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Keene Little : 3/14/2008 1:44:10 AM

Friday's pivot tables (will switch to June contracts this weekend): Link and Link

Here we go again. Equity futures are down pretty hard tonight, having dropped sharply just before 11:30 PM (DOW futures down 110 at 1:30 AM). Who knows what they'll be like in the morning. I had hoped we would see a final 5th wave up to complete an impulsive move up from Thursday's low and that's what I'm still showing on the SPX 10-min chart: Link

Because of the multitude of 3-wave corrective moves, up and down, there are several possibilities for where price will head next. If we get the 5th wave up tomorrow (green) watch for resistance around 1337 for a pullback or a continuation lower from there (pink). If we don't get a bounce Friday morning (looking iffy tonight) then a drop below 1307 would be a bearish heads up, below 1296 would confirm it and then below 1282 would negate any potential for even another corrective bounce.

The 60-min chart shows a Fib projection at 1343 for two equal legs up from Monday's low so the 1337-1343 makes for a target zone if we get an early morning rally: Link . Then the decline after that will hopefully provide some clues as to what's next (pullback and continue higher or start the next leg down). This market is a beast to figure out so expect chop and whipsaw until the next direction is confirmed.

OI Technical Staff : 3/13/2008 9:59:59 PM

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Jeff Bailey : 3/13/2008 4:35:59 PM

Closing Internals found at this Link

Jeff Bailey : 3/13/2008 4:10:16 PM

SPY $131.76 +0.30% ... 7 minutes to close.

Jeff Bailey : 3/13/2008 4:08:08 PM

YM 12,143 ... looks about right.

Jane Fox : 3/13/2008 3:59:18 PM

Economic Reports on the Docket for tomorrow include:

8:30a.m. Feb Consumer Price Index. Expected: +0.2%. Previous: +0.4%.

8:30a.m. Feb CPI, Ex-Food And Energy. Expected: +0.2%. Previous: +0.3%.

10:00a.m. Mid-Mar Reuters/U Mich Sentiment Index. Previous: 70.8.

Jane Fox : 3/13/2008 3:57:56 PM

DAteline WSJ - The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month.

"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.

The Commerce Department said Thursday that retail sales tumbled 0.6% in February; sales excluding volatile auto and parts decreased 0.2%. The decline reflected a sharp slowdown in consumer spending, the primary driver of U.S. economic growth, as Americans grapple with high gasoline prices and the credit crunch, as well as drops in home values and other asset prices.

The survey, conducted March 7 through March 11, marked a precipitous shift to the negative from the previous survey conducted five weeks earlier. For example, the economists now expect nonfarm payrolls to grow by an average of only 9,000 jobs a month for the next 12 months -- down from an expected 48,500 in the previous survey. Twenty economists now expect payrolls to shrink outright. And the average forecast for the unemployment rate was raised to 5.5% by December from 4.8% in the previous survey.

Jane Fox : 3/13/2008 3:55:52 PM

Just read that Crude hit $111/bl today but my charts "only" show $110.98. I guess close enough for government work. Link

Keene Little : 3/13/2008 3:53:02 PM

It doesn't look like the bulls are going to be able to do it. SPX 1320 is holding like a brick wall and the pattern for the move today remains a 3-wave bounce, just another in a long line of them. It leaves the price pattern a mess and the next direction up for grabs. This is just one ugly market to trade. Quick scalp day trades is about all it's offering right now.

Linda Piazza : 3/13/2008 3:45:51 PM

No new high yet for the SPX, confirming the bounce off the 15-minute 9-ema. Potential resistance gathers at 1326-1328.20. Bulls would rather see the SPX at least at another new high of the day, if not past that resistance by the close. Traders need to begin making end-of-day decisions. Be aware that with currency markets in disarray, the ongoing upheaval in Japan over BoJ Governor Fukui's successor could impact the USDJPY, and thus, our equities.

Keene Little : 3/13/2008 3:44:01 PM

The bounce in the last hour is not exactly what I thought it needed to be in order to give us a 5-wave advance off this morning's low (kind of choppy). A turn right back down here would look more bearish but a choppy rise to a new high would be fitting for a 5th wave. It would be a good setup for a morning pullback tomorrow and then another rally.

There is a way to consider today's rally as wave-c to complete an a-b-c bounce off Monday's low so that will be the risk in buying the next pullback--it may be more than a pullback and just keep heading south.

Jeff Bailey : 3/13/2008 3:27:14 PM

MSFT $28.78 +0.52% ...

Jeff Bailey : 3/13/2008 3:23:11 PM

YHOO $27.67 -2.77% ... CNBC reporting large block for sale being shopped.

Linda Piazza : 3/13/2008 3:17:00 PM

So far, the SPX's 15-minute 9-ema holds as support. Bulls need another new high. Potentially strong resistance is now near 1328.31 on 15-minute closes, with next resistance at 1337.42. For the OEX, these numbers are 631.05-614.59 and then 618.48.

Jeff Bailey : 3/13/2008 3:13:15 PM

03:00 Internals at this Link

Keene Little : 3/13/2008 3:08:02 PM

If the bulls can push this to another new high in the last hour we'll have a 5-wave advance off this morning's low and that would set up an early morning pullback tomorrow and then a continuation of the rally. But they need to keep it going here and not let SPX drop below 1307 which would negate the 5-wave move up. SPX 10-min chart: Link

Jeff Bailey : 3/13/2008 3:01:26 PM

$/Yen 101.02

Jeff Bailey : 3/13/2008 3:01:13 PM

YM 12,167

Jeff Bailey : 3/13/2008 3:01:03 PM

SPY 132.00

Jeff Bailey : 3/13/2008 2:58:04 PM

USD/JPY 100.92

Linda Piazza : 3/13/2008 2:55:06 PM

So far, the SPX's 15-minute 9-ema has held as support, but there are still a few minutes left in this 15-minute period. That moving average is at 1312.90 as I type.

Jeff Bailey : 3/13/2008 2:54:58 PM

7 minutes to bond market close ... 30-year 44.52

Jane Fox : 3/13/2008 2:51:40 PM

Do you all remember the story of the fellow at the gym with whom I had a bet? This guy said Gold would hit $1000 before it hit $800 and I bet him that Gold would hit $800 before it hit $1000. Do you all remember Gold's dip to $855, just $5.00 shy of my target? Dang thing hit $1000 today so I owe the fellow $5.00. Geesh!!!!

Jane Fox : 3/13/2008 2:48:53 PM

The SPX chart is getting just a little weird. We had a big rally on Tuesday so the little selloff on Wednesday was not out of the ordinary but the trading today does not make any sense at all. The market is jittery and there is no clear leader YET so the market gets pulled, pushed, tossed and thrown and we end of with days that do not make sense, like today. Link

Linda Piazza : 3/13/2008 2:43:15 PM

The SPX's 15-minute 9-ema is currently at 1312.69; the OEX's, 607.25. Bulls want prices to hold near those on 15-minute closes.

Jeff Bailey : 3/13/2008 2:42:19 PM

DIA $121.87 +0.38% ... session high has been, been, been ... $122.35.

Jeff Bailey : 3/13/2008 2:41:10 PM

YM 12,170

Jeff Bailey : 3/13/2008 2:41:01 PM

SPY $132

Jeff Bailey : 3/13/2008 2:39:02 PM

Only sign of weakness in USO is that we have not yet seen a trade at WKLY R2 ($88.23). If hold true tomorrow, would be first week in last 5.

Jeff Bailey : 3/13/2008 2:37:07 PM

USO $87.18 +0.29% ... session low was $86.09. No backtest of WKLY R1 ($85.98)

Jeff Bailey : 3/13/2008 2:36:11 PM

DJ- Oil Futures: Crude Ends Higher, Weak Dlr Trumps Ample Supply

Jeff Bailey : 3/13/2008 2:31:49 PM

Sector Losers Treasuries 5-30 maturity, Utilities -0.61%, Healthcare Providers -0.57%

Jeff Bailey : 3/13/2008 2:31:03 PM

Sector Winners ... Home Construction +5.4%, HMO +3.45%, Gold Bugs +3.26%, Nat Gas +2.83%

Jeff Bailey : 3/13/2008 2:28:59 PM

May suggest market participants find yield unrewarding.

Jeff Bailey : 3/13/2008 2:27:52 PM

CNBC reporting bond auction didn't go well. I haven't see the details.

Jeff Bailey : 3/13/2008 2:26:17 PM

Normalized CME May'08 Regional Housing Futures Link

Keene Little : 3/13/2008 2:25:32 PM

The bulls are trying--so far price is consolidating underneath the 1320 resistance area so if it consolidates and pushes higher again it would be a bullish signal. A drop now back below 1300 would be very bearish (or even back below this morning's high near 1307).

Linda Piazza : 3/13/2008 2:23:25 PM

The SPX's 15-minute 9-ema is now at 1311.46; the OEX's, at 606.96.

Jeff Bailey : 3/13/2008 2:20:37 PM

Will check against our CME Housing futures. LA, San Diego have been hit hard in recent weeks.

Jeff Bailey : 3/13/2008 2:20:04 PM

DataQuick:Median Home Prices In S. California Plunge In Feb

DJ- Median home prices across many of California's most populous counties plunged in February, with Southern California leading the slide with an average drop of 17.9%, according to new housing data released Thursday.

Median home prices fell from a year ago in 15 major counties, DataQuick Information Systems said.

That drove the median price in a six-county area of Southern California down to $408,000. Prices fell 11.6% to $548,000 in nine counties around the San Francisco Bay area.

Home sales also kept sliding last month across the state.

Sales fell 39% from a year earlier in the Southern California counties.

Nine counties around the San Francisco Bay area saw a similar slowdown, as sales dropped 36.7% from February 2007.

Linda Piazza : 3/13/2008 2:09:05 PM

The OEX's 15-minute 9-ema is now at 606.16.

Linda Piazza : 3/13/2008 2:08:44 PM

The SPX's 15-minute 9-ema is now at 1310.11. I mention it because the last few 15-minute candles have upper shadows and that sometimes suggests a pullback to the 15-minute 9-ema's support on 15-minute closes. You see how good the last suggestion was, though, so nothing is certain. If the SPX should pull back, bulls want that 9-ema to hold as support on 15-minute closes.

Linda Piazza : 3/13/2008 2:06:27 PM

The USDJPY is 101.09, having broken finally out of the congestion zone and above the 23.6% retracement of the slide from Tuesday's high into the overnight low. It's approaching a 38.2 percent retracement of that decline. These Fib levels sometimes are important for the USDJPY, prompting a few candles of consolidation at least, when they're hit. This one is at about 101.20.

Keene Little : 3/13/2008 2:03:42 PM

SPX tagged 1320.99, 3 cents above its 1320.96 Fib projection for two equal legs up from this morning's low. Is that it? Will there be anymore rally? Who knows but this is where the bulls now need to make hay.

Linda Piazza : 3/13/2008 2:02:30 PM

As long as the OEX maintains 15-minute closes above the 15-minute Keltner line now at 605.13, it's got a potential upside target of 614.83. However, be aware of potential resistance a little lower, too, at 613.16-613.53. These are 30-minute Keltner and Fib resistance levels.

Linda Piazza : 3/13/2008 2:00:56 PM

Doesn't matter what that doji at resistance "suggested," does it? The SPX climbs higher. Remain aware of potential resistance in the 1324.50 zone, but the 15-minute chart suggests a potential upside target near 1328.21. This will of course be approaching yesterday's high, so bulls should have profit-protecting measures in place for a test of that zone. Of course, I assume you're following the SPX higher with your stops, but what I'm suggesting is that you know whether you intend to take profit in a portion of your position as that zone is approached or other such measures. Sometimes lately, as I've noted before recently, you're given literally seconds to make up your mind, so think about it ahead of time.

Keene Little : 3/13/2008 1:47:27 PM

Stepping out to look at one larger degree in the price pattern, the move up off this morning's low will achieve two equal legs up at SPX 1320.96 (ES 1324.50). That will be an important level for the bulls to plow through in order to improve the odds that this bounce is going to be something more than just another 3-wave move.

Remember too that the SPX 1320 level has been an important support and resistance level since January. I'd look to take some profits off the table if you bought the dip and price appears to stall in the 1320 area.

Linda Piazza : 3/13/2008 1:46:37 PM

A doji at resistance for the SPX's current 15-minute candle suggests more consolidation or else a pullback to support. First support is 1312-1313. Stronger support is back near 1306.

Jeff Bailey : 3/13/2008 1:38:28 PM

YM 12,178 .... oooooeeeee!

Jeff Bailey : 3/13/2008 1:38:08 PM

SPY 132.02 ... 19.1 conventional.

Linda Piazza : 3/13/2008 1:34:22 PM

The SPX was able to push up through that resistance that had been grouped near 1306. It's zoomed right up to potential resistance on 30-minute closes near 1313 with Fib resistance at 1316-1317. Be prepared for the possibility that the SPX could need to consolidate again for a while before it then determines direction again. If it can hold above about 1315, it will be establishing a potential upside target near 1324-1327. Of course, as we well know by now, it can go anywhere it wants, practically, in almost any period in time.

Jeff Bailey : 3/13/2008 1:32:48 PM

30-year overlap with WKLY Pivot 45.19 and PINK 50% at 45.15.

Jeff Bailey : 3/13/2008 1:32:08 PM

YM alert! 12,140

Keene Little : 3/13/2008 1:31:47 PM

No pullback so it means we've got a 3rd wave extension in leg up from the 12:45 PM low. That's bullish and we should see this rally stair step higher now.

Jeff Bailey : 3/13/2008 1:30:42 PM

30-year 44.81

Jeff Bailey : 3/13/2008 1:29:49 PM

YM 12,124 ... would walk a bull stop up to 12,095

Jeff Bailey : 3/13/2008 1:27:59 PM

01:00 Internals at this Link

Keene Little : 3/13/2008 1:24:40 PM

Looking at the 2-min chart, there is now a 5-wave move up from the pullback to the 12:45 PM low (the ES 1298.75 low). We should get a pullback to correct this little rally leg from 12:45 PM and then a continuation higher. You can take profits on your long play and then reenter after another pullback, or wait for the pullback to finish and then raise your stop to just beneath it, your choice. The risk of course is that this is all the rally we're going to get and now down we go.

Jeff Bailey : 3/13/2008 1:18:53 PM

Home construction +2.15% ... challenges for sector winner.

Jeff Bailey : 3/13/2008 1:17:38 PM

RUT.X +1.03%

Jeff Bailey : 3/13/2008 1:16:29 PM

01:00 internals ... NYSE A/D 1,099/1993 with NH/NL 24:202

NASDAQ A/D 1,221/1,588 with NH/NL 33:249.

My screen capture now locked up. Shutting down computer to reboot. Will be back.

Jeff Bailey : 3/13/2008 1:13:00 PM

If still long the YM, I'd walk up a stop to 12,045.

Linda Piazza : 3/13/2008 1:10:12 PM

The SPX has now spent almost an hour of that "hour or so" that I thought it would take before we would know next direction. There's still "or so" minutes to go! Seriously, the SPX has now softened up the resistance overhead and it's heading up to test it as I type. That's now at 1305.83 on 15-minute closes, with further potential resistance at 1310-1313. We still don't know final direction, but we may soon get a better idea of short-term direction.

Keene Little : 3/13/2008 1:10:02 PM

In case this bounce turns into another 3-wave bounce you can reduce your risk on a long play by now pulling your stop up to 2 ticks below the pullback 1300.25, so stop raised to 1299.75.

Jeff Bailey : 3/13/2008 1:09:38 PM

USD/JPY 100.74 ... has also jerked back higher

Jeff Bailey : 3/13/2008 1:09:10 PM

internals coming

Jeff Bailey : 3/13/2008 1:08:35 PM

YM 12,071

Keene Little : 3/13/2008 1:08:19 PM

If you bought the pullback to ES 1298.75 your stop should now be 2 ticks below that, so at 1298.25.

Jeff Bailey : 3/13/2008 1:08:03 PM

internals look bullish ... or not as bearish as one might think

Jeff Bailey : 3/13/2008 1:07:43 PM

30-year 44.53

Jeff Bailey : 3/13/2008 1:07:05 PM

YM Long stopped alert! ... 12,018

Jane Fox : 3/13/2008 1:04:04 PM

It is becoming more obvious that the $100/bl mark will be support now so if/when Crude gets back to $100/bl it may be a good time to get back on board. Link

Jane Fox : 3/13/2008 1:01:01 PM

NEW YORK (MarketWatch) -- Renewed fears of financial turmoil sent the U.S. dollar plunging against the Japanese yen Thursday, and the currency temporarily fell through the psychologically key 100-yen level for the first time in over 12 years.

The dollar also set new all-time lows against the euro and the Swiss franc, and dropped to its weakest level against the British pound since December.

After repeatedly testing 100 yen in Asian dealings and early European action, the greenback broke through to touch 99.75 -- its lowest level since November 1995.

Jeff Bailey : 3/13/2008 1:00:15 PM

YM Long raise stop alert! ... to even.

YM 12,032

Jeff Bailey : 3/13/2008 12:55:01 PM

YM Long alert! ... here at 12,018. Stop 11,995. Target 12,140.

Jeff Bailey : 3/13/2008 12:54:15 PM

Squint ...

Jeff Bailey : 3/13/2008 12:53:36 PM

TYX.X Alert! 44.21

Keene Little : 3/13/2008 12:51:17 PM

An example to look for a potential buying opportunity here, two equal legs down for ES (June) is at 1298.75 (being tagged as I type). If it holds here then buy it, tight stop.

Linda Piazza : 3/13/2008 12:49:33 PM

We're still in that hour or so period (12:10:54 post) that I thought it might take before we know next direction. As I type, we're getting the 15-minute 9-ema test with the SPX at 1298.71 as I type and with that 9-ema a few cents higher. It's just held as the 15-minute period ended, but a drop toward next support at 1296.39 on 15-minute closes looks as likely as another rise toward 1304-1307. This is all part of the chopping around period I expected to see, so I don't yet see a clear next direction. The setup looks more bearish than bullish, but I don't take anything for granted today. If the SPX were to zoom above 1306.63 resistance on 15-minute closes and stay there, and eventually climb toward 1327 or so, I wouldn't be shocked.

Jeff Bailey : 3/13/2008 12:47:27 PM

YM 12,009 ... ditto. As well as WKLY Pivot

Jeff Bailey : 3/13/2008 12:46:44 PM

USD/JPY 100.55 ... slips below 21-pd SMA on 5-minute chart.

Keene Little : 3/13/2008 12:44:21 PM

From the high we got a little sharp drop and now a corrective looking small bounce. It looks like we'll get another leg down and then watch for two equal legs down for a potential buying opportunity.

Jeff Bailey : 3/13/2008 12:38:08 PM

Paulson: Time To Toughen Rules On Mortgage Brokers ... Reuters Story Link

Linda Piazza : 3/13/2008 12:31:30 PM

The USDJPY is now at 100.65. It has achieved a new high of the day and has since pulled back. Like the A/D line, this currency pair's movements today seem to be corroborating or maybe even responding to equity action, but not predicting it as it sometimes does.

Jeff Bailey : 3/13/2008 12:30:58 PM

TRIN 0.92

Jeff Bailey : 3/13/2008 12:26:56 PM

DIA $102.54 -0.70% ... "in the zone" between WKLY Pivot and conventional 19.1%.

Keene Little : 3/13/2008 12:25:49 PM

On the SPX 60-min chart I showed the potential for another rally leg to match the leg up off Monday's low and then a turn back down to new lows. But as shown on the daily chart, keep in mind that we could see a rally back up to the 1380 area as part of a larger sideways consolidation pattern (pink): Link

Considering the possibility that this morning's low was the typical Thursday low before opex, a rally up to the downtrend line from December (near 1350), or a little high to 1380, by next week makes some sense. Price action leaves open several possibilities with no one possibility standing head and shoulders above another so it means you should continue to trade light and be quick to take profits when offered.

Jeff Bailey : 3/13/2008 12:25:08 PM

A "quirky" spot to try and short the YM here in my opinion ... YM 12,035

Jeff Bailey : 3/13/2008 12:23:45 PM

US Senate Tax Cut Vote (update)

DJ- The U.S. Senate voted 99-to-1 Thursday to make room in a five-year budget plan for $341 billion in tax cuts, enough room to extend some, but not all, of the temporary tax cuts enacted in U.S. President George W. Bush's first term.

Senate Democrats then held ranks to vote against an additional $376 billion tax cut, enough room to extend the remainder of Bush's first-term tax cuts. The amendment, offered by Sen. Lindsey Graham, R-S.C., failed on a 52-to-47 vote. Presidential hopeful Sen. John McCain, R-Ariz., voted for those cuts.

Sens. Hillary Clinton of New York and Barrack Obama of Illinois, who are vying for the Democratic presidential nomination, voted against it.

Sen. Olympia Snowe, R-Maine, was the sole senator to break party ranks on the vote, siding with Democrats in opposition to the additional $376 billion in tax cuts.

Sen. John Kerry, D-Mass., did not vote.

The Senate is in its fourth day of debate on the budget plan. A final vote could come later Thursday. Extending all of Bush's tax cuts, which are set to expire after 2010, would cut revenues by roughly $700 billion over 5 years.

Extending other expiring tax breaks which Congress perennially extends will cut revenues another $150 billion.

Republicans said the failure to extend all the expiring tax breaks is tantamount to a tax increase. Democrats said that under the budget additional expiring tax cuts still could be extended, but only if Congress raised revenue to offset the cost elsewhere in the budget. In any case, both sides said the vote would have little impact on tax legislation later this year. They say decisions about whether to extend tax cuts which won't expire until after 2010 won't be made by Congress until the next president takes office. Sen. Max Baucus, D-Mont., sponsored the original proposal to extend the $341 billion in tax cuts - which would increase annual budget deficits in 2009, 2010, and 2011. It would then virtually eliminate annual budget surpluses projected for 2012 and 2013. "Turning surplus dollars into tax relief is the right thing to do," Baucus said. House Budget Committee ranking Republican Judd Gregg, R-N.H., voted for Baucus' extension amendment, but said it "still leaves in place hundreds of billion of dollars in tax increases."

Linda Piazza : 3/13/2008 12:20:50 PM

The SPX's 15-minute 9-ema is now at 1299.33, with further potential support on 15-minute closes at 1296.82. An important Fib level can be found at 1299-1300, too. Resistance looks relatively firm right now, extending up to 1306.14 on 15-minute closes. The setup looks as if it will take either a strong whoosh through that resistance or else some time spend pummeling it before the SPX could sustain 15-minute closes above it, if it does. This whoosh-or-time setup is what happens in normal times, in normal setups, but these aren't normal times. The possibility of a decline to 1293 and then perhaps lower remains, too. We're in a wait-and-see period.

For the OEX, the overhead resistance extends up to about 604.30 on 15-minute closes. The 15-minute 9-ema is at 601.64 and further potential support on 15-minute closes is at 600.57.

Jeff Bailey : 3/13/2008 12:17:12 PM

You tell'em Rick ...

Jeff Bailey : 3/13/2008 12:13:48 PM

Would note too that morning low in DIA came right at/near the DIA's 1/22/08 close of $119.22.

DIA session low has been $119.00.

Jeff Bailey : 3/13/2008 12:11:06 PM


DJ- Citing the lack of market follow-through from the Fed's new liquidity efforts, Lehman Brothers says it is now forecasting the central bank will cut its overnight target rate by 75 basis points when it meets next week.

Linda Piazza : 3/13/2008 12:10:54 PM

The SPX popped above that 1306.20-ish resistance zone to a new high of 1307.28 but was knocked right back down. I don't think the battle is over yet and one chart setup suggests the battle may not be over for an hour or so. Remain watchful for any possibility.

Jeff Bailey : 3/13/2008 12:09:39 PM

30-year "tentative" at 4.405% ...

Jeff Bailey : 3/13/2008 12:08:46 PM

DIA/SPY/IWM/QQQQ 4-chart montage Link

Jeff Bailey : 3/13/2008 12:05:07 PM

Dow Diamonds (DIA) Alert! $120.93 -0.38% ... back to test conventional 19.1%

Jeff Bailey : 3/13/2008 12:04:40 PM


DJ- Shares in Carlyle Capital plummet after the company says it expects its lenders will seize its assets, causing the likely liquidation of the fund. Lenders have been selling the fund's $21.7 billion in mortgage securities.

Linda Piazza : 3/13/2008 12:04:01 PM

The SPX is approaching that 1306 level that I mentioned earlier as a benchmark. It was not until the SPX produced sustained 15-minute closes above that level, I said then, that the bulls could breathe easier. Specifically, the SPX now has presumed strong resistance at about 1306.20 on 15-minute closes. Be wary of a pop above that area that is soon reversed.

Jeff Bailey : 3/13/2008 12:01:23 PM

USO $87.02 +0.11% ... edges back green

Jeff Bailey : 3/13/2008 11:59:54 AM

S&P Comments (update)

DJ- Standard & Poor's now estimates that subprime write-downs could reach $285 billion, $20 billion higher than its estimate just six weeks ago - and forecast future pain for financial companies as the credit crisis moves beyond home loans.

However, S&P said in a new report that the bulk of the subprime pill has already been swallowed and "the end of write-downs is now in sight for large financial institutions."

The stock market ticked up visibly right after S&P issued its statement about the report, though the Dow Jones Industrial Average was recently down 94 at 12017. At its nadir, the Dow was off by around 235 points.

Asked about S&P's comments, one Wall Street trader said: "People love to hear that type of thing. ... People are clutching at ... any word we're getting toward the end" of the credit crisis.

S&P credit analyst Scott Bugie wasn't so upbeat, saying, "We believe that any near-term positive impact of reducing subprime risk in the financial system via increased disclosure and write-downs will be offset by worsening problems in the broader U.S. real estate market and in other segments of the credit markets." In addition, if wider credit spreads continue financial companies will "suffer further market-value write-downs of a broad range of exposures, including leveraged loans."

On the bright side, Bugie said, "The global financial sector appears to have already disclosed the majority of valuation write-downs of subprime (asset-backed securities)."

The write-down estimate was boosted to reflect higher projected write-downs on high-grade collateralized debt obligations of asset-backed securities of 2006 and 2007 vintage.

S&P noted that the largest players have undertaken a "rigorous valuation methodology" in their subprime write-downs, but market forces could bring pressure for even more. The firm said that while there has been some deterioration in the first quarter, "the magnitude of some write-downs is greater than any reasonable estimate of ultimate losses."

Linda Piazza : 3/13/2008 11:49:55 AM

The A/D line is corroborating what the SPX is doing, but it's not making any predictions of what it will do next. Both approach their previous highs of the day but neither has topped those highs. Both are now above their 15-minute 9-ema's, but have been producing candles with upper shadows since pushing above them, not a sign of strength.

Jeff Bailey : 3/13/2008 11:49:04 AM

USO $86.78 -0.16% ... all-time high of $87.78 intra-day at 10:55-11:00 AM EDT.

Jeff Bailey : 3/13/2008 11:47:25 AM

DXY 72.05 (30-minute delayed) ....

Jeff Bailey : 3/13/2008 11:47:08 AM

At 11:00 AM, DXY was 71.93

Jeff Bailey : 3/13/2008 11:46:29 AM

DXY intra-day low of 71.797, call it 71.80 came at 09:45-50 AM EDT.

Jeff Bailey : 3/13/2008 11:45:06 AM

Quick intra-day check would show TYX.X intra-day low came at 09:30-09:35 AM EDT.

Jeff Bailey : 3/13/2008 11:44:15 AM

30-year Yield ... Daily Intervals Link

Jeff Bailey : 3/13/2008 11:40:49 AM

30-year Yield ($TYX.X) down 1.8 bp. Found yield sellers at extension of downward trend from 6/13/07 yield high to 10/15/07 relative yield high.

Keene Little : 3/13/2008 11:39:09 AM

Looks like strong buy programs across the board and gap closures could be next. I was looking for a 5th wave down to confirm a trend change and it was looking like we were going to get it. Now with the strong buying spike before completing the 5th wave down I'm not so sure about the impulsive move down. It could be argued that it is just another very sharp 3-wave move. That sets up the possibility for another rally leg to match the one off Monday's low. Talk about whipsaw!

Updating the SPX 60-min chart that was posted last night, I'm showing two equal legs up off Monday's low (in pink) with a Fib target at 1342.87 which is very close to the 62% retracement of the decline from Feb 27th: Link

The bearish wave pattern calls for this bounce to fail and a continuation lower so take a break back below this morning's low as a very bearish sign.

Jeff Bailey : 3/13/2008 11:39:07 AM

US Senate Endorses Extending Some Of Bush Tax Cuts

Jeff Bailey : 3/13/2008 11:35:14 AM

S&P Report: Says Subprime Write-Downs Could Reach $285 Billion; "Likely Past The Halfway Mark"

Jeff Bailey : 3/13/2008 11:33:52 AM

NY Fed To Meet With Dealers Thurs/Fri To Discuss New Lending Plans

Linda Piazza : 3/13/2008 11:33:05 AM

USDJPY is 100.60, approaching the previous high of the day at 100.80 as well as potential Keltner resistance on 15-minute closes at 100.86-101.09. Right now, it's difficult to interpret what will happen next. The rise is good for those who want equities to rise, but the USDJPY hasn't broken out of its congestion zone, so it's just rising within that zone.

Jeff Bailey : 3/13/2008 11:33:04 AM

Honeywell Wins $3B Contract From Gulfstream

HON $56.25 -1.28% ...

Jeff Bailey : 3/13/2008 11:32:04 AM

S. Africa's Eskom: Sees Power Crisis Lasting 5 To 8 Years

Jeff Bailey : 3/13/2008 11:28:23 AM

USO $86.70 -0.26% ... reversing gains.

Linda Piazza : 3/13/2008 11:26:39 AM

The SPX kept climbing as I was typing that previous post.

Linda Piazza : 3/13/2008 11:26:16 AM

Watch for rollover potential in this zone for the SPX and OEX. I don't know that it will happen, but we know after a decline to watch for rollover potential at the 9-ema's when they're retested.

Bulls have a warning here, too, because if the SPX manages to push up throug about 1306 and stay there, then there's the potential for a sharp rise up 1326 or maybe even yesterday's high. If you don't believe that absolutely anything can happen in this climate, then you've been asleep the last couple of days.

Jeff Bailey : 3/13/2008 11:26:08 AM

Sector Losers ... Airlines -3.43%, Broker/Dealers -3.37%, Home Construction -2.48%, Networking -2.22%

Jeff Bailey : 3/13/2008 11:24:47 AM

Sector Winners ... Gold Bugs +3.37%, HMO +1.90%, Nat Gas +0.90%, Biotech +0.03% and Treasuries

Jeff Bailey : 3/13/2008 11:23:00 AM

11:00 Internals found at this Link

Jeff Bailey : 3/13/2008 11:13:11 AM

Some intra-day "gap up" action in the majors last 5 minutes.

Linda Piazza : 3/13/2008 11:08:57 AM

The SPX's 15-minute 9-ema, potential resistance on 15-minute closes, is at 1293.64, with further potential Keltner resistance at 1297.01; the OEX's, 599.33, with further Keltner resistance near 600.72.

Keene Little : 3/13/2008 10:57:43 AM

Short term charts are starting to show some bullish divergence at this new low this morning which helps confirm that it's probably the 5th wave. A tradeable (day trade) bounce should be coming, ideally after one more minor push lower.

Linda Piazza : 3/13/2008 10:53:52 AM

The SPX's 15-minute 9-ema is now at 1293.96; the OEX's, 599.42.

Jeff Bailey : 3/13/2008 10:52:34 AM

Companhia Vale Do Rio Doce (RIO) $32.62 -4.70% ...

Jeff Bailey : 3/13/2008 10:52:01 AM

Petroleo Brasileiro (PBR) $108.52 -5.12% ...

Jeff Bailey : 3/13/2008 10:51:34 AM

Brazil's Treasury Cancels Bond Auction, Cites Market Conditions

Keene Little : 3/13/2008 10:42:39 AM

We're getting the new low and we've now got a pretty clean 5-wave move down. This 5th wave down should drop a little lower but understand we'll get a bounce soon to correct the decline from yesterday's high so pull your stop down closer if you're short and want to take some profits off the table. After the bounce we'll get another setup or a short entry.

Linda Piazza : 3/13/2008 10:40:58 AM

Next potential Keltner target, as well as potential support on the 30-minute closes, is 1277.26 for the SPX. These charts are so scrambled by all this back and forth stuff, and I bet yours are, too, that it's difficult to decipher how meaningful they are. Use them as potential guidelines for where you should have profit-protecting plans if bearish or where vulnerability might lie if you're considering a bullish entry due to some setup you're seeing (and I'm not yet), but don't use them as absolute guidelines.

Jane Fox : 3/13/2008 10:40:28 AM

VIX supports the bears and is making new daily highs.

Jane Fox : 3/13/2008 10:39:57 AM

AD line is a very bearish -2294 and AD volume has a tajectory that tells me don't even think of going long.

Jeff Bailey : 3/13/2008 10:37:55 AM

Swing trade put close out partial position alert! ... let's close out one (1) of the two (2) US Oil Fund USO April $85 Puts (UNA-PG) at the bid of $3.20.

USO $87.44 +0.59% ...

Linda Piazza : 3/13/2008 10:35:23 AM

Looking at the action of the USDJPY, I don't think currency traders are getting what they want from Treasury Secretary Paulson. The USDJPY is 100.18. Last night on either Bloomberg or CNBC Europe, a couple of commentators kept insisting in a convoluted and somewhat funny argument that Paulson's previous statements about his "strong dollar policy" were code for allowing the dollar to weaken, that he had a policy to put in place, I guess, in case there was a strong dollar.

Jeff Bailey : 3/13/2008 10:35:17 AM

YG08J Alert! 1,000.00 +1.97%

Jeff Bailey : 3/13/2008 10:33:53 AM

Swing trade put alert! ... for one (1) of the HSBC Holdings HBC June $70 Puts (HBC-RN) at the offer of $3.00.

No stop for now. Target $71.00.

HBC $78.33 -1.60% ...

Jane Fox : 3/13/2008 10:27:55 AM

SPX chart is not looking healthy here at all, the market has almost totally retraced Tuesday's rally. Link

Jane Fox : 3/13/2008 10:25:41 AM

Gold will not break $1000/oz easily. This may be just like $100/bl Crude and "should" take a healthy retracement here. At least I am hoping it will so I can get back into this market. Link

Keene Little : 3/13/2008 10:22:49 AM

Once again I'm looking for what kind of move down we'll get from yesterday's high. An impulsive 5-wave move down will tell us the downtrend has resumed. A corrective 3-wave pullback would suggest another leg up before the downtrend resumes. So far the pullback is a 3-wave move but if we get a relatively small consolidation this morning followed by another drop lower then we'll get the impulsive drop. So far it's looking like we'll get that impulsive drop.

Linda Piazza : 3/13/2008 10:21:00 AM

USDJPY now 100.28. I hope Treasury Secretary Paulson says something that convinces currency traders that the dollar will strengthen.

Linda Piazza : 3/13/2008 10:19:36 AM

First potential Keltner resistance for the SPX is now at 1294.44 on 15-minute closes. The 15-minute 9-ema is now at 1300.17 and is still zooming lower. That's in a zone that we know is potential resistance from other sources, too.

The OEX has first potential Keltner resistance near 599.70 on 15-minute closes with the 15-minute 9-ema now at 602.33 and still zooming lower.

Linda Piazza : 3/13/2008 10:17:45 AM

The A/D line is bouncing from just above its Keltner target near -2300, having reached a low of -2219. It's at -1953 as I type. I'm not sure the decline is over, as the A/D line often dips again, producing bullish divergence as it does so, before it truly heads higher again. That's not always true, of course, but watch for the possibility. The 15-minute 9-ema is now at -1291.76 and still descending steeply. Unless the A/D line is just soaring higher, watch for potential resistance on 15-minute closes near that level.

Linda Piazza : 3/13/2008 10:03:04 AM

The USDJPY is 100.05. It just punched below 100 again, but bounced right back up. Let's see if it holds here.

Linda Piazza : 3/13/2008 10:01:44 AM

If the SPX bounces now, watch for first potential resistance near 1294 and then for potentially strong resistance in the 1297.90-1300.80 zone. Those hoping that the SPX will steady need to see the SPX back above that zone to breathe easier at all. Bears, of course, would rather see the SPX drop straight toward potential support on 30-minute closes at 1277.25, or else, if there is a bounce, see the SPX soon knocked back from one of those potential resistance levels.

Keene Little : 3/13/2008 9:56:59 AM

SPX made a marginal break of Tuesday's mid-day low (only pennies but it's a break) and that leaves the bounce off Monday's low as just a 3-wave correction. The others have overlapped the early morning high on Tuesday and that suggests 3-wave bounces for them as well. The risk for the bulls is an immediate, and hard, sell off from here. But the risk for both sides is that we'll continue to chop up and down with plenty of whipsaws.

Linda Piazza : 3/13/2008 9:48:07 AM

The A/D line is below the trendline I mentioned, heading toward potential Keltner support near -2300. Remember that the A/D line sometimes overruns support, but do be cautious now if bearish, watching for bounce potential. On such a negative day, I don't know if it will come, but I wouldn't ignore the possibility. Update your profit-protecting plan. The A/D line is -2136 as I type.

Linda Piazza : 3/13/2008 9:45:28 AM

Unless there's a phenomenal rebound, the SPX will not rebound up to 1298-1299 by the close of this first 15-minute period. That sets up a potential downside target of about 1277. I tend to discount setups in the first few minutes of trading, so I would counsel that you watch the 1284-1287 zone for potential support, too, but there's the vulnerability to lower prices.

Linda Piazza : 3/13/2008 9:43:16 AM

For those who don't watch the currency pair (although I advise you do as a sort of indicator), the USDJPY plunged to its lowest levels since November, 1995 last night. For the first time since then, it dropped to sub 100 levels. This, along with news that Carlyle Capital may be liquidated, has resulted in trouble for equities here and Japan, as well as across the globe. To some degree because the recession fears are playing into the currency weakness (because of the perception that our Fed will keep easing, to some degree, but somewhat just because of the weakness), this currency pair is following and not so much leading right now, but it's still important to watch, especially when there are divergences in its actions and those of the equities. It's at 100.28 as I type, up from the overnight low of 99.76, but also far below the 100.80 reached just prior to the open of our markets.

Linda Piazza : 3/13/2008 9:38:52 AM

Keltner outlook on the A/D line: The A/D line drops toward potential trendline support at about -1900. However, the Keltner setup shows vulnerability to almost -2300. It's at -1814 as I type. Watch for a reveral higher again that could begin at any time, as the trendline is approached, but be aware of that vulnerability to much lower values.

Keene Little : 3/13/2008 9:37:57 AM

SPX has dropped back down below the broken downtrend line from the end of February. If it rebounds quickly, no harm no foul. But if it stays below the line then it's a bearish signal.

Linda Piazza : 3/13/2008 9:36:24 AM

Those who want the markets to steady would like, as a first step, to see the SPX not fall much further than its current 1291.07 level, and then bounce back toward 1298-1300 by the close of the first 15-minute period. That may be a tall order, but stranger things have happened. This is just a "wish list" and not a prediction of what will happen.

Jane Fox : 3/13/2008 9:35:57 AM

Please be aware for all of you came in a little later that all my commentary will be on the June contract for June is now the front month for the index futures.

Linda Piazza : 3/13/2008 9:34:31 AM

Here we go. Yesterday before I'd left, I'd thought the SPX might find support near 1308.56 if it continued to drop but that might be a possible bounce point, but there wasn't time for a bounce or maybe not inclination for one. I'd suggested that subscribers would be left in a quandary because, even if there was a bounce that came back up near yesterday's open, that was a potential reversal signal. It could also have signaled more consolidation. It's the reversal signal that came to be. Now the SPX has already plowed down to potential support near 1292-1294 (trendline support). Let's see if this steadies it before we make too many other predictions.

Keene Little : 3/13/2008 9:24:34 AM

It's certainly not going to be a pretty start to the trading day with futures down about the largest I can remember. The small rise off the pre-market low looks corrective and suggesting lower still. Obviously the Tuesday rally is in jeopardy but I'll still caution not to take anything for granted here.

Remember that the Thursday before opex week has been known as the misdirection day. So a down day (or morning) today could be the formation of a longer lasting low followed by a rally into next week.

Jane Fox : 3/13/2008 9:19:26 AM

LONDON (MarketWatch) -- U.S. foreclosure filings fell 4% in February compared to January, but rose nearly 60% from last year, according to RealtyTrac. "We have still not reached the peak of foreclosure activity in this cycle," said James J. Saccacio, chief executive officer of RealtyTrac.

Jane Fox : 3/13/2008 9:18:30 AM

WASHINGTON (MarketWatch) -- First-time claims for state unemployment benefits remained unchanged in the latest week, staying at a level that signals a weak labor market, the Labor Department reported Thursday.

Claims for the week ending March 8 came in at 353,000, the same as the revised number for the week ending March 1.

Jane Fox : 3/13/2008 9:17:56 AM

WASHINGTON (MarketWatch) -- Prices of goods imported into the U.S. rose 0.2% in February, as the price of imported petroleum marked its second decline in three months, the Labor Department reported Thursday.

Imported petroleum prices fell 1.5%, the government said. However, those same prices are up 60.9% over the past year.

The overall inflation number was lower than anticipated. Economists surveyed by MarketWatch were expecting import prices to rise 0.8% in February after climbing by an initially estimated 1.7% in January.

Import prices rose a revised 1.6% in January, the data showed Thursday.

Prices for imported goods rose as the dollar fell to new lows against the yen and the euro over concerns about the U.S. economy.

In an interview with PBS' "Nightly Business Report" broadcast Thursday evening, President Bush said he favored a strong dollar because a stronger dollar would reduce inflationary pressures, especially for energy.

Jane Fox : 3/13/2008 9:16:46 AM

The other headline was Oil steady at $110/bl. Link

Jane Fox : 3/13/2008 9:15:49 AM

I opened my Marketwatch.com window and the headlines read Gold hits $1000, although my charts show a high of "only" 999.40. Wow! Link

Jane Fox : 3/13/2008 9:11:19 AM

For those of you who trade (or even follow) the futures today is what we call Rollover Thursday. The "Front" month contract was March from December to the Thursday before OPEX week of March at which time the "Front" month becomes June. Today is the Thursday before March's OPEX week so the front month is now June.

This rollover is why you see the huge gap down on the DOW futures (YM) charts. Link

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