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Jeff Bailey : 9/11/2008 2:44:24 AM

AMEX a/d was 647:609 with NH/NL 13:167

BB a/d was 486:766 with NH/NL 143:313

Two markets that most follow most and put most weight in is NYSE and NASDAQ listed stocks.

Jeff Bailey : 9/11/2008 2:42:07 AM

Closing Internals at this Link

Tomorrow I'll have enough NH/NL measures to post the NYSE and NASDAQ 5-day NH/NL ratios. Another week then the 10-day NH/NL ratios.

Jeff Bailey : 9/11/2008 2:35:14 AM

Yes ... you KNOW me too well ...

UNE-AJ ($3.20 x $3.50) from 8/27/08 entry at $6.80 (see MM) when UNG itself was trading $39.50 Link

Jeff Bailey : 9/11/2008 2:21:43 AM

Check out Tab's 10:28:04 PM post ... is Nat Gas a new "hiding place" compared to oil?

RELATIVE strength speaking.

Here's a PnF of UNG vs. USO on 1-point box Link

Quantitative analysis would say a measure of 43.00 is needed.

Jeff Bailey : 9/11/2008 2:04:52 AM

Oil rises in Asia as Ike strengthens toward Texas ... AP Story Link

Jeff Bailey : 9/11/2008 2:02:31 AM

Dorsey pod ... do mention their various products, so a bit "sales" sounding in parts. You can tell they've got the confidence in their system of market/sector/stock selection process though.

Jeff Bailey : 9/11/2008 2:00:12 AM

Dorsey pod ... Jim Rodgers quote ... "successful investing is an uphill run against human nature."

Talking about the volatility and some trader/investor fear of doing anything.

Jeff Bailey : 9/11/2008 1:56:39 AM

I mentioned just yesterday the rather "quick" changes in the major market bullish in just the last week. Usually more "slow" moving.

Jeff Bailey : 9/11/2008 1:55:21 AM

Dorsey pod ... "velocity of the moves" unusual and tough to stomach.

Jeff Bailey : 9/11/2008 1:48:51 AM

ym08u 11,248 is down 43.

ym08z is down 49 at 11,235

Jeff Bailey : 9/11/2008 1:47:40 AM

Kind'a what I teach with the "Beetle's Balanced" when we rebalance each quarter.

Hey, we're coming up on an end of a quarter!

Jeff Bailey : 9/11/2008 1:46:50 AM

Dorsey pod ... Fannie and Freddie problem ... portfolio rebalancing actually adapted ahead, got many OUT of harms way before the "crash."

Jeff Bailey : 9/11/2008 1:43:48 AM

So true ... don't hear all that much about health insurance costs these days.

Might get an earfull after this fall's election though.

Jeff Bailey : 9/11/2008 1:42:49 AM

Dorsey pod ... "oil prices decline, now bloggers finding other things to worry about."

Jeff Bailey : 9/11/2008 1:41:51 AM

Too often I see bloggers jumping from "one reason, to another" to make a case.

Jeff Bailey : 9/11/2008 1:40:55 AM

Dorsey pod ... analogy ... "doesn't help to get upset when you're in a traffic jam. Keep jumping from one lane to another to try and get around." Take your time, roll the window down, turn the radio up.

Jeff Bailey : 9/11/2008 1:38:49 AM

No mention of "earnings" at this point.

Jeff Bailey : 9/11/2008 1:38:31 AM

Excellent, excellent, or at least I agree.

Asking "why?" and then looking for answers in the CHARTS.

Jeff Bailey : 9/11/2008 1:37:16 AM

Dorsey pod ... "euro use to be a hiding place, no longer working, where's the new hiding place?"

"Like a washing machine right now."

Jeff Bailey : 9/11/2008 1:36:23 AM

Can really see the "hiding places have change" in Beetle's Balanced can't we?

Jeff Bailey : 9/11/2008 1:35:01 AM

Dorsey pod ... "the hiding places have changed in last 9 weeks" ... "takes time for institutions to get their positions" as they adapt to change.

Jeff Bailey : 9/11/2008 1:32:53 AM

Dorsey pod ... "clearly some stress in highly leveraged hedge funds" ...

Jeff Bailey : 9/11/2008 1:33:52 AM

Ok, ok ... we saw that in the Beetle's Balanced ... makes sense.

But capital coming here has gone into Treasuries. From tonight's wrap Link

Jeff Bailey : 9/11/2008 1:30:42 AM

Dollar getting "stronger" as a result.

Jeff Bailey : 9/11/2008 1:29:56 AM

Talking about euro bond fund exposure trends and changes. Starting to see a shift out of international exposure. Cut in 1/2.

Jeff Bailey : 9/11/2008 1:27:08 AM

Backtesting of RELATIVE STRENGTH model not just internal, but several university professors testing its viability.

Jeff Bailey : 9/11/2008 1:22:22 AM

Hey ... check out AA PnF chart just posted at 01:10:41 ... see upper right corner and Alert! RS (MKT) to Sell?

Dorsey/Wright mentioning that Relative Strength model for DECADE test still confirmed.

AA would NOT fit a bull model when RS to MKT is SELL. Aluminum is a Non Ferrous Metal commodity.

Jeff Bailey : 9/11/2008 1:16:45 AM

Talking about RELATIVE STRENGTH and "back testing"

Ah backtesting ... does it stand the test of time. Are the times today, the same as they were then?

Jeff Bailey : 9/11/2008 1:15:15 AM

Gosh ... now going back decades.

"buy and hold not panning out..."

Jeff Bailey : 9/11/2008 1:13:49 AM

OK ... Listening to Dorsey/Wright podcast, some more "voice of reason" regarding recent technicals. Hey, they're starting out with where we are from 12/31/07 close!

Talking about "small caps have done RELATIVELY well."

Jeff Bailey : 9/11/2008 1:10:41 AM

AA's PnF Chart ... reports usually 1st week of October, January, April and July.

Link

I came up with trailing 12-months (ttm) EPS of $2.10 (See earnings history). Yahoo! Finance quote page at $2.42 Link

I tend to be more "bearish/conservative" and would use LOWER earnings data from earnings history page Link

If short/put, maybe be more "bullish/euphoric" and use HIGHER earnings data from quote page.

Or split the difference.

Jeff Bailey : 9/11/2008 12:35:46 AM

Again ... AA's most recently completed quarter Link ... Last quarter we quickly reviewed the Western Australia refining impact, and negative impact on AA's earnings.

Jeff Bailey : 9/11/2008 12:27:59 AM

Alcoa (AA) $27.19 ... Yahoo! Finance has a pretty good "Analysts Estimates" page Link

AA is one of the first "big guns" to kick off new earnings season (10/07/08).

Earnings History (per share). Top line (revenue) dependent on aluminum prices, and customer orders delivered.

EPS Revisions ... will show what some of the fundamental analysts following the stock are doing with their estimates. 1 up last 30 days, 1 down last 30 days.

EPS Trends ... Snapshot of current estimates from the fundamental shops.

Again, a LOT of work to make sense of any market "forecast" based on earnings multiples, but if you're going to do it, then you've got about a month.

AA is #124 weighted SPX component at 0.21% of total.

AA is #24 weighted INDU component, 1.96% of total.

Jeff Bailey : 9/10/2008 11:49:22 PM

Financials ... if you can figure there financial out, let me know. Let 90% of Wall Street fundamental analysts know.

Nobel Prize is waiting for you in economics.

HOUSING prices are key it would certainly seem. DJUSHB 325.25 +2.28% ... 12/31/07 close was 314.02.

200-day SMA and 150-day SMA right here. Link

Jeff Bailey : 9/10/2008 11:30:34 PM

US Oil Fund (USO) $2 and $1 box Link has broken trend on this scale.

$0.50 box to match futures Link ... bearish vertical count (column O from $96.50 to $87.00) to $76.50.

Stocks tend to lead the commodity, and I would really want to have several OIL-only producer stocks under close monitoring. Assess their bearish vertical counts. Have they been achieved?

Oil and gas producers more complex for your fundamentals. What % does company produce oil, what % natural gas?

Oil, nat gas producer, refiner more complex still. "Crack spread" major factor on refining end.

Fundamentals, like P/E can be backtracked. What was p/e most recent completed quarter, and quarter before?

What was oil, nat gas, and crack spread margin?

Jeff Bailey : 9/10/2008 10:51:33 PM

Per today's updated guidance from FDX.

I don't think fundamental traders will automatically be raising estimates by 36% from prior quarter's guidance ($0.90).

Didn't have enough time to get everyone up to date as I had hoped, but number crunchers will be busy.

If trading these markets by fundamentals, I'm not sure I can keep up with all, but I'll try my hardest.

Oil prices have been BIG factor for lowering estimates and guidance.

For FDX, or stocks with HIGHER costs due to oil/fuel prices, the TOP LINE, or revenue is also VERY IMPORTANT. That's a read on SALES, or economic trend (consumer of product/service).

Tab Gilles : 9/10/2008 10:28:04 PM

President Bush visited Riyadh twice this year to push an oil production increase. The Saudis answered by ramping up production by about 500,000 barrels a day.

OPEC's decision Wednesday to cut output by 520,000 barrels effectively canceled even that relatively modest nod to U.S. requests, leaving some talking about a Saudi defeat and a victory for Iran, which has sought higher oil prices through production cuts.

Complete story Link

OIL SERVICE HOLDRS (OIH) $156.01 +$3.41 (2.23%) After Hours: $156.47 $0.46 (0.29%)

Watch the $150 level, with oil very close to $100 we may see some buying coming in especially with the OPEC cut. Link

Take a look at the January 2009 call $155.00 Ticker symbol OIHAK Bid 14.75/ Ask 15.05 volume 24,313

Transocean (RIG) Link

Energy Select Sector SPDR (XLE) Link

USO Link

NAT GAS ($NATGAS) Link Nat Gas relative to crude oil is cheap. Link

OI Technical Staff : 9/10/2008 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 : 9/10/2008 8:16:58 PM

VIX timeline Link

Jeff Bailey : 9/10/2008 8:16:33 PM

FDX Link

Jeff Bailey : 9/10/2008 7:28:25 PM

FedEx shares higher after improved profit outlook ... AP Story Link

FDX $87.86 +3.66% ... 200-day SMA right here at $88.12.

Lots of number crunching going on here. Oil/fuel prices MAJOR factor.

Employee's are largely contract.

Jeff Bailey : 9/10/2008 6:44:34 PM

09/04/08 time line Link

Jeff Bailey : 9/10/2008 6:21:41 PM

Next thing ... world peace will be breaking out.

Jeff Bailey : 9/10/2008 6:20:08 PM

Obama, McCain Agree: No big exit packages for Fannie, Freddie CEOs

Jeff Bailey : 9/10/2008 6:14:22 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 9/10/2008 5:58:04 PM

cl08v's 05:00 tick 102.74

Jeff Bailey : 9/10/2008 5:57:22 PM

DXY's 05:00 tick 80.00

Jeff Bailey : 9/10/2008 5:36:14 PM

Good coverage of observations by Jane for sure.

Jeff Bailey : 9/10/2008 5:35:47 PM

Getting caught up ...

Jeff Bailey : 9/10/2008 5:35:36 PM

There ... BA mentioned at 09:50:00 AM EDT.

Noted UTX as we click through the INDU/DIA components.

Can't fly a BA without a UTX instrument in it.

Jeff Bailey : 9/10/2008 5:34:24 PM

Check out Jane's MM commentary that morning Link

VIX mentioned at 09:47:43 AM.

Something was "up!"

Jeff Bailey : 9/10/2008 5:31:57 PM

Daaaang! ... on 09/04/08 the VIX.X as if some type of determined "bearishness," gapped FROM its QUARTERLY Pivot (21.44). As if pre-determined, or option traders didn't like what they learned overnight.

Jeff Bailey : 9/10/2008 5:13:40 PM

Plunging gold/copper prices not helping.

Jeff Bailey : 9/10/2008 5:13:20 PM

Oooo ... the CAT in the hat on Wednesday morning.

Jeff Bailey : 9/10/2008 5:12:44 PM

MCD holding tough.

Jeff Bailey : 9/10/2008 5:12:10 PM

UTX got hit from the open $67 from Wednesday's close $67.46, then accelerated by 10:30 AM $66.35 and session low $64.25 at 02:15 PM EDT to eventually finish $64.84.

UTX finished today at $63.32 -1.23%

Jeff Bailey : 9/10/2008 5:06:53 PM

Oooeee P&G

Jeff Bailey : 9/10/2008 5:06:31 PM

CVX and XOM did get hit hard that day.

Jeff Bailey : 9/10/2008 5:05:08 PM

IBM pretty sharp decline at 10:30 AM

Jeff Bailey : 9/10/2008 5:02:55 PM

What did any of the Dow 30 components do at around 10:30 AM EDT last Thursday morning. CVX and XOM are energy weights

Jeff Bailey : 9/10/2008 4:59:20 PM

Would have though futures show sharper dip on LCB and ECB announcement if market participants really bearish. Reaction time-line more with EIA release.

Jeff Bailey : 9/10/2008 4:57:34 PM

Better go back and check EIA release more closely.

Jeff Bailey : 9/10/2008 4:57:02 PM

Really don't see a "negative" reaction in futures to LCB and ECB rate announcements.

Jeff Bailey : 9/10/2008 4:56:23 PM

Still going back and looking at YM, ES and NQ Thursday of last week.

MM note from Jane around 10:30 AM EDT regarding EIA data release, which correlates trigger with sharp intra-day declines.

Jeff Bailey : 9/10/2008 4:47:21 PM

YM08u settled 11,291

ym08z settled 11,284

Jeff Bailey : 9/10/2008 4:41:23 PM

There ... CNBC picking up on eur/$ and weakness in eurozone.

Jeff Bailey : 9/10/2008 4:39:16 PM

DXY's 04:00 tick was 79.873

Jeff Bailey : 9/10/2008 4:32:57 PM

No idea (CNBC video) Link

Me thinks LCB and ECB asleep.

Jeff Bailey : 9/10/2008 4:32:49 PM

INDU -15.05% YTD

OEX -16.62%

NDX -16.64%

SPX -16.09% ... would be full of "exporter" type stocks for U.S.

RUT.X -6.40% ... would be more "domestic"

Jeff Bailey : 9/10/2008 4:32:41 PM

FTSE -16.88% YTD (LCB) ...

DAX -22.29% and CAC-40 -3.69% YTD. (ECB)

Jeff Bailey : 9/10/2008 4:20:46 PM

XLF $20.97 -1.22% ...

Goodbye old friends ... FNM $0.74 -25.25% and FRE $0.66 -25.00%

Jeff Bailey : 9/10/2008 3:57:11 PM

should'a gone with 572.50?

Jeff Bailey : 9/10/2008 3:56:46 PM

TIRN DAILY S1 right here at 0.81.

Jeff Bailey : 9/10/2008 3:56:01 PM

TRIN 0.79 ... see that 0.53.

More often than not, a 0.54 tends to be "max buy" pressure during a day. SUPER buy pressure volume 0.36.

Jeff Bailey : 9/10/2008 3:54:58 PM

NASDAQ a/d 1,643:1,236

Jeff Bailey : 9/10/2008 3:54:43 PM

NYSE a/d 1,724:1,374

Jeff Bailey : 9/10/2008 3:54:04 PM

SSO $56.64

Jeff Bailey : 9/10/2008 3:53:48 PM

DIA $113.05

SPY $123.89

Linda Piazza : 9/10/2008 3:51:34 PM

The OEX dipped below the rising trendline off the day's low but is trying to hold near it as I type. A dip back down to 572.30 certainly isn't impossible and neither is a drop below that into the close, but . . . oh, you know what I'm going to say, so I don't need to say it.

We did have a consolidation type day today. The OEX looks as if it will again close the day below the daily 9-ema at 579.94 and certainly well below the potential resistance on daily closes at 588.76, so it preserves the potential downside target now at 552.50 on the daily chart. Remember the "potential" in that sentence.

Keene Little : 9/10/2008 3:50:47 PM

The turn back down from the SPX 1242.86 makes it looks like the a-b-c bounce off this morning's low is finished and we should now head for a new low below today's (tomorrow). The good downside target will be just under 1217 if the 5th wave in the move down from Monday's high will equal the 1st wave. An extended 5th wave could make it down to 1200. If that plays out then we should get a bigger bounce from there and back up to the 1240 area before selling off harder next week. 30-min chart update: Link

Jeff Bailey : 9/10/2008 3:44:57 PM

"They have no idea .... "

Jeff Bailey : 9/10/2008 3:44:44 PM

Rates left unchanged in UK and Europe.

Perhaps UK's Halifax HPI and Europes German factory orders. Link

Jeff Bailey : 9/10/2008 3:43:18 PM

That's got to be it ... doesn't it?

Jeff Bailey : 9/10/2008 3:41:47 PM

And it may have happened Wednesday night, or prior to Thursday's open.

Jeff Bailey : 9/10/2008 3:40:20 PM

Hmmm ... VXO.X gapped up on 09/04/08 and that gap up has been support. 09/04/08 ... something important that day.

Linda Piazza : 9/10/2008 3:39:18 PM

For reference, the rising trendline off the OEX's low today is now located at about 573.55.

Jeff Bailey : 9/10/2008 3:38:08 PM

VXO.X 26.86 -3.65% ...

Jeff Bailey : 9/10/2008 3:36:15 PM

OIX.x 740.14 +4.93% ...

XLF $21.37 +0.65% ...

Jeff Bailey : 9/10/2008 3:35:02 PM

NASDAQ a/d 1,702:1,166

Jeff Bailey : 9/10/2008 3:34:40 PM

NYSE a/d 1,812:1,281

Jeff Bailey : 9/10/2008 3:34:12 PM

OEX should finish at 575

Jeff Bailey : 9/10/2008 3:33:27 PM

FTSE-100 was down 49 points, or -0.91% at 5,366.

DAX was off 23 points, or -0.37% at 6,210.

CAC-40 was lower by 9.7 points, or -0.23% at 4,283.

Jeff Bailey : 9/10/2008 3:32:02 PM

Nikkie 225 finished down 54 points, or -0.44% at 12,346.

Hang Seng was off 491 points, or -2.40% at 19,999.

Shanghai was up 5 points, or +0.23% at 2,150.

Linda Piazza : 9/10/2008 3:26:53 PM

It's far too early to predict where the OEX will be at the end of the day today, as the daily candle could change characters a couple of times over before the end of the day. It's still not too early, however, to begin asking yourself if you intend to hold your positions open overnight. I could draw four or five different lines or point to any one of a number of moving averages and say, this one is the one that's important to exceed or this one is the one that's going to stop the short-term bounce/longer-term decline (take your pick). However, remember those lines we used to form as children, holding each other's hands, with the leaders running around the playground and those at the end of the line being whipped back and forth? Well, we retail traders are at the end of a very long line these days, being whipped back and forth rather drastically.

So, if the OEX ends the day jammed up near the 38.2% retracement of the slide from last week's high to last week's low, are you going to feel comfortable holding bullish positions overnight? If it makes it above that, but is below about 582, at the former rising trendline off the swing lows from about 12:10 pm Monday through 1:30 yesterday afternoon, before prices gave way, are you going to be all that certain of the bullishness of this choppy back-and-forth gain? If you have a bearish position, are you sure that the OEX isn't going to break right up to the 50% retracement of last week's slide, at just under 582.50? What about other risks? Are you willing to risk that Ike won't strengthen and into the worst part of the Gulf, as far as damage to people, buildings, platforms and refineries? Are you willing to risk that some financial won't make a disastrous or, alternately, a calming announcement? Ask yourself what you're willing to risk.

Jeff Bailey : 9/10/2008 3:19:38 PM

OEX daily interval chart with "Bailey Wave" shown earlier this year. Link

Linda Piazza : 9/10/2008 3:15:22 PM

What are some of the scheduled events and releases on foreign bourses overnight? Probably three of the most important are the ECB Bulletin at 4:00 am ET tomorrow morning, the Bank of England's Inflation Attitudes Index at 4:30 and the BoE's MPC Treasury Committee Hearing beginning at 4:45. The Bank of England's Governor Mervyn King and others will testify. Other events include Japan's important Core Machinery Orders tonight at 7:50 pm, and Germany's Wholesale Price Index (WPI) at 2:00 am ET tomorrow morning.

Jane Fox : 9/10/2008 3:13:51 PM

TRIn is a very bullish 0.57 supporting the bullish VIX. I would not be short here.

Jeff Bailey : 9/10/2008 3:13:29 PM

Hey! mid-point of "Bailey Wave" (10/11/07 high, 11/26/07 distribution, to 12/11/07 wave high) also right here.

Jane Fox : 9/10/2008 3:13:17 PM

Vix is making new daily lows so ES should follow with new daily highs before the day is out.

Jane Fox : 9/10/2008 3:12:05 PM

SAN FRANCISCO (MarketWatch) -- The Department of the Interior is investigating personnel handling billions of dollars in oil royalties alleging they received improper gifts and had sex with energy company employees, The Associated Press reported Wednesday, citing the department's Office of the Inspector General. The allegations involve 13 Interior Department employees in Denver and Washington, according to the AP.

Jeff Bailey : 9/10/2008 3:11:53 PM

Great observation Linda! ... OEX's MONTHLY S1 575.52 (support broken, serves resistance until proven otherwise) ... WKLY Pivot 579.42.

Jeff Bailey : 9/10/2008 3:09:45 PM

12/31/07 Beetle's Balanced Benchmark Link

GSG is "equivalent" to CRB Index. OIL is HEAVIEST WEIGHT.

What does "change" in silver vs. gold say?

HYG is "riskiest" of bond asset classes. Throw in the dividend paid each month, and may just be "break even." But why?

Treasuries are "safest" with short-dated "safer" than longer-dated. Throw in dividends and they're up HUGE.

But why, why as deficit and "bailouts" seem to be forever.

Linda Piazza : 9/10/2008 3:09:33 PM

For six 30-minute periods, OEX bulls battled to send the OEX above the 30-minute 9-ema so that moving average proved to be strong resistance. Now bulls want it to be strong support on any pullbacks, if they should occur. That moving average is currently 573.70. Turning to the 15-minute chart, the potentially strong resistance is now at 577.91, within a cent or two of the 38.2% retracement of the long slide lower last week. The OEX is 574.91 as I type.

Tab Gilles : 9/10/2008 3:03:42 PM

Weekly EIA Report Link

Linda Piazza : 9/10/2008 3:02:16 PM

The tenor of trading can sometimes change after the bond market closes, as is happening now.

Jeff Bailey : 9/10/2008 2:56:52 PM

Why, why, why?!!! ... did CRB.X distribute so sharply just more than 2-months ago. Just overdone, or do MARKET participants see something 4-months down the road that is not yet in the news.

Jeff Bailey : 9/10/2008 2:53:27 PM

Jotting some notes in my StockTrader's Almanac ...

Short-term is FVX and DIA/INDU at WKLY Pivots. Equity bulls need cash from bond market. Bear's want nothing to do with it.

CRB Index at 12/31/07 close. In 1930's commodities was ONLY thing to be in.

Linda Piazza : 9/10/2008 2:50:54 PM

The potentially strong resistance on 15-minute closes for the OEX is now at 577.98, nearly coinciding now with the 38.2% slide down from last week's high to last week's low. The OEX is 576.31. That resistance level is also a potential target, but I'd be tightening my stops if I were in a bullish position as the OEX approaches this and other resistance that now extends up to 580.98.

Jeff Bailey : 9/10/2008 2:50:51 PM

02:00 Internals at this Link

Jeff Bailey : 9/10/2008 2:44:32 PM

OK ... DIA and fvx.x at, or very near their WKLY Pivots.

Jeff Bailey : 9/10/2008 2:43:54 PM

5-year up 5.4 bp at 2.936% ... WKLY Pivot 2.946%so much cash has rushed into treasuries last couplw of weeks. Equities need cash. We've observed rush of capital back into U.S. (see DXY)

Jeff Bailey : 9/10/2008 2:39:42 PM

That's got to be what the currency markets are saying, or asking for.

Jeff Bailey : 9/10/2008 2:39:24 PM

FXB $175.86 -0.055 ...

Jeff Bailey : 9/10/2008 2:39:04 PM

FXE $140.51 -0.46% ...

Jeff Bailey : 9/10/2008 2:38:38 PM

Wonder if Jimmy C will go off on European central bankers as he did U.S?

Jeff Bailey : 9/10/2008 2:37:45 PM

"No inflation" from 12/31/07 close.

Linda Piazza : 9/10/2008 2:37:40 PM

Potentially strong resistance on 15-minute closes for the OEX currently at 578.01.

Jeff Bailey : 9/10/2008 2:37:16 PM

Ooooeeee! Check out CRB Index 358.59 -0.63% ... and 12/31/07 close 359.00. Even on intra-day 5-minute.

Jeff Bailey : 9/10/2008 2:34:54 PM

How did europe finish ?

Jeff Bailey : 9/10/2008 2:34:07 PM

Yes ... the DOLLAR!

Jeff Bailey : 9/10/2008 2:33:50 PM

GLD $74.29 -2.97% ... don't have MNTHLY's, but no help for bulls from DAILY S2 and WKLY S2.

Jeff Bailey : 9/10/2008 2:32:32 PM

USO $82.71 +0.43% ... "in the zone" DAILY Pivot and WKLY S2.

Linda Piazza : 9/10/2008 2:32:31 PM

I would be very careful with any bullish positions as the OEX approaches the 577.90-580 zone. That zone contains the 38.2% retracement of the slide from last week's high into last week's low, as well as potential Keltner and trendline resistance (from this week's consolidation pattern). This is also near the top of the gap from Monday. There are just lots of reasons for resistance here. It's certainly not a given that this resistance will hold. As I mentioned this morning, I have been on watch for the possibility that the OEX could be forming a triangle, and so the possibility exists that it could climb all the way up through that triangle. That's just one possibility, however, and it may not be the most likely one. A day or two of consolidation before another downturn is another of those possibilities.

Jeff Bailey : 9/10/2008 2:31:16 PM

MSFT $26.70 +2.29% ... WKLY R1 just ahead at $26.91.

Jeff Bailey : 9/10/2008 2:30:10 PM

QQQQ $43.01 +1.29% ... see that 5-minute interval volume spike?

Jeff Bailey : 9/10/2008 2:29:04 PM

WB $15.94 -1.78% ... WKLY Pivot $16.38.

Jeff Bailey : 9/10/2008 2:27:38 PM

XLF $21.42 +0.89% ... probes its WKLY Pivot.

Jeff Bailey : 9/10/2008 2:25:15 PM

A "shift?" ... RUT.X finds a bid. WKLY up at 725.68.

Dow "first" to reach a WKLY Pivot.

Keene Little : 9/10/2008 2:24:18 PM

Instead of a sideways kind of correction off this morning's low we could see a bit of a sharper a-b-c bounce up. In that case two equal legs up is at SPX 1242.86 so it's a level of interest to see if the bounce fails there. The next upside Fib projection is at 1251 and in the range of yesterday's consolidation.

Jeff Bailey : 9/10/2008 2:23:15 PM

DIA $113.74 +1.07% ... at WKLY Pivot.

Jeff Bailey : 9/10/2008 2:22:44 PM

Oeeee ... clicking through your majors with DAILY/WEEKLY Pivot levels turned on.

We're squared up here within DAILY's folks.

Linda Piazza : 9/10/2008 2:17:36 PM

So, it's the climb to 574.50-576.50 option that the OEX traders choose instead. If the OEX can maingain 15-minute closes above 573.83, it has a chance to rise to resistance that's now from 576.53-576.65 on 15- and 30-minute closes.

Jeff Bailey : 9/10/2008 2:13:47 PM

Yes ... just a couple NASDAQ's in the INDU/DIA/YM

Jeff Bailey : 9/10/2008 2:13:05 PM

Yes ... NYA.X daily pivot at 7975.55 ... good work.

Jeff Bailey : 9/10/2008 2:10:17 PM

NYSE Comp. ($NYA.X) 7954 +1.04% ...

Jeff Bailey : 9/10/2008 2:09:42 PM

TRIN 0.65 ... DAILY S2 at 0.59

Jeff Bailey : 9/10/2008 2:07:40 PM

RUT.X 714.02 +0.95% ... probably not many XLF components in the bunch, but YOU know the weightings.

Jeff Bailey : 9/10/2008 2:06:54 PM

OEX.X 572.23 +0.57% ... "ditto"

Jeff Bailey : 9/10/2008 2:06:24 PM

DIA $113.14 +0.54% ... oil/financial too.

Jeff Bailey : 9/10/2008 2:05:42 PM

OIX.X 732.91 +3.91% ...

XLF $21.05 -0.84% ...

SPY $123.69 +0.37% ...

Linda Piazza : 9/10/2008 2:05:41 PM

Another 30-minute period when the OEX's prices pierced the 30-minute 9-ema but again closed at or beneath that moving average. The OEX is 572.38 as I type, though, testing it again. Nothing has been determined yet with this sideways trading, and up remains as possible as down. However, on the chart setup, the OEX is vulnerable to 569.84 on the short-term with a still-in-place target of 564.77-566.03 on the 30-minute chart. However, until the OEX drops significantly away from the flattened 15-minute and 30-minute 9-ema's, bears should consider their vulnerability if the OEX should bounce up toward 574.50-576.50, also a possibility. I'm beginning to think that the bulls who bought the higher-low thesis this morning when the OEX stopped short of Friday's low may begin worrying if the OEX can't sustain higher values than this, however.

Jeff Bailey : 9/10/2008 2:04:30 PM

FRE $0.88 (unch) and FNM $0.97 -2.02% "coming together" now.

Jeff Bailey : 9/10/2008 2:02:59 PM

Lake Charles (W. Louisiana) ... Paths can take turns ... Calcasieu 32,000 b/d , CITGO 454,500 b/d , ConocoPhillips 252,000 b/d, Plican Ref. 15,000 b/d.

Jeff Bailey : 9/10/2008 1:59:52 PM

Beaumont South Hampton Res (N inland) 4,000 b/d, ExxonMobil 363,100 b/d, Total 240,000 b/d, Premcor 265,000 b/d, Motiva 300,000 b/d.

Jeff Bailey : 9/10/2008 1:55:37 PM

Houston ... Valero 130,000 b/d, Lyondell 283,000 b/d, Deer Park Ref. 340,000 b/d, ExxonMobil 586,000 b/d.

Jeff Bailey : 9/10/2008 1:52:51 PM

Texas City (SE Houston, Gulf Shore) ... Pasadena Refining 106,500 b/d, Valero 225,000 b/d, BP 475,000 b/d, Marathon 78,000 b/d.

Linda Piazza : 9/10/2008 1:51:15 PM

I kept saying earlier that I wasn't so sure that the OEX was through challenging resistance. Now I'm saying that if the OEX can't soon manage to maintain 30-minute closes well above its 30-minute 9-ema and then build on that strength, bulls will lose patience and bears will gain strength and send it down again. That 9-ema is now at about 572.45, and the OEX is currently about 572.92, not high enough to qualify as "well above," in my opinion. Absolutely anything can happen, but bulls need to pull it together or risk the OEX dropping back again.

Jeff Bailey : 9/10/2008 1:47:57 PM

Sweeny (SW of Houston) ... ConocoPhillips 260,000 b/d.

Jeff Bailey : 9/10/2008 1:46:22 PM

Corpus Christi ... Citgo 165,000 b/d, Trigeant 29,000 b/d, Valero 146,000 b/d, Flint Hills Res. 305,000 b/d.

Jeff Bailey : 9/10/2008 1:42:52 PM

Ike / Refiner's Path (from NHC forecast) at this Link

Linda Piazza : 9/10/2008 1:41:49 PM

For reference, the OEX's high of the day has been 574.54. The OEX is 574.24 as I type, testing that previous high.

Jane Fox : 9/10/2008 1:41:23 PM

Markets have not yet broken their overnight highs but they are sure trying. Link

Linda Piazza : 9/10/2008 1:36:24 PM

Jim's been covering the potential damage Ike could do to the platforms in the Gulf as well as to ports and refineries. There's also the other type of damage, with some of Texas' coastal and low-lying cities vulnerable to hurricanes, too. Our Texas history includes one of the--if not still the--deadliest natural disasters in the history of the U.S., a devastingly strong hurricane that slammed into Galveston in 1900. No one knows for sure how many were killed, but figures of 8,000, 9,000 and above 10,000 are bandied about. Of course, Galveston has made many changes since that storm, changes that resulted in a new form of city government that was to be adopted by most cities across the nation. Those changes also included beefing up levees and actually raising many structures still left standing in the city. There have been many more homes built in vulnerable areas, too, though. If you're interested, CNN did a special on the storm some years ago, and you can find information, historic photos and video at this link: Link

Jeff Bailey : 9/10/2008 1:34:02 PM

Hurrican Ike's 5-day cone at this Link

Yesterday's forecasted path, landfall Link

Jeff Bailey : 9/10/2008 1:27:53 PM

Retail Gasoline Price Heat Map at 10:00 AM EDT Link

08/26/08 04:00 PM screen capture Link

08/21/08 Link

Linda Piazza : 9/10/2008 1:27:44 PM

My daughter just told me that Houston Independent School District has announced closures now due to Ike and that the gas station near her house is out of gas.

Linda Piazza : 9/10/2008 1:18:24 PM

In my 1:15:13 post, I mentioned potential OEX support and the mixed-up setup. I still don't see a bullish setup and there's the possibility that the OEX could collapse at any time and drop to the target on the intraday charts near 565-566, but the mixed-up setup means that bears need to be particularly attentive today to their stops. The daily chart shows the possibility that the OEX could eventually drop toward a target now near 553, but the candlestick setup shows the possibility that it might dally around in some consolidation/bounce days first. It's just not clear.

Linda Piazza : 9/10/2008 1:15:13 PM

Another 30-minute close for the OEX at or below the 30-minute 9-ema, now at 572.30. This has preserved the potential downside target, now from 564.89-565.80, but I continue to urge some caution about counting too strongly on that target as the setup is a bit mixed up. As I type, the OEX has turned down from its last test of the 30-minute 9-ema, but may have support now near 570-570.40. The OEX is at 571.58 as I type.

Keene Little : 9/10/2008 1:14:36 PM

One thing we might see is another down-up sequence as part of the consolidation which would take us into tomorrow before seeing another leg down. The updated SPX 30-min chart shows in dark red this idea. After another low the bounce to correct the decline from Monday's high could give us another Monday high next week and then a strong decline from there. But any rally from here back above 1247 would negate the bearish wave count and call for a rally up to the 1285 area. Link

Keene Little : 9/10/2008 1:01:23 PM

Just watching this bounce to see if it's going to show signs of being something stronger but so far I don't get that impression. It looks like it should lead to lower lows again.

Jeff Bailey : 9/10/2008 12:46:35 PM

Was doing some calibrating late last night. Getting ready for Q4.

Jeff Bailey : 9/10/2008 12:45:00 PM

Great point Jane. Was noting some roll action in ym08z last night.

Note that YM08Z overnight high was 11,352.

Then note ym08u's WKLY Pivot (11,352).

Linda Piazza : 9/10/2008 12:44:02 PM

The action is a bit puzzling on the OEX. It's established a pattern now of support on 15-minute closes at its 15-minute 9-ema, now at 572.17, but it so far, despite trying for an hour, has not been able to sustain 30-minute closes above the 30-minute version. Still, a climb toward 574.50-575.60 looks possible and perhaps to 576.40-578. OEX at 573.65.

Jeff Bailey : 9/10/2008 12:42:35 PM

General Motors (GM) $11.00 +2.23% Link ... recent example from '06-'07 was stock doubling ... until the earnings finally hit. THEN it sold off as the MARKET already factored in the "good news."

"Value trap" was $35-$40 when stock looked cheap.

Jane Fox : 9/10/2008 12:37:18 PM

Just a reminder that tomorrow is rollover Thursday and the front month for all Equity futures contracts will become December (Z).

Jeff Bailey : 9/10/2008 12:37:17 PM

Had a couple of questions last week regarding P/E multiples and if it is good decpictor of market direction.

Actually, TERRIBLE.

Morgan Stanley (MS) $38.83 -3.88% ... 228-times earnings now.

Jeff Bailey : 9/10/2008 12:33:41 PM

SPX Heavyweights with QCharts' E/S Growth Rates and P/E ratios (suggest traders/investors verify first) at this Link

Linda Piazza : 9/10/2008 12:32:49 PM

The OEX ends that last 30-minute period at the 30-minute 9-ema, now at about 572.36. The possibility of a downturn toward 565.39 remains, but so does a climb toward 574-575.48.

Jeff Bailey : 9/10/2008 12:28:17 PM

SPY $123.55 +0.26% ...

Jeff Bailey : 9/10/2008 12:27:59 PM

XLF $20.97 -1.22% ...

Jeff Bailey : 9/10/2008 12:27:41 PM

OIX.X 724.42 +2.70% ...

Jeff Bailey : 9/10/2008 12:26:49 PM

Most Actives ... FNM $1.04 +5.05%, FRE $0.85 -3.40%, IWM $71.56 +1.05%, LEH $8.04 +3.20%, QQQQ $42.93 +1.13%, XLF $21.05 -0.84%, SPY $123.76 +0.43%, INTC $20.44 +0.54%, WM $2.54 -23.03%, MSFT $26.52 +1.60%

Jeff Bailey : 9/10/2008 12:23:31 PM

BB a/d 338:546 with NH/NL 108:222

Jeff Bailey : 9/10/2008 12:23:04 PM

AMEX a/d 491:632 with NH/NL 13:143

Jeff Bailey : 9/10/2008 12:21:59 PM

12:00 Internals found at this Link

Jeff Bailey : 9/10/2008 12:17:44 PM

Boeing (BA) $62.40 -2.53% ...

Jeff Bailey : 9/10/2008 12:17:11 PM

Pentagon delays $35B Air Force tanker decision ... AP Story Link

Jane Fox : 9/10/2008 12:09:49 PM

Crude made another lower low today at 101.36.

Linda Piazza : 9/10/2008 12:05:27 PM

The OEX made it above its 15-minute 9-ema, and now needs to hold that support to suggest a test of the other side of the smallest channel, now at 573.96. The 9-ema is now just above further potential support on 15-minute closes at 571.15. However, the OEX has not made a 30-minute close above its 30-minute 9-ema, so it's below that more important resistance. That 30-minute 9-ema is now 572.36, with the OEX piercing it but not closing above it the last 30-minute period. The OEX is 571.66, with the picture unclear right now.

Jeff Bailey : 9/10/2008 12:02:46 PM

My 4-week SMA for S/A Purchases rises to 337.6.

My 12-week SMA for S/A Purchases rises to 335.1.

4-week now above 12-week SMA for first time since 4-week fell below on week ended 4/25/08; MBA report date 04/30/08.

Jeff Bailey : 9/10/2008 11:58:39 AM

I'd be tapping my fingers on the desk regarding housing sector as a buy.

However, FNM and FRE has all U.S. taxpayers now seeing housing as MAJOR holding in our personal portfolios.

Keep you ASSET ALLOCATION in line.

Jeff Bailey : 9/10/2008 11:50:41 AM

That "makes sense."

Jeff Bailey : 9/10/2008 11:49:36 AM

Note difference between conventional and government purchases index this week. Tie with FRE and FNM

Jeff Bailey : 9/10/2008 11:45:04 AM

No idea at this point why such difference in MBA's adjusted and non-adjusted refinance.

Linda Piazza : 9/10/2008 11:45:07 AM

This the reason for the cautions. I was never sure that the OEX was through challenging resistance. That resistance on 15-minute and 30-minute closes is in the form of the 15-minute and 30-minute 9-ema's, with the 15-minute version near other resistance currently at about 571.45 and the 30-minute version at 572.45. The OEX is currently 571.72. As long as the OEX maintains 30-minute closes beneath the 30-minute version, it maintains a downside target now near 565.50, but I just haven't liked the setup today with respect to what it's saying about the likelihood that downside target will be reached. Something about it hasn't been convincing although I can't put my finger on what it is. So, bears should be guarding their profits, but bulls should continue to worry about rollover potential.

Keene Little : 9/10/2008 11:42:57 AM

Look at the consolidation pattern in SPX yesterday between 11:00 AM and 1:00 PM since we could get another pattern looking like that before it heads lower again. It calls for another leg up to finish the a-b-c bounce. It could even make it up to about 1240 before rolling over again. It's not certain we'll get that kind of bounce before it rolls over again (and of course it might not stop there), but that gives you an idea what to watch for.

Jeff Bailey : 9/10/2008 11:25:56 AM

Euro CurrencyShares (FXE) $140.40 -0.53% ... takes out Monday's low.

Jeff Bailey : 9/10/2008 11:24:03 AM

US Gasoline Fund (UGA) $51.99 +3.29% ...

Jeff Bailey : 9/10/2008 11:23:27 AM

US Oil Fund (USO) $82.35 (unch) ...

Jeff Bailey : 9/10/2008 11:21:51 AM

My tabulated # Days Supply of Crude Oil unchanged at 20.3.

Jeff Bailey : 9/10/2008 11:21:06 AM

EIA: Percent utilization of operable capacity plunged to 78.27%.

Jeff Bailey : 9/10/2008 11:20:32 AM

EIA: Weekly refinery operable capacity unchanged at 17.6 million barrels per day. Prior week added 4,000 per/day capacity.

Jeff Bailey : 9/10/2008 11:19:02 AM

EIA: Weekly Crude Oil Inputs into refineries plunges by 1.775 million barrels per day.

Jeff Bailey : 9/10/2008 11:17:54 AM

EIA: Weekly Gross Inputs into refineries plunges by 1.834 million barrels per day.

Jeff Bailey : 9/10/2008 11:16:01 AM

EIA: US Total Crude Oil and Petroleum Products (including SPR) down 15.15 million barrels.

Jeff Bailey : 9/10/2008 11:14:53 AM

EIA: SPR unchanged at 707.2 million barrels.

Jeff Bailey : 9/10/2008 11:14:11 AM

EIA: Weekly Heation Oil (>500 PPM Sulfur) stockpiles up 636,000 barrels.

Jeff Bailey : 9/10/2008 11:13:17 AM

EIA: Weekly Kerosene-Type Jet Fuel stockpiles down 2.26 million barrels.

Jeff Bailey : 9/10/2008 11:12:41 AM

EIA: Weekly ULS Diesel (0-15 PPM Sulfur) down 1.14 million barrels.

Jeff Bailey : 9/10/2008 11:11:47 AM

EIA: Weekly total distillate stockpiles down 1.25 million barrels.

Jeff Bailey : 9/10/2008 11:11:11 AM

EIA: Weekly reformulated gasoline stockpiles down 117,000 barrels.

Jeff Bailey : 9/10/2008 11:10:39 AM

EIA: Weekly conventional gasoline stockpiles down 3,763 barrels.

Jeff Bailey : 9/10/2008 11:09:02 AM

EIA: Weekly total gasoline stockpiles down 6.46 million barrels.

Jeff Bailey : 9/10/2008 11:08:24 AM

EIA: Weekly crude oil stockpiles down 5.83 million barrels.

Linda Piazza : 9/10/2008 11:07:01 AM

A new low for the OEX. Apparently, the OEX was through challenging resistance. Or was it? Continue to exercise care with your bearish expectations. For now, there's a potential intraday downside target of 565.61, where support might also be strong. Something about the setup is just triggering some concerns (about chop) for me, and I'm not sure whether I'm picking up something beneath the radar or just imagining things. Anyway, bears should continue to keep updating their profit-protecting plans. Unfortunately, I don't see anything for bulls other than the possibility of more resistance tests, including tests that go on for days, but I wouldn't want to be participating in any such bounces, if they occur.

Jeff Bailey : 9/10/2008 10:54:15 AM

MBA's Weekly Application Survey at this Link

Linda Piazza : 9/10/2008 10:49:53 AM

So far, the OEX has continued forming 15-minute and 30-minute closes beneath its respective 9-ema's. That preserves potential vulnerability to a target now at about 565.90. However, I don't like the way the OEX is moving with regard to this potential target and I'm not at all sure that it's through challenging that resistance. Just be careful about your expectations this morning.

Jeff Bailey : 9/10/2008 10:48:20 AM

Lehman plans sales, posts $3.9 billion quarterly loss ... Reuters Story Link

Jane Fox : 9/10/2008 10:46:46 AM

Crude is now trading at 103.40

Jeff Bailey : 9/10/2008 10:46:14 AM

10:00 Internals at this Link

Jane Fox : 9/10/2008 10:46:09 AM

SAN FRANCISCO (MarketWatch) -- Crude supplies fell by 5.9 million barrels for the week ended Sept. 5, according to the Energy Department Wednesday. Motor gasoline supplies dropped for a seventh week in a row, by 6.5 million barrels. Distillate stocks were down 1.2 million barrels. Refinery utilization was at 78.3% compared with 88.7% of capacity a week earlier. Following the news, October crude was up 19 cents at $103.45 a barrel on Globex.

Keene Little : 9/10/2008 10:44:41 AM

So far this morning's consolidation looks like small 4th wave in the leg down from yesterday morning. If true we should see another drop later this morning (perhaps SPX 1215-1220) followed by another consolidation and then lower again (spx 1200). This is why I'm thinking we'll see the market stair-step lower into tomorrow before getting a larger bounce into Friday/Monday. So far I haven't seen anything to change this picture.

Jane Fox : 9/10/2008 10:42:56 AM

U.S. gasoline supply down 6.5 mln brls: Energy Dept.

U.S. distillate supply down 1.2 mln brls: Energy Dept.

U.S. crude supply down 5.9 mln brls last week: Energy Dept.

Linda Piazza : 9/10/2008 10:39:19 AM

The TRAN dropped and is now churning around near the 50% retracement of the day's range, a little below and a little above. It's 4822.87 as I type with that 50% level at about 4827.37. Let's see what happens now, as a further drop would not be supportive of further OEX, SPX and Dow gains.

Jane Fox : 9/10/2008 10:38:41 AM

Obviously the Crude inventories report is out, Crude is spiking all over the map.

Linda Piazza : 9/10/2008 10:29:08 AM

The OEX's 30-minute 9-ema, potential resistance on 30-minute closes, has now dropped to 574.87. The OEX is 571.82 as I type. I'm not sure it's through challenging resistance yet, but I'm watching the A/D line which has now dropped out of breakout mode and is rather nearer the low of the day than the high of the day. Based on the way the A/D line sometimes acts, though, as mentioned earlier, I wouldn't be surprised to see another resistance test after this pullback, as long as the pullback doesn't get much lower than about 400. If that happens, it could fall all the way down to about 90 before there's a bounce attempt and then it might not back up to the potential resistance on 15-minute closes, now at about 880. The A/D line is now 596.

Linda Piazza : 9/10/2008 10:12:25 AM

The TED spread is 1.19 this morning, beginning to move above the 1.16 resistance. Freddie/Fannie/Lehman steps this week have not eased default concerns, it appears.

Jane Fox : 9/10/2008 10:06:54 AM

Here are the overnight charts. I think the overnight highs we be resistance today. The Russell 2000 futures (ER2) have already tested those highs and was not able to break through. Link

Linda Piazza : 9/10/2008 10:07:26 AM

The TRAN is really zooming this morning, but of course we have the crude inventories coming in 30 minutes, and they could impact the TRAN. The second 15-minute candle of the day was a small-bodied candle with the body sitting above the previous tall green candle, so a potential reversal signal, but the TRAN is so far showing no tendency to reverse lower. I show potentially strong resistance on 15-minute closes near 4915 and then 4950, with the TRAN currently at 4883.29, just moving to a new high as I typed. The OEX may not fall back far as long as the TRAN is climbing but be aware that the TRAN sometimes changes its tenor after the inventories, either accelerating the prior move or reversing quickly.

Jane Fox : 9/10/2008 10:01:27 AM

If you trade Crude, make you sure you are aware of the inventory report out at 10:35ET or around that time. At times I see Crude starting to spike before 10:30.

Linda Piazza : 9/10/2008 9:59:31 AM

The A/D line closed the first 15-minute period above the potential S/R on 15-minute closes that's now at 833. It's so far building in its gains, moving into a new high of the day as I typed. Be a bit suspicious of breakout moves that occur in the first few minutes of trading: think Monday and the previous Tuesday, for example. However, as I said earlier this morning, some chart setups already suggested that the OEX wasn't through challenging resistance and this A/D line action confirms that. The A/D line, at 1123 as I type, is moving into historical resistance near 1200, as the OEX tests resistance in the 574-576 region, so I would still be careful with any bullish expectations because I'm not sure they're going to continue to be supported. Bulls need to see the A/D line maintain values above about 800 and they'd like to see the VIX back below 24.60 and certainly not back above 25.14. OEX at 574.28, with the 30-minute 9-ema now at 575.77.

Jane Fox : 9/10/2008 9:57:51 AM

I would like to add to Linda's comments about the AD line. Linda's analysis is much more in-dept than mine. I look at the AD line in more absolute terms, above +1000 bullish and below -1000 bearish or in rare cases the trajectory.

Jane Fox : 9/10/2008 9:43:36 AM

NEW YORK (MarketWatch) -- Energy stocks rebounded from bruising losses in the previous session in early action on Wednesday. The Amex Oil Index (XOI) rose 1% to 1,153, rising off a 52-week low. The Amex Natural Gas Index (XNG) rose 1.1% to 517. TPH Energy Research said Tuesday marked the worst day of trading among energy stocks in 14 years, with the Amex Oil Index down more than 6% in one day. Many names in the sector gave up more than 10%, on top of a 15% pullback in the past couple of weeks. Exploration and production stocks fell 9% for their worst one-day loss since 1995, TPH Energy Research noted. Money has been rotating out of energy stocks as the dollar strengthens and oil falls, and as hedge funds come under preassure to unwind positions.

Linda Piazza : 9/10/2008 9:42:07 AM

Jane and I sometimes look as if we're trying to trump each other on the A/D line commentary first thing in the morning, but it shouldn't be taken that way. First, the fact that we're both watching it should be a validation of the importance of looking at volume patterns. They're non-correlative and independent-of-price indicators and so are important. Second, Jane and I look at different things. I've been looking at volume patterns since my first postings on the MM and so has Jane. Read both our posts and gather what you can from them.

Linda Piazza : 9/10/2008 9:40:05 AM

I just mentioned the A/D line being jammed against resistance. I wanted to mention that I was also suspect of the move when I used to base many scalps on what was happening with the A/D line and started looking for a fading-the-move kind of trade. However, the A/D line would often pull back and then charge higher gain, producing bearish divergence, before the ultimate fading move began. I'm not saying that will happen now, but what I am saying is that the OEX might not be through challenging the 573-576 zone and we might not know the ultimate outcome yet. Some chart setups suggest that this first test and first small pullback may not be telling the whole story yet. Just be cautious.

Linda Piazza : 9/10/2008 9:37:02 AM

Keltner outlook on the A/D line: The A/D line makes it first prints in the upper or bullish half of its Keltner channels, but the problem with that is that it does so while jammed up against potentially significant resistance at about +800 on 15-minute closes. The A/D line is currently above that level, but we've obviously got lots of time left in that first 15-minute period. There's also historical resistance near 1200. Equity bulls want to see the A/D line either move sideways or else keep climbing and they don't want to see it drop steeply below 800 and stay there. A/D line currently at 986.

Jane Fox : 9/10/2008 9:35:21 AM

Geesh AD line is a bullish +916. That is surprsing.

Keene Little : 9/10/2008 9:27:30 AM

Equity futures were holding up most of the night but then dipped into the red following the Lehman report and then right back up into the green. The techs are looking stronger this morning. But watch for selling into any morning bounce.

There is still the potential we're going to see a bounce back up in the next couple of weeks (maybe up to SPX 1285) but the risk is for a very large decline over the next couple of months. This weekly chart is a reminder of the downside risk--down below 1000 by November. Link

Linda Piazza : 9/10/2008 9:24:57 AM

"That's what drives everyone crazy," Bob Pisani on CNBC just said. "Even the shorts lose money in this kind of market." I'm sound like a writer taking the easy way out when I warn each afternoon that traders need to consider whether they're comfortable taking home the risk that they have in their portfolio. I sound repetitive when I advise that they take a glance at the daily chart and remind themselves that absolutely anything can happen, but I'm not being lazy. It's the truth. I've heard from too many people who went home with massive profits in front-month options only to have them wiped out or mostly wiped out the next day.

Overnight, futures went just about everywhere as markets anticipated and then reacted to the Lehman disclosures. For me to even conjecture anything with too much conviction would be a bit foolish. Those living on the Texas coast are on hurricane watch, and I'm on a different kind of watch here in central Texas: I am on watch for the OEX to eventually fulfill its current potential downside Keltner target on the daily chart of 553. That's not a promised downside objective, but it's certainly a possibility that should be kept on the radar screen. But just as Hurricane Ike's final trajectory is unknown, so is the OEX's. Is it possible that the OEX is forming yet another triangle, with the 9/05 low and the 9/08 highs beginning to form the outer boundaries and that it could bounce around within that triangle for a couple of weeks, as it did the last one?

That's possible, but so is a straight-down decline, either immediately or after a day or two of climbing. The daily chart just doesn't give much guidance. And, of course, we have to consider the possibility that a longer rally will catch hold, although that seems the lower probability outcome right now.

Here's what the intraday charts say, heading first to the 15-minute one. If the OEX should rise immediately, that chart suggests that potential resistance on 15-minute closes might be found at 573-574.25. As long as the OEX maintains 15-minute closes beneath that, the intraday charts suggest that the OEX maintains a potential target at 566.20-567, where it's possible potentially strong short-term support will be found.

If the OEX heads down straight away, that's the place to watch for first potential support, support that could bounce the OEX. If that support fails, the next interim potential target appears to be near 562-563.

Jane Fox : 9/10/2008 8:59:03 AM

LONDON (MarketWatch) -- OPEC oil ministers' decision to curb oil production is unlikely to have any real effect on the near-term price of oil.

With oil prices down nearly a third from their summertime highs and nearing the psychologically important $100 a barrel mark, the ministers moved to cut 500,000 barrels of production a day at their latest meeting.

But just as maintaining sufficient production during the price spike had no effect on the near-term prices, so too the cut won't serve to put much of a floor under them. That's true for a couple of reasons.

For one, the global economy is still slowing down. While the U.S. may have technically avoided a recession so far, unemployment's up, consumer confidence has fallen, and the housing crisis shows no signs of abating anytime soon.

Jane Fox : 9/10/2008 8:56:08 AM

SAN FRANCISCO (MarketWatch) - Freddie Mac and Fannie Mae will be removed from the S&P 500 stock index due to their depleted market values, Standard & Poor's said Tuesday.

Freddie Mac will be removed after the close of trading Wednesday, and its place will be taken by business software company Salesforce.com Inc. , Standard & Poor's said. Freddie Mac's market capitalization on Tuesday fell to roughly $614 million, far short of the $5 billion necessary to be eligible for admission to the index.

Fannie Mae will be also removed from the S&P 500 after the close of trading Wednesday, and its place will be taken by Fastenal Co. . Fannie Mae's market capitalization fell on Tuesday to roughly $1.04 billion, shy of the minimum necessary for admission to the index.

Shares of mortgage giants Freddie Mac and Fannie Mae, both victims of the ongoing subprime mortgage fallout, began plunging late Friday after reports surfaced that the government would step in to take them over

Jane Fox : 9/10/2008 8:48:10 AM

Lehman Brothers news was not received too kindly by the markets. All major American Equity future markets made new overnight lows except NDX (NQ). Both the S&P (ES) and DOW (YM) even broke their previous day lows. Link

Jane Fox : 9/10/2008 8:41:06 AM

CHICAGO (MarketWatch) -- Mortgage applications filed last week increased a seasonally adjusted 9.5% compared with the week before, as mortgage interest rates decreased, the Mortgage Bankers Association reported on Wednesday.

Application volume was still down 24.4% compared with the same week in 2007, the Washington-based MBA said. Results from the association's weekly survey were adjusted to account for the Labor Day holiday.

Refinance applications increased 15.4% last week, compared with the week before.

Applications filed to purchase a home were up a seasonally adjusted 6.4% compared with the previous week, the MBA said.

The four-week moving average for all loans was up 4.1%.

Jane Fox : 9/10/2008 8:40:25 AM

SAN FRANCISCO (MarketWatch) -- Lehman Bros. Holdings on Wednesday said it lost $3.9 billion in the third quarter after taking a gross mark-to-market loss of $7.8 billion.

The company also said it cut its quarterly dividend to 5 cents a share from 68 cents a share and will spin off its commercial real-estate holdings to shareholders while selling a majority stake in its Neuberger Berman investment-management division.

Lehman's third-quarter loss amounted to $5.62 a share.

Analysts surveyed by FactSet Research had been looking for the company to report a loss of $2.81 a share, while Morgan Stanley predicted the financial firm would post a loss of $2.80 a share, on the back of a $3.5 billion write-down.

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