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Keene Little : 10/3/2008 1:05:06 AM

Friday's pivot table: Link

I still like the NDX charts (and NYSE) as this index seems to have the cleanest price pattern. The DOW is a mess and SPX is marginally better (too much manipulation in those). The NDX 120-min chart shows a couple of down-channels and potential support in the 1450-1470 area. That's pretty wide so I'll be watching Friday's price action closely to see if I can get a better sense where a bottom might form. That of course assumes we'll get another low and ideally we'll see a small bounce and then the new low. It would be a good setup to cover short positions and try a small long position into next week. Link

If the market manages to rally strong then the pattern shown in pink on the SPX 120-min chart shows the expected bounce on Friday, retracing Thursday's decline. Talk about whiplash! Otherwise there's downside potential to the 1070-1080 area before a bigger bounce into next week. Link

OI Technical Staff : 10/2/2008 9:59:59 PM

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Jeff Bailey : 10/2/2008 8:46:14 PM

Big failure of the potential inverse h/s in the gold bugs today $HUI.X Link

Jeff Bailey : 10/2/2008 8:41:54 PM

Financial companies borrow record amount from Fed ... AP Story Link

Tab Gilles : 10/2/2008 7:22:43 PM

MetLife shares fall, hit 3-year low http://stockcharts.com/h-sc/ui?s=met&p=D&yr=1&mn=6&dy=0&id=p79749303200

MetLife shares fall with broader market amid continued concerns about the credit crisis

Senate majority leader Harry Reid, a Democrat from Nevada, said a major insurer was on the verge of bankruptcy. Link

Jeff Bailey : 10/2/2008 7:18:03 PM

dj- Court grants Amgen's bid to block US sale of Roche's Anemia drug

AMGN $58.59 ... ticks $59.99 extended.

Jeff Bailey : 10/2/2008 7:08:41 PM

Case Shiller 20 regional housing ... End of July, Detroit finished $93.21.

Jeff Bailey : 10/2/2008 7:00:19 PM

House Sells On eBay for $1.75 ... Chicago Sun-Times Link

Jeff Bailey : 10/2/2008 6:44:11 PM

EEM $31.62 -8.55% ...

EWY $36.52 -6.47% ...

Tab Gilles : 10/2/2008 6:42:59 PM

$USD 80.54 Change:+1.08 +1.36% Europe's central bank chief hints that interest rates may come down. Link Link

Jeff Bailey : 10/2/2008 6:36:20 PM

NYSE and NASDAQ short sale prohibition (.xls format) Link

Jeff Bailey : 10/2/2008 6:31:47 PM

Target alert! for the SPG-VQ is $83.56 in the underlying.

Jeff Bailey : 10/2/2008 6:25:33 PM

Yesterday I was shopping a refi ... Quote was 6.3%. Supposed to touch base on Monday, will see if it's changed.

Jeff Bailey : 10/2/2008 6:24:01 PM

If your currently purchasing a home ...

Fannie Mae (FNM) today announced that it would cancel the planned increase in its adverse market delivery charge. The 25-basis point (0.25 percent) increase was scheduled to go into effect for whole loan purchases and mortgage loans delivered into MBS with issue dates on or after November 1, 2008. "Our expectation is that this decision to forgo the across-the-board increase in our delivery charges will be passed on to borrowers in the form of lower mortgage costs," said president and CEO Herb Allison. "The market has changed substantially since we announced this increase to our pricing in early August. We are evaluating all of our risk-management, underwriting guidelines, pricing and costs in light of these changing conditions. As we move forward, we will seek to balance our responsibility to provide the most market support possible with our obligation to protect the company and its many stakeholders, including taxpayers." The company said its expectation was that lenders would waive the additional 0.25 percent charge for borrowers who have not yet closed on their mortgage loans. Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. In 2008, we mark our 70th year of service to America's housing market. Our job is to help those who house America.

Tab Gilles : 10/2/2008 6:19:03 PM

JP Morgan (JPM) $49.85 +$0.60 (1.22%)

WJPAI- January 2010 $45 call Bid $11.70/ Bid $12.45

Jeff Bailey : 10/2/2008 6:19:12 PM

dj- INSEE: France in recession from 3Q on global slowdown, turmoil

INSEE home page Link

Jeff Bailey : 10/2/2008 6:12:42 PM

dj- General Electric: No plan to sell securities to Treasury if rescue plan passes

Jeff Bailey : 10/2/2008 6:12:03 PM

dj- US Industries call for removal of China's export taxes

Jeff Bailey : 10/2/2008 6:05:20 PM

Major Global Indexes, Currencies, USO, GLD, HUI.X, OIX.X and XLF Link

Jeff Bailey : 10/2/2008 6:00:56 PM

USO $75.82 -4.73% ... relatively unchanged YTD ... +0.08%.

Jeff Bailey : 10/2/2008 5:40:39 PM

Bailout, Trichet fuel another U.S. dollar leg-up ... Reuters Story Link

Jeff Bailey : 10/2/2008 5:36:08 PM

McCain eyes potential Treasury Picks ... Reuters Story Link

Jeff Bailey : 10/2/2008 5:32:04 PM

Euro got hit hard again today ... FXY $137.97 -1.49% ...

Jeff Bailey : 10/2/2008 5:25:36 PM

Berkshire Hathaway (BRK.A) $137,000 +0.65% ...

Jeff Bailey : 10/2/2008 5:09:05 PM

Be ready tomorrow! BIG move may be coming.

New lows WAY off of Monday's. If the break is to the downside, watch out.

If today's "lack of new lows" is a buyer's defense, then MONTHLY Pivots in play.

Jeff Bailey : 10/2/2008 4:46:25 PM

SPY; 1,000,000 blocked at $111.33

Jeff Bailey : 10/2/2008 4:41:34 PM

SPY; 3,000,000 shares blocked at $116.03 in tonight's extended.

Jeff Bailey : 10/2/2008 4:07:39 PM

dj- SLUG Investments Wednesday $148 Mln; Redemptions $4.2 Bln

Investments in non-marketable state and local government securities Wednesday totaled $148 million, the U.S. Treasury said in a report. Redemptions of "slugs" were $4.2 billion.

Slugs are made available by the Treasury for purchase by state and local governments from proceeds subject to yield restrictions or arbitrage rebate requirements under the Internal Revenue Service code.

Jeff Bailey : 10/2/2008 4:03:21 PM

Penn Virginia (PVA) $44.55 -12.98% ...

Jeff Bailey : 10/2/2008 4:02:11 PM

dj- Penn Virginia Cuts 2008 Production Guidance; Cites Hurricane Ike

Keene Little : 10/2/2008 4:00:25 PM

Heading into the close and there's been no bounce. However it's still set up for one and with SPX testing Monday's low there is the potential to leave a bullish divergence against that low. It remains possible the pullback from Tuesday's high is only part of a larger 3-wave bounce off Monday's low and that scenario calls for another strong rally, at least back up to Tuesday's high (ready for some more whiplash?). It could even rally up to a Fib projection at 1201, shown in pink on the SPX 120-min chart: Link

But if we only get a smaller bounce/consolidation then we should see SPX work its way down towards 1090 or perhaps a lower Fib projection at 1073. At this point I consider any overnight trade very risky.

Jeff Bailey : 10/2/2008 3:49:05 PM

dj- Brazil's real closes at weakest level since August 2007

Jane Fox : 10/2/2008 3:29:01 PM

Transports are getting hit harder today than the other markets. Down 422 points. Link

Keene Little : 10/2/2008 3:28:07 PM

As most of you know, I'm not a Greenspan fan. So I have to wonder why someone who didn't see this coming (by his own admission) can be believed when he says the financial markets and economy will recover "sooner rather than later". First of all, what does that mean? Does that mean it will recover in half the time, such as 5 years instead of 10, 5 days instead of 30? What a bozo. He just needs to slink away and leave us alone.

Jeff Bailey : 10/2/2008 3:26:21 PM

These high debt/equity have really been whacked haven't they?

Keene Little : 10/2/2008 3:24:08 PM

I'm starting to think that a requirement for trading this market is a prescription for something stronger than Dramamine. Oh, and a neck brace. These DOW 300, 400, 500 and 800-point moves up and down has got to be wearing both sides down.

Jeff Bailey : 10/2/2008 3:14:33 PM

10-year finished juuuuust under its MNTHLY Pivot ... that's "defensive" enough

Jeff Bailey : 10/2/2008 3:12:31 PM

Treasuries close ...

13-week 0.59%

5-year 2.70%

10-year 3.65%

30-year 4.15%

Jeff Bailey : 10/2/2008 3:05:19 PM

ssssniff ..

Jeff Bailey : 10/2/2008 3:03:49 PM

USO $75.77 -4.79% ... NAKED UNA-VT $2.00 x $2.05

Jeff Bailey : 10/2/2008 3:02:59 PM

XOM $79.09 +0.64% ....

Jeff Bailey : 10/2/2008 3:02:37 PM

dj- GMAC pulls $2.7 Bln loan sale due to market conditions

Jeff Bailey : 10/2/2008 3:01:15 PM

dj- ExxonMobil Funds $1.6 million education program in New Orleans

Tab Gilles : 10/2/2008 2:53:45 PM

Former Federal Reserve Chairman Alan Greenspan said financial markets and the economy will recover `"sooner rather than later'" from the worst turmoil in seven decades. Link

Jeff Bailey : 10/2/2008 2:53:19 PM

SPX 1,120 -3.49% ... at Monday's close.

Jeff Bailey : 10/2/2008 2:52:39 PM

NASDAQ a/d 545/2,332

Jeff Bailey : 10/2/2008 2:52:26 PM

NYSE a/d 539/2,616

Jeff Bailey : 10/2/2008 2:51:24 PM

YM 10,526 ... traded 10,504 low so far

Jeff Bailey : 10/2/2008 2:50:39 PM

Watch that 13-week ... was just Daily pivot at 0.75%

Jane Fox : 10/2/2008 2:41:45 PM

Nutting but bearish here. Link

Jane Fox : 10/2/2008 2:40:52 PM

I love the VIX but if the AD line and AD volume do not get on board the VIX can't "Do it alone." To take a line from "Chicago."

Jeff Bailey : 10/2/2008 2:37:39 PM

SPG $89.02 -4.98% ... gotch'a art. SPG having trouble with Daily S2 $89.66

Jane Fox : 10/2/2008 2:37:35 PM

VIX is now making new daily highs so the S&P futures are free to make new daily lows now.

Keene Little : 10/2/2008 2:37:13 PM

Ideally, from an EW perspective, this NDX 10-min chart shows how I'm hoping price action will play out into tomorrow: Link . Another bounce/consolidation that perhaps tops out around today's mid-day high will be followed by another new low. As shown on the chart, depending on where the 4th wave correction finishes I'll be able to get a downside Fib projection but so far the 1470 area continues to look good (might go a little lower).

And if it does play out this way I think taking profits on October puts would make sense (in case the bounce goes higher and lasts longer). And dare I say it might even make for a decent long play but for a trade lasting only a couple of days at the most.

Jeff Bailey : 10/2/2008 2:36:20 PM

VXO 52.58

Jeff Bailey : 10/2/2008 2:35:36 PM

VIX.X 44.89

Jeff Bailey : 10/2/2008 2:34:58 PM

YM 10,545 ... about 400-points higher, got our bearish behinds handed to us at 10,945

Jeff Bailey : 10/2/2008 2:30:52 PM

dj- MetLife denies it was subject of Reid's comments

MET $41.72 -13.34% ... off lows of $36.86

Jeff Bailey : 10/2/2008 2:28:49 PM

That could weigh negatively on market psychology to the close.

Jeff Bailey : 10/2/2008 2:28:22 PM

dj- Pelosi: Won't take rescue measure to floor without votes

Jeff Bailey : 10/2/2008 2:27:48 PM

dj- Pelosi indicates there will be no changes to Senatate rescue bill

Jeff Bailey : 10/2/2008 2:21:26 PM

02:00 Internals found at this Link

Keene Little : 10/2/2008 2:20:36 PM

I'm not sure if I didn't post the pivot table last night or if never went through. Sorry about that. Here's the one for today (using the RUT instead of futures since QCharts stopped reporting futures and I haven't had the time to figure what they did with it this time). Link

Jeff Bailey : 10/2/2008 2:20:30 PM

CNBC guest ... talking about housing futures ...

Keene Little : 10/2/2008 2:17:29 PM

So far the very choppy bounce off the last low looks like it could be part of a correction/consolidation and not the start of something bigger to the upside.

Tab Gilles : 10/2/2008 2:04:01 PM

$TRAN: 1,972.66 -142.75 (6.75%) Link Link

US trucking stocks fall after Conway cuts outlook Link

Jeff Bailey : 10/2/2008 2:02:45 PM

dj- Rite Aid Says $1B outstanding under credit pact as of 08/30 ... RAD $0.96 +1.46% ...

Jeff Bailey : 10/2/2008 1:53:29 PM

Daily S2 at 0.433%

Jeff Bailey : 10/2/2008 1:52:50 PM

13-week down 25 bp at 0.55%

Jeff Bailey : 10/2/2008 1:52:08 PM

BIX.X 186.63 +0.39% and PHF $6.44 +1.12%

Jeff Bailey : 10/2/2008 1:50:26 PM

YM 10,629 ... refuses, simply refuses to give up DAILY S2

Jeff Bailey : 10/2/2008 1:47:54 PM

USO $76.36 -4.05% ...

Jane Fox : 10/2/2008 1:47:53 PM

So far the S&P futures have not made a new daily low. Link

Jeff Bailey : 10/2/2008 1:47:14 PM

PBR $37.89 -12.87% ... EEM "heavyweight"

Keene Little : 10/2/2008 1:47:11 PM

Another minor push lower right here should set up another larger bounce. Whether it will be the start of a bigger bounce into next week (e.g., back up to at least Tuesday's high) or else it will retrace no more than 38% of the drop from yesterday's mid-day high before dropping lower again. I think we'll get the latter scenario but again your risk is to a stop below yesterday's low.

Jeff Bailey : 10/2/2008 1:46:39 PM

EEM $31.87 -7.83%
EWY $36.83 -5.63% ..

Jane Fox : 10/2/2008 1:45:45 PM

Looks like a revised Economic Stabilization Bill will be reintroduced to the House on Friday. This bill will have an increase in the FDIC levels but still authorize the Treasury Secretary to buy bad assets from financial institutions in hopes of getting credit flowing again. I don't see anything about suspending the mark to market rules.

Jeff Bailey : 10/2/2008 1:32:09 PM

Disclosure: I currently hold bearish position in SPG.

Jeff Bailey : 10/2/2008 1:31:45 PM

VIX.X 44.26 +11.17% ...

Jeff Bailey : 10/2/2008 1:31:32 PM

Swing trade put alert! ... for one (1) of the Simon Property Group SPG Oct. $85 Puts (SPG-VQ) at the bid of $3.70.

SPG $89.13 -4.86% ...

Jane Fox : 10/2/2008 1:27:04 PM

Keep in mind that the AD line is still very very bearish at -2075 and AD volume is still making new daily lows. Those two together almost negate the VIX's bullish divergence.

Jane Fox : 10/2/2008 1:25:41 PM

S&P futures are testing daily lows but the VIX is not testing daily highs so that is telling me the S&P lows will hold and that we have made a temporary bottom. Link

Keene Little : 10/2/2008 1:25:00 PM

After a relatively small bounce off this morning's low we're heading for new lows. This raises the possibility that we're completing the 3rd wave in the move down from Tuesday's high and not the 5th wave yet. It would mean another bounce/consolidation that chews up the rest of the day (but we may not have seen the low yet for the day).

While this scenario calls for lower lows over the next day or so I think the risk for a larger bounce is now high enough to warrant caution for shorter-term short players. Stops should be just above yesterday's low since that wave-1 low should not be overlapped until we see a complete 5-wave move down. A stop placed up there is a lot to give back so consider your risk here in holding out for lower prices.

Jeff Bailey : 10/2/2008 1:21:33 PM

Oil Service HOLDRs (OIH) $126.40 -9.80% ... goood grrrravy.

Jeff Bailey : 10/2/2008 1:19:10 PM

MUB $97.08 -0.02% ...

Jeff Bailey : 10/2/2008 1:18:44 PM

dj (report)- Jefferson County OKs Delay Debt Payment for 7-days

Jeff Bailey : 10/2/2008 1:04:12 PM

Apex Silver (SIL) $2.00 -4.30% ... looks "expensive."

Jeff Bailey : 10/2/2008 1:03:34 PM

CDE $1.31 -12.16% ... that's a 52-weeker.

Jeff Bailey : 10/2/2008 1:01:27 PM

What do you think Jane? Maybe a "gold lining?"

Jeff Bailey : 10/2/2008 12:59:53 PM

I'm "liking" our decision to exit silver (SLV) on 09/24 ... and starting to think "goldie" could get crushed.

Jeff Bailey : 10/2/2008 12:57:45 PM

That's the way I am with QCharts Keene. Gosh I love some of the features, andvantages and benefits. Might have to jump back over to 5.1 myself.

The "new and improved" is same book, same cover, with a lot less pages though.

Jeff Bailey : 10/2/2008 12:52:58 PM

UNG ... now a 5-minute interval and "zooming in." See Friday's settlement/termination? See the action at WKLY S1? Link

Jeff Bailey : 10/2/2008 12:42:05 PM

EEM $32.10 -7.09% ...
EWY $36.87 -5.58% ...

Jeff Bailey : 10/2/2008 12:36:51 PM

Yesterday's ability to close above the 09/26 termination benchmark was modestly positive, but last night I thought to myself that nat gas bulls needed to see a market reaction push above $35.50.

My estimate build in storage was for 70 bcf.

Jeff Bailey : 10/2/2008 12:32:59 PM

UNG ... now a daily interval with your QRTRLY and MNTHLY as well as last three futures settlement/termination benchmarks. Link

Keene Little : 10/2/2008 12:23:47 PM

Adding to Jeff's QCharts comment, I'm still running 5.1 (no time today to make the switchover) and it may be a fluke but futures data started coming in late last night, including YM (which is supposed to go away with 5.1 because the continuum servers are not getting that feed). I'm afraid to touch it now (wink).

Jeff Bailey : 10/2/2008 12:16:14 PM

Those using QCharts 6.0 today. If you're not getting DAILY intervals, EXIT QCharts, then log back on. Other alternative is to change your "interval" to 720. I exited, logged back on and now have daily intervals.

Keene Little : 10/2/2008 12:12:45 PM

We're getting the bounce and there are two possibilities that I see at the moment for NDX. One is a another decline to a slightly lower low from here and then another bounce/consolidation that chews up most of the day. The other is for a larger consolidation that takes us into the afternoon before dropping to a new low (the 1470 target for now) and then the setup for a stronger rally into next week.

Bottom line is we should see lower lows yet and depending whether it happens right from here or after another couple of hours will help determine the probability for when the larger rally starts.

Jeff Bailey : 10/2/2008 12:12:37 PM

Jane ... Got ya there. I was trying to relate it to trading/investing.

Jeff Bailey : 10/2/2008 12:11:16 PM

12:00 Internals found at this Link

Jane Fox : 10/2/2008 12:03:45 PM

Jeff, the silver lining I was talking about was the price of Crude.

Jeff Bailey : 10/2/2008 11:59:21 AM

That depends Jane ... what index and its weightings.

Jeff Bailey : 10/2/2008 11:54:33 AM

Most Actives ... GE $22.31 -8.93%, IWM $65.30 -2.56%, SPY $113.15 -2.50%, NCC $3.03 +5.02%, WB $3.73 +5.07%, MSFT $26.13 -1.32%, RIO $16.62 -10.69%, INTC $17.83 -3.71%, SIRI $0.62 -5.12%, QQQQ $37.41 -2.85%

Jane Fox : 10/2/2008 11:54:12 AM

Heh did we actually find a silver lining in this cloud we're in?

Jane Fox : 10/2/2008 11:52:41 AM

LONDON (MarketWatch) -- Merrill Lynch cut its 2009 oil price forecast to $90 a barrel from $107 a barrel and warned that a "synchronous global recession" could bring oil prices to $50 a barrel. It said U.S. oil demand is far outpacing its decline expectations, European demand is falling rapidly, and some of the emerging markets aren't keeping up either. Plus, a string of fields in Saudi Arabia, Qatar and others will bring about 3 million barrels of oil a day in incremental capacity over the next 12 months.

Jeff Bailey : 10/2/2008 11:49:35 AM

UNG 60-minute interval chart with my MONTHLY Pivot retracement and QCharts' WKLY Pivot levels Link

Tab Gilles : 10/2/2008 11:48:06 AM

Dollar hits one-year high against euro Link

Tab Gilles : 10/2/2008 11:38:44 AM

$VIX 44.32 +4.51 Link

$VXD 41.31 +4.06 Link

$VXN 47.12 +4.20 Link

$RVX 46.90 +4.66 Link

Keene Little : 10/2/2008 11:23:03 AM

Looking at a parallel down-channel for NDX's move down from September 19th, the mid line of the channel crosses the trend line along the lows since August at the end of today near 1470. That's why a little bounce into this afternoon followed by one more new low is a good setup for the bounce, shown in dark red on the 120-min chart update: Link

Tab Gilles : 10/2/2008 11:26:30 AM

USDollar-Spot (DXY) 80.45 +0.98 (1.24%)

GLD 81.90 -$4.12 (4.25%)

$WTIC $94.59 -$3.93 (4.75%)

As I mentioned Monday, Watch $90 on oil, the Dollar is currently over 80, as it seems to be the only haven of safety. Gold and oil continue to decline. Link

Jeff Bailey : 10/2/2008 11:03:46 AM

European Markets Link

Jeff Bailey : 10/2/2008 11:02:52 AM

ECB's Press Conf. Link

Jeff Bailey : 10/2/2008 11:00:28 AM

ECB's Trichet turning less hawkish, but still not sold that inflation an issue.

Jeff Bailey : 10/2/2008 10:58:48 AM

ECB: Left rates unchanged at 4.25%

Jane Fox : 10/2/2008 10:55:24 AM

Here are your VIX and S&P futures charts and as you can see they are in sync today so any divergence should be watched closely. Link

Jeff Bailey : 10/2/2008 10:50:35 AM

Swing trade COVERED short alert! ... for 1/3 position in the US Nat. Gas Fund (UNG) at the bid of $33.04.

Jeff Bailey : 10/2/2008 10:49:19 AM

UNG $33.13 -4.19% ...

Jeff Bailey : 10/2/2008 10:48:54 AM

EIA Nat. Gas Storage Link ... Build of 87 Bcf

Jane Fox : 10/2/2008 10:46:53 AM

By the way, Crude's MACD is telling me the $90 low it made on September 16th will hold.

Jeff Bailey : 10/2/2008 10:46:28 AM

10:00 Internals found at this Link

Tab Gilles : 10/2/2008 10:46:27 AM

Crude Oil $94.62 (Watch $90 level)

Nat Gas $7.52

Gold $844.60

Euro 1.3834, Yen 105.34

T-Bill 1 mos 0.61%, 3 mos 0.78%

Keene Little : 10/2/2008 10:45:33 AM

I've liked the clarity of the NDX pattern better than the others lately and it might have to do with less manipulation of either the index, as compared to SPX and certainly the DOW, and/or the financial stocks within the indices. At any rate I continue to like the possibility that NDX will drop down to its trend line along the lows since August 19th. That line is currently near 1483 and drops down to about 1472 by the end of today.

If this morning's decline is followed by a consolidation into this afternoon and then another leg down it will be a very good setup for a stronger bounce into next week. Whether that kind of move will coincide with a bailout vote in the House would be speculation at this point. I had assumed the market would bounce on passage of the bill in the Senate and it obviously hasn't. What can we assume if it passes the House?

If the market is selling off after the Senate passed the bill what does that do to the argument of many that a failure of the House to pass the bill caused the stock market decline on Monday (which they're using in their sales tactics to scare Americans into supporting the bailout bill)? See why it's difficult to trade the market on news? Stick with the charts and make your trading decisions based on what you're seeing, not what you think the reaction will be to any news, including earnings.

Jane Fox : 10/2/2008 10:44:09 AM

Crude as slipped to a low of $94.32 but like I have said before, who cares? Well of course we care but worrying about the price of Crude seems to a very distant memory.

Keene Little : 10/2/2008 10:36:24 AM

The next downside Fib target for NDX is a 162% projection of the leg down yesterday morning. That gives us 1502. For SPX it's at 1123. NDX is looking weaker than SPX and while I showed similar downside projections on last night's 120-min charts, NDX would reach its lower target area of 1470 before SPX reaches 1090. That might suggest NDX will drop lower than 1470 or that SPX will find support higher than 1090. That should become clearer after the move down from Tuesday's high develops a little further.

Tab Gilles : 10/2/2008 10:34:53 AM

In reference to my 10:09am post, while watching last nights Senate vote on C-SPAN 2 and listening to Ct. Senator Chris Dodd, I was thinking to myself...this guy is in charge?

Sen. Chris Dodd, chairman of the Senate Banking Committee, took millions from now-failing finance firms he oversees. Link

The president's budget proposals reflected the nature of the challenge. Note the following passage from the 2005 budget: Fannie, Freddie and other GSEs "are highly leveraged, holding much less capital in relation to their assets than similarly sized financial institutions. . . . A misjudgment or unexpected economic event could quickly deplete this capital, potentially making it difficult for a GSE to meet its debt obligations. Given the very large size of each enterprise, even a small mistake by a GSE could have consequences throughout the economy."

That passage was published in February 2004. Dodd can find it on Page 82 of the budget's Analytical Perspectives. Link Link

Jane Fox : 10/2/2008 10:27:27 AM

I am reading where companies like General Electric and Weyerhaeuser are coming out in favor or the bailout bill and this worries me because I have NO faith in corporate America anymore and believe anything they want will only be self serving, good for them but probably not good for Joe citizen. Yet I guess we all have to pull together here.

Tab Gilles : 10/2/2008 10:09:50 AM

Everyone is asking how our financial system got into this mess?

Nine-years ago, an article from The New York Times, raised a yellow flag on the future of the housing/financial crisis.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

For the full NYT article go to this Link

Jane Fox : 10/2/2008 10:08:41 AM

If you ever wonder what bearish internals look like here you go. Link

Keene Little : 10/2/2008 10:08:05 AM

No bounce for either SPX or NDX and the short term patterns for the move down do not look complete yet. We should get at least a small consolidation and then a continuation lower before even a short term bottom is put in.

Jane Fox : 10/2/2008 10:07:27 AM

WASHINGTON (MarketWatch) - Demand for U.S. factory goods dropped at the fastest rate in two years in August on much lower orders for metals, machinery and vehicles, the Commerce Department reported Thursday. Factory orders fell 4%, worse than the 3% drop expected by economists surveyed by MarketWatch. Orders for durable goods fell 4.8% in August, revised lower from the 4.5% estimate provided a week ago. Shipments and orders for nondurable goods fell 3.3%, largely because of lower prices for crude oil and gasoline. Excluding the 9.1% drop in transportation orders, factory orders fell 3.3%, the biggest drop since September 2001.

Jane Fox : 10/2/2008 10:07:10 AM

WASHINGTON (MarketWatch) -- Even before the latest squeeze in the credit markets, the U.S. economy had slipped into what could be a relatively lengthy recession, economists say.

The latest data, covering activity in August and September, make it all but certain that the academic economists will eventually declare that the economy is in a recession.

The big economic forecasting firms are in the process of updating their forecasts following the release of key data on consumer spending. While the final numbers aren't available yet, forecasters say it doesn't look good

Keene Little : 10/2/2008 10:02:51 AM

In case we're in a larger a-b-c corrective bounce pattern off Monday's low, today's decline could be considered the completion of the b-wave. Two equal legs down from Tuesday's high would be at SPX 1139.77 and NDX 1532.66. If support is found at those levels we could see a strong rally leg equal to the one off Monday's low into Tuesday's high. So stay aware of that possibility until those levels are firmly broken. This possibility is shown on this NDX 30-min chart: Link

Jane Fox : 10/2/2008 10:01:25 AM

Crises like this are manageable. They're expensive and painful to resolve, but even more expensive and painful when left to fester.

Jane Fox : 10/2/2008 10:00:43 AM

This article also suggested what a better plan will look like and here are some of the components. First it must be done quickly. Secondly, doing nothing is a bad idea. Third recapitalizing the banks that have a hope of surviving but letting go of those that do not. (Read do NOT suspend Mark to Market) and fifth relief to debtors (although I'm not sure I agree with this one).

Tab Gilles : 10/2/2008 10:01:29 AM

"economic Pearl Harbor," -Warren Buffett-

For those who didn't catch Billionaire Warren Buffett last night on PBS's "Charlie Rose" program... Link Link

Tab Gilles : 10/2/2008 9:54:26 AM

JPMorgan (JPM) $48.50 -$0.76 (1.56%)

WJPAI- $10.65/$11.35

Jane Fox : 10/2/2008 9:52:55 AM

There is no doubt we are going to have swallow a bitter pill until we can work our way out of this mess and that bitter pill will have to be bank foreclosures, mergers and nationalizations. No doubt shareholders will lose money but we cannot expect to dig out of this and no one get hurt. Sorry that will not happen.

The study Maudlin was referring to also found that ? the countries that have experienced a banking crisis had some sort of deposit insurance so expanding the FDIC levels will not work or at least will be a very small part of the rescue.

Tab Gilles : 10/2/2008 9:52:26 AM

Crude OIl $96.19; NatGas $7.85; Gold $858.5; Euro 1.3814; Yen 105.38; T-Bill1 mos 0.62% 3mos 0.78%; Libor 1mos 4.045% 3mos 4.208%; TED Spread 3.6%

Keene Little : 10/2/2008 9:51:55 AM

SPX and NDX have now broken yesterday's lows, confirming the bounce off the low as just a correction. The path of least resistance remains down.

Tab Gilles : 10/2/2008 9:47:42 AM

$VIX 41.69 +1.83

$VXD 38.81 +1.56

$VXN 44.41 +1.49

$RVX 43.18 +0.94

Jane Fox : 10/2/2008 9:44:40 AM

AD line opens at a bearish -1162. THe VIX is climbing. The bears have the ball this morning.

Jane Fox : 10/2/2008 9:42:42 AM

The study I referred to in my last post followed the banking crisis in Japan because it was the most relevant to our current state of affairs. Japan allowed insolvent banks to continue doing business and found all they did was dig themselves in deeper and ended up suffering a severe credit supply contraction and economic decline. This of course suggests suspending the Mark to Market rules will not work because that will just allow the banks that need to close their doors to stay open.

Linda Piazza : 10/2/2008 9:38:16 AM

Just one more note before I disappear into the sunset . . . or sunrise. The TED spread is 3.60 this morning, the highest I've ever seen it, even intraday.

Jane Fox : 10/2/2008 9:36:06 AM

John Maudlin is a fellow I have been reading for years and I find his comments to be rational, well thought out and very relevant. He sends out an email each week on the current state of affairs and I mostly agreed heartily with him. I would like to share some comments he made in his last email.

He, of course, has been discussing our current banking crisis and if the bailout package will work or not. He cited a study done of 42 fairly recent banking crises around the world that has come to a conclusion that dithering, doing nothing is far far worse than doing nothing at all. The study found that like the old ad we so fondly remember, "Pay me now or pay me later" but if you pay later you pay a lot more.

We are going to pay for this at some point but if we wait and do nothing we will pay for it with a major recession, high and persistent unemployment and reduced incomes.

The time to put in long term fixes as past so we need something quick and we need something now.

Linda Piazza : 10/2/2008 9:32:01 AM

I will be away today, as I noted earlier, but wanted to step in for a moment and point out nearby support/resistance levels for the OEX. The trouble is that the scrambled charts, scrambled by the recent action, make that interpretation somewhat difficult. If the OEX moves in accordance with futures action, then we could expect it to drop below potential Keltner support on 30-minute closes at 543.72 as of the close yeaterday, very near the 543.30-ish Fib level that's taken off the rise from the 7/18 low into the 7/19 high. Because the OEX dips beneath that doesn't mean that it will close the first 30-minute period below it, though, something that bears want to occur. Watch for the potential that an early dip could see a bounce back above or at least to that potential resistance. If the resistance holds, watch for next possible support in the 539-540 zone and then near 532.50-534.

If the OEX bounces immediately after an initial punch lower, the nearest strong resistance is at 547.78 on 30-minute closes and 548.44 on 15-minute ones. Charts are choppy and action is to some degree guided by what people think will happen with legislation, so be wary of trusting any chart setup too much.

Keene Little : 10/2/2008 9:26:42 AM

Equity futures sold off fairly hard last night following the passage of the bailout bill in the Senate. YM dropped -158 points and ES dropped -17.75. They then rallied to a high near 5:30 AM, retracing the selloff, before selling off again back near the overnight lows. So we'll have NDX dropping hard from a kiss goodbye against its broken uptrend line from Monday and SPX looks like it could break its uptrend line this morning if it drops below 1157 (which futures suggest will happen).

Jane Fox : 10/2/2008 9:17:30 AM

Here are your overnight charts and as you can see we have a mixed bag. The Russell 2000 futures (TF) chart is basically useless overnight now because it is delayed and I am too cheap to pay for a subscription to the NYBOT. The DOW (YM) was able to break its previous day highs, the S&P (ES) tagged its PDH and the NDX (NQ) was contained in its previous day range. Link

Jane Fox : 10/2/2008 9:01:42 AM

WASHINGTON (MarketWatch) -- U.S. weekly jobless claims remained at their highest level in seven years, Labor Department data showed Thursday, as people in the hurricane-hit states of Louisiana and Texas filed for benefits.

For the week ended Sept. 27, seasonally adjusted first-time claims for unemployment benefits rose 1,000, to stand at 497,000 -- the highest since late September 2001. The higher number reflects claims following the damage wreaked by Hurricane Gustav in Louisiana and Hurricane Ike in Texas.

Without the hurricane-related claims, initial filings would have been about 439,000 last week, the Labor Department said.

Jane Fox : 10/2/2008 9:00:11 AM

WASHINGTON (MarketWatch) -- The Senate approved a revised $700 billion U.S. plan to stabilize the financial industry and kick-start credit on Wednesday night, just two days after the House defied President Bush and leaders of both political parties to reject the original package.

By a vote of 74-25, senators authorized the Treasury secretary to buy bad assets from companies' books, allowed the Federal Deposit Insurance Corp. to raise its deposit-insurance cap to $250,000 from $100,000, extended several tax breaks and required government agencies to modify troubled mortgages.

President Bush, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke pressed lawmakers hard to approve the bill, and members of both parties huddled earlier this week to hammer out a compromise plan after the failure of the vote in the House on Monday.

Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., left the presidential campaign trail to cast their votes for the plan.

Linda Piazza : 10/2/2008 8:46:33 AM

I will be away from the Market Monitor today.

Jeff Bailey : 10/2/2008 4:03:44 AM

Oh, good "Fiscal Facts" from the Tax Foundation regarding last week's Presidential Debate at this Link

Jeff Bailey : 10/2/2008 3:54:32 AM

Mini equity futures are ...

Dow ... YM Z8 (that's YM then a "space" then Z8)

Jeff Bailey : 10/2/2008 3:45:02 AM

Here's some of the symbols you might need Link

Really feel naked not being able to glance at 5, 20 and YRNet% to see what is outperforming, or underperforming.

Jeff Bailey : 10/2/2008 3:39:30 AM

All these new QCharts 6.0 symbols will take some getting used to.

Got them all except the US Dollar Index, NASDAQ Telecom and GS Software Index $GSO (still not working) and CRB Index.

Really disappointed in no 5-dayNet%, 20-dayNet% and YRNet% fields. Really good for relative strength shifts for quick glance.

Jeff Bailey : 10/2/2008 3:30:11 AM

I've been working on "the move" to 6.0 Keene.

I'm working on a replacement too.

YM off 96 at 10,791 and pretty much sitting here.

Good to see you and Jim looking at the bill. Really though, not that much compared to other bills passed this year.

Really, we may not have seen anything at this point. Wait until after this election year!

Special interests and lobbiest getting powerful by the day.

Jeff Bailey : 10/2/2008 3:21:09 AM

US Retail Gasoline Price Heat Map Link

Georgia spotlight Link

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