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Keene Little : 3/24/2008 11:37:44 PM

Tuesday's pivot tables: Link and Link

A review of different sectors gives me different impressions and the price pattern over the past many weeks gives me agita. I'm having lots of arguments with myself lately as to which way this market is heading next. At the end of the day on Monday I showed charts of the banks (BIX) and semiconductors (SMH), both looking like they're pointing to the downside as the next probable move. But charts of other sectors are not in agreement.

By climbing above last Wednesday's high near 1342 and breaking the downtrend line from December, the SPX chart has turned at least short term bullish. The next resistance level is near 1380 (two equal legs up from last Thursday), 1388 (the Feb 27th high) and then layered resistance up to 1450. It takes nearly a 100-point drop to turn the price pattern bearish again. Daily chart update: Link

For the DOW I've put back on its daily chart the idea that we could see a larger sideways consolidation into May (dark red) before letting go to the downside again: Link . This is based on all the 3-wave price action we've been seeing which is usually indicative of a correction (a correction of the October-January decline in this case).

This says the DOW will stall just above 12700 and turn back down towards the bottom of its large trading range heading into April. Traders are going to be real sick of this market by May if this plays out. The happy ones will be credit spreaders. The more bullish possibility is for a rally at least up to its downtrend line from October, near 13K, pull back and then continue rallying higher into May.

Jeff Bailey : 3/24/2008 11:03:40 PM

Bull Confirmed! ... At tonight's close, Dorsey/Wright and Associates' narrower S&P 100 Bullish % (BPOEX) achieved "bull confirmed" status at 40%, rising to 44.00%.

Here's StockCharts.com's $BPOEX Link

Jeff Bailey : 3/24/2008 10:56:45 PM

Bull Alert! ... At tonight's close, Dorsey/Wright and Associates' very broad NYSE Bullish % (BPNYSE) reverses back up to "bull alert" status at 33.08% (32.00% chart).

Here's StockCharts' $BPNYA Link which also reverses back up.

OI Technical Staff : 3/24/2008 9:59:59 PM

The Market Monitor has been archived.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

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

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 3/24/2008 5:23:17 PM

Valero Projects Earnings Well Below Street View

DJ- Valero Energy Corp. (VLO), which in January saw improving refining market conditions, projected first-quarter per-share earnings well below analyst estimates amid tight margins and outages at several plants.

The news sent Valero's shares down in after-hours trading.

Margins at many refinery companies have been squeezed as domestic energy companies have run into trouble passing record energy prices along to consumers. However, Valero lifted the market in January by saying that "industry conditions are setting the stage for rebounding gasoline margins."

The Texas oil refiner now expects first-quarter per-share earnings of 10 cents to 35 cents, compared with the mean per-share earnings estimate of analysts polled by Thomson Financial of 91 cents.

Valero said it "expects throughput margins on gasoline and certain other products such as petroleum coke, residual fuel oil, and petrochemicals to be significantly lower in the first quarter of 2008."

In addition, "unplanned" outages shaved throughput margins by about $400 million.

"First quarter results have been adversely affected by operating and equipment issues, particularly at its Port Arthur, Aruba and Delaware City refiners," the company said.

The company's fourth-quarter net income was down 49% in what it called "difficult conditions."

Valero expects to post results on April 29.

Jeff Bailey : 3/24/2008 5:07:00 PM

Closing U.S. Market Watch at this Link

Keene Little : 3/24/2008 4:49:28 PM

The bounce in the home builders finished right at its 200-dma. For obvious reasons the bulls will want to see the rally continue, or worst case for it to consolidate for a day or so beneath that resistance. Link

Keene Little : 3/24/2008 4:44:45 PM

One thing I find very interesting on the BIX chart that I posted (3:58 PM) is the fractal nature of its moves over the past few months. If you look at the decline from December to its early-January low and then the decline from February to the early-March low you will see they look very similar. Both of those lows were then followed by a bounce, marginal new low and then rally.

These fractal patterns can sometimes be predictive so the question for me tonight is whether we'll see another decline like the ones from December and February. If we do it could be the last one that marks a bottom for the banks (shown in pink on the chart).

Jeff Bailey : 3/24/2008 4:39:52 PM

Closing Internals at this Link

Jeff Bailey : 3/24/2008 4:08:08 PM

Sure has the look of some Q1 rebalancing

Jane Fox : 3/24/2008 4:07:00 PM

Economic Reports on the docket for tomorrow include:

7:45a.m. ICSC Chain Store Sales Index. Previous: +0.4%.

9:00a.m. Jan Case Shiller Home Price Index. Previous: -9.8%.

10:00a.m. Mar Conference Board Consumer Confidence. Expected: 73. Previous: 75.

10:00a.m. Mar Richmond Fed Manufacturing Index. Previous: -5.

Jeff Bailey : 3/24/2008 4:06:51 PM

Since 03/03/08 ... sector losers HMO.X, HUI.X, XAL.X

Jeff Bailey : 3/24/2008 4:04:02 PM

Since 03/03/08 ... sector winners DJUSHB, BIX.X, TRAN, SWH

Keene Little : 3/24/2008 3:58:10 PM

The price pattern of the banks (BIX) leaves much to be desired as far as providing better clues as to what it's up to. The daily candle today is a shooting star and therefore a potential reversal candlestick pattern (needs a down day tomorrow to confirm). This after finding resistance at its 100-dma at this morning's high: Link

A rally back above this morning's high would be bullish for at least a run up to its 200-dma, currently near 322 and dropping. Otherwise a turn back down could have it chopping lower. Choppy is the operative word here--its decline has been marked with lots of 3-wave price action and that says expect lots more chop for now.

If the semis and banks drop back down tomorrow it will be potentially bearish for the broader market.

Jeff Bailey : 3/24/2008 3:56:19 PM

MTG $13.00 -0.45% ...

Jeff Bailey : 3/24/2008 3:56:08 PM

RDN $8.20 +17.14% ...

Jeff Bailey : 3/24/2008 3:55:56 PM

PMI $6.99 +18.07% ...

Jeff Bailey : 3/24/2008 3:55:34 PM

ABK $6.39 -4.62% ...

Linda Piazza : 3/24/2008 3:54:49 PM

As unfortunately happens so often, the SPX looks as if it will end the day at the point of greatest confusion. It's right on the trendline that I mentioned earlier. The OEX is similar. It attempted a breakout above a longer-term trendline, the descending one that's been in place most of this year, but, barring a big move into the close, it's closing right back on that trendline. Is this a failed breakout or just a pullback to support? We'll have to find out tomorrow, but be aware that there's the possibility that indices will now roll down from the resistance tested today or perhaps from another attempt to push above it. That's not promised, but is a possibility.

Jeff Bailey : 3/24/2008 3:54:35 PM

VIX.X 25.94 -2.55% ...

Jeff Bailey : 3/24/2008 3:54:21 PM

IUX.X 314.94 +1.06% ...

Jeff Bailey : 3/24/2008 3:54:08 PM

XBD.X 166.55 +2.53% ...

Jeff Bailey : 3/24/2008 3:53:52 PM

BKX.X 86.22 +0.43% ...

Jeff Bailey : 3/24/2008 3:53:32 PM

BIX.X 263.11 -0.90% ...

Jeff Bailey : 3/24/2008 3:52:43 PM

Swing trade call option exit alert! ... for the one (1) MBIA Inc. MBI May $15 Call (MBI-EC) at the bid of $1.70.

MBI $14.15 +10.59% ...

Linda Piazza : 3/24/2008 3:43:13 PM

The SPX is now finding resistance on 15-minute closes at the 15-minute 9-ema, now at 1353.17. It's retracing toward the former trendline resistance (3/12 and 3/19 highs) and Keltner potential support at 1348.68. Bulls don't want to see the SPX reverse deeply under that trendline as that suggests a potential invalidation of that inverse or reverse H&S that appeared to be confirmed on this morning's breakout.

Jeff Bailey : 3/24/2008 3:38:50 PM

S&P Banks (BIX.X) 264.00 -0.57% ... slips red. MONTHLY Pivot here.

Keene Little : 3/24/2008 3:36:23 PM

Much below SPX 1348 (about 1.50 points lower, make that 2.50 points--getting a little bounce again) will have me thinking we've seen the top. Just be careful over the next 10 minutes to see what kind of orders hit here.

Jeff Bailey : 3/24/2008 3:35:12 PM

DOJ: Clears $4.2B XM-Sirius Satellite Radio Merger

XMSR $13.74 +15.07% ...

SIRI $3.11 +7.24% ...

Jeff Bailey : 3/24/2008 3:27:25 PM

Whirlpool (WHR) $88.55 -0.22% ... slips red. WHR-PP $1.30 x $1.45.

Linda Piazza : 3/24/2008 3:26:36 PM

It's time to being the process of making end-of-day decisions for your trades. The SPX's big gain pushed it above the 30-sma and toward building resistance (trendline and daily 72-ema) up about 1369-1371. If the SPX can maintain values near its current 1353.85 or above into the close, then it's possible that an early morning rise could push the SPX up to test that level, but, if so, I would be leery of pullback potential. One of these days, markets are going to start breaking resistance rather than support, but for now, we have to consider the possibility that resistance that's held for most of this year will continue to hold. If markets should gap above that resistance tomorrow morning, that might be a different story, but I'd say that for now you have to consider the possibility that the SPX might be approaching or soon approaching significant resistance and plan accordingly. If you've got a big cushion on a position small enough that you can take a risk, you might make a different decision than someone who took a bigger risk that was account appropriate and who agonized over the trade all weekend.

Keene Little : 3/24/2008 3:17:29 PM

We've got a rounded top appearance to today's high and that's actually starting to make this look a little more bearish at the moment. The bulls need to step back in fairly soon otherwise the decline could take on a waterfall appearance and give up the bulk of today's gains very quickly. If they can hold on for another 20 minutes (getting a little bounce as I type) and get some market-on-close buy orders this consolidation should turn into another leg up.

Jane Fox : 3/24/2008 3:15:28 PM

Dateline CNN - -- The Justice Department has approved a merger between Sirius Satellite Radio and rival XM Satellite Radio.

Jeff Bailey : 3/24/2008 3:15:09 PM

03:00 Internals at this Link

Linda Piazza : 3/24/2008 3:12:46 PM

There's the danger of a period of disorganization setting in now with the SPX chopping back and forth across the 15-minute 9-ema, now at about 1353.85. That moving average is beginning to roll over now, though, so that the saucer- or bowl-shaped reversal pattern gains more potential, too. What bulls want to see is either that chopping back and forth or else a quick bounce back above that average. What bears want to see is to see a drop and then sustained SPX values beneath 1347, with the curling over 15-minute 9-ema forming resistance on 15-minute closes.

Keene Little : 3/24/2008 3:03:37 PM

I posted a chart of the semiconductors (SMH) last night ( Link ) and said a rally above the Feb 1st high of 30.24 would be bullish. This morning it rallied quickly to a high of 30.28 and dropped sharply back down and has been consolidating since (but looking like it's getting ready to drop lower). There is the bearish possibility that we saw a throw-over finish to its consolidation pattern. At this point I'd say it would be bullish above 30.28 but it's still bearish until then: Link

Linda Piazza : 3/24/2008 2:56:13 PM

The OEX is reaching toward potential Keltner support from 627.23-628.75 on 15-minute closes. Bulls want this to hold.

Linda Piazza : 3/24/2008 2:55:25 PM

Potential SPX support on 15-minute closes is now being tested. That's now at about 1352.80 with the SPX at 1352.76. Further support is near 1346.05, but that will weaken the Keltner outlook a bit.

Jeff Bailey : 3/24/2008 2:55:00 PM

Stillwater Minings (SWC) $16.60 +4.66% ... maintain bearish stance. Target $12.50.

Jane Fox : 3/24/2008 2:54:31 PM

The MID.x charts are the opposite of the Gold charts. Both the monthly and weekly are red so this is telling you the bears are in control and we need to be on the lookout for rally to sell.

The way we identify a rally is the daily turning green and when the 120/60 minute turn back red we have a sell signal. Link

Jeff Bailey : 3/24/2008 2:54:15 PM

Goldcorp (GG) $37.20 -0.29% ... reversing gains.

Jeff Bailey : 3/24/2008 2:52:26 PM

Technical action in TRAN is NOT conducive to U.S. recession.

Jeff Bailey : 3/24/2008 2:51:34 PM

Dow Transports (TRAN) 4,876 +3.58% ... 2008 highs. Threatends to close above a still rounding lower 200-day SMA (4,798) for first time since closing below on 10/10/07.

Jeff Bailey : 3/24/2008 2:49:34 PM

AMEX Airline Index (XAL.X) 27.68 +4.49% ... back to challenge 0% conventional, or its 01/09/08 low. Tested -19.1% last week at 23.75.

Jane Fox : 3/24/2008 2:47:48 PM

Here are the jtHMA charts for Gold. Both month and weekly are green telling you the bulls are in control and we need to be looking for an opportunity to 'buy the dip.' The 'dip' is identified when the daily turns red (the dip) and then for the 120 and 60 minute charts turn back green (the dip is over and the trend will now continue).

The daily Gold charts are now red so we just need the 120 and 60 charts to turn back green and we have a buy. Link

Linda Piazza : 3/24/2008 2:47:31 PM

After testing the Keltner support that layers down to 1352.69 currently, the SPX attempts a rise. Resistance is now at 1359.54 on 15-minute closes, but it's light resistance. Equity bulls would like to see a new high while bears want to see values sustained below 1352.54 and then 1345.86. So far, the breakout status is maintained.

Jeff Bailey : 3/24/2008 2:45:57 PM

Netflix Site Goes Down, Blocking User Access ... NFLX $38.77 +6.98% ...

Jeff Bailey : 3/24/2008 2:37:47 PM

FXI Fact Sheet Link

Jeff Bailey : 3/24/2008 2:35:09 PM

VIX.X 25.27 -5.07% ...

Jeff Bailey : 3/24/2008 2:34:01 PM

Swing trade call alert! ... for one (1) of the iShares FTSE/Xinhua China 25 FXI April $135 Calls (FAH-DE) at the offer of $5.70.

FXI $131.01 +3.09% ...

No stop for now, target $145.00.

Keene Little : 3/24/2008 2:22:29 PM

The "pullback" is more of a sideways consolidation and it's possible we'll simply consolidate a little longer but the longer it does that the more it will look bullish. Market on close orders today could be quite bullish if the highs are held this afternoon. Many fund managers have been waiting for confirmation that a bottom is in for now and they could be getting ready to jump in.

Linda Piazza : 3/24/2008 2:21:19 PM

The OEX is already above a trendline analogous to the SPX one shown in my 2:18:31 post. That's why I'd suggested earlier today that even SPX traders watch the OEX for guidance as it's been outperforming the SPX by some measures over the last couple of weeks. If it's sold back below that trendline by the end of the day, that would be troublesome.

Keene Little : 3/24/2008 2:19:41 PM

The price pattern of the pullback looks like a correction to the rally and as such I expect a continuation higher. It's possible the pullback is finishing here.

Linda Piazza : 3/24/2008 2:18:31 PM

Whether you interpret this formation as a bearish right triangle or incorporate all the lower candle shadows and draw it instead as a bullish falling wedge, the SPX today approaches the top of that formation in red. This, then, is an obvious testing of potentially strong resistance. Resistance can be broken, of course, but at least be aware of what's happening and protect your profits appropriately. Link I'm not smarter than everyone else or seeing something unique. Everyone in the markets can draw that trendline. If big money's intention is to distribute, that's likely going on as prices rise, and the SPX could give out at any time. If big money has been accumulating and wants us to help them out with raising prices, all they have to do is to gap prices above that trendline, perhaps tomorrow morning, and all the shorts and want-to-be-bulls who have been watching that trendline will gladly help them do it. Well, not too gladly in the case of the shorts.

Linda Piazza : 3/24/2008 2:08:06 PM

The OEX is testing support that layers down to 628.24 on 15-minute closes. OEX bulls want that support to hold and the OEX to bounce to a new high. Keep your stops at account-appropriate levels as the OEX has been in breakout mode all day and is therefore somewhat more vulnerable to a pullback that goes deeper, finding more stable support. Breakout modes can continue for a day to a day and a half.

Linda Piazza : 3/24/2008 2:06:20 PM

The SPX is testing support again as the VIX rises to test resistance. SPX bulls want to see the SPX find support on 15-minute closes at or above 1352.13 and then to bounce into a new high to confirm that holding of support. The SPX has been in breakout mode all day, however, and is a bit vulnerable now. Keep your stops at account-appropriate levels.

Linda Piazza : 3/24/2008 1:59:13 PM

Also, I like to get into my next set of spreads and/or condors about 45-55 days before expiration. We're right there for May, being 42 days away. Unfortunately, there's no premium at any strike I want. However, I thought I'd mention that as part of my explanation of what I'm doing. I repeat what I've repeated so often before: I'm not setting myself up in competition with Mike Parnos. Each time I mention this, I mention that in my effort to find a workable exit strategy for going-well and going-bad credit spreads last year, I tried a disastrous hedging method last summer that wiped out months of carefully gathered profits. It would be laughable with that behind me to claim I'm the expert, and that's not the way I'm made anyway. My original hiring was as a representative of the self-taught trader so you could watch my efforts to teach myself and readjust to market conditions, and that's still my purpose.

Strangely enough, you may think, I don't regret that disastrous month. It was part of my efforts to meet last year's trading goal, and it led to further testing that resulted in a strategy that has worked for me. It's worked because it's helped me manage emotions, and that's allowed me to keep trading, to have $75,000-90,000 at risk in the markets most option expiration cycles.

Linda Piazza : 3/24/2008 1:53:18 PM

If you're interested and have April bull put spreads, you could take a look at them today and see if you could close them out and lock in enough profit that's agreeable for you. As I've explained before, I'm handling the risks of this volatile and unpredictable market by locking in my profit when I can do so and keep 60 percent of my original credit. That's part of my risk management style for now, but it hopefully won't be for forever, or even for the rest of this year. As of this morning, I am now out of all April condors and unmatched credit spreads and have my profit locked in. If the SPX rises high enough, I may try another April bear call credit spread. I'm not certain that it will rise high enough to allow that as I'm going to try for a 5-point spread instead of a 10-point one in case we get that monster relief rally that we should get any time now. For now, I'm out of everything for April. If I wake up tomorrow and the Bear Stearns deal has completely unraveled or if there's another Bear Stearns or Societe Generale or something else, I'll be fine. Making less profit than I want to make, but fine.

Linda Piazza : 3/24/2008 1:42:28 PM

The VIX still maintains support on 15-minute closes at potential Keltner support now at about 24.90. Resistance appears to be firming as well, however, with that at about 25.40 on 15-minute closes. Watch for the direction of the breakout for corroboration of your trade while remaining wary of a whipsaw setup as this is such a typical stop-running time of day.

Linda Piazza : 3/24/2008 1:39:30 PM

A warning: we're entering a typical stop-running time of day. As I said last week, this isn't due to big money coming in and maliciously running stops. Rather, it's due to a testing to see either whether support is going to hold or resistance is, whichever is in the direction big money wants to hold, and then a resultant move after that test has occurred. Anyway, decide whether you want to widen stops to accommodate such testing, something you might do if your intention is a swing or position (1 or 2 weeks) trade, or narrow them, something you might do if you're in a scalping or day trade and perhaps risked too much and can't afford to lose money.

Jeff Bailey : 3/24/2008 1:38:19 PM

New Study By Americans for Balanced Energy Choices reveals individuals and families making less than $50,000 per year will pay 22% of their after-tax income for energy, double the amount of just a decage ago. That means 60 million households in the United States are using nearly $1 of every $4 in net earnings for energy, with energy costs now approaching the proportion for housing.

Linda Piazza : 3/24/2008 1:36:15 PM

The SPX is rounding over, of course. It needs to bounce soon or it risks rounding over into a saucer- or bowl-shaped form that is typically bearish. Perhaps before it bounces, if it does, it might drop to test the 15-minute 9-ema now at 1355.42 or even 1351.21-1352.93 support, with both potential support on 15-minute closes.

Jeff Bailey : 3/24/2008 1:33:01 PM

DIA, SPY, IWM and QQQQ Montage ... Daily intervals with conventional we've been usings. Adding : Stochastices for what I see as a near-term range Link

Early morning action when SPY came back and tested its MONTHLY Pivot, but "weaker RUT.X/IWM" did not suggest further strength in RUT.X/IWM to WKLY R2s.

Jeff Bailey : 3/24/2008 1:20:30 PM

Dow Diamonds (DIA) $125.90 +2.25% ... smidge above its 38.2% conventional.

Jeff Bailey : 3/24/2008 1:12:48 PM

01:00 Internals found at this Link

Keene Little : 3/24/2008 1:22:32 PM

The bond market has had a big move today. The 30-year bond is down a full two handles and the yield, at 4.3%, is up +3.2% today. The 10-year yield, at 3.5%, is up +5.4%. That money rotating out of bonds has obviously benefitted the stock market.

Linda Piazza : 3/24/2008 1:02:44 PM

The SPX's 15-minute 9-ema is now 1353.71 with further potential support on 15-minute closes at 1351.32. The OEX's analogous numbers are 630.21 and 627.65. If you're in bullish trades, your task is easy now until we get closer to the close and you have to make end-of-day decisions. Follow these trades higher with your stops. If the calls you bought have doubled in value, do consider locking in your profit on at least a portion and moving the stop up at least to breakeven on the rest.

Keene Little : 3/24/2008 12:59:55 PM

NDX has tagged its 1816 Fib projection for two equal legs up and while it can continue to press higher (in fact the short term pattern suggests it will), now is the time to pull your stops up a little tighter if you're long. Don't forget--this market still demands taking profits regularly when offered.

Jeff Bailey : 3/24/2008 12:55:07 PM

QQQQ $44.70 +3.71% ...

Jeff Bailey : 3/24/2008 12:54:32 PM

Apple Computer (AAPL) $140.78 +5.59% ... 19.1% conventional (12/27/07 high to 1/23/08 relative low). NDX/QQQQ heavyweight here.

Keene Little : 3/24/2008 12:48:02 PM

One other possibility as I watch the market work its way higher rather than consolidate sideways is that we could see the 5th wave form a rising wedge. If it continues to chop higher with negative divergences then it will start to look like an ending pattern. Keep an eye on uptrend lines since a break of them will likely mean we've seen the high for the day. In the meantime, stick with the trend.

Jeff Bailey : 3/24/2008 12:47:10 PM

TSO $31.28 +4.54%
TOL $24.96 +8.05%
GG $38.02 +1.90%
MO $71.80 +2.19%
PBR $100.22 +4.55%
WHR $90.39 +1.84%
SWC $16.75 +5.61%

Jane Fox : 3/24/2008 12:46:46 PM

Dateline WSJ- U.S. economic activity slumped to its lowest level in nearly five years in February, according to an index released by the Federal Reserve Bank of Chicago, which said the numbers indicate "an increasing likelihood that a recession has begun."

The three-month moving average for the Chicago Fed National Activity Index was -0.87 in February, compared with downwardly revised figures for January and December of -0.73 and -0.78, respectively. The Chicago Fed says that figures below -0.70 in the three-month average indicate the possibility of recession.

Jeff Bailey : 3/24/2008 12:45:10 PM

Fitch Maintains Ratings On MBIA; Review Ongoing

DJ- Fitch Ratings said it will maintain its ratings on MBIA Inc. (MBI) and its subsidiaries despite losing access to certain non-public details about the company's insured portfolio.

The rating agency said it would keep its ratings on the largest bond insurer as long as it believes it can maintain a clear, well-supported credit view without access to those details.

In response to Fitch's action Monday, MBIA Chief Financial Officer C. Edward Chaplin said, "Due to market developments, we believe that the non-public information currently in Fitch's possession soon will become out of date, and public information alone will be insufficient to maintain the ratings."

Fitch warned MBIA of possible downgrades Feb. 5, before it received MBIA's request to withdraw some ratings on the company. Fitch expects its review of MBIA will be completed in the next few weeks.

The agency said that, if MBIA's ratings are changed, the insurer's financial-strength ratings would be no lower than AA, which represents very strong capacity to meet policyholder and contract obligations on a timely basis.

Earlier this month, Fitch said it would continue to rate MBIA's subsidiaries without charge despite MBIA's request that it stop. MBIA asked in a March 7 letter to Fitch that it stop providing some ratings on the firm, saying it disagreed with the company's approach. The letter also asked Fitch to return or destroy data MBIA had provided to it.

Fitch Chief Executive Stephen W. Joynt said, "Fitch has discussed this situation with several major investors, some of whom hold MBIA insured securities that are only rated by Fitch, and we have concluded that maintaining the MBIA ratings at this time is most appropriate for investors and causes the least disruption to the marketplace."

MBI $14.08 +10.25% ... MBI-EC are $1.70 x $1.80 (180 contracts traded)

Jeff Bailey : 3/24/2008 12:38:50 PM

US Oil Fund (USO) $81.18 -0.14% ...

Jeff Bailey : 3/24/2008 12:38:22 PM

Mexico Pemex: Jan-Feb Crude Exports Down 14.6% To 1.43M B/D

Jeff Bailey : 3/24/2008 12:37:46 PM

Mexico: Jan-Feb Natural Gas Output Record 6.537 BCF/D

Jeff Bailey : 3/24/2008 12:35:59 PM

NASDAQ Composite (COMPX) 2,329 +3.15% ... session high and conventional 19.1% retracement. (10/31/07 high to 01/23/08 low)

Keene Little : 3/24/2008 12:29:49 PM

The consolidation near the high continues to look constructive for another leg higher. As shown on this SPX 10-min chart, the next leg up could be the 5th wave for the rally from last Thursday's low: Link . I currently show a projection near 1371 (5th wave = 1st wave) so that's the first level I'd watch for rally failure. Keep in mind we also have a projection to 1380 for two equal legs up from Wednesday. For now, look at this consolidation as a buying opportunity.

Linda Piazza : 3/24/2008 12:28:43 PM

USDJPY is now 100.63, near its high of the day.

Jeff Bailey : 3/24/2008 12:20:21 PM

Petroleo Brasileiro (PBR) $99.19 +3.49% ...

Jeff Bailey : 3/24/2008 12:18:17 PM

12:09 PM EDT Money Flows at this Link

Linda Piazza : 3/24/2008 12:16:26 PM

The VIX is attempting to rise from that Keltner support I've been mentioning this morning. It's now at 25.18 with that support now at 25.04. The rise is far from assured, however, but bulls should keep those profit-protecting plans in place, particularly if the VIX rises and maintains values above 25.74.

Linda Piazza : 3/24/2008 12:14:45 PM

The SPX's 15-minute 9-ema is now at about 1350.50, converging with the breakout benchmark at 1350.56. These are potential support levels on 15-minute closes and bulls want them to hold to best preserve the possibility of the SPX just skipping higher along that support the rest of the day, maintaining the breakout status.

Jeff Bailey : 3/24/2008 12:11:57 PM

RUT.X 701.12 +2.89% ...

Jeff Bailey : 3/24/2008 12:11:26 PM

SPY $135.05 ... backtest of MONTHLY Pivot.

Jeff Bailey : 3/24/2008 12:07:17 PM

Sector Winners ... Home Construction +8.84%, Broker/Dealers +5.26%, Disk Drive +3.73%, Tranports +3.72%, Internet +3.65%

Jeff Bailey : 3/24/2008 12:05:18 PM

Sector Losers ... Utilities -1.00%, Gold Bugs -0.15% and Treasuries.

Jeff Bailey : 3/24/2008 12:04:01 PM

Weekly, Monthly, Quarterly Index Pivot Matrix at this Link

Keene Little : 3/24/2008 12:02:21 PM

It looks like NDX could be the first one to ring the bell at its Fib projection for two equal legs up from last Wednesday, just under 1816. So if NDX consolidates for a bit and then pushes up to that level and stalls, that's when I'd be interested in testing the short side.

Jane Fox : 3/24/2008 12:01:58 PM

My goodness Bern Sterns is now trading at 13.06. Considering it opened last Monday at $3.17, that is 411% increase.

Keene Little : 3/24/2008 11:59:28 AM

That last high was met with negative divergence ont he 5 and 10-min charts so we could see at least a larger pullback correction. If it instead goes sideways it will be a good setup for another leg higher. The trend is up today so look for buying opportunities. Shorting should be for scalpers for now.

Jane Fox : 3/24/2008 11:58:24 AM

The bullish MACD divergences were telling you this rally was a very good possibility. Link

Jane Fox : 3/24/2008 11:56:59 AM

Internals are very bullish and I don?t think you should try fading this market (take a counter trend trade). Link

Linda Piazza : 3/24/2008 11:52:37 AM

The SPX's 15-minute 9-ema is now just below the breakout benchmark at 1350.55. The OEX's is 628.54 with the breakout benchmark at 627.08. Equity bulls want those to hold on pullbacks.

Jane Fox : 3/24/2008 11:52:26 AM

Crude is behaving and finding support right where it ?should? have, $100/bl. Link

Jane Fox : 3/24/2008 11:50:05 AM

Here is the daily chart of Gold. It is finding support at 900, lower than the obvious 950. Link

Linda Piazza : 3/24/2008 11:45:21 AM

So far, the VIX is maintaining support on 15-minute closes at potential Keltner support, but it's slowing nudging that support lower. That's now at about 24.95 with the VIX right there as I type. This holding of support while prices drop lower can be a warning sign of an impending bounce, but "impending" doesn't necessarily mean immediate. Nor does "warning" mean that it's definitely going to bounce. I'm just saying that bulls should keep updating their profit-protecting plans.

Keene Little : 3/24/2008 11:39:30 AM

This morning's home sales report gave the home builders a big bounce and the index (DJUSHB) jumped above the Feb 27th high which negates the more immediately bearish wave count on that one. Now it's time to figure out where it could be heading. It's interesting to see a fractal pattern played out between the pullback from December to January and then February to March. We've now got a parallel up-channel to watch on the daily chart: Link

Unfortunately for bulls those two pullbacks were each 3-wave moves and therefore suggests we have not seen the final low for this index yet. The only question in my mind is how high the bounce will get before tipping back over and heading for new lows. I can only guess on the price path from here but the key level for the bearish count is the March low near 300. In the meantime the top of the parallel up-channel is currently near 460, about 55 points higher.

From a much longer term perspective, the monthly chart (using the log scale because of the big move) shows how the November and January lows found support at the trend line along the lows since September 2005: Link . Looking for where the bounce could make it up to I noticed some interesting correlation around the 570 area by this June. There's a Fib projection for the bounce off the lows near 570 and it's also where the broken H&S neckline crosses the downtrend line from June 2005.

Jeff Bailey : 3/24/2008 11:29:24 AM

Google (GOOG) $45.77 +5.12% ... a day too late.

Linda Piazza : 3/24/2008 11:24:50 AM

The OEX is already jammed up against a descending trendline off the 1/08, 1/11, 2/26 and 2/27 highs. The SPX is hitting a best-fit version (cutting off the upper candle shadows), but the daily 72-ema at 1371.14 converges with a version that's includes those shadows, so I think we have to consider that one the more important one. Anyway, the point of this whole discourse is to point out another potentially significant level being tested now on the OEX and perhaps soon on the SPX. I would watch the OEX for signals whichever of these two you're trading. The OEX has already popped above that descending trendline once and now has retreated back to the trendline at about 628-629, so bulls want that to hold now as support on a daily close.

Jeff Bailey : 3/24/2008 11:15:20 AM

Please note: The US Dollar Index (DXY) closed Friday's session at 72.80.

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

11:00 Internals found at this Link

Linda Piazza : 3/24/2008 11:04:39 AM

Keltner outlook on the VIX: The VIX has reached potential Keltner support on 15-minute closes with that support now at about 25.13. It's also testing, if slightly lower than, Wednesday's low. That lower low would seem to confirm the higher high in equities except that it's only a slightly lower low. Warnings to bulls have not been needed today, but I'm going to continue to point out times when it would be natural to see a stalling if not a pullback. This is one of those times when the VIX could reverse higher again if this has just been a zig in the zigzag that we've seen on the markets lately and nothing more.

Keene Little : 3/24/2008 10:59:12 AM

SPX has broken above both last Wednesday's high near 1342 and its downtrend line from December so the bulls rule for now. I mentioned earlier that the upside target is near 1380 (two equal legs up from last Thursday). For now, if we get a pullback to the 1342 area I would expect it to be support: Link

Assuming we get the move up to 1380 it will be decision time for the market. The bearish wave count at that point calls for another move down, possibly to the 1230 area by mid-April. The bullish wave count calls for a continuation higher, possibly up to the downtrend line from October, currently near 1430.

Linda Piazza : 3/24/2008 10:58:39 AM

At 100.58, the USDJPY has made it above last week's 100.41 high. Now it needs to maintain levels above that high if it's going to continue confirming equity strength.

Linda Piazza : 3/24/2008 10:54:43 AM

The SPX's breakout benchmark is now at 1348.85, with bulls hoping this will be support on 15-minute closes if there are pullbacks. The 15-minute 9-ema is now at 1343.81 and still moving up quickly. For the OEX, that benchmark and the 15-minute 9-ema converge at about 626.15, but the OEX has potential support that's higher, too, now at about 628.89.

Jeff Bailey : 3/24/2008 10:52:13 AM

Wachovia Securities analysts led by Douglas Sipkin said in a note Monday that the outlook for the brokerage sector is improving after being hit by the credit crunch and tough markets. "The combination of aggressive liquidity management by the brokers, better-than-expected earnings, and most importantly, favorable monetary action by the Federal Reserve have eliminated a reasonable portion of the risk fears in the market," Wachovia said.

Among large-cap stocks, Lehman Brothers Holdings Inc. (LEH) $47.87 -1.64% and Goldman Sachs Group Inc. (GS) $183.58 +2.19% remain rated outperform by the analysts, while Raymond James Financial Inc. (RJF) $23.88 +3.24% is their favorite mid-cap broker and shares of Morgan Stanley (MS) $51.45 +3.60% "are also attractive."

Jane Fox : 3/24/2008 10:49:56 AM

BOSTON (MarketWatch) -- Residential housing stocks rose sharply Monday morning after investors found encouraging signs in a report on February existing home sales, which were up modestly for the first time in seven months. The National Association of Realtors reported sales of U.S. existing homes and condos rose roughly 3% to a seasonally adjusted annualized rate of 5.03 million, ahead of expectations. Inventories of unsold homes fell 3% as the median sales price during February plunged 8.2% from a year earlier, the largest price decline on record. The iShares Dow Jones U.S. Home Construction ETF, ITB, was up more than 6% at last check.

Jane Fox : 3/24/2008 10:48:31 AM

WASHINGTON (MarketWatch) -- The Federal Reserve Bank of New York on Monday said it will provide term financing to facilitate J.P. Morgan Chase & Co.'s . The New York Fed will take control of a portfolio of assets valued at $30 billion as of March 14. The assets will be pledged as security for $29 billion in term financing from the New York Fed at its primary credit rate. J.P. Morgan will bear the first $1 billion of any losses associated with the portfolio, and any realized gains will accrue to the New York Fed.

Jeff Bailey : 3/24/2008 10:47:12 AM

Cash America Boosts 1Q View, Aided By Credit Crunch

CSH $37.61 +5.67% ...

Jeff Bailey : 3/24/2008 10:38:31 AM

Bank of America Corp. (BAC) $42.95 2.60% ... could report a $6.5 billion first-quarter provision to cover potential losses in its home-equity and mortgage portfolios, Punk Ziegel & Co. analyst Richard Bove was quoted as saying by Bloomberg News.

Linda Piazza : 3/24/2008 10:37:41 AM

We now have a confirmed if somewhat sloppy inverse H&S on the SPX's 15-minute chart. Market bulls don't want to see the SPX sustain values back below the neckline, with that at about 1345.

Jeff Bailey : 3/24/2008 10:36:46 AM

Semiconductor HOLDRs (SMH) $30.22 +3.88% ... challenge their 2/01/08 relative high.

Jeff Bailey : 3/24/2008 10:35:48 AM

JPMorgan Chase & Co. (JPM) $47.00 +2.24% ... has agreed to raise the price it will pay for Bear Stearns Cos. (BSC) $11.20 +88.25% to $10 a share from $2, hoping to stem criticism that the banking giant was getting too sweet a deal to snap up the ailing investment bank. The company also will buy 95 million new shares of Bear, giving it a 39.5% stake in the company and a big leg up in getting shareholder approval to approve the takeover. The purchase is slated to close by April 8.

Jeff Bailey : 3/24/2008 10:34:05 AM

Morgan Stanley High-Tech Index (MSH.X) 536.82 +2.71% ... trades 19.1% conventional.

Jeff Bailey : 3/24/2008 10:33:11 AM

CME Regional Housing Futures (Feb'08 expired, May'08, Aug'08 and Nov'08) Table at this Link

Jeff Bailey : 3/24/2008 10:28:37 AM

QQQQ $44.18 +2.52% ... trades 19.1% conventional.

Jane Fox : 3/24/2008 10:24:43 AM

WASHINGTON (MarketWatch) - Boosted by a record decline in prices, the U.S. housing market showed signs of stability in February, with sales of existing home rising modestly for the first time in seven months, the National Association of Realtors reported Monday.

Resales of U.S. homes and condos rose 2.9% to a seasonally adjusted annualized rate of 5.03 million, ahead of the 4.85 million pace expected by economists surveyed by MarketWatch.

It's the strongest sales pace since October. Sales are down 23.8% compared with a year ago.

Inventories of unsold homes fell 3% to 4.03 million, representing a 9.6-month supply at the February sales pace. Inventories are not seasonally adjusted, but a decline from January to February is unusual.

The median sales price plunged to $195,900, down 8.2% from a year earlier, the largest price decline recorded. Prices of single-family homes fell 8.7% in the past year, also the most since the records begin in 1968.

Jane Fox : 3/24/2008 10:22:51 AM

Markets are well above their overnight highs and are into a very nice rally. Link

Jeff Bailey : 3/24/2008 10:20:47 AM

The TEP-ET should be COVERED against the currently LONG TEP-FE from 1/31/08 entry.

Jeff Bailey : 3/24/2008 10:20:06 AM

Swing trade sell COVERED Call alert! ... for one (1) of the Toll Bros. TOL May $27.50 Calls (TEP-ET) at the bid of $1.40.

TOL $24.78 +7.27% ...

Linda Piazza : 3/24/2008 10:16:30 AM

Keep on your toes, following the SPX and the OEX higher with your stops if you're in bullish positions. We're long overdue for a massive relief rally that might last a week or two, but that doesn't mean that it's going to be now or will be without a lot of accompanying volatility when it does occur.

Linda Piazza : 3/24/2008 10:08:25 AM

The SPX is above but is still testing potential Keltner resistance now at 1347.36 on 15-minute closes. We obviously have not completed this 15-minute period, so we'll have to see what happens. If you stayed in your bullish positions over the release, continue to monitor those positions and move stops higher. The SPX can create a breakout mode, of course, and can even maintain it for a day or sometimes up to a day and a half with only small pullbacks, before retreating to test stronger support again, but it's just an iffier time since there's the potential that this resistance will hold.

Linda Piazza : 3/24/2008 10:05:57 AM

At the news, the USDJPY also climbed, to 100.17 as I type. Thursday's high was 100.18, so the USDJPY is challenging that high, but it still has a way to go to get above Tuesday's 100.41 high. To confirm the new highs in equities above last week's highs, it needs to surpass that.

Jane Fox : 3/24/2008 10:05:38 AM

Feb. existing-home sales up first time in 7 months

Median home price falls record 8.2% in past year

Feb. home inventories fall to 9.6-month supply

Feb. existing-home sales better than 4.85mln expected

Feb. existing-home sales rise 2.9% to 5.03mln pace

Jane Fox : 3/24/2008 10:00:24 AM

VIX is making new daily lows supporting the bullishness.

Jane Fox : 3/24/2008 9:59:56 AM

AD line is a very bullish +1594.

Linda Piazza : 3/24/2008 9:59:19 AM

FWIW: the Japanese government has still not been able to resolve conflicts and name a new head of the Bank of Japan. The prime minister's party is losing favor due to the inability to resolve this issue in a time of already fragile markets. That means that there's still a great deal of uncertainty about currency markets and still much opportunity for big swings either direction. Factor that into your trading decisions as currency swings can and do impact equity trades across the globe.

Keene Little : 3/24/2008 9:58:41 AM

For the price pattern to stay bullish we should get relatively small pullbacks and then a continuation higher. The upside potential for now is where we'll see two equal legs up from Thursday's lows (DOW 12783/SPX 1379.80). But lower targets exist where the 2nd leg up will equal 62% of the 1st leg up (DOW 12521/SPX 1347.63). If we get a 5-wave count for the leg up from Thursday's low at those lower levels it could set up a short play. But for now look to buy the dips/consolidations.

Linda Piazza : 3/24/2008 9:56:34 AM

Keltner outlook on the A/D line: the Keltner outlook is similar to that we've seen on the indices. The A/D line powered through the first level of resistance and moved straight up to the outside channel lines of the widest channel, potentially strong resistance. That's now at about 1800 on 15-minute closes, with the A/D line now at 1705. So, the A/D line is ready to break out or retreat, just as indices are.

Linda Piazza : 3/24/2008 9:50:57 AM

The SPX has potentially strong Keltner resistance at 1346.93 on 15-minute closes. As I mentioned in my 9:47:58 post referencing the OEX, these indices are being parked at resistance going into a potentially market-moving release at 10:00. If in bullish positions, decide ahead of time if you want to keep all your position going into that release. The SPX is at 1340.89 as I type, challenging Wednesday's high. If you close out all or part of your position, you risk not participating in further gains to the full extent, but if you don't, you risk indices retreating from a known resistance level. I lost my crystal ball and can't predict the number or the way markets will react.

Keene Little : 3/24/2008 9:48:25 AM

The DOW and SPX have joined the techs by making a new high above last Wednesday's. Bulls need to hold it now.

Linda Piazza : 3/24/2008 9:47:58 AM

Just ahead of the 10:00 releases this morning, the OEX hits potentially strong Keltner resistance now at 624.87 on 15-minute closes. The OEX is at 624.63 as I type, having punched above that resistance and then retreated a bit. Bulls should be careful here as the OEX is being parked at resistance into that next potentially market-moving number. Decide soon if you want to hold your entire position open over that release. If the number is market pleasing, perhaps further gains will be made, but if it's not, the OEX is at the perfect and expected place for a pullback.

Keene Little : 3/24/2008 9:44:10 AM

NDX is the first to push above last Wednesday's high so the techs are leading the way. This morning's spike up looks a bit like short covering and therefore we'll have to see what kind of pullback we get but so far we've got a buy signal in the techs.

Linda Piazza : 3/24/2008 9:41:46 AM

Wednesday's SPX high was 1341.51. The OEX's was 622.42. As has been true often, the OEX is stronger by some measures than the SPX, and it's already broken above that Wednesday high and is headed toward potential Keltner resistance at about 624.84 on 15-minute closes.

Linda Piazza : 3/24/2008 9:34:30 AM

Keltner outlook on the A/D line: The A/D line moves up toward potentially strong resistance on 15-minute closes from 1024-1185. The A/D line is 860 as I type, so be watchful as it approaches that potential resistance level. "Potential" doesn't mean that the A/D line will definitely be stopped there, but there is the potential for it to be.

Jane Fox : 3/24/2008 9:33:23 AM

Remember Feb Existing Home Sales out at 10:00EDT

Linda Piazza : 3/24/2008 9:33:03 AM

The next potential resistance for the OEX, as shown on 15-minute charts is about 624.80 on 15-minute closes.

Linda Piazza : 3/24/2008 9:32:17 AM

My Keltner charts show potential resistance on 15-minute closes for the SPX first at 1331.05 and then at about 1345.80. Many on television, including the respected Art Cashin, are talking about 1340 being a significant level.

Keene Little : 3/24/2008 9:27:04 AM

Equity futures had dropped after the cash market closed on Thursday so much of the pre-market gain is taking back that drop. At this point futures look to open at or a little above Thursday's high and therefore the cash market can be expected to open in the green. Whether an early morning pop higher will hold or not is the question, especially when you consider the early morning moves were reversed hard last week. If the bulls can keep the buying going then we'll get a test of last Wednesday's highs.

Jane Fox : 3/24/2008 8:58:27 AM

Overnight markets are in rally mode due to the new that JP Morgan has upped its bid for Bear Sterns to $10.share. Do you think the Fed had a little bit of a hand in this decision? Link

Jane Fox : 3/24/2008 8:51:14 AM

NEW YORK (MarketWatch) -- Shares of Bear Stearns Cos. rose more than 50% in pre-market moves on Monday after a weekend news report that J.P. Morgan Chase & Co. may raise its buyout price for the firm to $10 a share from the previously announced $2 a share.

J.P. Morgan was in talks on Sunday night for a deal that would quintuple its offer for Bear in an effort to pacify angry shareholders, according to the Wall Street Journal Monday.

The news, first reported in the New York Times, included reports that J.P. Morgan was in negotiations with the Fed on Sunday night to assume the first $1 billion in losses on Bear assets before the Fed's $30 billion cushion kicks in, and that the Fed may now be seeking to lift that figure.

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