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Keene Little : 2/21/2008 12:57:11 AM

The silver fund, SLV, is of course in a similar pattern as silver and it shows a little more upside potential to its Fib target at 179.22: Link

Keene Little : 2/21/2008 12:48:35 AM

If you're interested in trading silver (emini is YI and new front month is May), I see a good short play setting up here. I'm not sure if gold is going to press a little higher so that could drag silver a little higher as well but I like the combination of Fibs and trend lines to call a top here for silver, especially if we see a little throw-over above its rising wedge and then a drop back down inside. The break down should be swift if the bearish rising wedge is the correct pattern here: Link

Keene Little : 2/21/2008 12:37:04 AM

Thursday's pivot tables: Link and Link

Each of the indices looks to be forming a sideways triangle consolidation pattern and I could argue for a break in either direction. So we'll let price tell us which way. Follow the break of the key levels on the 60-min charts:
DOW: Link
NDX: Link
RUT: Link

One slight difference I'm showing on the SPX 60-min chart is the possibility for a rally up to the top of a small parallel up-channel (bear flag pattern) from the Feb 7th low, currently near 1380. That could set up the next leg down from there. Link

OI Technical Staff : 2/20/2008 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The Market Monitor has been archived.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 : 2/20/2008 4:52:16 PM

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

Raised stop on the GLD to $91.29.

Keene Little : 2/20/2008 4:03:22 PM

At this point I'd say resistance is holding and I'm expecting a pullback at least tomorrow morning. A break below this morning's low might put bears back in control but a pullback to a higher low and then a break above yesterday's high would be bullish, at least for a few days. This is about the ugliest market to trade right now that you could ever hope not to see. Whatever is setting up here it will probably be a big move once it breaks.

Jeff Bailey : 2/20/2008 3:58:58 PM

Money-Market Mutual Fund Assets Rise By $16.8B in week ended Tuesday. Net assets to $4.354 trillion.

DJ- Investors to money-market funds contributed $16.8 billion in the week ended Tuesday, bringing total net assets to $3.354 trillion, according to the Money Fund Report, published by iMoneyNet Inc.

Institutional investors added $9.31 billion, while individual, or "retail," investors added $7.49 billion.

Assets in taxable money funds grew by $27.21 billion to $2.872 trillion.

The average seven-day simple yield for taxable funds fell to 3.05% from 3.07%. The average seven-day compound yield, which assumes reinvestment of dividends, declined to 3.10% from 3.12%. Thirty-day simple yields dropped to 3.20% from 3.39%, while 30-day compound yields fell to 3.26% from 3.45%.

The fund with the highest seven-day compound yield among retail taxable general-purpose money funds was Vanguard Prime MMF/Investor at 3.98%, followed by GE Money Market Fund at 3.94%, and Dreyfus BASIC MMF and Morgan Stanley Active Assets MT, each at 3.89%.

About $10.41 billion was withdrawn from tax-free funds, putting total tax-free assets at $481.64 billion.

The average seven-day simple yield for nontaxable funds fell to 1.41% from 1.70%. The average seven-day compound yield, which assumes reinvestment of dividends, declined to 1.42% from 1.71%. The average 30-day simple yield decreased to 1.99% from 2.22%, and the average 30-day compound yield dropped to 2.01% from 2.24%.

The fund with the highest seven-day compound yield among retail tax-free money-market funds was Dreyfus AMT-Free Muni Reserve/BASIC at 2.17%, followed by SSgA Tax Free MMF/Cl A at 2.13% and California Tax-Free MMF at 2.03%.

Linda Piazza : 2/20/2008 3:27:29 PM

I have to step away now and won't be here for the close.

Linda Piazza : 2/20/2008 3:27:14 PM

That Keltner resistance so far holds. The resistance now is at 1362.24 and then 1364.18, with potential support now at the 15-minute 9-ema, now at 1356.15. Bulls want that to hold. The SPX looks as if it could end the day in the middle of that triangle on the daily chart, with little prediction yet of which way the SPX will eventually break out of that triangle. It's support held when tested today, and that's about all we can say so far. Make your end-of-day decisions accordingly. We have Philly Fed tomorrow morning at 10:00, and that absolutely could impact the markets.

Jeff Bailey : 2/20/2008 3:12:27 PM

03:00 Internals found at this Link

Linda Piazza : 2/20/2008 3:06:57 PM

The SPX didn't pause first. Instead it ran right up toward that Keltner target I mentioned in my 2:54:37 post. It hasn't quite hit it, although it did closely approach it, closely enough that we have to watch now and see if that resistance might now rebuff the SPX's advance. The SPX has been overrunning this channel line by a bit on both the upside and the downside lately, but only by a little bit, but it's often confined itself generally to the outlines of this channel. Bulls should now put those plans they had enough warning to formulate into effect now. So far, there's not much of a pullback, and bulls hope the SPX will continue to consolidate near the highs while the 9-ema cycles higher. It's at 1355.62 as I type, with the SPX at 1361.20.

Keene Little : 2/20/2008 3:05:05 PM

SPX hit the downtrend line from last week's high through yesterday's high, just under 1364, and the 2nd leg up today has achieved the minimum (62% of the 1st leg) so the rally could fail at any time. It would look best with a minor new high before dropping back down.

Keene Little : 2/20/2008 2:59:39 PM

Now we'll have two equal legs up off this morning's low at SPX 1370 which would essentially be a retest of last week's high near 1369. If we're going to stay stuck inside a sideways triangle consolidation for another day or two (which I think will happen), watch for resistance there.

Linda Piazza : 2/20/2008 2:56:15 PM

The OEX has set a potential upside target of 628.93. The same cautions apply to it--don't count on it being hit, but assess what you'll do if it's approached--as to the SPX target. It, like the SPX, may need to consolidate near its current level for a while before pushing higher toward that target, but if it's more than consolidation or a testing of the previous resistance zone near 625.60, then something might be wrong.

Linda Piazza : 2/20/2008 2:54:37 PM

Now we have 15-minute SPX closes above the 15-minute 9-ema and a breakout above this afternoon's resistance zone. Potential short-term target for the SPX, as predicted by the Keltner charts is 1364.01, but even if it's reached, we may see some consolidation for a few minutes as the 9-ema begins rising up underneath the current prices. If it's more than consolidation, something is wrong. Don't count on any targets being hit in this market environment, but do assess what you'll do if the SPX does move toward it.

Jeff Bailey : 2/20/2008 2:53:01 PM

Qualcomm (QCOM) $43.41 +3.48% ... challenges mid-October high.

Jeff Bailey : 2/20/2008 2:49:20 PM

CBOE Oil Index (OIX.X) 830.67 +1.00% ... retraces 61.8% of recent decline.

Linda Piazza : 2/20/2008 2:46:48 PM

Dontcha wish the powers that be would decide where prices are going next? As I mentioned earlier, you're not in control of that, but instead only in control of how you react. I've talked to a number of people lately who have had deer-in-the-headlights reactions to the markets these days. The best antidote to that is to have a plan for how you'll react if markets go in the right direction for your trade, in the wrong direction, and, especially when trading options, when they go no where at all. Right now, assess what you'll do if the SPX were to zoom up into the 1360-1364 zone, as is possible, or if it should drop back toward 1340, as is also possible, or if it just chops around between 1350 and 1357 the rest of the day, which is also possible.

Jeff Bailey : 2/20/2008 2:37:43 PM

US Dollar Index (DXY) 76.24 +0.32% (30-minute delayed) ... sitting on WKLY Pivot just after FOMC minutes released.

Jane Fox : 2/20/2008 2:34:09 PM

I have to leave for the day so I will be taking the YM short off the table for I will not here to monitor it.

Linda Piazza : 2/20/2008 2:33:58 PM

The SPX's 15-minute 9-ema at 1352.25 continues to hold as support on 15-minute closes, and that has to count on the bullish side. We see some spiky candles on that 15-minute chart and that's showing some selling each time the SPX rises toward 1355-1357.50, so that's a bit troublesome. Either those sellers at 1355-1357.50 are going to win out or the buyers near 1349-1350 are, but which is it going to be? Nothing on the charts predicts that yet.

Jim Brown : 2/20/2008 2:32:29 PM

March crude futures expire today and the shorts are getting killed. Once futures expire today I would expect the new contract CL08J to be under selling pressure.

Jane Fox : 2/20/2008 2:28:45 PM

Us Goldbugs liked what the FED had to say in the FOMC minutes. Link

Jane Fox : 2/20/2008 2:26:55 PM

This is just another good example of why I put my short entries under the XXXX0 number

Jeff Bailey : 2/20/2008 2:26:20 PM

DJ- Oil Futures: Nymex Crude Jumps As Funds Pour In

Jane Fox : 2/20/2008 2:25:42 PM

YM got to a low of 12340 and then headed higher. My entry is at 12339.

Linda Piazza : 2/20/2008 2:24:38 PM

Market participants still haven't decided where to go next. The SPX is testing that support near 1350 as well as the flattening 9-ema, now at 1351.35, with both support levels now failing but with some time still left in the 15-minute period. A drop toward 1345-1347 is possible but not yet targeted.

Jeff Bailey : 2/20/2008 2:24:13 PM

US Oil Fund (USO) $79.62 +1.02% ...

Jeff Bailey : 2/20/2008 2:23:53 PM

StreetTracks Gold (GLD) $92.67 +1.20% ... that's a new 52-weeker. Sticks its head above WEEKLY R2.

Jane Fox : 2/20/2008 2:18:20 PM

The best place for the stop would be above the daily highs but that is just a tad too far for my liking so I will put it just above 12400 at 12402. This trade has more risk than the one I profiled earlier but the volatility has picked up.

Jane Fox : 2/20/2008 2:16:43 PM

I will take YM short at 12339 alert

Jane Fox : 2/20/2008 2:16:07 PM

Internals are not talking to me today so I am going to go with what the charts are telling me and I see a short at 12339 again. THe low at 12342 was not breached during that volitility so a break of that low would be significant.

Linda Piazza : 2/20/2008 2:15:07 PM

The USDJPY has been climbing most of today. It's pulled back since the FOMC minutes were announced, but so far, the pullback isn't excessive. I'd have to see a 15-minute close beneath about 107.98 before I considered it important. It's at 108.09 as I type.

Linda Piazza : 2/20/2008 2:12:26 PM

This 15-minute period is so far producing a long-legged doji, a visual sign of the uncertainty in the markets. People don't know where to send prices yet. So far, however, support at both the 15-minute 9-ema (1352) and the 120-ema (1350) are preserved.

Jane Fox : 2/20/2008 2:09:46 PM

Internals remain bullish but not overly so. The one that does bother me though is the VIX but it has been spiking all over the place today so I'm not sure how much importance I can put on it today.

Jeff Bailey : 2/20/2008 2:06:53 PM

FOMC Minutes (1/29/08-1/30/08) Link

Keene Little : 2/20/2008 2:06:37 PM

SPX stopped right at the top of its parallel down-channel again (the one for price action since the October high): Link . Unfortunately the intraday price action is so choppy that it leaves open several possibilities for the next move (hence the multiple scenarios shown on the daily chart).

Right now I'm thinking a sideways triangle from the low on Feb 7th, or a larger one from the high on Feb 1st, could be playing out (would explain all the choppy 3-wave moves). Depending on which triangle it is will determine whether we get an upside or downside break. The key levels are 1369 above and 1336 below. As this 60-min chart update shows, the break may be good for only a relativly short term move before reversing again: Link

Jane Fox : 2/20/2008 2:05:47 PM

Fed sets sight on credit ratings, bank risk management

Some on Fed doubt wisdom of fiscal stimulus

Risk of vicious downward cycle a factor in rate cut: minutes

Fed trims '08 growth forecast, raises inflation projections

Fed agrees inflation disappointing since year-end: minutes

Rapid rate hikes may be needed once growth improves: minutes

Downside risks remain even after Jan rate cuts: Fed minutes

Linda Piazza : 2/20/2008 2:05:12 PM

Some volatility as markets decide how to react. The SPX has potential support at 1350 on 15-minute closes, with the 15-minute 9-ema just above that, at about 1352.

Jeff Bailey : 2/20/2008 2:04:14 PM

10-year ($TNX.X) 3.912% ...

Jane Fox : 2/20/2008 2:04:04 PM

The YM short at 12339 is OFF the table alert alert

Jeff Bailey : 2/20/2008 2:03:56 PM

RUT.X 705.60

Jane Fox : 2/20/2008 2:03:47 PM

Oh my goodness the market does not like what they have found in the FED minutes.

Jeff Bailey : 2/20/2008 2:03:43 PM

PHF $8.23

Jeff Bailey : 2/20/2008 2:03:31 PM

SPY $135.50 ...

Jeff Bailey : 2/20/2008 2:02:58 PM

Fed Lowers 2008 GDP Forecast By 0.5-Pt To 1.3% to 2.0%

Jeff Bailey : 2/20/2008 1:59:29 PM

Swing trade long raise stop alert! ... for the 1/3 position in the StreetTracks Gold (GLD) $92.27 +0.75% ... to break-even $91.29. (from $88.50).

Jane Fox : 2/20/2008 1:58:42 PM

The AD line is a paltry +180 so I was quite comfortable taking the short at 12339 however, fortunately it did not trigger.

Jeff Bailey : 2/20/2008 1:47:48 PM

DuPont Reaffirms Guidance For 1Q; Full Year

DD $46.22 (unch)

Jeff Bailey : 2/20/2008 1:40:25 PM

Fed's Poole:
US economy will skirt recession
Excessive stimulus may be counterproductive
Policy must not focus on just one issue
Inflation expectations generally stable
Food, energy may be setting inflation trends
Inflation harder to reverse than unemployment

Jeff Bailey : 2/20/2008 1:37:16 PM

US Dept. of Labor Announces Grant Exceeding $5.5 Million to Assist Dislocated California Workers Affected by Mortgage Banking Layoffs

Jane Fox : 2/20/2008 1:36:21 PM

If triggered on this short the stop will be 13286 so a 47 tick risk.

Jane Fox : 2/20/2008 1:35:20 PM

I see a YM short now at 12339 exactly 100 points higher than my earlier short - alert

Linda Piazza : 2/20/2008 1:31:16 PM

The top of that gap from yesterday morning is proving difficult resistance. Probably we had some people who were bought that gap and were trapped, followed prices all the way down are looking for a way to at least ameliorate their losses. Just remember that the FOMC minutes can be market moving, and we don't know yet which way they'll move markets. Take some risk off the table if you've got too much at risk.

Linda Piazza : 2/20/2008 1:27:56 PM

I see Jane reminded readers early this morning that the FOMC minutes would be released at 2:00 pm ET this afternoon. I was about to remind readers again, to tell them that they ought to decide if they wanted to stay in before those minutes, but it looks as if some longs decided in the last few moments that they did not want to do so. There may already be some positioning ahead of those minutes.

Linda Piazza : 2/20/2008 1:24:38 PM

Potential support for the SPX at about 1349.80-1350.

Keene Little : 2/20/2008 1:19:43 PM

Short term bearish divergences indicate we'll probably get at least a short term pullback.

Jeff Bailey : 2/20/2008 1:11:02 PM

01:00 Internals found at this Link

Keene Little : 2/20/2008 1:03:50 PM

SPX should find support around 1350 for another leg up.

Linda Piazza : 2/20/2008 12:49:32 PM

The SPX maintained support now at 1350.30 on that last 15-minute close. It's not particularly important support--that near 1349.70 and then 1345-1347 are more important. The picture is clouded, however, by the upper shadows beginning to show up on the last few 15-minute candles. That's usually indicative of some selling into an attempt to rise.

Linda Piazza : 2/20/2008 12:47:54 PM

I have a trading mantra--borrowed, not invented by me--that I've been repeating to myself a lot lately. I am not in control of where prices go; I am only in control of how I react to what happens. Lately, I've altered it a bit: I am not in control of whether chart setups actually play out as they suggest they will. I can only point out what I see.

Linda Piazza : 2/20/2008 12:44:11 PM

That surge pushed the SPX above the 1345-1347 resistance band, closing a 15-minute period above it, so that's squarely on the bulls' side.

Why don't I completely believe that it will be sustained? The shape of the candles. I waited until the last 15-minute candle formed and it was a doji and now the SPX is pulling back a little. Bulls want to see that 1345-1347 area preserved as support if the SPX should pull back too far.

These are crazy markets. We didn't all suddenly stop being able to read charts--us up here and you out there. You didn't suddenly turn into terrible traders. Market conditions are different. You see benchmarks that once meant something and then they're violated but prices immediately start acting as if they're going to turn around again. Or maybe not.

Jane Fox : 2/20/2008 12:33:42 PM

When you step back and start looking at the weekly charts - something I do very rarely other than on the jthMA charts - you start to get a much clearer picture.

Look at the glaring MACD divergence from the highs made on October 2007. That should have been a huge warning to the bulls.

Now take a look at the oversold on the Comm Channel Index and how it showed an oversold one week BEFORE the SPX made a spike down. Link

Jeff Bailey : 2/20/2008 12:25:43 PM

Mexico Sugar Surplus By End '07-'08 Year Seen At 1M-1.2M Tons

Jeff Bailey : 2/20/2008 12:24:23 PM

US Oil Fund (USO) $79.14 +0.41% ... after test of WEEKLY R2.

Jane Fox : 2/20/2008 12:24:20 PM

Here is the weekly chart of Gold. I have added a Comm Channel Index that shows oversold and overbought. As you can see Gold was overbought back in September 2007 and it continued to make new yearly highs. Then it was overbought again in January 2008 and continued to make new higher highs.

I see no MACD divergences.

In other words I see nothing that tells me Gold is ready for a retracement. Link

Jeff Bailey : 2/20/2008 12:21:25 PM

Money Flow @ 12:09 PM EST Link

Keene Little : 2/20/2008 12:21:02 PM

SPX already jumped up to the higher Fib projection at 1351.87 so short with a stop at 1354 is a recommendation. Any higher than 1354 and I would be looking for a long play (trade only).

Keene Little : 2/20/2008 12:17:32 PM

Nice little stop run to the north there. SPX stopped right at the top of a little parallel up-channel for today's bounce but if it keeps going the next upside Fib projection for this leg up is at 1351.87 (162% of the 1st leg up). Higher than 1353.37 would overlap yesterday morning's pullback and leave the decline from yesterday's high as a 3-wave pullback and indicate the possibility we're going to get a strong rally leg to complete a larger 3-wave rally off Friday's low.

Jane Fox : 2/20/2008 12:16:28 PM

Here is your weekly chart of crude which shows the support and resistance very clearly. The fact that MACD is not making a triple top does not bode well for the bulls, I'm afraid. Link

Jeff Bailey : 2/20/2008 12:14:07 PM

Hovnanian (HOV) $8.61 +0.46% ... active Mar $5 and $10 puts.

Jeff Bailey : 2/20/2008 12:13:19 PM

Toll Brothers (TOL) $21.11 +2.02% ... challenges WKLY Pivot.

Jeff Bailey : 2/20/2008 12:06:38 PM

A&L Well-Funded, But Comes At Cost (update)

DJ- Alliance & Leicester PLC's (AL.LN) Wednesday said its business is well-funded through the first quarter of 2009, although at the cost of slashing previous earnings-per-share growth targets.

The bank's attempt to reassure investors that funding is solid, and that the quality of its loan book is sound, largely fell on deaf ears, as the message was coupled with a strategy of not chasing new customers for retail deposits or writing more mortgage loans this year.

Numis Securities said it will cut earnings forecasts following Wednesday's news and said better value can be found elsewhere, while KBW analysts said the outlook is very poor, suggesting that the only positive might be a white knight if the stock falls enough. Numis has a hold recommendation and 573 pence price target, which it expects to reduce, while KBW has marketperform and a 750 pence price target.

The share closed Wednesday down 35 pence, or 6.6%, at 493 pence, although it was off an intraday low, which was also a 52-week low, at 428 pence. The FTSE 100 was down about 1%, while the FTSE 350 banks index was down 0.6%.

In the past few months, A&L hasn't changed the nature of its funding base - with more than 50% coming from wholesale markets - but it has doubled its liquidity position and arranged for more long-term funding of its business as a reaction to the liquidity shortfall seen in the market since September.

With funding costs being materially higher than a year ago, however, A&L estimates it will pay GBP150 million more for it this year than it would have if the markets were at the levels of the first half of last year.

In the second half of 2007, it paid GBP23 million more for borrowing compared with previous levels.

Consequently, investors were warned that EPS won't grow by 9% over the retail price index this year or next year as was previously planned, and they may have to wait a while before seeing the dividend being hiked again.

A&L's executives were asked Wednesday why they didn't want to grow the bank's retail deposit base to support funding instead of getting money from the market.

"Many are saying the solution to the funding problem is chasing customer deposits, but it would cost huge amounts to have the best-buy savings account. Why should we pull retail savings when we can fund ourselves in different markets?" Chief Financial Officer Chris Rhodes said.

To have the best-buy savings-accounts, Rhodes said A&L would have to pay 6.5% or more interest and if the bank can fund itself cheaper than that in the market, why shouldn't it?

Following Northern Rock PLC's (NRK.LN) unprecedented borrowing from the Bank of England, the market has been nervous about banks with similar business models; those that write new loans to their customers by depending heavily on funding through short-term commercial paper in capital markets.

A&L and Bradford & Bingley PLC (BB.LN) are often mentioned in the same breath as Northern Rock as needing to reduce their dependance on lending in the market, boost their savings deposits by winning new customers and using these deposits to write new loans.

But Rhodes also said A&L won't be writing any new mortgages that are funded in the wholesale market but will be solely funded through deposits.

Additionally, the bank expects the number of new mortgages to decline this year, as it won't aggressively try to win new customers. It will attempt to write new loans to at least 70,000 of its 100,000 mortgage borrowers that are redeeming their loans this year. In total, A&L has 500,000 mortgage customers.

Other loans will be provided through a combination of deposits or wholesale funding with six-month maturity, and short-term finance - of three month and less - will fund the high-quality treasury assets.

Rhodes said, mortgage and savings, accounting for 27% of group income, will likely remain flat this year, and there will be more focus on cross-selling to existing customers and boosting commercial banking and current accounts business, including personal loans.

If the market does improve, there is the added uncertainty of what level funding prices will stabilize: "I don't have a crystal ball," Rhodes said, "your guess is as good as mine." But he did said that "prices will not go back to where they were in the first half of last year."

In 2006, the net interest margin, which describes how much money the bank is able to make after paying expenses on its own loans, was a comfortable 1.3%. In 2007, that had dropped to 1.16% and for 2008, it's forecast to drop to 1%.

Despite the bank's funding situation, analysts questioned the growth story and said there wasn't really room for any more write-downs, or the bank will have to cut its dividend.

NCB Stockbrokers has a reduce rating on the bank. "If it cannot cut costs materially, earnings are likely to fall substantially which will threaten the dividend. Given the yield, we believe it would make sense to cut the dividend by 50%."

CFO Rhodes declined Wednesday to quantify new targets, saying that "at some point we're going to have to come back with revised targets," but that now was not the time.

Linda Piazza : 2/20/2008 11:50:27 AM

That triangle on the intraday charts is narrowing so much that a move out of it won't require much and may no longer be that significant. Triangles often break about 2/3 of the way through and this one has to be about 7/8 of the way through so that any tiny jit or jot is going to appear to be a breakout. A sustained move above the 15-minute 9-ema ast 1342.65 would be a short-term change in tenor as now would be sustained 15-minute closes beneath the line now at 1340.49. In both cases, though, the SPX would soon bump into next resistance (1345-1347) or support (1335-1337).

Keene Little : 2/20/2008 11:35:18 AM

If SPX manages to get two equal legs up in this morning's bounce that would be up to 1347. The other possibility is that we'll see more of a sideways consolidation before another leg down. Just keep in mind that the next leg down should finish a 5-wave move down from yesterday's high and that will set it up for a reversal. So be careful selling a breakdown--trade it but don't stick with it.

Linda Piazza : 2/20/2008 11:35:02 AM

The SPX's 15-minute 9-ema did hold again as resistance on the last 15-minute close, but the SPX is still trying to push above it. I think it's entirely possible that the SPX is going to push up into the 1345.50-1347.00 level that's next resistance, but such a push is not yet a given. As I said earlier, I try not to hold too many pre-formed opinions about which way this type of consolidation pattern is going to break.

Jane Fox : 2/20/2008 11:31:30 AM

I will leave the short at 12239 for now but I may get a better entry later. This is a dangerous market to trade and a shorter timeframe may be the way to go but I started the day with the 377Tick and I will not switch intraday. That is a big NO NO.

Jeff Bailey : 2/20/2008 11:27:27 AM

IMF Cuts French 2008 GDP Forecast To +1.5% On Year (from October's +2.2%)

Senior French official saying government sticking to +2.0% GDP for 2008.

Jane Fox : 2/20/2008 11:20:59 AM

I am considering switching markets and timeframes since the DOW on the 377 tick is not giving me the results I was getting last year. I need to have a set of rules to make this switch and not just a "feeling." Of course my equity curve is telling me it is time to switch but we all need to live through drawdowns but recognize when a drawdown is more nefarious and it is time to make a change.

Linda Piazza : 2/20/2008 11:18:10 AM

The SPX is forming a triangle at the bottom of the decline off yesterday's high. I try to keep an open mind with triangles as you just never know which way they're going to break. I'm looking at potential support on the 30-minute Keltner chart, at 1335.71 on 30-minute closes, as the sort of marker for me as to whether the SPX is holding or losing support. I'm using the 15-minute 9-ema as a short-term guide to what's happening on the upside, to whether resistance is holding or not. That's currently at 1343.04 on 15-minute closes.

Jane Fox : 2/20/2008 11:17:59 AM

I see a YM short at 12239 and, if triggered, I will put a stop at 12281 so a 42 tick risk. alert

Jeff Bailey : 2/20/2008 11:11:21 AM

11:00 Internals found at this Link

Yesterday's internals Link

Jane Fox : 2/20/2008 11:05:50 AM

The VIX charts continue to be of little use to me. I'm not sure if it is due to Tradestation's data or something else going on. Link

Keene Little : 2/20/2008 11:01:00 AM

It continues to look like we'll consolidate for a bit before heading lower again. But it's possible it will be only a minor new low. If SPX drops much below 1335 and DOW below 12200 then the likelihood for a move down to the Feb 11th lows increases. Don't force a trade here--if we're in a 4th wave correction (in the move down from yesterday's highs) it could chop you up.

Linda Piazza : 2/20/2008 10:50:57 AM

The SPX is testing its 15-minute 9-ema, now at about 1344.80. So far, it hasn't been able to break above it, but it's still testing. That will be only the first tentative sign of improvement, if the SPX can maintain levels above that. A more significant resistance level will be found near 1347.25-1350.60, if the SPX should climb that far.

Jeff Bailey : 2/20/2008 10:35:40 AM

Rising Freight Rates Won't Dent Commodities ... DJ- The tide of falling freight rates, which provided end users with some reprieve as commodity and crude oil prices skyrocketed, has turned and a surge to fresh highs is likely, writes Tor Ching Li.

Linda Piazza : 2/20/2008 10:35:04 AM

The SPX's 15-minute 9-ema is now at 1344.58. The SPX is again trying to cling to that support at 1340.70 on 15-minute chart and at 1336.25 on the 30-minute chart, support that may be even more relevant. However, it's not bouncing as strongly yet as bulls would like, bringing up the possibility of another downturn. Bulls would like to see it scramble back above that 15-minute 9-ema.

Jeff Bailey : 2/20/2008 10:33:59 AM

US Oil Fund (USO) $78.42 -0.49% ...

Jeff Bailey : 2/20/2008 10:33:36 AM

OPEC GIVES MIXED SIGNALS ON OUTPUT

DJ- Representatives of the Organization of Petroleum Exporting Countries give mixed signals over whether they will adjust oil output at their March 5 meeting after U.S. benchmark crude closed above $100 a barrel.

Jeff Bailey : 2/20/2008 10:31:09 AM

SHARPER IMAGE FILES FOR BANKRUPTCY

DJ- Specialty retailer files for Chapter 11 protection with plans to quickly shutter 90 of its underperforming stores. Company blames its liquidity crisis on a host of factors, including increased competition and deteriorating gross margins.

SHRP $0.38 -73.61% ...

Jeff Bailey : 2/20/2008 10:29:12 AM

UK'S NORTHERN ROCK BILL MOVED TO UPPER HOUSE

DJ- The U.K.'s Labour government rushes through the first steps towards passing a bill to nationalize troubled mortgage lender Northern Rock, the bank it had to step in to save six months ago, AFP reports.

Jeff Bailey : 2/20/2008 10:27:56 AM

EIA: Weekly Petroleum Status Report will be released on Thursday, 2/21/08 due to the closure of the Federal government on Monday.

Jeff Bailey : 2/20/2008 10:25:28 AM

Verizon (VZ) $33.65 -4.78% ...

Keene Little : 2/20/2008 10:25:26 AM

We should see a little more time spent consolidating this morning before another leg down. It takes a rally above SPX 1353 to negate the wave count that calls for another leg down before setting up a larger bounce so be careful of potentail whipsaw this morning.

Jeff Bailey : 2/20/2008 10:24:39 AM

AT&T (T) $33.44 -6.82% ... getting hit.

Jeff Bailey : 2/20/2008 10:24:13 AM

A&L UNABLE TO MEET SOME TARGETS

DJ- Mortgage lender says it may not meet some targets for 2008-09 as its operating profit falls on write-downs. Analysts expect more impairments and further margin pressure. CFO says additional 2008 costs are related to new funding facilities.

Jeff Bailey : 2/20/2008 10:22:11 AM

US CHAIN STORE SALES FALL IN FEBRUARY

DJ- Chain store sales fall 1.1% in the first two weeks of February versus the previous month, according to Redbook Research. Meanwhile, ICSC-UBS Retail Chain Store Sales Index is unchanged in the week to Feb. 16.

RLX.X 391.35 +0.56% ... conventional 19.1% (387.50) providing support since 1/23/08.

Jeff Bailey : 2/20/2008 10:20:04 AM

GARMIN 4Q CLIMBS 70%, HELPED BY AUTO REVENUE

DJ- Navigation products maker earns $307 million, or $1.39 a share, helped in part by higher automotive/mobile unit revenue. Excluding items, earnings are $1.31 a share, topping expectations of $1.11. It expects to beat 2008 expectations.

GRMN $70.26 +1.09% ...

Jeff Bailey : 2/20/2008 10:18:23 AM

NATIONAL-SECURITY REVIEW OF 3COM BUYOUT PULLED

DJ- 3Com withdraws its filing with a federal oversight panel regarding its proposed $2.2 billion buyout by Bain Capital, saying the sides couldn't reach agreement to mitigate national security concerns.

COMS $3.14 -15.81% ...

Jeff Bailey : 2/20/2008 10:17:07 AM

TJX'S 4Q NET UP 47%, SEES STRONG 2009

DJ- Retailer's net income soars to $301.1 million, or 66c a share, as same-store sales grow companywide. It projects fiscal 2009 earnings above expectations, but warns 1Q profits may fall short of estimates.

TJX $30.54 +2.72% ...

Jeff Bailey : 2/20/2008 10:15:40 AM

US HOUSING STARTS GAIN 0.8%, MISS EXPECTATIONS

DJ- Housing starts increased 0.8% to a 1.012 million annual rate in January, after plummeting a revised lower 14.8% in December to 1.004 million. Wall Street expected a 1.4% climb. Building permits drop 3.0% to a 1.048 million annual rate.

Jeff Bailey : 2/20/2008 10:14:40 AM

US Thrifts Report Record $5.24 Billion Loss in 4Q

DJ- The U.S. thrift industry reported a record loss of $5.24 billion in the fourth quarter of 2007, the largest quarterly loss since federal regulators first started collecting quarterly data.

The Office of Thrift Supervision said about $4 billion of the overall losses was tied to write-downs in the value of assets affected by the downturn in the housing industry.

"These are difficult economic times and I expect our thrifts to continue to bolster reserves appropriately for loan losses anticipated in 2008," OTS Director John Reich said in a statement.

Linda Piazza : 2/20/2008 10:06:50 AM

Keltner outlook on the advdec line: If the historical support near -1600 doesn't hold on this test, with the advdec line now at -1543, then it has vulnerability to about -1850 to -1900.

Linda Piazza : 2/20/2008 10:05:04 AM

SPX traders should now be factoring in a possibility of a drop to 1327 or so. It's not a promise, but the SPX is having difficulty maintaining support at 1340.70, so it's setting a potential downside target at about 1327.

Keene Little : 2/20/2008 9:55:42 AM

With the DOW and SPX having joined NDX with a break of last Friday's lows, it confirms the fact that the rally off Friday's low was not the start of something bigger to the upside (we could get another leg up but it would only be part of a larger correction before heading lower again).

We could see a small consolidation followed by a new low before getting a bigger bounce. Two equal legs down from last week's highs gives us some initial downside targets (SPX 1335.65, DOW 12211 and NDX 1750.88). The RUT had a steeper initial drop last week which gives it a much lower (relative) downside target of 682.37.

Jane Fox : 2/20/2008 9:54:48 AM

VIX is all over the place today and on the 1 minute chart is totally useless.

Linda Piazza : 2/20/2008 9:50:30 AM

The TRAN held to the same Keltner support that I've been watching on the SPX (and OEX, although the OEX didn't maintain it on the 15-minute close). For the TRAN, that's at 4648.58 with the TRAN currently at 4653.01.

I'm not impressed, though, with the bounce attempts that I'm seeing on these indices, and I see the advdec line heading down again toward potential support at -1600 or -1800. It's at -1456 as I type after having bounced a bit. Those hoping for a steadying in the equities would like the advdec line to steady now and begin climbing.

Linda Piazza : 2/20/2008 9:47:41 AM

After being stronger on a Keltner basis than the SPX late last week, the OEX has been weaker on the same basis this week. The OEX has violated its 15-minute potential Keltner support on the first 15-minute close, with that support at about 619.47. It may be that the OEX just overran the support a bit, but the OEX, like the SPX, needs to sustain 15-minute closes above the descending 9-ema before anything has changed in tenor. That 9-ema is now at 621.82 but is still dropping. For now, the 619.47 area may now be nearest resistance on 15-minute closes.

Linda Piazza : 2/20/2008 9:45:28 AM

It looks as if the SPX's 15-minute potential Keltner support that's now near 1340.70 will hold on the first 15-minute close. The SPX needs to begin forming 15-minute closes above the descending 9-ema before we believe that the descent that began yesterday about 2:00 pm ET has changed in tenor at all, however.

Linda Piazza : 2/20/2008 9:43:26 AM

The significance of the advdec line is that volume patterns often lead price patterns, and the two are completely independent evidence. A lot of oscillators we use are derived from price patterns, so you're studying an oscillator that's derived from price patterns to corroborate price action, and the two aren't fully independent. That's why I like to add in the volume studies. However, I would prefer an advdec line determined through the ratio method, but my feed service doesn't provide that, at least that I can find, so I make do with what I have.

Linda Piazza : 2/20/2008 9:41:11 AM

Keltner outlook on the advdec line: The advdec line is fast approaching potential Keltner support, near -1800. Historical support can be found in the -1600 zone. The advdec line is now at -1423, having bounced up from its morning's low of -1587. It still has vulnerability down to that -1800 level and potential resistance near -800, but if it bounces hard and sustains values above -800, then bears might have more to worry them.

Linda Piazza : 2/20/2008 9:37:35 AM

The SPX is at the lower trendline marking the triangle's lower boundary, with this triangle on the daily chart. See my 9:15:15 post for a link to the chart showing the triangle. This is also potentially strong support on the 30-minute Keltner chart, with that support having been pushed down to about 1337.20 by the early descent. As I warned earlier, bears need to know how they intend to handle this test, as it could produce a bounce. We'll have to wait and see whether such a bounce is sustainable, however.

Jane Fox : 2/20/2008 9:35:55 AM

AD line a very bearish -1485

Jane Fox : 2/20/2008 9:33:54 AM

Remember the FOMX minutes will be released today at 2:00.

Keene Little : 2/20/2008 9:31:50 AM

We started yesterday with a big gap up which didn't hold. Today we start with a gap down so we're left to wonder if the reverse will happen. It could reverse but I think it will drop a little lower first. Keep an eye on NDX 1730 area since it seems to be leading the way here. If that support level holds then we could see the market make another rally attempt.

Linda Piazza : 2/20/2008 9:18:11 AM

I do know how to spell "boundary" despite spelling it "boundery" on the annotations on that chart. Sometimes it gets tricky replacing one chart with another on a post, so I'll leave the chart with the wrong spelling linked to my 9:15:15 post, thinking it's the lesser of two evils.

Jane Fox : 2/20/2008 9:17:17 AM

Gold is taking a little bit of a rest after its huge move yesterday.

Yesterday I stated I had a stop on my GLD position sitting at $850.00/oz but I have now raised that stop to $870.oz. Link

Linda Piazza : 2/20/2008 9:15:15 AM

If the SPX cash market heads down in accordance with the futures' action, the SPX may be testing the boundary of a big triangle on its daily chart: Link If in bearish positions today, watch for potential support at the triangle's lower boundary and have a plan for dealing with a test of that boundary, if it occurs. If in bullish positions or inclined to test them at the triangle's lower boundary, do not count on the boundary holding and a bounce occurring. I've been warning of and watching for a triangle setup since the day after the last FOMC meeting, and a triangle breakdown could be serious if not quickly reversed. The thing about triangles is that that flatten oscillators and we really can't tell which way they'll break until they break.

Jane Fox : 2/20/2008 8:45:34 AM

The overnight markets did not like the CPI data out at 8:30ET, all have broken their previous day lows. It seemed like the markets "knew" beforehand that the CPI data would come out bearish because they were all headed down well before it was released. Link

Jane Fox : 2/20/2008 8:37:40 AM

WASHINGTON (MarketWatch) - Inflation remained hot in January, led by large increases in energy and food prices but also in a host of underlying core prices, the government reported Wednesday. U.S. consumer prices rose a seasonally adjusted 0.4% last month, the Labor Department reported Wednesday.

Excluding food and energy prices, the core CPI rose 0.3% in January, the biggest gain since June 2006.

The increases in the CPI and core CPI rates were above the median estimates of economists surveyed by MarketWatch. Economists had projected a 0.3% gain in the CPI and a 0.2% increase in core inflation. Today's report contains updated seasonal factors. As a result, December CPI was revised up to a 0.4% gain compared with the initial estimate of a 0.3% increase.

On a year-over-year basis, the CPI is up 4.3% in January. Core inflation is up 2.5% over the same period, the fastest pace since February 2007.

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