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Jeff Bailey : 12/17/2008 9:09:15 PM

Dec'08 Max Pain Theory tabulations Link

Jeff Bailey : 12/17/2008 5:47:52 PM

Closing Internals at this Link

Jeff Bailey : 12/17/2008 5:16:39 PM

Closing U.S. Market Watch at this Link

Keene Little : 12/17/2008 4:15:41 PM

Here's the updated SPX 60-min chart showing the key levels--919 to the upside with an upside target of 951 and 885 to the downside with a downside target of 851 if not 810. I'm continuing to watch RSI to see how it behaves around its uptrend line from November 21st. Link

Jeff Bailey : 12/17/2008 4:09:28 PM

DXY's 04:00 tick 78.58

Jeff Bailey : 12/17/2008 4:02:01 PM

Tomorrow's Econ Calendar Link .... any possible catalysts for strength/weakness?

Keene Little : 12/17/2008 4:01:58 PM

Feeling just a wee bit better about my short play now.

Jeff Bailey : 12/17/2008 3:59:04 PM

Hey! If SPX closes 910 ... DAILY R1 would be 920.59 to be exact.

Jeff Bailey : 12/17/2008 3:57:08 PM

Microsoft (MSFT) $19.84 -1.34% ... will hold bull overnight. Only bull trade I put on today.

Jeff Bailey : 12/17/2008 3:53:44 PM

When you look at it that way ... I just got me my "charts of the week!"

Keene Little : 12/17/2008 3:53:12 PM

I'm moving my stop to a new daily high. It's possible we're going to get a minor new high above the last bounce but not a new daily high. It's going to be close.

Jeff Bailey : 12/17/2008 3:51:42 PM

VIX.X Link

Jeff Bailey : 12/17/2008 3:51:09 PM

SPX Link

Keene Little : 12/17/2008 3:48:14 PM

They're trying their best to shake out the shorts before the close. I'm feeling like a dog tenaciously holding onto the end of the rope as it's whipped back and forth. I'm not letting go of it, yet.

Jeff Bailey : 12/17/2008 3:47:25 PM

That'd give DAILY's of 884.35, 895.68, Piv= 907.26, 918.59, 930.17 risk/reward assessments of holding a short overnight.

Jeff Bailey : 12/17/2008 3:45:11 PM

Maybe 907 assumption on SPX?

Jeff Bailey : 12/17/2008 3:42:02 PM

Daily S1 would be correlative with WKLY S2.

Daily R1 correlative with WKLY S1.

Jeff Bailey : 12/17/2008 3:40:28 PM

VIX.X daily's would be ... 47.75, 48.88, Piv= 50.53, 51.66, 53.31

Jeff Bailey : 12/17/2008 3:38:46 PM

Let's "assume" a 50.00 close on the VIX, see if there's any excitement in store for tomorrow.

Jeff Bailey : 12/17/2008 3:37:58 PM

very op-ex looking to me.

Jeff Bailey : 12/17/2008 3:37:21 PM

Internals don't suggest a new daily high coming during today's regular session.

Keene Little : 12/17/2008 3:33:31 PM

For the stock market that's all the bounce we should get so if short I'd lower my stop to just above that last bounce high near 3:15 PM (SPX 914.17). Any higher than that now and I'd say the chances for new daily highs would be good.

Keene Little : 12/17/2008 3:29:48 PM

Updating yesterday's daily chart for oil (CL contract, continuous, so January prices), it looks good for a continuation lower to a downside target near $33 where I'd be interested in looking for a longer term bounce to play. Link

Keene Little : 12/17/2008 3:27:40 PM

So far it looks like the bulls don't want to let go of this market (although threatening to roll back over as I type). A flat close is a win in their books, although a doji today could set up a reversal candlestick pattern with a red candle tomorrow. For now the bulls would prefer to view it as simply an indecision (consolidation) day and therefore a bullish continuation pattern, which it would obviously be if we get another positive day tomorrow.

Jeff Bailey : 12/17/2008 3:27:33 PM

CYC.X 491.72 +1.86% ... WKLY R1 holding support now, but no trade yet at reverse h/s pattern 61.8%.

Jeff Bailey : 12/17/2008 3:26:09 PM

NASDAQ a/d 1,582/1,277

Jeff Bailey : 12/17/2008 3:25:56 PM

NYSE a/d 1,746/1,269

Jeff Bailey : 12/17/2008 3:23:14 PM

The "simplicity" of VIX.X ... put selling/call buying makes VIX.X move UP. put buying/call selling makes VIX.X move DOWN.

Jeff Bailey : 12/17/2008 3:21:43 PM

Should check SPX too.

Jeff Bailey : 12/17/2008 3:21:27 PM

$3.55B put and $631.7M call

Jeff Bailey : 12/17/2008 3:20:14 PM

SPY $91.71 -0.18% ... with VIX.X lower how about $93 equivalents ...

Jeff Bailey : 12/17/2008 3:18:10 PM

XLF ... at $13 strike, $428.84M put equivalent. $46.27M call equivalent.

Jeff Bailey : 12/17/2008 3:15:05 PM

So 15 on 12/5 then 17 on 12/12 and 16 on 12/16

Jeff Bailey : 12/17/2008 3:14:23 PM

XLF $12.97 +0.30% ... At last night's close, Dec'08 "Max Pain" was $16.00

Jeff Bailey : 12/17/2008 3:11:26 PM

XBD.X 78.11 +1.53% ...

Jeff Bailey : 12/17/2008 3:10:47 PM

UYG $6.23 +1.30% ... hang in there bulls.

Jeff Bailey : 12/17/2008 3:10:04 PM

Don't forget those BIX.X 140.88 -0.09% .... sellers have been firm so far at MONTHLY Pivot.

Jeff Bailey : 12/17/2008 3:07:03 PM

C'mon Q $30.44 -0.39% and NDX 1,236.64

Jeff Bailey : 12/17/2008 3:06:25 PM

C'mon softy ... $19.86 -1.24% ...

Jeff Bailey : 12/17/2008 3:05:27 PM

Day trade shorts probably a bit "nervous" into the last hour.

Above WKLY P and Daily P with a/d line holding positive.

VIX.X 49.51

Jeff Bailey : 12/17/2008 3:03:50 PM

NASDAQ a/d 1,515/1,319

Jeff Bailey : 12/17/2008 3:03:37 PM

NYSE a/d 1,813/1,215

Keene Little : 12/17/2008 2:54:38 PM

A 62% retracement of this decline is at SPX 913.46 so anything above that would have me nervous about my short position. Otherwise the bounce is a correction of the decline and another opportunity to get short, stop at a new daily high.

Jeff Bailey : 12/17/2008 2:53:04 PM

Ah, but its option, futures triple witch week!

Jeff Bailey : 12/17/2008 2:52:35 PM

FXY 113.57 +1.08% ... "doesn't make sense" type of action.

Jeff Bailey : 12/17/2008 2:51:18 PM

You KNOW where the WKLY's are at.

Jeff Bailey : 12/17/2008 2:50:41 PM

VIX.X 50.16

Jeff Bailey : 12/17/2008 2:50:00 PM

And I'd SURE want to see it back below the DAILY Pivot. Sooner than later.

Jeff Bailey : 12/17/2008 2:49:19 PM

I'd probably give an ES short a little more room than the day's high. Not much more than WKLY R1 though.

Jeff Bailey : 12/17/2008 2:45:34 PM

Daily Pivot Levels yellow traded so far Link

Keene Little : 12/17/2008 2:33:59 PM

The uptrend line from Monday has now been firmly broken. If we get a bounce back up to it (about 915 at the moment) and it fails there, it will be another good short entry.

Keene Little : 12/17/2008 2:32:34 PM

It looks like we've topped. The size of the pullback here is larger than any of the others in the rally off this morning's low. Short against today's high is the recommended place to be for now.

Jeff Bailey : 12/17/2008 2:27:40 PM

SPY $91.88 ... after session high of 92.43

Jeff Bailey : 12/17/2008 2:27:13 PM

VIX.X 49.87 after session low of 49.48

Jeff Bailey : 12/17/2008 2:23:28 PM

02:00 Internals at this Link

Jeff Bailey : 12/17/2008 2:14:29 PM

Go ahead and color the DAILY pivot boxes.

Jeff Bailey : 12/17/2008 2:13:51 PM

10-year ($TNX.X) juuuuuuust under its DAILY S2. 2.203%

Jeff Bailey : 12/17/2008 2:12:45 PM

WKLY S2 1.33%

Jeff Bailey : 12/17/2008 2:12:27 PM

5-year Yield ($FVX.X) ... almost flat now. 1.34%

Jeff Bailey : 12/17/2008 2:07:03 PM

OK ... RUT.X has traded its QCharts WKLY R1 to the penny. MR traders take note. That's probably about all a bear will be willing to take from yesterday's FOMC.

Jeff Bailey : 12/17/2008 2:02:59 PM

Last night I posted the DAILY pivot levels ... just in case ...

Keene Little : 12/17/2008 2:02:47 PM

Updating the SPX 10-min chart shows the 5th wave up, with the upside target of 923.26, which should then be followed by at least a pullback to correct the rally from Monday. If it pulls back in a choppy sideways/down kind of move and holds above 890 then we'll now there's higher yet to go. But there is the risk from here that we'll start back down towards the bottom of the trading range over the next few weeks (so back to SPX 800 or a little lower) and because of that possibility I think it will be a good risk:reward short play setup. Link

Jeff Bailey : 12/17/2008 2:01:46 PM

Pivot traders ... KNOW where the VIX.X is at relative to SPX ... see the stagger? Make the correlation. You'll see what others don't

Jeff Bailey : 12/17/2008 1:58:39 PM

NASDAQ's NH/NL daily ratio 16.2% vs. yesterday's 2.9%

Jeff Bailey : 12/17/2008 1:58:10 PM

NYSE's NH/NL daily ratio 27.8% vs. yesterday's 19.7%

Jeff Bailey : 12/17/2008 1:57:19 PM


Jeff Bailey : 12/17/2008 1:57:05 PM

NYSE NH/NL 30:78

Jeff Bailey : 12/17/2008 1:56:25 PM

NASDAQ a/d 1,665/1,139

Jeff Bailey : 12/17/2008 1:56:08 PM

NYSE a/d 1,940/1,053

Jane Fox : 12/17/2008 1:53:42 PM

Jeff, if the VIX were not in sync with the other internals then I would say that could be the situation but when all the internals are in sync it is foolhardy to ignore the VIX.

Keene Little : 12/17/2008 1:52:33 PM

Good push by the bulls. Now if they could only get a little volume behind the move it could be believable. But if it's the 5th wave of the move up from Monday then it's typically weaker than the previous moves and is one of the reasons why we see negative divergences. SPX 923 remains a good upside target for this move and just trail your stop behind it.

Jane Fox : 12/17/2008 1:52:09 PM

I also see the AD ratio climbing and that is always bullish. There are times when the AD line is bullish but the ratio is flatlined, which is bullish in itself but when the ratio climbs with the line that just adds more fuel to the bulls powder keg.

Jeff Bailey : 12/17/2008 1:51:17 PM

Yes Jane ... think the OTHER side of the trade. NOT just a "I buy calls and I buy puts" ... Think about the "I sell calls and I sell puts" as it relates to VIX.X action and how an institutional trader MUST stay hedged.

Jane Fox : 12/17/2008 1:50:10 PM

... and the VIX is supporting the bullishness seen in the AD volume and AD line.

Jane Fox : 12/17/2008 1:49:35 PM

All I see Jeff if the S&P futures and VIX in sync and that tells me the VIX is "working" today.

Jane Fox : 12/17/2008 1:48:23 PM

The DOW and S&P futures have barely broken their respective overnight highs. The NDX has not yet but the Russell 2000 broke its ON high sometime ago (this is also on a 20 minute delay). Link

Jeff Bailey : 12/17/2008 1:46:34 PM

SPY $92.14

Jeff Bailey : 12/17/2008 1:46:02 PM

VIX.X 49.62 -5.25% ... edges below DAILY S1.

Jeff Bailey : 12/17/2008 1:44:50 PM

Jane ... I'd have to disagree. LOTS of NAKED CALLS out there.

Jane Fox : 12/17/2008 1:44:07 PM

Keene for sure one needs to put a little less emphasis on the VIX during OPEX week but it is telling us the bulls have the ball so far today. Link

Jane Fox : 12/17/2008 1:41:52 PM

The internals have taken a very bullish turn and I suspect a lot of buying into the close. Link

Keene Little : 12/17/2008 1:37:41 PM

The bearish divergence between yesterday's high and today's high is not bullish sign. This is opex and it can be held up but just slightly more buying pressure than selling pressure but at this point I do not trust the upside. Trading during triple witching opex week can be a little more difficult than usual because the technical indicators might not be quite as reflective of investor mood as much as just expiration settlements. I've found VIX to be a little less trustworthy during this week.

Jeff Bailey : 12/17/2008 1:36:03 PM

TM $68.63 -1.59% ...

EBAY $15.27 +0.65% ..

Jeff Bailey : 12/17/2008 1:35:25 PM

dj- Toyota turns to eBay to promote inventory of used vehicles

Jeff Bailey : 12/17/2008 1:32:25 PM

I really like this action into expiration with VIX.X 49.94 -4.64% and making way BELOW QR1 and M 38.2%.

Keene Little : 12/17/2008 1:30:59 PM

I can't say that I like the shape of this leg up (from a bullish perspective) so keep your stop relatively tight. The rising wedge idea may simply be morphing into a slightly larger wedge. Let it run to the upside if it will but at this point it really needs to take off to the upside in order to maintain a bullish wave count. A break below SPX 906 would be a sell signal from here. Updated 5-min chart: Link

Jeff Bailey : 12/17/2008 1:31:02 PM

IBM $87.16 +0.87% ... almost an exact match of CYC.X

#1 weight in your DIA/INDU/YM

Jeff Bailey : 12/17/2008 1:29:33 PM

DDX.X 55.17 +3.21% ...

Jeff Bailey : 12/17/2008 1:28:36 PM

CYC.X 490.37 +1.58% ... alert!

Keene Little : 12/17/2008 12:59:41 PM

A small rising wedge pattern for the bounce off this morning's low could be the 5th wave conclusion to the rally off Monday's low. A drop back down below 906 would now be bearish so if in a long play I'd raise my stop to there. Otherwise let this run to the upside. SPX 5-min chart: Link

Jane Fox : 12/17/2008 12:56:43 PM

NEW YORK (MarketWatch) -- Trading on the Toronto Stock Exchange remained halted on Wednesday afternoon, as a technical problem prevented quotes from being displayed, TMX Group Inc., the exchange's operator, said on its website. The problem started to occur around 9.15 a.m. Eastern, before the market opened, it said. There were no immediate estimates of when the problem would be solved and trading could resume. "Because the data feeds provide information to investors to guide their trading decisions, trading was halted to ensure market integrity," said Carolyn Quick, a TMX spokeswoman.

Keene Little : 12/17/2008 12:51:13 PM

One caution for those in bullish plays looking for higher prices--if SPX continues to hold its uptrend line today and makes another minor stab higher from here (could be just a retest of yesterday's high) it could result in the conclusion of the rally leg from Monday (with a truncated 5th wave rather than up to 923 as I showed earlier).

In the meantime, after a 3-wave pullback this morning (for wave A) and a possible 3-wave bounce off this morning's low (wave B) we could be due a 5-wave decline (wave C) with a downside target of 892.19 (for equality between wave A and wave C). A further downside target is near 881 but any drop below 885 would suggest a stronger decline in progress.

So oddly enough longer-term bulls want to see a bigger pullback to 892 from here and then continue higher. A minor push higher instead could finish the rally from Monday and lead to a much larger decline.

Keene Little : 12/17/2008 12:40:19 PM

SPX got up to 919.91, a few pennies shy of 011.02 and now looks like it may have topped right there. If it now drops below the low at 11:35 AM we'll be left with a 3-wave bounce off this morning's low which would indicate we'll either get another leg down as part of today's pullback correction or a continuation sideways. The bulls need to get back above yesterday's high from here to at least maintain a more immediate resolution. Otherwise the bulls will have to wait for this correction/consolidation to continue for a bit longer.

Jeff Bailey : 12/17/2008 12:33:26 PM

12:00 Internals found at this Link

Jeff Bailey : 12/17/2008 12:26:31 PM

USO $35.24 -3.29% ... session low so far $34.56 and did see momentary trade at M S1.

Jeff Bailey : 12/17/2008 12:23:19 PM

Analysis: NL= suggests bears continue to do some covering.

NH= suggests bulls starting to get a little confidence and stick with their few favorites.

Jeff Bailey : 12/17/2008 12:22:17 PM

NL at both exchanges continue to abate.

Jeff Bailey : 12/17/2008 12:21:55 PM

NASDAQ NH 7, so +4

Jeff Bailey : 12/17/2008 12:21:36 PM

NYSE NH match yesterday's

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

Nipping away at some MSFT

Keene Little : 12/17/2008 12:14:48 PM

The bulls are still trying here and we could see a stronger rally if this can push above yesterday's high. But if we're going to stay inside a sideways consolidation (which would still be bullish but not until later) watch for two equal legs up from this morning--SPX 911.02. If it turns back down from there then I would expect to see more consolidation into this afternoon.

Jeff Bailey : 12/17/2008 12:13:09 PM

SPX 907.08 -0.60% ...

Jeff Bailey : 12/17/2008 12:12:35 PM

VIX.X alert! 51.27

Jeff Bailey : 12/17/2008 11:47:13 AM

Not bullish for crude oil near-term (fundamentally)

Jeff Bailey : 12/17/2008 11:46:21 AM

In addition to some of Jane's posting on EIA figures ...

Crude Oil inputs fell by 415,000 bbls/day to 14.55M b/d. Percent Utilization of Operable Capacity fell to 84.12% from prior week's 87.44%.

My tabulated # Days of Supply of crude was unchanged at 21.8 days supply.

Jeff Bailey : 12/17/2008 11:42:35 AM

That's more of what I'd expect.

Jeff Bailey : 12/17/2008 11:42:00 AM

UPW $32.09 -4.04% ...

Jeff Bailey : 12/17/2008 11:40:53 AM

I was looking at my QCharts earlier and was evidently NOT getting a data feed and quoted YESTERDAY's price action and % change.

Jeff Bailey : 12/17/2008 11:40:15 AM

Correction! to earlier post. Utility HOLDRs (UTH) $93.35 -1.79% ...

Keene Little : 12/17/2008 11:36:30 AM

It looks like the news about Steve Jobs not participating in Macworld (and AAPL pulling out from supporting future shows) has spooked investors this morning--AAPL is down -7%. GOOG (-3%) and INTC (-3.3%) are not doing well either so some big guns are not helping the bulls' efforts this morning.

Jane Fox : 12/17/2008 11:22:40 AM

I am talking to my sister in Vancouver and she is telling me the TSX has been down for over an hour. No data available.

Keene Little : 12/17/2008 11:21:44 AM

I'd still be a little concerned about the upside potential if the uptrend line from Monday is broken, currently near SPX 900.

Keene Little : 12/17/2008 11:17:30 AM

SPX pushed marginally above the 10:00 AM high but the other indices have not done the same. But so far this morning's pullback is looking more corrective (suggesting higher prices) than the start of something more bearish. But another leg down as part of a larger pullback is equally possible. It's possible we're going to see the market go essentially flat following yesterday's rally, especially if we see the market start to get pinned early for opex (meaning lots of chop but no real direction).

Jeff Bailey : 12/17/2008 11:14:49 AM

ProShares Ultra Utilities (UPW) $32.33 -3.31% ... here were the weightings (I sorted by Market Value) at last night's close and there's more below row 5517. Link

Jeff Bailey : 12/17/2008 11:04:03 AM

Note the 5-minute interval volume in USO after the headline numbers? Somewhat "more" than other Wednesday reports, but "about right" into a termination.

This I view as "roll out" of a futures contract, take the same bias in the USO. This is why you want to benchmark the USO to terminations. ONCE everyone gets on the same side of the trade is when you start to get the trend reversals.

Jane Fox : 12/17/2008 11:00:28 AM

NEW YORK (MarketWatch) -- The Organization of Petroleum Exporting Countries has decided to cut its oil output by 4.2 million barrels a day, the Wall Street Journal reported on its Web site Wednesday. The reported cut is much bigger than what markets expected. Most analysts anticipated a cut of about 2 million barrels a day. On Globex, January crude futures were last down 59 cents, or 1.4%, to $43.03 a barrel.

Jane Fox : 12/17/2008 10:55:38 AM

OPEC decides to cut oil output by 4.2 mln barrels a day: WSJ

Keene Little : 12/17/2008 10:55:18 AM

The SPX 10-min chart shows the possibility for another high from here (green count) which has a Fib target of 923.26 where the 5th wave of the move up from Monday would equal the 1st wave. A rally above 907 would suggest that's what we'll see, even if it consolidates a bit longer first. Otherwise a break of its uptrend line, currently near 896 would be a heads up for further selling (dark red). A break below 885 would confirm we'll probably see a move back below last Friday's low. Link

Jane Fox : 12/17/2008 10:55:14 AM

NEW YORK (MarketWatch) -- Crude oil stocks rose by 89,000 barrels during the week ended Dec. 12, American Petroleum Institute (API) reported Wednesday. In a separate report, the U.S. Energy Information Administration reported that U.S. crude supplies rose by 500,000 barrels last week. API also reported that motor gasoline stocks fell by 1.6 million barrels last week and distillate stocks dropped by 597,000 barrels. In very volatile trading, January crude rose 62 cents to $44.27 a barrel on Globex.

Jane Fox : 12/17/2008 10:51:37 AM

The bulls continue to make their case for a rally into the end of the year; MACD has made two bullish divergences and you have a reverse head and shoulders. If these formations do not pan out then you know the bears are really really strong. Link

Jeff Bailey : 12/17/2008 10:51:34 AM

Not just today, but what has been underway for months.

Jeff Bailey : 12/17/2008 10:50:48 AM

Shocking to me the difference between the euro/$ and pound/$

Jeff Bailey : 12/17/2008 10:49:45 AM

FXB $154.63 -1.08% ...

Jeff Bailey : 12/17/2008 10:48:08 AM

Can check against "Max Pain" levels.

Jeff Bailey : 12/17/2008 10:47:53 AM

CVX $77.98 -1.35% ..

Jeff Bailey : 12/17/2008 10:47:39 AM

XOM $82.22 -1.10% ...

Jeff Bailey : 12/17/2008 10:47:23 AM

OIX.X 600.54 -0.51% ...

Jeff Bailey : 12/17/2008 10:46:44 AM

UCO $15.95 -1.11% ...

Jeff Bailey : 12/17/2008 10:46:26 AM

USO $36.07 -0.98% ...

Jeff Bailey : 12/17/2008 10:46:00 AM

Build was pretty much inline.

FXE has seen trade at its 150-day SMA, almost to the penny.

Oil bulls have gott'n what they "needed" in the euro/$, just not certain of post-termination bull roll.

Jeff Bailey : 12/17/2008 10:42:08 AM

Going to suggest a $15.30 stop on the UCO $15.72 -2.54% ... on the EIA headline numbers.

Jeff Bailey : 12/17/2008 10:37:49 AM

FXE $143.62 +1.47% ...

Jeff Bailey : 12/17/2008 10:37:33 AM

UGA $20.97 +1.05% ...

Jeff Bailey : 12/17/2008 10:37:20 AM

USO $36.25 -0.52%

Jane Fox : 12/17/2008 10:36:09 AM

This head and shoulder pattern has certainly played out. One way to short the US$ is with the UDN ETF, the Powershares short $ index. Link

Jeff Bailey : 12/17/2008 10:34:14 AM

ProShares Ultra Utilities (UPW) $32.31 -3.37% ... better check is weighting. This "doesn't make sense" for 200x BULL.

Keene Little : 12/17/2008 10:32:07 AM

Gold is rallying strong again as the dollar gets crushed. The fact that oil is not rallying is a bearish signal for that commodity.

Jeff Bailey : 12/17/2008 10:31:33 AM

Utilities HOLDRs (UTH) $95.05 +3.13% ... edging above its 50-day SMA. BIIIIIIIIIIG pennant-look to the daily interval bar chart. Could be a "hunger for yield" developing.

Jane Fox : 12/17/2008 10:31:24 AM

XHB is the S&P's Homebuilder index. Notice the nice little reverse head and shoulders and that it is trading above its 20MA. Link

Keene Little : 12/17/2008 10:31:17 AM

This morning's bounce high at 10:00 AM is an important level for the bears to hold now. Any bounce back above that level (SPX 907.17) would leave this morning's pullback as just a 3-wave correction. It could turn into a larger pullback but it would tell us we're probably not at the start of a more significant breakdown and that instead we'll see higher prices sooner rather than later.

Jane Fox : 12/17/2008 10:26:39 AM

So far today the DOW, S&P and NDX have all made new daily lows but the Russell 2000 hasn't, it made a higher low. Also the Russell's daily high broke its previous day high so if you want to take a long position the Russell 2000 is the index to use.

Jeff Bailey : 12/17/2008 10:26:15 AM

10:00 Internals at this Link

Jane Fox : 12/17/2008 10:20:35 AM

Crude is incredibly slow today waiting for the inventory report I suspect.

Jane Fox : 12/17/2008 10:19:08 AM

Markets are making new daily lows but the overnight lows are still intact. When the VIX and AD line/volume are at odds with one another it usually means the markets are choppy and that is exactly what we have today.

Keene Little : 12/17/2008 10:18:09 AM

The uptrend line from Monday's low is near SPX 895 so watch for a possible reversal of this morning's decline.

Jane Fox : 12/17/2008 10:07:40 AM

AD volume is making new daily lows so if you are long don't expect very much from your trade. VIX was making new daily lows but it has now retreated and heading upward. All I see is nondirection so far.

Keene Little : 12/17/2008 10:01:13 AM

The 30-year bond has been in a rising wedge pattern since October and poked out the top of it this morning. If this is the correct pattern then this morning's move is the throw-over that will lead to a reversal. It's obviously an early call since we haven't see a failure of this morning's rally yet but it will be interesting from here. If bonds continue to rally then we'll probably see a move up to the top of a parallel up-channel (instead of being in this rising wedge pattern). Daily ZB (30-year) chart: Link

Jeff Bailey : 12/17/2008 9:58:58 AM

How about them miners!

Goldcorp (GG) $32.98 +4.23% ... sold him a bit too soon eh? Taking a look above 150-day SMA and WKLY R2 here today.

Jeff Bailey : 12/17/2008 9:56:45 AM

HUI.X +2.51% and DJUSHB +1.37% ... only percentage gainers.

Jeff Bailey : 12/17/2008 9:55:55 AM

DDX.X 53.56 +0.20% ... inches green.

Jeff Bailey : 12/17/2008 9:55:31 AM

BIX.X $141.40 +0.26% ... inches green.

Jeff Bailey : 12/17/2008 9:49:40 AM

MBA's Weekly Application Survey Link

Jane Fox : 12/17/2008 9:45:39 AM

AD line is a bearish -1012 but the VIX is making new daily lows so this means choppy markets.

Keene Little : 12/17/2008 9:34:54 AM

Bonds have gone through the roof--looks like a blowoff move but now the question is, as with all blowoffs, where's the top?

Jane Fox : 12/17/2008 9:33:33 AM

SAN FRANCISCO (MarketWatch) - Motorola Inc. its U.S. pension plans and temporarily suspend all company matching contributions to the company's 401(k) plan. Motorola also said employees in many of its markets will not get a salary increase in 2009. The company's co-CEOs also will voluntarily take a 25% decrease in base salary in the same year.

Jane Fox : 12/17/2008 9:30:22 AM

LONDON (MarketWatch) -- Christopher Cox, the chairman of the Securities and Exchange Commission, admitted late Tuesday that the regulator had failed to act on warnings about the activities of Bernard Madoff stretching back nearly a decade.

In a statement Cox said an initial probe into how Madoff's alleged fraud remained undetected revealed "multiple failures" by the regulator to thoroughly investigate the former Nasdaq chairman and his firm.

"The Commission has learned that credible and specific allegations regarding Mr Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action," Cox said in the statement

Keene Little : 12/17/2008 9:30:17 AM

Equity futures are off their pre-market lows but we've got a negative start to the day which sets up a potentially bearish reversal. I'd be careful about buying the dip until we see what kind of pullback develops. For the moment I prefer the short side of the market against yesterday's highs.

Jane Fox : 12/17/2008 9:22:39 AM

WASHINGTON (MarketWatch) -- Filings to refinance existing mortgages paced a seasonally adjusted 2.9% increase in overall mortgage applications last week compared to the prior week, the Mortgage Bankers Association's latest survey showed.

Mortgage activity for the week ended Dec. 12 also increased 2.9%, on an unadjusted basis, from the same week last year. The MBA's survey covers about half of all U.S. retail residential mortgage applications.

Jane Fox : 12/17/2008 9:21:59 AM

The Russell 2000 retraced the least showing you it was the strongest market in the overnight session. Link

Jane Fox : 12/17/2008 9:04:25 AM

SAN FRANCISCO (MarketWatch) -- Apple Inc. stunned investors and the technology industry Tuesday by announcing that it's withdrawing from the annual gathering in San Francisco where the Silicon Valley icon has unveiled, often in dramatic fashion, its most successful products.

The Cupertino, Calif.-based company said late Tuesday that the upcoming Macworld Expo in January will be its last, and Chief Executive Steve Jobs will not give a final keynote at the event.

The news sent the company's shares down more than 5% after hours, underscoring the significance of Apple's decision. Shares later pared some losses, down 2.5% to trade at $92.91.

Jane Fox : 12/17/2008 8:57:30 AM

LONDON (MarketWatch) -- Saudi Arabia's oil minister Ali Naimi said Wednesday he expects the Organization of the Petroleum Exporting Countries to cut its output by two million barrels a day, according to a Dow Jones Newswires report. Speaking ahead of Wednesday's OPEC meeting in Oran, Algeria, Naimi added the kingdom is now producing 8.2 million barrels of crude oil a day, the report said. Crude oil prices rose, with light crude for January delivery up $1.32 at $44.92 a barrel in electronic trading.

Jeff Bailey : 12/17/2008 1:12:13 AM

Vincent! Nice trade.

((28 x 100) x $80 = $224,000.00 DIA equivalent leveraged.

Jeff Bailey : 12/17/2008 12:40:46 AM

IWM's Jan'09 "Max Pain" currently tabulated at $62.00.

Jeff Bailey : 12/17/2008 12:40:08 AM

QQQQ's Jan'09 "Max Pain" currently tabulated at $35.00

Jeff Bailey : 12/17/2008 12:39:03 AM

SPY's Jan'09 "Max Pain" currently tabulated at $90.

Hey! That's the neckline of the 60-minute interval h/s bottom.

Jeff Bailey : 12/17/2008 12:37:13 AM

DIA's Jan'09 "Max Pain" currently tabulated at $106.

Keene Little : 12/17/2008 12:21:06 AM

As writers for the OIN newsletters and Market Monitor, and making an attempt to teach other traders how to read the tea leaves and make profitable trades for themselves (instead of blindly following another trader's signals as other services provide) this is the kind of email that's gratifying to receive:

My first paid subscription trade was closed today (after a 2 week trial and paper trading) I bought 28 DIA Jan 80 calls at 7.60, closed today at 11. They correlate pretty well with your comments on going long or nearing resistance. I felt today's comments on 909.32, and previous comments about 914, were too risky for me so I sold, right or wrong, and I netted over $9,500! Vincent

That was a nice trade and the profit was taken when possible resistance was being reached. It shows discipline in taking money off the table rather than hold for a home run. While it's always fun to get a 3 or 4-banger now and again it's far better to make these kinds of consistent winning trades and let your account buid up over time. The hard part in making a number of winning trades is the complacency factor--don't make bigger and bolder bets because you think you can't lose and then abandon your stops at the worst time. Stay disciplined and follow your trading rules that are working for you. Well done, Vincent, keep up the good work and welcome aboard.

Have the rest of you signed up for the end-of-year special yet? I think that's the best deal I've seen in my 8 years with OIN.

Jeff Bailey : 12/17/2008 12:16:24 AM

Asian Markets: Mixed to higher. Link

Jeff Bailey : 12/17/2008 12:15:05 AM

YM off 93 at 8,798.

Jeff Bailey : 12/17/2008 12:13:56 AM

cl09f +0.81, or +1.85% at $44.41.

Keene Little : 12/17/2008 12:04:45 AM

Wednesday's pivot table: Link

The fact that SPX stalled at the 913 level following the FOMC announcement says we could see the sellers return with a vengeance on Wednesday. Short sellers helped spark Tuesday afternoon's rally but a lot of traders may give some thought to really how bearish the situation is when considering the fact that the Fed showed it's now panicking. They've pulled out all the stops and will do whatever they can to stop the deflationary spiral caused by the credit collapse. That should spark fear in the stock market once the hope gives way to reality.

The big question of course is how long hope will hold up before fear takes over again. If we see an immediate reversal back down early Wednesday then I think there's a good chance we'll see a move back down to SPX 847 (if not 806), shown in pink (and dashed) on the 60-min chart: Link

If the pullbacks remain relatively minor and choppy and stair-steps higher there's a good probability we'll see the market rally for the rest of the week as SPX works its way up to the 951 target (dark red).

Jeff Bailey : 12/17/2008 12:03:30 AM

Do see a BIX.X ... D R2/ W R1 correlation.

If buyers were to take that out, then WKLY R2. If that doesn't hold, then M R1/ Q Piv

Jeff Bailey : 12/16/2008 11:58:01 PM

Daily, Weekly, Monthly Index Pivot Matrix Link

Some "shock" and some "ah" today!

MOST traders/investors question an initial reaction to FOMC announcement. Pivot correlations help bring the DISCIPLINE.

BIGGEST shock for me so far is strength in the SMH (+11.85% Month to date). Today's high a penny shy of WKLY R1.

BIX +7.22% gainer on Week-to-date, but lag Month-to-date.

Jeff Bailey : 12/16/2008 11:00:27 PM

Madoff Fraud Nowhere Near $50 Billion (So Far) ... Link

Jeff Bailey : 12/16/2008 10:14:51 PM

EEV $49.00 -15.42% ... 200x BEAR emerging markets. Notable 52-week low.

CHL $55.22 +6.8%
OGZPY $17.10 +4.90%
PBR $25.86 +10.70%

Jeff Bailey : 12/16/2008 10:04:57 PM

US Steel (X) finished $40.25 +8.28% Link ... Since US Steel didn't trade $41.00 (was in a column of X Tuesday), the PnF chartist asks "did it see a 3-box reversal to 39, 38, 37?

Answer: Yes

Chart "O" from $39 to $37 then stop charting.

Note close.

Tomorrow (Wednesday), trader will ask. "Did US Steel trade $36?" (since in a column of "O" at tonight's close).

IF no, THEN ask, "did it see 3-box reversal back up to $40?"

IF yes, THEN chart "X"s to $40, perhaps higher.

ELSE, no meaningful price action.

OI Technical Staff : 12/16/2008 9:59:59 PM

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