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Jeff Bailey : 5/9/2008 11:17:58 PM

DIA went out at $127.50, and $1.17 below its WKLY S1. Shouldn't go much above next week's WKLY R1.

DIA's WKLY pivot levels are ... $125.11, $126.31, Piv= $128.39, $129.59, $131.67.

I don't calculate the DJX.X pivot levels, but they'll be close with DJX.X finishing 127.46.

Jeff Bailey : 5/9/2008 11:12:12 PM

SPY went out at $138.90, and $0.17 below its WKLY S1. Shouldn't go much above next week's WKLY R1.

SPY's WKLY pivot levels are ... $136.10, $137.50, Piv= $139.85, $141.25, $143.60.

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

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

Jeff Bailey : 5/9/2008 7:10:10 PM

While not a NASDAQ-listed stock, I do see a notable spike in TRINQ just prior BRK.A trading its 01/16/08 low. TRIN jumped, then traded its session high of 1.88 between 01:30-35 PM EDT.

Jeff Bailey : 5/9/2008 6:42:02 PM

FDIC Approves Assumption of Insured Deposits of ANB Financial ... FDIC Press Release Link

Jeff Bailey : 5/9/2008 6:32:25 PM

Can't get to ANB's webpage at this time. Probably a server overload.

Jeff Bailey : 5/9/2008 6:24:17 PM

FDIC closes ANB Financial; Bank's assets total $2.1 billion.

Jeff Bailey : 5/9/2008 6:23:39 PM

All equity futures markets in U.S. closed.

Jeff Bailey : 5/9/2008 6:22:12 PM

FDIC Closes Arkansas Bank

Jeff Bailey : 5/9/2008 5:53:27 PM

DXY's 04:00 tick was 73.031, which is down -0.60% from yesterday's 04:00 tick.

Jeff Bailey : 5/9/2008 5:49:46 PM

No S&P earnings tabulations ... sorry.

Jeff Bailey : 5/9/2008 5:48:37 PM

Defense contracts reported.

ITT gets $26.9 million modification to previous contract.

RTN gets $10.8M modification to previous contract

BAE Systems gets new $10M contract.

OSK get $8.29M modification to previous contract.

BA gets $5.58M modification to previous contract.

GE gets new $9.44M contract.

RTN gets new $6.54 million contract.

Jeff Bailey : 5/9/2008 5:36:53 PM

You'd think by looking at their charts that BFR and GGAL were both Argentinian banks.

Jeff Bailey : 5/9/2008 5:34:45 PM

Correction to my 05:17:05 ... Banco Frances' stock symbol is NYSE:BFR

Jeff Bailey : 5/9/2008 5:31:44 PM

Argentina's Grupo Financiero Galicia (GGAL) 1Q net ARS36.2M; -19.1% (see also 05:17:05)

Jeff Bailey : 5/9/2008 5:24:58 PM

WLB's earnings press release Link

Jeff Bailey : 5/9/2008 5:23:10 PM

WLB's Q1 loss on $9.6M in unusual items.

Jeff Bailey : 5/9/2008 5:22:11 PM

Westmoreland Coal (AMEX:WLB) $15.00 (unch) ... no ticks on headline numbers.

Jeff Bailey : 5/9/2008 5:21:09 PM

Still not seeing S&P update on quarterly earnings report. Will give it about another 15 minutes then I've got to run.

Jeff Bailey : 5/9/2008 5:19:06 PM

Elixir Pharma withdraws IPO. The company, which develops drugs for treatment of diabetes saying it withdrew due to market conditions.

Jeff Bailey : 5/9/2008 5:17:05 PM

Argentina's Banco Frances 1Q net ARS74.3M Vs. ARS68.4M year ago.

BBVA $6.06 -3.65% ...

Jeff Bailey : 5/9/2008 5:14:00 PM

Might check out AMEX:WZE ... headline numbers look compelling. Q1 rev more than doubles, Q1 net just about triples.

Jeff Bailey : 5/9/2008 5:09:59 PM

Global Ind. (GLBL) has been on the move of late. Raymond James upgrading here.

GLBL $18.96 +0.21% ...

Jeff Bailey : 5/9/2008 5:08:20 PM

I couldn't figure out why anyone in their right mind would be buying back 4.75% debt. Now it makes sense.

Jeff Bailey : 5/9/2008 5:07:32 PM

Will note here that the note conversion will expire on 6/06/08. The current conversion price of the notes is $78.0275

Jeff Bailey : 5/9/2008 5:06:34 PM

Ah ...

Jeff Bailey : 5/9/2008 5:06:02 PM

Amazon.com redeeming $500,000,000. That leaves $399,000,000 aggregate principal outstanding.

Jeff Bailey : 5/9/2008 5:03:25 PM

Amazon.com announing it has redeemed a portion of its 4.75% convertible subordinated notes.

AMZN $72.38 -0.56% ... $71.90 extended.

Jeff Bailey : 5/9/2008 4:58:43 PM

UAUA $13.75 +1.55% ...

Jeff Bailey : 5/9/2008 4:58:06 PM

UAL saying it will record a $29.2M 2Q gain from litigation settlement.

Just note when headline numbers are released the one-time gain here.

Jeff Bailey : 5/9/2008 4:56:28 PM

Paul Allen sells $35.3M in Dreamworks stock.

DWA $30.13 +0.50% ... $29.72 extended.

Jeff Bailey : 5/9/2008 4:53:50 PM

CNBC saying Greenspan modifies comments on US credit crisis.

Jeff Bailey : 5/9/2008 4:52:42 PM

Broadcom changes annual meeting to June 19.

BRCM $26.14 (unch) ...

Jeff Bailey : 5/9/2008 4:48:00 PM

PEIX to file 1Q report by 5/19/08.

Jeff Bailey : 5/9/2008 4:47:25 PM

Pacific Ethanol (PEIX) delayes 1Q 2008 results.

Jeff Bailey : 5/9/2008 4:45:55 PM

Colombia's Ecopetrol 1Q net jumps 174% on year to COP2.29 Trillion.

Jeff Bailey : 5/9/2008 4:42:35 PM

Wal-Mart De Mexico saying April's same-store sales up 1.3% on year.

Jeff Bailey : 5/9/2008 4:38:14 PM

CME's Nikkei 225 stock index futures settle down 300 points on yen strength.

Jeff Bailey : 5/9/2008 4:33:06 PM

E*Trade saying it will exit the retail mortgage origination business.

Jeff Bailey : 5/9/2008 4:32:16 PM

Foundry Networks saying it has received notice from the SEC that it has terminated its stock-option grant probe.

FDRY $12.72 +1.92% ... $12.70 extended.

Jeff Bailey : 5/9/2008 4:25:51 PM

FedEx Updated Guidance Press Release Link

Jeff Bailey : 5/9/2008 4:18:02 PM

FedEx citing fuel prices as it cuts its fiscal fourth-quarter earnings for the period ending May 31 to $1.45 to $1.50 a share, which is down from its previous outlook of $1.60 to $1.80. The company saying fuel expenses have jumped $100 million, or 7% since making its last earnings forecast, and have outpaced its fuel surcharges.

Jeff Bailey : 5/9/2008 4:12:55 PM

United Parcel (UPS) $70.29 -1.09% ... $69.30 extended.

Jeff Bailey : 5/9/2008 4:12:18 PM

Fedex Corp. (FDX) $90.37 -3.04% ... darts lower on updated guidance. $87.25 extended.

Keene Little : 5/9/2008 4:11:14 PM

On the daily chart of SPX you can envision a small bounce Monday/Tuesday to create a right shoulder of a H&S top (left shoulder at the high on April 28th). The downside objective from that would be 1340 and could happen before options expiration. A rally above 1400 could lead to an opex run higher.

Jeff Bailey : 5/9/2008 4:08:25 PM

At its 04:00 tick, SPY was, was, was $139.00 on the button.

9 minute to go ...

Keene Little : 5/9/2008 4:06:34 PM

The SPX daily chart is showing it bounced between support from its uptrend line from March and resistance at its downtrend line from October. It's also at its 38% retracement of the October-January decline (1387). Daily chart: Link

If it can push higher on Monday it will face resistance at its downtrend line near 1394 and its broken uptrend line along the lows since April 22nd, currently near 1397. That retest could set up another leg down in its decline, shown in pink on the 60-min chart: Link . If it drops immediately below 1384 on Monday then things could turn bearish quickly.

Linda Piazza : 5/9/2008 4:03:20 PM

The SPX is ending the day with a red candle, one that has a short lower shadow. Any lower shadow suggests some buying, so is better for those with bullish hopes than a candle with no lower shadow, but it doesn't promise gains Monday.

The weekly candle is ugly, very nearly but not quite a classic bearish engulfing candle and that doesn't speak well for bullish hopes next week.

Jeff Bailey : 5/9/2008 4:00:06 PM

BIX -0.35%, BKX.X -0.68%, XBD.X -0.25% and IUX.X -2.11%

James Brown : 5/9/2008 3:59:23 PM

Traders might want to take some profits in our JOYG play. The stock hit $79.31, which is a new high but not quite our target at $79.50.

Jeff Bailey : 5/9/2008 3:55:20 PM

Nymex June Heating Oil (ho08m) was spectacular today and darned near challenged its 04/09/08 4.00% gain by settling up $0.1262, or +3.60% at $3.6360.

Linda Piazza : 5/9/2008 3:51:07 PM

VIX at 19.55, rising quickly right now as the SPX hit potential resistance on 15-minute closes now near 1391.42 and turned back.

Keene Little : 5/9/2008 3:49:50 PM

The bulls had a nice little run there going into the close but obviously some MOC orders were on the sell side.

Linda Piazza : 5/9/2008 3:50:10 PM

The VIX has moved right back down to its daily 9-ema, and may be about 0.02 below it. As I type, the VIX is 19.30. Essentially, it's testing that average still, but it has not yet erased the potential to move up toward 20.97. Not yet. That potential is only slightly greater than the potential to drop back toward a Keltner line that is now at 17.56, however . . . which is one reason I've been closing out my June bear call spreads these last few days, just in case, locking in my profit and trimming my risk. However, I still believe that the greater chance is that the VIX will rise and the SPX will dip toward its 30-sma, even if it's only a slightly greater chance. I would not stay in a trade I should have exited just due to that gut impression and a slight edge on one chart.

James Brown : 5/9/2008 3:47:10 PM

It has been a volatile week for Foster Wheeler (FWLT) following its earnings report. Traders have been buying the dip and the stock is inching back toward resistance near $70.00 again. It might be worth watching for a breakout here.

James Brown : 5/9/2008 3:42:52 PM

Short squeeze in progress - OYO Geospace (OYOG) is really surging higher. The stock is up more than 14.4% to $49.70 (intraday high 49.89). The company reported earnings today that appeared to miss estimates by 2 cents. This is probably a short squeeze as the most recent data listed short interest at more than 10% of the extremely small 4.4 million-share float.

Jeff Bailey : 5/9/2008 3:40:00 PM

Healthcare Provider (RXH) 426.87 +1.14% now atop today's sector winners and breach a trending lower 200-day SMA.

Linda Piazza : 5/9/2008 3:40:17 PM

Last night's Wrap led readers to consider vulnerability to the 30-sma if the SPX sustained values below a Keltner level that was near yesterday's low. It didn't happen and it may not happen at all, especially not today. I of course warned to expect buying at the rising trendline off the March lows, always a given, and warned that vulnerability is not the same as telling would-be bears "it will get there." It was rather a warning to bulls to prepare a what-if plan. Still, I hate discussing potential setups that aren't realized as the one predicted by the SPX's 30-minute Keltner chart was not realized. However, I'm going to do it again. If you're in bullish trades, particularly May calls that are going to start leaking premium, remain aware of that vulnerability. Do you want to collect some of your profits now, as the SPX climbs off the low of the day, for example, in case it continues that pattern of lower highs and lower lows over the last few days? That vulnerability remains. Bears, I warn again that this is not an excuse to hold onto trades that you shouldn't be keeping if the exit parameters you established before you opened the trade have been met. That vulnerability should not be taken as a promise that you'll be able to get out at a better price next week. Whatever your position, decide how much risk you want to take into next week.

Jeff Bailey : 5/9/2008 3:38:04 PM

In some pre Op-Ex action, the SPY back to its May "Max Pain" theory level.

Jeff Bailey : 5/9/2008 3:37:33 PM

Here come the small caps, RUT.X battles back to unchanged.

Jeff Bailey : 5/9/2008 3:35:22 PM

Oil service reversing losses now with OIH +0.30%.

Keene Little : 5/9/2008 3:35:10 PM

Got a little buying spike. Now we'll see if it holds or if instead price settles back down for the close. If price continues to rally into the close that will give Monday a slight bullish bias.

Jeff Bailey : 5/9/2008 3:31:20 PM

Crude oil futures settled higher for sixth-straight session with Nymex June Crude Oil (cl08m) up $2.27, or +1.84% at $125.96. Traders citing growing concern over tight distillate stockpiles and renewed dollar weakening as catalyst for gains.

I'd also add the short position and limited overhead supply. (wink)

Linda Piazza : 5/9/2008 3:27:35 PM

There's really nothing to say right now that won't mislead someone or other. At one moment, the markets look a little more bearish; at another, a little more bullish or at least improving. Once again, the SPX has risen up to test its 30-minute 9-ema, now converging with further potential resistance, all at about 1388.15. The SPX is a little above that as I type with a few more minutes to go in this 30-minute period, so it's definitely trying for a change in tenor . . . and as I typed, it rose further. Look for next resistance near 1391.51 on 15-minute closes.

Keene Little : 5/9/2008 3:26:08 PM

And the next logical question, if the DOW closes at 12740, is which way is it going to go on Monday. Flip a coin, literally.

Keene Little : 5/9/2008 3:21:13 PM

Since the key level to the downside for the DOW is at 12740 (where the downtrend line from October crosses the uptrend line from March), any guesses where the DOW will close today? Link

James Brown : 5/9/2008 3:10:16 PM

Chinese solar-energy company ReneSola Ltd (SOL) is seeing its stock consolidate with a bullish pattern of higher lows. It looks like shares are close to breaking out over resistance in the $18.50-18.60 region. A move over $19.00 would be a new triple-top breakout buy signal on the P&F chart.

Jeff Bailey : 5/9/2008 3:06:35 PM

Stillwater Mining (SWC) undercuts its recent lows.

Jeff Bailey : 5/9/2008 3:05:38 PM

Bond market closes.

13-week yield rose 3.0 bp to 1.650%, 5-year finished down 4.3 bp at 2.961%, 10-year down 3.8 bp at 3.767% and the 30-year off 4.0 bp at 4.524%.

James Brown : 5/9/2008 3:04:43 PM

Metal and mining stock BHP Billiton (BHP) is up six out of the last seven weeks and is currently challenging resistance near $87-88. A failure here might be a bearish entry point. Conversely, while the stock looks overbought, a rally over $88.00 could be a bullish entry point. The P&F chart points to a $104 target.

Keene Little : 5/9/2008 3:00:06 PM

Yes Linda, rally and decline are just not definitive enough. So we'll develop our own vocabularly for market moves that would be more descriptive.

James Brown : 5/9/2008 2:59:39 PM

Software maker VeriSign (VRSN) is showing some relative strength today. The stock is up 3.5% following its earnings report last night. The stock is currently challenging resistance in the $38.00-38.25 region.

Linda Piazza : 5/9/2008 2:43:43 PM

Keene, in other words, instead of a squeak lower, you'd want a whoosh (my technical term of late) before you'd be interested in a short trade? We'll have to publish a glossary before long! Smile.

Linda Piazza : 5/9/2008 2:42:03 PM

At this point, I hesitate to say too much since we've had a whole day of consolidation and coiling on the SPX. We shouldn't be micromanaging or forcing some conclusion when there's really none yet. However, with that said, I have to note that the formation today now begins to look less like a bear flag trying to set up than it does like a bearish right triangle with flattish support and descending top trendline. Whether that means anything or not, I don't know.

Jeff Bailey : 5/9/2008 2:38:57 PM

Most Actives ... continue to shuffle, but pre Op-Ex looks to take hold with SPY -0.29%, QQQQ -0.51% and XLF -0.30% top three (3) spots. S +5.56%, AIG -8.10%, NVDA +3.28%, MSFT +0.30%, MYL -9.47%, CSCO -0.73% and INTC -0.51% round out the top ten (10).

James Brown : 5/9/2008 2:36:53 PM

The reversal in Baidu.com (BIDU) continues. The stock is down another 3% today and breaking under the $350 level. The P&F chart now points to a $304 target. A 38.2% Fibonacci retracement of its $200-377 run would be $309.50.

Jeff Bailey : 5/9/2008 2:34:48 PM

I should have disclosed earlier that I do currently hold bullish position in NVDA.

James Brown : 5/9/2008 2:30:14 PM

Relative strength - Celanese Corp. (CE) , an industrial chemical maker, is breaking out to new highs after a three-week consolidation around the $45-46 zone.

Jeff Bailey : 5/9/2008 2:25:52 PM

Volatility measures all suggest more call selling/put buying than call buying/put selling.

VIX.X 19.73 after a kiss of WKLY R1.

Jeff Bailey : 5/9/2008 2:23:24 PM

Treasury prices at the 5, 10 and 30-year maturities rise with just 45-minutes left in today's trade. Yields lower with the 5-year down 4.4 bp at 2.960% and slipping back within 1.0% of the current fed fund target. More modest price gains for the 10-year finds yield lower by 3.6 bp at 3.769%, while the 30-year yield has fallen 4.0 bp to 4.524%.

Jeff Bailey : 5/9/2008 2:19:28 PM

Not much change at the 12:00 tick regarding NYSE and NASDAQ a/d as stocks drift lower pre Op-Ex.

NYSE reporting 13 advancers for every 17 decliners, while NASDAQ comes in at 12:15.

4 new names join today's new high list at the NYSE since the 12:00 update, while 11 names added to the new low list.

NASDAQ now reporting an addition of 3 stocks having traded a new 52-week high, while 12 are added to the new low list since lunch-time.

Keene Little : 5/9/2008 2:17:00 PM

If price continues to squeak lower (that's a technical term for a slow drop) and the bullish divergences hold then I would not be interested in shorting this market. If the lows get taken out and prices hold lower then I'd be willing to try the short side. But right now I'd have to say the long side is the better bet as long as the lows hold. The risk is just a choppy finish to the day as traders remain reluctant to make any big bets before the weekend.

Linda Piazza : 5/9/2008 2:11:27 PM

The SPX tests potential resistance now up to 1388.70 on 30-minue closes, resistance that has so far held on those 30-minute closes all day.

Jeff Bailey : 5/9/2008 2:10:22 PM

VXN.X 23.56 +1.63% ...

Linda Piazza : 5/9/2008 2:10:16 PM

The A/D line still coils. So does the VIX. No answers there, except that the VIX maintains its position above the daily 9-ema. Will it into the close?

Jeff Bailey : 5/9/2008 2:10:04 PM

Swing trade call alert! ... for one (1) of the NVIDIA, Inc. NVDA Sep $22.50 Calls (UVA-IX) at the offer of $2.80. No stop for now, target $28.00 in the underlying.

NVDA $22.66 +3.23% ...

James Brown : 5/9/2008 2:04:14 PM

MGM Mirage (MGM) is out performing the market today. The stock is bouncing from the bottom of its trading range (support) near $48.00. Shares are currently up 4.3% to $51.16. The top of the trading range is the $52.00-52.50 zone. At this point a move over $52.50 would come awfully close to a bullish breakout above its trendline of lower highs. MGM might be worth adding to your watch list.

James Brown : 5/9/2008 1:59:38 PM

The Disk Drive Index (DDX) actually looks bullish here. The index is up about 1% and closing in on a breakout above resistance. chart: Link

Jeff Bailey : 5/9/2008 1:52:21 PM

Next year? Who knows.

Jeff Bailey : 5/9/2008 1:52:07 PM

Seeing that Senate Democrats are going after oil traders now. Or at least they want to.

Senate Dem's introducing what's called Consumer-First Energy Act of 2008. One of the major targets looks to be the Intercontinental Exhange's (NYSE:ICE) markets.

Bill likely won't pass near-term as it contains such features as the windfall profit tax.

Jeff Bailey : 5/9/2008 1:41:06 PM

Berkshire Hathaway (BRK.A) Alert! 126,100 -2.24% ... probes its 01/16/08 relative low.

Keene Little : 5/9/2008 1:40:01 PM

I continue to see bullish divergences at the current lows vs this morning's so all is not lost for the bulls yet. And it also mean trail your stop down if short since a short-covering rally could really whip this back to the upside.

Linda Piazza : 5/9/2008 1:38:47 PM

Testing, testing. The SPX's target and potential support on 15-minute closes has now sunk to 1383.16. When rolling up to the 30-minute chart, I see that all day, so far, the SPX has formed 30-minute closes beneath its 30-minute 9-ema, now at 1388.09 with further potential resistance up to 1389.06, so you can use that as a sort of benchmark for when something might have changed. As I've been saying, though, we're on the cusp of the SPX either falling through support or else heading up again. Now we're moving into that typical stop-running time of day from 1:35-1:55 pm ET, so keep on your toes, watching for a test, watching to see how the test turns out.

If the SPX punches lower, below that Keltner support listed above, next potential support is near 1381.80, so watch that in case there's going to be a trap that punches prices lower and then bounces them higher again.

Jeff Bailey : 5/9/2008 1:37:36 PM

Deutsche Bank Adds More Long, Short Commodities ETNs Link

Jeff Bailey : 5/9/2008 1:36:04 PM

Some new issues that might be of interest to commodity traders ... DEE and DDP

Linda Piazza : 5/9/2008 1:34:55 PM

Maddening, isn't it, but you just have to wait it out. Many subscribers are scalp or day traders and this kind of waiting is terrible for you. As Jane mentioned the other day, however, there are a few great trading opportunities dispersed within a lot more times like these. I'm using today to get out of some June bear call spreads if I can--I've already exited 25 contracts of 1530/1540's for $0.17 (entered for $0.50 credit on 4/24), thinking that if the markets head up again and rally strong instead of turning lower, I might have another chance to put them on again. Wednesday, I exited 25 JUN XEO 700/710's for $0.20 (entered for $0.60 credit on 4/18) and I'm thinking those were entirely too close for comfort anyway. So, I'm doing what I can to keep myself occupied but even those of us who rate among the most patient of traders grow impatient with this stuff. Just try not to force a trade out of boredom. Deadly, that can be.

Jeff Bailey : 5/9/2008 1:34:49 PM

Haven't had time to look at earnings of the beverages. Is it sales, or aluminum and glass prices? CCE might shed some light too.

Jeff Bailey : 5/9/2008 1:33:39 PM

Quick look at the NYSE nl list rather mixed, but some themes perhaps.

drugs and refiners as well as some consumer discretionary names. James noted a "beverage" theme the other day. CCE $21.45 -0.74% ...

Jeff Bailey : 5/9/2008 1:29:57 PM

Quick look at the NYSE nh list not all that surprising. Mostly energy.

Keene Little : 5/9/2008 1:23:34 PM

The DOW is the first to test this morning's low.

Linda Piazza : 5/9/2008 1:17:43 PM

The SPX target and potential support on 15-minute closes has now sunk to about 1383.50. Too much below that for too long and bulls are going to get scared off.

Jeff Bailey : 5/9/2008 1:16:23 PM

RIO $39.29 -1.79% ... steady

Jeff Bailey : 5/9/2008 1:15:20 PM

Copper notably weak today. Inventories out of China showed builds in inventory.

Keene Little : 5/9/2008 1:14:25 PM

One indication that does not bode well for the stock market is what's happening today in some of the high-flyer stocks like GOOG (-1.7%), AAPL (-1.5%) and BIDU (-2.8%). If investors are losing faith in these stocks then the psychology of the market could be changing to something more bearish.

Jeff Bailey : 5/9/2008 1:13:06 PM

PAL $5.36 -3.42% ... May have similar hedge as SWC. Not sure.

Jeff Bailey : 5/9/2008 1:13:01 PM

PAL $5.36 -3.42% ... May have similar hedge as SWC. Not sure.

Jeff Bailey : 5/9/2008 1:12:26 PM

SWC $13.75 -3.16% ...

Jeff Bailey : 5/9/2008 1:11:51 PM

Palladium strong throughout ....

Jeff Bailey : 5/9/2008 1:11:18 PM

Gold reversing earlier losses now.

Linda Piazza : 5/9/2008 1:06:41 PM

The SPX's 15-minute chart setup has been suggesting that it might attempt a climb again, with the middle-of-the-day slump providing the second touchpoint for an eventual rising trendline defining support for a bear flag. However, the 30-minute chart suggests that the SPX might have trouble getting far above 1389.50 on 30-minute closes if it does.

Linda Piazza : 5/9/2008 12:59:22 PM

Unfortunately, the A/D line isn't showing me anything definitive, either. It's currently -525, below the bullish/bearish benchmark at about -80 on 15-minute closes, but it's been zooming around and then settling into a coiling pattern. RSI on its chart is 46.09, so near the neutral zone, too.

Linda Piazza : 5/9/2008 12:52:30 PM

We're at an "about to collapse lower" or "try the bounce again" point right here, a point we may reach several times before the outcome is known. The SPX has not been able to maintain prices above yesterday's most-of-the-day support level near 1390-1392. That's bearish. Bears have not been able to push the SPX far below the descending 9-ema for hours. While not exactly bullish, that's certainly enough to make bears wary.

Linda Piazza : 5/9/2008 12:50:13 PM

The OEX's potential target and support on 15-minute closes is 637.45-638.26. The 15-minute 9-ema, potential resistance on 15-minute closes, is now about 639.40.

Linda Piazza : 5/9/2008 12:49:06 PM

SPX potential downside target and support on 15-minute closes is now 1383.92. The 15-minute 9-ema, potential resistance on 15-minute closes is now 1387.41.

Linda Piazza : 5/9/2008 12:38:07 PM

The VIX isn't any help in interpreting short-term action. It's been moving sideways for almost two hours, right along the flattening 15-minute 9-ema, now at about 19.60. The VIX is 19.65 as I type. I do note that it hasn't yet needed to drop all the way to the former top trendline of its bull flag formation from the last few days and that it's holding well above its daily 9-ema. So, overall, it's neutral to slightly bullish, I'd say.

Jeff Bailey : 5/9/2008 12:35:11 PM

S&P just cut its rating on $1.44 billion of US collateralized debt obligations. Overall, S&P has now downgraded $325.15 billion in CDOs, and still holds an additional $12.1 billion on its watch list for near-term downgrades (roughly 3.72% of total).

Linda Piazza : 5/9/2008 12:34:46 PM

Remember that if the SPX is doing nothing more than establishing the second touchpoint for a rising trendline for a bear flag, it won't hit a new low or test that downside target and potential support now at 1384.11. So, we're at a standoff point here. I don't yet think I'm seeing anything other than a potential bear flag but that doesn't mean that the SPX can't rise up the rest of the day through such a flag. Such a flag can break down at any moment, too, and therein lies the problem in interpreting what's happening.

James Brown : 5/9/2008 12:27:24 PM

After five weeks of trading sideways in the $61-66 zone biotech stock Celgene (CELG) has broken to the downside. The company reported earnings last night and beat by 2 cents and guided inline with previous estimates. One firm downgraded the stock while another firm has upgraded the stock on the same news. CELG is bouncing from round-number support at the $60.00 level (near its 50-dma and 200-dma) and coincidentally near its multi-month trendline of higher lows. The momentum indicators have all rolled over. I'd probably keep an eye on CELG for this bounce to fade. You could use a trigger under $60.00 as a potential entry point for puts. The P&F chart has turned bearish and points to a $56 target.

Keene Little : 5/9/2008 12:27:13 PM

Oil (June contract) hit a potentially important level today from an EW and Fib perspective. In commodities it's very common for the 5th wave to extend and when it does will often achieve a projection equal to waves 1 through 3 and that's at 125.58. Weekly chart: Link

Wave 5 is the move up from January. The daily chart shows a closer view of that move and it too needs to be a 5-wave move (labeled as waves i through v): Link . The 5th of the 5th wave (wave v of 5) achieved 62% of the 1st wave (wave i of 5) at 125.34 which is common when the move is ending.

Oil rallied to a high 126.20 this morning and then dropped sharply. The bounce off this morning's low looks very corrective and has me thinking the decline will continue. This sets up a top in oil today, especially if it drops back below 124 now.

Jeff Bailey : 5/9/2008 12:21:44 PM

Visa (V) $83.02 -4.57% ... suddenly shuffled to #7 most active.

Jeff Bailey : 5/9/2008 12:21:10 PM

Most Actives ... AIG -8.53%, XLF -0.07%, NVDA +5.46%, MSFT +0.47%, SPY -0.30%, CSCO -1.47%, YHOO -1.37%, AAPL -1.68%, ATVI +8.66%, FNM -0.68%

James Brown : 5/9/2008 12:18:51 PM

Auctioneer Sotheby's (BID) reported earnings this morning and missed! Wall Street expected a profit of 10 cents. BID reported a loss of 19 cents/share. The stock is down 7.6% to $25.40. Shares have a pattern of lower highs and lower lows. I can't imagine this report inspiring any new buying so I'd keep an eye on it for a bearish entry point. A failed rally in the $26.50-27.00 zone might work as an entry. The $22.50-20.00 zone would be a potential target. The Point & Figure chart is bearish with a $15 target.

Jeff Bailey : 5/9/2008 12:18:10 PM

At the 12:00 hour, NASDAQ breadth also remained negative with decliners outnumbering advancers by a 15:11 margin. Just 35 issues have mustered a new 52-week high, while new lows came in at 125, about 17 more than at this time yesterday.

Linda Piazza : 5/9/2008 12:16:32 PM

If (big "if" here) the SPX should sustain 15-minute closes beneath the potential support now at 1384.19, rolling up to the 30-minute chart gives a next potential target and support near 1371.71. That's of course not far from the daily 30-sma, now at 1376.61, and certainly suggests that the daily 30-sma could be tested without yet promising that it will be. It's not yet sustaining those 15-minute closes beneath nearest support.

Jeff Bailey : 5/9/2008 12:14:55 PM

At the 12:00 tick, breadth modestly improved but still negative at the big board with decliners still outpacing advancers by a narrower 17:12 margin. The number of new 52-week highs and 52-week lows more even with 64 1, 2 and 3-lettered stock symbols achieving a new 52-week high, while 69 stocks have seen a new 52-week low.

James Brown : 5/9/2008 12:09:13 PM

Activision (ATVI), the maker of the extremely popular Guitar Hero video game, is soaring. The company reported earnings last night that beat estimates by 12 cents. Management raised guidance for its fiscal year 2009. At least two firms have upgraded the stock on the news. Shares are up 8.5% to $30.00 and challenging resistance at its December 2007 highs. FYI: The P&F chart is bullish with a $36 target.

James Brown : 5/9/2008 12:04:59 PM

Oil service stock Atwood Oceanics (ATW) is down 3.3% following its earnings report this morning. The stock is producing a bearish engulfing candlestick pattern. Short-term technicals have definitely turned bearish. (The company beat estimates by 15 cents)

James Brown : 5/9/2008 11:58:40 AM

The profit taking in the NYSE Euronext (NYX) (-2.4% to $70.85) is picking up speed in just the last 30 minutes. The stock should find some support at broken resistance near $70.00 (maybe $69). It might be worth watching for a bounce in the $70 region. FYI: The company reported earnings just two days ago, where it beat by 8 cents but the stock has reversed on the news.

Linda Piazza : 5/9/2008 11:58:01 AM

The SPX's potential downside target and potential support on 15-minute closes is 1384.29. The SPX is so far seeming reluctant, if I can be allowed a little anthropomorphism, to drop that far, but it's still maintaining 15-minute closes beneath the 15-minute 9-ema now at 1388.90, so it still maintains that potential downside target.

Keene Little : 5/9/2008 11:50:47 AM

It's looking like we're going to get at least a test of this morning's low. So far I'm seeing evidence of bullish divergences today, including the current pullback if it manages to hold at or above the low. Therefore I would be reluctant to try the short side here. Before shorting this market I would want to see a firm break to a new low that stays down.

Linda Piazza : 5/9/2008 11:48:54 AM

The SPX's choppy rise off the day's low may have been nothing more than a bear flag formation. If so, bulls of course need to be wary of rollover at any time. However, if that's what it is, it may not yet be fully formed and this downturn may just be the downturn that forms the second touchpoint of what will eventually be the flag's supporting trendline, so bears need to be careful about their expectations, too.

Linda Piazza : 5/9/2008 11:39:32 AM

Current SPX target and potential support on 15-minute closes is 1384.43-1385. For the OEX, that's 637.25-638.60.

Linda Piazza : 5/9/2008 11:30:45 AM

Over the last 45 minutes, the SPX has been testing its 15-minute 9-ema, now at about 1390.10, and it's been finding resistance there on 15-minute closes. Another test is occurring as I type, with the SPX at 1390.95.

Jeff Bailey : 5/9/2008 11:19:28 AM

Most Actives ... AIG -6.97%, XLF +0.26%, NVDA +4.55%, MSFT +0.40%, SPY -0.12%, CSCO -1.16%, YHOO -1.33%, ATVI +7.40%, INTC +0.25%, FNM -0.47%.

Keene Little : 5/9/2008 11:07:27 AM

Bullishly, NDX has continued to find support at the mid line of its parallel up-channel from March, including this morning. A drop below this morning's low would obviously be bearish. If the bulls can keep the bounce going I'll be watching to see if it can make it back up to its broken uptrend line from April 15th, currently near 1992. 60-min chart: Link

A rally above 2000 should see a move at least up to the top of its channel near 2025. The 62% retracement of the October-March decline is at 2021.

Linda Piazza : 5/9/2008 11:01:08 AM

I don't see anything yet that dissuades me from the belief that the bounce we're seeing has been a given and that we don't yet know what the outcome is going to be. If you're in bullish trades from the test of the rising trendline off the March low, something I certainly didn't feel comfortable trying, then you need to keep ratcheting up your stops so that you don't let a rollover turn your gain into a loss. I'm not suggesting that I know the SPX will hit its 30-sma and certainly not that I know it will do so today, but I am suggesting that nothing I've seen yet tells me that it's not going to happen and that the vulnerability is not still there.

Linda Piazza : 5/9/2008 10:56:36 AM

The SPX's 15-minute 9-ema is now 1390.80, potential resistance on 15-minute closes. The SPX has punched above it during this 15-minute period but is pulling back toward it so don't ignore the possibility that this could still serve as resistance. The SPX is 1390.77 as I type.

Linda Piazza : 5/9/2008 10:55:05 AM

As expected, the VIX has dropped down to test its 15-minute 9-ema. Over the last few minutes, however, it dropped below that moving average, potential support on 15-minute closes. The 15-minute period is far from finished, so I'll mention that the potential support is now 19.57 with the VIX now 19.50. Below this, further potential support on 15-minute closes is at 19.34 and then 19.22, which would constitute a retest of the bull flag's former resistance, to see if it now holds as support.

Linda Piazza : 5/9/2008 10:49:03 AM

The RUT has now risen to its 15-minute 45-ema, the same average that stopped it near 1:45-2:00 pm and near the close yesterday. That resistance is now up to about 719.50 on 15-minute closes. The RUT is currently just above it, at 719.75. Bulls want a 15-minute close well above it this 15-minute period.

Keene Little : 5/9/2008 10:47:17 AM

The techs are once again looking stronger in the attempt to rally. Quite a difference between the COMP and DOW this morning.

Linda Piazza : 5/9/2008 10:38:17 AM

The RUT rose to test its 15-minute 9-ema before many other indices and has been testing it for more than 30 minutes. So far, it has not been able to maintain 15-minute closes above that average, now at 716.30. The RUT is currently 716.67, having just pushed through that average again. If the RUT can get through this on 15-minute closes, its next potential resistance is 718.60-720 on 15-minute closes.

Linda Piazza : 5/9/2008 10:36:15 AM

The OEX's 15-minute 9-ema is now 640.64.

Linda Piazza : 5/9/2008 10:36:05 AM

While I suspect that the VIX might be eventually dropping toward its rising 15-minute 9-ema, I suspect that the SPX might be rising toward its dropping 15-minute 9-ema, to test that for resistance on 15-minute closes. It's now 1390.08 with the SPX at 1388.75.

Linda Piazza : 5/9/2008 10:34:04 AM

After jumping higher this morning, gapping above a bull flag formation's resistance line and testing historical resistance, the VIX consolidates mostly sideways to sideways/down. If this were an equity, this behavior would be considered potentially bullish consolidation near the high. I consider it potentially bullish in the VIX (and, so, bearish for equities), too, while keeping in mind that the day is far from over. I suspect that the VIX may be moving down toward the rising 15-minute 9-ema, with that now at 19.63, where equity bears hope that it will find support and bounce again, and equity bulls hope the opposite. The VIX is 19.75 as I type.

Jeff Bailey : 5/9/2008 10:27:08 AM

At the 10:00 tick, breadth was negative among 4 and 5-lettered stock symbols with 816 advancers versus 1,607 decliner. There were 27 stocks hitting a new 52-week high and 96 stocks trading a new 52-week low.

Jeff Bailey : 5/9/2008 10:25:37 AM

At the 10:00 tick, decliners were outnumbering advancers by 1,849:838, while 57 stocks traded a new 52-week high versus 53 stocks trading a new 52-week low.

Jeff Bailey : 5/9/2008 10:19:58 AM

I'll be in and out of the MM today. I have some crop reports to get through as well as several phone calls ahead of the weekend.

Linda Piazza : 5/9/2008 10:20:18 AM

Keltner outlook on the A/D line: Currently, the A/D line is finding resistance on 15-minute closes at a Keltner line now at about -850. The A/D line is -920, so it's not falling far from that line yet, instead coiling beneath it. So far, it's maintaining a downside target of about -1690, but we should remain a bit wary of counting too strongly on downside targets when it's just coiling around beneath that potential resistance.

Jeff Bailey : 5/9/2008 10:17:59 AM

Congratulations Jane! Have a great 3-day weekend!

Keene Little : 5/9/2008 10:17:45 AM

Congratulations Jane. Nothing like a grandchild.

Linda Piazza : 5/9/2008 10:17:26 AM

Congratulations, Jane, on Amber's birth!

Linda Piazza : 5/9/2008 10:16:32 AM

The SPX isn't making much headway yet, finding resistance on 15-minute closes at 1387.88. The 9-ema is now 1391.39 and still descending. Potential support is 1385.15 on 15-minute closes.

Jeff Bailey : 5/9/2008 10:16:27 AM

Some farmers in Kansas will be taking the opportunity this morning to take off partial fuel hedges with the sharp rise in product this morning.

Jane Fox : 5/9/2008 10:15:55 AM

I have a brand new grandbaby and I will be leaving for the day.

Keene Little : 5/9/2008 10:14:17 AM

This morning's bounce looks corrective enough to have me thinking we are still due a test of the lows.

Linda Piazza : 5/9/2008 10:10:57 AM

The RUT is bouncing harder, on a Keltner basis, than some other indices. It's already at its 15-minute 9-ema. The SOX, too, has a solid green candle for this 15-minute period although it has not as yet approached its 15-minute 9-ema. The TRAN's performance is similar to the SPX's: a green candle but nothing to write home about, as my father would have said. Watch those typically front-running RUT, SOX and TRAN indices, though. The USDJPY is also springing higher, and it typically leads, too. So for now, there are some what I use as indicator indices pointing to an attempt at least to steady and bring prices higher.

Jeff Bailey : 5/9/2008 10:10:15 AM

Sector action in the U.S. Market Watch is mixed to lower in early trade. Home Construction +1.44% the loan percentage gainer while Oil Service -1.58%, Gold Bugs -1.55%, CBOE Oil -1.33% and AMEX Nat Gas -1.18% pace declines.

Linda Piazza : 5/9/2008 10:01:31 AM

The OEX has a potential downside target on its 30-minute chart near 632-634. I can't be more specific right now because one of my charts isn't updating correctly. However, it's not a given that this downside target will be met. Do factor in the vulnerability to that level if you're thinking bullish, but do not count on it being hit if you're bearish. Bears need to be protective of their profits as indices are testing their rising trendlines off the March lows.

Linda Piazza : 5/9/2008 9:59:51 AM

The OEX has potential support on 15-minute closes at 639.18, support that held on the first 15-minute close but is currently being breached again.

Linda Piazza : 5/9/2008 9:58:28 AM

Potential short-term support for the SPX is at 1385.52 on 15-minute closes. I'm not sure it's going to hold today as my own viewpoint is that we could well get a test of 1372-1374 over the next trading days. Please, bears, don't use this as an excuse for holding onto trades that turn wrong, but if you're thinking bullish, you better be aware of the possibility if not yet the probability of that 30-sma test.

Keene Little : 5/9/2008 9:54:21 AM

We got the expected bounce off support but I would not be surprised to see another drop back down to test the quick low (maybe even a brief new low). If the DOW drops below 12730 (SPX below 1380) and stays there, I will be interpreting that as very bearish since the EW pattern at that point will portend strong selling from there.

Linda Piazza : 5/9/2008 9:50:44 AM

The VIX gapped above that bull flag formation I was watching yesterday and it did move above the 5/7 high, but it hasn't stayed there. It's currently 19.74, pulling back from its 20.01 high. However, it may be setting an upside target near 20.83-20.95, so I wouldn't necessarily consider the upside over for the VIX today. Keep it on your radar screen.

Linda Piazza : 5/9/2008 9:47:35 AM

The SPX is currently 1387.47, bouncing as doesn't surprise me from the rising trendline off the March low as well as the short-term Keltner support now at 1385.61. Whether this bounce holds or not, I'm not sure, as this bounce was just a given and not a sign of anything spectacularly bullish, in my opinion.

The USDJPY is hitting its daily 30-sma today, which corroborates the possibility that some equity indices such as the SPX could, too. It's not a given, but I warned subscribers over the last few days of the possibility that it could be tested over the next few trading sessions and now the USDJPY corroborates that possibility. So, figure in vulnerability to that when you're making your trading plans without counting on it happening. For example, if you're of the "it's going to bounce from the rising trendline off March's low" ilk and are buying the trendline test currently (something I'm not doing), be aware of that vulnerability when you set your stops. You don't want to enter a bullish trade now and then follow the SPX all the way down to 1372-1374, if that should happen, with your bullish trade still open.

Jane Fox : 5/9/2008 9:47:00 AM

Due to an industrywide outage, the S&P MidCap 400 Index ($MID.X or $IDX) is not updating at this time. We will be providing more information as it becomes available.

Jane Fox : 5/9/2008 9:45:29 AM

I certainly think the price of Crude is not helping the bulls but I don?t see it assisting the bears much either and that is what I find so surprising.

Jane Fox : 5/9/2008 9:42:57 AM

The SPX is under pressure but from a technical point of view it should be taking a little breather here and so far it is trading just like the charts say it should. Of course the price of Crude is overshadowing everything and I'm afraid we all have a tendency to say this drop is due to Crude. Link

Jeff Bailey : 5/9/2008 9:43:18 AM

Most Actives ... AIG -6.18%, SPY -0.28%, FNM -1.66%, QQQQ -0.78%, NVDA +4.05%, F -0.85%, IP -0.61%, WB -0.32%, DUK -0.53%

Jeff Bailey : 5/9/2008 9:39:43 AM

NVIDIA (NVDA) $22.57 +2.82% ... gets an upgrade this morning from Stifel Nicolaus

Jeff Bailey : 5/9/2008 9:37:44 AM

Citigroup (C) $24.30 (unch) ...

Linda Piazza : 5/9/2008 9:36:39 AM

The SPX has just hit and indeed punched a little through potential support on 15-minute closes at 1385.70. The first 15-minute period has not yet concluded, of course, so there's still potential for this to hold.

Jeff Bailey : 5/9/2008 9:36:10 AM

Citigroup released some early notes ahead of today's investor day presentation. The banking giant said it is targeting 9% revenue growth. During the first quarter, the company generated $13.22 billion in revenue, 48% less than the $25.46 billion in generated in the first quarter of '07.

Linda Piazza : 5/9/2008 9:35:49 AM

The SPX is at the rising trendline off the March low, so bears need to be cautious here. Barring a further extreme whoosh lower, it would be surprising not to see some kind of bounce attempt here through about 1382, although whether or not it succeeds is a different matter. For months, bulls have been rewarded every time they bought these dips. Bulls, I would not be buying this right now, though. Too much potential still for a drop toward 1372-1374.

Jane Fox : 5/9/2008 9:33:28 AM

Dateline WSJ - The U.N. World food Program has suspended aid shipments to Myanmar after the country's military government seized all the food and equipment that had been flown into the country for cyclone victims.

WFP spokesman Paul Risley said Friday that all "the food aid and equipment that we managed to get in has been confiscated." The shipment included 38 tons of high-energy biscuits. He said the WFP "has no choice" but to suspend further aid shipments until the matter is resolved.

Jeff Bailey : 5/9/2008 9:31:18 AM

2.07 million shares crossed in Intl. Paper (IP) at $26.06.

Linda Piazza : 5/9/2008 9:30:59 AM

Obviously, futures are ugly. Also obviously, I'm not surprised, given my comments over the last few days. What might not be as obvious, however, and what I want to say to readers is that such action does not make me happy but in fact saddens me. I know the propensity for most is to be long the markets and so many lose money when markets turn down.

On to the markets themselves. If the SPX turns down in accordance with the action of the futures, it's likely to test or maybe even breach the rising trendline off the March low, just as the USDJPY did yesterday, as I warned MM and Wrap readers. I would expect some attempt to steady the markets there, if the SPX doesn't drive too low below 1382-1385, but I wouldn't be surprised, obviously by previous posts and my Wrap last night, if there's a move toward 1371-1374 today or over the next few trading days.

Keene Little : 5/9/2008 9:28:56 AM

Equity futures slid lower during most of the overnight session and it looks like we're going to see the DOW test the 12740 area quickly. The DOW's daily chart that I posted last night used the log scale and if I use the arithmetic scale (arguably the one used by most traders) the broken downtrend line from October is near 12750 and the uptrend line from March is near 12730. I would be surprised if this zone does not provide support this morning. Link

Jane Fox : 5/9/2008 9:27:07 AM

DAteline WSJ - Circuit City says it is exploring strategic options and will allow Blockbuster and Carl Icahn to examine its books. Retailer also agrees to add three investor nominated directors.

Jane Fox : 5/9/2008 9:22:28 AM

Oh big yawn Crude to new all time highs at $126.20.

Jane Fox : 5/9/2008 9:11:48 AM

With Crude up to $125.98 it is needless to say the equity markets were not bullish overnight.

I am surprised the equity markets have not succumbed more so to the weight of the price of crude. Even a few months ago, if you would have told me Crude would be pushing $126/bl in May I would have, first of all, told you you were crazy but secondly I would have said the stock market would be tanking. As a matter of fact the stock market is not tanking and is holding admirably Link

Jeff Bailey : 5/9/2008 9:10:27 AM

Looney's strength looks to come on the heels of this morning's economic reports where Canada's government said its Employment Change jumped to 19.2K, which was much stronger than the 10.0K forecast. Despite the gain, Canada's unemployment rate crept higher to 6.1% from 6.0%, a bit higher than economists' forecast of 6.0%. Additionaly, Canada said its trade balance rose to $5.5B from a previously reported $4.8B.

Jeff Bailey : 5/9/2008 9:05:21 AM

The dollar is mixed to weaker across the board this morning falling -0.30% against the euro, -0.68% versus the yen, +0.26% versus the pound and -1.02% against the looney.

Jane Fox : 5/9/2008 8:47:26 AM

LONDON (MarketWatch) -- Oil futures blitzed past the $125 a barrel mark in electronic trading as New York traders started to get in, rising as high as $125.98 a barrel. In more recent trade, oil traded at $125.55, up $1.86. Oil futures have climbed nearly $10 this week.

Jane Fox : 5/9/2008 8:46:39 AM

Crude up to $125.98.

Jane Fox : 5/9/2008 8:44:48 AM

WASHINGTON (MarketWatch) - In a sign of weaker global growth, both imports and exports fell sharply in March, driving the U.S. trade deficit down to $58.2 billion, the Commerce Department reported Friday.

Nominal imports fell 2.9% to $206.7 billion, the largest decline in more than six years, despite record oil prices. Nominal exports dropped 1.7% to $148.5 billion, the biggest drop in nearly three years, despite higher prices for U.S. farm products.

After adjusting for inflation, the real trade gap was the lowest since November 2003. Real imports of goods fell 5.4% to the lowest level since November 2005 after adjusting for the 2.8% rise in import prices. Real exports of goods fell 5.5% to the lowest level since June after adjusting for the 1.5% rise in export prices.

Economists surveyed by MarketWatch were looking for the trade gap to narrow to $61 billion in March, although some noted an unusual spike in imports in February that would likely be unwound in March.

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