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Keene Little : 12/3/2007 1:06:56 AM

I'm going to miss the first hour of trading and will be with you around 7:30 AM.

Keene Little : 12/2/2007 10:29:21 PM

Monday's pivot tables: Link and Link

The sharp spike up at the end of the day on Friday may have completed a quick correction of Friday's pullback and now we're ready for another leg down for the correction to last week's rally (shown in dark red on this SPX 30-min chart): Link

Any push to a new high above Friday's could spark some strong buying and while I do not expect that I would also not be interested in shorting it. Instead I think we'll see a stair stepping lower for this week and that could then set up another rally leg. The question is how long it will take to pull back and I'm wondering what will set up as we approach Dec 11th (FOMC). The daily chart shows how a pullback should lead to another push higher (dark red), but obviously a break below last Monday's low would be more immediately bearish (pink). Link

The DOW's daily chart has the same setup--maybe a pullback to around 13K (62% retracement of last week's rally) and then another leg up to tag 13635 (62% retracement of the Oct-Nov decline. This is obviously speculation but would fit both a Fibonacci as well as EW perspective. Link

NDX is the one that gives me the most bearish impression after what could be counted as an a-b-c correction to the November decline. As labeled on the daily chart, Friday's high could be counted as the completion of wave-2 and that sets up a strong wave-3 to the downside this week. A break below Monday's low (like for the DOW and SPX) is needed to confirm the bearish wave count. Link

The RUT stopped at its broken uptrend line from August 2004 (kiss goodbye setting up?) and the top of its parallel down-channel. This could pull back and rally further into the middle of December, similar to that shown for the DOW and SPX, but so far the trend is down and that's the way to trade this until proven otherwise. Link

OI Technical Staff : 12/2/2007 9:59:59 PM

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