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Jeff Bailey : 11/12/2008 9:31:55 PM

MBA Commends HUD's Effort to Reform RESPA ... MBA Press Release Link

Jeff Bailey : 11/12/2008 9:20:18 PM

dj- S&P: AAA Subprime RMBS To See Almost No Principal Write-Down

Standard & Poor's Ratings Services said in a new report that write-downs of subprime mortgages will be much less than expected, and residential mortgage-backed securities that received AAA ratings expected to see a 0.4% write-down rate.

The figures come after the hundreds of billions of dollars in write-downs on various mortgage-related securities this year, especially ones with subprime and Alt-A loans.

S&P said for U.S. subprime RMBS deals issued from the second half of 2005 through the first half of 2007, projected losses on the underlying mortgages are expected to total $180 billion.

But the credit rater sees principal write-downs - which takes place when the amount of losses exceeds available credit support - to be $85 billion. Those are still "significant" losses for RMBS investors, admitted S&P, but not nearly as bad as the headline loss figure might convey.

The difference between the loss and write-down figures reflects the various forms of credit enhancement that support the rated securities, such as subordination, overcollateralization and excess spread.

Projected collateral losses are seen ranging from 14% for subprime loans from the second half of 2005 to 27% for those issued in the first half of last year. But principal write-downs are expected to be less than half those figures.

For RMBS originally given AAA ratings - 81% of those graded by S&P - write-down levels are seen being just 0.4% of the original balance of the loans in the deals. The write-down rate jumps dramatically for lower-rated RMBS.

Jeff Bailey : 11/12/2008 8:40:05 PM

YG settled 717.50. Currently off $5.00 at $712.50.

Jeff Bailey : 11/12/2008 8:30:47 PM

Current CLOSED and OPEN/active MM Profiles that I've made at this Link

Will be alert tomorrow morning. VIX.X and VXO.X observations clear. Took it on the chin in DDM (looked good for about an hour yesterday), then hits our stop, and can't say at this point that it wasn't best, will see in the morning if a significant gap lower open. Market participants distributed lower to the close.

In the hole $95.75. If given a chance to rectify at the open, then will look to take it.

GG closest to a target. $1.45 would be "nice" .... $3 and WKLY S2 even better.

Jeff Bailey : 11/12/2008 6:57:35 PM

XLF's $12.50 -6.15% ... also a new 52-week low close.

Jeff Bailey : 11/12/2008 6:50:16 PM

Closing U.S. Market Watch Link

RED are new 52-week low CLOSES. At a minimum, would suggest lack of short covering.

Jeff Bailey : 11/12/2008 6:33:20 PM

Today's Global Econ. Calendar to 04:45 PM ET Link

Jeff Bailey : 11/12/2008 6:33:03 PM

December Crude (cl08z) daily intervals Link

Dec. Crude settled down $3.17, or -5.34% at $56.16.

Chart from 10/22/08 Link

Jeff Bailey : 11/12/2008 5:53:56 PM

Closing Internals at this Link

Jeff Bailey : 11/12/2008 5:48:12 PM

Applied Materials (AMAT) $9.95 -6.57% ... Ticks $9.90 on headline numbers.

Oct'02 low $10.26 closed BELOW today!

Jeff Bailey : 11/12/2008 5:45:02 PM

Intel warns on quarter, weak demand everywhere ... Reuters Story Link

Jeff Bailey : 11/12/2008 5:42:56 PM

NASDAQ Comp. (COMPX) 1,499.21 -5.16% ... MONTHLY Interval chart Link

Jeff Bailey : 11/12/2008 5:39:09 PM

Intel (INTC) $13.54 -2.79% ... released for trade $12.59 extended.

Jeff Bailey : 11/12/2008 5:06:20 PM

Yahoo! Inc. (YHOO) $10.34 -8.89% ... still off its Sep'02 low of $4.47.

Jeff Bailey : 11/12/2008 5:03:34 PM

Cisco Systems (CSCO) $16.57 -3.55% ... still some room to its Oct'02 low of $8.12.

Jeff Bailey : 11/12/2008 4:58:45 PM

Qualcomm (QCOM) $32.65 -6.90% ... Well off its Aug'02 low of $13.86.

Jeff Bailey : 11/12/2008 4:56:01 PM

Apple Computer (AAPL) $90.12 -4.90% ... well off its April'03 low of $6.36.

Jeff Bailey : 11/12/2008 4:53:46 PM

Microsoft (MSFT) $20.30 -4.24% ... holding its July'02 low of $18.92. 200-month SMA right here.

Jeff Bailey : 11/12/2008 4:51:41 PM

How, I haven't a clue.

Jeff Bailey : 11/12/2008 4:50:40 PM

Intel (INTC) 13.54 -2.79% ... holding its Oct'02 low of $12.95

Jeff Bailey : 11/12/2008 4:43:08 PM

GLD goes out $70.00 ... ~700.00 spot on the button.

Keene Little : 11/12/2008 4:26:07 PM

MarketWatch headline at the close, "Nasdaq falls below 1,500 level for the first time since 2003" has got to be sending some shivers through some bulls right about now. I have several acquaintances who have held onto their tech stocks since 2000, telling me they were sure they're going to recover. They refused to believe me when I said we'll first see them drop below the October 2002 low and then maybe in 30 years you'll see prices back up to where they were, maybe.

Jeff Bailey : 11/12/2008 4:14:31 PM

YM 8,272 ... to its close/settle. Not much of a bounce from 03:49 benchmark of 8,299

Jeff Bailey : 11/12/2008 4:10:57 PM

FXE $124.98 -0.23% ... juuuust below the 1.2500 eur/$ futures. Threatening 52-week low settlement.

Keene Little : 11/12/2008 4:06:47 PM

SPX held 850 (low of 850.48) and consequently keeps the sideways triangle idea alive. If it's to be the sideways triangle it needs another big rally of about 130 S&P points from here. Nice long trade if you dare. If we get a bounce tomorrow morning it will hopefully provide some clues as to whether it can develop some legs. If the market gaps down tomorrow then the triangle idea will have been torpedoed out of the water. 60-min chart: Link

Jeff Bailey : 11/12/2008 4:03:44 PM

Didn't catch his/her offer.

Jeff Bailey : 11/12/2008 4:03:34 PM

Just got a quick shot of AET's level II prior to close. CBOE was bid at $19.99.

Jeff Bailey : 11/12/2008 4:02:00 PM

Good grrrravy ... AET's session low ... $21.61

Jeff Bailey : 11/12/2008 4:01:25 PM

CI $13.08 -7.56%
AET $21.84 -2.10% ... holding on
HUM $32.77 -4.34%
UNH $18.86 -6.44% ...

James Brown : 11/12/2008 4:00:50 PM

If you're looking for bearish candidates you may want to look at some of the fertilizer-related stocks like: AGU, CF, MOS, MON, AG, POT, and IPI. Although some of these have moved so much today you may not want to chase them.

Jeff Bailey : 11/12/2008 4:00:02 PM

HMO.X alert! 854.94 -4.10% ... set to test 52-week intra-day low.

Keene Little : 11/12/2008 3:59:40 PM

Arghh, it's going to close right on support and leave us guessing about tomorrow. Gap down below support or immediate rally tomorrow morning? We'll certainly find out quickly enough tomorrow.

Jeff Bailey : 11/12/2008 3:57:51 PM

RLX.X still hold 10/27/08 close of 244.40.

James Brown : 11/12/2008 3:56:57 PM

AK Steel (AKS) is getting killed here down 23.9% to $7.84. The stock has broken down under round-number support and historical support at $10.00.

Jeff Bailey : 11/12/2008 3:56:50 PM

RLX.X 245.69 -5.62% ... has traded WKLY S2.

Jeff Bailey : 11/12/2008 3:56:25 PM

BARE $4.28 -9.12% ...

AVP $21.58 -9.25% ...

Jeff Bailey : 11/12/2008 3:55:18 PM

VXO prarie dogged WKLY R1 on 5-minute interval.

Jeff Bailey : 11/12/2008 3:54:44 PM

VXO.X at MNTLY Pivot

Jeff Bailey : 11/12/2008 3:54:14 PM

Volume building in the YM to the close at RED#6

Keene Little : 11/12/2008 3:53:59 PM

Oops. NDX dropping right back down to the low. If no get up and go into the close and I doubt there will be any tomorrow morning.

Jeff Bailey : 11/12/2008 3:52:27 PM

YM 8,325 ... prarie dogs RED#5

James Brown : 11/12/2008 3:52:18 PM

....fyi... GOOG under $300.00 at $295.95 (-5% today)

James Brown : 11/12/2008 3:51:28 PM

It's been a very rough day for Amazon.com (AMZN). The stock is down 9.2% to $42 and hitting new 52-week lows under its October lows. This stock is down about $16 in the last six days.

Breaking down past the October lows here is pretty negative.

James Brown : 11/12/2008 3:49:14 PM

Goldman Sachs (GS) is accelerating lower now down 11.3% to $66.10. This is a new multi-year lows. It's worth noting that volume is extremely light compared to recent sessions. Only 6.5 million shares trading versus average volume of 29.4 million and an average of 47 million shares the last couple of days.

Keene Little : 11/12/2008 3:48:41 PM

Here we go. Watch for a bigger bounce now. At least that's a strong possibility.

Jeff Bailey : 11/12/2008 3:44:44 PM

At least mine are ...

Jeff Bailey : 11/12/2008 3:44:27 PM

MM profiles now very, very bearish near-term.

Jeff Bailey : 11/12/2008 3:43:59 PM

Swing trade long stopped alert! DDM $29.60

Jeff Bailey : 11/12/2008 3:43:36 PM

YM gives up Red#6

Jeff Bailey : 11/12/2008 3:43:21 PM

DDM $29.66 bid

Jeff Bailey : 11/12/2008 3:42:13 PM

Good gravy! YM 8,300 after trade at RED #6.

Jeff Bailey : 11/12/2008 3:40:43 PM

That could change ... DDM $29.76 bid

Jeff Bailey : 11/12/2008 3:39:20 PM

Current CLOSE and OPEN/active MM profiles that I've made at this Link

Jeff Bailey : 11/12/2008 3:29:14 PM

DDM $29.89

Jeff Bailey : 11/12/2008 3:28:47 PM

VXO.X 69.86 alert!

Keene Little : 11/12/2008 3:28:21 PM

This afternoon's decline looks just choppy enough, with just enough bullish divergence at this afternoon's low, to suggest we're going to see a jam job to the upside in the final 30 minutes. At least be ready for that possibility. The flip side of the choppy pattern is very bearish and suggests a steep selloff into the close (and break below SPX 845-850 support). Getting close to finding out here.

Jeff Bailey : 11/12/2008 3:28:09 PM

VIX.X alert! 66.72

Jeff Bailey : 11/12/2008 3:19:37 PM

GLD $69.92 -2.78% ... approaches Q 19.1% retracement. This isn't going to help a "gold bulls" psychology.

Jeff Bailey : 11/12/2008 3:17:46 PM

But traders KNOW what we want to see ... and be ready when/should we see it.

Jeff Bailey : 11/12/2008 3:17:16 PM

GG-XX would be up $60.00.

I'm not here to trade "even"

Jeff Bailey : 11/12/2008 3:15:48 PM

VIX.X 66.00

Jeff Bailey : 11/12/2008 3:16:40 PM

GG-XX now $4.20 x $4.50.

On CDE, $10K account took a $55.00 loss (excluding commission schedule)

Jeff Bailey : 11/12/2008 3:12:42 PM

GG $19.76 -7.14% ...

Keene Little : 11/12/2008 3:12:16 PM

SPX is working its way down to potential support in the 845-850 area while NDX is getting closer to potential support in the 1151-1155 area. With less than an hour to go I'm wondering if we'll get a bounce off those levels and leave us wondering if it will turn into something more bullish tomorrow or not. Think about profit protection on any short plays as we near those support levels.

Jeff Bailey : 11/12/2008 3:12:02 PM

Swing trade long stopped alert! ... for Coeur D' Alene Mines (CDE) at the bid of $0.48.

Jeff Bailey : 11/12/2008 3:10:58 PM

Major Globl Equity Index with INDU-RUT still trading Link ... week-to-week maybe short-term, Quarter ; intermediate-term; YTD longer-term.

Jeff Bailey : 11/12/2008 3:01:15 PM

$NIKK 11/06 close was 8,899

Jeff Bailey : 11/12/2008 3:00:33 PM

Checking $NIKK 11/06 close. EWJ not an exact insturment for such comparison.

Jeff Bailey : 11/12/2008 2:59:06 PM

FXY 104.58 +2.52% ... its 11/06 close was $102.15.

Jeff Bailey : 11/12/2008 2:57:30 PM

Certainly looks like a trend day lower to the close at this point.

Jeff Bailey : 11/12/2008 2:56:50 PM

INDU finished yesterday at/near its 11/06/08 close. Give/take 2-points.

Jeff Bailey : 11/12/2008 2:55:15 PM

I would have thought EWJ into U.S. closes, as things as they are, would be down more in anticipation of lower trade in Japan for its Thursday's trade.

Jeff Bailey : 11/12/2008 2:53:20 PM

EWJ closed 11/06/08 at these levels.

Jeff Bailey : 11/12/2008 2:50:49 PM

Hmmm ... EJW $8.60 -1.71% ...

Jeff Bailey : 11/12/2008 2:49:39 PM

European Markets: Link ... finished Wednesday's trade lower. $FTSE -1.52% at 4,182, $DAX down 2.96% at 4,621, $CAC down 3.07% at 3,234.

Jeff Bailey : 11/12/2008 2:48:11 PM

Asian Markets: Link ... finished Wednesday's trade mostly lower. $NIKK down 1.29% at 8,695, $HSI down 0.73% at 13,939, $SSEC up 0.84% at 1,859

James Brown : 11/12/2008 2:47:07 PM

Noticing that the Defense Index (DFI) has broken down under the 1200 level leaving it up for a drop to the October support levels near 1100.

Northrop Grumman (NOC -3.2% $41.13) is hitting new six-week lows.

General Dynamic (GD -2.6% $57.72) might be a bearish candidate here. The stock looks poised to drop toward its October lows near $52.00.

Alliant Tech (ATK -2.1% $77.10) is another one that looks like it could drop to its October lows around $72.50ish.

FLIR Systems (FLIR -1.6% $28.98) has a similar pattern and might pull back to its $26 lows.

L-3 Communications (LLL -1.6% $72.46) is under performing its peers and hit new 52-week lows today.

Ratheon (RTN -2.4% 48.33) might be a bearish candidate. Look for a drop under short-term support at $48.00. The October lows are in the $43-42 zone.

Jeff Bailey : 11/12/2008 2:43:22 PM

QCharts also uses regular session h/l/cs

Jeff Bailey : 11/12/2008 2:42:56 PM

YM 8,369 ... QCharts' DAILY S2 8,361

Jeff Bailey : 11/12/2008 2:42:01 PM

VXO.X 67.99 ... DAILY R2 68.35

Jeff Bailey : 11/12/2008 2:38:16 PM

INDU perhaps the UNH of "weakest" to "strongest"

Jeff Bailey : 11/12/2008 2:37:42 PM

INDU 8,428. ... DAILY S2 8,400.

Jeff Bailey : 11/12/2008 2:37:19 PM

SPX 868.20 ... DAILY S2 just above.

Jeff Bailey : 11/12/2008 2:36:44 PM

NDX.X 1,182.66

Jeff Bailey : 11/12/2008 2:36:09 PM

RUT.X 461.77 -4.25% ... edges back above WKLY S2 as computers turned on and "caught" the decline.

Jeff Bailey : 11/12/2008 2:32:52 PM

NYSE and NASDAQ new lows about 10/22/08 equivalent.

Jeff Bailey : 11/12/2008 2:29:32 PM

CDE 0.4942 x $0.4943

Jeff Bailey : 11/12/2008 2:29:02 PM

13-week 0.14% ... did test WKLY S2 0.119%

Jeff Bailey : 11/12/2008 2:27:50 PM

FXY 125.32 +0.03% ...

Jeff Bailey : 11/12/2008 2:25:48 PM

GLD $70.53 -2.10% ... WKLY S1 here.

Jeff Bailey : 11/12/2008 2:24:28 PM

Pivot traders should have a clue.

Jeff Bailey : 11/12/2008 2:23:01 PM

Why does NDX.X, likely #2 weakest, "stop" where it does?

Jeff Bailey : 11/12/2008 2:22:05 PM

RUT.X perhaps the CI of major averages.

Jeff Bailey : 11/12/2008 2:21:25 PM

RUT.X 459.65 -4.69% ... under WKLY S2.

Jeff Bailey : 11/12/2008 2:20:24 PM

Note: major averages appeared to stage late rally yesterday, until XLF WKLY S2 from underneath.

Keene Little : 11/12/2008 2:19:48 PM

Looking at the pattern for the decline in NDX from November 4th I have some downside Fib projections for the move in the 1151-1155 area. The October 24th low is near 1149. So this area could be strong support for at least a bigger bounce (especially if we've got large sideways triangles still playing out). If NDX gets down there and support looks like it might hold I think it would be a good time to at least cinch up stops on any QQQQ November puts.

Jeff Bailey : 11/12/2008 2:19:46 PM

XLF $12.72 -4.50% ... DAILY S2 exhuasted $12.77.

WKLY S2 , yes $13.67

James Brown : 11/12/2008 2:19:08 PM

PokerTek Inc. (PTEK) is up 28.6% to $2.47 after the "Mike on America" bit on CNBC. Cool product.

Jeff Bailey : 11/12/2008 2:14:55 PM

CDE $0.5002 x $0.5043

Jeff Bailey : 11/12/2008 2:14:17 PM

"They're lined up like rats in CDE at $0.50. Likely gravitation point, but if exhausted ...

Jeff Bailey : 11/12/2008 2:13:36 PM

GG $20.50 -3.62% ... 50% "dynamic" ... simply backfilled fully this morning's gap lower.

Jeff Bailey : 11/12/2008 2:11:49 PM

Be READY on a "spike" to next risk level.

Jeff Bailey : 11/12/2008 2:11:05 PM

resistance broken, becoming support ...

Jeff Bailey : 11/12/2008 2:10:41 PM

Analysis ... sellers of premium at that level on Tuesday, appear to be "exhausted." Monitor move above 66.75 as signal they become buyer of premium, or hedger in underlying to hedge risk.

Jeff Bailey : 11/12/2008 2:09:09 PM

VIX.X 65.54 ... still "in the zone". Noting afternoon intra-day "support" coming from QR2.

Jeff Bailey : 11/12/2008 2:06:37 PM

INDU Components throw on the DDM, H/AvgHLC/Low Link

James Brown : 11/12/2008 2:02:50 PM

The DJUSRR railroad index is growing bearish. The three-day bounce followed by today's decline is a bearish continuation pattern. chart: Link

BNI appears to be out performing its peers while KSU is the stock leading the group lower.

Jeff Bailey : 11/12/2008 1:59:21 PM

C $9.86 -8.79% ... confirmed.

GM $3.13 +7.19% ... INDU breadth 1:29

Keene Little : 11/12/2008 1:59:20 PM

The pattern of the decline from November 4th is not as clean as I'd like it to be in order to provide some clues as to what it is. There remains the possibility that we're in the final phase of the leg down within the sideways triangle pattern which should find support around 845-850, to be followed by another rally leg to the top of the triangle near 980. Ready for some more whipsaw price action for another couple of weeks?

The other probability is that we've already started the leg down to new annual lows. It takes a break below 845 to let us know the latter scenario is playing out. For the new annual low I'm showing a strong decline to the 661 (Gann) level but obviously that's just a guess at this point. However, if the hedge funds are being liquidated as fast as some say (including Soros) then it's not unreasonable to think we could be due a whoosh to the downside. At least that's the risk for those who continue to stay long the market. Daily chart: Link

Jeff Bailey : 11/12/2008 1:58:17 PM

Still not seeing MBA's weekly application survey ...

James Brown : 11/12/2008 1:57:26 PM

Was listening to CNBC... said that Citigroup (C) is down 8.4% and just cracked under the $10.00 mark.

Jeff Bailey : 11/12/2008 1:54:43 PM

CI, AET, HUM and UNH 60-minute intervals as we continue to follow Weakest to Strongest analysis Link

Note that #2 weekest may be holding the group's "support."

Decide to close out the "strongest" that is far out-the-money based on current VIX.X and VXO.X observations.

James Brown : 11/12/2008 1:44:39 PM

I am a little surprised by the weakness in airline stocks. Hmmm...let me edit that. I'm not too surprised but something has changed.

In October several of these stocks were making sharp recoveries as crude oil crashed lower. Declining oil prices mean lower fuel costs for the airlines, costs that were crippling the industry several months ago and led to new bankruptcies in the sector. Yet now, as oil continues to sink to new relative lows, the airlines have rolled over and reversed sharply.

Many of these airline stocks are down huge percentage moves in the last six to seven days. My first thought is that investors are selling due to worries about the global economic slowdown. But my very next thought is didn't the market already know the slowdown was coming? The stock market is supposed to discount future events.

Here's a list of today's declines:

AMR -19.2%
ALK -5.6%
CAL -14.0%
DAL -16.2%
JBLU -8.3%
LCC -24.2%
LUV -8.7%
UAUA -23.3%

Jeff Bailey : 11/12/2008 1:40:45 PM

UHB-XW ... final note ... entered at $21.60 in underlying as VIX.X 63.38. Exited at $19.66 for break-even in option with VIX.X 64.67.

Terrible performance on so far out the money option, despite forecasted PRICE action in the stock, and higher VIX.X.

While further out lessens capital exposure, giving up PROFIT potential.

James Brown : 11/12/2008 1:31:11 PM

While I'm looking at tech stocks near support... AAPL is quickly approaching psychological support and late October historical support near $90.00 but it's worth noting the October lows were actually near $85.00.

James Brown : 11/12/2008 1:28:53 PM

Google Inc. (GOOG) continues to sink. The stock is down about $70 in the last six days and nearing potential round-number, psychological support at the $300 level.

Will it bounce from here? The trend is lower but I wouldn't chase it after a straight down, six-day drop near such a big round number. I would definitely watch for the next bounce to fail after a day or two.

Here's a chart: Link

Jeff Bailey : 11/12/2008 1:27:13 PM

GG 30-minute interval with QRTR, MNTHLY and WKLY pivot retracement Link

Jane Fox : 11/12/2008 1:23:17 PM

One has to remember of course we are in a new world now. Previous recessions were concentrated in the US whereas this one is Global which adds a whole new dynamic to the puzzle.

Jane Fox : 11/12/2008 1:20:31 PM

Just ran across some interesting data.

* Of the 13 recessions in the last 80 years the average length was 10 months.
* The longest one was the Great Depression that lasted 44 months.
* The median S&P bottom was 58% way through the recession
* The return from lowest low during the recession to when it was over was 20%
* The average return for the year following the recession was 16%

James Brown : 11/12/2008 1:19:31 PM

Gold prices continue to slip even as the rally in the U.S. dollar pauses.

Yesterday's drop in the GLD was a breakdown from its consolidation pattern. Looks like a new leg lower has begun. chart: Link

James Brown : 11/12/2008 1:13:17 PM

I want to follow up on everyone's comments on oil. I agree with Keene that the 2007 low near $42.50 would be a good place to look for a bounce in the USO. A move to $42.50 might line up with the shorter leg on my chart as we try to forecast the bearish price target of the USO's recent bear flag pattern. However, you could argue the pattern is forecasting a much deeper drop. chart: Link

Jane Fox : 11/12/2008 1:12:01 PM

Russian Stock Exchange (RTS) has once again halted trading due to US$ denominated stocks taking a hit. Over the last two days the RTS has fallen over 22% and 72% year to date, clearly the worst performing exchange globally.

Jeff Bailey : 11/12/2008 1:09:45 PM

GG Note: QS1 $20.03 did hold buyers in first 90-minute trade.

Jeff Bailey : 11/12/2008 1:08:33 PM

GG $20.95 -1.50% ...

Jeff Bailey : 11/12/2008 1:07:10 PM

Monitor AET even at possible action point.

Jeff Bailey : 11/12/2008 1:06:28 PM

Will look to "roll-out" on UNH to January ...

Jeff Bailey : 11/12/2008 1:05:49 PM

Note 60-minute interval "doji" ... think we'ere "too far" out the money near-term. Sell the premium.

Jeff Bailey : 11/12/2008 1:05:09 PM

UNH $19.66 -2.43% ...

VIX.X 64.67

Jeff Bailey : 11/12/2008 1:04:51 PM

Swing trade put exit alert! ... for the one (1) United Health UNH Dec. $17.50 Put (UHB-XW) at the bid of $1.20.

James Brown : 11/12/2008 1:03:17 PM

The latest IEA energy outlook report that came out today may be having an impact on oil. Last week when the summary of this report came out we were led to believe that the IEA was going to forecast a return to $100 a barrel for oil.

Today the news is a forecast for oil to average about $63.50 in 2009, significantly less than the $100/bbl forecast.

Jane Fox : 11/12/2008 1:01:40 PM

American Express (AXP) is the latest company to seek government help through its financial woes. The Wall Street Journal reports AXP has made a request of $3.50 billion from the Trouble Asset Relief Program (which needs to be renamed) because its business model revolves around consumers spending and spending on credit, a model that is not working right now.

Jeff Bailey : 11/12/2008 12:54:46 PM

CI $13.12 -7.34%
AET $22.03 -1.25% ... refuses to trade 0%. Just below WKLY S1.
HUM $32.84 -4.14% ... has slipped under 19.1%.
UNH $19.53 -3.12%

Jeff Bailey : 11/12/2008 12:51:42 PM

INDU 8,458 -2.71% ... DDM $30.92

Jeff Bailey : 11/12/2008 12:51:06 PM

FXY $104.49 +2.44% ... off high of $105.48, but sits on WKLY R2.

Jeff Bailey : 11/12/2008 12:48:59 PM

CDE $0.50 -9.09% ...

Keene Little : 11/12/2008 12:46:17 PM

We're finally get a little bigger bounce but so far it's looking like we're just getting a correction of the decline. SPX 885-886 remains good upside potential for the bounce but it might not even get that high.

Jeff Bailey : 11/12/2008 12:43:57 PM

GG $21.35 +0.32% ... inches green.

Jeff Bailey : 11/12/2008 12:42:40 PM

Now ... IF bullish DDM ABOVE 8,655 and now BELOW, is this BULLISH?

No, ONLY if back ABOVE.

Jeff Bailey : 11/12/2008 12:41:50 PM

"Why?" a trader would ask themselves. Why has it "stopped" there?

Jeff Bailey : 11/12/2008 12:41:04 PM

INDU and VXO.X 30-minute intervals where I continue to hope we bring it together Link

Jeff Bailey : 11/12/2008 12:29:00 PM

12:00 Internals found at this Link

Jeff Bailey : 11/12/2008 12:23:02 PM

Getting a downside alert on Singapore Fund (SFG) $7.29 -5.93% ...

Jeff Bailey : 11/12/2008 12:18:09 PM

If no more matching in 401-K's, equities need cash from somewhere.

Jeff Bailey : 11/12/2008 12:17:33 PM

5-year 2.399% ... WKLY S1 right here.

Jeff Bailey : 11/12/2008 12:14:58 PM

USO $46.40 -3.55% ... testing session low. WKLY S1 and DAILY R2 overlap $46.75 exhausted.

Jeff Bailey : 11/12/2008 12:12:55 PM

RUT.X 466.82 -3.20% ... session low here. DAILY S2 exhausted, WKLY S2 untested.

Again, I do not have RVX.X monthly/quarterly.

Jeff Bailey : 11/12/2008 12:09:23 PM

Analysis ... PREMIUM sellers in VXO.X at known observation/level.

Jeff Bailey : 11/12/2008 12:08:42 PM

VXO.X 68.64

Jeff Bailey : 11/12/2008 12:08:28 PM

OEX 520.98 -2.84% ... back to test WKLY S1 from UNDERNEATH.

Jeff Bailey : 11/12/2008 12:04:49 PM

GG $20.91 -1.73% ... makes a comeback.

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

The USO daily chart shows that the projection for two equal legs down from July is at 42.94 and the previous low in January 2007 was 42.56. If it drops slightly lower to the trend line along the lows of the decline it could drop to about 39 before finding support. And of course if a lot of traders start front running support it might not even reach 43. Notice the bullish divergence at the new lows--selling momentum is definitely waning. Link

Keene Little : 11/12/2008 11:51:30 AM

Two equal legs down from July for USO is at 42.94 so that's our downside target to watch right now (currently trading 46.64).

Keene Little : 11/12/2008 11:46:35 AM

Zooming in closer on oil's decline from July, if it's to be counted as a correction then it should be a 3-wave move down (or some derivation of that, such as a double zigzag--two 3-wave moves connected by an x-wave). It's possible to consider the decline as a 3-wave move and equality between the two legs down is at 53.69, as shown on the daily chart: Link

The uptrend line from 1998 is currently near 51.25 so that's the downside potential by that support level. At this point I'd say there's a good chance oil will decline to the $51-54 area and find support for some kind of bounce, perhaps a big one. So oil traders get ready to don your bull horns (but wait). USO makes for a relatively low risk way to trade it.

Jeff Bailey : 11/12/2008 11:44:14 AM

The "read" on volatility is this ...

KNOW that computers will SELL premium at a level. However, only when the SELLING is exhausted, can PREMIUM/volatility move HIGHER.

What should then happen to PRICE of the underlying?

Jeff Bailey : 11/12/2008 11:42:16 AM

Over the past few days, weeks, you will not the "difficulty" in where we might anchor a retracement, try and tie things together.

The PIVOT levels do it for a trader.

Jeff Bailey : 11/12/2008 11:40:43 AM

The QUARTERLY give us a "longer-term" observation of where the activity has been RELATIVE to a prior quarter.

The MONTHLY give us a more "intermediate-term" observation of where the activity has been RELATIVE to a prior month.

The WEEKLY give us a more "short-term" observation of where the activity has been RELATIVE to last week.

Only when a trader of a particular INDEX, that understands its COMPOSITION, can then begin to comprehend, understand RISK levels.

SELLING OF PREMIUMS can be dangerous unless HEDGED in some manner. Level by level, minute by minute, day by day, week by week, month by month ...

Jeff Bailey : 11/12/2008 11:36:55 AM

VIX and VXO 30-minute interval montage with QCharts' WKLY Pivot levels turned on Link

INSTITUTIONS SELL premiums. The PIVOT levels help to identify where the INSTITUTIONAL computers may be sellers of the premiums.

Keene Little : 11/12/2008 11:28:18 AM

The move down from yesterday afternoon's high can be satisfactorily counted as a completed 5-wave move. That would suggest we're ready for a bigger bounce back up to correct that leg down. A 38%-50% retracement would be at SPX 885.85-891.82.

This morning's first bounce high to 886.78 is a typical retracement point in the EW pattern (previous 4th of the 3rd wave). But if the little bounce we're getting turns back down for new lows then we'll obviously be extending lower. If you're short just stay aware that we could be nearing the point where we'll get a bigger bounce.

Jeff Bailey : 11/12/2008 11:26:03 AM

We're more "overweight" to the bearish side the HMO's, so this would be where I will be looking to SELL OUT THE MONEY on just one position.

Jeff Bailey : 11/12/2008 11:24:39 AM

Have several current months OUT-THE-MONEY in our portfolio watch list. Ability to SELL PREMIUM out the money.

Jeff Bailey : 11/12/2008 11:23:47 AM

GG-WW $0.45 x $0.50

Jeff Bailey : 11/12/2008 11:23:21 AM

UHB-WS $0.55 x $0.65

Jeff Bailey : 11/12/2008 11:22:55 AM

HUM-WF $0.65 x $0.80

Jeff Bailey : 11/12/2008 11:22:24 AM

Uh huh ... AVP-WD $0.35 x $0.45 ... I mention so often $0.40 and $0.90.

Keene Little : 11/12/2008 11:21:46 AM

If you've got an oil tank for your winter heating oil I'd say now is as good a time as any to fill it up.

Jeff Bailey : 11/12/2008 11:21:14 AM

Tense moments for option traders here ...

Jeff Bailey : 11/12/2008 11:18:54 AM

VXO.X 69.31 +11.62% ... has traded MONTHLY Pivot/WKLY R1 overlap.

Keene Little : 11/12/2008 11:18:08 AM

Oil is nearing potential support around $55. The monthly chart, using the log price scale, shows a sharp pullback to the bottom of a parallel up-channel from the end of 1998 (the years are all scrunched at the bottom so they're hard to read). I show a new rally leg into 2011 to complete a 5-wave move up from 1998: Link

When I first looked at the wave count I thought there must be something wrong because I can't see the fundamental reason for oil to rally to a new high if the global economy is in the toilet. But what if the US dollar tanks after the government monetizes the huge debt that's piling up? A crashing dollar (not that I'm expecting that to happen) would certainly help boost the price of oil.

There is a way to count it such that the 2008 high is a long term high and we'll only see a bounce before breaking lower again. But that can be figured out later. For now I'd say oil is very close to strong support and we should see a bigger bounce at a minimum soon (within the next month or two).

Jeff Bailey : 11/12/2008 11:17:54 AM

VIX.X 65.69 +6.91% ... Below WKLY R1.

Jeff Bailey : 11/12/2008 11:17:24 AM

VIX.X 66.14 +7.64% ... ABOVE WKLY R1.

Jeff Bailey : 11/12/2008 11:09:17 AM

Noting: At last night's close, OPEN/active bottom line was $-674.00.

Analysis ... current market condition, account weighted a little too BULLISH.

Jeff Bailey : 11/12/2008 11:06:05 AM

Noting ... AVP now $22.28 and AVP-XX $2.10 x $2.20.

VIX.X 65.84 currently.

Jeff Bailey : 11/12/2008 11:03:31 AM

Current CLOSED and OPEN/active MM profiles that I've made at this Link

Jeff Bailey : 11/12/2008 10:55:48 AM

INDU -3.05%
SPX -2.94%
OEX -2.86%
RUT.X -2.72%

Jeff Bailey : 11/12/2008 10:55:07 AM

EUR/JPY 119.45 -2.3% ...

Jeff Bailey : 11/12/2008 10:51:07 AM

INDU DAILY S2 tested at 8,400. If broken, near-term upward trend from 10/10/08 low to 10/27/08 low extended would be ~8,319 currently.

Jeff Bailey : 11/12/2008 10:48:03 AM

INDU 8,417.66 -3.17%
DIA $84.39 -2.72%

Jeff Bailey : 11/12/2008 10:47:20 AM

FXY alert! $104.60 +2.54% ... takes out WKLY R2 (104.28)

Jeff Bailey : 11/12/2008 10:46:22 AM

UNG $27.88 -3.02%
CDE $0.51 -7.27%

Jeff Bailey : 11/12/2008 10:45:01 AM

HUM $33.17 -3.18%
AVP $22.41 -5.76%
UNH $19.27 -4.41%
GG $19.84 -6.76%

Jeff Bailey : 11/12/2008 10:43:38 AM

DDM $30.48 ... not down 10% per 10:38:29. QCharts' 5.1 incorrect.

From $32.10 entry, DDM -5.05%

Jeff Bailey : 11/12/2008 10:40:21 AM

EIA Report: Delayed until tomorrow due to Veterans' Day

Jeff Bailey : 11/12/2008 10:39:05 AM

INDU 8,429.21 -3.04% ...

Jeff Bailey : 11/12/2008 10:38:49 AM

DIA $84.47 -2.62% ...

Jeff Bailey : 11/12/2008 10:38:29 AM

DDM $30.67 -10.53% ...

Jeff Bailey : 11/12/2008 10:38:09 AM

FXY alert! 103.89 +1.85% ... (see earlier post/chart).

Jane Fox : 11/12/2008 10:35:42 AM

WASHINGTON (MarketWatch) -- The White House has shelved plans to purchase troubled mortgage assets from banks and other financial institutions, Treasury Secretary Henry Paulson said Wednesday. That program was once the cornerstone of the $700 billion rescue plan for financial markets passed by Congress. But almost as soon as Treasury received the money, it decided that giving capital to banks in return for preferred stock is a better use of the funds. Some of the money saved from not buying mortgage assets will now be used to shore-up the market for credit card receivables, auto loans and student loans, Paulson said. This market has ground to a halt, he added. Treasury would also consider giving some capital to non-bank financial institutions. Proposals to modify mortgages remain on the table, Paulson said. The cost of these programs will be substantial. Paulson's remarks came in a lengthy update of the government rescue plan. He defended the steps taken to date, and there are signs of improvements in markets. But in the next breath, he said the financial system remains fragile and the focus must be recovery and repair.

Jeff Bailey : 11/12/2008 10:34:55 AM

FXE $125.15 -0.10% ...

Keene Little : 11/12/2008 10:31:13 AM

I forgot to move the label for end of the d-wave of the triangle on the SPX 60-min chart so to avoid any confusion for those who are following the count (it's like following the bouncing ball), this is a better chart: Link

Jeff Bailey : 11/12/2008 10:31:00 AM

I've alway told clients where their company's match 3% to 50% that it was the best deal going. A great benefit offered freely by their employer for their retirement.

Those days may come to and end. At least for four years.

Jeff Bailey : 11/12/2008 10:28:40 AM

Jane ... OK. However, traders and investors should take note that during debates, President-Elect Obama did say health insurance was a right of every American and he would make sure employers insured their employees.

If companies are cutting back on 401-K matching, this may be a way to transfer one already offered benefit, to a mandated benefit.

Keene Little : 11/12/2008 10:25:55 AM

Cleaning up the SPX 60-min chart and showing the two higher-probability wave counts as I currently see them, the next support level should be the uptrend line along the lows from October 10th (the bottom of the original large sideways triangle). Assuming SPX gets down there, if it breaks then we should see the market decline into next week. Otherwise, as shown in pink, there is the possibility we'll see a rally into next week before tipping back over for new lows. Link

Jeff Bailey : 11/12/2008 10:25:27 AM

10:00 Internals found at this Link

Jane Fox : 11/12/2008 10:20:00 AM

The FED is urging banks and all financial institutions to start lending to creditworthy borrowers and for them to start fulfilling their role in the economy, as intermediaries of credit to business. Fed data is showing even the most credit worthy borrowers are having a hard time getting credit

Jeff Bailey : 11/12/2008 10:17:06 AM

FXY Daily interval chart from prior comments. Recently added PINK for recent range Link

Recent move back ABOVE 100.835 has seen US equities pressured again.

Jane Fox : 11/12/2008 10:15:54 AM

Jeff the article did mention other retirement benefits may be cut but did not mentions health care in particular.

Jane Fox : 11/12/2008 10:13:04 AM

AD volume continues its downward spiral so that is keeping me from going long but the VIX is hovering towards the lower part of its daily range so that is keeping me from going short. This will work out later and we will get a better idea as to which side is going to win but for now we just don't know.

Jeff Bailey : 11/12/2008 10:08:56 AM

FXY $103.40 +1.37% ... gapped and trades 03/17/08 relative high.

Jeff Bailey : 11/12/2008 10:02:19 AM

JA Solar (JASO) $2.80 -15.86% ... #9 most active. New 52-weeker at the NASDAQ. Had a decent run into Election Day, but that was about it.

Keene Little : 11/12/2008 9:58:54 AM

The SPX 882-885 area continues to be support for now but should break convincingly. If it were to rally back up from here I wouldn't have a clue what price pattern is playing out. The pattern is bearish until SPX gets back above yesterday's late day bounce (just shy of 903).

Jeff Bailey : 11/12/2008 9:57:46 AM

Jane! ... per your 09:49:41 ... any mention of potential healthcare insurance mandates for those decisions?

Jane Fox : 11/12/2008 9:49:41 AM

I am reading where more and more companies are stopping or at least decreasing their 401(k) matching because of the difficult business environment.

Jane Fox : 11/12/2008 9:49:33 AM

The VIX is falling to new daily lows but the AD line in falling as well which is the formula for chop. I need both of these in sync before I will put on a trade.

Jane Fox : 11/12/2008 9:43:26 AM

By the way the symbol for the new Global Dow index is GDOW.

Jane Fox : 11/12/2008 9:42:32 AM

CRude hit a low of 57.72/bl overnight.

Keene Little : 11/12/2008 9:41:23 AM

If SPX breaks and stays below 882-883, the Gann level, the next potential support area is 845-850.

Jane Fox : 11/12/2008 9:39:30 AM

AD line, the pulse of the patient, is a very unhealthy -1933. Bring in the paddles.

Jane Fox : 11/12/2008 9:36:25 AM

VIX closed at 61.44 yesterday and opened this morning at 64.53.

Jane Fox : 11/12/2008 9:35:42 AM

Treasury Secretary Paulson is scheduled to speak at 10:30ET today and FOMC member Kohn at 11:00.

Jane Fox : 11/12/2008 9:34:22 AM

NEW YORK (MarketWatch) -- Russia's central bank raised several key interest rates by 100 basis points late Tuesday, bringing the key overnight repo rate to 8% and the refinancing rate to 12% in a move aimed at reducing inflation and stemming capital flight. The rate hikes came after the central bank allowed the Russian currency, the ruble, to weaken 1% against its dual currency basket on Tuesday, sparking fears of ruble devaluation. "Higher repo rates will probably not do much to stem capital flight; all eyes will rather be focused on if/when the CBR [central bank of Russia] allows for another widening of the [ruble] trading band," said Lars Rasmussen, an analyst at Danske Bank. More ruble weakness in the short term could be "very toxic" for Russian markets, Rasmussen said.

Jane Fox : 11/12/2008 9:30:21 AM

Here is a list of the 150 stocks in the Global Dow Index. Link

Jane Fox : 11/12/2008 9:29:23 AM

A new index was launched on Tuesday, a Dow Jones Global Dow. 150 stocks from around the globe have been picked by senior editors of the Wall Street Journal and DOW Jones Newswire senior editors, weighted equally rather than by price. All the DOW Jones stocks are included along with some from the DJ Transport and Utility indexes.

The concept of the index is to represent leading companies from around the world in all industries.

For more information you can go to www.globaldow.com

Keene Little : 11/12/2008 9:22:31 AM

Equity futures are down this morning and it looks like SPX will gap down below yesterday's low. This confirms the bearish wave count and means short continues to be the correct side of the market until proven otherwise. As I had mentioned late yesterday the wave count means we could see the October 10th low (845) broken quickly. But continue to stay aware that we're in a whippy market and into the final leg down before we get a larger upward correction into next year. It can be the least reliable move of the impulsive 5-wave move. Manage your risk appropriately.

Jane Fox : 11/12/2008 9:22:05 AM

First it was Circuit City going into bankruptcy now it is Best Buy. Best Buy lowered it fiscal 2009 guidance putting the blame at the feet of the slow-down of consumer spending. Company officials say the rapid changes in consumer behavior since mid-September have created the most difficult business climate they have ever seen.

The full year outlook was slashed to $2.30 from a range of $3.25 to $3.40/share and same-store sales expectations have been cut by 5% to 15%

Shares are down over 12% in overnight trading.

Jane Fox : 11/12/2008 9:14:51 AM

DOW futures (YM) are down -147, S&P futures (ES) down -16.26, NDX futures (NQ) down -22 and Russell 2000 (TF) on a 20 minute delay are down -2.40.

All futures have broken their respective previous day lows. Link

Keene Little : 11/11/2008 11:33:18 PM

Wednesday's pivot table: Link

I received a couple of emails after the close asking me to explain how I could have two entirely different opinions about which way the market was going to head Wednesday morning. In my rush to get postings out I didn't make it clear enough that I was showing setups for either direction but did not know which way it was going to break. So my last post of the day was to suggest waiting for the market to tell us in the morning. The market is a master of hiding its intentions and Tuesday's finish was a good example.

The late afternoon pullback found support at the broken downtrend line from Monday's high and then bounced back up some into the close. The pullback was left a 3-wave correction that found support at the broken trend line and that's why I said it's a setup for a continuation higher on Wednesday. A move back above the afternoon high near 917 would be bullish confirmation. SPX 10-min chart: Link

As shown on the chart, in dark red, a move below Tuesday's low near 885 would confirm the bearish wave count, shown better on the 60-min chart below. I added that the price pattern for the move down from Tuesday, November 4th, is potentially very bearish as it could be setting up a strong decline in a 3rd of a 3rd wave down. As I look at the 60-min chart, labeled in dark red, this looks like a real possibility. So a break below 885 would be bearish. SPX 60-min chart: Link

But if the bulls can get some follow through to the upside, following the strong bounce off Tuesday's low, and push it back above 917 we should see one of the two bullish possibilities shown on the 60-min chart. Upside targets would be 941 (shown on the 10-min chart) and then 960-970. If we get a move as depicted in pink we should see SPX work its way back up to the top of the sideways triangle which will be near 990 at the end of this week. The updated daily chart keeps it all in perspective: Link

If we're still stuck in the sideways 4th wave triangle then we're still stuck in price action that will be full of head fakes and whipsaws. I'll continue to show the key levels to help guide as to which scenario could be playing out. But the bottom line is we're in a whippy price correction and you must trade accordingly (if at all).

OI Technical Staff : 11/11/2008 10:00:04 PM

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