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Keene Little : 4/18/2008 12:51:05 AM

Friday's pivot tables: Link and Link

Thursday was just a doji day and it could mean we're going to work our way higher or pullback first. Flip a coin. I mentioned towards the end of the day on Thursday that the pattern is set up for what's called an expanded flat a-b-c correction and it calls for a sharp drop lower Friday morning, perhaps with a test of Thursday's low or a minor new low (set a bear trap?) and then a reversal back to the upside to new highs into early next week. It might look something like the depiction on this SPX 15-min chart: Link

If SPX does drop down and finds support near 1355 then a Fib projection for the next leg up (for equality with the leg up from Tuesday to Wednesday's high) is to 1396. There are several layers of resistance between 1395 and 1415 so I'm hoping we'll get the rally leg into early next week (probably Monday) to set up a potentially very good short play.

If we get only a minor pullback and press higher right away it could set up an earlier top and then a deeper pullback. I'll show that possibility if it looks like it's setting up in the morning.

OI Technical Staff : 4/17/2008 9:59:59 PM

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Jeff Bailey : 4/17/2008 5:53:24 PM

Closing Internals found at this Link

Jeff Bailey : 4/17/2008 5:33:49 PM

05:00 tick on the DXY is 71.597. This would be the match trade to the 05:00 screen capture of ALL currencies and their closes.

Jeff Bailey : 4/17/2008 5:11:27 PM

One day seems like a short period of time. An eternity for some into tomorrow's expiration.

Jeff Bailey : 4/17/2008 5:09:35 PM

GOOG $529.00

Jeff Bailey : 4/17/2008 5:08:47 PM

At today's close, the GOP-DO were $0.45 x $0.75.

The $0.30 lottery play would have been the $510s GOP-DU

Jeff Bailey : 4/17/2008 5:05:06 PM

Currencies into their 05:00 Close at this Link

Jeff Bailey : 4/17/2008 4:53:20 PM

ICUI was the first, maybe the 2nd stock I bought as an individual investor way back in the day.

Stratacom, gobbled up by CSCO may have been the first.

How far the electronic age has brought us.

Jeff Bailey : 4/17/2008 4:51:25 PM

ICU Medical (ICUI) $27.61 +0.03% ... slips to $27.11 extended.

Jeff Bailey : 4/17/2008 4:49:14 PM

GOOG's 150-day at $580.44.

Jeff Bailey : 4/17/2008 4:48:44 PM

BIDU's close was right on its 150-day SMA. Between its 38.2% and 50%.

Jeff Bailey : 4/17/2008 4:47:36 PM

Good gravy! GOOG $532. Ah ... just a smidge above 0% conventional. $519.01 (01/23/08 low)

Jeff Bailey : 4/17/2008 4:45:41 PM

Beetle's Blanced for Q2 would have HYG $97.37 +0.10% ... up 0.73% Q2TD

Jeff Bailey : 4/17/2008 4:43:47 PM

Live- AMG Data Service: US Junk Bond Funds Report $56.4M Net Inflow In Week

High-yield bond funds reported $56.4 million of net inflows in the week ended Wednesday, according to AMG Data Services of Arcata, Calif. It was the third week of inflows after three consecutive weeks of withdrawals and followed a $750.6 million net inflow a week ago. In the week, the number of funds reporting inflows fell to 142 from 207 the prior week, while the number of funds reporting outflows rose to 210 from 138. In the week ended Wednesday, the junk bond market was positive, gaining 0.176%, according to the Merrill Lynch High-Yield Master II Index. So far in 2008, the high-yield market has lost 1.088%.

Jeff Bailey : 4/17/2008 4:41:05 PM

Brazil Ethanol Lobby Sees Bigger Sugar, Ethanol Mkt In '08

DJ- Brazil should disregard attacks on the sugarcane and ethanol industry, and hike exports to places such as the U.S. and Europe, officials at the Union of Sugarcane Industries, or Unica, said Thursday. "Unica will continue to fight against the perception that biofuels are responsible for higher food prices," Unica President Marcos Jank told Dow Jones Newswires on the sidelines of a press conference. The ethanol and biofuels industry has been attacked recently in a series of reports and newspaper articles that accuse it of being among the reasons for sky-high food prices by robbing the land of badly needed food crops. Jank said the argument ignores the fact that ethanol only accounts for 1% of the global energy matrix and that rising food prices have been caused by many factors, such as distribution, government policies or changing populations. Despite the attacks on ethanol, Unica said that ethanol exports should reach 3.91 billion liters in 2008-09, up 27% from 3.1 billion liters in 2006-07, while sugar exports should reach 18.9 metric tons in 2008-09 versus 16.4 million tons in 2007-08. Brazil is the world's No. 1 ethanol exporter. Unica's technical director, Luis Antonio Padua Rodrigues, said the U.S. offers a "window of opportunity" due to high corn prices, which is the raw material used to make ethanol in the U.S. According to Rodrigues, the high price of corn has caused quotations of corn-based ethanol to reach $2.50 a gallon on the Chicago Board of Trade. "This is well above the price in Brazil, which is close to $1 per gallon," said Rodrigues. Increased exports this year will be a turnaround from the 2007-08 season, when producers faced a 6% decrease in ethanol exports to 3.1 billion liters from 3.3 billion in 2006-07, and a 3% fall in sugar exports to 16.4 million tons from 17 million tons the season before. Unica also intends to target imports towards the European Union. "At the moment the European market is still small and we hope to benefit from the mandate for biofuels to make up 10% of renewable fuel content," said Jank. Ecological Issues Unica will also continue to lobby and campaign to improve labor practices and ecologic standards at home and abroad for the use of ethanol. A case in point is that Unica expects the mechanization of sugarcane harvesting to rise above the 50% mark in 2008-09 versus 47% for 2007-08 and 34% in 2006-07, rather than using the traditional method of burning the cane to enable their workers to be able to hack down the plant. Brazil's new 2008-09 center-south sugarcane crop should come in around 498.1 million metric tons versus 431.2 million tons in 2007-08. Unica said that the sugar/ethanol mix in the 2008-09 crop would be 58% ethanol and 42% sugar, compared with 56% ethanol and 44% sugar in the 2007-08 season. The largest market for ethanol is Brazil's growing fleet of flex-fuel cars, which should grow by 2.9 million cars this year, with 70% of them estimated to use ethanol. Brazil's central south region, which produces 86% of Brazil's sugarcane, has 315 mills, including 30 new mills that start production in 2008-09. Sao Paulo continued to be the largest sugarcane producing state with 296.3 million tons in 2007-08, with Parana the No. 2 producer with 40 million tons of cane. Brazil is the world's No. 1 sugarcane producer and No. 1 sugar exporter.

Jeff Bailey : 4/17/2008 4:38:01 PM

Visa (V) $67.04 +1.36% ... flat extended.

Jeff Bailey : 4/17/2008 4:37:25 PM

Capital One (COF) $48.51 +4.88% ... $48.70 extended on headline numbers.

Jeff Bailey : 4/17/2008 4:35:58 PM

Live- US Fed: Primary Dealer Borrowings Wed $25.66B; Avg Daily $24.80 Bln

Jeff Bailey : 4/17/2008 4:35:06 PM

Live- US Fed: Discount Window Avg. Daily Borrowings Wk Of Apr. 16 $32.663 Bln

Jeff Bailey : 4/17/2008 4:33:30 PM

Live- US Fed: Total Discount Window Borrowings $34.508 Bln As of Wednesday

Jeff Bailey : 4/17/2008 4:31:56 PM

NOAA: March Global Land Temperatures Was Warmest On Record

Jeff Bailey : 4/17/2008 4:29:36 PM

Callaway Golf (ELY) $14.19 -2.33% ... jumps to $15.00 on headline numbers.

Jeff Bailey : 4/17/2008 4:28:54 PM

AMDocs (DOX) $28.19 +0.49% ... jumps to $28.97 on headline numbers.

Jeff Bailey : 4/17/2008 4:26:39 PM

Zionz Bancorp. (ZION) $43.71 +2.77% ... quiet on headline numbers.

Jeff Bailey : 4/17/2008 4:24:47 PM

SanDisk (SNDK) $25.90 -2.99% ... pops to $26.70 on headline numbers.

Jeff Bailey : 4/17/2008 4:21:16 PM

GOOG $502

Jeff Bailey : 4/17/2008 4:20:57 PM

AMD $6.14 now.

Keene Little : 4/17/2008 4:20:17 PM

With the BIG bounce in GOOG after hours, it could have price jumping right back up to the top of its flag pattern that it was in since the March low. I say "was in" because it had dropped out the bottom of the bear flag this week. Nice bear trap if the after-hours rally holds tomorrow. Link

It's possible the bears will return the favor and set a bull trap tomorrow. If GOOG fails to push much above 510 (creating a little throw-over above the flag pattern to match the throw-under this week) the news-related spike up might be the finish to the 4th wave correction (pink wave 4) and we'll then get the 5th wave down to a new low.

But if the bulls can push it higher tomorrow, and hold it up there, then there's the bullish potential for a rally back up to the broken uptrend line from March 2005, currently near 590, and the 50% retracement of the Nov-Mar decline at 580.

Jeff Bailey : 4/17/2008 4:19:33 PM

Advanced Micro (AMD) $6.19 +1.97% ... edged higher at $6.34 on headline numbers.

Jeff Bailey : 4/17/2008 4:12:46 PM

QQQQ $45.27 -0.22% ... $45.75 extended.

Jeff Bailey : 4/17/2008 4:10:13 PM

Baidu.com (BIDU) $309.98 -2.44% ... $325.25 extended.

Jeff Bailey : 4/17/2008 4:07:53 PM

"Oh shhooooot!" say the NAKED calls ... GOOG Option Chain near the close Link

Jeff Bailey : 4/17/2008 4:06:04 PM

Google (GOOG) $449.54 -1.20% ... surges to $499.50 on headline numbers.

Keene Little : 4/17/2008 4:05:13 PM

Looks like some happy GOOG bulls after they announced earnings (or unhappy shorts). GOOG up near $50 from the close.

Linda Piazza : 4/17/2008 4:01:48 PM

It was down to the wire, wasn't it, but the SPX has the expected small-bodied candle at resistance today.

Jeff Bailey : 4/17/2008 3:58:39 PM

$470s are $7.10 x $7.10. GOOG $452.38

Jeff Bailey : 4/17/2008 3:58:04 PM

As negative as some are expecting the GOOG quarter to be, options market makers are VERY proud of their out-the-money call premiums.

Linda Piazza : 4/17/2008 3:56:38 PM

Prices might be climbing, but the A/D line is still stuck beneath resistance. It's at 213.

Keene Little : 4/17/2008 3:50:56 PM

As part of a slghtly larger sideways consolidation pattern (an expanded flat a-b-c), we could see a sharp thrust lower tomorrow morning that slightly undercuts today's low. That could end up being a bear trap that sets up another strong rally leg. Perhaps initial disappointment from GOOG will depress the market but the dipsters will use it as an opportunity to get in. That's just a guess obviously but from an EW perspective I see the possibility.

Jeff Bailey : 4/17/2008 3:44:31 PM

TEP-ET $0.25 x $0.30.

Jeff Bailey : 4/17/2008 3:43:46 PM

WHR-PP $0.25 x $0.35

Jeff Bailey : 4/17/2008 3:43:17 PM

PMJ-DE $1.55 x $1.75 ...

Jeff Bailey : 4/17/2008 3:42:45 PM

YM 12,645

Keene Little : 4/17/2008 3:42:43 PM

Two equal legs up for SPX off today's low is at 1368.81. We could see another pullback from there as the market chops its way higher, similar to what it did following the strong rally into the April 2nd high (to the high on April 7th).

Jeff Bailey : 4/17/2008 3:42:30 PM

XLF $26.00

Linda Piazza : 4/17/2008 3:42:38 PM

The A/D line certainly isn't strong, is it? Although it's been climbing most of the day, it's been climbing within the lower half of its Keltner channels, the bearish half. As I type, it's hit potentially strong resistance near +240, with the A/D line at 232 as I type. An A/D line of only 232 isn't a strong corroboration of equity gains. Nevertheless, gains they've been.

Linda Piazza : 4/17/2008 3:39:16 PM

While I was gone, the SPX again created a breakout situation on its 15-minute chart. It would need to fall below 1362.66 currently to erase that breakout mode. For the OEX, tht level is 627.45.

Jeff Bailey : 4/17/2008 3:38:16 PM

$/yen 102.56 .... quiet

Linda Piazza : 4/17/2008 3:37:50 PM

I'm back and all is okay. I've taken some time to get reacquanted with what's going on in the markets and calm my brain a bit, too. What I'm seeing is a lot of what I expected to see today--a whole lot of daily candles that are so far indicating indecision. We see, so far, small-bodied candles on the SPX and some other charts, although gains as I began typing question whether that's what we'll have by the end of the day. We see inside day candles on the Nasdaq and Russell 2000. Like doji or other small-bodied candles, inside-day candles (today's range totally inside yesterday's, and, more classically, inside the open and closing range from yesterday) are indicative of indecision. They often indicate a potential reversal when they come at the top of a long climb or at the bottom of a long descent. I don't know whether to term this the top of a long climb as all the indices have been doing a lot of chopping around the last couple of weeks.

Much will depend on these last few minutes, but if the Dow, OEX and SPX end the day by pulling back closer to their opening levels, then another day of indecision or an actual reversal look possible. Right now and especially if they move too much higher, they won't be producing small enough bodies on their small-bodied candles to say they're producing potential reversal signals.

If the Nasdaq and Russell 2000 don't push above yesterday's highs, then the possibility of a reversal must be considered along with the other possibilities.

Jeff Bailey : 4/17/2008 3:37:40 PM

YM 12,650

Jeff Bailey : 4/17/2008 3:37:27 PM

XLF $26.00 +2.12% ... alert!

Jeff Bailey : 4/17/2008 3:36:53 PM

DJ Live- Mexico's Feb Ind. Output Up 5.4%; Consensus +2.5%

Jeff Bailey : 4/17/2008 3:35:30 PM

Sallie Mae (SLM) $17.41 +7.07% ...

Jeff Bailey : 4/17/2008 3:34:54 PM

DJ Live- Bank Of America To Stop Private Student Lending

Jane Fox : 4/17/2008 3:34:28 PM

NEW YORK (MarketWatch) -- Gold futures ended lower Thursday, after rallying in the previous session, as strength in the U.S. dollar weighed on the precious metal. Gold for June delivery fell $5.40 to end at $942.90 an ounce on the New York Mercantile Exchange.

"For the moment, $940 in gold appears supportive and the market could still aim for $960 before significant profit-taking emerges," said Jon Nadler, senior analyst at Kitco Bullion Dealers.

On Wednesday, gold futures rallied $16.30 to end at $948.30 an ounce.

"The dollar's gyrations and crude oil's every price tick will continue to provide the overall direction for gold," Nadler said. "Individual investors appear slightly skittish about jumping into fresh long positions at the moment and may hold back until a clearer uptrend is confirmed."

Jeff Bailey : 4/17/2008 3:33:50 PM

Looking at some of the "print" media earnings (largely ad and help wanted driven) it was a rough quarter.

Jane Fox : 4/17/2008 3:33:30 PM

SAN FRANCISCO (MarketWatch) -- Crude-oil futures close slightly lower Thursday, pulling back from a record atop the $115-a-barrel mark, as firmness in the U.S. dollar served to put pressure on oil prices.

Crude for May delivery fell 7 cents to settle at $114.86 a barrel on the New York Mercantile Exchange. Earlier, the crude contract hit a record high of $115.54 a barrel.

Recent strength in crude prices has been driven by a weaker dollar as well as by concerns about supply and U.S. inventory levels.

Crude soared to close at a record high of $114.93 in the previous session, triggered by data showing a surprising drop in U.S. crude inventories. The dollar, which touched a new low against the euro Wednesday, also helped push oil prices.

Jane Fox : 4/17/2008 3:31:36 PM

VIX to new daily lows but ES is not so I think ES will continue higher. Link

Jeff Bailey : 4/17/2008 3:31:34 PM

I tell you what ... IF, and I do mean IF, GOOG gives an upside surprise, and IF that $500 Call OI of 16,721 is largely NAKED, it could rock.

Jeff Bailey : 4/17/2008 3:29:31 PM

PMD-DE would be $1.85 x $2.05 here. So not a real "bugger" at this point. Ask me again if PBR goes $129.

Jeff Bailey : 4/17/2008 3:26:48 PM

You bugger ..

Jeff Bailey : 4/17/2008 3:26:25 PM

PBR $126.00

Jeff Bailey : 4/17/2008 3:22:11 PM

$/yen 102.62

YM 12,640

Jeff Bailey : 4/17/2008 3:20:39 PM

It wasn't Palladium $459.05 -0.20% ...

Jeff Bailey : 4/17/2008 3:19:57 PM

I think that also a bit what drove SWC $18.43 -1.12% yesterday from $17.00 and $17.50 strike.

Keene Little : 4/17/2008 3:18:53 PM

I showed a setup for the euro yesterday with a potential throw-over finish to its ascending wedge. A down day today with a close back inside the wedge would be a sell signal and so far that's what we've got: Link . A break below Tuesday's low at 1.5706 would be confirmation of the top.

A drop in the euro ties in nicely with tops for some of the other commodities such as oil. So far the USO daily candle is a little doji star and if it drops tomorrow it will leave an evening star reversal signal at resistance: Link

Jeff Bailey : 4/17/2008 3:17:53 PM

And its all-time high ... exiting an April $125 call from the long side is one thing. Being NAKED it with these technical another.

Jeff Bailey : 4/17/2008 3:16:22 PM

Lookee here ... PBR $125.19 +1.89% ... it is going to press the $125.00 strike.

Jeff Bailey : 4/17/2008 3:14:21 PM

YM 12,628

Jeff Bailey : 4/17/2008 3:14:11 PM

VXO.X 22.34 +1.82% ... session low and DAILY Pivot.

Jeff Bailey : 4/17/2008 3:12:20 PM

Last month I played the GOP-CJ on 03/19/08 for $0.20 with GOOG $432.78 headed into expiration and GOOG did nothing.

Jeff Bailey : 4/17/2008 3:10:24 PM

GOOG $452.75 -0.50% ... April "Max Pain" $450.00 ... $10 inc.

Jeff Bailey : 4/17/2008 3:06:51 PM

XLF $25.86 +1.57% ... now most active.

QQQQ, SPY, INTC, F, GE, C, NOK, MSFT and CSCO round out top 10.

Jeff Bailey : 4/17/2008 3:02:20 PM

Don't know about you, but kind'a zeroing in on IWM $70.00, DIA $126.00, SPY $136.00.

Jeff Bailey : 4/17/2008 2:56:52 PM

$/yen 102.54 ... "best" was 102.67 and "worst" was 102.49.

Jeff Bailey : 4/17/2008 2:55:14 PM

"Best" we could do was 12,636. "Worst" was 12,593 and that was bad enough.

Jeff Bailey : 4/17/2008 2:53:29 PM

YM long stopped alert! 12,620

Jeff Bailey : 4/17/2008 2:49:21 PM

Volume had dried up

Jeff Bailey : 4/17/2008 2:46:50 PM

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

YM 12,630.

Jeff Bailey : 4/17/2008 2:42:03 PM

$/yen 102.56 ...

Jeff Bailey : 4/17/2008 2:41:21 PM

YM Long raise stop alert! ... to 12,600

YM 12,226.

It either goes, or it doesn't from here.

Jeff Bailey : 4/17/2008 2:38:21 PM

WHR $80.66 -0.25% ...

Jeff Bailey : 4/17/2008 2:38:03 PM

PBR $124.12 +1.04% ...

Jeff Bailey : 4/17/2008 2:37:47 PM

Just more than a day until April expiration.

Jeff Bailey : 4/17/2008 2:37:26 PM

VXO.X 22.61 +3.09% ... Its daily pivot 22.34. VXO's session low has been, been 22.37

Jeff Bailey : 4/17/2008 2:36:37 PM

VIX.X 21.00 +2.28% ... session low. Juuuuuuust under Daily Pivot.

Jeff Bailey : 4/17/2008 2:35:56 PM

YM 12,613 ... juuuuust under WKLY R1.

Jeff Bailey : 4/17/2008 2:35:11 PM

Yep ... BIX.X 240.84 +2.10% ... WKLY Pivot 241.39. BIX.X high has been, been 241.89. This would be a signal for strength into the close. Or LACK of further strength for the majors.

Jeff Bailey : 4/17/2008 2:30:04 PM

XLF's WKY Pivot $25.70. DAILY R1 overlaps at $25.71. DAILY R2 $25.89 has been sloppy this afternoon. If $26.00 taken out, WKLY R1 $26.35.

Tough call here.

Jeff Bailey : 4/17/2008 2:26:59 PM

XLF $25.84 +1.49% ... #2 most active now. Session high has been, been ... $25.99.

Jeff Bailey : 4/17/2008 2:19:58 PM

TRIN 1.07 ...

Jeff Bailey : 4/17/2008 2:18:57 PM

"squared up" at this point.

Jeff Bailey : 4/17/2008 2:18:44 PM

YM 12,601 ... $/yen 102.51

Jeff Bailey : 4/17/2008 2:15:24 PM

YM 12,594

Jeff Bailey : 4/17/2008 2:14:27 PM

$/Yen 102.50 ... a moment of day-trader truth here.

Jeff Bailey : 4/17/2008 2:08:43 PM

02:00 Internals at this Link

Keene Little : 4/17/2008 2:01:59 PM

Rallies in this market have tended to be strong legs up followed by puny sideways consolidations (vs. a normal pullback correction) and I'm getting the feeling that's what we're going to get here. A sideways consolidation today followed by more upside tomorrow could be in store for us. I'm still hoping to see the DOW pull back to 12500 to set up a good long play. In the meantime, watch the chop.

Jeff Bailey : 4/17/2008 1:59:20 PM

$/yen 102.64

Jeff Bailey : 4/17/2008 1:59:02 PM

YM 12,608 ... needs the bid here ... get back above WKLY R1.

$/yen holding afternoon highs so far.

Jeff Bailey : 4/17/2008 1:44:09 PM

TOL $23.37 -0.93% ...

Jeff Bailey : 4/17/2008 1:43:42 PM

NVR (NVR) 655.71 +0.89% ... getting an upside alert here as this high-end homebuilder probes its January highs.

Jeff Bailey : 4/17/2008 1:40:36 PM

YM Long Alert! ... here at 12,620. Stop goes 12,591. Target 12,700.

Keene Little : 4/17/2008 1:27:53 PM

I've shown this SPX monthly chart a few times this year and pointed out the 18-month moving average has been a good moving average for identifying the cyclical bull and bear markets: Link . And once we enter a bull or bear that moving average acts as support and resistance.

Forget about what I say or CNBC says or your favorite analyst says, listen to the market (charts). Once SPX dropped below the 18-mo average in January this says we're in a bear market. Now we watch to see if it acts as resistance and there's a good chance it will (currently near 1400). It makes for a very good place to take a long term short position if and when it's tested.

The DOW's monthly chart shows the same picture and that moving average, at 12628, was tagged yesterday and today: Link . You can see that the DOW poked higher than this average several times during the 2000-2002 bear market and therefore is a little less precise than SPX.

Therefore another 400 points higher for the DOW (13K) and 40 points for SPX (to get up to 1400) could be in store for us. That's another reason I'll be looking at a pullback today for a buying opportunity--there's some upside potential for a good trade. But if and when it gets up there, well let's just say it could be lip-smacking beary good.

Jeff Bailey : 4/17/2008 1:24:51 PM

$/yen 102.53 +0.70% ...

Jeff Bailey : 4/17/2008 1:23:14 PM

YM still "in the zone" (daily pivot / WKLY R1)

Jeff Bailey : 4/17/2008 1:22:21 PM

$/Yen DAILY R1 102.22, R2 102.62 would be the key now.

Jeff Bailey : 4/17/2008 1:21:37 PM

Ok, the 5-year has tagged its DAILY R2. So eyes will roll up to there on the YM.

Jeff Bailey : 4/17/2008 1:17:21 PM

VXO.X 22.75 +3.69% ... more pertinent for YM/DIA traders.

You know there's some NAKED call trouble in the DIA.

VXO's WKLY's are 18.35, 22.14 (tested yesterday), Piv= 24.07, 27.68, 29.79.

Jeff Bailey : 4/17/2008 1:15:38 PM

VIX.X 21.24 +3.45%

Jeff Bailey : 4/17/2008 1:14:53 PM

YM 12,612 ... pressed against WKLY R1.

Jeff Bailey : 4/17/2008 1:14:17 PM

$/Yen alert! ... 102.59 ... this is your correlative MONTHLY Pivot/WKLY R1.

Jeff Bailey : 4/17/2008 1:12:20 PM

As noted late yesterday (only so much time, only two eyes), is that DXY's weakness was largely $/can to parity of 1.00.

Jeff Bailey : 4/17/2008 1:10:50 PM

It will go SOMEWHERE. Dollar will tie as to if it stays here in the U.S., or goes overseas.

$/yen has been the drive for equities here in the U.S.

My observations the last few months at least.

Jeff Bailey : 4/17/2008 1:09:26 PM

Excellent, excellent comments from CNBC's Rick Santelli in the pits. The wealth, or capital flowing out of the short-end.

Keene Little : 4/17/2008 1:09:20 PM

The DOW's daily chart shows price stalled at the 100-dma (12651) today and has so far formed a spinning top doji. That's a potential reversal pattern but wouldn't be confirmed until a down day tomorrow. In the meantime a doji means an indecision day and so far that's exactly what the day looks like. Daily chart: Link

Jeff Bailey : 4/17/2008 12:51:05 PM

Need to shut down for a minute. Back in a few.

Jeff Bailey : 4/17/2008 12:43:40 PM

If I could get a chart up of the $/yen, might have a bull trade setup.

Jeff Bailey : 4/17/2008 12:41:52 PM

YM 12,585

Jeff Bailey : 4/17/2008 12:40:54 PM

5-year Yield ($FVX.X) alert! ... up 7.2 bp at 2.892%. WKLY R2 here.

Linda Piazza : 4/17/2008 12:39:03 PM

I've got a family emergency and will be away for a while, perhaps the rest of the afternoon.

Jeff Bailey : 4/17/2008 12:38:56 PM

Money Flows @ 12:29 PM Link

Some changes since 10:29 Link

Keene Little : 4/17/2008 12:25:58 PM

A 38% retracement of the DOW's rally by the end of the day would be near 12500 and back for a retest of the broken downtrend line from the April 7 high. That would be a good setup to test the long side. 30-min chart: Link

Jeff Bailey : 4/17/2008 12:20:57 PM

12:00 Internals found at this Link

Jeff Bailey : 4/17/2008 12:11:13 PM

By comparison (using same retracement anchor points), QQQQ $45.12, with its 19.1% at $44.19.

Importance of 4 and 5-lettered "generals."

Jeff Bailey : 4/17/2008 12:07:18 PM

NASDAQ Comp. (COMPX) 2,331 -0.81% ... 19.1% conventional here. "Sloppy" around here last couple of weeks. Will it ever "stick?"

Jeff Bailey : 4/17/2008 12:03:12 PM

General Motors (GM) $19.48 -2.16% ... has done little by comparison.

Jeff Bailey : 4/17/2008 12:01:56 PM

Ford Motor (F) $7.20 +0.13% ... #34 most active. Pretty good run from $5.00 since 3/17/08.

Jeff Bailey : 4/17/2008 12:00:03 PM

IWM $70.19 -1.41% ... nearing April "Max Pain" again. Has been roughly $2 either side since May's expiration. #40 most active.

Jane Fox : 4/17/2008 12:01:11 PM

THe VIX alerted us to this downdraft but now I see the S&P futures testing daily lows but the VIX is not testing daily highs so that may be all we get.

Jeff Bailey : 4/17/2008 11:56:23 AM

Most Actives ... SPY $135.86 -0.72%, NOK $28.80 -14.51%, C $23.67 +0.98%, LVLT $2.16 +1.40%, INTC $22.06 -0.31%, EBAY $30.74 -4.29%, DELL $19.00 +1.49%, QQQQ $45.12 -0.55%, CSCO $23.69 -0.58%, WM $10.90 (unch).

Jeff Bailey : 4/17/2008 11:53:23 AM

DJ (earlier)- GE CAP TO ACQUIRE MOST OF CITICAPITAL

Deal gives GE Capital about $13.4 billion in assets from Citi, which will hold on to CitiCanada's tax-exempt finance business. The businesses being sold employ about 1,400 people and have some 160,000 customers in North America.

GE $32.16 -0.21% ...

C $23.67 +0.98% ...

Jeff Bailey : 4/17/2008 11:51:09 AM

DJ (earlier) - MARRIOTT 1Q NET FALLS DROPS 34%

Hotel operator's net income drops to $121 million, or 33c a share, which is in line with analysts' views. Revenue improves 3.9% to $2.95 billion. For the 2Q, it expects earnings per share of 48c to 52c versus expectations of 57c.

MAR $33.57 +3.32% ...

Jeff Bailey : 4/17/2008 11:49:53 AM

DJ (earlier)- SOUTHWEST, CONTINENTAL, HIT BY SOARING 1Q FUEL COSTS

Continental posts loss of $80 million, or 81c a share. Excluding items, its loss is 86c a share; Wall Street expected 93c. Southwest 1Q net profit falls 63.4% to $34 million, or 5c. Excluding items, it earns 6c a share, a nickel better than expected.

CAL $21.02 +0.86% ...

LUV $12.47 -0.24% ...

Linda Piazza : 4/17/2008 11:48:51 AM

The OEX has now set a potential downside target of 622.66. See my 11:48:11 posts for cautions about any targets today.

Linda Piazza : 4/17/2008 11:48:11 AM

The SPX has now set a potential downside target that's now 1353.05. Whether or not it reaches it, I'm not sure as my scenario for today already involved choppy trading conditions.

Jeff Bailey : 4/17/2008 11:43:47 AM

I haven't been following news items on shares of PetroChina (PTR) $127.35 -1.64% Link

It is one of the most perplexing oil stocks out there.

Linda Piazza : 4/17/2008 11:41:43 AM

The SPX is dropping into that 1358-ish support that I thought might be hit when I mentioned it in my 11:17:01 post. That support has since risen, however, to 1359.20, very near potential support on the 30-minute chart, too. This could be strong enough to at least pause the SPX's decline if not stop it for a time.

If the SPX closes this 15-minute period below it and then confirms by falling away from it, it could then drop toward next support at 1352.83, a level that I thought earlier could be tested, mentioning that the SPX could spent up to several hours there if it tests it. However, the A/D line just isn't giving much information right now, so I can't gauge how likely that is to happen. Possible, certainly, but probable? I don't know.

Jeff Bailey : 4/17/2008 11:34:09 AM

H.R. 5719 House Vote (results) Link

Jeff Bailey : 4/17/2008 11:31:17 AM

As an sole proprietor, I have an HSA, one of the BEST things the Federal Govt. has done for me in recent years.

On Tuesday, I received this email from my custodian bank.

HSA Bank wants to alert you to a new tax bill, H.R. 5719, that is going to be voted on in the U.S. House of Representatives TODAY!

This law will likely double your monthly HSA administrative fees. HSA Bank is opposed to increasing your fees, but we will have no choice if this bill is passed by Congress and becomes law.

In addition, this new law would:

eliminate the ability to get reimbursed out of your HSA when you want by check or at an ATM. force submission of your medical receipts to a third party in order for you to utilize the funds in your HSA.

The increase in fees will be for the third party to review your expense receipts.

A corporation that has a patent on part of the process used to review your paper receipts asked Congress to pass this law.

We hope you will join us in telling Congress that HSA users are responsible taxpayers and don't need to pay a corporation to supervise their HSA spending.

If you do not call, Congress will think HSA policy holders are in agreement with this new tax.

You can call (202).225-3121, which is the switch board at Capitol Hill and give them your zip code and they will transfer you to your U.S. Representative's office, or you can send them an e-mail by visiting your representative's website. The link to the House of Representative's website directory is: Link

We recommend that you tell them the following:

I am a constituent and I live in _______ (name of your town) and I am opposed to Congress doubling the costs of my HSA in H.R. 5719, the "Taxpayer Assistance and Simplification Act of 2008." I am a responsible taxpayer and forcing me to pay more fees for my HSA does not assist me at all, and forcing me to submit my expenses to a third party is complicating my HSA, not simplifying it. I want my Congressman or Congresswoman to vote NO.

Jeff Bailey : 4/17/2008 11:26:44 AM

Shopping For A Health Savings Account?

If you're enrolled in a health insurance plan that qualifies you to open a tax-advantaged health savings account, it's worth shopping around: Fees, interest rates and investment options vary widely on HSAs, writes Victoria Knight.

Jeff Bailey : 4/17/2008 11:25:45 AM

DJ (earlier)- SUPERVALU 4Q JUMPS 30% ON HIGHER SALES

SuperValu reports net income of $156 million, or 73c a share, amid a variety of charges as the nation's third-largest food retailer posts record revenue. Sales for the period come in at $10.39 billion.

SVU $30.58 +5.26% ...

Jeff Bailey : 4/17/2008 11:24:08 AM

DJ (earlier)- CIT POSTS 1Q LOSS, CUTS DIVIDEND, TO SELL ASSETS

Commercial lender posts loss of 249.7 million, or $1.35 a share, due to surging credit-loss provisions. Net finance revenue drops 9.7% to $433.3 million. Firm agrees to sell $5.4 billion in assets and may sell $2 billion of loans.

CIT $12.40 +5.26% ...

Jeff Bailey : 4/17/2008 11:23:00 AM

DJ (earlier)- UNITED TECH 1Q NET UP 22% ON BROAD STRENGTH

United Technologies, which is making bidding $2.63 billion for Diebold, reports net income of $1 billion, or $1.03 a share. Excluding charges, its EPS is $1.05 versus an expected $1.01. Revenue climbs 12% to $13.7 billion. UTX $70.69 -2.67% ...

Keene Little : 4/17/2008 11:20:17 AM

So far the lack of participation in the techs and small caps has been a drag on the market. You want to see them leading to the upside and when they're not you should remain cautious. Right now we have a recipe for chop with a leaning towards the bearish side.

Jeff Bailey : 4/17/2008 11:19:40 AM

NOK's April "Max Pain" theory value $33.00 ... $1 inc.

Jeff Bailey : 4/17/2008 11:18:41 AM

DJ (earlier)- NOKIA SHARES SLIDE AFTER MISSING 1Q NET PROFIT EXPECTATIONS

Shares in Nokia drop 10% after the company misses analysts' expectations for 1Q earnings. Net profit rises 25% to euro 1.22 billion in 1Q, from euro 979 million in the year-earlier period, with robust growth in high-growth emerging markets contributing significantly. Nokia also reiterates that it expects industry mobile phone sales growth of nearly 10% in 2008. NOK $29.00 -13.92% ...

Jeff Bailey : 4/17/2008 11:17:27 AM

(At 10:00 AM EDT) US LEADING INDICATORS EDGE HIGHER

An index intended to show the U.S. economy's future direction rose 0.1% in March to 102.0 after a 0.3% drop in February and 0.4% decline in January. It is the first increase after five consecutive months of declines.

Linda Piazza : 4/17/2008 11:17:01 AM

The SPX looks likely to close this 15-minute period below its 15-minute 9-ema. The 30-minute version is now at 1360.17, but I wouldn't be surprised to see a dip to 1358-ish support. This is the Keltner support level that was near 1352-1353 earlier this morning.

Jeff Bailey : 4/17/2008 11:16:04 AM

(At 10:00 AM EDT)PHILADELPHIA FED FACTORY GROWTH CONTRACTS MORE

The Philadelphia Fed's general business conditions index, a gauge of the health of the region's manufacturing sector, falls in April to -24.9 from -17.4 in March. Economists expected the overall index to tick up to -15.0 in March.

Jeff Bailey : 4/17/2008 11:14:51 AM

DJ (earlier)- PFIZER NET DROPS 18% ON NORVASC, ZYTEC SALES

Drug maker's 1Q net income slips to $2.78 billion, or 41c a share, hurt by the loss of U.S. exclusivity for drugs Norvasc and Zyrtec. Excluding items, earnings are 61c a share, a nickel below expectations. Revenue drops 5% to $11.85 billion. It sees 2008 earnings missing street. PFE $20.40 -3.31% ...

Jeff Bailey : 4/17/2008 11:12:39 AM

KForce (KFRC) $8.15 -5.45% ...

Jeff Bailey : 4/17/2008 11:11:05 AM

Monster Worldwide (MNST) $22.71 -1.64% ...

Jeff Bailey : 4/17/2008 11:10:39 AM

Manpower (MAN) $57.16 -1.60% ...

Jeff Bailey : 4/17/2008 11:10:18 AM

DJ (earlier)- US JOBLESS CLAIMS UP 17K IN WEEK

Number of idled U.S. workers filing new claims for unemployment benefits rises by 17,000 to 372,000, in the week to April 12, while the four-week average of new claims decreases by 750 to 376,000.

Jeff Bailey : 4/17/2008 11:09:22 AM

YRCW $13.69 -3.18% ...

Jeff Bailey : 4/17/2008 11:08:35 AM

Dow Jones U.S. Trucking Index (DJUSTK) 343.34 -4.49% ... 61.8% conventional (4/25/07 high to recent 01/09/08 low) as measured with the TRAN.

Jeff Bailey : 4/17/2008 11:06:11 AM

DJ (earlier)- 3-MONTH DOLLAR LIBOR SURGES ON BBA REVIEW

The BBA Libor three-month dollar lifts to 2.8175% from 2.7335% yesterday, a rise of more than eight basis points and the biggest increase since the three-month rate rose 12 basis points Aug. 9. Gain comes after the British Bankers' Association says it is investigating whether banks had misquoted Libor in recent months.

See also my weekly MBA Application Survey postings (each Wednesday) and ARM rates.

Jane Fox : 4/17/2008 11:05:51 AM

It was probably just as well that you did not get into the YM long for it looked like it may hit target there for a while but has now stopped. The VIX was warning me about this.

Jeff Bailey : 4/17/2008 11:04:02 AM

DJ (earlier)MERRILL LYNCH POSTS ANOTHER BIG LOSS ON WRITE-DOWNS

Loss of $1.96 billion, or $2.19 a share, is driven by $6.6 billion in write-downs related to mortgages, CDOs, and loans made to junk-rated companies. CEO John Thain warns that the next half year will continue to be difficult, but he says it would be 'reasonable' to assume that Merrill will show a profit for the rest of the year. MER $45.97 +2.40% ...

Linda Piazza : 4/17/2008 11:01:20 AM

The A/D line has pulled back a bit after moving into that congestion zone and is now at -357. Traders might watch for the possibility that it will now consolidate sideways a while until the 9-ema slants down closer. Then there might be a pop up to test that moving average. Then we might begin to see what happens next. The A/D line's 15-minute 9-ema is now +193 but is still moving down quickly.

Jeff Bailey : 4/17/2008 11:00:48 AM

May "Max Pain" Tabulations (initial)

DIA $122.00 ... $1 inc.
SPY $135.00 ... $1 inc.
QQQQ $45.00 ... $1 inc.
IWM $70.00 ... $1 inc.
SMH $30.00 ... $1 inc.
XLF $25.00 ... $1 inc.

Jeff Bailey : 4/17/2008 10:55:47 AM

April "Max Pain" Tabulations (update)

DIA $124.00 ... $1 inc.
SPY $135.00 ... $1 inc.
QQQQ $44.00 ... $1 inc.
IWM $70.00 ... $1 inc.
SMH $29.00 ... $1 inc.
XLF $25.00 ... $1 inc.

Linda Piazza : 4/17/2008 10:49:51 AM

My view is still that we could get a choppy consolidation type day, so I'm as leery of any advances as I am of any declines. I'm seeing everything and weighing it against that possible scenario--as well as against an actual decline--and I just haven't seen anything to dissuade me from believing that we could end up with a small-bodied candle with upper and/or lower candle shadows today. I'm still weighing what I've seen against that, and I do see and acknowledge that the SPX is again in breakout mode on its 15-minute chart and is continuing to find support on 15-minute closes at the 15-minute 9-ema, now near 1362.68, so the possibility exists that we could get a repeat of some of those paired days when a strong gain on a big-range day was followed by another fairly hefty gain. My concern about the choppy day and about any gains being reversed could be ill founded. However, the A/D line just isn't proving convincing to me just yet.

Jeff Bailey : 4/17/2008 10:49:20 AM

SPX 1,365.50 +0.05% ... On 12/31/07 the SPX closed 1,468. It's inflection low has been 1,258 on 3/17/08. From 12/31/07 close to 3/27/08 low, the SPX would have fallen 14%. This would be VERY close to current market expectation for a -14.6% Q1 earnings decline. (see 10:42:53 AM Post)

Jane Fox : 4/17/2008 10:46:44 AM

These charts are bullish but I would really like to see the VIX make new daily lows though. Link

Jane Fox : 4/17/2008 10:44:57 AM

VIX is still not making new daily lows and is giving me all kinds of heartache because I am long YM.

Linda Piazza : 4/17/2008 10:43:28 AM

The A/D line continues to climb but it's climbing now into a former congestion zone, one that could slow gains. Hasn't yet, but could. The 15-minute 9-ema is now slanting down sharply, but is at about +250 with the A/D line now at -285, a new high for the day. The conclusion? The A/D line's climb continues to support climbs in the equities, but within the context of still-negative and still-bearish A/D numbers. Potential resistance looks strong from +300 to +670. If the A/D line gets through this current congestion zone to challenge that resistance, it currently looks strong enough to stall further gains for a time.

Jeff Bailey : 4/17/2008 10:42:53 AM

US Earnings: 1Q Results Down 26.4% Vs. 2007, Down 0.8% Vs Views

DJ- The earnings of companies in the Standard & Poor's 500 index that have issued first-quarter reports are running 26.4% lower than year-earlier results, according to Thomson Financial.

Of the 500 companies, 75, or 15%, had reported earnings for the quarter as of Thursday. So far, first-quarter earnings have come in 0.8% lower than analysts' expectations.

Compared with a year earlier, earnings of S&P 500 companies are expected to fall 14.6% in the first quarter. That figure reflects actual earnings for the companies that already have reported and average estimates for the rest.

For the second quarter, analysts, on average, expect earnings of the S&P 500 companies to fall 3.7% from the year-earlier period.

The following table shows how the 75 companies that have reported performed in the first quarter, compared with analysts' average expectations.

Table Link

Jane Fox : 4/17/2008 10:41:34 AM

My stop on this trade is now at 12609.

Jane Fox : 4/17/2008 10:40:48 AM

If not in now don't even try - gone too far now.

Jane Fox : 4/17/2008 10:39:20 AM

Sorry a little late but see if you can get in at that level.

Jane Fox : 4/17/2008 10:39:00 AM

I will be taking YM long at 12632.

Jeff Bailey : 4/17/2008 10:36:40 AM

10:29 AM Money Flow Table at this Link

Jeff Bailey : 4/17/2008 10:33:24 AM

EIA Nat. Gas Storage Table Link ... Build of 27 Bcf

Jane Fox : 4/17/2008 10:30:10 AM

S&P futures made a new daily high but the VIX did not make a new daily low so you need to expect a retracement. Link

Keene Little : 4/17/2008 10:25:59 AM

Techs and small caps are struggling this morning more than the big caps. Perhaps a little flight to safety (in big numbers). For a continuation of the rally today we'll need to see NDX and RUT participate.

Linda Piazza : 4/17/2008 10:24:10 AM

Well, the SPX has now already produced a longish lower shadow for the day. Will it spring up and then drop back, creating the longish upper shadow that's sometimes typical of a consolidation type day or will it hit potential historical and trendline resistance near 1366-1368 and pull back toward the 1349-1353 zone? The A/D line is giving me mixed messages today, so I'm not sure, but both possibilities should be factored into your trading plan.

Linda Piazza : 4/17/2008 10:21:44 AM

Both the 15-minute and 30-minute versions of the SPX's 9-ema have held as support so far, although there has not yet of course been a new 30-minute close. The A/D line has bounced from above support into a new high for the day, although it remains in the bearish or negative half of the nested Keltner channels on the 15-minute chart. It has potential historical resistance from a congestion zone from about -550 up to +50, but Keltner resistance is much higher, near +500. The A/D line is now -531, now having jumped well above its day's low, but put that in the context of a bearish overall tenor.

Jane Fox : 4/17/2008 10:21:39 AM

I have a long setup now but I need the price to retrace a little and give me a better entry. The trade profile is much to large for me to take the trade.

Jeff Bailey : 4/17/2008 10:20:32 AM

Forex Currencies Link ... $/Yen +0.46% ...

Keene Little : 4/17/2008 10:18:01 AM

Heading for gap closure here. If the market continues higher after gap closure then there will likely be a good chance we'll see the rally continue.

Jane Fox : 4/17/2008 10:17:06 AM

And the exit at 12612 would have been hit as well. Waiting for a long setup now.

Jeff Bailey : 4/17/2008 10:15:19 AM

10:00 Internals found at this Link

Jane Fox : 4/17/2008 10:14:25 AM

Stopped at 12601.

Linda Piazza : 4/17/2008 10:07:48 AM

The SPX's 15-minute 9-ema is now 1359.97; the 30-minute version, 1358.

Linda Piazza : 4/17/2008 10:07:03 AM

The A/D line has in fact turned back toward potential support. Its climb was looking fragile earlier, when I linked the chart, and I thought this possible. The A/D line is currently -985 with potential support now near -1165.38.

Jane Fox : 4/17/2008 10:06:56 AM

A better stop on the YM short is at 12612 but I will be leaving my stop at 12601.

Jane Fox : 4/17/2008 10:05:19 AM

Stop on the YM short is 12601 and target is 12527.

Jane Fox : 4/17/2008 10:03:38 AM

Triggered YM short at 12564.

Linda Piazza : 4/17/2008 9:55:35 AM

The SPX's 15-minute 9-ema did hold as support on the first 15-minute close, but now it looks as if resistance near 1362.52-1363.50 could hold, too, and the SPX could get pushed down again. If that 9-ema, now at 1360, doesn't hold, the next potential support is near 1356, but it doesn't look strong. Potential support near 1353.38 looks stronger.

We'll see what develops after the Philly Fed.

Linda Piazza : 4/17/2008 9:53:21 AM

Remember when I said to watch for a steadying in the A/D line as it was approaching potential support? Here's a chart: Link The expected attempt to steady did occur, but this still presents a fragile picture with the possibility that the A/D line could drop back again. It's in the lower or bearish half of its Keltner channels.

Jane Fox : 4/17/2008 9:48:52 AM

However, that is a long ways off.

Keene Little : 4/17/2008 9:48:36 AM

This SPX 15-min chart shows what I was saying in my last post--a 3-wave pullback today to correct the decline before proceeding higher: Link . That's if the rally leg finished yesterday which is not a given yet.

The leg up yesterday afternoon (the 5th wave) could "extend" higher and make it up closer to 1380 before we see a stronger pullback. Until price drops below yesterday afternoon's low near 1352 that possibility remains. From a short term perspective it's important to remember that we've got a bullish setup here for more rally (either from here or after the larger pullback).

Jane Fox : 4/17/2008 9:48:32 AM

Market is moving upwards now and may give us a better short entry. If it moves up enough we may even get a long.

Jane Fox : 4/17/2008 9:42:28 AM

Stop will be 12601 and target is a 1:1 to reward.

Jane Fox : 4/17/2008 9:41:39 AM

I see a short YM at 12564.

Linda Piazza : 4/17/2008 9:38:08 AM

Remember the Philly Fed at 10:00 am ET. (Being from Texas, every time I type, "Remember the . . . ," I want to follow it with "Alamo.") I'm going to slip up and do it someday, so I'm just warning you.

Linda Piazza : 4/17/2008 9:37:20 AM

Keltner outlook on the A/D line: the A/D line is very negative, but moving straight toward potential support, now at about -1110. The A/D line is at -1025 as I type. The possibility of a steadying exists, but so does the possibility of a sliding down that descending support all day, or even a breakdown to match yesterday's upside breakout. For now, though, recognize that the outlook is negative, but watch for a potential attempt at steadying soon . . . perhaps with the release of the Philly Fed in a few minutes, at 10:00 am ET?

Jane Fox : 4/17/2008 9:36:44 AM

AD line is a bearish -1022

Keene Little : 4/17/2008 9:31:46 AM

A typical correction of yesterday's rally would be about a 50% retracement in price in about 62% of the time. That would pull SPX down to 1345 by the end of today. So be aware that there could be some trading opportunities up and down but overall a down day.

Linda Piazza : 4/17/2008 9:31:43 AM

The OEX's 15-minute 9-ema is now 625.46; the 30-minute version, 624.65.

Linda Piazza : 4/17/2008 9:30:53 AM

The SPX's 15-minute 9-ema is now 1360.35. If the SPX pulls back in accordance with the futures' difference from fair values, it will be testing that moving average this morning. Bulls, of course, want it to hold as support on 15-minute closes. The 30-minute version is 1358.30, and I would give a bit more credence to that this morning until we see how things shake out. I would not be surprised today to see a drop into the 1349-1353 range and some time spent there, perhaps a couple of hours, but that's just a possibility not a prediction.

Jane Fox : 4/17/2008 9:28:50 AM

I would not be surprised to see the SPX reach resistance either today or tomorrow before it takes a rest. Each retracement from this resistance has made a higher low telling me the resistance will break soon. Link

Linda Piazza : 4/17/2008 9:24:51 AM

Dow and SPX futures are below fair values this morning while Nasdaq futures are near fair values, indicating some bifurcation in the markets. Another mixed sign comes from an upturn in the USDJPY, which is usually supportive of equity prices. The SPX ended the day jammed against potentially significant resistance with further resistance (on daily closes) extending up toward 1379-1382.

As noted yesterday during the close, the usual reaction after such a big-range day is to have a smaller-range day, perhaps a small-bodied candle with long upper and/or lower shadows as bears and bulls drive the market one direction or the other and then get overwhelmed. Another possibility, with the SPX jammed against possible resistance, is to see a reversal by the end of the day.

A gain remains possible, too, but if so, I would expect it to fit in with the consolidation scenario. It's not really typical to see big gains after such a big-range day, although it does of course happen. The 1/31 and 2/01 and 2/25 and 2/26 pairings are two examples of days when big-range gain days were followed by fairly decent gains.

In the normal pattern of things, however, that's not the expected result. Plan for a possible choppy day, perhaps being quick to take profits whatever the play, but then look for signs that something different is occurring--a trending lower or higher A/D line, a swiftly moving VIX, etc.

Keene Little : 4/17/2008 9:23:37 AM

Equity futures have pulled back for most of the overnight session except for a brief stab back up from the usual 6:00 AM low and we've got a relatively strong gap down facing us. It's obviously difficult to tell whether it will mean anything other than simply a correction to yesterday's rally.

The danger of course, knowing the way this market has been operating, is that we'll do a complete reversal of the rally and continue to whipsaw traders. But first I'll be watching for a setup to buy the dip although I suspect that will not happen until we get at least a down-up-down sequence.

Jane Fox : 4/17/2008 9:05:33 AM

Gold seems to be having a hard time getting through the 940-960 resistance and unfortunately the MACD is not giving me any hints. Link

Jane Fox : 4/17/2008 9:02:55 AM

Although the overnight session was a series of lower lows and highs, I don't consider it bearish for it would have been unreasonable to have expected yesterday's rally to continue overnight.

The large cap's ON session did not quite reach a 38.2% retracement and the Russell 2000 futures (ER2) has only made a 23.6% retracement. Link

Jane Fox : 4/17/2008 8:39:22 AM

WASHINGTON (MarketWatch) -- First-time filings for state unemployment benefits rose by 17,000 to 372,000 in the week ending April 12, the Labor Department reported Thursday. The four-week moving average of those claims fell by 750 to 376,000. For the week ending April 5, continuing jobless claims came in at 2.98 million, their highest level since mid-June 2004. The number of continuing claims rose by 26,000. The four-week average of continuing claims, meanwhile, rose by 29,750 to 2.94 million.

Market Monitor Archives