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OI Technical Staff : 12/31/2007 9:59:59 PM

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Keene Little : 12/31/2007 4:12:01 PM

Well, have a good night, don't drink and drive and come back next year healthy, wealthy and wise. Be safe and Happy New Year.

Keene Little : 12/31/2007 3:56:10 PM

All that work that was done to rally the market the past 3 hours was undone in a matter of minutes, especially for the techs. The RUT held up better.

Keene Little : 12/31/2007 3:50:15 PM

And of course the third option for the close is that we'll sell off.

Keene Little : 12/31/2007 3:31:41 PM

SPX has broken its downtrend line from last Wednesday, Dec 26, (as have the others) but it hasn't exactly been a ball of fire to the upside since the break (the techs and small caps look more bullish in that regard). But assuming it can press a little higher now, the next trend line resistance will be its broken uptrend line from Dec 18th, currently just above 1477 (a 50% retracement of the decline from the 18th is at 1478). It would probably be ready for a pullback from there and then we'd have to see if the bulls or bears take over. Link

Keene Little : 12/31/2007 3:09:06 PM

Well it looks like they're going to let this go out flat from here, maybe.

Jane Fox : 12/31/2007 3:00:24 PM

Well I am going to take off early so I can go to the gym. Happy New Year all and see you all next year.

Keene Little : 12/31/2007 2:52:10 PM

It's looking like they should be able to rally this in the last hour, maybe.

Keene Little : 12/31/2007 2:00:23 PM

It's hard to tell if SPX is consolidating just under resistance, which should lead to a breakout, or if it's getting ready to drop back down. It's a short at resistance but then get ready to switch long if it breaks out. Or just stay flat until we get past today (my choice).

Jane Fox : 12/31/2007 1:37:58 PM

Oh my goodness gracious - look at this move in the US$. Certainly did find support. Link

Keene Little : 12/31/2007 1:14:06 PM

The top of the down-channel for SPX, which I showed earlier (10:43), is currently near 1473, a little more than 2 points higher.

Jane Fox : 12/31/2007 12:55:09 PM

VIX is hovering at daily highs telling me "IF" we get any kind of movement today it will be down. Link

Jane Fox : 12/31/2007 12:54:16 PM

AD line hit a low of -1296 but has now climbed to -878, still bearish.

Keene Little : 12/31/2007 12:36:09 PM

So far it appears we're simply consolidating at the lows which points to new lows before finding a potentially tradeable bottom.

Jane Fox : 12/31/2007 11:43:03 AM

Here are the overnight charts and as you can see they are not pretty. All markets have now broken their previous day lows. Link

Keene Little : 12/31/2007 11:37:43 AM

SPX 1460.40 would be a 62% retracement of the rally off the Dec 18th low. I could be tempted to try a long play there. I haven't seen enough evidence yet to entice me into a long play yet though. Stay short the market until the downtrend breaks.

Keene Little : 12/31/2007 11:34:52 AM

While ES closed its gap (and a little more) at 1474.75 it'll be interesting to see if the market drops a little further so that SPX can close its gap at 1460.56, about another 5 points below this morning's low so far. The wave pattern looks as though it could use a little more stair-stepping lower before potentially setting up a larger bounce.

Keene Little : 12/31/2007 11:05:12 AM

ES gap closure would coincide with SPX hitting the bottom of its down-channel at 1465 if it were to drop from here (and not wait another hour or two). Could even offer up a little buying opportunity (just keep in mind that it would be a counter-trend play until the down-channel is broken).

Keene Little : 12/31/2007 10:56:51 AM

Gaps (from Dec 21 gap up) to consider if we see a continuation lower today are at ES 1474.75, YM 13352 (just closed) and NQ 2099.

Keene Little : 12/31/2007 10:47:44 AM

The same down-channel for the COMP is currently near 2645 and a 50% retracement of the rally off the Dec 18th low is at 2641 (currently trading just below 2652).

Keene Little : 12/31/2007 10:43:19 AM

For now we've got a down trend so that's the way to trade the market (if you're so inclined today) until it's no longer a down trend. There's an internal Fib projection pointing to SPX 1463 for potential support and that would be at the bottom of its down-channel by noon: Link

Keene Little : 12/31/2007 10:09:31 AM

I see a couple of upside targets for gold as it makes its move out of the sideways triangle since November. It looks like it might correct over the next day or two before heading higher. The triangle gives it an upside projection near 888. I see potential resitance near 863 (which would be slightly higher than its 855 November high) so I'll be watching to see if it can get up there and potentially stall. Sideways triangles typically point to one last thrust to finish the trend move, up in this case, and therefore the coming high in gold should be a long-lasting one. Link

Jane Fox : 12/31/2007 10:08:51 AM

SAN FRANCISCO (MarketWatch) -- The dollar was mixed Monday, gaining on the euro but slipping against the yen and British pound sterling on the last trading day of the year. "The U.S. dollar continues to trade with a soft tone on the last day of 2007 in keeping with the past year's trend," wrote currency analysts at Brown Brothers Harriman. The dollar index, which tracks the greenback against a basket of six major currencies, was at 76.210, up from 76.190 in late U.S. trading Friday. The dollar was buying 111.53 yen, down from 112.55 yen late Friday. The euro was trading at $1.4677, down from $1.4715 Friday and the pound was at $2.0027, up from $1.9932 Friday.

Jane Fox : 12/31/2007 10:08:19 AM

Dateline WSJ - WASHINGTON -- Existing-home sales managed a small climb during November, the first increase in nine months, but prices tumbled.

Home resales rose to a 5.00 million annual rate, a 0.4% increase from October's revised 4.98 million annual pace, the National Association of Realtors said Monday. October's rate was originally estimated at 4.97 million.

The median price of a previously owned home was $210,200 in November, down 3.3% from $217,300 in November 2006. The median price in October this year was $206,900.

The NAR said disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months. The November resales increase was the first since February 2007; the sales level of 5.00 million was in line with Wall Street expectations.

"Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that's good news because it'll be a further sign that the housing market is stabilizing," NAR chief economist Lawrence Yun said.

Jane Fox : 12/31/2007 10:06:26 AM

Nov. existing-home inventory falls to 10.3-month supply

Nov. median existing-home price down 3.3% vs. year ago

Nov. existing-home sales in line with expectations

Nov. existing-home sales rise 0.4% to 5.0M pace

Jane Fox : 12/31/2007 10:02:00 AM

SAN FRANCISCO (MarketWatch) -- Gold futures fell for the first time in six days on Monday, as the dollar, which tends to move in the opposite direction of gold, rose for the first day in six against a basket of major currencies. Gold futures for February delivery lost $3.7, or 0.4%, to $839 an ounce on the New York Mercantile Exchange. It fell to an intraday lower of $836.1 earlier. The dollar index, which tracks the value of the greenback against a basket of major currencies, moved up for the first time in six days. The dollar also gained against the euro.

Jane Fox : 12/31/2007 9:58:28 AM

SAN FRANCISCO (MarketWatch) -- Crude-oil futures rose modestly on Monday, boosted by continued concerns on political tensions in Pakistan and tight supplies in the U.S. Crude futures for February delivery gained 60 cents, or 0.6%, to $96.6 a barrel on the New York Mercantile Exchange. It rose to an intraday high of $96.78 earlier in electronic trading. "The geopolitical upheaval triggered by the [former Pakistani prime minister Benazir] Bhutto assassination could get stirred up again ahead of the January 8th elections," said Edward Meir, an analyst at futures brokerage MF Global, in a research note.

Jane Fox : 12/31/2007 9:57:39 AM

4 minutes away from the Existing Home Sales release.

Jane Fox : 12/31/2007 9:55:53 AM

I have been talking about the bearish head and shoulders (blue circles) on the SPX chart but on closer inspection you can see another head and shoulder (green rectangles) and this one is bullish. This is your ultimate battle of the bulls and bears and we all wonder, which one will win? I don't know but I am putting my money on the bulls. Link

Keene Little : 12/31/2007 9:48:53 AM

If Friday's lows hold (COMP made a slightly lower low), the bullish divergences against Friday's lows suggest we could get a bigger bounce. But if prices drop back down again then I see downside potential to the bottoms of the parallel down-channels for the decline from last Wednesday (e.g., SPX 1466 and COMP 2648).

Jane Fox : 12/31/2007 9:44:40 AM

And here is the chart of the US$ right at support. Link

Jane Fox : 12/31/2007 9:43:34 AM

Here is your daily chart of Gold, it is sitting right at resistance. Link

Keene Little : 12/31/2007 9:26:16 AM

I see that eSignal still hasn't fixed the problem with no ECBOT data (such as YM) on their servers (for QCharts). I finally forced it onto a Santa Clara server and can get the data from there.

Keene Little : 12/31/2007 9:20:32 AM

Equity futures had a nice little gain to start the trading day until something caused a sharp little selloff at 9:00 AM which took futures to their pre-market lows. The continuing risk today will be low volume and program trading spikes.

Jane Fox : 12/31/2007 9:11:48 AM

When I captured these charts of the overnight trading the markets were testing overnight lows but as I was typing this post the overnight lows broke. Link

Linda Piazza : 12/31/2007 8:19:29 AM

I will be away from the Market Monitor today. Happy New Year, everyone! Be extremely careful about trading today, as volume may be so light that markets can easily be pushed one way or another, unexpectedly moving against the then-current setup on charts.

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