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Jeff Bailey : 11/10/2008 9:47:34 PM

Email Question: regarding disparity in price between DIA and DOW of 20-points all day. Is there significance to that?

Jeff's Reply: Fair value for the Dow Jones today was -21.89 (December futures/cash). Here is INDU and DIA montage with your daily pivot level (Friday's regular session high/low/close) (which I also strongly suggest YM traders use) Link

Note: YM settled 8,996 on Friday. Settled 8,887 on Monday. YM's Daily Pivot for Monday (using Friday's h/l/s) was 8,901

Jeff Bailey : 11/10/2008 4:37:33 PM

Setting downside, then upside alert on IBM at 78.10, then 82.40. This would be "cramp and ramp"

Jeff Bailey : 11/10/2008 4:34:14 PM

Setting upside alert on IBM at $95.00

Jeff Bailey : 11/10/2008 4:21:38 PM

Setting upside alert on WMT at $56.90

Jeff Bailey : 11/10/2008 4:20:58 PM

Setting upside alert on CVX at $76.50

Jeff Bailey : 11/10/2008 4:20:33 PM

Setting upside alert on XOM at $76.00

Jeff Bailey : 11/10/2008 4:19:54 PM

Setting upside alert on USO at $52.75.

Keene Little : 11/10/2008 4:04:12 PM

The same expanded flat correction for SPX, as shown for NDX, gives an upside Fib projection at 929.57. Like this morning we might see a quick pop higher tomorrow morning that gets sold into again. At least that's the setup for tomorrow. SPX 10-min chart: Link

Jeff Bailey : 11/10/2008 4:01:51 PM

HMO.X 924.53 -2.74% ...

Jeff Bailey : 11/10/2008 4:01:29 PM

AET $23.58 +0.59%
UNH $21.37 -4.81% ...

Jeff Bailey : 11/10/2008 4:00:53 PM

CI $14.96 -5.61%
HUM $35.06 -1.46% ...

James Brown : 11/10/2008 4:00:46 PM

I mentioned BIDU last week and outlined its bearish channel. The stock just produced another failed rally at the top of its channel but traders are buying the dip near $204.

If you like playing a volatile stock BIDU could have an opportunity here. Chart: Link

James Brown : 11/10/2008 3:53:30 PM

The XBD and DJUSHB are extending their losses.

Broker-dealers XBD -7.8%
Home Constru. DJUSHB -7.2%

Keene Little : 11/10/2008 3:36:53 PM

Since NDX is holding above last Thursday's low, it could get some bulls excited about the low holding and drive this back up (with the help of some short covering). The upside Fib projection for a larger, expanded flat A-B-C, correction off today's mid-day low is NDX 1267.30, as shown on the 10-min chart: Link . But it needs to giddy up and head higher from here otherwise a continuation lower would negate that short term bullish possibility.

James Brown : 11/10/2008 3:36:15 PM

Dow Industrial components MCD and WMT are both still green today but they are fading from their highs.

MCD spiked to the $58.00 level but has produced a failed rally at its 200-dma.

WMT is also struggling under its 200-dma.

Jeff Bailey : 11/10/2008 3:32:33 PM

UUP weightings ... Euro 57.6%, Yen 13.6%, Pound 11.9%, C$ 9.1%, Swedish Krona +4.2%, Franc 3.6%

James Brown : 11/10/2008 3:29:33 PM

FYI: the Point & Figure chart target on GOOG is bearish at $280.00.

Jeff Bailey : 11/10/2008 3:28:41 PM

FXE 127.60 -0.10, or -0.07%
FXY 102.24 +0.81, or +0.79%
FXB 156.58 -0.37, or -0.23%

James Brown : 11/10/2008 3:28:16 PM

Google Inc. (GOOG) is also showing a lot of weakness. The stock is off 5.4% and testing its October lows in the $309-310 zone.

James Brown : 11/10/2008 3:27:09 PM

Apple Inc. (AAPL) continues to sink, down 3.4%, and trading at its lows for the day under $95.00.

Jeff Bailey : 11/10/2008 3:26:54 PM

UUP $26.45 -0.02, or -0.07% ...

Jeff Bailey : 11/10/2008 3:26:32 PM

DXY 85.94 ... +0.03, or +0.03%

Jeff Bailey : 11/10/2008 3:20:36 PM

INDU Components (weighted as of morning open) with debt/equity notes, price notes, with DJI itself Link

Keene Little : 11/10/2008 3:13:08 PM

Looking at the chart of the dollar (UUP) that James posted (2:57 PM), it's a very nice 4th wave triangle playing out (the 2nd wave correction was the pullback in September). It should get one more move down in the triangle (to complete tha a-b-c-d-e wave count inside it) before busting another move to the upside.

Keene Little : 11/10/2008 3:07:56 PM

NDX is about to test last Thursday's low (1235.85) but I suspect it's not going to hold (it will follow GOOG which is out in front, leading the way). But until it breaks it is support so keep an eye on theat level.

Jeff Bailey : 11/10/2008 3:03:11 PM

SPX traders may want to make the tie.

Jeff Bailey : 11/10/2008 3:02:01 PM

RLX 267.13 ... overlap of WKLY S1 and WKLY 19.1% at 259/258.

Jeff Bailey : 11/10/2008 3:01:03 PM

AVP $25.07

James Brown : 11/10/2008 3:00:34 PM

I find it interesting that the Dow Jones Transportation index is showing a little relative strength even as crude oil turns positive. The USO is now up 2%.

The Transports are definitely doing better than the DJIA or S&P 500.

James Brown : 11/10/2008 2:57:37 PM

After looking at gold I decided to look at the U.S.dollar. The UUP powershares index on the dollar is showing a reflection of the consolidation in the gold. Actually it's probably gold reflecting the move in the dollar.

You can see the big run higher and the current consolidation. Normally the previous trend continues, which in this case is up. If the dollar continues to rise then commodities like gold and oil will continue to fall.

Chart of UUP dollar index: Link

Jeff Bailey : 11/10/2008 2:53:01 PM

AVP $25.17 -4.55% ... set to test its WKLY 38.2% ($25.07)

Jeff Bailey : 11/10/2008 2:52:29 PM

RLX.X 267.36 -2.27% ... after bounce back up to WKLY 38.2% (271.80).

James Brown : 11/10/2008 2:48:51 PM

Hmm.... looking at the Russell 2000 small cap index and the NASDAQ Composite, both are producing new bearish engulfing candlesticks following yesterday's inside-day pattern. It's not looking good for tomorrow. We'll have to see how the last hour shapes up.

Jeff Bailey : 11/10/2008 2:45:48 PM

Current Temperatures Link

Jeff Bailey : 11/10/2008 2:44:56 PM

UNG 20-dayNEt% +1.77%

USO -12.79%

Jeff Bailey : 11/10/2008 2:44:08 PM

UNG did violate WKLY R2 ($30.62) pretty good. Need some oil higher. It's been a drag.

Jeff Bailey : 11/10/2008 2:43:08 PM

UNG $30.90 +6.36% ... back for another test of WKLY R1.

Jeff Bailey : 11/10/2008 2:41:01 PM

The notes from VXO.X, a volatility measure of OEX stocks (biggest caps of SPX), is the notable LAG, or LOWER premium/volatility.

Why isn't there as much put buying/call selling here as VIX.X?

James Brown : 11/10/2008 2:39:38 PM

Jeff is correct. The chart links are now working.

For the moment there is a minor delay, a few seconds to up to two-minutes, before charts are actually viewable.

Jeff Bailey : 11/10/2008 2:39:33 PM

VXO.X 60.96 +4.41% ... back "in the zone" ... just as we do with Pivot (support broken/becoming resitance , resistance broken/becoming support) we do with trend (see UNH trend).

Jeff Bailey : 11/10/2008 2:36:31 PM

Jim ... that has been happening for several days. Seems to "work" after several minutes.

Jeff Bailey : 11/10/2008 2:35:03 PM

CI, AET, HUM, UNH 5-minute intervals ... Link

Keene Little : 11/10/2008 2:30:35 PM

Whether the bounce off today's low turns into something a little larger or not, it's got a very corrective look to it (overlapping highs and lows) and that points to new lows to come.

Jeff Bailey : 11/10/2008 2:30:26 PM

UNH $21.62 -3.61% ... bounce back from WS1 does find some 20-minutes worth of sellers at extenstion of our upward trend and 38.2% retracement.

Jim Brown : 11/10/2008 2:30:15 PM

Chart problem - It appears something has changed in the last 30 min and some of the recent chart links are not working. Tech support is looking at the problem.

Jeff Bailey : 11/10/2008 2:27:46 PM

02:00 Internals found at this Link

Jeff Bailey : 11/10/2008 2:26:09 PM

FXE $127.78 +0.06% ... WKLY Pivot $128.24. Near-term upward trend from 10/27 low to 11/03 pullback tested again today (as was Friday)

Jeff Bailey : 11/10/2008 2:24:36 PM

GLD ... pullback found buyers at WKLY Pivot ($73.08). No test of WKLY R1 (75.10)

Jeff Bailey : 11/10/2008 2:21:08 PM

Treasuries closed at 01:00 in observance of tomorrow's Veterans' Day

Shall we never forget the sacrifices.

Jeff Bailey : 11/10/2008 2:20:21 PM

NYSE NH/NL matches Friday's at 5:152

Jeff Bailey : 11/10/2008 2:17:10 PM

Don't remember ever having seen XOM and CVX equal price.

Jeff Bailey : 11/10/2008 2:16:50 PM

IBM -2.20%, XOM $74.18 +0.44%, CVX $74.19 +1.14%, MMM +1.32%, PG +0.75%, JNJ -0.01%, MCD +2.57%, WMT +2.04%, UTX +1.11% and BA -0.04%

James Brown : 11/10/2008 2:16:40 PM

I'm having a problem with my chart. hold on.

James Brown : 11/10/2008 2:16:13 PM

Trading Idea: Readers might want to keep an eye on gold. The gold ETF the (GLD is seeing its consolidation pattern narrowing. That normally suggests a breakout is imminent.

Will the previous trend (down) continue? Or will we see a change in trend? One idea might be some sort of neutral strategy like an option straddle or an option strangle. Strikes are available at $1.00 increments. Don't forget that November options expire in two weeks. You might want to play Decembers.

Here's a chart: Link

Jeff Bailey : 11/10/2008 2:14:38 PM

Oh my ... looking at DIA/YM components ...

Jeff Bailey : 11/10/2008 2:13:31 PM

VIX.X 59.60

Jeff Bailey : 11/10/2008 2:13:11 PM

VXO.X undercutting its QS1

Keene Little : 11/10/2008 2:12:03 PM

A 38% retracement of this morning's decline is at SPX 928/NDX 1264. A 50% retracement would be up to 932.50/1270.

James Brown : 11/10/2008 2:09:00 PM

The market's worst sectors today appear to be the Broker-dealers (XBD) index and the DJUSHB Home construction index.

XBD -5.6%
DJUSHB -5.0%

Goldman Sachs (GS) is leading the XBD lower as GS sinks 9.4% to a new five-year low at $70.00. Wonder how Mr. Buffett feels about his investment in GS at $115.00 now?

James Brown : 11/10/2008 2:05:27 PM

The oil ETF (USO) tagged another new 52-week low a couple of hours ago at $49.00 but it's seeing a decent bounce now at $51.22. Volume has been extremely light thus far. Only 2.0 million versus an average daily volume of 12.1 million.

Jeff Bailey : 11/10/2008 2:04:23 PM

VIX 30-minute Link ... with QCharts' wkly turned on

Jeff Bailey : 11/10/2008 2:03:18 PM

DIA $89.32

Jeff Bailey : 11/10/2008 2:02:34 PM

VXO.X 59.60 alert!

James Brown : 11/10/2008 2:01:53 PM

I know that Jane and Jeff have been posting about the VIX. I'm taking some small comfort in the fact that the VIX is still trading under Friday's high for now. Although it seems like the +6.6% jump in the VIX might be a bit of an over-reaction today. We'll see.

Jeff Bailey : 11/10/2008 1:58:03 PM

IF ... CI $12.47 and overlap, THEN look to take a PROFIT in either HUM or UNH, OR sell out-the-money put.

Jane Fox : 11/10/2008 1:55:28 PM

Here is a chart of UNG showing a very nice reverse head and shoulders pattern so I think this market is just about ready for a long shot. I will buy it once it breaks the neckline and will use calls. Link

Jeff Bailey : 11/10/2008 1:53:35 PM

CI, AET, HUM, UNH 30-minute intervals with QCharts' WKLY Pivot levels turned on Link

Jeff Bailey : 11/10/2008 1:52:09 PM

UNH alert! $21.28 ... 1st to trade WKLY S1.

Keene Little : 11/10/2008 1:38:26 PM

On Friday I had shown a 120-min chart of GOOG and pointed out the fact that it had broken down from a sideways triangle consolidation pattern that it had been in since the September low ( Link ). It did not make it back up to the bottom of its triangle and has since broken sharply below last Thursday's low.

I had suggested GOOG's breakdown was a "leading indicator" and that NDX would follow. For GOOG traders the downside objective out of the triangle pattern (projecting its widest part from the breakdown point) is about 256, shown on the daily chart: Link

Jeff Bailey : 11/10/2008 1:34:26 PM

VXO.X "in the zone" of Q R1 and Qrtrly 80.9%.

Jeff Bailey : 11/10/2008 1:30:46 PM

Setting downside alert on VXO.X at 59.67.

Keene Little : 11/10/2008 1:21:03 PM

I've updated the SPX 60-min chart and took off the bullish possibility for a rally above Tuesday's high. Based on the corrective price pattern for the bounce off last Thursday's low it is highly unlikely (not impossible though) that we'll see a stronger rally from here. The two most probable price patterns at this point are for us to stay inside the large sideways triangle (pink) or drop to a new low (October 2002 low at 768 being the downside target). Notice MACD starting to turn back down from the zero line (hasn't crossed yet though): Link

It's possible the correction off last Thursday's low becomes a larger bounce, instead of seeing price drop directly from here so that's the risk if you're short the market. A rally above this morning's high would obviously tell us the correction is extending. But if the market continues to work its way lower I'll be watching for potential support near SPX 882 and then 850.

Jeff Bailey : 11/10/2008 1:00:28 PM

HUM-WE's $0.05 x $0.15

Jeff Bailey : 11/10/2008 12:58:50 PM

$30 put OI "heaviest" at 15,237.

Jeff Bailey : 11/10/2008 12:58:00 PM

HUM trades the $35.00 stike.

Jeff Bailey : 11/10/2008 12:47:03 PM

American Capital Ltd. (ACAS) 8.95 -35.00% ... #11 most active. New 52-weeker.

Jeff Bailey : 11/10/2008 12:43:30 PM

United Health (UNH) $21.60

UHB-XW $0.70 x $0.80

VIX.X 60.15

Keene Little : 11/10/2008 12:41:30 PM

If the market continues to sink lower then I think we'll see last Thursday's lows break and that would raise the probability that we'll see SPX 882-883 get tagged (the Gann level from the Square of Nine chart that's square to 1005 and 768).

Keene Little : 11/10/2008 12:35:37 PM

We didn't get much of a bounce off the low just before 12:00 PM. We might see price waterfall lower or else it now becomes possible we're getting a sharp corrective pullback. Use a downtrend line along today's decline as you may want to use that to trail your stop lower (in case it's a corrective pullback that leads to a new rally leg). Obviously if price waterfalls lower it will extend well below the today's downtrend line.

Jeff Bailey : 11/10/2008 12:33:39 PM

dj- US 3-year Auction: 1.800%; 21.59% at the high; Bid-to-cover was 3.07

Jeff Bailey : 11/10/2008 12:30:33 PM

CI, AET, HUM, UNH daily interval montage Link

Jane Fox : 11/10/2008 12:26:22 PM

Here are the charts of the S&P futures and the VIX and they are in sync. Link

Jeff Bailey : 11/10/2008 12:27:17 PM

UNH $21.74 -3.07% ... edges under its 38.2% retracement. Testing upward trend (10/09 intra-day low to recent 10/28 low)

Jeff Bailey : 11/10/2008 12:16:06 PM

12:00 Internals found at this Link

Jeff Bailey : 11/10/2008 12:09:48 PM

DXY 85.84

Jeff Bailey : 11/10/2008 12:09:15 PM

FXY 101.94 +0.50% ... session highs.

Jeff Bailey : 11/10/2008 12:08:23 PM

FXE 127.69 (unch)

Jane Fox : 11/10/2008 12:01:40 PM

Needless to say it has been the VIX who had all the cards today. The AD line, AD ratio and TRIN were all bullish but the VIX was not and it has proven to be the right one. Link

Keene Little : 11/10/2008 11:53:02 AM

Looking at a 5-min chart of SPX you can now see what is turning into a 5-wave move down from this morning's high. Unless it's a more bearish 1-2, 1-2 wave count to the downside (in which case we'll get a flush to downside next), a 5-wave move down should be followed next by a bounce to correct this morning's decline and then turn back down again. If you want to ride out the bounce you'll need to keep your stop at a new daily high for now. If we get the flush to the downside it should then be followed by stair-stepping lower.

Jeff Bailey : 11/10/2008 11:44:45 AM

FXE $127.73 +0.02% ... WKLY Pivot (128.24) kept things in check. (per subscriber comment/observation last week)

Jeff Bailey : 11/10/2008 11:43:07 AM

Next Friday is November op-ex.

Jeff Bailey : 11/10/2008 11:42:35 AM

USO $50.02 -0.03% ... slips red. WKLY Pivot kept things in check near the open.

Jeff Bailey : 11/10/2008 11:41:58 AM

UNG $30.43 +4.75% ... session high near the open and its WKLY R1.

Jeff Bailey : 11/10/2008 11:38:49 AM

Trade blotter of CLOSED and OPEN/active profiles that I've made at this Link

Jeff Bailey : 11/10/2008 11:36:06 AM

VIX.X 57.52 +2.53% ... didn't quite see MONTHLY Pivot.

Jeff Bailey : 11/10/2008 11:26:21 AM

The Obama Market: What's Hot, What's Not ... Barron's Link

Jeff Bailey : 11/10/2008 11:18:06 AM

All we know from the VXO.X is less put buying/call selling than other measures. That and premium observations.

Jeff Bailey : 11/10/2008 11:16:07 AM

See today's news out of China.

Jeff Bailey : 11/10/2008 11:15:51 AM

VXO.X 57.55 -1.42% ... all other volatility measures (RVX.X, VXN.X and VIX.X) up about 3%.

DIA, or OEX and the mega large caps are probably the stocks/indices to buy on weakness setup.

Jeff Bailey : 11/10/2008 11:12:40 AM

Obama to use executive orders for immediate impact ... Fox News Story Link

Keene Little : 11/10/2008 11:11:24 AM

This morning's decline is so far only a 3-wave move down and as such could be simply a pullback correction. A push back above the bounce high just before 10:30 AM from here would leave the pullback as a 3-wave correction. Therefore that level (SPX 946.41) makes a good stop level if you want to keep your stop as tight as possible for now.

Jeff Bailey : 11/10/2008 11:09:24 AM

Weekly, Monthly, Quarterly Index Pivot Matrix at this Link

DIA/TRIN corrected from earlier post.

Keene Little : 11/10/2008 10:54:32 AM

The RUT is not far behind NDX and should be the next one into the red.

Jeff Bailey : 11/10/2008 10:53:55 AM

DIA $90.50

Jeff Bailey : 11/10/2008 10:53:45 AM

INDU 9,039

Jeff Bailey : 11/10/2008 10:53:36 AM

SPX 936.76 +0.61% ...

Jeff Bailey : 11/10/2008 10:53:09 AM

FXY 101.21 ... comes up to MNTHLY Pivot.

Jeff Bailey : 11/10/2008 10:48:09 AM

FXY 101.01 -0.41% ... MNTHLY Pivot /DAILY S1 overlap today. FXY undercut wkly pivot (100.90)

Jane Fox : 11/10/2008 10:44:03 AM

A report shows the US could lose 3 million jobs and $156 Billion over three years through lost wages, lower social security receipts and income taxes if the 3 major auto manufacturers were cease to exist.

Keene Little : 11/10/2008 10:43:05 AM

Bonds are still rallying and that could keep the selling pressure on stocks.

Jane Fox : 11/10/2008 10:38:47 AM

Deutsche Bank maintained its rating on Ford at a hold.

Jeff Bailey : 11/10/2008 10:37:43 AM

RUT.X's daily pivot = 503.31

Jane Fox : 11/10/2008 10:36:21 AM

GM shares have dropped 17% to $3.62 after Deutsche Bank downgraded it to a sell from a hold and said shares are worthless or in other words $0.00.

It is widely known the company will need government intervention for it to last past the end of the year.

Jeff Bailey : 11/10/2008 10:30:23 AM

VIX.X 55.92 -0.18% ... also unable

Jeff Bailey : 11/10/2008 10:29:34 AM

SMH, BIX.X and RUT.X unable to see trade so far at their respective WKLY Pivots.

Jeff Bailey : 11/10/2008 10:27:47 AM

QCharts5.01 ... DIA symbol now NYSE:DIA (not AMEX:DIA)

Jane Fox : 11/10/2008 10:26:34 AM

The VIX is telling me the bears are in control but the AD line and TRIN are still stubbornly bullish. Link

Jane Fox : 11/10/2008 10:19:31 AM

49 Economists published a report today of Blue Chip Economic Indicators. Their findings lead them to believe the US economy will shrink 0.40% in 2009 compared to 2008. They also were lead to believe economies in Japan, Britain and the eurozone will shrink as well.

Jeff Bailey : 11/10/2008 10:18:45 AM

10:00 Internals found at this Link

Keene Little : 11/10/2008 10:12:08 AM

The size of the pullback from this morning's gap up high leads me to believe we've already seen the high for the day (and maybe the week). Watch for a bounce as a shorting opportunity with a stop at a new daily high.

Jane Fox : 11/10/2008 10:08:24 AM

Shares of Circuit City (CC) are down 55%.

Jane Fox : 11/10/2008 10:07:01 AM

Circuit City said it has filed for bankruptcy under Chapter 11 of the Bankruptcy Code.

Last week it said it was closing 155 stores and laying off 17% of its workforce but today it looks like a different story although it plans to continue operating the business of the remaining stores without interruption.

Jeff Bailey : 11/10/2008 10:01:40 AM

TRIN 0.86 ... up 0.31

Jane Fox : 11/10/2008 9:54:44 AM

Both the S&P and DOW futures have not yet tested their respective overnight lows they are both very close to doing so.

Jeff Bailey : 11/10/2008 9:53:16 AM

YM 9,101 ... 60-minute interval chart Link

Jeff Bailey : 11/10/2008 9:45:34 AM

YM 9,077 ... checks WKLY Pivot.

Jane Fox : 11/10/2008 9:43:20 AM

AD line opens quite bullish at +1700 but I see NQ (NDX futures) are breaking through their ovenright lows and seem to be heading lower still.

Keene Little : 11/10/2008 9:42:09 AM

NDX futures (NQ) have given up their overnight gains and are the first to dip into the red and are therefore showing relative weakness. NDX has achieved two equal legs up from Thursday's low by tagging 1292.80. Therefore the risk this morning is for a gap n crap.

Jane Fox : 11/10/2008 9:41:46 AM

The FED, the US Treasury and AIG got together on the weekend and restructured the government's bailout of AIG. It looks like the Treasury will now be buying $40 Billion of preferred shares under the Troubled Asset Relief Program (TARP) and the FED will create two new agencies to help AIG sell its Mortgage backed assets.

Under this plan the Treasury will have much more control of compensation packages and now the top 70 (up from the top 5) officers of AIG will have golden parachute restrictions and the bonus pool frozen.

Jeff Bailey : 11/10/2008 9:40:13 AM

Asian Markets Link ... finished mostly higher on Monday. $NIKK jumped 5.81% to 9,081; $HSI rose 3.52% to 14,774; $SSEC vaulted higher by 7.27% to 1,875.

Jane Fox : 11/10/2008 9:34:44 AM

Futures liked the news out of China this morning but, although they gapped up when these markets opened Sunday, have not been able to add to that gap. I imagine the AD line will open on the bullish side of neutral. Link

Keene Little : 11/10/2008 9:26:29 AM

Bonds had dropped in the first hour of overnight trading but have since rallied above Friday's close. That's a heads up that we could see stocks reverse their gains if money rotates from stocks to bonds.

Jane Fox : 11/10/2008 9:24:59 AM

China's state run news agency has unveiled a huge $4Trillion Yuan ($586Billion US) economic stimulus package in an effort to loosen credit conditions, cut taxes and jump kick a massive infrastructure spending program. Chinese official hope the plan will compensate for the fall in exports from the rest of the world

The industries that will benefit the most will be steel, cement and railways and when the markets opened Monday those stocks preformed very well with many reaching their stop limits.

The head of the IMF said the huge package will influence the global economy by boosting global demand but what is most important is how quickly the plan will be put in place, about $100 billion Yuan will hit the streets before the end of the year. The plan also will include $120 Billion Yuan in tax cuts and spending to rebuild from several disasters most notably the May 12th earthquake.

Keene Little : 11/10/2008 9:21:19 AM

Equity futures have held onto most of their overnight gains but have pulled back from their highs near 5:30 AM. A retest of the highs after the cash market opens should have SPX testing the 960 area and would be a good setup to try a short play.

Keene Little : 11/9/2008 10:20:29 PM

Monday's pivot table: Link

Late Friday afternoon the market snapped to the upside and it looks good for the c-wave of an a-b-c bounce pattern off Thursday afternoon's low. Two equal legs up (wave-a = wave-c) is at SPX 940.73 and that falls right on top of the 38% retracement of last week's decline (940.90). I'll be watching for a reversal from that level (and it's a good place to look for a short entry Monday morning. SPX 10-min chart: Link

But futures (ES) have already climbed higher than equality so if SPX heads above 941 then it could head up to its next Fib projection close to 960 which is half way between the 50% and 62% retracements. The current bounce off last Thursday's low should be followed by another leg down but it's not clear yet how far it will drop. The two higher-probability moves (not guaranteed, just higher probability) are for either a hard decline towards the October 2002 low near 768 by the end of this week (dark red) or a down-up sequence to finish the sideways triangle consolidation pattern by the end of this week, shown in pink on the 60-min chart: Link

If the market is going to stay in its consolidation pattern we should see a turn back down to new lows in the end of November or beginning of December. Both of these scenarios are shown on the daily chart: Link

OI Technical Staff : 11/9/2008 9:59:59 PM

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