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Jeff Bailey : 7/3/2008 10:45:53 PM

FXE $157.02 -1.12%

FXY $93.46 -0.73%

FXB $198.30 -0.57%

Jeff Bailey : 7/3/2008 10:44:48 PM

DXY's 04:00 tick was 72.713

Jeff Bailey : 7/3/2008 10:43:14 PM

TRIN's h/l/c Thursday was 1.12/0.77/0.77 Link

OI Technical Staff : 7/3/2008 9:59:59 PM

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Jeff Bailey : 7/3/2008 1:59:29 PM

CRY's 01:00 PM EDT tick was 470.04

Jeff Bailey : 7/3/2008 1:57:58 PM

DXY's 01:00 PM EDT tick was 72.741

Jeff Bailey : 7/3/2008 1:10:49 PM

Q2 earnings season kicks off next week!

AA $32.81 +2.18% ... on Tuesday with consensus at $0.68/share on revenue of $7.34B

Jeff Bailey : 7/3/2008 1:07:08 PM

Venezuela's Chavez repeats threats to expel EU companies.

Keene Little : 7/3/2008 1:06:40 PM

I second Linda's recommendation to have a great weekend. As they say, on your death bed you will regret not having spent more time with family and friends, not that you wished you spent more time at work or in the market. Life is about priorities and make sure your's are about your family. The market is always here but time with your family is not. This especially true with your kids. It's absolutely mind boggling how fast that time went. I think that's why having grandchildren is so special. There aren't many "do-overs" in life. Grandchildren is one of them.

I hope everyone has a great long weekend. Stay away from those who have had too much to drink and start lighting off fireworks. Be safe and have fun. See you Monday.

Linda Piazza : 7/3/2008 1:06:03 PM

Continuing my 12:54:39 post, you might have noticed that I'm out of those OEX JUL 560/550 bull put spreads but the OEX hasn't hit the sold strike. Also, from my comments all week about my expectation that the OEX might produce a doji or small-bodied candle at Keltner support on the weekly chart, which it did, you know that I think there's at least a small chance that the OEX could bounce. Maybe I never would have had to have closed that spread and it would have been profitable and I could have kept my carefully accumulated profits for July. Will I be upset if that happens? Nope. It's more important for me to know that I can control losses, that I have a method that keeps them in line when things are going wrong. More importantly to me, when I have a granddaughter whose health worries me far more than the markets, is that I have a method that allows me to control emotions.

I know other people who handle these differently and who make far more money than I do, so it's not a case of my way being the only right way. It's just the right way for me, and it's not even "my" way. It's a way I discovered by listening to everything I could find on the CBOE about trading condors and credit spreads.

Jeff Bailey : 7/3/2008 1:03:40 PM

Have a safe 4th of July weekend!

Buckle up!

Linda Piazza : 7/3/2008 12:54:39 PM

Now that I've had my little rant, I want to change gears. It's been another tough week. Some of you may have lost money. I did. After ten straight months of gains, I've spent the last week stepping out of a JUL OEX 560/550 bull put position, starting when the deltas of the sold strike hit 0.22. As of yesterday, I now have a $106 loss for the month. If things get a lot worse, I'm going to have a bigger one due to another position that might get hit.

However, as I've said before, it was a big loss that I took more than a year ago, when I tried this failed hedging procedure as part of my trading goal for last year--to find a good exit strategy for credit spreads--that led to my discovery of the right exit strategy for me. This month has proven the worth of that strategy. I'm trading credit spreads with a 90% probability of success, so one losing month out of 11 is actually beating that statistic.

So, as I said a couple of weeks ago, if you've lost a lot, if you froze or your strategy failed as miserably as that one I had tried early last year, then shame isn't going to help you a lot. Using the experience as a springboard to learn more about controlling risk will help you. In addition to our comments, you can go to CBOE and CBOT and find lots of webinars that will help in your quest.

So, lick your wounds and wallow in shame for a little, long enough to make sure you won't do what you did again, and then stop feeling ashamed and do something that changes your trading style. Absolutely, 100%, do something that brings you joy and fulfillment this July 4th holiday.

Keene Little : 7/3/2008 12:52:12 PM

The euro is definitely leaving a bearish reversal pattern at Fibonacci and channel resistance. This is supportive of the short in gold. Daily chart: Link

Keene Little : 7/3/2008 12:47:38 PM

Linda, good point on the number of sessions (your 12:40 PM post). The number 7 is an important number to remember for market moves. Often times a move will reverse after 7 periods. This is the 7th week following the May 19th high.

Jeff Bailey : 7/3/2008 12:47:14 PM

15-minutes until cash session close

Linda Piazza : 7/3/2008 12:45:42 PM

You know, I kind of hate all this "we just entered a bear market" talk we're hearing on financial TV. First, it was clear from everything we (we writers and subscribers) were hearing and writing here as well as seeing on charts that markets were screeching to their last massive gains late last fall. That's why I pulled our retirement funds into cash just before the downturn.

But all the buy-and-hold talk among fund managers and the financial presses had people holding on. I received a quarterly magazine from Fidelity back a few months ago that showed pages after pages of stock funds that had lost money in the first quarter. (Bond funds performed differently, of course.) And, now people want to talk about a bear market and scare people? How about scaring them ten months ago?

Keene Little : 7/3/2008 12:42:59 PM

Lower stop on gold short to 940 for a breakeven stop. It should not bounce back that high now and I want no risk on the play at this point--it's now a free trade (less commissions).

Linda Piazza : 7/3/2008 12:40:49 PM

I mentioned early in the week that the Keltner (and candlestick) setup suggested that we might get a doji or small-bodied candle for the weekly candle this week. Barring a strong move into the close, a dangerous "barring" exercise, here's what we have: Link Such a candle at the bottom of a decline, at potential support, is . . . sigh . . . yet another potential reversal signal. It should be clear from the chart, from the doji produced the week of 6/09, that not all such potential reversal signals result in reversals.

Candlestick theory has something called record sessions. Basically, in a downturn a record session is a session (a week, on the weekly chart) that produces a lower low than the week before. Most trends consist of 6-8 record sessions, although I've seen them go 10 and 11 in extreme cases. So, by candlestick theory as well as by almost any other theory, it's time for a bounce. Bears should factor in that possibility, as such relief rallies can be sharp when they appear.

However, bulls aren't safe, as should be clear from this week's action. Steep declines can steepen when every signpost suggests its time for a turnaround again.

Keene Little : 7/3/2008 12:38:51 PM

If you like the long side I'd continue to use 1259 for a stop for now. This could be just whacking around before the close and the wave pattern may not be as reliable.

Keene Little : 7/3/2008 12:36:53 PM

The little bounce followed by another move lower is worrisome for a bullish play. It's now forming an impulsive decline from this morning's high (just as it did yesterday). I'm not liking it and will step aside for the weekend and go flat. I'd rather have a nice relaxing weekend and pick it back up on Monday.

Keene Little : 7/3/2008 12:25:03 PM

Here's the setup on the SPX as we head into the long weekend. I'm expecting a bounce but it could turn into a choppy sideways consolidation, possibly a sideways triangle which would be typical for a 4th wave correction as labeled in dark red--wave (iv): Link

For the sideways move it's unlikely we'll see SPX make it above 1280. It takes a rally above 1292 (pink) to suggest we'll see the multi-week rally (into the end of July) with an upside target in the 1340-1350 area.

Jeff Bailey : 7/3/2008 12:19:21 PM

12:00 Internals found at this Link

Linda Piazza : 7/3/2008 12:17:50 PM

There is also potential support for the OEX a bit higher than that I mentioned before, at about 575.60. That support is from the former supporting trendline for the little channel in which the OEX was pulling back yesterday. Ultimately, that support did not hold up yesterday, but there's a chance it could today, if tested, because the OEX now has Keltner support converging just beneath it, with that support now from 575.61-576.76 on 15-minute closes. OEX at 577.98 as I type.

Jeff Bailey : 7/3/2008 12:16:53 PM

SPY $126.15 -0.02% ...

Keene Little : 7/3/2008 12:13:17 PM

If SPX drops below 1260 I'd back away from looking at the long side. We could see some selling into the close if there are more traders worried about holding long over the weekend. Long with a stop at 1259 is a good setup here.

Linda Piazza : 7/3/2008 12:08:22 PM

The OEX's hold on the 15-minute 9-ema is now a bit iffy. It's trading along that -ema and not bouncing from it any longer. This action is flattening the 9-ema. That makes the OEX more vulnerable to a downturn to test support, now at 575.49-576.23, but it doesn't prove it will do so. Just begin to factor in that possibility if the OEX can't maintain support a little better than it's doing now and bounce above about 582.

Keene Little : 7/3/2008 12:07:17 PM

Two equal legs down in the pullback from today's high is at SPX 1264.13 (ES 1264.50) which is at the 38% retracement. That's the first level I'd watch for a long play to set up. It might only be part of a larger corrective pullback but the chances are good that we'll only get a relatively small pullback before heading higher again.

Linda Piazza : 7/3/2008 11:55:19 AM

We're approaching the last hour of trading, and it's time to think about what happens before Monday that could impact your trades. While our markets won't be open tomorrow, others will, of course. The most important developments will probably be Japan's Leading Economic Index at 1:00 am tonight and Germany's Factory Orders at 6:00 am tomorrow morning. Saturday, the ECB's President Jean-Claude Trichet speaks at an economic conference in Aix-en-Provence.

I don't have the Eurozone's economic schedule for Sunday night and Monday morning, but overnight Japan will releasing May's housing starts and data on forex interventions, with the later certainly capable of impacting currencies.

I don't currently see anything scheduled for us for Monday morning.

Keene Little : 7/3/2008 11:50:50 AM

A 38%-62% retracement of this morning's rally provides a pullback target zone of 1259.74-1264.22 (ES 1259.75-1264.75) to watch for a buying opportunity. From a time perspective it may not set up until the final 30 minutes of today's trading and that would create a slight dilema--carrying a long trade over the weekend. Personally I think I'd prefer to be flat over the weekend and hope the market doesn't move much by Sunday night/Monday morning to look for an opportunity to get long (stop needs to be below today's low so use that to evaluate the risk side of the trade).

Linda Piazza : 7/3/2008 11:48:17 AM

The TED spread is 0.98.

Linda Piazza : 7/3/2008 11:47:23 AM

The OEX is at the 15-minute 9-ema, with that average at about 579.55 and the OEX at 579.85 as I type, at the end of this 15-minute period. That support has held, but barely, and the OEX needs to bounce again to maintain upward momentum.

Keene Little : 7/3/2008 11:43:40 AM

With gold pulling back a little, I want to immediately lower my risk on the short play. Lower stop on gold short to just above this morning's bounce high at 941.50 (GLD 92.67). Use 942 (93) for now. This short play should work from here whereas another push higher would suggest something else is happening and would potentially be more bullish. I would want to just step aside and reevaluate in that case.

Jeff Bailey : 7/3/2008 11:43:02 AM

Asian Markets Link

Bombay relinquished some, but not all of Wednesday's advance.

Jeff Bailey : 7/3/2008 11:40:21 AM

European Markets Link

Linda Piazza : 7/3/2008 11:37:00 AM

The OEX completed the last 30-minute period above the 30-minute 9-ema, with that at 579.55 currently. That's another stair-step higher. Begin finalizing your profit-profit protecting plans, though, as the OEX approaches potential resistance on 15-minute closes now from 582.41-583.47. Keltner charts present the possibility that this could be a strong resistance zone, stalling the OEX for several hours. If it breaks through, the next potential upside target is currently 587.99, but if the stall gives way as bulls bail, the OEX has already shown that it can cut through all potential support. What I'm most afraid may happen is that the OEX may rise up to that 582-584 level and then stall into the close. If that happens, closely evaluate whether you want to hold onto your positions through a long weekend's decay.

Jeff Bailey : 7/3/2008 11:33:11 AM

DXY 72.68 +0.91% (30-minute delayed) ... sticks its head above QUARTERLY Pivot!

Keene Little : 7/3/2008 11:32:13 AM

No pullback for SPX yet (or much of a one in gold for that matter) but it's looking a little choppy to the upside over the past hour (looking at the 3-min chart) and that's indicative of an ending pattern. I'm still expecting a pullback to correct this morning's rally, which should then be a good buying opportunity.

Linda Piazza : 7/3/2008 11:17:50 AM

This morning, the Federal Reserve published its weekly update on outstanding corporate paper. The ECB said this morning that non-financials weren't having any trouble with loans this morning, so I wondered what the outstanding corporate paper would show about how easy or tight credit was here. Apparently, our corporations weren't having to go to banks last week for short-term loans for their needs because they were able to place corporate paper to the tune of $27.1 billion. That's the biggest rise in more than a month. That was a seasonally adjusted figure, however. Not seasonally adjusted, outstanding corporate paper has been dropping for four of the five weeks, with last week's $24.0 billion the largest drop. I'm not sure how these figures are seasonally adjusted.

Jeff Bailey : 7/3/2008 11:13:24 AM

No short interest update since 06/13 ... should be getting it next couple of days.

Jeff Bailey : 7/3/2008 11:12:28 AM

USO $116.65 -0.16% ... slips red.

Linda Piazza : 7/3/2008 11:11:53 AM

Price action doesn't always follow through on chart setups, but my charts show the possibility for an OEX climb to test potential resistance on 15-minute closes at 583.53, but then a stalling there. That stalling could take the form of a sideways move or a pullback, both of which could play out over several hours of time before we know the resolution--a failure through the pullback/consolidation support zone or a zoom up through resistance and further gains. Of course, we only have two hours left. So, what I'm saying is that you should consider the possibility, not yet a probability, that the OEX might stall somewhere near 583-584 and that we won't know much more until Monday morning. The caveat to that is that if bears start covering into the close, markets could explode higher if some critical level was reached or if bulls start bailing into the close, markets could crater again. It's very iffy right now. The chart setup, however, suggests that stall.

Jeff Bailey : 7/3/2008 11:10:36 AM

GLD $92.54 -0.67% ... ~$925.40 spot

Jeff Bailey : 7/3/2008 11:06:53 AM

USO $117.00 +0.13% ... lurches back green.

Keene Little : 7/3/2008 11:05:18 AM

Gold is bouncing off this morning's low but it should be just a correction of the decline from this morning's early high. Short gold at 940 if you can get it with a stop at 945.

Linda Piazza : 7/3/2008 11:04:05 AM

Jeff, not second by second, although I'm clicking through charts about that much, but TRIN is now 0.76 and the A/D line is now -559.

Linda Piazza : 7/3/2008 11:02:09 AM

It looks as if the OEX will close this 30-minute period at the 30-minute 9-ema, not at about 579.45, rather than strongly above it. Moreover, it's creating a small-bodied candle at resistance on the 30-minute chart and an actual doji on the 15-minute version. Therefore, it's even more important to bulls that they see the OEX maintain those 15-minute closes above the 15-minute 9-ema, now at 578.53.

Keene Little : 7/3/2008 11:01:52 AM

The rally off this morning's low now looks ready for a pullback to correct it. Following a pullback, if it comes, should be a continuation higher again.

Jeff Bailey : 7/3/2008 10:58:47 AM

Hamsters at QCharts must have gotten an early start on 3.5-day weekend.

Jeff Bailey : 7/3/2008 10:57:56 AM

Thanks Linda! ... Not getting anything from QCharts.

If you could give me second-by-second that would be great! (grin)

Linda Piazza : 7/3/2008 10:46:38 AM

The VIX daily Keltner chart I've been showing this week, with the annotations from several days ago: Link

Linda Piazza : 7/3/2008 10:44:27 AM

The OEX is now above the 30-minute 9-ema but hasn't yet closed a 30-minute period above it. That moving average is now 579.33. The OEX is 579.83 as I type.

Jeff Bailey : 7/3/2008 10:39:41 AM

USO $116.52 -0.27% ...

Jeff Bailey : 7/3/2008 10:39:26 AM

UNG $63.15 +0.19% ...

Keene Little : 7/3/2008 10:39:12 AM

With the bounce off SPX 1253 now (actually 1252 but close enough), the market now needs to continue rallying. So being long against this morning's low should be a good play. It may not result in much more than a choppy sideways bounce into early next week but we should see SPX work its way back up at least to the 1273 area.

The more bullish possibility is that this morning's low marked the end of the larger degree 1st wave down from the May 19th high. That would mean a multi-week rally into the end of the month and possibly as high as 1340-1350.

But any break back down to a new daily low would suggest SPX will head down to at least 1250 if not 1240 before trying again for a larger bounce.

Jeff Bailey : 7/3/2008 10:38:59 AM

EIA: US Nat. Gas Inventory +85 Bcf to 2,118 Bcf

Jeff Bailey : 7/3/2008 10:36:44 AM

Pound CurrencyShares (FXB) $198.34 -0.55% ... has slipped below WKLY Pivot.

Jeff Bailey : 7/3/2008 10:36:01 AM

Yen CurrencyShares (FXY) $93.40 -0.79% ... sits at WKLY Pivot.

Jeff Bailey : 7/3/2008 10:34:53 AM

Euro CurrencyShares (FXE) $157.19 -1.02% ... comes to WKLY Pivot.

Linda Piazza : 7/3/2008 10:34:44 AM

It looks as if we now have the first OEX 15-minute close above the 15-minute 9-ema. Now that should be sustained. The next stair step higher is the 30-minute version, now at 579.30. I reiterate that if the OEX keeps climbing, be particularly careful at the top of the descending trendline off yesterday's highs. An important Keltner level converges with that trendline, emphasizing the importance, so you want to see sustained 15-minute closes above 583.65 if you want continued climbs today. If you're in bullish trades, that's a place to be particularly careful of your profits. Another is the potential resistance on 15-minute closes now at 587.37.

Jeff Bailey : 7/3/2008 10:28:37 AM

10:00 Internals found at this Link

Linda Piazza : 7/3/2008 10:24:48 AM

The next report is natural gas inventories, at 10:35. Then we're through for the day, and will have only until 1:00 for equity trading.

Linda Piazza : 7/3/2008 10:22:02 AM

The OEX's 15-minute 9-ema is now 577.63; the SPX's, 1264.95. The SPX has potential resistance on 15-minute closes at 1262.37, too.

Linda Piazza : 7/3/2008 10:20:44 AM

Jeff, I've got 0.82 for the NYSE version of TRIN and -1041 for the A/D line: DTNIQ feed.

Linda Piazza : 7/3/2008 10:19:53 AM

Bloomberg TV is characterizing the ECB's press conference as indicating that although the ECB raised rates today, as expected, they may not raise again. The prepared comments certainly didn't soften their hawkish stance, in my opinion, but I didn't hear the Q&A session, so I'm assuming that something was said there that changed the outlook. Previously, although few believed it would happen, a rise of 75 more basis points before the end of the year were priced in. If the ECB did soften its stance, that would be supportive of our dollar (or at least, not as weakening an effect).

Jeff Bailey : 7/3/2008 10:18:45 AM

NYSE data feeds for TRIN and a/d not coming through.

Linda Piazza : 7/3/2008 10:12:48 AM

Those who want the markets to steady also want to see a corresponding downturn in the VIX, with 15-minute closes below the 15-minute 9-ema, with that now at 25.25. The VIX is dealing with Keltner resistance on everything from the 15-minute to the 30-minute to the daily Keltner charts, so it's time to either break out or finally succumb to that resistance it's been nudging at for several days. VIX at 25.95 as I type.

Linda Piazza : 7/3/2008 10:10:08 AM

The OEX is again back above the potential support on 15-minute closes, now at 574.58. Bears need to remain watchful for that fabled relief bounce, but bulls need to be aware that we haven't even seen the first and most tentative signs of improvement yet--sustained 15-minute closes above the 15-minute 9-ema, with that now at 577.96.

Keene Little : 7/3/2008 10:08:22 AM

This morning's move down now counts complete so be watching for a revesal back up. We could be at the start of a larger rally from here so nibbling on a long could work nicely.

Keene Little : 7/3/2008 10:06:35 AM

Gold's chart looks essentially the same as the euro (a bearish engulfing candlestick so far for today): Link

Jeff Bailey : 7/3/2008 10:05:55 AM

USO $116.43 -0.35% ... slips red.

Linda Piazza : 7/3/2008 10:04:47 AM

The OEX turns down again, again testing potential support on 15-minute closes at 574.67. We have to factor in possible vulnerability to 572.44 support showing up on 30-minute closes, too.

Linda Piazza : 7/3/2008 10:02:05 AM

The OEX is closing this 15-minute period back above the potential support now at 574.72. It did not set the new potential downside target predicted by the 30-minute chart. However, it punched pretty close while testing this support, didn't it? In a moment, these little chart setups might not matter at all.

Keene Little : 7/3/2008 10:01:53 AM

Today's move down in the euro (and metals) was what I had expected to see this morning. The chart patterns were set up for a reversal and I thought based on that we would hear the ECB decided to hold rates steady. Instead they raised rates as expected but the euro sold off hard. I guess "sell the news" occurs in the currency market as well.

In any case, today's candle is thus far a bearish outside down day (bearish engulfing candle) and if it stays that way we'll have a strong revesal signal for next week. This will likely mean we'll see a reversal back down in the metals as well. Link

Linda Piazza : 7/3/2008 9:58:48 AM

For reference, the SPX's 3/17 intraday low was 1256.98. Today's low has been slightly below that, at 1255.77. Here's where we see if the bulls buying the dip have enough uumph to keep prices higher.

Linda Piazza : 7/3/2008 9:55:38 AM

Remember the services ISM in a few minutes. Make up your mind now if you want to hold positions open over that release, as, in these market conditions, it could move markets either direction.

Keene Little : 7/3/2008 9:52:54 AM

Diving lower is not exactly consolidating. In any case, if SPX makes it down to 1253 or so start watching for bullish divergences on the short term charts to think about the long side. I'm still feeling a little leery about a choppy day.

Linda Piazza : 7/3/2008 9:52:06 AM

Potential support for the OEX on 15-minute closes is now 574.91, with the OEX dipping just below that as I type. If this fails on a 15-minute closing basis, rolling up to the 30-minute chart projects a next potential downside target of 572.48. Factor in vulnerability to that level but don't necessarily count on it being hit as support is tested on the 15-minute chart.

Keene Little : 7/3/2008 9:49:32 AM

So far it's pretty much the gap n crap scenario. Ideally we'll see a bit of consolidation this morning for another hour or so before heading for new lows below yesterday's. Then following the consolidation should be the new lows and SPX 1253 the downside target.

Linda Piazza : 7/3/2008 9:49:28 AM

TRIN 0.86, having broken through the historical resistance and headed straight to potential Keltner resistance, now from 0.91-1.04. Those with bullish hopes for equities want this to hold on 15-minute closes.

Jeff Bailey : 7/3/2008 9:48:46 AM

Swing trade long stopped alert! ... on the 1/4 position in shares of Coeur D' Alene Mines (CDE) $2.70

Linda Piazza : 7/3/2008 9:48:12 AM

A/D line fell through that first support, heading to stronger support now grouped from -770 down to -950. A/D line at -662 as I type.

Jane Fox : 7/3/2008 9:47:28 AM

Russell 2000 futures are now testing their overnight lows. Link

Linda Piazza : 7/3/2008 9:47:10 AM

The A/D line has dropped sharply to that potential Keltner support way down below. That support is now at about -215 and the A/D line is currently -131, having hit a low of -192. So, it's testing support now. Those who have bullish hopes want this support to hold and for the A/D line to bounce. We have numbers coming out at 10:00--services ISM--so prepare for some kind of change then, whether a renewed bounce or renewed selling. We just don't know which it will be yet.

Jeff Bailey : 7/3/2008 9:45:22 AM

NVIDIA (NVDA) $12.76 -29.11% ... downgraded at JPMorgan to "neutral" from "overweight" after graphics chipmaker lowered guidance and warns of a $200 million charge for product flaws.

Linda Piazza : 7/3/2008 9:44:46 AM

The OEX's 15-minute 9-ema has been pushed up to 579.25. The descending bottom trendline from yesterday's little descending price channel is now at about 578.50. I warned that this morning, we could see the OEX charge up but get stalled at the converging 15-minute 9-ema and the bottom of that channel, and that's so far happening. It's not the preferred action for those who are bullish, of course, suggesting continued vulnerability to tests of the potential support now at 574.93.

Linda Piazza : 7/3/2008 9:41:19 AM

TRIN started the day out in the lower or bullish-for-equities half of its Keltner channels. Unfortunately for bulls, though, it started right on potential Keltner support, now at 0.42 on 15-minute closes and began climbing from there. It's currently 0.66, climbing well off its 0.41 low of the day and headed toward historical resistance near 0.68-0.70 and then, if it gets past that, potential Keltner resistance from 0.93-1.04. Equity bulls want to see it turned back at the historical resistance.

Jeff Bailey : 7/3/2008 9:40:10 AM

NVIDIA (NVDA) $12.89 -28.50% ... getting crushed.

Linda Piazza : 7/3/2008 9:36:15 AM

Keltner outlook on the A/D line: The A/D line is currently charging up toward potential historical resistance at about 575 and Keltner resistance, now at about 760 on 15-minute closes. The A/D line is 529 as I type. Those who want markets to climb today want to see the A/D line move higher and then at least hang around near the highs while Keltner support cycles up underneath it. Right now, there's not any Keltner support until about -240. Note: the A/D line has moved down and is currently 452, down from the 557 high.

Linda Piazza : 7/3/2008 9:30:00 AM

The TED spread is back to 0.97.

Linda Piazza : 7/3/2008 9:26:42 AM

If you'd like to read ECB President Jean-Claude Trichet's prepared address this morning, you can find it here: Link He assured the press that "the fundamentals of the euro area economy remain sound and the euro area does not suffer from major imbalances." However, "annual HICP inflation has remained well above the level consistent with price stability since last autumn, reaching 3.7% in May 2008 and --according to Eurostat's flash estimate--4.0% in June." He mentioned a likely "protracted period of high annual rates of inflation . . . likely to be more persistent than anticipated some months ago." Those who had hoped for a more dovish statement didn't get it. He goes on to address a lot of issues related to monetary analysis and annual M3 growth, paragraphs that it will frankly take me some time to decipher. He does say that "the growth of bank loans to non-financial corporations has remained very robust despite the rises in short-term rates," adding that "the flow of loans in recent months has been strong." He said that "at the level of the euro area as a whole, the availability of bank credit has, as yet, not been significantly affected." That was contrary to what I had been hearing and perhaps somewhat soothing for others to hear.

Jane Fox : 7/3/2008 9:23:43 AM

Early exchange closes today are:

Amex closes at 1:00ET

Nasdaq closes at 1:00ET

NYSE Closes at 1:00ET

CME Globex closes at 12:00 noonCT

CBOT Closes at regular time

Jane Fox : 7/3/2008 9:18:56 AM

WASHINGTON (MarketWatch) - The number of people filing for unemployment benefits rose by 16,000 last week to 404,000, only the second time in this cycle that initial claims have been above 400,000, the Labor Department reported Thursday.

The four-week average of new claims rose to 10,250 to 390,500, the highest level since October 2005. Layoffs have breached levels typically associated with recessions.

Meanwhile, the smoothed average of continuing claims rose to a fresh four-year high of 3.11 million, further evidence that jobs are increasingly hard to find.

In the latest week, continuing claims fell by 19,000 to 3.12 million.

The insured unemployment rate fell to 2.3% from 2.4%.

In a separate report, the Labor Department said nonfarm payrolls fell 62,000 in June.

Keene Little : 7/3/2008 9:13:47 AM

Following the morning reports we've got a nice pre-market rally in the equity futures. I'm not sure what was so bullish about the reports but market logic is one of those oxymorons.

The trouble with a big bounce this morning is that it could mean we'll be stuck in a large sideways consolidation into next week. The decline from yesterday's high is a clear 3-wave move and therefore cannot be the end of the decline.

Therefore I do not think it prudent to load up on the long side based on this morning's bounce. If anything I'd suggest playing the range and watch for the market to pull back again after this morning's bounce finishes. If SPX stays below 1275 we might even see a gap n crap and then get a move to new lows to finish a 5-wave decline from yesterday's high. Stay cautious today.

Linda Piazza : 7/3/2008 9:13:51 AM

If we look at where the S&P futures are above their fair value and extrapolate where the OEX might go this morning, we have to add the caveat that cash markets don't always behave in accordance with futures' action. However, with that caveat, we're looking at a potential OEX climb back toward 580 again. However, Keltner charts show potential resistance on 15-minute closes at the 15-minute 9-ema, now at 578.65. That coincides with the bottom of the descending price channel in which the OEX pulled back from yesterday's high, a channel that it broke below in the last hour of trading yesterday. Be careful, then, before you get too enthusiastic this morning, because the possibility exists that we'll see a pop higher and a settle at the first 15-minute close at or below about 578.65. The OEX also has potential resistance on 30-minute closes at about 579.51. Chart setups also suggest the possibility that we could see some chopping around before an ultimate decision as to direction is made. Factor in the possibility that the OEX could still do some more ping-ponging between 575-584.

So, if you're bullish or just hoping for the markets to steady, you really need to see a continued climb, marked first by consistent closes above the 15-minute 9-ema, then sustained 15-minute closes above potential Keltner resistance now at 584.16 and then a new high above yesterday's, confirmed by sustained closes above a Keltner line now at 586.88.

Be vigilant today, because literally anything can happen, including that ping-ponging action between about 575-584, a zoom up to 586-588 and then a stall there or a sustained violation of the 574-575 zone that results in a drop toward 572.50 or maybe even 569, the next potential targets if that support is lost.

A special note for bears: Don't let my little-boy-crying-wolf persistent warnings to protect your profits let you grow too complacent. Relief rallies can be brutal. Don't let one catch you unaware.

Linda Piazza : 7/3/2008 9:03:16 AM

The TED spread is currently 1.00.

Jane Fox : 7/3/2008 8:55:53 AM

Overnight markets are now retesting overnight highs and so far only the S&P has had enough power to break through those highs.

Jane Fox : 7/3/2008 8:47:12 AM

American equity markets are currently into a very nice rally and have all made new overnight highs. Link

Jane Fox : 7/3/2008 8:43:44 AM

LONDON (MarketWatch) -- The European Central Bank on Thursday made good on a threat to hike its key interest rate for the first time in 13 months in a bid to tamp down inflation expectations.

The ECB announced it had boosted its key lending rate by 25 basis points, or a quarter of a percentage point, to 4.25%. Attention turns now to ECB President Jean-Claude Trichet's monthly news conference at 8:30 a.m. Eastern.

The move came after Trichet repeatedly sounded warnings that commodity-led inflation pressures raised the danger of feeding a wage-price spiral.

Markets currently see strong odds the ECB will hike rates twice more within a year, a scenario some economists see as unlikely given darkening growth prospects for the euro zone.

Trichet, however, is likely to maintain a hawkish tone in the news conference, said Juergen Michels, a European economist at Citigroup, underlining market expectations for further tightening of monetary policy.

Jane Fox : 7/3/2008 8:42:29 AM

WASHINGTON (MarketWatch) - The U.S. economy shed 62,000 jobs in June while the unemployment rate unexpectedly remained at a four-year high of 5.5%, the Labor Department reported Thursday. Payrolls have now fallen in all six months this year for a total job loss of 438,000, the strongest evidence that the economy fell into a recession. Job losses in June were worse than the 40,000 expected by economists surveyed by MarketWatch. The unemployment rate was expected to fall to 5.4%. Average hourly earnings rose by 6 cents, or 0.3%, in June. Payroll losses in April and May were revised down to show 52,000 more jobs lost in those months.

Jane Fox : 7/3/2008 8:40:17 AM

Crude hit $145.85 overnight.

Jane Fox : 7/3/2008 8:39:44 AM

Dateline WSJ - U.S. payrolls shrank for the sixth consecutive month in June. Nonfarm payrolls fell by 62,000, the Labor Department said Thursday. The unemployment rate held at 5.5% in June.

Linda Piazza : 7/3/2008 7:28:45 AM

We're waiting this morning for an ECB decision, due in about 20 minutes. The ECB is forecast to raise rates by 25 basis points, and many pundits believe that will further weaken the dollar against that currency. That decision could impact our trades. However, this time what ECB President Jean-Claude Trichet says in the post-decision press conference, scheduled to begin at 8:30 am ET, could be as market moving as anything the ECB does, so you need to be aware that while our markets are reacting pre-open to our nonfarm employment numbers, they'll likely also be reacting to the ECB decision and press conference.

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