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Jeff Bailey : 2/17/2009 5:12:48 PM

Chesapeake Energy (CHK) $17.12 -7.95% ... $16.35 extended on headline numbers.

CHK Earnings Press Release Link

Consensus was for EPS of $0.75/share on Revenue of $2.58 billion.

Jeff Bailey : 2/17/2009 4:59:54 PM

Closing Internals at this Link

Jeff Bailey : 2/17/2009 4:44:58 PM

dj- German Bank (update)

Germany's government has finalized a bill that seeks to allow the forced nationalization of banks as a last resort during a time limit of several months to prevent the collapse of a bank resulting in a systemic crisis, German finance ministry spokesman Stefan Olbermann told Dow Jones Newswires Tuesday. "There has been an agreement," he said. "We will go into the cabinet with an agreed draft." He said he would provide more details Wednesday. Key ministers met Tuesday to finalize the draft bank rescue bill, known as the financial market stability supplementary law. The bill comes as the government seeks to gain control over troubled property financier Hypo Real Estate Holding AG (HRX.XE), which has already received EUR102 billion in loans and state guarantees. A forced nationalization of the bank and the expropriation of Hypo RE shareholders is planned as an option for the government if it fails to secure a controlling majority in the bank. The government believes a controlling majority in the bank is needed to help restructure it. The Cabinet is set to vote on the measures Wednesday. However, lawmakers in the Parliament can also make amendments before the final approval. The bill foresees allowing forced nationalization until Oct.31. The German government, which has been involved in the Hypo RE rescue since last fall, has been mulling several options for Hypo RE and other German banks to prevent a systemic crisis as it's rescue of the bank has gradually been stepped up and extended. It has been considering obtaining a controlling majority of 75% plus one share in Hypo RE by buying out current shareholders, or obtaining 95% followed by a squeeze-out of remaining minority shareholders. The move comes during talks about acquiring the investor's stake with JC Flowers, who coordinates an investor group that holds 23.7% in Hypo RE and is the company's largest shareholder. A forced nationalization has been controversial in Germany. Nazi Germany seized Jewish assets and, after World War II, the Communist East German government ran companies. The current EUR102 billion emergency package for Hypo RE, which is a key lender to local governments and the real-estate industry, includes EUR50 billion in bank loans from a consortium of German banks and the German government, and another EUR52 billion in state guarantees from SoFFin.

Jeff Bailey : 2/17/2009 4:38:46 PM

dj (correction alert!) ... Disregard the German Bank Rescue Bill headlines

Per today's MM 03:03:28, 03:04:58, 03:06:02, 03:07:42

Jeff Bailey : 2/17/2009 4:32:40 PM

Closing U.S. Market Watch at this Link

XLF, BIX.X, BKX.X, TRAN, GSG, USO and UNG close below prior intra-day 52-week lows.

Jeff Bailey : 2/17/2009 4:32:31 PM

QQQQ $29.15 -4.20% ... finishes 5-cents below 38.2% of 11/20/08 low to 01/06/09 high. Just about on upward trend.

Still off the "certain failure" close of $28.00.

If short this market, I would have to agree with Keene's 04:04:47

Jeff Bailey : 2/17/2009 4:11:06 PM

SPY $9.18 -4.32% ... to the close

Jeff Bailey : 2/17/2009 4:10:37 PM

DIA $75.76 -3.55% ... to the close.

Jeff Bailey : 2/17/2009 4:08:20 PM

May Crude (cl09k) settled down $3.71, or -8.25% at $41.23.

Keene Little : 2/17/2009 4:07:47 PM

If you're short the market and do not want to tolerate a bounce tomorrow and possibly into Thursday, this being opex week, think about covering some of your position tonight or first thing tomorrow morning--drag your stop down close and don't let a bounce get away from you. If you're a little longer-term oriented in your position and don't mind a bounce going up to as high as 815 or so in the next day then stick with the short side for now. The bounce is only a possibility, not a given.

Jeff Bailey : 2/17/2009 4:05:53 PM

April Crude (cl09j) settled down $3.43, or -8.17% at $38.54.

Jeff Bailey : 2/17/2009 4:04:45 PM

March Crude (cl09h) settled down $2.58, or -6.88% at $34.93

Jane Fox : 2/17/2009 4:03:38 PM

SPX is going to close at the lows of the day and below 800.

Jane Fox : 2/17/2009 4:02:02 PM

Here is the West Texas March contract. Link

Here is the West Texas April Contract Link

Here is the Brent Crude April Contract Link

Keene Little : 2/17/2009 3:55:24 PM

This SPX 15-min chart shows where I think we are in the wave count for the move down from Friday. One more minor new low, target 786, could lead to a bounce tomorrow and into early Thursday before heading lower again on Friday and into next week. Link

Keene Little : 2/17/2009 3:41:54 PM

This afternoon's spike up continues to fit well as the completion of an A-B-C bounce off this morning's low (upside target is SPX 805-806). It should be followed by another leg down below SPX 790. But it might not drop that much lower before getting a larger bounce tomorrow, potentially back up to around SPX 810 to correct the leg down from Friday. Once that bounce is complete we should then get a very strong decline towards the November low (and the DOW will very likely break its November low first, and follow the Transports).

Jeff Bailey : 2/17/2009 3:39:46 PM

DIA $76.84 -2.22% ... DIJ-BC $0.13 x $0.14

$VXO.X 47.42 +10.92%

Jeff Bailey : 2/17/2009 3:36:06 PM

DIA $76.66 alert!

Keene Little : 2/17/2009 3:35:22 PM

Here comes the PPT in time to try to rescue SPX from a close below 800.

Jeff Bailey : 2/17/2009 3:34:25 PM

BIX.X 66.27 -10.42% ... undercutting WKLY S1.

Jeff Bailey : 2/17/2009 3:30:13 PM

US Market Watch at time of Stimulus Bill signing Link

Keene Little : 2/17/2009 3:27:09 PM

Banks and brokers are making new daily lows here. Guess who's going to follow.

Jeff Bailey : 2/17/2009 3:25:52 PM

dj- Obama: Stimulus bill marks first steps of economic recovery

Jeff Bailey : 2/17/2009 3:24:40 PM

USO $23.55 -8.00% ...

Jeff Bailey : 2/17/2009 3:24:24 PM

PBR $27.84 -7.17% ...

Jeff Bailey : 2/17/2009 3:24:08 PM

dj- Brazil's Petroleo Brasileiro: January overall gas, oil production 2.434M BOE/Day

Oil production 1.923M bbl/day.

Jeff Bailey : 2/17/2009 3:16:35 PM

Recovery.gov Link

Jeff Bailey : 2/17/2009 3:07:42 PM

dj- German MOF: Govt. Agrees On Bank Rescue Bill

Jeff Bailey : 2/17/2009 3:06:02 PM

Euro CurrencyShares (FXE) $126.16 -2.11% ...

Jeff Bailey : 2/17/2009 3:04:58 PM

Deutsche Bank (DB) $25.08 -13.24% ...

Jeff Bailey : 2/17/2009 3:04:03 PM

dj- Germany: Govt. Bank Rescue Bill To Include Forced Nationalization Option ... Alert!

Keene Little : 2/17/2009 2:58:45 PM

I agree with Jane--today's bounce/consolidation is clearly a correction following this morning's strong move down. We should get another leg down following this consolidation.

Jane Fox : 2/17/2009 2:54:58 PM

I would not be trying any long positions. If we get any kind of move I think it will be down. Link

Jeff Bailey : 2/17/2009 2:43:52 PM

GM $2.19 -12.4%, AXP $14.23 -9.59%, C $3.18 -8.88%, BAC $5.06 -9.15%, JPM $22.66 -8.22%

Jeff Bailey : 2/17/2009 2:42:34 PM

WMT $48.18 +3.54%

MRK $28.83 +0.31%

Jeff Bailey : 2/17/2009 2:41:49 PM

YM 7,605

Jeff Bailey : 2/17/2009 2:16:56 PM

dj- BOE's Besley: Weaker pound to push up traded goods prices

Jeff Bailey : 2/17/2009 2:15:44 PM

dj- RUSSIA LOWERS 2009 GDP FORECAST

Russia's Ministry for Economic Development says that it expects the economy to contract by 2.2% this year, substantially revising down its earlier forecast of a 0.2% contraction. See a roundup of grim economic reports out of Eastern Europe.

Jeff Bailey : 2/17/2009 2:14:21 PM

dj- NY AG SAYS CIGNA WILL PAY $10M FOR DATABASE

N.Y. Attorney General Andrew Cuomo says Cigna Corp. will pay $10 million to help establish a new independent database to determine the rate it pays doctors and hospitals out of its network.

Jeff Bailey : 2/17/2009 2:11:14 PM

02:00 Internals at this Link

Jane Fox : 2/17/2009 1:55:42 PM

We had a very volatile overnight session so it is not surprising today a sideways consolidation. Link

Keene Little : 2/17/2009 1:48:24 PM

If we get a stronger leg up from here it could complete an A-B-C bounce off this morning's low. SPX 805 would be the upside target for it.

Jeff Bailey : 2/17/2009 1:45:46 PM

American Express (AXP) $14.23 -9.59% ... new 52-weeker.

Jeff Bailey : 2/17/2009 1:34:26 PM

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

DIJ-BC were close at $0.19.

Jeff Bailey : 2/17/2009 1:17:39 PM

FCX-NE $0.42 x $0.43 currently.

FCX $27.16 -10.98%

VIX.X 49.03 +14.20%

Jeff Bailey : 2/17/2009 1:15:16 PM

VIX.X 49.12

Jane Fox : 2/17/2009 1:13:14 PM

WASHINGTON (MarketWatch) - Lured by lower mortgage rates, potential home buyers are window shopping a little more at new housing developments, but the builders are still pessimistic about closing the deal, the National Association of Home Builders said Monday. The home builders' sentiment index improved for the first time since September, rising one point to 9 from a historic low of 8 in January. The index measuring traffic of prospective buyers improved to 11 from 7 in January. However, the index of expected sales over the next six months fell to a record low of 15 in February from 17 in January. Current sales rose to 7 from a record-low of 6.

Jeff Bailey : 2/17/2009 1:15:09 PM

FCX short ... Stop goes $32.00. Target $20.00

Jeff Bailey : 2/17/2009 1:15:04 PM

Swing trade short alert! ... for just more than 1/4 position in shares of Freeport McMoran Copper (FCX) at the bid of $27.16.

100 shares of the 10K MM account.

Keene Little : 2/17/2009 1:10:45 PM

A couple of interesting observations from Ed:

Obama to sign new fiscal stimulus plan today. Of the $507 billion of new spending, less than 10% is aimed at infrastructure outlays. Of the $282 billion in tax cuts, 25% is the typical annual provision that spares tax filers from being ensnared by the AMT.

Over 40% of the tax relief is in tax credits. Individuals are likely to see up to $400 and couples up to $800 of proceeds via lower withholding taxes on their paychecks. Only $8 per paycheck to end this recession! Wow! What a bargain!

Looking at THIRD quarter S&P EPS, at $9.73 per share, it was no higher than 2Q '96. The S&P was at 660 that quarter and Greenspan was warning of irrational exuberance. Anyone think equities are undervalued here?

Mass Layoffs (more than 50 people at a time) nearly doubled in 4Q from 3Q.

Rather sobering--thanks Ed.

Jeff Bailey : 2/17/2009 1:09:26 PM

6-month Bill Auction: 0.470%; 55.24% at the high. Bid-to-cover was 3.01

Jeff Bailey : 2/17/2009 1:08:46 PM

3-month Bill Auction: 0.325%; 76.27% at the high. Bid-to-cover was 3.13

Jeff Bailey : 2/17/2009 1:06:01 PM

dj- NAHB: US Home Builder's Mood Climbs; First Rise In 5 Mos

The confidence of U.S. home builders, while still in the dumps, managed something in February it hasn't done in five months: It rose. The National Association of Home Builders on Tuesday released results of a monthly survey of builders' thoughts on market prospects. Its latest index for sales of new, single-family homes climbed to 9, up from an all-time low of 8 in January. The last time the housing market index, or HMI, showed an increase was September. But conditions are awful. The latest government data show new-home sales dropped by about 15% to 331,000 in December. Year over year, sales were around 45% lower. Builders don't want to break new ground because the market is awash in unsold property. Bloated inventories are driving down prices. Falling prices, in turn, and a recession that's throwing people out of work have combined to undercut demand. "The market for new single-family homes remains very weak at this time," NAHB Chairman Joe Robson said. Congress has approved a $789 billion plan to stimulate the slumping economy. The legislation includes an $8,000 first-time home buyer tax credit. Builders hope the package excites moribund demand for housing. "Looking forward, we are certainly hopeful that the newly passed economic stimulus bill, which includes some favorable elements for first-time home buyers and small businesses, will have a positive impact that will help get housing and the economy back on track," said Robson, a builder from Tulsa, Okla. A component within the housing market index that measures current sales conditions rose to seven during February, up from six. An index gauging traffic of prospective buyers rose by three points to 11. But the index gauging sales expectations in the next six months fell to a new record low of 15 from 17. "Home builders are especially concerned about the continually rising number of foreclosures and short sales, which are flooding the market with excess inventory and undermining overall home values," said David Crowe, NAHB's chief economist. "This is one reason that home builder expectations for the next six months declined in the February HMI even though traffic of prospective buyers has improved somewhat and present sales conditions were basically unchanged." The NAHB's overall housing market index for February was based on a survey of 421 home builders, who answer questions about sales prospects now and in the near term. When the Housing Market Index exceeds 50, it means the number of builders who see "good" sales outnumber the number who see "poor" sales. The numbers used in compiling the index are adjusted for seasonal variations.

Jane Fox : 2/17/2009 12:34:03 PM

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission on Tuesday alleged Robert Allen Stanford and three of his companies defrauded investors in an $8 billion certificates of deposit scheme. Stanford's companies include Antiguan-based Stanford International Bank, Houston-based broker-dealer and investment adviser Stanford Group Co., and investment adviser Stanford Capital Management. The SEC also charged Stanford International Bank's chief financial officer James Davis and Stanford Financial Group's chief investment officer Laura Pendergest-Holt. "As we allege in our complaint, Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors," said Linda Chatman Thomsen, the SEC's enforcement division director, in a statement.

Keene Little : 2/17/2009 12:30:10 PM

Either the market is getting ready to let go to the downside again or it's in a small ending pattern that might give us only a minor new low today before heading back up in a stronger bounce. The pattern still calls for lower prices but I don't discount the possibility for an afternoon rally to ensure SPX closes above 800.

Jeff Bailey : 2/17/2009 12:27:58 PM

dj- SEC charges R. Allen Stanford, several related entities with $8B securities fraud

Jeff Bailey : 2/17/2009 12:19:51 PM

12:00 Internals at this Link

Jane Fox : 2/17/2009 12:08:47 PM

The SPX breaks below it 800 support and the bears have taken control again. I know this is grasping at straws but the bears really do need the SPX to close below 800 for it to be game over. Link

Jeff Bailey : 2/17/2009 12:04:32 PM

CHK $17.15 -7.90% ...

CHK-OW $1.80 x $1.90

Jeff Bailey : 2/17/2009 12:03:55 PM

UNH $28.10 -2.96% ...

UNH-NT $0.55 x $0.65 (expire Friday's close).

Jeff Bailey : 2/17/2009 12:03:09 PM

PBR $27.78 -7.30%

PBR-PK $1.10 x $1.20

Jeff Bailey : 2/17/2009 11:51:59 AM

VIX.X 30-minute interval chart with QCharts' WKLY Pivot Levels (RSD) turned on Link

Will be looking to sell some PUTS (long, or out the money covered) should VIX.X lurch above near-term overlap (~51.30) to the MR1/QPiv.

Keene Little : 2/17/2009 11:36:51 AM

One other comment about the expected leg down to a new low in March--it could take a lot longer than that. If the 5th wave takes the same amount of time as the 1st wave that puts the bottom out in early July. On the NDX weekly chart I show the end of the 3rd wave took a Fibonacci 55 weeks from the October high. A Fibonacci 89 weeks from the October high is in mid July.

I like a bottom in March to fit some cyclical studies but if the Fibonacci time sequences are going to have anything to say about it we could see more of a grinding lower into the summer rather than a sharper decline into March. I for one am voting for a let's-get-it-done decline so we can start looking for some buying opportunities this year. But if you're playing long put options you need to understand the market could take a lot longer for the move down than I'm showing on the weekly chart.

Keene Little : 2/17/2009 11:26:23 AM

Playing around with a typical wave pattern for a 5th wave down (to complete the 5-wave move down from October 2007) for NDX, I've updated its daily chart to show what a typical pattern for it would look like: Link . This is obviously speculative at this time and I'll keep updating it along the way. One thing to be cautious about 5th waves is that they're unreliable--they can extend or truncate (finish shorter than expected) or anything in between.

But the typical wave sizes and time sequence in relation to each other is what I'm showing and a bottom around 800 by the end of the March is how it plays out. And if it does play out this way there will be many people expressing grave concern about the market and how it's not a good time to be invested, etc. That's when I'll want to be a longer-term buyer. The weekly chart shows the wave count for the decline from October 2007: Link

Jeff Bailey : 2/17/2009 11:25:58 AM

DIA $76.28 ... session low still $75.77 (2-cents below MONTHLY S1) RSD

Jeff Bailey : 2/17/2009 11:24:54 AM

YM 5-minute intervals Link

Overlaps from RSD pivot retracement continue to hold, but buyers certainly not eager/aggressive.

Jeff Bailey : 2/17/2009 11:17:09 AM

iShares Japan (EWJ) $7.80 -2.98% ... probes its 10/27/08 low CLOSE.

Keene Little : 2/17/2009 11:06:01 AM

NDX is fighting to hold onto its uptrend line from November, currently near 1195). It dropped below it this morning but has since bounced slightly back above it. While I don't expect it to rally back up from here (this morning's gap should not be filled if the market has started its journey to new lows) I am leaving the possibility for a run back up to the 1390 area on the chart (pink) until the uptrend line is firmly broken (1195) and holds as resistance on a retest. NDX 60-min chart: Link

As shown on the SPX chart, two equal legs down from February's high is near 1169 and is the first downside target. Then the January 20th low near 1137 before breaking that and heading lower still.

Jeff Bailey : 2/17/2009 11:03:41 AM

YM long stop alert! 7,585

Jeff Bailey : 2/17/2009 11:00:03 AM

YM long raise stop alert! ... to 7,585

YM 7,595

Jeff Bailey : 2/17/2009 10:55:05 AM

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

YM 7,600

Keene Little : 2/17/2009 10:51:58 AM

The wave count for the stock market for the move down from Friday's high looks like it should stair-step lower for the rest of the day. We should see the current small bounce followed by a new low and then another bounce and new low before looking for a larger correction to the upside.

Jeff Bailey : 2/17/2009 10:49:10 AM

YM long ... stop goes 7,550. Target 7,670

Jeff Bailey : 2/17/2009 10:48:16 AM

YM long alert! 7,575

Keene Little : 2/17/2009 10:47:48 AM

USO is the poor little fund that couldn't. It's attempt during January and the first part of February to hold support and break its downtrend line from July 2008 was more of a "I think I can't, I think I can't". The break of its shelf of support near 27.75 is bearish and what's even more bearish is the break of the uptrend lines on MACD and RSI as shown on the daily chart: Link

The bullish divergences from September and October are no more. The inability for MACD to get above zero in January was our telltale. The bottom for USO looks to be a ways off at this point as the wave pattern now needs more downside work to do before it too could be considered complete. Best guess for the moment is that we'll see USO below 20.

Jane Fox : 2/17/2009 10:35:10 AM

The benchmark for the price of Crude is West Texas Intermediate, drilled in Texas. This is the price set on the NYMEX (New York Mercantile Exchange) and is the price quoted in the paper, on CNBC and on your charts. What is happening today is that West Texas crude is selling for less than its inferior grade crude we get from around the world. Why is this you ask? Simple. The recession in the US has dramatically cut the demand for crude resulting in our storage facilities overflowing with the premium crude thus driving the price down to 5-year lows.

Now here comes the kicker, the reason we are seeing the price of gas going up. Most of the gas in the US is refined from the inferior grade crude we import from overseas. In other words, we are putting the more expensive inferior crude into our cars.

Brent North Sea Crude, which feeds the East Coast refiners is $7.00/bl more than West Texas Crude. Tesoro's refiners use locally drilled and Canadian oil which has been running about $10/bl more than West Texas crude.

We may be seeing the price of gas continuing its trek upwards while the benchmark crude we all watch continues to languish. Some reports are that we will see $2.50/gal gas before spring.

Jeff Bailey : 2/17/2009 10:31:14 AM

$BKX.X 24.14 -7.54% ... new 52-week low.

Jeff Bailey : 2/17/2009 10:30:43 AM

$TRAN 2,818 -4.69% ... new 52-week low.

Jeff Bailey : 2/17/2009 10:29:56 AM

$BIX.X 67.94 -8.16% ... new 52-week low.

Jeff Bailey : 2/17/2009 10:29:20 AM

European Markets Link ... Broadly lower. $FTSE, $DAX and $CAC track lower by ~3.0%

Jeff Bailey : 2/17/2009 10:27:00 AM

Asian Markets: Link ... were mostly lower on Tuesday. $NIKK finished down 1.35% at 7,646. $HSI was lower by 3.79% at 12,945. $SSEC fell 2.93% to 2,319.

Jeff Bailey : 2/17/2009 10:23:49 AM

UUP $26.38 +1.89% ... has gapped higher from downward trend (see last Wednesday's Market Wrap).

FXY $126.11 -2.15%...

FXY $108.17 -0.05%

FXB $142.59 -1.02% ...

Jane Fox : 2/17/2009 10:19:26 AM

This seems to be a perfect time for a sell the rally. The AD volume is telling you the bears are in control (DUH!) but the VIX is taking a dip along with the TRIN. This may be a good place to go short. Link

Jeff Bailey : 2/17/2009 10:16:27 AM

10:00 Internals at this Link

Keene Little : 2/17/2009 10:08:42 AM

Looking at the move down from Monday, February 9th, this morning's decline should be the start of the 3rd wave down. A typical projection for a strong 3rd wave is 162% of the 1st wave and as shown on the updated 60-min chart that would have SPX dropping down to its November low (741). Possible support before that would be near 775 where the move down from February 9th would have two equal legs. SPX 60-min chart: Link

The significance of the wave count on this chart is that the current leg down is the 3rd of the 3rd wave down starting from the January 6th high. These often start with a big gap down, as we got this morning. It will be the strongest leg of the decline and therefore not a time to be thinking of looking for a bottom. Ride it down or stay out of the way for now. If this picture changes I'll update it immediately.

Jane Fox : 2/17/2009 10:08:26 AM

DOW is down over 260 points.

Jeff Bailey : 2/17/2009 10:06:16 AM

AMEX Gold Bugs ($HUI.X) 320.69 +3.06% ... sector winner. Only equity-based index/sector in U.S. Market Watch currently green.

Jane Fox : 2/17/2009 10:02:15 AM

Crude April contract has a volume of 58K and March is 35K so although the continuous contract is still using March, and will until Friday, I believe April is the more valid one to watch. Link

Jeff Bailey : 2/17/2009 9:49:50 AM

Swing trade calls exit alert! for the two (2) Dow Diamonds DIA Feb $81 Calls (DIJ-BC) at the bid of $0.19

DIA $76.66 -2.40% ...

VXO.X 42.75

Keene Little : 2/17/2009 9:47:19 AM

I agree with Jane on the bullish descending wedge for oil and bearish rising wedge for gold (which itself is odd since they're usually more in synch). But I've got the top of the rising wedge for gold just a little higher, starting from the two highs January 26th and 30th. Gold is testing the top of the wedge now, as seen on this 480-min chart: Link

In addition to that it has rallied to the top of slightly wider parallel channel than I had been showing on the daily chart (and shown on the 480-min chart), with the top parallel line attached to the December 17th high: Link . Gold has made it higher than I thought it would but this is the next level of resistance I'm watching for price to fail and mark the top for gold's run.

Jane Fox : 2/17/2009 9:37:08 AM

VIX closed on Friday at 43 and opens this morning at 48.27.

Jane Fox : 2/17/2009 9:36:32 AM

AD line opens quite bearishly at -1673.

Jeff Bailey : 2/17/2009 9:33:14 AM

Weekly, Monthly, Quarterly Index Pivot Matrix Link

Jane Fox : 2/17/2009 9:23:22 AM

This chart of Gold is almost the exact opposite of Crude. It had an ascending wedge (no longer valid) and deteriorating MACD yet it still had the power to rally. It is very bullish when bearish patterns break to the upside and very bearish when bullish patterns break to the downside. Link

Jane Fox : 2/17/2009 9:19:51 AM

Crude is down about $1.75 as I type and hit a low of $35.60 overnight. This daily chart is building a bullish downward wedge along with a MACD that is holding up quite well as price continues to deteriorate. I think this market is way overdue for a really nice rally but in the meantime I sit and wait for the bulls to prove to me they are in control. Link

Keene Little : 2/17/2009 9:19:17 AM

No miraculous recovery in equity futures last night and in fact just the opposite--this morning will be one of the largest gaps to the downside we've seen. There's certainly no question at this point that we've started the next leg down (one that will at least test the November low). Bonds and gold are rallying strong as the flight to safety continues.

Jane Fox : 2/17/2009 9:12:53 AM

Here are the overnight charts. They all broke ON lows at 6:00 when the TIC Long-Term Purchases report was released. I have no data on the report yet but from looking at the futures I would say it was not encouraging. Link

Jane Fox : 2/17/2009 9:08:55 AM

SAN FRANCISCO (MarketWatch) -- U.S. automakers must carry out "significant restructuring" which will involve "concessions on the part of everyone," a senior adviser to President Barack Obama said Sunday, keeping the pressure on companies ahead of their deadline to present their plans.

"We need a thriving auto industry in this country," David Axelrod, a senior adviser to President Obama, said on "Fox News Sunday." "But as the president has said many times, that's going to involve significant restructuring of the industry so that they're looking forward and not back in producing the kind of cars that people are going to buy in the future," Axelrod said.

He said the overhaul of the U.S. auto industry would require sacrifices from "not just the auto workers, but shareholders, creditors and, of course, the executives who run the company."

Jane Fox : 2/17/2009 9:06:51 AM

Liberty Media Corp. (LINTA) has agreed to invest $530 million in the form of loans to Sirius XM (SIRI) and its subsidiaries. The first part of the loan will be used by Sirius XM to repay $171.6 million of its maturing convertible notes, due Tuesday. Upon completion of the loans, Liberty will receive preferred stock convertible into 40% of the common stock of Sirius XM and seats on the company's board.

Jane Fox : 2/17/2009 9:06:02 AM

Trump Entertainment Resorts Inc. (TRMP) , the Atlantic City casino firm that's 28% owned by real-estate investor Donald Trump, has filed for Chapter 11 bankruptcy protection, according to a Reuters report citing documents filed with the U.S. Bankruptcy Court for the District of New Jersey. Nine affiliates of the casino operator also sought protection after the company missed a $53.1 million bond interest payment in December, the report added. Donald Trump resigned as the group's chairman on Friday.

Jane Fox : 2/17/2009 9:05:08 AM

Dateline MarketWatch - General Motors Corp. (GM) and Chrysler were locked in cost-cutting negotiations with union representatives late Monday, according to a report in The Wall Street Journal. The firms are required to submit recovery plans to the government on Tuesday as part of their agreement to receive billions of dollars in federal loans. Former Lazard Freres & Co. investment banker Ron Bloom has been named as a key adviser and is expected to take a tough line with both the car makers and unions, the report said.

Jane Fox : 2/17/2009 9:04:10 AM

Retail giant Wal-Mart Stores Inc. (WMT) said Tuesday that its fourth-quarter profit fell 7.4%, hurt by higher expenses and a stronger dollar even as its low-price position has helped it win traffic and sales from budget-conscious shoppers. Net income dropped to $3.79 billion, or 96 cents a share, from $4.1 billion, or $1.02 a share, in the year-earlier period. Revenue including membership and other income rose 1.7% to $109.1 billion. Excluding costs to settle class action lawsuits, Wal-Mart said it would have earned $1.03 a share, 4 cents higher than the 99-cent consensus forecast.

Jane Fox : 2/17/2009 9:01:40 AM

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February. The general business conditions index fell to a new low of -34.7. The new orders index also fell to a new low, the unfilled orders index stayed close to its recent record low, and the shipments index?despite a slight improvement?remained negative. The indexes for both prices paid and prices received held below zero, with the latter dropping sharply. Employment indexes remained deep in negative territory; the average workweek index slipped to a record low. The future general business conditions index was negative for a second consecutive month as many of the forward-looking indexes remained close to recent lows. The future index for number of employees fell particularly sharply, eclipsing last month?s record low.

Keene Little : 2/16/2009 10:33:01 PM

Tuesday's pivot table: Link

Even though the techs have been holding up relatively well the past week or so, the bounce pattern for NDX from last Thursday's low was a cleaner finish and provided a better setup for an immediate decline this week than the setup I was seeing for SPX. I show the possibility for a continuation of the rally off last week's low, shown in pink, to retest the high near 1287 but for the moment I'm leaning towards the dark red wave count which calls for a strong selloff as the next big move: Link

The daily chart shows the potential for a strong decline into March, at least down to the 950 area if not lower to the 800 area: Link . But SPX left the door open to the possibility for another rally leg up if 820 holds, shown in pink on the 60-min chart: Link

The bulls need to keep SPX from dropping below 816, as I mentioned Friday when I showed the daily chart with the shelf of support at that level. It will probably be lights out for the bulls if that level breaks. Futures are down hard since Friday's close (ES 820) after Europe's bad day on Monday (ES has dropped to a low of 805.50). So unless there's a miraculous recovery before the morning bell we could get our answer early. SPX daily chart: Link

OI Technical Staff : 2/16/2009 9:59:59 PM

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