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Keene Little : 5/7/2008 12:07:05 AM

Wednesday's pivot tables: Link and Link

The daily SPX chart shows price bouncing between the broken downtrend line from October and the top of its rising wedge, and just below its 50% retracement at 1423. If we see a little more rally watch for resistance at the 200-dma at 1431. It takes a drop below 1369 to tell us the bears are back in control. In the meantime a choppy whipsaw market making its way higher (which defines an ending pattern) is what we still have. Link

The 120-min chart shows why I have 1442 for a key level to the upside. Two equal legs up from April 15th could be where SPX is headed to finish its bounce off the March low. Another Fib projection of interest is at 1453 and that level crosses the trend line along the highs since March 24th this Friday. One other Fib projection that is not shown on this chart is at 1436 and this is confluence with a couple of projections for the move up from April 15th (and only a few points above the 200-dma). The 1436 level crosses the lower trend line along the highs since April 18th at the end of the day Thursday. Link

The DOW's Fib projections for its move up from March do not correlate quite as closely and I have a range between 13149 and 13282 so not much help there. Its 200-dma is at 13038 and the trend line along the highs since March 24th (which price broke above briefly on Friday) is near 13075 and then Friday's high near 13133. So resistance is layered above and we could see continued chop and whipsaw as it works its way higher. It takes a break below 12797 to say the top is probably in. 120-min chart: Link

OI Technical Staff : 5/6/2008 9:59:59 PM

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Jeff Bailey : 5/6/2008 8:16:58 PM

June crude $121.77

June Unleaded $3.10

($3.10 / $121.77) = 0.02545.

Can multiply by 1000 to get chartable value of 25.45.

Jeff Bailey : 5/6/2008 8:14:06 PM

$GASO : $WTIC ... 0.40 box chart Link

Jeff Bailey : 5/6/2008 8:10:11 PM

Tesoro (TSO) $25.00 -1.26% ... lst ticked $24.70. Earnings Press Release Link

Jeff Bailey : 5/6/2008 8:08:07 PM

Final Ticks ...

DIS $34.69
PACR $19.00
CSCO $26.62
RFMD $3.30
XCO $26.00
EXP $34.75
OSUR $5.85
THQI $19.00

Other earnings Link

Jeff Bailey : 5/6/2008 7:37:03 PM

MBIA Releases Letter To Owners Link

Jeff Bailey : 5/6/2008 7:35:50 PM

MBIA Inc. (MBI) alert! $11.39 +3.07% ... pops to $12.00 as company says "rate of deterioration beginning to slow"

See also today's FNM earnings press release and MM notes.

Jeff Bailey : 5/6/2008 7:33:49 PM

YM 13,030 ... up 2 points Tuesday's settlement.

Jeff Bailey : 5/6/2008 7:33:11 PM

Associated Press projecting Obama to win North Carolina Democratic primary.

Jeff Bailey : 5/6/2008 7:31:57 PM

Closing Internals at this Link

Jeff Bailey : 5/6/2008 7:29:03 PM

"Buy in May, here to stay?"

Jeff Bailey : 5/6/2008 7:28:32 PM

That's just "crazy" ... on 04/02/08 the NYSE's 10-day NH/NL ratio gave its first "buy signal" off the bottom.

Yesterday, 05/05/08, NASDAQ's 10-day NH/NL ratio gives its first buy signal off the bottom.

Jeff Bailey : 5/6/2008 6:39:35 PM

CSCO's WKLY Pivot levels from QCharts are ... $24.58, $25.65, Piv= $26.32, $27.39, $28.06.

Jeff Bailey : 5/6/2008 6:37:25 PM

Cisco Systems (CSCO) $26.28 (unch) ... ticking $26.69 ... extended session high/low so far has been $27.33/$26.08.

As you know from recent BARE extended action, this don't count. It is what happens when all market participants cast their votes during regular that matters most.

Takes some time to digest an earnings release.

Jeff Bailey : 5/6/2008 6:34:07 PM

MONTHLY/QRTRLY (updated for trades) at this Link

Look at where things have traded. SMH actually RIGHT at M R1 and Q R1 at tonight's close.

QQQQ went out at $48.93 (M R1). Ticks $49.07. Will CSCO's extended session be enough?

Or will it be the BIX.X that has dollar bears giving up and going "all in" with a massive short covering?

Stay tuned ... based on observation, I feel great pressure building in these markets.

Jeff Bailey : 5/6/2008 6:11:41 PM

10-year yield once again missed its Q R1 (38.96) by a fraction.

Jeff Bailey : 5/6/2008 5:56:23 PM

DXY Daily interval chart I've been showing with Quarterly levels and MONTHLY Pivot retracement. As well as the "Bailey Wave" channel. Link

The SIMILARITY alerted to a couple of days ago for DXY to bounce to 73.50-ish has taken place.

Now, in February, see the "failure" back below the then MONTHLY Pivot?

So, key level of SUPPORT for DXY in my mind is 72.30. DIVERGENCE from the past a break above 73.50.

Jeff Bailey : 5/6/2008 5:34:46 PM

OK, here we go ... I think DXY 72.30 is going to be VERY IMPORTANT. Here's why ...

Jeff Bailey : 5/6/2008 5:34:00 PM

Are you ready?

Jeff Bailey : 5/6/2008 5:32:58 PM

DXY's 05:00 tick was 72.990

Jeff Bailey : 5/6/2008 5:31:16 PM

Coming up on the 05:00 tick for the DXY ... dollar was probably "weakest" against the Canadian dollar.

Jeff Bailey : 5/6/2008 5:26:57 PM

Sensing a turn. A very SLOW turn.

Jeff Bailey : 5/6/2008 5:26:21 PM

Toll Bros. (TOL) $25.02 +0.76% ... challenged its 04/01/08 relative high close.

Jeff Bailey : 5/6/2008 5:23:44 PM

Fannie Mae (FNM) $30.81 +8.90% ... PnF chart at this Link

After today's earnings and MM comments, this stock should NOT trade $32.00. If it does ... do NOT be complacent and "assume" you know what they said.

Jeff Bailey : 5/6/2008 5:14:13 PM

It still seems like yesterday when Robert Toll saw "no end in sight" for the housing boom as the stock started to fall unexplicably.

Jeff Bailey : 5/6/2008 5:11:47 PM

CNBC trader's talking about how terrible FNM's quarter was, but FNM $30.81 +8.90% ... excellent, excellent comments and observations.

See today's MM starting with 09:40:46.

don't forget to check under the hood at 11:30:00 AM.

Jeff Bailey : 5/6/2008 5:05:22 PM

Forex Currencies into their 05:00 close Link ...

Jeff Bailey : 5/6/2008 4:57:24 PM

Quite a few eyeballs will be monitoring the dollar in the day's ahead (see recent DXY chart and Q Piv/M R1 and "Bailey Wave" correlations), but understand what was moving today.

Jeff Bailey : 5/6/2008 4:45:34 PM

Trading Halts Link

Jeff Bailey : 5/6/2008 4:44:32 PM

Cephalon (CEPH) $60.16 ... has been halted all day! US FDA panel said use of one of its drugs Fentora is too "risky" to use for broader indications.

Jeff Bailey : 5/6/2008 4:39:11 PM

DXY's 04:00 PM EDT tick was 73.017

Jeff Bailey : 5/6/2008 4:38:18 PM

THQ Inc. (THQI) $20.35 -0.97% Link ... Trade resumption slated for 05:00 PM EDT.

Jeff Bailey : 5/6/2008 4:36:45 PM

What does EXP Link do? Don't think I've heard of them. Sounds a bit like "Dynamic Materials" Link ...

Jeff Bailey : 5/6/2008 4:33:34 PM

THQ Inc. (THQI) $20.35 -0.97% ... halted for trade. News pending.

Jeff Bailey : 5/6/2008 4:32:51 PM

Seeing "Stone Energy 1Q Net Surges" to $62.2 Vs. $10.5M

Jeff Bailey : 5/6/2008 4:31:10 PM

Correction to OSUR ... trade resumption slated for 04:35 (not 05:35 as typed)

Jeff Bailey : 5/6/2008 4:29:48 PM

Stone Energy (SGY) $65.85 +3.76% ... halted for trade. No resumption time given at this point.

Jeff Bailey : 5/6/2008 4:30:39 PM

OraSure Tech (OSUR) $6.55 -1.79% ... was halted for trade. Resumption time approx 4:35 PM EDt.

Jeff Bailey : 5/6/2008 4:27:09 PM

Eagle Materials (EXP) $36.55 +0.41% ... halted for trade. No resumption time given at this point.

Jeff Bailey : 5/6/2008 4:26:22 PM

Exco Resources (XCO) $24.97 +6.02% ... halted for trade. No resumption time at this point.

Jeff Bailey : 5/6/2008 4:25:40 PM

RF Micro (RFMD) $3.45 +4.86% ... was halted for trade. Trade resumption slated for 04:35 PM EDt.

Jeff Bailey : 5/6/2008 4:23:25 PM

Ultra Petroleum (UPL) boosting production views.

Jeff Bailey : 5/6/2008 4:21:37 PM

At last night's close, Dorsey/Wright's 30-Wk For NYSE was at 47.22%.

That is, of the roughly more than 3,000 stocks that comprise this index, roughly 1,417 stocks CLOSED above their 150-day SMA.

Jeff Bailey : 5/6/2008 4:19:39 PM

NYSE Composite ($NYA.X) alert! 9,510.98 +0.77% ... does close above its 200-day SMA (9,470) today. Note 150-day SMA (9,417).

Jeff Bailey : 5/6/2008 4:15:43 PM

Cisco's Earnings Press Release Link

Jeff Bailey : 5/6/2008 4:12:13 PM

Disney's Earnings Press Release Link

Jeff Bailey : 5/6/2008 4:09:05 PM

Cisco Systems (CSCO) $26.28 (unch) Link ... pops to $27.00 on headline numbers.

Jeff Bailey : 5/6/2008 4:08:15 PM

Pacer Intl. (PACR) $18.33 +3.91% Link ... jumps to $18.94 on headline numbers.

Jeff Bailey : 5/6/2008 4:08:11 PM

Walt Disney (DIS) $33.73 +1.32% Link ... jumps to $34.79 on headline numbers. Should get the Dorsey/Wright RS buy signal. Outperforming longer-term if we open here in the morning.

Jeff Bailey : 5/6/2008 4:05:16 PM

Here come the earnings ...

Jeff Bailey : 5/6/2008 4:03:35 PM

Argentina's Farm Ldr saying its government will modify its export tax scheme. Will spell out changes on Wednesday.

Keene Little : 5/6/2008 4:01:48 PM

Interesting candle pattern on the DOW's daily chart that I posted. Friday's is a shooting star, followed by the red candle on Monday and now today looks like a hammer. But a hammer is only meaningful at a bottom and I'd hardly classify a 1-day pullback the bottom of a decline.

But the bottom line is it looks like the candles might not have much meaning here--just indecision by the market (think of a big doji when the three candles are combined). The big doji could be a topping pattern (part of a larger evening star formation) or it could be just consolidation before proceeding higher. Unfortunately we'll have to see how tomorrow plays out to get a better sense what it all might mean.

Keene Little : 5/6/2008 3:53:59 PM

SPX is still holding above its uptrend line from this morning's low so no damage to today's bull run yet. That uptrend line is near 1417.50.

Jeff Bailey : 5/6/2008 3:51:42 PM

YM 13,006 ... look'n squared up.

Jeff Bailey : 5/6/2008 3:51:13 PM

$/yen ... 104.80 ... sticks its head above WKLY Pivot.

Linda Piazza : 5/6/2008 3:51:13 PM

I thought that, even if the SPX pushed higher today, it would likely end the day at or below 1415-1418, as I noted in my 3:16:51 post. It's still not an impossible outcome but one that bulls would rather not see now that the SPX has pushed so strongly above that level. SPX at 1419.04 as I type, off its 1421.57 high. I'm not predicting that the SPX will drop that far, just saying that it might not meet my original expectations for where it would find resistance on a daily close once I saw that the bounce from the 10-sma was going to hold.

Jeff Bailey : 5/6/2008 3:49:38 PM

XLF $27.48 +0.91% ... May "Max Pain" theory at $26.00 ... $1 inc.

Jeff Bailey : 5/6/2008 3:48:39 PM

Regional Bank HOLDRs (RKH) $128.04 +0.73% ... Quick check has its May "Max Pain" theory at $125.00 ... $5 increments.

Jane Fox : 5/6/2008 3:46:51 PM

Tomorrow's economic report docket includes:

7:00a.m. MBA Mortgage Refinancing Index. Previous: -16.7%.

8:30a.m. 1Q Productivity, Prelim. Expected: +1.5%. Previous: +1.9%.

8:30a.m. 1Q Unit Labor Costs, Prelim. Expected: +2.8%. Previous: +2.6%.

10:00a.m. Mar Pending Home Sales Index. Expected: -2.0%. Previous: -1.9%.

Jeff Bailey : 5/6/2008 3:46:46 PM

BIX.X 256.98 +1.38% ... starting to curl higher 50-day SMA and WKLY S1 found some buyers at the open. Still has trouble at its conventional 19.1%. WKLY R1 at 266.32.

Keene Little : 5/6/2008 3:46:17 PM

Just above the DOW's 200-dma, the trend line along the highs since March 24th (top of a rising wedge pattern) is near 13078 (and rising). If Friday's high was it for the DOW then a retest of the top of its wedge would be a logical place for resistance to hold. Link

Jane Fox : 5/6/2008 3:44:51 PM

The bulls certainly took over the reins today and on the daily chart are making a bold statement. Link Te Weekly chart shows us the next major resistance will be around 1525. Link

Linda Piazza : 5/6/2008 3:44:43 PM

From one side to the other of the entire chart on the 7-minute SPX Keltner chart, all in the space of hours: Link Note how, even on this short-term chart, most prices are usually contained in the black channel, showing how volatile the price movements have been today, being that they instead zoomed from bottom to top.

Jeff Bailey : 5/6/2008 3:43:02 PM

VIX.X 18.18 -3.80% ... and the other 1/2 of option trading. Especially for May's expiration.

James Brown : 5/6/2008 3:41:47 PM

Trading Idea: Shares of Fortune Brands (FO) are showing some strength here. The stock is bouncing from the bottom of its two-week trading range and its 50-dma.

Traders might consider buying calls on a breakout over resistance at $70.00 with a stop loss under today's low (67.97). Potential targets are $74.00 or the 200-dma near $75.00. chart: Link

Keene Little : 5/6/2008 3:40:06 PM

The DOW is ringing the bell again at its 200-dma at 13038.

Jeff Bailey : 5/6/2008 3:39:37 PM

Well, I can't disagree with Linda regarding "taking profits too soon." Nothing wrong with that. But still... left some money on the table with the YUX-EV's for sure.

Jeff Bailey : 5/6/2008 3:38:10 PM

YRCW $18.89 +4.89% ... YUX-EV $6.30 x $6.60

Jeff Bailey : 5/6/2008 3:36:51 PM

SWC $13.89 +2.43% ... SWC-QW $3.40 x $3.80

Jeff Bailey : 5/6/2008 3:35:58 PM

BARE $20.38 +5.54% ... URY-QX $2.10 x $2.35

Jeff Bailey : 5/6/2008 3:33:21 PM

Fannie Mae (FNM) $30.72 +8.51% ...

Linda Piazza : 5/6/2008 3:33:02 PM

Here's where I show the VIX on the daily Keltner chart, another reason for my caution about further upside: Link Just because the VIX is testing the same Keltner level it tested last October 5-11 doesn't mean the outcome will be the same (October 11 was the SPX high before the long slide), but it would give me the heebie jeebies if I had too much exposure on the long side.

Keene Little : 5/6/2008 3:32:26 PM

I agree with Linda--this remains a market that punishes position traders and rewards those who take profits too soon. We've seen time and again where a day's move that goes right into the close (closing at its high or low) gets completely reversed the following day. Depending on what happens in the final 30 minutes I see the same possibility for today/tomorrow.

Jeff Bailey : 5/6/2008 3:31:31 PM

YM 13,010 ... could edge back towards 12,990

Jeff Bailey : 5/6/2008 3:29:45 PM

$/yen 104.74 ... still pinned under its WKLY Pivot.

Linda Piazza : 5/6/2008 3:28:59 PM

I don't pretend to know how Keene develops his targets; perhaps he thinks my methods are as mysterious as his. What I do know is that both of us began seeing targets set up for the SPX at similar levels (although I had trouble believing in it), with those targets derived from completely different methodology. That suggests to me that lots of people using lots of different methodologies are looking at the same levels as being potentially strong resistance levels. Whatever you think of those methodologies, they can be self fulfilling. If you're in a bullish trade, worried about what might happen the next day and you're thinking that a lot of sellers might come in near 1419-1422, then you might be more likely to try to exit your position just before or just as that level is hit. If big money intends for the markets to go even higher, they can keep them supported long enough to scare would-be bears into covering right into the close and beyond, but just be aware of the potential resistance being tested and plan accordingly. Don't let a profit get away from you.

Jeff Bailey : 5/6/2008 3:24:28 PM

That's 3-months, or roughly 13-weeks.

Jeff Bailey : 5/6/2008 3:24:09 PM

Mexico's 91-day Cetes Yield unchanged at 7.57%.

Jeff Bailey : 5/6/2008 3:23:06 PM

That's 6-months.

Jeff Bailey : 5/6/2008 3:22:43 PM

Mexico's 182-Day Cetes Yield rose 0.03 Pct Pt to 7.72%.

Jeff Bailey : 5/6/2008 3:19:24 PM

US Treasury saying there was a net $8.78 Bln Treasurys stripped in April.

Jeff Bailey : 5/6/2008 3:17:01 PM

NYSE's NH/NL ratio chart Link

??? would be action to today's close for the "f"ive day. A bid like a "corrective wave."

Linda Piazza : 5/6/2008 3:16:51 PM

You know I warned this morning that a test of the daily 10-sma would probably result in some buying. I warned bears to be prepared with their profit-protecting plans, but even though I warned of that possibility, I honestly didn't expect this strong a bounce. In fact, if you'd been holding my feet to the fire, I'd have thought the bounce would have stopped somewhere near 1415-1418, if not before, or at least pulled back near there after piercing it.

Now we see what happens next. I still don't like the form in which the SPX is climbing on the daily chart (narrowing wedge) and think it only natural if the SPX should have to pull back within that form sometime before it truly could sustain moves above the 50% retracement of its decline or its 200-sma. It might chop around for a while just above and just below that Fib level, and I expected that to happen, but I'm not convinced just yet that the SPX has broken free of this (blue wedge) formation, and so not convinced yet that it won't drop back through it, either: Link I can be proven wrong by sustained daily closes above the 200-sma but for now, I warn bulls not to totally discount the possibility of a pullback at least to the 10-sma again or maybe through it.

Keene Little : 5/6/2008 3:14:47 PM

We didn't get much of a pullback from the last high just before 3:00 PM before the market pressed higher again. This raises the possibility that it's the last leg up before topping out (and the possibility we'll see some selling into the close. Normally we don't see a reversal at this hour so I'd be very careful about trying to short this. But it's certainly time to trail your stops up tighter if you're long.

Jeff Bailey : 5/6/2008 3:13:09 PM

NYSE NH/NL 98:69 ... 5-day NH/NL ratio holding firm at support and looks to reverse up with a 51.17% measure as I type.

Jeff Bailey : 5/6/2008 3:11:23 PM

NASDAQ a/d 17:12

Jeff Bailey : 5/6/2008 3:11:11 PM

NYSE a/d 18:12

Linda Piazza : 5/6/2008 3:08:55 PM

I listed tonight's developments in Japan in an earlier post. Other overnight developments include a host of numbers related to the U.K.'s March Industrial Production at 4:30 am ET tomorrow morning and Germany's March Industrial Orders tomorrow morning at 6:00 am ET. Be aware that both the ECB and Bank of England will be announcing rate decisions Thursday morning, so trading tomorrow in Europe could be related to positioning portfolios ahead of those decisions, to minimize risk. Japan will be watching closely, too, as the EURJPY has been pulling back from its April high over the last couple of weeks but then began coiling about a week ago. Japan wants to see the EURJPY gain again. The last time ECB President Trichet spoke that I know about, he didn't sound as if he'd softened his hawkish stance, but some have been theorizing that with a slew of troublesome numbers from Germany lately (ZEW, Ifo, etc.) he and others may be forced to soften that stance.

Jeff Bailey : 5/6/2008 3:06:53 PM

$/yen 104.75

Jeff Bailey : 5/6/2008 3:06:41 PM

Equity bears will likely feel some heat to the close.

Jeff Bailey : 5/6/2008 3:05:48 PM

Bond market close with 13-week up another 4.5 bp today at 1.595%. 5-year reversed PRICE gains with YIELD finishing up 1.0 bp at 3.145%. 10-year up 4.8 bp at 3.893% and above its WKLY Pivot. 30-year up 6.1 bp at 4.642%.

Keene Little : 5/6/2008 3:04:45 PM

The wave pattern suggests a sideways/down consolidation near the high for 30-45 minutes before pressing to a final high (into the close). That would be a setup for at least a pullback tomorrow morning but we'll see how it sets up in the final hour.

Jeff Bailey : 5/6/2008 3:02:38 PM

Seeing that Citigroup (C) $25.83 +0.31% just launched a $2 billion offering of Series F preferred securities. The issue consists of 80 million shares, priced at $25 par. Moody's rates "A2"

Keene Little : 5/6/2008 3:01:58 PM

Another sign of bearish divergence at this afternoon's high is the a-d line for NYSE. While price makes new highs its a-d line is not.

Keene Little : 5/6/2008 2:59:08 PM

Got the push to a new high. SPX 1419-1420 could still act as resistance today and the DOW is approaching its 200-dma again at 13038. The bearish divergences on the intraday charts have me thinking it could be tough to press much higher.

Linda Piazza : 5/6/2008 2:58:36 PM

Be watchful of that next SPX target now near 1421-1422.39. Again, I'm not listing this is a target for bulls to aspire to but rather saying that bears need to be aware that the SPX has set a potential target there.

Jeff Bailey : 5/6/2008 2:58:31 PM

Disclosures ... I do NOT currently hold bullish, or bearish positions in CFC or BAC. Not sure about the Senator.

Jane Fox : 5/6/2008 2:57:55 PM

Dateline WSJ = WASHINGTON -- Federal Bureau of Investigation agents raided the Office of Special Counsel here, seizing computers and documents belonging to the agency chief Scott Bloch and staff.

More than a dozen FBI agents served grand jury subpoenas shortly after 10 a.m., shutting down the agency's computer network and searching its offices, as well as Mr. Bloch's home. Employees said the searches appeared focused on alleged obstruction of justice by Mr. Bloch during the course of an 2006 inquiry into his conduct in ...

Jeff Bailey : 5/6/2008 2:56:21 PM

Need some BOOM $33.78 -1.22% to do the same. Terrible. Simply terrible.

Jeff Bailey : 5/6/2008 2:55:24 PM

BARE $20.30 +5.12% ... don't let May put gains slip away.

Jeff Bailey : 5/6/2008 2:53:22 PM

I think any US Senator might want to focus attention on their own business at hand.

Jeff Bailey : 5/6/2008 2:52:23 PM

US Senator saying BofA should pay less for Countrywide.

Jeff Bailey : 5/6/2008 2:50:57 PM

I feel, based on observation, great pressure building in AA. Link

Jeff Bailey : 5/6/2008 2:49:52 PM

Bugger traded $34 on 4/14, then again on 05/01

Jeff Bailey : 5/6/2008 2:49:01 PM

Hmmm ... mentioned AA today and 04/07/08 wrap Link

Jeff Bailey : 5/6/2008 2:42:04 PM

Several weeks ago, in one of my Market Wraps, I discussed EXACTLY that tie.

Linda Piazza : 5/6/2008 2:41:37 PM

The setup that suggested the SPX would drop toward 1409.73-1411.67 (slightly lower numbers at the time) has been erased as the SPX is now maintaining values above its 15-minute 9-ema. However, be aware of that resistance again being faced. On a short-term basis, that's from 1415.94-1418.60 on 15-minute closes, but the more important level being tested is the 50% retracement of the decline from October 2007's high into March's low. That's at 1416.535. Despite the three decimal places, don't consider this a specific point being tested, but rather a zone around it because I imagine that bulls could momentarily drive the bears back and vice versa as this is tested.

Jeff Bailey : 5/6/2008 2:41:35 PM

CNBC's Rick Santelli saying ... "I find it interesting that when the dollar gives back ground, SENTIMENT shifts a bit."

Linda Piazza : 5/6/2008 2:38:19 PM

The Nikkei has been closed the last two nights for the Golden Week holidays. Tonight it opens again for the first time this week. It doesn't appear to have a lot of catching up to do because our markets have pretty well consolidated sideways. A daily chart of the USDJPY shows that it pretty much done so, too, mostly staying within Friday's range and above the 10-sma. China's President Hu Jintao has been in Japan this week, and he and Japan's Prime Minister Yasua Fukuda are rumored to be crafting a joint statement on North Korea, so it's possible that something could be said there that escalates tensions again. Bill Gates is also in Japan and reportedly will meet with the press there tonight, so watch MSFT, too, in case something is said that will impact its price. I don't see anything else related to economic releases although some companies (Teijin, Fujikura, Jtekt and Earth Chemical) release earnings reports. I'm not familiar with any of those companies and so don't know if their earnings will have an impact on the Nikkei or anything that impacts global bourses.

Jeff Bailey : 5/6/2008 2:30:05 PM

5-year down 1.9 bp at 3.116% ...

$/yen 104.59 ... won't break its 5-minute interval 50-pd SMA.

Jeff Bailey : 5/6/2008 2:28:48 PM

YM short stop alert! 12,976

Linda Piazza : 5/6/2008 2:26:27 PM

The OEX has the potential to drop toward 650.60 before finding next support. That can be changed by sustained values above 651.75.

Linda Piazza : 5/6/2008 2:25:41 PM

Although it's not a given, there's still a setup for the SPX to drop toward 1409.44-1411.22 before finding next firm support. That can be changed by sustained values above 1413.65.

Keene Little : 5/6/2008 2:25:08 PM

I'm not sure what to make of the drop so far. I would have expected a faster drop from a failure of the bull flag. It's possible it's simply a slightly larger pullback correction before continuing higher to yet another marginal new high. Unless this starts breaking down a little more quickly I see the potential for the market to be held up into the last hour.

Jeff Bailey : 5/6/2008 2:21:16 PM

Yes, it looks as if it was.

Linda Piazza : 5/6/2008 2:19:43 PM

The SPX's 15-minute 9-ema is now 1413.65. SPX bulls don't want to see a pattern of 15-minute closes now beneath a curving lower 15-minute 9-ema. SPX at 1413.40 as I type, with a possible setup for a decline to 1411.25 or possibly even 1409.43 before finding next support.

Jeff Bailey : 5/6/2008 2:19:01 PM

02:00 Internals at this Link

Keene Little : 5/6/2008 2:16:02 PM

That made sense for the stop. I guess it was a typo when you said stop at 13002.

Jeff Bailey : 5/6/2008 2:16:15 PM

You catching on to the currency $/yen and YM relation yet?

Jeff Bailey : 5/6/2008 2:15:14 PM

Initial stop was 13,012 Keene! Just above the day's high.

Keene Little : 5/6/2008 2:13:11 PM

Jeff, didn't your YM short get stopped out at 13002 on that spike up to 13005 at 1:44 PM?

Jeff Bailey : 5/6/2008 2:12:47 PM

5-year down 1.7 bp at 3.118% ...

Linda Piazza : 5/6/2008 2:12:57 PM

And there it goes. As suggested in my 2:03:48 post, the SPX is dropping toward, although not yet to, the 1412.18 zone. That last push stopped ten cents above that, but I don't know that the slide is stopped yet. That's what we begin to find out now. In my 12:22:57 post, I warned bulls that the SPX was testing the upper channel line of the same black channel that the SPX had tested on its lower boundary earlier today before bouncing. Bulls needed the same warning then that bears needed earlier: this channel usually contains most price movements outside of particularly volatile times, so it was possible that the SPX was just overrunning the top boundary in a way similar to just overrunning the bottom one earlier today. Bulls need their profit-protecting plans now.

Jeff Bailey : 5/6/2008 2:12:13 PM

YM short lower stop alert! ... to 12,976.

YM 12,965

Jeff Bailey : 5/6/2008 2:08:27 PM

NH and NL creeping back bullish.

$/yen 104.54

Jeff Bailey : 5/6/2008 2:07:36 PM

YM short lower stop alert! to break even.

YM 12,970

Linda Piazza : 5/6/2008 2:03:48 PM

When I switch to the SPX's 30-minute Keltner chart, I see a potential upside target that has now moved up to 1421.52. However, I also see spiky 30-minute candles that suggest, without proving that it will happen, that the SPX needs either more consolidation time or else a stronger pullback, perhaps even to 1412.18, before any more upside progress can be accomplished, if it is accomplished. This is just a subjective impression, not proof.

Keene Little : 5/6/2008 2:02:02 PM

It's looking like a small bull flag over the past hour so that supports my view that we'll get at least another leg up to perhaps the SPX 1420 area. But if lets go to the downside instead then it will probably drop quickly so don't get caught leaning long and then get run over by the stampeding bulls running away.

Linda Piazza : 5/6/2008 1:57:38 PM

The SPX's 15-minute 9-ema is now 1413.96, pushed lower when the SPX finally did dip toward it a few minutes ago. Further potential support on 15-minute closes is now at 1415.68. Equity bulls want to see both those maintained as support on 15-minute closes.

Linda Piazza : 5/6/2008 1:47:46 PM

Didn't even pull back to the 15-minute 9-ema, at least not so far. That's now 1414.03 for the SPX; 651.86 for the OEX.

James Brown : 5/6/2008 1:43:55 PM

Apparel maker, Columbia Sportswear (COLM), is seeing above average volume as the stock nears support at the $40.00 level. Traders could use a break under $40.00 as a new entry point to buy puts and target a drop toward the $35.00 area. The low in January was $34.65. chart: Link

Keene Little : 5/6/2008 1:40:18 PM

We could get one more push to a minor new high (SPX 1420) in which case watch for more bearish divergences as a signal we could be topping and look for a short entry for at least a pullback against today's rally. If it doesn't start back down in earnest by a little after 2:00 PM then that raises the odds of a rally continuing into the close.

Jeff Bailey : 5/6/2008 1:36:28 PM

YM short alert! ... here at 12,985. Stop goes 13,002. Target 12,925

Linda Piazza : 5/6/2008 1:35:45 PM

Not unexpected, this slight pullback. The SPX's 15-minute 9-ema is now 1412.91; the OEX's, 651.41. We're moving into a typical stop-running time of day from about 1:35-1:55 pm ET, so big money may do some testing in this next few to twenty minutes to see whether a dip will be met with buying or a bounce with selling. That helps them determine whether buyers or sellers are strongest.

James Brown : 5/6/2008 1:31:36 PM

Chinese oil stock CNOOC Ltd (CEO) is breaking out from its three-week consolidation. This might be a bullish entry point for calls. chart: Link

Linda Piazza : 5/6/2008 1:29:07 PM

Remember that anything we're seeing on the short-term charts is trumped by what we know from the daily ones: the SPX is currently pausing near the 50% retracement of the steep decline from last October's high into this March's low. That can be a powerful Fib level. Although the SPX pushed above that 50% retracement on Monday, it did not close above it. As per my earlier post, the calculated 50% retracement is 1416.535. I would normally expect the SPX to spend days and days if not weeks chopping around that Fib level and would, in fact, expect a stronger pullback after testing it (and perhaps after jumping just above it) before it could muster the strength to stay above it for long, if it does. If bullish sentiment is strong, maybe that won't happen, but I wouldn't rule it out yet.

Linda Piazza : 5/6/2008 1:25:25 PM

Next potential Keltner target for the SPX is now 1420.71, with the 15-minute chart providing a higher one, 1425.47. I'm a little leery of too grandiose upside targets, though, and wouldn't be surprised to see the SPX drift sideways to lower for a while before we find out next direction anyway. The process of that drifting could erase those targets. I'm listing those potential targets not as upside targets for bulls to aspire to but rather for would-be or current bears to factor in vulnerability up to those levels in their trading plans.

James Brown : 5/6/2008 1:25:13 PM

Coal sector ETF (KOL) is hitting new highs today following yesterday's breakout over minor resistance.

James Brown : 5/6/2008 1:21:52 PM

If you wanted to be more aggressive a May strangle on CSCO with the $28 call and $24 put would only cost about 46 cents. But these options expire in eight days and being out of the money they're eroding fast!

I'm not recommending it... just thinking out loud here.

Jeff Bailey : 5/6/2008 1:20:56 PM

Ding, ding, ding ... you may be correct!

$/yen 104.72 -0.12% ... WKLY Pivot is 104.77.

Linda Piazza : 5/6/2008 1:20:07 PM

The calculated 50% retracement (not just a snapped Fib bracket) of the SPX's drop from its October 2007 high into its March 2008 low is 1416.535.

James Brown : 5/6/2008 1:19:47 PM

Networking titan, Cisco Systems (CSCO), is trading sideways at the $26.00 level. The company reports earnings after the bell. Wall Street is looking for a profit of 36 cents a share.

CSCO appears to have put in a bullish double bottom over the past three months or so. However, I would hesitate to make any bullish bets prior to the earnings report.

Option strikes are available at $1.00 increments. You could try a strangle or a straddle over earnings.

A June straddle at the $26.00 mark would cost about $2.55. While a June strangle with the $28.00 call and $24.00 put would be about $1.02

Linda Piazza : 5/6/2008 1:18:13 PM

This morning, the SPX overshot the potential support on 15-minute closes that was then at about 1401.50 or so. That was potential black-channel support and the black channel usually contains most movements on anything other than particularly volatile moves. Then it turned around, confirming that it had just overshot it by a bit. Just now, it's pushed above the top of the black channel, but not by much. Is it just overshooting the resistance now? Keep on your toes if in bullish trades. Don't let a profit that you've accumulated today be turned into a loss if the SPX should fall back again. There's no sign of that yet, but the SPX is now back to testing its 50% Feb retracement of the decline off the Oct 2007 high into the March 2008 low.

James Brown : 5/6/2008 1:14:37 PM

Noticing that the DDX Disk drive index is up 2.1% and breaking out over its 100-dma.

Jeff Bailey : 5/6/2008 1:13:11 PM

DIA's "Big 10" mixed at 5 up and 5 down. No gainer/loser more than 1%.

Linda Piazza : 5/6/2008 1:13:03 PM

Hmm. When comparing the VIX and the VXV, I note that when the VIX violated its Keltner support that's now at about 18.46, the VXV only barely violated its analogous support at 19.77, and it's now bouncing from that support. I haven't watched this new volatility measure other than a brief glance yesterday and so don't know if that means anything (Such as, the shorter-term VIX was perhaps giving a false signal?) or not.

James Brown : 5/6/2008 1:11:50 PM

Another stock bouncing on bad news is homebuilder D.R.Horton (DHI). Shares slipped to $15.35 but are currently up 3.3% to $16.51 and painting a bullish engulfing candlestick today.

DHI reported earnings this morning. Wall Street was looking for a loss of 39 cents. DHI delivered a loss of $4.14. Revenues plunged about 38%.

The company said its backlog of homes to build is around 8,950. Compared to the same period last year, where the backlog was almost 17,000 homes.

Today's rally is probably a lot of short covering. The most recent data listed short interest at 12.5% of the 285 million shares outstanding.

Jeff Bailey : 5/6/2008 1:11:31 PM

Other majors (SPY, OEX, QQQQ) above.

Jeff Bailey : 5/6/2008 1:10:54 PM

Hmmm ... DIA just under its WKLY Pivot. What's up with that?

Linda Piazza : 5/6/2008 1:09:50 PM

Jane, did you know that there's now a three-month SPX volatility index, the VXV? According to the CBOE, it's "designed to be a constant measure of 3-month implied volatility of the S&P 500." They intend it to be less volatile, smoothing out some of the erratic movements of the VIX. I was reading about it yesterday, but haven't had time to check it out beyond a brief glance at an intraday chart.

Keene Little : 5/6/2008 1:08:46 PM

Short term charts are starting to show some bearish divergences at today's new highs so it warns of waning momentum. Tighten up stops if you're long and just day-trading this.

Jeff Bailey : 5/6/2008 1:06:40 PM

EIA: China '08 Oil Use Seen At 8 Mln B/D, +5.5% On Yr Ago

Jeff Bailey : 5/6/2008 1:06:01 PM

EIA: '08 Global Oil Seen +1.2 Mln B/D, Despite OECD Dip.

James Brown : 5/6/2008 1:05:35 PM

You're right, Jane. That is surprising (VIX:ES relationship).

Jeff Bailey : 5/6/2008 1:05:15 PM

EIA: '08 US Diesel Prices to be 37% higher than '07

Linda Piazza : 5/6/2008 1:04:39 PM

The SPX's 15-minute 9-ema has now risen to 1411.68; the OEX's, 650.87.

James Brown : 5/6/2008 1:04:11 PM

Investors don't seem to care that Wachovia (WB) is restating its recent earnings report. The company is raising its first-quarter loss from 20 cents a share to 36 cents a share.

The stock dipped to $29.00 this morning, near its 10-dma, and bounced sharply. WB is currently up 1.1% to $30.11.

When investors are buying bad news that's a tough market (or sector) to be short.

Jeff Bailey : 5/6/2008 1:03:44 PM

EIA updating various supply/demand forecasts.

Linda Piazza : 5/6/2008 1:02:43 PM

The VIX is 18.35, having dropped below that potential support on 15-minute closes now at 18.47. Without a strong and immediate bounce, it looks as if it could be headed toward the 18.18 zone.

Jane Fox : 5/6/2008 1:02:06 PM

These two charts never cease to amaze me. The bottom chart is the S&P futures, ES and the top chart the VIX, a collection of SPX ATM options. You'd think these two would be related but I am simply amazed at how close the relationship is day after day after day. Link

Keene Little : 5/6/2008 12:58:33 PM

We're getting the stair-stepping higher in the broader averages so it remains bullish. Look for at least another small consolidation and then a push higher. Then it could be ready for a deeper pullback. If at any time the lows of the small pullbacks get taken out then we'll now the high for now is in. In the meantime the trend is up.

Keene Little : 5/6/2008 12:54:52 PM

Along with the continuing rally in oil, the Energizer Bunny oil stocks keep heading higher as well. After a nice setup for a short play at the high on April 22nd, it has obviously been busted with another high for OIX. But once again it is approaching the broken uptrend line from August 2007, currently near 947. Link

Whether it will stop it again, and whether it will be the final high, can't be known yet. But watch for failure as another setup to test the short side. As with oil and USO, the new high is showing bearish divergence (weakening momentum).

Linda Piazza : 5/6/2008 12:54:16 PM

The SPX tests potential resistance on 15-minute closes at 1415.38. It's a little above that as I type, but the 15-minute period has a while to run yet. The OEX has yet to test comparable resistance, now at 653.81.

Linda Piazza : 5/6/2008 12:50:41 PM

Equity bulls need to know that the VIX has reached potential support on 15-minute closes near 18.40. The VIX has been stabilizing above that potential Keltner support for more than 30 minutes now and is testing it again, with the VIX at 18.52 as I type. A bounce from here in the VIX, just as the SPX is testing opposite resistance, would not be what SPX bulls want to see. They want this VIX support lost.

Jane Fox : 5/6/2008 12:48:45 PM

The DOW futures is the only market to not break its overnight low. Link

Jane Fox : 5/6/2008 12:47:11 PM

Internals are now in sync and bullish. Even the TRIN is bullish at 0.74. Link

Linda Piazza : 5/6/2008 12:39:11 PM

The SPX's 15-minute 9-ema is now 1409.08; the OEX's, about 649.60.

Jeff Bailey : 5/6/2008 12:37:30 PM

iShares Lehman 20-year (TLT) $91.44 -0.18% ... YTD, excluding dividends, TLT down 1.7%. Q2 TD -4.61%.

Jeff Bailey : 5/6/2008 12:35:49 PM

The longer-dated 30-year Yield ($TYX.X) up 2.2 bp at 4.603% ... continues to battle its 200-day SMA.

Keene Little : 5/6/2008 12:31:26 PM

Based on the corrective pattern of the pullback from Friday's high and today's strong bounce back up I'd say we're either going to get a larger correction to the downside (so a sharp reversal back down when this bounce finishes) or we're going to head for new highs from here. Even if it's the former (another drop lower) it means we haven't seen the high for the rally off the March low yet. If it rallies directly from here then SPX's 200-dma at 1431 should be the target.

Jeff Bailey : 5/6/2008 12:26:01 PM

SWC $14.23 +4.94% ...

RIO $40.93 +1.53% ...

Jeff Bailey : 5/6/2008 12:23:25 PM

ACH $43.96 +1.97% ... might have a $1 upside in it?

Linda Piazza : 5/6/2008 12:22:57 PM

From the SPX's current 1413.10 level up to 1405.05, potential resistance exists on 15-minute closes. Just as I warned bears to be careful on that daily 10-sma test, I warn bulls now to have their profit-protecting plans in place, just in case.

Jeff Bailey : 5/6/2008 12:22:37 PM

Alcoa (AA) $37.73 +2.27% ... reclaims its 04/07 earnings close.

Jeff Bailey : 5/6/2008 12:18:49 PM

Sector action as changed notably since 10:00 ...

Jeff Bailey : 5/6/2008 12:17:42 PM

5-year right at its WKLY Pivot ... I feel, based on observation, great pressure building in these markets.

Keene Little : 5/6/2008 12:15:37 PM

No pullback yet and the move up is stretching to the upside. This is either potentially much more bullish as we'll watch it stair-step higher or it will merely be a sharp upside correction before reversing just as sharply. It's too early to tell but certainly this is looking more bullish than bearish and I would not be looking to short it. Look for pullbacks to get long as long as the new highs are not showing bearish divergences on the short term charts (which they're not).

Jeff Bailey : 5/6/2008 12:15:17 PM

12:00 Internals found at this Link

Linda Piazza : 5/6/2008 12:03:21 PM

The SPX's support at its 15-minute 9-ema is now confirmed by a new high. Equity bulls now want to see a continued pattern of support on 15-minute closes at a rising 15-minute 9-ema. That's now at about 1406.50. I still would remain watchful and a bit wary if in bullish trades.

Jeff Bailey : 5/6/2008 12:01:13 PM

USO Daily interval bar chart, with futures expiration benchmarks Link

Keene Little : 5/6/2008 11:57:32 AM

The move up from this morning's low looks impulsive now--it's a 5-wave move. We should see a little deeper pullback soon but I'm thinking we've seen the low for now and we'll get another rally leg after the pullback (look for 38%-62% retracement of this morning's bounce).

Jeff Bailey : 5/6/2008 11:56:15 AM

Visa (V) $87.71 +3.13% ... post-ipo high here.

Linda Piazza : 5/6/2008 11:53:39 AM

The OEX is following the same price pattern as the SPX today, but isn't as strong as the SPX on a Keltner basis. It hasn't closely approached the potential resistance on 15-minute closes at 649.66, analogous to the SPX's approximate 1406.50 level. You'd like to see the generals outperforming.

Jeff Bailey : 5/6/2008 11:53:02 AM

USO $98.54 +1.86% Link ... $0.50 box to match futures.

Days to cover at 04/15/08 rose to 2.655 Link

Jeff Bailey : 5/6/2008 11:49:30 AM

Bank of America saying today that it isn't tyring to slip out of its $4.1 billion acquisition of Countrywide.

BAC $38.87 -0.25% Link ...

CFC $5.26 -1.86% Link ... tough to tell if MARKET believes them.

Keene Little : 5/6/2008 11:48:13 AM

USO could soon be setting up the next shorting opportunity (the last one from last week got stopped out with a push to a new high). Today's rally has pushed it up to the Fib projection at 98.62 and is approaching the trend line along the highs from last year and another trend line along the recent highs since March, both just above 99. A throw-over finish would have it rallying to just above 100. Link

It's a bit early to take a stab at this since we have no evidence yet that it will peak but this is the setup to watch for price failure and a short entry.

Jane Fox : 5/6/2008 11:44:55 AM

Crude's daily high so far - $122.49

Jeff Bailey : 5/6/2008 11:41:24 AM

I hear you there James. I love my 2500 Ram Cummins diesel, but didn't think diesel would cost more than unleaded. Was running numbers the other night to see if it wasn't worth giving up the 18mpg diesel for a 12mpg gasoline to pull the trailer.

Linda Piazza : 5/6/2008 11:40:46 AM

I wasn't so sure that the SPX test of the 15-minute 9-ema was finished yet, and it apparently wasn't. The SPX's current 15-minute candle sits on it, with that moving average now at about 1404.87 and the SPX 1404.91 as I type. Further potential support on 15-minute closes is 1403.52 and then 1399-1400.40. Potential resistance on 15-minute closes is 1406.47-1407.77.

James Brown : 5/6/2008 11:35:49 AM

I know that some of us here have already talked about the need to downgrade(?) our vehicles... but I wasn't expecting a 20% drop in value for SUVs so soon...

Jeff Bailey : 5/6/2008 11:35:47 AM

One point of interest/focus in the FNM earnings may be found on Page 4 and rate of change in Fair value losses, net

James Brown : 5/6/2008 11:33:00 AM

Uh-oh... I may have waited too long!

I've been planning to sell my full-sized SUV for months and downgrade to something more fuel-efficient. However, I don't drive that much so it hasn't been a priority.

One of my concerns was that as gasoline prices rise the market for used-SUVs would plummet. It looks like it has already happened.

An article in the Boston Globe today is discussing this very topic. Here's an excerpt:

... consumers .... are flooding the market with used SUVs, trying to trade in hulking Hummers for compact Corollas, and getting thousands of dollars less than they would have just a few months ago. In April, the average used SUV took more than 66 days to sell, at a 20 percent discount from vehicle valuation books , such as Kelley Blue Book, compared to 48 days and a 7.8 percent discount a year earlier, reported CNW Marketing Research, an automotive marketing research company.

Linda Piazza : 5/6/2008 11:31:41 AM

As I suspected it would do (11:17:15 post), the SPX has pulled back to test its 15-minute 9-ema for support. So far, that average, now at 1404.79, is holding as support into this 15-minute close. I'm not sure the test is over just yet.

Keene Little : 5/6/2008 11:31:06 AM

The SPX 30-min chart shows price found support this morning at the 100-pma (black moving average) and the uptrend line from April 15th. It then ran into resistance at its downtrend line from Friday's high. So we'll find out soon whether the downtrend line or the uptrend line breaks first, so support near 1400 and resistance now near 1406. That should be our clue for at least the short term. Link

Jeff Bailey : 5/6/2008 11:30:00 AM

FannieMae's Earnings Press Release ... (.pdf file) Link

Jane Fox : 5/6/2008 11:26:22 AM

Crude is trying once again to break $122.bl and this time it did. $122.12

Jeff Bailey : 5/6/2008 11:25:13 AM

James (11:18:45) ... Yes, FNM Link very negative/cautiious. At least from what I've read in their press releases. Cut their dividend too.

Jeff Bailey : 5/6/2008 11:22:07 AM

Barrick Gold (ABX) $39.76 +2.13% Link ... Earnings Press Release Link

Consensus was for EPS of $0.60 on Revenue of $2.24B

Jane Fox : 5/6/2008 11:17:48 AM

It looks like SPX's 1400 is becoming the classic resistance turned support. Link

James Brown : 5/6/2008 11:18:45 AM

Keene, you would think that would be the case... but FNM is still expecting "severe" weakness in the housing market. It doesn't sound like market conditions are improving for them. The company's forecast is for another 7% to 9% drop in home prices in 2008...I am assuming on top of the recent -7% drop in the latest report.

Linda Piazza : 5/6/2008 11:17:15 AM

The current SPX 15-minute candle looks as if it might end up being a potential reversal signal, so bulls who bought the 10-sma test don't want that reversal confirmed. If the SPX does pull back, they want to see support now on 15-minute closes at the 15-minute 9-ema, now at 1404.64. For the OEX, that average is 648.24.

Jeff Bailey : 5/6/2008 11:15:37 AM

Crude oil continues to march higher. Today, an analyst at Goldman Sachs sees the potential for a "super-spike" to $150-$200 a barrel in the next six months to two years.

James Brown : 5/6/2008 11:14:42 AM

United Therapeutics (UTHR) is rebounding. The stock dipped toward broken resistance and what should be support near $90.00 this morning.

Bulls bought the dip at $89.93. I could seeing buying calls right here with a tight stop either under today's low or under the 100-dma around $88.90. Personally, I'd probably give UTHR just a little bit more room and stick a stop just under $88.00.

There looks like some resistance near $96.50 and then probably again around $100. The P&F chart is bullish with a $112 target.

My biggest frustration or challenge with a trade in UTHR would be the relatively wide spreads in the option prices.
chart: Link

Keene Little : 5/6/2008 11:07:26 AM

James, let me guess. FNM says they've seen the worst and all the bad news is now behind them. It's amazing how many times we hear bad news (2/3 write-down in their portfolio value) which is then accompanied with "yea but this should be the last of it, it's a good time to buy."

Linda Piazza : 5/6/2008 11:05:35 AM

The daily charts now show lots of indices bouncing off their 10-sma's. That includes the SPX, of course, but I would urge all to retain a bit of skepticism just yet. On 4/09, the SPX tested its 10-sma, even piercing it a little, but then managed a close at that moving average. On 4/10, it bounced. But the 10-sma's support was ultimately to fail, and on 4/11, the SPX plunged down toward stronger support at its 30-sma, with that test providing a second touchpoint for the rising trendline off the March low. As I said earlier, the bounce attempt was a given, but we just aren't sure still quite yet what the outcome will be. So far, so good, but the day and the week are far from over.

James Brown : 5/6/2008 11:05:10 AM

Fannie Mae (FNM) is reversing sharply... from -6% to +4% following the company's conference call this morning...

Keene Little : 5/6/2008 10:54:43 AM

Two equal legs up in this morning's bounce for SPX would be at 1406.19 and then gap close at 1407.76 so those are two upside levels to watch if it can first get past 1405.

Linda Piazza : 5/6/2008 10:52:54 AM

If you're studying the 30-minute rather than the 15-minute chart, the SPX's potential resistance on 30-minute closes is 1404.78, so I'd remain wary about rollover potential at least until the SPX is maintaining 30-minute closes above that level. With that said, we don't know what's going to happen. This current action is the reason that I suggested that bears have profit-protecting plans in mind in case there was a test of the 10-sma. The bounce was a given; what happens afterward was not, and may not yet be, either.

Jane Fox : 5/6/2008 10:43:07 AM

THe 2nd try at $122 failed as well. That may be all we get today.

Jane Fox : 5/6/2008 10:39:31 AM

Crude tagged $122.00/bl and retreated but is now taking another run at it.

Linda Piazza : 5/6/2008 10:38:09 AM

So far, potential OEX resistance up to 648.69 on 15-minute closes continues to hold. Nearest resistance is at 647.29.

Linda Piazza : 5/6/2008 10:36:38 AM

So far, SPX resistance ranging up to 1403.31 holds on 15-minute closes.

Keene Little : 5/6/2008 10:33:04 AM

Yesterday's lows near 1405 should be the extent of any bounce this morning if there's to be more downside. Any recovery above 1405 would be potentially bullish.

Jeff Bailey : 5/6/2008 10:30:56 AM

This would then leave us long 100 shares of SWC @ $18.00. Current stop is $12.80.

Jeff Bailey : 5/6/2008 10:29:44 AM

Swing trade put exit alert! ... for the one (1) Stillwater Mining SWC May $17.50 Put (SWC-QW) at the bid of $3.60.

SWC $13.85 +2.13% ...

Jane Fox : 5/6/2008 10:28:09 AM

I think it is time to get back into Gold Link If you buy the ETF GLD you can put a stop just under yearly lows at 83.57. Link

Jane Fox : 5/6/2008 10:25:18 AM

Ad Volume is falling but notice the AD ratio, it is climbing and supporting the bullish VIX. It is nice to have all the internals in sync but 2 out of 3 ain't bad (as Meatloaf would say). Link

Linda Piazza : 5/6/2008 10:23:56 AM

The TRAN has risen to test the trendline from Friday's low through yesterday's two swing lows. It's just a little above that and above the 15-minute 9-ema, now at about 5266.70. SPX, OEX and Dow bears want this to be resistance on 15-minute closes.

Jane Fox : 5/6/2008 10:22:46 AM

Vix is falling now and making new daily lows telling me the bulls are getting stronger. ES is also making new daily highs.

Linda Piazza : 5/6/2008 10:21:06 AM

So far, the SPX is finding resistance on 15-minute closes at potential resistance that now ranges from 1401.10-1403.33 on 15-minute closes. The SPX isn't through testing it yet, though.

Jeff Bailey : 5/6/2008 10:20:52 AM

10:00 Internals found at this Link

Note: It would currently take a closing session measure of 50.00% or higher for the NYSE 5-day NH/NL ratio to reverse back higher.

Jane Fox : 5/6/2008 10:16:43 AM

Since I am now trading Crude I can give you a running commentary. It has now hit $122.00/bl.

James Brown : 5/6/2008 10:15:25 AM

Actually, I think we've heard this before from Goldman Sachs... but it's been months since their last warning about sky-high oil prices so it's old news.

Linda Piazza : 5/6/2008 10:15:09 AM

The SPX tests potential resistance on 15-minute closes that ranges up to 1404; the OEX, up to 648.77.

James Brown : 5/6/2008 10:14:31 AM

CNBC reporting that Goldman Sachs sees the potential for a "super spike" in oil prices into $150-$200 a barrel in the next 6 to 24 months.

I think we've heard this before...

Just a week or two ago it was a Canadian bank predicting $200 oil

James Brown : 5/6/2008 10:12:26 AM

Casino operator M G M Mirage (MGM) is trading sideways in spite of missing earnings estimates by 3 cents a share this morning. The stock has been in a bearish trend for the last seven months and shares dipped to a new 52-week low this morning before bouncing.

James Brown : 5/6/2008 10:08:52 AM

Apple Inc. (AAPL) trading sideways this morning around $183ish.

Yet another analyst firm raised their price target on AAPL but this time it was only raised to $200.

Meanwhile Vodaphone (VOD) announced it was launching the AAPL iPhone in 10 more countries this summer. (Australia, Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa, and Turkey)

James Brown : 5/6/2008 10:05:50 AM

Interline Brands (IBI) is also plunging on negative earnings news. The company missed estimates by 3 cents and guided lower. Shares are down 16.6% to $16.26 hitting new multi-year lows.

Robert Ogilvie : 5/6/2008 10:05:14 AM

NYSE EuroNext (NYX) is attempting to break out above its resistance at 70.45 from 4/8/08. The stock is currently up 1.46 at $69.53. The stock is currently hanging onto the 89 daily-sma.

Linda Piazza : 5/6/2008 10:03:58 AM

The A/D line hit that support I mentioned earlier and is attempting to steady there. Equity bears now want the A/D line to form a pattern of finding resistance at its 15-minute 9-ema, now just above -804: Link

James Brown : 5/6/2008 10:03:52 AM

Sara Lee (SLE) is down about 7% around $13.73. The stock is testing its recent April low and its 50-dma. The company reported earnings this morning that were 2 cents worse than expected. Management also issued an earnings warning going forward.

Jane Fox : 5/6/2008 10:03:06 AM

AD line is a bearish -1040 but an improvement from earlier when it was at -1194.

Linda Piazza : 5/6/2008 10:01:19 AM

The VIX broke above potential resistance at 19.29-19.34 on 15-minute closes. Equity bears want to see it maintain support on 15-minute closes at that level on any pullbacks.

Jeff Bailey : 5/6/2008 10:00:57 AM

June Nat Gas' 21-day SMA now at $10.64.

James Brown : 5/6/2008 10:00:26 AM

Martin Marietta (MLM) is showing relative strength this morning.

The stock is up 1.6% to $113.85 and painting a bullish engulfing candlestick in spite of negative news. The company just reported earnings this morning that missed estimates by 14 cents.

The stock is trading above its 100-dma and nearing resistance in the $115-116 zone.

This looks like short covering on the news. The most recent data listed short interest at almost 28% of the 37.1 million-share float.

FYI: The P&F chart is bullish with a $136 target.

Jeff Bailey : 5/6/2008 9:59:00 AM

PBT's most recent distribution and production/reserve report Link

Keene Little : 5/6/2008 9:57:41 AM

SPX dropped within a point of potential support at 1396. This is of course the February 1st high and acted as resistance for so long so it would be natural to see it act as support. The 30-min 100/130 moving averages are at 1394.25 and 1397.90. The 130-pma at 1394 is the MA that supported the pullback on May 1st.

Jeff Bailey : 5/6/2008 9:57:06 AM

Permian Basin Trust (PBT) $23.11 +2.07% ... has seen a sharp pullback from recent highs of $27.50.

Linda Piazza : 5/6/2008 9:56:33 AM

So far, the SPX bounces from its test of the daily 10-sma, but bounces only a little. The 15-minute chart is showing the possibility that, without a strong whoosh higher, the SPX is likely to find resistance on 15-minute closes somewhere between 1401.50-1404.50 if it does continue bouncing. So, without that strong whoosh, it looks likely that the SPX will attempt a bounce but then perhaps turn back to retest the 10-sma again. That's just a possibility and not a given.

Jeff Bailey : 5/6/2008 9:55:32 AM

Brent Crude At Record $119.85/bbl, Up $1.86

Jeff Bailey : 5/6/2008 9:55:09 AM

RBOB Gasoline Hits Record $3.1023/gallon

Linda Piazza : 5/6/2008 9:47:47 AM

At 645.52 as I type, the OEX is hitting its daily 10-sma and is slightly below potential support on 30-minute closes near 645.95. This moving average has been a fair marker for potential support for the OEX over the last ten days, although the OEX has a couple of times formed 30-minute closes just below it before bouncing. Bears should therefore be wary, keeping on their toes in case a too-big bounce gets started. They would want any bounce to be turned back from the 647.80-649 zone.

James Brown : 5/6/2008 9:47:06 AM

Speaking of homes... most of the builders are down about 1% to 2% this morning yet the DJUSHB index is up 1.5%....

James Brown : 5/6/2008 9:45:54 AM

....Earlier today I heard that 40% of all home sales in certain areas of California are foreclosures...

Jane Fox : 5/6/2008 9:42:38 AM

Crude just hit $121/bl

Linda Piazza : 5/6/2008 9:42:33 AM

Bulls want to see the SPX bounce up above 1403.50 or at least 1401.83 before the close of this 15-minute period. Bears do not. It looks, so far, as if bears will get their wish, but they need to keep on their toes as the daily 10-sma is approached.

James Brown : 5/6/2008 9:42:31 AM

FNM's brother Freddie Mac (FRE) is down 5.7% and breaking down under its short-term trend of higher lows.

James Brown : 5/6/2008 9:40:46 AM

Fannie Mae (FNM) is down 6.2% and breaking under its 50-dma.

The company just reported a $2.2 billion loss in its first quarter as home values plunged faster than they expected. FNM says they plan to raise $6 billion in new capital and cut their dividend.

They will immediately offer $4 billion in stock and complete the remainder down the road. (source: AP)

FNM said the "estimated fair value" of their portfolio plunged 66% from $35.8 billion in December to $12.2 billion in March.

Management still expecting major weakness in the U.S. housing market.

Linda Piazza : 5/6/2008 9:39:07 AM

I guess it won't take long to decide if the SPX is going to head toward its daily 10-sma, will it? When my charts updated this morning, that's now showing up at 1397.02. Bears need to keep updating their profit-protecting plans. I'm far from the only person who ever noticed the SPX's old pattern. Some bulls out there are just waiting for the opportunity to buy as the 10-sma is approached. Be aware, though, that if that moving average doesn't hold, a test of the 1373-1383 zone is possible, with various forms of support there. A test of the 30-sma now at 1369.55 is not impossible, either.

Linda Piazza : 5/6/2008 9:34:35 AM

Keltner outlook on the A/D line: The A/D line is currently -733, headed toward slight potential support on 15-minute closes at -820. Potentially stronger support is near -1020.

Linda Piazza : 5/6/2008 9:33:34 AM

The SPX heads right down to potential support on 15-minute closes that currently has been pushed down to 1402.18. If the SPX violates that quickly this morning, remember that it can still bounce back above that support zone by the close of the first 15-minute period, with the support essentially holding, so bears need to remain on their toes.

James Brown : 5/6/2008 9:32:20 AM

The USO was briefly trading above $97.00 in pre-market action...

Linda Piazza : 5/6/2008 9:31:30 AM

SPX futures are lower this morning as the SPX continues what bulls hope is a reinvention of an old rally pattern: a strong gain followed by 2-5 days of sideways/sideways-down consolidation into the 10-sma (or, my preference, the 9-ema). Then, they hope support will be found there on daily closes and the SPX will bounce and repeat the whole pattern. That's what happened during the strongest rally days from last year.

Beginning in Thursday night's Wrap, I warned that the SPX might need to pull back within its rising price channel. Yesterday morning just before the open, I warned that the SPX might have begun that old pattern and might be pulling back toward the 10-sma, so these weak futures don't surprise me. They also don't prove yet that the SPX will pull back all the way to the 10-sma, now at 1394.62, or, conversely, that it will stop there if it does pull back that far. I do warn bears to have their profit-protecting plans in order if that level is approached.

The SPX's 30-minute chart shows potential support at 1404-1405.40, but if the SPX gaps below that, the 15-minute chart suggests that you watch for a steadying near 1402.44-1403.63 on 15-minute closes. If the SPX gaps below that, too, then all those levels are presumed potential resistance.

Keene Little : 5/6/2008 9:22:08 AM

Equity futures sold off steady from the overnight highs near 3:00 AM and we'll start the day with a gap down. If the wave pattern was a 1-2, 1-2 count to the downside from Friday then this morning will be the start of a 3rd of a 3rd wave down in which case don't look for gap closure but instead the market will drop hard and then stair-step lower. But if we're in a corrective pattern to the downside then we should see support not much lower (perhaps SPX 1396, DOW 12875-12900) and then a big bounce back up.

Jane Fox : 5/6/2008 9:17:33 AM

NEW YORK (MarketWatch) -- India is reportedly considering a ban on futures trading in food commodities, as the government struggles to curb soaring inflation and the rising cost of food has become a major international concern.

India's finance minister Palaniappan Chidambaram said Monday that he was considering a blanket ban on trading in food futures, according to a report in The Financial Times.

Chidambaram said that governments across Asia share his worries over speculation in the commodities markets, the FT reported.

India is "facing a very grave crisis on the food front," the minister said on the sidelines of the Asian Development Bank's annual meeting in Madrid, according to the FT.

Jane Fox : 5/6/2008 9:16:01 AM

Gold is into a nice little rally but I need it to break back above support at 876 because once a support is broken it usually turns into resistance. MACD is not telling me the break is imminent either. Link

Jane Fox : 5/6/2008 9:11:25 AM

Crude is now trading at $120.47 and climbing.

Jane Fox : 5/6/2008 9:10:00 AM

Here are your overnight charts. These charts are the overnight action of the futures on the four major cash indexes we watch here in the monitor.

ER2 is the symbol for the Russell 2000 futures
NQ is the symbol for the NDX futures
ES is the symbol for the S&P futures
YM is the symbol for the DOW futures

The cyan lines are the previous day highs and lows and the magenta lines are the overnight highs and lows.

This is not what you would call a bullish overnight session where all markets except NQ have broken previous day lows.

I do not see any economic news that will give us volatility to make today a good day trading day. Link

Jane Fox : 5/6/2008 8:50:05 AM

WASHINGTON (MarketWatch) -- Mortgage-finance giant Fannie Mae reported a much greater-than-expected first-quarter loss of $2.2 billion, as credit-related expenses took a bite out of its bottom line, and said it's planning to raise $6 billion in new capital.

On a per-share basis, Fannie Mae lost $2.57 in the first quarter, much more than the 81-cents-a-share loss expected by Wall Street analysts surveyed by FactSet. In the same period a year ago, Fannie Mae earned 85 cents a share.

The company said fair value losses and credit-related expenses due to adverse market conditions hit its first-quarter earnings. The planned new capital, Fannie Mae said, will enable the company to "maintain a strong, conservative balance sheet, enhance long-term shareholder value and provide stability to the secondary mortgage market."

Fannie's Chief Executive Officer Daniel Mudd said the first quarter saw heightened volatility in the secondary mortgage market, credit spreads that hit 22-year highs and a faster-than-expected drop in home prices

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