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Keene Little : 2/22/2008 12:03:25 AM

Friday's pivot tables: Link and Link

Price action still leaves several possibilities open so I'm showing a couple with the key levels to let us know when to trade in the direction of the break. The DOW 60-min chart shows a bullish sideways triangle pattern that needs to rally immediately on Friday in order to maintain the possibility that this pattern is the right one: Link

Otherwise the next best hope for the bulls is for the market to find support at the bottom of a little parallel down-channel (bull flag pattern) from the Feb 13th high, somewhere just above 1330 as shown on this SPX 60-min chart: Link

NDX could drop further before finding support at the bottom of a larger sideways triangle that will then need another leg up inside the triangle pattern before it will be ready to decline into March: Link

All of these triangle patterns explain why price has been so choppy and full of whipsaws with so little follow through. The market is coiling for a big move. Whether that big move will have any follow through is another question.

OI Technical Staff : 2/21/2008 10:00:00 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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Jeff Bailey : 2/21/2008 6:30:33 PM

EIA's This Week In Petroleum Link ... additional "refiner" information.

Jeff Bailey : 2/21/2008 6:25:00 PM

EIA Weekly Nat. Gas Story Table Link ... Draw of 172 Bcf.

Jeff Bailey : 2/21/2008 6:21:46 PM

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

Stopped out/closed the 1/4 position in PetroChina (PTR) as the stock traded raised stop of $149.80.

Jeff Bailey : 2/21/2008 4:25:50 PM

SPY $134.79 -0.83% .... bugger holds WEEKLY Pivot.

Keene Little : 2/21/2008 4:13:07 PM

I think we're due a bounce tomorrow to correct today's decline. The slightly longer term pattern is unclear and therefore it's not clear yet whether or not we'll get a stronger rally or just stay within the choppy trading range. Stay patient.

In the meantime my silver short is looking pretty good. Short against today's 18.18 high (SLV 179.23) is the right play.

Linda Piazza : 2/21/2008 3:51:32 PM

Another SPX test of potential Keltner support now at 1340.19 on 15-minute closes. As I mentioned in my 1:40:10 post earlier this afternoon, be sure you have a profit-protecting plan in place for the support zone that's being tested.

Consider this potential support, too, as you make decisions about whether to hold overnight. It's going to be a difficult decision, depending on what happens into the close, because the SPX may be ending up near that triangle support. It's been churning back and forth, roughly between 1340 (extending a few points lower) and 1364 (extending a few points higher) for quite a while now, so will it head back up through that range tomorrow or finally drop out of it? There are no reports in the U.S. to swamp the indices tomorrow, but neither are there reports to cheer them, either. If bearish, don't take on too much risk overnight, being convinced of a bearish outcome. It may come, but you probably would have thought that on other days such as last Thursday, when the SPX dropped through nearly the same range as it did today. We just can't be sure. If bullish, don't hold on if you shouldn't be, convinced a bounce tomorrow. It also may come, but we just don't know.

Keene Little : 2/21/2008 3:47:38 PM

I had forgotten to put little pointers on the SPX 60-min chart for the notes about the throw-over and throw-under so I re-posted the chart.

Keene Little : 2/21/2008 3:46:43 PM

It's not looking so good with the sharp drop again. One other idea, if the market drops a little lower, is shown on this SPX 60-min chart: Link . If price action since the Feb 13th high is forming a bull flag then support will be found at or above 1330 (so a break below 1336 would not necessarily be a bearish signal).

Jane Fox : 2/21/2008 3:46:40 PM

I traded the ER2 on a 233 tick chart today and, once again, have come to the conclusion it is not the kind of trading I like to do. It was way too fast for me and was not able to do anything else.

The YM on the 377 tick did just fine today. :(

Jane Fox : 2/21/2008 3:42:18 PM

I was real tempted to take counter trend long but decided against it because of the time. Very glad I did.

Keene Little : 2/21/2008 3:36:21 PM

The more conservative long entry is to wait for a break of the downtrend line and see if it does a retest on a pullback (doesn't always do the retest). That is oftentimes a safer way to enter a trade rather than picking a bottom.

Linda Piazza : 2/21/2008 3:34:44 PM

The SPX hasn't been trading in accordance with the 15-minute 9-ema, so I'm going to watch the 30-minute version. It's at 1348.78, important to watch for potential resistance on 30-minute closes.

Keene Little : 2/21/2008 3:34:33 PM

A rally back above the bounce here near 2:30 PM would say we've found a bottom. In fact a break of today's downtrend line would be a bullish sign (and a bullish trade). The DOW's reversal after the small throw-under has created a buy signal therefore long against today's low is now the right play with a tight stop. Keep your whipsaw losses to a minimum in this environment.

Tab Gilles : 2/21/2008 3:32:51 PM

Weekly EIA Report Link

Jane Fox : 2/21/2008 3:23:18 PM

MACD is not following the market downward so we may be seeing a bottom here. Keep your eye on the VIX and AD line/volume for hints that we have found a bottom. I would not just rely on the MACD but as on piece of the puzzle. Link

Jane Fox : 2/21/2008 3:21:21 PM

This is why I love the VIX and ES so much and why divergences between the two are so important to note. Link

Jeff Bailey : 2/21/2008 3:20:59 PM

03:00 Internals found at this Link

Linda Piazza : 2/21/2008 3:15:39 PM

That was quick, wasn't it? The SPX has hit potential support on 15-minute closes at 1340.22. It's got vulnerability to 1335-1337, but this is another level to watch for potential support. Bears want it to continue finding resistance now on 15-minute closes at the 15-minute 9-ema, but that still has some catching up to do. It's at 1348.11 as I type. When prices outstrip this moving average this way, there's sometimes consolidation while the average plays catchup or a bounce back toward that average.

Keene Little : 2/21/2008 3:13:52 PM

NDX is testing the shorter uptrend line from Feb7th, here at 1766.

Keene Little : 2/21/2008 3:12:38 PM

In the larger NDX triangle, it can drop all the way down to 1730 before it's in trouble (in other words it's still inside its choppy consolidation pattern until then).

Keene Little : 2/21/2008 3:11:32 PM

The DOW has now dropped marginally below the bottom of its triangle pattern. If it turns around and rallies from here it will be a buy signal. If it keeps dropping it could get ugly.

Jeff Bailey : 2/21/2008 3:10:08 PM

TRIN 1.42 ... was 1.10 at 03:00 benchmark.

Jeff Bailey : 2/21/2008 3:09:10 PM

Major should get "whacked" here.

Keene Little : 2/21/2008 3:02:33 PM

Banks are making a new daily low so the broader market might follow. The DOW hasn't quite tested the bottom of its triangle pattern (uptrend line from Feb 11th) so a minor new low could do it for a final low. A long play against yesterday's low near 12228 is a recommended play but then flip around short if that level breaks.

Linda Piazza : 2/21/2008 3:00:47 PM

The SPX is pausing again at the 30-minute (not 15-minute) 120-ema, with the location of that moving average coinciding with other forms of support. Bears need to see sustained values beneath the current low of the day, 1344.67, before they have confirmation that the SPX is rolling down from a resistance test near 1349-1353. Until then, it's just consolidating beneath that resistance.

Linda Piazza : 2/21/2008 2:44:55 PM

The retest of the SPX's 120-ema, the central basis line that I use for my nested Keltner charts, has held as resistance, at least temporarily. If that's confirmed by a drop to a new low of the day and a 15-minute close below about 1344.40, then a potential target near 1338-1340 has been set. So far, there's no confirmation, and the SPX just consolidates, but on a Keltner basis, that downturn looks possible, at least.

Jane Fox : 2/21/2008 2:42:12 PM

The VIX and S&P futures are in sync today so look for divergences now. Link

Linda Piazza : 2/21/2008 2:28:16 PM

If you study an intraday chart covering the period from 2/12 through today, you see prices rolling up toward 1367 and down toward 1340 or so and then doing it all over again. Right now, the SPX is near the middle of that rough range. And, as might be predictable when a long period of consolidation--even if it is wide consolidation--sets up, Keltner channels are aligning with that potential support and resistance. As I type, it looks slightly more likely that the SPX will move down toward 1340 than that it will climb toward 1364, Keltner support and resistance on the 15-minute chart, but that will change if the SPX is able to maintain 15-minute closes above about 1353. And then maybe it will change again.

Linda Piazza : 2/21/2008 2:20:50 PM

The SPX's 15-minute 9-ema is now at 1349.63, with more potential resistance extending up to 1352.80.

Keene Little : 2/21/2008 2:02:53 PM

I show a little more upside potential for gold's rally--the April contract would hit resistance at the top of a potential rising wedge near 965 (but could fail at any time). I'm also watching MACD to see if it stops at the downtrend line showing bearish divergence against the January high: Link

Linda Piazza : 2/21/2008 1:59:16 PM

This SPX 1346-1347 support zone is still holding. I know that the SPX has dipped lower than that, but when I'm watching on a Keltner chart, I'm looking at the close of the 15-minute periods, and so far, they're closing at or in that zone.

If the SPX bears can't break that support soon, then the SPX is likely to climb up to test resistance again. If so, watch the 1350-1352 zone for potential resistance on 15-minute closes. If the SPX breaks through that support, watch the 1335-1339 zone for potential next support.

Keene Little : 2/21/2008 1:57:42 PM

The US dollar continues to look like it too is stuck inside a sideways triangle consolidation pattern. This one, if it plays out into March, will set up another leg down to finish its decline, perhaps around 72, and then set up a rally into the end of the year. It will be interesting to see how the commodities trade in relation to the dollar (there's been a slight disconnect lately). Link

Jeff Bailey : 2/21/2008 1:54:16 PM

30-minutes ago ... GLD was trading right here $93.38.

Jeff Bailey : 2/21/2008 1:51:00 PM

GG $40.02 +2.32% ...

Jeff Bailey : 2/21/2008 1:50:30 PM

Swing trade long raise stop alert! ... for the 1/3 position in the StreetTracks Gold (GLD) $93.47 +0.24% ... to $92.90 (from $91.29).

Keene Little : 2/21/2008 1:50:09 PM

Correction to my last post--two equal legs up for the DOW would obviously be 13400, not 12400 as I typed.

Jeff Bailey : 2/21/2008 1:48:53 PM

US Dollar Index (DXY) Alert! 75.50 (30-minute delayed) ... this is the backfill of gap.

Linda Piazza : 2/21/2008 1:42:16 PM

OEX bears, if you haven't done so already, be sure to put in place a profit-protecting plan in case of a test of 615-617, as there are several types of potential support converging in this zone. These days, traders are often given only moments to react, so know how you'll react if that zone is tested. We won't know until it is tested, if it is, whether it will hold or not.

Jeff Bailey : 2/21/2008 1:41:44 PM

Swing trade long alert! ... for 1/3 position in the UltraShort Energy (DUG) at the offer of $40.16. Stop goes $37.90. Target $44.50.

Keene Little : 2/21/2008 1:40:36 PM

If the DOW does find support near 12270 and launches another rally leg from there, two equal legs up from the January low is near 12400 and would be closer to the top of the little parallel up-channel I have on the daily chart. So a better representation of the potential rally leg (in pink) is on this chart: Link

I don't have the Fib retracements on the chart (it's messy enough without adding that) but a 62% retracement of the Oct-Jan decline is at 13223 and crosses the downtrend line from October at the end of the month so that would give us an upside target zone of 13220-13400. Certainly worth the risk in trying a long if support holds (soon).

Linda Piazza : 2/21/2008 1:40:10 PM

Bears, if you haven't done so already, be sure to put in place a profit-protecting plan for a test of SPX 1335-1339, as there are several levels and types of potential support in that zone.

Jeff Bailey : 2/21/2008 1:39:41 PM

Prudhoe Bay Trust (PBT) $82.37 -2.42% ... probes 80.9% conventional.

Keene Little : 2/21/2008 1:31:36 PM

Keep in mind that the market may be close to finding support for a big rally leg. I showed the NDX chart with a sideways triangle playing out into the end of the month followed by a decline into March. But there's a short term bullish pattern that could be playing out--a shorter term sideways triangle that could be setting up another rally leg to equal the one off the January low. This DOW 60-min chart shows how it could be setting it up (in pink): Link

Support should be found above the last low at 12229 for this bullish setup. The bottom of the triangle is near 12270 but price could do a little throw-under finish. On the daily chart the pink wave count shows a rally up to the downtrend line from October, near 13300: Link . That's a 1000-point rally from here and would obviously be a great trade. It's worth taking a nibble at it if support holds near the bottom of the triangle.

Linda Piazza : 2/21/2008 1:29:33 PM

Here's the test of the 1346-1347 level on the SPX. This should be important support, as it represents the best-fit version of the triangle's bottom trendline. (Another version, incorporating yesterday's lower candle shadow, is lower.) Since a break of this potential support, if it occurs and is not immediately reversed, could be considered serious, traders should be aware of the possibility of a sharp drop, perhaps at least to Keltner support at 1339.01 if not to yesterday's low. Bearish traders should be aware of the possibility of support near 1339 if the 1346-1347 level breaks.

For now, if I were in bearish trades, I'd be watching how the SPX behaves with respect to the descending 15-minute 9-ema, with that average now at 1352.

Jeff Bailey : 2/21/2008 1:15:55 PM

01:00 Internals found at this Link

Keene Little : 2/21/2008 1:13:29 PM

Last night I showed the daily chart of the silver fund, SLV, and pointed to a Fib target of 179.22 that could give us a little throw-over above its rising wedge for a finish to its rally. Today's high was 179.23 (not bad) and today's close will be important. If it closes below about 177.50 it will look like the throw-over finish and create a sell signal here. Link . The chart of the May contract looks essentially the same: Link

Linda Piazza : 2/21/2008 1:11:56 PM

The OEX is looking weaker again than the SPX, but it's consolidating near 621.60, a support level from yesterday afternoon and near 621.50, Keltner support on the 30-minute Keltner chart. If the OEX should begin closing 30-minute periods beneath 621.50, it will have set a potential downside target near 616-617. I'm leery of targets these days as both upside and downside ones are set and then never met, but do assess how your trades would behave in light of potential vulnerability to that level.

Linda Piazza : 2/21/2008 1:06:54 PM

We're having the requisite consolidation at support that I mentioned we'd likely have. What happens next? The 15-minute chart suggests that if the SPX loses the support at about 1351.90 on 15-minute closes, then it might drop toward 1346-1347. I'd want to see that lost support confirmed by a move below about 1349, however, before I believed it too strongly. Actually, a lower target would be set, but several other charts show potentially strong support in that 1346-1347 zone, so I'd be aware of that as potential support. One level of support in that general area comes from the big triangle forming on the SPX's daily chart.

Remember that it's also possible that the SPX will pop higher after this support test.

Jeff Bailey : 2/21/2008 12:38:10 PM

EIA Weekly Gross Inputs, Crude Oil Inputs, Refinery Op. Capacity, Pct. Utilization, USO at week's end, Days Supply Crude Table that I keep Link

On the fundamental side, I have not been able to keep track of just how much capacity has been taken off line due to refinery issues outside of normal maintenance. Pct Utilization very low.

Jane Fox : 2/21/2008 12:35:32 PM

Internals are talking now. The bears are in control. Link

Jane Fox : 2/21/2008 12:34:27 PM

AD line is a bearish -816 and making new daily lows.

Keene Little : 2/21/2008 12:22:53 PM

The drop to a new low here could be finishing the 5th wave for the move down from this morning's high. That could set up a bounce to correct the decline before heading lower again.

Linda Piazza : 2/21/2008 12:21:29 PM

We didn't have chopping around near resistance as long as I thought we might have on the SPX (11:53:36 post) although I guess it did last through two 15-minute periods. The SPX is now dropping toward the 1349-1352 support level, however, and I thought we might also get 15-45 minutes of consolidation near or just under that support level before we know next direction. As I suggested earlier, those in current positions should know that it's possible we won't know the ultimate direction until after that consolidation, if it occurs. It sometimes occurs after that support appears to be broken, then then the SPX goes sideways instead of continuing to fall. Just keep it in mind as a possible scenario.

Keene Little : 2/21/2008 12:10:20 PM

This daily NDX chart shows the sideways triangle playing out and calls for it to continue into the end of the month before heading lower again (dark red): Link . From the new low in March (could be right around opex) this pattern would then call for a rally into April/May to correct the October-March decline.

Linda Piazza : 2/21/2008 12:06:43 PM

As many of you know already, I mainly trade credit spreads, and these days, it's my practice to close them out as soon as I can lock in 60% of my original profit (the credit I took in). This morning, I was able to close out another of my spreads, 25 contracts of SPX MAR 1530/1520 bear call spreads. I don't always do full condors these days, although I do some, but out of the original 70 contracts of MAR bear call spreads on various indices and 38 contracts of MAR bull put spreads on various contracts, I'm out of all but 15 MAR SPX 1130/1130 bull put spreads. I've got an order in to get out of those, too, without any takers as yet.

Why do I mention this? Not to strong arm anyone into following my example. Not to present myself as an expert. As I've proclaimed from the rooftops, my trading goal of finding a workable exit strategy last year led me to a failed attempt in the summer to hedge an in-trouble credit spread, a miserable attempt that lost all my carefully gathered profits for months previous to that attempt, so I'm far from presenting myself as an expert. However, my search that started as an effort to find an exit strategy when credit spreads weren't working led me to discover that I was considering only half the equation. I could exit when they were working, lock in my profit and lower my risk of one of those nasty opex week surprises. I soon discovered that it was often possible to exit weeks before opex, sometimes just days after putting on a credit spread. This method has its drawbacks, with a main one being that if I'm locking in 60% of my original credit, I'm giving up 40% of that original credit. Some traders disagree with that proposal, and that's okay, but others have asked me to write about what I'm doing, so I am. My income has dropped as a result, as I'm no longer letting these just expire worthless. However, this style of trading promotes free breathing and low blood pressure! Also, you can bet there are times when I'm glad that I've long since closed out some credit spread when the index in question zooms toward what had been my sold strike.

Linda Piazza : 2/21/2008 11:53:36 AM

Now it's finally unfolding as I thought it might, with the advdec line pushing up toward about -40 to +150 while the VIX drops down toward 24.40 and maybe even 24.17 or so, and the SPX climbs up to test its 15-minute 9-ema. And the ultimate result? As the charts are set up, a push up toward 1363.50-1366 looks about as likely as a drop toward 1349-1352 again. If I had to make a prediction, I'd predict some chopping around for the next 15-45 minutes near resistance, but then maybe another drop toward that 1349-1352 support and some more chopping around before we know the final direction. However, if you've glanced at charts lately, you know the folly of making any prediction. That's just the scenario against which I would be testing the action if I were in a short-term trade.

Jeff Bailey : 2/21/2008 11:30:56 AM

DXY updated daily interval chart Link

Some, but not all ... will see the gap and understand it regarding gold and silver.

Jane Fox : 2/21/2008 11:30:17 AM

The Russell 2000's head and shoulders has not yet confirmed and if it does not confirm soon the sideways price action you are now seeing will negate the pattern. Link

Linda Piazza : 2/21/2008 11:26:45 AM

The advdec line is continuing to drop, having fallen straight through the potential support that I'd mentioned earlier. At -453 as I type, it does appear to be atempting to steady but it's got a potential downside target near -900, and it's looking much more bearish on a Keltner outlook than are the SPX and OEX. The chart setup suggests a pop up toward about -40 to +150, perhaps bringing the SPX higher with it, but with the advdec line then perhaps rolling down again. However, this chart and the VIX's are looking much more bearish for equities than are the SPX and OEX charts themselves, so I'm wondering if there might be more underlying weakness gathering than is apparent on the price charts.

Keene Little : 2/21/2008 11:26:15 AM

I forgot to add the more likely price path over the next couple of days (shown in black): Link

Jane Fox : 2/21/2008 11:25:53 AM

SPX is not making any bold moves in the direction of support or resistance. Any of you who are holding SPX Iron condors think this is a very good place to be. Link

Linda Piazza : 2/21/2008 11:22:21 AM

The SPX's 15-minute 9-ema is now at 1357.43 and is possible resistance on 15-minute closes. At least, that's what bears hope. For the OEX, that average is at 625.05. The VIX is not yet dropping toward 24.17-24.40, however, and is at 24.55. I had expected it to pull back toward its 15-minute 9-ema as the SPX and OEX rose toward theirs. Hasn't happened yet. Hmmm.

Jeff Bailey : 2/21/2008 11:19:07 AM

"Bailey Wave" lower channel on the DXY is 75.56. Looking for a test of it, perhaps violation for a "d 3" to 75.25-ish.

GLD lurch to target, then an inverse wave move.

Keene Little : 2/21/2008 11:17:30 AM

The SPX 30-min chart shows how price has been oscillating about the 100/130 moving averages, normally good moving averages to watch for support and resistance. It just shows how choppy price action has been and why it's been a tough trading environment for the past couple of weeks with no follow through: Link

The key levels remain 1369 to the upside and 1336 to the downside. In between these levels the risk is continued chop and whipsaw.

Linda Piazza : 2/21/2008 11:16:06 AM

The Fed's weekly figures on outstanding commercial paper are available, and the news isn't good again this week. For the third week in a row and the fourth out of the last five weeks, outstanding commercial paper has fallen. Moreover, the drop has been sharpening. This week, it fell by 17.8 billion while in the last two weeks, it had fallen by 8.6 and then 13.3 billion.

This certainly doesn't tell me that all has been resolved concerning the credit crunch. Outstanding asset-backed paper fell 11.7 billion.

Jeff Bailey : 2/21/2008 11:15:55 AM

SLV $178.83 +1.03% ...

Jeff Bailey : 2/21/2008 11:15:39 AM

GLD $93.89 +0.69% ...

Jeff Bailey : 2/21/2008 11:15:16 AM

US Dollar Index (DXY) alert! 75.81 -0.40% (30-min delayed) ... MONTHLY Pivot here.

Jeff Bailey : 2/21/2008 11:12:56 AM

11:00 Internals found at this Link

Linda Piazza : 2/21/2008 11:08:24 AM

The VIX has jumped well above that 24.16-24.27 level that I was watching earlier. The Keltner setup shows that it may retreat down toward 24.30 again to retest it. Bears want that or 24.16 to hold as support on 15-minute closes if the VIX does retreat.

Linda Piazza : 2/21/2008 11:06:48 AM

The SPX's 15-minute 9-ema has now descended to 1357.47 and is falling quickly. Bears now want that average to serve as resistance on 15-minute closes. The SPX is approaching Keltner support at about 1352, joined by historical support that ranges down to about 1349. The SPX tends to consolidate for a few candles at this support before deciding on next direction, but sometimes it plunges through it and then consolidates near it or sometimes it consolidates at or just above it. Once 1352 is more closely approached, be prepared for a possible 30-45 minute consolidation before the next direction is decided. It's not a promise, but it often happens.

Linda Piazza : 2/21/2008 10:54:14 AM

The USDJPY has been dropping ever since the Philly Fed was released. It's just off its 107.54 low of the day, at 107.60 as I type. This type of decline is normally bearish for U.S. equities, but it's a tricky intermarket relationship and isn't always immediately predictive. Still, be aware that if you're bullish, this is one worrisome sign.

Linda Piazza : 2/21/2008 10:51:04 AM

Potential resistance for the SPX on 15-minute closes is now at the 15-minute 9-ema at 1359.36. If you're bearish, you want that resistance to hold and the SPX to trend down the rst of the day. The trouble is that the 1357-1357 zone is potential support, too, so one is fighting against the other.

Jeff Bailey : 2/21/2008 10:46:17 AM

ACH $47.80 +3.19% ...

Jeff Bailey : 2/21/2008 10:46:01 AM

CHA $76.67 -1.62% ...

Jeff Bailey : 2/21/2008 10:45:41 AM

FXP $90.28 +4.00% ...

Jeff Bailey : 2/21/2008 10:45:21 AM

Swing trade stopped alert! ... on PetroChina (PTR) $149.80 -3.00% ...

Keene Little : 2/21/2008 10:42:41 AM

The 2nd test by NDX of resistance at its downtrend line has failed. This will likely mean a down day from here.

Linda Piazza : 2/21/2008 10:42:29 AM

The SPX sort of clings to its 15-minute 9-ema, but that average is flattening. When that happens, we sometimes see the SPX chop across it while such crosses lose relevancy in predicting the next movement. A sharp drop would be different as it would set the 15-minute 9-ema up as possible resistance and begin turning it lower. For example, if the SPX were to drop quickly toward 1354-1355 . . . and the SPX is dropping as I type, so I'll hurry this. Watch for potential support near 1357-1357.50.

Jeff Bailey : 2/21/2008 10:41:37 AM

Swing trade long raise stop alert! ... for the 1/4 position in shares of PetroChina (PTR) $150.30 -2.66% ... to $149.80 (from $134.00).

Jeff Bailey : 2/21/2008 10:33:40 AM

EIA: Weekly Distillate Stockpiles Down 4.5M Barrels.

Jeff Bailey : 2/21/2008 10:33:08 AM

EIA: Weekly Gasoline Stockpiles Up 1.1M Barrels.

Jane Fox : 2/21/2008 10:32:38 AM

Here are the overnight ranges and as you can see all markets are trading within those ranges. Link

Jeff Bailey : 2/21/2008 10:32:31 AM

EIA: Weekly Crude Oil Stockpiles up 4.2M Barrels at 305.3M.

Linda Piazza : 2/21/2008 10:31:08 AM

I'm still watching the VIX as it challenges that 24.16-24.27 resistance. It's at 23.96 as I type. Equity bulls want to see this resistance continue to hold on 15-minute closes for the VIX. Equity bears want the VIX to sustain values above that resistance zone.

Linda Piazza : 2/21/2008 10:29:40 AM

Keltner outlook on the advdec line: the setup now shows that if the advdec line can't maintain values over about 650, then it has a downside target near 200. It's at 537 as I type.

Jane Fox : 2/21/2008 10:29:05 AM

AD volume is heading up (middle chart) but the AD ratio is not so this negates any bullishness I see in the AD volume trajectory.

The VIX is all over the map and of little use today as is the price action.

Difficult day to trade. Link

Linda Piazza : 2/21/2008 10:22:55 AM

You know where to watch for rollover potential: from 1365-1368 on the SPX. Beneath-the-market indicators never got very bearish, so I don't know if such a rollover will occur. Keep watching that rising 15-minute 9-ema to see if it's holding as support, and be forewarned when it stops holding that either consolidation or a pullback may be need. That average is at 1360.86 as I type. I am watching the VIX as it tests a first resistance level from about 24.16-24.26. If it can't get over that, then it may fall toward 23.62 or even 23 instead. It's at 23.98 as I type, still challenging resistance.

Keene Little : 2/21/2008 10:22:43 AM

We've got some buy programs hitting in what looks like an attempt to stop out the shorts in the early spike down. But will it hold? NDX is once again testing its downtrend line.

Linda Piazza : 2/21/2008 10:11:57 AM

I caution that we still don't know what the day's reaction will be. While I personally can't view this as anything to rally markets, we've seen stranger reactions than that. I'm watching various indicators that are at support or resistance, too, so that they're not giving a prediction but rather seem to following price action.

Linda Piazza : 2/21/2008 10:09:23 AM

In my last post, I should have qualified by suggestion of next potential support by saying that was next potential support if the support near 1360 fails to hold on 15-minute closes. It may yet do so.

Keene Little : 2/21/2008 10:09:55 AM

The rally in ES and YM futures off the 4:00 AM low has just about been given up at this point. What a surprise. But the fat lady hasn't sung yet. Price action remains trapped in a tightening coil and it could break either way. Chop and whipsaw remains the environment.

Linda Piazza : 2/21/2008 10:07:35 AM

Next potential support for the SPX is at 1357.01, potential support on 30-minute closes.

Linda Piazza : 2/21/2008 10:06:33 AM

Philly Fed was -24, down from January's -20.9. It had been expected to rise to -10.

Linda Piazza : 2/21/2008 10:04:07 AM

Is the bad news built in? We're about to see. The SPX is testing and bouncing from the 15-minute 9-ema, but will that bounce hold? The 15-minute 9-ema is now at 1360.40 and the SPX bounced found support on it on 15-minute closes all day yesterday.

Keene Little : 2/21/2008 9:52:24 AM

NDX is testing its downtrend line (top of a potential sideways triangle) but so far resistance is holding.

Linda Piazza : 2/21/2008 9:52:14 AM

TRIN and VIX are decidedly bullish this morning, as Jane has probably already mentioned. That can change in a heartbeat after the Philly Fed. These days, it doesn't even need the Philly Fed. How many times lately have you checked under the hood of the markets and found all the indicators going your direction, only to enter a premium trade setup and find everything switching on you?

Jane Fox : 2/21/2008 9:51:27 AM

But it is making new daily lows which is bullish.

Jane Fox : 2/21/2008 9:51:09 AM

My VIX is getting bad spikes again today, which makes it hard to use as an internal.

Linda Piazza : 2/21/2008 9:48:31 AM

SPX zoomed past the 15-minute resistance and is now at the resistance on the 30-minute chart, with that at about 1367.40 and the SPX at 1367.22 as I type. Of course, the SPX also tests yesterday's early 1367.28 high of the day and last Wednesday's 1369.23 high. It's likely being parked near resistance ahead of the Philly Fed, but we won't know until after that release whether it's going to roll over at this resistance or zoom through it. If you're in bullish trades and have a bit of profit under your belt, evaluate whether you want to risk it or risk all of it into the Philly Fed.

Note: as I typed, the SPX fell back to 1365.96.

Linda Piazza : 2/21/2008 9:43:13 AM

The SPX has hit that Keltner resistance during this first 15-minute period. That first 15-minute period has not yet concluded, of course, and I'm not sure how much its results will matter ahead of the Philly Fed anyway. The OEX has also hit comparable Keltner resistance, at about 629 for the OEX, with the OEX at 628.71 as I type.

Jane Fox : 2/21/2008 9:40:23 AM

AD line got to a high of +949 but is not at +843.

Linda Piazza : 2/21/2008 9:34:45 AM

Keltner outlook on the advdec line: The advdec line is climbing this morning, but climbing into potential resistance near +1100. It's at +922 as I type.

Linda Piazza : 2/21/2008 9:31:16 AM

Potential Keltner resistance for the SPX is at 1363.37-1364.31. Remember the Philly Fed at 10:00 am ET.

Keene Little : 2/21/2008 9:28:26 AM

Equity futures did another one of those "manufactured" rallies off the lows just before 4:00 AM. I say manufactured because of the steady climb off those lows and I've seen this too many times as an effort to get the market to gap up but then gets sold into after the cash market opens.

Futures have pulled back a little except techs--NQ has held onto most of its gain so watch to see if NDX can jump above its downtrend line from Feb 1st, currently near 1805. A rally above that could see last week's high at 1824 tested next. Techs should lead the way whichever way this market is headed next.

Jane Fox : 2/21/2008 9:27:56 AM

6.0 earth quake in the Las Vegas area - just heard on one of my trading services.

Jane Fox : 2/21/2008 9:26:55 AM

The futures chart I use for Gold goes back to May 2001. This break out is a new high on this chart. Link

Jane Fox : 2/21/2008 9:24:03 AM

I will be trading the Russell 2000 futures today (ER2) on the 233 tick chart. I did some backtesting over the last few days and have come to the conclusion this is the better timeframe. Unfortunately though it is faster so requires more concentration and the Russell will always add more risk to each trade.

Jane Fox : 2/21/2008 9:21:51 AM

Overnight all markets broke their previous day highs and have followed the same pattern with no glaring differences.

I suspect the AD line will open above +1000 or at least it will not take long to get there. Link

Jane Fox : 2/21/2008 9:16:56 AM

Dateline WSJ - The U.S. faces an unwelcome combination of looming recession and persistent inflation that is reviving angst about stagflation, a condition not seen since the 1970s.

Inflation is rising. Yesterday the Labor Department said consumer prices in the U.S. jumped 0.4% in January and are up 4.3% over the past 12 months, near a 16-year high. Even stripping out sharply rising food and energy costs, prices rose 0.3% in January, driven by education, medical care, clothing and hotels. They are up by 2.5% from the previous year, a 10-month high.

The same day brought a reminder of possible recession. The Federal Reserve disclosed that its policy makers lowered their forecast for economic growth this year to between 1.3% and 2%, half a percentage point below the level of their previous forecast, in October. They blamed a further slowdown on the slump in housing prices, tighter lending standards and higher oil prices. They warned the economy's performance could fall short of even that lowered outlook.

Jane Fox : 2/21/2008 9:15:15 AM

Dateline WSJ - WASHINGTON -- The number of U.S. workers filing new claims for unemployment benefits fell last week but remained at elevated levels consistent with softer labor markets. Claims lasting more than one week rose to more than a two-year high, suggesting idled workers are staying unemployed longer.

Initial claims for jobless benefits decreased by 9,000 to 349,000, after seasonal adjustments, in the week ended Feb. 16, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected an increase of 1,000. However, the previous week was revised up by 10,000 to 358,000.

The prior-week revision was due to a larger-than-expected increase in claims from California than first estimated, a Labor Department analyst said. There were no unusual factors in the latest week, the analyst said, though California had a holiday-shortened week due to its observance of Lincoln's birthday as a holiday in addition to Presidents Day, which the rest of the country celebrates

Jane Fox : 2/21/2008 9:14:12 AM

Economic reports for today include:

10:00a.m. Jan Conference Board Leading Indicators. Previous: -0.2%.

10:00a.m. Feb Philadelphia Fed Business Index. Expected: -12. Previous: -20.9.

Linda Piazza : 2/21/2008 9:09:46 AM

Whatever trading decisions you're making this morning, remember that February's Philly Fed Survey will be released at 10:00 am ET. This release can and often does prove market moving. Assess your willingness to either enter or stay in a current trade ahead of that release.

Linda Piazza : 2/21/2008 8:47:44 AM

The headlines you're going to read on the jobless claims will tell you "lowest since mid-January" and a drop of 9,000 in initial claims. What the headlines aren't telling you is that last week's figure was revised from a previous 9,000 drop to a climb of 1,000. This week's "drop" of 9,000 from that revised-higher figure from last week resulted in a figure that was 149,000, which is 1,000 higher than the previously reported 148,000 from last week. You have to look under the hood with these things.

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