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Jeff Bailey : 7/31/2008 12:40:17 AM

StockCharts' BPNYA up 3.24% to 40% on chart Link

BPCOMPQ up 0.91% to 34% on chart Link

BPSPX up 4.80% to 46% on chart Link Dorsey's BPSPX up 4.40% to 44% on chart.

Jeff Bailey : 7/31/2008 12:24:46 AM

NYSE saw 541 issues rising on their PnF charts and 118 falling. 74 new buy signals given and 10 new sell signals given for a net gain of 64. There were 282 3-box reversals higher and 55 3-box reversals downward.

NASDAQ saw 356 issues rising on their charts and 168 falling. 42 new buy signals given and 14 new sell signals given for a net gain of 28. There were 141 3-box reversals higher and 59 3-box reversals downward.

Optionable stocks, which most institutional traders/investors stick with, saw 811 issues rising on their charts and 207 falling. 105 new buy signals were given and 24 new sell signals given for a net gain of 81. There were 413 3-box reversals higher and 81 3-box reversals downward.

Dorsey's BPNYSE rose by 3.04% to 37.68% and the BPOTC rose by 0.89% to 31.65%. The BPOPT bullish % rose by 2.12% to 38.75%.

Jeff Bailey : 7/31/2008 12:13:08 AM

SPX NH/NL tally today was 11:7

RUT NH/NL was 37:29. Daily ratio 56.1%, 5-day ratio 45.3% and 10-day ratio 51.2%

Jeff Bailey : 7/31/2008 12:01:56 AM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/31/2008 12:01:20 AM

Closing Internals found at this Link

Keene Little : 7/30/2008 10:31:54 PM

Thursday's pivot table: Link

Once again the market rallied into the close and that leaves the possibility for a reversal Thursday morning. We've had some bullish end-of-month influences this week but that may have finished on Wednesday. We'll then have new-month money coming in which could help next week. In the meantime it looks like the market could be set up for at least a pullback before continuing higher.

The risk for the bulls is a complete reversal and hard selling to follow. Until the July 23rd highs get exceeded (for example, SPX 1291), the current rally could be just a correction of the decline from that high. A drop below Monday's lows at any time now would be very bearish. I'm hoping the form of the pullback (impulsive vs. corrective) will give us some clues as to what to expect next.
SPX 60-min: Link
DOW daily: Link
NDX daily: Link
RUT daily: Link

OI Technical Staff : 7/30/2008 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Tab Gilles : 7/30/2008 5:08:50 PM

Weekly EIA Report Link

Jeff Bailey : 7/30/2008 4:38:14 PM

I have to get ready for dinner meeting. Will try and update things later this evening.

Jeff Bailey : 7/30/2008 4:34:50 PM

SBUX was #240 weighted. 0.10% of total.

Jeff Bailey : 7/30/2008 4:33:44 PM

Prudential Earnings Press Release Link

At this morning's open was #92 most heavily weighted SPX component (0.26% of total)

Jeff Bailey : 7/30/2008 4:30:50 PM

Visa Earnings Press Release Link

Jeff Bailey : 7/30/2008 4:21:15 PM

Flowserve (FLS) $135.09 +5.89% ... halted for trade.

Jeff Bailey : 7/30/2008 4:20:45 PM

Prudential (PRU) $66.68 +0.49% ... halted for trade.

Jeff Bailey : 7/30/2008 4:20:14 PM

Visa (V) ... Halted for trade.

Jeff Bailey : 7/30/2008 4:15:51 PM

SBUX EPS estimate was $0.18 (ex-items). SBUX headline was Include items.

Jeff Bailey : 7/30/2008 4:14:47 PM

Starbucks (SBUX) $14.71 -1.86% ... surging now. $15.30 extended.

Jeff Bailey : 7/30/2008 4:12:09 PM

I agree Maria

Jeff Bailey : 7/30/2008 4:09:43 PM

Starbucks Earnings Press Release Link

Jeff Bailey : 7/30/2008 4:08:49 PM

Starbucks (SBUX) $14.71 -1.86% ... darts lower to $13.71 on headline numbers.

Jeff Bailey : 7/30/2008 4:07:55 PM

Disney's Earnings Press Release Link

Jeff Bailey : 7/30/2008 4:07:03 PM

Walt Disney Co. (DIS) $31.67 +2.42% ... inches higher to $32.00 extended on headline numbers.

Linda Piazza : 7/30/2008 4:05:42 PM

The TED spread is currently 1.12, up from the 1.05 high of the day near the high for the last couple of days.

Jeff Bailey : 7/30/2008 4:03:59 PM

Starbucks (SBUX) $14.71 -1.86% ...

Linda Piazza : 7/30/2008 4:02:20 PM

The RUT ended the day with a near-doji above yesterday's tall green candle. On the RUT, at least, there was indecision today. Ditto the TRAN.

Jeff Bailey : 7/30/2008 3:59:14 PM

SPX 1,281.46 +1.44% ... 4 minutes to Wednesday close. Threatens a close above WKLY Pivot.

Keene Little : 7/30/2008 3:58:45 PM

How true Jeff. I think it would be a roar with a tip of hat from SPX if it gets above 1291.

Jeff Bailey : 7/30/2008 3:56:41 PM

Difference between a "golf clap" and a roar from the 18th is SPX 1,295

SPX and 5-point chart (updated) Link

Linda Piazza : 7/30/2008 3:52:44 PM

Barring a strong OEX decline into the close (and I wouldn't bar anything these days), this action of course has totally changed the shape of today's OEX daily candle from the midday shape. Keep updating those profit-protecting plans, however, if in bullish positions, and decide if want to hold full positions overnight with the GDP tomorrow morning before the open. The OEX is still testing the 38.2% retracement of the decline off May's high, with that at about 591.50, but could still close above it today if a few more shorts decide to cover into the close. The 15-minute chart shows the move getting overdone to the upside. Neither the TRAN nor the RUT, or even the BIX for that matter, has also produced a new high, unless they do so while I'm editing this post, much less led the other indices to new highs. With XOM zooming up and due to report tomorrow morning, decide whether you feel comfortable taking on too much risk ahead of that report tomorrow morning.

Some charts now set the possibility of an OEX move up toward 596-599, at which time it will be bumping up against a rising trendline off the 7/02 and 7/23 highs, but if that 591.50-592-ish resistance holds, that target may be questionable. OEX at 591.91 as I type.

Jeff Bailey : 7/30/2008 3:50:00 PM

VIX.X 21.29 -3.35% ... juuuuust under your QRTRLY Pivot now.

MNTHLY 61.8% 20.9782 .... continue to find more put buyers/call seller than it does put sellers/call buyers.

Jeff Bailey : 7/30/2008 3:47:25 PM

USO $102.40 +4.44% ... NAKED IYS-TO $0.75 x $0.90

Jeff Bailey : 7/30/2008 3:46:18 PM

JBLU $5.21 -1.32% ... JGQ-HZ $2.65 x $2.80

Jeff Bailey : 7/30/2008 3:45:18 PM

YRCW $17.00 +1.79% ... YUX-JC $3.70 x $4.00

Jeff Bailey : 7/30/2008 3:42:59 PM

Credit Suisse (CS) Alert! $51.03 +1.73% ... 0% of its no "naked" short sale emergency rule.

Jeff Bailey : 7/30/2008 3:42:08 PM

Check out you Dow Transports (TRAN) 5,097.89 -0.10% ... turn on that 50-day and know your test time periods. 2-day, or 3-day? Tomorrow we'll find out.

Linda Piazza : 7/30/2008 3:41:41 PM

The OEX has finally pulled free of that resistance and sprinted up to test the 591.53 high of the day, moving just above it as I type. The 15-minute chart shows that it's now in nose bleed territory, so keep your stops updated if in bullish positions.

Jeff Bailey : 7/30/2008 3:39:40 PM

Wish they had an UltraLong

Jeff Bailey : 7/30/2008 3:37:38 PM

ProShares UltraShort FTSE Xinhua China 25 (FXP) $71.88 -5.43% ...

Keene Little : 7/30/2008 3:37:34 PM

Bulls did and pressed this back to new highs. Golf clap from the crowd. It's looking so far like we've got some negative divergences against the highs and that helps confirm it could be the end of the leg up from Monday. If true then we'll get another pullback tomorrow but at least for now the price pattern remains potentially bullish so a pullback would be another opportunity to buy it for a run higher into next week (at least that scenario is still alive).

Jeff Bailey : 7/30/2008 3:36:02 PM

HSBC (HBC) alert! $84.29 +2.39% ... 0% of no "naked" short sale emergency rule.

Jeff Bailey : 7/30/2008 3:35:09 PM

TRINQ 0.92

Jeff Bailey : 7/30/2008 3:34:58 PM

TRIN 0.77

Jeff Bailey : 7/30/2008 3:34:34 PM

NASDAQ a/d 1,433:1,407 ...

Jeff Bailey : 7/30/2008 3:34:16 PM

NYSE a/d 1,877:1,244

Linda Piazza : 7/30/2008 3:32:26 PM

The A/D line is still rising up through the resistance band, but it's not quite free of it yet. Nevertheless, the rise up through the band has accompanied the further rise in the OEX. In truth, though, it's still having difficulty pulling free of that potential resistance that I've been mentioning. It's just tugging it higher along with it, and closing some 15-minute periods above it, some at it, and even some below it. The OEX is climbing, but it's just not looking that strong as it does so, so it's left me in some quandary about the next prediction. I would just urge you to be aware that it's as if it's running forward but has a rope tied to it, and at some point in this current sprint forward, that rope could be stretched to its limit. For now, the potential Keltner target and resistance on 15-minute closes is at 591.82, with the 38.2% retracement of the decline from May at about 591.50. The OEX is 590.01 as I type. Bulls should again be updating their just-in-case profit-protecting plans.

Jeff Bailey : 7/30/2008 3:31:14 PM

SSO $60.88 +2.28% ...

Jeff Bailey : 7/30/2008 3:30:55 PM

SPY $127.68 +1.10% ...

Jeff Bailey : 7/30/2008 3:30:37 PM

Lehman Bros. (LEH) $18.26 +8.06% ... back up to 38.2% of no "naked" short emergency rule.

Linda Piazza : 7/30/2008 3:28:21 PM

Earnings before the open tomorrow include AET, MO, APA, EK, EXPE, XOM, TYC and UTHR, among others. DB may also be reporting before the open, but I don't have a time for its report.

Jeff Bailey : 7/30/2008 3:27:32 PM

That's may be why buyers jammed it yesterday afternoon with very bullish a/d in the final 45. Pros bought the close.

Jeff Bailey : 7/30/2008 3:26:20 PM

Actually, DIA's August "Max Pain" theory tabulation at last night's close was $113.00.

Jeff Bailey : 7/30/2008 3:24:38 PM

DIA $114.80 +0.83% ... session low has been, been $114.03.

Where's that OI. You know where it is.

Linda Piazza : 7/30/2008 3:24:06 PM

I need to step away for a few minutes.

Jeff Bailey : 7/30/2008 3:22:01 PM

Thanks for the reminder Linda!

SBUX $14.55 -2.20% ... SQX-VC $1.45 x $1.48

Jeff Bailey : 7/30/2008 3:19:22 PM

Not as clear as yesterday's final 45-minutes.

Is it?

Jeff Bailey : 7/30/2008 3:19:01 PM

NASDAQ a/d 1,310:1,532

Jeff Bailey : 7/30/2008 3:18:46 PM

NYSE a/d 1,709:1,412

Linda Piazza : 7/30/2008 3:18:45 PM

Earnings after the close today include those from FSLR, FLS, MUR, PRU, SBUX, SYMC, DIS, among others.

Jeff Bailey : 7/30/2008 3:16:05 PM

My 4-week avg. purchases fell to 342.7. My 12-week avg. purchases fell to 347.0.

Jeff Bailey : 7/30/2008 3:12:24 PM

DJUSHB 266.41 -3.64% ...

Linda Piazza : 7/30/2008 3:12:08 PM

What happens tonight with foreign economic releases that can impact your trade, especially if it's tied to currencies? Japan's manufacturing PMI will be released at 7:15 pm ET and a number related to employment costs will be released at 9:30 pm. Housing starts will be released at 1:00 am ET. Tomorrow, Germany's unemployment number will be released at 3:55 am and the important Eurozone Flash CPI will be released at 5:00 am, as will the Eurozone's unemployment rate. That's about it until our economic releases begin rolling in at 8:30 am with the advance GDP. Jane usually covers the U.S. releases.

Jeff Bailey : 7/30/2008 3:11:59 PM

Purchases down ...

Jeff Bailey : 7/30/2008 3:11:36 PM

MBA's Weekly Application Survey Link (Earlier this morning. Link working now.)

Jeff Bailey : 7/30/2008 3:07:08 PM

SPX Heavyweights Link

Keene Little : 7/30/2008 3:06:18 PM

It's up to the bulls now to keep the bounce going off this afternoon's low. If the current bounce fails to make a new high and instead drops below this afternoon's low it will confirm a more bearish price pattern.

Jeff Bailey : 7/30/2008 3:04:36 PM

Very important Bob.

Linda Piazza : 7/30/2008 3:03:24 PM

It might not be certain whether the OEX has truly pulled clear of resistance or not, so I've turned to the A/D line's 15-minute chart. There, it's clear. The A/D line rose to test potentially strong resistance that begins at about 490 and extends up to about 633. The A/D line is currently 456 and it has not yet been able to break above much less sustain 15-minute closes above this resistance zone. It's currently testing it, however, so that could change. For now, however, maintain some slight skepticism about the OEX's break free of resistance.

Linda Piazza : 7/30/2008 2:51:47 PM

The OEX did close that last 15-minute period above the potential reistance now at 587.47, but just barely above it, and the candle was left with a small upper shadow. The OEX is also not yet making much headway in producing gains after this victory of sorts, so I'm not sure that I'd yet be sure that it had pulled free of this potential resistance. Yes, it's above it, but it's not acting convincingly free of that resistance. OEX at 587.87 as I type.

Because of this, I'm not sure how to assess the likelihood that the OEX will climb toward 591.50-591.65, where Fib and Keltner potential resistance now converge.

Jeff Bailey : 7/30/2008 2:43:14 PM

Good gravy! APA $115.75 +7.51% ...

Jeff Bailey : 7/30/2008 2:41:44 PM

Most Actives ... SPY $127.41 +0.89%, SIRI $1.64 +3.79%, IWM $71.31 +0.18%, QQQQ $45.18 -0.35%, UYG $21.86 +2.14%, MER $27.01 +2.89%, BAC $33.22 +3.10%, XLF $21.58 +0.37%, MSFT $26.05 -0.19%, XLE $76.27 +4.16%

Linda Piazza : 7/30/2008 2:40:00 PM

There's now been a 15-minute close for the OEX above the 15-minute 9-ema, but not yet a close above the potential resistance now at about 587.30. It's possible that could still hold on the 15-minute close.

Linda Piazza : 7/30/2008 2:37:40 PM

I was just looking at the monthly chart for the OEX. Tomorrow will be an important day. Currently, the monthly chart is showing a small-bodied candle with a strong spring off support. Now, before the bulls among us get too excited about further bounce potential, we should remember that the OEX as well as some other indices have been zooming around so radically that anything can and may happen by tomorrow's close. If the OEX closes the month anywhere between its current level and, say, 578-579, it will have created a potential reversal signal. (Do remember the "potential" part.) The last time the OEX created such a signal, in March, the distance the OEX moved from the March close into the May high was just over 45 points. With the daily 200-ema now at 630.43 and the 200-sma now at 640.31 but both still sharply descending, it's possible that such a rise, if it happened, would create a retest of those averages.

I don't know that any of this will unfold, of course. Currently, the OEX is having some difficulty with the 38.2% retracement of its slide from the May high, with a number of the March lows, opens and closes in the 592-594 zone, too, so this resistance currently being tested could be significant. So, this isn't something to count on happening, but I do believe we should look at all possibilities, particularly over a summertime trading period, when it's possible to surprise either bears or bulls. So, just keep this on the radar screen as we follow the trading patterns today and tomorrow.

Keene Little : 7/30/2008 2:34:08 PM

The banks (BIX) led to market back down this morning and now with it bouncing back up (+2.4%) perhaps the broader market will follow this afternoon.

Jeff Bailey : 7/30/2008 2:27:19 PM

BAC $32.88 +2.04% ... it backfilled morning gap, but that was it (so far).

Jeff Bailey : 7/30/2008 2:23:57 PM

02:00 Internals found at this Link

Linda Piazza : 7/30/2008 2:22:15 PM

For those trading the SPX and OEX and think that those indices will definitely find support at their gaps this morning, take a look at the RUT's chart. While it's often useful to be watchful of potential gap support, there's no guarantee that it will hold. So far, however, the OEX has resisted falling into its gap and may still avoid doing so, but it's currently still got a potential downside target (and potential Keltner support on 15-minute closes) at 582.94, with the potential to decline to 581.19, if that doesn't hold. Sustained 15-minute closes above the 15-minute 9-ema, now at 585.85, would question that potential downside target. OEX at 585.11.

Linda Piazza : 7/30/2008 2:15:10 PM

The RUT hasn't yet been able to bounce back into positive territory. It's clinging to potential support on 15-minute closes that's now at about 709.80, with the RUT at 709.92. If this support is lost on a 15-minute close, the next potential target is currently at about 706.65 but would likely be a little lower before it could be touched.

Jeff Bailey : 7/30/2008 2:08:33 PM

VXO.X 23.61 +1.76% ... WKLY Pivot here too.

Jeff Bailey : 7/30/2008 2:08:04 PM

OEX 585.26 +0.53% ... "gott'a be thinking backfill" of morning gap, but buyers steady at WKLY Pivot.

Jeff Bailey : 7/30/2008 2:06:40 PM

USO $101.49 +3.51% ... after "prarie dog" of WKLY Pivot.

Keene Little : 7/30/2008 2:05:56 PM

SPX got a little bounce off its uptrend line from Monday but has now dropped below it. It's trying to hold at its daily low but a drop lower will gives today's decline an impulsive look. That would add to the bearishness of today's price action. The bulls can still save it if they drive it back higher from here.

Jeff Bailey : 7/30/2008 2:02:56 PM

SPX Heavyweights live Link

Linda Piazza : 7/30/2008 2:01:25 PM

The potential downside target and support on 15-minute closes for the OEX is now 582.70 and then 581.05. As long as 15-minute closes are beneath the 15-minute 9-ema, now at about 586.20, the OEX remains vulnerable to support tests, although it's not a given that the OEX will drop there.

Jeff Bailey : 7/30/2008 2:00:35 PM

SSO $59.96 +0.73% ...

Jeff Bailey : 7/30/2008 2:00:16 PM

SPY $126.63 +0.27% ...

Jeff Bailey : 7/30/2008 1:59:21 PM

USO alert! 102.10 +4.14% ... above WKLY Pivot.

Jeff Bailey : 7/30/2008 1:58:27 PM

August "Max Pain" Tabulation Link

Note(s): As of 07/25/08 (Column G). SPX and INDU component weightings from 07/28 (Columns A and B). Percentage from (Column H)

Jane Fox : 7/30/2008 1:51:08 PM

The market internal I watch the most is the VIX in comparison to the S&P futures (ES). As you can see they are in sync today Link

Jeff Bailey : 7/30/2008 1:49:42 PM

M, m, mmmm

Jeff Bailey : 7/30/2008 1:48:52 PM

INDU 11,462 +0.56%

SPX 1,269.86 +0.52%

NDX 1,833.69 -0.64%

RUT.X 711.11 -0.48% ...

Jane Fox : 7/30/2008 1:47:10 PM

Linda mentioned that the internals have been all over the map today. These charts show just how much. Link

Jeff Bailey : 7/30/2008 1:46:58 PM

Kraft (KFT) $31.97 +1.62% ... back above 200-day SMA.

Jeff Bailey : 7/30/2008 1:43:26 PM

Brazil strong today.

Jeff Bailey : 7/30/2008 1:43:17 PM

RIO $30.24 +6.59% ...

PBR $56.11 +3.90% ...

Linda Piazza : 7/30/2008 1:41:34 PM

The market's underpinnings have been all over the place today. TRIN is now 0.77, looking vulnerable to 0.69 or perhaps even 0.46. However, the A/D line is barely off a new low of the day of -38. Unless the A/D line can scramble back above about 585, it looks vulnerable to further declines. A declining A/D line and declining TRIN don't usually go together. Volatility measurements have been generally rising, with their tenor more in line with the declining A/D line, but they're currently pulling back to retest support.

Jeff Bailey : 7/30/2008 1:39:59 PM

Baxter (BAX) $68.22 +1.39% ... At World's Alzheimer Conference ... reports positive Alzheimer's drug results.

Jeff Bailey : 7/30/2008 1:38:20 PM

USO $100.89 +2.90% ...

Jeff Bailey : 7/30/2008 1:37:55 PM

Israeli Prime Minister Olmert to Step Down in September

Linda Piazza : 7/30/2008 1:37:33 PM

The OEX needs to climb significantly this afternoon or it risks leaving a concerning candle behind on the daily chart.

Linda Piazza : 7/30/2008 1:36:00 PM

The OEX did not end that 15-minute period referenced in my 1:13:42 post below the potential support but instead bounced back above it. It did not set that lower potential target near 580-582, but now it's challenging the 15-minute 9-ema, now at about 586.50, and it needs to produce and sustain 15-minute closes above that before it significantly lessens the chance that it could still drop, this time toward 581-583, as those support levels have risen. OEX at 586.27 as I type.

Jeff Bailey : 7/30/2008 1:34:30 PM

Forest Labs (FRX) $35.92 -0.22% ... gets some action. Alzheimer's results?

Jeff Bailey : 7/30/2008 1:33:45 PM

Baxter Intl. (BAX) $68.52 +1.75% ... gets some action. Alzheimer's results?

Jeff Bailey : 7/30/2008 1:28:10 PM

VIX.X 21.96 -0.31% ... After test of WKLY S1. WKLY Pivot untested.

Jeff Bailey : 7/30/2008 1:27:37 PM

PBR $56.40 +4.44% ... LONG (2) PMJ-TI $0.05 x $0.20

Jeff Bailey : 7/30/2008 1:26:38 PM

JBLU $5.13 -2.84% ... LONG JGQ-HZ $2.55 x $2.70

Jeff Bailey : 7/30/2008 1:25:10 PM

NAKED put IYS-TO $1.00 x $1.10

Jeff Bailey : 7/30/2008 1:24:25 PM

USO $100.98 +2.99% ... WKLY Pivot $101.70 untested at this point.

Jane Fox : 7/30/2008 1:22:20 PM

Crude is heading back up to its resistance at $130.00 where I plan to sell some of the USO calls I bought this morning. Link

Keene Little : 7/30/2008 1:17:31 PM

SPX came down to its uptrend line from Monday's low, at 1266. If they can hold it above this level there's still a chance for another push higher although the pattern has turned more bearish for the moment. Both sides should stay cautious for the moment.

Linda Piazza : 7/30/2008 1:13:42 PM

Depending on how this 15-minute period ends, the OEX may be losing the potential support on 15-minute closes now at about 585.20. If so, it threatens to set apotential downside target of 582.22 or maybe even 580.79, testing the bottom of this morning's gap higher. OEX at 584.12.

Linda Piazza : 7/30/2008 1:06:34 PM

The OEX is testing potential support on 15-minute closes, now at about 585.20, with the OEX at 585.35 as I type. Bulls would need to see sustained 15-minute closes back above the rounding-over 15-minute 9-ema, now at 586.61, however, before they felt any cheer.

Jeff Bailey : 7/30/2008 1:02:57 PM

SPX Heavyweights Link

Jeff Bailey : 7/30/2008 12:59:22 PM

SPY $126.83 +0.43% ... after kiss of QCharts' WKLY Pivot. See Monday's Market Wrap chart Link

Keene Little : 7/30/2008 12:54:29 PM

Techs in the red, small caps in the red, banks and brokers in the red, transports in the red--I'm quickly shedding my short-term bull horns for my longer-term bear claws again. SPX needs to make a recovery back above 1275 quickly otherwise a continuation lower will start to confirm an important reversal today.

Jeff Bailey : 7/30/2008 12:53:41 PM

BAC $32.14 -0.21% ... actually "prarie dogged" its 0% this morning.

Jeff Bailey : 7/30/2008 12:52:54 PM

Citigroup (C) $18.18 -1.46% ... 50% of no "naked" short emergency rule.

Jeff Bailey : 7/30/2008 12:55:30 PM

Hang Seng ($HSI) (50-point) Link or (100-point) Link ... session Low/High was 22,574/22,751.

HSBC (HBC) $82.70 +0.46% Link

Keene Little : 7/30/2008 12:47:37 PM

I've got to say the price pattern is starting to look more bearish as the pullback now gets larger than I had expected to see. Nothing has been violated yet as far as EW rules but it doesn't look right now for an expectation for a higher move. That means we could be at the start of a strong selloff. If you're long the market I'd be extremely cautious right now. Know where you want your stops.

Jeff Bailey : 7/30/2008 12:46:15 PM

Mizuho Financial (MFG) $10.03 -0.29% Link ...

Linda Piazza : 7/30/2008 12:44:27 PM

Next potential support for the OEX on 15-minute closes might be found at about 584.60. The day's low and open was 583.35, another level of potential support although it certainly didn't serve as support for the RUT, which has just turned slightly negative for the day.

Jeff Bailey : 7/30/2008 12:41:53 PM

Asian Markets Link ... finished Wednesday's trade mostly higher.

Nikkei-225 ($NIKK) Link ... session Low/High was 13,265/13,372. Would chart 3-box reversal up to 13,350.

Linda Piazza : 7/30/2008 12:37:25 PM

The RUT is dropping to test gap support this morning. The RUT opened at 716.50 and dropped a few cents to 716.24 to create the low of the day before climbing. The RUT is currently 716.91. Yesterday's close was 714.29. Bears should be watchful of potential gap support, but bulls should hope that it holds. I do notice that this appears to be the third gap on the RUT's 15-minute chart as it rose from Monday's low. It runs the risk of being an exhaustion gap, then, although that's certainly no given.

Jeff Bailey : 7/30/2008 12:31:05 PM

Disclosure: I currently hold both bullish and bearish positions in FFIV

Jeff Bailey : 7/30/2008 12:30:24 PM

Swing trade short alert! ... for 100 shares of F5 Networks (FFIV) at the bid of $29.62.

Covered by the FLK-JF $2.95 x $3.10

Linda Piazza : 7/30/2008 12:28:26 PM

The RVX has finally caught the mood of the other volatility indices and has bounced. It's the highest its been since the first 15 minutes of the day today. However, the VXO, which has been serving a leading role with the other volatility indices, is now at potentially strong resistance, at about 23.15, with the VXO at 23.15 as I type. Bears want it to keep climbing: bulls, to fall back.

Jeff Bailey : 7/30/2008 12:26:52 PM

Mizuho Financial (MFG) $10.05 -0.09% ... 50% of no "naked" short emergency rule.

Linda Piazza : 7/30/2008 12:25:59 PM

TRIN is sinking to the bottom of the potential S/R zone. The trouble is--so is the A/D line. They should be moving in opposition to each other, not both sinking at the same time. One or the other is wrong, and it's impossible at this time to determine which.

Keene Little : 7/30/2008 12:22:03 PM

While I'm looking for another push higher this afternoon to finish the leg up from Monday's low the risk is that we might not get it. And if we don't then the bounce off Monday's low will be left a 3-wave move which would be considered a correction of the decline from last Wednesday (and not something more bullish for a run higher into next week). That would be very bearish as it would say the next big move will be strong selling to new lows well below the July 15th low.

SPX has stalled at the 78.6% retracement of the decline from last week and as such it was the last line of defense for the bears. That's another warning to bulls here. Without another rally leg, if SPX drops back down below 1254, yesterday afternoon's high, it would confirm the bearish pattern. The two scenarios are shown on the 60-min chart: Link

Linda Piazza : 7/30/2008 12:15:06 PM

As mentioned earlier, the A/D line has potential support in the 500-600 range, and now further potential support has climbed up to 400, so the range must be extended down to 400. Anything can happen in this market environment, including a failure through that support that looks strong or else a bounce from it and a recovery in equities. A/D line at 717 as I type.

Jeff Bailey : 7/30/2008 12:14:16 PM

12:00 Internals found at this Link

Linda Piazza : 7/30/2008 12:13:13 PM

A/D line now 745.

Linda Piazza : 7/30/2008 12:12:45 PM

The BIX tumbled all the way into negative territory this morning, dropping all the way from its 193.31 high to a low of 182.65. It is currently 185.21, but it's now challenging potential resistance on 30-minute closes that's at about 187. The BIX has been finding resistance there on the last two 30-minute closes. Bulls--and that includes OEX, Dow and SPX bulls, too--want to see it find support on 30-minute closes at its 30-minute 9-ema, as that's been supporting its climb since the second 30-minute period yesterday. A failure there would be another sign of a change in tenor. That moving average is now at 184.68.

Linda Piazza : 7/30/2008 12:02:22 PM

TRIN is currently 1.12, down from its day's high, but so far holding support on 15-minute closes at the S/R band from 1.02-1.10. The TRIN has been zooming, so it can zoom down as quickly as it did up a while ago.

Linda Piazza : 7/30/2008 12:00:52 PM

Potential resistance on 15-minute closes for the OEX is at 592.23, but the day's high at 591.53, right at about the 38.2% retracement level of the slide from May into July points to potential resistance lower than that possible target. That's why I noted earlier today that you shouldn't hold out for every cent you'd earn if a potential upside target is hit if the trade suddenly starts going sour and your get-out parameters are met. The possibility of another bounce remains, but the A/D line isn't bouncing again yet.

Keene Little : 7/30/2008 11:58:52 AM

For GLD the pattern of the move down from Monday's high would look best with another small leg down to finish the final 5th wave of its decline from July 15th. That could have it tagging its 200-dma at 87.22. But as I mentioned earlier this should be setting up for a stronger bounce soon.

Jeff Bailey : 7/30/2008 11:56:35 AM

RUT.X's August Option Montage with OI as of last night's close Link

RVX.X 25.60 -3.35% at time of screen capture.

Linda Piazza : 7/30/2008 11:54:14 AM

The OEX's 15-minute 9-ema did hold again on that last 15-minute close. That moving average is now 587.81. The A/D line is attempting a rise now, too, and is currently 968. However, it looks as likely to tumble down toward 500-600 as it does to climb toward 1150-1325. If it does climb, watch for potentially strong resistance on 15-minute closes first at the 1150 zone and then at 1325.

Keene Little : 7/30/2008 11:54:02 AM

The Trannies run the risk of another reversal signal if today's candle finishes like the current daily one. Another kiss of the broken uptrend line from January with a shooting star would be confirmed a reversal candlestick pattern with a down day tomorrow. Heads up for a reversal here but first we'll have to see how today finishes. Link

Jeff Bailey : 7/30/2008 11:50:41 AM

IWM's August "Max Pain" theory value as of last night's close was $70.00.

Linda Piazza : 7/30/2008 11:44:59 AM

I'm noticing that the RVX, the RUT's volatility index, is no longer bouncing as the VXO and VIX have been doing. Hmm. Keep a watch on this. I'm not sure what to make of it, but it may mean that the RUT has the uumph for at least one more bounce attempt, whether such an attempt would get very far or not. Since the RUT tends to employ a leading-index status, all bears and bulls might keep a watch on it because if it bounces, other indices can, too. There's just a divergence here, and I'm not sure what it means.

Keene Little : 7/30/2008 11:44:10 AM

So far the consolidation looks good for another push higher. The only caution about the upside is the lack of participation by the banks (BIX), home builders and Trannies are in the red. These are the sectors that provided some lift the past few days so a retreat in those could start to weigh down the broader market.

Jeff Bailey : 7/30/2008 11:43:10 AM

T $30.98 +0.91% ...

Linda Piazza : 7/30/2008 11:41:46 AM

TRIN now 1.31.

Jeff Bailey : 7/30/2008 11:39:26 AM

SPX Heavyweights (weightings at 07/28/08 open) Link

Linda Piazza : 7/30/2008 11:36:53 AM

The OEX's 15-minute 9-ema is now 587.85. The OEX bounced from this moving average the last 15-minute period, but I'm not sure that it will continue to hold as support on 15-minute closes, as bulls hope it will. Some developments on the A/D line's Keltner chart suggest that it may have difficulty rising too far again. It's 1006 as I type and may find resistance near 1275 if it attempt to rise again.

Linda Piazza : 7/30/2008 11:28:16 AM

The OEX's five-minute chart shows a little H&S at the top of its climb. A five-minute close beneath about 587.40 would appear to confirm that formation, but that's also potential support. If that support is lost and five-minute closes beneath it are sustained, the OEX might drop to 584.80-585.40, or at least that's what the five-minute chart suggests. OEX bulls would prefer that the OEX invalidate that formation by climbing to a new high or at least above 590 again.

Linda Piazza : 7/30/2008 11:22:06 AM

TRIN still rising. It's 1.09, about to test potential resistance on 15-minute closes now at 1.11.

Jeff Bailey : 7/30/2008 11:22:12 AM

Elan, Wyeth plunge as Alzheimer's drug disappoints ... Reuters Story Link

WYE $40.09 -11.12% Link

ELN $21.96 -35.02% Link

Jeff Bailey : 7/30/2008 11:08:01 AM

Wyeth (WYE) $40.29 -10.66% ... notably weak this morning.

Jane Fox : 7/30/2008 11:07:05 AM

I think now is the time to buy some USO calls. Link

Jeff Bailey : 7/30/2008 11:05:16 AM

CRB Index (CEC:CRY) 409.09 -0.59% (30-minute delayed) ... consolidating at the upward trend. Chart from Wednesday's Market Wrap Link

Jane Fox : 7/30/2008 11:04:56 AM

SAN FRANCISCO (MarketWatch) - U.S. crude inventories fell less than expected, down 100,000 barrels to 295.2 million barrels in the week ending July 25, the U.S. Energy Information Administration reported on Wednesday. Analysts surveyed by energy information provider Platts expected a drop of 1.3 million barrels. After the data, crude-oil futures for September delivery pared losses, falling 10 cents, or 0.1%, to $122.09 a barrel on the New York Mercantile Exchange. Crude was down nearly 1% before the data. Gasoline supplies fell by 3.5 million barrels in the latest week, and distillate stocks gained by 2.4 million barrels, the EIA reported.

Jeff Bailey : 7/30/2008 11:03:22 AM

SLV $16.91 -1.62% ...

Jeff Bailey : 7/30/2008 11:03:09 AM

GLD $88.75 -2.03% (~887.50 spot)

Jeff Bailey : 7/30/2008 11:02:38 AM

US Dollar Index (DXY) 73.46 +0.23% (30-minute delayed) ...

Jeff Bailey : 7/30/2008 11:01:50 AM

US Government announces plan to borrow $27 billion ... AP Story Link

Jeff Bailey : 7/30/2008 11:00:46 AM

Private sector gains 9,000 jobs in July ... Reuters Story Link

Jeff Bailey : 7/30/2008 10:59:47 AM

President Bush signs housing bill ... AP Story Link

Linda Piazza : 7/30/2008 10:58:11 AM

Volatility indices I've checked--VIX, VXO and RVX--have been attempting to stabilize and bounce. Whether or not they'll be successful is not known yet, but keep a watch on them. The TRIN has just made it above the 15-minute 9-ema, closing a 15-minute period above it and perhaps going to close a second above it, for the first time since early yesterday.

Jeff Bailey : 7/30/2008 10:54:47 AM

DJUSHB 282.20 +2.06% ...

Jeff Bailey : 7/30/2008 10:54:24 AM

At this time, I've been unable to access MBA's weekly application survey. (MBA links not working).

Jeff Bailey : 7/30/2008 10:51:40 AM

MBA: saying its surveys show consumers originating mortgages showed preference for fixed rate over adjustable rate products.

Keene Little : 7/30/2008 10:49:04 AM

Ideally what the bulls want to see now is a brief consolidation near the high which should then be followed by another push higher. Possibly a test of last Wednesday's high at SPX 1291 would be the target. Assuming we'll get that the next move will be a deeper pullback to correct the rally from Monday so it would be a shorting opportunity for a trade. That could take us into tomorrow/Friday and be a setup for another rally next week.

Jeff Bailey : 7/30/2008 10:47:26 AM

Mexico's Pemex: Oil output to close 2008 at 2.8M B/D

Jeff Bailey : 7/30/2008 10:44:07 AM

UGA $55.69 +0.14% ...

Jeff Bailey : 7/30/2008 10:43:40 AM

USO $99.10 +1.08% ...

Linda Piazza : 7/30/2008 10:43:12 AM

TED spread now 1.11.

Jeff Bailey : 7/30/2008 10:42:34 AM

Fed extends emergency loan programs ... AP Story Link

Jeff Bailey : 7/30/2008 10:39:27 AM

EIA: US Refineries ran at 87.2% capacity.

Jeff Bailey : 7/30/2008 10:38:48 AM

EIA: US Total Distillate Stockpiles +2.4M barrels.

Jeff Bailey : 7/30/2008 10:38:19 AM

EIA: US Total Gasoline stockpiles -3.5M barrels.

Jeff Bailey : 7/30/2008 10:37:46 AM

EIA: Weekly Crude Oil stockpiles -100,000 barrels

Jeff Bailey : 7/30/2008 10:35:28 AM

XOM $81.365 +0.55%
CVX $84.15 +1.58%
COP $80.94 +0.83%
SLB $97.21 +1.01%
OXY $76.99 +1.36%

Jeff Bailey : 7/30/2008 10:33:15 AM

UGA $55.69 +0.14% ...

Jeff Bailey : 7/30/2008 10:33:01 AM

USO $97.69 -0.35% ...

Linda Piazza : 7/30/2008 10:30:27 AM

I'm still watching the TRIN. It's still being pressured by the 15-minute 9-ema, with closes continuing to be below that moving average. That's what bulls want to see. However, it's not dropping down away from that, continuing to test it, and that's not what bulls want. If it should start producing 15-minute close above that moving average, now at 0.81, bulls should be warned to pay special attention to their profit-protecting plans, but then the TRIN will run into significant resistance from 0.97-1.10.

Linda Piazza : 7/30/2008 10:23:36 AM

The TED spread is currently 1.07. Most of yesterday, it chopped around between 1.06 and 1.09. Today's low has been 1.05 and the high, 1.09.

Linda Piazza : 7/30/2008 10:22:37 AM

Potential upside target and potential resistance on 15-minute closes for the OEX is now 592.46, so keep updating those just-in-case profit-protecting plans as the OEX approaches the potential target. Don't insist on collecting each cent that would come to you if that target was hit if the setup appears to change. Your task is relatively easy if in those bullish positions as you have only to keep inching those stops up and to decide the points at which you want to start locking in partial profits.

Do be aware that a 38.2% retracement of the slide from the May high to the July low is being tested, with that at about 591.50.

Jeff Bailey : 7/30/2008 10:22:07 AM

Swing trade long raise stop alert! ... for the 1/8 position in the ProShares Ultra S&P500 (SSO) $61.14 +2.72% Link ... to $55.80 (from $53.00).

Jeff Bailey : 7/30/2008 10:18:24 AM

10:00 Internals found at this Link

Linda Piazza : 7/30/2008 10:12:38 AM

The TRIN's 15-minute 9-ema did hold as resistance on that last 15-minute close, but the TRIN is still testing that average. TRIN at 0.80.

Linda Piazza : 7/30/2008 10:11:26 AM

From Friday through Monday, the OEX had been setting up a little inverse or reverse head-and-shoulders formation. Yesterday about midmorning I began warning that the OEX might chop around for a number of hours in a tight pattern, thinking that chopping period might even extend into a couple of hours this morning. Of course it didn't, but it was through recognizing the possibility for this type of formation to set up that I warned of the possibility of the hours of chop that did begin yesterday. When the OEX climbed as high as it did late yesterday, it confirmed the formation although the right shoulder was truncated and I posted that the possibility of consolidation that extended into this morning was in doubt.

So, all this is in prelude to telling you that the upside target of that formation was somewhere around 589-590, depending on how one drew the neckline. That's another reason to update your just-in-case profit-protecting plans if in bullish positions.

Linda Piazza : 7/30/2008 10:07:25 AM

The OEX could still be aiming for that next upside target, now at 592.39, but we know from the previous weeks that the 587-589 level is one of historical S/R, too. It's time for bulls to update their just-in-case profit-protecting plans, if they haven't already done so.

Jane Fox : 7/30/2008 9:57:58 AM

Take note of the AD volume (middle chart). This is the kind of trajectory that should put the bears on the defensive and get them quaking in their boots. Link

Linda Piazza : 7/30/2008 9:57:22 AM

The TRIN hit potential support now at 0.60 on 15-minute closes this morning and has been rising ever since. It's now risen into a test of the 15-minute 9-ema. This is an average from which it bounced most of Monday and which pressured it lower most of yesterday, so equity bulls want to see the TRIN find resistance there again on 15-minute closes, just as it did yesterday. That average is now about 0.85 with the TRIN currently 0.80.

Jane Fox : 7/30/2008 9:49:58 AM

Egads the AD line is a very healthy +1311.

Keene Little : 7/30/2008 9:49:42 AM

SPX and DOW are running up past the price projections for two equal legs up from Monday's low (1273, 11510) so that now raises the probability for the move higher into next week. I would not be trying to short the market right now. Look for pullbacks to try the long side.

Gold has now dropped down to the 200-dma and is just above its uptrend line from August. Note though that GLD's 200-dma is still about a dollar below its current price (87.18 vs. its current price of 88.14) so it could have a little further to drop. However, the risk is now on the short side as we should be seeing support soon.

Linda Piazza : 7/30/2008 9:47:49 AM

So far, the OEX is holding over potential resistance on 30-minute closes now at 584.84 and is holding well above it. The next upside target on the short-term charts is 592.46. This is also potential resistance on 15-minute closes. The OEX is now 589.28.

Linda Piazza : 7/30/2008 9:41:30 AM

RUT bulls need to remain watchful of the RVX this morning, especially if it should approach the rising trendline that's been bouncing it: Link

Linda Piazza : 7/30/2008 9:35:48 AM

I'm back. The OEX has run up past the potential resistance on 30-minute closes now at 584.60. Remember that the first 30-minute period is far from over, so retain some skepticism about the first runup, as it can still be reversed. OEX at 587.03 as I type.

Keene Little : 7/30/2008 9:05:39 AM

Gold update: For anyone following my suggestion to short gold near its July high, it's time to think about covering your trade. As shown on the daily chart for the gold contract (emini, YG, August), this morning's decline looks like the 5th wave down from July's high: Link . At the same time it's approaching its 200-dma near 896. Once a 5-wave move completes we'll see a correction and gold will likely bounce back up to at least the 917-918 area.

If you're trading the ETF, GLD, you obviously don't need to worry about expiration. If you're trading the emini, the August contract first notice date is today so I'll be switching to the December contract. In either case consider a counter-trend long play off the 200-dma. I say counter-trend because the 5-wave move down says the trend has now changed to the downside. Once a bounce to correct the decline from July's high is complete we'll get another leg down.

Jane Fox : 7/30/2008 9:05:28 AM

Yesterday I suggested going long Crude (I use the ETF USO for these longer term positions) but I have decided to wait until after the crude report today just in case it is really good and Crude falls past yesterday's low. Once the report is out I will reevaluate. Link

Jane Fox : 7/30/2008 8:57:03 AM

LONDON (MarketWatch) -- The Securities and Exchange Commission has extended an order designed to prevent so-called naked short selling in stocks of major financial companies, including mortgage giants Freddie Mac and Fannie Mae, for another two weeks.

The extension was announced by the federal agency late Tuesday. Originally a 10-day emergency order set to expire July 31, it now will run through Aug. 12 and won't be extended further, the SEC said.

Short sellers make money by borrowing stock they expect to fall in value, selling it, and then buying it back at a lower price, pocketing the difference.

Naked shorting occurs when traders haven't actually borrowed the shares they sell.

The extended rule requires any trader seeking to short the stocks to arrange to borrow the shares in advance of the sale.

Jane Fox : 7/30/2008 8:55:31 AM

Fed says steps to enhance liquidity operations

Fed to sell auction options on credit for quarter-end stress

Fed to sell 84-day credit to banks in addition to 28-day

Fed extends loans to broker-dealers through Jan. 2009

Jane Fox : 7/30/2008 8:52:15 AM

Here are your overnight charts and as you could have guessed they are bullish. Link

Tab Gilles : 7/30/2008 8:48:36 AM

USO The $100 level /100-ma doesn't look as it will hold this pivotal level. Next retracement levels are $94 and $88. Link

As oil continues to decline the dollar should rally. Link

If Europe's economy is weakening...will the Euro finally break its trend or is this just a pause? Link

Jane Fox : 7/30/2008 8:47:08 AM

. The only report left for traders to look forward to is the Crude report. If you are Crude trader then that is a biggy but if not I have not seen it move the stock market too much unless there is a huge discrepancy between the consensus and the actual numbers.

Keene Little : 7/30/2008 8:47:07 AM

It looks like we'll have a bullish start to the day with equity futures up. That raises the probability that we'll see SPX head up to at least the 1273 level. A turn back down from there would be potentially very bearish as it could be the completion of the correction of the decline from last Wednesday. From an EW (Elliott Wave) perspective it would be a setup for a 3rd of a 3rd wave down and that would call for some seriously strong selling into next week. So watch for a short play to set up this morning if we get a quick flash to the upside that then fails to hold.

But as mentioned last night, any rally above 1273 (DOW 11510) would look more bullish and I'd be looking to buy the dips from there (since we'd be looking at a higher probability for a rally above last Wednesday's highs into next week). Looking at the RUT gives me the strong impression that that's what we're going to see so play it carefully if you're going to try shorting this morning's bounce.

Jane Fox : 7/30/2008 8:44:02 AM

WASHINGTON (MarketWatch) -- U.S. private-sector employment rose by 9,000 in July, according to the ADP employment index released Wednesday.

Adding in some 20,000 government workers typically hired in a given month, the ADP index suggests U.S. nonfarm payrolls rose by about 30,000 in July. The government will release its report on Friday, with economists expecting a loss of 70,000. The ADP index fell a revised 77,000 in June.

The 9,000-job gain was much stronger than the 55,000 loss expected by economists surveyed by MarketWatch.

In recent months, the ADP report has overstated job growth compared with the government data. Manufacturing employment fell by 49,000, and construction employment fell 16,000. Since the peak in 2006, construction jobs have fallen by 350,000

Linda Piazza : 7/30/2008 8:35:02 AM

I probably won't be here for the open this morning but will return a few minutes later. With one day's big losses being reversed a day or two later and with the same happening with one day's big gains, it's clear that there's some emotion-based trading going on, with bulls and bears both being quick to throw in the towel. Days that should normally be consolidation days are instead sometimes big reversal days.

Consider the possibility that the OEX may be hammering out some kind of flag, wedge or triangle that will become clear in a few days to a week, and we can then take our clues from that.

For now, the 30-minute chart left off yesterday with a possible upside target at 584.27, where next resistance might be found. If the OEX then pulls back from that level or if it drops immediately, bulls want to see 579-580 hold as support on 15- and 30-minute closes.

See you soon.

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