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Keene Little : 4/2/2008 12:00:17 AM

One other chart worth noting is the SPX monthly chart. I've shown this before (early February) when I mentioned we've got confirmation that we're in a bear market (ignoring silly comments that it needs to be a 20% decline for it to be so) because SPX dropped below the 18-month moving average, which as you can see on the chart has done a very good job over the years at identifying both bull and bear markets: Link

In addition to the downtrend line from October being just above 1400 (1426 currently), the 18-month moving average at 1400 would be an excellent short play setup. Could it rally from here above 1400? Of course, but when you look at price action once that moving average has been broken, up or down, you can see how it marks support and resistance. Until proven otherwise, it's now resistance and we're in a bear market (which means look for bear market rallies to fail and short).

Keene Little : 4/1/2008 10:49:48 PM

Wednesday's pivot tables: Link and Link

The loss of momentum to the upside during Tuesday afternoon's rally leads me to believe we'll see a pullback but it should be relatively small and then followed by another leg up to finish a 5-wave move up from Monday's low. If the pullback stays above 1260 then the upside Fib target near 1377 looks good for a potential high for the rally, depicted in dark red on the 60-min chart: Link

Assuming we'll see a pullback from the 1277 area, it's not known whether we'll get just a pullback before heading higher again (green) or instead continue lower back to the lows of the nearly 3-month trading range (down to 1275, depicted in dark red on the daily chart): Link

Notice too that the top of the potential sideways triangle pattern at 1377 is very close to the 38% retracement of the October-March decline (near 1379). That's why it will be at least short term bullish if SPX can rally above 1380 and stay there. The wave pattern for the rally off the March lows continues to look bearish so I'm leaning towards a bearish resolution once the 1378 area is reached.

OI Technical Staff : 4/1/2008 9:59:59 PM

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Jeff Bailey : 4/1/2008 7:10:23 PM

Closing Internals found at this Link

Jeff Bailey : 4/1/2008 4:39:11 PM

Closing Above 200-day SMA

TRAN 4,975 +4.00% (4,790).
OIX.X 822.21 +1.71% (800)
OIH $179.99 +1.80% ($179.50)
XNG.X 610.90 +0.99% (542)
$HUI.X 425.91 -2.85% (403)
DJUSHB 404.07 +7.0% (387)

Jeff Bailey : 4/1/2008 4:31:00 PM

TNX.X up 11.3 bp at 3.545%. Did see trade above WKLY R1, but finished just below.

Jeff Bailey : 4/1/2008 4:29:53 PM

BIX.X 256.33 +8.13% ... couldn't quite get WKLY R1.

Jeff Bailey : 4/1/2008 4:27:58 PM

SMH $29.73 +3.51% ... MONTHLY Pivot at $28.95, WKLY R1 here at $29.73.

Jeff Bailey : 4/1/2008 4:21:47 PM

NAFTA Freight Trade Rose in January

AP- Trade via trucks, trains and pipelines between the U.S. and its North American Free Trade Agreement partners rose by more than 7 percent in January, according to Transportation Department data.

Surface-transportation trade between the U.S. and Canada and Mexico rose 7.4 percent to $65.16 billion in January compared with the same month last year and was up 7 percent from December's total, the Bureau of Transportation Statistics said Monday.

Surface transportation consists largely of freight moved through trucks, rails and pipelines. About 90 percent of U.S. trade by value with Canada and Mexico moves on land.

Imports rose 4.7 percent to $36.65 billion, and exports of $28.51 billion represented an 11.2 percent increase compared with January 2007.

Trade with Canada rose 8.6 percent to $42.04 billion in January, while trade with Mexico rose 5.4 percent to $23.12 billion, according to the government data.

Keene Little : 4/1/2008 4:11:27 PM

While the semiconductors had a strong day (SMH +3.8%), was it just coincidental that it stopped again at the top of its triangle? Link

Jeff Bailey : 4/1/2008 4:10:59 PM

Blackstone Raises $10.9B For Real-Estate Fund

DJ- Blackstone Group LP (BX) has raised $10.9 billion in a fund to take advantage of opportunities resulting from recent turmoil in the real-estate market. The private-equity company said Blackstone Real Estate Partners VI is the largest real-estate opportunity fund ever raised. Jonathan Gray, co-head of Blackstone's real-estate group, said, "We believe there should be attractive investment opportunities for this capital, given the market dislocation that exists today." The New York company has raised a combined $25.7 billion in nine real-estate funds, some for global investing and some with a specific focus on Western Europe. Blackstone's biggest real-estate deals were last year's buyouts of Equity Office Properties, a giant office-building owner, and Hilton Hotels. Meanwhile, Blackstone last week delayed the planned closing of a new buyout fund, which has a $20 billion target. As the company has shifted to doing more midsize deals and taking minority stakes, the remaining capital promises to last longer than initially expected, one limited partner said. Blackstone, which went public last June, has been struggling with tough conditions for the private-equity and real-estate businesses, which have generated the bulk of its profits.

Jane Fox : 4/1/2008 4:08:32 PM

Economic Reports for tomorrow include:

7:00a.m. MBA Mortgage Refinancing Index. Previous: +82.2%.

8:15a.m. ADP/Macroeconomic Private Payrolls Forecast. Previous: -23K.

10:00a.m. Feb Factory Orders. Expected: -0.8%. Previous: -2.5%.

Keene Little : 4/1/2008 4:06:59 PM

While many look at a strong finish at the highs of the day as bullish, that hasn't necessarily been true lately. A final short-covering rally into the close has left a lack of buyers for the following day. That could certainly happen tomorrow although the setup is for only a shallow pullback. We'll see. There's nothing like a "slippery slope of hope" rally.

Keene Little : 4/1/2008 4:03:16 PM

I'm bummed. Only a +394-point day. The bulls really disappointed us.

Jeff Bailey : 4/1/2008 4:01:35 PM

FXI $145.24

Jeff Bailey : 4/1/2008 4:01:10 PM

"Bad tick" on the FXI to $153.56.

Keene Little : 4/1/2008 4:00:56 PM

10...9...8 come on.

Keene Little : 4/1/2008 3:58:55 PM

Three minutes and 13 points to go for a 400-point day. Come on bulls, one more push.

Keene Little : 4/1/2008 3:48:30 PM

Ony 20 more points and the bulls will have themselves another 400-point day on the DOW.

Jane Fox : 4/1/2008 3:40:48 PM

Earlier I showed charts of the SPX and DOW and and where they will need to close to change the trend from down to up. It looks like the Russell 2000 index is also trying to change its trend. Link

However, the NDX has already broken its obvious swing high and has a very good chance at finishing off today with a higher high and a trend change. Link

Jeff Bailey : 4/1/2008 3:31:40 PM

YRC Worldwide (YRCW) $13.94 +6.25% ... at 02:46:54, YRCW was trading $13.90.

Keene Little : 4/1/2008 3:30:31 PM

I'm of course talking about day trading this market and taking profits often. If you're longer term bullish and trying to avoid the day-to-day oscillations then your trading strategy is clearly different.

Keene Little : 4/1/2008 3:29:10 PM

While I'm expecting a relatively shallow corrective pullback tomorrow there is the chance we'll get a deeper one (if the move to today's high is the completion of a 5-wave move up from Monday). Therefore I think the greater risk is now on the long side. If you took the ride higher today (congrats first of all) then I'd seriously think about taking profits off the table just in case the pullback becomes stronger. Once I get to see how the pullback develops it will then be easier to jump in long for the next leg up (should have time in the morning to evaluate that).

Jeff Bailey : 4/1/2008 3:25:12 PM

$gaso : $wtic 0.50 box chart at last night's close. Link

Jeff Bailey : 4/1/2008 3:23:37 PM

May Crude Oil (cl08k) settled down $0.60, or -0.59% at $100.98.

May Unleaded (rb08k) settled up $0.0121, or +0.46% at $2.6392.

My current month "crack spread" tabulates at 26.136.

Keene Little : 4/1/2008 3:16:48 PM

The daily chart of the TRAN shows a better chance now for a rally up to resistance just under 5150 (about 180 points higher): Link . The Fib projection at 5147 is for two equal legs up from January and it crosses the broken uptrend line from March 2003 next Monday.

This is looking like a lip-smacking good short play if it gets there. Start researching ways to play the Trannies on the short side, with either weaker stocks or with IYT, the iShares ETF. I haven't checked whether you can short IYT but it does have options. Two equal legs up for IYT is at 92.21 (currently trading 88.92).

Jeff Bailey : 4/1/2008 3:13:46 PM

03:00 Internals found at this Link

Jeff Bailey : 4/1/2008 3:00:17 PM

US Senate To Move Forward With Housing-Fix Legislation

DJ- U.S. Senate Democrats and Republicans on Tuesday reached an agreement to move forward with legislation intended to help troubled homeowners.

The arrangement, which was reached after extensive negotiations, breaks an impasse that had prevented lawmakers from moving forward with attempts to address the growing turmoil in the housing market.

Under the deal, the top two members of the Senate Banking Committee will write a new bill intended to gain a bipartisan majority in the Senate. The Senate would then vote on the new legislation.

Senate Majority Leader Harry Reid, D-Nev., said he was hopeful that Sen. Christopher Dodd, D-Conn., and Sen. Richard Shelby, R-Ala., "are going to be able to come up with something I hope I can support."

Democrats had sought to advance a broad housing stimulus package that would have provided money to local governments to purchase foreclosed homes and would lift the limits on tax-free bonds states could issue to help refinance mortgages.

Republicans had blocked the Senate from moving forward on the legislation earlier this year, balking at a provision that would allow bankruptcy judges to alter the terms of a mortgage for borrowers seeking bankruptcy protection.

Keene Little : 4/1/2008 2:51:43 PM

Updating the DOW 60-min chart I'm showing a wave count for the move up from Monday morning. Ideally it needs a small consolidation and then another push higher: Link . If the consolidation is relatively flat into tomorrow morning, as shown on the chart, then the 5th wave for the move up from Monday would Fib out to about 12740 which is where the top of the triangle pattern is located (the downtrend line from the Feb 1 and Feb 27 highs). It means the pullback needs to stay above 12580.

Jeff Bailey : 4/1/2008 2:47:24 PM

VIX.X 22.73 -11.24% ...

Jeff Bailey : 4/1/2008 2:46:54 PM

Swing trade long alert! ... for two (2) of the YRC Worldwide YRC May $12.50 Calls (YUX-EV) at the offer of $2.50.

No stop for now, target $18.00.

Keene Little : 4/1/2008 2:41:54 PM

DOW 12620 tagged so now we'll see if they can keep it going. If it does then me thinks there might be a few players who want to see another 400+ day on the DOW. Of course the previous times it did that was not necessarily good for the bulls since it turned out to be a one-and-done kind of rally.

Jeff Bailey : 4/1/2008 2:40:56 PM

Dow Transports (TRAN) 4,950 +3.47% ... 61.8% conventional.

Jeff Bailey : 4/1/2008 2:40:16 PM

Oh my ..

Jeff Bailey : 4/1/2008 2:36:40 PM

YM 12,600 session high

Keene Little : 4/1/2008 2:36:24 PM

A rally that holds into the latter part of the day usually does not get reversed into the close. Therefore we could see a high-level consolidation for the rest of the afternoon if not higher. A consolidation should lead to another push higher tomorrow in which case we should see the DOW 12700 and SPX 1380 levels get tested (maybe a little higher for the DOW if SPX makes its target or a little lower for SPX if the DOW can't power up through its target, depending on which one holds sway over the market).

Jeff Bailey : 4/1/2008 2:35:23 PM

YM 12,586

Jeff Bailey : 4/1/2008 2:35:15 PM

USD/JPY ... 101.95 and session high.

Keene Little : 4/1/2008 2:27:26 PM

If the bulls do manage to push this a little higher, keep an eye on DOW 12620 (same for YM) for resistance.

Keene Little : 4/1/2008 2:23:04 PM

Little buy program there to shoo the bears away.

Jeff Bailey : 4/1/2008 2:21:57 PM

YM short stop alert! ... 12,561

Jeff Bailey : 4/1/2008 2:19:31 PM

YM short lower stop alert! ... to 12,561.

YM 12,552 ...

Jane Fox : 4/1/2008 2:15:33 PM

I did not have an opportunity to show the overnight charts this morning and they are really not too much use now but here they are anyway.

The markets are in a very nice bullish rally and it does not look like much is going to stand in their way today. Link

Jane Fox : 4/1/2008 2:15:52 PM

The trajectory of the AD volume (middle chart) is enough to keep me from trying a fade (a trade counter to the trend). Link

Keene Little : 4/1/2008 2:06:41 PM

The DOW looks to be the first to break its 1:00 PM low and that should be our signal that a high for the day is in. It doesn't mean we can't see a retest of the high as part of a larger pullback correction into the end of the day.

Jeff Bailey : 4/1/2008 2:04:17 PM

YM Short alert! ... here at 12,559. Stop goes tight at 12,570. Target 12,510.

Jeff Bailey : 4/1/2008 2:03:05 PM

General Motors (GM) $19.33 +1.46% ... of the highs on March sales figures.

Keene Little : 4/1/2008 1:57:57 PM

Semiconductors (SMH) tried again to break out of its sideways triangle pattern, stopping today at the top of it: Link . But until it can above it's most recent high at 30.28 this remains a bearish continuation pattern.

Keene Little : 4/1/2008 1:46:57 PM

If you shorted that last high, lower your stop to a couple of ticks to a new daily high now. Any higher again could travel some although I wouldn't want to trade the long side in that case. I consider the long side the risky side for the rest of the day. But the short side is only for a correction to today's rally--we should have higher to go after a pullback.

Jeff Bailey : 4/1/2008 1:33:52 PM

DIA, SPY, IWM and QQQQ daily interval montage Link ... Stochastics "hook'n up" for a leg higher.

Keene Little : 4/1/2008 1:28:32 PM

From an EW perspective this push to a new high could do it for today's rally. Any break below the low near 1:00 would likely indicate a top for the day.

Jeff Bailey : 4/1/2008 1:28:18 PM

Dow Diamonds (DIA) $125.84 +2.80% ... probes 38.2% conventional.

Jeff Bailey : 4/1/2008 1:21:34 PM

01:00 Internals found at this Link

Jeff Bailey : 4/1/2008 1:20:24 PM

Ceradyne (CRDN) $35.00 +9.51% ...

Keene Little : 4/1/2008 1:08:55 PM

Today's rally is losing momentum so be careful if you're long now. Take some money off the table. I'm only expecting a relatively shallow pullback but with this market one never knows.

Jeff Bailey : 4/1/2008 1:02:34 PM

August unleaded/oil Crack Spread ... daily interval chart Link

Keene Little : 4/1/2008 12:57:58 PM

Looking at the DOW's move up from the March lows, there's some good Fib correlation in the projections to the upside. The first one is at 12700 which coincides with the top of the potential sideways triangle pattern that I've been showing on the daily chart ( Link ).

The higher Fib projection is just above 13K which coincides with the top of the parallel up-channel for the move up from the March lows and the downtrend line from October. The 60-min chart shows the Fib projections and trend lines: Link

The leg up from Monday looks like it needs a small correction and then a 5th wave up and that could finish the rally near the 12700 level (depicted in dark red). The higher Fib projection near 13K crosses the trend lines this Thursday/Friday.

Jeff Bailey : 4/1/2008 12:47:30 PM

Energy Futures at 12:07 PM EDT Link

Jane Fox : 4/1/2008 12:37:31 PM

SPX's reverse head and shoulders is not clearly defined and, depending on where you put your left shoulder, is not very symmetrical. With that said, there is no mistaking this chart does have an unconfirmed reverse head and shoulders. Link

Jeff Bailey : 4/1/2008 12:33:47 PM

US Oil Fund (USO) $81.77 +0.50% ...

Jane Fox : 4/1/2008 12:31:59 PM

WASHINGTON (MarketWatch) -- The nation's manufacturers continued to cut back production in March, but at such a gradual pace that there was general relief that the factory sector was not falling out of bed.

The ISM index inched higher to 48.6% in March from 48.3% in February.

The rise was unexpected. The consensus forecast of estimates collected by Marketwatch was for the index to slip to 47.0%.

Economists said the small bounce in the ISM signaled that the current economic downturn may be mild.

"A major feature of the current economic slump is the relative resiliency of manufacturing," said Stephen Gallagher, chief U.S. economist at Societe Generale in New York.

Readings below 50 indicate contraction. Although the sector has been below 50 for three of the past four months, ISM officials resisted suggestions that the factory sector was in a recession.

Jeff Bailey : 4/1/2008 12:31:50 PM


DJ- The Organization of Petroleum Exporting Countries will hold an informal meeting on the sidelines of an oil producer-consumer conference in Rome later this month to discuss current oil market developments, say OPEC sources.

Jeff Bailey : 4/1/2008 12:31:11 PM


DJ- Germany's largest bank expects to mark down an additional $3.9 billion in 1Q, saying conditions have become significantly more challenging over the last few weeks. Analysts say bank could now show a 1Q loss.

Jeff Bailey : 4/1/2008 12:28:53 PM


DJ- Standard & Poor's reports that while charge-offs and delinquencies continued rising in January, they remain below historical averages. Delinquencies in the 30- and 60-plus-day categories increased 0.1 percentage point from December.

Jeff Bailey : 4/1/2008 12:27:51 PM


DJ- S&P takes the brokerage off CreditWatch negative, cutting the possibility that it will lower its credit rating on Morgan Stanley, saying it believes the risk of further large write-downs is "significantly diminished."

MS $48.49 +6.17% ...

Keene Little : 4/1/2008 12:26:31 PM

VIX is back down to its 200-dma, something that hasn't been kind to bulls in the recent past. Ever since the June/July 2007 highs last year with the VIX tagging its 200-dma, it has marked an important high for the market. Lately the highs and lows for VIX have marked the reversal levels for the consolidation since the January low. This chart shows the relationship between the highs and lows in the VIX with the corresponding highs and lows in SPX: Link

Slightly lower for the VIX is its uptrend line from June 2007, currently near 21.30. A drop to that level while SPX tags the 1380 area could once again set up a strong reversal. I'll be watching for it anyway.

Jeff Bailey : 4/1/2008 12:26:30 PM


DJ- Lehman Brothers prices a $4 billion offering of 4 million shares of 7.25% convertible preferred stock, Series P. Lehman says the proceeds will be used to "bolster its capital" and "increase financial flexibility."

LEH $116.94 +3.44% ...

Jeff Bailey : 4/1/2008 12:25:32 PM


DJ- Swiss banking giant seeks up to $15 billion in additional funds to shore up its capital base as it unveils a quarterly loss of $12 billion on write-downs of $19 billion, the result of major losses on U.S. mortgage securities. Chairman Marcel Ospel says won't stand for re-election.

Jeff Bailey : 4/1/2008 12:24:49 PM


DJ- U.S. stocks surge after the March ISM manufacturing index and February construction figures beat economists' expectations. Shares rose early as European banks UBS and Deutsche Bank post a fresh round of write-downs, hinting that the end of the credit crisis may be closer.

UBS $32.77 +13.78% ...

DB $116.96 +3.44% ...

Jane Fox : 4/1/2008 12:20:25 PM

One more little push and SPX could very well make a higher high today, the first time since December and will signal a trend change. Well that is not entirely true the swing high made on March 19th was a higher high but when I am looking for a trend change I hold the swing highs to a "higher" standard and need them to be very obvious. Link

Jeff Bailey : 4/1/2008 12:16:47 PM

Weekly, Monthly, Quarterly Index Pivot Matrix Link

Jane Fox : 4/1/2008 12:13:05 PM

I am buying USO here because the stop is so clear and $79.50 is obvious support. $79.50 is Crude's $100/bl.

IF I am wrong I am not risking a lot. Link

Jeff Bailey : 4/1/2008 12:04:50 PM

12:00 U.S. Market Watch at this Link

Keene Little : 4/1/2008 11:33:40 AM

We're due a slightly larger pullback although I suspect it will remain relatively shallow. A 38% retracement of today's rally is the most I would expect. Then a 5th wave (for the move up from Monday's low) will probably tag the March 24th highs (SPX 1360, DOW 12621) before we see a deeper pullback.

Jeff Bailey : 4/1/2008 11:19:27 AM

11:00 Internals found at this Link

Jeff Bailey : 4/1/2008 11:08:26 AM

US Oil Fund (USO) $80.82 -0.66% ... moves back up into this morning's gap. Buyers steady above 02/20/08 futures expiration ($79.32)

Jeff Bailey : 4/1/2008 11:04:59 AM

NASDAQ Comp (COMPX) 2,333.95 +2.40% ... sticks its head above 19.1% conventional. WKLY R1 now lower at 2,318.

Jeff Bailey : 4/1/2008 11:01:08 AM

VIX.X 23.03 -9.91% ... plunging!

Jeff Bailey : 4/1/2008 10:50:45 AM

Swing trade call establish stop alert! ... for the one (1) Valero Energy VLO Sep $50 Call (VLO-IJ) at $48.10.

VLO $50.81 +3.46% ...

VLO-IJ $6.45 x $6.60

Keene Little : 4/1/2008 10:45:03 AM

Updating the SPX daily and 60-min charts that I had shown at the end of the day yesterday, it's a reminder why I think the 1380 area is the potential upside but the choppy nature of the "rally" off the March low tells me we'll probably turn back down after it (dark red). Daily: Link and 60-min: Link

Jeff Bailey : 4/1/2008 10:44:18 AM

Swing trade put establish stop alert! ... for the one (1) Goldcorp GG April $37.50 Put (GG-PU) at $38.10.

GG $36.84 -4.92% ...

GG-PU $2.00 x $2.10.

Jane Fox : 4/1/2008 10:25:25 AM

Same story for the DOW. Link

Jane Fox : 4/1/2008 10:24:30 AM

SPX has not been able to pull off a higher high since December of last year. This means if the SPX can close above March 24th's high at 1360 then we may just have a trend change. Link

Jane Fox : 4/1/2008 10:18:01 AM

I was looking to go long GOLD just above the swing high at 955 but it looks like I may get an opportunity to go long somewhat lower.

Resistance zone at 940-960 has held up nicely. Link

Keene Little : 4/1/2008 10:17:43 AM

Once we got past the 10:00 ISM and Construction spending numbers, which were not good but not bad, and relief the numbers weren't worse, the market sprinted higher again. The market should be ready for a rest but again the bulls will want to see a relatively shallow choppy consolidation to indicate more highs to come. The risk for longs is that we could see a very choppy rise and whipsaws along the way.

Jane Fox : 4/1/2008 10:15:25 AM

It took Crude multiple attempts to break $100 resistance and it looks like it may take as many to break it as support. Link

Jane Fox : 4/1/2008 10:13:34 AM

Here are the internals and you don't need me to tell you who has control. Link

Jane Fox : 4/1/2008 10:11:35 AM

VIX is hovering at daily lows so telling me the bulls are still in control. AD line at +1773 concurs.

Jane Fox : 4/1/2008 10:10:59 AM

Have a good one Linda and see back here tomorrow.

Linda Piazza : 4/1/2008 10:01:51 AM

Since Jane has her charts up and running now, I'll sign off. Have a great day.

Linda Piazza : 4/1/2008 10:01:25 AM

So far, bulls get their wish with the A/D line. It's climbing back toward potentially strong resistance, now at about 1770-1825. The A/D line is now 1730. Remember that this is potentially strong resistance, too, resistance that sometimes limits further gains if not erases them. So, keep on your toes from here, especially with the SPX approaching further resistance on the 30-minute and daily chart. I'd be particularly careful as 1346-1350 is approached, as several versions of the descending trendline since early January cross in that zone.

Jane Fox : 4/1/2008 9:55:49 AM

AD line is a bullish +1571 and VIX is making new daily lows. The bulls have the ball and field position this morning.

Linda Piazza : 4/1/2008 9:53:51 AM

For those new to the Market Monitor, I watch the TRAN as a sort of leading indicator and not as a trading vehicle.

Linda Piazza : 4/1/2008 9:53:02 AM

The TRAN pulled back rather sharply during its first 15-minute period. It hit a high of 4866.20 but closed that 15-minute period at 4835.70, more than 30 points below its high. It's attempting to climb again, but keep a watch on it because there appears to have definitely been some selling into that first bounce.

Jane Fox : 4/1/2008 9:53:02 AM

AstraZeneca (AZN) shares rose in London on Tuesday, extending gains made in the previous session after it ended a trial of its cholesterol drug Crestor early due to a positive result. J.P. Morgan upgraded the firm to neutral from underweight on Tuesday, citing the company's trial success. The early halt to the Crestor Jupiter study is the biggest positive R&D upside for EU pharma since the early stopping of the Herceptin Adjuvant study for Roche, the broker said.

Jane Fox : 4/1/2008 9:52:13 AM

Ok I finally have my charts back - extremely frustrated but I do have charts back.

Linda Piazza : 4/1/2008 9:50:58 AM

A/D line now 1570. This small pullback is not alarming yet, but equity bulls would like to see the A/D line move sideways more than down.

Jane Fox : 4/1/2008 9:47:44 AM

NEW YORK (MarketWatch) -- Crude-oil futures dropped sharply to trade below $100 a barrel Tuesday, along with other commodities, as a rise in the U.S. dollar pressured energy prices.

Crude-oil futures for May delivery dropped $1.66 to $99.92 a barrel on the New York Mercantile Exchange.

"The downward trend remains in place as weaker U.S. growth is expected to lower demand," said analysts at Action Economics.

Weighing on oil prices was strength in the U.S. currency. The dollar index, which tracks the performance of the greenback against its major counterparts, rose 0.6% to 72.29.

On Monday, crude futures dropped $4.04, or 3.8%, to settle at $101.58 a barrel.

Yesterday's sell-off was partly a result of "end-of-the-quarter position reshuffling by funds, who could be taking their profits in commodities to offset some of the losses they are seeing in other parts of their trading books," said Edward Meir, an analyst at MF Global, in a research note.

Linda Piazza : 4/1/2008 9:44:25 AM

Careful now: the A/D line, at 1716 but with a high of 1729, has approached potentially strong resistance on the 15-minute chart. This could be time for a slowing of gains, a consolidation or even the first pullback of the day. This would be natural, but equity bulls want a sideways-to-sideways up consolidation on the A/D line and not a sharp pullback.

Keene Little : 4/1/2008 9:42:36 AM

As shown on the DOW 60-min chart last night, the upside target for the next rally leg (assuming we're going to get it now) is near 12700. We could have minor resistance around 12450 and then near 12500. What the bulls will want to see are consolidations near the highs which will indicate higher highs to come.

Linda Piazza : 4/1/2008 9:38:44 AM

Keltner outlook on the A/D line: The A/D line has broken through resistance that mostly holds on 15-minute closes and is headed toward the next potential resistance level, now at about +1750 to 1800. The A/D line is now at 1579. The A/D line can and does create upside breakout situations, of course, but bulls should be watchful as it moves up toward that potential resistance, as the first pullback or consolidation of the day could occur from near that level.

Linda Piazza : 4/1/2008 9:36:15 AM

Rolling up to the 30-minute chart to get an estimate of next potential resistance, it's now at 1345.65 on 30-minute closes. It's moving higher as the SPX does, of course, since these lines are dynamic. This would be moving into a significant resistance zone, so know ahead of time how you'll react and whether you intend to take partial profits or either widen or narrow your stops, depending on your outlook and your original intention (day versus swing trade, etc.).

Linda Piazza : 4/1/2008 9:34:03 AM

The SPX runs right up to the potential 15-minute Keltner resistance, with that shoved up near 1332.80 by the early action. Now those in bullish positions would like to see that 1332.80 (likely a little higher as the SPX moves higher) maintained as support on any pullbacks.

Keene Little : 4/1/2008 9:26:04 AM

Equity futures have been in a steady climb since the low near 3:00 AM and ES has rallied 25 points off that low, up 16 points as I type. Me thinks we'll have a gap up this morning in the cash market. Needless to say we have a very bullish start to the day, much more so than we've seen in a while, and this could finally launch the next leg higher that I've been expecting.

SPX 1380 is almost 60 points above yesterday's close and it won't be a straight shot (in fact it could be just the opposite) so there's definitely some upside potential. But bulls can't get complacent--continue to take profits when offered.

Linda Piazza : 4/1/2008 9:16:18 AM

I see that Jane won't be able to access charts early this morning. I'll postpone my time away so that I can do what I can until she gets charts up and running. I'm not a futures' trader, of course, but Jane and I both watch such measures as the VIX and A/D line.

Linda Piazza : 4/1/2008 9:14:52 AM

The OEX has potentially strong Keltner resistance on 15-minute closes at about 616.50-617 and then next potential resistance will likely get shoved up toward 618.70-620 by any sharp gains in early trading. The 30-minute chart shows next resistance above that at about 623.66-625.

Jane Fox : 4/1/2008 9:14:31 AM

I have no charts this morning. Seems Tradestation thinks my account as expired. I am on the phone with them now. This is why you need to get up early enough to have all issues handled before trading starts at 9:30EDT.

Linda Piazza : 4/1/2008 9:13:30 AM

I will be away from my office today. As I type, SPX futures have turned higher and are about 14.30 above fair value. If the SPX climbs in accordance with that difference, it would be reaching toward 1336-1337. Here are some things to keep in mind: the USDJPY's climb still looks bear-flag like and the SPX remains within a potential (emphasis on "potential") bearish right triangle. That means that while we are long overdue for a massive relief rally, those with bullish hopes should still be wary because this picture is far from mega bullish. The USDJPY has room to climb: the 38.2% retracement of its long slide isn't until about 102.50. So, it could still climb for days and maybe a couple of weeks before it hits that Fib level.

The SPX's 15-minute chart shows potentially strong resistance on 15-minute closes that will likely get shoved up toward about 1333-1334 by any sharp climb near the open. So, there's the possibility that the SPX could get drive up toward and perhaps through that resistance, only to fall back below it within the first 15-30 minutes. I can't tell if that's just a possibility, a probability, or even an unlikelihood (Is that a word?) prior to the open. If the SPX sustains values above that 1333-1334 level, the next chart, the 30-minute one, shows potentially strong resistance now near 1344.50. That is significant because it appears to almost coincide with the top of the bearish right triangle, at about 1346-1348 if I've drawn it correctly. If in bullish trades, I'd evalute right now, when minds are clearer, what I wanted to do about a test of that zone. Would an automatic exit of all or part of a position be best? Would you institute some kind of hedge? Just tighten the stop? Widen it if you are mega bullish and don't want to be stopped out by any gyrations as that significant resistance is approached because you believe it will ultimately be broken?

When I was doing a lot of day trading, my approach would have been to exit at least part of my position, if not all of it, and watch what happens next. There's always another trade. The danger is that the prices just zoom without giving you another entry. The danger in not exiting part of the position is that you have a sharp rollover that doesn't give you a profitable exit. Think about it while you have clear minds.

Jane Fox : 4/1/2008 9:10:34 AM

NEW YORK (MarketWatch) -- Gold futures dropped 2% on Tuesday, extending their sharp losses from the previous session, as strength in the U.S. dollar weighed on the precious metal.

Gold for June delivery tumbled $19.70, or 2%, to $901.80 an ounce on the New York Mercantile Exchange.

Other metals futures were also sharply lower, with platinum particularly weak.

Gold's suffering a "breakdown" and has confirmed a series of lower lows and reinforced the bearish trend," said analysts at Action Economics.

"Flight-to-quality trading may still provide some support on dips, but the technical picture coupled with expectations of a slowdown in global growth should lower physical demand ahead," they said.

Jeff Bailey : 4/1/2008 4:05:59 AM

June mini gold (yg08m) $901.80 -2.15% ... session low has been $892.60. Session high has been $925.60.

Jeff Bailey : 4/1/2008 3:43:44 AM

GBP/USD 1.876 -0.38% ...

Jeff Bailey : 4/1/2008 3:43:14 AM

USD/JPY 100.19 +0.54% ...

Jeff Bailey : 4/1/2008 3:42:46 AM

EUR/USD 1.567 -0.71% ...

Jeff Bailey : 4/1/2008 3:40:11 AM

April mini-gold (yg08j) Alert! $897.50 -2.06% ... slips below $900.00.

Jeff Bailey : 4/1/2008 3:38:20 AM

Beetle's Balanced Benchmark Fund (from 12/31/07 close to 3/31/08 close)

End of quarter and beginning of quarter "gyrations" often come as institutional investors try to benchmark their portfolios against a particular benchmark. Look at many mutual funds and their Morningstar rating is partially determined by how the particular fund (asset class, or market cap, or sector style) has performed against the benchmark.

Now the Beetle's Balanced Benchmark is simply a hypothetical $1,000.00 placed in "Cash" (DXY), and $8,000.00 divided equally among eight (8) different "fixed income" asset classes, and $4,000.00 divided by four (4) different U.S. equity indexes and $4,000.00 divided by four (4) different commodity-related assets.

By NO MEANS would any investment professional advise this type of asset allocation.

What I'm attempting to show, or observe, is the FOLLOW THE MONEY observation, and what may take place early in the second quarter.

Here's the Beetle's Balanced Benchmark at the 03/31/08 close. The DXY is now trading 04/01/08, but you should get the drift.

What should be done at least once a year is for investors to "rebalance" their holdings. What is FORCES an investor to do is systematically "buy low" and "sell high." Don't get this confused with "buy the low" and "sell the high." Link

A QUARTERLY rebalancing would show "Cash" as depicted by the DXY lost 5.91% of its value, or $59.05 and would need to be replenished to bring it back to a 12/31/07 closing benchmark.

"Fixed Income" showed some capital gain appreciation, and the Profit/Loss would NOT include any dividends paid for the quarter. Still, asset reallocation would suggest "S"elling some SHY, IEI, IEF, TLH, TLT and LQD. The MUB and HYG saw declines, so some capital reallocated to these two asset classes.

Equities: The MEGA Caps of the DIA fell $76.57, or -7.66% during the quarter (excluding dividends) and reallocation would have BUYING an additional $76.57 worth of DIA.
SPY fell $97.32, QQQQ fell $146.42 and IWM fell $100.26. A systematic rebalance would have those amounts purchased

"Hard Assets" like the broadly diversified CSG found a handsome gain of $97.08, or +9.71% in Q1 and those gains should be harvested. USO +7.39%, GLD +9.64% and how about the SLV's +15.95%?!!

Tomorrow, if things are "calm" I'll show the newly rebalanced Beetle's Balanced Benchmark where "Cost" for each asset class will once again be "squared" at roughly $1,000.00. Then, from time-to-time, we'll check in on things, and see where the MONEY is FLOWING as Q2 progresses.

Having hypothetically started Q1 with $17,000.00, the above portfolio's value at the above screen capture would have been $17,000 - 59.05 + 135.75 - 420.57 + 426.89 = $17,083.02.

I'll take $17,083.02, then divide by number of assets (17) to establish a "cost" of approximately $1,004.88 for each asset class.

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