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Keene Little : 4/25/2008 1:19:40 AM

BTW, the spinning top doji on the MSFT chart would be essentially an evening star reversal pattern if it's followed by a red candle the following day, especially if it gaps down and leaves that little star twinkling in the twilight of its rally (it closed down $1.50 to 30.19 Thursday evening).

Keene Little : 4/25/2008 1:16:45 AM

Friday's pivot tables: Link and Link

I'm going to keep my eye on the techs on Friday since they've been leading the way to the upside. With MSFT turning down after their earnings announcement, after having made a potential high on Thursday at Fib resistance (32.17), we could see a down day for techs. MSFT daily chart: Link

At the end of the day Thursday I had also shown the daily chart of the semiconductors (SMH) and the potential top it made with a throw-over finish above its bear flag pattern and then closing back inside (creating a sell signal): Link

So if the techs head lower on Friday we could see the rest of the market follow. The price pattern on SPX still has me thinking we could get a pullback, now into Monday, before another leg up, shown on the 60-min chart: Link

At this point I think short against Thursday's high is the right play and if we do get a pullback like that shown for SPX, I'll be interested in looking carefully at the long side around 1356 on Monday. There's lots of resistance directly overhead if it instead heads immediately higher on Friday.

OI Technical Staff : 4/24/2008 9:59:59 PM

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James Brown : 4/24/2008 7:40:28 PM

Not seeing any news yet but shares of Visa (V) are suring $3.00 after hours to $75.30ish, which is another new high.

Keene Little : 4/24/2008 5:08:08 PM

I just took a quick look at Mr. Softee and see that today's high did an almost perfect tap on Fib resistance. A 50% retracement of the decline from November is at 32.18 and the 2nd leg up for the bounce off the March low is 162% of the 1st leg up (for an A-B-C bounce) at 32.17 (nice correlation there). Today's high was 32.10 and it's currently trading 30.27 in after hours. Link

Keene Little : 4/24/2008 4:25:43 PM

Semiconductor bulls almost did it today but they chickened out. SMH failed at the top of its bear flag again. More bearishly it did a little throw-over and then dropped back inside the pattern. I don't particularly like the ending pattern (should be a 5-wave move up from April 15th) but be careful if you're long the semis or tech until we see if Tuesday's low (29.62) holds. Assuming it will and SMH pushes higher I like the $32 area for an upside target (pink). Link

James Brown : 4/24/2008 4:15:26 PM

Microsoft (MSFT) due to report earnings out after the closing bell. Wall Street looking for a profit of 44-cents a share.

MSFT just delivered earnings of 47-cents.

Whisper number was 46 cents. Stock is still trading lower on the news in after hours.

Linda Piazza : 4/24/2008 3:55:20 PM

What happens overnight tonight? Japan's April Overall Tokyo CPI and March Overall National CPI will be released from about 7:30-7:50 pm ET. Tonight, at 2:00 am, Germany has important prices, and at 4:00, the M3 March money supply for the eurozone will be released. At 4:30, the U.K. has its first quarter GDP. That's all I can find before our market opens, but of course, as Jane has just mentioned, we have the U of Michigan sentiment number shortly after the market opens.

Linda Piazza : 4/24/2008 3:51:33 PM

The SPX has fallen beneath the 15-minute 9-ema and the RSI has stopped trendline near 70, being just below 42 as I type. Potential support is being tested and layers down to 1385.67, but short-term bulls didn't want to see a drop this deep. That presents the possibility that the 1393.50-ish zone will now be resistance on upside tests.

Keene Little : 4/24/2008 3:46:43 PM

Today after the close is BIDU (baidu) earning. What does Elliot say about Baidu from a EW chart perspective?

Baidu is close to saying adieu. Sorry, couldn't resist. The bounce in BIDU off the March low looks impulsive which is bullish. But there's also a way for me to interpret the pattern as simply a sharp a-b-c bounce against the decline from November, especially since that decline can be counted well as a 5-wave decline meaning the primary trend should be down. If true then the current bounce is a correction and not the start of a new bull leg up. But regardless, it should be close to topping out and in need of at least a retracement. Link

There's Fib confluence at 380-385 that interests me (currently trading 346 with a high near 365 yesterday). Ideally BIDU will get another leg up to the 380-385 level where I'd be interested in looking for a short play. If I were to guess here I'd say the reaction to their earnings will be bullish but then look for a failure of the rally. Good luck--this one is like playing GOOG.

Jane Fox : 4/24/2008 3:36:44 PM

Tomorrow's only economic report is the 10:00a.m. End-Apr Reuters/U Mich Sentiment Index. Previous: 63.2.

Keene Little : 4/24/2008 3:29:50 PM

Notice the big bearish divergence on the 60-min chart on MACD if price rolls back over here.

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

I mentioned the 3-wave move up from Tuesday and that the larger rally shouldn't finish with a 3-wave move. It could be part of a larger a-b-c pullback from last Friday the 18th which needs wave-c down to finish the pullback. Based on the kind of correction it is the c-wave could project down to 1356 before setting up the next leg of the rally into next week. SPX 1356 crosses the uptrend line from March 17th this coming Monday afternoon. So it's a good short play setup against resistance but only for a trade. 60-min chart: Link

Linda Piazza : 4/24/2008 3:22:08 PM

It will soon be time to make end-of-day decisions, if you haven't already. I've been off on my Thursday predictions of what might happen next a couple of times over the last month and today, I'm going to tell you that I'm not sure about next direction. The SPX has a perfectly valid, for now, upside target now at about 1403.21, and I've been saying all week that I could see the SPX rolling over from Friday's high or punching up higher, toward the 1408-1417 zone, before it hits serious difficulties again. So, as far as I'm concerned, this could be it, or we could see a strong punch up to and maybe above that short-term Keltner target. By the close today, we might have a better idea, depending on where the SPX closes.

Keene Little : 4/24/2008 3:12:04 PM

For today's rally aFib projection points to SPX 1402.37 as a possible high. It's only a possibility but if we're seeing some bearish divergences develop as price stalls there (if it gets there), then it could be good for a short entry. Otherwise the downtrend line from October (arithmetic scale) is near 1408.

Linda Piazza : 4/24/2008 3:02:10 PM

I'm still seeing former front-runners such as the RUT and the MID (S&P Midcap Index) lagging by some measures. Neither is yet above Friday's high, for example.

Keene Little : 4/24/2008 3:00:39 PM

While we're at or nearing some very tough resistance and it's tempting to short it, the move up from Tuesday is only a 3-wave move (another one). The final leg up needs to be a 5-wave move and that tells me we should get a pullback/consolidation to at least match yesterday's and then another push higher. So a short term short play could set up at resistance here but I do not see it as the top of the move. With semiconductors on the tech side and financials on the blue chip side doing well today it's looking more bullish right now.

James Brown : 4/24/2008 2:57:06 PM

There might be a trade here in ETN as it bounces from prior resistance. Link

Linda Piazza : 4/24/2008 2:51:32 PM

The SPX's 15-minute 9-ema is now about 1392.80. As long as the SPX maintains 15-minute closes above that while RSI trends near 70, the tenor remains as it's been this afternoon. Watch for any changes as a sign that the current 1403-ish upside target might not be met. So far, it's still a possibility.

Keene Little : 4/24/2008 2:50:53 PM

SPX is struggling at last Friday's high and the DOW is right at the top of its parallel up-channel from January. A little higher for the DOW is the trend line along the highs from March 24th, currently near 12960.

James Brown : 4/24/2008 2:48:27 PM

Chinese stocks definitely look short-term overbought given the recent rally (in the Shanghai market) but on a technical note the FXI is breaking out over resistance near $160 and its 200-dma.

James Brown : 4/24/2008 2:45:39 PM

Adding to the rally in the broker-dealers is TROW.

T.Rowe Price (TROW) reported earnings today, missed estimates and the revenue numbers but the stock is UP almost 13% to $60.83.

Looks like a short squeeze. The latest data listed short interest at 6% of the 252-million share float.

It appears that the stock is up after the company announced record-setting inflows of almost $10 billion from investors.

James Brown : 4/24/2008 2:36:06 PM

Noting that Mastercard (MA) and Visa (V) are both inching toward new all-time highs.

FYI: Visa (V) does have options and they actually have a lot of option interest and volume.

James Brown : 4/24/2008 7:51:50 PM

Hmmm... the brand new India ETF powershares (PIN) is showing strength. The PIN was hovering around resistance in the $26.00 region but is breaking out to new highs. This does have options although neither the PIN or the options have much volume. If I was going to play this I'd use a stop under $25.74 (edit stop loss).

Linda Piazza : 4/24/2008 2:27:15 PM

The USDJPY is still not yet above Friday's high.

James Brown : 4/24/2008 2:27:09 PM

Another railroad showing strength is GWR. The stock is breaking out over resistance near $36.00. The MACD on the daily chart just produced a new buy signal. The P&F chart is bullish. My biggest concern would be the highs (potential resistance) near $36.50 dating back to 2006.

Linda Piazza : 4/24/2008 2:23:55 PM

The A/D line approaches potential resistance near 1148.50 with the A/D line currently 962. It's not typical for the A/D line to completely change tenor this late in the day, but nothing much has been typical about today.

James Brown : 4/24/2008 2:16:28 PM

Speaking of the exponential 200-dma (or 200-ema) I noticed that Intel (INTC) is breaking out over its 200-ema today. This moving average has been support for a very long time thus it should have been resistance.

The SOX semiconductor index is surging close to 2% to new three-month highs.

James Brown : 4/24/2008 2:12:54 PM

It's a very volatile stock to play but this might be a short-term bottom in Intuitive Surgical (ISRG) as it finds support above the 200-dma.

Jane Fox : 4/24/2008 2:11:21 PM

Stopped on the my short - dang it.

Linda Piazza : 4/24/2008 2:11:34 PM

I was looking at charts today and noticing that the narrower-based indices that are comprised of the generals appear to be outperforming by many measures. For example, the NDX is above its 200-ema while the Nasdaq is just rising to test its 200-ema. The Dow is testing its 50% retracement of its decline while the SPX is just breaking above its 38.2% retracement again today. It's great that the generals are performing well, but we want to see the RUT, which hasn't yet even broken above Friday's high, participate, too, to show that investors have some appetite for risk.

James Brown : 4/24/2008 2:07:55 PM

Financial stocks are surging....

BKX banking index +4.4%
BIX banking index +4.5%
XBD broker-dealer +4.5%

After three days of trading sideways at the $180 level, shares of Goldman Sachs (GS) is up $8.10 to $187.40...

James Brown : 4/24/2008 2:03:54 PM

Investors are still buying dips in the railroads. chart: Link

Jane Fox : 4/24/2008 2:03:37 PM

My stop on this trade is 12916.

Linda Piazza : 4/24/2008 2:01:33 PM

Since that resistance now at 1393.89 held on previous 30-minute closes, you need to be aware of it again as the SPX rises toward it. The SPX is already well above that Keltner resistance.

James Brown : 4/24/2008 1:58:40 PM

The XAL airlines index is bouncing, +6.6%, presumably on the weakness in oil today.

I think this group is in a fatal decline but if oil does correct like we think it will then nimble traders might be able to scalp a few points on a rebound in the airlines. Honestly, it's a trade I would still hesitate to make.

James Brown : 4/24/2008 1:52:51 PM

Here's a chart of the XHB homebuilding ETF... Link

Jane Fox : 4/24/2008 1:47:36 PM

Ok I am getting my pullback but it is looking weak. If we make a lower high I will move my stop to just above this lower high WHEN I move into profit enough to move the stop.

James Brown : 4/24/2008 1:47:28 PM

The homebuilding stocks are indeed bouncing in spite of today's negative news.

The DJUSHB index is up 4.9%. The HGX index is up 3%. The XHB (ETF) is up 2.8% after bouncing from its rising 50-dma.

If investors are buying bad news then this might be a short-term bottom. I could see a bullish trade here with a stop under today's low.

James Brown : 4/24/2008 1:44:51 PM

It's not a stock I follow but Martha Stewart Living Omnimedia (MSO) is breaking out. I don't see any news over the last couple of days but shares are in rally mode, breaking out over the 100-dma yesterday and breaking out over resistance at $8.00 today.

Shares of MSO are currently up 3.7% to $8.11. MSO does have options but I'm not sure I'd chase it right here but it might be worth putting on your watch list.

Broken resistance at $8.00 "should" be support but I'd watch the $7.85 level to act as support.

James Brown : 4/24/2008 1:41:04 PM

I know a lot of us are focused on oil. Crude oil (June) futures are down $2.66 to $115.64.

Linda Piazza : 4/24/2008 1:38:08 PM

The OEX's 15-minute 9-ema and other potential support converage at about 643.07. OEX bulls want to see this hold as support on 15-minute closes.

Linda Piazza : 4/24/2008 1:37:10 PM

The SPX tests the potential Keltner support now at 1390.70 on 15-minute closes with the 15-minute 9-ema below that, at 1388.71. Bulls woul dlike to see the higher level hold as support on 15-minute closes, but I'm not certain it will.

Jane Fox : 4/24/2008 1:33:43 PM

SPX is pushing against resistance and I think it will break either today (hopefully not right now because I am short) or at least tomorrow. Link

Keene Little : 4/24/2008 1:31:10 PM

Looking at the semiconductors (SMH) has me thinking of Mr. Bear pointing a gun at Mr. Bull and asking, "So, do you feel lucky punk?" as SMH presses once again at the top of its flag pattern that it's been in since February: Link . A rally above 31.25 would be more bullish so watch the semiconductors now.

Jane Fox : 4/24/2008 1:30:58 PM

Now remember these fades will usually take some heat and I will be looking for a lower high before it resumes the downtrend.

Jane Fox : 4/24/2008 1:22:12 PM

I am short from 12869 with a stop at 12836.

Jane Fox : 4/24/2008 1:21:03 PM

Geesh my grammar is BAD today.

Keene Little : 4/24/2008 1:20:01 PM

Supporting the bullish view for stocks is what's happening in bond land. The 10-year yield (TNX) has rallied above last Friday's high and the selling in the bonds is likely freeing up cash to rotate into stocks. I see more upside potential for yields (4.0%-4.4%) and that could mean a bigger rally for stocks. TNX daily chart: Link

Bonds and stocks don't trade inversely to each other in lock step, and I think later this year we'll see bonds, stocks and commodities selling off together (unless there are more deflation worries in which case bonds will rally), but for the short term be aware that there could be money rotating into stocks. Certainly if we see some strong resistance levels getting taken out then the buying in stocks should be taken much more seriously. But equity bulls have a bit to prove right here.

Jane Fox : 4/24/2008 1:20:27 PM

I'm going to put the YM short back on the table - it is now at 12869 with the stop at .... you know where I put the stop in these fades.

Jane Fox : 4/24/2008 1:20:51 PM

Ok the bulls are stronger than I thought and I have taken the YM short off the table now.

Keene Little : 4/24/2008 1:06:29 PM

Using the log scale for price on the NDX daily chart shows price is pushing above the broken uptrend line from October 2002, currently at 1917, but is facing its downtrend line from October 2007 at 1940 (still 14 points higher): Link . Market breadth is still relatively weak and the 60-min chart is showing a big bearish divergence at today's high vs. Monday's. If you're long, keep those stops tight.

Jane Fox : 4/24/2008 1:08:20 PM

The market has slowed down so I will be setting up that short again now at 12858.

Linda Piazza : 4/24/2008 1:02:03 PM

Equity bulls want to see the SPX maintain 15-minute closes above 1389.21 and especially above the rising 15-minute 9-ema at 1386.42. For the OEX, both potential support levels converge near 642.35 with higher but lighter potential support at 644.60.

Linda Piazza : 4/24/2008 12:45:34 PM

If I've snapped the Fib bracket correctly, the Dow is approaching a 50% retracement of its decline from its October high. In fact, calculating it exactly produces a number of 12,916.46 with the Dow at 12898.54 as I type. This level can be powerful resistance, particularly as it coincides with one version of a descending trendline off that high.

Jane Fox : 4/24/2008 12:42:51 PM

My short fade is now at 12847 with stop above daily highs. When this market turns around I think it will be quite a selloff.

Keene Little : 4/24/2008 12:39:05 PM

I was wondering based on todays action in oil, where do you see USO going. Based on your Market Wrap yesterday, do you see the dark red count playing out here?

Well, let me rub the dust off my crystal ball...ugh, cloudy as ever (wink). This is the chart I posted in last night's newsletter: Link and here's the chart as of this morning: Link . It won't be until we get a pullback will I get a better feel for what it might be. If we see a bunch of 3-wave moves up and down on an intraday chart as it chops lower then I'd say the pink wave count will be correct (looking for one more new high).

But if it starts to drop sharply then there's a better chance we've seen the high. About the only thing I can recommend, as I had mentioned for OIX, is short against yesterday's high and we'll see how the pullback develops and decide whether it will be better to cut and run after pulling back or hang on for a larger decline.

Linda Piazza : 4/24/2008 12:32:05 PM

SPX bulls want 1388.34 to hold as support on 15-minute closes. If that doesn't hold, they want the 15-minute 9-ema at 1384.54 to hold as support on 15-minute closes.

Linda Piazza : 4/24/2008 12:28:32 PM

The USDJPY has reached a high of 104.39, but is currently pulling back slightly and is 104.26. It has not yet bested Friday's 104.62 high, but the pullback isn't severe yet and it could still do so. Equity bulls don't want a steep pullback, however.

Linda Piazza : 4/24/2008 12:26:38 PM

The VIX drops toward Friday's low but hasn't bested it yet. It's got potential support on 15-minute close at 19.16, with the VIX at 19.36 as I type.

Linda Piazza : 4/24/2008 12:25:59 PM

The A/D line has not yet achieved a new high of the day, something that equity bulls would like to see happen. However, it has bounced strongly, driving straight through potential Keltner resistance. It's currently +545.

Jane Fox : 4/24/2008 12:25:09 PM

I will be taking my short off the table for now but will continue to recalculate. AD line is telling me we do not have runaway bull rally here and fades are much more viable.

Keene Little : 4/24/2008 12:22:12 PM

NDX has exceeded last Friday's high but all the others are lagging in that respect. SPX and DOW are closer than the poor RUT. DOW 12894 and SPX 1396 are the levels to get above to break the previous highs.

Jane Fox : 4/24/2008 12:21:21 PM

VIX and ES are in sync today, as they usually are. Link

Linda Piazza : 4/24/2008 12:16:28 PM

The SPX has potential resistance at 1392.60 on the 30-minute chart. It looks strong, but the analogous level did for the OEX, too, and so far the OEX is pushing well above that and hasn't pulled back. Do be aware of the possibility of a pullback that could prevent the SPX from reaching a higher target on its 15-minute chart, now at about 1402.55.

Linda Piazza : 4/24/2008 12:15:14 PM

When listing the OEX potential target a few minutes ago, I neglected to check the 30-minute chart. That 30-minute chart showed potential resistance on 30-minute closes at 641.68 and 642.99. Obviously, the OEX is above both right now, but what this means is that OEX bulls don't want to see a sharp pullback below those levels by the close of the current 30-minute period. That's not happening as I type, of course, as the OEX pushes higher.

Jane Fox : 4/24/2008 12:15:09 PM

Bulls are strong today so I am recalculating the fade as we move up. That short is now at 12812, above 12800 but that is the setup. 12800 is getting too far away from the market now and is not a viable level to try to get around.

Linda Piazza : 4/24/2008 12:09:06 PM

The OEX has broken above its potential Keltner resistance that is now at 641.49 and has set a potential upside target near 647.12. Of course, it's got to challenge Friday's 643.13 high, too, before it can get there, which it's doing as I type, just now bumping above it. We also know that targets have been set and not met repeatedly over the last few days. However, for now, it's got that upside target and you should consider vulnerability to a climb to that zone.

Linda Piazza : 4/24/2008 12:03:02 PM

For the just-completed 15-minute period, the SPX's Keltner resistance now pushed up to 1387.42 has held as resistance on the 15-minute close. The SPX is currently 1385.26. The 15-minute 9-ema has risen to 1380.77, and bulls want that to hold as support on 15-minute closes on any pullbacks.

Jane Fox : 4/24/2008 12:02:53 PM

The DOW futures (YM) are now overbought so I am going to setup a short fade. I will be shorting YM at 12794, back below 12800 and the stop will be a few ticks above daily highs at 12836. These fades have large profiles but they can be quite powerful. I tried a long fade yesterday and should have taken profits sooner than I did and ended up with a breakeven.

Linda Piazza : 4/24/2008 11:56:03 AM

Speaking of Friday's high: Friday's high for the USDJPY was 104.62. The USDJPY is currently 104.31, just off a 104.33 high. It's possible that the USDJPY could challenge Friday's high before our equities. As it sometimes leads our equities, that could be an important test to watch.

Keene Little : 4/24/2008 11:55:47 AM

The DOW's downtrend line is near 12850 so about 20 points higher. These levels would be good to try a short play.

Keene Little : 4/24/2008 11:53:13 AM

The RUT had briefly broken above its downtrend line from October on April 18th but couldn't close above it. At 716 it's only about 2 points higher from here.

Keene Little : 4/24/2008 11:51:45 AM

NDX is now approaching its downtrend line from October near 1928, a little less than 7 points higher.

Linda Piazza : 4/24/2008 11:51:44 AM

Of course, once the SPX maintains 15-minute closes above the Keltner level that's now pushed up a bit higher, to 1387.20, it must supercede Friday's high, too, so watch for potential resistance there if the SPX breaks out above that Keltner resistance and continues higher. That's still not a given, however. SPX at 1386.80 as I type.

Jane Fox : 4/24/2008 11:49:29 AM

Compare this chart to the one I posted at 11:01. World of difference. Link

Jane Fox : 4/24/2008 11:47:32 AM

When you look at the US$ without the triangle and add support and resistance lines you see that this breakout is not really a breakout but an extension of the trading range. Notice MACD has not even broke 0 yet. This is still a bearish chart. Link

Jane Fox : 4/24/2008 11:44:42 AM

At least it is above 0 :(

Jane Fox : 4/24/2008 11:44:25 AM

AD line at +49 does not add a lot of confidence that the bulls have taken over though.

Jane Fox : 4/24/2008 11:43:59 AM

And just like that the internals are now bullish. Well at least the VIX is bullish for it is making new daily lows telling me the S&P futures will make new daily highs here soon.

Keene Little : 4/24/2008 11:43:37 AM

Nice little rally off this morning's lows. Now whether we get some follow through to the upside is the question.

Linda Piazza : 4/24/2008 11:34:55 AM

On the OEX, I won't put too much faith in the breakout attempt until and unless the OEX can maintain 15-minute closes above 640.97. It was this Keltner line (then at a different level) that knocked the OEX back yesterday.

Keene Little : 4/24/2008 11:33:57 AM

Every once in awhile I look at the lumber futures contract to watch for an early indication from that sector for improvement in the construction industry. So far nada: Link . Some bullish divergences are showing up but so far it's too early to call a bottom.

Linda Piazza : 4/24/2008 11:33:44 AM

The SPX charges up toward the top it a best-fit version of the price channel in which it's declined from Friday's high, a possible bull flag. The top of that channel is now at about 1381.42, but as I noted yesterday and again this morning, I want confirmation by sustained 15-minute closes above Keltner resistance now at 1386.63 before I believe too strongly in any breakout. This Keltner resistance knocked the SPX back yesterday morning and could do so again. If the SPX can get past that, then look for next resistance just under 1392.

Linda Piazza : 4/24/2008 11:22:17 AM

Following, not leading, the A/D line now tests its 15-minute 9-ema, with the A/D line's current -479 right at that moving average. I'd like to see the A/D line maintaining 15-minute closes above a line now at -266 before I had too much faith in the bounce, but bouncing it certainly is.

Linda Piazza : 4/24/2008 11:13:36 AM

I agree with Keene's 11:11:23 post, especially his statement warning that while it's boring, trades shouldn't be forced. We may all have ideas about where the markets are likely to go, but we get setups that soon after are reversed and that's not a good trading environment.

Linda Piazza : 4/24/2008 11:11:59 AM

The SPX tests its 15-minute 9-ema as I type, with that at about 1375.90 and the SPX just above that at 1375.95.

Keene Little : 4/24/2008 11:11:23 AM

I'm looking around for some signals and finding very little. Other than some confirmation of reversals in currencies and commodities I'm not seeing much in the way of equities other than the usual consolidation and chop. As I mentioned before, it's looking like equities are consolidating for another run higher but at this point it's difficult to tell if we'll run sideways or get a deeper pullback before pressing higher again. It's boring but don't force trades in this environment.

Linda Piazza : 4/24/2008 11:11:11 AM

The A/D line is still negative, still below the gathered resistance overhead but is climbing. Until it's first sustaining 15-minute closes above its 9-ema, now at about -490 and then maintaining closes above the central basis line, now at about -263, I'm going to remain wary of a potential rollover again. It's -644 as I type.

James Brown : 4/24/2008 11:10:42 AM

The BTK biotech index is not looking very healthy here. Link

James Brown : 4/24/2008 11:05:45 AM

The rally in Apple (AAPL) has stalled. Shares are down 0.6% to $161.80. RBC raised their price target on AAPL from $190 to $200 following yesterday's earnings news.

Jane Fox : 4/24/2008 11:01:42 AM

Internals are bearish. VIX and AD volume are in sync (VIX up and AD volume down) and the AD volume ratio is flatlined, which is in sync as well. Link

James Brown : 4/24/2008 10:58:05 AM

It's not a very fast mover but NRG Energy (NRG) might be a bearish candidate. The stock appears to be topping out near $45.00. Today's action is painting a bearish engulfing candlestick. This could be the turning point for a drop back toward the 200-dma or the $40 region.

James Brown : 4/24/2008 10:52:38 AM

Shares of semiconductor company LSI Corp. (LSI) are up sharply +16.5% following a better than expected earnings report, raised guidance, and a broker upgrade. Now if the stock could push past resistance near $6.00 and its 200-dma it might become attractive.

Linda Piazza : 4/24/2008 10:50:34 AM

If the SPX and OEX rise, the SPX's 15-minute 9-ema is now about 1375.10; the OEX's, 636.89. The SPX maintains its potential downside target, now at 1368.09, but it's not a given with chart setups like these that it will hit it or even approach it more closely than it has. The OEX's is 634.79.

Linda Piazza : 4/24/2008 10:39:55 AM

The A/D line maintains its potential downside target, now -1077.38, but doesn't show any inclination to fall toward it again. At least, it doesn't yet.

Keene Little : 4/24/2008 10:47:27 AM

Moving in a little closer on the SPX 120-min chart posted last night, I'm showing an expanding triangle (yes, another triangle) for the pullback from April 18th. The bottom of the triangle hits the uptrend line from March 17th by early tomorrow morning at 1350 and continues to make for a nice downside target if the selling sees some follow through today. 60-min chart: Link

The choppy pattern of the pullback continues to support the idea that we're going to see another leg up next week so any push back above this morning's high is potentially bullish. Just keep in mind that price action will remain choppy inside this expanding triangle correction.

Linda Piazza : 4/24/2008 10:30:36 AM

As has been typical this week, the OEX has been stronger on a Keltner basis than the SPX. (It was the opposite in the immediate period after GE reported.) The OEX has set a potential downside target of only 634.75. As with the SPX, I suggest that traders factor in vulnerability to that level while keeping in mind that such targets are often not met in this trading environment.

Linda Piazza : 4/24/2008 10:28:28 AM

An SPX close beneath 1375.04 for this 15-minute period sets a potential downside target of 1368.04 currently. Remember that not all such targets are met in this environment, but do factor in vulnerability to that level in your trading plans. If bearish, certainly have profit-protecting plans in mind if that zone is tested.

Jane Fox : 4/24/2008 10:20:45 AM

SAN FRANCISCO (MarketWatch) -- The dollar was off early highs but still gained on major counterparts Thursday, after U.S. economic data contained a few kernels of good news and a Wall Street Journal report suggested the U.S. Federal Reserve may pause its rate-cutting cycle after next week's meeting. Weak German business sentiment data also undermined the euro, which was buying $1.5727, down from $1.5881 in late North American trading Wednesday. The dollar index, which measures the U.S. unit against a basket of major currencies, was at 72.410, up from 71.848 Wednesday. The dollar bought 103.80 yen, up from 103.46 yen and the British pound was at $1.9728, down from $1.9802.

James Brown : 4/24/2008 10:20:07 AM

Defense contractor L-3 Communications (LLL) is showing some relative strength today. The company beat Wall Street's estimates of $1.51 by 3 cents this morning. Management guided higher for the rest of 2008.

The stock is flirting with a breakout over resistance near $115.00. A move over $115.35 might be a bullish entry point to buy calls.

The Point & Figure chart displays a triple-top breakout buy signal with a $136 target.

Jane Fox : 4/24/2008 10:20:06 AM

US$ is breaking its triangle to the upside and is the reason Gold is falling today. Link

Linda Piazza : 4/24/2008 10:18:22 AM

The A/D line approached but didn't quite touch its downside target. That target was -1090 and the A/D line dropped to -1032 before rebounding to its current -240. However, it will not erase that downside target until and unless it scrambles back above about -240 and maintains values above that.

James Brown : 4/24/2008 10:14:57 AM

The fertilizer/agriculture group is following POT lower.

Monsanto (MON)       -4.4%
Mosaic (MOS)       -7.2%
CF Inds. (CF)       -8%
Terra Inds. (TRA)       -4.5%


James Brown : 4/24/2008 10:12:47 AM

Reversal in Potash (POT)

The initial reaction to POT's earnings news has reversed. The stock is seeing a sell-the-news reaction. The stock is down 6% to $192 and breaking the 10-dma.

Keene Little : 4/24/2008 10:10:56 AM

Equities have dropped sharply following the new home sales data. I'm not sure why the market was surprised by the data. Perhaps it was that slippery slope of hope thing where so many would like to believe the worst is behind us.

James Brown : 4/24/2008 10:09:00 AM

Believe it or not it looks like the DJUSHB home construction index and the HGX housing sector index are both bouncing in spite of the news.

These don't trade very much volume... and my initial gut reaction was that my data (for these charts) was wrong...

Linda Piazza : 4/24/2008 10:06:53 AM

The A/D line did punch up to close the last 15-minute period at -287, just below what had been support, rendering it potential resistance instead. It has since dropped further, to -760 as I type, setting a potential downside target of -1090. If it meets that target, it should carry equities down with it. For example, the SPX might break through the current 1375 potential support on 15-minute closes and drop toward 1368.25. However, we are in the immediate reaction to the 10:00 number, and that immediate reaction might not see follow through. As I warned, we can't always count on follow through when prices coil this way. Do consider vulnerability to 1368.25, however.

Jane Fox : 4/24/2008 10:04:32 AM

U.S. March new-home inventories fall 12th straight month

March new-home supply on market 11 months, 27-year high

U.S. March new-home median price down 13.3% in past year

U.S. new-home sales down 36.6% in past year

U.S. March new-home sales much weaker than 577,000 expected

U.S. March new-home sales weakest in 17-years

U.S. March new-home sales plunge 8.5% to 526,000 annual pace

James Brown : 4/24/2008 10:03:10 AM

Predicting average gasoline prices to be $5.50 a gallon by 2010.

James Brown : 4/24/2008 10:04:11 AM

CNBC's recent guest, Jeff Rubin, is predicting crude oil at $225 a barrel by 2012.

Jane Fox : 4/24/2008 10:00:18 AM

Remember March New Home Sales out at 10:00 today.

James Brown : 4/24/2008 10:00:16 AM

Chinese stocks are up again today following yesterday's big gain.

The Shanghai index rose 9%, it's biggest gain in more than six years, thanks to news that the government was cutting a stamp tax on stock transactions. This erased the tax stamp they slapped on stocks last year to cool the markets. Looks like it worked too well.

The Shanghai composite has been cut in half in the last nine months from 6,000 to 3,000. After today's gain the Shanghai is up around 3,500.

Linda Piazza : 4/24/2008 9:58:37 AM

Hang onto your hats if you're trading in this choppy environment. One problem that occurs when prices coil this way is that setups no longer see the expected follow through. You're reduced to trading on your biases. You can think you have all the ducks in a row for your trade, only to find that the moment you get confirmation of a fill, the whole tenor of the trade has changed.

Linda Piazza : 4/24/2008 9:56:23 AM

Update on the A/D Line's Keltner outlook: Despite support that looked strong enough to hold up values on 15-minute closes, barring a strong whoosh down, values are breaking through that support. We're seeing the strong whoosh down. This 15-minute period has not concluded, but if there's not a strong bounce back above about -280 by the conclusion of this 15-minute period, that support will have been violated. The A/D line is now at -308, up from its -512 low. It's bouncing strongly, so the support may yet hold on 15-minute closes.

James Brown : 4/24/2008 9:53:45 AM

VFC is trading lower after yesterday's earnings report.

The stock is breaking down from its trading range and breaking support at the 100-dma and the $75.00 level.

This might be a potential entry point for puts. Link

Linda Piazza : 4/24/2008 9:52:40 AM

This morning in the U.K., March figures showed that approvals for mortgages dropped 46.2 percent from the year-ago level, with this information coming from the British Bankers' Association. Activity has been cut almost in half, too. Property prices slipped. Despite a rate cut by the Bank of England in April, lenders aren't passing that cut on to mortgage borrowers. The LIBOR, the rate at which banks lend to each other, set by the BBA, inched higher again yesterday.

James Brown : 4/24/2008 9:49:37 AM

The GDX gold-miner ETF is down 2.8%, breaking under its 200-dma, and actually trading under potential round-number support at $45.00. Last trade $44.91.

Jane Fox : 4/24/2008 9:47:44 AM

In any case the VIX is not supporting the S&P futures' new daily lows so those lows will not have follow through.

Linda Piazza : 4/24/2008 9:48:16 AM

I noticed James and Keene commenting on the euro. Last night, Germany got a third-in-the-row troubling look at its economy, with the PMI, ZEW and this morning's Ifo all pointing to signs that Europe may be following in the footsteps of the U.S. rather than decoupling and providing support. Today's Credit Suisse report reiterated other signs that Europe is not immune to our problems. The ECB's Trichet may not be able to stand firm against rate cuts if such signs continue.

James Brown : 4/24/2008 9:47:30 AM

Newell Rubbermaid is hitting new multi-year lows with today's 10% drop to $21.20.

The company reported earnings inline but guided lower....

Jane Fox : 4/24/2008 9:46:48 AM

VIX is all over the map this morning, probably telling us the market has NO idea which way to go.

Jane Fox : 4/24/2008 9:45:23 AM

AD line is a neutral -113.

James Brown : 4/24/2008 9:44:38 AM

I agree with Keene on the Euro. Today's drop in the FXE doesn't look good.

James Brown : 4/24/2008 9:42:43 AM

Goodrich Corp (GR), an aerospace company, is a big winner today. The stock is up 9.5% and breaking out over multiple levels of resistance after beating Wall Street estimates of $0.99 by 22 cents. Guidance was generally positive.

Keene Little : 4/24/2008 9:41:49 AM

The euro has dropped below its last low at 1.5675 and confirmed the break down from its rising wedge pattern. This is significant since it's very likely a long term top in the euro (for the year). This will have bearish ramifications for commodities as well. Link

James Brown : 4/24/2008 9:39:01 AM

Hmmm.... retailer Kohls (KSS) is breaking out over resistance near $48.00 and hitting new four-month highs...

James Brown : 4/24/2008 9:37:35 AM

OI put play USO is down 1.7% to $93.56.

James Brown : 4/24/2008 9:36:50 AM

The sell-off in crude is picking up a little... down 2.32 to $115.98.

Linda Piazza : 4/24/2008 9:36:26 AM

Keltner outlook on the A/D line: There is none! The A/D line is +58 as I type, with the A/D line coiling, too. If it heads down, it will test what looks like strong support, beginning at about -35 and layered down to about -250. Barring a strong whoosh down, that looks strong enough to prompt a bounce, but where will it go? With it caught in a coil right now, that's difficult to predict. If it just chops around longer, it could weaken that support, but so far, it looks strong.

James Brown : 4/24/2008 9:35:41 AM

A stronger U.S. dollar is also pulling the Japanese Yen lower. The FXY is slipping toward what looks like potential support near $95.00.

Linda Piazza : 4/24/2008 9:33:53 AM

For the OEX, next Keltner resistance on 15-minute closes is from about 639.20 up to 640.12. Support is 636.95-637.66 but is stronger near 634.62 and then at 632.44. Between 632.44 and 640.12, it's just chop from a Keltner perspective.

James Brown : 4/24/2008 9:33:53 AM

Strength in the dollar pushing gold lower.... the Gold ETF (GLD) is lower around $88.00, trading under its 100-dma (88.85)

James Brown : 4/24/2008 9:31:51 AM

Safeway (SWY) beat estimates by 2 cents this morning and guided inline but they did lower their same-store sales estimates for 2008 to 2.0%-2.3% growth. There is no movement in the stock price near $28.00

Linda Piazza : 4/24/2008 9:31:47 AM

Futures have been on quite a ride this morning, haven't they? Because the earlier weakness may show some vulnerability to lower prices, let's look at both possible support and possible resistance. Possible support on 15-minute closes exists from 1378.58-1378.80 but looks stronger at 1375.26 and then at 1368.69. Possible resistance is near 1382.37, the approximate location of a best-fit version of a descending trendline off Friday's high and then at 1385.45, an important Keltner level. As I said yesterday, between those levels, it's just chop. Actually, between 1360.03 potential support and 1385.45, it's unfortunately just chop.

Keene Little : 4/24/2008 9:29:53 AM

I'm not sure what caused the spike up in equity futures from the brief consolidation into 9:00 AM but it was enough to push futures into positive territory. DOW futures are up a little more than 100 points off the 7:00 AM low (ES is up 15 points). That's quite a jump and once it again it has me wondering if it was manufactured--pump futures up so that someone big can sell into it after the cash market opens. Stay cautious after the open.

James Brown : 4/24/2008 9:28:54 AM

Traders were buying the dip in GOOG near $540 yesterday and shares closed at $546.49. The stock is ticking higher again near $548 ahead of the open.

Jane Fox : 4/24/2008 9:28:12 AM

Crude is down a tad this morning but this kind of movement usually precedes another move upward. When Crude decides to selloff lately it has been pretty violent. This is not violent, this is mambe pambe stuff. Link

James Brown : 4/24/2008 9:27:27 AM

AAPL continues to climb and now up to $166.50....

James Brown : 4/24/2008 9:25:19 AM

Ford Motor Co (F) is up about 6% in pre-market around $8.00 on a better than expected earnings report.

Jane Fox : 4/24/2008 9:25:32 AM

I took a snapshot of the overnight charts but before I posted them I answered an email. When I went back to check the charts I saw the ON markets had taken a huge jump upwards so I had to take a new snapshot. Not sure what instigated this jump but I thought I should get these posted then start looking for the reason. Link

James Brown : 4/24/2008 9:21:43 AM

Whirlpool (WHR) is going to gap open lower this morning.

With the real estate market in a slump and the consumer pulling back it's no surprise to see WHR's sales suffering.

Wall Street was looking for a profit of $1.57. WHR reported this morning and missed by 35 cents and guided lower for 2008.

WHR is down about 10% in pre-market around $74.25.

James Brown : 4/24/2008 9:19:14 AM

Fertilizer giant Potash Corp. of Saskatchewan (POT) is seeing its already high-flying stock surging again.

The company reported earnings this morning and beat analysts' estimates of $1.52 by 22 cents.

The stock is up about $3.00 in pre-market trading around $207. In spite of the earnings beat I'm surprised there isn't a sell the news move. Shares are up more than $40 in the last four weeks.

James Brown : 4/24/2008 9:14:03 AM

Hamburger chain Wendy's (WEN) reported earnings this morning that missed estimates by 7 cents.

The company also announced it was accepting a buy-out offer from Triarc Companies (symbol TRY), owned by Nelson Peltz, in an all-stock deal worth $2.3 billion.

Triarc operates rival Arby's.

James Brown : 4/24/2008 9:09:44 AM

DJIA futures definitely bouncing from their lows but still negative.

Jane Fox : 4/24/2008 9:09:00 AM

WASHINGTON (MarketWatch) -- Apple Inc. late Wednesday reported that second-quarter profit rose 36% from a year ago as revenue climbed above $7 billion on strong sales of Macintosh PCs and iPhones.

Apple's shares rose about 1.3% in premarket trades Thursday even though the company issued a third-quarter forecast that was conservative and fell below analysts' consensus averages.

Chief Financial Officer Peter Oppenheimer said Apple earned $1.05 billion, or $1.16 a share, on $7.51 billion in revenue for the quarter, compared with the same period a year ago when Apple earned $770 million, or 87 cents a share, on sales of $5.26 billion.

James Brown : 4/24/2008 9:08:00 AM

      Crude Oil futures are down 1.40 to $116.90

Jane Fox : 4/24/2008 9:06:50 AM

WASHINGTON (MarketWatch) - Hurt by a strike in the auto industry, orders for U.S.-built durable goods slipped 0.3% in March, the third decline in a row, the Commerce Department estimated Thursday. The decline was as expected by economists following an upwardly revised 0.9% decline in February. Inventories of durable goods at the factory jumped 1.1% in March, a troublesome sign that could lead to further layoffs and production cutbacks if demand doesn't rebound. Shipments of durable goods fell 0.4% in March after sinking 2.6% in February. Orders for core capital equipment goods were flat in March after declining in January and February.

Jane Fox : 4/24/2008 9:06:33 AM

WASHINGTON (MarketWatch) -- First time filings for state unemployment benefits fell sharply in the latest week, as the economy seems to dance on the thin line separating slow growth from outright recession.

For the week ended April 19, initial claims fell 33,000 to 342,000. This is the lowest level since the week ended February 16.

Economists say readings running consistently higher than 350,000 signal significant weakening in the labor market.

Claims have been above that level for the past five weeks, but have also been very volatile, most likely due to trouble adjusting for the early Easter holiday this year. So it is hard to draw firm conclusions.

What is clear is that this week's drop was unexpected. Economists had been expecting claims to remain elevated, rising slightly by 3,000 to 375,000.

The four week moving average of those claims fell by 7,250 to stand at 369,500.

James Brown : 4/24/2008 9:06:32 AM

Just a few of the companies who have reported earnings this morning and are guiding lower are... DLX, RCL, MOT,

James Brown : 4/24/2008 9:00:21 AM

Jobless claims coming in at 342,00, down 33,000.

      March Durable goods are down 0.3%

James Brown : 4/24/2008 8:56:13 AM

Investor reaction to earnings has been negative and the Dow Jones Industrials are poised to open lower...

James Brown : 4/24/2008 8:55:00 AM

The FXE Euro ETF is trading lower this morning.

The FXE Euro closed at $159.28 and is trading down near $157.62.

James Brown : 4/24/2008 8:53:52 AM

AMZN is set to open lower. The company reported results last night. Shares closed at $81.00 and are trading at $77.30 this morning.

James Brown : 4/24/2008 8:52:56 AM

AAPL reported earnings last night. The stock was pretty volatile in after hours trading with a $155-171 range. This morning traders are buying the dip near $160 and AAPL is poised to open higher near $165.00.

James Brown : 4/24/2008 8:50:58 AM

Reminder... Starbucks (SBUX) issued an earnings warning last night. The company sees Q2 numbers around 15 cents versus Wall Street estimates in the 20-21 cent range.

The stock closed at $17.85 yesterday and is trading around $15.87 this morning.

We're not seeing any downgrades yet.

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