Option Investor
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Jeff Bailey : 11/21/2008 9:52:29 PM

RUT.X's NH/NL finished 1:662

11/13/08 was 4:395

10/23/08 was 1:358

Jeff Bailey : 11/21/2008 9:50:38 PM

US Bank Busines Loans Up $9.2B In Latest Week

U.S. banks' commercial and industrial loans rose $9.2 billion to about $1.608 trillion in the week ended Nov. 12, the latest week for which data are available, the Federal Reserve said Friday.

That followed a $7.0 billion decrease the previous week.

Jumbo certificates of deposit fell $36.5 billion to about $1.950 trillion in the latest weekly data, after shrinking $72.8 billion the previous week. Revolving home equity loans rose $300 million to $579 billion after falling $300 million the previous week.

Jeff Bailey : 11/21/2008 4:24:18 PM

Excellent, excellent commentary from CNBC guest regarding NOT to keep trying to call a bottom.

Keene Little : 11/21/2008 4:14:25 PM

One other possibility for Monday is a quick decline to one last new low before setting up the larger rally, shown in dark red on the 60-min chart: Link . The parallel down-channel for this week's price decline, and the wave count for the decline, supports the idea we'll get another leg down to about 725 to finish the move. I'd also be a strong buyer there if it happens.

We'll find out Monday--have a great weekend.

Jeff Bailey : 11/21/2008 4:14:12 PM

Best long on post-Geithner in my opinion at 03:16:18.

Jeff Bailey : 11/21/2008 4:08:53 PM

I'm not a candlesticker, but that does look like a "hammer" in the UYG $3.99 +6.68% Link

Jane Fox : 11/21/2008 4:08:06 PM

Egads the DOW closes up 494 points.

Keene Little : 11/21/2008 4:06:57 PM

As a reminder, the little 4th wave correction idea is the one shown in pink on the SPX daily chart, updated here: Link . A final low following it is when I'll be all over it getting long for a bigger bounce into the new year. But it's possible we've already put in the final low for the year (dark red) which is why I started legging into some long positions this week. I'll add to it if I see a good pullback opportunity next week.

Jeff Bailey : 11/21/2008 4:04:49 PM

Hey, 3rd time might be the charm!

Jeff Bailey : 11/21/2008 4:04:27 PM

With RVX.X at these lofty levels, might as well buy the most heavily weighted group in the UYG if trying to call/trade a bottom. If it is, premium should drop like a rock.

Jeff Bailey : 11/21/2008 4:01:59 PM

UYG $4.02 +7.78% ...

Keene Little : 11/21/2008 4:01:50 PM

Well, call me surprised but not really. It looks like they're going to park SPX as close to 797 as possible. That would leave us guessing as to whether this week's downtrend line is going to break on Monday or instead act as resistance. I'd guess we're going to see a pullback on Monday (a little post-opex slump) and then we'll have to see what develops from there.

The three days leading into Thanksgiving are typically bullish and the wave pattern supports that. How high it gets or how choppy the pattern will be is the bigger question as I watch for the possibility for a relatively small 4th wave correction that leads to a new low by the end of the week or first week of December.

Keene Little : 11/21/2008 3:55:59 PM

I'd be surprised though if SPX can make it that high today. The move up from this afternoon's high looks like a nice 5-wave move and should therefore be complete. We're due a pullback to at least retrace some portion of this afternoon's rally.

Jeff Bailey : 11/21/2008 3:54:52 PM

DAILY R1 tagged almost to the point. DIA $79.08

Keene Little : 11/21/2008 3:53:59 PM

The downtrend line from Monday's high is near SPX 797. It would make for a good place to park it for the weekend--leaving everyone guessing for Monday.

Jane Fox : 11/21/2008 3:53:53 PM

DOW is now up 356 points. These late day moves can be very profitable is only we had a way of knowing when they start.

Jeff Bailey : 11/21/2008 3:53:52 PM

If long the YM from post-Geithner 7,600, I'd suggest closing out here at 7,872

James Brown : 11/21/2008 3:49:29 PM

Entergy (ETR) is breaking out past its simple 50-dma and appears to be breaking out from its six-week consolidation pattern. Starting to look bullish here.

Jeff Bailey : 11/21/2008 3:44:27 PM

Geithner rally taking hold to the close.

Keene Little : 11/21/2008 3:43:46 PM

Quite the squirt higher we've got going into the close. Nothing like a little short covering (and/or removal of opex hedges) before the weekend.

Jeff Bailey : 11/21/2008 3:35:54 PM

UYG $3.70 -1.06% ...

Keene Little : 11/21/2008 3:35:22 PM

That quick jab higher is a good completion of the 5-wave move up from this afternoon's low. That may be all we're going to see for today. If it does push higher, the next Fib projection for the 5th wave and the a-b-c bounce off this morning is at 785-788.

Jeff Bailey : 11/21/2008 3:32:56 PM

UWM $13.22 +4.83% ...

James Brown : 11/21/2008 3:28:29 PM

Hansen Natural (HANS) may be a bearish candidate. The stock looks poised to drop toward support near $20.00. If it breaks $20.00 it would be a breakdown from a bearish head-and-shoulders pattern. chart: Link

Jim Brown : 11/21/2008 3:23:59 PM

I am leaning towards today's lows being a bottom. The 7500, 1300, 750 round number support levels should be tough to breach. This is opex week so any closing moves today should be discounted but those bears with a portfolio of puts have got to exit those today and that should give us a closing bounce. Next week should be exciting since Thanksgiving week is normally bullish. This level would be a good spot to venture back into some speculative longs. I am using the Proshares Ultra Russell ETF w/options. (UWM)

James Brown : 11/21/2008 3:22:38 PM

Retailer Sears (SHLD) appears unable to put together back-to-back gains. The stock is down 3% following yesterday's oversold bounce.

Jane Fox : 11/21/2008 3:22:12 PM

WASHINGTON (MarketWatch) -- Sen. Hillary Clinton, New York Federal Reserve President Tim Geithner and former Energy Secretary Bill Richardson have all accepted posts in President-elect Barack Obama's cabinet, according to media reports. Clinton accepted the position of secretary of state, the New York Times reported. Richardson is in line to become Commerce secretary and Geithner was picked to be Treasury secretary, NBC News reported.

Keene Little : 11/21/2008 3:22:01 PM

We should now get a small consolidation (15-30 minutes from the high) followed by another push higher, to create a 5-wave move up from this afternoon's low. We'll then be due another drip back down or just a small retracement of this afternoon's rally before proceeding higher again. We're into a corrective wave structure and therefore each leg of the move will have to be tested for where it might go next. This is the time to trade very quickly and take profits quickly. Flat is also a good position.

James Brown : 11/21/2008 3:20:03 PM

Costco (COST) is recovering from its intraday breakdown under support at the $45.00 mark. I'm curious if it will actually rebound or will it be pinned at $45.00 for option expiration. (Note: the P&F target was $46)

Jeff Bailey : 11/21/2008 3:17:14 PM

SPX 769.96 +2.32% ...

Jeff Bailey : 11/21/2008 3:16:18 PM

Pacholder High Yield (PHF) $3.57 -0.83% ... can't forget those junk bonds.

Jeff Bailey : 11/21/2008 3:12:53 PM

SPX 762.65 +1.35% ...

Jeff Bailey : 11/21/2008 3:11:51 PM

BCM endorses Mr. Geithner's selection.

Jeff Bailey : 11/21/2008 3:10:53 PM

Timothy F. Geithner ... Profle Link

Jeff Bailey : 11/21/2008 3:08:36 PM

dj- Bill Richardson to be picked as Commerce Secy

James Brown : 11/21/2008 3:07:09 PM

FYI:... Bard CR (BCR) hit our OI put play target at $75.50 this morning. Hope readers exited. The stock is bouncing sharply.

Jeff Bailey : 11/21/2008 3:06:58 PM

RUT.X 380.46 -1.25% ... can't forget the small caps.

Jeff Bailey : 11/21/2008 3:06:33 PM

StreetTracks Gold (GLD) $78.92 +7.44% ... ~$789.20 spot

James Brown : 11/21/2008 3:05:28 PM

Today's surge in gold prices on November option expiration is a gift. Exit alert! for the November GLD strangle. We can actually escape in the green. We still have time on the December strangle.

Jeff Bailey : 11/21/2008 3:05:12 PM

US$ Index 88.18 +0.24% ...

Jeff Bailey : 11/21/2008 3:04:50 PM

SPX 752.73 +0.03% ...

Jeff Bailey : 11/21/2008 3:04:35 PM

TNX.X at 3.171% ...

Jeff Bailey : 11/21/2008 3:04:10 PM

FXE $125.25 +0.26%
FXY $104.61 -1.30%
FXB $148.27 +0.43%

Jeff Bailey : 11/21/2008 3:03:30 PM

dj- Timothy Geithner to be picked as Treasury Secy

James Brown : 11/21/2008 3:03:04 PM

No slowdown in the sell-off for Goldman Sachs (GS). The stock is off another 7.2% and breaking down under the $50.00 level again.

Jeff Bailey : 11/21/2008 3:03:01 PM

dj- US Sen. Clinton said to accept Secy of State Post

Jeff Bailey : 11/21/2008 2:59:04 PM

VIX.X 77.32 -4.37% ...

James Brown : 11/21/2008 2:59:02 PM

... Las Vegas Sands (LVS) continues to crash. Shares are down 24% to $2.97 under prior "support" near $4.00.

Jeff Bailey : 11/21/2008 2:58:06 PM

SKF 294.47 +12.20% ...

James Brown : 11/21/2008 2:57:23 PM

Interesting graphic on CNBC talking about the market cap lost in the major financials from October 2007 to today.

Citigroup was $290 Billion, now $20B
Goldman Sachs $98 Billion, now $20B
Amer.Express $75B, now $20B
AIG was $190B, now $4B
Wachovia $108B, now $8B

Jeff Bailey : 11/21/2008 2:56:26 PM

XAL.X 15.53 -6.16% ... gravitates toward trend. (see last night's MM). Link

Jeff Bailey : 11/21/2008 2:52:32 PM

XNG.X -38.42% YrNet%

UNG -29.87% ...

Jeff Bailey : 11/21/2008 2:39:56 PM

Lukoil Inching Closer to Repsol Stake Buy, Pending Funding (DJ-Source)

Russia's OAO Lukoil (LKOH.RS) is moving forward with plans to buy a stake in Spain's Repsol YPF SA (REP) for about EUR27 to EUR28 per share, a person familiar with the situation said Friday. The potential transaction to nab about one-third of Spain's largest oil company, however, still requires financing, this person said. Highly indebted Spanish construction company Sacyr-Vallehermoso SA (SYV.MC) is expected to sell its 20% stake in the oil company, this person said. A Sacyr spokeswoman declined to comment. Lukoil was meeting Friday with financial institutions that previously arranged Sacyr's financing to buy the Repsol stake. If completed, the stake purchase could amount to about EUR10 billion. It would also mark Lukoil's entrance in regions such as Latin America, where Repsol has a prominent position. Sacyr paid EUR6.53 billion, or EUR26.71 per Repsol share, when it bought its stake in 2006. Repsol shares rose 2.3% to EUR13.91 Friday. Repsol has refining capacity of close to 1.2 million barrels a day in Spain and Latin America. It also has significant stakes in ultradeep offshore blocks in Brazil's Santos Basin, where potentially gigantic discoveries have been made recently. Spain's La Caixa has also talked to Lukoil to sell part of its 12% stake in Repsol, the savings bank said earlier Friday. Unlisted financial institutions Caixa Catalunya and Mutua Madrilena are also expected to sell their Repsol shares if an agreement is reached. Another person familiar with the situation said La Caixa will seek to retain about 6% of Repsol.

Jeff Bailey : 11/21/2008 2:36:41 PM

GG $23.26 +22.17% ...

Jeff Bailey : 11/21/2008 2:36:03 PM

If still short/put the gold commodity, I would NOT suggest be short of miners.

Jeff Bailey : 11/21/2008 2:35:29 PM

GLD -0.64% YrNet% ...

HUI.X -51.45% YrNet% ...

Jeff Bailey : 11/21/2008 2:33:41 PM

OIX.X -38.62% YrNet%

USO -47.16% YrNet% ... was even a few days ago (see MM)

Jeff Bailey : 11/21/2008 2:31:11 PM

OIX.X 493.42 +4.70% ...

Jeff Bailey : 11/21/2008 2:30:40 PM

US Oil Fund (USO) $40.43 +2.22% ...

Jeff Bailey : 11/21/2008 2:30:13 PM

dj- Kirkuk-Ceyhan Oil Pipeline Attacked; Fire Breaks Out

Jeff Bailey : 11/21/2008 2:29:37 PM

dj- Columbia Central Bank Keeps Key Rate Unchanged at 10.00%

Jeff Bailey : 11/21/2008 2:28:21 PM

HUI.X 200.96 +20.32% ...

Keene Little : 11/21/2008 2:27:28 PM

It's an opex Friday and we could stay pinned around current prices and see the market essentially flat line from here. I still like the potential for a rally leg up to at least SPX 772 (two larger equal legs up from this morning's low) and maybe higher (790). If SPX stays trapped between today's high and low it will look bearish for another low on Monday.

Jeff Bailey : 11/21/2008 2:15:00 PM

GLD $78.83 +7.32% ... "in the zone"

Jeff Bailey : 11/21/2008 2:14:23 PM

Has been finding some buyers from gap higher at MNTHLY Pivot throughout.

Jeff Bailey : 11/21/2008 2:13:58 PM

GG $22.78 +19.70% ... edges to new intra-day high.

Keene Little : 11/21/2008 2:07:39 PM

After this morning's 3-wave bounce we've now had a corrective pullback for what could essentially be the test of the low. That may be part of a larger a-b-c rally off this morning's low and if true then we're about to get a strong rally leg into the close.

Jane Fox : 11/21/2008 2:05:19 PM

Internals are taking a turn for the worse but still not as bearish as they have been. Link

Jeff Bailey : 11/21/2008 2:04:09 PM

EEV $117.68 -6.65% ....

Jeff Bailey : 11/21/2008 2:03:32 PM

ZION $23.06 -12.35% ... (see prior MM comments/analysis)

Jeff Bailey : 11/21/2008 2:02:06 PM

BIX.X 104.61 -8.26%

DJUSHB 131.98 -9.86% ...

Jeff Bailey : 11/21/2008 2:01:20 PM

SPX (from wrap) with adjustment to intra-day observation. Turned on the WKLY Pivots Link

Jeff Bailey : 11/21/2008 1:58:19 PM

I'm going to suggest that traders following my Market Wraps, move your SPX 0% UP to 844.05. I've looked at a 60-minute interval chart, and prior marking from QCharts' daily interval looks incorrect as shown prior. When I do this, I can't say today's action looking very bullish and would want followers to really be assessing risk to 704.23 (resulting -19.1%).

Jeff Bailey : 11/21/2008 1:51:16 PM

SPX 756.45 +0.53% ... daily interval bar chart pretty much a "doji" possibility.

Jane Fox : 11/21/2008 1:50:41 PM

Brian Sullivan, CTPartners chief CEO has said layoffs in the financial industry could double by the middle of next year, as many as 350,000 people. He likened it to the financial equivalent of World War II. Some examples of those layoffs just announced the last few days are:

* With Citigroup?s (C) recent announcement of more than 50,000 job cuts,
* WaMu laying off 1600
*Bank of New York Mellon laying off 1800

Jeff Bailey : 11/21/2008 1:41:42 PM

Petroleo Brasileiro (PBR) $16.17 +8.23% ... #13 most active

Jeff Bailey : 11/21/2008 1:37:46 PM

Right click the retracement, alerts then set.

Jeff Bailey : 11/21/2008 1:37:10 PM

That's tricky isn't it? I'm going to place a conventional on the 11/04 high (marks the EEV low), and the 10/27 low at $22 (would at least explain the EEV 10/27 lower high)

Jeff Bailey : 11/21/2008 1:07:40 PM

Lukoil (LUKOY) $27.70 +6.17% ... #10 weight in EEV

Jeff Bailey : 11/21/2008 1:05:10 PM

EEV $112.18 -11.01% ...

Jeff Bailey : 11/21/2008 1:04:13 PM

DJ- Lukoil Asks EUR5.2B Financing To Sacyr Creditors For Repsol Take Buy

Keene Little : 11/21/2008 12:54:51 PM

Also, like yesterday, use an uptrend line from this morning's low as a heads up that we could be breaking down again. SPX is finding 768 to be resistance right now so that's the first hurdle for bulls to tackle.

Keene Little : 11/21/2008 12:50:19 PM

Nice little bounce off the low now. Whether it will turn into something larger is now the question. Two equal legs up is at SPX 772.80. If we're going to stay trapped in some kind of consolidation pattern, or head lower again, that level should be resistance (just as yesterday's bounce to 820 turned out to be resistance leading to more selling).

Jeff Bailey : 11/21/2008 12:45:57 PM

General Motors (GM) $2.80 -2.50% ... see yesterday's MM.

Jeff Bailey : 11/21/2008 12:45:15 PM

GM to return two leased jets amid criticism ... Reuters Story Link

Jeff Bailey : 11/21/2008 12:42:12 PM

BIX.X 107.29 -5.91% ... MNTHLY S2 untested. (97.78)

Jeff Bailey : 11/21/2008 12:41:00 PM

BKX.X 34.82 -5.17% ..

Jeff Bailey : 11/21/2008 12:40:42 PM

XLF $9.20 -2.00% ...

Jeff Bailey : 11/21/2008 12:40:18 PM

SKF 277.32 +5.66% ...

Jane Fox : 11/21/2008 12:35:18 PM

Internals are not telling me much today other than it is choppy out there. Link

Jeff Bailey : 11/21/2008 12:25:02 PM

Yg08z $798.10 +6.59% ... tapped 799.80. Remember last month's "max pain" for GLD.

Jeff Bailey : 11/21/2008 12:23:48 PM

Comex Gold open interest benchmark Link

Jeff Bailey : 11/21/2008 12:17:52 PM

Only 56 OI in November gold into Tuesday's termination. Not surprised as Dec. in front. Still needed to check based on action.

Jeff Bailey : 11/21/2008 12:12:49 PM

GoldCorp (GG) $22.63 +18.86% ...

Jeff Bailey : 11/21/2008 12:11:32 PM

Coeur D' Alene (CDE) $0.4891 +35.86% ... edges off recent multi-year low.

Jeff Bailey : 11/21/2008 12:09:55 PM

YG 795.8 +6.29% ... volume build somewhat more notable today.

Jeff Bailey : 11/21/2008 12:08:32 PM

Copper +1.93% at 160.60

Jeff Bailey : 11/21/2008 12:08:43 PM

Palladium +1.39% @ 181.95 ...

Jeff Bailey : 11/21/2008 12:07:37 PM

TSN $4.63 +5.22% ...

Jeff Bailey : 11/21/2008 12:07:03 PM

Lean hogs quiet and flat.

Jeff Bailey : 11/21/2008 12:05:10 PM

Jumping over to QC6.0

Jeff Bailey : 11/21/2008 12:04:11 PM

Amex Gold Bugs ($HUI.X) 197.54 +18.28% ... sector winner in early going. (see last night's MM)

Jeff Bailey : 11/21/2008 12:03:25 PM

SLV $9.46 +6.77% ... tracking.

Jeff Bailey : 11/21/2008 12:02:09 PM

Could be BIG trouble.

Jeff Bailey : 11/21/2008 12:01:40 PM

GLD $0.40 box to match futures. Link

Jeff Bailey : 11/21/2008 12:00:03 PM

FXE $125.50 +0.46% ...

Jeff Bailey : 11/21/2008 11:59:36 AM

Analysis: Bears look to be in trouble.

Jeff Bailey : 11/21/2008 11:59:13 AM

GLD also gapped it Nov "Max Pain" ...

Jeff Bailey : 11/21/2008 11:58:28 AM

WKLY R2 here also.

Jeff Bailey : 11/21/2008 11:58:17 AM

StreetTracks Gold (GLD) alert! $78.37 +6.73% ... trades MONTHLY 38.2%.

Jane Fox : 11/21/2008 11:53:12 AM

You know the old saying what would happen if you gave a war and no one came. I would like to ask what would happen if the whole world went bankrupt?

Jeff Bailey : 11/21/2008 11:52:52 AM

US Oil Fund (USO) $39.57 +0.05% ... Daily Interval Montage (fib left) and QRTRLY/MONTHLY on the right. On (fib left) in upper right is initial test of strength from the important benchmark (08/20/08). Link

Keene Little : 11/21/2008 11:50:40 AM

It's looking like we may have put in the low for the day. It's possible we'll just consolidate sideways for a while before heading lower again but so far the size of the bounce off the low says the leg down from this morning's high is finished and that fits as the 5th wave of the decline from yesterday's high.

Jeff Bailey : 11/21/2008 11:43:44 AM

Bigger test for USO would be to reclaim QS2 ($45.17). Stating the obvious, but that's where we'd begin to think/observe any institutional interest.

Jeff Bailey : 11/21/2008 11:40:44 AM

US Oil Fund (USO) $39.71 +0.40% ... same chart shown prior months. Link

Jeff Bailey : 11/21/2008 11:36:24 AM

US Oil Fund (USO) ... since closing back below your 06/20/08 termination benchmark, USO has NOT been able to move above a prior by more than 4.94142%.

Let's call it 5.00%.

Oil traders might want to set an alert at ... $39.55 * 1.05 = $41.53

Jeff Bailey : 11/21/2008 11:32:45 AM

US Oil Fund (USO) $39.65 +0.25% ... edges back green. Above 11/20/08 benchmark termination.

Jeff Bailey : 11/21/2008 11:28:20 AM

Bare Escentuals (BARE) $3.33 +0.90% ...

Jeff Bailey : 11/21/2008 11:27:06 AM

Avon Products (AVP) $18.06 -1.74% ...

Jeff Bailey : 11/21/2008 11:26:08 AM

Closed out the AVP-XX in personal account at target.

Jane Fox : 11/21/2008 11:17:00 AM

Ok a little good news. Isn't the price of gas awesome lately. I truly thought I would never see gas under $2.00 ever again and I paid $1.99 yesterday.

Jane Fox : 11/21/2008 11:10:30 AM

Crude has hit a new daily low - so much for its "rally."

Jeff Bailey : 11/21/2008 11:09:35 AM

USO $39.27 -0.70% ... slips to a 52-week low.

Jane Fox : 11/21/2008 11:08:20 AM

Yesterday was a very very bearish day so many were/are expecting a relief rally today. I mean isn?t that what the market usually does, gives you a little relief? Well if that was your thinking today you would have been wrong. Although the DOW is only down 5 points it feels like 500 and the selling is relentless. The rallies today are choppy with long tails (and you all know I hate long tails) and shortlived whereas the selloffs are orderly and much longer with hardly any tails at all. Link

Jeff Bailey : 11/21/2008 10:57:38 AM

US Oil Fund (USO) $40.07 +1.31% ... traders should mark yesterday's close for December Nymex Crude termination.

Since closing below 06/20/08 termination, USO had NOT been able to hold above a prior termination for more than three (3) sessions.

Jeff Bailey : 11/21/2008 10:51:38 AM

S&P 500 (SPX.X) 759.57 +0.93% ... sitting on my -11.8% retracement. See 11/12/08 Wrap Link

Jeff Bailey : 11/21/2008 10:47:06 AM

Healthcare Payors (HMO.X) 664.56 -3.71% ...

Jeff Bailey : 11/21/2008 10:44:23 AM

Wellcare Healthplans (WCG) $6.86 -2.13% ... set to test its -61.8%.

Keene Little : 11/21/2008 10:43:35 AM

GOOG is now nearing the downside target I showed for it back on November 6th after it broke down from its sideways triangle pattern. Using the widest part of the pattern and projecting down from the point where it broke below the triangle it gave us a downside target of 256. Yesterday's low was 259 and a minor new low for that one could have it tagging 256. It doesn't mean it will stop there (or get there) but it does offer a level of interest to watch for a long trade. Daily chart: Link

Jeff Bailey : 11/21/2008 10:43:03 AM

United Health (UNH) $16.10 -1.22% ... still off its 10/10/08 low of $14.51.

Jeff Bailey : 11/21/2008 10:42:01 AM

Humana (HUM) $23.96 -5.92% ... that's a new 52-weeker.

Jeff Bailey : 11/21/2008 10:41:05 AM

Aetna (AET) $16.33 -10.76% ... that's a new 52-weeker.

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

Cigna (CI) $8.72 -1.80% ... slips to a new 52-week low.

Keene Little : 11/21/2008 10:35:06 AM

As the market works its way back down it's looking a bit choppy in the decline (looking at a 5-min chart of SPX). That could be a good sign that we are in fact putting in a small 5th wave down to finish the leg down from Monday. The RUT is much weaker today, down -2%, while the others hold in the green. Perhaps a little capitulation there as fund managers give up on the idea of a rally and they're bailing. That's also potentially bullish as a sign of a bottom.

Keene Little : 11/21/2008 10:31:51 AM

Jane, the Japanese shouldn't worry about China's investment in AIG. It will turn to dust in short order anyway. Just look at the money the taxpayer has thrown at that problem. Keeping the existing management in control is the problem.

Jane Fox : 11/21/2008 10:31:33 AM

WASHINGTON (MarketWatch) -- The Federal Reserve can still conduct monetary policy if interest rates fall to zero, said Richmond Fed president Jeffrey Lacker on Friday. With the Federal funds rate at at a low level of 1% and the economy weakening, many Fed watchers have begun to discuss other means of boosting the economy, or "quantitative easing." Lacker seemed confident, saying that the Fed has "a wide variety of choices" to conduct policy. Lacker said he expects a significant decline in gross domestic product in the final three months of the year. But he stuck with his previous forecast that growth will rebound in the second half of the year.

Jane Fox : 11/21/2008 10:22:48 AM

I find this piece of news quite scary. A consortium led by China Investment Corp is negotiating with AIG to acquire a 49% stake in the struggling US giant insurance company's American Life Insurance unit, Alico. If the deal goes through AIG will keep more than 50% of voting rights maintaining management control. But Japan is worried because Alico Japan accounts for 60% of the company's revenue and this sale will effectively give China a foot in the door to Japan's insurance market.

Keene Little : 11/21/2008 10:10:18 AM

For yesterday's decline the 5th wave would equal the 1st wave at SPX 745.90 which would be a minor new low.

Keene Little : 11/21/2008 10:06:48 AM

They haven't held the gap up very well and the DOW is the first to close it. The price pattern for the move down from yesterday's high would look best with one more minor new low to complete a 5-wave move down. That should then set up a larger bounce.

Jane Fox : 11/21/2008 10:01:58 AM

AD line actually started the day much more bullish than I anticipated at +1235 but has now fallen to +379. The VIX has been falling most of the morning but has not retreated a bit. Internals were very bullish this morning yet the bulls were not able to keep a hold of the ball.

Jane Fox : 11/21/2008 9:45:05 AM

Oh and the TRIN is 0.51.

Jane Fox : 11/21/2008 9:44:37 AM

VIX is falling, AD line is +1200 - two very bullish internals and the bears are still able to bring the market down. Wow!

Jane Fox : 11/21/2008 9:28:01 AM

I read that Crude was in rally mode this morning. Take a look at rally mode in Crude nowadays. Too funny.

Crude hit a low of 48.52 overnight. Link

Jane Fox : 11/21/2008 9:26:47 AM

We had a very nice rally going overnight but alas almost 50% of it has been retraced and I suspect the AD line (the pulse of our very sick patient, the market) will open poorly (well below 0 and maybe even below -1000). Link

Keene Little : 11/21/2008 9:25:19 AM

Equity futures rallied strong last night, with ES retracing just over 50% of yesterday's decline. They've pulled back from the high put in near 5:00 AM and ES has now retraced exactly 50% of the rally from yesterday's low to the overnight high. It looks like a bullish setup for the day if it doesn't gap n crap.

Jane Fox : 11/21/2008 9:17:24 AM

NEW YORK (MarketWatch) -- Troubled auto maker General Motors Corp. plans more cutbacks to its North American production schedule, according to a report Friday morning in The Wall Street Journal, which noted that some plants may be idled for several weeks, beginning in January. Employees will be notified on Friday morning, according to the article. Shares of GM were up more than 4% to $3.01 in premarket trading.

Jane Fox : 11/21/2008 9:07:52 AM

LONDON (MarketWatch) -- Citigroup's board of directors will meet Friday to consider auctioning off parts of the bank, or even the entire firm, after another sharp slump in the stock price, according to a published report.

The talks are only at a preliminary stage and don't signal a change in management's stance that the bank has ample funding and strategic direction, The Wall Street Journal reported, citing people familiar with the matter.

The New York Times also reported Pandit will hold a meeting for senior managers Friday to update them on the bank's condition.

We all knew this was coming didn't we

Keene Little : 11/21/2008 2:16:03 AM

I take exception to Jeff's point about not being able to "pick a top" or "pick a bottom" and that it's a waste of time. EW counts can get you pretty close and while it may take a probe or two to find it, it can be pretty accurate and lucrative. This is the chart I posted in my October 10, 2007 newsletter where I "picked a top" and even gave a minimum downside projection for the decline for SPX (778) which was achieved today: Link . The high was the following day at 1576 but closed lower at 1554. Not bad Mr. Elliott--my hat's off to you and your work.

Keene Little : 11/21/2008 1:52:45 AM

Friday's pivot table: Link

SPX closed at the bottom of a small parallel down-channel for its decline from November 4th, and slightly below its October 2002 low of 768. Considering the extra selling pressure the market experienced from opex (hedging bullish short put positions by shorting the stock), we could see a strong reversal on Friday as those trades are unwound. At least that's the setup. How far it gets, if it bounces, will be the next step to figure out. SPX daily chart: Link

The other indexes and sectors look very similar as I discussed and showed in tonight's newsletter. We're very close to a bottom and if Thursday's decline wasn't it then we should only have one more up-down sequence to finish the wave count. If we're going to see a new low in December that's when the DOW could tag its October 2002 low of 7197. DOW daily chart: Link

Jeff Bailey : 11/21/2008 1:21:19 AM

Trying to "pick a bottom" or "pick a top" is impossible.

SPY "bottom in" Link

Even if you "picked the bottom" in July'02 on the FIRST try, did you hold it? Or did you stop out just below $77.68 in October?

Good for headlines, but you'll probably waist a lot of time, and money. A lot of brain power too.

Then what happens? Once the bottom is in, you won't believe it. You'll think you missed it. And you'll short it all the way up, trying to push it back down to where you can "buy the bottom."

Jeff Bailey : 11/21/2008 12:32:02 AM

YM up 158 at 7,645

Jeff Bailey : 11/21/2008 12:30:10 AM

Hong Kong shares up 4.5% on China talk, U.S. recovery hopes ... Reuters Story Link

$HSI currently up 4.50% at 12,851.80. Looks like CHL 68.40 +4.43% ... (see 12:13:55

Jeff Bailey : 11/21/2008 12:19:48 AM

Fannie Mae, Freddie Mac suspend some foreclosures ... Reuters Story Link

Jeff Bailey : 11/21/2008 12:13:55 AM

EEV and its current Big 3 weightings Montage Link

Marked the 10/10/08 to 11/04/08 range on the EEV. That's what a trader might be interested in.

Then marked the range on OGZPY, CHL and PBR. When below the range, then "stacked lower" the retracement. PBR with a triple stack just in case.

Jeff Bailey : 11/20/2008 11:10:07 PM

Said it for years ... the MOST IMPORTANT employee of an airline is the HEDGER. I'm talking about "bottom line" of course.

Easy you pilots, mechanics and every other contributor to an airline's business.

Jeff Bailey : 11/20/2008 11:07:02 PM

Good gravy ... LUV $7.76 -10.49% ... they're a BIG hedger of oil. Guess what side of THAT trade they're on.

How about the WRONG side.

Jeff Bailey : 11/20/2008 11:04:49 PM

Aerospace/Airline Weekly Distribution Bell Curve Link

Jeff Bailey : 11/20/2008 11:00:13 PM

Dorsey/Wright says! Link

Now, what does 49 NL in the aerospace mean? It depends doesn't it? That's one reason why we want to use RATIO's in the NYSE and NASDAQ intra-day internals.

Another measure would be to know 49 of how many?

Dorsey tracks 101 stocks as being AEROspace/airline related. HON isn't a commercial airliner, but bulk of business is there. So, HON a component in the BPAERO.

Jeff Bailey : 11/20/2008 10:47:06 PM

OK, for BULL/BEAR leadership, looks like NASDAQ NH/NL is what we need to use. Unless you're willing to do this every night.

Anyway, wanted to check my analysis/thoughts based on last couple of months' observations.

Adjust for all these "inverse" funds.

Jeff Bailey : 11/20/2008 10:46:59 PM

What the heck is Merrill Lynch (SXF) $10.87 +2.07% ... been trading just 5-days. That doesn't really count. Need at least 52-weeks.

Merrill Lynch (MER) $7.96 -1.08% ... that's "mother Merrill" and a new 52-week low.

Jeff Bailey : 11/20/2008 10:42:12 PM

Wait! XOM and CVX observations last several days. That's gott'a be it.

Jeff Bailey : 11/20/2008 10:41:40 PM

Not sure what DUG is doing there. Hmmmm.... might need to check these for some type of "adjustment" not showing up in the charts. Looking at OIX.X and XNG.X I'd think they'd be there.

Jeff Bailey : 11/20/2008 10:40:09 PM

PowerShares 1-30 Laddered Treasury (PLW) $28.64 +2.83% ... is a true directional. Interesting product. Buy the ladder with a click of a button.

Jeff Bailey : 11/20/2008 10:37:43 PM

Not sure what the FXP is doing there.

Jeff Bailey : 11/20/2008 10:35:50 PM

Not sure what EEV is doing there ...

Jeff Bailey : 11/20/2008 10:34:21 PM

Emrise Corp. (ERI) $1.05 +150% ... not a "real" stock yet, but a stock at a 52-week high. So that's "1"

Jeff Bailey : 11/20/2008 10:33:06 PM

ProShares UltraShort Basic Materials (SMN) $132.16 +21.54% ... uh-hu

Jeff Bailey : 11/20/2008 10:32:18 PM

Financial Bear 3x (FAZ) $165.48 +27.98% ... uh-hu.

Jeff Bailey : 11/20/2008 10:30:41 PM

Like the gameshow Family Fued ...

QCharts says! ... Link

Jeff Bailey : 11/20/2008 10:27:13 PM

Closing Internals at this Link ... Now let's check my analysis/thoughts regarding those NYSE new highs.

Jeff Bailey : 11/20/2008 10:16:05 PM

NYSE volume was 9.096 billion. Still shy of 10/10/08's 11.45 billion.

Jeff Bailey : 11/20/2008 10:04:39 PM

Nymex 11/20/08 Link

11/19/08 Link

OI Technical Staff : 11/20/2008 9:59:59 PM

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