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Jeff Bailey : 11/19/2008 9:02:00 PM

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

Notes: * Dropped coverage of positions taken on, or after the 30th of the month due to contractual obligations. As such, positions closed.

Jeff Bailey : 11/19/2008 6:20:11 PM

Dow Component November "Max Pain" at the close Link

From 11:28:24 MM and 11:00 AM benchmark Link

Analysis: Naked puts avoiding risk of assignment.

Jeff Bailey : 11/19/2008 5:52:30 PM

Can't help but notice EEV extended session offer of $111.90.

Jeff Bailey : 11/19/2008 4:52:49 PM

Today a/d line at the big board 158:2945 at the close. That rivals the 53:2,842 from 09/29/08.

Jeff Bailey : 11/19/2008 4:38:59 PM

Triple Correlation alert! ... YM 7,832

DAILY S1 (for Thursday), WKLY S1, MNTHLY S1.

James Brown : 11/19/2008 4:22:16 PM

The average bear market is about 18.5 months in duration. The current bear market is only 13 months old suggesting we still have six months to go. History also shows that the average bear market decline is about 37% and this one is currently standing at 48%. Will this bear market be shorter because it's been so violent already? Or will it just be an exceptionally brutal bear market? 18.5 months is only the average. It could last longer.

Keene Little : 11/19/2008 4:14:50 PM

Two equal legs down from this morning's high is at SPX 800.13 so a quick jab lower tomorrow would create a throw-under below the trend line along the lows since October 16th (it closed on the line). But the new low is not necessary--it could rally immediately tomorrow (and is often seen after a capitulation kind of move, as today seems).

James Brown : 11/19/2008 4:07:33 PM

Insurance stock Chubb (CB) is breaking down under support at the $45.00 level. Note: Volume was only 16% of the average trading volume.

James Brown : 11/19/2008 4:02:57 PM

It's been said before but don't forget that the January 2007 low on the USO is $42.50-42.70 zone.

Jeff Bailey : 11/19/2008 4:01:17 PM

USO $43.36 -3.14% ...

Jeff Bailey : 11/19/2008 4:01:00 PM

FXY 104.32 +1.17% ...

Jeff Bailey : 11/19/2008 4:00:47 PM

YM 7,987 ... set to trade DAILY S2 (7,925) ... how she held on as she did ...

James Brown : 11/19/2008 3:59:49 PM

GOOG now testing last week's lows at $280.00. Volume today is only 30% of normal levels.

Jeff Bailey : 11/19/2008 3:59:24 PM

PNC $49.88 -10.11% ...

NCC $1.81 -13.80% ...

James Brown : 11/19/2008 3:57:15 PM

We are setting new five-year lows for Russell 2000 small cap index, S&P 500 index, and the NASDAQ Composite,

James Brown : 11/19/2008 3:53:42 PM

A lot of our OI put plays are within $1.00 of our targets. Readers may want to start scaling out of these positions.

Keene Little : 11/19/2008 3:52:58 PM

Thinking we could be getting a bit of capitulation into the close and with SPX hitting trend lines and down into the Fib target zone now, along with the bullish divergences, I like the setup for a reversal tomorrow. It's obviously a bit risky stepping in front of this southbound train so I'd only play the long side with call options. And I'd certainly have stops lowered tight on any short plays.

James Brown : 11/19/2008 3:51:40 PM

Exit alert! OI put play Northern Trust (NTRS) is down 9.7% to $39.33. Our target was $40.00.

James Brown : 11/19/2008 3:50:57 PM

OI put play L-3 Comm. (LLL) is down 5.5% at $65.43 and nearing our first target at $65.25. Readers may want to start taking some profits here.

Jeff Bailey : 11/19/2008 3:50:02 PM

YM short cover/target alert! 8,010

Jeff Bailey : 11/19/2008 3:49:05 PM

YM short lower stop alert! to 8,050.

YM 8,038.

James Brown : 11/19/2008 3:48:11 PM

11-year low for General Electric (GE) with its drop under $15.00 today. The stock is nearing last week's intraday lows near $14.58.

Jeff Bailey : 11/19/2008 3:47:09 PM

YM short stop goes 8,110. Target 8,010

Jeff Bailey : 11/19/2008 3:45:59 PM

YM short alert! here at 8,083

James Brown : 11/19/2008 3:45:47 PM

McDonalds (MCD), which has been showing some relative strength versus the S&P 500, is producing yet another failed rally under its 50-dma and 200-dma today.

Jeff Bailey : 11/19/2008 3:44:38 PM

Buyer refuse to step away ....

Jeff Bailey : 11/19/2008 3:44:14 PM

YM short stop alert! 8,010

Jeff Bailey : 11/19/2008 3:43:18 PM

YM short ... stop goes 8,110. Target 8,010

James Brown : 11/19/2008 3:43:18 PM

Trading Idea: Laboratory Corp. (LH) might be a bearish candidate here. The stock has produced both a failed rally at its 50-dma while also producing a bearish engulfing candlestick pattern. The $65 level was previous support, which is now acting as resistance. Chart: Link

Jeff Bailey : 11/19/2008 3:42:29 PM

YM short alert! here at 8,090

Jeff Bailey : 11/19/2008 3:40:59 PM

YM 8,095 ... DAILY 19.1%

James Brown : 11/19/2008 3:38:20 PM

It's been a very rough quarter for Citigroup (C). chart: Link

Keene Little : 11/19/2008 3:35:41 PM

Coinciding with the high side of the Fib target zone for SPX (around the 814 level) is another trend line of interest--the bottom of a parallel down-channel which is essentially the line that SPX has been following down since Monday's low. It's currently near 814 so it bears watching to see if support kicks in. The trend line along the lows from October 16th sits a little lower near 808. Bullish divergences continue. 60-min chart: Link

James Brown : 11/19/2008 3:34:47 PM

Ouch! Citigroup (C) is getting crushed today. The stock is off 20.7% to $6.61.

James Brown : 11/19/2008 3:32:43 PM

Random S&P index facts:

S&P 500 index
324 of the 500 are under $30.00
225 of the 500 are under $20.00
99 of the 500 are under $10.00

S&P 400 mid cap index
324 of the 400 are under $30.00
228 of the 400 are under $20.00
93 of the 400 are under $10.00

S&P 600 small cap index
533 of the 600 are under $30.00
437 of the 600 are under $20.00
246 of the 600 are under $10.00

James Brown : 11/19/2008 3:26:15 PM

Trading Idea: I think there is definitely a trade here in Chipotle Mexican Grill (CMG). The question is what kind of trade? The stock is stuck in a bearish channel and is now testing (yet again) its very long-term support at the $40.00 level. These are levels of support dating back to its IPO in 2006. The stock's all-time low is $39.51.

If you think the market might bounce then we could pick some sort of bullish strategy on CMG. At this point I would stick with the trend but use a trigger under $40.00 as an entry point for some sort of bearish play. With such a clear "line in the sand" at the $40.00 mark it would be very tempting to try direction-neutral strategy like a straddle or a strangle. The problem with these neutral plays is the VIX. With the VIX this high we would have to buy not just one overpriced option but two overpriced options. I think traders would be better off selling volatility at this point. Chart of CMG: Link

Jeff Bailey : 11/19/2008 3:24:02 PM

YM 8,135 ... back at trend

Keene Little : 11/19/2008 3:24:18 PM

Banks are on the receiving end of the stick today. C continues its downward march towards $5, currently trading 6.60 and down 1.75 from yesterday's close (-20%). It's making wonder if the next shoe to drop will be a bailout of C.

Keene Little : 11/19/2008 3:17:36 PM

If we get another end-of-day rally I'm not sure it can be trusted anymore than the others we've seen in the past few days. At the moment it's looking like we're just consolidating today's decline which will be followed by another leg down. Then I'd feel better about calling a bottom (again).

James Brown : 11/19/2008 3:14:40 PM

Olympic Steel (ZEUS) is off 10% and breaking down to new multi-year lows under recent support near the $16.00 level. The P&F chart is forecasting an $11.50 target. Volume today has been abysmally low in ZEUS at just 6% of the average trading volume. Looks like a serious buyer's strike.

Keene Little : 11/19/2008 3:14:14 PM

It remains a choppy mess of a price pattern and I don't think we've seen the bottom of it yet.

James Brown : 11/19/2008 2:55:42 PM

I was trying to find a possible bullish bounce play in the defense stocks but I didn't see any. The DFI index component list appears to be out of date as some of these stocks are no longer trading. DFI defense index components: ATK, BA, DRS, EASI, EDO, FLIR, GD, LLL, LMT, NNS, NOC, RTN, SSSS, TTN, UIC. Webpage: Link

James Brown : 11/19/2008 2:51:43 PM

The DFI defense index is quickly nearing support near the 1100 level. Might be time to watch for a bounce.

Jeff Bailey : 11/19/2008 2:51:25 PM

VIX 72.22

James Brown : 11/19/2008 2:50:42 PM

I thought this was an interesting chart of the 30-yr bond yield. Is it going to bounce again? If you go back and look stocks tended to follow the bounce higher. Chart: Link

Jeff Bailey : 11/19/2008 2:50:17 PM

Swing trade put exit alert! ... for the one (1) Aetna AET Jan. $22.50 Put (AET-MX) at the bid of $3.20.

AET $22.00 -5.53%

Jeff Bailey : 11/19/2008 2:45:13 PM

VIX.X 73.41

Jeff Bailey : 11/19/2008 2:44:57 PM

Swing trade put exit alert! ... for the one (1) Avon Products AVP Dec $22.50 Puts (AVP-XX) at the bid of $2.70.

AVP $21.03 -4.88% ...

Jeff Bailey : 11/19/2008 2:43:49 PM

YM short stop alert! 8,170.

Jeff Bailey : 11/19/2008 2:39:39 PM

YM short lower stop alert! to 8,170.

YM 8,135 ... testing trend.

Jeff Bailey : 11/19/2008 2:38:24 PM

YM short lower stop alert! to even.

YM 8,143

Keene Little : 11/19/2008 2:33:34 PM

The decline from today's high would have two equal legs down at SPX 802, when measuring the 1st leg down to the low near 12:30 PM and then the 2nd leg down from the high near 1:00 PM. The 2nd leg would achieve 62% of the 1st leg at 816 so that gives us a downside target zone a little larger than the 804-815 zone I've been eyeing.

The trend line that SPX has been walking down (shown on the 30-min chart at 1:06 PM) is currently near 813 and as mentioned earlier, it will be near 810 by the end of the day. The way it's starting to chop its way lower, with the possibly that it will form a descending wedge from the high near 1:00 PM, we might see the high side of the target zone (814-816) be the extent of the move down. Just some thoughts as I watch this decline, along with the bullish divergences showing up on the charts at multiple time frames. We're close. Another final-hour rally would not surprise me (which would greatly help my shriveling lottery play, which started off the day looking like a grape and now looks like it's been in the sun a few days).

James Brown : 11/19/2008 2:33:18 PM

The S&P Insurance index (IUX) is breaking down to new lows... Link

James Brown : 11/19/2008 2:28:34 PM

The DJUSRR Railroad index is crashing today. The index is off 6.7% and breaking down under its October lows. Shares of Burlington Northern (BNI) has finally broken what had been very strong support in the $75-74 zone. Shares dipped to $72.66 this morning. BNI is trying to recover but the bounce is now struggling to break back above the $75.00 mark. Union Pacific (UNP), which had been out performing some of its railroad peers, is really showing a lot of weakness today. UNP is off 8.1% and traded just under its October lows this morning.

Jeff Bailey : 11/19/2008 2:25:49 PM

YM short ... stop goes 8,238. Target is 7,930

James Brown : 11/19/2008 2:24:57 PM

A couple of more gambling stocks.... IGT is down 8.9% to $9.14 hitting new six-year lows. BYD is down 14% to $3.34 hitting 2001 lows.

James Brown : 11/19/2008 2:23:50 PM

Casino stocks are getting crushed today. The DJUSCA gambling index is down 8.6% and near its October lows. LVS continues to be the big drag with the stock constantly seeing double-digit percentage losses. LVS -17% to $5.16 today. WYNN also down 7.8% as it continues its breakdown under $40.00.

Jeff Bailey : 11/19/2008 2:22:58 PM

YM short alert! 8,190

Jane Fox : 11/19/2008 2:12:42 PM

WASHINGTON (MarketWatch) - Federal Reserve policymakers now expect the U.S. economy to contract for as much as a year, with the risk that the slowdown could persist for even longer, according to edited minutes of a closed-door meeting of the Federal Open Market Committee on Oct. 28 and 29. The minutes were released Wednesday. The Fed governors and Fed bank presidents "generally expected the economy to contract moderately in the second half of 2008 and the first half of 2009, and agreed that the downside risks to growth had increased," the minutes said. Without using the word, the Fed is now forecasting a recession lasting a year or so.

Jeff Bailey : 11/19/2008 2:12:01 PM

Swing trade long exit alert! ... for the 1/8 position in Tyson Foods (TSN) at the bid of $4.96.

Jane Fox : 11/19/2008 2:09:43 PM

THE VIX has ranged from a low of 67.34 to a high of 73.06 which is where it is as I type. Link

James Brown : 11/19/2008 2:02:39 PM

The BKX banking index is hitting new all-time lows today at 42.61. Rival banking index, the BIX, is quickly approaching its July lows. That might be a good spot to look for an oversold bounce in financials. The XBD broker-dealer index is down 8.1% and sinking to levels not seen since January 1999. Leading the XBD lower appears to be Goldman Sachs (GS) is off another 5.8% and also hitting 1999 lows under $60.00.

James Brown : 11/19/2008 1:57:30 PM

The CBOE Internet Index (INX) just tagged new five-year lows today. One of the biggest components is Akamai (AKAM), which is off 8.9% and hitting new lows under $11.00. Meanwhile AMZN is down 5% and flirting with yesterday's lows near $36.00. GOOG is off 3.8% and nearing its November lows around $280.

List of INX components: Link

Jane Fox : 11/19/2008 1:36:56 PM

MSFT is saying they are not interested in YHOO even though CEO Yang is out of the picture but they have left the door open to the possibility of a narrower deal that could tap into YHOO's online search business.

Keene Little : 11/19/2008 1:40:29 PM

Bonds may be ready for a pullback. One Fibonacci to keep in mind as you look for possible turns is the 127% extension of a previous move. Using the 30-year bond (ZB is the e-mini) as an example, looking at the decline from October 24 to the low on November 2nd (Sunday night), the 127% extension above the October 24th high is at 121.89. That matches the top of a parallel up-channel for price action since the November 2nd low, as shown on this 240-min all-hours chart: Link

Whether it will be just a pullback before heading higher again, or the start of something bigger to the downside (perhaps coinciding with a rally in the stock market), can't be known yet but this chart says be aware of a potential reversal in the making. One other upside target is the 138% extension at 122.69 which crosses the top of the up-channel on Friday, November 21st.

Just as the bottom in bonds presaged the top in stocks by 2 days (November 2nd bottom in bonds vs. November 4th high in stocks) I'm watching bonds as a potential indicator for when stocks might also be ready to reverse. So far no reversal for either but the setup is there.

Jeff Bailey : 11/19/2008 1:32:51 PM

PNC $50.91 -8.15% ...

NCC $1.90 -9.52% ...

Jane Fox : 11/19/2008 1:33:21 PM

Internals are just getting worse and worse as the day progresses. THis is no time to be long. Link

Jane Fox : 11/19/2008 1:31:01 PM

Gold is now up a whopping 2.30 while just a few hours ago it was up 23.00.

Keene Little : 11/19/2008 1:06:42 PM

SPX has walked down a downtrend line from November 4th that it broke above last Thursday the 13th on that monster short squeeze. The pattern has me thinking we'll get a bounce followed by another new low this afternoon to once again test the downtrend line by the end of the day today--right near 810 and inside the 804-815 target zone. That would be the next great setup to try a long play. SPX 30-min chart: Link

Jane Fox : 11/19/2008 12:46:38 PM

SAN FRANCISCO (MarketWatch) -- Fitch Ratings on Wednesday placed Chrysler LLC's issuer default rating of CCC on Rating Watch Negative, noting that without federal assistance in the short term, it would review the rating for a potential downgrade to CC. A rating of CC indicates that a default is probable, it said. "The impact of a steep cyclical decline in industry sales, plus the impact of the credit crisis on the availability of retail financing, will result in further revenue declines over the near term, offsetting the company's material improvement in its cost structure," said the ratings agency. Fitch added that although federal aid to Chrysler is "probable," the amount, timing, structure and term remain uncertain.

Jane Fox : 11/19/2008 12:43:37 PM

Internals are all in sync and bearish. Link

Keene Little : 11/19/2008 12:43:02 PM

With the VIX at 72 and the ISEE below 80 when this [thing] reverses it could be violent.

John, me and my little lottery play hope you're right.

Keene Little : 11/19/2008 12:35:27 PM

Big move in bonds today and the buying there has not been good for stocks with the apparent rotation out of riskier stocks into the safety of Treasuries.

Keene Little : 11/19/2008 12:27:27 PM

While we have choppy price action to the downside (indicating an ending pattern, such as a descending wedge) VIX is showing us a potential bearish pattern (bullish for stocks) and therefore is in agreement that we should be close to some kind of tradable bottom (but will it be before Friday?). This VIX 120-min chart shows a bearish rising wedge pattern and a breakdown from it (below 65) would be confirmation of a likely rally that's already in progress at that point): Link

Jeff Bailey : 11/19/2008 12:22:07 PM

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

Keene Little : 11/19/2008 12:20:34 PM

With the little consolidation near the low it's looking like a small 4th wave correction. Another drop lower would create a 5-wave move down. That would mean a 5-wave move up from yesterday's low followed by a 5-wave move down and one of them is wrong. Yesterday's rally may not have been truly reflective of traders' mood and reactions (which is what EW measures) but instead more related to the S&P rebalancing.

This is the hazard of using EW on short-term charts like the 5-min and is a good reminder that it can be useful for identify key levels and trends but in not infallible. It also means that at the moment I have to step back and stay flat (other than my lottery play) and observe this a little longer to see what might be playing out. Keeping the slightly larger picture in mind, the SPX downside Fib target zone of 804-815 remains very much alive.

Jeff Bailey : 11/19/2008 12:03:09 PM

Petroleo Brasileiro (PBR) $18.98 -7.18% ... that's a new 52-weeker.

Keene Little : 11/19/2008 12:02:21 PM

Could 5 min chart be ABC correction?

Good observation Greg. Especially on NDX this morning's pullback is a clear 3-wave move so far and hasn't quite achieved equality in the two legs down. After the 5-wave move up from yesterday to this morning's high, it still fits that this morning's sharp pullback is just a correction and we'll head higher again. That would obviously be negated with a new low below yesterday's.

Keene Little : 11/19/2008 11:58:41 AM

One possibility that we're seeing this morning is a reversal of yesterday's last-hour rally. Price action is obviously telling us that. By removing BUD ($5B market cap) from the S&P 500 it required fund managers to buy all the other stocks in the index thus driving up the index. This kind of action is often reversed the following day as the rebalancing finishes and that certainly looks to be the case today. The question now is whether yesterday's low will hold or whether there's a bit more "normal" selling to be done.

Keene Little : 11/19/2008 11:41:35 AM

The way the market has been chopping its way lower this week leaves little doubt in my mind that we're hammering out a bottom. How big of a bottom and exactly where is the bottom are the only questions. But it's not far below (if we're to get a new one) and it's going to be soon. I don't like the short side because of that and because I think there is the possibility of a short-covering flare-up I'm trying the lottery long play. I'll either lose it all or else it should be lookng pretty by Friday. At the moment it's not looking so pretty :-(

Keene Little : 11/19/2008 11:29:50 AM

No bounce and the continuation lower now increases the probability that we're going to head for a new low. SPX 804-815 remains the downside magnet in that case.

Jeff Bailey : 11/19/2008 11:28:47 AM

Dow Component November "Max Pain" Link

Dow weighting as of 11/14/08 close (column F). Columns H and I are Max Pain levels at respective closes.

Column J is stock's price at time noted (ET).

Column K is % distance from MP Theory level. 5% envelope.

Analysis ... was to trade long the DIA/DDM, but follow with rather tight stop.

EIA reaction was key as was Yen strength/weakness.

Jane Fox : 11/19/2008 11:24:15 AM

Minutes from the Federal Reserve's two October meetings will be released at 2:00ET and could influence the tape.

Jane Fox : 11/19/2008 11:16:12 AM

The DOW 30-minute chart is showing a reverse H&S pattern but it needs to break 8500 before it confirms. 8500 is still a long way off.

I would like to see a MACD divergence as well but that will not happen. Link

Keene Little : 11/19/2008 11:12:27 AM

Needless to say, the bulls need to step back into the ring now. It's a good place to try a long--I'm trying a lottery play with a November QQQQ 29 call position (QAVKC).

Keene Little : 11/19/2008 11:03:04 AM

The sharp move down, through 62%, now looks more bearish. The bullish case is not violated, just in trouble.

Jeff Bailey : 11/19/2008 11:00:30 AM

GLD fell $1.00 to $75.00. Session high has been $75.18.

Jeff Bailey : 11/19/2008 10:59:44 AM

USO also fell a $1.00 to $58.00

Jeff Bailey : 11/19/2008 10:57:54 AM

QQQQ also fell another $1.00 to $31.00

Keene Little : 11/19/2008 10:57:33 AM

Looks like SPX is trying to find support at its 50% retracement (845.71). NDX has retraced a little more than 38% and still showing some relative strength. A 62% retracement for SPX would be at 841.25 and would start to look more bearish with a retracement deeper than that.

Jeff Bailey : 11/19/2008 10:57:26 AM

SPY's "Max Pain" for November fell another bone to $95.00 after yesterday's trade.

Jeff Bailey : 11/19/2008 10:53:55 AM

VXO.X 72.72

Jeff Bailey : 11/19/2008 10:52:34 AM

XOM -0.95%
CVX -0.65%

Jane Fox : 11/19/2008 10:52:22 AM

Gold is in rally mode but it is not a buy quite yet. Link

Jeff Bailey : 11/19/2008 10:51:49 AM

Needed some strength in oil ...

Jane Fox : 11/19/2008 10:51:18 AM

I am sounding like an HP ad. :)

I certainly am not an HP fan but these latest technologies were a long time coming IMHO.

Jeff Bailey : 11/19/2008 10:51:31 AM

USO $4.16 -1.36% ... "in the zone" QRTRLY S2 was morning resistance ($45.17)

Jeff Bailey : 11/19/2008 10:50:22 AM

FXY $103.11 (unch)

Jane Fox : 11/19/2008 10:50:15 AM

... and finally a wireless printer as well, from HP to. Link

Jeff Bailey : 11/19/2008 10:50:11 AM

Swing trade long stop alert! for the DDM at the bid of $29.80

Jane Fox : 11/19/2008 10:48:27 AM

Now this is news, a "touch" monitor. This has been a long time coming and one I have been waiting for. Link

Jeff Bailey : 11/19/2008 10:40:25 AM

UGA $23.44 +0.60% ...

Jeff Bailey : 11/19/2008 10:39:41 AM

XOM $76.29 -0.05%
CVX $73.81 +0.49% ...

Jeff Bailey : 11/19/2008 10:39:07 AM

USO $44.79 +0.04% ...

Keene Little : 11/19/2008 10:27:13 AM

If the leg up from yesterday is now finished, a 38%-50% retracement of the rally is near SPX 846-850/NDX 1141-1147. That gives us a downside target for now. That's if the leg up is finished which it might not be (since the 5th wave of the move is on the short side).

Keene Little : 11/19/2008 10:16:40 AM

NDX made a new high before SPX (which hasn't quite done it yet) so techs are out in front as they should be.

Keene Little : 11/19/2008 10:15:20 AM

Got the shakeout dip and then pressing higher again. This is bullish as it now creates the 5-wave move up from yesterday's low. After pressing a little higher look for another pullback to correct the leg up from yesterday (another shakeout).

Jeff Bailey : 11/19/2008 10:00:53 AM

VXO.X 72.89 +0.76%

Jeff Bailey : 11/19/2008 9:59:39 AM

DDM $30.00 ... slips below Red#1. Didn't quite make it to GREEN#2 (30.87) due to WKLY Pivot.

Jeff Bailey : 11/19/2008 9:57:14 AM

DDM $30.03
DIA $84.00

Jeff Bailey : 11/19/2008 9:55:30 AM

IBM $80.43 +0.27%
XOM $76.21 -0.15%
$73.13 -0.36% ...

These are the real "big 3" for YM/DIA traders.

Jeff Bailey : 11/19/2008 9:53:19 AM

FXE $127.68 +1.07% ...
USO $44.97 +0.44%
GLD $74.39 +2.59% ... ~743.90 spot

Jeff Bailey : 11/19/2008 9:50:22 AM

DDM $30.28 -0.72% ... WKLY Pivot (30.84) marks the morning high.

Jeff Bailey : 11/19/2008 9:49:44 AM

FXY $102.83 -0.27% ... edges under WKLY Pivot.

Jane Fox : 11/19/2008 9:48:51 AM

AD line has now fallen to -1062 so much more bearish than earlier. THE VIX is also heeading upward.

Keene Little : 11/19/2008 9:48:28 AM

If we get a small consolidation near this morning's high which is then followed by a push higher again we'll have a 5-wave move up from yesterday's low. That's the kind of evidence I'm looking for to tell us we have at least a short-term bottom put in. So far the bounce off yesterday is only a 3-wave move (and therefore possibly only a correction). To keep the bullish pattern alive SPX now needs to stay above 847.18 (the high put in near 3:20 PM yesterday).

Jeff Bailey : 11/19/2008 9:42:16 AM

Swing trade long raise stop alert! ... for the ProShares Ultra Dow (DDM) $30.67 +0.55% ... to $29.80

Jane Fox : 11/19/2008 9:37:51 AM

Ah there it is. VIX closed yesterday at 67.64 and opened this morning at 68.54

Jane Fox : 11/19/2008 9:37:06 AM

I have no VIX this morning.

Jane Fox : 11/19/2008 9:35:33 AM

AD line opens at -400 so the bears have the upper hand but could lose it easily.

Jane Fox : 11/19/2008 9:32:22 AM

FED VP Kohn spoke at 9:00ET this morning and said he doubts whether monetary policy can prevent asset bubbles and that tough and smart regulation is the better avenue to take. He admitted he was probably too soothed into comfort by the US's resilience to the economic crisis of the 1990 and then 2001 and our current crisis has turned out to be much harder than expected.

Keene Little : 11/19/2008 9:29:00 AM

Equity futures have rallied off their pre-market lows put in near 8:45 AM. It's the kind of quick rally higher that makes me think we'll see at least a drop back down to test the overnight lows. The low for ES is 844.75 and the overnight pullback is a 3-wave move (correction so far), which is a little more than a 50% retracement of yesterday afternoon's rally. If SPX drops back below 840 then I think there's a good chance we'll get that one more new low. Otherwise we've got the setup for a continuation higher following a morning shakeout.

Jane Fox : 11/19/2008 9:28:18 AM

CHICAGO (MarketWatch) -- Mortgage applications fell a seasonally adjusted 6.2% last week from the prior week, as lower interest rates on fixed-rate mortgages failed to stir prospective homebuyers to action, the Mortgage Bankers Association reported on Wednesday.

Application volume for the week ended Nov. 14 was down 41.3% on an unadjusted basis compared with the same week in 2007, the Washington-based MBA reported in its weekly survey. The survey covers about half of all U.S. retail residential mortgage applications.

Mortgage applications to purchase homes were down a seasonally adjusted 12.6% on a week-to-week basis, the MBA said. The four-week moving average for such mortgages was down 2.7%.

Meanwhile, applications to refinance existing mortgages rose 2.6%, compared with the previous week. The four-week moving average for refinancings was up 2.5%.

Jane Fox : 11/19/2008 9:25:09 AM

WASHINGTON (MarketWatch) - U.S. home builders reduced their starts of new homes by 4.5% in October, driving new construction to the lowest level since just after World War II, the Commerce Department estimated Wednesday.

Housing starts dropped to a seasonally adjusted annual rate of 791,000 in October, the slowest pace since similar records were first kept during the housing boom in the late 1940s.

Housing starts have now fallen 38% in the past year and are down about 70% from the peak in early 2006.

Building permits, which are typically less volatile than the starts data, fell 12% to a record-low seasonally adjusted annual rate of 708,000 in October, down 40% in the past year. Building permits for single-family homes, considered by many analysts as the most important number in the report, fell 14.5% to a 460,000 pace, the slowest in 26 years.

Jane Fox : 11/19/2008 9:23:19 AM

Overnight markets have retraced 50% of their respective previous day ranges and are headed back up again. Link

Jane Fox : 11/19/2008 9:17:04 AM

WASHINGTON (MarketWatch) -- U.S. consumer prices declined 1% in October on a seasonally adjusted basis, with energy prices plunging fully 8.6%, the Labor Department reported Wednesday.

Both the overall and energy decreases were the biggest since the government began keeping such records. Data on the overall CPI date back to 1947, and the energy data go back to 1957.

Meanwhile, food prices in October rose 0.3%, the smallest gain since May.

The core consumer price index, which exclude food- and energy-price inputs, eased 0.1%, the first time there's been a decline in the core rate since 1982.

Economists surveyed by MarketWatch had expected the overall October CPI to fall 0.9%, with the core pegged to rise 0.1%

Jeff Bailey : 11/19/2008 1:15:16 AM

$RUT.X Link ... probably most unfavored. -18.00% since Election Day.

Jeff Bailey : 11/19/2008 1:15:12 AM

$INDU Link ... my "bull index" of choice, based on multiple observations. -12.5% since Election Day.

Jeff Bailey : 11/19/2008 1:03:08 AM

Major U.S. Market Bullish % table Link

BPALL has come back into its "buy" of 20.00% from 10/31/07.

BPNYSE also.

BPOTC still trying to find its way. Rose into its "sell" of 10/02/08 and retreating.

BPSPX nearing its "buy" of 10/29/08.

Narrower BPOEX still above its "buy" of 16% (might tie with VXO.X and MNTHLY/QRTRLY Pivot level observations).

BPNDX into its "buy" from 10/29/08.

Very narrow BPDJIA above its "buy" from 10/28/08.

RISK measures roughly equivalent to late September.

Keene Little : 11/19/2008 12:26:36 AM

Wednesday's pivot table: Link

I've been suggesting for the past couple of days that we might be near a bottom and it's possible that Tuesday's low was it. It would be considered a truncated finish to the EW count which is not uncommon for a 5th wave. But it remains a tricky spot to figure out, especially if it's a truncated finish (it's hard to trust it until you see it in hindsight). As shown on the SPX 60-min chart (dark red) it's possible we've got one more small leg down to get into the 804-815 Fib target zone: Link

If the rally continues on Wednesday we should look for a test of the downtrend line from November 4th, currently near 889, and if that breaks then a run up to the downtrend line from September 19th, up near 925 which is also a Fib projection for two equal legs up from the low on November 13th. As shown in pink that kind of larger a-b-c bounce off the 13th could then lead to a larger 5th wave decline into the end of the month.

If SPX can break above 925 there are still plenty of resistance levels to deal with but it would be a strong statement that we're definitely into the larger degree 4th wave correction that will take us into February. The daily chart shows the two possibilities for the end of the larger degree 3rd wave and how they're not far apart except by perhaps another week or two. It's the reason I think the short side is the risk side right now. Daily chart: Link

The NDX daily chart shows essentially the same thing except for the potential to rally from here and break out of its parallel down-channel from July-August. Its wave count supports the idea that we're close to a bottom. Link

While I don't consider a stronger selloff to be one of the higher probability scenarios there is a wave count that supports it (not shown on any of the charts). I mention it because of the potential we'll see the market get hammered lower in a capitulation type of move so stay cautious about the long side. We're going to be entering another larger choppy correction with lots of whipsaws and trading will be the name of the game, not buy (or sell) and hold. The easy trade (short from May or August) is finished.

Jeff Bailey : 11/19/2008 12:16:28 AM

DIA option chain (sorted by volume) with notes as to where November OI was heaviest at Monday's close (will get new OI tomorrow) Link

#3 open interest is $115 Call (DIA-KK) at 16,392.

Heaviest option of all months is Dec $119c at 76,265.

Jeff Bailey : 11/18/2008 11:57:59 PM

YM off 79 at 8,415

Jeff Bailey : 11/18/2008 11:57:45 PM

$/Yen at 96.52 Link

Jeff Bailey : 11/18/2008 11:52:00 PM

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

Jeff Bailey : 11/18/2008 11:48:05 PM

BA, DD, BAC, INTC, C and GM did see trade at new 52-week low today. (in order of INDU weighting)

Jeff Bailey : 11/18/2008 11:38:04 PM

Swing trade long raise stop alert! ... for the 1/8 position in the ProShares Ultra Dow (DDM) $30.50 +3.53% ... to $28.60.

Jeff Bailey : 11/18/2008 11:29:37 PM

106 new lows for S&P 500 today. About 50 more than a bull would have wanted to see.

Jeff Bailey : 11/18/2008 11:11:25 PM

SPY 5-minute interval with volume turned on Link

Jeff Bailey : 11/18/2008 11:02:24 PM

Closing U.S. Market Watch Link

Jeff Bailey : 11/18/2008 10:59:07 PM

Tuesday's late rally certainly looks to have been BUD rebalancing. Very little question in my mind.

Jeff Bailey : 11/18/2008 10:19:35 PM

U.S. auto execs plead for Congress to fund bailout ... Reuters Story Link

Today's testimony did have Treasury Secretary Paulson saying he didn't think $700B should be used for auto. Mr. Paulson also said plumbers were not getting any of $700B as reported in popular press.

OI Technical Staff : 11/18/2008 9:59:59 PM

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