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Jeff Bailey : 1/8/2008 1:02:18 AM

Obama, McCain Get Early Nods In 1st Votes From New Hampshire

DJ- Residents of two tiny towns stayed up late to give Sen. Barack Obama, D-Ill., and Sen. John McCain, R-Ariz., early victories in the New Hampshire presidential primary. Voters in two small New Hampshire villages, Dixville Notch and Hart's Location, cast the initial ballots just after midnight Tuesday. In Hart's Location, Obama received nine votes, Sen. Hillary Rodham Clinton, D-NY, received three and John Edwards received one. On the Republican side, McCain received six, Mike Huckabee received five, Ron Paul received four and Mitt Romney one. In Dixville Notch, on the Republican side, McCain received four votes, Mitt Romney two and Rudy Giuliani one. On the Democratic side, Obama received seven votes, John Edwards two votes and Bill Richardson one vote. Long-shot GOP hopeful Rep. Duncan Hunter of California attended the vote in Dixville Notch, where results were announced before 12:06 a.m. "It epitomizes people-to-people politicking," Hunter said minutes before the votes were cast. Hunter received no votes in either town. State law allows towns with fewer than 100 people to open at midnight and to close as soon as all registered voters have cast ballots. While most New Hampshire residents have to wait until around daybreak to vote, those in the two far northern towns have been going to the polls at midnight for decades. The Balsams, located about 20 miles from the Canadian border, has been holding its early bird voting since 1960. That's when former owner Neil Tillotson, who died in 2001, arranged for early elections by having Dixville incorporated solely for voting purposes. Hart's Location began midnight voting in 1948 because most residents were railroad workers who had to be on the job during normal polling hours. Townspeople, weary of the media attention and the late hours, did away with it after the 1964 election but revived the practice in 1996. In Dixville this year, there were three registered Republicans, one Democrat and 12 who were undeclared. Hart's Location had eight Democrats, eight Republicans and 13 undeclared.

Keene Little : 1/7/2008 11:57:10 PM

Tuesday's pivot tables: Link and Link

Monday finished with daily dojis which indicates indecision. As mentioned at the end of the day, a rally on Tuesday that closes above the 50% retracement of Friday's red candle would be a bullish reversal signal after Monday's doji so that's what the bulls want to see; e.g., > DOW 12920 and SPX 1430. With the DOW and SPX holding at/near support it's clear we'll soon find out whether they're consolidating at support before breaking lower or else preparing to reverse back up.

As shown on the SPX 60-min chart, a close above 1430 would be a clear break above resistance in the 1422-1426 area as well. Any stalling of price in this area is a short play: Link

If price consolidates a little longer on Tuesday, as shown with a triangle pattern on the DOW 30-min chart, a continuation lower for another two days or so should be next (and potentially bottom inside the Jan 9-11 turn window): Link

OI Technical Staff : 1/7/2008 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.

Keene Little : 1/7/2008 6:14:07 PM

Gold looks like it should get one more leg up in its rally before it's then ready for at least a pullback if not a much stronger decline. The daily chart shows the triangle 4th wave consolidation from the November high which pointed to the final leg (5th wave) of the rally, which gold has been in since the mid-December low. The upside projection is 876 by the triangle pattern and 863-909 by a Fib projection for the 5th wave: Link

Dialing in a little closer on the 5th wave up from mid-December shows the 5-wave move for this 5th wave. Once again it looks like the 4th wave has formed a sideways triangle since the Jan 3rd high and this points to the final leg up as the 5th of the 5th wave. The projection out of the triangle points to 880 which is also where the 5th wave would equal the 1st wave (880.30) assuming we've seen the end of the 4th wave correction and gold rallies on Tuesday: Link

So there's a short term buying opportunity here for a run up to 880 (that's the potential at any rate). But then the better play should be a short play from there. I'm hoping to see the short play set up on Tuesday.

Jeff Bailey : 1/7/2008 5:51:27 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 1/7/2008 5:37:44 PM

NASDAQ NH/NL Ratio Chart at this Link

Jeff Bailey : 1/7/2008 5:29:39 PM

NYSE NH/NL Ratio Chart at this Link

Jeff Bailey : 1/7/2008 5:24:15 PM

EIA: US Retail Gasoline +5.6C In Week To $3.109/Gallon ... Regional Table Link

Jeff Bailey : 1/7/2008 5:04:49 PM

Closing Internals at this Link

Keene Little : 1/7/2008 5:02:02 PM

The COMP and RUT also finished with doji days but they look to be more in the middle of space and continue to look more bearish for the short term, supporting the bearish wave counts on the DOW and SPX.

Keene Little : 1/7/2008 4:54:41 PM

Because of the doji candle on the daily chart (indicating indecision) at its uptrend line from August, the DOW maintains the possibility of turning today's candle into a bullish reversal pattern if we get a decent rally tomorrow (preferably one that closes above at least a 50% retracement of Friday's red candle, so > 12920). Otherwise, as shown on the 30-min chart we could see a continuation lower for another two days or so. Link

Keene Little : 1/7/2008 4:32:46 PM

The DOW's pattern is so far suggesting we could get a little more choppy consolidation tomorrow before heading lower again. If price plays out as depicted on this 30-min chart then a drop to the August low at 12518 could be next, and again it could happen such that a tradeable low is put in inside the Jan 9-11 turn window. Link

Keene Little : 1/7/2008 4:10:59 PM

Have you got some risk money you want to play with? In October I had shown a downside projection for Countrywide Financial to $7.51 for the 5th wave in its decline from January 2007 (and had recommended a short play on the stock). It tagged that level today. Ready for a long play? It could be ready for a bounce back up to near $20. Just remember you're trying to catch very sharp falling knives on anything related to the mortgage/banking sector right now. Link

Linda Piazza : 1/7/2008 3:57:15 PM

Quite a recovery, isn't it? The day is still likely to produce a small-bodied candle; it's just that the body will be green instead of red. From a candlestick perspective, it still leaves some uncertainty as to next direction, with all the same possibilities. You still need to factor those in with a small-bodied candle after a sharp decline. A small-bodied candle indicates indecision. It can be followed by a third (counting Friday's) candle that creates a reversal signal, another few days of indecision characterized by small-bodied candles, or even a continuation of the decline. We just don't know which, so make your end-of-day decision based on what risks you can tolerate.

Keene Little : 1/7/2008 3:51:09 PM

Getting a little spike off the retest of this morning's low for the DOW and SPX. If it can continue then another jump back up to potential resistance in the SPX 1422-1426 area could happen tomorrow.

Jane Fox : 1/7/2008 3:49:56 PM

Economic Reports out tomorrow include:

10:00a.m. Nov Pending Home Sales. Expected: Unch. Previous: +0.6%.

3:00p.m. Nov Consumer Credit Outstanding. Expected: 8B. Previous: 4.7B.

Linda Piazza : 1/7/2008 3:41:42 PM

Time soon to make end-of-day decisions if you haven't already. Barring a big movement in the last twenty minutes of trading, it looks as if the day will produced a small-bodied candle of the type often seen after big moves. Such candles can be followed by a third candle that produces a reversal signal, but if you think that's always true, look again at the candles seen on 12/28 and 1/03. Remember when the SPX had established that rally pattern of rallying hard, consolidating sideways for a few days while the 10-sma caught up, punching down to the 10-sma and then rallying again? It can now create the opposite pattern: dropping hard, consolidating sideways while the 10-sma catches up, bouncing up to the 10-sma and then rolling down again. We don't know yet what will happen. That's why you have to make decisions based on all contingencies. If you tried a bullish trade today, you could decide you've lost the maximum you can afford and bail out this afternoon, only to have markets gap up tomorrow morning. If so, you still practiced good account management. You can bail and wake up to have markets gapped down tomorrow, too. Or you can lose money while markets go sideways for days, volatility seeping out and your option losing money.

Keene Little : 1/7/2008 3:27:54 PM

CME, like several stocks we've been watching (including AAPL's breakdown without me, grr...), has broken below a key bearish level and in so doing has negated the bullish wave count possibility. At this point I would expect a 4th wave correction for its decline from the December high and then a 5th wave down, probably finding support at its 200-dma near 584. Then a big correction of the decline before heading lower again next month: Link

Jane Fox : 1/7/2008 3:12:43 PM

The market got down to 12793 and our full target was at 12792. I certainly hope you took profits and did not wait for that last tick.

Keene Little : 1/7/2008 3:09:32 PM

I had mentioned earlier this morning that the drop by SPX below 1406 throws the bullish wave count possibility out the window. That's not entirely true. It threw one of them out the window but there is one more which won't be negated until SPX drops below the August low. I consider the bullish possibility very low odds at this time but we'll let price lead the way (as it probably will follow the RUT below the August low).

The daily chart shows the light green wave count as an A-B-C-D-E triangle 4th wave correction since the July high and the current decline would be finishing it (which as wave-E often will under throw the bottom of the triangle as it's done here). That calls for a rally to at least test the July high within the first quarter of this year (and be a mirror of what we saw in 2002-2003). Link

The bearish wave count (dark red) calls for a continuation lower and probably down to the August low and the bottom of a parallel down-channel from the October high. Interestingly that low could be put in inside the Jan 9-11 turn window and mark a low for a bigger bounce from there. The 60-min chart shows how the decline might look in the next couple of days (with a possible bounce back up to 1425-1426 before dropping again, shown in light red): Link

Jeff Bailey : 1/7/2008 3:07:05 PM

I have a meeting I must get to. See you in this evening's Market Wrap!

Jeff Bailey : 1/7/2008 3:06:39 PM

03:00 Internals found at this Link

Linda Piazza : 1/7/2008 3:03:29 PM

The nature of trading in U.S. equities sometimes changes about now, when the bond markets close.

Linda Piazza : 1/7/2008 3:00:33 PM

So far today, we've seen some bullish formations that either didn't confirm or else flopped after confirming (inverse H&S's, morning star patterns, etc.). Bulls are trying, but they're not making much headway. Resistance levels, where indicated to be strong, have been holding.

On a Keltner level, however, some indices are again showing potential bullish divergences. If the SPX can hold about 1404.60 on 15-minute closes, for example, it will be holding the support of a Keltner line that was resistance until about 11:30 ET. We're just witnessing the effects of the testing going on before next direction is decided, with no signal particularly trustworthy.

Jane Fox : 1/7/2008 3:00:45 PM

I would be taking profits at around 12800 and not wait for full profits.

Keene Little : 1/7/2008 2:58:03 PM

It certainly looks like we've got at least a test of this morning's low in progress. If the low holds then it will be another bullish divergence but I wonder if we'll be working off the oversold in time rather than price.

Jeff Bailey : 1/7/2008 2:53:04 PM

Current OPEN MM Profiles that I've made at this Link

Noting "Last" trade and "AvgHLC" of session. As if computers in control.

Linda Piazza : 1/7/2008 2:50:29 PM

The SPX has got to do better than that if it's going to fulfill any hopes of a short-term rally. It closed the 15-minute period high enough to tentatively verify the short-term reversal signal (morning star) on its 15-minute chart, but it also closed that 15-minute period below presumed significant resistance now at 1415.43 on 15-minute closes. It also closed the period below the 9-ema, with that average now at about 1413.75.

Jeff Bailey : 1/7/2008 2:45:52 PM

"Amazing" ... each open trade's underlying security right at "AvgHLC" of day.

Looking "squared up"

Jane Fox : 1/7/2008 2:41:17 PM

Lower stop to 12881.

Linda Piazza : 1/7/2008 2:36:58 PM

The SPX barely clings to the support near currently near 1411.10 on 15-minute closes. The last 15-minute candle, however, was a doji after a taller red candle that preceded it, setting up the potential for a reversal signal. That will require a gain this 15-minute period, perhaps to or above 1416.

As should be obvious from now by my comments and those of others, as well as your own chart observations, big money is hammering out short-term direction. A confusion of signals exists. Don't bet the farm on any one outcome.

Jeff Bailey : 1/7/2008 2:30:12 PM

US Navy: F-18 Crash (update) ... DJ- Two U.S. Navy fighter jets plunged into the Persian Gulf Monday, after what initial reports suggest was a mid-air collision, a defense official said.

All three pilots ejected safely from the planes and were headed back to the USS Harry Truman, the aircraft carrier they were operating from, according to the official, who requested anonymity because the information was preliminary and not yet released publicly. No other details or the crash were released.

One of the F-18 jets that crashed held two pilots, the other held just one.

Jeff Bailey : 1/7/2008 2:22:34 PM

Boeing (BA) $83.04 -3.23% ...

Jeff Bailey : 1/7/2008 2:21:25 PM

DJ- 2 F-18 Jets Crash In Persian Gulf; No Fatalities

Jeff Bailey : 1/7/2008 2:20:39 PM

Krispy Kreme Stock Rallies As CEO Brewster Resigns

KKD $3.10 +9.54% ...

Jeff Bailey : 1/7/2008 2:18:59 PM

Fed's Lockhart: Fed Has Done Credible Job Tackling Risks

DJ- More interest-rate cuts may be on the way, but Federal Reserve Bank of Atlanta President Dennis Lockhart still doesn't see a U.S. recession on their heels. The central banker said Monday he "wouldn't foreclose" the possibility that the Fed will lower its target rate again, having cut at each of the last three meetings. Speaking to reporters following his speech to a Rotary Club conference on the economic outlook, Lockhart outlined his concerns that the "negatives in the economy may be gaining momentum." He was careful not to endorse the increasing popular view among economists that the U.S. is headed for recession, however. "I am predicting a slowing but growing economy at this stage," he said. Nevertheless, the negatives appear to have overridden Lockhart's persisting concerns about a rising cost of living. "I am concerned about inflation but I am certainly equally, or more, concerned about...the mounting slowness" of U.S. growth, the central banker said. His words appear to vindicate the more aggressive bets by market players over the past few weeks for a further drop in the Fed's 4.25% target rate. The Fed funds futures market - which trades on interest rate expectations over the near-term - is currently pricing a more than 60% chance of a 50-basis-point cut at the Jan. 29-30 meeting. In an earlier audience question-and-answer session, Lockhart explained that though oil recently spiked above $100 a barrel, the Fed based its inflation outlook on a slightly lower cost. "We do have access to a number of forecasts and projections from very credible sources," Lockhart said. "The ones that we're building our forecast on reflected a softening of oil prices...to high levels but something more in the $80-$90 range" this year, he said.

Jeff Bailey : 1/7/2008 2:17:20 PM

Vail Resorts (MTN) $51.79 -0.82% ...

Jane Fox : 1/7/2008 2:16:59 PM

NEW ORLEANS (MarketWatch) -- Gathered in this city struggling to regain its footing after Hurricane Katrina, a group of leading economists said the U.S. is getting hit by another damaging storm: the global credit crunch.

Many analysts gathered at the American Economic Association's two-day annual meeting spoke of a recession as almost a given but differed over how severe it will be.

"The recession is likely to be a serious one," said Dean Baker, co-director of the Center for Economic and Policy Research.

He estimated losses in prime mortgages will be two to three times the $160-$200 billion hit seen in the subprime sector. This, he said, will lead to large losses at banks and difficulty for Fannie Mae and Freddie Mac.

University of Chicago professor of finance and former chief economist at the International Monetary Fund, Raghuram Rajan, said questions in the media over whether the U.S. economy will fall into recession are really only about semantics.

"We are going to have very low growth in the first two quarters of the year. Whether it is negative or zero, it is going to feel like the same thing," Rajan said.

Jeff Bailey : 1/7/2008 2:16:56 PM

Rain/Snow Forecast Link

Jane Fox : 1/7/2008 2:14:38 PM

WASHINGTON (MarketWatch) - About 45,000 out of 1.8 million at-risk subprime borrowers have asked for help to refinance their mortgage under an industry-wide plan to prevent foreclosures, Treasury Secretary Henry Paulson said Monday.

In a speech in New York, Paulson said the Treasury-backed plan to prevent subprime foreclosures has now been joined by firms representing 90% of the subprime market. Within a few weeks, the industry will begin "fast-tracking" some qualified borrowers into new, affordable loans, Paulson said.

The effort could be extended to other adjustable-rate loans, not just subprime loans, Paulson suggested.

"A housing correction was inevitable and necessary," Paulson said.

In brief remarks on the economy, Paulson said he expected it to "continue to grow."

Jane Fox : 1/7/2008 2:13:32 PM

WASHINGTON (MarketWatch) -- The biggest danger to the U.S. economy right now is that financial markets could remain unsettled, said Atlanta Fed President Dennis Lockhart on Monday.

In remarks prepared for delivery in Atlanta, Lockhart delivered a "sober" message about the economic outlook, stressing the uncertainty about the outlook for both growth and inflation.

"The negatives in our economy may be gaining momentum," he said. Policymakers must respond "pragmatically."

Lockhart participates in discussions in the Federal Open Market Committee, but is not a voting member this year.

Lockhart said he expects "sluggish" growth in the first half of the year before a gradual improvement. He expects inflation to moderate in 2008, but said his forecast could be too optimistic.

Linda Piazza : 1/7/2008 2:11:51 PM

At 109.02 as I type, the USDJPY is still holding, but bulls aren't able to advance it yet. It's still not predicting anything much one way or the other for U.S. equities, but the holding of this level is perhaps ever so slightly in the favor of short-term equity bulls. That can be undone rather quickly, as is typical of a disorganized choppy day after a big move.

Jane Fox : 1/7/2008 2:10:54 PM

Lower stop to 12881.

Linda Piazza : 1/7/2008 2:08:29 PM

SPX short-term bulls didn't really want to see this potential Keltner support tested, but it is being tested. It's at about 1411.65 on 15-minute closes. When I glance back at the 7-minute chart, is see a potential target back at 1407.00 if this doesn't hold on 15-minute closes.

Keene Little : 1/7/2008 2:08:25 PM

Got the minor new low (so far it's only minor) so now watch for a bounce and we'll see if it's going to be more of a sideways/up consolidation (bearish) or something sharper to the upside (at least potentially bullish for another leg up to match the one off this morning's low).

Jane Fox : 1/7/2008 2:08:24 PM

Short from 12848, stop at 12904 and target is 12904 - 12848 = 56; 12848 - 56 = 12792. WE will need to get a tad more into profit before I lower the stop.

Jeff Bailey : 1/7/2008 2:05:17 PM

NVIDIA (NVDA) $28.01 -6.66% ...

Jane Fox : 1/7/2008 2:04:58 PM

As a matter of fact the large cap markets are now breaking their overnight lows - again.

Jeff Bailey : 1/7/2008 2:04:50 PM

Take-Two Interactive (TTWO) $16.66 -4.19% ...

Jane Fox : 1/7/2008 2:04:30 PM

This is not looking at all bullish. the Russell 2000 futures (ER2) is the only market that has broken its overnight highs. Link

Jeff Bailey : 1/7/2008 2:04:27 PM

Activision (ATVI) $27.96 +0.43% ...

Jeff Bailey : 1/7/2008 2:03:39 PM

Electronic Arts (ERTS) $54.25 -0.47% ...

Jeff Bailey : 1/7/2008 2:03:13 PM

Microsoft (MSFT) $34.53 +0.43% ...

Jeff Bailey : 1/7/2008 2:02:47 PM

Sony (SNE) $54.39 +3.75% ...

Keene Little : 1/7/2008 1:58:56 PM

Another minor low and then we'll see whether we start a larger bounce back up or consolidate again before another step lower.

Jeff Bailey : 1/7/2008 1:58:12 PM

PS3 Holiday Sales Total 1.2 Million ... AP Story Link

Jeff Bailey : 1/7/2008 1:56:59 PM

THOUSANDS WITHOUT POWER IN CALIFORNIA AS STORMS CONTINUE

DJ- Tens of thousands of Californians are still without power after a series of fierce storms pound the state over the weekend and topple nearly 500 miles of power lines.

Jane Fox : 1/7/2008 1:55:53 PM

I am now short YM at 12848

Jeff Bailey : 1/7/2008 1:52:21 PM

Schnitzer's Earnings Press Release at this Link

Jeff Bailey : 1/7/2008 1:50:59 PM

SCHNITZER STEEL 1Q NET MISSES EXPECTATIONS

Schnitzer Steel earnings rise 17% to of $24.7 million, or 85c a share, in its fiscal 1Q, as revenue rises 18% to $603.9 million. Shares fell 8% pre-market as the company continues to feel the sting of tight global shipping markets.

SCHN $62.90 -1.17% ...

Linda Piazza : 1/7/2008 1:50:48 PM

The USDJPY is holding up okay. That potential inverse H&S has been invalidated, however, not because the USDJPY dropped far enough to invalidate it but just because so much time elapsed without a confirmation. Just another sign of the confusion in the markets. That's natural after a week like last week. Aren't you a little confused about what happens next? So is everyone, including forex traders.

Jane Fox : 1/7/2008 1:49:51 PM

I am going to lower that short entry to 13848. Stop will be 12904 and target 1:1 ratio to the risk.

Jeff Bailey : 1/7/2008 1:49:15 PM

BIOGEN SEES '07 EARNINGS ABOVE EXPECTATIONS

DJ- Drug maker says 2007 earnings will be above the top end of its previous estimate and releases guidance for 2008 as the company rides a wave of strength growth momentum.

BIIB $57.89 +4.83% ...

Jane Fox : 1/7/2008 1:48:23 PM

I will be taking a YM short at 12849.

Linda Piazza : 1/7/2008 1:45:56 PM

I'm switching back to a 15-minute chart for the SPX and OEX. Short-term bulls want to see 15-minute closes above the Keltner lines now at 1418.44 on the SPX and 664 on the OEX. Both are slightly below those levels as I type, but the 15-minute period isn't over yet. Further support at 1412.60 on the SPX and 661.25 on the OEX, both on 15-minute closes.

Linda Piazza : 1/7/2008 1:43:14 PM

That resistance mentioned in my 1:22:06 post was firm, as it looked on the charts. Both the SPX and the OEX pulled back to regroup. We're into one typical stop-running time of day, so big money might decide to test the waters by either attempting to push prices lower and see if there's some buying or renewed selling, or by pushing prices higher and seeing if bulls jump on or use the opportunity to get rid of inventory. So, the next few minutes, up until about 1:55, may give us some idea about the afternoon's direction, but we really don't have much information yet. We won't be able to trust the information we get, either.

Keene Little : 1/7/2008 1:41:48 PM

There's nothing particularly bearish about the pullback yet so another push higher looks possible.

Jeff Bailey : 1/7/2008 1:22:37 PM

01:00 Internals found at this Link

Linda Piazza : 1/7/2008 1:22:06 PM

SPX short-term bulls now want a sustained push up through 1426.50; OEX, through 667.40. In both cases, the resistance seems firm, but that's what short-term bulls would like to see.

Linda Piazza : 1/7/2008 1:16:40 PM

Is the RUT leading the pack? It broke to a new high for the day, although it's currently pulled back to retest it. An observant subscriber has noted the similarity in the patterns of many indices, including the RUT. Those patterns include inverse H&S's on the short-term charts (3, 5 and 7-minute, for example). The RUT punched just above the neckline, but it's coming back to retest it. Short-term bulls don't want a strong push lower here. The RUT is at 727.77 as I type, and bulls would prefer a move higher from here or perhaps from as low at 726, but no lower.

Keene Little : 1/7/2008 1:14:47 PM

For shorter term traders, if you're long the current bounce, keep an eye on the uptrend line from this morning's low since that shouldn't break if we've got higher to go. Conversely, use a break of the uptrend line as a signal that short is the place to be. The risk is that we could just chop sideways today and a break of the trend line will only result in a choppy pullback before bouncing again. NQ is just starting to break its uptrend line now.

Jeff Bailey : 1/7/2008 1:13:49 PM

Beautiful looking exit at this point on the QCB-NK. Almost low of day in PRICE, high of day in volatility.

Jeff Bailey : 1/7/2008 1:12:09 PM

VIX.X 23.43 -2.13% ... just kissed WEEKLY Pivot within last 20 minutes.

Jeff Bailey : 1/7/2008 1:08:21 PM

Volume at big board notably heavy this morning.

Linda Piazza : 1/7/2008 1:06:34 PM

Jane mentioned a few minutes ago that overnight highs had not been broken. On the cash market, I'm noting that the TRAN has also not broken its high of the day, something that short-term equity bulls want to see happen. That early morning high was 4318.47, and the TRAN is at 4301.57 as I type.

Jeff Bailey : 1/7/2008 1:05:37 PM

DIA's Dividend Distribution History Link

Linda Piazza : 1/7/2008 1:03:42 PM

The nearest resistance on the SPX's 7-minute chart is now at 1424.57 and 1426.71. For the last 40 minutes or so, the SPX has been forming 7-minute closes at or above the 9-ema, and that's now at 1419.68. So, if there's a pullback to regroup before trying that resistance again, short-term bulls would like that support to hold on 7-minute closes. SPX at 1421.98 as I type.

Jeff Bailey : 1/7/2008 1:03:13 PM

Weekly/Monthly Index Pivot Matrix found at this Link

Will take note of DIA correlative resistance. That intraday block trade from 11/27/07, and upcoming dividend distribution (ex-date 1/18/08, Record date 1/23/08, Pay data 2/11/08).

Jane Fox : 1/7/2008 12:49:50 PM

Here is Crude tagging $95.00/bl. If you see evidence of this support holding then I would try to get long crude (using the ETF USO) or add to your current position. Link

Linda Piazza : 1/7/2008 12:49:12 PM

The USDJPY is now at 109.06, still tentatively holding onto support that short-term U.S. equity bulls want to see maintained.

Linda Piazza : 1/7/2008 12:47:48 PM

Strongest nearby Keltner resistance on the SPX's 7-minute chart has now drifted down to 1424.26 and 1426.80. On the OEX, the congruence isn't as strong on the 7-minute chart, but is currently at 666.92-667.60.

Jane Fox : 1/7/2008 12:38:37 PM

Overnight highs have still not been broke. Link

Keene Little : 1/7/2008 12:36:10 PM

For the DOW there is a downtrend line from the bounce on Dec 31st that's currently near 12900 and for SPX it's the broken March 2003 uptrend line near 1425. If they can push back up after pulling back mid day, two equal legs up would be at DOW 12909 and SPX 1430 (so SPX has a little more upside potential in that regard as compared to the DOW. Those levels are where I'm hoping we see rallies up to and then evaluate the setup for a short play.

Linda Piazza : 1/7/2008 12:34:53 PM

At 4298.12 as I type, the TRAN approaches its previous high of the day, at 4318.47. SPX, OEX and Dow bulls want to see the TRAN lead the way to a new high of the day. They don't want to see it roll over from a test of that previous high of the day.

Linda Piazza : 1/7/2008 12:32:22 PM

Short-term bulls need a new high of the day to help confirm the holding of new support. The previous high of the day was 1422.21. Keltner resistance on 7-minute closes is layered from 1421.03 up to 1427.19, with the highest being the toughest of them all. It's still slanting down, so is likely to be lower when finally tested, unless there's a strong and sudden burst up through it. The SPX is at 1417.78 as I type. I'll switch back to the 15-minute charts as soon as I'm sure that these early tentative signs of a change in tenor are holding.

Linda Piazza : 1/7/2008 12:19:22 PM

After dropping back to test that 108.60-108.64 zone (see my 8:21:09 post this morning) and actually violating it by 0.02, the USDJPY charged higher. It reached as high at 109.23. It is currently at 109.03, having dropped back into the right shoulder zone of a potential inverse H&S. The neckline of that inverse H&S is just above the neckline of the confirmed regular H&S from this morning. When I see such competing formations setting up, I know there's still a bull versus bear battle going on. U.S. equity bulls want to see sustained USDJPY values above 108.90-109.00 and then eventually a push above the overnight high of 109.71. Right now, those competing formations are obvious visual clues that we just don't know the outcome for today yet, but there's tentative hopefulness from this currency pair. Just tentative, though. Don't go betting the farm on continued strength here.

Linda Piazza : 1/7/2008 12:14:27 PM

And, as I thought might happen, the SPX is dropping back to retest the Keltner line that had provided resistance for more than a day. Those with short-term bullish hopes want to see that line provide support now on 7-minute closes. The line is now at 1413.17 and will move a little with SPX movement.

Linda Piazza : 1/7/2008 12:02:42 PM

For the first time since Friday morning, the SPX has been maintaining 7-minute closes above a Keltner line now at 1413.78. That's a first tentative sign in the right direction for those who are betting on the bullish side over the short-term, but I wouldn't be surprised to see a retest of that former resistance line.

Jeff Bailey : 1/7/2008 11:58:30 AM

Current OPEN MM Profiles that I've made at this Link

CLOSED OUT the QCB-NK at $5.00 as BOOM traded target of $53.00.

Linda Piazza : 1/7/2008 11:39:30 AM

Keene is wise to have brought up the doji on the daily chart earlier today. It wouldn't be surprising to see such a doji at the end of the day, either, so factor in that possibility as you're making trading decisions. Short, sharp relief rallies are characteristic after such declines as we had last week, but there absolutely has to be some margin selling today, as Jim mentioned this weekend. So, there's still a lot to sort out and it's still going to be treacherous. I sound as if I'm talking out of both sides of my mouth today, but that's because of the uncertainty in the markets right now.

Keene Little : 1/7/2008 11:35:57 AM

If SPX can make it back up to its broken uptrend line from March 2003, at 1425, that would be a potential setup for a short play.

Linda Piazza : 1/7/2008 11:34:23 AM

USDJPY now at 109.13. U.S. equity bulls want to see 108.90-109.00 maintained now, and then want to see a push above the overnight high or 109.71.

Jane Fox : 1/7/2008 11:30:35 AM

Markets are quite back to their overnight lows yet and may find some resistance there if they should decide to revisit those low.. Link

Jeff Bailey : 1/7/2008 11:29:18 AM

11:00 Internals found at this Link

Linda Piazza : 1/7/2008 11:25:06 AM

The USDJPY is now at 108.93. The USDJPY needs to maintain values above about 108.90-109.00 to begin to provide some support to bullish hopes for U.S. equities.

Linda Piazza : 1/7/2008 11:23:48 AM

That Keltner marker that we were watching earlier on the SPX's 7-minute chart has now dropped to 1415.40. Even a minor change in tenor requires that the SPX maintain 7-minute closes above that Keltner line. There was one brief close above it, but it wasn't maintained.

Keene Little : 1/7/2008 11:18:11 AM

DOW and SPX back to the flat line and the daily candle is just a doji. So far we have no resolution as to what's next.

Jeff Bailey : 1/7/2008 11:00:48 AM

Swing trade put target alert! ... for the one (1) Dynamic Materials BOOM Feb $55 Put (QCB-NK) at the bid of $5.00.

BOOM $52.87 -8.19% ...

Jeff Bailey : 1/7/2008 10:56:49 AM

National Temperatures Link ... Most likely a forecast for warmer temperatures in eastern U.S. for profit taking in oil.

Jeff Bailey : 1/7/2008 10:54:58 AM

Oil Futures: Nymex Crude Below $96 On Weather, US Growth Concern

Jane Fox : 1/7/2008 10:50:58 AM

The markets were what I considered bearish overnight because they consolidated at previous day lows subsequently I predicted the AD line would open bearish but it did not it opened quite bullish. However, the bulls obviously did not have a firm hold on the ball and fumbled and the bears recovered it and ran for touchdown (they were able to break overnight and previous day lows). Link

Linda Piazza : 1/7/2008 10:42:13 AM

The USDJPY hit a low of 108.58, just below that 108.60-108.64 zone I've been mentioning, but it's bouncing hard from it so far. It's at 108.75 as I type. It needs to get back above and maintain values above 108.90-109.00 before the bounce means much, though.

Keene Little : 1/7/2008 10:36:35 AM

SPX has now broken the November low, joining the COMP and RUT in doing so. The DOW will likely be next with a drop below 12724. This confirms the bearish signal we got from the techs and small caps. With the oversold conditions I suspect we're not far from a decent bounce but that's all I expect now--just a bounce. The bullish wave counts have been thrown out the window on SPX now. We've got clarity back in the market now.

Linda Piazza : 1/7/2008 10:34:38 AM

Potential bullish divergences (Keltner and price/RSI) have now been erased on the SPX's 7-minute chart.

Linda Piazza : 1/7/2008 10:32:40 AM

USDJPY now at 108.68, dropping toward the 108.60-108.64 downside target predicted by its confirmed H&S this morning. It needs to bounce soon or else the whole overnight gain is questioned. Moreover, in meeting this target, it's now confirmed a larger H&S, with the entire previous one now just the head of the larger formation. So, the USDJPY needs to find support soon and then bounce soon back above about 108.90-109.00 and maintain levels above that. Until now, all we've had is a gap test, but much below this and matters looks worse.

Linda Piazza : 1/7/2008 10:30:15 AM

There was a 7-minute SPX close at that support level mentioned earlier or just a little below it. (Keltner lines are dynamic and this one had drifted a little lower as the SPX punched below it.) So, the Keltner outlook is actually slightly stronger than it was when the SPX was last testing this 1410 level on Friday, even though it punched a little lower. This is an outlook given on a 7-minute chart, so like a fast oscillator setting, a 7-minute chart can give quicker signals but also more false ones. Anyway, all the evidence that I have this morning is that there's still some weakness to be sorted through and we don't know the outcome yet. Some tentatively hopeful signs have occurred, but the VIX argues against them all. It came back to test the inverse H&S neckline I mentioned earlier and now it's bouncing again. It needs to roll over and the USDJPY needs to climb to offer support to bullish equity hopes.

Jane Fox : 1/7/2008 10:25:42 AM

Both AD line and volume are now below 0. Market is leading the internals today so it may be one of those days when the VIX follows the S&P futures and not the other way around.

Keene Little : 1/7/2008 10:24:38 AM

New lows below Friday's but the 10-min charts (and 30-min) continue to show bullish divergences with MACD. It's risky trying to catch falling knives here but chasing this lower could be equally risky.

Jane Fox : 1/7/2008 10:24:05 AM

All markets have now breached overnight lows and are heading lower. Be aware the VIX is NOT making new daily highs so is not supporting this selloff.

Linda Piazza : 1/7/2008 10:22:48 AM

If the SPX should maintain support on 7-minute closes at about 1411.70, it actually looks better on the 7-minute Keltner chart than it did on Friday when it was last testing the current price levels. It's below that now, but without a 7-minute close below that level. It's not looking great, though, is it?

I'm still watching the USDJPY, now at 108.85, for clues. Since early this morning, I've been warning that the confirmed H&S on its chart might suggest that it would work against U.S. equity strength at the beginning of the day, but that if 108.60-108.64 support is maintained, perhaps no big damage is done. It's just a gap test. Below that questions the whole USDJPY overnight gain, though, and that questions any U.S. equity strength.

Jeff Bailey : 1/7/2008 10:18:53 AM

Dynamic Materials (BOOM) $56.53 -1.84% ... reverses gains from $59.86 earlier this morning.

Jeff Bailey : 1/7/2008 10:18:10 AM

Allegheny Tech (ATI) $79.86 -3.61% ... slips below 8/16/07 relative low. New 52-weeker here.

Jeff Bailey : 1/7/2008 10:16:41 AM

MCDONALD'S TO TAKE ON A WEAKENED STARBUCKS

DJ- McDonald's is setting out to poach Starbucks customers with the biggest addition to its menu in 30 years. Starting this year, the company's nearly 14,000 U.S. locations will install coffee bars with 'baristas' serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks's ice-blended Frappuccino.

MCD $57.32 +0.49% ...

SBUX $18.36 +1.38% ...

Jeff Bailey : 1/7/2008 10:15:21 AM

PetroChina (PTR) $176.53 +0.30% ...

Jeff Bailey : 1/7/2008 10:14:50 AM

IRAN BOATS THREATENED US NAVY SHIPS

DJ- Five Iranian revolutionary guard boats harassed three U.S. Navy warships sailing in Straits of Hormuz Saturday with threatening moves and radio transmissions, CNN reports. Straits of Hormuz is key route for international crude oil shipments.

USO $76.20 -1.43% ...

Jeff Bailey : 1/7/2008 10:13:46 AM

SALLIE MAE NAMES TERRACCIANO CHAIRMAN

DJ- Shares of SLM Corp. rise 12% after student lender announces Tony Terracciano, former First Union Corp. president, has been appointed chairman of the board. Al Lord has been appointed vice chairman and will continue as CEO.

SLM $18.68 +12.05% ...

Keene Little : 1/7/2008 10:11:35 AM

The longer we see the market consolidate near Friday's lows the more bearish it will appear. The risk for the bears is that new lows on Friday were being met with some bullish divergences so it's hard to see a lot more downside here. But price action is so far not bullish as it chops around near the lows. It's a time for both sides to be careful.

Linda Piazza : 1/7/2008 10:03:57 AM

The SPX is not sustaining that breakout above Keltner resistance on the 7-minute chart. I noted earlier that it needed to sustain the move above that Keltner resistance, now at 1419.68, and not just have an early breakout above it, before there was a real change in tenor. So far, nothing terrible has happened, but nothing terribly bullish has, either. The USDJPY is headed down again, now at 109.00, so far remaining above the 108.60-108.64 level that U.S. equity bulls want to see maintained.

Linda Piazza : 1/7/2008 10:00:14 AM

The VIX's action over the last half of last week described and then confirmed a continuation-form inverse H&S. All that's happened this morning is that the VIX has come down to retest the neckline, at about 24.00-24.05, depending on how it's drawn. The VIX is at 24.10 as I type. Equity bulls want it to drop further than this.

Jane Fox : 1/7/2008 9:57:23 AM

Even with all this bullishness the overnight highs are still intact. Link

Jeff Bailey : 1/7/2008 9:56:29 AM

Origin Agritech (SEED) $10.83 +11.19% ... strong for a 2nd-straight session. #7 most active.

Jane Fox : 1/7/2008 9:54:47 AM

VIX is making new daily lows supporting the bullishness.

Jane Fox : 1/7/2008 9:54:19 AM

AD line is now +1310 and AD Volume is going straight up.

Linda Piazza : 1/7/2008 9:53:04 AM

The SPX has produced its first 7-minute close above the Keltner channel line now at 1420.10, although barely. So far, so good, though. This is just a first tentative sign of a change in tenor, and that support needs to be maintained on 7-minute closes.

Jeff Bailey : 1/7/2008 9:50:21 AM

Wachovia Bank (WB) $35.30 -0.45% ...
WB-PH $6.00 x $6.20
WB-NZ $1.05 x $1.15

Jeff Bailey : 1/7/2008 9:48:50 AM

Wachovia Sells $4.5 Billion In Extendible Notes ... (Late Friday) Reuters Details Link

Keene Little : 1/7/2008 9:48:48 AM

A retest of Friday's low for NQ resulted in a strong buying response and the buy programs have now spiked them all back up to new post-open highs. It's a little choppy this morning so far but it remains bullish. Long against Friday's lows remains the recommended play, for now.

Jane Fox : 1/7/2008 9:46:15 AM

AD volume to new daily highs now so the bulls have the ball this morning.

Jane Fox : 1/7/2008 9:45:28 AM

VIX is heading down to test its daily lows supporting the bullish AD line.

Linda Piazza : 1/7/2008 9:40:44 AM

The USDJPY is now at 109.00, with a short-term target near 108.60-108.64. Equity bulls hoping for a bounce want the USDJPY to maintain that support and bounce from it or even from above it.

Linda Piazza : 1/7/2008 9:39:28 AM

The OEX didn't have as tight a congruence to 7-minute Keltner lines as did the SPX on Friday, but it did tend to find resistance on 7-minute closes at the Keltner line now at 664.08 or the one just above that, now at 665. The OEX needs to sustain 7-minute closes above those Keltner lines to even begin to change the short-term tenor.

Keene Little : 1/7/2008 9:38:22 AM

It's looking like ES and YM have a date with gap closure first before even thinking about more rally possibility. Sudden bit of selling just hit.

Linda Piazza : 1/7/2008 9:37:25 AM

I'm going to give a tighter focus for the SPX, looking at the 7-minute chart. All day Friday, the SPX found resistance on 7-minute closes at a Keltner line now at 1420.80, so a sustained series of 7-minute closes (not just the first one) above that level would be the first necessary step in any change in tenor.

Jane Fox : 1/7/2008 9:36:06 AM

Well I was wrong about the AD line. It is a bullish +1224

Linda Piazza : 1/7/2008 9:35:42 AM

Short-term Keltner outlook for the SPX: Nearest resistance is at 1422.70 on 15-minute closes, with resistance, some strong, layered up to 1429.20 on 15-minute closes. The SPX is at 1420 as I type. Bulls need to see the SPX break back above 1429.20 and sustain values above that.

Linda Piazza : 1/7/2008 9:29:32 AM

So far, after confirming the H&S mentioned in my 8:21:09 post, the USDJPY has drifted down to 108.90, but no lower. The H&S downside target is 108.60-108.65. As long as the USDJPY finds support at or above that target level, reaching down that far isn't particularly damaging. Below that questions the whole overnight gain, though, and then I'd become a bit worried about the short-term sustainability of the equity rally. The USDJPY is now at 109.02.

Jane Fox : 1/7/2008 9:28:45 AM

WASHINGTON (MarketWatch) -- With very little pertinent economic data on the docket for the coming week, attention will turn to several speeches by Federal Reserve officials, who will give their views on the No. 1 topic: the economic outlook.

For a mainstream view from inside the Fed, look to Chairman Ben Bernanke's speech on Thursday and Fed Gov. Frederic Mishkin's talk on Friday.

On Tuesday, Philadelphia Fed President Charles Plosser, who's been one of the most vocal of the inflation-wary hawks on the Federal Open Market Committee, will present his own views.

None of the other speakers is a voting member of the FOMC this year, so their remarks will be noted with interest, but not devoured.

Keene Little : 1/7/2008 9:28:07 AM

We've got a small bounce to start the morning (although NQ just dropped marginally back into the red). The big question of course is whether or not it will hold.

Jane Fox : 1/7/2008 9:27:27 AM

The DOW's head and shoulders has a projection of 12404. Link

Jane Fox : 1/7/2008 9:22:13 AM

No doubt the bears have the upper hand on the daily charts but I am still waiting for further confirmation before I turn outright bearish. That confirmation would be a close below the November lows at 1406.

In any case the head and shoulders pattern has confirmed and suggests SPX will make it all the way down to 1350 area. Link

Jane Fox : 1/7/2008 9:14:34 AM

The US$ has found support which bolsters my Gold scenario. Link

Jane Fox : 1/7/2008 9:13:28 AM

I expect crude to retrace to about the $95.00/bl level before it takes another run at $100/bl. 95 will be the bottom of the upward channel and an area that has been identified as resistance then support. Link

Jane Fox : 1/7/2008 9:09:12 AM

Gold is holding on to its multiyear highs and is not giving any kind of indication it is ready to retrace. I am suspecting a retracement to about the 775 level and, if this market retraces like it has in the past, it will be very fast and furious. Link

Jane Fox : 1/7/2008 9:06:41 AM

The markets consolidated at previous day lows suggesting we have more downside to go. I did expect the bulls to pull up their socks overnight but these charts are telling me that did not happen. I expect the AD line to open well below 0 this morning. Link

Linda Piazza : 1/7/2008 8:21:09 AM

Overnight, the USDJPY bounced. Its overnight direction supported the direction of U.S. equity futures. Unfortunately, a little H&S has just been confirmed on the USDJPY's chart. The downside target appears to be near 108.60-108.65, which means that so far, this only projects a retest of the gap higher from Friday's close. It may mean that the USDJPY is sliding down toward that retest as our markets open, however, so you may see the USDJPY moving against the early direction of the markets as our equities open. That's not what U.S. equity bulls want to see, but as long as support is found at or above 108.60 and the USDJPY bounces from there, the damage won't look too bad. Below that, though, and the overnight rally in the USDJPY is questioned. The USDJPY is at 109.08 as I type.

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