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Jeff Bailey : 3/8/2008 2:56:46 AM

So lets get started with some things. I'm doing this for myself and I'm going to work through a bit of a historical bit of observation. I do this from time-to-time when I find myself perplexed (as I am right now) as I see some sign of recovery, but also some signs that there is more downside in equities to come.

Here is what most of us are interested in. Equites and the economy. I do believe that the S&P 500 (SPX.X) is the best depictor of the broader U.S. Stock Market, and should depict the MARKET'S view of the economy.

If you are NOT INTERESTED in what the MARKET'S view is, then I'll save you some time right now as you don't need to read any further.

A chart of ANYTHING in my opinion is the MARKET'S view. If the MARKET is buying more of anything than it is selling, then price should rise. If the MARKET is selling more of anything than it is buying, then price should fall.

From there, I'll hopefully make some useful observations as to what I (Jeff Bailey) think the MARKET is SAYING.

Let's first review some recent history and the most recent recession and then the expansion.

S&P Depository Receipts (SPY) and WEEKLY INTERVAL bar chart Link

Some important events that changed the world as we live are noted with the 9/11/2001 terrorist attacks and "Operation Iraqi Freedom."

On 1/07/2001 the FOMC lowered its target on fed funds in an unscheduled meeting by 50bp to 6.0%.

Not until 6/30/04 did the FOMC raise its target on fed funds to 1.25% from 1.0%.

Using 21pd, 50pd, 150pd and 200pd Simple Moving Averages, it is notable that some "signals" of decline/contraction (21 below rounding out 50 week of 11/26/2000) and advance/expansion (21 above 50 week of 6/15/2003) observed. There was a brief 2-week period of SPY low closes from 10/10/04 to 10/24/04 that 21pd declined below the 50pd as the SPY saw Friday closes below that SMA cross-over.

The week of 12/07/2003 was in important one for fibonacci traders as the SPY managed to close ABOVE that level.

If I had taken the PINK retracement, but anchored its bottom from the 10/04/1998 relative low, the SPY would have show a close BELOW the resulting 38.2% (inverse of 61.8%) the week of 12/10/2000. Thre "reason" I marked the 9/16/01 low is that the SPY "made sense" during the decline/contraction. YOU can do the same! If you do, add a "-19.1%" and you'll see that all SPY closes, but one (1) were ABOVE the resulting -19.1%.

OK ... let's quickly mark some "dates" as it relates to the TECHNICALS.

3/19/2000: SPY trades another 52-week high of 155.75.

11/26/2000: 21-week SMA below 50-week SMA looks BEARISH. Since SMA's are constantly moving, price benchmark not overly important historically.

03/11/2001 Not marked on the chart, but this may be key as SPY sees its FIRST close below this SMA.

Relative Lows: 3/18/2001 , 9/16/01 and 7/21/2002. Down and up, down and up, down and up like a "wave." Not that important as it turns out, but notable. TOUGH to call/pick tops and bottoms isn't it? You can take a retracement from the 3/19/2000 high to each relative low and watch how the MARKET traded the SPY. Note my "2 level rule" I've taught you. Once the SPY closed ABOVE a level, it should NOT close two levels below. Important for RISK management on closes ABOVE/BELOW 38.2%, 50% and 61.8%.

10/06/2002: The bottom. Is there ANYTHING, another market perhaps, that may have given clues?

03/09/2003: Somewhat important as it relates to a higher low just weeks before ...

6/15/2003: 21-period SMA rises ABOVE a rounding out 50-pd SMA.

Jeff Bailey : 3/8/2008 12:15:38 AM

Closing U.S. Market Watch at this Link

You've probably noticed that I've been providing some focused observations on the dollar index (DXY) and Treasury yields of late, and tonight I want to touch on a couple of things that I'm seeing. As we watch, trade, or invest in equities, I'll try and bring the observations together.

I'm also going to continue to try and help traders and investors better comprehend "waves" and trend of those "waves" using the Andrews Pitchfork (Modified Schiff) that looks like the regression tool many are more familiar with.

As you and I review the intra-day and closing internals, you may have picked up on the steepening of the 5-30 year yield spread. This is a measure I placed in the internals snapshot to try and gather an observation of the steepening, flattening, or inversion of the yield curve.

As you look at today's Closing U.S. Market Watch I've noted today's low in the 13-week Yield ($IRX.X) and the 5-year Yield ($FVX.X). I do wish I had a 2-year Yield observation, but I don't with QCharts.

When I (Jeff Bailey) look, or think about the 13-week Treasury Yield, I think of it like a savings account yield, or a Certificate of Deposit (CD). Something very safe and known for a very short-term duration.

As I step out to 5, 10 and 30-years, I still think "safety," but "greater unknown" the further out in time I observe.

What will the U.S. or world look like 13-weeks from now? What will the U.S. or world look like 5-years from now? What will the U.S. or world look like 30-years from now?

When I look at Treasury Yield, I also ask the question ... "Why would the MARKET buy, or sell an X.XX% Yield?" The answer should ALWAYS address RISK.

For anyone to buy a 13-week YIELD at 1.1%, or 1.565% yield today, they must have felt that was the "best reward" given assessment of RISK they felt they could find.

Market Sentiment: All you have to do is listen to CNBC (Constantly Negative Bear Channel) for a long list of reasons for worry.

OK, that's a bit harsh as they do try and provide some positive commentary, but like any news channel, negative news tends to gather more attention than positive.

I listen, try my best to assess and see if the MARKET believes it by looking at some charts.

If you listen to CNBC, you may have recently caught the blurb on one of their intra-day shows regarding fund manager Garrett Van Wagoner reportedly saying he does just the opposite of what CNBC, or a guest analyst says to do. Here's some history of VanWagoner Funds Link

Just to be clear. I am a STRONG advocate of utilizing CNBC for investment and trading ideas and information. I am a believer in trying to observe and digest as MUCH information as I can possibly take in and assess.

Jeff Bailey : 3/7/2008 10:32:06 PM

Closing Internals found at this Link

OI Technical Staff : 3/7/2008 10:00:00 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 : 3/7/2008 4:37:14 PM

Still not overly certain that dollar weakness is driving oil's price.

On Wednesday, as EIA Oil inventory data was release, DXY was trending higher intra-day, but when stockpile showed big draw, dollar reacted to DOWNSIDE as if it is oil's price driving dollar.

Jeff Bailey : 3/7/2008 4:33:50 PM

So ... DXY up to WKLY R1 and Quarterly 38.2% would be viewed as corrective "Bailey Wave"

Jeff Bailey : 3/7/2008 4:32:03 PM

Per chart at 04:14:43, we can see the DXY came close to trading WKLY R1 back on 2/20 while it was in the now known "bounce wave" channel.

Jeff Bailey : 3/7/2008 4:27:24 PM

Sure looks like computers were set to buy the open based on dollar hitting QS2.

Economic data still suggests further Fed tightening, so I would have to think further bear profit taking in dollar, becomes a "sucker rally" in the dollar and dips in metals and oil get gobbled up.

Keene Little : 3/7/2008 4:15:21 PM

It's an interesting spot where SPX closed today. On the 10-min chart it found support on the mid line of its short-term down-channel from Wednesday's high: Link while finding the mid line of its slightly longer-term down-channel from Feb 27th to be resistance on the last bounce: Link . This will get resolved relatively early on Monday.

Jeff Bailey : 3/7/2008 4:14:43 PM

Could be a humdinger Monday ... DXY juuuust below mid-point of "Bailey Wave" channel.

Fascinating ... 60-minute interval Link

Jeff Bailey : 3/7/2008 4:07:11 PM

Should the DXY finish 73.02, next week's WKLY Pivot levels will be ... 71.65, 72.34, Piv= 73.14, 73.83, 74.63.

Keene Little : 3/7/2008 3:58:40 PM

The SPX 60-min chart shows the down-channel from the Feb 27th high and it's possible we'll see another leg up in the bounce that started near 3:00 PM today. The top of the channel is currently near 1318: Link

Two equal legs up for the bounce off this afternoon's low, if it starts back up from here, would be at 1310 so we've got some numbers to think about for Monday. But the very bearish wave count calls for a smash down kind of Monday so be careful if you're holding long positions over.

Linda Piazza : 3/7/2008 3:56:57 PM

I tend to discount what happens in the last few minutes of a trading day (as I do the first few), as the action tends not mean as much or be as reliable. However, in my 3:34:02 post, I said that the push of the SPX above its 30-minute 9-ema was inconclusive, and that proved to be correct. I think the SPX is actually holding on fairly well this last 30-minute period to its test of that resistance, but resistance it still is. We'll start over Monday.

Keene Little : 3/7/2008 3:44:36 PM

Could it be perceived as a victory for the bulls if the DOW was "only" down 100 points today after a dismal jobs report?

Linda Piazza : 3/7/2008 3:43:58 PM

It's time to start making end-of-day decisions, which are going to be more difficult than usual because the SPX could move big in the last few minutes of the trading day. If the SPX should gain into the close, specifically if it moves back anywhere near 1301-1302, it will have created a doji at the bottom of a decline. Such candles can be potential reversal signals. If you look at the candles produced 1/03 and 1/07, you can see that such candles are not always reversal signals, something particularly important to factor in since the shape of the chart in November and December bears many similarities to the shape of the chart over the last couple of months.

However, in the grand scheme of things, doji days are typically followed by consolidation or else an actual climb. Factor in the weekend's theta-related decay in your options, particularly if they're March options, as well as what might happen to them if the SPX either consolidates (into the FOMC meeting?) or else actually gains.

Jane Fox : 3/7/2008 3:41:21 PM

Here is McMillan's Weekly commentary.

Late last week, $SPX fell after hitting 1390-1400, leaving that area as solid resistance. It then dropped to the 1320 area and bounced a few times, but eventually (on Thursday) that level gave way. Heavy selling developed when it did, and $SPX closed at the lowest price since it was on its way up in September 2006. From the $SPX peak in October (yes, Virginia, the all-time high was made in October -- after the first warning shots about subprime problems had been "fired" in August) to Thursday's close is a decline of 17%. In short, the $SPX chart continues to be negative.

The equity-only put-call ratios rolled over to sell signals -- a condition we warned about in last week's newsletter. The actual rollover to sell signals came after last Friday's broad market decline. This is unusual for these intermediate-term indicators to reverse course so high on their charts, but they were correct to do so. Now, one must wait for new buy signals to set up, and that won't be easy. About the only positive thing that one might say about these ratios is that they are high on their charts, and as such, qualify as being "oversold." However, as we've often said, "oversold does not mean buy. Some of the worse declines come when the market is oversold."

Market breadth (advances minus declines) has been quite negative this week, after generating sell signals at the close of trading last Thursday (Feb 28th). After today's decline, breadth is in official oversold territory. Keeping the above caveat in mind about oversold markets, we will be watching for it to roll over to a buy signal, for it has been a well-timed indicator in the last few months. That rollover to a buy signal will only come after advances lead declines for a couple of days -- something that seems only remotely possible after watching Thursday's slaughter.

Finally, the volatility indices ($VIX and $VXO) have been rather subdued. This is another area where one would expect to see capitulation, but once again it has not been forthcoming. $VIX has moved up towards 28 and that broke the bullish downtrend that had been existent in $VIX. However, with the broad stock market selling off heavily, one would expect to see $VIX well above 28. The two major capitulations -- last August and last January -- came as $VIX spiked up to 38, intraday. Something on that order will likely have to happen again before a true spike peak, intermediate-term buy signal is generated by $VIX. Lacking that, as long as $VIX continues to crawl upward, that is bearish for the stock market.

So, here we are again, entering a major oversold condition in a sharply declining market. The $SPX chart is negative; put-call ratios remain on sell signals; breadth is still on a sell signal, too; and $VIX hasn't gotten desperate, as it likely needs to before a bottom is in place. You know the drill by now: we remain bearish, but expect that sharp, but short-lived rallies could spring up at any time.

Linda Piazza : 3/7/2008 3:34:02 PM

The SPX barely closed that last period above the resistance being tested, with that resistance including the 30-minute 9-ema. I would say that the result was inconclusive as of yet, with the SPX currently still hovering near that support.

Keene Little : 3/7/2008 3:31:37 PM

Any push higher now will be a break of the downtrend lines from Wednesday and could put us into a bounce that will at least make it back up to SPX 1320 area (downtrend line from Feb 27th).

Keene Little : 3/7/2008 3:27:39 PM

It's a sharp spike up but so far it's only a 3-wave bounce and SPX achieved equality in the bounce at 1299. This could be all we'll get.

Linda Piazza : 3/7/2008 3:27:40 PM

We still have a number of minutes left in this 30-minute period so it's as yet unclear whether bulls are going to be able to manage a 30-minute close above the 30-minute 9-ema, but it certainly looks likely. The locus of that resistance I mentioned earlier is near 1295.50. It was going to take strong momentum to get through it, I noted then, and we've received it. A 30-minute close above the 30-minute 9-ema doesn't guarantee that the SPX is going to whoosh higher the rest of the day and never decline again, but it does signal that something has changed because the SPX has not been able to accomplish that task since a late-day push Wednesday afternoon took it above that average. For the OEX, the 30-minute 9-ema is at 598.30 with further potential support near 597.

Keene Little : 3/7/2008 3:26:24 PM

After a little throw-under below the bottom of its down-channel SPX is now attempting to push above the top of its channel near 1301.

Keene Little : 3/7/2008 3:22:30 PM

This morning's rally was good for 180 DOW points so another 180-point rally off this afternoon's low would take it to 12K.

Keene Little : 3/7/2008 3:19:04 PM

After tagging the bottom of its down-channel the DOW has now bounce back above the mid line of the channel so if it continues higher watch for potential resistance at the top near 11970. If it can't hold the mid line, near 11890, and MACD rounds down again below the zero line then it's too early to be thinking long. 10-min chart update: Link

Jeff Bailey : 3/7/2008 3:17:00 PM

03:00 Internals found at this Link

01/22/08 Closing Internals Link

Linda Piazza : 3/7/2008 3:05:04 PM

The SPX and OEX are, as all can see, testing those important 30-minute 9-ema's. Currently, resistance up to 1295.87 looks strong on the SPX, and up to 597.50 on the OEX. The resistance looks firm enough that it's going to require a concerted push to get through it. Is this when that push is going to come? Be prepared, if so. It's not happening yet, but I'm certainly not ruling out an end-of-day rally. Or an end of day push lower, either.

Keene Little : 3/7/2008 3:03:47 PM

We saw a big spike up in the morning as someone tried to save the market and now we're getting another one. Obviously someone is trying to get a short covering rally going and the hard part is figuring out if they're going to succeed.

Jeff Bailey : 3/7/2008 3:02:09 PM

BIX.X 228.28 +0.28% ... battles back to green.

Linda Piazza : 3/7/2008 2:57:01 PM

The SPX's 30-minute 9-ema is now at 1293.83. The OEX's is at about 597.

Jeff Bailey : 3/7/2008 2:54:58 PM

VIX.X 28.79 +4.50% ...

Jeff Bailey : 3/7/2008 2:54:46 PM

VXN.X 30.34 +1.16% ...

Jeff Bailey : 3/7/2008 2:54:29 PM

BOOM $43.11 -19.57% ...

Jeff Bailey : 3/7/2008 2:53:49 PM

Swing trade call alert! ... for one (1) of the Dynamic Materials BOOM March $45 Calls (QCB-CI) at the offer of $1.50. No stop for now. Sell when it gets there.

Jeff Bailey : 3/7/2008 2:44:50 PM

Nymex Crude Closes $105.10/Bbbl on Dollar Stability

Jane Fox : 3/7/2008 2:38:25 PM

Another day where the internals are very clear. Link

Linda Piazza : 3/7/2008 2:34:50 PM

I advised subscribers in last night's Wrap to keep the RUT on their radar screens today, as I know Keene has been doing, too. The RUT was the closest to testing its January low of 650.00. The RUT has so far resisted falling below that low, but on the early bounce this morning, the RUT's underperformance was remarkable. The RUT is at 656.52 as I type, just up from the day's low of 654.62, and I still think the RUT ought to be on everyone's radar screen, but for a different reason. The RUT is now approaching that January low closely enough that brave would-be bulls might decide to start stepping in. I don't know that will happen and I don't know that they'll be successful in stopping the bleeding going on in the markets if they do step in, but I sure want to be watching in case they do. It's just possible that the RUT will continue to lead, either by bouncing sometime this afternoon or else diving beneath that previous low and not bouncing.

Jeff Bailey : 3/7/2008 2:25:32 PM

BIX.X 225.73 -1.26% ...

Linda Piazza : 3/7/2008 2:24:48 PM

I'm just getting back. The SPX's 30-minute 9-ema, now at about 1296.60, has continued to serve as resistance on 30-minute closes, so nothing about the tenor that's been in place since yesterday morning has changed as of yet, but I still caution bears to be watchful for that possibility. Right now, you still have it easy, just following the SPX lower with your stops, but be particularly watchful of the support levels being tested.

For example, the SPX's 15-minute Keltner support has been pushed down to 1286.57, so although it's been pushed lower, it's been holding on 15-minute closes until now. It's currently below that level, testing it. I know that even if the SPX bounces up to hold that support on this 15-minute close, that's not much consolation for those who want markets to climb. However, if that should again happen, it's a sign that bears need to continue to be aware of bounce possibility since the SPX still behaves better than it would it if were breaking down on that 15-minute chart. This whole discussion may be moot, however, if the SPX doesn't bounce back somewhere near 1286.57 by the close of this 15-minute period.

Jeff Bailey : 3/7/2008 2:24:36 PM

SPY $128.80 -1.71% ... probes WKLY S2.

Jane Fox : 3/7/2008 2:23:35 PM

Looks like poor little 'ol Hansel was not able to hold back the dyck. Link

Keene Little : 3/7/2008 2:22:59 PM

The DOW is about to tag the bottom of its down-channel at 11824.

Jane Fox : 3/7/2008 2:22:17 PM

Oh my goodness gracious Crude hit a high of 106.54/bl. It is becoming more and more likely the resistance turned support at $100/bl will hold up on a retest.

Keene Little : 3/7/2008 2:19:08 PM

NDX has marginally broken its January low at 1693 and attempting a feeble bounce so far. It's another slow bleed kind of day. Buyers have gone into hiding but it's not being aggressively sold.

Keene Little : 3/7/2008 2:17:28 PM

Same for the DOW at 11914.

Keene Little : 3/7/2008 2:16:48 PM

With SPX dropping below this morning's initial low of 1291.42 watch to see if it acts as resistance now.

Jeff Bailey : 3/7/2008 2:07:56 PM

VIX.X 28.67 Alert! ... gets a trade at WKLY R1. WKLY R2/MONTHLY R1 in correlation in play.

Jeff Bailey : 3/7/2008 2:06:32 PM

iShares China 25 (FXI) $135.04 -1.09% ... probes Jan lows.

Keene Little : 3/7/2008 2:06:23 PM

SPX is now tagging the bottom of its down-channel just under 1286. If it continues to drop down below the channel then we've got a bearish signal.

Jeff Bailey : 3/7/2008 1:57:44 PM

SPY slips to session low.

Jeff Bailey : 3/7/2008 1:54:55 PM

Day trade short cover alert! ... NLY $14.66

Jeff Bailey : 3/7/2008 1:48:34 PM

Day trade short lower stop alert! for the NLY $14.34 -9.36% ... to even.

DAILY S1 here at $14.30. S2 at 12.75. Pivot marks the high.

Keene Little : 3/7/2008 1:48:10 PM

Here's the first bullish sign for the US dollar that I've seen for a while--a hammer candlestick at support: Link . It would be nice to see bullish divergences on the daily chart to help confirm a potential reversal signal here but the sharp bounce off this morning's low looks bullish so far. This is another factor that has me wondering if we've seen the high for commodities.

Jeff Bailey : 3/7/2008 1:41:41 PM

Day trade short alert! for 1/2 position in shares of Annaly Cap. Mgmnt (NLY) at the bid of $14.66. Stop $15.15. Target $14.00

Jane Fox : 3/7/2008 1:26:52 PM

There is a very good chance the S&P cash index will close below 1300. It is certainly not looking good for the bulls I'm afraid. Link

Keene Little : 3/7/2008 1:24:56 PM

The bottoms of the parallel down-channels from Wednesday that I showed for the DOW and SPX are currently near 11850 and 1287, and of course dropping as the day progresses.

Jeff Bailey : 3/7/2008 1:19:39 PM

01:00 Internals at this Link

Keene Little : 3/7/2008 1:09:03 PM

While gold may have topped at Wednesday's high I'm getting the impression it's forming a small 4th wave correction within the rally off the Feb 15th low. That suggests one more small rally to finish a 5-wave count from Feb 15th and that could be the final rally leg for gold. The GLD chart shows a projection to about 101: Link

If GLD starts to break down instead, a drop below 92 would say we've seen the high. While gold stocks have made slightly higher highs this month they haven't done nearly as well as gold. Oil has rallied to new highs without the oil stocks. The fact that stocks have not been keeping up with the commodity is fair warning to those who are long the commodities right now. There could be a little more upside for commodities but I think that party is about to end.

Jeff Bailey : 3/7/2008 12:57:20 PM

AU $36.40 -1.56% ... was beaten into the mine shaft. Not getting a bounce.

Jeff Bailey : 3/7/2008 12:56:42 PM

As you probably heard last night, S. Africa restoring some power to miners.

Jeff Bailey : 3/7/2008 12:56:02 PM

SWC alert! $17.00 -7.45% ... was hoping to roll the March $20 to April yesterday if SWC traded $22. It didn't.

Jeff Bailey : 3/7/2008 12:47:51 PM

SLV $199.93

GLD 95.87 ~$958.70 spot

Jeff Bailey : 3/7/2008 12:47:11 PM

GBP/USD 2.014

Jeff Bailey : 3/7/2008 12:46:39 PM

USD/JPY 102.56

Linda Piazza : 3/7/2008 12:46:16 PM

I have to leave for an appointment, but hope to be back within a couple of hours.

As I type, the advdec line is attempting a bounce from the strong support level I mentioned earlier. It's not gotten far yet, so the evidence is inconclusive as of now, but it is attempting to bounce.

The SPX's 30-minute 9-ema is now at 1302.46; the OEX's, 601.07. Those will change while I'm gone, but it's easy enough for most people to chart those. Until and unless the indices sustain 30-minute closes above those, it's just continuing the pattern begun yesterday morning, finding resistance on each bounce up to those averages. So, for now, watch for potential resistance on 30-minute closes at those averages, but be aware that there's at least a short-term change in tenor if the indices start producing 30-minute closes above them.

Jeff Bailey : 3/7/2008 12:46:03 PM

EUR/USD 1.5336 ...

Jeff Bailey : 3/7/2008 12:43:21 PM

Swing trade stop alert! ... on the 1/4 bullish in shares of Coeur D' Alene Mines (CDE) $4.71

Jeff Bailey : 3/7/2008 12:37:47 PM

SLV 201.42 +0.33% ... just a rather sour tone for equity in general so far.

Jeff Bailey : 3/7/2008 12:36:57 PM

CDE $4.73 -2.07% ... EUR/USD 1.5333 ... well off high of 1.5462

Jeff Bailey : 3/7/2008 12:34:52 PM

SPY $129.86 -0.92% ...

Jeff Bailey : 3/7/2008 12:34:37 PM

Court Rules On Celebrex

DJ- A federal appeals court threw out one of three patents on Pfizer Inc.'s (PFE) wildly popular painkiller Celebrex, but backed a lowered court decision that ruled Teva Pharmaceutical Industries Ltd. (TEVA) infringed on two others.

The lower court ruled a year ago that Pfizer's multiple patents on the drug did not meet the legal standard to preclude Teva to market a generic form of Celebrex. The drug is currently protected from generic competition in the U.S. until December 2015.

Double patenting allows a proprietor to hold multiple patents - in this case three - on a single invention, usually due as the result of variations incorporated into the invention over time. But the court tossed one of the patents because it wasn't "patentably distinct" from another patent in the case.

Celebrex has been a strong seller for Pfizer at an important time for the company, which has a lean drug pipeline and could see generic competition as early as 2010 for its biggest product, the cholesterol drug Lipitor.

Neither company was available for comment.

PFE $21.41 -0.83% ...

TEVA $47.34 -0.85%

Keene Little : 3/7/2008 12:34:32 PM

The DOW's 10-min chart is a good example of how to use MACD and the zero line--as long as MACD is unable to climb back above the zero line it remains bearish. Conversely, a climb above the zero line will help confirm a change in trend. Link

Keene Little : 3/7/2008 12:26:31 PM

I showed the RUT daily chart this morning with a bearish wave count that calls for a 5th wave down, for the decline from October, with a downside target near 625. A similar chart for NDX shows the downside projection for NDX is near 1550. That would then set up a large bounce into May, perhaps back up to 1900: Link

I want to keep another possibility in mind because of the potential for a decline over the next month or two that could be much more severe. Using the SPX daily chart I'm showing how price could stair-step lower to about 1000 by May: Link

From an EW perspective this very bearish potential is entirely possible and I show it so that longer term traders can keep it in mind when making your trading plans (such as selling bull put spreads). At this point, of the two potential bearish wave counts (each shown on the NDX and SPX) I'd say there's an equal chance for either.

Linda Piazza : 3/7/2008 12:18:05 PM

Bears should note that the advdec line is approaching/testing potentially strong support, from the current -820 level down to about -1020. It's of course possible for the advdec line to break this support on 15-minute closes just as it's possible for equities to break through support, but just note the possibility and be watchful of bounce potential if the advdec line should steady here and bounce from this level.

Linda Piazza : 3/7/2008 12:18:25 PM

The OEX's 30-minute 9-ema is now at 601.68. For potential targets and support levels, I'm moving to the 15-minute chart. Those are at 597.60 and 594.51 on 15-minute closes.

Linda Piazza : 3/7/2008 12:18:34 PM

If in bearish positions, your task is relatively easy: you just follow the SPX lower with your stops. However, the 15-minute chart notes possible support on 15-minute closes at 1295.20 and again at 1288.84 on 15-minute closes, so you should have profit-protecting plans in place in case the SPX should bounce from one of them.

The 30-minute 9-ema is now at 1303.75, and you should be aware that the tenor since yesterday morning will have slightly changed if the SPX begins forming 30-minute closes above that.

Jeff Bailey : 3/7/2008 12:09:47 PM

USO $84.03 +0.16% ... either side of WKLY R2

Jeff Bailey : 3/7/2008 12:07:06 PM

PBR $112.50 -0.90% ...

Linda Piazza : 3/7/2008 12:07:10 PM

Keltner outlook on the advdec line: the advance/decline line now looks vulnerable to a drop to -775 and maybe even -888 to -1020. It's at -643 as I type. The drop isn't a given, but is now more of a possibility.

Jeff Bailey : 3/7/2008 12:06:26 PM

DJ- Crude Tops $106, Sets Record In Choppy Trading

Jeff Bailey : 3/7/2008 12:04:58 PM

It has gotten quiet. Very quiet. Almost too quiet.

Jeff Bailey : 3/7/2008 11:55:39 AM

DXY's bounce so far has been 73.16. "Peek-a-boo" at WKLY S2 and mid-point of Bailey Wave

Linda Piazza : 3/7/2008 11:53:42 AM

As might be anticipated by the equity action, the advance/decline line has dropped through support. It's been dropping down to test its 15-minute 9-ema. That's at about -530 with the advdec line now at -585. The drop is deeper than is preferable for those who want markets to steady, and if it can't steady near its current level, it's vulnerable to another test of the basis line, with support surrounding that basis line at about -900 to -1050.

Linda Piazza : 3/7/2008 11:48:34 AM

The potential Keltner support on 30-minute SPX and OEX charts held again on the last 30-minute close, but now both are dropping deeper into the possible support zone. The 30-minute 9-ema's are now at 1306.44 for the SPX and 602.80 on the OEX. As I've said all day, until and unless there are sustained 30-minute closes above this benchmark, we're really not seeing any change in tenor yet.

For potential downside targets, I've turned back to the 15-minute chart. The potential targets (and support) are 1294.32 and then 1289.47 for the SPX and 597.59 and 594.77 for the OEX. Remember that this 30-minute period has not yet concluded and the SPX and OEX could bounce back above the 30-minute support again by the end of this period. Those are higher than the current levels.

Keene Little : 3/7/2008 11:34:53 AM

Like the DOW, the SPX 10-min chart shows a parallel down-channel that price briefly broke below this morning. Price tried to find support at the mid line of the channel and the trend line along the lows since Wednesday (what I thought was the bottom of a descending wedge yesterday) but just let go: Link

This morning's bounce is just a 3-wave move and therefore suggests just a correction. Whether it turns into a larger correction or heads immediately lower from here is difficult to determine. If we do get another low I'll be watching for some bulllish divergences (or not) to see if we'll get a setup for a larger bounce.

Bottom line is this market continues to look more choppy than anything else and is whipsawing traders something fierce. But from a larger perspective, and even this short term down-channel, the trend is down and therefore that's the direction you should be looking to trade (or at least don't be looking for long plays unless it's just a quick day trade).

Linda Piazza : 3/7/2008 11:31:39 AM

On the 30-minute Keltner charts, the SPX has potential support from 1297.85-1300 on 30-minute closes; the OEX, 598.28-599.28.

Linda Piazza : 3/7/2008 11:25:23 AM

Keltner outlook on the advdec line: The advdec line dropped back to potential support now from about -475 to -280 on 15-minute closes. It's attempting a bounce from that support now and is at -111. To avoid the appearance of a possible H&S top, it needs to bounce above +200 and sustain values there, and bulls would prefer that it hit a new high. Bears want that support to be lost.

Linda Piazza : 3/7/2008 11:23:28 AM

The USDJPY zoomed all the way up to 103.21. I bet some shorts caught in the upswing helped fuel that climb off this morning's pre-market 101.41 low. Since hitting that day's high, the USDJPY has dropped back sharply to retest former resistance at about 102.68. So far, it's holding on 15-minute closes, with the USDJPY at 102.70 as I type. So far, it's just a retest, but U.S. equity bulls want to see the support hold.

Jeff Bailey : 3/7/2008 11:17:54 AM

11:00 Internals at this Link

Linda Piazza : 3/7/2008 11:06:20 AM

Neither the SPX nor the OEX could sustain values above their 30-minute 9-ema's, so there has not yet been a change in tenor by that measure. Those are now at 1309.26 on the SPX and 603.84 on the OEX. Potential support on 30-minute closes is at 1299.23-1300.44 for the SPX and 598.90-599.45 for the OEX. Bulls would prefer that the SPX and OEX not pull back that far, of course.

As I've been noting, we're still in the what-next period, and it's still not determined.

Jeff Bailey : 3/7/2008 10:58:36 AM

DXY 72.99 -0.01% ... did undercut its QS2 with session low of 72.47.

Jeff Bailey : 3/7/2008 10:57:29 AM

DIA's session low so far has been, been, been $119.21 and QS2.

Linda Piazza : 3/7/2008 10:52:03 AM

The 30-minute 9-ema's are still giving the SPX and OEX trouble. Bulls don't want to see these indices knocked back too strongly now that those averages have been pierced. Remember that this is a benchmark for a slight change in the tenor and that I don't really think bulls will know much until and unless the SPX and OEX can sustain 30-minute closes above them. They're at about 1311.10 for the SPX and 604.62 for the OEX.

News has been dire, so bulls should always be ready for the next rollover, but I think bears have as much need to be watchful because if this bounce gets too high, then it's going to eventually catch fire. I've been saying all morning that the dip was expected (and mentioned in my Wrap last night) and the bounce was expected (and mentioned as a possibility in my Wrap last night) but after that is where we begin to get answers, and we're still in the "after that" period.

Linda Piazza : 3/7/2008 10:47:13 AM

The SPX looks as if it will close this 15-minute period well above its 15-minute 9-ema, now at 1308.26. It's also above the 30-minute version, but with about half that 30-minute period still ahead. Bulls want to see values sustained near this high of the day. Next potential Keltner-style resistance is at about 1316.40-1317.30 on 15-minute closes.

For the OEX, that next potential Keltner-style resistance is 606.80-607.10.

Linda Piazza : 3/7/2008 10:44:46 AM

The advance/decline held support (approximately) and has now hit a new high of the day while the SPX is also doing so. It's now got a potential upside target above 1100, but realize that's potential resistance, too. It's at 450 as I type.

Linda Piazza : 3/7/2008 10:38:29 AM

No SPX and OEX close above the 15-minute 9-ema's at the end of the last 15-minute periods, but both are trying again. In general, this action is encouraging to those who want markets to steady, but I wouldn't call it conclusive yet.

Keene Little : 3/7/2008 10:32:50 AM

Here's the DOW 30-min chart for my previous post: Link

Keene Little : 3/7/2008 10:31:40 AM

Having trouble getting the DOW 30-min chart posted. Should get it soon.

Keene Little : 3/7/2008 10:29:04 AM

The DOW's 30-min chart shows a potential wave count that calls for a continuation lower now. This morning's bounce could be part of a small correction within the leg down from Wednesday's high and then we'll see a continuation lower into an afternoon low (11800-11850) projection.

While Wednesday's high is a key level that would negate the bearish wave pattern for now, a rally above yesterday afternoon's high would be a heads up that something more bullish is underway. Until that happens I think we'll see lower lows.

Linda Piazza : 3/7/2008 10:26:39 AM

The SPX is pushing tentatively above the 15-minute 9-ema, although this 15-minute period has not ended yet. That moving average is at about 1307.65 as I type. For the OEX, it's at about 603. The 30-minute 9-ema's appear to be giving both indices some trouble. The SPX's is at 1311.43, and the OEX's version is at 604.62. So far, so good, but both the SPX and OEX need to sustain 30-minute closes above those 9-ema's before the tenor even begins to change. Until then, this is just a resistance test.

Linda Piazza : 3/7/2008 10:14:56 AM

You know what's struck me lately? Perhaps some of you remember all the references to "not since 2000" we were getting for a while in economic numbers, in setups, etc. Lately, I've been hearing a few "not since 2002 or the spring of 2003" references when numbers show weakness and they're being compared to a previous number. For example, yesterday we got a "not since late 2002" number when the Federal Reserve revealed the first decline in total wealth in its household net worth figure. The talk is getting more dire. The contrarian in me is getting interested. I'm still a believer in the "we need to retest" theory and I think, in fact, that it could be grim when we do so. I do not believe we've yet had the kind of panic selling we need to have, but I'm just . . . interested. If references and comparisons to early 2000 were scary and somewhat predictive, then perhaps we ought at least to be paying attention, preparing our what-if plans. I do not believe that the next bounce will signal the bottom has been seen, but perhaps it's time to start thinking about whether the next decline will.

Keene Little : 3/7/2008 10:10:26 AM

Notice that the key level for the pink wave count on the daily RUT chart is 688, Wednesday's high. That high cannot be violated in order for the dark red count to hold (which is true for all the indices). As long as Wednesday's high holds this market remains bearish. If it breaks then there is the possibility we'll see another rally leg like the one off the January low. Hopefully that will help some of you in longer term trades with your planning.

Jeff Bailey : 3/7/2008 10:09:52 AM

Should be filled ... BOOM $45.47 -15.16% ... QCB-OJ $5.30.

$4.90 x $5.80

Linda Piazza : 3/7/2008 10:08:43 AM

The SPX is testing that 15-minute 9-ema. So far, it's held as resistance, at least on that last 15-minute close. Bulls would prefer that the SPX consolidate near this moving average rather than fall back sharply. They would prefer in fact that support on 15-minute closes be found at potential Keltner support at 1306.10 or, failing that, at the support at 1300.64. For OEX traders, the 15-minute 9-ema is now at 603.10. The potential support on 15-minute closes is at 601.70 and 599.48.

Keene Little : 3/7/2008 10:06:06 AM

It looks like a big effort to save the market this morning (PPT?). The move down from the end of February has the potential to be the 5th wave in the decline from October. I've been regularly showing that possibility on the NDX daily chart. Since the RUT is the closest to testing the January low I thought I'd show its daily chart for the two potential wave count possibilities: Link

If support holds, the pink count shows another rally leg that could match or exceed the leg up off the January low. The downtrend line from October is up near 745. Nice rally if we get it. The dark red count shows a break of the January low and down to about 625 for wave 5. From there we'd be due a larger upward correction of the October-March decline, probably into May or June.

So in either of those two cases we're not facing a super bearish possibility here. While the pink wave count shows the most bullish potential in the short term, it would set up the big bearish leg down sooner than the dark red count.

Linda Piazza : 3/7/2008 10:03:29 AM

Keltner outlook on the advdec line: Bulls got their wish as the advdec line pushed above about -1050. It's now at +46.00, now testing potentially strong resistance on 15-minute closes at -250. It closed the 15-minute period above it, but barring the kind of zoom-all-day kind of day when shorts are surprised and forced into covering all the way up (which could be what we get), the normal expectation would be a pause or an actual pullback here. If there's a pullback, bulls want support at -250 to hold on 15-minute closes. They don't want a strong rollover in the advdec line. Next potential resistance and possible target is +1000.

Linda Piazza : 3/7/2008 9:59:22 AM

The SPX's and OEX's 30-minute 9-ema's have been more reliable benchmarks lately than their 15-minute counterparts, but that doesn't mean that the 15-minute ones shouldn't be watched. Right now, they should be watched a potential resistance on 15-minute closes. For the SPX, it's at 1308.16; for the OEX, 603.31.

Jeff Bailey : 3/7/2008 9:58:11 AM

Swing trade put exit alert! ... for the one (1) Dynamic Materials BOOM March $50 Put (QCB-OJ) at the bid of $4.70.

BOOM $46.17 -13.61% ...

Linda Piazza : 3/7/2008 9:57:12 AM

RUT buyers stepped in ahead of the retest of the January low. That's good, as far as it goes, but the RUT's bounce attempt has been uninspiring as yet. It needs to get higher.

Linda Piazza : 3/7/2008 9:55:21 AM

Be careful here: the bounce is amazing so far, but really no more than was expected. It's after this that we see what happens. If you're bullish, I wouldn't even begin to breathe too deeply (well, breathe deeply, but you know what I mean) until the SPX produces sustained 30-minute closes above the 30-minute 9-ema, now at 1311.07. Right now, all we have is the de rigueur bounce from support. We expected the downdraft. (At least I did, as per my Wrap last night.) We expected the bounce up to test resistance. It's the rest of it that's murky.

Jane Fox : 3/7/2008 9:54:57 AM

However, VIX is making new daily lows so that has to be encouraging to the bulls.

Jane Fox : 3/7/2008 9:54:30 AM

AD line made a low so far today at -1582 but has climbed to -599. Not what I would call overly bullish.

Linda Piazza : 3/7/2008 9:52:33 AM

For OEX traders, the 30-minute Keltner support is at about 599.80, ranging up to 600.34.

Linda Piazza : 3/7/2008 9:50:17 AM

The USDJPY is now at 102.53, a huge move up from the morning's 101.41 low. As I said earlier, however, it's approaching resistance. If there's a short squeeze, it could of course soar higher, breaking up through whatever supposed resistance there was, but, barring that, it might soon be time for consolidation and/or a retreat to retest support, whatever that might be.

Linda Piazza : 3/7/2008 9:47:52 AM

That SPX 15-minute Keltner support mentioned in my 9:31:28 post, then at 1294.01 but since driven lower to 1293.35, has held on the first 15-minute close, at least. Now we'll see if it's possible that the 30-minute support, now near 1300-1301, will hold on the first 30-minute close. Seemed impossible just prior to the market open, didn't it, but as I said in that early post, what's decided when you're studying charts in saner times sometimes surprises you by actually happening.

So, bears should keep that what-if scenario in mind here with the SPX currently at 1301.31. The real test for us, however, comes with what happens as a result of this bounce. Will it be sustained? That's the real question and what we have to wait to see.

Linda Piazza : 3/7/2008 9:42:48 AM

USDJPY now at 102.39, well off its 101.41 post-Fed/post-jobs decline. It's still climbing, but now climbing into potential resistance near 102.70.

Linda Piazza : 3/7/2008 9:39:31 AM

Keltner outlook on the advance/decline line: Surprisingly (to me, at least), the adv/dec line is not as negative as one would expect. It's, however, of course in the bearish side of the Keltner channels, below the basis line S/R. It's approaching potential support at about -1700, with the advdec line at -1571 as I type. If that support is lost on 15-minute closes, it has the potential to go to about -2000 to -2200, of course dragging equity prices along, too. If it steadies and bounces instead, watch for potential resistance on 15-minute closes at about -1050. Bulls want sustained 15-minute closes above that -1050 level; bears want the -1700 support lost.

Linda Piazza : 3/7/2008 9:35:24 AM

I said last night that all traders should keep the RUT on their radar screens, too, as it might be the first to retest its January low (or bounce from above it as would-be bulls start stepping in ahead of the test. That January intraday low was 650.00. The RUT is at 657.40 as I type.

Linda Piazza : 3/7/2008 9:33:35 AM

The USDJPY is now at 102.25, having recovered far off its premarket low of 101.41. Keep it on your radar screen.

Linda Piazza : 3/7/2008 9:31:28 AM

The SPX currently has a potential downside target of 1294.01 on its 15-minute chart. That's also potential support on 15-minute closes although the support doesn't look particularly strong at this moment since the line slants lower. Futures are currently about 12 points below fair values, so it seems possible that 1292-1294 could be tested early this morning, although there's also significant potential support from 1299.03 (the weekly 200-sma) to about 1301-1302.

Shortly after the market close yesterday, in saner times, I wrote when preparing the Wrap that my best guess for this morning was a punch down sometime this morning and then a bounce attempt. I thought it possible that the 1301 level, short-term support on the 30-minute chart would be pierced in the early downdraft but thought that the SPX could bounce back above it by the close of the first 30-minute period, showing that the support held on a 30-minute close. I think it reasonable to assume that the first downdraft might be low enough to drive that Keltner line lower, too, since they're dynamic, and it might be more in the region of 1299 by the time the SPX gets through its first decline.

Although that seemed to be a possibility last night, it of course seems less reasonable a one this morning, but I've learned through experience that sometimes the what-if scenarios derived in saner times do in fact occur, so I would warn bears this morning to have what-if plans in case that occurs.

The question on everyone's minds is whether the SPX will retest January lows and whether support will hold, if so. I think we have to see the quality of the first bounce to make suppositions about that.

Jane Fox : 3/7/2008 9:29:50 AM

Even though Crude's resistance turned support $100/bl held up on the last test (February 28th and March 4th) I still think a healthy return to about $95.00/bl is needed. Link

Keene Little : 3/7/2008 9:29:29 AM

The DOW's daily chart has been updated with the two possibilities at this point--a drop down to the January low could be part of the move that will see a stong drop through the rest of this month (dark red). Slightly less bearish would be a drop to support at the January low (a Fib projection lands at that level) and then another rally leg up (pink). That possibility should be clearer as we approach that low. Link

Jane Fox : 3/7/2008 9:26:52 AM

On March 5th Gold made a high of 995.20 and that is close enough to $1000 to say this resistance has been tested and a very good reason it is consolidating. The US$ is making new lows so you would think Gold should be making new highs but that $1000 mark will be as hard to break as Crude's venerable $100/bl. Link

Jane Fox : 3/7/2008 9:23:08 AM

On to the charts and once again I will start with the SPX instead of Gold. I heard on NPR yesterday that the S&P made a new 2008 low and I thought heh wait a minute I watch those charts closely and my charts didn't show a new 2008 low so I'm not sure what they were talking about.

In any case the S&P cash index certainly did close below support at 1320 and all bullish bets are off the table. I don't think we have entered a bear market YET but we are close.

You have to take note of the bullish MACD divergence on this chart, it is so obvious. Yes Virginia I am still bullish. Link

Keene Little : 3/7/2008 9:19:08 AM

With the big gap down this morning it's looking like the next move will be back down to the January lows (which is where the banks had already reached and forewarned us).

Jane Fox : 3/7/2008 9:17:46 AM

Stocks reacted to the FED announcement that it was taking steps to add cash to the banking system and the overnight futures rallied. Then the jobs report came out and the futures fell like a rock thus we have both a new overnight high and new overnight low within a very short time. It's possible the Federal Reserve acted on the term auction facility based on the bad jobs figure because it knew before hand it was going to be a bad number and wanted to make sure the reaction was going to be muted. Link

Jane Fox : 3/7/2008 9:08:33 AM

WASHINGTON (MarketWatch) -- The Federal Reserve on Friday announced two new steps to add cash to the banking system.

Despite aggressive actions taken in recent months, a fresh wave of apprehension about the health of the U.S. and global financial markets has swept through credit markets this week.

Banks have already reported tens of billion in losses, mostly via complex securities tied to subprime mortgage loans, and there's concern that more losses are coming. In addition, there are fresh worries about the health of the U.S. economy.

In a statement, the Fed said simply that the measures were needed to address "heightened liquidity pressures in term funding markets." The Fed said it was in close contact with foreign central banks concerning market liquidity conditions.

The liquidity injections are designed to give banks more capital and confidence to lend money to their customers and to each other. Lending is the grease that turns the wheels of the economy. The Fed is worried that a credit crunch would only make the economic downturn worse.

In the first measure, the Fed said it would increase the size of the two Term Auction Facility auctions to $50 billion each, or a total of $100 billion.

Secondly, the Fed said it will initiate a series of term repurchase transactions that are expected to cumulate to $100 billion.

Jane Fox : 3/7/2008 9:02:57 AM

LONDON (MarketWatch) -- The U.S. dollar extended losses Friday on weaker-than-expected February U.S. payrolls data, hitting the latest in a string of all-time lows against the euro at $1.5459 and dropping to its weakest level against the Japanese yen in eight years at 101.41 yen. U.S. non-farm payrolls fell by 63,000 in February, compared to market expectations for a rise of around 20,000. The data heightens expectations for further, aggressive rate cuts by the Federal Reserve.

Jane Fox : 3/7/2008 8:54:39 AM

Dateline WSJ - WASHINGTON -- U.S. recession fears mounted on Friday as employment fell in February at its fastest rate in five years, suggesting that the housing and credit crunch is gripping the broader economy.

The data further support Wall Street expectations for additional Federal Reserve rate cuts when officials meet in less than two weeks and in the months that follow.

Nonfarm payrolls fell 63,000 in February, the Labor Department said Friday, after falling 22,000 in January, which was the first decline in over four years. January's decline was 5,000 more than first estimated. Had it not been for a solid rise in government jobs last month, payrolls would have fallen by over 100,000.

The unemployment rate, which is calculated using a separate survey of households, fell 0.1 percentage point to 4.8%. But that's not a reflection of economic strength. The drop instead was triggered by a 450,000 decline in the size of the labor force, not a rise in employment.

Average hourly earnings increased $0.05, or 0.3%, to $17.80. That was up just 3.7% from a year earlier, suggesting wage costs remain under wraps. Fed officials are counting on the slack that comes from a slowing economy to offset higher energy, food and commodity prices and keep inflation in check.

Wall Street economists had expected no change in payrolls and a 5% unemployment rate. However, some economists had braced for a weaker employment number after a report Wednesday from ADP and Macroeconomic Advisers that attempts to mirror the jobs report signaled a contraction in private-sector jobs last month.

Linda Piazza : 3/7/2008 8:49:24 AM

There's been a big drop in the USDJPY after the jobs numbers (drop by 63,000 for those who haven't heard), immediately preceded by a Fed move to boost liquidity. The two worked together to spook markets and that included the currency markets. I don't need to tell you by now that such a move in the USDJPY would not typically be good for U.S. equities if it persists.

Currently, currency traders are still sorting out their reactions. The USDJPY is now at 101.78, jumping higher from a just-reached low of 101.41. Is it possible that we've just seen the low of this move? It's possible, but not a given. We'll have to watch to see whether dollar bulls step in and drive this currency pair higher because now we've been shown vulnerability to lower levels.

Linda Piazza : 3/7/2008 7:43:39 AM

Last night, the Bank of Japan kept its interest rates steady, as anticipated. As had been hoped by many, the government has also made a nomination for the Bank of Japan's Governor Fukui's successor. Deputy Governor Muto has been nominated, but his approval is not guaranteed due to the political situation in Japan. Meanwhile, the economic outlook for Japan was also downgraded. Worse, prices have risen, but not due to rising consumer demand, which would have the effect of producing growth.

As our central bank has been easing rates and other central banks have been holding steady (or, raising them in a few cases), the dollar has fallen against other currencies. The net effect of last night's actions in Japan and perhaps of lingering doubt about who will take the reins of the Bank of Japan in a month, the USDJPY dropped further last night, hitting an overnight low of 101.79. This overnight low came after the Japanese markets closed and, of course, before ours opened, so is somewhat suspect. I can't discover the time stamp for when the decision was made to nominate Deputy Governor Muto, so I'm not sure how that nomination impacted the action, if it did. Since the USDJPY has since bounced to its now current 102.14, it could be that the USDJPY began to recover off its lows after the nomination was made or it could be that the nomination itself drove the USDJPY lower. I just can't tell, not being able to determine the exact time release.

If you're bullish U.S. equities, or just if you don't want to see our markets crater too far, you'll want to see the recovery from the overnight low continue. If you're bearish, you like the drop in the USDJPY.

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