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OI Technical Staff : 12/24/2007 9:59:59 PM

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Jeff Bailey : 12/24/2007 2:41:19 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 12/24/2007 2:03:45 PM

Global Equity Benchmarks, Currency, Gold and Oil Table at this Link

Jeff Bailey : 12/24/2007 1:20:45 PM

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

CLOSED out the QQQ-AX at the bid of $2.89. Cetainly didn't think we'd see this bullish a bounce so soon. Right back at that 12/11/07 QQQ-AX exit level ($52.20). Should expect some bullish profit taking on Wednesday, but ready to reload.

Keene Little : 12/24/2007 1:14:45 PM

The price pattern has turned at least short term bullish so we stick with the bullish wave count (green) until proven otherwise. As long as the pullbacks (including a small one we should see on Wednesday) remain corrective looking (choppy overlapping highs and lows in the pullback), we should see price continue to push higher. At this point it takes a break below SPX 1464 to negate the bullish wave count. The downtrend line from October, near 1511, will be the next resistance level for the bulls to conquer. Link

I hope everyone has a very enjoyable Christmas with family and friends as we look forward to a prosperous and peaceful new year. See you on Wednesday.

Jane Fox : 12/24/2007 1:02:06 PM

Merry Christmas all and see you on Wednesday - Boxing day!!!

Jeff Bailey : 12/24/2007 12:56:56 PM

VXN.X 21.31 +1.96% ...

Linda Piazza : 12/24/2007 12:55:37 PM

Have a great holiday, everyone. Whether you celebrate Christmas or another holiday, take the time to be with your family and away from the markets. De-tox a bit unless you got a great new book on trading techniques and can't wait to dig in.

Jeff Bailey : 12/24/2007 12:53:29 PM

Swing trade call exit alert! ... for the one (1) QQQQ Jan $50 Call (QQQ-AX) at the bid of $2.89.

QQQQ $52.38 +1.02% ...

Merrrrrrryyyyy Christmas!

Linda Piazza : 12/24/2007 12:52:00 PM

Remember the action of time decay on your front-month options if you're thinking about whether to hold over the holiday. I just ran the OEX's 700 call through the option pricer on my broker's page. I kept all inputs the same except the days to expiration, changing it to the 23 days it will be on Wednesday. The theoretical value of that option went down $0.59, just from time decay. Currently, the delta of that option is 0.52, according to my broker's page, so Wednesday, the OEX would have to gain a point just to stay even with the current price. Run some figures through your own pricing model (the CBOE has one for free, if your broker doesn't) when you're deciding whether to hold overnight, over a weekend or over a market holiday. Remember that my broker's theoretical value is just that, theoretical, and other inputs can change.

Keene Little : 12/24/2007 12:50:56 PM

Saw your recent post on CME, in light of what Mr. Brown reported in weekends wrap, about all banks starting new exchange in near future, you still see +ve upside to CME...??

Paresh, thanks for the reminder on the news about CME. I had forgotten about that but it makes sense now to see why CME dropped sharply this morning. When you see a sideways triangle developing, which typically has an a-b-c-d-e wave count (so 5 waves), wave-e is very often news related and is why it typically does a throw-over or throw-under of the triangle pattern.

These triangle patterns are very good setups and it's why I like the upside on CME for one more rally leg. After that it could be trouble for the bulls in this stock.

Keene Little : 12/24/2007 12:48:53 PM

We got our answer--rally into the close. If you're a short term trader then understand that the new high here should set up at least a larger pullback on Wednesday.

Linda Piazza : 12/24/2007 12:43:49 PM

Make your decision soon as to whether you want to hold over the market holiday tomorrow and act accordingly. If you have decided to do so, you still need to place your stop in an account appropriate place in case there's a big move into the close.

Keene Little : 12/24/2007 12:22:47 PM

The little pullback on the DOW and SPX should finish the sideways consolidation since this morning's initial high and start another rally leg (DOW 13600/SPX 1500). That expectation would be negated with a drop below this morning's pullback around 10:45 AM. The question is whether we're going to finish the day flat here or start a rally into the close.

Keene Little : 12/24/2007 12:17:56 PM

GOOG continues to look like it will make it at least up to its downtrend line from November, currently near 712 (about $16 higher). The bullish wave count calls for a pullback after that, down to 675 to complete its sideways triangle pattern before heading higher again. The bearish wave count says it will continue to decline after the current bounce finishes. The bulls need to break above 725 to negate the bearish count and the bears need to break below 612 to negate the bullish count. That's a wide range so in the meantime keep an eye on the trend lines. Link

Linda Piazza : 12/24/2007 12:16:03 PM

Hey, I was studying charts so intensely, trying to make something move with my gaze, that I didn't notice the birthday greetings. I'll be 58. Isn't that as old as Moses? Smile. Thanks, everyone.

Linda Piazza : 12/24/2007 12:14:34 PM

The SPX's 15-minute 9-ema has now risen just underneath the SPX's current price, with further potential support on 15-minute closes at 1491.82. The breakout benchmark is down at 1486.29. At this point, bulls just don't want to see the SPX plummet through that benchmark into the close. I don't see any signs of that happening yet, but since when have we needed signs over the last few months? Keep those profit-protecting plans up to date.

Jeff Bailey : 12/24/2007 12:13:01 PM

To All Troops Around the Globe ... Thank you for your sacrifices and service! Merry Christmas!

Linda Piazza : 12/24/2007 12:12:28 PM

Despite a few small-bodied red candles along the way, the USDJPY still climbs.

Jeff Bailey : 12/24/2007 12:11:27 PM

To All Troops In Middle East! ... Please be alert to incoming Santa from the north!

Jeff Bailey : 12/24/2007 12:09:40 PM

Pound Hits All-Time Low Against Euro ... AP Story Link

Keene Little : 12/24/2007 12:00:14 PM

As the Church Lady would say, well isn't that special. Happy Birthday Linda!

Jane Fox : 12/24/2007 11:57:17 AM

Only special people are born on Christmas day, like Linda and my husband.

Jane Fox : 12/24/2007 11:56:46 AM

I would like to wish Linda a Happy Birthday. She is our resident Christmas baby.

Keene Little : 12/24/2007 11:53:04 AM

What do you make of the big fall in CME today?

The last update for CME that I had posted ( Link ) showed the need for one more pullback in its sideways triangle pattern before getting the final 5th wave rally. Today's decline achieved two equal legs down at 683.18 so it has made the typical move. Updated daily chart: Link

I'd look for a rally out of this unless it breaks below 673.53, the low on Dec 13th. The triangle pattern would be negated in that case (hence the key level at 673). Also, it can't overlap the top of wave 1, the 672.49 high on Nov 30th. Upside potential for the next rally leg (wave 5) is about 739 but more likely I think the 720 area (717-722).

Linda Piazza : 12/24/2007 11:49:49 AM

Totally sideways. The SPX's 15-minute 9-ema is now at 1491.78. It's flattened, as sometimes happens as we approach the lunchtime lull. Sometimes that means that the SPX will trade across it, to the other side of the small channel, now at 1491.57. Today, with the markets closing early, I wouldn't count on lunchtime lull patterns. Instead, we should see a squaring-up of positions ahead of the market holiday tomorrow. Where that takes the markets, I'm not sure, as such movements don't tend to be as amenable to technical analysis as others. However, with markets hanging up near their highs, the usual expectation would be either further consolidation or another rally attempt. I'm less sure than usual that will happen, though. Just start making decisions about whether you want to hold over the holiday. You'll be experiencing some slight time decay over the holiday.

Jane Fox : 12/24/2007 11:38:39 AM

I trade with TICK charts, a chart bar "built" by the number of trades. For example, I use 377 Tick on the Dow futures so there has to be 377 trades before a bar will complete. This is a very good way to watching how much activity is happening in a market and my charts have almost stopped telling me there is not much going on out there.

Keene Little : 12/24/2007 11:35:54 AM

The wave pattern for the move up from last Tuesday's low would look best with a rally to near SPX 1500 befor either pulling back or starting another decline. At that point (with one more new high) the move up from last Tuesday (Dec 18th) can be satisfactorily counted as a completed 3-wave bounce (dark red) which calls for a leg back down to 1420 (shown on the daily chart in last night's post). The bullish wave count (green) calls for stair-stepping higher into the end of the month (above 1525). Link

Jeff Bailey : 12/24/2007 11:26:36 AM

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

Linda Piazza : 12/24/2007 11:23:43 AM

The SPX's 15-minute 9-ema is now at 1491.34; the OEX's, at 697.31.

Jeff Bailey : 12/24/2007 11:11:51 AM

I would strongly suggest children in India get to bed!

Jeff Bailey : 12/24/2007 11:09:41 AM

Santa Tracker ... Link

Linda Piazza : 12/24/2007 11:04:23 AM

So far at least, the SPX didn't even dip to the 9-ema before it attempted to start rising again. RSI remains trending above 70. So far, strength remains, at least according to these signs. Keep those profit-protecting plans in place, however.

Jeff Bailey : 12/24/2007 11:00:31 AM

QQQQ $52.22 +0.71% ... 60-minute interval chart with updated WEEKLY (blue) pivot retracement at this Link

Keene Little : 12/24/2007 11:00:23 AM

The little pullback in the broader averages looks like it should lead to another push higher. That would give us a clean 5-wave move up from Friday's mid-day low and set up at least a larger pullback/consolidation. Ideally, for this little 5-wave move up from Friday, we'll see the market rally higher in the next hour.

Jane Fox : 12/24/2007 10:57:15 AM

On the weekend I was thinking about the discussion we had about the emotional side of trading emotions on Friday. I challenged all of those who have a hard time with this aspect of trading to do an exercise Mark Douglas outlines in his book, "Trading in the Zone", however there was on thing I did not mention that was extremely important.

You need to do the exercise with REAL money. No paper trading here guys because you will never have the emotional tie to the trade if you do not have real money on the line.

Jane Fox : 12/24/2007 10:52:38 AM

AD line has been climbing all day and so as the AD volume and AD volume ratio but the AD volume has also been under 0 all day and is still not above.

Keene Little : 12/24/2007 10:54:14 AM

I'll continue to follow AAPL since I want to follow this through after using it as the example stock in the end-of-year report on using the EW roadmap. Today's new high confirms that it's very likely in the 5th wave of the move up from November (which should be the final 5th wave for the move up from 2003): Link

Equality with the 1st wave (the initial leg up off the November low) is at 205.54 so that provides a sense of the typical upside potential. If at any time AAPL drops below 178.60 then we'll know it has already made its final high. Looking closer at that 5th of the 5th wave, which is the move up from last Tuesday's low, the 60-min chart shows a potential small correction and then final move higher this week: Link

I'm using a parallel channel to figure out where the small 4th wave correction should find support (either back down to it or slide over to it) and then I'll make a projection from there for where the final 5th wave could top out. The example I'm showing, based on the 4th wave correction finding support near 195, gives an upside projection to about 202. So preliminarily I'm thinking AAPL could top out in the 200-205 area and if it plays out this way that will be the next shorting opportunity on the stock.

Linda Piazza : 12/24/2007 10:47:30 AM

Fairly soon, if the pattern is typical, we should see an SPX dip down to the 9-ema, which is now at 1490.01. Equity bulls would prefer a 15-minute close at or above that average. The breakout benchmark is now at 1485.20.

Linda Piazza : 12/24/2007 10:41:43 AM

Have those profit-protecting plans in place now. Just know how much of a price pullback you're willing to endure. So far, so good, but don't let a good trade turn bad.

Linda Piazza : 12/24/2007 10:36:36 AM

I'm seeing the first tentative little red candle on the USDJPY's 15-minute chart since the premarket period for our cash markets. It's not much yet, so I'm just watching, not drawing any conclusions. The USDJPY is at 114.36 as I type.

Linda Piazza : 12/24/2007 10:33:38 AM

The SPX's 9-ema is now at 1489.71; the OEX's, at 696.60. For the significance of the location of this average, see my 9:52:23 post.

Jane Fox : 12/24/2007 10:33:30 AM

I have been saying that 1490 had lost most of its importance but I expected it to be a little resistance this week. Highs today so far are 1495 so I guess we have to consider 1490 more of a zone now. So the 1490 zone may be resistance this week. Link

Jane Fox : 12/24/2007 10:29:23 AM

Please be aware the times quoted in my 10:26 post are exchange time. For example the CME Globex closes 12:15 exchanage time which is actually 1:15ET and 10:15 my time (PT)

Keene Little : 12/24/2007 10:28:09 AM

If the bulls can hold SPX above 1492 now then they have a shot at pushing this up to the next resistance level near 1511 (not necessarily today). Its downtrend line from October and 62% retracement of the Oct-Nov decline is located there. The same 62% retracement for the DOW is 13635.

Jane Fox : 12/24/2007 10:26:04 AM

WASHINGTON (MarketWatch) -- Financial exchanges will be closing early on Monday in anticipation of the Christmas holiday. The New York Stock Exchange, the Nasdaq capital and global markets and the American Stock Exchange will all close at 1 p.m. At the New York Mercantile Exchange, the Comex division will observe an early close at 12:30 p.m., with the Nymex to call it a day as of 1:30 p.m. Electronic markets will be open until 5:15 p.m., and there will be no overnight session, Nymex said. Electronic markets will resume trading at 6 p.m. for the Dec. 26 trade date, according to Nymex. At the Chicago Mercantile Exchange, floor trading in foreign exchange, interest rates, weather options and real-estate options is scheduled to pack it in at noon, with CME commodity options ending at 12:02 and CME equity indexes closing at 12:15 p.m. CME Globex trading will follow a similar schedule and remain closed until 5 p.m. on Christmas, Dec. 25, the exchange said. And at the Chicago Board of Trade, there will be phased early closings in the agricultural, financial and equity pits starting at noon, with electronic trading due to end soon thereafter. Dow-AIG and metals trading will observe normal CBOT hours on Monday. The CBOT said electronic trading will resume starting at 6 a.m. on Dec. 26.

Linda Piazza : 12/24/2007 10:20:59 AM

USDJPY is still climbing, so that's in the equity bulls' favor, so far.

Linda Piazza : 12/24/2007 10:20:13 AM

The SPX's 15-minute 9-ema has now risen to 1488.99; the OEX's, 696.19. Consolidation has been sideways-up, so far. I'm watching the advdec line closely. Strangely, it's finding resistance this morning on 15-minute closes at the 15-minute 9-ema near 1412 rather than climbing above it. Bulls don't want to see it fall away sharply from this ongoing resistance test. If it does, know that price action should still be your main guide, especially in the subtraction form rather than ratio form of the advdec line. Just let such action inform your profit-protecting plans, while you don't act on anything other than price.

Jeff Bailey : 12/24/2007 10:08:51 AM

QQQQ $52.23 +0.73% ...

Linda Piazza : 12/24/2007 10:07:45 AM

The SPX's 15-minute 9-ema is now at 1487.79; the OEX's, at 695.55.

Jeff Bailey : 12/24/2007 10:07:40 AM

Apple Computer (AAPL) $197.10 +1.64% ... notable new 52-weeker at the NASDAQ.

Keene Little : 12/24/2007 10:06:39 AM

No sellers to be found and the market inches its way higher. I suspect that will be the way of the market today.

Jane Fox : 12/24/2007 9:58:30 AM

This is bullish but take a look at were the AD ratio is printing - under 1 which means the AD volume is under 0. Link

Jane Fox : 12/24/2007 9:57:09 AM

VIX is making new daily lows supporting the bullish AD line.

Linda Piazza : 12/24/2007 9:52:23 AM

Breakout status is obviously being maintained on the SPX's 15-minute chart. The 15-minute 9-ema is now at 1486.12 and the channel line denoting breakout status is now at 1484.56. It should soon be time for the SPX bulls to pause for a breath. If so, the best scenario for short-term equity bulls would be a sideways consolidation while the 9-ema rises up quickly underneath, hopefully rising to 1490 or above. On such occasions when there's such sideways consolidation, the SPX then usually quickly dips down to the 9-ema, sometimes piercing it during the 15-minute period, and then bounces from it. Bulls don't want a steep fall beneath the breakout zone instead.

Keene Little : 12/24/2007 9:50:51 AM

Pretty much straight up since the open so the bulls are clearly in control--they want to be sure the market has a good start to the Santa Claus rally this week.

Jane Fox : 12/24/2007 9:47:20 AM

OK this makes no sense, Ad line is a very bullish +2087 but the AD volume is under 0.

Jeff Bailey : 12/24/2007 9:47:44 AM

Fed Accepts $10 Billion In 2-day RPs
$2.4 Billion ACO
$3.6 Billion TCO
$4 Billion MBCO

Keene Little : 12/24/2007 9:44:56 AM

SPX is at the wall so follow through by the bulls is needed here. It's risky shorting a low volume pre-holiday market but this is the place to try it until the bulls can prove they've got some buying power behind them (might not be hard on a low volume day).

Linda Piazza : 12/24/2007 9:44:53 AM

The TRAN is finally breaking up to test Friday's early morning high of 4664.01. The TRAN is at 4666.42 as I type. It didn't see the late-day push higher than some other indices did on Friday--always a little concerning--but it's attempting to play catch up now. I don't like it when the TRAN doesn't confirm or lead SPX, OEX and Dow direction.

Jeff Bailey : 12/24/2007 9:44:40 AM

Unpaid Credit Cards Bedevil Americans ... AP Story Link

Keene Little : 12/24/2007 9:39:36 AM

The DOW has tagged its first Fib resistance level at 13515 (62% retracement of the decline from December 11th).

Linda Piazza : 12/24/2007 9:39:31 AM

On a short-term basis, the SPX is in breakout mode on the 15-minute Keltner chart. RSI has been trending near or above 70 since Friday morning. Momentum has been strong . . . but it needs to continue to be strong to maintain breakout status. Bulls want to see 15-minute closes remain above about 1484.

Linda Piazza : 12/24/2007 9:35:03 AM

The SPX is hitting the 200-sma, presumed potential resistance on a daily close. Make sure you've got profit-protecting plans if in bullish positions.

Jeff Bailey : 12/24/2007 9:29:37 AM


DJ- Kazakh Energy Minister Sauat Mynbayev says that ExxonMobil's conditions to resolve a dispute over the giant Kashagan oil field was risky for Kazakhstan and differed from the rest of the Eni-led consortium, says Interfax news agency.

Jeff Bailey : 12/24/2007 9:28:41 AM


DJ- London and Paris stocks are nudging higher on Christmas Eve following on from Friday's rally in the U.S. Traders say there is optimism in the market and they wouldn't write off another rally before year end. Frankfurt is closed.

Keene Little : 12/24/2007 9:28:03 AM

Equity futures have rallied since the early morning hours and the sharp rise is always a little suspicious when it happens before the open. They're not up big but the push up from about 7:30 AM reminds me of past manipulated moves to get a gap open. With ES up 4 points (just off it's high of +5 points) it looks like SPX will make it up to the "wall" near 1490. Then we'll see if there's any follow through to the gap up.

Jeff Bailey : 12/24/2007 9:27:42 AM


DJ- U.K. wage pressures are contained and will likely remain so, with flaws in the main earnings data currently overstating wage inflation pressures, according to Bank of England Monetary Policy Committee member David Blanchflower.

Jane Fox : 12/24/2007 9:27:15 AM

The US$ chart is also telling me Gold's breakout will not hold. Link

Jeff Bailey : 12/24/2007 9:26:39 AM


DJ- If bond insurer can't raise $1 billion in additional capital or reinsurance in the next four to six weeks, Fitch expects to downgrade its triple-A rating one notch. A triple-A rating is crucial for insuring securities.

Jeff Bailey : 12/24/2007 9:25:09 AM


DJ- China's foreign exchange reserves reached $1.455 trillion at the end of November, says central bank-run Financial News. Adds China will continue to face pressures from a large international balance of payments surplus next year.

Jane Fox : 12/24/2007 9:25:06 AM

I fully expected the US$ to retrace back to the lower trendline of this upward channel but it does not seem like that is what it is going to happen. The consolidation you see on this chart over the last 6 days suggests it is going to move sideways to burn off the overbought and then move higher. Link

Jeff Bailey : 12/24/2007 9:23:40 AM


DJ- Receivers of troubled structured investment vehicle SIV Portfolio, formerly known as Cheyne Finance, agree to sell the $7 billion portfolio of assets to Goldman Sachs as part of the SIV's restructuring.

GS $209.60 ... edges higher to $211.00 pre-market.

Jeff Bailey : 12/24/2007 9:22:19 AM


DJ- Three of the country's largest banks have decided to scrap efforts to create a massive liquidity conduit aimed at aiding troubled structured investment vehicles, saying the fund was no longer necessary.

Jeff Bailey : 12/24/2007 9:21:31 AM


DJ- Although sales estimates for the holiday shopping season won't be available until today at the earliest, some industry observers who track seasonal activity are upbeat that sales would meet modest growth expectations.

Jeff Bailey : 12/24/2007 9:20:50 AM


DJ- Group of Wall Street and trading firms including JP Morgan, Deutsche Bank and Citadel Investment Group plan to launch a new exchange to compete against Chicago Mercantile Exchange in some of its largest contracts. Move is an attempt by some big users of CME to lower their trading fees.

CME $710.75 ... fall to $694.50 pre-market.

Jeff Bailey : 12/24/2007 9:19:26 AM


DJ- GE Capital agrees to acquire most of Merrill Lynch's middle-market commercial-finance business, Merrill Lynch Capital, in a deal that will allow Merrill to raise about $1.3 billion in capital for other parts of its business. Deal is seen adding more than $10 billion in assets to GE Capital Commercial Finance's base of $260 billion.

GE $37.14 ... edge higher at $37.37 pre-market.

MER $55.54 ... jump to $57.23 pre-market.

Jane Fox : 12/24/2007 9:17:18 AM

Today is Christmas Eve and it looks like Santa is going to leave a very nice present under the bull's tree. Consolidation at previous day highs told you that a break higher was likely and sure enough that break even happened during the overnight session. Link

Linda Piazza : 12/24/2007 9:13:24 AM

Another thought about the USDJPY, just in case you're not watching CNBC or Bloomberg in the middle of the night, as we insomniacs sometimes are: part of the rise in the USDJPY is due to speculation that rising inflation will not allow our Fed to cut rates again. Part, though, is that increasing economic weakness will force the BOJ to cut rates. Remember that at any time, some statement by Governor Fukui or some other official in Japan can impact your equity trade here. At the end of each trading day, make reasoned decisions about how much risk you're willing to take on overnight.

Linda Piazza : 12/24/2007 9:09:29 AM

Good morning. I hope everyone had a safe and happy weekend. While we were resting last night, the USDJPY continued its upward trajectory, now sitting at 114.21. I've been watchful for the time when the USDJPY would no longer be a good barometer for us, but during Monday's and Tuesday morning's weakness, it relentlessly consolidated near the then-recent high, showing divergence with price action. That divergence finally resolved with an equity, be it short-covering or another variety. We can't discount the USDJPY as a barometer just yet, can we?

It appears to be edging just over the bottom of a horizontal resistance zone that begins at about 114.00. This horizontal zone stretches back for years, with several intermediate-term swing lows in that zone. My daily Keltner charts show potentially significant resistance on daily closes at about 114.50-114.60 and then again at 115.20. So, just watch. If you're an equity bear, you want to see the USDJPY roll over from this supposed resistance. If you're an equity bull, you want to see it push higher into and through that resistance zone, or at least consolidate here.

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