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Keene Little : 7/28/2008 11:51:51 PM

Tuesday's pivot table: Link

With the selling right into the close on Monday it left me wondering if we'll see a reversal on Tuesday. Either that or a quick and short flush to the downside to then set up a bounce into the end of the week. At least that's the potential. The move down from last Wednesday can be counted as a completed 5-wave move and that means it should be ready for a correction of the decline. That's shown in dark red on the 30-min chart: Link

The pink count shows a move with two equal legs down from last Wednesday at 1220.66 which is the level of the early 2005 highs and 2006 lows. This is the horizontal line on the daily SPX chart and as shown on the chart with the pink count it could set up a rally into mid August as part of a larger upward correction that started from the July 15th low (with an upside target around 1315-1320). Two equal legs down for the DOW is at 11095 and was the downside target I provided towards the end of the day on Monday. SPX Daily chart: Link

NDX closed at its uptrend line from its July 15th low, which looks like the bottom of a bear flag. If the bulls take over the reins tomorrow we could see NDX back up to the top of its flag pattern near 1910 by the end of the week (pink on the daily chart). Otherwise a drop below 1790 would spell trouble and would be pointing NDX down towards the March low near 1670. Daily chart: Link

OI Technical Staff : 7/28/2008 10:00:02 PM

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Jeff Bailey : 7/28/2008 5:56:14 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/28/2008 5:35:46 PM

Merrill Lynch (MER) $24.33 -11.59% ... darts lower to $23.00 on additional stock offering.

Jeff Bailey : 7/28/2008 5:29:50 PM

Global Equity Indexes, Currencies, Oil, Gold & $HUI.X at this Link

Jeff Bailey : 7/28/2008 5:23:41 PM

Closing Internals found at this Link

Tab Gilles : 7/28/2008 4:55:59 PM

JP MorganChase (JPM) $37.66 -$1.86 (4.71%)

Tab Gilles : 7/23/2008 10:36:02 AM

JP Morgan/Chase (JPM) $42.10 +$1.24 (3.03%) Touching its 200-ma and the 61.8% Fibonacci Retracement from the May/July levels.

The suggested LEAP calls WJPAG $11.10; WJPAH $8.30; WJPAI $6, mostly have doubled. Taking 1/2 a position off the table would be prudent and letting the rest ride on the houses money.

The 200-ma provided stiff resistance and now the $37.50 Gap support level is being tested. Link Link

I'd suggested last week to take 1/2 of the money off the table. Depending on JPM bouncing or breaking the current support, one may want to consider pulling the sell trigger on the remaining positions.

Closing LEAP prices, WJPAG $8.65; WJPAH $6.35; WJPAI $4.85...these calls do expire January 2010.

Jeff Bailey : 7/28/2008 4:34:26 PM

DXY's 04:00 tick was 72.675

Jeff Bailey : 7/28/2008 4:29:56 PM

Seeing additional 1.02 million shares blocked at $125.79 in this evening extended for SPY $123.59 -1.50% ...

Jeff Bailey : 7/28/2008 4:15:20 PM

Seeing 7.5 million shares blocked at $125.79 in this evening's extended. This would be an order put together during today's session.

Jeff Bailey : 7/28/2008 4:06:21 PM

Amgen (AMGN) ... Earnings Press Release Link

Consensus was for EPS of $1.02 on Revenue of $3.58B

Jeff Bailey : 7/28/2008 4:04:36 PM

Amgen (AMGN) $60.48 +12.16% ... jumps to $62.50 on headline numbers.

Keene Little : 7/28/2008 4:00:37 PM

We've pretty much sold off right into the close and that sets us up for a reversal tomorrow (if today was a little mini capitulation). Consider that possibility if you're thinking of carrying a short position overnight. The other possibility of course is that we're in the middle of a crash. But betting that way is a very low odds probability of success.

Linda Piazza : 7/28/2008 4:00:35 PM

We don't know what will happen tomorrow, but the OEX is settling near the potential support on the daily chart, barring a big fall below 565.50 into the close or a big bounce above 570-572. The action today preserves a potential downside target of 560-561 on the 30-minute chart, but that's a target that will be thrown into question with 30-minute closes above about 572.25 and will be erased with 30-minute closes above about 576.50.

For now, then, vulnerability to 560-561 must be factored in, but bears must make decisions knowing that potential support on daily closes has been tested and may be holding. You've seen the action over the last couple of weeks. Are you going to trust this big down day to be predictive any more than you were going to trust the 7/22 big up day? The OEX could easily gap below this support tomorrow morning and head down toward 560-561 or even to retest the July low or even to a lower potential target now at 544.40. It could as easily bounce from this support that's being tested as I type or just create another small-bodied candle at support.

Jeff Bailey : 7/28/2008 3:54:20 PM

SSO $57.00 -3.22% ...

Jeff Bailey : 7/28/2008 3:53:37 PM

SPY $123.51 ... retraces 61.8% of 07/15 low to recent 07/23/08 relative high.

Jane Fox : 7/28/2008 3:50:51 PM

Economic Reports tomorrow include:

9:00a.m. May Case Shiller Home Price Index: Previous: -16.3%.

Keene Little : 7/28/2008 3:50:22 PM

The DOW has finally made it down to its broken downtrend line and now not much further down is the Fib projection at 11095. SPX is only a point shy of its 62% retracement at 1235.

Linda Piazza : 7/28/2008 3:48:14 PM

The A/D line is now -1437, sinking ever closer to its potential target and potential support on 15-minute closes now near -1550.

Jeff Bailey : 7/28/2008 3:48:22 PM

VIX.X 24.30 +6.06% ... probes WKLY R1 from underneath.

Jeff Bailey : 7/28/2008 3:47:37 PM

Bank of America (BAC) $28.20 -4.66% ... BAC-TS currently $0.14 x $0.15.

Linda Piazza : 7/28/2008 3:45:55 PM

I've been talking about the OEX's potential Keltner support on daily closes all day today. In fact, I believe that Friday afternoon, I mentioned that the OEX looked as likely--or slightly more likely--to decline toward 570 as it did to climb toward 593. The potential support on daily closes that was at 570 this morning is now near 565.60-568. I thought you might want to see a chart: Link If the OEX can manage a close at or above this potential support, there's the possibility of another indecision day tomorrow, with support at or near that Keltner level again. We just don't know yet how the OEX is going to close today.

Jeff Bailey : 7/28/2008 3:45:18 PM

JP Morgan (JPM) $37.73 -4.52% ... WKLY S1 set to be tested at $37.57.

Jeff Bailey : 7/28/2008 3:41:53 PM

Majors likely to finish at, or near session lows.

Jeff Bailey : 7/28/2008 3:41:33 PM

NASDAQ a/d 759:2,090

Jeff Bailey : 7/28/2008 3:41:20 PM

NYSE a/d 901:2,233

Jane Fox : 7/28/2008 3:38:32 PM

THe internals have been bearish all day and the TRIN is continuing its climb, currently at 1.30.

Linda Piazza : 7/28/2008 3:36:25 PM

Tonight, Japan's overall household spending, unemployment rate and retail sales will be released, with the last at 7:50 pm ET and the others ay 7:30. Those can be market-moving and currency-moving reports. Tomorrow, Germany's preliminary CPI will be released and that could certainly be market moving, but I don't have a specific time for that release. One source zeroed out the time--which may or may not mean that it occurs at midnight--and the other says "All day." Those are the most important reports until the U.S. reports start rolling in tomorrow morning at 9:00 at ET, with the Case Shiller Home Index being the first.

Jeff Bailey : 7/28/2008 3:34:54 PM

VIX.X 24.06 +5.01% ... would make "more sense"

Tab Gilles : 7/28/2008 3:34:38 PM

$VIX 24.05 +1.14; $VXN 27.78 +1.15; $RVX 28.78 +1.06

Tab Gilles : 7/28/2008 3:32:50 PM

Valero (VLO) $32.33 +$0.45 (1.41%

Scheduled to report earnings at 11:00 AM tomorrow.

Linda Piazza : 7/28/2008 3:32:32 PM

Important earnings reports before the open tomorrow include those from BP and VLO. Many companies will be reporting, of course, but those may be the most important.

Linda Piazza : 7/28/2008 3:31:02 PM

Important earnings reports after the close today include those from AMGN, JDAS, MOS and UHS.

Jeff Bailey : 7/28/2008 3:25:21 PM

SPY $124.16 -1.05% ... just above QCharts' WKLY S1 ($124.01).

Jeff Bailey : 7/28/2008 3:24:28 PM

DIA $111.91 -1.11% ... right at QCharts' WKLY S1.

Jeff Bailey : 7/28/2008 3:23:43 PM

NASDAQ a/d 736:2,106

Jeff Bailey : 7/28/2008 3:23:27 PM

NYSE a/d 906:2217

Jeff Bailey : 7/28/2008 3:19:52 PM

At Friday's close ... AA was 2.28% weight in INDU. 0.24% in SPX.

Jeff Bailey : 7/28/2008 3:18:47 PM

Not certain about these 19.65.

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

VIX.X ... "bad tick" to 18.17

Jeff Bailey : 7/28/2008 3:17:04 PM

Alcoa (AA) $32.86 +3.36% ... gets a lift. Under Hart Scott Rodino Act, company has been notified that Highfields Capital has acquired up to 8% of company's common shares.

Linda Piazza : 7/28/2008 3:06:42 PM

The bond market has closed. Sometimes the close of the bond market prompts a change in tenor in equities: sometimes a reversal and sometimes an acceleration of the prior trend. Just remain watchful.

Linda Piazza : 7/28/2008 3:05:39 PM

The level the OEX has to sustain before there's any change in tenor at all is now 573.11, but preferably about 574. That would be just a first and tentative change in tenor and not proof that the decline has ended. The OEX is now 570.82, facing potential resistance on 15-minute closes at about 571.75.

Keene Little : 7/28/2008 3:04:59 PM

The DOW's broken downtrend line is now down near 11145.

Jeff Bailey : 7/28/2008 3:06:56 PM

SPX Heavyweights (XOM to BUD) have a/d 5:43

CVX +0.73%, COP +0.75%, OXY +1.62%, AMGN +11.38% and BUD +0.25%.

AIG -9.61%, C -6.41%, AAPL -4.11%, JPM -3.34%, CMCSA -3.26%

Jeff Bailey : 7/28/2008 3:03:30 PM

Sellers still in control today.

Linda Piazza : 7/28/2008 3:03:19 PM

As I mentioned earlier today, the OEX's 30-minute chart shows a potential downside target of 560-561, although that was at a slightly different level earlier today. However, that may be superceded by what we see on the daily Keltner chart, where potential support on daily closes is in the 566-568 region. Of course, it's possible for both parameters to be met, by a punch down to 560 some day this week but with a daily close back above 566-568. For now, be aware of the vulnerability to 560-561, but be sure to update just-in-case bearish profit-protecting plans as the OEX approaches that potential support on daily closes.

Jeff Bailey : 7/28/2008 3:03:15 PM

NASDAQ a/d 710:2,120

Jeff Bailey : 7/28/2008 3:03:02 PM

NYSE a/d 874:2,233

Jeff Bailey : 7/28/2008 2:58:08 PM

US Oil Fund (USO) $100.46 +1.19% Link ... $0.50 box to match futures.

Jeff Bailey : 7/28/2008 2:54:02 PM

Also reports of Nigerian pipeline attacks this morning.

Jeff Bailey : 7/28/2008 2:53:01 PM

EIA: Revised May Oil Use -4.4%

EIA saying this morning that U.S. oil demand in may was down 902,000 bbl/day versus a year ago, at 19.729M bbls/day, the lowest level for any month since May 2003. Preliminary data had shown a drop of 242,000 barrels a day, or -1.8%.

Linda Piazza : 7/28/2008 2:51:42 PM

The A/D line is now -1353, sinking ever closer to potential support on 15-minute closes at about -1528 down to -1550.

Jeff Bailey : 7/28/2008 2:48:59 PM

Pound CurrencyShares (FXB) $200.23 +0.22% ... stronger vs. dollar.

Jeff Bailey : 7/28/2008 2:48:26 PM

Yen CurrencyShares (FXY) $92.75 +0.35% ... stronger vs. dollar.

Jeff Bailey : 7/28/2008 2:47:50 PM

Euro CurrencyShares (FXE) $157.89 +0.29% ... stronger vs. dollar.

Jeff Bailey : 7/28/2008 2:47:11 PM

DXY 72.68 -0.24% (30-minute delayed) ... at 01:45 PM EDT the DXY ticked 72.64.

Jeff Bailey : 7/28/2008 2:45:38 PM

Please remember this fall's Presidential Election (Balanced budget 2012)

Jeff Bailey : 7/28/2008 2:42:57 PM

01:45 PM EDT ... White House: Expects Record $482B Budget Deficit in 2008
Fiscal 2008 deficit seen at $389 billion
Cuts GDP forecast; Sees +1.6% in 08; +2.2% in '09.
Still on track to balance budget by 2012.

Linda Piazza : 7/28/2008 2:38:56 PM

A little push to the upside has occurred, but let's see where it goes. The OEX needs to maintain 15-minute closes above 573.46 before it even begins to change its tenor and preferably, above 574.12. Even then, it faces what now looks like massive resistance on the 30-minute chart, now grouped from 575.92-576.90 on 30-minute closes. However, both Keene and I have been warning to be watchful of bounce potential being tested, so keep those just-in-case profit-protecting plans in place if you've been in bearish trades. OEX at 572.84 as I type.

Jeff Bailey : 7/28/2008 2:27:46 PM

02:00 Internals found at this Link

Jeff Bailey : 7/28/2008 2:23:02 PM

SPY and SSO just kissing their WKLY S1s.

Linda Piazza : 7/28/2008 2:22:47 PM

As a reminder, the OEX has potential support on daily closes that's now at about 566-568.20. The OEX is 571.16 as I type.

Jeff Bailey : 7/28/2008 2:22:25 PM

SSO $57.53 -2.32% ...

Linda Piazza : 7/28/2008 2:21:33 PM

A/D line now -1334, more closely approaching that potential downside target, now at about -1525 to -1550. Remember that these targets also serve as potential support.

Jeff Bailey : 7/28/2008 2:21:23 PM

Most Actives ... XLF $20.28 -2.82%, QQQQ $44.59 -1.52%, C $17.74 -5.88%, AMGN $60.30 +11.83%, FRE $8.07 -2.41%, FNM $10.87 -5.88%, MSFT $25.53 -2.40%, CSCO $22.12 -1.38%, MTL $19.50 -25.57%, SPY $124.01 -1.17%

Keene Little : 7/28/2008 2:20:36 PM

Market still looks like it's bear flagging so we may not have seen the low yet. I have another Fib projection for the DOW at 11095 which would coincide with SPX tagging the 1235 area if it keeps heading lower this afternoon. The setup remains a good one for a rally into the end of the week/month once we find a low.

Jeff Bailey : 7/28/2008 2:09:16 PM

Chicago Fed Midwest Mfg. Index Up 1.1% in June to 106.0 ... May revised lower to 104.8

Linda Piazza : 7/28/2008 2:03:26 PM

The A/D line still has a potential downside target much lower, now in the -1550 zone. I'm just not sure it's going to drop that far, however, since the RSI has been trending below 30 for quite a while now on that 15-minute chart. It does trend below 30 at times, but whenever I see it at such extreme levels for so long, I maintain some skepticism about further potential downside targets. They can be hit, and that trending RSI is certainly showing us strong downside momentum, but consider the chart as showing vulnerability to that -1550 level and not a given that it will be reached. Watch out for bounce potential to kick in. A/D line at -1227 as I type.

Jeff Bailey : 7/28/2008 1:59:16 PM

ProShares Ultra S&P500 fact sheet Link

Jeff Bailey : 7/28/2008 1:58:12 PM

Swing trade long alert! ... for 1/8 position in the ProShares Ultra S&P 500 (SSO) $57.82 -1.83% here.

Stop $53.00. Target $75.00

Keene Little : 7/28/2008 1:44:45 PM

The DOW is now very close to its broken downtrend line from May 19th and there are hints of bullish divergence on the short term charts. Linda has been monitoring the a-d line which is quite negative but the a-d volume line is not as negative as Thursday (the strong selling day) or even Friday. So we've got some bullish divergence by that measure as well (10-min chart): Link

Linda Piazza : 7/28/2008 1:44:24 PM

We're in one of the typical stop-running times of day, so be careful about this latest little push to the downside on the OEX. Big money may be testing to see whether the 571-572 support will hold and if buyers are waiting just below. If they're testing with this latest little push, then we have to wait to see the outcome before we decide that a new low means more lows all afternoon. It could, but maybe big money doesn't know and so maybe we don't, either. Sustained 15-minute closes above 573.82 would be a first sign that the tenor was improving, but for now consider that potential resistance. OEX at 572.18.

Jeff Bailey : 7/28/2008 1:43:19 PM

SPX Heavyweights at this Link

Linda Piazza : 7/28/2008 1:31:57 PM

I'm turning to the OEX's daily chart for potential support on daily closes if the OEX should continue lower. That's at 566.30-568.26. The OEX is currently testing support that might provide bounce potential, so is at a place where bears are urged to tidy up their just-in-case profit-protecting plans, and that 566.30-568.26 level would be another, if it's tested. OEX at 572.35 as I type.

Linda Piazza : 7/28/2008 1:23:16 PM

First potential resistance on 15-minute closes for the OEX, if it should bounce, is now 573.97-574. OEX at 572.46 as I type.

Linda Piazza : 7/28/2008 1:16:35 PM

The A/D line is still making new lows and has a potential downside target of -1600, far below its current -1098 level. However, RSI has already dipped into the level from which a recovery or bounce is sometimes begun. Sometimes lately RSI on the 15-minute chart does trend in these sub-30 levels, so don't use this level as a sign that the decline is kaput. Do use it as a warning sign that the downside target is not guaranteed.

Linda Piazza : 7/28/2008 1:11:53 PM

TED spread at 1.11 as per my delayed quote.

Linda Piazza : 7/28/2008 1:11:04 PM

To register any meaningful improvement in tenor at all, the OEX needs to scramble back above 577.16 and maintain values above that. Until then, watch for rollover potential first at 574.14-574.60 and then at 577.16 on 15-minute closes.

Those who want to see an improvement in tenor do want to see the OEX scramble back above that level. For now, it's set a potential downside target of 560.15 on the 30-minute chart. A 30-minute close back above 575.62 questions that potential target and a close back above 577.16 erases it.

Linda Piazza : 7/28/2008 1:04:40 PM

The OEX has now dropped to that next Keltner potential support, now at about 571.75 with the OEX pennies above that as I type. As I noted earlier, this is another place at which bears need to recalibrate their just-in-case profit-protecting plans. OEX at 572.05.

Keene Little : 7/28/2008 1:02:40 PM

The DOW is getting closer to its 11160-11170 potential support area. SPX doesn't hit its 62% retracement until 1235, another 8 points lower. That would have the DOW down near 11100. No bullish divergences to speak of and that has the market looking more bearish here.

Linda Piazza : 7/28/2008 1:01:33 PM

On a short-term Keltner basis, the TRAN is now behaving better than the OEX, SPX and especially the Dow. For example, the TRAN is above potential support that's analogous to the SPX's 1245.50 zone, the OEX's 574.40 and the Dow's 11249. For the TRAN, that Keltner level is 4882.50 and the TRAN is currently 4905.46. I'm not sure what to make of the TRAN today, as it's either outperforming to the downside or to the upside today on a Keltner basis, but certainly not synchronized.

Jane Fox : 7/28/2008 12:53:13 PM

Here are your overnight charts. Needless to say all the overnight lows have been broken. Link

Keene Little : 7/28/2008 12:49:55 PM

Gold update: The bounce off last Thursday's low looks like a bear flag and gold should drop lower out of it. It may stair-step lower to the uptrend line from May 1st, currently near 86.30 before getting a bigger bounce. As depicted on the daily chart, the bigger bounce could end up being a correction to the decline from July 15th before continuing lower (dark red) or gold could be stuck in a large bullish sideways triangle that will contain price until Sept/Oct (green) before rallying out of it. Link

Jane Fox : 7/28/2008 12:48:59 PM

Internals have turned decidedly more bearish. No I would have to say they are downright bearish not just more bearish. Link

Linda Piazza : 7/28/2008 12:47:10 PM

Although the OEX's next potential target at 571.83 hasn't been officially set yet, I think it will be by the close of this 15-minute period. That is also an area at which bears need to update their profit-protecting plans, if it's approached. OEX at 573.51.

Jeff Bailey : 7/28/2008 12:39:45 PM

Dow Indu. Components (Price Weighted Index) ... weightings at today's cash open. Link

Linda Piazza : 7/28/2008 12:31:03 PM

For now, the OEX is still clinging to potential support on 15-minute closes at 574.93, but it flirts with breaking that support and setting a potential downside target now at about 571.90. Bears should be aware that the support is holding for now, however, and should keep those just-in-case profit-protecting plans updated. OEX at 575.27 as I type.

Keene Little : 7/28/2008 12:30:28 PM

If the market continues lower the DOW might hit the lower target near 11170. The downside pattern for SPX continues to have me thinking it's an ending pattern and it might be forming a small descending wedge from Friday morning's high. Another up-down sequence to a low around 1240-1245 would set up a rally into the end of the week/month as shown in dark red on the 30-min chart: Link

That kind of move might also coincide with the DOW testing its broken downtrend line and then rallying. Shown in pink, which at this point I believe is a lower probability scenario, is a strong bounce this afternoon into tomorrow before another steep decline.

Jeff Bailey : 7/28/2008 12:16:20 PM

12:00 Internals found at this Link

Linda Piazza : 7/28/2008 12:15:43 PM

The A/D line dropped to the potential Keltner target, also potential support on 15-minute closes. That's now at about -850 with the A/D line currently attempting a bounce from that and at -745. Currently, the bounce doesn't look strong, so the A/D line could come back down to retest the support or even break it, perhaps after a rise toward about -490. Bears should keep updating their just-in-case profit-protecting plans, however, as we're seeing some potential bullish price/RSI divergences on the OEX and some other indices on the 30-minute charts.

Linda Piazza : 7/28/2008 12:10:18 PM

The TED spread on my delayed quote is 1.11, up from its 1.06 low.

Jeff Bailey : 7/28/2008 12:31:00 PM

INDU 11,254 -1.02% Link ... has probed QCharts' WKLY S1 11,233.11 . WKLY Pivot 11,464 would be first real sign of strength.

Jane Fox : 7/28/2008 12:06:27 PM

Here are your VIX and S&P futures charts and as you can se they are in sync, the VIX climbing and ES falling. Link

Linda Piazza : 7/28/2008 12:00:32 PM

The OEX has now closed a 30-minute period beneath the support that held it all day Friday and may be about to close a second 30-minute period beneath it, too. Although I'm counseling bears to watch for bounce potential, and that bounce potential does exist, the OEX now has potentially strong resistance on 30-minute closes up to about 578. Until and unless it can break above that, today's tenor won't have changed.

Jeff Bailey : 7/28/2008 11:57:10 AM

JetBlue Airways (JBLU) $4.98 -1.19% ... WKLY Pivot levels are ... $3.25, $4.14, Piv= $4.76, $5.65, $6.27.

Jeff Bailey : 7/28/2008 11:55:13 AM

US Oil Fund (USO) $100.10 +0.83% ... QCharts' WKLY Pivot at $101.70. (See other charts; conventional retracement and QRTRLY/MONTHLY last week's MM). Session low $98.84.

Jeff Bailey : 7/28/2008 11:53:31 AM

Petroleo Brasileiro (PBR) $55.02 +3.61% ... probes WKLY Pivot ($55.01) from underneath.

Linda Piazza : 7/28/2008 11:53:07 AM

Those of you who have AUG bear call spreads might be able to use today's downdraft to close out some of those for a pittance. I just closed 15 AUG RUT 770/780's for $0.20. I know that's not a pittance to most of you and some quarrel with the idea of giving up that much potential profit. However, the RUT has recently been outperforming to the upside and I had 30 AUG bcs's in total in all my accounts, and these were entered for $0.60 credit, so I was glad to take this opportunity to close out some of my bearish RUT positions for AUG. Some of you will feel differently, but here's the deal. This is actually not my first go-round with AUG bcs for the RUT. I'd originally done 25 800/810, but was able to close them out on 7/03 for a debit of only $0.13. Then I got into 750/760's (bad idea in retrospect). The 15 770/780's that I closed out this morning were some I had rolled into from that 750/760 position when the deltas on my sold 750 strike started rising above 0.24 last week and I started the adjustment process. So, although it didn't work so well this time with the second round of RUT bcs, the point is that taking that opportunity when it presented itself to get out of the 800/810's early in the cycle allowed me the possibility of reentering. If I hadn't done it, I wouldn't have had that opportunity.

Jeff Bailey : 7/28/2008 11:48:41 AM

Asian Markets Link ... were mixed-to-higher Monday.

Japan's Nikkei-225 Link finished up 19 points, or +0.14% at 13,353. (Low=13,327 : High=13,432) No chart change.

Hang-Seng ($HSI) Link down 53, or -0.24% at 22,687. (Low= 12,620 : High= 22,862) 3-box reversal up to 22,850, ease to close.

Shanghai Comp. ($SSEC) Link was up 37, or 1.32% at 2,903. (High= 2,924 : Low= 2,884). No chart change.

Linda Piazza : 7/28/2008 11:41:44 AM

The RUT is now below Thursday's low, but it closely approaching its converging daily 10- and 30-sma's, with those near 697.70. The RUT is 699.82 as I type.

Linda Piazza : 7/28/2008 11:33:35 AM

The OEX's tenor over the last couple of hours has been weak. However, it's testing potentially strong support, so bears should update their just-in-case profit-protecting plans if they haven't done so. I don't know if the weakness will continue. If so, those updated plans won't be needed, but have them there anyway.

Jeff Bailey : 7/28/2008 11:34:10 AM

iShares iBoxx High Yield (HYG) $93.58 -0.43% ... has paid dividends of $7.55/share over last 12-months. Link SEC Yield 8.067%

Linda Piazza : 7/28/2008 11:28:49 AM

AT 701.43 as I type and just off a 701.09 low of the day, the RUT is testing Thursday's 700.85 low.

Jeff Bailey : 7/28/2008 11:26:57 AM

PHF ... recent NAV from 07/24 was $8.08. Link

Linda Piazza : 7/28/2008 11:26:16 AM

The A/D line is now -711, closely approaching potential support on 15-minute closes now at about -900. There is of course the possibility that the A/D line and equity prices will just plunge lower, but bears should be aware of the approaching support. If that support doesn't hold, the next target and next potential support is now at about -1500.

Jeff Bailey : 7/28/2008 11:24:32 AM

Pacholder High Yield (PHF) $8.02 +0.25% ... At current price and $0.075/month dividend, SEC Yield 11.22%.

Linda Piazza : 7/28/2008 11:22:06 AM

I said earlier today (10:27:09) that I wouldn't be surprised to see the OEX test 576.50 and it's done that. Now, I'll amend that to say that I wouldn't be surprised to see 575.76 tested. That's the next potential support on 15-minute closes. Traders should assess vulnerability to that level, but bears shouldn't necessarily count on it being hit. Support could kick in at any time now. Those hoping to avoid a trip down to 572 hope it does.

Jeff Bailey : 7/28/2008 11:21:39 AM

Treasuries seeing some decent PRICE gains with YIELDS lower.

Freddie Mac (FRE) $8.42 +1.81% sold $2 billion of short-term debt this morning and demand was strong.

$1 billion of three-month at 2.40% rate, compared to 2.54% from 07/21 sale. Bid-to-cover 3.85 vs. 3.30 on 07/21.

Another $1 billion of six-month at 2.654% rate, compared with 2.820% for same size last week. Bid-to-cover 2.83 vs. 2.27 on 07/21.

Linda Piazza : 7/28/2008 11:13:48 AM

The OEX is slipping down to test potential support on 30-minute closes that I've been mentioning. For reference, Friday's low was 577.24 and the OEX has just dropped below that. There's the potential for the OEX to slide down to next support (on 15-minute closes) now at 575.94, although that's not a given. Bears should be careful here as support could catch hold any time. Bulls should be careful here as a violation of these support levels, especially if accompanied by 15-minute closes beneath 575.94, could suggest a trip down to 572. We just don't know which way it's going to go. I bet some of you were betting earlier when the OEX was zooming up to test Friday's resistance that it would break through and now some are betting that it will break through support. It may. We just don't know.

Keene Little : 7/28/2008 11:03:12 AM

For the DOW a 50% retracement of the July 15-23 rally is at 11264, a little less than 30 points lower. The 62% retracement is at 11163, close to where it would test its broken downtrend line.

Keene Little : 7/28/2008 10:59:20 AM

If the DOW keeps heading lower I'd watch for a downside target near 11170 where it could test its broken downtrend line from May 19th. Whether it will rally from there would be the next question. 120-min chart: Link

Linda Piazza : 7/28/2008 10:58:37 AM

The TRAN isn't giving reliable guidance today. It seems to be moving in opposition to the indices it often leads, zigging when they're zagging and vice versa. While the OEX and some other indices it often leads were reaching to test resistance early this morning, it was hitting a new low of the day. Currently, it's testing resistance while the OEX and some other indices are testing support.

Keene Little : 7/28/2008 10:55:05 AM

The DOW has been chopping lower since Friday and has the appearance of an ending pattern, or at least that's the potential. It fits as the 5th wave of the move down from last Wednesday's high (5th waves often chop lower as can be seen in the DOW's 10-min chart). That suggests we're nearing a bottom and will soon see a rally to correct the decline from Wednesday.

But SPX has been chopping sideways and is close to testing Friday's low now. Its pattern suggests another bounce before it will be ready for a steeper selloff. Considering there's quite a difference even between the two blue chippers that leaves me scratching my head wondering what's next. I could argue for either direction right now and I hate arguing with myself. Stay cautious and trade lightly. If you're short stay aware that we could be bottoming.

Linda Piazza : 7/28/2008 10:54:21 AM

The OEX's is testing the potential support mentioned in my 10:27:09 post. Currently, it's holding that support with several minutes left before the close of the 30-minute period, and that's about all we can conclude.

Jeff Bailey : 7/28/2008 10:43:11 AM

Johnson & Johnson (JNJ) $68.87 -0.24% ... has schizophrenia drug Risperdal.

Keene Little : 7/28/2008 10:36:21 AM

Still chopping around and directionless. Stay out of the chop. I see the bonds making a fairly big move today--the rally in them may not help the stock market today if there's some rotation going on.

Jeff Bailey : 7/28/2008 10:31:20 AM

Vanda Pharma (VNDA) $1.25 -62.80% ... received not approvable letter from FDA for its Iloperidone antipsychotic drug.

Jeff Bailey : 7/28/2008 10:28:41 AM

Most Actives ... AMGN $60.95 +13.03%, QQQQ $45.31 +0.08%, VNDA $1.30 -61.60%, FNM $11.37 -1.55%, INTC $21.90 -0.49%, SPY $125.57 +0.06%, SIRI $2.11 -6.22%, KFT $30.74 +4.62%, PFE $18.80 -0.47%, XLF $20.73 -0.67% ...

Jane Fox : 7/28/2008 10:28:18 AM

Crude is not looking strong today. It may consolidate between support at $120 and support turned resistance at $130.00 for a while before we see any kind of clear direction. Link

Linda Piazza : 7/28/2008 10:27:09 AM

The potential OEX support that it's important to watch is the potential support on 30-minute closes that held all day Friday. That's now at 578.22, but there's further potentially strong support on that chart that's now at 577.23, so I'd extend the potential support on 30-minute closes down to that level. I actually believe that a test of 576.50 might be possible, if not a given.

Jeff Bailey : 7/28/2008 10:24:52 AM

10:00 Internals at this Link

Wednesday's Internals Link

Linda Piazza : 7/28/2008 10:19:41 AM

Once again, as it did all day Friday, the OEX's resistance on 15-minute closes, now up to about 581.85, held on a 15-minute close. During the previous 15-minute period, the OEX jumped up to a high of 581.25, but it was knocked back. As far as I'm concerned, we're just seeing more of the same stuff we saw Friday and there's nothing here that yet tells me next direction.

Linda Piazza : 7/28/2008 10:15:24 AM

Like the TRAN, the RUT is behaving differently from some other indices, not showing any leadership to the upside, certainly. At 707.38, it's just off the 706.32 low of the day reached during the previous 15-minute period.

The TRAN has bounced off its low reached during the previous 15-minute period, but I'd be wary of these gains in other indices if the TRAN turns down again and the RUT can't get its feet under it.

Jane Fox : 7/28/2008 10:14:26 AM

Internals are bullish. VIx is falling and AD volume climbing. AD ratio (top chart) is not making new daily highs but that is OK. Link

Linda Piazza : 7/28/2008 10:11:09 AM

The A/D line is testing descending trendline resistance as well as the top of the potential Keltner resistance on 15-minute closes that now estends up to about 380. The A/D line is currently 260, just off its 319 high of the day. No outcome predicted just yet. We know resistance is being tested, but that's it.

Linda Piazza : 7/28/2008 10:06:49 AM

Potentially strong resistance for the OEX on 15-minute closes now extends up to about 581.90.

Linda Piazza : 7/28/2008 10:04:13 AM

My delayed quote shows the TED spread at 1.09, up from its 1.06 low of the day and just below the 1.10 high. I had thought there might be potential support in the 0.98-1.00 level, so had warned equity bulls to be watchful for a bounce in the TED spread if it should dip that low. For now, it's good news that the TED spread is working itself lower from its 7/16 high of 1.45, but it won't be good news if it finds support and starts bouncing.

Linda Piazza : 7/28/2008 10:01:27 AM

Keltner outlook on the TRIN: TRIN this morning dropped toward but not quite to potential support on 15-minute closes at 0.53, and it's currently bouncing. It has potential Keltner and historical resistance up to about 0.89 with the TRIN currently at that level. Next resistance is at 1.04 and then again at 1.16. Bears want the TRIN to zoom up through that resistance and bulls want it to hold on 15-minute closes.

Jeff Bailey : 7/28/2008 10:00:32 AM

Of SPX components shown (48.85%) of weighting down to Boeing (BA). Nearly 1/2 from 49 stocks.

Linda Piazza : 7/28/2008 9:57:29 AM

This morning, the TRAN is again weaker than some other indices that it often leads, such as the OEX. During this 15-minute period, it reached a new low for the day, for example, and that low was below Friday afternoon's last swing low (not Friday's all-day low). The TRAN is currently bouncing off this morning's 4922.41 low but this relative weakness (on a Keltner basis, too) offers a warning to OEX, SPX and Dow bulls. Be careful about your assumptions. The TRAN is currently 4929.17.

Jeff Bailey : 7/28/2008 9:56:34 AM

US Bancorp (USB) $29.16 +0.89% ... was 0.46% weighting before cash open.

Jeff Bailey : 7/28/2008 9:55:11 AM

S&P 500 Heavyweights (07/28/08 Open) at this Link

Linda Piazza : 7/28/2008 9:48:55 AM

The A/D line closed the first 15-minute period inside the potential resistance band that now stretches up to about +320 but not above it. A descending trendline that began to form Friday now crosses at about that level, so the A/D line would need to sustain values above it before we could say that it had improved in tenor. A/D line now +119.

Jane Fox : 7/28/2008 9:47:04 AM

TRIN is a bullish 0.61 and falling.

Jane Fox : 7/28/2008 9:46:34 AM

VIX is falling and making new daily lows as the S&P futures (ES) is making new daily highs.

Linda Piazza : 7/28/2008 9:45:13 AM

Next potential resistance for the OEX on 15-minute closes is now at about 581.10. For now, the OEX is just chopping around within that same zone in which it chopped all day Friday. Resistance looks fairly firm, but so does support, so there's not a lot to be gleaned from that. We just have to wait it out.

Linda Piazza : 7/28/2008 9:42:34 AM

The A/D line has bounced strongly and is pushing up through the first levels of Keltner resistance. Further potential resistance on 30-minute closes now stretches up to about 280-300 with the A/D line now at 122. All we know for sure is that there's been a strong bounce of the low but that resistance is still being tested.

Jeff Bailey : 7/28/2008 9:41:18 AM

Kraft Foods (KFT) $30.04 +2.24% ... Was #52 heavyweight in SPX to start the session. (0.41% of total).

Jeff Bailey : 7/28/2008 9:37:54 AM

Amgen (AMGN) $62.00 +14.98% ... #40 most heavily weighted to begin the day in SPX. (See Friday's MM)

Linda Piazza : 7/28/2008 9:36:54 AM

Keltner outlook on the A/D line: The A/D line had its first prints in the lower or bearish (for equities) half of its Keltner charts. Those first prints were just beneath potentially strong resistance on 15-minute closes from about 17 up to about 250. The A/D line has since dropped and shows the potential to drop toward first strong support, now at about -1000. Traders must factor in the possibility that the A/D line could drop all the way there, carrying equities lower, too, but that extreme of a drop is not a given as the A/D line sometimes sets up a range in the first 30 minutes of trading and then chops around before deciding next direction. I would look for potential support to start kicking in it if the A/D line did drop that far. A/D line now at -435.

Tab Gilles : 7/28/2008 9:32:11 AM

Several reports on oil. =============================================== WASHINGTON (Reuters) - Iranian President Mahmoud Ahmadinejad said on Monday that Iran will seek "common ground" with the United States and five other world powers that have proposed incentives for Tehran to freeze its nuclear enrichment program.

NBC News, which interviewed Ahmadinejad in Iran, also said the leader of the world's fourth-largest crude oil producer believes the oil market is overvalued in part because of manipulation.

Speaking less than a week before a deadline for Iran's reply to the incentives package, Ahmadinejad told the U.S. television network that progress toward agreement with the West would depend on the sincerity of a shift in the U.S. approach to Tehran.

================================================= OPEC says US$80 is fair price for oil Calcutta News.Net Sunday 27th July, 2008

Chakib Khelil of Algeria, the rotating president of OPEC has told a weekend meeting that oil should be trading at between about US$70 to US$80 dollars per barrel if the dollar strengthens and the Iranian nuclear crisis is defused.

He said while there could be volatility along the way, long-term oil prices should move in a lower direction without the interference of geopolitics or the US monetary policy.

Mr Khelil said a recent meeting between senior US diplomat William Burns and Iran's chief nuclear negotiator Saeed Jalili in Geneva and the strengthening of dollar were the main factors that helped push the oil prices down rather than changes in supply and demand.

At the meeting, the OPEC head also voiced dissatisfaction with some European countries' insistence on promoting bio-ethanol energy.

Jeff Bailey : 7/28/2008 9:29:29 AM

Tyson Foods (TSN) $16.23 ... Called lower at $14.30.

Earnings Press Release Link

Jeff Bailey : 7/28/2008 9:27:52 AM

Sohu.com (SOHU) $82.82 ... Called higher at $85.39.

Earnings Press Release Link

Keene Little : 7/28/2008 9:26:46 AM

The overnight session in equity futures looks like an extension of Friday's slow choppy sideways/down consolidation. My best guess is a quick low followed by a brief rally followed by a renewed decline. If it plays out that way this morning it could be a bit whippy so be careful.

Jeff Bailey : 7/28/2008 9:26:20 AM

Simon Property Group (SPG) $90.59 ... Earnings Press Release Link

Jeff Bailey : 7/28/2008 9:24:10 AM

Loews Corp. (L) $41.92 ... ticks lower pre-market at $41.52.

Earnings Press Release Link

Jeff Bailey : 7/28/2008 9:21:57 AM

Kraft Foods (KFT) $29.38 ... Ticks higher pre-market at $30.23.

Earnings Press Release Link

Jeff Bailey : 7/28/2008 9:18:25 AM

Verizon (VZ) $23.93 ... Flat pre-market at $23.92.

Earnings Press Release Link

Linda Piazza : 7/28/2008 9:05:39 AM

My delayed quote shows the TED spread at 1.08.

Linda Piazza : 7/28/2008 9:05:08 AM

Jane mentioned the economic calendar for today, letting us know what was on--or not on, in this case--that calendar. The only other thing I see is Federal Reserve Governor Frederic Mishkin speaking in Washington, D.C. about the Federal Reserve's communications strategy. Hmm. Mishkin is a voting FOMC member. A Q&A session will likely occur, so there could be some possibility of market moves associated with that Q&A session. His speech begins at 12:00 pm ET.

Linda Piazza : 7/28/2008 9:00:57 AM

Let's start this morning by reviewing the weekly OEX chart. That weekly chart produced a doji with a long upper shadow and a somewhat smaller lower shadow. The upper shadow was long enough in proportion to the lower one that the possibility of a reversal lower should be factored into your trading plans. Keep in mind that any doji is a sign of indecision and perhaps that's all this one was. However, on the Keltner chart, the possibiliy of a slide down to test potential support on weekly closes now at about 570.70 is shown, too, so again we're seeing evidence that this possibility must be at least factored into trading plans, if not considered a given.

The daily chart gives little clarity, either. That chart does show a slightly greater chance that the OEX will slide toward 563-570 than that it will climb toward 593-596, but only a slightly increased chance. A daily close above about 581-582 would change that setup, so it wouldn't take much. Friday's daily candle was a small-bodied one, indicative of indecision, too, but it could serve as a heads-up for a potential reversal, but this time to the upside.

All in all, the evidence on these charts would have to be neutral but with a slightly bearish edge but one that would be easy enough to switch to a slightly bullish edge. Futures are below fair values this morning, giving a slightly bearish edge to this morning, too. If the OEX were to open in accordance with the current distance of the SPX from its fair values, then we might see potential support on 30-minute closes near 578.50 tested again. That support was tested multiple times Friday and even pierced during a 30-minute period, but all 30-minute closes were at or above it, so a breach of this on a 30-minute close would be a change in tenor and would set up the possibility of a test of 577 and maybe even 572. However, for now, bears should consider that this potential support near 578.50 has held up through multiple tests and could do so again. If it does and the OEX bounces, or if it bounces first, we switch to the 15-minute chart, where resistance on 15-minute closes that's now at 582.21 also held all day Friday. Until the OEX breaks through and sustains values outside one of those boundaries, it's just continuing Friday's chop.

Jane Fox : 7/28/2008 8:45:59 AM

Here are your overnight charts. The only market to break its previous day lows was the DOW (YM). Both Russell 2000 (ER2) and NDX (NQ) futures closed relatively strong Friday so they looked the strongest overnight.

All in all though the overnight session was series of lower lows and highs and that is not bullish. Link

Jane Fox : 7/28/2008 8:42:37 AM

The only thing I can find on the economic calendar today is a 10:30 Dallas FED mfg Production index. Since this report was not on the Forexfactory.com calendar I don?t think it will be all that important.

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