Option Investor
Printer friendly version
Jeff Bailey : 12/6/2007 2:01:15 AM

China Tel (CHA) $85.83 ... current OPEN trade in MM profiles.

Jeff Bailey : 12/6/2007 2:00:11 AM

Alert! ... Hang Seng ($HSI) up 313 at 29,659 Link ...

Session high has been 29,889, session low 29,561.

Xs to 29,500 does generate a reversing higher buy signal.

Jeff Bailey : 12/6/2007 12:25:49 AM

I've said it before and I'll say it again ... "stocks tend to lead the commodities price."

BPOILS reversing back up, have to wonder a bit if DUG's 11/27/07 was "the high" that forecasted the decline in crude?

Or is there some more selling in the energy stocks after this biblical bull run for stocks the past 7-days.

Jeff Bailey : 12/6/2007 12:21:40 AM

DUG $40.93 ... bears hanging on by a thread today.

Jeff Bailey : 12/6/2007 12:20:59 AM

Dorsey's BPOILS reversed up to "bull alert" from "bear confirmed" today.

Jeff Bailey : 12/6/2007 12:14:10 AM

$GASO:$WTIC 0.40-box chart Link ... one way to visualize "crack spread" or margins discussed in EIA's report.

You can click the Wide Chart button to see back further in time.

Jeff Bailey : 12/6/2007 12:08:26 AM

EIA's This Week In Petroleum Link

Jeff Bailey : 12/6/2007 12:04:27 AM

At 12/4/07 weighting ... Top 10 accounted for 45.58% weight. Next 10 14.48%. Next 10 9.97%. Total for the 30 is 70.03%. Link

Jeff Bailey : 12/5/2007 11:43:33 PM

Oh ... BIDU has about 0.5% weighting.

Jeff Bailey : 12/5/2007 11:38:30 PM

NASDAQ-100 Top 30 Weighted (as of 12/04/07) at this Link

Some changes since 07/03/07 update Link

I think the "jump" right after 04:00 in QQQQ is due to computers shutting off as they ended re-weight of CMCSA during regular session. CMCSA will likely fall from 12/04/07 weighting. (lost some market cap today)

Keene Little : 12/5/2007 11:13:44 PM

Thursday's pivot tables: Link and Link

The market internals supported Wednesday's rally and the price pattern supports another rally leg, potentially into a high around FOMC (which could be met with a sell-the-news reaction but we'll worry about that if and when it sets up). There are some potentially tough resistance levels just above so a brief rally could be followed by another deeper pullback (or worse) so caution is advised on both sides. That's nothing new considering the whippy market we've had to deal with. I show what I think are the two most probable price paths from here (subject to change at a moment's notice--wink) on the following 60-min charts:
DOW: Link
SPX: Link
NDX: Link
RUT: Link

OI Technical Staff : 12/5/2007 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 : 12/5/2007 9:20:57 PM

Here's StockCharts.com's BPOTC equivalent and the $BPCOMPQ Link

Jeff Bailey : 12/5/2007 9:19:33 PM

All major market bullish percent with exception of BPOTC (currently 30.42%, needs 36.00% to reverse up) now in column of X.

Jeff Bailey : 12/5/2007 9:03:12 PM

Bear Correction Alert! ... At today's close, Dorsey/Wright's NYSE Comp. Bullish % (BPNYSE) has reversed back up to "bear correction" status from "bear confirmed" at 40% (40.20%).

Note: Dorsey's BPNYSE reversed up on 8/22/07 at 38%, then reversed back down on 10/22/07 at 56%.

Here's StockCharts.com's $BPNYA Link

Jeff Bailey : 12/5/2007 7:43:30 PM

Pivot Matrix Recap at this Link

Note: TRIN low was 0.52 today.

Educational recap from Monday, Tuesday and today regarding VIX alone and TRIN added.

Jeff Bailey : 12/5/2007 7:16:37 PM

YM alert! 13,501 on evening open.

Jeff Bailey : 12/5/2007 6:48:35 PM

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

Jeff Bailey : 12/5/2007 6:42:25 PM

Closing U.S. Market Watch found at this Link

cl07f settled down $0.83, or -0.94% at $87.49.

Jeff Bailey : 12/5/2007 6:20:12 PM

Regional Bank HOLDRs (RKH) ... Daily interval chart similar to 05:49:40 post at this Link

See the BLUE 61.8%? That's the type of observation that hade be developing my "Bear fit 38.2%" retracement.

Jeff Bailey : 12/5/2007 5:49:40 PM

BIX.X Daily interval chart (per 05:11:52 and 5:17:50) at this Link

Jeff Bailey : 12/5/2007 5:38:07 PM

I think I really "fat fingered it" I meant to type $130.05!

Jeff Bailey : 12/5/2007 5:37:57 PM

For those still short the Regional Bank HOLDRs (RKH) from my 2/23/07 MM profile at 10:15:51 Link , I'd look to take some profits.


Jeff Bailey : 12/5/2007 5:24:22 PM

If someone were to ask me a question as to "How certain is the market that the BIX.X has found a bottom?" ... my analysis utilizing fibonnaci retracement would be 19.1%.

Jeff Bailey : 12/5/2007 5:17:50 PM

Regan! On that last retracement, check out how the BIX.X traded the resulting 80.9%, 61.8%, 50%, 38.2% and 19.1% ON THE WAY DOWN even those levels were not "known" until 11/20/07.

Or... were they?

Jeff Bailey : 12/5/2007 5:11:52 PM

Regan! Take a conventional retracement on the BIX.X from its all-time high of 414.84 then your 0% to the 11/09/07 low of 289.85.

Look at it. What did it DO at each close after that, and for how long?

Leave that retracement there.

Now take ANOTHER from the same high, but now anchor at recent low.

Look at it. What has it DONE?

Jeff Bailey : 12/5/2007 4:52:11 PM

MBA Revisions for 11/28/07 Report ... Due to an error by one of the larger reporting companies for the Thanksgiving-shortened week ending November 23, the indices reported in the November 28, 2007 press release have been revised. The seasonally adjusted market composite index for that week was 646.3 rather than the 652.5 originally reported. The refinance index was 2093.0 rather than the 1862.9 originally reported and the seasonally adjusted purchase index was 403.2 rather than the 450.1 originally reported.

Jeff Bailey : 12/5/2007 4:34:15 PM

About 10 "top stories" from today. So many to choose from.

Jeff Bailey : 12/5/2007 4:34:10 PM

Last week's a bit concerning to me. Unless some had "lost their minds," and not started refinancing from ARM to FIXED when given a chance, had me concerned that banks just weren't lending.

Jeff Bailey : 12/5/2007 4:34:04 PM

There's those refinances. MAJOR REVISIONS.

Jeff Bailey : 12/5/2007 4:33:46 PM

Like I said ... "what a day!"

Jeff Bailey : 12/5/2007 4:33:37 PM

MBA's Weekly Application Survey at this Link

MAJOR REVISIONS to last week's report due to error!

Jeff Bailey : 12/5/2007 4:23:38 PM

That reminds me ...

Jeff Bailey : 12/5/2007 4:22:18 PM

Interesting ... I hadn't thought of that as an option.

Jeff Bailey : 12/5/2007 4:21:49 PM

5-year Mortgage Rate Freeze Looms ... AP Story Link

Jeff Bailey : 12/5/2007 4:07:16 PM

US Oil Fund (USO) $68.73 -0.96% ... $0.50 box chart ends with an "O" at $68.50. (prior displayed X's to $71.00 don't count) as supply outstripped demand.

Jeff Bailey : 12/5/2007 4:03:31 PM

BOC's Carney: Bank Hasn't Intervened In Forex Market Since 1998

Jeff Bailey : 12/5/2007 4:01:53 PM

Wow! I'm exhausted. What a day for traders.

Jeff Bailey : 12/5/2007 4:01:08 PM

DNA $66.16 -9.09% ... still halted.

Could have NYSE-listed stock implication if it had been released for trade during regular session. Thus tight stops on YM for day trade bulls.

Jeff Bailey : 12/5/2007 3:59:54 PM

BOC's Carney: C$ Volatility Can't Be Accounted For By Fundamentals

Jeff Bailey : 12/5/2007 3:58:49 PM

NYSE A/D 2,421/855

TRIN 0.73

Jeff Bailey : 12/5/2007 3:58:19 PM

YM high has been 13,481

Jeff Bailey : 12/5/2007 3:58:01 PM

YM 13,461 ... should go out near highs of session.

Jeff Bailey : 12/5/2007 3:57:24 PM

YM 13,449 ... 19.1% "dynamic" at 13,453.

Jeff Bailey : 12/5/2007 3:56:01 PM

YM stopped alert! ... 13,450

Jeff Bailey : 12/5/2007 3:54:32 PM

TRIN 0.72 ...

Jeff Bailey : 12/5/2007 3:54:09 PM

YM long alert here at 13,460. Stop 13,450. Target 13,500

Linda Piazza : 12/5/2007 3:53:54 PM

SPX traders are impatient, I guess. The SPX is ending up where I expected it to be next Monday, in the potential scenario I laid out early this Monday morning: Link If you're in an SPX trade or contemplating one, you're going to have to go on faith this afternoon. The resistance is obvious. The ADP rushed the push up to the neckline by a day or two. The inverse formation has not been confirmed but it's got potential to be, but inverse head and shoulders are sometimes invalidated just as regular ones are. All you know this afternoon is that the SPX is parked at resistance.

Jeff Bailey : 12/5/2007 3:49:53 PM

YM long stopped alert! 13,458

Keene Little : 12/5/2007 3:48:04 PM

It's getting a little whippy into the close but the bulls are doing a good job in holding this up and keeping the bears away.

Jeff Bailey : 12/5/2007 3:46:44 PM

YM long raise stop alert! ... to 13,458.

Jeff Bailey : 12/5/2007 3:44:59 PM

DIA 134.61 .. new session high.

Jeff Bailey : 12/5/2007 3:44:26 PM

TRIN 0.73

Jeff Bailey : 12/5/2007 3:43:58 PM

YM 13,475 ... new session high!

Jeff Bailey : 12/5/2007 3:43:42 PM

YM Long raise stop alert! ... to 13,450.

Keene Little : 12/5/2007 3:39:40 PM

Didn't mean to step on Jeff's trade--didn't see it until after I made my post.

Keene Little : 12/5/2007 3:39:04 PM

Volume is tailing off during this bounce so I'm not interested in the long side with a new high for the bounce.

Jeff Bailey : 12/5/2007 3:36:46 PM

YM Long alert! here at 13,450. Tight stop at 13,437. Target 13,500.

Jeff Bailey : 12/5/2007 3:30:15 PM

10-year ($TNX.X) finished up 2.2 bp at 3.911% ...

Keene Little : 12/5/2007 3:27:41 PM

The DOW and SPX briefly poked above today's downtrend lines, sniffing for some stops up there, and have pulled back a little. Another push higher would be bullish for the last 30 minutes. Try a long play in that case.

Linda Piazza : 12/5/2007 3:23:03 PM

The RUT is back to test the neckline of its rough H&S, confirmed at about the same time the TRAN confirmed its version. Depending on how you draw the RUT's version, the neckline is from 760.72-763.60. The RUT is at 761.84 as I type.

Jeff Bailey : 12/5/2007 3:22:21 PM

YW Linda! I wish I had time to calculate pivots levels of the currencies. I'd show them to you if I did.

Jeff Bailey : 12/5/2007 3:21:13 PM

TRINQ 0.83

Jeff Bailey : 12/5/2007 3:21:03 PM

TRIN 0.79

Jeff Bailey : 12/5/2007 3:20:55 PM

Buy program premium SPY $148.54

Linda Piazza : 12/5/2007 3:20:33 PM

Thanks, Jeff, for the forex quotes. Where are my charts, complete with Keltner setups? Smile. Actually, that's a good sheet and a good reference for forex prices at a glance. I still have to sort this out with my provider.

Keene Little : 12/5/2007 3:19:19 PM

New bounce high nearing stops, depending on where you've got them, but I'm not so sure it's going to hold. Keep an eye on the downtrend line from today's high. The current bounce could be just another correction. Short against that downtrend line is the recommendation from here (might see a small push higher still before rolling back over).

Linda Piazza : 12/5/2007 3:16:56 PM

The TRAN is back to the rising trendline off Tuesday's low, actually a little above it again. There was no downside follow through on the TRAN after confirming that H&S or falling through that trendline. Just as the confirmation was a heads-up for bulls, this lack of follow through should be one for bears. Something isn't right here.

Keene Little : 12/5/2007 3:11:30 PM

SPX is still hanging around its downtrend line from Oct 31st and also tested the low of this morning's opening range. A break below 1475 could usher in some strong selling but so far the market's holding on.

Jeff Bailey : 12/5/2007 3:09:40 PM

BBH Fact Sheet Link

Linda Piazza : 12/5/2007 3:09:33 PM

If the SPX ends up about here (1477.37 as I type), it will again be ending up at or slightly below the 30-sma after punching up through it during the day. This happened on Friday, for example, and closes have been below the 30-sma since then. Bulls don't want to see too many days when the SPX attempt to close above this average and fails to do so or attempts to punch up through or to the 200-sma and 72-ema and is pushed back. That would suggest some need to pull back to deeper support or else consolidate longer while the 10-sma support rounds up further and plays catch up. Anyway, it's a bit troublesome, so bulls would like a close that's well above that 30-sma as a first step in avoiding that pull-back scenario.

Jeff Bailey : 12/5/2007 3:08:33 PM

Be cognizant that option market makers know the news and know what's inside. BBH options likely "jacked"

Jeff Bailey : 12/5/2007 3:07:14 PM

Biotech HOLDRs (BBH) $171.36 -2.52% ...

Jeff Bailey : 12/5/2007 3:06:34 PM

NASDAQ Trading Halts ... Link

No time specification for DNA at this point.

Jeff Bailey : 12/5/2007 3:05:56 PM

FDA Panel Votes Against New Avastin Use ... AP Story Link

Jeff Bailey : 12/5/2007 3:01:51 PM

Here you go Linda! Link

Jeff Bailey : 12/5/2007 3:00:59 PM

TRINQ 0.84

Jeff Bailey : 12/5/2007 3:00:52 PM

TRIN 0.83

Jeff Bailey : 12/5/2007 3:00:36 PM

Buy Program Premium ... SPY $148.11

Jeff Bailey : 12/5/2007 3:00:19 PM

French Foreign Trade Minister: Euro Too Strong

Linda Piazza : 12/5/2007 2:59:39 PM

Jeff, I've been emailing my provider all day because I can't get updated USD/yen quotes or charts today. (See Jeff's 2:46:32 post.) So, I'd sure like to be watching them, but not doing so.

Linda Piazza : 12/5/2007 2:58:04 PM

You SPX and OEX traders have had some heads-up signs (those I've been pointing out on the TRAN and advdec line, for example, as well as those pointed out by others), and have had time to formulate your what-if plan in case weakness comes to the SPX, too. Put those plans into effect if your stops are hit.

Jeff Bailey : 12/5/2007 2:58:01 PM

OIH 175.80 -0.08% ... slips red.

Jeff Bailey : 12/5/2007 2:57:37 PM

OIX.X 819.88 +1.42% ...

Jeff Bailey : 12/5/2007 2:57:14 PM

DUG $41.45 -2.26% ...

Linda Piazza : 12/5/2007 2:56:38 PM

Advdec line at a new low for the day.

Keene Little : 12/5/2007 2:56:34 PM

Lower bounce high so lower your stop just above it. If we've got a bearish development here we should see the selling now acclerate (3rd wave down). If it's instead part of a choppy pullback then a slightly lower low should be found and then another bounce back up. So I want to keep pulling the stop down for now and take out as much as I can.

Linda Piazza : 12/5/2007 2:56:08 PM

The TRAN's price is now below the rising trendline off yesterday's low as well as the neckline of its H&S, although not far below. In addition, the RUT appears to have confirmed a rough H&S on its 15-minute chart, too,and it's dropping more heavily since doing so than the TRAN has been so far.

Jeff Bailey : 12/5/2007 2:55:19 PM

Could be seeing some MAJOR scenario adjustments.

Jeff Bailey : 12/5/2007 2:54:56 PM

TRIN 0.88

Jeff Bailey : 12/5/2007 2:54:47 PM

What action!

Jeff Bailey : 12/5/2007 2:54:41 PM

Buy program premium ... SPY $148.01 +1.12% ...

Jeff Bailey : 12/5/2007 2:54:18 PM

US Oil Fund (USO) alert! $68.35 -1.54% ... done

Jeff Bailey : 12/5/2007 2:50:55 PM

GBP/USD 2.02596 x 2.02583 -1.63% ...

Jeff Bailey : 12/5/2007 2:50:22 PM

USD/JPY 110.553 x 110.581 +0.63%

Jeff Bailey : 12/5/2007 2:49:59 PM

EUR/USD 1.46145 x 1.46165 -0.97%

Jane Fox : 12/5/2007 2:48:10 PM

And if the US$ is able to break through resistance then Gold should take a drubbing. Link

Jeff Bailey : 12/5/2007 2:47:51 PM

Goldcorp (GG) $32.27 -1.01% ... session low came within past 30-minutes ($32.03)

Jane Fox : 12/5/2007 2:47:08 PM

US $ is busting through resistance - well maybe not busting but it does seem to have enough gun powder to break through. Link

Jeff Bailey : 12/5/2007 2:46:32 PM

Linda! You watching currencies today?

Jeff Bailey : 12/5/2007 2:45:47 PM

US Dollar Index (DXY) alert! 76.32 +0.82% (30-min delayed) ... but look at it!

Jeff Bailey : 12/5/2007 2:44:14 PM

Gilead Sciences (GILD) $46.59 +3.05% ...

Jeff Bailey : 12/5/2007 2:40:24 PM

TRIN 0.86 ... TRINQ 0.86

Jeff Bailey : 12/5/2007 2:39:41 PM

Biogen Idec (BIIB) $73.40 +1.14% ...

Jeff Bailey : 12/5/2007 2:39:20 PM

Amgen (AMGN) $54.60 -0.56% ...

Jeff Bailey : 12/5/2007 2:38:19 PM

Biotech HOLDRs (BBH) $170.77 -2.86% ...

Linda Piazza : 12/5/2007 2:38:19 PM

My version of the advdec line continues to slip, another chink in the wall (armor? I'm getting my metaphors mixed up, aren't I?) for bullish plans. Bulls want to see a higher high in the advdec line; bears want to see it continue to print lower highs and lower lows.

Jeff Bailey : 12/5/2007 2:36:31 PM

Genentech (DNA) $66.16 -9.09% ... Halted for trade.

Linda Piazza : 12/5/2007 2:36:25 PM

The TRAN has confirmed its little H&S, but as I suspected it might do (2:25:32 post), it's attempting a bounce from the rising trendline off yesterday's low. So, no real outcome as yet. As a reminder, this TRAN action showed up as a sort of first chink in the wall indicating some concerns about bullish strength. This is because the TRAN sometimes leads the SPX, OEX and Dow, although its evidence is only a heads-up and not an indication that some action should be taken on this evidence alone. However, bulls would feel more comfortable if the TRAN bounces big and bears, if it declines. It's at 4666.42 as I type.

Jeff Bailey : 12/5/2007 2:30:56 PM

If we see a trade at $68.50, then the MARKET answeres question from 10:46:53 AM EST.

Jeff Bailey : 12/5/2007 2:29:40 PM

US Oil Fund (USO) $69.03 -0.53% ... $0.50 box chart Link

Remember, since we were in a column of O, the trades at $71.00 on chart would hold, but only if USO does NOT trade $68.50 prior to REGULAR session close.

Still, short-term traders will observe.

Keene Little : 12/5/2007 2:28:28 PM

SPX is back down to its broken downtrend line and it remains support until it's not.

Keene Little : 12/5/2007 2:26:25 PM

Stripped gear. OK, lower your stop to just above the high of the bounce. It's not much but I'll wait a while or for the next bounce before lowering the stop further. Free trade at this point and now let 'er rip.

Jeff Bailey : 12/5/2007 2:26:18 PM

QQQQ fact sheet (as of 12/4/07) Link

Linda Piazza : 12/5/2007 2:25:32 PM

The TRAN has a rising trendline off yesterday's low, with that trendline now at about 4658.25. If the TRAN should break through the neckline of its H&S (oops, doing so as I type), be aware of this trendline that might catch it and bounce it back above the neckline.

Linda Piazza : 12/5/2007 2:22:46 PM

To recap, there are two areas of concern for short-term bullish hopes: the TRAN's little potential H&S on its 15-minute chart and the advdec line (at least DTNIQ's version) mimicking of Friday's action. If the TRAN drops much further than 4668 and doesn't quickly reverse, it's confirming that little H&S. If it climbs above 4690 and doesn't quickly reverse, it's invalidating the formation. If the advdec line continues making lower highs and lower lows since the morning's first high, then it's continuing to signal a divergence between the advdec/SPX action on Friday and that today. These aren't end-all/be-all indicators that promise weakness in the SPX, OEX and Dow, but they're something to keep on your radar screen.

Jeff Bailey : 12/5/2007 2:21:28 PM

NASDAQ-100 Heatmap Link

Jeff Bailey : 12/5/2007 2:20:13 PM

Patterson UTI (PTEN) $19.38 +1.67% ... only "energy" in QQQQ/NDX.

Jeff Bailey : 12/5/2007 2:18:31 PM

USO $69.23 -0.24% ... not part of institutional arbitrage, but got hit.

Jeff Bailey : 12/5/2007 2:17:47 PM

DUG $40.74 -3.93% ...

Jeff Bailey : 12/5/2007 2:17:18 PM

Sell Program Premium ... SPY $148.58

Linda Piazza : 12/5/2007 2:17:35 PM

My advdec figures supplied by my feed show the advdec line acting a lot like it did last Friday. Last Friday, this advdec version zoomed up toward Keltner resistance first thing and then spent the rest of the day zigzagging downward while the SPX did the same. While the advdec version looks about like it did last Friday, at least so far, the SPX is not performing the same. The SPX never topped its early morning high again Friday, but it of course did today. So, either the advdec version or the SPX is not acting in accordance with what might be expected today. One of these might be acting "wrong." Which is it? In my experience, volume tends to lead price action, so as long as the advdec line continues making lower highs, I would be watchful about guarding any bullish profits, and be wary of rollover potential. If the advdec line changes and begins producing higher highs instead of lower ones, bulls would feel better.

Tab Gilles : 12/5/2007 2:16:34 PM

Weekly EIA Report Link

Keene Little : 12/5/2007 2:16:20 PM

Jeff doesn't see me but I'm stepping on his clutch to get it to slip. Can you tell I'm short?

Linda Piazza : 12/5/2007 2:10:18 PM

There's the potential for a little H&S on the TRAN's 15-minute chart, one that's been building since the first push higher this morning. The shoulder level is at about 4690, the head at 4699.50 or so. A push too much above 4690, especially if it's not quickly reversed, would then invalidate the thing, so equity bulls want that invalidation. The TRAN is now at 4685.09. The neckline is at about 4669.

Jeff Bailey : 12/5/2007 2:06:53 PM

If you bought today's low, and QQQQ trades $52.40 next week ...

Jeff Bailey : 12/5/2007 2:05:21 PM

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

Stopped on the SFB-XL as SPY traded $148.40.

Keene Little : 12/5/2007 2:04:21 PM

If the bearish play is to work from here it will have to mean Jeff's clutch is slipping or else his transmission strips a gear. Let's see how strong his truck is (wink).

Keene Little : 12/5/2007 2:01:37 PM

If you shorted today's high (SPX 1486), keep your stop at a new daily high. The current bounce should fail below that if the corrective wave count I'm considering is playing out. Any new high would negate that count but then there's some serious resistance levels just above and I wouldn't consider a new long play to be worth the poor risk:reward ratio that I like to use.

Jeff Bailey : 12/5/2007 1:57:19 PM

How many horses are under the hood ...

Jeff Bailey : 12/5/2007 1:54:45 PM

How are things looking in comparison to recently reviewed August inflection lows?

Jeff Bailey : 12/5/2007 1:53:09 PM

NASDAQ NH/NL running 69:126. Has DAILY ratio at 35.4%. 5-day 33.0% and 10-day 25.9%.

If we can hold this, then NASDAQ 10-day NH/NL would see needed 24.0% for 3-box reversal back higher.

Jeff Bailey : 12/5/2007 1:50:16 PM

How are those NH/NL at the NASDAQ in comparison with 11/29 and 11/30 and no similar PRICE levels?

Jeff Bailey : 12/5/2007 1:49:33 PM

QQQQ $51.58 +1.79% ... battles with MONTHLY Pivot.

Linda Piazza : 12/5/2007 1:50:51 PM

The SPX has been producing 15-minute closes beneath the 9-ema, not above it, but it's not unusual for the SPX to travel down to the other side of its smallest Keltner channel (1478.77 currently) during the lunchtime lull. We've reached a time now when traders often return from lunch--those who aren't gone today for Hanukkah--and prices are sometimes either run up to test to see if resistance will hold or run down to see if support will. Be careful during this stop-running time of day.

Oh, and Happy Hanukkah for those celebrating this holiday.

Jeff Bailey : 12/5/2007 1:43:28 PM

shorter dated 5-year ($FVX.X) has from 3.359% to 3.253% on the MBIA news.

Now back up 1.9 bp at 3.296%.

Jeff Bailey : 12/5/2007 1:41:32 PM

WILD trade unfolding in Treasuries.

Jeff Bailey : 12/5/2007 1:40:31 PM

For you long-time subscribers and especially those NEW to index trading. VERY important for INDEX traders to have understanding of "what is under the hood," as it relates to what is in the index you're trading, and in some cases, what is NOT in the index.

Jeff Bailey : 12/5/2007 1:37:57 PM

For you long-time subscribers ... you know the importance of using TRIN. Especially if you use VIX.X.

Like driving 5-speed manual transmission.

Clutch and gas pedal.

Jeff Bailey : 12/5/2007 1:34:49 PM

XLF $30.56 +1.25% ...

Jeff Bailey : 12/5/2007 1:33:58 PM

William! One reason call buyers may want to chose QQQQ/NDX.

Jeff Bailey : 12/5/2007 1:32:24 PM

QQQQ $51.59 +1.81% ... not a bank/financial in the bunch. I have session high as being $51.77. May have been a "bad tick" earlier with QCharts reporting $52.00.

Keene Little : 12/5/2007 1:31:15 PM

The downtrend line I'm referring to is the one from the Oct 31st high through the Nov 30th high.

Jane Fox : 12/5/2007 1:31:09 PM

Jeff just mentioned the TRIN, an internal I have not been watching too much lately. I see it is still bullish, under 1.00, but is making new daily highs so it is weakening.

Jeff Bailey : 12/5/2007 1:29:16 PM

TRIN 0.89 ...

Keene Little : 12/5/2007 1:28:55 PM

SPX bounced off its broken downtrend line so now it needs to hold. So far the bounce looks corrective which could mean at a minimum it might slide down that trend line.

Jeff Bailey : 12/5/2007 1:28:04 PM

SPY $148.32 +1.33% ...

Jeff Bailey : 12/5/2007 1:27:43 PM

Did see a sell program premium hit at 12:57 PM EST.

Had SPY falling from $148.80 to about $148.30.

Jeff Bailey : 12/5/2007 1:22:29 PM

Ambac Financial (ABK) $23.79 -8.09% ...

Jeff Bailey : 12/5/2007 1:21:30 PM

Bond insurers fall; Moody's warns on MBIA ... MarketWatch story Link

Jeff Bailey : 12/5/2007 1:17:32 PM

Countrywide Financial (CFC) $10.34 +3.40% ...

Jeff Bailey : 12/5/2007 1:16:54 PM

MBIA Inc. (MBI) $28.37 -13.08% ...

Keene Little : 12/5/2007 1:16:27 PM

If you're feeling bullish here, SPX is about to test its broken downtrend line from Oct 31st near 1477.50 (cash). If that holds then it's bullish. If it breaks again then it was just a head fake break.

Jeff Bailey : 12/5/2007 1:16:12 PM

TRIN 0.86 ....

NYSE A/D 2,378/832

Jeff Bailey : 12/5/2007 1:15:31 PM

VIX.X 22.38 -5.92% ...

Jeff Bailey : 12/5/2007 1:15:18 PM

BIX.X 293.52 +0.74% ...

Jeff Bailey : 12/5/2007 1:15:02 PM

SPY $148.29 +1.31% ...

Jeff Bailey : 12/5/2007 1:14:30 PM

MBIA Shares Down 10% Following Comments From Moody's

Keene Little : 12/5/2007 1:11:57 PM

Getting a little dump here. Lower your stop on a short play to just above the daily high for now.

Jeff Bailey : 12/5/2007 1:04:40 PM

QQQQ Option Chain ... sorted by most active Link

Note: Dec $55 Call is #1 OI for Dec. expiration.

Keene Little : 12/5/2007 12:50:58 PM

The Fib projection at SPX 1486 is still holding as resistance so the bulls need to see this level get broken otherwise it's a good short play here. The bearish divergences are not supporting a bullish break higher but keep your stop relatively tight just in case.

Linda Piazza : 12/5/2007 12:47:46 PM

The SPX's 15-minute 9-ema has now risen to 1483.02, and bullish traders would like to see that hold on 15-minute closes. During the lunchtime lull, however, prices sometimes drop back to the bottom of the smallest channel. That's at 1481.60 currently.

Jane Fox : 12/5/2007 12:29:39 PM

Here are the charts of the VIX and the S&P futures and as you can see they are mirror images of each other again today. Link

Jane Fox : 12/5/2007 12:15:23 PM

Crude is consolidating at around $90.00/bl but it is not telling me which way it will break, up or down. I suspect down because I still think $85.00/bl needs to be tested.

One must remember though this market adheres to technical analysis only to a point because there are so many political and environmental issues that can affect it. Link

Linda Piazza : 12/5/2007 12:14:05 PM

The SPX's 15-minute 9-ema has now risen to 1481.24, with further support at 1480.15 on 15-minute closes. Bulls would like to see that hold on any pullbacks from this test of the 200-sma.

Jeff Bailey : 12/5/2007 12:10:40 PM

US Oil Fund (USO) $69.77 +0.53% Link ... $0.50 box to match futures. Session high has been $71.00.

Feel/observe some pressure building here.

Jeff Bailey : 12/5/2007 12:07:52 PM

StockCharts.com's FREE PNF Charts ... great tool BIG, MEDIUM and SMALL stocks Link

Just remember that for stocks that pay dividends, historical supply (O) and demand (X) may not be accurate.

Keene Little : 12/5/2007 11:55:26 AM

We've got some negative divergence with the current high compared this morning's first high.

Jeff Bailey : 12/5/2007 11:47:34 AM

VXN.X 26.68 -7.52% ...

Keene Little : 12/5/2007 11:47:25 AM

Keep in mind too that the 50% retracement of the Oct-Nov decline is at SPX 1491.10. And of course the wall at 1490.

Jeff Bailey : 12/5/2007 11:47:05 AM

Should be hitting "2nd gear"

Jeff Bailey : 12/5/2007 11:46:43 AM

TRINQ alert! 0.94

Keene Little : 12/5/2007 11:46:22 AM

Because of the way this rally started from yesterday morning's low (3-wave move), it's got me scratching my head as to what this morning's rally is. One thought is a more complex corrective bounce (double zigzag) and that would mean the leg up from this morning's quick pullback will finish it. If true then the first Fib projection of interest for SPX is at 1486 and then 1492.65 above that. So watch for potential resistance just above us here.

Linda Piazza : 12/5/2007 11:43:08 AM

The OEX's 15-minute 9-ema has risen to 689.59 on 15-minute closes, just below the OEX's breakout level at 690.24 on 15-minute closes. If there should be a deeper pullback for the OEX during the lunchtime lull, OEX bulls would like to see that support maintained on 15-minute closes. The OEX is at 691.81 as I type.

Linda Piazza : 12/5/2007 11:41:23 AM

The SPX's 15-minute 9-ema has now risen to just below the SPX's breakout level today, at 1479.71 on 15-minute closes. If there's a deeper pullback than there's been so far during the lunchtime lull and as the 200-sma is tested on the daily chart, bulls want to see that support maintained on 15-minute closes.

Keene Little : 12/5/2007 11:40:22 AM

So far SPX has stalled at its 200-dma just above 1484.

Keene Little : 12/5/2007 11:20:17 AM

With the DOW and SPX clearly breaking their downtrend lines from Oct 31st it's a bullish day. The next resistance level could be another test of SPX 1490 if the bulls can keep this going now.

Jeff Bailey : 12/5/2007 11:19:38 AM

US Dollar Index (DXY) alert! 76.29 +0.78% (30-min delayed) ... could have rate cut off the table.

Jeff Bailey : 12/5/2007 11:16:56 AM

NASDAQ-100 Index (NDX.X) 2,100.02 +1.98% Link ... X gets the square.

Linda Piazza : 12/5/2007 11:13:59 AM

The TRAN has so far maintained its breakout status on its 15-minute chart, maintaining its target at 4728.18, but now SPX, OEX and Dow bulls want to see a new high of the day to confirm that it's holding that former resistance level as new support. The SPX is now testing the analogous resistance level on its 15-minute chart, with that at 1479.21. SPX bulls want to see that hold on 15-minute closes. If it does, a tentative sky-high upside target of 1497.72 is set. However, even a casual glance at the daily chart shows the 200-sma at 1484.17 and then the 72-ema at 1487.74 as potentially strong resistance, so I wouldn't count too heavily on that sky-high target being hit.

Jeff Bailey : 12/5/2007 11:03:53 AM

TRINQ's DAILY Pivot 1.15 ... WEEKLY Pivot 1.41

Jeff Bailey : 12/5/2007 11:02:57 AM

TRINQ 1.07 ...

NASDAQ A/D 1,994/764

Jeff Bailey : 12/5/2007 11:02:22 AM

TRIN 0.72 ...

NYSE A/D 2,343/728

Jeff Bailey : 12/5/2007 11:01:34 AM

AAPL $184.50 +2.61%

MSFT $33.84 +3.26%

QCOM $40.37 +2.93%

GOOG $694.73 +1.54%

CSCO $27.52 +2.11%

Jeff Bailey : 12/5/2007 10:59:02 AM

Disclosure: I held/hold bullish position in QQQQ-like security.

Jeff Bailey : 12/5/2007 10:55:51 AM

QQQ-AX target is $58.00 in the underlying.

Jeff Bailey : 12/5/2007 10:54:13 AM

VXN.X 26.94 -6.62% ...

Jeff Bailey : 12/5/2007 10:53:56 AM

Swing trade call alert! ... for one (1) of the QQQQ Jan $50 Calls (QQQ-AX) at the offer of $3.00.

QQQQ $51.59 +1.83%...

Jane Fox : 12/5/2007 10:50:46 AM

VIX is making new daily lows as S$P futures make new daily highs so this very important indicator is backing the bulls.

Keene Little : 12/5/2007 10:50:24 AM

SPX pushing to new highs so it's not a time to be short. Now any pullback needs to find support at the broken downtrend line to show the bulls are in control.

Jane Fox : 12/5/2007 10:50:01 AM

AD line is a bullish +1640

Jeff Bailey : 12/5/2007 10:49:40 AM

Swing trade stopped alert! ... with the SPY $148.40 ... stopped on the SPY Dec. $142 Put (SFB-XL) at the bid of $0.92.

Jeff Bailey : 12/5/2007 10:46:53 AM

Question on oil trader's mind is if the surge in refined product inventory a limting demand for oil going forward.

Jeff Bailey : 12/5/2007 10:45:46 AM

#Days supply of crude falls to 20.1. Recent low was 09/14/07 20.5.

Jeff Bailey : 12/5/2007 10:43:17 AM

SPR adding again by 636,000 barrels to 694.4 million.

Jeff Bailey : 12/5/2007 10:41:52 AM

Did see another 1.03 million draw in heating oil.

Jeff Bailey : 12/5/2007 10:36:27 AM

BIIIG builds in refined products.

Jeff Bailey : 12/5/2007 10:34:16 AM

Mass confusion in the pits.

Jeff Bailey : 12/5/2007 10:34:00 AM

Supply build in Cushing, OK

Jeff Bailey : 12/5/2007 10:32:37 AM

SPY $148.03

DUG $40.71

USO $70.43

Jeff Bailey : 12/5/2007 10:31:44 AM

BIIIIIG draw in crude

Linda Piazza : 12/5/2007 10:29:27 AM

The TRAN is dropping back to test its breakout point, so we'll be better able to determine--perhaps--if it just ran through resistance or if it really was breaking through. That former resistance is now at about 4668.40. SPX, OEX and Dow bulls want it to hold now as support on 15-minute closes. The TRAN is at 4671.40 as I type.

Jeff Bailey : 12/5/2007 10:24:53 AM

EIA crude oil due out in 6 minutes.

Jeff Bailey : 12/5/2007 10:24:35 AM

VIX.X 22.57 -5.12% ...

Jeff Bailey : 12/5/2007 10:24:22 AM

S&P Dep. Receipts (SPY) $147.93 +1.07% ...

SFB-XL are $1.03 x $1.04.

Linda Piazza : 12/5/2007 10:23:50 AM

I used this morning's pop to close out my last DEC bull put spread (SPX 1260/1250), part of the condors and partial condors that I had for December. I've been leery of the downside over the last several months and have not always completed my condors, but for December, I had a few more full condors. I've taken every opportunity to reduce downside risk, the risk that worries me most, as quickly as possible. I closed out that condor for $0.15 this morning, having closed out other contracts over the last week, so now I have 2-1/2 weeks with my only exposure in December expiration 6 MID 970/980 bear call spreads that I'm also attempting to close this morning. I'm not urging traders to do anything that's against their own trading practices, but only suggesting that you take a look at your spreads once each day or so, see what risk you have and what you can remove, and see if it's worth it to you to remove some of that risk.

Jeff Bailey : 12/5/2007 10:23:43 AM

GoldCorp (GG) $32.56 -0.12% ...

Jeff Bailey : 12/5/2007 10:23:13 AM

StreetTracks Gold (GLD) $78.53 -1.09% ... (~785.30 spot)

Jeff Bailey : 12/5/2007 10:22:34 AM

US Dollar Index (DXY) 76.22 +0.69% (30-min delayed)

Jeff Bailey : 12/5/2007 10:19:26 AM

Today's Global Econ Calendar (to 10:00 AM EST) Link

Jeff Bailey : 12/5/2007 10:16:39 AM

OPEC Holds Production Steady ... AP Story Link

Linda Piazza : 12/5/2007 10:16:05 AM

Jane, I've been looking at that same possibility--reverse or inverse H&S for the SPX--since Monday morning, too. I suggested then that if that was going to play out that traders should keep in mind that trading could be treacherous when a right shoulder was being chopped out and make their trading decisions accordingly. Like you, I think it's a good idea to have a scenario in mind, so you can test the action against it.

Subscribers, as I warned Monday morning, though, not all such formations are completed or their targets met. I said Monday that I wouldn't be surprised to see the SPX's prices parked at the neckline on FOMC day, ready to either break through to the upside or fall back and invalidate the thing. It's actually playing out a little quicker than I expected it to, so I'm not sure that we'll be there on FOMC day or whether we'll get to the neckline sooner. I don't always trust these formations, but watching them can give us some clues about bullish or bearish strength. More importantly, recognizing this possibility early Monday morning gave traders an opportunity to decide whether they wanted to risk being chopped up while the right shoulder was formed.

Keene Little : 12/5/2007 10:15:49 AM

If this morning's bounce is just part (the middle of) a larger corrective pullback from Nov 30th, the rest of the pullback could drop SPX down to 1450, or even 1432, before it's set up for the next strong rally leg. This is depicted on this updated 30-min chart: Link

Jeff Bailey : 12/5/2007 10:15:00 AM

US Oil Fund (USO) $70.20 +1.15% ...

Jeff Bailey : 12/5/2007 10:14:30 AM

UltraShort Oil & Gas (DUG) $80.83 -3.72% ...

Jeff Bailey : 12/5/2007 10:13:52 AM

CBOE Oil Index (OIX.X) alert! 825.74 +2.14% ... has retraced 61.8% of its recent 11/07/07 to 11/27/07 decline.

Jeff Bailey : 12/5/2007 10:12:06 AM

Table of Data On Factory Orders From Commerce at this Link

Jane Fox : 12/5/2007 10:09:32 AM

I am still neutral on the SPX but it does look like my idea of a reverse H&S is starting to play out albeit I thought 1440 would be the right shoulder. Link

Keene Little : 12/5/2007 10:08:46 AM

They're trying. SPX just poked above its downtrend line but so far that resistance is holding. The bulls obviously want to see that downtrend line get broken and then hold as support on a retest, which would be a good long play.

Linda Piazza : 12/5/2007 10:07:52 AM

The SPX is now testing the same Keltner resistance line that the TRAN has already made it through. That line is currently at about 1479.15 for the SPX, and it needs to close above it on a 15-minute close to break out of that resistance. Unless it does that, the resistance is holding for now. The SPX is at 1478.81 as I type.

Jane Fox : 12/5/2007 10:06:51 AM

WASHINGTON (MarketWatch) -- Orders for U.S.-made factory goods climbed 0.5% in October, the most in three months, as orders for defense capital goods surged and demand for metals grew, the Commerce Department reported Wednesday. Orders for defense capital goods shot up by 16%, also a three-month high. Excluding the defense orders, though, new orders for factory goods rose by 0.3%. Shipments rose by 1% in October after rising 0.1% in September. Orders for core capital goods, meanwhile, dropped by 2% in October, after climbing by 1.4% in September and 0.1% in August.

Jane Fox : 12/5/2007 10:06:10 AM

Oct. core capital equipment orders fall 2.0%

Oct. factory orders ex-transport rise 0.6%

. Oct. factory orders ex-defense rise 0.3%

Oct. factory shipments rise 1.0%

Oct. factory orders rise 0.5% on defense, metals

Linda Piazza : 12/5/2007 10:05:33 AM

A glance at the TRAN as another indicator shows it overrunning Keltner resistance on its 15-minute chart, but it's hard to tell with the TRAN whether that's just an overrunning of the resistance or whether it's truly breaking through. For now, it's run through and has closed another 15-minute period above the former resistance, so I'm going to give it the bullish interpretation for now. That means that the TRAN, at least, has set an upside target, of 4726.15 in the TRAN's case, but it has to stay above Friday's 4676.19 high and then Keltner support at 4667.21 on 15-minute closes to maintain that upside target. The TRAN is at 4683.80 as I type. So far, then, the TRAN is supporting bullish hopes.

Jane Fox : 12/5/2007 10:05:16 AM

Nov. ISM services new orders 51.1% vs 55.7% in Oct.

Nov/ ISM services below consensus 55.0%

Nov. ISM services 54.1% vs 55.8% in Oct.

Jeff Bailey : 12/5/2007 10:07:53 AM

US ISM Nov. Non-Mfg Business Index 54.1 Vs. Oct 55.8; Consensus was 54.8.
Nov. Non-Mfg Employment Index 50.8 Vs. 51.8
Nov. Non-Mfg Prices Index 76.5 Vs. Oct 63.5
Nov. Non-Mfg New Orders Index 51.1 Vs. Oct 55.7

Jeff Bailey : 12/5/2007 10:03:54 AM

Sep Factory Orders revised to +0.3% from +0.2%

Jeff Bailey : 12/5/2007 10:03:12 AM

Oct. Durable Goods Revised to -0.2% from -0.4%

Jeff Bailey : 12/5/2007 10:02:33 AM

US Factory Orders +0.5% In Oct. consensus was unch.
Excluding transportation +0.6%
Excluding defense +0.3%.

Jeff Bailey : 12/5/2007 10:00:18 AM

Fed Accepts $5.5 Billion in 2-day RPs

Jeff Bailey : 12/5/2007 9:59:48 AM

Fed Accepts $13 Billion in 7-day RPs

Linda Piazza : 12/5/2007 9:55:25 AM

The RUT hit Keltner resistance at 764.06 on 15-minute closes and is pulling back from that. If it maintains support on 15-minute closes at 760.10, I would consider that in support of bullish hopes for RUT traders, but also for those who want to see the RUT lead other indices higher. For now, though, expected short-term Keltner resistance was indeed resistance.

Linda Piazza : 12/5/2007 9:52:32 AM

The SPX has climbed up and hit that 30-sma on the daily chart, an average that has proven to be resistance on a daily close for the last few days. If you look at a daily chart, you can see it being pierced and then prices falling back by the end of the day.

Keene Little : 12/5/2007 9:44:59 AM

Here's a 10-min chart of SPX showing the A-B-C bounce idea and why I'm a little leery about this gap up. This could be a good setup for a great short play, stop just above 1480. Link

Keene Little : 12/5/2007 9:42:36 AM

Looking at the bounce off yesterday morning's low, if it's to be just an A-B-C bounce with wave-c = 162% of wave-a, that's at SPX 1477.48. Between this and its downtrend line I'm thinking more about a short play setup than getting long. You can see the clear 3-wave bounce off yesterday's low followed by a 3-wave pullback and now this morning's spike up. It's a pretty classic looking A-B-C correction so far.

Keene Little : 12/5/2007 9:37:26 AM

For SPX the downtrend line from Oct 31st through Nov 30th is just uder 1479 so watch that level for potential resistance.

Linda Piazza : 12/5/2007 9:36:41 AM

On an intraday basis, the 15-minute Keltner chart shows potential resistance on 15-minute closes at 1479.24. For OEX traders, the analagous zone is 690.15 on 15-minute closes.

Linda Piazza : 12/5/2007 9:35:13 AM

For the last several days, the SPX has found resistance on a daily close at the 30-sma, with that average currently at 1477.64 and with the SPX currently at 1475.85. Above the 30-sma, the 72-ema has been resistance on an intraday touch, with that average at 1487.63. Those are a couple of resistance levels to watch.

Jane Fox : 12/5/2007 9:34:46 AM

I have been saying that I think the US$ will break resistance at 76.20 and could rally all the way back to at least 79.00. This of course has huge ramifications on the Gold market. Link

Jane Fox : 12/5/2007 9:32:29 AM

Gold is down and US$ up but it is interesting that Crude is up as well. Usually Crude and Gold have a direct relationship to one another but it has become undone these last few days.

USDJPY is supporting the bullishness you are seeing in the American equity futures. Link

Jane Fox : 12/5/2007 9:26:03 AM

All American index futures markets reacted very nicely to the 8:30 economic reports and have broken their respective previous day highs. Link

Keene Little : 12/5/2007 9:24:53 AM

After a steady rise in equity futures overnight and then the spike up following the productivity numbers we've got a very large gap up start to the day. The wave pattern has me a little concerned that it might be a gap n crap setup so I remain a little cautious for the start of the day.

I suspect the reason for the excitement is because the improved productivity will ease the concern about inflation which enables the Fed more leeway to more aggressively lower rates, which of course is what the market wants. Again, the market should be careful for what it wishes for but that's another story. Let's first see if the market can hold onto these pre-market gains after the open.

Jane Fox : 12/5/2007 9:22:07 AM

WASHINGTON (MarketWatch) - U.S. private-sector employment rose by 189,000 in November, according to the ADP employment report released Wednesday.

The report suggest the labor market remains a source of strength as the economy weakens in the fourth quarter,

A strong job market may make some analyst rethink their projections that the Federal Reserve will aggressively cut short-term interest rates by a half a percentage point next week.

The ADP report's results are well above projections of Wall Street economists for the government nonfarm payrolls survey to be released on Friday. Economists surveyed by MarketWatch are expecting payrolls - both public-and private-sector - to grow by about 60,000 for November.

The ADP report's considered by some to be the best single predictor of the government's nonfarm payroll report.

Jane Fox : 12/5/2007 9:19:06 AM

NEW YORK (MarketWatch) -- Crude-oil futures rose sharply to trade near $90 a barrel on Wednesday, after the Organization of Petroleum Exporting Countries opted to keep production unchanged.

Crude oil for January delivery rose as high as $90.39 a barrel in electronic trading on the New York Mercantile Exchange. The benchmark contract was last up $1.24, or 1.4%, at $89.56.

"We're getting a little bit of an OPEC bounce," said Phil Flynn, an analyst at Alaron Trading. "OPEC's goal was to make sure that oil prices didn't get above $100 a barrel. There was no need for the cartel to raise their quota," Flynn said.

Jane Fox : 12/5/2007 9:18:18 AM

BOSTON (MarketWatch) -- Several Wall Street firms have been subpoenaed by New York state prosecutors seeking information related to the packaging and selling of debt linked to risky mortgages, according to a published report Wednesday.

The office of New York Attorney General Andrew Cuomo has sent subpoenas to request information from several Wall Street firms, including Merrill Lynch & Co. (MER), Bear Stearns Cos. and Deutsche Bank AG The Wall Street Journal reported, citing people familiar with the matter.

Prosecutors in a broader investigation of the mortgage business are looking into how well the banks examined the quality of mortgages before packaging them into products sold to investors, the report said. The probe also focuses on how the debt was pooled into securities, including banks' arrangements with credit-rating firms, the newspaper reported.

Ratings companies are also under pressure after asset-backed securities that were rated investment grade plunged in value as a result of the turmoil on credit and mortgage markets.

Jane Fox : 12/5/2007 9:15:37 AM

WASHINGTON (MarketWatch) -- Fast growth in the third quarter translated to the strongest productivity gains in four years, the Labor Department reported Wednesday.

Productivity in the nonfarm business sector increased at a 6.3% annual rate in the quarter, the government said in its second estimate of productivity. A month ago, the government said productivity rose 4.9% annualized.

Unit labor costs, a key gauge of inflationary pressures from wages, were revised much lower, showing a 2% annual decline in the third quarter compared with a 0.2% drop estimated a month ago.

Unit labor costs in the second quarter were also revised much lower, from a 2.2% gain to a 1.1% decline, reflecting more up-to-date compensation information.

The revised data show inflationary pressures from tight labor markets are much milder than previously believed, giving Federal Reserve officials more cover to cut interest rates without fearing that inflation could spike higher.

The third-quarter revisions were in line with the expectations of economists surveyed by MarketWatch.

Market Monitor Archives