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Jeff Bailey : 12/16/2008 9:57:07 PM

Dorsey/Wright major U.S. equity market bullish % table I track Link

Today's post regarding sector bell curve would be the BPALL.

Note: BPSPX still in column of "O" and "bull correction" status. Needs a 3-box reversing higher measure of 58.00% to get back to "bull confirmed" status.

May take the spread-triple top at 920 Link

Jeff Bailey : 12/16/2008 8:01:36 PM

Closing Internals at this Link

Jeff Bailey : 12/16/2008 5:52:04 PM

QQQQ ticking $30.36

Jeff Bailey : 12/16/2008 5:51:47 PM

Apple (AAPL) $95.43 +0.71% .... ticks lower at $90.05

Jeff Bailey : 12/16/2008 5:51:17 PM

dj- Apple To Pull Out of Macworld Expo After 2009

Jeff Bailey : 12/16/2008 5:50:48 PM

dj- Apple: Steve Jobs Won't Be Attending '09 Macworld

Jeff Bailey : 12/16/2008 5:48:04 PM

Closing U.S. Market Watch Link

Jeff Bailey : 12/16/2008 5:23:01 PM

A little bit more volume at the big board today. Just a tad over 6 billion shares.

Jeff Bailey : 12/16/2008 5:21:43 PM

Don't forget! Friday is triple witch expiration!

Jeff Bailey : 12/16/2008 5:21:24 PM

VIX.X 52.37 -7.73% ... edged lower and now sits on Q R1.

Jeff Bailey : 12/16/2008 5:20:05 PM

Updated 60-min interval SPX Link

Jeff Bailey : 12/16/2008 5:14:44 PM

OTC 10-week Bullish % (TWOTC) Link

Jeff Bailey : 12/16/2008 5:00:46 PM

NYSE 10-week Bullish % (TWNYSE) at last night's close had 30.41% of NYSE components ABOVE their respective 10-week (50-days) simple moving averages. Link

Jeff Bailey : 12/16/2008 4:44:10 PM

Wilshire 5000 (DWC) 9,118.57 +5.24% ... also closed above its 50-day SMA (9,044.87). Don't want to leave out the "broadest of broad"

Jeff Bailey : 12/16/2008 4:35:37 PM

NYSE Comp, INDU, SPX, OEX and NDX all close above respective 50-day SMA's.

Jeff Bailey : 12/16/2008 4:35:03 PM

Russell 2000 (RUT.X) 482.85 +6.69% ... Closes a smidge below its 50-day SMA (484.51)

Jeff Bailey : 12/16/2008 4:34:03 PM

NASDAQ Comp. (COMPX) 1,589.89 +5.40% ... closes a smidge above its 50-day SMA (1,587.57)

Jeff Bailey : 12/16/2008 4:23:21 PM

NASDAQ-100 (NDX.X) 1,243.49 +5.21% ... First daily interval close ABOVE QS2 since 11/13/08. Certainly a "chart of the week" again this week. That cat's on the couch! Link

Keene Little : 12/16/2008 4:21:15 PM

The updated SPX 60-min chart shows the key levels now at today's high for a continuation of the rally and 882 to signal the start of a deeper pullback. The upside target is 951 and the downside target is now 847, maybe 806. Link

Jeff Bailey : 12/16/2008 4:12:27 PM

DXY's 04:00 tick 79.98

Keene Little : 12/16/2008 4:03:51 PM

SPX made it up to the 914 area and this is the first Fib resistance level for it to hurdle. Next resistance level is near 933, at its downtrend line from October 14th, and then the 951 upside target. But rallying into the close sets up a potential reversal tomorrow from this 914 level.

Keene Little : 12/16/2008 3:59:48 PM

Haven't we seen this picture before (30-year bond weekly chart)? Oh yea, every other bubble that has popped in the last 8 years. Link

Jeff Bailey : 12/16/2008 3:58:41 PM

No trade(s) at WKLY R1 at this point.

Jeff Bailey : 12/16/2008 3:57:36 PM

BIX.X 139.00 +9.91% ... all equity-based index in Pivot Matrix currently above WKLY Pivots.

Jeff Bailey : 12/16/2008 3:55:45 PM

General Electric (GE) $18.03 +6.37% ... maintains '08 outlook. No '09 forecast.

Keene Little : 12/16/2008 3:49:40 PM

I must say I'm a bit surprised the stock market is reacting bullishly to the Fed's statement that they're interested in buying the long-term Treasury securities. This will supposedly be an attempt to drive rates lower since they won't be able to do anymore in that regard. But what it really accomplishes is a monetization of our debt which is one more step towards devaluing the dollar (which would obviously destroy all asset values and create a hyperinflationary problem, but one that I think will come after a nasty bout of deflation). Just more of that slippery-slope-of-hope rally kind of thing.

Jeff Bailey : 12/16/2008 3:49:50 PM

Fed Slashes Target to Range of 0%-0.25% Link

In Tuesday's statement, the Fed also said it is "evaluating the potential benefits of purchasing longer-term Treasury securities." When loans to Bear Stearns and American International Group are included, the Fed's balance sheet now tops $2.2 trillion, more than double where it was when Lehman Brothers collapsed in mid-September.

Jeff Bailey : 12/16/2008 3:46:46 PM

Caution: Regarding analysis of "deflation" betting. See FOMC statement.

Jeff Bailey : 12/16/2008 3:33:54 PM

USO $36.44 -1.08% ...

Jeff Bailey : 12/16/2008 3:33:35 PM

dj- OPEC Secy Gen: Approaching Consensus for 2 Mln Barrle/Day Cut

Keene Little : 12/16/2008 3:30:13 PM

The US dollar is getting crushed (deliberate destruction of its value by the Fed) and gold is rallying. But oil continues to hold back. We've got gold traders clearly betting on inflation coming out of all the Fed's efforts while the bond market is clearly betting on deflation. There are a lot of smart traders in each camp and it will be interesting to see who blinks first.

Keene Little : 12/16/2008 3:14:56 PM

There's something about the bounce pattern off yesterday's low that I don't like. Today's sideways consolidation looks more like a b-wave rather than a 2nd wave (which is how I labeled the previous green count on the SPX 10-min chart and which called for the rally up towards at least the 940 area). If the sideways consolidation is in fact a b-wave then I am looking for only one more leg up to finish the bounce. Equality in the a-b-c bounce off yesterday's low would be at 909.34. The 2nd leg up in the larger bounce off Friday's low would achieve 162% of the 1st leg up at 909.32. When I see close Fib correlation like this I'm on guard for a reversal there. 10-min chart: Link

Jeff Bailey : 12/16/2008 3:05:48 PM

03:00 Market Watch at this Link

Jeff Bailey : 12/16/2008 2:51:26 PM

IWM $46.50 +2.46% ...

Jeff Bailey : 12/16/2008 2:51:00 PM

RUT.X 464.77 +2.69% ... slips back under MONTHLY Pivot by a tad.

Keene Little : 12/16/2008 2:50:37 PM

SPX's 50-dma is at 902. The high so far is 899 and we're now getting a sharp pullback. This moving average has stopped rallies for the past week--this is the 5th attempt so we now what needs to be hurdled before the bulls can feel better about at least a larger bounce.

Jeff Bailey : 12/16/2008 2:49:50 PM

QQQQ $30.03 +2.98% ... session high so far $30.32. Dec'08 Max Pain theory tabulation right in here.

Jeff Bailey : 12/16/2008 2:45:10 PM

SPX 897.47 +3.32% ...

Keene Little : 12/16/2008 2:43:33 PM

I get the feeling the Fed just threw a Hail Mary pass. They've not only shot their remaining bullet (the rate cut) but they've also said they're going to do everything in their power (and if it's not in their power they'll create new power) to fight the slowing economy (really fighting deflation). They loosed their cannon on this problem and they've got very little else to show the market what more they can do. They've got their collective fingers crossed that someone will now catch the Hail Mary pass.

Keene Little : 12/16/2008 2:40:14 PM

It's looking good for the move up in stocks. The first upside target for SPX should be the 914 area. I want to see any pullback now hold above the uptrend line from yesterday's low, currently near 885.

Jeff Bailey : 12/16/2008 2:34:51 PM

FOMC 12/16/08 Statement Link

Jane Fox : 12/16/2008 2:33:49 PM

Well at least the cuts are done with and there will be no waiting to see what the FED does in January.

Jane Fox : 12/16/2008 2:33:14 PM

WASHINGTON (MarketWatch) - The Federal Open Market Committee Tuesday lowered its target for overnight interest rates by three quarters of one percent to a record low 0.25%. At the same time, the central bank released a statement that signaled an aggressive posture. It said it would keep rates low "for some time" and continue to expand its balance sheet to stabilize the economy. The vote to lower the Fed funds rate was unanimous. The move was expected as economic data over the last two months has show a sharp drop in activity.

Keene Little : 12/16/2008 2:32:00 PM

SPX quickly shot higher and tagged 891 (892.42 high so far). It needs to now hold above 882 to maintain a bullish price pattern otherwise it will look like the bounce peaked post FOMC. Bonds have streaked higher so fear of deflation in the bond market continues. That would clearly not be good for the stock market but that doesn't mean anything for the short term. We'll see how the day finishes in the stock market.

Jeff Bailey : 12/16/2008 2:26:41 PM

5-year yield darts lower by 6.0 bp to 1.428% ...

Jeff Bailey : 12/16/2008 2:26:18 PM

OIH 77.10 -1.02% ...

Jeff Bailey : 12/16/2008 2:25:38 PM

FOMC cuts FF target rate to 0.00%-$0.25 range!

Jeff Bailey : 12/16/2008 2:23:27 PM

10/29 02:00 Internals looked like this Link

Jeff Bailey : 12/16/2008 2:20:30 PM

02:15 PM U.S. Market Watch found at this Link

Jeff Bailey : 12/16/2008 2:18:17 PM

On 10/29/08 the Five-year yield ($FVX.X) finished 2.745%

Jeff Bailey : 12/16/2008 2:17:21 PM

On 10/29/08 the XLF closed $14.31

Jeff Bailey : 12/16/2008 2:16:31 PM

On 10/29/08 the GSG closed $38.19.

Jeff Bailey : 12/16/2008 2:14:36 PM

On 10/29/08 the SPX closed 930.09.

FOMC statement Link

Jane Fox : 12/16/2008 2:12:15 PM

Internals remain quite bullish but I would not be long nor short right now. Link

Jeff Bailey : 12/16/2008 2:09:37 PM

02:00 Internals at this Link

Jeff Bailey : 12/16/2008 1:51:12 PM

I know, from past observations, that some oil bulls got their heads handed to them when they discounted the euro's weakness.

Jeff Bailey : 12/16/2008 1:49:50 PM

FXE $138.43 +0.81% ...

Jeff Bailey : 12/16/2008 1:49:16 PM

I know, based on observation, the USO $36.23 -1.65% ... has NOT been able to see a 5-minute interval close above its DAILY Pivot $37.81 so far today.

Jeff Bailey : 12/16/2008 1:48:11 PM

We know our levels of Pivot support and resistance to test/trade against.

Jeff Bailey : 12/16/2008 1:46:29 PM

I get the feeling, based on observation that Keene is looking for OIL prices to fall and DRAG the SPX lower.

Jeff Bailey : 12/16/2008 1:45:17 PM

In the recent US Market Watch, you see the Oil Service (OIH) 76.50 -1.79% the only "red" ... you check against the BPOILS

Jeff Bailey : 12/16/2008 1:44:08 PM

The BPSEMI was 0-14%, its 22%-26% bullish (that's the percentage of stocks Dorsey/Wright classifies as SEMIconductor that have a "buy signal" associated with the PnF chart).

You know how INTC Link has been trading. Where its at in the pivots.

Jeff Bailey : 12/16/2008 1:41:58 PM

You know where MSFT is and how its been trading with the BPSOFT

Jeff Bailey : 12/16/2008 1:41:17 PM

You check in on US Steel (X) $37.01 -0.43% ... with sector bull % more "overbought" than others. You check its 50-day SMA ($35.27) and see where stock is RELATIVE to the SPX.

Keene Little : 12/16/2008 1:39:25 PM

Updating the SPX 60-min chart I'm showing the possibility for a stronger pullback to the 824-825 downside target (depending on where the current bounce finishes and then project an equal leg down as last week's decline), shown in pink. Link

The more short-term bullish possibility is shown in dark red that calls for a rally up to a Fib projection at 951 before rolling back over (as part of the large sideways triangle consolidation pattern that could play out into February).

As I had noted last night, I'm watching to see how RSI does around its broken uptrend line from November 21st. The bullish thing is that RSI has recovered above its broken uptrend line but is it hinting of rolling back over? I'll continue to watch this one for clues.

Jeff Bailey : 12/16/2008 1:38:30 PM

Maybe you're monitoring the sector action ... say 12/08/08 to last night's close Link

Jeff Bailey : 12/16/2008 1:29:49 PM

You KNOW where you are in the Pivots ... you're looking at the oscillators ONLY to push you in a direction.

SPX's DAILY Pivot is 870.42.

Jeff Bailey : 12/16/2008 1:28:47 PM

Maybe you think, based on observation, SPX currently "same" as 12/03/08 on 30-minute interval as it relates to oscillators.

Jeff Bailey : 12/16/2008 1:26:41 PM

SPX 30-minute interval chart Link

With a U.S. Market Watch. Same oscillators as 60-minute.

Jeff Bailey : 12/16/2008 1:13:33 PM

You got MSFT $19.38 +1.78% and you're wondering what the heck is up with the SMH $18.00 +2.68% ...

Jeff Bailey : 12/16/2008 1:11:47 PM

The QQQQ $29.73 +1.95% ... smidge above its WKLY Pivot. $30 strike in the way. LINE in the sand just above that.

Jeff Bailey : 12/16/2008 1:10:21 PM

And then you've got the VNX.X 53.36 -2.46% ... WKLY Pivot at 54.10

Jeff Bailey : 12/16/2008 1:09:13 PM

I don't know about you, but I'm not expecting the Fed to have ANYTHING positive to say today. ESPECIALLY if they cut the FF rate.

Jeff Bailey : 12/16/2008 1:07:54 PM

Could be a good "pulse" stock today on a post-FOMC

Jeff Bailey : 12/16/2008 1:07:12 PM

Satyam Computer Services (SAY) ouch! $5.33 -57.52% ...

Keene Little : 12/16/2008 1:05:53 PM

The pullback from this morning's high continues to support the idea we'll see price head higher into the FOMC announcement. But it will need to turn back up from here. If it continues to chop its way higher we could get the end of a small rising wedge pattern calling to finish the bounce off Friday's low (shown in dark red on the 10-min chart). The green wave count calls for a decline from here to near SPX 875 (some Fibs line up there for potential support) and then a reversal higher. Above 891 should be bullish and below 875 should be bearish. Chop in between. SPX 10-min chart: Link

Jeff Bailey : 12/16/2008 1:05:29 PM

SPX 60-minute intervals as "neutral" as "neutral" gets Link

STOCH saying "sell" in range. MACD saying "buy" in short-term trend. PRICE and WKLY/MONTHLY say "neartral" or flat. Small directional position only, with KEY SECTOR running your bias.

Jeff Bailey : 12/16/2008 12:57:43 PM

Mmmm ... should note SPX ... also right at upward trend (11/21/08 low to 12/05/08 pullback low) and 2nd "right shoulder"

Jeff Bailey : 12/16/2008 12:56:26 PM

QC's is 882.77 (pretty close for government work) ... regular session derived of course.

Jeff Bailey : 12/16/2008 12:55:46 PM

SPX 883.50 +1.71% ... a smidge above my tabulated WKLY Pivot (883.22)

Jeff Bailey : 12/16/2008 12:55:13 PM

VIX.X 55.70 ... my tabulated WKLY Pivot.

Jeff Bailey : 12/16/2008 12:50:00 PM

FXE $138.45 +0.83% ... that's ~1.3845

Jeff Bailey : 12/16/2008 12:49:31 PM

USO 60-minute interval chart. QCharts' WKLY Pivot Levels turned on. Dashed purple is that 11/20/08 Dec'08 termination benchmark. Link

Jeff Bailey : 12/16/2008 12:45:32 PM

12/10/2008 @ 10:18:59 @ $6.3794 to be exact

Jeff Bailey : 12/16/2008 12:44:53 PM

I should note: Had I "known" of the Madoff debacle, I probably wouldn't have "averages up" in the UYG the other day.

Jeff Bailey : 12/16/2008 12:39:34 PM

I should note that I do hold a bullish position in "oil" per one account Link

Sorted by Total Cost basis.

Jeff Bailey : 12/16/2008 12:27:55 PM

"It takes a village"

Jeff Bailey : 12/16/2008 12:27:44 PM

XBD.X 73.73 +5.23% ... WKLY Pivot just ahead (greater impact from GS) at $74.29.

Jeff Bailey : 12/16/2008 12:26:34 PM

UYG $5.465 +5.82% ... WKLY Pivot at $5.74

Jeff Bailey : 12/16/2008 12:25:49 PM

XLF $12.09 +3.95% ... WKLY Pivot $12.43.

Jeff Bailey : 12/16/2008 12:25:18 PM

Goldman Sachs (GS) $73.87 +11.16% .... continues to inch higher.

Jeff Bailey : 12/16/2008 12:22:22 PM

OIH's WKLY Pivot $76.30

Keene Little : 12/16/2008 12:21:43 PM

Adding my own assessment of the oil market to Jeff's analysis, I continue to see the possibility that we'll see oil drop to firmer support (uptrend line from 1998-2002) in the $32-33 area. It's interesting to see how oil (CL, continuous contract so currently the January contract is the front month) is following parallel trend lines to the downtrend line from July: Link . The bounce off its last low on December 5th looks very corrective (bear flag) which supports the idea that we'll see another low before potentially setting up a very good long play.

Jeff Bailey : 12/16/2008 12:21:42 PM

OIH 77.69 -0.26% ... sector loser. Only equity-based index in U.S. Market Watch current red.

Jeff Bailey : 12/16/2008 12:18:58 PM

I would think EQUITY traders would want "dollar index strength" to come from YEN weakness to start.

Euro strength bringing some strength to OIL would be "good" for INDU and SPX "heavy weights"

Jeff Bailey : 12/16/2008 12:17:29 PM

DXY 81.43 ... At/just BELOW WKLY S2.

Again, EURO and YEN are most heavily weighted.

Jeff Bailey : 12/16/2008 12:15:49 PM

OEX 426.55 +1.43% ... session high so far today (427.76) did see a "frog's hair" above my WEEKLY Pivot. Yesterday I noted the inability of THIS index to do so.

Jeff Bailey : 12/16/2008 12:10:09 PM

12:00 Internals at this Link

Keene Little : 12/16/2008 12:08:58 PM

We've got a small consolidation near the highs and ideally this will be followed by another minor push higher. That could then lead to a reversal and some stronger selling. But if SPX is able to rally above 891 and hold above 885 on any pullback we'd have a good chance of seeing the rally continue at least up to the 914 area. Any drop from here below 880 would suggest we've seen the day's high. But this is a very choppy market so stay cautious, especially as we get closer to the FOMC announcement (if that's what the market is waiting for).

Jeff Bailey : 12/16/2008 11:55:52 AM

I should note that LAST termination, I suggested BEARS start to get "flat" oil, or at least NOT add to short/bear positions.

Jeff Bailey : 12/16/2008 11:54:41 AM

Based on my analysis, "oil should firm" and USO as well as Nymex crude oil futures still BELOW prior termination benchmark, I'd only suggest 1/4 USO (bull) position.

OR ... 1/8 UCO position.

Jeff Bailey : 12/16/2008 11:52:06 AM

USE the LEVERAGED (bull/bear) ONLY as you would an OPTION.

Allows trader/investor to NOT TIE UP as much capital in ONE trade if they don't want to.

LEVERAGED derivatives are NOT an INVITATION TO OVERLEVERAGE and possible BLOW UP your account.

Jeff Bailey : 12/16/2008 11:50:43 AM

UCO $16.35 -1.38% ... 200x bull USO

Jeff Bailey : 12/16/2008 11:49:28 AM

USO $36.55 -0.78% ...

Jeff Bailey : 12/16/2008 11:49:02 AM

FXE $138.30 +0.72% ... that's roughly 1.3830

Jeff Bailey : 12/16/2008 11:48:36 AM

dj- Euro extends gains to $1.3800, more than 10-week high

Keene Little : 12/16/2008 11:45:17 AM

SPX will do battle with its downtrend line from last Monday, December 8th, at 887, only a point higher.

Jeff Bailey : 12/16/2008 11:42:36 AM

USO daily intervals. Dec'08 Nymex termination ties. MONTHLY and QUARTERLY Pivot retracement Link

Also note EURO PnF technical (break down) and (break out) bars on USO.

Jane Fox : 12/16/2008 11:40:31 AM

The VIX is actually making a move and breaking below its daily low.

Jane Fox : 12/16/2008 11:39:53 AM

Internals are quite bullish today. Link

Jeff Bailey : 12/16/2008 11:25:49 AM

Eur/$ Daily Intervals at 11:13:21 AM ET Link

Jeff Bailey : 12/16/2008 11:01:33 AM

With the euro having broken above some formidable near-term resistance last week, I'm looking for oil prices to begin to firm at these levels.

Jan'09 Nymex futures terminate on Friday.

Here is/was OI screen capture Link

Keene Little : 12/16/2008 11:00:45 AM

Price is chopping up and down but so far continues to support the idea we'll see higher prices, including SPX 891. But it appears so far that the market continues to mark time while waiting for the Fed (or something, maybe a sign that St. Nick will show up).

Jeff Bailey : 12/16/2008 10:59:25 AM

USO $36.32 -1.41% ... giving back early session gains.

Jeff Bailey : 12/16/2008 10:59:00 AM

Euro (spot) PnF chart Link

Jane Fox : 12/16/2008 10:55:43 AM

VIX is just as flat as the equity markets. Link

Jane Fox : 12/16/2008 10:52:45 AM

Here are your overnight charts and as you can see there is very little going on out there. It is really quite surprising we are waiting for the FED because we all know what it is going to do and that it will have little to no affect on our situation. Just goes to show old habits are hard to break. Link

Jeff Bailey : 12/16/2008 10:34:07 AM

I would have to think, based on past observation, that if Yen continues higher from here, it will weigh on broader market equity gains.

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

WKLY R1 $110.86.

Jeff Bailey : 12/16/2008 10:32:04 AM

Yen CurrencyShares (FXY) $110.91 +1.01% ... sits on MONTHLY R2 (110.76).

Jeff Bailey : 12/16/2008 10:26:10 AM

10:00 Internals at this Link

Keene Little : 12/16/2008 10:24:51 AM

The 30-year yield is now down to the Fib support area I've been eyeing for weeks--2.89-2.91%. This morning's low is 2.91% so it's tagged the upper side of that range and could be setting up for a bigger reversal (selling in bonds).

Keene Little : 12/16/2008 10:20:39 AM

This morning's rally looks like it's struggling. It might not be able to reach 891 the way it's looking right here. A break to a new daily low now would indicate we might have seen the high of the day already.

Jeff Bailey : 12/16/2008 10:12:21 AM

SMH $18.04 +2.90% ...

Jeff Bailey : 12/16/2008 10:12:07 AM

Intel (INTC) $15.00 +2.81% ... challenges the $15.00 strike.

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

GS $71.07 +6.89% ... probably the most focused of earnings and today's top story/event. #57 weight in SPX at this morning's open.

WKLY Pivot $70.67

Jeff Bailey : 12/16/2008 10:10:05 AM

That's an ES/SPY trader's "top 5" weights at this morning's open.

Jeff Bailey : 12/16/2008 10:09:33 AM

CVX $78.94 +0.93% ... WKLY Pivot $78.78

Jeff Bailey : 12/16/2008 10:09:05 AM

JNJ $58.64 +1.43% ... WKLY Pivot $57.81. R1 at $59.22.

Jeff Bailey : 12/16/2008 10:08:28 AM

PG $60.07 +1.19% ... WKLY Pivot $60.01

Jeff Bailey : 12/16/2008 10:08:07 AM

GE $17.34 +2.24% ... WKLY Pivot $17.62

Jeff Bailey : 12/16/2008 10:07:29 AM

XOM $80.94 +1.23% ... WKLY Pivot $79.95

Jeff Bailey : 12/16/2008 10:06:26 AM

SPX 879.72 +1.28% .... has battled WKLY Pivot/Monthly Pivot overlap resistance.

Jane Fox : 12/16/2008 9:49:14 AM

Goldman Sachs suffered its first quarter loss since it went public almost 10 years ago and what a loss it was - 48% year over year.

Jeff Bailey : 12/16/2008 9:43:58 AM

Goldman Sachs (GS) $69.79 +5.01% ... Earnings Press Release Link

Jane Fox : 12/16/2008 9:43:50 AM

THE CPI numbers out this morning fell at the fastest rate since 1932.

Jane Fox : 12/16/2008 9:36:26 AM

AD line is a very healthy +1215.

Keene Little : 12/16/2008 9:28:42 AM

It looks like we'll start the day with a continuation of the rally that started in the last hour yesterday. Let's see if the bulls can continue it after the open and drive SPX up to its 891 target.

Jane Fox : 12/16/2008 9:28:32 AM

WE all believe the FED will lower interest rates today and I'm sure we all believe it will be like pushing on a string. So the best we can hope for today is we get some kind of statement that the FED will pull out all stops in its quest to stabilize the financial markets. I am also reading where many think the wise thing to do is to make this the last cut and not drag it all the way out to January.

Jane Fox : 12/16/2008 9:05:24 AM

Just want to remind all the futures traders out there, if you trade the DOW, S&P, NDX or Russell 2000 you should be using the March (H) contract now.

Jane Fox : 12/16/2008 9:02:49 AM

Gold broke through resistance yesterday and confirmed the higher low with a higher high. I would sure like to see the MACD catch up and make a higher high as well. Link

Jane Fox : 12/16/2008 9:00:44 AM

Although Crude is hammering out a bottom, it is taking its sweet time about it. Link

Jane Fox : 12/16/2008 8:59:12 AM

It was not what you would call one of your more exciting overnight sessions but in any case the bulls had (have) control. How do I know this? Simple, higher highs and lows means the trend is up.

I suspect the AD line to open above 0 but not overly bullish because it is a hurry and wait for the FED day and until then not much will happen. Link

Jane Fox : 12/16/2008 8:44:53 AM

WASHINGTON (MarketWatch) - U.S. home builders threw in the towel in November, slashing construction of new homes far below the worst levels seen in 50 years, according to Commerce Department data released Tuesday.

New starts dropped an eye-popping 18.9% to a seasonally adjusted annual rate of 625,000, the lowest rate since the Commerce Department began keeping records in 1959. According to similar records kept elsewhere, it's the lowest pace of construction in the post-war period.

Starts were far lower than the 740,000 expected by economists surveyed by MarketWatch. The monthly percentage drop was the most since a 26% decline in March 1984.

Starts in September and October were revised lower. In October, starts were revised to a record-low annual rate of 771,000 from 791,000 previously

Jane Fox : 12/16/2008 8:42:17 AM

WASHINGTON (MarketWatch) -- U.S. consumer prices fell 1.7% in November, the Labor Department reported Tuesday. Economists surveyed by MarketWatch were expecting the CPI to drop by 1.4%. The core CPI, which excludes food and energy prices, was flat in November. Year over year, the overall CPI has risen 1.1%, while the core has risen 2%.

Keene Little : 12/15/2008 11:49:45 PM

Tuesday's pivot table: Link

We're definitely into the middle of some kind of larger corrective pattern and that leaves open multiple possibilities as to where the market is heading next. So for the time being I'm trying to determine where I think the market could run into support or resistance to help figure out the larger pattern. For now, with the type of corrective price action since Friday's low and assuming we'll get a continuation of the rally that started Monday afternoon, I think we could see SPX hit 891 Tuesday morning. Then it will be important to see how price behaves there.

If it manages to rally higher then we could still be in the wave pattern that calls for a move higher this week (it's going to take longer than I thought it would when speculating on the bullish possibility). The upside target in that case is up near 950, shown in dark red on the 60-min chart: Link . If it drops back down from the 890-891 area, we could see it head down to a downside projection near 825 (for two equal legs down from last Monday), shown in pink.

We'll have plenty of time to evaluate price action if either scenario plays out and right now the price pattern demands more price action before a determination can be made. One bearish thing to note is what's happening to RSI--after breaking its uptrend line from November 21st it came up for a retest and has so far failed (highlighted). I'll continue to watch this for clues. A rally up to 891 without RSI being able to get back above its broken uptrend line, followed by a turn back down in price and RSI, would be a bearish signal to expect the pink (or dashed line) scenario. Keep in mind that RSI usually leads the way when analyzing its behavior with the same trend lines on price.

Jeff Bailey : 12/15/2008 10:54:31 PM

Retail Gasoline Heat Map Link

EIA's Weekly Retail Gasoline and Diesel Prices Link

Jeff Bailey : 12/15/2008 10:45:19 PM

SPX recorded 0 new highs and just 3 new lows today.

RUT 1 new high and 26 new lows.

Jeff Bailey : 12/15/2008 10:45:13 PM

Closing Internals at this Link

Volumes very light at both exchanges. Especially for a triple witch week.

Jeff Bailey : 12/15/2008 10:36:45 PM

Closing U.S. Market Watch Link

OI Technical Staff : 12/15/2008 9:59:59 PM

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