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Keene Little : 5/14/2008 11:27:29 PM

Another chart I showed in Wednesday's newsletter is the VIX. I had shown this chart earlier in the day on Wednesday and said to watch for a drop to the October 2007 low for support. Look how it finished the day--bullish hammer at support following a brief throw-under below the bottom of the descending wedge: Link . If this were a stock I'd be pounding the table to buy it.

Buying the VIX is of course bearish the stock market. The ISEE Index is also flashing a warning with excessive bullish sentiment with a reading of 150 on Tuesday: Link . Setups don't get much better than the NDX and RUT charts with confirmation from the VIX and ISEE. A short play might not work here but I'll take the setup every time it's offered.

Keene Little : 5/14/2008 11:21:35 PM

Thursday's pivot tables: Link and Link

The techs and small caps have been leading the parade this month so when they gave up the ghost Wednesday afternoon I sat up and paid attention. Their daily charts are bearish, especially if Thursday is a down day. NDX left a shooting star at resistance (62% retracement of the October-March decline and at the top of its parallel up-channel from March) and RUT left a gravestone doji at resistance (nearly closed its Jan 4th gap and did a little throw-over above its rising wedge). They could of course each turn around and rally some more but the setup is here--short against Wednesday's highs is the right play.
NDX: Link
RUT: Link

OI Technical Staff : 5/14/2008 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The Market Monitor has been archived.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 : 5/14/2008 5:24:26 PM

US Democrat John Edwards endorsing Obama

Jeff Bailey : 5/14/2008 5:23:26 PM

Yahoo! Inc. (YHOO) $27.13 +2.14% ... shares pop to $27.60 as Icahn says he's moving ahead with proxy battle.

Jeff Bailey : 5/14/2008 5:22:16 PM

Stillwater Mining (SWC) $13.48 +1.65% ... begins contract talks Monday at its East Boulder Mine near McLeod, Montana.

Jeff Bailey : 5/14/2008 4:18:43 PM

Since 12/31/07 close ... DIA -2.68%, IWM -3.29%, SPY -3.71%, QQQQ -4.14%. (does not include dividends paid to date).

Keene Little : 5/14/2008 4:05:01 PM

If we're to continue playing follow the leader then following the techs and small caps is probably not something the bulls are going to be happy doing. Today may have seen an important reversal signal from those two. I'll do my best to figure it out and report what I see in tonight's newsletter.

Linda Piazza : 5/14/2008 4:03:30 PM

The SPX has a potential downside target at potentially strong support on 15-minute closes, at 1403.31 and 1404.50. As long as it's maintaining 15-minute closes elow about 1410.30, it's maintaining that potential downside target, but that doesn't mean that the 1410.30 level won't get retested and the target perhaps reset before it's hit.

Jeff Bailey : 5/14/2008 4:03:12 PM

OEX ticks 645.77 +0.38% ...

VXO.X 18.24 ...

Jeff Bailey : 5/14/2008 4:01:01 PM

Espey Mfg. (ESP) $22.23 +3.39% ... gets a pop on headline numbers. Looks thin.

Jeff Bailey : 5/14/2008 3:58:29 PM

Fitch confirms E-470 public highway authority (Colorado) $423.2MM Revs at 'BBB-'

Jeff Bailey : 5/14/2008 3:56:34 PM

Public Service of Oklahoma soliciting additional 200Mw of renewable resources.

James Brown : 5/14/2008 3:55:41 PM

Trading Idea: OptionsXpress (OXPS) is still rising and just crossed the $22.00 level. This might be a short-term bullish entry point. OXPS isn't a big mover so set some realistic targets.

Linda Piazza : 5/14/2008 3:54:58 PM

Tomorrow is the last trading day for the SPX May options and for options on many other indices. The OEX options trade through Friday's close. I can't put too much emphasis on the impact that might have on trading tomorrow. I can't tell you how many times the move that looked set up on an opex Wednesday or Thursday didn't occur until the following week, postponed by opex machinations. In addition, there are just tons of economic events tomorrow. Jane covers most of those so I won't dwell on them here, but they include Fed Chairman Ben Bernanke speaking in Chicago, right about the time the cash markets open tomorrow. Make your end-of-day decisions knowing that the action that looks set up (either consolidation or an actual downturn) for the SPX might not occur.

Jeff Bailey : 5/14/2008 3:53:00 PM

NASDAQ-100 Heatmap ... updates from 11:42:05 ... DISH +5.64%, APOL +2.51%, UAUA +3.20%, JAVA +3.75%, SNDK +3.99%

WFMI -13.97%, ERTS -3.50%, FISV -2.40%, RYAAY -1.67%, STLD -3.24%

James Brown : 5/14/2008 3:49:56 PM

Readers may want to do some profit taking in ARA, an OI call play. The stock hit $88.14 intraday. That was not enough to hit our second target at $88.50 and the stock is now pulling back. ARA is down a quarter to 86.78.

Linda Piazza : 5/14/2008 3:47:05 PM

Today, the RUT pierced its 200-ema, an important moving average for the RUT, but if it closes anywhere near its current level, it will have fallen back below it by the close, creating a potential reversal signal. To review, the RVX, the RUT's volatility index, gave one of the earliest signals that something was wrong, as it stopped making new lows as the RUT was making new highs. This is just anecdotal evidence because I haven't been watching the RVX long and I can't even get it on a daily chart from my feed yet. I would never count on such divergences as trade entries or exits anyway, but I would certainly use them as I did today, as a warning to keep on one's toes and to keep updating just-in-case trading plans.

Jeff Bailey : 5/14/2008 3:46:27 PM

Might want to find out who the one (1) was that voted against it. 97 voted for.

Jeff Bailey : 5/14/2008 3:45:30 PM

US Senate may finalize a bill halting SPR shipments later today. Just in time as the nation's SPR is currently 97% full.

In my opinion, based on observation, this bill will, or would have miniscule impact on energy prices.

Jeff Bailey : 5/14/2008 3:43:34 PM

Northwest Air (NWA) $9.06 +5.73% ...

Jeff Bailey : 5/14/2008 3:43:01 PM

Delta Pilots approve contract revisions.

DAL $7.87 +6.49% ...

Jeff Bailey : 5/14/2008 3:40:37 PM

$142's breath a sigh of relief.

Keene Little : 5/14/2008 3:40:23 PM

NDX back in the red. That's a complete reversal of today's big gains and obviously not a bullish sign, especially after tagging the top of its parallel up-channel from March (and just barely above its 62% retracement at 2021).

Linda Piazza : 5/14/2008 3:40:04 PM

The SPX is now testing potential support on 15-minute closes at 1410.30. It appears to be falling through it as I type, but don't count it out as potential support just yet. I don't think I need to add that the candle being left behind for today, if the SPX should add at its current level is not a bullish one.

Jeff Bailey : 5/14/2008 3:39:50 PM

SPY slips back below WKLY R1 (see earlier comments regarding closes below prior WKLY S1)

James Brown : 5/14/2008 3:38:25 PM

Traders might want to keep an eye on I H O P Corp. (IHP). The stock might be a bullish candidate on a breakout over $52.00 or its 200-dma. The stock is up 0.4% to $50.90.

Jeff Bailey : 5/14/2008 3:38:12 PM

S&P Cutting Valero Energy's (VLO) $47.56 +0.89% ... $15M unsecured notes to 'BB'

Jeff Bailey : 5/14/2008 3:19:47 PM

MBA's Weekly Application Survey Link

Jeff Bailey : 5/14/2008 3:18:48 PM

VIX.X 17.08 ... WKLY S2 ... you know where it is.

Jeff Bailey : 5/14/2008 3:18:20 PM

RVX.X 22.13 ... WKLY S2 at 22.27

Linda Piazza : 5/14/2008 3:16:06 PM

Hmm. So, it is worthwhile, perhaps to watch the RUT/RVX action just as one watches the SPX/VIX action.

Keene Little : 5/14/2008 3:10:53 PM

The RUT also has tipped over and is breaking below its series of higher lows made today.

Keene Little : 5/14/2008 3:10:09 PM

Keep an eye on the techs. After leading to the upside there's some definite selling hitting that sector now. I suspect blue chip traders will notice and start some profit taking as well.

Jeff Bailey : 5/14/2008 3:09:07 PM

2-year note yield finished up 5.8 bp at 2.53%

Jeff Bailey : 5/14/2008 3:04:44 PM

Bond market closes ... 13-week Yield left unchanged at 1.785% and those that think "rebalance" are probably on the right track over the next couple of weeks as we near the current fed funds target.

Extending durations we've got the 5-year yield finishing up 5.9 bp to 3.228%, the benchmark 10-year up 2.9 bp at 3.938% and the 30-year up 1.8 bp at 4.637%.

Linda Piazza : 5/14/2008 3:00:34 PM

The RUT closed its last 15-minute period just barely below its 15-minute 9-ema, but it's currently below it again. Unless the RUT bounces quickly, it's likely to close this 15-minute period below that ema, now at 743.07. This is occurring after the RVX began a pattern of bouncing from its rising 15-minute 9-ema, a warning to watch the RUT. This isn't confirmation of anything as yet, but just a signal to start watching.

Jeff Bailey : 5/14/2008 3:00:16 PM

Sector Losers ... Gold Bugs -0.50%, Nat. Gas -0.14%, CBOE Oil -0.13% and Treasuries across the curve.

Linda Piazza : 5/14/2008 2:58:14 PM

The VIX is still trying to steady and it did not drop to a new low when the SPX reached its high of the day a while ago. The VIX is currently 16.87, but it hasn't even begin making 15-minute closes above its 15-minute 9-ema (16.94), much less its 30-minute 9-ema (17.09) yet, so it hasn't yet shown us that it's changing its tenor. It's just hinting that we should watch, just in case.

Jeff Bailey : 5/14/2008 2:56:57 PM

XCI.X 892.59 +1.44% ... 50% conventional at 897.08. 38.2% at 866.23 with 61.8% at 927.86.

Jeff Bailey : 5/14/2008 2:55:48 PM

MSH.X 606.63 +1.32% ... 61.8% at 620.03

Linda Piazza : 5/14/2008 2:55:08 PM

Jeff, good point about buying a home and reviewing those deed restrictions. If subscribers believe anything that Jim, James and others have been saying about peak oil, considerations such as those we've discussed will make more differences in disposable incomes than they have previously. The ability to take energy-conserving steps such as putting on a lighter or metal roof, adding awnings, placing trees strategically to provide shade (our Dallas area HOA controlled what types of trees could be planted and where), and whether solar panels and/or small wind can be added might all be more important than they are now. I think eventually many neighborhoods will change rules, but in the meantime, choose a house that allows you to make the choices that bring your electric bills as low as possible.

Jeff Bailey : 5/14/2008 2:54:49 PM

QQQQ $49.66 +0.89% ... after kiss of 61.8% conventional.

Keene Little : 5/14/2008 2:53:33 PM

Techs are getting sold off some more.

Jeff Bailey : 5/14/2008 2:54:07 PM

Solarfun Power (SOLF) $17.75 +9.38% Link ...

Jeff Bailey : 5/14/2008 2:53:52 PM

Evergreen Solar (ESLR) $9.36 +10.90% Link ... edging back from intra-day high of $9.77.

Keene Little : 5/14/2008 2:52:33 PM

Along with the high call/put numbers as reported by ISEE (a little too much bullish enthusiasm) the VIX is dropping closer to potential support at the bottom of a descending wedge and it's previous low near 16 last October: Link . As the stock market indexes approach potentially important resistance levels it's becoming more important to be wary of the upside. The market is setting up for another "dislocation" event.

James Brown : 5/14/2008 2:51:24 PM

Interesting idea! Since we're on the topic of alternative energy one of my very intelligent engineering friends was trying to convince me that we need to use more geothermal heat pumps to heat and cool our house. Honestly, I haven't done enough research on it and it may not be cost effective for someone like me in a suburb but you, Linda, with your spacious one-acre lot (no, I'm not jealous), might be able to take advantage of it.

Check out this link for some info: Link

Jeff Bailey : 5/14/2008 2:50:51 PM

Consumer Note: If looking to buy a house anytime soon ... Understand that ARM stand for ADJUSTABLE RATE mortgage. And review your HOA rules and regulations regarding what they will let you do with your home and property.

Linda Piazza : 5/14/2008 2:49:07 PM

The RVX, the RUT's volatility index, is now 21.87. It's still so far maintaining 15-minute closes above the 15-minute 9-ema, which questions just how long the RUT can continue to do so, too. Usually when a volatility index is bouncing from a rising 15-minute 9-ema, the index to which it relates is bouncing down from a descending 15-minute 9-ema. One of those should be changing soon, but I'm of course not sure which. I've been watching the RUT all day, however, once I noticed that the RVX had stopped making new lows when the RUT made new highs.

James Brown : 5/14/2008 2:48:17 PM

You are right. Dark roofs in Dallas? That's just asking for a high energy bill to run your A/C.

Jeff Bailey : 5/14/2008 2:48:26 PM

That's what I thought. Several weeks ago a guy in Highlands Ranch was in court with his HOA just so he could put those motorized shutters on his south-facing windows. He said his electric bill last summer was over $400.00/month in order to keep his house at 78F during the day. Bugger is going to cook (in more ways than one) this summer from the looks of electricity prices.

Linda Piazza : 5/14/2008 2:46:04 PM

In our previous, Dallas-area home, we were all required to have dark roofs, which is just dumb for anyone living in Texas, and the HOA was strict, too. Here in Bastrop, a hefty number of people have metal roofs with rainwater collection systems.

James Brown : 5/14/2008 2:43:50 PM

Not allowed, Jeff. The HOA is very strict and I'm sure the neighbors would complain before the day was out.

Keene Little : 5/14/2008 2:42:21 PM

A sell program just hit the techs and NDX spiked down. So far the blue chips didn't get hit with the same selling.

Jeff Bailey : 5/14/2008 2:41:18 PM

James! Anyone in your neighborhood tried to add solar panels to their house yet? Or window awnings?

Linda Piazza : 5/14/2008 2:42:18 PM

James, our neighborhood has deed restrictions, too, but none of these measures are addressed, and we're each on one-acre lots. Our HOA isn't active yet because we have only 13 houses built out, but Bastropians are a rather independent lot anyway, so I don't know that anyone actually expects anyone else to adhere to those deed restrictions! Nevertheless, I canvassed neighbors before we started approaching companies about the hybrid wind/PV systems because of the concerns about small wind (humming noise, tall 30-foot towers and birds flying into them). I think maintenance difficulties will probably steer us away from that anyway, but it is exciting. The Austin city council has decreed that by 2015, all homes built in the city will be zero energy capable, which the city defines as "one capable of producing as much energy as it consumes over the course of a year." Our city, of course, is not covered by that, but there's a big push in the area, anyway, and lots of interest.

Jeff Bailey : 5/14/2008 2:36:34 PM

NASDAQ has reported 76 issues having traded a new 52-week high, while 70 stocks have mustered enough selling to new 52-week lows.

Linda Piazza : 5/14/2008 2:35:32 PM

The RUT's volatility index, the RVX, is now forming a pattern of finding support on 15-minute closes on its now-rising 15-minute 9-ema. The RVX, unlike the SPX/VIX pair, did not make a new low as the RUT was making a new high, indicating a possible divergence, and now it's 21.87, well off its 21.36 low of the day. It appears that there could be significant resistance at about 22.00-22.15, but for now, it's climbing, so if I were in bullish RUT trades, I'd be watchful and careful about protecting my profits. I haven't been watching this pairing long enough to know whether this is a serious warning of waning RUT strength or just a false signal, so don't act on this information alone. Just be watchful.

Jeff Bailey : 5/14/2008 2:35:24 PM

While probably not tied exactly to the 02:00 mark as all heck broke loose at that time in SIX, they NYSE reported 140 stocks having achieved a new 52-week high in today's session compared to 57 issues trading a new 52-week low.

James Brown : 5/14/2008 2:33:27 PM

Linda, that's exciting to hear. All of the nice neighborhoods here in the Denver area are covenant controlled. It makes me wonder how long it will take before all of these HOAs will start to allow owners to put solar panels up?

Linda Piazza : 5/14/2008 2:36:11 PM

James, my husband and I have been trying for months and months to get solar hot water heating and PV panels or maybe a hybrid PV/small wind system installed. Austin is known for being a green city and the closest city to our small town, but most companies are telling us that there's a three- to six-month waiting list for most of these companies as their work is so brisk. Part of that is due to the expiring Federal credit and everyone's intention to get in under that, in case the government doesn't extend it. Another problem is arising, though: they're having trouble getting supplies with a number of jobs just waiting for a little part here or there. Anyway, at least here in Texas, the solar business is alive and well.

Jeff Bailey : 5/14/2008 2:26:45 PM

Petroleo Brasileiro (PBR) $67.35 (unch) as the company reports overall oil and gas output at 2.381M BOE/D in April.

Linda Piazza : 5/14/2008 2:25:46 PM

The VIX isn't bouncing from that potential support I mentioned, good news for equity bulls, although it hasn't dropped into a new low yet, either, which may be indicating an effort to steady. SPX bulls would rather it not get above and maintain values above about 1714, though, and particularly not above about 17.52. The VIX is 16.80 as I type.

James Brown : 5/14/2008 2:26:24 PM

It's a bright and sunny day for Solar Energy stocks..

Trina Solar (TSL) +8.4% and breaking out over resistance at its 200-dma and the $46.00 level.

FSLR +2.9% to a new high at $313.00.
JASO +5.5%
LDK +5.5%
STP +8.8%
WFR +4.4% and breaking out over its 200-dma near $70-71.
AKNS +9.8%
ASTI +7.2%
CSIQ +8.8%
CSUN +5.8%
DSTI +3.3%
ENER +2.1% on top of its recent gains
SOLF +9.5% and breaking out over its 100-dma.
YGE +10.6% and breaking out over its 200-dma and the $25 level.
ASTIZ +15%

Jeff Bailey : 5/14/2008 2:24:29 PM

Chile Peso closes weaker as international copper prices tumble.

Jane Fox : 5/14/2008 2:19:07 PM

Interesting the Russell volatility index is not printing opposite to the ER2 like the VIX is to the ES. Link

Jeff Bailey : 5/14/2008 2:14:42 PM

Six Flags Debt Exchange Offer ... Press Release Link

Jeff Bailey : 5/14/2008 2:11:35 PM

Swing trade sell partial alert! ... let's sell 1/2 of today's 1/4 bullish position in shares of Six Flags (SIX) at the bid of $2.42.

Reducing to 1/8 position.

Jeff Bailey : 5/14/2008 2:05:37 PM

Six Flags (SIX) $2.14 +7.53% ... breaking news here. Company announces private debt exchange offer for certain of its debt securities.

Jeff Bailey : 5/14/2008 2:04:35 PM

As traders filter back in from lunch, they find the advancers continue to build over decliners at the big with by a 2,193:859 margin.

As NASDAQ trader's return to their terminals they'll find modest change with advancers outnumbering decliners by 1,828:1,017.

Keene Little : 5/14/2008 2:04:12 PM

The mighty RUT is about to close its January 4th gap at 745.01. Just ahead is its 200-dma at 748.89.

Linda Piazza : 5/14/2008 2:03:11 PM

The SPX's 15-minute 9-ema has now risen to 1417.43, and the breakout benchmark is now 1416.15. Equity bulls want to see the SPX stay above both on 15-minute closes but paricularly above that breakout benchmark. So far, so good, but keep cinching up those stops, following the SPX higher.

Linda Piazza : 5/14/2008 2:01:46 PM

The OEX has finally approached its target on the 15-minute Keltner chart, with that target and potential resistance on 15-minute closes at 651.38. The SPX broke above its analogous target, following the examples of such front-running indices such as the TRAN and RUT. The OEX tends to adhere to this chart just a little better than they do lately, though, so perhaps watch it for indications, whether you're trading it or not.

Linda Piazza : 5/14/2008 1:58:58 PM

Watch the VIX. Some signs show me the possibility that it might attempt a bounce now, but it would have to get above and stay abovea bout 17.25 before there would be even a minor change in tenor. The VIX is 16.83 as I type.

James Brown : 5/14/2008 1:56:06 PM

Speaking of rallies... a couple of Chinese companies, RCH and CAAS, are both soaring after reporting better than expected earnings. RCH +46%, CAAS +31%.

Jeff Bailey : 5/14/2008 1:55:04 PM

VXO.X 17.71 -6.74% ...

Jeff Bailey : 5/14/2008 1:54:46 PM

OEX 650.50 +1.11% ... "prarie dog'n" the 650 strike.

James Brown : 5/14/2008 1:50:59 PM

I continue to marvel at the rally in coal stock JRCC. Most of the coal stocks continue to show strength.

Jeff Bailey : 5/14/2008 1:50:50 PM

Wilshire 5000 (DWC) 14,377.19 +1.20% ... got the trade at 50% conventional (10/11/07 high to 01/23/08 low)

James Brown : 5/14/2008 1:48:29 PM

Speaking of copper... Freeport McMoran (FCX) is trading near resistance around $120.00. A breakout over $120 could be an entry point. It would also produce a new triple-top breakout buy signal on the P&F chart.

James Brown : 5/14/2008 1:46:45 PM

Something funny I heard last night... A well-known commodity trader said that he is out of oil and no longer has a position one way or the other and he's still nervous.

He was still bullish on natural gas and copper.

Jeff Bailey : 5/14/2008 1:46:37 PM

Oh my ... SYMC $20.93 +1.45% Link ... reversing losses.

James Brown : 5/14/2008 1:38:06 PM

Kohl's (KSS) looks tempting here as it breaks out over its 200-dma and rallies from a two-week consolidation. However, the company is due to report earnings tomorrow after the closing bell. Instead of holding a directional play over earnings you could try a straddle or a strangle. A June $55 call/June $45 put strangle would only cost about $1.60. I'm just not 100% sold that KSS will have enough volatility to make that trade worth the risk. Chart: Link

Linda Piazza : 5/14/2008 1:31:47 PM

The SPX has now followed the TRAN in breaking out of its 15-minute Keltner channels. The breakout benchmark is now 1416.00 on 15-minute closes, so SPX bulls want that maintained on 15-minute closes. They don't want to see a sudden expansion of volatility now (either in back-and-forth price action or in a rise in the VIX) as either could indicate the breakout was being met by indecision and some selling. So far, that hasn't happened.

Jeff Bailey : 5/14/2008 1:31:01 PM

Dorsey/Wright Technical Leaders (PDP) $27.22 +0.92% ... clears the $27.00 level and 80.9% conventional (12/10/07 high to 01/22/08 low)

James Brown : 5/14/2008 1:28:35 PM

Whole Foods Market Inc. (WFMI) is not seeing any bounce. The stock is down 12.2% following its earnings report last night. WFMI missed the earnings estimate and the revenue number. Looks like it still has farther to fall. Check out this chart: Link

Jeff Bailey : 5/14/2008 1:28:07 PM

Dorsey/Wright classifies SNDK as belonging to the COMPuters sector. (see yesterday's updated Sector Bell Curve).

Jeff Bailey : 5/14/2008 1:25:42 PM

SanDisk (SNDK) $31.97 +4.51% Link ... "ditto" the 150-day SMA. 19.1% conventional (01/23/08 low to 07/20/07 high) at $31.06, with some upside to 38.2% at $37.83.

That was a triple-top buy at $29.00.

Jeff Bailey : 5/14/2008 1:22:47 PM

Disk Drive Index (DDX.X) 128.93 +3.16% ... bold move through its 150-day SMA (127.43) today. Gets the trade at conventional 38.2% (128.77)

James Brown : 5/14/2008 1:21:50 PM

Container and packaging stock Bemis (BMS) is breaking out over resistance at its 200-dma. The stock is up 1.7% today and is now challenging its exponential 200-dma. The P&F chart is bearish but it looks like it's close to turning around. P&F chart: Link

Jane Fox : 5/14/2008 1:20:28 PM

If the SPX closes above 1420 the I think the next stop is around 1470. This market does not move straight up so the move will be choppy. Link

Keene Little : 5/14/2008 1:20:09 PM

DOW has now tagged the 162% extension of the pullback to yesterday's low that I pointed out earlier (at 12979) so between here and about 13K (broken uptrend line along the lows since April 22nd) watch for possible topping.

Jeff Bailey : 5/14/2008 1:19:38 PM

Exclusive rights to Brazil's highly coveted 200-mile zone off its coast look to be in play. The U.S. and other countries contest Brazil's claim for the zone. In recent months, as reported here in the MM, Petroleo Brasileiro (PBR) $67.39 +0.07% has announced discoveries of fields in the pre-salt play that some estimate could contain several dozens of billions of barrels of oil and gas.

James Brown : 5/14/2008 1:17:42 PM

Trading idea: Lockheed Martin (LMT) is up 0.9% and confirming its breakout over resistance near $108 yesterday. The P&F chart is bullish with a $133 target. A dip near $108 might be a tempting entry point for bullish positions. Link

Linda Piazza : 5/14/2008 1:15:10 PM

Still no new low for the RVX, the RUT's volatility index, to match the RUT's new high. Jane has taught us to watch the SPX/VIX pairing carefully for corroboration or divergence, but I'm not sure it works as well with the RUT/RVX pairing, as I mentioned earlier. I'm still watching.

Keene Little : 5/14/2008 1:13:12 PM

Jane, did you notice the bearish divergence on your corn chart? Commodities bulls could be in for a rude awakening soon if they don't have protective stops in place.

Linda Piazza : 5/14/2008 1:09:13 PM

The SPX has potential resistance on 15-minute closes now from 1416.06 up to 1417.20, but with the lower number seemingly the most firm. However, support in the form of the 15-minute 9-ema, now at 1414.75, is squeezing SPX prices between supposedly firm support and supposedly firm resistance. So, far, that's been resolved by popping the SPX above that first level of resistance and up to the next, but the 15-minute period isn't over yet. So far, so good for SPX bulls, but just keep managing those profits, just in case.

Jeff Bailey : 5/14/2008 1:08:28 PM

Corn and wheat getting hit ...

Jeff Bailey : 5/14/2008 1:06:36 PM

EIA Nat. Gas inventories will be released tomorrow at 10:30 AM EDT.

Jeff Bailey : 5/14/2008 1:04:31 PM

That's exactly how my chart looks to Jane!

Jeff Bailey : 5/14/2008 1:02:49 PM

Eur/$ 1.5472 -0.02% ...

Jane Fox : 5/14/2008 1:02:39 PM

Natural Gas Link

Jeff Bailey : 5/14/2008 1:02:18 PM

Euro CurrencyShares (FXE) $154.95 -0.04% ... June "Max Pain" Theory tabulation at last night's close was $158.00 ... $1.00 inc.

Jane Fox : 5/14/2008 1:02:03 PM

Corn is ridiculous Link

Jane Fox : 5/14/2008 1:04:42 PM

Here is a daily chart of beans. Link

Jane Fox : 5/14/2008 12:59:08 PM

Most commodities are just going crazy and those are the markets you should be looking at now.

Jane Fox : 5/14/2008 12:58:33 PM

SAN FRANCISCO (MarketWatch) -- Soybeans futures rose for a second day Wednesday to the highest in one month, on expectations that farmers in Argentina, the world's third-largest soybeans exporter, may extend their strike.

Soybeans futures for July delivery rose 1.75 cent, or 0.1%, to $13.8125 a bushel on the Chicago Board of Trade in early afternoon trading. Futures touched $13.90 earlier, the highest since April 16.

Jeff Bailey : 5/14/2008 12:58:30 PM

Nokia (NOK) $28.48 +0.92% ... saying it will shut down all production at its Bochum, Germany plant this week. A Work's Council representative said the majority of the 2,300 employees will be out of work Friday. As of Monday, some 150 workers will help turn off the lights and help dismantle the plant, which will officially shut down June 30.

Jane Fox : 5/14/2008 12:57:45 PM

By the way, ER2 made new daily highs but the RVX DID NOT make new daily lows so it would not be a time to be long ER2.

Jeff Bailey : 5/14/2008 12:55:19 PM

Rio Tinto (RTP) $535.51 +3.56% ... announcing it has bought back 2,288 shares at 1826.2P

Jane Fox : 5/14/2008 12:55:17 PM

Here is the RUT volatility index, RVX compared to the Russell futures, ER2. I see it can be a good indicator to watch if you are trading ER2. Just like VIX is very good indicator to watch if you trade ES. Link

Keene Little : 5/14/2008 12:52:46 PM

There's another reason I'm watching for the possibility for the market to top out soon, including the potential for it to have already done so this morning. The two equal legs up for the DOW from last Friday could be an a-b-c bounce to correct the decline from May 2nd. The decline from that high may have been the 1st wave down of a new larger decline and that would mean the current bounce will lead to a much stronger selloff, breaking well below the low near 12715 on Friday. 60-min chart: Link

Jeff Bailey : 5/14/2008 12:52:09 PM

JP Morgan's (JPM) $45.69 +0.46% global head of commodities Blythe Masters saying the bank will begin trading physical oil and refined products by year's end. Mr. Masters believes oil prices could rise to $200 before the end of the year. Mr. Masters said it will eliminate some in-house jobs as it absorbs a scaled-back Bear Stearns workforce, but said the commodities and energy and investment team is on track to hire about 50 people this year, taking the team's headcount to 450 globally.

Linda Piazza : 5/14/2008 12:47:39 PM

RUT bulls and bulls in other indices, too: you don't want to see the RVX, the RUT's volatility index climb above and maintain values above about 21.78. It's at 21.69 as I type.

Other than for a few brief minutes, that descending Keltner line, the 9-ema on the 30-minute chart, has been resistance on 30-minute closes since about midday on Friday, and it's mostly been resistance on 30-minute closes since about midday on Thursday.

For newbies, prices tend to move in opposition to the move in the volatility index. Also for newbies, although the small-cap RUT seems to have little to do with the big-cap OEX and SPX, a lot of people use it as a sentiment indicator of how much risk traders are willing to take.

Jeff Bailey : 5/14/2008 12:43:52 PM

Eur/$ 1.5476 +0.02% ...

Jeff Bailey : 5/14/2008 12:43:02 PM

Euro CurrencyShares (FXE) $155.04 +0.01% ... with FXE June 154 Puts and FXE June 150 puts among the CBOE's most active.

Jeff Bailey : 5/14/2008 12:41:43 PM

Notable CBOE most active put at this hour. Don't remember ever seeing it.

Jeff Bailey : 5/14/2008 12:39:59 PM

US Senator calling for the FTC to probe Countrywide Financial (CFC) $4.81 -3.41% ...

Jane Fox : 5/14/2008 12:39:18 PM

DAteline WSJ - Vioxx plaintiff's $32 million jury verdict against Merck reversed

Jane Fox : 5/14/2008 12:37:38 PM

Here are the overnight charts. All markets are well above ON highs. Link

Keene Little : 5/14/2008 12:34:36 PM

With the continuing choppy price action I keep looking for moves with two equal legs since that's typically then reversed when we're in a corrective environment. So for example, the DOW's move up from last Friday the 9th would have two equal legs up at 12971 and was missed by less than 3 points this morning. The Fib projection at 12970.70 is shown on this 30-min chart: Link

I also like to look at previous moves and calculate extensions off them. Many times you'll see a reversal of the previous move head to the 127%-138% extension and if the move keeps going it will find resistance at the 162% extension. This 10-min chart shows the pullback from Monday's high (the 12th) to Tuesday's low and then the reversal of that pullback which is the current rally leg: Link

Placing a Fib retracement on the pullback shows the extensions above it. Price is oscillating around the 127%-138% at 12937-12950 but I suspect it will push higher. In that case watch the 162% extension at 12979, which is only 8 points above the 12971 projection shown on the 30-min chart.

Jane Fox : 5/14/2008 12:34:21 PM

AD line trajectory is still very very bullish and the VIX is hovering at daily lows. This is not a time to be short. Link

Jeff Bailey : 5/14/2008 12:33:05 PM

Sector Winners ... Home Construction +3.12%, Disk Drive +2.68%, Airline +2.33%, Semiconductors +2.05%, Retail +2.05%

Linda Piazza : 5/14/2008 12:32:26 PM

The A/D line is not pushing to a new high, either, although it's not far from its day's high or from Monday's 1310 high. It's 1208 as I type. Equity bulls would like to see it push up toward its potential target at 1578.80, but it looks as if it might retreat toward 1030-1100 instead. Still, bulls can't complain as long as the A/D line is hanging around near its day's high, although they would prefer that it corroborate equity gains with gains of its own. Just be watchful. You don't want a strong swoop down if you're bullish equities.

Jeff Bailey : 5/14/2008 12:31:39 PM

Sector Loser ... Gold bugs -0.01% ...

Linda Piazza : 5/14/2008 12:29:37 PM

The SPX is pushing to a new high, still testing that potential Keltner resistance that extends up to 1417.42 but should be strongest near 1416.40 on 15-minute closes. VIX is pushing to a new low, so it's not showing the same bullish (for equities) divergence as is being tentatively shown in the RUT/RVX pairing.

Jeff Bailey : 5/14/2008 12:25:52 PM

OEX at 648.95 +0.87% ... has pressed its heavy Call OI of 7,316 at the 650.00 level, but remains tentative.

Jane Fox : 5/14/2008 12:25:13 PM

Opps nope RUT is not to new yearly highs, that is up at 768.

Jane Fox : 5/14/2008 12:24:30 PM

Small Caps have broken resistance as well and to new yearly highs. Link

Linda Piazza : 5/14/2008 12:23:36 PM

As the Russell 2000 climbs to a new high, its volatility index, the RVX, has not dropped to a new low for the day. I haven't watched this RUT/RVX pairing long enough to be sure if divergences mean as much as they sometimes do on the SPX/VIX pairing, so I'm just noting it now without giving specific advice other than there's a tentative divergence there. All the RVX has to do is drop to a new low to erase it.

Jane Fox : 5/14/2008 12:23:08 PM

Techs have certainly been leading this rally and have very nicely broken resistance after a retracement that did not even get to it 23.60% level. Link

Jeff Bailey : 5/14/2008 12:21:37 PM

New highs and new low measures at the NASDAQ are reverted, something we've seen intra-day several times the last couple of months, but not at a day's close. At the 12:00 mark the number of new highs are 68, while 62 issues have seen a new 52-week low traded.

This has the daily ratio measuring 52.3%, the shorter-term 5-day ratio improving to 37.6%, while the more intermediate-term 10-day NH/NL ratio remains bullish at 38.9%.

Jane Fox : 5/14/2008 12:20:57 PM

The DOW is also heading toward its resistance at 13100 but its retracement extended a little further than the very narrow retracement at 23.60%. Link

Jane Fox : 5/14/2008 12:19:26 PM

SPX is heading for resistance at 1420 after retracing to the 23.60% fib level. Link

Jeff Bailey : 5/14/2008 12:17:44 PM

New high and new low measures at the big board begin to build back to bullish leadership on a short-term basis with 130 securities now having trade a new 52-week high, while 47 issues have seen a new 52-week low. That has the daily ratio now at 73.4%, the 5-day at 56.1% and more intermediate-term 10-day threatening a reversal back higher at 55.1%.

On 04/18/08, the NYSE's 5-day NH/NL ratio finished at 54.2%, while its 10-day NH/NL ratio stood at 55.4%.

Jeff Bailey : 5/14/2008 12:06:44 PM

Stocks continue to hold gains at both major exchanges as traders filter to their favorite watering hole.

Advancers have gained some ground since the 10:00 hour with the big board now reporting 2,075 advancers for every 916 decliners.

Four (4) and five (5) lettered stock symbols at the NASDAQ now get pulled apart with 1,737 issues gaining, while declining issues have risen to 1,019.

Linda Piazza : 5/14/2008 12:01:31 PM

I showed the SPX's 15-minute Keltner chart earlier this morning, the first time the SPX hit it. Here it is again: Link This Keltner level can be breached of course, as the TRAN did earlier today, but it's just a signal that it's time again for SPX bulls to review their profit-protecting plans, as it also can and does hold. Bulls don't want the SPX to now sustain moves below about 1411.

Linda Piazza : 5/14/2008 11:54:36 AM

The SPX's 200-sma is now 1428.37, and I would guess that bulls are aiming for that. Whether or not they'll reach it, I'm not sure. As I type, the SPX is again pausing at keltner resistance on the 15-minute chart, extending up toward 1417.11 on 15-minute closes.

Jeff Bailey : 5/14/2008 11:53:04 AM

Swing trade long alert! ... for 1/4 position in the underlying shares of Six Flags (SIX) at the offer of $2.07, LIMIT $2.10. Stop goes $1.80. Target $2.80.

Keene Little : 5/14/2008 11:52:07 AM

The DOW has been battling around its nest of trend lines--after bouncing off its broken downtrend line from October it has once again run into the uptrend lines from 2002/2003 (using log scale) and the top of its shallow up-channel from January. Just above is its 200-dma at 13015. Link

Resistance by this zone is 12940-13015 so the DOW is currently at the lower end of this zone. If it can get through all of this it then needs to bust through its May 2nd high at 13132 to reach its 62% retracement of the October-January decline at 13219 (not shown on the chart) and the top of its rising wedge. It could be a bit like watching American Gladiators.

James Brown : 5/14/2008 11:47:32 AM

I'm a little surprised that apparel retailer AnnTaylor (ANN) hasn't seen any profit taking on Monday's big rally. The stock is still climbing and up another 2.9% today. On Monday the company raised its earnings guidance. Short interest was more than 12% of the 55.5 million-share float.

Linda Piazza : 5/14/2008 11:45:06 AM

The SPX didn't even drop all the way to the 15-minute 9-ema, now at 1412.78 but did approach it. Now it rises again toward Keltner resistance that knocked it back earlier, now from 1416.22-1417.55 on 15-minute closes. Bulls again need to have profit-protecting plans in place for this test.

James Brown : 5/14/2008 11:44:18 AM

Drivers in San Francisco are paying $4.04 a gallon while the average price of gasoline in the U.S. just rose to $3.76/gallon (at the pump). A month ago it was $3.37 and a twelve months ago it was $3.09. (source: marketwatch)

Jane Fox : 5/14/2008 11:42:16 AM

The last post from MarketWatch.com headline was "Crude Prices Spill South." Here are the Crude Prices "Spilling" South. Too funny Link

Jeff Bailey : 5/14/2008 11:42:05 AM

NASDAQ-100 Heatmap Link

DISH +6.15%, APOL +4.85%, UAUA +4.30%, JAVA +4.07%, SNDK +3.99%, KLAC +4.05%, NVDA +4.15%, MNST +3.88%, IACI +3.87%

WFMI -12.65%, ERTS -2.73%, FISV -1.91%, RYAAY -1.67%, STLD -1.60%, AMAT -1.31%, JOYG -0.73%, GILD -0.62%, SYMC -0.52%, LOGI -0.48%

Jane Fox : 5/14/2008 11:39:48 AM

SAN FRANCISCO (MarketWatch) -- Crude supplies rose 200,000 barrels to 325.8 million for the week ended May 9, according to the Energy Department Wednesday. Supply is up a total of 12.1 million in four weeks. But motor gasoline supplies fell 1.7 million barrels to 210.2 million barrels. Distillate stocks were up 1.4 million barrels at 107.1 million barrels. Refinery utilization rose to 86.6% of capacity from 85% a week ago. Following the news, June crude was last down 60 cents at $125.20 a barrel. June reformulated gasoline added 1 cent to $3.21 a gallon and June heating oil traded at $3.69 a gallon, down 1 cent.

Jeff Bailey : 5/14/2008 11:37:37 AM

Sun Microsystems (JAVA) $13.38 +4.77% ... notable action from $12.90 open.

James Brown : 5/14/2008 11:36:48 AM

On CNBC recently they were mentioning that MasterCard, who does a weekly survey of gasoline purchases, showed that last week the U.S. consumer gas purchases fell 7% and marked the third weekly decline in a row. It sounds like the higher fuel prices are actually slowing down demand.

I've tried to find these Mastercard weekly survey reports online and haven't had any luck. Does anyone else have an idea of where to find them?

Jeff Bailey : 5/14/2008 11:25:38 AM

Bush administration's Edward Lazear (chairman of the Council of Economic Advisers) told congress this morning that ethanol production accounts for only about 1.2% of increases in food prices over the last year.

The IMF has estimated the shift of crops out of the food supply to produce biofuels accounts for almost half (1/2) of the recent increases in global food prices.

James Brown : 5/14/2008 11:24:38 AM

The Morgan Stanley Cyclical Index (CYC) is breaking out past resistance near the 1000 level. Chart: Link

Jeff Bailey : 5/14/2008 11:21:06 AM

IEA saying Venezuela's April oil output stood at 2.32 million barrels a day, a 4.5% drop from the beginning of the year. The Paris-based organization estimates the country has sustainable production capacity of 2.5 million b/d. Venezuela has been saying for some time that it could produce 3.3 million b/d.

James Brown : 5/14/2008 11:20:50 AM

Housing stocks are also bouncing. The DJUSHB home construction index is up 2% and the XHB homebuilder ETF is up 2.2% and just breaking above its 200-dma again.

James Brown : 5/14/2008 11:15:55 AM

Railroad stocks are hitting new all-time highs. The Dow Jones U.S. Railroad Index (DJUSRR) is up 1.19% and up about 9 out of the last 10 weeks.

Jeff Bailey : 5/14/2008 11:15:43 AM

Washington Mutual's (WM) $9.98 +1.01% COO saying '08 loan-loan provisions to exceed charge-offs.

Keene Little : 5/14/2008 11:14:11 AM

It's always a little more difficult to interpret VIX and put/call ratio information during opex since the numbers can get skewed by opex settlements vs. speculation on market direction. Having said that, the ISEE call/put data shows another spike up towards the area that has marked previous highs (closed at 150 yesterday): Link

The two previous highs were April 21st and 29th and you can see a reading at 150 or above is not like ringing a bell followed by a market reversal. But it's an indication that bullish enthusiasm is getting a little too frothy and warning of a potential top in the making.

Jeff Bailey : 5/14/2008 11:13:51 AM

Russia's Prime Minister saying he thinks Russia-based producers will be able to increase oil production by more than 67 million tons by 2015,

James Brown : 5/14/2008 11:11:30 AM

The fertilizer stocks are bouncing with the market strength...POT, CF, MOS, and TNH all look like they are poised to breakout higher. Meanwhile MON and TRA appear to be breaking out from their recent consolidation. Recent IPO stock IPI is an exception and moving lower.

Linda Piazza : 5/14/2008 11:09:19 AM

The SPX turns back from Keltner resistance. See the chart linked to my 10:42:07 for a chart that was snapped just as the SPX was hitting that resistance. Now the other Keltner levels have changed, however. The SPX's 15-minute 9-ema is now 1411.57, potential support on 15-minute closes. Equity bulls want that or the support at 1409.68 to hold on 15-minute closes.

OEX bulls want support at or near 647.37 to hold on 15-minute closes.

Jeff Bailey : 5/14/2008 11:06:56 AM

Software HOLDRs (SWH) $41.68 +0.84% ... for second time since 04/24/08, stick their head above 50% conventional.

James Brown : 5/14/2008 11:06:54 AM

OI call play CNOOC Ltd (CEO) is up 2.7% and breaking out past resistance at the $185.00 level. The stock is now challenging the $190.00 level.

Jeff Bailey : 5/14/2008 11:04:46 AM

Sector Winners Airlines +2.33%, Semiconductors +2.30%, Retail +2.12%, Home Construction +2.06%, N.A. Telecom +1.98%, Disk Drives +1.86%

Keene Little : 5/14/2008 11:04:23 AM

I should have mentioned with my earlier post where the RUT would close its January 4th gap--745.01, less than 4 points higher now.

Jeff Bailey : 5/14/2008 11:02:55 AM

Sector Losers ... Oil Service -0.15%, HMO's -0.07%, CBOE Oil -0.07%

Jeff Bailey : 5/14/2008 10:51:37 AM

Eur/$ 1.5455 -0.11% ...

Jeff Bailey : 5/14/2008 10:50:26 AM

US Oil Fund (USO) $100.23 -1.45% ... presses session lows. May "Max Pain" Theory level $97.00 ... $1 inc.

Linda Piazza : 5/14/2008 10:49:06 AM

For OEX traders: the OEX trails behind the SPX and A/D line in reaching toward its next Keltner target. That's at 651.70 for the OEX, but the OEX has so far started a sideways/sideways-up consolidation immediately after pulling free of a Keltner boundary now at 647.27. So far, the OEX still climbs toward that upper Keltner target and could well continue to do so, but bulls should also be aware of the potential for a pullback to 658.28 or maybe even 647.25-647.30 to retest support. The OEX hasn't been hitting upside targets as well as some other indices.

Jeff Bailey : 5/14/2008 10:46:56 AM

BHP Billiton (BHP) $92.37 +5.20% ... new 52-weeker and breaks the $90.00 barrier.

Linda Piazza : 5/14/2008 10:46:08 AM

So far, the A/D line is continuing its sideways/sideways-up consolidation, but I still wouldn't be surprised to see it need to drop toward Keltner support now from 775-950. The A/E line is 1176 as I type.

Linda Piazza : 5/14/2008 10:42:07 AM

Bulls need to have their just-in-case profit-protecting plans in place now. Link The SPX can and sometimes does violate this potential resistance as the TRAN has already done on its 15-minute chart this morning, but this suggests a need for just-in-case causion. Note what happened when the lower boundary was hit, for example.

Jane Fox : 5/14/2008 10:39:20 AM

By the way the TRIN is 0.66.

Jeff Bailey : 5/14/2008 10:43:18 AM

Shares of Arcelor Mittal (MT) $100.02 +2.86% get the trade at $100.00. The worlds largest steel maker by volume announced today that is has completed negotiations for coking coal, a key ingredient in steel making, at around the 200% benchmark price rise level achieved between coking coal miners and other steelmakers.

MT also in the news with the Chinese government expected to disclose its final ruling on MT's offer to acquire a controlling stake in China Oriental group.

And you can't forget the ongoing negotiations regarding surcharges on the company's flat steel products sold to US auto makers as part of the company's plan to recover the unprecendented rise in raw material costs.

Jane Fox : 5/14/2008 10:52:58 AM

VIX is now catching up and is making new daily lows so all the internals are sync and quite bullish. Look at the tajectory of the AD line. HMMM Link

Jeff Bailey : 5/14/2008 10:35:38 AM

EIA reporting refineries ran at 86.6% operable capacity; Seen +0.7 Pts at 85.7%.

Jeff Bailey : 5/14/2008 10:34:42 AM

EIA reporting US Distillate stockpiles up 1.4M bbls; Seen +600K

Jeff Bailey : 5/14/2008 10:34:04 AM

EIA reporting US Gasoline stockpile down 1.7M bbls; Seen -100K bbls.

Jeff Bailey : 5/14/2008 10:33:27 AM

EIA reporting US Crude oil stockpiles rose by 200K bbls; Seen +1.8M

Jeff Bailey : 5/14/2008 10:32:40 AM

IWM's May "Max Pain" Theory value at last night's close remained $71.00 ... $1 inc.

Jeff Bailey : 5/14/2008 10:31:58 AM

SPY's May "Max Pain" Theory value at last night's close was $139.00 ... $1 inc.

Linda Piazza : 5/14/2008 10:31:29 AM

The A/D line has not yet been able to make it above Monday's high and is in fact producing a number of small-bodied consolidation type candles just below that level. The current potential upside target is 1482.38 and a move up there would likely carry equities higher, too. However, with the shape of the candles, it may be that the A/D line will need to retreat back toward stronger support now at 850 or perhaps even 680, and, if that happens, the SPX would likely ease back toward support, too, perhaps at 1411.73 or even near 1408.50-1409. Potentially strong resistance for the SPX is at 1416.12 on 15-minute closes.

Jeff Bailey : 5/14/2008 10:30:29 AM

VIX.X 17.38 ... did tap its WKLY S2 and correlative DAILY S1 between 9:50 and 09:55.

DAILY Pivot levels are ... 16.59, 17.28, Piv= 18.45, 19.15, 20.32.

Jane Fox : 5/14/2008 10:28:24 AM

However, the VIX is not cooperating and is only printing midrange. The VIX gives me a reading when it is making new daily highs or lows.

Jane Fox : 5/14/2008 10:27:28 AM

AD line is quite bullish at +1088 and making new daily highs.

Jeff Bailey : 5/14/2008 10:23:55 AM

Crude oil, unleaded and heating oil prices easing ahead of this morning's weekly EIA inventory figures set to be released at 10:30 AM EDT.

Nat. Gas bucks the trend with another Jun'08 contract record high.

Jeff Bailey : 5/14/2008 10:20:06 AM

Quick check of our "junk bond" PHF $8.39 +0.35%. SEC yield at current price would be 10.72%.

Jeff Bailey : 5/14/2008 10:19:09 AM

Treasuries posting modest price gains in early trade with yields fractions lower.

The 13-week yield lower by 0.5 bp at 1.780%, 5-year unch at 3.169%, 10-year lower by 0.7 bp at 3.902% and the longer-dated 30-year down 2.1 bp at 4.599%.

Jeff Bailey : 5/14/2008 10:17:28 AM

Manitoba 3-Mo T-Bills avg. yield rising to 2.714%.

Keene Little : 5/14/2008 10:15:57 AM

With last night's NDX chart I should have mentioned upside potential to 2051.76 which is where it would close the gap down on January 4th. The closing price for SPX and DOW on January 3rd were 1447.16 and 13056.72.

SPX would first have to get through its 50% retracement at 1423 (which stopped the rallies on May 2nd and 6th) and then its 200-dma at 1428. But then on May 19th (next Monday) the top of its rising wedge intersects the broken uptrend line from October 2002 (using arithmetic scale) and the line extended from gap closure. It could certainly tag it by Friday if the bulls get really feisty from here. Link

Jeff Bailey : 5/14/2008 10:08:38 AM

Fluor (FLR) $189.70 -0.69% ... boosting its '08 view on gain from its wind farm sale.

Jeff Bailey : 5/14/2008 10:07:23 AM

Most Actives: ... QQQQ $49.71 +0.99%, CCU $34.70 +1.16%, SPY $141.50 +0.72%, AMAT $19.45 -2.06%, YHOO $26.43 -0.48%, INTC $24.18 +1.76%, EDS $24.44 +0.41%, AAPL $191.55 +0.83%, BAC $36.87 +0.71%, WFMI $29.60 -12.09%

Jeff Bailey : 5/14/2008 10:04:31 AM

Stocks are broadly higher in the first 30-minutes of trade as economic data brings some new buyers to the table.

Advancers are outnumbering decliners by a 1,913:829 at the big board, while NASDAQ also sports positive breadth with 1,540 advancers for every 863 decliners.

Keene Little : 5/14/2008 9:57:05 AM

NDX is approaching its 62% retracement at 2021.24 so some selling there would be typical.

Linda Piazza : 5/14/2008 9:54:21 AM

The A/D line still climbs toward a test of Monday's 1310 high. The A/D line is currently 1240 with next potential Keltner resistance at 1460.48 on 15-minute closes.

Keene Little : 5/14/2008 9:46:40 AM

In addition to the upside potential for NDX that I showed in last night's chart, the RUT looks like it could also press higher to the top of its rising wedge. That line is near 746 on Friday and a little throw-over could tag its 200-dma. While it could certainly make it higher to a Fib projection at 761.64, it will be an interesting setup for a short play if it hits its 200-dma. Link

Linda Piazza : 5/14/2008 9:43:02 AM

The SPX has obviously broken well above the potential Keltner resistance on 15-minute closes. Although I could point out the obvious--that the first 15-minute period has not yet elapsed, nor has the first 30-minute period, where there is also potential resistance near 1407.26-1407.86 on 30-minute closes--I think we need to look at next resistance instead. It's currently 1415.90 on 15-minute closes.

Do be aware that the A/D line is also dealing with potential rseistance, so you don't want to see it drop below about 850 on this first 15-minute period, as that will show that the resistance is holding and suggest a pop-and-drop day as a possibility if not yet then a probability. The A/D line is currently 1062, pulling back a bit from the high of the day but not strongly as yet.

Keene Little : 5/14/2008 9:31:23 AM

Thanks to the big pop higher following the 8:30 reports equity futures jumped from being in the red to being in the green. The question of course is whether it will hold after the cash market opens. This is opex and it makes it a little more difficult to figure out the short term moves.

Linda Piazza : 5/14/2008 9:24:09 AM

Futures are higher as I type. Let's get some perspective first. On a weekly chart, the SPX created a reversal signal last week: not a potential reversal signal, but a confirmed one. Of course, we know that during the heydey of the SPX's rally days, the downturn created by the confirmation of a reversal was the only downturn seen, so that must always be kept in mind as a possibility. For example, the week of 4/07, the SPX came almost as close to a classic reversal signal and the next week produced a strong gain. Still, the background should remain that we have a completed reversal signal on the weekly chart.

On a daily chart, the SPX still trades within that rising wedge shape off the March low. It maintains the lower trendline of that wedge and, in fact, is currently attempting a bounce off that trendline. So, now the total picture is some current strength within the context of a completed reversal signal.

What does that mean? It means that for right now, the movement is up, but you'd sure better be aware that could change and maintain sound account- and trade-management practices because the SPX could roll over again. I know, I know: you've heard this ad nauseum. You heard it ad nauseum early last fall, too, and the momentum carried indices up higher than some thought it would but then the rollover was brutal when it occurred. So, it pays to remain vigilant and not complacent. Don't count on a rollover, particularly in an opex week, but do keep on your toes and keep your risks in rein.

On the very short term, the SPX has potential resistance near 1405.67-1406.63 on 15-minute closes and potential support near 1398.91-1400.32 on 15-minute closes. Near the close on Monday, I wondered aloud whether the consolidation that I had thought would take place between 1392-1394 support and 1396-1400 resistance would instead take place between 1396-1400 resistance and 1406-1408 resistance, and that's what happened yesterday. So far, that chop zone is being maintained, so if the SPX climbs, watch for potential support and resistance at the new support and resistance levels detailed at the beginning of this paragraph. Until those are broken, we're in a chop zone.

Jane Fox : 5/14/2008 9:23:59 AM

Crude bears are trying their level best to break $125 but the bulls are fighting back and, "No No bully."

Jane Fox : 5/14/2008 9:22:30 AM

NDX's red trendline at 1860 is a resistance turned support line from the weekly charts. The same line on the SPX daily chart is at 1400 and SPX is barely above this level. The DOW's weekly red trendline is at 13100 and the DOW is well below 13100. The NDX is clearly out performing both the S&P and DOW. Link

Jane Fox : 5/14/2008 9:12:11 AM

After a number of Fed speakers on Tuesday, the still-influential Greenspan told an audience in Asia that U.S. house prices will bottom in the early part of 2009 when the market absorbs a build-up of inventories. Another ex-Fed chairman, Paul Volcker, is due to testify before the Joint Economic Committee on systemic risk.

Jane Fox : 5/14/2008 8:58:55 AM

Ditto for the DOW. Link

Jane Fox : 5/14/2008 8:57:48 AM

It is fairly obvious the SPX daily chart is in an uptrend and the bulls have control. Link

Jane Fox : 5/14/2008 8:55:50 AM

Crude is moving sideways at yearly (all-time) highs and the Crude bears are running out of time to take over even for a few days. From a purely technical point of view this market is ready to blast higher. Of course, has I have stated many times before, there are a lot of factors playing in this market that will override TA. One thing I know for sure I never short this market. Link

Jane Fox : 5/14/2008 8:51:51 AM

Gold is certainly not making any bold move. I don't even have to look at the US$ chart I know it will look exactly the same but in reverse.

Gold and Crude may have lost their interrelationship but Gold and the US$ have not. Link

Jane Fox : 5/14/2008 8:49:50 AM

Well the overnight markets certainly liked the CPI data out at 8:30ET. The DOW closed the weakest yesterday and is why the only market to not break its previous day highs.

As you can see the buying the in small caps has been much more muted than in its big cap brethren. Link

Jane Fox : 5/14/2008 8:45:16 AM

Dateline WSJ - YANGON, Myanmar -- Another powerful storm headed toward Myanmar's cyclone-devastated delta Wednesday, where so little aid has reached that the United Nations warned of a "second wave of deaths" among more than 1.5 million survivors.

Hawaii-based Joint Typhoon Warning Center, a U.S. government agency that contributes data to the U.N., said there is a good chance that "a significant tropical cyclone" will form within the next 24 hours and head across the Irrawaddy delta area. The region was pulverized by Cyclone Nargis on May 2-3, leaving at least 34,273 dead and 27,838 missing, according to the government. The U.N. says the death toll could exceed 100,000.

Jane Fox : 5/14/2008 8:39:16 AM

WASHINGTON (MarketWatch) - U.S. consumer inflation moderated in April, the Labor Department said Wednesday. The consumer price index increased 0.2% in April after a 0.3% gain in the previous month. The core CPI, which excludes food and energy costs, was up 0.1% in April after rising 0.2% in March. Economists were expecting the CPI and the core rate to rise 0.2%. Energy prices moderated after a large jump in March. However, food prices rose 0.9%, the largest gain since 1990.

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