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Jeff Bailey : 12/4/2007 12:26:27 AM

SPY ... 30-minute interval chart with WEEKLY/MONTHLY Pivot retracement at this Link

Note potential reverse h/s pattern developing, where a "right shoulder" would be around $144.00.

Jeff Bailey : 12/3/2007 11:35:01 PM

Daily/Weekly/Monthly Index Pivot Matrix for tomorrow at this Link

Keene Little : 12/3/2007 10:16:04 PM

Tuesday's pivot tables: Link and Link

There are a couple of potential turn dates worth considering this month--the first being around Dec 4-5 (Fib turn window), Dec 11th (FOMC) and then Dec 22 (Bradley Model turn date the last one being Oct 17th). Keeping these dates in mind has me thinking of a couple of different price scenarios and using the dark red wave counts on the SPX and NDX charts I show two distinct possibilities.

On the SPX I show a larger price correction that takes price down to near 1438-1439 by Dec 11th and then a big rally into the Dec 22 turn date (which is a Saturday so either Friday 12/21--opex Friday, or the following Monday, 12/24 (Christmas eve). I'm projecting the rally up to 1512 (62% retracement of the Oct-Nov decline and two equal legs up from Nov 26th.
SPX 60-min: Link
SPX daily: Link

But on the NDX I'm speculating that the pullback will end sooner--tomorrow being a strong possibility (and being in a Fib turn window) with 2045 being two equal legs down from last Friday's high. That would set up a rally into FOMC and a potential high on that date. This is all obviously speculation on my part and we'll have to see how price moves between now and then. If NDX finds support at 2045 (assuming it drops down to there) then two equal legs up from Nov 26th would be up to 2185.

The other possibility of course is that the bounce is over as of last Friday's high (pink wave count) and now down we go. A break of 1989 is needed to confirm that, with a break below gap closure at 2032 on Nov 27th being a heads up that something more bearish could be playing out. Hopefully the price pattern will be clearer by then if that's going to happen. So far the pullback from last Friday looks corrective and indicates new highs for the rally will be next.
NDX 60-min: Link
NDX daily: Link

Jeff Bailey : 12/3/2007 10:13:03 PM

Major Global Equity Indicies, DXY, USO and GLD Table at this Link

OI Technical Staff : 12/3/2007 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The Market Monitor has been archived.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 : 12/3/2007 5:07:26 PM

Closing Internals found at this Link

Note: It would currently take a measure of 24.00% or higher to have the NASDAQ 10-day NH/NL ratio reversing back higher.

Jeff Bailey : 12/3/2007 4:37:55 PM

Closing U.S. Market Watch found at this Link

Keene Little : 12/3/2007 4:24:21 PM

Assuming NDX drops down to 2045 and finds support there tomorrow it could launch the next leg up for the rally off last Monday's low. The scenario shown in dark red could point to a market high around the time of the FOMC announcement on Dec 11th. It takes a drop below the Nov 26 low near 1989 to say the bounce finished at Friday's high. If NDX finds support at 2045 (assuming it drops down to there) then two equal legs up from Nov 26th would be up to 2185.
NDX 60-min: Link
NDX daily: Link

Jeff Bailey : 12/3/2007 4:23:02 PM

NYSE 10-day NH/NL ratio reverses up. At today's close and with a final session tally of 60:148, the NYSE's 10-day NH/NL ratio ends at 17.1%. That's good enough for a 3-box reversal higher from recent inflection low of 9.2% (10% chart).

Jeff Bailey : 12/3/2007 4:16:28 PM

YM 13,354 ... tries to reclaim MONTHLY Pivot

Jeff Bailey : 12/3/2007 4:09:06 PM

DIA $133.20 -0.71% ...

Jeff Bailey : 12/3/2007 4:08:04 PM

DAILY S1 too tough at 13,333. Thought we might get a DAILY S1/WEEKLY Pivot correlation today.

Jeff Bailey : 12/3/2007 4:07:22 PM

Covering YM short here at 13,340

Keene Little : 12/3/2007 4:00:12 PM

NDX is leading to the downside this afternoon and has clearly broken Friday's low. Two equal legs down from Friday morning would take it down to 2045 which is between a 50% and 62% retracement of last week's rally (2055.60 and 2040, resp.).

Linda Piazza : 12/3/2007 3:57:51 PM

Looks as if the SPX may end the day at or very near the 200-ema, with that at about 1472.60.

Keene Little : 12/3/2007 3:47:31 PM

As Jane had commented earlier in the day, the bulls have the advantage here so far. Even if it pulls back further, as I've depicted, the pullback is clearly corrective (overlapping highs and lows) so far and looks very much like a bull flag. So far the correction is like so many we've seen before--flat and tight which doesn't allow bears out or bulls in. That then causes both sides to chase it higher when the buy programs start. I don't know if that will happen or we'll first get the deeper pullback but stay aware of the possibility that the pullback will remain very shallow.

Linda Piazza : 12/3/2007 3:42:27 PM

Time soon to make end-of-day decisions. Unless something changes over the next twenty minutes, the daily outlook indicates that nothing has been decided yet. The SPX mostly ranged beneath from its 200-ema up to its 30-sma today, with the 200-sma and 72-ema ranged just above the 30-sma. It mostly stayed above the 38.2% retracement off the October high and below the 50% retracement, and in the lower half of the range between those two Fib levels. The candle will likely be a red one, but one with a lower tail or shadow indicating some buying at the day's low. All in all, I don't see anything bullish about the candle other than that it looks as if it might maintain 200-ema and 38.2% Fib support in to the close, but that's not a given yet. So, unless something big changes before the close, you're going to have to make those end-of-day decisions in a vacuum.

Linda Piazza : 12/3/2007 3:27:33 PM

And . . . now the SPX is back at that descending trendline off Friday's early morning high, testing it again. It's really doing nothing but chopping around, so that when it finally breaks one direction or another, we'll no longer trust the signal it's given.

Keene Little : 12/3/2007 3:23:13 PM

The SPX 60-min chart shows a little wider view of how price could pull back correctively in an a-b-c move to create the larger degree wave-B that corrects last week's rally. This will hopefully unfold over the next week, potentially lining up for a low on Dec 11th (FOMC day). The bulls would probably be better with this scenario than a rally into FOMC. Keep in mind that SPX could find firm support at its Aug-Nov uptrend line near the 38% retracement at 1457 (and rally to a Dec 11th high).
SPX 60-min chart: Link
SPX daily chart: Link

Linda Piazza : 12/3/2007 3:14:32 PM

The SPX again has a downside target set, with that at 1468.13 and with next potential support on 15-minute closes at 1465.33. Although the SPX does appear to be tradually working itself down toward that Keltner potential target and support, it's doing so in such a choppy way that the target is unreliable and has been moving up gradually most of the day. Even if you bet on that particular Keltner line being hit and it eventually is, it might be far above where it was earlier this morning when the target was first set.

Jeff Bailey : 12/3/2007 3:14:05 PM

Ford (F) $7.25 -3.46% ...

Jeff Bailey : 12/3/2007 3:13:19 PM

General Motors (GM) $28.60 -4.12% ...

Linda Piazza : 12/3/2007 3:11:59 PM

Someone must not have liked what Paulson had to say or perhaps the closing of the bond market precipitated a move in equities, as sometimes happens.

Jeff Bailey : 12/3/2007 3:03:50 PM

TRINQ 1.04 ...

NASDAQ A/D 1,147/1,853

NH/NL 72:142

Jeff Bailey : 12/3/2007 3:03:07 PM

TRIN 1.28 ...

NYSE A/D 1,424/1,837

NH/NL 59:137

Jeff Bailey : 12/3/2007 2:55:05 PM

Treasury's Paulson: Deal Near on Mortgage Defaults ... AP Story Link

Jane Fox : 12/3/2007 2:54:20 PM

The little doji Crude is forming today may mean the drop is over and that it will not make it all the way down to $85.00/bl. Link

Jeff Bailey : 12/3/2007 2:51:11 PM

General Motors Nov. US Sales -11%, Sees Lower Q1 Output

DJ- General Motors Corp. (GM) posted an 11% drop in U.S. November sales, while Ford Motor Co. (F) posted an increase of less than 1% as both U.S. auto makers said first-quarter output will be below year-ago levels, as difficulties in the U.S. market continue into 2008.

Japan's Toyota Motor Corp. (TM) posted a 0.3% rise.

GM's three-month winning streak ended, as sales of cars and light trucks stood at 261,273 in November, down from 293,558 a year earlier.

Despite a holiday clearance sale to spur demand, GM said sales of light trucks fell 15% to 156,196, while car sales fell 4.5% to 105,077. Sales of pickup trucks and SUVs are lower, generally, amid high gas prices and the housing-market downturn.

GM, continuing to slash sales to rental-car agencies, posted a 16% drop in fleet sales.

Retail sales - a critical part of GM's effort to focus on higher-margin sales to dealerships - fell 9.7%, largely because of reduced availability of 2007 models after strong sales in September and October.

There were 25 selling days in November, the same as a year ago.

For the first quarter, the largest U.S. auto maker said it plans to build 950,000 vehicles, about 11% fewer than the 1.063 million it built in first-quarter 2007.

GM also set its fourth-quarter output at 1.025 million vehicles, up 3% from last month's estimate. In the fourth quarter of 2006 the region produced 1.107 million vehicles.

Amid continued market pressures, 2008 is poised to deliver the worst auto-sales results in 10 years. A Wachovia Capital Markets survey found about 34% of dealers plan to cut new-vehicle orders, a jump from 19% in September, the last time the survey was done. The survey sampled three dozen auto retailers nationwide.

Last week, GM Chief Financial Officer Frederick "Fritz" Henderson added to the industry's 2008 pessimism, telling Wall Street analysts that next year's sales could slip to 15.7 million light vehicles - with risk to the downside. Other executives have posited similar forecasts.

GM shares recently were down $1.08, or 3.6%, at $28.75.

Meanwhile, Ford (F) finally ended a yearlong losing streak, as it posted a 0.7% rise in U.S. November sales, to 182,096 vehicles from 180,910 a year earlier.

Ford said sales to daily rental companies dropped 6% and sales to individual retail customers - a key focus of Ford's comeback plan - fell 3%. A 25% jump in sales to commercial fleet and government customers drove the increase that broke Ford's losing string.

Ford passenger-car sales fell 2.4% to 60,383. Sales of trucks and sport utility vehicles - representing the Dearborn, Mich., company's most profitable business - were up 1.8% to 122,568. The uptick stands out amid the current slump in overall sales of SUVs and pickup trucks tied to high gas prices. Meanwhile, sales of Ford's "crossover" vehicles, such as the Edge and Lincoln MKX, rose 119% from a year ago. Ford said it will produce 685,000 vehicles in North America in the first quarter. Ford's first-quarter North American production in 2007 was 740,000, down about 15.5% from 2006. Ford left its fourth-quarter output forecast unchanged at 645,000 units. Ford shares recently were at $7.33, down 18 cents, or 2.4%. Toyota, which has been taking market share from its Detroit rivals, managed to stretch its lead over Ford in the race to be No. 2 in U.S. auto sales.

Toyota said it sold 197,189 vehicles in November, a record for the month, compared with 196,695 a year ago, once again beating Ford in monthly sales. Year-to-date, Toyota has outsold Ford by 48,879 vehicles. Toyota overtook Ford in total 2007 sales with its September results. "Rising fuel prices and sliding home values delivered a one-two punch this month," said Jim Lentz, executive vice-president of Toyota Motor Sales USA Inc. "But the industry's not down for the count. Demand for fresh, more fuel-efficient products continues to show strength." Passenger-car sales rose 4.1% to 113,641 while light-truck sales fell 4.6%. Toyota division sales for November rose 1.4% to 172,341. The biggest-selling passenger-car was the Camry, up 3.6%. Sales of the Prius hybrid more than doubled. Tundra pickup truck sales surged 43%. Lexus division sales fell 7% to 24,848. Toyota shares recently were at $110.98, down $1.47, or 1.3%.

Chrysler LLC will report sales results later Monday.

Jeff Bailey : 12/3/2007 2:45:42 PM

Bank of Canada: Luquidity Injection Monday Now Up To C$1B

Linda Piazza : 12/3/2007 2:37:11 PM

Jane, for some of us, especially those of us trading spreads, it's been just as hard to get into a trade or get out of one as it is to make a profit from one! (See my 2:19:39 and Jane's 2:23:07 posts.) I need a bit of an updraft to start stepping into some January bear call spreads to top off the bull put ones I put on last week during the downdraft, completing some condors. A bit of an updraft may help me finish closing out the rest of my condors from DEC, too. I've closed out most of them already, but I need that last little updraft to close out some bull put portions that haven't yet been closed. So, it's frustrating for us, too.

Jeff Bailey : 12/3/2007 2:37:02 PM

Altria (MO) $77.48 -0.10% ...

Jeff Bailey : 12/3/2007 2:36:09 PM

VIX's WEEKLY Pivot at 24.61.

Jeff Bailey : 12/3/2007 2:33:05 PM

VIX.X 23.79 +4.02% .... more put buyers/call sellers today than there were put sellers/call buyers on Friday.

Jeff Bailey : 12/3/2007 2:32:01 PM

SPY 147.62 -0.69% ... CBOE most active show Dec $147 Put most active at 25,185. Dec $140 Put 10,903. Dec 142 Put 10,011. Dec $145 Put 10,010. Dec $144 Put 2,973.

Jeff Bailey : 12/3/2007 2:28:53 PM

SPX 1,474.30 -0.46% ... CBOE's most active SPX are Jan 1,135 Put (SPT-MG) with 4,429 traded. Dec 1,300 Put show 3,750 traded. Dec 1,275 Put 3,203 traded. Jan 1,575 Call show 3,000 traded.

Jeff Bailey : 12/3/2007 2:26:11 PM

YM 13,358 ...

Jane Fox : 12/3/2007 2:24:16 PM

VIX is hovering around daily lows and that is telling me there is a bullishness out there that has not yet surfaced.

Jane Fox : 12/3/2007 2:23:07 PM

Linda I have figured out how to get into a trade I just haven't got the profit part figured out yet.

Linda Piazza : 12/3/2007 2:22:23 PM

As I surmised would happen, the SPX supposed breakdown meant no more than the earlier supposed breakout. The SPX is bouncing within the tight range it's forming--Isn't it strange that a 7-8 point range is now considered "tight"?--without many clues as to next direction. Even if clues existed, we should remain leery of trusting them.

Linda Piazza : 12/3/2007 2:19:39 PM

Frustrating, isn't it, if you're trying to get into a trade, close one or profit from one?

Jeff Bailey : 12/3/2007 2:17:05 PM

SPX 1,473.58 ... still holding its DAILY S1 (1,471.86)

VIX.X 23.72 +3.71% ... jumped above its DAILY R2 (24.03) earlier this morning. DAILY R1 (23.45) has been support.

Keene Little : 12/3/2007 2:13:43 PM

SPX made it down to the bottom of its trading range and has now bounced a little. If it makes it back up to the top of the range (could do a little throw-over) then it will be a good place for a short play. The downside target out of this pattern would first be just under 1464 and then just below 1453 (that includes if it just drops from here without another bounce first). Link

Jeff Bailey : 12/3/2007 2:07:53 PM

TRINQ 1.04 ...

NASDAQ A/D 1,134/1,832

NH/NL 70/134

Jeff Bailey : 12/3/2007 2:06:55 PM

TRIN 1.31 ...

NYSE A/D 1,393/1,855

NH/NL 61/131

Jeff Bailey : 12/3/2007 2:05:15 PM

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

Jane Fox : 12/3/2007 2:04:03 PM

I was stopped on my YM long from 13422 but the VIX is telling me the bulls still have control. Notice how the S&P futures are testing daily lows but the VIX is not testing daily highs - this is a bullish divergence. Link

Jeff Bailey : 12/3/2007 1:56:33 PM

YM 13,347 ...

Linda Piazza : 12/3/2007 1:49:27 PM

The SPX still tests that rising trendline off Friday's last swing high. It's been pierced during an intra-15-minute period, but the SPX closed that period above it. This morning's downside tentative Keltner target has been reset, with that target now at 1468.19 and with further potential support on 15-minute closes at 1464.65. However, be careful about trusting any target, upside or downside, today.

Jane Fox : 12/3/2007 1:44:02 PM

Although the AD line has spent most of the day below 0 it has not committed to the bulls or the bears today. Currently at -437

Jeff Bailey : 12/3/2007 1:39:45 PM

VXO.X 25.18 +1.49% ...

Jeff Bailey : 12/3/2007 1:39:23 PM

VIX.X 23.85 +4.28% ...

Jeff Bailey : 12/3/2007 1:38:15 PM

Swing trade call exit alert! ... Let's go ahead and sell the one (1) Altria MO Jan $70 Call (MO-AN) at the bid of $7.95.

MO $77.68 +0.15% ...

Linda Piazza : 12/3/2007 1:36:38 PM

First the SPX tested and broke through the descending trendline off Friday's early morning high. Currently it's testing the rising trendline off Friday's last swing low of 1470.89, at about 2:00 Friday afternoon. It's not breaking through yet, with the SPX currently at 1473.27 and that trendline crossing at about 1472.75. Can't count on anything on a choppy day like today, but I should point out that we're entering a typical stop-running time of day when moves are even more untrustworthy.

Jeff Bailey : 12/3/2007 1:33:47 PM

TRIN 1.39 ...

NYSE A/D 1,438/1,785

NYSE NH/NL 58/124

Jeff Bailey : 12/3/2007 1:32:33 PM

YM 13,369

Keene Little : 12/3/2007 1:22:44 PM

As part of what I'm anticipating for at least the first part of the week, we could get a choppy decline that looks something like this SPX 10-min chart: Link . This is speculative but the intraday price pattern leads me to believe we could get another push back up to today's high and then roll over to a new low below Friday's (may not happen until tomorrow).

Jeff Bailey : 12/3/2007 1:03:56 PM

TRINQ 0.78 ...

NASDAQ A/D 1,333/1,589

NH/NL 69/126

Linda Piazza : 12/3/2007 1:03:50 PM

Still choppy. The SPX has come back down to retest the descending trendline off Friday's early morning high. After breaking through that trendline, it never even topped Friday's last little swing high of 1481.38, so I don't consider the breakout confirmed.

Jeff Bailey : 12/3/2007 1:03:18 PM

TRIN 1.26 ...

NYSE A/D 1,571/1,639

NH/NL 57/119

Jane Fox : 12/3/2007 12:58:44 PM

I am long YM from 13422 with a stop at 13372 which is 50 points so have a target at 13472.

Keene Little : 12/3/2007 12:57:30 PM

Normally the kind of choppy bounce since this morning's low would have me looking to get short and I'm tempted here. But I'm a little leery about a spike up after lunch before it rolls back over (assuming it will roll back over).

Jeff Bailey : 12/3/2007 12:37:46 PM

Sector Losers ... Healthcare Service -0.95%, NASDAQ Telecom -0.87%, Insurance -0.68%, Biotechnology -0.57%

Linda Piazza : 12/3/2007 12:37:40 PM

The SPX has now broken above the descending trendline off Friday's early morning high. It's at 1480.11 as I type. It's got to break above the last Friday swing high at 1481.38 before it confirms that breakout, at least in my opinion, but those who want to see equities continue to climb want to see the SPX continue forming 15-minute closes above the 9-ema, now at 1478.27. I still would be as leery of counting on anything to the upside as yet as I was of anything to the downside, but if the SPX should continue climbing, then watch the 1488.50-1491 zone for next resistance. Know how you'll deal with your bullish positions if that zone should be touched.

Jeff Bailey : 12/3/2007 12:36:21 PM

Sector Winners ... Gold Bugs +1.55%, Home Construction +1.21%, Utilities +1.15%, Oil Service +1.07%

Jane Fox : 12/3/2007 12:33:08 PM

The US$ is up against resistance but the MACD says it has further to go. I think it could go all the way back to 80.00 and if it does wouldn't that put a little fear into Gold bugs. Link

Jane Fox : 12/3/2007 12:20:12 PM

Keene, thank you for the eCBOT update. It does seem to be working now.

Jeff Bailey : 12/3/2007 12:19:55 PM

Chicago Fed Survey: US Econ "Somewhat Below Potential" In 08
2008 GDP Seen Up 2.5%, Steady From 2007
CPI Seen +2.8% In '08, Vs. +3.6% In '07
Jobless Rate Seen 5% '08, Vs. 4.7% '07
Housing Drag On Econ To Moderate In '08

Linda Piazza : 12/3/2007 12:13:38 PM

Now the SPX is jammed up against the descending trendline off Friday's high, testing that. Further resistance is at 1480.71 on 15-minute closes.

Keene Little : 12/3/2007 12:07:17 PM

SPX hit resistance at its downtrend line from Friday at 1479.40. If it heads for the bottom of its flag pattern that's currently near 1468, and dropping with time.

Jane Fox : 12/3/2007 12:06:29 PM

The action today is really quite bullish. SPX had a very nice rally last week finishing it with a faceoff at major resistance on Friday. I suspected the SPX would fall this week and then we could reassess who was winning, the bulls or the bears depending on where the market closed. Link

Keene Little : 12/3/2007 12:02:41 PM

Jane, IB reported a problem but it seems to be showing quotes. I haven't tried a trade to see if it's OK.

Jane Fox : 12/3/2007 12:00:12 PM

Is anyone else having issues with eCBOT? Or is it just TS?

Jane Fox : 12/3/2007 11:57:17 AM

This from TS - Currently, we are experiencing an issue with eCBOT. During this time, orders will not be able to be routed to eCBOT. We are working to resolve this issue as quickly as possible. We will be sending an update when we have more information.

Jane Fox : 12/3/2007 11:56:33 AM

Ecbot is not available for trading - Ah Gee!!! Not again!!

Keene Little : 12/3/2007 11:56:01 AM

Volume has died off steadily this morning and the lunch hour should be a real snoozer.

Keene Little : 12/3/2007 11:31:55 AM

The first line of Linda's 11:03 post says it all. We're right in the middle of a choppy zone and I don't see any setups. This is a good time to just wait for some clarity. I think there will be more downside but new-month money could be just enough to hold the market up today.

Jeff Bailey : 12/3/2007 11:11:07 AM

TRINQ 0.68 ...

NASDAQ A/D 1,182/1,634

NH/NL 60/93

Jeff Bailey : 12/3/2007 11:10:34 AM

TRIN 1.38 ...

NYSE A/D 1,346/1,762

NYSE NH/NL 45/99

Linda Piazza : 12/3/2007 11:03:54 AM

Choppy, choppy. You don't want to count on anything too much today. On the SPX, for example, the historical and Keltner support in the 1471-1472 range held on 15-minute closes, so far, and the SPX finally closed a 15-minute period above the 9-ema, erasing that tentative downside target. That holding of support was a warning not to trust the tentative downside target. However, it's not exactly as if the SPX has exhibited great strength yet, either. For example, it's still below the descending trendline off Friday's early high, with that trendline now crossing at about 1480.

Deciding on a possible scenario before the market opens (see my 9:24:30 post for one possible one I was watching for today) allows you to determine your stance toward the markets that day. Will I trade or will I stay out and what conditions do I need to see? Then you can test market action against that scenario. My early potential scenario told me that market action was likely to be choppy. If I were a day or swing trader, I would have been cautious about entering trades with that kind of scenario in my mind, but I'd have been testing it constantly to see perhaps if I were wrong. Maybe a trend was going to get started in one direction or the other. For example, if the SPX bursts through the top of that descending trendline, maybe it will zoom up to retest Friday's high, although I'd certainly be wary of what happens there if I were in bullish trades. So far, I'd have been deciding that my scenario was holding up and I'd have likely been glad I hadn't entered a play, based on what I was seeing before the market opened and the scenario I had formed. By later today, perhaps that will have changed, but sometimes it's just as important to miss the bad trades as it is to catch the good ones.

Jeff Bailey : 12/3/2007 11:00:48 AM

DEXION ABSOLUTE SWELLS TO $2.78B AFTER SHARE ISSUE

DJ- Investment assets in listed fund of hedge funds Dexion Absolute swells to $2.78 billion after a $950 million share issue, indicating that investors haven't lost their appetite for hedge funds despite volatile markets.

Jeff Bailey : 12/3/2007 10:57:02 AM

MARK TO MARKET - Former Paperboy Gives Advice On Tipping ... Jim Murphy says to be generous to the paperboy or papergirl who has given you good service all year in any kind of weather. As for data, Jim says, in a week that includes the monthly jobs report, there is hardly ever anything else to top it.

Jeff Bailey : 12/3/2007 10:55:26 AM

AGRIUM TO BUY UAP IN $2.65B DEAL

DJ- Calgary fertilizer producer agrees to pay $39 a share for UAP holdings, a 30% premium over Friday's closing price, in a transaction valued at $2.65 billion, including about $487 million in debt.

Jeff Bailey : 12/3/2007 10:52:12 AM

Semiconductor HOLDRs (SMH) $32.50 +0.55%

Keene Little : 12/3/2007 10:51:36 AM

So far SPX has remained inside the bull flag that I showed on its 30-min chart. The top of it is currently near 1480 and the bottom at 1470.

Jeff Bailey : 12/3/2007 10:40:08 AM

GLOBAL CHIP SALES RISE 5% IN OCTOBER

DJ- Worldwide semiconductor sales rise 5% versus a year ago to $23.1 billion, thanks to the number of units sold making up for industrywide price cutting, according to the Semiconductor Industry Association.

Jeff Bailey : 12/3/2007 10:39:32 AM

MIDDLE EASTERN ACQUISITIONS MORE THAN TRIPLE IN '07

DJ- Acquisitions by Middle Eastern parties have more than tripled to $96.6 billion, Thomson Financial says. More than 80% of this activity has taken place outside the region, boosted by heightened profile of Middle Eastern sovereign wealth funds.

Jeff Bailey : 12/3/2007 10:38:09 AM

Russell 2000 ($RUT) 766.03 -0.22% Link ... Session low so far has been 761, high so far has been 768.

Linda Piazza : 12/3/2007 10:37:03 AM

I'm no longer getting a message from my broker that industry-wide, quotes for options on securities are not available. I'll delete my earlier notice.

Jeff Bailey : 12/3/2007 10:36:26 AM

NASDAQ-100 ($NDX) 2,086 -0.15% Link ... Session low so far has been 2,077, high so far has been 2087.

Keene Little : 12/3/2007 10:35:50 AM

I see we're getting the expected drop but so far it's looking corrective. This could mean we're going to get another leg up for a larger a-b-c move up from Friday's low before tipping back over. Based on the pattern I'm seeing so far I expect Friday's high to hold.

Linda Piazza : 12/3/2007 10:35:13 AM

No sooner did I type that last post than the chart updated again, showing the USDJPY now at 110.35. It's still maintaining a series of lower highs and lower lows, but certainly coming up to challenge the top of its descending channel. A 15-minute close above about 110.50 or an intra-period move above 110.62 are needed to begin to change the demeanor of this currency pair.

Jeff Bailey : 12/3/2007 10:34:45 AM

Dow Industrials (INDU) Link ... 13,352 -0.14% ... session high so far has been 13,380, low so far 13,312.

Linda Piazza : 12/3/2007 10:33:13 AM

The USDJPY is bouncing, now at 110.25 and off the 110.12 low. However, at least so far, it's maintaining the series of lower highs and lower lows, and is also roughly maintaining 15-minute closes at or below the 15-minute 9-ema, now at about 110.27.

Jeff Bailey : 12/3/2007 10:32:45 AM

S&P 500 ($SPX) Link ... 1475.24 -0.39% ... Session high so far has been 1479.90, low so far 1471.32.

Can't chart X to 1,490 at this point.

Jeff Bailey : 12/3/2007 10:31:07 AM

Nikkei-225 ($NIKK) Link

Finished down 51 points, or -0.33% at 15,629. Session high was 15,799.69, session low was 15,577.69.

Can't chart X's to 15,800. Trade at 15,600 does see 3-box reversal lower.

Linda Piazza : 12/3/2007 10:28:14 AM

For you OEX traders, the OEX has set a tentative downside target of 684.30, but, like the SPX, it's holding historical support from Friday's 2:00-ish swing low of 686.78 and tentative Keltner support at 686.69 on 15-minute closes. It's coming up now to retest resistance up to 689.67 on 15-minute closes. If that resistance holds, the downside target is maintained, but if the SPX closes above it on a 15-minute close, then the target is erased. The setup is tentative now as markets still determine how they'll react to the ISM, so don't write any of this in stone on your trading ledgers just yet. Don't put too much faith in a downside target when historical and other support is stubbornly holding.

Jeff Bailey : 12/3/2007 10:28:00 AM

TOKYO SHARES MIXED ON ECONOMIC WORRIES

DJ- Tokyo stocks end mixed with the Nikkei retreating after its rise last week sparked profit-taking from recent gainers such as shipping firms. A drop in Japan's capital spending adds concerns about economic recovery.

Jeff Bailey : 12/3/2007 10:27:05 AM

BOSTON FED PRESIDENT SEES MORTGAGE REFINANCING OPTIONS

DJ- Many borrowers with subprime mortgages have reasonably good credit and may be able to refinance into a less costly mortgage by taking advantage of government programs, Eric Rosengren, president of the Federal Reserve Bank of Boston says.

Jeff Bailey : 12/3/2007 10:26:12 AM

DISCOVER TO TAKE CHARGE, PLANS $1B BUYBACK

DJ- Discover Financial Services says it may take a fiscal 4Q charge in excess of $400 million related to its U.K. credit-card business and announced a $1 billion stock buyback.

DFS $17.22 -0.86% ...

Jeff Bailey : 12/3/2007 10:23:48 AM

PUTIN'S PARTY WINS VOTE CRITICIZED BY FOREIGN OBSERVERS

DJ- Russia's president Vladimir Putin hails his party's sweeping victory in the country's parliamentary vote yesterday as a validation of his leadership but foreign observers and Russian opposition groups say the vote was manipulated.

Jeff Bailey : 12/3/2007 10:23:08 AM

VENEZUELA PRESIDENT CONCEDES DEFEAT IN REFORM

DJ- In a stunning reversal, Hugo Chavez, Venezuela's virulently anti-U.S. leader, conceded that voters had narrowly defeated a constitutional reform he had sought to expand his executive powers.

Jeff Bailey : 12/3/2007 10:22:36 AM

US Oil Fund (USO) $69.00 -1.30% ...

Jeff Bailey : 12/3/2007 10:21:35 AM

OPEC OUTPUT POLICY DECISION CALLED 'WIDE OPEN'

DJ- Saudi Arabia's Oil Minister Ali Naimi says that OPEC's decision this week on oil policy was "wide open," declining to tip his hand ahead of Wednesday's gathering.

Jeff Bailey : 12/3/2007 10:21:05 AM

LENNAR, MORGAN STANLEY FORGE LAND MODEL

DJ- Lennar sells 11,000 home sites to a venture mostly owned by the real-estate arm of Morgan Stanley for $525 million, a large land sale that signals that investors have begun to pounce on bargain deals.

LEN $15.47 -2.39% ...

MS $51.82 -1.70% ...

Jeff Bailey : 12/3/2007 10:19:47 AM

METLIFE SEES '08 EARNINGS BELOW ANALYSTS' VIEW

DJ- Insurer expects 2008 operating EPS of $5.90-$6.20, below analysts' expectations for earnings of $6.26. Firm projects operating return on equity of 13% to 13.6% and notes goal of boosting that to 15% by 2010.

MET $64.09 -2.28% ...

Jeff Bailey : 12/3/2007 10:18:39 AM

VIVENDI TO ACQUIRE CONTROLLING STAKE IN ACTIVISION

DJ- In move that joins companies behind console hit Guitar Hero and online phenomenon World of Warcraft, French entertainment and telecommunications group plans to acquire a controlling stake in U.S. videogame maker by merging its own gaming division into Activision and contributing cash to form a new company, Activision Blizzard. Vivendi will pay $27.50 per share and end up with up to 68% ownership of the new company.

ATVI $25.97 +17.24% ...

Linda Piazza : 12/3/2007 10:17:25 AM

I'm looking at the ISM numbers that Jane posted, noting that the employment component has now dropped into contraction territory. The employment report the end of this week could be a biggee as the FOMC is making rate-cut decisions on the 11th, and if this weakness shows up on Friday's employment report, too, some equity bulls might reason that gives the Fed even more reason to cut. In the past, there might have been a knee-jerk response to send equities higher, but that's not happening this morning, at least not yet. Instead, the SPX tests Friday's 2:00 swing low of 1470.89, with the SPX at 1473.35 as I type, just off its 1471.32 low of the day. Potential support also exists at 1470.90 on 15-minute closes, but if the SPX can't maintain 15-minute closes above 1474.68, then it's set a potential downside target of 1464.44.

Right now, in the early reaction to the ISM, I wouldn't count on any targets being met, particularly when the SPX is testing historical support and hasn't broken through it yet. Bulls just need to know that a 1465-ish downside target has been set and to evaluate whether they want to ride the SPX down that far if this historical support is broken and the SPX heads that direction. Don't count on the targets being met, but do plan what-if scenarios.

Jeff Bailey : 12/3/2007 10:15:43 AM

Monster Worldwide (MNST) $32.85 -2.27% ...

Jeff Bailey : 12/3/2007 10:15:19 AM

Manpower (MAN) $60.76 +0.03% ...

Jeff Bailey : 12/3/2007 10:14:36 AM

US ISM Nov. Mfg. Index 50.8 Vs. Oct. 50.9

Prices Index 67.5 Vs. 63.0
Employment 47.8 Vs. Oct. 52.0
New Orders 52.6 Vs. Oct. 52.5
Production 51.9 Vs. Oct. 49.6
Inventories 46.9 Vs. Oct. 47.2

Jane Fox : 12/3/2007 10:10:50 AM

VIX is spiking higher here so I would not be long.

Linda Piazza : 12/3/2007 10:09:05 AM

The USDJPY so far still maintains its potential Keltner target that's now at 109.72. The USDJPY is at 110.20 as I type. Equity bulls want to see it pull up and erase that downside target, but for now, the target is holding and it's the equity bears who are getting encouragement from its action.

Jane Fox : 12/3/2007 10:07:22 AM

WASHINGTON (MarketWatch) - The nation's manufacturers cut back production slightly in November, the Institute for Supply Management reported. The ISM index inched lower to 50.8% in November from 50.9% in October. This is the fifth straight monthly slip in the index, but it remains slightly above the 50% threshold indicating expansion. The decline in November was unexpected. The consensus forecast of estimates collected by Marketwatch was for the index to inch higher to 51%.

Linda Piazza : 12/3/2007 10:05:55 AM

The Fed has announced a repo of $8.750 billion. A repo of $6.500 billion was maturing today. That means that there is now a net add of $2.250 billion. The total sloshing through the system is $49.750 billion.

Jane Fox : 12/3/2007 10:04:25 AM

U.S. Nov. ISM inventories index 46.9% vs 47.2% in Oct.

Nov. ISM employment 47.8% vs 52.0% in Oct.

Nov. ISM manufacturing index 50.8% vs 50.9% in Oct.

Nov. ISM manufacturing index below 51.0% consensus

Linda Piazza : 12/3/2007 10:02:29 AM

So far, the SPX has maintained 15-minute closes above Keltner support that's now at 1474.75, but it looks as if that's about to be tested again. Next support on this chart is now at 1471.96, and we know there's likely to be support on the daily chart in this zone, too, support that equity bulls want to see holding.

Jane Fox : 12/3/2007 10:02:22 AM

NOV ISM MANUFACTURING: 50.8 V 50.7E; PRICES PAID: 67.5 V 65.5E

Jane Fox : 12/3/2007 9:58:19 AM

Remember the ISM out at 10:00.

Jeff Bailey : 12/3/2007 9:46:00 AM

Simon Property Group (SPG) $97.50 -0.96% ...

Jeff Bailey : 12/3/2007 9:45:27 AM

Wynn Resorts (WYNN) $123.98 -2.33% ... reversing lower PnF "sell signal" (see Friday's MM). -1

Linda Piazza : 12/3/2007 9:43:52 AM

The USDJPY has set a tentative downside target of 109.71 on the 15-minute Keltner chart. Not all such targets are hit, of course, but this would be an important level for the USDJPY to maintain if it is hit. Also, if it does move down toward that level, it may be difficult for U.S. equities to maintain much upward traction.

As I'm typing, I'm noting that the TRAN is diving. It's moving toward 4592-4600 support, so watch that, too.

I'll be away from the desk for a few minutes.

Jeff Bailey : 12/3/2007 9:42:43 AM

Forest, Mylan get FDA approvable letter for Nebivolol ... Reuters Story Link

FRX $37.86 -1.78% ...

MYL $14.26 -0.83% ...

Jane Fox : 12/3/2007 9:40:03 AM

This week should tell us if the bulls have control of the S&P or if the bears do. If we get a close above 1490 then that means the bulls have the reins but if the SPX is not able to close above 1490 then the likelihood the bears will take off the reins and get a close below 1400 increases. Link

Linda Piazza : 12/3/2007 9:35:49 AM

The SPX's 15-minute chart shows potential support on a 15-minute close at 1474.65, but I'd be leery of trusting a 15-minute Keltner chart on a Monday morning. Just mentioning potential support. Next support below that on this chart is 1471.92 on a 15-minute close.

Linda Piazza : 12/3/2007 9:33:55 AM

The daily chart suggests SPX support on a daily close at 1472.76.

Jane Fox : 12/3/2007 9:32:14 AM

And the AD line opens at a neutral -210 which is just about where I suspected it would.

Linda Piazza : 12/3/2007 9:24:30 AM

Here's an it-would-not-surprise-me scenario for the SPX into the FOMC meeting: Link I'm not predicting that will happen, but I like to form what-if scenarios to test early action against. Why? If this one plays out, for example, we know from past experience how choppy prices can be when a right shoulder is being chopped out and we could decide ahead of time if we were willing to trade a possibly choppy period in the market. It would tell us where to look for potential support, either in the 1470-ish zone for a truncated right shoulder or deeper, in the 1444-1450 zone for a right shoulder that is symmetrical with the left shoulder. It would tell us that if we see prices fall much below 1444, then the whole scenario is invalidated and that bears were gaining strength again. It would tell us that if prices maintain daily closes above 1472, then bulls are winning the day because bears can't even drive prices down to a symmetrical level with the left shoulder's support. It would also tell us that between 1444-1472, we don't know much of anything at all.

Jane Fox : 12/3/2007 9:21:55 AM

And if you believe Crude as further downside in its "future" (no pun intended) then you have to believe Gold does as well since these two are joined at the hip. Link

Jane Fox : 12/3/2007 9:20:16 AM

I have been saying Crude could revisit $85.00/bl before it finds support and it does look like it is on its way there. Link

Jane Fox : 12/3/2007 9:18:43 AM

US$/Yen is making a series of lower lows and highs telling me the American markets will struggle, at least at the open.

Crude and Gold are both lower and the US$ is up these markets are in sync. Link

Jane Fox : 12/3/2007 9:16:32 AM

Futures markets are suggesting the Cash markets will open just about were they closed on Friday. The NDX futures are testing their overnight lows as I type so any bearish after the open will probably be lead by NDX. Link

Jane Fox : 12/3/2007 9:10:30 AM

WASHINGTON (MarketWatch) -- Research at the Boston Fed suggests that the foreclosure crisis in subprime mortgages will get worse before it gets better, said Bank president Eric Rosengren on Monday. Just how much worse depends on the outlook for the economy and housing, he said. "Our forecast is quite dependent on how far home prices fall," Rosengren said. He urged community banks and states to focus on the 87% of subprime loans that are not seriously delinquent and where action may avoid future problems. Rosengren said he was not advocating any bailout, instead wanted to use "existing programs for what they were designed to do." Some of the programs administered by the Federal Housing Administration could be modernized, he suggested. Lenders should also consider extending the terms of current loans or refinancing.

Linda Piazza : 12/3/2007 9:09:55 AM

Last week, the USDJPY climbed to a point just a few pennies shy of the 38.2% retracement of its drop off its October high. It's lagging equity indices a bit in this regard as many of them retraced 50% or close to 50% of their drops off their October low, but still it was climbing substantially off its recent low.

During the overnight session, the USDJPY has dropped again. It's now at 110.33 as I type, trending down toward 109.74-110.00 potential support. Equity bulls want that support to hold. Equity bears need to be careful of their positions if that support is held and the USDJPY begins to bounce from it. Don't let this currency pair be your end-all and be-all guide, but do put it on your radar screen.

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