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Jeff Bailey : 2/13/2009 9:08:12 PM

Have a great 3-day Weekend!

Jeff Bailey : 2/13/2009 9:08:08 PM

Last 2 and Next Week's WEEKLY Pivot Levels at this Link

Per Jane's 03:39:08 ... Note VIX.X -1.01 yet SPX -4.81%. VIX.X not the best tool for day trading.

Jeff Bailey : 2/13/2009 8:32:07 PM

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

Jeff Bailey : 2/13/2009 5:13:31 PM

Closing Internals at this Link

Jeff Bailey : 2/13/2009 5:01:21 PM

Closing U.S. Market Watch at this Link

Keene Little : 2/13/2009 4:03:47 PM

Looks like a fear of the weekend took over as futures sell off some more.

Keene Little : 2/13/2009 4:00:42 PM

Healthcare stocks and semiconductors were both up today. That's an odd pair--one's defensive and the other more speculative. As I said, it was a nothing day today.

Keene Little : 2/13/2009 3:59:21 PM

Bonds sold off hard today (30-year is down 3 handles) and yet stocks were not the beneficiary of the freed up money. Metals didn't rally (silver up a little) and the dollar didn't rally. Where did the money go? To the safety of cash I suppose.

Keene Little : 2/13/2009 3:56:33 PM

Today was a nothing day. It was good for expiring options (if you're short the options that is) but not much else. Tuesday's initial direction is a coin toss. I thought we'd get a slightly larger pullback into the close today but it's going sideways instead. We could get the pullback first thing Tuesday or we could start the next leg up right away (the sideways consolidation can be thought of as bullish following yesterday afternoon's strong rally).

Jeff Bailey : 2/13/2009 3:48:42 PM

$VXO.X 41.68

Jeff Bailey : 2/13/2009 3:42:53 PM

DIJ-BC stop/target ... is N/A and $85.00 (may be fine tuned)

Jeff Bailey : 2/13/2009 3:40:38 PM

Swing trade SPECULATIVE CALL option alert!

For two (2) of the Dow Diamonds DIA February $81 Calls (DIJ-BC) at the offer of $0.57.

DIA $79.06

Jane Fox : 2/13/2009 3:39:08 PM

This has not been one of the better day trading sessions unless you are very very good. Link

Jeff Bailey : 2/13/2009 3:30:51 PM

OIX.X 572.44 +0.91% ...

PBR $30.15 +2.30% ... they've "got to be" selling short forward don't they?

XOM $74.69 -0.67% ...

CVX $69.99 +0.18% ...

Jeff Bailey : 2/13/2009 3:28:26 PM

USO $25.71 -1.60% ... trade this one on its OWN merrits the next two weeks.

See March, April and even MAY futures.

Good day today for some observation as to WHY USO doesn't always trade "inline" with oil futures themselves.

Keene Little : 2/13/2009 3:25:26 PM

We're getting the afternoon pullback so now watch for to see if SPX 823 holds (two equal legs down from this morning's high. That could set us up for a bigger rally leg on Monday (850 upside target) before turning back down again.

Jeff Bailey : 2/13/2009 3:25:23 PM

That's the "headline" that some traders see. YOU know the real story.

Jeff Bailey : 2/13/2009 3:24:47 PM

dj- Oil Futures: Crude Settles +10.4% at $37.51, After 5 Losses

Crude Gain Biggest in Single-Day Since Dec 31.

Jeff Bailey : 2/13/2009 3:05:17 PM

Email Question: ... Jeff, I'm currently short oil futures and am wanting your take on price action into next week's termination.

Jeff's Reply: ... It depends what contract you're short, but I'd be cautious holding short March as the contango spread is nearing a historical high and we'd likely see the March firm on some short covering, and roll begin.

Jeff Bailey : 2/13/2009 3:00:15 PM

March and April Nymex Crude ... daily intervals Link

Cursor box set at 02/12/09 bar.

Jeff Bailey : 2/13/2009 2:53:56 PM

March and April Nymex Crude daily intervals Link

Cursor box set at 02/10/09 bar.

Jeff Bailey : 2/13/2009 2:38:22 PM

Much different internals at this point than late yesterday "response"

Jane Fox : 2/13/2009 2:37:39 PM

House Passes $787 Billion Economic Stimulus Bill The compromise package was approved by a vote of 246-183.

Jeff Bailey : 2/13/2009 2:36:54 PM

TRINQ 0.60

Jeff Bailey : 2/13/2009 2:36:42 PM

NASDAQ a/d 1,319/1,365

Jeff Bailey : 2/13/2009 2:36:21 PM

TRIN 1.18

Jeff Bailey : 2/13/2009 2:36:14 PM

NYSE a/d 1,284/1,684

Jeff Bailey : 2/13/2009 2:32:56 PM

Option Credit Spread ... A financial derivative contract that transfers credit risk from one party to another. An initial premium is paid by the buyer in exchange for potential cash flows if a given credit spread changes from its current level.

The buyer of a credit spread option will receive cash flows if the credit spread between two specific benchmarks widens or narrows. Credit spread options come in the form of both calls and puts, allowing both long and short credit positions.

Jeff Bailey : 2/13/2009 2:28:01 PM

Any specific ideas Jane?

Jeff Bailey : 2/13/2009 2:27:01 PM

VIX.X 41.21

Jeff Bailey : 2/13/2009 2:25:30 PM

Energy Futures at 02:19:44 Link

Jeff Bailey : 2/13/2009 2:22:01 PM

02:00 Internals at this Link

Jeff Bailey : 2/13/2009 2:13:23 PM

OK ... (see 01:36:11) Don't wait to the last minute!

Jane Fox : 2/13/2009 2:13:01 PM

The SPX is working its way through a very clear area of congestion and a close below support or above resistance should bring on more buying or selling. In any case this congestion is good for credit spread traders. Link

Jane Fox : 2/13/2009 2:11:40 PM

Jeff Crude will not switch to the APRIL contract until 3 busines days before the 25th.

Jeff Bailey : 2/13/2009 2:10:14 PM

Oh... I should say regular session derived ...

Jeff Bailey : 2/13/2009 2:08:40 PM

Should turn on your QCharts DAILY and WKLY Pivot levels too. Allllllll computer right now.

Jeff Bailey : 2/13/2009 2:07:09 PM

Good eye Jane! ... At least the March contract.

Jane Fox : 2/13/2009 2:03:02 PM

My goodness Crude is up over $3.00 today. Link

Keene Little : 2/13/2009 2:02:37 PM

I've highlighted on the SPX daily chart the break on January 12th of the RSI uptrend line from October. On that date price broke below the uptrend line from December 1st. That December 1st low was near 816 and since that time it has acted as a shelf of support. SPX daily chart: Link

I've identified on the daily chart 804 as a key level to the downside but I think another break below 816 would be a sell signal. In the meantime we wait to see what kind of bounce pattern we're going to get here.

Correction to my last post--Monday is closed so Tuesday for another leg up in the bounce if we see another pullback this afternoon. (Thanks Barry).

Jeff Bailey : 2/13/2009 2:00:18 PM

TRINQ 0.51 ... BELOW DAILY Pivot.

Jeff Bailey : 2/13/2009 1:59:48 PM

TRIN 0.89

Jeff Bailey : 2/13/2009 1:59:27 PM

NASDAQ a/d 1,421/1,269

Jeff Bailey : 2/13/2009 1:59:16 PM

NYSE a/d 1,466/1,500

Jeff Bailey : 2/13/2009 1:57:25 PM

QQQQ $30.69 +0.42% ...

Keene Little : 2/13/2009 1:56:13 PM

Another hope-filled spurt to the upside. As part of a larger pullback pattern for today I would not be surprised to see the current bounce get retraced and make a new low this afternoon. That would then set up the potential rally leg on Monday to complete a larger upward correction.

Jeff Bailey : 2/13/2009 1:56:11 PM

Day trade short cover alert! ... the CHK 1/2 position short at the offer of $18.91

Jeff Bailey : 2/13/2009 1:48:30 PM

dj- White House: Obama to outline foreclosure plan Wednesday

Jeff Bailey : 2/13/2009 1:36:11 PM

Energy Futures Link

Per some of last week's, this week's questions and comments.

Keene Little : 2/13/2009 1:28:58 PM

The continuous contract for oil, CL, is getting a little bounce today but it's still struggling with the downtrend line from July 2008. It got pushed down by its 50-dma last week. Bullishly it continues to hold above its longer-term uptrend line from 1998-2002, currently near 32.70. Bearishly the uptrend lines on MACD and RSI from October have been broken. That's usually a very good clue that the price trend (flat in this case with support near 35) will also break. CL daily chart: Link

Jeff Bailey : 2/13/2009 1:23:48 PM

Be very al_rt if trading the near-month crude oil futures.

Jeff Bailey : 2/13/2009 1:22:59 PM

USO $26.13 (unch) ...

Jeff Bailey : 2/13/2009 1:21:41 PM

Contango Alert!

Jeff Bailey : 2/13/2009 1:10:32 PM

dj- FBI: No sign Buffalo Plane Crash Was Act of Terror, or Crime

Jeff Bailey : 2/13/2009 1:09:43 PM

dj- Argentina's 4Q GDP +4.9% On Year, -0.3% On Quarter

Keene Little : 2/13/2009 1:07:27 PM

While I'm trying to figure out the short-term pattern, to help figure out whether the next leg down starts from here or after a higher bounce, the bottom line is that there is a very high likelihood that we're going to head lower. Therefore longer-term players should remain flat or short. The difficulty for shorter-term traders, especially heading into opex week, is where to be positioned for next week. It's not clear at the moment and therefore stay cautious about either side at the moment.

Jane Fox : 2/13/2009 1:00:06 PM

ES is making new daily lows but the VIX is not making new daily highs so this decline will not have any followthrough. Link

Jeff Bailey : 2/13/2009 12:59:07 PM

iShares Japan (EWJ) $8.08 -2.17% ... undercuts yesterday's lows.

Jeff Bailey : 2/13/2009 12:57:47 PM

YM 7,812 ... know where you are.

Keene Little : 2/13/2009 12:56:47 PM

I'm watching for evidence that we could get a larger bounce off yesterday's low. If today's decline looks more corrective than impulsive (jury's still out on that one) and it holds at or above SPX 820 we could get another leg up to the 861 area by Monday/Tuesday before it the bounce finishes, shown in pink on the 60-min chart: Link

Because of the messy pattern at this point it's a challenge figuring out what the key level is to the downside before it becomes more bearish again. Below 820 would be a heads up but more importantly I'll need to see some impulsive price action to the downside. That will take a little more time to determine.

Jeff Bailey : 2/13/2009 12:56:33 PM

CHK Green #1

Jeff Bailey : 2/13/2009 12:55:24 PM

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

(1) PBR-PK, CTIC, (1) UBO-DE, (1) UNH-NT, (1) SWQ-DB, (1) CHK-OW, and day trade short 1/2 CHK are the positions.

Jeff Bailey : 2/13/2009 12:30:40 PM

CHK day trader's chart Link

Jeff Bailey : 2/13/2009 12:21:53 PM

SPX 828.48 -0.80% ...

Jeff Bailey : 2/13/2009 12:21:27 PM

BIX.X 74.61 -5.75% ... sits on DAILY S1 and yesterday's "news" bid.

Jeff Bailey : 2/13/2009 12:18:39 PM

12:00 Internals at this Link

Jeff Bailey : 2/13/2009 12:03:09 PM

dj- Chilean Peso Ends 2.4% firmer at 4-mo high; Shrugs off rate cut

Jeff Bailey : 2/13/2009 11:56:57 AM

Disclosure: I currently hold bearish position in CHK.

Keene Little : 2/13/2009 11:56:18 AM

The market should hold here if we've got more upside work to do.

Jeff Bailey : 2/13/2009 11:55:27 AM

CHK short ... Stop goes $19.06. Target $18.12.

Jeff Bailey : 2/13/2009 11:54:39 AM

Day trade short alert! 1/2 position in shares of Chesapeake Energy (CHK) at the bid of $18.80

Keene Little : 2/13/2009 11:27:48 AM

One idea that calls for another rally leg should see SPX find support at this morning's low (maybe a minor break). Much lower than this morning's low could signal a top is in but now I'm not so sure about that (based on the corrective pattern of this morning's push to a new high which could be simply part of a larger bounce pattern). I'm sitting back and watching for a bit to see what kind of decline develops if this morning's low breaks.

Keene Little : 2/13/2009 11:18:58 AM

SPX has been oscillating around the uptrend line from November and is currently pulling back to it at 833.

Jeff Bailey : 2/13/2009 11:12:09 AM

PBR $30.08 +2.06% ... 15-minute intervals chart with QUARTERLY/MONTHLY Pivot retracement. QCharts' WKLY Pivot Levels turned on Link

Jeff Bailey : 2/13/2009 11:06:03 AM

RKH $47.95 -3.20% ... On WKLY S1 ($47.94).

Jeff Bailey : 2/13/2009 11:02:53 AM

INDU 7,954 +0.28% ... still pinned under WKLY S1.

Jeff Bailey : 2/13/2009 11:01:53 AM

NDX.X 1,249.66 +0.55% ... reclaims WKLY Pivot.

Keene Little : 2/13/2009 10:59:55 AM

The rally looks to me like it's struggling. If we get one more push to a minor new high (which would have ES testing its overnight high) with negative divergences on the 5 and 10-min charts it's going to look like an ending pattern for the bounce off this morning's pullback. SPX 843 is the 50% retracement of this week's decline and that's an upside target for now. A break of this morning's low would be bearish.

Jeff Bailey : 2/13/2009 10:53:16 AM

Various Feb Max Pain tabulations as of 2/11/09 with current intra-day trade Link

Jeff Bailey : 2/13/2009 10:47:21 AM

Reminder: Markets Closed Monday for Presidents' Day.

Jeff Bailey : 2/13/2009 10:43:00 AM

Reminder: Next Friday is February option expiration.

Nymex March Crude Oil futures termination (OI currently 169,986 contracts).

Jane Fox : 2/13/2009 10:34:07 AM

Wow the DOW is up a whole 10 points. Exciting day so far - NOT!

Jane Fox : 2/13/2009 10:31:16 AM

Well the bulls finally decided to get out of bed - about time. Unfortunately though they have not shown up at the ball game. Link

Keene Little : 2/13/2009 10:29:49 AM

New highs for the cash indexes negates the short play setup so stand aside on that one. Now waiting to see what happens if and when the overnight highs in the futures are tested.

Jeff Bailey : 2/13/2009 10:13:59 AM

10:00 Internals found at this Link

Keene Little : 2/13/2009 10:10:43 AM

This time the RUT is showing more relative strength and has pushed above yesterday's high. That one could be leading the way today so honor your stop if short. We could see at least a retest of the overnight high in futures. ES 840.50 would be about SPX 839 (above yesterday's high).

Jane Fox : 2/13/2009 10:05:22 AM

WASHINGTON (MarketWatch) -- Amid persistent economic turmoil, a consumer sentiment index fell in early February to 56.2 from 61.2 in January, according to a media report of a survey released Friday by the University of Michigan and Reuters. Analysts polled by MarketWatch were looking for a February reading of 61. With sentiment remaining near historically low levels, it's clear that the widespread economic weakness is weighing down consumers even as Washington works on a massive stimulus plan to create jobs and enhance the national benefit safety net.

Jane Fox : 2/13/2009 9:54:03 AM

We are waiting for the 9:55 release of the University of Michigan Consumer Sentiment and inflation expectations.

Jane Fox : 2/13/2009 9:48:22 AM

Internals are all pointing bearish. Link

Jane Fox : 2/13/2009 9:46:50 AM

Gold continues to trade within a bearish ascending wedge with the MACD confirming the bearishness (MACD is making lower highs while price is making higher highs). Link

Keene Little : 2/13/2009 9:45:11 AM

With the early drop in the cash indices, just above yesterday's highs is the right place for stops on a short play. The setup required an immediate down day and so far that's what we've got. Any reversal back up would negate the pattern and I would bail on the short play and stand aside.

Jane Fox : 2/13/2009 9:35:29 AM

AD line opens about as neutral as it can at -79

Jane Fox : 2/13/2009 9:32:20 AM

Crude seems to be defying the old adage what goes down must go back up - at some point.

Jane Fox : 2/13/2009 9:31:15 AM

Crude hit a low of $33.55 yesterday and continues to be weak today. Link

Jane Fox : 2/13/2009 9:27:09 AM

Markets closed strong yesterday and consolidated sideways for most of the overnight session. One would expect the consolidation to break to the upside but it didn?t, it broke to the downside. It is quite bearish when a bullish formation fails. Link

Keene Little : 2/13/2009 9:23:40 AM

Equity futures were holding up pretty well most of the night but then dropped into negative territory after the last rally attempt to the overnight highs near 7:00 AM. It looks like we'll start the day with a small gap down. A run back up to retest the overnight high (ES 840.50) is a possibility and that would threaten the short play from the end of the day yesterday. That play calls for a stop above yesterday's high so we could see a quick jab higher to hit the stops and then reverse right back down. Ideally, for the play, there will be no retest.

Jeff Bailey : 2/13/2009 1:15:51 AM

NQ ... the "hammer" 5-minute chart. See the difference between it and YM "the nail" Link

Jeff Bailey : 2/13/2009 1:06:39 AM

YM 5-minute recap Link

Same chart as Friday evening, but "critical support" area now "critical resistance" area and that sure appears to be the way computers are trading it.

First trade today was SHORT this afternoon on dip back below DAILY S1. Not show was "conventional" I had and 61.8% kept things in check.

Ah yes, the two longs above DAILY S1. We've traded that two (2) other times in recent weeks (tough on the first, winner on the 2nd). Didn't get that today and after three trades (2 loss, 1 even) I stepped asside. Thought for sure "close at the lows" when the news hit.

See how the up move sliced the daily levels like there were not there?

This suggests the computers are set with some type of VOLUME trigger on them, probably to compensate for MARKET ENVIRONMENT and news. When the volume EXCEEDS a run rate, the computers seem to "shut down" a bit and their TRADE SIZE along with it.

Jeff Bailey : 2/13/2009 12:54:25 AM

12:12:27 DJ- Plane Crashes In Buffalo, NY

A Continental Airlines plane with at least 50 people aboard has crashed in Buffalo, New York late Thursday, media reports said. The plane went down shortly after 10 pm local time, the Buffalo News said, adding that mechanical problems were reported as they approached Buffalo airport. CNN said the commercial flight was headed to Buffalo from Newark. It is not immediately clear how many people were injured or sent to hospital.

Jeff Bailey : 2/13/2009 12:47:30 AM

It is debatable as to what sparked the INDU and SPX recovery Thursday afternoon. Goldman denial hit the DowJones newswire on the button, but report of individual mortgage relief may have also hit on Reuters/CNBC.

Anyhow, sellers vanished and all that was left was some buyers and likely day trade shorts.

Never could get on track with the YM today (1 short, 2 longs) and bugger ended up right at WKLY S1.

I'm certain the "short strength" traders are struggling even more with the NQ. They'll continue to struggle as it will likely turn up first intraday. It's tempting as it does look more "overbought" relative to the much WEAKER YM/INDU.

Heck, the PBR short from Wednesday and close monitor this morning and session low right at the Quarterly Pivot. For right now, PBR=QQQQ and tough as nails.

Market psychology toward new administration and Treasury is already on eggshells (in my opinion) as this is not good of buy-side psychology. I'm all for "making sure" of Treasury decision and not trying to just throw money at the problem, but the comments coming aren't that assuring as to them even having a plan.

Making it sound like you know what you're doing, even if you don't, is better than sounding like you DO NOT know what you're doing.

Again ... "Let the best come forward and demonstrate their ability to EARN the reward."

Jeff Bailey : 2/13/2009 12:31:53 AM

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

Jeff Bailey : 2/13/2009 12:23:26 AM

Closing Internals found at this Link

Keene Little : 2/12/2009 10:33:09 PM

Friday's pivot table: Link

As shown at the end of the day on the SPX 5-min chart ( Link ) I'm looking for an immediate reversal back down Friday morning. If we get the reversal then the stop on a short play should be just above the high. The dark red wave count on the 60-min chart calls for a strong leg down that should make it quickly down to the November low (741). Link

But if the rally continues, either right away or after a pullback, then I'll be watching for possible resistance at the 50% and 62% retracements at 843 and 860. Higher than 860 would support a bigger bounce back up to 875, potentially up to 900. Friday's direction should set the direction for next week.

OI Technical Staff : 2/12/2009 9:59:59 PM

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