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Jeff Bailey : 2/12/2009 5:23:07 PM

Closing U.S. Market Watch Link

Jeff Bailey : 2/12/2009 4:18:10 PM

BAC's Feb "Max Pain" theory tabulation is currently $7.00 (0.50 increments).

Jeff Bailey : 2/12/2009 4:16:05 PM

Bank of America (BAC) $5.87 -3.29% ... 60-minute interval chart Link

Keene Little : 2/12/2009 4:06:49 PM

This SPX 5-min chart shows a classic EW A-B-C expanded flat correction: Link . It's what gives me confidence in my call to short this rally leg. I could be wrong and that's what stops are for but this is one sweet setup for an immediate failure tomorrow.

Jeff Bailey : 2/12/2009 4:03:31 PM

POTENTIALLY nasty looking 60-minute interval chart on BAC

Jeff Bailey : 2/12/2009 4:00:19 PM

QQQQ $30.51 +1.02% ... after another test of WKLY Pivot (RSD)

Keene Little : 2/12/2009 3:58:48 PM

It's also possible we'll get some kind of more complex wave pattern to the upside that chews up more time and makes it higher yet. If we start a pullback tomorrow morning but it becomes very corrective and choppy then we'll know it's a little early to be in a short position.

Keene Little : 2/12/2009 3:57:53 PM

This is the setup as we head for the finish line. Take a couple of puts home with you to see if it works. The selloff has to happen immediately otherwise something more bullish is going on.

Jeff Bailey : 2/12/2009 3:56:59 PM

SPX 833.84 +0.01% ... inches green.

Jeff Bailey : 2/12/2009 3:56:29 PM

Selling long some UYG in personal accounts at $3.14 from "Goldman denial" ...

Jeff Bailey : 2/12/2009 3:50:18 PM

SLV $13.35 +0.07% ...

Jeff Bailey : 2/12/2009 3:50:04 PM

GLD $93.39 +1.19% ... ~$933.90 spot.

Jeff Bailey : 2/12/2009 3:49:32 PM

UUP $25.97 +0.34% ...

Jeff Bailey : 2/12/2009 3:49:14 PM

dj via Reuters: US Administration working on plan to subsidize some mortgage payments

Keene Little : 2/12/2009 3:48:31 PM

Note that right here, SPX 832, it's testing its broken uptrend line from November.

Keene Little : 2/12/2009 3:47:22 PM

If SPX reaches 835 before the close and appears to be stalling, it's the short play setup but will require holding overnight so know what your risk is and manage it appropriately.

Keene Little : 2/12/2009 3:45:25 PM

Using this morning's low as the end of the 1st wave down from Monday's high, a 38% retracement is at SPX 835.67. For an expanded flat A-B-C correction where wave C = 162% of wave A we get an upside Fib projection at 834.96 so the 835 area looks like a good upside target to complete the 2nd wave correction, labeled (ii) in dark red on the 60-min chart: Link

I'm hoping we'll see that get tagged early tomorrow morning for the setup to get short for the 3rd wave down into next week. It should result in a strong move down to at least the November low (741).

Jeff Bailey : 2/12/2009 3:44:18 PM

SPX 824.62 ... (see last night's wrap)

Jeff Bailey : 2/12/2009 3:43:19 PM

BIX.X 77.29 -6.83% ... WKLY S1 (RSD) right here.

Jeff Bailey : 2/12/2009 3:40:49 PM

XLF $9.02 -3.21% ...

Jeff Bailey : 2/12/2009 3:40:20 PM

YM 7,818

Jeff Bailey : 2/12/2009 3:37:10 PM

QQQQ "Big 15" (01/21/09 sort) Link

Jeff Bailey : 2/12/2009 3:34:15 PM

Oooooeee .... just look at the "big 15"

Jeff Bailey : 2/12/2009 3:33:42 PM

QQQQ $30.29 +0.29% ...

Jeff Bailey : 2/12/2009 3:33:29 PM

BTK.X 707.71 +1.30 ...

Jeff Bailey : 2/12/2009 3:32:04 PM

C'mon and "flash us a smile" ... SNDK $10.76 +3.66% ...

Jeff Bailey : 2/12/2009 3:31:31 PM

DDX.X 54.37 +1.17% ... new sector winner

Jeff Bailey : 2/12/2009 3:30:00 PM

QQQQ $30.13 -0.23% ...

Keene Little : 2/12/2009 3:30:00 PM

Looks like this afternoon's pullback was in fact wave B of an A-B-C bounce off this morning's low. We should get a sharp rally (wave C) up to the SPX 835 area by early tomorrow morning (who knows, maybe even by the close) and that will be an ideal setup for a short entry.

Jeff Bailey : 2/12/2009 3:29:46 PM

CSCO $15.87 -1.85% ...

Jeff Bailey : 2/12/2009 3:29:26 PM

RIMM $50.12 +2.78% ...

Jeff Bailey : 2/12/2009 3:29:02 PM

Not sure Keene ... could be some bear chatter ... SPX has been stubborn at trend.

Keene Little : 2/12/2009 3:27:48 PM

Per Jeff's 3:13 PM email regarding Goldman--sounds like a little CYA going on with them. Don't want to bite the hand that feeds you (wink).

Jeff Bailey : 2/12/2009 3:13:53 PM

XLF $8.71 -6.54% ...

Jeff Bailey : 2/12/2009 3:13:02 PM

dj- Golman Sachs denies CNBC report about client meeting

Jeff Bailey : 2/12/2009 3:08:48 PM

BTK.X 699.84 +0.17% ... sector winner, but slips under 700.00 strike

Jeff Bailey : 2/12/2009 3:04:58 PM

There goes the pound.

Keene Little : 2/12/2009 3:04:05 PM

If SPX 809 breaks we could see a quick move down to 803 before the next consolidation (and then proceed lower). If 809 holds it remains possible that this afternoon's pullback is merely a part of a larger 3-wave bounce off this morning's low. If this short-term bullish scenario plays out we could see SPX back up to 835 tomorrow (2nd leg up = 162% of the 1st leg up). Don't get complacent if short.

Jeff Bailey : 2/12/2009 3:00:09 PM

PBR $28.50 -2.49% ... holding tough.

Jeff Bailey : 2/12/2009 2:59:16 PM

NYSE a/d 501/2,418

Jeff Bailey : 2/12/2009 2:59:16 PM

NYSE a/d 501/2,418

Jeff Bailey : 2/12/2009 2:57:09 PM

WKLY S2 (RSD) could be in play. ... BIX.X 73.72 -11.13 in no man's land.

Jeff Bailey : 2/12/2009 2:56:15 PM

YM 7,686 ... trades RSD DAILY 19.1% pivot retracement.

Jeff Bailey : 2/12/2009 2:46:54 PM

Took a lot more doing than I would have though at MM 01:44:45

Jeff Bailey : 2/12/2009 2:45:00 PM

YM 7,706

Keene Little : 2/12/2009 2:42:00 PM

SPX below 809 is the key level to the downside.

Keene Little : 2/12/2009 2:40:20 PM

This market is at serious risk of a strong breakdown.

Jeff Bailey : 2/12/2009 2:35:32 PM

May just dilly-dally here rest of day.

Jeff Bailey : 2/12/2009 2:34:15 PM

Not enough ...

Jeff Bailey : 2/12/2009 2:33:47 PM

QQQQ $30.03

Jeff Bailey : 2/12/2009 2:33:36 PM

YM long stop alert! 7,737

Jane Fox : 2/12/2009 2:32:08 PM

AD line breaking to new daily lows and that is never a sign of strength.

Jeff Bailey : 2/12/2009 2:30:45 PM

Need the bid now ...

Jeff Bailey : 2/12/2009 2:25:43 PM

YM long ... stop goes 7,737, target is 7,800

Jeff Bailey : 2/12/2009 2:24:30 PM

YM long alert! 7,770

Jeff Bailey : 2/12/2009 2:22:58 PM

YM long stop alert! ... 7,765

Jeff Bailey : 2/12/2009 2:20:07 PM

YM long raise stop alert! ... to even.

YM 7,782

Jeff Bailey : 2/12/2009 2:17:52 PM

YM long ... stop goes 7,737. Target is 7,800

Jeff Bailey : 2/12/2009 2:16:07 PM

YM long alert! 7,765

Keene Little : 2/12/2009 2:11:02 PM

I'm using NDX as an indicator for now since any bearishness displayed by this index would confirm bearishness all around. It found support at 1218 so if that breaks we'll probably see it drop back down for at least a retest of this morning's low. Two equal legs down at this point is at 1205.71 which is this morning's low. Any lower than that and it would be lights out for the bulls. For now the potential remains for another leg up for a larger bounce into tomorrow.

Jeff Bailey : 2/12/2009 2:10:51 PM

7,762

Jeff Bailey : 2/12/2009 2:08:34 PM

YM 7,739 ... slips back under RSD D S1.

Jeff Bailey : 2/12/2009 1:53:38 PM

YM short stop alert! ... 7,751

Jeff Bailey : 2/12/2009 1:51:27 PM

YM short lower stop alert! ... to 7,751.

7,735

Jane Fox : 2/12/2009 1:47:52 PM

Not a day to try any kind of long positions. Link

Jeff Bailey : 2/12/2009 1:46:19 PM

YM short ... stop goes 7,768. Target is 7,698

Jeff Bailey : 2/12/2009 1:44:45 PM

YM short alert! 7,740

Jeff Bailey : 2/12/2009 1:28:56 PM

CNBC ... Goldman Sachs' attendees worried by Treasury plans lack of detail

Keene Little : 2/12/2009 1:27:39 PM

NDX is still holding up relatively well while BIX has dropped to the mat and doesn't want to get up. If NDX can hold at 1218 (62% pullback today) I think the chances remain good for another leg up. Below 1218 and I'd start to get a lot more cautious about that possibility.

Keene Little : 2/12/2009 1:06:07 PM

Bonds just took a little dumper. NOt sure if it's news related.

Keene Little : 2/12/2009 1:05:12 PM

While the broader market is trying to rally today the banks are dropping lower. BIX is making new lows and is down -9.6%. That's certainly going to be an albatross around the market's neck.

Keene Little : 2/12/2009 12:52:57 PM

Until proven otherwise, I expect to see a bounce that takes us into at least mid day tomorrow to correct this week's decline. The SPX 60-min chart shows a typical correction followed by a move lower into next week (strong selling into opex). It takes a rally above 850 for a heads up that something more bullish is happening and above 862 to confirm that we're likely to see new highs above Monday's 875 high (meaning buying into opex). SPX 60-min chart: Link

The daily chart shows how each scenario could play out: Link

Jeff Bailey : 2/12/2009 12:30:04 PM

QQQQ $30.45

Jeff Bailey : 2/12/2009 12:29:52 PM

YM 7,814 .... know where you are.

Jane Fox : 2/12/2009 12:21:05 PM

The VIX took a huge spike downwards suggesting the S&P futures will continue to rally but the AD line is still a very bearish -1350 muting any bullishness. The result is chop and no direction. Link

Jeff Bailey : 2/12/2009 12:13:39 PM

VIX.X 44.30 -0.51% ...

SPX 822.47 -1.35% ...

Jeff Bailey : 2/12/2009 12:12:38 PM

12:00 Internals at this Link

Jeff Bailey : 2/12/2009 11:48:43 AM

SNDK $10.95 +4.78% ... SWQ-DB $2.13 at the bid.

VXN.X 44.80 +0.49% ...

Jeff Bailey : 2/12/2009 11:47:25 AM

INDU 7,824 -1.44% ...

Keene Little : 2/12/2009 11:47:12 AM

No surprise, NDX is the first to close this morning's gap.

Jeff Bailey : 2/12/2009 11:47:08 AM

QQQQ $30.23 +0.09% ... inches green.

Keene Little : 2/12/2009 11:46:20 AM

If SPX can push higher here the next upside target is where the bounce off this morning's low would have two larger equal legs up at 824.46. This is on top of the 50% retracement of this morning's decline which is at 824.30.

Jeff Bailey : 2/12/2009 11:39:49 AM

Bill ... @ 11:30 Mar-Apr cantango was ~20.7%.

Mar-May was ~31.00%.

Keene Little : 2/12/2009 11:02:38 AM

NDX is getting closer to gap closure while SPX lags way behind in that respect. SPX came very close to tagging the level where this morning's bounce had two equal legs up (821.16 and the high of the bounce so far is 820.94) which is also the 38% retracement of the drop from yesterday afternoon (821.24). A rollover from here to a new low would be a strong sell signal. In the meantime we could be in just the start of larger corrective bounce that will chew up most of the day.

Jeff Bailey : 2/12/2009 10:47:47 AM

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

Jeff Bailey : 2/12/2009 10:35:19 AM

EIA: Weekly Nat. Gas Storage Table Link ... Draw of 159 Bcf.

Jeff Bailey : 2/12/2009 10:34:30 AM

CHK $17.64 -2.16% ...

Jeff Bailey : 2/12/2009 10:34:12 AM

UNG $18.18 -3.81% ...

Jane Fox : 2/12/2009 10:34:02 AM

NDX futures is the only market trading inside the overnight session. Link

Keene Little : 2/12/2009 10:33:43 AM

With NDX leading the way back up this morning, it could be the first to close its gap (currently struggling at the bottom of the gap). That would be a good test to see whether or not we're going to get a bigger bounce today and into tomorrow. In the meantime stay very wary of any bounce attempt.

Any bounce followed by a new daily low at this point would likely be followed by some very strong selling. This month has seen a lot of bullish expectations (put/call data showed an extremely high expectation for a rally) and a selloff would be exacerbated by many of those bulls heading for the exits.

Jeff Bailey : 2/12/2009 10:26:50 AM

Swing trade short stop alert! ... for the Petroleo Brasileiro (PBR) $28.10 -3.83%

Jane Fox : 2/12/2009 10:25:52 AM

This is not the kind of environment you would want to be long. This is the kind of environment where you sell the rallies. Link

Jeff Bailey : 2/12/2009 10:24:52 AM

Swing trade short lower stop alert! ... for the Petroleo Brasileiro (PBR) $28.01 -4.14% ... to $28.10.

Jeff Bailey : 2/12/2009 10:22:33 AM

10:00 Internals at this Link

Keene Little : 2/12/2009 10:16:18 AM

A 38%-62% retracement of the drop from yesterday afternoon's high gives us a potential resistance zone of 821-827, which ties in with the lower uptrend line near 822.

Keene Little : 2/12/2009 10:13:10 AM

The uptrend line from November through the January 21st low is up near 831 (which is the line it gapped below this morning) and the uptrend line from January 21st through the February 2nd low is now near 822. Both of those trend lines are now potential resistance if we do get a bounce back up. If instead we've started the 3rd wave down this morning we can expect only a relatively small bounce that retraces a portion of this morning's drop.

Jane Fox : 2/12/2009 10:12:29 AM

The magenta line on this daily DOW chart is from September, a line I removed from the SPX chart. This trendline seems to be the one holding back the DOW so is quite important . You can also see how the DOW has already broken its support. Link

Keene Little : 2/12/2009 10:04:44 AM

This morning's low for NDX is so far at 1207. Its 50-dma is just under 1204.

Jane Fox : 2/12/2009 10:04:24 AM

The daily chart of the SPX is very clear where your support and resistance lie, resistance at 880 and support at 800. SPX could stay in this range for a few more days, then just break support and rally back to resistance so that is why you need to be looking for a close below support before you can say the bulls have thrown in the towel. Link

Jeff Bailey : 2/12/2009 9:55:16 AM

Swing trade short lower stop alert! for the Petroleo Brasileriro (PBR) $27.96 -4.31% ... to $28.45.

Keene Little : 2/12/2009 9:49:26 AM

Just to keep the bears on their toes as well, this morning's decline, especially on all-hours ES, can be counted as the 5th wave down for this week's decline. If true, and it's the reason I say the market must turn back up now, then we could get a bounce today and into tomorrow to correct the decline (so back up to the SPX 840-845 area). NDX is getting a bigger bounce as I type.

Jane Fox : 2/12/2009 9:44:05 AM

AD line is a very bearsih -1839, not going to be a good day for the bulls I'm afraid.

Jane Fox : 2/12/2009 9:40:20 AM

I had a discussion with a fellow trader the other day as to why the cost of gas is climbing although the price of Crude is still falling. The short answer is although the price of gas is affected by the price of Crude, there are many parts to the price of gallon of gas. Things like the cost of transportation, taxes, cost of refining, etc. This of course does not explain why gas was falling late last year as Crude was falling and does not explain why the cost is going up now but one piece of the price of gas is climbing because this is not just a local phenomena, it is nationwide.

Keene Little : 2/12/2009 9:40:13 AM

A caution to those who are long the market at the moment--I'm not sure what spooked the market so much this morning but if yesterday's bounce is all there's going to be to the 2nd wave correction that means we're starting the 3rd wave down and this is the one that will take us below SPX 800. That's the current risk if we don't see an immediate reversal back up.

Jane Fox : 2/12/2009 9:34:49 AM

Crude sellers are still able to over power Crude buyers. Someday this will stop and Crude will rally - this I guarantee, 100%. Link

Jane Fox : 2/12/2009 9:33:07 AM

TEL AVIV (MarketWatch) -- Foreclosure notices on U.S. properties in January rose 18% from a year earlier while they fell 10% from December, RealtyTrac reported.

Foreclosure filings, which include default notices, auction-sale notices, and bank repossessions, totaled 274,399 in the month. And one in every 466 U.S. housing units was the subject of a filing, the Irvine, Calif., online real-estate-data provider reported on Thursday.

The decline from December appears to reflect "the Fannie Mae (FNM) and Freddie Mac (FRE) moratorium on all foreclosure sales that was extended through the end of January, along with Florida's voluntary 45-day freeze on all new foreclosure actions and scheduling of foreclosure sales that was announced at the beginning of December," said James J. Saccacio, RealtyTrac's chief executive, in a statement.

Keene Little : 2/12/2009 9:31:21 AM

We've got an ugly start to this morning's trading with futures down nearly 2% as we head for the bell. ES has now tagged 815 and its uptrend line from January 23rd so it's possible we could see support hold and start back up again (the all-hours pattern supports that idea as well). So be careful about chasing it lower this morning. A break below ES 806/SPX 813, the February 2nd low, would signal a potential strong decline in front of us.

Keep in mind too that this is the Thursday prior to opex week and these days have often been head-fake days. I don't expect a rally into opex this month but stranger things have happened.

Jane Fox : 2/12/2009 9:30:40 AM

WASHINGTON (MarketWatch) -- First-time claims for state unemployment benefits dipped down in the latest weekly data, while continuing claims reached a record high, the Labor Department reported Thursday.

The number of initial claims in the week ending Feb. 7 fell 8,000 to 623,000, a level that is 84% higher than the same period in the prior year. The four-week average of initial claims rose 24,000 to 607,500 -- the highest level since November 1982 and up 76% from the prior year. The four-week average for claims draws the attention of economists and investors because it smoothes out distortions caused by bad weather, strikes or the timing of holidays.

For the week ending Jan. 31, the number of Americans receiving state jobless benefits rose 11,000 to a record 4.81 million. The four-week moving average of continuing claims also reached a record, rising 73,750 to 4.75 million. The data go back to 1967.

Jane Fox : 2/12/2009 9:28:38 AM

Even though we saw a surprise jump in retail sales for the month of January, the futures still sold off breaking their respective previous day lows and to new overnight lows. Link

Jane Fox : 2/12/2009 9:22:19 AM

WASHINGTON (MarketWatch) -- U.S. retailers rang up their largest increase in sales in more than a year during January, rebounding strongly after a six-month string of sharp declines, the Commerce Department reported Thursday.

Retail sales rose 1% on a seasonally adjusted basis last month, marking the first increase since June as well as the largest percentage increase since November 2007. The gain was unexpected; economists surveyed by MarketWatch had been looking for a decline of 0.4%.

Sales fell by 3% in December and by 2.4% in November, each revised down by three-tenths of a percentage point.

The figures are adjusted for seasonal factors but not for price changes. The data can be quite volatile.

Retail sales are down 9.7% in the past year, the government's data showed.

Keene Little : 2/12/2009 12:35:32 AM

Thursday's pivot table: Link

I like the setup heading into tomorrow for a little higher bounce, to correct this week's decline, before dropping down again. The 38% retracement near SPX 843 continues to be a good upside target. The dark red wave count on the 60-min chart I think is the higher probability: Link

If the market were to continue to chop its way higher and SPX gets above 860 then we could see it make it back up to the 875 area before heading back down. That possibility is shown in pink on the daily chart: Link

You can see the potential ascending wedge pattern that could be playing out for the pink wave count. So I'll be watching to see how price behaves around 843, if it gets there (stay prepared for a downside surprise at any time), and then 855-860 if the bounce continues.

Jeff Bailey : 2/12/2009 12:21:59 AM

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

Closed the CDE at the bid of $0.74. Even as HUI.X continues to climb, CDE still tentative. Since trading the "tail" of the miners, I'm remaining rather cautious with cut and run policy.

PBR's official close of $29.22 (some had $29.04) was above the MONTHLY R1 $29.16 and bulls still refuse to take any type of meaningful profits from the lows.

CTIC trading halt ... Company Press Release Link

OI Technical Staff : 2/11/2009 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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