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Jeff Bailey : 1/8/2009 5:58:57 PM

It looks like a lot of market participants may have been sitting on their hands today as volumes were light.

Take Wal-Mart (WMT) $51.38 -7.49% out of the mix and bulls had a pretty good day.

Jeff Bailey : 1/8/2009 5:55:14 PM

Closing Internals at this Link

Jeff Bailey : 1/8/2009 4:16:44 PM

Well, I left things as they were last night ...

Personal at the close Link

11:05 AM Link

PHF and SDD both moved a bit higher. SCO and DXO do their thing.

Not a "bad day" when SCO and DXO both up.

Jane Fox : 1/8/2009 4:10:01 PM

Tomorrow at 8:30ET we have the (drumroll please) Non-farm employment change and the unemployment rate which will be a market mover.

AT 10:00 it is the Wholesale inventories.

Jeff Bailey : 1/8/2009 4:06:59 PM

Of course ... USO looks to close $33.17

Keene Little : 1/8/2009 3:55:14 PM

As we near today's close I'm left with the sense that the bounce off this morning's low is a correction--lots of overlap between the highs and lows and it looks more like a bear flag than anything else. That has me leaning short heading into tomorrow. The tough part is whether or not to enter a new short trade at the end of the day.

While the corrective pattern suggests lower prices it doesn't mean we can't see a higher bounce first, such as an initial positive reaction to the jobs data (as in whew, at least it wasn't a million jobs lost). Perhaps a couple of put options to take home with you and then give them back right away tomorrow morning if the market is not tanking.

So far SPX has been banging its head on the downtrend line from October 14th, near 908, but is struggling. I still see upside potential to 914-915 but I had expected a cleaner rally leg up to it and so far it's been a lot choppier than that. That's what has me feeling a little more bearish about the bounce.

Jeff Bailey : 1/8/2009 3:54:24 PM

cl09g Link

Jeff Bailey : 1/8/2009 3:43:32 PM

And the trade blotter too.

Really shows how once you build some gains, you can take a little more risk.

Also, we've been there ... when your even for the month, or in the red, you've GOT to get back to even as a FIRST priority.

Jeff Bailey : 1/8/2009 3:41:36 PM

It is nearly impossible to teach account and trade management unless a trader reveals such personal information.

That's why I really liked the market monitor profiles $10,000.00 hypothetical account.

Jeff Bailey : 1/8/2009 3:37:05 PM

Having exited PARTIAL SCO yesterday for a decent gain, CURRENT weight on CURRENT value of SCO/DXO weighted about +30% greater in SCO than DXO.

Jeff Bailey : 1/8/2009 3:31:38 PM

That's about where I'm at ... about 15% more total cost SCO than DXO total cost.

Jeff Bailey : 1/8/2009 3:30:26 PM

I'd have to say market "neutral" to weighted short oil.

Jeff Bailey : 1/8/2009 3:27:53 PM

Nymex Crude Oil settles $41.70

Jeff Bailey : 1/8/2009 3:25:53 PM

Maybe was thinking ... RUT.X will easily be below WKLY Pivot ...

Jeff Bailey : 1/8/2009 3:24:48 PM

Getting a feeling there might be some bears that were "front running" Friday's jobs report. Maybe not going exactly as planned?

Jeff Bailey : 1/8/2009 3:23:54 PM

XAL.X $26.29 +0.80% ... presses best levels.

Jeff Bailey : 1/8/2009 3:23:20 PM

BTK.X 651.22 +0.73% ... presses best levels.

Jeff Bailey : 1/8/2009 3:23:01 PM

DDX.X 61.57 +2.49% ... it broke earlier session high. Go figure ...

Jeff Bailey : 1/8/2009 3:21:27 PM

SDD $62.72 -0.29% ...

Jeff Bailey : 1/8/2009 3:21:01 PM

RUT.X 499.08 +0.39% ... after a kiss-back of DAILY Pivot.

Keene Little : 1/8/2009 3:17:11 PM

My take on USO is bearish at the moment although I see the likelihood for a bounce over the next day or two. The drop from Tuesday's high looks impulsive and that means we should expect a correction of that decline but then a resumption of the decline to new lows. Today it dropped down to its uptrend line from the December 26th and 31st lows so it's a good place to get the bounce (perhaps back up to about 35) before continuing lower again.

Jeff Bailey : 1/8/2009 3:16:17 PM

USO 10-minute interval chart at the Dec termination benchmark Link

Jeff Bailey : 1/8/2009 3:11:07 PM

I've got my volume turned on again today. Don't see the build like 12/31/08 at this point.

Jeff Bailey : 1/8/2009 3:08:43 PM

USO $32.94 -0.99% ....

Jeff Bailey : 1/8/2009 3:08:04 PM

Now's when a USO short starts thinking about the CYC.X technical from a couple of weeks ago.

Jeff Bailey : 1/8/2009 3:06:41 PM

DXO $3.02 +0.33% ...

SCO $29.76 +1.57% ...

Jeff Bailey : 1/8/2009 3:05:52 PM

USO alert! $33.06 -0.66% ...

Jeff Bailey : 1/8/2009 3:01:22 PM

RUT.X 499.17 +0.41% ...

Jane Fox : 1/8/2009 3:01:14 PM

This has been another tough day to trade because there was very little follow-through in any direction. The internals have been all over the place but are now starting to show some direction and it seems to bullish. Link

Jeff Bailey : 1/8/2009 3:00:22 PM

Broader equities improved when CNBC first mentioned at 02:51 PM ET, but C hasn't that much.

Jeff Bailey : 1/8/2009 2:59:22 PM

Citigroup (C) $7.16 +0.13% ...

Jeff Bailey : 1/8/2009 2:59:01 PM

DJ via CNBC - Citigroup Endorses Mortgage Modification Deal

Jeff Bailey : 1/8/2009 2:56:51 PM

OIX.X 614.56 +1.62% ...

USO $32.83 -1.32% ...

Jeff Bailey : 1/8/2009 2:55:48 PM

Fair Value for the INDU today is/was -39.97

Jeff Bailey : 1/8/2009 2:54:51 PM

INDU 8,724

Jeff Bailey : 1/8/2009 2:54:38 PM

YM 8,679 now ...

Jeff Bailey : 1/8/2009 2:54:07 PM

NASDAQ a/d 1,487/1,244

Jeff Bailey : 1/8/2009 2:53:55 PM

NYSE a/d 1,624/1,365

Jeff Bailey : 1/8/2009 2:52:33 PM

Don't know of any "Costa Rica" stocks offhand.

Jeff Bailey : 1/8/2009 2:51:45 PM

dj- Strong 6.2 quake shakes Costa Rica- USGS

Jeff Bailey : 1/8/2009 2:51:02 PM

Citigroup (C) $7.16 +0.13% ..

Jeff Bailey : 1/8/2009 2:49:59 PM

Pretty good late session soap opera developing ...

Jeff Bailey : 1/8/2009 2:49:35 PM

USO $32.76

Keene Little : 1/8/2009 2:49:22 PM

That quick dip and then even quicker reversal bakc up to a new daily high is the kind of volatility that makes the Thursday prior to opex a little tougher day to trade. It's why I wanted to get flat and just watch to see what sets up next.

Jeff Bailey : 1/8/2009 2:48:04 PM

YM 8,661

Jeff Bailey : 1/8/2009 2:47:16 PM

YM short stop alert! 8,646

Jeff Bailey : 1/8/2009 2:46:38 PM

I "took a chance" by shorting right at the Daily S1 from above it.

Jeff Bailey : 1/8/2009 2:45:52 PM

YM 5-minute with PINK "dynamic" Link

Jeff Bailey : 1/8/2009 2:43:03 PM

USO $32.73 -1.62% ...

Jeff Bailey : 1/8/2009 2:42:48 PM

UGA $20.70 +0.19% ....

Jeff Bailey : 1/8/2009 2:40:50 PM

100% being at the low of the session.

Jeff Bailey : 1/8/2009 2:40:34 PM

61.8% at 8,645

Jeff Bailey : 1/8/2009 2:40:16 PM

Slap you dynamic on the YM too.

Jeff Bailey : 1/8/2009 2:39:38 PM

Otherwise, we try and "scalp" what we can.

Jeff Bailey : 1/8/2009 2:38:58 PM

IF we're to have a shot at DAILY S2.

Jeff Bailey : 1/8/2009 2:38:35 PM

YM day traders ... watch the Stochs on the 5-minute interval. PRICE needs to be back near the session lows as it gets to 20-ish.

Jeff Bailey : 1/8/2009 2:37:06 PM

USO $32.62 ...

Jeff Bailey : 1/8/2009 2:36:45 PM

YM short lower stop alert! ... to 8,646

YM 8,634

Keene Little : 1/8/2009 2:36:36 PM

No follow through to the upside (Jeff's got the right idea). I'm getting that sideways feeling here, which is bearish even if not right away.

Jeff Bailey : 1/8/2009 2:35:29 PM

YM short lower stop alert! ... to even.

YM 8,635

Jeff Bailey : 1/8/2009 2:34:09 PM

YM 8,640

Jeff Bailey : 1/8/2009 2:31:35 PM

YM short doesn't want to see it start lingering around DAILY S1 either.

Jeff Bailey : 1/8/2009 2:30:48 PM

YM short ... stop goes 8,681. Target is 8,570 max.

Jeff Bailey : 1/8/2009 2:29:26 PM

YM short alert! 8,655

Jeff Bailey : 1/8/2009 2:24:50 PM

Like a good Soap ... you think you know how it is going to end, but you stick around to find out.

Jeff Bailey : 1/8/2009 2:24:04 PM

About the only "drama" I see today is where oil settles and closes.

Jeff Bailey : 1/8/2009 2:23:18 PM

OIX.X 611.67 +1.14% ...

USO $32.37 -2.70% ...

Jeff Bailey : 1/8/2009 2:19:56 PM

02:00 Internals at this Link

Keene Little : 1/8/2009 2:16:38 PM

Upside targets for NDX's bounce are 1244 (two equal legs up from this morning's low), near 1248 (38% retracement of yesterday's decline) and then 1255 (50% retracement and it's where the 2nd leg of today's bounce would equal 162% of the 1st leg).

Keene Little : 1/8/2009 2:14:15 PM

SPX didn't make it down to 896 but it's certainly looking like a successful test of this morning's low, with bullish divergence. Upside target is 914-915. It could end up being an interesting setup this afternoon since a rally into the close would be a very good setup for a short play heading into tomorrow morning's jobs number.

Jeff Bailey : 1/8/2009 1:55:37 PM

Maybe check out the OEX on 60-minute interval. 200-pd SMA at 424.795.

Jeff Bailey : 1/8/2009 1:54:37 PM

At this point, 425.32 is NOT 425.00.

Jeff Bailey : 1/8/2009 1:54:06 PM

OEX 426.92 Link

Jeff Bailey : 1/8/2009 1:53:31 PM

European Markets: finished somewhat lower Link

FTSE-100 off a smidge at 4,505 Link

Jeff Bailey : 1/8/2009 1:50:20 PM

Jane noted this morning that the BOE lowered its key interest rate again.

Pound as depicted by the FXB $151.90 +0.54% modestly higher. Kind of a "Santa Claus" rally too. The "pound was pounded" in 2008.

Jeff Bailey : 1/8/2009 1:47:08 PM

earlier- OPEC EXPORTS SEEN DOWN IN 4 WEEKS TO JAN 24

DJ- Crude oil exports from OPEC, excluding Angola and Ecuador, are forecast to fall by 210,000 barrels a day in the four weeks to Jan. 24 compared with the previous four-week period, U.K.-based tanker tracker Oil Movements says.

Jeff Bailey : 1/8/2009 1:46:08 PM

Intel (INTC) $14.42 -0.13% ... hold'n tough.

Jeff Bailey : 1/8/2009 1:44:57 PM

earlier- MICROSOFT WINS KEY SEARCH DEALS

DJ- Microsoft, facing a bleak economy and rivals that have outflanked it in the consumer market, announces a milestone for the next version of Windows and a raft of deals designed to boost its online-search business. CEO Steve Ballmer also strikes any possibility of a Yahoo deal.

MSFT $19.87 +1.84% ...

Jeff Bailey : 1/8/2009 1:43:55 PM

FHL BANKS MAY FACE WRITE-DOWNS ON $76.2B IN MBS

DJ- Moody's says the Federal Home Loan Banks, a prime source of funding for U.S. banks, may see their capital fall below regulatory minimums as they face possible write-downs on their $76.2 billion private-label mortgage-backed securities portfolio.

Jeff Bailey : 1/8/2009 1:37:59 PM

USO $32.21 -3.18% ...

Jeff Bailey : 1/8/2009 1:37:14 PM

This morning I was looking for a bounce back to the OVERLAP DAILY/WKLY Pivot to set up a short. Just didn't happen.

Jeff Bailey : 1/8/2009 1:36:18 PM

YM 5-minute interval with regular session derived DAILY (brown) and WKLY (blue) Link

Keene Little : 1/8/2009 1:27:09 PM

In the A-B-C bounce pattern as I just described, the C-wave would have an upside Fib projection near SPX 914.

Keene Little : 1/8/2009 1:25:46 PM

The reason I'm not interested in chasing this down on the short side is because I see the potential for just a minor new low near SPX 896 (two equal legs down from this morning's bounce) and then a sharp rally back up from there. That would be wave A up this morning, wave B pullback in progress and then wave C up this afternoon. In fact I could be tempted to try that long play.

Jeff Bailey : 1/8/2009 1:22:04 PM

INDU 8,660

Jeff Bailey : 1/8/2009 1:21:53 PM

YM 8,615

Jane Fox : 1/8/2009 1:20:44 PM

The latest nonfarm payrolls report is due out on Friday and analysts surveyed by Briefing.com forecast that 475,000 jobs were shed in December, slightly fewer than November's

Keene Little : 1/8/2009 1:17:01 PM

Not looking good for the bounce. I'd go flat here and watch for a little while. We might do a sideways consolidation or drop a little lower to the uptrend line from November 21st, near SPX 891.

Jeff Bailey : 1/8/2009 1:16:28 PM

Some things NEVER change ... back when I worked for Mobil, when prices were high we were drilling and pumping.

When prices were low, THAT was the time for science. (shoot seismic, repair/upgrade facilities, computer model.)

Jane Fox : 1/8/2009 1:12:51 PM

WASHINGTON (MarketWatch) -- President-elect Barack Obama on Thursday urged Congress to get down to work on a massive stimulus plan of new spending and tax cuts, conceding the package would be costly in the short term but needed in the long haul to head off potential double-digit unemployment and other dire consequences for the country.

Jeff Bailey : 1/8/2009 1:12:16 PM

dj- Exxon Mobil CEO: Falling oil prices creating capex opportunities

Jeff Bailey : 1/8/2009 1:08:57 PM

In last night's market wrap, I reviewed and made some observations regarding the SPX.X and its MONTHLY/QUARTERLY. The "reason" I decided yesterday to mention a bearish play in a RUT.X-related based somewhat off of SPX, but also Tuesday's trade at QRTRLY Pivot, then some weakness at yesterday's open.

Today, I note RUT.X has not been able to yet trade its WKLY Pivot. That's about an overlap support with the MONTHLY 493.49 and the modified upward trend.

Stochastics here would suggest an 'upper-end' of range.

Still, the trend is the bulls friend and MACD still above zero (0) but rounding a bit.

Jeff Bailey : 1/8/2009 1:04:05 PM

RUT.X daily intervals with its MONTHLY (dark purple) and Quarterly (dark green) Link

Keene Little : 1/8/2009 12:59:02 PM

It's not much but I'd raise the stop on a long play to just below the pullback low just before 12:00 PM (SPX 898.88). Any drop back below that low would very likely bring new daily lows.

Jeff Bailey : 1/8/2009 12:44:29 PM

DIA's "Max Pain" was still $100.00

DIA $86.87 -1.12%

Jeff Bailey : 1/8/2009 12:41:03 PM

Oh ... OK ... Tuesday's session high of $38.75. That's pretty darned close to $39.00.

Jeff Bailey : 1/8/2009 12:39:55 PM

USO $32.47 -2.40% .... At $32, Put OI= $575.8 million. Call OI= zip, zap, zilch.

Keene Little : 1/8/2009 12:38:04 PM

Market needs to get up and go here otherwise another drop lower would likely mean new daily lows. Even the bond market is just whacking around this morning (and yesterday). In fact the bond market looks like it will get another leg down soon (they've been consolidating since Tuesday) but are probably close to a bigger bounce into next week. What effect that will have on stocks is questionable.

Jeff Bailey : 1/8/2009 12:38:00 PM

USO's "Max Pain" fell another bone ($1) to $39

Jeff Bailey : 1/8/2009 12:34:25 PM

At last night's close, IWM's Jan "Max Pain" theory tabulation was still $55.

IWM $49.61 -0.26% ...

Jeff Bailey : 1/8/2009 12:32:58 PM

At last night's close, SPY's Jan "Max Pain" theory tabulation was still $90.00

SPY $90.17 -0.55% ...

Jeff Bailey : 1/8/2009 12:30:53 PM

SPX 901.67

RUT.X 497

Jeff Bailey : 1/8/2009 12:30:27 PM

Linda mentioning "option expiration" ... some look to it too.

Jeff Bailey : 1/8/2009 12:28:59 PM

JP Morgan (JPM) $26.97 -3.98% ... notably weak and falling below its WKLY S2.

Jeff Bailey : 1/8/2009 12:27:32 PM

These are the times with an individual traders tolerance for RISK becomes the determiner.

Jeff Bailey : 1/8/2009 12:19:08 PM

I'm "assigning" probability 50/50 as it would relate to termination benchmark and WKLY Pivot.

Jeff Bailey : 1/8/2009 12:18:13 PM

That's probably all a POTENTIAL reverse h/s bull can let it go I would think.

GREAT regular session risk/reward. PROBABILITY of success less than 50/50 at this point.

Jeff Bailey : 1/8/2009 12:16:50 PM

USO $32.63 -1.95% ... Session low of $32.00 marked by DAILY S1 (32.03) regular session derived.

Jeff Bailey : 1/8/2009 12:14:38 PM

12:00 Internals found at this Link

Jeff Bailey : 1/8/2009 11:56:20 AM

As I look at the RUT.X and SPX on intra-day basis, with WKLY and DAILY pivot levels turned on, it becomes OBVIOUS to me, that the RUT.X is currently STRONGER than the SPX.X.

As such, and with a BEARISH RUT.X-like trade, I'd better have a stop plan in place.

Jeff Bailey : 1/8/2009 11:41:01 AM

SPX 900.03 -0.73% ... just noting morning bounce stopped dead at WKLY Pivot (regular session derived).

Jeff Bailey : 1/8/2009 11:39:14 AM

VIX.X 44.12 +1.68% ... just noting session high has been 44.60. Juuuuuust shy of WKLY R1.

Keene Little : 1/8/2009 11:35:30 AM

A 62% retracement of this morning's little bounce is SPX 901 so this area should hold if we're to continue the bounce. Keep your stop on a long play at a new daily low for now.

One added caution is the fact that this is the Thursday prior to opex and we've often seen some wild moves on this day as people begin squaring their options positions.

Jeff Bailey : 1/8/2009 11:33:46 AM

cl09g and a 10-minute interval showing TERMINATION benchmarks Link ... Seeing some inability on this short-term time interval to recapture the most recent termination benchmark. This suggests "too long" this contract. Cobined with Tuesday's observation, may "confirm" the "too long" and still wanting to get out.

Linda Piazza : 1/8/2009 11:20:53 AM

I'm signing in for a moment with a message to those of my fellow traders who might be in iron condors or credit spreads, either JAN or FEB. As most of you know, I frequently close out my spreads early, and I always try to do so before option expiration week. You might take a look at your JAN credit spreads, especially, and see if any can be closed for a small debit today. If you collected $0.50-0.75 for a 10-point index-based credit spread and can now close it for a debit of $0.10 or less, I would consider doing so and minimizing risk. This approach isn't favored by all traders, but let's run the numbers for a 10-contract SPX credit spread with a 10-point spread, with $0.60 in original credit collected. Would you really want to carry $9400 risk into option expiration week [($10-point spread - 0.60 original credit) x 10 contracts x 100 multiplier] just to collect that last $100 ($0.10 x 10 contracts x 100 multiplier)? Couple this with statements by the CBOE's Brian Overby and Sheridan Mentoring's Dan Sheridan, among others, that it's really hard to eke out that last $0.10, and the answer is clear for me. You make your own choice, but I wanted to remind subscribers to take a look this morning and see what can be closed.

Keene Little : 1/8/2009 11:10:31 AM

The Oct 14-Nov 4 downtrend line, which was broken last Friday, was broken again yesterday as SPX dropped back down below it. That trend line might not be that important but for now keep an eye on it at 909 as potential resistance again.

Jeff Bailey : 1/8/2009 11:01:28 AM

10:55 AM Watch Link

Jane Fox : 1/8/2009 10:59:34 AM

At first glance you may think the internals are getting bullish and they are but on further inspection you will see the AD volume is still below 0 and the AD ratio is still below . So we may be seeing the bears getting weaker and fumbling but the bulls do not have control yet. Link

Jeff Bailey : 1/8/2009 10:57:08 AM

IWM $49.93 +0.38% ... QChart's (regular session derived) WKLY Pivot at $49.02. Yesterday's low was $49.03.

Keene Little : 1/8/2009 10:56:00 AM

Watch for a pullback now to correct this first little leg up as another opportunity to get long, stop at a new daily low.

Jeff Bailey : 1/8/2009 10:55:29 AM

RUT.X 499.24 +0.43% ... session low of 492.52 still no test of WKLY Pivot.

Jeff Bailey : 1/8/2009 10:53:41 AM

EIA: Weekly Nat. Gas Storage Table Link ... modest draw of 47 Bcf.

Jane Fox : 1/8/2009 10:53:05 AM

Markets may be making new intraday highs but those overnight highs still loom as resistance. Link

Jane Fox : 1/8/2009 10:51:27 AM

The RUT.x has gone positive and the DOW has pared its losses back to only -43 points.

Jane Fox : 1/8/2009 10:50:47 AM

Fed officials need to replace the departing New York Fed president, Timothy Geithner who has been slotted by President-elect Barack Obama to become the next Treasury Department secretary. It looks like Kevin Warsh, a Federal Reserve governor, is among the leading candidates to become the next president of the Federal Reserve Bank of New York.

Keene Little : 1/8/2009 10:50:17 AM

A long play from this morning should now have a stop at a new daily low.

Jane Fox : 1/8/2009 10:47:16 AM

NEW YORK (MarketWatch) -- Natural-gas futures extended losses after government data showed U.S. inventories fell less than expected. U.S. natural-gas stockpiles declined 47 billion cubic feet in the week ended Jan. 2, the Energy Information Administration reported Thursday. Analysts at IHS Global Insight had expected a withdrawal of 116 billion cubic feet. After the data, natural-gas futures for February delivery fell 3.7% to $5.662 per million British thermal units. Futures were down less than 2% before the EIA report.

Jeff Bailey : 1/8/2009 10:44:42 AM

10:00 Internals at this Link

Jane Fox : 1/8/2009 10:41:57 AM

SAN FRANCISCO (MarketWatch) -- Fannie Mae and Freddie Mac said Thursday they are extending a temporary foreclosure and eviction suspension on single-family homes to further work with servicers to modify mortgages. Fannie and Freddie said they will extend the suspensions until Jan. 31. In November, Fannie and Freddie said they would not foreclose on occupied homes or evict homeowners from Nov. 26 to Jan. 9. to implement a streamlined mortgage modification program.

Jane Fox : 1/8/2009 10:39:41 AM

U.S. natural gas inventories fall 47 bcf last week: EIA

Jeff Bailey : 1/8/2009 10:39:40 AM

There has been news in recent weeks that new Obama administration is planning for new additions to the SPR, but not until in office.

Jeff Bailey : 1/8/2009 10:38:43 AM

CNBC guest talking about oil and inventory/storage.

Jeff Bailey : 1/8/2009 10:37:08 AM

RUT.X 494.39 -0.54% ..

SDD $63.72 +1.29% (see yesterday morning's MM) ... continue to hold.

Jeff Bailey : 1/8/2009 10:34:42 AM

DXO $2.90 -3.65% ...

Keene Little : 1/8/2009 10:34:38 AM

That last little minor low (really a test of the low) looks like it was the end of the run. We should now start a bounce to correct yesterday's decline. It could be choppy and whipsaw traders so be careful with your trade management today. Confirmation of a low requires SPX to get above 908.

Jeff Bailey : 1/8/2009 10:34:25 AM

SCO $30.73 +5.05% ...

Jeff Bailey : 1/8/2009 10:33:55 AM

USO alert! ... $32.41 ... would be 2% below "left shoulder"

Jane Fox : 1/8/2009 10:27:21 AM

SAN FRANCISCO (MarketWatch) -- Freddie Mac said Thursday that the 30-year benchmark mortgage rate continued to plumb new lows following Federal Reserve purchases of mortgage-backed securities. The 30-year fixed-rate mortgage averaged 5.01% with an average 0.6 point for the week ending Jan. 8, the lowest average since Freddie Mac started tracking the average in 1971. Last week, the average was 5.10%, and last year it was 5.87%. "Interest rates for 30-year fixed-rate mortgages fell for the tenth week to a fourth consecutive record low due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," said Frank Nothaft, Freddie Mac chief economist, in a statement. "On Nov. 25, 2008, the Federal Reserve announced that it planned to purchase up to $500 billion of these securities by the end of June of this year. For the sake of comparison, there were roughly $4.7 trillion of such securities backed by home mortgages available as of Sept. 30, 2008."

Jeff Bailey : 1/8/2009 10:24:17 AM

DUG $23.49 +0.51% ...

Jeff Bailey : 1/8/2009 10:24:01 AM

DIG $30.36 -0.99% ...

Jeff Bailey : 1/8/2009 10:23:40 AM

OIX.X 603.06 -0.27% ... sitting on its WKLY Pivot (600.00)

Jeff Bailey : 1/8/2009 10:21:48 AM

In my opinion, and what I currently OBSERVE, Oil is looking BEARISH (especially from EIA fundamentals). Geopolitical is the "don't get overleveraged short."

Keene Little : 1/8/2009 10:20:40 AM

Slow price action this morning. If the market drops to a minor new low and cotninues to show bullish divergence it should be the bottom of the leg down from Tuesday. SPX 895 continues to look like potential support. Below 890 would say the market is in trouble.

Jeff Bailey : 1/8/2009 10:20:00 AM

USO $32.66 -1.83% ...

Jeff Bailey : 1/8/2009 10:19:40 AM

SCO $30.14 +3.03% ...

DXO $2.95 -1.99% ...

Jeff Bailey : 1/8/2009 10:18:21 AM

If HEDGED (see Tuesday's MM) and prior ... then do "nothing" at this point, except make sure you like your WEIGHTING.

Jeff Bailey : 1/8/2009 10:16:27 AM

IF looking bearish oil, can press it here, but have a stop either ABOVE the WKLY Pivot, or NECKLINE of the pattern.

Jeff Bailey : 1/8/2009 10:14:31 AM

IF looking to play the POTENTIAL h/s bottom outlined would at least WAIT until a move BACK ABOVE the WKLY Pivot.

Jeff Bailey : 1/8/2009 10:13:31 AM

USO's WKLY Pivot ($33.48)

Jeff Bailey : 1/8/2009 10:13:09 AM

Im seeing Feb'09 crude oil futures edged up to $43.63 in overnight. Regular session derived WKLY Pivot ($43.50) most likely resistance.

Jeff Bailey : 1/8/2009 10:11:02 AM

USO $32.90 -1.11% ... has slipped under the $36.03 POTENTIAL "left shoulder" ...

Jeff Bailey : 1/8/2009 10:02:20 AM

Thinkorswim (SWIM) $8.00 +41.59% ... TD Ameritrade buying for $606 million.

AMTD $12.70 -5.78% ...

Jane Fox : 1/8/2009 9:59:10 AM

The two middle charts of the AD volume and VIX are the only charts you really need to determine who has control. AD volume down and VIX up means the bears have the ball. The AD ratio confirms bearishness when below 1.00 and if it is falling gives even more credence to the direction. The TRIN is the wild card and I usually don?t put too much emphasis on it unless it is at extremes. Link

Keene Little : 1/8/2009 9:48:05 AM

A bounce back above SPX 908 would be an indication that the bottom is in for now.

Keene Little : 1/8/2009 9:42:28 AM

SPX is finding support, so far, at the 50% retracement level (900).

Jane Fox : 1/8/2009 9:39:34 AM

AD line is a bearish -1099 and the VIX is climbing. The bears still have control.

Jane Fox : 1/8/2009 9:36:53 AM

NEW YORK (MarketWatch) -- Macy's Inc. lowered its fourth-quarter earnings forecast on Thursday and said it would close 11 underperforming stores. The Cincinnati retailer said the closings were a normal pruning process, but the industry has been pummeled as the economy sinks into a recession.

Jane Fox : 1/8/2009 9:34:22 AM

LONDON (MarketWatch) -- The Bank of England on Thursday dropped its benchmark interest rate to the lowest level since the central bank's founding in 1694, as policy makers fired yet another salvo in the battle against a deep and potentially lengthy recession.

The rate-setting Monetary Policy Committee cut the bank rate to 1.5% from 2%. A majority of economists had expected the half-point rate cut, although several had predicted a reduction by three-quarters of a point or a full point.

"The world economy appears to be undergoing an unusually sharp and synchronized downturn," the bank said in a statement announcing the move

Keene Little : 1/8/2009 9:29:08 AM

Equity futures are down sharply from the high at 7:00 AM, which were essentially flat at that point, so we'll start with another gap down this morning. ES stopped just above the 62% retracement of last week's rally so that remains a potential test for SPX after the open (SPX 890). But watch for the possibility for a quick spike down to about 895 and then a reversal as that's a setup for this morning. If it doesn't reverse then the pattern turns more bearish and we could see some accelerated selling instead. SPX 10-min chart: Link

Jane Fox : 1/8/2009 9:23:47 AM

It certainly looks like Crude's reverse head and shoulders, the one I have been tongue wagging about, is a bust. Even though there is a possibility we could still get one, that is if today marks a swing low and Crude revisits the high made on Tuesday at $50.47, the pattern will be lopsided and not nearly as reliable. Link

Jane Fox : 1/8/2009 9:17:44 AM

I see President Elect Obama is scheduled to speak again today at 11:00ET

Jane Fox : 1/8/2009 9:17:02 AM

The bears took hold yesterday and have still not let go. Both S&P (ES) and DOW (YM) futures broke their respective previous day lows and the Russell 2000 (TF) and the NDX (NQ) futures have tagged their PDL and all have similar price patterns, double top that confirmed when a new overnight low was made. Link

Jane Fox : 1/8/2009 9:06:26 AM

NEW YORK (MarketWatch) -- Wal-Mart Stores Inc. said Thursday that December same-store sales rose 1.7% excluding fuel, falling short of the estimate for an increase of 2.8% in a survey of analysts by Thomson Reuters. In the year-ago period, Wal-Mart said same-store sales rose 2.4%. "Due to the difficult economy and severe winter weather in some regions, the holiday season was more challenging for retailers than expected," said Eduardo Castro-Wright, vice chairman, Wal-Mart Stores Inc. The retailing giant also cut its forecast for fourth-quarter earnings from continuing operations to a range of 91 cents to 94 cents a share, compared to its prior view of $1.03 to $1.07 a share. The company cited higher expenses and lower-than-expected sales at Sam's Club and Wal-Mart International. (Updates to include fourth-quarter outlook.)

Jane Fox : 1/8/2009 9:04:23 AM

WASHINGTON (MarketWatch) -- First-time applications for state unemployment benefits fell 24,000 to a seasonally adjusted 467,000 in the week ending Jan. 3, the Labor Department said Thursday. The drop in this week's data, as well in the prior week, may be due to some layoffs occurring earlier than government analysts had expected, according to the Labor Department, which added that claims could remain low for a couple of more weeks and then tick up. Despite the decline in the most recent weekly data, the level of initial claims is 42% higher than the same period in the prior year. The four-week average of new claims fell 27,000 to 525,750, and is up 53% from the prior year. Meanwhile, the number of people collecting benefits in the week ending Dec. 27 rose 101,000 to 4.61 million - the highest level since November 1982. The four-week average of continuing claims rose 45,000 to 4.47 million - the highest level since December 1982. The insured unemployment rate remained at 3.4%.

Keene Little : 1/8/2009 12:05:07 AM

Thursday's pivot table: Link

After Wednesday's decline I think it's safe to say the rally leg from Monday, December 29th, has completed. The bigger question is whether that means the leg up from November 21st has also completed. And then the even bigger question is whether we'll now start down to a new low below November's (the 5th wave down for the decline from October 2007) or if instead we'll drop down to a higher low as part of a continuing price consolidation since October before pressing down to new lows in March/April.

That question is somewhat academic at this point since both scenarios are looking for a decline but the bears have a little more work to do before we'll know for sure whether or not a larger decline has started. After Wednesday's decline we should be set up for a bounce to correct it on Thursday (could take up the bulk of the day's trading) to then be followed by another leg down.

It takes a break below SPX 890, the uptrend line from November 21st, to confirm we'll probably continue lower into opex. In reality a break below 875, the uptrend line from December 5th, would be better confirmation as that line could be the bottom of a consolidation pattern since the beginning of December that will lead to another rally leg. Breaking below 875 would also be a more convincing break back below the 50-dma at 886--that was resistance and could very well turn into support now. But we'll take it one leg at a time as the pattern unfolds.

The updated SPX 120-min and daily charts from Tuesday night show the setups and key levels for now:
120-min chart: Link
daily chart: Link

Jeff Bailey : 1/7/2009 11:53:10 PM

StockCharts.com's $BPOEX Link

Jeff Bailey : 1/7/2009 11:50:56 PM

OEX 5-point box Link

Hmmm ... "think 920" ended up being "940" Link

Jeff Bailey : 1/7/2009 11:42:37 PM

FTSE-100 (FTSE) updated since last Wednesday/Thursday's wrap Link at this Link ... did make it 50-points above reistance, now pulling back. Looks like they're working it.

Jeff Bailey : 1/7/2009 11:29:54 PM

MBA Weekly Application Table I track at this Link

Just doing a little "benchmarking" and looking at the 4-week Avg. Purchases relative to the 12-week Avg. Purchases higher low of 330.7 and sense/observe some fundamental resistance.

Can maybe tie that with DJUSHB horizontal resisitance at 260-ish. Link ... Ooooo ... that's "chart of the week" territory there.

Jeff Bailey : 1/7/2009 11:13:01 PM

Purchases +7.3% ... that's not too bad. 30-year fixed rates inch up a bit. Ooooo .... the 1-year ARM falling to 5.90%, some sign of "help" for those about to reset. Better than 7.25% in late July.

Jeff Bailey : 1/7/2009 11:11:03 PM

Getting into the MBA's weekly report ...

Jeff Bailey : 1/7/2009 11:04:55 PM

Major Global Indexes, Currencies, USO/OIX, GLD/HUI, XLF, DJUSHB and 7-10year Treasury ETF at this Link

Probably "crazy," but with just a few days into the new year and quarter, some of last year's BIGGER downs showing some "bigger up" and would suggest some rebalancing.

7/10 year bond etf and the IEF had a BIGGER UP last year, and somewhat "bigger down" in early going.

OI Technical Staff : 1/7/2009 9:59:59 PM

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