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Keene Little : 3/18/2008 1:35:43 AM

Tuesday's pivot tables: Link and Link

The bounce off Monday's low is just a 3-wave bounce so far and therefore any further pullback first thing Tuesday morning would leave it that way and indicate we haven't seen the bottom yet (light green shows that possibility on the SPX 60-min chart below). If we get a quick pop higher in the morning that would give us a 5-wave move up and indicate the bounce could head at least a little higher (after a pullback following the pop higher). This latter scenario is shown in pink: Link

I'm beginning to show green colors again (bullish) because I think we could be close to a bottom which could launch a multi-month rally (or at least one into late April). There are several possibilities as to how we could form a bottom, the first being a bottom was put in on Monday. The 2nd possibility is for a continuation lower this week to a low around 1240 (light green). Or we could see a little more bounce this week that fails at or around 1300 and then head for a new low into the end of the month (pink).

Basically SPX needs to get above the downtrend line from the end of February, currently near 1310, for a heads up and above 1322, and then 1333, to confirm a bottom is in for now. Until that happens we could see the market chop its way lower for another week or so. The daily chart shows the tangle of lines between now and the end of the month as we wait for price to lead the way here: Link

Jeff Bailey : 3/18/2008 1:47:51 AM

Don't forget ... Triple Witch expiration this week (stock options, index options and equity futures)

Jeff Bailey : 3/18/2008 1:16:59 AM

YM ... finished a nice round 12,000 on Monday. Currently up 32 points.

Jeff Bailey : 3/18/2008 1:16:11 AM

US Dollar Index (dxy) 71.23 ... down 0.23, or -0.31% ... slips back under MONTHLY S2.

April Crude (cl08j) $106.05 ... up $0.37.

Jeff Bailey : 3/17/2008 11:18:02 PM

Major Global Equity Indices, Currencies, USO, GLD and $HUI.X Table at this Link

OI Technical Staff : 3/17/2008 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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Jeff Bailey : 3/17/2008 5:21:50 PM

Closing Internals found at this Link

Keene Little : 3/17/2008 5:01:24 PM

While I'm prognosticating on the SPX weekly chart I thought I'd update the potential wave pattern for the bear market decline this year and potentially into next (depending on the wave count). The light dashed pink count is for the 3rd of a 3rd wave down scenario (hard selling right from here). The dark red count is assuming we're bottoming here or perhaps a little lower later this month, followed by a corrective rally into June to then be followed by a continuation lower into the fall as the 3rd wave down: Link

The pink count is in between but that scenario won't be clear until after the larger bounce gets underway (to see if it's impulsive or not). What's interesting about the two price paths down, which are derived from typical wave relationships, is that they both end near 600 (one quicker than the other).

SPX 606 is the 1996 low which was the low of a 2nd wave correction in 1994-2000 rally. It's common to see a retracement to the 2nd wave correction of an extended 5th wave, which is what the 1994-2000 rally was. This is of course speculation on my part but the decline from October, as laid out in either of the two scenarios depicted here, would be a typical 2nd leg down within a larger bear market.

Jeff Bailey : 3/17/2008 4:55:24 PM

Closing U.S. Market Watch at this Link

Jane Fox : 3/17/2008 4:21:22 PM

Here is a list of the economic reports for tomorrow. :

8:30a.m. Feb Producer Price Index. Expected: +0.3%. Previous: +1.0%.

8:30a.m. Feb PPI, Ex-Food & Energy. Expected: +0.2%. Previous: +0.4%.

8:30a.m. Feb Housing Starts. Expected: -1.0%. Previous: +0.8%.

2:15p.m. Federal Reserve interest rate decision. Previous: 3%.

Keene Little : 3/17/2008 4:15:45 PM

I only have it identified in light pink on the weekly chart that I just posted but the arrow that's pointing down hard (with the label "(iii) of 3") is why I'm saying a break from here back below 1257 would be potentially very bearish. A 3rd of a 3rd wave down (starting from the Feb 1st high) would likely have SPX dropping down to 1000 within the next month or so.

Needless to say that would be marked by some panic selling. While that's not my preferred count at the moment I certainly can't rule it out (especially since I have no idea how the market might react to tomorrow's Fed decision). If you're in bullish positions, including spreads, know that it remains possible that we haven't seen strong selling in this market yet.

Keene Little : 3/17/2008 4:08:17 PM

For a longer term perspective on where SPX could be headed if we put in a bottom today (or by the end of the month), this weekly chart shows a typical retracement of the Oct-Mar decline, in both time and price: Link . A rally back up to the 1400 area by the end of April or early June, depending on which bearish wave count is playing out, is something I'm expecting to see. Each of those scenarios would set up an outstanding shorting opportunity into the fall (pun intended).

Jeff Bailey : 3/17/2008 4:00:50 PM

April Unleaded settled down $0.1852, or -6.89% at $2.5042.

Jeff Bailey : 3/17/2008 4:00:15 PM

April Crude Oil settled down $4.53, or -4.11% at $105.68

Linda Piazza : 3/17/2008 3:59:50 PM

Go pat yourselves on the back. You may have just lived through a history-making period in our economy, one about which stories will be told for decades. Although your accounts may have suffered or benefited, you have survived it.

Keene Little : 3/17/2008 3:47:29 PM

This is a better SPX daily chart (I corrected the green wave count): Link

Linda Piazza : 3/17/2008 3:46:41 PM

Just before the market opened this morning (9:27:35), I posted a daily SPX Keltner chart, showing potential support on a daily close. I reposted it later with updated prices. Here it is again, noting that the action pushed the support a bit lower this morning (from near 1264 to 1261): Link This doesn't guarantee that a bottom has been reached, any more than last week's test of this same Keltner configuration did, but it was good to see the potential bullish price/RSI divergence as today's test was conducted.

Linda Piazza : 3/17/2008 3:41:24 PM

New high for the SPX. Those of you who might have been brave enough to step into bullish positions as the SPX was testing daily Keltner and other support levels Keene had mentioned might now consider whether you want to lock in some of your profit. That would depend on how deep your pockets are, how long a trade you intended (scalp, day or longer) and how staunch your heart might be. What happened today could be important over the near or intermediate term, but only the action in future days and weeks will tell us that. We've been in a take-profits-when-offered environment, and we have no conclusive evidence other than "gut instincts" that we've ended that period. I, for one, was glad to see this test today and get it over with, for I've felt it was coming for a long time, and I'm glad to see this bounce. But while I feel better about getting this bitter medicine down our throats, I'm not sure the flu is cured just yet. We might still have some bumpy times in our recovery.

Keene Little : 3/17/2008 3:40:30 PM

The choppy leg down from last Thursday looks like it has finished. The question is what is that leg down in the larger pattern. It might have finished the decline and now get ready to rock and roll to the upside (green wave count on the updated SPX 60-min chart) or we might get a choppy bounce back up to around 1300 and then another choppy decline to finish the leg down from Feb 1st (the larger descending wedge), shown in dark red: Link

If price were to drop hard from here through 1257, today's low, it would look a lot more bearish. But a rally up through 1322 would negate any further downside and suggest we have in fact seen the bottom. In between 1257 and 1322 could be a lot more chop and whipsaw.

The daily chart will leave a very bullish looking hammer candelstick at support today (at the bottom of the descending wedge) and while a bullish day tomorrow would confirm the reversal candlestick pattern, it will take a break of the key levels to the upside to confirm it. But bears beware here--we might have put in an important bottom today. Link

Jeff Bailey : 3/17/2008 3:35:48 PM

DIA $120.61 +0.49% ... takes a look above WKLY Pivot.

Jeff Bailey : 3/17/2008 3:29:16 PM

$CAC -2.98% from Monday's close. -21.1% from 12/31/07 close.

Keene Little : 3/17/2008 3:28:46 PM

ES just tagged 1285.50, and SPX hit 1282.90, for two equal legs up off today's low. Let's see if the bulls can keep the buying going into the close. I suspect the PPT may have been providing a helping hand today--can't have the market crashing on silly news like bailing out BSC for $2/share.

Jeff Bailey : 3/17/2008 3:28:45 PM

$DAX -4.13% from Monday's close. -22.6% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:28:22 PM

$FTSE -3.80% from Monday's close. -16.1% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:27:53 PM

$SSEC -7.86% from Monday's close. -27.4% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:27:25 PM

$HSI -7.13% from Monday's close. -24.2% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:26:53 PM

$NIKK -5.94% from Monday's close. -23.0% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:26:27 PM

INDU 12,016 +0.54% ... UP 2.31% from last Monday's close. -9.5% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:25:01 PM

RUT.X 655.55 -1.10% ... UP 1.80% from last Monday's close. -14.4% from 12/31/07 close.

Jeff Bailey : 3/17/2008 3:23:38 PM

I do think the PHF $7.32 -7.80% offers some "value" today.

SEC Yield (based on $0.075/month; $0.90/year dividend) 12.29%

Linda Piazza : 3/17/2008 3:17:04 PM

Remember that from this point on, the action may be about positioning ahead of tomorrow's important 8:30 am ET releases, releases that might have some impact on the Fed's rate decision (although they have that information as of 4:00 this afternoon). Make your end-of-day decisions accordingly.

Those of you with March bull put credit spreads might want to take stock of your breathing, blood pressure, and heart rate, and decide if maybe you might want to spend a nickel, dime, or even fifteen cents to close out some of those spreads, if you can do so for those prices. I suggested last week that you look at your spreads and see if you could exit for those prices, considering whether you wanted to give up some of your profit to do so. If you didn't do it then, maybe you want to reconsider, or maybe you're perfectly happy with your decision and believe that your spreads will expire worthlessly. It doesn't have to be an all-or-nothing proposition, either. You can step out of part of them. If you're not just afraid that markets will crater but are instead convinced they will, you can talk to your broker about more creative tactics, such as putting a bear put spread in front of your bull put ones, so you actually have an opportunity to benefit if markets rolled down again.

With the Japanese government trying to decide who is going to lead their central bank and our FOMC meeting tomorrow, I'm all out of guesses about what happens next. I'm not trading right now and am just managing the trades I do have. I've been out of all March credit spreads for a while now, but you can bet I'd be exiting them for a few cents if I did have them and had the opportunity to do that, but then my tolerance for risk has gone down lately.

Jeff Bailey : 3/17/2008 3:16:22 PM

03:00 Internals found at this Link

Linda Piazza : 3/17/2008 3:09:33 PM

The OEX has been leading the way today when compared to the SPX, and the OEX is now slightly above its 15-minute 45-ema with the SPX finally following as I started typing. That's at about 1278.50 for the the SPX, so bulls want the SPX to hold above this into this 15-minute close. That 15-minute 45-ema is now at 593.12 for the OEX. Next resistance for the SPX is at 1291.14 on 15-minute closes; for the OEX, 597.89.

Linda Piazza : 3/17/2008 2:58:36 PM

Remember that the nature of the markets can change after the bond market closes, which occurs in a couple of minutes. Be watchful.

Jeff Bailey : 3/17/2008 2:58:07 PM

France's CAC-40 ($CAC) finished down 161 points, or -3.51% at 4,431.

Linda Piazza : 3/17/2008 2:58:00 PM

The OEX tests potential Keltner resistance on 15-minute closes at 593. Potential support at 589.85 on 15-minute closes.

Jeff Bailey : 3/17/2008 2:57:26 PM

Germany's DAX ($DAX) finished down 269 points, or -4.18% at 6,182.

Linda Piazza : 3/17/2008 2:56:59 PM

SPX historical (trendline) resistance at about 1276.50 and potential Keltner (15-minute 45-ema) at 1278.78 on 15-minute closes. Potential support on 15-minute closes at the 9-ema on that chart, now at 1269.01.

Jeff Bailey : 3/17/2008 2:56:37 PM

FTSE-100 ($FTSE) finished down 217 points, or -3.86% at 5,415.

Jeff Bailey : 3/17/2008 2:55:13 PM

EU's Almunia: Europe No Longer In "Economic Good Times"
20 Yrs Of Growth, Stability May Be Close To End
Financial Markets Face Turmoil, Uncertainty
EU Economy Facing Challenges "Rather Well" So Far

Keene Little : 3/17/2008 2:53:40 PM

If the bounce continues to new daily highs then watch for where it would achieve two equal legs up off today's mid-day low. For the DOW and SPX those levels are at 12052 and 1283. If we're to remain in a choppy environment, with new lows ahead, those levels could be the extent of the bounce.

So far though, looking at this with a bullish pair of glasses, I like the fact that SPX dipped below 1260 but didn't stay there. It is now trying to break the downtrend line from Thursday's high, currently near 1273. Other than getting through 1283 after that, the next important resistance level is near 1312 which is the downtrend line from the end of February (and the top of the potential descending wedge pattern on the daily chart).

There's lots of work for the bulls to do before they're even close to claiming victory. But so far the bears haven't been able to capitalize on the day's negative reaction to the BSC news. Like I said, the big boys are slugging it out right now and we've got a couple of rounds to go.

Jeff Bailey : 3/17/2008 2:48:27 PM

SPX daily interval chart with Yearly Pivot levels, Quarterly Pivot retracement, Monthly Pivot retracement and 2nd "Bailey Wave" (Andrews Pitchfork; Modified Schiff) Link

Linda Piazza : 3/17/2008 2:41:05 PM

The OEX's 15-minute 9-ema is now at 588.79 and the OEX needs to move above the afternoon high of 592.67 to confirm that it's bouncing from that average and not just consolidating along it. The OEX has potentially strong resistance at 592.91 on 15-minute closes, so sustaining new afternoon (not daily) highs might prove difficult without a strong rally.

Linda Piazza : 3/17/2008 2:39:42 PM

The decline pushed the SPX's 15-minute 9-ema lower. It's now at 1267.10 and it appears to be holding so far on 15-minute closes, but the SPX needs a move above the afternoon high at 1275.51 to confirm that. It's at 1270.34 as I type.

Jeff Bailey : 3/17/2008 2:39:36 PM

We'll get new QUARTERLY Pivot levels at the end of the month.

Jeff Bailey : 3/17/2008 2:37:52 PM

SPX Yearly Pivot Levels (Table) at this Link

Will simply note that for 2001, the SPX traded as low as 945 and undercut its YEARLY S2 by roughly 12.5%. May be useful if history were to repeat on technical level.

Linda Piazza : 3/17/2008 2:28:19 PM

Times like these are times when we want to hear the take by the Art Cashin's of the financial world, aren't they? I want insight from someone who was at least alive in 1987, if not trading! Smile. I know I risk sounding like an old fogey, but I believe in technology (or did) and for a time I bought into the "it's different this time" hype from all those whippersnappers (I'm deliberately exaggerating, folks) before the 2000 rollover. I stayed in some investments longer than I should, although I fortunately am cautious enough that I hadn't put important savings at risk. This isn't an age thing; it's an experience thing. I want to hear from someone who can make some comparisons because he or she was on the floor when other debacles were unfolding.

Linda Piazza : 3/17/2008 2:20:23 PM

The SPX's 15-minute 9-ema is now 1267.16; the OEX's, 588.63.

Keene Little : 3/17/2008 2:16:47 PM

The DOW has managed two 200-point swings so far today and is working on its 3rd as it approaches even on the day again. Just a bit whippy. Emotions are running high and I'm more than happy sitting on the side of the road in my lawn chair as I watch the parade go by. Let the big boys duke it out today--I'll let the dust settle and see who the winner will be (at least for a day).

Jeff Bailey : 3/17/2008 2:14:42 PM

MF Global Shares Plunge, Takes Other Firms With It

DJ- MF Global Ltd. (MF) said it is "very well capitalized" and has "sufficient funding to conduct our business in normal course," responding after market worries cut the company's value by as much as 79%. The news also helped send shares of commodity exchanges and brokers sharply lower. "As of today, volumes and net revenues for the current quarter to date remain at higher levels than in any comparable period during the current fiscal year," MF Global said in a statement. The company added that client funds are "at higher levels" than when a scandal, involving a massive wheat-market play gone awry, was announced last month. MF Global went on to say, "While the company uses third party repo lines, we have alternative funding in the event those lines are not available to the company." They include a $1.4 billion credit line on which it hasn't drawn. Clearing houses in London and the U.S. said MF Global continues to meet all its obligations as rumors swirled that the company is having problems meeting its margin payments. MF Global, somewhat mysteriously, added that the secretive British billionaire Joe Lewis, whose $1.18 billion investment in Bear Stearns Cos. (BSC) last year has essentially been wiped out, "is not a client of MF Global." MF Global's shares recently traded down 55%, or $9.53, at $7.82. Earlier Monday, shares traded as low as $3.64, a decline of 79% from Friday's closing price. MF Global last month revealed a $141.5 million loss from unauthorized trades in the booming wheat market by one of its traders, blaming the loss on loopholes in its system limiting the size of its trades. Analysts and investors are concerned that more bad trades could surface at MF Global, further depleting its capital. Covering the bad bets by Evan "Brent" Dooley, the Memphis, Tenn., trader, has eaten up about 6% of the company's capital and sent shares tumbling in the past several weeks. In a brief interview after the losses were discovered, Dooley told The Wall Street Journal: "The computer system failed on a lot of things," adding that it had problems in "setting limits." Spun off from hedge-fund firm Man Group PLC last summer, MF Global is a big provider of trading services on fast-growing markets like CME Group Inc.'s (CME) Chicago Mercantile Exchange, Nymex Holdings Inc.'s (NMX) New York Mercantile Exchange and Eurex, Europe's largest derivatives market. As shares of MF Global started to tumble in earnest mid-morning, shares of major derivatives exchanges - where investors may fear that exchange-run clearinghouses could be on the hook for a major firm's losses - also dropped. CME was recently down 11% to $433, while Nymex slid 13% to $82.38. Both exchanges were already falling after they announced that CME has a definitive agreement to buy Nymex for $9.3 billion, but that terms for Nymex holders had not been sweetened since the idea of a deal was first publicly floated in January. Fallout from the MF scare also seemed to impact other, similar companies in the trading space. Shares of close competitor Interactive Brokers Group Inc. (IBKR) were recently down 17% to $24.47. GFI Global Inc. (GFIG), an inter-dealer broker, slumped about 22% to $50.94

Jeff Bailey : 3/17/2008 2:13:52 PM

MF Global (MF) $8.94 -48% ... having traded as low as $3.64

Linda Piazza : 3/17/2008 2:11:39 PM

The SPX's 15-minute 9-ema is now 1267.08; the OEX's, 588.55. Potential resistance for the SPX is 1276 and then 1280.01 on 15-minute closes. For the OEX, it is at 593.29 on 15-minute closes. The OEX has been fitting these Keltner levels better than the SPX today.

Linda Piazza : 3/17/2008 2:05:51 PM

Not only has the SPX managed 7-minute closes above the 9-ema, but it's also managed a 15-minute close above the 15-minute 9-ema. The VIX, however, has not yet dropped below its 15-minute 9-ema, which I would like to see it do to confirm any SPX strength, even over the short term.

Jeff Bailey : 3/17/2008 1:59:43 PM

USO $82.19 -4.99% ...

Jeff Bailey : 3/17/2008 1:57:15 PM

SPY $127.04 -1.98% ...

Jeff Bailey : 3/17/2008 1:56:59 PM

VIX.X 33.90 +8.79% ...

Jeff Bailey : 3/17/2008 1:56:43 PM

Swing trade put exit partial position alert! ... Let's sell to close one (1) of the HSBC HBC June $70 Puts (HBC-RN) at the bid of $4.60.

HBC $75.01 -2.58% ...

Linda Piazza : 3/17/2008 1:50:44 PM

Here's the daily SPX Keltner chart I posted this morning with the original annotations but with today's price action now included: Link As I warned earlier today, Keltner support and/or resistance doesn't always hold, of course, but I want bears to be aware of the bounce potential at least. Bulls, I don't see enough evidence to advise you to dig in with new bullish trades. Could work, but we're teetering on the edge here.

Linda Piazza : 3/17/2008 1:47:30 PM

As I've warned all day, bears need to keep their profit-protecting plans in place today. If you weathered that mid-morning bounce, you're breathing a bit easier but you need to make sure that those gains don't turn into losses. Remember tomorrow's FOMC meeting will be preceded by the February PPI and Housing Starts and Building Permits, both released before the market open tomorrow. That may mean that by late this afternoon, traders will be positioning portfolios ahead of that meeting instead of waiting until tomorrow to do it. Which way will they go? That's what we have to wait and see. Just make sure that you don't carry too much risk overnight. It's possible that Japan will decide to extend Governor Fukui's term until they can agree on a replacement and he decides that some good old yen selling might be appropriate, sending the yen lower against the dollar again. The ECB's Jean-Claude Trichet could decide that it's time to lower rates in Europe to protect its exporters. Although neither of those developments seem likely now, both have been discussed and neither is impossible.

Keene Little : 3/17/2008 1:46:08 PM

Are commodities topping? I've been warning about an imminent collapse in commodities as the next bubble to be popped. It's too early to tell but the drop in oil (USO) is giving us a heads up. It has now broken its uptrend line from early February but it takes a break below 78.50 to be more meaningful at this point. There is still the potential for a final leg up to complete the slightly more bullish wave count (green): Link

The lack of bearish divergences at the high leaves me suspicious about this being the final high. The bearish divergence is not required, especially in a blow-off top as commodities seem to have been in, but it helps confirm a top. This ties in with the gold chart I posted last night (updated here: Link ) which shows the possibility for a pullback and then a push higher for a final high next month.

Keene Little : 3/17/2008 1:35:03 PM

New cash lows (but futures have not yet tested their overnight lows (except for NQ). The pattern of the move down from Thursday afternoon's high suggests it could see support near 1SPX 254-1255 where the move down would have two equal legs. As part of a larger descending wedge pattern, as shown on the daily chart, this could set up another choppy bounce.

Linda Piazza : 3/17/2008 1:28:37 PM

The VIX and VXO can get all wonky (real word meaning unreliable or not trustworthy) during opex week, but the VIX has not made a new daily high to match the SPX's new daily low and the same is true of the VXO and OEX.

Linda Piazza : 3/17/2008 1:24:20 PM

The SPX's 7-minute chart suggests potential support at 1255.94.

Jeff Bailey : 3/17/2008 1:24:14 PM

S&P 500 Index (SPX.X) alert! 1,259 .... YEARLY S2.

Jeff Bailey : 3/17/2008 1:23:40 PM

Pretty important technical level being tested on 30-year Yield ($TYX.X) here at 4.270%.

Jeff Bailey : 3/17/2008 1:17:59 PM

01:00 Internals found at this Link

Jane Fox : 3/17/2008 1:24:24 PM

I haven't talked MACD a lot lately but that does not mean I don't keep an eye on it. Both the SPX and NDX charts are sporting nice bullish MACD divergences and the other two, although they do not have divergences, do have MACD that are neutral so in agreement with the bullishness. Link

Linda Piazza : 3/17/2008 1:13:40 PM

The SPX is not maintaining those closes above the 7-minute 9-ema, with that now at 1265.28. Potential support on 7-minute closes is now 1259.55 with further support at 1256.74.

Jeff Bailey : 3/17/2008 1:11:21 PM

13-week Yield ($IRX.X) ... just darted to session low yield of 0.97%

Keene Little : 3/17/2008 1:10:25 PM

Because of the choppy price action since January I'm still leaning towards an ending pattern but it could play out for the rest of the month as the market works its way a little lower. I've been providing key levels to the upside to tell me when a bottom is in and until those levels are exceeded I'm remaining cautious about upside potential. We've seen far too many one-day wonder rallies completely fizzle.

The challenge (for me) is figuring out where the correction of the decline into the January low ended and then where the next leg down began. The NDX daily chart shows a couple of ideas at this point: Link

The dark red wave count shows a continued choppy decline in a descending wedge to its 1550 Fib projection by early April (could happen faster). The pink wave count calls for a low soon (possibly today) and a rally up to its downtrend line from October by early April. That's quite a wide spread between the two possibilities in the next two weeks. My best advice at this point is to stick with the trend--it's down until upside key levels are broken.

Jane Fox : 3/17/2008 1:07:22 PM

The overnight lows have held so far and that is about all I can say that is bullish. Link

Jeff Bailey : 3/17/2008 1:06:56 PM

Toll Brothers (TOL) $18.74 -3.74% ... 19.1% conventional ($18.48) tested at the open.

Jeff Bailey : 3/17/2008 1:05:55 PM

US NAHB March Housing Index Unchanged (20) Vs. February

Jeff Bailey : 3/17/2008 1:02:12 PM

I did place an USO observation in the Dow components as XOM and newly added CVX are BIG weightings.

Jeff Bailey : 3/17/2008 12:59:49 PM

Dow Components (PRICE weighted index) at this Link

Linda Piazza : 3/17/2008 12:59:27 PM

There's been a first 7-minute close for the SPX above the 7-minute 9-ema. This is the most tentative of tentative signs of any improvement, and those wanting the SPX to steady want to see those closes maintained and for the SPX to rise fast enough to turn the 7-minute 9-ema higher again. They also need to see a high above the mid-morning one of 1284.96 to avoid the lower low, lower high scenario. The SPX is at 1267.08 as I type with the 7-minute 9-ema now at 1265.83. I'll roll up to the 15-minute chart again as soon as the SPX has maintained those 7-minute closes above the 7-minute 9-ema long enough to look stable with regard to that moving average.

Jeff Bailey : 3/17/2008 12:48:12 PM

Dow Industrials remain a pillar of strength vs. major global equity benchmarks.

Jeff Bailey : 3/17/2008 12:43:22 PM

Shanghai ($SSEC) finished down 142 points, or -3.60% at 3,820.

Jeff Bailey : 3/17/2008 12:41:55 PM

Hang Seng ($HSI) finished down 1,152, or -5.18% at 21,085

Jeff Bailey : 3/17/2008 12:41:18 PM

Nikkei-225 ($NIKK) finished down 454 points, or -3.71% at 11,788

Linda Piazza : 3/17/2008 12:40:52 PM

The 7-minute 9-ema for the SPX is now at 1265.25. That's been holding as resistance on 7-minute closes since the 11:13 candle this morning, so those who want markets to steady want to see the SPX sustaining values above it again.

Keene Little : 3/17/2008 12:34:37 PM

NDX is now down testing last Monday's low and has closed Tuesday's gap up (the afternoon low was the low before the big gap up and rally on Tuesday following the Fed's surprise $200B cash infusion).

Jeff Bailey : 3/17/2008 12:32:33 PM

S&P 100 Index (OEX.X) Alert! 585.18 -1.73% ... MONTHLY S2. WKLY S1 583.92. (See Sunday's MM) Link

Jeff Bailey : 3/17/2008 12:30:33 PM

10-year Yield ($TNX.X) alert! down 11.1 bp at 3.310% (WKLY S1).

Majors vulnerable to their WKLY S1

Linda Piazza : 3/17/2008 12:28:40 PM

I'm rolling down to the 7-minute chart for a moment because it tends to be more predictive in choppy market conditions like these. On that chart, the SPX tests potential support near 1261.60 and then next potential support is at 1258.44 on 7-minute closes. As I type, it looks as if the SPX is headed there. Bears should be aware of potential support being approached, both on these short-term and on longer-term charts. Keene has been mentioning 1260, and my charts show 1255-1258.

Jane Fox : 3/17/2008 12:20:25 PM

I would be hard pressed to take any long trades today even though with all this selling you would have a very good reason to try a few counter trend trades. Link

Linda Piazza : 3/17/2008 12:15:21 PM

The A/D line has also not touched its morning low although on the Keltner setup, it so far remains vulnerable to that -2568 level. It's at -2291 as I type.

Linda Piazza : 3/17/2008 12:13:09 PM

The OEX has not yet tested this morning's low. It has instead so far held at potential support on 15-minute closes now at 586.69. The SPX is at 587.14 as I type.

Linda Piazza : 3/17/2008 12:08:24 PM

As I type, we're seeing the requisite bounce attempt beginning as this morning's low was tested. We knew to expect that unless prices just plummeted through that level, but what we don't yet know is whether those buying on hopes for a double-bottom test will be swamped by those selling on any little bump higher.

Jeff Bailey : 3/17/2008 12:07:56 PM

Today's Global Econ Calendar Link

Jeff Bailey : 3/17/2008 12:06:59 PM

Chicago Fed Midwest Mfg. Index Slips 0.1% In Jan Vs. December
December Index Revised Up To 105.4, From 104.7
Regional Auto Output Tubles 1.4% In Jan Vs. Dec.
Steel Mfg. Drops 0.9% In Jan Vs. Dec
Regional Machinery, Resource Output Up In Jan

Keene Little : 3/17/2008 12:04:03 PM

The choppy rise in the techs this morning was in fact a warning of an impending drop. Now it's looking like we could get a test of the early morning lows.

Linda Piazza : 3/17/2008 12:02:58 PM

For whatever it's worth, the USDJPY is well above its overnight low and hasn't even tested its 7:00-8:00 am values near 96.25. It's at 96.86 as I type.

Linda Piazza : 3/17/2008 11:58:55 AM

Potential SPX Keltner support at 1267.70 is being tested, with the SPX at 1267.56 as I type. Next support at 1264.26 to today's 1262.71 low, with the next potential support at 1254.48.

Jeff Bailey : 3/17/2008 11:57:04 AM

CBOE Oil Index (OIX.X) 806.22 -3.00% ... probes 50% conventional and 150-day SMA

Keene Little : 3/17/2008 11:43:29 AM

With the brokers one of the more negative sectors today (-10.6% currently), I thought it would be good to see where they might find support. A Fib projection at 127.90 crosses the bottom of a parallel down-channel at the end of this month. From its current price of 139 that would be another -8% lower. Link

Linda Piazza : 3/17/2008 11:39:17 AM

I'm also studying USDJPY and A/D line charts, and none are making any predictions. They're all pretty much just confirming each other's movements.

Jeff Bailey : 3/17/2008 11:37:56 AM

US Dollar Index (DXY) 71.258 (30-minute delayed) ... right here at the 11:00 mark.

Jeff Bailey : 3/17/2008 11:36:13 AM

VIX.X 31.72 +1.79% ... did trade its WKLY R1 opening tick.

Jeff Bailey : 3/17/2008 11:35:27 AM

SPX/SPY and SMH only equity-based indices tracked in pivot matrix that have seen trade at WKLY S1.

Linda Piazza : 3/17/2008 11:34:47 AM

The OEX still outperforms the SPX on a 15-minute Keltner basis. It's well above the next potential support on that chart at 587.65.

Jeff Bailey : 3/17/2008 11:34:03 AM

10-year Yield ($TNX.X) ... down 7.6 bp at 3.345% ... undercuts morning low. No trade of WKLY S1 at this point.

Linda Piazza : 3/17/2008 11:33:42 AM

SPX potential support at 1269.38 held on that last 15-minute close. Caution: even if the SPX does rise now, it could just be widening that formation that looks like a possible bear flag. We just really don't know how this will all turn out yet, so you have to plan accordingly.

Keene Little : 3/17/2008 11:30:30 AM

Linda mentioned the multiple warnings (certainly from me) and I must admit that even I am surprised by the rapidity of the collapse in financials. I've said repeatedly over the past year that we will see a mind-numbingly fast credit implosion but this whole Bear Stearns saga has surprised me by how quickly it's fallen. Same with the bond insurers (who still amazingly have AAA ratings--hellooo).

But after several conversations with friends and family yesterday I continue to be amazed at how bullish people have remained. Buy and hold is still the mantra, "buy the dips", "it always comes back", "I don't let the short term declines spook me", etc. But knowing that the majority of today's investors have only known a long and extremely strong bull market (strongest on record), it's no surprise that people will stay invested all the way down (and then sell out at the bottom).

Linda Piazza : 3/17/2008 11:22:46 AM

Potential support on 15-minute closes for the SPX is at 1269.70 and then 1263.63 . . . and then 1254.73. I don't need to remind you again that nothing seen on a 15-minute chart is going to hold back a tidal wave of selling. These would be potential support levels in a normal ordered market. The lower one does, however, conform fairly well to potential support on the daily Keltner chart, on a daily close. The SPX is at 1273.28 as I type. Unfortunately, we just don't yet know the outcome of the markets, so you must just use wise trade and account management practices.

Jeff Bailey : 3/17/2008 11:16:30 AM

11:00 Internals found at this Link

Volume looks anemic at NASDAQ.

Linda Piazza : 3/17/2008 11:12:03 AM

The SPX is consolidating--but consolidating with volatility, I guess I'd say--near the 15-minute 9-ema, now at about 1278.50. The SPX is at 1278.28 as I type. We don't know yet if this is consolidation prior to another climb, perhaps toward next potential resistance near 1290-1291 or if it's consolidation prior to a decline toward 1270.30 next support. If you're trading, know where your account-appropriate stops should be and adhere to them. It's all you can do in this environment. Prices can jump one direction and trigger your stop and then immediately reverse and head the other way . . . but they can also just keep going. Standard technical analysis tools don't work as well in markets ruled by emotion-based trading, and they never work as well the day before an FOMC meeting or during opex week, and we have all that coming together at once.

Linda Piazza : 3/17/2008 11:08:34 AM

Speaking of Keene, as I did in a previous post: How many times did you read his warnings about the eventual dreadful consequences of the credit bubble and write them off? In the late 90's, the same thing was happening, with some warning of the dire consequences of that bubble while others laughed off their concerns and spoke the "it's different now" phrase so often. Our readers have been taught to be cautious and not believe everything they've been seeing and hearing, and they've had the opportunity to be proactive or else react quickly when things went wrong. I know that my account balance benefited from that step.

I get worried when I read dire warnings, and, believe me, the warnings have been even more dire in the European financial press. My take is to read (and maybe go talk a long walk if I feel panicked by what I read--smile) and then sit down and make some what-if plans. You do have some control in most cases. We're options traders, and we have more control than most because we can trade both directions or execute some nifty combination trade that benefits from no direction. Don't be afraid of reading dire warnings. Just digest them and make plans. Let price action guide you.

Let warnings about bad times to trade guide you, too. We writers are just as Type-A as the rest of you. It's a requirement for options traders! We want to trade, too, but when we warn you that the environment is not good for trading, we're not refusing to do our jobs. We're doing them.

Keene Little : 3/17/2008 10:59:51 AM

The pattern of the this morning's rally in the techs gives me the impression that it's about to let go to the downside. The rally in the DOW and SPX looks more bullish but certainly a pullback at a minimum can be expected. As I've heard Art Cashin say many times when the market rallies almost immediately following a down open, it's not necessarily a good sign. Sometimes it's better to see a real flush after the open and then a rally. So the market remains vulnerable to at least a retest of this morning's lows.

Jeff Bailey : 3/17/2008 10:58:25 AM

10:55 AM Market Watch at this Link

Linda Piazza : 3/17/2008 10:54:58 AM

The SPX has now produced a 15-minute close above the 15-minute 9-ema. This isn't proof that the rest of the day will see the SPX continue to bounce from that moving average, but it is a sign of a slight (if perhaps) temporary improvement in tenor. As Keene warned last night, and I did this morning, the SPX has been approaching potential daily support. Keene and I derive those numbers through distinctly different methods, but our numbers for potential support were only a couple of points apart.

Jeff Bailey : 3/17/2008 10:51:55 AM

INDU 11,965 +0.11% ... creeps green

Jeff Bailey : 3/17/2008 10:51:38 AM

Sector Winners ... Pharma +1.07%, Gold Bugs +0.59%, Semiconductors +0.03%

Jeff Bailey : 3/17/2008 10:50:41 AM

Petroleo Brasileiro (PBR) $105.09 -2.91% ... off lows of $102.80 (61.8% conventional $102.77)

Jeff Bailey : 3/17/2008 10:49:39 AM

iShares Brazil (EWZ) $78.12 -2.52% ...

Linda Piazza : 3/17/2008 10:41:55 AM

The USDJPY hit potentially strong resistance at 97.35-97.45. It was knocked back, but so far, knocked back only to 97.08, just above the 15-minute 9-ema at about 97.02. Bulls want to see that support hold up on 15-minute closes, but that resistance looks strong enough to push the USDJPY back lower, so the possibility of a drop to 96.57 or even 96.23 next support exists. Bulls want consolidation instead or an actual strong surge up through that resistance.

Linda Piazza : 3/17/2008 10:38:56 AM

The SPX's 15-minute 9-ema holds as resistance. Potential support is now at 1271.41 on 15-minute closes, with next support at 1266.30 and headed lower. The SPX is at 1273.90 as I type, near trendline support. Those who want markets to steady want to see consolidation or an actual gain now.

Jeff Bailey : 3/17/2008 10:37:27 AM

Brazil Posts $527 Million Foreign Trade Surplus For Mar 10-16

DJ- Brazil posted a foreign trade surplus of $527 million in the second week of March, the Trade and Development Ministry said Monday. For the March 10-16 period, exports totaled $3.494 billion while imports were $2.967 billion. The ministry didn't offer figures for the corresponding week of 2007. With the early-March figures, Brazil's year-to-date surplus totaled $2.19 billion, well lower than $6.4 billion seen in the same period of 2007. Brazil's trade surplus is likely to decline in 2008, according to a survey of economists released earlier Monday by the Central Bank of Brazil. The economists offered a median forecast for the 2008 surplus of $29 billion. Brazil's trade surplus is likely to decline because of the appreciation of the Brazilian real against the U.S. dollar, which has made imports cheaper and discouraged exports of manufactured products. The real gained 20.2% against the dollar in 2007 and has gained approximately 5% so far in 2008.

Jeff Bailey : 3/17/2008 10:35:20 AM

HSBC Holdings (HBC) $76.01 -1.28% ... rallies back to 19.1% conventional ($76.03).

Keene Little : 3/17/2008 10:34:15 AM

Since the DOW might lead the way, it will be important to see what happens if and when it reaches Friday afternoon's high of 12040. That's the level that needs to be broken as a first step towards putting in a bottom. In the meantime, this morning's rally means nothing. So far, as big as the recovery is, it's just noise.

Jeff Bailey : 3/17/2008 10:33:57 AM

ANALYSIS: Counterparty Risks Rattle Europe's Money Markets

DJ- Interbank borrowing rates mostly move higher today as funding pressures continue to mount amid heightened concerns over the credit worthiness of counterparties in the wake of the collapse of Bear Stearns, writes Keith Jenkins.

Linda Piazza : 3/17/2008 10:32:21 AM

Here it goes. Let's see if it holds. The SPX is now testing its 15-minute 9-ema, now at 1278.80. This ema hasn't been as good a benchmark lately as it's been other times in the past, but it certainly was on Friday until the late-day short-covering push. The SPX did not manage a 15-minute close above it after testing it in the last 15-minute period, but it's rising above it as I type.

Keene Little : 3/17/2008 10:30:35 AM

The DOW is clearly more bullish (less bearish?) this morning as it erases its morning loss. The SPX is obviously affected more by the brokers and banks. The small caps and techs still lag the rest.

Jeff Bailey : 3/17/2008 10:29:53 AM

Pacholder High Yield (PHF) $7.69 -3.14% ... would threaten a new 52-week low CLOSE (08/16/07 $7.73)

3/13/08 NAV was $8.06. Link

Jeff Bailey : 3/17/2008 10:25:37 AM

NASDAQ A/D 687/1,954 ... NH/NL 19:342

Jeff Bailey : 3/17/2008 10:25:10 AM

NYSE A/D 490/2,512 ... NH/NL 19:428

Linda Piazza : 3/17/2008 10:25:00 AM

The OEX is stronger than the SPX today when viewed on a Keltner chart. The OEX did clear that first 15-minute resistance on the close and the slight pullback a few minutes ago was toward the new potential support now at 588.95. The OEX's 15-minute 9-ema is now at 591.71.

This means that the generals are getting more bullish attention than other stocks. To believe that the rally is sustainable, we need to see wanna-be bulls taking on some risk in the form of the riskier stocks and not just the generals. However, when I look at the RUT, I see that its behavior echoes the OEX's. When I look at the MID (S&P MidCaps), it echoes the SPX, so I'm a bit stumped for an explanation. The generals and the riskier small-caps getting the most bullish attention? Are we seeing two calibers of wanna-be bulls attempting to bottom fish?

Jeff Bailey : 3/17/2008 10:23:21 AM

Intercontinental Exchange (ICE) $124.84 -4.94% ...

Jeff Bailey : 3/17/2008 10:22:51 AM

CME TO BUY NYMEX HOLDINGS FOR $3.4B CASH

DJ- CME Group and Nymex Holdings announce the completion of a $9.3 billion agreement under which the Chicago Mercantile Exchange operator will acquire the parent of New York Mercantile Exchange.

CME $459.73 -5.41% ...

NMX $87.92 -7.78% ...

Linda Piazza : 3/17/2008 10:20:04 AM

The SPX's first Keltner resistance held on that last 15-minute close. That resistance is now at about 1272.50 with the SPX at 1271.25 as I type. Potential support is now at 1267.81 on 15-minute closes, but that's light support. Those who want the SPX to steady would rather that it consolidate near its current level or else climb through that resistance.

Keene Little : 3/17/2008 10:19:38 AM

Updating the SPX 60-min chart shows this morning's drop tagged the trend line along the lows since Feb 7th (the bottom of a potential descending wedge): Link . It's possible we just saw an important low but unfortunately it will take quite a rally to prove that. We've got a lot of volatility and strong moves in both directions and the choppy move lower is either an ending pattern (the descending wedges) or it's building up for a crash leg lower.

The bulls will need to get SPX above 1298 to indicate that a bottom could be in and above 1333 to prove it. In the meantime stay aware of huge potential for a lot of chop and whipsaw. The daily chart shows the descending wedge idea since the Feb 1st high and the potential for it to be the end of the 5-wave decline from October, meaning a multi-month rally could be set to start. But if 1260 gives way and is not recovered quickly, the bears will win this battle. Link

Jeff Bailey : 3/17/2008 10:20:35 AM

AMEX Airline Index (XAL.X) 23.86 -3.55% ... Has probed -19.1% (23.75) conventional. (100% 10/08/07 relative high to its 0% 01/09/08 relative low)

Jeff Bailey : 3/17/2008 10:18:18 AM

Dow Transports (TRAN) 4467 -0.87% ...

Jeff Bailey : 3/17/2008 10:17:43 AM

CSX SEES PROFIT ABOVE VIEWS, TO BOOST DIVIDEND

DJ- Railroad giant sees full-year earnings of $3.40 to $3.60 a share, above analysts' views of $3.05. CSX will boost its quarterly dividend by 20% and aims to buy back $3 billion in stock through 2009.

CSX $49.04 +0.14% ...

Jeff Bailey : 3/17/2008 10:16:42 AM

NET FOREIGN BUYS OF US SECURITIES RISE TO $47.2B

DJ- Net foreign acquisition of long-maturity U.S. securities rises to $47.2 billion in January, up slightly from December, according to U.S. Treasury Department report. Monthly net TIC flows fall to $37.4 billion, down 49% from $72.7 billion in December.

Jeff Bailey : 3/17/2008 10:15:41 AM

Wilshire 5000 (DWC) 12,832 -1.23% ... reclaims its 1/23/08 relative low (12,814)

Linda Piazza : 3/17/2008 10:15:00 AM

The SPX's tests first resistance on 15-minute closes at about 1273 now. The SPX is at 1273.46 as I type. The 15-minute 9-ema is now at 1279.09.

Jeff Bailey : 3/17/2008 10:13:51 AM

NY FED MANUFACTURING INDEX HITS RECORD LOW

DJ- Federal Reserve Bank of New York's manufacturing index drops to -22.23 in March, eclipsing the record-low of -19.6 set in November 2001. Economists expected index to improve to -7.4 from -11.72 in February.

Jeff Bailey : 3/17/2008 10:13:18 AM

CURRENT ACCOUNT GAP LESS THAN EXPECTED

DJ- The U.S. current account deficit narrows sharply to $172.9 billion during October through December from a revised $177.4 billion in the third quarter as the surplus on income rose dramatically.

Jeff Bailey : 3/17/2008 10:12:40 AM

BOE RECEIVES BIDS WORTH £23.6B IN SPECIAL FINE-TUNING OP

DJ- The Bank of England says that it received bids worth £23.6 billion in its extraordinary fine-tuning operation, far more than the £5 billion it had offered. This means that 21.19% of bids were allocated.

Linda Piazza : 3/17/2008 10:11:25 AM

The TRAN, one of the indices I watch as a sort of indicator for SPX, OEX, and Dow movements did drop about 10 points below Friday's 4454.95, but never even approached Thursday's. I don't ever make trade decisions based on potential divergences, but I do make what-if plans when I see them. This is a bullish divergence if it holds up.

Jeff Bailey : 3/17/2008 10:09:36 AM

HSBC Holdings (HBC) $75.03 -2.55% ...

Jane Fox : 3/17/2008 10:08:19 AM

The German DAX and the American DOW usually trade in sync but the DAX is making new 2008 lows and is not in sync with the DOW/ Link

Jane Fox : 3/17/2008 10:10:51 AM

Interestingly though the DOW is not making new yearly lows. Link

Jeff Bailey : 3/17/2008 10:06:59 AM

BEAR STEARNS' TRAVAILS PUT ASIAN FIRMS ON GUARD

DJ- Bear Stearns' near collapse from a liquidity crunch, and its subsequent takeover by JPMorgan, has put Asia's financial institutions on guard for defaults from counterparties at banks, hedge funds and brokers around the world.

Jane Fox : 3/17/2008 10:06:25 AM

Well there we have new lows for 2008.. Link

Jeff Bailey : 3/17/2008 10:05:36 AM

DIA, SPY, IWM and QQQQ Montage daily interval chart Link

DIA holding near-term upward trend.

Jane Fox : 3/17/2008 10:04:59 AM

TRINs daily high so far has been a very neutral 1.22 but I see the TRIN and the VIX moving in opposite directions and these two usually move in the same direction.

Jane Fox : 3/17/2008 10:03:34 AM

VIX is making new daily lows here so the bulls are in control, according to the VIX. Of course the AD line at -2377 tells a different story. Link

Linda Piazza : 3/17/2008 10:03:07 AM

The SPX's next important short-term resistance is now 1273.26 on 15-minute closes. The 15-minute 9-ema is 1278.58.

For the OEX, those levels are 589.26 (with the OEX slightly above that now) and 592.09.

Linda Piazza : 3/17/2008 9:57:46 AM

Keltner outlook on the A/D line: Potential support now extends down to about -2700, but those who want equities to steady would really like the A/D line to maintain values above about -2450, hugging the Keltner support near there, and then to climb above it.

Jeff Bailey : 3/17/2008 9:55:18 AM

Sector Winners ... Gold Bugs +0.84%, Pharmaceuticals +0.32% and Treasuries

Linda Piazza : 3/17/2008 9:53:47 AM

The SPX now has a potential downside target near 1256.40, set on the 15-minute chart, but be leery of targets set during the first 15-minute period. However, that will be maintained as a potential downside target until and unless the SPX sustains 15-minute closes above 1273.90. The price action has been so crazy lately that it's scrambled Keltner charts and the SPX just zooms through support and resistance lines and then turns around in midstream. However, that 1273.90 area also roughly conforms to a descending trendline drawn off the Tuesday low, Friday morning low and Friday afternoon low, so I think it probably has some validity as a benchmark.

The analogous benchmark for the OEX is 589.53 on 15-minute closes.

Jeff Bailey : 3/17/2008 9:52:26 AM

IMF Strauss-Kahn: Fed Took Prompt Measures

Jeff Bailey : 3/17/2008 9:51:05 AM

Bear Stearns (BSC) $3.64 -87.90%

JP Morgan (JPM) $38.02 +4.02% ...

Jane Fox : 3/17/2008 9:50:10 AM

AD line is a very bearish (and of course expected) -2539.

Linda Piazza : 3/17/2008 9:48:53 AM

The USDJPY is now at 96.97. Unfortunately, the shape of the rise, as seen on a 60-minute chart, is still looking like a bear-flag climb. When viewed on a 15-minute chart, the USDJPY has now established a short-term pattern of finding support on 15-minute closes and then bouncing off the 15-minute 9-ema, now at 96.84. Equity bulls would like to see that pattern continue.

Linda Piazza : 3/17/2008 9:43:51 AM

A/D line touches potential support, which now layers down to -2615.82. Just like equities, the A/D line can and does create breakout situations, as it did last Tuesday when it broke out to the upside, but most times this turns out to be strong support. If it isn't this time, that tells us something more about the momentum. The A/D line is at -2360.

Keene Little : 3/17/2008 9:42:21 AM

Nice "little" 100-point bounce in the DOW futures (YM) off its 11729 9:28 AM low. But will it hold? The overnight low is 11671 and remains a magnet for now. S&P futures (ES) overnight low was 1253 and trading 1266 here.

Linda Piazza : 3/17/2008 9:39:19 AM

Keltner outlook on the A/D line: The A/D line approaches potential support from -2200 to -2400 on 15-minute closes. It's at -2029 as I type. That support will get pushed lower as the A/D line dives. This is support that frequently holds, so bears need to be aware and watchful of bounce potential, but no 15-minute support is going to hold if this turns into some kind of capitulation day. Just be aware of the potential for a bounce.

Keene Little : 3/17/2008 9:37:47 AM

The DOW dropped back down near the 11750 support zone (January 2000 high) and SPX has dropped below 1270. As mentioned last night, 1260 is going to be a key level. Gold is still up but it has given up most of its overnight high.

Linda Piazza : 3/17/2008 9:36:03 AM

OEX traders: The OEX is at potential support on daily closes as I type, with that at about 584.70 for the OEX. The 15-minute chart shows potential support on the first 15-minute close at 589.80, which the OEX is obviously well below. The OEX could and sometimes does bounce big enough to surprise and close back above such support in the first 15-minute period, but if it doesn't, it has set a downside target just under 582, which it could very well reach in the first 15-minute period. Be leery of first 15-minute action and don't count on all targets being met.

Linda Piazza : 3/17/2008 9:33:44 AM

FWIW, the SPX's potential support on 15-minute closes is down to 1273.43. If the SPX violates that (as it's doing as I type) and doesn't bounce back near it by the close of this 15-minute period, it will have set a potential downside target near 1257. If it just dives toward 1257, remember that there's potential support at that level, too. The SPX is at 1268.98 as I type.

Linda Piazza : 3/17/2008 9:27:35 AM

You get the caveat before the information today. If today is going to be a capitulation day, then no potential support levels I mention are going to matter at all. However, I wanted to look at potential support on a daily Keltner chart, to give you some information, at least. On that daily chart, potential support on daily closes is layered down to about 1260, although that will lower a bit if futures do dive at the open. There are no guarantees for bulls that support will hold on a daily close, but I want to show a chart that shows bears, at least, to be careful, because Keltner support does sometimes work exactly as it should. So, if bearish, be protect of profits. Link The support lines turn sharply lower, and so are not as strong as they were in January or even last week, but if bearish, keep in mind the possibility that an early downdraft could still result in a daily close at or above those lines.

Jane Fox : 3/17/2008 9:24:15 AM

Not sure how to tie Crude's drop in the Bear Sterns news or if one should even try. Crude is just taking a needed retracement Link

Jane Fox : 3/17/2008 9:20:23 AM

I see BSC is now trading at $3.29/share.

Jane Fox : 3/17/2008 9:19:52 AM

Needless to say there was a flurry of action in the Gold market as many took a flight to safety but then rethought it and decided well maybe not. Gold hit a high of $1033 overnight. Link

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

Of course the overnight picture is bleak but not as bleak as you would have expected. There was the initial drop but around 10:30PM EDT the markets found a bottom and has been consolidating sideways every since. Link

Jane Fox : 3/17/2008 9:12:55 AM

I was watching the futures last night and noticed them moving a great deal, both up and down so I went looking for some news. I opened up the WSJ homepage and there was an announcement that JP Morgan was buying Bear Sterns for $2.00 a share. I thought for sure this was a mistake (although the WSJ does not make many mistakes) and started looking at other news sources. Sure enough it was $2.00 a share. Oh my gosh.

I don?t follow BSC much but after Friday had it on my radar screen. I went back and looked at its all time high and didn?t have to go back all that far. BSC hit a high of $170 back in January 2007.

I?m not sure how many of you remember Keene and I commiserating on the obscene money some of these Wall Street firms were making last year and the bonuses that were been doled out. I think they needed to be reined in but I certainly was not hoping for anything as drastic as this. There are many many little guys who will be hurt.

Jane Fox : 3/17/2008 9:01:58 AM

Dateline WSJ - Pushed to the brink of collapse by the mortgage crisis, Bear Stearns Cos. agreed -- after prodding by the federal government -- to be sold to J.P. Morgan Chase & Co. for the fire-sale price of $2 a share in stock, or about $236 million.

Bear Stearns had a stock-market value of about $3.5 billion as of Friday -- and was worth $20 billion in January 2007. But the crisis of confidence that swept the firm and fueled a customer exodus in recent days left Bear Stearns with a horrible choice: sell the firm -- at any price -- to a big bank willing to assume its trading obligations or file for bankruptcy.

"At the end of the day, what Bear Stearns was looking at was either taking $2 a share or going bust," said one person involved in the negotiations. "Those were the only options."

To help facilitate the deal, the Federal Reserve is taking the extraordinary step of providing as much as $30 billion in financing for Bear Stearns's less-liquid assets, such as mortgage securities that the firm has been unable to sell, in what is believed to be the largest Fed advance on record to a single company. Fed officials wouldn't describe the exact financing terms or assets involved. But if those assets decline in value, the Fed would bear any loss, not J.P. Morgan.

Linda Piazza : 3/17/2008 8:09:35 AM

I had hoped that by this morning, forex markets might show some improvements. The USDJPY has strengthened a little off its 95.76 low, being currently at 96.59. It's been the USDJPY pair that has been most predictive of or at least corroborative of U.S. equity strength over the last years. As I've been mentioning for months, that intermarket relationship might shift and change at some point, but lately, they've still be corroborating each other. So, those who want U.S. equities to recover want the dollar to find strength against the yen as just one part of the under-the-hood goings-on. The one bright spot to all this is that speculation had arisen last week that the USDJPY might fall into the mid 90's, as I mentioned Thursday night in my Wrap, and it's certainly now fallen into that zone. Wherever it's going, it's at least closer to the bottom than it was!

Remember that what happens is not only up to us. Japan has a storm going on, too, with the identity of the new head of its central bank still unknown, and the stance of that central banker unknown, too. Articles on Nikkei Net this morning speculate that some at the central bank want someone who has the "strength to do nothing," not following an "interventionist creed." Reading between the lines that might suggest a rising yen, but the central bank is perhaps in such upheaval that it's hard to know what will happen. If Deputy Governor Muto had been chosen, some had expected him to follow Governor Fukui's lead and some had thought him perhaps even a bit more dovish. The government has pushed back its plan to suggest a nominee today, increasing chances that the central bank will be rudderless by late this week. I believe that Governor Fukui leaves Wednesday, if I'm remembering correctly. In a time when the globe's central bankers have needed to cooperate to avert a catastrophe in financial markets, that's not a good development. Of course, that's presuming that the central banks provide more help than harm, something some would question these days.

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