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Jeff Bailey : 1/24/2008 2:16:22 AM

Go ahead ... take a conventional retracement on UTX from 10/02/07 high to recent 01/22/08 low. It's what's inside!

Jeff Bailey : 1/24/2008 2:16:18 AM

United Tech (UTX) ... H/S top bar chart I've been trading, PROFILED put, at this Link ... #6 heavyweight in PRICE WEIGHTED INDU/DIA/YM.

Jeff Bailey : 1/24/2008 2:16:14 AM

Dow Diamonds (DIA) similar method to 12:58:02 post at this Link

Notes: Once 11/27/08 block trade benchmark was violated back to DOWNSIDE, that was RESISTANCE. "Prairie dogged" once.

Buyers "strong enough" to keep close above Q S2.

With DIA above 19.1%, UTX decision valid.

Jeff Bailey : 1/24/2008 1:08:34 AM

Hey! That recent 1/18/08 intraday block of 2 million shares in DIA was at $121.00. That just ABOVE the now known 19.1% retracement.

Jeff Bailey : 1/24/2008 1:02:28 AM

Hey! DIA 38.2% retracement of $125.79, almost "exact" overlap with QUARTERLY S1. 50% retracement right at that 11/27/07 "large block" trade!

Jeff Bailey : 1/24/2008 12:59:31 AM

S&P Depository Receipts (SPY) similar method to 12:27:52 Link

VERY similar for now to 7/17/07 to 8/16/07 decline!!!

Jeff Bailey : 1/24/2008 12:27:52 AM

NASDAQ Comp (COMPX) daily interval chart at this Link

Three (3) different retracement, but all doing the SAME thing. Simply defining a range, and showing levels of RISK (for bull and bear).

What's YOUR stated hypothesis for 2008? That will keep YOU HONEST and WILL NOT let profits (bull or bear) evaporate.

A 38.2% retracement of an ADVANCE, or DECLINE is considered "normal." More than 61.8% retracement an alert that something has REALLY changed.

At tonight's close, I (Jeff Bailey) will have to consider the 11/21/07-11/26/07 action a POSSIBILITY. That way to stay out of trouble is to now be PARTIAL positions.

If you're "all in" and fully short, or fully long your going to get whipped.

Keene Little : 1/23/2008 11:54:39 PM

Thursday's pivot tables: Link and Link

After Wednesday's roller coaster ride there are many traders wondering what's next. Follow through to the strong afternoon rally will certainly be needed in order to confirm it wasn't just a short-covering bear market rally. Even a day of consolidation would be potentially bullish.

I'm hoping we'll see a pullback and then a new high tomorrow morning in order to give us a clean 5-wave move up from Wednesday's low. It will be a good shorting opportunity while we see what develops next. If after a 5-wave move up we get a pullback which is then followed by another push higher then we'll have our answer for at least the short term--look to buy pullbacks.

But the danger for the bulls is that the 5-wave move up will finish an A-B-C bounce off Tuesday morning's low and we'll then head for another new low. That's why I'll be looking for a shorting opportunity and then see what develops from the pullback. This SPX 30-min chart shows what I think it could look like: Link . Notice the Fib projection for the move up at 1347 matches with the 30-min 100/130 moving averages.

QCharts still hasn't filled in the missing price data for the DOW on Tuesday (thank you eSignal) but it doesn't affect the 60-min chart showing where price could find resistance at the top of its down-channel near 12400: Link . Same for the COMP with the top of its down-channel near 2350: Link

The RUT looks potentially bullish with the break out of a descending wedge pattern. Watch for support to hold at its broken downtrend line, currently near 680, to confirm the bulls are back in control for now: Link

Jeff Bailey : 1/23/2008 11:38:57 PM

Closing Internals found at this Link

Volume measures at the NYSE went "off the chart" at 03:00. That is, my sources got scrambled. NASDAQ's 3.54 billion most since 11/08/07. Major bottom benchmark of 08/16/07 had NASDAQ volume of 3.36 billion shares. A/D was 1,384/1,708. NH/NL was 36/395.

Jeff Bailey : 1/23/2008 11:28:39 PM

Closing U.S. Market Watch at this Link

OI Technical Staff : 1/23/2008 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.

Jeff Bailey : 1/23/2008 5:29:05 PM

Quote of the Day: ... "Refinance applications are up 92% since the beginning of November and purchase applications are up 7%. With tighter credit conditions we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40-80 basis point drop in rates we have seen since November 2 across products," - Jay Brinkmann, Vice President of Research and Economics at the Mortgage Bankers Association.

Jeff Bailey : 1/23/2008 5:13:34 PM

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

CLOSED out the UTX-QN at the bid of $5.40 as UTX was trading $68.21.

Sellers simply vanished.

Tab Gilles : 1/23/2008 4:02:37 PM

Art Cashin veteran floor trader on CNBC said it best... watch for higher volume on rallies with in a bear market for validity.

Tab Gilles : 1/23/2008 3:58:07 PM

SPX/NYLOW/VIX/BPSPX Link

NDX/NALOW/VXN/BPNDX Link

Keene Little : 1/23/2008 3:54:49 PM

I don't want to rain on the bulls' parade here but this sharp rally (as bear market rallies tend to be) is likely finishing the c-wave of a larger A-B-C rally off yesterday's low. Since the b-wave pullback dipped slightly below the start of wave A (the rally off yesterday morning's low) it's likely we'll see the c-wave make it up to 162% of wave A. That gives us an upside Fib target at SPX 1347 which is also into the 30-min 100/130 moving averages: Link

The drop down from yesterday afternoon was a 3-wave move and that's what has me thinking this afternoon's rally is the completion of an A-B-C correction rather than the start of something bigger to the upside. We'll know for sure tomorrow but I would be happy to take some profits off the table this afternoon if you're long this bounce. Tomorrow could be a good setup for the short side again.

Linda Piazza : 1/23/2008 3:54:34 PM

I can hear the collective sighs of relief. However, I'll say the same thing that I said yesterday. These aren't normal times. Volatility goes both ways. Before the close, assess how much risk you have if the market rolls down, decide if it's a manageable amount, and use the bounce to reduce it if it's not manageable.

Linda Piazza : 1/23/2008 3:39:46 PM

The SPX's double bottom formation (yesterday's low and today's slightly lower low) is now confirmed with a 30-minute close above yesterday's high. Standard technical analysis would suggest a gain equal to the distance between those lows (say about 1274 to be conservative) and the peak between the two troughs (yesterday's 1322.09 high, rounded off to 1322). That would suggest an upside target of 1370. I say we have to take upside targets in a bear market with a grain of salt, just as we had to take downside ones with a grain of salt in a bull market. Don't count on the target being hit but assess what you'd do if it was approached. If you're in bearish trades, be aware of the potential.

For now, the SPX is still testing that Keltner resistance on the 15-minute chart, now at 1328.83. The SPX is above it as I type, and I'd imagine that short covering could well keep it above it into the close, too, but we just have to see. A close below it would mean that it held into the close. The RUT is already well above its analogous resistance, setting an example, and I've been noting all day long that the TRAN was even further ahead.

Jeff Bailey : 1/23/2008 3:38:25 PM

Valero Energy (VLO) $52.82 -0.28% ... decent comeback underway.

Jeff Bailey : 1/23/2008 3:37:51 PM

Crude Oil and Unleaded futures daily settlements table that I keep at this Link

Far righ is March "crack spread" calculation (column AA) and April (column AB).

Keene Little : 1/23/2008 3:34:43 PM

Pretty amazing when you see the NDX 92 points up off its low for the day and still 10 points in the red. Volatility anyone?

Keene Little : 1/23/2008 3:31:54 PM

SPX has closed yesterday's gap down (as did ES). Next potential resistance level is the short term downtrend line from Jan 14th near 1335, another 6 points higher.

Jeff Bailey : 1/23/2008 3:26:12 PM

Tuesday morning, VIX was right here. Then edge higher.

Monitor for SIMILARITY or DIVERGENCE.

Jeff Bailey : 1/23/2008 3:25:26 PM

VIX.X alert! 30.02 -3.19% ... undercuts WKLY R1 (30.06)

Linda Piazza : 1/23/2008 3:24:59 PM

The RUT has broken above yesterday's high. It is also currently already testing the Keltner resistance at 683.50, the same resistance that's analogous to the SPX's 1327.86 Keltner resistance on 15-minute closes.

Jeff Bailey : 1/23/2008 3:21:41 PM

United Tech (UTX) $69.63 +3.42% ... good read.

Linda Piazza : 1/23/2008 3:21:53 PM

If the SPX drops heavily, bulls want the top trendline of that broadening formation to hold as support on 30-minute closes. That top trendline is now around 1305-1306.

Linda Piazza : 1/23/2008 3:19:36 PM

Careful here. Just as everyone was watching yesterday's low, everyone will be watching yesterday's 1322.09 high, too. The weekly 200-ema and the Keltner resistance from 1325.64-1327.53 loom just ahead, too. It wouldn't surprise me to see yesterday's high breached, but then for the SPX to slam into the Keltner resistance and pull back a bit, perhaps below or to 1321. You've had plenty of time to plan how you would treat a test of this zone, so now you know what you want to do here--be glad it got that high and stay in, take some of your risk off the table if your heart has been palpitating for three days straight, or some combination.

Jeff Bailey : 1/23/2008 3:19:14 PM

WB +13% ...

Jeff Bailey : 1/23/2008 3:18:40 PM

MBI +26% , ABK +48.8%, MTG -14% ... that darned Fed!

Jeff Bailey : 1/23/2008 3:17:03 PM

03:00 Internals found at this Link

Keene Little : 1/23/2008 3:16:20 PM

If this is to be wave-c of an a-b-c bounce, SPX will achieve 162% of wave-a at 1321.85 so watch what happens around that level.

Keene Little : 1/23/2008 3:15:19 PM

SPX 1320 will be an important resistance area that the bulls will need to conquer (tagging as I type). From an EW perspective, this rally leg could be the completion of a correction to the decline (wave c of an a-b-c bounce off yesterday morning's low) so continue to exercise caution and take profits when offered. We'll have plenty of time to see if the rally turns more impulsive after the next pullback.

Linda Piazza : 1/23/2008 3:14:04 PM

Absolutely nothing I said in my 3:10:54 post should be construed as telling you to hold on and hope there's a bounce if markets should roll over and your stops should be hit. We have these tentative signs that I've been pointing out today, but they've set up across the whole last week, and look what's happened while they were setting up. You can't pit tentative signs of improvement against a real rollover and the massive losses that might occur if you don't manage your trades.

Keene Little : 1/23/2008 3:12:52 PM

Have to admire the rally off this afternoon's low. Short covering could help feed the fire now.

Linda Piazza : 1/23/2008 3:10:54 PM

The SPX is pushing above the top trendline of that descending broadening formation in which it has been trading for many days. As I noted when I first pointed it out several days ago, such formations are indicative of emotion-based trading, and such emotion-based trading can perhaps be a sign of a short-term bottoming attempt. However, as I also noted today, we will need to see at least a 30-minute close above that trendline, now at about 1305-1306, before we consider this anything other than an attempt to pierce it with the outcome of that attempt as yet unknown. If you'd like to see a chart of that formation, I linked one to my 2:01:52 post.

If the SPX clears this and you're trying to make decisions about when to remove risk or watch for rollover attempts, remember that potential resistance at 1325-1329 on the Keltner channels. In addition, the weekly 200-ema is at 1321.21, and I would presume that to be potentially strong resistance since yesterday's high was only a little above that.

Jane Fox : 1/23/2008 3:10:13 PM

DOW is now trading above 12000 and it is looking like we have a good chance of a close above 12000 today.

Linda Piazza : 1/23/2008 3:00:40 PM

The TRAN is still leading the way, attempting a bounce now toward a new day's high, but not there yet. So far, the bull flag's former resistance has held as support, and the TRAN has a tentative upside Keltner target of 4415.94, maintained as long as the TRAN maintains 15-minute closes above about 4308. The TRAN is at 4327.76 as I type.

Linda Piazza : 1/23/2008 2:58:16 PM

Obviously, the SPX 1299 level did not hold as support on five-minute closes. Next support on the five-minute chart is near 1293.00. This drop is still not too dramatic if it ends here. Rolling up to the 15-minute chart, I see that the 15-minute 9-ema is at about 1294.70, so you want continued 15-minute closes above that as the next level of support.

I mentioned that trendline level as potentially strong resistance earlier today and then warned that there might be some increased back and forth as it was tested. That's normal and natural, but if you're hoping for a steadying in the markets, you just don't want it to get too pronounced. This market is still weak and jittery and anything can happen. The rise at least to a trendline test was a good thing to see for those hoping for a steadying, but now we have to see the outcome. So far, it's okay. Much deeper a drop and it might not be.

Linda Piazza : 1/23/2008 2:47:27 PM

SPX bulls would prefer that the 1299 level hold as support on 5-minute closes.

Linda Piazza : 1/23/2008 2:44:52 PM

As I suspected it would, the SPX is spending some time chopping around just underneath that top trendline for its broadening formation. So far, it's finding support on five-minute closes at Keltner support now at 1301.45, but I suspect that it may need to drop to the 9-ema, now at about 1300, or maybe deeper support near 1299, before charging higher. The SPX did begin dropping a bit as I typed.

Keene Little : 1/23/2008 2:42:31 PM

The little tiny pullbacks and then spurt higher, tiny pullback, spurt higher, is the sign of accumulation. The hard part is knowing whether the accumulation is real or from a helping hand. First thing for the market to do is break resistance at yesterday's high. Until that happens we could stay trapped in a trading range (albeit a wide one here) for another day or so.

Keene Little : 1/23/2008 2:38:56 PM

SPX back up for a test of this morning's high. Are we in for a repeat performance like yesterday where it consolidated at the high before dropping back down. We may still be getting a helping hand from the PPT in this market. They know it's weak and vulnerable to breaking down.

Linda Piazza : 1/23/2008 2:35:52 PM

The SPX has been holding the five-minute 9-ema as support on five-minute closes and the five-minute 9-ema is still climbing, so that's good. Now, though, the SPX is testing that trendline that marks the top of the broadening formation in which the SPX has been moving, so I would expect some testing up and down to occur here. Now the five-minute 9-ema approaching 1299, with higher support at 1302. Bulls would like to see the 1302 support hold but it wouldn't be a terrible or particularly unexpected thing to see the SPX drop further, as long as the 1299-ish support holds on five-minute closes.

Jeff Bailey : 1/23/2008 2:32:45 PM

Good Gravy! DJUSHB 326.25 +8.83% ... looks brea-even for 2008.

Jane Fox : 1/23/2008 2:32:34 PM

Yesterday the DOW closed at 11971 so a close above 12000 would be the first step the bulls need to take for the rally I am expecting to take place. Link

Jeff Bailey : 1/23/2008 2:31:57 PM

BIX.X 264.77 +7.92% ... best levels of session, week and mmmmmo... not yet.

Linda Piazza : 1/23/2008 2:18:14 PM

The TRAN has now broken out above its potential bull flag, which I guess is now a confirmed bull flag. The TRAN is near its high of the day, but now that flag's former resistance, at about 4307.06, needs to hold on pullbacks. The TRAN is at 4323.64 as I type.

Jeff Bailey : 1/23/2008 2:16:38 PM

Kohls (KSS) $43.85 +2.26% ... didn't just "give up"

Jeff Bailey : 1/23/2008 2:15:58 PM

Swing trade put exit alert! ... for the one (1) United Technologies UTX May $70 Put (UTX-QN) at the bid of $5.40.

UTX $68.21 +1.44% ... making a comeback here. This broader market bounce may have some legs next several days.

Linda Piazza : 1/23/2008 2:13:34 PM

The SPX just hit potentially significant resistance on the 5-minute Keltner chart, with that resistance marking the benchmark between the bullish and bearish half of the Keltner charts. The 9-ema is now at about 1292, so bulls would like to see any pullbacks find support at that moving average. SPX at 1295.95.

Linda Piazza : 1/23/2008 2:07:35 PM

The TRAN is currently testing the top of its bull-flag type consolidation after hitting the day's high. The top of that flag is now at about 4308, with the TRAN at 4298.98 as I type. To confirm a bull-flag breakout, the TRAN would then need to clear this morning's high of 4314.35.

Linda Piazza : 1/23/2008 2:05:33 PM

The SPX has now cleared the five-minute 45-ema. It's coming right back to test it and the 9-ema, which has converged with the other average. They're at about 1288-1288.90, so you want that support to hold on five-minute closes to keep the 9-ema rising. The SPX is at 1290.01 as I type. Potential resistance is at 1294.91 and then at 1298.80 and 1301 on five-minute closes.

Keene Little : 1/23/2008 2:04:17 PM

Want a really long term outlook from an EW perspective? This DOW monthly chart shows how it could look for the next bear market leg down for the DOW, with a final low in 2010. I'm assuming for this that we're going to get wave-C down to complete an A-B-C correction from the 2000 high. The newer high in 2007 is part of the correction and not the end of the bull market. The bull market ended in 2000 (arguably in 1999). Link

The downside projection to 6832 is based on a very common Fib relationship between waves A and C (C = 162% of A in the kind of expanded flat correction we're in the middle of). Each of the coming 5 waves for wave-C are shown in a tight down-channel. So that's the bad news (potentially) for the next two years.

There could still be some more selling in front of us, as per the dark red count on this daily chart: Link , and the longer term and shorter term patterns and Fibs point to DOW 10200-10400 as the downside target in April. That would complete wave 1 down that's shown on the monthly chart. From there we would get a strong wave-2 bounce into early September, up to the broken uptrend line from October 2002 which will be near 12680 by then (and a 62% retracement). From there it would be some painful times for the market (wave 3 down into early 2009).

Obviously this is speculation on my part but it would fit a bear market pattern if that's what we're now into (which I believe we are).

Linda Piazza : 1/23/2008 2:01:52 PM

I've shown that broadening formation on the SPX's intraday charts several times now. Here's where the SPX is now in relationship to that formation: Link The formation was pierced yesterday morning, but the candle formed back inside the channel, so it's obviously 30-minute closes that we should be watching to determine whether the SPX has broken out to the upside, if there should be an attempted breakout. We should then be looking for 30-minute closes above 1310 as a sign that the channel's resistance has been broken, for whatever that might be worth. The SPX would then need to clear yesterday's 1322.09 high of the day.

Keene Little : 1/23/2008 1:59:56 PM

The DOW, SPX and RUT look somewhat similar today and they're trying to bounce back up off slightly lower lows. We definitely have traders picking a bottom. The techs are still very weak. The rally looks choppy and I suspect it will not hold. Look for another run back down.

The downside pattern over the past two days is starting to take on an descending wedge appearance and one or two more new lows could finish the pattern. So instead of a sideways consolidation followed by a new low (before a bigger bounce) we could be finishing the new low in a choppy descending wedge pattern.

Regardless, don't hang onto longs if you're playing these intraday swings, not yet anyway.

Jane Fox : 1/23/2008 1:58:55 PM

TKS Linda - YM is trading well today.

Linda Piazza : 1/23/2008 1:55:56 PM

Congrats on your trade, Jane.

Linda Piazza : 1/23/2008 1:54:11 PM

Okay, I know some of you are in SPX bull put spreads that have been violated and you're wondering about what's going to be happening. I'm going to set up some what-if scenarios for an instance if the SPX continues climbing, based on my 15-minute Keltner charts. Maybe it will help or not as you try to make decisions.

I see potentially strong resistance currently at 1300-1301 on 15-minute closes. This is joined by the descending top resistance line of the broadening formation on the SPX's intraday charts, forming for several days now, with that currently crossing at about 1310. You already knew there'd likely be round-number resistance and these Keltner numbers and the trendline corroborate that. So, if you want the SPX to swing above 1300 and stay there for long enough to give you at least a little breathing room, you want the SPX to begin forming 15-minute closes above the 15-minute 45-ema at 1300-1301 first. That sets a potential upside target that's now at 1329 but is still descending. The SPX has to clear that trendline at 1310 first on its way, though, and that might be tough.

So, 1300 is obviously a tough level, 1310 may be, and you can begin deciding now what you'll do if the SPX should bounce up toward 1325-1330 because it may find resistance at that level. Will you automatically exit those spreads at that level, step out of some at that level, or stay in as long as some predetermined level holds as support on pullbacks? I'm sure Mike will have some ideas, and I'm not setting myself up in competition with Mike. As I've explained many, many times, I took a big hit last summer when I was experimenting with different exit strategies and one failed miserably, so I'm not setting myself up as an expert. Instead, I'm showing what I see, suggesting where you might have decision points.

Jane Fox : 1/23/2008 1:49:06 PM

Jane, could you please explain how you see a YM short this morning at 11884 and how you arrive at the target? Thanks

I was reading the OB/OS oscillator and see that it was overbought so after a little confirmation that the trend had changed wanted to get short.

I also use some proprietary indicators that tell me when to enter and when to get out.

Jane Fox : 1/23/2008 1:44:23 PM

That long eventually went to full target but we got out early because the trade was against the trend and didn't take all the heat when it retraced to 11740.

Linda Piazza : 1/23/2008 1:43:49 PM

Rolling back to the five-minute chart for the first-signs look, I see that the SPX has just tested and stalled at the same resistance that stopped it at about 11:30 this morning. This time, however, the SPX has climbed fast enough and hard enough that it's turned the five-minute 9-ema higher, which is a tentatively good sign. Therefore, on any pullbacks fro the 1228.60 resistance on five-minute closes, you want 1284.86 to hold as support, to keep alive the possibility that the SPX will keep hammering at the overhead resistance.

Jeff Bailey : 1/23/2008 1:55:10 PM

Valero Energy (VLO) $49.33 -6.94% ... WEEKLY Interval bar chart at this Link

Looking for stockpiles of CRUDE OIL to BUILD. Refined products to STEADY, or DRAW as refiners "shut down" for switch-over.

Linda Piazza : 1/23/2008 1:34:55 PM

The SPX just closed a first 15-minute period above its 9-ema today. It also closed that 15-minute period above the descending trendline off the previous swing highs on today's intraday chart. However, the SPX has come right back down to test that trendline and is currently below the 9-ema, which is now at 1283.82. That last 15-minute close was tentatively an improvement, but support at 1279.21 needs to be held on 15-minute closes for us to truly believe that.

Jeff Bailey : 1/23/2008 1:32:53 PM

Last night's Feb Crude Oil (now expired) and Feb Unleaded's measure was 25.382.

March's Crude Oil and March Unleaded was 25.954.

Jeff Bailey : 1/23/2008 1:30:54 PM

$GASO:$WTIC ... 0.40-box chart Link ... last night's measure was 25.95.

Jeff Bailey : 1/23/2008 1:28:41 PM

Target for the VLO-FK is $62.50 in the underlying.

Jane Fox : 1/23/2008 1:28:15 PM

Don't you just love the trades that move so quickly?

Jane Fox : 1/23/2008 1:27:20 PM

Cinch up that stop. Almost. I would be taking profits here.

Linda Piazza : 1/23/2008 1:26:45 PM

The SPX's 15-minute 9-ema is also right here, at about 1284.10. The SPX had not been able to produce a single 15-minute close above that moving average all day, so a 15-minute close above it will be a change, if it happens. However, for now, consider this potential resistance on a 15-minute close.

Jane Fox : 1/23/2008 1:26:30 PM

Ah heck let's book some profit here so raise the stop to 11764.

Jane Fox : 1/23/2008 1:25:46 PM

High of 11800 so raise the stop to at least breakeven.

Jane Fox : 1/23/2008 1:25:26 PM

11800 may be a problem as well.

Jane Fox : 1/23/2008 1:24:37 PM

Remember this is a trade against the trend so if it comes close to your profit don't hold out for full profit.

Jane Fox : 1/23/2008 1:23:38 PM

I am now long YM at 11761 with my target at 11813. Raise the stop to 11719.

Jeff Bailey : 1/23/2008 1:22:34 PM

Swing trade call option alert! ... for one (1) of the Valero Energy VLO Jun $55 Calls (VLO-FK) at the offer of $3.50.

VLO $48.79 -7.92% ...

Linda Piazza : 1/23/2008 1:22:09 PM

A descending trendline off the SPX's swing highs today (five-minute chart) is now at about 1283.87. I'd wait until there was at least a five-minute close above that before I even began to believe it had been cleared to the upside. SPX at 1280.91 as I type. For now, watch for potential resistance at that short-term trendline.

Keene Little : 1/23/2008 1:14:39 PM

GOOG didn't bounce off support near 555 and now that level will likely turn into resistance if it manages to bounce from here. Stair stepping lower looks to be in its near term future as well. Link

Jeff Bailey : 1/23/2008 1:14:06 PM

Kohls (KSS) $42.71 -0.44% ... slips red.

Jane Fox : 1/23/2008 1:13:09 PM

The last swing high was at 11757 and I have a long at 11761.

Jeff Bailey : 1/23/2008 1:12:19 PM

01:00 Internals found at this Link

Jane Fox : 1/23/2008 1:11:28 PM

Internals are bearish so keep that in mind if you decide to take the long I have profiled. Link

Linda Piazza : 1/23/2008 1:08:44 PM

The SPX did close that 15-minute period above the Keltner support that is now at 1273.16, but another important test is going on now, a resistance test. On the 5-minute chart, there was another test of the 5-minute 9-ema; another close at that moving average rather than above it. It's now at about 1279.80, with the SPX at 1280.33 as I type. Near-term 5-minute support is now at about 1274.40.

Jane Fox : 1/23/2008 1:08:09 PM

I see a YM long at 11761 with a stop at 11709. This is a risk of 52 ticks so $260. Stop will be be 1:1 ratio to risk so at 11813.

Jeff Bailey : 1/23/2008 1:05:04 PM

Buy Program Premium SPY $128.12

Tab Gilles : 1/23/2008 12:59:15 PM

Apple (AAPL) $126.95 -$28.70 (-18.44%) intraday low $126.14

Fibonacci Retracements

Low April 14, 2003 $6.36

High December 24, 2007 $202.96

38.2% = $127.94 / 50% = $104.76 / 61.8% = $81.58

Tab Gilles : 1/23/2008 12:56:00 PM

SPX 1,270.05 low @ 12:46PM

Linda Piazza : 1/23/2008 12:55:25 PM

The RUT did not drop to a low below yesterday's.

Linda Piazza : 1/23/2008 12:53:50 PM

On the 15-minute Keltner chart, potential support is currently at 1274.21 on 15-minute closes.

Keene Little : 1/23/2008 12:50:34 PM

SPX has now dropped below yesterday's spike low. So much for the benefit of the Fed rate cut (again). But ES has not made it down to the overnight low of 1255.50 on Monday night, nor this morning's pre-market low at 1261. At 1274 ES has a ways to go to test either one of those levels.

Linda Piazza : 1/23/2008 12:48:20 PM

I said there was "no evidence" yet in my 12:43:57 post, but I have to amend that. There are some tentative "looks better this test" signs. The advdec line isn't nearly as negative as it was on the two previous tests of this zone. On a 15-minute Keltner chart, there's tentative Keltner-style bullish divergence, having to do with which channels are being tested and which are holding. However, those signs are just signs that tell us to be aware and be making a plan in case the support holds and there's a bounce. They're certainly not a promise of it. We can have crashes with bullish divergences setting up the whole way down. And the SPX is dropping further as I type. Watch the 1265-1267 level for potential support.

Linda Piazza : 1/23/2008 12:43:57 PM

Triple bottom anyone? I'll take it, if it happens. No evidence supporting it yet, of course.

Linda Piazza : 1/23/2008 12:42:31 PM

Factor in an SPX potential downside target at 1265.73 now if the SPX doesn't maintain 15-minute support at 1275.18. That's combining the evidence of the 5- and 15-minute charts.

Tab Gilles : 1/23/2008 12:42:24 PM

SPX Watch that 1274.29 level again!

Jane Fox : 1/23/2008 12:42:23 PM

Techs have not only broken their previous day lows but their overnight lows as well. Link

Jeff Bailey : 1/23/2008 12:39:55 PM

VIX's DAILY R1 at 35.10, then R2 at 39.17.

Jane Fox : 1/23/2008 12:39:19 PM

Glad we didn't get long YM.

Keene Little : 1/23/2008 12:39:11 PM

There's a mixed picture when I look at the decline from this morning's high. The techs look impulsive to the downside but the DOW hs overlapping highs and lows and makes it look corrective. Either the DOW is getting ready to acclerate lower or else it will stay trapped between yesterday's high and low and start another trip back up to test the high. Other than taking some quick stabs at the long side at support and the short side against resistance, there's not much to go on here.

Jeff Bailey : 1/23/2008 12:38:54 PM

Sell Program Premium ... SPY $128.08

Jeff Bailey : 1/23/2008 12:38:01 PM

On the offer alert! (again) ... with one (1) of the Stillwater Mining SWC April $10 Puts (SWC-PB) $2.55 x $2.80.

SWC $7.62 -4.86% ...

Linda Piazza : 1/23/2008 12:36:23 PM

Potential 5-minute Keltner support for the OEX has now descended to 1280.37.

Jeff Bailey : 1/23/2008 12:35:30 PM

TRIN 1.32

Jeff Bailey : 1/23/2008 12:34:42 PM

SPY $128.40

Jeff Bailey : 1/23/2008 12:34:24 PM

VIX.X alert! ... 32.93 +6.17% ...

Jane Fox : 1/23/2008 12:29:26 PM

I see a YM long at 11842 stop will be 11778 and target 1:1 ratio to risk.

Linda Piazza : 1/23/2008 12:25:29 PM

First five-minute close above the five-minute 9-ema since about 11:30 am ET. This is just a first tentative sign on an "early warning" five-minute chart, so nothing upon which to base long-term conclusions. Early warnings are sometimes false warnings. Nevertheless, it's something that's needed if the tenor is to improve. Next is needed continued five-minute closes above the 9-ema, now at 1287.59 and then a sustained breakout above 1295, next resistance on that five-minute chart. The SPX is at 1288.22 as I type.

Jeff Bailey : 1/23/2008 12:20:34 PM

Buy Program Premium SPY $128.76 ...

Linda Piazza : 1/23/2008 12:16:19 PM

The SPX's five-minute Keltner chart suggests that if the SPX can't hold onto five-minute closes near 1281, it sets a potential downside target of 1267.79. Those lines are dynamic and will change a little or a lot as price moves. So, those hoping for a steadying want that support to hold on five-minute closes, as it appears to be as I type, but then they want sustained five-minute closes above the five-ema now at 1286.81. I've moved back to the five-minute chart because, again, it will give us the first tentative signs of a change in tenor. I'll switch back to the 15-minute one if I see any of those changes. The SPX is at 1284.68 as I type.

Jeff Bailey : 1/23/2008 12:14:08 PM

VIX 32.85 +5.93% ... comes to WEEKLY R2 (32.93)

Jeff Bailey : 1/23/2008 12:13:02 PM

Sell Program Premium ... SPY $128.15

Linda Piazza : 1/23/2008 12:08:26 PM

Some crude-related components are also hitting the SPX today. XOM is currently down about 4.3 percent, for example.

Linda Piazza : 1/23/2008 11:57:09 AM

Not good and not fun. On a Keltner basis, especially on the five-minute chart, the SPX continues to look okay. Just okay. However, it absolutely has to make strong-enough and sustained-enough gains that it turns channels higher again or it will just continue sliding down those channels while ostensibly holding onto support on five- or fifteen-minute closes. If it gets too low, prices may just collapse.

I'm puzzled, too, by the relative outperformance of the TRAN and the advdec line. Both have zoomed up into the upper and "bullish" half of their 15-minute Keltner charts. The TRAN has been pulling back, but its pullback is in the shape of a possible bull flag, so it's not too worrisome yet. The USDJPY is still very weak, though it's off its day's low.

Price action warns bulls to be careful of vulnerability to more downturns; TRAN and advdec line Keltner performance warn bears to be careful of bounce potential. Which shall we believe?

Linda Piazza : 1/23/2008 11:45:26 AM

It looks as if the SPX may again close this period above the Keltner support that's now at 1287.28. That support slopes lower, but it's been holding on 15-minute closes over the last hour and a half. The resistance at the 9-ema, now at 1295.77 has also been holding on 15-minute closes during that period.

Keene Little : 1/23/2008 11:41:49 AM

The techs continue to get hammered, making new lows again. Even though the others are holding up better, the tech selloff (NDX is down 4.4%) sets a bearish tone for the broader market. If the techs can find a bottom (watching for bullish divergences) then that could help lift the market back up but I continue to think the broader averages will consolidate sideways for another day or so.

Jeff Bailey : 1/23/2008 11:39:23 AM

SPY $128.51 -1.69% ... sets up for backtest of WKLY S1 ($128.24).

Jeff Bailey : 1/23/2008 11:36:32 AM

SOUTHWEST 4Q NET SOARS 95%, TO OFFER INTERNET

DJ- Low-cost airline's earnings jump to $111 million, or 15c a share, helped by fuel hedges. Excluding those, earnings are 12c a share. Revenue rises 9.5% to $2.49 billion. Wall Street expected EPS of 10c. Carrier also will test in-flight Internet.

Linda Piazza : 1/23/2008 11:32:03 AM

Short-term support for the SPX sinks to 1287.70 on 15-minute closes. Resistance is still at the descending 9-ema, now at 1296.34 on 15-minute closes.

Linda Piazza : 1/23/2008 11:15:20 AM

The advdec line is consolidating near its day's high after breaking above resistance that had been in the -820 zone. Those wanting markets to steady or bounce want it to find support on 15-minute closes at its 9-ema, now at -577 but still rising. Keep a watch on these volume patterns as they sometimes lead prices. I know that Jane is letting you know what's going on with them. It looks as if next strong resistance is in the +52 to -48 zone. The advdec line is now at -350.

Jeff Bailey : 1/23/2008 11:13:35 AM

11:00 Internals at this Link

Linda Piazza : 1/23/2008 11:12:03 AM

Sideways. Over the last hour, the SPX has found resistance on 15-minute closes at its 9-ema and support at the outer Keltner channel line. Those are now at 1298.35 and 1289.35, respectively. The SPX is at 1294.21 as I type. It needs to clear that 15-minute 9-ema on 15-minute closes or it remains more vulnerable to support tests.

Keene Little : 1/23/2008 11:09:01 AM

A quick spike down was followed by a quick bounce back up and then a pullback from resistance. This has been followed by a little tighter consolidation which looks corrective and should head lower again.

Tab Gilles : 1/23/2008 11:00:32 AM

Cerner (CERN) $53.56 +$1.96 +3.80% The healthcare information technology solutions company traded as high as $54.20 today...didn't see any news.

Linda Piazza : 1/23/2008 10:59:55 AM

The TRAN zoomed today, meeting an upside target on its five-minute chart, at least. That upside target is 4309.51 on five-minute closes. The TRAN consolidates now, and may be in the process of forming a flag-like pullback. The TRAN has an absolute dam of intraday highs forming over the last two or three weeks at 4317-1421, so a breakout above that congestion zone might be considered bullish. Its high today has been 4314.59, so it's still mired in that congestion zone, no matter how strong its performance today.

Jeff Bailey : 1/23/2008 10:54:50 AM

10:50 AM Market Watch found at this Link

Linda Piazza : 1/23/2008 10:51:15 AM

In my 10:34:51 post, I suggested that subscribers factor in SPX vulnerability to a 1292 test, based on the Keltner setup I was seeing. That test did occur, with the SPX actually dipping further, to 1291.43. The Keltner support level sank as the SPX prices did. It's now at 1290.45, still sliding down slightly, and that's not what SPX bulls want to see. They want to see all potential support lines turning up. The first task that's needed is 15-minute closes above the 15-minute 9-ema, currently at 1298.69, and then they want those to be sustained. Right now, another slide down to test 1290-ish support can't be ruled out.

Jane Fox : 1/23/2008 10:44:54 AM

Ok now that trade is to full profit but I would have taken my profits before this and not waited for the extra 6 ticks.

Jeff Bailey : 1/23/2008 10:43:45 AM

Reminder: EIA's Weekly Inventory data delayed until tomorrow due to Martin Luther King Jr. Day on Monday.

Jeff Bailey : 1/23/2008 10:42:49 AM

MBA's Weekly Application Survey at this Link

Jeff Bailey : 1/23/2008 10:41:29 AM

US CHAIN STORE SALES MIXED, FUTURE GRIM

DJ- U.S. consumers are feeling the pinch of a slowing economy, with Redbook's latest indicator of retail sales unexpectedly dropping 0.2%. ICSC index shows gain, but firm warns 'consumers are worrying more' and cuts its sales outlook.

RLX.X 398.30 +1.00% ...

Tab Gilles : 1/23/2008 10:41:18 AM

"Washington Whispers" just mentioned on CNBC has Bernanke's personal comments on the economy. Link

Jane Fox : 1/23/2008 10:41:10 AM

But in any case if you got that trade make sure you are take profits here.

Jane Fox : 1/23/2008 10:40:48 AM

Not quite to target 11941 - 11884 = 57. 11884 - 57 11827 so this trade is not quite to target. Low so far is 11833.

Jeff Bailey : 1/23/2008 10:40:35 AM

PFIZER 4Q NET DROPS 70% ON YEAR-AGO GAINS

DJ- Drug maker posts net of $2.88 billion, or 42c a share. Excluding items, earnings are 52c a share. Revenue rises 4% to $13.07 billion. Wall Street expected EPS of 47c. Firm raises low end of 2008 view and boosts revenue estimate.

PFE $22.36 +0.58% ...

Jeff Bailey : 1/23/2008 10:39:43 AM

CONOCOPHILLIPS NET RISES 42% ON HIGH PRICES

DJ- Energy company's 4Q earnings climb to $4.37 billion, or $2.71 a share, helped by growth in its exploration and production unit and its investment in Lukoil. Revenue rises 27% to $52.7 billion.

COP $69.72 -2.05% ...

Jane Fox : 1/23/2008 10:37:18 AM

Ah gee all the way to target. I am so sorry I did not set that up sooner.

Jane Fox : 1/23/2008 10:36:11 AM

Sorry I missed getting you into that setup - it was a nice one.

Jane Fox : 1/23/2008 10:35:01 AM

HMM may have missed that one but if you did get it the stop will be 11941 and profit at the 1:1 risk to reward ratio.

Jeff Bailey : 1/23/2008 10:34:53 AM

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

CLOSED out the two (2) KSS-BJ at $0.60 as KSS traded $45.00.

Linda Piazza : 1/23/2008 10:34:51 AM

The SPX ended that last 15-minute period just below its 15-minute 9-ema but only by a little amount. I don't think it's entirely lost that support, but the SPX does look more vulnerable to a pullback now to 1292 or so than it did earlier. That's not a probability yet as it's hovering near the 9-ema at 1301.40. It might just as easily rise up to test 1312.52 resistance. Factor in that possible support test, though.

Jane Fox : 1/23/2008 10:34:03 AM

I see a YM short at 11884.

Jeff Bailey : 1/23/2008 10:29:18 AM

MOTOROLA 4Q NET DROPS 84%, SEES 1Q LOSS

DJ- Shares fall 17% after mobile-phone maker posts net income of $100 million, or 4c a share, amid restructuring charges. Earnings from continuing operations are 5c a share. Company warns it will post a 1Q loss.

MOT $10.45 -15.09% ...

Keene Little : 1/23/2008 10:28:53 AM

It's interesting that the small caps are still holding up the best and techs the worst. The RUT held above yesterday's low while NDX broke lower and is still down significantly on the day. The AAPL news certainly hasn't inspired bullishness in the techs.

The banks (BIX) are up very strong (+6%) and testing the highs of the past week. But the bounce from yesterday's low is a 3-wave move so far and if they roll back over here it could be more proof that we'll get a sideways consolidation before heading lower again.

Jeff Bailey : 1/23/2008 10:27:51 AM

RATE CUTS SEEN HELPING HOUSING MARKET

DJ- The federal regulator of mortgage finance giants Fannie Mae and Freddie Mac says the Federal Reserve rate cut should help settle the troubled housing market but a regulatory overhaul of the two firms is still needed.

Jeff Bailey : 1/23/2008 10:27:09 AM

BANK OF CANADA CUTS RATES ON US WORRIES

DJ- Bank of Canada trims its benchmark overnight rate 25 basis points for the second consecutive time, bringing the overnight rate down to 4.00%, in the first back-to-back reduction since 2004. It says more reductions are likely needed in the 'near term.'

Jane Fox : 1/23/2008 10:26:06 AM

Russell 2000 futures are now testing overnight highs. Link

Linda Piazza : 1/23/2008 10:25:12 AM

The SPX's first test of its 15-minute 9-ema for the day is currently underway. The SPX pushed above that average, now at 1302.38 and is pulling back to retest it. Those hoping for further gains would like to see the SPX maintain 15-minute closes above that moving average. All day yesterday, the 45-ema was resistance on 15-minute closes, and it's at 1313.31.

Jeff Bailey : 1/23/2008 10:22:47 AM

Swing trade call filled/exit alert! ... for the two (2) Kohls KSS Feb $50 Calls (KSS-BJ) at the bid of $0.60.

Linda Piazza : 1/23/2008 10:21:57 AM

Sustained SPX values above 1322.09 will confirm the equal low on the SPX's intraday charts. That should get some bulls excited and some bears worried, but "sustained" should be considered a key word in that sentence. The SPX's weekly 200-ema is just below that level, so it could be tough resistance, and any break above it could be met with selling. We just have to see. For now, be aware of the potentially strong resistance in that level and plan accordingly.

Jeff Bailey : 1/23/2008 10:20:07 AM

At the offer alert! ... for the Kohls KSS Feb $50 Calls (KSS-BJ) $0.55 x $0.60 with KSS $44.98 +4.87% ...

Keene Little : 1/23/2008 10:18:36 AM

The strong bounce off this morning's low looks like it's getting some buying interest from those who believe yesterday's lows have been successfully tested. It could certainly be good for another bounce back up to yesterday's highs but we're in a trading environment here (with big swings) so trade it to the long side but don't hold on. I see lower lows out of the consolidation that appears to be setting up.

Jeff Bailey : 1/23/2008 10:18:25 AM

ABK $8.79 +10.91% ...

MBI $12.99 +3.67%

Jeff Bailey : 1/23/2008 10:17:41 AM

MGIC FALLS, SEES HIGHER LOSSES IN 2008

DJ- Shares fall 32% after mortgage insurer says that losses will be at least $500 million higher than previously expected in 2008 as the number and size of claims increase. It now sees paid losses at between $1.8 billion and $2 billion.

MTG $10.97 -31.65% ...

Linda Piazza : 1/23/2008 10:17:20 AM

SPX five-minute 9-ema is now at 1294.84. Potential resistance on five-minute closes is overhead at 1302.95. The SPX is at 1299.67 as I type.

Linda Piazza : 1/23/2008 10:08:57 AM

Keltner outlook on the advdec line: the advdec line stalled at the bottom of that resistance zone that I mentioned previously. That zone is now from -820 to -928. The advdec line is now at -1004. Equity bulls want 15-minute closes above -800 or at least to see -1350 support hold on pullbacks. Bears want a rollover toward -2000 again.

Linda Piazza : 1/23/2008 10:05:32 AM

The SPX has now cleared its five-minute 9-ema on a five-minute close. Support is now near 1292.50 on five-minute closes. Those hoping for a steadying or a bounce want to see that hold as support on future five-minute closes. Furthermore, they want to see gains that turn the 9-ema higher. SPX at 1294.08 as I type.

Jane Fox : 1/23/2008 10:02:30 AM

Here are the charts of the VIX and S&P futures. The VIX rules today. Link

Linda Piazza : 1/23/2008 10:02:12 AM

Of course, the TRAN doesn't have any financials, so its use as an indicator index for SPX, OEX and Dow trades isn't as reliable as it once was. However, it's still an index that reacts to both crude costs and the outlook on the economy, so it does have some usefulness, if not the same strong correspondence as it did.

Linda Piazza : 1/23/2008 10:00:30 AM

Strong gains on the TRAN. It's approaching yesterday's high of 4205.89 . . . just blew through it. The TRAN is at 4212.16 as I type. I use the TRAN as a kind of indicator index. You want it to be going the same direction as your SPX, OEX and Dow trade.

Linda Piazza : 1/23/2008 9:58:46 AM

Did TRIN really spike up to 6.22 this morning or was that a mistake on my charting system? I've got 1.16 as I type.

Jane Fox : 1/23/2008 9:58:13 AM

AD ratio is making new daily highs opposite to the AD volume. So the "only" bearish internals are the AD volume and AD line.

Linda Piazza : 1/23/2008 9:57:18 AM

Keltner outlook on the advdec line: The advdec line dropped close to, but not all the way to, it's Keltner target, then near -2100. Now it's risen to test first Keltner resistance in the -1300 region. Further and stronger resistance is at -820 to -930, so those hoping for the markets to steady would like to see 15-minute closes well above -820. I'm not sure it's going to happen without another support test, but we'll see. Advdec line now at -1395.

Keene Little : 1/23/2008 9:57:10 AM

GOOG has dropped lower and is now close to its uptrend line from March 2005 (near 555). It should be ready for a bounce and is a good place to try a long with a relatively tight stop just below support. Link

Jane Fox : 1/23/2008 9:56:39 AM

USDJPY and DAX are now making new daily highs supporting the bullish VIX.

Jeff Bailey : 1/23/2008 9:55:20 AM

BAC +2.32%, JPM +1.93%, AIG -1.71%, C +2.33%, WFC +3.3%, GS -0.29%, WB +4.19%

Jeff Bailey : 1/23/2008 9:54:26 AM

BIX.X 245.62 +0.11% ...

BKX.X 80.52 +1.74% ...

Jane Fox : 1/23/2008 9:53:51 AM

Here are your previous day ranges. Link

Jeff Bailey : 1/23/2008 9:53:36 AM

Big banks mixed to higher ...

Linda Piazza : 1/23/2008 9:53:15 AM

As I did yesterday under the same conditions, I'm switching to a five-minute Keltner chart now to watch SPX action since the first downdraft was so swift. The five-minute chart will give us the first indications of any improvement in tenor or any worsening, but remember that a five-minute chart is not particularly trustworthy, either. We're going to get false signals.

The five-minute support (and breakdown benchmark) is near 1267.70 on five-minute closes. The SPX's first resistance on a bounce is now at 1286.35 and then at 1292.40-1293.71 on five-minute closes. Those wanting the markets to steady obviously want first for that Keltner support to continue holding on five-minute closes and then for the SPX to break above that resistance, preferably the 1293.71 resistance and sustain values above that. The SPX is at 1282.98 as I type.

Jane Fox : 1/23/2008 9:52:36 AM

VIX continues to make new daily lows even though the AD line and volume are bearish. This is causing the push and pull you are seeing.

Jane Fox : 1/23/2008 9:51:20 AM

NDX has broken its previous day lows. Link

Jeff Bailey : 1/23/2008 9:50:09 AM

S&P 500 (SPX) 1,281.87 -2.18% ...

Jeff Bailey : 1/23/2008 9:49:45 AM

iShares Mexico Index Fund (EWW) $49.30 -2.43% ...

Keene Little : 1/23/2008 9:48:12 AM

It's often difficult to determine price direction based on the pattern in the futures just before the open but the bounce off this morning's pre-market low looks corrective and suggests we'll get another push lower.

Jeff Bailey : 1/23/2008 9:48:01 AM

Citi Upgrades Mexican Stocks To Overweight, Top Pick In LatAm

Linda Piazza : 1/23/2008 9:47:45 AM

If the SPX continues falling, I see potential support on the daily chart in the 1257-1260 zone. Actually, from the current 1279 area down to about 1225, the SPX will be moving through the congestion zone that the index was churning out for months last summer, so there's some hope the descent will be slowed through there. Yesterday and today, the SPX has been testing the top of that zone. One Keltner chart that I have does show a potential downside target near 1228 currently, but let's hope that's a target that isn't met or at least isn't met quickly. I know some of you need a bounce for your Feb SPX bull put spreads that are currently under water. I'm not in those spreads, but I am in others, lower down.

Jane Fox : 1/23/2008 9:46:30 AM

AD volume is making new daily lows but the AD ratio is not so those two pretty well negate one another.

Jane Fox : 1/23/2008 9:45:43 AM

AD line is falling now to -1801.

Jane Fox : 1/23/2008 9:45:08 AM

Markets are waiting for someone to blink first.

Linda Piazza : 1/23/2008 9:42:13 AM

I'm obviously, along with the whole world, waiting to see if yesterday's low will hold as support. More than that, though, I'm waiting to see how the first 15-minute period ends up. I personally (because I want our markets to steady) would like to see the SPX end this 15-minute period above 1284.67 (currently) and would love to see it end the 15-minute period above 1296. Doing so would show that potential Keltner support at those levels held, even though they were pierced. The SPX would look better on a short-term Keltner basis than it did yesterday when testing these levels. That would be small comfort, of course, but some comfort. So far, it's not happening.

Jane Fox : 1/23/2008 9:41:21 AM

Markets broke the overnight lows I posted earlier so here are the updated charts. Link

Linda Piazza : 1/23/2008 9:39:10 AM

Breathe. I know you're all holding your breath.

Linda Piazza : 1/23/2008 9:37:21 AM

Keltner outlook on the advdec (advance/decline) line: The advdec line isn't yet as low as it was yesterday. On the 15-minute chart, it's set a potential target at about -2000, however, with the advdec line now at -1717. Obviously, those hoping for a steadying the markets don't want that target to be hit.

Jane Fox : 1/23/2008 9:36:55 AM

However, VIX is testing daily lows so these two are not in sync.

Jane Fox : 1/23/2008 9:36:21 AM

OH oh AD line is a bearish -1616. This is not good for the bulls.

Linda Piazza : 1/23/2008 9:33:05 AM

Here we go. I don't know that short-term (or long-term, for that matter) support/resistance levels will matter at all today, but here they are: Potential support on 15-minute closes at SPX 1297 and then at 1285.70. The SPX is obviously well below that first level of potential support as I type, but the first 15-minute period has not ended yet. We'll have to see.

Keene Little : 1/23/2008 9:32:15 AM

With equity futures down hard there's no question we'll get at least a test of yesterday's low. Many have been expecting this and if the lows hold I suspect we'll get a strong rally off them. We could be in for a few days of some volatile and whippy price action as the market consolidates.

Linda Piazza : 1/23/2008 9:27:38 AM

This action this morning is the reason I kept warning all day yesterday that if you had too much risk on further declines, that you use the bounce to lessen some of that risk.

I actually have a different take on Jim's concerning yesterday's high volume, voiced in his Wrap last night. I truly respect Jim's judgment and have long been a fan of anything he has to say, but here's how I look at it, utilizing information from a book I've been studying over the last year. Huge volume says that big money was involved in what happened yesterday, right? You and I can't produce that big volume, can we, no matter how much we panic? And what was big money doing yesterday? What was the result of the effort of all that big-money involvement? That big bounce certainly makes it look as if some accumulation was going on. It had to be. If big money was doing all the dumping and we suckers out here were doing all the buying, we would have gotten swamped with the volume big money was dumping. It had to be going the other direction to some degree.

Does that mean that the bottom has been reached? No way you can conclude that. We can't even conclude a bottom has been reached, but we sure should conclude that over the short-term, we should be aware of the possibility. Big money can afford to start legging in well before the bottom, but you and I can't afford to do that. So, I'm not suggesting that you jump into a bunch of bullish trades or that you not honor stops on the ones you currently have. I am suggesting that you think about this before piling into a bunch of risk on the bearish side and prepare a what-if plan for your current bearish trades.

Jane Fox : 1/23/2008 9:25:50 AM

Thank you Linda. What a day to take off though.

Jeff Bailey : 1/23/2008 9:25:12 AM

United Technologies (UTX) ... Earnings Press Release Link

Consensus was for EPS of $1.06 on Revenue of $14.08B.

Next quarter consensus was for EPS of $0.99 on Revenue of $13.17B.

Linda Piazza : 1/23/2008 9:16:39 AM

As Jane may have already noted, the DAX has now dropped below yesterday's low. (Nice to have you back today, Jane.) As I type, the DAX is at 6439.94, back above yesterday's 6420 low and today's recent 6384.40 low. Now we've had the USDJPY and the DAX both dropping below yesterday's low, and that's not the example we wanted to see set. However, it must be noted that the Bank of Japan's decision Tuesday was to hold rates steady and the ECB's Trichet and others have repeatedly avowed their intention to stand firm watch against inflation in Europe over the last few days, so their examples, while offering warnings, may not be totally analogous to ours in the U.S., where are central bankers are considered more proactive currently.

Jane Fox : 1/23/2008 9:14:59 AM

Crude as very nicely told us its support is $86.00/bl and a close below that support would make this chart much more bearish. Link

Jane Fox : 1/23/2008 9:12:04 AM

I have a bet with a fellow who goes to my gym. The bet is that Gold would hit 850 before 1000 - we made the bet when Gold was around 918. Well yesterday Gold hit 855 so I will probably not be able to collect on my bet. Dang it!! Link

Jane Fox : 1/23/2008 9:07:48 AM

The doji the S&P made yesterday is an indication it had made a short term bottom and could rally back to at least 1400 and maybe even 1440. However, the overnight charts are telling me that rally may not be as strong as I suspected. Link

Jane Fox : 1/23/2008 9:02:41 AM

The overnight charts are not looking all that bullish I'm afraid. Around 3:30 ET the markets were making higher highs but then the sellers decided to come back to town and brought them all down to new overnight lows. Now it looks like those lows may not hold. I do not suspect yesterday's lows to break today but this action is telling me we may get a retest. Link

Linda Piazza : 1/23/2008 8:57:01 AM

Since my 8:02:06 post, futures rolled down even further. The USDJPY dropped below yesterday's low and the DAX dropped to a new day's low. As I type, however, today's 6436.78 low remains above yesterday's 6420 low. Barely. The DAX is at 6475.63 as I type.

Jane Fox : 1/23/2008 8:54:52 AM

CHICAGO (MarketWatch) -- The volume of mortgage applications filed last week rose a seasonally adjusted 8.3% compared to the prior week as mortgage interest rates continued their decline, the Mortgage Bankers Association reported on Wednesday.

Refinance applications drove the increase: Applications to line up new financing on an existing loan rose 16.9% during the week ended Jan. 18, compared with the previous week, according to the MBA's weekly survey.

"Refinance applications are up 92% since the beginning of November and purchase applications are up 7%," said Jay Brinkmann, the MBA's vice president of research and economics.

"With tighter credit conditions, we do not know how many of these applications will become loans, but it is clear that borrowers are responding to the 40- to 80-basis-point drop in rates we have seen since Nov. 2," he said in a news release.

Week-to-week applications for mortgages to purchase a home decreased a seasonally adjusted 4.6%, the MBA said.

Linda Piazza : 1/23/2008 8:02:06 AM

As I type, the USDJPY is at 105.66, retesting yesterday's low. Studying the Nikkei and DAX charts, I see that both opened higher last night, then dropped toward but not all the way to yesterday's lows, retesting them before beginning a laborious climb. The Nikkei ended 256.01 points or 2.04 percent higher, well above its opening level, but about 200 points off its high of the day. It's range was more than 400 points for the day. The DAX also gapped a little higher, but then tumbled, not yet hitting yesterday's low, though. Over the last hour, it's been climbing off its low of the day, but the bounce is far from inspiring yet. I'm noticing that the QQQQ's have also approached yesterday's early low in pre-market trading.

What does all this mean? Maybe nothing. Our markets certainly performed better yesterday than global markets had Monday and, for some, Tuesday, too. They performed better than the premarket futures' performance would have led us to expect. However, it is apparent in the USDJPY, the Nikkei, DAX and our own QQQQ's that there's susceptibility to a drive down toward yesterday's lows. Let's hope that, like the Nikkei last night, our markets bounce from higher lows if they are indeed driven lower this morning, as futures currently indicate they may be.

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