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Jeff Bailey : 12/9/2008 4:30:47 PM

Tomorrow, I'd think the SMH trade WEAKER than the QQQQ itself.

Jeff Bailey : 12/9/2008 4:21:55 PM

Ah, but the MONTHLY Pivot? (wink)

Jeff Bailey : 12/9/2008 4:21:32 PM

See, the SMH didn't have the reverse h/s pattern to work off of.

Jeff Bailey : 12/9/2008 4:20:51 PM

SMH $17.43 +4.30% ... (see MMM technical comments as it would related to INDU/DIA)

Jeff Bailey : 12/9/2008 4:19:58 PM

QQQQ $30.00 -0.26% ...

Jeff Bailey : 12/9/2008 4:17:50 PM

RUT.X 465.71 -3.25% .... riiiiight on its MONTHLY Pivot.

Jeff Bailey : 12/9/2008 4:13:44 PM

EIA: Weekly Retail Gasoline and Diesel Prices Link

Jeff Bailey : 12/9/2008 4:12:38 PM

Goood grrravy! ... Low end Retail Gasoline Prices Heat Map nearing $1.25. High end BELOW $2.00. Link

Jeff Bailey : 12/9/2008 4:08:33 PM

GG $24.53 +1.86% ... good exit?

Jeff Bailey : 12/9/2008 4:08:12 PM

SNDK $9.54 +0.31% ... good exit?

Jeff Bailey : 12/9/2008 4:07:21 PM

DXY's 04:00 tick is 85.83

Keene Little : 12/9/2008 4:06:31 PM

Today's decline has the potential to turn into something impulsive looking with a little lower drop at tomorrow's open. The SPX 878-880 area continues to look like a good support area. If it holds we'll then have to see whether we get just a bounce before continuing lower (down to 850-860) or instead start another rally leg up towards the 973 target before the end of the week. We remain in the middle of a very corrective price pattern and it's one that will have to be taken one leg at a time to see what develops. In the meantime make your trades more hit and run rather than hit and hold.

Jeff Bailey : 12/9/2008 4:06:16 PM

Now, what a stock like MMM does do is this ....

Say tomorrow, the INDU/DIA is WEAK again, yet MMM bids.

What that can tell us is there is SHORT covering still looking to buy the WEAK.

That's when the INDU/DIA bull finds the courage to be a buyer, with the next wave higher to the pattern objective.

Jeff Bailey : 12/9/2008 4:01:29 PM

Just clicking down through the INDU/DIA components. Checking "field position"

Jeff Bailey : 12/9/2008 4:00:24 PM

MMM $56.02 -2.38% ... AVOID as it relates to any reverse h/s pattern. See how DIFFERENT it looks? This one needs the INDU and broader market SPX to lead higher to have any hope.

Jeff Bailey : 12/9/2008 3:58:08 PM

INDU 8,707 -2.56% ... came close to back-testing MONTHLY Pivot. A bit BELOW my interpretive neckline.

Jeff Bailey : 12/9/2008 3:54:57 PM

IF you've found a stock that is pulling into its RIGHT shoulder again, maybe this is #2, then begin to understand that stock in relation to what INDEX it may need to FIRM at its neckline.

A stock that is at its RIGHT shoulder right now, is WEAK relative to the pattern, so you're in NO hurry to buy it right now.

Jeff Bailey : 12/9/2008 3:31:51 PM

10-year Yield ($TNX.X) finished down 6.8 bp at 2.666% .... CRRRRRRAZY treasury auction today. SIMPLY CRRRRRAZY!

Jeff Bailey : 12/9/2008 3:21:35 PM

Heck, each day on the INDU/DIA, all you've got to do is sort by PRICE.

Jeff Bailey : 12/9/2008 3:21:10 PM

Do you begin to see what an "advantage" a U.S-based index trader has over a foriegn-based index?

So much more timely information here in U.S. as a starting point.

Jeff Bailey : 12/9/2008 3:18:18 PM

CHL's WKLY R2 54.03, R1= $51.90, Piv= $47.70

Jeff Bailey : 12/9/2008 3:14:55 PM

Over the years I've tried to teach traders to ask questions. WHAT went WRONG?

EEV, CHL, OGZPY, PBR Link

Probably the most obvious is the WEIGHTING changed since 09/30/08.

CHL more than likely #1 now. OGZPY and PBR "maybe" #2 and #3 now.

Jeff Bailey : 12/9/2008 3:02:58 PM

Make a PROMISE to yourself ... DON'T average DOWN, or IF you do, DO IT ONLY ONCE, FIRM STOP, FIRM TARGET of getting the heck out.

Jeff Bailey : 12/9/2008 3:01:58 PM

What I've seen over the years is the AVERAGE down not just ONCE, but TWICE, THRICE and MORE!

Caboom goes the account on ONE WRONG bit of analysis.

Jeff Bailey : 12/9/2008 3:00:29 PM

The reason AVERAGING DOWN in a LOSING TRADE is DANGEROUS, is that TRADE and ACCOUNT management is CRITICAL.

It can be a COSTLY lesson.

DISCIPLINE is needed, not only to CALL IT QUITS, but more IMPORTANTLY, is to EXIT at even, or SLIGHT PROFIT.

The EXIT is usually the toughest.

Why? BECAUSE YOU ARE ALREADY WRONG once!

Then when you AVERAGE DOWN, and the trade starts to WORK from the AVERAGE DOWN POINT, then you begin to think .... "Hey! I was RIGHT all along!"

Jeff Bailey : 12/9/2008 2:54:59 PM

AVERAGING DOWN (a dangerous game) and EEV Link

Position yesterday (see MM at 02:18:29 PM) Link

Keene Little : 12/9/2008 2:35:36 PM

ES would close Friday's gap up at 871.75 and the high just before the close on Friday was ES 879.50 so that provides a zone of support. For SPX a 38% retracement of the Friday-Monday rally is at 880.31 and a 50% retracement is at 868.49. So in addition to trend lines, Fibs and gap closure we should see support in the 870-880 area.

Jeff Bailey : 12/9/2008 2:35:39 PM

EEV daily interval chart with my QUARTERLY and MONTHLY Pivot retracement. Yesterday and today's lows marked by the WEEKLY S2 (will show in a moment).

AVERAGING DOWN INTO A LOSING trade is NOT something I teach. IT TAKES GREAT DISCIPLINE for a trader and you HAVE TO KNOW that you were WRONG, but you're LOOKING to get even at a LEVEL, then CUT AND RUN.

Jane Fox : 12/9/2008 2:29:26 PM

Interesting - the VIX is not making new daily highs although the S&P futures are making new daily lows. Link

Jane Fox : 12/9/2008 2:28:26 PM

All Internals are bearish except for the TRIN. On days like this I will ignore the TRIN. Link

Keene Little : 12/9/2008 2:08:17 PM

We've got the breakdown and I suspect it will hit a few stops parked just below what was support. SPX 878-880 is the next level of support followed by 870.

Jeff Bailey : 12/9/2008 1:54:26 PM

DXY 85.76 +0.23% ...

Jeff Bailey : 12/9/2008 1:53:46 PM

FXY $108.24 +0.98% ...

FXE $129.42 -0.06% ...

Jeff Bailey : 12/9/2008 1:53:12 PM

dj- Dollar below Y92.0, Euro loses prior gains as stocks decline

Jeff Bailey : 12/9/2008 1:46:49 PM

FXY 108.19 +0.94% ... more of a negative for BROADER equity. But a close here is new 52-week high CLOSE.

Jeff Bailey : 12/9/2008 1:45:12 PM

Goldcorp (GG) $25.06 +4.06% ... was stopped long in personal account at $24.87.

Keene Little : 12/9/2008 1:44:41 PM

SPX has achieved two equal legs down for its pullback from its high near 11:00 AM at the same time it's testing yesterday afternoon's and this morning's lows. Watch for support to hold here, or not.

Jeff Bailey : 12/9/2008 1:43:38 PM

And I've booked some VERY nice gains from BULLISH trades here in the states.

Jeff Bailey : 12/9/2008 1:43:09 PM

But I'm about ready to call it quits anyway.

Jeff Bailey : 12/9/2008 1:42:44 PM

Now I'm doing something I'm pretty sure I really shouldn't be doing.

Jeff Bailey : 12/9/2008 1:40:09 PM

I would hate to think SNDK bulls triggered today's broader market weakness. (wink)

Jeff Bailey : 12/9/2008 1:39:33 PM

DDX.X 53.59 -2.02% ...

Jeff Bailey : 12/9/2008 1:37:39 PM

SNDK $9.57 +0.63% ... see 120-minute interval chart.

Jane Fox : 12/9/2008 1:36:48 PM

This sell off is exactly what the doctor ordered. It is orderly with no big spikes one way or the other. This is very healthy for the bulls.

Jeff Bailey : 12/9/2008 1:17:46 PM

OGZPY $15.95 -3.91% ...
CHL $51.50 -2.66% ... has been strong, seems to be driver.
PBR $20.26 +4.75% ...

Jeff Bailey : 12/9/2008 1:17:38 PM

I'm really starting to observe that the WEIGHTING in the ProShares UltraShort Emerging Markets (EEV) $61.02 +0.03% ... has changed NOTABLY among the #1, #2 and #3 weights I had shown in mid-November.

09/30/08 Weightings Link

Jeff Bailey : 12/9/2008 1:09:08 PM

ProShares Ultra Oil & Gas (DIG) $28.79 +5.26% ... I'm selling long in personal account at slight loss.

Jeff Bailey : 12/9/2008 1:05:28 PM

Now ... IF a trader is looking for a QQQQ pullback entry, or a short is looking for a pullback cover, where MIGHT VXN.X trade to from here?

Jeff Bailey : 12/9/2008 1:03:32 PM

QQQQ ... note that on 11/26/08 the QQQQ was trading around $30.00.

This should instill in traders that any volatility measure by itself does NOT necessarily equate to the PRICE of the corresponding index.

However, it DOES represent call buyers/put sellers vs. call sellers/put buyers.

Jeff Bailey : 12/9/2008 1:01:40 PM

VXN.X ... will also see that it has traded today right around its 11/26/08 relative low. See the "pattern" here?

Jeff Bailey : 12/9/2008 1:00:30 PM

Note: VXN.X 55.43 -3.04% ... WKLY S1 violated at 56.41. WKLY S2 53.87.

Might "make sense" as it relates to where QQQQ trades relative to its call/put open interest for December.

Jeff Bailey : 12/9/2008 12:59:13 PM

Max Pain Theory Levels (DIA, SPY, QQQQ, IWM, SMH, XLF, USO and GLD) ... as of 12/05/08 close. % Distance from yesterday's close Link

Keene Little : 12/9/2008 12:55:02 PM

The bounce off this morning's pullback low around 11:30 AM is looking like a correction so far. That suggests more downside this afternoon. But it still takes a break of this morning's low to prove that the bears are running with the ball. In the meantime the slow price action and sideways consolidation can be considered bullish.

Jeff Bailey : 12/9/2008 12:41:29 PM

Goldcorp (GG) $25.30 +5.06% ... making way above its WKLY R1 ($24.92) ... I'm going to suggest bulls raise stops to just below the WKLY R1.

Jeff Bailey : 12/9/2008 12:15:38 PM

VIX.X 56.84 -2.82% ... did see trade at WKLY S1 this morning. At this point ... "a kiss is just a kiss...."

Jeff Bailey : 12/9/2008 12:13:44 PM

10-year Yield ($TNX.X) ... up a fraction 0.5 bp at 2.739%, but holding above its WKLY Pivot. Needs to stay here for equity bulls in my opinion.

Jeff Bailey : 12/9/2008 12:12:50 PM

FXY $107.79 +0.56% ... still a bit of a "problem child" for equity bulls.

Jeff Bailey : 12/9/2008 12:12:07 PM

OK .... SMH, NDX/QQQ only equity-based in your pivot matrix that has seen a trade at WKLY R2 this week.

INDU, SPX, OEX and RUT.X came very close.

BIX.X not yet WKLY R1.

Jeff Bailey : 12/9/2008 12:07:22 PM

On a 120-minute interval, SMH's 150-day SMA $17.92. WKLY R2 at $17.52.

A weekly R2 this early in the week is a pretty good move.

Jeff Bailey : 12/9/2008 12:05:34 PM

Boy, the SMH has some volume today doesn't it? Makes sense at MONTHLY Pivot.

Jeff Bailey : 12/9/2008 12:02:03 PM

You can see it on the DAILY intervals too.

Jeff Bailey : 12/9/2008 12:01:34 PM

Click your majors on the 120-minute interval.

See the relative strength relative to your 50-pd, 150-pd and 200-pd SMA's of the DIA/INDU?

OK, probably some "profit" taking from bulls, or some angry bears at INDU/DIA 200-pd SMA and psycho 9,000/$90

Jane Fox : 12/9/2008 12:00:07 PM

WASHINGTON (MarketWatch) -- Congressional Democrats and the White House can reach a deal on a package to help the struggling Big Three automakers "within the next hour or so," Senate Majority Leader Harry Reid predicted Tuesday morning. Reid said there are two issues dividing the Bush administration and Democrats "but I think that they can be resolved." The Democrats' $15 billion loan plan to Ford , General Motors and Chrysler would give the government an ownership stake in the companies and limit executive pay and dividends.

Jeff Bailey : 12/9/2008 11:55:39 AM

CVX $55.50 +0.11% ... #3 inches green.

Jeff Bailey : 12/9/2008 11:55:14 AM

INDU 8,834 -1.12% ... notably weaker than other U.S. majors.

BIG 10 all red.

Jeff Bailey : 12/9/2008 11:52:33 AM

HUI.X +1.73% ...

THEN

GLD -0.31%
SLV -2.12%

Jeff Bailey : 12/9/2008 11:51:24 AM

OIX +1.00%

OIH +5.62%

XNG.X +3.28% ...

THEN

USO -2.65%
UNG -0.47%

Jane Fox : 12/9/2008 11:50:24 AM

Sen. Reid sees deal on auto recovery plan within hour.

Jeff Bailey : 12/9/2008 11:47:44 AM

From the "arm pit" at $10.94 was 11/05/08. Before it made its "head" at $7.55 that was 11/12/08. Maybe place SNDK "on the shelf" for five (5) trading days. On my calendar, for 12/16 and 12/17, I write the SNDK symbol. I'll set alerts at $9.64, $8.00 (just above $7.55).

Keene Little : 12/9/2008 11:45:22 AM

This morning's low was a test of yesterday afternoon's low (near 894) and held. That level is now a short term shelf of support. If it holds the bulls remain in control but if it breaks we could see 878-880 tested fairly quickly. But so far the bulls have the ball and the current pullback may yet lead to another daily high. The bearish divergences showing up at the new highs suggest caution and a need to protect any long profits you may be sitting on.

Jeff Bailey : 12/9/2008 11:43:50 AM

SanDisk (SNDK) ... OK, now that you may have taken a handsome gain, let's "zoom out" on SNDK. This is something I saw a couple of days ago too. 120-minute interval chart takes out further noise from the 60-minute. However, I'm still interested in stocks that treat me right. Link

Jane Fox : 12/9/2008 11:33:41 AM

Here are your overnight charts. Link

Jane Fox : 12/9/2008 11:30:38 AM

Internals have turned back bearish. Link

Jeff Bailey : 12/9/2008 11:26:17 AM

QQQQ 60-minute interval chart Link

OK, NEW bull not overly eager here. My opinion anyway. Still noting and measuring "violations" of the left shoulders. Here in QQQQ it would have been 1.58%.

Here today, we should be looking for stocks that are still in/at a double RIGHT shoulder formation. Have those stocks listed in our watch list. Ready to play, or play today.

Keene Little : 12/9/2008 11:03:59 AM

Watching the DOW here for some clues, to see if it's going to break above its 50-dma. It banged into it yesterday and is the only one in the red as it struggles with it today (near 8916).

Jeff Bailey : 12/9/2008 11:00:52 AM

SanDisk Nearing Reverse H/S Pattern Objective (update) Link

Jane Fox : 12/9/2008 10:55:58 AM

Jeff Macke from CNBC's Fast Money writes a column that I quite enjoy reading. His latest statement was of interest to me because I agree. "You can trade this market based on whatever you want. Stars, goat entrails, lunar patterns; they're all good to me. But "fundamentals"? You make that argument in my house and you've defined yourself as either a salesperson or lunatic. Honestly, it doesn't matter which either way I'm not interested."

Keene Little : 12/9/2008 10:38:08 AM

The 50-dma for SPX is currently near 926, about 15 points higher. It was last tested on the September 19th bounce after breaking on September 4th.

Keene Little : 12/9/2008 10:22:45 AM

NDX could first run into trouble 8 points below the 1270 target--its 50-dma is currently just below 1262. That dma hasn't been touched since it broke below it back on September 2nd.

Jane Fox : 12/9/2008 10:28:14 AM

The bulls are pulling the proverbial rabbit out of the hat. Ad line is now above 0 and the AD ratio is above 1.00.

Jane Fox : 12/9/2008 10:19:45 AM

Here is a story on Blagojevich's arrest. Link

Keene Little : 12/9/2008 10:19:43 AM

If the bulls are able to keep this rally alive today, and considering the techs will probably lead the way, the next upside target for NDX is at 1270 which is where the bounce off the November 21st low would achieve two equal legs up. That's currently about 35 points higher.

Jeff Bailey : 12/9/2008 10:17:07 AM

DDX.X 55.17 +0.85% ...

Jane Fox : 12/9/2008 10:17:03 AM

Internals are looking bullish but you have to take into consideration the AD line is under 0 and AD ratio is under 1.00. These two need to be, at a minimum, above those levels before you can say the bulls are in control. Until then the markets will remain choppy. Link

Jeff Bailey : 12/9/2008 10:16:33 AM

SanDisk (SNDK) alert! $10.27 +7.99% ... exiting remaining long as stock near's reverse h/s pattern objective.

Keene Little : 12/9/2008 10:10:44 AM

The techs are stronger this morning and that's bullish but so far the bounce off this morning's low is only a 3-wave move and as such just a correction. Whether it turns into something more bullish or not we'll have to wait and see. I still think we've got lower prices today.

Jane Fox : 12/9/2008 10:04:45 AM

WASHINGTON (MarketWatch) -- In a sign that further weakening may be in store for the U.S. housing market, an index of sales contracts on previously owned U.S. homes fell 0.7% in October from the prior month, the National Association of Realtors reported Tuesday. The index, which is considered a leading indicator of existing home sales, was down 1% from the prior year. Pending home sales in October were mixed regionally, with declines of 8.7% in the West, and 4.3% in the Midwest. Meanwhile, there were gains of 7.8% in the South, and 0.6% in the Northeast. The September pending home sales index was revised to a decline of 4.3% from a prior estimate of a 4.6% drop.

Jane Fox : 12/9/2008 9:51:28 AM

Dateline NPR - Illinois Gov. Rod Blagojevich arrested on corruption charges stemming from the selection of the successor to Obama's seat.

Jane Fox : 12/9/2008 9:48:44 AM

VIX is falling and is now back to yesterday's close. This is bullish but the AD line is still bearish giving us choppy markets.

Keene Little : 12/9/2008 9:44:48 AM

NDX has already broken yesterday afternoon's low and now is getting a little larger bounce back up (to close this morning's gap down?) but I suspect it will turn back down to a new daily low. Gap closure is down near 1180 (trading 1211 currently).

Jane Fox : 12/9/2008 9:43:41 AM

TEL AVIV (MarketWatch) -- Some major corporate credit unions, whose finances have been hurt by losses on mortgage-backed securities, are the subject of a federal rescue plan to be announced this week, The Wall Street Journal reported. The plan entails tapping a $41 billion lending facility that Congress made available to credit-union regulators in September, the Journal reported. Credit unions largely haven't received funds from the Bush administration's rescue packages, the paper said. These credit unions are member-owned cooperatives that, like banks, take deposits and make loans.

Jane Fox : 12/9/2008 9:41:26 AM

NEW YORK (MarketWatch) -- Illinois Gov. Rod Blagojevich has been taken into federal custody at his Chicago home Tuesday morning, according to a report from the Chicago Tribune, which cited an unnamed source. The newspaper said that the action comes amid allegations that pay-to-play politics could affect his pending choice of a Senate replacement for President-elect Barack Obama.

Jane Fox : 12/9/2008 9:38:14 AM

Illinois Gov. Blagojevich taken into federal custody: report

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

AD line is a bearish -1179 and the VIX jumped from a close yesterday at 58.40 to open at 59.45

Keene Little : 12/9/2008 9:28:01 AM

The overnight lows in futures are being tested after a pop up to highs around 6:00 AM. A drop below yesterday afternoon's lows would be a drop into yesterday's gap up and that would increase the likelihood of gap closure (near SPX 878).

Jane Fox : 12/9/2008 9:16:56 AM

Has anyone heard that Canada is undergoing a coup. The three opposing parties, Liberals, NDP and Bloc Quebequis formed a coalition to overthrow the minority Conservative government. Prime Minister Harper has closed parliament until January so the country can work things out. What I have been hearing is that Canadians are pretty upset about it all.

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

NEW YORK (MarketWatch) -- Canada's central bank cut its benchmark interest rate more than expected, reducing the overnight rate by 75 basis points to 1.50% because of the "weakening outlook for growth and inflation." Most analysts expected a rate cut of 50 basis points. After the rate decision, the Canadian dollar fell 1.4% against U.S. dollar, accelerating its earlier losses. "While Canada's economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity," the Bank of Canada said in a statement. The depreciation of the Canadian dollar will continue to provide an important offset to the effects of weaker global demand and lower commodity prices, the bank said.

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

With the news out from FedEX, Texas Instruments and Broadcom a consolidation at previous day highs has to be considered bullish. We have gained 21% since Turkey day and this market needs to consolidate or undertake a controlled retracement.

Controlled is not a word you could use with this market of late but volatility will settle down and we will get back to normal markets at some point. The sooner the better if we want any kind of sustained move up. Link

Jane Fox : 12/9/2008 9:05:54 AM

Good Morning all. The only economic report today that a trader should take note of and trade around is the pending home sales report out at 10:00ET.

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

Tuesday's pivot table: Link

I was looking for SPX to stall in the 914-917 area and it made it slightly higher Monday to 918.57. Close enough. It looks like a setup for a down day on Tuesday. Whether it only pulls back to around 870 (880 if the broken inverse H&S neckline holds on a retest) or drops further can't be known yet. The 60-min chart shows some possibilities for what's next: Link . Back below 840 would spell trouble for the bulls and of course below 818 would negate the bullish inverse H&S pattern that everyone seems to be watching (too many watching it?)

The daily chart shows how we could simply consolidate from here into February (if we don't head for a new low--light dashed line--from here). Link . The NDX daily chart continues to point towards the possibility that we'll see another new low this month before setting up a larger 4th wave correction: Link

Jeff Bailey : 12/8/2008 10:28:30 PM

Closing U.S. Market Watch at this Link

Volume picked up today with the NYSE reporting just over 6.5 billion shares changing hands. Advancers outpaced decliners by a 22:6 margin. New highs tallied 21 with new lows coming in at 75.

NASDAQ volume also brisk at 2.35 billion shares. Advancing issues totaled 2,096 with 812 decliners. 8 stocks achieved a new 52-week high, while 90 stocks traded a new 52-week low.

OI Technical Staff : 12/8/2008 9:59:59 PM

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