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Jeff Bailey : 5/13/2008 1:40:30 AM

China state media reporting that government has acknowledged that a 40-car freight train has derailed and caught fire. Train included 13 tankers full of gasoline.

Jeff Bailey : 5/13/2008 1:37:43 AM

China government ordering 10,000 troops to parachute into quake's epicenter in hopes of rescuing victims. 5,000 today. Other 5,000 by Wednesday.

Jeff Bailey : 5/13/2008 1:33:38 AM

Japan's economic minister Ota quoted as saying that China quake "could affect Japan economy."

Jeff Bailey : 5/13/2008 1:24:23 AM

HK "Hot Stocks" (Tuesday) : Reuters Story Link

ACH does look to play "follow the leader" with AA having another bullish day on Monday.

Jeff Bailey : 5/13/2008 1:20:41 AM

"Heavy equipment" ... with some infrastructure damage. CAT $83.82 Link ... TEX (very little, if any Asia) see recent quarter's earnings Link

Jeff Bailey : 5/13/2008 1:05:27 AM

Photo 57 ... Toyota Motor (TM) $101.61 and other Japanese companies have suspended operations in China's Sichuan province.

Jeff Bailey : 5/13/2008 1:03:34 AM

Some photos not suitable for children. May not be suitable for some adults.

Jeff Bailey : 5/13/2008 1:00:08 AM

Photo 9 ... "cell phones" ...

Jeff Bailey : 5/13/2008 12:59:30 AM

Clicking through some of the 99 photos from China earthquake ... Link

Jeff Bailey : 5/13/2008 12:49:14 AM

Chinese Bourses Suspend Trading In Quake Zone Firms ... AP Story Link

Jeff Bailey : 5/13/2008 12:20:52 AM

GBP/USD ... 5-minute interval racap of today's action. At 04:30 AM EDT, Britain's PPI came in at +2.4%, which was well above forecast of +1.8% month-over-month. The pound rose notably versus the $. At 02:00 PM EDT, we'll note little GBP/$ action (not surprising for this relationship) when U.S. Budget figures were released. Link

Keene Little : 5/12/2008 11:52:54 PM

Tuesday's pivot tables: Link and Link

The rally on Monday kept the bullish hopes alive. The SPX daily chart shows it bounced off the uptrend line from March and holding above the downtrend line from October. Friday's low continues to be a key level for the bulls to hold now. Link

The 60-min chart shows SPX ran into resistance at the broken uptrend line along the lows from April 22nd and its 50% retracement of the decline from May 2nd (1403.32). If we get a pullback Tuesday morning watch for support at or above 1392 as any break lower than that would be a break of trend lines. A drop to 1392 would set up another leg up into Wednesday/Thursday to a potential high of 1408-1414 before turning back down (or not). Link

Jeff Bailey : 5/12/2008 10:12:45 PM

EDS didn't rocket higher until well after the budget numbers at 02:55 PM EDT when it surged from the $19.58 level to $24.00.

Jeff Bailey : 5/12/2008 10:10:55 PM

At 02:00 PM EDT, the $/yen was 103.62 and did indeed reverse back higher to finish 103.74 at the 05:00 tick.

YM was 12,829 and traded as high as 12,897 by 02:50 PM.

ES was 1,397 and traded as high as 1,405 at the cash session close of 04:15 PM EDt.

OI Technical Staff : 5/12/2008 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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 : 5/12/2008 8:52:53 PM

I did not get a chance to discuss the rather bullish observations from our "junk bond" PHF in this evening's Market Wrap. However, the bullishness I would draw (based on past commentary/analysis and CONTINUED TESTING/MONITORING of said commentary/analysis) is the rising Net Asset Value of this closed-end fund would have to suggest that we are indeed seeing further sign of stability in the credit markets.

Jeff Bailey : 5/12/2008 6:42:24 PM

Tax Receipts, Outlays, Monthly Deficit/Surplus and Fiscal Year Budget Deficit table Link

Jeff Bailey : 5/12/2008 6:25:36 PM

Electronic Data Systems (EDS) $24.00 +27.25% ... $24.13 extended after being released for trade.

Jeff Bailey : 5/12/2008 6:24:36 PM

Hewlett Packard (HPW) $46.83 -4.68% ... $46.88 extended after being released for trade.

Jeff Bailey : 5/12/2008 6:08:37 PM

Closing Internals found at this Link

Jeff Bailey : 5/12/2008 5:56:08 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 5/12/2008 5:43:32 PM

Fluor (FLR) $175.75 +7.18% ... jumps to $178.00 extended. Released for trade.

Jeff Bailey : 5/12/2008 5:37:35 PM

Monthly Treasury Statement (from 02:00 PM EDT) (.pdf) Link

Jeff Bailey : 5/12/2008 5:29:12 PM

Will try best to cover in this evening's wrap. Today's "top econ report" for sure.

Jeff Bailey : 5/12/2008 5:26:38 PM

Quick update ... April'08 Treasury receipts a record at $403.751 vs. April'07 383.641. That's +5.24% year-over-year.

Jeff Bailey : 5/12/2008 5:20:27 PM

PBR's Q1 Net rose to BRL6.9258B Vs. Q1'07 BRL4.131B.

Q1 Revenue BRL46.892B Vs. Q1'07 BRL38.894B

Q1 Ebitda BRL13.876B Vs. Q1'07 BRL10.978B

Jeff Bailey : 5/12/2008 5:15:43 PM

Petroleo Brasileiro (PBR) $65.70 +1.70% ... jumps to $67.47 on headline numbers.

Jeff Bailey : 5/12/2008 5:12:34 PM

CNBC trader saying there was news today that China imports of Crude Oil fell 4.00% last month.

Jeff Bailey : 5/12/2008 5:03:52 PM

Will want to check Tax revenue comparison for econ growth/slowing pulse.

Jeff Bailey : 5/12/2008 5:03:11 PM

Will note that DXY went out at 72.51 on 04/30/08. On 04/30/07, DXY closed 81.44. Year-over year decline for this weighted basket of currencies would have been 10.97%.

Jeff Bailey : 5/12/2008 4:54:18 PM

Apple Computer (AAPL) $188.16 +2.56% ... warning that its iPhone "sold out" online in US and UK. May signal next generation is on its way. Stock ticking $187.83 extended.

Jeff Bailey : 5/12/2008 4:36:56 PM

DXY's 04:00 tick was 72.957

Jeff Bailey : 5/12/2008 4:34:36 PM

NOVC's Earnings Press Release Link

Consensus was for EPS of $-0.28 on Revenue of $6.00M

Jeff Bailey : 5/12/2008 4:33:10 PM

Novacea (NOVC) ... Resumption of trades slated for 04:35 PM EDT.

Jeff Bailey : 5/12/2008 4:31:16 PM

IndyMac Bancorp. (IMB) $3.06 -10.78% ... weak after this afternoon's earnings.

Jeff Bailey : 5/12/2008 4:27:45 PM

Refiners had a notably strong day today.

Holly Corp. (HOC) $44.19 +7.72% jumped after reporting earnings earlier this morning. HOC's earnings press release Link

Jeff Bailey : 5/12/2008 4:25:08 PM

Fluor Corp. (FLR) ... still halted. No trade resumption times given currently.

Jeff Bailey : 5/12/2008 4:24:09 PM

Fluor Corp. (FLR) ... consensus was for EPS of $1.27 on Revenue of $4.64B.

Jeff Bailey : 5/12/2008 4:20:22 PM

EIA reporting that US retail gasoline sales rose $0.109 last week to a record $3.722/gallon.

Jeff Bailey : 5/12/2008 4:18:00 PM

Not sure if Jane noted earlier, don't see it.

U.S. posted a $159.28B April budget surplus in April. The figures look to be inline with the Congressional Budget Office's estimate of $160B surplus. The surplus is 10% smaller than the surplus in April '07.

Jeff Bailey : 5/12/2008 4:12:50 PM

Fluor Corp. (FLR) ... Earnings Press Release Link

Jeff Bailey : 5/12/2008 4:11:54 PM

Fluor Corp. (FLR) $166.36 +1.45% ... Halted for trade.

Jeff Bailey : 5/12/2008 4:10:42 PM

Thanks Jane!

Jeff Bailey : 5/12/2008 4:09:38 PM

Recent SEC filings had EDS with 502.6M shares outstanding. 499.86M public float.

Jeff Bailey : 5/12/2008 4:08:22 PM

Terms of HPQ/EDS deal not clear, but chatter is deal could be announced tomorrow. Early talk is between $12B and $13B.

Jeff Bailey : 5/12/2008 4:06:43 PM

Hewlett-Packard In Advanced Talks To Buy EDS

Jane Fox : 5/12/2008 4:05:58 PM

Jeff actually Flour is Fluor. :)

Jeff Bailey : 5/12/2008 4:05:32 PM

Novacea (NOVC) $3.14 (unch) ... halted for trade.

Jane Fox : 5/12/2008 4:05:29 PM

Economic reports on the docket for tomorrow include:

8:30a.m. Apr Import Prices. Expected: +1.5% Previous: +2.8%.

8:30a.m. Apr Retail & Food Sales. Expected: 0%. Previous: +0.2%.

8:30a.m. Apr Retail & Food Sales, Ex-Autos. Expected: +0.3%. Previous: +0.1%.

10:00a.m. Mar Business Inventories. Expected: +0.4%. Previous: +0.6%.

Jeff Bailey : 5/12/2008 4:04:08 PM

Good gravy! ... Electronic Data Systems (EDS) $24.13 +27.94% ... halted for trade.

Keene Little : 5/12/2008 4:02:47 PM

At 1403.32 SPX has retraced 50% of the decline from May 2nd so I'm thinking we'll see at least a pullback tomorrow. As I mentioned earlier, bulls will want to see any pullback stay above 1392 (uptrend line from March and the downtrend line from October) and then continue higher again. Of course bulls would be happy to see the current rally just keep heading higher tomorrow. Any break below 1392 would be a heads up that there's trouble and a break below 1388 would pretty much confirm it. A break below Friday's low near 1384 would suggest hard selling is about to take the market down. 60-min chart: Link

Jeff Bailey : 5/12/2008 4:01:58 PM

Hewlett Packard (HPQ) $46.64 -5.06% ... has been halted for trade.

Linda Piazza : 5/12/2008 3:59:13 PM

VIX back down to 17.87. Since about 2:45 Friday afternoon, all 15-minute closes have been at or below the descending 15-minute 9-ema on the VIX's chart. The VIX has risen several times to test that moving average before getting rebuffed, so we can use that moving average as a benchmark for when something might have changed short-term. This is important because the VIX has not only approached a potential support zone on its daily chart but has also done so on its 15-minute chart. Tomorrow, watch for closes above that benchmark as a sign of changes in tenor for the VIX, which would be potentially negative for equities: Link Remember that such early signs can be false ones.

Jeff Bailey : 5/12/2008 3:55:58 PM

Pivot analysis strongly suggest NAKED call short covering.

VIX.X 17.87 ... below your correlative WKLY S1/MONTHLY S1.

James Brown : 5/12/2008 3:53:51 PM

Don't forget that tomorrow is our last day for the OI call play in Arcelor Mittal (MT). We want to exit ahead of its earnings report. Our adjusted target is $96.50 but exiting now (95.58) or near $96.00 would still work. Our entry point was $90.25.

Jeff Bailey : 5/12/2008 3:51:29 PM

Berkshire Hathaway (BRK.A) 122,900 -1.83% ... continues to exhibit weakness after Friday's break below its 01/16/08 low.

James Brown : 5/12/2008 3:51:01 PM

ESRX continue to look bullish here as it rebounds from the bottom edge of its channel.

Jeff Bailey : 5/12/2008 3:50:06 PM

American Intl. Group (AIG) $38.68 -3.97% ... probes its 03/17/08 52-week low.

James Brown : 5/12/2008 3:49:35 PM

OI call play ARA hasn't reached out second target at $88.50 yet but the stock is up 6.8% today to $87.10. I would seriously consider exiting early right here and take some money off the table.

Linda Piazza : 5/12/2008 3:47:52 PM

Time to make your end-of-day decisions, if you haven't done so already. Jane usually pulls up what's happening premarket in the U.S., so she'll probably be posting something in a moment, but I wanted to just mention that we will have potentially market moving FedSpeak going on tomorrow morning before the open. Don't take home more risk than you can afford.

Jeff Bailey : 5/12/2008 3:47:47 PM

May "Max Pain" Theory tabulations (update at Friday's close)

DIA $127.00 ... $1 inc.
SPY $139.00 ... $1 inc.
IWM $71.00 ... $1 inc.
QQQQ $47.00 ... $1 inc.
SMH $30.00 ... $1 inc.
XLF $26.00 ... $1 inc.

Linda Piazza : 5/12/2008 3:43:44 PM

What happens tonight in Japan? The Economic Planning Association provides its May "ESP Forecast Survey." Many companies release earnings, including Nissan, Sumitomo Heavy Industries, and Hitachi.

What about the U.K. and Europe? The U.K. has some April numbers related to inflation (CPI, etc.) at about 4:30 AM ET tomorrow morning and some numbers related to housing both tonight and then tomorrow morning, but that's about all I see for now.

Jeff Bailey : 5/12/2008 3:43:01 PM

Pacholder High Yield (PHF) ... as of 5/08/08 close, PHF reported NAV of $8.70.

On 12/31/07, this closed end fund reported NAV of $9.16.

Jeff Bailey : 5/12/2008 3:38:44 PM

iShares Russell 2000 (IWM) $73.04 +2.13% ... while not all small caps have "junk rated" debt, may be a group that would have greater difficulty under the backdrop of tighter credit standards. IWM closed $75.90 on 12/31/07. At current levels, roughly 3.77% below its 12/31/07 close.

Maintaining my posture/analysis from 12/31/07 of "modest recession" in 2008 at this time.

Jeff Bailey : 5/12/2008 3:33:55 PM

iShares iBoxx High Yield (HYG) $98.82 -0.18% ... tracked in the "Beetle's Balanced Benchmark", this ETF's 12/31/07 close was $100.72.

So... roughly 1.88% below its 12/31/07 close.

Linda Piazza : 5/12/2008 3:33:32 PM

If, however, the SPX should end the day by pulling back and producing a consolidation-type day with a small-bodied candle, the confusion I've noted in my 3:25:48 post won't make me look so bamboozled. I don't care whether I look bamboozled or not because the markets are going to make all of us look dopey from time to time and you'd better be ready to be wrong if you're going to trade, but I do care what happens to trades our subscribers might have open. For that reason, because I'm still picking up on some not-quite right feelings, however wrong they've been all day, be sure to have profit-protecting plans in place. The SPX's 30-minute 9-ema is now just under 1399.

Jeff Bailey : 5/12/2008 3:28:43 PM

QQQQ $49.13 +1.90% ...

Jeff Bailey : 5/12/2008 3:27:05 PM

Morgan Stanley High-Tech (MSH.X) 597.17 +2.24% ... retraces 50% of its 10/11/07 high to recent 01/23/08 low.

Linda Piazza : 5/12/2008 3:25:48 PM

So, I'm wondering if the consolidation that I thought was likely to take place between 1392-1394 and 1396-1399 is instead going to take place between 1405-1408 and 1396-1399? I'm glad I'm not initiating new trades today because I'd have trouble deciding on a bias. I've said it before but I used to think it was a failure not to be able to decide on a certain bias, until I noticed how many days when I felt that way that the markets ended up with some kind of consolidation-type candle. It wasn't always just me and my failure to decide, I learned. Sometimes, I was picking up on a mixture of signs that pointed to indecision by more market participants than just me.

That doesn't seem to be the case today, as others writing on this space and market action itself seem firmly slanted toward the positive. Today is just one of those days that I don't have a good feel for what's going on and the tools I usually rely upon don't, either.

Linda Piazza : 5/12/2008 3:21:05 PM

VIX now 18.01.

Keene Little : 5/12/2008 3:09:33 PM

I like James' analysis on the home builders (2:51 PM). It ties in with the chart I've been regularly showing for this sector and while I show the possibility for a rally leg up to the top of a rising wedge pattern from the January low (shown in pink), I'm thinking it will break down soon (dark red). Link

The sharp drop from early April was followed by essentially a triangle consolidation pattern (almost a rectangle) with the requisite a-b-c-d-e wave count (to the May 7th high). It's currently bouncing off support, as James pointed out, but I think it will break and then I believe we'll see this index chop its way lower over the next several months to a low that might only be a minor new low below January's.

Jane Fox : 5/12/2008 3:10:03 PM

I am a huge fan of NPR and in particular a program called "This American Life." Last week's program was an excellent explanation of the credit crisis we are currently in and how we got here. It was like the "The Perfect Storm."

If you are interested in listening to this excellent program go to Link . The program is called "The Giant Pool of money."

Jeff Bailey : 5/12/2008 3:09:22 PM

In tonight's market wrap you'll note my "junk bond" Pacholder High Yield (PHF) $8.35 +1.82% may threaten to close above its still trending lower 150-day SMA ($8.27), but still below its 200-day SMA ($8.49). We will also take note that the closed-end junk bond fund, which spits off a $0.075/monthly dividend starts to creep subtly above its 12/31/07 close of $8.10.

Linda Piazza : 5/12/2008 3:07:46 PM

In my 11:04:33 post relating to the VIX, I mentioned that on the daily chart, the VIX had a much lower potential target than 18.54, not mentioning it then because it wasn't officially set up by a daily close beneath the Keltner line setting it. The VIX has however dropped all the way toward that potential target, now at 17.40. The VIX is 17.79 as I type. This target is important because it can also be potential support. The last time the VIX hit or approached this particular target was 5/02, and the SPX hit its recent high that same day, too, before turning down through its rising wedge again. The time before that had been last October 11.

So, while the VIX can has a little to go before hitting that potential downside target and although it can of course just slide down this now turning lower Keltner line, it makes sense to examine stops on bullish trades, too, as the VIX approaches potential support and the SPX again approaches resistance.

Jeff Bailey : 5/12/2008 3:05:38 PM

Bond market closes ... 13-week Yield finished up 10 bp at 1.75%. 5-year yield was up 1.9 bp to close with a 2.98% yield having fallen to a session low of 2.922%. The benchmark 10-year bond's yield rose 0.8 bp to finish 3.775%, while the longer-dated 30-year bond's yield fell 0.2 bp to 4.522%.

Jane Fox : 5/12/2008 3:04:26 PM

WASHINGTON (MarketWatch) -- The outlook for the U.S. economy remains very uncertain because the credit markets and housing sector haven't stabilized, Charles Evans, president of the Chicago Federal Reserve Bank said Monday.

"The path forward may be uneven," he said. Still, Evans said his forecast is for growth to slowly improve and for inflation to slowly moderate. By the end of next year, growth should be back to its potential of around 2.5%, while inflation should be back in the Fed's target zone of 1.5% to 2% by 2010.

Despite unprecedented moves by the Fed to provide liquidity to banks and other financial institutions, credit markets have not yet healed.

"We have seen a broader disruption of credit flows, even than those of the early 1990s," he said. "This suggests we may again be in for a period of weak growth."

Evans said the weakness should persist. Credit is still being restricted, consumers and businesses are cautious, and housing remains a drag on growth.

Jeff Bailey : 5/12/2008 3:02:07 PM

13-week yield up 10.0 bp at 1.750% ... now within 25 bp of current fed funds target.

Linda Piazza : 5/12/2008 3:01:42 PM

The A/D line is currently 1255. It hasn't quite yet hit its upside potential target, earlier at 1475 but now risen to 1556. So far, though, it's still hitting higher highs and higher lows as it zigzags higher, and bulls want to see that continue. I'm not at all feeling comfortable with some of the setups I'm seeing today, but you at least know you want to see the A/D line corroborating what you're seeing on the indices.

Linda Piazza : 5/12/2008 2:55:13 PM

The SPX has today established a pattern of finding support on pullbacks at its 30-minute 9-ema and then bouncing from that moving average. That moving average is now 1397.69. For the OEX, it's 643.30.

Jeff Bailey : 5/12/2008 2:51:49 PM

Treasuries have seen some notable reversals since this afternoon's statement regarding tomorrow and Wednesday's auction amounts. With some supply coming to market near-term, 5-year yield now up 1.2 bp at 2.973%. 10 and 30 yields fractions lower now.

James Brown : 5/12/2008 2:51:28 PM

The housing stocks might be poised for a bounce. The Dow Jones U.S. Home Construction index (DJUSHB) is bouncing from the bottom of its trading range and its trendline of higher lows. Chart: Link

Here is a chart of the XHB home builder ETF for comparison. chart: Link

Jeff Bailey : 5/12/2008 2:48:06 PM

The pound did reverse some notable weakness from earlier this morning after inflation data at the wholesale level and Britian's PPI Input rising 2.4% month-over-month, which was above economists' forecast for a +1.8% gain. While inputs were up 2.4%, PPI Output m/m was up a more modest 1.4%, but still above economists forecast for a 0.6% rise. In addition to PPI figures, Britain's trade balance showed a $-7.4B deficit, slightly less than the $-7.5B forecast.

Keene Little : 5/12/2008 2:45:00 PM

CME is another stock that I've been keeping an eye on and hoping for some clues as to which way it's going. But so far it's a bit of a flip of the coin with a leaning towards the bearish camp. In the bulls' favor, the pullback from the high near 525 on April 21st could easily be interpreted as a bull flag. Another rally leg up to its broken uptrend line from April 2005, currently near 600, could be the next move. Link

The bearish setup is for a small bounce to test its downtrend line from January, currently near 487, and its 50-dma at 488 before dropping sharply lower and heading for a downside Fib projection at 338.

I have the key level for the upside at 525 but a bullish heads up would be a break above 500. I currently prefer the short side on CME against that high near 500 on May 5th.

Linda Piazza : 5/12/2008 2:43:42 PM

The SPX got through that 30-minute resistance this time after falling back the previous time it was tested. Next potential upside target for the SPX is now 1407.43, but I have to say that the SPX is acting strangely today with regard to the Keltner analysis and to other usual measures. I said since early this morning that the shape of the chart (not Keltners) suggested a move up toward 1396-1399, with slightly different levels suggested at slightly different times, but then it looked likely that the SPX would pull back toward 1392-1394 and then we'd see. The Keltner setup was different during that early morning period, though, showing a potential move down, so the Keltner setup wasn't realized. The markets were more bullish than they appeared according to the Keltners. Now I'm not certain about this upside target, either, and whether the Keltners are any more trustworthy to the upside. The daily charts shows the SPX moving into a consolidation zone.

James Brown : 5/12/2008 2:41:25 PM

Retailers are being lead by gains in AnnTaylor (ANN), which is up almost 17% to $28.70 after the company raised its Q1 earnings guidance. Company sees profits in the 45-47 cent range versus previous guidance in the 35-40 cent range.

Jeff Bailey : 5/12/2008 2:40:59 PM

Major Global Indices, Currencies, USO and GLD Link

Asian and European equity markets closed. Dow thru GLD still trading, but values taken within last 15-minutes.

As you can still see, a very direct tie with $/yen and equities. Euro has crept up a bit vs. $ since last Monday, but global demand for oil seems to be continued overriding reason for oil's strength. Euro/$ rather tied to gold.

James Brown : 5/12/2008 2:39:11 PM

Jeff mentioned the Retail sector earlier today. Retailers and Broker-dealers are some of the best performing groups today. The RLX is up 2.4% and the XBD is up 2.4%.

James Brown : 5/12/2008 2:36:33 PM

Noticing that Visa (V) is under performing down 2.1% to $81. A 38.2% Fib retracement of its $55.00-90.00 run would be about $76.50.

James Brown : 5/12/2008 2:34:11 PM

The most recent data listed short interest at 8.5% of SINA's 53.2 million-share float.

James Brown : 5/12/2008 2:33:31 PM

Sina Corp. (SINA), yet another Chinese Internet stock, is up 5.8% and breaking out over resistance near $50.00 today. SINA had been stuck in a $45-$50 trading range for more than two weeks.

James Brown : 5/12/2008 2:31:53 PM

Sohu.com (SOHU), another volatile Chinese Internet play, is up 8% to a new all-time high at $82.00. Shorts are getting killed. The most recent data listed short interest at more than 12% of the 20.5 million-share float.

James Brown : 5/12/2008 2:30:22 PM

Keene mentioned GOOG and it made me think of BIDU. This volatile stock is up more than 5% today (about $18) to $364 following a three-day sell-off last week.

James Brown : 5/12/2008 2:28:52 PM

Following up on my comments on the Defense sector... shares of General Dynamics (GD) are breaking out from a two-week trading range. The stock is up 1.3% and trading above short-term resistance in the 91.75 region. The P&F chart is bullish with a $97 target (might as well be $100).

Keene Little : 5/12/2008 2:28:52 PM

I've been watching GOOG for the past few days for some clues and right now it's leaving me guessing. The pullback from its May 2nd high looks corrective and has me thinking bull flag. A rally above 605 would suggest a move up to at least 620 (62% retracement of its November-March decline) and possibly 650 before possibly pulling back a little deeper. Link

But so far the broken uptrend line from March 2005 has remained resistance and I would remain short GOOG below it (currently 594) and then long above 605.

Linda Piazza : 5/12/2008 2:24:35 PM

Potential resistance on 30-minute closes for the SPX at 1398.50 and then 1400.35. For the OEX, it's 644.68-645.05.

Keene Little : 5/12/2008 2:20:15 PM

So far the pullback from the high was a 38% retracement of today's rally so if it presses higher from here then we've got some bullish signals there. But watch for the possibility for another leg down as part of a larger pullback correction.

Jeff Bailey : 5/12/2008 2:15:13 PM

02:00 Internals found at this Link

Linda Piazza : 5/12/2008 1:52:28 PM

I'm back to see that although the SPX did in fact punch up to 1400 (1400.04, to be exact) both 15-minute and 30-minute closes were beneath their respective resistance levels. that's now from 1398.55-1399.39 on 30-minute closes. The SPX is pulling back as I anticipated it might do after hitting that level, but whether it will make it back to the 1392-1394 level and chop around there for a while, as I thought might happen, I'm not sure. The SPX now has potential support on 15-minute closes from 1393.40-1394.87.

Keene Little : 5/12/2008 1:18:36 PM

Right now one of the risks to those who are long is that the bounce off Friday's mid-day low is finished. It's a 3-wave bounce with the 2nd leg up for SPX achieving 162% of the 1st leg up at 1400. It's a big drop back down to confirm the bearish setup but a drop below 1388 would now confirm the likelihood of a stronger selloff coming. That's the bearish potential and something to think about if you're long and hoping for a stronger rally into opex.

The bullish setup is for only a 38%-62% retracement of the rally off Friday's low and then a continuation higher. Even for a more bearish scenario it would be more typical to see a larger upward correction that runs into Wednesday/Thursday and achieves SPX 1408 (62% retracement of the drop from May 1st). That might mean a pullback to about 1392 before getting another leg up. SPX 1392 would be a 50% retracement of the rally off Friday's low and then set up a bounce with two equal legs up to 1408.

Jeff Bailey : 5/12/2008 1:15:14 PM

Research in Motion (RIMM) $141.88 +6.84% ... #6 most active now. This is a new 52-weeker.

Jeff Bailey : 5/12/2008 1:11:39 PM

SPY $139.80 +0.64% ...

Jeff Bailey : 5/12/2008 1:11:26 PM

DIA $128.53 +0.80% ...

Jeff Bailey : 5/12/2008 1:11:05 PM

$/yen 103.60 +0.76% ... slips back under its WKLY Pivot.

Jane Fox : 5/12/2008 1:05:51 PM

Needless to say all markets are well above their overnight ranges. Link

James Brown : 5/12/2008 12:56:44 PM

Deere (DE) is already an OI call play and shares are up 3.2% to $89.11. Our short-term target is $89.95-90.00. Our secondary target is $94.00.

James Brown : 5/12/2008 12:53:42 PM

Trade Idea: Caterpillar (CAT) - This Dow-component is bouncing, up 2.2% to $83.57, and is getting close to breaking out through the top of its four-week trading range. Readers might want to consider buying calls above $84.00. There is potential resistance at its all-time high of $87.00 back in July 2007. chart: Link

Jane Fox : 5/12/2008 12:42:59 PM

SPX daily chart has retraced to the 23.80% fib level from the May 6th highs. That is not a very deep retracement. Link

Jane Fox : 5/12/2008 12:26:03 PM

DATeline WSJ - A settlement in the Clear Channel case appears imminent, with the banks agreeing to fund the private-equity buyout of the radio company at $36 a share

Jeff Bailey : 5/12/2008 12:21:13 PM

Shares of Cumulus Media (CMLS) $4.45 -23.40% plunged lower this morning after its $530 million leveraged buyout with radio broadcasters fell apart. CMLS were set to get $11.75 a share. Merrill Lynch's private equity arm said the two parties just couldn't come to agreement on final terms. CMLS will get a $15 million breakup fee. As of recent SEC filings, CMLS had 43.66 million shares outstanding; 38.18 million share public float.

Linda Piazza : 5/12/2008 12:17:14 PM

I have to leave for up to a couple of hours. Try to keep on your toes. Remember the daily 10-sma just above 1400. Don't discount the possibility that could be resistance on a daily close. I'm getting some mixed signals in the signs I watch, as some charts show if this happens or if that happens, the SPX could either roll up to 1407-1409 or it could roll down through the low of the day toward 1381-1383.

Keene Little : 5/12/2008 12:15:51 PM

VIX is always a little tougher to interpret accurately during opex but it will be interesting to see what it does this week. Currently VIX has found support at its previous low in December near 18.30 and the next level of support would be down near 16 which is the low in October. October of course was the high for the stock market. The decline in the VIX is also forming a descending wedge since April and a bottom near 16 could finish the downside pattern (meaning a bottom for the VIX and a top for the stock market bounce). Link

Jeff Bailey : 5/12/2008 12:14:10 PM

12:00 Internals found at this Link

Linda Piazza : 5/12/2008 12:13:58 PM

So, I come once again to a point in which I'm getting mixed signals. The A/D line has currently set a potential upside target of about 1475. It's now 1125, so it obviously has some room to go to the upside before it hits that next resistance, now that it's broken through the 850-870 level. If it continues rising, it's likely to bring the SPX and other indices higher, too. Yet, I see the SPX jammed up against potential resistance at 1398.60 on 15-minute closes and 1398.50 on 15-minute closes. These charts make the most sense if the SPX pulls back from here or from an attempt to push a little higher that is then repulsed, and drops perhaps to 1392-1394 and chops around there for a while before we truly know next direction. The A/D line and the SPX don't appear to match up closely, then, and they usually do somewhat better, so I'm not sure which to give the most credence again.

As long as the A/D line is climbing, though, I'd expect the SPX to either climb or continue testing resistance. If the A/D line hits that 1475 level, I'd be watchful for advances to stall or if it rolls over before hitting it, and then for the SPX to pull back, but I wouldn't count on too deep a pullback just yet.

And that's all just a guess-timate.

Jane Fox : 5/12/2008 12:09:26 PM

The internals are in sync and bullish. Link

Jane Fox : 5/12/2008 12:08:08 PM

AD line is well into bullish territory now at +1120 and the VIX supports this bullishness.

Jeff Bailey : 5/12/2008 11:59:13 AM

Aluminum Corp. China (ACH) $40.74 -0.58% ...

Jeff Bailey : 5/12/2008 11:58:44 AM

Aloca (AA) $40.33 +3.27% ... post-earnings realease high. Edges above what should have been some formidable near-term resistance.

Linda Piazza : 5/12/2008 11:58:01 AM

The 30-minute charts also show potential resistance at 30-minute closes at 1398.61 for the SPX and 643 and then 645.20 for the OEX. The OEX is again underperforming the SPX on a Keltner basis because, on a Keltner basis the SPX 1398.61 level is congruent to the OEX's 645.20 level, not the currently being tested 643 level.

Jeff Bailey : 5/12/2008 11:50:50 AM

No notable volume "spike" showing up on intra-day chart of XLF.

Jeff Bailey : 5/12/2008 11:50:03 AM

XLF's WKLY Pivot = $26.43.

Jeff Bailey : 5/12/2008 11:49:37 AM

Financial SPDRs (XLF) $26.14 +0.57% ... just shuffled up to #1 most active.

Keene Little : 5/12/2008 11:49:21 AM

The action in the Trannies today could be telling us what to expect next. Even after the FedEx numbers on Friday, there appears to be confidence in the transports. TRAN is forming a potential bottoming formation at its March 2003 uptrend line that it got back above at the end of April. Today's candle is so far a bullish hammer. It takes a break below 5100 to put the bears in control. Link

Linda Piazza : 5/12/2008 11:47:28 AM

The OEX has potential resistance on 15-minute closes currently at 643.89-644.35. For the SPX, that's currently 1396.77-1398.33.

Jeff Bailey : 5/12/2008 11:47:10 AM

PM $42.35 +1.00% and MO $21.16 +1.05% ... MZS-FO $0.84 x $0.93.

Jeff Bailey : 5/12/2008 11:46:04 AM

Dow Jones U.S. Tobacco Index (DJUSTB) 320.32 +0.98% ... Tobacco stocks mostly higher after Supreme Court ends the California class-action lawsuit brought by smokers alleging that the nationwide tobacco settlement violated federal antiturst laws and also allowed tobacco companies to raise cigarette prices.

Keene Little : 5/12/2008 11:45:06 AM

So much for a pullback (at least for the techs) as the push higher continues.

James Brown : 5/12/2008 11:40:28 AM

RIMM surging 5.2% to a new high... $139.94.

Jeff Bailey : 5/12/2008 11:38:25 AM

Shares of Clear Channel (CCU) $32.95 +9.83% on the move today after a judge suddenly adjourned the start of today's trial regarding the funding of $19.4 billion buyout of the company and rescheduled the trial for tomorrow. The decision came without explanation. Lawyers refused comment regarding a potential settlement in the works.

Linda Piazza : 5/12/2008 11:33:33 AM

The A/D line is currently 915. It broke above that 850-860-ish historical resistance and has now come back down to test it. Equity bulls want to see that support maintained and for the A/D line to push much higher. The 30-minute Keltner chart is showing that the A/D line is at a possibly tenuous level where gains could be tapped unless the bulls muster more strength.

James Brown : 5/12/2008 11:30:06 AM

Shipping stocks are up again...

DRYS +2.7%
EXM +6.3%
FRO -1.1%
DSX +2.0%
GNK +3.0%
PRGN +1.2%
TBSI +5.0%
FREE +1.1%

James Brown : 5/12/2008 11:27:00 AM

Exit Alert: JOYG - JOYG finally hit our first target in the $79.50-80.00 range today. The intraday high is $79.85. We do have a secondary, more aggressive target in the $84.00-85.00 zone but it has to break round-number resistance at $80.00 first.

James Brown : 5/12/2008 11:24:28 AM

Trading Idea: IBM is breaking out over resistance at the $125.00 level. This could be a new bullish entry point.

James Brown : 5/12/2008 11:22:45 AM

The Brazilian Bovespa market is down about 0.3% but that isn't stopping a 3.1% rally in shares of ARA, an OI call play.

Jane Fox : 5/12/2008 11:21:18 AM

SAN FRANCISCO (MarketWatch) - The U.S. dollar rose against most other major counterparts Monday on signs of "verbal intervention" by U.S. officials seeking to boost the greenback.

In mid-morning trading, the U.S. dollar index rose to 73.058, up from 73.03 in late New York trading Friday

The greenback was buying 103.63 Japanese yen, up from 102.95 Friday, but flailed against its European counterpart. One euro bought $1.5487, up from $1.5473 Friday.

A weekend report in The Wall Street Journal said U.S. officials were attempting to put a floor under the currency, analysts said.

A shift in language in the statement that followed last month's meeting of Group of Seven finance ministers and central bankers highlighted concerns over excess volatility in currency markets, a nuance that traders largely saw at the time as coming at the behest of European officials worried about the weak dollar's impact on euro-zone exporters.

An unnamed U.S. Treasury official, however, said the change was pushed by the United States as part of an international effort to halt the dollar's slide.

James Brown : 5/12/2008 11:20:35 AM

Interesting story today... the BBC is reporting that South Korea has killed the entire poultry population in the city of Seoul to curb the spread of bird flu.

The latest action involved 15,000 birds. Last month the virus was discovered in the southern part of the country and the government responded by killing almost seven million birds (source:BBC).

CBSMarketwatch is reporting that the country's government plans to double its stockpile of Tamiflu vaccine to 2.5 million treatments.

Linda Piazza : 5/12/2008 11:20:34 AM

If it's not already clear, I'm not getting a good read on the markets this morning. I said earlier (10:00:14 post) that the shape of the chart suggested the likelihood that "the SPX is going to rise toward 1397.30-1399.11 and then pull back again," but other chart characteristics were setting up a potential downside target at the time. I didn't know which setup to give the most credence. Now that the SPX has risen, however, both Keltner and other evidence converge to suggest potential resistance on 15-minute closes from 1396.79-1398.99. I would watch for the possibility that the SPX could, after testing this zone, roll back toward 1390-1392.

Keene Little : 5/12/2008 11:16:05 AM

It looks like this morning's bounce completed a 5-wave move and therefore we should now see a retracement (38%-62%) of the bounce before proceeding higher. That's the bullish view. The bearish view is that this morning's rally leg has completed an a-b-c bounce off Friday's low. That's why this morning's low is now the important level for bulls--any break lower could usher in much stronger selling.

Jeff Bailey : 5/12/2008 11:15:50 AM

Most Actives ... MSFT +1.63%, YHOO -3.23%, SPY +0.48%, C -0.04%, MCEL -33.33%, QQQQ +0.80%, NVDA -1.68%, ORCL +1.71%, S +1.91%, CCU +8.73%

James Brown : 5/12/2008 11:13:30 AM

Cellcom (CEL) , an Israeli wireless telecom company, is up 4.1% and challenging resistance near $35.00 (and its all-time highs) after being upgraded this morning. Chart: Link

Jane Fox : 5/12/2008 11:09:46 AM

Crude went from a low of 110.30 on May 1st to a high of 126.27 May 9th. Conventional technical analysis wisdom would tell you this market should retrace today but as you can see it is not.

I do not short Crude but I am expecting a retracement like it had at the end of April, (the 3 red candles from April 29th to May 1st). Link

James Brown : 5/12/2008 11:07:44 AM

Defense Index (DFI) looks bullish as it bounces from a 38.2% Fibonacci retracement of its three-week rally. Chart: Link

Linda Piazza : 5/12/2008 11:04:33 AM

The VIX has fallen below nearest potential Keltner support on 15-minute closes and has now set a tentative downside target of 18.54. On the daily chart, it has an even lower potential target but we haven't yet seen a daily close and that that downside target has not yet been set. So, for now, bulls should be watchful if the VIX should drop toward 18.54, watching for bounce potential in the VIX and rollover potential in the equities. For now, I'm not finding any setup particularly trustworthy, in any entity.

Jane Fox : 5/12/2008 11:03:54 AM

The TRIN has hit a high of 1.23 but has now fallen to 1.01. This internal is giving us fair warning the bulls don't have full control today.

Jeff Bailey : 5/12/2008 11:02:59 AM

A quick review of MBIA and 05/06/08 MM had MBIA (MBI) trading $11.39, and "popping" to $12.00 that evening after company released "Letter To Owners."

So far today, MBIA has seen regular session range of $9.25-$10.54.

Analysis here is that there isn't any real "upside surprise" or shock to market participants from today's earnings.

Jane Fox : 5/12/2008 11:01:58 AM

VIX continues to make new daily lows as the AD line continues to make new daily highs. This not a runaway bull rally but the bulls do have the reins.

James Brown : 5/12/2008 11:01:32 AM

Just noticing the graphic on the TV that says crude oil is up 352.8% over the last five years.

James Brown : 5/12/2008 10:58:12 AM

Energy stock Encana (ECA) is up 7.3% to a new high at $92.25 after being upgraded to a strong buy with a $92 price target.

Over the weekend, ECA, Canada's largest natural gas company, said it is splitting into two companies - an oil company and a natural gas company.

The oil company's working name is IntergratedOilCo and the natural gas company is also going with an equally original name of GasCo. ECA expects the split up to occur in early 2009. (The two operations will be given new names before the transaction is completed.)

Jeff Bailey : 5/12/2008 10:51:55 AM

BIX.X has been the only equity-based index tracked in my Pivot Matrix that has seen trade at/below its MONTHLY Pivot so far in May.

Keene Little : 5/12/2008 10:51:47 AM

SPX is fighting to get back above its downtrend line from October, currently near 1394. Next up would be its broken uptrend line along the lows since April 22nd, near 1397.

Jeff Bailey : 5/12/2008 10:50:51 AM

BIX.X 243.91 +1.22% ... gets a trade back at MONTHLY Pivot.

Jeff Bailey : 5/12/2008 10:49:36 AM

MBIA's Earnings Q1 Earnings Press Release (earlier) Link

Corrected revenues release should be ... "Total revenue for the first quarter of 2008 was $711.4 million (before realized and unrealized gains and losses), down 4% from $741.7 million in last year's first quarter.

Jeff Bailey : 5/12/2008 10:44:14 AM

MBIA Inc. (MBI) $10.28 +9.11% ... issues correction to previously reported Q1 Revenues. Press Release Link

Linda Piazza : 5/12/2008 10:42:15 AM

The SPX is again testing potential resistance on 15-minute closes, now near 1390.91. The SPX is above it as I type but the 15-minute period is not over, of course. Next resistance is 1393.42, but if the SPX gets some steam behind its move, then a test of the higher and potentially stronger resistance currently near 1396.92-1398.96 might occur. The shape of the chart suggests it could be, as I noted earlier. I would have profit-protecting plans in place then, however, watching for a potential pullback toward 1390-1392 again before we know what's what.

Jeff Bailey : 5/12/2008 10:41:29 AM

Sector action has been mixed to higher. Oil Service -1.80 has been percentage loser. Retail +1.11%, Networking +1.00% and NASDAQ Telecom +1.00% percentage gainers.

Jeff Bailey : 5/12/2008 10:39:53 AM

NDX and SMH tried just after the open.

Jeff Bailey : 5/12/2008 10:39:33 AM

RUT.X 722.89 +0.39% ... sticks its head above WKLY Pivot.

Keene Little : 5/12/2008 10:36:54 AM

The techs got the biggest bounce off this morning's pullback so if you like the potential for a long play, trading the techs (or small caps) looks like the better bet than the blue chips. A rally to new daily highs would be a good indication that a bottom is in for today.

Linda Piazza : 5/12/2008 10:32:44 AM

This is why I can't assess the likelihood of support being tested, because there's still some sorting out going on. Beginning Friday when 30-minute charts set and then erased downside targets then near 1372-1374, it became apparent that bears might have the ability to set those targets but maybe not the strength to carry through. The propensity for the downside targets to be met is still questionable, pointed out by targets that get set and then not met.

Set against this all is a weekly candle last week that was bearish.

James Brown : 5/12/2008 10:28:11 AM

Where is the bottom in LNG? Cheniere Energy (LNG) reported earnings on Friday and beat estimates by 2 cents. Estimates were for a loss of $1.08. Yet the stock was downgraded (again) this morning with LNG's price target being cut from $20 to $1. A second firm downgraded the stock and cut their price target from $37 to $7.

The stock is down 11 weeks in a row and trading down 20% today alone to $4.25. LNG hasn't traded under $5.00 sine December 2003.

Cheniere Energy is involved in the construction and operation of onshore liquefied natural gas (LNG) terminals and pipelines.

Jeff Bailey : 5/12/2008 10:25:46 AM

10:00 Internals found at this Link

Linda Piazza : 5/12/2008 10:19:55 AM

The OEX has potential support on 15-minute closes at 637.90, but it could be light support. Further support extends down to 636.44-636.82. I can't rate the chances for that uspport to be tested as there's been some strange market action over the last few trading days, with some downside targets not being met.

James Brown : 5/12/2008 10:19:26 AM

Trading Idea: Last week I mentioned that the Shaw Group (SGR) might be a bearish candidate if the stock broke down under support. Shares are slipping sharply, down 3.5% to $47.54. Link

James Brown : 5/12/2008 10:16:23 AM

On CNBC...

Last month, for the first time ever, emerging market demand for gasoline surpasses U.S. demand.

CNBC listing gasoline prices (per gallon) for countries that have price controls and subsidize prices for consumers. These countries and their refining businesses are losing money every day to provide gas this cheap.

Venezuela.. $0.19
Iran ...... $0.38
Libya ..... $0.49
Kuwait .... $0.79
Egypt ..... $0.86
China ..... $2.42

For comparison, a few more countries...
Nigeria ... $1.93
Malaysia .. $2.00
Indonesia . $2.16
Mexico .... $2.36
India ..... $3.87

Linda Piazza : 5/12/2008 10:13:34 AM

A/D line succumbed to that resistance and is now at 200. The 15-minute 9-ema is now near 32 and bulls want that to hold, bouncing the A/D line back again. They don't want it to slip below -200. I would counsel equity bears to watch if the A/D line does test -200 as that could be potentially strong support.

Linda Piazza : 5/12/2008 10:11:52 AM

The SPX has potential support on 15-minute closes at 1385.12 but it's light support. Next is 1380.90-1382.40.

James Brown : 5/12/2008 10:07:13 AM

International banking giant HSBC Holdings (HBC) reported that it would report a first quarter profit. One of the few banks that can claim a profit last quarter. The stock is up 2.8% to $86.45 and completely reversing Friday's weakness.

HBC did announce a $3.2 billion subprime write down and the bank does see the U.S. moving into a recession this year.

Keene Little : 5/12/2008 10:04:47 AM

So far we've got a little more than gap closure on ES but YM has about 10 points to get closed. Techs and small caps are a little stronger this morning.

James Brown : 5/12/2008 10:01:50 AM

FMC Tech (FTI) , an oil service company, is seeing some profit taking, -3.7% to $75.00, following last week's big surge higher. Broken resistance near $70.00 should be support.

A 38.2% Fib retracement of FTI's two-day rally would be close to $75.00...

Linda Piazza : 5/12/2008 10:00:14 AM

The SPX's 15-minute 9-ema is now about 1388.80, with the SPX currently testing that potential support on 15-minute closes. The SPX did find resistance on 15-minute closes at Keltner resistance now at 1391.24-1392.27, setting up the possibility that it will be pushed back toward 1385 or perhaps even 1381-1382.60, but not yet turning that into a probability. Too many mixed signals this morning to call anything a probability.

If I just look at the shape of the chart, I'd think that it was more likely that the SPX is going to rise toward 1397.30-1399.11 and then pull back again before we know the answer. If I look at Keltner levels, I get that potential decline.

James Brown : 5/12/2008 9:57:16 AM

Dow component AIG continues to fall following last week's plunge. Shares are down 1.3% and trading under potential round-number support at $40.00 after Goldman Sachs downgraded the stock today. A week ago AIG was trading at $49.00.

Linda Piazza : 5/12/2008 9:56:23 AM

A/D line 455 now, with this 15-minute period's candle engulfing almost the entire range of the first 15-minute period's candle. There's potential support now being tested, now near 470, but equity bulls don't want to see the A/D line keep dropping heavily.

James Brown : 5/12/2008 9:54:36 AM

Biotech firm ImClone Systems (IMCL) is gapping down under its 100-dma and trading down about 4% to $43.00 after being downgraded this morning.

James Brown : 5/12/2008 9:52:55 AM

RIMM is definitely gunning for the iPhone. Last March AAPL announced a $100 million fund to invest in companies willing to develop tools and applications for the iPhone and iPod. With RIMM's "Bold" launch today RIMM is announced a $150 million fund to invest in companies willing to write software for the Blackberry devices. (source: AP)

Linda Piazza : 5/12/2008 9:50:30 AM

Keltner outlook on the VIX: This may be different from Jane's outlook and I urge you to study both. The VIX has potential support at 19.13 on 15-minute closes. It tested that level during the first 15-minute period with a low at 19.11 but a 15-minute close at 19.16, but it's rising now. It's rising into what might be tough resistance, extending up from about 19.31 to 19.50. It's 19.26 as I type.

James Brown : 5/12/2008 9:48:46 AM

Build a Bear Workshop (BBW) is down more than 12% to $9.00 after being downgraded this morning...

Linda Piazza : 5/12/2008 9:47:49 AM

The TRAN has so far not sustained levels below that best-fit trendline off Friday's early morning low although it's certainly breached it. I'm getting different readings from the A/D line (testing resistance) and the TRAN (testing support), so remain cautious about sticking too strongly to any one prediction for the day.

Linda Piazza : 5/12/2008 9:46:44 AM

The A/D line punched up to 859, just above historical resistance at 853, testing that potential resistance. This is a sort of make-it-or-break-it level for the A/D line. It needs to sustain levels above that. Currently, it's 807, having pulled back some.

Jane Fox : 5/12/2008 9:46:11 AM

VIX is making new daily lows supporting the bullish side.

Jane Fox : 5/12/2008 9:45:44 AM

As Linda has been reporting, the AD line is +749 certainly not bearish but not overly bullish.

Linda Piazza : 5/12/2008 9:43:22 AM

Others have reported on the FDX news, including Jim this weekend and James this morning. As I type, the TRAN is lower, but it so far holds above a best-fit rising trenldine off the early Friday morning low. Sustained values beneath 5169.20 or so would be a sign that the trendline defining what looks like a potential bear flag isn't holding any longer and would set up a potential downside targte of 5136.20-5151. This is something for OEX and SPX bulls to watch, too, as they don't tend to go too far one direction if the TRAN is going the opposite. The TRAN is 5169.99 as I type.

James Brown : 5/12/2008 9:41:21 AM

Everyone is expecting AAPL to announce its 3G iPhone soon. A number of AAPL stores are sold out of their current inventory of iPhones.

James Brown : 5/12/2008 9:40:21 AM

Yet another firm had raised their price target on AAPL today... this one from $210 to $220.

Linda Piazza : 5/12/2008 9:39:05 AM

For OEX traders, the OEX has potential resistance that extends up to about 641 on 15-minute closes. For both OEX and SPX traders, I'd urge watching the A/D line, currently testing resistance up to just above 850 while the SPX and OEX test resistance, too. As I type, the A/D line has just risen to 757.

Linda Piazza : 5/12/2008 9:37:02 AM

Keltner outlook on the A/D line: The A/D line gapped right up to test potential resistance near 460 on 15-minute closes. The A/D line is currently just above that, at 621, rising up to test a horizontal resistance level that extends up to 853.

In other words, the A/D line tests several types of resistance first thing this morning. It's not unusual to see it climbing up to test this same level and then turn back (as happened Thursday morning, for example), so watch for rollover potential or for a sustained break above about 850 as a sign of what's to happen. Just don't count on the current action as being anything more than testing, as yet.

Jane Fox : 5/12/2008 9:35:54 AM

HONG KONG (MarketWatch) - An earthquake measuring 7.8 on the Richter scale hit China's southwest Sichuan province Monday afternoon, killing up to 5,000 people, according to Chinese news reports.

First report said killed 107 but now it is up to 5000.

James Brown : 5/12/2008 9:36:01 AM

Apple Inc (AAPL) is also gapping open, +1.55, to $185.00

Before the bell an analyst firm had raised their price target from $185 to $205.

James Brown : 5/12/2008 9:32:27 AM

Research In Motion (RIMM) is trading higher as it announces the launch of its much anticipated Blackberry "Bold" also known as the "9000". This is RIMM's attempt to compete with Apple's iPhone.

RIMM is trading up around $4 to $136.60.

Keene Little : 5/12/2008 9:28:29 AM

The stock market will open in the green so the bulls will have a good start. As mentioned last night, the market has successfully held support so far and therefore if we see gap closure this morning it could be a good time to try the long side. Risk is to Friday's low.

James Brown : 5/12/2008 9:25:04 AM

The FXE Euro ETF looks poised to open lower. The FXE had bounced toward potential resistance near $155 and its 10-dma on Friday but is trading down about 30 cents t $154.65 this morning.

James Brown : 5/12/2008 9:21:52 AM

Just a reminder... FedEx (FDX) issued an earnings warning after the closing bell on Friday claiming higher fuel costs.

The stock closed around $90.00 and looks set to open under $88.00. This is going to put pressure on the transports.

Jane Fox : 5/12/2008 9:20:18 AM

The doji Gold made on Friday was a clue that this market would be under pressure today. I am long Gold with a stop just under yearly lows at 845.00 Link

Linda Piazza : 5/12/2008 9:20:10 AM

SPX futures are slightly higher this morning. First, let's put last week's action into perspective, beginning with some discussion about the weekly candle. That weekly candle was a tall red one that was very nearly a classic bearish engulfing candle. Last week's range, from the 1421.57 high to the 1384.11 low, nearly equalled the previous week's range, from 1422.72 to 1383.07 exactly, only going in the opposite direction. Although not a classic bearish engulfing candle because of a few technicalities, it was close enough that we should consider that a reversal signal.

We've had others of those, however, with no reversal occurring. Still, we should put our further observations into that context. So, if we're looking for a bounce in early trading, we should remain wary of rollover potential without counting on that rollover. For example, even if the SPX is going to roll over eventually toward a test of the 30-sma, which I think possible, it's still got to remain below that rising trendline off the March low before it can do so, and there's going to be a lot of bullish buying at that trendline to get through before any such deeper downturn can occur. If the bulls eventually soak up all the supply, more would-be bulls are going to join them and the whole potential reversal could come to naught. However, I still believe that market participants should factor in potential vulnerability to that 30-sma, now near 1376.68, into their trading plans. In other words, if bullish and buying that trendline, let that potential vulnerability and the bearish weekly candle prompt you to contain your risks and get out at account-appropriate stops if the market isn't behaving as you wished. Because this is opex week, if you're in May options, you need to be conscious that NO movement will also impact your trade, either badly (if you're long options) or beneficially (if you've sold them).

If that rollover is going to appear but the SPX bounces in accordance with futures' levels, where would a rollover first appear? The first place to watch is at potential resistance on 15-minute closes at 1391.19 and then, if the SPX zooms past that, we'll watch other levels, particularly the 1397.50-1399 level, if it should get that high.

James Brown : 5/12/2008 9:18:22 AM

Bond insurer MBIA Inc. (MBI) reported earnings this morning. Wall Street estimates were for a loss of 19 cents a share. MBI announced a loss of $13.03. Yup, that's 13 dollars vs. 19 cents.

MBI closed at $9.43 and looks set to gap open around $9.00 this morning. The stock was trading around $67 about seven months ago.

Jane Fox : 5/12/2008 9:17:08 AM

SPX daily chart is still in an uptrend so the bulls have control here. It wouldn't take much for the bears to take over control though and this proverbial fight between the two has been why these markets have been very tough to trade. Link

James Brown : 5/12/2008 9:14:13 AM

As crude oil pulls back this morning the oil ETF the USO looks poised to gap open lower around $100.50ish. It closed at $102.12 on Friday.

James Brown : 5/12/2008 9:12:47 AM

Foreign market check...

Chinese Shanghai ..... +0.3%
Hong Kong Hang Seng .. -1.5%
Japanese NIKKEI 225 .. +0.6%

German DAX ........... +0.5%
French CAC 40 ........ +0.5%
London FTSE 100 ...... +0.3%

Jane Fox : 5/12/2008 9:03:45 AM

The equity markets have been tough to trade lately because they are just not giving us the range we need to make a living and is why I am testing the Crude market.

Jane Fox : 5/12/2008 9:02:45 AM

Since there were no economic reports released at 8:30 to add volatility to the markets, the futures of the major equity indexes were mostly contained within their previous day ranges overnight. I'm not sure we will get much more intraday either.

The only report out today is the 2:00p.m. Apr US Budget Balance. Expected: -$160B. Previous: -$48.4B. Link

Jane Fox : 5/12/2008 8:53:51 AM

HONG KONG (MarketWatch) - An earthquake measuring 7.8 on the Richter scale hit China's southwest Sichuan province Monday afternoon, and the country's Xinhua news agency reported that 107 people were killed and 34 were injured.

Earlier reports said that four students in Chongqing were killed when school buildings collapsed and a man in Sichuan was killed when a water tower fell. Xinhua also reported that in the Sichuan city of Dujiangyan, nearly 900 students were feared buried when a high school building collapsed.

Measuring 7.8 on the Richter scale, the quake hit at 2:28 p.m. local time (2:28 a.m. Eastern) and was centered 55 miles west-northwest of Chengdu, the capital of Sichuan province, according to the U.S. Geological Survey's Web site.

Hu Jintao, China's president, called for "all-out efforts" to rescue victims of the temblor, Xinhua reported. Premier Wen Jiabao was reported to have arrived in Chengdu and to be on his way to the quake area.

Xinhua said that China's air force has sent two helicopters and that 5,000 troops have been dispatched to help with relief work.

Telecommunications networks in the cities of Chengdu, Chongqing and Zhengzhou were "paralyzed," the news agency reported.

The quake was felt in Beijing, 960 miles to the northeast, as well as in Bangkok, Thailand, and Hanoi, Vietnam.

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