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Jeff Bailey : 8/1/2008 1:23:08 AM

Cross Rates @ 01:17:33 AM EDT Link

Jeff Bailey : 8/1/2008 1:16:06 AM

Global Currencies @ 01:10:33 AM EDT Link

Jeff Bailey : 8/1/2008 1:09:42 AM

YM 13,343

Jeff Bailey : 8/1/2008 1:07:59 AM

Nikkei-225 ($NIKK) down 292, or -2.19% at 13,804.

Jeff Bailey : 8/1/2008 1:07:09 AM

Seeing headlines crossing wire that Japan cabinet resignings en masse.

Jeff Bailey : 8/1/2008 12:32:58 AM

Beetle's Balanced Benchmark (BBB) Link

Top is Year to Date: various asset classes (US Cash, Fixed Income "safe" to "riskiest", Equities, Various Commodities)

Bottom is Month to Date, or Q3 to date.

As you browse some of the earnings press releases, you can see what many CEOs and CFOs point to as input pressures. Some hedge and benefit (one-time gain), some don't (one-time charge). Some hedges have moved against (special charge).

Note that I started with $1,000.00 equally distributed among seventeen (17) assets in upper benchmark.

At end of each quarter, the BBB was "rebalanced" and Total Value was redistributed evenly among the seventeen (17) asset classes. Rebalancing of any portfolio forces an investor to "sell high" or what is proportionately overweight and "buy low" what is proportionately underweight.

Jeff Bailey : 7/31/2008 10:40:44 PM

Closed out July MM Profiled Trades at this Link

A lot of work to do in August. TSO-HI, RIO-HK and BAC-TS are way out the money. Eleven (11) trading days until August Op-Ex.

SPX was down 1.0% in July.

Jeff Bailey : 7/31/2008 10:16:18 PM

Last two (2) MNTHLY Pivot Matrix and August at this Link

Last week I think it was, maybe week before I commented on "stop placement." Note some SPY .03 and .04.

In June, SPY traded a HIGH of $140.89, which would have been $0.20 ABOVE MONTHLY Pivot.

Once a level is traded, the computer turns on and it may take a few minutes to provide the liqudity.

If buying strength and selling weakness, just taking some notes.

OI Technical Staff : 7/31/2008 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The Market Monitor has been archived.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.

Jeff Bailey : 7/31/2008 9:48:29 PM

Could be the Sep 1,250 Put (SZP-UJ) and Dec 1,250 Put (SZP-XJ). Quite a bit of put buying in SPX today. Link

Jeff Bailey : 7/31/2008 9:36:42 PM

By a wide margin ... SPY Aug. $128 Call (SPY-HX) most active in my QCharts option chain at 105,122 . UpTick Vol 5,519 and DnTickVol 1,322.

That looks a little "fishy" as it should be other way around with VIX.X up.

Better check SPX.

Note that SPY's WKLY R1 $128.00 and I noted today some WKLY R1 selling/resistance.

Jeff Bailey : 7/31/2008 9:30:43 PM

VIX.X 22.94 +8.15% ... closed above July's MNTHLY Pivot and QRTRLY Pivot.

Likely some protection in front of tomorrow's job report.

Jeff Bailey : 7/31/2008 9:17:31 PM

Don't track biotech in pivots (only so much one can do), but just about every penny that came out of Semiconductors may have gone into biotech.

Jeff Bailey : 7/31/2008 9:15:15 PM

QQQQ ... $46.12 on 07/02/08 and again this morning.

Jeff Bailey : 7/31/2008 9:14:25 PM

OEX slightly different monthly high dates the its broader SPX.

Jeff Bailey : 7/31/2008 9:04:25 PM

10-year bond's yield unchanged for the month.

Jeff Bailey : 7/31/2008 8:58:52 PM

Mojor Global Indexes, Currencies, Oil, Gold and $HUI.X Link

Jeff Bailey : 7/31/2008 8:45:41 PM

Closing Internals at this Link

Jeff Bailey : 7/31/2008 8:40:12 PM

BB stocks NH/NL unusually strong 169/280

Jeff Bailey : 7/31/2008 8:38:34 PM

Almost an exact match of NH/NL as yesterday at the big board and the NASDAQ. Still rather heavy at the "tail" relative to late March.

Jeff Bailey : 7/31/2008 8:30:18 PM

Quite a few big blocks in various individual stock in this evening's extended.

KFT 4.07 and 1.75 million at $31.82.

Turn the calendar as they're all squared up.

Jeff Bailey : 7/31/2008 8:24:03 PM

Most Actives ... SPY $126.83 -1.32%, WM $5.33 +12.44%, QQQQ $45.46 -0.24%, XLF $21.59 -1.09%, SIRI $1.60 -3.03%, WB $17.27 +1.11%, MOT $8.64 +12.50%, IWM $71.32 -0.40%, C $18.69 +1.08%, KFT $31.82 -0.59%

Jeff Bailey : 7/31/2008 5:41:44 PM

Closing U.S. Market Watch at this Link

5-dayNet% should be correct from 07/25/08 closes.

Jeff Bailey : 7/31/2008 5:04:49 PM

BOOM $30.37 now ...

Jeff Bailey : 7/31/2008 4:53:28 PM

Wilshire 5000 (DWC) 12,946.89 -1.18% ...

Jeff Bailey : 7/31/2008 4:48:34 PM

USO $100.10 -1.98%
UGA $56.73 -2.50%
UNG $42.44 -2.18%

Jeff Bailey : 7/31/2008 4:46:55 PM

FXE $156.54 +0.17%
FXY $92.42
FXB $199.01

Jeff Bailey : 7/31/2008 4:46:02 PM

DXY's 04:00 tick was 73.216

Jeff Bailey : 7/31/2008 4:39:40 PM

One day left ... BOOM's WKLY are $27.67, Piv= $31.17 $33.35 (check it out), $34.67.

Jeff Bailey : 7/31/2008 4:37:09 PM

BOOM's Aug MNTHLY are $25.10, $28.98, Piv= $31.34, $35.22, $37.58.

Jeff Bailey : 7/31/2008 4:35:17 PM

BOOM $28.88 ... extended low/high has been $26.50/$34.50

Jeff Bailey : 7/31/2008 4:33:18 PM

Imp. vol on the QCB-HG was 0.6273

Imp. vol on the QCB-TG was 0.67

Jeff Bailey : 7/31/2008 4:26:51 PM

BOOM $32.87 -0.18% ... plunging to $27.25.

Jeff Bailey : 7/31/2008 4:25:23 PM

Dow Transports (TRAN) 5,071.91 -0.45% ... does manage to close juuuuuust above its 50-day SMA (5,066.664) for a third-straight session.

Jeff Bailey : 7/31/2008 4:20:42 PM

European Markets (closes) Link

Jeff Bailey : 7/31/2008 4:11:57 PM

BOOM ticks higher at $34.45

Jeff Bailey : 7/31/2008 4:10:45 PM

Dynamic Materials (BOOM) $32.87 -0.18% ... Earnings Press Release Link

Linda Piazza : 7/31/2008 4:04:42 PM

Important earnings before the open tomorrow include CVX, JAVA, and NT.

Keene Little : 7/31/2008 4:03:58 PM

With the quick drop down it's looking like SPX will have a little more to the downside to complete a 5-wave count for the 2nd leg down. That could mean a brief consolidation at tomorrow's open, a quick low and then a reversal into a strong rally. That's the bullish setup. If we instead see a new low followed by a longer choppy consolidation, similar to this afternoon's, it will be bearish and it could be longer-term bearish.

But we'll see how it plays out in the morning before making that determination. There will be another good opportunity to get yourself on the short side of the market if the longer-term bearish scenario looks like it will play out so no need to rush things here. Stay patient and hold your fire.

Linda Piazza : 7/31/2008 4:03:14 PM

Important earnings after the close include KLAC's.

Jeff Bailey : 7/31/2008 4:02:39 PM

E-mail question(s) ... regarding "heavyweight" benchmarks.

Yes, I will post both SPX "heavyweight" and the DIA weightings for EOM benchmarks.

Linda Piazza : 7/31/2008 4:01:03 PM

Bears feeling too gleeful right now should be aware that the OEX appears to be ending the day on the converging 10- and 30-sma's on the daily chart. Assess that potential support with important numbers tomorrow as you make your end-of-day decisions.

Linda Piazza : 7/31/2008 3:59:04 PM

This morning, I noted that if the OEX should approach the 583-584-ish zone, that bears should be watchful for bounce potential. They still should, although one of the parameters that suggested that bounce potential is now iffier than it was this morning. There is, however, potentially significant support on 15-minute close at 583.30. That's not going to help a bit if bulls are panicked to exit, of course. As I noted this morning, now that the OEX has dropped to this support, I would watch carefully for rollover potential if it should rise into the 587-589 zone again.

Sigh. We've had another day when the previous day's move was totally or almost totally reversed. As I have certainly been warning lately, you can't trust anything when this kind of action is happening. How many bulls were convinced by that last swing higher yesterday that turned a doji day into a strong bullish candle that the downturns were over? I don't know about you, but I wouldn't be carrying risk I didn't feel comfortable carrying home with me any night, be it bullish or bearish risk. I'm not saying not to ever have any risk overnight. I certainly do, but only what I feel comfortable carrying. I'm aware that any given morning, I could wake up and something could have changed that could wipe out some of my positions. I hope it won't happen, but if it does, I'll still have a trading account.

Linda Piazza : 7/31/2008 3:53:59 PM

What happens overnight in foreign markets that could impact your futures and/or currency trades? Germany's retail sales will be important, and those are released at 2:00 am ET. The Eurozone's PMI comes out at 4:00 am ET, and the U.K.'s Manufacturing PMI at 4:30 am. And then we come to the U.S.'s non-farm payrolls. As I just noted, almost nothing is going to trump that, so watch your futures and currency trades overnight but realize that they could turn on a dime as they did this morning. Jane often covers the U.S. releases, but I'll say just briefly that the non-farm payrolls is out at 8:30 am ET and then other important numbers such as the ISM Manufacturing number will be out at 10:00 am ET. Hold onto your hats tomorrow.

Jeff Bailey : 7/31/2008 3:52:35 PM

OK ... BOOM strangle traders.

COST basis for trade about $250.00 (if 1 contract each).

If we get a $4 move up/down from $32.50, be ready to trade PARTIAL in extended.

Keene Little : 7/31/2008 3:49:58 PM

The 60-min chart shows price did not quite make it up to the downtrend line from May 19th whereas the daily chart shows a closer hit. As long as price chops lower and looks to be consolidating beneath it we can expect a break of that downtrend line. Otherwise it's resistance and a warning to bulls for now (the trend is down and it's a bear's friend). Link

Linda Piazza : 7/31/2008 3:49:43 PM

I'm about to research what happens overnight on foreign markets, but you should be aware that almost nothing is going to trump the non-farm payrolls tomorrow.

Jeff Bailey : 7/31/2008 3:46:28 PM

USO $100.07 -2.01% ...

SPY $127.07 -1.12% ...

Keene Little : 7/31/2008 3:46:02 PM

There's not much of a change to the SPX 60-min chart as far as expectations from here. We're seeing the next leg down for today's pullback and two equal legs down is at 1269.25. The 2nd leg would achieve 162% of the 1st leg at 1260.90. A 38% retracement of the rally from Monday is in the middle at 1265.73 and a 50% retracement is at 1259.80 so we've got some Fib levels to watch for potential support with the 1260 area holding the most potential right now. The pink wave count is for a renewed rally into next week but the possibility remains for us to be at the start of a more serious decline so that's why I continue to caution longs. 60-min chart update: Link

Jeff Bailey : 7/31/2008 3:41:36 PM

Pivot might tie with SPY's 60-min interval 150-pd SMA.

Jeff Bailey : 7/31/2008 3:39:09 PM

OK, can observe overlap at QS1 and M S1.

Jeff Bailey : 7/31/2008 3:36:36 PM

Mar, April, May MONTHLY Pivot action and tests. Link

Linda Piazza : 7/31/2008 3:36:21 PM

If that's a rising wedge that the OEX began forming as it consolidated after the first high yesterday, then the OEX is testing the supporting trendline, with that trendline converging with potential support on 15-minute closes now 587.66. The OEX is dropping below it as I type, but there are lots of minutes in this 15-minute period. Too, it's important that this may not be a rising wedge. If it is in fact a regular old rising price channel, the OEX may just be dipping down to test a lower trendline that would then be drawn parallel to the upper one, and that would cross just above 586. The OEX has been narrowing that channel into a wedge shape, but it's important to keep all possibilities in mind. So, we know that the OEX is testing, but we don't know the outcome yet.

Jeff Bailey : 7/31/2008 3:35:00 PM

Need to run SMH, BIX.X, TNX and DXY don't I?

Linda Piazza : 7/31/2008 3:31:53 PM

To get an intraday but rough estimate of where markets think the Fed's target rate will be after the August meetings, the August 30-Day Federal Funds can be checked. They are currently quoted at 97.985 according to CME Group. Subtracting that from 100 gives a value of 2.015, so traders are guessing that the Fed target rate will be rather closer to 2.00% than to 2.25%, fitting with the Cleveland Fed's guestimate that there's about a 90% chance of a 2.00% rate (or no change) as the outcome of that meeting next week. I don't know how accurate these guestimates are but just know that they're methods some use to watch the predictions. Of course, they're all coming before tomorrow's Non-Farm Payrolls and that could change everything.

Jeff Bailey : 7/31/2008 3:30:32 PM

SPY $127.74 -0.61% ... should the SPY go out here, August MNTHLY Pivots ... $116.53, $122.14, Piv= 125.64, $131.25, $134.75.

Last time SPY started a new month out ABOVE new MNTHLY Pivot was for April.

Linda Piazza : 7/31/2008 3:24:56 PM

Want to know what the Cleve Fed estimates as the outcome of the August FOMC meeting? Here's a chart showing the implied probabilities for various outcomes, from a 1.75% to 2.75% rate as the outcome, with the 2.00% rate getting the highest ranking by far: Link The Cleveland Fed updates this prediction only once each day, and this prediction was as of yesterday so doesn't include any changes as a result of today's numbers.

Jeff Bailey : 7/31/2008 3:23:16 PM

WM $5.27 +11.18% ... check it out with WKLY Pivot levels turned on.

Keene Little : 7/31/2008 3:21:50 PM

The DOW is down -103 (-0.9%) while the Nasdaq is up +12.50 (+0.5%). Talk about a bifurcated market! This is never a healthy sign for the market in general.

Jeff Bailey : 7/31/2008 3:20:35 PM

BOOM $33.16 +0.69% Link ... should BOOM go at at $33.00 on the 04:00 tick ... August MNTHLY Pivots would be ... $25.14, $29.07, Piv= $31.38, $35.31, $37.62.

Jeff Bailey : 7/31/2008 3:11:52 PM

QQQQ $45.91 +0.74% ...

Jeff Bailey : 7/31/2008 3:11:48 PM

DIA $114.80 -0.88% ...

Jeff Bailey : 7/31/2008 3:11:43 PM

SPY $128.04 -0.38% ...

Jeff Bailey : 7/31/2008 3:11:37 PM

"Strangle" strategy I might add ... good strategy for those that observe one thing, but believe the opposite of what they observe.

Jeff Bailey : 7/31/2008 2:59:58 PM

BOOM $33.03 +0.30% ... 54-minutes to close.

Jeff Bailey : 7/31/2008 2:58:42 PM

General Motors (GM) ... GMAC to raise wholesale financing rates Sep. 1.

Keene Little : 7/31/2008 2:58:30 PM

Market continues to hold up but the pattern of the bounce off the mid-day lows is choppy and corrective looking. That continues to suggest we'll get another leg down so watch for a trendline break from the mid-day low to let you know when it has started down.

Jeff Bailey : 7/31/2008 2:56:43 PM

Imperial Oil (IMO) $50.10 -0.61% ... Earnings Press Release Link

Linda Piazza : 7/31/2008 2:54:34 PM

Those who are trading the RUT (I'm in some condors and/or credit spreads on the RUT, but not otherwise trading it) should be aware that the RUT is again poking up just above the weekly 200-sma, with that now at 716.53. It should be noted that it's possible that moving average will hold or nearly hold as resistance on the weekly close. Bulls would prefer a strong close above it, not a drop anywhere toward or below that level by the end of the day. Be aware, too, though, that the daily version is now at 726.59 with the daily 200-ema just above that, so that the RUT has not cleared all important resistance even if it closes above the weekly version. This is a way of saying that the RUT is likely to close this week at or under one or the other and maybe under both, so make decisions soon about whether you want to hold onto your positions, whether bullish or bearish, through the weekend. Remember the FOMC meeting on 8/5, remembering also that small caps can be particularly sensitive to interest-rate changes. RUT at 719.79 as I type.

Jeff Bailey : 7/31/2008 2:50:11 PM

Washington Mutual (WM) $5.70 +20.04% ... Toscafund reports 6% stake.

Linda Piazza : 7/31/2008 2:47:33 PM

The RUT is now at and maybe a few cents above the descending trendline off the 7/23 high. It's got potential resistance on 15-minute closes at about 721.15, so be careful here of the possibility of a pop above that resistance that is then reversed. RUT at 720.40 as I type.

Linda Piazza : 7/31/2008 2:45:35 PM

If the OEX continues climbing, it has potential resistance on 15-minute closes at 593.28-594.05. The higher level closely corresponds with the rising wedge's upper trendline, if that's what the formation is. It also closely corresponds to the former supporting trendline off Monday's low, a trendline the OEX held until about 11:30 this morning. So, a retest of that zone could be a kiss-goodbye test. Bulls should be aware that it's possible that the OEX could approach that zone but not quite reach it, as I'm sure I'm not the only person who can draw trendlines and see where resistance might lie. I might be the only other person using Keltner channels (smile), but I'm not the only one drawing trendlines.

Jeff Bailey : 7/31/2008 2:44:18 PM

SSO $61.32 -0.59% ...

Jeff Bailey : 7/31/2008 2:43:03 PM

Could be some "Anti Cs" too. Calling it quits.

Jeff Bailey : 7/31/2008 2:42:18 PM

SPY $128.01 -0.40% ... That you Jimm C? Pressing WKLY R1 again.

Jeff Bailey : 7/31/2008 2:35:44 PM

$5.24 was your 38.2% no "naked" short emergeny rule retracement.

Jeff Bailey : 7/31/2008 2:34:36 PM

Washington Mutual (WM) alert! $5.50 +16.03%

Jeff Bailey : 7/31/2008 2:33:49 PM

After the Bell Earnings "strangle" Alert! ... Right now, shares of Dynamic Materials (BOOM) $32.63 -0.91% ... pretty much between $30 and $35 strikes.

They report after the bell, and CEO has said for two quarters that "second half" should ramp. You've seen the NEGATIVE action of last two earnings reports.

I think tonight's earning GUIDANCE is going to be HUGE decision for investors. I think its "all in" or "all out."

STRANGLE trade just wants action.

BUY LONG one (1) of the Aug. $30 Puts (QCB-TF) at the offer of $1.25 ($1.15 x $1.25) and one (1) of the Aug. $35 Calls (QCB-HG) at the offer of $1.25 ($1.10 x $1.25)

Linda Piazza : 7/31/2008 2:20:35 PM

Unlike the RUT, the OEX has not set up into a triangle with a top trendline forming off yesterday's high. Instead, the OEX appears to be setting up either a regular rising price channel or a rising wedge, which has a more negative connotation. There's a hint of narrowing that suggests the wedge, but if you're going to make market decisions on "hints" these days, the market is going to be glad to take your money from you. Not even premium setups are fulfilled.

Jeff Bailey : 7/31/2008 2:19:54 PM

02:00 Internals found at this Link

Linda Piazza : 7/31/2008 2:18:19 PM

The RUT turned down sharply before it even touched the descending trendline off the 7/23 high. The RUT is churning inside a triangle that began setting up with the early morning high yesterday, so it's not giving us a lot of guidance as to the direction the markets might take.

Keene Little : 7/31/2008 1:59:18 PM

As time progresses, the broken uptrend line for SPX could coincide with another test of yesterday's and today's highs a little later this afternoon. If it's met with more bearish divergences it will be a good setup for a short play. I'm not seeing anything yet to change my opinion about expecting another leg down for a possible test of yesterday afternoon's low.

Linda Piazza : 7/31/2008 1:48:30 PM

We're in one prime stop-running period of day, so be careful of a test that might or might not get reversed. If I were big money, I'd certainly want to run some tests these days!

Linda Piazza : 7/31/2008 1:47:28 PM

The RUT is once again charging up toward that descending trendline off the 7/23 high. That trendline appears to cross now at about 720.40 if I'm guessing correctly. The RUT is now at 718.73 with the 30-minute chart showing potential Keltner resistance on 30-minute closes at 720.20 and then at 721.80.

Linda Piazza : 7/31/2008 1:20:50 PM

The OEX has pushed above the potential resistance now at 588.91 on the 30-minute chart, but there is still of course a number of minutes left in this 30-minute period.

Keene Little : 7/31/2008 1:19:36 PM

After breaking its uptrend line from Monday's low this morning, SPX might make it back up to it for a test of it, currently near 1282, before dropping back down. 10-min chart: Link

Jeff Bailey : 7/31/2008 1:18:33 PM

Treasury Paulson's Remarks ... Source: U.S. Treasury Department Link

Jeff Bailey : 7/31/2008 1:13:26 PM

DXY 73.26 -0.08% (30-minute delayed) ... +1% in Q2. Close here would be +1% for month and beginning of Q3.

Jeff Bailey : 7/31/2008 1:12:06 PM

Listening Linda! Wouldn't miss it.

Linda Piazza : 7/31/2008 1:07:33 PM

Also, Bloomberg TV just noted that the head of NBER is saying that his personal view is that he's not so sure the U.S. is in a recession or was in one. Hmm.

Linda Piazza : 7/31/2008 1:06:54 PM

For those who don't know, Treasury Secretary Henry Paulson is currently speaking.

Jeff Bailey : 7/31/2008 1:02:44 PM

Asian Markets (EOM Closes) at this Link

For Month: $NIKK -0.08%, $HSI +2.8%, $SSEC +1.5%

Linda Piazza : 7/31/2008 12:55:57 PM

The TED spread is 1.12. It's been zigzagging but in a generally upward direction since 7/25.

Linda Piazza : 7/31/2008 12:53:05 PM

The OEX did find support on 15-minute closes at the Keltner line now at 586.89 but at 586.70 when I made my 12:22:05 post. What's next? The OEX is currently rising to test what now looks like potentially significant resistance in the 588.60-589.20 zone. If the OEX can't make it through that resistance and sustain values above it, then it might need to retest that support and might eventually tumble toward support now at 583.60-584.53. That downside range has not yet been set as a potential target on the 15-minute chart, but, barring sustained values back above about 589.20, it has on the 30-minute chart. OEX at 588.11 as I type.

Jeff Bailey : 7/31/2008 12:51:39 PM

So let it be said, so let it be benchmarked.

Jeff Bailey : 7/31/2008 12:45:39 PM

12:40 Market Watch at this Link

Jeff Bailey : 7/31/2008 12:39:00 PM

Beetle's Balanced Benchmarks ... at 06/30/08 Close. Link

Upper benchmark: Was from 12/31/07 thru 06/30/08.

Lower benchmark: Was from 03/31/07 to 06/30/08.

Useful when looking at today's release of GDP.

Keene Little : 7/31/2008 12:32:18 PM

I understand Jim Cramer said on his Mad Money show yesterday (I don't watch the guy) that the market bottom is in and it's time to buy. As my personal contrarian indicator I think it's time to sell. Not long ago, and shortly before the July 15th low, he screamed "sell everything, nothing's working." I guess the poor guy has had a change of heart. This market is whipping everyone.

Jeff Bailey : 7/31/2008 12:30:51 PM

12:00 Internals found at this Link

Jane Fox : 7/31/2008 12:28:19 PM

My goodness Gold has had a change of heart today. Link

Linda Piazza : 7/31/2008 12:22:05 PM

Next potential support for the OEX, found on the 15-minute chart is at 586.70 on 15-minute closes. OEX traders should be aware of this potential support, but there's now vulnerability to, if not a set target yet, near 583.45-584.33. If that level is reached, bounce potential might be present there.

Keene Little : 7/31/2008 12:20:59 PM

Well that wasn't much of a bounce before heading lower again. The selling could get a little more intense now and we'll likely see a test of yesterday afternoon's lows in the blue chips.

Jane Fox : 7/31/2008 12:20:32 PM

VIX is now making new daily highs supporting the bearish AD volume and AD line.

Jane Fox : 7/31/2008 12:00:26 PM

WASHINGTON (MarketWatch) -- Claims filed for state unemployment benefits experienced an unusually high gain in the most recent weekly data as the government reached out to enroll workers in an extended federal-benefits program and found that some qualified for regular benefits.

This will have the effect of raising claims levels for several weeks and accordingly, the data are probably not comparable to recent numbers, the Labor Department said Thursday.

Keene Little : 7/31/2008 11:54:13 AM

The drop from this morning's high now looks like a small 5-wave decline which means the trend is back to the downside. Expect a bounce to correct the decline and then it will be a shorting opportunity for another leg down.

Jane Fox : 7/31/2008 11:52:11 AM

Here again we have the internals all confused. AD ratio and volume are making new daily lows but the bearishness is not confirmed by the VIX. The VIX needs to make new daily highs to confirm bearishness. The we have the TRIN at 1.11 which is a tad bearish but not overly so. There is nothing clear out there today. Link

Keene Little : 7/31/2008 11:43:16 AM

If NDX drops back below 1862, yesterday morning's high, it will be possible to consider its correction from the July 15th low as complete. That's a very early call but the slight throw-over above the top of a potential rising wedge pattern this morning and now a drop back inside is a heads up that the bounce could be finished, shown in dark red on the 60-min chart: Link

Jeff Bailey : 7/31/2008 11:43:36 AM

Avon Products (AVP) $42.84 -2.87% ... Earnings Press Release (yesterday) Link

Jeff Bailey : 7/31/2008 11:40:35 AM

AVP was downgraded to "hold" at Deutsche Bank this morning.

Jeff Bailey : 7/31/2008 11:39:47 AM

Avon Products (AVP) $42.84 -2.87% ... strong day yesterday.

Jeff Bailey : 7/31/2008 11:39:15 AM

BARE $11.74 -30.65% ...

Jeff Bailey : 7/31/2008 11:38:59 AM

Nu Skin (NUS) $16.22 -5.75% ... Earnings Press Release Link

Pretty good comeback from $15.21.

Jeff Bailey : 7/31/2008 11:35:15 AM

Texas Instruments (TXN) $24.60 +0.40% ...

Jeff Bailey : 7/31/2008 11:34:38 AM

Motorola (MOT) $8.61 +12.10% ... Earnings Press Release Link

Linda Piazza : 7/31/2008 11:34:33 AM

Potential support on 30-minute closes is now 588.33. The OEX just closed its first 30-minute period beneath the 30-minute 9-ema, but only slightly beneath that moving average, now at 589.81, so it's possible that's still support, due to the minimal close below it.

Jeff Bailey : 7/31/2008 11:32:13 AM

Kellogg (K) $53.53 -1.14% ... Earnings Press Release Link

Jeff Bailey : 7/31/2008 11:30:06 AM

Starbucks (SBUX) $14.86 +1.29% ...

Jeff Bailey : 7/31/2008 11:29:43 AM

Green Mtn. Coffee Roasters (GMCR) $35.32 -8.30% ... Earnings Press Release Link

Keene Little : 7/31/2008 11:29:28 AM

The NDX pattern gives me the impression we're going to see another push higher before it starts a deeper pullback. But with the blue chips looking like they could roll back over from here I think betting on the upside is the riskier play.

Linda Piazza : 7/31/2008 11:25:13 AM

The A/D line is beginning to produce consistent 15-minute closes beneath a descending line that's now at -53. The A/D line is currently -186.

Jeff Bailey : 7/31/2008 11:23:55 AM

Gold Corp. (GG) ... Earnings Press Release Link

Keene Little : 7/31/2008 11:22:17 AM

After bouncing up and essentially testing yesterday's closing high, SPX appears to be ready to roll back over. The slightly higher high in price is showing bearish divergences and the choppiness of this morning's bounce has me thinking it's part of a larger pullback correction. If true we're due another leg down to below this morning's low.

Jeff Bailey : 7/31/2008 11:19:57 AM

Symantec (SYMC) $21.19 +7.56% ... notably strong .

Jeff Bailey : 7/31/2008 11:15:13 AM

House passes tobacco bill ... AP Story Link

Jane Fox : 7/31/2008 11:14:58 AM

WASHINGTON (MarketWatch) -- The U.S. has avoided a recession, President Bush's budget director claimed Thursday, but he said challenges including energy costs remain.

"I think we have avoided a recession," White House Budget Director Jim Nussle said in an interview on CNBC.

Nussle and other top White House economic officials spoke shortly after the Commerce Department reported that real growth in the U.S. economy accelerated in the second quarter to a 1.9% annual rate.

However, the Commerce Department also reported Thursday that the economy contracted in the fourth quarter of 2007. It was the first quarter of negative growth since the 2001 recession.

Real GDP fell 0.2% in the quarter; a 0.6% increase had previously been reported. Many economists who think the economy is in recession believe it began in the fourth quarter

Jeff Bailey : 7/31/2008 11:13:51 AM

British American Tobacco (AMEX:BTI) $72.68 -2.50% ... Earnings out. Company web page Link

150 and 200-day's held sellers.

Linda Piazza : 7/31/2008 11:13:13 AM

The OEX has again hit its potential upside target of 592.84, the same Keltner channel line that it hit and exceeded by just a bit late yesterday afternoon. Yesterday's OEX high was 592.89 and the OEX's has been 592.61 so far today, so we're also seeing an equal-high test in this index. OEX bulls want to see the OEX burst higher, sustaining 15-minute closes above that 592.89 level, setting up a possible upside target near 596-599. However, they need to update their just-in-case profit-protecting plans as there's now potential (not confirmed) bearish price/RSI divergence as this level is retested today. Bears need to figure in vulnerability up to 596-599 as they're making their decisions, but I want to emphasize that the further potential upside target has not been firmly set yet, in my opinion.

Jane Fox : 7/31/2008 11:09:18 AM

Dateline WSJ - WASHINGTON -- President George W. Bush's top advisers aren't immune from congressional subpoenas, a federal judge ruled Thursday in an unprecedented dispute between the two political branches.

The House Judiciary Committee wants to question the president's chief of staff, Josh Bolten, and former legal counsel Harriet Miers, about the firing of nine U.S. attorneys. But President Bush says they are immune from such subpoenas. They say Congress can't force them to testify or turn over documents.

U.S. District Judge John Bates disagreed. He said there's no legal basis for that argument. He said that Ms. Miers must appear before Congress and, if she wants to refuse to testify, she must do so in person.

Linda Piazza : 7/31/2008 11:08:16 AM

Although the TRAN hasn't yet bounced high enough to retest its morning high from yesterday, the RUT is nearly there. Yesterday's high was 721.68, and the RUT is currently 720.16, just off its 720.88 high from today. This is getting close enough for an equal-high test, so RUT bulls (and most equity bulls) want to see the RUT burst to a new high and then charge up to test the 7/23 high of 726.27. It's worth noting that the RUT is pressed against the descending trendline off that 7/23 early morning high.

So, it's time for RUT bulls to update their just-in-case profit-protecting plans and to evaluate whether they'd like to lock in some of their profits or perhaps even step aside while this test goes on and get back in later, if necessary. Each tactics has its pros and cons, with one con being that if the RUT is successful in breaking higher and sustaining higher values (important qualification), it might zoom so fast that there's no reentry possible.

Jeff Bailey : 7/31/2008 11:07:34 AM

Barrick Gold (ABX) $42.53 +0.21% ... Earnings Press Release Link

Jeff Bailey : 7/31/2008 11:05:41 AM

Automatic Data Proc. (ADP) $43.00 +3.43% ... probes its 200-day SMA from underneath.

Earnings Press Release Link

Jeff Bailey : 7/31/2008 11:03:08 AM

Arch Chemicals (ARJ) $31.42 -16.32% ... Earnings Press Release Link

Jeff Bailey : 7/31/2008 11:01:33 AM

Apache Corp. (APA) $113.53 -2.59% ... Earnings Press Release Link

Jeff Bailey : 7/31/2008 10:58:45 AM

Altria (MO) $20.54 -5.34% ... Earnings Press Release Link

Jane Fox : 7/31/2008 10:57:34 AM

TRIN is making new daily lows, which is bullish, but at 0.91 not overly so. The AD ratio and volume are both making new daily highs but I see the VIX is no longer making new daily lows so this means the markets may continue to climb but it will be a very choppy climb.

Jeff Bailey : 7/31/2008 10:53:17 AM

XOM ... #1 weighting in SPX and #3 in INDU.

Jeff Bailey : 7/31/2008 10:52:35 AM

Exxon/Mobil (XOM) $81.47 -3.43% ... Earnings Press Release Link

Jane Fox : 7/31/2008 10:55:25 AM

AD line opened the day at -1100 but has improved to -86. The VIX has been making new daily lows all day supporting the S&P futures new daily highs. This all makes for quite confusing internals just like yesterday.

Linda Piazza : 7/31/2008 10:50:22 AM

Potential resistance for the OEX on 15-minute closes now ranges from 591.50-592.68.

Jeff Bailey : 7/31/2008 10:48:44 AM

Marathon Oil (MRO) $47.49 +5.22% ... bucks trend notably in my "energy" watch list.

Jeff Bailey : 7/31/2008 10:47:36 AM

UNG $42.92 -1.08% ...

Jeff Bailey : 7/31/2008 10:46:27 AM

EIA: Weekly Nat. Gas Storage Link ... Build of 65 Bcf.

Jeff Bailey : 7/31/2008 10:42:52 AM

Hologic (HOLX) $18.77 -17.81% Link ... MEDIcal device maker lowered 2008 forecast.

Keene Little : 7/31/2008 10:38:14 AM

Gold bounced off its 200-dma yesterday (905.40 for YG, December contract) while the ETF, GLD, did not quite reach it (at 87.30 whereas yesterday's low was 88.08). As I mentioned yesterday, the 5-wave move down from July 15th was a good setup for a bounce and we're seeing some follow through to the upside today.

A 38% retracement of the decline is just under 940 and a 50% retracement is near 951 and I think that's the target zone for the bounce (91.68-92.79 for GLD). From a time perspective it would be typical for it to chop its way higher over the next week and once it's finished we should see another leg down to at least match the one from July 15th to yesterday's low. YG daily chart: Link

Jeff Bailey : 7/31/2008 10:37:26 AM

DELL makes a move from "cup and handle" ...

Jeff Bailey : 7/31/2008 10:37:00 AM

Most Actives ... QQQQ $46.03 +1.00%, SPY $128.32 -0.16%, HOLX $18.95 -17.06%, KFT $31.90 -0.34%, CSCO $22.51 +1.53%, AKAM $24.42 -21.92%, MSFT $26.09 -0.53%, IMCL $64.32 +38.50%, GE $28.92 -0.17%, DELL $25.01 +4.16%.

Jeff Bailey : 7/31/2008 10:32:41 AM

Here come the "Trannies" ... TRAN 5,128 +0.65% ... back to WKLY R1.

Linda Piazza : 7/31/2008 10:32:26 AM

The A/D line has continued bouncing since this morning when I mentioned that it was testing support. It bounced through one potential resistance level and is now testing another (historical and Keltner) at about -40 to +40. The A/D line is currently -10. Next resistance, which should be stronger, is +230 up to about +400. The A/D line has tended to reverse quickly lately, so this is a place for bulls to again update their just-in-case profit-protecting stops.

Jeff Bailey : 7/31/2008 10:31:54 AM

Motorola (MOT) $8.56 +11.45% ... Notably strong this morning. #10 most active.

SMH $28.39 +1.75% ... tries to clear WKLY Pivot first time this week.

Jeff Bailey : 7/31/2008 10:29:05 AM

QQQQ Alert! $46.03 +1.00% ... probes its 150-day SMA. This is "30-week" bullish %.

Jeff Bailey : 7/31/2008 10:26:32 AM

Bristol-Myers bids $4.5 billion for rest of ImClone ... MarketWatch Story Link

Linda Piazza : 7/31/2008 10:26:06 AM

New high of the day for the OEX. Next potential resistance on 15-minute closes for the OEX is 592.60 if it can sustain 15-minute closes above the Keltner line now at 590.93. It hasn't been able to do so yet today. OEX at 591.36 as I type.

Jeff Bailey : 7/31/2008 10:24:01 AM

DJUSTK 344.45 +0.17% ... inching green. 200-day held buyers Monday. Bulls need some leverage up here at 150-day. WKLY Pivot has been stubborn.

Jeff Bailey : 7/31/2008 10:22:03 AM

YRCW $17.24 +1.47% ...

Jeff Bailey : 7/31/2008 10:21:33 AM

JBLU $5.41 +4.82% ...

Jeff Bailey : 7/31/2008 10:21:12 AM

USO $100.30 -1.79% ...

Jeff Bailey : 7/31/2008 10:19:05 AM

Bare Escentuals (BARE) $11.95 -29.41% ... #16 most active.

Jeff Bailey : 7/31/2008 10:17:07 AM

10:00 Internals at this Link

Linda Piazza : 7/31/2008 10:09:36 AM

This morning so far, the OEX has not been able to produce a 15-minute close above the potential Keltner resistance now at 590.52. As it did yesterday, this resistance line has been dragged along with the OEX as it attempts to climb. This is not usually a bullish sign, as I mentioned late yesterday, but then of course the OEX zoomed higher in its end-of-day push about as soon as I posted that. For now, this failure to sustain closes above it again suggests a need for another pullback to test support, potentially down at 586-587, but then perhaps that won't play out any more than it did yesterday. Keep the possibility in mind, however.

Linda Piazza : 7/31/2008 10:06:18 AM

Keene mentioned bifurcation. I'm seeing it a little in the VIX and VXO, too. The VIX pulled back to test its 15-minute 9-ema, but the VXO has not and has stayed near the day's high, reaching a new one even as I typed. I sometimes find that the VXO tends to lead a bit, so bulls need to keep a watch on this. Bulls want to see it roll down while bears want to see it climb above 24.22 and maintain values there. VXO is 23.79 as I type.

Jeff Bailey : 7/31/2008 10:05:42 AM

ImClone (IMCL) $64.15 +38.11% ...

Jeff Bailey : 7/31/2008 10:05:24 AM

There it is

Jeff Bailey : 7/31/2008 10:05:08 AM

AMGN $63.43 +1.81% ...

Jeff Bailey : 7/31/2008 10:04:27 AM

TRINQ 0.47

Jeff Bailey : 7/31/2008 10:03:21 AM

Biotech Index (BTK.X) 876.40 +5.55% ... notably strong. Has been lagging BBH due to stock and weighting composition.

Linda Piazza : 7/31/2008 9:59:32 AM

The TRAN is still no where near its Wednesday morning high. However, it's been balancing on the 15-minute 45-ema since about 2:15 yesterday afternoon and that's where it found support this morning. That moving average is now at 5060.80, so right now all we have is a big question mark. The TRAN did not confirm late-day gains in indices such as the OEX, but neither is it leading the way to the downside.

Keene Little : 7/31/2008 9:58:56 AM

We've got one of them there bifurcated markets again with the techs nicely in the green but the blue chips and small caps in the red. It's a sign that we can probably expect chop. That's one sign that the pullback will be a correction and not the start of something more serious to the downside.

Linda Piazza : 7/31/2008 9:55:47 AM

TRIN is trending down. Both that trend and the current value--0.75--are in favor of bulls, not bears. However, the TRIN has done some zooming of its own lately, so keep a watch on it.

Linda Piazza : 7/31/2008 9:54:21 AM

A/D line now -618, bouncing strongly, but I wanted to mention that the 30-minute chart does show potential resistance nearby: at about -450.

Linda Piazza : 7/31/2008 9:51:23 AM

The A/D line has dropped all the way to potentially strong Keltner support now at about -1250. The A/D line low has been -1282. All the A/D line has to do is go sideways to maintain its bearish tenor, but bears should be wary of a bounce that gets too high. The trouble is that there's no nearby Keltner resistance. So, bears want to see either further drops and a breakdown situation created or else sideways movement. The A/D line is -1087 as I type.

Linda Piazza : 7/31/2008 9:48:31 AM

After dipping to test potential support on 30-minute closes and trendline support (rising trendline off Monday's low), the OEX sprang higher again. It's now retesting that potential resistance that seemed to drag at it late yesterday until that last short-covering spring higher into the close. That potential resistance on 15-minute closes is now at 589.97, and until and unless the OEX can maintain 15-minute closes above that, its rise is still questionable and the OEX is still vulnerable to another support test. OEX at 589.04 as I type.

Linda Piazza : 7/31/2008 9:44:30 AM

Please try to keep the recent market environment in mind as you plan trades or update your stops for current trades today. As I've been mentioning, this kind of zooming around is often indicative of emotion-based trading. It's like schools of fish reversing in an instant due to some unseen (to humans) stimulus. Don't ever let a profit turn into a loss in this kind of environment. Especially if you have a small account, consider staying out of the markets or paper trading or employing one of the great virtual trading tools on many brokers' sites or even on CBOE. Keep trades small if you do trade. Keene mentioned in last night's Wrap that he imagined many people were getting whipsawed out of trades, and I imagine that, too. I can tell you that the times I happened to be trading small accounts (because I was trying something new and didn't want to risk much or because the market environment was terrible, etc.), even good risk management didn't stop me from having my trading capital eaten away. A small account can take only so many whipsawed trades before it's too small to trade the kinds of trades you want to trade. Great trading environments will come again.

If you're an adept scalper, you're doing great. Maybe.

Linda Piazza : 7/31/2008 9:35:35 AM

The OEX is just above the rising trendline off Monday's low, with that now at about 587.15 or so if I'm eyeballing it correctly . . . oops, no, the OEX is just below that trendline now . . . and back above it again. Anyway, the point was that potential trendline support is converging with potential Keltner support on 30-minute closes. This is the first zone to watch for potential support to kick in, with that support extending down to about 584. OEX at 587.07 as I type.

Linda Piazza : 7/31/2008 9:33:12 AM

Attention all spreads traders: If you have some AUG bear call spreads, you might check them this morning and see whether the downdraft allows you to exit them for a pittance and reduce the risk.

Keene Little : 7/31/2008 9:30:53 AM

It's hard for me to imagine that people are even arguing that we're in a recession and whether it will get worse. History shows when consumer sentiment drops hard, and it's at nearly record lows, and when housing deflates, the economy always heads into a recession. Do people really think it's going to be different this time? Boggles the mind.

Linda Piazza : 7/31/2008 9:30:37 AM

Futures were ramped up into the 8:30 number this morning and tumbled immediately after. This week's ADP had pumped up hopes for tomorrow's Non-Farm Payrolls numbers, and the initial claims dashed those hopes. In addition, many discount the mostly in-line GDP numbers since many believe any growth seen there was largely due to the stimulus checks.

In truth, though, as I said in my 3:52:44 post yesterday, the OEX ended the day testing the 38.2% retracement of the slide from the May high into the July low, even if short-covering pushed the OEX just a little above it into the close. So, the OEX was ending the day essentially at resistance. I had pointed out that the TRAN had not confirmed short-term action by punching to its own new high. Neither had the RUT. Although the small caps represented in the RUT and the large caps in the OEX don't converge, of course, the RUT can still be used as a sort of indicator. I pointed out that XOM was soaring, helping many indices but it would be reporting this morning, and bulls should make their hold-overnight decisions with that in mind.

The OEX was ending the day by punching just barely above resistance on 15-minute closes, too, with such end-of-day breakouts as suspect as first-15-minute breakouts can be, too.

What's next? All this zooming around yesterday scrambled intraday charts a bit, but if we extrapolate where the OEX could go by using the SPX futures' current distance from fair values, the OEX could drop toward 586-587. Sustained 30-minute closes beneath a Keltner line now at 587 but likely to be driven lower, perhaps to 586.50 or so by early action, would be possible. Because of the configuration of the chart setups, bears should be watchful for potential support to kick in anywhere in the 584-587 region. If it does, then we begin to see what happens next. I would watch for the possibility that any bounce would then find resistance at 586-587 if the OEX drops all the way to 584, and in the 588-589 region, if it drops only to 586-587. Then we see.

If by some miracle, the OEX climbs instead of declines, of if it should find quick support in the 589-590 region, then watch for resistance in the 596-599 region.

Jane Fox : 7/31/2008 9:25:37 AM

Here is a little snippet from MarketWatch.com

It's a common (but mistaken) belief that a recession is defined by two consecutive quarters of negative GDP.

The actual working definition is "a significant decline in economic activity lasting more than a few months," usually seen in GDP as well as monthly data on job growth, income growth, industrial output and business sales. All four of the monthly indicators are flashing recession signs.

Jane Fox : 7/31/2008 9:21:07 AM

What the GDP numbers are showing us is that the economy contracted in the 4th quarter of 2007, the first contraction since the 2001 recession and that is why the market sold off.

Tab Gilles : 7/31/2008 9:16:13 AM

Observation:

Last week I'd brought up that small caps have been outperforming most indexes so far this year.

Tab Gilles : 7/23/2008 9:06:14 AM

Russell 2000 ($RUT)

Small-caps are now doing better than the overall market....a very bullish signal. These stocks typically get sold off during tough economic times as investors look to safer investments, but historically are the first to rise when the economy rebounds. In the year following the end of each of the past 10 recessions, small stocks rose an average of 28% compared to 19% for large stocks, according to T. Rowe Price. As for the Russell 2000 index ($RUT) of smaller companies has performed significantly better than larger-company indexes so far this year.

I was going over some index charts late last night thinking about the small cap index (Russell 2000 $RUT). I was looking at the one-year daily chart and asked myself... "I know this pattern?" Link

So I started to look back and sure enough its the same pattern from '02/'03 bottom formation. Link

What about now? What indexes are putting in that similar formation? It appears that the small & mid-caps along with the Nasdaq reflect that same pattern whereas the DJIA, SPX & OEX do not. Link

Jane Fox : 7/31/2008 9:08:38 AM

I just got a note from Denise (heh Denise how are you) that the reason for the overnight selloff is due to the unemployment numbers out at 8:30ET. My response is that I have never seen this kind of selloff because of the weekly unemployment numbers. No I think it is due to the fact the "Street" was expecting a faster growth rate and didn?t get it so took its ball and bat left the game.

Keene Little : 7/31/2008 9:06:17 AM

Equity futures had made a nice climb up off the overnight lows around 4:00 AM and had been nicely positive before the 8:30 AM reports. From there the DOW futures lost 100 points in about 5 minutes and they're staying at their lows. We could certainly see an immediate turnaround once the cash market opens but right now it's looking like we'll start the pullback this morning. A drop of about 200 points on the DOW would be a reasonable correction (not necessarily all in one day) and I'll be monitoring it for some clues as to whether it will be just a pullback or something more bearish.

Jane Fox : 7/31/2008 9:02:38 AM

Crude is trading up to $127.60.

Jane Fox : 7/31/2008 8:57:24 AM

Even though the economy grew, albeit at a much slower rate, it was still growth but perception is everything in the stock market and the market perceived this growth as not fast enough so the sellers came out in full force during the overnight session. I imagine this bearishness will carry forward into the intraday session and that the AD line will open well below 0.

Jane Fox : 7/31/2008 8:57:53 AM

Looks like the markets didn't like the news out at 8:30ET. I must admit this is surprising for I thought the GDP was actually pretty good. Link

Jane Fox : 7/31/2008 8:43:41 AM

LONDON (MarketWatch) - U.S. stock futures traded lower on Thursday as jobless claims surged and the economy didn't grow as quickly as forecast in the second quarter, with record results from Exxon Mobil also not receiving the market's approval.

S&P 500 futures fell 6.7 points to 1,278.00 and Nasdaq 100 futures fell 8.5 points to 1,847.75. Dow industrial futures fell 77 points.

First-time jobless claims for state unemployment benefits for the week ended July 26 rose 44,000 to 448,000 - an unusually high gain as the government moved to enroll workers in a new extended federal benefits program and found some percentage qualified for regular benefits, the Labor Department reported Thursday.

Boosted by stimulus checks from Uncle Sam and big drop in imports, real growth in the U.S. economy accelerated in the second quarter to a 1.9% annual rate, the Commerce Department reported.

The dollar slipped against the Japanese yen after the data. Crude-oil futures fell 28 cents in electronic trading.

Jane Fox : 7/31/2008 8:40:15 AM

WASHINGTON (MarketWatch) -- Boosted by stimulus checks from Uncle Sam and big drop in imports, real growth in the U.S. economy accelerated in the second quarter to a 1.9% annual rate, the Commerce Department reported Thursday. Consumer spending was supported by the largest increase in disposable personal income in six years, thanks largely to about $75 billion in tax-rebate checks from Washington. The economy was held back by the crumbling housing market and by a huge drop in inventories. Investments in equipment and software also fell during the quarter. The economy grew a revised 0.9% annual rate in the first quarter. Second-quarter real GDP was close to the 2.3% increase expected by economists surveyed by MarketWatch.

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