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Jim Brown : 2/5/2008 2:33:49 AM

Important Reader Survey - Alert As we head into 2008, we wanted to take a moment and invite you to participate in a short subscriber survey to help us better meet your needs.

As I'm sure you can appreciate, we have a wide range of traders and investors that trade a variety of stocks, options and futures across various time horizons. What's more, the market has introduced and expanded the use of ETFs and emini futures contracts. We felt it was time to take a quick snap shot of your investment and trading styles and get your thoughts and ideas in order to help us better tailor the content and focus of the Market Monitor.

Please click here: Link

Thank you in advance for your quick response to the attached survey. Your feedback is important to us.

Jeff Bailey : 2/5/2008 2:29:49 AM

March Palladium (pa08h) $425.00 -1.39% ... did indeed achieve that h/s bottom from my 1/25/08 MM 10:38:47 AM post Link

S. Africa news may be "factored in." If long, take some profits.

Jeff Bailey : 2/5/2008 1:49:48 AM

Right now, outside of the DXY, all I see is some "similarity" and I'm looking for DIVERGENCE to tip us off. It's the DXY closer to 19.1% that has my attention.

Jeff Bailey : 2/5/2008 1:47:34 AM

Another "gosh" chart is to simply take a conventional on the VIX.X from its 10/11/07 relative low (16.08) to recent 01/22/08 high (37.57). While the SPY/SPX hovers just under 38.2%, VIX.X tested 61.8% on Friday at 24.29.

Jeff Bailey : 2/5/2008 1:40:32 AM

Was looking backward at my Major Global Equity Benchmarks and will note this ...

In this evenings market wrap I noted the Low Close on the DXY of 11/26/07. Here's the Major Global Equity Benchmarks and it just so happened that 11/26/07 was a Monday. Link .

If this is an indicator that market participants are indeed monitoring dollar action closely, it might be worth noting the weakness INTO 11/26/07 and the strength out.

Jeff Bailey : 2/5/2008 1:19:00 AM

Major Global Equity Benchmarks, DXY and Major Currencies with Gold and $HUI.X table from 12/24/07 Closes Link

I wanted to try and investigate some of the DXY technicals, and the only currency that stands out of the major weighted is the dollar weak vs. yen so far this year.

We're "losing" some of the euro/US$ strength vs. Oil, but I still think that is tied with refinery switch-over.

Gold / $HUI.X just some confirmation to my postings.

Jeff Bailey : 2/5/2008 1:06:26 AM

Gosh ... even if I take a conventional from the iShares Japan (EWJ) $12.79 ... from its 10/05/07 relative high ($14.70) to recent lows from 01/23/08 of $11.60, its 38.2% is $12.78.

Keene Little : 2/5/2008 12:42:56 AM

Tuesday's pivot tables: Link and Link

Ideally we'll see a little more of a pullback first thing Tuesday morning and then another small rally leg that gives us a final high that we can short for a bigger ride down. Whether the ride down leads to just a pullback before heading higher (shown in pink on the 60-min charts below) or a much steeper decline (dark red) can't be known yet.

But first watch for a buying opportunity at the uptrend lines from Jan 23rd (DOW 12580, SPX 1369 and COMP 2370) and then I'll be watching for a choppy climb back up to new highs for the bounce off the January lows and a place to reverse short (maybe Wednesday for the short play if it works like I think it will).
DOW: Link
SPX: Link
COMP: Link

Even AAPL looks like it could use another small bounce after a minor pullback early Tuesday. Then the sideways triangle pattern should be complete and it says get shorty, hopefully around 135, for another ride down (downside target near 100 if it can get below its August low near 112): 60-min: Link daily: Link

I looked at two other high flyers that I've regularly posted, CME and GOOG and think CME should bounce to a new high before it's ready to roll back over (dark red): Link and GOOG looks like it should press a little lower before it bounces again but the EW count, Fibs and trend lines give me the impression that GOOG is going to continue stair-stepping lower (dark red): Link . I'll be watching for any change of pattern that suggests a different wave count on both CME and GOOG.

Jeff Bailey : 2/4/2008 11:10:11 PM

Bull Alert! ... At today's close, Dorsey/Wright and Associates' OTC Bullish % (BPOTC) reversed back up to "bull alert" status at 24.00% (24.59% actual).

StockCharts.com's equivalent is the NASDAQ Comp. Bullish % (BPCOMPQ) Link

Jeff Bailey : 2/4/2008 11:01:37 PM

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

OI Technical Staff : 2/4/2008 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 : 2/4/2008 6:56:56 PM

US Dollar Index (DXY) ... conventional and simple trend(s) with some past observations Link

Jeff Bailey : 2/4/2008 6:13:31 PM

I didn't know that ...

Powershares offers a US Dollar Index Bearish Fund UDN $28.06 +0.07%

as well as a US Dollar Index Bullish Fund UUP $23.49 -0.16%

Jeff Bailey : 2/4/2008 5:59:08 PM

Closing U.S. Market Watch found at this Link

Note: 5DyNet% is from 01/30/08 Close (5 calendar days); 20DyNet% is from 01/15/08 Close (20 calendar days); YrNet% is 52-weeks (365 calendar days)

Jeff Bailey : 2/4/2008 4:59:57 PM

Closing Internals found at this Link

Keene Little : 2/4/2008 4:52:13 PM

The COMP 60-min chart shows a much shallower rising wedge pattern (if that's what we have playing out) and a slight drop tomorrow morning that finds support around 2370 could be followed by another leg higher to a Fib projection near 2431 to finish the wedge pattern. It should then rollg back over for either a deeper pullback (pink) or the start of the next leg down (dark red). Link

Jeff Bailey : 2/4/2008 4:41:57 PM

Excellent debate on CNBC regarding political arena here in U.S. and may address the sharp selling witnessed in January.

Theme is that we may have seen, or continue to see selling among bulls during lower capital gains tax level.

Should temporary "Bush Tax Cuts" go away, or not be extended, then tax rate goes HIGHER. Democrats also hold majority in Congress. Presidential election later this year.

Jeff Bailey : 2/4/2008 4:20:10 PM

"In the long term, markets display the wisdom of crowds." - Barton Biggs

Jane Fox : 2/4/2008 4:19:30 PM

Economic Reports on the docket for tomorrow include:

Jeff Bailey : 2/4/2008 4:14:44 PM

Biiiig volume pickup at 04:00 to current in SPY $137.73 -1.32% ...

Keene Little : 2/4/2008 4:10:15 PM

The closing update on SPX shows a little more follow through to the downside tomorrow morning could have SPX testing support just below 1370 at its uptrend line. As long as that holds, and based on the corrective nature of today's price action I think we'll see another rally leg from there that pushes marginally higher above the November low at 1406, maybe even up to 1416 to close the gap left on Jan 15th. That leg higher would then complete the wave count inside the rising wedge. Link

Jeff Bailey : 2/4/2008 4:04:54 PM

Seeing 1.6 million blocked in the IYT at $85.23.

Jane Fox : 2/4/2008 3:58:38 PM

I subscribe to Bob Brinker's Marketimer and would like to relay some comments he made. Now this is a paid subscription so I will not give you all he says but one interesting point is, "in the past sixty years the stock market contains no bear markets during a presidential election year and only two corrections of more than 15%, this year is the 3rd."

Jeff Bailey : 2/4/2008 3:58:14 PM

iShares DJ Transportation (IYT) $84.76 -1.39% ... iShares Fact Sheet Link

Jane Fox : 2/4/2008 3:53:15 PM

You may be getting tired of my story but here it is again. I suspect SPX to find resistance at 1400 and make a retracement. Where that retracement ends will tell you a lot about how strong the bulls are in relation to the bears.

If SPX closes below yearly lows then the bears have control and I think we have entered a bear market. On the other hand, if SPX makes a higher low and is then able to break through 1400 I think the bulls have a good chance of breaking to new all time highs later in the year.

This of course will all take weeks to months to play out. Link

Linda Piazza : 2/4/2008 3:49:37 PM

SPX targets have set and unset all day, without meaning anything. It's time to decide if you want to hold overnight or not. I mentioned Friday that the decision should be made about the weekend knowing that the SPX hadn't put together more than two days of gains all year and if you stayed, you were betting on a break of that record. Barring some strong gains the rest of the day, that bet wouldn't have worked out. Currently, the SPX has erased most of Friday's gains. It's pulling back from beneath that 1395-1405 resistance, so it's a bit worrisome, isn't it?

What happens next? The nature of a bear flag climb is that the climb is choppy, it's difficult to predict how far the flag will climb and you don't know when or how suddenly the climb is going to end. My daily charts suggest that there's a possibility the SPX could rise into the 1401-1407 zone, but it could as easily drop down to 1370 immediately or trend sideways until the 10-sma climbs underneath the consolidation zone. In other words, there's just not a prediction to be found on any chart I'm studying. Make your decision about holding based on the profits you have in hand, how much of your account they represent, whether you hold February or March options, and the dozens of other factors that go into such decisions. If you have profits in hand and you took on too much risk when you decided on the number of contracts you'd buy and those are February contracts, I'd absolutely be considering taking at least part of those trades off the table and locking in some of the profit. Your risk is that the SPX could zoom tomorrow without your being fully invested in the climb, but the I'd rather miss part of my profit than take a bigger risk than I can afford.

Jeff Bailey : 2/4/2008 3:49:16 PM

Many of the commercial airliners have been WEAKER than the TRAN overall. Should be a bearish play based on "Bailey Wave" in TRAN.

Jeff Bailey : 2/4/2008 3:59:55 PM

Dow Transports (TRAN) with conventional from 10/05/07 relative high to recent lows. Show "Bailey Wave" Andrews Pitchfork (modified schiff). Note the steepness of first "Bailey" wave count (1,2,3) and then (2,3,4) not as steep. Link

Keene Little : 2/4/2008 3:34:55 PM

Overall I'd say today was a pretty ugly day for trading the indices--very choppy and about what I expected to see (inside a rising or descending wedge you get this kind of chop). Just playing with some Fib projections and trend lines I'm wondering if we'll see SPX pop back up to about 1388 before rolling back over to find support at the bottom of its wedge (the uptrend line from Jan 23rd) near 1374 by mid day tomorrow.

That's not a whole lot to play with if you're trying to trade, especially if it just chops sideways/down like today. There are times when it's just better to sit on your thumbs, go read, do some research, paper trade, anything but press buttons on your broker window.

Jeff Bailey : 2/4/2008 3:19:12 PM

03:00 Internals found at this Link

Jeff Bailey : 2/4/2008 3:07:48 PM

StreetTracks Gold (GLD) $89.06 -0.32% ... One technique I've tried to teach traders/investors over the years is when you see a security give alternating buy/sell signals, it could be that the scale is simply too noisy. With PnF charts we can "change the box size" and remove some noise.

Here's GLD on $1 box Link

Since trading the powerful triple top buy signal at $65 in Feb'06, this chart REFUSES to give a sell signal. One could say it has been a "bullllll market" for GLD since $65.00.

Keene Little : 2/4/2008 3:06:06 PM

Like the banks, the NYSE bounced up to the top of its parallel down-channel and if it rolls back over here (not a given yet) then daily MACD (fast setting) will roll back over below the zero line after rallying up to it. This will be an interesting setup because when MACD does this (return to the zero line without crossing it and then reversing), it's generally a strong reversal signal (back down in this case). This is true on all time frames that you're watching. Link

So for a little longer perspective, the bearish wave pattern points to a strong decline down to a Fib projection at 7235 where it would have two equal legs down from October. The interesting thing about that Fib projection is that it places the NYSE in the area of potential support by the 2005 prices and a 50% retracement of the 2002-2007 rally. That would not be the end of the bear market but it could set up a big bounce from there.

I continue to watch and listen for what could cause this kind of continued stock market decline and the best answer I can think of at the moment is that we'll hear some disappointing news about the inability to save the bond insurers from being downgraded by the ratings agencies and that could freak out the market. That is of course just speculation on my part but I like to visualize a scenario and then listen for "news" that could be the catalyst.

The weekly chart of NYSE shows the significance of the break of its uptrend line from March 2003 and where it's trying to bounce back up to. I do Not see the bounce off the January low as anything but a bear market rally. But we could still see a little more bounce to it before turning back down. Link

Jeff Bailey : 2/4/2008 3:01:35 PM

December'08 Gold (gc08z) 924.60 -0.47% ... session low so far has been $914.20, so we chart O to 916.00. Link

I note early month trades October, November, December, Jan'08 and Feb'08 for those that have reviews MM posting since.

Currently, BULLISH vertical count builds to $1,128, which would only be negated with a "sell signal." "Med" is mid-point of 10-week trading band.

Linda Piazza : 2/4/2008 2:51:32 PM

There's now a tentative downside target of about 1375.50 on the SPX, but I'm not sure that it's trustworthy as the decline has been so grudging today.

Linda Piazza : 2/4/2008 2:41:53 PM

If the SPX doesn't manage a bounce back above 1383.30 or so by the close of the current 15-minute period, it's set a potential downside target of 1375.24.

Jeff Bailey : 2/4/2008 2:33:55 PM

Email Question: ... Jeff: What are your thoughts when people say that gold is going to 2500.00 and platinum 5000.00? Oil 150.00

If things go that way and we own gold coins will there be a place to sell them and retrieve the money or will the gold coins be tradeable?

I value your opinion and trading thoughts and yes I am catching on as you asked me in the MM.

Regan

Jeff's Reply : The first thing I say is to look at a Point and Figure chart and check its bullish, or bearish vertical counts. Does what people say make sense? Does the MARKET place show any indications of such a belief?

Gold coin investors have been reported as to visiting and trading some of their coins for CASH at various store fronts that deal in such merchandise, so this would be an example of coins being traded "over-the-counter."

Keene Little : 2/4/2008 2:27:45 PM

The DOW is marginally stronger than SPX, having marginally broken above its November low and it could find support now at its August low (12518) if it pulls back a little further. But its uptrend line from Jan 23rd will be 12575 at tomorrow's open so that could provide higher support. Then another bounce back up (pink) could take it up near 13K but the rising wedge pattern says it might not make it quite that high: Link

I've moved the key level for the upside to 13K since I think that's the level that needs to break in order for the bulls to have a stronger pattern here. So far it continues to look like a corrective bounce off the January low that will either fail hard (dark red) or lead to a deeper pullback before rallying again (pink).

Jeff Bailey : 2/4/2008 2:15:58 PM

Petroleo Brasileiro (PBR) $114.48 +1.25% ... tense sessions ahead for PBR bears. A trade at $116 would generate a reversing high PnF buy signal. A triple top buy signal at that.

Keene Little : 2/4/2008 2:13:45 PM

Interestingly, on the SPX chart that I just posted the pink wave count shows the possibility that price will ricochet between the August and November lows before finally dropping back down. It could be a real bull vs. battle in this area and you'll want to be very careful about getting chewed up.

Jeff Bailey : 2/4/2008 2:10:06 PM

US Oil Fund (USO) $71.37 +1.27% ... edges back under WKLY Pivot $71.39.

Keene Little : 2/4/2008 2:08:46 PM

There's been very little change to the charts that I posted last night--this SPX 60-min chart still shows the possibility for a top but it needs a break below the uptrend line from Jan 22nd to give us the heads up for that (near 1367 at tomorrow's open) and a break below 1334 to confirm it. Link

In the meantime, the corrective price action suggests to me that the pink wave count, calling for a little further pullback to the uptrend line and then a final high to finish the bounce off the Jan 22nd low. From there I'll be watching for evidence of just a deeper pullback (pink) or the start of the next significant decline (dark red). It's too early for any big bets here--if you're trading this chop, trade light and trade it quickly.

Linda Piazza : 2/4/2008 2:06:38 PM

I can still find nothing decisive about next market direction. Don't fight it when you find yourself similarly stymied by puzzling setups. If I'd forced a trade today, for example, I'd have been sitting in that trade, my premium leaking away, while I saw alternating tentative bullish and tentative bearish signs with none of them meaning much.

Keene Little : 2/4/2008 1:58:44 PM

I continue to wonder about the possibility for a final high in gold. As I mentioned Friday, the wave pattern has me thinking we could be in a final ending diagonal 5th wave (rising wedge) and if true then the pattern needs one more new high to finish it. An upside target for YG (April) would be around 960-965 (which matches a Fib projection for the 5th wave from the December low). It takes a break below the last low at 855.10 to say a top is in. Link

Jeff Bailey : 2/4/2008 1:58:00 PM

DJUSHB 60-minute interval chart with your conventional and same "Bailey Wave". Turning on QCharts' WEEKLY Pivot Levels Link

Before I would begin to observe a corrective wave of bull wave, I would need to observe DJUSHB below mid-point and WKLY S1 tie.

Jeff Bailey : 2/4/2008 1:48:40 PM

DJ U.S. Home Construction (DJUSHB) 386.56 -5.87% ... QCharts' WKLY Pivot (386.31). Action somewhat similar to BIX.X from earlier this morning observation. Slipped under, then above.BIX.X eventually slid further below.

Keene Little : 2/4/2008 1:47:30 PM

If the banking index (BIX) finishes in the red today it will look like confirmation of the reversal candlestick pattern I had warned about on Friday. The top of its parallel down-channel has so far marked the resistance point and now there's a good chance we'll see either a deeper pullback before rallying higher and breaking its down-channel (green) or else drop to a new lows (dark red) where there should be good support near 212 (and a potentially very good buying opportunity for a trade that could last a few months at least). Link

But there's plenty of time to see if that will set up. In the meantime both the housing and banking sectors look to me like good shorting opportunities until they can prove they've broken their downtrends. Remember, the trend is your friend and so far I see an EW count that says we might not have seen the bottom in either index yet. Once the EW count looks complete to the downside, or shows a bullish count to the upside, then I'll be testing the long side.

Linda Piazza : 2/4/2008 1:37:12 PM

The SPX needs to sustain values above 1384.70, the 9-ema, on 15-minute closes or it risks being pushed down and setting new downside targets. So far, its downside target has been the Keltner line now at 1382.80 or perhaps one slightly lower, at just over 1381, so at levels now being tested. The SPX is at 1383.67 as I type and no new lower downside target is yet set on that chart. No upside target is, either, other than tests of the 9-ema.

Jeff Bailey : 2/4/2008 1:34:50 PM

5-year Yield ($FVX.X) up 2.7 bp at 2.772%. QCharts' weekly pivot at 2.806% has been YIELD resistance. Somewhat "defensive" action here.

5-year yield deemes "safer" than 10-year as 5-year is SHORTER-TERM than 10-year.

In times of "uncertainty," defensive capital tends to stick short-term.

Jeff Bailey : 2/4/2008 1:32:58 PM

10-year Yield ($TNX.X) tight session range. Still trying to hold ABOVE its WKLY Pivot. Currently up 3.7 bp at 3.637%.

Jeff Bailey : 2/4/2008 1:31:09 PM

QQQQ $45.04 -1.20% ... just probed WEEKLY Pivot.

BIX.X 280.45 -4.50% ... now further below its WEEKLY Pivot.

Jeff Bailey : 2/4/2008 1:28:00 PM

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

Linda Piazza : 2/4/2008 1:15:11 PM

I don't see anything definitive happening yet. We'll be moving into a stop-running time of day in about thirty minutes and maybe over the ensuing 20-minute period after that, something will change.

What am I noting? TRIN stays stubbornly over 1.00, and SPX bulls want that to drop. The VIX is maintaining 15-minute closes above the flat 9-ema on its 15-minute chart. That suggests the possibility of a move up to 25.78 or maybe even 26.35 can't be ruled out, and SPX bulls don't want a pop higher in the VIX. On the advdec line, the declining 9-ema continues to provide resistance, and bulls want that to change, too.

So, how should we interpret relatively stable price action in the fact of some slightly bearish underpinnings? As I was preparing this post, the SPX began giving the answer by dropping but perhaps still not the complete answer. I think we should be aware now that the SPX has not been able to rise to test the 1395-1401 resistance and continues to find resistance on 15-minute close at the 9-ema, now at 1385.27. The possibility still exists of further downside . . . and yet the SPX continues to hold up relatively well. I don't see any examples of great setups any direction right now. I was actually tempted to do my once-every-few-months day or swing trades this morning, but I didn't find anything that tempted me once the markets opened. I could still see this going either way. For now, the temptation gone, I'm sticking to my credit spreads.

Jeff Bailey : 2/4/2008 1:12:21 PM

01:00 Internals found at this Link

Keene Little : 2/4/2008 1:11:44 PM

Very slow price action and lack of follow through in either direction continues to support the idea that we're going to stay stuck inside the rising wedge patterns. The only thing I can't tell yet is whether or not we'll chop sideways/down to the uptrend line (price is just starting to break lower as I type).

Assuming we'll continue to see a deeper pullback, the uptrend line from Jan 22nd near SPX 1360 (higher as time progresses) will be the downside target for now. But there remains an equally likely possibility we'll see only a minor pullback and then a final (I think) push to the 1400 area.

Jim Brown : 2/4/2008 1:04:34 PM

Important Reader Survey - Alert   As we head into 2008, we wanted to take a moment and invite you to participate in a short subscriber survey to help us better meet your needs.

As I'm sure you can appreciate, we have a wide range of traders and investors that trade a variety of stocks, options and futures across various time horizons. What's more, the market has introduced and expanded the use of ETFs and emini futures contracts. We felt it was time to take a quick snap shot of your investment and trading styles and get your thoughts and ideas in order to help us better tailor the content and focus of the Market Monitor.

Please click here: Link

Thank you in advance for your quick response to the attached survey. Your feedback is important to us.

Jeff Bailey : 2/4/2008 1:01:05 PM

YAHOO CEO TALKS MICROSOFT WITH EMPLOYEES

DJ- Yahoo CEO Jerry Yang and non-executive Chairman Roy Bostock distribute an email to employees to discuss Microsoft's unsolicited offer, saying 'absolutely no decisions' have been made.

YHOO $29.33 +3.34% ...

MSFT $30.53 +0.26% ...

Jeff Bailey : 2/4/2008 12:58:55 PM

Monster Worldwide (MNST) $29.03 -2.64% ...

Jeff Bailey : 2/4/2008 12:58:21 PM

LAYOFF ANNOUNCEMENTS JUMP 69% IN JANUARY

DJ- Challenger Gray & Christmas says a fresh surge in financial-sector layoffs contributed to a 69% increase in corporate job-cut announcements in January from December, with corporations cutting nearly 75,000 jobs.

Jeff Bailey : 2/4/2008 12:57:44 PM

WORLD BANK CUTS CHINA 2008 GDP FORECAST

DJ- World Bank cuts its forecast of China's economic growth because of a weakening global economy, but it raises its forecast of China's inflation rate citing surging global food prices and domestic policy-induced cost increases.

Jeff Bailey : 2/4/2008 12:56:43 PM

CITIGROUP CUTS CREDIT TO SOME UK CUSTOMERS

DJ- In a sign that more consumers are losing access to loans, Citigroup tells some 161,000 credit-card customers in the U.K. that they can use their cards until the first week of March and then will no longer be able to tap the bank for credit.

Jeff Bailey : 2/4/2008 12:53:40 PM

US Dollar Index (DXY) 75.35 -0.13% (30-min delayed) ...

Jeff Bailey : 2/4/2008 12:52:55 PM

BUSH BUDGET SEES NEAR-RECORD DEFICITS

DJ- Bush administration's $3.1 trillion budget request forecasts that the U.S. federal budget deficit will soar to near-record levels in fiscal 2008 and 2009, due to cooling corporate tax receipts and cost of a short-term economic stimulus package.

Linda Piazza : 2/4/2008 12:32:44 PM

Potential SPX support exists at about 1382 on 15-minute closes. The 9-ema is now just over 1386 with next resistance above that at 1389.89 as I type.

Jeff Bailey : 2/4/2008 12:31:15 PM

Toll Bros. (TOL) $22.09 -6.91% ... $0.50 and $1.00 box chart Link

Note: The PnF methodology for measuring supply (O) and demand (X) uses $0.50 box from $10-$20 as a $0.50 move at that PRICE is more meaningful. Scale changes to $1.00 from $20-$100 as $1.00 box deemed more significant at those prices.

Currently shows "low pole warning," which suggests potential bottom found. Needs trade at $24.00 (had NOT had enough DEMAND to outstrip SUPPLY at that level) to generate a reversing higher "buy signal." Such a trade would currently be a "trip top" buy signal.

Jeff Bailey : 2/4/2008 12:16:09 PM

Toll Bros. (TOL) ... Daily interval bar chart with conventional and "Bailey Wave" Link

Jane Fox : 2/4/2008 12:06:12 PM

YM has now stopped at 12659.

Keene Little : 2/4/2008 12:01:05 PM

The COMP looks the same--it broken the uptrend line from Friday morning, bounced back up to it this morning and has since dropped back.

Keene Little : 2/4/2008 11:59:53 AM

The bounce off this morning's low continues to look corrective. SPX is marching up underneath its broken uptrend line from Friday and looks like it's going to break down. Only question is when.

Jeff Bailey : 2/4/2008 11:54:46 AM

Just noting ... QCharts' 60-minute interval would show that on 08/01/07, TOL's morning low was $19.50, not $18.85. As such, will use $19.50 as (2) for "Bailey Wave" count.

Jane Fox : 2/4/2008 11:50:21 AM

This YM long trade is taking some heat and has reached a low of 12669. Our stop is 12659 so we are still OK.

Linda Piazza : 2/4/2008 11:46:22 AM

Keltner outlook on the advdec line: the advdec line has reached the descending 9-ema that I mentioned earlier. The advdec line is at -333 right now, and it rose up and hit the descending 9-ema at now just over -190 before pulling back to its current level. SPX bulls who want to see a push up into the 1395-1401 level at least don't want a rollover here in the advdec line, but keep an eye on it in case that's exactly what happens as the advdec line tests resistance. SPX bulls want the advdec line to punch higher instead.

Jeff Bailey : 2/4/2008 11:54:40 AM

DJ US Home Construction (DJUSHB) Daily interval bar chart with "drag it up" 100% to 5/24/07 high. Link

Note: I've had to you 720-pd intervals as QCharts' pure Daily Interval bars would not be correct. Will follow with a 60-minute interval chart. I'll also follow with a Toll Brothers (TOL) $22.36 -5.73% ... Take same "Bailey Wave" as DJUSHB.

Jane Fox : 2/4/2008 11:35:15 AM

Triggered into a YM long at 12706 and the stop is sitting at 12659. So the target, at a 1:1 risk to reward ratio, is sitting at 12753.

Jane Fox : 2/4/2008 11:33:03 AM

Stop will be, if triggered, at 12659

Jane Fox : 2/4/2008 11:32:35 AM

I see a long YM at 12706. alert

Linda Piazza : 2/4/2008 11:32:30 AM

The SPX is forming candles right along the flattening 9-ema, which is now at about 1388. Below, the next potential support is at about 1383 on 15-minute closes. The next resistance is at about 1393 and then 1397. The RUT and MID (midcaps) are both already testing their Keltner levels equivalent to the SPX's 1397 level, but the SPX is underperforming them on a Keltner basis this morning. They may give us some clues as to what to expect next (rollover at resistance or new upside breakout).

Jeff Bailey : 2/4/2008 11:28:05 AM

BIX.X 284.96 -2.96% .... did juuuust undercut WEEKLY Pivot (284.65). Conventional 38.2% at 285.96 now. "In the zone" 284.65-285.96.

Jeff Bailey : 2/4/2008 11:22:55 AM

SPY 2 chart montage ... 60-minute intervals ... upper chart is your "conventional;" Lower chart is Q/M/W pivot retracement Link

Keene Little : 2/4/2008 11:22:38 AM

The broken uptrend line from Friday morning, which I referred to earlier this morning, is now near SPX 1390 (ES 1391.50) and could still be resistance and a place to look for a short entry. The bounce off this morning's low is currently corrective.

Jeff Bailey : 2/4/2008 11:20:01 AM

SPY $138.86 ... "in the zone" ... conventional 38.2% support so far, but QS1 still some resistance. 2-chart montage to follow.

Jeff Bailey : 2/4/2008 11:12:57 AM

11:00 Internals found at this Link

Jane Fox : 2/4/2008 11:11:35 AM

Dateline WSJ - Google Inc. Chief Executive Eric Schmidt called Yahoo Inc. CEO Jerry Yang to offer his company's help in any effort to thwart Microsoft Corp.'s unsolicited $44.6 billion bid for Yahoo, say people familiar with the matter.

The approach Friday from Google -- Microsoft's chief rival on the Internet -- came as Yahoo is assessing its options for responding to Microsoft's aggressive "bear hug" bid, which has sent aftershocks through the media and technology industries since its announcement three days ago. People familiar with the matter say Yahoo's board, which conferred by telephone Friday, hasn't taken a position so far and no rival bids have emerged yet, though it remains possible some will.

Jane Fox : 2/4/2008 11:10:16 AM

Dateline WSJ - WASHINGTON -- The federal budget deficit will soar to near-record levels in fiscal 2008 and 2009, the Bush administration said Monday in its $3.1 trillion budget request, a surge in red ink attributable to cooling corporate tax receipts and the cost of a short-term economic stimulus package.

The White House expects the deficit to reach $410 billion in the current fiscal year, just short of the record set four years ago. In fiscal 2009, which begins in October, the budget gap is seen at $407 billion. As a percentage of gross domestic product, the deficit would be 2.9% in fiscal 2008 and 2.7% the following year.

The projections represent a significant short-term deterioration in the U.S.'s fiscal outlook. In fiscal 2007, the deficit was $162 billion. Just last summer, the Office of Management and Budget predicted the current fiscal year's deficit would come in at $258 billion

Keene Little : 2/4/2008 11:08:58 AM

On Thursday I showed the chart of the home builders index (DJUSHB) with a projection to just shy of 410 for what I believe could be the end of an a-b-c correction off the November low (where wave-c = 162% of wave-a). This morning's opening tick high of 410.32 was followed by selling and there's a hint on the daily chart of the oscillators getting ready to roll over from overbought: Link

The wave count calls for another leg down to a Fib projection at 213-216 where the decline for the home builders could finally end. There may be better buying opportunities if and when the home builders get down there but certainly it will be a time to exit any short positions if you still have any at that time. If we see a pullback (38%-62% Fib retracement of the leg up from the Jan low) followed by another push higher then we'll know a bottom is in.

Jane Fox : 2/4/2008 11:08:11 AM

Dateline WSJ - SEC is investigating stock sales by SocGen board member; Justice Department also begins probe

Linda Piazza : 2/4/2008 11:03:49 AM

Keltner outlook on the advdec line: The advdec line is bouncing now, but first resistance is sinking closer and is now at -350 and then at about -150. Stronger resistance is near +390 to +750. Be careful of rollover potential, particularly near -150 and then again as that higher resistance zone is approached. The advdec line is at -457 as I type.

I'd be particularly careful of my SPX gains if the SPX is climbing into that 1395-1401 zone while the advdec line climbs into and stalls or rolls over at the +390 to +750 zone.

Linda Piazza : 2/4/2008 10:56:33 AM

Here's my summary of what I see: I see continued hints of a possible short-term bounce, but those are hints only that haven't yet materialized. If a bounce materializes, the bounce will be a bounce into resistance on both intraday and daily charts. With unstable market conditions, I wouldn't want to take a new bullish entry if a bounce ensued today. If I were already in a bullish trade, I'd be carefully assessing how to handle tests of the 1395-1401 and maybe even 1395-1407 zones if they occur.

Jane Fox : 2/4/2008 10:48:52 AM

Internals are bearish but the AD ratio is telling me we may have a little retracement here. Link

Linda Piazza : 2/4/2008 10:46:54 AM

For OEX traders: the OEX is attempting to steady at 15-minute closes at the Keltner support near 641. The descending 9-ema is now at about 642.75.

Jeff Bailey : 2/4/2008 10:45:31 AM

Some selling in teasuries frees up a bit of cash. 10-year ($TNX.X) up 3.3 bp at 3.633%. WEEKLY Pivot 3.628%, with MONTHLY Pivot (3.657%) "yield resistance"

Linda Piazza : 2/4/2008 10:45:25 AM

The advdec line still attempts to steady. No bounce yet, though. It's at -684 as I type.

Jeff Bailey : 2/4/2008 10:43:36 AM

SPY ... first sign of any technical strength after weaker open will be above DAILY Pivot ($138.88) and weekly 61.8% pivot retracement ($138.87).

Jeff Bailey : 2/4/2008 10:39:45 AM

SPY ... 60-minute interval of 10:34:31 AM post at this Link

Linda Piazza : 2/4/2008 10:38:36 AM

The USDJPY has dropped into that 106.60 area that I mentioned earlier as possible support. It's at 106.62 as I type. Support ranges down to about 106.50 and then there's a congestion zone below that that extends to about 106.20. It would be bearish for the USDJPY to sustain values below the 106.50-106.60 zone, but it's hard to decipher which support might be most important.

Linda Piazza : 2/4/2008 10:25:02 AM

I've been warning that bears might be watchful of the advdec line and the TRAN, as those set up the possibility of a bounce attempt, but I've been trying to emphasize the word "attempt." If the SPX does bounce, it will be bouncing into resistance. I'd be particularly careful about building expectations that it will move much above about 1395-1401. On both daily and intraday charts, potential resistance shows up there, so decide now how you'll treat a bounce into that zone, if it's approached. Of course resistance is sometimes breached, but sometimes in this market, a resistance test is met with immediate selling, too, so just know your plan.

Keene Little : 2/4/2008 10:21:16 AM

Until Friday morning's lows are violated we have to consider the possibility that this morning's pullback is simply a small correction in it's push higher. But so far there's just enough evidence of an impulsive decline from Friday which suggests shorting the next bounce will be the right play. For SPX keep an eye on the broken uptrend line from Friday morning, currently near SPX 1388 (ES 1389.50), to see if it acts as resistance.

Linda Piazza : 2/4/2008 10:19:27 AM

The TRAN punched just above Friday's high a few minutes ago. It's now slightly below it, so the TRAN might give us some clues: new highs or a rollover at resistance near 4820? The TRAN is at 4818.51 as I type.

Linda Piazza : 2/4/2008 10:16:07 AM

Nearest SPX Keltner support is at 1381.06 on 15-minute closes. That's a possible target. The 9-ema is now at 1388.94. The SPX has now spent enough time descending that the 9-ema is curving over, so it's important for those with bullish hopes that it punch back through that 9-ema and maintain values above it. For as long as it's finding resistance there, it's now in a downtrend. The advdec line is creating some confusion, though. It's still been dropping, but the last two 15-minute candles are small-bodied ones indicative of indecision and RSI is at a level that often precedes bounce attempts or a steadying in the advdec line. So, I'm watchful of a bounce attempt in that line and therefore in equities. Maybe I'll be watchful while equities decline all day, but the setup has me worried about trusting the downside too much right now.

Jeff Bailey : 2/4/2008 10:34:31 AM

SPY ... Daily interval chart with "Bailey Wave" and Q/M/W Pivot retracement Link

SPY has slipped just under Q S1. Will "zoom in" with smaller intra-day intervals.

Jane Fox : 2/4/2008 10:01:12 AM

Remember factory orders out at 10:00 - a medium impact report.

Jane Fox : 2/4/2008 10:00:49 AM

The VIX and S&P futures charts are in sync this morning. Link

Keene Little : 2/4/2008 10:00:12 AM

This morning's sharp drop now looks like it's enough to be the start of at least a larger pullback. In the rising wedge patterns I showed on the 60-min charts posted last night (below), we could continue to see a lot of chop and whipsaws so stay cautious about either direction.

Jane Fox : 2/4/2008 9:59:31 AM

WASHINGTON (MarketWatch) -- A fresh surge in financial-sector layoffs contributed to a 69% increase in corporate job-cut announcements in January, according to the latest tally compiled by outplacement firm Challenger Gray & Christmas released Monday.

U.S. corporations announced 74,986 job reductions last month, up from December's 44,416 and 19% higher compared with the previous January, Challenger Gray reported.

The financial sector cut 15,789 positions, accounting for more than a fifth of the documented job cuts for January.

Job cuts remain below levels seen in the 2001 recession, noted John Challenger, CEO of the firm that bears his name.

"If the economy dips into a full-blown recession, it will likely be caused by a drop in consumer spending and the effects of the high price of energy," Challenger said in a release. "In that case, we would expect to see job cutting in areas such as retail, consumer products, and transportation."

Linda Piazza : 2/4/2008 9:55:42 AM

Although I'm still watching for a bounce in the advdec line, so far it's failed in its momentary attempt to bounce. It's at -790 as I type. In addition, the USDJPY is dropping off its pre-market high. At 106.72 as I type, it's dropping into a test of 106.60 support. So far, indicators are mostly negative, but the USDJPY's RSI, like the advdec line's, is now in territory that sometimes signals that a steadying or attempt to bounce might occur.

Jane Fox : 2/4/2008 9:52:51 AM

Overnight lows have now broken. Link

Jane Fox : 2/4/2008 9:52:00 AM

AD line is -687 so indeed the bulls do not have the ball but the bears do not have a firm hold on it either.

Linda Piazza : 2/4/2008 9:48:09 AM

The SPX's decline has pushed next support to about 1386.40 on 15-minute closes. The SPX did close above that on the last 15-minute close, but if it now sustains values below the 9-ema on 15-minute closes, with that 9-ema now at 1390.50, then it's setting up a potential target near 1381. Keep an eye on the advdec line, though, for guidance. That's now at -645, with RSI now at 13, so a bounce attempt could begin at any moment, although one is far from promised.

Linda Piazza : 2/4/2008 9:39:38 AM

Keltner picture of the advdec line (advance/decline line): The advdec line is in the middle of nowhere on the 15-minute Keltner charts. It's between strongest resistance, at about 555-775, and support, at about -1350. RSI is at 14.66, and, usually when RSI is this low on the advdec line, there's an attempt at least to bounce it or steady it. I'm not seeing that happening yet this morning, so right now, I have to factor in the possibility that it could as easily dive to support as it could climb to resistance. RSI says to at least be aware of the possibility it could steady or attempt to climb to resistance, even if it's not enough to promise it. The advdec line is at -387 as I type and still dropping.

Jeff Bailey : 2/4/2008 9:36:38 AM

Google Assails Microsoft Over Yahoo Deal ... AP Story Link

Linda Piazza : 2/4/2008 9:35:06 AM

The SPX's 15-minute 9-ema has dipped to just below 1392. On the OEX, it's at about 644.80. Both are slightly below those 9-ema's. For the SPX, the next channel support, if the 9-ema doesn't hold on the first 15-minute close (still to be decided) is now at 1387.13.

Jane Fox : 2/4/2008 9:32:48 AM

To answer that question I am turning to the jtHMA charts. The way I read these 5 charts is I look for the monthly and weekly charts to match (they are both green here) and I wait for the daily to turn red (a retracement), then jump on board when the 120 and 60 minute turn green which tells me the retracement is starting to turn.

Of course you have to keep your eye on the US$ charts as well because these two markets trade in unison. Link

Keene Little : 2/4/2008 9:31:51 AM

Equity futures got a big spike up from the lows near 5:30 AM but then after peaking near 6:30 AM gave most of it back. It looks like we could either pull back this morning or consolidate.

Linda Piazza : 2/4/2008 9:28:00 AM

As the day ended Friday, the SPX has nearest Keltner resistance at 1399.17 on 15-minute closes; nearest Keltner support just below its close and then at 1392.50 on 15-minute closes. The climb off Friday's low was beginning to look labored, but we start again today. Daily charts show the potential for, but not the promise of, more upside, but I'd always include the possibility of a rollover in my trading plan.

Jane Fox : 2/4/2008 9:27:44 AM

Here is our daily visit to the Gold market and we are indeed getting the expected retracement off the MACD divergence. Now the question is when will this retracement turn around and when do I get back on board. Link

Jane Fox : 2/4/2008 9:26:03 AM

Both the S&P futures (ES) and DOW futures (YM) are consolidating at their respective previous day highs. This type of pattern is one of the most powerful bullish patterns there is in technical analysis and strongly suggests these markets will make a break upwards once the cash markets open (SPX and INDU). However, the fact that they both made a new overnight low around 6:00AM ET tells me the bullishness is waning and I'm not as sure now that they will break upwards.

The Russell 2000 futures (ER2) made a new overnight low at 8:30 and gives me more reason to doubt the bulls will have control once the intraday session starts. Link

Keene Little : 2/4/2008 9:24:00 AM

My apologies on the pivot tables--I posted the ones for Friday instead of Monday. Here are the ones for today: Link and Link

Jane Fox : 2/4/2008 9:17:30 AM

Dateline WSJ - The U.S. federal budget deficit will soar to near-record levels in fiscal 2008 and 2009, the Bush administration said Monday in unveiling its $3.1 trillion budget request. Full article coming soon.

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