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OI Technical Staff : 7/18/2008 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The Market Monitor has been archived.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 : 7/18/2008 9:16:34 PM

RUT.X's NH/NL 16:20 ... Daily ratio 44.4%, 5-day 26.9% and 10-day sees 3-box reversal high to 15.9%.

I don't track RUT.X's a/d each day. Today's 503:840.

Jeff Bailey : 7/18/2008 9:11:02 PM

S&P 500 Heavyweights ... same sort order as Monday's open. Note 5-day, 20-day and YrNet% and Industry. Link juuuust about where they were on 03/17/08 and "BSC Failure"

Jeff Bailey : 7/18/2008 9:05:10 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 7/18/2008 7:05:56 PM

Bull Alert! ... for the very, very narrow Dow Indu Bullish % (BPDJIA)

Here's StockCharts.com's Link

Jeff Bailey : 7/18/2008 7:03:46 PM

"Bull Correction" ... for NASDAQ-100 Bullish % (BPNDX).

Here's StockCharts.com's Link

Jeff Bailey : 7/18/2008 7:01:57 PM

Bull Alert! ... OEX too!

Here's StockCharts.com's Link

Jeff Bailey : 7/18/2008 6:58:42 PM

Bull Alert! ... Though I looked last night, maybe it wasn't updated. Dorsey/Wright's S&P 500 Bullish % (BPSPX) reversed up at Thrusday's close to bull alert status at 30.20% (30.00% chart). Don't have Friday's end of session update at this point.

Here's StockCharts.com's $BPSPX Link ... also "bull alert" and X gets the square.

Jeff Bailey : 7/18/2008 6:50:20 PM

Closing Internals at this Link

Jeff Bailey : 7/18/2008 5:03:35 PM

Might be able to fill up the land yacht with just one credit card swipe next week.

Gulf Coast ULS Diesel $3.74 -1.57% ... -7.19% on the week.

Jeff Bailey : 7/18/2008 5:01:00 PM

Unleaded -11.23% on the week!

Jeff Bailey : 7/18/2008 4:59:18 PM

In addition to Linda's 03:56:12 post, I'd have to throw in Weekend Talks With Iran as somewhat important.

USO $104.15 -1.30% ... -11.27% this week!

Jeff Bailey : 7/18/2008 4:51:57 PM

IWM $68.91 +0.74% ... can't forget them small caps.

Jeff Bailey : 7/18/2008 4:40:11 PM

Should it sink ... then I'll "wink"

Jeff Bailey : 7/18/2008 4:39:33 PM

SOHU traded as high as $76.42! $0.90 above yesterday's high.

Jeff Bailey : 7/18/2008 4:37:38 PM

Other Friday closes ...

NVDA $11.57 +1.84%
RIO $29.13 +0.58%
SBUX $14.34 -0.34%
FFIV $32.47 -1.51%
PBR $58.09 +0.12%
JBLU $4.23 +3.93%
SOHU $75.75 +2.24%

Jeff Bailey : 7/18/2008 4:30:23 PM

When DXY's session finishes, will post Market Watch. Easier for all you pivot traders out there.

Jeff Bailey : 7/18/2008 4:28:26 PM

XLF $20.60 +1.67% ... not in U.S. Market Watch

Jeff Bailey : 7/18/2008 4:27:06 PM

FXE $158.69 +0.05%
FXY $93.29 -0.19%
FXB $200.21 -0.05%

Jeff Bailey : 7/18/2008 4:23:14 PM

Little buggers....

Jeff Bailey : 7/18/2008 4:22:28 PM

YM ringing some bells 11,510

Jeff Bailey : 7/18/2008 4:20:59 PM

As noted several weeks ago, Ameritrade customers will be exercised in the money options, even if by a penny, unless you've made arrangements otherwise.

Jeff Bailey : 7/18/2008 4:19:20 PM

Smidge above $126.00 heavier CALL OI.

Jeff Bailey : 7/18/2008 4:16:11 PM

SPY $126.02 +0.65% ... Closes above heavy $125 OI.

Jeff Bailey : 7/18/2008 4:14:50 PM

AMR Corp. (AMR) $7.13 +3.18% ... AMR-GA finish $2.10 x $2.15. Exited 7/11 at $0.30 -80.65% .

Keene Little : 7/18/2008 4:14:09 PM

At the close SPX managed to close above its downtrend line from June but with the relatively low volume it's hard to know whether the break is meaningful. However, as noted before, the wave count actually looks very good for a continuation of the rally on Monday. If true then it should rally immediately and no futzin' around. Any break below today's low would negate the bullish setup. In fact any break below 1254, the low near 3:00 PM would say the bulls may have lost their chance.

Linda Piazza : 7/18/2008 4:12:42 PM

I hope everyone endured this opex cycle with minimal pain. I lost a little under $3000, with a walloping $800 of that on a MNX double diagonal I was trying for the first time and managed wrong. My account suffered minimal damage from my condors because I was stepping out of them at regular intervals once the deltas on the sold strikes starting moving into the 22-23 range. There is more than one way to handle such instances with credit spreads, and this is the way that feels comfortable to me. I was honestly glad to be put to the test, glad that it worked as well as it did to keep losses small, and glad that I could trust myself to exit when I needed to do so. I haven't had a going-wrong credit spread for a while, so it's a little like getting ready to run a race after you've been off the tracks for a long time.

I experimented with a different hedging technique with one bull put spread, buying one-month-further-out puts with deltas that would neutralize the position delta on my going wrong positions and would give me a positive vega. This was a Dan Sheridan technique I picked up for use on the days that I thought that volatility might expand and prices might drop. Since I'm just feeling out this method, I'm about as far from an expert at it as I can possibly be, so my point is not to present myself as an expert.

My point is that last year's trading goal was to find an exit method that worked for me, and it was put to a good test this month for the first month after ten straight months of gains. I'm pleased, because it kept my losses small and where I wanted them to stay. It absolutely helped me manage my emotions during this time. No one likes to take losses, but it's part of trading and it's actually suuuch a relief to take the loss and move on when things are going badly. My goal this year has been to learn to better manage my delta and vega risks; hence, the trial with the hedging technique.

I represent the trader who is self taught and still learning. I had that double diagonal in my portfolio for a reason and I learned something about how to handle or not handle them in real time, real trading. It's part of my trading goal for this year, because I somehow hadn't ever done a double diagonal until a few months ago, when I paper traded my first.

If you're not happy with how this month turned out, don't castigate yourself or anyone else. I know other traders who handle credit spreads much differently than I do and who are in fact quite successful with their methods. As I told a couple of trading pals, though, if I hadn't taken that loss in regular intervals, I would have had a heart attack one morning this week and would have spent more on the medical bills than I did the loss! Use this month as a learning experience, perhaps one you just had to go through before you gained more motivation to manage your risks. Talk to your broker about ideas, but only if you have one knowledgeable about the kinds of trades you're doing. Listen to webinars on CBOE and CBOT. Read, read, read.

Jeff Bailey : 7/18/2008 4:10:43 PM

SPY $114.84 +0.75% ... to the close.

Jeff Bailey : 7/18/2008 4:10:24 PM

DIA $114.86 +0.77% ... to the close.

Jeff Bailey : 7/18/2008 4:10:07 PM

YM 11,482 ... to the close.

Jeff Bailey : 7/18/2008 4:09:20 PM

Lehman Bros (LEH) $19.11 +1.11% ... LYH-SC finished "poof". Exited 7/11/08 $1.67 +175.79%

Jeff Bailey : 7/18/2008 4:07:28 PM

Bank of America (BAC) $27.49 +3.73% ... earnings Monday before the bell.

BAC-TS finish $0.27 x $0.30.

Jeff Bailey : 7/18/2008 4:02:17 PM

YM long stopped alert! 11,478

Jeff Bailey : 7/18/2008 4:00:30 PM

YM long alert! ... here at 11,481. Stop 478. Target 11,505

Linda Piazza : 7/18/2008 3:56:12 PM

What happens before our markets open again Monday morning? Not much other than a housing number in the U.K. about 7:00 am ET Monday morning and some numbers from Australia. Japan has a holiday. American Express (AXP), Texas Instruments (TXN) and Bank of America (BAC) report Monday, but I don't see a time yet for either, so I'm unsure whether it's before or after the market. HAS, PETS, SGP and MRK report before the open.

Jeff Bailey : 7/18/2008 3:52:59 PM

SPY $126.04 +0.67% ...

Tab Gilles : 7/18/2008 3:50:15 PM

JP Morgan (JPM) $40 -$0.77 (1.96%) is holding in there, contained in a tight trading range since reporting earnings. Its been hovering around $40, bouncing off of its May/July 50% Fibonacci Retracement of $39.

Jan. 2010 Call Leaps: WJPAG $9.55/$9.80, WJPAH $6.95/$7.15, WJPAI $4.75/$4.90

Linda Piazza : 7/18/2008 3:43:29 PM

The OEX is right back testing that potential resistance on 30-minute closes that's now risen to about 580.20.

Jeff Bailey : 7/18/2008 3:41:28 PM

YM 11,470

Jeff Bailey : 7/18/2008 3:41:17 PM

NYSE a/d 1,633:1,492

Jeff Bailey : 7/18/2008 3:35:53 PM

BIX.X 172.28 +0.76% ... above WKLY R1

Jeff Bailey : 7/18/2008 3:35:02 PM

XLF $20.79 +2.51% ... interesting WKLY S1 here.

Tab Gilles : 7/18/2008 3:34:28 PM

Freddie Mac (FRE) +11%, Washington Mutual (WM) +17.4%

Tab Gilles : 7/18/2008 3:32:56 PM

Oils down...however so are the refiners: TSO -6.7%, VLO 01.64%, HOC -5.1%, WNR -3.7%

Jeff Bailey : 7/18/2008 3:32:44 PM

YM session high so far has been 11,499

11,450 here.

Linda Piazza : 7/18/2008 3:31:06 PM

I'm looking at the OEX's daily chart and seeing something that all of us who have been sitting here all day will have noticed. We've certainly seen a small-range day today, with that day's candle currently a doji sitting at or perhaps slightly above daily Keltner resistance. This day's range is almost entirely, although not quite, within yesterday's range, but the top half of that range. It's indicative of indecision more than anything else, and, with daily RSI at 51.90 as I type, that particular indicator is fairly neutral, too. If the OEX were to end the day about where it is now, a prediction that I'm not going to make with the last 30 minutes still ahead of us, I'd have to say that it looks about equally likely to pull back toward its 10-sma, now at just under 571.50, as it is to charge up further into the 583-586 potential resistance zone. Some charts suggest that the OEX may eventually climb high enough to test the descending 30-sma, with that at just over 591 currently. Perhaps if the OEX chops around a few more days in indecision, that 30-sma will have dropped into that 583-586 zone because it's still descending sharply. I think it's possible that the OEX will rise up to retest its March low from the underside, but whether that's before or after another 10-sma test, the charts just aren't telling me. Those charts certainly aren't giving much information on the odds of the OEX scrambling back above that March low and maintaining those values for any length of time.

Keene Little : 7/18/2008 3:29:21 PM

Nearing the 30-min point and I see no change. the setup is actually quite good for a rally on Monday. The sideways consolidation pattern has now achieved the required a-b-c-d-e count with the pullback to the 3:00 PM low and sets us up for an immediate rally. That is unless SPX breaks below today's low near 1252 which would negate the bullish consolidation pattern. So short against today's high, long against today's low and may the best trade win. Or go home flat and enjoy the weekend.

Jeff Bailey : 7/18/2008 3:28:42 PM

FFIV in a world all its own ... session high $33.13. $32.24 -2.21% to the close.

Jeff Bailey : 7/18/2008 3:27:29 PM

Crazy, crazy, crazy ...

Session highs...

NVDA $11.59
RIO $29.68
SBUX $14.58
UWM $48.37
USO $106.57
PBR $58.98
JBLU $4.28
BAC $27.99

Jeff Bailey : 7/18/2008 3:21:13 PM

Energy futures look like a stop light. Red, green, red, green. Oil, unleaded, heating oil, nat gas.

Jeff Bailey : 7/18/2008 3:17:24 PM

NASDAQ a/d 1,251:1,618 ... trinq 1.20

Jeff Bailey : 7/18/2008 3:17:02 PM

NYSE a/d 1,558:1,561 ... trin 0.93

Jeff Bailey : 7/18/2008 3:09:35 PM

SPY $125.52 +0.26% ...

Linda Piazza : 7/18/2008 3:08:10 PM

Nothing has changed. The OEX looks slightly more likely to retest the 575.75-576 zone than it did earlier, but only slightly. Give this a few minutes and the OEX can zig or zag and change that impression.

Jeff Bailey : 7/18/2008 3:07:35 PM

TRIN 1.03

TRINQ 1.26

Jeff Bailey : 7/18/2008 3:07:18 PM

NASDAQ a/d 1,236:1,629

Jeff Bailey : 7/18/2008 3:07:05 PM

NYSE a/d 1,513:1,614

Jeff Bailey : 7/18/2008 3:05:59 PM

Time Calibration : 03:03:45 PM EDT

Jeff Bailey : 7/18/2008 3:04:12 PM

One (1) hour, maybe 1 hour and 15-minutes until July Option Expiration.

Jeff Bailey : 7/18/2008 2:58:34 PM

Good gravy! ... last time USO closed a Friday below its WKLY S2 as it threatens to do today, was 11/30/07.

Linda Piazza : 7/18/2008 2:55:41 PM

First Keltner potential support for the OEX is at about 576.40 on 15-minute closes with the last little swing low on the 15-minute chart having been at 576.28 on the 1:00 pm candle.

Jeff Bailey : 7/18/2008 2:53:30 PM

Art Cashin was wondering if this is just a bear market rally, or something more. Can create a pivot test to find out.

Jeff Bailey : 7/18/2008 2:52:20 PM

Good test for pivot traders is BIX.X and today's close ... above or below WKLY R1. See 05/02/08 action, then week after.

Tab Gilles : 7/18/2008 2:51:35 PM

Apple (AAPL) $166.11 -$5.69 (3.11%)

Reports earnings Monday after the close.

Daily chart appears to be putting in a flagpole formation? Link

PnF chart: $156 P/O Link

Jeff Bailey : 7/18/2008 2:49:43 PM

BIX.X 170.92 -0.03% ... threatens a "doji" if it closes here.

Jeff Bailey : 7/18/2008 2:48:55 PM

Oh, but if it does ...

Jeff Bailey : 7/18/2008 2:48:32 PM

04/22/08 benchmark would be $95.08.

There's "no way" it can backfill that gap. Is there?

Jeff Bailey : 7/18/2008 2:47:21 PM

USO $104.24 -1.22% ... 5/20/08 benchmark (June crude expiration) was $104.30. (per this morning's comments/observations)

Jeff Bailey : 7/18/2008 2:45:27 PM

Should be nearing last of August crude oil roll ... 07/17/08 OI for contracts Link comparison Link

06/26/08 comparison Link

Jeff Bailey : 7/18/2008 2:36:18 PM

Speaking of gaps ...

Jeff Bailey : 7/18/2008 2:36:07 PM

Good gravy! OSTK $17.08 -38.33% ... CNBC just mentioned.

Tab Gilles : 7/18/2008 2:31:56 PM

United States Oil (USO) $104.23 -$1.29 (1.21%); $WTIC $128.84 -$0.45 Link

Jeff Bailey : 7/18/2008 2:30:43 PM

02:00 Internals found at this Link

Jeff Bailey : 7/18/2008 2:27:42 PM

Remembering Amaranth ... shall we never forget.

Jeff Bailey : 7/18/2008 2:26:58 PM

Again ... always "worried" and trying to protect.

Keene Little : 7/18/2008 2:26:26 PM

SPX is back up for another test of its downtrend line from June, now at 1259. This 30-min chart shows a bullish wave count that calls for another leg up to 1285 where the 5th wave would equal the 1st wave in the rally from Tuesday's low. Then a pullback to retest the broken downtrend line and a continuation higher. The bulls just need to break that downtrend line to make it happen. Link

Jeff Bailey : 7/18/2008 2:26:25 PM

NAKED IYS-TO $1.85 x $2.00.

Jeff Bailey : 7/18/2008 2:25:23 PM

VIX.X 24.20 -3.23%

VXN.X 30.36 +1.64%

Jeff Bailey : 7/18/2008 2:24:48 PM

JGQ-HZ $1.75 x $1.85

Jeff Bailey : 7/18/2008 2:23:09 PM

JBLU $4.27 +4.66% ... fly blue fly

Jeff Bailey : 7/18/2008 2:22:08 PM

PBR $58.55 +0.93% ... still above yesterday's low.

Jeff Bailey : 7/18/2008 2:20:01 PM

Anyone think DIA can backfill that 6/25 "doji" to 06/26 downside gap?

Jeff Bailey : 7/18/2008 2:18:56 PM

NASDAQ 1,264:1,578

Jeff Bailey : 7/18/2008 2:18:45 PM

NYSE a/d 1,567:1,530

Jeff Bailey : 7/18/2008 2:18:06 PM

Speaking of gaps again ...

Jeff Bailey : 7/18/2008 2:17:33 PM

USO $103.93 -1.51% alert!

Linda Piazza : 7/18/2008 2:17:07 PM

I'm sitting here at the monitor, but this is one of those days again when it's not helpful for us to say too much. One moment, the interpretation of the intraday charts leans a little this way, and the next, the other. The formation in which the OEX is pulling back leans a little toward the bullish side. However, the fact that a Keltner line that was holding as support from about mid-morning yesterday until mid-morning today is now serving as resistance leans a little the other direction. If the OEX could sustain new highs and not just pop above the previous high, perhaps hitting 581.60 or so, and then drop right back down, then the 15-minute chart suggests that it could test 583.16-583.80. But can it sustain new highs? That's the question.

Jeff Bailey : 7/18/2008 2:16:17 PM

Ooooeeee ... check out your 5-year, 10-year and 30-year yields with pivot levels turned on.

Jeff Bailey : 7/18/2008 2:13:22 PM

Wait until you see the "rebalanced" from end of June.

Jeff Bailey : 7/18/2008 2:12:39 PM

"Beetle's Balanced" ... GSG $68.40 -0.27% ... Live!

Jeff Bailey : 7/18/2008 2:11:30 PM

CRB index making new lows 30-minutes ago.

Keene Little : 7/18/2008 2:10:22 PM

Back for another look and I had to knock the screen to see if it was stuck. No surprise for an opex Friday. Booooring.

Jeff Bailey : 7/18/2008 2:05:13 PM

A/D lines really suggest some "squaring up"

Jeff Bailey : 7/18/2008 2:03:51 PM

Some of yesterday's PnF internals Link

Linda Piazza : 7/18/2008 2:04:31 PM

About 90 minutes ago, the OEX slipped beneath what had been Keltner support on 30-minute closes, now at about 579.35. It's testing that level now to see if it's now resistance. It did this with the analogous Keltner setup on the 15-minute chart earlier today. When that resistance held it started chopping sideways and, in the process, lost that 30-minute support, too. If I were to look at only the 15-minute chart, the setup suggests it's about as likely that the OEX will drop toward 575.80 as it is that it will climb toward 583-584 and vice versa. Until there are sustained 30-minute closes above that 579.35 zone, however, the 30-minute chart suggests that sideways or lower is easier than much higher. Taking them together gives a neutral outlook with perhaps a slight downside bias.

Jeff Bailey : 7/18/2008 1:59:30 PM

(($33.98 - $32.45) / $32.45) = 4.7% ...

Linda Piazza : 7/18/2008 1:56:49 PM

The TED spread is currently 1.38.

Jeff Bailey : 7/18/2008 1:56:22 PM

See the 06/19/08 relative high? And "just above" the 06/06/08 high, then the dart lower? However now, it is above 06/19/08 relative high, and has also broken above our "oldest" downward trend (shown previously) with our "cheater's trend" well above at about $37.32. How high has FFIV been above 06/06/08 relative high of $32.45? More than 3.08%?

Jeff Bailey : 7/18/2008 1:53:44 PM

Check it out .... 06/06/08 high and work from there.

Jeff Bailey : 7/18/2008 1:53:03 PM

Now better get on the stick with FFIV $32.48 -1.48% ...

Jeff Bailey : 7/18/2008 1:51:53 PM

$75.83 x 1.0308 = $78.165.

Jane Fox : 7/18/2008 1:51:46 PM

Here is McMillan's weekly commentary. The long-awaited oversold rally is underway. Is it just that -- a brief oversold rally -- or is it something more lasting? We don't know for sure at this point, but there is more work to do if it is more than just an oversold rally.

The $SPX chart is still bearish. The rally has pushed the index up towards resistance at 1270-1280 and towards its declining 20-day moving average (currently about 1275). That moving average is still declining, though, and so is the trend of $SPX prices. Thus, even if the rally were to get to 1270-1280, the $SPX chart would still be negative.

The equity-only put-call ratios have remained bearish, but as you can see from Figures 2 and 3, they have both curled over a bit. At this point, our computer analyses are still saying that these ratios are on sell signals, but it wouldn't take much to turn them downward into buy signals. As a result, the next few days are crucial in that regard.

Market breadth reached near-record oversold levels in the last week, as day after day of selling swamped the market. Now, in just two days of upside action, that oversold condition has nearly been relieved. Another day of advancing issues outnumbering declines will likely generate buy signals from breadth. However, that isn't quite confirmed yet.

At this time, the only confirmed buy signal is from the volatility indices ($VIX and $VXO). Both edged above 30 earlier in the week, and then reversed downward with a vengeance. That creates a short- term buy signal. If the upward trend of these indices is violated then that would be an intermediate-term buy signal. Specifically, if $VIX closes below 23, the trend of $VIX would be broken and that would be bullish.

In summary, we are suspicious of this rally, despite the buy signals from $VIX. It will be more important to see how the market handles the next decline, which should ensue soon. If that decline is modest and other indicators turn bullish, then we will consider adopting a more positive attitude toward this market. Even if this is another intermediate-term rally -- much as we saw in February and April -- we don't think this bear market is over.

Jeff Bailey : 7/18/2008 1:50:21 PM

Sohu.com (SOHU) $74.81 +0.97% ... updated daily interval bar chart (show previously) with addition observations Link as well as some of today's commentary in MM.

Jeff Bailey : 7/18/2008 1:37:05 PM

My best guess is there will be a lot of retail shorts in SOHU this morning. Stop just above yesterday's high.

Jeff Bailey : 7/18/2008 1:36:21 PM

Those that may be shorting SOHU outright, You can begin calculating next week's pivot levels. Also, study the period from 03/12 to 3/28 as our U.S. internals suggest we should.

Then note SOHU's 04/01/08 bar.

Jeff Bailey : 7/18/2008 1:28:36 PM

Speaking of GOOG possibly backfilling it gap, if SHORT/PUT the GOOG, check out SOHU action recently. Link

Linda Piazza : 7/18/2008 1:24:53 PM

For the last 90 minutes, the OEX has been finding resistance on 15-minute closes at its 15-minute 9-ema, now at about 577.90. That maintains the potential for it to test the 45-ema on that chart, now at 577.54, but, in this climate, I wouldn't say it promises that test.

Jeff Bailey : 7/18/2008 1:22:19 PM

Just as I will really try and discover my mistakes, make adjustments, I also like to repeat actions of trades that have treated me/us well.

As long as the scenario and techncials suggest worthy of doing so.

Jeff Bailey : 7/18/2008 1:20:31 PM

I profiled a USK-TN on 7/02/08 for $6.20 as SOHU was trading $72.97. Close for profit on 7/08/08 at $7.80 as SOHU traded $68.39.

Jeff Bailey : 7/18/2008 1:18:53 PM

BIDU $294.04 -2.92% Link

Jeff Bailey : 7/18/2008 1:18:12 PM

VXN.X 30.68 +2.71% ...

Jeff Bailey : 7/18/2008 1:17:59 PM

VIX.X 24.59 -1.67% ...

Jeff Bailey : 7/18/2008 1:17:25 PM

Was looking at Asian markets last last night ... didn't make sense.

Jeff Bailey : 7/18/2008 1:16:25 PM

Swing trade put alert! ... for one (1) of the Sohu.com SOHU Aug $70 Puts (USK-TN) at the offer of $4.50.

Jane Fox : 7/18/2008 1:15:30 PM

I see the S&P Futures are pressing their daily lows but the VIX is not pressing its daily highs. Normally I would say this means ES's lows will hold or there will not be follow through if they break but on OPEX Friday all bets are off.

Jeff Bailey : 7/18/2008 1:15:00 PM

C'mon ... c'mon ... load you bugger.

Jeff Bailey : 7/18/2008 1:14:12 PM

Sohu.com (SOHU) $73.97 -0.16% ... Link

Jeff Bailey : 7/18/2008 1:11:39 PM

Follow the leader?

Jeff Bailey : 7/18/2008 1:11:03 PM

Mmmm ... better check.

Jeff Bailey : 7/18/2008 1:10:28 PM

I tend to worry when Keene and I agree on things too. (wink)

Jeff Bailey : 7/18/2008 1:09:20 PM

Both suggest $20 points of bullish RISK

Jeff Bailey : 7/18/2008 1:08:41 PM

GOOG $479.99 -9.99% ... 4-point box Link

Or 5-point for affect Link

Keene Little : 7/18/2008 1:07:46 PM

I'd say there's a good chance we'll see GOOG close its April 18th gap down at 449.54 sooner rather than later. Currently trading 480, down 53.

Jeff Bailey : 7/18/2008 1:06:39 PM

Freddia Mac mulling $10 billion share offer ... Reuters Story Link

FRE $9.18 +10.80% Link ... session high so far today has been, been, been $9.93.

Keene Little : 7/18/2008 1:06:19 PM

GOOG making new lows--now down -10%. Ouch.

Jeff Bailey : 7/18/2008 1:01:49 PM

NYSE a/d 1,340:1,745

NASDAQ a/d 1,095:1,724

Tab Gilles : 7/18/2008 12:58:32 PM

ProShares Ultra Financial (UYG)$20.34 +$0.78 (4%) Using the VIX's spikes so far this year has been an opportune time to go long financials. Link

Keene Little : 7/18/2008 12:57:11 PM

Jeff makes a good point (12:39) and it's the reason I like to look for confirmation at new highs (or lows)--the oscillators to me are more useful as divergence indicators than buy or sell signals in overbought or oversold. MACD and RSI are two of the best.

When trading futures I like to use at least 3 ticks to a new high or low because anything closer tends to get nabbed on a retest. Anything more than that puts you at risk of having the market move big against you. There will of course always be head-fake moves. Whatever your favorite trading vehicles are, whether stocks, indexes, commodities, etc., paper trade them for a while and get to know their behavior.

I like trading the pivot levels on gold for intraday trading because I've noticed how effective they are (but you'll still see price overshoot them just like at new highs and lows, moving averages or trend lines). Trend lines and channels work very well for me. The trick is to find what works for you, on which symbols and then hone it to the point where you are more confident about reading the charts with those indicators.

Jeff Bailey : 7/18/2008 12:56:23 PM

Exiting too soon for a profit doesn't count. (grin)

Jeff Bailey : 7/18/2008 12:54:38 PM

I should say ... if you subscribers out there ever see me making the same mistake over and over again, I urge you to use it against me in order to profit, or make an adjustment.

Jeff Bailey : 7/18/2008 12:52:09 PM

Most Actives ... SPY $125.59 +0.31%, QQQQ $44.82 -1.79%, MSFT $25.45 -7.52%, C $19.76 +10.01%, FNM $13.53 +23.78%, UYG $20.40 +4.29%, WFC $27.66 +0.57%, INTC $21.94 -0.22%, MER $29.92 -2.63%, TEVA $43.15 +5.11%

Jeff Bailey : 7/18/2008 12:46:51 PM

SPY $125.55 +0.28% ... volume drying up.

Jeff Bailey : 7/18/2008 12:46:22 PM

VIX.X 24.57 -1.75% now ...

Jeff Bailey : 7/18/2008 12:45:57 PM

That might be a "bad tick" ...

Jeff Bailey : 7/18/2008 12:45:22 PM

VIX.X 23.78 -4.91% ... undercuts yesterday's low. MONTHLY 38.2% here.

Jeff Bailey : 7/18/2008 12:39:34 PM

Not attacking Keene ... just protecting. Before I discovered pivot levels, I did the same, using a prior day's high/low for stops.

Once I discovered pivot levels, I went back and reviewed old trades (good and bad), looked at entry points, and stopping points.

Observed how that security traded with the pivot levels turned on.

I also know the "tricks" of the market makers.

You are right though ... I'm ALWAYS concerned about our subscribers being on the WRONG side of the trade.

Jeff Bailey : 7/18/2008 12:34:18 PM

QQQQ 5-minute interval, cursor box set at 11:15 (see heatmap post) Link

Linda Piazza : 7/18/2008 12:30:56 PM

Not much to peg a prediction for next direction on today, is there? The OEX's 15-minute chart still shows some vulnerability to potential Keltner targets--and support on 15-minute closes--now at 575.15-576.75, but the 30-minute chart shows it clinging to potential support on 30-minute closes at about 578.20. Comparing the two provides a mixed picture, so we can say only that there's vulnerability to those lower levels but not even assess the likelihood that will happen. It's not unusual to have this type of confusion in chart setups after a few days of sharp moves or, for that matter, on an opex Friday. It used to be that opex Fridays were particularly fun for adept scalpers, but they're a mixed bag these last few years. Sometimes I'm tempted into a little 1- or 2-contract scalp as opposed to the much bigger size I used to do on opex Thursdays or Fridays, but not often because technical analysis just isn't as reliable on those days. Trade only with lottery money.

Jeff Bailey : 7/18/2008 12:26:57 PM

Now take two (2) trends from Tuesday's low to Wednesday's relative low. Another from Tuesday's low to this morning's $44.67 low.

Jeff Bailey : 7/18/2008 12:25:28 PM

See that volume spike in QQQQ.

Jeff Bailey : 7/18/2008 12:22:55 PM

NASDAQ a/d 1,202:1,569

Jeff Bailey : 7/18/2008 12:22:34 PM

QQQQ $44.75 -1.95% ... slips back below WKLY Pivot. Daily S1 $45.10, though violated by .05 kept morning gap lower from backfilling.

Keene Little : 7/18/2008 12:18:08 PM

I can always tell when Jeff starts worrying about being on the wrong side of the market when he starts attacking my posts again.

Jeff Bailey : 7/18/2008 12:15:51 PM

12:00 Internals found at this Link

Jeff Bailey : 7/18/2008 12:11:39 PM

One thing I might suggest (over the years I have), when you get frustrated with the "stop day's high, yesterday's high," or "stop day's low, yesterday's low" is to actually look at a chart with your pivot levels turned on.

How has the stock traded relative to the levels.

Check out FFIV as an excellent day trader's example and see.

Do it with any security.

Jeff Bailey : 7/18/2008 12:08:17 PM

FFIV $32.74 -0.69% ... session low WKLY pivot and session high so far DAILY Pivot.

Keene Little : 7/18/2008 12:06:41 PM

Yesterday afternoon's high in SPX was accompanied by bearish divergence vs. its morning high and now the retest of the high just past 11:00 AM shows further bearish divergence (looking at MACD on the 10-min chart). This doesn't preclude another push back up and even to another minor new high but I would not trust it for playing the long side. We'll probably have a hangover early next week (if not start back down to new lows) so taking home a couple of put options will probably work well.

Jeff Bailey : 7/18/2008 12:00:39 PM

See it so often, but still goes to show just how computerized things are.

Jeff Bailey : 7/18/2008 11:58:56 AM

Wow ... check out the major trackers DIA, SPY, QQQQ and IWM with your daily pivot levels turned on.

Jeff Bailey : 7/18/2008 11:57:37 AM

XLF $20.80 +2.66% ... session high was $21.08

Linda Piazza : 7/18/2008 11:56:28 AM

The TED spread is now 1.37.

Jeff Bailey : 7/18/2008 11:55:10 AM

NASDAQ a/d 1,315:1,398

Jeff Bailey : 7/18/2008 11:54:55 AM

NYSE a/d 1,531:1,501

Jeff Bailey : 7/18/2008 11:53:29 AM

TSO $16.99 -4.81% ... you can't make this stuff up.

Linda Piazza : 7/18/2008 11:53:11 AM

The OEX never could make it above the top of that resistance band and also hasn't been able to sustain values above yesterday's high. It did achieve a new high above yesterday's but "sustain" is the operative word here, as I warned earlier. The picture is mixed, both on this chart and the 30-minute one, with the OEX looking weaker on a Keltner basis as it was testing that new high than it did yesterday when testing yesterday's high. A drop toward 578 looks likely, where it might find support on 30-minute closes. A drop toward 574.90-576.40 is also possible although not yet a given.

Jeff Bailey : 7/18/2008 11:53:02 AM

NVDA $11.37 +0.08% ... nees some squaring of some sort.

Jeff Bailey : 7/18/2008 11:52:35 AM

RIO $29.06 +0.34% ...

Jeff Bailey : 7/18/2008 11:52:21 AM

SBUX $14.50 +0.76% ...

Jeff Bailey : 7/18/2008 11:52:03 AM

BAC $27.50 +3.73% ...

Jeff Bailey : 7/18/2008 11:51:39 AM

PBR $58.03 +0.01% ...

Jeff Bailey : 7/18/2008 11:50:20 AM

Oil Service HOLDRs (OIH) ... $200.09 +1.39% ...

Jeff Bailey : 7/18/2008 11:46:51 AM

SPY $125.86 +0.52% ... session high $126.29. QCharts daily R1 is, is, is $126.29.

Jeff Bailey : 7/18/2008 11:45:23 AM

NASDAQ a/d 1,314:1,397

Jeff Bailey : 7/18/2008 11:45:12 AM

NYSE a/d 1,595:1,423

Jeff Bailey : 7/18/2008 11:44:59 AM

USO $105.59 +0.05% ... edges back green.

Jeff Bailey : 7/18/2008 11:44:09 AM

Next week tends to be historically bearish for Monday-Wednesday. With some potential "Max Pain" into today's close, bears need to be careful.

Jeff Bailey : 7/18/2008 11:40:42 AM

Good eye Jane!

Jeff Bailey : 7/18/2008 11:39:32 AM

NASDAQ-100 Heatmap at 11:15 AM EDT. QQQQ was $45.08. Link

Jeff Bailey : 7/18/2008 11:36:35 AM

Silver get'n whacked.

Jeff Bailey : 7/18/2008 11:36:09 AM

VXO.X 25.64 -1.08% ...

Jeff Bailey : 7/18/2008 11:35:51 AM

VXN.X 29.83 -0.03% ....

Jeff Bailey : 7/18/2008 11:35:06 AM

VIX.X 24.14 -3.47% ...

Keene Little : 7/18/2008 11:31:17 AM

The other caution for bulls is the fractured nature of this morning's rally. The blue chips are rallying but the techs are very weak and even the RUT, which has been stronger, is not participating.

Jeff Bailey : 7/18/2008 11:30:50 AM

Most Actives ... MSFT $25.48 -7.41%, C $19.90 +10.85%, SPY $126.04 +0.67%, INTC $22.02 +0.13%, BRL $63.25 +10.66%, CSCO $21.69 +0.78%, MER $30.80 +0.22%, XLF $21.01 +3.70%, GE $27.94 -0.21%, TEVA $43.40 +5.72%

Jeff Bailey : 7/18/2008 11:27:55 AM

NASDAQ a/d 1,316:1,358

Jane Fox : 7/18/2008 11:27:43 AM

The internals are now talking and have turned bullish. Link

Jeff Bailey : 7/18/2008 11:27:40 AM

NYSE a/d 1,627:1,367

Linda Piazza : 7/18/2008 11:27:55 AM

The OEX is testing that Keltner resistance on 15-minute closes, extending above the bottom line that delineates that resistance but not far above it and not above the top of that resistance configuration. Use yesterday's 580.99 high as a guideline, knowing that bulls need to see the OEX maintain 15-minute closes above that, not just pop above it and pop right back down. If the OEX should breach that resistance, be aware of the resistance band that begins at about 583 and extends up to 586 or 587, keeping your stops updated at all times.

Jeff Bailey : 7/18/2008 11:26:55 AM

PBR $57.66 -0.62% ... still above yesterday's low.

Jeff Bailey : 7/18/2008 11:25:46 AM

OK ... 3 down, 2 to go?

Jeff Bailey : 7/18/2008 11:25:21 AM

OEX 581.15 ... takes out today's and yesterday's high.

Keene Little : 7/18/2008 11:25:02 AM

They're trying for those highs. The risk is a minor high as a head fake and then right back down again. Watch for bearish divergences (or not) to help confirm whether the new highs have some buying pressure behind them. The risk on an opex Friday is lack of follow through. Regardless, honor your stops if short (or long for that matter).

Jeff Bailey : 7/18/2008 11:22:59 AM

Swing trade bearish long exit alert! the QID $44.77 right here, right now.

Jeff Bailey : 7/18/2008 11:22:29 AM

2 down ... 2 to go?

Jeff Bailey : 7/18/2008 11:22:20 AM

SPY Alert! ... $126.18 +0.78% ...

Jeff Bailey : 7/18/2008 11:22:00 AM

Get ready Jane!

Jeff Bailey : 7/18/2008 11:21:50 AM

USO $104.48 -0.99% Alert!

Jeff Bailey : 7/18/2008 11:21:23 AM

Different composition than the broader S&P 500.

Jeff Bailey : 7/18/2008 11:20:40 AM

OEX ... note the difference. 1/23/08 low 594.78.

Jeff Bailey : 7/18/2008 11:19:24 AM

NASDAQ a/d 1,308:1,364

Jeff Bailey : 7/18/2008 11:19:12 AM

NYSE a/d 1,611:1,365

Jeff Bailey : 7/18/2008 11:18:33 AM

SPY trying to reclaim its 1/22/08 low.

Jeff Bailey : 7/18/2008 11:17:55 AM

SPY $126.14 +0.75% .... DAILY R1 at $126.30.

Jeff Bailey : 7/18/2008 11:16:16 AM

Know where you OI is at, make certain you know what your shorting, or buying today.

Jeff Bailey : 7/18/2008 11:15:25 AM

1 down, 3 to go?

Jeff Bailey : 7/18/2008 11:14:31 AM

DIA alert! ... new session high.

Jeff Bailey : 7/18/2008 11:14:11 AM

That reminds me ...

Jeff Bailey : 7/18/2008 11:14:03 AM

Citigroup's earnings press release Link

Jeff Bailey : 7/18/2008 11:12:32 AM

Citigroup (C) $19.81 +10.18% ... on earnings.

Jeff Bailey : 7/18/2008 11:12:09 AM

DIA breadth ... 13:17 at this point.

"Big 10" are 4:6 with IBM doing all the work.

Jeff Bailey : 7/18/2008 11:11:06 AM

DIA $114.49 +0.44% ...

Jeff Bailey : 7/18/2008 11:10:48 AM

Oh my ... IBM $129.44 +2.30% ... nearing a 52-weeker.

Jeff Bailey : 7/18/2008 11:09:22 AM

USO $105.50 -0.02% ... easing

Jeff Bailey : 7/18/2008 11:08:35 AM

JBLU $4.12 +1.22% ... new session high.

Linda Piazza : 7/18/2008 11:07:14 AM

The VXO climbed into a resistance test, of potential resistance on 30-minute closes that's now at 25.93 but was a bit higher earlier when first tested. It's been holding on 30-minute closes although the VXO has pierced it a couple of 30-minute periods. OEX bulls would like to see the VXO turn lower, confirming that this resistance had held by moving to a new low below yesterday's 25.12 swing low. VXO at 25.85 as I type, still challenging that resistance with the possibility that it could still pop through it.

Jeff Bailey : 7/18/2008 11:05:28 AM

Only two (2) 4-lettered stock symbols in the INDU/DIA.

Jeff Bailey : 7/18/2008 11:04:25 AM

DIA $114.42 +0.38% ...

Jeff Bailey : 7/18/2008 11:04:04 AM

NYSE a/d 1,463:1,477

Jeff Bailey : 7/18/2008 10:57:15 AM

XLF $20.90 +3.15% ...

Updated July "Max Pain" Theory tabulations Link

Linda Piazza : 7/18/2008 10:57:43 AM

The OEX now tests potential resistance on 15-minute closes beginning at about 579.82 and extending up to 580.86. This could be important because all yesterday, the OEX bounced from the lower end of these Keltner configurations. It could today be resistance since support, once breached, sometimes serves as resistance. Therefore, OEX bulls would certainly like to see the OEX maintain levels back above it today, erasing that relative Keltner weakness compared to yesterday when the OEX was testing these same price levels.

Tab Gilles : 7/18/2008 10:53:15 AM

United States Oil (USO) $105.80; which seeks to imitate the price of West Texas Intermediate (WTI) light sweet crude oil had been in an uptrend channel since the early part of the year. It is currently testing its 50-ma and broken below the channel, next test $98. Note, that the 61.8% retracement coincides with it's 200-ma. Link

Linda Piazza : 7/18/2008 10:49:25 AM

The OEX is only barely maintaining 15-minute closes at the Keltner line now at about 577.75, but it maintaining those closes, so whether it's still so vulnerable to a drop to support now from 573.93-575.27 is questionable. TRIN has continued dropping and is now a bullish-for-equities 0.89, but it's testing potential support on 30-minute closes.

Jeff Bailey : 7/18/2008 10:48:29 AM

When you "roll" to September chart, continue to carry over those past contract settlements. Should do it on the USO too.

Jeff Bailey : 7/18/2008 10:45:00 AM

Speaking of Nymex Crude ... anyone notice how yesterday's low was marked? Yep... just as we thought.

Jane Fox : 7/18/2008 10:43:58 AM

Here is a 1 minute chart of the VIX and S&P futures. The VIX is hovering at daily lows but ES is not hovering at daily highs so the two are out of sync and I attribute it all to OPEX Friday. Link

Keene Little : 7/18/2008 10:43:24 AM

While resistance at the downtrend lines is still holding, and price could drop quickly out of this consolidation, there is a bullish possibility with the consolidation just under resistance. If we see a push to new highs it will not only break the downtrend lines but it will also create an impulsive (5-wave) advance off Tuesday's low. An upside target for SPX in that kind of move would up to about 1285, so 30 points higher.

If we do get a push to a new high you don't want to be short as trading the long side would then be the better bet. After completing a 5th wave up we'd see a pullback to correct this week's rally (probably back down to the broken downtrend lines for a retest) which would be another good setup for the long side. But we'll let the market tell us whether or not it has bullish intentions with a new high. In the meantime short against resistance remains the recommendation.

Jane Fox : 7/18/2008 10:41:16 AM

It will be interesting to see if Crude will rally back to $135.00 and then trade lower. So should you short crude at $135.00? Only if you don't want to sleep at night. Link

Jeff Bailey : 7/18/2008 10:37:05 AM

Oh Jane ... even after yesterday?

Jeff Bailey : 7/18/2008 10:35:56 AM

IWM $69.11 +1.03% ... today's high has been $69.84.

Jeff Bailey : 7/18/2008 10:35:16 AM

QQQQ $44.83 -1.77% ... yesterday's high was $45.82.

Jeff Bailey : 7/18/2008 10:34:39 AM

SPY $125.60 +0.31% ... yesterday's high was $126.26

Jeff Bailey : 7/18/2008 10:33:48 AM

DIA $114.21 +0.20% ... today's high has been $114.62.

Jane Fox : 7/18/2008 10:29:54 AM

It is not even worthwhile posting the internal charts, they are of no use today.

Jeff Bailey : 7/18/2008 10:26:19 AM

10:00 Internals at this Link

Jane Fox : 7/18/2008 10:25:32 AM

OPEX Friday and the VIX is useless today. Sung to the tune of, "Summer time and the living is easy." Link

Linda Piazza : 7/18/2008 10:20:20 AM

The OEX managed a 15-minute close above 577.40, but not much above it. Now it needs to maintain that level to avoid looking vulnerable to that pullback toward support now at 573.50-574.75. The TRIN has still not followed the previous two days' pattern exactly but it is falling more steeply now and is at 1.16 as I type. The trend of the TRIN, as Jane used to say, needs to remain down to satisfy equity bulls, although it was trending sideways up from the early lows both yesterday and Wednesday while equities were still climbing.

Watch now for potential resistance for the OEX on 15-minute closes near 579.03-580.61.

Linda Piazza : 7/18/2008 10:08:20 AM

Currently, unless the OEX can maintain 15-minute closes above about 577.40, it looks vulnerable to 573.25-574.40.

Jeff Bailey : 7/18/2008 10:06:55 AM

Swing trade bearish long raise stop alert! ... for the 1/2 position in the ProShares UltraShort QQQQ (QID) $45.44 +1.70% ... to $43.81.

Linda Piazza : 7/18/2008 10:04:15 AM

The OEX did maintain its support on 30-minute closes, now at about 576.70, but the TRIN did not repeat its exact Wednesday and Thursday pattern. It pulled back, but it did not pull back as steeply within the first 30-minute period and it's currently rising to test resistance all over again. About all we can conclude, then, is that TRIN is still testing resistance that may yet hold, but that there are some differences in the patterns of the last two days, and so equity bulls must factor in possible further weakness.

Linda Piazza : 7/18/2008 9:55:44 AM

TRIN is still in its early stages this morning when it tends to be volatile and not too trustworthy, but here's what I see. This morning, it pierced potentially significant resistance on 30-minute closes at now at about 1.52 and it's bouncing back and forth a little above and a little below that level now. It's at 1.43 as I type. The last couple of mornings, it's bounced into this very region and then has pulled back strongly by the end of the first 30-minute period. So far, it's not pulling back as strongly as it did then, but bears thinking that the high current level indicates that all is in their favor should be aware of the resistance being tested, both historical and Keltner. They don't want to see Wednesday's and Thursday's patterns repeated. Bulls, of course, want exactly that.

Linda Piazza : 7/18/2008 9:51:48 AM

The VXO is dealing with potential resistance on 30-minute closes from 26.22-26.49, and there's potential historical resistance near 27. OEX bulls want to see it turn down below yesterday's 25.12 low. It's 26.07 as I type, however, challenging that resistance.

Keene Little : 7/18/2008 9:50:56 AM

So far we've got the gap n crap open and based on the pattern and trend line resistance I think short against yesterday's/today's highs is still the recommendation for now.

Linda Piazza : 7/18/2008 9:50:05 AM

As per my delayed feed, the TED spread has bounced back up to 1.40.

Linda Piazza : 7/18/2008 9:42:10 AM

The OEX's 30-minute 9-ema, support on 30-minute closes since about 10:30 yesterday morning, is now 577.49, with further potential support on 30-minute closes at 576.63. Those hoping the 583 level will at least be tested want to see that hold as support this morning.

Keene Little : 7/18/2008 9:39:11 AM

With GOOG and MSFT down this morning (-7.5% and -4.58%, respectively) NDX has started the day in negative territory (-1.3%).

Linda Piazza : 7/18/2008 9:10:02 AM

As I began this post, the ES contract was near fair values, but that has to be cast in its context of prolonged weakness overnight, erased after C reported. We have to at least consider vulnerability to retests of support for the SPX and, by extrapolation, for the OEX.

If the current ES values continue into the open and if cash markets open in accordance, we can assume that the OEX will open somewhere near the flat-line. Beyond that, we can't assume much. The OEX ended the day jammed against potential Keltner resistance on daily closes. It was also just beneath a zone that could be strong resistance, from about 583-586, with that zone including the March 17 intraday low of 583.64, among other possible resistance levels. The OEX had a potential short-term Keltner target of 583.43 on its 15-minute chart, but that's an intraday chart and all of us can ponder on that approaching March 17 intraday low. Short-term bulls, well trained by now to be skittish, can be thinking of selling ahead of that test, so it's possible that it could never be reached although short-term setups suggest that it could be.

So, here's the deal: if the OEX were to open near yesterday's close and then start falling, I'd watch for first potential support near 576.50 or maybe even as high as 577.90. If that's lost, however, we have to consider the possibility of a retest of the daily 10-sma and/or 9-ema. That would include a drop to about 571.40-572.40. If in bearish positions, I would watch then guard profits carefully, as those could now be support on daily closes as well as intraday support.

If the OEX should climb and I were in bullish positions, I'd be prepared with profit-protecting plans if it climbed toward 583, a potential stall level. Some charts show an ultimate potential toward 589 or even 593-595 but without a surge of short-covering to help propel markets higher, that 583-586 region may well be tough.

Keene Little : 7/18/2008 9:05:04 AM

More not-as-bad-as-had-been-expected earnings news from Citigroup has their stock gapping up more than $2 to $19.60 (+11%) this morning and that has equity futures pointing up instead of down like they were after the disappointing GOOG and MSFT earnings following yesterday's close. ES and YM are back up to yesterday's highs so it will be interesting to see if they can hold the gains--the DOW and SPX finished the day just below their downtrend lines from May/June. A gap n crap is possible so be careful with the open.

Jane Fox : 7/18/2008 8:58:07 AM

Here is a daily chart of the DOW. Notice as the market was moving down and making new daily lows the MACD was following each and every move. Then once the MACD broke ranks and made a higher low that low marked the bottom. Link

Linda Piazza : 7/18/2008 8:56:20 AM

The TED spread is 1.32 as per my delayed quote. That's down 0.077 or 5.539% from yesterday's ending value.

Jane Fox : 7/18/2008 8:43:17 AM

Dateline WSJ - Mortgage giant Freddie Mac -- emboldened by emergency regulatory actions that have triggered a two-day rebound in its battered stock -- is considering raising capital by selling as much as $10 billion in new shares to investors, according to people familiar with the matter.

The high-stakes maneuver would have the potential to avoid a full-blown government rescue for Freddie Mac and Fannie Mae, twin keystones of the U.S. housing market. The publicly traded, government-sponsored companies own or guarantee about $5.2 trillion of home mortgages, or nearly half the total outstanding, and are at the center of government efforts to prop up the sagging housing market.

Both companies' stock fell about 45% last week amid worry about whether they have enough capital to cover mortgage losses. The depth of their troubles spurred the Treasury Department on Sunday to unveil an unusual plan to temporarily extend an unspecified credit line to both companies -- as well as buy stock in them if necessary.

Jane Fox : 7/18/2008 8:41:28 AM

Overnight markets, at least the American Equity index futures markets, really like the news out of Citigroup and have staged a very nice rally. Link

Jane Fox : 7/18/2008 8:38:03 AM

NEW YORK (MarketWatch) -- Citigroup, the largest U.S. bank by assets, said on Friday that it lost money for the third consecutive quarter after writing down $7.2 billion of investments related to fixed income weakness and consumer credit woes.

Analysts had expected the firm to report write-downs of up to $9 billion. The company said it lost $2.5 billion, or 54 cents a share, compared to a profit of $6.23 billion, or $1.24 a share.

On a continuing operations basis, the firm lost $2.22 billion, or 49 cents a share, compared to a profit $6.14 billion, or $1.23 a share.

Analysts polled by FactSet had expected the firm to lose 62 cents a share.

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