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Jeff Bailey : 1/26/2009 9:01:28 PM

Closing Internals found at this Link

Jeff Bailey : 1/26/2009 5:18:12 PM

Closing U.S. Market Watch found at this Link

Keene Little : 1/26/2009 4:57:48 PM

The day finished in a way that leaves me guessing about tomorrow. The updated SPX 60-min chart shows the key levels remain today's high near 853 and yesterday afternoon's low near 825: Link

Jeff Bailey : 1/26/2009 4:45:19 PM

Zions Bancorp (ZION) $12.43 -7.59% ... Earnings Press Release Link

Jeff Bailey : 1/26/2009 4:44:20 PM

Texas Instruments (TXN) $14.77 -1.46% ... Earnings Press Release Link

Jeff Bailey : 1/26/2009 4:41:22 PM

American Express (AXP) $15.20 -5.00% ... Earnings Press Release Link

Jeff Bailey : 1/26/2009 4:40:26 PM

Amgen (AMGN) $54.41 +2.29% ... Earnings Press Release Link

Jeff Bailey : 1/26/2009 4:39:08 PM

Zions Bancorp. (ZION) $12.53 -7.59% ... $12.75 on headline numbers.

Jeff Bailey : 1/26/2009 4:38:08 PM

Zions Bancorp. (ZION) $12.53 -7.59% ... notable 52-weeker. Consensus is EPS loss of $-0.30 on Revenue of $558.93 million.

Jeff Bailey : 1/26/2009 4:35:11 PM

Texas Instruments (TXN) $14.77 -1.46% ... $15.43 on headline numbers.

Consensus is EPS of $0.12 on Revenue of $2.37 billion.

Jeff Bailey : 1/26/2009 4:34:06 PM

Texas Instruments (TXN) $14.77 -1.46% ... gets active $15.20

Jeff Bailey : 1/26/2009 4:29:38 PM

American Express (AXP) $15.20 -5.00% ... $16.00 on headline numbers.

Consensus was for EPS of $0.22 on Revenue of $7.22 billion.

Jane Fox : 1/26/2009 4:19:08 PM

Well we certainly did not get the follow through to the downside - one for the bulls - but the bounce we got from the daily lows was pretty anemic. The daily SPX candle left us with more of the same, little idea where things are headed.

Jeff Bailey : 1/26/2009 4:07:25 PM

Amgen (AMGN) $54.41 +2.29% ... $54.30 on headline numbers.

Jeff Bailey : 1/26/2009 4:06:03 PM

Amgen (AMGN) $54.41 +2.29% ... earnings tonight. Consensus is for EPS of $1.07 on Revenue of $3.79 billion

Jeff Bailey : 1/26/2009 4:03:04 PM

QQQQ $29.13 +0.79% ... struggles to hold MONTHLY Pivot near the close.

Keene Little : 1/26/2009 3:36:08 PM

I'm expecting a long distance phone call at any time so if I am quiet for the rest of the session it's because I'm tied up. I'll get some charts updated after the close. Once again the recommended position is short against today's high. One of these is going to result in a move to new lows.

Jeff Bailey : 1/26/2009 3:33:31 PM

BIX.X 80.04 -1.29% ... "sloppy" at TREND "A"

Jeff Bailey : 1/26/2009 3:32:57 PM

XBD.X 72.87 +0.24% ... inches back green.

Jeff Bailey : 1/26/2009 3:32:36 PM

XLF $9.01 +0.22% ... inches back green.

Jeff Bailey : 1/26/2009 3:28:37 PM

PBR's Feb "Max Pain" was still $25.00 at Friday's close.

Jane Fox : 1/26/2009 3:27:54 PM

I am reading where we could be seeing Exchange Traded Notes (ETNs), which are very similar to ETFs, tracking the VIX futures.

Jeff Bailey : 1/26/2009 3:27:39 PM

VIX.X 45.29 -4.18% ...

Jeff Bailey : 1/26/2009 3:27:21 PM

PBR $24.44 -0.52% ... PBR-PK $2.80 x $2.90

Jeff Bailey : 1/26/2009 3:26:25 PM

OIX.X 584.55 +3.11% ...

OIH $79.56 +4.35% ...

Jeff Bailey : 1/26/2009 3:25:55 PM

USO $32.25 -0.24% ....

Jane Fox : 1/26/2009 3:24:42 PM

Crude closed the day with a bearish looking candle. This is exactly what the equity bulls are hoping they can avoid at 4:00ET. Link

Jeff Bailey : 1/26/2009 3:20:54 PM

RVX.X 53.52 -2.28% ...

Keene Little : 1/26/2009 3:20:06 PM

I am long the USO so could you include the charting moves s&r and maybe when would be a good time to sell based on the charts. I am long at 33.17.

The bounce off January 20th low is so far just a 3-wave bounce and by that measure it's a correction to the decline (so far) rather than the start of something bigger to the upside. But if the pullback that started off today's high turns into a correction followed by another run higher then we'll have something bullish, shown in green on the 60-min chart: Link

On the other hand a drop back below 31 now would negate that bullish possibility and would instead be pointing to the likely probability for a new low to follow (dark red). So 31 to the downside and 34 to the upside--follow the break of either of those.

Jeff Bailey : 1/26/2009 3:19:52 PM

Swing trade call (IWM-BR) establish stop alert! ... with the iShares Russell 2000 (IWM) $44.87 +1.08% ... let's establish a STOP in the IWM-BR $2.72 x $2.75 at $43.85 in the underlying IWM

Jeff Bailey : 1/26/2009 3:08:48 PM

NASDAQ a/d 1,614/1,105

Keene Little : 1/26/2009 3:08:35 PM

If SPX drives back above 842 it will be a bullish statement--it would be back above this morning's first pullback low and it would be a break of the downtrend line from this morning's high. Until that happens I think it's better to sell the rallies rather than buy the dips.

Jeff Bailey : 1/26/2009 3:08:34 PM

NYSE a/d 1,792/1,118

Jeff Bailey : 1/26/2009 3:07:37 PM

CNBC reporting ... RUMORS that BP may be set to make an offer for Chesapeake Energy (CHK) $15.76 +5.77% ...

Keene Little : 1/26/2009 3:05:19 PM

Here comes one of the PPT efforts to drive the market back up that William warned us about.

Jeff Bailey : 1/26/2009 3:03:36 PM

RUT.X bulls would really want to see a CLOSE above 453 today.

Jeff Bailey : 1/26/2009 3:02:15 PM

Small cap bulls somewhat encouraged at this point, but it hasn't been easy. Overlapping MS1 and QRTLY 38.2 pivot retracement held to the decimal.

Jane Fox : 1/26/2009 2:48:19 PM

The bulls better get their act together before the day is out because this daily candle is looking downright bearish right now. Link

Jane Fox : 1/26/2009 2:46:20 PM

Well the S&P futures overnight lows did not hold and they have now made a new low. It remains to be seen if this selloff has follow-through or not. I put myself out there with an "I think it will not."

Jeff Bailey : 1/26/2009 2:44:41 PM

QQQQ $28.93 +0.10% ... did undercut WKLY Pivot by a penny.

Jeff Bailey : 1/26/2009 2:44:03 PM

SMH $17.13 +0.35% ... not backtest of WKLY Pivot. Session low has been $16.92.

Keene Little : 1/26/2009 2:43:05 PM

As goes Jan so goes year=PPT wants a close above SPX 892 Fri to reassure us--keep this in mind.

William makes a good point about a possible effort by the President's Working Group to help keep investor sentiment as bullish as possible. Many investors use these kinds of trends in their decision making. But I'm thinking even the PPT is being overwhelmed by negative sentiment. It's the reason the Fed and Treasury have been largely unsuccesful in turning around the credit situation even after massive amounts of cash have been thrown at the problem.

But here's the interesting thing about the January barometer--I predict it will be wrong this year. January will be down but the year will be up (after we make a new low into March). Check back in a year to see how well I did with that prediction (wink).

Jeff Bailey : 1/26/2009 2:42:30 PM

BULLS need the bids ....

Jeff Bailey : 1/26/2009 2:42:02 PM

RUT.X 446.70 +0.52% ... WKLY Pivot right here.

Jane Fox : 1/26/2009 2:41:51 PM

All markets have retreated back to their respective ON ranges.

Jeff Bailey : 1/26/2009 2:40:58 PM

XLF $8.89 -1.11% ... holding WKLY Pivot $8.79 so far on 60-minute intervals. Gut feel is if session low broken, very NEGATIVE.

Jeff Bailey : 1/26/2009 2:39:16 PM

INDU 8,065

Jeff Bailey : 1/26/2009 2:38:36 PM

"in the zone"

Jeff Bailey : 1/26/2009 2:38:29 PM

YM 8,010 ... battles with WKLY Pivot. Daily Pivot 7,980

Jane Fox : 1/26/2009 2:27:31 PM

Bulls are showing just how weak they are. They got the morning off with a bang and with a lot of strength and "usually" that kind of strength will follow through most of the day but not today, today we are seeing the bulls slowly but surely lose grip of control. Link

Jane Fox : 1/26/2009 2:23:36 PM

WASHINGTON (MarketWatch) -- President Barack Obama will discuss his reinvestment and recovery plan on Tuesday with both Democrats and Republicans on Capitol Hill, White House press secretary Robert Gibbs said Monday. Obama's plan is facing some stiff resistance from House Republicans, who want to spend less money while cutting more taxes. Separately, Gibbs said the White House is hopeful the Senate will confirm Timothy Geithner as Treasury secretary later Monday.

Jeff Bailey : 1/26/2009 2:15:45 PM

02:00 Internals found at this Link

Jeff Bailey : 1/26/2009 2:09:37 PM

BIX.X 77.40 -4.55% ...

Jeff Bailey : 1/26/2009 2:08:37 PM

RKH $46.72 -3.11% ... WKLY Pivot $47.21. Has been under for 10-minutes.

Keene Little : 1/26/2009 2:07:47 PM

After a sharp dropp back down off this morning's high the BIX consolidated in a sideways pattern and has since nose-dived lower and is challenging Friday morning's lows. I don't discount the possibility for another leg up in its larger consolidation pattern since last Wednesday's low but regardless, we've got a bearish pattern for the banks which says new lows are coming, either from here or after another bounce.

Jane Fox : 1/26/2009 1:57:50 PM

SAN FRANCISCO (MarketWatch) -- The Illinois state Senate has started its impeachment trial of Gov. Rod Blagojevich, the Chicago Tribune reported on its Web site Monday. Senators are trying to determine whether Blagojevich violated his oath of office by seeking to sell the open Senate seat left by President Barack Obama. The impeachment marks the first time the state legislature has tried to oust a sitting governor.

Keene Little : 1/26/2009 1:57:19 PM

Here's the test of the broken downtrend line from January 16th. A break below 834 would be bearish but it takes a break below 825 to confirm the bearish price pattern and negate the pink wave count on the 60-min chart: Link

Jeff Bailey : 1/26/2009 1:56:44 PM

IWM $44.68 +0.65% ...

Jane Fox : 1/26/2009 1:56:50 PM

The S&P futures are heading down to test daily low but I think it will hold or, if it does break, the break will not have follow-through.

Jeff Bailey : 1/26/2009 1:55:21 PM

RUT.X 458.40 +0.90% ...

Jeff Bailey : 1/26/2009 1:55:03 PM

SPX 837.00 +0.60% ...

Jeff Bailey : 1/26/2009 1:54:46 PM

XLF $8.88 -1.22% ... backtesting MONTHLY S2 here.

Keene Little : 1/26/2009 1:50:22 PM

A retest of the broken downtrend line from January 16th would be at 835 so a break below that would confirm the bearishness here. But the pullback pattern is still choppy enough to suggest it's still a bull flag. A break of today's downtrend line near 845 would be bullish. In between we have potential chop.

Jeff Bailey : 1/26/2009 1:41:43 PM

BIX.X 79.70 -1.71% ... session lows.

Keene Little : 1/26/2009 1:40:33 PM

We've got the breakdown and it looks bearish. Watch SPX 837.11 which would be two equal legs down and could be part of a larger correction before proceeding higher again.

Keene Little : 1/26/2009 1:26:46 PM

A drop below SPX 839 would be a break of support by its uptrend line and Friday's high, which obviously would not be bullish.

Keene Little : 1/26/2009 1:25:23 PM

SPX has chopped its way lower to its uptrend line from Friday morning, currently just below 841. If it's going to bounce back up it should be starting it from here.

Jeff Bailey : 1/26/2009 1:16:45 PM

dj- US 20-Yr TIPS (auction results)

2.500% Coupon

$106.518 million in noncomps.
56.57% at the high
Bid-to-cover was 1.92.

Keene Little : 1/26/2009 1:15:07 PM

The break down to a new low for today's pullback (not confirmed yet for NDX and RUT) is potentially bearish now. The risk in shorting it here is that we're simply in a larger corrective pullback pattern.

Jeff Bailey : 1/26/2009 12:49:44 PM

dj- Obama Orders EPA To Review Denial of Calif Car Waiver ... President Barack Obama on Monday ordered the Environmental Protection Agency to consider allowing California to regulate greenhouse-gas emissions from automobiles. "The federal government must work with, not against, states to reduce greenhouse-gas emissions," Obama said at a press conference filled with environmental activists and members of his cabinet. He ordered the EPA to "immediately review" a 2007 decision to deny California the waiver it needs to go forward. The executive order will set in motion a review at the EPA, whose own staff had previously urged that California be permitted to go ahead with the rules, according to congressional investigators. It isn't clear how quickly the EPA will make its decision, although California's top environmental regulator has said that the EPA's review could be completed within four months.

Keene Little : 1/26/2009 12:38:24 PM

With the current bounce off the lows just before 12:00 PM having broken out of the bull flag pullbck, any break back down below the mid-day low would now be bearish and it would be a sell signal.

Jeff Bailey : 1/26/2009 12:38:01 PM

US Oil Fund (USO) $32.88 +1.67% ... edges back below 12/19/08 termination benchmark. Session high of $34.08 just shy of MONTHLY Pivot.

Jane Fox : 1/26/2009 12:33:23 PM

It may seem like a really bullish day but the DOW is only up 111 points so far, compared to previous bullish days that is not a homerun by any means.

Jeff Bailey : 1/26/2009 12:28:06 PM

XLF $9.19 +2.22% ...

Jeff Bailey : 1/26/2009 12:27:40 PM

UYG $3.30 +3.77% ...

Jeff Bailey : 1/26/2009 12:27:09 PM

BKX.X 28.66 +0.77% ...

Jeff Bailey : 1/26/2009 12:26:43 PM

dj- S&P Raises Ranking on BofA's Real Estate Structured Finance Servicing Group To Above Average

BAC $6.75 +8.17% ...

Jane Fox : 1/26/2009 12:22:40 PM

Here are your overnight charts, all markets are above ON highs as well as their respective previous day highs. Link

Keene Little : 1/26/2009 12:19:44 PM

I'm waiting to see what kind of pattern the pullback takes and so far I'm leaning bullish for another leg up to at least complete the bounce off Friday's low. Watch the downtrend line along the lows of the pullback--if price suddenly drops hard below that line then we'd have a sell signal. For now it's looking more like a bull flag correction to this morning's rally.

Jeff Bailey : 1/26/2009 12:18:31 PM

12:00 Internals found at this Link

Keene Little : 1/26/2009 11:40:04 AM

The semiconductors could bounce a tad higher before hitting resistance. The downtrend line from August for the SOX, where the rally stopped on January 6th, is near 218 and it's trading near 214 today. SOX daily chart: Link

Jeff Bailey : 1/26/2009 11:32:05 AM

BIX.X ... Analysis: I would have to think that broader market BULLS want to see the BIX.X hold that MONTHLY S3 on this intra-day weakness. If not, sentiment could begin to sour.

Jeff Bailey : 1/26/2009 11:30:56 AM

11:25 AM Market Watch at this Link

Keene Little : 1/26/2009 11:28:32 AM

SPX has not yet reached its minimum upside target of 857 so ideally this morning's pullback will be followed by another push higher to give us a 5-wave count off Friday's low and complete the bounce. For that scenario I would expect SPX to find support at or above Friday afternoon's high near 839.

Jeff Bailey : 1/26/2009 11:27:46 AM

SPX 844.79 +1.54% ...

RUT.X 453.86 +2.13% ...

Jeff Bailey : 1/26/2009 11:27:19 AM

BIX.X 80.95 -0.17% alert! ... slips red.

Keene Little : 1/26/2009 11:25:24 AM

For those who might be trading TLT, the iShares bond ETF, two equal legs down from December is at 104.77. Today's low is 106.45 so there's a little more downside potential on it as well.

Keene Little : 1/26/2009 11:22:26 AM

The 30-year bond (ZB is the emini) is nearing the level where it will have two equal legs down from its December high, at 127'265. Right now I'm looking for an a-b-c pullback from its high and therefore the pullback may be close to finishing. This morning's low is 128'145 so it could potentially drop another half point.

The strong selloff in bonds in the past month, down 13 points, has freed up a lot of money but the stock market hasn't exactly benefitted from it since mid December (the stock market remains below its mid-December highs). If bonds start to rally soon (I'm watching for a long play to set up in bonds) it could put further selling pressure on the stock market.

Jane Fox : 1/26/2009 11:03:09 AM

Internals are telling you the bulls have the ball today and it looks like they are not going to give it up anytime soon. Link

Jane Fox : 1/26/2009 10:59:52 AM

Gold is up another $15.00 today. Link

Jane Fox : 1/26/2009 10:59:14 AM

Crude is making a very nice move here - up $2.46. Link

Jeff Bailey : 1/26/2009 10:57:52 AM

dj- Brazil's Petrobras Needs $18B-$19B In Credit For 2010

PBR $25.16 +2.40% ...

Jeff Bailey : 1/26/2009 10:54:01 AM

Biiig volume here this morning in February mini-Gold (yg09g) at 12,670 contracts.

Jeff Bailey : 1/26/2009 10:40:38 AM

Various February "Max Pain" theory tabulations at Friday's close (current intraday trade +/- 5% threshold) Link

Keene Little : 1/26/2009 10:38:58 AM

Ways to play gold and silver include the eminis (YG and YI) and the ETFs (GLD and SLV).

Keene Little : 1/26/2009 10:35:22 AM

Gold and silver update: Gold has reached its downtrend line from March 2008 and the trend line along the two most recent highs in December. This is the first place I'm watching for failure of its rally and is a good place to nibble on a short to see if it works here. Upside potential remains to about 944. Silver has reached the top of its bear flag pattern so again a good place to try a short play.
Gold contract (GC, continuous) daily chart: Link
Silver contract (SI, continuous) daily chart: Link

Jeff Bailey : 1/26/2009 10:27:46 AM

Money Supply Link

Jeff Bailey : 1/26/2009 10:26:01 AM

Conference Board's Leading Index for December (10:00 AM ET) up 0.3% (forecast -0.2%) vs. November's -0.4%. Link

Jeff Bailey : 1/26/2009 10:18:28 AM

10:00 Internals at this Link

Jane Fox : 1/26/2009 10:14:58 AM

WASHINGTON (MarketWatch) - Sales of existing homes rose 6.5% in December to a seasonally adjusted annualized rate of 4.74 million as prices continued to plunge at a record pace, the National Association of Realtors reported Monday. Sales in December were down 3.5% from the previous December.

For 2008 as a whole, sales fell 13.1% to 4.91 million, the industry trade group said. November and December were the weakest sales months of the year on a seasonally adjusted basis.

The median sales price fell to $175,400 in December, down a record 15.3% compared with a year earlier. For all of 2008, median prices dropped 9.3% to the lowest level since 2004.

The price decline is likely the largest since the Great Depression in the 1930s, according to Lawrence Yun, chief economist for the trade group.

Keene Little : 1/26/2009 10:05:36 AM

The DOW and NDX have now joined SPX in making a new high above Friday's and that's bullish confirmation. This raises the probability that we'll see SPX make a move up to 857 if not 867.

Jane Fox : 1/26/2009 10:05:20 AM

Internals are looking pretty bullish so far. Link

Jeff Bailey : 1/26/2009 9:53:58 AM

Current OPEN MM Profiles that I've made at this Link

Keene Little : 1/26/2009 9:46:57 AM

For the DOW a test of Friday's high at 8152.59 is also where it would tag its downtrend line from January 16th so that will be a good test.

Keene Little : 1/26/2009 9:45:06 AM

It's s tricky spot here with SPX making a new high above Friday's but none of the others. Normally I like to see confirmation among the indices but this morning we don't have it (yet). But a stop is a stop and the new high should have you out of any short play against Friday's high (depending which index you might be playing).

Jane Fox : 1/26/2009 9:43:00 AM

VIX has fallen from an open of 47.78 to 46.90.

Jane Fox : 1/26/2009 9:42:17 AM

... and climbing.

Jane Fox : 1/26/2009 9:42:05 AM

AD line is a surprisingly bullish number +1050.

Jeff Bailey : 1/26/2009 9:40:56 AM

Index Pivot Matrix at this Link

Jane Fox : 1/26/2009 9:31:30 AM

Crude is trading mostly unchanged with very few hints as to which way its next move will be. It is struggling to even get to the 50% retracement of the move down from the January 6th swing high, 48.50.

I am still watching the bullish MACD but this market has not given me any kind of confirmation the bulls are ready to make a stand. Link

Keene Little : 1/26/2009 9:31:14 AM

Equity futures made a strong recovery off the overnight lows which was looking pretty bearish. ES is up about 22 points off its low and is close to testing Friday's high (but YM, NQ and TF are not as close). "Somebody" may have tried to rescue futures during the overnigh session. Bonds have also recovered off their pre-market lows. We'll see if the buying continues after the cash market opens.

Jane Fox : 1/26/2009 9:23:32 AM

LONDON (MarketWatch) -- Royal Philips Electronics, Europe's largest consumer-electronics firm, on Monday said it swung to a fourth-quarter loss of 1.47 billion euros ($1.9 billion) as it wrote down the value of its stakes in LG Display and NXP and demand for its products continued to deteriorate.

It also unveiled plans to cut 6,000 jobs in 2009.

Jane Fox : 1/26/2009 9:21:16 AM

NEW YORK (MarketWatch) -- Caterpillar Inc. on Monday posted a 32% drop in fourth-quarter profit as higher operating costs and an unfavorable foreign-exchange rate more than offset higher machinery sales.

More dismal was the bellwether company's 2009 outlook, which predicted a 25% decline in sales due to tighter credit markets and the recession. In response, Caterpillar said it would cut costs, including the elimination of some 20,000 jobs -- nearly 18% of its workforce.

"We expect 2009 will be the weakest year for economic growth in the postwar period," the company said in a statement.

Jane Fox : 1/26/2009 9:20:01 AM

LONDON (MarketWatch) - Iceland's coalition government fell apart Monday, Prime Minister Geir Haarde announced Monday, succumbing to a financial crisis that's wrecked the tiny, North Atlantic island nation's economy.

The decision follows Haarde's announcement last week for early elections on May 9. Haarde at the time also said he wouldn't run due to health elections.

Monday's announcement followed unsuccessful talks between the coalition partners made up of Haarde's Independence Party and the Social Democrats.

Iceland fell into crisis last October as its once-vibrant banking sector collapsed, sending its currency into a nosedive and unemployment soaring.

The International Monetary Fund in November approved a two-year, $2.1 billion loan for Iceland. The country has also secured loans from other countries

Jane Fox : 1/26/2009 9:18:59 AM

NEW YORK (MarketWatch) -- Home Depot (HD) said Monday that it will exit its Expo business and streamline its support functions, resulting in 7,000 job cuts. That is about 2% of the company's workforce. The company sees a total pre-tax charge due to these actions of approximately $532 million, of which approximately $390 million will be recognized in the fourth quarter and the remaining $142 million will be recognized in 2009 and beyond. In addition, Home Depot affirmed its 2008 forecast of a decline of 8% in sales and a 24% drop in earnings per share from continuing operations before today's announcement.

Jane Fox : 1/26/2009 9:18:22 AM

NEW YORK (MarketWatch) -- The U.S. economic recession deepened in the fourth quarter of 2008, and business conditions are now at their worst in over 27 years, according to a January survey of businesses by the National Association for Business Economics.

"NABE's January 2009 Industry Survey depicts the worst business conditions since the survey began in 1982, confirming that the U.S. recession deepened in the fourth quarter of 2008," said Sarah Johnson, an analyst with NABE.

The survey also showed rising pessimism about the outlook for the economy, with 78% of respondents now expecting gross domestic production to be lower in 2009 than in 2008. In October of last year, only 38% expected a decline.

Businesses surveyed also said tight credit-market conditions continue to hurt them, with 52% saying they were moderately or severely affected, and 78% reporting their customers were adversely affected

Jane Fox : 1/26/2009 9:17:17 AM

Key economic indicators for Monday include leading indicators and existing home sales, both for December.

Jane Fox : 1/26/2009 9:14:49 AM

Makes you kind of wonder why you get up in the morning heh?

Jane Fox : 1/26/2009 9:14:25 AM

Good morning all. I hope you all had a wonderful weekend. The overnight charts show a series of higher highs and lows which is unexpected since we have news that Home Depot is laying off 7000 workers, 2% of its workforce, Sprint is eliminating 8000 jobs, 15% of its workers, Caterpillar posted a 32% drop in 4th quarter profits and has announced layoffs and the US recession deepened in the 4th quarter and business conditions are now at the worst they have been in 27 years. Link

Keene Little : 1/25/2009 10:03:47 PM

Monday's pivot table: Link

At the end of the day Friday I was calling for a short play into Monday. The consolidation pattern since the low on January 15th fits as a sideways b-wave triangle (a bearish continuation pattern). I was looking at Friday's rally as the last leg up in the triangle pattern and therefore as a an opportunity to test the short side. It's common to get a little throw-over finish and that's exactly what we got at the 2:00 PM high near SPX 839, shown on the 10-min chart: Link

A drop back below the top of the triangle pattern gave us the sell signal and that's when I recommended a short with a stop just above Friday's high. After the initial decline from that afternoon high it bounced back up into the close and did a perfect tag of the broken uptrend line from the morning low. That was the 2nd shorting opportunity out of this pattern as a kiss goodbye should follow.

For this bearish setup we'll need to see an immediate decline Monday morning. Any rally back above 839 will stop me out of this short play as the upside potential is at least to 857 (for two equal legs up from Friday morning). On a slightly larger pattern view I see upside potential to just shy of 867, shown in pink on the 60-min chart: Link

If the market does start down on Monday then I'll be looking for a break below last Tuesday's low (near 804) as confirmation the consolidation pattern has completed and that we're into the next leg down to complete either an A-B-C decline from January 6th or more bearishly a stronger decline that will break November's low and potentially on down to the low 600s in the next few weeks. The daily chart shows the higher-probability scenarios from here: Link

OI Technical Staff : 1/25/2009 9:59:59 PM

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