technical Staff : 11/29/2007 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 : 11/29/2007 9:14:05 PM

Morgan Stanley Replaces Top Trading Execs; Co-Presidents

DJ- Morgan Stanley replaced its top trading executives and co-presidents, the latest fallout from the mortgage- and credit-related meltdown.

Co-President Zoe Cruz, who ran the firm's capital-markets business and was seen as the likely successor to Morgan Stanley Chief Executive John Mack, is retiring after 25 years at the firm. Neal Shear, who had been co-head of institutional sales and trading, is returning as chairman to the commodities business that he formerly led.

Morgan Stanley named Walid A. Chammah and James P. Gorman as co-presidents, replacing Cruz and her counterpart, Robert Scully. Scully will join a new office of the chairman, working with global sovereign investors, the company said.

"Walid and James are the right team with the right skills to lead Morgan Stanley," Mack said.

Morgan Stanley also named Michael Petrick as its new head of trading. Petrick joined the firm in 1989 and has run its groups covering distressed-debt, high yield and leveraged finance, corporate credit, and principal investment.

On Nov. 7, Morgan Stanley had said it lost about $3.7 billion on mortgage-related positions in September and October, and Chief Financial Officer Colm Kelleher subsequently said the portfolio has deteriorated further in November. At the time, Morgan said the writedowns would lead to a $2.5 billion reduction in net income.

The executive changes were the latest fallout from a credit crisis that has claimed the chief executives of Citigroup Inc. (C), Merrill Lynch & Co. (MER) and UBS AG (UBS), as well as a number of senior fixed-income trading executives.

In after-hours trading, Morgan Stanley shares were at $51.94, down from Thursday's close of $52.34.

Jeff Bailey : 11/29/2007 9:08:36 PM

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

Jeff Bailey : 11/29/2007 9:01:12 PM

Huuuge volume in Jan crude oil today.

Jeff Bailey : 11/29/2007 8:47:58 PM

Yep ... 13,000.

Jeff Bailey : 11/29/2007 8:47:33 PM

Guess where that "right shoulder" would be on a pullback in the YM/DIA/DJX?

Jeff Bailey : 11/29/2007 8:46:34 PM

Nasty looking reverse h/s pattern developing in DIA/INDU/YM

Jeff Bailey : 11/29/2007 8:45:11 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 11/29/2007 4:12:46 PM

Dell Earnings Press Release Link

Consensus was for EPS of $0.35 on Rev of $15.34B

Jeff Bailey : 11/29/2007 4:10:44 PM

Dell Computer (DELL) $28.14 +1.62% .... lower at $27.00 on headline numbers.

Jeff Bailey : 11/29/2007 4:06:30 PM

YM 13,323

Jeff Bailey : 11/29/2007 4:06:09 PM

Sell program premium SPY $147.06

Jeff Bailey : 11/29/2007 3:51:35 PM

Buy program premium SPY $147.20

Jeff Bailey : 11/29/2007 3:46:15 PM

Buy program premium ... SPY $147.25

Jeff Bailey : 11/29/2007 3:45:53 PM

Not sure if that will get a ticker or not? FRE.P or something like that.

Keene Little : 11/29/2007 3:45:11 PM

The SPX 30-min chart shows what I'll be watching on MACD to help confirm the wave count. The current sideways 4th wave consolidation is working off the overbought conditions and if MACD works its way down to the zero line it'll be fully recharged for another run higher (MACD rounding out at the zero line, whether from above in an uptrend or below in a downtrend, is typically a very good signal to watch for a reversal of the correction): Link

And then at a new high for wave-5 the MACD should be negatively divergent against the high associated with the price high for wave-3 (shown with the downtrend line across the expected lower MACD high). That would be the confirmation that it is in fact wave-5 and not the start of a larger rally leg. Tomorrow is when this should play out.

Jeff Bailey : 11/29/2007 3:45:07 PM

DJ- Freddie Mac Sells $6B Pfd Stock At 8.375% Dividend (update from source) Freddie Mac (FRE) Thursday sold $6 billion of non-convertible, non-cumulative, perpetual preferred stock at a dividend of 8.375% fixed for five years, according to an investor familiar with the deal. Price talk initially was at 8.50%, but was lowered amid high demand. The deal was five times oversubscribed, with $30 billion in orders, according to a market participant. "I think accounts came out of the walls to get into this deal, and they didn't have to lean on a select few," the market participant said. Freddie Mac sold $240 million shares at $25 per share. After 2012, the dividend will float over three-month Libor, according to the investor familiar with the deal.

Jeff Bailey : 11/29/2007 3:33:19 PM

Sell program premium ... SPY $146.97

Jeff Bailey : 11/29/2007 3:32:57 PM

YM 13,304 ...

Keene Little : 11/29/2007 3:31:47 PM

The dark red wave count on this SPX 60-min chart shows my preferred count at the moment. I'm looking for another run higher to finish the 5-wave move up from Monday and that should then be followed by at least a deep pullback before another rally in December. I think the bulls will get their year-end rally but not to new highs (my apologies to Abbey Joseph Cohen for not agreeing with her forecast for 1600 by year end). Link

Jeff Bailey : 11/29/2007 3:14:27 PM

Should be good for 3-box reversals for the 5-day NH/NL ratios at the close.

Jeff Bailey : 11/29/2007 3:13:46 PM

NASDAQ NH/NL 80:125 ... DAILY Ratio 39.0%

Jeff Bailey : 11/29/2007 3:13:18 PM

NYSE NH/NL 47:134 ... DAILY ratio 26.0%

Keene Little : 11/29/2007 3:12:12 PM

I'm getting the feeling that the market is going to slide back down into the close and leave SPX sitting at the bottom of its sideways triangle pattern and leave us guessing as to whether it's going to break down or break to the upside next. It could rally straight up from here but the choppy climb doesn't make me want to buy it here.

NDX is making a marginal new high but so far stopped at the trend line along today's highs. It's looking more like an expanding (instead of contracting) triangle for its consolidation. It too would look best with one more pullback before setting up the next rally leg.

Jeff Bailey : 11/29/2007 3:01:19 PM

CNQ $66.88 -0.63%
RIG $136.40 +0.01%


Jeff Bailey : 11/29/2007 2:59:03 PM

OIX.X 804.92 +0.56%
OIH $176.78 +2.06%
DUG $42.35 -2.86%
DIG $102.33 +2.72%
USO $71.59 -0.29%

Jeff Bailey : 11/29/2007 2:56:43 PM

DJ- NYMEX Crude Settles Up 35 Cents at $90.97 On Fast Pipeline Restart

Jane Fox : 11/29/2007 2:37:07 PM

NEW YORK (MarketWatch) -- Gold futures finished below $800 an ounce on Thursday, as gains in the U.S. dollar squeezed demand for the precious metal.

Gold for December delivery fell $5 to finish at $795.30 an ounce on the New York Mercantile Exchange.

"I see the declines today as further profit-taking into month's end and trade off of a dollar that continues to firm today," Wisdom Financial senior trader Zachary Oxman said in emailed comments.

The loss follows Wednesday's $13.70 drop, nearly 2%, to end at $800.30 an ounce.

Keene Little : 11/29/2007 2:35:14 PM

One more drop back down should finish the sideways 4th wave triangle and it could end anywhere in the 1460-1465 area (the end of these triangles is not always predictable). It should then be followed by the 5th wave up with an upside projection in the 1482-1487 area (depending on where the 4th wave ends which will then allow me to get a more accurate projection). Based on this pattern I'm looking to get long (stop needs to be at a new daily low). Link

Jeff Bailey : 11/29/2007 2:24:05 PM

SPY Option Montage with OI as of yesterday's close at this Link

Jeff Bailey : 11/29/2007 2:18:45 PM

SPX Option Montage with OI as of yesterday's close at this Link

Today I'm adding QCharts' Implied Volatility measures.

Jeff Bailey : 11/29/2007 1:57:45 PM

GoldCorp. (GG) $33.80 -2.36% ...

Jeff Bailey : 11/29/2007 1:56:50 PM

If the DXY were to close here on Friday, the December's MONTHLY Pivot would be 75.73.

Jeff Bailey : 11/29/2007 1:55:47 PM

DXY looked as if it was going to backfill this morning's gap higher yet again this morning, but still trying to hang tough at 75.57 (30-minute delayed). Still hasn't been able to reclaim MONTHLY S1.

Keene Little : 11/29/2007 1:54:14 PM

While I wait for some more clues on where the market is headed next I'm placing an alarm at SPX 1450--break that and the high for the bounce is in for now. Until that happens, especially if price just chops around, we could se a continuation higher. If it forms a nice sideways triangle today then I'll get long for the 5th wave up otherwise I consider the long side a bit risky at the moment.

Jeff Bailey : 11/29/2007 1:50:03 PM

DUG and USO offset currently down ~$127.

DUG $42.81 -1.81% ... USO $71.51 -0.40% ...

Keene Little : 11/29/2007 1:46:38 PM

We're getting another big move in Treasuries today, this time a reversal back down in yields. I had mentioned in last night's Wrap that I expected the 10-year (TNX) to make a new low (shown in dark red on the daily chart) and suggested it could mean the stock market will do the same thing (they've been trading somewhat in synch). So far the stock market has not followed TNX but it's a bearish signal. Link

Jeff Bailey : 11/29/2007 1:46:38 PM

I figure if many of the large institutions are having some trouble getting a grip on "what are the subprime risk," then ACCOUNT and TRADE management is, and always had been, the key to trading these markets for PROFITS!

Jeff Bailey : 11/29/2007 1:46:34 PM

I received and EXCELLENT email question from a subscriber yesterday, but the subscriber did not want it posted here in the MM. I honor all such wishes.

However, my REPLY was that we should look for some pullback of gains once we witnessed a bullish % reversal back higher.

Those that TOOK THE RISK and bought the bottom (kind'a like QLD trade) will lock in some gains.

Shorts that helped drive yesterday's gains, well at some point, they stop once they get things under control in their account (usually overleveraged traders), and look for 3-box reversals to once again cover some positions.

It is interesting that we've heard "this is the bottom" so many times.

I (Jeff Bailey) have heard just as man "this is the top" at least the same number of times, if not more. (wink)

Jeff Bailey : 11/29/2007 1:35:31 PM

S&P 500 Index (SPX) Link ... speaking of "high pole" and "low pole" warnings as well as bullish and bearish support trends. Not to mention the BPSPX reversal back up yesterday.

Jeff Bailey : 11/29/2007 1:24:46 PM

Simon Property Group (SPG) $94.98 -0.45% ... speaking of bullish support and bearish resistance trends. Link

Big test at bearish resistance trend. I do think we should look for SPG to at least come back into the $90 area next couple of weeks. Bottom of 10-week trading band is down at $80. That's where the SPG Dec $80 Put (SPG-XP) is at.

Keene Little : 11/29/2007 1:21:19 PM

And just to keep the bears on their toes, a new low below this morning's would not necessarily be bearish. It instead could be the finish to the 4th wave correction as shown on this chart (and one of the reasons I'm in no hurry to force a trade--too many possibilities here and not enough confidence in what's next): Link

Keene Little : 11/29/2007 1:18:10 PM

Even though this morning's rally made a minor new high it's still possible it was only part of what will be a sideways triangle consolidation if the current pullback maintains a corrective look to it (jury is still out on that). If it were to do that then we'd have a good setup for a long play for the 5th wave higher (maybe SPX 1480). I'm in no rush to make a trade today and I'm just trying to figure out what's happening here so we can set up a trade later.

Jeff Bailey : 11/29/2007 1:15:48 PM

DUG $42.30 -2.98% ... Its MONTHLY 61.8% at $42.13.

"no man's land" with WEEKLY P $42.76, WKLY S1 $40.68.

Jeff Bailey : 11/29/2007 1:11:56 PM

USO's MONTHLY 61.8% at $72.08. One could say "it is in the zone"

Jeff Bailey : 11/29/2007 1:11:19 PM

USO $71.56 -0.33% ... sitting right on its WEEKLY S2 ($71.56).

Keene Little : 11/29/2007 1:10:14 PM

SPX has now retraced 62% of this morning's rally which should be the extent of the pullback if there is to be another high.

Jeff Bailey : 11/29/2007 1:09:52 PM

StockCharts' DUG Link ... the "high pole warning" is a PnF pattern where a LOOOOONG column of X gets reversed by more than 50%.

I tend to pay more attention to them when they are found after longer-term moves higher where the "high pole warning" then suggests a stop.

See the column of X from $48.50 to $58.00, then the "high pole warning" would have been the O's to $53.00, and further down to $50.00.

Jeff Bailey : 11/29/2007 1:04:09 PM

You see, as a PnF analyst, I can't suggest at this point a long in the DIG as it has terrible risk/reward at trend.

DUG on the other hand, better risk/reward.

USO? well, some "news" and some dollar juuuust enough to have a slight bullish bias.

Jeff Bailey : 11/29/2007 1:00:54 PM

Ultra Oil & Gas (DIG) Link

Keene Little : 11/29/2007 12:59:00 PM

After breaking its uptrend line SPX then did a retest and fell away more sharply. That's certainly not bullish price action. Unfortunately the pattern of the pullback looks more corrective than impulsive and therefore I'm not ready to declare a top for the rally yet. We could still be in the 5th wave and the current pullback will simply lead to another push higher as part of that 5th wave, possibly forming a rising wedge for the day (which would make for a more reliable short play setup).

Jeff Bailey : 11/29/2007 12:55:42 PM

UltraShort Oil & Gas (DUG) $42.23 -2.91% ... after you look at the USO chart, you can tie with this one too. Link

Jeff Bailey : 11/29/2007 12:42:35 PM

SLB $92.21 +1.74%, CEO $186.09 +0.55%, PTR $195.22 +1.13%, VLO $64.02 +1.60% and FTO $43.18 +0.32%

Jeff Bailey : 11/29/2007 12:41:17 PM

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

Jeff Bailey : 11/29/2007 12:36:36 PM

Exxon/Mobil (XOM) $89.04 +1.27% ...

Jeff Bailey : 11/29/2007 12:34:51 PM

Monitor DUG $42.34 -2.88% into close as it could be telling on USO tomorrow.

If oil stocks fall quickly into today's close, could also suggest USO $71.00 and lower tomorrow.

Jeff Bailey : 11/29/2007 12:33:25 PM

USO session low has now been $71.47. At this point, we'd still chart X's to $73.00 (session high so far $73.32), but those would go away on a trade at $71.00 since we were in a column of O going into today's trade.

Jeff Bailey : 11/29/2007 12:31:40 PM

USO $71.63 -0.23% ... $0.50-box to match futures Link

Keene Little : 11/29/2007 12:25:09 PM

SPX has now broken below its uptrend line from Tuesday afternoon (that I showed on the 10-min chart). It's only a minor break so far but after achieving its minimum upside Fib projection near 1472 I'd be wary if long and probably stopping myself out here. I'm waiting now to see if the decline forms a small impulsive decline and then a corrective bounce to suggest a short play. The bulls aren't in real trouble (for at least a larger pullback) until this morning's low is taken out.

Jeff Bailey : 11/29/2007 12:24:37 PM

EIA: US Sep Gasoline, Distillate Use Inch Up To Sep Records

Jeff Bailey : 11/29/2007 12:23:55 PM

EIA: US Revised Sep Oil Use -0.8% On Yr; Least Since April'06

Jeff Bailey : 11/29/2007 12:23:04 PM

EIA: US Sep Jet Fuel Use Lowest In Any Month Since Jan'04

Jeff Bailey : 11/29/2007 12:22:17 PM

US Oil Fund (USO) alert! $71.64 -0.22% ... getting whacked.

Jeff Bailey : 11/29/2007 12:16:59 PM

That's a "better deal" in my opinion than what Citigroup (C) got. For shareholders especially.

Jeff Bailey : 11/29/2007 12:15:29 PM

Freddie Preferred Stock Deal 5 Times Oversubscribed

DJ- Freddie Mac's (FRE) non-convertible non-cumulative perpetual preferred stock deal is five times oversubscribed, with $30 billion in orders for the $6 billion deal, according to a market participant.

The deal may increase in size to accommodate demand, the participant said.

The federally chartered housing finance company announced Tuesday it would sell $6 billion in preferred stock to shore up its capital.

The dividend for the non-convertible, non-cumulative perpetual preferred stock deal is in the range of 8.5%, according to a syndicate source.

Freddie Mac dropped its plan to include a convertible tranche in the offering, which is being led by Lehman Brothers Inc. (LEH) and Goldman Sachs & Co. (GS).

Freddie's third-quarter loss of $2.03 billion left its capital at just $600 million over the minimum regulatory requirements.

FRE $29.79 +1.25% ...

Jeff Bailey : 11/29/2007 12:10:23 PM

Sector Bullish % Status Changes from yesterday's action had ...

CHEMicals reversing back up from "bear confirmed" to "bull alert"

STEEl/iron reversing back up from "bear confirmed" to "bull confirmed" (very unusual to see 2 stage reversal).

TEXTiles/Apparel reversed up from "bear confirmed" to "bull alert"

WALLstreet reversed back up from "bear confirmed" to "bull alert"

Jeff Bailey : 11/29/2007 12:03:18 PM

COMPLIANCE WATCH... Finra Scrutinizing Research Disclosures

A censure and $300,000 fine against Wachovia Capital Markets demonstrates regulators' ongoing concern about research-related conflicts of interest, Jaime Levy Pessin writes.

WB $40.92 -1.15% ...

Jeff Bailey : 11/29/2007 12:00:21 PM

TORONTO-DOMINION 4Q NET JUMPS 44%

DJ- Bank's fiscal 4Q net climbs to C$1.09 billion, or C$1.50 a share, boosted by a gain related to its shares in Visa and strong growth in its U.S. banking and wealth management operations.

TD $72.76 +1.64% ...

Jeff Bailey : 11/29/2007 11:53:56 AM

X gets two (2) squares today for Altria (MO) $76.00 +2.57% ...

Keene Little : 11/29/2007 11:50:18 AM

The 10-min chart now looks like a potential rising wedge for the move up from Monday and I'm showing the upside projection just under 1480 which matches the trend line along yesterday's highs: Link

Keene Little : 11/29/2007 11:45:39 AM

The interesting thing about the 1480 upside projection from this morning's low is that it matches the top of a parallel down-channel for the Oct-Nov decline (and just under its 200-dma near 1483). Link

Jane Fox : 11/29/2007 11:42:27 AM

I would certainly not be short this market. Link

Keene Little : 11/29/2007 11:40:33 AM

If this morning's pullback was all we're going to get for the 4th wave correction then the current push up would be the 5th wave. The first upside target in that case is SPX 1471.69 (where wave-5 = 62% of wave-1), which just got tagged, and then just under 1480 (equality between 5 and 1). So if you're playing the long side it's time to pull your stop up underneath this move.

Jane Fox : 11/29/2007 11:40:12 AM

Hit target of 13344. Gee we were able to stay out of some bad trades and then grabbed a winner. Good day!!

Jeff Bailey : 11/29/2007 11:34:52 AM

Yesterday's news from EIA regarding draw of 452,000 was rather "bearish" for oil prices in my opinion when considering the rather large increase in inputs. Today's "pipeline news" shifts that bias a bit.

Keene Little : 11/29/2007 11:30:08 AM

I'm fooling around with a couple of ideas for what could be playing out this week and based on this morning's price action I'm assuming we're going to get another leg up for the rally (the 5th wave). On the SPX 10-min chart I've redrawn a parallel up-channel based on a trend line from wave-1 to wave-3 and then I attached a parallel line to the end of wave-2: Link

This is to help identify where wave-4 could find support. If the 4th wave forms a sideways triangle it could take us into the 2:00 turn window to finish and then rally from there. If the final pullback finishes around 1460 and wave-5 = wave-1 then I get an upside target of 1481.58 for the rally. Again, this is a very early call and I'll update it as price progresses here. If it just rallies straight from here then the rally could finish a lot earlier.

Jeff Bailey : 11/29/2007 11:28:30 AM

The target on the USO could be subject to change depending on news flows out of Canada.

Jeff Bailey : 11/29/2007 11:23:52 AM

Swing trade long alert! ... for 1/2 position in the US Oil Fund (AMEX:USO) at the offer of $72.95.

Stop goes $71.00. Target $76.00.

Keene Little : 11/29/2007 11:19:06 AM

We might get a sideways triangle to form today which would be typical for a 4th wave correction before getting the 5th wave up to a new high for the rally from Monday.

Keene Little : 11/29/2007 11:17:55 AM

After a 3-wave drop from yesterday's high it's looking more like a corrective bounce back up. It might have been wave-a down and now wave-b up which will be followed by wave-c down. I don't see anything yet to get me excited about the upside. Obviously a push above yesterday's highs would suggest the pullback could be finished (watch the head fake move higher).

Jane Fox : 11/29/2007 11:17:05 AM

AD line is still bearish at -412 but the DOW is challenging its daily highs.

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

Raise stop to 13272. Every little bit helps.

Jane Fox : 11/29/2007 11:03:32 AM

WE need to keep our stop far enough away so we do not get caught up in the noise (which there has been an abundance of today) but yet keep us out to losing too much of our accounts. This is the difficult part of trading.

Jane Fox : 11/29/2007 11:00:35 AM

Long from YM 13304 with a stop at 13264 and target at 13344. 40 Tick risk 40*5 = $200/contract.

Jane Fox : 11/29/2007 10:59:27 AM

This will be the third try today?

Jeff Bailey : 11/29/2007 10:59:12 AM

QUANT FUND GMN CLOSES, RETURNS FUNDS

DJ- In a sign of continuing woes for hedge funds that use computer models to trade, GMN Capital closes shop and says it plans to return capital to investors, as fund's assets drop to about $500 million from a high of $1.2 billion in March.

Jane Fox : 11/29/2007 10:59:07 AM

I feel the buyers coming back now and will take YM long at 13304.

Jeff Bailey : 11/29/2007 10:53:32 AM

US Oil Fund (USO) $72.62 +1.14% ... This security seeks to reflect the performance of WTI.

Jeff Bailey : 11/29/2007 10:51:50 AM

IEA SAYS EMERGENCY OIL STOCKS AT 8-YEAR HIGH

DJ- International Energy Agency says that there are enough oil stockpiles available to ease a rising risk of a major supply shutdown, an assurance that coincided with a large shutdown on a major U.S.-Canada pipeline, which pushed oil higher.

Keene Little : 11/29/2007 10:44:24 AM

My impression so far this morning is that we're going to consolidate for a while and that should then lead to another push higher.

Jeff Bailey : 11/29/2007 10:41:20 AM

Regional New Home Sales Table at this Link

Jeff Bailey : 11/29/2007 10:37:49 AM

China Agrees To EliminateSubsidies By Jan'08

Jeff Bailey : 11/29/2007 10:36:57 AM

US, China Reach Deal To End WTO Subsidies Complaint

Jane Fox : 11/29/2007 10:34:35 AM

Well we certainly did not shoot out of the gate like I thought we would.

Jeff Bailey : 11/29/2007 10:34:18 AM

DIG $102.54 +2.93% ...

Jeff Bailey : 11/29/2007 10:33:59 AM

DUG $42.12 -3.39% ....

Jeff Bailey : 11/29/2007 10:33:39 AM

EIA: Weekly Nat. Gas Storage Table Link ... 12 Bcf draw.

Jeff Bailey : 11/29/2007 10:31:29 AM

E*TRADE GETS $2.5B CASH INFUSION; CEO LEAVES

DJ- Once-hot discount brokerage firm now ensnared in the mortgage crisis is getting a $2.5 billion cash infusion from Citadel. President Jarrett Lilien will become interim CEO as Mitch Caplan, who has led E*Trade since 2003, steps down.

ETFC $5.43 +2.84% ... traded as high at $6.04.

Keene Little : 11/29/2007 10:27:01 AM

By making a parallel up-channel based on the trend line along the highs on Tuesday and Wednesday I like to watch for the possibility that we'll see support for another run higher. Right now the bottom of the channel for SPX is near 1457.40: Link

Jeff Bailey : 11/29/2007 10:26:31 AM

ProShares Products Link

Jeff Bailey : 11/29/2007 10:25:41 AM

Jane! Energy stocks.

Dig it? Dug it?

Jeff Bailey : 11/29/2007 10:25:01 AM

Ultra Oil & Gas (DIG) fact sheet Link

Jeff Bailey : 11/29/2007 10:24:05 AM

UltraShort Oil & Gas (DUG) fact sheet Link

Jeff Bailey : 11/29/2007 10:20:53 AM

SEARS 3Q NET DROPS AS MARGINS PLUMMET

DJ- Operator of Sears and Kmart stores' net income falls to $2 million, or 1c a share, due to a $223 million drop in gross margin, reflecting both lower sales and inventory-clearing markdowns. Year-ago earnings were $196 million, aided by a gain. Sales slip 3.3% to $11.55 billion. Wall Street predicted net income of 50c a share.

SHLD $101.13 -13.07% ... notable 52-weeker in NDX/QQQQ

Jane Fox : 11/29/2007 10:16:58 AM

Oil stocks did well yesterday while Crude fell.

Jane Fox : 11/29/2007 10:16:40 AM

Jeff is the DUG ETF based on the Crude futures or Oil stocks?

Jane Fox : 11/29/2007 10:15:54 AM

YM made a low of 13241 so still not short. So far we have stayed out of trouble.

Jane Fox : 11/29/2007 10:13:43 AM

If we get triggered short at 13239 stop is 13291 and target is 13188. THis is a 51 tick risk. 51*5 = $255/contract risk.

Jeff Bailey : 11/29/2007 10:13:02 AM

UltraShort Oil & Gas (DUG) $42.88 -1.65% ...

Jeff Bailey : 11/29/2007 10:12:18 AM

US Oil Fund (USO) $72.77 +1.35% ...

Jeff Bailey : 11/29/2007 10:11:49 AM

ENBRIDGE CONFIRMS 2 CANADA-US PIPELINES RESTARTED

DJ- Enbridge says that is has reopened two of four Canada-to-U.S pipelines shut after an explosion Wednesday, which killed two workers. There are no indications when the other two lines could be expected to restart. News pushes oil prices higher.

Jane Fox : 11/29/2007 10:11:30 AM

YM short at 13239 now.

Jane Fox : 11/29/2007 10:05:42 AM

U.S. new-home sales down 23.5% in past year

Oct. new-home inventory falls to 8.5-months New-home median sales price down 13% in past year

Sept. new-home sales revised to 11-year low of 716,000

Sept., Aug. new-home sales revised sharply lower

Oct. new-home sales rise 1.7% to 728,000 pace

Oct. new-home sales 728,000 vs. 740,000 expected

Jeff Bailey : 11/29/2007 10:03:56 AM

Procter & Gamble (PG) $73.68 -0.31% ... just did see another new 52-weeker this morning.

Jane Fox : 11/29/2007 10:02:27 AM

YM long now at 13311.

Jane Fox : 11/29/2007 10:01:23 AM

Oct New HOme sales should be out now.

Jane Fox : 11/29/2007 9:59:30 AM

All markets are still within their overnight ranges. Russell futures have traded below and the NDX futures have traded above though.

Jane Fox : 11/29/2007 9:55:55 AM

Just as well we did not get triggered long on the YM - it has fallen to our stop, however, the trade is still in play. I may get a better entry and if I do I will let you know.

Keene Little : 11/29/2007 9:51:29 AM

That initial rally out of the gate is now getting reversed so we'll see what the bears have in mind. Stay aware that today could be marked with a lot of choppy price action if we're going to see a consolidation of yesterday's rally.

Jeff Bailey : 11/29/2007 9:49:15 AM

Altria (MO) $74.78 +0.93% ... notable 52-weeker at the big board.

Jane Fox : 11/29/2007 9:47:56 AM

Stop will be 13274 and target is 13370. Large stop and target so if the risk is too much then don't take the trade. 48*5 = $240.00 per contract.

Jane Fox : 11/29/2007 9:46:43 AM

I see a long YM at 13322.

Keene Little : 11/29/2007 9:45:25 AM

First move out of the gate is a spike up after the futures had pulled back a little overnight. That kind of initial move is always a little suspect and more often than not sets up a reversal play. But so far the bulls aren't letting go.

Jane Fox : 11/29/2007 9:37:19 AM

VIX is making new daily lows telling me the bulls are taking over the controls.

Linda Piazza : 11/29/2007 9:37:10 AM

I've found out over the last couple of days that I don't always make sense when I'm running a fever. That means that I'm going to have to marshal whatever brain cells are still working today to research and write the Wrap. I won't be contributing to the Market Monitor again today, and I wouldn't be surprised at this point if I'm not tomorrow, either.

Jane Fox : 11/29/2007 9:36:27 AM

ER has broken its overnight low but so far the only market to do so. Link

Jane Fox : 11/29/2007 9:35:24 AM

AD line is a bearish -941

Jane Fox : 11/29/2007 9:24:30 AM

LONDON (MarketWatch) -- Crude-oil futures rallied as much as $4 a barrel on Thursday, gaining in the aftermath of an explosion and fire that killed two workers and forced the partial closing of pipelines that carry nearly one-fifth of U.S. imports from Canada.

Crude for January delivery rose as high as $95.17 a barrel, and the benchmark contract recently stood at $93.06, up $2.44 a barrel.

Canada's Enbridge Inc. said the explosion occurred Wednesday afternoon at a site about three miles southeast of Clearbrook, Minn.

The pipelines carry an estimated 1.9 million barrels a day of oil. Fires have been extinguished, according to the Associated Press, which also reported that two of that four pipelines that had been shut have been re-started.

The increase in futures prices marked a reversal from the sharp drop seen in the energy pits on Wednesday. Weekly U.S. data on petroleum inventories showed crude stockpiles fell less than expected, undermining the crude contract.

Keene Little : 11/29/2007 9:22:57 AM

The pullback in equity futures during the overnight session looks correcttive but that may not be telling us much yet. It will be important for the bulls to see more of a bull flag consolidation this morning rather than a reversal of yesterday's gains. As mentioned late yesterday and last night, I still like a short against yesterday's highs since it's possible that's all there will be for the rally but the evidence for that will be in today's price action.

Jane Fox : 11/29/2007 9:22:31 AM

WASHINGTON (MarketWatch) -- In a possible sign of a weakening labor market, the number of Americans receiving state jobless benefits rose to a nearly two-year high in the latest week, the government said Thursday.

Continuing jobless claims rose by 112,000 in the week ending Nov. 17, to 2.66 million, the highest mark since Dec. 24, 2005, the Labor Department said.

Initial jobless claims also shot up in the latest week, the data show. Those claims rose by 23,000 to 352,000 during the week ending Nov. 24, their highest level since Feb. 10.

Jane Fox : 11/29/2007 9:20:55 AM

WASHINGTON (MarketWatch) -- The U.S. economy expanded at the fastest pace in four years during the third quarter, growing at a real annual rate of 4.9%, the Commerce Department said Thursday in making its second estimate of growth for the three-month period.

The upward revision to gross domestic product, in line with Wall Street expectations, was due to larger inventory building and a better trade balance.

A month ago, the government pegged third-quarter GDP at 3.9%. The government publishes three estimates of GDP, adding more complete information with each passing month.

Real GDP has increased 2.8% in the past year, close to the economy's long-run potential.

Jane Fox : 11/29/2007 9:17:36 AM

And since both Crude and Gold move hand in hand and if I suspect Gold to fall to $770.oz then I have to think Crude will fall to at least $85.00/bl. Link

Jane Fox : 11/29/2007 9:16:00 AM

Here is your daily chart of Gold. I think support at 770 will be tested within the next few days. Link

Jane Fox : 11/29/2007 9:12:54 AM

Crude has bounced off $90.00/bl and it is going to be interesting to see if that support will hold. I suspect it will not and that Crude has further to fall.

Gold also bounced off support at $800 and I also suspect this support will not hold.

So if suspect both Crude and Gold will fall further then I have to suspect the US$ will be moving higher.

USDJPY has consolidated just like the American Index futures. Link

Jane Fox : 11/29/2007 9:02:22 AM

This is a consolidation at previous day highs and suggests a move higher intraday. We won't see a day like yesterday but I would not be surprised to see SPX test 1490 either today or tomorrow. I suspect 1490 will stop this rally where we will see either a consolidation or a decline. Then where that decline ends will tell us a lot of where the market will head for the rest of the year. Link

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