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OI Technical Staff : 8/8/2008 9:59:59 PM

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Jeff Bailey : 8/8/2008 6:09:46 PM

Anemic volume today at the big board. NASDAQ brisk.

Would have thought more if shorts were covering.

Thursday's volume more like short covering.

Jeff Bailey : 8/8/2008 5:31:18 PM

DuPont (DD) $45.31 +4.49% ...

Jeff Bailey : 8/8/2008 5:30:54 PM

Dow Chem (DOW) $33.63 +4.02% ...

Jeff Bailey : 8/8/2008 5:30:06 PM

Listen, listen to farmer being interviewed on CNBC.

Jeff Bailey : 8/8/2008 4:56:10 PM

Some "wave action" ... +300, then -200, then +300, then -200, then +300, then -200.

Jeff Bailey : 8/8/2008 4:56:03 PM

Keene! Did you buy a $116 DIA put today?

Jeff Bailey : 8/8/2008 4:28:52 PM

Keene and Barry! Just seeing your email. Sent a response! Both IWM and QQQQ were at your conventional 38.2% yesterday at 01:23:37 ... Link

Keene Little : 8/8/2008 4:15:38 PM

The market held onto most of its gains in another short-covering rally. Reversal Monday? We'll find out soon enough. Have a great weekend.

Tab Gilles : 8/8/2008 4:15:20 PM

Nice pop on the refiners today

Tesoro (TSO $17.92 +$1.16 (6.92%)

Valero (VLO) $34.72 +$1.78 (5.40%)

Holly Corp (HOC) $30.93 +$1.84 (6.33%)

Western Refining (WNR) $7.45 +$0.48 (6.89%)

Jeff Bailey : 8/8/2008 4:14:20 PM

Now it's gone ... was to $128.50-ish

Jeff Bailey : 8/8/2008 4:12:44 PM

See that "funky" tick again?

Jeff Bailey : 8/8/2008 4:12:25 PM

Session high has been $129.93

Jeff Bailey : 8/8/2008 4:12:01 PM

SPY $129.48 +1.94% ... 7.5 minutes to close.

Jeff Bailey : 8/8/2008 4:05:41 PM

+302.32 ... could be trouble for bulls?

Jeff Bailey : 8/8/2008 4:03:40 PM


Linda Piazza : 8/8/2008 4:03:38 PM

Happy weekend, everyone. This market action is dizzying. I believe what we're seeing is a bear-market rally off the 7/15 low, but one that has the potential, but not the promise, of reaching toward 614-618. I wouldn't want to be taking home too much risk, though, with the OEX in a possible bearish rising wedge and hitting the topside of that wedge's resistance, whether or not it has the potential to go to 614-618. That wedge could break down at any time.

Jeff Bailey : 8/8/2008 4:02:52 PM

INDU ... threatens to close up just 296.7 points.

Linda Piazza : 8/8/2008 4:00:16 PM

FWIW, it looks as if the OEX might be again finding resistance on 30-minute closes at the Keltner resistance now just at about 601.19. If the OEX's climb keeps pushing this resistance level higher, you might be wondering why that matters. It matters in that it shows us whether the OEX or any other entity being graphed on the Keltner charts is particularly strong, springing above resistance and then using it as a springboard higher, converting it to support, or if it's sort of dragging it along behind it, in a way, with that resistance a sort of weight dragging at it. That hasn't made any difference today, but if I were in a bullish OEX trade, I would have liked to have seen the OEX bound above that level, and set a new upside target, which it hasn't been able to do. It's a small thing, but it's something I was watching as the OEX approached the upper end of that rising wedge.

By the way, I was commenting on the same sort of effect on the OEX's 15-minute chart last Wednesday afternoon, a bit chagrined because the OEX kept climbing the whole while I was talking about it dragging the resistance up with it rather than clearly breaking free. It wasn't climbing the next morning, though. I'm not promising the same action Monday as we saw Thursday, but I am saying that I'm seeing the same sort of dragging effect on the 30-minute chart now as I saw Wednesday afternoon on the 15-minute one.

Jeff Bailey : 8/8/2008 3:54:26 PM

Excellent mentioning Linda ...

Alert! Subscribers should have taken some profits off table in YUM-IG +53.19% (@ 12:48:14) and YUX-JC +39.47% (@ 10:01:24) today.

Linda Piazza : 8/8/2008 3:42:55 PM

You know, I just wouldn't go into the weekend without locking in some of my bullish profits, at least. I just wouldn't. There's the possibility for a 614-618 upside target on some charts for the OEX, but you can take a look at the daily chart and see that no big gain, no matter how spectacular, is immune to a reversal, either.

Linda Piazza : 8/8/2008 3:41:15 PM

Target on the 15-minute chart for the OEX is now 601.83, but remember that the OEX's difficulties with the resistance on the 30-minute chart, with that resistance now just a hair over 601, may make it difficult for the OEX to stay at that level or perhaps even to reach it, although end-of-day short-covering may help that along. OEX at 601.29 as I type.

Jeff Bailey : 8/8/2008 3:40:04 PM

Running your WKLY Pivots for the SPX and SPY. Focusing in on the 5-minute chart and August open interest.

Linda Piazza : 8/8/2008 3:37:02 PM

What releases are scheduled for foreign markets Sunday night and Monday morning? Germany's Wholesale Price Index, a measurement of inflation at the wholesale level, will be released at 2:00 am ET Monday morning, as will Germany's Machine Tool Orders. In the U.K., PPI and Trade Balances will be released at 4:30 am ET.

Linda Piazza : 8/8/2008 3:33:09 PM

If equities don't pull back soon, I imagine that a lot of shorts will be forced into covering, if there are any shorts that haven't yet been whipsawed out of positions. Me? I had a long straddle on BRL and I was anxious to close those long positions ahead of the weekend because the long position had increased in price enough that the position should have been profitable after commissions. I couldn't get it to go anywhere but the bid price, so I actually lost a little less than $10.00 on the 2-contract position after I paid commissions both ways, but I wasn't at all sure that higher prices would hold into next week, and BRL is actually down a bit from when I closed the position. There have to be some out there like me afraid that their long profits will evaporate over the weekend, too. So, we'll see which wins into the close.

Keene Little : 8/8/2008 3:23:42 PM

Zooming in a little closer on the rising wedge for SPX, the same one I've been showing on the other indices as well today, this 60-min chart shows why the bounce could be ending today: Link . The wedge pattern calls for a 5-wave move inside it and while it could develop a little further, shown in pink, it has met the minimum requirements to be called complete. The 5th wave even did a small throw-over, common in rising wedges.

If price turns back down from here and takes out this morning's low it will be an indication that the rising wedge is finished. In that case the A-B-C bounce off the July 15th low would also be complete and therefore we'd be at the start of the next large decline. That's the setup and if the market holds onto its gains today (big rally into the close, holding its highs) we could have another capitulation day where the weaker shorts have covered and that could set up a strong reversal for Monday.

However, the Fibs point to SPX 1306 as the highest it should go before the wedge pattern can be considered negated. Therefore that's the stop level if you would like to try a short play this afternoon (with options, not futures).

Linda Piazza : 8/8/2008 3:23:22 PM

I noted earlier that the OEX's inability to sustain 30-minute closes above resistance on its 30-minute chart after several tries increased the chances that the OEX would drop back to its 30-minute 9-ema, although those chances could be undone by a spurt higher at any time. I warned bulls to begin factoring in the possibility of a 30-minute 9-ema test, however. That 9-ema is now at 597.83, with the OEX at 599.40. Bulls do want this to hold on 30-minute closes if tested, but would prefer that the 15-minute version hold and the 30-minute one not be tested at all. The 15-minute version is currently at about 599.38 with lower potential support near 598.35. Just keep in mind that when the OEX blasts up through what should be resistance levels, it can blast down through them, too. Keep updating your profit-protecting plans.

Jeff Bailey : 8/8/2008 3:18:44 PM

Can go back and look at your Beetle's Balanced at 03/31/08 to 06/30/08 and check your productivity/inflation asset classes.

That would be the MARKET's knowledge of what is released today.

Jeff Bailey : 8/8/2008 3:15:56 PM

Productivity growth slowed in spring ... AP Story Link

Jeff Bailey : 8/8/2008 3:11:41 PM

What we've profited from the past few weeks, might just have to go for a sit-down meal.

Jeff Bailey : 8/8/2008 3:10:01 PM

How much did we make on the YUM? Is there a "lobster" ready to spring from the pot?

Jeff Bailey : 8/8/2008 3:08:44 PM

MCD and YUM ... "fast food"

Jeff Bailey : 8/8/2008 3:07:46 PM

SPX Heavyweights ... thowing on the 1-year high and low. Link

Some observation intra-day of bullish vs. bearish leadership.

Linda Piazza : 8/8/2008 3:04:57 PM

The OEX closed another 30-minute period slightly below the potential resistance on 30-minute closes, now at about 600.75. This increases the possibility that the OEX will pull back toward its 30-minute 9-ema, now at 598, but it doesn't promise it will do so. Bulls should begin to factor in possible vulnerability to that level, however, if the OEX can't maintain breakouts above that Keltner resistance. The OEX is 600.80 as I type, still testing that resistance.

Jeff Bailey : 8/8/2008 3:04:27 PM

Both side, must always be looking both sides.

Jeff Bailey : 8/8/2008 3:04:11 PM

Not seeing any 52-week lows in SPX heavyweights.

Jeff Bailey : 8/8/2008 2:57:45 PM

C'mon GILD

Jeff Bailey : 8/8/2008 2:57:11 PM

C'mon AMGN

Jeff Bailey : 8/8/2008 2:56:49 PM

Oh my! ... MCD $65.88 +6.49% ... That a BIG 52-weeker. Oh the pain. Oh the gain.

Jeff Bailey : 8/8/2008 2:55:32 PM

C'mon QCOM and ORCL

Jeff Bailey : 8/8/2008 2:54:13 PM

JNJ threatends to close at yet another 52-weeker.

Jeff Bailey : 8/8/2008 2:49:58 PM

That reminds me!

On Tuesday SPX's NH/NL was 17:9

Wednesday's was 15:5

Thursday's was 5:9

Jeff Bailey : 8/8/2008 2:48:12 PM

02:00 Internals found at this Link

Linda Piazza : 8/8/2008 2:48:42 PM

A/D line still climbing. It's at 1599, just barely above Tuesday's highs and not quite up to those seen on 7/29. It is, however, near the resistance zone that both showed. Like RSI, the A/D line can only go so far. There are only so many issues to advance and so many to decline. At this point, the A/D line doesn't have to keep climbing, though, to support the equity bounce. It just has to stay near where it is and not drop back too far.

Linda Piazza : 8/8/2008 2:45:18 PM

This climb has pushed the OEX's potential resistance on 30-minute closes up to about 600.65. The OEX has an upside potential target of 601.32 on the 15-minute chart, but it's struggling the last few 30-minute periods to maintain breakouts above the resistance level, there, so watch out for the possibility that the OEX might not quite reach its potential target on the 15-minute chart or that it might get knocked back if it does. The OEX is currently 600.87 after punching just above 601.

Linda Piazza : 8/8/2008 2:37:04 PM

The OEX's 15-minute chart shows the potential for a move to 601.30, but the 30-minute chart says it might have difficulty staying there, if it does. In any case, the OEX is testing, testing that rising wedge upper boundary as well as the daily 72-ema I like to watch as well as potentially important resistance on the 30-minute chart. No resistance levels have made a bit of difference so far today and they might not now, but each of these should be points at which you adjust your profit-protecting plans because one of them could.

OEX at 600.49 as I type.

Linda Piazza : 8/8/2008 2:34:10 PM

The OEX ended that last 30-minute period at potential resistance on 30-minute closes, then pushed up to about 600.45, so resistance held, but barely. The OEX is currently attempting to push above it. It's at 600.51 as I type, with the potential resistance line only cents below it, but the OEX has been as high as 600.66 in the last couple of minutes.

Jeff Bailey : 8/8/2008 2:31:55 PM

WB $17.80 +3.97% Link ... ????

Jeff Bailey : 8/8/2008 2:30:35 PM

PBR $50.84 -2.43% ...

Jeff Bailey : 8/8/2008 2:29:55 PM

FXE $150.48 -1.87% ...

Jeff Bailey : 8/8/2008 2:29:37 PM

USO $93.27 -3.28% ...

Linda Piazza : 8/8/2008 2:27:52 PM

Potential resistance on 30-minute closes is now about 600.40, with the OEX having hit it again for the second 30-minute candle in a row. The OEX is now 599.87, with it being up for grabs as yet whether that resistance will again hold into the close of this 30-minute period or if it will be able to breach that resistance.

Jeff Bailey : 8/8/2008 2:27:44 PM

SSO $62.50 +4.00% ...

Jeff Bailey : 8/8/2008 2:26:33 PM

INDU +306 points

Jeff Bailey : 8/8/2008 2:25:47 PM

SPX alert! 1,295 +2.30% ...

Linda Piazza : 8/8/2008 2:22:41 PM

TRIN is still neutral, by Keltner and traditional standards, at 1.01.

Linda Piazza : 8/8/2008 2:22:12 PM

Another new high on the A/D line. RSI has flattened, but there's really not much higher it can go, with the current 85-ish level. It can get only to 100. Bulls do not want to see a quick reversal in this that brings it below about 1160 and sustains values below that, although there's no sign of such a thing yet. The A/D line is currently 1568.

Linda Piazza : 8/8/2008 2:17:09 PM

Sure wish I'd had a bunch of OEX calls this morning. I'd be selling most, if not all, of them now, though. In fact, I would have likely begun stepping out of them as the OEX approached the gap down from Wednesday's close to Thursday's open.

If you've got calls and they've doubled in price, you might consider selling half of them and thereby making sure that you won't lose money on them, no matter what happens next. You can then set the stops at account-appropriate levels for the other half or start stepping out of them as the afternoon progresses, if it's your intention to go flat into the weekend.

Keene Little : 8/8/2008 2:16:22 PM

NDX is the one that's looking potentially more bullish than the others since it has broken out the top of a bear flag pattern. I don't have good correlation between a Fib projection for the 2nd leg up in its bounce and the retracment levels for the decline from June but I have a target zone of 1943-1958 if the rally continues into next week. Otherwise with NDX tagging its 200-dma today (1921.36) it's possible that today will be a bull trap following yesterday's bear trap. Daily chart: Link

Linda Piazza : 8/8/2008 2:12:05 PM

Potential resistance on 30-minute closes for the OEX is 599.50 and 600.20. OEX at 599.43 as I type.

Jane Fox : 8/8/2008 2:12:42 PM

There was very little evidence overnight that the bulls were going to be so strong intraday. Link

Keene Little : 8/8/2008 2:10:44 PM

The sideways triangle idea that I had shown on last night's and this morning's DOW and SPX 180-min charts looks like a much less likely possibility at this point. That elevates the probability for the rising wedge idea (or something a lot more bullish if we see prices rallying out the tops of them). The same rising wedge pattern for SPX points to a high today or a little higher (after a brief pullback on Monday), possibly 1300-1305, to finish the bounce. The rising wedge idea does Not support the idea that SPX will rally up to the 1320-1325 area. Daily chart: Link

Linda Piazza : 8/8/2008 2:05:46 PM

The OEX's potential support on 15-minute closes now ranges from 597.64-598.01. OEX at 599.07 as I type. So far, there's no sign of a quick reversal after that test of 600, but keep those profit-protecting plans updated just in case. We've got two hours left in the trading day, and just glance at the first hour of today's trading to imagine what can happen in two hours.

Linda Piazza : 8/8/2008 2:03:29 PM

A/D line is still climbing, just barely off its 1579 high of the day. It's 1540 as I type. Equity bulls want to see it maintain values above about 1140 if it pulls back.

Keene Little : 8/8/2008 1:54:49 PM

Similar to the RUT's daily chart, the DOW's daily chart shows a very similar pattern with the choppy advance since the July 28th low (what looks like another rising wedge). It's now approaching potential resistance at 11750, the January 2000 high and March 2008 low. Tighten up your stops if you're long as the next big move from this bounce (whether from here or a little higher, possibly 12K, next week) is going to be a doozy to the downside. Link

Linda Piazza : 8/8/2008 1:54:42 PM

Here's where you are on the OEX's daily chart: Link Do you know where the OEX is going next, any more than you knew on Tuesday and Wednesday? Or July 23, when this trendline was pierced but the OEX closed back below it by the end of the day? Maybe the OEX is going to burst higher out of this rising wedge. I've been mentioning that all through the middle of 2003 and into the next year, we kept seeing prices burst higher out of these formations, so it's certainly possible. Knowing that they have bearish connotations doesn't promise that they'll break to the downside, as I mentioned this morning. However, this is about risk management and how much of your bullish profits do you want to risk on the guess that this is the time the OEX is going to break higher, or, that if it does, it will maintain the break into the close or into next week?

Jeff Bailey : 8/8/2008 1:51:36 PM

USO $94.06 -2.46% ...

Linda Piazza : 8/8/2008 1:50:23 PM

OEX potential support on 15-minute closes is now 598 with the 15-minute 9-ema now at 597.35 and still cycling higher. OEX at 599.23 as I type, and OEX bulls want that support to hold. They don't want a quick reversal now that 600 has been tagged, the potential resistance on 30-minute closes has been tagged, and the rising wedge's upper trendline has been approached if not yet tagged.

Keene Little : 8/8/2008 1:49:01 PM

It's looking like we're going to get another 300-point rally today (if it sticks). For those who do not get the nightly newsletters, I had mentioned an interesting statistic. Never in a bull market has the DOW rallied 300 or more points, only in a bear market. Of the 24 days the DOW rallied 300 or more points since 1998, 15 of them occurred during the 2000-2002 decline and none occurred between 2003 and 2007. Pretty amazing when you think about that.

So the fact that we're seeing these 300-point rallies in the DOW is another sign of the bear--short covering can provide some amazing buying power. But then it stops on a dime and down she goes.

Jeff Bailey : 8/8/2008 1:46:34 PM

SPX 1,294.06 +2.21% ...

Jeff Bailey : 8/8/2008 1:46:08 PM

SSO $62.48 +3.97% ....

Jane Fox : 8/8/2008 1:45:44 PM

Here is McMillan's weekly. - This is a market that has had plenty of opportunity to rise strongly, but has really been unable to do so. Even so, the current trend is mildly bullish. $SPX has carved out a series of higher lows -- at 1234 and 1247 -- which, when connected with the July bottom at 1200, form a rising trend line. As long as that trend line exists, the situation is positive. However, considering that nearly all of our indicators have simultaneously been on buy signals, the current rise is a weak one. It is perhaps most reminiscent of what happened just a few months ago -- in January (see Figure 1). At that time, the marked bottomed in mid- January, after a massive oversold condition arose (partly as a result of Societe Generale dumping the positions of a rogue trader). That oversold rally generated only meek gains but lasted until the end of February, before another bout of selling (surrounding the run on Bear Stearns) took the market to new lows amidst another oversold condition.

The equity-only put-call ratios are both still bullish, and as such they represent perhaps the most positive thing about this market right now. These buy signals came from fairly high levels on their charts, and that should be helpful. They will remain bullish until they roll over and begin to trend higher once again.

Market breadth (advances minus declines) has been lackluster on this rally. Typically, if this rally were the start of a new, truly bullish leg of the stock market, breadth would quickly register overbought conditions and remain overbought for quite some time during the initial phase of the rally. That has not happened.

Volatility indices ($VIX and $VXO) have acted more bullish than most of the other indicators. $VIX has fallen sharply from the July highs, and that is bullish. Furthermore, it clearly made new relative lows (in contrast to $SPX, which has not clearly made new relative highs). Thus this down trend in $VIX is bullish. $VIX will remain bullish as long as it remains below 24.

In summary, we don't have any sell signals from our indicators. In fact, most of our indicators are bullish -- although some are rather tepid. As a result, we are retaining a bullish attitude -- an attitude, I might add, that has gone from enthusiastic to reluctant -- as long as $SPX remains above its bullish trend line. A close below 1247 would be negative, and a close below 1200 could be significantly bearish.

Jeff Bailey : 8/8/2008 1:45:16 PM

+300 points alert! ... INDU Link 11,731.47 +2.62% ...

Linda Piazza : 8/8/2008 1:44:26 PM

Potential support on 15-minute closes for the OEX is now at 597.92, with the 15-minute 9-ema now at 596.76 but still climbing underneath that other support. Bulls should be aware of potential resistance on 30-minute closes that's now at 599.95, closing approaching 600 round-number potential resistance as well as rising-wedge resistance that I think might be at about 600.90 currently. OEX at 599.66 as I type.

None of these warnings has been needed so far, but that doesn't mean you shouldn't keep updating your profit-protecting plans.

Jane Fox : 8/8/2008 1:43:02 PM

The market just loves to prove me wrong, the SPX broke its resistance today, albeit not by much. Link

Jeff Bailey : 8/8/2008 1:39:07 PM

CNBC guest talking about YRCW

Linda Piazza : 8/8/2008 1:37:13 PM

Bulls have it easy now, just deciding where to put their stops and what decisions should be made about staying in or perhaps beginning to step out of partial positions as the rising wedge resistance is more closely approached. Do start thinking in terms of whether you want to stay in your positions over the weekend as that can influence your decisions about how to treat stops. That's important because we're entering one typical stop-running time of day when big money tests to see whether there are sellers waiting overhead or dip buyers waiting just below.

Jeff Bailey : 8/8/2008 1:35:47 PM

M, m, mmmm ... Check out your daily interval chart of RUT.X ... 200-day SMA observation and today's bar, then 06/05/08.

Those still LONG my bullish comments from a couple of weeks ago with the UWM-HS, please, please pay yourself.

Hard work. Great trade.

Linda Piazza : 8/8/2008 1:34:23 PM

VXO at 21.46, just off its low of the day.

Linda Piazza : 8/8/2008 1:32:52 PM

The OEX has just hit potentially strong resistance on 15-minute closes, punching above it as I type. That's now at 597.83 and with so little time left in the 15-minute period, it's unlikely the OEX will pull back below it before the close of this period, even if it was going to pull back at some time. Do watch over the next few minutes, however, with next resistance at the 593.43 high from 8/6. OEX at 598.30 as I type.

Jeff Bailey : 8/8/2008 1:32:33 PM

PHF $7.95 (unch) ... YrNet% -14.05% on price, but need to add back in the $0.90/year dividend.

RUT.X 731.03 +2.46% .... YrNet% -8.13% (some dividends, but not big payers as they are still trying to grow the company)

Linda Piazza : 8/8/2008 1:30:52 PM

After giving up the support of its 15-minute 9-ema, the TRIN dropped to next support, then at the 1.04-1.05 and then 1.00 levels. The TRIN is 1.01 as I type, at potential support on 15-minute closes and near the 1.00 benchmark that some use as a bullish/bearish benchmark. Of course, it's been above that benchmark most of the day, so that's why I prefer Keltner levels as short-term benchmarks for when it's strengthening or weakening. This is potential support, of course, but if the TRIN bounces, it has a thicket of potential resistance above it and would need to maintain values back above 1.09 to change the trending-down tenor from the last few hours. Do watch this, however, as the OEX and other indices approach stronger resistance of various forms.

Jeff Bailey : 8/8/2008 1:30:37 PM

Use various bonds for risk assessment. US treasuries "safest" and "junk" RISKIEST.

YIELDS deemed the REWARD.

Jeff Bailey : 8/8/2008 1:28:51 PM

There is NO BETTER assessor or RISK than the market.

Use BULLISH % as one way to assess risk for equities.

Jeff Bailey : 8/8/2008 1:26:56 PM

I would think U.S. "junk bond" and an emerging market bond fund as being out on the high-end of risk for fixed income.

Jeff Bailey : 8/8/2008 1:25:52 PM

Beetle's balanced has an iShare "junk bond" in it. Great time to compare SEC yields. Make RISK assessments.

Jeff Bailey : 8/8/2008 1:22:42 PM

iShares JP Morgan Emerging Markets Bond Fund (EMB) $98.78 -0.27% ...

Fact Sheet Link

Jeff Bailey : 8/8/2008 1:20:00 PM

Not sure if anyone has "mentioned" any type of global bond funds.

Jeff Bailey : 8/8/2008 1:18:36 PM

CNBC reporting that ratings agency Fitch cutting Georian debt rating. (See Russian news)

Linda Piazza : 8/8/2008 1:10:50 PM

Next potential resistance on 15-minute closes for the OEX is now 597.75. The OEX is currently 596.97.

Jeff Bailey : 8/8/2008 1:04:51 PM

USO $93.87 -2.66% ...

Jeff Bailey : 8/8/2008 1:03:56 PM

There ... analyst on CNBC factoring in Russian news and implications on OIL

Linda Piazza : 8/8/2008 1:03:32 PM

The OEX's 15-minute 9-ema, potential support on 15-minute closes, is now 595.34. Nearest potential resistance on 15-minute closes is 597.82. The OEX is 596.71 as I type. The pullback off the new high so far looks like a bull flag type of pullback, but the OEX is getting closer and closer to stronger and stronger potential resistance, so the possibility of a stronger pullback is there, too.

Jeff Bailey : 8/8/2008 1:02:47 PM

Could also be a "reason" for dollar's surge today. "Flight to safety?"

Jeff Bailey : 8/8/2008 1:01:49 PM

Russian troops enter South Ossetia ... The Times Story Link

Jeff Bailey : 8/8/2008 12:59:36 PM

Russian troops enter South Ossetia ... China View Story Link

Jeff Bailey : 8/8/2008 12:57:38 PM

When you read YRCW earnings report, good EXCUSE to take handsome gains off the table.

Pay ourselves for hard work and analysis regarding dollar/oil. Understand YRCW's expansion into China.

Keene Little : 8/8/2008 12:56:10 PM

The RUT continues to power higher but the overlapping climb since the July 28th pullback gives it an ending pattern look to it, which is why I placed trend lines on its daily chart to traces out a rising wedge. Price action is either ending soon inside this wedge or else it's getting ready to bust a big move to the upside.

I'm leaning towards the ending pattern but taking great care not to try shorting too early. I continue to see the possibility (not probability) for the RUT to move up to the 743 Fib projection next week and if it continues to move higher in a choppy pattern then my confidence will build towards calling a top. Daily chart: Link

Jeff Bailey : 8/8/2008 12:54:52 PM

Asian Markets Link

$SSEC got whacked.

Jeff Bailey : 8/8/2008 12:53:58 PM

Yen CurrencyShares (FXY) $90.52 -0.64% ... "dollar soars on Japan zone woes?"

See last night's comments I (Jeff Bailey) made regarding dollar and EWJ $11.57 +0.95% and Nikkei-225.

Linda Piazza : 8/8/2008 12:52:28 PM

The RUT's daily 200-sma and -ema's are at 723.61 and 726.85 currently. Bulls want to see those levels maintained into the close or else the daily candle has pierced them and then pulled back, to some a bearish signal. TRAN at 729.86 as I type.

Jeff Bailey : 8/8/2008 12:51:46 PM

Dollar soars higher on euro zone woes ... AP Story Link

Linda Piazza : 8/8/2008 12:51:10 PM

The TRAN in inching up to a new high of the day. It's also just above 5200, round-number potential resistance and also just above the 5195.42 high from 7/23. It's at 5200.62 as I type.

Jeff Bailey : 8/8/2008 12:50:37 PM

12:00 Internals found at this Link

Jeff Bailey : 8/8/2008 12:48:14 PM

Swing trade call exit alert! ... for the YUM Brands YUM Sep. $35 Call (YUM-IG) at the bid of $3.60.

YUM $38.00 +5.14% ...

Linda Piazza : 8/8/2008 12:47:32 PM

Wednesday's OEX high was 598.43. The OEX has next potential resistance on 15-minute closes at 597.88, with that extending up to 599.43 on 30-minute closes. Potential support is at the 15-minute 9-ema, now at 595.36.

Jeff Bailey : 8/8/2008 12:46:17 PM

I haven't been able to monitor news wires this morning.

Jeff Bailey : 8/8/2008 12:45:46 PM

CNBC mentioning something about Russian troops moving into some region.

Jeff Bailey : 8/8/2008 12:39:15 PM

RLX.X 377.21 +4.88% ...

Linda Piazza : 8/8/2008 12:37:59 PM

The VXO finally broke beneath the rising trendline off the 8/6 high and closed a 15-minute period beneath it. Now OEX bulls want to see it pressured lower by its 15-minute 9-ema now at 21.93. However, these things can change quickly. Just a few 15-minute periods ago, the VXO was breaking above important resistance.

Jeff Bailey : 8/8/2008 12:37:47 PM

FFIV $33.06 +4.65% ...

Jeff Bailey : 8/8/2008 12:37:33 PM

YUM $38.07 +4.68% ...

Jeff Bailey : 8/8/2008 12:36:44 PM

Probably BIG reason for outperformance of LARGER caps.

See Beetle's Balanced

Linda Piazza : 8/8/2008 12:36:31 PM

The OEX's 15-minute 9-ema is now 595.

Jeff Bailey : 8/8/2008 12:36:07 PM

There (CNBC) ... RUT.X and dollar comments again ... excellent, excellent.

Small caps not as dependent/impacted by dollar.

Jane Fox : 8/8/2008 12:32:58 PM

Crude low of the day is $115.61.

Jane Fox : 8/8/2008 12:32:34 PM

SPX now at 1288 and 1291 is resistance. I'm not expecting the SPX to break this resistance today because of the huge move it has made already today but I am expecting a break next week.

Jeff Bailey : 8/8/2008 12:28:41 PM

Hmmm ... DXY on 01/22/08 closed 76.34

Tab Gilles : 8/8/2008 12:29:08 PM

Tab Gilles : 8/6/2008 5:25:04 PM

Research in Motion (RIMM) I'm seeing a similar pattern to that of late Dec. '07/ mid-Feb '08. RIMM and technology in general maybe poised to make a run soon.


Has the tech rally started?

CSCO +3.1%; AAPL +2.46%; GOOG +1.78%; MSFT +2.15%; INTC +1.5%; JNPR +3.64%

Jeff Bailey : 8/8/2008 12:27:54 PM

INDU ... note 01/22/08 low

Jeff Bailey : 8/8/2008 12:27:06 PM

INDU +225 points Link ... bulls don't want to see +300.


Jeff Bailey : 8/8/2008 12:24:48 PM

SSO $61.90 +3.01% ...

Jeff Bailey : 8/8/2008 12:23:45 PM

SPX 1,288.32 +1.75% ...

Jeff Bailey : 8/8/2008 12:23:26 PM

SPY alert! $129.02 ... QRTRLY 38.2%

Linda Piazza : 8/8/2008 12:22:13 PM

A new high for the day for the OEX, with the next target on the 15-minute chart at 596.73 and then 597.82. These are also potential resistance levels. So far, so good, but keep updating those profit-protecting plans as the OEX approaches even more significant potential resistance than that seen on a 15-minute chart. OEX at 596.62 as I type.

Linda Piazza : 8/8/2008 12:17:21 PM

The OEX's 15-minute 9-ema is now 593.85, and bulls want to see that hold as support on 15-minute closes, if it's tested.

Linda Piazza : 8/8/2008 12:15:55 PM

For subscribers and anyone else needing it, here's the link for a quote for the TED spread: Link This link is to a delayed quote, as I've mentioned previously, and so won't be helpful for any moment-by-moment comparison, but that's not how I use it anyway. I use it as background for what might be going on underneath the markets, and it's still speaking of elevated default risk or perceived elevation of default risk, at least. The link was provided in a Trader's Corner article explaining basic ideas about the TED spread, found at Link . A follow-up article was found at Link .

Tab Gilles : 8/8/2008 12:12:47 PM

Thank you Jeff.

Linda Piazza : 8/8/2008 12:08:11 PM

The RUT is now finding resistance on 15-minute close at a Keltner line now at 728.91, a line that equity bulls would have preferred to be the first line of defense, one that would hold. In this environment, I caution as I have cautioned in believing too much in anything short-term charts say, but this suggests a pullback to test the 15-minute 9-ema, now at 727.25 but still rising. RUT at 728.34 as I type.

Linda Piazza : 8/8/2008 12:05:44 PM

VXO now 22.26, still climbing after bouncing from its last rising trendline test. It's certainly not adversely impacting the OEX yet, perhaps because there's potentially stronger resistance at 22.65, but do keep a watch on this. Balance it with the fact that the TRIN is currently below its 15-minute 9-ema, although at 1.16 only slightly so.

Jeff Bailey : 8/8/2008 12:04:13 PM

You see? I (Jeff Bailey) have NO CLUE as to what TED is telling me. Or should be telling me.

IF SPX gets the trade for launch (as I believe, based on observation that it will), Linda can give us the TED at that moment (UP/DOWN) from 1.13.

Then perhaps another useful indicator for something I have no clue about.

Linda Piazza : 8/8/2008 12:03:45 PM

If you're a condor or credit-spread trader and you have open AUG bull put spreads, this morning would be another time to check to see if you can close them for a pittance, locking in most of your profit and removing risk from your portfolio. As I often mention, this is a personal choice, but one I've been told floor traders would definitely make to eliminate some of their portfolio risk. I feel one way about it and others feel differently. Make a habit of looking every day, however, and you'd be surprised how often you can find a chance to cut some risk. I've already closed out some of my SEP bull put spreads and have an order in now to try to close 25 SEP SPX 1080/1070's that I have, although I don't think that order is going to go. Because it's so early in the cycle and I'm hoping for another chance at an entry, my order is in for more than you'd probably like to give up, but it locks in 60% of the original credit I took in. I don't always get a chance to get back in, but sometimes I do.

Jeff Bailey : 8/8/2008 12:01:46 PM

Making notes ... from my 11:41:02 and Linda's 11:41:48

Jeff Bailey : 8/8/2008 11:59:10 AM

Great work Tab!

Linda Piazza : 8/8/2008 11:58:43 AM

VXO is currently 22.13, bringing it above the Keltner resistance on 15-minute closes that had previously held all day. This is, however, resistance on 15-minute closes, and we haven't completed this 15-minute period. That potential resistance is now at 22.10. I've been watching all day as the VXO tested the rising trendline off the 8/6 low. Equity bulls don't want to see sustained 15-minute closes above that Keltner resistance, particularly if the VXO then starts bouncing after piercing that resistance.

Linda Piazza : 8/8/2008 11:55:31 AM

FWIW, the OEX's weekly closes for the last three weeks have been 580.57, 580.53, and 582.09. On the week of 7/07, the OEX closed way down at 566.81, but the closes the two previous weeks were at 578.13 and 579.62.

Tab Gilles : 8/8/2008 11:54:50 AM

The Dollar has moved more than 2% in a week....THAT IS A BIG MOVE!!!!!

As I pointed out over 2 weeks ago and again this past Tuesday, the Dollar was set to rally nearterm and the USO decline to $94.

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.

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

A $100 price ($WTIC) for crude would be a 50% retracement. Link

USO currently trading at $93.53 -$2.91 (3.05%). Dollar/Euro 1.5035 and $WTIC $116.19

Linda Piazza : 8/8/2008 11:51:05 AM

The TRAN is still holding up strong, so far. It currently looks as likely to test potential support, near 5160 on 15-minute closes, as it does to test resistance, near 5204. It's at 5181.24 as I type.

Jeff Bailey : 8/8/2008 11:50:43 AM

Wachovia (WB) $16.98 -0.75% ... WB-UD $3.90 x $4.10

Linda Piazza : 8/8/2008 11:49:06 AM

The OEX's 15-minute 9-ema is now 593.48. Bulls want that to hold on 15-minute closes. The 30-minute chart suggests a potential pullback toward 592.67, however.

Jeff Bailey : 8/8/2008 11:48:14 AM

Oh my! ... Silver get'n whacked.

Jeff Bailey : 8/8/2008 11:46:51 AM

That SUC-IJ is about 2/3 position for RISK MANAGED MM profile account that I run here in the market monitor.

Jeff Bailey : 8/8/2008 11:45:23 AM

DXY 75.78 +1.65% (30-minute delayed) ...

Jeff Bailey : 8/8/2008 11:44:53 AM

Swing trade call alert! for one (1) of the ProShares Ultra S&P500 SSO Sep $62 Calls (SUC-IJ) at the offer of $3.10.

SSO $61.41 +2.19% ...

VIX.X 20.52 -2.97% ...

Linda Piazza : 8/8/2008 11:41:48 AM

TED spread currently 1.13.

Jeff Bailey : 8/8/2008 11:41:02 AM

S&P 500 ($SPX) 1,284.10 +1.42% ... 10-point box Link

5-point box Link

Chart(s) from WEDNESDAY's wrap Link

and Link

and Link

Linda Piazza : 8/8/2008 11:40:46 AM

TRIN back at 1.19, with only one 15-minute close below that 15-minute 9-ema now at 1.19. All I can say is that it still looks as likely to climb above 1.40 as to drop to 1.06 or perhaps 1.00.

Linda Piazza : 8/8/2008 11:39:19 AM

VXO at 21.97, bouncing again from its trendline test but about to face potentially strong resistance on 15-minute closes at 22.10. Equity bulls want support lost; equity bears want resistance breached.

Jane Fox : 8/8/2008 11:38:27 AM

All the internals are in sync. THE VIX hovering at daily lows usually means the S&P futures (ES) will make new daily highs thus the other indexes should as well. Link

Linda Piazza : 8/8/2008 11:38:11 AM

The OEX's 15-minute 9-ema has now risen to 593.47, perhaps close enough under the OEX's consolidation zone from this morning that the OEX might not need to dip down to retest it, a possibility I mentioned earlier. If the OEX breaks to a new high, look for next potential resistance on 15-minute closes at about 596.25 and then at about 597.85. If it does dip to that 15-minute 9-ema, OEX bulls want that to hold as support. OEX at 595.23 as I type with the previous high of the day at 596.19.

Jeff Bailey : 8/8/2008 11:36:57 AM

Russell 2000 (RUT.X) alert! 729.78 +2.29% ... 4-point box Link

Chart from WEDNESDAY's Wrap Link

Keene Little : 8/8/2008 11:36:14 AM

After that strong short-covering spike (thanks to a few well-timed buy programs to jam it higher) the buying just stopped. The sideways consolidation this morning should be bullish for another leg up with in this manipulated environment (exacerbated by opex positioning) it makes it harder to interpret the technical indicators. Throw in a summer Friday and slower volume and it could be a little more treacherous than usual for traders.

Jeff Bailey : 8/8/2008 11:33:32 AM

Beetle's Balanced Benchmarks at this Link

Upper is benchmarked from shorter-term 06/30/08 close.

Lower is benchmarked from longer-term 12/31/07 close.

Here too the DXY tracked, as well as other ASSET classes.

Linda Piazza : 8/8/2008 11:27:40 AM

The OEX's 15-minute 9-ema has now risen to 593.17. This rapid rise while the OEX consolidates sideways is so far good news for OEX bulls because a test of that potential support won't mean a deep drawback now. Sometimes when the gains are strong enough and the 9-ema is rising quickly enough, the test doesn't even have to occur. The 9-ema just closely approaches the OEX and it bounds higher.

However, I have to say that although I was warning this morning that you shouldn't assume that support that had held since 7/15 would break this time, I now have to say that neither should you assume that resistance that's held on daily closes since before then will either. One version of that rising wedge resistance (a best-fit version that encompasses daily closes only and not all intraday highs) is now located somewhere near 598-599 and there are Keltner resistance levels showing up all through there on the intraday charts, too. So, although further gains can and may occur, the possibility exists that resistance that has held will continue to hold and that the OEX can be stalled or even knocked back. What happens in a few minutes' time can certainly be reversed in the hours we have left in this trading day.

Jeff Bailey : 8/8/2008 11:25:18 AM

Hmmmm ... some pretty close PRICE-to-PRICE match

Jeff Bailey : 8/8/2008 11:24:48 AM

USO $92.32 -2.90% ...

Jeff Bailey : 8/8/2008 11:24:26 AM

XAL.X 24.70 +6.37% ... 150-day SMA right here!

Jeff Bailey : 8/8/2008 11:23:11 AM

Chesapeake Energy (CHK) $43.59 -3.30% Link ...

Linda Piazza : 8/8/2008 11:22:26 AM

The VXO is back to test the rising trendline off the 8/6 low, with the VXO at 21.91 as I type. OEX bulls want to see this support lost on 15-minute closes while equity bears want to see the VXO bounce above and maintain values above resistance currently at 22.10.

Jeff Bailey : 8/8/2008 11:22:12 AM

Continuous Nat. Gas ($NATGAS) $0.20 box to match futures Link

Linda Piazza : 8/8/2008 11:21:01 AM

The TRIN finally lost the support of its 15-minute 9-ema, good news for equity bulls if it lasts, an important caveat. That support is now near 1.17, and the TRIN is 1.14, vulnerable now to a test of 1.05 if it can't break back above that 9-ema.

Keene Little : 8/8/2008 11:19:27 AM

Updating the DOW 180-min chart posted last night I'm trying to show on one chart both of the higher-probability scenarios that I showed on the DOW and SPX charts. With this morning's rally there is still the possibility that we'll get another leg down as part of a larger sideways triangle consolidation pattern that runs through next week (dark red on the chart) before rallying into the latter part of the month: Link

The pink wave count calls for an end to the bounce early next week as it finishes a small rising wedge pattern for the rally off the July 28th low. The rising wedge pattern has 11800 as an upside target whereas the bullish triangle pattern could target as high as 12100-12200 (depending on where the triangle ends). More immediately bullish would be a strong rally above 11800 in the next day or two as that would indicate we'll probably see a rally well above 12200 and likely a strong opex week.

Linda Piazza : 8/8/2008 11:18:59 AM

After testing that Keltner resistance that I've been mentioning this morning, the RUT just pulled back to test support, now at 728.26, as well as the 8/6 high of 727.71. The RUT pierced that potential support and dropped to 727.57, but then closed the just-completed 15-minute period above the Keltner support. It's at 728.71 as I type, still between potentially strong support and potentially strong resistance, now at 729.87 on 15-minute closes. If it loses that support, it looks vulnerable to a pullback to about 726, the location of the 15-minute 9-ema.

Jeff Bailey : 8/8/2008 11:16:32 AM

USO $93.57 -2.97% ... its 150-day SMA currently at $92.32.

Linda Piazza : 8/8/2008 11:16:02 AM

The OEX still looks vulnerable to a 15-minute 9-ema test, but if the OEX keeps producing this type of sideways/down pullback toward it, the 15-minute 9-ema will rise rapidly beneath it, and it won't have to pull back too far to test it. Those hoping for a deeper pullback should keep this in mind. The OEX needs to tumble down fairly quickly for those traders to hope for a pullback to 592.02-592.66, the current next support level. So far, that's not happening, but you can imagine the mighty battle going on here between buyers and sellers. OEX at 594.51 as I type. If the OEX breaks to a new high for the day instead of pulling back, always a possibility in this environment, Keltners suggest a next potential target at 597.86, where resistance might kick in again.

Jeff Bailey : 8/8/2008 11:15:32 AM

On Feb 26, 2008, USO closed $81.48

Jeff Bailey : 8/8/2008 11:13:42 AM

FXE's bar chart from WEDNESDAY's market wrap Link

Tab Gilles : 8/8/2008 11:13:04 AM

Chesapeake Energy (CHK) $ 43.70 -$1.40 (2.86%) the 300-ema didn't hold $42 is next. Link

Jeff Bailey : 8/8/2008 11:11:13 AM

FXE $0.50 box Link

Jeff Bailey : 8/8/2008 11:09:52 AM

US Oil Fund (USO) $0.50 box Link ... still some room to its BEARISH vertical count of $85.00.

Linda Piazza : 8/8/2008 11:07:55 AM

TRIN back down to test its 15-minute 9-ema now. Equity bulls want to see that support lost for good and for the TRIN to eventually drop beneath and maintain 15-minute closes beneath about 0.98. TRIN at 1.21, with the 15-minute 9-ema now at 1.19. As long as it's maintaining 15-minute closes at or above that moving average, it presents as much possibility of climbing toward the next upside target as it does dropping to next lower one.

Linda Piazza : 8/8/2008 11:04:23 AM

The OEX is beginning to look somewhat vulnerable to 592.02-592.65, where potential support on 15-minute closes can be found. That's not a given--nothing is in this environment--but it's certainly looking like a possibility. Evaluate what that will do to your profits, just to let the OEX test that, before you know for certain what will happen next. Decide if you're willing to weather that test, if it comes, or want a closer stop.

Linda Piazza : 8/8/2008 11:02:23 AM

TRIN 1.26. Equity bulls, be warned that this is not supporting your trades, but it's only one indicators of many, so it's not proof of anything yet. Keep updating those profit-protecting plans, however. I've been warning that the chart setup here gives as much possibility of a rise toward 1.45 as it does a drop toward 1.04, and you don't want to see that rise toward 1.45 if you're in bullish trades.

Jeff Bailey : 8/8/2008 10:59:53 AM

Again ... as noted SEVERAL MONTHS ago; we can NOT equate an exact DXY amount to an exact stock/index amount, but we can understand impact of dollar strength/weakness.

And listen to the Fed and Treasury.

Linda Piazza : 8/8/2008 10:59:15 AM

The TRAN and RUT both look as if they're going to rise to challenge potential resistance on 15-minute close again. That's at 5199.10 for the TRAN and was at 729.75 for the RUT, with the RUT moving just above that as I typed. Remember this is potential resistance on 15-minute closes with several minutes left in this period.

Jeff Bailey : 8/8/2008 10:57:43 AM

US Dollar Index (SC: $USD) 0.50 box Link ... yesterday's trade at 74.50 was a reversing higher PnF buy signal. Today's action up to 75.89. So, chart additional X's to 75.50.

Can grow bullish vertical count to 72.00 + ((8 x 3) x 0.50) = 84.00 at this point.

Linda Piazza : 8/8/2008 10:56:41 AM

TRIN 1.23, still holding the potential support of its 15-minute 9-ema on 15-minute closes at about 1.17, but still just barely holding that support. However, this holding of support makes it as likely that the TRIN will move up toward a Keltner target now at 1.46 as to drop toward one now at 1.4 or maybe even to one at 0.98. That's worrisome for equity bulls.

Linda Piazza : 8/8/2008 10:53:49 AM

VXO now 22.21, still bouncing off its 21.76 low of the day. OEX bulls really don't want to see it maintain values above this, and especially above about 22.75.

Jane Fox : 8/8/2008 10:53:05 AM

It is amazing how much stronger the small caps are compared to the S&P and DOW. Both the SPX and DOW have not been able to break their 38.2% retracement levels whereas the RUT is challenging its 78.20 retracement. Link

Linda Piazza : 8/8/2008 10:52:41 AM

Next potential support--although possibly light support--for the OEX on 15-minute closes is near 594. OEX bulls would like to see that hold. Next support, looking a bit stronger, is near 591.90-592.30. Bulls definitely want that to hold as support. So far, the OEX is holding up well, at 594.93 as I type. Next resistance looks to be near 597.87 and then 599.78, and I would take both seriously if in bullish positions, knowing ahead of time what I intended to do if they were tested.

Linda Piazza : 8/8/2008 10:49:33 AM

The RUT tests potential resistance on 15-minute closes now at 729.72. This same resistance, when at a slightly different level, held back the RUT's advances on 8/6, so this is an important test. Currently, there's potential bearish price/RSI divergence as this test occurs, but RSI only goes so high and so there's often bearish divergence seen in such instances. It certainly should be heeded and used as a reason to keep updating those profit-protecting plans, particularly as Keltner resistance is being tested, but it's not yet proof of anything. RUT bulls and any equity bulls who feel that the RUT is leading advances don't want to see it drop below about 728 and maintain values below that, though, as that suggests a possible drop back to 724-725 and maybe lower. RUT at 729.20 as I type. So far, so good, but know what you're watching.

Jeff Bailey : 8/8/2008 10:48:38 AM

USO 5-day% -6.90%; 20-day% -9.93%

UGA 5-day% -5.80%; 20-day% -8.58%

VLO 5-day% +4.06%; 20-day% +3.65%

TSO 5-day% +15.52%; 20-day% +6.11%

Linda Piazza : 8/8/2008 10:45:30 AM

TRIN is 1.19, hugging the potential support at its 15-minute 9-ema at about 1.15. Equity bulls would prefer that it not maintain that support on 15-minute closes, as it may do for the second 15-minute close in a row. That suggests the possibility that it could as easily climb toward 1.44 as drop toward 1.04 or maybe even 0.98.

Jeff Bailey : 8/8/2008 10:44:31 AM

FXE $150.67 -1.75% ...

Jeff Bailey : 8/8/2008 10:44:12 AM

USO $51.19 -1.76% ...

Jeff Bailey : 8/8/2008 10:43:56 AM

PBR $51.15 -1.84% ...

Linda Piazza : 8/8/2008 10:43:20 AM

TRAN's pullback is minimal so far. OEX, Dow and SPX bulls would prefer not to see it drop below and maintain values below about 5150, as such a drop would suggest a deeper one, perhaps to 5120 and perhaps lower. TRAN at 5174.18 as I type.

Jeff Bailey : 8/8/2008 10:41:22 AM

Bugger ... VLO $34.17 +3.73% ...

Jeff Bailey : 8/8/2008 10:39:55 AM

Catch the wave.

Jeff Bailey : 8/8/2008 10:39:31 AM

Dollar, oil, transports.

Dollar, oil, and broader market?

Jeff Bailey : 8/8/2008 10:38:55 AM

Should note too ...

JBLU $5.64 +2.91%

CAL $16.61 +12.74% ...

TRAN 5,178.77 +3.26% ...

Linda Piazza : 8/8/2008 10:38:16 AM

VXO now 22.13.

Linda Piazza : 8/8/2008 10:37:42 AM

The OEX's 15-minute 9-ema is now at about 591.80, converging with other Keltner and trendline support. OEX would prefer that lighter potential support now near 593.68 hold on any pullbacks, however.

Please remember in this environment that anything that can happen in a few minutes can be reversed in a few minutes, too. I don't see any signs of that occurring yet, although I'm keeping a close watch on the VXO, bouncing from a trendline test, and the A/D line, not yet pulling back at all as it tests Keltner and historical resistance near 1400-1600. A/D line at 1321 as I type.

Jeff Bailey : 8/8/2008 10:36:45 AM

USO $94.09 -2.43% ...

Jeff Bailey : 8/8/2008 10:36:30 AM

FXE $150.63 -1.78% ...

Jeff Bailey : 8/8/2008 10:36:11 AM

DXY $75.83 +1.72% (30-minute delayed) ...

Jeff Bailey : 8/8/2008 10:35:49 AM

YRCW $19.43 +6.75% ... "ditto"

Jeff Bailey : 8/8/2008 10:35:04 AM

Dow Jones U.S. Trucking Index (DJUSTK) 363.19 +3.54% ... sticks its head above 50% conventional (05/07/08 high to recent 07/03/08 low).

Linda Piazza : 8/8/2008 10:34:08 AM

VXO bouncing to 22.04 as I type.

Linda Piazza : 8/8/2008 10:33:36 AM

Again, whether it's needed or not, I'll provide this for the purpose of warning OEX bulls just to keep their profit-protecting plans updated. Earlier I mentioned that the VXO was approaching the rising trendline off the 8/6 low. So far, the VXO is holding that support, although it's still testing. It's at 21.92 with that support at about 21.90 if I'm guestimating it correctly. Bulls want to see that trendline's support broken: bears, the opposite. And, as I typed, the VXO dropped to 21.81 after closing that last 15-minute period above that trendline. Keep a watch on this, however, as OEX bulls don't want to see it pop right back above that trendline again and then bounce.

Jeff Bailey : 8/8/2008 10:33:20 AM

10:00 Internals at this Link

Keene Little : 8/8/2008 10:29:56 AM

We got the confirmation (quicker than I thought it would happen) that the pullback from Wednesday was just a correction now that yesterday afternoon's highs have been exceeded. By the looks of this morning's large spike to the upside I'd say yesterday was a bear trap. As we often see, Thursday prior to opex looks to have turned into a head-fake day again.

Linda Piazza : 8/8/2008 10:27:03 AM

A/D line still climbing, at 1222 as I type. The TRAN hit next potential resistance on 15-minute closes now at 5195, and has pulled back to 5183.3 as I type, but that's not much of a pullback. OEX, SPX and Dow bulls would prefer that it not pull back below about 5150, however, sustaining values below that. So far, so good.

In all honesty, although I warned that today could see support hold on a test of the 10-sma, I didn't expect this kind of action. When we see prices reversed so quickly on a nearly routine basis, it's hard to say anything cogent about what's happening. The OEX is fast approaching yesterday's high and the top of the rising wedge shape as well as further potential resistance on the daily chart up to about 601. What else can I say?

Jane Fox : 8/8/2008 10:23:41 AM

My goodness gracious look at the DXY, a chart of how the greenback is trading against a basket of currencies. The DXY is the standard most technicians use to determine if the US $ is falling or climbing. Link

Linda Piazza : 8/8/2008 10:23:27 AM

Whether the warning is ultimately needed or not, I'll give it for the purposes of urging bulls to keep updating their profit-protecting plans: the VXO is currently testing a rising trendline off the 8/6 low with that trendline now at about 21.90 and the VXO currently at 21.93.

Jane Fox : 8/8/2008 10:21:31 AM

Same story for the DOW. Link

Linda Piazza : 8/8/2008 10:20:53 AM

Here the OEX is back testing that 594 zone that gave it so much trouble all day yesterday, with the OEX already a little above it at 594.49. On pullbacks, bulls want to see the OEX find support near 591.60, the site of the descending trendline off the 8/6 high and of potential Keltner support on 15-minute closes at 591.60. Further potential support is near 591.60. As I've said on other occasions lately, however, when prices barrel through a supposedly strong S/R level, they can barrel through as easily the other way, too.

Jane Fox : 8/8/2008 10:20:42 AM

I don't imagine resistance at 1291 will break today but it certainly could on Monday. Link

Jane Fox : 8/8/2008 10:19:19 AM

Egads the AD Line is now a bullish +1143 and climbing. VIX supporting the bullishness with new daily lows. The bulls certainly have the ball now.

Jane Fox : 8/8/2008 10:18:07 AM

Crude now under $116 at $115.80.

Linda Piazza : 8/8/2008 10:17:57 AM

Crazy stuff, isn't it? I began warning yesterday that sometimes the only reversal seen when a reversal pattern is produced, even as powerful a one as we saw over the previous three days, is the candle needed to confirm the pattern. I still, however, continue to urge caution here. Keep moving your stops up as the OEX climbs if you're in bullish positions. If you're in bearish ones, all you can do is honor your stops because we really don't know what's going to happen next. The A/D line is finally hitting potentially strong resistance, but hasn't made any move to reverse. Prices have nearly reversed all of yesterday's losses, in just a few minutes' time.

Jeff Bailey : 8/8/2008 10:16:51 AM

SSO $61.14 +1.74% ...

Jeff Bailey : 8/8/2008 10:16:33 AM

Swing trade long cancel order alert! ... Please cancel the order to buy the SSO at $58.60 (from 08/07/08 @ 04:37:09)

Linda Piazza : 8/8/2008 10:14:16 AM

The TRAN broke higher again, so that's in bulls' favor, but it's still essentially testing potential resistance on 15-minute closes now near 5150. It's above it now, at 5169.33 as I type, but with several minutes to go in the 15-minute period.

Linda Piazza : 8/8/2008 10:11:24 AM

The A/D line's chart shows potential resistance and a possible upside target at just above 1100. The A/D line is currently 936, so watch for the possibility that resistance will kick in soon.

Linda Piazza : 8/8/2008 10:05:14 AM

The OEX ended the just-concluded 15-minute period below potential Keltner resistance on 15-minute closes at 589.54, but it's already pushing above it now to test next resistance in the 590-591.55 zone, showing up on both 15-minute and 30-minute charts. It also has not completed a 15-minute period above that lower resistance and it may yet hold on 15-minute closes. OEX at 590.08 as I type. Be careful with your assumptions here. It's obvious that there's a bounce attempt, but honestly not so obvious what will happen as a result.

Keene Little : 8/8/2008 10:04:39 AM

The two possibilities that I see from here are either a consolidation into this afternoon before pressing lower again (which would create a bearish 5-wave move down from Wednesday's high) or we'll get a rally back above yesterday afternoon's bounce high (which would leave a bullish 3-wave pullback from Wednesday's high).

So the key levels for the moment are SPX 1283 to the upside and this morning's low near 1262. That's a wide range but until one of them breaks it's difficult to determine the next market move.

Linda Piazza : 8/8/2008 10:03:15 AM

The A/D line is now up to +693 from its open at -168 and its low of -333. RSI has been above 70 since early in the morning. While RSI can and sometimes does trend above 70, I always urge caution when it bumps up above it first thing in the morning because such early morning moves (as well as late-day ones) are sometimes suspect. That's the whole reason pop-and-drop and similar names were coined. However, for now, the A/D line is still moving higher and still supporting bullish hopes, but just be aware that RSI is signaling that while upward momentum is strong, bulls need to be on their toes with their profit-protecting plans.

Jeff Bailey : 8/8/2008 10:02:28 AM

FXE $150.44 -1.90% ...

Jeff Bailey : 8/8/2008 10:02:01 AM

USO $94.05 -2.47% ...

Jeff Bailey : 8/8/2008 10:01:24 AM

Swing trade call exit alert! ... for the YRC Worldwide YRCW Oct. $15 Call (YUX-JC) at the bid of $5.30

YRCW $19.34 +6.26% ...

Linda Piazza : 8/8/2008 9:59:31 AM

Those feeling bullish the OEX need to be careful here as this resistance being tested could still hold. The TRAN did break well above its descending trendline off the 8/5 high but it just powered right up to test that 8/5 high of 5156.86 and it's pulling right back from that test. It's 5132.84 as I type.

Linda Piazza : 8/8/2008 9:57:35 AM

The OEX has now bounced and is testing that potential Keltner resistance on 15-minute closes that's now up to about 589.54. The OEX is above that as I type, but there are still several minutes until the close of this 15-minute period. If the OEX gets past this, the next potential resistance is near 590.55. OEX at 589.89 as I type.

Jane Fox : 8/8/2008 9:52:54 AM

Crude is now under $117 at $116.60

Jane Fox : 8/8/2008 9:51:33 AM

AD line, as Linda noted, opened at around +200-+400 which is about as neutral as you can get. No surprise here.

Linda Piazza : 8/8/2008 9:43:39 AM

The TRAN is fast approaching a best-fit version of a declining trendline off the 8/5 high. That trendline (cutting off one candle shadow) is now at about 5100, with the TRAN at 5092.73 as I type. OEX, SPX and Dow bulls want to see the TRAN power above that trendline and, importantly, maintain values above it. Bears want to see the TRAN knocked back from it, or, if it breaches it, soon reverse back below the trendline.

Linda Piazza : 8/8/2008 9:39:36 AM

Keltner outlook on the A/D line: Despite its first negative prints, the A/D line made its first prints in the upper or bullish half of its Keltner channels on the 15-minute chart. Support appears to be located from -215 down to about -400. Historical resistance is near +400. A/D line at +277 as I type with RSI already above 70.

Linda Piazza : 8/8/2008 9:37:25 AM

Here's is where those who hope to see a bounce in the OEX need to see support hold. Whether it will or not is still in question and whether any bounce would get much above 588-589.50 is even more of a question. If the OEX does bounce, that's where I'd watch for rollover potential.

Linda Piazza : 8/8/2008 9:36:22 AM

The early move down has shoved potential support on 30-minute closes down to 584.38 for the OEX. OEX at 585.03 as I type, testing the daily 10-sma.

Jane Fox : 8/8/2008 9:30:42 AM

WASHINGTON (MarketWatch) -- U.S. firms cut back their employees' working hours in the second quarter, keeping productivity growth relatively high, according to Labor Department data released Friday.

Inflationary pressures were subdued, the data showed, with real hourly compensation falling -- a hopeful sign for the fight against inflation, but troubling for economic growth.

Productivity in the nonfarm business sector rose a 2.2% annualized rate in the second quarter, a bit slower than the 2.7% rate that economists surveyed by MarketWatch had been looking for. See Economic Calendar.

Unit labor costs -- a key gauge of inflationary pressures from labor markets -- rose 1.3% compared with the 1.6% rate expected by economists.

Output rose an annualized 1.7% in the quarter, while hours worked dipped 0.5% and real hourly compensation fell by 1.4%.

Linda Piazza : 8/8/2008 9:29:51 AM

The ES futures contract is slightly below fair value as I type, and an extrapolation of where the OEX might go from that action suggests a drop of about a point, so a drop toward yesterday's low and toward the 10-sma, now at 584.87. My comments from my 3:51:03 post yesterday afternoon still apply. Here's where the OEX is with respect to that daily 10-sma and the rising trendline off the 7/15 low: Link As I mentioned yesterday, the 15-minute chart suggests the possibility of a 30-sma test (the black moving average on the chart), but bears shouldn't assume that trendline support that's held since 7/15 is going to fail on a daily close. It could fail, especially as the formation in which the OEX has been climbing looks like a bearish rising wedge. As I also mentioned yesterday afternoon, although a formation has bearish connotations, you can't rely on theory as to the way it will break as your trading account will suffer if you do so. Let the theory inform your trading plans but let price action put them into effect. If that rising trendline is broken, watch for the possibility that support at the 30-sma could kick in and that the OEX might be doing nothing but broadening a rising wedge into a regular price channel. Again, the 30-sma could fail, too, if tested, but at least factor in the possibility that the OEX is just broadening that channel.

For a short-term look, the 30-minute chart suggests possibly strong support on 30-minute closes at 584.52. If that doesn't hold, and if the OEX sustains values below that on 30-minute closes, these charts suggest the possibility of a test of that 30-sma.

If the OEX bounces after a test of 584-585 or if it bounces first thing, watch for potentially strong resistance on 15-minute closes to kick in around 588-589.50.

Jane Fox : 8/8/2008 9:23:12 AM

WASHINGTON (MarketWatch) -- Fannie Mae, the biggest U.S. buyer of home mortgages, reported Friday a wider-than-expected loss for the second quarter and cut its dividend as the company said the struggling housing market and credit expenses again hurt its performance.

Investors reacted negatively. Shares of Fannie Mae were off 13% in pre-market trading. Fannie Mae lost $2.3 billion, or $2.54 a share, a reversal from the $1.9 billion, or $1.86 a share, earned in the year-ago second quarter.

The company, following on the heels of smaller sibling Freddie Mac earlier this week, slashed its quarterly dividend, with the payout now set at five cents a share. Fannie's dividend had previously been 35 cents a share.

Jane Fox : 8/8/2008 9:21:21 AM

Here is the NYBOT Commodities Index. Taken to the woodshed!! Link

Keene Little : 8/8/2008 9:19:50 AM

Equity futures tried rallying some during the overnight session but gave it all up, and then some, since the highs around 6:00 AM. As we head for the opening bell it's looking like we could open in negative territory. The uptrend lines from July 15th (depending on which pullback low is used) are near SPX 1262 and 1257 so those are the levels to watch for support if it drops down there.

Jane Fox : 8/8/2008 9:18:21 AM

Corn... Link

Jane Fox : 8/8/2008 9:17:17 AM

Soybeans... Link

Jane Fox : 8/8/2008 9:16:40 AM

Silver... Link

Jane Fox : 8/8/2008 9:15:54 AM

Gold continues its selloff as well. Link

Jane Fox : 8/8/2008 9:15:13 AM

Crude continues its selloff and is now under $118.00. Link

Jane Fox : 8/8/2008 9:02:26 AM

Here are your overnight charts. Nothing too much going on so I believe the AD line will open quite neutral this morning. Link

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