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Jeff Bailey : 12/10/2008 4:33:40 PM

QQQQ $29.91 -0.33% ...
SMH $37.35 -0.45% ... INTC $14.20 -0.69% ...
MSFT $20.61 +0.04% ...

Jeff Bailey : 12/10/2008 4:03:56 PM

DXY's 04:00 tick 85.42

Jeff Bailey : 12/10/2008 4:02:29 PM

QQQQ $30.18 +0.56% ... can tie its "Max Pain" to "in the zone" of NDX.X

Jeff Bailey : 12/10/2008 4:01:12 PM

$BPNDX has to bee the bullish % of the week Link

Jeff Bailey : 12/10/2008 3:58:34 PM

To the close ... NDX.X has to be this week's Pivot Trader's chart of the week Link

Keene Little : 12/10/2008 3:57:43 PM

As we head into the close it becomes decision time as to whether or not to hold a short position overnight (or a long position for that matter). Based on the corrective form of the bounce off the lows near 2:30 PM my guess is that we're going to get another leg down tomorrow morning. The downtrend line from this morning's high is currently near SPX 904 and that's the line in the sand for the bears. Assuming we'll get the leg down tomorrow morning that's when I'll be looking for a long play to set up.

Keene Little : 12/10/2008 3:37:22 PM

The move down from yesterday's high is now looking like a double zigzag corrective move (two a-b-c's with an x-wave in between them). A parallel down-channel for the move down shows where the Fib projections for the move line up at 875 tomorrow near 11:00 AM). It takes a rally above today's high to negate this short-term bearish pattern. 10-min chart Link

Keene Little : 12/10/2008 3:17:13 PM

If SPX bounces above 898 it would have me thinking we're going to stay stuck inside a sideways consolidation (which would be bullish) for another day or so. Otherwise the current bounce off this afternoon's low continues to look corrective and points lower still. The 873-875 continues to be a good downside target if it drops back down. From there I'd be looking to buy it for another rally leg into the end of the week.

Keene Little : 12/10/2008 2:44:20 PM

The support near NDX 1200 is still being respected so another drop to it would likely spook those who bought it there (which is why multiple taps on support eventually break). This bounce needs to hold otherwise look for lower (still leaning that way myself).

Keene Little : 12/10/2008 2:36:52 PM

If you look at a 30-min chart of NDX you could say the past 3 days have built a little H&S top. The downside price projection from it is about 50 points which would have NDX dropping to 1150. I don't see that much downside potential for SPX but it will be worth watching NDX if 1200 gives way.

Keene Little : 12/10/2008 2:33:42 PM

NDX is still finding support at the lows of the past two days, essentially at the to of its gap up on Monday near 1203. There are probably more than a few stops just below 1200.

Keene Little : 12/10/2008 1:37:52 PM

If we get the 2nd leg down from yesterday's high, with a downside target near SPX 875, it could then set up the next rally leg to 973-975 (dark red on the 60-min chart). It takes a break below 850 for a bearish heads up. A rally into the end of this week would achieve a high within a potential turn window (Dec 12-15) and set up a bearish opex week. We'll have plenty of time to see how that scenario sets up, or not. 60-min chart: Link

Keene Little : 12/10/2008 1:18:16 PM

The current bounce should peter out around SPX 903 and then head lower again. The broken uptrend line from yesterday afternoon is near 906 so that's the upside potential for the bounce (for a retest and kiss goodbye setup).

Jane Fox : 12/10/2008 12:41:38 PM

The FED is expected to cut rates again next Wednesday heading for zero. The Fed funds rate is currently 1% but economic weakness may force the FED's hand to lower again, although it will probably have very little affect if any. Some economist say the FED will go all the way to 0% but the majority say no lower than 0.50%.

Look for a reprisal of the same language in the statement that you saw in statements from 2003 until 2005, words like "considerable period ." If that language reappears it could be controversial for many think that "considerable period" was instrumental in causing our current economic downturn.

Jeff Bailey : 12/10/2008 12:35:39 PM

I have a meeting to attend. I hope to return before the close.

Jeff Bailey : 12/10/2008 12:34:40 PM

Stocks Steady After Inventory Data Link

Keene Little : 12/10/2008 12:30:34 PM

Assuming the top of today's bounce is now in, another leg down to equal yesterday's pullback would have SPX targeting 875 (which would also close Monday's gap at 878.18).

Keene Little : 12/10/2008 12:28:15 PM

SPX has now broken below the bottom of the wedge (uptrend line from yesterday afternoon), confirming the bearish wedge pattern. Stop needs to stay at a new daily high for now until the first bounce turns back down for a new low.

Keene Little : 12/10/2008 12:22:24 PM

At 54 VIX is tagging its uptrend line from November 4th. Just as the stock market may be entering a sideways consolidation pattern the VIX could do the same and start to bounce back up from here.

Keene Little : 12/10/2008 12:19:14 PM

The top of the wedge for SPX is now near 909. A little throw-over finish could have it tagging 910. Stop on a short should be at 912. Good short play setup here.

Jeff Bailey : 12/10/2008 12:17:52 PM

oil has whipped higher.

Jeff Bailey : 12/10/2008 12:15:04 PM

VIX.X 54.49 -7.50% ... somebody coughed up a furball at 11:45 AM

Jane Fox : 12/10/2008 12:07:17 PM

The Plan could still get blocked in Congress. Speaking in an interview on CNBC on Tuesday, Sen. John Ensign of Nevada said he wanted to see a Chapter 11-like bankruptcy provision in the plan for the companies.

Jane Fox : 12/10/2008 11:52:20 AM

WASHINGTON (MarketWatch) -- Congressional Democrats and the White House reached a final deal to give $15 billion in loans to the struggling Big Three automakers, as a House aide said Democrats are working toward a vote Wednesday but some Republicans remained skeptical of the package.

The Associated Press reported that the deal reached between the negotiators would create a presidential-appointed "car czar" to dole out loans to the companies, with the power to force the Big Three into bankruptcy if they didn't cut deals with labor unions, creditors and others to restructure their businesses and become viable.

Stacey Bernards, a spokeswoman for House Majority Leader Steny Hoyer, said House Democrats are aiming for a vote Wednesday.

"We are working towards holding a vote today on the auto legislation but the timing is not definite," she said in an email.

Keene Little : 12/10/2008 11:50:07 AM

If the bearish rising wedge is the correct pattern look for failure of the bounce to be in the SPX 908-909 area.

Jane Fox : 12/10/2008 11:48:16 AM

It's been a tough day to trade. Link

Jane Fox : 12/10/2008 11:44:19 AM

The Dollar Index chart also has a very nice bearish MACD divergence.

Jane Fox : 12/10/2008 11:41:42 AM

Head and shoulders on the Dollar Index chart tells me if the neckline breaks we could get a very nice upside move in Gold. Link

Jeff Bailey : 12/10/2008 11:35:38 AM

UYG $6.31 +0.79% ... did "average up" in personal account at $6.38 just after 10:15 AM.

Jane Fox : 12/10/2008 11:34:08 AM

Now I am reading that hopes are fading for a vote today, whereas headlines on Marketwatch.com stated the bill was finalized. I will wait until I get details before I post anymore about it.

Jeff Bailey : 12/10/2008 11:33:46 AM

XLF $13.10 -0.15% ... after backfilling Monday's gap higher.

Keene Little : 12/10/2008 11:29:07 AM

The bounce pattern off yesterday afternoon's low could be forming a little ascending wedge and that would be bearish. It needs one more leg up inside, as shown on the SPX 5-min chart, and then a selloff. The top of the wedge is currently near 907.50. Any higher than 912 would indicate that we're likely into the next rally leg already. Link

Jane Fox : 12/10/2008 11:25:31 AM

The markets should be soaring but they are not even making new daily highs. Link

Jane Fox : 12/10/2008 11:19:51 AM

I am reading the Auto-Industry bailout bill has been finalized by the White House and Congressional Democrats.

Jeff Bailey : 12/10/2008 11:16:30 AM

QQQQ support at Dec. Max Pain may be firming.

Jeff Bailey : 12/10/2008 11:16:02 AM

VXN.X 55.26 -2.36% ... per yesterday's observation. Morning "pop" high prarie dogged WKLY S1, but call buyers/put sellers outnumbers call sellers/put buyers and VXN.X darted back lower.

Jeff Bailey : 12/10/2008 11:14:23 AM

VIX.X 56.84 -3.51% ... just kissed WKLY S1 again.

Jane Fox : 12/10/2008 11:11:30 AM

Keene, I agree the FED issuing debt is a slippery slope because they are not elected officials and that would be taxation without representation. Not sure I like that one little bit.

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

Interpretive neckline at $7.74, head $6.00. Gives pattern objective to $9.49

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

NVDA's Dec. "Max Pain" currently tabulated at $10.00.

Keene Little : 12/10/2008 11:08:23 AM

Interesting story that Jane posted (10:55 AM) about the Fed considering issuing debt. This is the process of monetizing the debt of the U.S. (and devaluing our currency). Treacherous waters they'd be entering.

Jeff Bailey : 12/10/2008 11:06:05 AM

See the "pattern" in NVDA?

Keene Little : 12/10/2008 11:05:48 AM

The daily chart for NDX shows the two likely scenarios as I currently see them. They both consider the bounce off the November 21st low as complete so any continuation higher would immediately have me reassessing the next move. But for now I see a drop back down as part of a larger sideways consolidation (dark red) or a drop to a new annual low this month (pink): Link

The 60-min chart shows some levels I'll be watching: Link . A further drop today would likely have NDX heading for gap closure at 1180. That would be a logical place to launch another rally leg if it gets there and finds support. Any push back above yesterday's high near 1252 would be bullish. A drop below 1130 would be bearish. In between could be chop.

Jeff Bailey : 12/10/2008 11:05:00 AM

NVIDIA (NVDA) $8.40 +7.55% .... looks to be a "driver" in the chips. WKLY R2 $8.36

Jeff Bailey : 12/10/2008 11:03:59 AM

Paccar (PCAR) $29.22 -3.88% ... Undercut but now above its WKLY R1 $28.99

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

Electronic Arts (ERTS) $16.41 -15.19% ... Below its WKLY S2 $16.62

Jeff Bailey : 12/10/2008 11:02:32 AM

Foster Wheeler (FWLT) $26.22 +11.43% ... above its WKLY R2 $25.92.

Jeff Bailey : 12/10/2008 11:01:55 AM

Focus Media (FMCN) $9.00 +24.30% ... above its WKLY R2 ($8.72)

Jeff Bailey : 12/10/2008 11:01:00 AM

NASDAQ-100 Heatmap Link

Jeff Bailey : 12/10/2008 10:56:29 AM

QQQQ $30.00 -0.03% ... Dec Max Pain
SMH $17.64 +1.20% ... stronger than I'd have thought.
MSFT $20.51 -0.43% ...

Jane Fox : 12/10/2008 10:55:37 AM

LONDON (MarketWatch) -- The Federal Reserve is mulling issuing its own debt for the first time in a move that would give it more flexibility to stabilize financial markets, The Wall Street Journal reported Wednesday, citing a person familiar with the matter. Government debt issuance is largely the job of the Treasury Department, but Fed officials are looking for new tools as the crisis drags on and have approached Congress about the idea, the Journal reported. It added the concept could include issuing bills or some other form of debt, but it isn't known whether the preliminary discussions will result in a formal proposal or Fed action. The Journal said one roadblock is that the Federal Reserve Act doesn't explicitly permit the Fed to issue notes beyond currency.

Jane Fox : 12/10/2008 10:43:42 AM

Sen. Reid says auto loan vote 'unlikely' Wednesday

Jeff Bailey : 12/10/2008 10:39:17 AM

USO $35.40 +2.75% ... was $36.00 on headline numbers.

Jeff Bailey : 12/10/2008 10:36:23 AM

GG $27.07 +10.31% ... blew out of all long yesterday.

Jeff Bailey : 12/10/2008 10:35:59 AM

GLD $79.15 +3.70% ... ~791.50 spot

Jeff Bailey : 12/10/2008 10:33:47 AM

FXE $130.37 +0.84% ... trades above its 50-day SMA for first time since falling below on 07/29/08

Jeff Bailey : 12/10/2008 10:32:35 AM

On Friday, FXE finished $127.32.

On 12/05/07 FXE finished $146.20

Jeff Bailey : 12/10/2008 10:31:36 AM

On Friday, USO finished $34.25.

On 12/05/07 USO finished $68.69.

Jeff Bailey : 12/10/2008 10:30:05 AM

If accurate, that would have stockpiles up 5.53% vs. year ago.

Jeff Bailey : 12/10/2008 10:28:20 AM

Forecast among analysts is 1.0M barrel build in U.S. crude oil inventory.

Jeff Bailey : 12/10/2008 10:26:27 AM

OIX.X 573.16 +3.79% ... WKLY R1 558.83, R2 at 594.05

Jeff Bailey : 12/10/2008 10:25:31 AM

USO $36.28 +5.31% ... probes WKLY Pivot first time this week.

Keene Little : 12/10/2008 10:24:18 AM

If SPX can get above 910 that would increase the chances that we've started another rally leg. In the meantime this morning's bounce may only be part of a larger pullback pattern to be followed by a steep drop towards 870.

Jane Fox : 12/10/2008 10:19:03 AM

Now the bulls are getting some traction.

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

VIX and AD line continue to tell me the bulls have the ball but they keep fumblining and the bears are very quick to pick it up. The result is a bloody match where no one wins.

Keene Little : 12/10/2008 10:13:54 AM

I've got my charts back and right now it's looking like we're getting more of a consolidation pattern since yesterday afternoon's lows than the start of another rally. If this consolidation results in another leg down we could see SPX drop towards the 870 level. For now yesterday afternoon's lows need to hold.

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

QQQQ $30.08 +0.23% ...
SMH $17.55 +0.68% ...

Jeff Bailey : 12/10/2008 10:08:35 AM

EEV alert! $58.00

Jeff Bailey : 12/10/2008 10:08:17 AM

TRINQ 0.97 +3.19% ... after gap open juuuust above WKLY Pivot.

Jane Fox : 12/10/2008 9:59:47 AM

My goodness the markets are skiddy this morning. VIX is making new daily lows AND the AD line is +1136 yet the futures are making new daily lows. Weird!!

Jeff Bailey : 12/10/2008 9:57:53 AM

DJUSHB 218.70 -2.65% ... sits on its 50-day SMA.

Jeff Bailey : 12/10/2008 9:52:42 AM

MBA's Weekly Application Survey Link

Jeff Bailey : 12/10/2008 9:51:16 AM

CHL $52.70 +3.63% ...
OGZPY $15.91 +2.31%
PBR $20.79 +6.88% ...

Jeff Bailey : 12/10/2008 9:50:06 AM

EEV $58.48 -7.93% ... have placed stop at $58.00

Jeff Bailey : 12/10/2008 9:48:40 AM

DryShips (DRYS) $11.63 +22.96% ... strong again today.

Jeff Bailey : 12/10/2008 9:47:17 AM

QQQQ $29.81 -0.66% ...

SMH $17.09 -1.89% ...

Keene Little : 12/10/2008 9:44:15 AM

I've lost my internet connection (TV as well so it's a Comcast cable problem somewhere). I don't have charts yet (in the process of switching over to my backup) so I'm currently flying blind.

Jane Fox : 12/10/2008 9:37:10 AM

AD line is a bullish +1224

Jane Fox : 12/10/2008 9:36:38 AM

VIX closed yesterday at 58.85 and opened this morning at 58.04

Jane Fox : 12/10/2008 9:30:06 AM

Crude is ripe for a bounce but timing that bounce has proven to be difficult. Notice how the magenta 20 day EMA seemed to be support all the way up earlier this year then resistance all the way down. I think waiting for at least a close above that MA would be prudent. Link

Keene Little : 12/10/2008 9:25:16 AM

We've got a sharp decline in bonds this morning and that could free up some cash to rotate into stocks (equity futures are up). But bonds and stocks have been rising together for the past two weeks so the rotation is not a given.

Jane Fox : 12/10/2008 9:22:18 AM

Here are your overnight charts. Nothing to exciting; a series of higher highs then consolidation, all pretty "normal." I suspect the AD line to open bullish but certainly not overly so. Link

Jane Fox : 12/10/2008 9:13:34 AM

The Big 3 and Government have agreed to a bailout package. $15 Billion in emergency loans will be made available under the watchful eye of a "car czar." All three will need to negotiate with labor unions, creditors and others then submit blueprints by March 31 to the czar, named by President Bush, showing how they would restructure themselves to ensure survival. If not, the emergency loans would be revoked, the companies cut off from further federal help, and the government overseer could order his own overhaul, including forcing them into bankruptcy.

Jane Fox : 12/10/2008 9:05:11 AM

Good Morning all - Economic reports out today include the 10:00 Wholesale Inventories

10:35 Crude Inventories.

2:00 Federal Budget Balance (HMMM this one will be interesting)

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

Selling a seat on the NYSE is one thing, but a Senate seat?

Jeff Bailey : 12/10/2008 12:38:06 AM

Illinois governor arrested ... Reuters Story Link

Jeff Bailey : 12/9/2008 11:28:52 PM

Closing U.S. Market Watch Link

Volume at the big board eased and was below recent session averages with 5.7 billion shares changing hands. Decliners outnumbered advancers by a 21:9 margin. There were 14 issues trading a new 52-week high and 89 issues trading a new 52-week low.

NASDAQ volume slightly above average at 2.33 billion shares traded. Decliners outnumbers advancers by a 19:9 margin. Six (6) issues traded a new 52-week high, while 94 issues traded a new 52-week low. NASDAQ's 5-day NH/NL ratio still unable to get back into X at 4.5% with a measure of 8.0% needed.

Keene Little : 12/9/2008 11:01:58 PM

Wednesday's pivot table: Link

If SPX can hold above 877 on any further pullback Wednesday morning it will have been able to close Monday's gap (877.81) and stay above the inverse H&S neckline. If that level breaks and 870 doesn't hold then I see the probability for a drop down to the 845 area where it could find support at its broken downtrend line from November 4th and its uptrend line from November 21st. Below that, confirmed with a break below 818, would be bearish. 60-min chart: Link

Assuming one of those support levels holds we should see another leg up into the end of the week (potentially setting up a reversal back down during opex week). The daily chart is a mess while trying to figure out the short-term moves in this market: Link . For now I'm thinking we'll see the market consolidate in a fairly wide but narrowing range as it forms a sideways triangle into February. It's clearly early to make that call but it would fit for a 4th wave correction.

The DOW's daily chart is a little different because I've changed the wave count for the move down to be a corrective count (instead of an impulsive 5-wave count). For now it doesn't change the short-term picture but it changes where the triangle started (the October 10th low) which means we could start the next leg down in late January/early February rather than late February. Lots of time between here and there to help figure it out. DOW daily chart: Link

OI Technical Staff : 12/9/2008 10:00:00 PM

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