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Keene Little : 6/17/2008 10:46:10 PM

I have a few meetings to attend on Wednesday, starting before the market opens, and will not be back until after the market closes. I'll make some comments once I get back and can assess how the day went. Good luck and stay on the cautious side this week.

Keene Little : 6/17/2008 10:02:19 PM

Wednesday's pivot tables: Link and Link

SPX pulled back from testing its October downtrend line on Monday and Tuesday. If it pulls back further on Wednesday bulls will want to see it find support at last Friday afternoon's low (1344.71) and if not there then at its uptrend line from March through last week's low, currently near 1336 and untested as of yet. Daily chart: Link

The DOW has already broken last Friday afternoon's low and could give us a heads up if it is the first to break below last Thursday's low near 12078 which would be bearish. The SPX 60-min chart shows the possibility for a continuation higher in what could turn out to be a rising wedge into the end of the week with SPX rallying up to the 1376 area (62% retracement): Link

But any continuation lower from here, especially a break below 1330 would be a bearish signal. The techs and small caps are showing relative strength and another rally back up to a new high above Tuesday's would give them both a bullish 5-wave count up from last week's low, as shown on the RUT's 60-min chart (green): Link

First the bulls need to drive the market back up to get the 5-wave move but if they do then it changes the short term pattern to bullish (after a pullback). What that will mean for the DOW and SPX is unknown but I would not turn bearish. But if the bears get hold of the market and pull the techs and small caps lower as well then the blue chips could be leading to the downside for now.

OI Technical Staff : 6/17/2008 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 6/17/2008 8:34:14 PM

Closing Internals found at this Link

Jeff Bailey : 6/17/2008 4:39:38 PM

That 12,148 could be the low headed into expiration.

Jeff Bailey : 6/17/2008 4:33:39 PM

DXY's 04:00 tick was 73.499

Jeff Bailey : 6/17/2008 4:26:55 PM

Nymex's Light Sweet Crude Table with July/August OI Link

In last night's wrap, cl08n OI was 172,409, so some contracts closed out. Not taking delivery.

Jeff Bailey : 6/17/2008 4:19:23 PM

When you drive home from work tonight, check out how many people are in the car(s) around you. How many people are in your car?

Has gasoline prices changed habits? I haven't seen it. I'm waiting for 55 MPH too.

Jeff Bailey : 6/17/2008 4:01:20 PM

If I weren't already long an airline and now the AMR calls, I'd think long and hard about a VLO $45 call. Still, unleaded stockpiles not the problem.

Taht's what could be the "double plus" for an airline down in here.

For a refiner, sniff around and see where it trades relative to 05/15 close.

Keene Little : 6/17/2008 3:56:29 PM

SPX has nearly retraced 78.6% (at 1439.39) of the leg up off Friday afternoon's low. Any deeper than that and it's likely we'll see it drop below 1344 and that would leave a confirmed 3-wave bounce off last Thursday's low. It doesn't preclude another bounce back up to a new high but it would tell us that we're not starting a big impulsive rally to the upside (in other words the downtrend would still be the dominant trend).

The DOW has already broken below Friday afternoon's low (at 12181) and has already confirmed the dominant trend remains to the downside.

Jeff Bailey : 6/17/2008 3:55:41 PM

July Crude (cl08n) settled down $0.60, or -0.45% at $134.01.

July Unleaded (rb08n) settled down $0.02, or -0.58% at $3.4179.

My July "crack spread" finishes 25.505 and pretty close to 05/15/08, also 3-days prior to oil's expiration.

August crack spread 25.376.

James Brown : 6/17/2008 3:54:06 PM

Crude oil may have traded flat today but I'm seeing several new all-time highs in the oil and energy sector. Tomorrow's oil inventory report could add some volatility to this sector.

Linda Piazza : 6/17/2008 3:52:19 PM

And now the OEX has hit the downside target that I wasn't so sure it would ever hit today. In the meantime, that target had risen to 613.41 from its lower level earlier today. This is also potentially strong support on 15-minute closes so bears need to know what they're going to do now. As long as the OEX is forming 15-minute closes below the 15-minute 9-ema, now at 615.13, the downside trend hasn't changed, but bears need to be wary if the OEX charges up to 616-617, stalls there for some time and then pulls back, if that pullback should be shallow. I don't think we'll see all that play out this afternoon, though.

James Brown : 6/17/2008 3:48:44 PM

I'm not sure how much emphasis I would put behind it but IBM is producing a bearish engulfing candlestick today.

Jeff Bailey : 6/17/2008 3:46:15 PM

Ahem ... Heating oil sees first 4 consecutive down days since 4/28, 4/29, 4/30, 5/01.

Jeff Bailey : 6/17/2008 3:45:01 PM

Crude oil sees first 3 consecutive down days since 4/29, 04/30 and 05/01.

James Brown : 6/17/2008 3:31:04 PM

It's interesting that the oversold bounce in Lehman Brothers (LEH) is failing at its descending 10-dma. Today's move has produced a bearish engulfing candlestick pattern. chart: Link

Jeff Bailey : 6/17/2008 3:30:03 PM

NYSE NH/NL now 102/122 ...

NASDAQ NH/NL now 68/131

James Brown : 6/17/2008 3:25:53 PM

Activision (ATVI), a video game maker and producer of the extremely popular Guitar Hero, is soaring to new all-time highs and breaking out past another trendline. Check out this long-term chart and how ATVI just keeps pushing through resistance: Link

Linda Piazza : 6/17/2008 3:25:01 PM

The OEX is now below the neckline of that potential H&S, but it's got that potential support on 15-minute closes now at 613.44. I've been saying all day that bears needed to have their just-in-case profit-protecting plans in place if that level should be approached. Perhaps my advice is somewhat compromised by the fact that I wasn't so sure the OEX would dip to that target (smile), but I still think bears need to know how they'll treat this test. There's also potential support on a daily close at 611.18, and the weekly 200-sma is at 612.53, so there's a whole lot of potential support, both short term and on daily and weekly closes.

Linda Piazza : 6/17/2008 3:21:02 PM

Over the last hour, the VIX has been testing that potential Keltner resistance that I mentioned earlier, now at 21.06. It's pierced it several times but hasn't been able to close a 15-minute period above it. It has not done so since Friday morning. Monday morning first thing, it spent some time challenging it, piercing it, but not closing 15-minute periods above it. The VIX sometimes overruns Keltner support and resistance a bit, but what bears need to see is this resistance violated consistently on 15-minute closes, and then they need to be aware of next potential resistance on 15-minute closes from 21.67-21.91. Bulls want to see the VIX finally give up this test and roll down again. VIX at 21.06 as I type but jumping around a bit.

James Brown : 6/17/2008 3:18:45 PM

Biotech stock Biogen Idec (BIIB) is seeing its oversold bounce fail. This could be an entry point for puts. Shares have some support in the $55-54 zone but the P&F chart is forecasting a $51 target.

Keene Little : 6/17/2008 3:15:50 PM

The DOW found resistance yesterday and this morning at its downtrend line from May 19th. The setup from here is for a very hard selloff into the end of the week so keep that in mind if you're hoping (bad 4-letter word) for a buoyant market to help any of your options positions. But if the bulls can save it here and point it north again tomorrow then there's a chance for a rally at least up to the confluence of trend lines near 12500 by Thursday. Daily chart: Link

James Brown : 6/17/2008 3:15:25 PM

Apollo Group (APOL) is pulling back toward what should be support near $50.00. Shares broke through this level of resistance a few days ago and now it's filling the gap. This would be the spot to watch for a bounce.

Linda Piazza : 6/17/2008 3:04:52 PM

Time to start thinking about end-of-day decisions, but you need information about what happens overnight before you make those. Tonight, Japan gets its minutes from the Monetary Policy Meeting (Japan's version of the FOMC) at 7:50 pm ET. That's obviously important and potentially market moving. Tomorrow morning at 4:30 am ET, the U.K. gets the same thing, although we don't tend to react too much to developments in the U.K. unless it's something to do with the LIBOR or something along the lines of the Northern Rock debacle. The U.K. also gets its CBI Industrial Trend Orders and Canada its Leading Indicators, but I don't really see much else for us until crude inventories tomorrow morning.

Jeff Bailey : 6/17/2008 3:03:54 PM

Bonds closed ... 13-week finished up 1.5 bp at 1.955%. Might have gotten a bit of curve steepening back today with 5-year down 5.4 bp at 3.665%, benchmark bond off 2.0 bp at 4.790% with the longer-dated 30-year up 1.0 bp at 4.790%.

Jeff Bailey : 6/17/2008 3:00:41 PM

No kidding ... Crude Oil down a penny these days and it seems like its down a lot.

Jeff Bailey : 6/17/2008 2:59:22 PM

SPX 1,355.94 -0.30% Link ... From 06/02/08 Wrap Link

Linda Piazza : 6/17/2008 2:59:28 PM

We have the potential for a possible second day of consolidation beneath the daily 10-sma (or 9-ema, which I prefer to watch on the OEX's chart). If that's indeed what we see at the end of the day, particularly if the OEX closes a bit nearer its opening value of 618.40, that's actually a more bullish outcome than the immediate reversal, but it's not a guarantee that reversal won't come. Until and unless the OEX starts producing daily closes above its 9-ema, currently at 619.20, it's still got a potential downside target at 611.25.

Jeff Bailey : 6/17/2008 2:57:30 PM

US Senate Votes Against Motion On Extending Tax Benefits

Jeff Bailey : 6/17/2008 2:56:50 PM

Panera Bread Co. (PNRA) $45.38 -2.09% Link ... Today's trade at $45.00 does generate a reversing lower PnF sell signal.

Long the UPA-TI on 6/11/08, and have sold COVERED the UPA-SH on 6/12/08.

Linda Piazza : 6/17/2008 2:55:55 PM

It's been one of those days, hasn't it? Welcome to summertime trading. The OEX has potential Keltner support at the rising neckline of its potential H&S, at 614.64 and lower, at 613.61. That lower one is the more important one, although I'm not trusting too much I'm seeing today. The OEX has resistance thickly layered up to 617.31.

Keene Little : 6/17/2008 2:55:23 PM

What's a good way to play bounce in BIX?

In another sector (wink).

I do not believe the banks have put in a longer term bottom yet so I am not recommending any money on the long side in that sector. Even when they start to bounce and correct the decline from 2007 I think it will be somewhat pathetic because the rest of the market will probably not be doing well. In my opinion it?s dead money when you put it into the banks. Perhaps a good pair trade, if you?re interested, would be long banks, short techs but again, it?s probably a little early for that.

Jeff Bailey : 6/17/2008 2:42:05 PM

StreetTracks Gold (GLD) $87.23 +0.25% ... ~872.30 spot.

Jeff Bailey : 6/17/2008 2:41:10 PM

FXY $92.40 +0.13% ...

Jeff Bailey : 6/17/2008 2:40:52 PM

FXE $155.37 +0.23% ...

Jeff Bailey : 6/17/2008 2:40:29 PM

Scrolling back through my newsfeeds, see a 01:48 PM EDT headline ... Hamas Says Gaza Cease-Fire With Israel To Last 6 Months

At 01:54 PM EDT ... ECB's Mersch see rates at historical highs until end 2008. Foresees inflation coming down over medium term.

James Brown : 6/17/2008 2:39:56 PM

The Dow Jones U.S. Railroad Index (DJUSRR) is down 2.7% and breaking down under its 50-dma. chart: Link

Jeff Bailey : 6/17/2008 2:38:22 PM

Seeing "volume spikes" in various securities at approximately 01:50 PM EDT.

Jeff Bailey : 6/17/2008 2:35:58 PM

People's Bank of China's Zhou saying China can learn from US subprime crisis. Dollar's weakness contributing to inflation pressure in China.

Linda Piazza : 6/17/2008 2:31:50 PM

It seems that Keene and I were looking at BIX charts at the same time. That shows the attention being given to the financials these days as both of us were scanning BIX charts.

Linda Piazza : 6/17/2008 2:30:47 PM

The BIX just dropped to test the earlier low of the day, and the weakness in financials is impacting the OEX, too. The BIX is currently 193.00 with the previous low of the day 192.52. Watch this equal-low test to see if there's a bounce or a breakdown. Or a steadying, I should add.

Keene Little : 6/17/2008 2:30:43 PM

I should add a note to the daily BIX chart where I'm wondering if the little throw-under below the bottom of the wedge could be setting up a reversal. If so it should have happened by now--the bounce should be stronger and back up inside the wedge. The fact that price is consolidating sideways at the bottom of the wedge means there's a good chance it's going to fall out and drop lower (pink on the chart).

Keene Little : 6/17/2008 2:22:32 PM

I was going through some of my older charts and came across the monthly chart of the banks (BIX) and the statement I put on the chart back in the beginning of 2007 when I was looking for a top to the rising wedge pattern and suggested it should be a great short play in the sector. The retracement of the wedge happened a lot faster than even I imagined. So far the banks have "only" given up a little more than half their value but the index is back below the 2000 low. Pretty amazing move: Link

But notice the wave count on it and the label '5' at the bottom of the decline. Once this 5th wave completes we should see a big bounce back up to correct that steep decline. I have no idea how big or how long the bounce will last but now's not the time to be short the banks (or at least have your stops dragged down closer). As I've been showing on the daily chart, I think the 5th wave is forming a shallow descending wedge since January and should be close to finishing (in price if not time): Link

Jeff Bailey : 6/17/2008 2:16:55 PM

02:00 Internals found at this Link

James Brown : 6/17/2008 2:15:24 PM

The XNG Natural Gas index (XNG) is up and poised to breakout even though natural gas, the commodity, has pulled back from its daily highs. chart: Link

James Brown : 6/17/2008 2:09:04 PM

The Dow Transports (TRAN) index is producing its fourth failed rally in a row at its 50-dma (just under the 5200 level). Looking at some of the short-term charts, I suspect that the next move will be lower. A caveat to that would be a downturn in oil could spur some strength in the transports.

Linda Piazza : 6/17/2008 2:05:48 PM

The OEX has now spent some time consolidating beneath the resistance now up to 617.50 on 15-minute closes, with the strongest locus at about 617.13. It probably needs to break through this resistance--and remain above it--within the next 45 minutes or so, or it risks rolling back down again, at least to test the neckline of the potential H&S formation. That neckline is currently about 614.70, but the OEX would need confirming 15-minute closes beneath 613.45 to confirm it. OEX at 616.78 as I type.

Linda Piazza : 6/17/2008 2:03:13 PM

The VIX is testing resistance that has held on 15-minute closes since Friday morning, although it's been pierced intra-15-minute periods. That resistance is at 21.07 on 15-minute closes, with the VIX currently at 20.78 after hitting a 21.04 high in the just-concluded 15-minute period.

Jeff Bailey : 6/17/2008 2:02:27 PM

Decent volume spike in BOOM $35.79 -2.98% ...

Jeff Bailey : 6/17/2008 1:54:24 PM

VXN.X 24.37 -2.59% ...

Jeff Bailey : 6/17/2008 1:54:04 PM

Swing trade covered call buy back alert! ... Let's buy back the two (2) NVIDIA Corp. NVDA Jul $27.50 Calls (UVA-GY) at the offer of $0.10.

NVDA $20.72 -1.42% ...

Keene Little : 6/17/2008 1:47:34 PM

If SPX were to bounce back above 1362 I'd begin wondering if we're in a little larger rising wedge pattern for the bounce off last week's low. As shown on the 60-min chart we could see a continuation of the bounce up to the downtrend line from May 19th, perhaps up to 1376.25 which is the 62% retracement of the June 5-12 decline. Link

That's the bullish possibility for this week if the bullish players can keep the market heading higher into opex. But a drop below Friday's low near 1345 would negate further bullish potential for this week.

Linda Piazza : 6/17/2008 1:45:35 PM

The OEX isn't blasting up through its potential resistance on 15-minute closes at 616.97, but it is testing it. OEX at 616.78 as I type. Bulls don't want the OEX to spend too much time in a tight range between 616-618, as that sets up the possibility that it could be forming a little H&S with the neckline now at about 614.50.

As you can guess, I don't trust much of anything today. Although I pointed out the doji just under the daily 10-sma yesterday at the close, I haven't been too trustful of the validity of the current downside target near 613.19. Now, I'm a bit wary of what happens next, too, as I keep picking up on little under-the-market things that just aren't quite right.

Jeff Bailey : 6/17/2008 1:33:37 PM

InBev CEO saying $65 offer for BUD is "fair price, full price"

Keene Little : 6/17/2008 1:33:15 PM

A 38%-62% retracement of today's decline gives us a Fib resistance zone of 1358-1361 to watch for the bounce to fail and roll back over. There remains the possibility that after another leg down (assuming we'll get one) that we could be at just the beginning of a larger choppy climb back up, as I've been showing on the SPX daily chart (in pink): Link . It takes a break back below the June 12th low of 1331.25 to keep the bears in control. Right now the bulls and bears are wrestling for control of the bus.

Jeff Bailey : 6/17/2008 1:32:02 PM

Anheuser Busch (BUD) $61.48 +1.56% ... Senator McCaskill saying she'll do everything in her power to stop BUD sale.

James Brown : 6/17/2008 1:22:08 PM

Follow up chart on Monsanto (MON) ... the stock looks dangerous here near the top of its bearish wedge. chart: Link

Linda Piazza : 6/17/2008 1:21:24 PM

TRIN now 0.89.

Linda Piazza : 6/17/2008 1:20:57 PM

There's a lot of stall potential for the OEX now in the 616-618 area, so those hoping the OEX will bounce hard now want it to blast through that resistance and stay above it. Currently, the setup suggests at least a little time spent stalling in that zone before the OEX could attempt a higher push, if it even could do that, but as you know, I haven't trusted the setups today.

A downturn through the day's low, confirmed then by 15-minute closes beneath about 613, would be a bearish development.

James Brown : 6/17/2008 1:16:36 PM

The chemical-fertilizer stocks are setting new all-time highs.

POT ... +3%, new high at $237.12
MON ... +3.9%, new high near $142.50 but still under resistance trendline
MOS ... +3.1%, new high near $158
TRA ... +5.1%, new high near $55
CF ... +4.5%, new high near $167
IPI ... +2.6%, new high near $64
SQM... +5.8%, new high over $50
AGU ... +4.2%, new high over $110

Linda Piazza : 6/17/2008 1:15:09 PM

The OEX is pushing above its 15-minute 9-ema, now at about 616.30, but it hasn't closed a 15-minute period above it yet. Next resistance would be 616.98.

James Brown : 6/17/2008 1:17:37 PM

On CNBC...new product out...
PowerShares Double-Short Crude Oil ETN, symbol DTO.

It must be really new since I don't see it trading yet.

Edit: The DTO began trading today. Starting value was $25.00. Currently around $25.37.

James Brown : 6/17/2008 1:08:27 PM

Caterpillar (CAT) - This stock is also seeing its oversold bounce fail under its trendline of lower highs. Could be an entry point for new puts. Chart: Link

James Brown : 6/17/2008 1:04:45 PM

Deere (DE) - The stocks recent bounce is failing and this might be a new entry point for puts. Chart: Link

James Brown : 6/17/2008 1:01:21 PM

3M Co. (MMM) is nearing support near $75.00 and it has already tested its recent lows near $74.85. A breakdown here could be a new entry point for puts. I would caution you that MMM isn't the fastest moving stock. The P&F chart points to a $69 target.

James Brown : 6/17/2008 12:57:08 PM

Exit alert - Research In Motion (RIMM) is an OI call play and the stock hit $145.92 this morning. Our first target was the $144.00 level. The stock looks a little short-term overbought and due for a dip. I suggest readers take some profits here.

Jeff Bailey : 6/17/2008 12:53:54 PM

YM contract specification alert! ... Going forward, any YM futures trades that I profile will be for the September contract (ym08u). All trades are for one (1) contract unless specified otherwise.

James Brown : 6/17/2008 12:52:39 PM

Trading Idea: Crown Castle Intl. (CCI) - CCI is breaking out from a bull flag pattern. This particular pattern is suggesting a $50 target. Coincidentally the Point & Figure chart is forecasting a $49 target. CCI still has resistance near $43. chart: Link

Linda Piazza : 6/17/2008 12:52:16 PM

The OEX's 15-minute 9-ema is now 616.25. Bears want this to be resistance on 15-minute closes; bulls want the OEX to climb above it and maintain 15-minute closes above it. OEX at 615.53 as I type.

Jeff Bailey : 6/17/2008 12:48:18 PM

Sector Break Down of NH/NL yesterday via Dorsey/Wright at this Link

James Brown : 6/17/2008 12:45:57 PM

CNBC was just talking about the shipping stocks being up on positive analyst comments. The group really is soaring today. There is also an industry conference where many of these companies will be presenting.

DRYS .... +8.8% to $82.67 testing its 10-dma and 200-dma
EXM .... +9.1% to $42.70... nearing resistance at 50-dma and 200-dma
PRGN ... +5.6% to $18.64 and breaking out over 200-dma
FRO .... +5.3% to $70.00 testing all-time highs
TBSI ... +9.0% to $41.40 and breaking out over its 200-dma.
DSX ... +3.7% to $33.67
GNK .... +10.4% to $62.64 and breaking out over its 200-dma
FREE.... +4.6% to $6.48... nearing resistance at 200-dma

Linda Piazza : 6/17/2008 12:39:52 PM

Potential downside target and support on 15-minute closes for the OEX at 614.40 and then 613.02. Bears should have profit-protecting plans in place for the test of the lower level, if it's tested.

Jeff Bailey : 6/17/2008 12:39:44 PM

Noble Energy (NBL) $101.77 +3.84% ... Posting gain despite this morning's pre-market news that it drilled a "duster" at its West Tapir exploration well on Block 30 offshore Suriname. Located in 300' of water, the well was drilled to a total depth of 12,700 feet. NBL holds a non-operating 45% working interest in Block 30.

Linda Piazza : 6/17/2008 12:39:00 PM

TRAN finally just hit a new low of the day, although a minimal one. It wasn't until now corroborating new lows, but is now, even if it's doing more following than leading. It's nearing potential support on 15-minute closes and is currently at 5134.95.

Keene Little : 6/17/2008 12:37:37 PM

If SPX drops down to a new daily low after the small bounce/consolidation over the past hour it will create a small 5-wave move down from this morning's quick high. It could find support around the 1352 area where we'll see a stronger bounce back up to retrace a portion of today's decline. But the 5-wave move down would set the trend to the downside for at least another leg down following the bounce. But first let's see if SPX finds support around 1352 if it drops lower again.

Linda Piazza : 6/17/2008 12:36:40 PM

If I were to look only at the OEX's 15-minute chart and not examine anything else, I would be telling you that the potential resistance near 616.90-617.10 looks so firm that it's likely going to knock the OEX back, as it's so far doing. I'd tell you that it's going to take either a strong volume-packed punch to get through that resistance or else a lot of time spent just underneath it, chopping around, to loosen it. I'd tell you that the most likely result is that the OEX is going to push toward that lower target and potential support, now at 613.16.

And all that may happen. But I keep picking up signals that warn me to be careful about believing wholeheartedly in that downside target, and so I keep offering warnings, too, that might or might not be needed. As I said earlier, perhaps I've got some bias that I'm not aware of that's coloring my take on the underlyings of the markets. However, the VXO is headed one direction (up) and the VIX another (down) over the short-term and so something is going on that's keeping me uncertain.

Jeff Bailey : 6/17/2008 12:19:45 PM

Goldman's Earnings Press Release Link

Jeff Bailey : 6/17/2008 12:18:28 PM

Goldman Sachs (GS) $182.03 -0.03% ... Steady after reporting Q2 profit of $2.05 billion, or $4.58/share. Revenue -7% to $9.42 billion from $10.18 billion a year earlier.

Consensus was for EPS of $3.42 on revenue of $8.74 billion.

Jeff Bailey : 6/17/2008 12:14:12 PM

12:00 Internals found at this Link

Linda Piazza : 6/17/2008 12:13:45 PM

Strange, but the VXO is heading up again this 15-minute period while the VIX is dropping sharply as I type. I've seen these two diverge a bit, but not this strongly.

Linda Piazza : 6/17/2008 12:11:19 PM

Potential resistance on 15-minute closes at 617.07-617.10 for the OEX. If the OEX can maintain 15-minute closes above this bullish/bearish benchmark, that erases the lower potential downside target. OEX at 616.36 as I type.

Keene Little : 6/17/2008 12:09:49 PM

So far SPX has found support at the 1355 level but the bounce is hardly impressive. Any bounce back above the early morning low at 1358.66 would suggest the possibility that the pullback is finished or that we'll just chop around today.

Linda Piazza : 6/17/2008 12:04:54 PM

TRIN 1.00 now.

Linda Piazza : 6/17/2008 12:04:35 PM

As long as the OEX is maintaining 15-minute closes beneath the 15-minute 9-ema, now at about 617, it's got that potential downside target now at 613. This is also potential support on 15-minute closes, so bears should decide ahead of time how they'll handle a test of that zone, if it should be tested. The USDJPY has now followed the OEX in breaking the support of its bullish/bearish benchmark, but it's still above its daily 200-ema. The VIX still has not produced a new high of the day, however, but the VXO did.

Linda Piazza : 6/17/2008 11:50:49 AM

OEX bears should think about their profit-protecting plans if the OEX should hit the current downside target and potential support, now at 612.89.

Linda Piazza : 6/17/2008 11:48:17 AM

TRIN is now 1.05, moving up toward 1.10 potential resistance on 15-minute closes. It's continued its bounce ever since I first warned that it had hit potential support, but it's gone further than I thought it would. Now watch as this rseistance is tested, as it's resistance that often retards further upward movements in the TRIN.

Jeff Bailey : 6/17/2008 11:47:06 AM

Ivanhoe Energy (IVAN) $3.37 +8.70% Link ... Company announced that is is increasing the private placement of C$88 million due to significantly increased expression of interest from investors. Price of the offering set at C$3.00/share. Proceeds being used to make initial payment of C$30 million required under the agreement with Talisman Energy (TLM) $23.93 +0.84% to acquire the company's interests in three leases in the Athabasca oil sands region in the Province of Alberta. Remainder of capital to be used for general corporate purposes and planned development activities on the oil sand leases.

Linda Piazza : 6/17/2008 11:46:28 AM

Maybe I'll say this all the way down to the next potential target at 612.76, but I'm still not convinced that the OEX is going to just crater. I do see it as a possibility, but not yet a probability. The OEX did dip lower than 616 and has lost the important support near 617, support that now must be considered potential resistance, and it did do so after rising to retest its rising wedge support after breaking through it. So, I'm questioning myself, wondering why I'm being so dogmatic about not yet being convinced that the OEX is going to fall straight to its next downside target. I don't know, maybe it's some personal bias getting in my way, but things just aren't working right. The VIX hasn't jumped up to a new high. The USDJPY is so far holding the analogous support as that the OEX broke. So, I'm just cautioning that if you're trading the bearish side with this supposed breakdown, you be very cautious about protecting any profits or not letting any losses get too big.

Linda Piazza : 6/17/2008 11:33:44 AM

The OEX lost the potential support at 617.11 on that 15-minute close and is, like the A/D line before it, heading down to test a sliding-lower potential support level that's now at 615.60 for the OEX.

Linda Piazza : 6/17/2008 11:32:54 AM

USDJPY now 108.09.

Linda Piazza : 6/17/2008 11:32:10 AM

The USDJPY hasn't given us much help today in predicting next equity direction although its choppy behavior has certainly corroborated the choppy behavior in equities. That's probably natural for the USDJPY because it's testing the resistance of the daily 200-sma at about 108.20 and the support of the 200-ema at 107.84. However, if the USDJPY were to drop below that 200-ema and maintain levels below it, that would be short-term bearish. Keep in mind at all times, however, that this is a daily average and the USDJPY could bounce back up by day's end. So, for now, we have sideways consolidation just under the 200-sma after first testing it on Friday. So far, since we could expect a stalling and since USDJPY and equity bulls would prefer that stalling be accomplished in a sideways fashion, bulls are getting their hopes fulfilled. Keep this on your radar screen, however.

Keene Little : 6/17/2008 11:30:59 AM

After finding resistance at 1363 SPX has now dropped to a new daily low. Now watch for potential support where it will have two equal legs down today at 1355.31. If we're going to just chop around we could see another bounce back up from there.

Jeff Bailey : 6/17/2008 11:24:16 AM

Fifth Third Bancorp (FITB) $12.79 -5.67% ... #21 most active.

Linda Piazza : 6/17/2008 11:24:00 AM

The A/D line still hasn't been able to break back above today's bullish/bearish benchmark now at about 230. It did rise to test it but has pulled back to 10 as I type. Support also seems to be firming just a little, with that support now at -170 to -215. So, the outcome isn't yet known, but the support isn't sliding lower as steeply as it was earlier.

Jeff Bailey : 6/17/2008 11:22:42 AM

Sector Losers ... Regional Banks -2.97%, Money Center Banks -2.45%, Home Construction -2.01%, Broker/Dealer -2.01%, Retail -0.88%

Jeff Bailey : 6/17/2008 11:21:19 AM

Sector Winners ... AMEX Nat. Gas +1.82%, Airlines +1.55%, CBOE Oil +1.44%, Gold Bugs +1.36%, Oil Service +1.03%

Jeff Bailey : 6/17/2008 11:15:55 AM

I must confess that my BULLISH profile of TSN on 06/09/08 came without the knowledge of the news of the floods. I try and keep an eye on the news wires, but missed it.

Surging corn prices have also pressured the shares.

Jeff Bailey : 6/17/2008 11:13:57 AM

Tyson Foods (TSN) $15.04 +2.03% Link ... Company said late yesterday that is extended the closure of its Columbus Junction, Iowa, pork plant until Saturday and possibly next Monday due to flood waters. Max capacity is 9,000 hogs/day.

Linda Piazza : 6/17/2008 11:12:00 AM

The OEX's potential resistance on 15-minute closes is now 620.69-621.57. Support, down to 616.16 but strongest at 617.14-617.25.

Keene Little : 6/17/2008 11:03:37 AM

SPX is bouncing back up for what could be a retest of its broken uptrend line from Friday afternoon's low, near 1363. It's not a very clear price pattern here so anything can happen but watch for potential topping and a roll back over to new daily lows.

Jeff Bailey : 6/17/2008 11:02:01 AM

Alcoa (AA) $40.16 +1.15% Link ... #15 weighting in Dow Industrials.

Jeff Bailey : 6/17/2008 11:01:08 AM

Du Pont (DD) $47.74 +1.29% Link ... #13-weighting in Dow Industrials.

Linda Piazza : 6/17/2008 10:57:02 AM

I'm honestly not certain that the support mentioned in my 10:52:11 post will be breached. It seems possible if not yet probable that the OEX could chop around between about 616-622 for a time before next direction is decided.

It's my view that it's a possibility, although not yet a probability, that the OEX could spend a good part of the summer chopping around, perhaps between 608-635 or so, and that the OEX might be establishing its summertime range now. Choppy conditions are created when there's uncertainty about next direction. When a trader's view for the next month or two at least is that there might be chop, all technical setups should be looked at with some skepticism because chop tends to chop up one's predictions, too.

Jeff Bailey : 6/17/2008 10:57:32 AM

Companhia Vale do Rio Doce (RIO) $36.40 +4.53% Link ... rips away from June's "Max Pain" theory ($35.00)

Jeff Bailey : 6/17/2008 10:52:59 AM

UYM Fact Sheet Link

Linda Piazza : 6/17/2008 10:52:11 AM

Time to mention a potential downside target if the OEX's potential support from 616.13-617 is breached on a 15-minute close. That potential downside target is currently 612.70. Remember that's near the OEX's weekly 200-sma, at 612.55. It also has potential Keltner support on a daily close at 611.48.

Jeff Bailey : 6/17/2008 10:50:50 AM

ProShares Ultra Basic Materials (UYM) $111.68 +2.08% ... challenges its 5/19/08 52-week high.

Linda Piazza : 6/17/2008 10:47:02 AM

The A/D line is trending lower, finding support at the descending Keltner line now at about -110. It's not good that it's trending lower along that line but it is at least slightly reassuring that it's finding support at that line and that RSI is now turning up from its below-30 level. All this indicates so far is that the A/D line may be gathering strength for a test of the higher resistance now near 250. It's not any kind of guarantee that it can scramble back aboe that important S/R level. It's teetering on the brink of giving way, so the evidence is mixed. The A/D line is 43 as I type.

Jeff Bailey : 6/17/2008 10:46:54 AM

Most Actives ... QQQQ $48.90 +0.20%, SPY $136.58 +0.25%, INTC $22.82 -0.17%, IVAN $3.34 +7.74%, MSFT $28.91 -0.06%, AAPL $179.80 +1.66%, CSCO $26.42 +0.57%, RIMM $143.60 +1.85%, AMAT $20.47 -1.53%, XLF $23.27 -1.39%

Linda Piazza : 6/17/2008 10:38:17 AM

The TRIN did go all the way up to hit 0.935, although I hadn't been sure earlier that it could hit that potential resistance level. As I type, it's at 0.81, having been knocked back soundly, so keep a watch on it. It's still in the lower half of its Keltner channels, so bearish for the TRIN and bullish for the equities, but I had noted earlier this morning, when it was 0.55, that it was testing potential support and could trend upward. Now equity bulls want this resistance to hold.

Linda Piazza : 6/17/2008 10:35:05 AM

The OEX has lost the support of the 15-minute 9-ema and has dipped to test more significant potential support on 15-minute closes from 616.46-617.25. If this holds, it sets up the potential for the OEX to just chop sideways, from about 616.50-621.50 or maybe 616-622, for a while before ultimate direction is decided.

Keene Little : 6/17/2008 10:34:28 AM

SPX just broke yesterday's late-day low and that turns the price pattern bearish. I'd stay on the short side of the market until we get some evidence that it's going to be just a small pullback. Two warnings of course--we could be in a period of a choppy sideways consolidation and it's opex week where anything can happen out of the blue. But for now I certainly don't like the upside.

Jeff Bailey : 6/17/2008 10:27:23 AM

10:00 Internals found at this Link

Note(s): It would currently take a closing measure of >= 24.00% for the NYSE 5-day NH/NL ratio to see a 3-box reversal back higher.

It would take a closing measure of >=24.00% for the NASDAQ 5-day NH/NL ratio to see a 3-box reversal back higher.

Linda Piazza : 6/17/2008 10:25:28 AM

The TED spread, a measure of default risk, is currently 0.80, up from its day's low of 0.74 but still within the range that it's been in over the last week or so. For review, we don't want to see it drive over about 0.95 and stay there, but be aware that this is a short-term anecdotal observation taken during a time when there's already an aberration in the way the TED spread is behaving. It's way out of its normal range.

Linda Piazza : 6/17/2008 10:20:59 AM

TRIN 0.82, back up to test its 15-minute 9-ema at 0.87. Equity bulls want that to be resistance on 15-minute closes.

Keene Little : 6/17/2008 10:17:48 AM

The SPX 10-min chart that I posted last night ( Link ) shows a 3-wave move up from yesterday's close in order to finish the rising wedge pattern. If SPX can turn back up here, instead of breaking down, it could give us a quicker 3-wave move up than I had depicted and finish at a slightly lower level, such as 1370 instead of 1372: Link

A little throw-over above the wedge and then drop back down would create the sell signal. But a break below yesterday afternoon's late-day low (1358.98) from here would suggest at least a deeper pullback was coming. More bearishly it would suggest the bounce off the June 12th low is finished and we'll be starting the next big leg down.

Linda Piazza : 6/17/2008 10:11:43 AM

The VIX has hit potential support on 15-minute closes at 20.14, piercing that support and then bouncing. It's at 20.35 as I type. Equity bulls would like to see it slide lower along the descending Keltner support or, if it bounces, to find resistance on 15-minute closes at the 15-minute 9-ema, now at 20.65.

Linda Piazza : 6/17/2008 10:06:28 AM

The A/D line is clinging to potential support at about 250 on 15-minute closes. It's actually a little below it, at 241 as I type, threatening to fall toward next support at about -25. Bulls didn't want to see the A/D line drop this far off the day's high, and now there's some concern about what will happen if it climbs. If it does, I would carefully watch the 400-500 level for stalling or rollover potential.

Linda Piazza : 6/17/2008 10:04:38 AM

The OEX's 15-minute 9-ema, now at 619.05, held as support on that 15-minute close. Bulls got the first of their wishes fulfilled. Now, however, the OEX has to bulldoze through potential resistance at 621.20 on 15-minute closes and 622.34 on 30-minute ones, and I'm not certain, given that there wasn't a gap to scare shorts, that result will happen. The OEX is now 619.70.

Linda Piazza : 6/17/2008 9:57:43 AM

This morning, Germany's ZEW Economic Sentiment number was reported at -52.4, far worse than either the anticipated -42.4 or the previous -41.4. Germany's economy has to a great extent been driving the ECB's decisions and worries about inflation, with Spain's and Italy's economies long ago beginning to show strain. The EURUSD had been dropping already ahead of the release of the ZEW Index, dropping to test yesterday's low. Since then, it's been "triangling up" just above its early morning low of 1.5464. It's 1.5493 as I type. With the ECB's head Trichet remaining stubbornly hawkish, given that the ECB's mandate is different than our FOMC's, there's been a tug of war as Trichet and our Paulson and Bernanke do what they can with words to shore up their currencies against the other's. If Germany's economy falters, though, Trichet may have difficulty remaining as hawkish.

Keene Little : 6/17/2008 9:52:50 AM

The RUT is showing a bearish setup on this morning's daily chart. The quick bounce up this morning came very close to tagging its broken uptrend line from March and its 200-dma, both just under 744 (the quick high was at 742.70). Needless to say a kiss goodbye at resistance here would not look good and right now the 30 and 60-min charts support a down day. Link

Linda Piazza : 6/17/2008 9:50:52 AM

TRIN now 0.78, and it's testing the first level of resistance, at about 0.78 on 15-minute closes. The next level is 0.94 currently. I didn't think the TRIN would likely get up to that next level, but then I didn't think it would get to this one so quickly, either, so the possibility is obviously greater than I thought it.

Note: As I typed, the TRIN dropped to 0.70.

Linda Piazza : 6/17/2008 9:48:48 AM

That potential Keltner resistance on 15-minute closes hit hard, didn't it? The OEX was knocked all the way down to its 15-minute 9-ema, now at about 618.75. Bulls want this to hold on 15-minute closes and for the OEX to bounce right back up and hit that resistance again, this time barreling through it. If not, they want potential support at 617.09 to hold on 15-minute closes. I think it's about 50-50 whether the 15-minute 9-ema will hold as support or not.

Linda Piazza : 6/17/2008 9:44:48 AM

The A/D line is dropping more than is optimal for bulls. They need support at 250 to hold or, if not that, support at about 50. A/D line now at 417.

Linda Piazza : 6/17/2008 9:43:30 AM

TRIN now 0.65.

Linda Piazza : 6/17/2008 9:43:20 AM

TRIN is 0.55, a bullish (for equities) number, but it's sitting right on potential Keltner support that could bounce it. So, it's bullish for now, but could trend upward to test resistance near 0.81 or even 0.94, although it doesn't seem likely that it would climb that high at this point. Just be prepared for a potential bounce attempt, as that could dampen equity climbs a bit even if the TRIN stays in ostensibly bullish territory.

Linda Piazza : 6/17/2008 9:38:31 AM

The A/D line started the day in the upper or bullish half of its Keltner channels. It's hitting a line that formed resistance most of yesterday, at about 900. If it is resistance again today and the A/D line pulls back, the action maintains the climb off yesterday's low as long as it maintains 15-minute closes above 638 or maybe as low as 550. As I typed, it began that pullback and is now at 668.

Linda Piazza : 6/17/2008 9:36:43 AM

There was no gap above resistance, which would have forced shorts to cover and in fact been a little more bullish. This is just a retest of the resistance that held yesterday, so the outcome is a little more in doubt.

Linda Piazza : 6/17/2008 9:35:15 AM

The OEX is shoving back into that rising wedge that it broke through to the downside yesterday. Something about that last-minute breakdown yesterday brought me to caution that it could be a trap, and it seems to have been. The OEX is currently charging right up to test potential resistance on 15-minute closes at 621.06 with the rising wedge's upper trendline at about 622. The 30-minute chart says that resistance can be found up to 622.19 on 30-minute closes, so you have the first test of resistance going on now without the resolution yet known.

Jane Fox : 6/17/2008 9:32:34 AM

All markets have broken their previous day highs even though there was some economic news that was not encouraging. Link

Keene Little : 6/17/2008 9:29:41 AM

Equity futures made a very steady climb since the lows near 2:00 AM. I would even say it looks manufactured--barely a pullback in the climb up. Now the question of course is whether the gap up will hold. Based on the price pattern over the past two days I'm having my doubts about that. For starters, keep an eye on SPX 1372 if it gets there.

Linda Piazza : 6/17/2008 9:29:14 AM

Yesterday, I noted at the close that the OEX was ending the day "jammed under resistance that's held all day, primed either to gap above that resistance tomorrow morning or maybe turn down below it." While the doji at the 10-sma caused me to urge bulls to examine how much risk they wanted to take home overnight when several market-moving developments were due, I noted that a favored tactic of big money was to "gap prices higher and force shorts and got-to-get-on-the-train bulls to help them drive prices higher." It appears that we'll get the gap this morning.

As I cautioned yesterday, I would again caution today that the 619-623 level is rife with potential resistance. The 627 level appears to be the next level to watch for trouble.

So, the possibility of a pop-and-drop day must be considered, and I'll do my best to point out any signs I might see, but this appears on the surface to be a tactic to run prices higher and force retail traders and others to help pump up those prices. Make no mistake, though. If that's what it is, big money has already done its buying at lower and safer levels. So, beware the possibility that shorts and jump-on-the-train new bulls will give out and prices will drop again. So, bulls should enjoy the gains and but always evaluate where they want to start stepping out of partial positions or otherwise protecting profits.

Jane Fox : 6/17/2008 8:58:49 AM

A daily chart of Crude Oil shows a marked difference in how it has been trading in the last week compared to the last year. For almost a year Crude has been climbing with little ambivalence but now it feels like it may be just a tad scared of these heights. Link

Jane Fox : 6/17/2008 8:52:28 AM

Dateline WSJ - WASHINGTON -- U.S. producer prices soared in May at their fastest pace in six months, a government report showed, led by higher energy and food prices while pressures accelerated deeper in the production pipeline, a sign inflation remains a threat. Still, prices generally stayed under wraps outside of food and energy due in part to falling prices for cars and light trucks.

Jane Fox : 6/17/2008 8:44:04 AM

May crude energy PPI up 13.1%

PPI up 7.2% in past year

May food PPI up 0.8%

May energy PPI up 4.9%

May core PPI up 0.2% vs. 0.2% expected

May PPI up 1.4% vs. 0.9% expected

Jane Fox : 6/17/2008 8:40:22 AM

WASHINGTON (MarketWatch) -- The U.S. current account deficit widened to $176.4 billion in the first three months of the year from $167.2 billion in the fourth quarter, the Commerce Department reported Tuesday. The current account deficit was 5% of gross domestic product. The increase was largely due to lower income earned by Americans overseas. Net financial flows into the United States fell to $124.3 billion from $213.4 billion

Jane Fox : 6/17/2008 8:39:37 AM

WASHINGTON (MarketWatch) - Desperately trying to reduce supply, U.S. home builders started construction on 3.3% fewer homes in May, the Commerce Department estimated Tuesday. Housing starts fell 3.3% to a seasonally adjusted annual rate of 975,000 in May, the lowest level since March 1991. Starts of single-family homes fell 1% to an annual rate of 674,000, also the lowest in 17 years. Builders reduced the number of building permits they've filed for by 1.3% in May to a seasonally adjusted annual rate of 969,000. Building permits for single-family homes fell 4% to a 623,000 rate.

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